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- 21261
Rydex ETF Trust
(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 ETF Trust
9601 Blackwell Road, Suite 500
Rockville, Maryland 20850
(Name and address of agent for service)
Registrant's telephone number, including area code: 1-301-296-5149
Date of fiscal year end: October 31, 2008
Date of reporting period: October 31, 2008
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. Section 3507.
ITEM 1. REPORTS TO STOCKHOLDERS.
[GRAPHIC]
OCTOBER 31, 2008
RYDEX ETF TRUST
ANNUAL REPORT
RYDEX S&P EQUAL WEIGHT ETF
RYDEX RUSSELL TOP 50 ETF
[RYDEX INVESTMENTS(TM) LOGO]
ESSENTIAL FOR MODERN MARKETS
TABLE OF CONTENTS
- --------------------------------------------------------------------------------
<Table>
LETTER TO OUR
SHAREHOLDERS...... 2
FEES AND EXPENSES... 4
MANAGER'S ANALYSIS.. 5
SCHEDULE OF
INVESTMENTS....... 9
STATEMENTS OF ASSETS
AND LIABILITIES... 18
STATEMENTS OF
OPERATIONS........ 19
STATEMENTS OF
CHANGES IN NET
ASSETS............ 20
FINANCIAL
HIGHLIGHTS........ 21
NOTES TO FINANCIAL
STATEMENTS........ 23
INDEPENDENT
REGISTERED PUBLIC
ACCOUNTING FIRM'S
REPORT............ 28
SUPPLEMENTAL
INFORMATION....... 29
</Table>
1 ANNUAL REPORT
- --------------------------------------------------------------------------------
DEAR SHAREHOLDER:
Rydex is a proud participant in the ETF space with $1.7 billion in ETF assets
and more than 30 exchange traded funds. Due to their convenience, transparency
and ability to provide access to difficult to reach areas of the market, ETFs
can play an important role in investor portfolios.
Professional investment advisors are increasingly using ETFs in their
portfolios. A 2008 survey of registered investment advisors (RIAs) by Rydex
AdvisorBenchmarking(TM) revealed that three-quarters of RIAs now use ETFs and
that ETFs now slightly edge out the use of stocks in advisor portfolios. Rydex
believes that investor knowledge is paramount when contemplating investment
options. While advisor ETF use is skyrocketing, because investors still have
room for education on ETFs, Rydex now offers ETF Essentials(TM) -- A
COMPREHENSIVE GUIDE TO ETFS -- TO HELP ADVISORS EDUCATE THEIR CLIENTS ON THE
NUANCES OF ETFS. THE PROGRAM PRESENTS INFORMATION ON ETF TOPICS IN SIMPLE
UNDERSTANDABLE LANGUAGE AND IS AVAILABLE VIA PRINT AND ONLINE. IT'S ALSO FREE
AND CAN BE REQUESTED ON WWW.RYDEXINVESTMENTS.COM web site.
Market Conditions. The last 12 months proved to be the most extraordinarily
difficult period for investors in nearly a century. The crisis that unfolded
during the summer months hit nearly every conceivable asset class, resulting in
huge declines in wealth regardless of how investors had structured their
portfolios. Other than treasury bills and the U.S. dollar, no investment
category was spared the panic that washed over the world's financial markets. In
the U.S., the major stock market averages lost more than 20% of their value,
while international markets fared worse. Emerging market stocks were hit
particularly hard as shown by the nearly 60% decline in Chinese share prices.
Although commodity prices rose over the period, that masks an astounding plunge
from mid-summer highs. From early July -- when oil rose to nearly $150/barrel,
commodities -- led by oil -- fell more than 30%. Sector selection strategies
offered little respite. Only consumer staples stocks, the most defensive in the
S&P 500 Sector Index series, provided some degree of protection as that index
held losses to less than 1.5%. Other traditional safe havens such as utilities
and health care were down between 15% -25% while financial stocks, which are at
the epicenter of the crisis, fell nearly 43%.
The events of late September completely overwhelmed everything that had come
before. In an incredibly brief period, the entire global financial system seized
up as the lubricant of any economy -- bank lending -- came to a complete halt.
The resulting crash in global stock markets was as steep and deep as anything
witnessed since the crash of 1929 and continues to this day. The Wall Street
model of large, aggressive, risk-taking investment banks was completely swept
aside as financial titans such as Merrill Lynch, Morgan Stanley, Goldman Sachs
and Lehman Brothers collapsed, merged with, or were reborn as commercial banks.
Financial dominos tumbled as a wave of commercial bank failures -- the most
since the S&L crisis of the 1990s -- unfolded in the third quarter, culminating
with the collapse of Washington Mutual, the largest bank failure in U.S.
history. The other huge and profound shift is the nationalization of the global
financial system. The takeover of Fannie Mae and Freddie Mac and AIG, the
seizure of IndyMac Bank and Washington Mutual and the forced merger of Wachovia,
along with blanket guarantees of mortgage-backed securities, whole loans, intra-
bank loans, money market funds and bank deposits (both here and in Europe) point
to a near takeover of the global financial system by national governments. In
this history-making period, governments at all levels moved with unprecedented
speed, scope and coordination to save the financial system and with it the
global economy. In the U.S. this culminated with a $700 billion plan put forward
by the U.S. Treasury to essentially buy up all the bad mortgage assets clogging
the financial system. Rejection of that plan by the House of Representatives
late in September sent the markets into a tailspin with the Dow suffering its
biggest point drop in history and sending the index to three-year lows. Treasury
bill yields fell to near zero and interest rates on longer-dated treasuries fell
to a decade low in a massive flight to safety.
It is not all doom and gloom, however. This environment has broken the commodity
bubble and has resulted in a huge slowdown in global inflation. This helps the
emerging markets, whose economies and markets have been pummeled by the rise in
food and energy costs. It has also ushered in a period of dollar strength, which
gives the Fed additional room to ease. Moreover, interest rates could hardly be
lower and stocks are cheaper than they have been in some time. With the massive
amounts of liquidity pumped into the system, stocks could rally sharply in the
months ahead -- they have repeatedly shown signs of doing throughout the crisis.
Having gone through at least four false bottoms so far this year -- Societe
Generale, Bear Stearns, Fannie Mae /Freddie Mac and Lehman Brothers -- the
question is: Can any rally be sustained? The key to that question is fairly
straightforward. The allocation of credit in the bond and money markets needs to
resume. No recovery in stocks is possible without it. While capital has been
thrown at the markets and recovery plans announced, the mountain of bad debt is
still sitting on bank balance sheets. The fuel is in place for the markets to
recover -- they always do. This process is likely to be lengthy, though.
Navigating through this difficult environment will require carefully thought-out
investment strategies and the discipline to stay the course.
2
- --------------------------------------------------------------------------------
These tumultuous markets did not leave the ETF space unscathed. According to the
Investment Company Institute, over the past 12 months, while the number of ETFs
on the market has increased 19% (from 586 in October 2007 to 698 in October
2008), ETF assets decreased $105.86 billion, or 18%. Despite the market's
erosion of assets, with their numerous benefits, ETFs can provide a suitable
choice for investors looking for convenient access to the markets.
We appreciate the trust you have placed in our firm's quality and integrity by
investing with us. It is our goal to continue to offer innovative ETF choices to
meet your investment needs.
Sincerely,
- -s- David C. Reilly, CFA
David C. Reilly, CFA
Director of Portfolio Strategies
3 ANNUAL REPORT
SHAREHOLDER EXPENSE EXAMPLE
As a shareholder of the Rydex ETF Trust, you incur transaction costs such as
creation and redemption fees or brokerage charges, and ongoing costs including
advisory fees and, if applicable, distribution fees. All other Trust expenses
are paid by the advisor. This Example is intended to help you understand your
ongoing costs (in dollars) of investing in a Fund and to compare these costs
with the ongoing costs of investing in other mutual funds.
The example in the table is based on an investment of $1,000 invested on April
30, 2008 and held for the six months ended October 31, 2008.
ACTUAL EXPENSES
The first table below provides information about actual account values and
actual expenses. You may use the information in this table, together with the
amount you invested, to estimate the expenses that you incurred over the period.
Simply divide your account value by $1,000 (for example, an $8,600 account value
divided by $1,000 = 8.6), then multiply the result by the number in the first
table under the heading entitled "Expenses Paid During the Six-Month Period" to
estimate the expenses attributable to your investment during this period.
HYPOTHETICAL EXAMPLE FOR COMPARISON PURPOSES
The second table below provides information about hypothetical account values
and hypothetical expenses based on a Fund's actual expense ratio and an assumed
rate of return of 5% per year before expenses, which is not a Fund's actual
return. Thus, you should not use the hypothetical account values and expenses to
estimate the actual ending account balance or your expenses for the period.
Rather, these figures are provided to enable you to compare the ongoing costs of
investing in a Fund and other funds. To do so, compare this 5% hypothetical
example with the 5% hypothetical examples that appear in the shareholder reports
of other funds.
Please note that the expenses shown in the table are meant to highlight your
ongoing costs only and do not reflect any transaction costs, such as creation
and redemption fees, or brokerage charges. Therefore, the second table is useful
in comparing ongoing costs only, and will not help you determine the relative
total costs of owning different funds. In addition, if these transaction costs
were included, your costs would have been higher.
<Table>
<Caption>
BEGINNING ENDING EXPENSES PAID
ACCOUNT ACCOUNT DURING
VALUE VALUE SIX-MONTH PERIOD*
4/30/08 10/31/08 4/30/08 TO 10/31/08
--------- --------- -------------------
ACTUAL
Rydex S&P Equal Weight ETF............................ $1,000.00 $ 559.50 $1.57
Rydex Russell Top 50 ETF.............................. $1,000.00 $ 659.60 $0.83
HYPOTHETICAL (ASSUMING A 5% RETURN BEFORE EXPENSES)
Rydex S&P Equal Weight ETF............................ $1,000.00 $1,023.13 $2.03
Rydex Russell Top 50 ETF.............................. $1,000.00 $1,024.13 $1.02
</Table>
- --------
* Expenses are equal to the Fund's annualized expense ratio of 0.40% and
0.20% respectively, multiplied by the average account value over the
period, multiplied by 184/366 (to reflect one-half year period).
4
RYDEX S&P EQUAL WEIGHT ETF
MANAGER'S ANALYSIS (Unaudited)
- --------------------------------------------------------------------------------
Rydex S&P Equal Weight ETF (RSP) returned -39.75% for the year ending 10/31/2008
compared to the benchmark S&P Equal Weight Index and the traditional
capitalization-weighted S&P 500, which returned -39.18% and -36.10% respectively
for the same time period.
Overall weakness in the financials sector served as the major detractor of
returns, affecting both the equal-weight and cap-weight indices. The S&P Equal
Weight Index's higher allocation to consumer discretionary stocks caused this
sector to be the second largest detractor of returns for RSP. Compared to its
cap-weighted counterpart, the equal weight index had approximately twice the
exposure to consumer discretionaries. Varying allocations to consumer staple
stocks also accounted for performance differences between the S&P Equal Weight
Index and the S&P 500. As the larger-cap stocks weathered the market meltdowns,
higher allocations to smaller companies in the consumer staples sector detracted
from RSP's returns relative to the cap-weighted index.
CUMULATIVE FUND PERFORMANCE: APRIL 24, 2003 - OCTOBER 31, 2008
(PERFORMANCE GRAPH)
<Table>
<Caption>
S&P 500
RYDEX S&P EQUAL WEIGHT S&P 500
EQUAL WEIGHT TOTAL RETURN TOTAL RETURN
ETF INDEX INDEX
------------ ------------ ------------
4/24/2003 10000 10000 10000
4/30/2003 10114 10115 10063
5/31/2003 11091 11096 10594
6/30/2003 11170 11179 10729
7/31/2003 11457 11469 10918
8/31/2003 11960 11977 11131
9/30/2003 11754 11774 11013
10/31/2003 12575 12605 11636
11/30/2003 12841 12876 11738
12/31/2003 13500 13543 12354
1/31/2004 13822 13872 12580
2/29/2004 14096 14152 12755
3/31/2004 13999 14061 12563
4/30/2004 13643 13708 12365
5/31/2004 13893 13964 12535
6/30/2004 14316 14395 12779
7/31/2004 13684 13762 12356
8/31/2004 13663 13733 12406
9/30/2004 14019 14100 12540
10/31/2004 14349 14438 12732
11/30/2004 15177 15277 13247
12/31/2004 15727 15839 13698
1/31/2005 15254 15367 13364
2/28/2005 15576 15694 13645
3/31/2005 15371 15492 13404
4/30/2005 14897 15013 13149
5/31/2005 15567 15695 13568
6/30/2005 15785 15921 13587
7/31/2005 16577 16729 14092
8/31/2005 16396 16551 13964
9/30/2005 16529 16691 14077
10/31/2005 16112 16273 13842
11/30/2005 16812 16986 14366
12/31/2005 16933 17116 14371
1/31/2006 17620 17821 14751
2/28/2006 17653 17857 14791
3/31/2006 17971 18185 14975
4/30/2006 18155 18378 15176
5/31/2006 17628 17846 14740
6/30/2006 17582 17807 14760
7/31/2006 17320 17546 14851
8/31/2006 17804 18045 15204
9/30/2006 18255 18510 15596
10/31/2006 18919 19193 16104
11/30/2006 19391 19678 16410
12/31/2006 19526 19820 16640
1/31/2007 19979 20292 16892
2/28/2007 19905 20221 16562
3/31/2007 20056 20381 16747
4/30/2007 20919 21266 17489
5/31/2007 21601 21969 18099
6/30/2007 21209 21579 17798
7/31/2007 20248 20604 17246
8/31/2007 20277 20641 17505
9/30/2007 20781 21164 18160
10/31/2007 21043 21437 18449
11/30/2007 20033 20411 17677
12/31/2007 19741 20123 17555
1/31/2008 18873 19234 16502
2/29/2008 18230 18587 15966
3/31/2008 18031 18392 15897
4/30/2008 18970 19360 16671
5/31/2008 19460 19881 16887
6/30/2008 17552 17937 15463
7/31/2008 17460 17851 15333
8/31/2008 17964 18379 15555
9/30/2008 16077 16517 14169
10/31/2008 12680 13038 11789
</Table>
AVERAGE ANNUAL TOTAL RETURNS FOR THE PERIOD ENDED OCTOBER 31, 2008
- --------------------------------------------------------------------------------
<Table>
<Caption>
SINCE INCEPTION
ONE YEAR THREE YEAR FIVE YEAR (04/24/03)
-------- ---------- --------- ---------------
RYDEX S&P EQUAL WEIGHT ETF.................. -39.75% -7.68% 0.16% 4.39%
S&P EQUAL WEIGHT TOTAL RETURN INDEX......... -39.18% -7.12% 0.68% 4.92%
S&P 500 TOTAL RETURN INDEX.................. -36.10% -5.21% 0.26% 3.03%
</Table>
The returns presented above do not reflect the effect of taxes. Index returns
represent total returns. Past performance is not guarantee of future results.
5 ANNUAL REPORT
Rydex S&P Equal Weight ETF
PORTFOLIO SUMMARY (Unaudited) As of October 31, 2008
- --------------------------------------------------------------------------------
TOP 10 HOLDINGS*
- --------------------------------------------------------------------------------
<Table>
<Caption>
DESCRIPTION % OF NET ASSETS
- ------------------------------------------------------------------------------------
SSGA GOVERNMENT MONEY MARKET FUNDS 0.42%
INTERCONTINENTAL EXCHANGE, INC. 0.31%
APOLLO GROUP, INC. -- CLASS A 0.31%
MICRON TECHNOLOGY, INC. 0.30%
SOUTHWESTERN ENERGY CO. 0.30%
TELLABS, INC. 0.29%
KROGER CO. 0.27%
JPMORGAN CHASE & CO. 0.27%
BANK OF NEW YORK MELLON CORP. 0.27%
DAVITA, INC. 0.27%
- ------------------------------------------------------------------------------------
</Table>
SECTOR ALLOCATIONS*
(PIE CHART)
<Table>
Financials 15.68
Consumer Discretionary 15.19
Information Technology 14.87
Health Care 11.51
Industrials 11.14
Consumer Staples 9.22
Energy 7.58
Utilities 7.30
Materials 5.73
Telecommunication Services 1.78
</Table>
* The Fund's Top Ten Holdings are expressed as a percentage of net assets and
the Sector Allocations are expressed as a percentage of the Fund's investments
market value. These percentages may change over time.
6
- --------------------------------------------------------------------------------
RYDEX RUSSELL TOP 50 ETF
MANAGER'S ANALYSIS (Unaudited)
- --------------------------------------------------------------------------------
Rydex Russell Top 50(R) ETF (XLG) finished the year down approximately 33% due
in large part to its exposure to the financials and information technology
sectors. XLG returned -32.92% for the year ending 10/31/2008, compared to the
Russell Top 50 benchmark, which returned -33.01% for the same time period.
Slight underweighting in information technology was behind the fund's
outperformance relative to its benchmark. There were few areas to escape the
financial and economic crisis, but mega-cap stocks fared marginally better than
their small-cap counterparts.
Not surprisingly, the credit crisis played a role in the XLG's negative returns.
Diversified banks such as Citigroup (C), Bank of America (BOA) and Goldman Sachs
(GS) were hit especially hard during the months of September and October.
Likewise, technology hardware and equipment finished the year down more than
30%, contributing almost 4% to the fund's decline. The food and staples
retailing sectors -- specifically Wal-Mart (WMT) -- were the lone bright spots
for the fund and the Russell Top 50 Index, returning 2.62% and 2.28%
respectively for the year.
CUMULATIVE FUND PERFORMANCE: MAY 4, 2005 - OCTOBER 31, 2008
(Performance Graph)
<Table>
<Caption>
RYDEX RUSSELL RUSSELL TOP S&P 100
TOP 50 50 TOTAL TOTAL RETURN
ETF RETURN INDEX INDEX
------------- ------------ ------------
5/4/2005 10000 10000 10000
5/31/2005 10116 10119 10088
6/30/2005 9963 9966 9989
7/31/2005 10184 10189 10263
8/31/2005 10108 10114 10142
9/30/2005 10162 10171 10196
10/31/2005 10036 10043 10027
11/30/2005 10364 10375 10381
12/31/2005 10285 10297 10312
1/31/2006 10424 10439 10482
2/28/2006 10457 10472 10550
3/31/2006 10536 10555 10691
4/30/2006 10667 10689 10856
5/31/2006 10393 10417 10618
6/30/2006 10409 10434 10601
7/31/2006 10676 10706 10782
8/31/2006 10978 11010 11060
9/30/2006 11270 11307 11405
10/31/2006 11659 11702 11795
11/30/2006 11863 11909 12001
12/31/2006 12123 12172 12216
1/31/2007 12214 12266 12349
2/28/2007 11758 11806 11960
3/31/2007 11886 11937 12087
4/30/2007 12436 12503 12673
5/31/2007 12828 12902 13117
6/30/2007 12600 12671 12953
7/31/2007 12346 12415 12650
8/31/2007 12617 12689 12902
9/30/2007 13105 13189 13432
10/31/2007 13287 13374 13635
11/30/2007 12757 12841 13061
12/31/2007 12685 12772 12964
1/31/2008 11894 11972 12178
2/29/2008 11339 11414 11654
3/31/2008 11382 11457 11676
4/30/2008 11875 11958 12212
5/31/2008 11804 11885 12209
6/30/2008 10788 10843 11123
7/31/2008 10834 10893 11199
8/31/2008 10990 11052 11360
9/30/2008 10339 10394 10496
10/31/2008 8913 8959 8964
</Table>
AVERAGE ANNUAL TOTAL RETURNS FOR THE PERIOD ENDED OCTOBER 31, 2008
- --------------------------------------------------------------------------------
<Table>
<Caption>
SINCE INCEPTION
ONE YEAR THREE YEAR (05/4/05)
-------- ---------- ---------------
RYDEX RUSSELL TOP 50 ETF........................... -32.92% -3.88% -3.24%
RUSSELL TOP 50 TOTAL RETURN INDEX.................. -33.01% -3.74% -3.10%
S&P 100 TOTAL RETURN INDEX......................... -34.26% -3.67% -3.08%
</Table>
The returns presented above do not reflect the effect of taxes. Index returns
represent total returns. Past performance is not guarantee of future results.
7 ANNUAL REPORT
Rydex Russell Top 50 ETF
PORTFOLIO SUMMARY (Unaudited) As of October 31, 2008
- --------------------------------------------------------------------------------
TOP 10 HOLDINGS*
- --------------------------------------------------------------------------------
<Table>
<Caption>
DESCRIPTION % OF NET ASSETS
- ------------------------------------------------------------------------------------
EXXON MOBIL CORP. 8.95%
PROCTER & GAMBLE CO. 4.51%
GENERAL ELECTRIC CO. 4.45%
MICROSOFT CORP. 4.10%
JOHNSON & JOHNSON 3.95%
AT&T, INC. 3.64%
CHEVRON CORP. 3.53%
JPMORGAN CHASE & CO. 3.26%
INTERNATIONAL BUSINESS MACHINES CORP. 2.92%
WAL-MART STORES, INC. 2.86%
- ------------------------------------------------------------------------------------
</Table>
SECTOR ALLOCATIONS*
(PIE CHART)
<Table>
Information Technology 21.50
Energy 16.85
Consumer Staples 14.94
Health Care 13.89
Financials 12.19
Industrials 8.47
Telecommunication Services 5.60
Consumer Discretionary 4.49
Materials 1.26
Utilities 0.81
</Table>
* The Fund's Top Ten Holdings are expressed as a percentage of net assets and
the Sector Allocations are expressed as a percentage of the Fund's investments
market value. These percentages may change over time.
8
Rydex S&P Equal Weight ETF
SCHEDULE OF INVESTMENTS October 31, 2008
- --------------------------------------------------------------------------------
<Table>
<Caption>
MARKET
SHARES VALUE
- ---------------------------------------------------------
COMMON STOCKS 99.5%
AEROSPACE & DEFENSE 2.3%
Boeing Co. .................. 39,047 $2,040,987
General Dynamics Corp. ...... 27,020 1,629,846
Goodrich Corp. .............. 48,930 1,788,881
Honeywell International,
Inc. ..................... 51,499 1,568,145
L-3 Communications Holdings,
Inc. ..................... 22,087 1,792,802
Lockheed Martin Corp. ....... 19,851 1,688,327
Northrop Grumman Corp. ...... 34,866 1,634,867
Precision Castparts Corp. ... 25,758 1,669,376
Raytheon Co. ................ 38,181 1,951,431
Rockwell Collins, Inc. ...... 46,098 1,716,228
United Technologies Corp. ... 36,273 1,993,564
------------
TOTAL AEROSPACE & DEFENSE 19,474,454
------------
AIR FREIGHT & LOGISTICS 0.9%
C.H. Robinson Worldwide,
Inc. ..................... 40,469 2,095,485
Expeditors International of
Washington, Inc. ......... 58,667 1,915,477
FedEx Corp. ................. 24,797 1,620,980
United Parcel Service,
Inc. -- Class B........... 34,061 1,797,740
------------
TOTAL AIR FREIGHT & LOGISTICS 7,429,682
------------
AIRLINES 0.2%
Southwest Airlines Co. ...... 144,931 1,707,287
------------
TOTAL AIRLINES 1,707,287
------------
AUTO COMPONENTS 0.3%
Goodyear Tire & Rubber
Co.(The)*................. 139,425 1,243,671
Johnson Controls, Inc. ...... 68,215 1,209,452
------------
TOTAL AUTO COMPONENTS 2,453,123
------------
AUTOMOBILES 0.4%
Ford Motor Co.* ............. 429,319 940,209
General Motors Corp. ........ 198,816 1,149,156
Harley-Davidson, Inc. ....... 53,388 1,306,938
------------
TOTAL AUTOMOBILES 3,396,303
------------
BEVERAGES 1.8%
Anheuser-Busch Cos., Inc. ... 34,431 2,135,755
Brown-Forman Corp. -- Class
B......................... 38,177 1,733,213
Coca-Cola Co.(The)........... 42,428 1,869,378
Coca-Cola Enterprises,
Inc. ..................... 129,484 1,301,314
Constellation Brands,
Inc. -- Class A*.......... 102,788 1,288,962
Dr Pepper Snapple Group,
Inc.* .................... 85,435 1,956,461
Molson Coors Brewing
Co. -- Class B............ 46,581 1,740,266
Pepsi Bottling Group, Inc. .. 72,787 1,682,835
PepsiCo, Inc. ............... 30,884 1,760,697
------------
TOTAL BEVERAGES 15,468,881
------------
BIOTECHNOLOGY 1.3%
Amgen, Inc.* ................ 37,504 2,246,115
Biogen Idec, Inc.* .......... 48,106 2,046,910
Celgene Corp.* .............. 35,173 2,260,217
Genzyme Corp.* .............. 28,083 2,046,689
Gilead Sciences, Inc.* ...... 48,078 2,204,376
------------
TOTAL BIOTECHNOLOGY 10,804,307
------------
BUILDING PRODUCTS 0.1%
Masco Corp. ................. 118,827 1,206,094
------------
TOTAL BUILDING PRODUCTS 1,206,094
------------
CAPITAL MARKETS 3.1%
American Capital, Ltd. ...... 94,119 1,322,372
Ameriprise Financial, Inc. .. 57,321 1,238,134
Bank of New York Mellon
Corp. .................... 70,328 2,292,693
Charles Schwab Corp.(The).... 94,536 1,807,528
E*TRADE Financial Corp.* .... 686,269 1,249,010
Federated Investors,
Inc. -- Class B........... 83,686 2,025,201
Franklin Resources, Inc. .... 24,254 1,649,272
Goldman Sachs Group,
Inc.(The)................. 20,799 1,923,907
Invesco Ltd. ................ 94,634 1,410,993
Janus Capital Group, Inc. ... 93,540 1,098,160
Legg Mason, Inc. ............ 61,313 1,360,535
Merrill Lynch & Co., Inc. ... 101,004 1,877,664
Morgan Stanley............... 101,288 1,769,501
Northern Trust Corp. ........ 30,005 1,689,582
State Street Corp. .......... 38,429 1,665,897
T. Rowe Price Group, Inc. ... 38,226 1,511,456
------------
TOTAL CAPITAL MARKETS 25,891,905
------------
CHEMICALS 2.9%
Air Products & Chemicals,
Inc. ..................... 29,704 1,726,693
Ashland, Inc. ............... 77,630 1,753,662
CF Industries Holdings,
Inc. ..................... 20,568 1,320,260
Dow Chemical Co.(The)........ 63,225 1,686,211
Du Pont (E.I.) de Nemours &
Co. ...................... 49,300 1,577,600
Eastman Chemical Co. ........ 37,728 1,523,834
Ecolab, Inc. ................ 45,754 1,704,794
Hercules, Inc. .............. 115,664 1,944,312
International Flavors &
Fragrances, Inc. ......... 52,564 1,675,740
Monsanto Co. ................ 20,127 1,790,900
PPG Industries, Inc. ........ 33,577 1,664,748
Praxair, Inc. ............... 27,588 1,797,358
Rohm & Haas Co. ............. 30,712 2,160,589
Sigma-Aldrich Corp. ......... 42,724 1,873,875
------------
TOTAL CHEMICALS 24,200,576
------------
COMMERCIAL BANKS 3.4%
BB&T Corp. .................. 56,610 2,029,468
Comerica, Inc. .............. 61,573 1,698,799
Fifth Third Bancorp.......... 140,131 1,520,421
First Horizon National
Corp. .................... 163,700 1,949,667
Huntington Bancshares,
Inc. ..................... 212,967 2,012,538
KeyCorp...................... 166,064 2,030,963
M&T Bank Corp. .............. 25,026 2,029,609
Marshall & Ilsley Corp. ..... 97,807 1,763,460
National City Corp. ......... 501,243 1,353,356
PNC Financial Services Group,
Inc. ..................... 28,461 1,897,495
Regions Financial Corp. ..... 153,964 1,707,461
SunTrust Banks, Inc. ........ 40,727 1,634,782
U.S. Bancorp................. 61,318 1,827,889
Wachovia Corp. .............. 156,219 1,001,364
</Table>
9 ANNUAL REPORT
See Notes to Financial Statements.
Rydex S&P Equal Weight ETF
SCHEDULE OF INVESTMENTS (continued) October 31, 2008
- --------------------------------------------------------------------------------
<Table>
<Caption>
MARKET
SHARES VALUE
- ---------------------------------------------------------
COMMON STOCKS (CONTINUED)
Wells Fargo & Co. ........... 60,572 $2,062,477
Zions Bancorp................ 48,216 1,837,512
------------
TOTAL COMMERCIAL BANKS 28,357,261
------------
COMMERCIAL SERVICES & SUPPLIES 1.9%
Allied Waste Industries,
Inc.* .................... 197,543 2,058,398
Avery Dennison Corp. ........ 48,786 1,708,486
Cintas Corp. ................ 71,197 1,687,369
Equifax, Inc. ............... 66,927 1,745,456
Monster Worldwide, Inc.* .... 122,318 1,741,808
Pitney Bowes, Inc. .......... 63,191 1,565,873
R.R. Donnelley & Sons Co. ... 92,123 1,526,478
Robert Half International,
Inc. ..................... 88,465 1,669,334
Waste Management, Inc. ...... 66,494 2,076,608
------------
TOTAL COMMERCIAL SERVICES & SUPPLIES 15,779,810
------------
COMMUNICATIONS EQUIPMENT 1.9%
Ciena Corp.* ................ 219,145 2,105,984
Cisco Systems, Inc.* ........ 99,370 1,765,805
Corning, Inc. ............... 142,554 1,543,860
Harris Corp. ................ 48,415 1,740,519
JDS Uniphase Corp.* ......... 266,024 1,452,491
Juniper Networks, Inc.* ..... 87,237 1,634,821
Motorola, Inc. .............. 319,212 1,714,168
QUALCOMM, Inc. .............. 48,510 1,855,993
Tellabs, Inc.* .............. 578,679 2,453,599
------------
TOTAL COMMUNICATIONS EQUIPMENT 16,267,240
------------
COMPUTERS & PERIPHERALS 2.1%
Apple, Inc.* ................ 16,921 1,820,531
Dell, Inc.* ................. 131,622 1,599,207
EMC Corp.* .................. 182,799 2,153,372
Hewlett-Packard Co. ......... 48,026 1,838,435
International Business
Machines Corp. ........... 19,678 1,829,464
Lexmark International,
Inc. -- Class A*.......... 69,505 1,795,314
NetApp, Inc.* ............... 110,964 1,501,343
QLogic Corp.* ............... 131,164 1,576,591
SanDisk Corp.* .............. 100,627 894,574
Sun Microsystems, Inc.* ..... 279,800 1,287,080
Teradata Corp.* ............. 102,335 1,574,936
------------
TOTAL COMPUTERS & PERIPHERALS 17,870,847
------------
CONSTRUCTION & ENGINEERING 0.3%
Fluor Corp. ................. 38,819 1,550,042
Jacobs Engineering Group,
Inc.* .................... 38,332 1,396,435
------------
TOTAL CONSTRUCTION & ENGINEERING 2,946,477
------------
CONSTRUCTION MATERIALS 0.2%
Vulcan Materials Co. ........ 27,428 1,488,792
------------
TOTAL CONSTRUCTION MATERIALS 1,488,792
------------
CONSUMER FINANCE 0.8%
American Express Co. ........ 60,067 1,651,843
Capital One Financial
Corp. .................... 41,669 1,630,091
Discover Financial Services.. 154,329 1,890,530
SLM Corp.* .................. 184,303 1,966,513
------------
TOTAL CONSUMER FINANCE 7,138,977
------------
CONTAINERS & PACKAGING 0.9%
Ball Corp. .................. 53,788 1,839,550
Bemis Co., Inc. ............. 79,378 1,971,749
Pactiv Corp.* ............... 81,701 1,924,876
Sealed Air Corp. ............ 98,158 1,660,833
------------
TOTAL CONTAINERS & PACKAGING 7,397,008
------------
DISTRIBUTORS 0.3%
Genuine Parts Co. ........... 54,690 2,152,052
------------
TOTAL DISTRIBUTORS 2,152,052
------------
DIVERSIFIED CONSUMER SERVICES 0.5%
Apollo Group, Inc. -- Class
A*........................ 37,178 2,584,243
H&R Block, Inc. ............. 94,086 1,855,376
------------
TOTAL DIVERSIFIED CONSUMER SERVICES 4,439,619
------------
DIVERSIFIED FINANCIAL SERVICES 2.0%
Bank of America Corp. ....... 73,816 1,784,133
CIT Group, Inc. ............. 210,956 873,358
Citigroup, Inc. ............. 134,585 1,837,085
CME Group, Inc. ............. 6,301 1,777,827
IntercontinentalExchange,
Inc.* .................... 30,895 2,643,376
JPMorgan Chase & Co. ........ 56,092 2,313,795
Leucadia National Corp. ..... 58,125 1,560,075
Moody's Corp. ............... 61,905 1,584,768
Nasdaq OMX Group (The)*...... 33,534 1,088,514
NYSE Euronext................ 55,343 1,670,252
------------
TOTAL DIVERSIFIED FINANCIAL SERVICES 17,133,183
------------
DIVERSIFIED TELECOMMUNICATION SERVICES 1.4%
AT&T, Inc. .................. 77,972 2,087,311
CenturyTel, Inc. ............ 59,304 1,489,123
Embarq Corp. ................ 51,720 1,551,600
Frontier Communications
Corp. .................... 192,571 1,465,465
Qwest Communications
International, Inc. ...... 622,457 1,780,227
Verizon Communications,
Inc. ..................... 69,537 2,063,163
Windstream Corp. ............ 196,598 1,476,451
------------
TOTAL DIVERSIFIED TELECOMMUNICATION
SERVICES 11,913,340
------------
ELECTRIC UTILITIES 3.1%
Allegheny Energy, Inc. ...... 61,268 1,847,230
American Electric Power Co.,
Inc. ..................... 63,400 2,068,742
Duke Energy Corp. ........... 121,770 1,994,593
Edison International......... 56,701 2,017,989
Entergy Corp. ............... 25,983 2,027,973
Exelon Corp. ................ 35,479 1,924,381
FirstEnergy Corp. ........... 34,062 1,776,674
FPL Group, Inc. ............. 43,079 2,035,052
Pepco Holdings, Inc. ........ 100,734 2,080,157
Pinnacle West Capital
Corp. .................... 63,845 2,020,694
PPL Corp. ................... 63,170 2,073,239
</Table>
10
See Notes to Financial Statements.
Rydex S&P Equal Weight ETF
SCHEDULE OF INVESTMENTS (continued) October 31, 2008
- --------------------------------------------------------------------------------
<Table>
<Caption>
MARKET
SHARES VALUE
- ---------------------------------------------------------
COMMON STOCKS (CONTINUED)
Progress Energy, Inc. ....... 51,467 $2,026,256
Southern Co. ................ 57,181 1,963,595
------------
TOTAL ELECTRIC UTILITIES 25,856,575
------------
ELECTRICAL EQUIPMENT 0.6%
Cooper Industries,
Ltd. -- Class A........... 52,914 1,637,688
Emerson Electric Co. ........ 52,638 1,722,842
Rockwell Automation, Inc. ... 62,425 1,727,300
------------
TOTAL ELECTRICAL EQUIPMENT 5,087,830
------------
ELECTRONIC EQUIPMENT & INSTRUMENTS 0.9%
Agilent Technologies,
Inc.* .................... 72,300 1,604,337
Amphenol Corp. -- Class A.... 55,930 1,602,394
Jabil Circuit, Inc. ......... 201,197 1,692,067
Molex, Inc. ................. 91,734 1,321,887
Tyco Electronics, Ltd. ...... 84,327 1,639,317
------------
TOTAL ELECTRONIC EQUIPMENT & INSTRUMENTS 7,860,002
------------
ENERGY EQUIPMENT & SERVICES 2.1%
Baker Hughes, Inc. .......... 34,974 1,222,341
BJ Services Co. ............. 107,741 1,384,472
Cameron International
Corp.* ................... 56,475 1,370,084
ENSCO International, Inc. ... 38,848 1,476,613
Halliburton Co. ............. 65,509 1,296,423
Nabors Industries, Ltd.* .... 86,812 1,248,357
National-Oilwell Varco,
Inc.* .................... 43,049 1,286,735
Noble Corp. ................. 52,344 1,686,000
Rowan Cos., Inc. ............ 69,288 1,256,884
Schlumberger, Ltd. .......... 27,434 1,416,966
Smith International, Inc. ... 37,038 1,277,070
Transocean, Inc.* ........... 19,755 1,626,429
Weatherford International,
Ltd.* .................... 80,698 1,362,182
------------
TOTAL ENERGY EQUIPMENT & SERVICES 17,910,556
------------
FOOD & STAPLES RETAILING 1.9%
Costco Wholesale Corp. ...... 33,205 1,893,017
CVS Caremark Corp. .......... 62,794 1,924,636
Kroger Co.(The).............. 84,455 2,319,134
Safeway, Inc. ............... 88,596 1,884,437
SUPERVALU, Inc. ............. 99,974 1,423,630
Sysco Corp. ................. 66,152 1,733,183
Wal-Mart Stores, Inc. ....... 36,783 2,052,859
Walgreen Co. ................ 69,003 1,756,816
Whole Foods Market, Inc. .... 109,928 1,178,428
------------
TOTAL FOOD & STAPLES RETAILING 16,166,140
------------
FOOD PRODUCTS 2.8%
Archer-Daniels-Midland Co. .. 105,374 2,184,403
Campbell Soup Co. ........... 56,720 2,152,524
ConAgra Foods, Inc. ......... 115,147 2,005,861
Dean Foods Co.* ............. 95,499 2,087,608
General Mills, Inc. ......... 32,451 2,198,231
H.J. Heinz Co. .............. 45,536 1,995,387
Hershey Co.(The)............. 52,740 1,964,038
Kellogg Co. ................. 39,687 2,001,019
Kraft Foods, Inc. -- Class
A......................... 66,921 1,950,078
McCormick & Co., Inc. ....... 57,228 1,926,294
Sara Lee Corp. .............. 174,434 1,950,172
Tyson Foods, Inc. -- Class
A......................... 174,674 1,526,651
------------
TOTAL FOOD PRODUCTS 23,942,266
------------
GAS UTILITIES 0.5%
Nicor, Inc. ................. 46,350 2,141,833
Questar Corp. ............... 52,523 1,809,943
------------
TOTAL GAS UTILITIES 3,951,776
------------
HEALTH CARE EQUIPMENT & SUPPLIES 2.5%
Baxter International, Inc. .. 34,074 2,061,136
Becton, Dickinson & Co. ..... 28,148 1,953,471
Boston Scientific Corp.* .... 167,613 1,513,545
C.R. Bard, Inc. ............. 22,863 2,017,660
Covidien, Ltd. .............. 40,892 1,811,107
Hospira, Inc.* .............. 57,408 1,597,091
Intuitive Surgical, Inc.* ... 8,224 1,421,025
Medtronic, Inc. ............. 42,915 1,730,762
St Jude Medical, Inc.* ...... 50,352 1,914,887
Stryker Corp. ............... 35,742 1,910,767
Varian Medical Systems,
Inc.* .................... 37,612 1,711,722
Zimmer Holdings, Inc.* ...... 33,067 1,535,301
------------
TOTAL HEALTH CARE EQUIPMENT & SUPPLIES 21,178,474
------------
HEALTH CARE PROVIDERS & SERVICES 3.2%
Aetna, Inc. ................. 59,413 1,477,601
AmerisourceBergen Corp. ..... 57,743 1,805,624
Cardinal Health, Inc. ....... 44,266 1,690,961
CIGNA Corp. ................. 60,922 993,029
Coventry Health Care,
Inc.* .................... 69,429 915,768
DaVita, Inc.* ............... 40,399 2,292,643
Express Scripts, Inc.* ...... 30,050 1,821,330
Humana, Inc.* ............... 53,867 1,593,924
Laboratory Corp. of America
Holdings*................. 30,769 1,891,986
McKesson Corp. .............. 40,989 1,507,985
Medco Health Solutions,
Inc.* .................... 46,644 1,770,140
Patterson Cos., Inc.* ....... 71,978 1,823,203
Quest Diagnostics, Inc. ..... 40,145 1,878,786
Tenet Healthcare Corp.* ..... 367,794 1,610,938
UnitedHealth Group, Inc. .... 85,271 2,023,481
WellPoint, Inc.* ............ 47,572 1,849,124
------------
TOTAL HEALTH CARE PROVIDERS & SERVICES 26,946,523
------------
HEALTH CARE TECHNOLOGY 0.2%
IMS Health, Inc. ............ 111,291 1,595,913
------------
TOTAL HEALTH CARE TECHNOLOGY 1,595,913
------------
HOTELS, RESTAURANTS & LEISURE 1.8%
Carnival Corp. .............. 57,640 1,464,056
Darden Restaurants, Inc. .... 77,057 1,708,354
International Game
Technology................ 127,043 1,778,602
Marriott International,
Inc. -- Class A........... 82,598 1,723,820
McDonald's Corp. ............ 35,333 2,046,841
Starbucks Corp.* ............ 141,379 1,856,306
</Table>
11 ANNUAL REPORT
See Notes to Financial Statements.
Rydex S&P Equal Weight ETF
SCHEDULE OF INVESTMENTS (continued) October 31, 2008
- --------------------------------------------------------------------------------
<Table>
<Caption>
MARKET
SHARES VALUE
- ---------------------------------------------------------
COMMON STOCKS (CONTINUED)
Starwood Hotels & Resorts
Worldwide, Inc. .......... 66,324 $1,494,943
Wyndham Worldwide Corp. ..... 136,306 1,116,346
Yum! Brands, Inc. ........... 58,052 1,684,089
------------
TOTAL HOTELS, RESTAURANTS & LEISURE 14,873,357
------------
HOUSEHOLD DURABLES 2.3%
Black & Decker Corp. ........ 34,092 1,725,737
Centex Corp. ................ 137,293 1,681,839
D.R. Horton, Inc. ........... 165,841 1,223,907
Fortune Brands, Inc. ........ 37,577 1,433,187
Harman International
Industries, Inc. ......... 70,595 1,296,830
KB HOME...................... 100,731 1,681,200
Leggett & Platt, Inc. ....... 95,291 1,654,252
Lennar Corp. -- Class A...... 150,851 1,167,587
Newell Rubbermaid, Inc. ..... 120,092 1,651,265
Pulte Homes, Inc. ........... 137,538 1,532,173
Snap-on, Inc. ............... 41,520 1,534,164
Stanley Works(The)........... 50,280 1,646,167
Whirlpool Corp. ............. 26,172 1,220,924
------------
TOTAL HOUSEHOLD DURABLES 19,449,232
------------
HOUSEHOLD PRODUCTS 1.0%
Clorox Co. .................. 35,480 2,157,539
Colgate-Palmolive Co. ....... 29,403 1,845,332
Kimberly-Clark Corp. ........ 34,975 2,143,618
Procter & Gamble Co. ........ 31,351 2,023,393
------------
TOTAL HOUSEHOLD PRODUCTS 8,169,882
------------
INDEPENDENT POWER PRODUCERS & ENERGY TRADERS 0.7%
AES Corp.(The)*.............. 188,919 1,505,684
Constellation Energy Group,
Inc. ..................... 94,066 2,277,338
Dynegy, Inc. -- Class A*..... 619,520 2,255,053
------------
TOTAL INDEPENDENT POWER PRODUCERS & ENERGY
TRADERS 6,038,075
------------
INDUSTRIAL CONGLOMERATES 0.8%
3M Co. ...................... 32,139 2,066,538
General Electric Co. ........ 91,425 1,783,702
Textron, Inc. ............... 70,866 1,254,328
Tyco International, Ltd. .... 56,496 1,428,219
------------
TOTAL INDUSTRIAL CONGLOMERATES 6,532,787
------------
INSURANCE 3.6%
AFLAC, Inc. ................. 35,267 1,561,623
Allstate Corp. .............. 49,092 1,295,538
American International Group,
Inc. ..................... 846,523 1,616,859
Aon Corp. ................... 47,697 2,017,583
Assurant, Inc. .............. 44,359 1,130,267
Chubb Corp. ................. 38,941 2,017,923
Cincinnati Financial Corp. .. 74,374 1,932,980
Genworth Financial,
Inc. -- Class A........... 247,978 1,200,214
Hartford Financial Services
Group, Inc. .............. 39,578 408,445
Lincoln National Corp. ...... 43,502 749,974
Loews Corp. ................. 56,727 1,883,904
Marsh & McLennan Cos.,
Inc. ..................... 67,650 1,983,498
MBIA, Inc. .................. 156,793 1,541,275
MetLife, Inc. ............... 35,894 1,192,399
Principal Financial Group,
Inc. ..................... 52,190 991,088
Progressive Corp. ........... 134,724 1,922,511
Prudential Financial, Inc. .. 26,833 804,990
Torchmark Corp. ............. 38,264 1,598,287
Travelers Cos., Inc.(The).... 44,489 1,893,007
Unum Group................... 90,571 1,426,493
XL Capital, Ltd. -- Class A.. 125,058 1,213,063
------------
TOTAL INSURANCE 30,381,921
------------
INTERNET & CATALOG RETAIL 0.4%
Amazon.com, Inc.* ........... 29,613 1,695,048
Expedia, Inc.* .............. 143,281 1,362,602
------------
TOTAL INTERNET & CATALOG RETAIL 3,057,650
------------
INTERNET SOFTWARE & SERVICES 1.0%
Akamai Technologies, Inc.* .. 133,764 1,923,526
eBay, Inc.* ................. 98,622 1,505,958
Google, Inc. -- Class A*..... 5,155 1,852,501
VeriSign, Inc.* ............. 90,803 1,925,024
Yahoo!, Inc.* ............... 108,876 1,395,790
------------
TOTAL INTERNET SOFTWARE & SERVICES 8,602,799
------------
IT SERVICES 2.3%
Affiliated Computer Services,
Inc. -- Class A*.......... 45,513 1,866,033
Automatic Data Processing,
Inc. ..................... 51,990 1,817,050
Cognizant Technology
Solutions Corp. -- Class
A*........................ 94,086 1,806,451
Computer Sciences Corp.* .... 53,212 1,604,874
Convergys Corp.* ............ 148,352 1,140,827
Fidelity National Information
Services, Inc. ........... 112,182 1,692,826
Fiserv, Inc.* ............... 44,877 1,497,097
Mastercard, Inc. -- Class A.. 10,888 1,609,464
Paychex, Inc. ............... 70,591 2,014,667
Total System Services,
Inc. ..................... 129,599 1,780,690
Unisys Corp.* ............... 702,480 1,067,770
Western Union Co. ........... 90,079 1,374,606
------------
TOTAL IT SERVICES 19,272,355
------------
LEISURE EQUIPMENT & PRODUCTS 0.6%
Eastman Kodak Co. ........... 143,026 1,312,979
Hasbro, Inc. ................ 61,277 1,781,322
Mattel, Inc.* ............... 121,078 1,818,592
------------
TOTAL LEISURE EQUIPMENT & PRODUCTS 4,912,893
------------
LIFE SCIENCES TOOLS & SERVICES 1.0%
Applied Biosystems Inc. ..... 63,297 1,951,446
Millipore Corp.* ............ 32,512 1,687,048
PerkinElmer, Inc. ........... 87,585 1,571,275
Thermo Fisher Scientific
Inc.* .................... 40,240 1,633,744
Waters Corp.* ............... 40,822 1,788,004
------------
TOTAL LIFE SCIENCES TOOLS & SERVICES 8,631,517
------------
MACHINERY 2.4%
Caterpillar, Inc. ........... 34,718 1,325,186
Cummins, Inc. ............... 41,709 1,078,178
Danaher Corp. ............... 29,579 1,752,260
</Table>
12
See Notes to Financial Statements.
Rydex S&P Equal Weight ETF
SCHEDULE OF INVESTMENTS (continued) October 31, 2008
- --------------------------------------------------------------------------------
<Table>
<Caption>
MARKET
SHARES VALUE
- ---------------------------------------------------------
COMMON STOCKS (CONTINUED)
Deere & Co. ................. 36,573 $1,410,255
Dover Corp. ................. 51,956 1,650,642
Eaton Corp. ................. 33,450 1,491,870
Flowserve Corp. ............. 1,040 59,197
Illinois Tool Works, Inc. ... 48,490 1,619,081
Ingersoll-Rand Co.,
Ltd. -- Class A........... 65,613 1,210,560
ITT Corp. ................... 38,462 1,711,559
Manitowoc Co., Inc. ......... 124,987 1,229,872
PACCAR, Inc. ................ 53,268 1,557,556
Pall Corp. .................. 66,146 1,746,916
Parker-Hannifin Corp. ....... 40,073 1,553,630
Terex Corp.* ................ 67,242 1,122,269
------------
TOTAL MACHINERY 20,519,031
------------
MEDIA 2.9%
CBS Corp. -- Class B......... 144,711 1,405,144
Comcast Corp. -- Class A..... 110,773 1,745,782
DIRECTV Group, Inc.(The)*.... 90,690 1,985,204
Gannett Co., Inc. ........... 125,260 1,377,860
Interpublic Group of Cos.,
Inc.* .................... 283,651 1,472,149
McGraw-Hill Cos., Inc. ...... 56,350 1,512,434
Meredith Corp. .............. 76,884 1,489,243
New York Times Co. -- Class
A......................... 148,589 1,485,890
News Corp. -- Class A........ 173,933 1,850,647
Omnicom Group, Inc. ......... 55,696 1,645,260
Scripps Networks
Interactive -- Class A.... 53,897 1,530,675
Time Warner, Inc. ........... 162,885 1,643,510
Viacom, Inc. -- Class B*..... 87,712 1,773,537
Walt Disney Co.(The)......... 67,670 1,752,653
Washington Post Co. -- Class
B......................... 3,773 1,610,316
------------
TOTAL MEDIA 24,280,304
------------
METALS & MINING 1.3%
AK Steel Holding Corp. ...... 79,090 1,100,933
Alcoa, Inc. ................. 87,763 1,010,152
Allegheny Technologies,
Inc. ..................... 56,341 1,495,290
Freeport-McMoRan Copper &
Gold, Inc. ............... 33,913 986,868
Newmont Mining Corp. ........ 57,167 1,505,779
Nucor Corp. ................. 49,945 2,023,272
Titanium Metals Corp. ....... 188,795 1,757,682
United States Steel Corp. ... 24,155 890,836
------------
TOTAL METALS & MINING 10,770,812
------------
MULTI-UTILITIES 3.0%
Ameren Corp. ................ 54,790 1,777,936
CenterPoint Energy, Inc. .... 162,144 1,867,899
CMS Energy Corp. ............ 182,625 1,871,906
Consolidated Edison, Inc. ... 49,261 2,133,987
Dominion Resources, Inc. .... 54,178 1,965,578
DTE Energy Co. .............. 53,871 1,901,646
Integrys Energy Group,
Inc. ..................... 43,893 2,092,379
NiSource, Inc. .............. 148,064 1,918,910
PG&E Corp. .................. 56,205 2,061,037
Public Service Enterprise
Group, Inc. .............. 65,920 1,855,648
Sempra Energy................ 43,814 1,866,038
TECO Energy, Inc. ........... 135,455 1,563,151
Wisconsin Energy Corp. ...... 16,750 728,625
Xcel Energy, Inc. ........... 103,986 1,811,436
------------
TOTAL MULTI-UTILITIES 25,416,176
------------
MULTILINE RETAIL 1.5%
Big Lots, Inc.* ............. 70,834 1,730,475
Family Dollar Stores, Inc. .. 78,686 2,117,440
J.C. Penney Co., Inc. ....... 58,042 1,388,365
Kohl's Corp.* ............... 44,192 1,552,465
Macy's, Inc. ................ 113,809 1,398,713
Nordstrom, Inc. ............. 67,538 1,221,762
Sears Holdings Corp.* ....... 21,087 1,217,563
Target Corp. ................ 40,720 1,633,686
------------
TOTAL MULTILINE RETAIL 12,260,469
------------
OFFICE ELECTRONICS 0.2%
Xerox Corp. ................. 180,313 1,446,110
------------
TOTAL OFFICE ELECTRONICS 1,446,110
------------
OIL, GAS & CONSUMABLE FUELS 5.4%
Anadarko Petroleum Corp. .... 42,652 1,505,616
Apache Corp. ................ 20,033 1,649,317
Cabot Oil & Gas Corp. ....... 59,975 1,683,498
Chesapeake Energy Corp. ..... 58,891 1,293,835
Chevron Corp. ............... 27,348 2,040,161
ConocoPhillips............... 31,388 1,632,804
CONSOL Energy, Inc. ......... 40,362 1,266,963
Devon Energy Corp. .......... 23,133 1,870,534
El Paso Corp. ............... 170,692 1,655,712
EOG Resources, Inc. ......... 24,535 1,985,372
Exxon Mobil Corp. ........... 29,144 2,160,153
Hess Corp. .................. 26,822 1,614,953
Marathon Oil Corp. .......... 56,880 1,655,208
Massey Energy Co. ........... 62,281 1,438,068
Murphy Oil Corp. ............ 34,838 1,764,196
Noble Energy, Inc. .......... 39,140 2,028,235
Occidental Petroleum Corp. .. 31,949 1,774,447
Peabody Energy Corp. ........ 42,563 1,468,849
Pioneer Natural Resources
Co. ...................... 40,642 1,131,067
Range Resources Corp. ....... 45,847 1,935,660
Southwestern Energy Co.* .... 70,074 2,496,036
Spectra Energy Corp. ........ 92,162 1,781,492
Sunoco, Inc. ................ 55,121 1,681,191
Tesoro Corp. ................ 131,111 1,267,843
Valero Energy Corp. ......... 70,533 1,451,569
Williams Cos., Inc. ......... 91,318 1,914,939
XTO Energy, Inc. ............ 44,607 1,603,622
------------
TOTAL OIL, GAS & CONSUMABLE FUELS 45,751,340
------------
PAPER & FOREST PRODUCTS 0.5%
International Paper Co. ..... 82,828 1,426,298
MeadWestvaco Corp. .......... 91,365 1,281,851
Weyerhaeuser Co. ............ 39,439 1,507,359
------------
TOTAL PAPER & FOREST PRODUCTS 4,215,508
------------
</Table>
13 ANNUAL REPORT
See Notes to Financial Statements.
Rydex S&P Equal Weight ETF
SCHEDULE OF INVESTMENTS (continued) October 31, 2008
- --------------------------------------------------------------------------------
<Table>
<Caption>
MARKET
SHARES VALUE
- ---------------------------------------------------------
COMMON STOCKS (CONTINUED)
PERSONAL PRODUCTS 0.3%
Avon Products, Inc. ......... 56,495 $1,402,771
Estee Lauder Cos.,
Inc -- Class A............ 43,792 1,578,264
------------
TOTAL PERSONAL PRODUCTS 2,981,035
------------
PHARMACEUTICALS 3.3%
Abbott Laboratories.......... 38,896 2,145,114
Allergan, Inc. .............. 39,710 1,575,296
Barr Pharmaceuticals,
Inc.* .................... 33,883 2,177,322
Bristol-Myers Squibb Co. .... 108,199 2,223,489
Eli Lilly & Co. ............. 49,871 1,686,637
Forest Laboratories, Inc.* .. 80,869 1,878,587
Johnson & Johnson............ 32,002 1,963,003
King Pharmaceuticals,
Inc.* .................... 220,568 1,938,793
Merck & Co., Inc. ........... 70,991 2,197,171
Mylan Inc.* ................. 192,655 1,651,053
Pfizer, Inc. ................ 125,818 2,228,237
Schering-Plough Corp. ....... 123,113 1,783,907
Watson Pharmaceuticals,
Inc.* .................... 82,052 2,147,301
Wyeth........................ 59,010 1,898,942
------------
TOTAL PHARMACEUTICALS 27,494,852
------------
REAL ESTATE INVESTMENT TRUSTS (REITS) 2.2%
Apartment Investment &
Management Co. -- Class
A......................... 66,107 967,145
AvalonBay Communities,
Inc. ..................... 22,963 1,630,832
Boston Properties, Inc. ..... 23,354 1,655,331
Developers Diversified Realty
Corp. .................... 67,674 891,267
Equity Residential........... 46,036 1,608,037
General Growth Properties,
Inc. ..................... 114,069 472,246
HCP, Inc. ................... 54,636 1,635,255
Host Hotels & Resorts,
Inc. ..................... 132,861 1,373,783
Kimco Realty Corp. .......... 55,520 1,253,642
Plum Creek Timber Co.,
Inc. ..................... 40,242 1,500,222
ProLogis..................... 54,901 768,614
Public Storage, Inc. ........ 22,553 1,838,069
Simon Property Group, Inc. .. 22,751 1,525,000
Vornado Realty Trust......... 22,403 1,580,532
------------
TOTAL REAL ESTATE INVESTMENT TRUSTS
(REITS) 18,699,975
------------
REAL ESTATE MANAGEMENT & DEVELOPMENT 0.1%
CB Richard Ellis Group,
Inc. -- Class A*.......... 165,831 1,162,475
------------
TOTAL REAL ESTATE MANAGEMENT & DEVELOPMENT 1,162,475
------------
ROAD & RAIL 1.1%
Burlington Northern Santa Fe
Corp. .................... 22,886 2,038,227
CSX Corp. ................... 40,044 1,830,812
Norfolk Southern Corp. ...... 32,722 1,961,357
Ryder System, Inc. .......... 32,591 1,291,255
Union Pacific Corp. ......... 30,701 2,049,906
------------
TOTAL ROAD & RAIL 9,171,557
------------
SEMICONDUCTORS & SEMICONDUCTOR EQUIPMENT 3.7%
Advanced Micro Devices,
Inc.* .................... 428,145 1,498,508
Altera Corp. ................ 105,391 1,828,534
Analog Devices, Inc. ........ 81,358 1,737,807
Applied Materials, Inc. ..... 142,422 1,838,668
Broadcom Corp. -- Class A*... 110,180 1,881,875
Intel Corp. ................. 117,733 1,883,728
KLA-Tencor Corp. ............ 67,113 1,560,377
Linear Technology Corp. ..... 72,021 1,633,436
LSI Corp.* .................. 385,052 1,482,450
MEMC Electronic Materials,
Inc.* .................... 75,793 1,393,075
Microchip Technology, Inc. .. 74,392 1,832,275
Micron Technology, Inc.* .... 530,583 2,499,046
National Semiconductor
Corp. .................... 129,497 1,705,476
Novellus Systems, Inc.* ..... 108,455 1,713,589
NVIDIA Corp.* ............... 208,662 1,827,879
Teradyne, Inc.* ............. 265,390 1,353,489
Texas Instruments, Inc. ..... 99,595 1,948,078
Xilinx, Inc. ................ 94,636 1,743,195
------------
TOTAL SEMICONDUCTORS & SEMICONDUCTOR
EQUIPMENT 31,361,485
------------
SOFTWARE 2.6%
Adobe Systems, Inc.* ........ 57,142 1,522,263
Autodesk, Inc.* ............. 67,733 1,443,390
BMC Software, Inc.* ......... 70,656 1,824,338
CA, Inc. .................... 106,375 1,893,475
Citrix Systems, Inc.* ....... 82,540 2,127,056
Compuware Corp.* ............ 229,136 1,461,888
Electronic Arts, Inc.* ...... 51,757 1,179,024
Intuit, Inc.* ............... 74,134 1,857,798
Microsoft Corp. ............. 89,763 2,004,408
Novell, Inc.* ............... 409,125 1,906,522
Oracle Corp.* ............... 120,903 2,211,316
Salesforce.com, Inc.* ....... 41,253 1,277,193
Symantec Corp.* ............. 116,736 1,468,539
------------
TOTAL SOFTWARE 22,177,210
------------
SPECIALTY RETAIL 3.2%
Abercrombie & Fitch
Co. -- Class A............ 51,427 1,489,326
AutoNation, Inc.* ........... 169,974 1,167,721
AutoZone, Inc.* ............. 17,578 2,237,504
Bed Bath & Beyond, Inc.* .... 70,983 1,829,232
Best Buy Co., Inc. .......... 54,810 1,469,456
GameStop Corp. -- Class A*... 58,916 1,613,709
Gap, Inc.(The)............... 121,136 1,567,500
Home Depot, Inc. ............ 84,014 1,981,890
Limited Brands, Inc. ........ 117,061 1,402,391
Lowe's Cos., Inc. ........... 94,016 2,040,147
Office Depot, Inc.* ......... 367,514 1,323,050
RadioShack Corp. ............ 128,284 1,624,075
Sherwin-Williams Co.(The).... 36,731 2,090,361
Staples, Inc. ............... 93,058 1,808,117
Tiffany & Co. ............... 59,337 1,628,801
TJX Cos., Inc. .............. 68,773 1,840,366
------------
TOTAL SPECIALTY RETAIL 27,113,646
------------
TEXTILES, APPAREL & LUXURY GOODS 1.1%
Coach, Inc.* ................ 79,467 1,637,020
Jones Apparel Group, Inc. ... 117,635 1,306,925
</Table>
14
See Notes to Financial Statements.
Rydex S&P Equal Weight ETF
SCHEDULE OF INVESTMENTS (concluded) October 31, 2008
- --------------------------------------------------------------------------------
<Table>
<Caption>
MARKET
SHARES VALUE
- ---------------------------------------------------------
COMMON STOCKS (CONCLUDED)
Liz Claiborne, Inc. ......... 120,900 $985,335
NIKE, Inc. -- Class B........ 35,051 2,019,989
Polo Ralph Lauren Corp. ..... 32,120 1,515,101
V.F. Corp. .................. 27,801 1,531,835
------------
TOTAL TEXTILES, APPAREL & LUXURY GOODS 8,996,205
------------
THRIFTS & MORTGAGE FINANCE 0.3%
Hudson City Bancorp, Inc. ... 110,561 2,079,652
Sovereign Bancorp, Inc.* .... 266,370 772,473
------------
TOTAL THRIFTS & MORTGAGE FINANCE 2,852,125
------------
TOBACCO 1.3%
Altria Group, Inc. .......... 112,062 2,150,470
Lorillard, Inc. ............. 31,901 2,101,000
Philip Morris International,
Inc. ..................... 44,538 1,936,067
Reynolds American, Inc. ..... 46,297 2,266,701
UST, Inc. ................... 32,968 2,228,307
------------
TOTAL TOBACCO 10,682,545
------------
TRADING COMPANIES & DISTRIBUTORS 0.4%
Fastenal Co. ................ 42,112 1,695,429
W.W. Grainger, Inc. ......... 25,395 1,995,285
------------
TOTAL TRADING COMPANIES & DISTRIBUTORS 3,690,714
------------
WIRELESS TELECOMMUNICATION SERVICES 0.4%
American Tower Corp. -- Class
A*........................ 58,129 1,878,148
Sprint Nextel Corp. ......... 361,047 1,130,077
------------
TOTAL WIRELESS TELECOMMUNICATION SERVICES 3,008,225
------------
TOTAL COMMON STOCKS
(Cost $1,399,303,692) 839,387,540
------------
SHORT TERM INVESTMENTS 0.4%
SSgA Government Money Market
Fund...................... 3,561,735 3,561,735
------------
TOTAL SHORT TERM INVESTMENTS
(Cost $3,561,735) 3,561,735
------------
TOTAL INVESTMENTS 99.9%
(Cost $1,402,865,427) 842,949,275
------------
OTHER ASSETS IN EXCESS OF
LIABILITIES--0.1% 467,641
------------
NET ASSETS--100.0% $843,416,916
- ---------------------------------------------------------
</Table>
* Non-Income Producing Security.
15 ANNUAL REPORT
See Notes to Financial Statements.
Rydex Russell Top 50 ETF
SCHEDULE OF INVESTMENTS October 31, 2008
- --------------------------------------------------------------------------------
<Table>
<Caption>
MARKET
SHARES VALUE
- ---------------------------------------------------------
COMMON STOCKS 99.5%
AEROSPACE & DEFENSE 2.1%
Boeing Co. .................. 74,721 $3,905,667
United Technologies Corp. ... 96,767 5,318,314
------------
TOTAL AEROSPACE & DEFENSE 9,223,981
------------
AIR FREIGHT & LOGISTICS 0.8%
United Parcel Service,
Inc. -- Class B........... 68,014 3,589,779
------------
TOTAL AIR FREIGHT & LOGISTICS 3,589,779
------------
BEVERAGES 4.4%
Coca-Cola Co.(The)........... 230,974 10,176,715
PepsiCo, Inc. ............... 157,712 8,991,161
------------
TOTAL BEVERAGES 19,167,876
------------
BIOTECHNOLOGY 0.9%
Genentech, Inc.* ............ 46,188 3,830,833
------------
TOTAL BIOTECHNOLOGY 3,830,833
------------
CAPITAL MARKETS 0.8%
Goldman Sachs Group,
Inc.(The)................. 40,221 3,720,443
------------
TOTAL CAPITAL MARKETS 3,720,443
------------
CHEMICALS 1.3%
Monsanto Co. ................ 54,568 4,855,461
Mosaic Co. (The)............. 15,438 608,411
------------
TOTAL CHEMICALS 5,463,872
------------
COMMERCIAL BANKS 3.8%
U.S. Bancorp................. 173,077 5,159,425
Wells Fargo & Co. ........... 328,397 11,181,918
------------
TOTAL COMMERCIAL BANKS 16,341,343
------------
COMMUNICATIONS EQUIPMENT 3.8%
Cisco Systems, Inc.* ........ 587,378 10,437,707
QUALCOMM, Inc. .............. 160,948 6,157,871
------------
TOTAL COMMUNICATIONS EQUIPMENT 16,595,578
------------
COMPUTERS & PERIPHERALS 7.2%
Apple, Inc.* ................ 87,656 9,430,909
Hewlett-Packard Co. ......... 245,131 9,383,615
International Business
Machines Corp. ........... 136,565 12,696,448
------------
TOTAL COMPUTERS & PERIPHERALS 31,510,972
------------
DIVERSIFIED FINANCIAL SERVICES 7.4%
Bank of America Corp. ....... 443,050 10,708,518
Citigroup, Inc. ............. 541,341 7,389,305
JPMorgan Chase & Co. ........ 343,300 14,161,125
------------
TOTAL DIVERSIFIED FINANCIAL SERVICES 32,258,948
------------
DIVERSIFIED TELECOMMUNICATION SERVICES 5.6%
AT&T, Inc. .................. 590,747 15,814,297
Verizon Communications,
Inc. ..................... 283,452 8,410,021
------------
TOTAL DIVERSIFIED TELECOMMUNICATION
SERVICES 24,224,318
------------
ELECTRIC UTILITIES 0.8%
Exelon Corp. ................ 65,235 3,538,346
------------
TOTAL ELECTRIC UTILITIES 3,538,346
------------
ENERGY EQUIPMENT & SERVICES 1.4%
Schlumberger, Ltd. .......... 118,639 6,127,704
------------
TOTAL ENERGY EQUIPMENT & SERVICES 6,127,704
------------
FOOD & STAPLES RETAILING 3.9%
CVS Caremark Corp. .......... 142,132 4,356,346
Wal-Mart Stores, Inc. ....... 223,093 12,450,820
------------
TOTAL FOOD & STAPLES RETAILING 16,807,166
------------
HEALTH CARE EQUIPMENT & SUPPLIES 1.0%
Medtronic, Inc. ............. 111,661 4,503,288
------------
TOTAL HEALTH CARE EQUIPMENT & SUPPLIES 4,503,288
------------
HOTELS, RESTAURANTS & LEISURE 1.5%
McDonald's Corp. ............ 112,708 6,529,175
------------
TOTAL HOTELS, RESTAURANTS & LEISURE 6,529,175
------------
HOUSEHOLD PRODUCTS 4.5%
Procter & Gamble Co. ........ 303,571 19,592,472
------------
TOTAL HOUSEHOLD PRODUCTS 19,592,472
------------
INDUSTRIAL CONGLOMERATES 5.5%
3M Co. ...................... 70,021 4,502,350
General Electric Co. ........ 991,108 19,336,517
------------
TOTAL INDUSTRIAL CONGLOMERATES 23,838,867
------------
INSURANCE 0.1%
American International Group,
Inc. ..................... 230,994 441,199
------------
TOTAL INSURANCE 441,199
------------
INTERNET SOFTWARE & SERVICES 1.9%
Google, Inc. -- Class A*..... 23,551 8,463,287
------------
TOTAL INTERNET SOFTWARE & SERVICES 8,463,287
------------
IT SERVICES 0.6%
Visa, Inc. -- Class A........ 44,513 2,463,795
------------
TOTAL IT SERVICES 2,463,795
------------
MEDIA 3.0%
Comcast Corp. -- Class A..... 278,811 4,394,061
Time Warner, Inc. ........... 355,810 3,590,123
Walt Disney Co.(The)......... 189,454 4,906,859
------------
TOTAL MEDIA 12,891,043
------------
OIL, GAS & CONSUMABLE FUELS 15.4%
Chevron Corp. ............... 205,670 15,342,982
ConocoPhillips............... 153,381 7,978,880
Exxon Mobil Corp. ........... 525,388 38,941,758
Occidental Petroleum Corp. .. 81,617 4,533,008
------------
TOTAL OIL, GAS & CONSUMABLE FUELS 66,796,628
------------
</Table>
16
See Notes to Financial Statements.
Rydex Russell Top 50 ETF
SCHEDULE OF INVESTMENTS (concluded) October 31, 2008
- --------------------------------------------------------------------------------
<Table>
<Caption>
MARKET
SHARES VALUE
- ---------------------------------------------------------
COMMON STOCKS (CONCLUDED)
PHARMACEUTICALS 11.9%
Abbott Laboratories.......... 153,459 $8,463,264
Eli Lilly & Co. ............. 99,376 3,360,896
Johnson & Johnson............ 280,225 17,189,001
Merck & Co., Inc. ........... 213,445 6,606,123
Pfizer, Inc. ................ 672,703 11,913,570
Wyeth........................ 132,581 4,266,457
------------
TOTAL PHARMACEUTICALS 51,799,311
------------
SEMICONDUCTORS & SEMICONDUCTOR EQUIPMENT 2.1%
Intel Corp. ................. 569,556 9,112,896
------------
TOTAL SEMICONDUCTORS & SEMICONDUCTOR
EQUIPMENT 9,112,896
------------
SOFTWARE 5.7%
Microsoft Corp. ............. 798,274 17,825,459
Oracle Corp.* ............... 387,252 7,082,839
------------
TOTAL SOFTWARE 24,908,298
------------
TOBACCO 2.1%
Philip Morris International,
Inc. ..................... 209,737 9,117,267
------------
TOTAL TOBACCO 9,117,267
------------
TOTAL COMMON STOCKS
(Cost $589,361,152) 432,858,685
------------
SHORT TERM INVESTMENTS 0.3%
SSgA Government Money Market
Fund...................... 1,360,219 1,360,219
------------
TOTAL SHORT TERM INVESTMENTS
(Cost $1,360,219) 1,360,219
------------
TOTAL INVESTMENTS 99.8%
(Cost $590,721,371) 434,218,904
------------
OTHER ASSETS IN EXCESS OF
LIABILITIES--0.2% 659,151
------------
NET ASSETS--100.0% $434,878,055
- ---------------------------------------------------------
</Table>
* Non-Income Producing Security.
17 ANNUAL REPORT
See Notes to Financial Statements.
STATEMENTS OF ASSETS AND LIABILITIES October 31, 2008
- --------------------------------------------------------------------------------
<Table>
<Caption>
RYDEX S&P RYDEX RUSSELL
EQUAL TOP 50
WEIGHT ETF ETF
-------------- -------------
ASSETS
Investments at Market Value*............................. $ 842,949,275 $ 434,218,904
Receivables:
Investments Sold....................................... 16,175,818 --
Fund Shares Sold....................................... -- 18,850,684
Dividends.............................................. 1,004,369 697,724
-------------- -------------
TOTAL ASSETS........................................ 860,129,462 453,767,312
-------------- -------------
LIABILITIES
Payables:
Investments Purchased.................................. 733,650 18,814,628
Fund Shares Repurchased................................ 15,659,960 --
Accrued Management Fees................................ 318,936 74,629
-------------- -------------
TOTAL LIABILITIES................................... 16,712,546 18,889,257
-------------- -------------
NET ASSETS............................................... $ 843,416,916 $ 434,878,055
============== =============
NET ASSETS CONSIST OF:
Paid-in Capital.......................................... $1,527,409,310 $ 624,697,707
Undistributed Net Investment Income...................... -- 838,967
Accumulated Net Realized Loss on Investment Securities... (124,076,242) (34,156,152)
Net Unrealized Depreciation on Investment Securities..... (559,916,152) (156,502,467)
-------------- -------------
NET ASSETS............................................... $ 843,416,916 $ 434,878,055
============== =============
Shares Outstanding (Unlimited Shares Authorized), No Par
Value.................................................. 28,107,851 5,700,276
============== =============
Net Asset Value, Offering Price and Repurchase Price Per
Share.................................................. $ 30.01 $ 76.29
============== =============
*Total Cost of Investments............................... $1,402,865,427 $ 590,721,371
============== =============
</Table>
18
See Notes to Financial Statements.
STATEMENTS OF OPERATIONS For the Year Ended
October 31, 2008
- --------------------------------------------------------------------------------
<Table>
<Caption>
RYDEX S&P RYDEX RUSSELL
EQUAL TOP 50
WEIGHT ETF ETF
------------- -------------
INVESTMENT INCOME
Dividends............................................... $ 27,901,027 $ 14,618,445
------------- -------------
EXPENSES
Management Fee.......................................... 5,534,323 1,140,279
------------- -------------
Net Investment Income..................................... 22,366,704 13,478,166
------------- -------------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS
Net Realized Gain (Loss) From:
Investments............................................. (123,219,838) (32,648,089)
In-kind Redemptions..................................... 84,803,993 10,498,482
------------- -------------
Net Realized Loss.................................... (38,415,845) (22,149,607)
Net Change in Unrealized Appreciation/Depreciation on:
Investment Securities................................... (632,923,455) (210,678,370)
------------- -------------
Net Realized and Unrealized Loss on Investments........... (671,339,300) (232,827,977)
------------- -------------
NET DECREASE IN NET ASSETS RESULTING FROM
OPERATIONS......................................... $(648,972,596) $(219,349,811)
============= =============
</Table>
19 ANNUAL REPORT
See Notes to Financial Statements.
STATEMENTS OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
<Table>
<Caption>
RYDEX S&P EQUAL WEIGHT ETF RYDEX RUSSELL TOP 50 ETF
----------------------------------- -----------------------------------
YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED
OCTOBER 31, 2008 OCTOBER 31, 2007 OCTOBER 31, 2008 OCTOBER 31, 2007
---------------- ---------------- ---------------- ----------------
OPERATIONS
Net Investment Income............ $ 22,366,704 $ 25,817,694 $ 13,478,166 $ 10,928,752
Net Realized Gain (Loss)......... (38,415,845) 236,861,135 (22,149,607) 27,813,824
Net Change in Unrealized
Appreciation/Depreciation on
Investments................... (632,923,455) (60,770,241) (210,678,370) 33,495,340
--------------- --------------- ------------- -------------
Net Increase (Decrease) in Net
Assets Resulting From
Operations.................... (648,972,596) 201,908,588 (219,349,811) 72,237,916
--------------- --------------- ------------- -------------
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net Investment Income............ (21,971,144) (25,503,538) (13,329,460) (10,668,692)
--------------- --------------- ------------- -------------
SHAREHOLDER TRANSACTIONS
Proceeds From Shares Sold........ 619,139,869 1,286,385,367 283,203,866 451,183,675
Value of Shares Reinvested....... 39,088 214,399 22,733 3,303
Value of Shares Repurchased...... (1,282,510,869) (1,045,109,356) (297,024,052) (195,942,838)
--------------- --------------- ------------- -------------
Net Increase (Decrease) in Net
Assets Resulting From
Shareholder Transactions...... (663,331,912) 241,490,410 (13,797,453) 255,244,140
--------------- --------------- ------------- -------------
Increase (Decrease) in Net
Assets...................... (1,334,275,652) 417,895,460 (246,476,724) 316,813,364
NET ASSETS--BEGINNING OF PERIOD.... 2,177,692,568 1,759,797,108 681,354,779 364,541,415
--------------- --------------- ------------- -------------
NET ASSETS--END OF PERIOD(1)....... $ 843,416,916 $ 2,177,692,568 $ 434,878,055 $ 681,354,779
=============== =============== ============= =============
(1) Including Undistributed Net
Investment Income................ $ -- $ 602,527 $ 838,967 $ 690,261
=============== =============== ============= =============
CHANGES IN SHARES OUTSTANDING:
Shares Sold...................... 14,600,000 25,750,000 3,050,000 4,150,000
Shares Reinvested................ 905 4,357 241 30
Shares Repurchased............... (29,504,000) (20,950,000) (3,200,000) (1,800,000)
Shares Outstanding, Beginning of
Period........................ 43,010,946 38,206,589 5,850,035 3,500,005
--------------- --------------- ------------- -------------
Shares Outstanding, End of
Period........................ 28,107,851 43,010,946 5,700,276 5,850,035
=============== =============== ============= =============
</Table>
20
See Notes to Financial Statements.
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
<Table>
<Caption>
RYDEX S&P EQUAL WEIGHT ETF
-----------------------------------------------------------------------------------
YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED
OCTOBER 31, OCTOBER 31, OCTOBER 31, OCTOBER 31, OCTOBER 31,
2008 2007 2006(1)(2) 2005(1) 2004(1)
--------------- --------------- --------------- --------------- ---------------
PER SHARE OPERATING PERFORMANCE:
NET ASSET VALUE AT BEGINNING OF
PERIOD........................ $50.63 $46.06 $39.68 $35.70 $31.61
-------- ---------- ---------- ---------- --------
Net Investment Income*.......... 0.72 0.59 0.52 0.43 0.37
Net Realized and Unrealized Gain
(Loss) on Investments......... (20.64) 4.56 6.36 3.95 4.08
-------- ---------- ---------- ---------- --------
TOTAL FROM INVESTMENT
OPERATIONS.................... (19.92) 5.15 6.88 4.38 4.45
-------- ---------- ---------- ---------- --------
DISTRIBUTIONS TO SHAREHOLDERS
FROM:
Net Investment Income........... (0.70) (0.58) (0.50) (0.40) (0.36)
-------- ---------- ---------- ---------- --------
NET ASSET VALUE AT END OF
PERIOD........................ $30.01 $50.63 $46.06 $39.68 $35.70
======== ========== ========== ========== ========
TOTAL RETURN**.................. (39.75)% 11.23% 17.42% 12.29% 14.11%
RATIOS/SUPPLEMENTAL DATA:
Net Assets at End of Period
(000's Omitted)............... $843,417 $2,177,693 $1,759,797 $1,071,410 $485,636
RATIO TO AVERAGE NET ASSETS OF:
Expenses........................ 0.40% 0.40% 0.40% 0.40% 0.40%
Net Investment Income........... 1.65% 1.22% 1.21% 1.11% 1.09%
Portfolio Turnover Rate+........ 32% 25% 16% 22% 55%
</Table>
* Based on average shares outstanding.
** Total investment return is calculated assuming an initial investment
made at the net asset value at the beginning of the period, reinvestment
of all dividends and distribution at net asset value during the period,
and redemption on the last day of the period. Transaction fees are not
reflected in the calculation of total investment return.
(1) All per share information representing data prior to April 26, 2006 has
been adjusted for the effect of a 4 for 1 stock split which occurred on
April 26, 2006.
(2) Beginning with the year ended October 31, 2006, the fund was audited by
Ernst & Young LLP. The previous periods were audited by another
independent registered public accounting firm.
+ Portfolio turnover does not include securities received or delivered
from processing creations or redemptions.
21 ANNUAL REPORT
See Notes to Financial Statements.
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
<Table>
<Caption>
RYDEX RUSSELL TOP 50 ETF
-----------------------------------------------------------------------------
YEAR ENDED YEAR ENDED YEAR ENDED PERIOD ENDED
OCTOBER 31, 2008 OCTOBER 31, 2007 OCTOBER 31, 2006(1) OCTOBER 31, 2005*
---------------- ---------------- ------------------- -----------------
PER SHARE OPERATING PERFORMANCE:
NET ASSET VALUE AT BEGINNING OF
PERIOD............................ $116.47 $104.15 $91.39 $91.51
-------- -------- -------- --------
Net Investment Income**............. 2.34 2.15 1.92 0.79
Net Realized and Unrealized Gain
(Loss) on Investments............. (40.20) 12.25 12.71 (0.46)
-------- -------- -------- --------
TOTAL FROM INVESTMENT OPERATIONS.... (37.86) 14.40 14.63 0.33
-------- -------- -------- --------
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net Investment Income............... (2.32) (2.08) (1.87) (0.45)
-------- -------- -------- --------
NET ASSET VALUE AT END OF PERIOD.... $76.29 $116.47 $104.15 $91.39
======== ======== ======== ========
TOTAL RETURN***..................... (32.92)% 13.96% 16.18% 0.36%
RATIOS/SUPPLEMENTAL DATA:
Net Assets at End of Period (000's
Omitted).......................... $434,878 $681,355 $364,541 $137,085
RATIO TO AVERAGE NET ASSETS OF:
Expenses............................ 0.20% 0.20% 0.20% 0.20%****
Net Investment Income............... 2.37% 1.96% 1.98% 1.74%****
Portfolio Turnover Rate+............ 10% 8% 7% 1%
</Table>
* The Fund commenced operations on May 4, 2005.
** Based on average shares outstanding.
*** Total investment return is calculated assuming an initial investment
made at the net asset value at the beginning of the period, reinvestment
of all dividends and distribution at net asset value during the period,
and redemption on the last day of the period. Transaction fees are not
reflected in the calculation of total investment return. Total
investment return calculated for a period of less than one year is not
annualized.
**** Annualized.
(1) Beginning with the year ended October 31, 2006, the fund was audited by
Ernst & Young LLP. The previous periods were audited by another
independent registered public accounting firm.
+ Portfolio turnover does not include securities received or delivered
from processing creations or redemptions.
22
See Notes to Financial Statements.
NOTES TO FINANCIAL STATEMENTS October 31, 2008
- --------------------------------------------------------------------------------
1. ORGANIZATION
Rydex ETF Trust (the "Trust") is an open-end, management investment company
registered under the Investment Company Act of 1940, as amended (the "1940
Act"). The Trust was organized as a Delaware statutory trust on November 22,
2002. As of October 31, 2008, the Trust offers thirty one portfolios, each of
which represents a separate series of beneficial interest in the Trust (each a
"Fund" and collectively the "Funds"). The financial statements herein relate to
the following two funds: Rydex S&P Equal Weight ETF and Rydex Russell Top 50
ETF. Rydex S&P Equal Weight ETF commenced operations on April 24, 2003 and the
Rydex Russell Top 50 ETF commenced operations on May 4, 2005.
The Funds' investment objective is to provide investment results that correspond
generally to the performance, before fees and expenses, of an index representing
publicly traded equity securities (the "Underlying Index"). Rydex S&P Equal
Weight ETF tracks the S&P 500 Equal Weight Total Return Index. Rydex Russell Top
50 ETF tracks the Russell Top 50(TM) Index. The Funds seek to achieve their
objective by investing in common stocks that comprise the Underlying Index. The
Funds use a "replication" strategy to track the Underlying Index. "Replication"
refers to investing in substantially all of the securities in the Underlying
Index in approximately the same proportions as in the Underlying Index.
The Funds operate as index funds and are not actively managed. Adverse
performance of a security in the Funds' portfolio will ordinarily not result in
the elimination of the security from the Funds' portfolio.
The Funds issue and redeem shares on a continuous basis, at net asset value,
only in aggregations of 50,000 shares called a "Creation Unit". Creation Units
are issued and redeemed principally in-kind for securities included in the
Underlying Index.
2. SIGNIFICANT ACCOUNTING POLICIES
The preparation of financial statements in conformity with U.S. generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets, liabilities and
disclosures at the date of the financial statements and accompanying notes and
the reported amounts of increases and decreases in net assets from operations
during the reporting period. Management believes that the estimates utilized in
preparing the Funds' financial statements are reasonable and prudent; however,
actual results could differ from these estimates.
A. SECURITY VALUATION
Securities listed on a domestic securities exchange are valued based on the last
sale price as of the close of regular trading hours on the New York Stock
Exchange or, in the absence of recorded sales, are valued at the most recent bid
price. Securities for which the primary market is the National Association of
Securities Dealers Automated Quotations National Market System ("NASDAQ") are
valued at the NASDAQ Official Closing Price. The Funds invest in money market
mutual funds, which are valued at their Net Asset Value ("NAV").
Securities, for which market quotations are not readily available, including
investments that are subject to limitations as to their sale, are valued at fair
value as determined in good faith by Rydex Investments, which acts as the Funds'
investment advisor (the "Advisor"), in accordance with procedures adopted by the
Board of Trustees. In determining fair value, consideration is given to market
conditions, relative benchmarks and other financial data.
B. SECURITY TRANSACTIONS AND INCOME RECOGNITION
Security transactions are recorded on the trade date. Realized gains and losses
from portfolio fund transactions are calculated on the identified cost basis.
Dividend income is recorded on the ex-dividend date, net of foreign tax
withholdings. Interest income is recorded on the accrual basis.
C. REPURCHASE AGREEMENTS
The Funds may enter into repurchase agreements with financial institutions. In a
repurchase agreement, a Fund buys a security and the seller simultaneously
agrees to repurchase the security on a specified future date at an agreed-upon
price. The repurchase price reflects an agreed-upon interest rate during the
time the Fund's money is invested in the security. Because the security
constitutes collateral for the repurchase obligation, a repurchase agreement can
be considered a collateralized loan. The Funds follow certain procedures
designed to minimize the risks inherent in such agreements. These procedures
include effecting repurchase transactions only with large, well-capitalized and
well-established financial institutions whose condition will be continually
monitored by the Advisor. In addition, the value of the collateral underlying
the repurchase agreement will always be at least equal to the repurchase price,
including any accrued interest earned on the repurchase agreement. In the event
of a default or bankruptcy by a selling financial institution, the Funds will
seek to liquidate such collateral. However, the exercising of the Funds right to
liquidate such collateral could involve certain
23 ANNUAL REPORT
NOTES TO FINANCIAL STATEMENTS (continued)
- --------------------------------------------------------------------------------
costs or delays and, to the extent that proceeds from any sale upon a default of
the obligation to repurchase were less than the repurchase price, the Funds
could suffer a loss. It is the current policy of the Funds not to invest in
repurchase agreements that do not mature within seven days if any such
investment, together with any other illiquid assets held by the Funds, amounts
to more than 15% of the Funds' net assets. The investments of the Funds in
repurchase agreements, at times, may be substantial when, in the view of the
Advisor, liquidity or other considerations so warrant. For the year ended
October 31, 2008, the Funds had not engaged in repurchase agreement
transactions.
D. FEDERAL INCOME TAXES
The Funds' policy is to comply with the requirements of the Internal Revenue
Code applicable to regulated investment companies and to distribute all of the
taxable income and capital gains, if any, to the shareholders within the
allowable time limits. Therefore, no provision for Federal income taxes is
required.
The Funds adopted Financial Accounting Standards Board (FASB) Interpretation No.
48 "Accounting for Uncertainty in Income Taxes" ("FIN 48"). FIN 48 provides
guidance for how uncertain tax positions should be recognized, measured,
presented and disclosed in the financial statements. FIN 48 requires the
evaluation of tax positions taken or expected to be taken in the course of
preparing the Fund's tax returns to determine whether the tax positions are
"more-likely-than-not" of being sustained by the applicable tax authority. Tax
positions not deemed to meet the more-likely-than-not threshold would be
recorded as a tax benefit or expense in the current year. Management has
analyzed the Funds' tax positions taken on federal income tax returns for all
open tax years for purposes of complying with FIN 48, and has concluded that no
provision for income tax was required in the Funds' financial statements.
The Funds file U.S. federal income tax returns and returns in various foreign
jurisdictions in which they invest. While the statute of limitations remains
open to examine the Funds' U.S. federal income tax returns filed for the fiscal
years 2004 to 2007, no examinations are in progress or anticipated at this time.
Income and capital gain distributions are determined in accordance with Federal
income tax regulations, which may differ from U.S. generally accepted accounting
principles. These differences are primarily due to differing treatments for in-
kind redemptions, income reclassifications from real estate investment trusts
("REITs") and losses deferred due to wash sales.
In order to present paid-in-capital, undistributed net investment income (loss)
and accumulated net realized gain (loss) on investments on the statement of
assets and liabilities that more closely represent their tax character, certain
adjustments have been made to these accounts. These adjustments have no effect
on net assets or net asset value per share. The most significant of these
adjustments is for net capital gains resulting from in-kind redemptions which,
because they are non-taxable to the Funds, and therefore are not distributed to
existing Fund shareholders, are reclassified to paid-in-capital. The in-kind net
capital gains for the year ended October 31, 2008 are disclosed in each Fund's
Statement of Operations. For the year ended October 31, 2008, the adjustments
for the Funds were as follows:
<Table>
<Caption>
UNDISTRIBUTED ACCUMULATED
PAID-IN NET INVESTMENT NET REALIZED
CAPITAL INCOME (LOSS) GAIN (LOSS)
----------- -------------- -------------
Rydex S&P Equal Weight ETF............................ $83,259,049 $(998,087) $(82,260,962)
Rydex Russell Top 50 ETF.............................. 10,468,245 -- (10,468,245)
</Table>
For the year ended October 31, 2008, there were no significant differences
between the book basis and tax basis of net unrealized appreciation
(depreciation) in value of investments other than tax deferral of losses on wash
sales and the cumulative return of capital payments on REITs.
At October 31, 2008, the Funds had capital loss carryforwards which may be
utilized to offset any net realized capital gains expiring October 31:
<Table>
<Caption>
2013 2014 2015 2016
------- -------- -------- ------------
Rydex S&P Equal Weight ETF......................... $ -- $ -- $ -- $119,981,602
Rydex Russell Top 50 ETF........................... 88,468 675,404 618,363 32,651,414
</Table>
The Funds did not utilize any capital loss carryforwards during the year ended
October 31, 2008.
The tax character of distributable earnings (accumulated losses) at October 31,
2008 were as follows:
<Table>
<Caption>
UNDISTRIBUTED UNREALIZED
UNDISTRIBUTED LONG TERM CAPITAL LOSS APPRECIATION/
ORDINARY INCOME CAPITAL GAIN CARRYFORWARD (DEPRECIATION)
--------------- ------------- ------------- --------------
Rydex S&P Equal Weight ETF................ $ -- $ -- $(119,981,602) $(564,010,792)
Rydex Russell Top 50 ETF.................. 838,967 -- (34,033,649) (156,624,970)
</Table>
24
NOTES TO FINANCIAL STATEMENTS (continued)
- --------------------------------------------------------------------------------
The tax character of distributions paid during 2008 were as follows:
<Table>
<Caption>
ORDINARY LONG-TERM
INCOME CAPITAL GAIN
----------- ------------
Rydex S&P Equal Weight ETF.................................... $21,971,144 $ --
Rydex Russell Top 50 ETF...................................... 13,329,460 --
</Table>
The tax character of distributions paid during 2007 were as follows:
<Table>
<Caption>
ORDINARY LONG-TERM
INCOME CAPITAL GAIN
----------- ------------
Rydex S&P Equal Weight ETF.................................... $25,503,538 $ --
Rydex Russell Top 50 ETF...................................... 10,668,692 --
</Table>
E. FAIR VALUE MEASUREMENT
The Funds adopted Statement of Financial Accounting Standard No. 157 ("FAS 157")
Fair Value Measurement which provided enhanced guidance for using fair value to
measure assets and liabilities. The standard requires companies to provide
expanded information about the assets and liabilities measured at fair value and
the potential effect of these fair valuations on an entity's financial
performance. The standard does not expand the use of fair value in any new
circumstances, but provides clarification an acceptable fair valuation methods
and applications.
Various inputs may be used to determine the value of the fund's investments.
These inputs are summarized in three broad levels:
Level 1 -- quoted prices in active markets for identical securities.
Level 2 -- other significant observable inputs (including quoted prices for
similar securities, interest rates, prepayment speeds, credit risk, etc.).
Level 3 -- significant unobservable inputs (including the Funds' own
assumptions used to determine the fair value of investments).
The inputs or methodologies used for valuing securities are not necessarily an
indication of the risk associated with investing in those securities.
The following table summarizes the inputs used to value the Funds' net assets as
of October 31, 2008:
<Table>
<Caption>
LEVEL 1 LEVEL 2 LEVEL 3
LEVEL 1 OTHER LEVEL 2 OTHER LEVEL 3 OTHER
INVESTMENTS FINANCIAL INVESTMENTS FINANCIAL INVESTMENTS FINANCIAL
FUND IN SECURITIES INSTRUMENTS IN SECURITIES INSTRUMENTS IN SECURITIES INSTRUMENTS
- ---- ------------- ------------- ------------- ------------- ------------- -------------
ASSETS
Rydex S&P Equal Weight
ETF.................... $842,949,275 $ -- $ -- $ -- $ -- $ --
Rydex Russell Top 50
ETF.................... 434,218,904 -- -- -- -- --
LIABILITIES
Rydex S&P Equal Weight
ETF.................... -- -- -- -- -- --
Rydex Russell Top 50
ETF.................... -- -- -- -- -- --
<Caption>
FUND TOTAL
- ---- ------------
ASSETS
Rydex S&P Equal Weight
ETF.................... $842,949,275
Rydex Russell Top 50
ETF.................... $434,218,904
LIABILITIES
Rydex S&P Equal Weight
ETF.................... --
Rydex Russell Top 50
ETF.................... --
</Table>
F. DIVIDENDS AND DISTRIBUTIONS
The Funds declare and pay dividends from net investment income and distribute
from net realized capital gains at least annually.
G. RISK AND UNCERTAINTIES
The Trust invests in various investments which are exposed to risk, such as
market risk. Due to the level of risk associated with certain investments it is
at least reasonably possible that changes in the values of investment securities
will occur in the near term and that such changes could materially affect
amounts reported in future financial statements. The Rydex Russell Top 50 ETF is
a non-diversified fund, subjecting it to a greater risk than a fund that is
diversified.
H. NEW ACCOUNTING PRONOUNCEMENTS
In March 2008, Statement of Financial Accounting Standards No. 161, "Disclosures
about Derivative Instruments and Hedging Activities" ("SFAS 161") was issued and
is effective for fiscal years and interim periods beginning after November 15,
2008. SFAS 161 requires enhanced disclosures about Funds' derivative and hedging
activities. Management is currently evaluating the impact the adoption of SFAS
161 will have on the Funds' financial statement disclosures.
25 ANNUAL REPORT
NOTES TO FINANCIAL STATEMENTS (continued)
- --------------------------------------------------------------------------------
3. ADVISORY, ADMINISTRATION AND OTHER TRANSACTIONS WITH AFFILIATES
The Advisor determines the composition of the portfolio of securities that must
be delivered in exchange for the issuance of Creation Units and periodically
adjusts the composition of the portfolio of each Funds' to conform to changes in
the composition of the relevant index. For these services, the Advisor receives
an advisory fee at the annual rate shown below of the average daily net assets
of the Funds.
<Table>
<Caption>
ADVISORY FEE
------------
Rydex S&P Equal Weight ETF........................................... 0.40%
Rydex Russell Top 50 ETF............................................. 0.20%
</Table>
The Advisor pays all expenses of the Funds, including the cost of transfer
agency, custody, fund administration, legal, audit and other services, except:
interest, taxes, distribution fees or expenses and extraordinary expenses.
Under an Administration Agreement, State Street Bank and Trust Company (the
"Administrator") provides various administrative and accounting services for the
maintenance and operations of the Funds. Under a Custodian Agreement with the
Trust, the Administrator maintains cash, securities and other assets of the
Trust and the Funds in separate accounts for each fund, keeps all necessary
accounts and records, and provides other services. The Administrator is
required, upon the order of the Trust, to deliver securities held by the
Custodian and to make payments for securities purchased by the Trust for the
Funds. Pursuant to a Transfer Agency and Service Agreement with the Trust, the
Administrator acts as a transfer agent for the Trust's authorized and issued
shares of beneficial interest, and as dividend disbursing agent of the Trust.
The Advisor compensates the Administrator directly for the foregoing services.
The Funds have adopted a Distribution Plan (the "Plan") that allows the Funds to
pay distribution fees to Rydex Distributors, Inc. (the "Distributor") and other
firms that provide distribution services ("Service Providers"). If a Service
Provider provides distribution services, the Funds 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 will, in turn,
pay the Service Provider out of its fees. No such fee is currently charged to
the Funds.
4. CAPITAL
At October 31, 2008, there were an unlimited number of no par value shares of
beneficial interest authorized. There is a minimum transaction fee per
transaction to those persons purchasing or redeeming Creation Units. An
additional charge of up to three times the standard transaction fee may be
imposed for purchases and redemptions effected outside the National Securities
Clearing Corporation usual clearing process or for cash. Such transactions are
generally permitted on an in-kind basis, with a balancing cash component to
equate the transaction to the net asset value per unit of the Fund on the
transaction date. Transaction fees are not charged to or paid by the Fund. The
minimum transaction fees are:
<Table>
<Caption>
MINIMUM
TRANSACTION FEE
---------------
Rydex S&P Equal Weight ETF......................................... $2,000
Rydex Russell Top 50 ETF........................................... 500
</Table>
5. INVESTMENT TRANSACTIONS
For the year ended October 31, 2008 the Funds had in-kind contributions and in-
kind redemptions as follows:
<Table>
<Caption>
SUBSCRIPTIONS REDEMPTIONS
------------- --------------
Rydex S&P Equal Weight ETF.................................. $543,676,914 $1,205,192,890
Rydex Russell Top 50 ETF.................................... 264,636,067 278,238,097
</Table>
Purchases and sales of investment securities (excluding short-term investments,
U.S. government and government agency obligations) for the Funds were as
follows:
<Table>
<Caption>
PURCHASES SALES
------------ ------------
Rydex S&P Equal Weight ETF.................................. $450,917,154 $453,330,711
Rydex Russell Top 50 ETF.................................... 54,872,953 54,581,909
</Table>
There were no purchases or sales of U.S. government or government agency
obligations for the year ended October 31, 2008.
26
NOTES TO FINANCIAL STATEMENTS (concluded)
- --------------------------------------------------------------------------------
At October 31, 2008, the identified cost of investments in securities owned by
each fund for federal income tax purposes and the gross unrealized appreciation
and depreciation were as follows:
<Table>
<Caption>
GROSS GROSS NET UNREALIZED
IDENTIFIED UNREALIZED UNREALIZED APPRECIATION/
COST APPRECIATION DEPRECIATION (DEPRECIATION)
-------------- ------------ ------------- --------------
Rydex S&P Equal Weight ETF.................... $1,406,960,067 $6,950,848 $(570,961,640) $(564,010,792)
Rydex Russell Top 50 ETF...................... 590,843,874 -- (156,624,970) (156,624,970)
</Table>
6. ACQUISITION OF RYDEX INVESTMENTS AND THE DISTRIBUTOR
At the close of business on January 17, 2008, Rydex NV, Inc., comprised of Rydex
Investments, together with several other Rydex entities, was acquired by
Security Benefit Corporation ("Security Benefit"), a financial services firm
that provides a broad variety of financial programs to investors in the advisor,
banking, education, government, institutional, and qualified plan markets (the
"Transaction"). As a result of the Transaction's completion, Rydex Investments
and the Distributor are wholly-owned subsidiaries of Security Benefit. While the
Transaction has no material impact on the Funds or their shareholders, it
resulted in a change of control of Rydex Investments, which in turn caused the
termination of the investment advisory agreement between Rydex Investments and
the Funds.
A new investment advisory agreement between Rydex Investments and the Funds was
approved under substantially the same terms as the previous investment advisory
agreement (the "New Agreement"). This New Agreement was approved by
shareholders, via proxy, and took effect upon the closing of the Transaction.
The Transaction had no impact on the day-to-day operations of Rydex Investments,
the fees payable to Rydex Investments under the New Agreement, or the persons
responsible for the management of the Funds.
27 ANNUAL REPORT
REPORT OF INDEPENDENT REGISTERED PUBLIC
ACCOUNTING FIRM
- --------------------------------------------------------------------------------
The Board of Trustees and Shareholders of Rydex ETF Trust
We have audited the accompanying statements of assets and liabilities, including
the schedules of investments, of Rydex S&P Equal Weight ETF and Rydex Russell
Top 50 ETF (the "Funds"), two of the funds comprising Rydex ETF Trust (the
"Trust"), as of October 31, 2008, and the related statements of operations for
the year then ended, the statements of changes in net assets for each of the two
years in the period then ended and the financial highlights for each of the
three years in the period then ended. These financial statements and financial
highlights are the responsibility of the Trust's management. Our responsibility
is to express an opinion on these financial statements and financial highlights
based on our audits. The financial highlights for each of the two years in the
period ended October 31, 2005 were audited by other auditors whose report dated
December 20, 2005, expressed an unqualified opinion on those financial
highlights.
We conducted our audits in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements and financial highlights are free of material misstatement. We were
not engaged to perform an audit of the Trust's internal control over financial
reporting. Our audits included consideration of internal control over financial
reporting as a basis for designing audit procedures that are appropriate in the
circumstances, but not for the purpose of expressing an opinion on the
effectiveness of the Trust's internal control over financial reporting.
Accordingly, we express no such opinion. An audit also includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements and financial highlights, assessing the accounting principles used
and significant estimates made by management, and evaluating the overall
financial statement presentation. Our procedures included confirmation of
securities owned as of October 31, 2008, by correspondence with the custodian
and brokers or by other appropriate auditing procedures where replies from
brokers were not received. We believe that our audits provide a reasonable basis
for our opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of Rydex
S&P Equal Weight ETF and Rydex Russell Top 50 ETF at October 31, 2008, the
results of their operations for the year then ended, the changes in their net
assets for each of the two years in the period then ended and the financial
highlights for each of the three years in the period then ended, in conformity
with U.S. generally accepted accounting principles.
ERNST & YOUNG LOGO
Boston, Massachusetts
December 23, 2008
28
SUPPLEMENTAL INFORMATION (Unaudited)
- --------------------------------------------------------------------------------
FEDERAL INCOME TAX INFORMATION
Percentage of ordinary distributions (net investment income plus short-term
gains) which qualify for the corporate dividends received deduction for the
fiscal year ended October 31, 2008:
<Table>
<Caption>
PERCENTAGE
----------
Rydex S&P Equal Weight ETF............................................ 100.00%
Rydex Russell Top 50 ETF.............................................. 100.00%
</Table>
For the fiscal year ended October 31, 2008, the Funds designate approximately
the following amounts pursuant to the Internal Revenue Code as qualified
dividend income eligible for reduced tax rates:
<Table>
Rydex S&P Equal Weight ETF........................................... $25,044,842
Rydex Russell Top 50 ETF............................................. 14,210,242
</Table>
PROXY VOTING INFORMATION
A description of the policies and procedures that the Trust uses to determine
how to vote proxies relating to securities held in the Funds' portfolios is
available, without charge and upon request, by calling 1-800-820-0888. This
information is also available from the EDGAR database on the SEC's website at
http://www.sec.gov.
Information regarding how the Funds voted proxies for portfolio securities, if
applicable, during the most recent 12-month period ended September 30, 2008 is
also available, without charge and upon request, by (i) calling 1-800-820-0888;
or accessing the Trust's Form N-PX on the SEC's website at, http://www.sec.gov.
PROXY RESULTS
Shareholders of Rydex ETF Trust voted on the following proposal at a meeting of
shareholders held on October 4, 2007. The description of the proposal and number
of shares voted are as follows:
<Table>
<Caption>
SHARES VOTED SHARES VOTED SHARES VOTED
FOR AGAINST ABSTAIN
------------ ------------ ------------
1. To approve an Investment Management Advisory
Agreement between Rydex ETF Trust and PADCO
Advisors Inc.
Rydex S&P Equal Weight ETF......................... 22,884,011 830,016 1,303,699
Rydex Russell Top 50 ETF........................... 2,834,801 21,584 30,222
</Table>
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 Trust's 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.
29 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
<Table>
<Caption>
NAME, POSITION LENGTH OF SERVICE
AND AS TRUSTEE NUMBER OF FUNDS
YEAR OF BIRTH (YEAR BEGAN) OVERSEEN
- ---------------- ----------------------------------------- ----------------
CARL G. Rydex Series Funds - 2004 158
VERBONCOEUR* Rydex Variable Trust - 2004
Trustee, Rydex Dynamic Funds - 2004
President (1952) Rydex ETF Trust - 2004
</Table>
PRINCIPAL OCCUPATIONS DURING PAST FIVE YEARS: Treasurer of Rydex Specialized
Products, LLC (2005 to present); Chief Executive Officer of Rydex Specialized
Products, LLC (2005 to 2008); Chief Executive Officer of Rydex Investments and
Rydex Distributors, Inc. (2003 to present). Executive Vice President of Rydex
Investments (2000 to 2003)
<Table>
---------------------
MICHAEL P. Rydex Series Funds - 2005 150
BYRUM* Rydex Variable Trust - 2005
Trustee, Vice Rydex Dynamic Funds - 2005
President and Rydex ETF Trust - 2005
Secretary (1970)
</Table>
PRINCIPAL OCCUPATIONS DURING PAST FIVE YEARS: Chief Investment Officer of Rydex
Investments (2003 to present); Secretary of Rydex Specialized Products, LLC
(2005 to 2008); 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
2006); President of Rydex Investments (2004 to present); Chief Operating Officer
of Rydex Investments and Rydex Distributors, Inc. (2003 to 2004)
- --------------------------------------------------------------------------------
INDEPENDENT TRUSTEES
<Table>
<Caption>
NAME, POSITION LENGTH OF SERVICE
AND AS TRUSTEE NUMBER OF FUNDS
YEAR OF BIRTH (YEAR BEGAN) OVERSEEN
- ---------------- ----------------------------------------- ----------------
JOHN O. DEMARET Rydex Series Funds - 1997 150
Trustee, Rydex Variable Trust - 1998
Chairman of the Rydex Dynamic Funds - 1999
Board (1940) Rydex ETF Trust - 2003
</Table>
PRINCIPAL OCCUPATIONS DURING PAST FIVE YEARS: Retired
<Table>
---------------------
COREY A. Rydex Series Funds - 1993 150
COLEHOUR Rydex Variable Trust - 1998
Trustee (1945) Rydex Dynamic Funds - 1999
Rydex ETF Trust - 2003
</Table>
PRINCIPAL OCCUPATIONS DURING PAST FIVE YEARS: Retired (2006 to present); Owner
and President of Schield Management, registered investment advisor (2005 to
2006); Senior Vice President of Marketing and Co-Owner of Schield Management
Company, registered investment advisor (1985 to 2005)
<Table>
---------------------
J. KENNETH Rydex Series Funds - 1995 150
DALTON Rydex Variable Trust - 1998
Trustee (1941) Rydex Dynamic Funds - 1999
Rydex ETF Trust - 2003
</Table>
PRINCIPAL OCCUPATIONS DURING PAST FIVE YEARS: Mortgage Banking Consultant and
Investor, The Dalton Group
<Table>
---------------------
WERNER E. KELLER Rydex Series Funds - 2005 150
Trustee (1940) Rydex Variable Trust - 2005
Rydex Dynamic Funds - 2005
Rydex ETF Trust - 2005
</Table>
PRINCIPAL OCCUPATIONS DURING PAST FIVE YEARS: Retired (2001 to present);
Chairman, Centurion Capital Management (1991 to 2001)
<Table>
---------------------
THOMAS F. LYDON, Rydex Series Funds - 2005 150
JR. Rydex Variable Trust - 2005
Trustee (1960) Rydex Dynamic Funds - 2005
Rydex ETF Trust - 2005
</Table>
PRINCIPAL OCCUPATIONS DURING PAST FIVE YEARS: President, Global Trends
Investments
<Table>
---------------------
PATRICK T. Rydex Series Funds - 1997 150
MCCARVILLE Rydex Variable Trust - 1998
Trustee (1942) Rydex Dynamic Funds - 1999
Rydex ETF Trust - 2003
</Table>
PRINCIPAL OCCUPATIONS DURING PAST FIVE YEARS: Founder and Chief Executive
Officer, Par Industries, Inc.
<Table>
---------------------
ROGER SOMERS Rydex Series Funds - 1993 150
Trustee (1944) Rydex Variable Trust - 1998
Rydex Dynamic Funds - 1999
Rydex ETF Trust - 2003
</Table>
PRINCIPAL OCCUPATIONS DURING PAST FIVE YEARS: Owner, Arrow Limousine
- --------------------------------------------------------------------------------
30
INFORMATION ON BOARD OF TRUSTEES AND OFFICERS (concluded)
- --------------------------------------------------------------------------------
EXECUTIVE OFFICERS
<Table>
<Caption>
NAME, POSITION AND PRINCIPAL OCCUPATIONS DURING PAST FIVE
YEAR OF BIRTH YEARS
- ----------------------------------------- -----------------------------------------
NICK BONOS* Chief Financial Officer of Rydex
Vice President and Treasurer (1963) Specialized Products, LLC (2005 to
present); Vice President and Treasurer of
Rydex Series Funds, Rydex Variable Trust,
Rydex Dynamic Funds, and Rydex ETF Trust
(2003 to present); Senior Vice President
of Rydex Investments (2003 to present);
Vice President and Treasurer of Rydex
Capital Partners SPhinX Fund (2003 to
2006); Vice President of Accounting of
Rydex Investments (2000 to 2003)
JOANNA M. HAIGNEY* Chief Compliance Officer Rydex Series
Chief Compliance Officer and Secretary Funds, Rydex Variable Trust, and Rydex
(1966) Dynamic Funds (2004 to present);
Secretary of Rydex Series Funds, Rydex
Variable Trust, and Rydex Dynamic Funds
(2000 to present); Secretary of Rydex ETF
Trust (2002 to present); Vice President
of Compliance of Rydex Investments (2000
to present); Secretary of Rydex Capital
Partners SPhinX Fund (2003 to 2006)
JOSEPH ARRUDA* Assistant Treasurer of Rydex Series
Assistant Treasurer (1966) Funds, Rydex Variable Trust, Rydex
Dynamic Funds, Rydex ETF Trust (2006 to
present); Senior Vice President of Rydex
Investments (2008 to present); Vice
President of Rydex Investments (2004 to
2008); Director of Accounting of Rydex
Investments (2003 to 2004); Vice
President of Mutual Funds, State Street
Bank & Trust (2000 to 2003)
PAULA BILLOS* Controller of Rydex Series Funds, Rydex
Controller (1974) Variable Trust, Rydex Dynamic Funds,
Rydex ETF Trust (2006 to present);
Director of Fund Administration of Rydex
Investments (2001 to present)
</Table>
* Officers of the Funds are deemed to be "interested persons" of the Trust,
within the meaning of Section 2(a)(19) of the 1940 Act, inasmuch as this
person is affiliated with the Rydex Investments.
31 ANNUAL REPORT
[GRAPHIC]
[RYDEX INVESTMENTS(TM) LOGO]
ESSENTIAL FOR MODERN MARKETS
9601 Blackwell Road - Suite 500 - Rockville, MD 20850
www.rydexinvestments.com - 800.820.0888
ETF-ANN-1008X1009
[GRAPHIC]
OCTOBER 31, 2008
RYDEX ETF TRUST
ANNUAL REPORT
RYDEX S&P 500 PURE VALUE ETF
RYDEX S&P 500 PURE GROWTH ETF
RYDEX S&P MIDCAP 400 PURE VALUE ETF
RYDEX S&P MIDCAP 400 PURE GROWTH ETF
RYDEX S&P SMALLCAP 600 PURE VALUE ETF
RYDEX S&P SMALLCAP 600 PURE GROWTH ETF
RYDEX S&P EQUAL WEIGHT CONSUMER DISCRETIONARY ETF
RYDEX S&P EQUAL WEIGHT CONSUMER STAPLES ETF
RYDEX S&P EQUAL WEIGHT ENERGY ETF
RYDEX S&P EQUAL WEIGHT FINANCIALS ETF
RYDEX S&P EQUAL WEIGHT HEALTH CARE ETF
RYDEX S&P EQUAL WEIGHT INDUSTRIALS ETF
RYDEX S&P EQUAL WEIGHT MATERIALS ETF
RYDEX S&P EQUAL WEIGHT TECHNOLOGY ETF
RYDEX S&P EQUAL WEIGHT UTILITIES ETF
[RYDEX INVESTMENTS LOGO]
TABLE OF CONTENTS
- --------------------------------------------------------------------------------
<Table>
LETTER TO OUR
SHAREHOLDERS...... 2
FEES AND EXPENSES... 4
MANAGER'S ANALYSIS.. 5
SCHEDULE OF
INVESTMENTS....... 35
STATEMENTS OF ASSETS
AND LIABILITIES... 60
STATEMENTS OF
OPERATIONS........ 64
STATEMENTS OF
CHANGES IN NET
ASSETS............ 68
FINANCIAL
HIGHLIGHTS........ 76
NOTES TO FINANCIAL
STATEMENTS........ 84
INDEPENDENT
REGISTERED PUBLIC
ACCOUNTING FIRM'S
REPORT............ 92
SUPPLEMENTAL
INFORMATION....... 93
</Table>
1 ANNUAL REPORT
- --------------------------------------------------------------------------------
DEAR SHAREHOLDER:
Rydex is a proud participant in the ETF space with $1.7 billion in ETF assets
and more than 30 exchange traded funds. Due to their convenience, transparency
and ability to provide access to difficult to reach areas of the market, ETFs
can play an important role in investor portfolios.
Professional investment advisors are increasingly using ETFs in their
portfolios. A 2008 survey of registered investment advisors (RIAs) by Rydex
AdvisorBenchmarking(TM) revealed that three-quarters of RIAs now use ETFs and
that ETFs now slightly edge out the use of stocks in advisor portfolios. Rydex
believes that investor knowledge is paramount when contemplating investment
options. While advisor ETF use is skyrocketing, because investors still have
room for education on ETFs, Rydex now offers ETF Essentials(TM) -- a
comprehensive guide to ETFs -- to help advisors educate their clients on the
nuances of ETFs. The program presents information on ETF topics in simple
understandable language and is available via print and online. It's also free
and can be requested on WWW.RYDEXINVESTMENTS.COM web site.
Market Conditions. The last 12 months proved to be the most extraordinarily
difficult period for investors in nearly a century. The crisis that unfolded
during the summer months hit nearly every conceivable asset class, resulting in
huge declines in wealth regardless of how investors had structured their
portfolios. Other than treasury bills and the U.S. dollar, no investment
category was spared the panic that washed over the world's financial markets. In
the U.S., the major stock market averages lost more than 20% of their value,
while international markets fared worse. Emerging market stocks were hit
particularly hard as shown by the nearly 60% decline in Chinese share prices.
Although commodity prices rose over the period, that masks an astounding plunge
from mid-summer highs. From early July -- when oil rose to nearly $150/barrel,
commodities -- led by oil -- fell more than 30%. Sector selection strategies
offered little respite. Only consumer staples stocks, the most defensive in the
S&P 500 Sector Index series, provided some degree of protection as that index
held losses to less than 1.5%. Other traditional safe havens such as utilities
and health care were down between 15% -- 25% while financial stocks, which are
at the epicenter of the crisis, fell nearly 43%.
The events of late September completely overwhelmed everything that had come
before. In an incredibly brief period, the entire global financial system seized
up as the lubricant of any economy -- bank lending -- came to a complete halt.
The resulting crash in global stock markets was as steep and deep as anything
witnessed since the crash of 1929 and continues to this day. The Wall Street
model of large, aggressive, risk-taking investment banks was completely swept
aside as financial titans such as Merrill Lynch, Morgan Stanley, Goldman Sachs
and Lehman Brothers collapsed, merged with, or were reborn as commercial banks.
Financial dominos tumbled as a wave of commercial bank failures -- the most
since the S&L crisis of the 1990s -- unfolded in the third quarter, culminating
with the collapse of Washington Mutual, the largest bank failure in U.S.
history. The other huge and profound shift is the nationalization of the global
financial system. The takeover of Fannie Mae and Freddie Mac and AIG, the
seizure of IndyMac Bank and Washington Mutual and the forced merger of Wachovia,
along with blanket guarantees of mortgage-backed securities, whole loans, intra-
bank loans, money market funds and bank deposits (both here and in Europe) point
to a near takeover of the global financial system by national governments. In
this history-making period, governments at all levels moved with unprecedented
speed, scope and coordination to save the financial system and with it the
global economy. In the U.S. this culminated with a $700 billion plan put forward
by the U.S. Treasury to essentially buy up all the bad mortgage assets clogging
the financial system. Rejection of that plan by the House of Representatives
late in September sent the markets into a tailspin with the Dow suffering its
biggest point drop in history and sending the index to three-year lows. Treasury
bill yields fell to near zero and interest rates on longer-dated treasuries fell
to a decade low in a massive flight to safety.
It is not all doom and gloom, however. This environment has broken the commodity
bubble and has resulted in a huge slowdown in global inflation. This helps the
emerging markets, whose economies and markets have been pummeled by the rise in
food and energy costs. It has also ushered in a period of dollar strength, which
gives the Fed additional room to ease. Moreover, interest rates could hardly be
lower and stocks are cheaper than they have been in some time. With the massive
amounts of liquidity pumped into the system, stocks could rally sharply in the
months ahead -- they have repeatedly shown signs of doing throughout the crisis.
Having gone through at least four false bottoms so far this year -- Societe
Generale, Bear Stearns, Fannie Mae /Freddie Mac and Lehman Brothers -- the
question is: Can any rally be sustained? The key to that question is fairly
straightforward. The allocation of credit in the bond and money markets needs to
resume. No recovery in stocks is possible without it. While capital has been
thrown at the markets and recovery plans announced, the mountain of bad debt is
still sitting on bank balance sheets. The fuel is in place for the markets to
recover -- they always do. This process is likely to be lengthy, though.
Navigating through this difficult environment will require carefully thought-out
investment strategies and the discipline to stay the course.
2
- --------------------------------------------------------------------------------
These tumultuous markets did not leave the ETF space unscathed. According to the
Investment Company Institute, over the past 12 months, while the number of ETFs
on the market has increased 19% (from 586 in October 2007 to 698 in October
2008), ETF assets decreased $105.86 billion, or 18%. Despite the market's
erosion of assets, with their numerous benefits, ETFs can provide a suitable
choice for investors looking for convenient access to the markets.
We appreciate the trust you have placed in our firm's quality and integrity by
investing with us. It is our goal to continue to offer innovative ETF choices to
meet your investment needs.
Sincerely,
/s/ DAVID C. REILLY, CFA
David C. Reilly, CFA
Director of Portfolio Strategies
3 ANNUAL REPORT
SHAREHOLDER EXPENSE EXAMPLE
As a shareholder of the Rydex ETF Trust, you incur transaction costs such as
creation and redemption fees or brokerage charges, and ongoing costs including
advisory fees and, if applicable, distribution fees. All other Trust expenses
are paid by the advisor. This Example is intended to help you understand your
ongoing costs (in dollars) of investing in a Fund and to compare these costs
with the ongoing costs of investing in other mutual funds.
The example in the table is based on an investment of $1,000 invested on April
30, 2008 and held for the six months ended October 31, 2008.
ACTUAL EXPENSES
The first table below provides information about actual account values and
actual expenses. You may use the information in this table, together with the
amount you invested, to estimate the expenses that you incurred over the period.
Simply divide your account value by $1,000 (for example, an $8,600 account value
divided by $1,000 = 8.6), then multiply the result by the number in the first
table under the heading entitled "Expenses Paid During the Six-Month Period" to
estimate the expenses attributable to your investment during this period.
HYPOTHETICAL EXAMPLE FOR COMPARISON PURPOSES
The second table below provides information about hypothetical account values
and hypothetical expenses based on a Fund's actual expense ratio and an assumed
rate of return of 5% per year before expenses, which is not a Fund's actual
return. Thus, you should not use the hypothetical account values and expenses to
estimate the actual ending account balance or your expenses for the period.
Rather, these figures are provided to enable you to compare the ongoing costs of
investing in a Fund and other funds. To do so, compare this 5% hypothetical
example with the 5% hypothetical examples that appear in the shareholder reports
of other funds.
Please note that the expenses shown in the table are meant to highlight your
ongoing costs only and do not reflect any transaction costs, such as creation
and redemption fees, or brokerage charges. Therefore, the second table is useful
in comparing ongoing costs only, and will not help you determine the relative
total costs of owning different funds. In addition, if these transaction costs
were included, your costs would have been higher.
<Table>
<Caption>
BEGINNING ENDING EXPENSES PAID
ACCOUNT ACCOUNT DURING
VALUE VALUE SIX-MONTH PERIOD*
4/30/08 10/31/08 4/30/08 TO 10/31/08
--------- --------- -------------------
ACTUAL
Rydex S&P 500 Pure Value ETF.......................... $1,000.00 $ 506.90 $1.33
Rydex S&P 500 Pure Growth ETF......................... $1,000.00 $ 572.90 $1.38
Rydex S&P MidCap 400 Pure Value ETF................... $1,000.00 $ 530.60 $1.35
Rydex S&P MidCap 400 Pure Growth ETF.................. $1,000.00 $ 599.30 $1.41
Rydex S&P SmallCap 600 Pure Value ETF................. $1,000.00 $ 576.10 $1.39
Rydex S&P SmallCap 600 Pure Growth ETF................ $1,000.00 $ 643.90 $1.45
Rydex S&P Equal Weight Consumer Discretionary ETF..... $1,000.00 $ 496.30 $1.88
Rydex S&P Equal Weight Consumer Staples ETF........... $1,000.00 $ 758.90 $2.21
Rydex S&P Equal Weight Energy ETF..................... $1,000.00 $ 501.40 $1.89
Rydex S&P Equal Weight Financials ETF................. $1,000.00 $ 429.90 $1.80
Rydex S&P Equal Weight Health Care ETF................ $1,000.00 $ 722.50 $2.16
Rydex S&P Equal Weight Industrials ETF................ $1,000.00 $ 554.60 $1.95
Rydex S&P Equal Weight Materials ETF.................. $1,000.00 $ 546.00 $1.94
Rydex S&P Equal Weight Technology ETF................. $1,000.00 $ 513.30 $1.90
Rydex S&P Equal Weight Utilities ETF.................. $1,000.00 $ 713.20 $2.15
HYPOTHETICAL (ASSUMING A 5% RETURN BEFORE EXPENSES)
Rydex S&P 500 Pure Value ETF.......................... $1,000.00 $1,023.38 $1.78
Rydex S&P 500 Pure Growth ETF......................... $1,000.00 $1,023.38 $1.78
Rydex S&P MidCap 400 Pure Value ETF................... $1,000.00 $1,023.38 $1.78
Rydex S&P MidCap 400 Pure Growth ETF.................. $1,000.00 $1,023.38 $1.78
Rydex S&P SmallCap 600 Pure Value ETF................. $1,000.00 $1,023.38 $1.78
Rydex S&P SmallCap 600 Pure Growth ETF................ $1,000.00 $1,023.38 $1.78
Rydex S&P Equal Weight Consumer Discretionary ETF..... $1,000.00 $1,022.62 $2.54
Rydex S&P Equal Weight Consumer Staples ETF........... $1,000.00 $1,022.62 $2.54
Rydex S&P Equal Weight Energy ETF..................... $1,000.00 $1,022.62 $2.54
Rydex S&P Equal Weight Financials ETF................. $1,000.00 $1,022.62 $2.54
Rydex S&P Equal Weight Health Care ETF................ $1,000.00 $1,022.62 $2.54
Rydex S&P Equal Weight Industrials ETF................ $1,000.00 $1,022.62 $2.54
Rydex S&P Equal Weight Materials ETF.................. $1,000.00 $1,022.62 $2.54
Rydex S&P Equal Weight Technology ETF................. $1,000.00 $1,022.62 $2.54
Rydex S&P Equal Weight Utilities ETF**................ $1,000.00 $1,022.62 $2.54
</Table>
- --------
* Expenses are equal to the Fund's annualized expense ratio of 0.35%, 0.35%,
0.35%, 0.35%, 0.35%, 0.35%, 0.50%, 0.50%, 0.50%, 0.50%, 0.50%, 0.50%,
0.50%, 0.50%, and 0.50% respectively, multiplied by the average account
value over the period, multiplied by 184/366 (to reflect one-half year
period).
4
RYDEX S&P 500 PURE VALUE ETF
MANAGER'S ANALYSIS (Unaudited)
- --------------------------------------------------------------------------------
For the year ended October 31, 2008, Rydex S&P 500 Pure Value ETF returned
- -45.76%. Over the year, its benchmark, the S&P 500/CitiGroup Pure Value Total
Return Index, returned -45.68%, underperforming the counterpart S&P 500 Value
Index, by almost 8%. The traditional S&P 500 Value Index delivered a -38.07
total return. Large-cap value was the hardest hit of the growth and style boxes
(for both pure and traditional style versions). The pure style weighting called
for a larger allocation to the hard-hit financial and consumer discretionary
sectors, which were the biggest reasons for the underperformance. Within these
sectors, the banking and retail industries were dealt particularly tough blows.
The fund had an overweighting to Washington Mutual (WAMU), which suffered a
staggering 99.88% loss. On the retailing side, the pure style weighting to
fashion and home furnishings retailer Dillard's (DDS) also dragged on
performance.
CUMULATIVE FUND PERFORMANCE: MARCH 1, 2006 - OCTOBER 31, 2008
(Performance Graph)
<Table>
<Caption>
S&P
500 /CITIGRPUP
RYDEX S&P PURE VALUE S&P 500
500 PURE TOTAL RETURN VALUE TOTAL
VALUE ETF(A) INDEX(B) RETURN INDEX(C)
------------ -------------- ---------------
3/1/2006 10000 9998 9999
3/2/2006 9956 9954 9984
3/3/2006 9936 9935 9964
3/6/2006 9869 9868 9896
3/7/2006 9839 9835 9876
3/8/2006 9853 9850 9886
3/9/2006 9823 9820 9847
3/10/2006 9923 9920 9927
3/13/2006 9950 9948 9955
3/14/2006 10067 10066 10069
3/15/2006 10124 10121 10122
3/16/2006 10174 10173 10148
3/17/2006 10194 10194 10159
3/20/2006 10154 10152 10132
3/21/2006 10100 10099 10063
3/22/2006 10164 10162 10136
3/23/2006 10151 10149 10110
3/24/2006 10167 10167 10126
3/27/2006 10171 10169 10127
3/28/2006 10107 10107 10056
3/29/2006 10184 10182 10141
3/30/2006 10110 10108 10110
3/31/2006 10070 10068 10076
4/3/2006 10110 10107 10112
4/4/2006 10184 10181 10189
4/5/2006 10241 10241 10247
4/6/2006 10208 10206 10230
4/7/2006 10100 10099 10124
4/10/2006 10090 10087 10130
4/11/2006 10007 10006 10053
4/12/2006 10050 10050 10075
4/13/2006 10050 10049 10082
4/14/2006 10050 10049 10082
4/17/2006 10044 10041 10065
4/18/2006 10241 10242 10262
4/19/2006 10278 10278 10279
4/20/2006 10311 10310 10297
4/21/2006 10308 10309 10304
4/24/2006 10291 10291 10281
4/25/2006 10231 10230 10221
4/26/2006 10308 10309 10258
4/27/2006 10345 10346 10307
4/28/2006 10378 10380 10357
5/1/2006 10352 10353 10312
5/2/2006 10439 10440 10397
5/3/2006 10398 10401 10372
5/4/2006 10432 10433 10415
5/5/2006 10542 10545 10533
5/8/2006 10566 10569 10521
5/9/2006 10569 10572 10536
5/10/2006 10606 10609 10534
5/11/2006 10465 10466 10402
5/12/2006 10325 10326 10272
5/15/2006 10325 10327 10278
5/16/2006 10278 10281 10265
5/17/2006 10094 10096 10076
5/18/2006 10033 10033 10000
5/19/2006 10107 10105 10054
5/22/2006 10077 10076 10013
5/23/2006 10020 10021 9970
5/24/2006 10020 10020 9965
5/25/2006 10171 10170 10081
5/26/2006 10268 10266 10159
5/29/2006 10268 10266 10159
5/30/2006 10094 10092 10001
5/31/2006 10218 10216 10103
6/1/2006 10362 10361 10237
6/2/2006 10368 10367 10268
6/5/2006 10184 10184 10082
6/6/2006 10147 10149 10060
6/7/2006 10090 10091 9998
6/8/2006 10114 10115 10004
6/9/2006 10104 10104 9965
6/12/2006 9980 9982 9837
6/13/2006 9853 9852 9710
6/14/2006 9879 9877 9742
6/15/2006 10121 10123 9974
6/16/2006 10070 10073 9936
6/19/2006 9980 9980 9844
6/20/2006 9980 9980 9850
6/21/2006 10077 10078 9947
6/22/2006 10057 10058 9905
6/23/2006 10064 10067 9894
6/26/2006 10131 10133 9956
6/27/2006 10027 10027 9866
6/28/2006 10084 10086 9928
6/29/2006 10285 10291 10147
6/30/2006 10315 10321 10137
7/3/2006 10368 10375 10226
7/4/2006 10368 10375 10226
7/5/2006 10275 10279 10157
7/6/2006 10285 10291 10179
7/7/2006 10248 10254 10117
7/10/2006 10295 10301 10136
7/11/2006 10318 10326 10185
7/12/2006 10218 10225 10079
7/13/2006 10057 10061 9929
7/14/2006 10000 10004 9881
7/17/2006 9977 9982 9860
7/18/2006 9990 9996 9884
7/19/2006 10154 10160 10089
7/20/2006 10064 10070 10001
7/21/2006 9993 10000 9922
7/24/2006 10147 10155 10083
7/25/2006 10241 10248 10154
7/26/2006 10248 10254 10156
7/27/2006 10157 10165 10121
7/28/2006 10268 10277 10248
7/31/2006 10264 10271 10239
8/1/2006 10194 10202 10197
8/2/2006 10254 10263 10260
8/3/2006 10315 10321 10284
8/4/2006 10298 10307 10276
8/7/2006 10268 10277 10240
8/8/2006 10238 10245 10196
8/9/2006 10167 10174 10129
8/10/2006 10204 10212 10174
8/11/2006 10164 10171 10134
8/14/2006 10191 10199 10139
8/15/2006 10328 10339 10287
8/16/2006 10415 10427 10363
8/17/2006 10418 10428 10374
8/18/2006 10432 10441 10402
8/21/2006 10375 10386 10367
8/22/2006 10395 10406 10377
8/23/2006 10331 10342 10334
8/24/2006 10328 10337 10346
8/25/2006 10321 10332 10333
8/28/2006 10385 10397 10383
8/29/2006 10415 10426 10393
8/30/2006 10395 10406 10387
8/31/2006 10435 10448 10395
9/1/2006 10485 10498 10452
9/4/2006 10485 10498 10452
9/5/2006 10506 10517 10476
9/6/2006 10425 10436 10380
9/7/2006 10385 10395 10327
9/8/2006 10442 10455 10364
9/11/2006 10425 10439 10350
9/12/2006 10549 10562 10449
9/13/2006 10603 10618 10509
9/14/2006 10566 10579 10494
9/15/2006 10548 10564 10509
9/18/2006 10538 10552 10523
9/19/2006 10518 10532 10510
9/20/2006 10569 10584 10561
9/21/2006 10481 10497 10505
9/22/2006 10455 10470 10493
9/25/2006 10562 10577 10592
9/26/2006 10642 10658 10674
9/27/2006 10656 10673 10668
9/28/2006 10672 10689 10690
9/29/2006 10622 10638 10672
10/2/2006 10625 10643 10651
10/3/2006 10656 10671 10682
10/4/2006 10759 10778 10794
10/5/2006 10759 10778 10818
10/6/2006 10696 10712 10785
10/9/2006 10733 10750 10804
10/10/2006 10783 10803 10832
10/11/2006 10803 10821 10813
10/12/2006 10910 10928 10918
10/13/2006 10950 10969 10955
10/16/2006 10994 11013 10975
10/17/2006 10954 10973 10936
10/18/2006 10964 10986 10939
10/19/2006 10964 10984 10945
10/20/2006 10957 10977 10943
10/23/2006 11027 11050 11011
10/24/2006 11067 11091 11028
10/25/2006 11081 11104 11061
10/26/2006 11131 11155 11117
10/27/2006 11041 11062 11029
10/30/2006 11067 11090 11032
10/31/2006 11027 11051 11028
11/1/2006 10980 11001 10949
11/2/2006 10960 10983 10943
11/3/2006 10899 10921 10917
11/6/2006 11014 11038 11038
11/7/2006 11027 11050 11062
11/8/2006 11071 11093 11103
11/9/2006 11031 11053 11054
11/10/2006 11085 11109 11080
11/13/2006 11112 11137 11114
11/14/2006 11203 11228 11171
11/15/2006 11213 11238 11183
11/16/2006 11247 11273 11212
11/17/2006 11226 11252 11215
11/20/2006 11226 11252 11219
11/21/2006 11250 11277 11232
11/22/2006 11267 11293 11249
11/23/2006 11267 11293 11249
11/24/2006 11253 11281 11219
11/27/2006 11098 11124 11069
11/28/2006 11115 11143 11098
11/29/2006 11257 11284 11214
11/30/2006 11287 11315 11226
12/1/2006 11250 11277 11192
12/4/2006 11385 11415 11313
12/5/2006 11419 11449 11366
12/6/2006 11402 11433 11363
12/7/2006 11358 11388 11327
12/8/2006 11375 11406 11353
12/11/2006 11409 11441 11391
12/12/2006 11402 11431 11384
12/13/2006 11405 11437 11395
12/14/2006 11500 11533 11489
12/15/2006 11493 11524 11507
12/18/2006 11439 11473 11493
12/19/2006 11453 11486 11507
12/20/2006 11469 11506 11511
12/21/2006 11432 11469 11476
12/22/2006 11405 11440 11419
12/25/2006 11405 11440 11419
12/26/2006 11469 11506 11479
12/27/2006 11559 11596 11572
12/28/2006 11529 11564 11549
12/29/2006 11481 11517 11496
1/1/2007 11481 11517 11496
1/2/2007 11481 11517 11496
1/3/2007 11505 11541 11495
1/4/2007 11488 11524 11488
1/5/2007 11383 11417 11397
1/8/2007 11404 11439 11431
1/9/2007 11390 11426 11420
1/10/2007 11397 11431 11448
1/11/2007 11451 11487 11514
1/12/2007 11465 11500 11558
1/15/2007 11465 11500 11558
1/16/2007 11482 11518 11588
1/17/2007 11461 11497 11566
1/18/2007 11465 11500 11552
1/19/2007 11533 11569 11580
1/22/2007 11502 11539 11538
1/23/2007 11560 11598 11584
1/24/2007 11652 11690 11685
1/25/2007 11577 11616 11554
1/26/2007 11614 11651 11552
1/29/2007 11611 11650 11537
1/30/2007 11672 11710 11611
1/31/2007 11733 11772 11699
2/1/2007 11818 11857 11765
2/2/2007 11852 11891 11785
2/5/2007 11862 11904 11784
2/6/2007 11923 11963 11801
2/7/2007 11954 11995 11821
2/8/2007 11961 12003 11798
2/9/2007 11913 11954 11714
2/12/2007 11882 11925 11686
2/13/2007 12012 12053 11798
2/14/2007 12076 12119 11890
2/15/2007 12100 12143 11891
2/16/2007 12113 12159 11885
2/19/2007 12113 12159 11885
2/20/2007 12164 12208 11920
2/21/2007 12151 12197 11903
2/22/2007 12127 12172 11889
2/23/2007 12107 12152 11838
2/26/2007 12141 12188 11839
2/27/2007 11733 11776 11427
2/28/2007 11784 11828 11501
3/1/2007 11757 11799 11481
3/2/2007 11601 11642 11340
3/5/2007 11451 11493 11211
3/6/2007 11621 11662 11396
3/7/2007 11587 11630 11364
3/8/2007 11689 11731 11460
3/9/2007 11716 11760 11478
3/12/2007 11740 11785 11518
3/13/2007 11516 11558 11269
3/14/2007 11563 11605 11335
3/15/2007 11638 11682 11395
3/16/2007 11586 11631 11349
3/19/2007 11712 11755 11476
3/20/2007 11810 11856 11554
3/21/2007 11984 12030 11764
3/22/2007 11970 12016 11745
3/23/2007 12014 12061 11767
3/26/2007 12028 12075 11772
3/27/2007 11977 12024 11702
3/28/2007 11902 11950 11605
3/29/2007 11933 11979 11661
3/30/2007 11922 11970 11650
4/2/2007 11991 12038 11670
4/3/2007 12069 12120 11777
4/4/2007 12049 12097 11771
4/5/2007 12066 12117 11812
4/6/2007 12066 12117 11812
4/9/2007 12083 12133 11826
4/10/2007 12103 12153 11858
4/11/2007 12038 12089 11781
4/12/2007 12079 12131 11837
4/13/2007 12103 12153 11882
4/16/2007 12226 12277 12016
4/17/2007 12223 12275 12019
4/18/2007 12260 12313 12058
4/19/2007 12253 12305 12051
4/20/2007 12366 12421 12156
4/23/2007 12363 12416 12131
4/24/2007 12373 12427 12123
4/25/2007 12496 12550 12252
4/26/2007 12489 12545 12233
4/27/2007 12462 12517 12229
4/30/2007 12335 12390 12139
5/1/2007 12404 12458 12169
5/2/2007 12503 12557 12252
5/3/2007 12543 12600 12316
5/4/2007 12571 12627 12352
5/7/2007 12615 12673 12393
5/8/2007 12612 12669 12371
5/9/2007 12663 12721 12432
5/10/2007 12496 12553 12264
5/11/2007 12591 12649 12385
5/14/2007 12601 12658 12370
5/15/2007 12591 12650 12374
5/16/2007 12673 12732 12484
5/17/2007 12663 12721 12474
5/18/2007 12728 12787 12541
5/21/2007 12755 12816 12563
5/22/2007 12745 12803 12559
5/23/2007 12690 12750 12546
5/24/2007 12526 12583 12420
5/25/2007 12574 12634 12486
5/28/2007 12574 12634 12486
5/29/2007 12598 12656 12507
5/30/2007 12677 12736 12611
5/31/2007 12683 12745 12603
6/1/2007 12755 12817 12644
6/4/2007 12776 12838 12650
6/5/2007 12690 12751 12568
6/6/2007 12571 12631 12462
6/7/2007 12315 12373 12238
6/8/2007 12451 12511 12388
6/11/2007 12485 12545 12409
6/12/2007 12349 12407 12263
6/13/2007 12540 12600 12473
6/14/2007 12584 12646 12524
6/15/2007 12684 12746 12601
6/18/2007 12653 12714 12578
6/19/2007 12667 12728 12618
6/20/2007 12503 12563 12434
6/21/2007 12581 12641 12511
6/22/2007 12441 12502 12344
6/25/2007 12411 12470 12301
6/26/2007 12342 12402 12253
6/27/2007 12448 12511 12371
6/28/2007 12489 12552 12365
6/29/2007 12465 12527 12344
7/2/2007 12637 12701 12498
7/3/2007 12664 12728 12548
7/4/2007 12664 12728 12548
7/5/2007 12620 12683 12530
7/6/2007 12626 12692 12559
7/9/2007 12637 12703 12564
7/10/2007 12428 12490 12361
7/11/2007 12486 12549 12440
7/12/2007 12695 12762 12690
7/13/2007 12757 12822 12737
7/16/2007 12678 12743 12709
7/17/2007 12668 12734 12710
7/18/2007 12633 12700 12657
7/19/2007 12688 12755 12697
7/20/2007 12469 12535 12521
7/23/2007 12506 12571 12582
7/24/2007 12184 12246 12306
7/25/2007 12187 12250 12352
7/26/2007 11862 11923 12048
7/27/2007 11677 11736 11858
7/30/2007 11848 11908 11998
7/31/2007 11731 11791 11858
8/1/2007 11803 11863 11939
8/2/2007 11838 11898 11997
8/3/2007 11419 11478 11646
8/6/2007 11721 11782 11954
8/7/2007 11821 11881 12030
8/8/2007 11906 11970 12187
8/9/2007 11505 11565 11792
8/10/2007 11594 11653 11797
8/13/2007 11649 11711 11820
8/14/2007 11378 11437 11586
8/15/2007 11193 11249 11424
8/16/2007 11262 11320 11527
8/17/2007 11529 11588 11830
8/20/2007 11557 11618 11833
8/21/2007 11622 11683 11858
8/22/2007 11769 11833 12010
8/23/2007 11735 11796 11990
8/24/2007 11862 11928 12119
8/27/2007 11687 11749 11995
8/28/2007 11378 11436 11676
8/29/2007 11653 11717 11949
8/30/2007 11560 11621 11871
8/31/2007 11697 11762 12018
9/3/2007 11697 11762 12018
9/4/2007 11800 11866 12148
9/5/2007 11601 11663 11975
9/6/2007 11629 11691 12031
9/7/2007 11430 11491 11825
9/10/2007 11364 11424 11806
9/11/2007 11491 11555 11957
9/12/2007 11481 11543 11950
9/13/2007 11574 11639 12073
9/14/2007 11591 11654 12070
9/17/2007 11560 11624 12007
9/18/2007 11920 11988 12397
9/19/2007 12009 12079 12470
9/20/2007 11855 11922 12363
9/21/2007 11891 11959 12423
9/24/2007 11809 11877 12341
9/25/2007 11771 11838 12326
9/26/2007 11874 11944 12395
9/27/2007 11877 11945 12444
9/28/2007 11812 11879 12391
10/1/2007 11940 12010 12572
10/2/2007 11974 12044 12594
10/3/2007 11950 12019 12545
10/4/2007 11978 12047 12584
10/5/2007 12112 12186 12712
10/8/2007 12047 12118 12655
10/9/2007 12140 12212 12745
10/10/2007 12095 12167 12698
10/11/2007 12071 12143 12646
10/12/2007 12133 12205 12687
10/15/2007 11991 12065 12570
10/16/2007 11857 11926 12460
10/17/2007 11836 11907 12487
10/18/2007 11809 11877 12454
10/19/2007 11529 11596 12129
10/22/2007 11577 11647 12182
10/23/2007 11608 11678 12281
10/24/2007 11588 11655 12234
10/25/2007 11605 11673 12234
10/26/2007 11746 11817 12429
10/29/2007 11778 11850 12457
10/30/2007 11743 11813 12376
10/31/2007 11888 11959 12521
11/1/2007 11567 11625 12164
11/2/2007 11564 11620 12135
11/5/2007 11505 11556 12047
11/6/2007 11622 11680 12185
11/7/2007 11239 11296 11798
11/8/2007 11353 11411 11843
11/9/2007 11229 11287 11711
11/12/2007 11139 11199 11601
11/13/2007 11412 11477 11960
11/14/2007 11326 11386 11872
11/15/2007 11167 11223 11688
11/16/2007 11143 11194 11718
11/19/2007 10912 10954 11473
11/20/2007 10912 10955 11492
11/21/2007 10781 10826 11304
11/22/2007 10781 10826 11304
11/23/2007 10956 11008 11515
11/26/2007 10722 10769 11214
11/27/2007 10836 10890 11390
11/28/2007 11174 11236 11758
11/29/2007 11146 11214 11758
11/30/2007 11315 11394 11913
12/3/2007 11267 11343 11847
12/4/2007 11195 11269 11752
12/5/2007 11353 11430 11935
12/6/2007 11536 11615 12125
12/7/2007 11543 11624 12111
12/10/2007 11622 11704 12219
12/11/2007 11229 11306 11868
12/12/2007 11263 11340 11916
12/13/2007 11270 11348 11935
12/14/2007 11057 11131 11761
12/17/2007 10915 10987 11583
12/18/2007 11008 11080 11644
12/19/2007 10960 11031 11624
12/20/2007 10977 11051 11658
12/21/2007 11171 11249 11867
12/24/2007 11316 11403 11976
12/25/2007 11316 11403 11976
12/26/2007 11247 11333 11962
12/27/2007 11088 11172 11783
12/28/2007 10981 11061 11783
12/31/2007 11009 11092 11725
1/1/2008 11009 11092 11725
1/2/2008 10786 10865 11527
1/3/2008 10608 10685 11509
1/4/2008 10246 10317 11258
1/7/2008 10322 10395 11330
1/8/2008 9901 9969 11095
1/9/2008 9956 10026 11228
1/10/2008 10242 10314 11361
1/11/2008 10207 10278 11237
1/14/2008 10260 10334 11342
1/15/2008 9950 10018 11059
1/16/2008 10078 10149 11079
1/17/2008 9706 9769 10719
1/18/2008 9601 9666 10604
1/21/2008 9601 9666 10604
1/22/2008 9824 9891 10568
1/23/2008 10542 10619 10927
1/24/2008 10538 10615 10980
1/25/2008 10378 10455 10802
1/28/2008 10758 10839 11046
1/29/2008 10967 11051 11157
1/30/2008 10852 10935 11106
1/31/2008 11253 11343 11317
2/1/2008 11532 11625 11494
2/4/2008 11215 11303 11350
2/5/2008 10782 10865 10957
2/6/2008 10685 10765 10907
2/7/2008 10828 10912 10991
2/8/2008 10674 10754 10876
2/11/2008 10674 10755 10892
2/12/2008 10699 10781 11004
2/13/2008 10800 10883 11142
2/14/2008 10580 10661 10978
2/15/2008 10587 10666 11014
2/18/2008 10587 10666 11014
2/19/2008 10511 10588 10962
2/20/2008 10692 10774 11034
2/21/2008 10469 10546 10901
2/22/2008 10580 10660 11010
2/25/2008 10741 10822 11158
2/26/2008 10849 10933 11216
2/27/2008 10849 10933 11209
2/28/2008 10497 10574 11047
2/29/2008 10078 10149 10727
3/3/2008 9974 10043 10717
3/4/2008 9984 10053 10685
3/5/2008 9970 10038 10719
3/6/2008 9584 9644 10462
3/7/2008 9573 9631 10399
3/10/2008 9368 9421 10223
3/11/2008 9908 9973 10649
3/12/2008 9713 9774 10536
3/13/2008 9796 9858 10564
3/14/2008 9479 9536 10311
3/17/2008 9221 9274 10250
3/18/2008 9740 9804 10735
3/19/2008 9608 9670 10519
3/20/2008 10036 10108 10854
3/21/2008 10036 10108 10854
3/24/2008 10280 10354 10987
3/25/2008 10245 10320 10999
3/26/2008 9945 10014 10827
3/27/2008 9816 9881 10715
3/28/2008 9628 9689 10614
3/31/2008 9729 9794 10677
4/1/2008 10260 10335 11120
4/2/2008 10330 10406 11085
4/3/2008 10366 10439 11115
4/4/2008 10250 10322 11071
4/7/2008 10323 10400 11105
4/8/2008 10148 10218 11016
4/9/2008 9933 10001 10897
4/10/2008 9947 10015 10916
4/11/2008 9757 9823 10669
4/14/2008 9581 9646 10580
4/15/2008 9669 9734 10634
4/16/2008 9922 9993 10885
4/17/2008 10028 10098 10910
4/18/2008 10211 10284 11072
4/21/2008 10056 10129 11001
4/22/2008 9887 9957 10903
4/23/2008 9778 9846 10917
4/24/2008 10042 10115 11080
4/25/2008 10179 10252 11185
4/28/2008 10221 10294 11170
4/29/2008 10232 10306 11131
4/30/2008 10063 10135 11075
5/1/2008 10411 10489 11342
5/2/2008 10432 10509 11382
5/5/2008 10320 10397 11300
5/6/2008 10429 10507 11365
5/7/2008 10172 10245 11140
5/8/2008 10102 10177 11148
5/9/2008 10070 10145 11072
5/12/2008 10271 10348 11218
5/13/2008 10225 10302 11179
5/14/2008 10359 10435 11267
5/15/2008 10503 10581 11373
5/16/2008 10390 10469 11342
5/19/2008 10348 10425 11357
5/20/2008 10165 10241 11203
5/21/2008 9929 10002 11020
5/22/2008 9982 10055 11068
5/23/2008 9789 9861 10894
5/26/2008 9789 9861 10894
5/27/2008 9887 9960 10973
5/28/2008 9894 9966 11001
5/29/2008 10021 10097 11099
5/30/2008 9944 10018 11088
6/2/2008 9831 9903 10954
6/3/2008 9799 9873 10892
6/4/2008 9761 9833 10879
6/5/2008 9877 9951 11059
6/6/2008 9451 9518 10678
6/9/2008 9339 9406 10630
6/10/2008 9339 9405 10628
6/11/2008 9043 9106 10400
6/12/2008 9145 9208 10457
6/13/2008 9275 9341 10609
6/16/2008 9339 9406 10608
6/17/2008 9173 9238 10482
6/18/2008 9015 9076 10361
6/19/2008 9113 9178 10422
6/20/2008 8926 8986 10214
6/23/2008 8718 8793 10146
6/24/2008 8789 8863 10171
6/25/2008 8912 8988 10240
6/26/2008 8599 8667 9899
6/27/2008 8507 8574 9835
6/30/2008 8430 8496 9845
7/1/2008 8472 8540 9876
7/2/2008 8302 8368 9714
7/3/2008 8241 8306 9721
7/4/2008 8241 8306 9721
7/7/2008 8092 8154 9613
7/8/2008 8430 8497 9872
7/9/2008 8145 8208 9626
7/10/2008 8064 8125 9665
7/11/2008 7886 7944 9537
7/14/2008 7633 7691 9379
7/15/2008 7576 7632 9265
7/16/2008 8028 8091 9639
7/17/2008 8327 8394 9839
7/18/2008 8355 8423 9876
7/21/2008 8348 8415 9833
7/22/2008 8657 8727 10071
7/23/2008 8771 8843 10172
7/24/2008 8320 8385 9856
7/25/2008 8273 8338 9847
7/28/2008 8056 8120 9616
7/29/2008 8416 8484 9930
7/30/2008 8508 8577 10090
7/31/2008 8494 8564 9978
8/1/2008 8501 8572 9941
8/4/2008 8458 8529 9885
8/5/2008 8785 8859 10204
8/6/2008 8760 8834 10180
8/7/2008 8551 8622 9947
8/8/2008 8881 8956 10239
8/11/2008 9059 9138 10351
8/12/2008 8775 8850 10143
8/13/2008 8668 8739 10047
8/14/2008 8849 8924 10138
8/15/2008 8967 9044 10221
8/18/2008 8764 8838 10040
8/19/2008 8572 8642 9879
8/20/2008 8583 8653 9936
8/21/2008 8576 8646 9939
8/22/2008 8732 8808 10100
8/25/2008 8551 8622 9883
8/26/2008 8544 8616 9917
8/27/2008 8693 8765 10003
8/28/2008 8967 9044 10227
8/29/2008 8917 8995 10112
9/1/2008 8917 8995 10112
9/2/2008 9024 9103 10152
9/3/2008 9119 9201 10160
9/4/2008 8792 8869 9831
9/5/2008 8917 8996 9923
9/8/2008 9311 9394 10230
9/9/2008 8910 8986 9858
9/10/2008 8899 8978 9863
9/11/2008 9002 9080 9998
9/12/2008 9048 9129 9985
9/15/2008 8568 8640 9436
9/16/2008 8771 8847 9646
9/17/2008 8248 8317 9110
9/18/2008 8999 9078 9629
9/19/2008 9488 9575 10138
9/22/2008 8780 8857 9651
9/23/2008 8613 8688 9486
9/24/2008 8628 8701 9435
9/25/2008 8855 8934 9649
9/26/2008 8862 8941 9728
9/29/2008 7877 7934 8813
9/30/2008 8293 8360 9355
10/1/2008 8469 8539 9388
10/2/2008 8150 8217 9011
10/3/2008 7953 8014 8854
10/6/2008 7626 7683 8507
10/7/2008 7095 7146 7933
10/8/2008 6927 6978 7793
10/9/2008 6202 6242 7156
10/10/2008 6267 6310 7204
10/13/2008 6758 6805 7939
10/14/2008 6891 6940 8025
10/15/2008 6259 6303 7345
10/16/2008 6442 6487 7594
10/17/2008 6417 6460 7528
10/20/2008 6683 6731 7856
10/21/2008 6478 6523 7654
10/22/2008 6091 6131 7194
10/23/2008 6008 6047 7263
10/24/2008 5754 5788 6994
10/27/2008 5592 5627 6801
10/28/2008 6134 6175 7559
10/29/2008 6109 6148 7404
10/30/2008 6281 6326 7593
10/31/2008 6450 6494 7755
</Table>
AVERAGE ANNUAL TOTAL RETURNS FOR THE PERIOD ENDED OCTOBER 31, 2008
- --------------------------------------------------------------------------------
<Table>
<Caption>
SINCE INCEPTION
ONE YEAR (03/01/06)
-------- ---------------
RYDEX S&P 500 PURE VALUE ETF...................................... -45.76% -15.15%
S&P 500/CITIGROUP PURE VALUE TOTAL RETURN INDEX................... -45.68% -14.94%
S&P 500 VALUE TOTAL RETURN INDEX.................................. -38.07% -9.09%
</Table>
The returns presented above do not reflect the effect of taxes. Index returns
represent total returns. Past performance is no guarantee of future results.
5 ANNUAL REPORT
Rydex S&P 500 Pure Value ETF
PORTFOLIO SUMMARY (Unaudited) As of October 31, 2008
- --------------------------------------------------------------------------------
TOP 10 HOLDINGS*
- --------------------------------------------------------------------------------
<Table>
<Caption>
DESCRIPTION % OF NET ASSETS
- ------------------------------------------------------------------------------------
KB HOME 3.14%
SPECTRA ENERGY CORP. 2.56%
INTEGRYS ENERGY GROUP, INC. 2.50%
D.R. HORTON, INC. 2.16%
JONES APPAREL GROUP, INC. 1.90%
NISOURCE, INC. 1.78%
LENNAR CORP. -- CLASS A 1.70%
NICOR, INC. 1.68%
DTE ENERGY CO. 1.65%
RYDER SYSTEM, INC. 1.58%
- ------------------------------------------------------------------------------------
</Table>
SECTOR ALLOCATIONS*
(PIE CHART)
<Table>
Financials 30.08
Utilities 21.35
Consumer Discretionary 21.12
Health Care 4.98
Consumer Staples 4.95
Industrials 4.93
Materials 4.69
Telecommunication Services 3.47
Energy 2.58
Information Technology 1.85
</Table>
* The Fund's Top Ten Holdings are expressed as a percentage of net assets and
the Sector Allocations are expressed as a percentage of the Fund's investments
market value. These percentages may change over time.
6
RYDEX S&P 500 PURE GROWTH ETF
MANAGER'S ANALYSIS (Unaudited)
- --------------------------------------------------------------------------------
For the year ended October 31, 2008, Rydex S&P 500 Pure Growth ETF returned
- -38.00%. Over the year, its benchmark, the S&P 500/CitiGroup Pure Growth Total
Return Index, turned in a -37.89% return, which underperformed the counterpart
S&P 500 Growth Total Return Index, whose return was -34.15%, by nearly 3 1/2%.
In a time when few areas escaped from the downturn in the market, large-cap
growth tended to weather the challenges slightly better than large-cap value.
Large-cap pure growth underperformed its traditional counterpart in three out of
four quarters this year. Pure growth and traditional growth strategies alike
were helped the most by the consumer staples sector, while information
technology was the biggest sector detractor for both. The pure style weightings
to the technology and energy sectors were the biggest reasons for the
underperformance. Drilling down on the energy front, the fund's underweighting
to ExxonMobil (XOM) was most responsible for lagging the traditional index in
energy. The pure style weighting to the financial sector, and specifically the
relative underweighting to troubled insurer American International Group (AIG),
helped buoy the fund.
CUMULATIVE FUND PERFORMANCE: MARCH 1, 2006 - OCTOBER 31, 2008
(Performance Graph)
<Table>
<Caption>
S&P 500/CITIGROUP
RYDEX S&P PURE GROWTH S&P 500
500 PURE TOTAL RETURN GROWTH TOTAL
GROWTH ETF(A) INDEX(B) RETURN INDEX(C)
------------- ----------------- ---------------
3/1/2006 10000 10000 10000
3/2/2006 9991 9992 9983
3/3/2006 9965 9966 9974
3/6/2006 9887 9889 9903
3/7/2006 9849 9850 9887
3/8/2006 9875 9877 9922
3/9/2006 9826 9826 9866
3/10/2006 9884 9884 9931
3/13/2006 9901 9903 9948
3/14/2006 10017 10019 10041
3/15/2006 10052 10055 10076
3/16/2006 10073 10075 10086
3/17/2006 10084 10087 10105
3/20/2006 10058 10061 10098
3/21/2006 10000 10002 10045
3/22/2006 10038 10039 10094
3/23/2006 10035 10038 10068
3/24/2006 10058 10061 10072
3/27/2006 10046 10048 10050
3/28/2006 10029 10031 9991
3/29/2006 10119 10122 10060
3/30/2006 10105 10107 10051
3/31/2006 10058 10062 10002
4/3/2006 10046 10050 10012
4/4/2006 10110 10114 10063
4/5/2006 10131 10134 10094
4/6/2006 10128 10131 10078
4/7/2006 10038 10042 9973
4/10/2006 10038 10041 9985
4/11/2006 9945 9949 9910
4/12/2006 9954 9959 9913
4/13/2006 9956 9962 9921
4/14/2006 9956 9962 9921
4/17/2006 9945 9949 9879
4/18/2006 10073 10077 10029
4/19/2006 10108 10113 10050
4/20/2006 10142 10149 10056
4/21/2006 10096 10100 10047
4/24/2006 10078 10083 10021
4/25/2006 10012 10017 9982
4/26/2006 10017 10023 10004
4/27/2006 9980 9984 10028
4/28/2006 9974 9978 9994
5/1/2006 9924 9930 9954
5/2/2006 9948 9953 9994
5/3/2006 9910 9914 9940
5/4/2006 9924 9930 9967
5/5/2006 10023 10028 10059
5/8/2006 10026 10031 10056
5/9/2006 9997 10002 10048
5/10/2006 9988 9994 10024
5/11/2006 9849 9854 9896
5/12/2006 9727 9734 9799
5/15/2006 9747 9752 9845
5/16/2006 9724 9730 9821
5/17/2006 9593 9598 9677
5/18/2006 9538 9544 9621
5/19/2006 9573 9580 9649
5/22/2006 9524 9530 9613
5/23/2006 9468 9475 9571
5/24/2006 9489 9493 9606
5/25/2006 9590 9595 9715
5/26/2006 9628 9636 9754
5/29/2006 9628 9636 9754
5/30/2006 9486 9493 9598
5/31/2006 9567 9573 9662
6/1/2006 9680 9688 9773
6/2/2006 9660 9667 9781
6/5/2006 9480 9488 9611
6/6/2006 9451 9458 9611
6/7/2006 9431 9437 9557
6/8/2006 9436 9444 9580
6/9/2006 9402 9411 9531
6/12/2006 9265 9273 9412
6/13/2006 9195 9204 9346
6/14/2006 9256 9265 9413
6/15/2006 9468 9476 9589
6/16/2006 9433 9441 9554
6/19/2006 9323 9331 9469
6/20/2006 9297 9305 9463
6/21/2006 9413 9422 9555
6/22/2006 9358 9368 9499
6/23/2006 9375 9384 9492
6/26/2006 9387 9397 9525
6/27/2006 9288 9297 9439
6/28/2006 9329 9338 9486
6/29/2006 9544 9555 9686
6/30/2006 9553 9563 9656
7/3/2006 9585 9596 9725
7/4/2006 9585 9596 9725
7/5/2006 9483 9493 9652
7/6/2006 9494 9507 9684
7/7/2006 9422 9435 9612
7/10/2006 9413 9425 9623
7/11/2006 9451 9463 9656
7/12/2006 9338 9348 9547
7/13/2006 9230 9241 9443
7/14/2006 9160 9171 9395
7/17/2006 9163 9174 9390
7/18/2006 9143 9154 9403
7/19/2006 9311 9324 9559
7/20/2006 9198 9209 9480
7/21/2006 9099 9111 9421
7/24/2006 9288 9299 9582
7/25/2006 9378 9390 9636
7/26/2006 9343 9357 9626
7/27/2006 9279 9292 9584
7/28/2006 9407 9420 9697
7/31/2006 9404 9419 9677
8/1/2006 9361 9373 9630
8/2/2006 9436 9450 9688
8/3/2006 9480 9494 9698
8/4/2006 9471 9484 9692
8/7/2006 9436 9450 9673
8/8/2006 9416 9430 9651
8/9/2006 9341 9356 9636
8/10/2006 9396 9411 9686
8/11/2006 9341 9356 9650
8/14/2006 9329 9346 9668
8/15/2006 9489 9505 9794
8/16/2006 9602 9621 9876
8/17/2006 9643 9661 9899
8/18/2006 9657 9677 9945
8/21/2006 9590 9607 9906
8/22/2006 9605 9624 9916
8/23/2006 9547 9566 9870
8/24/2006 9564 9584 9906
8/25/2006 9555 9575 9906
8/28/2006 9622 9642 9961
8/29/2006 9672 9691 9992
8/30/2006 9698 9718 10006
8/31/2006 9701 9720 9992
9/1/2006 9753 9772 10048
9/4/2006 9753 9772 10048
9/5/2006 9782 9801 10060
9/6/2006 9660 9679 9957
9/7/2006 9614 9633 9913
9/8/2006 9672 9691 9953
9/11/2006 9701 9722 9977
9/12/2006 9869 9890 10090
9/13/2006 9907 9930 10114
9/14/2006 9884 9907 10102
9/15/2006 9949 9972 10143
9/18/2006 9940 9963 10150
9/19/2006 9902 9924 10119
9/20/2006 9961 9982 10175
9/21/2006 9894 9915 10124
9/22/2006 9841 9862 10085
9/25/2006 9940 9963 10168
9/26/2006 9992 10016 10242
9/27/2006 9984 10007 10256
9/28/2006 9995 10018 10274
9/29/2006 9963 9988 10241
10/2/2006 9908 9933 10192
10/3/2006 9897 9920 10205
10/4/2006 10083 10108 10350
10/5/2006 10135 10160 10378
10/6/2006 10094 10119 10354
10/9/2006 10132 10157 10352
10/10/2006 10138 10164 10369
10/11/2006 10094 10118 10335
10/12/2006 10202 10229 10432
10/13/2006 10190 10217 10439
10/16/2006 10234 10259 10473
10/17/2006 10176 10201 10434
10/18/2006 10173 10199 10462
10/19/2006 10173 10198 10473
10/20/2006 10158 10185 10500
10/23/2006 10219 10246 10565
10/24/2006 10263 10289 10554
10/25/2006 10277 10306 10597
10/26/2006 10347 10376 10648
10/27/2006 10242 10271 10555
10/30/2006 10263 10291 10563
10/31/2006 10277 10305 10567
11/1/2006 10155 10184 10490
11/2/2006 10158 10185 10494
11/3/2006 10126 10153 10474
11/6/2006 10263 10290 10596
11/7/2006 10274 10302 10621
11/8/2006 10277 10307 10631
11/9/2006 10219 10248 10568
11/10/2006 10257 10285 10582
11/13/2006 10295 10324 10609
11/14/2006 10397 10427 10692
11/15/2006 10472 10502 10737
11/16/2006 10496 10527 10759
11/17/2006 10487 10519 10779
11/20/2006 10446 10478 10764
11/21/2006 10487 10517 10789
11/22/2006 10542 10575 10825
11/23/2006 10542 10575 10825
11/24/2006 10501 10532 10777
11/27/2006 10324 10354 10628
11/28/2006 10356 10388 10679
11/29/2006 10452 10483 10773
11/30/2006 10484 10517 10779
12/1/2006 10440 10471 10752
12/4/2006 10554 10586 10826
12/5/2006 10606 10638 10863
12/6/2006 10603 10637 10843
12/7/2006 10542 10574 10792
12/8/2006 10545 10577 10806
12/11/2006 10557 10590 10819
12/12/2006 10522 10553 10804
12/13/2006 10530 10564 10822
12/14/2006 10615 10647 10923
12/15/2006 10600 10635 10930
12/18/2006 10528 10561 10872
12/19/2006 10560 10595 10908
12/20/2006 10539 10573 10872
12/21/2006 10501 10535 10830
12/22/2006 10455 10489 10772
12/25/2006 10455 10489 10772
12/26/2006 10472 10506 10809
12/27/2006 10528 10562 10877
12/28/2006 10504 10541 10868
12/29/2006 10452 10487 10820
1/1/2007 10452 10487 10820
1/2/2007 10452 10487 10820
1/3/2007 10405 10441 10799
1/4/2007 10458 10494 10832
1/5/2007 10408 10445 10788
1/8/2007 10440 10477 10810
1/9/2007 10446 10481 10809
1/10/2007 10467 10503 10827
1/11/2007 10554 10590 10903
1/12/2007 10604 10640 10967
1/15/2007 10604 10640 10967
1/16/2007 10589 10628 10956
1/17/2007 10606 10644 10959
1/18/2007 10554 10592 10907
1/19/2007 10601 10637 10944
1/22/2007 10542 10582 10868
1/23/2007 10598 10635 10902
1/24/2007 10676 10716 10993
1/25/2007 10571 10611 10868
1/26/2007 10557 10595 10843
1/29/2007 10566 10605 10836
1/30/2007 10639 10678 10892
1/31/2007 10714 10755 10955
2/1/2007 10787 10826 11016
2/2/2007 10808 10847 11034
2/5/2007 10778 10819 11015
2/6/2007 10802 10843 11014
2/7/2007 10843 10884 11036
2/8/2007 10848 10889 11032
2/9/2007 10767 10807 10955
2/12/2007 10723 10765 10911
2/13/2007 10787 10828 10975
2/14/2007 10883 10924 11063
2/15/2007 10930 10971 11087
2/16/2007 10924 10966 11074
2/19/2007 10924 10966 11074
2/20/2007 10980 11021 11104
2/21/2007 10959 11002 11090
2/22/2007 10950 10993 11090
2/23/2007 10930 10974 11061
2/26/2007 10889 10931 11035
2/27/2007 10545 10588 10655
2/28/2007 10604 10646 10710
3/1/2007 10563 10605 10672
3/2/2007 10434 10477 10561
3/5/2007 10335 10377 10485
3/6/2007 10496 10538 10637
3/7/2007 10481 10523 10621
3/8/2007 10557 10600 10684
3/9/2007 10563 10604 10680
3/12/2007 10566 10609 10700
3/13/2007 10353 10396 10503
3/14/2007 10437 10479 10583
3/15/2007 10481 10523 10606
3/16/2007 10442 10484 10568
3/19/2007 10547 10590 10680
3/20/2007 10614 10658 10742
3/21/2007 10777 10823 10914
3/22/2007 10774 10820 10924
3/23/2007 10780 10828 10927
3/26/2007 10786 10833 10944
3/27/2007 10725 10772 10874
3/28/2007 10640 10687 10796
3/29/2007 10658 10703 10825
3/30/2007 10652 10699 10810
4/2/2007 10707 10754 10848
4/3/2007 10815 10864 10955
4/4/2007 10833 10880 10986
4/5/2007 10882 10933 11021
4/6/2007 10882 10933 11021
4/9/2007 10877 10926 11021
4/10/2007 10903 10951 11049
4/11/2007 10836 10885 10978
4/12/2007 10935 10985 11064
4/13/2007 10964 11016 11099
4/16/2007 11101 11152 11212
4/17/2007 11122 11175 11256
4/18/2007 11087 11139 11233
4/19/2007 11052 11104 11213
4/20/2007 11148 11201 11324
4/23/2007 11133 11187 11296
4/24/2007 11124 11178 11295
4/25/2007 11250 11304 11406
4/26/2007 11270 11325 11408
4/27/2007 11244 11299 11411
4/30/2007 11124 11177 11315
5/1/2007 11148 11202 11347
5/2/2007 11212 11267 11419
5/3/2007 11247 11302 11465
5/4/2007 11259 11315 11481
5/7/2007 11264 11321 11501
5/8/2007 11264 11319 11497
5/9/2007 11314 11370 11520
5/10/2007 11145 11200 11357
5/11/2007 11229 11284 11466
5/14/2007 11192 11246 11441
5/15/2007 11139 11193 11408
5/16/2007 11232 11289 11510
5/17/2007 11221 11277 11500
5/18/2007 11329 11386 11592
5/21/2007 11358 11415 11607
5/22/2007 11361 11418 11595
5/23/2007 11343 11402 11579
5/24/2007 11235 11291 11474
5/25/2007 11282 11340 11539
5/28/2007 11282 11340 11539
5/29/2007 11302 11361 11558
5/30/2007 11396 11453 11656
5/31/2007 11422 11481 11670
6/1/2007 11448 11508 11719
6/4/2007 11512 11572 11759
6/5/2007 11463 11523 11712
6/6/2007 11358 11418 11609
6/7/2007 11174 11233 11411
6/8/2007 11294 11354 11530
6/11/2007 11297 11357 11532
6/12/2007 11197 11255 11423
6/13/2007 11346 11407 11579
6/14/2007 11396 11456 11644
6/15/2007 11458 11518 11725
6/18/2007 11446 11507 11719
6/19/2007 11438 11499 11721
6/20/2007 11303 11364 11575
6/21/2007 11365 11425 11652
6/22/2007 11248 11308 11506
6/25/2007 11181 11241 11473
6/26/2007 11149 11207 11445
6/27/2007 11266 11325 11545
6/28/2007 11257 11318 11542
6/29/2007 11260 11319 11526
7/2/2007 11342 11403 11627
7/3/2007 11362 11424 11668
7/4/2007 11362 11424 11668
7/5/2007 11400 11461 11695
7/6/2007 11476 11539 11753
7/9/2007 11473 11536 11770
7/10/2007 11333 11394 11628
7/11/2007 11388 11452 11689
7/12/2007 11555 11620 11899
7/13/2007 11561 11626 11929
7/16/2007 11511 11575 11910
7/17/2007 11514 11578 11906
7/18/2007 11523 11588 11911
7/19/2007 11567 11632 11981
7/20/2007 11441 11506 11855
7/23/2007 11450 11514 11913
7/24/2007 11263 11327 11703
7/25/2007 11327 11391 11769
7/26/2007 11061 11125 11510
7/27/2007 10891 10953 11327
7/30/2007 10973 11037 11426
7/31/2007 10804 10867 11270
8/1/2007 10868 10932 11358
8/2/2007 10941 11005 11407
8/3/2007 10684 10745 11137
8/6/2007 10906 10970 11380
8/7/2007 10970 11037 11448
8/8/2007 11090 11155 11630
8/9/2007 10807 10869 11322
8/10/2007 10827 10892 11326
8/13/2007 10795 10858 11296
8/14/2007 10608 10669 11112
8/15/2007 10444 10505 10965
8/16/2007 10397 10460 10936
8/17/2007 10631 10696 11186
8/20/2007 10620 10682 11176
8/21/2007 10658 10720 11177
8/22/2007 10763 10829 11296
8/23/2007 10734 10799 11291
8/24/2007 10853 10920 11433
8/27/2007 10754 10820 11357
8/28/2007 10526 10589 11127
8/29/2007 10739 10805 11360
8/30/2007 10731 10798 11342
8/31/2007 10845 10912 11456
9/3/2007 10845 10912 11456
9/4/2007 10953 11020 11572
9/5/2007 10877 10946 11483
9/6/2007 10944 11011 11531
9/7/2007 10751 10817 11339
9/10/2007 10713 10779 11329
9/11/2007 10883 10951 11493
9/12/2007 10894 10963 11507
9/13/2007 10950 11018 11583
9/14/2007 10988 11058 11592
9/17/2007 10897 10967 11533
9/18/2007 11204 11277 11832
9/19/2007 11295 11367 11906
9/20/2007 11210 11283 11855
9/21/2007 11238 11313 11906
9/24/2007 11183 11254 11861
9/25/2007 11197 11270 11867
9/26/2007 11270 11345 11934
9/27/2007 11323 11398 11980
9/28/2007 11306 11379 11960
10/1/2007 11440 11516 12103
10/2/2007 11437 11514 12075
10/3/2007 11423 11498 12017
10/4/2007 11429 11504 12030
10/5/2007 11566 11644 12145
10/8/2007 11537 11615 12121
10/9/2007 11625 11704 12232
10/10/2007 11636 11716 12238
10/11/2007 11534 11613 12163
10/12/2007 11634 11713 12239
10/15/2007 11516 11595 12147
10/16/2007 11455 11533 12095
10/17/2007 11484 11562 12113
10/18/2007 11505 11583 12128
10/19/2007 11218 11294 11823
10/22/2007 11288 11363 11861
10/23/2007 11396 11473 11974
10/24/2007 11332 11409 11962
10/25/2007 11329 11405 11939
10/26/2007 11429 11507 12078
10/29/2007 11478 11558 12143
10/30/2007 11431 11511 12066
10/31/2007 11593 11668 12215
11/1/2007 11332 11402 11925
11/2/2007 11399 11470 11973
11/5/2007 11320 11391 11942
11/6/2007 11426 11499 12093
11/7/2007 11127 11197 11779
11/8/2007 11104 11172 11723
11/9/2007 10928 10999 11520
11/12/2007 10790 10858 11398
11/13/2007 11071 11143 11716
11/14/2007 10981 11052 11643
11/15/2007 10872 10939 11517
11/16/2007 10942 11010 11608
11/19/2007 10773 10831 11445
11/20/2007 10822 10882 11529
11/21/2007 10664 10719 11351
11/22/2007 10664 10719 11351
11/23/2007 10822 10882 11527
11/26/2007 10623 10675 11291
11/27/2007 10799 10853 11452
11/28/2007 11089 11142 11745
11/29/2007 11074 11128 11758
11/30/2007 11101 11166 11787
12/3/2007 11048 11114 11715
12/4/2007 11048 11111 11655
12/5/2007 11200 11265 11840
12/6/2007 11364 11429 12010
12/7/2007 11349 11417 11981
12/10/2007 11420 11488 12056
12/11/2007 11130 11194 11792
12/12/2007 11226 11294 11890
12/13/2007 11226 11291 11901
12/14/2007 11080 11146 11748
12/17/2007 10934 10997 11573
12/18/2007 11010 11074 11658
12/19/2007 10986 11051 11646
12/20/2007 11083 11149 11732
12/21/2007 11232 11298 11917
12/24/2007 11314 11383 12001
12/25/2007 11314 11383 12001
12/26/2007 11326 11396 12034
12/27/2007 11159 11226 11877
12/28/2007 11179 11249 11911
12/31/2007 11115 11183 11807
1/1/2008 11115 11183 11807
1/2/2008 10959 11027 11669
1/3/2008 10927 10995 11687
1/4/2008 10596 10661 11369
1/7/2008 10599 10665 11372
1/8/2008 10420 10483 11197
1/9/2008 10552 10617 11368
1/10/2008 10637 10702 11418
1/11/2008 10452 10518 11234
1/14/2008 10549 10614 11373
1/15/2008 10255 10318 11090
1/16/2008 10214 10278 10952
1/17/2008 9936 9998 10670
1/18/2008 9936 9998 10654
1/21/2008 9936 9998 10654
1/22/2008 9819 9879 10458
1/23/2008 9980 10043 10557
1/24/2008 10118 10181 10718
1/25/2008 9977 10038 10552
1/28/2008 10129 10192 10685
1/29/2008 10206 10270 10711
1/30/2008 10138 10203 10659
1/31/2008 10320 10386 10818
2/1/2008 10519 10587 10914
2/4/2008 10411 10478 10822
2/5/2008 10106 10171 10507
2/6/2008 9997 10060 10403
2/7/2008 10162 10225 10492
2/8/2008 10176 10242 10513
2/11/2008 10305 10373 10623
2/12/2008 10341 10406 10669
2/13/2008 10502 10571 10833
2/14/2008 10349 10417 10703
2/15/2008 10338 10406 10688
2/18/2008 10338 10406 10688
2/19/2008 10346 10416 10720
2/20/2008 10475 10546 10829
2/21/2008 10311 10378 10688
2/22/2008 10390 10460 10753
2/25/2008 10558 10628 10906
2/26/2008 10657 10730 11000
2/27/2008 10622 10692 10991
2/28/2008 10558 10627 10954
2/29/2008 10229 10297 10678
3/3/2008 10264 10333 10698
3/4/2008 10223 10291 10658
3/5/2008 10299 10367 10745
3/6/2008 10050 10116 10531
3/7/2008 9948 10014 10420
3/10/2008 9742 9806 10273
3/11/2008 10091 10158 10612
3/12/2008 10003 10068 10539
3/13/2008 10103 10170 10618
3/14/2008 9912 9979 10429
3/17/2008 9713 9777 10309
3/18/2008 10118 10185 10699
3/19/2008 9839 9904 10397
3/20/2008 10036 10104 10567
3/21/2008 10036 10104 10567
3/24/2008 10285 10356 10761
3/25/2008 10344 10415 10798
3/26/2008 10303 10373 10776
3/27/2008 10165 10235 10646
3/28/2008 10054 10123 10578
3/31/2008 10127 10197 10636
4/1/2008 10497 10572 10962
4/2/2008 10520 10595 10957
4/3/2008 10520 10597 10957
4/4/2008 10579 10655 11016
4/7/2008 10544 10621 11017
4/8/2008 10523 10599 10999
4/9/2008 10418 10494 10939
4/10/2008 10494 10570 11017
4/11/2008 10300 10375 10818
4/14/2008 10306 10379 10831
4/15/2008 10335 10409 10876
4/16/2008 10573 10652 11116
4/17/2008 10564 10643 11106
4/18/2008 10779 10861 11342
4/21/2008 10788 10869 11376
4/22/2008 10650 10729 11276
4/23/2008 10738 10818 11326
4/24/2008 10729 10808 11311
4/25/2008 10840 10923 11354
4/28/2008 10846 10930 11346
4/29/2008 10790 10872 11299
4/30/2008 10741 10823 11268
5/1/2008 10899 10982 11393
5/2/2008 10926 11010 11426
5/5/2008 10896 10980 11406
5/6/2008 11014 11101 11514
5/7/2008 10840 10924 11333
5/8/2008 10884 10969 11406
5/9/2008 10826 10909 11335
5/12/2008 10940 11026 11438
5/13/2008 10978 11064 11471
5/14/2008 11014 11100 11480
5/15/2008 11152 11239 11618
5/16/2008 11184 11273 11675
5/19/2008 11155 11245 11683
5/20/2008 11090 11178 11620
5/21/2008 10873 10959 11438
5/22/2008 10881 10967 11453
5/23/2008 10755 10840 11329
5/26/2008 10755 10840 11329
5/27/2008 10835 10920 11403
5/28/2008 10940 11027 11466
5/29/2008 10984 11072 11493
5/30/2008 11025 11114 11537
6/2/2008 10926 11013 11433
6/3/2008 10896 10983 11367
6/4/2008 10914 11000 11382
6/5/2008 11131 11222 11636
6/6/2008 10811 10896 11316
6/9/2008 10814 10900 11379
6/10/2008 10755 10841 11329
6/11/2008 10582 10664 11187
6/12/2008 10620 10702 11204
6/13/2008 10826 10911 11378
6/16/2008 10837 10924 11380
6/17/2008 10782 10868 11354
6/18/2008 10688 10772 11262
6/19/2008 10749 10837 11290
6/20/2008 10537 10618 11094
6/23/2008 10566 10652 11159
6/24/2008 10469 10552 11078
6/25/2008 10540 10624 11135
6/26/2008 10261 10340 10852
6/27/2008 10261 10342 10838
6/30/2008 10243 10322 10854
7/1/2008 10264 10344 10905
7/2/2008 10046 10123 10692
7/3/2008 10026 10102 10707
7/4/2008 10026 10102 10707
7/7/2008 9976 10053 10643
7/8/2008 10111 10188 10743
7/9/2008 9870 9944 10520
7/10/2008 9917 9991 10621
7/11/2008 9835 9910 10524
7/14/2008 9788 9861 10496
7/15/2008 9729 9801 10393
7/16/2008 9935 10011 10523
7/17/2008 10014 10092 10571
7/18/2008 9993 10070 10542
7/21/2008 10002 10079 10572
7/22/2008 10076 10155 10616
7/23/2008 10084 10164 10603
7/24/2008 9882 9958 10434
7/25/2008 9932 10008 10525
7/28/2008 9805 9883 10374
7/29/2008 9999 10078 10535
7/30/2008 10126 10206 10716
7/31/2008 9990 10069 10560
8/1/2008 9890 9970 10484
8/4/2008 9773 9851 10359
8/5/2008 10058 10139 10626
8/6/2008 10134 10215 10725
8/7/2008 10002 10082 10582
8/8/2008 10196 10279 10784
8/11/2008 10287 10370 10827
8/12/2008 10217 10301 10774
8/13/2008 10220 10304 10811
8/14/2008 10290 10373 10838
8/15/2008 10314 10397 10846
8/18/2008 10146 10230 10709
8/19/2008 10079 10162 10674
8/20/2008 10140 10224 10745
8/21/2008 10158 10242 10793
8/22/2008 10229 10314 10873
8/25/2008 10029 10112 10677
8/26/2008 10073 10156 10718
8/27/2008 10164 10249 10801
8/28/2008 10276 10359 10895
8/29/2008 10140 10224 10723
9/1/2008 10140 10224 10723
9/2/2008 10055 10138 10605
9/3/2008 10023 10105 10566
9/4/2008 9729 9808 10274
9/5/2008 9773 9855 10276
9/8/2008 9873 9955 10393
9/9/2008 9520 9598 10060
9/10/2008 9617 9697 10174
9/11/2008 9758 9838 10322
9/12/2008 9808 9890 10376
9/15/2008 9408 9487 9959
9/16/2008 9526 9605 10093
9/17/2008 9147 9221 9692
9/18/2008 9441 9520 10004
9/19/2008 9740 9823 10294
9/22/2008 9411 9489 9993
9/23/2008 9296 9372 9851
9/24/2008 9275 9352 9861
9/25/2008 9375 9454 10028
9/26/2008 9328 9406 10020
9/29/2008 8561 8628 9195
9/30/2008 8970 9044 9634
10/1/2008 8805 8878 9524
10/2/2008 8383 8451 9142
10/3/2008 8242 8309 9052
10/6/2008 7883 7947 8709
10/7/2008 7476 7536 8288
10/8/2008 7453 7513 8250
10/9/2008 6925 6979 7662
10/10/2008 6828 6883 7450
10/13/2008 7626 7689 8406
10/14/2008 7485 7546 8242
10/15/2008 6737 6791 7456
10/16/2008 7058 7114 7832
10/17/2008 7049 7107 7801
10/20/2008 7358 7418 8203
10/21/2008 7108 7165 7913
10/22/2008 6654 6707 7427
10/23/2008 6610 6664 7541
10/24/2008 6377 6429 7298
10/27/2008 6165 6214 7039
10/28/2008 6790 6845 7776
10/29/2008 6831 6887 7758
10/30/2008 7058 7116 7963
10/31/2008 7188 7245 8043
</Table>
AVERAGE ANNUAL TOTAL RETURNS FOR THE PERIOD ENDED OCTOBER 31, 2008
- --------------------------------------------------------------------------------
<Table>
<Caption>
SINCE INCEPTION
ONE YEAR (03/01/06)
-------- ---------------
RYDEX S&P 500 PURE GROWTH ETF..................................... -38.00% -11.63%
S&P 500/CITIGROUP PURE GROWTH TOTAL RETURN INDEX.................. -37.89% -11.38%
S&P 500 GROWTH TOTAL RETURN INDEX................................. -34.15% -7.84%
</Table>
The returns presented above do not reflect the effect of taxes. Index returns
represent total returns. Past performance is no guarantee of future results.
7 ANNUAL REPORT
Rydex S&P 500 Pure Growth ETF
PORTFOLIO SUMMARY (Unaudited) As of October 31, 2008
- --------------------------------------------------------------------------------
TOP 10 HOLDINGS*
- --------------------------------------------------------------------------------
<Table>
<Caption>
DESCRIPTION % OF NET ASSETS
- ------------------------------------------------------------------------------------
APOLLO GROUP, INC. -- CLASS A 1.55%
AMGEN, INC. 1.30%
DAVITA, INC. 1.29%
EXPRESS SCRIPTS, INC. 1.25%
AUTOZONE, INC. 1.25%
COACH, INC. 1.17%
VARIAN MEDICAL SYSTEMS, INC. 1.16%
CLOROX CO. 1.14%
ANHEUSER-BUSCH COS., INC. 1.13%
TJX COS., INC. 1.12%
- ------------------------------------------------------------------------------------
</Table>
SECTOR ALLOCATIONS*
(PIE CHART)
<Table>
Health Care 21.09
Consumer Discretionary 19.11
Information Technology 18.00
Energy 12.00
Consumer Staples 9.03
Industrials 7.74
Financials 6.77
Materials 5.29
Utilities 0.97
</Table>
* The Fund's Top Ten Holdings are expressed as a percentage of net assets and
the Sector Allocations are expressed as a percentage of the Fund's investments
market value. These percentages may change over time.
8
RYDEX S&P MIDCAP 400 PURE VALUE ETF
MANAGER'S ANALYSIS (Unaudited)
- --------------------------------------------------------------------------------
For the year ended October 31, 2008, Rydex S&P MidCap 400 Pure Value ETF
returned -41.75%. Over the year, its benchmark, the S&P MidCap 400/CitiGroup
Pure Value Total Return Index, turned in a -42.05% return, while the S&P MidCap
400 Value Total Return Index, returned -36.19%. Though the S&P MidCap
400/CitiGroup Pure Value Total Return Index outperformed its cap-weighted
counterpart slightly in the first two quarters of the fiscal year, in the second
two quarters, it lagged substantially. The pure style's weighting to the
consumer discretionary sector was the biggest reason for its underperformance,
specifically the media industry. An overweighting to Lee Enterprises (LEE), a
publisher of local news in 49 mid-markets across the country and a firm that has
struggled mightily this year (down over 80%), was the main detractor to
performance in that industry. Pure weighting to the utilities sector, which
tended to suffer the least, helped stave the more negative effects of heavier
hit sectors. For the first six months of this fiscal year (11/1/2007 through
4/30/2008), mid-caps outperformed the other cap ranges, followed by large caps
with small caps bringing up the rear. However, in a role reversal, in the
following six months ended 10/31/2008, mid caps got hit the hardest, with large
caps in the middle and small caps holding up the best. Mid-cap growth tended to
weather the financial maelstrom better than mid-cap value during this period.
CUMULATIVE FUND PERFORMANCE: MARCH 1, 2006 - OCTOBER 31, 2008
(Performance Graph)
<Table>
<Caption>
RYDEX S&P S&P MIDCAP S&P MIDCAP
MIDCAP 400 400/CITIGROUP PURE 400 VALUE
PURE VALUE VALUE TOTAL TOTAL RETURN
ETF(A) RETURN INDEX(B) INDEX(C)
---------- ------------------ ------------
3/1/2006 10000 10000 10000
3/2/2006 9902 9903 9971
3/3/2006 9860 9864 9945
3/6/2006 9778 9781 9867
3/7/2006 9702 9703 9763
3/8/2006 9708 9710 9775
3/9/2006 9715 9716 9750
3/10/2006 9794 9797 9820
3/13/2006 9813 9815 9848
3/14/2006 9895 9899 9946
3/15/2006 9962 9966 10029
3/16/2006 9949 9954 10038
3/17/2006 9968 9973 10064
3/20/2006 9952 9956 10027
3/21/2006 9864 9867 9940
3/22/2006 9952 9955 10017
3/23/2006 9911 9914 10014
3/24/2006 9959 9962 10058
3/27/2006 9975 9980 10056
3/28/2006 9902 9907 10016
3/29/2006 10032 10037 10130
3/30/2006 10006 10010 10120
3/31/2006 9997 10003 10127
4/3/2006 10029 10034 10138
4/4/2006 10060 10065 10165
4/5/2006 10117 10124 10235
4/6/2006 10095 10101 10238
4/7/2006 9984 9990 10136
4/10/2006 9943 9947 10100
4/11/2006 9822 9829 9992
4/12/2006 9879 9884 10033
4/13/2006 9860 9867 10030
4/14/2006 9860 9867 10030
4/17/2006 9851 9856 10029
4/18/2006 10079 10085 10264
4/19/2006 10146 10152 10358
4/20/2006 10206 10214 10362
4/21/2006 10200 10207 10363
4/24/2006 10165 10171 10334
4/25/2006 10181 10189 10313
4/26/2006 10187 10194 10296
4/27/2006 10184 10191 10315
4/28/2006 10181 10188 10340
5/1/2006 10149 10157 10325
5/2/2006 10197 10206 10371
5/3/2006 10222 10231 10366
5/4/2006 10308 10319 10438
5/5/2006 10406 10415 10531
5/8/2006 10422 10432 10548
5/9/2006 10403 10412 10531
5/10/2006 10365 10374 10508
5/11/2006 10203 10213 10361
5/12/2006 10003 10011 10186
5/15/2006 10013 10020 10138
5/16/2006 9978 9985 10104
5/17/2006 9797 9804 9928
5/18/2006 9740 9748 9834
5/19/2006 9791 9798 9861
5/22/2006 9778 9786 9790
5/23/2006 9683 9691 9739
5/24/2006 9746 9755 9745
5/25/2006 9883 9890 9879
5/26/2006 9940 9950 9944
5/29/2006 9940 9950 9944
5/30/2006 9749 9758 9785
5/31/2006 9886 9894 9926
6/1/2006 10051 10062 10077
6/2/2006 10070 10081 10114
6/5/2006 9854 9864 9880
6/6/2006 9860 9869 9828
6/7/2006 9791 9801 9744
6/8/2006 9759 9768 9700
6/9/2006 9772 9783 9687
6/12/2006 9610 9619 9491
6/13/2006 9474 9483 9343
6/14/2006 9502 9510 9368
6/15/2006 9768 9778 9660
6/16/2006 9715 9724 9609
6/19/2006 9591 9600 9466
6/20/2006 9591 9602 9440
6/21/2006 9737 9749 9600
6/22/2006 9664 9674 9539
6/23/2006 9718 9730 9586
6/26/2006 9800 9812 9654
6/27/2006 9692 9704 9561
6/28/2006 9730 9742 9587
6/29/2006 10006 10020 9863
6/30/2006 10067 10080 9923
7/3/2006 10121 10134 9991
7/4/2006 10121 10134 9991
7/5/2006 10022 10035 9853
7/6/2006 10025 10037 9876
7/7/2006 9981 9994 9800
7/10/2006 10016 10029 9809
7/11/2006 10089 10102 9852
7/12/2006 9965 9979 9737
7/13/2006 9787 9799 9566
7/14/2006 9724 9737 9501
7/17/2006 9696 9707 9439
7/18/2006 9724 9736 9450
7/19/2006 9902 9916 9667
7/20/2006 9749 9761 9465
7/21/2006 9664 9677 9335
7/24/2006 9851 9865 9517
7/25/2006 9914 9928 9619
7/26/2006 9895 9909 9620
7/27/2006 9800 9816 9539
7/28/2006 9933 9950 9693
7/31/2006 9911 9926 9701
8/1/2006 9860 9874 9643
8/2/2006 9905 9919 9691
8/3/2006 9968 9984 9749
8/4/2006 9946 9963 9732
8/7/2006 9902 9916 9664
8/8/2006 9854 9870 9594
8/9/2006 9746 9761 9529
8/10/2006 9784 9798 9572
8/11/2006 9692 9709 9498
8/14/2006 9749 9763 9512
8/15/2006 9895 9913 9679
8/16/2006 10010 10026 9802
8/17/2006 10006 10025 9797
8/18/2006 10016 10034 9814
8/21/2006 9924 9941 9735
8/22/2006 9946 9964 9753
8/23/2006 9848 9865 9658
8/24/2006 9835 9852 9646
8/25/2006 9813 9831 9637
8/28/2006 9914 9931 9710
8/29/2006 10000 10017 9767
8/30/2006 10025 10043 9796
8/31/2006 10089 10107 9845
9/1/2006 10111 10129 9877
9/4/2006 10111 10129 9877
9/5/2006 10152 10172 9924
9/6/2006 10016 10033 9760
9/7/2006 9965 9985 9697
9/8/2006 9997 10015 9710
9/11/2006 10013 10032 9688
9/12/2006 10171 10191 9833
9/13/2006 10225 10245 9916
9/14/2006 10178 10199 9862
9/15/2006 10164 10186 9856
9/18/2006 10119 10140 9839
9/19/2006 10094 10114 9806
9/20/2006 10192 10214 9875
9/21/2006 10081 10102 9793
9/22/2006 10021 10043 9728
9/25/2006 10116 10138 9815
9/26/2006 10186 10207 9881
9/27/2006 10205 10227 9911
9/28/2006 10192 10214 9918
9/29/2006 10123 10146 9866
10/2/2006 10126 10148 9834
10/3/2006 10135 10158 9816
10/4/2006 10288 10311 9952
10/5/2006 10367 10389 10061
10/6/2006 10303 10326 10005
10/9/2006 10348 10372 10071
10/10/2006 10380 10403 10100
10/11/2006 10380 10405 10091
10/12/2006 10519 10544 10228
10/13/2006 10560 10586 10275
10/16/2006 10627 10654 10344
10/17/2006 10579 10606 10276
10/18/2006 10576 10603 10264
10/19/2006 10633 10659 10308
10/20/2006 10592 10620 10237
10/23/2006 10636 10663 10283
10/24/2006 10633 10659 10313
10/25/2006 10684 10712 10371
10/26/2006 10773 10800 10440
10/27/2006 10643 10669 10323
10/30/2006 10674 10702 10351
10/31/2006 10646 10674 10312
11/1/2006 10550 10578 10204
11/2/2006 10528 10555 10191
11/3/2006 10531 10558 10199
11/6/2006 10703 10731 10313
11/7/2006 10703 10733 10334
11/8/2006 10793 10822 10396
11/9/2006 10748 10777 10344
11/10/2006 10835 10866 10409
11/13/2006 10876 10908 10434
11/14/2006 11004 11034 10539
11/15/2006 11046 11079 10582
11/16/2006 11062 11094 10597
11/17/2006 11049 11082 10582
11/20/2006 11068 11101 10612
11/21/2006 11078 11111 10629
11/22/2006 11129 11161 10682
11/23/2006 11129 11161 10682
11/24/2006 11132 11165 10678
11/27/2006 10895 10928 10450
11/28/2006 10931 10962 10484
11/29/2006 11036 11069 10597
11/30/2006 11052 11085 10627
12/1/2006 11046 11080 10627
12/4/2006 11212 11248 10763
12/5/2006 11235 11270 10781
12/6/2006 11203 11237 10768
12/7/2006 11164 11201 10729
12/8/2006 11145 11180 10733
12/11/2006 11155 11188 10726
12/12/2006 11094 11128 10680
12/13/2006 11167 11204 10699
12/14/2006 11267 11303 10776
12/15/2006 11251 11288 10764
12/18/2006 11129 11170 10656
12/19/2006 11129 11169 10654
12/20/2006 11164 11204 10677
12/21/2006 11107 11148 10624
12/22/2006 11094 11133 10590
12/25/2006 11094 11133 10590
12/26/2006 11212 11253 10671
12/27/2006 11319 11362 10764
12/28/2006 11255 11298 10721
12/29/2006 11156 11199 10642
1/1/2007 11156 11199 10642
1/2/2007 11156 11199 10642
1/3/2007 11252 11297 10696
1/4/2007 11265 11307 10712
1/5/2007 11098 11142 10573
1/8/2007 11076 11119 10563
1/9/2007 11114 11157 10593
1/10/2007 11108 11152 10625
1/11/2007 11263 11307 10731
1/12/2007 11308 11352 10796
1/15/2007 11308 11352 10796
1/16/2007 11305 11348 10781
1/17/2007 11292 11335 10768
1/18/2007 11224 11267 10671
1/19/2007 11301 11345 10748
1/22/2007 11253 11298 10703
1/23/2007 11311 11355 10768
1/24/2007 11411 11457 10878
1/25/2007 11330 11375 10782
1/26/2007 11369 11415 10823
1/29/2007 11488 11534 10881
1/30/2007 11534 11581 10952
1/31/2007 11572 11618 10997
2/1/2007 11685 11733 11113
2/2/2007 11701 11748 11135
2/5/2007 11701 11751 11143
2/6/2007 11795 11843 11224
2/7/2007 11846 11897 11293
2/8/2007 11846 11895 11291
2/9/2007 11785 11834 11212
2/12/2007 11788 11837 11180
2/13/2007 11917 11967 11296
2/14/2007 11959 12011 11351
2/15/2007 11972 12024 11371
2/16/2007 11988 12038 11385
2/19/2007 11988 12038 11385
2/20/2007 12072 12123 11470
2/21/2007 12056 12108 11487
2/22/2007 12065 12117 11504
2/23/2007 12078 12132 11493
2/26/2007 12062 12114 11461
2/27/2007 11672 11722 11110
2/28/2007 11704 11755 11129
3/1/2007 11695 11746 11114
3/2/2007 11537 11587 10950
3/5/2007 11340 11388 10742
3/6/2007 11504 11554 10922
3/7/2007 11514 11564 10938
3/8/2007 11582 11631 11019
3/9/2007 11624 11674 11063
3/12/2007 11675 11727 11112
3/13/2007 11434 11482 10888
3/14/2007 11495 11544 10933
3/15/2007 11582 11634 11017
3/16/2007 11496 11547 10949
3/19/2007 11621 11675 11064
3/20/2007 11738 11792 11160
3/21/2007 11889 11942 11325
3/22/2007 11870 11922 11335
3/23/2007 11895 11950 11358
3/26/2007 11892 11946 11354
3/27/2007 11815 11868 11286
3/28/2007 11744 11798 11235
3/29/2007 11770 11825 11236
3/30/2007 11773 11828 11246
4/2/2007 11873 11929 11310
4/3/2007 11964 12020 11393
4/4/2007 11938 11994 11388
4/5/2007 11954 12009 11408
4/6/2007 11954 12009 11408
4/9/2007 11974 12031 11428
4/10/2007 12022 12079 11467
4/11/2007 11945 12001 11397
4/12/2007 12006 12063 11454
4/13/2007 12013 12069 11476
4/16/2007 12132 12191 11597
4/17/2007 12142 12199 11603
4/18/2007 12149 12206 11601
4/19/2007 12090 12149 11562
4/20/2007 12200 12261 11675
4/23/2007 12162 12221 11691
4/24/2007 12171 12230 11687
4/25/2007 12288 12348 11787
4/26/2007 12307 12368 11793
4/27/2007 12239 12298 11740
4/30/2007 12055 12114 11563
5/1/2007 12097 12157 11595
5/2/2007 12223 12282 11720
5/3/2007 12252 12313 11763
5/4/2007 12307 12370 11796
5/7/2007 12323 12384 11812
5/8/2007 12310 12373 11816
5/9/2007 12366 12428 11900
5/10/2007 12194 12254 11744
5/11/2007 12304 12367 11854
5/14/2007 12262 12323 11809
5/15/2007 12226 12289 11760
5/16/2007 12310 12372 11828
5/17/2007 12278 12340 11806
5/18/2007 12336 12401 11862
5/21/2007 12411 12476 11940
5/22/2007 12427 12492 11967
5/23/2007 12366 12429 11910
5/24/2007 12165 12229 11710
5/25/2007 12252 12315 11789
5/28/2007 12252 12315 11789
5/29/2007 12323 12389 11858
5/30/2007 12440 12508 11996
5/31/2007 12472 12540 12068
6/1/2007 12560 12627 12148
6/4/2007 12608 12678 12200
6/5/2007 12511 12578 12112
6/6/2007 12356 12420 11955
6/7/2007 12087 12149 11703
6/8/2007 12223 12288 11830
6/11/2007 12210 12274 11830
6/12/2007 12051 12115 11688
6/13/2007 12184 12249 11821
6/14/2007 12246 12312 11908
6/15/2007 12338 12404 11992
6/18/2007 12290 12357 11948
6/19/2007 12267 12335 11934
6/20/2007 12112 12175 11788
6/21/2007 12183 12250 11872
6/22/2007 12063 12128 11762
6/25/2007 11966 12031 11673
6/26/2007 11969 12035 11629
6/27/2007 12115 12181 11766
6/28/2007 12134 12200 11780
6/29/2007 12102 12168 11747
7/2/2007 12301 12369 11925
7/3/2007 12330 12399 11957
7/4/2007 12330 12399 11957
7/5/2007 12340 12407 11969
7/6/2007 12369 12437 12024
7/9/2007 12388 12457 12041
7/10/2007 12148 12214 11837
7/11/2007 12203 12269 11894
7/12/2007 12392 12460 12103
7/13/2007 12441 12511 12150
7/16/2007 12336 12406 12071
7/17/2007 12418 12487 12109
7/18/2007 12385 12456 12078
7/19/2007 12460 12533 12149
7/20/2007 12242 12315 11993
7/23/2007 12219 12291 11969
7/24/2007 11897 11967 11672
7/25/2007 11868 11937 11656
7/26/2007 11572 11637 11380
7/27/2007 11363 11429 11204
7/30/2007 11445 11509 11295
7/31/2007 11337 11403 11174
8/1/2007 11442 11508 11221
8/2/2007 11487 11555 11279
8/3/2007 11084 11147 10920
8/6/2007 11230 11296 11064
8/7/2007 11256 11323 11121
8/8/2007 11354 11420 11251
8/9/2007 11032 11093 10959
8/10/2007 11246 11310 11058
8/13/2007 11243 11309 11095
8/14/2007 11022 11085 10873
8/15/2007 10800 10862 10653
8/16/2007 10931 10995 10707
8/17/2007 11168 11232 10950
8/20/2007 11233 11299 11014
8/21/2007 11253 11319 11053
8/22/2007 11380 11449 11190
8/23/2007 11350 11419 11153
8/24/2007 11458 11527 11274
8/27/2007 11324 11392 11162
8/28/2007 11038 11102 10892
8/29/2007 11311 11381 11154
8/30/2007 11240 11309 11096
8/31/2007 11373 11441 11255
9/3/2007 11373 11441 11255
9/4/2007 11455 11525 11370
9/5/2007 11302 11369 11242
9/6/2007 11337 11405 11301
9/7/2007 11126 11194 11095
9/10/2007 11038 11104 11008
9/11/2007 11136 11203 11122
9/12/2007 11077 11145 11093
9/13/2007 11080 11146 11118
9/14/2007 11119 11186 11151
9/17/2007 11041 11108 11067
9/18/2007 11380 11450 11404
9/19/2007 11497 11571 11486
9/20/2007 11402 11474 11399
9/21/2007 11408 11480 11417
9/24/2007 11304 11376 11329
9/25/2007 11301 11372 11310
9/26/2007 11405 11476 11397
9/27/2007 11499 11572 11503
9/28/2007 11408 11481 11451
10/1/2007 11686 11762 11620
10/2/2007 11771 11849 11676
10/3/2007 11716 11792 11645
10/4/2007 11722 11797 11652
10/5/2007 11916 11994 11830
10/8/2007 11866 11946 11776
10/9/2007 11919 11998 11844
10/10/2007 11853 11930 11825
10/11/2007 11814 11890 11768
10/12/2007 11840 11919 11787
10/15/2007 11690 11765 11690
10/16/2007 11601 11678 11576
10/17/2007 11608 11686 11577
10/18/2007 11618 11695 11590
10/19/2007 11346 11420 11324
10/22/2007 11431 11507 11398
10/23/2007 11483 11560 11464
10/24/2007 11431 11508 11411
10/25/2007 11398 11474 11346
10/26/2007 11546 11622 11470
10/29/2007 11542 11619 11502
10/30/2007 11542 11618 11472
10/31/2007 11706 11778 11649
11/1/2007 11392 11443 11364
11/2/2007 11352 11398 11319
11/5/2007 11271 11314 11227
11/6/2007 11349 11388 11363
11/7/2007 11015 11057 11083
11/8/2007 11195 11236 11161
11/9/2007 11117 11167 11053
11/12/2007 11051 11114 10882
11/13/2007 11277 11353 11127
11/14/2007 11159 11231 11063
11/15/2007 11058 11125 10944
11/16/2007 11009 11062 10911
11/19/2007 10786 10834 10691
11/20/2007 10783 10818 10674
11/21/2007 10652 10684 10540
11/22/2007 10652 10684 10540
11/23/2007 10783 10819 10678
11/26/2007 10560 10586 10476
11/27/2007 10665 10691 10583
11/28/2007 10979 11009 10920
11/29/2007 10963 10988 10910
11/30/2007 11025 11050 10980
12/3/2007 10930 10959 10924
12/4/2007 10884 10912 10871
12/5/2007 11032 11060 11040
12/6/2007 11258 11286 11277
12/7/2007 11280 11310 11283
12/10/2007 11375 11408 11392
12/11/2007 11019 11048 11027
12/12/2007 11019 11047 11048
12/13/2007 11005 11034 11052
12/14/2007 10796 10825 10851
12/17/2007 10655 10682 10679
12/18/2007 10753 10781 10760
12/19/2007 10773 10803 10770
12/20/2007 10888 10916 10899
12/21/2007 11072 11111 11092
12/24/2007 11190 11243 11221
12/25/2007 11190 11243 11221
12/26/2007 11147 11198 11169
12/27/2007 10918 10960 10996
12/28/2007 10849 10891 10972
12/31/2007 10803 10841 10924
1/1/2008 10803 10841 10924
1/2/2008 10632 10665 10790
1/3/2008 10349 10368 10645
1/4/2008 9970 9978 10346
1/7/2008 10016 10024 10347
1/8/2008 9680 9681 10098
1/9/2008 9684 9687 10139
1/10/2008 9865 9872 10233
1/11/2008 9736 9739 10106
1/14/2008 9806 9813 10162
1/15/2008 9638 9639 9942
1/16/2008 9802 9808 9959
1/17/2008 9598 9599 9688
1/18/2008 9480 9475 9604
1/21/2008 9480 9475 9604
1/22/2008 9611 9611 9609
1/23/2008 10158 10177 9918
1/24/2008 10220 10237 9956
1/25/2008 10138 10152 9865
1/28/2008 10514 10538 10137
1/29/2008 10728 10757 10232
1/30/2008 10596 10623 10134
1/31/2008 10975 11014 10366
2/1/2008 11281 11330 10610
2/4/2008 11146 11185 10526
2/5/2008 10820 10854 10240
2/6/2008 10681 10712 10130
2/7/2008 10836 10870 10243
2/8/2008 10678 10709 10209
2/11/2008 10622 10650 10217
2/12/2008 10708 10739 10270
2/13/2008 10813 10851 10389
2/14/2008 10616 10643 10217
2/15/2008 10589 10620 10212
2/18/2008 10589 10620 10212
2/19/2008 10523 10553 10183
2/20/2008 10688 10723 10315
2/21/2008 10546 10574 10179
2/22/2008 10593 10621 10249
2/25/2008 10790 10828 10440
2/26/2008 10876 10917 10519
2/27/2008 10826 10864 10453
2/28/2008 10550 10578 10315
2/29/2008 10220 10238 10033
3/3/2008 10158 10175 10062
3/4/2008 10145 10162 9997
3/5/2008 10145 10160 10028
3/6/2008 9789 9792 9759
3/7/2008 9743 9743 9710
3/10/2008 9582 9578 9545
3/11/2008 9997 10004 9857
3/12/2008 9792 9796 9770
3/13/2008 9980 9989 9885
3/14/2008 9750 9749 9701
3/17/2008 9555 9555 9548
3/18/2008 9964 9965 9913
3/19/2008 9819 9821 9720
3/20/2008 10140 10142 9907
3/21/2008 10140 10142 9907
3/24/2008 10400 10402 10104
3/25/2008 10472 10477 10204
3/26/2008 10288 10291 10081
3/27/2008 10103 10106 9972
3/28/2008 9952 9951 9879
3/31/2008 10067 10068 9980
4/1/2008 10478 10482 10317
4/2/2008 10535 10539 10358
4/3/2008 10571 10574 10405
4/4/2008 10492 10496 10398
4/7/2008 10518 10521 10434
4/8/2008 10435 10437 10401
4/9/2008 10206 10210 10239
4/10/2008 10303 10304 10338
4/11/2008 10080 10082 10167
4/14/2008 10011 10013 10121
4/15/2008 10094 10095 10198
4/16/2008 10379 10383 10502
4/17/2008 10382 10388 10487
4/18/2008 10538 10545 10645
4/21/2008 10412 10418 10611
4/22/2008 10243 10248 10484
4/23/2008 10213 10218 10518
4/24/2008 10442 10448 10643
4/25/2008 10591 10596 10756
4/28/2008 10664 10671 10786
4/29/2008 10714 10721 10744
4/30/2008 10608 10614 10710
5/1/2008 10972 10980 10911
5/2/2008 10889 10899 10919
5/5/2008 10800 10808 10885
5/6/2008 10896 10905 10958
5/7/2008 10700 10707 10817
5/8/2008 10707 10715 10872
5/9/2008 10720 10727 10868
5/12/2008 10942 10951 11029
5/13/2008 10916 10925 11082
5/14/2008 10959 10968 11130
5/15/2008 11092 11103 11249
5/16/2008 10999 11011 11254
5/19/2008 10986 10997 11241
5/20/2008 10883 10895 11200
5/21/2008 10677 10685 11048
5/22/2008 10710 10720 11083
5/23/2008 10531 10539 10934
5/26/2008 10531 10539 10934
5/27/2008 10697 10707 11044
5/28/2008 10684 10693 11085
5/29/2008 10813 10824 11156
5/30/2008 10777 10789 11206
6/2/2008 10681 10691 11110
6/3/2008 10707 10718 11116
6/4/2008 10820 10830 11164
6/5/2008 10979 10990 11381
6/6/2008 10555 10567 11061
6/9/2008 10419 10429 11004
6/10/2008 10472 10482 10957
6/11/2008 10157 10165 10754
6/12/2008 10239 10250 10767
6/13/2008 10395 10407 10919
6/16/2008 10455 10465 10986
6/17/2008 10349 10359 10933
6/18/2008 10249 10260 10842
6/19/2008 10332 10343 10885
6/20/2008 10102 10113 10700
6/23/2008 9913 9927 10650
6/24/2008 9827 9845 10545
6/25/2008 9943 9960 10623
6/26/2008 9559 9571 10329
6/27/2008 9459 9470 10266
6/30/2008 9280 9288 10210
7/1/2008 9307 9315 10212
7/2/2008 9046 9055 9939
7/3/2008 8912 8922 9821
7/4/2008 8912 8922 9821
7/7/2008 8805 8812 9726
7/8/2008 9217 9227 10002
7/9/2008 8969 8978 9812
7/10/2008 8909 8918 9858
7/11/2008 8849 8858 9822
7/14/2008 8625 8633 9669
7/15/2008 8578 8587 9595
7/16/2008 8999 9010 9894
7/17/2008 9337 9348 10079
7/18/2008 9337 9347 10059
7/21/2008 9370 9381 10114
7/22/2008 9698 9712 10302
7/23/2008 9829 9843 10328
7/24/2008 9384 9395 9960
7/25/2008 9360 9374 10009
7/28/2008 9166 9178 9885
7/29/2008 9551 9564 10145
7/30/2008 9571 9585 10264
7/31/2008 9574 9589 10176
8/1/2008 9601 9616 10155
8/4/2008 9541 9556 10012
8/5/2008 9885 9900 10275
8/6/2008 9875 9892 10330
8/7/2008 9611 9625 10144
8/8/2008 9966 9982 10396
8/11/2008 10163 10181 10535
8/12/2008 10002 10022 10405
8/13/2008 9919 9934 10384
8/14/2008 10079 10098 10479
8/15/2008 10120 10139 10486
8/18/2008 9939 9957 10347
8/19/2008 9745 9759 10215
8/20/2008 9712 9727 10239
8/21/2008 9661 9676 10231
8/22/2008 9875 9894 10358
8/25/2008 9641 9657 10148
8/26/2008 9665 9680 10189
8/27/2008 9802 9819 10315
8/28/2008 10043 10061 10507
8/29/2008 9949 9966 10389
9/1/2008 9949 9966 10389
9/2/2008 10039 10057 10327
9/3/2008 10156 10175 10313
9/4/2008 9882 9901 10051
9/5/2008 9912 9931 10085
9/8/2008 10263 10282 10284
9/9/2008 9922 9940 9900
9/10/2008 10019 10037 10015
9/11/2008 10076 10095 10060
9/12/2008 10116 10138 10181
9/15/2008 9668 9686 9722
9/16/2008 9912 9932 9951
9/17/2008 9404 9420 9510
9/18/2008 10206 10228 10066
9/19/2008 10576 10600 10519
9/22/2008 9877 9897 9925
9/23/2008 9760 9777 9818
9/24/2008 9622 9640 9714
9/25/2008 9800 9817 9837
9/26/2008 9783 9802 9814
9/29/2008 9074 9087 9096
9/30/2008 9425 9441 9502
10/1/2008 9428 9446 9436
10/2/2008 8927 8941 8922
10/3/2008 8654 8667 8695
10/6/2008 8330 8342 8313
10/7/2008 7828 7839 7859
10/8/2008 7727 7738 7746
10/9/2008 6959 6964 7142
10/10/2008 7188 7197 7239
10/13/2008 7758 7769 7972
10/14/2008 7576 7585 7804
10/15/2008 6811 6819 7036
10/16/2008 7071 7078 7309
10/17/2008 6929 6937 7263
10/20/2008 7185 7193 7552
10/21/2008 6973 6981 7347
10/22/2008 6525 6530 6915
10/23/2008 6346 6351 6771
10/24/2008 6141 6148 6567
10/27/2008 5817 5819 6284
10/28/2008 6279 6284 6850
10/29/2008 6346 6351 6918
10/30/2008 6612 6618 7226
10/31/2008 6818 6827 7433
</Table>
AVERAGE ANNUAL TOTAL RETURNS FOR THE PERIOD ENDED OCTOBER 31, 2008
- --------------------------------------------------------------------------------
<Table>
<Caption>
SINCE INCEPTION
ONE YEAR (03/01/06)
-------- ---------------
RYDEX S&P MIDCAP 400 PURE VALUE ETF............................... -41.75% -13.35%
S&P MIDCAP 400/CITIGROUP PURE VALUE TOTAL RETURN INDEX............ -42.05% -13.33%
S&P MIDCAP 400 VALUE TOTAL RETURN INDEX........................... -36.19% -10.52%
</Table>
The returns presented above do not reflect the effect of taxes. Index returns
represent total returns. Past performance is no guarantee of future results.
9 ANNUAL REPORT
Rydex S&P MidCap 400 Pure Value ETF
PORTFOLIO SUMMARY (Unaudited) As of October 31, 2008
- --------------------------------------------------------------------------------
TOP 10 HOLDINGS*
- --------------------------------------------------------------------------------
<Table>
<Caption>
DESCRIPTION % OF NET ASSETS
- ------------------------------------------------------------------------------------
FOOT LOCKER, INC. 2.98%
KELLY SERVICES, INC. -- CLASS A 2.35%
ARVINMERITOR, INC. 2.12%
FURNITURE BRANDS INTERNATIONAL, INC. 2.09%
RYLAND GROUP, INC. 2.02%
FIDELITY NATIONAL FINANCIAL, INC. -- CLASS A 2.00%
FIRST NIAGARA FINANCIAL GROUP, INC. 1.96%
HAWAIIAN ELECTRIC INDUSTRIES, INC. 1.81%
ALASKA AIR GROUP, INC. 1.70%
RENT-A-CENTER, INC. 1.56%
- ------------------------------------------------------------------------------------
</Table>
SECTOR ALLOCATIONS*
(PIE CHART)
<Table>
Financials 32.28
Consumer Discretionary 17.69
Utilities 16.54
Industrials 11.36
Information Technology 8.03
Materials 7.57
Health Care 3.86
Consumer Staples 2.67
</Table>
* The Fund's Top Ten Holdings are expressed as a percentage of net assets and
the Sector Allocations are expressed as a percentage of the Fund's investments
market value. These percentages may change over time.
10
RYDEX S&P MIDCAP 400 PURE GROWTH ETF
MANAGER'S ANALYSIS (Unaudited)
- --------------------------------------------------------------------------------
For the year ended October 31, 2008, Rydex S&P MidCap 400 Pure Growth ETF
returned -34.52%. Over the year, its benchmark, the S&P MidCap 400/CitiGroup
Pure Growth Total Return Index, turned in a -34.33% total return, which
outperformed the counterpart S&P MidCap 400 Growth Total Return Index (whose
return was -36.74%) by more than 2%. The pure style's weighting to the consumer
discretionary sector was the biggest reason for the outperformance. Despite
falling more than 27% in the last quarter, mid-cap pure growth managed to
outperform its cap-weight counterpart three out of four quarters this year.
While the health care sector hurt both strategies, an overweight position to
pharmaceuticals and biotech hurt the pure style approach a little more. Any out
performance by pure style was mostly attributable to the pure style's selection
of and allocation to stocks in the health care providers & services and media
industries. For the first six months of this fiscal year (11/1/2007 through
4/30/2008), mid-caps outperformed the other cap ranges, followed by large caps
with small caps bringing up the rear. However, in a role reversal, in the
following six months ended October 31, 2008, mid caps got hit the hardest, with
large caps in the middle and small caps holding up the best. Mid-cap growth
tended to weather the financial maelstrom better than mid-cap value during this
period.
CUMULATIVE FUND PERFORMANCE: MARCH 1, 2006 - OCTOBER 31, 2008
(Performance Graph)
<Table>
<Caption>
S&P MIDCAP
RYDEX S&P 400/CITIGROUP PURE S&P MIDCAP
MIDCAP 400 GROWTH TOTAL 400 GROWTH
PURE GROWTH RETURN INDEX TOTAL RETURN
ETF(A) (B) INDEX(C)
----------- ------------------ ------------
3/1/2006 10000 10002 10000
3/2/2006 9918 9921 9957
3/3/2006 9884 9886 9921
3/6/2006 9802 9804 9808
3/7/2006 9679 9681 9683
3/8/2006 9685 9687 9688
3/9/2006 9618 9621 9621
3/10/2006 9690 9694 9677
3/13/2006 9736 9739 9739
3/14/2006 9835 9838 9848
3/15/2006 9871 9874 9904
3/16/2006 9850 9853 9905
3/17/2006 9884 9887 9932
3/20/2006 9875 9878 9903
3/21/2006 9804 9808 9820
3/22/2006 9886 9891 9898
3/23/2006 9905 9909 9926
3/24/2006 9933 9938 9985
3/27/2006 9907 9912 9978
3/28/2006 9899 9903 9957
3/29/2006 10023 10027 10052
3/30/2006 10030 10034 10070
3/31/2006 10046 10050 10069
4/3/2006 9983 9988 10033
4/4/2006 10036 10042 10071
4/5/2006 10124 10128 10152
4/6/2006 10135 10140 10160
4/7/2006 10044 10048 10062
4/10/2006 9991 9996 10027
4/11/2006 9892 9897 9937
4/12/2006 9895 9901 9956
4/13/2006 9905 9911 9976
4/14/2006 9905 9911 9976
4/17/2006 9888 9895 9970
4/18/2006 10099 10105 10181
4/19/2006 10181 10188 10286
4/20/2006 10179 10185 10291
4/21/2006 10087 10094 10255
4/24/2006 10021 10028 10203
4/25/2006 9991 9998 10148
4/26/2006 9962 9969 10089
4/27/2006 9918 9926 10077
4/28/2006 9962 9970 10135
5/1/2006 9899 9906 10110
5/2/2006 9930 9938 10163
5/3/2006 9924 9933 10143
5/4/2006 9914 9922 10188
5/5/2006 10011 10019 10304
5/8/2006 10008 10017 10321
5/9/2006 9975 9983 10293
5/10/2006 9943 9952 10276
5/11/2006 9812 9820 10155
5/12/2006 9648 9656 9969
5/15/2006 9595 9604 9887
5/16/2006 9584 9593 9874
5/17/2006 9430 9439 9696
5/18/2006 9380 9390 9609
5/19/2006 9430 9440 9623
5/22/2006 9337 9346 9541
5/23/2006 9272 9281 9498
5/24/2006 9244 9254 9460
5/25/2006 9335 9345 9558
5/26/2006 9399 9410 9621
5/29/2006 9399 9410 9621
5/30/2006 9228 9238 9469
5/31/2006 9363 9373 9620
6/1/2006 9508 9518 9765
6/2/2006 9521 9531 9803
6/5/2006 9272 9282 9549
6/6/2006 9251 9261 9493
6/7/2006 9204 9212 9419
6/8/2006 9177 9185 9373
6/9/2006 9145 9152 9349
6/12/2006 8913 8917 9115
6/13/2006 8765 8769 8960
6/14/2006 8833 8837 9032
6/15/2006 9126 9134 9331
6/16/2006 9078 9085 9305
6/19/2006 8943 8950 9143
6/20/2006 8907 8912 9097
6/21/2006 9073 9081 9276
6/22/2006 9016 9023 9228
6/23/2006 9170 9179 9359
6/26/2006 9194 9205 9392
6/27/2006 9092 9100 9309
6/28/2006 9069 9077 9306
6/29/2006 9337 9349 9588
6/30/2006 9380 9393 9629
7/3/2006 9428 9442 9705
7/4/2006 9428 9442 9705
7/5/2006 9278 9290 9536
7/6/2006 9301 9313 9566
7/7/2006 9209 9220 9458
7/10/2006 9152 9163 9413
7/11/2006 9187 9198 9443
7/12/2006 9061 9071 9329
7/13/2006 8892 8899 9170
7/14/2006 8818 8825 9100
7/17/2006 8782 8789 9030
7/18/2006 8782 8791 9023
7/19/2006 9023 9033 9255
7/20/2006 8812 8820 9028
7/21/2006 8694 8703 8885
7/24/2006 8928 8937 9104
7/25/2006 9021 9031 9230
7/26/2006 8964 8973 9218
7/27/2006 8852 8860 9105
7/28/2006 8997 9005 9252
7/31/2006 8995 9005 9285
8/1/2006 8873 8882 9186
8/2/2006 8936 8945 9263
8/3/2006 9004 9014 9337
8/4/2006 8919 8928 9270
8/7/2006 8871 8880 9224
8/8/2006 8759 8769 9131
8/9/2006 8664 8674 9059
8/10/2006 8732 8743 9136
8/11/2006 8643 8652 9053
8/14/2006 8634 8643 9045
8/15/2006 8812 8823 9223
8/16/2006 8968 8979 9372
8/17/2006 8978 8989 9376
8/18/2006 9016 9026 9398
8/21/2006 8905 8916 9306
8/22/2006 8905 8916 9308
8/23/2006 8837 8847 9225
8/24/2006 8748 8759 9190
8/25/2006 8748 8758 9190
8/28/2006 8845 8856 9264
8/29/2006 8894 8907 9302
8/30/2006 8924 8937 9318
8/31/2006 8936 8948 9353
9/1/2006 8989 9002 9417
9/4/2006 8989 9002 9417
9/5/2006 9016 9028 9448
9/6/2006 8865 8877 9281
9/7/2006 8826 8837 9227
9/8/2006 8827 8841 9223
9/11/2006 8854 8867 9222
9/12/2006 9082 9095 9400
9/13/2006 9137 9151 9490
9/14/2006 9086 9099 9412
9/15/2006 9067 9081 9401
9/18/2006 9081 9095 9415
9/19/2006 9067 9082 9381
9/20/2006 9132 9147 9428
9/21/2006 9088 9103 9382
9/22/2006 9026 9040 9303
9/25/2006 9130 9146 9403
9/26/2006 9214 9229 9498
9/27/2006 9221 9237 9523
9/28/2006 9227 9242 9534
9/29/2006 9132 9147 9468
10/2/2006 9092 9108 9393
10/3/2006 9086 9102 9357
10/4/2006 9263 9280 9532
10/5/2006 9379 9397 9654
10/6/2006 9313 9330 9585
10/9/2006 9375 9393 9628
10/10/2006 9419 9437 9675
10/11/2006 9387 9403 9640
10/12/2006 9560 9578 9800
10/13/2006 9600 9619 9846
10/16/2006 9672 9692 9927
10/17/2006 9577 9596 9822
10/18/2006 9533 9551 9790
10/19/2006 9550 9569 9840
10/20/2006 9504 9524 9772
10/23/2006 9558 9576 9826
10/24/2006 9542 9562 9846
10/25/2006 9552 9571 9874
10/26/2006 9668 9689 9988
10/27/2006 9542 9562 9868
10/30/2006 9575 9596 9879
10/31/2006 9524 9544 9821
11/1/2006 9379 9399 9684
11/2/2006 9394 9414 9688
11/3/2006 9406 9425 9716
11/6/2006 9524 9544 9828
11/7/2006 9558 9578 9857
11/8/2006 9615 9635 9915
11/9/2006 9533 9554 9849
11/10/2006 9622 9644 9920
11/13/2006 9651 9672 9935
11/14/2006 9793 9816 10044
11/15/2006 9904 9925 10126
11/16/2006 9904 9926 10114
11/17/2006 9885 9908 10103
11/20/2006 9873 9897 10105
11/21/2006 9900 9923 10131
11/22/2006 9965 9988 10175
11/23/2006 9965 9988 10175
11/24/2006 9949 9973 10159
11/27/2006 9759 9783 9970
11/28/2006 9765 9789 9992
11/29/2006 9902 9927 10133
11/30/2006 9911 9936 10156
12/1/2006 9919 9944 10161
12/4/2006 10042 10067 10263
12/5/2006 10086 10112 10291
12/6/2006 10098 10123 10291
12/7/2006 10031 10055 10236
12/8/2006 10039 10063 10233
12/11/2006 10016 10041 10212
12/12/2006 9951 9976 10150
12/13/2006 9968 9993 10162
12/14/2006 10037 10062 10252
12/15/2006 9997 10024 10205
12/18/2006 9904 9932 10098
12/19/2006 9909 9938 10114
12/20/2006 9921 9949 10109
12/21/2006 9883 9911 10069
12/22/2006 9852 9880 10025
12/25/2006 9852 9880 10025
12/26/2006 9885 9913 10056
12/27/2006 9998 10002 10148
12/28/2006 9967 9972 10114
12/29/2006 9888 9893 10035
1/1/2007 9888 9893 10035
1/2/2007 9888 9893 10035
1/3/2007 9918 9923 10058
1/4/2007 9945 9949 10088
1/5/2007 9857 9862 10005
1/8/2007 9882 9888 10030
1/9/2007 9939 9945 10061
1/10/2007 9981 9986 10100
1/11/2007 10101 10106 10217
1/12/2007 10178 10184 10299
1/15/2007 10178 10184 10299
1/16/2007 10157 10162 10281
1/17/2007 10166 10172 10287
1/18/2007 10086 10091 10188
1/19/2007 10114 10122 10248
1/22/2007 10063 10070 10194
1/23/2007 10141 10148 10285
1/24/2007 10237 10244 10388
1/25/2007 10097 10104 10235
1/26/2007 10088 10094 10248
1/29/2007 10132 10138 10281
1/30/2007 10153 10160 10333
1/31/2007 10225 10233 10430
2/1/2007 10290 10298 10517
2/2/2007 10342 10350 10550
2/5/2007 10340 10348 10547
2/6/2007 10363 10371 10576
2/7/2007 10382 10391 10594
2/8/2007 10394 10403 10611
2/9/2007 10317 10325 10535
2/12/2007 10306 10314 10497
2/13/2007 10380 10389 10584
2/14/2007 10455 10465 10674
2/15/2007 10518 10528 10710
2/16/2007 10506 10515 10722
2/19/2007 10506 10515 10722
2/20/2007 10552 10562 10787
2/21/2007 10590 10601 10827
2/22/2007 10585 10594 10838
2/23/2007 10588 10598 10847
2/26/2007 10537 10548 10789
2/27/2007 10212 10221 10457
2/28/2007 10218 10228 10457
3/1/2007 10197 10208 10432
3/2/2007 10040 10053 10269
3/5/2007 9874 9886 10099
3/6/2007 10021 10033 10258
3/7/2007 10046 10059 10292
3/8/2007 10113 10126 10367
3/9/2007 10137 10152 10398
3/12/2007 10183 10198 10435
3/13/2007 9990 10004 10232
3/14/2007 10028 10042 10274
3/15/2007 10097 10111 10336
3/16/2007 10054 10068 10286
3/19/2007 10142 10158 10396
3/20/2007 10211 10227 10478
3/21/2007 10348 10363 10625
3/22/2007 10381 10397 10664
3/23/2007 10425 10441 10699
3/26/2007 10423 10439 10694
3/27/2007 10389 10404 10655
3/28/2007 10335 10351 10613
3/29/2007 10346 10362 10613
3/30/2007 10366 10383 10629
4/2/2007 10402 10419 10668
4/3/2007 10483 10500 10750
4/4/2007 10490 10508 10771
4/5/2007 10554 10571 10815
4/6/2007 10554 10571 10815
4/9/2007 10556 10574 10815
4/10/2007 10583 10601 10852
4/11/2007 10531 10548 10790
4/12/2007 10631 10649 10883
4/13/2007 10669 10688 10913
4/16/2007 10782 10801 11029
4/17/2007 10753 10773 10998
4/18/2007 10728 10748 10976
4/19/2007 10677 10696 10929
4/20/2007 10790 10809 11030
4/23/2007 10790 10811 11050
4/24/2007 10763 10783 11041
4/25/2007 10826 10846 11121
4/26/2007 10899 10920 11169
4/27/2007 10876 10898 11129
4/30/2007 10746 10766 10977
5/1/2007 10757 10777 11009
5/2/2007 10882 10903 11142
5/3/2007 10882 10904 11163
5/4/2007 10959 10980 11228
5/7/2007 10945 10967 11217
5/8/2007 10945 10967 11226
5/9/2007 11015 11038 11299
5/10/2007 10857 10878 11135
5/11/2007 10928 10950 11228
5/14/2007 10880 10903 11184
5/15/2007 10834 10857 11141
5/16/2007 10915 10938 11215
5/17/2007 10961 10984 11258
5/18/2007 11038 11061 11328
5/21/2007 11176 11200 11440
5/22/2007 11208 11233 11462
5/23/2007 11183 11209 11444
5/24/2007 11039 11064 11278
5/25/2007 11101 11125 11353
5/28/2007 11101 11125 11353
5/29/2007 11157 11181 11413
5/30/2007 11266 11291 11537
5/31/2007 11318 11344 11597
6/1/2007 11377 11403 11661
6/4/2007 11404 11431 11715
6/5/2007 11356 11382 11650
6/6/2007 11231 11258 11514
6/7/2007 10993 11019 11276
6/8/2007 11126 11152 11400
6/11/2007 11116 11143 11414
6/12/2007 10997 11023 11298
6/13/2007 11124 11150 11427
6/14/2007 11176 11203 11515
6/15/2007 11233 11260 11575
6/18/2007 11221 11249 11568
6/19/2007 11196 11223 11546
6/20/2007 11112 11138 11451
6/21/2007 11181 11208 11530
6/22/2007 11054 11082 11402
6/25/2007 10979 11007 11328
6/26/2007 11006 11033 11303
6/27/2007 11133 11160 11424
6/28/2007 11150 11179 11425
6/29/2007 11127 11155 11398
7/2/2007 11248 11277 11529
7/3/2007 11310 11339 11583
7/4/2007 11310 11339 11583
7/5/2007 11302 11332 11580
7/6/2007 11398 11428 11663
7/9/2007 11388 11420 11672
7/10/2007 11219 11250 11525
7/11/2007 11275 11306 11589
7/12/2007 11413 11444 11761
7/13/2007 11442 11474 11798
7/16/2007 11356 11387 11722
7/17/2007 11344 11376 11729
7/18/2007 11306 11338 11697
7/19/2007 11311 11344 11737
7/20/2007 11212 11243 11642
7/23/2007 11179 11210 11613
7/24/2007 10956 10986 11364
7/25/2007 10966 10996 11360
7/26/2007 10747 10777 11122
7/27/2007 10607 10636 11003
7/30/2007 10699 10728 11108
7/31/2007 10563 10592 10971
8/1/2007 10565 10593 10986
8/2/2007 10701 10730 11113
8/3/2007 10407 10435 10820
8/6/2007 10565 10593 10967
8/7/2007 10666 10697 11083
8/8/2007 10841 10873 11246
8/9/2007 10645 10675 11022
8/10/2007 10536 10567 10970
8/13/2007 10543 10574 10983
8/14/2007 10361 10390 10790
8/15/2007 10157 10186 10568
8/16/2007 10161 10190 10540
8/17/2007 10371 10400 10751
8/20/2007 10409 10439 10790
8/21/2007 10415 10445 10799
8/22/2007 10595 10627 10975
8/23/2007 10515 10546 10915
8/24/2007 10682 10714 11103
8/27/2007 10555 10586 10982
8/28/2007 10309 10340 10723
8/29/2007 10565 10597 10982
8/30/2007 10520 10553 10932
8/31/2007 10676 10708 11093
9/3/2007 10676 10708 11093
9/4/2007 10793 10827 11239
9/5/2007 10701 10734 11158
9/6/2007 10751 10785 11212
9/7/2007 10545 10579 11006
9/10/2007 10474 10506 10937
9/11/2007 10622 10657 11093
9/12/2007 10618 10652 11101
9/13/2007 10674 10708 11137
9/14/2007 10739 10774 11192
9/17/2007 10647 10681 11107
9/18/2007 10970 11006 11429
9/19/2007 11008 11044 11469
9/20/2007 10939 10976 11396
9/21/2007 10967 11003 11430
9/24/2007 10903 10939 11354
9/25/2007 10897 10934 11349
9/26/2007 10963 11000 11433
9/27/2007 11020 11058 11520
9/28/2007 10965 11002 11484
10/1/2007 11095 11133 11630
10/2/2007 11197 11236 11700
10/3/2007 11180 11218 11673
10/4/2007 11153 11192 11659
10/5/2007 11370 11411 11858
10/8/2007 11293 11333 11799
10/9/2007 11424 11464 11928
10/10/2007 11416 11457 11931
10/11/2007 11333 11373 11840
10/12/2007 11339 11380 11862
10/15/2007 11245 11286 11789
10/16/2007 11182 11221 11702
10/17/2007 11176 11216 11711
10/18/2007 11232 11270 11754
10/19/2007 10942 10980 11466
10/22/2007 11026 11065 11542
10/23/2007 11109 11148 11634
10/24/2007 11126 11164 11639
10/25/2007 11145 11184 11595
10/26/2007 11310 11351 11743
10/29/2007 11318 11360 11778
10/30/2007 11247 11288 11674
10/31/2007 11473 11516 11889
11/1/2007 11230 11267 11660
11/2/2007 11253 11292 11675
11/5/2007 11172 11209 11585
11/6/2007 11314 11353 11735
11/7/2007 11080 11116 11483
11/8/2007 11107 11134 11492
11/9/2007 10909 10935 11299
11/12/2007 10807 10837 11132
11/13/2007 11036 11069 11375
11/14/2007 10967 10997 11338
11/15/2007 10847 10876 11214
11/16/2007 10844 10873 11201
11/19/2007 10667 10692 11006
11/20/2007 10627 10650 10994
11/21/2007 10494 10519 10844
11/22/2007 10494 10519 10844
11/23/2007 10638 10663 10986
11/26/2007 10483 10506 10849
11/27/2007 10609 10634 10979
11/28/2007 10890 10921 11283
11/29/2007 10880 10910 11294
11/30/2007 10982 11014 11374
12/3/2007 10924 10959 11343
12/4/2007 10911 10944 11317
12/5/2007 11059 11094 11475
12/6/2007 11262 11298 11701
12/7/2007 11281 11318 11722
12/10/2007 11335 11372 11798
12/11/2007 11028 11063 11479
12/12/2007 11091 11127 11539
12/13/2007 11086 11121 11532
12/14/2007 10965 11000 11377
12/17/2007 10773 10808 11175
12/18/2007 10849 10884 11250
12/19/2007 10817 10852 11226
12/20/2007 10911 10947 11355
12/21/2007 11041 11079 11508
12/24/2007 11155 11195 11632
12/25/2007 11155 11195 11632
12/26/2007 11145 11186 11629
12/27/2007 10953 10993 11456
12/28/2007 10947 10988 11469
12/31/2007 10872 10912 11389
1/1/2008 10872 10912 11389
1/2/2008 10686 10724 11248
1/3/2008 10634 10672 11242
1/4/2008 10336 10372 10914
1/7/2008 10296 10333 10855
1/8/2008 10056 10090 10620
1/9/2008 10144 10179 10680
1/10/2008 10263 10299 10775
1/11/2008 10058 10093 10606
1/14/2008 10194 10230 10765
1/15/2008 9904 9938 10488
1/16/2008 9837 9869 10371
1/17/2008 9594 9625 10053
1/18/2008 9579 9610 10070
1/21/2008 9579 9610 10070
1/22/2008 9502 9532 9969
1/23/2008 9685 9716 10099
1/24/2008 9902 9934 10304
1/25/2008 9804 9837 10213
1/28/2008 10019 10054 10406
1/29/2008 10069 10105 10462
1/30/2008 9950 9985 10340
1/31/2008 10179 10215 10566
2/1/2008 10394 10432 10811
2/4/2008 10298 10335 10739
2/5/2008 9992 10027 10415
2/6/2008 9848 9882 10281
2/7/2008 9937 9972 10380
2/8/2008 9977 10013 10457
2/11/2008 10063 10098 10570
2/12/2008 10071 10107 10561
2/13/2008 10206 10242 10714
2/14/2008 10042 10079 10552
2/15/2008 10002 10039 10505
2/18/2008 10002 10039 10505
2/19/2008 10058 10095 10556
2/20/2008 10211 10249 10712
2/21/2008 10025 10062 10571
2/22/2008 10094 10131 10621
2/25/2008 10330 10370 10855
2/26/2008 10492 10534 10987
2/27/2008 10494 10536 10952
2/28/2008 10369 10410 10879
2/29/2008 10017 10054 10519
3/3/2008 9996 10033 10525
3/4/2008 9990 10028 10471
3/5/2008 10058 10095 10568
3/6/2008 9737 9772 10274
3/7/2008 9619 9655 10125
3/10/2008 9360 9393 9873
3/11/2008 9717 9754 10202
3/12/2008 9737 9772 10199
3/13/2008 9871 9908 10342
3/14/2008 9679 9715 10150
3/17/2008 9433 9466 9882
3/18/2008 9842 9880 10301
3/19/2008 9562 9596 9989
3/20/2008 9777 9815 10167
3/21/2008 9777 9815 10167
3/24/2008 10038 10078 10433
3/25/2008 10115 10155 10539
3/26/2008 10050 10091 10497
3/27/2008 9892 9931 10364
3/28/2008 9775 9813 10277
3/31/2008 9856 9894 10359
4/1/2008 10204 10246 10690
4/2/2008 10225 10266 10741
4/3/2008 10271 10313 10779
4/4/2008 10348 10391 10877
4/7/2008 10357 10402 10899
4/8/2008 10371 10415 10919
4/9/2008 10188 10231 10751
4/10/2008 10359 10403 10916
4/11/2008 10150 10193 10704
4/14/2008 10148 10191 10712
4/15/2008 10142 10185 10743
4/16/2008 10403 10449 11044
4/17/2008 10344 10388 10977
4/18/2008 10507 10553 11149
4/21/2008 10536 10583 11195
4/22/2008 10367 10413 11006
4/23/2008 10402 10448 11047
4/24/2008 10503 10549 11086
4/25/2008 10649 10698 11278
4/28/2008 10665 10714 11293
4/29/2008 10605 10653 11189
4/30/2008 10592 10640 11198
5/1/2008 10740 10790 11279
5/2/2008 10713 10762 11300
5/5/2008 10705 10755 11317
5/6/2008 10822 10874 11424
5/7/2008 10655 10705 11305
5/8/2008 10747 10798 11421
5/9/2008 10744 10795 11446
5/12/2008 10870 10923 11544
5/13/2008 10913 10966 11632
5/14/2008 10934 10987 11635
5/15/2008 11070 11126 11786
5/16/2008 11089 11144 11850
5/19/2008 11020 11075 11792
5/20/2008 11007 11061 11799
5/21/2008 10807 10861 11597
5/22/2008 10861 10915 11635
5/23/2008 10747 10801 11515
5/26/2008 10747 10801 11515
5/27/2008 10865 10920 11590
5/28/2008 11049 11104 11753
5/29/2008 11088 11144 11758
5/30/2008 11164 11221 11867
6/2/2008 11063 11121 11769
6/3/2008 11057 11118 11770
6/4/2008 11086 11145 11782
6/5/2008 11378 11439 12098
6/6/2008 11061 11121 11806
6/9/2008 11103 11162 11845
6/10/2008 11013 11074 11726
6/11/2008 10824 10884 11539
6/12/2008 10801 10860 11541
6/13/2008 11024 11085 11750
6/16/2008 11143 11204 11870
6/17/2008 11155 11217 11921
6/18/2008 11072 11133 11840
6/19/2008 11201 11262 11902
6/20/2008 10978 11038 11687
6/23/2008 11001 11065 11728
6/24/2008 10847 10906 11552
6/25/2008 10967 11027 11628
6/26/2008 10703 10762 11336
6/27/2008 10694 10752 11318
6/30/2008 10617 10674 11261
7/1/2008 10692 10751 11292
7/2/2008 10344 10401 10916
7/3/2008 10236 10293 10807
7/4/2008 10236 10293 10807
7/7/2008 10198 10253 10743
7/8/2008 10413 10471 10921
7/9/2008 10298 10354 10817
7/10/2008 10311 10372 10880
7/11/2008 10281 10340 10839
7/14/2008 10186 10244 10792
7/15/2008 10090 10148 10677
7/16/2008 10281 10339 10865
7/17/2008 10348 10407 10960
7/18/2008 10323 10383 10929
7/21/2008 10392 10452 11016
7/22/2008 10523 10583 11096
7/23/2008 10569 10633 11089
7/24/2008 10348 10411 10813
7/25/2008 10334 10397 10853
7/28/2008 10184 10247 10730
7/29/2008 10355 10419 10908
7/30/2008 10503 10569 11106
7/31/2008 10315 10380 10886
8/1/2008 10307 10371 10856
8/4/2008 10096 10158 10608
8/5/2008 10257 10320 10777
8/6/2008 10292 10356 10878
8/7/2008 10225 10289 10748
8/8/2008 10452 10517 10956
8/11/2008 10519 10584 11012
8/12/2008 10380 10446 10933
8/13/2008 10471 10537 11029
8/14/2008 10561 10628 11104
8/15/2008 10557 10624 11085
8/18/2008 10415 10480 10943
8/19/2008 10327 10393 10867
8/20/2008 10396 10462 10932
8/21/2008 10423 10489 10971
8/22/2008 10513 10581 11039
8/25/2008 10294 10360 10816
8/26/2008 10344 10411 10874
8/27/2008 10488 10556 11017
8/28/2008 10624 10692 11159
8/29/2008 10505 10574 11030
9/1/2008 10505 10574 11030
9/2/2008 10432 10500 10880
9/3/2008 10348 10414 10749
9/4/2008 10119 10184 10503
9/5/2008 10171 10237 10546
9/8/2008 10304 10371 10616
9/9/2008 9927 9991 10192
9/10/2008 10063 10129 10355
9/11/2008 10127 10193 10419
9/12/2008 10196 10263 10531
9/15/2008 9787 9852 10080
9/16/2008 9987 10052 10271
9/17/2008 9562 9624 9832
9/18/2008 9958 10023 10218
9/19/2008 10309 10378 10624
9/22/2008 9942 10007 10242
9/23/2008 9823 9888 10117
9/24/2008 9704 9769 9996
9/25/2008 9829 9895 10093
9/26/2008 9725 9790 9974
9/29/2008 9051 9110 9249
9/30/2008 9376 9438 9604
10/1/2008 9278 9339 9447
10/2/2008 8782 8840 8909
10/3/2008 8545 8602 8693
10/6/2008 8186 8239 8309
10/7/2008 7763 7813 7866
10/8/2008 7694 7743 7793
10/9/2008 7160 7206 7282
10/10/2008 7173 7219 7207
10/13/2008 7844 7896 7990
10/14/2008 7621 7671 7796
10/15/2008 6931 6974 7058
10/16/2008 7246 7292 7335
10/17/2008 7239 7284 7328
10/20/2008 7604 7654 7687
10/21/2008 7396 7445 7465
10/22/2008 7014 7058 7026
10/23/2008 6799 6842 6804
10/24/2008 6607 6649 6619
10/27/2008 6332 6371 6335
10/28/2008 6881 6925 6853
10/29/2008 7050 7096 7041
10/30/2008 7281 7327 7312
10/31/2008 7514 7562 7520
</Table>
AVERAGE ANNUAL TOTAL RETURNS FOR THE PERIOD ENDED OCTOBER 31, 2008
- --------------------------------------------------------------------------------
<Table>
<Caption>
SINCE INCEPTION
ONE YEAR (03/01/06)
-------- ---------------
RYDEX S&P MIDCAP 400 PURE GROWTH ETF... -34.52% -10.23%
S&P MIDCAP 400/CITIGROUP PURE GROWTH
TOTAL RETURN INDEX................... -34.33% -9.94%
S&P MIDCAP 400 GROWTH TOTAL RETURN
INDEX................................ -36.74% -10.13%
</Table>
The returns presented above do not reflect the effect of taxes. Index returns
represent total returns. Past performance is no guarantee of future results.
11 ANNUAL REPORT
Rydex S&P MidCap 400 Pure Growth ETF
PORTFOLIO SUMMARY (Unaudited) As of October 31, 2008
- --------------------------------------------------------------------------------
TOP 10 HOLDINGS*
- --------------------------------------------------------------------------------
<Table>
<Caption>
DESCRIPTION % OF NET ASSETS
- ------------------------------------------------------------------------------------
PSYCHIATRIC SOLUTIONS, INC. 2.43%
ENCORE ACQUISITION CO. 2.31%
DREAMWORKS ANIMATION SKG, INC. -- CLASS A 2.26%
PHILADELPHIA CONSOLIDATED HOLDING CO. 2.13%
NVR, INC. 1.98%
STRAYER EDUCATION, INC. 1.95%
AEROPOSTALE, INC. 1.94%
TOLL BROTHERS, INC. 1.92%
DIGITAL RIVER, INC. 1.79%
F5 NETWORKS, INC. 1.79%
- ------------------------------------------------------------------------------------
</Table>
SECTOR ALLOCATIONS*
(PIE CHART)
<Table>
Consumer Discretionary 31.18
Health Care 18.51
Information Technology 17.96
Industrials 10.09
Energy 8.05
Financials 7.02
Consumer Staples 3.92
Materials 3.27
</Table>
* The Fund's Top Ten Holdings are expressed as a percentage of net assets and
the Sector Allocations are expressed as a percentage of the Fund's investments
market value. These percentages may change over time.
12
RYDEX S&P SMALLCAP 600 PURE VALUE ETF
MANAGER'S ANALYSIS (Unaudited)
- --------------------------------------------------------------------------------
For the year ended October 31, 2008, Rydex S&P Small Cap 600 Pure Value ETF
returned -36.48%. Over the year, its benchmark, the S&P SmallCap 600/CitiGroup
Pure Value Total Return Index, turned in a -36.51%, which underperformed its S&P
SmallCap 600 Value Total Return Index (whose return was -30.96) counterpart by
more than 5%. Small-cap pure value trailed its traditional weight counterpart in
three out of the four quarters this year. The pure style weighting to the hard-
hit financials sector was the biggest reason for the underperformance. Within
the financials sector, the banking industry was the largest contributor to the
lag from the traditional style index. The pure style's weighting to the
materials and energy industries also played roles in the underperformance.
Surprisingly, an overweighting in retailing, specifically an overweight to
Finish Line Sporting Apparel store (FINL), and zero exposure to a handful of
other companies in the retail industry that suffered double-digit losses, helped
the pure style small-cap index make up some ground.
CUMULATIVE FUND PERFORMANCE: MARCH 1, 2006 - OCTOBER 31, 2008
(Performance Graph)
<Table>
<Caption>
RYDEX S&P S&P SMALLCAP S&P SMALLCAP
SMALLCAP 600 600/CITIGROUP PURE 600 VALUE
PURE VALUE VALUE TOTAL TOTAL RETURN
ETF(A) RETURN INDEX(B) INDEX(C)
------------ ------------------ ------------
3/1/2006 10000 10000 10000
3/2/2006 9938 9938 9980
3/3/2006 9904 9906 9941
3/6/2006 9854 9856 9847
3/7/2006 9714 9717 9722
3/8/2006 9735 9737 9726
3/9/2006 9691 9693 9684
3/10/2006 9836 9839 9817
3/13/2006 9844 9847 9832
3/14/2006 9932 9934 9948
3/15/2006 9982 9985 10026
3/16/2006 10018 10022 10048
3/17/2006 10075 10079 10085
3/20/2006 10107 10109 10090
3/21/2006 9961 9965 9981
3/22/2006 10133 10137 10114
3/23/2006 10166 10172 10144
3/24/2006 10234 10238 10204
3/27/2006 10237 10242 10199
3/28/2006 10174 10179 10154
3/29/2006 10349 10354 10317
3/30/2006 10317 10323 10296
3/31/2006 10338 10344 10336
4/3/2006 10296 10301 10288
4/4/2006 10354 10360 10337
4/5/2006 10372 10378 10391
4/6/2006 10367 10374 10386
4/7/2006 10247 10254 10259
4/10/2006 10185 10190 10214
4/11/2006 10062 10069 10085
4/12/2006 10120 10125 10134
4/13/2006 10127 10133 10153
4/14/2006 10127 10133 10153
4/17/2006 10109 10116 10153
4/18/2006 10338 10344 10424
4/19/2006 10450 10457 10535
4/20/2006 10432 10441 10500
4/21/2006 10393 10402 10476
4/24/2006 10338 10347 10407
4/25/2006 10328 10336 10379
4/26/2006 10346 10355 10374
4/27/2006 10307 10316 10303
4/28/2006 10359 10369 10350
5/1/2006 10330 10338 10347
5/2/2006 10450 10459 10427
5/3/2006 10455 10466 10448
5/4/2006 10489 10498 10566
5/5/2006 10585 10594 10651
5/8/2006 10596 10607 10665
5/9/2006 10588 10599 10663
5/10/2006 10486 10496 10608
5/11/2006 10182 10192 10358
5/12/2006 9979 9988 10159
5/15/2006 9951 9958 10095
5/16/2006 9956 9964 10089
5/17/2006 9815 9823 9937
5/18/2006 9740 9748 9860
5/19/2006 9823 9833 9925
5/22/2006 9787 9796 9854
5/23/2006 9704 9711 9791
5/24/2006 9774 9783 9824
5/25/2006 9922 9932 9985
5/26/2006 9888 9897 10005
5/29/2006 9888 9897 10005
5/30/2006 9649 9658 9755
5/31/2006 9769 9777 9880
6/1/2006 9945 9958 10066
6/2/2006 9961 9973 10084
6/5/2006 9688 9699 9801
6/6/2006 9623 9631 9730
6/7/2006 9602 9611 9688
6/8/2006 9662 9673 9689
6/9/2006 9584 9594 9625
6/12/2006 9376 9380 9385
6/13/2006 9238 9240 9272
6/14/2006 9233 9237 9310
6/15/2006 9524 9533 9615
6/16/2006 9438 9446 9525
6/19/2006 9295 9300 9379
6/20/2006 9251 9254 9334
6/21/2006 9402 9407 9504
6/22/2006 9438 9445 9488
6/23/2006 9449 9456 9498
6/26/2006 9576 9586 9626
6/27/2006 9436 9444 9475
6/28/2006 9485 9494 9506
6/29/2006 9821 9835 9847
6/30/2006 9917 9935 9918
7/3/2006 9956 9973 9986
7/4/2006 9956 9973 9986
7/5/2006 9860 9875 9858
7/6/2006 9912 9930 9897
7/7/2006 9761 9776 9745
7/10/2006 9805 9820 9771
7/11/2006 9870 9887 9830
7/12/2006 9678 9692 9650
7/13/2006 9477 9486 9462
7/14/2006 9391 9404 9373
7/17/2006 9324 9335 9293
7/18/2006 9397 9408 9354
7/19/2006 9680 9693 9642
7/20/2006 9446 9457 9383
7/21/2006 9306 9317 9221
7/24/2006 9563 9575 9456
7/25/2006 9670 9684 9554
7/26/2006 9599 9614 9498
7/27/2006 9490 9504 9388
7/28/2006 9704 9716 9588
7/31/2006 9714 9728 9593
8/1/2006 9560 9574 9467
8/2/2006 9584 9597 9548
8/3/2006 9691 9706 9676
8/4/2006 9625 9640 9646
8/7/2006 9576 9589 9573
8/8/2006 9449 9462 9480
8/9/2006 9376 9390 9398
8/10/2006 9433 9446 9464
8/11/2006 9319 9333 9376
8/14/2006 9371 9385 9413
8/15/2006 9542 9557 9621
8/16/2006 9651 9667 9770
8/17/2006 9678 9694 9780
8/18/2006 9711 9728 9795
8/21/2006 9672 9688 9714
8/22/2006 9735 9752 9744
8/23/2006 9618 9635 9604
8/24/2006 9581 9596 9582
8/25/2006 9592 9609 9591
8/28/2006 9688 9704 9686
8/29/2006 9802 9821 9795
8/30/2006 9831 9849 9842
8/31/2006 9839 9856 9850
9/1/2006 9875 9894 9884
9/4/2006 9875 9894 9884
9/5/2006 9982 10001 9985
9/6/2006 9789 9808 9789
9/7/2006 9688 9707 9719
9/8/2006 9717 9735 9752
9/11/2006 9675 9693 9725
9/12/2006 9878 9897 9942
9/13/2006 9984 10005 10036
9/14/2006 9927 9947 9981
9/15/2006 9983 10003 10017
9/18/2006 9965 9985 10015
9/19/2006 9921 9942 9972
9/20/2006 10022 10045 10092
9/21/2006 9939 9958 9990
9/22/2006 9905 9925 9903
9/25/2006 10007 10029 10015
9/26/2006 10022 10045 10062
9/27/2006 10095 10117 10111
9/28/2006 10072 10094 10092
9/29/2006 9939 9961 9977
10/2/2006 9861 9880 9893
10/3/2006 9913 9933 9907
10/4/2006 10066 10079 10090
10/5/2006 10155 10170 10211
10/6/2006 10082 10097 10155
10/9/2006 10176 10190 10225
10/10/2006 10204 10219 10248
10/11/2006 10160 10175 10216
10/12/2006 10373 10392 10416
10/13/2006 10436 10455 10483
10/16/2006 10519 10539 10587
10/17/2006 10493 10512 10523
10/18/2006 10472 10490 10474
10/19/2006 10524 10544 10520
10/20/2006 10472 10491 10438
10/23/2006 10495 10514 10465
10/24/2006 10547 10567 10494
10/25/2006 10615 10635 10573
10/26/2006 10717 10739 10658
10/27/2006 10573 10595 10523
10/30/2006 10623 10644 10578
10/31/2006 10519 10539 10518
11/1/2006 10307 10326 10343
11/2/2006 10265 10283 10299
11/3/2006 10270 10289 10321
11/6/2006 10385 10405 10451
11/7/2006 10396 10418 10470
11/8/2006 10506 10527 10547
11/9/2006 10396 10417 10450
11/10/2006 10498 10520 10535
11/13/2006 10579 10603 10589
11/14/2006 10768 10791 10760
11/15/2006 10849 10873 10831
11/16/2006 10849 10875 10802
11/17/2006 10778 10803 10755
11/20/2006 10823 10847 10794
11/21/2006 10862 10888 10833
11/22/2006 10857 10882 10845
11/23/2006 10857 10882 10845
11/24/2006 10865 10891 10849
11/27/2006 10629 10654 10587
11/28/2006 10668 10693 10612
11/29/2006 10757 10782 10748
11/30/2006 10794 10820 10778
12/1/2006 10752 10779 10719
12/4/2006 10967 10994 10910
12/5/2006 10978 11005 10938
12/6/2006 10985 11014 10925
12/7/2006 10959 10987 10875
12/8/2006 10946 10975 10856
12/11/2006 10959 10988 10854
12/12/2006 10946 10974 10801
12/13/2006 10928 10956 10804
12/14/2006 11025 11052 10868
12/15/2006 10988 11016 10850
12/18/2006 10852 10883 10727
12/19/2006 10841 10873 10727
12/20/2006 10886 10918 10772
12/21/2006 10902 10933 10739
12/22/2006 10860 10892 10695
12/25/2006 10860 10892 10695
12/26/2006 10983 11015 10811
12/27/2006 11150 11183 10948
12/28/2006 11097 11128 10908
12/29/2006 10995 11027 10815
1/1/2007 10995 11027 10815
1/2/2007 10995 11027 10815
1/3/2007 11084 11116 10824
1/4/2007 11087 11118 10840
1/5/2007 10827 10859 10641
1/8/2007 10825 10858 10658
1/9/2007 10851 10882 10681
1/10/2007 10848 10882 10692
1/11/2007 10990 11022 10838
1/12/2007 11053 11086 10904
1/15/2007 11053 11086 10904
1/16/2007 11066 11101 10876
1/17/2007 11037 11072 10853
1/18/2007 10969 11002 10741
1/19/2007 11061 11096 10833
1/22/2007 10969 11002 10732
1/23/2007 11045 11079 10836
1/24/2007 11185 11221 10947
1/25/2007 11079 11113 10823
1/26/2007 11137 11172 10866
1/29/2007 11179 11216 10918
1/30/2007 11256 11292 10994
1/31/2007 11319 11356 11041
2/1/2007 11419 11457 11149
2/2/2007 11471 11508 11166
2/5/2007 11447 11485 11114
2/6/2007 11495 11533 11179
2/7/2007 11547 11586 11258
2/8/2007 11492 11530 11231
2/9/2007 11369 11407 11114
2/12/2007 11345 11385 11083
2/13/2007 11437 11476 11185
2/14/2007 11429 11469 11213
2/15/2007 11440 11480 11226
2/16/2007 11487 11526 11255
2/19/2007 11487 11526 11255
2/20/2007 11592 11632 11361
2/21/2007 11618 11660 11384
2/22/2007 11652 11693 11397
2/23/2007 11597 11638 11355
2/26/2007 11605 11648 11327
2/27/2007 11185 11225 10936
2/28/2007 11274 11313 10936
3/1/2007 11198 11237 10902
3/2/2007 11016 11055 10710
3/5/2007 10769 10805 10487
3/6/2007 11014 11051 10722
3/7/2007 11024 11064 10702
3/8/2007 11074 11113 10787
3/9/2007 11074 11112 10834
3/12/2007 11100 11141 10874
3/13/2007 10827 10865 10610
3/14/2007 10914 10953 10701
3/15/2007 11022 11061 10817
3/16/2007 10965 11002 10760
3/19/2007 11076 11112 10861
3/20/2007 11155 11193 10958
3/21/2007 11302 11341 11136
3/22/2007 11349 11389 11132
3/23/2007 11360 11399 11163
3/26/2007 11354 11394 11142
3/27/2007 11252 11291 11050
3/28/2007 11189 11228 11004
3/29/2007 11247 11284 11049
3/30/2007 11218 11256 11049
4/2/2007 11299 11341 11092
4/3/2007 11394 11436 11187
4/4/2007 11334 11374 11176
4/5/2007 11360 11402 11189
4/6/2007 11360 11402 11189
4/9/2007 11368 11410 11182
4/10/2007 11402 11445 11228
4/11/2007 11307 11349 11128
4/12/2007 11389 11432 11208
4/13/2007 11476 11521 11272
4/16/2007 11613 11657 11434
4/17/2007 11568 11613 11398
4/18/2007 11524 11568 11350
4/19/2007 11474 11516 11297
4/20/2007 11624 11668 11445
4/23/2007 11595 11639 11427
4/24/2007 11571 11616 11409
4/25/2007 11671 11719 11489
4/26/2007 11714 11760 11516
4/27/2007 11637 11684 11474
4/30/2007 11418 11463 11267
5/1/2007 11487 11532 11334
5/2/2007 11706 11752 11511
5/3/2007 11669 11716 11519
5/4/2007 11703 11750 11565
5/7/2007 11698 11746 11570
5/8/2007 11692 11741 11561
5/9/2007 11756 11805 11623
5/10/2007 11524 11571 11405
5/11/2007 11626 11674 11554
5/14/2007 11505 11552 11457
5/15/2007 11400 11445 11359
5/16/2007 11463 11509 11434
5/17/2007 11386 11431 11377
5/18/2007 11468 11515 11455
5/21/2007 11595 11644 11583
5/22/2007 11711 11761 11683
5/23/2007 11634 11685 11627
5/24/2007 11492 11539 11462
5/25/2007 11595 11645 11540
5/28/2007 11595 11645 11540
5/29/2007 11711 11761 11662
5/30/2007 11758 11809 11732
5/31/2007 11779 11829 11782
6/1/2007 11914 11968 11887
6/4/2007 11969 12023 11906
6/5/2007 11835 11884 11797
6/6/2007 11703 11752 11672
6/7/2007 11487 11532 11446
6/8/2007 11584 11632 11568
6/11/2007 11563 11612 11554
6/12/2007 11389 11435 11391
6/13/2007 11503 11549 11548
6/14/2007 11603 11650 11631
6/15/2007 11760 11810 11786
6/18/2007 11728 11781 11748
6/19/2007 11776 11828 11780
6/20/2007 11641 11692 11616
6/21/2007 11660 11710 11647
6/22/2007 11515 11563 11533
6/25/2007 11438 11485 11452
6/26/2007 11383 11430 11395
6/27/2007 11512 11559 11563
6/28/2007 11549 11599 11578
6/29/2007 11488 11536 11518
7/2/2007 11665 11716 11676
7/3/2007 11681 11733 11697
7/4/2007 11681 11733 11697
7/5/2007 11700 11751 11725
7/6/2007 11708 11758 11728
7/9/2007 11766 11819 11768
7/10/2007 11530 11581 11547
7/11/2007 11589 11638 11596
7/12/2007 11785 11835 11830
7/13/2007 11792 11844 11874
7/16/2007 11705 11758 11793
7/17/2007 11700 11752 11826
7/18/2007 11618 11669 11777
7/19/2007 11687 11739 11885
7/20/2007 11456 11508 11667
7/23/2007 11456 11506 11659
7/24/2007 11123 11170 11345
7/25/2007 11123 11169 11352
7/26/2007 10739 10784 11026
7/27/2007 10522 10565 10813
7/30/2007 10602 10646 10927
7/31/2007 10559 10603 10836
8/1/2007 10498 10541 10838
8/2/2007 10549 10593 10915
8/3/2007 10109 10148 10466
8/6/2007 10133 10172 10587
8/7/2007 10099 10139 10632
8/8/2007 10236 10277 10801
8/9/2007 10022 10062 10640
8/10/2007 10295 10336 10857
8/13/2007 10181 10221 10734
8/14/2007 9953 9992 10501
8/15/2007 9784 9822 10323
8/16/2007 10041 10080 10557
8/17/2007 10271 10313 10804
8/20/2007 10260 10303 10829
8/21/2007 10310 10355 10863
8/22/2007 10451 10495 11006
8/23/2007 10326 10370 10882
8/24/2007 10435 10479 11037
8/27/2007 10318 10364 10911
8/28/2007 10019 10062 10595
8/29/2007 10260 10305 10857
8/30/2007 10221 10263 10803
8/31/2007 10324 10369 10948
9/3/2007 10324 10369 10948
9/4/2007 10337 10382 11020
9/5/2007 10223 10268 10896
9/6/2007 10189 10233 10911
9/7/2007 9980 10022 10663
9/10/2007 9876 9917 10571
9/11/2007 10038 10081 10750
9/12/2007 9945 9988 10680
9/13/2007 9945 9989 10702
9/14/2007 10017 10061 10755
9/17/2007 9908 9951 10655
9/18/2007 10348 10396 11107
9/19/2007 10541 10592 11262
9/20/2007 10419 10468 11169
9/21/2007 10401 10450 11174
9/24/2007 10261 10307 11059
9/25/2007 10136 10182 10987
9/26/2007 10179 10227 11068
9/27/2007 10192 10240 11100
9/28/2007 10065 10111 10977
10/1/2007 10307 10356 11241
10/2/2007 10342 10390 11339
10/3/2007 10273 10320 11241
10/4/2007 10307 10355 11252
10/5/2007 10499 10548 11487
10/8/2007 10379 10427 11386
10/9/2007 10472 10521 11466
10/10/2007 10382 10430 11424
10/11/2007 10280 10330 11300
10/12/2007 10323 10372 11379
10/15/2007 10137 10184 11195
10/16/2007 10012 10060 11077
10/17/2007 9969 10016 11067
10/18/2007 9964 10010 11055
10/19/2007 9612 9657 10712
10/22/2007 9831 9877 10899
10/23/2007 9894 9940 10990
10/24/2007 9809 9857 10918
10/25/2007 9748 9793 10863
10/26/2007 9918 9967 11051
10/29/2007 9860 9906 11025
10/30/2007 9862 9910 10983
10/31/2007 9953 9989 11110
11/1/2007 9495 9528 10658
11/2/2007 9426 9459 10667
11/5/2007 9301 9338 10572
11/6/2007 9436 9471 10724
11/7/2007 9074 9106 10354
11/8/2007 9250 9281 10472
11/9/2007 9141 9177 10357
11/12/2007 9194 9227 10288
11/13/2007 9495 9533 10579
11/14/2007 9330 9368 10482
11/15/2007 9285 9318 10382
11/16/2007 9154 9189 10311
11/19/2007 8931 8963 10081
11/20/2007 8925 8955 10076
11/21/2007 8800 8832 9954
11/22/2007 8800 8832 9954
11/23/2007 8994 9029 10162
11/26/2007 8726 8754 9863
11/27/2007 8824 8856 9976
11/28/2007 9090 9125 10329
11/29/2007 8965 9001 10273
11/30/2007 9013 9049 10328
12/3/2007 8880 8914 10192
12/4/2007 8784 8818 10090
12/5/2007 8915 8952 10258
12/6/2007 9242 9281 10574
12/7/2007 9239 9278 10549
12/10/2007 9311 9352 10630
12/11/2007 9005 9043 10285
12/12/2007 9016 9053 10332
12/13/2007 9018 9056 10294
12/14/2007 8827 8864 10061
12/17/2007 8715 8750 9881
12/18/2007 8893 8929 10044
12/19/2007 8912 8948 10061
12/20/2007 9026 9066 10209
12/21/2007 9333 9374 10487
12/24/2007 9437 9471 10612
12/25/2007 9437 9471 10612
12/26/2007 9405 9470 10603
12/27/2007 9101 9156 10300
12/28/2007 8987 9040 10275
12/31/2007 8923 8975 10215
1/1/2008 8923 8975 10215
1/2/2008 8794 8845 10068
1/3/2008 8519 8563 9912
1/4/2008 8193 8233 9585
1/7/2008 8278 8320 9645
1/8/2008 7968 8005 9347
1/9/2008 7979 8015 9453
1/10/2008 8118 8157 9558
1/11/2008 7966 8002 9349
1/14/2008 8049 8086 9435
1/15/2008 7864 7898 9235
1/16/2008 8102 8142 9309
1/17/2008 7893 7928 9056
1/18/2008 7776 7809 8971
1/21/2008 7776 7809 8971
1/22/2008 7896 7932 9010
1/23/2008 8487 8531 9408
1/24/2008 8495 8542 9376
1/25/2008 8457 8502 9333
1/28/2008 8813 8865 9558
1/29/2008 8912 8966 9631
1/30/2008 8891 8943 9540
1/31/2008 9345 9406 9833
2/1/2008 9551 9616 10072
2/4/2008 9401 9463 9943
2/5/2008 9080 9136 9655
2/6/2008 9059 9115 9580
2/7/2008 9161 9219 9715
2/8/2008 9059 9115 9645
2/11/2008 9027 9083 9644
2/12/2008 9086 9144 9725
2/13/2008 9235 9296 9933
2/14/2008 8965 9020 9699
2/15/2008 8864 8917 9638
2/18/2008 8864 8917 9638
2/19/2008 8856 8908 9654
2/20/2008 9054 9111 9801
2/21/2008 8735 8787 9601
2/22/2008 8762 8814 9634
2/25/2008 8933 8989 9846
2/26/2008 9040 9097 9953
2/27/2008 9059 9114 9925
2/28/2008 8813 8866 9764
2/29/2008 8487 8535 9457
3/3/2008 8455 8503 9455
3/4/2008 8476 8526 9427
3/5/2008 8409 8457 9434
3/6/2008 8126 8173 9176
3/7/2008 8142 8189 9162
3/10/2008 8011 8056 8981
3/11/2008 8385 8435 9372
3/12/2008 8241 8289 9258
3/13/2008 8471 8523 9475
3/14/2008 8241 8290 9249
3/17/2008 8169 8217 9132
3/18/2008 8551 8604 9550
3/19/2008 8401 8451 9312
3/20/2008 8747 8803 9567
3/21/2008 8747 8803 9567
3/24/2008 9035 9097 9798
3/25/2008 9131 9194 9846
3/26/2008 9046 9109 9776
3/27/2008 8763 8819 9586
3/28/2008 8618 8672 9470
3/31/2008 8698 8755 9556
4/1/2008 9099 9162 9906
4/2/2008 9118 9181 9950
4/3/2008 9026 9087 9952
4/4/2008 8962 9023 9919
4/7/2008 8938 8998 9903
4/8/2008 8930 8990 9881
4/9/2008 8559 8616 9661
4/10/2008 8650 8709 9758
4/11/2008 8379 8435 9504
4/14/2008 8325 8381 9452
4/15/2008 8414 8470 9557
4/16/2008 8666 8726 9869
4/17/2008 8610 8668 9796
4/18/2008 8776 8837 9945
4/21/2008 8604 8664 9852
4/22/2008 8392 8448 9677
4/23/2008 8379 8435 9690
4/24/2008 8583 8641 9843
4/25/2008 8621 8681 9900
4/28/2008 8666 8725 9966
4/29/2008 8591 8651 9875
4/30/2008 8483 8542 9817
5/1/2008 8688 8748 10040
5/2/2008 8631 8690 10000
5/5/2008 8521 8580 9955
5/6/2008 8513 8571 9985
5/7/2008 8282 8338 9817
5/8/2008 8277 8332 9829
5/9/2008 8287 8344 9832
5/12/2008 8502 8561 10018
5/13/2008 8561 8621 10085
5/14/2008 8548 8608 10089
5/15/2008 8596 8656 10191
5/16/2008 8516 8575 10158
5/19/2008 8505 8564 10139
5/20/2008 8435 8494 10076
5/21/2008 8330 8387 9984
5/22/2008 8432 8490 10051
5/23/2008 8328 8384 9924
5/26/2008 8328 8384 9924
5/27/2008 8475 8533 10065
5/28/2008 8508 8567 10102
5/29/2008 8647 8710 10193
5/30/2008 8637 8700 10228
6/2/2008 8473 8533 10128
6/3/2008 8481 8541 10104
6/4/2008 8575 8635 10173
6/5/2008 8776 8843 10408
6/6/2008 8443 8501 10073
6/9/2008 8322 8378 9973
6/10/2008 8354 8412 9975
6/11/2008 8075 8125 9755
6/12/2008 8131 8184 9797
6/13/2008 8287 8343 9972
6/16/2008 8406 8464 10095
6/17/2008 8255 8312 9990
6/18/2008 8166 8221 9920
6/19/2008 8266 8322 10024
6/20/2008 8121 8175 9880
6/23/2008 7944 7980 9741
6/24/2008 7831 7864 9615
6/25/2008 7971 8008 9730
6/26/2008 7737 7770 9490
6/27/2008 7737 7769 9425
6/30/2008 7568 7595 9321
7/1/2008 7627 7657 9355
7/2/2008 7378 7404 9089
7/3/2008 7324 7349 9013
7/4/2008 7324 7349 9013
7/7/2008 7241 7265 8912
7/8/2008 7595 7624 9241
7/9/2008 7278 7304 8955
7/10/2008 7295 7320 9043
7/11/2008 7316 7342 9080
7/14/2008 7132 7156 8907
7/15/2008 7084 7104 8860
7/16/2008 7511 7537 9223
7/17/2008 7776 7805 9407
7/18/2008 7709 7738 9365
7/21/2008 7746 7775 9416
7/22/2008 8071 8104 9687
7/23/2008 8201 8233 9775
7/24/2008 7914 7944 9479
7/25/2008 8020 8050 9587
7/28/2008 7784 7814 9408
7/29/2008 8139 8170 9690
7/30/2008 8066 8099 9703
7/31/2008 7995 8028 9630
8/1/2008 7987 8019 9651
8/4/2008 7874 7904 9532
8/5/2008 8193 8224 9832
8/6/2008 8198 8229 9851
8/7/2008 7976 8008 9694
8/8/2008 8374 8408 10019
8/11/2008 8596 8631 10269
8/12/2008 8509 8543 10172
8/13/2008 8466 8501 10184
8/14/2008 8574 8608 10267
8/15/2008 8612 8649 10294
8/18/2008 8477 8513 10132
8/19/2008 8271 8306 9954
8/20/2008 8261 8294 9954
8/21/2008 8139 8172 9857
8/22/2008 8358 8393 10062
8/25/2008 8093 8125 9831
8/26/2008 8160 8194 9874
8/27/2008 8261 8294 9982
8/28/2008 8431 8467 10174
8/29/2008 8374 8409 10074
9/1/2008 8374 8409 10074
9/2/2008 8442 8478 10086
9/3/2008 8615 8654 10152
9/4/2008 8320 8356 9836
9/5/2008 8371 8408 9862
9/8/2008 8715 8756 10107
9/9/2008 8431 8471 9789
9/10/2008 8555 8598 9934
9/11/2008 8645 8689 10001
9/12/2008 8677 8722 10044
9/15/2008 8328 8372 9642
9/16/2008 8569 8614 9965
9/17/2008 8142 8183 9511
9/18/2008 8864 8911 10167
9/19/2008 9136 9186 10530
9/22/2008 8654 8701 10010
9/23/2008 8551 8597 9896
9/24/2008 8443 8489 9737
9/25/2008 8535 8580 9844
9/26/2008 8505 8550 9869
9/29/2008 8029 8068 9274
9/30/2008 8205 8249 9541
10/1/2008 8259 8303 9526
10/2/2008 7813 7850 9054
10/3/2008 7565 7600 8804
10/6/2008 7235 7268 8506
10/7/2008 6794 6821 8004
10/8/2008 6628 6654 7817
10/9/2008 5849 5867 7119
10/10/2008 6162 6183 7460
10/13/2008 6649 6675 8094
10/14/2008 6453 6479 7906
10/15/2008 5859 5879 7189
10/16/2008 6271 6293 7621
10/17/2008 6115 6137 7487
10/20/2008 6276 6297 7759
10/21/2008 6088 6109 7518
10/22/2008 5778 5795 7106
10/23/2008 5571 5586 6924
10/24/2008 5315 5329 6648
10/27/2008 5080 5091 6355
10/28/2008 5489 5503 6881
10/29/2008 5590 5605 7002
10/30/2008 5908 5926 7316
10/31/2008 6322 6343 7670
</Table>
AVERAGE ANNUAL TOTAL RETURNS FOR THE PERIOD ENDED OCTOBER 31, 2008
- --------------------------------------------------------------------------------
<Table>
<Caption>
SINCE INCEPTION
ONE YEAR (03/01/06)
-------- ---------------
RYDEX S&P SMALLCAP 600 PURE VALUE ETF............................. -36.48% -15.77%
S&P SMALLCAP 600/CITIGROUP PURE VALUE TOTAL RETURN INDEX.......... -36.51% -15.68%
S&P SMALLCAP 600 VALUE TOTAL RETURN INDEX......................... -30.96% -9.46%
</Table>
The returns presented above do not reflect the effect of taxes. Index returns
represent total returns. Past performance is no guarantee of future results.
13 ANNUAL REPORT
Rydex S&P SmallCap 600 Pure Value ETF
PORTFOLIO SUMMARY (Unaudited) As of October 31, 2008
- --------------------------------------------------------------------------------
TOP 10 HOLDINGS*
- --------------------------------------------------------------------------------
<Table>
<Caption>
DESCRIPTION % OF NET ASSETS
- ------------------------------------------------------------------------------------
FINISH LINE, INC. -- CLASS A 5.81%
FIRST BANCORP. 1.93%
JO-ANN STORES, INC. 1.73%
HAVERTY FURNITURE COS., INC. 1.71%
ARKANSAS BEST CORP. 1.68%
STANDEX INTERNATIONAL CORP. 1.60%
LACLEDE GROUP, INC. 1.59%
M/I HOMES, INC. 1.55%
WABASH NATIONAL CORP. 1.50%
LA-Z-BOY, INC. 1.45%
- ------------------------------------------------------------------------------------
</Table>
SECTOR ALLOCATIONS*
(PIE CHART)
<Table>
Consumer Discretionary 29.83
Financials 28.38
Industrials 15.00
Utilities 8.97
Materials 6.23
Information Technology 4.89
Consumer Staples 4.36
Health Care 2.13
Energy 0.21
</Table>
* The Fund's Top Ten Holdings are expressed as a percentage of net assets and
the Sector Allocations are expressed as a percentage of the Fund's investments
market value. These percentages may change over time.
14
RYDEX S&P SMALLCAP 600 PURE GROWTH ETF
MANAGER'S ANALYSIS (Unaudited)
- --------------------------------------------------------------------------------
For the year ended October 31, 2008, Rydex S&P SmallCap 600 Pure Growth ETF
returned -35.05%. Over the year, its benchmark, the S&P SmallCap 600/CitiGroup
Pure Growth Total Return Index, turned in a -35.14% return, which slightly
underperformed the counterpart, the S&P SmallCap 600 Growth Total Return Index,
whose return was -34.26%. The pure style's weighting to the information
technology sector was the biggest reason for the underperformance. Small-cap
pure value beat its traditional value counterpart two out of the four quarters
this year, including the fourth quarter, where it nevertheless fell almost 23%.
Pure style benefited from weighting in the consumer discretionary
sector -- especially the consumer durables and apparel industry -- which helped
the fund outperform its traditional (cap-weight) benchmark. Specifically, the
fund had a slight underweight to shoemaker Crocs, Inc (CROX), which was down a
dismal 96.64% for the year.
CUMULATIVE FUND PERFORMANCE: MARCH 1, 2006 - OCTOBER 31, 2008
(Performance Graph)
<Table>
<Caption>
RYDEX S&P S&P SMALLCAP S&P SMALLCAP
SMALLCAP 600 600/CITIGROUP PURE 600 GROWTH
PURE GROWTH GROWTH TOTAL TOTAL RETURN
ETF(A) RETURN INDEX(B) INDEX(C)
------------ ------------------ ------------
3/1/2006 10000 10001 10000
3/2/2006 9969 9971 9995
3/3/2006 9964 9965 9967
3/6/2006 9845 9847 9842
3/7/2006 9748 9749 9726
3/8/2006 9776 9778 9741
3/9/2006 9738 9738 9700
3/10/2006 9852 9855 9804
3/13/2006 9875 9878 9838
3/14/2006 9919 9919 9941
3/15/2006 10015 10017 10018
3/16/2006 10048 10051 10064
3/17/2006 10084 10087 10079
3/20/2006 10071 10074 10080
3/21/2006 10046 10049 10028
3/22/2006 10145 10147 10130
3/23/2006 10193 10197 10170
3/24/2006 10244 10247 10219
3/27/2006 10229 10232 10212
3/28/2006 10178 10182 10187
3/29/2006 10321 10324 10322
3/30/2006 10310 10315 10308
3/31/2006 10359 10361 10353
4/3/2006 10252 10256 10269
4/4/2006 10313 10317 10337
4/5/2006 10328 10333 10370
4/6/2006 10328 10332 10353
4/7/2006 10206 10211 10230
4/10/2006 10173 10177 10205
4/11/2006 10053 10058 10079
4/12/2006 10112 10116 10128
4/13/2006 10142 10148 10159
4/14/2006 10142 10148 10159
4/17/2006 10145 10151 10170
4/18/2006 10366 10371 10402
4/19/2006 10445 10450 10507
4/20/2006 10443 10448 10488
4/21/2006 10374 10379 10438
4/24/2006 10366 10371 10383
4/25/2006 10343 10349 10330
4/26/2006 10404 10410 10338
4/27/2006 10346 10353 10287
4/28/2006 10394 10402 10336
5/1/2006 10336 10343 10309
5/2/2006 10407 10413 10362
5/3/2006 10397 10403 10347
5/4/2006 10473 10481 10421
5/5/2006 10605 10613 10553
5/8/2006 10608 10616 10560
5/9/2006 10585 10592 10554
5/10/2006 10499 10506 10533
5/11/2006 10254 10262 10309
5/12/2006 10089 10098 10118
5/15/2006 10094 10102 10094
5/16/2006 10153 10161 10127
5/17/2006 10013 10020 9974
5/18/2006 9878 9884 9861
5/19/2006 9901 9908 9881
5/22/2006 9847 9853 9808
5/23/2006 9791 9798 9760
5/24/2006 9791 9797 9742
5/25/2006 9957 9964 9910
5/26/2006 10031 10039 9959
5/29/2006 10031 10039 9959
5/30/2006 9779 9787 9723
5/31/2006 9903 9912 9861
6/1/2006 10056 10065 10023
6/2/2006 10051 10061 10030
6/5/2006 9791 9799 9754
6/6/2006 9741 9746 9696
6/7/2006 9705 9712 9647
6/8/2006 9682 9689 9620
6/9/2006 9636 9642 9590
6/12/2006 9405 9410 9358
6/13/2006 9265 9268 9241
6/14/2006 9333 9338 9290
6/15/2006 9588 9595 9565
6/16/2006 9532 9536 9510
6/19/2006 9361 9367 9343
6/20/2006 9321 9325 9301
6/21/2006 9491 9497 9466
6/22/2006 9461 9466 9428
6/23/2006 9527 9534 9488
6/26/2006 9598 9606 9563
6/27/2006 9440 9444 9411
6/28/2006 9456 9462 9435
6/29/2006 9756 9767 9742
6/30/2006 9814 9825 9824
7/3/2006 9908 9919 9908
7/4/2006 9908 9919 9908
7/5/2006 9791 9802 9790
7/6/2006 9832 9844 9804
7/7/2006 9695 9706 9675
7/10/2006 9649 9661 9657
7/11/2006 9715 9726 9715
7/12/2006 9537 9549 9563
7/13/2006 9354 9364 9383
7/14/2006 9267 9278 9302
7/17/2006 9196 9207 9221
7/18/2006 9181 9192 9233
7/19/2006 9412 9423 9478
7/20/2006 9168 9178 9219
7/21/2006 9061 9072 9093
7/24/2006 9333 9345 9322
7/25/2006 9435 9448 9419
7/26/2006 9367 9380 9369
7/27/2006 9242 9254 9248
7/28/2006 9420 9434 9416
7/31/2006 9496 9511 9471
8/1/2006 9364 9376 9356
8/2/2006 9415 9428 9420
8/3/2006 9478 9491 9508
8/4/2006 9438 9453 9469
8/7/2006 9311 9324 9388
8/8/2006 9232 9245 9315
8/9/2006 9148 9160 9229
8/10/2006 9171 9183 9276
8/11/2006 9115 9126 9204
8/14/2006 9127 9141 9214
8/15/2006 9306 9319 9407
8/16/2006 9410 9423 9537
8/17/2006 9448 9461 9562
8/18/2006 9456 9471 9571
8/21/2006 9351 9366 9475
8/22/2006 9392 9406 9498
8/23/2006 9272 9286 9366
8/24/2006 9265 9279 9356
8/25/2006 9265 9278 9360
8/28/2006 9341 9355 9436
8/29/2006 9410 9424 9511
8/30/2006 9438 9453 9542
8/31/2006 9395 9410 9536
9/1/2006 9395 9410 9556
9/4/2006 9395 9410 9556
9/5/2006 9412 9429 9607
9/6/2006 9181 9195 9408
9/7/2006 9166 9180 9376
9/8/2006 9194 9208 9391
9/11/2006 9176 9190 9371
9/12/2006 9402 9419 9577
9/13/2006 9501 9517 9670
9/14/2006 9471 9487 9616
9/15/2006 9496 9514 9644
9/18/2006 9514 9531 9660
9/19/2006 9461 9478 9611
9/20/2006 9568 9584 9683
9/21/2006 9517 9535 9615
9/22/2006 9415 9431 9505
9/25/2006 9514 9531 9605
9/26/2006 9552 9570 9660
9/27/2006 9573 9590 9677
9/28/2006 9562 9581 9667
9/29/2006 9463 9482 9584
10/2/2006 9364 9380 9476
10/3/2006 9333 9351 9452
10/4/2006 9545 9563 9639
10/5/2006 9644 9664 9747
10/6/2006 9598 9617 9700
10/9/2006 9700 9721 9758
10/10/2006 9710 9730 9780
10/11/2006 9657 9678 9736
10/12/2006 9832 9853 9919
10/13/2006 9886 9909 9974
10/16/2006 9964 9986 10082
10/17/2006 9868 9890 9990
10/18/2006 9865 9888 9971
10/19/2006 9898 9920 10012
10/20/2006 9878 9902 9959
10/23/2006 9929 9952 9980
10/24/2006 9931 9955 9991
10/25/2006 9977 10003 10061
10/26/2006 10099 10123 10151
10/27/2006 9977 10002 10034
10/30/2006 9995 10018 10059
10/31/2006 9947 9971 10007
11/1/2006 9776 9800 9860
11/2/2006 9763 9789 9844
11/3/2006 9789 9812 9881
11/6/2006 9926 9952 10019
11/7/2006 9977 10003 10051
11/8/2006 10041 10066 10112
11/9/2006 9975 10000 10028
11/10/2006 10051 10078 10089
11/13/2006 10074 10100 10109
11/14/2006 10206 10234 10257
11/15/2006 10341 10368 10354
11/16/2006 10336 10364 10313
11/17/2006 10331 10358 10302
11/20/2006 10333 10362 10316
11/21/2006 10374 10401 10357
11/22/2006 10366 10395 10364
11/23/2006 10366 10395 10364
11/24/2006 10364 10392 10349
11/27/2006 10140 10168 10132
11/28/2006 10163 10191 10157
11/29/2006 10287 10317 10291
11/30/2006 10303 10331 10319
12/1/2006 10252 10281 10284
12/4/2006 10394 10425 10418
12/5/2006 10460 10491 10474
12/6/2006 10471 10501 10481
12/7/2006 10430 10460 10430
12/8/2006 10440 10471 10429
12/11/2006 10430 10460 10422
12/12/2006 10394 10424 10368
12/13/2006 10392 10422 10366
12/14/2006 10448 10478 10425
12/15/2006 10366 10396 10392
12/18/2006 10234 10264 10261
12/19/2006 10270 10299 10291
12/20/2006 10310 10342 10326
12/21/2006 10257 10289 10277
12/22/2006 10242 10272 10228
12/25/2006 10242 10272 10228
12/26/2006 10318 10348 10293
12/27/2006 10425 10457 10404
12/28/2006 10392 10423 10373
12/29/2006 10287 10319 10279
1/1/2007 10287 10319 10279
1/2/2007 10287 10319 10279
1/3/2007 10242 10273 10228
1/4/2007 10244 10278 10243
1/5/2007 10130 10163 10122
1/8/2007 10145 10178 10148
1/9/2007 10150 10182 10155
1/10/2007 10140 10173 10148
1/11/2007 10226 10258 10242
1/12/2007 10315 10350 10332
1/15/2007 10315 10350 10332
1/16/2007 10280 10314 10299
1/17/2007 10265 10299 10299
1/18/2007 10148 10181 10172
1/19/2007 10211 10245 10246
1/22/2007 10094 10127 10151
1/23/2007 10204 10238 10269
1/24/2007 10305 10340 10363
1/25/2007 10191 10225 10259
1/26/2007 10219 10254 10298
1/29/2007 10280 10314 10341
1/30/2007 10328 10364 10411
1/31/2007 10402 10436 10487
2/1/2007 10537 10574 10623
2/2/2007 10590 10626 10661
2/5/2007 10529 10567 10616
2/6/2007 10590 10628 10661
2/7/2007 10639 10675 10719
2/8/2007 10654 10690 10717
2/9/2007 10544 10580 10608
2/12/2007 10504 10541 10572
2/13/2007 10572 10611 10649
2/14/2007 10611 10649 10699
2/15/2007 10659 10697 10730
2/16/2007 10700 10737 10777
2/19/2007 10700 10737 10777
2/20/2007 10801 10840 10873
2/21/2007 10834 10873 10920
2/22/2007 10837 10877 10918
2/23/2007 10801 10841 10896
2/26/2007 10773 10812 10848
2/27/2007 10369 10406 10463
2/28/2007 10384 10421 10476
3/1/2007 10343 10380 10448
3/2/2007 10130 10166 10257
3/5/2007 9959 9995 10094
3/6/2007 10158 10196 10281
3/7/2007 10165 10202 10287
3/8/2007 10237 10275 10364
3/9/2007 10280 10318 10404
3/12/2007 10333 10372 10453
3/13/2007 10137 10174 10232
3/14/2007 10221 10261 10304
3/15/2007 10295 10335 10397
3/16/2007 10252 10290 10366
3/19/2007 10364 10404 10484
3/20/2007 10435 10474 10561
3/21/2007 10605 10647 10721
3/22/2007 10669 10710 10772
3/23/2007 10725 10766 10826
3/26/2007 10728 10770 10813
3/27/2007 10651 10692 10743
3/28/2007 10598 10639 10701
3/29/2007 10626 10668 10731
3/30/2007 10613 10656 10724
4/2/2007 10639 10682 10779
4/3/2007 10735 10777 10874
4/4/2007 10712 10754 10877
4/5/2007 10786 10830 10918
4/6/2007 10786 10830 10918
4/9/2007 10748 10791 10898
4/10/2007 10778 10822 10934
4/11/2007 10715 10758 10874
4/12/2007 10758 10803 10946
4/13/2007 10794 10838 10985
4/16/2007 10934 10979 11115
4/17/2007 10911 10955 11088
4/18/2007 10852 10896 11029
4/19/2007 10817 10861 10994
4/20/2007 10918 10964 11103
4/23/2007 10880 10925 11092
4/24/2007 10878 10923 11087
4/25/2007 10931 10977 11174
4/26/2007 10967 11012 11195
4/27/2007 10949 10995 11177
4/30/2007 10763 10810 10993
5/1/2007 10776 10822 11028
5/2/2007 10946 10992 11211
5/3/2007 10944 10990 11211
5/4/2007 11028 11076 11273
5/7/2007 11018 11065 11270
5/8/2007 10992 11041 11247
5/9/2007 11063 11112 11307
5/10/2007 10901 10947 11116
5/11/2007 10990 11038 11228
5/14/2007 10929 10978 11168
5/15/2007 10837 10885 11085
5/16/2007 10918 10967 11152
5/17/2007 10860 10908 11113
5/18/2007 10959 11007 11204
5/21/2007 11104 11153 11342
5/22/2007 11175 11225 11405
5/23/2007 11112 11162 11353
5/24/2007 10936 10986 11186
5/25/2007 11033 11082 11279
5/28/2007 11033 11082 11279
5/29/2007 11117 11167 11354
5/30/2007 11203 11254 11444
5/31/2007 11259 11311 11503
6/1/2007 11313 11365 11577
6/4/2007 11346 11399 11611
6/5/2007 11280 11332 11532
6/6/2007 11157 11210 11407
6/7/2007 10979 11030 11199
6/8/2007 11096 11147 11314
6/11/2007 11068 11119 11297
6/12/2007 10982 11032 11192
6/13/2007 11099 11150 11323
6/14/2007 11173 11224 11408
6/15/2007 11297 11351 11532
6/18/2007 11307 11362 11520
6/19/2007 11340 11394 11564
6/20/2007 11231 11284 11437
6/21/2007 11259 11312 11477
6/22/2007 11162 11214 11390
6/25/2007 11129 11181 11316
6/26/2007 11068 11122 11256
6/27/2007 11256 11312 11419
6/28/2007 11287 11342 11429
6/29/2007 11228 11282 11391
7/2/2007 11328 11383 11509
7/3/2007 11358 11415 11546
7/4/2007 11358 11415 11546
7/5/2007 11394 11449 11584
7/6/2007 11396 11454 11602
7/9/2007 11440 11498 11638
7/10/2007 11262 11318 11449
7/11/2007 11340 11396 11529
7/12/2007 11486 11544 11691
7/13/2007 11496 11554 11707
7/16/2007 11432 11489 11641
7/17/2007 11432 11490 11659
7/18/2007 11412 11470 11625
7/19/2007 11468 11527 11712
7/20/2007 11318 11374 11537
7/23/2007 11325 11383 11545
7/24/2007 11071 11127 11290
7/25/2007 11050 11107 11276
7/26/2007 10821 10876 11051
7/27/2007 10722 10776 10938
7/30/2007 10786 10840 11028
7/31/2007 10664 10716 10925
8/1/2007 10669 10721 10965
8/2/2007 10796 10850 11103
8/3/2007 10501 10551 10790
8/6/2007 10684 10736 10959
8/7/2007 10747 10801 11069
8/8/2007 10893 10946 11231
8/9/2007 10801 10855 11089
8/10/2007 10796 10851 11084
8/13/2007 10725 10777 11023
8/14/2007 10562 10615 10852
8/15/2007 10473 10524 10723
8/16/2007 10582 10634 10841
8/17/2007 10798 10852 11087
8/20/2007 10842 10895 11128
8/21/2007 10842 10897 11140
8/22/2007 10943 10998 11260
8/23/2007 10786 10840 11125
8/24/2007 10931 10985 11286
8/27/2007 10821 10874 11174
8/28/2007 10554 10603 10895
8/29/2007 10758 10809 11122
8/30/2007 10730 10781 11093
8/31/2007 10849 10902 11229
9/3/2007 10849 10902 11229
9/4/2007 10923 10979 11312
9/5/2007 10885 10940 11241
9/6/2007 10915 10972 11273
9/7/2007 10742 10794 11080
9/10/2007 10697 10746 11019
9/11/2007 10852 10907 11195
9/12/2007 10831 10885 11174
9/13/2007 10847 10902 11195
9/14/2007 10923 10979 11253
9/17/2007 10814 10868 11152
9/18/2007 11142 11202 11509
9/19/2007 11254 11317 11634
9/20/2007 11165 11226 11552
9/21/2007 11195 11259 11568
9/24/2007 11086 11146 11481
9/25/2007 11091 11153 11473
9/26/2007 11162 11225 11560
9/27/2007 11216 11280 11625
9/28/2007 11132 11194 11542
10/1/2007 11374 11440 11790
10/2/2007 11455 11523 11872
10/3/2007 11396 11463 11809
10/4/2007 11450 11519 11853
10/5/2007 11626 11695 12038
10/8/2007 11531 11600 11977
10/9/2007 11610 11680 12036
10/10/2007 11613 11682 12034
10/11/2007 11447 11514 11879
10/12/2007 11506 11573 11956
10/15/2007 11371 11436 11832
10/16/2007 11310 11374 11745
10/17/2007 11290 11355 11749
10/18/2007 11282 11346 11730
10/19/2007 10961 11025 11398
10/22/2007 11139 11204 11525
10/23/2007 11259 11325 11654
10/24/2007 11134 11198 11555
10/25/2007 11101 11166 11506
10/26/2007 11315 11380 11727
10/29/2007 11325 11393 11751
10/30/2007 11269 11336 11662
10/31/2007 11432 11499 11836
11/1/2007 11040 11098 11341
11/2/2007 11048 11101 11368
11/5/2007 10941 10995 11238
11/6/2007 11027 11097 11381
11/7/2007 10727 10785 11039
11/8/2007 10722 10786 11075
11/9/2007 10554 10641 10931
11/12/2007 10480 10571 10827
11/13/2007 10786 10880 11135
11/14/2007 10676 10768 11039
11/15/2007 10554 10643 10916
11/16/2007 10554 10640 10910
11/19/2007 10350 10423 10665
11/20/2007 10368 10437 10669
11/21/2007 10223 10296 10531
11/22/2007 10223 10296 10531
11/23/2007 10386 10463 10721
11/26/2007 10223 10281 10515
11/27/2007 10292 10350 10577
11/28/2007 10613 10678 10894
11/29/2007 10564 10629 10871
11/30/2007 10592 10660 10909
12/3/2007 10546 10614 10859
12/4/2007 10513 10579 10814
12/5/2007 10577 10644 10924
12/6/2007 10824 10892 11195
12/7/2007 10821 10890 11171
12/10/2007 10900 10969 11245
12/11/2007 10625 10694 10933
12/12/2007 10714 10784 10999
12/13/2007 10712 10780 10955
12/14/2007 10508 10576 10745
12/17/2007 10335 10401 10546
12/18/2007 10506 10572 10698
12/19/2007 10524 10590 10717
12/20/2007 10613 10681 10845
12/21/2007 10692 10762 11062
12/24/2007 10758 10809 11166
12/25/2007 10758 10809 11166
12/26/2007 10816 10874 11193
12/27/2007 10539 10594 10934
12/28/2007 10521 10575 10949
12/31/2007 10419 10472 10855
1/1/2008 10419 10472 10855
1/2/2008 10297 10350 10752
1/3/2008 10147 10198 10686
1/4/2008 9801 9851 10347
1/7/2008 9821 9872 10361
1/8/2008 9605 9655 10133
1/9/2008 9674 9724 10233
1/10/2008 9757 9808 10291
1/11/2008 9597 9646 10098
1/14/2008 9737 9787 10233
1/15/2008 9534 9582 10045
1/16/2008 9602 9653 10051
1/17/2008 9394 9441 9798
1/18/2008 9297 9345 9737
1/21/2008 9297 9345 9737
1/22/2008 9325 9371 9691
1/23/2008 9602 9652 9900
1/24/2008 9635 9686 9958
1/25/2008 9544 9595 9878
1/28/2008 9724 9777 10045
1/29/2008 9826 9879 10097
1/30/2008 9702 9754 9968
1/31/2008 9946 10001 10197
2/1/2008 10195 10254 10446
2/4/2008 10078 10136 10324
2/5/2008 9796 9850 10041
2/6/2008 9628 9679 9913
2/7/2008 9735 9788 10042
2/8/2008 9694 9748 10044
2/11/2008 9684 9736 10095
2/12/2008 9750 9803 10153
2/13/2008 9976 10033 10355
2/14/2008 9747 9802 10154
2/15/2008 9686 9739 10100
2/18/2008 9686 9739 10100
2/19/2008 9684 9738 10125
2/20/2008 9760 9814 10213
2/21/2008 9574 9627 10062
2/22/2008 9539 9591 10052
2/25/2008 9702 9757 10249
2/26/2008 9819 9871 10350
2/27/2008 9834 9887 10325
2/28/2008 9681 9730 10231
2/29/2008 9414 9490 9963
3/3/2008 9391 9428 9955
3/4/2008 9368 9405 9904
3/5/2008 9411 9451 9952
3/6/2008 9177 9208 9733
3/7/2008 9119 9149 9647
3/10/2008 8928 8952 9426
3/11/2008 9233 9267 9735
3/12/2008 9170 9200 9655
3/13/2008 9348 9383 9833
3/14/2008 9144 9174 9623
3/17/2008 8946 8976 9408
3/18/2008 9315 9345 9833
3/19/2008 9106 9137 9569
3/20/2008 9319 9352 9779
3/21/2008 9319 9352 9779
3/24/2008 9645 9681 10069
3/25/2008 9708 9744 10133
3/26/2008 9678 9712 10119
3/27/2008 9530 9563 9972
3/28/2008 9400 9433 9879
3/31/2008 9449 9482 9932
4/1/2008 9766 9802 10216
4/2/2008 9817 9853 10257
4/3/2008 9860 9895 10286
4/4/2008 9840 9876 10295
4/7/2008 9822 9859 10265
4/8/2008 9830 9866 10271
4/9/2008 9658 9694 10119
4/10/2008 9748 9783 10210
4/11/2008 9508 9542 9961
4/14/2008 9467 9503 9945
4/15/2008 9497 9534 9991
4/16/2008 9748 9785 10265
4/17/2008 9656 9693 10186
4/18/2008 9855 9893 10391
4/21/2008 9791 9829 10336
4/22/2008 9625 9660 10171
4/23/2008 9699 9736 10235
4/24/2008 9801 9840 10360
4/25/2008 9873 9911 10505
4/28/2008 9939 9978 10556
4/29/2008 9855 9892 10466
4/30/2008 9822 9860 10465
5/1/2008 9968 10007 10583
5/2/2008 9893 9933 10547
5/5/2008 9845 9884 10523
5/6/2008 9876 9915 10581
5/7/2008 9740 9779 10448
5/8/2008 9745 9784 10488
5/9/2008 9755 9795 10481
5/12/2008 9914 9954 10623
5/13/2008 9988 10027 10717
5/14/2008 10014 10055 10720
5/15/2008 10121 10161 10834
5/16/2008 10108 10149 10844
5/19/2008 10057 10099 10815
5/20/2008 9996 10037 10766
5/21/2008 9827 9868 10614
5/22/2008 9911 9952 10685
5/23/2008 9817 9857 10587
5/26/2008 9817 9857 10587
5/27/2008 10011 10052 10723
5/28/2008 10052 10095 10790
5/29/2008 10180 10222 10870
5/30/2008 10200 10244 10952
6/2/2008 10065 10108 10842
6/3/2008 10037 10079 10818
6/4/2008 10116 10159 10870
6/5/2008 10336 10381 11135
6/6/2008 10049 10092 10838
6/9/2008 9996 10036 10830
6/10/2008 9985 10028 10772
6/11/2008 9761 9801 10582
6/12/2008 9776 9816 10583
6/13/2008 9952 9994 10784
6/16/2008 10049 10093 10901
6/17/2008 10026 10070 10888
6/18/2008 9945 9987 10800
6/19/2008 10047 10091 10883
6/20/2008 9915 9956 10742
6/23/2008 9839 9873 10687
6/24/2008 9657 9691 10504
6/25/2008 9787 9822 10602
6/26/2008 9552 9583 10390
6/27/2008 9476 9506 10359
6/30/2008 9338 9366 10276
7/1/2008 9330 9360 10269
7/2/2008 9118 9144 9991
7/3/2008 9044 9071 9885
7/4/2008 9044 9071 9885
7/7/2008 8951 8979 9782
7/8/2008 9230 9257 10036
7/9/2008 9031 9058 9847
7/10/2008 9018 9046 9906
7/11/2008 9036 9063 9929
7/14/2008 9018 9045 9854
7/15/2008 9005 9032 9798
7/16/2008 9320 9349 10075
7/17/2008 9448 9478 10159
7/18/2008 9422 9452 10148
7/21/2008 9481 9512 10199
7/22/2008 9759 9791 10413
7/23/2008 9762 9794 10420
7/24/2008 9506 9539 10192
7/25/2008 9557 9591 10266
7/28/2008 9348 9385 10109
7/29/2008 9624 9660 10326
7/30/2008 9678 9718 10410
7/31/2008 9647 9686 10349
8/1/2008 9639 9677 10356
8/4/2008 9491 9531 10198
8/5/2008 9747 9789 10479
8/6/2008 9826 9866 10563
8/7/2008 9749 9791 10460
8/8/2008 10007 10047 10715
8/11/2008 10281 10325 10928
8/12/2008 10181 10224 10845
8/13/2008 10194 10238 10873
8/14/2008 10273 10318 10946
8/15/2008 10291 10335 10953
8/18/2008 10163 10209 10794
8/19/2008 9990 10035 10641
8/20/2008 10007 10053 10659
8/21/2008 9946 9991 10603
8/22/2008 10089 10134 10746
8/25/2008 9839 9882 10519
8/26/2008 9877 9922 10566
8/27/2008 9995 10039 10691
8/28/2008 10174 10221 10843
8/29/2008 10048 10094 10730
9/1/2008 10048 10094 10730
9/2/2008 10107 10152 10707
9/3/2008 10138 10185 10699
9/4/2008 9864 9908 10401
9/5/2008 9877 9923 10404
9/8/2008 10089 10136 10565
9/9/2008 9813 9858 10233
9/10/2008 9926 9971 10382
9/11/2008 9974 10020 10422
9/12/2008 9895 9941 10408
9/15/2008 9609 9654 10048
9/16/2008 9805 9852 10301
9/17/2008 9476 9523 9930
9/18/2008 10079 10128 10453
9/19/2008 10412 10459 10785
9/22/2008 10001 10049 10414
9/23/2008 9855 9903 10263
9/24/2008 9709 9755 10085
9/25/2008 9811 9857 10186
9/26/2008 9847 9894 10186
9/29/2008 9323 9367 9613
9/30/2008 9443 9489 9823
10/1/2008 9377 9421 9728
10/2/2008 8942 8983 9212
10/3/2008 8681 8719 8985
10/6/2008 8336 8372 8671
10/7/2008 7932 7965 8221
10/8/2008 7788 7820 8073
10/9/2008 7210 7239 7469
10/10/2008 7410 7440 7700
10/13/2008 7962 7996 8346
10/14/2008 7760 7791 8151
10/15/2008 7054 7079 7379
10/16/2008 7418 7447 7780
10/17/2008 7310 7339 7676
10/20/2008 7589 7621 7991
10/21/2008 7377 7407 7766
10/22/2008 6998 7025 7331
10/23/2008 6793 6820 7124
10/24/2008 6538 6563 6868
10/27/2008 6259 6283 6573
10/28/2008 6663 6690 7006
10/29/2008 6839 6869 7190
10/30/2008 7141 7172 7482
10/31/2008 7425 7459 7781
</Table>
AVERAGE ANNUAL TOTAL RETURNS FOR THE PERIOD ENDED OCTOBER 31, 2008
- --------------------------------------------------------------------------------
<Table>
<Caption>
SINCE INCEPTION
ONE YEAR (03/01/06)
-------- ---------------
RYDEX S&P SMALLCAP 600 PURE GROWTH ETF............................ -35.05% -10.55%
S&P SMALLCAP 600/CITIGROUP PURE GROWTH TOTAL RETURN INDEX......... -35.14% -10.40%
S&P SMALLCAP 600 GROWTH TOTAL RETURN INDEX........................ -34.26% -8.97%
</Table>
The returns presented above do not reflect the effect of taxes. Index returns
represent total returns. Past performance is no guarantee of future results.
15 ANNUAL REPORT
Rydex S&P SmallCap 600 Pure Growth ETF
PORTFOLIO SUMMARY (Unaudited) As of October 31, 2008
- --------------------------------------------------------------------------------
TOP 10 HOLDINGS*
- --------------------------------------------------------------------------------
<Table>
<Caption>
DESCRIPTION % OF NET ASSETS
- ------------------------------------------------------------------------------------
LHC GROUP, INC. 2.64%
PETMED EXPRESS, INC. 2.29%
GREENHILL & CO., INC. 2.11%
QUALITY SYSTEMS, INC. 1.67%
MARTEK BIOSCIENCES CORP. 1.67%
WILSHIRE BANCORP, INC. 1.63%
WEBSENSE, INC. 1.56%
PANERA BREAD CO. -- CLASS A 1.54%
CATALYST HEALTH SOLUTIONS, INC. 1.42%
J2 GLOBAL COMMUNICATIONS, INC. 1.38%
- ------------------------------------------------------------------------------------
</Table>
SECTOR ALLOCATIONS*
(PIE CHART)
<Table>
Consumer Discretionary 27.33
Information Technology 21.91
Health Care 18.13
Financials 11.90
Industrials 8.22
Energy 5.47
Materials 3.65
Consumer Staples 3.39
</Table>
* The Fund's Top Ten Holdings are expressed as a percentage of net assets and
the Sector Allocations are expressed as a percentage of the Fund's investments
market value. These percentages may change over time.
16
RYDEX S&P EQUAL WEIGHT CONSUMER DISCRETIONARY ETF
MANAGER'S ANALYSIS (Unaudited)
- --------------------------------------------------------------------------------
For the one-year period ended October 31, 2008, Rydex S&P Equal Weight Consumer
Discretionary ETF returned -43.27% compared to its benchmark S&P Equal Weight
Consumer Discretionary Total Return Index and the capitalization-weighted S&P
Consumer Discretionary Index, which returned -43.13% and -37.33% respectively
for the same time period.
Both the equal-weight and cap-weight consumer discretionary indices benefited
from exposure to diversified consumer services. At the same time, the media
industry was the largest detractor of returns for the two indices. The S&P Equal
Weight Consumer Discretionary Index's greater exposure to the specialty retail,
hotels/restaurants and leisure industries, likewise, contributed significantly
to its underperformance. Known for names such as Home Depot (HD), Lowe's (LOW),
Office Depot (ODP) and Autonation (AN), the retailing industry was hit hard by
the credit crisis, losing more than 20%.
CUMULATIVE FUND PERFORMANCE: NOVEMBER 1, 2006 - OCTOBER 31, 2008
(Performance Graph)
<Table>
<Caption>
S&P 500
RYDEX S&P EQUAL WEIGHT
EQUAL WEIGHT S&P 500 CONSUMER DISCRETIONARY
CONSUMER DISCRETIONARY TOTAL RETURN TOTAL RETURN
ETF(A) INDEX(B) INDEX(C)
---------------------- ------------ ----------------------
11/1/2006 10000 10000 10001
11/2/2006 9980 9999 9979
11/3/2006 9913 9978 9912
11/4/2006 9913 9978 9912
11/5/2006 9913 9978 9912
11/6/2006 10056 10091 10055
11/7/2006 10069 10114 10069
11/8/2006 10120 10137 10122
11/9/2006 10076 10085 10075
11/10/2006 10165 10104 10165
11/11/2006 10165 10104 10165
11/12/2006 10165 10104 10165
11/13/2006 10173 10132 10174
11/14/2006 10298 10198 10299
11/15/2006 10358 10225 10360
11/16/2006 10434 10249 10436
11/17/2006 10387 10259 10389
11/18/2006 10387 10259 10389
11/19/2006 10387 10259 10389
11/20/2006 10342 10254 10343
11/21/2006 10389 10272 10390
11/22/2006 10445 10297 10445
11/23/2006 10445 10297 10445
11/24/2006 10398 10260 10398
11/25/2006 10398 10260 10398
11/26/2006 10398 10260 10398
11/27/2006 10225 10120 10225
11/28/2006 10211 10158 10212
11/29/2006 10302 10256 10303
11/30/2006 10313 10264 10314
12/1/2006 10267 10236 10267
12/2/2006 10267 10236 10267
12/3/2006 10267 10236 10267
12/4/2006 10405 10327 10405
12/5/2006 10469 10368 10471
12/6/2006 10465 10357 10466
12/7/2006 10394 10317 10395
12/8/2006 10398 10336 10400
12/9/2006 10398 10336 10400
12/10/2006 10398 10336 10400
12/11/2006 10425 10359 10428
12/12/2006 10373 10349 10375
12/13/2006 10422 10363 10425
12/14/2006 10525 10453 10529
12/15/2006 10478 10465 10481
12/16/2006 10478 10465 10481
12/17/2006 10478 10465 10481
12/18/2006 10438 10431 10441
12/19/2006 10414 10454 10417
12/20/2006 10438 10440 10442
12/21/2006 10389 10404 10393
12/22/2006 10389 10350 10395
12/23/2006 10389 10350 10395
12/24/2006 10389 10350 10395
12/25/2006 10389 10350 10395
12/26/2006 10407 10395 10412
12/27/2006 10495 10470 10500
12/28/2006 10469 10455 10474
12/29/2006 10431 10408 10436
12/30/2006 10431 10408 10436
12/31/2006 10431 10408 10436
1/1/2007 10431 10408 10436
1/2/2007 10431 10408 10436
1/3/2007 10449 10398 10455
1/4/2007 10451 10411 10458
1/5/2007 10375 10347 10381
1/6/2007 10375 10347 10381
1/7/2007 10375 10347 10381
1/8/2007 10400 10373 10407
1/9/2007 10469 10368 10477
1/10/2007 10509 10389 10517
1/11/2007 10638 10455 10646
1/12/2007 10660 10506 10669
1/13/2007 10660 10506 10669
1/14/2007 10660 10506 10669
1/15/2007 10660 10506 10669
1/16/2007 10676 10515 10686
1/17/2007 10680 10506 10690
1/18/2007 10720 10475 10731
1/19/2007 10758 10506 10768
1/20/2007 10758 10506 10768
1/21/2007 10758 10506 10768
1/22/2007 10702 10451 10712
1/23/2007 10725 10488 10735
1/24/2007 10780 10577 10792
1/25/2007 10633 10458 10645
1/26/2007 10602 10445 10613
1/27/2007 10602 10445 10613
1/28/2007 10602 10445 10613
1/29/2007 10622 10435 10633
1/30/2007 10642 10495 10654
1/31/2007 10767 10566 10780
2/1/2007 10867 10625 10879
2/2/2007 10898 10643 10910
2/3/2007 10898 10643 10910
2/4/2007 10898 10643 10910
2/5/2007 10872 10634 10884
2/6/2007 10918 10641 10931
2/7/2007 10965 10660 10978
2/8/2007 10974 10648 10988
2/9/2007 10872 10573 10885
2/10/2007 10872 10573 10885
2/11/2007 10872 10573 10885
2/12/2007 10820 10539 10835
2/13/2007 10903 10621 10916
2/14/2007 10974 10705 10989
2/15/2007 11016 10717 11030
2/16/2007 10996 10708 11011
2/17/2007 10996 10708 11011
2/18/2007 10996 10708 11011
2/19/2007 10996 10708 11011
2/20/2007 11083 10739 11098
2/21/2007 11050 10724 11065
2/22/2007 11019 10717 11034
2/23/2007 10981 10680 10996
2/24/2007 10981 10680 10996
2/25/2007 10981 10680 10996
2/26/2007 10918 10668 10933
2/27/2007 10560 10299 10574
2/28/2007 10593 10359 10609
3/1/2007 10558 10332 10572
3/2/2007 10455 10215 10470
3/3/2007 10455 10215 10470
3/4/2007 10455 10215 10470
3/5/2007 10310 10119 10324
3/6/2007 10462 10276 10478
3/7/2007 10471 10254 10486
3/8/2007 10566 10327 10583
3/9/2007 10584 10334 10600
3/10/2007 10584 10334 10600
3/11/2007 10584 10334 10600
3/12/2007 10611 10362 10628
3/13/2007 10395 10154 10411
3/14/2007 10395 10223 10411
3/15/2007 10457 10261 10474
3/16/2007 10404 10222 10421
3/17/2007 10404 10222 10421
3/18/2007 10404 10222 10421
3/19/2007 10511 10333 10530
3/20/2007 10589 10399 10606
3/21/2007 10747 10577 10767
3/22/2007 10725 10573 10743
3/23/2007 10752 10584 10772
3/24/2007 10752 10584 10772
3/25/2007 10752 10584 10772
3/26/2007 10723 10595 10741
3/27/2007 10645 10529 10664
3/28/2007 10544 10448 10565
3/29/2007 10556 10487 10575
3/30/2007 10567 10475 10587
3/31/2007 10567 10475 10587
4/1/2007 10567 10475 10587
4/2/2007 10616 10502 10636
4/3/2007 10725 10602 10745
4/4/2007 10716 10614 10736
4/5/2007 10765 10649 10786
4/6/2007 10765 10649 10786
4/7/2007 10765 10649 10786
4/8/2007 10765 10649 10786
4/9/2007 10783 10655 10805
4/10/2007 10783 10684 10806
4/11/2007 10712 10615 10734
4/12/2007 10781 10681 10803
4/13/2007 10765 10718 10788
4/14/2007 10765 10718 10788
4/15/2007 10765 10718 10788
4/16/2007 10895 10833 10917
4/17/2007 10935 10855 10958
4/18/2007 10941 10863 10965
4/19/2007 10892 10850 10915
4/20/2007 11004 10951 11028
4/21/2007 11004 10951 11028
4/22/2007 11004 10951 11028
4/23/2007 10977 10926 11002
4/24/2007 10979 10922 11004
4/25/2007 11082 11034 11107
4/26/2007 11151 11026 11177
4/27/2007 11104 11025 11129
4/28/2007 11104 11025 11129
4/29/2007 11104 11025 11129
4/30/2007 10953 10939 10977
5/1/2007 11024 10968 11049
5/2/2007 11118 11040 11145
5/3/2007 11089 11091 11115
5/4/2007 11100 11115 11125
5/5/2007 11100 11115 11125
5/6/2007 11100 11115 11125
5/7/2007 11100 11144 11126
5/8/2007 11084 11132 11110
5/9/2007 11156 11171 11183
5/10/2007 11004 11017 11031
5/11/2007 11055 11124 11083
5/12/2007 11055 11124 11083
5/13/2007 11055 11124 11083
5/14/2007 11031 11105 11059
5/15/2007 10975 11091 11002
5/16/2007 11035 11190 11062
5/17/2007 11049 11181 11078
5/18/2007 11160 11255 11188
5/19/2007 11160 11255 11188
5/20/2007 11160 11255 11188
5/21/2007 11205 11272 11234
5/22/2007 11236 11265 11266
5/23/2007 11223 11252 11252
5/24/2007 11136 11144 11164
5/25/2007 11160 11205 11189
5/26/2007 11160 11205 11189
5/27/2007 11160 11205 11189
5/28/2007 11160 11205 11189
5/29/2007 11173 11224 11204
5/30/2007 11269 11318 11299
5/31/2007 11292 11321 11323
6/1/2007 11379 11363 11411
6/2/2007 11379 11363 11411
6/3/2007 11379 11363 11411
6/4/2007 11417 11384 11450
6/5/2007 11345 11324 11378
6/6/2007 11223 11226 11255
6/7/2007 11013 11030 11044
6/8/2007 11147 11155 11178
6/9/2007 11147 11155 11178
6/10/2007 11147 11155 11178
6/11/2007 11120 11166 11150
6/12/2007 10991 11047 11020
6/13/2007 11127 11217 11158
6/14/2007 11160 11272 11191
6/15/2007 11213 11345 11245
6/16/2007 11213 11345 11245
6/17/2007 11213 11345 11245
6/18/2007 11189 11332 11222
6/19/2007 11180 11352 11214
6/20/2007 11091 11197 11127
6/21/2007 11097 11269 11135
6/22/2007 11006 11124 11044
6/23/2007 11006 11124 11044
6/24/2007 11006 11124 11044
6/25/2007 10959 11088 10997
6/26/2007 10901 11053 10938
6/27/2007 11015 11154 11051
6/28/2007 11026 11150 11064
6/29/2007 10997 11133 11035
6/30/2007 10997 11133 11035
7/1/2007 10997 11133 11035
7/2/2007 11077 11252 11115
7/3/2007 11084 11294 11123
7/4/2007 11084 11294 11123
7/5/2007 11153 11298 11193
7/6/2007 11252 11339 11291
7/7/2007 11252 11339 11291
7/8/2007 11252 11339 11291
7/9/2007 11202 11349 11242
7/10/2007 10968 11188 11008
7/11/2007 11001 11254 11040
7/12/2007 11153 11468 11195
7/13/2007 11189 11504 11230
7/14/2007 11189 11504 11230
7/15/2007 11189 11504 11230
7/16/2007 11129 11482 11169
7/17/2007 11100 11481 11142
7/18/2007 11055 11458 11097
7/19/2007 11124 11510 11166
7/20/2007 10948 11369 10990
7/21/2007 10948 11369 10990
7/22/2007 10948 11369 10990
7/23/2007 10923 11425 10963
7/24/2007 10704 11199 10744
7/25/2007 10691 11251 10730
7/26/2007 10376 10988 10414
7/27/2007 10213 10814 10251
7/28/2007 10213 10814 10251
7/29/2007 10213 10814 10251
7/30/2007 10316 10925 10355
7/31/2007 10202 10787 10240
8/1/2007 10197 10866 10235
8/2/2007 10291 10916 10331
8/3/2007 9978 10627 10017
8/4/2007 9978 10627 10017
8/5/2007 9978 10627 10017
8/6/2007 10137 10884 10175
8/7/2007 10193 10951 10232
8/8/2007 10300 11109 10340
8/9/2007 10007 10781 10048
8/10/2007 10030 10786 10070
8/11/2007 10030 10786 10070
8/12/2007 10030 10786 10070
8/13/2007 10050 10782 10089
8/14/2007 9777 10587 9816
8/15/2007 9612 10443 9650
8/16/2007 9619 10477 9656
8/17/2007 9804 10735 9843
8/18/2007 9804 10735 9843
8/19/2007 9804 10735 9843
8/20/2007 9844 10732 9885
8/21/2007 9900 10744 9940
8/22/2007 10027 10870 10067
8/23/2007 9985 10858 10025
8/24/2007 10121 10985 10163
8/25/2007 10121 10985 10163
8/26/2007 10121 10985 10163
8/27/2007 9989 10892 10029
8/28/2007 9730 10636 9769
8/29/2007 9983 10872 10025
8/30/2007 9934 10827 9974
8/31/2007 10081 10949 10123
9/1/2007 10081 10949 10123
9/2/2007 10081 10949 10123
9/3/2007 10081 10949 10123
9/4/2007 10108 11064 10151
9/5/2007 9969 10942 10011
9/6/2007 9972 10990 10015
9/7/2007 9744 10804 9784
9/8/2007 9744 10804 9784
9/9/2007 9744 10804 9784
9/10/2007 9639 10791 9679
9/11/2007 9748 10938 9790
9/12/2007 9717 10942 9758
9/13/2007 9831 11034 9874
9/14/2007 9891 11037 9935
9/15/2007 9891 11037 9935
9/16/2007 9891 11037 9935
9/17/2007 9829 10980 9871
9/18/2007 10188 11301 10234
9/19/2007 10249 11370 10296
9/20/2007 10065 11296 10111
9/21/2007 10047 11348 10091
9/22/2007 10047 11348 10091
9/23/2007 10047 11348 10091
9/24/2007 9944 11289 9992
9/25/2007 9826 11285 9875
9/26/2007 9902 11348 9952
9/27/2007 9922 11393 9971
9/28/2007 9929 11359 9979
9/29/2007 9929 11359 9979
9/30/2007 9929 11359 9979
10/1/2007 10070 11510 10119
10/2/2007 10164 11507 10210
10/3/2007 10215 11457 10259
10/4/2007 10128 11481 10174
10/5/2007 10320 11594 10366
10/6/2007 10320 11594 10366
10/7/2007 10320 11594 10366
10/8/2007 10260 11557 10308
10/9/2007 10260 11650 10310
10/10/2007 10276 11631 10326
10/11/2007 10195 11572 10245
10/12/2007 10188 11627 10241
10/13/2007 10188 11627 10241
10/14/2007 10188 11627 10241
10/15/2007 10027 11530 10079
10/16/2007 9949 11454 10004
10/17/2007 9931 11475 9986
10/18/2007 9859 11467 9929
10/19/2007 9618 11173 9692
10/20/2007 9618 11173 9692
10/21/2007 9618 11173 9692
10/22/2007 9761 11216 9819
10/23/2007 9776 11315 9842
10/24/2007 9770 11287 9835
10/25/2007 9745 11276 9809
10/26/2007 9857 11432 9922
10/27/2007 9857 11432 9922
10/28/2007 9857 11432 9922
10/29/2007 9900 11476 9965
10/30/2007 9906 11402 9971
10/31/2007 9960 11539 10027
11/1/2007 9658 11237 9723
11/2/2007 9609 11247 9674
11/3/2007 9609 11247 9674
11/4/2007 9609 11247 9674
11/5/2007 9481 11192 9545
11/6/2007 9528 11327 9594
11/7/2007 9300 11000 9364
11/8/2007 9309 10994 9375
11/9/2007 9152 10837 9213
11/10/2007 9152 10837 9213
11/11/2007 9152 10837 9213
11/12/2007 9163 10729 9224
11/13/2007 9454 11045 9515
11/14/2007 9273 10970 9333
11/15/2007 9170 10825 9232
11/16/2007 9143 10882 9206
11/17/2007 9143 10882 9206
11/18/2007 9143 10882 9206
11/19/2007 8890 10692 8951
11/20/2007 8872 10741 8934
11/21/2007 8783 10571 8842
11/22/2007 8783 10571 8842
11/23/2007 8957 10750 9019
11/24/2007 8957 10750 9019
11/25/2007 8957 10750 9019
11/26/2007 8740 10500 8800
11/27/2007 8834 10658 8894
11/28/2007 9116 10966 9181
11/29/2007 9078 10972 9142
11/30/2007 9206 11057 9271
12/1/2007 9206 11057 9271
12/2/2007 9206 11057 9271
12/3/2007 9141 10992 9205
12/4/2007 9109 10920 9173
12/5/2007 9174 11092 9241
12/6/2007 9344 11260 9412
12/7/2007 9376 11240 9445
12/8/2007 9376 11240 9445
12/9/2007 9376 11240 9445
12/10/2007 9418 11325 9489
12/11/2007 9069 11039 9133
12/12/2007 9076 11107 9142
12/13/2007 9040 11121 9105
12/14/2007 8857 10969 8919
12/15/2007 8857 10969 8919
12/16/2007 8857 10969 8919
12/17/2007 8792 10804 8852
12/18/2007 8861 10872 8923
12/19/2007 8792 10857 8852
12/20/2007 8801 10914 8863
12/21/2007 8877 11097 8941
12/22/2007 8877 11097 8941
12/23/2007 8877 11097 8941
12/24/2007 8980 11187 9048
12/25/2007 8980 11187 9048
12/26/2007 8904 11196 8971
12/27/2007 8780 11040 8843
12/28/2007 8745 11056 8805
12/29/2007 8745 11056 8805
12/30/2007 8745 11056 8805
12/31/2007 8749 10980 8810
1/1/2008 8749 10980 8810
1/2/2008 8551 10824 8606
1/3/2008 8385 10824 8435
1/4/2008 8088 10558 8129
1/5/2008 8088 10558 8129
1/6/2008 8088 10558 8129
1/7/2008 8121 10592 8164
1/8/2008 7928 10401 7966
1/9/2008 7979 10544 8019
1/10/2008 8092 10628 8133
1/11/2008 7898 10484 7936
1/12/2008 7898 10484 7936
1/13/2008 7898 10484 7936
1/14/2008 7932 10598 7971
1/15/2008 7716 10334 7749
1/16/2008 7858 10277 7896
1/17/2008 7736 9979 7772
1/18/2008 7763 9918 7799
1/19/2008 7763 9918 7799
1/20/2008 7763 9918 7799
1/21/2008 7763 9918 7799
1/22/2008 7973 9809 8013
1/23/2008 8416 10019 8465
1/24/2008 8436 10120 8488
1/25/2008 8272 9960 8319
1/26/2008 8272 9960 8319
1/27/2008 8272 9960 8319
1/28/2008 8524 10135 8576
1/29/2008 8625 10198 8680
1/30/2008 8531 10150 8584
1/31/2008 8875 10322 8939
2/1/2008 9015 10448 9085
2/2/2008 9015 10448 9085
2/3/2008 9015 10448 9085
2/4/2008 8763 10339 8824
2/5/2008 8499 10009 8548
2/6/2008 8396 9937 8441
2/7/2008 8576 10017 8630
2/8/2008 8484 9975 8535
2/9/2008 8484 9975 8535
2/10/2008 8484 9975 8535
2/11/2008 8634 10035 8692
2/12/2008 8655 10108 8711
2/13/2008 8747 10249 8809
2/14/2008 8551 10112 8605
2/15/2008 8542 10121 8596
2/16/2008 8542 10121 8596
2/17/2008 8542 10121 8596
2/18/2008 8542 10121 8596
2/19/2008 8477 10113 8528
2/20/2008 8623 10198 8679
2/21/2008 8454 10070 8505
2/22/2008 8540 10151 8594
2/23/2008 8540 10151 8594
2/24/2008 8540 10151 8594
2/25/2008 8677 10291 8738
2/26/2008 8853 10362 8918
2/27/2008 8835 10355 8899
2/28/2008 8583 10264 8639
2/29/2008 8297 9986 8341
3/1/2008 8297 9986 8341
3/2/2008 8297 9986 8341
3/3/2008 8283 9992 8327
3/4/2008 8315 9957 8360
3/5/2008 8337 10015 8383
3/6/2008 8067 9796 8100
3/7/2008 7995 9713 8026
3/8/2008 7995 9713 8026
3/9/2008 7995 9713 8026
3/10/2008 7862 9564 7887
3/11/2008 8164 9919 8201
3/12/2008 8085 9833 8120
3/13/2008 8146 9883 8184
3/14/2008 8002 9678 8033
3/15/2008 8002 9678 8033
3/16/2008 8002 9678 8033
3/17/2008 7853 9593 7885
3/18/2008 8225 10000 8258
3/19/2008 8139 9757 8172
3/20/2008 8495 9991 8528
3/21/2008 8495 9991 8528
3/22/2008 8495 9991 8528
3/23/2008 8495 9991 8528
3/24/2008 8785 10144 8822
3/25/2008 8742 10167 8778
3/26/2008 8531 10079 8568
3/27/2008 8407 9965 8443
3/28/2008 8182 9887 8218
3/29/2008 8182 9887 8218
3/30/2008 8182 9887 8218
3/31/2008 8299 9943 8335
4/1/2008 8703 10300 8741
4/2/2008 8760 10282 8798
4/3/2008 8748 10296 8786
4/4/2008 8710 10304 8749
4/5/2008 8710 10304 8749
4/6/2008 8710 10304 8749
4/7/2008 8672 10320 8710
4/8/2008 8579 10271 8618
4/9/2008 8374 10189 8412
4/10/2008 8457 10235 8495
4/11/2008 8290 10027 8327
4/12/2008 8290 10027 8327
4/13/2008 8290 10027 8327
4/14/2008 8236 9993 8275
4/15/2008 8261 10039 8298
4/16/2008 8414 10268 8454
4/17/2008 8457 10275 8498
4/18/2008 8633 10461 8674
4/19/2008 8633 10461 8674
4/20/2008 8633 10461 8674
4/21/2008 8606 10445 8649
4/22/2008 8421 10353 8462
4/23/2008 8448 10383 8491
4/24/2008 8615 10450 8656
4/25/2008 8733 10518 8775
4/26/2008 8733 10518 8775
4/27/2008 8733 10518 8775
4/28/2008 8733 10508 8774
4/29/2008 8776 10467 8819
4/30/2008 8649 10427 8690
5/1/2008 8920 10608 8965
5/2/2008 8907 10642 8950
5/3/2008 8907 10642 8950
5/4/2008 8907 10642 8950
5/5/2008 8785 10595 8829
5/6/2008 8850 10677 8893
5/7/2008 8692 10488 8735
5/8/2008 8636 10527 8683
5/9/2008 8620 10458 8667
5/10/2008 8620 10458 8667
5/11/2008 8620 10458 8667
5/12/2008 8807 10573 8855
5/13/2008 8830 10572 8878
5/14/2008 8943 10616 8992
5/15/2008 9083 10730 9133
5/16/2008 8981 10744 9030
5/17/2008 8981 10744 9030
5/18/2008 8981 10744 9030
5/19/2008 8927 10754 8978
5/20/2008 8776 10654 8825
5/21/2008 8550 10484 8599
5/22/2008 8563 10513 8614
5/23/2008 8410 10375 8460
5/24/2008 8410 10375 8460
5/25/2008 8410 10375 8460
5/26/2008 8410 10375 8460
5/27/2008 8500 10446 8551
5/28/2008 8572 10489 8624
5/29/2008 8667 10546 8720
5/30/2008 8636 10562 8688
5/31/2008 8636 10562 8688
6/1/2008 8636 10562 8688
6/2/2008 8511 10452 8563
6/3/2008 8520 10392 8572
6/4/2008 8534 10393 8585
6/5/2008 8633 10597 8686
6/6/2008 8263 10271 8314
6/7/2008 8263 10271 8314
6/8/2008 8263 10271 8314
6/9/2008 8222 10279 8273
6/10/2008 8254 10254 8304
6/11/2008 8015 10083 8064
6/12/2008 8098 10117 8148
6/13/2008 8295 10269 8346
6/14/2008 8295 10269 8346
6/15/2008 8295 10269 8346
6/16/2008 8328 10270 8380
6/17/2008 8218 10201 8268
6/18/2008 8051 10102 8099
6/19/2008 8177 10143 8228
6/20/2008 7931 9955 7977
6/21/2008 7931 9955 7977
6/22/2008 7931 9955 7977
6/23/2008 7780 9955 7826
6/24/2008 7787 9927 7833
6/25/2008 7906 9986 7955
6/26/2008 7631 9695 7673
6/27/2008 7561 9660 7604
6/28/2008 7561 9660 7604
6/29/2008 7561 9660 7604
6/30/2008 7455 9672 7497
7/1/2008 7448 9711 7489
7/2/2008 7303 9535 7343
7/3/2008 7330 9545 7371
7/4/2008 7330 9545 7371
7/5/2008 7330 9545 7371
7/6/2008 7330 9545 7371
7/7/2008 7275 9465 7317
7/8/2008 7471 9631 7514
7/9/2008 7221 9412 7263
7/10/2008 7057 9478 7098
7/11/2008 6939 9374 6980
7/12/2008 6939 9374 6980
7/13/2008 6939 9374 6980
7/14/2008 6871 9289 6910
7/15/2008 6887 9188 6927
7/16/2008 7235 9420 7276
7/17/2008 7491 9533 7537
7/18/2008 7459 9536 7505
7/19/2008 7459 9536 7505
7/20/2008 7459 9536 7505
7/21/2008 7389 9531 7433
7/22/2008 7614 9660 7660
7/23/2008 7818 9699 7866
7/24/2008 7511 9475 7557
7/25/2008 7471 9515 7516
7/26/2008 7471 9515 7516
7/27/2008 7471 9515 7516
7/28/2008 7287 9338 7329
7/29/2008 7573 9557 7618
7/30/2008 7577 9716 7624
7/31/2008 7532 9591 7578
8/1/2008 7496 9537 7542
8/2/2008 7496 9537 7542
8/3/2008 7496 9537 7542
8/4/2008 7509 9452 7556
8/5/2008 7877 9724 7925
8/6/2008 7850 9761 7898
8/7/2008 7684 9587 7731
8/8/2008 8063 9816 8115
8/9/2008 8063 9816 8115
8/10/2008 8063 9816 8115
8/11/2008 8283 9887 8337
8/12/2008 8133 9768 8185
8/13/2008 7984 9743 8034
8/14/2008 8179 9797 8230
8/15/2008 8261 9838 8314
8/16/2008 8261 9838 8314
8/17/2008 8261 9838 8314
8/18/2008 8081 9690 8132
8/19/2008 7866 9601 7917
8/20/2008 7829 9661 7879
8/21/2008 7872 9686 7924
8/22/2008 8063 9797 8116
8/23/2008 8063 9797 8116
8/24/2008 8063 9797 8116
8/25/2008 7861 9604 7912
8/26/2008 7834 9640 7884
8/27/2008 7906 9718 7959
8/28/2008 8124 9864 8177
8/29/2008 8081 9729 8134
8/30/2008 8081 9729 8134
8/31/2008 8081 9729 8134
9/1/2008 8081 9729 8134
9/2/2008 8220 9690 8276
9/3/2008 8315 9675 8373
9/4/2008 8045 9386 8099
9/5/2008 8106 9428 8161
9/6/2008 8106 9428 8161
9/7/2008 8106 9428 8161
9/8/2008 8465 9623 8523
9/9/2008 8215 9294 8271
9/10/2008 8238 9352 8294
9/11/2008 8358 9484 8415
9/12/2008 8286 9504 8342
9/13/2008 8286 9504 8342
9/14/2008 8286 9504 8342
9/15/2008 8006 9056 8061
9/16/2008 8097 9215 8152
9/17/2008 7664 8781 7714
9/18/2008 8052 9164 8107
9/19/2008 8219 9533 8277
9/20/2008 8219 9533 8277
9/21/2008 8219 9533 8277
9/22/2008 7767 9169 7827
9/23/2008 7631 9026 7693
9/24/2008 7624 9008 7682
9/25/2008 7765 9185 7824
9/26/2008 7810 9216 7872
9/27/2008 7810 9216 7872
9/28/2008 7810 9216 7872
9/29/2008 7249 8407 7306
9/30/2008 7479 8862 7538
10/1/2008 7451 8824 7508
10/2/2008 7092 8469 7146
10/3/2008 6841 8355 6896
10/4/2008 6841 8355 6896
10/5/2008 6841 8355 6896
10/6/2008 6636 8034 6692
10/7/2008 6219 7573 6271
10/8/2008 6142 7491 6190
10/9/2008 5604 6920 5648
10/10/2008 5609 6840 5653
10/11/2008 5609 6840 5653
10/12/2008 5609 6840 5653
10/13/2008 6058 7632 6106
10/14/2008 5880 7591 5927
10/15/2008 5315 6906 5357
10/16/2008 5538 7200 5584
10/17/2008 5532 7155 5577
10/18/2008 5532 7155 5577
10/19/2008 5532 7155 5577
10/20/2008 5680 7496 5725
10/21/2008 5507 7265 5551
10/22/2008 5158 6824 5199
10/23/2008 5031 6910 5071
10/24/2008 4828 6672 4866
10/25/2008 4828 6672 4866
10/26/2008 4828 6672 4866
10/27/2008 4680 6460 4718
10/28/2008 5226 7157 5271
10/29/2008 5302 7078 5347
10/30/2008 5463 7262 5512
10/31/2008 5652 7374 5702
</Table>
TOTAL RETURNS FOR THE PERIOD ENDED OCTOBER 31, 2008
- --------------------------------------------------------------------------------
<Table>
<Caption>
SINCE INCEPTION
ONE YEAR (11/01/06)
-------- ---------------
RYDEX S&P EQUAL WEIGHT CONSUMER DISCRETIONARY ETF................. -43.27% -24.83%
S&P 500 EQUAL WEIGHT CONSUMER DISCRETIONARY TOTAL RETURN INDEX.... -43.13% -24.51%
S&P 500 TOTAL RETURN INDEX........................................ -36.10% -14.15%
</Table>
The returns presented above do not reflect the effect of taxes. Index returns
represent total returns. Past performance is no guarantee of future results.
17 ANNUAL REPORT
Rydex S&P Equal Weight Consumer Discretionary ETF
PORTFOLIO SUMMARY (Unaudited) As of October 31, 2008
- --------------------------------------------------------------------------------
TOP 10 HOLDINGS*
- --------------------------------------------------------------------------------
<Table>
<Caption>
DESCRIPTION % OF NET ASSETS
- ------------------------------------------------------------------------------------
APOLLO GROUP, INC. -- CLASS A 2.03%
AUTOZONE, INC. 1.74%
GENUINE PARTS CO. 1.68%
FAMILY DOLLAR STORES, INC. 1.66%
SHERWIN-WILLIAMS CO. 1.64%
LOWE'S COS., INC. 1.60%
MCDONALD'S CORP. 1.60%
NIKE, INC. -- CLASS B 1.58%
DIRECTV GROUP, INC. 1.55%
HOME DEPOT, INC. 1.55%
- ------------------------------------------------------------------------------------
</Table>
INDUSTRY ALLOCATIONS*
(PIE CHART)
<Table>
Specialty Retail 21.23
Media 19.05
Household Durables 15.34
Hotels, Restaurants & Leisure 11.66
Multiline Retail 9.65
Textiles, Apparel & Luxury Goods 7.05
Leisure Equipment & Products 3.84
Diversified Consumer Services 3.49
Automobiles 2.69
Internet & Catalog Retail 2.40
Auto Components 1.92
Distributors 1.68
</Table>
* The Fund's Top Ten Holdings are expressed as a percentage of net assets and
the Industry Allocations are expressed as a percentage of the Fund's
investments market value. These percentages may change over time.
18
RYDEX S&P EQUAL WEIGHT CONSUMER STAPLES ETF
MANAGER'S ANALYSIS (Unaudited)
- --------------------------------------------------------------------------------
For the year ended October 31, 2008, Rydex S&P Equal Weight Consumer Staples ETF
returned -19.87%. For the same period, its benchmark, the S&P Equal Weight
Consumer Staples Total Return Index, returned -19.76%.
Consumer staples is a late-cycle sector and RHS underperformed the cap-weighted
S&P Consumer Staples Index during three out of four quarters, twice by more than
4%. The effect of equal weighting was obvious in this ETF over the past year,
with the food and staples retailing industry being the biggest contributors to
its loss. On closer inspection, we see that the equal weight consumer staples
index was significantly underweight in value to retail mega-giant Wal-Mart
(WMT), which returned 25.62% for the period compared to its cap-weighted
counterpart. On the other hand, the Equal Weight Index had higher allocations to
popular grocery chains Whole Foods (WFMI) and SuperValue Inc. (SVU). As the
nation's largest discount retailer chain, Wal-Mart has greatly benefited from
consumers cutting household budgets, while top-line grocers like Whole Foods and
SuperValue Inc. have felt the one-two punch of higher food prices and a drastic
cutback in consumer spending.
CUMULATIVE FUND PERFORMANCE: NOVEMBER 1, 2006 - OCTOBER 31, 2008
(Performance Graph)
<Table>
<Caption>
S&P 500
RYDEX S&P EQUAL WEIGHT
EQUAL WEIGHT S&P 500 CONSUMER STAPLES
CONSUMER STAPLES TOTAL RETURN TOTAL RETURN
ETF(A) INDEX(B) INDEX(C)
---------------- ------------ ----------------
11/1/2006 10000 10000 9999
11/2/2006 9981 9999 9981
11/3/2006 9846 9978 9845
11/4/2006 9846 9978 9845
11/5/2006 9846 9978 9845
11/6/2006 9927 10091 9927
11/7/2006 9911 10114 9911
11/8/2006 9975 10137 9975
11/9/2006 9940 10085 9939
11/10/2006 9950 10104 9950
11/11/2006 9950 10104 9950
11/12/2006 9950 10104 9950
11/13/2006 9936 10132 9937
11/14/2006 9979 10198 9981
11/15/2006 10010 10225 10010
11/16/2006 10064 10249 10064
11/17/2006 10056 10259 10057
11/18/2006 10056 10259 10057
11/19/2006 10056 10259 10057
11/20/2006 10035 10254 10036
11/21/2006 10027 10272 10027
11/22/2006 10056 10297 10058
11/23/2006 10056 10297 10058
11/24/2006 10031 10260 10032
11/25/2006 10031 10260 10032
11/26/2006 10031 10260 10032
11/27/2006 9913 10120 9915
11/28/2006 9956 10158 9958
11/29/2006 10042 10256 10044
11/30/2006 10029 10264 10032
12/1/2006 9994 10236 9996
12/2/2006 9994 10236 9996
12/3/2006 9994 10236 9996
12/4/2006 10139 10327 10142
12/5/2006 10203 10368 10207
12/6/2006 10195 10357 10200
12/7/2006 10160 10317 10164
12/8/2006 10183 10336 10187
12/9/2006 10183 10336 10187
12/10/2006 10183 10336 10187
12/11/2006 10193 10359 10197
12/12/2006 10228 10349 10233
12/13/2006 10212 10363 10216
12/14/2006 10262 10453 10266
12/15/2006 10251 10465 10256
12/16/2006 10251 10465 10256
12/17/2006 10251 10465 10256
12/18/2006 10233 10431 10239
12/19/2006 10247 10454 10254
12/20/2006 10226 10440 10233
12/21/2006 10243 10404 10249
12/22/2006 10233 10350 10239
12/23/2006 10233 10350 10239
12/24/2006 10233 10350 10239
12/25/2006 10233 10350 10239
12/26/2006 10257 10395 10265
12/27/2006 10290 10470 10298
12/28/2006 10282 10455 10290
12/29/2006 10230 10408 10238
12/30/2006 10230 10408 10238
12/31/2006 10230 10408 10238
1/1/2007 10230 10408 10238
1/2/2007 10230 10408 10238
1/3/2007 10234 10398 10242
1/4/2007 10209 10411 10217
1/5/2007 10145 10347 10152
1/6/2007 10145 10347 10152
1/7/2007 10145 10347 10152
1/8/2007 10166 10373 10174
1/9/2007 10176 10368 10185
1/10/2007 10209 10389 10218
1/11/2007 10278 10455 10288
1/12/2007 10259 10506 10268
1/13/2007 10259 10506 10268
1/14/2007 10259 10506 10268
1/15/2007 10259 10506 10268
1/16/2007 10270 10515 10279
1/17/2007 10249 10506 10260
1/18/2007 10259 10475 10269
1/19/2007 10278 10506 10289
1/20/2007 10278 10506 10289
1/21/2007 10278 10506 10289
1/22/2007 10297 10451 10308
1/23/2007 10309 10488 10320
1/24/2007 10343 10577 10355
1/25/2007 10291 10458 10301
1/26/2007 10280 10445 10292
1/27/2007 10280 10445 10292
1/28/2007 10280 10445 10292
1/29/2007 10307 10435 10318
1/30/2007 10341 10495 10352
1/31/2007 10416 10566 10428
2/1/2007 10509 10625 10521
2/2/2007 10503 10643 10516
2/3/2007 10503 10643 10516
2/4/2007 10503 10643 10516
2/5/2007 10468 10634 10482
2/6/2007 10482 10641 10496
2/7/2007 10441 10660 10454
2/8/2007 10430 10648 10443
2/9/2007 10411 10573 10426
2/10/2007 10411 10573 10426
2/11/2007 10411 10573 10426
2/12/2007 10409 10539 10423
2/13/2007 10486 10621 10502
2/14/2007 10532 10705 10546
2/15/2007 10609 10717 10625
2/16/2007 10630 10708 10646
2/17/2007 10630 10708 10646
2/18/2007 10630 10708 10646
2/19/2007 10630 10708 10646
2/20/2007 10693 10739 10709
2/21/2007 10638 10724 10655
2/22/2007 10613 10717 10629
2/23/2007 10576 10680 10593
2/24/2007 10576 10680 10593
2/25/2007 10576 10680 10593
2/26/2007 10588 10668 10605
2/27/2007 10293 10299 10308
2/28/2007 10359 10359 10375
3/1/2007 10295 10332 10310
3/2/2007 10186 10215 10203
3/3/2007 10186 10215 10203
3/4/2007 10186 10215 10203
3/5/2007 10159 10119 10174
3/6/2007 10253 10276 10269
3/7/2007 10197 10254 10213
3/8/2007 10288 10327 10306
3/9/2007 10313 10334 10330
3/10/2007 10313 10334 10330
3/11/2007 10313 10334 10330
3/12/2007 10357 10362 10376
3/13/2007 10199 10154 10217
3/14/2007 10249 10223 10266
3/15/2007 10328 10261 10347
3/16/2007 10294 10222 10314
3/17/2007 10294 10222 10314
3/18/2007 10294 10222 10314
3/19/2007 10359 10333 10378
3/20/2007 10440 10399 10461
3/21/2007 10561 10577 10583
3/22/2007 10582 10573 10603
3/23/2007 10615 10584 10637
3/24/2007 10615 10584 10637
3/25/2007 10615 10584 10637
3/26/2007 10625 10595 10649
3/27/2007 10548 10529 10571
3/28/2007 10540 10448 10562
3/29/2007 10551 10487 10574
3/30/2007 10592 10475 10615
3/31/2007 10592 10475 10615
4/1/2007 10592 10475 10615
4/2/2007 10621 10502 10643
4/3/2007 10690 10602 10710
4/4/2007 10707 10614 10727
4/5/2007 10732 10649 10753
4/6/2007 10732 10649 10753
4/7/2007 10732 10649 10753
4/8/2007 10732 10649 10753
4/9/2007 10743 10655 10765
4/10/2007 10759 10684 10781
4/11/2007 10699 10615 10720
4/12/2007 10749 10681 10770
4/13/2007 10770 10718 10793
4/14/2007 10770 10718 10793
4/15/2007 10770 10718 10793
4/16/2007 10841 10833 10864
4/17/2007 10870 10855 10894
4/18/2007 10853 10863 10877
4/19/2007 10891 10850 10914
4/20/2007 10979 10951 11002
4/21/2007 10979 10951 11002
4/22/2007 10979 10951 11002
4/23/2007 10993 10926 11018
4/24/2007 11012 10922 11037
4/25/2007 11060 11034 11085
4/26/2007 11029 11026 11054
4/27/2007 10987 11025 11013
4/28/2007 10987 11025 11013
4/29/2007 10987 11025 11013
4/30/2007 10951 10939 10976
5/1/2007 10949 10968 10975
5/2/2007 10987 11040 11012
5/3/2007 10954 11091 10979
5/4/2007 10951 11115 10978
5/5/2007 10951 11115 10978
5/6/2007 10951 11115 10978
5/7/2007 10977 11144 11003
5/8/2007 10954 11132 10980
5/9/2007 10954 11171 10981
5/10/2007 10807 11017 10834
5/11/2007 10832 11124 10859
5/12/2007 10832 11124 10859
5/13/2007 10832 11124 10859
5/14/2007 10830 11105 10857
5/15/2007 10847 11091 10874
5/16/2007 10962 11190 10990
5/17/2007 10939 11181 10966
5/18/2007 11000 11255 11028
5/19/2007 11000 11255 11028
5/20/2007 11000 11255 11028
5/21/2007 10956 11272 10984
5/22/2007 10958 11265 10986
5/23/2007 10947 11252 10977
5/24/2007 10903 11144 10932
5/25/2007 10960 11205 10991
5/26/2007 10960 11205 10991
5/27/2007 10960 11205 10991
5/28/2007 10960 11205 10991
5/29/2007 11006 11224 11036
5/30/2007 11048 11318 11078
5/31/2007 11052 11321 11083
6/1/2007 11140 11363 11171
6/2/2007 11140 11363 11171
6/3/2007 11140 11363 11171
6/4/2007 11096 11384 11126
6/5/2007 11023 11324 11055
6/6/2007 10935 11226 10966
6/7/2007 10795 11030 10825
6/8/2007 10874 11155 10907
6/9/2007 10874 11155 10907
6/10/2007 10874 11155 10907
6/11/2007 10903 11166 10936
6/12/2007 10801 11047 10834
6/13/2007 10943 11217 10975
6/14/2007 10933 11272 10964
6/15/2007 10971 11345 11004
6/16/2007 10971 11345 11004
6/17/2007 10971 11345 11004
6/18/2007 10971 11332 11005
6/19/2007 10911 11352 10959
6/20/2007 10808 11197 10882
6/21/2007 10894 11269 10970
6/22/2007 10765 11124 10838
6/23/2007 10765 11124 10838
6/24/2007 10765 11124 10838
6/25/2007 10746 11088 10820
6/26/2007 10710 11053 10784
6/27/2007 10806 11154 10882
6/28/2007 10827 11150 10904
6/29/2007 10838 11133 10913
6/30/2007 10838 11133 10913
7/1/2007 10838 11133 10913
7/2/2007 10909 11252 10987
7/3/2007 10905 11294 10984
7/4/2007 10905 11294 10984
7/5/2007 10888 11298 10967
7/6/2007 10914 11339 10993
7/7/2007 10914 11339 10993
7/8/2007 10914 11339 10993
7/9/2007 10916 11349 10995
7/10/2007 10815 11188 10891
7/11/2007 10876 11254 10954
7/12/2007 11015 11468 11094
7/13/2007 11057 11504 11138
7/14/2007 11057 11504 11138
7/15/2007 11057 11504 11138
7/16/2007 11015 11482 11096
7/17/2007 10954 11481 11034
7/18/2007 10962 11458 11042
7/19/2007 10996 11510 11078
7/20/2007 10888 11369 10969
7/21/2007 10888 11369 10969
7/22/2007 10888 11369 10969
7/23/2007 10943 11425 11025
7/24/2007 10777 11199 10856
7/25/2007 10783 11251 10864
7/26/2007 10585 10988 10662
7/27/2007 10467 10814 10545
7/28/2007 10467 10814 10545
7/29/2007 10467 10814 10545
7/30/2007 10526 10925 10603
7/31/2007 10420 10787 10497
8/1/2007 10539 10866 10616
8/2/2007 10555 10916 10633
8/3/2007 10420 10627 10498
8/4/2007 10420 10627 10498
8/5/2007 10420 10627 10498
8/6/2007 10756 10884 10836
8/7/2007 10793 10951 10875
8/8/2007 10852 11109 10935
8/9/2007 10602 10781 10681
8/10/2007 10591 10786 10671
8/11/2007 10591 10786 10671
8/12/2007 10591 10786 10671
8/13/2007 10604 10782 10684
8/14/2007 10465 10587 10542
8/15/2007 10397 10443 10475
8/16/2007 10383 10477 10462
8/17/2007 10572 10735 10654
8/18/2007 10572 10735 10654
8/19/2007 10572 10735 10654
8/20/2007 10560 10732 10640
8/21/2007 10568 10744 10649
8/22/2007 10671 10870 10753
8/23/2007 10648 10858 10730
8/24/2007 10751 10985 10835
8/25/2007 10751 10985 10835
8/26/2007 10751 10985 10835
8/27/2007 10680 10892 10762
8/28/2007 10473 10636 10555
8/29/2007 10644 10872 10727
8/30/2007 10583 10827 10666
8/31/2007 10663 10949 10746
9/1/2007 10663 10949 10746
9/2/2007 10663 10949 10746
9/3/2007 10663 10949 10746
9/4/2007 10720 11064 10805
9/5/2007 10549 10942 10631
9/6/2007 10570 10990 10654
9/7/2007 10471 10804 10554
9/8/2007 10471 10804 10554
9/9/2007 10471 10804 10554
9/10/2007 10475 10791 10557
9/11/2007 10612 10938 10698
9/12/2007 10640 10942 10726
9/13/2007 10669 11034 10755
9/14/2007 10678 11037 10763
9/15/2007 10678 11037 10763
9/16/2007 10678 11037 10763
9/17/2007 10625 10980 10711
9/18/2007 10831 11301 10920
9/19/2007 10888 11370 10978
9/20/2007 10825 11296 10915
9/21/2007 10861 11348 10951
9/22/2007 10861 11348 10951
9/23/2007 10861 11348 10951
9/24/2007 10816 11289 10907
9/25/2007 10804 11285 10894
9/26/2007 10911 11348 11004
9/27/2007 10953 11393 11045
9/28/2007 10958 11359 11050
9/29/2007 10958 11359 11050
9/30/2007 10958 11359 11050
10/1/2007 10951 11510 11043
10/2/2007 10947 11507 11040
10/3/2007 10886 11457 10978
10/4/2007 10926 11481 11019
10/5/2007 10979 11594 11071
10/6/2007 10979 11594 11071
10/7/2007 10979 11594 11071
10/8/2007 10958 11557 11051
10/9/2007 11025 11650 11120
10/10/2007 11044 11631 11138
10/11/2007 11004 11572 11098
10/12/2007 11080 11627 11175
10/13/2007 11080 11627 11175
10/14/2007 11080 11627 11175
10/15/2007 10996 11530 11091
10/16/2007 10970 11454 11064
10/17/2007 10979 11475 11075
10/18/2007 10987 11467 11083
10/19/2007 10822 11173 10915
10/20/2007 10822 11173 10915
10/21/2007 10822 11173 10915
10/22/2007 10900 11216 10995
10/23/2007 10911 11315 11006
10/24/2007 10898 11287 10993
10/25/2007 10958 11276 11055
10/26/2007 11017 11432 11114
10/27/2007 11017 11432 11114
10/28/2007 11017 11432 11114
10/29/2007 11053 11476 11150
10/30/2007 11038 11402 11135
10/31/2007 11146 11539 11251
11/1/2007 10898 11237 10999
11/2/2007 10930 11247 11027
11/3/2007 10930 11247 11027
11/4/2007 10930 11247 11027
11/5/2007 10945 11192 11042
11/6/2007 10998 11327 11094
11/7/2007 10816 11000 10905
11/8/2007 10905 10994 11004
11/9/2007 10807 10837 10902
11/10/2007 10807 10837 10902
11/11/2007 10807 10837 10902
11/12/2007 10763 10729 10846
11/13/2007 11002 11045 11089
11/14/2007 10989 10970 11069
11/15/2007 10936 10825 11011
11/16/2007 11044 10882 11120
11/17/2007 11044 10882 11120
11/18/2007 11044 10882 11120
11/19/2007 10898 10692 10977
11/20/2007 10993 10741 11072
11/21/2007 10869 10571 10947
11/22/2007 10869 10571 10947
11/23/2007 10972 10750 11052
11/24/2007 10972 10750 11052
11/25/2007 10972 10750 11052
11/26/2007 10860 10500 10940
11/27/2007 11015 10658 11096
11/28/2007 11218 10966 11300
11/29/2007 11197 10972 11278
11/30/2007 11256 11057 11334
12/1/2007 11256 11057 11334
12/2/2007 11256 11057 11334
12/3/2007 11188 10992 11271
12/4/2007 11165 10920 11248
12/5/2007 11237 11092 11320
12/6/2007 11336 11260 11421
12/7/2007 11338 11240 11424
12/8/2007 11338 11240 11424
12/9/2007 11338 11240 11424
12/10/2007 11383 11325 11468
12/11/2007 11156 11039 11240
12/12/2007 11224 11107 11308
12/13/2007 11222 11121 11306
12/14/2007 11106 10969 11188
12/15/2007 11106 10969 11188
12/16/2007 11106 10969 11188
12/17/2007 11019 10804 11102
12/18/2007 11072 10872 11154
12/19/2007 11076 10857 11158
12/20/2007 11114 10914 11196
12/21/2007 11249 11097 11335
12/22/2007 11249 11097 11335
12/23/2007 11249 11097 11335
12/24/2007 11319 11187 11405
12/25/2007 11319 11187 11405
12/26/2007 11289 11196 11377
12/27/2007 11162 11040 11248
12/28/2007 11200 11056 11286
12/29/2007 11200 11056 11286
12/30/2007 11200 11056 11286
12/31/2007 11097 10980 11180
1/1/2008 11097 10980 11180
1/2/2008 10897 10824 10981
1/3/2008 10859 10824 10942
1/4/2008 10757 10558 10839
1/5/2008 10757 10558 10839
1/6/2008 10757 10558 10839
1/7/2008 10899 10592 10983
1/8/2008 10791 10401 10874
1/9/2008 10852 10544 10936
1/10/2008 10942 10628 11027
1/11/2008 10729 10484 10812
1/12/2008 10729 10484 10812
1/13/2008 10729 10484 10812
1/14/2008 10697 10598 10781
1/15/2008 10531 10334 10613
1/16/2008 10599 10277 10682
1/17/2008 10415 9979 10496
1/18/2008 10319 9918 10399
1/19/2008 10319 9918 10399
1/20/2008 10319 9918 10399
1/21/2008 10319 9918 10399
1/22/2008 10206 9809 10285
1/23/2008 10361 10019 10443
1/24/2008 10287 10120 10368
1/25/2008 10162 9960 10241
1/26/2008 10162 9960 10241
1/27/2008 10162 9960 10241
1/28/2008 10323 10135 10404
1/29/2008 10321 10198 10403
1/30/2008 10219 10150 10299
1/31/2008 10327 10322 10409
2/1/2008 10529 10448 10614
2/2/2008 10529 10448 10614
2/3/2008 10529 10448 10614
2/4/2008 10440 10339 10525
2/5/2008 10230 10009 10312
2/6/2008 10221 9937 10303
2/7/2008 10306 10017 10390
2/8/2008 10236 9975 10319
2/9/2008 10236 9975 10319
2/10/2008 10236 9975 10319
2/11/2008 10334 10035 10418
2/12/2008 10444 10108 10530
2/13/2008 10478 10249 10564
2/14/2008 10370 10112 10454
2/15/2008 10461 10121 10547
2/16/2008 10461 10121 10547
2/17/2008 10461 10121 10547
2/18/2008 10461 10121 10547
2/19/2008 10459 10113 10544
2/20/2008 10468 10198 10554
2/21/2008 10381 10070 10466
2/22/2008 10474 10151 10561
2/23/2008 10474 10151 10561
2/24/2008 10474 10151 10561
2/25/2008 10544 10291 10632
2/26/2008 10593 10362 10682
2/27/2008 10553 10355 10642
2/28/2008 10497 10264 10585
2/29/2008 10283 9986 10368
3/1/2008 10283 9986 10368
3/2/2008 10283 9986 10368
3/3/2008 10349 9992 10435
3/4/2008 10366 9957 10452
3/5/2008 10398 10015 10484
3/6/2008 10242 9796 10327
3/7/2008 10181 9713 10265
3/8/2008 10181 9713 10265
3/9/2008 10181 9713 10265
3/10/2008 10164 9564 10249
3/11/2008 10366 9919 10453
3/12/2008 10364 9833 10450
3/13/2008 10349 9883 10437
3/14/2008 10191 9678 10277
3/15/2008 10191 9678 10277
3/16/2008 10191 9678 10277
3/17/2008 10119 9593 10203
3/18/2008 10398 10000 10485
3/19/2008 10338 9757 10426
3/20/2008 10483 9991 10573
3/21/2008 10483 9991 10573
3/22/2008 10483 9991 10573
3/23/2008 10483 9991 10573
3/24/2008 10568 10144 10661
3/25/2008 10594 10167 10688
3/26/2008 10532 10079 10625
3/27/2008 10526 9965 10618
3/28/2008 10526 9887 10619
3/29/2008 10526 9887 10619
3/30/2008 10526 9887 10619
3/31/2008 10547 9943 10635
4/1/2008 10803 10300 10888
4/2/2008 10694 10282 10780
4/3/2008 10705 10296 10790
4/4/2008 10743 10304 10826
4/5/2008 10743 10304 10826
4/6/2008 10743 10304 10826
4/7/2008 10724 10320 10808
4/8/2008 10673 10271 10758
4/9/2008 10568 10189 10653
4/10/2008 10607 10235 10691
4/11/2008 10500 10027 10584
4/12/2008 10500 10027 10584
4/13/2008 10500 10027 10584
4/14/2008 10517 9993 10601
4/15/2008 10562 10039 10646
4/16/2008 10615 10268 10700
4/17/2008 10645 10275 10730
4/18/2008 10703 10461 10791
4/19/2008 10703 10461 10791
4/20/2008 10703 10461 10791
4/21/2008 10715 10445 10804
4/22/2008 10590 10353 10676
4/23/2008 10660 10383 10747
4/24/2008 10632 10450 10719
4/25/2008 10617 10518 10704
4/26/2008 10617 10518 10704
4/27/2008 10617 10518 10704
4/28/2008 10724 10508 10814
4/29/2008 10792 10467 10882
4/30/2008 10713 10427 10802
5/1/2008 10848 10608 10939
5/2/2008 10813 10642 10904
5/3/2008 10813 10642 10904
5/4/2008 10813 10642 10904
5/5/2008 10813 10595 10903
5/6/2008 10841 10677 10932
5/7/2008 10741 10488 10832
5/8/2008 10764 10527 10856
5/9/2008 10673 10458 10761
5/10/2008 10673 10458 10761
5/11/2008 10673 10458 10761
5/12/2008 10805 10573 10896
5/13/2008 10841 10572 10934
5/14/2008 10882 10616 10974
5/15/2008 10946 10730 11039
5/16/2008 10943 10744 11037
5/17/2008 10943 10744 11037
5/18/2008 10943 10744 11037
5/19/2008 10907 10754 11002
5/20/2008 10841 10654 10934
5/21/2008 10737 10484 10829
5/22/2008 10831 10513 10925
5/23/2008 10762 10375 10857
5/24/2008 10762 10375 10857
5/25/2008 10762 10375 10857
5/26/2008 10762 10375 10857
5/27/2008 10860 10446 10955
5/28/2008 10811 10489 10907
5/29/2008 10918 10546 11016
5/30/2008 10926 10562 11022
5/31/2008 10926 10562 11022
6/1/2008 10926 10562 11022
6/2/2008 10826 10452 10923
6/3/2008 10756 10392 10851
6/4/2008 10820 10393 10916
6/5/2008 10943 10597 11041
6/6/2008 10673 10271 10766
6/7/2008 10673 10271 10766
6/8/2008 10673 10271 10766
6/9/2008 10675 10279 10769
6/10/2008 10722 10254 10816
6/11/2008 10573 10083 10665
6/12/2008 10611 10117 10705
6/13/2008 10664 10269 10760
6/14/2008 10664 10269 10760
6/15/2008 10664 10269 10760
6/16/2008 10534 10270 10629
6/17/2008 10460 10201 10553
6/18/2008 10338 10102 10430
6/19/2008 10409 10143 10500
6/20/2008 10325 9955 10416
6/21/2008 10325 9955 10416
6/22/2008 10325 9955 10416
6/23/2008 10265 9955 10357
6/24/2008 10288 9927 10380
6/25/2008 10423 9986 10517
6/26/2008 10201 9695 10291
6/27/2008 10097 9660 10187
6/28/2008 10097 9660 10187
6/29/2008 10097 9660 10187
6/30/2008 10111 9672 10201
7/1/2008 10124 9711 10216
7/2/2008 10051 9535 10141
7/3/2008 10096 9545 10186
7/4/2008 10096 9545 10186
7/5/2008 10096 9545 10186
7/6/2008 10096 9545 10186
7/7/2008 10105 9465 10196
7/8/2008 10255 9631 10348
7/9/2008 10210 9412 10303
7/10/2008 10223 9478 10314
7/11/2008 10144 9374 10235
7/12/2008 10144 9374 10235
7/13/2008 10144 9374 10235
7/14/2008 10156 9289 10249
7/15/2008 10154 9188 10246
7/16/2008 10311 9420 10404
7/17/2008 10323 9533 10419
7/18/2008 10244 9536 10339
7/19/2008 10244 9536 10339
7/20/2008 10244 9536 10339
7/21/2008 10169 9531 10264
7/22/2008 10332 9660 10428
7/23/2008 10448 9699 10545
7/24/2008 10285 9475 10380
7/25/2008 10253 9515 10348
7/26/2008 10253 9515 10348
7/27/2008 10253 9515 10348
7/28/2008 10174 9338 10268
7/29/2008 10364 9557 10460
7/30/2008 10486 9716 10586
7/31/2008 10381 9591 10479
8/1/2008 10356 9537 10453
8/2/2008 10356 9537 10453
8/3/2008 10356 9537 10453
8/4/2008 10439 9452 10538
8/5/2008 10655 9724 10757
8/6/2008 10681 9761 10785
8/7/2008 10491 9587 10592
8/8/2008 10773 9816 10878
8/9/2008 10773 9816 10878
8/10/2008 10773 9816 10878
8/11/2008 10865 9887 10970
8/12/2008 10876 9768 10983
8/13/2008 10808 9743 10913
8/14/2008 10880 9797 10987
8/15/2008 10957 9838 11066
8/16/2008 10957 9838 11066
8/17/2008 10957 9838 11066
8/18/2008 10808 9690 10914
8/19/2008 10709 9601 10815
8/20/2008 10707 9661 10813
8/21/2008 10640 9686 10745
8/22/2008 10718 9797 10824
8/23/2008 10718 9797 10824
8/24/2008 10718 9797 10824
8/25/2008 10576 9604 10682
8/26/2008 10525 9640 10629
8/27/2008 10591 9718 10696
8/28/2008 10673 9864 10780
8/29/2008 10536 9729 10640
8/30/2008 10536 9729 10640
8/31/2008 10536 9729 10640
9/1/2008 10536 9729 10640
9/2/2008 10655 9690 10763
9/3/2008 10636 9675 10743
9/4/2008 10473 9386 10578
9/5/2008 10651 9428 10759
9/6/2008 10651 9428 10759
9/7/2008 10651 9428 10759
9/8/2008 10846 9623 10958
9/9/2008 10760 9294 10873
9/10/2008 10767 9352 10879
9/11/2008 10887 9484 11001
9/12/2008 10923 9504 11038
9/13/2008 10923 9504 11038
9/14/2008 10923 9504 11038
9/15/2008 10741 9056 10854
9/16/2008 10743 9215 10856
9/17/2008 10435 8781 10541
9/18/2008 10666 9164 10778
9/19/2008 10693 9533 10806
9/20/2008 10693 9533 10806
9/21/2008 10693 9533 10806
9/22/2008 10428 9169 10538
9/23/2008 10400 9026 10507
9/24/2008 10387 9008 10496
9/25/2008 10573 9185 10685
9/26/2008 10638 9216 10750
9/27/2008 10638 9216 10750
9/28/2008 10638 9216 10750
9/29/2008 10158 8407 10264
9/30/2008 10376 8862 10487
10/1/2008 10499 8824 10612
10/2/2008 10292 8469 10405
10/3/2008 10163 8355 10276
10/4/2008 10163 8355 10276
10/5/2008 10163 8355 10276
10/6/2008 9898 8034 10006
10/7/2008 9588 7573 9693
10/8/2008 9420 7491 9520
10/9/2008 8832 6920 8926
10/10/2008 8584 6840 8675
10/11/2008 8584 6840 8675
10/12/2008 8584 6840 8675
10/13/2008 9293 7632 9393
10/14/2008 9112 7591 9208
10/15/2008 8537 6906 8625
10/16/2008 8815 7200 8907
10/17/2008 8875 7155 8967
10/18/2008 8875 7155 8967
10/19/2008 8875 7155 8967
10/20/2008 9119 7496 9213
10/21/2008 8972 7265 9065
10/22/2008 8638 6824 8728
10/23/2008 8649 6910 8738
10/24/2008 8309 6672 8393
10/25/2008 8309 6672 8393
10/26/2008 8309 6672 8393
10/27/2008 8139 6460 8221
10/28/2008 8795 7157 8887
10/29/2008 8664 7078 8754
10/30/2008 8858 7262 8950
10/31/2008 8931 7374 9029
</Table>
TOTAL RETURNS FOR THE PERIOD ENDED OCTOBER 31, 2008
- --------------------------------------------------------------------------------
<Table>
<Caption>
SINCE INCEPTION
ONE YEAR (11/01/06)
-------- ---------------
RYDEX S&P EQUAL WEIGHT CONSUMER STAPLES ETF............... -19.87% -5.50%
S&P 500 EQUAL WEIGHT CONSUMER STAPLES TOTAL RETURN INDEX.. -19.76% -4.99%
S&P 500 TOTAL RETURN INDEX................................ -36.10% -14.15%
</Table>
The returns presented above do not reflect the effect of taxes. Index returns
represent total returns. Past performance is no guarantee of future results.
19 ANNUAL REPORT
Rydex S&P Equal Weight Consumer Staples ETF
PORTFOLIO SUMMARY (Unaudited) As of October 31, 2008
- --------------------------------------------------------------------------------
TOP 10 HOLDINGS*
- --------------------------------------------------------------------------------
<Table>
<Caption>
DESCRIPTION % OF NET ASSETS
- ------------------------------------------------------------------------------------
KROGER CO. 3.02%
REYNOLDS AMERICAN, INC. 2.95%
UST, INC. 2.91%
CAMPBELL SOUP CO. 2.91%
GENERAL MILLS, INC. 2.87%
ARCHER-DANIELS-MIDLAND CO. 2.84%
CLOROX CO. 2.82%
ALTRIA GROUP, INC. 2.80%
KIMBERLY-CLARK CORP. 2.79%
ANHEUSER-BUSCH COS., INC. 2.78%
- ------------------------------------------------------------------------------------
</Table>
INDUSTRY ALLOCATIONS*
(PIE CHART)
<Table>
Food Products 31.49
Beverages 20.26
Food & Staples Retailing 19.62
Tobacco 14.00
Household Products 10.72
Personal Products 3.91
</Table>
* The Fund's Top Ten Holdings are expressed as a percentage of net assets and
the Industry Allocations are expressed as a percentage of the Fund's
investments market value. These percentages may change over time.
20
RYDEX S&P EQUAL WEIGHT ENERGY ETF
MANAGER'S ANALYSIS (Unaudited)
- --------------------------------------------------------------------------------
For the year ended October 31, 2008, Rydex S&P Equal Weight Energy ETF returned
- -39.28%. For the same period, its benchmark, the S&P Equal Weight Energy Total
Return Index, returned -39.06% significantly underperforming the cap-weighted
S&P Consumer Staples Index's -11.85% total return. Both RYE and traditional cap-
weighted strategies were hurt more by the fuel (oil/gas/consumable fuels)
industries than by energy equipment and services. However, the equal weighting
of the oil/gas/consumable fuels industries was one of the biggest reasons for
the underperformance of the ETF, returning about 9% less than the cap-weighted
index. Specifically, behind the underperformance was the equal weight's
diminished allocation ExxonMobil (XOM) -- the best performing stock in the
oil/gas/consumer fuels industry, returning -9.15% for the year ending 10/31/08.
Due to the fund's equal-weighting strategy, XOM's average weight was only 4.02%,
versus 36.68% for the cap-weighted index.
CUMULATIVE FUND PERFORMANCE: NOVEMBER 1, 2006 - OCTOBER 31, 2008
(Performance Graph)
<Table>
<Caption>
S&P 500
RYDEX S&P S&P 500 EQUAL WEIGHT
EQUAL WEIGHT TOTAL RETURN ENERGY TOTAL
ENERGY ETF(A) INDEX(B) RETURN INDEX(C)
------------- ------------ ---------------
11/1/2006 10000 10000 10000
11/2/2006 10006 9999 10007
11/3/2006 10248 9978 10249
11/4/2006 10248 9978 10249
11/5/2006 10248 9978 10249
11/6/2006 10341 10091 10342
11/7/2006 10238 10114 10238
11/8/2006 10405 10137 10408
11/9/2006 10486 10085 10488
11/10/2006 10337 10104 10340
11/11/2006 10337 10104 10340
11/12/2006 10337 10104 10340
11/13/2006 10316 10132 10319
11/14/2006 10358 10198 10360
11/15/2006 10488 10225 10491
11/16/2006 10178 10249 10181
11/17/2006 10300 10259 10302
11/18/2006 10300 10259 10302
11/19/2006 10300 10259 10302
11/20/2006 10283 10254 10288
11/21/2006 10484 10272 10489
11/22/2006 10434 10297 10438
11/23/2006 10434 10297 10438
11/24/2006 10420 10260 10425
11/25/2006 10420 10260 10425
11/26/2006 10420 10260 10425
11/27/2006 10345 10120 10349
11/28/2006 10538 10158 10542
11/29/2006 10910 10256 10915
11/30/2006 10951 10264 10956
12/1/2006 11009 10236 11015
12/2/2006 11009 10236 11015
12/3/2006 11009 10236 11015
12/4/2006 10943 10327 10948
12/5/2006 10972 10368 10977
12/6/2006 10982 10357 10988
12/7/2006 10931 10317 10935
12/8/2006 10920 10336 10926
12/9/2006 10920 10336 10926
12/10/2006 10920 10336 10926
12/11/2006 10879 10359 10884
12/12/2006 10848 10349 10854
12/13/2006 10933 10363 10939
12/14/2006 11067 10453 11076
12/15/2006 10968 10465 10977
12/16/2006 10968 10465 10977
12/17/2006 10968 10465 10977
12/18/2006 10602 10431 10610
12/19/2006 10747 10454 10754
12/20/2006 10592 10440 10600
12/21/2006 10509 10404 10517
12/22/2006 10436 10350 10446
12/23/2006 10436 10350 10446
12/24/2006 10436 10350 10446
12/25/2006 10436 10350 10446
12/26/2006 10385 10395 10393
12/27/2006 10484 10470 10492
12/28/2006 10469 10455 10478
12/29/2006 10364 10408 10373
12/30/2006 10364 10408 10373
12/31/2006 10364 10408 10373
1/1/2007 10364 10408 10373
1/2/2007 10364 10408 10373
1/3/2007 9962 10398 9971
1/4/2007 9770 10411 9781
1/5/2007 9843 10347 9853
1/6/2007 9843 10347 9853
1/7/2007 9843 10347 9853
1/8/2007 9861 10373 9872
1/9/2007 9766 10368 9777
1/10/2007 9648 10389 9657
1/11/2007 9590 10455 9600
1/12/2007 9841 10506 9851
1/13/2007 9841 10506 9851
1/14/2007 9841 10506 9851
1/15/2007 9841 10506 9851
1/16/2007 9752 10515 9764
1/17/2007 9861 10506 9873
1/18/2007 9779 10475 9791
1/19/2007 10042 10506 10053
1/20/2007 10042 10506 10053
1/21/2007 10042 10506 10053
1/22/2007 10037 10451 10050
1/23/2007 10294 10488 10307
1/24/2007 10313 10577 10327
1/25/2007 10083 10458 10095
1/26/2007 10112 10445 10125
1/27/2007 10112 10445 10125
1/28/2007 10112 10445 10125
1/29/2007 10058 10435 10072
1/30/2007 10317 10495 10331
1/31/2007 10383 10566 10398
2/1/2007 10431 10625 10446
2/2/2007 10485 10643 10500
2/3/2007 10485 10643 10500
2/4/2007 10485 10643 10500
2/5/2007 10439 10634 10455
2/6/2007 10443 10641 10459
2/7/2007 10369 10660 10383
2/8/2007 10458 10648 10474
2/9/2007 10404 10573 10420
2/10/2007 10404 10573 10420
2/11/2007 10404 10573 10420
2/12/2007 10249 10539 10265
2/13/2007 10394 10621 10409
2/14/2007 10425 10705 10442
2/15/2007 10309 10717 10325
2/16/2007 10323 10708 10340
2/17/2007 10323 10708 10340
2/18/2007 10323 10708 10340
2/19/2007 10323 10708 10340
2/20/2007 10253 10739 10269
2/21/2007 10398 10724 10415
2/22/2007 10532 10717 10550
2/23/2007 10551 10680 10570
2/24/2007 10551 10680 10570
2/25/2007 10551 10680 10570
2/26/2007 10634 10668 10653
2/27/2007 10271 10299 10289
2/28/2007 10307 10359 10324
3/1/2007 10331 10332 10350
3/2/2007 10141 10215 10159
3/3/2007 10141 10215 10159
3/4/2007 10141 10215 10159
3/5/2007 10023 10119 10042
3/6/2007 10216 10276 10235
3/7/2007 10383 10254 10403
3/8/2007 10429 10327 10448
3/9/2007 10437 10334 10458
3/10/2007 10437 10334 10458
3/11/2007 10437 10334 10458
3/12/2007 10387 10362 10409
3/13/2007 10255 10154 10274
3/14/2007 10396 10223 10417
3/15/2007 10377 10261 10397
3/16/2007 10307 10222 10328
3/17/2007 10307 10222 10328
3/18/2007 10307 10222 10328
3/19/2007 10512 10333 10534
3/20/2007 10522 10399 10545
3/21/2007 10723 10577 10747
3/22/2007 10916 10573 10941
3/23/2007 10953 10584 10979
3/24/2007 10953 10584 10979
3/25/2007 10953 10584 10979
3/26/2007 11042 10595 11069
3/27/2007 11015 10529 11042
3/28/2007 10976 10448 11002
3/29/2007 11057 10487 11084
3/30/2007 10934 10475 10960
3/31/2007 10934 10475 10960
4/1/2007 10934 10475 10960
4/2/2007 11086 10502 11114
4/3/2007 11102 10602 11131
4/4/2007 11179 10614 11207
4/5/2007 11233 10649 11262
4/6/2007 11233 10649 11262
4/7/2007 11233 10649 11262
4/8/2007 11233 10649 11262
4/9/2007 11229 10655 11259
4/10/2007 11401 10684 11432
4/11/2007 11335 10615 11366
4/12/2007 11540 10681 11571
4/13/2007 11555 10718 11586
4/14/2007 11555 10718 11586
4/15/2007 11555 10718 11586
4/16/2007 11623 10833 11657
4/17/2007 11517 10855 11551
4/18/2007 11405 10863 11437
4/19/2007 11287 10850 11319
4/20/2007 11445 10951 11478
4/21/2007 11445 10951 11478
4/22/2007 11445 10951 11478
4/23/2007 11501 10926 11535
4/24/2007 11474 10922 11507
4/25/2007 11770 11034 11805
4/26/2007 11737 11026 11771
4/27/2007 11762 11025 11796
4/28/2007 11762 11025 11796
4/29/2007 11762 11025 11796
4/30/2007 11604 10939 11639
5/1/2007 11665 10968 11699
5/2/2007 11801 11040 11838
5/3/2007 11907 11091 11943
5/4/2007 11907 11115 11945
5/5/2007 11907 11115 11945
5/6/2007 11907 11115 11945
5/7/2007 11899 11144 11937
5/8/2007 11855 11132 11892
5/9/2007 11903 11171 11941
5/10/2007 11681 11017 11717
5/11/2007 11936 11124 11975
5/12/2007 11936 11124 11975
5/13/2007 11936 11124 11975
5/14/2007 11963 11105 12001
5/15/2007 11953 11091 11991
5/16/2007 11996 11190 12036
5/17/2007 12198 11181 12238
5/18/2007 12413 11255 12455
5/19/2007 12413 11255 12455
5/20/2007 12413 11255 12455
5/21/2007 12538 11272 12580
5/22/2007 12409 11265 12451
5/23/2007 12453 11252 12495
5/24/2007 12210 11144 12252
5/25/2007 12384 11205 12427
5/26/2007 12384 11205 12427
5/27/2007 12384 11205 12427
5/28/2007 12384 11205 12427
5/29/2007 12320 11224 12363
5/30/2007 12596 11318 12641
5/31/2007 12515 11321 12560
6/1/2007 12617 11363 12663
6/2/2007 12617 11363 12663
6/3/2007 12617 11363 12663
6/4/2007 12878 11384 12926
6/5/2007 12801 11324 12848
6/6/2007 12594 11226 12641
6/7/2007 12332 11030 12378
6/8/2007 12424 11155 12470
6/9/2007 12424 11155 12470
6/10/2007 12424 11155 12470
6/11/2007 12519 11166 12565
6/12/2007 12353 11047 12400
6/13/2007 12658 11217 12705
6/14/2007 12907 11272 12957
6/15/2007 13058 11345 13109
6/16/2007 13058 11345 13109
6/17/2007 13058 11345 13109
6/18/2007 13070 11332 13121
6/19/2007 13078 11352 13129
6/20/2007 12724 11197 12773
6/21/2007 12991 11269 13042
6/22/2007 12940 11124 12992
6/23/2007 12940 11124 12992
6/24/2007 12940 11124 12992
6/25/2007 12726 11088 12777
6/26/2007 12460 11053 12510
6/27/2007 12635 11154 12685
6/28/2007 12545 11150 12596
6/29/2007 12639 11133 12691
6/30/2007 12639 11133 12691
7/1/2007 12639 11133 12691
7/2/2007 12830 11252 12882
7/3/2007 12905 11294 12957
7/4/2007 12905 11294 12957
7/5/2007 12905 11298 12959
7/6/2007 13027 11339 13082
7/7/2007 13027 11339 13082
7/8/2007 13027 11339 13082
7/9/2007 13108 11349 13164
7/10/2007 13006 11188 13060
7/11/2007 12981 11254 13037
7/12/2007 13170 11468 13226
7/13/2007 13251 11504 13309
7/14/2007 13251 11504 13309
7/15/2007 13251 11504 13309
7/16/2007 13056 11482 13112
7/17/2007 12938 11481 12994
7/18/2007 13168 11458 13226
7/19/2007 13328 11510 13385
7/20/2007 13251 11369 13309
7/21/2007 13251 11369 13309
7/22/2007 13251 11369 13309
7/23/2007 13297 11425 13355
7/24/2007 12869 11199 12926
7/25/2007 13035 11251 13093
7/26/2007 12653 10988 12709
7/27/2007 12385 10814 12440
7/28/2007 12385 10814 12440
7/29/2007 12385 10814 12440
7/30/2007 12529 10925 12585
7/31/2007 12446 10787 12502
8/1/2007 12388 10866 12442
8/2/2007 12292 10916 12346
8/3/2007 11864 10627 11917
8/4/2007 11864 10627 11917
8/5/2007 11864 10627 11917
8/6/2007 11916 10884 11969
8/7/2007 12163 10951 12218
8/8/2007 12400 11109 12457
8/9/2007 12097 10781 12152
8/10/2007 12255 10786 12311
8/11/2007 12255 10786 12311
8/12/2007 12255 10786 12311
8/13/2007 12219 10782 12276
8/14/2007 12024 10587 12080
8/15/2007 11698 10443 11752
8/16/2007 11549 10477 11600
8/17/2007 11914 10735 11970
8/18/2007 11914 10735 11970
8/19/2007 11914 10735 11970
8/20/2007 11929 10732 11984
8/21/2007 11756 10744 11811
8/22/2007 11918 10870 11975
8/23/2007 12055 10858 12112
8/24/2007 12288 10985 12347
8/25/2007 12288 10985 12347
8/26/2007 12288 10985 12347
8/27/2007 12132 10892 12191
8/28/2007 11856 10636 11913
8/29/2007 12240 10872 12300
8/30/2007 12184 10827 12243
8/31/2007 12338 10949 12397
9/1/2007 12338 10949 12397
9/2/2007 12338 10949 12397
9/3/2007 12338 10949 12397
9/4/2007 12633 11064 12695
9/5/2007 12635 10942 12697
9/6/2007 12780 10990 12844
9/7/2007 12595 10804 12659
9/8/2007 12595 10804 12659
9/9/2007 12595 10804 12659
9/10/2007 12512 10791 12574
9/11/2007 12716 10938 12779
9/12/2007 12799 10942 12864
9/13/2007 12882 11034 12948
9/14/2007 12917 11037 12983
9/15/2007 12917 11037 12983
9/16/2007 12917 11037 12983
9/17/2007 12871 10980 12938
9/18/2007 13258 11301 13327
9/19/2007 13370 11370 13439
9/20/2007 13415 11296 13487
9/21/2007 13563 11348 13635
9/22/2007 13563 11348 13635
9/23/2007 13563 11348 13635
9/24/2007 13449 11289 13521
9/25/2007 13304 11285 13374
9/26/2007 13306 11348 13379
9/27/2007 13401 11393 13476
9/28/2007 13302 11359 13376
9/29/2007 13302 11359 13376
9/30/2007 13302 11359 13376
10/1/2007 13522 11510 13599
10/2/2007 13433 11507 13507
10/3/2007 13337 11457 13411
10/4/2007 13445 11481 13520
10/5/2007 13474 11594 13551
10/6/2007 13474 11594 13551
10/7/2007 13474 11594 13551
10/8/2007 13345 11557 13422
10/9/2007 13614 11650 13691
10/10/2007 13857 11631 13935
10/11/2007 13876 11572 13954
10/12/2007 13986 11627 14066
10/13/2007 13986 11627 14066
10/14/2007 13986 11627 14066
10/15/2007 14108 11530 14191
10/16/2007 14069 11454 14151
10/17/2007 13957 11475 14038
10/18/2007 14071 11467 14154
10/19/2007 13427 11173 13507
10/20/2007 13427 11173 13507
10/21/2007 13427 11173 13507
10/22/2007 13348 11216 13426
10/23/2007 13499 11315 13579
10/24/2007 13663 11287 13746
10/25/2007 13846 11276 13930
10/26/2007 14079 11432 14164
10/27/2007 14079 11432 14164
10/28/2007 14079 11432 14164
10/29/2007 14104 11476 14190
10/30/2007 13676 11402 13759
10/31/2007 14027 11539 14112
11/1/2007 13680 11237 13776
11/2/2007 13930 11247 14047
11/3/2007 13930 11247 14047
11/4/2007 13930 11247 14047
11/5/2007 13867 11192 13990
11/6/2007 14291 11327 14408
11/7/2007 13869 11000 13977
11/8/2007 13977 10994 14084
11/9/2007 13778 10837 13882
11/10/2007 13778 10837 13882
11/11/2007 13778 10837 13882
11/12/2007 13106 10729 13212
11/13/2007 13456 11045 13570
11/14/2007 13427 10970 13539
11/15/2007 13088 10825 13202
11/16/2007 13345 10882 13465
11/17/2007 13345 10882 13465
11/18/2007 13345 10882 13465
11/19/2007 13165 10692 13270
11/20/2007 13497 10741 13601
11/21/2007 13217 10571 13319
11/22/2007 13217 10571 13319
11/23/2007 13499 10750 13602
11/24/2007 13499 10750 13602
11/25/2007 13499 10750 13602
11/26/2007 13187 10500 13285
11/27/2007 13011 10658 13107
11/28/2007 13217 10966 13312
11/29/2007 13379 10972 13477
11/30/2007 13397 11057 13493
12/1/2007 13397 11057 13493
12/2/2007 13397 11057 13493
12/3/2007 13483 10992 13582
12/4/2007 13352 10920 13452
12/5/2007 13555 11092 13658
12/6/2007 13927 11260 14035
12/7/2007 13911 11240 14017
12/8/2007 13911 11240 14017
12/9/2007 13911 11240 14017
12/10/2007 14013 11325 14122
12/11/2007 13713 11039 13817
12/12/2007 14123 11107 14233
12/13/2007 14185 11121 14297
12/14/2007 14011 10969 14120
12/15/2007 14011 10969 14120
12/16/2007 14011 10969 14120
12/17/2007 13740 10804 13847
12/18/2007 13927 10872 14035
12/19/2007 14046 10857 14157
12/20/2007 14183 10914 14296
12/21/2007 14944 11097 14692
12/22/2007 14944 11097 14692
12/23/2007 14944 11097 14692
12/24/2007 15040 11187 14786
12/25/2007 15040 11187 14786
12/26/2007 15185 11196 14929
12/27/2007 15034 11040 14771
12/28/2007 15140 11056 14883
12/29/2007 15140 11056 14883
12/30/2007 15140 11056 14883
12/31/2007 14990 10980 14727
1/1/2008 14990 10980 14727
1/2/2008 15158 10824 14894
1/3/2008 15152 10824 14887
1/4/2008 14688 10558 14430
1/5/2008 14688 10558 14430
1/6/2008 14688 10558 14430
1/7/2008 14513 10592 14259
1/8/2008 14331 10401 14079
1/9/2008 14498 10544 14242
1/10/2008 14421 10628 14169
1/11/2008 14244 10484 13995
1/12/2008 14244 10484 13995
1/13/2008 14244 10484 13995
1/14/2008 14631 10598 14376
1/15/2008 14027 10334 13780
1/16/2008 13570 10277 13331
1/17/2008 13006 9979 12776
1/18/2008 13045 9918 12815
1/19/2008 13045 9918 12815
1/20/2008 13045 9918 12815
1/21/2008 13045 9918 12815
1/22/2008 12723 9809 12497
1/23/2008 12741 10019 12515
1/24/2008 13189 10120 12956
1/25/2008 13113 9960 12883
1/26/2008 13113 9960 12883
1/27/2008 13113 9960 12883
1/28/2008 13373 10135 13139
1/29/2008 13415 10198 13180
1/30/2008 13314 10150 13080
1/31/2008 13257 10322 13026
2/1/2008 13500 10448 13264
2/2/2008 13500 10448 13264
2/3/2008 13500 10448 13264
2/4/2008 13627 10339 13391
2/5/2008 13089 10009 12861
2/6/2008 12929 9937 12704
2/7/2008 13144 10017 12914
2/8/2008 13426 9975 13193
2/9/2008 13426 9975 13193
2/10/2008 13426 9975 13193
2/11/2008 13844 10035 13606
2/12/2008 13728 10108 13492
2/13/2008 14124 10249 13883
2/14/2008 14069 10112 13828
2/15/2008 13970 10121 13732
2/16/2008 13970 10121 13732
2/17/2008 13970 10121 13732
2/18/2008 13970 10121 13732
2/19/2008 14397 10113 14153
2/20/2008 14668 10198 14420
2/21/2008 14296 10070 14054
2/22/2008 14452 10151 14208
2/23/2008 14452 10151 14208
2/24/2008 14452 10151 14208
2/25/2008 14848 10291 14599
2/26/2008 15086 10362 14834
2/27/2008 14870 10355 14621
2/28/2008 15185 10264 14932
2/29/2008 14666 9986 14421
3/1/2008 14666 9986 14421
3/2/2008 14666 9986 14421
3/3/2008 14791 9992 14544
3/4/2008 14548 9957 14306
3/5/2008 14874 10015 14627
3/6/2008 14546 9796 14302
3/7/2008 14275 9713 14036
3/8/2008 14275 9713 14036
3/9/2008 14275 9713 14036
3/10/2008 14005 9564 13769
3/11/2008 14653 9919 14408
3/12/2008 14410 9833 14168
3/13/2008 14703 9883 14458
3/14/2008 14436 9678 14196
3/15/2008 14436 9678 14196
3/16/2008 14436 9678 14196
3/17/2008 13833 9593 13599
3/18/2008 14436 10000 14195
3/19/2008 13596 9757 13366
3/20/2008 13605 9991 13376
3/21/2008 13605 9991 13376
3/22/2008 13605 9991 13376
3/23/2008 13605 9991 13376
3/24/2008 13848 10144 13617
3/25/2008 14067 10167 13833
3/26/2008 14406 10079 14169
3/27/2008 14237 9965 14003
3/28/2008 14211 9887 13979
3/29/2008 14211 9887 13979
3/30/2008 14211 9887 13979
3/31/2008 14377 9943 14144
4/1/2008 14642 10300 14407
4/2/2008 14837 10282 14600
4/3/2008 14883 10296 14646
4/4/2008 15113 10304 14873
4/5/2008 15113 10304 14873
4/6/2008 15113 10304 14873
4/7/2008 15104 10320 14864
4/8/2008 15249 10271 15007
4/9/2008 15306 10189 15063
4/10/2008 15312 10235 15070
4/11/2008 15052 10027 14812
4/12/2008 15052 10027 14812
4/13/2008 15052 10027 14812
4/14/2008 15407 9993 15162
4/15/2008 15534 10039 15287
4/16/2008 16002 10268 15752
4/17/2008 15974 10275 15726
4/18/2008 16368 10461 16117
4/19/2008 16368 10461 16117
4/20/2008 16368 10461 16117
4/21/2008 16523 10445 16270
4/22/2008 16418 10353 16165
4/23/2008 16221 10383 15972
4/24/2008 15834 10450 15589
4/25/2008 16125 10518 15876
4/26/2008 16125 10518 15876
4/27/2008 16125 10518 15876
4/28/2008 16048 10508 15801
4/29/2008 15612 10467 15370
4/30/2008 15678 10427 15434
5/1/2008 15413 10608 15172
5/2/2008 15717 10642 15474
5/3/2008 15717 10642 15474
5/4/2008 15717 10642 15474
5/5/2008 15963 10595 15714
5/6/2008 16418 10677 16162
5/7/2008 16195 10488 15943
5/8/2008 16578 10527 16322
5/9/2008 16508 10458 16255
5/10/2008 16508 10458 16255
5/11/2008 16508 10458 16255
5/12/2008 16482 10573 16229
5/13/2008 16780 10572 16523
5/14/2008 16512 10616 16261
5/15/2008 16885 10730 16629
5/16/2008 17391 10744 17129
5/17/2008 17391 10744 17129
5/18/2008 17391 10744 17129
5/19/2008 17476 10754 17215
5/20/2008 17669 10654 17405
5/21/2008 17369 10484 17108
5/22/2008 17204 10513 16947
5/23/2008 16865 10375 16611
5/24/2008 16865 10375 16611
5/25/2008 16865 10375 16611
5/26/2008 16865 10375 16611
5/27/2008 16788 10446 16537
5/28/2008 17134 10489 16880
5/29/2008 16679 10546 16430
5/30/2008 16918 10562 16667
5/31/2008 16918 10562 16667
6/1/2008 16918 10562 16667
6/2/2008 17084 10452 16831
6/3/2008 16852 10392 16602
6/4/2008 16600 10393 16355
6/5/2008 17305 10597 17052
6/6/2008 17113 10271 16860
6/7/2008 17113 10271 16860
6/8/2008 17113 10271 16860
6/9/2008 17588 10279 17331
6/10/2008 17113 10254 16862
6/11/2008 17264 10083 17009
6/12/2008 16933 10117 16683
6/13/2008 17099 10269 16849
6/14/2008 17099 10269 16849
6/15/2008 17099 10269 16849
6/16/2008 17178 10270 16927
6/17/2008 17564 10201 17307
6/18/2008 17638 10102 17381
6/19/2008 17255 10143 17004
6/20/2008 17139 9955 16890
6/21/2008 17139 9955 16890
6/22/2008 17139 9955 16890
6/23/2008 17853 9955 17599
6/24/2008 17511 9927 17262
6/25/2008 17356 9986 17106
6/26/2008 17159 9695 16911
6/27/2008 17367 9660 17119
6/28/2008 17367 9660 17119
6/29/2008 17367 9660 17119
6/30/2008 17689 9672 17438
7/1/2008 17796 9711 17545
7/2/2008 17040 9535 16795
7/3/2008 16748 9545 16508
7/4/2008 16748 9545 16508
7/5/2008 16748 9545 16508
7/6/2008 16748 9545 16508
7/7/2008 16354 9465 16116
7/8/2008 16101 9631 15866
7/9/2008 15639 9412 15410
7/10/2008 16095 9478 15860
7/11/2008 16075 9374 15841
7/12/2008 16075 9374 15841
7/13/2008 16075 9374 15841
7/14/2008 16237 9289 16002
7/15/2008 15562 9188 15333
7/16/2008 15321 9420 15096
7/17/2008 14922 9533 14701
7/18/2008 15097 9536 14874
7/19/2008 15097 9536 14874
7/20/2008 15097 9536 14874
7/21/2008 15696 9531 15468
7/22/2008 15192 9660 14968
7/23/2008 14461 9699 14246
7/24/2008 14264 9475 14050
7/25/2008 14451 9515 14235
7/26/2008 14451 9515 14235
7/27/2008 14451 9515 14235
7/28/2008 14433 9338 14218
7/29/2008 14269 9557 14055
7/30/2008 15148 9716 14927
7/31/2008 14591 9591 14374
8/1/2008 14584 9537 14369
8/2/2008 14584 9537 14369
8/3/2008 14584 9537 14369
8/4/2008 13683 9452 13477
8/5/2008 13797 9724 13590
8/6/2008 14190 9761 13978
8/7/2008 13900 9587 13691
8/8/2008 13731 9816 13525
8/9/2008 13731 9816 13525
8/10/2008 13731 9816 13525
8/11/2008 13685 9887 13480
8/12/2008 13641 9768 13435
8/13/2008 14194 9743 13983
8/14/2008 13986 9797 13778
8/15/2008 13751 9838 13547
8/16/2008 13751 9838 13547
8/17/2008 13751 9838 13547
8/18/2008 13519 9690 13316
8/19/2008 13975 9601 13768
8/20/2008 14464 9661 14254
8/21/2008 14694 9686 14482
8/22/2008 14352 9797 14142
8/23/2008 14352 9797 14142
8/24/2008 14352 9797 14142
8/25/2008 14203 9604 13995
8/26/2008 14525 9640 14314
8/27/2008 14797 9718 14587
8/28/2008 14582 9864 14373
8/29/2008 14426 9729 14217
8/30/2008 14426 9729 14217
8/31/2008 14426 9729 14217
9/1/2008 14426 9729 14217
9/2/2008 13567 9690 13363
9/3/2008 13442 9675 13239
9/4/2008 13218 9386 13015
9/5/2008 13223 9428 13021
9/6/2008 13223 9428 13021
9/7/2008 13223 9428 13021
9/8/2008 13008 9623 12807
9/9/2008 11969 9294 11773
9/10/2008 12390 9352 12191
9/11/2008 12681 9484 12482
9/12/2008 13115 9504 12914
9/13/2008 13115 9504 12914
9/14/2008 13115 9504 12914
9/15/2008 11958 9056 11761
9/16/2008 12365 9215 12168
9/17/2008 12061 8781 11864
9/18/2008 12458 9164 12258
9/19/2008 13439 9533 13235
9/20/2008 13439 9533 13235
9/21/2008 13439 9533 13235
9/22/2008 13254 9169 13050
9/23/2008 12814 9026 12616
9/24/2008 12803 9008 12606
9/25/2008 13050 9185 12853
9/26/2008 12638 9216 12449
9/27/2008 12638 9216 12449
9/28/2008 12638 9216 12449
9/29/2008 11062 8407 10899
9/30/2008 11742 8862 11567
10/1/2008 11320 8824 11153
10/2/2008 10167 8469 10022
10/3/2008 10109 8355 9963
10/4/2008 10109 8355 9963
10/5/2008 10109 8355 9963
10/6/2008 9494 8034 9355
10/7/2008 8717 7573 8590
10/8/2008 8783 7491 8653
10/9/2008 7864 6920 7746
10/10/2008 7216 6840 7107
10/11/2008 7216 6840 7107
10/12/2008 7216 6840 7107
10/13/2008 8774 7632 8644
10/14/2008 8800 7591 8673
10/15/2008 7313 6906 7207
10/16/2008 7812 7200 7699
10/17/2008 7959 7155 7844
10/18/2008 7959 7155 7844
10/19/2008 7959 7155 7844
10/20/2008 8862 7496 8733
10/21/2008 8530 7265 8407
10/22/2008 7480 6824 7372
10/23/2008 7730 6910 7618
10/24/2008 7392 6672 7286
10/25/2008 7392 6672 7286
10/26/2008 7392 6672 7286
10/27/2008 6911 6460 6813
10/28/2008 7634 7157 7525
10/29/2008 8031 7078 7915
10/30/2008 8563 7262 8441
10/31/2008 8725 7374 8600
</Table>
TOTAL RETURNS FOR THE PERIOD ENDED OCTOBER 31, 2008
- --------------------------------------------------------------------------------
<Table>
<Caption>
SINCE INCEPTION
ONE YEAR (11/01/06)
-------- ---------------
RYDEX S&P EQUAL WEIGHT ENERGY ETF................................. -39.28% -7.71%
S&P 500 EQUAL WEIGHT ENERGY TOTAL RETURN INDEX.................... -39.06% -7.28%
S&P 500 TOTAL RETURN INDEX........................................ -36.10% -14.15%
</Table>
The returns presented above do not reflect the effect of taxes. Index returns
represent total returns. Past performance is no guarantee of future results.
21 ANNUAL REPORT
Rydex S&P Equal Weight Energy ETF
PORTFOLIO SUMMARY (Unaudited) As of October 31, 2008
- --------------------------------------------------------------------------------
TOP 10 HOLDINGS*
- --------------------------------------------------------------------------------
<Table>
<Caption>
DESCRIPTION % OF NET ASSETS
- ------------------------------------------------------------------------------------
SOUTHWESTERN ENERGY CO. 3.91%
EXXON MOBIL CORP. 3.38%
CHEVRON CORP. 3.21%
NOBLE ENERGY, INC. 3.17%
EOG RESOURCES, INC. 3.11%
RANGE RESOURCES CORP. 3.03%
WILLIAMS COS., INC. 3.00%
DEVON ENERGY CORP. 2.93%
SPECTRA ENERGY CORP. 2.79%
OCCIDENTAL PETROLEUM CORP. 2.79%
- ------------------------------------------------------------------------------------
</Table>
INDUSTRY ALLOCATIONS*
(PIE CHART)
<Table>
Oil, Gas & Consumable Fuels 71.86
Energy Equipment & Services 28.14
</Table>
* The Fund's Top Ten Holdings are expressed as a percentage of net assets and
the Industry Allocations are expressed as a percentage of the Fund's
investments market value. These percentages may change over time.
22
RYDEX S&P EQUAL WEIGHT FINANCIALS ETF
MANAGER'S ANALYSIS (Unaudited)
- --------------------------------------------------------------------------------
For the year ending October 31, 2008, Rydex S&P Equal Weight Financials ETF
returned -52.88%. For the same period, its benchmark, the S&P Equal Weight
Financials Total Return Index, returned -51.98% as compared to its cap-weighted
peer index, the S&P 500 Equal Weight Financials Total Return Index, which
delivered a -52.09% total return for the same time period.
It's been a hard year for financials, which were already struggling before the
massive credit crisis hit. Adding significantly to the losses in this sector was
the insurance industry, the new pariah in the financials sector. That being
said, the insurance industry was the biggest reason for the outperformance of
the S&P 500 Equal Weight Financials Index. Despite having a larger allocation to
insurance companies than its cap-weight counterpart, its broader diversification
among companies in the industry allowed it to have less exposure to AIG in
particular, which suffered a massive loss in value.
CUMULATIVE FUND PERFORMANCE: NOVEMBER 1, 2006 - OCTOBER 31, 2008
(Performance Graph)
<Table>
<Caption>
S&P 500
RYDEX S&P S&P 500 EQUAL WEIGHT
EQUAL WEIGHT TOTAL RETURN FINANCIALS TOTAL
FINANCIALS ETF(A) INDEX(B) RETURN INDEX(C)
----------------- ------------ ----------------
11/1/2006 10000 10000 9999
11/2/2006 9969 9999 9968
11/3/2006 9926 9978 9925
11/4/2006 9926 9978 9925
11/5/2006 9926 9978 9925
11/6/2006 10058 10091 10057
11/7/2006 10066 10114 10066
11/8/2006 10082 10137 10082
11/9/2006 10021 10085 10021
11/10/2006 10072 10104 10072
11/11/2006 10072 10104 10072
11/12/2006 10072 10104 10072
11/13/2006 10091 10132 10092
11/14/2006 10152 10198 10153
11/15/2006 10165 10225 10166
11/16/2006 10239 10249 10240
11/17/2006 10212 10259 10215
11/18/2006 10212 10259 10215
11/19/2006 10212 10259 10215
11/20/2006 10276 10254 10278
11/21/2006 10282 10272 10283
11/22/2006 10305 10297 10308
11/23/2006 10305 10297 10308
11/24/2006 10276 10260 10281
11/25/2006 10276 10260 10281
11/26/2006 10276 10260 10281
11/27/2006 10091 10120 10093
11/28/2006 10109 10158 10112
11/29/2006 10198 10256 10202
11/30/2006 10198 10264 10203
12/1/2006 10159 10236 10163
12/2/2006 10159 10236 10163
12/3/2006 10159 10236 10163
12/4/2006 10307 10327 10312
12/5/2006 10340 10368 10345
12/6/2006 10356 10357 10362
12/7/2006 10321 10317 10327
12/8/2006 10342 10336 10349
12/9/2006 10342 10336 10349
12/10/2006 10342 10336 10349
12/11/2006 10373 10359 10380
12/12/2006 10389 10349 10396
12/13/2006 10383 10363 10391
12/14/2006 10447 10453 10454
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12/21/2006 10478 10404 10487
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12/27/2006 10584 10470 10595
12/28/2006 10565 10455 10576
12/29/2006 10505 10408 10517
12/30/2006 10505 10408 10517
12/31/2006 10505 10408 10517
1/1/2007 10505 10408 10517
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1/5/2007 10450 10347 10461
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1/26/2007 10635 10445 10652
1/27/2007 10635 10445 10652
1/28/2007 10635 10445 10652
1/29/2007 10621 10435 10638
1/30/2007 10698 10495 10715
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2/1/2007 10820 10625 10839
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2/27/2007 10472 10299 10491
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3/21/2007 10644 10577 10669
3/22/2007 10576 10573 10603
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3/24/2007 10611 10584 10637
3/25/2007 10611 10584 10637
3/26/2007 10559 10595 10585
3/27/2007 10464 10529 10490
3/28/2007 10344 10448 10369
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3/31/2007 10394 10475 10420
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5/20/2007 10927 11255 10965
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5/22/2007 10973 11265 11011
5/23/2007 10954 11252 10993
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5/25/2007 10850 11205 10889
5/26/2007 10850 11205 10889
5/27/2007 10850 11205 10889
5/28/2007 10850 11205 10889
5/29/2007 10933 11224 10972
5/30/2007 11043 11318 11083
5/31/2007 11021 11321 11061
6/1/2007 11058 11363 11099
6/2/2007 11058 11363 11099
6/3/2007 11058 11363 11099
6/4/2007 11072 11384 11115
6/5/2007 10977 11324 11017
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6/17/2007 10944 11345 10985
6/18/2007 10927 11332 10965
6/19/2007 10946 11352 10987
6/20/2007 10765 11197 10806
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6/22/2007 10641 11124 10680
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6/25/2007 10566 11088 10605
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6/30/2007 10589 11133 10629
7/1/2007 10589 11133 10629
7/2/2007 10739 11252 10779
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7/13/2007 10770 11504 10814
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7/16/2007 10737 11482 10781
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7/22/2007 10382 11369 10425
7/23/2007 10376 11425 10419
7/24/2007 10070 11199 10110
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7/28/2007 9745 10814 9786
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9/20/2007 9966 11296 10017
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9/22/2007 9976 11348 10027
9/23/2007 9976 11348 10027
9/24/2007 9872 11289 9923
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9/26/2007 9901 11348 9953
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9/30/2007 9970 11359 10022
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10/14/2007 10278 11627 10336
10/15/2007 10087 11530 10143
10/16/2007 9920 11454 9973
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10/18/2007 9786 11467 9837
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10/21/2007 9501 11173 9549
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11/5/2007 9163 11192 9214
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11/16/2007 8933 10882 8994
11/17/2007 8933 10882 8994
11/18/2007 8933 10882 8994
11/19/2007 8686 10692 8744
11/20/2007 8577 10741 8634
11/21/2007 8422 10571 8476
11/22/2007 8422 10571 8476
11/23/2007 8680 10750 8739
11/24/2007 8680 10750 8739
11/25/2007 8680 10750 8739
11/26/2007 8302 10500 8356
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11/29/2007 8843 10972 8904
11/30/2007 9059 11057 9128
12/1/2007 9059 11057 9128
12/2/2007 9059 11057 9128
12/3/2007 8962 10992 9033
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12/11/2007 8856 11039 8925
12/12/2007 8828 11107 8899
12/13/2007 8793 11121 8861
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12/20/2007 8487 10914 8553
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12/22/2007 8669 11097 8738
12/23/2007 8669 11097 8738
12/24/2007 8826 11187 8899
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12/30/2007 8528 11056 8595
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1/1/2008 8587 10980 8657
1/2/2008 8416 10824 8484
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1/4/2008 8040 10558 8098
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1/28/2008 8254 10135 8318
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1/30/2008 8269 10150 8332
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3/17/2008 7035 9593 7077
3/18/2008 7543 10000 7597
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3/21/2008 7783 9991 7844
3/22/2008 7783 9991 7844
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3/24/2008 7973 10144 8034
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3/26/2008 7735 10079 7791
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3/28/2008 7440 9887 7492
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3/30/2008 7440 9887 7492
3/31/2008 7499 9943 7553
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5/21/2008 7586 10484 7662
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5/23/2008 7525 10375 7601
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5/26/2008 7525 10375 7601
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6/1/2008 7629 10562 7707
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6/4/2008 7433 10393 7512
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6/10/2008 7160 10254 7239
6/11/2008 6914 10083 6991
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6/16/2008 7255 10270 7337
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6/20/2008 6867 9955 6944
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6/22/2008 6867 9955 6944
6/23/2008 6659 9955 6733
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6/26/2008 6494 9695 6566
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6/30/2008 6292 9672 6360
7/1/2008 6380 9711 6449
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7/5/2008 6213 9545 6279
7/6/2008 6213 9545 6279
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7/8/2008 6397 9631 6467
7/9/2008 6033 9412 6097
7/10/2008 5982 9478 6046
7/11/2008 5850 9374 5914
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7/14/2008 5503 9289 5561
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7/17/2008 6352 9533 6425
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7/21/2008 6296 9531 6369
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7/23/2008 6809 9699 6890
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7/27/2008 6324 9515 6396
7/28/2008 6072 9338 6139
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8/1/2008 6566 9537 6645
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8/5/2008 6824 9724 6907
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8/9/2008 6760 9816 6842
8/10/2008 6760 9816 6842
8/11/2008 6891 9887 6976
8/12/2008 6583 9768 6662
8/13/2008 6433 9743 6510
8/14/2008 6626 9797 6706
8/15/2008 6726 9838 6808
8/16/2008 6726 9838 6808
8/17/2008 6726 9838 6808
8/18/2008 6504 9690 6585
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8/29/2008 6754 9729 6843
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8/31/2008 6754 9729 6843
9/1/2008 6754 9729 6843
9/2/2008 6869 9690 6961
9/3/2008 6972 9675 7065
9/4/2008 6683 9386 6771
9/5/2008 6873 9428 6965
9/6/2008 6873 9428 6965
9/7/2008 6873 9428 6965
9/8/2008 7151 9623 7250
9/9/2008 6685 9294 6773
9/10/2008 6632 9352 6719
9/11/2008 6709 9484 6797
9/12/2008 6749 9504 6837
9/13/2008 6749 9504 6837
9/14/2008 6749 9504 6837
9/15/2008 6200 9056 6279
9/16/2008 6506 9215 6591
9/17/2008 5978 8781 6055
9/18/2008 6801 9164 6891
9/19/2008 7397 9533 7497
9/20/2008 7397 9533 7497
9/21/2008 7397 9533 7497
9/22/2008 6724 9169 6830
9/23/2008 6632 9026 6740
9/24/2008 6480 9008 6609
9/25/2008 6607 9185 6745
9/26/2008 6641 9216 6799
9/27/2008 6641 9216 6799
9/28/2008 6641 9216 6799
9/29/2008 5504 8407 5661
9/30/2008 6156 8862 6325
10/1/2008 6237 8824 6392
10/2/2008 5893 8469 6030
10/3/2008 5770 8355 5898
10/4/2008 5770 8355 5898
10/5/2008 5770 8355 5898
10/6/2008 5514 8034 5642
10/7/2008 4989 7573 5109
10/8/2008 4796 7491 4914
10/9/2008 4125 6920 4235
10/10/2008 4421 6840 4541
10/11/2008 4421 6840 4541
10/12/2008 4421 6840 4541
10/13/2008 4888 7632 5015
10/14/2008 5164 7591 5283
10/15/2008 4632 6906 4738
10/16/2008 4729 7200 4838
10/17/2008 4680 7155 4788
10/18/2008 4680 7155 4788
10/19/2008 4680 7155 4788
10/20/2008 4789 7496 4903
10/21/2008 4684 7265 4792
10/22/2008 4294 6824 4392
10/23/2008 4174 6910 4270
10/24/2008 4010 6672 4105
10/25/2008 4010 6672 4105
10/26/2008 4010 6672 4105
10/27/2008 3851 6460 3939
10/28/2008 4387 7157 4491
10/29/2008 4335 7078 4438
10/30/2008 4404 7262 4509
10/31/2008 4606 7374 4720
</Table>
TOTAL RETURNS FOR THE PERIOD ENDED OCTOBER 31, 2008
- --------------------------------------------------------------------------------
<Table>
<Caption>
SINCE INCEPTION
ONE YEAR (11/01/06)
-------- ---------------
RYDEX S&P EQUAL WEIGHT FINANCIALS ETF............................. -52.88% -32.13%
S&P 500 EQUAL WEIGHT FINANCIALS TOTAL RETURN INDEX................ -51.98% -31.34%
S&P 500 TOTAL RETURN INDEX........................................ -36.10% -14.15%
</Table>
The returns presented above do not reflect the effect of taxes. Index returns
represent total returns. Past performance is no guarantee of future results.
23 ANNUAL REPORT
Rydex S&P Equal Weight Financials ETF
PORTFOLIO SUMMARY (Unaudited) As of October 31, 2008
- --------------------------------------------------------------------------------
TOP 10 HOLDINGS*
- --------------------------------------------------------------------------------
<Table>
<Caption>
DESCRIPTION % OF NET ASSETS
- ------------------------------------------------------------------------------------
INTERCONTINENTAL EXCHANGE, INC. 1.96%
BANK OF NEW YORK MELLON CORP. 1.74%
JPMORGAN CHASE & CO. 1.73%
HUDSON CITY BANCORP, INC. 1.64%
WELLS FARGO & CO. 1.59%
BB&T CORP. 1.59%
KEYCORP. 1.58%
AON CORP. 1.58%
M&T BANK CORP. 1.58%
MARSH & MCLENNAN COS., INC. 1.56%
- ------------------------------------------------------------------------------------
</Table>
INDUSTRY ALLOCATIONS*
(PIE CHART)
<Table>
Insurance 22.90
Commercial Banks 21.79
Capital Markets 19.39
Real Estate Investment Trusts (REITs) 14.62
Diversified Financial Services 12.94
Consumer Finance 5.25
Thrifts & Mortgage Finance 2.22
Real Estate Management & Development 0.89
</Table>
* The Fund's Top Ten Holdings are expressed as a percentage of net assets and
the Industry Allocations are expressed as a percentage of the Fund's
investments market value. These percentages may change over time.
24
RYDEX S&P EQUAL WEIGHT HEALTH CARE ETF
MANAGER'S ANALYSIS (Unaudited)
- --------------------------------------------------------------------------------
For the year ending October 31, 2008, Rydex S&P Equal Weight Health Care ETF
returned -26.98%. For the same period, its benchmark, the S&P Equal Weight
Health Care Total Return Index, returned -25.75%. Rydex S&P Equal Weight Health
Care ETF underperformed the cap-weighted S&P 500 Health Care Index by only about
3% for the year ending 10/31/08.
Both Rydex S&P Equal Weight Health Care ETF and traditional cap-weighted
strategies were bolstered by strong gains in biotechnology leaders and hurt by
the health care providers and services industry, once of the hardest hit
industries in the health care sector. Indeed, it was this equal weight exposure
to the health care providers and services industry that was most responsible for
the Rydex S&P Equal Weight Health Care ETF underperformance, while the cap-
weighted S&P 500 Health Care Index was hurt most by pharmaceuticals.
CUMULATIVE FUND PERFORMANCE: NOVEMBER 1, 2006 - OCTOBER 31, 2008
(Performance Graph)
<Table>
<Caption>
S&P 500
RYDEX S&P EQUAL WEIGHT
EQUAL WEIGHT S&P 500 HEALTH CARE
HEALTH CARE TOTAL RETURN TOTAL RETURN
ETF(A) INDEX(B) INDEX(C)
------------ ------------ ------------
11/1/2006 10000 10000 10002
11/2/2006 10053 9999 10053
11/3/2006 9994 9978 9995
11/4/2006 9994 9978 9995
11/5/2006 9994 9978 9995
11/6/2006 10121 10091 10123
11/7/2006 10190 10114 10193
11/8/2006 10045 10137 10053
11/9/2006 9865 10085 9872
11/10/2006 9919 10104 9931
11/11/2006 9919 10104 9931
11/12/2006 9919 10104 9931
11/13/2006 9935 10132 9945
11/14/2006 9994 10198 10005
11/15/2006 10036 10225 10047
11/16/2006 10095 10249 10106
11/17/2006 10083 10259 10095
11/18/2006 10083 10259 10095
11/19/2006 10083 10259 10095
11/20/2006 10047 10254 10057
11/21/2006 10038 10272 10050
11/22/2006 10105 10297 10116
11/23/2006 10105 10297 10116
11/24/2006 10055 10260 10068
11/25/2006 10055 10260 10068
11/26/2006 10055 10260 10068
11/27/2006 9978 10120 9989
11/28/2006 9994 10158 10006
11/29/2006 10059 10256 10071
11/30/2006 10111 10264 10123
12/1/2006 10103 10236 10116
12/2/2006 10103 10236 10116
12/3/2006 10103 10236 10116
12/4/2006 10210 10327 10225
12/5/2006 10247 10368 10261
12/6/2006 10281 10357 10295
12/7/2006 10257 10317 10271
12/8/2006 10267 10336 10280
12/9/2006 10267 10336 10280
12/10/2006 10267 10336 10280
12/11/2006 10293 10359 10307
12/12/2006 10299 10349 10314
12/13/2006 10267 10363 10282
12/14/2006 10303 10453 10319
12/15/2006 10328 10465 10342
12/16/2006 10328 10465 10342
12/17/2006 10328 10465 10342
12/18/2006 10313 10431 10329
12/19/2006 10350 10454 10365
12/20/2006 10366 10440 10382
12/21/2006 10364 10404 10381
12/22/2006 10305 10350 10323
12/23/2006 10305 10350 10323
12/24/2006 10305 10350 10323
12/25/2006 10305 10350 10323
12/26/2006 10319 10395 10337
12/27/2006 10349 10470 10367
12/28/2006 10345 10455 10363
12/29/2006 10309 10408 10326
12/30/2006 10309 10408 10326
12/31/2006 10309 10408 10326
1/1/2007 10309 10408 10326
1/2/2007 10309 10408 10326
1/3/2007 10293 10398 10312
1/4/2007 10360 10411 10378
1/5/2007 10313 10347 10332
1/6/2007 10313 10347 10332
1/7/2007 10313 10347 10332
1/8/2007 10362 10373 10380
1/9/2007 10352 10368 10370
1/10/2007 10380 10389 10398
1/11/2007 10503 10455 10523
1/12/2007 10544 10506 10564
1/13/2007 10544 10506 10564
1/14/2007 10544 10506 10564
1/15/2007 10544 10506 10564
1/16/2007 10582 10515 10603
1/17/2007 10643 10506 10664
1/18/2007 10641 10475 10662
1/19/2007 10659 10506 10681
1/20/2007 10659 10506 10681
1/21/2007 10659 10506 10681
1/22/2007 10598 10451 10620
1/23/2007 10600 10488 10622
1/24/2007 10675 10577 10698
1/25/2007 10637 10458 10659
1/26/2007 10621 10445 10642
1/27/2007 10621 10445 10642
1/28/2007 10621 10445 10642
1/29/2007 10641 10435 10664
1/30/2007 10730 10495 10752
1/31/2007 10782 10566 10805
2/1/2007 10861 10625 10885
2/2/2007 10857 10643 10880
2/3/2007 10857 10643 10880
2/4/2007 10857 10643 10880
2/5/2007 10861 10634 10886
2/6/2007 10853 10641 10877
2/7/2007 10871 10660 10896
2/8/2007 10879 10648 10903
2/9/2007 10835 10573 10859
2/10/2007 10835 10573 10859
2/11/2007 10835 10573 10859
2/12/2007 10817 10539 10841
2/13/2007 10851 10621 10876
2/14/2007 10922 10705 10947
2/15/2007 11009 10717 11035
2/16/2007 10981 10708 11007
2/17/2007 10981 10708 11007
2/18/2007 10981 10708 11007
2/19/2007 10981 10708 11007
2/20/2007 11013 10739 11039
2/21/2007 10997 10724 11023
2/22/2007 10975 10717 11002
2/23/2007 10952 10680 10980
2/24/2007 10952 10680 10980
2/25/2007 10952 10680 10980
2/26/2007 10924 10668 10951
2/27/2007 10610 10299 10636
2/28/2007 10651 10359 10677
3/1/2007 10580 10332 10606
3/2/2007 10463 10215 10489
3/3/2007 10463 10215 10489
3/4/2007 10463 10215 10489
3/5/2007 10376 10119 10402
3/6/2007 10497 10276 10525
3/7/2007 10467 10254 10494
3/8/2007 10534 10327 10562
3/9/2007 10548 10334 10576
3/10/2007 10548 10334 10576
3/11/2007 10548 10334 10576
3/12/2007 10578 10362 10606
3/13/2007 10410 10154 10439
3/14/2007 10481 10223 10509
3/15/2007 10515 10261 10544
3/16/2007 10504 10222 10533
3/17/2007 10504 10222 10533
3/18/2007 10504 10222 10533
3/19/2007 10616 10333 10655
3/20/2007 10642 10399 10680
3/21/2007 10755 10577 10808
3/22/2007 10792 10573 10834
3/23/2007 10796 10584 10839
3/24/2007 10796 10584 10839
3/25/2007 10796 10584 10839
3/26/2007 10794 10595 10837
3/27/2007 10741 10529 10784
3/28/2007 10690 10448 10734
3/29/2007 10707 10487 10750
3/30/2007 10743 10475 10786
3/31/2007 10743 10475 10786
4/1/2007 10743 10475 10786
4/2/2007 10777 10502 10822
4/3/2007 10911 10602 10955
4/4/2007 10941 10614 10986
4/5/2007 11020 10649 11067
4/6/2007 11020 10649 11067
4/7/2007 11020 10649 11067
4/8/2007 11020 10649 11067
4/9/2007 11022 10655 11069
4/10/2007 11057 10684 11104
4/11/2007 11045 10615 11091
4/12/2007 11168 10681 11216
4/13/2007 11243 10718 11291
4/14/2007 11243 10718 11291
4/15/2007 11243 10718 11291
4/16/2007 11346 10833 11395
4/17/2007 11366 10855 11416
4/18/2007 11354 10863 11403
4/19/2007 11383 10850 11432
4/20/2007 11449 10951 11501
4/21/2007 11449 10951 11501
4/22/2007 11449 10951 11501
4/23/2007 11536 10926 11588
4/24/2007 11571 10922 11624
4/25/2007 11603 11034 11655
4/26/2007 11589 11026 11641
4/27/2007 11557 11025 11608
4/28/2007 11557 11025 11608
4/29/2007 11557 11025 11608
4/30/2007 11490 10939 11542
5/1/2007 11547 10968 11600
5/2/2007 11630 11040 11683
5/3/2007 11646 11091 11699
5/4/2007 11690 11115 11744
5/5/2007 11690 11115 11744
5/6/2007 11690 11115 11744
5/7/2007 11729 11144 11784
5/8/2007 11696 11132 11750
5/9/2007 11729 11171 11783
5/10/2007 11565 11017 11620
5/11/2007 11623 11124 11679
5/12/2007 11623 11124 11679
5/13/2007 11623 11124 11679
5/14/2007 11579 11105 11634
5/15/2007 11581 11091 11636
5/16/2007 11704 11190 11760
5/17/2007 11642 11181 11698
5/18/2007 11694 11255 11750
5/19/2007 11694 11255 11750
5/20/2007 11694 11255 11750
5/21/2007 11680 11272 11737
5/22/2007 11686 11265 11743
5/23/2007 11704 11252 11761
5/24/2007 11676 11144 11733
5/25/2007 11717 11205 11774
5/26/2007 11717 11205 11774
5/27/2007 11717 11205 11774
5/28/2007 11717 11205 11774
5/29/2007 11715 11224 11772
5/30/2007 11721 11318 11779
5/31/2007 11737 11321 11795
6/1/2007 11781 11363 11841
6/2/2007 11781 11363 11841
6/3/2007 11781 11363 11841
6/4/2007 11797 11384 11857
6/5/2007 11743 11324 11802
6/6/2007 11660 11226 11720
6/7/2007 11500 11030 11558
6/8/2007 11583 11155 11642
6/9/2007 11583 11155 11642
6/10/2007 11583 11155 11642
6/11/2007 11587 11166 11646
6/12/2007 11500 11047 11559
6/13/2007 11597 11217 11657
6/14/2007 11603 11272 11663
6/15/2007 11657 11345 11718
6/16/2007 11657 11345 11718
6/17/2007 11657 11345 11718
6/18/2007 11623 11332 11686
6/19/2007 11647 11352 11708
6/20/2007 11507 11197 11567
6/21/2007 11534 11269 11595
6/22/2007 11384 11124 11444
6/23/2007 11384 11124 11444
6/24/2007 11384 11124 11444
6/25/2007 11352 11088 11412
6/26/2007 11406 11053 11466
6/27/2007 11483 11154 11544
6/28/2007 11479 11150 11541
6/29/2007 11441 11133 11502
6/30/2007 11441 11133 11502
7/1/2007 11441 11133 11502
7/2/2007 11554 11252 11617
7/3/2007 11580 11294 11643
7/4/2007 11580 11294 11643
7/5/2007 11601 11298 11665
7/6/2007 11637 11339 11701
7/7/2007 11637 11339 11701
7/8/2007 11637 11339 11701
7/9/2007 11595 11349 11658
7/10/2007 11489 11188 11554
7/11/2007 11580 11254 11644
7/12/2007 11734 11468 11799
7/13/2007 11702 11504 11767
7/14/2007 11702 11504 11767
7/15/2007 11702 11504 11767
7/16/2007 11686 11482 11751
7/17/2007 11651 11481 11717
7/18/2007 11653 11458 11720
7/19/2007 11607 11510 11672
7/20/2007 11489 11369 11555
7/21/2007 11489 11369 11555
7/22/2007 11489 11369 11555
7/23/2007 11560 11425 11627
7/24/2007 11453 11199 11518
7/25/2007 11461 11251 11528
7/26/2007 11238 10988 11302
7/27/2007 11050 10814 11115
7/28/2007 11050 10814 11115
7/29/2007 11050 10814 11115
7/30/2007 11139 10925 11204
7/31/2007 11032 10787 11095
8/1/2007 11096 10866 11161
8/2/2007 11220 10916 11286
8/3/2007 11048 10627 11112
8/4/2007 11048 10627 11112
8/5/2007 11048 10627 11112
8/6/2007 11271 10884 11338
8/7/2007 11232 10951 11298
8/8/2007 11271 11109 11336
8/9/2007 10989 10781 11053
8/10/2007 11068 10786 11134
8/11/2007 11068 10786 11134
8/12/2007 11068 10786 11134
8/13/2007 11101 10782 11166
8/14/2007 10973 10587 11037
8/15/2007 10868 10443 10933
8/16/2007 10809 10477 10873
8/17/2007 10957 10735 11023
8/18/2007 10957 10735 11023
8/19/2007 10957 10735 11023
8/20/2007 10961 10732 11029
8/21/2007 10983 10744 11050
8/22/2007 11086 10870 11154
8/23/2007 11105 10858 11173
8/24/2007 11194 10985 11263
8/25/2007 11194 10985 11263
8/26/2007 11194 10985 11263
8/27/2007 11135 10892 11203
8/28/2007 10961 10636 11029
8/29/2007 11096 10872 11166
8/30/2007 11086 10827 11155
8/31/2007 11145 10949 11215
9/1/2007 11145 10949 11215
9/2/2007 11145 10949 11215
9/3/2007 11145 10949 11215
9/4/2007 11240 11064 11311
9/5/2007 11198 10942 11269
9/6/2007 11293 10990 11363
9/7/2007 11151 10804 11222
9/8/2007 11151 10804 11222
9/9/2007 11151 10804 11222
9/10/2007 11149 10791 11219
9/11/2007 11273 10938 11345
9/12/2007 11303 10942 11375
9/13/2007 11321 11034 11392
9/14/2007 11307 11037 11379
9/15/2007 11307 11037 11379
9/16/2007 11307 11037 11379
9/17/2007 11226 10980 11298
9/18/2007 11431 11301 11505
9/19/2007 11505 11370 11581
9/20/2007 11439 11296 11513
9/21/2007 11480 11348 11555
9/22/2007 11480 11348 11555
9/23/2007 11480 11348 11555
9/24/2007 11450 11289 11527
9/25/2007 11458 11285 11535
9/26/2007 11555 11348 11633
9/27/2007 11571 11393 11649
9/28/2007 11555 11359 11633
9/29/2007 11555 11359 11633
9/30/2007 11555 11359 11633
10/1/2007 11648 11510 11727
10/2/2007 11604 11507 11684
10/3/2007 11608 11457 11687
10/4/2007 11626 11481 11706
10/5/2007 11725 11594 11806
10/6/2007 11725 11594 11806
10/7/2007 11725 11594 11806
10/8/2007 11685 11557 11767
10/9/2007 11754 11650 11837
10/10/2007 11764 11631 11845
10/11/2007 11654 11572 11736
10/12/2007 11717 11627 11801
10/13/2007 11717 11627 11801
10/14/2007 11717 11627 11801
10/15/2007 11656 11530 11740
10/16/2007 11581 11454 11665
10/17/2007 11602 11475 11686
10/18/2007 11598 11467 11681
10/19/2007 11438 11173 11520
10/20/2007 11438 11173 11520
10/21/2007 11438 11173 11520
10/22/2007 11432 11216 11513
10/23/2007 11581 11315 11665
10/24/2007 11502 11287 11586
10/25/2007 11547 11276 11631
10/26/2007 11561 11432 11645
10/27/2007 11561 11432 11645
10/28/2007 11561 11432 11645
10/29/2007 11583 11476 11667
10/30/2007 11594 11402 11678
10/31/2007 11737 11539 11822
11/1/2007 11553 11237 11625
11/2/2007 11555 11247 11623
11/3/2007 11555 11247 11623
11/4/2007 11555 11247 11623
11/5/2007 11525 11192 11594
11/6/2007 11575 11327 11689
11/7/2007 11324 11000 11437
11/8/2007 11450 10994 11571
11/9/2007 11342 10837 11465
11/10/2007 11342 10837 11465
11/11/2007 11342 10837 11465
11/12/2007 11330 10729 11471
11/13/2007 11472 11045 11613
11/14/2007 11425 10970 11568
11/15/2007 11389 10825 11529
11/16/2007 11440 10882 11584
11/17/2007 11440 10882 11584
11/18/2007 11440 10882 11584
11/19/2007 11336 10692 11472
11/20/2007 11387 10741 11507
11/21/2007 11162 10571 11281
11/22/2007 11162 10571 11281
11/23/2007 11316 10750 11434
11/24/2007 11316 10750 11434
11/25/2007 11316 10750 11434
11/26/2007 11195 10500 11316
11/27/2007 11425 10658 11572
11/28/2007 11622 10966 11798
11/29/2007 11632 10972 11818
11/30/2007 11687 11057 11900
12/1/2007 11687 11057 11900
12/2/2007 11687 11057 11900
12/3/2007 11602 10992 11813
12/4/2007 11557 10920 11767
12/5/2007 11679 11092 11892
12/6/2007 11760 11260 11973
12/7/2007 11756 11240 11969
12/8/2007 11756 11240 11969
12/9/2007 11756 11240 11969
12/10/2007 11782 11325 11996
12/11/2007 11553 11039 11764
12/12/2007 11590 11107 11802
12/13/2007 11549 11121 11759
12/14/2007 11464 10969 11674
12/15/2007 11464 10969 11674
12/16/2007 11464 10969 11674
12/17/2007 11300 10804 11508
12/18/2007 11365 10872 11573
12/19/2007 11334 10857 11543
12/20/2007 11423 10914 11634
12/21/2007 11574 11097 11787
12/22/2007 11574 11097 11787
12/23/2007 11574 11097 11787
12/24/2007 11608 11187 11825
12/25/2007 11608 11187 11825
12/26/2007 11628 11196 11845
12/27/2007 11499 11040 11714
12/28/2007 11515 11056 11730
12/29/2007 11515 11056 11730
12/30/2007 11515 11056 11730
12/31/2007 11424 10980 11637
1/1/2008 11424 10980 11637
1/2/2008 11316 10824 11528
1/3/2008 11375 10824 11588
1/4/2008 11235 10558 11446
1/5/2008 11235 10558 11446
1/6/2008 11235 10558 11446
1/7/2008 11485 10592 11700
1/8/2008 11527 10401 11744
1/9/2008 11720 10544 11940
1/10/2008 11744 10628 11965
1/11/2008 11750 10484 11971
1/12/2008 11750 10484 11971
1/13/2008 11750 10484 11971
1/14/2008 11734 10598 11954
1/15/2008 11556 10334 11773
1/16/2008 11693 10277 11914
1/17/2008 11521 9979 11738
1/18/2008 11335 9918 11549
1/19/2008 11335 9918 11549
1/20/2008 11335 9918 11549
1/21/2008 11335 9918 11549
1/22/2008 10988 9809 11196
1/23/2008 10899 10019 11105
1/24/2008 10919 10120 11128
1/25/2008 10826 9960 11033
1/26/2008 10826 9960 11033
1/27/2008 10826 9960 11033
1/28/2008 10960 10135 11168
1/29/2008 11073 10198 11285
1/30/2008 10996 10150 11205
1/31/2008 11120 10322 11331
2/1/2008 11231 10448 11446
2/2/2008 11231 10448 11446
2/3/2008 11231 10448 11446
2/4/2008 11254 10339 11468
2/5/2008 11039 10009 11250
2/6/2008 11039 9937 11249
2/7/2008 11071 10017 11283
2/8/2008 10990 9975 11200
2/9/2008 10990 9975 11200
2/10/2008 10990 9975 11200
2/11/2008 10990 10035 11200
2/12/2008 11095 10108 11308
2/13/2008 11136 10249 11350
2/14/2008 11020 10112 11232
2/15/2008 11055 10121 11267
2/16/2008 11055 10121 11267
2/17/2008 11055 10121 11267
2/18/2008 11055 10121 11267
2/19/2008 11114 10113 11327
2/20/2008 11132 10198 11347
2/21/2008 10970 10070 11181
2/22/2008 10990 10151 11202
2/23/2008 10990 10151 11202
2/24/2008 10990 10151 11202
2/25/2008 11166 10291 11383
2/26/2008 11227 10362 11445
2/27/2008 11166 10355 11383
2/28/2008 11085 10264 11299
2/29/2008 10877 9986 11087
3/1/2008 10877 9986 11087
3/2/2008 10877 9986 11087
3/3/2008 10883 9992 11093
3/4/2008 10891 9957 11101
3/5/2008 10895 10015 11106
3/6/2008 10643 9796 10850
3/7/2008 10530 9713 10734
3/8/2008 10530 9713 10734
3/9/2008 10530 9713 10734
3/10/2008 10376 9564 10578
3/11/2008 10366 9919 10567
3/12/2008 10350 9833 10551
3/13/2008 10394 9883 10597
3/14/2008 10224 9678 10424
3/15/2008 10224 9678 10424
3/16/2008 10224 9678 10424
3/17/2008 10121 9593 10317
3/18/2008 10372 10000 10575
3/19/2008 10329 9757 10531
3/20/2008 10413 9991 10618
3/21/2008 10413 9991 10618
3/22/2008 10413 9991 10618
3/23/2008 10413 9991 10618
3/24/2008 10535 10144 10744
3/25/2008 10555 10167 10764
3/26/2008 10501 10079 10709
3/27/2008 10490 9965 10699
3/28/2008 10434 9887 10641
3/29/2008 10434 9887 10641
3/30/2008 10434 9887 10641
3/31/2008 10419 9943 10628
4/1/2008 10740 10300 10955
4/2/2008 10653 10282 10866
4/3/2008 10626 10296 10840
4/4/2008 10716 10304 10931
4/5/2008 10716 10304 10931
4/6/2008 10716 10304 10931
4/7/2008 10710 10320 10925
4/8/2008 10693 10271 10909
4/9/2008 10618 10189 10832
4/10/2008 10669 10235 10884
4/11/2008 10497 10027 10708
4/12/2008 10497 10027 10708
4/13/2008 10497 10027 10708
4/14/2008 10474 9993 10686
4/15/2008 10415 10039 10627
4/16/2008 10529 10268 10742
4/17/2008 10490 10275 10703
4/18/2008 10616 10461 10831
4/19/2008 10616 10461 10831
4/20/2008 10616 10461 10831
4/21/2008 10592 10445 10807
4/22/2008 10438 10353 10649
4/23/2008 10622 10383 10839
4/24/2008 10590 10450 10806
4/25/2008 10762 10518 10982
4/26/2008 10762 10518 10982
4/27/2008 10762 10518 10982
4/28/2008 10827 10508 11047
4/29/2008 10799 10467 11019
4/30/2008 10746 10427 10966
5/1/2008 10914 10608 11138
5/2/2008 10862 10642 11084
5/3/2008 10862 10642 11084
5/4/2008 10862 10642 11084
5/5/2008 10847 10595 11069
5/6/2008 10856 10677 11079
5/7/2008 10689 10488 10910
5/8/2008 10699 10527 10920
5/9/2008 10630 10458 10851
5/10/2008 10630 10458 10851
5/11/2008 10630 10458 10851
5/12/2008 10679 10573 10900
5/13/2008 10602 10572 10820
5/14/2008 10673 10616 10893
5/15/2008 10673 10730 10895
5/16/2008 10693 10744 10916
5/17/2008 10693 10744 10916
5/18/2008 10693 10744 10916
5/19/2008 10718 10754 10939
5/20/2008 10726 10654 10948
5/21/2008 10659 10484 10881
5/22/2008 10785 10513 11009
5/23/2008 10667 10375 10889
5/24/2008 10667 10375 10889
5/25/2008 10667 10375 10889
5/26/2008 10667 10375 10889
5/27/2008 10772 10446 10997
5/28/2008 10764 10489 10988
5/29/2008 10892 10546 11120
5/30/2008 10912 10562 11140
5/31/2008 10912 10562 11140
6/1/2008 10912 10562 11140
6/2/2008 10791 10452 11017
6/3/2008 10811 10392 11038
6/4/2008 10882 10393 11111
6/5/2008 10989 10597 11221
6/6/2008 10703 10271 10930
6/7/2008 10703 10271 10930
6/8/2008 10703 10271 10930
6/9/2008 10620 10279 10845
6/10/2008 10559 10254 10783
6/11/2008 10401 10083 10622
6/12/2008 10492 10117 10716
6/13/2008 10634 10269 10859
6/14/2008 10634 10269 10859
6/15/2008 10634 10269 10859
6/16/2008 10602 10270 10826
6/17/2008 10541 10201 10764
6/18/2008 10430 10102 10649
6/19/2008 10432 10143 10651
6/20/2008 10271 9955 10486
6/21/2008 10271 9955 10486
6/22/2008 10271 9955 10486
6/23/2008 10277 9955 10494
6/24/2008 10273 9927 10489
6/25/2008 10405 9986 10625
6/26/2008 10194 9695 10409
6/27/2008 10279 9660 10496
6/28/2008 10279 9660 10496
6/29/2008 10279 9660 10496
6/30/2008 10336 9672 10555
7/1/2008 10342 9711 10561
7/2/2008 10326 9535 10544
7/3/2008 10271 9545 10488
7/4/2008 10271 9545 10488
7/5/2008 10271 9545 10488
7/6/2008 10271 9545 10488
7/7/2008 10241 9465 10458
7/8/2008 10525 9631 10749
7/9/2008 10466 9412 10689
7/10/2008 10488 9478 10711
7/11/2008 10373 9374 10594
7/12/2008 10373 9374 10594
7/13/2008 10373 9374 10594
7/14/2008 10358 9289 10579
7/15/2008 10460 9188 10682
7/16/2008 10553 9420 10778
7/17/2008 10709 9533 10939
7/18/2008 10726 9536 10955
7/19/2008 10726 9536 10955
7/20/2008 10726 9536 10955
7/21/2008 10644 9531 10873
7/22/2008 10847 9660 11080
7/23/2008 10975 9699 11211
7/24/2008 10945 9475 11180
7/25/2008 11000 9515 11236
7/26/2008 11000 9515 11236
7/27/2008 11000 9515 11236
7/28/2008 10878 9338 11112
7/29/2008 10955 9557 11190
7/30/2008 10971 9716 11207
7/31/2008 11014 9591 11254
8/1/2008 10882 9537 11120
8/2/2008 10882 9537 11120
8/3/2008 10882 9537 11120
8/4/2008 10989 9452 11230
8/5/2008 11255 9724 11502
8/6/2008 11265 9761 11513
8/7/2008 11097 9587 11341
8/8/2008 11365 9816 11615
8/9/2008 11365 9816 11615
8/10/2008 11365 9816 11615
8/11/2008 11399 9887 11651
8/12/2008 11357 9768 11607
8/13/2008 11324 9743 11573
8/14/2008 11393 9797 11646
8/15/2008 11519 9838 11775
8/16/2008 11519 9838 11775
8/17/2008 11519 9838 11775
8/18/2008 11408 9690 11660
8/19/2008 11324 9601 11576
8/20/2008 11251 9661 11501
8/21/2008 11280 9686 11531
8/22/2008 11399 9797 11653
8/23/2008 11399 9797 11653
8/24/2008 11399 9797 11653
8/25/2008 11188 9604 11436
8/26/2008 11201 9640 11450
8/27/2008 11192 9718 11441
8/28/2008 11296 9864 11547
8/29/2008 11184 9729 11434
8/30/2008 11184 9729 11434
8/31/2008 11184 9729 11434
9/1/2008 11184 9729 11434
9/2/2008 11192 9690 11443
9/3/2008 11192 9675 11443
9/4/2008 10914 9386 11159
9/5/2008 10853 9428 11097
9/6/2008 10853 9428 11097
9/7/2008 10853 9428 11097
9/8/2008 11050 9623 11298
9/9/2008 10856 9294 11100
9/10/2008 10888 9352 11133
9/11/2008 11030 9484 11279
9/12/2008 11024 9504 11273
9/13/2008 11024 9504 11273
9/14/2008 11024 9504 11273
9/15/2008 10782 9056 11026
9/16/2008 10758 9215 11001
9/17/2008 10385 8781 10619
9/18/2008 10640 9164 10881
9/19/2008 10727 9533 10970
9/20/2008 10727 9533 10970
9/21/2008 10727 9533 10970
9/22/2008 10457 9169 10694
9/23/2008 10412 9026 10650
9/24/2008 10451 9008 10691
9/25/2008 10586 9185 10828
9/26/2008 10603 9216 10846
9/27/2008 10603 9216 10846
9/28/2008 10603 9216 10846
9/29/2008 9978 8407 10207
9/30/2008 10317 8862 10554
10/1/2008 10272 8824 10509
10/2/2008 10024 8469 10257
10/3/2008 9931 8355 10162
10/4/2008 9931 8355 10162
10/5/2008 9931 8355 10162
10/6/2008 9354 8034 9572
10/7/2008 9088 7573 9300
10/8/2008 8938 7491 9144
10/9/2008 8345 6920 8538
10/10/2008 8050 6840 8237
10/11/2008 8050 6840 8237
10/12/2008 8050 6840 8237
10/13/2008 9080 7632 9292
10/14/2008 9066 7591 9276
10/15/2008 8377 6906 8571
10/16/2008 8633 7200 8833
10/17/2008 8639 7155 8840
10/18/2008 8639 7155 8840
10/19/2008 8639 7155 8840
10/20/2008 8962 7496 9172
10/21/2008 8812 7265 9019
10/22/2008 8290 6824 8489
10/23/2008 8288 6910 8487
10/24/2008 8060 6672 8254
10/25/2008 8060 6672 8254
10/26/2008 8060 6672 8254
10/27/2008 7695 6460 7880
10/28/2008 8227 7157 8424
10/29/2008 8115 7078 8310
10/30/2008 8402 7262 8604
10/31/2008 8572 7374 8778
</Table>
TOTAL RETURNS FOR THE PERIOD ENDED OCTOBER 31, 2008
- --------------------------------------------------------------------------------
<Table>
<Caption>
SINCE INCEPTION
ONE YEAR (11/01/06)
-------- ---------------
RYDEX S&P EQUAL WEIGHT HEALTH CARE ETF.................... -26.98% -7.42%
S&P 500 EQUAL WEIGHT HEALTH CARE TOTAL RETURN INDEX....... -25.75% -6.32%
S&P 500 TOTAL RETURN INDEX................................ -36.10% -14.15%
</Table>
The returns presented above do not reflect the effect of taxes. Index returns
represent total returns. Past performance is no guarantee of future results.
25 ANNUAL REPORT
Rydex S&P Equal Weight Health Care ETF
PORTFOLIO SUMMARY (Unaudited) As of October 31, 2008
- --------------------------------------------------------------------------------
TOP 10 HOLDINGS*
- --------------------------------------------------------------------------------
<Table>
<Caption>
DESCRIPTION % OF NET ASSETS
- ------------------------------------------------------------------------------------
DAVITA, INC. 2.37%
CELGENE CORP. 2.34%
AMGEN, INC. 2.34%
PFIZER, INC. 2.30%
BRISTOL-MYERS SQUIBB CO. 2.30%
BARR PHARMACEUTICALS, INC. 2.28%
GILEAD SCIENCES, INC. 2.27%
MERCK & CO., INC. 2.27%
WATSON PHARMACEUTICALS, INC. 2.22%
ABBOTT LABORATORIES 2.22%
- ------------------------------------------------------------------------------------
</Table>
INDUSTRY ALLOCATIONS*
(PIE CHART)
<Table>
Pharmaceuticals 28.46
Health Care Providers & Services 27.87
Health Care Equipment & Supplies 21.91
Biotechnology 11.19
Life Sciences Tools & Services 8.92
Health Care Technology 1.65
</Table>
* The Fund's Top Ten Holdings are expressed as a percentage of net assets and
the Industry Allocations are expressed as a percentage of the Fund's
investments market value. These percentages may change over time.
26
RYDEX S&P EQUAL WEIGHT INDUSTRIALS ETF
MANAGER'S ANALYSIS (Unaudited)
- --------------------------------------------------------------------------------
For the year ended October 31, 2008, Rydex S&P Equal Weight Industrials ETF
returned -37.12% compared to its benchmark S&P Equal Weight Industrials Total
Return Index and the capitalization-weighted S&P Industrials Index, which
returned -36.96% and -38.56% respectively for the same time period.
Both the equal weight industrials index and its cap-weighted counterpart
benefited most from the road and rail industry. While machinery was the largest
detractor of returns for the S&P Equal Weight Industrial Index, the cap-weighted
industrials index was hurt most by industrial conglomerates. Indeed, the equal
weight industrials index's significant underweighting to industrial
conglomerates was most responsible for its outperformance. As an example,
General Electric (GE) had an approximate 24% average weighting in the
capitalization-weighted industrials index versus a 1.75% average weighting in
the equal weight industrials index. Due in large part to the credit crisis,
General Electric (GE) was down 50.61% for the year ending 10/31/2008.
CUMULATIVE FUND PERFORMANCE: NOVEMBER 1, 2006 - OCTOBER 31, 2008
(Performance Graph)
<Table>
<Caption>
S&P 500
RYDEX S&P S&P 500 EQUAL WEIGHT
EQUAL WEIGHT TOTAL RETURN INDUSTRIALS TOTAL
INDUSTRIALS ETF(A) INDEX(B) RETURN INDEX(C)
------------------ ------------ -----------------
11/1/2006 10000.00 10000.00 9999.00
11/2/2006 9990.00 9999.00 9988.00
11/3/2006 9955.00 9978.00 9955.00
11/4/2006 9955.00 9978.00 9955.00
11/5/2006 9955.00 9978.00 9955.00
11/6/2006 10057.00 10091.00 10056.00
11/7/2006 10142.00 10114.00 10142.00
11/8/2006 10201.00 10137.00 10201.00
11/9/2006 10116.00 10085.00 10116.00
11/10/2006 10179.00 10104.00 10179.00
11/11/2006 10179.00 10104.00 10179.00
11/12/2006 10179.00 10104.00 10179.00
11/13/2006 10236.00 10132.00 10236.00
11/14/2006 10277.00 10198.00 10276.00
11/15/2006 10368.00 10225.00 10370.00
11/16/2006 10419.00 10249.00 10420.00
11/17/2006 10393.00 10259.00 10395.00
11/18/2006 10393.00 10259.00 10395.00
11/19/2006 10393.00 10259.00 10395.00
11/20/2006 10348.00 10254.00 10350.00
11/21/2006 10427.00 10272.00 10429.00
11/22/2006 10442.00 10297.00 10443.00
11/23/2006 10442.00 10297.00 10443.00
11/24/2006 10419.00 10260.00 10422.00
11/25/2006 10419.00 10260.00 10422.00
11/26/2006 10419.00 10260.00 10422.00
11/27/2006 10248.00 10120.00 10250.00
11/28/2006 10232.00 10158.00 10234.00
11/29/2006 10336.00 10256.00 10339.00
11/30/2006 10360.00 10264.00 10364.00
12/1/2006 10293.00 10236.00 10296.00
12/2/2006 10293.00 10236.00 10296.00
12/3/2006 10293.00 10236.00 10296.00
12/4/2006 10442.00 10327.00 10446.00
12/5/2006 10484.00 10368.00 10489.00
12/6/2006 10492.00 10357.00 10497.00
12/7/2006 10474.00 10317.00 10478.00
12/8/2006 10476.00 10336.00 10482.00
12/9/2006 10476.00 10336.00 10482.00
12/10/2006 10476.00 10336.00 10482.00
12/11/2006 10444.00 10359.00 10449.00
12/12/2006 10403.00 10349.00 10408.00
12/13/2006 10372.00 10363.00 10377.00
12/14/2006 10474.00 10453.00 10479.00
12/15/2006 10411.00 10465.00 10417.00
12/16/2006 10411.00 10465.00 10417.00
12/17/2006 10411.00 10465.00 10417.00
12/18/2006 10366.00 10431.00 10372.00
12/19/2006 10403.00 10454.00 10407.00
12/20/2006 10409.00 10440.00 10414.00
12/21/2006 10370.00 10404.00 10377.00
12/22/2006 10293.00 10350.00 10300.00
12/23/2006 10293.00 10350.00 10300.00
12/24/2006 10293.00 10350.00 10300.00
12/25/2006 10293.00 10350.00 10300.00
12/26/2006 10338.00 10395.00 10343.00
12/27/2006 10427.00 10470.00 10433.00
12/28/2006 10402.00 10455.00 10409.00
12/29/2006 10335.00 10408.00 10342.00
12/30/2006 10335.00 10408.00 10342.00
12/31/2006 10335.00 10408.00 10342.00
1/1/2007 10335.00 10408.00 10342.00
1/2/2007 10335.00 10408.00 10342.00
1/3/2007 10341.00 10398.00 10349.00
1/4/2007 10323.00 10411.00 10330.00
1/5/2007 10258.00 10347.00 10265.00
1/6/2007 10258.00 10347.00 10265.00
1/7/2007 10258.00 10347.00 10265.00
1/8/2007 10313.00 10373.00 10320.00
1/9/2007 10335.00 10368.00 10342.00
1/10/2007 10357.00 10389.00 10366.00
1/11/2007 10447.00 10455.00 10456.00
1/12/2007 10500.00 10506.00 10510.00
1/13/2007 10500.00 10506.00 10510.00
1/14/2007 10500.00 10506.00 10510.00
1/15/2007 10500.00 10506.00 10510.00
1/16/2007 10568.00 10515.00 10578.00
1/17/2007 10580.00 10506.00 10589.00
1/18/2007 10541.00 10475.00 10551.00
1/19/2007 10578.00 10506.00 10588.00
1/20/2007 10578.00 10506.00 10588.00
1/21/2007 10578.00 10506.00 10588.00
1/22/2007 10468.00 10451.00 10477.00
1/23/2007 10625.00 10488.00 10635.00
1/24/2007 10625.00 10577.00 10635.00
1/25/2007 10502.00 10458.00 10514.00
1/26/2007 10468.00 10445.00 10480.00
1/27/2007 10468.00 10445.00 10480.00
1/28/2007 10468.00 10445.00 10480.00
1/29/2007 10500.00 10435.00 10511.00
1/30/2007 10560.00 10495.00 10571.00
1/31/2007 10713.00 10566.00 10725.00
2/1/2007 10866.00 10625.00 10877.00
2/2/2007 10902.00 10643.00 10915.00
2/3/2007 10902.00 10643.00 10915.00
2/4/2007 10902.00 10643.00 10915.00
2/5/2007 10884.00 10634.00 10897.00
2/6/2007 10892.00 10641.00 10904.00
2/7/2007 10923.00 10660.00 10936.00
2/8/2007 10862.00 10648.00 10875.00
2/9/2007 10786.00 10573.00 10799.00
2/10/2007 10786.00 10573.00 10799.00
2/11/2007 10786.00 10573.00 10799.00
2/12/2007 10804.00 10539.00 10818.00
2/13/2007 10906.00 10621.00 10921.00
2/14/2007 11068.00 10705.00 11082.00
2/15/2007 11096.00 10717.00 11112.00
2/16/2007 11076.00 10708.00 11091.00
2/17/2007 11076.00 10708.00 11091.00
2/18/2007 11076.00 10708.00 11091.00
2/19/2007 11076.00 10708.00 11091.00
2/20/2007 11131.00 10739.00 11147.00
2/21/2007 11155.00 10724.00 11172.00
2/22/2007 11119.00 10717.00 11134.00
2/23/2007 11102.00 10680.00 11118.00
2/24/2007 11102.00 10680.00 11118.00
2/25/2007 11102.00 10680.00 11118.00
2/26/2007 11019.00 10668.00 11036.00
2/27/2007 10643.00 10299.00 10658.00
2/28/2007 10678.00 10359.00 10693.00
3/1/2007 10645.00 10332.00 10661.00
3/2/2007 10498.00 10215.00 10514.00
3/3/2007 10498.00 10215.00 10514.00
3/4/2007 10498.00 10215.00 10514.00
3/5/2007 10429.00 10119.00 10444.00
3/6/2007 10564.00 10276.00 10580.00
3/7/2007 10584.00 10254.00 10601.00
3/8/2007 10680.00 10327.00 10697.00
3/9/2007 10696.00 10334.00 10712.00
3/10/2007 10696.00 10334.00 10712.00
3/11/2007 10696.00 10334.00 10712.00
3/12/2007 10743.00 10362.00 10760.00
3/13/2007 10508.00 10154.00 10526.00
3/14/2007 10574.00 10223.00 10591.00
3/15/2007 10606.00 10261.00 10624.00
3/16/2007 10636.00 10222.00 10654.00
3/17/2007 10636.00 10222.00 10654.00
3/18/2007 10636.00 10222.00 10654.00
3/19/2007 10756.00 10333.00 10776.00
3/20/2007 10791.00 10399.00 10812.00
3/21/2007 10924.00 10577.00 10944.00
3/22/2007 10891.00 10573.00 10912.00
3/23/2007 10965.00 10584.00 10987.00
3/24/2007 10965.00 10584.00 10987.00
3/25/2007 10965.00 10584.00 10987.00
3/26/2007 10891.00 10595.00 10913.00
3/27/2007 10791.00 10529.00 10812.00
3/28/2007 10679.00 10448.00 10701.00
3/29/2007 10709.00 10487.00 10731.00
3/30/2007 10720.00 10475.00 10741.00
3/31/2007 10720.00 10475.00 10741.00
4/1/2007 10720.00 10475.00 10741.00
4/2/2007 10734.00 10502.00 10757.00
4/3/2007 10840.00 10602.00 10863.00
4/4/2007 10799.00 10614.00 10822.00
4/5/2007 10797.00 10649.00 10821.00
4/6/2007 10797.00 10649.00 10821.00
4/7/2007 10797.00 10649.00 10821.00
4/8/2007 10797.00 10649.00 10821.00
4/9/2007 10838.00 10655.00 10863.00
4/10/2007 10836.00 10684.00 10859.00
4/11/2007 10765.00 10615.00 10789.00
4/12/2007 10885.00 10681.00 10910.00
4/13/2007 10900.00 10718.00 10923.00
4/14/2007 10900.00 10718.00 10923.00
4/15/2007 10900.00 10718.00 10923.00
4/16/2007 11018.00 10833.00 11044.00
4/17/2007 11039.00 10855.00 11065.00
4/18/2007 11088.00 10863.00 11114.00
4/19/2007 11110.00 10850.00 11136.00
4/20/2007 11219.00 10951.00 11245.00
4/21/2007 11219.00 10951.00 11245.00
4/22/2007 11219.00 10951.00 11245.00
4/23/2007 11276.00 10926.00 11303.00
4/24/2007 11246.00 10922.00 11273.00
4/25/2007 11340.00 11034.00 11367.00
4/26/2007 11305.00 11026.00 11333.00
4/27/2007 11417.00 11025.00 11446.00
4/28/2007 11417.00 11025.00 11446.00
4/29/2007 11417.00 11025.00 11446.00
4/30/2007 11264.00 10939.00 11293.00
5/1/2007 11321.00 10968.00 11351.00
5/2/2007 11436.00 11040.00 11466.00
5/3/2007 11524.00 11091.00 11554.00
5/4/2007 11544.00 11115.00 11575.00
5/5/2007 11544.00 11115.00 11575.00
5/6/2007 11544.00 11115.00 11575.00
5/7/2007 11565.00 11144.00 11596.00
5/8/2007 11571.00 11132.00 11602.00
5/9/2007 11655.00 11171.00 11686.00
5/10/2007 11507.00 11017.00 11539.00
5/11/2007 11608.00 11124.00 11639.00
5/12/2007 11608.00 11124.00 11639.00
5/13/2007 11608.00 11124.00 11639.00
5/14/2007 11583.00 11105.00 11615.00
5/15/2007 11579.00 11091.00 11610.00
5/16/2007 11647.00 11190.00 11680.00
5/17/2007 11647.00 11181.00 11679.00
5/18/2007 11675.00 11255.00 11709.00
5/19/2007 11675.00 11255.00 11709.00
5/20/2007 11675.00 11255.00 11709.00
5/21/2007 11698.00 11272.00 11731.00
5/22/2007 11665.00 11265.00 11699.00
5/23/2007 11663.00 11252.00 11698.00
5/24/2007 11571.00 11144.00 11604.00
5/25/2007 11657.00 11205.00 11692.00
5/26/2007 11657.00 11205.00 11692.00
5/27/2007 11657.00 11205.00 11692.00
5/28/2007 11657.00 11205.00 11692.00
5/29/2007 11700.00 11224.00 11734.00
5/30/2007 11818.00 11318.00 11854.00
5/31/2007 11908.00 11321.00 11946.00
6/1/2007 11951.00 11363.00 11986.00
6/2/2007 11951.00 11363.00 11986.00
6/3/2007 11951.00 11363.00 11986.00
6/4/2007 11966.00 11384.00 12001.00
6/5/2007 11958.00 11324.00 11994.00
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8/6/2008 11374.00 9761.00 11123.00
8/7/2008 11216.00 9587.00 10968.00
8/8/2008 11590.00 9816.00 11335.00
8/9/2008 11590.00 9816.00 11335.00
8/10/2008 11590.00 9816.00 11335.00
8/11/2008 11645.00 9887.00 11388.00
8/12/2008 11502.00 9768.00 11249.00
8/13/2008 11471.00 9743.00 11218.00
8/14/2008 11568.00 9797.00 11313.00
8/15/2008 11667.00 9838.00 11410.00
8/16/2008 11667.00 9838.00 11410.00
8/17/2008 11667.00 9838.00 11410.00
8/18/2008 11513.00 9690.00 11261.00
8/19/2008 11308.00 9601.00 11059.00
8/20/2008 11308.00 9661.00 11058.00
8/21/2008 11313.00 9686.00 11065.00
8/22/2008 11480.00 9797.00 11229.00
8/23/2008 11480.00 9797.00 11229.00
8/24/2008 11480.00 9797.00 11229.00
8/25/2008 11253.00 9604.00 11007.00
8/26/2008 11277.00 9640.00 11029.00
8/27/2008 11385.00 9718.00 11137.00
8/28/2008 11662.00 9864.00 11408.00
8/29/2008 11522.00 9729.00 11270.00
8/30/2008 11522.00 9729.00 11270.00
8/31/2008 11522.00 9729.00 11270.00
9/1/2008 11522.00 9729.00 11270.00
9/2/2008 11506.00 9690.00 11255.00
9/3/2008 11427.00 9675.00 11176.00
9/4/2008 10989.00 9386.00 10747.00
9/5/2008 10996.00 9428.00 10755.00
9/6/2008 10996.00 9428.00 10755.00
9/7/2008 10996.00 9428.00 10755.00
9/8/2008 11214.00 9623.00 10968.00
9/9/2008 10818.00 9294.00 10580.00
9/10/2008 10934.00 9352.00 10693.00
9/11/2008 11141.00 9484.00 10899.00
9/12/2008 11207.00 9504.00 10963.00
9/13/2008 11207.00 9504.00 10963.00
9/14/2008 11207.00 9504.00 10963.00
9/15/2008 10787.00 9056.00 10554.00
9/16/2008 10879.00 9215.00 10654.00
9/17/2008 10394.00 8781.00 10163.00
9/18/2008 10712.00 9164.00 10476.00
9/19/2008 10952.00 9533.00 10714.00
9/20/2008 10952.00 9533.00 10714.00
9/21/2008 10952.00 9533.00 10714.00
9/22/2008 10552.00 9169.00 10322.00
9/23/2008 10338.00 9026.00 10114.00
9/24/2008 10222.00 9008.00 9999.00
9/25/2008 10301.00 9185.00 10078.00
9/26/2008 10268.00 9216.00 10049.00
9/27/2008 10268.00 9216.00 10049.00
9/28/2008 10268.00 9216.00 10049.00
9/29/2008 9600.00 8407.00 9397.00
9/30/2008 9927.00 8862.00 9714.00
10/1/2008 9678.00 8824.00 9471.00
10/2/2008 9078.00 8469.00 8887.00
10/3/2008 8956.00 8355.00 8768.00
10/4/2008 8956.00 8355.00 8768.00
10/5/2008 8956.00 8355.00 8768.00
10/6/2008 8692.00 8034.00 8511.00
10/7/2008 8281.00 7573.00 8111.00
10/8/2008 8224.00 7491.00 8055.00
10/9/2008 7710.00 6920.00 7549.00
10/10/2008 7652.00 6840.00 7491.00
10/11/2008 7652.00 6840.00 7491.00
10/12/2008 7652.00 6840.00 7491.00
10/13/2008 8462.00 7632.00 8284.00
10/14/2008 8305.00 7591.00 8130.00
10/15/2008 7482.00 6906.00 7325.00
10/16/2008 7816.00 7200.00 7653.00
10/17/2008 7679.00 7155.00 7516.00
10/18/2008 7679.00 7155.00 7516.00
10/19/2008 7679.00 7155.00 7516.00
10/20/2008 8003.00 7496.00 7835.00
10/21/2008 7670.00 7265.00 7507.00
10/22/2008 7246.00 6824.00 7095.00
10/23/2008 7209.00 6910.00 7062.00
10/24/2008 6900.00 6672.00 6756.00
10/25/2008 6900.00 6672.00 6756.00
10/26/2008 6900.00 6672.00 6756.00
10/27/2008 6712.00 6460.00 6572.00
10/28/2008 7396.00 7157.00 7244.00
10/29/2008 7423.00 7078.00 7270.00
10/30/2008 7738.00 7262.00 7580.00
10/31/2008 7884.00 7374.00 7724.00
</Table>
TOTAL RETURNS FOR THE PERIOD ENDED OCTOBER 31, 2008
- --------------------------------------------------------------------------------
<Table>
<Caption>
SINCE INCEPTION
ONE YEAR (11/01/06)
-------- ---------------
RYDEX S&P EQUAL WEIGHT INDUSTRIALS ETF.................... -37.12% -12.41%
S&P 500 EQUAL WEIGHT INDUSTRIALS TOTAL RETURN INDEX....... -36.96% -12.13%
S&P 500 TOTAL RETURN INDEX................................ -36.10% -14.15%
</Table>
The returns presented above do not reflect the effect of taxes. Index returns
represent total returns. Past performance is no guarantee of future results.
27 ANNUAL REPORT
Rydex S&P Equal Weight Industrials ETF
PORTFOLIO SUMMARY (Unaudited) As of October 31, 2008
- --------------------------------------------------------------------------------
TOP 10 HOLDINGS*
- --------------------------------------------------------------------------------
<Table>
<Caption>
DESCRIPTION % OF NET ASSETS
- ------------------------------------------------------------------------------------
C.H. ROBINSON WORLDWIDE, INC. 2.24%
WASTE MANAGEMENT, INC. 2.22%
3M CO. 2.20%
ALLIED WASTE INDUSTRIES, INC. 2.20%
BURLINGTON NORTHERN SANTA FE CORP. 2.18%
UNION PACIFIC CORP. 2.18%
BOEING CO. 2.17%
UNITED TECHNOLOGIES CORP. 2.12%
W.W. GRAINGER, INC. 2.12%
RAYTHEON CO. 2.10%
- ------------------------------------------------------------------------------------
</Table>
INDUSTRY ALLOCATIONS*
(PIE CHART)
<Table>
Machinery 21.90
Aerospace & Defense 20.90
Commercial Services & Supplies 16.89
Road & Rail 9.81
Air Freight & Logistics 7.99
Industrial Conglomerates 6.93
Electrical Equipment 5.41
Trading Companies & Distributors 3.94
Construction & Engineering 3.09
Airlines 1.84
Building Products 1.30
</Table>
* The Fund's Top Ten Holdings are expressed as a percentage of net assets and
the Industry Allocations are expressed as a percentage of the Fund's
investments market value. These percentages may change over time.
28
RYDEX S&P EQUAL WEIGHT MATERIALS ETF
MANAGER'S ANALYSIS (Unaudited)
- --------------------------------------------------------------------------------
For the year ending October 31, 2008, Rydex S&P Equal Weight Materials ETF
returned -40.67% compared to the benchmark S&P Equal Weight Materials Total
Return Index and the capitalization-weighted S&P Materials Index, which returned
- -40.18% and -41.18% respectively for the same time period.
Both the equal-weight and cap-weight materials indices benefited most from the
construction materials industry. Metals and mining exposure, on the other hand,
detracted from both indices' returns. The S&P Equal Weight Materials Index's
higher allocation to containers and packaging stocks relative to the cap-
weighted materials index helped RTM. During the second half of the year, the
fund's lower average weight to the top-heavy metals and mining industry,
including names such as Freeport McMoran Copper and Gold (FCX), gave it an added
advantage.
CUMULATIVE FUND PERFORMANCE: NOVEMBER 1, 2006 - OCTOBER 31, 2008
(Performance Graph)
<Table>
<Caption>
S&P 500
EQUAL WEIGHT
RYDEX S&P S&P 500 MATERIALS TOTAL
EQUAL WEIGHT TOTAL RETURN RETURN INDEX
MATERIALS ETF(A) INDEX(B) (C)
---------------- ------------ ---------------
11/1/2006 10000 10000 10001
11/2/2006 10064 9999 10064
11/3/2006 10019 9978 10019
11/4/2006 10019 9978 10019
11/5/2006 10019 9978 10019
11/6/2006 10132 10091 10133
11/7/2006 10116 10114 10116
11/8/2006 10167 10137 10167
11/9/2006 10233 10085 10234
11/10/2006 10165 10104 10167
11/11/2006 10165 10104 10167
11/12/2006 10165 10104 10167
11/13/2006 10260 10132 10262
11/14/2006 10277 10198 10279
11/15/2006 10301 10225 10303
11/16/2006 10273 10249 10274
11/17/2006 10291 10259 10294
11/18/2006 10291 10259 10294
11/19/2006 10291 10259 10294
11/20/2006 10384 10254 10387
11/21/2006 10452 10272 10456
11/22/2006 10547 10297 10552
11/23/2006 10547 10297 10552
11/24/2006 10551 10260 10556
11/25/2006 10551 10260 10556
11/26/2006 10551 10260 10556
11/27/2006 10394 10120 10397
11/28/2006 10386 10158 10391
11/29/2006 10516 10256 10521
11/30/2006 10555 10264 10561
12/1/2006 10485 10236 10491
12/2/2006 10485 10236 10491
12/3/2006 10485 10236 10491
12/4/2006 10671 10327 10676
12/5/2006 10729 10368 10735
12/6/2006 10725 10357 10731
12/7/2006 10762 10317 10768
12/8/2006 10807 10336 10814
12/9/2006 10807 10336 10814
12/10/2006 10807 10336 10814
12/11/2006 10768 10359 10774
12/12/2006 10636 10349 10642
12/13/2006 10677 10363 10684
12/14/2006 10739 10453 10746
12/15/2006 10809 10465 10817
12/16/2006 10809 10465 10817
12/17/2006 10809 10465 10817
12/18/2006 10706 10431 10714
12/19/2006 10783 10454 10791
12/20/2006 10745 10440 10753
12/21/2006 10624 10404 10633
12/22/2006 10578 10350 10587
12/23/2006 10578 10350 10587
12/24/2006 10578 10350 10587
12/25/2006 10578 10350 10587
12/26/2006 10673 10395 10683
12/27/2006 10795 10470 10805
12/28/2006 10758 10455 10767
12/29/2006 10690 10408 10699
12/30/2006 10690 10408 10699
12/31/2006 10690 10408 10699
1/1/2007 10690 10408 10699
1/2/2007 10690 10408 10699
1/3/2007 10652 10398 10662
1/4/2007 10562 10411 10572
1/5/2007 10502 10347 10512
1/6/2007 10502 10347 10512
1/7/2007 10502 10347 10512
1/8/2007 10526 10373 10538
1/9/2007 10520 10368 10531
1/10/2007 10568 10389 10580
1/11/2007 10715 10455 10726
1/12/2007 10820 10506 10833
1/13/2007 10820 10506 10833
1/14/2007 10820 10506 10833
1/15/2007 10820 10506 10833
1/16/2007 10814 10515 10828
1/17/2007 10835 10506 10848
1/18/2007 10777 10475 10791
1/19/2007 10918 10506 10931
1/20/2007 10918 10506 10931
1/21/2007 10918 10506 10931
1/22/2007 10814 10451 10828
1/23/2007 10978 10488 10991
1/24/2007 11054 10577 11069
1/25/2007 10965 10458 10980
1/26/2007 10967 10445 10983
1/27/2007 10967 10445 10983
1/28/2007 10967 10445 10983
1/29/2007 10945 10435 10960
1/30/2007 10963 10495 10978
1/31/2007 11090 10566 11105
2/1/2007 11170 10625 11186
2/2/2007 11166 10643 11182
2/3/2007 11166 10643 11182
2/4/2007 11166 10643 11182
2/5/2007 11116 10634 11134
2/6/2007 11179 10641 11195
2/7/2007 11187 10660 11203
2/8/2007 11170 10648 11188
2/9/2007 11127 10573 11145
2/10/2007 11127 10573 11145
2/11/2007 11127 10573 11145
2/12/2007 11137 10539 11155
2/13/2007 11365 10621 11384
2/14/2007 11425 10705 11444
2/15/2007 11487 10717 11506
2/16/2007 11508 10708 11529
2/17/2007 11508 10708 11529
2/18/2007 11508 10708 11529
2/19/2007 11508 10708 11529
2/20/2007 11553 10739 11574
2/21/2007 11705 10724 11726
2/22/2007 11649 10717 11671
2/23/2007 11651 10680 11674
2/24/2007 11651 10680 11674
2/25/2007 11651 10680 11674
2/26/2007 11758 10668 11781
2/27/2007 11278 10299 11297
2/28/2007 11334 10359 11356
3/1/2007 11276 10332 11297
3/2/2007 11087 10215 11108
3/3/2007 11087 10215 11108
3/4/2007 11087 10215 11108
3/5/2007 10943 10119 10963
3/6/2007 11150 10276 11171
3/7/2007 11123 10254 11143
3/8/2007 11266 10327 11287
3/9/2007 11313 10334 11335
3/10/2007 11313 10334 11335
3/11/2007 11313 10334 11335
3/12/2007 11361 10362 11384
3/13/2007 11073 10154 11095
3/14/2007 11160 10223 11183
3/15/2007 11303 10261 11326
3/16/2007 11214 10222 11236
3/17/2007 11214 10222 11236
3/18/2007 11214 10222 11236
3/19/2007 11377 10333 11399
3/20/2007 11462 10399 11486
3/21/2007 11615 10577 11640
3/22/2007 11586 10573 11609
3/23/2007 11628 10584 11653
3/24/2007 11628 10584 11653
3/25/2007 11628 10584 11653
3/26/2007 11702 10595 11728
3/27/2007 11589 10529 11613
3/28/2007 11479 10448 11503
3/29/2007 11549 10487 11574
3/30/2007 11533 10475 11558
3/31/2007 11533 10475 11558
4/1/2007 11533 10475 11558
4/2/2007 11591 10502 11616
4/3/2007 11713 10602 11740
4/4/2007 11717 10614 11744
4/5/2007 11707 10649 11734
4/6/2007 11707 10649 11734
4/7/2007 11707 10649 11734
4/8/2007 11707 10649 11734
4/9/2007 11800 10655 11827
4/10/2007 11736 10684 11763
4/11/2007 11649 10615 11676
4/12/2007 11746 10681 11774
4/13/2007 11769 10718 11798
4/14/2007 11769 10718 11798
4/15/2007 11769 10718 11798
4/16/2007 11919 10833 11949
4/17/2007 11859 10855 11888
4/18/2007 11786 10863 11815
4/19/2007 11788 10850 11817
4/20/2007 11919 10951 11950
4/21/2007 11919 10951 11950
4/22/2007 11919 10951 11950
4/23/2007 11902 10926 11932
4/24/2007 11805 10922 11834
4/25/2007 12000 11034 12032
4/26/2007 11981 11026 12012
4/27/2007 11962 11025 11993
4/28/2007 11962 11025 11993
4/29/2007 11962 11025 11993
4/30/2007 11780 10939 11811
5/1/2007 11707 10968 11738
5/2/2007 11819 11040 11851
5/3/2007 11904 11091 11937
5/4/2007 11950 11115 11982
5/5/2007 11950 11115 11982
5/6/2007 11950 11115 11982
5/7/2007 12052 11144 12085
5/8/2007 12039 11132 12072
5/9/2007 12126 11171 12160
5/10/2007 11910 11017 11943
5/11/2007 12025 11124 12059
5/12/2007 12025 11124 12059
5/13/2007 12025 11124 12059
5/14/2007 11973 11105 12006
5/15/2007 12050 11091 12084
5/16/2007 12070 11190 12105
5/17/2007 12066 11181 12101
5/18/2007 12145 11255 12180
5/19/2007 12145 11255 12180
5/20/2007 12145 11255 12180
5/21/2007 12158 11272 12194
5/22/2007 12135 11265 12170
5/23/2007 12120 11252 12156
5/24/2007 11973 11144 12008
5/25/2007 12116 11205 12152
5/26/2007 12116 11205 12152
5/27/2007 12116 11205 12152
5/28/2007 12116 11205 12152
5/29/2007 12089 11224 12125
5/30/2007 12236 11318 12275
5/31/2007 12284 11321 12322
6/1/2007 12403 11363 12442
6/2/2007 12403 11363 12442
6/3/2007 12403 11363 12442
6/4/2007 12382 11384 12420
6/5/2007 12330 11324 12369
6/6/2007 12176 11226 12214
6/7/2007 11896 11030 11933
6/8/2007 12099 11155 12138
6/9/2007 12099 11155 12138
6/10/2007 12099 11155 12138
6/11/2007 12006 11166 12044
6/12/2007 11873 11047 11911
6/13/2007 12137 11217 12176
6/14/2007 12218 11272 12258
6/15/2007 12329 11345 12370
6/16/2007 12329 11345 12370
6/17/2007 12329 11345 12370
6/18/2007 12319 11332 12361
6/19/2007 12381 11352 12405
6/20/2007 12173 11197 12266
6/21/2007 12275 11269 12372
6/22/2007 12167 11124 12263
6/23/2007 12167 11124 12263
6/24/2007 12167 11124 12263
6/25/2007 12068 11088 12161
6/26/2007 11949 11053 12043
6/27/2007 12026 11154 12120
6/28/2007 12051 11150 12145
6/29/2007 12122 11133 12216
6/30/2007 12122 11133 12216
7/1/2007 12122 11133 12216
7/2/2007 12301 11252 12400
7/3/2007 12313 11294 12411
7/4/2007 12313 11294 12411
7/5/2007 12363 11298 12462
7/6/2007 12417 11339 12517
7/7/2007 12417 11339 12517
7/8/2007 12417 11339 12517
7/9/2007 12411 11349 12510
7/10/2007 12219 11188 12317
7/11/2007 12353 11254 12453
7/12/2007 12638 11468 12741
7/13/2007 12727 11504 12831
7/14/2007 12727 11504 12831
7/15/2007 12727 11504 12831
7/16/2007 12611 11482 12715
7/17/2007 12698 11481 12803
7/18/2007 12754 11458 12860
7/19/2007 12804 11510 12910
7/20/2007 12588 11369 12693
7/21/2007 12588 11369 12693
7/22/2007 12588 11369 12693
7/23/2007 12644 11425 12749
7/24/2007 12469 11199 12573
7/25/2007 12350 11251 12454
7/26/2007 11945 10988 12043
7/27/2007 11697 10814 11793
7/28/2007 11697 10814 11793
7/29/2007 11697 10814 11793
7/30/2007 11953 10925 12051
7/31/2007 11826 10787 11922
8/1/2007 11864 10866 11962
8/2/2007 11832 10916 11931
8/3/2007 11522 10627 11616
8/4/2007 11522 10627 11616
8/5/2007 11522 10627 11616
8/6/2007 11683 10884 11779
8/7/2007 11680 10951 11776
8/8/2007 11903 11109 12003
8/9/2007 11522 10781 11618
8/10/2007 11591 10786 11688
8/11/2007 11591 10786 11688
8/12/2007 11591 10786 11688
8/13/2007 11593 10782 11691
8/14/2007 11306 10587 11399
8/15/2007 10969 10443 11057
8/16/2007 10915 10477 11003
8/17/2007 11158 10735 11250
8/18/2007 11158 10735 11250
8/19/2007 11158 10735 11250
8/20/2007 11279 10732 11373
8/21/2007 11325 10744 11419
8/22/2007 11649 10870 11749
8/23/2007 11564 10858 11663
8/24/2007 11743 10985 11844
8/25/2007 11743 10985 11844
8/26/2007 11743 10985 11844
8/27/2007 11624 10892 11726
8/28/2007 11289 10636 11385
8/29/2007 11556 10872 11656
8/30/2007 11524 10827 11625
8/31/2007 11676 10949 11778
9/1/2007 11676 10949 11778
9/2/2007 11676 10949 11778
9/3/2007 11676 10949 11778
9/4/2007 11741 11064 11843
9/5/2007 11612 10942 11713
9/6/2007 11714 10990 11816
9/7/2007 11450 10804 11549
9/8/2007 11450 10804 11549
9/9/2007 11450 10804 11549
9/10/2007 11304 10791 11402
9/11/2007 11443 10938 11542
9/12/2007 11425 10942 11525
9/13/2007 11545 11034 11647
9/14/2007 11599 11037 11703
9/15/2007 11599 11037 11703
9/16/2007 11599 11037 11703
9/17/2007 11558 10980 11661
9/18/2007 12043 11301 12154
9/19/2007 12192 11370 12305
9/20/2007 12149 11296 12262
9/21/2007 12221 11348 12335
9/22/2007 12221 11348 12335
9/23/2007 12221 11348 12335
9/24/2007 12146 11289 12259
9/25/2007 12115 11285 12226
9/26/2007 12209 11348 12322
9/27/2007 12356 11393 12472
9/28/2007 12273 11359 12387
9/29/2007 12273 11359 12387
9/30/2007 12273 11359 12387
10/1/2007 12469 11510 12586
10/2/2007 12463 11507 12580
10/3/2007 12342 11457 12459
10/4/2007 12327 11481 12444
10/5/2007 12578 11594 12698
10/6/2007 12578 11594 12698
10/7/2007 12578 11594 12698
10/8/2007 12498 11557 12619
10/9/2007 12676 11650 12797
10/10/2007 12540 11631 12661
10/11/2007 12480 11572 12599
10/12/2007 12544 11627 12667
10/13/2007 12544 11627 12667
10/14/2007 12544 11627 12667
10/15/2007 12419 11530 12539
10/16/2007 12246 11454 12366
10/17/2007 12263 11475 12383
10/18/2007 12363 11467 12483
10/19/2007 12081 11173 12198
10/20/2007 12081 11173 12198
10/21/2007 12081 11173 12198
10/22/2007 12052 11216 12170
10/23/2007 12127 11315 12244
10/24/2007 12181 11287 12299
10/25/2007 12156 11276 12275
10/26/2007 12296 11432 12415
10/27/2007 12296 11432 12415
10/28/2007 12296 11432 12415
10/29/2007 12394 11476 12514
10/30/2007 12177 11402 12296
10/31/2007 12402 11539 12524
11/1/2007 12014 11237 12131
11/2/2007 12068 11247 12185
11/3/2007 12068 11247 12185
11/4/2007 12068 11247 12185
11/5/2007 11962 11192 12078
11/6/2007 12204 11327 12322
11/7/2007 11803 11000 11919
11/8/2007 11916 10994 12033
11/9/2007 11732 10837 11846
11/10/2007 11732 10837 11846
11/11/2007 11732 10837 11846
11/12/2007 11417 10729 11529
11/13/2007 11691 11045 11805
11/14/2007 11689 10970 11802
11/15/2007 11436 10825 11546
11/16/2007 11426 10882 11536
11/17/2007 11426 10882 11536
11/18/2007 11426 10882 11536
11/19/2007 11060 10692 11166
11/20/2007 11217 10741 11324
11/21/2007 11052 10571 11157
11/22/2007 11052 10571 11157
11/23/2007 11229 10750 11338
11/24/2007 11229 10750 11338
11/25/2007 11229 10750 11338
11/26/2007 11031 10500 11138
11/27/2007 11161 10658 11267
11/28/2007 11670 10966 11785
11/29/2007 11695 10972 11810
11/30/2007 11831 11057 11948
12/1/2007 11831 11057 11948
12/2/2007 11831 11057 11948
12/3/2007 11753 10992 11869
12/4/2007 11649 10920 11763
12/5/2007 11816 11092 11933
12/6/2007 12062 11260 12182
12/7/2007 12142 11240 12264
12/8/2007 12142 11240 12264
12/9/2007 12142 11240 12264
12/10/2007 12283 11325 12408
12/11/2007 11858 11039 11974
12/12/2007 11991 11107 12111
12/13/2007 12025 11121 12144
12/14/2007 11787 10969 11902
12/15/2007 11787 10969 11902
12/16/2007 11787 10969 11902
12/17/2007 11499 10804 11608
12/18/2007 11599 10872 11710
12/19/2007 11534 10857 11646
12/20/2007 11680 10914 11794
12/21/2007 11926 11097 12046
12/22/2007 11926 11097 12046
12/23/2007 11926 11097 12046
12/24/2007 11976 11187 12097
12/25/2007 11976 11187 12097
12/26/2007 12020 11196 12143
12/27/2007 11840 11040 11958
12/28/2007 11853 11056 11972
12/29/2007 11853 11056 11972
12/30/2007 11853 11056 11972
12/31/2007 11775 10980 11893
1/1/2008 11775 10980 11893
1/2/2008 11619 10824 11736
1/3/2008 11628 10824 11744
1/4/2008 11283 10558 11397
1/5/2008 11283 10558 11397
1/6/2008 11283 10558 11397
1/7/2008 11171 10592 11284
1/8/2008 10912 10401 11022
1/9/2008 10977 10544 11089
1/10/2008 11190 10628 11305
1/11/2008 11045 10484 11156
1/12/2008 11045 10484 11156
1/13/2008 11045 10484 11156
1/14/2008 11374 10598 11490
1/15/2008 11051 10334 11165
1/16/2008 10855 10277 10966
1/17/2008 10384 9979 10490
1/18/2008 10504 9918 10612
1/19/2008 10504 9918 10612
1/20/2008 10504 9918 10612
1/21/2008 10504 9918 10612
1/22/2008 10411 9809 10518
1/23/2008 10631 10019 10740
1/24/2008 10781 10120 10891
1/25/2008 10775 9960 10885
1/26/2008 10775 9960 10885
1/27/2008 10775 9960 10885
1/28/2008 11019 10135 11133
1/29/2008 11083 10198 11199
1/30/2008 11055 10150 11171
1/31/2008 11279 10322 11398
2/1/2008 11503 10448 11624
2/2/2008 11503 10448 11624
2/3/2008 11503 10448 11624
2/4/2008 11323 10339 11444
2/5/2008 10971 10009 11086
2/6/2008 10929 9937 11044
2/7/2008 11030 10017 11146
2/8/2008 11136 9975 11255
2/9/2008 11136 9975 11255
2/10/2008 11136 9975 11255
2/11/2008 11283 10035 11404
2/12/2008 11275 10108 11395
2/13/2008 11431 10249 11552
2/14/2008 11294 10112 11414
2/15/2008 11279 10121 11399
2/16/2008 11279 10121 11399
2/17/2008 11279 10121 11399
2/18/2008 11279 10121 11399
2/19/2008 11427 10113 11550
2/20/2008 11568 10198 11694
2/21/2008 11404 10070 11526
2/22/2008 11465 10151 11589
2/23/2008 11465 10151 11589
2/24/2008 11465 10151 11589
2/25/2008 11733 10291 11861
2/26/2008 11756 10362 11884
2/27/2008 11758 10355 11888
2/28/2008 11687 10264 11814
2/29/2008 11231 9986 11353
3/1/2008 11231 9986 11353
3/2/2008 11231 9986 11353
3/3/2008 11359 9992 11484
3/4/2008 11174 9957 11295
3/5/2008 11404 10015 11529
3/6/2008 11205 9796 11329
3/7/2008 10899 9713 11019
3/8/2008 10899 9713 11019
3/9/2008 10899 9713 11019
3/10/2008 10563 9564 10676
3/11/2008 11152 9919 11275
3/12/2008 11112 9833 11235
3/13/2008 11302 9883 11428
3/14/2008 11169 9678 11292
3/15/2008 11169 9678 11292
3/16/2008 11169 9678 11292
3/17/2008 10981 9593 11103
3/18/2008 11330 10000 11457
3/19/2008 10827 9757 10947
3/20/2008 10846 9991 10964
3/21/2008 10846 9991 10964
3/22/2008 10846 9991 10964
3/23/2008 10846 9991 10964
3/24/2008 11170 10144 11292
3/25/2008 11376 10167 11504
3/26/2008 11326 10079 11452
3/27/2008 11161 9965 11286
3/28/2008 11127 9887 11252
3/29/2008 11127 9887 11252
3/30/2008 11127 9887 11252
3/31/2008 11191 9943 11317
4/1/2008 11561 10300 11691
4/2/2008 11665 10282 11796
4/3/2008 11743 10296 11876
4/4/2008 11955 10304 12091
4/5/2008 11955 10304 12091
4/6/2008 11955 10304 12091
4/7/2008 11885 10320 12020
4/8/2008 11928 10271 12065
4/9/2008 11758 10189 11896
4/10/2008 11784 10235 11921
4/11/2008 11589 10027 11724
4/12/2008 11589 10027 11724
4/13/2008 11589 10027 11724
4/14/2008 11546 9993 11683
4/15/2008 11576 10039 11714
4/16/2008 12089 10268 12235
4/17/2008 12040 10275 12185
4/18/2008 12209 10461 12356
4/19/2008 12209 10461 12356
4/20/2008 12209 10461 12356
4/21/2008 12173 10445 12321
4/22/2008 11930 10353 12072
4/23/2008 11818 10383 11959
4/24/2008 11769 10450 11907
4/25/2008 12059 10518 12205
4/26/2008 12059 10518 12205
4/27/2008 12059 10518 12205
4/28/2008 11955 10508 12096
4/29/2008 11724 10467 11863
4/30/2008 11671 10427 11811
5/1/2008 11659 10608 11796
5/2/2008 11731 10642 11872
5/3/2008 11731 10642 11872
5/4/2008 11731 10642 11872
5/5/2008 11828 10595 11975
5/6/2008 11915 10677 12066
5/7/2008 11843 10488 11988
5/8/2008 12048 10527 12198
5/9/2008 11898 10458 12045
5/10/2008 11898 10458 12045
5/11/2008 11898 10458 12045
5/12/2008 12097 10573 12245
5/13/2008 12137 10572 12288
5/14/2008 12233 10616 12384
5/15/2008 12426 10730 12580
5/16/2008 12551 10744 12708
5/17/2008 12551 10744 12708
5/18/2008 12551 10744 12708
5/19/2008 12544 10754 12698
5/20/2008 12476 10654 12633
5/21/2008 12133 10484 12285
5/22/2008 12072 10513 12222
5/23/2008 11909 10375 12058
5/24/2008 11909 10375 12058
5/25/2008 11909 10375 12058
5/26/2008 11909 10375 12058
5/27/2008 11896 10446 12043
5/28/2008 12212 10489 12363
5/29/2008 12137 10546 12287
5/30/2008 12127 10562 12279
5/31/2008 12127 10562 12279
6/1/2008 12127 10562 12279
6/2/2008 12034 10452 12185
6/3/2008 11934 10392 12086
6/4/2008 11943 10393 12095
6/5/2008 12243 10597 12401
6/6/2008 11890 10271 12044
6/7/2008 11890 10271 12044
6/8/2008 11890 10271 12044
6/9/2008 11932 10279 12088
6/10/2008 11741 10254 11894
6/11/2008 11519 10083 11672
6/12/2008 11559 10117 11711
6/13/2008 11875 10269 12033
6/14/2008 11875 10269 12033
6/15/2008 11875 10269 12033
6/16/2008 11843 10270 12001
6/17/2008 11771 10201 11928
6/18/2008 11650 10102 11808
6/19/2008 11716 10143 11875
6/20/2008 11469 9955 11625
6/21/2008 11469 9955 11625
6/22/2008 11469 9955 11625
6/23/2008 11535 9955 11693
6/24/2008 11268 9927 11421
6/25/2008 11414 9986 11571
6/26/2008 11037 9695 11186
6/27/2008 11043 9660 11194
6/28/2008 11043 9660 11194
6/29/2008 11043 9660 11194
6/30/2008 10997 9672 11147
7/1/2008 10888 9711 11037
7/2/2008 10396 9535 10537
7/3/2008 10451 9545 10594
7/4/2008 10451 9545 10594
7/5/2008 10451 9545 10594
7/6/2008 10451 9545 10594
7/7/2008 10381 9465 10522
7/8/2008 10481 9631 10625
7/9/2008 10338 9412 10479
7/10/2008 10700 9478 10846
7/11/2008 10683 9374 10828
7/12/2008 10683 9374 10828
7/13/2008 10683 9374 10828
7/14/2008 10656 9289 10799
7/15/2008 10575 9188 10717
7/16/2008 10749 9420 10896
7/17/2008 10873 9533 11022
7/18/2008 10839 9536 10988
7/19/2008 10839 9536 10988
7/20/2008 10839 9536 10988
7/21/2008 10982 9531 11132
7/22/2008 10997 9660 11147
7/23/2008 10988 9699 11140
7/24/2008 10705 9475 10851
7/25/2008 10745 9515 10893
7/26/2008 10745 9515 10893
7/27/2008 10745 9515 10893
7/28/2008 10688 9338 10834
7/29/2008 11009 9557 11162
7/30/2008 11218 9716 11374
7/31/2008 11148 9591 11304
8/1/2008 10990 9537 11142
8/2/2008 10990 9537 11142
8/3/2008 10990 9537 11142
8/4/2008 10694 9452 10841
8/5/2008 10922 9724 11073
8/6/2008 11003 9761 11155
8/7/2008 10837 9587 10986
8/8/2008 11003 9816 11157
8/9/2008 11003 9816 11157
8/10/2008 11003 9816 11157
8/11/2008 10997 9887 11151
8/12/2008 11009 9768 11162
8/13/2008 11146 9743 11303
8/14/2008 11129 9797 11285
8/15/2008 11158 9838 11317
8/16/2008 11158 9838 11317
8/17/2008 11158 9838 11317
8/18/2008 11039 9690 11195
8/19/2008 10960 9601 11113
8/20/2008 11094 9661 11251
8/21/2008 11141 9686 11298
8/22/2008 11152 9797 11310
8/23/2008 11152 9797 11310
8/24/2008 11152 9797 11310
8/25/2008 10935 9604 11089
8/26/2008 11020 9640 11176
8/27/2008 11146 9718 11303
8/28/2008 11369 9864 11533
8/29/2008 11229 9729 11390
8/30/2008 11229 9729 11390
8/31/2008 11229 9729 11390
9/1/2008 11229 9729 11390
9/2/2008 11080 9690 11238
9/3/2008 11094 9675 11253
9/4/2008 10673 9386 10826
9/5/2008 10775 9428 10929
9/6/2008 10775 9428 10929
9/7/2008 10775 9428 10929
9/8/2008 10781 9623 10938
9/9/2008 10372 9294 10521
9/10/2008 10558 9352 10710
9/11/2008 10711 9484 10866
9/12/2008 10901 9504 11061
9/13/2008 10901 9504 11061
9/14/2008 10901 9504 11061
9/15/2008 10338 9056 10488
9/16/2008 10547 9215 10699
9/17/2008 10127 8781 10272
9/18/2008 10436 9164 10587
9/19/2008 10907 9533 11068
9/20/2008 10907 9533 11068
9/21/2008 10907 9533 11068
9/22/2008 10493 9169 10650
9/23/2008 10250 9026 10408
9/24/2008 10210 9008 10368
9/25/2008 10255 9185 10417
9/26/2008 10031 9216 10194
9/27/2008 10031 9216 10194
9/28/2008 10031 9216 10194
9/29/2008 9179 8407 9332
9/30/2008 9498 8862 9654
10/1/2008 9327 8824 9484
10/2/2008 8683 8469 8837
10/3/2008 8610 8355 8762
10/4/2008 8610 8355 8762
10/5/2008 8610 8355 8762
10/6/2008 8274 8034 8420
10/7/2008 7777 7573 7919
10/8/2008 7927 7491 8069
10/9/2008 7381 6920 7516
10/10/2008 7366 6840 7502
10/11/2008 7366 6840 7502
10/12/2008 7366 6840 7502
10/13/2008 8205 7632 8352
10/14/2008 8051 7591 8198
10/15/2008 7079 6906 7212
10/16/2008 7426 7200 7565
10/17/2008 7372 7155 7509
10/18/2008 7372 7155 7509
10/19/2008 7372 7155 7509
10/20/2008 7848 7496 7990
10/21/2008 7481 7265 7619
10/22/2008 6931 6824 7061
10/23/2008 6867 6910 6997
10/24/2008 6582 6672 6706
10/25/2008 6582 6672 6706
10/26/2008 6582 6672 6706
10/27/2008 6257 6460 6375
10/28/2008 7002 7157 7134
10/29/2008 7027 7078 7155
10/30/2008 7229 7262 7359
10/31/2008 7359 7374 7492
</Table>
TOTAL RETURNS FOR THE PERIOD ENDED OCTOBER 31, 2008
- --------------------------------------------------------------------------------
<Table>
<Caption>
SINCE INCEPTION
ONE YEAR (11/01/06)
-------- ---------------
RYDEX S&P EQUAL WEIGHT MATERIALS ETF...................... -40.67% -14.22%
S&P 500 EQUAL WEIGHT MATERIALS TOTAL RETURN INDEX......... -40.18% -13.46%
S&P 500 TOTAL RETURN INDEX................................ -36.10% -14.15%
</Table>
The returns presented above do not reflect the effect of taxes. Index returns
represent total returns. Past performance is no guarantee of future results.
29 ANNUAL REPORT
Rydex S&P Equal Weight Materials ETF
PORTFOLIO SUMMARY (Unaudited) As of October 31, 2008
- --------------------------------------------------------------------------------
TOP 10 HOLDINGS*
- --------------------------------------------------------------------------------
<Table>
<Caption>
DESCRIPTION % OF NET ASSETS
- ------------------------------------------------------------------------------------
ROHM & HAAS CO. 4.58%
BEMIS CO., INC. 4.16%
NUCOR CORP. 4.08%
PACTIV CORP. 4.05%
HERCULES, INC. 4.04%
SIGMA-ALDRICH CORP. 3.90%
BALL CORP. 3.86%
MONSANTO CO. 3.70%
PRAXAIR, INC. 3.70%
TITANIUM METALS CORP. 3.60%
- ------------------------------------------------------------------------------------
</Table>
INDUSTRY ALLOCATIONS*
(PIE CHART)
<Table>
Chemicals 50.42
Metals & Mining 22.02
Containers & Packaging 15.61
Paper & Forest Products 8.73
Construction Materials 3.22
</Table>
* The Fund's Top Ten Holdings are expressed as a percentage of net assets and
the Industry Allocations are expressed as a percentage of the Fund's
investments market value. These percentages may change over time.
30
RYDEX S&P EQUAL WEIGHT TECHNOLOGY ETF
MANAGER'S ANALYSIS (Unaudited)
- --------------------------------------------------------------------------------
For the period ended October 31, 2008, Rydex S&P Equal Weight Technology ETF
returned -45.58% compared to its benchmark S&P Equal Weight Technology Total
Return Index and the capitalization-weighted S&P Technology Index, which
returned -45.55% and -41.21% respectively for the same time period.
The office electronics industry benefited both the equal weight technology index
and its cap-weighted counterpart. While semiconductors and semiconductor
equipment were the largest detractors of returns for the S&P Equal Weight
Technology Index, the cap-weighted technology index and the equal weight index
were hurt most by computers and peripherals. The equal weight exposure to
computers and peripherals was most responsible for RYT's underperformance.
CUMULATIVE FUND PERFORMANCE: NOVEMBER 1, 2006 - OCTOBER 31, 2008
(Performance Graph)
<Table>
<Caption>
S&P 500
EQUAL WEIGHT
RYDEX S&P S&P 500 INFORMATION TECHNOLOGY
EQUAL WEIGHT TOTAL RETURN TOTAL RETURN
TECHNOLOGY ETF(A) INDEX(B) INDEX(C)
----------------- ------------ ----------------------
11/1/2006 10000 10000 10001
11/2/2006 10008 9999 10011
11/3/2006 10010 9978 10013
11/4/2006 10010 9978 10013
11/5/2006 10010 9978 10013
11/6/2006 10169 10091 10172
11/7/2006 10228 10114 10231
11/8/2006 10266 10137 10269
11/9/2006 10249 10085 10253
11/10/2006 10312 10104 10315
11/11/2006 10312 10104 10315
11/12/2006 10312 10104 10315
11/13/2006 10423 10132 10426
11/14/2006 10548 10198 10551
11/15/2006 10561 10225 10566
11/16/2006 10592 10249 10597
11/17/2006 10579 10259 10585
11/18/2006 10579 10259 10585
11/19/2006 10579 10259 10585
11/20/2006 10594 10254 10599
11/21/2006 10596 10272 10601
11/22/2006 10697 10297 10703
11/23/2006 10697 10297 10703
11/24/2006 10665 10260 10671
11/25/2006 10665 10260 10671
11/26/2006 10665 10260 10671
11/27/2006 10400 10120 10406
11/28/2006 10397 10158 10403
11/29/2006 10439 10256 10445
11/30/2006 10485 10264 10492
12/1/2006 10400 10236 10408
12/2/2006 10400 10236 10408
12/3/2006 10400 10236 10408
12/4/2006 10527 10327 10536
12/5/2006 10569 10368 10577
12/6/2006 10523 10357 10532
12/7/2006 10427 10317 10434
12/8/2006 10441 10336 10451
12/9/2006 10441 10336 10451
12/10/2006 10441 10336 10451
12/11/2006 10446 10359 10454
12/12/2006 10395 10349 10404
12/13/2006 10372 10363 10381
12/14/2006 10527 10453 10536
12/15/2006 10527 10465 10538
12/16/2006 10527 10465 10538
12/17/2006 10527 10465 10538
12/18/2006 10456 10431 10468
12/19/2006 10404 10454 10415
12/20/2006 10423 10440 10433
12/21/2006 10339 10404 10350
12/22/2006 10262 10350 10274
12/23/2006 10262 10350 10274
12/24/2006 10262 10350 10274
12/25/2006 10262 10350 10274
12/26/2006 10316 10395 10329
12/27/2006 10387 10470 10399
12/28/2006 10358 10455 10370
12/29/2006 10316 10408 10329
12/30/2006 10316 10408 10329
12/31/2006 10316 10408 10329
1/1/2007 10316 10408 10329
1/2/2007 10316 10408 10329
1/3/2007 10328 10398 10342
1/4/2007 10513 10411 10526
1/5/2007 10425 10347 10439
1/6/2007 10425 10347 10439
1/7/2007 10425 10347 10439
1/8/2007 10435 10373 10448
1/9/2007 10469 10368 10483
1/10/2007 10546 10389 10561
1/11/2007 10590 10455 10605
1/12/2007 10611 10506 10625
1/13/2007 10611 10506 10625
1/14/2007 10611 10506 10625
1/15/2007 10611 10506 10625
1/16/2007 10582 10515 10595
1/17/2007 10492 10506 10506
1/18/2007 10268 10475 10282
1/19/2007 10301 10506 10315
1/20/2007 10301 10506 10315
1/21/2007 10301 10506 10315
1/22/2007 10211 10451 10225
1/23/2007 10224 10488 10239
1/24/2007 10379 10577 10394
1/25/2007 10287 10458 10301
1/26/2007 10335 10445 10351
1/27/2007 10335 10445 10351
1/28/2007 10335 10445 10351
1/29/2007 10297 10435 10313
1/30/2007 10343 10495 10359
1/31/2007 10370 10566 10386
2/1/2007 10412 10625 10428
2/2/2007 10473 10643 10488
2/3/2007 10473 10643 10488
2/4/2007 10473 10643 10488
2/5/2007 10467 10634 10484
2/6/2007 10456 10641 10473
2/7/2007 10575 10660 10593
2/8/2007 10598 10648 10615
2/9/2007 10462 10573 10479
2/10/2007 10462 10573 10479
2/11/2007 10462 10573 10479
2/12/2007 10418 10539 10435
2/13/2007 10462 10621 10480
2/14/2007 10632 10705 10651
2/15/2007 10692 10717 10710
2/16/2007 10674 10708 10693
2/17/2007 10674 10708 10693
2/18/2007 10674 10708 10693
2/19/2007 10674 10708 10693
2/20/2007 10724 10739 10743
2/21/2007 10711 10724 10731
2/22/2007 10799 10717 10818
2/23/2007 10831 10680 10852
2/24/2007 10831 10680 10852
2/25/2007 10831 10680 10852
2/26/2007 10778 10668 10799
2/27/2007 10374 10299 10395
2/28/2007 10431 10359 10451
3/1/2007 10354 10332 10372
3/2/2007 10167 10215 10187
3/3/2007 10167 10215 10187
3/4/2007 10167 10215 10187
3/5/2007 10079 10119 10098
3/6/2007 10255 10276 10276
3/7/2007 10199 10254 10220
3/8/2007 10291 10327 10311
3/9/2007 10316 10334 10337
3/10/2007 10316 10334 10337
3/11/2007 10316 10334 10337
3/12/2007 10387 10362 10407
3/13/2007 10172 10154 10193
3/14/2007 10280 10223 10303
3/15/2007 10305 10261 10326
3/16/2007 10266 10222 10288
3/17/2007 10266 10222 10288
3/18/2007 10266 10222 10288
3/19/2007 10299 10333 10323
3/20/2007 10383 10399 10407
3/21/2007 10582 10577 10605
3/22/2007 10515 10573 10539
3/23/2007 10513 10584 10537
3/24/2007 10513 10584 10537
3/25/2007 10513 10584 10537
3/26/2007 10546 10595 10571
3/27/2007 10504 10529 10528
3/28/2007 10404 10448 10429
3/29/2007 10349 10487 10375
3/30/2007 10377 10475 10401
3/31/2007 10377 10475 10401
4/1/2007 10377 10475 10401
4/2/2007 10429 10502 10456
4/3/2007 10523 10602 10551
4/4/2007 10556 10614 10585
4/5/2007 10615 10649 10644
4/6/2007 10615 10649 10644
4/7/2007 10615 10649 10644
4/8/2007 10615 10649 10644
4/9/2007 10584 10655 10612
4/10/2007 10611 10684 10640
4/11/2007 10523 10615 10552
4/12/2007 10605 10681 10634
4/13/2007 10613 10718 10642
4/14/2007 10613 10718 10642
4/15/2007 10613 10718 10642
4/16/2007 10690 10833 10720
4/17/2007 10699 10855 10729
4/18/2007 10751 10863 10782
4/19/2007 10738 10850 10770
4/20/2007 10814 10951 10845
4/21/2007 10814 10951 10845
4/22/2007 10814 10951 10845
4/23/2007 10810 10926 10840
4/24/2007 10908 10922 10939
4/25/2007 10987 11034 11020
4/26/2007 11021 11026 11053
4/27/2007 10977 11025 11009
4/28/2007 10977 11025 11009
4/29/2007 10977 11025 11009
4/30/2007 10839 10939 10872
5/1/2007 10856 10968 10889
5/2/2007 10939 11040 10972
5/3/2007 10977 11091 11011
5/4/2007 10985 11115 11019
5/5/2007 10985 11115 11019
5/6/2007 10985 11115 11019
5/7/2007 10964 11144 10998
5/8/2007 10977 11132 11011
5/9/2007 11052 11171 11087
5/10/2007 10885 11017 10918
5/11/2007 11038 11124 11072
5/12/2007 11038 11124 11072
5/13/2007 11038 11124 11072
5/14/2007 10985 11105 11021
5/15/2007 10879 11091 10914
5/16/2007 10975 11190 11009
5/17/2007 10914 11181 10948
5/18/2007 11010 11255 11046
5/19/2007 11010 11255 11046
5/20/2007 11010 11255 11046
5/21/2007 11063 11272 11099
5/22/2007 11096 11265 11133
5/23/2007 11002 11252 11038
5/24/2007 10801 11144 10836
5/25/2007 10897 11205 10935
5/26/2007 10897 11205 10935
5/27/2007 10897 11205 10935
5/28/2007 10897 11205 10935
5/29/2007 10962 11224 11000
5/30/2007 11027 11318 11065
5/31/2007 11144 11321 11178
6/1/2007 11176 11363 11209
6/2/2007 11176 11363 11209
6/3/2007 11176 11363 11209
6/4/2007 11232 11384 11266
6/5/2007 11188 11324 11225
6/6/2007 11103 11226 11139
6/7/2007 10927 11030 10963
6/8/2007 11105 11155 11142
6/9/2007 11105 11155 11142
6/10/2007 11105 11155 11142
6/11/2007 11094 11166 11130
6/12/2007 11000 11047 11037
6/13/2007 11153 11217 11189
6/14/2007 11205 11272 11243
6/15/2007 11274 11345 11312
6/16/2007 11274 11345 11312
6/17/2007 11274 11345 11312
6/18/2007 11282 11332 11317
6/19/2007 11268 11352 11307
6/20/2007 11174 11197 11211
6/21/2007 11356 11269 11395
6/22/2007 11234 11124 11273
6/23/2007 11234 11124 11273
6/24/2007 11234 11124 11273
6/25/2007 11163 11088 11202
6/26/2007 11126 11053 11164
6/27/2007 11291 11154 11331
6/28/2007 11262 11150 11300
6/29/2007 11205 11133 11245
6/30/2007 11205 11133 11245
7/1/2007 11205 11133 11245
7/2/2007 11305 11252 11347
7/3/2007 11331 11294 11373
7/4/2007 11331 11294 11373
7/5/2007 11389 11298 11431
7/6/2007 11454 11339 11496
7/7/2007 11454 11339 11496
7/8/2007 11454 11339 11496
7/9/2007 11477 11349 11519
7/10/2007 11393 11188 11436
7/11/2007 11427 11254 11469
7/12/2007 11649 11468 11692
7/13/2007 11640 11504 11683
7/14/2007 11640 11504 11683
7/15/2007 11640 11504 11683
7/16/2007 11638 11482 11681
7/17/2007 11718 11481 11760
7/18/2007 11634 11458 11676
7/19/2007 11778 11510 11822
7/20/2007 11657 11369 11700
7/21/2007 11657 11369 11700
7/22/2007 11657 11369 11700
7/23/2007 11672 11425 11716
7/24/2007 11473 11199 11516
7/25/2007 11446 11251 11488
7/26/2007 11190 10988 11232
7/27/2007 10958 10814 10998
7/28/2007 10958 10814 10998
7/29/2007 10958 10814 10998
7/30/2007 11063 10925 11103
7/31/2007 10881 10787 10922
8/1/2007 10921 10866 10962
8/2/2007 10969 10916 11011
8/3/2007 10657 10627 10698
8/4/2007 10657 10627 10698
8/5/2007 10657 10627 10698
8/6/2007 10780 10884 10821
8/7/2007 10772 10951 10814
8/8/2007 10931 11109 10973
8/9/2007 10686 10781 10725
8/10/2007 10726 10786 10767
8/11/2007 10726 10786 10767
8/12/2007 10726 10786 10767
8/13/2007 10789 10782 10830
8/14/2007 10594 10587 10634
8/15/2007 10374 10443 10414
8/16/2007 10320 10477 10359
8/17/2007 10527 10735 10568
8/18/2007 10527 10735 10568
8/19/2007 10527 10735 10568
8/20/2007 10554 10732 10596
8/21/2007 10617 10744 10659
8/22/2007 10745 10870 10789
8/23/2007 10711 10858 10755
8/24/2007 10837 10985 10881
8/25/2007 10837 10985 10881
8/26/2007 10837 10985 10881
8/27/2007 10751 10892 10796
8/28/2007 10508 10636 10551
8/29/2007 10768 10872 10812
8/30/2007 10789 10827 10833
8/31/2007 10908 10949 10953
9/1/2007 10908 10949 10953
9/2/2007 10908 10949 10953
9/3/2007 10908 10949 10953
9/4/2007 11073 11064 11118
9/5/2007 10954 10942 10999
9/6/2007 11017 10990 11064
9/7/2007 10782 10804 10828
9/8/2007 10782 10804 10828
9/9/2007 10782 10804 10828
9/10/2007 10774 10791 10819
9/11/2007 10929 10938 10975
9/12/2007 10847 10942 10894
9/13/2007 10833 11034 10879
9/14/2007 10822 11037 10869
9/15/2007 10822 11037 10869
9/16/2007 10822 11037 10869
9/17/2007 10757 10980 10804
9/18/2007 11008 11301 11056
9/19/2007 11059 11370 11107
9/20/2007 11044 11296 11092
9/21/2007 11069 11348 11117
9/22/2007 11069 11348 11117
9/23/2007 11069 11348 11117
9/24/2007 11025 11289 11074
9/25/2007 11111 11285 11161
9/26/2007 11134 11348 11184
9/27/2007 11163 11393 11214
9/28/2007 11149 11359 11201
9/29/2007 11149 11359 11201
9/30/2007 11149 11359 11201
10/1/2007 11310 11510 11363
10/2/2007 11354 11507 11408
10/3/2007 11274 11457 11326
10/4/2007 11274 11481 11326
10/5/2007 11418 11594 11473
10/6/2007 11418 11594 11473
10/7/2007 11418 11594 11473
10/8/2007 11464 11557 11518
10/9/2007 11498 11650 11552
10/10/2007 11527 11631 11581
10/11/2007 11364 11572 11417
10/12/2007 11510 11627 11566
10/13/2007 11510 11627 11566
10/14/2007 11510 11627 11566
10/15/2007 11483 11530 11539
10/16/2007 11400 11454 11457
10/17/2007 11517 11475 11573
10/18/2007 11527 11467 11584
10/19/2007 11205 11173 11261
10/20/2007 11205 11173 11261
10/21/2007 11205 11173 11261
10/22/2007 11318 11216 11374
10/23/2007 11397 11315 11453
10/24/2007 11243 11287 11298
10/25/2007 11174 11276 11227
10/26/2007 11328 11432 11383
10/27/2007 11328 11432 11383
10/28/2007 11328 11432 11383
10/29/2007 11391 11476 11447
10/30/2007 11410 11402 11466
10/31/2007 11544 11539 11601
11/1/2007 11274 11237 11332
11/2/2007 11372 11247 11428
11/3/2007 11372 11247 11428
11/4/2007 11372 11247 11428
11/5/2007 11285 11192 11340
11/6/2007 11316 11327 11365
11/7/2007 11042 11000 11084
11/8/2007 10822 10994 10864
11/9/2007 10573 10837 10631
11/10/2007 10573 10837 10631
11/11/2007 10573 10837 10631
11/12/2007 10427 10729 10486
11/13/2007 10749 11045 10801
11/14/2007 10575 10970 10630
11/15/2007 10494 10825 10538
11/16/2007 10586 10882 10625
11/17/2007 10586 10882 10625
11/18/2007 10586 10882 10625
11/19/2007 10400 10692 10446
11/20/2007 10341 10741 10375
11/21/2007 10207 10571 10243
11/22/2007 10207 10571 10243
11/23/2007 10343 10750 10385
11/24/2007 10343 10750 10385
11/25/2007 10343 10750 10385
11/26/2007 10096 10500 10131
11/27/2007 10276 10658 10300
11/28/2007 10596 10966 10623
11/29/2007 10611 10972 10629
11/30/2007 10525 11057 10544
12/1/2007 10525 11057 10544
12/2/2007 10525 11057 10544
12/3/2007 10485 10992 10503
12/4/2007 10433 10920 10452
12/5/2007 10661 11092 10681
12/6/2007 10810 11260 10829
12/7/2007 10820 11240 10840
12/8/2007 10820 11240 10840
12/9/2007 10820 11240 10840
12/10/2007 10918 11325 10938
12/11/2007 10678 11039 10698
12/12/2007 10749 11107 10769
12/13/2007 10718 11121 10737
12/14/2007 10598 10969 10618
12/15/2007 10598 10969 10618
12/16/2007 10598 10969 10618
12/17/2007 10391 10804 10411
12/18/2007 10425 10872 10445
12/19/2007 10456 10857 10476
12/20/2007 10615 10914 10636
12/21/2007 10717 11097 10737
12/22/2007 10717 11097 10737
12/23/2007 10717 11097 10737
12/24/2007 10773 11187 10797
12/25/2007 10773 11187 10797
12/26/2007 10781 11196 10804
12/27/2007 10585 11040 10608
12/28/2007 10595 11056 10618
12/29/2007 10595 11056 10618
12/30/2007 10595 11056 10618
12/31/2007 10503 10980 10526
1/1/2008 10503 10980 10526
1/2/2008 10231 10824 10254
1/3/2008 10158 10824 10182
1/4/2008 9733 10558 9755
1/5/2008 9733 10558 9755
1/6/2008 9733 10558 9755
1/7/2008 9643 10592 9667
1/8/2008 9392 10401 9414
1/9/2008 9465 10544 9488
1/10/2008 9547 10628 9570
1/11/2008 9321 10484 9344
1/12/2008 9321 10484 9344
1/13/2008 9321 10484 9344
1/14/2008 9484 10598 9508
1/15/2008 9222 10334 9245
1/16/2008 9235 10277 9259
1/17/2008 9065 9979 9088
1/18/2008 9137 9918 9161
1/19/2008 9137 9918 9161
1/20/2008 9137 9918 9161
1/21/2008 9137 9918 9161
1/22/2008 8883 9809 8906
1/23/2008 8919 10019 8941
1/24/2008 9229 10120 9253
1/25/2008 9137 9960 9161
1/26/2008 9137 9960 9161
1/27/2008 9137 9960 9161
1/28/2008 9250 10135 9274
1/29/2008 9333 10198 9358
1/30/2008 9375 10150 9399
1/31/2008 9465 10322 9489
2/1/2008 9802 10448 9827
2/2/2008 9802 10448 9827
2/3/2008 9802 10448 9827
2/4/2008 9672 10339 9699
2/5/2008 9371 10009 9396
2/6/2008 9285 9937 9310
2/7/2008 9281 10017 9305
2/8/2008 9315 9975 9339
2/9/2008 9315 9975 9339
2/10/2008 9315 9975 9339
2/11/2008 9465 10035 9492
2/12/2008 9444 10108 9470
2/13/2008 9700 10249 9727
2/14/2008 9478 10112 9504
2/15/2008 9425 10121 9453
2/16/2008 9425 10121 9453
2/17/2008 9425 10121 9453
2/18/2008 9425 10121 9453
2/19/2008 9369 10113 9396
2/20/2008 9513 10198 9541
2/21/2008 9432 10070 9459
2/22/2008 9478 10151 9506
2/23/2008 9478 10151 9506
2/24/2008 9478 10151 9506
2/25/2008 9599 10291 9627
2/26/2008 9683 10362 9712
2/27/2008 9735 10355 9764
2/28/2008 9549 10264 9577
2/29/2008 9321 9986 9349
3/1/2008 9321 9986 9349
3/2/2008 9321 9986 9349
3/3/2008 9258 9992 9286
3/4/2008 9283 9957 9312
3/5/2008 9377 10015 9407
3/6/2008 9153 9796 9181
3/7/2008 9128 9713 9156
3/8/2008 9128 9713 9156
3/9/2008 9128 9713 9156
3/10/2008 8978 9564 9005
3/11/2008 9279 9919 9307
3/12/2008 9227 9833 9256
3/13/2008 9264 9883 9294
3/14/2008 9045 9678 9074
3/15/2008 9045 9678 9074
3/16/2008 9045 9678 9074
3/17/2008 8942 9593 8970
3/18/2008 9306 10000 9336
3/19/2008 9042 9757 9071
3/20/2008 9211 9991 9242
3/21/2008 9211 9991 9242
3/22/2008 9211 9991 9242
3/23/2008 9211 9991 9242
3/24/2008 9493 10144 9524
3/25/2008 9514 10167 9546
3/26/2008 9370 10079 9401
3/27/2008 9177 9965 9207
3/28/2008 9116 9887 9146
3/29/2008 9116 9887 9146
3/30/2008 9116 9887 9146
3/31/2008 9179 9943 9210
4/1/2008 9495 10300 9526
4/2/2008 9520 10282 9552
4/3/2008 9621 10296 9654
4/4/2008 9627 10304 9660
4/5/2008 9627 10304 9660
4/6/2008 9627 10304 9660
4/7/2008 9571 10320 9603
4/8/2008 9474 10271 9508
4/9/2008 9426 10189 9460
4/10/2008 9554 10235 9588
4/11/2008 9292 10027 9326
4/12/2008 9292 10027 9326
4/13/2008 9292 10027 9326
4/14/2008 9229 9993 9262
4/15/2008 9244 10039 9278
4/16/2008 9543 10268 9578
4/17/2008 9522 10275 9557
4/18/2008 9797 10461 9832
4/19/2008 9797 10461 9832
4/20/2008 9797 10461 9832
4/21/2008 9862 10445 9896
4/22/2008 9642 10353 9676
4/23/2008 9836 10383 9873
4/24/2008 9977 10450 10013
4/25/2008 9968 10518 10004
4/26/2008 9968 10518 10004
4/27/2008 9968 10518 10004
4/28/2008 9935 10508 9971
4/29/2008 9970 10467 10007
4/30/2008 9866 10427 9901
5/1/2008 10159 10608 10196
5/2/2008 10132 10642 10169
5/3/2008 10132 10642 10169
5/4/2008 10132 10642 10169
5/5/2008 10060 10595 10097
5/6/2008 10209 10677 10247
5/7/2008 10040 10488 10076
5/8/2008 10092 10527 10130
5/9/2008 10063 10458 10100
5/10/2008 10063 10458 10100
5/11/2008 10063 10458 10100
5/12/2008 10230 10573 10269
5/13/2008 10272 10572 10310
5/14/2008 10360 10616 10398
5/15/2008 10573 10730 10614
5/16/2008 10594 10744 10634
5/17/2008 10594 10744 10634
5/18/2008 10594 10744 10634
5/19/2008 10538 10754 10579
5/20/2008 10389 10654 10429
5/21/2008 10268 10484 10308
5/22/2008 10291 10513 10330
5/23/2008 10201 10375 10240
5/24/2008 10201 10375 10240
5/25/2008 10201 10375 10240
5/26/2008 10201 10375 10240
5/27/2008 10366 10446 10407
5/28/2008 10427 10489 10469
5/29/2008 10504 10546 10546
5/30/2008 10605 10562 10648
5/31/2008 10605 10562 10648
6/1/2008 10605 10562 10648
6/2/2008 10452 10452 10495
6/3/2008 10437 10392 10480
6/4/2008 10548 10393 10593
6/5/2008 10665 10597 10711
6/6/2008 10366 10271 10410
6/7/2008 10366 10271 10410
6/8/2008 10366 10271 10410
6/9/2008 10326 10279 10372
6/10/2008 10226 10254 10269
6/11/2008 9952 10083 9994
6/12/2008 10010 10117 10054
6/13/2008 10209 10269 10256
6/14/2008 10209 10269 10256
6/15/2008 10209 10269 10256
6/16/2008 10287 10270 10334
6/17/2008 10161 10201 10207
6/18/2008 10004 10102 10048
6/19/2008 10163 10143 10210
6/20/2008 9924 9955 9969
6/21/2008 9924 9955 9969
6/22/2008 9924 9955 9969
6/23/2008 9820 9955 9866
6/24/2008 9799 9927 9844
6/25/2008 9941 9986 9989
6/26/2008 9594 9695 9640
6/27/2008 9546 9660 9590
6/28/2008 9546 9660 9590
6/29/2008 9546 9660 9590
6/30/2008 9466 9672 9512
7/1/2008 9464 9711 9509
7/2/2008 9307 9535 9350
7/3/2008 9246 9545 9292
7/4/2008 9246 9545 9292
7/5/2008 9246 9545 9292
7/6/2008 9246 9545 9292
7/7/2008 9267 9465 9313
7/8/2008 9368 9631 9413
7/9/2008 9093 9412 9137
7/10/2008 9154 9478 9199
7/11/2008 9051 9374 9096
7/12/2008 9051 9374 9096
7/13/2008 9051 9374 9096
7/14/2008 8951 9289 8995
7/15/2008 8970 9188 9015
7/16/2008 9234 9420 9281
7/17/2008 9378 9533 9426
7/18/2008 9349 9536 9397
7/19/2008 9349 9536 9397
7/20/2008 9349 9536 9397
7/21/2008 9278 9531 9325
7/22/2008 9269 9660 9318
7/23/2008 9376 9699 9426
7/24/2008 9112 9475 9160
7/25/2008 9190 9515 9238
7/26/2008 9190 9515 9238
7/27/2008 9190 9515 9238
7/28/2008 9020 9338 9067
7/29/2008 9229 9557 9279
7/30/2008 9271 9716 9320
7/31/2008 9206 9591 9254
8/1/2008 9146 9537 9194
8/2/2008 9146 9537 9194
8/3/2008 9146 9537 9194
8/4/2008 9129 9452 9177
8/5/2008 9349 9724 9398
8/6/2008 9458 9761 9508
8/7/2008 9424 9587 9474
8/8/2008 9652 9816 9704
8/9/2008 9652 9816 9704
8/10/2008 9652 9816 9704
8/11/2008 9770 9887 9822
8/12/2008 9719 9768 9771
8/13/2008 9705 9743 9758
8/14/2008 9822 9797 9876
8/15/2008 9872 9838 9927
8/16/2008 9872 9838 9927
8/17/2008 9872 9838 9927
8/18/2008 9713 9690 9766
8/19/2008 9562 9601 9615
8/20/2008 9581 9661 9633
8/21/2008 9552 9686 9604
8/22/2008 9669 9797 9723
8/23/2008 9669 9797 9723
8/24/2008 9669 9797 9723
8/25/2008 9487 9604 9539
8/26/2008 9433 9640 9484
8/27/2008 9535 9718 9587
8/28/2008 9644 9864 9698
8/29/2008 9445 9729 9499
8/30/2008 9445 9729 9499
8/31/2008 9445 9729 9499
9/1/2008 9445 9729 9499
9/2/2008 9387 9690 9439
9/3/2008 9202 9675 9255
9/4/2008 8863 9386 8911
9/5/2008 8913 9428 8963
9/6/2008 8913 9428 8963
9/7/2008 8913 9428 8963
9/8/2008 8974 9623 9025
9/9/2008 8704 9294 8751
9/10/2008 8773 9352 8822
9/11/2008 8821 9484 8871
9/12/2008 8823 9504 8873
9/13/2008 8823 9504 8873
9/14/2008 8823 9504 8873
9/15/2008 8472 9056 8519
9/16/2008 8518 9215 8568
9/17/2008 8164 8781 8208
9/18/2008 8467 9164 8513
9/19/2008 8740 9533 8789
9/20/2008 8740 9533 8789
9/21/2008 8740 9533 8789
9/22/2008 8338 9169 8388
9/23/2008 8235 9026 8286
9/24/2008 8296 9008 8345
9/25/2008 8411 9185 8460
9/26/2008 8407 9216 8459
9/27/2008 8407 9216 8459
9/28/2008 8407 9216 8459
9/29/2008 7636 8407 7683
9/30/2008 8030 8862 8081
10/1/2008 7883 8824 7932
10/2/2008 7475 8469 7522
10/3/2008 7347 8355 7393
10/4/2008 7347 8355 7393
10/5/2008 7347 8355 7393
10/6/2008 7039 8034 7083
10/7/2008 6613 7573 6655
10/8/2008 6576 7491 6617
10/9/2008 6328 6920 6369
10/10/2008 6224 6840 6264
10/11/2008 6224 6840 6264
10/12/2008 6224 6840 6264
10/13/2008 6957 7632 7000
10/14/2008 6731 7591 6771
10/15/2008 6127 6906 6164
10/16/2008 6400 7200 6439
10/17/2008 6362 7155 6403
10/18/2008 6362 7155 6403
10/19/2008 6362 7155 6403
10/20/2008 6613 7496 6652
10/21/2008 6253 7265 6288
10/22/2008 5939 6824 5971
10/23/2008 5849 6910 5884
10/24/2008 5708 6672 5742
10/25/2008 5708 6672 5742
10/26/2008 5708 6672 5742
10/27/2008 5587 6460 5620
10/28/2008 6163 7157 6201
10/29/2008 6043 7078 6077
10/30/2008 6213 7262 6248
10/31/2008 6282 7374 6316
</Table>
TOTAL RETURNS FOR THE PERIOD ENDED OCTOBER 31, 2008
- --------------------------------------------------------------------------------
<Table>
<Caption>
SINCE INCEPTION
ONE YEAR (11/01/06)
-------- ---------------
RYDEX S&P EQUAL WEIGHT TECHNOLOGY ETF............................. -45.58% -20.74%
S&P 500 EQUAL WEIGHT TECHNOLOGY TOTAL RETURN INDEX................ -45.55% -20.55%
S&P 500 TOTAL RETURN INDEX........................................ -36.10% -14.15%
</Table>
The returns presented above do not reflect the effect of taxes. Index returns
represent total returns. Past performance is no guarantee of future results.
31 ANNUAL REPORT
Rydex S&P Equal Weight Technology ETF
PORTFOLIO SUMMARY (Unaudited) As of October 31, 2008
- --------------------------------------------------------------------------------
TOP 10 HOLDINGS*
- --------------------------------------------------------------------------------
<Table>
<Caption>
DESCRIPTION % OF NET ASSETS
- ------------------------------------------------------------------------------------
MICRON TECHNOLOGY, INC. 2.03%
TELLABS, INC. 1.96%
ORACLE CORP. 1.78%
CIENA CORP. 1.76%
EMC CORP. 1.73%
CITRIX SYSTEMS, INC. 1.70%
PAYCHEX, INC. 1.61%
MICROSOFT CORP. 1.59%
VERISIGN, INC. 1.56%
TEXAS INSTRUMENTS, INC. 1.56%
- ------------------------------------------------------------------------------------
</Table>
INDUSTRY ALLOCATIONS*
(PIE CHART)
<Table>
Semiconductors & Semiconductor Equipment 25.04
Software 17.75
IT Services 15.42
Computers & Peripherals 14.29
Communications Equipment 13.12
Internet Software & Services 6.87
Electronic Equipment & Instruments 6.35
Office Electronics 1.16
</Table>
* The Fund's Top Ten Holdings are expressed as a percentage of net assets and
the Industry Allocations are expressed as a percentage of the Fund's
investments market value. These percentages may change over time.
32
RYDEX S&P EQUAL WEIGHT UTILITIES ETF
MANAGER'S ANALYSIS (Unaudited)
- --------------------------------------------------------------------------------
For the year ended October 31, 2008, Rydex S&P Equal Weight Utilities ETF
returned -31.63% while its benchmark, the S&P Equal Weight Utilities Total
Return Index, returned -31.45% and the cap-weighted S&P Utilities Total Return
Index returned -29.02%.
Both Rydex S&P Equal Weight Utilities ETF and its traditional weight counterpart
index were bolstered by the gas-utilities industry. Rydex S&P Equal Weight
Utilities ETF was hurt most by multi-utilities while the cap-weight index was
hurt most by electric utilities. However, it was the equal weight underexposure
to the telecommunication services sector that was most responsible for the
equal-weight strategy underperformance.
The most glaring underperformer in the S&P 500 Equal Weight Utilities Total
Return Index was Sprint Nextel (S), which was down more than 80% for the year.
Diversified telecomm, which features big names like AT&T (T), Verizon (VZ) and
Quest Communications (Q), also contributed to the performance of the ETF, losing
close to 40% for the year and contributing more than 7% to the ETF's losses for
the year. To provide adequate diversification within RYU, both the utilities and
telecommunications sectors are included in this ETF. The inclusion of
telecommunication will cause the ETF's performance to deviate from the S&P Equal
Weight Utilities Index.
CUMULATIVE FUND PERFORMANCE: NOVEMBER 1, 2006 - OCTOBER 31, 2008
(Performance Graph)
<Table>
<Caption>
S&P 500
RYDEX S&P S&P 500 EQUAL WEIGHT
EQUAL WEIGHT TOTAL RETURN UTILITIES TOTAL
UTILITIES ETF(A) INDEX(B) RETURN INDEX(C)
---------------- ------------ ---------------
11/1/2006 10000 10000 10000
11/2/2006 9978 9999 9977
11/3/2006 9938 9978 9938
11/4/2006 9938 9978 9938
11/5/2006 9938 9978 9938
11/6/2006 9964 10091 9964
11/7/2006 9969 10114 9970
11/8/2006 10020 10137 10021
11/9/2006 9993 10085 9992
11/10/2006 10031 10104 10032
11/11/2006 10031 10104 10032
11/12/2006 10031 10104 10032
11/13/2006 10053 10132 10054
11/14/2006 10076 10198 10077
11/15/2006 10044 10225 10044
11/16/2006 10086 10249 10086
11/17/2006 10106 10259 10107
11/18/2006 10106 10259 10107
11/19/2006 10106 10259 10107
11/20/2006 10084 10254 10085
11/21/2006 10080 10272 10083
11/22/2006 10091 10297 10093
11/23/2006 10091 10297 10093
11/24/2006 10104 10260 10106
11/25/2006 10104 10260 10106
11/26/2006 10104 10260 10106
11/27/2006 10004 10120 10006
11/28/2006 10067 10158 10069
11/29/2006 10222 10256 10225
11/30/2006 10259 10264 10262
12/1/2006 10270 10236 10274
12/2/2006 10270 10236 10274
12/3/2006 10270 10236 10274
12/4/2006 10368 10327 10372
12/5/2006 10381 10368 10386
12/6/2006 10342 10357 10348
12/7/2006 10302 10317 10307
12/8/2006 10288 10336 10292
12/9/2006 10288 10336 10292
12/10/2006 10288 10336 10292
12/11/2006 10322 10359 10327
12/12/2006 10373 10349 10380
12/13/2006 10399 10363 10405
12/14/2006 10437 10453 10443
12/15/2006 10441 10465 10448
12/16/2006 10441 10465 10448
12/17/2006 10441 10465 10448
12/18/2006 10372 10431 10379
12/19/2006 10410 10454 10417
12/20/2006 10384 10440 10392
12/21/2006 10373 10404 10382
12/22/2006 10348 10350 10355
12/23/2006 10348 10350 10355
12/24/2006 10348 10350 10355
12/25/2006 10348 10350 10355
12/26/2006 10413 10395 10422
12/27/2006 10467 10470 10476
12/28/2006 10444 10455 10453
12/29/2006 10437 10408 10446
12/30/2006 10437 10408 10446
12/31/2006 10437 10408 10446
1/1/2007 10437 10408 10446
1/2/2007 10437 10408 10446
1/3/2007 10475 10398 10481
1/4/2007 10446 10411 10451
1/5/2007 10284 10347 10288
1/6/2007 10284 10347 10288
1/7/2007 10284 10347 10288
1/8/2007 10274 10373 10281
1/9/2007 10243 10368 10249
1/10/2007 10263 10389 10269
1/11/2007 10274 10455 10281
1/12/2007 10229 10506 10236
1/13/2007 10229 10506 10236
1/14/2007 10229 10506 10236
1/15/2007 10229 10506 10236
1/16/2007 10271 10515 10278
1/17/2007 10253 10506 10260
1/18/2007 10258 10475 10265
1/19/2007 10300 10506 10308
1/20/2007 10300 10506 10308
1/21/2007 10300 10506 10308
1/22/2007 10282 10451 10290
1/23/2007 10344 10488 10351
1/24/2007 10437 10577 10445
1/25/2007 10357 10458 10365
1/26/2007 10384 10445 10393
1/27/2007 10384 10445 10393
1/28/2007 10384 10445 10393
1/29/2007 10379 10435 10388
1/30/2007 10425 10495 10434
1/31/2007 10448 10566 10458
2/1/2007 10512 10625 10521
2/2/2007 10531 10643 10541
2/3/2007 10531 10643 10541
2/4/2007 10531 10643 10541
2/5/2007 10611 10634 10621
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2/15/2007 10800 10717 10812
2/16/2007 10811 10708 10823
2/17/2007 10811 10708 10823
2/18/2007 10811 10708 10823
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2/26/2007 11100 10668 11117
2/27/2007 10772 10299 10788
2/28/2007 10833 10359 10849
3/1/2007 10849 10332 10865
3/2/2007 10695 10215 10711
3/3/2007 10695 10215 10711
3/4/2007 10695 10215 10711
3/5/2007 10540 10119 10555
3/6/2007 10686 10276 10701
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3/13/2007 10686 10154 10703
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3/15/2007 10847 10261 10865
3/16/2007 10792 10222 10810
3/17/2007 10792 10222 10810
3/18/2007 10792 10222 10810
3/19/2007 10903 10333 10923
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3/21/2007 11161 10577 11184
3/22/2007 11156 10573 11178
3/23/2007 11200 10584 11222
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3/27/2007 11245 10529 11270
3/28/2007 11220 10448 11243
3/29/2007 11267 10487 11291
3/30/2007 11216 10475 11240
3/31/2007 11216 10475 11240
4/1/2007 11216 10475 11240
4/2/2007 11404 10502 11430
4/3/2007 11428 10602 11454
4/4/2007 11400 10614 11425
4/5/2007 11442 10649 11469
4/6/2007 11442 10649 11469
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4/8/2007 11442 10649 11469
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4/15/2007 11442 10718 11470
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4/27/2007 11689 11025 11720
4/28/2007 11689 11025 11720
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4/30/2007 11597 10939 11628
5/1/2007 11711 10968 11744
5/2/2007 11810 11040 11843
5/3/2007 11834 11091 11867
5/4/2007 11850 11115 11883
5/5/2007 11850 11115 11883
5/6/2007 11850 11115 11883
5/7/2007 11933 11144 11968
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5/9/2007 11939 11171 11974
5/10/2007 11803 11017 11836
5/11/2007 11902 11124 11938
5/12/2007 11902 11124 11938
5/13/2007 11902 11124 11938
5/14/2007 11939 11105 11975
5/15/2007 11952 11091 11988
5/16/2007 12007 11190 12043
5/17/2007 11963 11181 11998
5/18/2007 12009 11255 12046
5/19/2007 12009 11255 12046
5/20/2007 12009 11255 12046
5/21/2007 12062 11272 12100
5/22/2007 12027 11265 12065
5/23/2007 11907 11252 11943
5/24/2007 11650 11144 11685
5/25/2007 11661 11205 11695
5/26/2007 11661 11205 11695
5/27/2007 11661 11205 11695
5/28/2007 11661 11205 11695
5/29/2007 11716 11224 11751
5/30/2007 11828 11318 11866
5/31/2007 11839 11321 11878
6/1/2007 11790 11363 11827
6/2/2007 11790 11363 11827
6/3/2007 11790 11363 11827
6/4/2007 11771 11384 11808
6/5/2007 11622 11324 11659
6/6/2007 11508 11226 11543
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6/8/2007 11284 11155 11316
6/9/2007 11284 11155 11316
6/10/2007 11284 11155 11316
6/11/2007 11341 11166 11374
6/12/2007 11185 11047 11216
6/13/2007 11382 11217 11415
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6/15/2007 11556 11345 11593
6/16/2007 11556 11345 11593
6/17/2007 11556 11345 11593
6/18/2007 11479 11332 11511
6/19/2007 11499 11352 11535
6/20/2007 11249 11197 11282
6/21/2007 11317 11269 11351
6/22/2007 11161 11124 11194
6/23/2007 11161 11124 11194
6/24/2007 11161 11124 11194
6/25/2007 11183 11088 11216
6/26/2007 11146 11053 11179
6/27/2007 11265 11154 11301
6/28/2007 11260 11150 11295
6/29/2007 11271 11133 11307
6/30/2007 11271 11133 11307
7/1/2007 11271 11133 11307
7/2/2007 11452 11252 11490
7/3/2007 11465 11294 11503
7/4/2007 11465 11294 11503
7/5/2007 11410 11298 11446
7/6/2007 11375 11339 11413
7/7/2007 11375 11339 11413
7/8/2007 11375 11339 11413
7/9/2007 11399 11349 11437
7/10/2007 11236 11188 11272
7/11/2007 11301 11254 11337
7/12/2007 11458 11468 11497
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7/15/2007 11576 11504 11616
7/16/2007 11445 11482 11484
7/17/2007 11426 11481 11466
7/18/2007 11482 11458 11521
7/19/2007 11665 11510 11707
7/20/2007 11495 11369 11535
7/21/2007 11495 11369 11535
7/22/2007 11495 11369 11535
7/23/2007 11549 11425 11589
7/24/2007 11217 11199 11257
7/25/2007 11249 11251 11288
7/26/2007 10951 10988 10987
7/27/2007 10770 10814 10806
7/28/2007 10770 10814 10806
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7/30/2007 10882 10925 10919
7/31/2007 10810 10787 10846
8/1/2007 11043 10866 11082
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8/3/2007 10716 10627 10751
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8/5/2007 10716 10627 10751
8/6/2007 10990 10884 11027
8/7/2007 11182 10951 11222
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8/9/2007 10938 10781 10975
8/10/2007 10945 10786 10983
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8/12/2007 10945 10786 10983
8/13/2007 10993 10782 11032
8/14/2007 10779 10587 10815
8/15/2007 10636 10443 10671
8/16/2007 10640 10477 10675
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8/18/2007 10903 10735 10941
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8/20/2007 10879 10732 10917
8/21/2007 10927 10744 10965
8/22/2007 11053 10870 11093
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8/24/2007 11201 10985 11243
8/25/2007 11201 10985 11243
8/26/2007 11201 10985 11243
8/27/2007 10894 10892 10933
8/28/2007 10731 10636 10770
8/29/2007 11006 10872 11048
8/30/2007 10910 10827 10951
8/31/2007 10979 10949 11020
9/1/2007 10979 10949 11020
9/2/2007 10979 10949 11020
9/3/2007 10979 10949 11020
9/4/2007 11141 11064 11185
9/5/2007 10999 10942 11041
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9/7/2007 10932 10804 10974
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9/12/2007 11055 10942 11099
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9/14/2007 11104 11037 11149
9/15/2007 11104 11037 11149
9/16/2007 11104 11037 11149
9/17/2007 11060 10980 11105
9/18/2007 11288 11301 11335
9/19/2007 11432 11370 11483
9/20/2007 11328 11296 11377
9/21/2007 11391 11348 11443
9/22/2007 11391 11348 11443
9/23/2007 11391 11348 11443
9/24/2007 11375 11289 11426
9/25/2007 11382 11285 11433
9/26/2007 11464 11348 11514
9/27/2007 11415 11393 11465
9/28/2007 11290 11359 11337
9/29/2007 11290 11359 11337
9/30/2007 11290 11359 11337
10/1/2007 11439 11510 11488
10/2/2007 11411 11507 11459
10/3/2007 11391 11457 11439
10/4/2007 11475 11481 11524
10/5/2007 11542 11594 11592
10/6/2007 11542 11594 11592
10/7/2007 11542 11594 11592
10/8/2007 11495 11557 11546
10/9/2007 11628 11650 11681
10/10/2007 11544 11631 11596
10/11/2007 11557 11572 11610
10/12/2007 11594 11627 11648
10/13/2007 11594 11627 11648
10/14/2007 11594 11627 11648
10/15/2007 11462 11530 11515
10/16/2007 11415 11454 11467
10/17/2007 11413 11475 11466
10/18/2007 11405 11467 11459
10/19/2007 11163 11173 11215
10/20/2007 11163 11173 11215
10/21/2007 11163 11173 11215
10/22/2007 11224 11216 11276
10/23/2007 11217 11315 11269
10/24/2007 11243 11287 11296
10/25/2007 11396 11276 11451
10/26/2007 11512 11432 11567
10/27/2007 11512 11432 11567
10/28/2007 11512 11432 11567
10/29/2007 11557 11476 11615
10/30/2007 11503 11402 11559
10/31/2007 11641 11539 11701
11/1/2007 11389 11237 11445
11/2/2007 11462 11247 11519
11/3/2007 11462 11247 11519
11/4/2007 11462 11247 11519
11/5/2007 11527 11192 11585
11/6/2007 11572 11327 11630
11/7/2007 11273 11000 11328
11/8/2007 11458 10994 11515
11/9/2007 11357 10837 11416
11/10/2007 11357 10837 11416
11/11/2007 11357 10837 11416
11/12/2007 11224 10729 11282
11/13/2007 11355 11045 11415
11/14/2007 11314 10970 11373
11/15/2007 11305 10825 11365
11/16/2007 11357 10882 11419
11/17/2007 11357 10882 11419
11/18/2007 11357 10882 11419
11/19/2007 11310 10692 11372
11/20/2007 11415 10741 11477
11/21/2007 11295 10571 11356
11/22/2007 11295 10571 11356
11/23/2007 11357 10750 11420
11/24/2007 11357 10750 11420
11/25/2007 11357 10750 11420
11/26/2007 11234 10500 11296
11/27/2007 11305 10658 11367
11/28/2007 11484 10966 11549
11/29/2007 11475 10972 11540
11/30/2007 11544 11057 11609
12/1/2007 11544 11057 11609
12/2/2007 11544 11057 11609
12/3/2007 11598 10992 11666
12/4/2007 11645 10920 11714
12/5/2007 11817 11092 11888
12/6/2007 11839 11260 11911
12/7/2007 11852 11240 11925
12/8/2007 11852 11240 11925
12/9/2007 11852 11240 11925
12/10/2007 11884 11325 11958
12/11/2007 11654 11039 11724
12/12/2007 11701 11107 11771
12/13/2007 11768 11121 11840
12/14/2007 11585 10969 11655
12/15/2007 11585 10969 11655
12/16/2007 11585 10969 11655
12/17/2007 11430 10804 11497
12/18/2007 11559 10872 11628
12/19/2007 11516 10857 11585
12/20/2007 11534 10914 11603
12/21/2007 11666 11097 11739
12/22/2007 11666 11097 11739
12/23/2007 11666 11097 11739
12/24/2007 11696 11187 11769
12/25/2007 11696 11187 11769
12/26/2007 11657 11196 11730
12/27/2007 11558 11040 11628
12/28/2007 11605 11056 11677
12/29/2007 11605 11056 11677
12/30/2007 11605 11056 11677
12/31/2007 11515 10980 11585
1/1/2008 11515 10980 11585
1/2/2008 11372 10824 11439
1/3/2008 11364 10824 11431
1/4/2008 11285 10558 11351
1/5/2008 11285 10558 11351
1/6/2008 11285 10558 11351
1/7/2008 11505 10592 11577
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1/14/2008 11402 10598 11474
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1/18/2008 10503 9918 10553
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1/31/2008 10620 10322 10673
2/1/2008 10765 10448 10821
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2/17/2008 10588 10121 10643
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2/29/2008 10019 9986 10058
3/1/2008 10019 9986 10058
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3/4/2008 10170 9957 10214
3/5/2008 10181 10015 10227
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3/18/2008 10068 10000 10113
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3/21/2008 9967 9991 10010
3/22/2008 9967 9991 10010
3/23/2008 9967 9991 10010
3/24/2008 10022 10144 10065
3/25/2008 10007 10167 10052
3/26/2008 10014 10079 10060
3/27/2008 10030 9965 10076
3/28/2008 9941 9887 9985
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3/31/2008 10045 9943 10092
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5/6/2008 10796 10677 10854
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5/12/2008 10872 10573 10932
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6/19/2008 11010 10143 11083
6/20/2008 10801 9955 10873
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6/24/2008 10894 9927 10968
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6/26/2008 10723 9695 10794
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6/30/2008 10866 9672 10939
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7/24/2008 10259 9475 10329
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8/1/2008 10080 9537 10148
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8/4/2008 9988 9452 10053
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8/11/2008 10464 9887 10537
8/12/2008 10298 9768 10368
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8/15/2008 10344 9838 10414
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8/17/2008 10344 9838 10414
8/18/2008 10311 9690 10383
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10/1/2008 9290 8824 9358
10/2/2008 9067 8469 9137
10/3/2008 8994 8355 9064
10/4/2008 8994 8355 9064
10/5/2008 8994 8355 9064
10/6/2008 8505 8034 8573
10/7/2008 8116 7573 8185
10/8/2008 7987 7491 8052
10/9/2008 7463 6920 7521
10/10/2008 7167 6840 7215
10/11/2008 7167 6840 7215
10/12/2008 7167 6840 7215
10/13/2008 8112 7632 8169
10/14/2008 8031 7591 8091
10/15/2008 7378 6906 7432
10/16/2008 7639 7200 7698
10/17/2008 7685 7155 7742
10/18/2008 7685 7155 7742
10/19/2008 7685 7155 7742
10/20/2008 8315 7496 8378
10/21/2008 8027 7265 8087
10/22/2008 7496 6824 7556
10/23/2008 7743 6910 7807
10/24/2008 7453 6672 7516
10/25/2008 7453 6672 7516
10/26/2008 7453 6672 7516
10/27/2008 7225 6460 7287
10/28/2008 7946 7157 8016
10/29/2008 7707 7078 7770
10/30/2008 7977 7262 8043
10/31/2008 7960 7374 8021
</Table>
TOTAL RETURNS FOR THE PERIOD ENDED OCTOBER 31, 2008
- --------------------------------------------------------------------------------
<Table>
<Caption>
SINCE INCEPTION
ONE YEAR (11/01/06)
-------- ---------------
RYDEX S&P EQUAL WEIGHT UTILITIES ETF.............................. -31.63% -10.79%
S&P 500 EQUAL WEIGHT UTILITIES TOTAL RETURN INDEX................. -31.45% -10.45%
S&P 500 TOTAL RETURN INDEX........................................ -36.10% -14.15%
</Table>
The returns presented above do not reflect the effect of taxes. Index returns
represent total returns. Past performance is no guarantee of future results.
33 ANNUAL REPORT
Rydex S&P Equal Weight Utilities ETF
PORTFOLIO SUMMARY (Unaudited) As of October 31, 2008
- --------------------------------------------------------------------------------
TOP 10 HOLDINGS*
- --------------------------------------------------------------------------------
<Table>
<Caption>
DESCRIPTION % OF NET ASSETS
- ------------------------------------------------------------------------------------
CONSTELLATION ENERGY GROUP, INC. 2.96%
DYNEGY, INC. -- CLASS A 2.94%
NICOR, INC. 2.82%
CONSOLIDATED EDISON, INC. 2.80%
INTEGRYS ENERGY GROUP, INC. 2.74%
AT&T, INC. 2.73%
PEPCO HOLDINGS, INC. 2.72%
PPL CORP. 2.71%
AMERICAN ELECTRIC POWER CO., INC. 2.70%
VERIZON COMMUNICATIONS, INC. 2.70%
- ------------------------------------------------------------------------------------
</Table>
INDUSTRY ALLOCATIONS*
(PIE CHART)
<Table>
Electric Utilities 33.94
Multi-Utilities 33.37
Diversified Telecommunication Services 15.66
Independent Power Producers & Energy
Traders 7.89
Gas Utilities 5.19
Wireless Telecommunication Services 3.95
</Table>
* The Fund's Top Ten Holdings are expressed as a percentage of net assets and
the Industry Allocations are expressed as a percentage of the Fund's
investments market value. These percentages may change over time.
34
RYDEX S&P 500 PURE VALUE ETF
SCHEDULE OF INVESTMENTS October 31, 2008
- --------------------------------------------------------------------------------
<Table>
<Caption>
MARKET
SHARES VALUE
- -------------------------------------------------------
COMMON STOCKS 99.3%
AEROSPACE & DEFENSE 0.3%
Northrop Grumman Corp. ....... 1,250 $58,613
-----------
TOTAL AEROSPACE & DEFENSE 58,613
-----------
AUTOMOBILES 0.5%
Ford Motor Co.*............... 39,610 86,746
-----------
TOTAL AUTOMOBILES 86,746
-----------
BUILDING PRODUCTS 0.7%
Masco Corp. .................. 12,210 123,932
-----------
TOTAL BUILDING PRODUCTS 123,932
-----------
CAPITAL MARKETS 2.5%
American Capital, Ltd. ....... 7,590 106,640
E*TRADE Financial Corp.*...... 112,400 204,568
Merrill Lynch & Co., Inc. .... 2,958 54,989
Morgan Stanley................ 4,340 75,820
-----------
TOTAL CAPITAL MARKETS 442,017
-----------
CHEMICALS 1.7%
Ashland, Inc. ................ 7,120 160,841
Dow Chemical Co.(The)......... 5,220 139,217
-----------
TOTAL CHEMICALS 300,058
-----------
COMMERCIAL BANKS 13.5%
BB&T Corp. ................... 7,488 268,445
Comerica, Inc. ............... 6,830 188,440
Fifth Third Bancorp........... 8,450 91,683
First Horizon National
Corp. ..................... 21,960 261,544
Huntington Bancshares, Inc. .. 22,330 211,018
KeyCorp....................... 14,040 171,709
M&T Bank Corp. ............... 1,474 119,541
Marshall & Ilsley Corp. ...... 9,080 163,712
National City Corp. .......... 27,080 73,116
PNC Financial Services Group,
Inc. ...................... 1,530 102,005
Regions Financial Corp. ...... 14,400 159,696
SunTrust Banks, Inc. ......... 3,260 130,856
U.S. Bancorp.................. 4,558 135,874
Wachovia Corp. ............... 8,590 55,062
Wells Fargo & Co. ............ 4,284 145,870
Zions Bancorp................. 4,170 158,919
-----------
TOTAL COMMERCIAL BANKS 2,437,490
-----------
COMMERCIAL SERVICES & SUPPLIES 1.6%
Allied Waste Industries,
Inc.*...................... 14,440 150,465
Avery Dennison Corp. ......... 1,980 69,339
R.R. Donnelley & Sons Co. .... 4,040 66,943
-----------
TOTAL COMMERCIAL SERVICES & SUPPLIES 286,747
-----------
CONSUMER FINANCE 0.7%
Capital One Financial Corp. .. 3,044 119,081
-----------
TOTAL CONSUMER FINANCE 119,081
-----------
CONTAINERS & PACKAGING 0.9%
Bemis Co., Inc. .............. 6,920 171,893
-----------
TOTAL CONTAINERS & PACKAGING 171,893
-----------
DIVERSIFIED FINANCIAL SERVICES 3.3%
Bank of America Corp. ........ 6,570 158,797
CIT Group, Inc. .............. 22,349 92,525
Citigroup, Inc. .............. 10,510 143,461
JPMorgan Chase & Co. ......... 4,640 191,400
-----------
TOTAL DIVERSIFIED FINANCIAL SERVICES 586,183
-----------
DIVERSIFIED TELECOMMUNICATION SERVICES 3.1%
AT&T, Inc. ................... 3,130 83,790
Embarq Corp. ................. 4,300 129,000
Frontier Communications
Corp. ..................... 16,020 121,912
Verizon Communications,
Inc. ...................... 4,570 135,592
Windstream Corp. ............. 11,850 88,994
-----------
TOTAL DIVERSIFIED TELECOMMUNICATION
SERVICES 559,288
-----------
ELECTRIC UTILITIES 6.8%
American Electric Power Co.,
Inc. ...................... 3,310 108,005
Duke Energy Corp. ............ 16,250 266,175
Pepco Holdings, Inc. ......... 9,870 203,816
Pinnacle West Capital Corp. .. 7,970 252,250
Progress Energy, Inc. ........ 6,510 256,299
Southern Co. ................. 4,080 140,107
-----------
TOTAL ELECTRIC UTILITIES 1,226,652
-----------
ELECTRONIC EQUIPMENT & INSTRUMENTS 1.1%
Jabil Circuit, Inc. .......... 22,600 190,066
-----------
TOTAL ELECTRONIC EQUIPMENT & INSTRUMENTS 190,066
-----------
FOOD & STAPLES RETAILING 2.1%
Kroger Co.(The)............... 5,830 160,092
Safeway, Inc. ................ 3,390 72,105
SUPERVALU, Inc. .............. 10,260 146,102
-----------
TOTAL FOOD & STAPLES RETAILING 378,299
-----------
FOOD PRODUCTS 2.3%
Dean Foods Co.*............... 6,800 148,648
Tyson Foods, Inc. -- Class A.. 29,430 257,218
-----------
TOTAL FOOD PRODUCTS 405,866
-----------
GAS UTILITIES 1.7%
Nicor, Inc. .................. 6,530 301,751
-----------
TOTAL GAS UTILITIES 301,751
-----------
HEALTH CARE EQUIPMENT & SUPPLIES 0.7%
Covidien, Ltd. ............... 3,060 135,527
-----------
TOTAL HEALTH CARE EQUIPMENT & SUPPLIES 135,527
-----------
HEALTH CARE PROVIDERS & SERVICES 3.5%
AmerisourceBergen Corp. ...... 9,090 284,244
Cardinal Health, Inc. ........ 2,820 107,724
McKesson Corp. ............... 3,050 112,210
Tenet Healthcare Corp.*....... 30,490 133,546
-----------
TOTAL HEALTH CARE PROVIDERS & SERVICES 637,724
-----------
HOTELS, RESTAURANTS & LEISURE 0.3%
Carnival Corp. ............... 2,370 60,198
-----------
TOTAL HOTELS, RESTAURANTS & LEISURE 60,198
-----------
HOUSEHOLD DURABLES 10.4%
Centex Corp. ................. 16,550 202,738
D.R. Horton, Inc. ............ 52,550 387,819
KB HOME....................... 33,900 565,791
Leggett & Platt, Inc. ........ 14,620 253,803
</Table>
35 ANNUAL REPORT
See Notes to Financial Statements.
RYDEX S&P 500 PURE VALUE ETF
SCHEDULE OF INVESTMENTS (concluded) October 31, 2008
- --------------------------------------------------------------------------------
<Table>
<Caption>
MARKET
SHARES VALUE
- -------------------------------------------------------
COMMON STOCKS (CONCLUDED)
Lennar Corp. -- Class A....... 39,400 $304,956
Whirlpool Corp. .............. 3,500 163,275
-----------
TOTAL HOUSEHOLD DURABLES 1,878,382
-----------
INDUSTRIAL CONGLOMERATES 0.7%
Tyco International, Ltd. ..... 5,010 126,653
-----------
TOTAL INDUSTRIAL CONGLOMERATES 126,653
-----------
INSURANCE 6.2%
Allstate Corp. ............... 5,475 144,485
Chubb Corp. .................. 1,930 100,013
Cincinnati Financial Corp. ... 5,430 141,126
Genworth Financial,
Inc. -- Class A............ 7,811 37,805
Hartford Financial Services
Group, Inc. ............... 1,740 17,957
Lincoln National Corp. ....... 2,708 46,686
Marsh & McLennan Cos., Inc. .. 7,245 212,423
MBIA, Inc. ................... 18,582 182,661
Travelers Cos., Inc.(The)..... 4,239 180,369
XL Capital, Ltd. -- Class A... 5,840 56,648
-----------
TOTAL INSURANCE 1,120,173
-----------
LEISURE EQUIPMENT & PRODUCTS 0.9%
Eastman Kodak Co. ............ 8,240 75,643
Mattel, Inc. ................. 5,390 80,958
-----------
TOTAL LEISURE EQUIPMENT & PRODUCTS 156,601
-----------
MEDIA 2.7%
CBS Corp. -- Class B.......... 10,450 101,469
Gannett Co., Inc. ............ 9,750 107,250
New York Times Co. -- Class
A.......................... 18,380 183,800
Time Warner, Inc. ............ 8,550 86,270
-----------
TOTAL MEDIA 478,789
-----------
MULTI-UTILITIES 12.7%
Ameren Corp. ................. 4,360 141,482
CenterPoint Energy, Inc. ..... 10,990 126,605
CMS Energy Corp. ............. 9,020 92,455
Consolidated Edison, Inc. .... 6,210 269,017
Dominion Resources, Inc. ..... 2,540 92,151
DTE Energy Co. ............... 8,420 297,226
Integrys Energy Group, Inc. .. 9,420 449,052
NiSource, Inc. ............... 24,740 320,630
PG&E Corp. ................... 3,400 124,678
TECO Energy, Inc. ............ 16,290 187,987
Xcel Energy, Inc. ............ 10,550 183,781
-----------
TOTAL MULTI-UTILITIES 2,285,064
-----------
MULTILINE RETAIL 2.0%
Big Lots, Inc.*............... 6,440 157,329
J.C. Penney Co., Inc. ........ 3,310 79,175
Macy's, Inc. ................. 9,710 119,336
-----------
TOTAL MULTILINE RETAIL 355,840
-----------
OIL, GAS & CONSUMABLE FUELS 2.6%
Spectra Energy Corp. ......... 23,820 460,441
-----------
TOTAL OIL, GAS & CONSUMABLE FUELS 460,441
-----------
PAPER & FOREST PRODUCTS 2.0%
International Paper Co. ...... 8,860 152,569
MeadWestvaco Corp. ........... 4,290 60,189
Weyerhaeuser Co. ............. 4,030 154,026
-----------
TOTAL PAPER & FOREST PRODUCTS 366,784
-----------
PHARMACEUTICALS 0.6%
Pfizer, Inc. ................. 6,570 116,355
-----------
TOTAL PHARMACEUTICALS 116,355
-----------
REAL ESTATE INVESTMENT TRUSTS (REITS) 3.3%
Apartment Investment &
Management Co. -- Class A.. 6,770 99,045
Developers Diversified Realty
Corp. ..................... 4,107 54,089
Equity Residential............ 5,365 187,399
General Growth Properties,
Inc. ...................... 2,856 11,824
HCP, Inc. .................... 5,049 151,117
Host Hotels & Resorts, Inc. .. 8,653 89,472
-----------
TOTAL REAL ESTATE INVESTMENT TRUSTS
(REITS) 592,946
-----------
ROAD & RAIL 1.6%
Ryder System, Inc. ........... 7,190 284,868
-----------
TOTAL ROAD & RAIL 284,868
-----------
SEMICONDUCTORS & SEMICONDUCTOR EQUIPMENT 0.8%
Micron Technology, Inc.*...... 29,940 141,017
-----------
TOTAL SEMICONDUCTORS & SEMICONDUCTOR
EQUIPMENT 141,017
-----------
SPECIALTY RETAIL 2.0%
AutoNation, Inc.*............. 29,260 201,016
Limited Brands, Inc. ......... 8,560 102,549
Office Depot, Inc.*........... 14,610 52,596
-----------
TOTAL SPECIALTY RETAIL 356,161
-----------
TEXTILES, APPAREL & LUXURY GOODS 2.2%
Jones Apparel Group, Inc. .... 30,810 342,299
Liz Claiborne, Inc. .......... 7,010 57,132
-----------
TOTAL TEXTILES, APPAREL & LUXURY GOODS 399,431
-----------
THRIFTS & MORTGAGE FINANCE 0.4%
Sovereign Bancorp, Inc. ...... 26,030 75,487
-----------
TOTAL THRIFTS & MORTGAGE FINANCE 75,487
-----------
TOBACCO 0.6%
Reynolds American, Inc. ...... 2,050 100,368
-----------
TOTAL TOBACCO 100,368
-----------
WIRELESS TELECOMMUNICATION SERVICES 0.3%
Sprint Nextel Corp. .......... 19,550 61,192
-----------
TOTAL WIRELESS TELECOMMUNICATION SERVICES 61,192
-----------
TOTAL COMMON STOCKS
(Cost $30,514,205) 17,864,683
-----------
SHORT TERM INVESTMENTS 0.4%
SSgA Government Money Market
Fund....................... 83,021 83,021
-----------
TOTAL SHORT TERM INVESTMENTS
(Cost $83,021) 83,021
-----------
TOTAL INVESTMENTS 99.7%
(Cost $30,597,226) 17,947,704
-----------
OTHER ASSETS IN EXCESS OF
LIABILITIES--0.3% 45,876
-----------
NET ASSETS--100.0% $17,993,580
- -------------------------------------------------------
</Table>
*Non-Income Producing Security.
36
See Notes to Financial Statements.
RYDEX S&P 500 PURE GROWTH ETF
SCHEDULE OF INVESTMENTS October 31, 2008
- --------------------------------------------------------------------------------
<Table>
<Caption>
MARKET
SHARES VALUE
- ------------------------------------------------------
COMMON STOCKS 99.8%
AEROSPACE & DEFENSE 2.3%
General Dynamics Corp. ....... 1,900 $114,608
L-3 Communications Holdings,
Inc. ...................... 1,916 155,522
Lockheed Martin Corp. ........ 1,925 163,721
Rockwell Collins, Inc. ....... 3,157 117,535
-----------
TOTAL AEROSPACE & DEFENSE 551,386
-----------
AIR FREIGHT & LOGISTICS 1.4%
C.H. Robinson Worldwide,
Inc. ...................... 3,405 176,311
Expeditors International of
Washington, Inc. .......... 5,440 177,616
-----------
TOTAL AIR FREIGHT & LOGISTICS 353,927
-----------
AUTO COMPONENTS 0.4%
Goodyear Tire & Rubber
Co.(The)*.................. 11,560 103,115
-----------
TOTAL AUTO COMPONENTS 103,115
-----------
AUTOMOBILES 0.6%
Harley-Davidson, Inc. ........ 6,188 151,482
-----------
TOTAL AUTOMOBILES 151,482
-----------
BEVERAGES 2.2%
Anheuser-Busch Cos., Inc. .... 4,463 276,840
Pepsi Bottling Group, Inc. ... 5,724 132,339
PepsiCo, Inc. ................ 2,215 126,277
-----------
TOTAL BEVERAGES 535,456
-----------
BIOTECHNOLOGY 4.6%
Amgen, Inc.*.................. 5,288 316,698
Biogen Idec, Inc.*............ 3,883 165,222
Celgene Corp.*................ 3,773 242,453
Genzyme Corp.*................ 1,874 136,577
Gilead Sciences, Inc.*........ 5,747 263,500
-----------
TOTAL BIOTECHNOLOGY 1,124,450
-----------
CAPITAL MARKETS 0.9%
Federated Investors,
Inc. -- Class B............ 5,788 140,070
Franklin Resources, Inc. ..... 1,331 90,508
-----------
TOTAL CAPITAL MARKETS 230,578
-----------
CHEMICALS 1.4%
CF Industries Holdings,
Inc. ...................... 1,474 94,616
Ecolab, Inc. ................. 3,347 124,709
Sigma-Aldrich Corp. .......... 2,989 131,098
-----------
TOTAL CHEMICALS 350,423
-----------
COMMERCIAL SERVICES & SUPPLIES 1.0%
Equifax, Inc. ................ 4,147 108,154
Pitney Bowes, Inc. ........... 5,046 125,040
-----------
TOTAL COMMERCIAL SERVICES & SUPPLIES 233,194
-----------
COMMUNICATIONS EQUIPMENT 2.4%
Cisco Systems, Inc.*.......... 8,677 154,190
Harris Corp. ................. 2,963 106,520
Motorola, Inc. ............... 15,765 84,658
QUALCOMM, Inc. ............... 6,004 229,713
-----------
TOTAL COMMUNICATIONS EQUIPMENT 575,081
-----------
COMPUTERS & PERIPHERALS 3.4%
Apple, Inc.*.................. 1,700 182,903
Dell, Inc.*................... 12,767 155,119
Lexmark International,
Inc. -- Class A*........... 7,288 188,249
NetApp, Inc.*................. 7,740 104,722
QLogic Corp.*................. 10,403 125,044
SanDisk Corp.*................ 8,119 72,178
-----------
TOTAL COMPUTERS & PERIPHERALS 828,215
-----------
CONSTRUCTION & ENGINEERING 0.2%
Jacobs Engineering Group,
Inc.*...................... 1,158 42,186
-----------
TOTAL CONSTRUCTION & ENGINEERING 42,186
-----------
CONSUMER FINANCE 1.0%
American Express Co. ......... 2,847 78,292
SLM Corp.*.................... 15,307 163,326
-----------
TOTAL CONSUMER FINANCE 241,618
-----------
CONTAINERS & PACKAGING 1.4%
Ball Corp. ................... 6,672 228,182
Pactiv Corp.*................. 5,046 118,884
-----------
TOTAL CONTAINERS & PACKAGING 347,066
-----------
DIVERSIFIED CONSUMER SERVICES 2.6%
Apollo Group, Inc. -- Class
A*......................... 5,440 378,134
H&R Block, Inc. .............. 12,534 247,171
-----------
TOTAL DIVERSIFIED CONSUMER SERVICES 625,305
-----------
DIVERSIFIED FINANCIAL SERVICES 3.2%
CME Group, Inc. .............. 448 126,403
IntercontinentalExchange,
Inc.*...................... 2,289 195,847
Leucadia National Corp. ...... 5,462 146,600
Moody's Corp. ................ 10,345 264,832
NYSE Euronext................. 1,432 43,218
-----------
TOTAL DIVERSIFIED FINANCIAL SERVICES 776,900
-----------
ELECTRICAL EQUIPMENT 0.2%
Rockwell Automation, Inc. .... 2,083 57,637
-----------
TOTAL ELECTRICAL EQUIPMENT 57,637
-----------
ELECTRONIC EQUIPMENT & INSTRUMENTS 0.6%
Amphenol Corp. -- Class A..... 4,827 138,294
-----------
TOTAL ELECTRONIC EQUIPMENT & INSTRUMENTS 138,294
-----------
ENERGY EQUIPMENT & SERVICES 2.9%
Baker Hughes, Inc. ........... 1,531 53,508
BJ Services Co. .............. 8,493 109,135
Cameron International Corp.*.. 2,305 55,919
Halliburton Co. .............. 5,730 113,397
Schlumberger, Ltd. ........... 2,847 147,048
Smith International, Inc. .... 2,357 81,269
Transocean, Inc.*............. 1,657 136,421
-----------
TOTAL ENERGY EQUIPMENT & SERVICES 696,697
-----------
FOOD PRODUCTS 2.6%
Campbell Soup Co. ............ 5,630 213,658
Hershey Co.(The).............. 5,698 212,194
Kellogg Co. .................. 4,189 211,209
-----------
TOTAL FOOD PRODUCTS 637,061
-----------
GAS UTILITIES 0.4%
Questar Corp. ................ 2,999 103,346
-----------
TOTAL GAS UTILITIES 103,346
-----------
</Table>
37 ANNUAL REPORT
See Notes to Financial Statements.
RYDEX S&P 500 PURE GROWTH ETF
SCHEDULE OF INVESTMENTS (continued) October 31, 2008
- --------------------------------------------------------------------------------
<Table>
<Caption>
MARKET
SHARES VALUE
- ------------------------------------------------------
COMMON STOCKS (CONTINUED)
HEALTH CARE EQUIPMENT & SUPPLIES 7.2%
Becton, Dickinson & Co. ...... 1,706 $118,396
C.R. Bard, Inc. .............. 1,642 144,906
Hospira, Inc.*................ 4,741 131,895
Intuitive Surgical, Inc.*..... 1,400 241,906
Medtronic, Inc. .............. 4,557 183,784
St Jude Medical, Inc.*........ 5,972 227,115
Stryker Corp. ................ 3,089 165,138
Varian Medical Systems,
Inc.*...................... 6,214 282,799
Zimmer Holdings, Inc.*........ 5,478 254,344
-----------
TOTAL HEALTH CARE EQUIPMENT & SUPPLIES 1,750,283
-----------
HEALTH CARE PROVIDERS & SERVICES 5.4%
Coventry Health Care, Inc.*... 5,340 70,435
DaVita, Inc.*................. 5,531 313,884
Express Scripts, Inc.*........ 5,040 305,474
Laboratory Corp. of America
Holdings*.................. 2,825 173,709
Patterson Cos., Inc.*......... 6,814 172,599
Quest Diagnostics, Inc. ...... 3,499 163,753
UnitedHealth Group, Inc. ..... 5,304 125,864
-----------
TOTAL HEALTH CARE PROVIDERS & SERVICES 1,325,718
-----------
HEALTH CARE TECHNOLOGY 0.7%
IMS Health, Inc. ............. 12,276 176,038
-----------
TOTAL HEALTH CARE TECHNOLOGY 176,038
-----------
HOTELS, RESTAURANTS & LEISURE 2.5%
Darden Restaurants, Inc. ..... 8,056 178,601
International Game
Technology................. 4,398 61,572
Starbucks Corp.*.............. 14,375 188,744
Yum! Brands, Inc. ............ 6,320 183,343
-----------
TOTAL HOTELS, RESTAURANTS & LEISURE 612,260
-----------
HOUSEHOLD DURABLES 1.0%
Black & Decker Corp. ......... 3,715 188,053
Harman International
Industries, Inc. .......... 3,305 60,713
-----------
TOTAL HOUSEHOLD DURABLES 248,766
-----------
HOUSEHOLD PRODUCTS 1.9%
Clorox Co. ................... 4,567 277,719
Colgate-Palmolive Co. ........ 2,857 179,306
-----------
TOTAL HOUSEHOLD PRODUCTS 457,025
-----------
INDEPENDENT POWER PRODUCERS & ENERGY TRADERS 0.5%
AES Corp.(The)*............... 9,845 78,465
Constellation Energy Group,
Inc. ...................... 2,247 54,400
-----------
TOTAL INDEPENDENT POWER PRODUCERS &
ENERGY TRADERS 132,865
-----------
INSURANCE 1.1%
Progressive Corp. ............ 18,216 259,942
-----------
TOTAL INSURANCE 259,942
-----------
INTERNET & CATALOG RETAIL 1.5%
Amazon.com, Inc.*............. 4,557 260,843
Expedia, Inc.*................ 12,134 115,394
-----------
TOTAL INTERNET & CATALOG RETAIL 376,237
-----------
INTERNET SOFTWARE & SERVICES 2.7%
Akamai Technologies, Inc.*.... 6,162 88,609
eBay, Inc.*................... 8,288 126,558
Google, Inc. -- Class A*...... 716 257,302
Yahoo!, Inc.*................. 15,365 196,979
-----------
TOTAL INTERNET SOFTWARE & SERVICES 669,448
-----------
IT SERVICES 2.9%
Cognizant Technology Solutions
Corp. -- Class A*.......... 11,209 215,213
Fiserv, Inc.*................. 4,647 155,024
Mastercard, Inc. -- Class A... 858 126,829
Total System Services, Inc. .. 8,239 113,204
Western Union Co. ............ 5,914 90,248
-----------
TOTAL IT SERVICES 700,518
-----------
LIFE SCIENCES TOOLS & SERVICES 0.7%
Waters Corp.*................. 3,673 160,877
-----------
TOTAL LIFE SCIENCES TOOLS & SERVICES 160,877
-----------
MACHINERY 2.2%
Caterpillar, Inc. ............ 3,415 130,351
Cummins, Inc. ................ 3,947 102,030
Danaher Corp. ................ 2,383 141,169
ITT Corp. .................... 2,373 105,598
Terex Corp.*.................. 2,767 46,181
-----------
TOTAL MACHINERY 525,329
-----------
MEDIA 0.8%
McGraw-Hill Cos., Inc. ....... 3,689 99,013
Omnicom Group, Inc. .......... 3,531 104,305
-----------
TOTAL MEDIA 203,318
-----------
METALS & MINING 2.4%
Freeport-McMoRan Copper &
Gold, Inc. ................ 3,341 97,223
Nucor Corp. .................. 6,014 243,627
Titanium Metals Corp. ........ 12,744 118,647
United States Steel Corp. .... 3,551 130,961
-----------
TOTAL METALS & MINING 590,458
-----------
MULTILINE RETAIL 1.7%
Kohl's Corp.*................. 4,263 149,759
Sears Holdings Corp.*......... 4,666 269,415
-----------
TOTAL MULTILINE RETAIL 419,174
-----------
OIL, GAS & CONSUMABLE FUELS 9.1%
Apache Corp. ................. 2,821 232,253
Cabot Oil & Gas Corp. ........ 2,873 80,645
Chesapeake Energy Corp. ...... 6,488 142,541
ConocoPhillips................ 3,363 174,943
CONSOL Energy, Inc. .......... 2,047 64,255
Devon Energy Corp. ........... 2,299 185,897
EOG Resources, Inc. .......... 3,283 265,661
Exxon Mobil Corp. ............ 2,499 185,226
Murphy Oil Corp. ............. 3,099 156,934
Pioneer Natural Resources
Co. ....................... 2,721 75,726
Southwestern Energy Co.*...... 3,431 122,212
Sunoco, Inc. ................. 5,936 181,048
Valero Energy Corp. .......... 4,357 89,667
XTO Energy, Inc. ............. 7,456 268,043
-----------
TOTAL OIL, GAS & CONSUMABLE FUELS 2,225,051
-----------
</Table>
38
See Notes to Financial Statements.
RYDEX S&P 500 PURE GROWTH ETF
SCHEDULE OF INVESTMENTS (concluded) October 31, 2008
- --------------------------------------------------------------------------------
<Table>
<Caption>
MARKET
SHARES VALUE
- ------------------------------------------------------
COMMON STOCKS (CONCLUDED)
PERSONAL PRODUCTS 1.3%
Avon Products, Inc. .......... 6,278 $155,883
Estee Lauder Cos.,
Inc -- Class A............. 4,215 151,908
-----------
TOTAL PERSONAL PRODUCTS 307,791
-----------
PHARMACEUTICALS 2.4%
Barr Pharmaceuticals, Inc.*... 3,699 237,698
Forest Laboratories, Inc.*.... 8,829 205,098
Johnson & Johnson............. 2,531 155,251
-----------
TOTAL PHARMACEUTICALS 598,047
-----------
REAL ESTATE MANAGEMENT & DEVELOPMENT 0.6%
CB Richard Ellis Group,
Inc. -- Class A*........... 19,906 139,541
-----------
TOTAL REAL ESTATE MANAGEMENT &
DEVELOPMENT 139,541
-----------
SEMICONDUCTORS & SEMICONDUCTOR EQUIPMENT 0.6%
MEMC Electronic Materials,
Inc.*...................... 1,721 31,632
National Semiconductor
Corp. ..................... 5,688 74,911
NVIDIA Corp.*................. 4,731 41,444
-----------
TOTAL SEMICONDUCTORS & SEMICONDUCTOR
EQUIPMENT 147,987
-----------
SOFTWARE 5.4%
Adobe Systems, Inc.*.......... 5,930 157,975
Autodesk, Inc.*............... 5,156 109,874
BMC Software, Inc.*........... 2,709 69,946
Citrix Systems, Inc.*......... 4,646 119,728
Electronic Arts, Inc.*........ 2,725 62,076
Intuit, Inc.*................. 9,319 233,534
Microsoft Corp. .............. 5,824 130,050
Oracle Corp.*................. 10,813 197,770
Salesforce.com, Inc.*......... 3,299 102,137
Symantec Corp.*............... 11,061 139,147
-----------
TOTAL SOFTWARE 1,322,237
-----------
SPECIALTY RETAIL 5.7%
Abercrombie & Fitch
Co. -- Class A............. 4,183 121,140
AutoZone, Inc.*............... 2,399 305,369
Bed Bath & Beyond, Inc.*...... 10,477 269,992
Best Buy Co., Inc. ........... 4,205 112,736
GameStop Corp. -- Class A*.... 2,725 74,638
Lowe's Cos., Inc. ............ 10,319 223,922
TJX Cos., Inc. ............... 10,235 273,888
-----------
TOTAL SPECIALTY RETAIL 1,381,685
-----------
TEXTILES, APPAREL & LUXURY GOODS 2.2%
Coach, Inc.*.................. 13,824 284,774
NIKE, Inc. -- Class B......... 2,557 147,360
Polo Ralph Lauren Corp. ...... 2,083 98,255
-----------
TOTAL TEXTILES, APPAREL & LUXURY GOODS 530,389
-----------
TOBACCO 1.1%
UST, Inc. .................... 3,847 260,019
-----------
TOTAL TOBACCO 260,019
-----------
TRADING COMPANIES & DISTRIBUTORS 0.5%
Fastenal Co. ................. 2,979 119,935
-----------
TOTAL TRADING COMPANIES & DISTRIBUTORS 119,935
-----------
TOTAL COMMON STOCKS
(Cost $38,840,061) 24,344,355
-----------
SHORT TERM INVESTMENTS 0.2%
SSgA Government Money Market
Fund....................... 42,242 42,242
-----------
TOTAL SHORT TERM INVESTMENTS
(Cost $42,242) 42,242
-----------
TOTAL INVESTMENTS 100.0%
(Cost $38,882,303) 24,386,597
-----------
OTHER ASSETS IN EXCESS OF
LIABILITIES--0.0%(A) 11,189
-----------
NET ASSETS--100.0% $24,397,786
- ------------------------------------------------------
</Table>
* Non-Income Producing Security.
(a) Amount represents less than 0.05% of net assets.
39 ANNUAL REPORT
See Notes to Financial Statements.
RYDEX S&P MIDCAP 400 PURE VALUE ETF
SCHEDULE OF INVESTMENTS October 31, 2008
- --------------------------------------------------------------------------------
<Table>
<Caption>
MARKET
SHARES VALUE
- ------------------------------------------------------
COMMON STOCKS 99.7%
AIRLINES 2.4%
Alaska Air Group, Inc.*....... 6,959 $171,887
JetBlue Airways Corp.*........ 12,618 70,030
-----------
TOTAL AIRLINES 241,917
-----------
AUTO COMPONENTS 3.2%
ArvinMeritor, Inc. ........... 36,215 214,393
Lear Corp.*................... 6,059 12,179
Modine Manufacturing Co. ..... 12,768 94,483
-----------
TOTAL AUTO COMPONENTS 321,055
-----------
CAPITAL MARKETS 0.4%
Apollo Investment Corp. ...... 3,126 41,204
-----------
TOTAL CAPITAL MARKETS 41,204
-----------
CHEMICALS 5.6%
Cabot Corp. .................. 1,740 46,023
Chemtura Corp. ............... 23,937 41,411
Ferro Corp. .................. 5,949 92,090
Lubrizol Corp. ............... 960 36,077
Olin Corp. ................... 7,099 128,918
RPM International, Inc. ...... 6,599 93,706
Sensient Technologies Corp. .. 1,990 50,208
Valspar Corp. ................ 4,080 83,436
-----------
TOTAL CHEMICALS 571,869
-----------
COMMERCIAL BANKS 6.0%
Associated Banc-Corp. ........ 4,210 92,873
Bancorpsouth, Inc. ........... 1,870 45,385
Colonial BancGroup, Inc. ..... 11,698 47,494
FirstMerit Corp. ............. 5,289 123,339
PacWest Bancorp............... 1,880 46,981
TCF Financial Corp. .......... 6,729 119,372
Webster Financial Corp. ...... 4,240 78,610
Wilmington Trust Corp. ....... 1,700 49,062
-----------
TOTAL COMMERCIAL BANKS 603,116
-----------
COMMERCIAL SERVICES & SUPPLIES 2.9%
Kelly Services, Inc. -- Class
A.......................... 16,718 238,065
Manpower, Inc. ............... 1,840 57,279
-----------
TOTAL COMMERCIAL SERVICES & SUPPLIES 295,344
-----------
COMPUTERS & PERIPHERALS 3.1%
Diebold, Inc. ................ 2,100 62,412
Imation Corp. ................ 12,108 149,171
Palm, Inc.*................... 25,556 101,968
-----------
TOTAL COMPUTERS & PERIPHERALS 313,551
-----------
CONSUMER FINANCE 0.9%
AmeriCredit Corp.*............ 15,718 92,107
-----------
TOTAL CONSUMER FINANCE 92,107
-----------
CONTAINERS & PACKAGING 0.6%
Sonoco Products Co. .......... 2,580 64,964
-----------
TOTAL CONTAINERS & PACKAGING 64,964
-----------
DIVERSIFIED CONSUMER SERVICES 0.4%
Regis Corp. .................. 3,080 38,100
-----------
TOTAL DIVERSIFIED CONSUMER SERVICES 38,100
-----------
ELECTRIC UTILITIES 5.0%
Great Plains Energy, Inc. .... 6,009 116,815
Hawaiian Electric Industries,
Inc. ...................... 6,879 183,119
IDACORP, Inc. ................ 2,830 75,448
Sierra Pacific Resources...... 3,500 29,015
Westar Energy, Inc. .......... 5,139 100,159
-----------
TOTAL ELECTRIC UTILITIES 504,556
-----------
ELECTRONIC EQUIPMENT & INSTRUMENTS 2.8%
Arrow Electronics, Inc.*...... 2,010 35,075
Ingram Micro, Inc. -- Class
A*......................... 9,849 131,287
Tech Data Corp.*.............. 3,600 77,220
Vishay Intertechnology,
Inc.*...................... 9,669 41,673
-----------
TOTAL ELECTRONIC EQUIPMENT & INSTRUMENTS 285,255
-----------
FOOD & STAPLES RETAILING 0.4%
Ruddick Corp. ................ 1,520 43,533
-----------
TOTAL FOOD & STAPLES RETAILING 43,533
-----------
FOOD PRODUCTS 0.9%
J.M. Smucker Co.(The)......... 1,250 55,700
Smithfield Foods, Inc.*....... 3,600 37,872
-----------
TOTAL FOOD PRODUCTS 93,572
-----------
GAS UTILITIES 4.5%
AGL Resources, Inc. .......... 3,760 114,304
Oneok, Inc. .................. 3,220 102,718
UGI Corp. .................... 3,529 84,237
WGL Holdings, Inc. ........... 4,729 152,227
-----------
TOTAL GAS UTILITIES 453,486
-----------
HEALTH CARE EQUIPMENT & SUPPLIES 0.5%
Teleflex, Inc. ............... 940 49,811
-----------
TOTAL HEALTH CARE EQUIPMENT & SUPPLIES 49,811
-----------
HEALTH CARE PROVIDERS & SERVICES 3.4%
Health Management Associates,
Inc. -- Class A*........... 37,665 79,096
Kindred Healthcare, Inc.*..... 7,559 109,530
Omnicare, Inc. ............... 5,479 151,056
-----------
TOTAL HEALTH CARE PROVIDERS & SERVICES 339,682
-----------
HOTELS, RESTAURANTS & LEISURE 0.8%
Bob Evans Farms, Inc. ........ 3,340 69,739
Boyd Gaming Corp. ............ 1,590 10,812
-----------
TOTAL HOTELS, RESTAURANTS & LEISURE 80,551
-----------
HOUSEHOLD DURABLES 4.1%
Furniture Brands
International, Inc. ....... 37,135 211,298
Ryland Group, Inc. ........... 10,909 204,980
-----------
TOTAL HOUSEHOLD DURABLES 416,278
-----------
INDEPENDENT POWER PRODUCERS & ENERGY TRADERS 0.6%
Black Hills Corp. ............ 2,260 57,065
-----------
TOTAL INDEPENDENT POWER PRODUCERS &
ENERGY TRADERS 57,065
-----------
INSURANCE 10.1%
American Financial Group,
Inc. ...................... 4,120 93,648
Arthur J. Gallagher & Co. .... 3,120 76,003
Everest Re Group, Ltd. ....... 750 56,025
Fidelity National Financial,
Inc. -- Class A............ 22,487 202,608
First American Corp. ......... 7,259 148,156
</Table>
40
See Notes to Financial Statements.
RYDEX S&P MIDCAP 400 PURE VALUE ETF
SCHEDULE OF INVESTMENTS (concluded) October 31, 2008
- --------------------------------------------------------------------------------
<Table>
<Caption>
MARKET
SHARES VALUE
- ------------------------------------------------------
COMMON STOCKS (CONCLUDED)
Hanover Insurance Group,
Inc. ...................... 1,830 $71,827
Horace Mann Educators Corp. .. 4,150 33,034
Mercury General Corp. ........ 2,480 127,398
Old Republic International
Corp. ..................... 14,078 129,658
Protective Life Corp. ........ 3,560 29,726
Unitrin, Inc. ................ 2,860 60,060
-----------
TOTAL INSURANCE 1,028,143
-----------
IT SERVICES 2.1%
Acxiom Corp. ................. 11,128 87,466
SAIC, Inc.*................... 6,709 123,915
-----------
TOTAL IT SERVICES 211,381
-----------
MACHINERY 2.4%
Federal Signal Corp. ......... 16,228 138,100
Timken Co. ................... 2,760 43,829
Trinity Industries, Inc. ..... 3,810 64,313
-----------
TOTAL MACHINERY 246,242
-----------
MEDIA 1.7%
Belo Corp. -- Class A......... 10,389 22,129
Media General, Inc. -- Class
A.......................... 13,788 105,202
Scholastic Corp. ............. 2,410 44,754
-----------
TOTAL MEDIA 172,085
-----------
METALS & MINING 0.7%
Worthington Industries,
Inc. ...................... 6,069 73,253
-----------
TOTAL METALS & MINING 73,253
-----------
MULTI-UTILITIES 6.5%
Alliant Energy Corp. ......... 2,500 73,450
NSTAR......................... 2,670 88,243
OGE Energy Corp. ............. 2,950 80,535
PNM Resources, Inc. .......... 9,619 93,785
Puget Energy, Inc. ........... 3,630 85,051
SCANA Corp. .................. 2,960 97,414
Vectren Corp. ................ 5,389 135,803
-----------
TOTAL MULTI-UTILITIES 654,281
-----------
MULTILINE RETAIL 0.9%
99 Cents Only Stores*......... 7,259 88,560
-----------
TOTAL MULTILINE RETAIL 88,560
-----------
PAPER & FOREST PRODUCTS 0.5%
Louisiana-Pacific Corp. ...... 11,249 53,995
-----------
TOTAL PAPER & FOREST PRODUCTS 53,995
-----------
REAL ESTATE INVESTMENT TRUSTS (REITS) 10.3%
BRE Properties, Inc. ......... 1,380 48,038
Camden Property Trust......... 2,100 70,791
Cousins Properties, Inc. ..... 3,600 52,128
Duke Realty Corp. ............ 4,260 60,109
Equity One, Inc. ............. 3,400 59,398
Health Care REIT, Inc. ....... 2,160 96,142
Highwoods Properties, Inc. ... 5,059 125,564
Hospitality Properties Trust.. 4,929 50,029
Liberty Property Trust........ 4,420 105,417
Mack-Cali Realty Corp. ....... 4,349 98,809
Nationwide Health Properties,
Inc. ...................... 2,960 88,326
Realty Income Corp. .......... 2,580 59,650
UDR, Inc. .................... 3,910 77,262
Weingarten Realty Investors... 2,490 50,920
-----------
TOTAL REAL ESTATE INVESTMENT TRUSTS
(REITS) 1,042,583
-----------
ROAD & RAIL 2.2%
Avis Budget Group, Inc.*...... 21,447 35,173
Werner Enterprises, Inc. ..... 4,789 93,960
YRC Worldwide, Inc.*.......... 20,357 93,235
-----------
TOTAL ROAD & RAIL 222,368
-----------
SPECIALTY RETAIL 6.6%
Barnes & Noble, Inc. ......... 2,220 41,914
Borders Group, Inc. .......... 22,247 75,417
Collective Brands, Inc.*...... 7,299 93,354
Foot Locker, Inc. ............ 20,617 301,421
Rent-A-Center, Inc.*.......... 10,789 157,519
-----------
TOTAL SPECIALTY RETAIL 669,625
-----------
THRIFTS & MORTGAGE FINANCE 4.5%
Astoria Financial Corp. ...... 3,330 63,337
First Niagara Financial Group,
Inc. ...................... 12,588 198,513
New York Community Bancorp,
Inc. ...................... 6,599 103,340
PMI Group, Inc.(The).......... 12,758 31,768
Washington Federal, Inc. ..... 3,070 54,093
-----------
TOTAL THRIFTS & MORTGAGE FINANCE 451,051
-----------
TOBACCO 1.3%
Universal Corp. .............. 3,340 132,231
-----------
TOTAL TOBACCO 132,231
-----------
TRADING COMPANIES & DISTRIBUTORS 1.4%
GATX Corp. ................... 3,150 89,932
United Rentals, Inc.*......... 5,059 51,855
-----------
TOTAL TRADING COMPANIES & DISTRIBUTORS 141,787
-----------
TOTAL COMMON STOCKS
(Cost $16,967,222) 10,094,601
-----------
SHORT TERM INVESTMENTS 0.3%
SSgA Government Money Market
Fund....................... 31,649 31,649
-----------
TOTAL SHORT TERM INVESTMENTS
(Cost $31,649) 31,649
-----------
TOTAL INVESTMENTS 100.0%
(Cost $16,998,871) 10,126,250
-----------
LIABILITIES IN EXCESS OF OTHER
ASSETS--0.0%(A) (714)
-----------
NET ASSETS--100.0% $10,125,536
- ------------------------------------------------------
</Table>
* Non-Income Producing Security.
(a) Amount represents less than 0.05% of net assets.
41 ANNUAL REPORT
See Notes to Financial Statements.
RYDEX S&P MIDCAP 400 PURE GROWTH ETF
SCHEDULE OF INVESTMENTS October 31, 2008
- --------------------------------------------------------------------------------
<Table>
<Caption>
MARKET
SHARES VALUE
- ------------------------------------------------------
COMMON STOCKS 99.9%
AEROSPACE & DEFENSE 1.2%
Alliant Techsystems, Inc.*.... 2,480 $204,699
-----------
TOTAL AEROSPACE & DEFENSE 204,699
-----------
BEVERAGES 1.3%
Hansen Natural Corp.*......... 9,151 231,703
-----------
TOTAL BEVERAGES 231,703
-----------
BIOTECHNOLOGY 1.7%
United Therapeutics Corp.*.... 3,515 306,614
-----------
TOTAL BIOTECHNOLOGY 306,614
-----------
CAPITAL MARKETS 1.7%
Affiliated Managers Group,
Inc.*...................... 1,660 76,991
Eaton Vance Corp. ............ 4,715 103,730
SEI Investments Co. .......... 6,355 112,356
-----------
TOTAL CAPITAL MARKETS 293,077
-----------
CHEMICALS 0.7%
Terra Industries, Inc. ....... 5,265 115,777
-----------
TOTAL CHEMICALS 115,777
-----------
COMMERCIAL SERVICES & SUPPLIES 6.5%
Copart, Inc.*................. 3,420 119,358
Corporate Executive Board
Co.(The)................... 3,730 111,266
Dun & Bradstreet Corp. ....... 2,250 165,802
Korn/Ferry International*..... 11,061 153,637
Mine Safety Appliances Co. ... 2,730 73,710
Navigant Consulting, Inc.*.... 16,996 274,825
Rollins, Inc. ................ 8,231 144,619
Stericycle, Inc.*............. 1,790 104,590
-----------
TOTAL COMMERCIAL SERVICES & SUPPLIES 1,147,807
-----------
COMMUNICATIONS EQUIPMENT 2.5%
F5 Networks, Inc.*............ 12,706 315,363
Plantronics, Inc. ............ 8,111 117,123
-----------
TOTAL COMMUNICATIONS EQUIPMENT 432,486
-----------
COMPUTERS & PERIPHERALS 1.0%
Western Digital Corp.*........ 10,581 174,587
-----------
TOTAL COMPUTERS & PERIPHERALS 174,587
-----------
DIVERSIFIED CONSUMER SERVICES 7.1%
Career Education Corp.*....... 11,651 184,202
Corinthian Colleges, Inc.*.... 15,906 227,138
ITT Educational Services,
Inc.*...................... 3,085 270,400
Matthews International
Corp. -- Class A........... 4,010 178,966
Sotheby's..................... 5,065 47,155
Strayer Education, Inc. ...... 1,520 343,931
-----------
TOTAL DIVERSIFIED CONSUMER SERVICES 1,251,792
-----------
ELECTRONIC EQUIPMENT & INSTRUMENTS 2.0%
FLIR Systems, Inc.*........... 8,456 271,438
Trimble Navigation, Ltd.*..... 3,525 72,509
-----------
TOTAL ELECTRONIC EQUIPMENT & INSTRUMENTS 343,947
-----------
ENERGY EQUIPMENT & SERVICES 2.5%
FMC Technologies, Inc.*....... 3,405 119,141
Helix Energy Solutions Group,
Inc.*...................... 7,320 77,299
Oceaneering International,
Inc.*...................... 2,460 69,298
Unit Corp.*................... 4,760 178,691
-----------
TOTAL ENERGY EQUIPMENT & SERVICES 444,429
-----------
HEALTH CARE EQUIPMENT & SUPPLIES 3.9%
Gen-Probe, Inc.*.............. 3,235 152,239
Hologic, Inc.*................ 8,671 106,133
Idexx Laboratories, Inc.*..... 3,455 121,581
Kinetic Concepts, Inc.*....... 6,450 156,155
ResMed, Inc.*................. 4,285 146,804
-----------
TOTAL HEALTH CARE EQUIPMENT & SUPPLIES 682,912
-----------
HEALTH CARE PROVIDERS & SERVICES 5.3%
Community Health Systems,
Inc.*...................... 5,295 108,547
Henry Schein, Inc.*........... 2,295 107,429
Lincare Holdings, Inc.*....... 6,225 164,029
Psychiatric Solutions, Inc.*.. 12,826 426,977
VCA Antech, Inc.*............. 7,346 132,963
-----------
TOTAL HEALTH CARE PROVIDERS & SERVICES 939,945
-----------
HEALTH CARE TECHNOLOGY 0.5%
Cerner Corp.*................. 2,540 94,564
-----------
TOTAL HEALTH CARE TECHNOLOGY 94,564
-----------
HOTELS, RESTAURANTS & LEISURE 1.4%
Cheesecake Factory,
Inc.(The)*................. 7,230 63,624
Chipotle Mexican Grill,
Inc. -- Class A*........... 1,915 97,186
Scientific Games
Corp. -- Class A*.......... 5,175 93,150
-----------
TOTAL HOTELS, RESTAURANTS & LEISURE 253,960
-----------
HOUSEHOLD DURABLES 3.9%
NVR, Inc.*.................... 710 348,049
Toll Brothers, Inc.*.......... 14,626 338,153
-----------
TOTAL HOUSEHOLD DURABLES 686,202
-----------
HOUSEHOLD PRODUCTS 1.7%
Church & Dwight Co., Inc. .... 2,670 157,770
Energizer Holdings, Inc.*..... 2,900 141,694
-----------
TOTAL HOUSEHOLD PRODUCTS 299,464
-----------
INSURANCE 4.5%
Brown & Brown, Inc. .......... 9,531 195,576
Philadelphia Consolidated
Holding Co.*............... 6,405 374,628
W.R. Berkley Corp. ........... 8,506 223,453
-----------
TOTAL INSURANCE 793,657
-----------
INTERNET & CATALOG RETAIL 0.6%
Priceline.com, Inc.*.......... 1,910 100,523
-----------
TOTAL INTERNET & CATALOG RETAIL 100,523
-----------
INTERNET SOFTWARE & SERVICES 2.2%
Digital River, Inc.*.......... 12,741 315,722
ValueClick, Inc.*............. 9,531 70,529
-----------
TOTAL INTERNET SOFTWARE & SERVICES 386,251
-----------
</Table>
42
See Notes to Financial Statements.
RYDEX S&P MIDCAP 400 PURE GROWTH ETF
SCHEDULE OF INVESTMENTS (concluded) October 31, 2008
- --------------------------------------------------------------------------------
<Table>
<Caption>
MARKET
SHARES VALUE
- ------------------------------------------------------
COMMON STOCKS (CONCLUDED)
IT SERVICES 3.7%
Alliance Data Systems Corp.*.. 2,610 $130,918
DST Systems, Inc.*............ 4,105 166,581
Gartner, Inc.*................ 4,895 90,068
Global Payments, Inc. ........ 4,105 166,293
SRA International,
Inc. -- Class A*........... 5,415 100,069
-----------
TOTAL IT SERVICES 653,929
-----------
LIFE SCIENCES TOOLS & SERVICES 4.2%
Affymetrix, Inc.*............. 12,866 47,476
Charles River Laboratories
International, Inc.*....... 1,520 54,462
Covance, Inc.*................ 1,300 65,000
Invitrogen Corp.*............. 7,760 223,410
Pharmaceutical Product
Development, Inc. ......... 4,795 148,549
Techne Corp. ................. 2,965 204,644
-----------
TOTAL LIFE SCIENCES TOOLS & SERVICES 743,541
-----------
MACHINERY 2.4%
Donaldson Co., Inc. .......... 3,510 123,377
Graco, Inc. .................. 5,905 146,031
Joy Global, Inc. ............. 5,275 152,869
-----------
TOTAL MACHINERY 422,277
-----------
MEDIA 5.0%
DreamWorks Animation SKG,
Inc. -- Class A*........... 14,126 396,941
John Wiley & Sons, Inc.- Class
A.......................... 3,905 135,816
Marvel Entertainment, Inc.*... 8,321 267,853
Valassis Communications,
Inc.*...................... 16,701 74,152
-----------
TOTAL MEDIA 874,762
-----------
METALS & MINING 2.6%
Cliffs Natural Resources,
Inc. ...................... 7,150 192,979
Commercial Metals Co. ........ 11,071 122,888
Steel Dynamics, Inc. ......... 11,976 142,754
-----------
TOTAL METALS & MINING 458,621
-----------
MULTILINE RETAIL 1.4%
Dollar Tree, Inc.*............ 6,625 251,883
-----------
TOTAL MULTILINE RETAIL 251,883
-----------
OIL, GAS & CONSUMABLE FUELS 5.5%
Cimarex Energy Co. ........... 6,215 251,459
Denbury Resources, Inc.*...... 6,570 83,505
Encore Acquisition Co.*....... 13,076 407,317
Frontier Oil Corp. ........... 7,406 97,833
Newfield Exploration Co.*..... 3,300 75,834
Quicksilver Resources, Inc.*.. 5,295 55,439
-----------
TOTAL OIL, GAS & CONSUMABLE FUELS 971,387
-----------
PERSONAL PRODUCTS 0.9%
NBTY, Inc.*................... 6,745 157,631
-----------
TOTAL PERSONAL PRODUCTS 157,631
-----------
PHARMACEUTICALS 2.8%
Endo Pharmaceuticals Holdings,
Inc.*...................... 11,271 208,514
Medicis Pharmaceutical
Corp. -- Class A........... 4,475 63,858
Sepracor, Inc.*............... 16,106 214,532
-----------
TOTAL PHARMACEUTICALS 486,904
-----------
REAL ESTATE MANAGEMENT & DEVELOPMENT 0.8%
Jones Lang LaSalle, Inc. ..... 4,480 147,482
-----------
TOTAL REAL ESTATE MANAGEMENT &
DEVELOPMENT 147,482
-----------
SEMICONDUCTORS & SEMICONDUCTOR EQUIPMENT 2.3%
Cree, Inc.*................... 10,061 197,497
Silicon Laboratories, Inc.*... 7,750 201,190
-----------
TOTAL SEMICONDUCTORS & SEMICONDUCTOR
EQUIPMENT 398,687
-----------
SOFTWARE 4.4%
ACI Worldwide, Inc.*.......... 12,716 174,209
Ansys, Inc.*.................. 3,545 101,493
Factset Research Systems,
Inc. ...................... 4,205 163,112
Fair Isaac Corp. ............. 4,695 73,195
Macrovision Solutions Corp.*.. 6,600 73,128
McAfee, Inc.*................. 5,645 183,745
-----------
TOTAL SOFTWARE 768,882
-----------
SPECIALTY RETAIL 9.0%
Advance Auto Parts, Inc. ..... 5,365 167,388
Aeropostale, Inc.*............ 14,086 341,022
American Eagle Outfitters,
Inc. ...................... 8,916 99,146
Chico's FAS, Inc.*............ 38,134 129,656
Guess?, Inc. ................. 2,685 58,452
O'Reilly Automotive, Inc.*.... 4,725 128,095
Pacific Sunwear of California,
Inc.*...................... 15,136 51,765
Ross Stores, Inc. ............ 8,971 293,262
Urban Outfitters, Inc.*....... 11,601 252,206
Williams-Sonoma, Inc. ........ 7,200 59,616
-----------
TOTAL SPECIALTY RETAIL 1,580,608
-----------
TEXTILES, APPAREL & LUXURY GOODS 2.7%
Timberland Co. -- Class A*.... 12,516 151,444
Under Armour, Inc. -- Class
A*......................... 7,080 184,080
Warnaco Group, Inc.*.......... 4,985 148,602
-----------
TOTAL TEXTILES, APPAREL & LUXURY GOODS 484,126
-----------
TOTAL COMMON STOCKS
(Cost $26,673,089) 17,585,116
-----------
SHORT TERM INVESTMENTS 0.0%(A)
SSgA Government Money Market
Fund....................... 100 100
-----------
TOTAL SHORT TERM INVESTMENTS
(Cost $100) 100
-----------
TOTAL INVESTMENTS 99.9%
(Cost $26,673,189) 17,585,216
-----------
OTHER ASSETS IN EXCESS OF
LIABILITIES--0.1% 10,628
-----------
NET ASSETS--100.0% $17,595,844
- ------------------------------------------------------
</Table>
* Non-Income Producing Security.
(a) Amount represents less than 0.05% of net assets.
43 ANNUAL REPORT
See Notes to Financial Statements.
RYDEX S&P SMALLCAP 600 PURE VALUE ETF
SCHEDULE OF INVESTMENTS October 31, 2008
- --------------------------------------------------------------------------------
<Table>
<Caption>
MARKET
SHARES VALUE
- -------------------------------------------------------
COMMON STOCKS 99.5%
AEROSPACE & DEFENSE 0.8%
Applied Signal Technology,
Inc. ...................... 11,920 $213,606
-----------
TOTAL AEROSPACE & DEFENSE 213,606
-----------
AUTO COMPONENTS 1.7%
Standard Motor Products,
Inc. ...................... 60,220 253,526
Superior Industries
International, Inc. ....... 13,490 192,907
-----------
TOTAL AUTO COMPONENTS 446,433
-----------
AUTOMOBILES 0.3%
Monaco Coach Corp. ........... 38,000 83,600
-----------
TOTAL AUTOMOBILES 83,600
-----------
BUILDING PRODUCTS 2.7%
Gibraltar Industries, Inc. ... 17,470 231,477
Griffon Corp.*................ 21,220 179,097
NCI Building Systems, Inc.*... 3,260 60,669
Universal Forest Products,
Inc. ...................... 8,750 206,937
-----------
TOTAL BUILDING PRODUCTS 678,180
-----------
CAPITAL MARKETS 1.4%
SWS Group, Inc. .............. 18,680 346,701
-----------
TOTAL CAPITAL MARKETS 346,701
-----------
CHEMICALS 3.7%
A. Schulman, Inc. ............ 9,880 176,951
Georgia Gulf Corp. ........... 71,180 163,714
Material Sciences Corp.*...... 13,380 65,964
PolyOne Corp.*................ 45,020 213,845
Quaker Chemical Corp. ........ 9,140 174,848
Stepan Co. ................... 4,340 155,502
-----------
TOTAL CHEMICALS 950,824
-----------
COMMERCIAL BANKS 11.2%
Central Pacific Financial
Corp. ..................... 14,200 221,520
Community Bank System, Inc. .. 6,910 172,405
First BanCorp. ............... 48,090 491,480
First Commonwealth Financial
Corp. ..................... 14,220 157,273
First Financial Bancorp....... 13,750 184,938
First Midwest Bancorp, Inc. .. 2,120 47,085
Hanmi Financial Corp. ........ 17,440 69,760
Independent Bank Corp. ....... 28,490 104,558
Irwin Financial Corp. ........ 30,400 66,880
National Penn Bancshares,
Inc. ...................... 8,210 139,077
Old National Bancorp.......... 9,510 180,119
Provident Bankshares Corp. ... 9,700 103,499
South Financial Group, Inc. .. 12,110 70,359
Sterling Bancorp.............. 10,640 166,835
Sterling Financial Corp. ..... 8,360 70,976
Susquehanna Bancshares,
Inc. ...................... 11,050 171,165
Umpqua Holdings Corp. ........ 15,650 266,363
United Bankshares, Inc. ...... 2,320 74,008
Whitney Holding Corp. ........ 4,910 93,290
-----------
TOTAL COMMERCIAL BANKS 2,851,590
-----------
COMMERCIAL SERVICES & SUPPLIES 2.9%
ABM Industries, Inc. ......... 8,840 144,357
CDI Corp. .................... 5,180 67,340
Spherion Corp.*............... 41,850 133,083
Standard Register Co.(The).... 24,350 197,965
United Stationers, Inc.*...... 1,550 57,955
Volt Information Sciences,
Inc.*...................... 19,450 148,793
-----------
TOTAL COMMERCIAL SERVICES & SUPPLIES 749,493
-----------
COMMUNICATIONS EQUIPMENT 0.6%
Black Box Corp. .............. 2,570 78,154
Symmetricom, Inc.*............ 16,920 75,294
-----------
TOTAL COMMUNICATIONS EQUIPMENT 153,448
-----------
CONSTRUCTION & ENGINEERING 0.2%
Insituform Technologies,
Inc. -- Class A*........... 4,530 60,838
-----------
TOTAL CONSTRUCTION & ENGINEERING 60,838
-----------
CONTAINERS & PACKAGING 1.0%
Rock-Tenn Co. -- Class A...... 8,070 245,409
-----------
TOTAL CONTAINERS & PACKAGING 245,409
-----------
DISTRIBUTORS 0.2%
Audiovox Corp. -- Class A*.... 9,250 54,483
-----------
TOTAL DISTRIBUTORS 54,483
-----------
DIVERSIFIED CONSUMER SERVICES 0.1%
CPI Corp. .................... 4,140 30,222
-----------
TOTAL DIVERSIFIED CONSUMER SERVICES 30,222
-----------
DIVERSIFIED FINANCIAL SERVICES 0.4%
Financial Federal Corp. ...... 4,190 96,999
-----------
TOTAL DIVERSIFIED FINANCIAL SERVICES 96,999
-----------
ELECTRIC UTILITIES 2.3%
Allete, Inc. ................. 3,570 124,950
Central Vermont Public Service
Corp. ..................... 4,840 96,364
Cleco Corp. .................. 4,210 96,872
UIL Holdings Corp. ........... 4,110 135,630
Unisource Energy Corp. ....... 4,720 130,178
-----------
TOTAL ELECTRIC UTILITIES 583,994
-----------
ELECTRICAL EQUIPMENT 0.7%
AO Smith Corp. ............... 4,170 131,563
C&D Technologies, Inc.*....... 14,520 50,820
-----------
TOTAL ELECTRICAL EQUIPMENT 182,383
-----------
ELECTRONIC EQUIPMENT & INSTRUMENTS 2.7%
Benchmark Electronics, Inc.*.. 5,850 70,141
CTS Corp. .................... 12,040 84,160
Gerber Scientific, Inc.*...... 8,840 42,255
Insight Enterprises, Inc.*.... 8,600 83,678
Methode Electronics, Inc. .... 5,610 42,580
</Table>
44
See Notes to Financial Statements.
RYDEX S&P SMALLCAP 600 PURE VALUE ETF
SCHEDULE OF INVESTMENTS (continued) October 31, 2008
- --------------------------------------------------------------------------------
<Table>
<Caption>
MARKET
SHARES VALUE
- -------------------------------------------------------
COMMON STOCKS (CONTINUED)
Park Electrochemical Corp. ... 4,130 $89,291
SYNNEX Corp.*................. 18,660 287,924
-----------
TOTAL ELECTRONIC EQUIPMENT & INSTRUMENTS 700,029
-----------
FOOD & STAPLES RETAILING 2.5%
Great Atlantic & Pacific Tea
Co., Inc.*................. 2,460 20,344
Nash Finch Co. ............... 9,260 365,122
Spartan Stores, Inc. ......... 9,810 264,772
-----------
TOTAL FOOD & STAPLES RETAILING 650,238
-----------
FOOD PRODUCTS 0.3%
Lance, Inc. .................. 3,820 79,036
-----------
TOTAL FOOD PRODUCTS 79,036
-----------
GAS UTILITIES 5.1%
Atmos Energy Corp. ........... 13,360 324,247
Laclede Group, Inc. .......... 7,770 406,527
New Jersey Resources Corp. ... 3,830 142,629
Northwest Natural Gas Co. .... 1,600 81,408
Piedmont Natural Gas Co.,
Inc. ...................... 4,500 148,140
Southwest Gas Corp. .......... 7,400 193,288
-----------
TOTAL GAS UTILITIES 1,296,239
-----------
HEALTH CARE EQUIPMENT & SUPPLIES 0.5%
Datascope Corp. .............. 2,660 133,452
-----------
TOTAL HEALTH CARE EQUIPMENT & SUPPLIES 133,452
-----------
HEALTH CARE PROVIDERS & SERVICES 1.2%
Gentiva Health Services,
Inc.*...................... 3,450 93,667
MedCath Corp.*................ 4,240 65,381
Owens & Minor, Inc. .......... 3,200 138,464
-----------
TOTAL HEALTH CARE PROVIDERS & SERVICES 297,512
-----------
HOTELS, RESTAURANTS & LEISURE 1.6%
CKE Restaurants, Inc. ........ 5,040 42,790
Landry's Restaurants, Inc. ... 8,720 109,436
O'Charleys, Inc. ............. 16,700 125,250
Ruby Tuesday, Inc.*........... 34,010 81,964
Steak n Shake Co.(The)*....... 9,170 47,225
-----------
TOTAL HOTELS, RESTAURANTS & LEISURE 406,665
-----------
HOUSEHOLD DURABLES 5.4%
Bassett Furniture Industries,
Inc. ...................... 49,830 219,750
Ethan Allen Interiors, Inc. .. 3,890 69,592
La-Z-Boy, Inc. ............... 63,900 369,342
Libbey, Inc. ................. 9,940 36,381
M/I Homes, Inc. .............. 29,030 395,098
National Presto Industries,
Inc. ...................... 4,210 278,913
-----------
TOTAL HOUSEHOLD DURABLES 1,369,076
-----------
HOUSEHOLD PRODUCTS 0.8%
Central Garden & Pet
Co. -- Class A*............ 62,760 199,577
Spectrum Brands, Inc.*........ 23,620 17,242
-----------
TOTAL HOUSEHOLD PRODUCTS 216,819
-----------
INDUSTRIAL CONGLOMERATES 2.1%
Standex International Corp. .. 15,860 409,347
Tredegar Corp. ............... 9,100 133,952
-----------
TOTAL INDUSTRIAL CONGLOMERATES 543,299
-----------
INSURANCE 4.1%
LandAmerica Financial Group,
Inc. ...................... 16,590 163,411
Presidential Life Corp. ...... 10,440 97,927
Safety Insurance Group,
Inc. ...................... 6,710 254,913
Selective Insurance Group,
Inc. ...................... 5,760 136,800
Stewart Information Services
Corp. ..................... 19,140 317,724
United Fire & Casualty Co. ... 3,110 72,059
-----------
TOTAL INSURANCE 1,042,834
-----------
IT SERVICES 1.4%
Ciber, Inc.*.................. 22,330 120,582
Gevity HR, Inc. .............. 66,580 227,038
-----------
TOTAL IT SERVICES 347,620
-----------
LEISURE EQUIPMENT & PRODUCTS 1.6%
Arctic Cat, Inc. ............. 27,520 208,602
Brunswick Corp. .............. 20,970 72,766
Nautilus, Inc.*............... 49,780 121,463
-----------
TOTAL LEISURE EQUIPMENT & PRODUCTS 402,831
-----------
LIFE SCIENCES TOOLS & SERVICES 0.4%
Cambrex Corp.*................ 24,260 109,170
-----------
TOTAL LIFE SCIENCES TOOLS & SERVICES 109,170
-----------
MACHINERY 2.7%
Briggs & Stratton Corp. ...... 8,650 136,324
Lydall, Inc.*................. 12,970 86,250
Mueller Industries, Inc. ..... 3,100 70,897
Wabash National Corp. ........ 63,420 383,057
-----------
TOTAL MACHINERY 676,528
-----------
MEDIA 0.5%
Live Nation, Inc.*............ 11,880 133,650
-----------
TOTAL MEDIA 133,650
-----------
METALS & MINING 0.2%
AM Castle & Co. .............. 4,310 52,453
-----------
TOTAL METALS & MINING 52,453
-----------
MULTI-UTILITIES 1.6%
Avista Corp. ................. 8,050 159,873
CH Energy Group, Inc. ........ 5,750 237,072
-----------
TOTAL MULTI-UTILITIES 396,945
-----------
MULTILINE RETAIL 1.9%
Fred's, Inc. -- Class A....... 25,440 311,640
Tuesday Morning Corp.*........ 71,810 160,854
-----------
TOTAL MULTILINE RETAIL 472,494
-----------
</Table>
45 ANNUAL REPORT
See Notes to Financial Statements.
RYDEX S&P SMALLCAP 600 PURE VALUE ETF
SCHEDULE OF INVESTMENTS (concluded) October 31, 2008
- --------------------------------------------------------------------------------
<Table>
<Caption>
MARKET
SHARES VALUE
- -------------------------------------------------------
COMMON STOCKS (CONCLUDED)
OIL, GAS & CONSUMABLE FUELS 0.2%
Southern Union Co. ........... 3,070 $52,865
-----------
TOTAL OIL, GAS & CONSUMABLE FUELS 52,865
-----------
PAPER & FOREST PRODUCTS 1.3%
Schweitzer-Mauduit
International, Inc. ....... 4,130 69,054
Wausau Paper Corp. ........... 28,520 264,095
-----------
TOTAL PAPER & FOREST PRODUCTS 333,149
-----------
REAL ESTATE INVESTMENT TRUSTS (REITS) 8.0%
BioMed Realty Trust, Inc. .... 8,090 113,664
Colonial Properties Trust..... 15,830 166,848
DiamondRock Hospitality Co. .. 10,000 51,800
Entertainment Properties
Trust...................... 2,480 92,876
Home Properties, Inc. ........ 3,280 132,807
Inland Real Estate Corp. ..... 7,620 87,325
Kite Realty Group Trust....... 10,270 62,442
Lexington Realty Trust........ 12,640 101,499
LTC Properties, Inc. ......... 4,610 111,424
Medical Properties Trust,
Inc. ...................... 17,970 132,619
Mid-America Apartment
Communities, Inc. ......... 3,960 139,550
National Retail Properties,
Inc. ...................... 6,310 112,507
Parkway Properties, Inc. ..... 5,570 96,083
Pennsylvania Real Estate
Investment Trust........... 9,600 121,440
Post Properties, Inc. ........ 4,094 91,378
PS Business Parks, Inc. ...... 1,300 58,851
Senior Housing Properties
Trust...................... 6,200 118,854
Sovran Self Storage, Inc. .... 3,270 106,112
Urstadt Biddle Properties,
Inc -- Class A............ 9,160 150,041
-----------
TOTAL REAL ESTATE INVESTMENT TRUSTS
(REITS) 2,048,120
-----------
ROAD & RAIL 1.7%
Arkansas Best Corp. .......... 14,730 429,969
-----------
TOTAL ROAD & RAIL 429,969
-----------
SEMICONDUCTORS & SEMICONDUCTOR EQUIPMENT 0.2%
Photronics, Inc.*............. 16,370 11,295
Rudolph Technologies, Inc.*... 8,570 28,710
-----------
TOTAL SEMICONDUCTORS & SEMICONDUCTOR
EQUIPMENT 40,005
-----------
SPECIALTY RETAIL 15.8%
Big 5 Sporting Goods Corp. ... 7,300 45,844
Brown Shoe Co., Inc. ......... 12,450 131,223
Cabela's, Inc.*............... 5,020 39,909
Cato Corp. -- Class A......... 14,770 229,231
Finish Line, Inc. -- Class A.. 155,009 1,483,436
Group 1 Automotive, Inc. ..... 15,290 153,665
Haverty Furniture Cos.,
Inc. ...................... 44,380 436,699
Jo-Ann Stores, Inc.*.......... 23,020 441,063
Lithia Motors, Inc. -- Class
A.......................... 36,390 149,199
MarineMax, Inc.*.............. 16,680 38,698
OfficeMax, Inc. .............. 23,820 191,751
PEP Boys-Manny Moe & Jack..... 31,550 152,071
Sonic Automotive,
Inc. -- Class A............ 18,080 92,750
Stein Mart, Inc. ............. 112,369 241,593
Zale Corp.*................... 11,330 193,290
-----------
TOTAL SPECIALTY RETAIL 4,020,422
-----------
TEXTILES, APPAREL & LUXURY GOODS 0.6%
Oxford Industries, Inc. ...... 11,590 156,117
-----------
TOTAL TEXTILES, APPAREL & LUXURY GOODS 156,117
-----------
THRIFTS & MORTGAGE FINANCE 3.2%
Anchor BanCorp Wisconsin,
Inc. ...................... 2,860 16,302
Bank Mutual Corp. ............ 9,090 104,808
BankAtlantic Bancorp,
Inc -- A................... 14,170 87,429
Brookline Bancorp, Inc. ...... 9,620 112,554
Corus Bankshares, Inc. ....... 42,470 93,434
Dime Community Bancshares..... 7,180 119,906
FirstFed Financial Corp.*..... 4,550 40,722
Flagstar Bancorp, Inc. ....... 69,070 131,233
Guaranty Financial Group,
Inc.*...................... 7,950 16,138
TrustCo Bank Corp. ........... 8,270 100,646
-----------
TOTAL THRIFTS & MORTGAGE FINANCE 823,172
-----------
TOBACCO 0.6%
Alliance One International,
Inc.*...................... 48,160 160,854
-----------
TOTAL TOBACCO 160,854
-----------
TRADING COMPANIES & DISTRIBUTORS 1.1%
Lawson Products, Inc. ........ 2,900 86,420
Watsco, Inc. ................. 4,600 189,014
-----------
TOTAL TRADING COMPANIES & DISTRIBUTORS 275,434
-----------
TOTAL COMMON STOCKS
(Cost $35,116,408) 25,395,200
-----------
SHORT TERM INVESTMENTS 0.4%
SSgA Government Money Market
Fund....................... 111,994 111,994
-----------
TOTAL SHORT TERM INVESTMENTS
(Cost $111,994) 111,994
-----------
TOTAL INVESTMENTS 99.9%
(Cost $35,228,402) 25,507,194
-----------
OTHER ASSETS IN EXCESS OF
LIABILITIES--0.1% 19,596
-----------
NET ASSETS--100.0% $25,526,790
- -------------------------------------------------------
</Table>
* Non-Income Producing Security.
46
See Notes to Financial Statements.
RYDEX S&P SMALLCAP 600 PURE GROWTH ETF
SCHEDULE OF INVESTMENTS October 31, 2008
- --------------------------------------------------------------------------------
<Table>
<Caption>
MARKET
SHARES VALUE
- -----------------------------------------------------
COMMON STOCKS 99.7%
AEROSPACE & DEFENSE 3.0%
AAR Corp.*.................... 1,645 $26,304
Ceradyne, Inc.*............... 2,166 50,901
Curtiss-Wright Corp. ......... 1,167 43,062
Orbital Sciences Corp.*....... 3,082 63,150
Teledyne Technologies, Inc.*.. 769 35,043
----------
TOTAL AEROSPACE & DEFENSE 218,460
----------
AIR FREIGHT & LOGISTICS 0.6%
Forward Air Corp. ............ 1,576 41,244
----------
TOTAL AIR FREIGHT & LOGISTICS 41,244
----------
AUTO COMPONENTS 0.5%
Drew Industries, Inc.*........ 2,774 33,565
----------
TOTAL AUTO COMPONENTS 33,565
----------
BEVERAGES 0.5%
Boston Beer Co., Inc. -- Class
A*......................... 1,017 38,432
----------
TOTAL BEVERAGES 38,432
----------
BIOTECHNOLOGY 1.7%
Martek Biosciences Corp.*..... 4,051 120,841
----------
TOTAL BIOTECHNOLOGY 120,841
----------
BUILDING PRODUCTS 0.7%
Simpson Manufacturing Co.,
Inc. ...................... 2,216 51,057
----------
TOTAL BUILDING PRODUCTS 51,057
----------
CAPITAL MARKETS 4.1%
Greenhill & Co., Inc. ........ 2,326 153,446
optionsXpress Holdings,
Inc. ...................... 3,951 70,170
TradeStation Group, Inc.*..... 9,439 73,907
----------
TOTAL CAPITAL MARKETS 297,523
----------
CHEMICALS 1.3%
Balchem Corp. ................ 1,745 44,602
NewMarket Corp. .............. 1,316 49,600
----------
TOTAL CHEMICALS 94,202
----------
COMMERCIAL BANKS 3.3%
Nara Bancorp, Inc. ........... 4,669 51,359
PrivateBancorp, Inc. ......... 1,446 52,070
UCBH Holdings, Inc. .......... 3,084 16,284
Wilshire Bancorp, Inc. ....... 10,707 118,098
----------
TOTAL COMMERCIAL BANKS 237,811
----------
COMMERCIAL SERVICES & SUPPLIES 0.6%
Waste Connections, Inc.*...... 1,248 42,245
----------
TOTAL COMMERCIAL SERVICES & SUPPLIES 42,245
----------
COMMUNICATIONS EQUIPMENT 1.8%
Comtech Telecommunications
Corp.*..................... 1,337 64,737
NETGEAR, Inc.*................ 3,851 42,554
ViaSat, Inc.*................. 1,137 20,716
----------
TOTAL COMMUNICATIONS EQUIPMENT 128,007
----------
COMPUTERS & PERIPHERALS 0.8%
Intevac, Inc.*................ 5,138 39,974
Stratasys, Inc.*.............. 1,587 19,171
----------
TOTAL COMPUTERS & PERIPHERALS 59,145
----------
CONSTRUCTION MATERIALS 1.1%
Headwaters, Inc.*............. 7,843 83,136
----------
TOTAL CONSTRUCTION MATERIALS 83,136
----------
CONSUMER FINANCE 1.2%
First Cash Financial Services,
Inc.*...................... 2,872 44,142
World Acceptance Corp.*....... 2,135 39,455
----------
TOTAL CONSUMER FINANCE 83,597
----------
DISTRIBUTORS 0.2%
LKQ Corp.*.................... 1,477 16,897
----------
TOTAL DISTRIBUTORS 16,897
----------
DIVERSIFIED CONSUMER SERVICES 2.7%
Coinstar, Inc.*............... 3,352 80,414
Pre-Paid Legal Services,
Inc.*...................... 1,666 65,774
Universal Technical Institute,
Inc.*...................... 2,793 46,085
----------
TOTAL DIVERSIFIED CONSUMER SERVICES 192,273
----------
DIVERSIFIED FINANCIAL SERVICES 1.2%
Portfolio Recovery Associates,
Inc.*...................... 2,504 89,844
----------
TOTAL DIVERSIFIED FINANCIAL SERVICES 89,844
----------
ELECTRONIC EQUIPMENT & INSTRUMENTS 1.8%
Brightpoint, Inc.*............ 4,001 23,046
Daktronics, Inc. ............. 2,334 23,247
FARO Technologies, Inc.*...... 2,495 37,849
LoJack Corp.*................. 2,924 12,778
Scansource, Inc.*............. 1,647 32,676
----------
TOTAL ELECTRONIC EQUIPMENT & INSTRUMENTS 129,596
----------
ENERGY EQUIPMENT & SERVICES 3.3%
Basic Energy Services, Inc.*.. 5,967 81,629
CARBO Ceramics, Inc. ......... 1,387 60,015
Dril-Quip, Inc.*.............. 458 11,313
Hornbeck Offshore Services,
Inc.*...................... 2,154 51,265
Superior Well Services,
Inc.*...................... 2,185 36,599
----------
TOTAL ENERGY EQUIPMENT & SERVICES 240,821
----------
FOOD & STAPLES RETAILING 0.5%
United Natural Foods, Inc.*... 1,637 36,571
----------
TOTAL FOOD & STAPLES RETAILING 36,571
----------
</Table>
47 ANNUAL REPORT
See Notes to Financial Statements.
RYDEX S&P SMALLCAP 600 PURE GROWTH ETF
SCHEDULE OF INVESTMENTS (continued) October 31, 2008
- --------------------------------------------------------------------------------
<Table>
<Caption>
MARKET
SHARES VALUE
- -----------------------------------------------------
COMMON STOCKS (CONTINUED)
FOOD PRODUCTS 0.5%
Green Mountain Coffee
Roasters, Inc.*............ 1,327 $38,470
----------
TOTAL FOOD PRODUCTS 38,470
----------
HEALTH CARE EQUIPMENT & SUPPLIES 6.2%
Abaxis, Inc.*................. 1,666 25,606
American Medical Systems
Holdings, Inc.*............ 2,166 23,436
Cooper Cos., Inc. ............ 1,516 24,984
Haemonetics Corp.*............ 448 26,459
ICU Medical, Inc.*............ 1,057 33,856
Immucor, Inc.*................ 2,645 70,225
Integra LifeSciences Holdings
Corp.*..................... 1,595 59,876
Kensey Nash Corp.*............ 1,276 32,398
Merit Medical Systems, Inc.*.. 2,604 47,653
Palomar Medical Technologies,
Inc.*...................... 7,283 83,317
SurModics, Inc.*.............. 808 21,412
----------
TOTAL HEALTH CARE EQUIPMENT & SUPPLIES 449,222
----------
HEALTH CARE PROVIDERS & SERVICES 8.9%
Air Methods Corp.*............ 1,147 19,247
Amedisys, Inc.*............... 779 43,943
AMN Healthcare Services,
Inc.*...................... 4,182 37,596
Amsurg Corp.*................. 1,725 43,021
Catalyst Health Solutioins,
Inc.*...................... 6,118 103,211
Healthways, Inc.*............. 1,447 14,615
inVentiv Health, Inc.*........ 3,014 28,542
LCA-Vision, Inc. ............. 6,854 23,441
LHC Group, Inc.*.............. 5,438 191,853
Molina Healthcare, Inc.*...... 1,906 42,447
Pediatrix Medical Group,
Inc.*...................... 808 31,229
PharMerica Corp.*............. 2,922 59,989
Sunrise Senior Living, Inc.*.. 2,206 6,662
----------
TOTAL HEALTH CARE PROVIDERS & SERVICES 645,796
----------
HOTELS, RESTAURANTS & LEISURE 5.4%
CEC Entertainment, Inc.*...... 2,185 56,111
Monarch Casino & Resort,
Inc.*...................... 2,554 22,756
P.F. Chang's China Bistro,
Inc.*...................... 2,574 52,664
Panera Bread Co. -- Class A*.. 2,485 112,123
Papa John's International,
Inc.*...................... 2,822 63,664
Shuffle Master, Inc.*......... 9,279 35,817
Sonic Corp.*.................. 2,972 31,801
WMS Industries, Inc.*......... 798 19,950
----------
TOTAL HOTELS, RESTAURANTS & LEISURE 394,886
----------
HOUSEHOLD DURABLES 2.1%
Meritage Homes Corp.*......... 6,515 89,451
Standard Pacific Corp.*....... 23,147 65,969
----------
TOTAL HOUSEHOLD DURABLES 155,420
----------
INSURANCE 2.1%
Infinity Property & Casualty
Corp. ..................... 1,956 77,888
Zenith National Insurance
Corp. ..................... 2,254 74,066
----------
TOTAL INSURANCE 151,954
----------
INTERNET & CATALOG RETAIL 4.2%
NutriSystem, Inc. ............ 6,086 86,117
PetMed Express, Inc.*......... 9,418 166,322
Stamps.com, Inc.*............. 4,969 48,497
----------
TOTAL INTERNET & CATALOG RETAIL 300,936
----------
INTERNET SOFTWARE & SERVICES 6.0%
Bankrate, Inc.*............... 2,824 92,938
DealerTrack Holdings, Inc.*... 3,452 37,040
InfoSpace, Inc. .............. 4,519 38,728
j2 Global Communications,
Inc.*...................... 6,217 100,218
United Online, Inc. .......... 6,994 51,755
Websense, Inc.*............... 5,788 112,982
----------
TOTAL INTERNET SOFTWARE & SERVICES 433,661
----------
IT SERVICES 2.5%
CACI International,
Inc. -- Class A*........... 1,278 52,628
Heartland Payment Systems,
Inc. ...................... 4,321 75,229
Wright Express Corp.*......... 3,911 53,541
----------
TOTAL IT SERVICES 181,398
----------
LEISURE EQUIPMENT & PRODUCTS 1.7%
Polaris Industries, Inc. ..... 1,356 45,656
Pool Corp. ................... 4,421 76,970
----------
TOTAL LEISURE EQUIPMENT & PRODUCTS 122,626
----------
LIFE SCIENCES TOOLS & SERVICES 0.9%
Dionex Corp.*................. 769 41,395
Kendle International, Inc.*... 1,147 20,726
PharmaNet Development Group,
Inc.*...................... 1,316 2,106
----------
TOTAL LIFE SCIENCES TOOLS & SERVICES 64,227
----------
MACHINERY 0.5%
Toro Co. ..................... 1,127 37,912
----------
TOTAL MACHINERY 37,912
----------
MEDIA 0.7%
Arbitron, Inc. ............... 1,485 48,381
----------
TOTAL MEDIA 48,381
----------
METALS & MINING 0.2%
Brush Engineered Materials,
Inc.*...................... 1,276 15,657
----------
TOTAL METALS & MINING 15,657
----------
OIL, GAS & CONSUMABLE FUELS 2.1%
Penn Virginia Corp. .......... 1,516 56,350
Petroleum Development Corp.*.. 1,687 34,938
St. Mary Land & Exploration
Co. ....................... 2,545 63,345
----------
TOTAL OIL, GAS & CONSUMABLE FUELS 154,633
----------
PAPER & FOREST PRODUCTS 1.0%
Deltic Timber Corp. .......... 1,566 71,331
----------
TOTAL PAPER & FOREST PRODUCTS 71,331
----------
</Table>
48
See Notes to Financial Statements.
RYDEX S&P SMALLCAP 600 PURE GROWTH ETF
SCHEDULE OF INVESTMENTS (concluded) October 31, 2008
- --------------------------------------------------------------------------------
<Table>
<Caption>
MARKET
SHARES VALUE
- -----------------------------------------------------
COMMON STOCKS (CONCLUDED)
PERSONAL PRODUCTS 1.8%
Chattem, Inc.*................ 648 $49,034
Mannatech, Inc. .............. 20,654 82,823
----------
TOTAL PERSONAL PRODUCTS 131,857
----------
PHARMACEUTICALS 0.4%
Par Pharmaceutical Cos.,
Inc.*...................... 3,153 31,530
----------
TOTAL PHARMACEUTICALS 31,530
----------
ROAD & RAIL 2.8%
Heartland Express, Inc. ...... 3,501 53,705
Knight Transportation, Inc. .. 4,151 66,001
Landstar System, Inc. ........ 2,175 83,933
----------
TOTAL ROAD & RAIL 203,639
----------
SEMICONDUCTORS & SEMICONDUCTOR EQUIPMENT 0.2%
Diodes, Inc.*................. 1,457 14,395
----------
TOTAL SEMICONDUCTORS & SEMICONDUCTOR
EQUIPMENT 14,395
----------
SOFTWARE 8.8%
Blackbaud, Inc. .............. 2,395 36,404
Concur Technologies, Inc.*.... 1,964 49,552
Epicor Software Corp.*........ 9,389 66,192
EPIQ Systems, Inc.*........... 3,382 45,961
MICROS Systems, Inc.*......... 1,437 24,472
Quality Systems, Inc. ........ 3,153 121,359
Secure Computing Corp.*....... 9,241 52,304
Smith Micro Software, Inc.*... 8,931 55,819
Sonic Solutions, Inc.*........ 7,114 14,513
SPSS, Inc.*................... 1,756 41,020
Taleo Corp. Class A*.......... 5,775 79,695
Tyler Technologies, Inc.*..... 3,891 52,879
----------
TOTAL SOFTWARE 640,170
----------
SPECIALTY RETAIL 6.0%
Christopher & Banks Corp. .... 4,190 21,872
Dress Barn, Inc.*............. 4,369 41,768
Gymboree Corp.*............... 2,484 64,236
Hibbett Sports, Inc.*......... 3,642 64,864
Jos. A. Bank Clothiers,
Inc.*...................... 2,464 62,758
Select Comfort Corp.*......... 10,436 5,009
Stage Stores, Inc. ........... 7,921 61,071
Tractor Supply Co.*........... 1,895 78,756
Zumiez, Inc.*................. 3,672 35,839
----------
TOTAL SPECIALTY RETAIL 436,173
----------
TEXTILES, APPAREL & LUXURY GOODS 3.8%
Crocs, Inc.*.................. 3,343 8,391
Deckers Outdoor Corp.*........ 350 29,701
Fossil, Inc.*................. 1,227 22,270
K-Swiss, Inc. -- Class A...... 5,328 80,613
True Religion Apparel, Inc.*.. 4,511 75,559
Volcom, Inc.*................. 4,601 59,491
----------
TOTAL TEXTILES, APPAREL & LUXURY GOODS 276,025
----------
TOTAL COMMON STOCKS
(Cost $9,875,912) 7,235,566
----------
SHORT TERM INVESTMENTS 0.2%
SSgA Government Money Market
Fund....................... 12,036 12,036
----------
TOTAL SHORT TERM INVESTMENTS
(Cost $12,036) 12,036
----------
TOTAL INVESTMENTS 99.9%
(Cost $9,887,948) 7,247,602
----------
OTHER ASSETS IN EXCESS OF
LIABILITIES--0.1% 9,784
----------
NET ASSETS--100.0% $7,257,386
- -----------------------------------------------------
</Table>
*Non-Income Producing Security.
49 ANNUAL REPORT
See Notes to Financial Statements.
RYDEX S&P EQUAL WEIGHT CONSUMER DISCRETIONARY ETF
SCHEDULE OF INVESTMENTS October 31, 2008
- --------------------------------------------------------------------------------
<Table>
<Caption>
MARKET
SHARES VALUE
- -----------------------------------------------------
COMMON STOCKS 99.8%
AUTO COMPONENTS 1.9%
Goodyear Tire & Rubber
Co.(The)*.................. 4,052 $36,144
Johnson Controls, Inc. ....... 1,988 35,247
----------
TOTAL AUTO COMPONENTS 71,391
----------
AUTOMOBILES 2.7%
Ford Motor Co.*............... 12,468 27,305
General Motors Corp. ......... 5,935 34,304
Harley-Davidson, Inc. ........ 1,558 38,140
----------
TOTAL AUTOMOBILES 99,749
----------
DISTRIBUTORS 1.7%
Genuine Parts Co. ............ 1,588 62,488
----------
TOTAL DISTRIBUTORS 62,488
----------
DIVERSIFIED CONSUMER SERVICES 3.5%
Apollo Group, Inc. -- Class
A*......................... 1,087 75,558
H&R Block, Inc. .............. 2,749 54,210
----------
TOTAL DIVERSIFIED CONSUMER SERVICES 129,768
----------
HOTELS, RESTAURANTS & LEISURE 11.6%
Carnival Corp. ............... 1,678 42,621
Darden Restaurants, Inc. ..... 2,257 50,038
International Game
Technology................. 3,687 51,618
Marriott International,
Inc. -- Class A............ 2,399 50,067
McDonald's Corp. ............. 1,028 59,552
Starbucks Corp.*.............. 4,104 53,885
Starwood Hotels & Resorts
Worldwide, Inc. ........... 1,939 43,705
Wyndham Worldwide Corp. ...... 3,958 32,416
Yum! Brands, Inc. ............ 1,687 48,940
----------
TOTAL HOTELS, RESTAURANTS & LEISURE 432,842
----------
HOUSEHOLD DURABLES 15.3%
Black & Decker Corp. ......... 998 50,519
Centex Corp. ................. 4,036 49,441
D.R. Horton, Inc. ............ 4,907 36,214
Fortune Brands, Inc. ......... 1,089 41,535
Harman International
Industries, Inc. .......... 2,052 37,695
KB HOME....................... 2,956 49,336
Leggett & Platt, Inc. ........ 2,787 48,382
Lennar Corp. -- Class A....... 4,469 34,590
Newell Rubbermaid, Inc. ...... 3,495 48,056
Pulte Homes, Inc. ............ 4,046 45,072
Snap-on, Inc. ................ 1,218 45,005
Stanley Works(The)............ 1,460 47,800
Whirlpool Corp. .............. 769 35,874
----------
TOTAL HOUSEHOLD DURABLES 569,519
----------
INTERNET & CATALOG RETAIL 2.4%
Amazon.com, Inc.*............. 864 49,455
Expedia, Inc.*................ 4,170 39,657
----------
TOTAL INTERNET & CATALOG RETAIL 89,112
----------
LEISURE EQUIPMENT & PRODUCTS 3.8%
Eastman Kodak Co. ............ 4,183 38,400
Hasbro, Inc. ................. 1,777 51,658
Mattel, Inc. ................. 3,511 52,735
----------
TOTAL LEISURE EQUIPMENT & PRODUCTS 142,793
----------
MEDIA 19.0%
CBS Corp. -- Class B.......... 4,202 40,802
Comcast Corp. -- Class A...... 3,225 50,826
DIRECTV Group, Inc.(The)*..... 2,636 57,702
Gannett Co., Inc. ............ 3,637 40,007
Interpublic Group of Cos.,
Inc.*...................... 8,286 43,004
McGraw-Hill Cos., Inc. ....... 1,633 43,830
Meredith Corp. ............... 2,238 43,350
New York Times Co. -- Class
A.......................... 4,311 43,110
News Corp. -- Class A......... 5,060 53,838
Omnicom Group, Inc. .......... 1,619 47,825
Scripps Networks
Interactive -- Class A..... 1,566 44,474
Time Warner, Inc. ............ 4,739 47,817
Viacom, Inc. -- Class B*...... 2,549 51,541
Walt Disney Co.(The).......... 1,968 50,971
Washington Post Co. -- Class
B.......................... 113 48,228
----------
TOTAL MEDIA 707,325
----------
MULTILINE RETAIL 9.6%
Big Lots, Inc.*............... 2,055 50,204
Family Dollar Stores, Inc. ... 2,304 62,001
J.C. Penney Co., Inc. ........ 1,685 40,305
Kohl's Corp.*................. 1,286 45,177
Macy's, Inc. ................. 3,304 40,606
Nordstrom, Inc. .............. 1,967 35,583
Sears Holdings Corp.*......... 639 36,896
Target Corp. ................. 1,186 47,582
----------
TOTAL MULTILINE RETAIL 358,354
----------
SPECIALTY RETAIL 21.2%
Abercrombie & Fitch
Co. -- Class A............. 1,487 43,064
AutoNation, Inc.*............. 4,951 34,013
AutoZone, Inc.*............... 510 64,918
Bed Bath & Beyond, Inc.*...... 2,068 53,292
Best Buy Co., Inc. ........... 1,597 42,816
GameStop Corp. -- Class A*.... 1,706 46,727
Gap, Inc.(The)................ 3,526 45,626
Home Depot, Inc. ............. 2,446 57,701
Limited Brands, Inc. ......... 3,404 40,780
Lowe's Cos., Inc. ............ 2,746 59,588
Office Depot, Inc.*........... 10,598 38,153
RadioShack Corp. ............. 3,753 47,513
Sherwin-Williams Co.(The)..... 1,070 60,894
Staples, Inc. ................ 2,708 52,617
Tiffany & Co. ................ 1,726 47,379
TJX Cos., Inc. ............... 1,995 53,386
----------
TOTAL SPECIALTY RETAIL 788,467
----------
TEXTILES, APPAREL & LUXURY GOODS 7.1%
Coach, Inc.*.................. 2,308 47,545
Jones Apparel Group, Inc. .... 3,435 38,163
Liz Claiborne, Inc. .......... 3,521 28,696
NIKE, Inc. -- Class B......... 1,018 58,667
Polo Ralph Lauren Corp. ...... 939 44,293
V.F. Corp. ................... 809 44,576
----------
TOTAL TEXTILES, APPAREL & LUXURY GOODS 261,940
----------
TOTAL COMMON STOCKS
(Cost $6,986,784) 3,713,748
----------
</Table>
50
See Notes to Financial Statements.
RYDEX S&P EQUAL WEIGHT CONSUMER DISCRETIONARY ETF
SCHEDULE OF INVESTMENTS (concluded) October 31, 2008
- --------------------------------------------------------------------------------
<Table>
<Caption>
MARKET
SHARES VALUE
- -----------------------------------------------------
SHORT TERM INVESTMENTS 0.2%
SSgA Government Money Market
Fund....................... 7,072 $7,072
----------
TOTAL SHORT TERM INVESTMENTS
(Cost $7,072) 7,072
----------
TOTAL INVESTMENTS 100.0%
(Cost $6,993,856) 3,720,820
----------
OTHER ASSETS IN EXCESS OF
LIABILITIES--0.0%(A) 1,446
----------
NET ASSETS--100.0% $3,722,266
- -----------------------------------------------------
</Table>
(a) Amount represents less than 0.05% of net assets.
* Non-Income Producing Security.
51 ANNUAL REPORT
See Notes to Financial Statements.
RYDEX S&P EQUAL WEIGHT CONSUMER STAPLES ETF
SCHEDULE OF INVESTMENTS October 31, 2008
- --------------------------------------------------------------------------------
<Table>
<Caption>
MARKET
SHARES VALUE
- ------------------------------------------------------
COMMON STOCKS 99.4%
BEVERAGES 20.1%
Anheuser-Busch Cos., Inc. .... 4,650 $288,439
Brown-Forman Corp. -- Class
B.......................... 5,151 233,833
Coca-Cola Co.(The)............ 5,730 252,464
Coca-Cola Enterprises, Inc. .. 17,470 175,573
Constellation Brands,
Inc. -- Class A*........... 13,900 174,306
Dr Pepper Snapple Group,
Inc.*...................... 11,560 264,724
Molson Coors Brewing
Co. -- Class B............. 6,280 234,621
Pepsi Bottling Group, Inc. ... 9,830 227,270
PepsiCo, Inc. ................ 4,180 238,302
-----------
TOTAL BEVERAGES 2,089,532
-----------
FOOD & STAPLES RETAILING 19.5%
Costco Wholesale Corp. ....... 4,480 255,405
CVS Caremark Corp. ........... 8,470 259,605
Kroger Co.(The)............... 11,400 313,044
Safeway, Inc. ................ 11,940 253,964
SUPERVALU, Inc. .............. 13,460 191,670
Sysco Corp. .................. 8,960 234,752
Wal-Mart Stores, Inc. ........ 4,970 277,376
Walgreen Co. ................. 9,310 237,033
-----------
TOTAL FOOD & STAPLES RETAILING 2,022,849
-----------
FOOD PRODUCTS 31.3%
Archer-Daniels-Midland Co. ... 14,189 294,138
Campbell Soup Co. ............ 7,950 301,703
ConAgra Foods, Inc. .......... 15,530 270,533
Dean Foods Co.*............... 12,950 283,087
General Mills, Inc. .......... 4,390 297,379
H.J. Heinz Co. ............... 6,150 269,493
Hershey Co.(The).............. 7,160 266,638
Kellogg Co. .................. 5,370 270,755
Kraft Foods, Inc. -- Class A.. 9,060 264,008
McCormick & Co., Inc. ........ 7,730 260,192
Sara Lee Corp. ............... 23,549 263,278
Tyson Foods, Inc. -- Class A.. 23,549 205,818
-----------
TOTAL FOOD PRODUCTS 3,247,022
-----------
HOUSEHOLD PRODUCTS 10.7%
Clorox Co. ................... 4,810 292,496
Colgate-Palmolive Co. ........ 3,980 249,785
Kimberly-Clark Corp. ......... 4,720 289,289
Procter & Gamble Co. ......... 4,240 273,649
-----------
TOTAL HOUSEHOLD PRODUCTS 1,105,219
-----------
PERSONAL PRODUCTS 3.9%
Avon Products, Inc. .......... 7,640 189,701
Estee Lauder Cos.,
Inc -- Class A............. 5,920 213,357
-----------
TOTAL PERSONAL PRODUCTS 403,058
-----------
TOBACCO 13.9%
Altria Group, Inc. ........... 15,120 290,153
Lorillard, Inc. .............. 4,310 283,856
Philip Morris International,
Inc. ...................... 6,010 261,255
Reynolds American, Inc. ...... 6,250 306,000
UST, Inc. .................... 4,470 302,127
-----------
TOTAL TOBACCO 1,443,391
-----------
TOTAL COMMON STOCKS
(Cost $11,719,178) 10,311,071
-----------
SHORT TERM INVESTMENTS 0.5%
SSgA Government Money Market
Fund....................... 48,592 48,592
-----------
TOTAL SHORT TERM INVESTMENTS
(Cost $48,592) 48,592
-----------
TOTAL INVESTMENTS 99.9%
(Cost $11,767,770) 10,359,663
-----------
OTHER ASSETS IN EXCESS OF
LIABILITIES--0.1% 8,176
-----------
NET ASSETS--100.0% $10,367,839
- ------------------------------------------------------
</Table>
*Non-Income Producing Security.
52
See Notes to Financial Statements.
RYDEX S&P EQUAL WEIGHT ENERGY ETF
SCHEDULE OF INVESTMENTS October 31, 2008
- --------------------------------------------------------------------------------
<Table>
<Caption>
MARKET
SHARES VALUE
- -----------------------------------------------------
COMMON STOCKS 99.8%
ENERGY EQUIPMENT & SERVICES 28.1%
Baker Hughes, Inc. ........... 3,270 $114,287
BJ Services Co. .............. 10,050 129,143
Cameron International Corp.*.. 5,270 127,850
ENSCO International, Inc. .... 3,630 137,976
Halliburton Co. .............. 6,110 120,917
Nabors Industries, Ltd.*...... 8,090 116,334
National-Oilwell Varco,
Inc.*...................... 4,020 120,158
Noble Corp. .................. 4,880 157,185
Rowan Cos., Inc. ............. 6,470 117,366
Schlumberger, Ltd. ........... 2,560 132,224
Smith International, Inc. .... 3,460 119,301
Transocean, Inc.*............. 1,850 152,310
Weatherford International,
Ltd.*...................... 7,530 127,106
----------
TOTAL ENERGY EQUIPMENT & SERVICES 1,672,157
----------
OIL, GAS & CONSUMABLE FUELS 71.7%
Anadarko Petroleum Corp. ..... 3,980 140,494
Apache Corp. ................. 1,870 153,957
Cabot Oil & Gas Corp. ........ 5,590 156,911
Chesapeake Energy Corp. ...... 5,490 120,615
Chevron Corp. ................ 2,560 190,976
ConocoPhillips................ 2,930 152,419
CONSOL Energy, Inc. .......... 3,760 118,026
Devon Energy Corp. ........... 2,160 174,658
El Paso Corp. ................ 15,930 154,521
EOG Resources, Inc. .......... 2,290 185,307
Exxon Mobil Corp. ............ 2,720 201,606
Hess Corp. ................... 2,500 150,525
Marathon Oil Corp. ........... 5,310 154,521
Massey Energy Co. ............ 5,800 133,922
Murphy Oil Corp. ............. 3,250 164,580
Noble Energy, Inc. ........... 3,650 189,143
Occidental Petroleum Corp. ... 2,990 166,065
Peabody Energy Corp. ......... 3,970 137,005
Pioneer Natural Resources
Co. ....................... 3,800 105,754
Range Resources Corp. ........ 4,280 180,702
Southwestern Energy Co.*...... 6,540 232,955
Spectra Energy Corp. ......... 8,610 166,431
Sunoco, Inc. ................. 5,160 157,380
Tesoro Corp. ................. 12,250 118,458
Valero Energy Corp. .......... 6,590 135,622
Williams Cos., Inc. .......... 8,520 178,664
XTO Energy, Inc. ............. 4,160 149,552
----------
TOTAL OIL, GAS & CONSUMABLE FUELS 4,270,769
----------
TOTAL COMMON STOCKS
(Cost $9,473,407) 5,942,926
----------
SHORT TERM INVESTMENTS 0.2%
SSgA Government Money Market
Fund....................... 14,428 14,428
----------
TOTAL SHORT TERM INVESTMENTS
(Cost $14,428) 14,428
----------
TOTAL INVESTMENTS 100.0%
(Cost $9,487,835) 5,957,354
----------
OTHER ASSETS IN EXCESS OF
LIABILITIES--0.0%(A) 197
----------
NET ASSETS--100.0% $5,957,551
- -----------------------------------------------------
</Table>
*Non-Income Producing Security.
(a) Amount represents less than 0.05% of net assets.
53 ANNUAL REPORT
See Notes to Financial Statements.
RYDEX S&P EQUAL WEIGHT FINANCIALS ETF
SCHEDULE OF INVESTMENTS October 31, 2008
- --------------------------------------------------------------------------------
<Table>
<Caption>
MARKET
SHARES VALUE
- ------------------------------------------------------
COMMON STOCKS 99.7%
CAPITAL MARKETS 19.3%
American Capital, Ltd. ....... 7,694 $108,101
Ameriprise Financial, Inc. ... 4,650 100,440
Bank of New York Mellon
Corp. ..................... 5,699 185,787
Charles Schwab Corp.(The)..... 7,753 148,237
E*TRADE Financial Corp.*...... 54,762 99,667
Federated Investors,
Inc. -- Class B............ 6,702 162,188
Franklin Resources, Inc. ..... 1,945 132,260
Goldman Sachs Group,
Inc.(The).................. 1,667 154,198
Invesco Ltd. ................. 7,632 113,793
Janus Capital Group, Inc. .... 7,478 87,792
Legg Mason, Inc. ............. 4,978 110,462
Merrill Lynch & Co., Inc. .... 6,799 126,393
Morgan Stanley................ 7,983 139,463
Northern Trust Corp. ......... 2,484 139,874
State Street Corp. ........... 3,165 137,203
T. Rowe Price Group, Inc. .... 3,104 122,732
-----------
TOTAL CAPITAL MARKETS 2,068,590
-----------
COMMERCIAL BANKS 21.7%
BB&T Corp. ................... 4,742 170,001
Comerica, Inc. ............... 4,978 137,343
Fifth Third Bancorp........... 11,324 122,865
First Horizon National
Corp. ..................... 13,940 166,025
Huntington Bancshares, Inc. .. 17,113 161,718
KeyCorp....................... 13,856 169,459
M&T Bank Corp. ............... 2,083 168,931
Marshall & Ilsley Corp. ...... 7,729 139,354
National City Corp. .......... 40,409 109,104
PNC Financial Services Group,
Inc. ...................... 2,384 158,941
Regions Financial Corp. ...... 12,021 133,313
SunTrust Banks, Inc. ......... 3,363 134,991
U.S. Bancorp.................. 5,102 152,091
Wachovia Corp. ............... 12,224 78,356
Wells Fargo & Co. ............ 5,001 170,284
Zions Bancorp................. 4,008 152,745
-----------
TOTAL COMMERCIAL BANKS 2,325,521
-----------
CONSUMER FINANCE 5.3%
American Express Co. ......... 4,901 134,778
Capital One Financial Corp. .. 3,474 135,903
Discover Financial Services... 12,561 153,872
SLM Corp.*.................... 12,744 135,978
-----------
TOTAL CONSUMER FINANCE 560,531
-----------
DIVERSIFIED FINANCIAL SERVICES 12.9%
Bank of America Corp. ........ 5,862 141,684
CIT Group, Inc. .............. 17,476 72,351
Citigroup, Inc. .............. 10,649 145,359
CME Group, Inc. .............. 511 144,179
IntercontinentalExchange,
Inc.*...................... 2,459 210,392
JPMorgan Chase & Co. ......... 4,499 185,584
Leucadia National Corp. ...... 4,684 125,718
Moody's Corp. ................ 5,165 132,224
Nasdaq OMX Group (The)*....... 2,701 87,674
NYSE Euronext................. 4,498 135,750
-----------
TOTAL DIVERSIFIED FINANCIAL SERVICES 1,380,915
-----------
INSURANCE 22.8%
AFLAC, Inc. .................. 2,940 130,183
Allstate Corp. ............... 4,070 107,407
American International Group,
Inc. ...................... 49,443 94,436
Aon Corp. .................... 3,998 169,115
Assurant, Inc. ............... 3,618 92,187
Chubb Corp. .................. 3,162 163,855
Cincinnati Financial Corp. ... 6,042 157,032
Genworth Financial,
Inc. -- Class A............ 13,353 64,629
Hartford Financial Services
Group, Inc. ............... 3,208 33,107
Lincoln National Corp. ....... 3,576 61,650
Loews Corp. .................. 4,675 155,257
Marsh & McLennan Cos., Inc. .. 5,698 167,065
MBIA, Inc. ................... 14,050 138,112
MetLife, Inc. ................ 3,024 100,457
Principal Financial Group,
Inc. ...................... 4,156 78,922
Progressive Corp. ............ 11,049 157,669
Prudential Financial, Inc. ... 2,226 66,780
Torchmark Corp. .............. 3,139 131,116
Travelers Cos., Inc.(The)..... 3,742 159,222
Unum Group.................... 7,454 117,401
XL Capital, Ltd. -- Class A... 10,060 97,582
-----------
TOTAL INSURANCE 2,443,184
-----------
REAL ESTATE INVESTMENT TRUSTS (REITS) 14.6%
Apartment Investment &
Management Co. -- Class A.. 5,422 79,324
AvalonBay Communities, Inc. .. 1,880 133,518
Boston Properties, Inc. ...... 1,954 138,499
Developers Diversified Realty
Corp. ..................... 5,523 72,738
Equity Residential............ 3,930 137,275
General Growth Properties,
Inc. ...................... 9,290 38,461
HCP, Inc. .................... 4,670 139,773
Host Hotels & Resorts, Inc. .. 11,399 117,866
Kimco Realty Corp. ........... 4,554 102,829
Plum Creek Timber Co., Inc. .. 3,429 127,833
ProLogis...................... 4,531 63,434
Public Storage, Inc. ......... 1,877 152,975
Simon Property Group, Inc. ... 1,884 126,285
Vornado Realty Trust.......... 1,839 129,741
-----------
TOTAL REAL ESTATE INVESTMENT TRUSTS
(REITS) 1,560,551
-----------
REAL ESTATE MANAGEMENT & DEVELOPMENT 0.9%
CB Richard Ellis Group,
Inc. -- Class A*........... 13,489 94,558
-----------
TOTAL REAL ESTATE MANAGEMENT &
DEVELOPMENT 94,558
-----------
THRIFTS & MORTGAGE FINANCE 2.2%
Hudson City Bancorp, Inc. .... 9,325 175,403
Sovereign Bancorp, Inc.*...... 21,189 61,449
-----------
TOTAL THRIFTS & MORTGAGE FINANCE 236,852
-----------
TOTAL COMMON STOCKS
(Cost $13,733,558) 10,670,702
-----------
SHORT TERM INVESTMENTS 0.3%
SSgA Government Money Market
Fund....................... 33,725 33,725
-----------
TOTAL SHORT TERM INVESTMENTS
(Cost $33,725) 33,725
-----------
TOTAL INVESTMENTS 100.0%
(Cost $13,767,283) 10,704,427
-----------
OTHER ASSETS IN EXCESS OF
LIABILITIES--0.0%(A) 938
-----------
NET ASSETS--100.0% $10,705,365
- ------------------------------------------------------
</Table>
* Non-Income Producing Security.
(a) Amount represents less than 0.05% of net assets.
54
See Notes to Financial Statements.
RYDEX S&P EQUAL WEIGHT HEALTH CARE ETF
SCHEDULE OF INVESTMENTS October 31, 2008
- --------------------------------------------------------------------------------
<Table>
<Caption>
MARKET
SHARES VALUE
- -------------------------------------------------------
COMMON STOCKS 99.9%
BIOTECHNOLOGY 11.2%
Amgen, Inc.*.................. 18,930 $1,133,718
Biogen Idec, Inc.*............ 24,090 1,025,029
Celgene Corp.*................ 17,660 1,134,832
Genzyme Corp.*................ 14,120 1,029,066
Gilead Sciences, Inc.*........ 24,070 1,103,609
-----------
TOTAL BIOTECHNOLOGY 5,426,254
-----------
HEALTH CARE EQUIPMENT & SUPPLIES 21.9%
Baxter International, Inc. ... 17,090 1,033,774
Becton, Dickinson & Co. ...... 14,110 979,234
Boston Scientific Corp.*...... 84,100 759,423
C.R. Bard, Inc. .............. 11,480 1,013,110
Covidien, Ltd. ............... 20,560 910,603
Hospira, Inc.*................ 28,770 800,381
Intuitive Surgical, Inc.*..... 4,120 711,895
Medtronic, Inc. .............. 21,520 867,902
St Jude Medical, Inc.*........ 25,290 961,779
Stryker Corp. ................ 17,920 958,003
Varian Medical Systems,
Inc.*...................... 18,920 861,049
Zimmer Holdings, Inc.*........ 16,580 769,809
-----------
TOTAL HEALTH CARE EQUIPMENT & SUPPLIES 10,626,962
-----------
HEALTH CARE PROVIDERS & SERVICES 27.9%
Aetna, Inc. .................. 29,770 740,380
AmerisourceBergen Corp. ...... 28,930 904,641
Cardinal Health, Inc. ........ 22,170 846,894
CIGNA Corp. .................. 30,550 497,965
Coventry Health Care, Inc.*... 34,840 459,540
DaVita, Inc.*................. 20,260 1,149,755
Express Scripts, Inc.*........ 15,120 916,423
Humana, Inc.*................. 27,010 799,226
Laboratory Corp. of America
Holdings*.................. 15,440 949,405
McKesson Corp. ............... 20,540 755,666
Medco Health Solutions,
Inc.*...................... 23,420 888,789
Patterson Cos., Inc.*......... 36,090 914,160
Quest Diagnostics, Inc. ...... 20,190 944,892
Tenet Healthcare Corp.*....... 184,910 809,906
UnitedHealth Group, Inc. ..... 42,730 1,013,983
WellPoint, Inc.*.............. 23,840 926,661
-----------
TOTAL HEALTH CARE PROVIDERS & SERVICES 13,518,286
-----------
HEALTH CARE TECHNOLOGY 1.6%
IMS Health, Inc. ............. 55,740 799,311
-----------
TOTAL HEALTH CARE TECHNOLOGY 799,311
-----------
LIFE SCIENCES TOOLS & SERVICES 8.9%
Applied Biosystems Inc. ...... 31,760 979,161
Millipore Corp.*.............. 16,280 844,769
PerkinElmer, Inc. ............ 43,870 787,028
Thermo Fisher Scientific
Inc.*...................... 20,180 819,308
Waters Corp.*................. 20,450 895,710
-----------
TOTAL LIFE SCIENCES TOOLS & SERVICES 4,325,976
-----------
PHARMACEUTICALS 28.4%
Abbott Laboratories........... 19,520 1,076,528
Allergan, Inc. ............... 19,910 789,830
Barr Pharmaceuticals, Inc.*... 17,200 1,105,272
Bristol-Myers Squibb Co. ..... 54,300 1,115,865
Eli Lilly & Co. .............. 25,000 845,500
Forest Laboratories, Inc.*.... 40,500 940,815
Johnson & Johnson............. 16,070 985,734
King Pharmaceuticals, Inc.*... 110,660 972,701
Merck & Co., Inc. ............ 35,560 1,100,582
Mylan Inc.*................... 96,550 827,434
Pfizer, Inc. ................. 63,110 1,117,678
Schering-Plough Corp. ........ 61,710 894,178
Watson Pharmaceuticals,
Inc.*...................... 41,150 1,076,895
Wyeth......................... 29,540 950,597
-----------
TOTAL PHARMACEUTICALS 13,799,609
-----------
TOTAL COMMON STOCKS
(Cost $62,529,167) 48,496,398
-----------
SHORT TERM INVESTMENTS 0.1%
SSgA Government Money Market
Fund....................... 30,722 30,722
-----------
TOTAL SHORT TERM INVESTMENTS
(Cost $30,722) 30,722
-----------
TOTAL INVESTMENTS 100.0%
(Cost $62,559,889) 48,527,120
-----------
OTHER ASSETS IN EXCESS OF
LIABILITIES--0.0%(A) 9,482
-----------
NET ASSETS--100.0% $48,536,602
- -------------------------------------------------------
</Table>
*Non-Income Producing Security.
(a) Amount represents less than 0.05% of net assets.
55 ANNUAL REPORT
See Notes to Financial Statements.
RYDEX S&P EQUAL WEIGHT INDUSTRIALS ETF
SCHEDULE OF INVESTMENTS October 31, 2008
- --------------------------------------------------------------------------------
<Table>
<Caption>
MARKET
SHARES VALUE
- -----------------------------------------------------
COMMON STOCKS 99.8%
AEROSPACE & DEFENSE 20.9%
Boeing Co. ................... 2,971 $155,294
General Dynamics Corp. ....... 2,078 125,345
Goodrich Corp. ............... 3,723 136,113
Honeywell International,
Inc. ...................... 3,917 119,273
L-3 Communications Holdings,
Inc. ...................... 1,697 137,745
Lockheed Martin Corp. ........ 1,539 130,892
Northrop Grumman Corp. ....... 2,666 125,009
Precision Castparts Corp. .... 1,971 127,740
Raytheon Co. ................. 2,936 150,059
Rockwell Collins, Inc. ....... 3,515 130,863
United Technologies Corp. .... 2,758 151,580
----------
TOTAL AEROSPACE & DEFENSE 1,489,913
----------
AIR FREIGHT & LOGISTICS 8.0%
C.H. Robinson Worldwide,
Inc. ...................... 3,096 160,311
Expeditors International of
Washington, Inc. .......... 4,503 147,023
FedEx Corp. .................. 1,911 124,922
United Parcel Service,
Inc. -- Class B............ 2,604 137,439
----------
TOTAL AIR FREIGHT & LOGISTICS 569,695
----------
AIRLINES 1.8%
Southwest Airlines Co. ....... 11,124 131,041
----------
TOTAL AIRLINES 131,041
----------
BUILDING PRODUCTS 1.3%
Masco Corp. .................. 9,107 92,436
----------
TOTAL BUILDING PRODUCTS 92,436
----------
COMMERCIAL SERVICES & SUPPLIES 16.9%
Allied Waste Industries,
Inc.*...................... 15,062 156,946
Avery Dennison Corp. ......... 3,741 131,010
Cintas Corp. ................. 5,552 131,582
Equifax, Inc. ................ 5,075 132,356
Monster Worldwide, Inc.*...... 9,423 134,183
Pitney Bowes, Inc. ........... 4,858 120,381
R.R. Donnelley & Sons Co. .... 6,900 114,333
Robert Half International,
Inc. ...................... 6,633 125,165
Waste Management, Inc. ....... 5,068 158,274
----------
TOTAL COMMERCIAL SERVICES & SUPPLIES 1,204,230
----------
CONSTRUCTION & ENGINEERING 3.1%
Fluor Corp. .................. 2,901 115,837
Jacobs Engineering Group,
Inc.*...................... 2,877 104,809
----------
TOTAL CONSTRUCTION & ENGINEERING 220,646
----------
ELECTRICAL EQUIPMENT 5.4%
Cooper Industries,
Ltd. -- Class A............ 4,043 125,131
Emerson Electric Co. ......... 4,011 131,280
Rockwell Automation, Inc. .... 4,691 129,800
----------
TOTAL ELECTRICAL EQUIPMENT 386,211
----------
INDUSTRIAL CONGLOMERATES 6.9%
3M Co. ....................... 2,449 157,471
General Electric Co. ......... 6,884 134,307
Textron, Inc. ................ 5,271 93,297
Tyco International, Ltd. ..... 4,308 108,906
----------
TOTAL INDUSTRIAL CONGLOMERATES 493,981
----------
MACHINERY 21.8%
Caterpillar, Inc. ............ 2,646 100,998
Cummins, Inc. ................ 3,134 81,014
Danaher Corp. ................ 2,259 133,823
Deere & Co. .................. 2,788 107,505
Dover Corp. .................. 3,928 124,793
Eaton Corp. .................. 2,549 113,685
Flowserve Corp. .............. 79 4,497
Illinois Tool Works, Inc. .... 3,678 122,808
Ingersoll-Rand Co.,
Ltd. -- Class A............ 4,965 91,604
ITT Corp. .................... 2,964 131,898
Manitowoc Co., Inc. .......... 9,462 93,106
PACCAR, Inc. ................. 4,048 118,364
Pall Corp. ................... 5,047 133,291
Parker-Hannifin Corp. ........ 3,036 117,706
Terex Corp.*.................. 5,164 86,187
----------
TOTAL MACHINERY 1,561,279
----------
ROAD & RAIL 9.8%
Burlington Northern Santa Fe
Corp. ..................... 1,750 155,855
CSX Corp. .................... 3,036 138,806
Norfolk Southern Corp. ....... 2,499 149,790
Ryder System, Inc. ........... 2,509 99,407
Union Pacific Corp. .......... 2,328 155,440
----------
TOTAL ROAD & RAIL 699,298
----------
TRADING COMPANIES & DISTRIBUTORS 3.9%
Fastenal Co. ................. 3,216 129,476
W.W. Grainger, Inc. .......... 1,929 151,562
----------
TOTAL TRADING COMPANIES & DISTRIBUTORS 281,038
----------
TOTAL COMMON STOCKS
(Cost $9,877,271) 7,129,768
----------
SHORT TERM INVESTMENTS 0.1%
SSgA Government Money Market
Fund....................... 11,867 11,867
----------
TOTAL SHORT TERM INVESTMENTS
(Cost $11,867) 11,867
----------
TOTAL INVESTMENTS 99.9%
(Cost $9,889,138) 7,141,635
----------
OTHER ASSETS IN EXCESS OF
LIABILITIES--0.1% 4,174
----------
NET ASSETS--100.0% $7,145,809
- -----------------------------------------------------
</Table>
*Non-Income Producing Security.
56
See Notes to Financial Statements.
RYDEX S&P EQUAL WEIGHT MATERIALS ETF
SCHEDULE OF INVESTMENTS October 31, 2008
- --------------------------------------------------------------------------------
<Table>
<Caption>
MARKET
SHARES VALUE
- -----------------------------------------------------
COMMON STOCKS 99.7%
CHEMICALS 50.3%
Air Products & Chemicals,
Inc. ...................... 3,123 $181,540
Ashland, Inc. ................ 8,204 185,328
CF Industries Holdings,
Inc. ...................... 2,168 139,164
Dow Chemical Co.(The)......... 6,752 180,076
Du Pont (E.I.) de Nemours &
Co. ....................... 5,271 168,672
Eastman Chemical Co. ......... 4,062 164,064
Ecolab, Inc. ................. 4,951 184,474
Hercules, Inc. ............... 12,404 208,511
International Flavors &
Fragrances, Inc. .......... 5,652 180,186
Monsanto Co. ................. 2,144 190,773
PPG Industries, Inc. ......... 3,653 181,116
Praxair, Inc. ................ 2,925 190,564
Rohm & Haas Co. .............. 3,353 235,883
Sigma-Aldrich Corp. .......... 4,588 201,230
----------
TOTAL CHEMICALS 2,591,581
----------
CONSTRUCTION MATERIALS 3.2%
Vulcan Materials Co. ......... 3,049 165,500
----------
TOTAL CONSTRUCTION MATERIALS 165,500
----------
CONTAINERS & PACKAGING 15.6%
Ball Corp. ................... 5,819 199,010
Bemis Co., Inc. .............. 8,637 214,543
Pactiv Corp.*................. 8,854 208,600
Sealed Air Corp. ............. 10,638 179,995
----------
TOTAL CONTAINERS & PACKAGING 802,148
----------
METALS & MINING 21.9%
AK Steel Holding Corp. ....... 8,233 114,603
Alcoa, Inc. .................. 9,387 108,044
Allegheny Technologies,
Inc. ...................... 5,879 156,029
Freeport-McMoRan Copper &
Gold, Inc. ................ 3,560 103,596
Newmont Mining Corp. ......... 6,081 160,174
Nucor Corp. .................. 5,193 210,368
Titanium Metals Corp. ........ 19,951 185,744
United States Steel Corp. .... 2,531 93,343
----------
TOTAL METALS & MINING 1,131,901
----------
PAPER & FOREST PRODUCTS 8.7%
International Paper Co. ...... 8,834 152,121
MeadWestvaco Corp. ........... 9,792 137,382
Weyerhaeuser Co. ............. 4,168 159,301
----------
TOTAL PAPER & FOREST PRODUCTS 448,804
----------
TOTAL COMMON STOCKS
(Cost $7,303,322) 5,139,934
----------
SHORT TERM INVESTMENTS 0.2%
SSgA Government Money Market
Fund....................... 11,609 11,609
----------
TOTAL SHORT TERM INVESTMENTS
(Cost $11,609) 11,609
----------
TOTAL INVESTMENTS 99.9%
(Cost $7,314,931) 5,151,543
----------
OTHER ASSETS IN EXCESS OF
LIABILITIES--0.1% 3,464
----------
NET ASSETS--100.0% $5,155,007
- -----------------------------------------------------
</Table>
*Non-Income Producing Security.
57 ANNUAL REPORT
See Notes to Financial Statements.
RYDEX S&P EQUAL WEIGHT TECHNOLOGY ETF
SCHEDULE OF INVESTMENTS October 31, 2008
- --------------------------------------------------------------------------------
<Table>
<Caption>
MARKET
SHARES VALUE
- -----------------------------------------------------
COMMON STOCKS 99.9%
COMMUNICATIONS EQUIPMENT 13.1%
Ciena Corp.*.................. 13,693 $131,590
Cisco Systems, Inc.*.......... 5,991 106,460
Corning, Inc. ................ 8,592 93,051
Harris Corp. ................. 2,873 103,284
JDS Uniphase Corp.*........... 16,061 87,693
Juniper Networks, Inc.*....... 5,253 98,441
Motorola, Inc. ............... 19,228 103,255
QUALCOMM, Inc. ............... 2,913 111,452
Tellabs, Inc.*................ 34,729 147,251
----------
TOTAL COMMUNICATIONS EQUIPMENT 982,477
----------
COMPUTERS & PERIPHERALS 14.3%
Apple, Inc.*.................. 1,020 109,742
Dell, Inc.*................... 7,756 94,235
EMC Corp.*.................... 10,980 129,344
Hewlett-Packard Co. .......... 2,876 110,093
International Business
Machines Corp. ............ 1,183 109,984
Lexmark International,
Inc. -- Class A*........... 4,154 107,298
NetApp, Inc.*................. 6,647 89,934
QLogic Corp.*................. 7,880 94,718
SanDisk Corp.*................ 6,000 53,340
Sun Microsystems, Inc.*....... 16,887 77,680
Teradata Corp.*............... 6,101 93,894
----------
TOTAL COMPUTERS & PERIPHERALS 1,070,262
----------
ELECTRONIC EQUIPMENT & INSTRUMENTS 6.3%
Agilent Technologies, Inc.*... 4,344 96,393
Amphenol Corp. -- Class A..... 3,484 99,817
Jabil Circuit, Inc. .......... 11,954 100,533
Molex, Inc. .................. 5,511 79,414
Tyco Electronics, Ltd. ....... 5,126 99,649
----------
TOTAL ELECTRONIC EQUIPMENT & INSTRUMENTS 475,806
----------
INTERNET SOFTWARE & SERVICES 6.9%
Akamai Technologies, Inc.*.... 7,996 114,983
eBay, Inc.*................... 5,875 89,711
Google, Inc. -- Class A*...... 307 110,324
VeriSign, Inc.*............... 5,520 117,024
Yahoo!, Inc.*................. 6,414 82,227
----------
TOTAL INTERNET SOFTWARE & SERVICES 514,269
----------
IT SERVICES 15.4%
Affiliated Computer Services,
Inc. -- Class A*........... 2,727 111,807
Automatic Data Processing,
Inc. ...................... 3,109 108,660
Cognizant Technology Solutions
Corp. -- Class A*.......... 5,700 109,440
Computer Sciences Corp.*...... 3,183 95,999
Convergys Corp.*.............. 8,871 68,218
Fidelity National Information
Services, Inc. ............ 6,687 100,907
Fiserv, Inc.*................. 2,684 89,538
Mastercard, Inc. -- Class A... 655 96,822
Paychex, Inc. ................ 4,224 120,553
Total System Services, Inc. .. 7,749 106,471
Unisys Corp.*................. 42,080 63,962
Western Union Co. ............ 5,394 82,312
----------
TOTAL IT SERVICES 1,154,689
----------
OFFICE ELECTRONICS 1.2%
Xerox Corp. .................. 10,810 86,696
----------
TOTAL OFFICE ELECTRONICS 86,696
----------
SEMICONDUCTORS & SEMICONDUCTOR EQUIPMENT 25.0%
Advanced Micro Devices,
Inc.*...................... 25,571 89,498
Altera Corp. ................. 6,289 109,114
Analog Devices, Inc. ......... 4,831 103,190
Applied Materials, Inc. ...... 8,469 109,335
Broadcom Corp. -- Class A*.... 6,602 112,762
Intel Corp. .................. 7,004 112,064
KLA-Tencor Corp. ............. 4,009 93,209
Linear Technology Corp. ...... 4,288 97,252
LSI Corp.*.................... 22,956 88,381
MEMC Electronic Materials,
Inc.*...................... 4,522 83,114
Microchip Technology, Inc. ... 4,468 110,047
Micron Technology, Inc.*...... 32,280 152,039
National Semiconductor
Corp. ..................... 7,742 101,962
Novellus Systems, Inc.*....... 6,467 102,179
NVIDIA Corp.*................. 12,511 109,596
Teradyne, Inc.*............... 15,817 80,667
Texas Instruments, Inc. ...... 5,967 116,715
Xilinx, Inc. ................. 5,638 103,852
----------
TOTAL SEMICONDUCTORS & SEMICONDUCTOR
EQUIPMENT 1,874,976
----------
SOFTWARE 17.7%
Adobe Systems, Inc.*.......... 3,423 91,189
Autodesk, Inc.*............... 4,082 86,988
BMC Software, Inc.*........... 4,238 109,425
CA, Inc. ..................... 6,366 113,315
Citrix Systems, Inc.*......... 4,951 127,587
Compuware Corp.*.............. 13,791 87,987
Electronic Arts, Inc.*........ 3,072 69,980
Intuit, Inc.*................. 4,462 111,818
Microsoft Corp. .............. 5,340 119,242
Novell, Inc.*................. 24,558 114,440
Oracle Corp.*................. 7,297 133,462
Salesforce.com, Inc.*......... 2,445 75,697
Symantec Corp.*............... 6,992 87,959
----------
TOTAL SOFTWARE 1,329,089
----------
TOTAL COMMON STOCKS
(Cost $14,024,184) 7,488,264
----------
SHORT TERM INVESTMENTS 0.1%
SSgA Government Money Market
Fund....................... 7,797 7,797
----------
TOTAL SHORT TERM INVESTMENTS
(Cost $7,797) 7,797
----------
TOTAL INVESTMENTS 100.0%
(Cost $14,031,981) 7,496,061
----------
LIABILITIES IN EXCESS OF OTHER
ASSETS--0.0%(a) (948)
----------
NET ASSETS--100.0% $7,495,113
- -----------------------------------------------------
</Table>
*Non-Income Producing Security.
(a) Amount represents less than 0.05% of net assets.
58
See Notes to Financial Statements.
RYDEX S&P EQUAL WEIGHT UTILITIES ETF
SCHEDULE OF INVESTMENTS October 31, 2008
- --------------------------------------------------------------------------------
<Table>
<Caption>
MARKET
SHARES VALUE
- -----------------------------------------------------
COMMON STOCKS 99.7%
DIVERSIFIED TELECOMMUNICATION SERVICES 15.6%
AT&T, Inc. ................... 4,200 $112,434
CenturyTel, Inc. ............. 3,210 80,603
Embarq Corp. ................. 2,790 83,700
Frontier Communications
Corp. ..................... 10,390 79,068
Qwest Communications
International, Inc. ....... 33,530 95,896
Verizon Communications,
Inc. ...................... 3,750 111,262
Windstream Corp. ............. 10,590 79,531
----------
TOTAL DIVERSIFIED TELECOMMUNICATION
SERVICES 642,494
----------
ELECTRIC UTILITIES 33.8%
Allegheny Energy, Inc. ....... 3,300 99,495
American Electric Power Co.,
Inc. ...................... 3,410 111,268
Duke Energy Corp. ............ 6,570 107,617
Edison International.......... 3,050 108,550
Entergy Corp. ................ 1,400 109,270
Exelon Corp. ................. 1,910 103,598
FirstEnergy Corp. ............ 1,830 95,453
FPL Group, Inc. .............. 2,320 109,597
Pepco Holdings, Inc. ......... 5,420 111,923
Pinnacle West Capital Corp. .. 3,450 109,192
PPL Corp. .................... 3,400 111,588
Progress Energy, Inc. ........ 2,770 109,055
Southern Co. ................. 3,090 106,111
----------
TOTAL ELECTRIC UTILITIES 1,392,717
----------
GAS UTILITIES 5.2%
Nicor, Inc. .................. 2,510 115,987
Questar Corp. ................ 2,820 97,177
----------
TOTAL GAS UTILITIES 213,164
----------
INDEPENDENT POWER PRODUCERS & ENERGY TRADERS 7.9%
AES Corp.(The)*............... 10,150 80,896
Constellation Energy Group,
Inc. ...................... 5,040 122,018
Dynegy, Inc. -- Class A*...... 33,260 121,066
----------
TOTAL INDEPENDENT POWER PRODUCERS &
ENERGY TRADERS 323,980
----------
MULTI-UTILITIES 33.3%
Ameren Corp. ................. 2,950 95,728
CenterPoint Energy, Inc. ..... 8,730 100,570
CMS Energy Corp. ............. 9,830 100,757
Consolidated Edison, Inc. .... 2,660 115,231
Dominion Resources, Inc. ..... 2,920 105,938
DTE Energy Co. ............... 2,900 102,370
Integrys Energy Group, Inc. .. 2,370 112,978
NiSource, Inc. ............... 7,970 103,291
PG&E Corp. ................... 3,030 111,110
Public Service Enterprise
Group, Inc. ............... 3,550 99,932
Sempra Energy................. 2,360 100,512
TECO Energy, Inc. ............ 7,290 84,127
Wisconsin Energy Corp. ....... 900 39,150
Xcel Energy, Inc. ............ 5,610 97,726
----------
TOTAL MULTI-UTILITIES 1,369,420
----------
WIRELESS TELECOMMUNICATION SERVICES 3.9%
American Tower Corp. -- Class
A*......................... 3,130 101,131
Sprint Nextel Corp. .......... 19,440 60,847
----------
TOTAL WIRELESS TELECOMMUNICATION
SERVICES 161,978
----------
TOTAL COMMON STOCKS
(Cost $5,732,679) 4,103,753
----------
SHORT TERM INVESTMENTS 0.5%
SSgA Government Money Market
Fund....................... 22,350 22,350
----------
TOTAL SHORT TERM INVESTMENTS
(Cost $22,350) 22,350
----------
TOTAL INVESTMENTS 100.2%
(Cost $5,755,029) 4,126,103
----------
LIABILITIES IN EXCESS OF OTHER
ASSETS--(0.2)% (8,352)
----------
NET ASSETS--100.0% $4,117,751
- -----------------------------------------------------
</Table>
* Non-Income Producing Security.
59 ANNUAL REPORT
See Notes to Financial Statements.
STATEMENTS OF ASSETS AND LIABILITIES October 31, 2008
- --------------------------------------------------------------------------------
<Table>
<Caption>
RYDEX S&P RYDEX S&P RYDEX S&P RYDEX S&P
500 PURE 500 PURE MIDCAP 400 MIDCAP 400
VALUE ETF GROWTH ETF PURE VALUE ETF PURE GROWTH ETF
------------ ------------ -------------- ---------------
ASSETS
Investments at Market Value............ $ 17,947,704 $ 24,386,597 $10,126,250 $17,585,216
Cash................................. -- -- 5,600 --
Receivables:
Investments Sold..................... -- -- 62,247 188,082
Dividends............................ 51,752 19,966 23,500 3,857
------------ ------------ ----------- -----------
TOTAL ASSETS...................... 17,999,456 24,406,563 10,211,997 17,777,155
------------ ------------ ----------- -----------
LIABILITIES
Payables:
Investments Purchased................ -- -- 83,044 174,125
Overdraft............................ -- -- -- 889
Accrued Management Fees.............. 5,876 8,777 3,417 6,297
------------ ------------ ----------- -----------
TOTAL LIABILITIES................. 5,876 8,777 86,461 181,311
------------ ------------ ----------- -----------
NET ASSETS............................. $ 17,993,580 $ 24,397,786 $10,125,536 $17,595,844
============ ============ =========== ===========
NET ASSETS CONSIST OF:
Paid-in Capital........................ $ 33,598,265 $ 39,645,365 $18,217,411 $27,732,063
Undistributed Net Investment Income.... 13,722 18,881 -- 93
Accumulated Net Realized Gain (Loss) on
Investment Securities................ (2,968,885) (770,754) (1,219,254) (1,048,339)
Net Unrealized Depreciation on
Investment Securities................ (12,649,522) (14,495,706) (6,872,621) (9,087,973)
------------ ------------ ----------- -----------
NET ASSETS............................. $ 17,993,580 $ 24,397,786 $10,125,536 $17,595,844
============ ============ =========== ===========
Shares Outstanding (Unlimited Shares
Authorized), No Par Value............ 1,000,989 1,000,097 500,168 450,011
============ ============ =========== ===========
Net Asset Value, Offering Price and
Repurchase Price Per Share........... $ 17.98 $ 24.40 $ 20.24 $ 39.10
============ ============ =========== ===========
Total Cost of Investments.............. $ 30,597,226 $ 38,882,303 $16,998,871 $26,673,189
============ ============ =========== ===========
</Table>
60
See Notes to Financial Statements.
STATEMENTS OF ASSETS AND LIABILITIES (continued) October 31, 2008
- --------------------------------------------------------------------------------
<Table>
<Caption>
RYDEX S&P RYDEX S&P RYDEX S&P EQUAL RYDEX S&P EQUAL
SMALLCAP 600 SMALLCAP 600 WEIGHT CONSUMER WEIGHT CONSUMER
PURE VALUE ETF PURE GROWTH ETF DISCRETIONARY ETF STAPLES ETF
-------------- --------------- ----------------- ---------------
ASSETS
Investments at Market Value......... $25,507,194 $ 7,247,602 $ 3,720,820 $10,359,663
Receivables:
Investments Sold.................. 11,093 81,892 -- 157,871
Dividends......................... 27,212 2,086 3,460 12,008
----------- ----------- ----------- -----------
TOTAL ASSETS................... 25,545,499 7,331,580 3,724,280 10,529,542
----------- ----------- ----------- -----------
LIABILITIES
Payables:
Investments Purchased............. -- 71,996 -- 157,213
Overdraft......................... 11,093 -- -- --
Accrued Management Fees........... 7,616 2,198 2,014 4,490
----------- ----------- ----------- -----------
TOTAL LIABILITIES.............. 18,709 74,194 2,014 161,703
----------- ----------- ----------- -----------
NET ASSETS.......................... $25,526,790 $ 7,257,386 $ 3,722,266 $10,367,839
=========== =========== =========== ===========
NET ASSETS CONSIST OF:
Paid-in Capital..................... $39,836,934 $10,178,851 $ 8,285,157 $11,996,093
Undistributed Net Investment
Income............................ 12,181 192 2,465 11,681
Accumulated Net Realized Gain (Loss)
on Investment Securities.......... (4,601,117) (281,311) (1,292,320) (231,828)
Net Unrealized Depreciation on
Investment Securities............. (9,721,208) (2,640,346) (3,273,036) (1,408,107)
----------- ----------- ----------- -----------
NET ASSETS.......................... $25,526,790 $ 7,257,386 $ 3,722,266 $10,367,839
=========== =========== =========== ===========
Shares Outstanding (Unlimited Shares
Authorized), No Par Value......... 1,100,039 250,004 150,000 250,000
=========== =========== =========== ===========
Net Asset Value, Offering Price and
Repurchase Price Per Share........ $ 23.21 $ 29.03 $ 24.82 $ 41.47
=========== =========== =========== ===========
Total Cost of Investments........... $35,228,402 $ 9,887,948 $ 6,993,856 $11,767,770
=========== =========== =========== ===========
</Table>
61 ANNUAL REPORT
See Notes to Financial Statements.
STATEMENTS OF ASSETS AND LIABILITIES (continued) October 31, 2008
- --------------------------------------------------------------------------------
<Table>
<Caption>
RYDEX S&P RYDEX S&P RYDEX S&P RYDEX S&P
EQUAL WEIGHT EQUAL WEIGHT EQUAL WEIGHT EQUAL WEIGHT
ENERGY ETF FINANCIALS ETF HEALTH CARE ETF INDUSTRIALS ETF
------------ -------------- --------------- ---------------
ASSETS
Investments at Market Value............. $ 5,957,354 $10,704,427 $ 48,527,120 $ 7,141,635
Receivables:
Investments Sold...................... -- 47,019 -- --
Dividends............................. 2,823 18,612 31,943 7,037
----------- ----------- ------------ -----------
TOTAL ASSETS....................... 5,960,177 10,770,058 48,559,063 7,148,672
----------- ----------- ------------ -----------
LIABILITIES
Payables:
Investments Purchased................. -- 60,825 -- --
Accrued Management Fees............... 2,626 3,868 22,461 2,863
----------- ----------- ------------ -----------
TOTAL LIABILITIES.................. 2,626 64,693 22,461 2,863
----------- ----------- ------------ -----------
NET ASSETS.............................. $ 5,957,551 $10,705,365 $ 48,536,602 $ 7,145,809
=========== =========== ============ ===========
NET ASSETS CONSIST OF:
Paid-in Capital......................... $ 9,533,229 $15,829,524 $ 63,574,028 $ 9,926,511
Undistributed Net Investment Income..... 937 -- 10,963 1,505
Accumulated Net Realized Gain (Loss) on
Investment Securities................. (46,134) (2,061,303) (1,015,620) (34,704)
Net Unrealized Depreciation on
Investment Securities................. (3,530,481) (3,062,856) (14,032,769) (2,747,503)
----------- ----------- ------------ -----------
NET ASSETS.............................. $ 5,957,551 $10,705,365 $ 48,536,602 $ 7,145,809
=========== =========== ============ ===========
Shares Outstanding (Unlimited Shares
Authorized), No Par Value............. 150,005 500,000 1,150,000 200,000
=========== =========== ============ ===========
Net Asset Value, Offering Price and
Repurchase Price Per Share............ $ 39.72 $ 21.41 $ 42.21 $ 35.73
=========== =========== ============ ===========
Total Cost of Investments............... $ 9,487,835 $13,767,283 $ 62,559,889 $ 9,889,138
=========== =========== ============ ===========
</Table>
62
See Notes to Financial Statements.
STATEMENTS OF ASSETS AND LIABILITIES (concluded) October 31, 2008
- --------------------------------------------------------------------------------
<Table>
<Caption>
RYDEX S&P RYDEX S&P RYDEX S&P
EQUAL WEIGHT EQUAL WEIGHT EQUAL WEIGHT
MATERIALS ETF TECHNOLOGY ETF UTILITIES ETF
------------- -------------- -------------
ASSETS
Investments at Market Value....................... $ 5,151,543 $ 7,496,061 $ 4,126,103
Receivables:
Investments Sold................................ -- -- 19,679
Dividends....................................... 5,359 3,063 13,891
----------- ----------- -----------
TOTAL ASSETS................................. 5,156,902 7,499,124 4,159,673
----------- ----------- -----------
LIABILITIES
Payables:
Investments Purchased........................... -- -- 39,420
Accrued Management Fees......................... 1,895 4,011 2,502
----------- ----------- -----------
TOTAL LIABILITIES............................ 1,895 4,011 41,922
----------- ----------- -----------
NET ASSETS........................................ $ 5,155,007 $ 7,495,113 $ 4,117,751
=========== =========== ===========
NET ASSETS CONSIST OF:
Paid-in Capital................................... $ 7,573,651 $14,742,169 $ 5,804,560
Undistributed Net Investment Income............... 5,332 -- 17,521
Accumulated Net Realized Gain (Loss) on Investment
Securities...................................... (260,588) (711,136) (75,404)
Net Unrealized Depreciation on Investment
Securities...................................... (2,163,388) (6,535,920) (1,628,926)
----------- ----------- -----------
NET ASSETS........................................ $ 5,155,007 $ 7,495,113 $ 4,117,751
=========== =========== ===========
Shares Outstanding (Unlimited Shares Authorized),
No Par Value.................................... 150,000 250,000 100,000
=========== =========== ===========
Net Asset Value, Offering Price and Repurchase
Price Per Share................................. $ 34.37 $ 29.98 $ 41.18
=========== =========== ===========
Total Cost of Investments......................... $ 7,314,931 $14,031,981 $ 5,755,029
=========== =========== ===========
</Table>
63 ANNUAL REPORT
See Notes to Financial Statements.
STATEMENTS OF OPERATIONS For the Year Ended
October 31, 2008
- --------------------------------------------------------------------------------
<Table>
<Caption>
RYDEX S&P RYDEX S&P RYDEX S&P RYDEX S&P
500 PURE 500 PURE MIDCAP 400 MIDCAP 400
VALUE ETF GROWTH ETF PURE VALUE ETF PURE GROWTH ETF
------------ ------------ -------------- ---------------
INVESTMENT INCOME
Dividends............................ $ 1,076,553 $ 424,914 $ 444,009 $ 82,473
------------ ------------ ----------- ------------
EXPENSES
Management Fee....................... 96,632 161,685 49,014 73,904
------------ ------------ ----------- ------------
Net Investment Income.................. 979,921 263,229 394,995 8,569
------------ ------------ ----------- ------------
REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENTS
Net Realized Gain (Loss) From:
Investments.......................... (3,206,740) (880,834) (1,263,527) (1,273,983)
In-kind Redemptions.................. (792,946) 986,753 (171,083) 1,215,031
------------ ------------ ----------- ------------
Net Realized Gain (Loss).......... (3,999,686) 105,919 (1,434,610) (58,952)
------------ ------------ ----------- ------------
Net Change in Unrealized
Appreciation/Depreciation on:
Investment Securities................ (12,417,041) (19,825,715) (6,410,678) (10,136,135)
------------ ------------ ----------- ------------
Net Realized and Unrealized Loss on
Investments.......................... (16,416,727) (19,719,796) (7,845,288) (10,195,087)
------------ ------------ ----------- ------------
NET (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS....... $(15,436,806) $(19,456,567) $(7,450,293) $(10,186,518)
============ ============ =========== ============
</Table>
64
See Notes to Financial Statements.
STATEMENTS OF OPERATIONS (continued) For the Year Ended
October 31, 2008
- --------------------------------------------------------------------------------
<Table>
<Caption>
RYDEX S&P RYDEX S&P RYDEX S&P EQUAL RYDEX S&P EQUAL
SMALLCAP 600 SMALLCAP 600 WEIGHT CONSUMER WEIGHT CONSUMER
PURE VALUE ETF PURE GROWTH ETF DISCRETIONARY ETF STAPLES ETF
-------------- --------------- ----------------- ---------------
INVESTMENT INCOME
Dividends....................... $ 729,200 $ 50,405 $ 247,892 $ 223,838
Foreign Taxes Withheld.......... (904) -- -- --
------------ ----------- ----------- -----------
Total Income................. 728,296 50,405 247,892 223,838
------------ ----------- ----------- -----------
EXPENSES
Management Fee.................. 88,305 22,439 63,937 49,232
Other Fees...................... 247 -- -- --
------------ ----------- ----------- -----------
Total Expenses............... 88,552 22,439 63,937 49,232
------------ ----------- ----------- -----------
Net Investment Income............. 639,744 27,966 183,955 174,606
------------ ----------- ----------- -----------
REALIZED AND UNREALIZED GAIN
(LOSS) ON INVESTMENTS
Net Realized Gain (Loss) From:
Investments..................... (4,430,566) (274,420) (1,554,884) (161,705)
In-kind Redemptions............. 607,023 573,585 (2,090,258) 203,178
------------ ----------- ----------- -----------
Net Realized Gain (Loss)..... (3,823,543) 299,165 (3,645,142) 41,473
------------ ----------- ----------- -----------
Net Change in Unrealized
Appreciation/Depreciation on:
Investment Securities........... (7,000,618) (3,549,666) (2,318,744) (2,115,793)
------------ ----------- ----------- -----------
Net Realized and Unrealized Loss
on Investments.................. (10,824,161) (3,250,501) (5,963,886) (2,074,320)
------------ ----------- ----------- -----------
NET (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS.. $(10,184,417) $(3,222,535) $(5,779,931) $(1,899,714)
============ =========== =========== ===========
</Table>
65 ANNUAL REPORT
See Notes to Financial Statements.
STATEMENTS OF OPERATIONS (continued) For the Year Ended
October 31, 2008
- --------------------------------------------------------------------------------
<Table>
<Caption>
RYDEX S&P RYDEX S&P RYDEX S&P RYDEX S&P
EQUAL WEIGHT EQUAL WEIGHT EQUAL WEIGHT EQUAL WEIGHT
ENERGY ETF FINANCIALS ETF HEATH CARE ETF INDUSTRIALS ETF
------------ -------------- -------------- ---------------
INVESTMENT INCOME
Dividends............................ $ 128,732 $ 220,784 $ 302,474 $ 155,478
----------- ----------- ------------ -----------
EXPENSES
Management Fee....................... 64,256 32,067 199,367 46,667
----------- ----------- ------------ -----------
Net Investment Income.................. 64,476 188,717 103,107 108,811
----------- ----------- ------------ -----------
REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENTS
Net Realized Gain (Loss) From:
Investments.......................... 444,759 (2,058,581) (1,176,641) 170,571
In-kind Redemptions.................. 1,490,700 -- 1,440,772 870,771
----------- ----------- ------------ -----------
Net Realized Gain (Loss).......... 1,935,459 (2,058,581) 264,131 1,041,342
----------- ----------- ------------ -----------
Net Change in Unrealized
Appreciation/Depreciation on:
Investment Securities................ (6,142,032) (2,732,751) (13,885,432) (4,023,914)
----------- ----------- ------------ -----------
Net Realized and Unrealized Loss on
Investments.......................... (4,206,573) (4,791,332) (13,621,301) (2,982,572)
----------- ----------- ------------ -----------
NET (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS....... $(4,142,097) $(4,602,615) $(13,518,194) $(2,873,761)
=========== =========== ============ ===========
</Table>
66
See Notes to Financial Statements.
STATEMENTS OF OPERATIONS (concluded) For the Year Ended
October 31, 2008
- --------------------------------------------------------------------------------
<Table>
<Caption>
RYDEX S&P RYDEX S&P RYDEX S&P
EQUAL WEIGHT EQUAL WEIGHT EQUAL WEIGHT
MATERIALS ETF TECHNOLOGY ETF UTILITIES ETF
------------- -------------- -------------
INVESTMENT INCOME
Dividends...................................... $ 186,097 $ 123,222 $ 214,696
----------- ----------- -----------
EXPENSES
Management Fee................................. 29,264 96,926 28,349
----------- ----------- -----------
Net Investment Income............................ 156,833 26,296 186,347
----------- ----------- -----------
REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENTS
Net Realized Gain (Loss) From:
Investments.................................... (257,285) (929,134) (74,875)
In-kind Redemptions............................ 317,838 (405,169) (351,808)
----------- ----------- -----------
Net Realized Gain (Loss).................... 60,553 (1,334,303) (426,683)
----------- ----------- -----------
Net Change in Unrealized
Appreciation/Depreciation on:
Investment Securities.......................... (2,701,829) (7,030,476) (2,110,863)
----------- ----------- -----------
Net Realized and Unrealized Loss on Investments.. (2,641,276) (8,364,779) (2,537,546)
----------- ----------- -----------
NET (DECREASE) IN NET ASSETS RESULTING FROM
OPERATIONS................................ $(2,484,443) $(8,338,483) $(2,351,199)
=========== =========== ===========
</Table>
67 ANNUAL REPORT
See Notes to Financial Statements.
STATEMENTS OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
<Table>
<Caption>
RYDEX S&P 500 PURE VALUE ETF RYDEX S&P 500 PURE GROWTH ETF
----------------------------------- -----------------------------------
YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED
OCTOBER 31, 2008 OCTOBER 31, 2007 OCTOBER 31, 2008 OCTOBER 31, 2007
---------------- ---------------- ---------------- ----------------
OPERATIONS
Net Investment Income............ $ 979,921 $ 782,512 $ 263,229 $ 287,779
Net Realized Gain (Loss)......... (3,999,686) 1,498,971 105,919 (303,897)
Net Change in Unrealized
Appreciation/Depreciation on
Investments................... (12,417,041) (1,243,457) (19,825,715) 4,763,550
------------ ------------ ------------ -----------
Net Increase (Decrease) in Net
Assets Resulting From
Operations.................... (15,436,806) 1,038,026 (19,456,567) 4,747,432
------------ ------------ ------------ -----------
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net Investment Income............ (996,902) (763,947) (259,562) (279,098)
------------ ------------ ------------ -----------
SHAREHOLDER TRANSACTIONS
Proceeds From Shares Sold........ 9,326,454 30,026,191 15,193,116 41,220,808
Value of Shares Reinvested....... 21,040 6,721 1,902 1,567
Value of Shares Repurchased...... (14,555,071) (11,904,315) (34,421,140) --
------------ ------------ ------------ -----------
Net Increase (Decrease) in Net
Assets Resulting From Share
Transactions.................. (5,207,577) 18,128,597 (19,226,122) 41,222,375
------------ ------------ ------------ -----------
Increase (Decrease) in Net
Assets...................... (21,641,285) 18,402,676 (38,942,251) 45,690,709
NET ASSETS--BEGINNING OF PERIOD.... 39,634,865 21,232,189 63,340,037 17,649,328
------------ ------------ ------------ -----------
NET ASSETS--END OF PERIOD(1)....... $ 17,993,580 $ 39,634,865 $ 24,397,786 $63,340,037
============ ============ ============ ===========
(1) Including Undistributed Net
Investment Income................ $ 13,722 $ 71,041 $ 18,881 $ 15,214
============ ============ ============ ===========
CHANGES IN SHARES OUTSTANDING:
Shares Sold...................... 350,000 850,000 400,000 1,100,000
Shares Reinvested................ 797 192 56 41
Shares Repurchased............... (500,000) (350,000) (1,000,000) --
Shares Outstanding, Beginning of
Period........................ 1,150,192 650,000 1,600,041 500,000
------------ ------------ ------------ -----------
Shares Outstanding, End of
Period........................ 1,000,989 1,150,192 1,000,097 1,600,041
============ ============ ============ ===========
</Table>
68
See Notes to Financial Statements.
STATEMENTS OF CHANGES IN NET ASSETS (continued)
- --------------------------------------------------------------------------------
<Table>
<Caption>
RYDEX S&P MIDCAP 400 PURE GROWTH
RYDEX S&P MIDCAP 400 PURE VALUE ETF ETF
----------------------------------- -----------------------------------
YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED
OCTOBER 31, 2008 OCTOBER 31, 2007 OCTOBER 31, 2008 OCTOBER 31, 2007
---------------- ---------------- ---------------- ----------------
OPERATIONS
Net Investment Income................ $ 394,995 $ 431,034 $ 8,569 $ 121,930
Net Realized Gain (Loss)............. (1,434,610) 1,170,195 (58,952) 1,847,506
Net Change in Unrealized
Appreciation/Depreciation on
Investments....................... (6,410,678) (1,114,000) (10,136,135) 2,040,810
------------ ------------ ------------ ------------
Net Increase (Decrease) in Net Assets
Resulting From Operations......... (7,450,293) 487,229 (10,186,518) 4,010,246
------------ ------------ ------------ ------------
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net Investment Income................ (365,468) (425,129) (14,295) (118,480)
Capital.............................. (3,840) -- -- --
Net Realized Gains................... -- -- -- (64,208)
------------ ------------ ------------ ------------
Decrease in Net Assets From
Distributions to Shareholders..... (369,308) (425,129) (14,295) (182,688)
------------ ------------ ------------ ------------
SHAREHOLDER TRANSACTIONS
Proceeds From Shares Sold............ 2,929,138 20,533,730 31,994,754 8,630,176
Value of Shares Reinvested........... 2,678 2,802 170 432
Value of Shares Repurchased.......... (6,444,307) (14,113,540) (25,112,473) (14,090,678)
------------ ------------ ------------ ------------
Net Increase (Decrease) in Net Assets
Resulting From Share
Transactions...................... (3,512,491) 6,422,992 6,882,451 (5,460,070)
------------ ------------ ------------ ------------
Increase (Decrease) in Net
Assets.......................... (11,332,092) 6,485,092 (3,318,362) (1,632,512)
NET ASSETS--BEGINNING OF PERIOD........ 21,457,628 14,972,536 20,914,206 22,546,718
------------ ------------ ------------ ------------
NET ASSETS--END OF PERIOD(1)........... $ 10,125,536 $ 21,457,628 $ 17,595,844 $ 20,914,206
============ ============ ============ ============
(1) Including Undistributed Net
Investment Income.................... $ -- $ 7,853 $ 93 $ 5,819
============ ============ ============ ============
CHANGES IN SHARES OUTSTANDING:
Shares Sold.......................... 100,000 550,000 600,000 150,000
Shares Reinvested.................... 90 78 3 8
Shares Repurchased................... (200,000) (400,000) (500,000) (250,000)
Shares Outstanding, Beginning of
Period............................ 600,078 450,000 350,008 450,000
------------ ------------ ------------ ------------
Shares Outstanding, End of Period.... 500,168 600,078 450,011 350,008
============ ============ ============ ============
</Table>
69 ANNUAL REPORT
See Notes to Financial Statements.
STATEMENTS OF CHANGES IN NET ASSETS (continued)
- --------------------------------------------------------------------------------
<Table>
<Caption>
RYDEX S&P SMALLCAP 600 RYDEX S&P SMALLCAP 600
PURE VALUE ETF PURE GROWTH ETF
----------------------------------- -----------------------------------
YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED
OCTOBER 31, 2008 OCTOBER 31, 2007 OCTOBER 31, 2008 OCTOBER 31, 2007
---------------- ---------------- ---------------- ----------------
OPERATIONS
Net Investment Income................ $ 639,744 $ 341,437 $ 27,966 $ 189
Net Realized Gain (Loss)............. (3,823,543) (164,386) 299,165 470,249
Net Change in Unrealized
Appreciation/Depreciation on
Investments....................... (7,000,618) (2,989,872) (3,549,666) 855,709
------------ ----------- ----------- -----------
Net Decrease in Net Assets Resulting
From Operations................... (10,184,417) (2,812,821) (3,222,535) 1,326,147
------------ ----------- ----------- -----------
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net Investment Income................ (581,573) (304,472) (27,774) (4,792)
Capital.............................. -- (9,172) -- --
------------ ----------- ----------- -----------
Decrease in Net Assets From
Distributions to Shareholders..... (581,573) (313,644) (27,774) (4,792)
------------ ----------- ----------- -----------
SHAREHOLDER TRANSACTIONS
Proceeds From Shares Sold............ 18,998,419 21,411,904 3,530,251 4,219,106
Value of Shares Reinvested........... 577 883 111 44
Value of Shares Repurchased.......... (5,132,560) (1,879,073) (4,251,773) (2,131,084)
------------ ----------- ----------- -----------
Net Increase (Decrease) in Net Assets
Resulting From Share
Transactions...................... 13,866,436 19,533,714 (721,411) 2,088,066
------------ ----------- ----------- -----------
Increase in Net Assets............ 3,100,446 16,407,249 (3,971,720) 3,409,421
NET ASSETS--BEGINNING OF PERIOD........ 22,426,344 6,019,095 11,229,106 7,819,685
------------ ----------- ----------- -----------
NET ASSETS--END OF PERIOD(1)........... $ 25,526,790 $22,426,344 $ 7,257,386 $11,229,106
============ =========== =========== ===========
(1) Including Undistributed Net
Investment Income.................... $ 12,181 $ -- $ 192 $ --
============ =========== =========== ===========
CHANGES IN SHARES OUTSTANDING:
Shares Sold.......................... 650,000 500,000 100,000 100,000
Shares Reinvested.................... 18 21 3 1
Shares Repurchased................... (150,000) (50,000) (100,000) (50,000)
Shares Outstanding, Beginning of
Period............................ 600,021 150,000 250,001 200,000
------------ ----------- ----------- -----------
Shares Outstanding, End of Period.... 1,100,039 600,021 250,004 250,001
============ =========== =========== ===========
</Table>
70
See Notes to Financial Statements.
STATEMENTS OF CHANGES IN NET ASSETS (continued)
- --------------------------------------------------------------------------------
<Table>
<Caption>
RYDEX S&P EQUAL WEIGHT CONSUMER RYDEX S&P EQUAL WEIGHT CONSUMER
DISCRETIONARY ETF STAPLES ETF
------------------------------------ ------------------------------------
YEAR ENDED PERIOD ENDED YEAR ENDED PERIOD ENDED
OCTOBER 31, 2008 OCTOBER 31, 2007* OCTOBER 31, 2008 OCTOBER 31, 2007*
---------------- ----------------- ---------------- -----------------
OPERATIONS
Net Investment Income............... $ 183,955 $ 256,800 $ 174,606 $ 173,946
Net Realized Gain (Loss)............ (3,645,142) (3,021,999) 41,473 (50,768)
Net Change in Unrealized
Appreciation/Depreciation on
Investments...................... (2,318,744) (954,292) (2,115,793) 707,686
------------ ------------- ----------- -----------
Net Increase (Decrease) in Net
Assets Resulting From
Operations....................... (5,779,931) (3,719,491) (1,899,714) 830,864
------------ ------------- ----------- -----------
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net Investment Income............... (191,461) (246,829) (170,546) (166,325)
------------ ------------- ----------- -----------
SHAREHOLDER TRANSACTIONS
Proceeds From Shares Sold........... 77,181,099 164,688,912 6,977,860 9,840,904
Value of Shares Reinvested.......... -- -- -- --
Value of Shares Repurchased......... (96,415,372) (131,794,661) (2,441,867) (2,603,337)
------------ ------------- ----------- -----------
Net Increase (Decrease) in Net
Assets Resulting From Share
Transactions..................... (19,234,273) 32,894,251 4,535,993 7,237,567
------------ ------------- ----------- -----------
Increase (Decrease) in Net
Assets......................... (25,205,665) 28,927,931 2,465,733 7,902,106
NET ASSETS--BEGINNING OF PERIOD....... 28,927,931 -- 7,902,106 --
------------ ------------- ----------- -----------
NET ASSETS--END OF PERIOD(1).......... $ 3,722,266 $ 28,927,931 $10,367,839 $ 7,902,106
============ ============= =========== ===========
(1) Including Undistributed Net
Investment Income................... $ 2,465 $ 9,971 $ 11,681 $ 7,621
============ ============= =========== ===========
CHANGES IN SHARES OUTSTANDING:
Shares Sold......................... 2,050,000 3,550,000 150,000 200,000
Shares Reinvested................... -- -- -- --
Shares Repurchased.................. (2,550,000) (2,900,000) (50,000) (50,000)
Shares Outstanding, Beginning of
Period........................... 650,000 -- 150,000 --
------------ ------------- ----------- -----------
Shares Outstanding, End of Period... 150,000 650,000 250,000 150,000
============ ============= =========== ===========
</Table>
* The Fund commenced operations on November 1, 2006.
71 ANNUAL REPORT
See Notes to Financial Statements.
STATEMENTS OF CHANGES IN NET ASSETS (continued)
- --------------------------------------------------------------------------------
<Table>
<Caption>
RYDEX S&P EQUAL WEIGHT FINANCIALS
RYDEX S&P EQUAL WEIGHT ENERGY ETF ETF
------------------------------------ ------------------------------------
YEAR ENDED PERIOD ENDED YEAR ENDED PERIOD ENDED
OCTOBER 31, 2008 OCTOBER 31, 2007* OCTOBER 31, 2008 OCTOBER 31, 2007*
---------------- ----------------- ---------------- -----------------
OPERATIONS
Net Investment Income............... $ 64,476 $ 39,906 $ 188,717 $ 105,693
Net Realized Gain (Loss)............ 1,935,459 260,240 (2,058,581) 393,350
Net Change in Unrealized
Appreciation/Depreciation on
Investments...................... (6,142,032) 2,611,551 (2,732,751) (330,105)
----------- ----------- ----------- ------------
Net Increase (Decrease) in Net
Assets Resulting From
Operations....................... (4,142,097) 2,911,697 (4,602,615) 168,938
----------- ----------- ----------- ------------
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net Investment Income............... (63,539) (42,062) (161,215) (98,785)
Net Realized Gains.................. (269,337) -- -- --
----------- ----------- ----------- ------------
Decrease in Net Assets From
Distributions to Shareholders.... (332,876) (42,062) (161,215) (98,785)
----------- ----------- ----------- ------------
SHAREHOLDER TRANSACTIONS
Proceeds From Shares Sold........... 6,873,049 7,251,932 8,469,375 31,922,837
Value of Shares Reinvested.......... 343 -- -- --
Value of Shares Repurchased......... (6,562,435) -- -- (24,993,170)
----------- ----------- ----------- ------------
Net Increase in Net Assets Resulting
From Share Transactions.......... 310,957 7,251,932 8,469,375 6,929,667
----------- ----------- ----------- ------------
Increase (Decrease) in Net
Assets......................... (4,164,016) 10,121,567 3,705,545 6,999,820
NET ASSETS--BEGINNING OF PERIOD....... 10,121,567 -- 6,999,820 --
----------- ----------- ----------- ------------
NET ASSETS--END OF PERIOD(1).......... $ 5,957,551 $10,121,567 $10,705,365 $ 6,999,820
=========== =========== =========== ============
(1) Including Undistributed Net
Investment Income................... $ 937 $ -- $ -- $ --
=========== =========== =========== ============
CHANGES IN SHARES OUTSTANDING:
Shares Sold......................... 100,000 150,000 350,000 650,000
Shares Reinvested................... 5 -- -- --
Shares Repurchased.................. (100,000) -- -- (500,000)
Shares Outstanding, Beginning of
Period........................... 150,000 -- 150,000 --
----------- ----------- ----------- ------------
Shares Outstanding, End of Period... 150,005 150,000 500,000 150,000
=========== =========== =========== ============
</Table>
* The Fund commenced operations on November 1, 2006.
72
See Notes to Financial Statements.
STATEMENTS OF CHANGES IN NET ASSETS (continued)
- --------------------------------------------------------------------------------
<Table>
<Caption>
RYDEX S&P EQUAL WEIGHT HEALTH CARE RYDEX S&P EQUAL WEIGHT INDUSTRIALS
ETF ETF
------------------------------------ ------------------------------------
YEAR ENDED PERIOD ENDED YEAR ENDED PERIOD ENDED
OCTOBER 31, 2008 OCTOBER 31, 2007* OCTOBER 31, 2008 OCTOBER 31, 2007*
---------------- ----------------- ---------------- -----------------
OPERATIONS
Net Investment Income............... $ 103,107 $ 39,168 $ 108,811 $ 84,478
Net Realized Gain................... 264,131 1,090,098 1,041,342 253,601
Net Change in Unrealized
Appreciation/Depreciation on
Investments...................... (13,885,432) (147,337) (4,023,914) 1,276,411
------------ ------------ ----------- ----------
Net Increase (Decrease) in Net
Assets Resulting From
Operations....................... (13,518,194) 981,929 (2,873,761) 1,614,490
------------ ------------ ----------- ----------
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net Investment Income............... (94,309) (37,003) (106,813) (81,906)
Net Realized Gains.................. -- -- (266,443) --
------------ ------------ ----------- ----------
Decrease in Net Assets From
Distributions to Shareholders.... ( 94,309) (37,003) (373,256) (81,906)
------------ ------------ ----------- ----------
SHAREHOLDER TRANSACTIONS
Proceeds From Shares Sold........... 61,205,232 36,174,181 7,034,803 7,372,663
Value of Shares Reinvested.......... -- -- -- --
Value of Shares Repurchased......... (16,438,715) (19,736,519) (5,547,224) --
------------ ------------ ----------- ----------
Net Increase in Net Assets Resulting
From Share Transactions.......... 44,766,517 16,437,662 1,487,579 7,372,663
------------ ------------ ----------- ----------
Increase (Decrease) in Net
Assets......................... 31,154,014 17,382,588 (1,759,438) 8,905,247
NET ASSETS--BEGINNING OF PERIOD....... 17,382,588 -- 8,905,247 --
------------ ------------ ----------- ----------
NET ASSETS--END OF PERIOD(1).......... $ 48,536,602 $ 17,382,588 $ 7,145,809 $8,905,247
============ ============ =========== ==========
(1) Including Undistributed Net
Investment Income................... $ 10,963 $ 2,165 $ 1,505 $ 1,947
============ ============ =========== ==========
CHANGES IN SHARES OUTSTANDING:
Shares Sold......................... 1,150,000 650,000 150,000 150,000
Shares Reinvested................... -- -- -- --
Shares Repurchased.................. (300,000) (350,000) (100,000) --
Shares Outstanding, Beginning of
Period........................... 300,000 -- 150,000 --
------------ ------------ ----------- ----------
Shares Outstanding, End of Period... 1,150,000 300,000 200,000 150,000
============ ============ =========== ==========
</Table>
* The Fund commenced operations on November 1, 2006.
73 ANNUAL REPORT
See Notes to Financial Statements.
STATEMENTS OF CHANGES IN NET ASSETS (continued)
- --------------------------------------------------------------------------------
<Table>
<Caption>
RYDEX S&P EQUAL WEIGHT TECHNOLOGY
RYDEX S&P EQUAL WEIGHT MATERIALS ETF ETF
------------------------------------ ------------------------------------
YEAR ENDED PERIOD ENDED YEAR ENDED PERIOD ENDED
OCTOBER 31, 2008 OCTOBER 31, 2007* OCTOBER 31, 2008 OCTOBER 31, 2007*
---------------- ----------------- ---------------- -----------------
OPERATIONS
Net Investment Income............... $ 156,833 $ 128,347 $ 26,296 $ (11,089)
Net Realized Gain (Loss)............ 60,553 1,084,454 (1,334,303) 1,406,629
Net Change in Unrealized
Appreciation/Depreciation on
Investments...................... (2,701,829) 538,441 (7,030,476) 494,556
----------- ------------ ------------ -----------
Net Increase (Decrease) in Net
Assets Resulting From
Operations....................... (2,484,443) 1,751,242 (8,338,483) 1,890,096
----------- ------------ ------------ -----------
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net Investment Income............... (159,896) (119,952) (27,611) --
----------- ------------ ------------ -----------
SHAREHOLDER TRANSACTIONS
Proceeds From Shares Sold........... 4,429,500 26,216,591 15,426,927 25,589,410
Value of Shares Reinvested.......... -- -- -- --
Value of Shares Repurchased......... (5,543,627) (18,934,408) (18,877,730) (8,167,496)
----------- ------------ ------------ -----------
Net Increase (Decrease) in Net
Assets Resulting From Share
Transactions..................... (1,114,127) 7,282,183 (3,450,803) 17,421,914
----------- ------------ ------------ -----------
Increase (Decrease) in Net
Assets......................... (3,758,466) 8,913,473 (11,816,897) 19,312,010
NET ASSETS--BEGINNING OF PERIOD....... 8,913,473 -- 19,312,010 --
----------- ------------ ------------ -----------
NET ASSETS--END OF PERIOD(1).......... $ 5,155,007 $ 8,913,473 $ 7,495,113 $19,312,010
=========== ============ ============ ===========
(1) Including Undistributed Net
Investment Income................... $ 5,332 $ 8,395 $ -- $ --
=========== ============ ============ ===========
CHANGES IN SHARES OUTSTANDING:
Shares Sold......................... 100,000 500,000 350,000 500,000
Shares Reinvested................... -- -- -- --
Shares Repurchased.................. (100,000) (350,000) (450,000) (150,000)
Shares Outstanding, Beginning of
Period........................... 150,000 -- 350,000 --
----------- ------------ ------------ -----------
Shares Outstanding, End of Period... 150,000 150,000 250,000 350,000
=========== ============ ============ ===========
</Table>
* The Fund commenced operations on March 1, 2006.
74
See Notes to Financial Statements.
STATEMENTS OF CHANGES IN NET ASSETS (concluded)
- --------------------------------------------------------------------------------
<Table>
<Caption>
RYDEX S&P EQUAL WEIGHT UTILITIES ETF
------------------------------------
YEAR ENDED PERIOD ENDED
OCTOBER 31, 2008 OCTOBER 31, 2007*
---------------- -----------------
OPERATIONS
Net Investment Income................................ $ 186,347 $ 217,228
Net Realized Gain (Loss)............................. (426,683) 661,560
Net Change in Unrealized Appreciation/Depreciation on
Investments....................................... (2,110,863) 481,937
----------- -----------
Net Increase (Decrease) in Net Assets Resulting From
Operations........................................ (2,351,199) 1,360,725
----------- -----------
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net Investment Income................................ (182,405) (203,649)
----------- -----------
SHAREHOLDER TRANSACTIONS
Proceeds From Shares Sold............................ 2,499,606 13,839,342
Value of Shares Reinvested........................... -- --
Value of Shares Repurchased.......................... (2,076,737) (8,767,932)
----------- -----------
Net Increase in Net Assets Resulting From Share
Transactions...................................... 422,869 5,071,410
----------- -----------
Increase (Decrease) in Net Assets................. (2,110,735) 6,228,486
NET ASSETS--BEGINNING OF PERIOD........................ 6,228,486 --
----------- -----------
NET ASSETS--END OF PERIOD(1)........................... $ 4,117,751 $ 6,228,486
=========== ===========
(1) Including Undistributed Net Investment Income...... $ 17,521 $ 13,579
=========== ===========
CHANGES IN SHARES OUTSTANDING:
Shares Sold.......................................... 50,000 250,000
Shares Reinvested.................................... -- --
Shares Repurchased................................... (50,000) (150,000)
Shares Outstanding, Beginning of Period.............. 100,000 --
----------- -----------
Shares Outstanding, End of Period.................... 100,000 100,000
=========== ===========
</Table>
* The Fund commenced operations on November 1, 2006.
75 ANNUAL REPORT
See Notes to Financial Statements.
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
<Table>
<Caption>
RYDEX S&P 500 PURE VALUE ETF RYDEX S&P 500 PURE GROWTH ETF
----------------------------------------------------- ----------------------------------
YEAR ENDED YEAR ENDED PERIOD ENDED YEAR ENDED YEAR ENDED
OCTOBER 31, 2008 OCTOBER 31, 2007 OCTOBER 31, 2006* OCTOBER 31, 2008 OCTOBER 31, 2007
---------------- ---------------- ----------------- ---------------- ----------------
PER SHARE OPERATING
PERFORMANCE:
NET ASSET VALUE AT
BEGINNING OF PERIOD.... $34.46 $32.66 $29.87 $39.59 $35.30
------- ------- ------- ------- -------
Net Investment Income**.. 1.00 0.75 0.49 0.20 0.25
Net Realized and
Unrealized Gain (Loss)
on Investments......... (16.44) 1.80 2.58 (15.19) 4.26
------- ------- ------- ------- -------
TOTAL FROM INVESTMENT
OPERATIONS............. (15.44) 2.55 3.07 (14.99) 4.51
------- ------- ------- ------- -------
DISTRIBUTIONS TO
SHAREHOLDERS FROM:
Net Investment Income.... (1.04) (0.75) (0.28) (0.20) (0.22)
------- ------- ------- ------- -------
NET ASSET VALUE AT END OF
PERIOD................. $17.98 $34.46 $32.66 $24.40 $39.59
======= ======= ======= ======= =======
TOTAL RETURN***.......... (45.76)% 7.79% 10.27% (38.00)% 12.79%
RATIOS/SUPPLEMENTAL DATA:
Net Assets at End of
Period (000's
Omitted)............... $17,994 $39,635 $21,232 $24,398 $63,340
RATIO TO AVERAGE NET
ASSETS OF:
Expenses................. 0.35% 0.35% 0.35%**** 0.35% 0.35%
Net Investment Income.... 3.63% 2.15% 2.37%**** 0.57% 0.66%
Portfolio Turnover
Rate+.................. 53% 26% 4% 30% 24%
<Caption>
RYDEX S&P 500
PURE GROWTH ETF
-----------------
PERIOD ENDED
OCTOBER 31, 2006*
-----------------
PER SHARE OPERATING
PERFORMANCE:
NET ASSET VALUE AT
BEGINNING OF PERIOD.... $34.42
-------
Net Investment Income**.. 0.11
Net Realized and
Unrealized Gain (Loss)
on Investments......... 0.84
-------
TOTAL FROM INVESTMENT
OPERATIONS............. 0.95
-------
DISTRIBUTIONS TO
SHAREHOLDERS FROM:
Net Investment Income.... (0.07)
-------
NET ASSET VALUE AT END OF
PERIOD................. $35.30
=======
TOTAL RETURN***.......... 2.77%
RATIOS/SUPPLEMENTAL DATA:
Net Assets at End of
Period (000's
Omitted)............... $17,649
RATIO TO AVERAGE NET
ASSETS OF:
Expenses................. 0.35%****
Net Investment Income.... 0.48%****
Portfolio Turnover
Rate+.................. 7%
</Table>
* The Fund commenced operations on March 1, 2006.
** Based on average shares outstanding.
*** Total investment return is calculated assuming an initial investment
made at the net asset value at the beginning of the period, reinvestment
of all dividends and distribution at net asset value during the period,
and redemption on the last day of the period. Transaction fees are not
reflected in the calculation of total investment return. Total
investment return calculated for a period of less than one year is not
annualized.
**** Annualized.
+ Portfolio turnover is not annualized and does not include securities
received or delivered from processing creations or redemptions.
76
See Notes to Financial Statements.
FINANCIAL HIGHLIGHTS (continued)
- --------------------------------------------------------------------------------
<Table>
<Caption>
RYDEX S&P MIDCAP 400 PURE GROWTH
RYDEX S&P MIDCAP 400 PURE VALUE ETF ETF
----------------------------------------------------- ----------------------------------
YEAR ENDED YEAR ENDED PERIOD ENDED YEAR ENDED YEAR ENDED
OCTOBER 31, 2008 OCTOBER 31, 2007 OCTOBER 31, 2006* OCTOBER 31, 2008 OCTOBER 31, 2007
---------------- ---------------- ----------------- ---------------- ----------------
PER SHARE OPERATING
PERFORMANCE:
NET ASSET VALUE AT
BEGINNING OF PERIOD.... $35.76 $33.27 $31.53 $59.75 $50.10
------- ------- ------- ------- -------
Net Investment Income**.. 0.87 0.82 0.44 0.02 0.33
Net Realized and
Unrealized Gain (Loss)
on Investments......... (15.54) 2.48 1.60 (20.63) 9.73
------- ------- ------- ------- -------
TOTAL FROM INVESTMENT
OPERATIONS............. (14.67) 3.30 2.04 (20.61) 10.06
------- ------- ------- ------- -------
DISTRIBUTIONS TO
SHAREHOLDERS FROM:
Net Investment Income.... (0.84) (0.81) (0.30) (0.04) (0.27)
Capital.................. (0.01) -- -- -- --
Net Realized Gain........ -- -- -- -- (0.14)
------- ------- ------- ------- -------
Total Distributions...... (0.85) (0.81) (0.30) (0.04) (0.41)
------- ------- ------- ------- -------
NET ASSET VALUE AT END OF
PERIOD................. $20.24 $35.76 $33.27 $39.10 $59.75
======= ======= ======= ======= =======
TOTAL RETURN***.......... (41.75)% 9.94% 6.48% (34.52)% 20.17%
RATIOS/SUPPLEMENTAL DATA:
Net Assets at End of
Period (000's
Omitted)............... $10,126 $21,458 $14,973 $17,596 $20,914
RATIO TO AVERAGE NET
ASSETS OF:
Expenses................. 0.35% 0.35% 0.35%**** 0.35% 0.35%
Net Investment Income.... 2.87% 2.28% 2.07%**** 0.04% 0.60%
Portfolio Turnover
Rate+.................. 64% 46% 4% 52% 53%
<Caption>
RYDEX S&P MIDCAP
400 PURE GROWTH
ETF
-----------------
PERIOD ENDED
OCTOBER 31, 2006*
-----------------
PER SHARE OPERATING
PERFORMANCE:
NET ASSET VALUE AT
BEGINNING OF PERIOD.... $52.62
-------
Net Investment Income**.. 0.02
Net Realized and
Unrealized Gain (Loss)
on Investments......... (2.53)
-------
TOTAL FROM INVESTMENT
OPERATIONS............. (2.51)
-------
DISTRIBUTIONS TO
SHAREHOLDERS FROM:
Net Investment Income.... (0.01)
Capital.................. --
Net Realized Gain........ --
-------
Total Distributions...... (0.01)
-------
NET ASSET VALUE AT END OF
PERIOD................. $50.10
=======
TOTAL RETURN***.......... (4.76)%
RATIOS/SUPPLEMENTAL DATA:
Net Assets at End of
Period (000's
Omitted)............... $22,547
RATIO TO AVERAGE NET
ASSETS OF:
Expenses................. 0.35%****
Net Investment Income.... 0.07%****
Portfolio Turnover
Rate+.................. 14%
</Table>
* The Fund commenced operations on March 1, 2006.
** Based on average shares outstanding.
*** Total investment return is calculated assuming an initial investment
made at the net asset value at the beginning of the period, reinvestment
of all dividends and distribution at net asset value during the period,
and redemption on the last day of the period. Transaction fees are not
reflected in the calculation of total investment return. Total
investment return calculated for a period of less than one year is not
annualized.
**** Annualized.
+ Portfolio turnover is not annualized and does not include securities
received or delivered from processing creations or redemptions.
77 ANNUAL REPORT
See Notes to Financial Statements.
FINANCIAL HIGHLIGHTS (continued)
- --------------------------------------------------------------------------------
<Table>
<Caption>
RYDEX S&P SMALLCAP 600 PURE GROWTH
RYDEX S&P SMALLCAP 600 PURE VALUE ETF ETF
----------------------------------------------------- ----------------------------------
YEAR ENDED YEAR ENDED PERIOD ENDED YEAR ENDED YEAR ENDED
OCTOBER 31, 2008 OCTOBER 31, 2007 OCTOBER 31, 2006* OCTOBER 31, 2008 OCTOBER 31, 2007
---------------- ---------------- ----------------- ---------------- ----------------
PER SHARE OPERATING
PERFORMANCE:
NET ASSET VALUE AT
BEGINNING OF PERIOD.... $37.38 $40.13 $38.45 $44.92 $39.10
------- ------- ------ ------ -------
Net Investment Income**.. 0.79 0.74 0.37 0.17 --
Net Realized and
Unrealized Gain (Loss)
on Investments......... (14.26) (2.85) 1.62 (15.87) 5.84
------- ------- ------ ------ -------
TOTAL FROM INVESTMENT
OPERATIONS............. (13.47) (2.11) 1.99 (15.70) 5.84
------- ------- ------ ------ -------
DISTRIBUTIONS TO
SHAREHOLDERS FROM:
Net Investment Income.... (0.70) (0.62) (0.31) (0.19) (0.02)
Capital.................. -- (0.02) -- -- --
------- ------- ------ ------ -------
Total Distributions...... (0.70) (0.64) (0.31) (0.19) (0.02)
------- ------- ------ ------ -------
NET ASSET VALUE AT END OF
PERIOD................. $23.21 $37.38 $40.13 $29.03 $44.92
======= ======= ====== ====== =======
TOTAL RETURN***.......... (36.48)% (5.38)% 5.19% (35.05)% 14.93%
RATIOS/SUPPLEMENTAL DATA:
Net Assets at End of
Period (000's
Omitted)............... $25,527 $22,426 $6,019 $7,257 $11,229
RATIO TO AVERAGE NET
ASSETS OF:
Expenses................. 0.35% 0.35% 0.35%**** 0.35% 0.35%
Net Investment Income.... 2.57% 1.78% 1.46%**** 0.44% 0.00%
Portfolio Turnover
Rate+.................. 50% 37% 7% 63% 51%
<Caption>
RYDEX S&P
SMALLCAP 600 PURE
GROWTH ETF
-----------------
PERIOD ENDED
OCTOBER 31, 2006*
-----------------
PER SHARE OPERATING
PERFORMANCE:
NET ASSET VALUE AT
BEGINNING OF PERIOD.... $39.31
------
Net Investment Income**.. (0.01)
Net Realized and
Unrealized Gain (Loss)
on Investments......... (0.20)
------
TOTAL FROM INVESTMENT
OPERATIONS............. (0.21)
------
DISTRIBUTIONS TO
SHAREHOLDERS FROM:
Net Investment Income.... --
Capital.................. --
------
Total Distributions...... --
------
NET ASSET VALUE AT END OF
PERIOD................. $39.10
======
TOTAL RETURN***.......... (0.55)%
RATIOS/SUPPLEMENTAL DATA:
Net Assets at End of
Period (000's
Omitted)............... $7,820
RATIO TO AVERAGE NET
ASSETS OF:
Expenses................. 0.35%****
Net Investment Income.... (0.04)%****
Portfolio Turnover
Rate+.................. 14%
</Table>
* The Fund commenced operations on March 1, 2006.
** Based on average shares outstanding.
*** Total investment return is calculated assuming an initial investment
made at the net asset value at the beginning of the period, reinvestment
of all dividends and distribution at net asset value during the period,
and redemption on the last day of the period. Transaction fees are not
reflected in the calculation of total investment return. Total
investment return calculated for a period of less than one year is not
annualized.
**** Annualized.
+ Portfolio turnover is not annualized and does not include securities
received or delivered from processing creations or redemptions.
78
See Notes to Financial Statements.
FINANCIAL HIGHLIGHTS (continued)
- --------------------------------------------------------------------------------
<Table>
<Caption>
RYDEX S&P EQUAL WEIGHT CONSUMER RYDEX S&P EQUAL WEIGHT CONSUMER
DISCRETIONARY ETF STAPLES ETF
--------------------------------- ---------------------------------
YEAR ENDED PERIOD ENDED YEAR ENDED PERIOD ENDED
OCTOBER 31, OCTOBER 31, OCTOBER 31, OCTOBER 31,
2008 2007* 2008 2007*
--------------- --------------- --------------- ---------------
PER SHARE OPERATING PERFORMANCE:
NET ASSET VALUE AT BEGINNING OF
PERIOD............................ $44.50 $44.98 $52.68 $48.16
------ ------- ------- ------
Net Investment Income**............. 0.53 0.32 0.88 1.16
Net Realized and Unrealized Gain
(Loss) on Investments............. (19.59) (0.49) (11.22) 4.32
------ ------- ------- ------
TOTAL FROM INVESTMENT OPERATIONS.... (19.06) (0.17) (10.34) 5.48
------ ------- ------- ------
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net Investment Income............... (0.62) (0.31) (0.87) (0.96)
------ ------- ------- ------
NET ASSET VALUE AT END OF PERIOD.... $24.82 $44.50 $41.47 $52.68
====== ======= ======= ======
TOTAL RETURN***..................... (43.27)% (0.40)% (19.87)% 11.45%
RATIOS/SUPPLEMENTAL DATA:
Net Assets at End of Period (000's
Omitted).......................... $3,722 $28,928 $10,368 $7,902
RATIO TO AVERAGE NET ASSETS OF:
Expenses............................ 0.50% 0.50%**** 0.50% 0.50%****
Net Investment Income............... 1.44% 0.67%**** 1.78% 2.29%****
Portfolio Turnover Rate+............ 29% 28% 25% 19%
</Table>
* The Fund commenced operations on November 1, 2006.
** Based on average shares outstanding.
*** Total investment return is calculated assuming an initial investment
made at the net asset value at the beginning of the period, reinvestment
of all dividends and distribution at net asset value during the period,
and redemption on the last day of the period. Transaction fees are not
reflected in the calculation of total investment return. Total
investment return calculated for a period of less than one year is not
annualized.
**** Annualized
+ Portfolio turnover is not annualized and does not include securities
received or delivered from processing creations or redemptions.
79 ANNUAL REPORT
See Notes to Financial Statements.
FINANCIAL HIGHLIGHTS (continued)
- --------------------------------------------------------------------------------
<Table>
<Caption>
RYDEX S&P EQUAL WEIGHT FINANCIALS
RYDEX S&P EQUAL WEIGHT ENERGY ETF ETF
--------------------------------- ---------------------------------
YEAR ENDED PERIOD ENDED YEAR ENDED PERIOD ENDED
OCTOBER 31, OCTOBER 31, OCTOBER 31, OCTOBER 31,
2008 2007* 2008 2007*
--------------- --------------- --------------- ---------------
PER SHARE OPERATING PERFORMANCE:
NET ASSET VALUE AT BEGINNING OF
PERIOD............................ $67.48 $48.35 $46.67 $48.57
------ ------- ------- ------
Net Investment Income**............. 0.33 0.27 1.02 0.92
Net Realized and Unrealized Gain
(Loss) on Investments............. (25.94) 19.14 (25.40) (1.95)
------ ------- ------- ------
TOTAL FROM INVESTMENT OPERATIONS.... (25.61) 19.41 (24.38) (1.03)
------ ------- ------- ------
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net Investment Income............... (0.35) (0.28) (0.88) (0.87)
Net Realized Gains.................. (1.80) -- -- --
------ ------- ------- ------
Total Distributions................. (2.15) (0.28) (0.88) (0.87)
------ ------- ------- ------
NET ASSET VALUE AT END OF PERIOD.... $39.72 $67.48 $21.41 $46.67
====== ======= ======= ======
TOTAL RETURN***..................... (39.28)% 40.28% (52.88)% (2.23)%
RATIOS/SUPPLEMENTAL DATA:
Net Assets at End of Period (000's
Omitted).......................... $5,958 $10,122 $10,705 $7,000
RATIO TO AVERAGE NET ASSETS OF:
Expenses............................ 0.50% 0.50%**** 0.50% 0.50%****
Net Investment Income............... 0.50% 0.47%**** 3.09% 1.84%****
Portfolio Turnover Rate+............ 38% 34% 51% 31%
</Table>
* The Fund commenced operations on November 1, 2006.
** Based on average shares outstanding.
*** Total investment return is calculated assuming an initial investment
made at the net asset value at the beginning of the period, reinvestment
of all dividends and distribution at net asset value during the period,
and redemption on the last day of the period. Transaction fees are not
reflected in the calculation of total investment return. Total
investment return calculated for a period of less than one year is not
annualized.
**** Annualized
+ Portfolio turnover is not annualized and does not include securities
received or delivered from processing creations or redemptions.
80
See Notes to Financial Statements.
FINANCIAL HIGHLIGHTS (continued)
- --------------------------------------------------------------------------------
<Table>
<Caption>
RYDEX S&P EQUAL WEIGHT HEALTH CARE RYDEX S&P EQUAL WEIGHT INDUSTRIALS
ETF ETF
------------------------------------ ------------------------------------
YEAR ENDED PERIOD ENDED YEAR ENDED PERIOD ENDED
OCTOBER 31, OCTOBER 31, OCTOBER 31, OCTOBER 31,
2008 2007* 2008 2007*
--------------- --------------- --------------- ---------------
PER SHARE OPERATING PERFORMANCE:
NET ASSET VALUE AT BEGINNING OF
PERIOD.......................... $57.94 $49.46 $59.37 $49.15
------- ------- ------ ------
Net Investment Income**........... 0.14 0.11 0.61 0.56
Net Realized and Unrealized Gain
(Loss) on Investments........... (15.74) 8.48 (21.82) 10.21
------- ------- ------ ------
TOTAL FROM INVESTMENT OPERATIONS.. (15.60) 8.59 (21.21) 10.77
------- ------- ------ ------
DISTRIBUTIONS TO SHAREHOLDERS
FROM:
Net Investment Income............. (0.13) (0.11) (0.65) (0.55)
Net Realized Gains................ -- -- (1.78) --
------- ------- ------ ------
Total Distributions............... (0.13) (0.11) (2.43) (0.55)
------- ------- ------ ------
NET ASSET VALUE AT END OF PERIOD.. $42.21 $57.94 $35.73 $59.37
======= ======= ====== ======
TOTAL RETURN***................... (26.98)% 17.37% (37.12)% 22.00%
RATIOS/SUPPLEMENTAL DATA:
Net Assets at End of Period (000's
Omitted)........................ $48,537 $17,383 $7,146 $8,905
RATIO TO AVERAGE NET ASSETS OF:
Expenses.......................... 0.50% 0.50%**** 0.50% 0.50%****
Net Investment Income............. 0.26% 0.20%**** 1.17% 1.02%****
Portfolio Turnover Rate+.......... 26% 55% 30% 36%
</Table>
* The Fund commenced operations on November 1, 2006.
** Based on average shares outstanding.
*** Total investment return is calculated assuming an initial investment
made at the net asset value at the beginning of the period, reinvestment
of all dividends and distribution at net asset value during the period,
and redemption on the last day of the period. Transaction fees are not
reflected in the calculation of total investment return. Total
investment return calculated for a period of less than one year is not
annualized.
**** Annualized
+ Portfolio turnover is not annualized and does not include securities
received or delivered from processing creations or redemptions.
81 ANNUAL REPORT
See Notes to Financial Statements.
FINANCIAL HIGHLIGHTS (continued)
- --------------------------------------------------------------------------------
<Table>
<Caption>
RYDEX S&P EQUAL WEIGHT MATERIALS RYDEX S&P EQUAL WEIGHT TECHNOLOGY
ETF ETF
--------------------------------- ---------------------------------
YEAR ENDED PERIOD ENDED YEAR ENDED PERIOD ENDED
OCTOBER 31, OCTOBER 31, OCTOBER 31, OCTOBER 31,
2008 2007* 2008 2007*
--------------- --------------- ----------- ---------------
PER SHARE OPERATING PERFORMANCE:
NET ASSET VALUE AT BEGINNING OF
PERIOD............................ $59.42 $48.43 $55.18 $47.80
------ ------ ------ -------
Net Investment Income**............. 1.40 0.85 0.06 (0.05)
Net Realized and Unrealized Gain
(Loss) on Investments............. (25.11) 10.74 (25.19) 7.43
------ ------ ------ -------
TOTAL FROM INVESTMENT OPERATIONS.... (23.71) 11.59 (25.13) 7.38
------ ------ ------ -------
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net Investment Income............... (1.34) (0.60) (0.07) --
------ ------ ------ -------
NET ASSET VALUE AT END OF PERIOD.... $34.37 $59.42 $29.98 $55.18
====== ====== ====== =======
TOTAL RETURN***..................... (40.67)% 24.02% (45.58)% 15.44%
RATIOS/SUPPLEMENTAL DATA:
Net Assets at End of Period (000's
Omitted).......................... $5,155 $8,913 $7,495 $19,312
RATIO TO AVERAGE NET ASSETS OF:
Expenses............................ 0.50% 0.50%**** 0.50% 0.50%****
Net Investment Income............... 2.69% 1.53%**** 0.14% (0.10)%****
Portfolio Turnover Rate+............ 34% 31% 36% 60%
</Table>
* The Fund commenced operations on November 1, 2006.
** Based on average shares outstanding.
*** Total investment return is calculated assuming an initial investment
made at the net asset value at the beginning of the period, reinvestment
of all dividends and distribution at net asset value during the period,
and redemption on the last day of the period. Transaction fees are not
reflected in the calculation of total investment return. Total
investment return calculated for a period of less than one year is not
annualized.
**** Annualized
+ Portfolio turnover is not annualized and does not include securities
received or delivered from processing creations or redemptions.
82
See Notes to Financial Statements.
FINANCIAL HIGHLIGHTS (concluded)
- --------------------------------------------------------------------------------
<Table>
<Caption>
RYDEX S&P EQUAL WEIGHT UTILITIES
ETF
---------------------------------
YEAR ENDED PERIOD ENDED
OCTOBER 31, OCTOBER 31,
2008 2007*
--------------- ---------------
PER SHARE OPERATING PERFORMANCE:
NET ASSET VALUE AT BEGINNING OF PERIOD.................. $62.28 $54.91
------ ------
Net Investment Income**................................. 1.81 1.55
Net Realized and Unrealized Gain (Loss) on Investments.. (21.09) 7.38
------ ------
TOTAL FROM INVESTMENT OPERATIONS........................ (19.28) 8.93
------ ------
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net Investment Income................................... (1.82) (1.56)
------ ------
NET ASSET VALUE AT END OF PERIOD........................ $41.18 $62.28
====== ======
TOTAL RETURN***......................................... (31.63)% 16.41%
RATIOS/SUPPLEMENTAL DATA:
Net Assets at End of Period (000's Omitted)............. $4,118 $6,228
RATIO TO AVERAGE NET ASSETS OF:
Expenses................................................ 0.50% 0.50%****
Net Investment Income................................... 3.30% 2.59%****
Portfolio Turnover Rate+................................ 25% 20%
</Table>
* The Fund commenced operations on November 1, 2006.
** Based on average shares outstanding.
*** Total investment return is calculated assuming an initial investment
made at the net asset value at the beginning of the period, reinvestment
of all dividends and distribution at net asset value during the period,
and redemption on the last day of the period. Transaction fees are not
reflected in the calculation of total investment return. Total
investment return calculated for a period of less than one year is not
annualized.
**** Annualized
+ Portfolio turnover is not annualized and does not include securities
received or delivered from processing creations or redemptions.
83 ANNUAL REPORT
See Notes to Financial Statements.
NOTES TO FINANCIAL STATEMENTS October 31, 2008
- --------------------------------------------------------------------------------
1. ORGANIZATION
Rydex ETF Trust (the "Trust") is an open-end, management investment company
registered under the Investment Company Act of 1940, as amended (the "1940
Act"). The Trust was organized as a Delaware statutory trust on November 22,
2002. As of October 31, 2008, the Trust offers thirty one portfolios, each of
which represents a separate series of beneficial interest in the Trust, (each a
"Fund" and collectively, the "Funds"). The financial statement herein relate to
the following Funds: Rydex S&P 500 Pure Value ETF, Rydex S&P 500 Pure Growth
ETF, Rydex S&P MidCap 400 Pure Value ETF, Rydex S&P MidCap 400 Pure Growth ETF,
Rydex S&P SmallCap 600 Pure Value ETF, Rydex S&P SmallCap 600 Pure Growth ETF,
Rydex S&P Equal Weight Consumer Discretionary ETF, Rydex S&P Equal Weight
Consumer Staples ETF, Rydex S&P Equal Weight Energy ETF, Rydex S&P Equal Weight
Financials ETF, Rydex S&P Equal Weight Health Care ETF, Rydex S&P Equal Weight
Industrials ETF, Rydex S&P Equal Weight Materials ETF, Rydex S&P Equal Weight
Technology ETF and Rydex S&P Equal Weight Utilities ETF. Rydex S&P 500 Pure
Value ETF, Rydex S&P 500 Pure Growth ETF, Rydex S&P MidCap 400 Pure Value ETF,
Rydex S&P MidCap 400 Pure Growth ETF, Rydex S&P SmallCap 600 Pure Value ETF and
Rydex S&P SmallCap 600 Pure Growth ETF commenced operations on March 1, 2006.
Rydex S&P Equal Weight Consumer Discretionary ETF, Rydex S&P Equal Weight
Consumer Staples ETF, Rydex S&P Equal Weight Energy ETF, Rydex S&P Equal Weight
Financials ETF, Rydex S&P Equal Weight Health Care ETF, Rydex S&P Equal Weight
Industrials ETF, Rydex S&P Equal Weight Materials ETF, Rydex S&P Equal Weight
Technology ETF and Rydex S&P Equal Weight Utilities ETF commenced operations on
November 1, 2006.
The Funds' investment objective is to provide investment results that correspond
generally to the performance, before fees and expenses, of an index representing
publicly traded equity securities (the "Underlying Index"). Rydex S&P 500 Pure
Value ETF tracks the S&P 500/Citigroup Pure Value Index, the Rydex S&P 500 Pure
Growth ETF tracks the S&P 500/Citigroup Pure Growth Index, the Rydex S&P MidCap
400 Pure Value ETF tracks the S&P MidCap 400/Citigroup Pure Value Index, the
Rydex S&P MidCap 400 Pure Growth ETF tracks the S&P MidCap 400/Citigroup Pure
Growth Index, the Rydex S&P SmallCap 600 Pure Value ETF tracks the S&P SmallCap
600/Citigroup Pure Value Index, the Rydex S&P SmallCap 600 Pure Growth ETF
tracks the S&P SmallCap 600/Citigroup Pure Growth Index, Rydex S&P Equal Weight
Consumer Discretionary ETF tracks the S&P Equal Weight Index Consumer
Discretionary, the Rydex S&P Equal Weight Consumer Staples ETF tracks the S&P
Equal Weight Index Consumer Staples, the Rydex S&P Equal Weight Energy ETF
tracks the S&P Equal Weight Index Energy, the Rydex S&P Equal Weight Financials
ETF tracks the S&P Equal Weight Index Financials, the Rydex S&P Equal Weight
Health Care ETF tracks the S&P Equal Weight Index Health Care, the Rydex S&P
Equal Weight Industrials ETF tracks the S&P Equal Weight Index Industrials, the
Rydex S&P Equal Weight Materials ETF tracks the S&P Equal Weight Index
Materials, the Rydex S&P Equal Weight Technology ETF tracks the S&P Equal Weight
Index Information Technology and the Rydex S&P Equal Weight Utilities ETF tracks
the S&P Equal Weight Index Telecommunication Services & Utilities. The Funds
seek to achieve their objective by investing in common stocks that comprise the
Underlying Index. The Funds use a "replication" strategy to track the Underlying
Index. "Replication" refers to investing in substantially all of the securities
in the Underlying Index in approximately the same proportions as in the
Underlying Index.
The Funds operate as index funds and are not actively managed. Adverse
performance of a security in the Funds' portfolio will ordinarily not result in
the elimination of the security from the Funds' portfolio.
The Funds issue and redeem shares on a continuous basis, at net asset value,
only in aggregations of 50,000 shares called a "Creation Unit". Creation Units
are issued and redeemed principally in-kind for securities included in the
Underlying Index.
2. SIGNIFICANT ACCOUNTING POLICIES
The preparation of financial statements in conformity with U.S. generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets, liabilities and
disclosures at the date of the financial statements and accompanying notes and
the reported amounts of increases and decreases in net assets from operations
during the reporting period. Management believes that the estimates utilized in
preparing the Funds' financial statements are reasonable and prudent; however,
actual results could differ from these estimates.
A. SECURITY VALUATION
Securities listed on a domestic securities exchange are valued based on the last
sale price as of the close of regular trading hours on the New York Stock
Exchange or, in the absence of recorded sales, are valued at the most recent bid
price. Securities for which the primary market is the National Association of
Securities Dealers Automated Quotations National Market System ("NASDAQ") are
valued at the NASDAQ Official Closing Price. The Funds invest in money market
mutual funds, which are valued at their Net Asset Value ("NAV").
Securities, for which market quotations are not readily available, including
investments that are subject to limitations as to their sale, are valued at fair
value as determined in good faith by Rydex Investments, which acts as the Funds'
investment advisor (the "Advisor"), in accordance with procedures adopted by the
Board of Trustees. In determining fair value, consideration is given to market
conditions, relative benchmarks and other financial data.
84
NOTES TO FINANCIAL STATEMENTS (continued)
- --------------------------------------------------------------------------------
B. SECURITY TRANSACTIONS AND INCOME RECOGNITION
Security transactions are recorded on the trade date. Realized gains and losses
from portfolio fund transactions are calculated on the identified cost basis.
Dividend income is recorded on the ex-dividend date, net of foreign tax
withholdings. Interest income is recorded on the accrual basis.
C. REPURCHASE AGREEMENTS
The Funds may enter into repurchase agreements with financial institutions. In a
repurchase agreement, a Fund buys a security and the seller simultaneously
agrees to repurchase the security on a specified future date at an agreed-upon
price. The repurchase price reflects an agreed-upon interest rate during the
time the Fund's money is invested in the security. Because the security
constitutes collateral for the repurchase obligation, a repurchase agreement can
be considered a collateralized loan. The Funds follow certain procedures
designed to minimize the risks inherent in such agreements. These procedures
include effecting repurchase transactions only with large, well-capitalized and
well-established financial institutions whose condition will be continually
monitored by the Advisor. In addition, the value of the collateral underlying
the repurchase agreement will always be at least equal to the repurchase price,
including any accrued interest earned on the repurchase agreement. In the event
of a default or bankruptcy by a selling financial institution, the Funds will
seek to liquidate such collateral. However, the exercising of the Funds' right
to liquidate such collateral could involve certain costs or delays and, to the
extent that proceeds from any sale upon a default of the obligation to
repurchase were less than the repurchase price, the Funds could suffer a loss.
It is the current policy of the Funds not to invest in repurchase agreements
that do not mature within seven days if any such investment, together with any
other illiquid assets held by the Funds, amounts to more than 15% of the Funds'
net assets. The investments of the Funds in repurchase agreements, at times, may
be substantial when, in the view of the Advisor, liquidity or other
considerations so warrant. For the year ended October 31, 2008, the Funds had
not engaged in repurchase agreement transactions.
D. FEDERAL INCOME TAXES
The Funds' policy is to comply with the requirements of the Internal Revenue
Code applicable to regulated investment companies and to distribute all of the
taxable income and capital gains, if any, to the shareholders within the
allowable time limits. Therefore, no provision for Federal income taxes is
required.
The Funds adopted Financial Accounting Standards Board (FASB) Interpretation No.
48 "Accounting for Uncertainty in Income Taxes" ("FIN 48"). FIN 48 provides
guidance for how uncertain tax positions should be recognized, measured,
presented and disclosed in the financial statements. FIN 48 requires the
evaluation of tax positions taken or expected to be taken in the course of
preparing the Funds' tax returns to determine whether the tax positions are
"more-likely-than-not" of being sustained by the applicable tax authority. Tax
positions not deemed to meet the more-likely-than-not threshold would be
recorded as a tax benefit or expense in the current year. Management has
analyzed the Funds' tax positions taken on federal income tax returns for all
open tax years for purposes of complying with FIN 48, and has concluded that no
provision for income tax was required in the Funds' financial statements.
The Funds file U.S. federal income tax returns and returns in various foreign
jurisdictions in which they invest. While the statute of limitations remains
open to examine the Funds' U.S. federal income tax returns filed for the fiscal
years 2006 and 2007, no examinations are in progress or anticipated at this
time.
Income and capital gain distributions are determined in accordance with Federal
income tax regulations, which may differ from U.S. generally accepted accounting
principles. These differences are primarily due to differing treatments for tax
equalization, in-kind redemptions, income reclassifications from real estate
investment trusts ("REITs") and losses deferred due to wash sales.
In order to present paid-in-capital, undistributed net investment income (loss)
and accumulated net realized gain (loss) on investments on the statement of
assets and liabilities that more closely represent their tax character, certain
adjustments have been made to these accounts. These adjustments have no effect
on net assets or net asset value per share. The most significant of these
adjustments are for tax equalization and net capital gains resulting from in-
kind redemptions which, because they are non-taxable to the Funds, and therefore
are not distributed to existing Fund shareholders, are reclassified to paid-in-
capital. The in-kind net capital gains for the year ended October 31, 2008 are
disclosed in each Fund's Statement of Operations. For the year ended October 31,
2008, the adjustments for the Funds were as follows:
85 ANNUAL REPORT
NOTES TO FINANCIAL STATEMENTS (continued)
- --------------------------------------------------------------------------------
<Table>
<Caption>
UNDISTRIBUTED ACCUMULATED
PAID-IN NET INVESTMENT NET REALIZED
CAPITAL INCOME (LOSS) GAIN (LOSS)
----------- -------------- ------------
Rydex S&P 500 Pure Value ETF......................... $(1,001,555) $(40,338) $ 1,041,893
Rydex S&P 500 Pure Growth ETF........................ 521,025 -- (521,025)
Rydex S&P MidCap 400 Pure Value ETF.................. (305,185) (37,380) 342,565
Rydex S&P MidCap 400 Pure Growth ETF................. 964,762 -- (964,762)
Rydex S&P SmallCap 600 Pure Value ETF................ 600,691 (45,990) (554,701)
Rydex S&P SmallCap 600 Pure Growth ETF............... 528,344 -- (528,344)
Rydex S&P Equal Weight Consumer Discretionary ETF.... (2,355,678) -- 2,355,678
Rydex S&P Equal Weight Consumer Staples ETF.......... 192,766 -- (192,766)
Rydex S&P Equal Weight Energy ETF.................... 1,970,340 -- (1,970,340)
Rydex S&P Equal Weight Financials ETF................ (947) (27,502) 28,449
Rydex S&P Equal Weight Health Care ETF............... 1,259,539 -- (1,259,539)
Rydex S&P Equal Weight Industrials ETF............... 1,066,269 (2,440) (1,063,829)
Rydex S&P Equal Weight Materials ETF................. 308,663 -- (308,663)
Rydex S&P Equal Weight Technology ETF................ (648,467) 1,315 647,152
Rydex S&P Equal Weight Utilities ETF................. (353,465) -- 353,465
</Table>
For the year ended October 31, 2008, there were no significant differences
between the book basis and tax basis of net unrealized appreciation
(depreciation) in value of investments other than tax deferral of losses on wash
sales and the cumulative return of capital payments on REITs.
At October 31, 2008, the Funds had capital loss carryforwards which may be
utilized to offset any net realized capital gains expiring October 31:
<Table>
<Caption>
2014 2015 2016
------- -------- ----------
Rydex S&P 500 Pure Value ETF.............................. $ -- $ -- $2,798,860
Rydex S&P 500 Pure Growth ETF............................. 28,988 142,389 524,165
Rydex S&P MidCap 400 Pure Value ETF....................... 94,708 13,767 936,294
Rydex S&P MidCap 400 Pure Growth ETF...................... -- -- 645,507
Rydex S&P SmallCap 600 Pure Value ETF..................... 16,654 170,782 3,946,225
Rydex S&P SmallCap 600 Pure Growth ETF.................... -- -- 127,914
Rydex S&P Equal Weight Consumer Discretionary ETF......... -- -- 1,277,332
Rydex S&P Equal Weight Consumer Staples ETF............... -- 54,862 152,812
Rydex S&P Equal Weight Energy ETF......................... -- -- --
Rydex S&P Equal Weight Financials ETF..................... -- -- 1,811,004
Rydex S&P Equal Weight Health Care ETF.................... -- -- 951,005
Rydex S&P Equal Weight Industrials ETF.................... -- -- --
Rydex S&P Equal Weight Materials ETF...................... -- -- 176,420
Rydex S&P Equal Weight Technology ETF..................... -- -- 637,647
Rydex S&P Equal Weight Utilities ETF...................... -- -- 60,408
</Table>
The Funds did not utilize any capital loss carryforwards during the year ended
October 31, 2008.
The tax character of distributable earnings (accumulated losses) at October 31,
2008 were as follows:
<Table>
<Caption>
UNDISTRIBUTED UNREALIZED
UNDISTRIBUTED LONG TERM CAPITAL LOSS APPRECIATION/
ORDINARY INCOME CAPITAL GAIN CARRYFORWARD (DEPRECIATION)
--------------- ------------- ------------ --------------
Rydex S&P 500 Pure Value ETF................. $13,722 $ -- $(2,798,860) $(12,819,547)
Rydex S&P 500 Pure Growth ETF................ 18,881 -- (695,542) (14,570,918)
Rydex S&P MidCap 400 Pure Value ETF.......... -- -- (1,044,769) (7,047,106)
Rydex S&P MidCap 400 Pure Growth ETF......... 93 -- (645,507) (9,490,805)
Rydex S&P SmallCap 600 Pure Value ETF........ 12,181 -- (4,133,661) (10,188,664)
Rydex S&P SmallCap 600 Pure Growth ETF....... 192 -- (127,914) (2,793,743)
Rydex S&P Equal Weight Consumer Discretionary
ETF........................................ 2,465 -- (1,277,332) (3,288,024)
Rydex S&P Equal Weight Consumer Staples ETF.. 11,681 -- (207,674) (1,432,261)
Rydex S&P Equal Weight Energy ETF............ 937 -- -- (3,576,615)
Rydex S&P Equal Weight Financials ETF........ -- -- (1,811,004) (3,313,155)
Rydex S&P Equal Weight Health Care ETF....... 10,963 -- (951,005) (14,097,384)
Rydex S&P Equal Weight Industrials ETF....... 1,505 -- -- (2,782,207)
Rydex S&P Equal Weight Materials ETF......... 5,332 -- (176,420) (2,247,556)
Rydex S&P Equal Weight Technology ETF........ -- -- (637,647) (6,609,409)
Rydex S&P Equal Weight Utilities ETF......... 17,521 -- (60,408) (1,643,922)
</Table>
86
NOTES TO FINANCIAL STATEMENTS (continued)
- --------------------------------------------------------------------------------
The tax character of distributions paid during 2008 were as follows:
<Table>
<Caption>
ORDINARY LONG-TERM RETURN ON
INCOME CAPITAL GAIN CAPITAL
-------- ------------ ---------
Rydex S&P 500 Pure Value ETF............................. $996,902 $-- $ --
Rydex S&P 500 Pure Growth ETF............................ 259,562 -- --
Rydex S&P MidCap 400 Pure Value ETF...................... 365,468 -- 3,840
Rydex S&P MidCap 400 Pure Growth ETF..................... 14,295 -- --
Rydex S&P SmallCap 600 Pure Value ETF.................... 581,573 -- --
Rydex S&P SmallCap 600 Pure Growth ETF................... 27,774 -- --
Rydex S&P Equal Weight Consumer Discretionary ETF........ 191,461 -- --
Rydex S&P Equal Weight Consumer Staples ETF.............. 170,546 -- --
Rydex S&P Equal Weight Energy ETF........................ 332,876 -- --
Rydex S&P Equal Weight Financials ETF.................... 161,215 -- --
Rydex S&P Equal Weight Health Care ETF................... 94,309 -- --
Rydex S&P Equal Weight Industrials ETF................... 373,256 -- --
Rydex S&P Equal Weight Materials ETF..................... 159,896 -- --
Rydex S&P Equal Weight Technology ETF.................... 27,611 -- --
Rydex S&P Equal Weight Utilities ETF..................... 182,405 -- --
</Table>
The tax character of distributions paid during 2007 were as follows:
<Table>
<Caption>
ORDINARY LONG-TERM
INCOME CAPITAL GAIN
-------- ------------
Rydex S&P 500 Pure Value ETF................................... $763,947 $ --
Rydex S&P 500 Pure Growth ETF.................................. 279,098 --
Rydex S&P MidCap 400 Pure Value ETF............................ 425,129 --
Rydex S&P MidCap 400 Pure Growth ETF........................... 182,688 --
Rydex S&P SmallCap 600 Pure Value ETF.......................... 304,472 --
Rydex S&P SmallCap 600 Pure Growth ETF......................... 4,792 --
Rydex S&P Equal Weight Consumer Discretionary ETF.............. 246,829 --
Rydex S&P Equal Weight Consumer Staples ETF.................... 166,325 --
Rydex S&P Equal Weight Energy ETF.............................. 42,062 --
Rydex S&P Equal Weight Financials ETF.......................... 98,785 --
Rydex S&P Equal Weight Health Care ETF......................... 37,003 --
Rydex S&P Equal Weight Industrials ETF......................... 81,906 --
Rydex S&P Equal Weight Materials ETF........................... 119,952 --
Rydex S&P Equal Weight Technology ETF.......................... -- --
Rydex S&P Equal Weight Utilities ETF........................... 203,649 --
</Table>
E. FAIR VALUE MEASUREMENT
The Funds adopted Statement of Financial Accounting Standard No. 157 ("FAS 157")
Fair Value Measurement which provided enhanced guidance for using fair value to
measure assets and liabilities. The standard requires companies to provide
expanded information about the assets and liabilities measured at fair value and
the potential effect of these fair valuations on an entity's financial
performance. The standard does not expand the use of fair value in any new
circumstances, but provides clarification an acceptable fair valuation methods
and applications.
Various inputs may be used to determine the value of the fund's investments.
These inputs are summarized in three broad levels:
Level 1 -- quoted prices in active markets for identical securities.
Level 2 -- other significant observable inputs (including quoted prices for
similar securities, interest rates, prepayment speeds, credit risk, etc.).
Level 3 -- significant unobservable inputs (including the Funds' own
assumptions used to determine the fair value of investments).
The inputs or methodologies used for valuing securities are not necessarily an
indication of the risk associated with investing in those securities.
87 ANNUAL REPORT
NOTES TO FINANCIAL STATEMENTS (continued)
- --------------------------------------------------------------------------------
The following table summarizes the inputs used to value the Funds' net assets as
of October 31, 2008:
<Table>
<Caption>
LEVEL 1 LEVEL 2 LEVEL 3
LEVEL 1 OTHER LEVEL 2 OTHER LEVEL 3 OTHER
INVESTMENTS FINANCIAL INVESTMENTS FINANCIAL INVESTMENTS FINANCIAL
FUND IN SECURITIES INSTRUMENTS IN SECURITIES INSTRUMENTS IN SECURITIES INSTRUMENTS TOTAL
- ---- ------------- ----------- ------------- ----------- ------------- ----------- -----------
ASSETS
Rydex S&P 500 Pure Value ETF... $17,947,704 $ -- $ -- $ -- $ -- $ -- $17,947,704
Rydex S&P 500 Pure Growth ETF.. 24,386,597 -- -- -- -- -- 24,386,597
Rydex S&P MidCap 400 Pure Value
ETF.......................... 10,126,250 -- -- -- -- -- 10,126,250
Rydex S&P MidCap 400 Pure
Growth ETF................... 17,585,216 -- -- -- -- -- 17,585,216
Rydex S&P SmallCap 600 Pure
Value ETF.................... 25,507,194 -- -- -- -- -- 25,507,194
Rydex S&P SmallCap 600 Pure
Growth ETF................... 7,247,602 -- -- -- -- -- 7,247,602
Rydex S&P Equal Weight Consumer
Discretionary ETF............ 3,720,820 -- -- -- -- -- 3,720,820
Rydex S&P Equal Weight Consumer
Staples ETF.................. 10,359,663 -- -- -- -- -- 10,359,663
Rydex S&P Equal Weight Energy
ETF.......................... 5,957,354 -- -- -- -- -- 5,957,354
Rydex S&P Equal Weight
Financials ETF............... 10,704,427 -- -- -- -- -- 10,704,427
Rydex S&P Equal Weight Health
Care ETF..................... 48,527,120 -- -- -- -- -- 48,527,120
Rydex S&P Equal Weight
Industrials ETF.............. 7,141,635 -- -- -- -- -- 7,141,635
Rydex S&P Equal Weight
Materials ETF................ 5,151,543 -- -- -- -- -- 5,151,543
Rydex S&P Equal Weight
Technology ETF............... 7,496,061 -- -- -- -- -- 7,496,061
Rydex S&P Equal Weight
Utilities ETF................ 4,126,103 -- -- -- -- -- 4,126,103
LIABILITIES
Rydex S&P 500 Pure Value ETF... -- -- -- -- -- -- --
Rydex S&P 500 Pure Growth ETF.. -- -- -- -- -- -- --
Rydex S&P MidCap 400 Pure Value
ETF.......................... -- -- -- -- -- -- --
Rydex S&P MidCap 400 Pure
Growth ETF................... -- -- -- -- -- -- --
Rydex S&P SmallCap 600 Pure
Value ETF.................... -- -- -- -- -- -- --
Rydex S&P SmallCap 600 Pure
Growth ETF................... -- -- -- -- -- -- --
Rydex S&P Equal Weight Consumer
Discretionary ETF............ -- -- -- -- -- -- --
Rydex S&P Equal Weight Consumer
Staples ETF.................. -- -- -- -- -- -- --
Rydex S&P Equal Weight Energy
ETF.......................... -- -- -- -- -- -- --
Rydex S&P Equal Weight
Financials ETF............... -- -- -- -- -- -- --
Rydex S&P Equal Weight Health
Care ETF..................... -- -- -- -- -- -- --
Rydex S&P Equal Weight
Industrials ETF.............. -- -- -- -- -- -- --
Rydex S&P Equal Weight
Materials ETF................ -- -- -- -- -- -- --
Rydex S&P Equal Weight
Technology ETF............... -- -- -- -- -- -- --
Rydex S&P Equal Weight
Utilities ETF................ -- -- -- -- -- -- --
</Table>
F. DIVIDENDS AND DISTRIBUTIONS
The Funds declare and pay dividends from net investment income and distribute
from net realized capital gains at least annually.
G. RISK AND UNCERTAINTIES
The Trust invests in various investments which are exposed to risk, such as
market risk. Due to the level of risk associated with certain investments it is
at least reasonably possible that changes in the values of investment securities
will occur in the near term and that such changes could materially affect
amounts reported in future financial statements. The Rydex S&P Equal Weight
Sector ETFs are non-diversified funds, subjecting them to a greater risk than
funds that are diversified.
H. NEW ACCOUNTING PRONOUNCEMENTS
In March 2008, the Financial Accounting Standards No. 161, "Disclosures about
Derivative Instruments and Hedging Activities" ("SFAS 161") was issued and is
effective for fiscal years and interim periods beginning after November 15,
2008. SFAS 161 requires enhanced disclosures about Funds' derivative and hedging
activities. Management is currently evaluating the impact the adoption of SFAS
161 will have on the Funds' financial statement disclosures.
3. ADVISORY, ADMINISTRATION AND OTHER TRANSACTIONS WITH AFFILIATES
The Advisor determines the composition of the portfolio of securities that must
be delivered in exchange for the issuance of Creation Units and periodically
adjusts the composition of the portfolio of each Fund's to conform to changes in
the composition of the relevant index. For these services, the Advisor receives
an advisory fee at the annual rate shown below of the average daily net assets
of the Funds.
88
NOTES TO FINANCIAL STATEMENTS (continued)
- --------------------------------------------------------------------------------
<Table>
<Caption>
ADVISORY FEE
------------
Rydex S&P 500 Pure Value ETF......................................... 0.35%
Rydex S&P 500 Pure Growth ETF........................................ 0.35%
Rydex S&P MidCap 400 Pure Value ETF.................................. 0.35%
Rydex S&P MidCap 400 Pure Growth ETF................................. 0.35%
Rydex S&P SmallCap 600 Pure Value ETF................................ 0.35%
Rydex S&P SmallCap 600 Pure Growth ETF............................... 0.35%
Rydex S&P Equal Weight Consumer Discretionary ETF.................... 0.50%
Rydex S&P Equal Weight Consumer Staples ETF.......................... 0.50%
Rydex S&P Equal Weight Energy ETF.................................... 0.50%
Rydex S&P Equal Weight Financials ETF................................ 0.50%
Rydex S&P Equal Weight Health Care ETF............................... 0.50%
Rydex S&P Equal Weight Industrials ETF............................... 0.50%
Rydex S&P Equal Weight Materials ETF................................. 0.50%
Rydex S&P Equal Weight Technology ETF................................ 0.50%
Rydex S&P Equal Weight Utilities ETF................................. 0.50%
</Table>
The Advisor pays all expenses of the Funds, including the cost of transfer
agency, custody, fund administration, legal, audit and other services, except:
interest, taxes, distribution fees or expenses and extraordinary expenses.
Under an Administration Agreement, State Street Bank and Trust Company (the
"Administrator") provides various administrative and accounting services for the
maintenance and operations of the Funds. Under a Custodian Agreement with the
Trust, the Administrator maintains cash, securities and other assets of the
Trust and the Funds in separate accounts for each fund, keeps all necessary
accounts and records, and provides other services. The Administrator is
required, upon the order of the Trust, to deliver securities held by the
Custodian and to make payments for securities purchased by the Trust for the
Funds. Pursuant to a Transfer Agency and Service Agreement with the Trust, the
Administrator acts as a transfer agent for the Trust's authorized and issued
shares of beneficial interest, and as dividend disbursing agent of the Trust.
The Advisor compensates the Administrator directly for the foregoing services.
The Funds have adopted a Distribution Plan (the "Plan") that allows the Funds to
pay distribution fees to Rydex Distributors, Inc. (the "Distributor") and other
firms that provide distribution services ("Service Providers"). If a Service
Provider provides distribution services, the Funds 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 will, in turn,
pay the Service Provider out of its fees. No such fee is currently charged to
the Funds.
4. CAPITAL
At October 31, 2008, there were an unlimited number of no par value shares of
beneficial interest authorized. There is a minimum transaction fee per
transaction to those persons purchasing or redeeming Creation Units. An
additional charge of up to three times the standard transaction fee may be
imposed for purchases and redemptions effected outside the National Securities
Clearing Corporation usual clearing process or for cash. Such transactions are
generally permitted on an in-kind basis, with a balancing cash component to
equate the transaction to the net asset value per unit of the Fund on the
transaction date. Transaction fees are not charged to or paid by the Fund. The
minimum transaction fees are:
<Table>
<Caption>
MINIMUM
TRANSACTION FEE
---------------
Rydex S&P 500 Pure Value ETF....................................... $1,000
Rydex S&P 500 Pure Growth ETF...................................... 1,000
Rydex S&P MidCap 400 Pure Value ETF................................ 750
Rydex S&P MidCap 400 Pure Growth ETF............................... 750
Rydex S&P SmallCap 600 Pure Value ETF.............................. 1,000
Rydex S&P SmallCap 600 Pure Growth ETF............................. 1,000
Rydex S&P Equal Weight Consumer Discretionary ETF.................. 750
Rydex S&P Equal Weight Consumer Staples ETF........................ 500
Rydex S&P Equal Weight Energy ETF.................................. 500
Rydex S&P Equal Weight Financials ETF.............................. 750
Rydex S&P Equal Weight Health Care ETF............................. 500
Rydex S&P Equal Weight Industrials ETF............................. 500
Rydex S&P Equal Weight Materials ETF............................... 500
Rydex S&P Equal Weight Technology ETF.............................. 750
Rydex S&P Equal Weight Utilities ETF............................... 500
</Table>
89 ANNUAL REPORT
NOTES TO FINANCIAL STATEMENTS (continued)
- --------------------------------------------------------------------------------
5. INVESTMENT TRANSACTIONS
For the year ended October 31, 2008 the Funds had in-kind contributions and in-
kind redemptions as follows:
<Table>
<Caption>
SUBSCRIPTIONS REDEMPTIONS
------------- -----------
Rydex S&P 500 Pure Value ETF................................. $ 9,292,276 $14,411,568
Rydex S&P 500 Pure Growth ETF................................ 15,115,309 34,269,664
Rydex S&P MidCap 400 Pure Value ETF.......................... 2,924,913 6,303,437
Rydex S&P MidCap 400 Pure Growth ETF......................... 31,956,825 25,069,207
Rydex S&P SmallCap 600 Pure Value ETF........................ 18,820,070 5,113,009
Rydex S&P SmallCap 600 Pure Growth ETF....................... 3,513,297 4,254,691
Rydex S&P Equal Weight Consumer Discretionary ETF............ 77,058,727 96,304,982
Rydex S&P Equal Weight Consumer Staples ETF.................. 6,962,914 2,432,602
Rydex S&P Equal Weight Energy ETF............................ 6,874,552 6,560,402
Rydex S&P Equal Weight Financials ETF........................ 8,445,313 --
Rydex S&P Equal Weight Health Care ETF....................... 61,094,105 16,309,360
Rydex S&P Equal Weight Industrials ETF....................... 7,018,597 5,533,450
Rydex S&P Equal Weight Materials ETF......................... 4,426,873 5,539,678
Rydex S&P Equal Weight Technology ETF........................ 15,430,437 18,879,668
Rydex S&P Equal Weight Utilities ETF......................... 2,496,243 2,071,848
</Table>
Purchases and sales of investment securities (excluding short-term investments,
U.S. government and government agency obligations) for the Funds were as
follows:
<Table>
<Caption>
PURCHASES SALES
----------- -----------
Rydex S&P 500 Pure Value ETF.................................. $19,418,873 $13,922,391
Rydex S&P 500 Pure Growth ETF................................. 12,696,003 15,719,211
Rydex S&P MidCap 400 Pure Value ETF........................... 8,554,269 8,444,582
Rydex S&P MidCap 400 Pure Growth ETF.......................... 11,244,201 10,018,714
Rydex S&P SmallCap 600 Pure Value ETF......................... 12,151,918 12,104,211
Rydex S&P SmallCap 600 Pure Growth ETF........................ 4,162,950 3,888,267
Rydex S&P Equal Weight Consumer Discretionary ETF............. 3,963,587 3,519,206
Rydex S&P Equal Weight Consumer Staples ETF................... 1,593,497 1,692,133
Rydex S&P Equal Weight Energy ETF............................. 4,100,756 4,754,584
Rydex S&P Equal Weight Financials ETF......................... 1,965,583 1,793,667
Rydex S&P Equal Weight Health Care ETF........................ 8,331,437 8,519,884
Rydex S&P Equal Weight Industrials ETF........................ 2,236,670 2,576,680
Rydex S&P Equal Weight Materials ETF.......................... 1,510,272 1,553,809
Rydex S&P Equal Weight Technology ETF......................... 5,793,278 5,474,232
Rydex S&P Equal Weight Utilities ETF.......................... 936,490 1,042,672
</Table>
There were no purchases or sales of U.S. government or government agency
obligations for the year ended October 31, 2008.
At October 31, 2008, the identified cost of investments in securities owned by
each fund for federal income tax purposes and the gross unrealized appreciation
and depreciation were as follows:
<Table>
<Caption>
GROSS GROSS NET UNREALIZED
IDENTIFIED UNREALIZED UNREALIZED APPRECIATION/
COST APPRECIATION DEPRECIATION (DEPRECIATION)
----------- ------------ ------------ --------------
Rydex S&P 500 Pure Value ETF.................... $30,767,251 $ 64,221 $(12,883,768) $(12,819,547)
Rydex S&P 500 Pure Growth ETF................... 38,957,515 554,612 (15,125,530) (14,570,918)
Rydex S&P MidCap 400 Pure Value ETF............. 17,173,356 66,585 (7,113,691) (7,047,106)
Rydex S&P MidCap 400 Pure Growth ETF............ 27,076,022 -- (9,490,805) (9,490,805)
Rydex S&P SmallCap 600 Pure Value ETF........... 35,695,858 1,610,944 (11,799,607) (10,188,664)
Rydex S&P SmallCap 600 Pure Growth ETF.......... 10,041,345 147,023 (2,940,766) (2,793,743)
Rydex S&P Equal Weight Consumer Discretionary
ETF........................................... 7,008,844 8,507 (3,296,530) (3,288,024)
Rydex S&P Equal Weight Consumer Staples ETF..... 11,791,924 -- (1,432,261) (1,432,261)
Rydex S&P Equal Weight Energy ETF............... 9,533,969 37,500 (3,614,115) (3,576,615)
Rydex S&P Equal Weight Financials ETF........... 14,017,582 319,324 (3,632,479) (3,313,155)
Rydex S&P Equal Weight Health Care ETF.......... 62,624,504 562,045 (14,659,429) (14,097,384)
Rydex S&P Equal Weight Industrials ETF.......... 9,923,842 82,029 (2,864,236) (2,782,207)
Rydex S&P Equal Weight Materials ETF............ 7,399,099 47,902 (2,295,458) (2,247,556)
Rydex S&P Equal Weight Technology ETF........... 14,105,470 -- (6,609,409) (6,609,409)
Rydex S&P Equal Weight Utilities ETF............ 5,770,026 -- (1,643,922) (1,643,922)
</Table>
6. ACQUISTION OF RYDEX INVESTMENTS AND THE DISTRIBUTOR
At the close of business on January 17, 2008, Rydex NV, Inc., comprised of Rydex
Investments, together with several other Rydex entities, was acquired by
Security Benefit Corporation ("Security Benefit"), a financial services firm
that provides a broad variety of financial programs to investors in the advisor,
banking, education, government, institutional, and qualified plan markets (the
"Transaction"). As a result of the Transaction's completion, Rydex Investments
and the Distributor are wholly-owned subsidiaries of
90
NOTES TO FINANCIAL STATEMENTS (concluded)
- --------------------------------------------------------------------------------
Security Benefit. While the Transaction has no material impact on the Funds or
their shareholders, it resulted in a change of control of Rydex Investments,
which in turn caused the termination of the investment advisory agreement
between Rydex Investments and the Funds.
A new investment advisory agreement between Rydex Investments and the Funds was
approved under substantially the same terms as the previous investment advisory
agreement (the "New Agreement"). This New Agreement was approved by
shareholders, via proxy, and took effect upon the closing of the Transaction.
The Transaction had no impact on the day-to-day operations of Rydex Investments,
the fees payable to Rydex Investments under the New Agreement, or the persons
responsible for the management of the Funds.
91 ANNUAL REPORT
REPORT OF INDEPENDENT REGISTERED PUBLIC
ACCOUNTING FIRM
- --------------------------------------------------------------------------------
The Board of Trustees and Shareholders of Rydex ETF Trust
We have audited the accompanying statements of assets and liabilities, including
the schedules of investments, of Rydex ETF Trust (the "Trust"), comprising,
respectively, Rydex S&P 500 Pure Value ETF, Rydex S&P 500 Pure Growth ETF,
Rydex, S&P MidCap 400 Pure Value ETF, Rydex S&P MidCap 400 Pure Growth ETF,
Rydex S&P SmallCap 600 Pure Value ETF, Rydex S&P SmallCap 600 Pure Growth ETF,
Rydex S&P Equal Weight Consumer Discretionary ETF, Rydex S&P Equal Weight
Consumer Staples ETF, Rydex S&P Equal Weight Energy ETF, Rydex S&P Equal Weight
Financials ETF, Rydex S&P Equal Weight Health Care ETF, Rydex S&P Equal Weight
Industrials ETF, Rydex S&P Equal Weight Materials ETF, Rydex S&P Equal Weight
Technology ETF, Rydex S&P Equal Weight Utilities ETF (the "Funds"), fifteen of
the funds comprising Rydex ETF Trust (the "Trust"), as of October 31, 2008, and
the related statements of operations for the year then ended, the statements of
changes in net assets for each of the two years in the period then ended and the
financial highlights for the period indicated therein. These financial
statements and financial highlights are the responsibility of the Trust's
management. Our responsibility is to express an opinion on these financial
statements and financial highlights based on our audits.
We conducted our audits in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements and financial highlights are free of material misstatement. We were
not engaged to perform an audit of the Trust's internal control over financial
reporting. Our audits included consideration of internal control over financial
reporting as a basis for designing audit procedures that are appropriate in the
circumstances, but not for the purpose of expressing an opinion on the
effectiveness of the Trust's internal control over financial reporting.
Accordingly, we express no such opinion. An audit also includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements and financial highlights, assessing the accounting principles used
and significant estimates made by management, and evaluating the overall
financial statement presentation. Our procedures included confirmation of
securities owned as of October 31, 2008, by correspondence with the custodian
and brokers or by other appropriate auditing procedures where replies from
brokers were not received. We believe that our audits provide a reasonable basis
for our opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of each
of the Funds of the Rydex ETF Trust at October 31, 2008 mentioned above, the
results of their operations for the year then ended, the changes in their net
assets for each of the two years in the period then ended and the financial
highlights for the period indicated therein, in conformity with U.S. generally
accepted accounting principles.
ERNST & YOUNG LOGO
Boston, Massachusetts
December 23, 2008
92
SUPPLEMENTAL INFORMATION (Unaudited)
- --------------------------------------------------------------------------------
FEDERAL INCOME TAX INFORMATION
For federal income tax purposes, the following information is furnished for the
year ended October 31, 2008 in respect to percentage of ordinary distributions
(net investment income plus short-term gains) which qualify for corporate
dividends received deduction, designated qualified dividend income eligible for
reduced taxes and distributions from long-term capital gains. These long-term
capital gains distributions may be subject to a maximum tax rate of 15% as
provided by the internal revenue code. The funds below hereby designate the
maximum amount of such dividend allowable up to the amount of the dividends paid
during the year.
<Table>
<Caption>
DIVIDEND LONG TERM QUALIFIED
RECEIVED CAPITAL GAINS DIVIDEND
DEDUCTION DISTRIBUTION INCOME
--------- ------------- ---------
Rydex S&P 500 Pure Value ETF............................ 100.00% $ -- $957,765
Rydex S&P 500 Pure Growth ETF........................... 100.00% -- 408,338
Rydex S&P MidCap 400 Pure Value ETF..................... 99.83% -- 356,356
Rydex S&P MidCap 400 Pure Growth ETF.................... 73.08% -- 77,234
Rydex S&P SmallCap 600 Pure Value ETF................... 95.00% -- 563,755
Rydex S&P SmallCap 600 Pure Growth ETF.................. 100.00% -- 49,093
Rydex S&P Equal Weight Consumer Discretionary ETF....... 100.00% -- 197,459
Rydex S&P Equal Weight Consumer Staples ETF............. 100.00% -- 221,499
Rydex S&P Equal Weight Energy ETF....................... 28.06% 277,191 116,720
Rydex S&P Equal Weight Financials ETF................... 100.00% -- 159,704
Rydex S&P Equal Weight Health Care ETF.................. 99.00% -- 287,848
Rydex S&P Equal Weight Industrials ETF.................. 43.90% 106,100 144,102
Rydex S&P Equal Weight Materials ETF.................... 100.00% -- 185,402
Rydex S&P Equal Weight Technology ETF................... 100.00% -- 112,538
Rydex S&P Equal Weight Utilities ETF.................... 97.79% -- 209,781
</Table>
PROXY VOTING INFORMATION
A description of the policies and procedures that the Trust uses to determine
how to vote proxies relating to securities held in the Funds' portfolios is
available, without charge and upon request, by calling 1-800-820-0888. This
information is also available from the EDGAR database on the SEC's website at
http://www.sec.gov.
Information regarding how the Funds voted proxies for portfolio securities, if
applicable, during the most recent 12-month period ended June 30, 2008 is also
available, without charge and upon request, by (i) calling 1-800-820-0888; or
accessing the Trust's Form N-PX on the SEC's website at, http://www.sec.gov.
93 ANNUAL REPORT
SUPPLEMENTAL INFORMATION (Unaudited) (concluded)
- --------------------------------------------------------------------------------
PROXY RESULTS
Shareholders of Rydex ETF Trust voted on the following proposal at a meeting of
shareholders held on October 4, 2007. The description of the proposal and number
of shares voted are as follows:
<Table>
<Caption>
SHARES VOTED SHARES VOTED SHARES VOTED
FOR AGAINST ABSTAIN
------------ ------------ ------------
1. To approve an Investment Management Advisory
Agreement between Rydex ETF Trust and PADCO Advisors
Inc.
Rydex S&P 500 Pure Value ETF.......................... 651,883 15,376 14,933
Rydex S&P 500 Pure Growth ETF......................... 772,840 300 4,564
Rydex S&P MidCap 400 Pure Value ETF................... 262,397 1,083 81,321
Rydex S&P MidCap 400 Pure Growth ETF.................. 111,411 -- 49,439
Rydex S&P SmallCap 600 Pure Value ETF................. 340,514 32,601 4,928
Rydex S&P SmallCap 600 Pure Growth ETF................ 167,819 37 2,349
Rydex S&P Equal Weight Consumer Discretionary ETF..... 927,061 654 1,435
Rydex S&P Equal Weight Consumer Staples ETF........... 138,151 135 --
Rydex S&P Equal Weight Energy ETF..................... 90,565 495 615
Rydex S&P Equal Weight Financials ETF................. 79,217 565 --
Rydex S&P Equal Weight Health Care ETF................ 370,751 250 300
Rydex S&P Equal Weight Industrials ETF................ 98,069 534 89
Rydex S&P Equal Weight Materials ETF.................. 68,217 306 535
Rydex S&P Equal Weight Technology ETF................. 188,409 466 98
Rydex S&P Equal Weight Utilities ETF.................. 79,362 230 --
</Table>
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 Trust's 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.
94
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
<Table>
<Caption>
NAME, POSITION LENGTH OF SERVICE
AND AS TRUSTEE NUMBER OF FUNDS
YEAR OF BIRTH (YEAR BEGAN) OVERSEEN
- ---------------- ----------------------------------------- ----------------
CARL G. Rydex Series Funds - 2004 158
VERBONCOEUR* Rydex Variable Trust - 2004
Trustee, Rydex Dynamic Funds - 2004
President (1952) Rydex ETF Trust - 2004
</Table>
PRINCIPAL OCCUPATIONS DURING PAST FIVE YEARS: Treasurer of Rydex Specialized
Products, LLC (2005 to present); Chief Executive Officer of Rydex Specialized
Products, LLC (2005 to 2008); Chief Executive Officer of Rydex Investments and
Rydex Distributors, Inc. (2003 to present). Executive Vice President of Rydex
Investments (2000 to 2003)
<Table>
---------------------
MICHAEL P. Rydex Series Funds - 2005 150
BYRUM* Rydex Variable Trust - 2005
Trustee, Vice Rydex Dynamic Funds - 2005
President and Rydex ETF Trust - 2005
Secretary (1970)
</Table>
PRINCIPAL OCCUPATIONS DURING PAST FIVE YEARS: Chief Investment Officer of Rydex
Investments (2003 to present); Secretary of Rydex Specialized Products, LLC
(2005 to 2008); 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
2006); President of Rydex Investments (2004 to present); Chief Operating Officer
of Rydex Investments and Rydex Distributors, Inc. (2003 to 2004)
- --------------------------------------------------------------------------------
INDEPENDENT TRUSTEES
<Table>
<Caption>
NAME, POSITION LENGTH OF SERVICE
AND AS TRUSTEE NUMBER OF FUNDS
YEAR OF BIRTH (YEAR BEGAN) OVERSEEN
- ---------------- ----------------------------------------- ----------------
JOHN O. DEMARET Rydex Series Funds - 1997 150
Trustee, Rydex Variable Trust - 1998
Chairman of the Rydex Dynamic Funds - 1999
Board (1940) Rydex ETF Trust - 2003
</Table>
PRINCIPAL OCCUPATIONS DURING PAST FIVE YEARS: Retired
<Table>
---------------------
COREY A. Rydex Series Funds - 1993 150
COLEHOUR Rydex Variable Trust - 1998
Trustee (1945) Rydex Dynamic Funds - 1999
Rydex ETF Trust - 2003
</Table>
PRINCIPAL OCCUPATIONS DURING PAST FIVE YEARS: Retired (2006 to present); Owner
and President of Schield Management, registered investment advisor (2005 to
2006); Senior Vice President of Marketing and Co-Owner of Schield Management
Company, registered investment advisor (1985 to 2005)
<Table>
---------------------
J. KENNETH Rydex Series Funds - 1995 150
DALTON Rydex Variable Trust - 1998
Trustee (1941) Rydex Dynamic Funds - 1999
Rydex ETF Trust - 2003
</Table>
PRINCIPAL OCCUPATIONS DURING PAST FIVE YEARS: Mortgage Banking Consultant and
Investor, The Dalton Group
<Table>
---------------------
WERNER E. KELLER Rydex Series Funds - 2005 150
Trustee (1940) Rydex Variable Trust - 2005
Rydex Dynamic Funds - 2005
Rydex ETF Trust - 2005
</Table>
PRINCIPAL OCCUPATIONS DURING PAST FIVE YEARS: Retired (2001 to present);
Chairman, Centurion Capital Management (1991 to 2001)
<Table>
---------------------
THOMAS F. LYDON, Rydex Series Funds - 2005 150
JR. Rydex Variable Trust - 2005
Trustee (1960) Rydex Dynamic Funds - 2005
Rydex ETF Trust - 2005
</Table>
PRINCIPAL OCCUPATIONS DURING PAST FIVE YEARS: President, Global Trends
Investments
<Table>
---------------------
PATRICK T. Rydex Series Funds - 1997 150
MCCARVILLE Rydex Variable Trust - 1998
Trustee (1942) Rydex Dynamic Funds - 1999
Rydex ETF Trust - 2003
</Table>
PRINCIPAL OCCUPATIONS DURING PAST FIVE YEARS: Founder and Chief Executive
Officer, Par Industries, Inc.
<Table>
---------------------
ROGER SOMERS Rydex Series Funds - 1993 150
Trustee (1944) Rydex Variable Trust - 1998
Rydex Dynamic Funds - 1999
Rydex ETF Trust - 2003
</Table>
PRINCIPAL OCCUPATIONS DURING PAST FIVE YEARS: Owner, Arrow Limousine
- --------------------------------------------------------------------------------
95 ANNUAL REPORT
INFORMATION ON BOARD OF TRUSTEES AND OFFICERS (concluded)
- --------------------------------------------------------------------------------
INDEPENDENT TRUSTEES (CONT.)
EXECUTIVE OFFICERS
<Table>
<Caption>
NAME, POSITION AND PRINCIPAL OCCUPATIONS DURING PAST FIVE
YEAR OF BIRTH YEARS
- ----------------------------------------- -----------------------------------------
NICK BONOS* Chief Financial Officer of Rydex
Vice President and Treasurer (1963) Specialized Products, LLC (2005 to
present); Vice President and Treasurer of
Rydex Series Funds, Rydex Variable Trust,
Rydex Dynamic Funds, and Rydex ETF Trust
(2003 to present); Senior Vice President
of Rydex Investments (2003 to present);
Vice President and Treasurer of Rydex
Capital Partners SPhinX Fund (2003 to
2006); Vice President of Accounting of
Rydex Investments (2000 to 2003)
JOANNA M. HAIGNEY* Chief Compliance Officer Rydex Series
Chief Compliance Officer and Secretary Funds, Rydex Variable Trust, and Rydex
(1966) Dynamic Funds (2004 to present);
Secretary of Rydex Series Funds, Rydex
Variable Trust, and Rydex Dynamic Funds
(2000 to present); Secretary of Rydex ETF
Trust (2002 to present); Vice President
of Compliance of Rydex Investments (2000
to present); Secretary of Rydex Capital
Partners SPhinX Fund (2003 to 2006)
JOSEPH ARRUDA* Assistant Treasurer of Rydex Series
Assistant Treasurer (1966) Funds, Rydex Variable Trust, Rydex
Dynamic Funds, Rydex ETF Trust (2006 to
present); Senior Vice President of Rydex
Investments (2008 to present); Vice
President of Rydex Investments (2004 to
2008); Director of Accounting of Rydex
Investments (2003 to 2004); Vice
President of Mutual Funds, State Street
Bank & Trust (2000 to 2003)
PAULA BILLOS* Controller of Rydex Series Funds, Rydex
Controller (1974) Variable Trust, Rydex Dynamic Funds,
Rydex ETF Trust (2006 to present);
Director of Fund Administration of Rydex
Investments (2001 to present)
</Table>
* Officers of the Funds are deemed to be "interested persons" of the Trust,
within the meaning of Section 2(a)(19) of the 1940 Act, inasmuch as this
person is affiliated with the Rydex Investments.
96
[GRAPHIC]
[RYDEX INVESTMENTS LOGO]
9601 Blackwell Road o Suite 500 o Rockville, MD 20850
www.rydexinvestments.com o 800.820.0888
ETF2-ANN-1008X1009
[GRAPHIC]
OCTOBER 31, 2008
RYDEX ETF TRUST
ANNUAL REPORT
RYDEX 2x S&P 500 ETF
RYDEX INVERSE 2x S&P 500 ETF
RYDEX 2x S&P MIDCAP 400 ETF
RYDEX INVERSE 2x S&P MIDCAP 400 ETF
RYDEX 2x RUSSELL 2000(R) ETF
RYDEX INVERSE 2x RUSSELL 2000(R) ETF
RYDEX 2x S&P SELECT SECTOR ENERGY ETF
RYDEX INVERSE 2x S&P SELECT SECTOR ENERGY ETF
RYDEX 2x S&P SELECT SECTOR FINANCIAL ETF
RYDEX INVERSE 2x S&P SELECT SECTOR FINANCIAL ETF
RYDEX 2x S&P SELECT SECTOR TECHNOLOGY ETF
RYDEX INVERSE 2x S&P SELECT SECTOR TECHNOLOGY ETF
RYDEX 2x S&P SELECT SECTOR HEALTH CARE ETF
RYDEX INVERSE 2x S&P SELECT SECTOR HEALTH CARE ETF
[RYDEX INVESTMENTS LOGO]
ANNUAL REPORT 1
TABLE OF CONTENTS
- --------------------------------------------------------------------------------
<Table>
LETTER TO OUR SHAREHOLDERS........................ 2
A BRIEF NOTE ON THE COMPOUNDING OF RETURNS........ 4
FEES & EXPENSES................................... 5
MANAGER'S ANALYSIS................................ 6
SCHEDULE OF INVESTMENTS........................... 27
STATEMENTS OF ASSETS AND LIABILITIES.............. 70
STATEMENTS OF OPERATIONS.......................... 74
STATEMENTS OF CHANGES IN NET ASSETS............... 78
FINANCIAL HIGHLIGHTS.............................. 85
NOTES TO FINANCIAL STATEMENTS..................... 92
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM'S
REPORT.......................................... 101
SUPPLEMENTAL INFORMATION.......................... 102
</Table>
ANNUAL REPORT 2
- --------------------------------------------------------------------------------
DEAR SHAREHOLDER:
Rydex is a proud participant in the ETF space with $1.7 billion in ETF assets
and more than 30 exchange traded funds. Due to their convenience, transparency
and ability to provide access to difficult to reach areas of the market, ETFs
can play an important role in investor portfolios.
Professional investment advisors are increasingly using ETFs in their
portfolios. A 2008 survey of registered investment advisors (RIAs) by Rydex
AdvisorBenchmarking(TM) revealed that three-quarters of RIAs now use ETFs and
that ETFs now slightly edge out the use of stocks in advisor portfolios. Rydex
believes that investor knowledge is paramount when contemplating investment
options. While advisor ETF use is skyrocketing, because investors still have
room for education on ETFs, Rydex now offers ETF Essentials(TM) -- a
comprehensive guide to ETFs -- to help advisors educate their clients on the
nuances of ETFs. The program presents information on ETF topics in simple
understandable language and is available via print and online. It's also free
and can be requested on www.rydexinvestments.com web site.
MARKET CONDITIONS
The last 12 months proved to be the most extraordinarily difficult period for
investors in nearly a century. The crisis that unfolded during the summer months
hit nearly every conceivable asset class, resulting in huge declines in wealth
regardless of how investors had structured their portfolios. Other than treasury
bills and the U.S. dollar, no investment category was spared the panic that
washed over the world's financial markets. In the U.S., the major stock market
averages lost more than 20% of their value, while international markets fared
worse. Emerging market stocks were hit particularly hard as shown by the nearly
60% decline in Chinese share prices. Although commodity prices rose over the
period, that masks an astounding plunge from mid-summer highs. From early
July -- when oil rose to nearly $150/barrel, commodities -- led by oil -- fell
more than 30%. Sector selection strategies offered little respite. Only consumer
staples stocks, the most defensive in the S&P 500 Sector Index series, provided
some degree of protection as that index held losses to less than 1.5%. Other
traditional safe havens such as utilities and health care were down between
15% -- 25% while financial stocks, which are at the epicenter of the crisis,
fell nearly 43%.
The events of late September completely overwhelmed everything that had come
before. In an incredibly brief period, the entire global financial system seized
up as the lubricant of any economy -- bank lending -- came to a complete halt.
The resulting crash in global stock markets was as steep and deep as anything
witnessed since the crash of 1929 and continues to this day. The Wall Street
model of large, aggressive, risk-taking investment banks was completely swept
aside as financial titans such as Merrill Lynch, Morgan Stanley, Goldman Sachs
and Lehman Brothers collapsed, merged with, or were reborn as commercial banks.
Financial dominos tumbled as a wave of commercial bank failures -- the most
since the S&L crisis of the 1990s -- unfolded in the third quarter, culminating
with the collapse of Washington Mutual, the largest bank failure in U.S.
history. The other huge and profound shift is the nationalization of the global
financial system. The takeover of Fannie Mae and Freddie Mac and AIG, the
seizure of IndyMac Bank and Washington Mutual and the forced merger of Wachovia,
along with blanket guarantees of mortgage-backed securities, whole loans, intra-
bank loans, money market funds and bank deposits (both here and in Europe) point
to a near takeover of the global financial system by national governments. In
this history-making period, governments at all levels moved with unprecedented
speed, scope and coordination to save the financial system and with it the
global economy. In the U.S. this culminated with a $700 billion plan put forward
by the U.S. Treasury to essentially buy up all the bad mortgage assets clogging
the financial system. Rejection of that plan by the House of Representatives
late in September sent the markets into a tailspin with the Dow suffering its
biggest point drop in history and sending the index to three-year lows. Treasury
bill yields fell to near zero and interest rates on longer-dated treasuries fell
to a decade low in a massive flight to safety.
It is not all doom and gloom, however. This environment has broken the commodity
bubble and has resulted in a huge slowdown in global inflation. This helps the
emerging markets, whose economies and markets have been pummeled by the rise in
food and energy costs. It has also ushered in a period of dollar strength, which
gives the Fed additional room to ease. Moreover, interest rates could hardly be
lower and stocks are cheaper than they have been in some time. With the massive
amounts of liquidity pumped into the system, stocks could rally sharply in the
months ahead -- they have repeatedly shown signs of doing throughout the crisis.
Having gone through at least four false bottoms so far this year -- Societe
Generale, Bear Stearns, Fannie Mae /Freddie Mac and Lehman Brothers -- the
question is: Can any rally be sustained? The key to that question is fairly
straightforward. The allocation of credit in the bond and money markets needs to
resume. No recovery in stocks is possible without it. While capital has been
thrown at the markets and recovery plans announced, the mountain of bad debt is
still sitting on bank balance sheets. The fuel is in place for the markets to
recover -- they always do. This process is likely to be lengthy, though.
Navigating through this difficult environment will require carefully thought-out
investment strategies and the discipline to stay the course.
ANNUAL REPORT 3
- --------------------------------------------------------------------------------
These tumultuous markets did not leave the ETF space unscathed. According to the
Investment Company Institute, over the past 12 months, while the number of ETFs
on the market has increased 19% (from 586 in October 2007 to 698 in October
2008), ETF assets decreased $105.86 billion, or 18%. Despite the market's
erosion of assets, with their numerous benefits, ETFs can provide a suitable
choice for investors looking for convenient access to the markets.
We appreciate the trust you have placed in our firm's quality and integrity by
investing with us. It is our goal to continue to offer innovative ETF choices to
meet your investment needs.
Sincerely,
/s/ DAVID C. REILLY, CFA
David C. Reilly, CFA
Director of Portfolio Strategies
ANNUAL REPORT 4
A BRIEF NOTE ON THE COMPOUNDING OF RETURNS
- --------------------------------------------------------------------------------
The 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.
<Table>
<Caption>
INDEX INDEX FUND FUND FUND
LEVEL PERFORMANCE EXPECTATION NAV PERFORMANCE ASSESSMENT
- ---------------------------------------------------------------------------------------------------------------
Start 100 $10.00
Day 1 106 6.00% 9.00% $10.90 9.00% In line
Day 2 99 (6.60)% (9.90)% $ 9.82 (9.90)% In line
Cumulative (1.00)% (1.50)% (1.80)% (0.30)%
- ---------------------------------------------------------------------------------------------------------------
</Table>
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 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.
ANNUAL REPORT 5
- --------------------------------------------------------------------------------
SHAREHOLDER EXPENSE EXAMPLE
As a shareholder of the Rydex ETF Trust, you incur transaction costs such as
creation and redemption fees or brokerage charges, and ongoing costs including
advisory fees, trustee fees and, if applicable, distribution fees. All other
Trust expenses are paid by the advisor. This Example is intended to help you
understand your ongoing costs (in dollars) of investing in a Fund and to compare
these costs with the ongoing costs of investing in other mutual funds.
The example in the table is based on an investment of $1,000 invested on April
30, 2008 and held for the six months ended October 31, 2008.
ACTUAL EXPENSES
The first table below provides information about actual account values and
actual expenses. You may use the information in this table, together with the
amount you invested, to estimate the expenses that you incurred over the period.
Simply divide your account value by $1,000 (for example, an $8,600 account value
divided by $1,000 = 8.6), then multiply the result by the number in the first
table under the heading entitled "Expenses Paid During the Six-Month Period" to
estimate the expenses attributable to your investment during this period.
HYPOTHETICAL EXAMPLE FOR COMPARISON PURPOSES
The second table below provides information about hypothetical account values
and hypothetical expenses based on a Fund's actual expense ratio and an assumed
rate of return of 5% per year before expenses, which is not a Fund's actual
return. Thus, you should not use the hypothetical account values and expenses to
estimate the actual ending account balance or your expenses for the period.
Rather, these figures are provided to enable you to compare the ongoing costs of
investing in a Fund and other funds. To do so, compare this 5% hypothetical
example with the 5% hypothetical examples that appear in the shareholder reports
of other funds.
Please note that the expenses shown in the table are meant to highlight your
ongoing costs only and do not reflect any transaction costs, such as creation
and redemption fees, or brokerage charges. Therefore, the second table is useful
in comparing ongoing costs only, and will not help you determine the relative
total costs of owning different funds. In addition, if these transaction costs
were included, your costs would have been higher.
<Table>
<Caption>
BEGINNING ENDING EXPENSES PAID
ACCOUNT ACCOUNT DURING
VALUE VALUE SIX-MONTH PERIOD
4/30/08 10/31/08 4/30/08 TO 10/31/08
--------- --------- -------------------
ACTUAL
Rydex 2x S&P 500 ETF*................................. $1,000 $2,025.60 $5.32
Rydex Inverse 2x S&P 500 ETF*......................... $1,000 $ 327.90 $2.34
Rydex 2x MidCap 400 ETF*.............................. $1,000 $ 298.70 $2.29
Rydex Inverse 2x S&P MidCap 400 ETF*.................. $1,000 $2,218.10 $5.66
Rydex 2x Russell 2000 ETF*............................ $1,000 $ 340.90 $2.36
Rydex Inverse 2x Russell 2000 ETF*.................... $1,000 $1,836.20 $4.99
Rydex 2x S&P Select Sector Energy ETF**............... $1,000 $ 270.60 $1.74
Rydex Inverse 2x S&P Select Sector Energy ETF**....... $1,000 $1,497.50 $3.42
Rydex 2x S&P Select Sector Financial ETF**............ $1,000 $ 354.90 $1.85
Rydex Inverse 2x S&P Select Sector Financial ETF**.... $1,000 $ 958.10 $2.68
Rydex 2x S&P Select Sector Technology ETF**........... $1,000 $ 416.40 $1.94
Rydex Inverse 2x S&P Select Sector Technology ETF**... $1,000 $1,727.90 $3.73
Rydex 2x S&P Select Sector Health Care ETF**.......... $1,000 $ 706.70 $2.33
Rydex Inverse 2x S&P Select Sector Health Care ETF**.. $1,000 $1,120.40 $2.90
HYPOTHETICAL (ASSUMING A 5% RETURN BEFORE EXPENSES)
Rydex 2x S&P 500 ETF*................................. $1,000 $1,021.62 $3.56
Rydex Inverse 2x S&P 500 ETF*......................... $1,000 $1,021.62 $3.56
Rydex 2x MidCap 400 ETF*.............................. $1,000 $1,021.62 $3.56
Rydex Inverse 2x S&P MidCap 400 ETF*.................. $1,000 $1,021.62 $3.56
Rydex 2x Russell 2000 ETF*............................ $1,000 $1,021.62 $3.56
Rydex Inverse 2x Russell 2000 ETF*.................... $1,000 $1,021.62 $3.56
Rydex 2x S&P Select Sector Energy ETF**............... $1,000 $1,016.80 $2.76
Rydex Inverse 2x S&P Select Sector Energy ETF**....... $1,000 $1,016.80 $2.76
Rydex 2x S&P Select Sector Financial ETF**............ $1,000 $1,016.80 $2.76
Rydex Inverse 2x S&P Select Sector Financial ETF**.... $1,000 $1,016.80 $2.76
Rydex 2x S&P Select Sector Technology ETF**........... $1,000 $1,016.80 $2.76
Rydex Inverse 2x S&P Select Sector Technology ETF**... $1,000 $1,016.80 $2.76
Rydex 2x S&P Select Sector Health Care ETF**.......... $1,000 $1,016.80 $2.76
Rydex Inverse 2x S&P Select Sector Health Care ETF**.. $1,000 $1,016.80 $2.76
</Table>
- --------
* Expenses are equal to the Fund's annualized expense ratio of 0.70%
multiplied by the average account value over the period, multiplied by
184/366 (to reflect one-half year period).
** Fund commenced operations on June 10, 2008. Expenses are equal to the
Fund's annualized expense ratio of 0.70% multiplied by the average account
value over the period, multiplied by 143/366 (to reflect the period from
inception to date).
ANNUAL REPORT 6
RYDEX 2x S&P 500 ETF
MANAGER'S ANALYSIS (Unaudited)
- --------------------------------------------------------------------------------
Rydex 2x S&P 500 ETF returned -62.68% while the S&P 500 returned -34.11% over
the same time period. Financials were the biggest performance detraction, down
48.99% over the same period, followed by the beaten-down technology sector,
which returned -40.69%. While they were negative over the same time period,
defense, consumer staples and health care better weathered the economic storm.
Since its inception on 11/5/2007, Rydex 2x S&P 500 ETF maintained a daily
correlation of 100% to its benchmark of 200% of the daily price movement of the
S&P 500.
The year was marked by stunning failures in the financial markets, brought on by
the implosion of the housing-backed debt markets, historic market volatility and
a global economic meltdown. Major financial institutions either went bankrupt or
had to receive assistance from the federal government in the form of the
Department of Treasury's Troubled Assets Relief (TARP) Program. Inter-bank
lending nearly ground to a halt as credit became a major concern globally. The
Volatility Index(R) (VIX) Index jumped to historic highs in September and
October as the financial crisis culminated with the Securities and Exchange
Commission (SEC) taking emergency action to ban the short selling of more than
900 securities. This increased volatility in the markets contributed widely to
the daily tracking variances seen in September and October.
The apparent discrepancy between the leverage and unleveraged indices is the
result of compounding, which is described briefly on page 4 of this report.
CUMULATIVE FUND PERFORMANCE: NOVEMBER 5, 2007 - OCTOBER 31, 2008
(PERFORMANCE GRAPH)
<Table>
<Caption>
RYDEX 2X S&P 500
S&P 500 TOTAL RETURN
ETF INDEX
-------- ------------
11/5/2007 10000 10000
11/6/2007 9757 10121
11/7/2007 10332 9829
11/8/2007 10352 9823
11/9/2007 10667 9683
11/10/2007 10667 9683
11/11/2007 10667 9683
11/12/2007 10880 9587
11/13/2007 10244 9869
11/14/2007 10399 9802
11/15/2007 10667 9673
11/16/2007 10571 9723
11/17/2007 10571 9723
11/18/2007 10571 9723
11/19/2007 10940 9554
11/20/2007 10845 9597
11/21/2007 11209 9445
11/22/2007 11209 9445
11/23/2007 10841 9605
11/24/2007 10841 9605
11/25/2007 10841 9605
11/26/2007 11351 9382
11/27/2007 10997 9523
11/28/2007 10368 9798
11/29/2007 10367 9803
11/30/2007 10205 9879
12/1/2007 10205 9879
12/2/2007 10205 9879
12/3/2007 10337 9822
12/4/2007 10475 9757
12/5/2007 10155 9911
12/6/2007 9851 10061
12/7/2007 9901 10043
12/8/2007 9901 10043
12/9/2007 9901 10043
12/10/2007 9744 10119
12/11/2007 10252 9863
12/12/2007 10120 9924
12/13/2007 10100 9937
12/14/2007 10389 9800
12/15/2007 10389 9800
12/16/2007 10389 9800
12/17/2007 10701 9653
12/18/2007 10577 9714
12/19/2007 10608 9701
12/20/2007 10495 9751
12/21/2007 10144 9915
12/22/2007 10144 9915
12/23/2007 10144 9915
12/24/2007 9980 9996
12/25/2007 9980 9996
12/26/2007 9980 10004
12/27/2007 10260 9864
12/28/2007 10252 9878
12/29/2007 10252 9878
12/30/2007 10252 9878
12/31/2007 10411 9811
1/1/2008 10411 9811
1/2/2008 10696 9671
1/3/2008 10703 9671
1/4/2008 11245 9434
1/5/2008 11245 9434
1/6/2008 11245 9434
1/7/2008 11163 9464
1/8/2008 11583 9294
1/9/2008 11265 9421
1/10/2008 11096 9496
1/11/2008 11396 9368
1/12/2008 11396 9368
1/13/2008 11396 9368
1/14/2008 11159 9469
1/15/2008 11719 9233
1/16/2008 11863 9183
1/17/2008 12556 8916
1/18/2008 12709 8862
1/19/2008 12709 8862
1/20/2008 12709 8862
1/21/2008 12709 8862
1/22/2008 13012 8764
1/23/2008 12460 8952
1/24/2008 12225 9042
1/25/2008 12613 8899
1/26/2008 12613 8899
1/27/2008 12613 8899
1/28/2008 12168 9055
1/29/2008 12034 9112
1/30/2008 12159 9069
1/31/2008 11777 9222
2/1/2008 11447 9335
2/2/2008 11447 9335
2/3/2008 11447 9335
2/4/2008 11690 9238
2/5/2008 12433 8943
2/6/2008 12621 8878
2/7/2008 12418 8951
2/8/2008 12536 8913
2/9/2008 12536 8913
2/10/2008 12536 8913
2/11/2008 12392 8966
2/12/2008 12208 9032
2/13/2008 11880 9158
2/14/2008 12192 9035
2/15/2008 12181 9044
2/16/2008 12181 9044
2/17/2008 12181 9044
2/18/2008 12181 9044
2/19/2008 12201 9036
2/20/2008 12002 9112
2/21/2008 12300 8998
2/22/2008 12100 9070
2/23/2008 12100 9070
2/24/2008 12100 9070
2/25/2008 11781 9195
2/26/2008 11619 9259
2/27/2008 11642 9253
2/28/2008 11848 9171
2/29/2008 12488 8923
3/1/2008 12488 8923
3/2/2008 12488 8923
3/3/2008 12483 8928
3/4/2008 12574 8897
3/5/2008 12432 8948
3/6/2008 12978 8752
3/7/2008 13206 8679
3/8/2008 13206 8679
3/9/2008 13206 8679
3/10/2008 13608 8545
3/11/2008 12610 8863
3/12/2008 12831 8786
3/13/2008 12701 8831
3/14/2008 13235 8648
3/15/2008 13235 8648
3/16/2008 13235 8648
3/17/2008 13476 8571
3/18/2008 12339 8935
3/19/2008 12945 8718
3/20/2008 12339 8927
3/21/2008 12339 8927
3/22/2008 12339 8927
3/23/2008 12339 8927
3/24/2008 11964 9064
3/25/2008 11910 9085
3/26/2008 12120 9006
3/27/2008 12393 8904
3/28/2008 12594 8834
3/29/2008 12594 8834
3/30/2008 12594 8834
3/31/2008 12456 8884
4/1/2008 11565 9203
4/2/2008 11608 9187
4/3/2008 11580 9199
4/4/2008 11568 9207
4/5/2008 11568 9207
4/6/2008 11568 9207
4/7/2008 11534 9221
4/8/2008 11646 9177
4/9/2008 11835 9104
4/10/2008 11732 9145
4/11/2008 12214 8959
4/12/2008 12214 8959
4/13/2008 12214 8959
4/14/2008 12298 8929
4/15/2008 12185 8970
4/16/2008 11636 9175
4/17/2008 11622 9181
4/18/2008 11204 9347
4/19/2008 11204 9347
4/20/2008 11204 9347
4/21/2008 11241 9333
4/22/2008 11441 9251
4/23/2008 11377 9278
4/24/2008 11233 9338
4/25/2008 11092 9398
4/26/2008 11092 9398
4/27/2008 11092 9398
4/28/2008 11116 9389
4/29/2008 11203 9353
4/30/2008 11292 9317
5/1/2008 10905 9478
5/2/2008 10841 9509
5/3/2008 10841 9509
5/4/2008 10841 9509
5/5/2008 10940 9467
5/6/2008 10772 9540
5/7/2008 11157 9371
5/8/2008 11076 9406
5/9/2008 11226 9344
5/10/2008 11226 9344
5/11/2008 11226 9344
5/12/2008 10979 9447
5/13/2008 10984 9446
5/14/2008 10896 9485
5/15/2008 10661 9588
5/16/2008 10641 9600
5/17/2008 10641 9600
5/18/2008 10641 9600
5/19/2008 10621 9609
5/20/2008 10817 9520
5/21/2008 11168 9368
5/22/2008 11109 9394
5/23/2008 11406 9270
5/24/2008 11406 9270
5/25/2008 11406 9270
5/26/2008 11406 9270
5/27/2008 11255 9333
5/28/2008 11161 9372
5/29/2008 11043 9423
5/30/2008 11018 9438
5/31/2008 11018 9438
6/1/2008 11018 9438
6/2/2008 11246 9339
6/3/2008 11377 9285
6/4/2008 11376 9287
6/5/2008 10932 9468
6/6/2008 11616 9177
6/7/2008 11616 9177
6/8/2008 11616 9177
6/9/2008 11594 9185
6/10/2008 11658 9162
6/11/2008 12044 9009
6/12/2008 11964 9040
6/13/2008 11611 9176
6/14/2008 11611 9176
6/15/2008 11611 9176
6/16/2008 11611 9177
6/17/2008 11771 9115
6/18/2008 11996 9026
6/19/2008 11908 9062
6/20/2008 12357 8894
6/21/2008 12357 8894
6/22/2008 12357 8894
6/23/2008 12353 8895
6/24/2008 12425 8870
6/25/2008 12283 8922
6/26/2008 12997 8663
6/27/2008 13093 8631
6/28/2008 13093 8631
6/29/2008 13093 8631
6/30/2008 13071 8642
7/1/2008 12968 8677
7/2/2008 13443 8519
7/3/2008 13424 8529
7/4/2008 13424 8529
7/5/2008 13424 8529
7/6/2008 13424 8529
7/7/2008 13652 8457
7/8/2008 13178 8605
7/9/2008 13780 8410
7/10/2008 13586 8469
7/11/2008 13888 8376
7/12/2008 13888 8376
7/13/2008 13888 8376
7/14/2008 14143 8300
7/15/2008 14455 8210
7/16/2008 13738 8417
7/17/2008 13416 8518
7/18/2008 13415 8520
7/19/2008 13415 8520
7/20/2008 13415 8520
7/21/2008 13427 8516
7/22/2008 13065 8631
7/23/2008 12960 8666
7/24/2008 13559 8466
7/25/2008 13461 8501
7/26/2008 13461 8501
7/27/2008 13461 8501
7/28/2008 13958 8343
7/29/2008 13313 8539
7/30/2008 12869 8682
7/31/2008 13204 8569
8/1/2008 13356 8522
8/2/2008 13356 8522
8/3/2008 13356 8522
8/4/2008 13601 8445
8/5/2008 12820 8689
8/6/2008 12721 8722
8/7/2008 13174 8566
8/8/2008 12557 8771
8/9/2008 12557 8771
8/10/2008 12557 8771
8/11/2008 12375 8834
8/12/2008 12670 8728
8/13/2008 12741 8705
8/14/2008 12603 8754
8/15/2008 12500 8790
8/16/2008 12500 8790
8/17/2008 12500 8790
8/18/2008 12876 8658
8/19/2008 13116 8578
8/20/2008 12956 8632
8/21/2008 12894 8654
8/22/2008 12601 8753
8/23/2008 12601 8753
8/24/2008 12601 8753
8/25/2008 13096 8582
8/26/2008 13007 8613
8/27/2008 12799 8684
8/28/2008 12420 8814
8/29/2008 12756 8693
8/30/2008 12756 8693
8/31/2008 12756 8693
9/1/2008 12756 8693
9/2/2008 12868 8658
9/3/2008 12908 8645
9/4/2008 13683 8386
9/5/2008 13564 8424
9/6/2008 13564 8424
9/7/2008 13564 8424
9/8/2008 13009 8598
9/9/2008 13902 8305
9/10/2008 13736 8356
9/11/2008 13345 8474
9/12/2008 13291 8492
9/13/2008 13291 8492
9/14/2008 13291 8492
9/15/2008 14538 8092
9/16/2008 14045 8234
9/17/2008 15363 7846
9/18/2008 14035 8188
9/19/2008 12974 8518
9/20/2008 12974 8518
9/21/2008 12974 8518
9/22/2008 13909 8193
9/23/2008 14353 8065
9/24/2008 14305 8049
9/25/2008 13687 8207
9/26/2008 13619 8235
9/27/2008 13619 8235
9/28/2008 13619 8235
9/29/2008 15559 7511
9/30/2008 14417 7919
10/1/2008 14575 7884
10/2/2008 15756 7568
10/3/2008 16103 7465
10/4/2008 16103 7465
10/5/2008 16103 7465
10/6/2008 17250 7178
10/7/2008 19382 6766
10/8/2008 19939 6693
10/9/2008 22621 6183
10/10/2008 23337 6111
10/11/2008 23337 6111
10/12/2008 23337 6111
10/13/2008 17896 6819
10/14/2008 18496 6783
10/15/2008 21852 6171
10/16/2008 20075 6433
10/17/2008 20287 6393
10/18/2008 20287 6393
10/19/2008 20287 6393
10/20/2008 18396 6698
10/21/2008 19611 6492
10/22/2008 21723 6097
10/23/2008 21314 6174
10/24/2008 22994 5961
10/25/2008 22994 5961
10/26/2008 22994 5961
10/27/2008 24333 5772
10/28/2008 18940 6395
10/29/2008 19941 6325
10/30/2008 18516 6489
10/31/2008 17827 6589
</Table>
TOTAL RETURNS FOR THE PERIOD ENDED OCTOBER 31, 2008
- --------------------------------------------------------------------------------
<Table>
<Caption>
SINCE INCEPTION
(11/05/2007)
---------------
RYDEX 2X S&P 500 ETF............................................. -62.68%
S&P 500 TOTAL RETURN INDEX....................................... -34.11%
</Table>
The returns presented above do not reflect the effect of taxes. Index returns
represent total returns. Past performance is no guarantee of future results.
ANNUAL REPORT 7
RYDEX 2x S&P 500 ETF
PORTFOLIO SUMMARY (Unaudited) As of October 31, 2008
- --------------------------------------------------------------------------------
TOP 10 HOLDINGS*
- --------------------------------------------------------------------------------
<Table>
<Caption>
DESCRIPTION % OF NET ASSETS
- ------------------------------------------------------------------------------------
EXXON MOBIL CORP. 3.75%
GENERAL ELECTRIC CO. 1.99%
PROCTER & GAMBLE CO. 1.91%
MICROSOFT CORP. 1.71%
JOHNSON & JOHNSON 1.67%
AT&T, INC. 1.54%
CHEVRON CORP. 1.49%
JPMORGAN CHASE & CO. 1.48%
INTERNATIONAL BUSINESS MACHINES CORP. 1.23%
WAL-MART STORES, INC. 1.22%
- ------------------------------------------------------------------------------------
</Table>
SECTOR ALLOCATIONS*
(PIE CHART)
<Table>
Industrials 21.58
Information Technology 13.86
Financials 13.14
Health Care 12.20
Energy 11.58
Consumer Staples 11.36
Consumer Discretionary 7.23
Utilities 3.37
Telecommunication Services 2.91
Materials 2.77
</Table>
* The Fund's Top Ten Holdings are expressed as a percentage of net assets and
the Sector Allocations are expressed as a percentage of the Fund's equity
investments market value. These percentages may change over time.
ANNUAL REPORT 8
RYDEX INVERSE 2x S&P 500 ETF
MANAGER'S ANALYSIS (Unaudited)
- --------------------------------------------------------------------------------
Rydex Inverse 2x S&P 500 ETF delivered a 78.27% total return compared to the S&P
500, which came in at -34.11%. The financial industry made headlines with
financials down -48.99%, followed closely by the beaten-down technology sector,
at -40.69%. Defense, consumer staples and health care were all negative over the
same time period, though they all held their own in the face of a troubled
economy. Since its inception on 11/5/2007, Rydex Inverse S&P 500 ETF achieved a
daily correlation of 99% to its benchmark of -200% of the daily price movement
of the S&P 500 Index.
The year was marked by stunning failures in the financial markets, brought on by
the implosion of the housing-backed debt markets, historic market volatility and
a global economic meltdown. Major financial institutions either went bankrupt or
had to receive assistance from the federal government in the form of the
Department of Treasury's Troubled Assets Relief (TARP) Program. Inter-bank
lending nearly ground to a halt as credit became a major concern globally. The
Volatility Index(R) (VIX) Index jumped to historic highs in September and
October as the financial crisis culminated with the Securities and Exchange
Commission (SEC) taking emergency action to ban the short selling of more than
900 securities. This increased volatility in the markets contributed widely to
the daily tracking variances seen in September and October.
The apparent discrepancy between the leverage and unleveraged indices is the
result of compounding, which is described briefly on page 4 of this report.
CUMULATIVE FUND PERFORMANCE: NOVEMBER 5, 2007 - OCTOBER 31, 2008
(Performance Graph)
<Table>
<Caption>
RYDEX INVERSE S&P 500
2X S&P TOTAL RETURN
500 ETF INDEX
------------- ------------
11/5/2007 10000 10000
11/6/2007 9757 10121
11/7/2007 10332 9829
11/8/2007 10352 9823
11/9/2007 10667 9683
11/10/2007 10667 9683
11/11/2007 10667 9683
11/12/2007 10880 9587
11/13/2007 10244 9869
11/14/2007 10399 9802
11/15/2007 10667 9673
11/16/2007 10571 9723
11/17/2007 10571 9723
11/18/2007 10571 9723
11/19/2007 10940 9554
11/20/2007 10845 9597
11/21/2007 11209 9445
11/22/2007 11209 9445
11/23/2007 10841 9605
11/24/2007 10841 9605
11/25/2007 10841 9605
11/26/2007 11351 9382
11/27/2007 10997 9523
11/28/2007 10368 9798
11/29/2007 10367 9803
11/30/2007 10205 9879
12/1/2007 10205 9879
12/2/2007 10205 9879
12/3/2007 10337 9822
12/4/2007 10475 9757
12/5/2007 10155 9911
12/6/2007 9851 10061
12/7/2007 9901 10043
12/8/2007 9901 10043
12/9/2007 9901 10043
12/10/2007 9744 10119
12/11/2007 10252 9863
12/12/2007 10120 9924
12/13/2007 10100 9937
12/14/2007 10389 9800
12/15/2007 10389 9800
12/16/2007 10389 9800
12/17/2007 10701 9653
12/18/2007 10577 9714
12/19/2007 10608 9701
12/20/2007 10495 9751
12/21/2007 10144 9915
12/22/2007 10144 9915
12/23/2007 10144 9915
12/24/2007 9980 9996
12/25/2007 9980 9996
12/26/2007 9980 10004
12/27/2007 10260 9864
12/28/2007 10252 9878
12/29/2007 10252 9878
12/30/2007 10252 9878
12/31/2007 10411 9811
1/1/2008 10411 9811
1/2/2008 10696 9671
1/3/2008 10703 9671
1/4/2008 11245 9434
1/5/2008 11245 9434
1/6/2008 11245 9434
1/7/2008 11163 9464
1/8/2008 11583 9294
1/9/2008 11265 9421
1/10/2008 11096 9496
1/11/2008 11396 9368
1/12/2008 11396 9368
1/13/2008 11396 9368
1/14/2008 11159 9469
1/15/2008 11719 9233
1/16/2008 11863 9183
1/17/2008 12556 8916
1/18/2008 12709 8862
1/19/2008 12709 8862
1/20/2008 12709 8862
1/21/2008 12709 8862
1/22/2008 13012 8764
1/23/2008 12460 8952
1/24/2008 12225 9042
1/25/2008 12613 8899
1/26/2008 12613 8899
1/27/2008 12613 8899
1/28/2008 12168 9055
1/29/2008 12034 9112
1/30/2008 12159 9069
1/31/2008 11777 9222
2/1/2008 11447 9335
2/2/2008 11447 9335
2/3/2008 11447 9335
2/4/2008 11690 9238
2/5/2008 12433 8943
2/6/2008 12621 8878
2/7/2008 12418 8951
2/8/2008 12536 8913
2/9/2008 12536 8913
2/10/2008 12536 8913
2/11/2008 12392 8966
2/12/2008 12208 9032
2/13/2008 11880 9158
2/14/2008 12192 9035
2/15/2008 12181 9044
2/16/2008 12181 9044
2/17/2008 12181 9044
2/18/2008 12181 9044
2/19/2008 12201 9036
2/20/2008 12002 9112
2/21/2008 12300 8998
2/22/2008 12100 9070
2/23/2008 12100 9070
2/24/2008 12100 9070
2/25/2008 11781 9195
2/26/2008 11619 9259
2/27/2008 11642 9253
2/28/2008 11848 9171
2/29/2008 12488 8923
3/1/2008 12488 8923
3/2/2008 12488 8923
3/3/2008 12483 8928
3/4/2008 12574 8897
3/5/2008 12432 8948
3/6/2008 12978 8752
3/7/2008 13206 8679
3/8/2008 13206 8679
3/9/2008 13206 8679
3/10/2008 13608 8545
3/11/2008 12610 8863
3/12/2008 12831 8786
3/13/2008 12701 8831
3/14/2008 13235 8648
3/15/2008 13235 8648
3/16/2008 13235 8648
3/17/2008 13476 8571
3/18/2008 12339 8935
3/19/2008 12945 8718
3/20/2008 12339 8927
3/21/2008 12339 8927
3/22/2008 12339 8927
3/23/2008 12339 8927
3/24/2008 11964 9064
3/25/2008 11910 9085
3/26/2008 12120 9006
3/27/2008 12393 8904
3/28/2008 12594 8834
3/29/2008 12594 8834
3/30/2008 12594 8834
3/31/2008 12456 8884
4/1/2008 11565 9203
4/2/2008 11608 9187
4/3/2008 11580 9199
4/4/2008 11568 9207
4/5/2008 11568 9207
4/6/2008 11568 9207
4/7/2008 11534 9221
4/8/2008 11646 9177
4/9/2008 11835 9104
4/10/2008 11732 9145
4/11/2008 12214 8959
4/12/2008 12214 8959
4/13/2008 12214 8959
4/14/2008 12298 8929
4/15/2008 12185 8970
4/16/2008 11636 9175
4/17/2008 11622 9181
4/18/2008 11204 9347
4/19/2008 11204 9347
4/20/2008 11204 9347
4/21/2008 11241 9333
4/22/2008 11441 9251
4/23/2008 11377 9278
4/24/2008 11233 9338
4/25/2008 11092 9398
4/26/2008 11092 9398
4/27/2008 11092 9398
4/28/2008 11116 9389
4/29/2008 11203 9353
4/30/2008 11292 9317
5/1/2008 10905 9478
5/2/2008 10841 9509
5/3/2008 10841 9509
5/4/2008 10841 9509
5/5/2008 10940 9467
5/6/2008 10772 9540
5/7/2008 11157 9371
5/8/2008 11076 9406
5/9/2008 11226 9344
5/10/2008 11226 9344
5/11/2008 11226 9344
5/12/2008 10979 9447
5/13/2008 10984 9446
5/14/2008 10896 9485
5/15/2008 10661 9588
5/16/2008 10641 9600
5/17/2008 10641 9600
5/18/2008 10641 9600
5/19/2008 10621 9609
5/20/2008 10817 9520
5/21/2008 11168 9368
5/22/2008 11109 9394
5/23/2008 11406 9270
5/24/2008 11406 9270
5/25/2008 11406 9270
5/26/2008 11406 9270
5/27/2008 11255 9333
5/28/2008 11161 9372
5/29/2008 11043 9423
5/30/2008 11018 9438
5/31/2008 11018 9438
6/1/2008 11018 9438
6/2/2008 11246 9339
6/3/2008 11377 9285
6/4/2008 11376 9287
6/5/2008 10932 9468
6/6/2008 11616 9177
6/7/2008 11616 9177
6/8/2008 11616 9177
6/9/2008 11594 9185
6/10/2008 11658 9162
6/11/2008 12044 9009
6/12/2008 11964 9040
6/13/2008 11611 9176
6/14/2008 11611 9176
6/15/2008 11611 9176
6/16/2008 11611 9177
6/17/2008 11771 9115
6/18/2008 11996 9026
6/19/2008 11908 9062
6/20/2008 12357 8894
6/21/2008 12357 8894
6/22/2008 12357 8894
6/23/2008 12353 8895
6/24/2008 12425 8870
6/25/2008 12283 8922
6/26/2008 12997 8663
6/27/2008 13093 8631
6/28/2008 13093 8631
6/29/2008 13093 8631
6/30/2008 13071 8642
7/1/2008 12968 8677
7/2/2008 13443 8519
7/3/2008 13424 8529
7/4/2008 13424 8529
7/5/2008 13424 8529
7/6/2008 13424 8529
7/7/2008 13652 8457
7/8/2008 13178 8605
7/9/2008 13780 8410
7/10/2008 13586 8469
7/11/2008 13888 8376
7/12/2008 13888 8376
7/13/2008 13888 8376
7/14/2008 14143 8300
7/15/2008 14455 8210
7/16/2008 13738 8417
7/17/2008 13416 8518
7/18/2008 13415 8520
7/19/2008 13415 8520
7/20/2008 13415 8520
7/21/2008 13427 8516
7/22/2008 13065 8631
7/23/2008 12960 8666
7/24/2008 13559 8466
7/25/2008 13461 8501
7/26/2008 13461 8501
7/27/2008 13461 8501
7/28/2008 13958 8343
7/29/2008 13313 8539
7/30/2008 12869 8682
7/31/2008 13204 8569
8/1/2008 13356 8522
8/2/2008 13356 8522
8/3/2008 13356 8522
8/4/2008 13601 8445
8/5/2008 12820 8689
8/6/2008 12721 8722
8/7/2008 13174 8566
8/8/2008 12557 8771
8/9/2008 12557 8771
8/10/2008 12557 8771
8/11/2008 12375 8834
8/12/2008 12670 8728
8/13/2008 12741 8705
8/14/2008 12603 8754
8/15/2008 12500 8790
8/16/2008 12500 8790
8/17/2008 12500 8790
8/18/2008 12876 8658
8/19/2008 13116 8578
8/20/2008 12956 8632
8/21/2008 12894 8654
8/22/2008 12601 8753
8/23/2008 12601 8753
8/24/2008 12601 8753
8/25/2008 13096 8582
8/26/2008 13007 8613
8/27/2008 12799 8684
8/28/2008 12420 8814
8/29/2008 12756 8693
8/30/2008 12756 8693
8/31/2008 12756 8693
9/1/2008 12756 8693
9/2/2008 12868 8658
9/3/2008 12908 8645
9/4/2008 13683 8386
9/5/2008 13564 8424
9/6/2008 13564 8424
9/7/2008 13564 8424
9/8/2008 13009 8598
9/9/2008 13902 8305
9/10/2008 13736 8356
9/11/2008 13345 8474
9/12/2008 13291 8492
9/13/2008 13291 8492
9/14/2008 13291 8492
9/15/2008 14538 8092
9/16/2008 14045 8234
9/17/2008 15363 7846
9/18/2008 14035 8188
9/19/2008 12974 8518
9/20/2008 12974 8518
9/21/2008 12974 8518
9/22/2008 13909 8193
9/23/2008 14353 8065
9/24/2008 14305 8049
9/25/2008 13687 8207
9/26/2008 13619 8235
9/27/2008 13619 8235
9/28/2008 13619 8235
9/29/2008 15559 7511
9/30/2008 14417 7919
10/1/2008 14575 7884
10/2/2008 15756 7568
10/3/2008 16103 7465
10/4/2008 16103 7465
10/5/2008 16103 7465
10/6/2008 17250 7178
10/7/2008 19382 6766
10/8/2008 19939 6693
10/9/2008 22621 6183
10/10/2008 23337 6111
10/11/2008 23337 6111
10/12/2008 23337 6111
10/13/2008 17896 6819
10/14/2008 18496 6783
10/15/2008 21852 6171
10/16/2008 20075 6433
10/17/2008 20287 6393
10/18/2008 20287 6393
10/19/2008 20287 6393
10/20/2008 18396 6698
10/21/2008 19611 6492
10/22/2008 21723 6097
10/23/2008 21314 6174
10/24/2008 22994 5961
10/25/2008 22994 5961
10/26/2008 22994 5961
10/27/2008 24333 5772
10/28/2008 18940 6395
10/29/2008 19941 6325
10/30/2008 18516 6489
10/31/2008 17827 6589
</Table>
TOTAL RETURNS FOR THE PERIOD ENDED OCTOBER 31, 2008
- --------------------------------------------------------------------------------
<Table>
<Caption>
SINCE INCEPTION
(11/05/2007)
---------------
RYDEX INVERSE 2X S&P 500 ETF..................................... 78.27%
S&P 500 TOTAL RETURN INDEX....................................... -34.11%
</Table>
The returns presented above do not reflect the effect of taxes. Index returns
represent total returns. Past performance is no guarantee of future results.
ANNUAL REPORT 9
RYDEX 2x S&P MIDCAP 400 ETF
MANAGER'S ANALYSIS (Unaudited)
- --------------------------------------------------------------------------------
Since its inception on 11/5/2007, Rydex 2x S&P MidCap 400 ETF returned -63.12%.
Over the year, its benchmark, the S&P 400, returned -34.44%.
Mid-cap stocks underperformed their large-cap counterparts, though in these
troubled economic times, all market caps took a hit. Negative returns from the
industrial and technology sector contributed most to this ETF's negative
performance. Up through May of 2007 mid-cap stocks did see some
strength -- buoyed by the energy, materials and industrial sectors -- which all
benefited from high oil and commodity prices in the first half of the year.
However, in June, as recession fears increased on the tail of the burgeoning
global financial meltdown, energy and commodity prices plummeted, taking the
respective leaders in their industries to new lows. Of course, the year was
marked by a historic failure in financials, leading to a significant jump in the
Volatility Index(R) (VIX) and causing interbank lending to grind to a halt. This
increased volatility may have contributed to wider tracking variances in
September and October.
The apparent discrepancy between the leverage and unleveraged indices is the
result of compounding, which is described briefly on page 4 of this report.
CUMULATIVE FUND PERFORMANCE: NOVEMBER 5, 2007 - OCTOBER 31, 2008
(PERFORMANCE GRAPH)
<Table>
<Caption>
RYDEX 2X S&P MIDCAP
S&P MIDCAP 400 TOTAL
400 ETF RETURN INDEX
---------- ------------
11/5/2007 10000 10000
11/6/2007 10245 10125
11/7/2007 9771 9893
11/8/2007 9849 9931
11/9/2007 9584 9799
11/10/2007 9584 9799
11/11/2007 9584 9799
11/12/2007 9293 9651
11/13/2007 9703 9865
11/14/2007 9615 9820
11/15/2007 9413 9714
11/16/2007 9371 9694
11/17/2007 9371 9694
11/18/2007 9371 9694
11/19/2007 9011 9511
11/20/2007 8988 9499
11/21/2007 8749 9374
11/22/2007 8749 9374
11/23/2007 8972 9497
11/24/2007 8972 9497
11/25/2007 8972 9497
11/26/2007 8687 9347
11/27/2007 8880 9451
11/28/2007 9408 9733
11/29/2007 9407 9733
11/30/2007 9529 9799
12/1/2007 9529 9799
12/2/2007 9529 9799
12/3/2007 9455 9760
12/4/2007 9385 9726
12/5/2007 9659 9869
12/6/2007 10053 10072
12/7/2007 10071 10084
12/8/2007 10071 10084
12/9/2007 10071 10084
12/10/2007 10232 10165
12/11/2007 9627 9865
12/12/2007 9696 9900
12/13/2007 9692 9899
12/14/2007 9383 9742
12/15/2007 9383 9742
12/16/2007 9383 9742
12/17/2007 9064 9578
12/18/2007 9195 9647
12/19/2007 9180 9641
12/20/2007 9395 9754
12/21/2007 9683 9906
12/22/2007 9683 9906
12/23/2007 9683 9906
12/24/2007 9899 10018
12/25/2007 9899 10018
12/26/2007 9847 9993
12/27/2007 9544 9841
12/28/2007 9529 9836
12/29/2007 9529 9836
12/30/2007 9529 9836
12/31/2007 9417 9780
1/1/2008 9417 9780
1/2/2008 9184 9660
1/3/2008 9053 9592
1/4/2008 8527 9317
1/5/2008 8527 9317
1/6/2008 8527 9317
1/7/2008 8480 9293
1/8/2008 8090 9080
1/9/2008 8166 9124
1/10/2008 8315 9207
1/11/2008 8077 9078
1/12/2008 8077 9078
1/13/2008 8077 9078
1/14/2008 8242 9171
1/15/2008 7850 8954
1/16/2008 7771 8911
1/17/2008 7319 8653
1/18/2008 7265 8623
1/19/2008 7265 8623
1/20/2008 7265 8623
1/21/2008 7265 8623
1/22/2008 7192 8582
1/23/2008 7518 8776
1/24/2008 7693 8881
1/25/2008 7553 8802
1/26/2008 7553 8802
1/27/2008 7553 8802
1/28/2008 7907 9006
1/29/2008 8026 9073
1/30/2008 7855 8977
1/31/2008 8194 9178
2/1/2008 8578 9392
2/2/2008 8578 9392
2/3/2008 8578 9392
2/4/2008 8455 9324
2/5/2008 7973 9057
2/6/2008 7782 8950
2/7/2008 7946 9043
2/8/2008 7967 9060
2/9/2008 7967 9060
2/10/2008 7967 9060
2/11/2008 8058 9112
2/12/2008 8094 9132
2/13/2008 8304 9251
2/14/2008 8042 9104
2/15/2008 8005 9082
2/16/2008 8005 9082
2/17/2008 8005 9082
2/18/2008 8005 9082
2/19/2008 8017 9091
2/20/2008 8237 9217
2/21/2008 8018 9095
2/22/2008 8114 9148
2/23/2008 8114 9148
2/24/2008 8114 9148
2/25/2008 8435 9334
2/26/2008 8603 9425
2/27/2008 8523 9380
2/28/2008 8349 9287
2/29/2008 7844 9007
3/1/2008 7844 9007
3/2/2008 7844 9007
3/3/2008 7870 9023
3/4/2008 7775 8970
3/5/2008 7875 9025
3/6/2008 7444 8778
3/7/2008 7297 8693
3/8/2008 7297 8693
3/9/2008 7297 8693
3/10/2008 6996 8512
3/11/2008 7457 8793
3/12/2008 7382 8752
3/13/2008 7573 8864
3/14/2008 7291 8700
3/15/2008 7291 8700
3/16/2008 7291 8700
3/17/2008 6971 8517
3/18/2008 7536 8860
3/19/2008 7160 8640
3/20/2008 7430 8801
3/21/2008 7430 8801
3/22/2008 7430 8801
3/23/2008 7430 8801
3/24/2008 7786 9003
3/25/2008 7936 9093
3/26/2008 7798 9019
3/27/2008 7622 8913
3/28/2008 7484 8834
3/29/2008 7484 8834
3/30/2008 7484 8834
3/31/2008 7623 8915
4/1/2008 8114 9208
4/2/2008 8194 9248
4/3/2008 8259 9286
4/4/2008 8322 9324
4/5/2008 8322 9324
4/6/2008 8322 9324
4/7/2008 8365 9349
4/8/2008 8359 9343
4/9/2008 8094 9198
4/10/2008 8296 9313
4/11/2008 7999 9146
4/12/2008 7999 9146
4/13/2008 7999 9146
4/14/2008 7972 9128
4/15/2008 8047 9176
4/16/2008 8511 9442
4/17/2008 8446 9407
4/18/2008 8704 9551
4/19/2008 8704 9551
4/20/2008 8704 9551
4/21/2008 8720 9555
4/22/2008 8471 9417
4/23/2008 8534 9451
4/24/2008 8658 9524
4/25/2008 8898 9656
4/26/2008 8898 9656
4/27/2008 8898 9656
4/28/2008 8936 9677
4/29/2008 8826 9613
4/30/2008 8794 9602
5/1/2008 9020 9727
5/2/2008 9043 9740
5/3/2008 9043 9740
5/4/2008 9043 9740
5/5/2008 9026 9731
5/6/2008 9170 9809
5/7/2008 8963 9696
5/8/2008 9093 9770
5/9/2008 9106 9778
5/10/2008 9106 9778
5/11/2008 9106 9778
5/12/2008 9319 9893
5/13/2008 9432 9954
5/14/2008 9473 9977
5/15/2008 9700 10095
5/16/2008 9754 10124
5/17/2008 9754 10124
5/18/2008 9754 10124
5/19/2008 9691 10094
5/20/2008 9669 10078
5/21/2008 9370 9924
5/22/2008 9425 9956
5/23/2008 9208 9837
5/24/2008 9208 9837
5/25/2008 9208 9837
5/26/2008 9208 9837
5/27/2008 9355 9919
5/28/2008 9518 10007
5/29/2008 9578 10041
5/30/2008 9701 10110
5/31/2008 9701 10110
6/1/2008 9701 10110
6/2/2008 9546 10025
6/3/2008 9547 10028
6/4/2008 9607 10055
6/5/2008 10041 10287
6/6/2008 9515 10018
6/7/2008 9515 10018
6/8/2008 9515 10018
6/9/2008 9493 10007
6/10/2008 9355 9937
6/11/2008 9035 9765
6/12/2008 9046 9772
6/13/2008 9333 9929
6/14/2008 9333 9929
6/15/2008 9333 9929
6/16/2008 9483 10010
6/17/2008 9477 10006
6/18/2008 9334 9930
6/19/2008 9418 9976
6/20/2008 9084 9802
6/21/2008 9084 9802
6/22/2008 9084 9802
6/23/2008 9074 9796
6/24/2008 8845 9674
6/25/2008 8968 9741
6/26/2008 8498 9485
6/27/2008 8428 9448
6/28/2008 8428 9448
6/29/2008 8428 9448
6/30/2008 8340 9399
7/1/2008 8364 9412
7/2/2008 7860 9130
7/3/2008 7685 9030
7/4/2008 7685 9030
7/5/2008 7685 9030
7/6/2008 7685 9030
7/7/2008 7565 8959
7/8/2008 7906 9161
7/9/2008 7677 9030
7/10/2008 7758 9078
7/11/2008 7699 9044
7/12/2008 7699 9044
7/13/2008 7699 9044
7/14/2008 7545 8954
7/15/2008 7405 8872
7/16/2008 7764 9087
7/17/2008 7975 9211
7/18/2008 7933 9189
7/19/2008 7933 9189
7/20/2008 7933 9189
7/21/2008 8042 9251
7/22/2008 8247 9371
7/23/2008 8263 9380
7/24/2008 7764 9095
7/25/2008 7827 9135
7/26/2008 7827 9135
7/27/2008 7827 9135
7/28/2008 7642 9026
7/29/2008 7968 9220
7/30/2008 8203 9357
7/31/2008 7966 9224
8/1/2008 7930 9202
8/2/2008 7930 9202
8/3/2008 7930 9202
8/4/2008 7635 9032
8/5/2008 7956 9222
8/6/2008 8072 9290
8/7/2008 7831 9151
8/8/2008 8173 9353
8/9/2008 8173 9353
8/10/2008 8173 9353
8/11/2008 8345 9440
8/12/2008 8183 9348
8/13/2008 8238 9379
8/14/2008 8365 9454
8/15/2008 8353 9449
8/16/2008 8353 9449
8/17/2008 8353 9449
8/18/2008 8138 9326
8/19/2008 7979 9234
8/20/2008 8043 9272
8/21/2008 8060 9285
8/22/2008 8211 9372
8/23/2008 8211 9372
8/24/2008 8211 9372
8/25/2008 7879 9182
8/26/2008 7953 9225
8/27/2008 8148 9343
8/28/2008 8407 9490
8/29/2008 8215 9382
8/30/2008 8215 9382
8/31/2008 8215 9382
9/1/2008 8215 9382
9/2/2008 8058 9290
9/3/2008 7949 9229
9/4/2008 7560 9006
9/5/2008 7614 9040
9/6/2008 7614 9040
9/7/2008 7614 9040
9/8/2008 7817 9159
9/9/2008 7220 8806
9/10/2008 7416 8927
9/11/2008 7497 8975
9/12/2008 7665 9077
9/13/2008 7665 9077
9/14/2008 7665 9077
9/15/2008 6993 8677
9/16/2008 7290 8863
9/17/2008 6654 8476
9/18/2008 7306 8892
9/19/2008 7913 9269
9/20/2008 7913 9269
9/21/2008 7913 9269
9/22/2008 7187 8838
9/23/2008 7026 8736
9/24/2008 6870 8638
9/25/2008 7021 8735
9/26/2008 6923 8675
9/27/2008 6923 8675
9/28/2008 6923 8675
9/29/2008 5912 8042
9/30/2008 6390 8377
10/1/2008 6246 8281
10/2/2008 5549 7821
10/3/2008 5277 7626
10/4/2008 5277 7626
10/5/2008 5277 7626
10/6/2008 4806 7290
10/7/2008 4282 6896
10/8/2008 4180 6814
10/9/2008 3577 6323
10/10/2008 3590 6337
10/11/2008 3590 6337
10/12/2008 3590 6337
10/13/2008 4341 7000
10/14/2008 4145 6843
10/15/2008 3349 6181
10/16/2008 3609 6422
10/17/2008 3558 6398
10/18/2008 3558 6398
10/19/2008 3558 6398
10/20/2008 3900 6680
10/21/2008 3678 6493
10/22/2008 3258 6112
10/23/2008 3081 5953
10/24/2008 2897 5782
10/25/2008 2897 5782
10/26/2008 2897 5782
10/27/2008 2636 5533
10/28/2008 3116 6010
10/29/2008 3201 6119
10/30/2008 3488 6374
10/31/2008 3688 6556
</Table>
TOTAL RETURNS FOR THE PERIOD ENDED OCTOBER 31, 2008
- --------------------------------------------------------------------------------
<Table>
<Caption>
SINCE INCEPTION
(11/05/2007)
---------------
RYDEX 2X S&P MIDCAP 400 ETF...................................... -63.12%
S&P MIDCAP 400 TOTAL RETURN INDEX................................ -34.44%
</Table>
The returns presented above do not reflect the effect of taxes. Index returns
represent total returns. Past performance is no guarantee of future results.
ANNUAL REPORT 10
RYDEX 2x S&P MIDCAP 400 ETF
PORTFOLIO SUMMARY (Unaudited) As of October 31, 2008
- --------------------------------------------------------------------------------
TOP 10 HOLDINGS*
- --------------------------------------------------------------------------------
<Table>
<Caption>
DESCRIPTION % OF NET ASSETS
- ------------------------------------------------------------------------------------
NEW YORK COMMUNITY BANCORP, INC. 0.60%
STERICYCLE, INC. 0.55%
MCAFEE, INC. 0.55%
CEPHALON, INC. 0.55%
EVEREST RE GROUP, LTD. 0.52%
EQUITABLE RESOURCES, INC. 0.51%
DENTSPLY INTERNATIONAL, INC. 0.51%
HEALTH CARE REIT, INC. 0.50%
FMC TECHNOLOGIES, INC. 0.50%
FLIR SYSTEMS, INC. 0.50%
- ------------------------------------------------------------------------------------
</Table>
SECTOR ALLOCATIONS*
(PIE CHART)
<Table>
Financials 19.53
Industrials 14.43
Consumer Discretionary 13.65
Information Technology 13.39
Health Care 12.27
Utilities 8.53
Energy 7.01
Materials 6.57
Consumer Staples 4.15
Telecommunication Services 0.47
</Table>
* The Fund's Top Ten Holdings are expressed as a percentage of net assets and
the Sector Allocations are expressed as a percentage of the Fund's equity
investments market value. These percentages may change over time.
ANNUAL REPORT 11
RYDEX INVERSE 2x S&P MIDCAP 400 ETF
MANAGER'S ANALYSIS (Unaudited)
- --------------------------------------------------------------------------------
Since its inception on 11/5/2007, Rydex Inverse 2x S&P MidCap 400 ETF returned
78.90%. Over the same time period, its benchmark -- the S&P MidCap
400(TM) -- returned -34.44%. For the period since its inception, Rydex Inverse
2x S&P MidCap 400 ETF achieved a daily correlation of 100% to its benchmark of
- -200% of the daily price movement of the S&P MidCap 400 Index. Allocations to
the hard-hit industrial and technology sectors were the largest contributors to
the ETF's negative performance.
Helped by rising oil and commodity prices, companies in the energy, materials
and industrials sectors buoyed mid-cap stocks through May 2008. However,
beginning in June, as recession fears increased on the tail of a growing global
financial crisis, expectations for global industrial demand began to wane and
these companies began to suffer. By July, oil and commodity prices began to
slide, Inter-bank lending ground to a halt and the Volatility Index(R) (VIX)
jumped to all-time highs in September and October as the economic crisis
culminated in the need for government intervention. On September 19, 2008, the
Securities and Exchange Commission (SEC) took emergency action to ban all short
selling of financial securities. This had an immense ripple effect not only on
the stock market itself, but also in the futures and other derivative markets.
The apparent discrepancy between the leverage and unleveraged indices is the
result of compounding, which is described briefly on page 4 of this report.
CUMULATIVE FUND PERFORMANCE: NOVEMBER 5, 2007 - OCTOBER 31, 2008
(Performance Graph)
<Table>
<Caption>
RYDEX INVERSE
2X S&P S&P MIDCAP
MIDCAP 400 400 TOTAL
ETF RETURN INDEX
------------- ------------
11/5/2007 10000 10000
11/6/2007 9744 10125
11/7/2007 10191 9893
11/8/2007 10123 9931
11/9/2007 10409 9799
11/10/2007 10409 9799
11/11/2007 10409 9799
11/12/2007 10727 9651
11/13/2007 10273 9865
11/14/2007 10351 9820
11/15/2007 10563 9714
11/16/2007 10632 9694
11/17/2007 10632 9694
11/18/2007 10632 9694
11/19/2007 11040 9511
11/20/2007 11067 9499
11/21/2007 11364 9374
11/22/2007 11364 9374
11/23/2007 11087 9497
11/24/2007 11087 9497
11/25/2007 11087 9497
11/26/2007 11432 9347
11/27/2007 11177 9451
11/28/2007 10512 9733
11/29/2007 10524 9733
11/30/2007 10396 9799
12/1/2007 10396 9799
12/2/2007 10396 9799
12/3/2007 10475 9760
12/4/2007 10547 9726
12/5/2007 10249 9869
12/6/2007 9835 10072
12/7/2007 9821 10084
12/8/2007 9821 10084
12/9/2007 9821 10084
12/10/2007 9659 10165
12/11/2007 10247 9865
12/12/2007 10161 9900
12/13/2007 10173 9899
12/14/2007 10508 9742
12/15/2007 10508 9742
12/16/2007 10508 9742
12/17/2007 10864 9578
12/18/2007 10705 9647
12/19/2007 10731 9641
12/20/2007 10484 9754
12/21/2007 10169 9906
12/22/2007 10169 9906
12/23/2007 10169 9906
12/24/2007 9936 10018
12/25/2007 9936 10018
12/26/2007 9992 9993
12/27/2007 10305 9841
12/28/2007 10325 9836
12/29/2007 10325 9836
12/30/2007 10325 9836
12/31/2007 10468 9780
1/1/2008 10468 9780
1/2/2008 10714 9660
1/3/2008 10873 9592
1/4/2008 11507 9317
1/5/2008 11507 9317
1/6/2008 11507 9317
1/7/2008 11565 9293
1/8/2008 12100 9080
1/9/2008 11970 9124
1/10/2008 11786 9207
1/11/2008 12109 9078
1/12/2008 12109 9078
1/13/2008 12109 9078
1/14/2008 11854 9171
1/15/2008 12428 8954
1/16/2008 12574 8911
1/17/2008 13287 8653
1/18/2008 13388 8623
1/19/2008 13388 8623
1/20/2008 13388 8623
1/21/2008 13388 8623
1/22/2008 13539 8582
1/23/2008 12929 8776
1/24/2008 12617 8881
1/25/2008 12851 8802
1/26/2008 12851 8802
1/27/2008 12851 8802
1/28/2008 12262 9006
1/29/2008 12082 9073
1/30/2008 12342 8977
1/31/2008 11795 9178
2/1/2008 11250 9392
2/2/2008 11250 9392
2/3/2008 11250 9392
2/4/2008 11416 9324
2/5/2008 12073 9057
2/6/2008 12362 8950
2/7/2008 12105 9043
2/8/2008 12071 9060
2/9/2008 12071 9060
2/10/2008 12071 9060
2/11/2008 11936 9112
2/12/2008 11885 9132
2/13/2008 11574 9251
2/14/2008 11943 9104
2/15/2008 12011 9082
2/16/2008 12011 9082
2/17/2008 12011 9082
2/18/2008 12011 9082
2/19/2008 11992 9091
2/20/2008 11663 9217
2/21/2008 11974 9095
2/22/2008 11839 9148
2/23/2008 11839 9148
2/24/2008 11839 9148
2/25/2008 11364 9334
2/26/2008 11141 9425
2/27/2008 11248 9380
2/28/2008 11478 9287
2/29/2008 12176 9007
3/1/2008 12176 9007
3/2/2008 12176 9007
3/3/2008 12138 9023
3/4/2008 12283 8970
3/5/2008 12132 9025
3/6/2008 12803 8778
3/7/2008 13059 8693
3/8/2008 13059 8693
3/9/2008 13059 8693
3/10/2008 13603 8512
3/11/2008 12707 8793
3/12/2008 12835 8752
3/13/2008 12506 8864
3/14/2008 12976 8700
3/15/2008 12976 8700
3/16/2008 12976 8700
3/17/2008 13524 8517
3/18/2008 12461 8860
3/19/2008 13083 8640
3/20/2008 12611 8801
3/21/2008 12611 8801
3/22/2008 12611 8801
3/23/2008 12611 8801
3/24/2008 12036 9003
3/25/2008 11798 9093
3/26/2008 11993 9019
3/27/2008 12273 8913
3/28/2008 12495 8834
3/29/2008 12495 8834
3/30/2008 12495 8834
3/31/2008 12272 8915
4/1/2008 11469 9208
4/2/2008 11366 9248
4/3/2008 11276 9286
4/4/2008 11191 9324
4/5/2008 11191 9324
4/6/2008 11191 9324
4/7/2008 11132 9349
4/8/2008 11148 9343
4/9/2008 11494 9198
4/10/2008 11210 9313
4/11/2008 11619 9146
4/12/2008 11619 9146
4/13/2008 11619 9146
4/14/2008 11664 9128
4/15/2008 11546 9176
4/16/2008 10881 9442
4/17/2008 10963 9407
4/18/2008 10634 9551
4/19/2008 10634 9551
4/20/2008 10634 9551
4/21/2008 10623 9555
4/22/2008 10930 9417
4/23/2008 10855 9451
4/24/2008 10690 9524
4/25/2008 10398 9656
4/26/2008 10398 9656
4/27/2008 10398 9656
4/28/2008 10354 9677
4/29/2008 10492 9613
4/30/2008 10520 9602
5/1/2008 10246 9727
5/2/2008 10225 9740
5/3/2008 10225 9740
5/4/2008 10225 9740
5/5/2008 10245 9731
5/6/2008 10081 9809
5/7/2008 10317 9696
5/8/2008 10161 9770
5/9/2008 10149 9778
5/10/2008 10149 9778
5/11/2008 10149 9778
5/12/2008 9913 9893
5/13/2008 9790 9954
5/14/2008 9747 9977
5/15/2008 9517 10095
5/16/2008 9467 10124
5/17/2008 9467 10124
5/18/2008 9467 10124
5/19/2008 9526 10094
5/20/2008 9556 10078
5/21/2008 9849 9924
5/22/2008 9786 9956
5/23/2008 10027 9837
5/24/2008 10027 9837
5/25/2008 10027 9837
5/26/2008 10027 9837
5/27/2008 9862 9919
5/28/2008 9691 10007
5/29/2008 9626 10041
5/30/2008 9499 10110
5/31/2008 9499 10110
6/1/2008 9499 10110
6/2/2008 9661 10025
6/3/2008 9657 10028
6/4/2008 9606 10055
6/5/2008 9165 10287
6/6/2008 9652 10018
6/7/2008 9652 10018
6/8/2008 9652 10018
6/9/2008 9676 10007
6/10/2008 9815 9937
6/11/2008 10155 9765
6/12/2008 10144 9772
6/13/2008 9822 9929
6/14/2008 9822 9929
6/15/2008 9822 9929
6/16/2008 9664 10010
6/17/2008 9670 10006
6/18/2008 9819 9930
6/19/2008 9730 9976
6/20/2008 10077 9802
6/21/2008 10077 9802
6/22/2008 10077 9802
6/23/2008 10089 9796
6/24/2008 10342 9674
6/25/2008 10199 9741
6/26/2008 10738 9485
6/27/2008 10831 9448
6/28/2008 10831 9448
6/29/2008 10831 9448
6/30/2008 10944 9399
7/1/2008 10913 9412
7/2/2008 11573 9130
7/3/2008 11840 9030
7/4/2008 11840 9030
7/5/2008 11840 9030
7/6/2008 11840 9030
7/7/2008 12020 8959
7/8/2008 11481 9161
7/9/2008 11812 9030
7/10/2008 11684 9078
7/11/2008 11777 9044
7/12/2008 11777 9044
7/13/2008 11777 9044
7/14/2008 12015 8954
7/15/2008 12235 8872
7/16/2008 11644 9087
7/17/2008 11328 9211
7/18/2008 11390 9189
7/19/2008 11390 9189
7/20/2008 11390 9189
7/21/2008 11235 9251
7/22/2008 10948 9371
7/23/2008 10929 9380
7/24/2008 11585 9095
7/25/2008 11496 9135
7/26/2008 11496 9135
7/27/2008 11496 9135
7/28/2008 11765 9026
7/29/2008 11269 9220
7/30/2008 10939 9357
7/31/2008 11255 9224
8/1/2008 11306 9202
8/2/2008 11306 9202
8/3/2008 11306 9202
8/4/2008 11728 9032
8/5/2008 11237 9222
8/6/2008 11071 9290
8/7/2008 11404 9151
8/8/2008 10908 9353
8/9/2008 10908 9353
8/10/2008 10908 9353
8/11/2008 10702 9440
8/12/2008 10914 9348
8/13/2008 10843 9379
8/14/2008 10674 9454
8/15/2008 10690 9449
8/16/2008 10690 9449
8/17/2008 10690 9449
8/18/2008 10966 9326
8/19/2008 11181 9234
8/20/2008 11091 9272
8/21/2008 11068 9285
8/22/2008 10863 9372
8/23/2008 10863 9372
8/24/2008 10863 9372
8/25/2008 11305 9182
8/26/2008 11202 9225
8/27/2008 10929 9343
8/28/2008 10578 9490
8/29/2008 10824 9382
8/30/2008 10824 9382
8/31/2008 10824 9382
9/1/2008 10824 9382
9/2/2008 11029 9290
9/3/2008 11177 9229
9/4/2008 11730 9006
9/5/2008 11651 9040
9/6/2008 11651 9040
9/7/2008 11651 9040
9/8/2008 11335 9159
9/9/2008 12224 8806
9/10/2008 11900 8927
9/11/2008 11770 8975
9/12/2008 11508 9077
9/13/2008 11508 9077
9/14/2008 11508 9077
9/15/2008 12508 8677
9/16/2008 12007 8863
9/17/2008 13075 8476
9/18/2008 11804 8892
9/19/2008 10821 9269
9/20/2008 10821 9269
9/21/2008 10821 9269
9/22/2008 11830 8838
9/23/2008 12101 8736
9/24/2008 12369 8638
9/25/2008 12099 8735
9/26/2008 12270 8675
9/27/2008 12270 8675
9/28/2008 12270 8675
9/29/2008 14058 8042
9/30/2008 12881 8377
10/1/2008 13185 8281
10/2/2008 14685 7821
10/3/2008 15398 7626
10/4/2008 15398 7626
10/5/2008 15398 7626
10/6/2008 16771 7290
10/7/2008 18620 6896
10/8/2008 19105 6814
10/9/2008 21763 6323
10/10/2008 21621 6337
10/11/2008 21621 6337
10/12/2008 21621 6337
10/13/2008 17004 7000
10/14/2008 18001 6843
10/15/2008 21348 6181
10/16/2008 19718 6422
10/17/2008 20221 6398
10/18/2008 20221 6398
10/19/2008 20221 6398
10/20/2008 18132 6680
10/21/2008 19242 6493
10/22/2008 21383 6112
10/23/2008 22462 5953
10/24/2008 23836 5782
10/25/2008 23836 5782
10/26/2008 23836 5782
10/27/2008 26022 5533
10/28/2008 21205 6010
10/29/2008 20889 6119
10/30/2008 18988 6374
10/31/2008 17890 6556
</Table>
TOTAL RETURNS FOR THE PERIOD ENDED OCTOBER 31, 2008
- --------------------------------------------------------------------------------
<Table>
<Caption>
SINCE INCEPTION
(11/05/2007)
---------------
RYDEX INVERSE 2X S&P MIDCAP 400 ETF.............................. 78.90%
S&P MIDCAP 400 TOTAL RETURN INDEX................................ -34.44%
</Table>
The returns presented above do not reflect the effect of taxes. Index returns
represent total returns. Past performance is no guarantee of future results.
ANNUAL REPORT 12
RYDEX 2x RUSSELL 2000 ETF
MANAGER'S ANALYSIS (Unaudited)
- --------------------------------------------------------------------------------
Since its inception on 11/05/2007, Rydex 2x Russell 2000 ETF returned -59.79%.
Over the same time period, its benchmark, the Russell 2000(R) Index, returned
- -31.04%. For the period since its inception, Rydex 2x Russell 2000 ETF achieved
a daily correlation of 100% to its benchmark of 200% of the daily price movement
of the Russell 2000 Index.
Technology and consumer discretionary sector stocks contributed the most to the
Russell 2000 Index's decline. Of course, signs of continued weakness in the
economy stemming from the escalating financial crisis resulted in hard hits on
stocks in these sectors. In large part, this was due to earnings expectations as
both consumers and businesses alike curtailed their spending on software and
retail goods.
The apparent discrepancy between the leverage and unleveraged indices is the
result of compounding, which is described briefly on page 4 of this report.
CUMULATIVE FUND PERFORMANCE: NOVEMBER 5, 2007 - OCTOBER 31, 2008
(Performance Graph)
<Table>
<Caption>
RYDEX 2X RUSSELL 2000
RUSSELL 2000 TOTAL RETURN
ETF INDEX
------------ ------------
11/5/2007 10000 10000
11/6/2007 10279 10144
11/7/2007 9617 9818
11/8/2007 9749 9881
11/9/2007 9536 9773
11/10/2007 9536 9773
11/11/2007 9536 9773
11/12/2007 9401 9706
11/13/2007 9945 9986
11/14/2007 9776 9903
11/15/2007 9507 9765
11/16/2007 9452 9739
11/17/2007 9452 9739
11/18/2007 9452 9739
11/19/2007 8979 9497
11/20/2007 8957 9485
11/21/2007 8741 9372
11/22/2007 8741 9372
11/23/2007 9088 9558
11/24/2007 9088 9558
11/25/2007 9088 9558
11/26/2007 8600 9306
11/27/2007 8796 9410
11/28/2007 9431 9750
11/29/2007 9332 9701
11/30/2007 9369 9722
12/1/2007 9369 9722
12/2/2007 9369 9722
12/3/2007 9179 9624
12/4/2007 8985 9524
12/5/2007 9312 9697
12/6/2007 9827 9967
12/7/2007 9791 9949
12/8/2007 9791 9949
12/9/2007 9791 9949
12/10/2007 9931 10021
12/11/2007 9304 9705
12/12/2007 9444 9777
12/13/2007 9387 9749
12/14/2007 9009 9553
12/15/2007 9009 9553
12/16/2007 9009 9553
12/17/2007 8651 9365
12/18/2007 9003 9555
12/19/2007 9051 9582
12/20/2007 9324 9727
12/21/2007 9760 9956
12/22/2007 9760 9956
12/23/2007 9760 9956
12/24/2007 9975 10068
12/25/2007 9975 10068
12/26/2007 10038 10102
12/27/2007 9455 9810
12/28/2007 9413 9789
12/29/2007 9413 9789
12/30/2007 9413 9789
12/31/2007 9270 9716
1/1/2008 9270 9716
1/2/2008 8966 9559
1/3/2008 8761 9451
1/4/2008 8209 9154
1/5/2008 8209 9154
1/6/2008 8209 9154
1/7/2008 8260 9184
1/8/2008 7821 8942
1/9/2008 7984 9034
1/10/2008 8162 9137
1/11/2008 7809 8940
1/12/2008 7809 8940
1/13/2008 7809 8940
1/14/2008 7980 9040
1/15/2008 7643 8849
1/16/2008 7691 8880
1/17/2008 7270 8635
1/18/2008 7113 8542
1/19/2008 7113 8542
1/20/2008 7113 8542
1/21/2008 7113 8542
1/22/2008 7074 8521
1/23/2008 7532 8799
1/24/2008 7516 8790
1/25/2008 7425 8738
1/26/2008 7425 8738
1/27/2008 7425 8738
1/28/2008 7724 8913
1/29/2008 7786 8950
1/30/2008 7570 8827
1/31/2008 7956 9054
2/1/2008 8336 9272
2/2/2008 8336 9272
2/3/2008 8336 9272
2/4/2008 8174 9183
2/5/2008 7682 8906
2/6/2008 7482 8791
2/7/2008 7707 8922
2/8/2008 7619 8873
2/9/2008 7619 8873
2/10/2008 7619 8873
2/11/2008 7637 8884
2/12/2008 7761 8957
2/13/2008 8127 9168
2/14/2008 7753 8957
2/15/2008 7674 8909
2/16/2008 7674 8909
2/17/2008 7674 8909
2/18/2008 7674 8909
2/19/2008 7686 8919
2/20/2008 7853 9017
2/21/2008 7548 8843
2/22/2008 7534 8833
2/23/2008 7534 8833
2/24/2008 7534 8833
2/25/2008 7855 9024
2/26/2008 8004 9111
2/27/2008 7990 9101
2/28/2008 7750 8966
2/29/2008 7322 8718
3/1/2008 7322 8718
3/2/2008 7322 8718
3/3/2008 7280 8693
3/4/2008 7206 8653
3/5/2008 7272 8688
3/6/2008 6820 8423
3/7/2008 6768 8389
3/8/2008 6768 8389
3/9/2008 6768 8389
3/10/2008 6436 8184
3/11/2008 7032 8564
3/12/2008 6901 8484
3/13/2008 7162 8642
3/14/2008 6800 8429
3/15/2008 6800 8429
3/16/2008 6800 8429
3/17/2008 6545 8271
3/18/2008 7182 8672
3/19/2008 6805 8446
3/20/2008 7160 8666
3/21/2008 7160 8666
3/22/2008 7160 8666
3/23/2008 7160 8666
3/24/2008 7581 8919
3/25/2008 7666 8970
3/26/2008 7600 8930
3/27/2008 7395 8810
3/28/2008 7196 8694
3/29/2008 7196 8694
3/30/2008 7196 8694
3/31/2008 7295 8755
4/1/2008 7773 9043
4/2/2008 7813 9065
4/3/2008 7844 9082
4/4/2008 7850 9084
4/5/2008 7850 9084
4/6/2008 7850 9084
4/7/2008 7816 9071
4/8/2008 7807 9062
4/9/2008 7512 8890
4/10/2008 7701 9005
4/11/2008 7289 8761
4/12/2008 7289 8761
4/13/2008 7289 8761
4/14/2008 7244 8734
4/15/2008 7367 8811
4/16/2008 7816 9083
4/17/2008 7701 9014
4/18/2008 7974 9181
4/19/2008 7974 9181
4/20/2008 7974 9181
4/21/2008 7927 9142
4/22/2008 7611 8960
4/23/2008 7702 9016
4/24/2008 7891 9130
4/25/2008 7993 9191
4/26/2008 7993 9191
4/27/2008 7993 9191
4/28/2008 8079 9237
4/29/2008 7942 9156
4/30/2008 7871 9121
5/1/2008 8169 9295
5/2/2008 8088 9244
5/3/2008 8088 9244
5/4/2008 8088 9244
5/5/2008 8052 9226
5/6/2008 8163 9296
5/7/2008 7876 9123
5/8/2008 7942 9166
5/9/2008 7961 9173
5/10/2008 7961 9173
5/11/2008 7961 9173
5/12/2008 8242 9341
5/13/2008 8324 9388
5/14/2008 8308 9379
5/15/2008 8473 9473
5/16/2008 8419 9445
5/17/2008 8419 9445
5/18/2008 8419 9445
5/19/2008 8350 9411
5/20/2008 8297 9375
5/21/2008 8102 9267
5/22/2008 8233 9342
5/23/2008 8036 9229
5/24/2008 8036 9229
5/25/2008 8036 9229
5/26/2008 8036 9229
5/27/2008 8259 9360
5/28/2008 8352 9414
5/29/2008 8512 9505
5/30/2008 8571 9540
5/31/2008 8571 9540
6/1/2008 8571 9540
6/2/2008 8410 9448
6/3/2008 8358 9422
6/4/2008 8470 9483
6/5/2008 8914 9733
6/6/2008 8376 9441
6/7/2008 8376 9441
6/8/2008 8376 9441
6/9/2008 8276 9376
6/10/2008 8201 9343
6/11/2008 7876 9157
6/12/2008 7919 9183
6/13/2008 8222 9359
6/14/2008 8222 9359
6/15/2008 8222 9359
6/16/2008 8378 9450
6/17/2008 8287 9398
6/18/2008 8159 9323
6/19/2008 8316 9414
6/20/2008 8037 9260
6/21/2008 8037 9260
6/22/2008 8037 9260
6/23/2008 7902 9185
6/24/2008 7643 9033
6/25/2008 7827 9140
6/26/2008 7444 8917
6/27/2008 7433 8914
6/28/2008 7433 8914
6/29/2008 7433 8914
6/30/2008 7255 8806
7/1/2008 7291 8831
7/2/2008 6878 8585
7/3/2008 6750 8502
7/4/2008 6750 8502
7/5/2008 6750 8502
7/6/2008 6750 8502
7/7/2008 6596 8406
7/8/2008 7096 8719
7/9/2008 6694 8477
7/10/2008 6835 8562
7/11/2008 6925 8621
7/12/2008 6925 8621
7/13/2008 6925 8621
7/14/2008 6710 8488
7/15/2008 6663 8460
7/16/2008 7159 8772
7/17/2008 7369 8899
7/18/2008 7289 8854
7/19/2008 7289 8854
7/20/2008 7289 8854
7/21/2008 7389 8912
7/22/2008 7794 9157
7/23/2008 7846 9188
7/24/2008 7482 8973
7/25/2008 7648 9075
7/26/2008 7648 9075
7/27/2008 7648 9075
7/28/2008 7341 8893
7/29/2008 7732 9130
7/30/2008 7822 9186
7/31/2008 7721 9132
8/1/2008 7765 9153
8/2/2008 7765 9153
8/3/2008 7765 9153
8/4/2008 7502 9000
8/5/2008 7860 9216
8/6/2008 7968 9278
8/7/2008 7701 9119
8/8/2008 8138 9386
8/9/2008 8138 9386
8/10/2008 8138 9386
8/11/2008 8516 9601
8/12/2008 8376 9523
8/13/2008 8442 9560
8/14/2008 8590 9646
8/15/2008 8568 9633
8/16/2008 8568 9633
8/17/2008 8568 9633
8/18/2008 8301 9488
8/19/2008 8041 9337
8/20/2008 8080 9357
8/21/2008 7932 9276
8/22/2008 8208 9434
8/23/2008 8208 9434
8/24/2008 8208 9434
8/25/2008 7825 9216
8/26/2008 7886 9254
8/27/2008 8093 9376
8/28/2008 8424 9568
8/29/2008 8235 9462
8/30/2008 8235 9462
8/31/2008 8235 9462
9/1/2008 8235 9462
9/2/2008 8220 9449
9/3/2008 8299 9493
9/4/2008 7771 9196
9/5/2008 7769 9199
9/6/2008 7769 9199
9/7/2008 7769 9199
9/8/2008 8081 9379
9/9/2008 7513 9052
9/10/2008 7717 9178
9/11/2008 7772 9204
9/12/2008 7794 9221
9/13/2008 7794 9221
9/14/2008 7794 9221
9/15/2008 7140 8830
9/16/2008 7573 9099
9/17/2008 6826 8660
9/18/2008 7776 9266
9/19/2008 8471 9651
9/20/2008 8471 9651
9/21/2008 8471 9651
9/22/2008 7746 9225
9/23/2008 7527 9081
9/24/2008 7316 8935
9/25/2008 7460 9038
9/26/2008 7466 9030
9/27/2008 7466 9030
9/28/2008 7466 9030
9/29/2008 6409 8428
9/30/2008 6951 8708
10/1/2008 6728 8606
10/2/2008 6022 8172
10/3/2008 5727 7938
10/4/2008 5727 7938
10/5/2008 5727 7938
10/6/2008 5279 7637
10/7/2008 4597 7163
10/8/2008 4369 7005
10/9/2008 3635 6399
10/10/2008 3998 6698
10/11/2008 3998 6698
10/12/2008 3998 6698
10/13/2008 4713 7319
10/14/2008 4441 7111
10/15/2008 3616 6438
10/16/2008 4117 6880
10/17/2008 3913 6752
10/18/2008 3913 6752
10/19/2008 3913 6752
10/20/2008 4246 7014
10/21/2008 4008 6806
10/22/2008 3590 6437
10/23/2008 3380 6282
10/24/2008 3129 6041
10/25/2008 3129 6041
10/26/2008 3129 6041
10/27/2008 2824 5750
10/28/2008 3278 6188
10/29/2008 3344 6297
10/30/2008 3691 6596
10/31/2008 4021 6896
</Table>
TOTAL RETURNS FOR THE PERIOD ENDED OCTOBER 31, 2008
- --------------------------------------------------------------------------------
<Table>
<Caption>
SINCE INCEPTION
(11/05/2007)
---------------
RYDEX 2X RUSSELL 2000 ETF........................................ -59.79%
RUSSELL 2000 TOTAL RETURN INDEX.................................. -31.04%
</Table>
The returns presented above do not reflect the effect of taxes. Index returns
represent total returns. Past performance is no guarantee of future results.
ANNUAL REPORT 13
RYDEX 2x RUSSELL 2000 ETF
PORTFOLIO SUMMARY (Unaudited) As of October 31, 2008
- --------------------------------------------------------------------------------
TOP 10 HOLDINGS*
- --------------------------------------------------------------------------------
<Table>
<Caption>
DESCRIPTION % OF NET ASSETS
- ------------------------------------------------------------------------------------
CORVEL CORP 0.77%
RALCORP HOLDINGS, INC 0.37%
ALEXION PHARMACEUTICALS, INC 0.31%
MYRIAD GENETICS, INC 0.28%
WASTE CONNECTIONS, INC 0.26%
PIEDMONT NATURAL GAS CO., INC 0.24%
REALTY INCOME CORP 0.23%
FLOWERS FOODS, INC 0.22%
COMSTOCK RESOURCES, INC 0.22%
SENIOR HOUSING PROPERTIES TRUST 0.22%
- ------------------------------------------------------------------------------------
</Table>
SECTOR ALLOCATIONS*
(PIE CHART)
<Table>
Industrials 26.78
Financials 19.60
Information Technology 14.23
Health Care 13.49
Consumer Discretionary 10.03
Energy 4.68
Utilities 3.34
Consumer Staples 3.53
Materials 3.38
Telecommunication Services 0.94
</Table>
* The Fund's Top Ten Holdings are expressed as a percentage of net assets and
the Sector Allocations are expressed as a percentage of the Fund's equity
investments market value. These percentages may change over time.
ANNUAL REPORT 14
RYDEX INVERSE 2x RUSSELL 2000 ETF
MANAGER'S ANALYSIS (Unaudited)
- --------------------------------------------------------------------------------
Since its inception on 11/05/2007, Rydex Inverse 2x Russell 2000 ETF returned
48.79%. Over the same time period, its benchmark the Russell 2000 returned
- -31.04%. For the period since its inception, Rydex Inverse 2x Russell 2000 ETF
achieved a daily correlation of 100% to its benchmark of -200% of the daily
price movement of the Russell 2000 Index.
Technology and consumer discretionary sectors were not immune to the global
economic crisis and contributed the most to the Russell 2000 Index's decline for
the year. Of course, signs of continued weakness in the global economy saw
stocks in these sectors get hit hard as consumers and businesses alike reigned
in their spending on software and services.
The apparent discrepancy between the leverage and unleveraged indices is the
result of compounding, which is described briefly on page 4 of this report.
CUMULATIVE FUND PERFORMANCE: NOVEMBER 5, 2007 - OCTOBER 31, 2008
(Performance Graph)
<Table>
<Caption>
RYDEX INVERSE RUSSELL 2000
2X RUSSELL TOTAL RETURN
2000 ETF INDEX
------------- ------------
11/5/2007 10000 10000
11/6/2007 9709 10144
11/7/2007 10345 9818
11/8/2007 10209 9881
11/9/2007 10449 9773
11/10/2007 10449 9773
11/11/2007 10449 9773
11/12/2007 10601 9706
11/13/2007 9999 9986
11/14/2007 10163 9903
11/15/2007 10443 9765
11/16/2007 10513 9739
11/17/2007 10513 9739
11/18/2007 10513 9739
11/19/2007 11041 9497
11/20/2007 11071 9485
11/21/2007 11349 9372
11/22/2007 11349 9372
11/23/2007 10899 9558
11/24/2007 10899 9558
11/25/2007 10899 9558
11/26/2007 11488 9306
11/27/2007 11217 9410
11/28/2007 10408 9750
11/29/2007 10521 9701
11/30/2007 10488 9722
12/1/2007 10488 9722
12/2/2007 10488 9722
12/3/2007 10705 9624
12/4/2007 10931 9524
12/5/2007 10533 9697
12/6/2007 9951 9967
12/7/2007 9992 9949
12/8/2007 9992 9949
12/9/2007 9992 9949
12/10/2007 9845 10021
12/11/2007 10483 9705
12/12/2007 10324 9777
12/13/2007 10393 9749
12/14/2007 10815 9553
12/15/2007 10815 9553
12/16/2007 10815 9553
12/17/2007 11240 9365
12/18/2007 10777 9555
12/19/2007 10732 9582
12/20/2007 10408 9727
12/21/2007 9928 9956
12/22/2007 9928 9956
12/23/2007 9928 9956
12/24/2007 9708 10068
12/25/2007 9708 10068
12/26/2007 9652 10102
12/27/2007 10209 9810
12/28/2007 10264 9789
12/29/2007 10264 9789
12/30/2007 10264 9789
12/31/2007 10414 9716
1/1/2008 10414 9716
1/2/2008 10757 9559
1/3/2008 11013 9451
1/4/2008 11702 9154
1/5/2008 11702 9154
1/6/2008 11702 9154
1/7/2008 11628 9184
1/8/2008 12258 8942
1/9/2008 11984 9034
1/10/2008 11727 9137
1/11/2008 12235 8940
1/12/2008 12235 8940
1/13/2008 12235 8940
1/14/2008 11971 9040
1/15/2008 12472 8849
1/16/2008 12413 8880
1/17/2008 13080 8635
1/18/2008 13356 8542
1/19/2008 13356 8542
1/20/2008 13356 8542
1/21/2008 13356 8542
1/22/2008 13450 8521
1/23/2008 12582 8799
1/24/2008 12610 8790
1/25/2008 12771 8738
1/26/2008 12771 8738
1/27/2008 12771 8738
1/28/2008 12255 8913
1/29/2008 12155 8950
1/30/2008 12500 8827
1/31/2008 11864 9054
2/1/2008 11292 9272
2/2/2008 11292 9272
2/3/2008 11292 9272
2/4/2008 11512 9183
2/5/2008 12199 8906
2/6/2008 12528 8791
2/7/2008 12148 8922
2/8/2008 12298 8873
2/9/2008 12298 8873
2/10/2008 12298 8873
2/11/2008 12271 8884
2/12/2008 12071 8957
2/13/2008 11506 9168
2/14/2008 12034 8957
2/15/2008 12155 8909
2/16/2008 12155 8909
2/17/2008 12155 8909
2/18/2008 12155 8909
2/19/2008 12141 8919
2/20/2008 11877 9017
2/21/2008 12347 8843
2/22/2008 12373 8833
2/23/2008 12373 8833
2/24/2008 12373 8833
2/25/2008 11849 9024
2/26/2008 11624 9111
2/27/2008 11648 9101
2/28/2008 12002 8966
2/29/2008 12666 8718
3/1/2008 12666 8718
3/2/2008 12666 8718
3/3/2008 12743 8693
3/4/2008 12874 8653
3/5/2008 12760 8688
3/6/2008 13556 8423
3/7/2008 13664 8389
3/8/2008 13664 8389
3/9/2008 13664 8389
3/10/2008 14327 8184
3/11/2008 13007 8564
3/12/2008 13262 8484
3/13/2008 12764 8642
3/14/2008 13410 8429
3/15/2008 13410 8429
3/16/2008 13410 8429
3/17/2008 13909 8271
3/18/2008 12573 8672
3/19/2008 13234 8446
3/20/2008 12558 8666
3/21/2008 12558 8666
3/22/2008 12558 8666
3/23/2008 12558 8666
3/24/2008 11826 8919
3/25/2008 11694 8970
3/26/2008 11799 8930
3/27/2008 12116 8810
3/28/2008 12441 8694
3/29/2008 12441 8694
3/30/2008 12441 8694
3/31/2008 12270 8755
4/1/2008 11467 9043
4/2/2008 11416 9065
4/3/2008 11375 9082
4/4/2008 11375 9084
4/5/2008 11375 9084
4/6/2008 11375 9084
4/7/2008 11410 9071
4/8/2008 11436 9062
4/9/2008 11871 8890
4/10/2008 11566 9005
4/11/2008 12200 8761
4/12/2008 12200 8761
4/13/2008 12200 8761
4/14/2008 12273 8734
4/15/2008 12063 8811
4/16/2008 11330 9083
4/17/2008 11499 9014
4/18/2008 11088 9181
4/19/2008 11088 9181
4/20/2008 11088 9181
4/21/2008 11168 9142
4/22/2008 11616 8960
4/23/2008 11475 9016
4/24/2008 11191 9130
4/25/2008 11049 9191
4/26/2008 11049 9191
4/27/2008 11049 9191
4/28/2008 10934 9237
4/29/2008 11125 9156
4/30/2008 11217 9121
5/1/2008 10796 9295
5/2/2008 10913 9244
5/3/2008 10913 9244
5/4/2008 10913 9244
5/5/2008 10960 9226
5/6/2008 10803 9296
5/7/2008 11192 9123
5/8/2008 11094 9166
5/9/2008 11080 9173
5/10/2008 11080 9173
5/11/2008 11080 9173
5/12/2008 10682 9341
5/13/2008 10576 9388
5/14/2008 10596 9379
5/15/2008 10386 9473
5/16/2008 10452 9445
5/17/2008 10452 9445
5/18/2008 10452 9445
5/19/2008 10531 9411
5/20/2008 10604 9375
5/21/2008 10852 9267
5/22/2008 10678 9342
5/23/2008 10941 9229
5/24/2008 10941 9229
5/25/2008 10941 9229
5/26/2008 10941 9229
5/27/2008 10636 9360
5/28/2008 10516 9414
5/29/2008 10316 9505
5/30/2008 10249 9540
5/31/2008 10249 9540
6/1/2008 10249 9540
6/2/2008 10440 9448
6/3/2008 10502 9422
6/4/2008 10367 9483
6/5/2008 9819 9733
6/6/2008 10412 9441
6/7/2008 10412 9441
6/8/2008 10412 9441
6/9/2008 10551 9376
6/10/2008 10635 9343
6/11/2008 11055 9157
6/12/2008 10998 9183
6/13/2008 10580 9359
6/14/2008 10580 9359
6/15/2008 10580 9359
6/16/2008 10374 9450
6/17/2008 10488 9398
6/18/2008 10651 9323
6/19/2008 10448 9414
6/20/2008 10798 9260
6/21/2008 10798 9260
6/22/2008 10798 9260
6/23/2008 10977 9185
6/24/2008 11339 9033
6/25/2008 11071 9140
6/26/2008 11613 8917
6/27/2008 11633 8914
6/28/2008 11633 8914
6/29/2008 11633 8914
6/30/2008 11908 8806
7/1/2008 11851 8831
7/2/2008 12522 8585
7/3/2008 12759 8502
7/4/2008 12759 8502
7/5/2008 12759 8502
7/6/2008 12759 8502
7/7/2008 13049 8406
7/8/2008 12089 8719
7/9/2008 12774 8477
7/10/2008 12501 8562
7/11/2008 12341 8621
7/12/2008 12341 8621
7/13/2008 12341 8621
7/14/2008 12724 8488
7/15/2008 12813 8460
7/16/2008 11875 8772
7/17/2008 11528 8899
7/18/2008 11658 8854
7/19/2008 11658 8854
7/20/2008 11658 8854
7/21/2008 11499 8912
7/22/2008 10865 9157
7/23/2008 10799 9188
7/24/2008 11303 8973
7/25/2008 11054 9075
7/26/2008 11054 9075
7/27/2008 11054 9075
7/28/2008 11499 8893
7/29/2008 10887 9130
7/30/2008 10758 9186
7/31/2008 10891 9132
8/1/2008 10838 9153
8/2/2008 10838 9153
8/3/2008 10838 9153
8/4/2008 11205 9000
8/5/2008 10674 9216
8/6/2008 10527 9278
8/7/2008 10886 9119
8/8/2008 10259 9386
8/9/2008 10259 9386
8/10/2008 10259 9386
8/11/2008 9780 9601
8/12/2008 9942 9523
8/13/2008 9864 9560
8/14/2008 9690 9646
8/15/2008 9718 9633
8/16/2008 9718 9633
8/17/2008 9718 9633
8/18/2008 10019 9488
8/19/2008 10341 9337
8/20/2008 10291 9357
8/21/2008 10479 9276
8/22/2008 10121 9434
8/23/2008 10121 9434
8/24/2008 10121 9434
8/25/2008 10589 9216
8/26/2008 10507 9254
8/27/2008 10229 9376
8/28/2008 9814 9568
8/29/2008 10036 9462
8/30/2008 10036 9462
8/31/2008 10036 9462
9/1/2008 10036 9462
9/2/2008 10059 9449
9/3/2008 9965 9493
9/4/2008 10503 9196
9/5/2008 10604 9199
9/6/2008 10604 9199
9/7/2008 10604 9199
9/8/2008 10183 9379
9/9/2008 10903 9052
9/10/2008 10619 9178
9/11/2008 10536 9204
9/12/2008 10508 9221
9/13/2008 10508 9221
9/14/2008 10508 9221
9/15/2008 11384 8830
9/16/2008 10763 9099
9/17/2008 11838 8660
9/18/2008 10224 9266
9/19/2008 9325 9651
9/20/2008 9325 9651
9/21/2008 9325 9651
9/22/2008 10140 9225
9/23/2008 10433 9081
9/24/2008 10725 8935
9/25/2008 10515 9038
9/26/2008 10513 9030
9/27/2008 10513 9030
9/28/2008 10513 9030
9/29/2008 11984 8428
9/30/2008 11012 8708
10/1/2008 11405 8606
10/2/2008 12589 8172
10/3/2008 13185 7938
10/4/2008 13185 7938
10/5/2008 13185 7938
10/6/2008 14209 7637
10/7/2008 16010 7163
10/8/2008 16814 7005
10/9/2008 19520 6399
10/10/2008 17552 6698
10/11/2008 17552 6698
10/12/2008 17552 6698
10/13/2008 14385 7319
10/14/2008 15347 7111
10/15/2008 18162 6438
10/16/2008 15664 6880
10/17/2008 16555 6752
10/18/2008 16555 6752
10/19/2008 16555 6752
10/20/2008 15128 7014
10/21/2008 16013 6806
10/22/2008 17648 6437
10/23/2008 18696 6282
10/24/2008 20045 6041
10/25/2008 20045 6041
10/26/2008 20045 6041
10/27/2008 21994 5750
10/28/2008 18454 6188
10/29/2008 18338 6297
10/30/2008 16414 6596
10/31/2008 14879 6896
</Table>
TOTAL RETURNS FOR THE PERIOD ENDED OCTOBER 31, 2008
- --------------------------------------------------------------------------------
<Table>
<Caption>
SINCE INCEPTION
(11/05/2007)
---------------
RYDEX INVERSE 2X RUSSELL 2000 ETF................................ 48.79%
RUSSELL 2000 TOTAL RETURN INDEX.................................. -31.04%
</Table>
The returns presented above do not reflect the effect of taxes. Index returns
represent total returns. Past performance is no guarantee of future results.
ANNUAL REPORT 15
RYDEX 2x S&P SELECT SECTOR ENERGY ETF
MANAGER'S ANALYSIS (Unaudited)
- --------------------------------------------------------------------------------
With the energy sector suffering significant losses during the one-year period
ended October 31, 2008, it's not surprising that Rydex 2x S&P Select Sector
Energy ETF returned -72.94%. since its inception on 6/10/2008. In that period,
its benchmark, the Energy Select Sector Index, returned -40.70%. Rydex 2x S&P
Select Sector Energy ETF achieved a daily correlation of 100% to its benchmark
of 200% of the daily price movement of the Energy Select Sector Index.
Soaring oil and coal prices helped to ensure that energy stocks delivered some
of the best-performing companies in the first half of 2008. In the second
quarter alone, coal industry stocks jumped 65% on rising coal prices. Oil and
gas exploration companies jumped nearly 32% in tandem with record oil prices as
expectations for continued international energy demands would lead to increases
in spending on oil and gas exploration. However, during the summer, rising
inflation concerns both in the United States and abroad, coupled with the
continued housing and financial crises, caused concerns about a global economic
slowdown. Cost-conscious consumers began to drive less and conserve electricity.
By July month-end, oil prices began a rapid descent that saw prices as low as
$68 by the end of October. The once high-flying coal companies also suffered as
oil prices declined due to a waning demand for alternative energy sources.
Since the ETF's inception on 6/10/2008 through the year ended 10/31/2008, coal
and consumable fuel companies fell an average of 67%. Given their relatively
small weight in the portfolio their effect on total return was minor compared to
that of integrated oil and gas companies such as ExxonMobil (XOM) and Chevron
(CVX). With more than 50% exposure to this sector in the portfolio, negative
performance from this industry was the primary driver of positive returns.
The apparent discrepancy between the leverage and unleveraged indices is the
result of compounding, which is described briefly on page 4 of this report.
CUMULATIVE FUND PERFORMANCE: JUNE 10, 2008 - OCTOBER 31, 2008
(Performance Graph)
<Table>
<Caption>
RYDEX
2X S&P S&P 500
SELECT SECTOR TOTAL RETURN ENERGY SELECT
ENERGY ETF(A) INDEX(B) SECTOR INDEX(C)
------------- ------------ ---------------
6/10/2008 10000 10000 10000
6/11/2008 10168 9833 10084
6/12/2008 9808 9866 9905
6/13/2008 10020 10015 10011
6/14/2008 10020 10015 10011
6/15/2008 10020 10015 10011
6/16/2008 10091 10016 10047
6/17/2008 10468 9948 10236
6/18/2008 10481 9851 10243
6/19/2008 10019 9891 10017
6/20/2008 9881 9708 9950
6/21/2008 9881 9708 9950
6/22/2008 9881 9708 9950
6/23/2008 10648 9708 10334
6/24/2008 10280 9681 10156
6/25/2008 10145 9738 10091
6/26/2008 9937 9455 9988
6/27/2008 10137 9420 10088
6/28/2008 10137 9420 10088
6/29/2008 10137 9420 10088
6/30/2008 10477 9432 10258
7/1/2008 10607 9470 10322
7/2/2008 9859 9298 9957
7/3/2008 9703 9309 9880
7/4/2008 9703 9309 9880
7/5/2008 9703 9309 9880
7/6/2008 9703 9309 9880
7/7/2008 9224 9231 9637
7/8/2008 8929 9392 9485
7/9/2008 8516 9179 9265
7/10/2008 9004 9243 9530
7/11/2008 8900 9141 9475
7/12/2008 8900 9141 9475
7/13/2008 8900 9141 9475
7/14/2008 9047 9059 9555
7/15/2008 8267 8960 9143
7/16/2008 7900 9186 8944
7/17/2008 7584 9297 8767
7/18/2008 7804 9299 8897
7/19/2008 7804 9299 8897
7/20/2008 7804 9299 8897
7/21/2008 8287 9295 9174
7/22/2008 7852 9420 8933
7/23/2008 7193 9459 8559
7/24/2008 7108 9240 8509
7/25/2008 7256 9279 8599
7/26/2008 7256 9279 8599
7/27/2008 7256 9279 8599
7/28/2008 7211 9106 8572
7/29/2008 7073 9320 8487
7/30/2008 7901 9476 8987
7/31/2008 7360 9353 8677
8/1/2008 7313 9301 8652
8/2/2008 7313 9301 8652
8/3/2008 7313 9301 8652
8/4/2008 6560 9217 8208
8/5/2008 6665 9483 8275
8/6/2008 6968 9519 8465
8/7/2008 6755 9349 8334
8/8/2008 6628 9573 8258
8/9/2008 6628 9573 8258
8/10/2008 6628 9573 8258
8/11/2008 6588 9642 8226
8/12/2008 6527 9526 8188
8/13/2008 7009 9501 8489
8/14/2008 6824 9554 8376
8/15/2008 6567 9594 8213
8/16/2008 6567 9594 8213
8/17/2008 6567 9594 8213
8/18/2008 6407 9450 8112
8/19/2008 6791 9363 8355
8/20/2008 7219 9421 8617
8/21/2008 7548 9446 8814
8/22/2008 7271 9554 8653
8/23/2008 7271 9554 8653
8/24/2008 7271 9554 8653
8/25/2008 7069 9366 8534
8/26/2008 7329 9401 8692
8/27/2008 7529 9478 8811
8/28/2008 7372 9620 8718
8/29/2008 7185 9488 8608
8/30/2008 7185 9488 8608
8/31/2008 7185 9488 8608
9/1/2008 7185 9488 8608
9/2/2008 6469 9450 8181
9/3/2008 6385 9435 8129
9/4/2008 6128 9153 7964
9/5/2008 6083 9194 7936
9/6/2008 6083 9194 7936
9/7/2008 6083 9194 7936
9/8/2008 5963 9384 7856
9/9/2008 5149 9064 7320
9/10/2008 5537 9120 7593
9/11/2008 5717 9249 7717
9/12/2008 6056 9269 7947
9/13/2008 6056 9269 7947
9/14/2008 6056 9269 7947
9/15/2008 5167 8832 7364
9/16/2008 5559 8987 7641
9/17/2008 5281 8563 7451
9/18/2008 5604 8937 7673
9/19/2008 6423 9297 8234
9/20/2008 6423 9297 8234
9/21/2008 6423 9297 8234
9/22/2008 6273 8942 8140
9/23/2008 5877 8802 7885
9/24/2008 5875 8785 7884
9/25/2008 6133 8958 8058
9/26/2008 5870 8988 7886
9/27/2008 5870 8988 7886
9/28/2008 5870 8988 7886
9/29/2008 4505 8198 6986
9/30/2008 5055 8643 7407
10/1/2008 4824 8605 7239
10/2/2008 4125 8259 6729
10/3/2008 4097 8148 6707
10/4/2008 4097 8148 6707
10/5/2008 4097 8148 6707
10/6/2008 3750 7834 6425
10/7/2008 3273 7385 6022
10/8/2008 3336 7305 6078
10/9/2008 2555 6749 5380
10/10/2008 2127 6670 4936
10/11/2008 2127 6670 4936
10/12/2008 2127 6670 4936
10/13/2008 2945 7442 5883
10/14/2008 2943 7403 5883
10/15/2008 2010 6735 4948
10/16/2008 2308 7021 5314
10/17/2008 2316 6978 5325
10/18/2008 2316 6978 5325
10/19/2008 2316 6978 5325
10/20/2008 2852 7310 5930
10/21/2008 2615 7085 5682
10/22/2008 2048 6654 5067
10/23/2008 2290 6739 5374
10/24/2008 2104 6506 5154
10/25/2008 2104 6506 5154
10/26/2008 2104 6506 5154
10/27/2008 1844 6300 4844
10/28/2008 2273 6979 5405
10/29/2008 2408 6903 5562
10/30/2008 2652 7082 5840
10/31/2008 2706 7191 5902
</Table>
Data Points for the line graph do not reflect the reinvestment of dividends
on securities in the index.
TOTAL RETURNS FOR THE PERIOD ENDED OCTOBER 31, 2008
- --------------------------------------------------------------------------------
<Table>
<Caption>
SINCE INCEPTION
(06/10/2008)
---------------
RYDEX 2X S&P SELECT SECTOR ENERGY ETF............................ -72.94%
ENERGY SELECT SECTOR INDEX....................................... -40.70%
S&P 500 TOTAL RETURN INDEX....................................... -28.09%
</Table>
The returns presented above do not reflect the effect of taxes. Index returns
represent total returns. Past performance is no guarantee of future results.
ANNUAL REPORT 16
RYDEX 2x S&P SELECT SECTOR ENERGY ETF
PORTFOLIO SUMMARY (Unaudited) As of October 31, 2008
- --------------------------------------------------------------------------------
TOP 10 HOLDINGS*
- --------------------------------------------------------------------------------
<Table>
<Caption>
DESCRIPTION % OF NET ASSETS
- ------------------------------------------------------------------------------------
EXXON MOBIL CORP. 18.48%
CHEVRON CORP. 11.83%
CONOCOPHILLIPS 6.20%
OCCIDENTAL PETROLEUM CORP. 3.89%
SCHLUMBERGER, LTD. 3.31%
DEVON ENERGY CORP. 3.26%
APACHE CORP. 2.65%
TRANSOCEAN, INC. 2.48%
EOG RESOURCES, INC. 2.08%
XTO ENERGY, INC. 2.05%
- ------------------------------------------------------------------------------------
</Table>
INDUSTRY ALLOCATIONS*
(PIE CHART)
<Table>
Oil, Gas & Consumable Fuels 77.24
Energy Equipment & Services 17.11
Road & Rail 5.65
</Table>
* The Fund's Top Ten Holdings are expressed as a percentage of net assets and
the Industry Allocations are expressed as a percentage of the Fund's equity
investments market value. These percentages may change over time.
ANNUAL REPORT 17
RYDEX INVERSE 2x S&P SELECT SECTOR ENERGY ETF
MANAGER'S ANALYSIS (Unaudited)
- --------------------------------------------------------------------------------
Since its inception on 6/10/2008, Rydex Inverse 2x S&P Select Sector Energy ETF
returned 49.75%. Since inception, its benchmark, the Energy Select Sector Index,
returned -40.70%. The ETF achieved a daily correlation of 100% to its benchmark
of -200% of the daily price movement of the Energy Select Sector Index.
Soaring oil and coal prices helped to ensure that energy stocks delivered some
of the best-performing companies in the first half of 2008. In the second
quarter alone, coal industry stocks jumped 65% on rising coal prices. Oil and
gas exploration companies jumped nearly 32% in tandem with record oil prices as
expectations for continued international energy demands would lead to increases
in spending on oil and gas exploration. However, during the summer, rising
inflation concerns both in the United States and abroad, coupled with the
continued housing and financial crises, caused concerns about a global economic
slowdown. Cost-conscious consumers began to drive less and conserve electricity.
By July month-end, oil prices began a rapid descent that saw prices as low as
$68 by the end of October. The once high-flying coal companies also suffered as
oil prices declined due to a waning demand for alternative energy sources.
Since the ETF's inception on 6/10/2008 through the year ended 10/31/2008, coal
and consumable fuel companies fell an average of 67%. Given their relatively
small weight in the portfolio their effect on total return was minor compared to
that of integrated oil and gas companies such as ExxonMobil (XOM) and Chevron
(CVX). With more than 50% exposure to this sector in the portfolio, negative
performance from this industry was the primary driver of positive returns.
The apparent discrepancy between the leverage and unleveraged indices is the
result of compounding, which is described briefly on page 4 of this report.
CUMULATIVE FUND PERFORMANCE: JUNE 10, 2008 - OCTOBER 31, 2008
(Performance Graph)
<Table>
<Caption>
RYDEX
INVERSE 2X
S&P SELECT S&P ENERGY
SECTOR ENERGY 500 TOTAL SELECT SECTOR
ETF(A) RETURN INDEX(B) INDEX(C)
------------- --------------- -------------
6/10/2008 10000 10000 10000
6/11/2008 9831 9833 10084
6/12/2008 10176 9866 9905
6/13/2008 9964 10015 10011
6/14/2008 9964 10015 10011
6/15/2008 9964 10015 10011
6/16/2008 9895 10016 10047
6/17/2008 9523 9948 10236
6/18/2008 9511 9851 10243
6/19/2008 9933 9891 10017
6/20/2008 10069 9708 9950
6/21/2008 10069 9708 9950
6/22/2008 10069 9708 9950
6/23/2008 9299 9708 10334
6/24/2008 9621 9681 10156
6/25/2008 9747 9738 10091
6/26/2008 9943 9455 9988
6/27/2008 9749 9420 10088
6/28/2008 9749 9420 10088
6/29/2008 9749 9420 10088
6/30/2008 9423 9432 10258
7/1/2008 9308 9470 10322
7/2/2008 9972 9298 9957
7/3/2008 10127 9309 9880
7/4/2008 10127 9309 9880
7/5/2008 10127 9309 9880
7/6/2008 10127 9309 9880
7/7/2008 10621 9231 9637
7/8/2008 10949 9392 9485
7/9/2008 11456 9179 9265
7/10/2008 10811 9243 9530
7/11/2008 10940 9141 9475
7/12/2008 10940 9141 9475
7/13/2008 10940 9141 9475
7/14/2008 10759 9059 9555
7/15/2008 11677 8960 9143
7/16/2008 12173 9186 8944
7/17/2008 12657 9297 8767
7/18/2008 12280 9299 8897
7/19/2008 12280 9299 8897
7/20/2008 12280 9299 8897
7/21/2008 11516 9295 9174
7/22/2008 12119 9420 8933
7/23/2008 13133 9459 8559
7/24/2008 13289 9240 8509
7/25/2008 13009 9279 8599
7/26/2008 13009 9279 8599
7/27/2008 13009 9279 8599
7/28/2008 13092 9106 8572
7/29/2008 13339 9320 8487
7/30/2008 11759 9476 8987
7/31/2008 12572 9353 8677
8/1/2008 12651 9301 8652
8/2/2008 12651 9301 8652
8/3/2008 12651 9301 8652
8/4/2008 13933 9217 8208
8/5/2008 13705 9483 8275
8/6/2008 13068 9519 8465
8/7/2008 13476 9349 8334
8/8/2008 13728 9573 8258
8/9/2008 13728 9573 8258
8/10/2008 13728 9573 8258
8/11/2008 13812 9642 8226
8/12/2008 13943 9526 8188
8/13/2008 12923 9501 8489
8/14/2008 13267 9554 8376
8/15/2008 13765 9594 8213
8/16/2008 13765 9594 8213
8/17/2008 13765 9594 8213
8/18/2008 14101 9450 8112
8/19/2008 13253 9363 8355
8/20/2008 12417 9421 8617
8/21/2008 11851 9446 8814
8/22/2008 12285 9554 8653
8/23/2008 12285 9554 8653
8/24/2008 12285 9554 8653
8/25/2008 12628 9366 8534
8/26/2008 12156 9401 8692
8/27/2008 11825 9478 8811
8/28/2008 12077 9620 8718
8/29/2008 12388 9488 8608
8/30/2008 12388 9488 8608
8/31/2008 12388 9488 8608
9/1/2008 12388 9488 8608
9/2/2008 13615 9450 8181
9/3/2008 13791 9435 8129
9/4/2008 14359 9153 7964
9/5/2008 14465 9194 7936
9/6/2008 14465 9194 7936
9/7/2008 14465 9194 7936
9/8/2008 14749 9384 7856
9/9/2008 16764 9064 7320
9/10/2008 15535 9120 7593
9/11/2008 15031 9249 7717
9/12/2008 14129 9269 7947
9/13/2008 14129 9269 7947
9/14/2008 14129 9269 7947
9/15/2008 16209 8832 7364
9/16/2008 15020 8987 7641
9/17/2008 15777 8563 7451
9/18/2008 14905 8937 7673
9/19/2008 12820 9297 8234
9/20/2008 12820 9297 8234
9/21/2008 12820 9297 8234
9/22/2008 13101 8942 8140
9/23/2008 13882 8802 7885
9/24/2008 13886 8785 7884
9/25/2008 13284 8958 8058
9/26/2008 13848 8988 7886
9/27/2008 13848 8988 7886
9/28/2008 13848 8988 7886
9/29/2008 16952 8198 6986
9/30/2008 14936 8643 7407
10/1/2008 15602 8605 7239
10/2/2008 17743 8259 6729
10/3/2008 17862 8148 6707
10/4/2008 17862 8148 6707
10/5/2008 17862 8148 6707
10/6/2008 19354 7834 6425
10/7/2008 21796 7385 6022
10/8/2008 21451 7305 6078
10/9/2008 26238 6749 5380
10/10/2008 30401 6670 4936
10/11/2008 30401 6670 4936
10/12/2008 30401 6670 4936
10/13/2008 19002 7442 5883
10/14/2008 19041 7403 5883
10/15/2008 24990 6735 4948
10/16/2008 21342 7021 5314
10/17/2008 21258 6978 5325
10/18/2008 21258 6978 5325
10/19/2008 21258 6978 5325
10/20/2008 16598 7310 5930
10/21/2008 18003 7085 5682
10/22/2008 21823 6654 5067
10/23/2008 19171 6739 5374
10/24/2008 20760 6506 5154
10/25/2008 20760 6506 5154
10/26/2008 20760 6506 5154
10/27/2008 23129 6300 4844
10/28/2008 17949 6979 5405
10/29/2008 16887 6903 5562
10/30/2008 15313 7082 5840
10/31/2008 14976 7191 5902
</Table>
Data Points for the line graph do not reflect the reinvestment of dividends
on securities in the index.
TOTAL RETURNS FOR THE PERIOD ENDED OCTOBER 31, 2008
- --------------------------------------------------------------------------------
<Table>
<Caption>
SINCE INCEPTION
(06/10/2008)
---------------
RYDEX INVERSE 2X S&P SELECT SECTOR ENERGY ETF.................... 49.75%
ENERGY SELECT SECTOR INDEX....................................... -40.70%
S&P 500 TOTAL RETURN INDEX....................................... -28.09%
</Table>
The returns presented above do not reflect the effect of taxes. Index returns
represent total returns. Past performance is no guarantee of future results.
ANNUAL REPORT 18
RYDEX 2x S&P SELECT SECTOR FINANCIALS ETF
MANAGER'S ANALYSIS (Unaudited)
- --------------------------------------------------------------------------------
Since its inception on 06/10/2008, Rydex 2x S&P Select Sector Financials ETF
returned -64.51%. Over the same time period, its benchmark, the Financials
Select Sector Index, returned -31.31%. For the period since its inception, this
ETF achieved a daily correlation of 100% to its benchmark of 200% of the daily
price movement of the Financials Select Sector Index.
Financial concerns that began in the fall of 2007 accelerated into a global
economic crisis culminating in a historic government intervention and
restrictions on short sales of financial companies. The market witnessed
stunning failures of major investment banks due to the toxic housing-backed debt
instruments. Bear Stearns was purchased by JP Morgan, the government took
control of Fannie Mae and Freddie Mac, and parts of Lehman Brothers were
acquired by Barclays. Wall Street institution Merrill Lynch was acquired by Bank
of America, and the two remaining investment banks, Goldman Sachs and Morgan
Stanley, changed their structure to become bank holding companies in order to
access much needed financing from the Federal Reserve. Not only did investment
banks have trouble, but insurance companies found themselves facing catastrophic
ratings downgrades. Multi-line insurers like AIG and investment banks like
Goldman Sachs contributed significantly to the benchmark's loss, with AIG losing
more than 90% of its value and Goldman Sachs down 40% in the same period.
The apparent discrepancy between the leverage and unleveraged indices is the
result of compounding, which is described briefly on page 4 of this report.
CUMULATIVE FUND PERFORMANCE: JUNE 10, 2008 - OCTOBER 31, 2008
(Performance Graph)
<Table>
<Caption>
RYDEX
2X S&P S&P 500 FINANCIAL
SELECT SECTOR TOTAL RETURN SELECT SECTOR
FINANCIAL ETF(A) INDEX(B) INDEX(C)
---------------- ------------ -------------
6/10/2008 10000 10000 10000
6/11/2008 9352 9833 9672
6/12/2008 9732 9866 9868
6/13/2008 10121 10015 10070
6/14/2008 10121 10015 10070
6/15/2008 10121 10015 10070
6/16/2008 10333 10016 10176
6/17/2008 9729 9948 9878
6/18/2008 9493 9851 9758
6/19/2008 9659 9891 9844
6/20/2008 9165 9708 9594
6/21/2008 9165 9708 9594
6/22/2008 9165 9708 9594
6/23/2008 8661 9708 9332
6/24/2008 8917 9681 9472
6/25/2008 8987 9738 9508
6/26/2008 8205 9455 9086
6/27/2008 7979 9420 8962
6/28/2008 7979 9420 8962
6/29/2008 7979 9420 8962
6/30/2008 7637 9432 8771
7/1/2008 7807 9470 8860
7/2/2008 7584 9298 8733
7/3/2008 7531 9309 8705
7/4/2008 7531 9309 8705
7/5/2008 7531 9309 8705
7/6/2008 7531 9309 8705
7/7/2008 7053 9231 8430
7/8/2008 7863 9392 8912
7/9/2008 7055 9179 8446
7/10/2008 6921 9243 8368
7/11/2008 6567 9141 8153
7/12/2008 6567 9141 8153
7/13/2008 6567 9141 8153
7/14/2008 5905 9059 7744
7/15/2008 5552 8960 7515
7/16/2008 6929 9186 8440
7/17/2008 7825 9297 8986
7/18/2008 7995 9299 9085
7/19/2008 7995 9299 9085
7/20/2008 7995 9299 9085
7/21/2008 7860 9295 9008
7/22/2008 8892 9420 9602
7/23/2008 9223 9459 9782
7/24/2008 7981 9240 9122
7/25/2008 7884 9279 9067
7/26/2008 7884 9279 9067
7/27/2008 7884 9279 9067
7/28/2008 7172 9106 8654
7/29/2008 8245 9320 9303
7/30/2008 8572 9476 9489
7/31/2008 8368 9353 9369
8/1/2008 8468 9301 9426
8/2/2008 8468 9301 9426
8/3/2008 8468 9301 9426
8/4/2008 8255 9217 9308
8/5/2008 9088 9483 9778
8/6/2008 8919 9519 9681
8/7/2008 8031 9349 9195
8/8/2008 8591 9573 9520
8/9/2008 8591 9573 9520
8/10/2008 8591 9573 9520
8/11/2008 8913 9642 9698
8/12/2008 8001 9526 9194
8/13/2008 7531 9501 8922
8/14/2008 7916 9554 9149
8/15/2008 8089 9594 9251
8/16/2008 8089 9594 9251
8/17/2008 8089 9594 9251
8/18/2008 7509 9450 8920
8/19/2008 7045 9363 8649
8/20/2008 7280 9421 8794
8/21/2008 7127 9446 8700
8/22/2008 7571 9554 8970
8/23/2008 7571 9554 8970
8/24/2008 7571 9554 8970
8/25/2008 7100 9366 8691
8/26/2008 7201 9401 8753
8/27/2008 7443 9478 8899
8/28/2008 8116 9620 9300
8/29/2008 8020 9488 9245
8/30/2008 8020 9488 9245
8/31/2008 8020 9488 9245
9/1/2008 8020 9488 9245
9/2/2008 8311 9450 9413
9/3/2008 8567 9435 9541
9/4/2008 7765 9153 9093
9/5/2008 8271 9194 9387
9/6/2008 8271 9194 9387
9/7/2008 8271 9194 9387
9/8/2008 9039 9384 9823
9/9/2008 7845 9064 9175
9/10/2008 7732 9120 9110
9/11/2008 7973 9249 9248
9/12/2008 7803 9269 9150
9/13/2008 7803 9269 9150
9/14/2008 7803 9269 9150
9/15/2008 6161 8832 8185
9/16/2008 6957 8987 8693
9/17/2008 5721 8563 7916
9/18/2008 7087 8937 8845
9/19/2008 8659 9297 9828
9/20/2008 8659 9297 9828
9/21/2008 8659 9297 9828
9/22/2008 7188 8942 8994
9/23/2008 6971 8802 8858
9/24/2008 6764 8785 8726
9/25/2008 7116 8958 8954
9/26/2008 7554 8988 9226
9/27/2008 7554 8988 9226
9/28/2008 7554 8988 9226
9/29/2008 5140 8198 7749
9/30/2008 6611 8643 8763
10/1/2008 6888 8605 8951
10/2/2008 6305 8259 8565
10/3/2008 5802 8148 8225
10/4/2008 5802 8148 8225
10/5/2008 5802 8148 8225
10/6/2008 5313 7834 7882
10/7/2008 4064 7385 6973
10/8/2008 3815 7305 6763
10/9/2008 2902 6749 5969
10/10/2008 3320 6670 6384
10/11/2008 3320 6670 6384
10/12/2008 3320 6670 6384
10/13/2008 3988 7442 7038
10/14/2008 4505 7403 7489
10/15/2008 3681 6735 6806
10/16/2008 3806 7021 6919
10/17/2008 3628 6978 6759
10/18/2008 3628 6978 6759
10/19/2008 3628 6978 6759
10/20/2008 3835 7310 6949
10/21/2008 3695 7085 6821
10/22/2008 3180 6654 6346
10/23/2008 3126 6739 6291
10/24/2008 2887 6506 6049
10/25/2008 2887 6506 6049
10/26/2008 2887 6506 6049
10/27/2008 2649 6300 5802
10/28/2008 3318 6979 6527
10/29/2008 3130 6903 6340
10/30/2008 3204 7082 6418
10/31/2008 3549 7191 6770
</Table>
Data Points for the line graph do not reflect the reinvestment of dividends
on securities in the index.
TOTAL RETURNS FOR THE PERIOD ENDED OCTOBER 31, 2008
- --------------------------------------------------------------------------------
<Table>
<Caption>
SINCE INCEPTION
(06/10/2008)
---------------
RYDEX 2X S&P SELECT SECTOR FINANCIALS ETF........................ -64.51%
FINANCIALS SELECT SECTOR INDEX................................... -31.31%
S&P 500 TOTAL RETURN INDEX....................................... -28.09%
</Table>
The returns presented above do not reflect the effect of taxes. Index returns
represent total returns. Past performance is no guarantee of future results.
ANNUAL REPORT 19
RYDEX 2x S&P SELECT SECTOR FINANCIALS ETF
PORTFOLIO SUMMARY (Unaudited) As of October 31, 2008
- --------------------------------------------------------------------------------
TOP 10 HOLDINGS*
- --------------------------------------------------------------------------------
<Table>
<Caption>
DESCRIPTION % OF NET ASSETS
- ------------------------------------------------------------------------------------
JPMORGAN CHASE & CO. 9.75%
BANK OF AMERICA CORP. 7.78%
WELLS FARGO & CO. 7.23%
CITIGROUP, INC. 4.77%
U.S. BANCORP 3.33%
GOLDMAN SACHS GROUP, INC. 2.58%
BANK OF NEW YORK MELLON CORP. 2.40%
AMERICAN EXPRESS CO. 2.05%
MERRILL LYNCH & CO., INC. 1.83%
METLIFE, INC. 1.62%
- ------------------------------------------------------------------------------------
</Table>
INDUSTRY ALLOCATIONS*
(PIE CHART)
<Table>
Diversified Financial Services 31.30
Commercial Banks 22.61
Capital Markets 17.10
Insurance 16.33
Real Estate Investment Trusts (REITs) 7.12
Consumer Finance 4.54
Thrifts & Mortgage Finance 0.90
Real Estate Management & Development 0.10
</Table>
* The Fund's Top Ten Holdings are expressed as a percentage of net assets and
the Industry Allocations are expressed as a percentage of the Fund's equity
investments market value. These percentages may change over time.
ANNUAL REPORT 20
RYDEX INVERSE 2x S&P SELECT SECTOR FINANCIALS ETF
MANAGER'S ANALYSIS (Unaudited)
- --------------------------------------------------------------------------------
Since its inception on 06/10/2008, Rydex Inverse 2x S&P Select Sector Financials
ETF returned -4.19%. Over the same time period, its benchmark, the Financials
Select Sector Index, returned -31.31%. For the period since its inception, Rydex
Inverse 2x S&P Select Sector Financials ETF achieved a daily correlation of 99%
to its benchmark of -200% of the daily price movement of the Financials Select
Sector Index.
It must be noted that for most of the period since inception, the Select Sector
Financials Index moved sideways and was characterized by extreme volatility due
to the implosion of the already-struggling financial sector. Inter-bank lending
came grinding to a halt on concerns of credit worthiness, and the Volatility
Index(R) (VIX) jumped to historic all-time highs in September and October 2008,
as the crisis culminated in the need for government intervention in the form of
the Department of Treasury's Troubled Assets Relief (TARP) Program. On September
19, 2008, the Securities and Exchange Commission (SEC) took emergency action and
banned all short selling of more than 900 financial-services stocks. This
government intervention was felt not only in financials -- additionally, the ban
on short selling had a large ripple effect on the futures and other derivative
markets, resulting in increased uncertainty and reduced liquidity. This
increased volatility in the stock market contributed to wider daily tracking
variance in the ETF during September and October. The SEC lifted the ban on
short selling on October 8, following the passage by the U.S. Congress of a $700
billion bailout plan. During this time, Rydex halted creations in the fund to
minimize the difficulty in our managing the fund.
The apparent discrepancy between the leverage and unleveraged indices is the
result of compounding, which is described briefly on page 4 of this report.
CUMULATIVE FUND PERFORMANCE: JUNE 10, 2008 - OCTOBER 31, 2008
(Performance Graph)
<Table>
<Caption>
RYDEX INVERSE
2X S&P S&P
SELECT SECTOR 500 TOTAL FINANCIAL SELECT
FINANCIAL ETF(A) RETURN INDEX(B) SECTOR INDEX(C)
---------------- --------------- ----------------
6/10/2008 10000 10000 10000
6/11/2008 10648 9833 9672
6/12/2008 10217 9866 9868
6/13/2008 9791 10015 10070
6/14/2008 9791 10015 10070
6/15/2008 9791 10015 10070
6/16/2008 9580 10016 10176
6/17/2008 10144 9948 9878
6/18/2008 10388 9851 9758
6/19/2008 10205 9891 9844
6/20/2008 10731 9708 9594
6/21/2008 10731 9708 9594
6/22/2008 10731 9708 9594
6/23/2008 11311 9708 9332
6/24/2008 10973 9681 9472
6/25/2008 10889 9738 9508
6/26/2008 11844 9455 9086
6/27/2008 12165 9420 8962
6/28/2008 12165 9420 8962
6/29/2008 12165 9420 8962
6/30/2008 12685 9432 8771
7/1/2008 12413 9470 8860
7/2/2008 12773 9298 8733
7/3/2008 12863 9309 8705
7/4/2008 12863 9309 8705
7/5/2008 12863 9309 8705
7/6/2008 12863 9309 8705
7/7/2008 13668 9231 8430
7/8/2008 12160 9392 8912
7/9/2008 13427 9179 8446
7/10/2008 13676 9243 8368
7/11/2008 14392 9141 8153
7/12/2008 14392 9141 8153
7/13/2008 14392 9141 8153
7/14/2008 15848 9059 7744
7/15/2008 16748 8960 7515
7/16/2008 12753 9186 8440
7/17/2008 11052 9297 8986
7/18/2008 10805 9299 9085
7/19/2008 10805 9299 9085
7/20/2008 10805 9299 9085
7/21/2008 10981 9295 9008
7/22/2008 9543 9420 9602
7/23/2008 9175 9459 9782
7/24/2008 10401 9240 9122
7/25/2008 10528 9279 9067
7/26/2008 10528 9279 9067
7/27/2008 10528 9279 9067
7/28/2008 11504 9106 8654
7/29/2008 9793 9320 9303
7/30/2008 9392 9476 9489
7/31/2008 9611 9353 9369
8/1/2008 9496 9301 9426
8/2/2008 9496 9301 9426
8/3/2008 9496 9301 9426
8/4/2008 9729 9217 9308
8/5/2008 8751 9483 9778
8/6/2008 8913 9519 9681
8/7/2008 9801 9349 9195
8/8/2008 9104 9573 9520
8/9/2008 9104 9573 9520
8/10/2008 9104 9573 9520
8/11/2008 8771 9642 9698
8/12/2008 9699 9526 9194
8/13/2008 10269 9501 8922
8/14/2008 9745 9554 9149
8/15/2008 9528 9594 9251
8/16/2008 9528 9594 9251
8/17/2008 9528 9594 9251
8/18/2008 10215 9450 8920
8/19/2008 10827 9363 8649
8/20/2008 10468 9421 8794
8/21/2008 10697 9446 8700
8/22/2008 10055 9554 8970
8/23/2008 10055 9554 8970
8/24/2008 10055 9554 8970
8/25/2008 10683 9366 8691
8/26/2008 10532 9401 8753
8/27/2008 10173 9478 8899
8/28/2008 9243 9620 9300
8/29/2008 9356 9488 9245
8/30/2008 9356 9488 9245
8/31/2008 9356 9488 9245
9/1/2008 9356 9488 9245
9/2/2008 9024 9450 9413
9/3/2008 8739 9435 9541
9/4/2008 9563 9153 9093
9/5/2008 8959 9194 9387
9/6/2008 8959 9194 9387
9/7/2008 8959 9194 9387
9/8/2008 8120 9384 9823
9/9/2008 9168 9064 9175
9/10/2008 9295 9120 9110
9/11/2008 9012 9249 9248
9/12/2008 9209 9269 9150
9/13/2008 9209 9269 9150
9/14/2008 9209 9269 9150
9/15/2008 11180 8832 8185
9/16/2008 9885 8987 8693
9/17/2008 11629 8563 7916
9/18/2008 9044 8937 8845
9/19/2008 7048 9297 9828
9/20/2008 7048 9297 9828
9/21/2008 7048 9297 9828
9/22/2008 8198 8942 8994
9/23/2008 8436 8802 8858
9/24/2008 8612 8785 8726
9/25/2008 8195 8958 8954
9/26/2008 7808 8988 9226
9/27/2008 7808 8988 9226
9/28/2008 7808 8988 9226
9/29/2008 9992 8198 7749
9/30/2008 8316 8643 8763
10/1/2008 8063 8605 8951
10/2/2008 8656 8259 8565
10/3/2008 9169 8148 8225
10/4/2008 9169 8148 8225
10/5/2008 9169 8148 8225
10/6/2008 9862 7834 7882
10/7/2008 11853 7385 6973
10/8/2008 12450 7305 6763
10/9/2008 15025 6749 5969
10/10/2008 13069 6670 6384
10/11/2008 13069 6670 6384
10/12/2008 13069 6670 6384
10/13/2008 10202 7442 7038
10/14/2008 8852 7403 7489
10/15/2008 10492 6735 6806
10/16/2008 10120 7021 6919
10/17/2008 10614 6978 6759
10/18/2008 10614 6978 6759
10/19/2008 10614 6978 6759
10/20/2008 9978 7310 6949
10/21/2008 10382 7085 6821
10/22/2008 11892 6654 6346
10/23/2008 12103 6739 6291
10/24/2008 13085 6506 6049
10/25/2008 13085 6506 6049
10/26/2008 13085 6506 6049
10/27/2008 14175 6300 5802
10/28/2008 10602 6979 6527
10/29/2008 11262 6903 6340
10/30/2008 10870 7082 6418
10/31/2008 9581 7191 6770
</Table>
Data Points for the line graph do not reflect the reinvestment of dividends
on securities in the index.
TOTAL RETURNS FOR THE PERIOD ENDED OCTOBER 31, 2008
- --------------------------------------------------------------------------------
<Table>
<Caption>
SINCE INCEPTION
(06/10/2008)
---------------
RYDEX INVERSE 2X S&P SELECT SECTOR FINANCIALS ETF................ -4.19%
FINANCIALS SELECT SECTOR INDEX................................... -31.31%
S&P 500 TOTAL RETURN INDEX....................................... -28.09%
</Table>
The returns presented above do not reflect the effect of taxes. Index returns
represent total returns. Past performance is no guarantee of future results.
ANNUAL REPORT 21
RYDEX 2x S&P SELECT SECTOR TECHNOLOGY ETF
MANAGER'S ANALYSIS (Unaudited)
- --------------------------------------------------------------------------------
Since its inception on 6/10/2008, Rydex 2x S&P Select Sector Technology ETF
returned -58.36%. Over the same time period, its benchmark, the Technology
Select Sector Index, returned -32.01%. For the period since its inception, Rydex
Inverse 2x S&P Select Sector Technology ETF achieved a daily correlation of 100%
to its benchmark of 200% of the daily price movement of the Technology Select
Sector Index.
The technology industry suffered with the rest of the economy as expectations
for global technology spending dried up in 2008. In fact, losses in the
technology sector were sizable across the board. Computer and peripheral
companies make up the largest component of the technology sector. Companies such
as Apple (AAPL), IBM (IBM), and Dell Inc. (DELL) contributing the most to the
sector's decline. Software companies such as giant Microsoft (MSFT) also
contributed to a large loss in the tech sector. Also, historic volatility in the
stock market in September and October led to wider daily tracking variances for
the fund in September and October.
The apparent discrepancy between the leverage and unleveraged indices is the
result of compounding, which is described briefly on page 4 of this report.
CUMULATIVE FUND PERFORMANCE: JUNE 10, 2008 - OCTOBER 31, 2008
(Performance Graph)
<Table>
<Caption>
RYDEX 2X
S&P SELECT S&P 500 TECHNOLOGY
SECTOR TECHNOLOGY TOTAL RETURN SELECT SECTOR
ETF(A) INDEX(B) INDEX(C)
----------------- ------------ -------------
6/10/2008 10000 10000 10000
6/11/2008 9513 9833 9757
6/12/2008 9623 9866 9813
6/13/2008 9981 10015 9999
6/14/2008 9981 10015 9999
6/15/2008 9981 10015 9999
6/16/2008 10008 10016 10013
6/17/2008 9845 9948 9932
6/18/2008 9599 9851 9808
6/19/2008 9808 9891 9916
6/20/2008 9320 9708 9670
6/21/2008 9320 9708 9670
6/22/2008 9320 9708 9670
6/23/2008 9216 9708 9617
6/24/2008 9165 9681 9591
6/25/2008 9427 9738 9729
6/26/2008 8784 9455 9396
6/27/2008 8685 9420 9345
6/28/2008 8685 9420 9345
6/29/2008 8685 9420 9345
6/30/2008 8629 9432 9316
7/1/2008 8644 9470 9324
7/2/2008 8355 9298 9168
7/3/2008 8341 9309 9164
7/4/2008 8341 9309 9164
7/5/2008 8341 9309 9164
7/6/2008 8341 9309 9164
7/7/2008 8447 9231 9222
7/8/2008 8637 9392 9311
7/9/2008 8107 9179 9023
7/10/2008 8317 9243 9140
7/11/2008 8169 9141 9059
7/12/2008 8169 9141 9059
7/13/2008 8169 9141 9059
7/14/2008 8015 9059 8974
7/15/2008 8040 8960 8989
7/16/2008 8352 9186 9163
7/17/2008 8503 9297 9246
7/18/2008 8311 9299 9142
7/19/2008 8311 9299 9142
7/20/2008 8311 9299 9142
7/21/2008 8199 9295 9081
7/22/2008 8164 9420 9063
7/23/2008 8448 9459 9220
7/24/2008 8084 9240 9021
7/25/2008 8281 9279 9131
7/26/2008 8281 9279 9131
7/27/2008 8281 9279 9131
7/28/2008 7924 9106 8934
7/29/2008 8225 9320 9104
7/30/2008 8313 9476 9153
7/31/2008 8211 9353 9097
8/1/2008 8100 9301 9037
8/2/2008 8100 9301 9037
8/3/2008 8100 9301 9037
8/4/2008 8024 9217 8995
8/5/2008 8483 9483 9246
8/6/2008 8639 9519 9330
8/7/2008 8596 9349 9307
8/8/2008 9007 9573 9530
8/9/2008 9007 9573 9530
8/10/2008 9007 9573 9530
8/11/2008 9144 9642 9604
8/12/2008 9117 9526 9590
8/13/2008 9065 9501 9563
8/14/2008 9180 9554 9623
8/15/2008 9233 9594 9653
8/16/2008 9233 9594 9653
8/17/2008 9233 9594 9653
8/18/2008 8995 9450 9529
8/19/2008 8744 9363 9393
8/20/2008 8787 9421 9416
8/21/2008 8753 9446 9399
8/22/2008 9016 9554 9542
8/23/2008 9016 9554 9542
8/24/2008 9016 9554 9542
8/25/2008 8681 9366 9365
8/26/2008 8620 9401 9333
8/27/2008 8784 9478 9420
8/28/2008 8977 9620 9524
8/29/2008 8576 9488 9313
8/30/2008 8576 9488 9313
8/31/2008 8576 9488 9313
9/1/2008 8576 9488 9313
9/2/2008 8411 9450 9224
9/3/2008 8167 9435 9091
9/4/2008 7628 9153 8791
9/5/2008 7585 9194 8767
9/6/2008 7585 9194 8767
9/7/2008 7585 9194 8767
9/8/2008 7724 9384 8847
9/9/2008 7428 9064 8678
9/10/2008 7448 9120 8690
9/11/2008 7608 9249 8783
9/12/2008 7615 9269 8788
9/13/2008 7615 9269 8788
9/14/2008 7615 9269 8788
9/15/2008 7035 8832 8455
9/16/2008 7080 8987 8482
9/17/2008 6388 8563 8070
9/18/2008 6887 8937 8380
9/19/2008 7318 9297 8642
9/20/2008 7318 9297 8642
9/21/2008 7318 9297 8642
9/22/2008 6758 8942 8314
9/23/2008 6620 8802 8232
9/24/2008 6714 8785 8290
9/25/2008 7007 8958 8473
9/26/2008 7031 8988 8489
9/27/2008 7031 8988 8489
9/28/2008 7031 8988 8489
9/29/2008 5772 8198 7729
9/30/2008 6318 8643 8100
10/1/2008 6180 8605 7952
10/2/2008 5700 8259 7647
10/3/2008 5620 8148 7594
10/4/2008 5620 8148 7594
10/5/2008 5620 8148 7594
10/6/2008 5150 7834 7282
10/7/2008 4505 7385 6861
10/8/2008 4402 7305 6770
10/9/2008 4032 6749 6494
10/10/2008 3956 6670 6437
10/11/2008 3956 6670 6437
10/12/2008 3956 6670 6437
10/13/2008 4944 7442 7234
10/14/2008 4646 7403 7015
10/15/2008 3905 6735 6467
10/16/2008 4259 7021 6759
10/17/2008 4227 6978 6735
10/18/2008 4227 6978 6735
10/19/2008 4227 6978 6735
10/20/2008 4558 7310 6994
10/21/2008 4080 7085 6626
10/22/2008 3662 6654 6289
10/23/2008 3710 6739 6331
10/24/2008 3507 6506 6158
10/25/2008 3507 6506 6158
10/26/2008 3507 6506 6158
10/27/2008 3379 6300 6048
10/28/2008 4155 6979 6743
10/29/2008 4018 6903 6630
10/30/2008 4174 7082 6762
10/31/2008 4163 7191 6755
</Table>
Data Points for the line graph do not reflect the reinvestment of dividends
on securities in the index.
TOTAL RETURNS FOR THE PERIOD ENDED OCTOBER 31, 2008
- --------------------------------------------------------------------------------
<Table>
<Caption>
SINCE INCEPTION
(06/10/2008)
---------------
RYDEX 2X SELECT SECTOR TECHNOLOGY ETF............................ -58.36%
TECHNOLOGY SELECT SECTOR INDEX................................... -32.01%
S&P 500 TOTAL RETURN INDEX....................................... -28.09%
</Table>
The returns presented above do not reflect the effect of taxes. Index returns
represent total returns. Past performance is no guarantee of future results.
ANNUAL REPORT 22
RYDEX 2x S&P SELECT SECTOR TECHNOLOGY ETF
PORTFOLIO SUMMARY (Unaudited) As of October 31, 2008
- --------------------------------------------------------------------------------
TOP 10 HOLDINGS*
- --------------------------------------------------------------------------------
<Table>
<Caption>
DESCRIPTION % OF NET ASSETS
- ------------------------------------------------------------------------------------
MICROSOFT CORP. 9.01%
AT&T, INC. 8.11%
INTERNATIONAL BUSINESS MACHINES CORP. 6.47%
CISCO SYSTEMS, INC. 5.39%
APPLE, INC. 4.90%
HEWLETT-PACKARD CO. 4.82%
VERIZON COMMUNICATIONS, INC. 4.36%
INTEL CORP. 4.12%
GOOGLE, INC. -- CLASS A 3.92%
ORACLE CORP. 3.70%
- ------------------------------------------------------------------------------------
</Table>
INDUSTRY ALLOCATIONS*
(PIE CHART)
<Table>
Computers & Peripherals 23.47
Software 19.68
Diversified Telecommunication Services 16.14
Communications Equipment 13.49
Semiconductors & Semiconductor Equipment 11.57
Internet Software & Services 7.32
IT Services 4.85
Electronic Equipment & Instruments 1.67
Wireless Telecommunication Services 1.36
Office Electronics 0.45
</Table>
* The Fund's Top Ten Holdings are expressed as a percentage of net assets and
the Industry Allocations are expressed as a percentage of the Fund's equity
investments market value. These percentages may change over time.
ANNUAL REPORT 23
RYDEX INVERSE 2x S&P SELECT SECTOR TECHNOLOGY ETF
MANAGER'S ANALYSIS (Unaudited)
- --------------------------------------------------------------------------------
Since its inception on 6/10/2008, Rydex Inverse 2x S&P Select Sector Technology
ETF returned 72.79%. Over the same time period, its benchmark, the Technology
Select Sector Index, returned -32.01%. For the period since its inception, the
ETF achieved a daily correlation of 100% to its benchmark of -200% of the daily
price movement of the Technology Select Sector Index.
The technology industry suffered with the rest of the economy as expectations
for global technology spending dried up in 2008. In fact, losses in the
technology sector were sizable across the board. Computer and peripheral
companies make up the largest component of the technology sector. Companies such
as Apple (AAPL), IBM (IBM), and Dell Inc. (DELL) contributing the most to the
sector's decline. Software companies such as giant Microsoft (MSFT) also
contributed to a large loss in the tech sector. Also, historic volatility in the
stock market in September and October led to wider daily tracking variances for
the fund in September and October.
The apparent discrepancy between the leverage and unleveraged indices is the
result of compounding, which is described briefly on page 4 of this report.
CUMULATIVE FUND PERFORMANCE: JUNE 10, 2008 - OCTOBER 31, 2008
(Performance Graph)
<Table>
<Caption>
RYDEX
INVERSE 2X
S&P SELECT S&P TECHNOLOGY
SECTOR TECHNOLOGY 500 TOTAL SELECT SECTOR
ETF(A) RETURN INDEX(B) INDEX(C)
----------------- --------------- -------------
6/10/2008 10000 10000 10000
6/11/2008 10483 9833 9757
6/12/2008 10364 9866 9813
6/13/2008 9971 10015 9999
6/14/2008 9971 10015 9999
6/15/2008 9971 10015 9999
6/16/2008 9944 10016 10013
6/17/2008 10105 9948 9932
6/18/2008 10359 9851 9808
6/19/2008 10133 9891 9916
6/20/2008 10637 9708 9670
6/21/2008 10637 9708 9670
6/22/2008 10637 9708 9670
6/23/2008 10755 9708 9617
6/24/2008 10813 9681 9591
6/25/2008 10507 9738 9729
6/26/2008 11224 9455 9396
6/27/2008 11351 9420 9345
6/28/2008 11351 9420 9345
6/29/2008 11351 9420 9345
6/30/2008 11423 9432 9316
7/1/2008 11404 9470 9324
7/2/2008 11785 9298 9168
7/3/2008 11805 9309 9164
7/4/2008 11805 9309 9164
7/5/2008 11805 9309 9164
7/6/2008 11805 9309 9164
7/7/2008 11661 9231 9222
7/8/2008 11405 9392 9311
7/9/2008 12116 9179 9023
7/10/2008 11805 9243 9140
7/11/2008 12021 9141 9059
7/12/2008 12021 9141 9059
7/13/2008 12021 9141 9059
7/14/2008 12253 9059 8974
7/15/2008 12215 8960 8989
7/16/2008 11752 9186 9163
7/17/2008 11540 9297 9246
7/18/2008 11803 9299 9142
7/19/2008 11803 9299 9142
7/20/2008 11803 9299 9142
7/21/2008 11960 9295 9081
7/22/2008 12012 9420 9063
7/23/2008 11592 9459 9220
7/24/2008 12093 9240 9021
7/25/2008 11805 9279 9131
7/26/2008 11805 9279 9131
7/27/2008 11805 9279 9131
7/28/2008 12316 9106 8934
7/29/2008 11851 9320 9104
7/30/2008 11724 9476 9153
7/31/2008 11869 9353 9097
8/1/2008 12028 9301 9037
8/2/2008 12028 9301 9037
8/3/2008 12028 9301 9037
8/4/2008 12137 9217 8995
8/5/2008 11455 9483 9246
8/6/2008 11241 9519 9330
8/7/2008 11297 9349 9307
8/8/2008 10759 9573 9530
8/9/2008 10759 9573 9530
8/10/2008 10759 9573 9530
8/11/2008 10595 9642 9604
8/12/2008 10627 9526 9590
8/13/2008 10688 9501 9563
8/14/2008 10552 9554 9623
8/15/2008 10492 9594 9653
8/16/2008 10492 9594 9653
8/17/2008 10492 9594 9653
8/18/2008 10761 9450 9529
8/19/2008 11063 9363 9393
8/20/2008 11008 9421 9416
8/21/2008 11051 9446 9399
8/22/2008 10720 9554 9542
8/23/2008 10720 9554 9542
8/24/2008 10720 9554 9542
8/25/2008 11116 9366 9365
8/26/2008 11195 9401 9333
8/27/2008 10987 9478 9420
8/28/2008 10745 9620 9524
8/29/2008 11224 9488 9313
8/30/2008 11224 9488 9313
8/31/2008 11224 9488 9313
9/1/2008 11224 9488 9313
9/2/2008 11435 9450 9224
9/3/2008 11767 9435 9091
9/4/2008 12537 9153 8791
9/5/2008 12605 9194 8767
9/6/2008 12605 9194 8767
9/7/2008 12605 9194 8767
9/8/2008 12383 9384 8847
9/9/2008 12849 9064 8678
9/10/2008 12816 9120 8690
9/11/2008 12545 9249 8783
9/12/2008 12536 9269 8788
9/13/2008 12536 9269 8788
9/14/2008 12536 9269 8788
9/15/2008 13491 8832 8455
9/16/2008 13407 8987 8482
9/17/2008 14705 8563 8070
9/18/2008 13631 8937 8380
9/19/2008 12808 9297 8642
9/20/2008 12808 9297 8642
9/21/2008 12808 9297 8642
9/22/2008 13758 8942 8314
9/23/2008 14043 8802 8232
9/24/2008 13855 8785 8290
9/25/2008 13238 8958 8473
9/26/2008 13194 8988 8489
9/27/2008 13194 8988 8489
9/28/2008 13194 8988 8489
9/29/2008 15512 8198 7729
9/30/2008 14386 8643 8100
10/1/2008 14542 8605 7952
10/2/2008 15614 8259 7647
10/3/2008 15829 8148 7594
10/4/2008 15829 8148 7594
10/5/2008 15829 8148 7594
10/6/2008 17077 7834 7282
10/7/2008 19279 7385 6861
10/8/2008 19701 7305 6770
10/9/2008 21357 6749 6494
10/10/2008 21758 6670 6437
10/11/2008 21758 6670 6437
10/12/2008 21758 6670 6437
10/13/2008 16461 7442 7234
10/14/2008 17502 7403 7015
10/15/2008 20103 6735 6467
10/16/2008 18326 7021 6759
10/17/2008 18465 6978 6735
10/18/2008 18465 6978 6735
10/19/2008 18465 6978 6735
10/20/2008 17065 7310 6994
10/21/2008 18893 7085 6626
10/22/2008 20790 6654 6289
10/23/2008 20516 6739 6331
10/24/2008 21657 6506 6158
10/25/2008 21657 6506 6158
10/26/2008 21657 6506 6158
10/27/2008 22401 6300 6048
10/28/2008 17412 6979 6743
10/29/2008 17990 6903 6630
10/30/2008 17238 7082 6762
10/31/2008 17279 7191 6755
</Table>
Data Points for the line graph do not reflect the reinvestment of dividends
on securities in the index.
TOTAL RETURNS FOR THE PERIOD ENDED OCTOBER 31, 2008
- --------------------------------------------------------------------------------
<Table>
<Caption>
SINCE INCEPTION
(06/10/2008)
---------------
RYDEX INVERSE 2X S&P SELECT SECTOR TECHNOLOGY ETF................ 72.79%
TECHNOLOGY SELECT SECTOR INDEX................................... -32.01%
S&P 500 TOTAL RETURN INDEX....................................... -28.09%
</Table>
The returns presented above do not reflect the effect of taxes. Index returns
represent total returns. Past performance is no guarantee of future results.
ANNUAL REPORT 24
RYDEX 2x S&P SELECT SECTOR HEALTH CARE ETF
MANAGER'S ANALYSIS (Unaudited)
- --------------------------------------------------------------------------------
Since its inception on 6/10/2008, Rydex 2x S&P Select Sector Health Care ETF
returned -29.33%. Over the same time period its benchmark, the Health Care
Select Sector Index, returned -12.76%. For the period since inception, the ETF
achieved a daily correlation of 100% to its benchmark of 200% of the daily price
movement of the Health Care Select Sector Index.
The health care sector remained relatively range-bound until the end of
September 2008, as a slowing economy began to affect stocks in the sector.
Pharmaceutical companies make up more than 50% of the index. Poor sales for
pharmaceutical giants like Wyeth (WYE) and Eli Lilly (LLY) contributed the most
to the index's poor performance. On the whole, pharmaceutical companies faced
the double whammy of lower earnings due to the increased competition of generic
drugs and a cut back in prescription drugs due to the general economic slowdown.
The apparent discrepancy between the leverage and unleveraged indices is the
result of compounding, which is described briefly on page 4 of this report.
CUMULATIVE FUND PERFORMANCE: JUNE 10, 2008 - OCTOBER 31, 2008
(Performance Graph)
<Table>
<Caption>
RYDEX 2X
S&P SELECT S&P HEALTH
SECTOR HEALTH 500 TOTAL CARE SELECT
CARE ETF(A) RETURN INDEX(B) SECTOR INDEX(C)
------------- --------------- ---------------
6/10/2008 10000 10000 10000
6/11/2008 9709 9833 9855
6/12/2008 9791 9866 9897
6/13/2008 10032 10015 10021
6/14/2008 10032 10015 10021
6/15/2008 10032 10015 10021
6/16/2008 9939 10016 9975
6/17/2008 9855 9948 9934
6/18/2008 9687 9851 9849
6/19/2008 9789 9891 9902
6/20/2008 9507 9708 9761
6/21/2008 9507 9708 9761
6/22/2008 9507 9708 9761
6/23/2008 9567 9708 9792
6/24/2008 9635 9681 9828
6/25/2008 9797 9738 9910
6/26/2008 9383 9455 9702
6/27/2008 9496 9420 9759
6/28/2008 9496 9420 9759
6/29/2008 9496 9420 9759
6/30/2008 9679 9432 9855
7/1/2008 9779 9470 9904
7/2/2008 9699 9298 9859
7/3/2008 9719 9309 9872
7/4/2008 9719 9309 9872
7/5/2008 9719 9309 9872
7/6/2008 9719 9309 9872
7/7/2008 9625 9231 9825
7/8/2008 10184 9392 10111
7/9/2008 10113 9179 10076
7/10/2008 10201 9243 10121
7/11/2008 9961 9141 9999
7/12/2008 9961 9141 9999
7/13/2008 9961 9141 9999
7/14/2008 9928 9059 9983
7/15/2008 10179 8960 10109
7/16/2008 10327 9186 10183
7/17/2008 10483 9297 10260
7/18/2008 10373 9299 10208
7/19/2008 10373 9299 10208
7/20/2008 10373 9299 10208
7/21/2008 10119 9295 10083
7/22/2008 10311 9420 10179
7/23/2008 10533 9459 10290
7/24/2008 10500 9240 10274
7/25/2008 10631 9279 10339
7/26/2008 10631 9279 10339
7/27/2008 10631 9279 10339
7/28/2008 10427 9106 10240
7/29/2008 10573 9320 10313
7/30/2008 10556 9476 10304
7/31/2008 10628 9353 10340
8/1/2008 10413 9301 10237
8/2/2008 10413 9301 10237
8/3/2008 10413 9301 10237
8/4/2008 10675 9217 10366
8/5/2008 11220 9483 10630
8/6/2008 11284 9519 10645
8/7/2008 10995 9349 10508
8/8/2008 11527 9573 10762
8/9/2008 11527 9573 10762
8/10/2008 11527 9573 10762
8/11/2008 11549 9642 10770
8/12/2008 11485 9526 10741
8/13/2008 11397 9501 10697
8/14/2008 11496 9554 10743
8/15/2008 11707 9594 10843
8/16/2008 11707 9594 10843
8/17/2008 11707 9594 10843
8/18/2008 11469 9450 10734
8/19/2008 11305 9363 10657
8/20/2008 11192 9421 10604
8/21/2008 11247 9446 10631
8/22/2008 11461 9554 10725
8/23/2008 11461 9554 10725
8/24/2008 11461 9554 10725
8/25/2008 11099 9366 10555
8/26/2008 11108 9401 10560
8/27/2008 11095 9478 10554
8/28/2008 11281 9620 10643
8/29/2008 11013 9488 10518
8/30/2008 11013 9488 10518
8/31/2008 11013 9488 10518
9/1/2008 11013 9488 10518
9/2/2008 11037 9450 10530
9/3/2008 11063 9435 10537
9/4/2008 10500 9153 10270
9/5/2008 10392 9194 10219
9/6/2008 10392 9194 10219
9/7/2008 10392 9194 10219
9/8/2008 10825 9384 10429
9/9/2008 10457 9064 10253
9/10/2008 10491 9120 10270
9/11/2008 10776 9249 10409
9/12/2008 10728 9269 10387
9/13/2008 10728 9269 10387
9/14/2008 10728 9269 10387
9/15/2008 10300 8832 10181
9/16/2008 10324 8987 10193
9/17/2008 9639 8563 9857
9/18/2008 10047 8937 10063
9/19/2008 10162 9297 10123
9/20/2008 10162 9297 10123
9/21/2008 10162 9297 10123
9/22/2008 9647 8942 9867
9/23/2008 9552 8802 9820
9/24/2008 9658 8785 9874
9/25/2008 9967 8958 10033
9/26/2008 10036 8988 10070
9/27/2008 10036 8988 10070
9/28/2008 10036 8988 10070
9/29/2008 8866 8198 9484
9/30/2008 9576 8643 9846
10/1/2008 9578 8605 9841
10/2/2008 9275 8259 9686
10/3/2008 9152 8148 9625
10/4/2008 9152 8148 9625
10/5/2008 9152 8148 9625
10/6/2008 8296 7834 9176
10/7/2008 7705 7385 8856
10/8/2008 7503 7305 8742
10/9/2008 6416 6749 8119
10/10/2008 5980 6670 7848
10/11/2008 5980 6670 7848
10/12/2008 5980 6670 7848
10/13/2008 7486 7442 8826
10/14/2008 7475 7403 8821
10/15/2008 6455 6735 8224
10/16/2008 6937 7021 8527
10/17/2008 6941 6978 8532
10/18/2008 6941 6978 8532
10/19/2008 6941 6978 8532
10/20/2008 7509 7310 8878
10/21/2008 7281 7085 8744
10/22/2008 6582 6654 8326
10/23/2008 6788 6739 8456
10/24/2008 6426 6506 8232
10/25/2008 6426 6506 8232
10/26/2008 6426 6506 8232
10/27/2008 5994 6300 7960
10/28/2008 6905 6979 8561
10/29/2008 6588 6903 8363
10/30/2008 6888 7082 8557
10/31/2008 7067 7191 8670
</Table>
Data Points for the line graph do not reflect the reinvestment of dividends
on securities in the index.
TOTAL RETURNS FOR THE PERIOD ENDED OCTOBER 31, 2008
- --------------------------------------------------------------------------------
<Table>
<Caption>
SINCE INCEPTION
(06/10/2008)
---------------
RYDEX 2X SELECT SECTOR HEALTH CARE ETF........................... -29.33%
HEALTH CARE SELECT SECTOR INDEX.................................. -12.76%
S&P 500 TOTAL RETURN INDEX....................................... -28.09%
</Table>
The returns presented above do not reflect the effect of taxes. Index returns
represent total returns. Past performance is no guarantee of future results.
ANNUAL REPORT 25
RYDEX 2x SELECT SECTOR HEALTH CARE ETF
PORTFOLIO SUMMARY (Unaudited) As of October 31, 2008
- --------------------------------------------------------------------------------
TOP 10 HOLDINGS*
- --------------------------------------------------------------------------------
<Table>
<Caption>
DESCRIPTION % OF NET ASSETS
- ------------------------------------------------------------------------------------
JOHNSON & JOHNSON 12.05%
PFIZER, INC. 8.39%
ABBOTT LABORATORIES 5.06%
MERCK & CO., INC. 4.66%
AMGEN, INC. 4.45%
MEDTRONIC, INC. 3.21%
WYETH 3.03%
GILEAD SCIENCES, INC. 2.97%
BRISTOL-MYERS SQUIBB CO. 2.87%
BAXTER INTERNATIONAL, INC. 2.71%
- ------------------------------------------------------------------------------------
</Table>
INDUSTRY ALLOCATIONS*
(PIE CHART)
<Table>
Pharmaceuticals 49.98
Health Care Equipment & Supplies 16.56
Biotechnology 13.83
Health Care Providers & Services 13.46
Road & Rail 3.27
Life Sciences Tools & Services 2.67
Health Care Technology 0.23
</Table>
* The Fund's Top Ten Holdings are expressed as a percentage of net assets and
the Industry Allocations are expressed as a percentage of the Fund's equity
investments market value. These percentages may change over time.
ANNUAL REPORT 26
RYDEX INVERSE 2x S&P SELECT SECTOR HEALTH CARE ETF
MANAGER'S ANALYSIS (Unaudited)
- --------------------------------------------------------------------------------
Since its inception on 6/10/2008, Rydex Inverse 2x S&P Select Sector Health Care
ETF returned 12.04%. Over the same time period, its benchmark, the Health Care
Select Sector Index, returned -12.76%. For the period since inception, Rydex
Inverse 2x S&P Select Sector Health Care ETF achieved a daily correlation of
100% to its benchmark of -200% of the daily price movement of the Health Care
Select Sector Index.
The health care sector remained relatively range-bound until the end of
September 2008, as a slowing economy began to affect stocks in the sector.
Pharmaceutical companies make up more than 50% of the index. Poor sales for
pharmaceutical giants like Wyeth (WYE) and Eli Lilly (LLY) contributed the most
to the index's poor performance. On the whole, pharmaceutical companies faced
the double whammy of lower earnings due to the increased competition of generic
drugs and a cut back in prescription drugs due to the general economic slowdown.
The year ending October 31, 2008 was marked by the stunning failure of the
financial markets, brought on by the implosion of housing-backed debt markets, a
growing global economic meltdown, and unprecedented volatility in the stock
market. The Volatility Index(R) (VIX) jumped to historic highs in September and
October as the economic crisis culminated in historic government intervention.
On September 19, 2008, the Securities and Exchange Commission (SEC) temporarily
banned short selling of financial stocks, which had a ripple effect on the
derivatives and futures markets. This increased volatility contributed to the
wider daily tracking variances seen in the ETF in September and October.
The apparent discrepancy between the leverage and unleveraged indices is the
result of compounding, which is described briefly on page 4 of this report.
CUMULATIVE FUND PERFORMANCE: JUNE 10, 2008 - OCTOBER 31, 2008
(Performance Graph)
<Table>
<Caption>
RYDEX INVERSE
2X S&P
SELECT SECTOR S&P HEALTH
HEALTH CARE 500 TOTAL CARE SELECT
ETF(A) RETURN INDEX(B) SECTOR INDEX(C)
------------- --------------- ---------------
6/10/2008 10000 10000 10000
6/11/2008 10288 9833 9855
6/12/2008 10203 9866 9897
6/13/2008 9949 10015 10021
6/14/2008 9949 10015 10021
6/15/2008 9949 10015 10021
6/16/2008 10043 10016 9975
6/17/2008 10128 9948 9934
6/18/2008 10301 9851 9849
6/19/2008 10193 9891 9902
6/20/2008 10484 9708 9761
6/21/2008 10484 9708 9761
6/22/2008 10484 9708 9761
6/23/2008 10420 9708 9792
6/24/2008 10345 9681 9828
6/25/2008 10175 9738 9910
6/26/2008 10604 9455 9702
6/27/2008 10479 9420 9759
6/28/2008 10479 9420 9759
6/29/2008 10479 9420 9759
6/30/2008 10281 9432 9855
7/1/2008 10177 9470 9904
7/2/2008 10261 9298 9859
7/3/2008 10243 9309 9872
7/4/2008 10243 9309 9872
7/5/2008 10243 9309 9872
7/6/2008 10243 9309 9872
7/7/2008 10341 9231 9825
7/8/2008 9751 9392 10111
7/9/2008 9819 9179 10076
7/10/2008 9735 9243 10121
7/11/2008 9967 9141 9999
7/12/2008 9967 9141 9999
7/13/2008 9967 9141 9999
7/14/2008 10001 9059 9983
7/15/2008 9753 8960 10109
7/16/2008 9615 9186 10183
7/17/2008 9471 9297 10260
7/18/2008 9571 9299 10208
7/19/2008 9571 9299 10208
7/20/2008 9571 9299 10208
7/21/2008 9805 9295 10083
7/22/2008 9621 9420 10179
7/23/2008 9412 9459 10290
7/24/2008 9443 9240 10274
7/25/2008 9327 9279 10339
7/26/2008 9327 9279 10339
7/27/2008 9327 9279 10339
7/28/2008 9507 9106 10240
7/29/2008 9375 9320 10313
7/30/2008 9389 9476 10304
7/31/2008 9327 9353 10340
8/1/2008 9512 9301 10237
8/2/2008 9512 9301 10237
8/3/2008 9512 9301 10237
8/4/2008 9279 9217 10366
8/5/2008 8812 9483 10630
8/6/2008 8760 9519 10645
8/7/2008 8984 9349 10508
8/8/2008 8556 9573 10762
8/9/2008 8556 9573 10762
8/10/2008 8556 9573 10762
8/11/2008 8539 9642 10770
8/12/2008 8587 9526 10741
8/13/2008 8653 9501 10697
8/14/2008 8579 9554 10743
8/15/2008 8424 9594 10843
8/16/2008 8424 9594 10843
8/17/2008 8424 9594 10843
8/18/2008 8593 9450 10734
8/19/2008 8717 9363 10657
8/20/2008 8804 9421 10604
8/21/2008 8760 9446 10631
8/22/2008 8596 9554 10725
8/23/2008 8596 9554 10725
8/24/2008 8596 9554 10725
8/25/2008 8867 9366 10555
8/26/2008 8860 9401 10560
8/27/2008 8872 9478 10554
8/28/2008 8724 9620 10643
8/29/2008 8932 9488 10518
8/30/2008 8932 9488 10518
8/31/2008 8932 9488 10518
9/1/2008 8932 9488 10518
9/2/2008 8915 9450 10530
9/3/2008 8893 9435 10537
9/4/2008 9340 9153 10270
9/5/2008 9435 9194 10219
9/6/2008 9435 9194 10219
9/7/2008 9435 9194 10219
9/8/2008 9052 9384 10429
9/9/2008 9356 9064 10253
9/10/2008 9327 9120 10270
9/11/2008 9077 9249 10409
9/12/2008 9120 9269 10387
9/13/2008 9120 9269 10387
9/14/2008 9120 9269 10387
9/15/2008 9483 8832 10181
9/16/2008 9461 8987 10193
9/17/2008 10080 8563 9857
9/18/2008 9675 8937 10063
9/19/2008 9566 9297 10123
9/20/2008 9566 9297 10123
9/21/2008 9566 9297 10123
9/22/2008 10046 8942 9867
9/23/2008 10157 8802 9820
9/24/2008 10049 8785 9874
9/25/2008 9728 8958 10033
9/26/2008 9662 8988 10070
9/27/2008 9662 8988 10070
9/28/2008 9662 8988 10070
9/29/2008 10769 8198 9484
9/30/2008 10036 8643 9846
10/1/2008 10042 8605 9841
10/2/2008 10352 8259 9686
10/3/2008 10486 8148 9625
10/4/2008 10486 8148 9625
10/5/2008 10486 8148 9625
10/6/2008 11447 7834 9176
10/7/2008 12225 7385 8856
10/8/2008 12546 7305 8742
10/9/2008 14337 6749 8119
10/10/2008 15257 6670 7848
10/11/2008 15257 6670 7848
10/12/2008 15257 6670 7848
10/13/2008 11451 7442 8826
10/14/2008 11481 7403 8821
10/15/2008 13003 6735 8224
10/16/2008 12041 7021 8527
10/17/2008 12031 6978 8532
10/18/2008 12031 6978 8532
10/19/2008 12031 6978 8532
10/20/2008 11050 7310 8878
10/21/2008 11395 7085 8744
10/22/2008 12492 6654 8326
10/23/2008 12099 6739 8456
10/24/2008 12758 6506 8232
10/25/2008 12758 6506 8232
10/26/2008 12758 6506 8232
10/27/2008 13580 6300 7960
10/28/2008 11557 6979 8561
10/29/2008 12103 6903 8363
10/30/2008 11521 7082 8557
10/31/2008 11204 7191 8670
</Table>
Data Points for the line graph do not reflect the reinvestment of dividends
on securities in the index.
TOTAL RETURNS FOR THE PERIOD ENDED OCTOBER 31, 2008
- --------------------------------------------------------------------------------
<Table>
<Caption>
SINCE INCEPTION
(06/10/2008)
---------------
RYDEX INVERSE 2X S&P SELECT SECTOR HEALTH CARE ETF............... 12.04%
HEALTH CARE SELECT SECTOR INDEX.................................. -12.76%
S&P 500 TOTAL RETURN INDEX....................................... -28.09%
</Table>
The returns presented above do not reflect the effect of taxes. Index returns
represent total returns. Past performance is no guarantee of future results.
See Notes to Financial Statements.
ANNUAL REPORT 27
RYDEX 2X S&P 500 ETF
SCHEDULE OF INVESTMENTS October 31, 2008
- --------------------------------------------------------------------------------
<Table>
<Caption>
MARKET
SHARES VALUE
- -------------------------------------------------------------------
COMMON STOCKS 82.7%
AEROSPACE & DEFENSE 2.3%
Boeing Co. ................................ 8,170 $427,046
General Dynamics Corp. .................... 4,390 264,805
Goodrich Corp. ............................ 1,380 50,453
Honeywell International, Inc. ............. 8,220 250,299
L-3 Communications Holdings, Inc. ......... 1,340 108,768
Lockheed Martin Corp. ..................... 3,680 312,984
Northrop Grumman Corp. .................... 3,730 174,899
Precision Castparts Corp. ................. 1,540 99,807
Raytheon Co. .............................. 4,600 235,106
Rockwell Collins, Inc. .................... 1,760 65,525
United Technologies Corp. ................. 10,650 585,324
----------
TOTAL AEROSPACE & DEFENSE 2,575,016
----------
AIR FREIGHT & LOGISTICS 0.9%
C.H. Robinson Worldwide, Inc. ............. 1,880 97,346
Expeditors International of Washington,
Inc. ................................... 2,350 76,728
FedEx Corp. ............................... 3,440 224,873
United Parcel Service, Inc. -- Class B..... 11,130 587,441
----------
TOTAL AIR FREIGHT & LOGISTICS 986,388
----------
AIRLINES 0.1%
Southwest Airlines Co. .................... 8,100 95,418
----------
TOTAL AIRLINES 95,418
----------
AUTO COMPONENTS 0.1%
Goodyear Tire & Rubber Co.(The)*........... 2,660 23,727
Johnson Controls, Inc. .................... 6,560 116,309
----------
TOTAL AUTO COMPONENTS 140,036
----------
AUTOMOBILES 0.1%
Ford Motor Co.*............................ 24,970 54,684
General Motors Corp. ...................... 6,250 36,125
Harley-Davidson, Inc. ..................... 2,600 63,648
----------
TOTAL AUTOMOBILES 154,457
----------
BEVERAGES 2.4%
Anheuser-Busch Cos., Inc. ................. 7,940 492,518
Brown-Forman Corp. -- Class B.............. 1,080 49,032
Coca-Cola Co.(The)......................... 21,950 967,117
Coca-Cola Enterprises, Inc. ............... 3,500 35,175
Constellation Brands, Inc. -- Class A*..... 2,140 26,836
Dr Pepper Snapple Group, Inc.*............. 2,800 64,120
Molson Coors Brewing Co. -- Class B........ 1,660 62,017
Pepsi Bottling Group, Inc. ................ 1,510 34,911
PepsiCo, Inc. ............................. 17,290 985,703
----------
TOTAL BEVERAGES 2,717,429
----------
BIOTECHNOLOGY 1.6%
Amgen, Inc.*............................... 11,680 699,515
Biogen Idec, Inc.*......................... 3,210 136,586
Celgene Corp.*............................. 5,020 322,585
Genzyme Corp.*............................. 2,970 216,454
Gilead Sciences, Inc.*..................... 10,160 465,836
----------
TOTAL BIOTECHNOLOGY 1,840,976
----------
BUILDING PRODUCTS 0.0%(A)
Masco Corp. ............................... 3,980 40,397
----------
TOTAL BUILDING PRODUCTS 40,397
----------
CAPITAL MARKETS 2.1%
American Capital, Ltd. .................... 2,290 32,175
Ameriprise Financial, Inc. ................ 2,400 51,840
Bank of New York Mellon Corp. ............. 12,660 412,716
Charles Schwab Corp.(The).................. 10,300 196,936
E*TRADE Financial Corp.*................... 5,930 10,793
Federated Investors, Inc. -- Class B....... 970 23,474
Franklin Resources, Inc. .................. 1,680 114,240
Goldman Sachs Group, Inc.(The)............. 4,800 444,000
Invesco Ltd. .............................. 4,270 63,666
Janus Capital Group, Inc. ................. 1,760 20,662
Legg Mason, Inc. .......................... 1,570 34,838
Merrill Lynch & Co., Inc. ................. 16,910 314,357
Morgan Stanley............................. 12,250 214,007
Northern Trust Corp. ...................... 2,440 137,396
State Street Corp. ........................ 4,770 206,780
T. Rowe Price Group, Inc. ................. 2,860 113,084
----------
TOTAL CAPITAL MARKETS 2,390,964
----------
CHEMICALS 1.7%
Air Products & Chemicals, Inc. ............ 2,340 136,024
Ashland, Inc. ............................. 630 14,232
CF Industries Holdings, Inc. .............. 620 39,798
Dow Chemical Co.(The)...................... 10,210 272,301
Du Pont (E.I.) de Nemours & Co. ........... 9,960 318,720
Eastman Chemical Co. ...................... 840 33,928
Ecolab, Inc. .............................. 1,940 72,284
Hercules, Inc. ............................ 1,240 20,844
International Flavors & Fragrances, Inc. .. 870 27,736
Monsanto Co. .............................. 6,070 540,109
PPG Industries, Inc. ...................... 1,810 89,740
Praxair, Inc. ............................. 3,480 226,722
Rohm & Haas Co. ........................... 1,370 96,379
Sigma-Aldrich Corp. ....................... 1,390 60,965
----------
TOTAL CHEMICALS 1,949,782
----------
COMMERCIAL BANKS 2.8%
BB&T Corp. ................................ 6,070 217,610
Comerica, Inc. ............................ 1,660 45,799
Fifth Third Bancorp........................ 6,380 69,223
First Horizon National Corp. .............. 2,230 26,559
Huntington Bancshares, Inc. ............... 4,040 38,178
KeyCorp.................................... 5,460 66,776
M&T Bank Corp. ............................ 850 68,935
Marshall & Ilsley Corp. ................... 2,870 51,746
National City Corp. ....................... 23,110 62,397
PNC Financial Services Group, Inc. ........ 3,830 255,346
Regions Financial Corp. ................... 7,670 85,060
</Table>
See Notes to Financial Statements.
ANNUAL REPORT 28
RYDEX 2X S&P 500 ETF
SCHEDULE OF INVESTMENTS (continued) October 31, 2008
- --------------------------------------------------------------------------------
<Table>
<Caption>
MARKET
SHARES VALUE
- -------------------------------------------------------------------
COMMON STOCKS (CONTINUED)
SunTrust Banks, Inc. ...................... 3,910 $156,947
U.S. Bancorp............................... 19,240 573,545
Wachovia Corp. ............................ 23,840 152,814
Wells Fargo & Co. ......................... 36,540 1,244,187
Zions Bancorp.............................. 1,270 48,400
----------
TOTAL COMMERCIAL BANKS 3,163,522
----------
COMMERCIAL SERVICES & SUPPLIES 0.4%
Allied Waste Industries, Inc.*............. 3,740 38,971
Avery Dennison Corp. ...................... 1,180 41,324
Cintas Corp. .............................. 1,460 34,602
Equifax, Inc. ............................. 1,420 37,034
Monster Worldwide, Inc.*................... 1,370 19,509
Pitney Bowes, Inc. ........................ 2,290 56,746
R.R. Donnelley & Sons Co. ................. 2,320 38,442
Robert Half International, Inc. ........... 1,720 32,456
Waste Management, Inc. .................... 5,420 169,266
----------
TOTAL COMMERCIAL SERVICES & SUPPLIES 468,350
----------
COMMUNICATIONS EQUIPMENT 2.1%
Ciena Corp.*............................... 1,000 9,610
Cisco Systems, Inc.*....................... 65,230 1,159,137
Corning, Inc. ............................. 17,430 188,767
Harris Corp. .............................. 1,480 53,206
JDS Uniphase Corp.*........................ 2,370 12,940
Juniper Networks, Inc.*.................... 6,000 112,440
Motorola, Inc. ............................ 25,020 134,357
QUALCOMM, Inc. ............................ 18,120 693,271
Tellabs, Inc.*............................. 4,390 18,614
----------
TOTAL COMMUNICATIONS EQUIPMENT 2,382,342
----------
COMPUTERS & PERIPHERALS 3.7%
Apple, Inc.*............................... 9,780 1,052,230
Dell, Inc.*................................ 19,250 233,888
EMC Corp.*................................. 22,870 269,409
Hewlett-Packard Co. ....................... 27,050 1,035,474
International Business Machines Corp. ..... 14,960 1,390,831
Lexmark International, Inc. -- Class A*.... 970 25,055
NetApp, Inc.*.............................. 3,620 48,979
QLogic Corp.*.............................. 1,450 17,429
SanDisk Corp.*............................. 2,480 22,047
Sun Microsystems, Inc.*.................... 8,320 38,272
Teradata Corp.*............................ 1,970 30,318
----------
TOTAL COMPUTERS & PERIPHERALS 4,163,932
----------
CONSTRUCTION & ENGINEERING 0.1%
Fluor Corp. ............................... 1,980 79,061
Jacobs Engineering Group, Inc.*............ 1,350 49,181
----------
TOTAL CONSTRUCTION & ENGINEERING 128,242
----------
CONSTRUCTION MATERIALS 0.1%
Vulcan Materials Co. ...................... 1,210 65,679
----------
TOTAL CONSTRUCTION MATERIALS 65,679
----------
CONSUMER FINANCE 0.6%
American Express Co. ...................... 12,800 352,000
Capital One Financial Corp. ............... 4,150 162,348
Discover Financial Services................ 5,290 64,803
SLM Corp.*................................. 5,160 55,057
----------
TOTAL CONSUMER FINANCE 634,208
----------
CONTAINERS & PACKAGING 0.1%
Ball Corp. ................................ 1,070 36,594
Bemis Co., Inc. ........................... 1,100 27,324
Pactiv Corp.*.............................. 1,450 34,162
Sealed Air Corp. .......................... 1,750 29,610
----------
TOTAL CONTAINERS & PACKAGING 127,690
----------
DISTRIBUTORS 0.1%
Genuine Parts Co. ......................... 1,790 70,437
----------
TOTAL DISTRIBUTORS 70,437
----------
DIVERSIFIED CONSUMER SERVICES 0.1%
Apollo Group, Inc. -- Class A*............. 1,170 81,327
H&R Block, Inc. ........................... 3,620 71,386
----------
TOTAL DIVERSIFIED CONSUMER SERVICES 152,713
----------
DIVERSIFIED FINANCIAL SERVICES 3.9%
Bank of America Corp. ..................... 55,380 1,338,535
CIT Group, Inc. ........................... 3,150 13,041
Citigroup, Inc. ........................... 60,130 820,774
CME Group, Inc. ........................... 740 208,791
IntercontinentalExchange, Inc.*............ 830 71,015
JPMorgan Chase & Co. ...................... 40,680 1,678,050
Leucadia National Corp. ................... 1,950 52,338
Moody's Corp. ............................. 2,180 55,808
Nasdaq OMX Group (The)*.................... 1,500 48,690
NYSE Euronext.............................. 2,940 88,729
----------
TOTAL DIVERSIFIED FINANCIAL SERVICES 4,375,771
----------
DIVERSIFIED TELECOMMUNICATION SERVICES 2.5%
AT&T, Inc. ................................ 65,080 1,742,192
CenturyTel, Inc. .......................... 1,130 28,374
Embarq Corp. .............................. 1,570 47,100
Frontier Communications Corp. ............. 3,490 26,559
Qwest Communications International, Inc. .. 16,390 46,875
Verizon Communications, Inc. .............. 31,450 933,121
Windstream Corp. .......................... 4,850 36,424
----------
TOTAL DIVERSIFIED TELECOMMUNICATION SERVICES 2,860,645
----------
ELECTRIC UTILITIES 1.9%
Allegheny Energy, Inc. .................... 1,860 56,079
American Electric Power Co., Inc. ......... 4,440 144,877
Duke Energy Corp. ......................... 13,970 228,829
Edison International....................... 3,600 128,124
Entergy Corp. ............................. 2,120 165,466
Exelon Corp. .............................. 7,260 393,782
FirstEnergy Corp. ......................... 3,370 175,779
FPL Group, Inc. ........................... 4,510 213,052
Pepco Holdings, Inc. ...................... 2,230 46,050
</Table>
See Notes to Financial Statements.
ANNUAL REPORT 29
RYDEX 2X S&P 500 ETF
SCHEDULE OF INVESTMENTS (continued) October 31, 2008
- --------------------------------------------------------------------------------
<Table>
<Caption>
MARKET
SHARES VALUE
- -------------------------------------------------------------------
COMMON STOCKS (CONTINUED)
Pinnacle West Capital Corp. ............... 1,110 $35,132
PPL Corp. ................................. 4,140 135,875
Progress Energy, Inc. ..................... 2,890 113,779
Southern Co. .............................. 8,510 292,233
----------
TOTAL ELECTRIC UTILITIES 2,129,057
----------
ELECTRICAL EQUIPMENT 0.3%
Cooper Industries, Ltd. -- Class A......... 1,920 59,424
Emerson Electric Co. ...................... 8,570 280,496
Rockwell Automation, Inc. ................. 1,610 44,549
----------
TOTAL ELECTRICAL EQUIPMENT 384,469
----------
ELECTRONIC EQUIPMENT & INSTRUMENTS 0.3%
Agilent Technologies, Inc.*................ 3,950 87,650
Amphenol Corp. -- Class A.................. 1,950 55,868
Jabil Circuit, Inc. ....................... 2,320 19,511
Molex, Inc. ............................... 1,580 22,768
Tyco Electronics, Ltd. .................... 5,220 101,477
----------
TOTAL ELECTRONIC EQUIPMENT & INSTRUMENTS 287,274
----------
ENERGY EQUIPMENT & SERVICES 1.7%
Baker Hughes, Inc. ........................ 3,400 118,830
BJ Services Co. ........................... 3,250 41,762
Cameron International Corp.*............... 2,400 58,224
ENSCO International, Inc. ................. 1,580 60,056
Halliburton Co. ........................... 9,680 191,567
Nabors Industries, Ltd.*................... 3,090 44,434
National-Oilwell Varco, Inc.*.............. 4,610 137,793
Noble Corp. ............................... 2,970 95,664
Rowan Cos., Inc. .......................... 1,250 22,675
Schlumberger, Ltd. ........................ 13,250 684,362
Smith International, Inc. ................. 2,390 82,407
Transocean, Inc.*.......................... 3,520 289,802
Weatherford International, Ltd.*........... 7,520 126,938
----------
TOTAL ENERGY EQUIPMENT & SERVICES 1,954,514
----------
FOOD & STAPLES RETAILING 2.6%
Costco Wholesale Corp. .................... 4,800 273,648
CVS Caremark Corp. ........................ 15,850 485,802
Kroger Co.(The)............................ 7,230 198,536
Safeway, Inc. ............................. 4,810 102,309
SUPERVALU, Inc. ........................... 2,350 33,464
Sysco Corp. ............................... 6,650 174,230
Wal-Mart Stores, Inc. ..................... 24,760 1,381,855
Walgreen Co. .............................. 10,930 278,278
Whole Foods Market, Inc. .................. 1,550 16,616
----------
TOTAL FOOD & STAPLES RETAILING 2,944,738
----------
FOOD PRODUCTS 1.4%
Archer-Daniels-Midland Co. ................ 7,110 147,390
Campbell Soup Co. ......................... 2,340 88,803
ConAgra Foods, Inc. ....................... 5,000 87,100
Dean Foods Co.*............................ 1,680 36,725
General Mills, Inc. ....................... 3,710 251,316
H.J. Heinz Co. ............................ 3,450 151,179
Hershey Co.(The)........................... 1,830 68,149
Kellogg Co. ............................... 2,770 139,663
Kraft Foods, Inc. -- Class A............... 16,760 488,387
McCormick & Co., Inc. ..................... 1,420 47,797
Sara Lee Corp. ............................ 7,800 87,204
Tyson Foods, Inc. -- Class A............... 3,310 28,929
----------
TOTAL FOOD PRODUCTS 1,622,642
----------
GAS UTILITIES 0.1%
Nicor, Inc. ............................... 500 23,105
Questar Corp. ............................. 1,910 65,819
----------
TOTAL GAS UTILITIES 88,924
----------
HEALTH CARE EQUIPMENT & SUPPLIES 1.9%
Baxter International, Inc. ................ 6,930 419,196
Becton, Dickinson & Co. ................... 2,690 186,686
Boston Scientific Corp.*................... 16,570 149,627
C.R. Bard, Inc. ........................... 1,100 97,075
Covidien, Ltd. ............................ 5,540 245,366
Hospira, Inc.*............................. 1,760 48,963
Intuitive Surgical, Inc.*.................. 430 74,300
Medtronic, Inc. ........................... 12,460 502,512
St Jude Medical, Inc.*..................... 3,770 143,373
Stryker Corp. ............................. 2,730 145,946
Varian Medical Systems, Inc.*.............. 1,380 62,804
Zimmer Holdings, Inc.*..................... 2,490 115,611
----------
TOTAL HEALTH CARE EQUIPMENT & SUPPLIES 2,191,459
----------
HEALTH CARE PROVIDERS & SERVICES 1.6%
Aetna, Inc. ............................... 5,210 129,573
AmerisourceBergen Corp. ................... 1,750 54,723
Cardinal Health, Inc. ..................... 3,970 151,654
CIGNA Corp. ............................... 3,040 49,552
Coventry Health Care, Inc.*................ 1,640 21,632
DaVita, Inc.*.............................. 1,150 65,263
Express Scripts, Inc.*..................... 2,720 164,859
Humana, Inc.*.............................. 1,870 55,333
Laboratory Corp. of America Holdings*...... 1,230 75,633
McKesson Corp. ............................ 3,050 112,210
Medco Health Solutions, Inc.*.............. 5,580 211,761
Patterson Cos., Inc.*...................... 1,010 25,583
Quest Diagnostics, Inc. ................... 1,750 81,900
Tenet Healthcare Corp.*.................... 4,580 20,060
UnitedHealth Group, Inc. .................. 13,450 319,168
WellPoint, Inc.*........................... 5,650 219,615
----------
TOTAL HEALTH CARE PROVIDERS & SERVICES 1,758,519
----------
HEALTH CARE TECHNOLOGY 0.0%(A)
IMS Health, Inc. .......................... 2,010 28,823
----------
TOTAL HEALTH CARE TECHNOLOGY 28,823
----------
HOTELS, RESTAURANTS & LEISURE 1.2%
Carnival Corp. ............................ 4,830 122,682
Darden Restaurants, Inc. .................. 1,550 34,364
International Game Technology.............. 3,420 47,880
Marriott International, Inc. -- Class A.... 3,260 68,036
</Table>
See Notes to Financial Statements.
ANNUAL REPORT 30
RYDEX 2X S&P 500 ETF
SCHEDULE OF INVESTMENTS (continued) October 31, 2008
- --------------------------------------------------------------------------------
<Table>
<Caption>
MARKET
SHARES VALUE
- -------------------------------------------------------------------
COMMON STOCKS (CONTINUED)
McDonald's Corp. .......................... 12,420 $719,491
Starbucks Corp.*........................... 8,070 105,959
Starwood Hotels & Resorts Worldwide,
Inc. ................................... 2,060 46,432
Wyndham Worldwide Corp. ................... 1,960 16,052
Yum! Brands, Inc. ......................... 5,180 150,272
----------
TOTAL HOTELS, RESTAURANTS & LEISURE 1,311,168
----------
HOUSEHOLD DURABLES 0.3%
Black & Decker Corp. ...................... 660 33,409
Centex Corp. .............................. 1,360 16,660
D.R. Horton, Inc. ......................... 3,040 22,435
Fortune Brands, Inc. ...................... 1,660 63,312
Harman International Industries, Inc. ..... 650 11,941
KB HOME.................................... 830 13,853
Leggett & Platt, Inc. ..................... 1,780 30,901
Lennar Corp. -- Class A.................... 1,560 12,074
Newell Rubbermaid, Inc. ................... 3,060 42,075
Pulte Homes, Inc. ......................... 2,360 26,290
Snap-on, Inc. ............................. 630 23,279
Stanley Works(The)......................... 870 28,484
Whirlpool Corp. ........................... 820 38,253
----------
TOTAL HOUSEHOLD DURABLES 362,966
----------
HOUSEHOLD PRODUCTS 2.6%
Clorox Co. ................................ 1,520 92,431
Colgate-Palmolive Co. ..................... 5,580 350,201
Kimberly-Clark Corp. ...................... 4,590 281,321
Procter & Gamble Co. ...................... 33,510 2,162,735
----------
TOTAL HOUSEHOLD PRODUCTS 2,886,688
----------
INDEPENDENT POWER PRODUCERS & ENERGY TRADERS 0.1%
AES Corp.(The)*............................ 7,430 59,217
Constellation Energy Group, Inc. .......... 1,970 47,694
Dynegy, Inc. -- Class A*................... 5,580 20,311
----------
TOTAL INDEPENDENT POWER PRODUCERS & ENERGY TRADERS 127,222
----------
INDUSTRIAL CONGLOMERATES 2.6%
3M Co. .................................... 7,720 496,396
General Electric Co. ...................... 115,910 2,261,404
Textron, Inc. ............................. 2,740 48,498
Tyco International, Ltd. .................. 5,240 132,467
----------
TOTAL INDUSTRIAL CONGLOMERATES 2,938,765
----------
INSURANCE 2.0%
AFLAC, Inc. ............................... 5,260 232,913
Allstate Corp. ............................ 5,980 157,812
American International Group, Inc. ........ 29,690 56,708
Aon Corp. ................................. 3,070 129,861
Assurant, Inc. ............................ 1,310 33,379
Chubb Corp. ............................... 3,980 206,244
Cincinnati Financial Corp. ................ 1,790 46,522
Genworth Financial, Inc. -- Class A........ 4,780 23,135
Hartford Financial Services Group, Inc. ... 3,330 34,366
Lincoln National Corp. .................... 2,840 48,962
Loews Corp. ............................... 4,000 132,840
Marsh & McLennan Cos., Inc. ............... 5,660 165,951
MBIA, Inc. ................................ 2,160 21,233
MetLife, Inc. ............................. 8,410 279,380
Principal Financial Group, Inc. ........... 2,860 54,311
Progressive Corp. ......................... 7,460 106,454
Prudential Financial, Inc. ................ 4,720 141,600
Torchmark Corp. ........................... 960 40,099
Travelers Cos., Inc.(The).................. 6,520 277,426
Unum Group................................. 3,820 60,165
XL Capital, Ltd. -- Class A................ 3,450 33,465
----------
TOTAL INSURANCE 2,282,826
----------
INTERNET & CATALOG RETAIL 0.2%
Amazon.com, Inc.*.......................... 3,530 202,057
Expedia, Inc.*............................. 2,310 21,968
----------
TOTAL INTERNET & CATALOG RETAIL 224,025
----------
INTERNET SOFTWARE & SERVICES 1.2%
Akamai Technologies, Inc.*................. 1,870 26,891
eBay, Inc.*................................ 12,060 184,156
Google, Inc. -- Class A*................... 2,640 948,710
VeriSign, Inc.*............................ 2,130 45,156
Yahoo!, Inc.*.............................. 15,300 196,146
----------
TOTAL INTERNET SOFTWARE & SERVICES 1,401,059
----------
IT SERVICES 0.7%
Affiliated Computer Services, Inc. -- Class
A*...................................... 1,070 43,870
Automatic Data Processing, Inc. ........... 5,620 196,419
Cognizant Technology Solutions
Corp. -- Class A*....................... 3,220 61,824
Computer Sciences Corp.*................... 1,670 50,367
Convergys Corp.*........................... 1,350 10,382
Fidelity National Information Services,
Inc. ................................... 2,100 31,689
Fiserv, Inc.*.............................. 1,810 60,382
Mastercard, Inc. -- Class A................ 800 118,256
Paychex, Inc. ............................. 3,540 101,032
Total System Services, Inc. ............... 2,180 29,953
Unisys Corp.*.............................. 3,970 6,034
Western Union Co. ......................... 8,050 122,843
----------
TOTAL IT SERVICES 833,051
----------
LEISURE EQUIPMENT & PRODUCTS 0.1%
Eastman Kodak Co. ......................... 3,180 29,192
Hasbro, Inc. .............................. 1,390 40,407
Mattel, Inc. .............................. 3,980 59,780
----------
TOTAL LEISURE EQUIPMENT & PRODUCTS 129,379
----------
LIFE SCIENCES TOOLS & SERVICES 0.3%
Applied Biosystems Inc. ................... 1,870 57,652
Millipore Corp.*........................... 610 31,653
PerkinElmer, Inc. ......................... 1,320 23,681
Thermo Fisher Scientific Inc.*............. 4,630 187,978
Waters Corp.*.............................. 1,090 47,742
----------
TOTAL LIFE SCIENCES TOOLS & SERVICES 348,706
----------
</Table>
See Notes to Financial Statements.
ANNUAL REPORT 31
RYDEX 2X S&P 500 ETF
SCHEDULE OF INVESTMENTS (continued) October 31, 2008
- --------------------------------------------------------------------------------
<Table>
<Caption>
MARKET
SHARES VALUE
- -------------------------------------------------------------------
COMMON STOCKS (CONTINUED)
MACHINERY 1.2%
Caterpillar, Inc. ......................... 6,720 $256,502
Cummins, Inc. ............................. 2,240 57,904
Danaher Corp. ............................. 2,820 167,057
Deere & Co. ............................... 4,720 182,003
Dover Corp. ............................... 2,070 65,764
Eaton Corp. ............................... 1,840 82,064
Flowserve Corp. ........................... 630 35,860
Illinois Tool Works, Inc. ................. 4,420 147,584
Ingersoll-Rand Co., Ltd. -- Class A........ 3,520 64,944
ITT Corp. ................................. 2,010 89,445
Manitowoc Co., Inc. ....................... 1,440 14,170
PACCAR, Inc. .............................. 4,010 117,252
Pall Corp. ................................ 1,320 34,861
Parker-Hannifin Corp. ..................... 1,850 71,725
Terex Corp.*............................... 1,070 17,858
----------
TOTAL MACHINERY 1,404,993
----------
MEDIA 2.1%
CBS Corp. -- Class B....................... 7,510 72,922
Comcast Corp. -- Class A................... 32,230 507,945
DIRECTV Group, Inc.(The)*.................. 6,370 139,439
Gannett Co., Inc. ......................... 2,520 27,720
Interpublic Group of Cos., Inc.*........... 5,260 27,299
McGraw-Hill Cos., Inc. .................... 3,510 94,209
Meredith Corp. ............................ 400 7,748
New York Times Co. -- Class A.............. 1,290 12,900
News Corp. -- Class A...................... 25,350 269,724
Omnicom Group, Inc. ....................... 3,520 103,981
Scripps Networks Interactive -- Class A.... 990 28,116
Time Warner, Inc. ......................... 39,570 399,261
Viacom, Inc. -- Class B*................... 6,860 138,709
Walt Disney Co.(The)....................... 20,720 536,648
Washington Post Co. -- Class B............. 70 29,876
----------
TOTAL MEDIA 2,396,497
----------
METALS & MINING 0.5%
AK Steel Holding Corp. .................... 1,240 17,261
Alcoa, Inc. ............................... 8,980 103,360
Allegheny Technologies, Inc. .............. 1,110 29,459
Freeport-McMoRan Copper & Gold, Inc. ...... 4,240 123,384
Newmont Mining Corp. ...................... 5,040 132,754
Nucor Corp. ............................... 3,500 141,785
Titanium Metals Corp. ..................... 940 8,751
United States Steel Corp. ................. 1,300 47,944
----------
TOTAL METALS & MINING 604,698
----------
MULTI-UTILITIES 1.1%
Ameren Corp. .............................. 2,320 75,284
CenterPoint Energy, Inc. .................. 3,770 43,430
CMS Energy Corp. .......................... 2,490 25,523
Consolidated Edison, Inc. ................. 3,020 130,826
Dominion Resources, Inc. .................. 6,400 232,192
DTE Energy Co. ............................ 1,800 63,540
Integrys Energy Group, Inc. ............... 840 40,043
NiSource, Inc. ............................ 3,030 39,269
PG&E Corp. ................................ 3,960 145,213
Public Service Enterprise Group, Inc. ..... 5,620 158,203
Sempra Energy.............................. 2,720 115,845
TECO Energy, Inc. ......................... 2,350 27,119
Wisconsin Energy Corp. .................... 1,290 56,115
Xcel Energy, Inc. ......................... 4,930 85,881
----------
TOTAL MULTI-UTILITIES 1,238,483
----------
MULTILINE RETAIL 0.6%
Big Lots, Inc.*............................ 910 22,231
Family Dollar Stores, Inc. ................ 1,540 41,441
J.C. Penney Co., Inc. ..................... 2,450 58,604
Kohl's Corp.*.............................. 3,360 118,037
Macy's, Inc. .............................. 4,640 57,026
Nordstrom, Inc. ........................... 1,760 31,838
Sears Holdings Corp.*...................... 630 36,376
Target Corp. .............................. 8,330 334,200
----------
TOTAL MULTILINE RETAIL 699,753
----------
OFFICE ELECTRONICS 0.1%
Xerox Corp. ............................... 9,630 77,233
----------
TOTAL OFFICE ELECTRONICS 77,233
----------
OIL, GAS & CONSUMABLE FUELS 9.1%
Anadarko Petroleum Corp. .................. 5,170 182,501
Apache Corp. .............................. 3,690 303,798
Cabot Oil & Gas Corp. ..................... 1,140 32,000
Chesapeake Energy Corp. ................... 5,760 126,547
Chevron Corp. ............................. 22,690 1,692,674
ConocoPhillips............................. 16,780 872,896
CONSOL Energy, Inc. ....................... 2,020 63,408
Devon Energy Corp. ........................ 4,880 394,597
El Paso Corp. ............................. 7,740 75,078
EOG Resources, Inc. ....................... 2,750 222,530
Exxon Mobil Corp. ......................... 57,360 4,251,523
Hess Corp. ................................ 3,130 188,457
Marathon Oil Corp. ........................ 7,790 226,689
Massey Energy Co. ......................... 930 21,474
Murphy Oil Corp. .......................... 2,100 106,344
Noble Energy, Inc. ........................ 1,910 98,976
Occidental Petroleum Corp. ................ 9,020 500,971
Peabody Energy Corp. ...................... 3,000 103,530
Pioneer Natural Resources Co. ............. 1,320 36,736
Range Resources Corp. ..................... 1,710 72,196
Southwestern Energy Co.*................... 3,790 135,000
Spectra Energy Corp. ...................... 6,790 131,251
Sunoco, Inc. .............................. 1,290 39,345
Tesoro Corp. .............................. 1,520 14,698
Valero Energy Corp. ....................... 5,780 118,952
Williams Cos., Inc. ....................... 6,360 133,369
XTO Energy, Inc. .......................... 6,070 218,216
----------
TOTAL OIL, GAS & CONSUMABLE FUELS 10,363,756
----------
</Table>
See Notes to Financial Statements.
ANNUAL REPORT 32
RYDEX 2X S&P 500 ETF
SCHEDULE OF INVESTMENTS (continued) October 31, 2008
- --------------------------------------------------------------------------------
<Table>
<Caption>
MARKET
SHARES VALUE
- -------------------------------------------------------------------
COMMON STOCKS (CONTINUED)
PAPER & FOREST PRODUCTS 0.2%
International Paper Co. ................... 4,720 $81,278
MeadWestvaco Corp. ........................ 1,890 26,517
Weyerhaeuser Co. .......................... 2,330 89,053
----------
TOTAL PAPER & FOREST PRODUCTS 196,848
----------
PERSONAL PRODUCTS 0.2%
Avon Products, Inc. ....................... 4,700 116,701
Estee Lauder Cos., Inc -- Class A.......... 1,270 45,771
----------
TOTAL PERSONAL PRODUCTS 162,472
----------
PHARMACEUTICALS 6.0%
Abbott Laboratories........................ 17,020 938,653
Allergan, Inc. ............................ 3,400 134,878
Barr Pharmaceuticals, Inc.*................ 1,200 77,112
Bristol-Myers Squibb Co. .................. 21,860 449,223
Eli Lilly & Co. ........................... 11,050 373,711
Forest Laboratories, Inc.*................. 3,370 78,285
Johnson & Johnson.......................... 30,860 1,892,952
King Pharmaceuticals, Inc.*................ 2,720 23,909
Merck & Co., Inc. ......................... 23,660 732,277
Mylan Inc.*................................ 3,360 28,795
Pfizer, Inc. .............................. 74,440 1,318,332
Schering-Plough Corp. ..................... 17,950 260,096
Watson Pharmaceuticals, Inc.*.............. 1,150 30,096
Wyeth...................................... 14,730 474,011
----------
TOTAL PHARMACEUTICALS 6,812,330
----------
REAL ESTATE INVESTMENT TRUSTS (REITS) 0.9%
Apartment Investment & Management
Co. -- Class A.......................... 950 13,899
AvalonBay Communities, Inc. ............... 850 60,367
Boston Properties, Inc. ................... 1,320 93,562
Developers Diversified Realty Corp. ....... 1,330 17,516
Equity Residential......................... 2,990 104,441
General Growth Properties, Inc. ........... 2,510 10,391
HCP, Inc. ................................. 2,780 83,205
Host Hotels & Resorts, Inc. ............... 5,740 59,352
Kimco Realty Corp. ........................ 2,510 56,676
Plum Creek Timber Co., Inc. ............... 1,890 70,459
ProLogis................................... 2,900 40,600
Public Storage, Inc. ...................... 1,380 112,470
Simon Property Group, Inc. ................ 2,490 166,905
Vornado Realty Trust....................... 1,510 106,530
----------
TOTAL REAL ESTATE INVESTMENT TRUSTS (REITS) 996,373
----------
REAL ESTATE MANAGEMENT & DEVELOPMENT
0.0%(A)
CB Richard Ellis Group, Inc. -- Class A*... 1,900 13,319
----------
TOTAL REAL ESTATE MANAGEMENT & DEVELOPMENT 13,319
----------
ROAD & RAIL 1.0%
Burlington Northern Santa Fe Corp. ........ 3,120 277,867
CSX Corp. ................................. 4,500 205,740
Norfolk Southern Corp. .................... 4,140 248,152
Ryder System, Inc. ........................ 620 24,564
Union Pacific Corp. ....................... 5,620 375,248
----------
TOTAL ROAD & RAIL 1,131,571
----------
SEMICONDUCTORS & SEMICONDUCTOR EQUIPMENT 1.9%
Advanced Micro Devices, Inc.*.............. 6,710 23,485
Altera Corp. .............................. 3,320 57,602
Analog Devices, Inc. ...................... 3,210 68,566
Applied Materials, Inc. ................... 14,820 191,326
Broadcom Corp. -- Class A*................. 4,870 83,180
Intel Corp. ............................... 62,080 993,280
KLA-Tencor Corp. .......................... 1,910 44,407
Linear Technology Corp. ................... 2,450 55,566
LSI Corp.*................................. 7,110 27,374
MEMC Electronic Materials, Inc.*........... 2,490 45,766
Microchip Technology, Inc. ................ 2,030 49,999
Micron Technology, Inc.*................... 8,400 39,564
National Semiconductor Corp. .............. 2,150 28,315
Novellus Systems, Inc.*.................... 1,090 17,222
NVIDIA Corp.*.............................. 6,150 53,874
Teradyne, Inc.*............................ 1,860 9,486
Texas Instruments, Inc. ................... 14,480 283,229
Xilinx, Inc. .............................. 3,050 56,181
----------
TOTAL SEMICONDUCTORS & SEMICONDUCTOR EQUIPMENT 2,128,422
----------
SOFTWARE 3.1%
Adobe Systems, Inc.*....................... 5,860 156,110
Autodesk, Inc.*............................ 2,480 52,849
BMC Software, Inc.*........................ 2,100 54,222
CA, Inc. .................................. 4,350 77,430
Citrix Systems, Inc.*...................... 2,010 51,798
Compuware Corp.*........................... 2,810 17,928
Electronic Arts, Inc.*..................... 3,520 80,186
Intuit, Inc.*.............................. 3,540 88,712
Microsoft Corp. ........................... 86,710 1,936,234
Novell, Inc.*.............................. 3,810 17,755
Oracle Corp.*.............................. 43,270 791,408
Salesforce.com, Inc.*...................... 1,150 35,604
Symantec Corp.*............................ 9,270 116,616
----------
TOTAL SOFTWARE 3,476,852
----------
SPECIALTY RETAIL 1.4%
Abercrombie & Fitch Co. -- Class A......... 960 27,802
AutoNation, Inc.*.......................... 1,190 8,175
AutoZone, Inc.*............................ 460 58,553
Bed Bath & Beyond, Inc.*................... 2,880 74,218
Best Buy Co., Inc. ........................ 3,730 100,001
GameStop Corp. -- Class A*................. 1,800 49,302
Gap, Inc.(The)............................. 5,190 67,159
Home Depot, Inc. .......................... 18,760 442,548
Limited Brands, Inc. ...................... 3,150 37,737
Lowe's Cos., Inc. ......................... 16,190 351,323
Office Depot, Inc.*........................ 3,040 10,944
RadioShack Corp. .......................... 1,450 18,357
Sherwin-Williams Co.(The).................. 1,090 62,032
Staples, Inc. ............................. 7,850 152,525
</Table>
See Notes to Financial Statements.
ANNUAL REPORT 33
RYDEX 2X S&P 500 ETF
SCHEDULE OF INVESTMENTS (concluded) October 31, 2008
- --------------------------------------------------------------------------------
<Table>
<Caption>
MARKET
SHARES VALUE
- -------------------------------------------------------------------
COMMON STOCKS (CONCLUDED)
Tiffany & Co. ............................. 1,370 $37,607
TJX Cos., Inc. ............................ 4,630 123,899
----------
TOTAL SPECIALTY RETAIL 1,622,182
----------
TEXTILES, APPAREL & LUXURY GOODS 0.4%
Coach, Inc.*............................... 3,720 76,632
Jones Apparel Group, Inc. ................. 920 10,221
Liz Claiborne, Inc. ....................... 1,050 8,558
NIKE, Inc. -- Class B...................... 4,330 249,538
Polo Ralph Lauren Corp. ................... 630 29,717
V.F. Corp. ................................ 960 52,896
----------
TOTAL TEXTILES, APPAREL & LUXURY GOODS 427,562
----------
THRIFTS & MORTGAGE FINANCE 0.1%
Hudson City Bancorp, Inc. ................. 5,740 107,969
Sovereign Bancorp, Inc. ................... 6,000 17,400
----------
TOTAL THRIFTS & MORTGAGE FINANCE 125,369
----------
TOBACCO 1.6%
Altria Group, Inc. ........................ 22,750 436,572
Lorillard, Inc. ........................... 1,920 126,451
Philip Morris International, Inc. ......... 22,760 989,377
Reynolds American, Inc. ................... 1,880 92,045
UST, Inc. ................................. 1,630 110,172
----------
TOTAL TOBACCO 1,754,617
----------
TRADING COMPANIES & DISTRIBUTORS 0.1%
Fastenal Co. .............................. 1,430 57,572
W.W. Grainger, Inc. ....................... 720 56,570
----------
TOTAL TRADING COMPANIES & DISTRIBUTORS 114,142
----------
WIRELESS TELECOMMUNICATION SERVICES 0.2%
American Tower Corp. -- Class A*........... 4,350 140,548
Sprint Nextel Corp. ....................... 31,520 98,658
----------
TOTAL WIRELESS TELECOMMUNICATION SERVICES 239,206
----------
TOTAL COMMON STOCKS
(Cost $107,814,291)................................. 93,707,346
----------
</Table>
<Table>
<Caption>
FACE MARKET
AMOUNT VALUE
- --------------------------------------------------------------------------
REPURCHASE AGREEMENTS 11.2%
State Street Bank & Trust Co., 0.030%,
dated 10/31/08, to be repurchased at
$12,688,032 on 11/03/08 collateralized by
$13,975,000 FNMA at 5.500% due 07/14/28
with a value of $12,944,344................ $12,688,000 $12,688,000
------------
TOTAL REPURCHASE AGREEMENTS
(Cost $12,688,000) 12,688,000
------------
TOTAL INVESTMENTS 93.9%
(Cost $120,502,291) 106,395,346
------------
OTHER ASSETS IN EXCESS OF LIABILITIES--6.1% 6,968,547
------------
NET ASSETS--100.0% $113,363,893
- --------------------------------------------------------------------------
</Table>
<Table>
<Caption>
UNREALIZED
CONTRACTS LOSS
- ----------------------------------------------------------------------
FUTURES CONTRACTS PURCHASED
December 2008 S&P 500 Index E-Mini Futures
Contracts (Aggregate Market Value of
Contracts $131,633,700).................... 2,712 $(2,745,632)
- ----------------------------------------------------------------------
</Table>
* Non-Income Producing Security.
(a) Amount represents less than 0.05% of net assets.
FNMA--Federal National Mortgage Association
See Notes to Financial Statements.
ANNUAL REPORT 34
RYDEX INVERSE 2X S&P 500 ETF
SCHEDULE OF INVESTMENTS October 31, 2008
- --------------------------------------------------------------------------------
<Table>
<Caption>
FACE MARKET
AMOUNT VALUE
- ------------------------------------------------------------------------------
REPURCHASE AGREEMENTS 66.9%
State Street Bank & Trust Co., 0.030%, dated
10/31/08, to be repurchased at $44,251,111 on
11/03/08 collateralized by $48,535,000 FNMA
at 5.550% due 07/10/28 with a value of
$45,137,550.................................. $44,251,000 $44,251,000
-----------
TOTAL REPURCHASE AGREEMENTS
(Cost $44,251,000) 44,251,000
-----------
TOTAL INVESTMENTS 66.9%
(Cost $44,251,000) 44,251,000
-----------
OTHER ASSETS IN EXCESS OF LIABILITIES--33.1% 21,854,557
-----------
NET ASSETS --100.0% $66,105,557
- ------------------------------------------------------------------------------
</Table>
<Table>
<Caption>
UNREALIZED
CONTRACTS LOSS
- ---------------------------------------------------------------------------
FUTURES CONTRACTS SOLD SHORT
December 2008 S&P 500 Index E-Mini Futures
Contracts (Aggregate Market Value of Contracts
$133,720,813)................................... 2,755 $(10,472,763)
- ---------------------------------------------------------------------------
</Table>
FNMA--Federal National Mortgage Association
See Notes to Financial Statements.
ANNUAL REPORT 35
RYDEX 2X S&P MIDCAP 400 ETF
SCHEDULE OF INVESTMENTS October 31, 2008
- --------------------------------------------------------------------------------
<Table>
<Caption>
MARKET
SHARES VALUE
- ---------------------------------------------------------------------
COMMON STOCKS 80.7%
AEROSPACE & DEFENSE 0.4%
Alliant Techsystems, Inc.*................. 200 $16,508
BE Aerospace, Inc.*........................ 610 7,851
----------
TOTAL AEROSPACE & DEFENSE 24,359
----------
AIRLINES 0.3%
Airtran Holdings, Inc.*.................... 720 2,945
Alaska Air Group, Inc.*.................... 220 5,434
JetBlue Airways Corp.*..................... 1,120 6,216
----------
TOTAL AIRLINES 14,595
----------
AUTO COMPONENTS 0.5%
ArvinMeritor, Inc. ........................ 450 2,664
BorgWarner, Inc. .......................... 710 15,954
Gentex Corp. .............................. 870 8,343
Lear Corp.*................................ 470 945
Modine Manufacturing Co. .................. 200 1,480
----------
TOTAL AUTO COMPONENTS 29,386
----------
AUTOMOBILES 0.1%
Thor Industries, Inc. ..................... 220 3,938
----------
TOTAL AUTOMOBILES 3,938
----------
BEVERAGES 0.3%
Hansen Natural Corp.*...................... 450 11,394
PepsiAmericas, Inc. ....................... 350 6,625
----------
TOTAL BEVERAGES 18,019
----------
BIOTECHNOLOGY 1.3%
Cephalon, Inc.*............................ 420 30,122
PDL BioPharma, Inc. ....................... 730 7,118
United Therapeutics Corp.*................. 140 12,212
Vertex Pharmaceuticals, Inc.*.............. 910 23,851
----------
TOTAL BIOTECHNOLOGY 73,303
----------
CAPITAL MARKETS 1.6%
Affiliated Managers Group, Inc.*........... 250 11,595
Apollo Investment Corp. ................... 870 11,468
Eaton Vance Corp. ......................... 710 15,620
Jefferies Group, Inc. ..................... 740 11,714
Raymond James Financial, Inc. ............. 590 13,741
SEI Investments Co. ....................... 820 14,498
Waddell & Reed Financial, Inc. -- Class A.. 520 7,550
----------
TOTAL CAPITAL MARKETS 86,186
----------
CHEMICALS 2.9%
Airgas, Inc. .............................. 510 19,564
Albemarle Corp. ........................... 560 13,636
Cabot Corp. ............................... 390 10,316
Chemtura Corp. ............................ 1,480 2,560
Cytec Industries, Inc. .................... 290 8,213
Ferro Corp. ............................... 270 4,180
FMC Corp. ................................. 460 20,028
Lubrizol Corp. ............................ 410 15,408
Minerals Technologies, Inc. ............... 120 6,811
Olin Corp. ................................ 460 8,354
RPM International, Inc. ................... 800 11,360
Scotts Miracle-Gro Co.(The) {d208} Class
A....................................... 270 7,052
Sensient Technologies Corp. ............... 300 7,569
Terra Industries, Inc. .................... 560 12,314
Valspar Corp. ............................. 610 12,474
----------
TOTAL CHEMICALS 159,839
----------
COMMERCIAL BANKS 3.5%
Associated Banc-Corp. ..................... 780 17,207
Bancorpsouth, Inc. ........................ 440 10,679
Bank of Hawaii Corp. ...................... 290 14,706
Cathay General Bancorp..................... 300 7,344
City National Corp. ....................... 250 13,382
Colonial BancGroup, Inc. .................. 1,240 5,034
Commerce Bancshares Inc/Kansas City MO..... 380 17,966
Cullen/Frost Bankers, Inc. ................ 360 20,149
FirstMerit Corp. .......................... 500 11,660
PacWest Bancorp............................ 150 3,749
SVB Financial Group*....................... 200 10,290
Synovus Financial Corp. ................... 1,720 17,768
TCF Financial Corp. ....................... 710 12,595
Webster Financial Corp. ................... 320 5,933
Westamerica Bancorp........................ 180 10,305
Wilmington Trust Corp. .................... 410 11,833
----------
TOTAL COMMERCIAL BANKS 190,600
----------
COMMERCIAL SERVICES & SUPPLIES 3.4%
Brink's Co.(The)........................... 260 12,607
Clean Harbors, Inc.*....................... 120 7,868
Copart, Inc.*.............................. 400 13,960
Corporate Executive Board Co.(The)......... 210 6,264
Corrections Corp. of America*.............. 770 14,715
Deluxe Corp. .............................. 320 3,891
Dun & Bradstreet Corp. .................... 330 24,318
Herman Miller, Inc. ....................... 340 7,480
HNI Corp. ................................. 270 4,946
Kelly Services, Inc. -- Class A............ 170 2,421
Korn/Ferry International*.................. 290 4,028
Manpower, Inc. ............................ 490 15,254
Mine Safety Appliances Co. ................ 180 4,860
MPS Group, Inc.*........................... 570 4,440
Navigant Consulting, Inc.*................. 280 4,528
Republic Services, Inc. ................... 950 22,515
Rollins, Inc. ............................. 250 4,393
Stericycle, Inc.*.......................... 520 30,384
----------
TOTAL COMMERCIAL SERVICES & SUPPLIES 188,872
----------
COMMUNICATIONS EQUIPMENT 1.2%
3Com Corp.*................................ 2,480 6,771
ADC Telecommunications, Inc.*.............. 720 4,565
Adtran, Inc. .............................. 340 5,168
Avocent Corp.*............................. 270 4,055
CommScope, Inc.*........................... 430 6,325
F5 Networks, Inc.*......................... 490 12,162
Foundry Networks, Inc.*.................... 900 13,365
Plantronics, Inc. ......................... 300 4,332
Polycom, Inc.*............................. 520 10,925
----------
TOTAL COMMUNICATIONS EQUIPMENT 67,668
----------
COMPUTERS & PERIPHERALS 1.1%
Diebold, Inc. ............................. 400 11,888
Imation Corp. ............................. 180 2,218
NCR Corp.*................................. 1,000 18,280
</Table>
See Notes to Financial Statements.
ANNUAL REPORT 36
RYDEX 2x S&P MIDCAP 400 ETF
SCHEDULE OF INVESTMENTS (continued) October 31, 2008
- --------------------------------------------------------------------------------
<Table>
<Caption>
MARKET
SHARES VALUE
- ---------------------------------------------------------------------
COMMON STOCKS (CONTINUED)
Palm, Inc.*................................ 670 $2,673
Western Digital Corp.*..................... 1,360 22,440
----------
TOTAL COMPUTERS & PERIPHERALS 57,499
----------
CONSTRUCTION & ENGINEERING 1.3%
Dycom Industries, Inc.*.................... 240 2,131
Granite Construction, Inc. ................ 200 7,134
KBR, Inc. ................................. 1,040 15,434
Quanta Services, Inc.*..................... 1,070 21,143
Shaw Group, Inc.(The)*..................... 510 9,124
URS Corp.*................................. 520 15,283
----------
TOTAL CONSTRUCTION & ENGINEERING 70,249
----------
CONSTRUCTION MATERIALS 0.4%
Martin Marietta Materials, Inc. ........... 250 19,595
----------
TOTAL CONSTRUCTION MATERIALS 19,595
----------
CONSUMER FINANCE 0.1%
AmeriCredit Corp.*......................... 710 4,161
----------
TOTAL CONSUMER FINANCE 4,161
----------
CONTAINERS & PACKAGING 0.9%
AptarGroup, Inc. .......................... 420 12,734
Greif, Inc. {d208} Class A................. 210 8,522
Packaging Corp. of America................. 630 10,603
Sonoco Products Co. ....................... 610 15,360
Temple-Inland, Inc. ....................... 650 3,854
----------
TOTAL CONTAINERS & PACKAGING 51,073
----------
DIVERSIFIED CONSUMER SERVICES 1.8%
Career Education Corp.*.................... 450 7,115
Corinthian Colleges, Inc.*................. 520 7,426
DeVry, Inc. ............................... 380 21,542
ITT Educational Services, Inc.*............ 190 16,653
Matthews International Corp. -- Class A.... 190 8,480
Regis Corp. ............................... 260 3,216
Service Corp. International................ 1,570 10,833
Sotheby's.................................. 410 3,817
Strayer Education, Inc. ................... 90 20,364
----------
TOTAL DIVERSIFIED CONSUMER SERVICES 99,446
----------
DIVERSIFIED TELECOMMUNICATION SERVICES 0.1%
Cincinnati Bell, Inc.*..................... 1,440 3,442
----------
TOTAL DIVERSIFIED TELECOMMUNICATION SERVICES 3,442
----------
ELECTRIC UTILITIES 1.8%
DPL, Inc. ................................. 700 15,967
Great Plains Energy, Inc. ................. 730 14,191
Hawaiian Electric Industries, Inc. ........ 520 13,842
IDACORP, Inc. ............................. 280 7,465
Northeast Utilities........................ 950 21,432
Sierra Pacific Resources................... 1,430 11,855
Westar Energy, Inc. ....................... 660 12,863
----------
TOTAL ELECTRIC UTILITIES 97,615
----------
ELECTRICAL EQUIPMENT 1.2%
AMETEK, Inc. .............................. 650 21,612
Hubbell, Inc. -- Class B................... 340 12,196
Roper Industries, Inc. .................... 550 24,942
Thomas & Betts Corp.*...................... 350 8,313
----------
TOTAL ELECTRICAL EQUIPMENT 67,063
----------
ELECTRONIC EQUIPMENT & INSTRUMENTS 1.9%
Arrow Electronics, Inc.*................... 730 12,738
Avnet, Inc.*............................... 920 15,401
FLIR Systems, Inc.*........................ 850 27,285
Ingram Micro, Inc. -- Class A*............. 1,020 13,597
National Instruments Corp. ................ 350 8,890
Tech Data Corp.*........................... 310 6,650
Trimble Navigation, Ltd.*.................. 740 15,222
Vishay Intertechnology, Inc.*.............. 1,140 4,913
----------
TOTAL ELECTRONIC EQUIPMENT & INSTRUMENTS 104,696
----------
ENERGY EQUIPMENT & SERVICES 2.6%
Exterran Holdings, Inc.*................... 400 8,964
FMC Technologies, Inc.*.................... 780 27,292
Helix Energy Solutions Group, Inc.*........ 560 5,914
Helmerich & Payne, Inc. ................... 640 21,958
Oceaneering International, Inc.*........... 340 9,578
Patterson-UTI Energy, Inc. ................ 960 12,739
Pride International, Inc.*................. 1,060 19,917
Superior Energy Services, Inc.*............ 490 10,447
Tidewater, Inc. ........................... 320 13,955
Unit Corp.*................................ 290 10,887
----------
TOTAL ENERGY EQUIPMENT & SERVICES 141,651
----------
FOOD & STAPLES RETAILING 0.4%
BJ's Wholesale Club, Inc.*................. 360 12,672
Ruddick Corp. ............................. 240 6,874
----------
TOTAL FOOD & STAPLES RETAILING 19,546
----------
FOOD PRODUCTS 1.4%
Corn Products International, Inc. ......... 460 11,187
Hormel Foods Corp. ........................ 430 12,152
J.M. Smucker Co.(The)...................... 340 15,151
Lancaster Colony Corp. .................... 120 3,785
Ralcorp Holdings, Inc.*.................... 340 23,011
Smithfield Foods, Inc.*.................... 720 7,574
Tootsie Roll Industries, Inc. ............. 160 3,979
----------
TOTAL FOOD PRODUCTS 76,839
----------
GAS UTILITIES 2.2%
AGL Resources, Inc. ....................... 470 14,288
Energen Corp. ............................. 440 14,771
Equitable Resources, Inc. ................. 800 27,768
National Fuel Gas Co. ..................... 500 18,095
Oneok, Inc. ............................... 640 20,416
UGI Corp. ................................. 660 15,754
WGL Holdings, Inc. ........................ 310 9,979
----------
TOTAL GAS UTILITIES 121,071
----------
HEALTH CARE EQUIPMENT & SUPPLIES 3.1%
Advanced Medical Optics, Inc.*............. 320 1,974
Beckman Coulter, Inc. ..................... 380 18,969
Dentsply International, Inc. .............. 910 27,646
Edwards Lifesciences Corp.*................ 340 17,966
Gen-Probe, Inc.*........................... 330 15,530
Hill-Rom Holdings, Inc. ................... 380 8,649
Hologic, Inc.*............................. 1,570 19,217
Idexx Laboratories, Inc.*.................. 360 12,668
</Table>
See Notes to Financial Statements.
ANNUAL REPORT 37
RYDEX 2x S&P MIDCAP 400 ETF
SCHEDULE OF INVESTMENTS (continued) October 31, 2008
- --------------------------------------------------------------------------------
<Table>
<Caption>
MARKET
SHARES VALUE
- ---------------------------------------------------------------------
COMMON STOCKS (CONTINUED)
Kinetic Concepts, Inc.*.................... 350 $8,473
ResMed, Inc.*.............................. 460 15,760
STERIS Corp. .............................. 360 12,254
Teleflex, Inc. ............................ 240 12,718
----------
TOTAL HEALTH CARE EQUIPMENT & SUPPLIES 171,824
----------
HEALTH CARE PROVIDERS & SERVICES 2.4%
Community Health Systems, Inc.*............ 590 12,095
Health Management Associates, Inc. -- Class
A*...................................... 1,500 3,150
Health Net, Inc.*.......................... 660 8,501
Henry Schein, Inc.*........................ 550 25,745
Kindred Healthcare, Inc.*.................. 180 2,608
LifePoint Hospitals, Inc.*................. 330 7,910
Lincare Holdings, Inc.*.................... 450 11,858
Omnicare, Inc. ............................ 640 17,645
Psychiatric Solutions, Inc.*............... 340 11,319
Universal Health Services, Inc. -- Class
B....................................... 310 13,032
VCA Antech, Inc.*.......................... 520 9,412
WellCare Health Plans, Inc.*............... 260 6,284
----------
TOTAL HEALTH CARE PROVIDERS & SERVICES 129,559
----------
HEALTH CARE TECHNOLOGY 0.3%
Cerner Corp.*.............................. 420 15,637
----------
TOTAL HEALTH CARE TECHNOLOGY 15,637
----------
HOTELS, RESTAURANTS & LEISURE 1.0%
Bob Evans Farms, Inc. ..................... 190 3,967
Boyd Gaming Corp. ......................... 350 2,380
Brinker International, Inc. ............... 620 5,766
Cheesecake Factory, Inc.(The)*............. 400 3,520
Chipotle Mexican Grill, Inc. -- Class A*... 200 10,150
International Speedway Corp. -- Class A.... 170 5,336
Life Time Fitness, Inc.*................... 210 3,999
Scientific Games Corp. -- Class A*......... 400 7,200
Wendy's/Arby's Group, Inc. -- Class A*..... 2,860 10,353
----------
TOTAL HOTELS, RESTAURANTS & LEISURE 52,671
----------
HOUSEHOLD DURABLES 1.4%
American Greetings Corp. -- Class A........ 280 3,270
Blyth, Inc. ............................... 150 1,290
Furniture Brands International, Inc. ...... 250 1,423
Hovnanian Enterprises, Inc. -- Class A*.... 310 1,330
MDC Holdings, Inc. ........................ 220 7,399
Mohawk Industries, Inc.*................... 340 16,449
NVR, Inc.*................................. 30 14,706
Ryland Group, Inc. ........................ 260 4,885
Toll Brothers, Inc.*....................... 800 18,496
Tupperware Brands Corp. ................... 380 9,614
----------
TOTAL HOUSEHOLD DURABLES 78,862
----------
HOUSEHOLD PRODUCTS 0.8%
Church & Dwight Co., Inc. ................. 410 24,227
Energizer Holdings, Inc.*.................. 360 17,589
----------
TOTAL HOUSEHOLD PRODUCTS 41,816
----------
INDEPENDENT POWER PRODUCERS & ENERGY TRADERS 0.1%
Black Hills Corp. ......................... 240 6,060
----------
TOTAL INDEPENDENT POWER PRODUCERS & ENERGY TRADERS 6,060
----------
INDUSTRIAL CONGLOMERATES 0.2%
Carlisle Cos., Inc. ....................... 370 8,603
----------
TOTAL INDUSTRIAL CONGLOMERATES 8,603
----------
INSURANCE 4.1%
American Financial Group, Inc. ............ 460 10,456
Arthur J. Gallagher & Co. ................. 570 13,885
Brown & Brown, Inc. ....................... 710 14,569
Everest Re Group, Ltd. .................... 380 28,386
Fidelity National Financial, Inc. -- Class
A....................................... 1,290 11,623
First American Corp. ...................... 570 11,634
Hanover Insurance Group, Inc. ............. 310 12,168
HCC Insurance Holdings, Inc. .............. 700 15,442
Horace Mann Educators Corp. ............... 240 1,910
Mercury General Corp. ..................... 220 11,301
Old Republic International Corp. .......... 1,410 12,986
Philadelphia Consolidated Holding Co.*..... 350 20,471
Protective Life Corp. ..................... 430 3,591
Reinsurance Group of America, Inc. -- Class
A....................................... 440 16,430
StanCorp Financial Group, Inc. ............ 300 10,224
Unitrin, Inc. ............................. 300 6,300
W.R. Berkley Corp. ........................ 860 22,592
----------
TOTAL INSURANCE 223,968
----------
INTERNET & CATALOG RETAIL 0.3%
NetFlix, Inc.*............................. 260 6,438
Priceline.com, Inc.*....................... 240 12,631
----------
TOTAL INTERNET & CATALOG RETAIL 19,069
----------
INTERNET SOFTWARE & SERVICES 0.2%
Digital River, Inc.*....................... 230 5,699
ValueClick, Inc.*.......................... 530 3,922
----------
TOTAL INTERNET SOFTWARE & SERVICES 9,621
----------
IT SERVICES 2.3%
Acxiom Corp. .............................. 410 3,223
Alliance Data Systems Corp.*............... 410 20,565
Broadridge Financial Solutions, Inc. ...... 860 10,406
DST Systems, Inc.*......................... 260 10,551
Gartner, Inc.*............................. 360 6,624
Global Payments, Inc. ..................... 490 19,850
Lender Processing Services, Inc. .......... 510 11,766
Metavante Technologies, Inc.*.............. 550 9,223
NeuStar, Inc. -- Class A*.................. 480 9,456
SAIC, Inc.*................................ 1,180 21,794
SRA International, Inc. -- Class A*........ 260 4,805
----------
TOTAL IT SERVICES 128,263
----------
LEISURE EQUIPMENT & PRODUCTS 0.1%
Callaway Golf Co. ......................... 400 4,184
----------
TOTAL LEISURE EQUIPMENT & PRODUCTS 4,184
----------
LIFE SCIENCES TOOLS & SERVICES 1.8%
Affymetrix, Inc.*.......................... 430 1,587
Charles River Laboratories International,
Inc.*................................... 420 15,049
Covance, Inc.*............................. 390 19,500
Invitrogen Corp.*.......................... 570 16,410
Pharmaceutical Product Development, Inc. .. 730 22,615
Techne Corp. .............................. 240 16,565
Varian, Inc.*.............................. 180 6,633
----------
TOTAL LIFE SCIENCES TOOLS & SERVICES 98,359
----------
</Table>
See Notes to Financial Statements.
ANNUAL REPORT 38
RYDEX 2x S&P MIDCAP 400 ETF
SCHEDULE OF INVESTMENTS (continued) October 31, 2008
- --------------------------------------------------------------------------------
<Table>
<Caption>
MARKET
SHARES VALUE
- ---------------------------------------------------------------------
COMMON STOCKS (CONTINUED)
MACHINERY 3.4%
AGCO Corp.*................................ 560 $17,651
Crane Co. ................................. 300 4,911
Donaldson Co., Inc. ....................... 480 16,872
Federal Signal Corp. ...................... 290 2,468
Graco, Inc. ............................... 370 9,150
Harsco Corp. .............................. 520 12,308
IDEX Corp. ................................ 510 11,822
Joy Global, Inc. .......................... 660 19,127
Kennametal, Inc. .......................... 470 9,973
Lincoln Electric Holdings, Inc. ........... 260 11,219
Nordson Corp. ............................. 210 7,755
Oshkosh Corp. ............................. 460 3,524
Pentair, Inc. ............................. 610 16,861
SPX Corp. ................................. 330 12,784
Timken Co. ................................ 520 8,258
Trinity Industries, Inc. .................. 500 8,440
Wabtec Corp. .............................. 300 11,928
----------
TOTAL MACHINERY 185,051
----------
MARINE 0.1%
Alexander & Baldwin, Inc. ................. 250 7,975
----------
TOTAL MARINE 7,975
----------
MEDIA 0.9%
Belo Corp. -- Class A...................... 540 1,150
DreamWorks Animation SKG, Inc. -- Class
A*...................................... 490 13,769
Harte-Hanks, Inc. ......................... 230 1,615
John Wiley & Sons, Inc.- Class A........... 260 9,043
Lamar Advertising Co. -- Class A*.......... 460 6,978
Marvel Entertainment, Inc.*................ 300 9,657
Media General, Inc. -- Class A............. 140 1,068
Scholastic Corp. .......................... 160 2,971
Valassis Communications, Inc.*............. 290 1,288
----------
TOTAL MEDIA 47,539
----------
METALS & MINING 1.0%
Carpenter Technology Corp. ................ 270 4,887
Cliffs Natural Resources, Inc. ............ 650 17,543
Commercial Metals Co. ..................... 700 7,770
Reliance Steel & Aluminum Co. ............. 390 9,766
Steel Dynamics, Inc. ...................... 1,090 12,993
Worthington Industries, Inc. .............. 370 4,466
----------
TOTAL METALS & MINING 57,425
----------
MULTI-UTILITIES 2.5%
Alliant Energy Corp. ...................... 680 19,978
MDU Resources Group, Inc. ................. 1,120 20,395
NSTAR...................................... 650 21,482
OGE Energy Corp. .......................... 570 15,561
PNM Resources, Inc. ....................... 530 5,168
Puget Energy, Inc. ........................ 790 18,510
SCANA Corp. ............................... 720 23,695
Vectren Corp. ............................. 500 12,600
----------
TOTAL MULTI-UTILITIES 137,389
----------
MULTILINE RETAIL 0.5%
99 Cents Only Stores*...................... 290 3,538
Dollar Tree, Inc.*......................... 550 20,911
Saks, Inc.*................................ 870 5,220
----------
TOTAL MULTILINE RETAIL 29,669
----------
OFFICE ELECTRONICS 0.1%
Zebra Technologies Corp. -- Class A*....... 400 8,096
----------
TOTAL OFFICE ELECTRONICS 8,096
----------
OIL, GAS & CONSUMABLE FUELS 3.1%
Arch Coal, Inc. ........................... 880 18,841
Bill Barrett Corp.*........................ 230 4,692
Cimarex Energy Co. ........................ 510 20,635
Comstock Resources, Inc.*.................. 280 13,838
Denbury Resources, Inc.*................... 1,510 19,192
Encore Acquisition Co.*.................... 330 10,279
Forest Oil Corp.*.......................... 550 16,065
Frontier Oil Corp. ........................ 640 8,454
Newfield Exploration Co.*.................. 810 18,614
Overseas Shipholding Group, Inc. .......... 150 5,637
Patriot Coal Corp.*........................ 390 6,174
Plains Exploration & Production Co.*....... 660 18,612
Quicksilver Resources, Inc.*............... 690 7,224
----------
TOTAL OIL, GAS & CONSUMABLE FUELS 168,257
----------
PAPER & FOREST PRODUCTS 0.1%
Louisiana-Pacific Corp. ................... 560 2,688
----------
TOTAL PAPER & FOREST PRODUCTS 2,688
----------
PERSONAL PRODUCTS 0.4%
Alberto-Culver Co. ........................ 520 13,380
NBTY, Inc.*................................ 330 7,712
----------
TOTAL PERSONAL PRODUCTS 21,092
----------
PHARMACEUTICALS 1.0%
Endo Pharmaceuticals Holdings, Inc.*....... 740 13,690
Medicis Pharmaceutical Corp. -- Class A.... 350 4,995
Perrigo Co. ............................... 480 16,320
Sepracor, Inc.*............................ 670 8,924
Valeant Pharmaceuticals International*..... 540 10,136
----------
TOTAL PHARMACEUTICALS 54,065
----------
REAL ESTATE INVESTMENT TRUSTS (REITS) 5.2%
Alexandria Real Estate Equities, Inc. ..... 200 13,904
AMB Property Corp. ........................ 600 14,418
BRE Properties, Inc. ...................... 310 10,791
Camden Property Trust...................... 330 11,124
Cousins Properties, Inc. .................. 270 3,910
Duke Realty Corp. ......................... 900 12,699
Equity One, Inc. .......................... 190 3,319
Essex Property Trust, Inc. ................ 160 15,568
Federal Realty Investment Trust............ 360 22,057
Health Care REIT, Inc. .................... 620 27,596
Highwoods Properties, Inc. ................ 390 9,680
Hospitality Properties Trust............... 580 5,887
Liberty Property Trust..................... 600 14,310
Macerich Co. .............................. 460 13,533
Mack-Cali Realty Corp. .................... 400 9,088
Nationwide Health Properties, Inc. ........ 590 17,606
Potlatch Corp. ............................ 240 7,970
Rayonier, Inc. ............................ 480 15,879
</Table>
See Notes to Financial Statements.
ANNUAL REPORT 39
RYDEX 2x S&P MIDCAP 400 ETF
SCHEDULE OF INVESTMENTS (continued) October 31, 2008
- --------------------------------------------------------------------------------
<Table>
<Caption>
MARKET
SHARES VALUE
- ---------------------------------------------------------------------
COMMON STOCKS (CONCLUDED)
Realty Income Corp. ....................... 620 $14,334
Regency Centers Corp. ..................... 430 16,968
UDR, Inc. ................................. 830 16,401
Weingarten Realty Investors................ 460 9,407
----------
TOTAL REAL ESTATE INVESTMENT TRUSTS (REITS) 286,449
----------
REAL ESTATE MANAGEMENT & DEVELOPMENT 0.2%
Jones Lang LaSalle, Inc. .................. 250 8,230
----------
TOTAL REAL ESTATE MANAGEMENT & DEVELOPMENT 8,230
----------
ROAD & RAIL 0.9%
Avis Budget Group, Inc.*................... 620 1,017
Con-way, Inc. ............................. 280 9,531
J.B. Hunt Transport Services, Inc. ........ 500 14,215
Kansas City Southern*...................... 560 17,287
Werner Enterprises, Inc. .................. 260 5,101
YRC Worldwide, Inc.*....................... 350 1,603
----------
TOTAL ROAD & RAIL 48,754
----------
SEMICONDUCTORS & SEMICONDUCTOR EQUIPMENT 1.5%
Atmel Corp.*............................... 2,730 11,330
Cree, Inc.*................................ 540 10,600
Fairchild Semiconductor International,
Inc.*................................... 770 4,374
Integrated Device Technology, Inc.*........ 1,040 6,614
International Rectifier Corp.*............. 450 6,948
Intersil Corp. -- Class A.................. 760 10,404
Lam Research Corp.*........................ 770 17,217
RF Micro Devices, Inc.*.................... 1,600 3,184
Semtech Corp.*............................. 380 4,606
Silicon Laboratories, Inc.*................ 290 7,528
----------
TOTAL SEMICONDUCTORS & SEMICONDUCTOR EQUIPMENT 82,805
----------
SOFTWARE 2.4%
ACI Worldwide, Inc.*....................... 210 2,877
Advent Software, Inc.*..................... 100 1,874
Ansys, Inc.*............................... 540 15,460
Cadence Design Systems, Inc.*.............. 1,590 6,471
Factset Research Systems, Inc. ............ 260 10,085
Fair Isaac Corp. .......................... 300 4,677
Jack Henry & Associates, Inc. ............. 530 10,075
Macrovision Solutions Corp.*............... 510 5,651
McAfee, Inc.*.............................. 930 30,272
Mentor Graphics Corp.*..................... 570 4,184
Parametric Technology Corp.*............... 710 9,223
Sybase, Inc.*.............................. 490 13,049
Synopsys, Inc.*............................ 880 16,086
Wind River Systems, Inc.*.................. 420 3,671
----------
TOTAL SOFTWARE 133,655
----------
SPECIALTY RETAIL 3.7%
Advance Auto Parts, Inc. .................. 590 18,408
Aeropostale, Inc.*......................... 410 9,926
American Eagle Outfitters, Inc. ........... 1,260 14,011
AnnTaylor Stores Corp.*.................... 350 4,400
Barnes & Noble, Inc. ...................... 230 4,342
Borders Group, Inc. ....................... 370 1,254
CarMax, Inc.*.............................. 1,350 14,337
Chico's FAS, Inc.*......................... 1,080 3,672
Coldwater Creek, Inc.*..................... 290 1,041
Collective Brands, Inc.*................... 390 4,988
Dick's Sporting Goods, Inc.*............... 520 7,967
Foot Locker, Inc. ......................... 950 13,889
Guess?, Inc. .............................. 370 8,055
J. Crew Group, Inc.*....................... 320 6,480
O'Reilly Automotive, Inc.*................. 820 22,230
Pacific Sunwear of California, Inc.*....... 400 1,368
PetSmart, Inc. ............................ 780 15,358
Rent-A-Center, Inc.*....................... 410 5,986
Ross Stores, Inc. ......................... 810 26,479
Urban Outfitters, Inc.*.................... 700 15,218
Williams-Sonoma, Inc. ..................... 530 4,389
----------
TOTAL SPECIALTY RETAIL 203,798
----------
TEXTILES, APPAREL & LUXURY GOODS 0.6%
Hanesbrands, Inc.*......................... 570 9,958
Phillips-Van Heusen Corp. ................. 310 7,598
Timberland Co. -- Class A*................. 290 3,509
Under Armour, Inc. -- Class A*............. 220 5,720
Warnaco Group, Inc.*....................... 280 8,347
----------
TOTAL TEXTILES, APPAREL & LUXURY GOODS 35,132
----------
THRIFTS & MORTGAGE FINANCE 1.2%
Astoria Financial Corp. ................... 490 9,320
First Niagara Financial Group, Inc. ....... 720 11,354
New York Community Bancorp, Inc. .......... 2,100 32,886
PMI Group, Inc.(The)....................... 420 1,046
Washington Federal, Inc. .................. 540 9,515
----------
TOTAL THRIFTS & MORTGAGE FINANCE 64,121
----------
TOBACCO 0.1%
Universal Corp. ........................... 160 6,334
----------
TOTAL TOBACCO 6,334
----------
TRADING COMPANIES & DISTRIBUTORS 0.4%
GATX Corp. ................................ 300 8,565
MSC Industrial Direct Co. -- Class A....... 280 10,041
United Rentals, Inc.*...................... 360 3,690
----------
TOTAL TRADING COMPANIES & DISTRIBUTORS 22,296
----------
WATER UTILITIES 0.3%
Aqua America, Inc. ........................ 830 14,940
----------
TOTAL WATER UTILITIES 14,940
----------
WIRELESS TELECOMMUNICATION SERVICES 0.3%
Telephone & Data Systems, Inc. ............ 650 17,453
----------
TOTAL WIRELESS TELECOMMUNICATION SERVICES 17,453
----------
TOTAL COMMON STOCKS
(Cost $5,196,509) 4,422,420
----------
TOTAL INVESTMENTS 80.7%
(Cost $5,196,509) 4,422,420
----------
OTHER ASSETS IN EXCESS OF LIABILITIES--19.3% 1,057,606
----------
NET ASSETS--100.0% $5,480,026
- ---------------------------------------------------------------------
</Table>
See Notes to Financial Statements.
ANNUAL REPORT 40
RYDEX 2x S&P MIDCAP 400 ETF
SCHEDULE OF INVESTMENTS (concluded) October 31, 2008
- --------------------------------------------------------------------------------
<Table>
<Caption>
UNREALIZED
CONTRACTS GAIN
- ---------------------------------------------------------------------
FUTURES CONTRACTS PURCHASED
December 2008 S&P MidCap 400 Index E-Mini
Futures Contracts (Aggregate Market
Value of Contracts $4,993,120).......... 88 $149,000
----------
<Caption>
UNITS
- ---------------------------------------------------------------------
EQUITY INDEX SWAP AGREEMENTS PURCHASED
Credit Suisse First Boston January 2009 S&P
MidCap 400 Index Swap, Terminating
01/27/09 (Notional Market Value
$1,519,841)**........................... 2,673 $236,602
- ---------------------------------------------------------------------
</Table>
* Non-Income Producing Security.
** Price return based on S&P MidCap 400 Index +/- financing at a variable
rate.
See Notes to Financial Statements.
ANNUAL REPORT 41
RYDEX INVERSE 2x S&P MIDCAP 400 ETF
SCHEDULE OF INVESTMENTS October 31, 2008
- --------------------------------------------------------------------------------
<Table>
<Caption>
FACE MARKET
AMOUNT VALUE
- -------------------------------------------------------------------------
REPURCHASE AGREEMENTS 88.9%
State Street Bank & Trust Co., 0.030%,
dated 10/31/08, to be repurchased at
$5,866,015 on 11/03/08 collateralized by
$6,460,000 FNMA at 5.500% due 07/14/28 with
a value of $5,983,575...................... $5,866,000 $5,866,000
------------
TOTAL REPURCHASE AGREEMENTS
(Cost $5,866,000) 5,866,000
------------
TOTAL INVESTMENTS 88.9%
(Cost $5,866,000) 5,866,000
------------
OTHER ASSETS IN EXCESS OF LIABILITIES--11.1% 730,111
------------
NET ASSETS--100.0% $6,596,111
- -------------------------------------------------------------------------
<Caption>
UNREALIZED
CONTRACTS LOSS
- -------------------------------------------------------------------------
FUTURES CONTRACTS SOLD SHORT
December 2008 S&P MidCap 400 Index E-Mini
Futures Contracts (Aggregate Market Value
of Contracts $4,198,760)................... 74 $(466,566)
------------
<Caption>
UNITS
- -------------------------------------------------------------------------
EQUITY INDEX SWAP AGREEMENTS SOLD SHORT
Credit Suisse First Boston January 2009 S&P
MidCap 400 Index Swap, Terminating 01/27/09
(Notional Market Value $9,031,265)*........ 15,886 $(1,405,948)
- -------------------------------------------------------------------------
</Table>
* Price return based on S&P MidCap 400 Index +/- financing at a variable
rate.
FNMA --Federal National Mortgage Association
See Notes to Financial Statements.
ANNUAL REPORT 42
RYDEX 2x RUSSELL 2000 ETF
SCHEDULE OF INVESTMENTS October 31, 2008
- --------------------------------------------------------------------------------
<Table>
<Caption>
MARKET
SHARES VALUE
- -------------------------------------------------------------------------
COMMON STOCKS 80.4%
AEROSPACE & DEFENSE 1.6%
AAR Corp.*................................. 514 $8,219
Aerovironment, Inc.*....................... 138 4,957
American Science & Engineering, Inc. ...... 120 7,548
Applied Signal Technology, Inc. ........... 168 3,010
Argon ST, Inc.*............................ 170 3,546
Ascent Solar Technologies, Inc.*........... 98 510
Axsys Technologies, Inc.*.................. 118 7,791
Ceradyne, Inc.*............................ 348 8,178
Cubic Corp. ............................... 208 4,628
Curtiss-Wright Corp. ...................... 594 21,919
Ducommun, Inc. ............................ 138 2,786
DynCorp International, Inc. -- Class A*.... 326 4,310
Esterline Technologies Corp.*.............. 386 13,915
GenCorp, Inc.*............................. 754 3,695
HEICO Corp. ............................... 288 11,079
Herley Industries, Inc.*................... 178 2,367
Hexcel Corp.*.............................. 1,268 16,738
Ladish Co., Inc.*.......................... 190 3,236
LMI Aerospace, Inc.*....................... 118 1,802
Moog, Inc. -- Class A*..................... 564 19,808
Orbital Sciences Corp.*.................... 772 15,818
Stanley, Inc.*............................. 118 4,043
Taser International, Inc.*................. 824 4,128
Teledyne Technologies, Inc.*............... 466 21,236
TransDigm Group, Inc.*..................... 436 13,141
Triumph Group, Inc. ....................... 218 9,561
------------
TOTAL AEROSPACE & DEFENSE 217,969
------------
AIR FREIGHT & LOGISTICS 0.3%
Atlas Air Worldwide Holdings, Inc.*........ 178 3,439
Dynamex, Inc.*............................. 120 2,929
Forward Air Corp. ......................... 378 9,892
HUB Group, Inc. -- Class A*................ 486 15,285
Pacer International, Inc. ................. 456 5,148
Park-Ohio Holdings Corp.*.................. 108 820
------------
TOTAL AIR FREIGHT & LOGISTICS 37,513
------------
AIRLINES 0.7%
Airtran Holdings, Inc.*.................... 1,546 6,323
Alaska Air Group, Inc.*.................... 476 11,757
Allegiant Travel Co.*...................... 178 7,090
Hawaiian Holdings, Inc.*................... 526 3,682
JetBlue Airways Corp.*..................... 2,280 12,654
Republic Airways Holdings, Inc.*........... 456 6,817
SkyWest, Inc. ............................. 772 11,897
UAL Corp. ................................. 1,656 24,111
US Airways Group, Inc.*.................... 1,506 15,271
------------
TOTAL AIRLINES 99,602
------------
AUTO COMPONENTS 0.4%
American Axle & Manufacturing Holdings,
Inc. ................................... 606 2,176
Amerigon, Inc.*............................ 288 1,382
ArvinMeritor, Inc. ........................ 972 5,754
Cooper Tire & Rubber Co. .................. 774 5,906
Dana Holding Corp.*........................ 1,308 2,485
Dorman Products, Inc.*..................... 148 1,665
Drew Industries, Inc.*..................... 258 3,122
Exide Technologies*........................ 992 4,712
Fuel Systems Solutions, Inc.*.............. 158 4,495
Hayes Lemmerz International, Inc.*......... 1,330 1,769
Lear Corp.*................................ 843 1,695
Modine Manufacturing Co. .................. 426 3,152
Quantum Fuel Systems Technologies
Worldwide, Inc.*........................ 1,090 818
Raser Technologies, Inc.*.................. 565 2,435
Spartan Motors, Inc. ...................... 426 1,955
Stoneridge, Inc.*.......................... 190 1,081
Superior Industries International, Inc. ... 306 4,376
Tenneco, Inc.*............................. 614 3,015
Visteon Corp.*............................. 1,644 1,134
Wonder Auto Technolgy, Inc.*............... 198 790
------------
TOTAL AUTO COMPONENTS 53,917
------------
AUTOMOBILES 0.0%(A)
Fleetwood Enterprises, Inc.*............... 960 393
Winnebago Industries, Inc. ................ 386 2,293
------------
TOTAL AUTOMOBILES 2,686
------------
BEVERAGES 0.1%
Boston Beer Co., Inc. -- Class A*.......... 110 4,157
Coca-Cola Bottling Co. Consolidated........ 50 2,209
National Beverage Corp.*................... 140 1,282
------------
TOTAL BEVERAGES 7,648
------------
BIOTECHNOLOGY 3.5%
Acadia Pharmaceuticals, Inc.*.............. 436 828
Acorda Therapeutics, Inc.*................. 486 9,914
Affymax, Inc.*............................. 138 1,849
Alexion Pharmaceuticals, Inc.*............. 1,012 41,239
Alkermes, Inc.*............................ 1,260 12,449
Allos Therapeutics, Inc.*.................. 694 5,073
Alnylam Pharmaceuticals, Inc.*............. 466 10,718
Amicus Therapeutics, Inc.*................. 68 723
Arena Pharmaceuticals, Inc.*............... 972 3,577
Ariad Pharmaceuticals, Inc.*............... 912 1,815
ArQule, Inc.*.............................. 536 1,479
Array BioPharma, Inc.*..................... 624 3,070
Celera Corp.*.............................. 1,052 11,898
Cell Genesys, Inc.*........................ 1,130 259
Celldex Therapeutics Inc*.................. 198 1,534
Cepheid, Inc.*............................. 752 8,926
Cougar Biotechnology, Inc.*................ 198 5,029
Cubist Pharmaceuticals, Inc.*.............. 744 18,890
CV Therapeutics, Inc.*..................... 802 7,483
Cytokinetics, Inc.*........................ 465 1,325
Cytori Therapeutics, Inc.*................. 258 1,032
Dendreon Corp.*............................ 1,230 6,052
Dyax Corp.*................................ 734 2,459
Emergent Biosolutions, Inc.*............... 178 3,206
Enzon Pharmaceuticals, Inc.*............... 594 2,952
Genomic Health, Inc.*...................... 188 3,465
Geron Corp.*............................... 1,030 4,099
GTx, Inc.*................................. 248 3,502
Halozyme Therapeutics, Inc.*............... 802 3,842
Human Genome Sciences, Inc.*............... 1,784 5,762
Idenix Pharmaceuticals, Inc.*.............. 328 1,811
Idera Pharmaceuticals, Inc.*............... 268 2,605
Immunogen, Inc.*........................... 666 3,084
Immunomedics, Inc.*........................ 862 1,293
Incyte Corp.*.............................. 1,002 4,158
Indevus Pharmaceuticals, Inc.*............. 1,022 2,729
InterMune, Inc.*........................... 416 6,128
</Table>
See Notes to Financial Statements.
ANNUAL REPORT 43
RYDEX 2x RUSSELL 2000 ETF
SCHEDULE OF INVESTMENTS (continued) October 31, 2008
- --------------------------------------------------------------------------------
<Table>
<Caption>
MARKET
SHARES VALUE
- -------------------------------------------------------------------------
COMMON STOCKS (CONTINUED)
Isis Pharmaceuticals, Inc.*................ 1,190 $16,731
Lexicon Pharmaceuticals, Inc.*............. 1,060 1,664
Ligand Pharmaceuticals, Inc. -- Class B*... 1,110 2,298
MannKind Corp.*............................ 684 2,572
Marshall Edwards, Inc.*.................... 268 332
Martek Biosciences Corp. .................. 436 13,006
Maxygen, Inc.*............................. 328 1,374
Medarex, Inc.*............................. 1,684 11,838
Metabolix, Inc.*........................... 248 2,324
Molecular Insight Pharmaceuticals, Inc.*... 236 1,180
Momenta Pharmaceuticals, Inc.*............. 326 2,970
Myriad Genetics, Inc.*..................... 586 36,971
Nabi Biopharmaceuticals*................... 684 2,681
Nanosphere, Inc.*.......................... 168 837
Neurocrine Biosciences, Inc.*.............. 506 2,090
Novavax, Inc.*............................. 764 1,719
NPS Pharmaceuticals, Inc.*................. 624 4,368
Omrix Biopharmaceuticals, Inc.*............ 188 3,258
Onyx Pharmaceuticals, Inc.*................ 734 19,803
Opko Health, Inc.*......................... 634 970
Orexigen Therapeutics, Inc.*............... 266 1,263
OSI Pharmaceuticals, Inc.*................. 754 28,614
Osiris Therapeutics, Inc.*................. 198 3,004
PDL BioPharma, Inc. ....................... 1,576 15,366
Pharmasset, Inc.*.......................... 218 3,898
Progenics Pharmaceuticals, Inc.*........... 348 3,483
Protalix BioTherapeutics, Inc.*............ 140 238
Regeneron Pharmaceuticals, Inc.*........... 822 15,865
Repligen Corp.*............................ 408 1,636
Rexahn Pharmaceuticals, Inc.*.............. 386 425
Rigel Pharmaceuticals, Inc.*............... 485 4,224
Sangamo Biosciences, Inc.*................. 486 3,796
Savient Pharmaceuticals, Inc.*............. 714 3,399
Seattle Genetics, Inc.*.................... 802 8,245
Synta Pharmaceuticals Corp.*............... 218 1,543
Targacept, Inc.*........................... 238 1,409
Theravance, Inc.*.......................... 684 4,637
United Therapeutics Corp.*................. 298 25,995
XOMA, Ltd.*................................ 1,744 2,180
Zymogenetics, Inc.*........................ 495 1,584
------------
TOTAL BIOTECHNOLOGY 466,047
------------
BUILDING PRODUCTS 0.4%
AAON, Inc. ................................ 178 2,935
American Woodmark Corp. ................... 138 2,559
Ameron International Corp. ................ 120 5,640
Apogee Enterprises, Inc. .................. 378 3,727
Builders FirstSource, Inc.*................ 208 790
China Architectural Engineering, Inc.*..... 248 977
Gibraltar Industries, Inc. ................ 356 4,717
Griffon Corp.*............................. 576 4,862
Insteel Industries, Inc. .................. 228 2,339
NCI Building Systems, Inc.*................ 258 4,801
Quanex Building Products Corp. ............ 486 4,452
Simpson Manufacturing Co., Inc. ........... 494 11,382
Trex Co., Inc.*............................ 198 3,229
Universal Forest Products, Inc. ........... 218 5,156
------------
TOTAL BUILDING PRODUCTS 57,566
------------
CAPITAL MARKETS 1.5%
Apollo Investment Corp. ................... 1,874 24,699
Ares Capital Corp. ........................ 1,280 10,061
BGC Partners, Inc. -- Class A.............. 446 1,824
BlackRock Kelso Capital Corp. ............. 170 1,785
Broadpoint Securities Group, Inc.*......... 318 938
Calamos Asset Management, Inc. -- Class A.. 268 2,200
Capital Southwest Corp. ................... 40 4,080
Cohen & Steers, Inc. ...................... 218 3,961
Diamond Hill Investment Group, Inc. ....... 30 1,908
Epoch Holding Corp. ....................... 148 1,295
Evercore Partners, Inc. -- Class A......... 130 1,582
FBR Capital Markets Corp.*................. 366 2,017
FCStone Group, Inc.*....................... 298 1,773
GAMCO Investors, Inc. -- Class A........... 100 3,807
GFI Group, Inc. ........................... 872 2,799
Gladstone Capital Corp. ................... 278 3,311
Gladstone Invt Corp. ...................... 288 1,604
Greenhill & Co., Inc. ..................... 228 15,041
Harris & Harris Group, Inc.*............... 338 1,690
Hercules Technology Growth Capital, Inc. .. 436 3,785
International Assets Holding Corp.*........ 58 936
Kayne Anderson Energy Development Co. ..... 130 1,923
KBW, Inc.*................................. 346 10,131
Knight Capital Group, Inc. -- Class A*..... 1,240 17,930
Kohlberg Capital Corp. .................... 238 1,330
LaBranche & Co., Inc.*..................... 674 4,199
Ladenburg Thalmann Financial Services,
Inc.*................................... 1,416 1,784
MCG Capital Corp. ......................... 1,000 820
MVC Capital, Inc. ......................... 318 3,934
NGP Capital Resources Co. ................. 289 3,507
optionsXpress Holdings, Inc. .............. 556 9,875
Patriot Capital Funding, Inc. ............. 276 1,366
PennantPark Investment Corp. .............. 278 1,270
Penson Worldwide, Inc.*.................... 218 1,557
Piper Jaffray Cos., Inc.*.................. 248 9,784
Prospect Capital Corp. .................... 346 4,353
Pzena Investment Management, Inc. -- Class
A....................................... 80 354
Riskmetrics Group, Inc.*................... 286 4,407
Sanders Morris Harris Group, Inc. ......... 258 1,909
Stifel Financial Corp.*.................... 333 14,535
SWS Group, Inc. ........................... 318 5,902
Thomas Weisel Partners Group, Inc.*........ 258 1,450
TradeStation Group, Inc.*.................. 426 3,336
U.S. Global Investors, Inc. -- Class A..... 168 1,211
Westwood Holdings Group, Inc. ............. 70 2,685
------------
TOTAL CAPITAL MARKETS 200,648
------------
CHEMICALS 1.7%
A. Schulman, Inc. ......................... 356 6,376
American Vanguard Corp. ................... 248 3,628
Arch Chemicals, Inc. ...................... 328 9,305
Balchem Corp. ............................. 238 6,083
Calgon Carbon Corp.*....................... 536 7,140
Ferro Corp. ............................... 576 8,916
Flotek Industries, Inc.*................... 298 1,475
GenTek, Inc.*.............................. 118 2,124
H.B. Fuller Co. ........................... 636 11,238
Hercules, Inc. ............................ 1,488 25,013
ICO, Inc.*................................. 366 1,636
Innophos Holdings, Inc. ................... 138 3,692
Innospec, Inc. ............................ 308 2,695
Koppers Holdings, Inc. .................... 278 6,614
</Table>
See Notes to Financial Statements.
ANNUAL REPORT 44
RYDEX 2x RUSSELL 2000 ETF
SCHEDULE OF INVESTMENTS (continued) October 31, 2008
- --------------------------------------------------------------------------------
<Table>
<Caption>
MARKET
SHARES VALUE
- -------------------------------------------------------------------------
COMMON STOCKS (CONTINUED)
Landec Corp.*.............................. 308 $2,880
LSB Industries, Inc.*...................... 228 1,874
Minerals Technologies, Inc. ............... 248 14,076
NewMarket Corp. ........................... 178 6,709
NL Industries, Inc. ....................... 90 1,240
Olin Corp. ................................ 982 17,833
OM Group, Inc.*............................ 406 8,664
Penford Corp. ............................. 148 1,905
PolyOne Corp.*............................. 1,230 5,843
Quaker Chemical Corp. ..................... 138 2,640
Rockwood Holdings, Inc.*................... 546 6,743
Sensient Technologies Corp. ............... 634 15,996
ShengdaTech, Inc.*......................... 396 2,008
Solutia, Inc.*............................. 1,248 12,031
Spartech Corp. ............................ 406 2,582
Stepan Co. ................................ 80 2,866
Westlake Chemical Corp. ................... 248 4,521
WR Grace & Co.*............................ 952 8,578
Zep, Inc. ................................. 278 5,852
Zoltek Cos., Inc.*......................... 366 4,315
------------
TOTAL CHEMICALS 225,091
------------
COMMERCIAL BANKS 6.5%
1st Source Corp. .......................... 198 4,249
AMCORE Financial, Inc. .................... 266 1,237
Ameris Bancorp............................. 178 1,965
Ames Natl Corp. ........................... 88 2,200
Arrow Financial Corp. ..................... 120 3,119
Bancfirst Corp. ........................... 98 4,939
Banco Latinoamericano de Exportaciones,
S.A. -- Class E......................... 358 3,806
BancTrust Financial Group, Inc. ........... 228 2,841
Bank of the Ozarks, Inc. .................. 160 4,864
Banner Corp. .............................. 188 2,401
Boston Private Financial Holdings, Inc. ... 722 6,382
Bryn Mawr Bank Corp. ...................... 90 1,907
Camden National Corp. ..................... 100 2,925
Capital City Bank Group, Inc. ............. 158 4,424
Capitol Bancorp, Ltd. ..................... 188 1,925
Cardinal Financial Corp. .................. 318 1,984
Cascade Bancorp............................ 296 2,824
Cathay General Bancorp..................... 654 16,010
Centerstate Banks of Florida, Inc. ........ 120 2,100
Central Pacific Financial Corp. ........... 378 5,897
Chemical Financial Corp. .................. 316 8,301
Citizens + Northn Corp. ................... 118 2,773
Citizens Republic Bancorp, Inc. ........... 1,602 4,726
City Bank.................................. 178 1,833
City Holding Co. .......................... 210 8,786
CoBiz Financial, Inc. ..................... 248 2,887
Colonial BancGroup, Inc. .................. 2,666 10,824
Columbia Banking System, Inc. ............. 238 3,789
Community Bank System, Inc. ............... 421 10,504
Community Trust Bancorp, Inc. ............. 198 6,609
CVB Financial Corp. ....................... 872 11,040
East West Bancorp, Inc. ................... 834 14,470
Enterprise Financial Services Corp. ....... 148 2,745
F.N.B. Corp. .............................. 1,130 14,803
Farmers Capital Bank Corp. ................ 80 1,582
Financial Institutions, Inc. .............. 148 2,399
First Bancorp Inc/ME....................... 118 2,124
First BanCorp. ............................ 940 9,607
First Bancorp.............................. 188 3,290
First Busey Corp. ......................... 336 6,263
First Commonwealth Financial Corp. ........ 962 10,640
First Community Bancshares, Inc. .......... 120 3,756
First Financial Bancorp.................... 496 6,671
First Financial Bankshares, Inc. .......... 276 14,956
First Financial Corp. ..................... 148 6,257
First Merchants Corp. ..................... 238 5,238
First Midwest Bancorp, Inc. ............... 644 14,303
First South Bancorp, Inc. ................. 108 1,517
FirstMerit Corp. .......................... 1,070 24,952
Frontier Financial Corp. .................. 624 4,156
Glacier Bancorp, Inc. ..................... 714 14,401
Greene Bankshares, Inc. ................... 170 3,358
Guaranty Bancorp*.......................... 694 2,956
Hancock Holding Co. ....................... 338 14,926
Hanmi Financial Corp. ..................... 494 1,976
Harleysville National Corp. ............... 416 5,770
Heartland Financial USA, Inc. ............. 170 4,038
Heritage Commerce Corp. ................... 138 1,786
Home Bancshares, Inc. ..................... 178 4,635
IBERIABANK Corp. .......................... 168 8,558
Independent Bank Corp. .................... 218 6,272
Integra Bank Corp. ........................ 268 1,616
International Bancshares Corp. ............ 674 17,504
Investors Bancorp, Inc.*................... 584 8,386
Lakeland Bancorp, Inc. .................... 268 2,953
Lakeland Financial Corp. .................. 160 3,592
MainSource Financial Group, Inc. .......... 265 4,733
MB Financial, Inc. ........................ 456 13,548
Midwest Banc Holdings, Inc. ............... 296 891
Nara Bancorp, Inc. ........................ 298 3,278
National Penn Bancshares, Inc. ............ 1,050 17,787
NBT Bancorp, Inc. ......................... 426 11,877
Northfield Bancorp, Inc. .................. 258 3,122
Old National Bancorp....................... 872 16,516
Old Second Bancorp, Inc. .................. 178 2,403
Oriental Financial Group................... 318 5,164
Pacific Capital Bancorp.................... 606 11,902
Pacific Continental Corp. ................. 140 1,995
PacWest Bancorp............................ 318 7,947
Park National Corp. ....................... 148 10,767
Peapack Gladstone Financial Corp. ......... 110 3,523
Pennsylvania Commerce Bancorp, Inc.*....... 70 2,083
Peoples Bancorp, Inc. ..................... 138 2,643
Pinnacle Financial Partners, Inc.*......... 298 8,720
Premierwest Bancorp........................ 258 2,103
PrivateBancorp, Inc. ...................... 286 10,299
Prosperity Bancshares, Inc. ............... 516 17,136
Provident Bankshares Corp. ................ 436 4,652
Renasant Corp. ............................ 278 5,827
Republic Bancorp, Inc. -- Class A.......... 120 2,762
S&T Bancorp, Inc. ......................... 316 10,776
S.Y. Bancorp, Inc. ........................ 178 4,902
Sandy Spring Bancorp, Inc. ................ 218 4,680
Santander BanCorp.......................... 60 569
SCBT Financial Corp. ...................... 138 4,677
Seacoast Banking Corp. of Florida.......... 198 1,758
Shore Bancshares, Inc. .................... 110 2,671
Sierra Bancorp............................. 98 1,956
Signature Bank*............................ 455 14,824
Simmons First National Corp. -- Class A.... 188 5,832
</Table>
See Notes to Financial Statements.
ANNUAL REPORT 45
RYDEX 2x RUSSELL 2000 ETF
SCHEDULE OF INVESTMENTS (continued) October 31, 2008
- --------------------------------------------------------------------------------
<Table>
<Caption>
MARKET
SHARES VALUE
- -------------------------------------------------------------------------
COMMON STOCKS (CONTINUED)
Smithtown Bancorp, Inc. ................... 130 $2,557
South Financial Group, Inc. ............... 962 5,589
Southside Bancshares, Inc. ................ 158 3,806
Southwest Bancorp, Inc. ................... 188 2,722
State Bancorp Inc/NY....................... 188 2,395
StellarOne Corp. .......................... 298 5,066
Sterling Bancorp........................... 238 3,732
Sterling Bancshares, Inc. ................. 962 7,658
Sterling Financial Corp. .................. 684 5,807
Suffolk Bancorp............................ 128 4,154
Sun Bancorp, Inc.*......................... 190 1,900
Susquehanna Bancshares, Inc. .............. 1,130 17,504
SVB Financial Group*....................... 396 20,374
Texas Capital Bancshares, Inc.*............ 366 6,533
Tompkins Financial Corp. .................. 78 3,822
TowneBank/Portsmouth VA.................... 276 6,036
Trico Bancshares........................... 180 3,877
Trustmark Corp. ........................... 654 13,420
UCBH Holdings, Inc. ....................... 1,458 7,698
UMB Financial Corp. ....................... 408 18,495
Umpqua Holdings Corp. ..................... 792 13,480
Union Bankshares Corp. .................... 178 4,242
United Bankshares, Inc. ................... 496 15,822
United Community Banks, Inc. .............. 536 7,032
United Security Bancshares Co. ............ 110 1,540
Univest Corp. of Pennsylvania.............. 168 5,198
W Holding Co., Inc. ....................... 1,436 933
Washington Trust Bancorp, Inc. ............ 150 3,198
WesBanco, Inc. ............................ 348 9,459
West Bancorporation, Inc. ................. 228 2,850
West Coast Bancorp......................... 208 1,814
Westamerica Bancorp........................ 386 22,099
Western Alliance Bancorp*.................. 248 3,673
Wilshire Bancorp, Inc. .................... 256 2,824
Wintrust Financial Corp. .................. 308 7,885
Yadkin Valley Financial Corp. ............. 150 2,234
------------
TOTAL COMMERCIAL BANKS 874,278
------------
COMMERCIAL SERVICES & SUPPLIES 3.6%
ABM Industries, Inc. ...................... 576 9,406
ACCO Brands Corp.*......................... 714 2,013
Administaff, Inc. ......................... 286 5,717
Advisory Board Co.(The)*................... 228 5,620
American Ecology Corp. .................... 218 3,824
American Reprographics Co.*................ 476 5,065
AMREP Corp.*............................... 20 602
ATC Technology Corp.*...................... 278 6,097
Bowne & Co., Inc. ......................... 356 2,773
Casella Waste Systems, Inc. -- Class A*.... 298 1,502
CBIZ, Inc.*................................ 594 4,811
CDI Corp. ................................. 178 2,314
Cenveo, Inc.*.............................. 634 3,062
Clean Harbors, Inc.*....................... 258 16,917
Comfort Systems USA, Inc. ................. 526 4,908
COMSYS IT Partners, Inc.*.................. 190 1,155
Consolidated Graphics, Inc.*............... 130 1,691
Cornell Cos., Inc.*........................ 148 3,370
CoStar Group, Inc.*........................ 258 9,293
Courier Corp. ............................. 138 2,403
CRA International, Inc.*................... 148 4,005
Deluxe Corp. .............................. 684 8,317
Duff & Phelps Corp. -- Class A*............ 138 2,622
EnergySolutions, Inc. ..................... 436 1,966
EnerNOC, Inc.*............................. 128 845
Ennis, Inc. ............................... 338 3,978
Exponent, Inc.*............................ 198 5,827
First Advantage Corp. -- Class A*.......... 138 1,508
Fuel Tech, Inc.*........................... 248 2,914
G&K Services, Inc. -- Class A.............. 258 5,828
Geo Group, Inc.(The)*...................... 674 11,903
GeoEye, Inc.*.............................. 238 5,150
Healthcare Services Group, Inc. ........... 566 9,373
Heidrick & Struggles International, Inc. .. 228 5,502
Herman Miller, Inc. ....................... 742 16,324
Hill International, Inc.*.................. 308 1,934
HNI Corp. ................................. 586 10,736
Hudson Highland Group, Inc.*............... 328 1,719
Huron Consulting Group, Inc.*.............. 276 15,006
ICF International, Inc.*................... 88 1,635
ICT Group, Inc.*........................... 118 622
IKON Office Solutions, Inc. ............... 1,070 18,436
Innerworkings, Inc.*....................... 416 2,891
Interface, Inc. -- Class A................. 704 4,963
Kelly Services, Inc. -- Class A............ 346 4,927
Kforce, Inc.*.............................. 406 3,195
Kimball International, Inc. -- Class B..... 418 3,114
Knoll, Inc. ............................... 636 9,197
Korn/Ferry International*.................. 614 8,528
LECG Corp.*................................ 338 1,622
M&F Worldwide Corp.*....................... 150 3,457
McGrath RentCorp........................... 308 7,004
Metalico, Inc.*............................ 318 1,018
Mine Safety Appliances Co. ................ 406 10,962
Mobile Mini, Inc.*......................... 456 7,661
MPS Group, Inc.*........................... 1,240 9,660
Multi-Color Corp. ......................... 140 2,758
Navigant Consulting, Inc.*................. 634 10,252
Odyssey Marine Exploration, Inc.*.......... 634 2,397
On Assignment, Inc.*....................... 466 3,029
PRG-Schultz International, Inc.*........... 198 840
Protection One, Inc.*...................... 80 588
Resources Connection, Inc.*................ 604 10,473
Rollins, Inc. ............................. 546 9,593
Schawk, Inc. .............................. 198 2,600
School Specialty, Inc.*.................... 248 5,208
Spherion Corp.*............................ 724 2,302
Standard Parking Corp.*.................... 118 2,473
Standard Register Co.(The)................. 198 1,610
SYKES Enterprises, Inc.*................... 436 6,959
Team, Inc.*................................ 246 6,831
Tetra Tech, Inc.*.......................... 774 17,020
TrueBlue, Inc.*............................ 584 4,865
United Stationers, Inc.*................... 308 11,516
Viad Corp. ................................ 276 6,031
Volt Information Sciences, Inc.*........... 168 1,285
VSE Corp. ................................. 50 1,640
Waste Connections, Inc.*................... 1,022 34,595
Waste Services, Inc.*...................... 316 1,890
Watson Wyatt Worldwide, Inc. -- Class A.... 564 23,953
------------
TOTAL COMMERCIAL SERVICES & SUPPLIES 477,600
------------
COMMUNICATIONS EQUIPMENT 2.2%
3Com Corp.*................................ 5,313 14,505
Acme Packet, Inc.*......................... 358 1,697
</Table>
See Notes to Financial Statements.
ANNUAL REPORT 46
RYDEX 2x RUSSELL 2000 ETF
SCHEDULE OF INVESTMENTS (continued) October 31, 2008
- --------------------------------------------------------------------------------
<Table>
<Caption>
MARKET
SHARES VALUE
- -------------------------------------------------------------------------
COMMON STOCKS (CONTINUED)
Adtran, Inc. .............................. 742 $11,278
Airvana, Inc.*............................. 318 1,396
Anaren, Inc.*.............................. 190 2,366
Arris Group, Inc.*......................... 1,616 11,167
Aruba Networks, Inc.*...................... 694 2,158
Avanex Corp.*.............................. 178 552
Avocent Corp.*............................. 594 8,922
Bel Fuse, Inc. -- Class B.................. 158 3,429
BigBand Networks, Inc.*.................... 436 1,613
Black Box Corp. ........................... 228 6,933
Blue Coat Systems, Inc.*................... 436 5,886
Bookham, Inc.*............................. 1,328 717
Cogo Group, Inc.*.......................... 338 1,839
Comtech Telecommunications Corp.*.......... 318 15,398
DG FastChannel, Inc.*...................... 231 4,091
Digi International, Inc.*.................. 338 3,461
EMS Technologies, Inc.*.................... 208 4,347
Emulex Corp.*.............................. 1,110 10,545
Extreme Networks*.......................... 1,160 2,134
Finisar Corp.*............................. 5,204 3,174
Foundry Networks, Inc.*.................... 1,924 28,571
Globecomm Systems, Inc.*................... 268 2,112
Harmonic, Inc.*............................ 1,240 8,816
Harris Stratex Networks, Inc. -- Class A*.. 336 2,228
Hughes Communications, Inc.*............... 98 1,593
Infinera Corp.*............................ 1,220 9,492
InterDigital, Inc.*........................ 596 12,981
Ixia*...................................... 564 3,756
Loral Space & Communications, Ltd.*........ 158 1,817
MRV Communications, Inc.*.................. 2,072 1,533
NETGEAR, Inc.*............................. 466 5,149
Neutral Tandem, Inc.*...................... 218 3,798
Nextwave Wireless, Inc.*................... 636 178
Oplink Communications, Inc.*............... 276 2,241
Opnext, Inc.*.............................. 248 992
Orbcomm, Inc.*............................. 416 1,248
Parkervision, Inc.*........................ 306 1,533
PC-Tel, Inc. .............................. 256 1,503
Plantronics, Inc. ......................... 644 9,299
Polycom, Inc.*............................. 1,150 24,162
Powerwave Technologies, Inc.*.............. 1,734 1,647
Riverbed Technology, Inc.*................. 742 9,297
SeaChange International, Inc.*............. 406 3,102
ShoreTel, Inc.*............................ 574 2,795
Sonus Networks, Inc.*...................... 2,686 5,936
Starent Networks Corp.*.................... 396 3,948
Sycamore Networks, Inc.*................... 2,518 8,410
Symmetricom, Inc.*......................... 604 2,688
Tekelec*................................... 862 10,939
Utstarcom, Inc.*........................... 1,458 3,470
ViaSat, Inc.*.............................. 336 6,122
------------
TOTAL COMMUNICATIONS EQUIPMENT 298,964
------------
COMPUTERS & PERIPHERALS 0.7%
3PAR, Inc.*................................ 347 2,214
Adaptec, Inc.*............................. 1,596 5,123
Avid Technology, Inc.*..................... 396 5,873
Compellent Technologies, Inc.*............. 178 1,940
Cray, Inc.*................................ 436 1,369
Data Domain, Inc.*......................... 436 8,049
Electronics for Imaging, Inc.*............. 704 7,462
Hutchinson Technology, Inc.*............... 308 2,107
Hypercom Corp.*............................ 704 1,373
Imation Corp. ............................. 396 4,879
Immersion Corp.*........................... 406 2,103
Intermec, Inc.*............................ 812 10,532
Intevac, Inc.*............................. 288 2,241
Isilon Systems, Inc.*...................... 326 1,115
Netezza Corp.*............................. 495 4,801
Novatel Wireless, Inc.*.................... 416 2,167
Palm, Inc.*................................ 1,416 5,650
Presstek, Inc.*............................ 366 1,530
Quantum Corp.*............................. 2,584 749
Rackable Systems, Inc.*.................... 388 2,766
Rimage Corp.*.............................. 128 1,887
STEC, Inc.*................................ 406 2,233
Stratasys, Inc.*........................... 268 3,237
Super Micro Computer, Inc.*................ 288 1,809
Synaptics, Inc.*........................... 446 13,777
------------
TOTAL COMPUTERS & PERIPHERALS 96,986
------------
CONSTRUCTION & ENGINEERING 0.6%
Dycom Industries, Inc.*.................... 526 4,671
EMCOR Group, Inc.*......................... 892 15,851
Furmanite Corp.*........................... 476 3,808
Granite Construction, Inc. ................ 436 15,552
Great Lakes Dredge & Dock Corp. ........... 526 2,356
Insituform Technologies, Inc. -- Class A*.. 366 4,915
Integrated Electrical Services, Inc.*...... 100 1,223
Layne Christensen Co.*..................... 256 6,728
MasTec, Inc.*.............................. 566 4,936
Michael Baker Corp.*....................... 98 2,335
Northwest Pipe Co.*........................ 120 3,448
Orion Marine Group, Inc.*.................. 286 1,481
Perini Corp.*.............................. 664 12,629
Pike Electric Corp.*....................... 220 1,925
Sterling Construction Co, Inc.*............ 150 1,982
------------
TOTAL CONSTRUCTION & ENGINEERING 83,840
------------
CONSTRUCTION MATERIALS 0.1%
Headwaters, Inc.*.......................... 554 5,872
Texas Industries, Inc. .................... 308 9,742
U.S. Concrete, Inc.*....................... 526 1,657
United States Lime & Minerals, Inc.*....... 20 510
------------
TOTAL CONSTRUCTION MATERIALS 17,781
------------
CONSUMER FINANCE 0.3%
Advance America Cash Advance Centers,
Inc. ................................... 554 1,485
Advanta Corp. -- Class B................... 506 2,287
Cardtronics, Inc.*......................... 158 882
Cash America International, Inc. .......... 386 13,653
CompuCredit Corp.*......................... 208 537
Credit Acceptance Corp.*................... 80 1,227
Dollar Financial Corp.*.................... 318 3,698
Ezcorp, Inc. -- Class A*................... 506 8,015
First Cash Financial Services, Inc.*....... 258 3,965
First Marblehead Corp (The)................ 912 1,550
Nelnet, Inc. -- Class A.................... 228 3,336
World Acceptance Corp.*.................... 218 4,029
------------
TOTAL CONSUMER FINANCE 44,664
------------
</Table>
See Notes to Financial Statements.
ANNUAL REPORT 47
RYDEX 2x RUSSELL 2000 ETF
SCHEDULE OF INVESTMENTS (continued) October 31, 2008
- --------------------------------------------------------------------------------
<Table>
<Caption>
MARKET
SHARES VALUE
- -------------------------------------------------------------------------
COMMON STOCKS (CONTINUED)
CONTAINERS & PACKAGING 0.3%
AEP Industries, Inc.*...................... 70 $1,370
Boise, Inc.*............................... 447 282
Bway Holding Co.*.......................... 100 748
Graphic Packaging Holding Co.*............. 1,904 3,522
Myers Industries, Inc. .................... 376 3,974
Rock-Tenn Co. -- Class A................... 504 15,327
Silgan Holdings, Inc. ..................... 336 15,637
------------
TOTAL CONTAINERS & PACKAGING 40,860
------------
DISTRIBUTORS 0.0%(A)
Aristotle Corp (The)*...................... 20 122
Audiovox Corp. -- Class A*................. 228 1,343
Core-Mark Holding Co., Inc.*............... 128 2,530
------------
TOTAL DISTRIBUTORS 3,995
------------
DIVERSIFIED CONSUMER SERVICES 0.8%
American Public Education, Inc.*........... 148 6,552
Capella Education Co.*..................... 188 8,911
Coinstar, Inc.*............................ 368 8,828
Corinthian Colleges, Inc.*................. 1,120 15,994
Jackson Hewitt Tax Service, Inc. .......... 376 5,181
K12, Inc.*................................. 78 2,145
Learning Tree International, Inc.*......... 118 1,505
Lincoln Educational Services Corp.*........ 58 839
Matthews International Corp. -- Class A.... 408 18,209
Pre-Paid Legal Services, Inc.*............. 108 4,264
Princeton Review, Inc.*.................... 178 991
Regis Corp. ............................... 566 7,001
Sotheby's.................................. 892 8,305
Steiner Leisure, Ltd.*..................... 218 5,646
Stewart Enterprises, Inc. -- Class A....... 1,100 5,687
thinkorswim Group, Inc.*................... 684 5,472
Universal Technical Institute, Inc.*....... 286 4,719
------------
TOTAL DIVERSIFIED CONSUMER SERVICES 110,249
------------
DIVERSIFIED FINANCIAL SERVICES 0.4%
Ampal-American Israel Corp -- Class A*..... 258 583
Asset Acceptance Capital Corp.*............ 198 1,606
Compass Diversified Holdings............... 316 3,855
Encore Capital Group, Inc.*................ 178 1,666
Fifth Street Finance Corp. ................ 130 884
Financial Federal Corp. ................... 336 7,778
Interactive Brokers Group, Inc. -- Class
A*...................................... 536 11,454
Life Partners Holdings, Inc. .............. 80 3,214
MarketAxess Holdings, Inc.*................ 406 2,322
Medallion Financial Corp. ................. 198 1,602
NewStar Financial, Inc.*................... 316 1,710
PHH Corp.*................................. 714 5,755
Pico Holdings, Inc.*....................... 218 5,459
Portfolio Recovery Associates, Inc.*....... 198 7,104
Primus Guaranty, Ltd.*..................... 297 134
Resource America, Inc. -- Class A.......... 128 736
------------
TOTAL DIVERSIFIED FINANCIAL SERVICES 55,862
------------
DIVERSIFIED TELECOMMUNICATION SERVICES 0.7%
Alaska Communications Systems Group,
Inc. ................................... 574 5,361
Atlantic Tele-Network, Inc. ............... 128 3,114
Cbeyond, Inc.*............................. 316 3,798
Cincinnati Bell, Inc.*..................... 3,202 7,653
Cogent Communications Group, Inc.*......... 626 2,992
Consolidated Communications Holdings,
Inc. ................................... 306 3,152
Fairpoint Communications, Inc. ............ 1,170 4,657
General Communication, Inc. -- Class A*.... 596 4,577
Global Crossing Ltd.*...................... 346 2,304
Globalstar, Inc.*.......................... 554 305
Hungarian Telephone & Cable Corp.*......... 60 645
Ibasis, Inc.*.............................. 416 919
IDT Corp. -- Class B*...................... 684 705
Iowa Telecommunications Services, Inc. .... 426 6,441
NTELOS Holdings Corp. ..................... 396 10,296
PAETEC Holding Corp.*...................... 1,626 1,464
Premiere Global Services, Inc.*............ 814 8,099
Shenandoah Telecom Co. .................... 308 7,383
tw telecom inc*............................ 1,942 13,750
Vonage Holdings Corp.*..................... 644 605
------------
TOTAL DIVERSIFIED TELECOMMUNICATION SERVICES 88,220
------------
ELECTRIC UTILITIES 1.4%
Allete, Inc. .............................. 346 12,110
Central Vermont Public Service Corp. ...... 138 2,748
Cleco Corp. ............................... 794 18,270
El Paso Electric Co.*...................... 594 11,001
Empire District Electric Co.(The).......... 446 8,568
IDACORP, Inc. ............................. 596 15,889
ITC Holdings Corp. ........................ 654 26,539
MGE Energy, Inc. .......................... 288 10,261
NorthWestern Corp. ........................ 516 10,083
Portland General Electric Co. ............. 824 16,909
UIL Holdings Corp. ........................ 336 11,088
Unisource Energy Corp. .................... 456 12,576
Westar Energy, Inc. ....................... 1,378 26,857
------------
TOTAL ELECTRIC UTILITIES 182,899
------------
ELECTRICAL EQUIPMENT 1.7%
Acuity Brands, Inc. ....................... 536 18,739
Advanced Battery Technologies, Inc.*....... 576 1,642
Akeena Solar, Inc.*........................ 278 781
American Superconductor Corp.*............. 554 6,930
AO Smith Corp. ............................ 266 8,392
AZZ, Inc.*................................. 158 4,610
Baldor Electric Co. ....................... 606 10,641
Beacon Power Corp.*........................ 1,262 1,148
Belden, Inc. .............................. 576 12,004
Brady Corp. -- Class A..................... 664 20,584
Capstone Turbine Corp.*.................... 1,922 2,595
China BAK Battery, Inc.*................... 436 1,125
Coleman Cable, Inc.*....................... 108 752
Encore Wire Corp. ......................... 238 4,562
Ener1, Inc.*............................... 476 3,727
Energy Conversion Devices, Inc.*........... 594 20,279
EnerSys*................................... 366 4,838
Evergreen Solar, Inc.*..................... 1,892 7,171
Franklin Electric Co., Inc. ............... 298 12,564
FuelCell Energy, Inc.*..................... 902 4,312
Fushi Copperweld, Inc.*.................... 188 837
GrafTech International, Ltd.*.............. 1,576 12,781
GT Solar International, Inc.*.............. 398 1,835
Harbin Electric, Inc.*..................... 98 803
II-VI, Inc.*............................... 318 8,933
LaBarge, Inc.*............................. 160 2,200
LSI Industries, Inc. ...................... 248 1,947
Medis Technologies, Ltd.*.................. 416 507
Microvision, Inc.*......................... 893 1,545
</Table>
See Notes to Financial Statements.
ANNUAL REPORT 48
RYDEX 2x RUSSELL 2000 ETF
SCHEDULE OF INVESTMENTS (continued) October 31, 2008
- --------------------------------------------------------------------------------
<Table>
<Caption>
MARKET
SHARES VALUE
- -------------------------------------------------------------------------
COMMON STOCKS (CONTINUED)
Orion Energy Systems, Inc.*................ 118 $524
Plug Power, Inc.*.......................... 1,060 1,039
Polypore International, Inc.*.............. 208 1,774
Powell Industries, Inc.*................... 98 1,814
Power-One, Inc.*........................... 982 1,090
PowerSecure International, Inc.*........... 228 878
Preformed Line Products Co. ............... 38 1,520
Regal-Beloit Corp. ........................ 426 13,871
Ultralife Corp.*........................... 168 1,460
Valence Technology, Inc.*.................. 666 1,532
Vicor Corp. ............................... 258 1,803
Woodward Governor Co. ..................... 774 24,845
------------
TOTAL ELECTRICAL EQUIPMENT 230,934
------------
ELECTRONIC EQUIPMENT & INSTRUMENTS 1.5%
Agilysys, Inc. ............................ 298 1,198
Anixter International, Inc.*............... 396 13,310
Benchmark Electronics, Inc.*............... 892 10,695
Brightpoint, Inc.*......................... 654 3,767
Checkpoint Systems, Inc.*.................. 524 6,608
China Security & Surveillance Technology,
Inc.*................................... 376 3,937
Cogent, Inc.*.............................. 544 4,972
Cognex Corp. .............................. 554 8,875
Coherent, Inc.*............................ 308 7,792
Comverge, Inc.*............................ 288 1,308
CPI International, Inc.*................... 128 1,262
CTS Corp. ................................. 446 3,118
Daktronics, Inc. .......................... 436 4,343
DTS, Inc.*................................. 238 4,915
Echelon Corp.*............................. 388 3,154
Electro Rent Corp. ........................ 286 3,429
Electro Scientific Industries, Inc.*....... 356 2,980
Elixir Gaming Technologies, Inc.*.......... 892 125
FARO Technologies, Inc.*................... 218 3,307
Gerber Scientific, Inc.*................... 308 1,472
ICx Technologies, Inc.*.................... 178 1,456
Insight Enterprises, Inc.*................. 616 5,994
IPG Photonics Corp.*....................... 256 3,635
KEMET Corp.*............................... 1,059 625
L-1 Identity Solutions, Inc.*.............. 862 7,068
Littelfuse, Inc.*.......................... 288 5,374
Maxwell Technologies, Inc.*................ 238 2,159
Measurement Specialties, Inc.*............. 188 2,008
Mercury Computer Systems, Inc.*............ 298 2,140
Methode Electronics, Inc. ................. 504 3,825
MTS Systems Corp. ......................... 228 7,405
Multi-Fineline Electronix, Inc.*........... 118 1,378
Newport Corp.*............................. 476 3,422
OSI Systems, Inc.*......................... 208 2,392
Park Electrochemical Corp. ................ 268 5,794
PC Connection, Inc.*....................... 128 773
PC Mall, Inc.*............................. 148 663
Plexus Corp.*.............................. 526 9,815
Radisys Corp.*............................. 298 1,898
Rofin-Sinar Technologies, Inc.*............ 388 8,648
Rogers Corp.*.............................. 238 7,164
Sanmina-SCI Corp.*......................... 6,998 5,248
Scansource, Inc.*.......................... 346 6,865
Smart Modular Technologies WWH, Inc.*...... 584 1,583
SYNNEX Corp.*.............................. 228 3,518
Technitrol, Inc. .......................... 536 3,093
TTM Technologies, Inc.*.................... 564 4,038
Universal Display Corp.*................... 378 4,090
Zygo Corp.*................................ 198 1,701
------------
TOTAL ELECTRONIC EQUIPMENT & INSTRUMENTS 204,339
------------
ENERGY EQUIPMENT & SERVICES 1.3%
Allis-Chalmers Energy, Inc.*............... 368 2,488
Basic Energy Services, Inc.*............... 544 7,442
Bolt Technology Corp.*..................... 110 892
Bristow Group, Inc.*....................... 318 7,877
Bronco Drilling Co., Inc.*................. 346 2,671
Cal Dive International, Inc.*.............. 584 4,970
CARBO Ceramics, Inc. ...................... 268 11,596
Complete Production Services, Inc.*........ 634 7,855
Dawson Geophysical Co.*.................... 100 2,453
Dril-Quip, Inc.*........................... 406 10,028
ENGlobal Corp.*............................ 356 1,563
Geokinetics, Inc.*......................... 60 342
Grey Wolf, Inc.*........................... 2,359 15,145
Gulf Island Fabrication, Inc. ............. 158 3,114
Gulfmark Offshore, Inc.*................... 298 11,026
Hornbeck Offshore Services, Inc.*.......... 306 7,283
ION Geophysical Corp.*..................... 1,112 7,295
Lufkin Industries, Inc. ................... 198 10,359
Matrix Service Co.*........................ 346 4,238
Mitcham Industries, Inc.*.................. 128 699
NATCO Group, Inc. -- Class A*.............. 266 5,623
Natural Gas Services Group, Inc.*.......... 158 2,094
Newpark Resources, Inc.*................... 1,188 6,831
OYO Geospace Corp.*........................ 50 1,434
Parker Drilling Co.*....................... 1,488 7,619
PHI, Inc.*................................. 178 3,734
Pioneer Drilling Co.*...................... 654 5,062
RPC, Inc. ................................. 386 4,088
Sulphco, Inc.*............................. 704 1,408
Superior Well Services, Inc.*.............. 218 3,651
T-3 Energy Services, Inc.*................. 168 4,050
Trico Marine Services, Inc.*............... 168 1,512
Union Drilling, Inc.*...................... 188 1,030
Willbros Group, Inc.*...................... 514 7,962
------------
TOTAL ENERGY EQUIPMENT & SERVICES 175,434
------------
FOOD & STAPLES RETAILING 0.8%
Andersons, Inc.(The)....................... 238 6,338
Arden Group, Inc. -- Class A............... 18 2,700
Casey's General Stores, Inc. .............. 666 20,113
Great Atlantic & Pacific Tea Co., Inc.*.... 466 3,854
Ingles Markets, Inc. -- Class A............ 168 3,135
Nash Finch Co. ............................ 168 6,624
Pantry, Inc.(The)*......................... 296 6,518
Pricesmart, Inc. .......................... 188 2,801
Ruddick Corp. ............................. 556 15,924
Spartan Stores, Inc. ...................... 288 7,773
Susser Holdings Corp.*..................... 100 1,558
United Natural Foods, Inc.*................ 566 12,645
Village Super Market -- Class A............ 40 1,966
Weis Markets, Inc. ........................ 148 4,801
Winn-Dixie Stores, Inc.*................... 714 10,724
------------
TOTAL FOOD & STAPLES RETAILING 107,474
------------
</Table>
See Notes to Financial Statements.
ANNUAL REPORT 49
RYDEX 2x RUSSELL 2000 ETF
SCHEDULE OF INVESTMENTS (continued) October 31, 2008
- --------------------------------------------------------------------------------
<Table>
<Caption>
MARKET
SHARES VALUE
- -------------------------------------------------------------------------
COMMON STOCKS (CONTINUED)
FOOD PRODUCTS 1.6%
AgFeed Industries, Inc.*................... 258 $1,130
Alico, Inc. ............................... 50 1,969
American Dairy, Inc.*...................... 88 1,081
B&G Foods, Inc. -- Class A................. 268 1,000
Cal-Maine Foods, Inc. ..................... 168 4,937
Calavo Growers, Inc. ...................... 138 1,401
Chiquita Brands International, Inc.*....... 574 7,835
Darling International, Inc.*............... 1,072 8,083
Diamond Foods, Inc. ....................... 208 6,080
Farmer Brothers Co. ....................... 90 2,160
Flowers Foods, Inc. ....................... 1,020 30,243
Fresh Del Monte Produce, Inc.*............. 554 11,695
Green Mountain Coffee Roasters, Inc.*...... 228 6,610
Griffin Land & Nurseries, Inc. ............ 40 1,227
Hain Celestial Group, Inc.*................ 536 12,456
HQ Sustainable Maritime Industries, Inc.*.. 88 361
Imperial Sugar Co. ........................ 158 1,871
J&J Snack Foods Corp. ..................... 188 5,896
Lancaster Colony Corp. .................... 268 8,453
Lance, Inc. ............................... 356 7,365
Lifeway Foods, Inc.*....................... 60 600
Omega Protein Corp.*....................... 238 1,756
Pilgrim's Pride Corp. ..................... 565 621
Ralcorp Holdings, Inc.*.................... 744 50,354
Reddy Ice Holdings, Inc. .................. 238 633
Sanderson Farms, Inc. ..................... 268 8,367
Smart Balance, Inc.*....................... 824 5,900
Synutra International, Inc.*............... 138 1,932
Tootsie Roll Industries, Inc. ............. 316 7,859
TreeHouse Foods, Inc.*..................... 416 12,588
Zhongpin, Inc.*............................ 246 2,118
------------
TOTAL FOOD PRODUCTS 214,581
------------
GAS UTILITIES 1.2%
Chesapeake Utilities Corp. ................ 90 2,812
Laclede Group, Inc. ....................... 288 15,068
New Jersey Resources Corp. ................ 554 20,631
Nicor, Inc. ............................... 594 27,449
Northwest Natural Gas Co. ................. 348 17,706
Piedmont Natural Gas Co., Inc. ............ 970 31,932
South Jersey Industries, Inc. ............. 396 13,492
Southwest Gas Corp. ....................... 574 14,993
WGL Holdings, Inc. ........................ 654 21,052
------------
TOTAL GAS UTILITIES 165,135
------------
HEALTH CARE EQUIPMENT & SUPPLIES 3.1%
Abaxis, Inc.*.............................. 288 4,427
Abiomed, Inc.*............................. 446 6,503
Accuray, Inc.*............................. 476 3,008
Align Technology, Inc.*.................... 814 5,641
Alphatec Holdings, Inc.*................... 328 1,289
American Medical Systems Holdings, Inc.*... 962 10,409
Analogic Corp. ............................ 178 7,861
Angiodynamics, Inc.*....................... 318 4,007
Arthrocare Corp.*.......................... 348 7,231
Atrion Corp. .............................. 20 1,979
Cantel Medical Corp.*...................... 168 1,613
Cardiac Science Corp.*..................... 258 2,407
Conceptus, Inc.*........................... 396 6,415
CONMED Corp.*.............................. 376 9,851
CryoLife, Inc.*............................ 366 4,904
Cyberonics, Inc.*.......................... 316 4,026
Cynosure, Inc. -- Class A*................. 128 1,121
Datascope Corp. ........................... 170 8,529
DexCom, Inc.*.............................. 346 1,564
ev3, Inc.*................................. 930 6,017
Exactech, Inc.*............................ 100 2,020
Greatbatch, Inc.*.......................... 298 6,482
Haemonetics Corp.*......................... 338 19,962
Hansen Medical, Inc.*...................... 228 2,123
I-Flow Corp.*.............................. 286 1,613
ICU Medical, Inc.*......................... 148 4,740
Immucor, Inc.*............................. 922 24,479
Insulet Corp.*............................. 238 1,333
Integra LifeSciences Holdings Corp.*....... 238 8,935
Invacare Corp. ............................ 426 7,749
IRIS International, Inc.*.................. 238 2,654
Kensey Nash Corp.*......................... 98 2,488
Masimo Corp.*.............................. 606 19,386
Medical Action Industries, Inc.*........... 188 2,162
Mentor Corp. .............................. 446 7,537
Meridian Bioscience, Inc. ................. 526 12,929
Merit Medical Systems, Inc.*............... 366 6,698
Micrus Endovascular Corp.*................. 208 2,454
Natus Medical, Inc.*....................... 366 5,600
Neogen Corp.*.............................. 188 5,540
NuVasive, Inc.*............................ 466 21,944
NxStage Medical, Inc.*..................... 338 1,372
OraSure Technologies, Inc.*................ 616 2,840
Orthofix International NV*................. 228 3,089
Orthovita, Inc.*........................... 872 2,389
Palomar Medical Technologies, Inc.*........ 238 2,723
Quidel Corp.*.............................. 368 5,818
RTI Biologics, Inc.*....................... 704 2,147
Sirona Dental Systems, Inc.*............... 218 3,481
Somanetics Corp.*.......................... 158 2,963
SonoSite, Inc.*............................ 218 4,593
Spectranetics Corp.*....................... 416 1,248
Stereotaxis, Inc.*......................... 358 1,443
STERIS Corp. .............................. 772 26,279
SurModics, Inc.*........................... 208 5,512
Symmetry Medical, Inc.*.................... 466 6,021
Synovis Life Technologies, Inc.*........... 168 2,938
Thoratec Corp.*............................ 714 17,579
TomoTherapy, Inc.*......................... 536 1,742
TranS1, Inc.*.............................. 160 1,018
Vision Sciences, Inc.*..................... 218 687
Vnus Medical Technologies, Inc.*........... 170 2,623
Volcano Corp.*............................. 624 9,703
West Pharmaceutical Services, Inc. ........ 426 17,006
Wright Medical Group, Inc.*................ 486 11,266
Zoll Medical Corp.*........................ 278 6,694
------------
TOTAL HEALTH CARE EQUIPMENT & SUPPLIES 410,804
------------
HEALTH CARE PROVIDERS & SERVICES 3.4%
Air Methods Corp.*......................... 140 2,349
Alliance Imaging, Inc.*.................... 336 2,738
Almost Family, Inc.*....................... 80 3,853
Amedisys, Inc.*............................ 348 19,631
AMERIGROUP Corp.*.......................... 704 17,600
AMN Healthcare Services, Inc.*............. 446 4,010
Amsurg Corp.*.............................. 416 10,375
Assisted Living Concepts, Inc. -- Class
A*...................................... 724 3,598
</Table>
See Notes to Financial Statements.
ANNUAL REPORT 50
RYDEX 2x RUSSELL 2000 ETF
SCHEDULE OF INVESTMENTS (continued) October 31, 2008
- --------------------------------------------------------------------------------
<Table>
<Caption>
MARKET
SHARES VALUE
- -------------------------------------------------------------------------
COMMON STOCKS (CONTINUED)
athenahealth, Inc.*........................ 268 $8,201
Bio-Reference Labs, Inc.*.................. 150 3,689
BMP Sunstone Corp.*........................ 306 2,062
Capital Senior Living Corp.*............... 296 1,329
CardioNet, Inc.*........................... 60 1,535
Catalyst Health Solutions, Inc.*........... 436 7,355
Centene Corp.*............................. 574 10,814
Chemed Corp. .............................. 300 13,137
Chindex International, Inc.*............... 148 1,240
Corvel Corp.*.............................. 3,880 104,062
Cross Country Healthcare, Inc.*............ 406 4,596
Emergency Medical Services Corp. -- Class
A*...................................... 120 3,943
Emeritus Corp.*............................ 258 2,975
Ensign Group, Inc. ........................ 110 1,803
Five Star Quality Care, Inc.*.............. 416 815
Genoptix, Inc.*............................ 110 3,678
Gentiva Health Services, Inc.*............. 336 9,122
Hanger Orthopedic Group, Inc.*............. 390 6,497
Healthsouth Corp.*......................... 1,160 14,546
Healthspring, Inc.*........................ 654 10,804
Healthways, Inc.*.......................... 466 4,707
HMS Holdings Corp.*........................ 328 8,125
inVentiv Health, Inc.*..................... 436 4,129
IPC The Hospitalist Co, Inc.*.............. 80 1,629
Kindred Healthcare, Inc.*.................. 368 5,332
Landauer, Inc. ............................ 120 6,487
LHC Group, Inc.*........................... 190 6,703
Magellan Health Services, Inc.*............ 536 19,800
MedCath Corp.*............................. 208 3,207
Molina Healthcare, Inc.*................... 188 4,187
MWI Veterinary Supply, Inc.*............... 138 4,779
National Healthcare Corp. ................. 110 4,511
National Research Corp. ................... 20 573
Nighthawk Radiology Holdings, Inc.*........ 308 1,414
Odyssey HealthCare, Inc.*.................. 436 4,181
Owens & Minor, Inc. ....................... 544 23,539
PharMerica Corp.*.......................... 398 8,171
Providence Service Corp.*.................. 160 192
PSS World Medical, Inc.*................... 814 14,766
Psychiatric Solutions, Inc.*............... 734 24,435
RadNet, Inc.*.............................. 278 956
RehabCare Group, Inc.*..................... 238 4,077
Res-Care, Inc.*............................ 328 5,055
Skilled Healthcare Group, Inc. -- Class
A*...................................... 228 2,800
Sun Healthcare Group, Inc.*................ 566 6,498
Sunrise Senior Living, Inc.*............... 594 1,794
Triple-S Mgmt Corp. -- Class B*............ 188 1,919
Universal American Corp.*.................. 516 4,567
US Physical Therapy, Inc.*................. 158 2,193
Virtual Radiologic Corp.*.................. 90 783
------------
TOTAL HEALTH CARE PROVIDERS & SERVICES 457,866
------------
HEALTH CARE TECHNOLOGY 0.3%
Allscripts-Misys Healthcare Solutions,
Inc. ................................... 754 4,901
Computer Programs & Systems, Inc. ......... 120 3,323
Eclipsys Corp.*............................ 714 10,603
MedAssets, Inc.*........................... 238 3,434
Omnicell, Inc.*............................ 408 4,480
Phase Forward, Inc.*....................... 564 8,048
Vital Images, Inc.*........................ 208 2,715
------------
TOTAL HEALTH CARE TECHNOLOGY 37,504
------------
HOTELS, RESTAURANTS & LEISURE 1.8%
AFC Enterprises, Inc.*..................... 336 1,633
Ambassadors Group, Inc. ................... 248 2,589
Ameristar Casinos, Inc. ................... 336 3,095
Bally Technologies, Inc.*.................. 724 16,037
BJ's Restaurants, Inc.*.................... 228 2,027
Bluegreen Corp.*........................... 168 815
Bob Evans Farms, Inc. ..................... 406 8,477
Buffalo Wild Wings, Inc.*.................. 238 6,731
California Pizza Kitchen, Inc.*............ 278 2,716
CBRL Group, Inc. .......................... 288 5,737
CEC Entertainment, Inc.*................... 268 6,882
Cheesecake Factory, Inc.(The)*............. 842 7,410
Churchill Downs, Inc. ..................... 128 4,861
CKE Restaurants, Inc. ..................... 694 5,892
Denny's Corp.*............................. 1,250 2,237
DineEquity Inc. ........................... 228 4,111
Domino's Pizza, Inc.*...................... 516 3,070
Dover Downs Gaming & Entertainment, Inc. .. 188 963
Dover Motorsports, Inc. ................... 198 424
Einstein Noah Restaurant Group, Inc.*...... 60 481
Gaylord Entertainment Co.*................. 536 11,476
Great Wolf Resorts, Inc.*.................. 356 673
Isle of Capri Casinos, Inc.*............... 208 1,059
Jack in the Box, Inc.*..................... 774 15,557
Krispy Kreme Doughnuts, Inc.*.............. 744 2,053
Landry's Restaurants, Inc. ................ 158 1,983
Life Time Fitness, Inc.*................... 456 8,682
Lodgian, Inc.*............................. 218 1,112
Luby's, Inc.*.............................. 286 1,384
Marcus Corp. .............................. 268 3,760
Monarch Casino & Resort, Inc.*............. 150 1,337
Morgans Hotel Group Co.*................... 356 1,695
O'Charleys, Inc. .......................... 238 1,785
P.F. Chang's China Bistro, Inc.*........... 318 6,506
Papa John's International, Inc.*........... 288 6,497
Peet's Coffee & Tea, Inc.*................. 188 4,222
Pinnacle Entertainment, Inc.*.............. 792 4,435
Red Robin Gourmet Burgers, Inc.*........... 218 3,311
Rick's Cabaret International, Inc.*........ 88 556
Riviera Holdings Corp.*.................... 130 558
Ruby Tuesday, Inc.*........................ 684 1,648
Ruth's Hospitality Group Inc*.............. 268 614
Shuffle Master, Inc.*...................... 694 2,679
Six Flags, Inc.*........................... 920 285
Sonic Corp.*............................... 792 8,474
Speedway Motorsports, Inc. ................ 178 2,839
Steak n Shake Co.(The)*.................... 378 1,947
Texas Roadhouse, Inc. -- Class A*.......... 694 4,872
Town Sports International Holdings, Inc.*.. 228 568
Vail Resorts, Inc.*........................ 416 13,836
Wendy's/Arby's Group, Inc. -- Class A*..... 5,224 18,911
WMS Industries, Inc.*...................... 576 14,400
------------
TOTAL HOTELS, RESTAURANTS & LEISURE 235,902
------------
HOUSEHOLD DURABLES 0.8%
American Greetings Corp. -- Class A........ 614 7,172
Beazer Homes USA, Inc.*.................... 516 1,636
Blyth, Inc. ............................... 318 2,735
Brookfield Homes Corp. .................... 120 1,099
Cavco Industries, Inc.*.................... 88 2,995
Champion Enterprises, Inc.*................ 1,022 1,911
CSS Industries, Inc. ...................... 100 2,220
</Table>
See Notes to Financial Statements.
ANNUAL REPORT 51
RYDEX 2x RUSSELL 2000 ETF
SCHEDULE OF INVESTMENTS (continued) October 31, 2008
- --------------------------------------------------------------------------------
<Table>
<Caption>
MARKET
SHARES VALUE
- -------------------------------------------------------------------------
COMMON STOCKS (CONTINUED)
Ethan Allen Interiors, Inc. ............... 326 $5,832
Furniture Brands International, Inc. ...... 546 3,107
Helen of Troy, Ltd.*....................... 396 7,124
Hooker Furniture Corp. .................... 120 1,093
Hovnanian Enterprises, Inc. -- Class A*.... 614 2,634
iRobot Corp.*.............................. 238 2,456
La-Z-Boy, Inc. ............................ 674 3,896
Libbey, Inc. .............................. 190 695
M/I Homes, Inc. ........................... 188 2,559
Meritage Homes Corp.*...................... 406 5,574
National Presto Industries, Inc. .......... 60 3,975
Palm Harbor Homes, Inc.*................... 130 1,118
Russ Berrie & Co., Inc.*................... 218 589
Ryland Group, Inc. ........................ 556 10,447
Sealy Corp. ............................... 584 1,886
Skyline Corp. ............................. 90 1,946
Standard Pacific Corp.*.................... 1,636 4,663
Tempur-Pedic International, Inc. .......... 982 7,669
Tupperware Brands Corp. ................... 814 20,594
Universal Electronics, Inc.*............... 188 3,972
------------
TOTAL HOUSEHOLD DURABLES 111,597
------------
HOUSEHOLD PRODUCTS 0.1%
Central Garden & Pet Co. -- Class A*....... 852 2,709
Spectrum Brands, Inc.*..................... 505 369
WD-40 Co. ................................. 218 6,344
------------
TOTAL HOUSEHOLD PRODUCTS 9,422
------------
INDEPENDENT POWER PRODUCERS & ENERGY TRADERS 0.2%
Black Hills Corp. ......................... 506 12,777
Ormat Technologies, Inc. .................. 238 5,750
Synthesis Energy Systems, Inc.*............ 336 739
U S Geothermal, Inc.*...................... 814 684
------------
TOTAL INDEPENDENT POWER PRODUCERS & ENERGY TRADERS 19,950
------------
INDUSTRIAL CONGLOMERATES 0.2%
China Direct, Inc.*........................ 90 228
Otter Tail Corp. .......................... 466 10,942
Raven Industries, Inc. .................... 208 6,695
Standex International Corp. ............... 168 4,336
Tredegar Corp. ............................ 318 4,681
United Capital Corp.*...................... 20 445
------------
TOTAL INDUSTRIAL CONGLOMERATES 27,327
------------
INSURANCE 3.1%
Ambac Financial Group, Inc. ............... 3,786 10,146
AmCOMP, Inc.*.............................. 168 2,039
American Equity Investment Life Holding
Co. .................................... 722 3,263
American Physicians Capital, Inc. ......... 110 4,500
American Safety Insurance Holdings Ltd.*... 138 1,428
Amerisafe, Inc.*........................... 248 4,275
Amtrust Financial Services, Inc. .......... 208 2,043
Argo Group International Holdings, Ltd.*... 406 12,951
Aspen Insurance Holdings, Ltd. ............ 1,130 25,945
Assured Guaranty, Ltd. .................... 734 8,243
Baldwin & Lyons, Inc. -- Class B........... 110 2,001
Castlepoint Holdings, Ltd. ................ 438 3,951
Citizens, Inc.*............................ 496 4,211
CNA Surety Corp.*.......................... 218 3,019
Crawford & Co. -- Class B*................. 318 4,611
Delphi Financial Group -- Class A.......... 546 8,599
Donegal Group, Inc. -- Class A............. 158 2,588
eHealth, Inc.*............................. 328 4,172
EMC Insurance Group, Inc. ................. 78 1,908
Employers Holdings, Inc. .................. 654 8,345
Enstar Group, Ltd.*........................ 70 5,330
FBL Financial Group, Inc. -- Class A....... 168 2,933
First Acceptance Corp.*.................... 228 695
First Mercury Financial Corp.*............. 188 2,028
Flagstone Reinsurance Holdings, Ltd. ...... 396 4,194
Fpic Insurance Group, Inc.*................ 110 4,924
Greenlight Capital Re, Ltd.*............... 378 4,733
Hallmark Financial Services*............... 78 507
Harleysville Group, Inc. .................. 170 5,369
Hilltop Holdings, Inc.*.................... 594 5,584
Horace Mann Educators Corp. ............... 536 4,267
Independence Holding Co. .................. 88 575
Infinity Property & Casualty Corp. ........ 198 7,884
IPC Holdings, Ltd. ........................ 664 18,333
Kansas City Life Insurance Co. ............ 60 2,865
LandAmerica Financial Group, Inc. ......... 208 2,049
Maiden Holdings Ltd. ...................... 644 2,911
Max Capital Group, Ltd. ................... 744 11,867
Meadowbrook Insurance Group, Inc. ......... 734 3,868
Montpelier Re Holdings, Ltd. .............. 1,230 17,601
National Financial Partners Corp. ......... 524 3,490
National Interstate Corp. ................. 80 1,400
National Western Life Insurance
Co. -- Class A.......................... 30 5,663
Navigators Group, Inc.*.................... 178 8,991
NYMAGIC, Inc. ............................. 60 1,047
Odyssey Re Holdings Corp. ................. 318 12,542
Phoenix Cos., Inc. ........................ 1,508 9,757
Platinum Underwriters Holdings, Ltd. ...... 644 20,441
PMA Capital Corp. -- Class A*.............. 416 1,922
Presidential Life Corp. ................... 288 2,701
ProAssurance Corp.*........................ 426 23,409
RLI Corp. ................................. 248 14,233
Safety Insurance Group, Inc. .............. 218 8,282
SeaBright Insurance Holdings, Inc.*........ 278 2,908
Selective Insurance Group, Inc. ........... 704 16,720
State Auto Financial Corp. ................ 188 4,952
Stewart Information Services Corp. ........ 228 3,785
Tower Group, Inc. ......................... 268 5,636
United America Indemnity, Ltd. -- Class
A*...................................... 246 2,947
United Fire & Casualty Co. ................ 298 6,905
Validus Holdings, Ltd. .................... 852 15,114
Zenith National Insurance Corp. ........... 486 15,970
------------
TOTAL INSURANCE 415,570
------------
INTERNET & CATALOG RETAIL 0.3%
1-800-FLOWERS.COM, Inc. -- Class A*........ 346 1,851
Bidz.com, Inc.*............................ 78 526
Blue Nile, Inc.*........................... 178 5,443
Drugstore.Com*............................. 1,100 1,958
Gaiam, Inc. -- Class A*.................... 238 1,952
NetFlix, Inc.*............................. 534 13,222
NutriSystem, Inc. ......................... 406 5,745
Orbitz Worldwide, Inc.*.................... 486 1,638
Overstock.com, Inc.*....................... 208 2,581
PetMed Express, Inc.*...................... 316 5,581
Shutterfly, Inc.*.......................... 258 1,968
Stamps.com, Inc.*.......................... 187 1,825
------------
TOTAL INTERNET & CATALOG RETAIL 44,290
------------
</Table>
See Notes to Financial Statements.
ANNUAL REPORT 52
RYDEX 2x RUSSELL 2000 ETF
SCHEDULE OF INVESTMENTS (continued) October 31, 2008
- --------------------------------------------------------------------------------
<Table>
<Caption>
MARKET
SHARES VALUE
- -------------------------------------------------------------------------
COMMON STOCKS (CONTINUED)
INTERNET SOFTWARE & SERVICES 1.5%
Ariba, Inc.*............................... 1,130 $12,091
Art Technology Group, Inc.*................ 1,696 3,307
AsiaInfo Holdings, Inc.*................... 456 5,011
Bankrate, Inc.*............................ 168 5,529
Chordiant Software, Inc.*.................. 396 1,315
comScore, Inc.*............................ 238 2,904
Constant Contact, Inc.*.................... 268 3,219
DealerTrack Holdings, Inc.*................ 564 6,052
Dice Holdings, Inc.*....................... 208 844
Digital River, Inc.*....................... 486 12,043
DivX, Inc.*................................ 356 2,485
EarthLink, Inc.*........................... 1,448 9,991
GSI Commerce, Inc.*........................ 308 3,188
HSW International, Inc.*................... 366 337
InfoSpace, Inc. ........................... 456 3,908
Internap Network Services Corp.*........... 664 1,899
Internet Brands, Inc. -- Class A*.......... 288 1,869
Internet Capital Group, Inc.*.............. 506 2,894
Interwoven, Inc.*.......................... 604 7,616
j2 Global Communications, Inc.*............ 584 9,414
Keynote Systems, Inc.*..................... 180 1,764
Knot, Inc.(The)*........................... 376 2,594
Limelight Networks, Inc.*.................. 378 900
Liquidity Services, Inc.*.................. 190 1,596
LoopNet, Inc.*............................. 386 2,922
Marchex, Inc. -- Class B................... 316 2,427
MercadoLibre, Inc.*........................ 336 4,593
ModusLink Global Solutions, Inc.*.......... 615 3,419
Move, Inc.*................................ 1,694 2,846
NIC, Inc. ................................. 526 2,825
Omniture, Inc.*............................ 822 9,453
Perficient, Inc.*.......................... 426 2,339
Rackspace Hosting, Inc.*................... 228 1,297
RealNetworks, Inc.*........................ 1,190 5,093
S1 Corp.*.................................. 654 4,101
SAVVIS, Inc.*.............................. 496 4,266
SonicWALL, Inc.*........................... 704 3,154
SupportSoft, Inc.*......................... 614 1,535
Switch & Data Facilities Co., Inc.*........ 268 2,524
TechTarget, Inc.*.......................... 188 919
Terremark Worldwide, Inc.*................. 694 3,130
TheStreet.com, Inc. ....................... 238 938
United Online, Inc. ....................... 1,020 7,548
ValueClick, Inc.*.......................... 1,140 8,436
Vignette Corp.*............................ 326 2,647
VistaPrint, Ltd.*.......................... 584 9,969
Vocus, Inc.*............................... 208 3,501
Web.com Group, Inc.*....................... 366 1,797
Websense, Inc.*............................ 594 11,595
------------
TOTAL INTERNET SOFTWARE & SERVICES 206,044
------------
IT SERVICES 1.5%
Acxiom Corp. .............................. 804 6,319
BearingPoint, Inc.*........................ 2,743 604
CACI International, Inc. -- Class A*....... 396 16,307
Cass Information Systems, Inc. ............ 90 3,128
China Information Security Technology,
Inc*.................................... 298 1,183
Ciber, Inc.*............................... 704 3,802
CSG Systems International, Inc.*........... 456 7,583
Cybersource Corp.*......................... 912 11,081
Euronet Worldwide, Inc.*................... 624 7,438
ExlService Holdings, Inc.*................. 188 1,372
Forrester Research, Inc.*.................. 208 5,834
Gartner, Inc.*............................. 782 14,389
Gevity HR, Inc. ........................... 308 1,050
Global Cash Access Holdings, Inc.*......... 526 1,483
Hackett Group Inc (The)*................... 544 1,621
Heartland Payment Systems, Inc. ........... 318 5,536
iGate Corp.*............................... 288 1,956
infoGROUP, Inc. ........................... 436 1,945
Integral Systems, Inc.*.................... 228 5,602
Mantech International Corp. -- Class A*.... 268 14,456
MAXIMUS, Inc. ............................. 248 7,921
NCI, Inc. -- Class A*...................... 88 2,094
Ness Technologies, Inc.*................... 516 3,813
Online Resources Corp.*.................... 378 1,323
Perot Systems Corp. -- Class A*............ 1,140 16,405
RightNow Technologies, Inc.*............... 366 2,408
Safeguard Scientifics, Inc.*............... 1,534 1,212
Sapient Corp.*............................. 1,160 6,368
SI International, Inc.*.................... 178 5,126
SRA International, Inc. -- Class A*........ 564 10,423
Syntel, Inc. .............................. 168 4,178
TeleTech Holdings, Inc.*................... 516 4,665
TNS, Inc.*................................. 326 4,623
VeriFone Holdings, Inc.*................... 902 10,247
Virtusa Corp.*............................. 118 650
Wright Express Corp.*...................... 514 7,037
------------
TOTAL IT SERVICES 201,182
------------
LEISURE EQUIPMENT & PRODUCTS 0.4%
Brunswick Corp. ........................... 1,158 4,018
Callaway Golf Co. ......................... 872 9,121
JAKKS Pacific, Inc.*....................... 358 8,009
Leapfrog Enterprises, Inc.*................ 436 2,943
Marine Products Corp. ..................... 130 805
Nautilus, Inc.*............................ 298 727
Polaris Industries, Inc. .................. 436 14,680
Pool Corp. ................................ 634 11,038
RC2 Corp.*................................. 228 2,896
Smith & Wesson Holding Corp.*.............. 496 1,141
Steinway Musical Instruments*.............. 90 2,003
------------
TOTAL LEISURE EQUIPMENT & PRODUCTS 57,381
------------
LIFE SCIENCES TOOLS & SERVICES 1.0%
Accelrys, Inc.*............................ 356 1,705
Affymetrix, Inc.*.......................... 912 3,365
Albany Molecular Research, Inc.*........... 308 3,896
AMAG Pharmaceuticals, Inc.*................ 228 6,972
Bio-Rad Laboratories, Inc. -- Class A*..... 248 21,174
Bruker Corp.*.............................. 664 2,716
Caliper Life Sciences, Inc.*............... 634 888
Cambrex Corp.*............................. 386 1,737
Clinical Data, Inc.*....................... 138 1,518
Dionex Corp.*.............................. 238 12,811
Enzo Biochem, Inc.*........................ 426 2,458
eResearchTechnology, Inc.*................. 574 3,708
Exelixis, Inc.*............................ 1,388 4,775
Kendle International, Inc.*................ 170 3,072
Life Sciences Research, Inc.*.............. 108 1,991
Luminex Corp.*............................. 544 10,145
Medivation, Inc.*.......................... 336 6,307
Nektar Therapeutics*....................... 1,220 6,747
</Table>
See Notes to Financial Statements.
ANNUAL REPORT 53
RYDEX 2x RUSSELL 2000 ETF
SCHEDULE OF INVESTMENTS (continued) October 31, 2008
- --------------------------------------------------------------------------------
<Table>
<Caption>
MARKET
SHARES VALUE
- -------------------------------------------------------------------------
COMMON STOCKS (CONTINUED)
Parexel International Corp.*............... 744 $7,738
PharmaNet Development Group, Inc.*......... 258 413
Sequenom, Inc.*............................ 744 13,392
Varian, Inc.*.............................. 388 14,298
------------
TOTAL LIFE SCIENCES TOOLS & SERVICES 131,826
------------
MACHINERY 2.5%
3D Systems Corp.*.......................... 238 2,587
Accuride Corp.*............................ 445 142
Actuant Corp. -- Class A................... 734 13,161
Alamo Group, Inc. ......................... 80 1,006
Albany International Corp. -- Class A...... 388 5,649
Altra Holdings, Inc.*...................... 348 3,111
American Railcar Industries, Inc. ......... 120 1,334
Ampco-Pittsburgh Corp. .................... 110 2,600
Astec Industries, Inc.*.................... 238 6,050
Badger Meter, Inc. ........................ 190 4,788
Barnes Group, Inc. ........................ 634 9,199
Blount International, Inc.*................ 506 4,397
Briggs & Stratton Corp. ................... 654 10,307
Cascade Corp. ............................. 120 3,961
Chart Industries, Inc.*.................... 376 5,121
China Fire & Security Group, Inc.*......... 188 1,617
CIRCOR International, Inc. ................ 218 6,682
CLARCOR, Inc. ............................. 664 23,499
Colfax Corp.*.............................. 286 2,437
Columbus McKinnon Corp.*................... 248 3,482
Commercial Vehicle Group, Inc.*............ 286 380
Dynamic Materials Corp. ................... 168 3,192
Energy Recovery, Inc.*..................... 198 1,148
EnPro Industries, Inc.*.................... 268 5,952
ESCO Technologies, Inc.*................... 346 11,937
Federal Signal Corp. ...................... 634 5,395
Flanders Corp.*............................ 208 1,290
Flow International Corp.*.................. 496 1,905
Force Protection, Inc.*.................... 902 2,517
FreightCar America, Inc. .................. 158 4,125
Gorman-Rupp Co. ........................... 188 5,913
Graham Corp. .............................. 130 2,730
Greenbrier Cos., Inc. ..................... 218 1,798
Hurco Cos., Inc.*.......................... 88 1,980
K-Tron International, Inc.*................ 30 2,820
Kadant, Inc.*.............................. 188 3,091
Kaydon Corp. .............................. 366 12,228
Key Technology, Inc.*...................... 70 1,133
LB Foster Co. -- Class A*.................. 148 4,070
Lindsay Corp. ............................. 158 7,518
Lydall, Inc.*.............................. 218 1,450
Met-Pro Corp. ............................. 198 2,313
Middleby Corp.*............................ 228 9,209
Mueller Industries, Inc. .................. 486 11,115
Mueller Water Products, Inc. -- Class A.... 1,516 10,612
NACCO Industries, Inc. -- Class A.......... 80 4,929
NN, Inc. .................................. 208 1,500
Nordson Corp. ............................. 446 16,471
Omega Flex, Inc. .......................... 40 856
PMFG, Inc.*................................ 168 1,824
RBC Bearings, Inc.*........................ 288 6,834
Robbins & Myers, Inc. ..................... 368 7,507
Sauer-Danfoss, Inc. ....................... 148 1,517
Sun Hydraulics Corp. ...................... 158 3,309
Tecumseh Products Co. -- Class A*.......... 218 4,037
Tennant Co. ............................... 218 5,470
Thermadyne Holdings Corp.*................. 178 1,604
Titan International, Inc. ................. 456 5,271
Titan Machinery, Inc.*..................... 98 1,213
Trimas Corp.*.............................. 190 751
TurboChef Technologies, Inc.*.............. 308 1,549
Twin Disc, Inc. ........................... 118 915
Wabash National Corp. ..................... 406 2,452
Wabtec Corp. .............................. 636 25,287
Watts Water Technologies, Inc. -- Class A.. 386 10,202
Xerium Technologies, Inc. ................. 276 1,074
------------
TOTAL MACHINERY 331,523
------------
MARINE 0.2%
American Commercial Lines, Inc.*........... 475 3,529
Eagle Bulk Shipping, Inc. ................. 614 6,122
Genco Shipping & Trading, Ltd. ............ 318 6,631
Horizon Lines, Inc. -- Class A............. 396 1,857
International Shipholding Corp. ........... 80 1,967
TBS International, Ltd.*................... 138 1,181
Ultrapetrol Bahamas, Ltd.*................. 328 1,358
------------
TOTAL MARINE 22,645
------------
MEDIA 0.9%
AH Belo Corp. -- Class A................... 268 887
Arbitron, Inc. ............................ 358 11,664
Belo Corp. -- Class A...................... 1,178 2,509
Charter Communications, Inc. -- Class A*... 5,382 2,368
Cinemark Holdings, Inc. ................... 396 3,283
Citadel Broadcasting Corp.*................ 2,278 683
CKX, Inc.*................................. 694 3,081
Cox Radio, Inc. -- Class A*................ 338 1,842
Crown Media Holdings, Inc. -- Class A*..... 140 435
Cumulus Media, Inc. -- Class A*............ 348 365
Dolan Media Co.*........................... 336 1,378
Entercom Communications Corp. -- Class A... 327 226
Entravision Communications Corp. -- Class
A*...................................... 777 1,469
Fisher Communications, Inc. ............... 90 3,321
Global Sources, Ltd.*...................... 228 1,801
Global Traffic Network, Inc.*.............. 158 845
Gray Television, Inc. ..................... 535 267
Harte-Hanks, Inc. ......................... 486 3,412
Idearc, Inc. .............................. 1,852 704
Interactive Data Corp. .................... 486 11,460
Journal Communications, Inc. -- Class A.... 556 1,390
Knology, Inc.*............................. 376 1,820
Lee Enterprises, Inc. ..................... 594 1,485
LIN TV Corp. -- Class A*................... 356 609
Live Nation, Inc.*......................... 1,000 11,250
Martha Stewart Living Omnimedia,
Inc. -- Class A*........................ 336 1,757
Marvel Entertainment, Inc.*................ 644 20,730
McClatchy Co. -- Class A................... 752 2,309
Media General, Inc. -- Class A............. 298 2,274
Mediacom Communications Corp. -- Class A*.. 516 2,291
National CineMedia, Inc. .................. 556 4,504
Outdoor Channel Holdings, Inc.*............ 208 1,664
Playboy Enterprises, Inc. -- Class B*...... 278 687
Primedia, Inc. ............................ 317 396
RCN Corp.*................................. 496 3,199
RH Donnelley Corp.*........................ 870 739
RHI Entertainment, Inc.*................... 178 2,385
</Table>
See Notes to Financial Statements.
ANNUAL REPORT 54
RYDEX 2x RUSSELL 2000 ETF
SCHEDULE OF INVESTMENTS (continued) October 31, 2008
- --------------------------------------------------------------------------------
<Table>
<Caption>
MARKET
SHARES VALUE
- -------------------------------------------------------------------------
COMMON STOCKS (CONTINUED)
Scholastic Corp. .......................... 318 $5,905
Sinclair Broadcast Group, Inc. -- Class A.. 694 2,242
Valassis Communications, Inc.*............. 634 2,815
Value Line, Inc. .......................... 20 771
Westwood One, Inc.*........................ 892 259
World Wrestling Entertainment,
Inc. -- Class A......................... 278 3,959
------------
TOTAL MEDIA 127,440
------------
METALS & MINING 0.7%
Allied Nevada Gold Corp.*.................. 594 2,049
AM Castle & Co. ........................... 218 2,653
AMCOL International Corp. ................. 338 8,291
Apex Silver Mines, Ltd.*................... 774 1,029
Brush Engineered Materials, Inc.*.......... 268 3,288
China Precision Stl, Inc.*................. 228 495
Coeur d'Alene Mines Corp.*................. 6,941 4,998
Compass Minerals International, Inc. ...... 426 23,400
General Moly, Inc.*........................ 824 1,640
General Stl Hldgs, Inc.*................... 140 664
Haynes International, Inc.*................ 158 3,999
Hecla Mining Co.*.......................... 1,676 4,173
Horsehead Holding Corp.*................... 456 1,578
Kaiser Aluminum Corp. ..................... 208 6,981
Olympic Steel, Inc. ....................... 118 2,697
Royal Gold, Inc. .......................... 386 11,128
RTI International Metals, Inc.*............ 306 4,832
Stillwater Mining Co.*..................... 524 2,075
Sutor Technology Group Ltd.*............... 100 215
Universal Stainless & Alloy*............... 90 1,659
Worthington Industries, Inc. .............. 852 10,284
------------
TOTAL METALS & MINING 98,128
------------
MULTI-UTILITIES 0.3%
Avista Corp. .............................. 702 13,942
CH Energy Group, Inc. ..................... 208 8,576
PNM Resources, Inc. ....................... 1,140 11,115
------------
TOTAL MULTI-UTILITIES 33,633
------------
MULTILINE RETAIL 0.1%
99 Cents Only Stores*...................... 616 7,515
Dillard's, Inc. -- Class A................. 754 4,019
Fred's, Inc. -- Class A.................... 526 6,443
Retail Ventures, Inc.*..................... 378 779
Tuesday Morning Corp.*..................... 398 892
------------
TOTAL MULTILINE RETAIL 19,648
------------
OIL, GAS & CONSUMABLE FUELS 3.0%
Abraxas Petroleum Corp.*................... 554 1,219
Alon USA Energy, Inc. ..................... 140 1,235
American Oil & Gas, Inc.*.................. 486 875
APCO Argentina, Inc. ...................... 50 1,397
Approach Resources, Inc.*.................. 118 1,286
Arena Resources, Inc.*..................... 496 15,118
Arlington Tankers, Ltd. ................... 168 1,633
Atlas America, Inc. ....................... 456 10,447
ATP Oil & Gas Corp.*....................... 366 4,407
Aventine Renewable Energy Holdings, Inc.*.. 386 753
Berry Petroleum Co. -- Class A............. 564 13,141
Bill Barrett Corp.*........................ 486 9,914
BMB Munai, Inc.*........................... 526 1,310
BPZ Resources, Inc.*....................... 792 7,841
Brigham Exploration Co.*................... 606 4,751
Callon Petroleum Co.*...................... 278 2,869
Cano Petroleum, Inc.*...................... 624 362
Carrizo Oil & Gas, Inc.*................... 358 8,374
Cheniere Energy, Inc.*..................... 644 2,409
Clayton Williams Energy, Inc.*............. 70 3,390
Clean Energy Fuels Corp.*.................. 288 2,218
Comstock Resources, Inc.*.................. 604 29,850
Concho Resources, Inc.*.................... 732 15,555
Contango Oil & Gas Co.*.................... 170 9,350
Crosstex Energy, Inc. ..................... 534 5,452
CVR Energy, Inc.*.......................... 306 1,215
Delek US Holdings, Inc. ................... 178 995
Delta Petroleum Corp.*..................... 822 7,727
Dht Maritime, Inc. ........................ 516 2,714
Double Eagle Petroleum Co.*................ 108 872
Endeavour International Corp.*............. 1,498 1,123
Energy Partners, Ltd.*..................... 418 1,806
Energy XXI Bermuda Limtited................ 1,576 3,105
Evergreen Energy, Inc.*.................... 1,069 385
EXCO Resources, Inc.*...................... 1,972 18,123
FX Energy, Inc.*........................... 534 2,611
Gasco Energy, Inc.*........................ 1,238 990
General Maritime Corp. .................... 348 5,272
GeoGlobal Resources, Inc.*................. 504 932
GeoMet, Inc.*.............................. 246 726
Georesources, Inc.*........................ 80 1,195
GMX Resources, Inc.*....................... 218 8,229
Golar LNG, Ltd. ........................... 466 3,187
Goodrich Petroleum Corp.*.................. 298 8,272
Gran Tierra Energy, Inc.*.................. 1,368 3,461
GreenHunter Energy, Inc.*.................. 58 519
Gulfport Energy Corp.*..................... 346 2,439
Harvest Natural Resources, Inc.*........... 466 3,956
Houston American Energy Corp. ............. 198 790
International Coal Group, Inc.*............ 1,676 7,844
James River Coal Co.*...................... 353 6,785
Knightsbridge Tankers, Ltd. ............... 228 4,083
McMoRan Exploration Co.*................... 792 11,238
Meridian Resource Corp.*................... 980 1,166
National Coal Corp.*....................... 366 1,570
Nordic American Tanker Shipping, Ltd. ..... 456 13,520
Northern Oil And Gas, Inc.*................ 278 1,515
Oilsands Quest, Inc.*...................... 2,318 3,825
Pacific Ethanol, Inc.*..................... 584 526
Panhandle Oil and Gas, Inc. -- Class A..... 98 2,450
Parallel Petroleum Corp.*.................. 546 2,189
Penn Virginia Corp. ....................... 546 20,295
Petroleum Development Corp.*............... 198 4,101
Petroquest Energy, Inc.*................... 574 5,711
PrimeEnergy Corp.*......................... 10 600
Quest Resource Corp.*...................... 366 156
RAM Energy Resources, Inc.*................ 614 755
Rentech, Inc.*............................. 2,190 1,621
Rex Energy Corp.*.......................... 218 1,478
Rosetta Resources, Inc.*................... 674 7,111
Ship Finance International, Ltd. .......... 556 7,589
Stone Energy Corp.*........................ 416 12,621
Swift Energy Co.*.......................... 406 13,024
Teekay Tankers Ltd. ....................... 178 2,163
Toreador Resources Corp.*.................. 220 1,628
Tri-Valley Corp.*.......................... 298 1,415
TXCO Resources, Inc.*...................... 466 2,442
</Table>
See Notes to Financial Statements.
ANNUAL REPORT 55
RYDEX 2x RUSSELL 2000 ETF
SCHEDULE OF INVESTMENTS (continued) October 31, 2008
- --------------------------------------------------------------------------------
<Table>
<Caption>
MARKET
SHARES VALUE
- -------------------------------------------------------------------------
COMMON STOCKS (CONTINUED)
Uranium Resources, Inc.*................... 646 $607
USEC, Inc.*................................ 1,466 6,055
Vaalco Energy, Inc.*....................... 782 4,145
Venoco, Inc.*.............................. 268 1,134
VeraSun Energy Corp.*...................... 1,296 661
Warren Resources, Inc.*.................... 772 4,084
Western Refining, Inc. .................... 396 2,641
Westmoreland Coal Co.*..................... 128 1,261
World Fuel Services Corp. ................. 378 8,101
------------
TOTAL OIL, GAS & CONSUMABLE FUELS 403,910
------------
PAPER & FOREST PRODUCTS 0.3%
AbitibiBowater, Inc.*...................... 704 1,373
Buckeye Technologies, Inc.*................ 516 3,039
Deltic Timber Corp. ....................... 138 6,286
Glatfelter................................. 596 6,145
Kapstone Paper and Packaging Corp.*........ 238 1,140
Louisiana-Pacific Corp. ................... 1,358 6,518
Mercer International, Inc.*................ 396 1,109
Neenah Paper, Inc. ........................ 190 1,716
Schweitzer-Mauduit International, Inc. .... 208 3,478
Verso Paper Corp. ......................... 188 291
Wausau Paper Corp. ........................ 584 5,408
------------
TOTAL PAPER & FOREST PRODUCTS 36,503
------------
PERSONAL PRODUCTS 0.4%
American Oriental Bioengineering, Inc.*.... 814 4,973
Chattem, Inc.*............................. 228 17,253
China Sky One Med, Inc.*................... 98 880
Elizabeth Arden, Inc.*..................... 318 5,498
Inter Parfums, Inc. ....................... 188 2,192
Mannatech, Inc. ........................... 208 834
Nu Skin Enterprises, Inc. -- Class A....... 654 8,430
Prestige Brands Holdings, Inc.*............ 446 3,082
Schiff Nutrition International, Inc.*...... 120 707
USANA Health Sciences, Inc.*............... 90 3,415
------------
TOTAL PERSONAL PRODUCTS 47,264
------------
PHARMACEUTICALS 1.2%
Acura Pharmaceuticals, Inc.*............... 108 621
Adolor Corp.*.............................. 606 1,909
Akorn, Inc.*............................... 754 2,345
Alexza Pharmaceuticals, Inc.*.............. 316 901
Alpharma, Inc. -- Class A*................. 554 17,346
Ardea Biosciences, Inc.*................... 158 1,604
Auxilium Pharmaceuticals, Inc.*............ 544 10,689
Biodel, Inc.*.............................. 140 311
BioForm Medical, Inc.*..................... 288 590
BioMimetic Therapeutics, Inc.*............. 178 1,456
Cadence Pharmaceuticals, Inc.*............. 268 1,750
Caraco Pharmaceutical Laboratories, Ltd.*.. 148 1,505
Columbia Laboratories, Inc.*............... 616 967
Cypress Bioscience, Inc.*.................. 496 2,698
Depomed, Inc.*............................. 634 1,369
Discovery Laboratories, Inc.*.............. 1,278 2,339
Durect Corp.*.............................. 1,080 4,439
Inspire Pharmaceuticals, Inc.*............. 556 2,035
Javelin Pharmaceuticals, Inc.*............. 646 917
Jazz Pharmaceuticals, Inc.*................ 100 298
KV Pharmaceutical Co. -- Class A*.......... 436 7,412
MAP Pharmaceuticals, Inc.*................. 100 416
Medicines Co.(The)*........................ 684 11,922
Medicis Pharmaceutical Corp. -- Class A.... 744 10,617
MiddleBrook Pharmaceuticals, Inc.*......... 476 643
Noven Pharmaceuticals, Inc.*............... 328 3,690
Obagi Medical Products, Inc.*.............. 238 1,980
Optimer Pharmaceuticals, Inc.*............. 338 1,403
Pain Therapeutics, Inc.*................... 456 4,168
Par Pharmaceutical Cos., Inc.*............. 456 4,560
Pozen, Inc.*............................... 346 2,135
Questcor Pharmaceuticals, Inc.*............ 714 5,526
Salix Pharmaceuticals Ltd.*................ 634 5,833
Sucampo Pharmaceuticals, Inc. -- Class A*.. 120 987
Valeant Pharmaceuticals International*..... 922 17,306
Viropharma, Inc.*.......................... 922 11,562
Vivus, Inc.*............................... 912 5,554
XenoPort, Inc.*............................ 328 13,648
------------
TOTAL PHARMACEUTICALS 165,451
------------
REAL ESTATE INVESTMENT TRUSTS (REITS) 4.6%
Acadia Realty Trust........................ 426 7,698
Agree Realty Corp. ........................ 100 2,007
Alexander's, Inc. ......................... 30 10,500
American Campus Communities, Inc. ......... 556 14,445
American Capital Agency Corp. ............. 130 2,418
Anthracite Capital, Inc. .................. 774 3,359
Anworth Mortgage Asset Corp. .............. 1,090 6,387
Arbor Realty Trust, Inc. .................. 188 677
Ashford Hospitality Trust, Inc. ........... 1,430 2,317
Associated Estates Realty Corp. ........... 188 1,534
BioMed Realty Trust, Inc. ................. 1,042 14,640
Capital Trust, Inc. -- Class A............. 218 1,722
CapLease, Inc. ............................ 594 4,010
Capstead Mortgage Corp. ................... 744 7,477
Care Investment Trust, Inc. ............... 178 1,990
Cedar Shopping Centers, Inc. .............. 506 4,837
Chimera Investment Corp. .................. 446 1,284
Cogdell Spencer, Inc. ..................... 158 1,896
Colonial Properties Trust.................. 624 6,577
Corporate Office Properties Trust.......... 548 17,037
Cousins Properties, Inc. .................. 574 8,312
DCT Industrial Trust, Inc. ................ 2,260 11,142
DiamondRock Hospitality Co. ............... 1,250 6,475
DuPont Fabros Technology, Inc. ............ 158 984
EastGroup Properties, Inc. ................ 328 10,981
Education Realty Trust, Inc. .............. 376 1,598
Entertainment Properties Trust............. 431 16,141
Equity Lifestyle Properties, Inc. ......... 268 11,253
Equity One, Inc. .......................... 426 7,442
Extra Space Storage, Inc. ................. 1,050 12,086
FelCor Lodging Trust, Inc. ................ 832 2,504
First Industrial Realty Trust, Inc. ....... 584 6,039
First Potomac Realty Trust................. 351 4,310
Franklin Street Properties Corp. .......... 782 9,251
Friedman, Billings, Ramsey Group,
Inc. -- Class A*........................ 1,862 1,266
Getty Realty Corp. ........................ 228 4,439
Glimcher Realty Trust...................... 496 2,599
Gramercy Capital Corp. .................... 546 1,452
Hatteras Financial Corp. .................. 150 3,270
Healthcare Realty Trust, Inc. ............. 774 19,776
Hersha Hospitality Trust................... 634 2,669
Highwoods Properties, Inc. ................ 842 20,898
Home Properties, Inc. ..................... 416 16,844
</Table>
See Notes to Financial Statements.
ANNUAL REPORT 56
RYDEX 2x RUSSELL 2000 ETF
SCHEDULE OF INVESTMENTS (continued) October 31, 2008
- --------------------------------------------------------------------------------
<Table>
<Caption>
MARKET
SHARES VALUE
- -------------------------------------------------------------------------
COMMON STOCKS (CONTINUED)
Inland Real Estate Corp. .................. 754 $8,641
Investors Real Estate Trust................ 754 7,450
JER Investors Trust, Inc. ................. 298 969
Kite Realty Group Trust.................... 268 1,629
LaSalle Hotel Properties................... 526 7,406
Lexington Realty Trust..................... 684 5,493
LTC Properties, Inc. ...................... 306 7,396
Maguire Properties, Inc. .................. 506 1,796
Medical Properties Trust, Inc. ............ 872 6,435
MFA Mortgage Investments, Inc. ............ 2,607 14,339
Mid-America Apartment Communities, Inc. ... 346 12,193
Mission West Properties.................... 258 2,234
Monmouth Real Estate Investment
Corp. -- Class A........................ 258 1,883
National Health Investors, Inc. ........... 296 8,862
National Retail Properties, Inc. .......... 1,020 18,187
Newcastle Investment Corp. ................ 694 2,811
NorthStar Realty Finance Corp. ............ 734 4,221
Omega Healthcare Investors, Inc. .......... 1,080 16,276
One Liberty Properties, Inc. .............. 108 1,281
Parkway Properties, Inc. .................. 198 3,416
Pennsylvania Real Estate Investment Trust.. 466 5,895
Post Properties, Inc. ..................... 584 13,035
Potlatch Corp. ............................ 516 17,136
PS Business Parks, Inc. ................... 198 8,963
RAIT Financial Trust....................... 814 3,109
Ramco-Gershenson Properties................ 208 2,741
Realty Income Corp. ....................... 1,338 30,935
Redwood Trust, Inc. ....................... 436 6,645
Resource Capital Corp. .................... 278 1,376
Saul Centers, Inc. ........................ 128 4,684
Senior Housing Properties Trust............ 1,508 28,908
Sovran Self Storage, Inc. ................. 288 9,346
Strategic Hotels & Resorts, Inc. .......... 982 4,861
Sun Communities, Inc. ..................... 218 3,279
Sunstone Hotel Investors, Inc. ............ 674 4,415
Tanger Factory Outlet Centers.............. 416 15,047
U-Store-It Trust........................... 654 4,486
Universal Health Realty Income Trust....... 158 5,484
Urstadt Biddle Properties, Inc- Class A.... 276 4,521
Washington Real Estate Investment Trust.... 687 20,596
Winthrop Realty Trust...................... 734 1,879
------------
TOTAL REAL ESTATE INVESTMENT TRUSTS (REITS) 624,802
------------
REAL ESTATE MANAGEMENT & DEVELOPMENT 0.2%
Avatar Holdings, Inc.*..................... 80 2,716
Consolidated-Tomoka Land Co. .............. 70 2,583
Forestar Real Estate Group, Inc.*.......... 466 4,077
FX Real Estate and Entertainment, Inc.*.... 138 95
Grubb & Ellis Co. ......................... 456 698
Maui Land & Pineapple Co., Inc.*........... 60 930
Meruelo Maddux Properties, Inc.*........... 564 553
Stratus Properties, Inc.*.................. 80 1,960
Tejon Ranch Co.*........................... 148 4,301
Thomas Properties Group, Inc. ............. 316 2,196
------------
TOTAL REAL ESTATE MANAGEMENT & DEVELOPMENT 20,109
------------
ROAD & RAIL 0.7%
Amerco, Inc.*.............................. 120 5,431
Arkansas Best Corp. ....................... 298 8,699
Celadon Group, Inc.*....................... 288 3,079
Dollar Thrifty Automotive Group*........... 286 463
Genesee & Wyoming, Inc. -- Class A*........ 406 13,540
Heartland Express, Inc. ................... 734 11,260
Knight Transportation, Inc. ............... 754 11,989
Marten Transport, Ltd.*.................... 198 3,639
Old Dominion Freight Line, Inc.*........... 366 11,104
Patriot Transportation Holding, Inc.*...... 20 1,400
Saia, Inc.*................................ 178 1,889
Universal Truckload Services, Inc.*........ 80 1,222
Werner Enterprises, Inc. .................. 564 11,066
YRC Worldwide, Inc.*....................... 754 3,453
------------
TOTAL ROAD & RAIL 88,234
------------
SEMICONDUCTORS & SEMICONDUCTOR EQUIPMENT 2.5%
Actel Corp.*............................... 336 4,062
Advanced Analogic Technologies, Inc.*...... 604 1,818
Advanced Energy Industries, Inc.*.......... 436 4,652
Amkor Technology, Inc.*.................... 1,438 5,838
Anadigics, Inc.*........................... 824 1,450
Applied Micro Circuits Corp.*.............. 852 4,354
Asyst Technologies, Inc.*.................. 654 412
Atheros Communications, Inc.*.............. 782 14,053
ATMI, Inc.*................................ 426 5,180
AuthenTec, Inc.*........................... 328 617
Axcelis Technologies, Inc.*................ 1,348 593
Brooks Automation, Inc.*................... 834 5,713
Cabot Microelectronics Corp.*.............. 308 8,849
Cavium Networks, Inc.*..................... 398 5,071
Ceva, Inc.*................................ 268 2,278
Cirrus Logic, Inc.*........................ 853 4,896
Cohu, Inc. ................................ 306 4,327
Cymer, Inc.*............................... 398 9,739
Diodes, Inc.*.............................. 378 3,735
DSP Group, Inc.*........................... 318 2,003
Eagle Test Systems, Inc.*.................. 180 2,725
Emcore Corp.*.............................. 970 3,453
Entegris, Inc.*............................ 1,506 4,051
Entropic Communications, Inc.*............. 120 127
Exar Corp.*................................ 496 3,313
FEI Co.*................................... 485 10,190
Formfactor, Inc.*.......................... 644 11,219
Hittite Microwave Corp.*................... 258 8,455
IXYS Corp. ................................ 318 2,525
Kopin Corp.*............................... 912 2,116
Kulicke & Soffa Industries, Inc.*.......... 704 2,070
Lattice Semiconductor Corp.*............... 1,517 2,852
LTX -- Credence Corp.*..................... 1,654 1,025
Mattson Technology, Inc.*.................. 654 1,713
Micrel, Inc. .............................. 654 4,807
Microsemi Corp.*........................... 1,040 22,610
Microtune, Inc.*........................... 714 1,785
MIPS Technologies, Inc.*................... 584 1,629
MKS Instruments, Inc.*..................... 654 12,132
Monolithic Power Systems, Inc.*............ 346 5,879
Netlogic Microsystems, Inc.*............... 228 4,815
NVE Corp.*................................. 60 1,695
OmniVision Technologies, Inc.*............. 674 5,453
Pericom Semiconductor Corp.*............... 288 2,246
Photronics, Inc.*.......................... 554 382
PLX Technology, Inc.*...................... 368 1,266
PMC -- Sierra, Inc.*....................... 2,884 13,497
Power Integrations, Inc. .................. 398 8,354
RF Micro Devices, Inc.*.................... 3,470 6,905
</Table>
See Notes to Financial Statements.
ANNUAL REPORT 57
RYDEX 2x RUSSELL 2000 ETF
SCHEDULE OF INVESTMENTS (continued) October 31, 2008
- --------------------------------------------------------------------------------
<Table>
<Caption>
MARKET
SHARES VALUE
- -------------------------------------------------------------------------
COMMON STOCKS (CONTINUED)
Rubicon Technology, Inc.*.................. 178 $947
Rudolph Technologies, Inc.*................ 406 1,360
Semitool, Inc.*............................ 298 1,761
Semtech Corp.*............................. 814 9,866
Sigma Designs, Inc.*....................... 348 3,859
Silicon Image, Inc.*....................... 970 4,433
Silicon Storage Technology, Inc.*.......... 1,100 3,465
Sirf Technology Holdings, Inc.*............ 802 754
Skyworks Solutions, Inc.*.................. 2,150 15,330
Spansion, Inc. -- Class A*................. 1,684 1,044
Standard Microsystems Corp.*............... 298 5,367
Supertex, Inc.*............................ 148 3,570
Techwell, Inc.*............................ 200 1,752
Tessera Technologies, Inc.*................ 636 10,990
Transmeta Corp.*........................... 158 2,583
Trident Microsystems, Inc.*................ 804 1,455
TriQuint Semiconductor, Inc.*.............. 1,892 8,476
Ultra Clean Holdings*...................... 258 779
Ultratech, Inc.*........................... 308 4,645
Veeco Instruments, Inc.*................... 418 3,235
Volterra Semiconductor Corp.*.............. 336 3,172
Zoran Corp.*............................... 684 5,568
------------
TOTAL SEMICONDUCTORS & SEMICONDUCTOR EQUIPMENT 333,340
------------
SOFTWARE 3.1%
ACI Worldwide, Inc.*....................... 456 6,247
Actuate Corp.*............................. 794 2,255
Advent Software, Inc.*..................... 218 4,085
American Software, Inc. -- Class A......... 298 1,356
ArcSight, Inc.*............................ 90 532
Blackbaud, Inc. ........................... 586 8,907
Blackboard, Inc.*.......................... 406 9,939
Bottomline Technologies, Inc.*............. 288 2,269
Callidus Software, Inc.*................... 396 1,338
Commvault Systems, Inc.*................... 564 6,035
Concur Technologies, Inc.*................. 566 14,280
Deltek, Inc.*.............................. 168 875
DemandTec, Inc.*........................... 258 1,860
Digimarc Corp.*............................ 40 400
Double-Take Software, Inc.*................ 228 1,687
Ebix, Inc.*................................ 80 2,034
Entrust, Inc.*............................. 812 1,137
Epicor Software Corp.*..................... 782 5,513
EPIQ Systems, Inc.*........................ 466 6,333
Fair Isaac Corp. .......................... 644 10,040
FalconStor Software, Inc.*................. 506 1,523
Guidance Software, Inc.*................... 120 342
i2 Technologies, Inc.*..................... 208 2,964
Informatica Corp.*......................... 1,170 16,439
Interactive Intelligence, Inc.*............ 180 1,323
Jack Henry & Associates, Inc. ............. 990 18,820
JDA Software Group, Inc.*.................. 338 4,827
Kenexa Corp.*.............................. 298 2,655
Lawson Software, Inc.*..................... 1,556 8,278
Macrovision Solutions Corp.*............... 1,090 12,077
Magma Design Automation, Inc.*............. 584 1,524
Manhattan Associates, Inc.*................ 326 5,480
Mentor Graphics Corp.*..................... 1,198 8,793
MICROS Systems, Inc.*...................... 1,072 18,256
MicroStrategy, Inc. -- Class A*............ 120 4,724
Midway Games, Inc.*........................ 148 132
Monotype Imaging Holdings, Inc.*........... 198 1,348
MSC.Software Corp.*........................ 594 5,108
Net 1 UEPS Technologies, Inc.*............. 594 8,316
Netscout Systems, Inc.*.................... 386 3,713
NetSuite, Inc.*............................ 90 888
OpenTV Corp. -- Class A*................... 1,148 1,527
Opnet Technologies, Inc.*.................. 178 2,248
Parametric Technology Corp.*............... 1,516 19,693
Pegasystems, Inc. ......................... 188 2,459
Phoenix Technologies Ltd.*................. 366 1,618
Progress Software Corp.*................... 546 12,525
PROS Holdings, Inc.*....................... 168 902
QAD, Inc. ................................. 168 857
Quality Systems, Inc. ..................... 228 8,776
Quest Software, Inc.*...................... 952 12,614
Radiant Systems, Inc.*..................... 366 1,929
Renaissance Learning, Inc. ................ 128 1,746
Secure Computing Corp.*.................... 694 3,928
Smith Micro Software, Inc.*................ 398 2,488
Solera Holdings, Inc.*..................... 684 17,025
Sonic Solutions, Inc.*..................... 288 588
Sourcefire, Inc.*.......................... 266 1,686
SPSS, Inc.*................................ 238 5,560
SuccessFactors, Inc.*...................... 318 2,541
Sybase, Inc.*.............................. 1,042 27,748
Symyx Technologies*........................ 446 1,967
Synchronoss Technologies, Inc.*............ 288 2,238
Take-Two Interactive Software, Inc. ....... 1,012 12,002
Taleo Corp. Class A*....................... 346 4,775
TeleCommunication Systems, Inc. -- Class
A*...................................... 446 3,069
THQ, Inc.*................................. 882 6,571
TIBCO Software, Inc.*...................... 2,458 12,659
Tivo, Inc.*................................ 1,348 9,261
Tyler Technologies, Inc.*.................. 504 6,849
Ultimate Software Group, Inc.*............. 326 4,346
Unica Corp.*............................... 188 972
Vasco Data Security International, Inc.*... 356 4,034
Wind River Systems, Inc.*.................. 952 8,321
------------
TOTAL SOFTWARE 420,174
------------
SPECIALTY RETAIL 2.2%
Aaron Rents, Inc. -- Class B.............. 596 14,775
Aeropostale, Inc.*......................... 882 21,353
America's Car-Mart, Inc.*.................. 130 2,123
Asbury Automotive Group, Inc. ............. 418 1,359
Bebe Stores, Inc. ......................... 506 4,483
Big 5 Sporting Goods Corp. ................ 288 1,809
Blockbuster, Inc. -- Class A*.............. 2,310 3,511
Borders Group, Inc. ....................... 794 2,692
Brown Shoe Co., Inc. ...................... 556 5,860
Buckle, Inc.(The).......................... 434 11,418
Build-A-Bear Workshop, Inc.*............... 218 1,134
Cabela's, Inc.*............................ 516 4,102
Cache, Inc.*............................... 148 531
Casual Male Retail Group, Inc.*............ 494 939
Cato Corp. -- Class A...................... 366 5,680
Charlotte Russe Holding, Inc.*............. 278 2,349
Charming Shoppes, Inc.*.................... 1,496 1,646
Chico's FAS, Inc.*......................... 2,328 7,915
Children's Place Retail Stores,
Inc.(The)*.............................. 308 10,296
Christopher & Banks Corp. ................. 466 2,433
Circuit City Stores, Inc. ................. 2,129 532
Citi Trends, Inc.*......................... 188 3,145
</Table>
See Notes to Financial Statements.
ANNUAL REPORT 58
RYDEX 2x RUSSELL 2000 ETF
SCHEDULE OF INVESTMENTS (continued) October 31, 2008
- --------------------------------------------------------------------------------
<Table>
<Caption>
MARKET
SHARES VALUE
- -------------------------------------------------------------------------
COMMON STOCKS (CONTINUED)
Coldwater Creek, Inc.*..................... 752 $2,700
Collective Brands, Inc.*................... 842 10,769
Conn's, Inc.*.............................. 128 1,734
Dress Barn, Inc.*.......................... 594 5,679
DSW, Inc. -- Class A*...................... 178 2,302
Finish Line, Inc. -- Class A............... 564 5,397
Genesco, Inc.*............................. 256 6,351
Group 1 Automotive, Inc. .................. 306 3,075
Gymboree Corp.*............................ 376 9,723
Haverty Furniture Cos., Inc. .............. 238 2,342
hhgregg, Inc.*............................. 168 921
Hibbett Sports, Inc.*...................... 376 6,697
Hot Topic, Inc.*........................... 576 3,732
J. Crew Group, Inc.*....................... 556 11,259
Jo-Ann Stores, Inc.*....................... 336 6,438
Jos. A. Bank Clothiers, Inc.*.............. 238 6,062
Lumber Liquidators, Inc.*.................. 120 1,000
MarineMax, Inc.*........................... 218 506
Men's Wearhouse, Inc.(The)................. 684 10,458
Midas, Inc.*............................... 180 2,345
Monro Muffler, Inc. ....................... 218 4,694
New York & Co, Inc.*....................... 308 869
Pacific Sunwear of California, Inc.*....... 863 2,951
PEP Boys-Manny Moe & Jack.................. 556 2,680
Pier 1 Imports, Inc.*...................... 1,170 1,615
Rent-A-Center, Inc.*....................... 882 12,877
Rex Stores Corp.*.......................... 110 977
Sally Beauty Holdings, Inc.*............... 1,240 6,299
Shoe Carnival, Inc.*....................... 118 1,653
Sonic Automotive, Inc. -- Class A.......... 346 1,775
Stage Stores, Inc. ........................ 506 3,901
Stein Mart, Inc. .......................... 336 722
Syms Corp.*................................ 88 924
Systemax, Inc. ............................ 148 2,096
Talbots, Inc. ............................. 326 3,198
Tractor Supply Co.*........................ 436 18,120
Tween Brands, Inc.*........................ 328 2,795
Ulta Salon Cosmetics & Fragrance, Inc.*.... 268 2,364
Wet Seal, Inc.(The) -- Class A*............ 1,210 3,557
Zale Corp.*................................ 426 7,268
Zumiez, Inc.*.............................. 258 2,518
------------
TOTAL SPECIALTY RETAIL 293,428
------------
TEXTILES, APPAREL & LUXURY GOODS 1.3%
American Apparel, Inc.*.................... 446 2,623
Carter's, Inc.*............................ 744 15,803
Cherokee, Inc. ............................ 100 2,065
Columbia Sportswear Co. ................... 160 5,899
Crocs, Inc.*............................... 1,100 2,761
Deckers Outdoor Corp.*..................... 170 14,426
FGX International Holdings, Ltd.*.......... 178 1,958
Fossil, Inc.*.............................. 596 10,817
Fuqi Intl, Inc.*........................... 128 1,013
G-III Apparel Group, Ltd.*................. 178 2,458
Iconix Brand Group, Inc.*.................. 762 8,298
K-Swiss, Inc. -- Class A................... 338 5,114
Kenneth Cole Productions, Inc. -- Class A.. 118 1,567
Lululemon Athletica, Inc.*................. 238 3,373
Maidenform Brands, Inc.*................... 298 3,272
Movado Group, Inc. ........................ 208 3,164
Oxford Industries, Inc. ................... 188 2,532
Perry Ellis International, Inc.*........... 158 1,547
Quiksilver, Inc.*.......................... 1,664 4,310
Skechers U.S.A., Inc. -- Class A*.......... 436 5,921
Steven Madden, Ltd.*....................... 228 4,966
Timberland Co. -- Class A*................. 634 7,671
True Religion Apparel, Inc.*............... 228 3,819
Under Armour, Inc. -- Class A*............. 436 11,336
Unifi, Inc.*............................... 594 2,851
Unifirst Corp. ............................ 188 6,134
Volcom, Inc.*.............................. 238 3,077
Warnaco Group, Inc.*....................... 604 18,005
Weyco Group, Inc. ......................... 98 2,724
Wolverine World Wide, Inc. ................ 654 15,369
------------
TOTAL TEXTILES, APPAREL & LUXURY GOODS 174,873
------------
THRIFTS & MORTGAGE FINANCE 1.4%
Abington Bancorp, Inc. .................... 326 3,374
Anchor BanCorp Wisconsin, Inc. ............ 248 1,414
Bank Mutual Corp. ......................... 634 7,310
BankFinancial Corp. ....................... 258 3,145
Beneficial Mutual Bancorp, Inc.*........... 436 5,166
Berkshire Hills Bancorp, Inc. ............. 155 4,035
Brookline Bancorp, Inc. ................... 764 8,939
Brooklyn Fed Bancorp, Inc. ................ 48 696
Clifton Savings Bancorp, Inc. ............. 138 1,504
Corus Bankshares, Inc. .................... 496 1,091
Danvers Bancorp, Inc. ..................... 238 2,923
Dime Community Bancshares.................. 308 5,143
Doral Financial Corp.*..................... 70 654
Downey Financial Corp. .................... 268 429
Encore Bancshares, Inc.*................... 88 1,469
ESSA Bancorp, Inc. ........................ 228 3,160
Federal Agricultural Mortgage
Corp. -- Class C........................ 128 742
First Financial Holdings, Inc. ............ 158 3,429
First Financial Northwest.................. 298 2,435
First Niagara Financial Group, Inc. ....... 1,548 24,412
First Place Financial Corp. ............... 228 1,566
FirstFed Financial Corp.*.................. 178 1,593
Flagstar Bancorp, Inc. .................... 684 1,300
Flushing Financial Corp. .................. 278 4,323
Fox Chase Bancorp, Inc.*................... 80 952
Guaranty Financial Group, Inc.*............ 494 1,003
Home Federal Bancorp Inc/ID................ 88 1,020
Kearny Financial Corp. .................... 238 2,744
Meridian Interstate Bancorp, Inc.*......... 138 1,339
NASB Financial, Inc. ...................... 48 1,440
NewAlliance Bancshares, Inc. .............. 1,428 19,706
Northwest Bancorp, Inc. ................... 228 6,042
OceanFirst Financial Corp. ................ 118 1,958
Ocwen Financial Corp.*..................... 466 3,122
Oritani Financial Corp.*................... 170 2,904
PMI Group, Inc.(The)....................... 1,070 2,664
Provident Financial Services, Inc. ........ 784 11,493
Provident New York Bancorp................. 526 6,333
Radian Group, Inc. ........................ 1,060 3,816
Rockville Financial, Inc. ................. 118 1,535
Roma Financial Corp. ...................... 118 1,717
TrustCo Bank Corp. ........................ 1,000 12,170
United Community Financial Corp. .......... 346 1,623
United Financial Bancorp, Inc. ............ 238 3,33224
ViewPoint Financial Group.................. 148 2,516
Waterstone Financial Inc.*................. 90 742
</Table>
See Notes to Financial Statements.
ANNUAL REPORT 59
RYDEX 2x RUSSELL 2000 ETF
SCHEDULE OF INVESTMENTS (concluded) October 31, 2008
- --------------------------------------------------------------------------------
<Table>
<Caption>
MARKET
SHARES VALUE
- -------------------------------------------------------------------------
COMMON STOCKS (CONCLUDED)
Westfield Financial, Inc. ................. 416 $4,306
WSFS Financial Corp. ...................... 80 3,830
------------
TOTAL THRIFTS & MORTGAGE FINANCE 188,559
------------
TOBACCO 0.2%
Alliance One International, Inc.*.......... 1,170 3,908
Star Scientific, Inc.*..................... 872 2,773
Universal Corp. ........................... 336 13,302
Vector Group, Ltd. ........................ 436 7,434
------------
TOTAL TOBACCO 27,417
------------
TRADING COMPANIES & DISTRIBUTORS 0.5%
Aceto Corp. ............................... 326 2,722
Aircastle Ltd. ............................ 614 4,267
Applied Industrial Technologies, Inc. ..... 556 11,226
Beacon Roofing Supply, Inc.*............... 584 7,989
DXP Enterprises, Inc.*..................... 98 1,368
H&E Equipment Services, Inc.*.............. 218 1,242
Houston Wire & Cable Co. .................. 238 2,742
Interline Brands, Inc.*.................... 426 4,533
Kaman Corp. -- Class A..................... 336 8,578
Lawson Products, Inc. ..................... 58 1,728
RSC Holdings, Inc.*........................ 626 4,595
Rush Enterprises, Inc. -- Class A*......... 446 4,179
TAL International Group, Inc. ............. 188 3,113
Textainer Group Holdings, Ltd. ............ 128 1,412
Watsco, Inc. .............................. 308 12,656
------------
TOTAL TRADING COMPANIES & DISTRIBUTORS 72,350
------------
TRANSPORTATION INFRASTRUCTURE 0.0%(A)
CAI International, Inc.*................... 98 776
------------
TOTAL TRANSPORTATION INFRASTRUCTURE 776
------------
WATER UTILITIES 0.3%
American States Water Co. ................. 228 7,800
Cadiz, Inc.*............................... 158 2,198
California Water Service Group............. 258 9,690
Connecticut Water Service, Inc. ........... 110 2,915
Consolidated Water Co., Ltd. .............. 188 2,668
Middlesex Water Co. ....................... 178 3,069
SJW Corp. ................................. 170 4,726
Southwest Water Co. ....................... 326 2,598
------------
TOTAL WATER UTILITIES 35,664
------------
WIRELESS TELECOMMUNICATION SERVICES 0.2%
Centennial Communications Corp.*........... 892 3,175
FiberTower Corp.*.......................... 1,586 1,158
ICO Global Communications Holdings, Ltd.*.. 1,368 2,244
iPCS, Inc.*................................ 228 3,721
Syniverse Holdings, Inc.*.................. 674 12,671
TerreStar Corp.*........................... 764 619
USA Mobility, Inc.*........................ 308 2,972
Virgin Mobile USA, Inc. -- Class A*........ 385 381
------------
TOTAL WIRELESS TELECOMMUNICATION SERVICES 26,941
------------
TOTAL COMMON STOCKS
(Cost $11,813,050) 10,802,259
------------
<Caption>
FACE
AMOUNT
- -------------------------------------------------------------------------
REPURCHASE AGREEMENTS 11.7%
State Street Bank & Trust Co., 0.030%,
dated 10/31/08, to be repurchased at
$1,572,004 on 11/03/08 collateralized by
$1,715,000 FHLMC at 5.625% due 11/23/35
with a value of $1,603,525.............. $1,572,000 $1,572,000
------------
TOTAL REPURCHASE AGREEMENTS
(Cost $1,572,000) 1,572,000
------------
TOTAL INVESTMENTS 92.1%
(Cost $13,385,050) 12,374,259
------------
OTHER ASSETS IN EXCESS OF LIABILITIES--7.9% 1,067,244
------------
NET ASSETS--100.0% $13,441,503
- -------------------------------------------------------------------------
<Caption>
UNREALIZED
CONTRACTS LOSS
- -------------------------------------------------------------------------
FUTURES CONTRACTS PURCHASED
December 2008 Russell 2000 Index E-Mini
Futures Contracts (Aggregate Market
Value of Contracts $15,984,720)......... 298 $(1,424,665)
- -------------------------------------------------------------------------
</Table>
* Non-Income Producing Security.
(a) Amount represents less than 0.05% of net assets.
FHLMC--Federal Home Loan Mortgage Corporation
See Notes to Financial Statements.
ANNUAL REPORT 60
RYDEX INVERSE 2X RUSSELL 2000 ETF
SCHEDULE OF INVESTMENTS October 31, 2008
- --------------------------------------------------------------------------------
<Table>
<Caption>
FACE MARKET
AMOUNT VALUE
- ------------------------------------------------------------------------------
REPURCHASE AGREEMENTS 88.5%
State Street Bank & Trust Co., 0.030%, dated
10/31/08, to be repurchased at $14,613,037 on
11/03/08 collateralized by $15,945,000 FHLMC at
5.625% due 11/23/35 with a value of
$14,908,575..................................... $14,613,000 $14,613,000
-----------
TOTAL REPURCHASE AGREEMENTS
(Cost $14,613,000) 14,613,000
-----------
TOTAL INVESTMENTS 88.5%
(Cost $14,613,000) 14,613,000
-----------
OTHER ASSETS IN EXCESS OF LIABILITIES--11.5% 1,905,147
-----------
NET ASSETS--100.0% $16,518,147
- ------------------------------------------------------------------------------
</Table>
<Table>
<Caption>
UNREALIZED
CONTRACTS LOSS
- --------------------------------------------------------------------------
FUTURES CONTRACTS SOLD SHORT
December 2008 Russell 2000 Index E-Mini Futures
Contracts (Aggregate Market Value of Contracts
$24,138,000).................................... 450 $(2,227,460)
-----------
</Table>
<Table>
<Caption>
UNITS
- -----------------------------------------------------------------------
EQUITY INDEX SWAP AGREEMENTS SOLD SHORT
Credit Suisse First Boston January 2009 Russell
2000 Index Swap, Terminating 01/27/09 (Notional
Market Value $9,108,293)*....................... 16,945 $(1,755,839)
- -----------------------------------------------------------------------
</Table>
* Price return based on S&P Russell 2000 Index +/- financing at a variable
rate.
FHLMC--Federal Home Loan Mortgage Corporation
See Notes to Financial Statements.
ANNUAL REPORT 61
RYDEX 2X S&P SELECT SECTOR ENERGY ETF
SCHEDULE OF INVESTMENTS October 31, 2008
- --------------------------------------------------------------------------------
<Table>
<Caption>
MARKET
SHARES VALUE
- ---------------------------------------------------------------------
COMMON STOCKS 82.2%
ENERGY EQUIPMENT & SERVICES 14.9%
Baker Hughes, Inc. ........................ 1,180 $41,241
BJ Services Co. ........................... 1,500 19,275
Cameron International Corp.*............... 660 16,012
ENSCO International, Inc. ................. 430 16,344
Halliburton Co. ........................... 3,180 62,932
Nabors Industries, Ltd.*................... 1,390 19,988
National-Oilwell Varco, Inc.*.............. 2,000 59,780
Noble Corp. ............................... 1,360 43,806
Rowan Cos., Inc. .......................... 940 17,052
Schlumberger, Ltd. ........................ 2,590 133,773
Smith International, Inc. ................. 650 22,412
Transocean, Inc.*.......................... 1,220 100,443
Weatherford International, Ltd.*........... 2,930 49,458
----------
TOTAL ENERGY EQUIPMENT & SERVICES 602,516
----------
OIL, GAS & CONSUMABLE FUELS 67.3%
Anadarko Petroleum Corp. .................. 1,840 64,952
Apache Corp. .............................. 1,300 107,029
Cabot Oil & Gas Corp. ..................... 310 8,702
Chesapeake Energy Corp. ................... 2,440 53,607
Chevron Corp. ............................. 6,410 478,186
ConocoPhillips............................. 4,820 250,736
CONSOL Energy, Inc. ....................... 1,140 35,785
Devon Energy Corp. ........................ 1,630 131,802
El Paso Corp. ............................. 3,470 33,659
EOG Resources, Inc. ....................... 1,040 84,157
Exxon Mobil Corp. ......................... 10,080 747,130
Hess Corp. ................................ 1,370 82,488
Marathon Oil Corp. ........................ 2,600 75,660
Massey Energy Co. ......................... 250 5,773
Murphy Oil Corp. .......................... 970 49,121
Noble Energy, Inc. ........................ 520 26,946
Occidental Petroleum Corp. ................ 2,830 157,178
Peabody Energy Corp. ...................... 820 28,298
Pioneer Natural Resources Co. ............. 360 10,019
Range Resources Corp. ..................... 470 19,843
Southwestern Energy Co.*................... 1,030 36,689
Spectra Energy Corp. ...................... 1,850 35,760
Sunoco, Inc. .............................. 610 18,605
Tesoro Corp. .............................. 420 4,061
Valero Energy Corp. ....................... 1,880 38,690
Williams Cos., Inc. ....................... 2,490 52,215
XTO Energy, Inc. .......................... 2,310 83,044
----------
TOTAL OIL, GAS & CONSUMABLE FUELS 2,720,135
----------
TOTAL COMMON STOCKS
(Cost $3,229,632) 3,322,651
----------
<Caption>
FACE MARKET
AMOUNT VALUE
- ---------------------------------------------------------------------
REPURCHASE AGREEMENTS 4.9%
State Street Bank & Trust Co., 0.030%,
dated 10/31/08, to be repurchased at
$199,001 on 11/03/08 collateralized by
$220,000 FHLMC at 5.625% due 11/23/35
with a value of $205,700................ $199,000 $199,000
----------
TOTAL REPURCHASE AGREEMENTS
(Cost $199,000) 199,000
----------
TOTAL INVESTMENTS 87.1%
(Cost $3,428,632) 3,521,651
----------
OTHER ASSETS IN EXCESS OF LIABILITIES--12.9% 522,144
----------
NET ASSETS--100.0% $4,043,795
- ---------------------------------------------------------------------
<Caption>
UNREALIZED
UNITS GAIN
- ---------------------------------------------------------------------
EQUITY INDEX SWAP AGREEMENTS PURCHASED
Credit Suisse First Boston January 2009 S&P
Select Sector Energy Index Swap,
Terminating 01/27/09 (Notional Market
Value $4,700,893)**..................... 9,208 $652,119
- ---------------------------------------------------------------------
</Table>
* Non-Income Producing Security.
** Price return based on S&P Select Sector Energy Index +/- financing at a
variable rate.
FHLMC--Federal Home Loan Mortgage Corporation
See Notes to Financial Statements.
ANNUAL REPORT 62
RYDEX INVERSE 2X S&P SELECT SECTOR ENERGY ETF
SCHEDULE OF INVESTMENTS October 31, 2008
- --------------------------------------------------------------------------------
<Table>
<Caption>
FACE MARKET
AMOUNT VALUE
- ----------------------------------------------------------------------------
REPURCHASE AGREEMENTS 89.8%
State Street Bank & Trust Co., 0.030%, dated
10/31/08, to be repurchased at $5,025,013 on
11/03/08 collateralized by $5,535,000 FNMA at
5.500% due 07/14/28 with a value of $5,126,794.. $5,025,000 $5,025,000
----------
TOTAL REPURCHASE AGREEMENTS
(Cost $5,025,000) 5,025,000
----------
TOTAL INVESTMENTS 89.8%
(Cost $5,025,000) 5,025,000
----------
OTHER ASSETS IN EXCESS OF LIABILITIES--10.2% 570,539
----------
NET ASSETS--100.0% $5,595,539
- ----------------------------------------------------------------------------
</Table>
<Table>
<Caption>
UNREALIZED
UNITS LOSS
- -----------------------------------------------------------------------
EQUITY INDEX SWAP AGREEMENTS SOLD SHORT
Credit Suisse First Boston January 2009 S&P
Select Sector Energy Index Swap, Terminating
01/27/09 (Notional Market Value $11,113,287)*... 21,769 $(2,974,767)
- -----------------------------------------------------------------------
</Table>
* Price return based on S&P Select Sector Energy Index +/- financing at a
variable rate.
FNMA--Federal National Mortgage Association
See Notes to Financial Statements.
ANNUAL REPORT 63
RYDEX 2X S&P SELECT SECTOR FINANCIAL ETF
SCHEDULE OF INVESTMENTS October 31, 2008
- --------------------------------------------------------------------------------
<Table>
<Caption>
MARKET
SHARES VALUE
- -------------------------------------------------------------------
COMMON STOCKS 81.3%
CAPITAL MARKETS 13.9%
American Capital, Ltd. .................... 1,410 $19,811
Ameriprise Financial, Inc. ................ 1,480 31,968
Bank of New York Mellon Corp. ............. 7,809 254,574
Charles Schwab Corp.(The).................. 6,349 121,393
E*TRADE Financial Corp.*................... 3,660 6,661
Federated Investors, Inc. -- Class B....... 600 14,520
Franklin Resources, Inc. .................. 1,040 70,720
Goldman Sachs Group, Inc.(The)............. 2,960 273,800
Invesco Ltd. .............................. 2,630 39,213
Janus Capital Group, Inc. ................. 1,090 12,797
Legg Mason, Inc. .......................... 970 21,524
Merrill Lynch & Co., Inc. ................. 10,429 193,875
Morgan Stanley............................. 7,549 131,881
Northern Trust Corp. ...................... 1,510 85,028
State Street Corp. ........................ 2,940 127,449
T. Rowe Price Group, Inc. ................. 1,760 69,590
-----------
TOTAL CAPITAL MARKETS 1,474,804
-----------
COMMERCIAL BANKS 18.4%
BB&T Corp. ................................ 3,740 134,079
Comerica, Inc. ............................ 1,020 28,142
Fifth Third Bancorp........................ 3,930 42,640
First Horizon National Corp. .............. 1,370 16,317
Huntington Bancshares, Inc. ............... 2,490 23,530
KeyCorp.................................... 3,370 41,215
M&T Bank Corp. ............................ 530 42,983
Marshall & Ilsley Corp. ................... 1,770 31,913
National City Corp. ....................... 14,259 38,499
PNC Financial Services Group, Inc. ........ 2,360 157,341
Regions Financial Corp. ................... 4,730 52,456
SunTrust Banks, Inc. ...................... 2,410 96,737
U.S. Bancorp............................... 11,869 353,815
Wachovia Corp. ............................ 14,709 94,285
Wells Fargo & Co. ......................... 22,538 767,419
Zions Bancorp.............................. 780 29,726
-----------
TOTAL COMMERCIAL BANKS 1,951,097
-----------
CONSUMER FINANCE 3.7%
American Express Co. ...................... 7,899 217,222
Capital One Financial Corp. ............... 2,560 100,147
Discover Financial Services................ 3,270 40,058
SLM Corp.*................................. 3,180 33,931
-----------
TOTAL CONSUMER FINANCE 391,358
-----------
DIVERSIFIED FINANCIAL SERVICES 25.4%
Bank of America Corp. ..................... 34,157 825,575
CIT Group, Inc. ........................... 1,940 8,032
Citigroup, Inc. ........................... 37,087 506,237
CME Group, Inc. ........................... 460 129,789
IntercontinentalExchange, Inc.*............ 510 43,635
JPMorgan Chase & Co. ...................... 25,088 1,034,880
Leucadia National Corp. ................... 1,210 32,476
Moody's Corp. ............................. 1,340 34,304
Nasdaq OMX Group (The)*.................... 930 30,188
NYSE Euronext.............................. 1,810 54,626
-----------
TOTAL DIVERSIFIED FINANCIAL SERVICES 2,699,742
-----------
INSURANCE 13.3%
AFLAC, Inc. ............................... 3,240 143,467
Allstate Corp. ............................ 3,690 97,379
American International Group, Inc. ........ 18,318 34,987
Aon Corp. ................................. 1,890 79,947
Assurant, Inc. ............................ 810 20,639
Chubb Corp. ............................... 2,460 127,477
Cincinnati Financial Corp. ................ 1,110 28,849
Genworth Financial, Inc. -- Class A........ 2,950 14,278
Hartford Financial Services Group, Inc. ... 2,050 21,156
Lincoln National Corp. .................... 1,750 30,170
Loews Corp. ............................... 2,470 82,029
Marsh & McLennan Cos., Inc. ............... 3,490 102,327
MBIA, Inc. ................................ 1,330 13,074
MetLife, Inc. ............................. 5,190 172,412
Principal Financial Group, Inc. ........... 1,770 33,612
Progressive Corp. ......................... 4,600 65,642
Prudential Financial, Inc. ................ 2,910 87,300
Torchmark Corp. ........................... 590 24,644
Travelers Cos., Inc.(The).................. 4,020 171,051
Unum Group................................. 2,350 37,013
XL Capital, Ltd. -- Class A................ 2,130 20,661
-----------
TOTAL INSURANCE 1,408,114
-----------
REAL ESTATE INVESTMENT TRUSTS (REITS) 5.8%
Apartment Investment & Management
Co. -- Class A.......................... 580 8,485
AvalonBay Communities, Inc. ............... 520 36,930
Boston Properties, Inc. ................... 820 58,122
Developers Diversified Realty Corp. ....... 820 10,799
Equity Residential......................... 1,850 64,621
General Growth Properties, Inc. ........... 1,550 6,417
HCP, Inc. ................................. 1,710 51,180
Host Hotels & Resorts, Inc. ............... 3,540 36,604
Kimco Realty Corp. ........................ 1,550 34,999
Plum Creek Timber Co., Inc. ............... 1,170 43,618
ProLogis................................... 1,790 25,060
Public Storage, Inc. ...................... 850 69,275
Simon Property Group, Inc. ................ 1,530 102,556
Vornado Realty Trust....................... 930 65,611
-----------
TOTAL REAL ESTATE INVESTMENT TRUSTS (REITS) 614,277
-----------
REAL ESTATE MANAGEMENT & DEVELOPMENT 0.1%
CB Richard Ellis Group, Inc. -- Class A*... 1,170 8,202
-----------
TOTAL REAL ESTATE MANAGEMENT & DEVELOPMENT 8,202
-----------
THRIFTS & MORTGAGE FINANCE 0.7%
Hudson City Bancorp, Inc. ................. 3,540 66,587
Sovereign Bancorp, Inc. ................... 3,700 10,730
-----------
TOTAL THRIFTS & MORTGAGE FINANCE 77,317
-----------
TOTAL COMMON STOCKS
(Cost $8,948,092) 8,624,911
-----------
TOTAL INVESTMENTS 81.3%
(Cost $8,948,092) 8,624,911
-----------
OTHER ASSETS IN EXCESS OF LIABILITIES--18.7% 1,985,359
-----------
NET ASSETS--100.0% $10,610,270
- -------------------------------------------------------------------
<Caption>
UNREALIZED
UNITS GAIN
- -------------------------------------------------------------------
EQUITY INDEX SWAP AGREEMENTS PURCHASED
Credit Suisse First Boston January 2009 S&P
Select Sector Financial Index Swap,
Terminating 01/27/09 (Notional Market
Value $12,299,786)**.................... 79,343 $2,566,561
- -------------------------------------------------------------------
</Table>
* Non-Income Producing Security.
** Price return based on S&P Select Sector Financial Index +/- financing at
a variable rate.
See Notes to Financial Statements.
ANNUAL REPORT 64
RYDEX INVERSE 2X S&P SELECT SECTOR FINANCIAL ETF
SCHEDULE OF INVESTMENTS October 31, 2008
- --------------------------------------------------------------------------------
<Table>
<Caption>
FACE MARKET
AMOUNT VALUE
- ----------------------------------------------------------------------------
REPURCHASE AGREEMENTS 97.7%
State Street Bank & Trust Co., 0.030%, dated
10/31/08, to be repurchased at $6,997,017 on
11/03/08 collateralized by $7,635,000 FHLMC at
5.625% due 11/23/35 with a value of $7,138,725.. $6,997,000 $6,997,000
----------
TOTAL REPURCHASE AGREEMENTS
(Cost $6,997,000) 6,997,000
----------
TOTAL INVESTMENTS 97.7%
(Cost $6,997,000) 6,997,000
----------
OTHER ASSETS IN EXCESS OF LIABILITIES--2.3% 166,806
----------
NET ASSETS--100.0% $7,163,806
- ----------------------------------------------------------------------------
</Table>
<Table>
<Caption>
UNREALIZED
CONTRACTS GAIN/(LOSS)
- --------------------------------------------------------------------------
FUTURES CONTRACTS SOLD SHORT
December 2008 S&P 500 Index E-Mini Futures
Contracts (Aggregate Market Value of Contracts
$485,375)....................................... 10 $1,387
-----------
<Caption>
UNITS
- --------------------------------------------------------------------------
EQUITY INDEX SWAP AGREEMENTS SOLD SHORT
Credit Suisse First Boston January 2009 S&P
Select Sector Financial Index Swap, Terminating
01/27/09 (Notional Market Value $15,994,404)*... 103,176 $(3,320,090)
- --------------------------------------------------------------------------
</Table>
* Price return based on S&P Select Sector Financial Index +/- financing at
a variable rate.
FHLMC--Federal Home Loan Mortgage Corporation
See Notes to Financial Statements.
ANNUAL REPORT 65
RYDEX 2X S&P SELECT SECTOR TECHNOLOGY ETF
SCHEDULE OF INVESTMENTS October 31, 2008
- --------------------------------------------------------------------------------
<Table>
<Caption>
MARKET
SHARES VALUE
- ------------------------------------------------------------------
COMMON STOCKS 83.0%
COMMUNICATIONS EQUIPMENT 11.2%
Ciena Corp.*............................... 190 $1,826
Cisco Systems, Inc.*....................... 9,458 168,069
Corning, Inc. ............................. 2,559 27,714
Harris Corp. .............................. 230 8,268
JDS Uniphase Corp.*........................ 400 2,184
Juniper Networks, Inc.*.................... 890 16,679
Motorola, Inc. ............................ 3,689 19,810
QUALCOMM, Inc. ............................ 2,639 100,968
Tellabs, Inc.*............................. 760 3,222
----------
TOTAL COMMUNICATIONS EQUIPMENT 348,740
----------
COMPUTERS & PERIPHERALS 19.5%
Apple, Inc.*............................... 1,420 152,778
Dell, Inc.*................................ 2,819 34,251
EMC Corp.*................................. 3,349 39,451
Hewlett-Packard Co. ....................... 3,919 150,019
International Business Machines Corp. ..... 2,169 201,652
Lexmark International, Inc. -- Class A*.... 160 4,133
NetApp, Inc.*.............................. 550 7,441
QLogic Corp.*.............................. 240 2,885
SanDisk Corp.*............................. 380 3,378
Sun Microsystems, Inc.*.................... 1,270 5,842
Teradata Corp.*............................ 310 4,771
----------
TOTAL COMPUTERS & PERIPHERALS 606,601
----------
DIVERSIFIED TELECOMMUNICATION SERVICES 13.4%
AT&T, Inc. ................................ 9,438 252,655
CenturyTel, Inc. .......................... 180 4,520
Embarq Corp. .............................. 240 7,200
Frontier Communications Corp. ............. 550 4,186
Qwest Communications International, Inc. .. 2,519 7,204
Verizon Communications, Inc. .............. 4,579 135,859
Windstream Corp. .......................... 750 5,632
----------
TOTAL DIVERSIFIED TELECOMMUNICATION SERVICES 417,256
----------
ELECTRONIC EQUIPMENT & INSTRUMENTS 1.4%
Agilent Technologies, Inc.*................ 590 13,092
Amphenol Corp. -- Class A.................. 290 8,308
Jabil Circuit, Inc. ....................... 380 3,196
Molex, Inc. ............................... 250 3,603
Tyco Electronics, Ltd. .................... 770 14,969
----------
TOTAL ELECTRONIC EQUIPMENT & INSTRUMENTS 43,168
----------
INTERNET SOFTWARE & SERVICES 6.1%
Akamai Technologies, Inc.*................. 300 4,314
eBay, Inc.*................................ 1,770 27,028
Google, Inc. -- Class A*................... 340 122,182
VeriSign, Inc.*............................ 330 6,996
Yahoo!, Inc.*.............................. 2,249 28,832
----------
TOTAL INTERNET SOFTWARE & SERVICES 189,352
----------
IT SERVICES 4.0%
Affiliated Computer Services, Inc. -- Class
A*...................................... 170 6,970
Automatic Data Processing, Inc. ........... 830 29,009
Cognizant Technology Solutions
Corp. -- Class A*....................... 490 9,408
Computer Sciences Corp.*................... 250 7,540
Convergys Corp.*........................... 230 1,769
Fidelity National Information Services,
Inc. ................................... 330 4,980
Fiserv, Inc.*.............................. 270 9,007
Mastercard, Inc. -- Class A................ 120 17,738
Paychex, Inc. ............................. 530 15,126
Total System Services, Inc. ............... 340 4,672
Unisys Corp.*.............................. 740 1,125
Western Union Co. ......................... 1,190 18,159
----------
TOTAL IT SERVICES 125,503
----------
OFFICE ELECTRONICS 0.4%
Xerox Corp. ............................... 1,440 11,549
----------
TOTAL OFFICE ELECTRONICS 11,549
----------
SEMICONDUCTORS & SEMICONDUCTOR EQUIPMENT 9.6%
Advanced Micro Devices, Inc.*.............. 1,070 3,745
Altera Corp. .............................. 510 8,848
Analog Devices, Inc. ...................... 480 10,253
Applied Materials, Inc. ................... 2,179 28,131
Broadcom Corp. -- Class A*................. 730 12,468
Intel Corp. ............................... 8,018 128,288
KLA-Tencor Corp. .......................... 290 6,743
Linear Technology Corp. ................... 370 8,392
LSI Corp.*................................. 1,120 4,312
MEMC Electronic Materials, Inc.*........... 380 6,984
Microchip Technology, Inc. ................ 310 7,635
Micron Technology, Inc.*................... 1,330 6,264
National Semiconductor Corp. .............. 340 4,478
Novellus Systems, Inc.*.................... 180 2,844
NVIDIA Corp.*.............................. 930 8,147
Teradyne, Inc.*............................ 330 1,683
Texas Instruments, Inc. ................... 2,119 41,448
Xilinx, Inc. .............................. 460 8,473
----------
TOTAL SEMICONDUCTORS & SEMICONDUCTOR EQUIPMENT 299,136
----------
SOFTWARE 16.3%
Adobe Systems, Inc.*....................... 860 22,910
Autodesk, Inc.*............................ 370 7,885
BMC Software, Inc.*........................ 320 8,262
CA, Inc. .................................. 650 11,570
Citrix Systems, Inc.*...................... 310 7,989
Compuware Corp.*........................... 460 2,935
Electronic Arts, Inc.*..................... 520 11,846
Intuit, Inc.*.............................. 530 13,282
Microsoft Corp. ........................... 12,577 280,844
Novell, Inc.*.............................. 650 3,029
Oracle Corp.*.............................. 6,298 115,190
Salesforce.com, Inc.*...................... 180 5,573
Symantec Corp.*............................ 1,370 17,235
----------
TOTAL SOFTWARE 508,550
----------
WIRELESS TELECOMMUNICATION SERVICES 1.1%
American Tower Corp. -- Class A*........... 640 20,678
Sprint Nextel Corp. ....................... 4,639 14,520
----------
TOTAL WIRELESS TELECOMMUNICATION SERVICES 35,198
----------
TOTAL COMMON STOCKS
(Cost $3,414,499) 2,585,053
----------
TOTAL INVESTMENTS 83.0%
(Cost $3,414,499) 2,585,053
----------
OTHER ASSETS IN EXCESS OF LIABILITIES--17.0% 530,245
----------
NET ASSETS--100.0% $3,115,298
- ------------------------------------------------------------------
</Table>
See Notes to Financial Statements.
ANNUAL REPORT 66
RYDEX 2X S&P SELECT SECTOR TECHNOLOGY ETF
SCHEDULE OF INVESTMENTS (concluded) October 31, 2008
- --------------------------------------------------------------------------------
<Table>
<Caption>
UNREALIZED
UNITS GAIN
- ------------------------------------------------------------------
EQUITY INDEX SWAP AGREEMENTS PURCHASED
Credit Suisse First Boston January 2009 S&P
Select Sector Technology Index Swap,
Terminating 01/27/09 (Notional Market
Value $3,622,468)**..................... 21,838 $343,569
- ------------------------------------------------------------------
</Table>
* Non-Income Producing Security.
** Price return based on S&P Select Sector Technology Index +/- financing at
a variable rate.
See Notes to Financial Statements.
ANNUAL REPORT 67
RYDEX INVERSE 2X S&P SELECT SECTOR TECHNOLOGY ETF
SCHEDULE OF INVESTMENTS October 31, 2008
- --------------------------------------------------------------------------------
<Table>
<Caption>
FACE MARKET
AMOUNT VALUE
- ----------------------------------------------------------------------------
REPURCHASE AGREEMENTS 87.4%
State Street Bank & Trust Co., 0.030%, dated
10/31/08, to be repurchased at $5,652,014 on
11/03/08 collateralized by $6,225,000 FNMA at
5.500% due 07/14/28 with a value of $5,765,906.. $5,652,000 $5,652,000
----------
TOTAL REPURCHASE AGREEMENTS
(Cost $5,652,000) 5,652,000
----------
TOTAL INVESTMENTS 87.4%
(Cost $5,652,000) 5,652,000
----------
OTHER ASSETS IN EXCESS OF LIABILITIES--12.6% 816,463
----------
NET ASSETS--100.0% $6,468,463
- ----------------------------------------------------------------------------
</Table>
<Table>
<Caption>
UNREALIZED
UNITS LOSS
- -----------------------------------------------------------------------
EQUITY INDEX SWAP AGREEMENTS SOLD SHORT
Credit Suisse First Boston January 2009 S&P
Select Sector Technology Index Swap, Terminating
01/27/09 (Notional Market Value $12,886,603)*... 77,686 $(1,879,566)
- -----------------------------------------------------------------------
</Table>
* Price return based on S&P Select Sector Technology Index +/- financing at
a variable rate.
FNMA--Federal National Mortgage Association
See Notes to Financial Statements.
ANNUAL REPORT 68
RYDEX 2X S&P SELECT SECTOR HEALTH CARE ETF
SCHEDULE OF INVESTMENTS October 31, 2008
- --------------------------------------------------------------------------------
<Table>
<Caption>
MARKET
SHARES VALUE
- ---------------------------------------------------------------------
COMMON STOCKS 82.3%
BIOTECHNOLOGY 11.8%
Amgen, Inc.*............................... 3,930 $235,368
Biogen Idec, Inc.*......................... 1,100 46,805
Celgene Corp.*............................. 1,690 108,599
Genzyme Corp.*............................. 1,020 74,338
Gilead Sciences, Inc.*..................... 3,420 156,807
----------
TOTAL BIOTECHNOLOGY 621,917
----------
HEALTH CARE EQUIPMENT & SUPPLIES 14.1%
Baxter International, Inc. ................ 2,370 143,361
Becton, Dickinson & Co. ................... 930 64,542
Boston Scientific Corp.*................... 5,620 50,749
C.R. Bard, Inc. ........................... 390 34,417
Covidien, Ltd. ............................ 1,860 82,379
Hospira, Inc.*............................. 590 16,414
Intuitive Surgical, Inc.*.................. 140 24,191
Medtronic, Inc. ........................... 4,210 169,789
St Jude Medical, Inc.*..................... 1,300 49,439
Stryker Corp. ............................. 930 49,718
Varian Medical Systems, Inc.*.............. 460 20,935
Zimmer Holdings, Inc.*..................... 850 39,465
----------
TOTAL HEALTH CARE EQUIPMENT & SUPPLIES 745,399
----------
HEALTH CARE PROVIDERS & SERVICES 11.4%
Aetna, Inc. ............................... 1,800 44,766
AmerisourceBergen Corp. ................... 610 19,075
Cardinal Health, Inc. ..................... 1,350 51,570
CIGNA Corp. ............................... 1,060 17,278
Coventry Health Care, Inc.*................ 550 7,255
DaVita, Inc.*.............................. 390 22,133
Express Scripts, Inc.*..................... 960 58,186
Humana, Inc.*.............................. 670 19,825
Laboratory Corp. of America Holdings*...... 410 25,211
McKesson Corp. ............................ 1,060 38,997
Medco Health Solutions, Inc.*.............. 1,930 73,243
Patterson Cos., Inc.*...................... 340 8,612
Quest Diagnostics, Inc. ................... 610 28,548
Tenet Healthcare Corp.*.................... 1,600 7,008
UnitedHealth Group, Inc. .................. 4,560 108,209
WellPoint, Inc.*........................... 1,950 75,796
----------
TOTAL HEALTH CARE PROVIDERS & SERVICES 605,712
----------
HEALTH CARE TECHNOLOGY 0.2%
IMS Health, Inc. .......................... 710 10,181
----------
TOTAL HEALTH CARE TECHNOLOGY 10,181
----------
LIFE SCIENCES TOOLS & SERVICES 2.3%
Applied Biosystems Inc. ................... 670 20,656
Millipore Corp.*........................... 230 11,935
PerkinElmer, Inc. ......................... 440 7,893
Thermo Fisher Scientific Inc.*............. 1,560 63,336
Waters Corp.*.............................. 370 16,206
----------
TOTAL LIFE SCIENCES TOOLS & SERVICES 120,026
----------
PHARMACEUTICALS 42.5%
Abbott Laboratories........................ 4,850 267,478
Allergan, Inc. ............................ 1,170 46,414
Barr Pharmaceuticals, Inc.*................ 400 25,704
Bristol-Myers Squibb Co. .................. 7,390 151,865
Eli Lilly & Co. ........................... 3,720 125,810
Forest Laboratories, Inc.*................. 1,150 26,715
Johnson & Johnson.......................... 10,380 636,709
King Pharmaceuticals, Inc.*................ 990 8,702
Merck & Co., Inc. ......................... 7,960 246,362
Mylan Inc.*................................ 1,130 9,684
Pfizer, Inc. .............................. 25,030 443,281
Schering-Plough Corp. ..................... 6,100 88,389
Watson Pharmaceuticals, Inc.*.............. 410 10,730
Wyeth...................................... 4,980 160,256
----------
TOTAL PHARMACEUTICALS 2,248,099
----------
TOTAL COMMON STOCKS
(Cost $4,876,484) 4,351,334
----------
<Caption>
FACE
AMOUNT
- ---------------------------------------------------------------------
REPURCHASE AGREEMENTS 2.8%
State Street Bank & Trust Co., 0.030%,
dated 10/31/08, to be repurchased at
$147,000 on 11/03/08 collateralized by
$165,000 FHLMC at 5.625% due 11/23/35
with a value of $154,275................ $147,000 $147,000
----------
TOTAL REPURCHASE AGREEMENTS
(Cost $147,000) 147,000
----------
TOTAL INVESTMENTS 85.1%
(Cost $5,023,484) 4,498,334
----------
OTHER ASSETS IN EXCESS OF LIABILITIES--14.9% 785,229
----------
NET ASSETS--100.0% $5,283,563
- ---------------------------------------------------------------------
<Caption>
UNREALIZED
UNITS GAIN
- ---------------------------------------------------------------------
EQUITY INDEX SWAP AGREEMENTS PURCHASED
Credit Suisse First Boston January 2009 S&P
Select Sector Health Care Index Swap,
Terminating 01/27/09 (Notional Market
Value $6,180,737)**..................... 22,908 $461,513
- ---------------------------------------------------------------------
</Table>
* Non-Income Producing Security.
** Price return based on S&P Select Sector Health Care Index +/- financing
at a variable rate.
FHLMC--Federal Home Loan Mortgage Corporation
See Notes to Financial Statements.
ANNUAL REPORT 69
RYDEX INVERSE 2X S&P SELECT SECTOR HEALTH CARE ETF
SCHEDULE OF INVESTMENTS October 31, 2008
- --------------------------------------------------------------------------------
<Table>
<Caption>
FACE MARKET
AMOUNT VALUE
- ----------------------------------------------------------------------------
REPURCHASE AGREEMENTS 88.8%
State Street Bank & Trust Co., 0.030%, dated
10/31/08, to be repurchased at $7,442,019 on
11/03/08 collateralized by $8,200,000 FNMA at
5.500% due 07/14/28 with a value of $7,595,250.. $7,442,000 $7,442,000
----------
TOTAL REPURCHASE AGREEMENTS
(Cost $7,442,000) 7,442,000
----------
TOTAL INVESTMENTS 88.8%
(Cost $7,442,000) 7,442,000
----------
OTHER ASSETS IN EXCESS OF LIABILITIES--11.2% 939,419
----------
NET ASSETS--100.0% $8,381,419
- ----------------------------------------------------------------------------
</Table>
<Table>
<Caption>
UNREALIZED
UNITS LOSS
- -----------------------------------------------------------------------
EQUITY INDEX SWAP AGREEMENTS SOLD SHORT
Credit Suisse First Boston January 2009 S&P
Select Sector Health Care Index Swap,
Terminating 01/27/09 (Notional Market Value
$17,291,276)*................................... 64,087 $(1,728,947)
- -----------------------------------------------------------------------
</Table>
* Price return based on S&P Select Sector Health Care Index +/- financing
at a variable rate.
FNMA--Federal National Mortgage Association
See Notes to Financial Statements.
ANNUAL REPORT 70
STATEMENTS OF ASSETS AND LIABILITIES October 31, 2008
- --------------------------------------------------------------------------------
<Table>
<Caption>
RYDEX 2X RYDEX RYDEX 2X RYDEX INVERSE
S&P 500 INVERSE 2X S&P MIDCAP 2X S&P MIDCAP
ETF S&P 500 ETF 400 ETF 400 ETF
------------ ------------ ----------- -------------
ASSETS
Investments at Market Value*................. $ 93,707,346 $ -- $ 4,422,420 $ --
Repurchase Agreements........................ 12,688,000 44,251,000 -- 5,866,000
------------ ------------ ----------- -----------
Total Investments............................ 106,395,346 44,251,000 4,422,420 5,866,000
------------ ------------ ----------- -----------
Cash......................................... 3,724 341 28,573 317
Segregated Cash for Swaps.................... 1,000,000 8,700,000 206,600 1,691,000
Margin Deposit for Future Contracts.......... 13,770,900 14,553,000 437,400 523,800
Receivables:
Investments Sold........................... 3,346 -- 46,644 --
Dividends.................................. 107,397 -- 2,230 --
Interest................................... 32 111 -- 15
Fund Shares Sold........................... -- -- 1,295,272 --
Variation Margin on Futures Contracts...... 1,281,709 -- 62,407 --
Equity Index Swap Settlement............... 846 -- 236,808 --
------------ ------------ ----------- -----------
TOTAL ASSETS............................ 122,563,300 67,504,452 6,738,354 8,081,132
------------ ------------ ----------- -----------
LIABILITIES
Payables:
Investments Purchased...................... 4,996,528 -- 1,256,169 --
Equity Index Swap Settlement............... -- 11,112 -- 1,407,173
Fund Shares Repurchased.................... 4,147,460 -- -- --
Variation Margin on Futures Contracts...... -- 1,334,089 -- 70,936
Accrued Management Fees.................... 55,419 53,694 2,159 6,912
------------ ------------ ----------- -----------
TOTAL LIABILITIES....................... 9,199,407 1,398,895 1,258,328 1,485,021
------------ ------------ ----------- -----------
NET ASSETS................................... $113,363,893 $ 66,105,557 $ 5,480,026 $ 6,596,111
============ ============ =========== ===========
NET ASSETS CONSIST OF:
Paid-in Capital.............................. $164,463,493 $ 53,470,609 $12,287,903 $ 5,811,212
Undistributed Net Investment Income.......... 81,221 -- -- --
Accumulated Net Realized Gain (Loss) on
Investment Securities, Futures and Swaps... (34,328,244) 23,107,711 (6,419,390) 2,657,413
Net Unrealized Appreciation/Depreciation on
Investment Securities and Futures.......... (16,852,577) (10,472,763) (388,487) (1,872,514)
------------ ------------ ----------- -----------
NET ASSETS................................... $113,363,893 $ 66,105,557 $ 5,480,026 $ 6,596,111
============ ============ =========== ===========
Shares Outstanding (Unlimited Shares
Authorized), No Par Value.................. 4,100,000 500,000 200,000 50,000
============ ============ =========== ===========
Net Asset Value, Offering Price and
Repurchase Price Per Share................. $ 27.65 $ 132.21 $ 27.40 $ 131.92
============ ============ =========== ===========
*Total Cost of Investments................... $120,502,291 $ 44,251,000 $ 5,196,509 $ 5,866,000
============ ============ =========== ===========
</Table>
See Notes to Financial Statements.
ANNUAL REPORT 71
STATEMENTS OF ASSETS AND LIABILITIES (continued) October 31, 2008
- --------------------------------------------------------------------------------
<Table>
<Caption>
RYDEX RYDEX INVERSE
RYDEX 2X RYDEX INVERSE 2X S&P 2X S&P
RUSSELL 2X RUSSELL SELECT SECTOR SELECT SECTOR
2000 ETF 2000 ETF ENERGY ETF ENERGY ETF
----------- ------------- ------------- -------------
ASSETS
Investments at Market Value*............. $10,802,259 $ -- $ 3,322,651 $ --
Repurchase Agreements.................... 1,572,000 14,613,000 199,000 5,025,000
----------- ----------- ----------- -----------
Total Investments........................ 12,374,259 14,613,000 3,521,651 5,025,000
----------- ----------- ----------- -----------
Cash..................................... -- 887 544 280
Segregated Cash for Swaps................ -- 1,895,100 163,000 3,556,230
Margin Deposit for Future Contracts...... 1,461,200 2,901,600 -- --
Receivables:
Investments Sold....................... 47,138 -- -- --
Dividends.............................. 6,906 -- 2,416 --
Interest............................... 4 37 -- 12
Variation Margin on Futures Contracts.. 557,872 -- -- --
Equity Index Swap Settlement........... -- -- 653,460 --
----------- ----------- ----------- -----------
TOTAL ASSETS........................ 14,447,379 19,410,624 4,341,071 8,581,522
----------- ----------- ----------- -----------
LIABILITIES
Payables:
Investments Purchased.................. 997,917 -- 296,036 --
Equity Index Swap Settlement........... -- 1,758,635 -- 2,981,264
Variation Margin on Futures Contracts.. -- 1,118,793 -- --
Overdraft.............................. 1,841 -- -- --
Accrued Management Fees................ 6,118 15,049 1,240 4,719
----------- ----------- ----------- -----------
TOTAL LIABILITIES................... 1,005,876 2,892,477 297,276 2,985,983
----------- ----------- ----------- -----------
NET ASSETS............................... $13,441,503 $16,518,147 $ 4,043,795 $ 5,595,539
=========== =========== =========== ===========
NET ASSETS CONSIST OF:
Paid-in Capital.......................... $21,191,068 $16,104,875 $ 8,112,973 $ 4,246,174
Undistributed Net Investment Income...... 2,359 -- 983 --
Accumulated Net Realized Gain (Loss) on
Investment Securities, Futures and
Swaps.................................. (5,316,468) 4,396,571 (4,815,299) 4,324,132
Net Unrealized Appreciation/Depreciation
on Investment Securities and Futures... (2,435,456) (3,983,299) 745,138 (2,974,767)
----------- ----------- ----------- -----------
NET ASSETS............................... $13,441,503 $16,518,147 $ 4,043,795 $ 5,595,539
=========== =========== =========== ===========
Shares Outstanding (Unlimited Shares
Authorized), No Par Value.............. 450,000 150,000 200,000 50,000
=========== =========== =========== ===========
Net Asset Value, Offering Price and
Repurchase Price Per Share............. $ 29.87 $ 110.12 $ 20.22 $ 111.91
=========== =========== =========== ===========
*Total Cost of Investments............... $13,385,050 $14,613,000 $ 3,428,632 $ 5,025,000
=========== =========== =========== ===========
</Table>
See Notes to Financial Statements.
ANNUAL REPORT 72
STATEMENTS OF ASSETS AND LIABILITIES (continued) October 31, 2008
- --------------------------------------------------------------------------------
<Table>
<Caption>
RYDEX RYDEX INVERSE RYDEX RYDEX INVERSE
2X S&P 2X S&P 2X S&P 2X S&P
SELECT SECTOR SELECT SECTOR SELECT SECTOR SELECT SECTOR
FINANCIAL ETF FINANCIAL ETF TECHNOLOGY ETF TECHNOLOGY ETF
------------- ------------- -------------- --------------
ASSETS
Investments at Market Value*.......... $ 8,624,911 $ -- $ 2,585,053 $ --
Repurchase Agreements................. -- 6,997,000 -- 5,652,000
------------ ----------- ----------- -----------
Total Investments..................... 8,624,911 6,997,000 2,585,053 5,652,000
------------ ----------- ----------- -----------
Cash.................................. 7,846,930 123 -- 957
Segregated Cash for Swaps............. 721,960 3,494,900 273,412 2,696,500
Receivables:
Investments Sold.................... 2,062 -- -- --
Dividends receivable................ 22,935 -- 7,399 --
Interest............................ -- 17 -- 14
Variation Margin on Futures
Contracts........................ -- 1,387 12,638 --
Equity Index Swap Settlement........ 2,570,865 -- 342,405 --
------------ ----------- ----------- -----------
TOTAL ASSETS..................... 19,789,663 10,493,427 3,220,907 8,349,471
------------ ----------- ----------- -----------
LIABILITIES
Payables:
Investments Purchased............... 489,525 -- 99,799 --
Equity Index Swap Settlement........ -- 3,324,406 -- 1,876,429
Fund Shares Repurchased............. 8,679,296 -- -- --
Overdraft........................... -- -- 3,709 --
Accrued Management Fees............. 10,572 5,215 2,101 4,579
------------ ----------- ----------- -----------
TOTAL LIABILITIES................ 9,179,393 3,329,621 105,609 1,881,008
------------ ----------- ----------- -----------
NET ASSETS............................ $ 10,610,270 $ 7,163,806 $ 3,115,298 $ 6,468,463
============ =========== =========== ===========
NET ASSETS CONSIST OF:
Paid-in Capital....................... $ 26,556,387 $ 7,500,000 $ 7,500,000 $ 4,540,184
Undistributed Net Investment Income... 44,812 -- 4,645 --
Accumulated Net Realized Gain (Loss)
on Investment Securities, Futures
and Swaps........................... (18,234,309) 2,982,509 (3,903,470) 3,807,845
Net Unrealized
Appreciation/Depreciation on
Investment Securities and Futures... 2,243,380 (3,318,703) (485,877) (1,879,566)
------------ ----------- ----------- -----------
NET ASSETS............................ $ 10,610,270 $ 7,163,806 $ 3,115,298 $ 6,468,463
============ =========== =========== ===========
Shares Outstanding (Unlimited Shares
Authorized), No Par Value........... 400,000 100,000 100,000 50,000
============ =========== =========== ===========
Net Asset Value, Offering Price and
Repurchase Price Per Share.......... $ 26.53 $ 71.64 $ 31.15 $ 129.37
============ =========== =========== ===========
*Total Cost of Investments............ $ 8,948,092 $ 6,997,000 $ 3,414,499 $ 5,652,000
============ =========== =========== ===========
</Table>
See Notes to Financial Statements.
ANNUAL REPORT 73
STATEMENTS OF ASSETS AND LIABILITIES (concluded) October 31, 2008
- --------------------------------------------------------------------------------
<Table>
<Caption>
RYDEX RYDEX INVERSE
2X S&P 2X S&P
SELECT SECTOR SELECT SECTOR
HEALTH CARE ETF HEALTH CARE ETF
--------------- ---------------
ASSETS
Investments at Market Value*............................ $ 4,351,334 $ --
Repurchase Agreements................................... 147,000 7,442,000
----------- -----------
Total Investments....................................... 4,498,334 7,442,000
----------- -----------
Cash.................................................... 498 115
Segregated Cash for Swaps............................... 422,750 2,666,000
Receivables:
Dividends receivable.................................. 4,792 --
Interest.............................................. -- 19
Equity Index Swap Settlement.......................... 458,539 --
----------- -----------
TOTAL ASSETS....................................... 5,384,913 10,108,134
----------- -----------
LIABILITIES
Payables:
Investments Purchased................................. 97,885 --
Equity Index Swap Settlement.......................... -- 1,721,049
Accrued Management Fees............................... 3,465 5,666
----------- -----------
TOTAL LIABILITIES.................................. 101,350 1,726,715
----------- -----------
NET ASSETS.............................................. $ 5,283,563 $ 8,381,419
=========== ===========
NET ASSETS CONSIST OF:
Paid-in Capital......................................... $ 7,500,000 $ 7,500,000
Undistributed Net Investment Income..................... 1,011 --
Accumulated Net Realized Gain (Loss) on Investment
Securities, Futures and Swaps......................... (2,153,811) 2,610,366
Net Unrealized Appreciation/Depreciation on Investment
Securities and Futures................................ (63,637) (1,728,947)
----------- -----------
NET ASSETS.............................................. $ 5,283,563 $ 8,381,419
=========== ===========
Shares Outstanding (Unlimited Shares Authorized), No Par
Value................................................. 100,000 100,000
=========== ===========
Net Asset Value, Offering Price and Repurchase Price Per
Share................................................. $ 52.84 $ 83.81
=========== ===========
*Total Cost of Investments.............................. $ 5,023,484 $ 7,442,000
=========== ===========
</Table>
See Notes to Financial Statements.
ANNUAL REPORT 74
STATEMENTS OF OPERATIONS For the Year Ended
October 31, 2008
- --------------------------------------------------------------------------------
<Table>
<Caption>
RYDEX 2X RYDEX INVERSE RYDEX 2X RYDEX INVERSE
S&P 500 2X S&P 500 S&P MIDCAP 2X S&P MIDCAP
ETF* ETF* 400 ETF* 400 ETF*
------------ ------------- ----------- -------------
INVESTMENT INCOME
Interest.............................. $ 76,662 $ 878,370 $ 24,759 $ 251,695
Dividends............................. 610,930 -- 74,048 --
------------ ------------ ----------- -----------
Total Income....................... 687,592 878,370 98,807 251,695
------------ ------------ ----------- -----------
EXPENSES
Management Fee........................ 234,559 343,748 42,704 75,009
Trustee Fees.......................... 1,043 2,586 374 548
------------ ------------ ----------- -----------
Total Expenses..................... 235,602 346,334 43,078 75,557
------------ ------------ ----------- -----------
Net Investment Income................... 451,990 532,036 55,729 176,138
------------ ------------ ----------- -----------
REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENTS
Net Realized Gain (Loss) From:
Investments........................... (6,444,138) -- (1,954,483) --
Futures Contracts..................... (23,003,009) 32,457,153 (578,526) 2,732,362
Swap Contracts........................ (4,887,927) 6,822,931 (3,891,506) 8,029,026
------------ ------------ ----------- -----------
Net Realized Gain (Loss)........... (34,335,074) 39,280,084 (6,424,515) 10,761,388
Net Change in Unrealized
Appreciation/Depreciation on:
Investment Securities................. (14,106,945) -- (774,089) --
Futures Contracts..................... (2,745,632) (10,472,763) 149,000 (466,566)
Swap Contracts........................ -- -- 236,602 (1,405,948)
------------ ------------ ----------- -----------
Net Change in Unrealized
Appreciation/Depreciation on
Investments........................... (16,852,577) (10,472,763) (388,487) (1,872,514)
------------ ------------ ----------- -----------
Net Realized and Unrealized Gain (Loss)
on Investments, Futures and Swap
Contracts............................. (51,187,651) 28,807,321 (6,813,002) 8,888,874
------------ ------------ ----------- -----------
Contribution from Advisor............. -- -- -- 148,040
NET INCREASE (DECREASE) IN NET
ASSETS RESULTING FROM
OPERATIONS....................... $(50,735,661) $ 29,339,357 $(6,757,273) $ 9,213,052
============ ============ =========== ===========
</Table>
* The Fund commenced operations on November 5, 2007.
See Notes to Financial Statements.
ANNUAL REPORT 75
STATEMENTS OF OPERATIONS (continued) For the Year Ended
October 31, 2008
- --------------------------------------------------------------------------------
<Table>
<Caption>
RYDEX RYDEX INVERSE
RYDEX 2X RYDEX INVERSE 2X S&P 2X S&P
RUSSELL 2000 2X RUSSELL SELECT SECTOR SELECT SECTOR
ETF* 2000 ETF* ENERGY ETF** ENERGY ETF**
------------ ------------- ------------- -------------
INVESTMENT INCOME
Interest............................... $ 29,091 $ 442,146 $ 2,447 $ 42,262
Dividends.............................. 110,415 -- 19,165 --
Foreign Taxes Withheld................. (28) -- -- --
----------- ----------- ----------- -----------
Total Income........................ 139,478 442,146 21,612 42,262
----------- ----------- ----------- -----------
EXPENSES
Management Fee......................... 60,672 146,940 13,192 23,721
Trustee Fees........................... 447 1,104 129 116
----------- ----------- ----------- -----------
Total Expenses...................... 61,119 148,044 13,321 23,837
----------- ----------- ----------- -----------
Net Investment Income.................... 78,359 294,102 8,291 18,425
----------- ----------- ----------- -----------
REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENTS
Net Realized Gain (Loss) From:
Investments............................ (2,190,191) -- (1,761,058) --
Futures Contracts...................... (2,108,860) 7,190,827 (17,476) (231,238)
Swap Contracts......................... (1,026,866) 5,567,000 (3,036,765) 6,892,306
----------- ----------- ----------- -----------
Net Realized Gain (Loss)............ (5,325,917) 12,757,827 (4,815,299) 6,661,068
Net Change in Unrealized
Appreciation/Depreciation on:
Investment Securities.................. (1,010,791) -- 93,019 --
Futures Contracts...................... (1,424,665) (2,227,460) -- --
Swap Contracts......................... -- (1,755,839) 652,119 (2,974,767)
----------- ----------- ----------- -----------
Net Change in Unrealized
Appreciation/Depreciation on
Investments............................ (2,435,456) (3,983,299) 745,138 (2,974,767)
----------- ----------- ----------- -----------
Net Realized and Unrealized Gain (Loss)
on Investments, Futures and Swap
Contracts.............................. (7,761,373) 8,774,528 (4,070,161) 3,686,301
----------- ----------- ----------- -----------
Contribution from Advisor.............. -- 315,120 -- --
NET INCREASE (DECREASE) IN NET
ASSETS RESULTING FROM OPERATIONS.. $(7,683,014) $ 9,383,750 $(4,061,870) $ 3,704,726
=========== =========== =========== ===========
</Table>
* The Fund commenced operations on November 5, 2007.
** The Fund commenced operations on June 10, 2008.
See Notes to Financial Statements.
ANNUAL REPORT 76
STATEMENTS OF OPERATIONS (continued) For the Year Ended
October 31, 2008
- --------------------------------------------------------------------------------
<Table>
<Caption>
RYDEX RYDEX INVERSE RYDEX RYDEX INVERSE
2X S&P 2X S&P 2X S&P 2X S&P
SELECT SECTOR SELECT SECTOR SELECT SECTOR SELECT SECTOR
FINANCIAL ETF* FINANCIAL ETF* TECHNOLOGY ETF* TECHNOLOGY ETF*
-------------- -------------- --------------- ---------------
INVESTMENT INCOME
Interest.......................... $ 3,492 $ 38,186 $ 2,821 $ 39,399
Dividends......................... 145,092 -- 28,811 --
------------ ----------- ----------- -----------
Total Income................... 148,584 38,186 31,632 39,399
------------ ----------- ----------- -----------
EXPENSES
Management Fee.................... 31,560 21,917 15,554 23,359
Trustee Fees...................... 94 156 106 140
------------ ----------- ----------- -----------
Total Expenses................. 31,654 22,073 15,660 23,499
------------ ----------- ----------- -----------
Net Investment Income............... 116,930 16,113 15,972 15,900
------------ ----------- ----------- -----------
REALIZED AND UNREALIZED GAIN (LOSS)
ON INVESTMENTS
Net Realized Gain (Loss) From:
Investments....................... (6,239,988) -- (1,037,004) --
Futures Contracts................. (57,188) 406,617 (6,471) (169,783)
Swap Contracts.................... (11,943,943) 2,577,966 (2,859,995) 6,464,008
------------ ----------- ----------- -----------
Net Realized Gain (Loss)....... (18,241,119) 2,984,583 (3,903,470) 6,294,225
Net Change in Unrealized
Appreciation/Depreciation on:
Investment Securities............. (323,181) -- (829,446) --
Futures Contracts................. -- 1,387 -- --
Swap Contracts.................... 2,566,561 (3,320,090) 343,569 (1,879,566)
------------ ----------- ----------- -----------
Net Change in Unrealized
Appreciation/Depreciation on
Investments....................... 2,243,380 (3,318,703) (485,877) (1,879,566)
------------ ----------- ----------- -----------
Net Realized and Unrealized Gain
(Loss) on Investments, Futures and
Swap Contracts.................... (15,997,739) (334,120) (4,389,347) 4,414,659
------------ ----------- ----------- -----------
NET INCREASE (DECREASE) IN NET
ASSETS RESULTING FROM
OPERATIONS................... $(15,880,809) $ (318,007) $(4,373,375) $ 4,430,559
============ =========== =========== ===========
</Table>
* The Fund commenced operations on June 10, 2008.
See Notes to Financial Statements.
ANNUAL REPORT 77
STATEMENTS OF OPERATIONS (concluded) For the Year Ended
October 31, 2008
- --------------------------------------------------------------------------------
<Table>
<Caption>
RYDEX RYDEX INVERSE
2X S&P 2X S&P
SELECT SECTOR SELECT SECTOR
HEALTH CARE ETF* HEALTH CARE ETF*
---------------- ----------------
INVESTMENT INCOME
Interest............................................ $ 4,050 $ 37,257
Dividends........................................... 39,429 --
----------- -----------
Total Income..................................... 43,479 37,257
----------- -----------
EXPENSES
Management Fee...................................... 20,180 20,965
Trustee Fees........................................ 119 126
----------- -----------
Total Expenses................................... 20,299 21,091
----------- -----------
Net Investment Income................................. 23,180 16,166
----------- -----------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS
Net Realized Gain (Loss) From:
Investments......................................... (393,465) --
Futures Contracts................................... (17,476) (168,972)
Swap Contracts...................................... (1,742,870) 2,781,930
----------- -----------
Net Realized Gain (Loss)......................... (2,153,811) 2,612,958
Net Change in Unrealized Appreciation/Depreciation on:
Investment Securities............................... (525,150) --
Swap Contracts...................................... 461,513 (1,728,947)
----------- -----------
Net Change in Unrealized Appreciation/Depreciation on
Investments......................................... (63,637) (1,728,947)
----------- -----------
Net Realized and Unrealized Gain (Loss) on
Investments, Futures and Swap Contracts............. (2,217,448) 884,011
----------- -----------
NET INCREASE (DECREASE) IN NET ASSETS RESULTING
FROM OPERATIONS................................ $(2,194,268) $ 900,177
=========== ===========
</Table>
* The Fund commenced operations on June 10, 2008.
See Notes to Financial Statements.
ANNUAL REPORT 78
STATEMENTS OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
<Table>
<Caption>
RYDEX 2X RYDEX INVERSE 2X
S&P 500 ETF S&P 500 ETF
----------------- -----------------
PERIOD ENDED PERIOD ENDED
OCTOBER 31, 2008* OCTOBER 31, 2008*
----------------- -----------------
OPERATIONS
Net Investment Income............................... $ 451,990 $ 532,036
Net Realized Gain (Loss)............................ (34,335,074) 39,280,084
Net Change in Unrealized Appreciation/Depreciation
on Investments................................... (16,852,577) (10,472,763)
------------ ------------
Net Increase (Decrease) in Net Assets Resulting From
Operations....................................... (50,735,661) 29,339,357
------------ ------------
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net Investment Income............................... (363,939) (552,721)
------------ ------------
SHAREHOLDER TRANSACTIONS
Proceeds From Shares Sold........................... 168,610,953 112,256,284
Value of Shares Reinvested.......................... -- --
Value of Shares Repurchased......................... (4,147,460) (74,937,363)
------------ ------------
Net Increase in Net Assets Resulting From Share
Transactions..................................... 164,463,493 37,318,921
------------ ------------
Increase in Net Assets........................... 113,363,893 66,105,557
NET ASSETS--BEGINNING OF PERIOD....................... -- --
------------ ------------
NET ASSETS--END OF PERIOD(1).......................... $113,363,893 $ 66,105,557
============ ============
(1) Including Undistributed Net Investment Income..... $ 81,221 $ --
============ ============
CHANGES IN SHARES OUTSTANDING:
Shares Sold......................................... 4,250,000 1,150,000
Shares Reinvested................................... -- --
Shares Repurchased.................................. (150,000) (650,000)
Shares Outstanding, Beginning of Period............. -- --
------------ ------------
Shares Outstanding, End of Period................... 4,100,000 500,000
============ ============
</Table>
* The Fund commenced operations on November 5, 2007.
See Notes to Financial Statements.
ANNUAL REPORT 79
STATEMENTS OF CHANGES IN NET ASSETS (continued)
- --------------------------------------------------------------------------------
<Table>
<Caption>
RYDEX 2X RYDEX INVERSE 2X
S&P MIDCAP S&P MIDCAP
400 ETF 400 ETF
----------------- -----------------
PERIOD ENDED PERIOD ENDED
OCTOBER 31, 2008* OCTOBER 31, 2008*
----------------- -----------------
OPERATIONS
Net Investment Income............................... $ 55,729 $ 176,138
Net Realized Gain (Loss)............................ (6,424,515) 10,761,388
Net Change in Unrealized Appreciation/Depreciation
on Investments................................... (388,487) (1,872,514)
Contribution from Advisor........................... -- 148,040
----------- ------------
Net Increase (Decrease) in Net Assets Resulting From
Operations....................................... (6,757,273) 9,213,052
----------- ------------
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net Investment Income............................... (50,604) (178,257)
Capital............................................. (2,868) --
----------- ------------
Total Distributions to Shareholders................. (53,472) (178,257)
----------- ------------
SHAREHOLDER TRANSACTIONS
Proceeds From Shares Sold........................... 20,963,143 26,670,531
Value of Shares Reinvested.......................... -- --
Value of Shares Repurchased......................... (8,672,372) (29,109,215)
----------- ------------
Net Increase (Decrease) in Net Assets Resulting From
Share Transactions............................... 12,290,771 (2,438,684)
----------- ------------
Increase in Net Assets........................... 5,480,026 6,596,111
NET ASSETS--BEGINNING OF PERIOD....................... -- --
----------- ------------
NET ASSETS--END OF PERIOD(1).......................... $ 5,480,026 $ 6,596,111
=========== ============
(1) Including Undistributed Net Investment Income..... $ -- $ --
=========== ============
CHANGES IN SHARES OUTSTANDING:
Shares Sold......................................... 350,000 350,000
Shares Reinvested................................... -- --
Shares Repurchased.................................. (150,000) (300,000)
Shares Outstanding, Beginning of Period............. -- --
----------- ------------
Shares Outstanding, End of Period................... 200,000 50,000
=========== ============
</Table>
* The Fund commenced operations on November 5, 2007.
See Notes to Financial Statements.
ANNUAL REPORT 80
STATEMENTS OF CHANGES IN NET ASSETS (continued)
- --------------------------------------------------------------------------------
<Table>
<Caption>
RYDEX 2X RYDEX INVERSE 2X
RUSSELL 2000 ETF RUSSELL 2000 ETF
----------------- -----------------
PERIOD ENDED PERIOD ENDED
OCTOBER 31, 2008* OCTOBER 31, 2008*
----------------- -----------------
OPERATIONS
Net Investment Income............................... $ 78,359 $ 294,102
Net Realized Gain (Loss)............................ (5,325,917) 12,757,827
Net Change in Unrealized Depreciation on
Investments...................................... (2,435,456) (3,983,299)
Contribution from Advisor........................... -- 315,120
----------- ------------
Net Increase (Decrease) in Net Assets Resulting From
Operations....................................... (7,683,014) 9,383,750
----------- ------------
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net Investment Income............................... (66,551) (298,197)
----------- ------------
Decrease in Net Assets From Distributions to
Shareholders..................................... (66,551) (298,197)
----------- ------------
SHAREHOLDER TRANSACTIONS
Proceeds From Shares Sold........................... 30,146,525 67,341,919
Value of Shares Repurchased......................... (8,955,457) (59,909,325)
----------- ------------
Net Increase in Net Assets Resulting From Share
Transactions..................................... 21,191,068 7,432,594
----------- ------------
Increase in Net Assets........................... 13,441,503 16,518,147
NET ASSETS--BEGINNING OF PERIOD....................... -- --
----------- ------------
NET ASSETS--END OF PERIOD(1).......................... $13,441,503 $ 16,518,147
=========== ============
(1) Including Undistributed Net Investment Income..... $ 2,359 $ --
=========== ============
CHANGES IN SHARES OUTSTANDING:
Shares Sold......................................... 600,000 850,000
Shares Reinvested................................... -- --
Shares Repurchased.................................. (150,000) (700,000)
Shares Outstanding, Beginning of Period............. -- --
----------- ------------
Shares Outstanding, End of Period................... 450,000 150,000
=========== ============
</Table>
* The Fund commenced operations on November 5, 2007.
See Notes to Financial Statements.
ANNUAL REPORT 81
STATEMENTS OF CHANGES IN NET ASSETS (continued)
- --------------------------------------------------------------------------------
<Table>
<Caption>
RYDEX 2X RYDEX INVERSE 2X
S&P SELECT SECTOR S&P SELECT SECTOR
ENERGY ETF ENERGY ETF
----------------- -----------------
PERIOD ENDED PERIOD ENDED
OCTOBER 31, 2008* OCTOBER 31, 2008*
----------------- -----------------
OPERATIONS
Net Investment Income............................... $ 8,291 $ 18,425
Net Realized Gain (Loss)............................ (4,815,299) 6,661,068
Net Change in Unrealized Appreciation/Depreciation
on Investments................................... 745,138 (2,974,767)
----------- -----------
Net Increase (Decrease) in Net Assets Resulting From
Operations....................................... (4,061,870) 3,704,726
----------- -----------
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net Investment Income............................... (7,308) (19,874)
----------- -----------
SHAREHOLDER TRANSACTIONS
Proceeds From Shares Sold........................... 10,214,317 7,500,000
Value of Shares Repurchased......................... (2,101,344) (5,589,313)
----------- -----------
Net Increase in Net Assets Resulting From Share
Transactions..................................... 8,112,973 1,910,687
----------- -----------
Increase in Net Assets........................... 4,043,795 5,595,539
NET ASSETS--BEGINNING OF PERIOD....................... -- --
----------- -----------
NET ASSETS--END OF PERIOD(1).......................... $ 4,043,795 $ 5,595,539
=========== ===========
(1) Including Undistributed Net Investment Income..... $ 983 $ --
=========== ===========
CHANGES IN SHARES OUTSTANDING:
Shares Sold......................................... 250,000 100,000
Shares Reinvested................................... -- --
Shares Repurchased.................................. (50,000) (50,000)
Shares Outstanding, Beginning of Period............. -- --
----------- -----------
Shares Outstanding, End of Period................... 200,000 50,000
=========== ===========
</Table>
* The Fund commenced operations on June 10, 2008.
See Notes to Financial Statements.
ANNUAL REPORT 82
STATEMENTS OF CHANGES IN NET ASSETS (continued)
- --------------------------------------------------------------------------------
<Table>
<Caption>
RYDEX 2X RYDEX INVERSE 2X
S&P SELECT SECTOR S&P SELECT SECTOR
FINANCIAL ETF FINANCIAL ETF
----------------- -----------------
PERIOD ENDED PERIOD ENDED
OCTOBER 31, 2008* OCTOBER 31, 2008*
----------------- -----------------
OPERATIONS
Net Investment Income............................... $ 116,930 $ 16,113
Net Realized Gain (Loss)............................ (18,241,119) 2,984,583
Net Change in Unrealized Appreciation/Depreciation
on Investments................................... 2,243,380 (3,318,703)
------------ -----------
Net Decrease in Net Assets Resulting From
Operations....................................... (15,880,809) (318,007)
------------ -----------
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net Investment Income............................... (65,308) (18,187)
------------ -----------
SHAREHOLDER TRANSACTIONS
Proceeds From Shares Sold........................... 35,235,683 7,500,000
Value of Shares Reinvested.......................... -- --
Value of Shares Repurchased......................... (8,679,296) --
------------ -----------
Net Increase in Net Assets Resulting From Share
Transactions..................................... 26,556,387 7,500,000
------------ -----------
Increase in Net Assets........................... 10,610,270 7,163,806
NET ASSETS--BEGINNING OF PERIOD....................... -- --
------------ -----------
NET ASSETS--END OF PERIOD(1).......................... $ 10,610,270 $ 7,163,806
============ ===========
(1) Including Undistributed Net Investment Income..... $ 44,812 $ --
============ ===========
CHANGES IN SHARES OUTSTANDING:
Shares Sold......................................... 750,000 100,000
Shares Reinvested................................... -- --
Shares Repurchased.................................. (350,000) --
Shares Outstanding, Beginning of Period............. -- --
------------ -----------
Shares Outstanding, End of Period................... 400,000 100,000
============ ===========
</Table>
* The Fund commenced operations on June 10, 2008.
See Notes to Financial Statements.
ANNUAL REPORT 83
STATEMENTS OF CHANGES IN NET ASSETS (continued)
- --------------------------------------------------------------------------------
<Table>
<Caption>
RYDEX 2X RYDEX INVERSE 2X
S&P SELECT SECTOR S&P SELECT SECTOR
TECHNOLOGY ETF TECHNOLOGY ETF
----------------- -----------------
PERIOD ENDED PERIOD ENDED
OCTOBER 31, 2008* OCTOBER 31, 2008*
----------------- -----------------
OPERATIONS
Net Investment Income............................... $ 15,972 $ 15,900
Net Realized Gain (Loss)............................ (3,903,470) 6,294,225
Net Change in Unrealized Depreciation on
Investments...................................... (485,877) (1,879,566)
----------- -----------
Net Increase (Decrease) in Net Assets Resulting From
Operations....................................... (4,373,375) 4,430,559
----------- -----------
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net Investment Income............................... (11,327) (18,238)
----------- -----------
SHAREHOLDER TRANSACTIONS
Proceeds From Shares Sold........................... 7,500,000 7,500,000
Value of Shares Reinvested.......................... -- --
Value of Shares Repurchased......................... -- (5,443,858)
----------- -----------
Net Increase in Net Assets Resulting From Share
Transactions..................................... 7,500,000 2,056,142
----------- -----------
Increase in Net Assets........................... 3,115,298 6,468,463
NET ASSETS--BEGINNING OF PERIOD....................... -- --
----------- -----------
NET ASSETS--END OF PERIOD(1).......................... $ 3,115,298 $ 6,468,463
=========== ===========
(1) Including Undistributed Net Investment Income..... $ 4,645 $ --
=========== ===========
CHANGES IN SHARES OUTSTANDING:
Shares Sold......................................... 100,000 100,000
Shares Reinvested................................... -- --
Shares Repurchased.................................. -- (50,000)
Shares Outstanding, Beginning of Period............. -- --
----------- -----------
Shares Outstanding, End of Period................... 100,000 50,000
=========== ===========
</Table>
* The Fund commenced operations on June 10, 2008.
See Notes to Financial Statements.
ANNUAL REPORT 84
STATEMENTS OF CHANGES IN NET ASSETS (concluded)
- --------------------------------------------------------------------------------
<Table>
<Caption>
RYDEX 2X RYDEX INVERSE 2X
S&P SELECT SECTOR S&P SELECT SECTOR
HEALTH CARE ETF HEALTH CARE ETF
----------------- -----------------
PERIOD ENDED PERIOD ENDED
OCTOBER 31, 2008* OCTOBER 31, 2008*
----------------- -----------------
OPERATIONS
Net Investment Income............................... $ 23,180 $ 16,166
Net Realized Gain (Loss)............................ (2,153,811) 2,612,958
Net Change in Unrealized Depreciation on
Investments...................................... (63,637) (1,728,947)
----------- -----------
Net (Decrease) in Net Assets Resulting From
Operations....................................... (2,194,268) 900,177
----------- -----------
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net Investment Income............................... (22,169) (18,758)
----------- -----------
SHAREHOLDER TRANSACTIONS
Proceeds From Shares Sold........................... 7,500,000 7,500,000
Value of Shares Reinvested.......................... -- --
Value of Shares Repurchased......................... -- --
----------- -----------
Net Increase in Net Assets Resulting From Share
Transactions..................................... 7,500,000 7,500,000
----------- -----------
Increase in Net Assets........................... 5,283,563 8,381,419
NET ASSETS--BEGINNING OF PERIOD....................... -- --
----------- -----------
NET ASSETS--END OF PERIOD(1).......................... $ 5,283,563 $ 8,381,419
=========== ===========
(1) Including Undistributed Net Investment Income..... $ 1,011 $ --
=========== ===========
CHANGES IN SHARES OUTSTANDING:
Shares Sold......................................... 100,000 100,000
Shares Reinvested................................... -- --
Shares Outstanding, Beginning of Period............. -- --
----------- -----------
Shares Outstanding, End of Period................... 100,000 100,000
=========== ===========
</Table>
* The Fund commenced operations on June 10, 2008.
See Notes to Financial Statements.
ANNUAL REPORT 85
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
<Table>
<Caption>
RYDEX INVERSE
RYDEX 2X 2X
S&P 500 ETF S&P 500 ETF
--------------- ---------------
PERIOD ENDED PERIOD ENDED
OCTOBER 31, OCTOBER 31,
2008* 2008*
--------------- ---------------
PER SHARE OPERATING PERFORMANCE:
NET ASSET VALUE AT BEGINNING OF PERIOD............... $75.00 $75.00
-------- -------
Net Investment Income**.............................. 0.61 1.04
Net Realized and Unrealized Gain (Loss) on
Investments........................................ (47.27) 57.20
-------- -------
TOTAL FROM INVESTMENT OPERATIONS..................... (46.66) 58.24
-------- -------
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net Investment Income................................ (0.69) (1.03)
-------- -------
NET ASSET VALUE AT END OF PERIOD..................... $27.65 $132.21
======== =======
TOTAL RETURN***...................................... (62.68)% 78.27%
RATIOS/SUPPLEMENTAL DATA:
Net Assets at End of Period (000's Omitted).......... $113,364 $66,106
RATIO TO AVERAGE NET ASSETS OF:
Expenses............................................. 0.70%**** 0.71%****
Net Investment Income................................ 1.35%**** 1.09%****
Portfolio Turnover Rate+............................. 44% --
</Table>
* The Fund commenced operations on November 5, 2007.
** Based on average shares outstanding.
*** Total investment return is calculated assuming an initial investment
made at the net asset value at the beginning of the period, reinvestment
of all dividends and distribution at net asset value during the period,
and redemption on the last day of the period. Transaction fees are not
reflected in the calculation of total investment return. Total
investment return calculated for a period of less than one year is not
annualized.
**** Annualized.
+ Portfolio turnover is not annualized and does not include securities
received or delivered from processing creations or redemptions.
Portfolio turnover rate is calculated without regard to instruments
having a maturity of less than one year from acquisition or derivative
instruments (including swap agreements and futures contracts). The
portfolio turnover rate can be high and volatile due to the sales and
purchases of fund shares during the period. The portfolio turnover rate
for inverse funds is zero because these funds only hold instruments
which are not included in the portfolio turnover rate calculation, as
previously disclosed.
See Notes to Financial Statements.
ANNUAL REPORT 86
FINANCIAL HIGHLIGHTS (continued)
- --------------------------------------------------------------------------------
<Table>
<Caption>
RYDEX 2X S&P RYDEX INVERSE 2X
MIDCAP 400 ETF S&P MIDCAP 400 ETF
----------------- ------------------
PERIOD ENDED PERIOD ENDED
OCTOBER 31, 2008* OCTOBER 31, 2008*
----------------- ------------------
PER SHARE OPERATING PERFORMANCE:
NET ASSET VALUE AT BEGINNING OF PERIOD............ $75.00 $75.00
------ -------
Net Investment Income**........................... 0.56 1.40
Contribution from Advisor......................... -- 1.17
Net Realized and Unrealized Gain (Loss) on
Investments..................................... (47.62) 55.83
------ -------
TOTAL FROM INVESTMENT OPERATIONS.................. (47.06) 58.40
------ -------
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net Investment Income............................. (0.53) (1.48)
Capital........................................... (0.01) --
------ -------
Total Distributions............................... (0.54) (1.48)
------ -------
NET ASSET VALUE AT END OF PERIOD.................. $27.40 $131.92
====== =======
TOTAL RETURN***................................... (63.12)% 78.90%(a)
RATIOS/SUPPLEMENTAL DATA:
Net Assets at End of Period (000's Omitted)....... $5,480 $6,596
RATIO TO AVERAGE NET ASSETS OF:
Expenses.......................................... 0.71%**** 0.71%****
Net Investment Income............................. 0.94%**** 1.65%****
Portfolio Turnover Rate+.......................... 234% --
</Table>
* The Fund commenced operations on November 5, 2007.
** Based on average shares outstanding.
*** Total investment return is calculated assuming an initial investment
made at the net asset value at the beginning of the period, reinvestment
of all dividends and distribution at net asset value during the period,
and redemption on the last day of the period. Transaction fees are not
reflected in the calculation of total investment return. Total
investment return calculated for a period of less than one year is not
annualized.
**** Annualized.
(a) For the period ending October 31, 2008, 1.77% of the Fund's total return
consisted of a voluntary reimbursement by the advisor for a realized
investment loss. Excluding this item, total return would have been
77.13%.
+ Portfolio turnover is not annualized and does not include securities
received or delivered from processing creations or redemptions.
Portfolio turnover rate is calculated without regard to instruments
having a maturity of less than one year from acquisition or derivative
instruments (including swap agreements and futures contracts). The
portfolio turnover rate can be high and volatile due to the sales and
purchases of fund shares during the period. The portfolio turnover rate
for inverse funds is zero because these funds only hold instruments
which are not included in the portfolio turnover rate calculation, as
previously disclosed.
See Notes to Financial Statements.
ANNUAL REPORT 87
FINANCIAL HIGHLIGHTS (continued)
- --------------------------------------------------------------------------------
<Table>
<Caption>
RYDEX 2X RYDEX INVERSE 2X
RUSSELL 2000 ETF RUSSELL 2000 ETF
----------------- -----------------
PERIOD ENDED PERIOD ENDED
OCTOBER 31, 2008* OCTOBER 31, 2008*
----------------- -----------------
PER SHARE OPERATING PERFORMANCE:
NET ASSET VALUE AT BEGINNING OF PERIOD............... $75.00 $75.00
------- -------
Net Investment Income**.............................. 0.51 1.21
Contribution from Advisor............................ -- 1.29
Net Realized and Unrealized Gain (Loss) on
Investments........................................ (45.09) 33.76
------- -------
TOTAL FROM INVESTMENT OPERATIONS..................... (44.58) 36.26
------- -------
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net Investment Income................................ (0.55) (1.14)
------- -------
NET ASSET VALUE AT END OF PERIOD..................... $29.87 $110.12
======= =======
TOTAL RETURN***...................................... (59.79)% 48.79%(a)
RATIOS/SUPPLEMENTAL DATA:
Net Assets at End of Period (000's Omitted).......... $13,442 $16,518
RATIO TO AVERAGE NET ASSETS OF:
Expenses............................................. 0.71%**** 0.71%****
Net Investment Income................................ 0.93%**** 1.41%****
Portfolio Turnover Rate+............................. 192% --
</Table>
* The Fund commenced operations on November 5, 2007.
** Based on average shares outstanding.
*** Total investment return is calculated assuming an initial investment
made at the net asset value at the beginning of the period, reinvestment
of all dividends and distribution at net asset value during the period,
and redemption on the last day of the period. Transaction fees are not
reflected in the calculation of total investment return. Total
investment return calculated for a period of less than one year is not
annualized.
**** Annualized.
(a) For the period ending October 31, 2008, 1.19% of the Fund's total return
consisted of a voluntary reimbursement by the advisor for a realized
investment loss. Excluding this item, total return would have been
47.60%.
+ Portfolio turnover is not annualized and does not include securities
received or delivered from processing creations or redemptions.
Portfolio turnover rate is calculated without regard to instruments
having a maturity of less than one year from acquisition or derivative
instruments (including swap agreements and futures contracts). The
portfolio turnover rate can be high and volatile due to the sales and
purchases of fund shares during the period. The portfolio turnover rate
for inverse funds is zero because these funds only hold instruments
which are not included in the portfolio turnover rate calculation, as
previously disclosed.
See Notes to Financial Statements.
ANNUAL REPORT 88
FINANCIAL HIGHLIGHTS (continued)
- --------------------------------------------------------------------------------
<Table>
<Caption>
RYDEX 2X RYDEX INVERSE 2X
S&P SELECT SECTOR S&P SELECT SECTOR
ENERGY ETF ENERGY ETF
----------------- -----------------
PERIOD ENDED PERIOD ENDED
OCTOBER 31, 2008* OCTOBER 31, 2008*
----------------- -----------------
PER SHARE OPERATING PERFORMANCE:
NET ASSET VALUE AT BEGINNING OF PERIOD............... $75.00 $75.00
------ -------
Net Investment Income**.............................. 0.09 0.22
Net Realized and Unrealized Gain (Loss) on
Investments........................................ (54.72) 37.09
------ -------
TOTAL FROM INVESTMENT OPERATIONS..................... (54.63) 37.31
------ -------
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net Investment Income................................ (0.15) (0.40)
------ -------
NET ASSET VALUE AT END OF PERIOD..................... $20.22 $111.91
====== =======
TOTAL RETURN***...................................... (72.94)% 49.75%
RATIOS/SUPPLEMENTAL DATA:
Net Assets at End of Period (000's Omitted).......... $4,044 $5,596
RATIO TO AVERAGE NET ASSETS OF:
Expenses............................................. 0.71%**** 0.71%****
Net Investment Income................................ 0.44%**** 0.55%****
Portfolio Turnover Rate+............................. 105% --
</Table>
* The Fund commenced operations on June 10, 2008.
** Based on average shares outstanding.
*** Total investment return is calculated assuming an initial investment
made at the net asset value at the beginning of the period, reinvestment
of all dividends and distribution at net asset value during the period,
and redemption on the last day of the period. Transaction fees are not
reflected in the calculation of total investment return. Total
investment return calculated for a period of less than one year is not
annualized.
**** Annualized.
+ Portfolio turnover is not annualized and does not include securities
received or delivered from processing creations or redemptions.
Portfolio turnover rate is calculated without regard to instruments
having a maturity of less than one year from acquisition or derivative
instruments (including swap agreements and futures contracts). The
portfolio turnover rate can be high and volatile due to the sales and
purchases of fund shares during the period. The portfolio turnover rate
for inverse funds is zero because these funds only hold instruments
which are not included in the portfolio turnover rate calculation, as
previously disclosed.
See Notes to Financial Statements.
ANNUAL REPORT 89
FINANCIAL HIGHLIGHTS (continued)
- --------------------------------------------------------------------------------
<Table>
<Caption>
RYDEX 2X RYDEX INVERSE 2X
S&P SELECT SECTOR S&P SELECT SECTOR
FINANCIAL ETF FINANCIAL ETF
----------------- -----------------
PERIOD ENDED PERIOD ENDED
OCTOBER 31, 2008* OCTOBER 31, 2008*
----------------- -----------------
PER SHARE OPERATING PERFORMANCE:
NET ASSET VALUE AT BEGINNING OF PERIOD............... $75.00 $75.00
------- ------
Net Investment Income**.............................. 0.45 0.16
Net Realized and Unrealized Gain (Loss) on
Investments........................................ (48.76) (3.34)
------- ------
TOTAL FROM INVESTMENT OPERATIONS..................... (48.31) (3.18)
------- ------
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net Investment Income................................ (0.16) (0.18)
------- ------
NET ASSET VALUE AT END OF PERIOD..................... $26.53 $71.64
======= ======
TOTAL RETURN***...................................... (64.51)% (4.19)%
RATIOS/SUPPLEMENTAL DATA:
Net Assets at End of Period (000's Omitted).......... $10,610 $7,164
RATIO TO AVERAGE NET ASSETS OF:
Expenses............................................. 0.71%**** 0.71%****
Net Investment Income................................ 2.60%**** 0.52%****
Portfolio Turnover Rate+............................. 177% --
</Table>
* The Fund commenced operations on June 10, 2008.
** Based on average shares outstanding.
*** Total investment return is calculated assuming an initial investment
made at the net asset value at the beginning of the period, reinvestment
of all dividends and distribution at net asset value during the period,
and redemption on the last day of the period. Transaction fees are not
reflected in the calculation of total investment return. Total
investment return calculated for a period of less than one year is not
annualized.
**** Annualized.
+ Portfolio turnover is not annualized and does not include securities
received or delivered from processing creations or redemptions.
Portfolio turnover rate is calculated without regard to instruments
having a maturity of less than one year from acquisition or derivative
instruments (including swap agreements and futures contracts). The
portfolio turnover rate can be high and volatile due to the sales and
purchases of fund shares during the period. The portfolio turnover rate
for inverse funds is zero because these funds only hold instruments
which are not included in the portfolio turnover rate calculation, as
previously disclosed.
See Notes to Financial Statements.
ANNUAL REPORT 90
FINANCIAL HIGHLIGHTS (continued)
- --------------------------------------------------------------------------------
<Table>
<Caption>
RYDEX 2X RYDEX INVERSE 2X
S&P SELECT SECTOR S&P SELECT SECTOR
TECHNOLOGY ETF TECHNOLOGY ETF
----------------- -----------------
PERIOD ENDED PERIOD ENDED
OCTOBER 31, 2008* OCTOBER 31, 2008*
----------------- -----------------
PER SHARE OPERATING PERFORMANCE:
NET ASSET VALUE AT BEGINNING OF PERIOD............... $75.00 $75.00
------ -------
Net Investment Income**.............................. 0.16 0.18
Net Realized and Unrealized Gain (Loss) on
Investments........................................ (43.90) 54.37
------ -------
TOTAL FROM INVESTMENT OPERATIONS..................... (43.74) 54.55
------ -------
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net Investment Income................................ (0.11) (0.18)
------ -------
NET ASSET VALUE AT END OF PERIOD..................... $31.15 $129.37
====== =======
TOTAL RETURN***...................................... (58.36)% 72.79%
RATIOS/SUPPLEMENTAL DATA:
Net Assets at End of Period (000's Omitted).......... $3,115 $6,468
RATIO TO AVERAGE NET ASSETS OF:
Expenses............................................. 0.71%**** 0.71%****
Net Investment Income................................ 0.72%**** 0.48%****
Portfolio Turnover Rate+............................. 65% --
</Table>
* The Fund commenced operations on June 10, 2008.
** Based on average shares outstanding.
*** Total investment return is calculated assuming an initial investment
made at the net asset value at the beginning of the period, reinvestment
of all dividends and distribution at net asset value during the period,
and redemption on the last day of the period. Transaction fees are not
reflected in the calculation of total investment return. Total
investment return calculated for a period of less than one year is not
annualized.
**** Annualized.
+ Portfolio turnover is not annualized and does not include securities
received or delivered from processing creations or redemptions.
Portfolio turnover rate is calculated without regard to instruments
having a maturity of less than one year from acquisition or derivative
instruments (including swap agreements and futures contracts). The
portfolio turnover rate can be high and volatile due to the sales and
purchases of fund shares during the period. The portfolio turnover rate
for inverse funds is zero because these funds only hold instruments
which are not included in the portfolio turnover rate calculation, as
previously disclosed.
See Notes to Financial Statements.
ANNUAL REPORT 91
FINANCIAL HIGHLIGHTS (concluded)
- --------------------------------------------------------------------------------
<Table>
<Caption>
RYDEX 2X RYDEX INVERSE 2X
S&P SELECT SECTOR S&P SELECT SECTOR
HEALTH CARE ETF HEALTH CARE ETF
----------------- -----------------
PERIOD ENDED PERIOD ENDED
OCTOBER 31, 2008* OCTOBER 31, 2008*
----------------- -----------------
PER SHARE OPERATING PERFORMANCE:
NET ASSET VALUE AT BEGINNING OF PERIOD............... $75.00 $75.00
------ ------
Net Investment Income**.............................. 0.23 0.16
Net Realized and Unrealized Gain (Loss) on
Investments........................................ (22.17) 8.84
------ ------
TOTAL FROM INVESTMENT OPERATIONS..................... (21.94) 9.00
------ ------
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net Investment Income................................ (0.22) (0.19)
------ ------
NET ASSET VALUE AT END OF PERIOD..................... $52.84 $83.81
====== ======
TOTAL RETURN***...................................... (29.33)% 12.04%
RATIOS/SUPPLEMENTAL DATA:
Net Assets at End of Period (000's Omitted).......... $5,284 $8,381
RATIO TO AVERAGE NET ASSETS OF:
Expenses............................................. 0.71%**** 0.71%****
Net Investment Income................................ 0.81%**** 0.54%****
Portfolio Turnover Rate+............................. 35% --
</Table>
* The Fund commenced operations on June 10, 2008.
** Based on average shares outstanding.
*** Total investment return is calculated assuming an initial investment
made at the net asset value at the beginning of the period, reinvestment
of all dividends and distribution at net asset value during the period,
and redemption on the last day of the period. Transaction fees are not
reflected in the calculation of total investment return. Total
investment return calculated for a period of less than one year is not
annualized.
**** Annualized.
+ Portfolio turnover is not annualized and does not include securities
received or delivered from processing creations or redemptions.
Portfolio turnover rate is calculated without regard to instruments
having a maturity of less than one year from acquisition or derivative
instruments (including swap agreements and futures contracts). The
portfolio turnover rate can be high and volatile due to the sales and
purchases of fund shares during the period. The portfolio turnover rate
for inverse funds is zero because these funds only hold instruments
which are not included in the portfolio turnover rate calculation, as
previously disclosed.
See Notes to Financial Statements.
ANNUAL REPORT 92
NOTES TO FINANCIAL STATEMENTS October 31, 2008
- --------------------------------------------------------------------------------
1. ORGANIZATION
Rydex ETF Trust (the "Trust") is an open-end, management investment company
registered under the Investment Company Act of 1940, as amended (the "1940
Act"). The Trust was organized as a Delaware statutory trust on November 22,
2002. As of October 31, 2008, the Trust offers thirty one portfolios, each of
which represents a separate series of beneficial interest in the Trust (each a
"Fund," and collectively the "Funds"). The financial statements herein relate to
the following Funds: Rydex 2x S&P 500 ETF, Rydex Inverse 2x S&P 500 ETF, Rydex
2x S&P MidCap 400 ETF, Rydex Inverse 2x S&P MidCap 400 ETF, Rydex 2x Russell
2000(R) ETF, Rydex Inverse 2x Russell 2000(R) ETF, Rydex 2x S&P Select Sector
Energy ETF, Rydex Inverse 2x S&P Select Sector Energy ETF, Rydex 2x S&P Select
Sector Financial ETF, Rydex Inverse 2x S&P Select Sector Financial ETF, Rydex 2x
S&P Select Sector Technology ETF, Rydex Inverse 2x S&P Select Sector Technology
ETF, Rydex 2x S&P Select Sector Health Care ETF, and Rydex Inverse 2x S&P Select
Sector Health Care ETF. Rydex 2x S&P 500 ETF, Rydex Inverse 2x S&P 500 ETF,
Rydex 2x S&P MidCap 400 ETF, Rydex Inverse 2x S&P MidCap 400 ETF, Rydex 2x
Russell 2000(R) ETF, and Rydex Inverse 2x Russell 2000(R) ETF commenced
operations on November 5, 2007. Rydex 2x S&P Select Sector Energy ETF, Rydex
Inverse 2x S&P Select Sector Energy ETF, Rydex 2x S&P Select Sector Financial
ETF, Rydex Inverse 2x S&P Select Sector Financial ETF, Rydex 2x S&P Select
Sector Technology ETF, Rydex Inverse 2x S&P Select Sector Technology ETF, Rydex
2x S&P Select Sector Health Care ETF, and Rydex Inverse 2x S&P Select Sector
Health Care ETF commenced operations on June 10, 2008.
The Funds' investment objective is to provide investment results that match the
performance of a specific benchmark, before fees and expenses, on a daily basis.
For Rydex 2x S&P 500 ETF, Rydex 2x S&P MidCap 400 ETF, Rydex 2x Russell 2000(R)
ETF, Rydex 2x S&P Select Sector Energy ETF, Rydex 2x S&P Select Sector Financial
ETF, Rydex 2x S&P Select Sector Technology ETF, and Rydex 2x S&P Select Sector
Health Care ETF (each a "Leveraged Fund," and collectively the "Leveraged
Funds"), each Fund's benchmark is 200% of the performance of an index
representing publicly traded securities (the "Underlying Index"). For Rydex
Inverse 2x S&P 500 ETF, Rydex Inverse 2x S&P MidCap 400 ETF, Rydex Inverse 2x
Russell 2000(R) ETF, Rydex Inverse 2x S&P Select Sector Energy ETF, Rydex
Inverse 2x S&P Select Sector Financial ETF, Rydex Inverse 2x S&P Select Sector
Technology ETF, and Rydex Inverse 2x S&P Select Sector Health Care ETF (each a
"Leveraged Inverse Fund," and collectively the "Leveraged Inverse Funds"), each
Fund's benchmark is 200% of the inverse (opposite) performance of its Underlying
Index. The Underlying Index for Rydex 2x S&P 500 ETF and Rydex Inverse 2x S&P
500 ETF is the S&P 500 Index. The Underlying Index for Rydex 2x S&P MidCap 400
ETF and Rydex Inverse 2x S&P MidCap 400 ETF is the S&P MidCap 400 Index. The
Underlying Index for Rydex 2x Russell 2000(R) ETF and Rydex Inverse 2x Russell
2000(R) ETF is the Russell 2000(R) Index. The Underlying Index for Rydex 2x S&P
Select Sector Energy ETF and Rydex Inverse 2x S&P Select Sector Energy ETF is
the Energy Select Sector Index. The Underlying Index for Rydex 2x S&P Select
Sector Financial ETF and Rydex Inverse 2x S&P Select Sector Financial ETF is the
Financial Select Sector Index. The Underlying Index for Rydex 2x S&P Select
Sector Technology ETF and Rydex Inverse 2x S&P Select Sector Technology ETF is
the Technology Select Sector Index. The Underlying Index for Rydex 2x S&P Select
Sector Health Care ETF and Rydex Inverse 2x S&P Select Sector Health Care ETF is
the Health Care Select Sector Index.
The Leveraged Funds seek to achieve their objective by investing in equity
securities contained in the Underlying Index, and leveraged derivative
instruments, such as equity index swaps, futures contracts, and options on
securities, futures contracts, and stock indices. The Leveraged Inverse Funds
seek to achieve their objective by engaging in short sales of securities and
investing in leveraged derivative instruments, such as equity swaps, futures
contracts, and options on securities, futures contracts, and stock indices.
The Funds operate as index funds and are not actively managed. Adverse
performance of a security in a Fund's portfolio will ordinarily not result in
the elimination of the security from the Fund's portfolio.
The Funds issue and redeem shares on a continuous basis, at net asset value,
only in aggregations of 50,000 shares called a "Creation Unit". Creation Units
are issued and redeemed principally in-kind for securities included in the
Underlying Index.
2. SIGNIFICANT ACCOUNTING POLICIES
The preparation of financial statements in conformity with U.S. generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets, liabilities and
disclosures at the date of the financial statements and accompanying notes and
the reported amounts of increases and decreases in net assets from operations
during the reporting period. Management believes that the estimates utilized in
preparing the Funds' financial statements are reasonable and prudent; however,
actual results could differ from these estimates.
ANNUAL REPORT 93
NOTES TO FINANCIAL STATEMENTS (continued)
- --------------------------------------------------------------------------------
A. SECURITY VALUATION
Securities listed on a domestic securities exchange are valued based on the last
sale price as of the close of regular trading hours on the New York Stock
Exchange or, in the absence of recorded sales, are valued at the most recent bid
price. Securities for which the primary market is the National Association of
Securities Dealers Automated Quotations National Market System ("NASDAQ") are
valued at the NASDAQ Official Closing Price. The Funds invest in money market
mutual funds, which are valued at their Net Asset Value ("NAV"). Investments for
which market quotations are not readily are fair valued as determine in good
faith by Rydex Investments under the direction of the Board of Trustees using
methods established or ratified by the Board of Trustees. These methods include,
but are not limited to: (i) general information as to how these securities and
assets trade, (ii) in connection with futures contracts and options thereupon,
and other derivative instruments, 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 contacts and other
derivative investments trade in the cash market, and (iii) other information and
considerations, including current values in related-markets.
Financial futures contracts are valued based on the unrealized gain or loss on
the contracts that is determined by the last quoted sales price, usually as of
4:00 PM on the valuation date on the exchange on which they trade.
Domestic equity index swap agreements entered into by a Fund are valued based on
the unrealized gain or loss on the agreements that is determined by marking the
agreements to the relevant index at the close of the NYSE, usually 4:00 PM or,
if there is an afternoon trade, to the "fill". The swaps' market values are then
adjusted to include dividends accrued, financing charges and/or interest
associated with the swap agreements.
Short-term securities are valued at amortized cost, which approximates market
price. Certain U.S. Government and Agency Obligations are traded on a discount
basis; the interest rates shown on the Schedule of Investments reflect the
current yield to maturity based on amortized cost as of the date of this report.
Other securities bear interest at the rates shown, payable at fixed dates
through the maturity. The Funds may also purchase American Depository Receipts,
U.S. Government securities, and enter into repurchase agreements.
B. SECURITY TRANSACTIONS AND INCOME RECOGNITION
Security transactions are recorded on the trade date. Realized gains and losses
from portfolio fund transactions are calculated on the identified cost basis.
Dividend income is recorded on the ex-dividend date, net of foreign tax
withholdings. Interest income is recorded on the accrual basis.
C. REPURCHASE AGREEMENTS
The Funds may enter into repurchase agreements with financial institutions. In a
repurchase agreement, a Fund buys a security and the seller simultaneously
agrees to repurchase the security on a specified future date at an agreed-upon
price. The repurchase price reflects an agreed-upon interest rate during the
time the Fund's money is invested in the security. Because the security
constitutes collateral for the repurchase obligation, a repurchase agreement can
be considered a collateralized loan. The Funds follow certain procedures
designed to minimize the risks inherent in such agreements. These procedures
include effecting repurchase transactions only with large, well-capitalized and
well-established financial institutions whose condition will be continually
monitored by Rydex Investments, which acts as the Funds' investment advisor (the
"Advisor"). In addition, the value of the collateral underlying the repurchase
agreement will always be at least equal to the repurchase price, including any
accrued interest earned on the repurchase agreement. In the event of a default
or bankruptcy by a selling financial institution, the Funds will seek to
liquidate such collateral. However, the exercising of the Funds' right to
liquidate such collateral could involve certain costs or delays and, to the
extent that proceeds from any sale upon a default of the obligation to
repurchase were less than the repurchase price, the Funds could suffer a loss.
It is the current policy of the Funds not to invest in repurchase agreements
that do not mature within seven days if any such investment, together with any
other illiquid assets held by the Funds, amounts to more than 15% of the Funds'
net assets. The investments of the Funds in repurchase agreements, at times, may
be substantial when, in the view of the Advisor, liquidity or other
considerations so warrant.
D. FUTURES CONTRACTS
The Funds may enter into stock index futures contracts and options on such
futures contracts. Futures contracts are contracts for delayed delivery of
securities at a specified futures delivery date and at a specific price. Upon
entering into a contract, a 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.
ANNUAL REPORT 94
NOTES TO FINANCIAL STATEMENTS (continued)
- --------------------------------------------------------------------------------
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.
There are several risks in connection with the use of futures contracts. 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.
E. SWAP AGREEMENTS
The Funds may enter into domestic 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 index, in return for
periodic payment based on a fixed or variable interest rate. Swap agreements are
used to obtain exposure to an equity or market without owning or taking physical
custody of securities. The swap agreements are marked-to-market daily based upon
quotations from market makers and the change, if any, is recorded as unrealized
gain or loss. Payments received or made as a result of an agreement or
termination of the agreement are recognized as realized gains or losses. There
are several risks associated with the use of swap agreements that are different
from those associated with ordinary portfolio securities transactions, due to
the fact they could be considered illiquid. Although the Trust will not enter
into any swap agreement unless the Advisor believes that the other party to the
transaction is creditworthy, the Funds 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.
F. COLLATERAL
In conjunction with the use of short sales, futures and swap agreements, the
Funds are required to maintain collateral in various forms. The Funds use, where
appropriate, depending on the financial instrument utilized and the broker
involved, margin deposits at the broker, cash and/or securities segregated at
the custodian bank, discount notes, or repurchase agreements allocated to each
Fund.
G. FEDERAL INCOME TAXES
The Funds' policy is to comply with the requirements of the Internal Revenue
Code applicable to regulated investment companies and to distribute all of the
taxable income and capital gains, if any to the shareholders within the
allowable time limits. Therefore, no provision for Federal income taxes is
required.
The Funds adopted Financial Accounting Standards Board (FASB) Interpretation No.
48 "Accounting for Uncertainty in Income Taxes" ("FIN 48"). FIN 48 provides
guidance for how uncertain tax positions should be recognized, measured,
presented and disclosed in the financial statements. FIN 48 requires the
evaluation of tax positions taken or expected to be taken in the course of
preparing the Funds' tax returns to determine whether the tax positions are
"more-likely-than-not" of being sustained by the applicable tax authority. Tax
positions not deemed to meet the more-likely-than-not threshold would be
recorded as a tax benefit or expense in the current year. Management has
analyzed the Funds' tax positions taken on federal income tax returns for all
open tax years for purposes of complying with FIN 48, and has concluded that no
provision for income tax was required in the Funds' financial statements.
The Funds file U.S. federal income tax returns and returns in various foreign
jurisdictions in which they invest. While the statute of limitations remains
open to examine the Funds' U.S. federal income tax returns, no examinations are
in progress or anticipated at this time.
Income and capital gain distributions are determined in accordance with Federal
income tax regulations, which may differ from U.S. generally accepted accounting
principles. These differences are primarily due to differing treatments for tax
equalization, in-kind redemptions, income reclassifications from real estate
investment trusts ("REITs") and losses deferred due to wash sales.
In order to present paid-in-capital, undistributed net investment income (loss)
and accumulated net realized gain (loss) on investments on the statement of
assets and liabilities that more closely represent their tax character, certain
adjustments have been made to these accounts. These adjustments have no effect
on net assets or net asset value per share. The most significant of these
adjustments are for tax equalization and net capital gains resulting from in-
kind redemptions which, because they are non-taxable to the Funds, and therefore
are not distributed to existing Fund shareholders, are reclassified to paid-in-
capital. The in-kind net capital gains for the
ANNUAL REPORT 95
NOTES TO FINANCIAL STATEMENTS (continued)
- --------------------------------------------------------------------------------
period ended October 31, 2008 are disclosed in each Fund's Statement of
Operations. For the period ended October 31, 2008, the adjustments for the Funds
were as follows:
<Table>
<Caption>
UNDISTRIBUTED ACCUMULATED
PAID-IN NET INVESTMENT NET REALIZED
CAPITAL INCOME (LOSS) GAIN (LOSS)
----------- -------------- ------------
Rydex 2x S&P 500 ETF................................. $ -- $(6,830) $ 6,830
Rydex Inverse 2x S&P 500 ETF......................... 16,151,688 20,685 (16,172,373)
Rydex 2x S&P MidCap 400 ETF.......................... -- (5,125) 5,125
Rydex Inverse 2x S&P MidCap 400 ETF.................. 8,249,896 2,119 (8,252,015)
Rydex 2x Russell 2000(R) ETF......................... -- (9,449) 9,449
Rydex Inverse 2x Russell 2000(R) ETF................. 8,672,281 4,095 (8,676,376)
Rydex 2x S&P Select Sector Energy ETF................ -- -- --
Rydex Inverse 2x S&P Select Sector Energy ETF........ 2,335,487 1,449 (2,336,936)
Rydex 2x S&P Select Sector Financial ETF............. -- (6,810) 6,810
Rydex Inverse 2x S&P Select Sector Financial ETF..... -- 2,074 (2,074)
Rydex 2x S&P Select Sector Technology ETF............ -- -- --
Rydex Inverse 2x S&P Select Sector Technology ETF.... 2,484,042 2,338 (2,486,380)
Rydex 2x S&P Select Sector Health Care ETF........... -- -- --
Rydex Inverse 2x S&P Select Sector Health Care ETF... -- 2,592 (2,592)
</Table>
For the period ended October 31, 2008, there were no significant differences
between the book basis and tax basis of net unrealized appreciation
(depreciation) in value of investments other than tax deferral of losses on wash
sales and the cumulative return of capital payments on REITs.
At October 31, 2008, the Funds had capital loss carryforwards which may be
utilized to offset any net realized capital gains expiring October 31:
<Table>
<Caption>
2014 2015 2016
-------- -------- -----------
Rydex 2x S&P 500 ETF..................................... $ -- $ -- $31,040,829
Rydex Inverse 2x S&P 500 ETF............................. -- -- --
Rydex 2x S&P MidCap 400 ETF.............................. -- -- 5,600,771
Rydex Inverse 2x S&P MidCap 400 ETF...................... -- -- --
Rydex 2x Russell 2000(R) ETF............................. -- -- 5,395,770
Rydex Inverse 2x Russell 2000(R) ETF..................... -- -- --
Rydex 2x S&P Select Sector Energy ETF.................... -- -- 3,238,456
Rydex Inverse 2x S&P Select Sector Energy ETF............ -- -- --
Rydex 2x S&P Select Sector Financial ETF................. -- -- 12,649,037
Rydex Inverse 2x S&P Select Sector Financial ETF......... -- -- --
Rydex 2x S&P Select Sector Technology ETF................ -- -- 3,557,985
Rydex Inverse 2x S&P Select Sector Technology ETF........ -- -- --
Rydex 2x S&P Select Sector Health Care ETF............... -- -- 2,017,045
Rydex Inverse 2x S&P Select Sector Health Care ETF....... -- -- --
</Table>
The Funds did not utilize any capital loss carryforwards during the period ended
October 31, 2008.
The tax character of distributable earnings (accumulated losses) at October 31,
2008 were as follows:
<Table>
<Caption>
UNDISTRIBUTED UNREALIZED
UNDISTRIBUTED LONG TERM CAPITAL LOSS APPRECIATION/
ORDINARY INCOME CAPITAL GAIN CARRYFORWARD (DEPRECIATION)
--------------- ------------- ------------ --------------
Rydex 2x S&P 500 ETF......................... $ 81,221 $ -- $(31,040,829) $(20,139,992)
Rydex Inverse 2x S&P 500 ETF................. -- 12,634,948 -- --
Rydex 2x S&P MidCap 400 ETF.................. -- -- (5,600,771) (1,207,106)
Rydex Inverse 2x S&P MidCap 400 ETF.......... 831,370 1,359,477 -- (1,405,948)
Rydex 2x Russell 2000(R) ETF................. 2,359 -- (5,395,770) (2,356,154)
Rydex Inverse 2x Russell 2000(R) ETF......... -- 2,169,111 -- (1,755,839)
Rydex 2x S&P Select Sector Energy ETF........ 983 -- (3,238,456) (831,705)
Rydex Inverse 2x S&P Select Sector Energy
ETF........................................ 4,324,132 -- -- (2,974,767)
Rydex 2x S&P Select Sector Financial ETF..... 44,812 -- (12,649,037) (3,341,892)
Rydex Inverse 2x S&P Select Sector Financial
ETF........................................ 2,739,094 244,802 -- (3,320,090)
Rydex 2x S&P Select Sector Technology ETF.... 4,645 -- (3,557,985) (831,362)
Rydex Inverse 2x S&P Select Sector Technology
ETF........................................ 3,807,845 -- -- (1,879,566)
Rydex 2x S&P Select Sector Health Care ETF... 1,011 -- (2,017,045) (200,403)
Rydex Inverse 2x S&P Select Sector Health
Care ETF................................... 2,610,366 -- -- (1,728,947)
</Table>
ANNUAL REPORT 96
NOTES TO FINANCIAL STATEMENTS (continued)
- --------------------------------------------------------------------------------
The tax character of distributions paid during 2008 were as follows:
<Table>
<Caption>
ORDINARY LONG-TERM RETURN ON
INCOME CAPITAL GAIN CAPITAL
-------- ------------ ---------
Rydex 2x S&P 500 ETF..................................... $363,939 $ -- $ --
Rydex Inverse 2x S&P 500 ETF............................. 552,721 -- --
Rydex 2x S&P MidCap 400 ETF.............................. 50,604 -- 2,868
Rydex Inverse 2x S&P MidCap 400 ETF...................... 178,257 -- --
Rydex 2x Russell 2000(R) ETF............................. 66,551 -- --
Rydex Inverse 2x Russell 2000(R) ETF..................... 298,197 -- --
Rydex 2x S&P Select Sector Energy ETF.................... 7,308 -- --
Rydex Inverse 2x S&P Select Sector Energy ETF............ 19,874 -- --
Rydex 2x S&P Select Sector Financial ETF................. 65,308 -- --
Rydex Inverse 2x S&P Select Sector Financial ETF......... 18,187 -- --
Rydex 2x S&P Select Sector Technology ETF................ 11,327 -- --
Rydex Inverse 2x S&P Select Sector Technology ETF........ 18,238 -- --
Rydex 2x S&P Select Sector Health Care ETF............... 22,169 -- --
Rydex Inverse 2x S&P Select Sector Health Care ETF....... 18,758 -- --
</Table>
H. FAIR VALUE MEASUREMENT
The Funds adopted Statement of Financial Accounting Standard No. 157 ("FAS 157")
Fair Value Measurement which provided enhanced guidance for using fair value to
measure assets and liabilities. The standard requires companies to provide
expanded information about the assets and liabilities measured at fair value and
the potential effect of these fair valuations on an entity's financial
performance. The standard does not expand the use of fair value in any new
circumstances, but provides clarification an acceptable fair valuation methods
and applications.
Various inputs may be used to determine the value of the fund's investments.
These inputs are summarized in three broad levels:
Level 1 -- quoted prices in active markets for identical securities.
Level 2 -- other significant observable inputs (including quoted prices for
similar securities, interest rates, prepayment speeds, credit risk, etc.).
Level 3 -- significant unobservable inputs (including the Funds' own
assumptions used to determine the fair value of investments).
The inputs or methodologies used for valuing securities are not necessarily an
indication of the risk associated with investing in those securities.
ANNUAL REPORT 97
NOTES TO FINANCIAL STATEMENTS (continued)
- --------------------------------------------------------------------------------
The following table summarizes the inputs used to value the Funds' net assets as
of October 31, 2008:
<Table>
<Caption>
LEVEL 1 LEVEL 2 LEVEL 3
LEVEL 1 OTHER LEVEL 2 OTHER LEVEL 3 OTHER
INVESTMENTS FINANCIAL INVESTMENTS FINANCIAL INVESTMENTS FINANCIAL
FUND IN SECURITIES INSTRUMENTS IN SECURITIES INSTRUMENTS IN SECURITIES INSTRUMENTS
- ---- ------------- ----------- ------------- --------------- ------------- -----------
ASSETS
Rydex 2x S&P 500 ETF............ $106,395,346 $ -- $ -- $ -- $ -- $ --
Rydex Inverse 2x S&P 500 ETF.... 44,251,000 -- -- -- -- --
Rydex 2x S&P MidCap 400 ETF..... 4,422,420 149,000 -- 236,602 -- --
Rydex Inverse 2x S&P MidCap 400
ETF........................... 5,866,000 -- -- -- -- --
Rydex 2x Russell 2000 ETF....... 12,374,259 -- -- -- -- --
Rydex Inverse 2x Russell 2000
ETF........................... 14,613,000 -- -- -- -- --
Rydex 2x S&P Select Sector
Energy ETF.................... 3,521,651 -- -- 652,119 -- --
Rydex Inverse 2x S&P Select
Sector Energy ETF............. 5,025,000 -- -- -- -- --
Rydex 2x S&P Select Sector
Financial ETF................. 8,624,911 -- -- 2,566,561 -- --
Rydex Inverse 2x S&P Select
Sector Financial ETF.......... 6,997,000 1,387 -- -- -- --
Rydex 2x S&P Select Sector
Technology ETF................ 2,585,053 -- -- 343,569 -- --
Rydex Inverse 2x S&P Select
Sector Technology ETF......... 5,652,000 -- -- -- -- --
Rydex 2x S&P Select Sector
Health Care ETF............... 4,498,334 -- -- 461,513 -- --
Rydex Inverse 2x S&P Select
Sector Health Care ETF........ 7,442,000 -- -- -- -- --
LIABILITIES
Rydex 2x S&P 500 ETF............ -- 2,745,632 -- -- -- --
Rydex Inverse 2x S&P 500 ETF.... -- 10,472,763 -- -- -- --
Rydex 2x S&P MidCap 400 ETF..... -- -- -- -- -- --
Rydex Inverse 2x S&P MidCap 400
ETF........................... -- 466,566 -- 1,405,948 -- --
Rydex 2x Russell 2000 ETF....... -- 1,424,665 -- -- -- --
Rydex Inverse 2x Russell 2000
ETF........................... -- 2,227,460 -- 1,755,839 -- --
Rydex 2x S&P Select Sector
Energy ETF.................... -- -- -- -- -- --
Rydex Inverse 2x S&P Select
Sector Energy ETF............. -- -- -- 2,974,767 -- --
Rydex 2x S&P Select Sector
Financial ETF................. -- -- -- -- -- --
Rydex Inverse 2x S&P Select
Sector Financial ETF.......... -- -- -- 3,320,090 -- --
Rydex 2x S&P Select Sector
Technology ETF................ -- -- -- -- -- --
Rydex Inverse 2x S&P Select
Sector Technology ETF......... -- -- -- 1,879,566 -- --
Rydex 2x S&P Select Sector
Health Care ETF............... -- -- -- -- -- --
Rydex Inverse 2x S&P Select
Sector Health Care ETF........ -- -- -- 1,728,947 -- --
<Caption>
FUND TOTAL
- ---- ------------
ASSETS
Rydex 2x S&P 500 ETF............ $106,395,346
Rydex Inverse 2x S&P 500 ETF.... 44,251,000
Rydex 2x S&P MidCap 400 ETF..... 4,808,022
Rydex Inverse 2x S&P MidCap 400
ETF........................... 5,866,000
Rydex 2x Russell 2000 ETF....... 12,374,259
Rydex Inverse 2x Russell 2000
ETF........................... 14,613,000
Rydex 2x S&P Select Sector
Energy ETF.................... 4,173,770
Rydex Inverse 2x S&P Select
Sector Energy ETF............. 5,025,000
Rydex 2x S&P Select Sector
Financial ETF................. 11,191,472
Rydex Inverse 2x S&P Select
Sector Financial ETF.......... 6,998,387
Rydex 2x S&P Select Sector
Technology ETF................ 2,928,622
Rydex Inverse 2x S&P Select
Sector Technology ETF......... 5,652,000
Rydex 2x S&P Select Sector
Health Care ETF............... 4,959,847
Rydex Inverse 2x S&P Select
Sector Health Care ETF........ 7,442,000
LIABILITIES
Rydex 2x S&P 500 ETF............ 2,745,632
Rydex Inverse 2x S&P 500 ETF.... 10,472,763
Rydex 2x S&P MidCap 400 ETF..... --
Rydex Inverse 2x S&P MidCap 400
ETF........................... 1,872,514
Rydex 2x Russell 2000 ETF....... 1,424,665
Rydex Inverse 2x Russell 2000
ETF........................... 3,983,299
Rydex 2x S&P Select Sector
Energy ETF.................... --
Rydex Inverse 2x S&P Select
Sector Energy ETF............. 2,974,767
Rydex 2x S&P Select Sector
Financial ETF................. --
Rydex Inverse 2x S&P Select
Sector Financial ETF.......... 3,320,090
Rydex 2x S&P Select Sector
Technology ETF................ --
Rydex Inverse 2x S&P Select
Sector Technology ETF......... 1,879,566
Rydex 2x S&P Select Sector
Health Care ETF............... --
Rydex Inverse 2x S&P Select
Sector Health Care ETF........ 1,728,947
</Table>
I. DIVIDENDS AND DISTRIBUTIONS
The Funds declare and pay dividends from net investment income and distribute
from net realized capital gains at least annually.
J. RISK AND UNCERTAINTIES
The Trust invests in various investments which are exposed to risk, such as
market risk. Due to the level of risk associated with certain investments it is
at least reasonably possible that changes in the values of investment securities
will occur in the near term and that such changes could materially affect
amounts reported in future financial statements. The risk inherent in the use of
futures contracts and swap agreements, 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. The Funds have established strict counterparty credit guidelines and
enter into transactions only with financial institutions of investment grade or
better.
K. NEW ACCOUNTING PRONOUNCEMENTS
In March, 2008, Statement of Financial Accounting Standards No. 161,
"Disclosures about Derivative Instruments and Hedging Activities" ("SFAS 161")
was issued and is effective for fiscal years and interim periods beginning after
November 15, 2008. SFAS 161 requires enhanced disclosures about Funds'
derivative and hedging activities. Management is currently evaluating the
impact, if any, the adoption of SFAS 161 will have on the Funds' financial
statement disclosures.
ANNUAL REPORT 98
NOTES TO FINANCIAL STATEMENTS (continued)
- --------------------------------------------------------------------------------
3. ADVISORY, ADMINISTRATION AND OTHER TRANSACTIONS WITH AFFILIATES
The Advisor determines the composition of the portfolio of securities that must
be delivered in exchange for the issuance of Creation Units and periodically
adjusts the composition of the portfolio of each Funds' to conform to changes in
the composition of the relevant index. For these services, the Advisor receives
an advisory fee at the annual rate shown below of the average daily net assets
of the Funds.
<Table>
<Caption>
ADVISORY FEE
------------
Rydex 2x S&P 500 ETF................................................. 0.70%
Rydex Inverse 2x S&P 500 ETF......................................... 0.70%
Rydex 2x S&P MidCap 400 ETF.......................................... 0.70%
Rydex Inverse 2x S&P MidCap 400 ETF.................................. 0.70%
Rydex 2x Russell 2000(R) ETF......................................... 0.70%
Rydex Inverse 2x Russell 2000(R) ETF................................. 0.70%
Rydex 2x S&P Select Sector Energy ETF................................ 0.70%
Rydex Inverse 2x S&P Select Sector Energy ETF........................ 0.70%
Rydex 2x S&P Select Sector Financial ETF............................. 0.70%
Rydex Inverse 2x S&P Select Sector Financial ETF..................... 0.70%
Rydex 2x S&P Select Sector Technology ETF............................ 0.70%
Rydex Inverse 2x S&P Select Sector Technology ETF.................... 0.70%
Rydex 2x S&P Select Sector Health Care ETF........................... 0.70%
Rydex Inverse 2x S&P Select Sector Health Care ETF................... 0.70%
</Table>
The Advisor pays all expenses of the Funds, including the cost of transfer
agency, custody, fund administration, legal, audit and other services, except:
interest, taxes, distribution and trustee fees or expenses and extraordinary
expenses. Trustee fees which cannot be attributed to a Fund are allocated in
such a manner as deemed equitable, taking into consideration the relative net
assets of the Fund.
Under an Administration Agreement, State Street Bank and Trust Company (the
"Administrator") provides various administrative and accounting services for the
maintenance and operations of the Funds. Under a Custodian Agreement with the
Trust, the Administrator maintains cash, securities and other assets of the
Trust and the Funds in separate accounts for each Fund, keeps all necessary
accounts and records, and provides other services. The Administrator is
required, upon the order of the Trust, to deliver securities held by the
Custodian and to make payments for securities purchased by the Trust for the
Funds. Pursuant to a Transfer Agency and Service Agreement with the Trust, the
Administrator acts as a transfer agent for the Trust's authorized and issued
shares of beneficial interest, and as dividend disbursing agent of the Trust.
The Advisor compensates the Administrator directly for the foregoing services.
The Funds have adopted a Distribution Plan (the "Plan") that allows the Funds to
pay distribution fees to Rydex Distributors, Inc. (the "Distributor") and other
firms that provide distribution services ("Service Providers"). If a Service
Provider provides distribution services, the Funds 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 will, in turn,
pay the Service Provider out of its fees. No such fee is currently charged to
the Funds.
The Advisor made voluntary contributions during the period ended October 31,
2008 in the amounts of $148,040 in Rydex Inverse 2x S&P MidCap 400 ETF and
$315,120 in Rydex Inverse 2x Russell 2000 ETF to compensate portfolio losses
caused by trading errors made by advisor.
4. CAPITAL
At October 31, 2008, there were an unlimited number of no par value shares of
beneficial interest authorized. There is a minimum transaction fee per
transaction to those persons purchasing or redeeming Creation Units. An
additional charge of up to three times the standard transaction fee may be
imposed for purchases and redemptions effected outside the National Securities
Clearing Corporation usual clearing process or for cash. Such transactions are
generally permitted on an in-kind basis, with a balancing cash component to
ANNUAL REPORT 99
NOTES TO FINANCIAL STATEMENTS (continued)
- --------------------------------------------------------------------------------
equate the transaction to the net asset value per unit of the Fund on the
transaction date. Transaction fees are not charged to or paid by the Fund. The
minimum transaction fees are:
<Table>
<Caption>
MINIMUM
TRANSACTION FEE
---------------
Rydex 2x S&P 500 ETF............................................... $2,000
Rydex Inverse 2x S&P 500 ETF....................................... 50
Rydex 2x S&P MidCap 400 ETF........................................ 2,000
Rydex Inverse 2x S&P MidCap 400 ETF................................ 50
Rydex 2x Russell 2000(R) ETF....................................... 3,000
Rydex Inverse 2x Russell 2000(R) ETF............................... 50
Rydex 2x S&P Select Sector Energy ETF.............................. 500
Rydex Inverse 2x S&P Select Sector Energy ETF...................... 50
Rydex 2x S&P Select Sector Financial ETF........................... 750
Rydex Inverse 2x S&P Select Sector Financial ETF................... 50
Rydex 2x S&P Select Sector Technology ETF.......................... 750
Rydex Inverse 2x S&P Select Sector Technology ETF.................. 50
Rydex 2x S&P Select Sector Health Care ETF......................... 500
Rydex Inverse 2x S&P Select Sector Health Care ETF................. 50
</Table>
5. INVESTMENT TRANSACTIONS
For the period ended October 31, 2008 the Funds had in-kind contributions and
in-kind redemptions as follows:
<Table>
<Caption>
SUBSCRIPTIONS REDEMPTIONS
------------- -----------
Rydex 2x S&P 500 ETF......................................... $30,137,837 $ --
Rydex Inverse 2x S&P 500 ETF................................. -- --
Rydex 2x S&P MidCap 400 ETF.................................. 5,834,339 --
Rydex Inverse 2x S&P MidCap 400 ETF.......................... -- --
Rydex 2x Russell 2000(R) ETF................................. -- --
Rydex Inverse 2x Russell 2000(R) ETF......................... -- --
Rydex 2x S&P Select Sector Energy ETF........................ -- --
Rydex Inverse 2x S&P Select Sector Energy ETF................ -- --
Rydex 2x S&P Select Sector Financial ETF..................... -- --
Rydex Inverse 2x S&P Select Sector Financial ETF............. -- --
Rydex 2x S&P Select Sector Technology ETF.................... -- --
Rydex Inverse 2x S&P Select Sector Technology ETF............ -- --
Rydex 2x S&P Select Sector Health Care ETF................... -- --
Rydex Inverse 2x S&P Select Sector Health Care ETF........... -- --
</Table>
Purchases and sales of investment securities (excluding short-term investments,
U.S. government and government agency obligations) for the Funds during the
period ended October 31, 2008 were as follows:
<Table>
<Caption>
PURCHASES SALES
----------- -----------
Rydex 2x S&P 500 ETF.......................................... $95,988,559 $13,544,522
Rydex Inverse 2x S&P 500 ETF.................................. -- --
Rydex 2x S&P MidCap 400 ETF................................... 14,266,928 12,636,813
Rydex Inverse 2x S&P MidCap 400 ETF........................... -- --
Rydex 2x Russell 2000(R) ETF.................................. 29,199,844 15,164,232
Rydex Inverse 2x Russell 2000(R) ETF.......................... -- --
Rydex 2x S&P Select Sector Energy ETF......................... 9,664,009 4,343,970
Rydex Inverse 2x S&P Select Sector Energy ETF................. -- --
Rydex 2x S&P Select Sector Financial ETF...................... 33,491,913 16,742,791
Rydex Inverse 2x S&P Select Sector Financial ETF.............. -- --
Rydex 2x S&P Select Sector Technology ETF..................... 7,615,657 2,955,906
Rydex Inverse 2x S&P Select Sector Technology ETF............. -- --
Rydex 2x S&P Select Sector Health Care ETF.................... 7,700,021 2,074,652
Rydex Inverse 2x S&P Select Sector Health Care ETF............ -- --
</Table>
ANNUAL REPORT 100
NOTES TO FINANCIAL STATEMENTS (concluded)
- --------------------------------------------------------------------------------
At October 31, 2008, the identified cost of investments in securities owned by
each fund for federal income tax purposes and the gross unrealized appreciation
and depreciation was as follows:
<Table>
<Caption>
GROSS GROSS NET UNREALIZED
IDENTIFIED UNREALIZED UNREALIZED APPRECIATION/
COST APPRECIATION DEPRECIATION (DEPRECIATION)
------------ ------------ ------------ --------------
Rydex 2x S&P 500 ETF......................... $126,535,338 $ -- $(20,139,992) $(20,139,992)
Rydex Inverse 2x S&P 500 ETF................. 44,251,000 -- -- --
Rydex 2x S&P MidCap 400 ETF.................. 5,866,128 309,253 (1,752,961) (1,443,708)
Rydex Inverse 2x S&P MidCap 400 ETF.......... 5,866,000 -- -- --
Rydex 2x Russell 2000(R) ETF................. 14,730,413 418,999 (2,775,153) (2,356,154)
Rydex Inverse 2x Russell 2000(R) ETF......... 14,613,000 -- -- --
Rydex 2x S&P Select Sector Energy ETF........ 5,005,475 138,163 (1,621,987) (1,483,824)
Rydex Inverse 2x S&P Select Sector Energy
ETF........................................ 5,025,000 -- -- --
Rydex 2x S&P Select Sector Financial ETF..... 14,533,364 412,356 (6,320,809) (5,908,453)
Rydex Inverse 2x S&P Select Sector Financial
ETF........................................ 6,997,000 -- -- --
Rydex 2x S&P Select Sector Technology ETF.... 3,759,984 -- (831,362) (831,362)
Rydex Inverse 2x S&P Select Sector Technology
ETF........................................ 5,652,000 -- -- --
Rydex 2x S&P Select Sector Health Care ETF... 5,160,250 551,995 (1,213,911) (661,916)
Rydex Inverse 2x S&P Select Sector Health
Care ETF................................... 7,442,000 -- -- --
</Table>
6. ACQUISTION OF RYDEX INVESTMENTS AND THE DISTRIBUTOR
At the close of business on January 17, 2008, Rydex NV, Inc., comprised of Rydex
Investments, together with several other Rydex entities, was acquired by
Security Benefit Corporation ("Security Benefit"), a financial services firm
that provides a broad variety of financial programs to investors in the advisor,
banking, education, government, institutional, and qualified plan markets (the
"Transaction"). As a result of the Transaction's completion, Rydex Investments
and the Distributor are wholly-owned subsidiaries of Security Benefit. While the
Transaction has no material impact on the Funds or their shareholders, it
resulted in a change of control of Rydex Investments, which in turn caused the
termination of the investment advisory agreement between Rydex Investments and
the Funds.
A new investment advisory agreement between Rydex Investments and the Funds was
approved under substantially the same terms as the previous investment advisory
agreement (the "New Agreement"). This New Agreement was approved by
shareholders, via proxy, and took effect upon the closing of the Transaction.
The Transaction had no impact on the day-to-day operations of Rydex Investments,
the fees payable to Rydex Investments under the New Agreement, or the persons
responsible for the management of the Funds.
ANNUAL REPORT 101
REPORT OF INDEPENDENT REGISTERED PUBLIC
ACCOUNTING FIRM
- --------------------------------------------------------------------------------
The Board of Trustees and Shareholders of Rydex ETF Trust
We have audited the accompanying statements of assets and liabilities, including
the schedules of investments, of Rydex 2X S&P 500 ETF, Rydex Inverse 2X S&P ETF,
Rydex 2X MidCap 400 ETF, Rydex Inverse 2X MidCap 400 ETF, Rydex 2X Russell 2000
ETF, Rydex Inverse 2X Russell 2000 ETF, Rydex 2X S&P Select Sector Energy ETF,
Rydex Inverse 2X S&P Select Sector Energy ETF, Rydex 2X S&P Select Sector
Financial ETF, Rydex Inverse 2X S&P Select Sector Financial ETF, Rydex 2X S&P
Select Sector Technology ETF, Rydex Inverse 2X S&P Select Sector Technology ETF,
Rydex 2X S&P Select Sector Health Care ETF, Rydex Inverse 2X S&P Select Sector
Health Care ETF (the "Funds"), fourteen of the funds comprising Rydex ETF Trust
(the "Trust"), as of October 31, 2008, and the related statements of operations,
the statements of changes in net assets and the financial highlights for the
periods indicated therein. These financial statements and financial highlights
are the responsibility of the Trust's management. Our responsibility is to
express an opinion on these financial statements and financial highlights based
on our audits.
We conducted our audits in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements and financial highlights are free of material misstatement. We were
not engaged to perform an audit of the Trust's internal control over financial
reporting. Our audits included consideration of internal control over financial
reporting as a basis for designing audit procedures that are appropriate in the
circumstances, but not for the purpose of expressing an opinion on the
effectiveness of the Trust's internal control over financial reporting.
Accordingly, we express no such opinion. An audit also includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements and financial highlights, assessing the accounting principles used
and significant estimates made by management, and evaluating the overall
financial statement presentation. Our procedures included confirmation of
securities owned as of October 31, 2008, by correspondence with the custodian
and brokers or by other appropriate auditing procedures where replies from
brokers were not received. We believe that our audits provide a reasonable basis
for our opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of each
of the Funds of the Rydex ETF Trust at October 31, 2008 mentioned above, the
results of their operations for the year then ended, the changes in their net
assets for the year then ended and the financial highlights for the period
indicated therein, in conformity with U.S. generally accepted accounting
principles.
ERNST & YOUNG LOGO
Boston, Massachusetts
December 23, 2008
ANNUAL REPORT 102
SUPPLEMENTAL INFORMATION (Unaudited)
- --------------------------------------------------------------------------------
FEDERAL INCOME TAX INFORMATION
For federal income tax purposes, the following information is furnished for the
year ended October 31, 2008 in respect to percentage of ordinary distributions
(net investment income plus short-term gains) which qualify for corporate
dividends received deduction, designated qualified dividend income eligible for
reduced taxes and distributions from long-term capital gains. These long-term
capital gains distributions may be subject to a maximum tax rate of 15% as
provided by the internal revenue code. The funds below hereby designate the
maximum amount of such dividend allowable up to the amount of the dividends paid
during the year.
<Table>
<Caption>
DIVIDEND LONG TERM QUALIFIED
RECEIVED CAPITAL GAINS DIVIDEND
DEDUCTION DISTRIBUTION INCOME
--------- ------------- ---------
Rydex 2x S&P 500 ETF.................................. 100.00% $ -- $575,623
Rydex Inverse 2x S&P 500 ETF.......................... 0.00% 555,686
Rydex 2x S&P MidCap 400 ETF........................... 100.00% -- 55,537
Rydex Inverse 2x S&P MidCap 400 ETF................... 0.00% -- --
Rydex 2x Russell 2000(R) ETF.......................... 98.34% -- 64,291
Rydex Inverse 2x Russell 2000(R) ETF.................. 0.00% 808,909 --
Rydex 2x S&P Select Sector Energy ETF................. 100.00% -- 17,826
Rydex Inverse 2x S&P Select Sector Energy ETF......... 0.00% -- --
Rydex 2x S&P Select Sector Financial ETF.............. 88.22% -- 100,592
Rydex Inverse 2x S&P Select Sector Financial ETF...... 0.00% -- --
Rydex 2x S&P Select Sector Technology ETF............. 100.00% -- 27,778
Rydex Inverse 2x S&P Select Sector Technology ETF..... 0.00% -- --
Rydex 2x S&P Select Sector Health Care ETF............ 100.00% -- 37,709
Rydex Inverse 2x S&P Select Sector Health Care ETF.... 0.00% -- --
</Table>
PROXY VOTING INFORMATION
A description of the policies and procedures that the Trust uses to determine
how to vote proxies relating to securities held in the Funds' portfolios is
available, without charge and upon request, by calling 1-800-820-0888. This
information is also available from the EDGAR database on the SEC's website at
http://www.sec.gov.
Information regarding how the Funds voted proxies for portfolio securities, if
applicable, during the most recent 12-month period ended June 30, 2008 is also
available, without charge and upon request, by (i) calling 1-800-820-0888; or
accessing the Trust's Form N-PX on the SEC's website at, http://www.sec.gov.
QUARTERLY PORTFOLIO SCHEDULES INFORMATION
The Trust files its complete schedule of portfolio holdings with the SEC for the
first and third quarters of each fiscal year on Form N-Q; which are available on
the SEC's website at http://www.sec.gov. The Trust's 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.
ANNUAL REPORT 103
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
<Table>
<Caption>
NAME, POSITION LENGTH OF SERVICE
AND AS TRUSTEE NUMBER OF FUNDS
YEAR OF BIRTH (YEAR BEGAN) OVERSEEN
- ---------------- ----------------------------------------- ----------------
CARL G. Rydex Series Funds - 2004 158
VERBONCOEUR* Rydex Variable Trust - 2004
TRUSTEE, Rydex Dynamic Funds - 2004
PRESIDENT (1952) Rydex ETF Trust - 2004
</Table>
PRINCIPAL OCCUPATIONS DURING PAST FIVE YEARS: Treasurer of Rydex Specialized
Products, LLC (2005 to present); Chief Executive Officer of Rydex Specialized
Products, LLC (2005 to 2008); Chief Executive Officer of Rydex Investments and
Rydex Distributors, Inc. (2003 to present). Executive Vice President of Rydex
Investments (2000 to 2003)
<Table>
---------------------
MICHAEL P. Rydex Series Funds - 2005 150
BYRUM* Rydex Variable Trust - 2005
Trustee, Vice Rydex Dynamic Funds - 2005
President and Rydex ETF Trust - 2005
Secretary (1970)
</Table>
PRINCIPAL OCCUPATIONS DURING PAST FIVE YEARS: Chief Investment Officer of Rydex
Investments (2003 to present); Secretary of Rydex Specialized Products, LLC
(2005 to 2008); 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
2006); President of Rydex Investments (2004 to present); Chief Operating Officer
of Rydex Investments and Rydex Distributors, Inc. (2003 to 2004)
- --------------------------------------------------------------------------------
INDEPENDENT TRUSTEES
<Table>
<Caption>
NAME, POSITION LENGTH OF SERVICE
AND AS TRUSTEE NUMBER OF FUNDS
YEAR OF BIRTH (YEAR BEGAN) OVERSEEN
- ---------------- ----------------------------------------- ----------------
JOHN O. DEMARET Rydex Series Funds - 1997 150
Trustee, Rydex Variable Trust - 1998
Chairman of the Rydex Dynamic Funds - 1999
Board (1940) Rydex ETF Trust - 2003
</Table>
PRINCIPAL OCCUPATIONS DURING PAST FIVE YEARS: Retired
<Table>
---------------------
COREY A. Rydex Series Funds - 1993 150
COLEHOUR Rydex Variable Trust - 1998
Trustee (1945) Rydex Dynamic Funds - 1999
Rydex ETF Trust - 2003
</Table>
PRINCIPAL OCCUPATIONS DURING PAST FIVE YEARS: Retired (2006 to present); Owner
and President of Schield Management, registered investment advisor (2005 to
2006); Senior Vice President of Marketing and Co-Owner of Schield Management
Company, registered investment advisor (1985 to 2005)
<Table>
---------------------
J. KENNETH Rydex Series Funds - 1995 150
DALTON Rydex Variable Trust - 1998
Trustee (1941) Rydex Dynamic Funds - 1999
Rydex ETF Trust - 2003
</Table>
PRINCIPAL OCCUPATIONS DURING PAST FIVE YEARS: Mortgage Banking Consultant and
Investor, The Dalton Group
<Table>
---------------------
WERNER E. KELLER Rydex Series Funds - 2005 150
Trustee (1940) Rydex Variable Trust - 2005
Rydex Dynamic Funds - 2005
Rydex ETF Trust - 2005
</Table>
PRINCIPAL OCCUPATIONS DURING PAST FIVE YEARS: Retired (2001 to present);
Chairman, Centurion Capital Management (1991 to 2001)
<Table>
---------------------
THOMAS F. LYDON, Rydex Series Funds - 2005 150
JR. Rydex Variable Trust - 2005
Trustee (1960) Rydex Dynamic Funds - 2005
Rydex ETF Trust - 2005
</Table>
PRINCIPAL OCCUPATIONS DURING PAST FIVE YEARS: President, Global Trends
Investments
<Table>
---------------------
PATRICK T. Rydex Series Funds - 1997 150
MCCARVILLE Rydex Variable Trust - 1998
Trustee (1942) Rydex Dynamic Funds - 1999
Rydex ETF Trust - 2003
</Table>
PRINCIPAL OCCUPATIONS DURING PAST FIVE YEARS: Founder and Chief Executive
Officer, Par Industries, Inc.
<Table>
---------------------
ROGER SOMERS Rydex Series Funds - 1993 150
Trustee (1944) Rydex Variable Trust - 1998
Rydex Dynamic Funds - 1999
Rydex ETF Trust - 2003
</Table>
PRINCIPAL OCCUPATIONS DURING PAST FIVE YEARS: Owner, Arrow Limousine
- --------------------------------------------------------------------------------
ANNUAL REPORT 104
INFORMATION ON BOARD OF TRUSTEES AND OFFICERS (concluded)
- --------------------------------------------------------------------------------
EXECUTIVE OFFICERS
<Table>
<Caption>
NAME, POSITION AND PRINCIPAL OCCUPATIONS DURING PAST FIVE
YEAR OF BIRTH YEARS
- ----------------------------------------- -----------------------------------------
NICK BONOS* Chief Financial Officer of Rydex
Vice President and Treasurer (1963) Specialized Products, LLC (2005 to
present); Vice President and Treasurer of
Rydex Series Funds, Rydex Variable Trust,
Rydex Dynamic Funds, and Rydex ETF Trust
(2003 to present); Senior Vice President
of Rydex Investments (2003 to present);
Vice President and Treasurer of Rydex
Capital Partners SPhinX Fund (2003 to
2006); Vice President of Accounting of
Rydex Investments (2000 to 2003)
JOANNA M. HAIGNEY* Chief Compliance Officer Rydex Series
Chief Compliance Officer and Secretary Funds, Rydex Variable Trust, and Rydex
(1966) Dynamic Funds (2004 to present);
Secretary of Rydex Series Funds, Rydex
Variable Trust, and Rydex Dynamic Funds
(2000 to present); Secretary of Rydex ETF
Trust (2002 to present); Vice President
of Compliance of Rydex Investments (2000
to present); Secretary of Rydex Capital
Partners SPhinX Fund (2003 to 2006)
JOSEPH ARRUDA* Assistant Treasurer of Rydex Series
Assistant Treasurer (1966) Funds, Rydex Variable Trust, Rydex
Dynamic Funds, Rydex ETF Trust (2006 to
present); Senior Vice President of Rydex
Investments (2008 to present); Vice
President of Rydex Investments (2004 to
2008); Director of Accounting of Rydex
Investments (2003 to 2004); Vice
President of Mutual Funds, State Street
Bank & Trust (2000 to 2003)
PAULA BILLOS* Controller of Rydex Series Funds, Rydex
Controller (1974) Variable Trust, Rydex Dynamic Funds,
Rydex ETF Trust (2006 to present);
Director of Fund Administration of Rydex
Investments (2001 to present)
</Table>
* Officers of the Funds are deemed to be "interested persons" of the Trust,
within the meaning of Section 2(a)(19) of the 1940 Act, inasmuch as this
person is affiliated with the Rydex Investments.
[GRAPHIC]
[RYDEX INVESTMENTS LOGO]
9601 Blackwell Road o Suite 500 o Rockville, MD 20850
www.rydexinvestments.com o 800.820.0888
ETF3-ANN-1008X1009
ITEM 2. CODE OF ETHICS.
The Board of Trustees of the Trust has adopted a Combined Code of Ethics (the
"Code") pursuant to Rule 17j-1 under the 1940 Act. The Advisor and Distributor
are also covered by the Code. The Code applies to the personal investing
activities of trustees, directors, officers, and certain employees ("access
persons"). Rule 17j-1 and the Code are designed to prevent unlawful practices in
connection with the purchase or sale of securities by access persons. Under the
Code, access persons are permitted to engage in personal securities
transactions, but are required to report their personal securities transactions
for monitoring purposes. In addition, certain access persons are required to
obtain approval before investing in initial public offerings or private
placements. No substantive amendments were approved or waivers were granted to
the Code during the period covered by this report. The Code is filed as an
exhibit to this Form N-CSR.
ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT.
The registrant's Board of Trustees has determined that Werner Keller, an
"independent" Trustee serving on the registrant's audit committee, is an "audit
committee financial expert," as defined in Item 3 of Form N-CSR. Under
applicable securities laws, a person who is determined to be an audit committee
financial expert will not be deemed an "expert" for any purpose, including
without limitation for the purposes of Section 11 of the Securities Act of 1933,
as a result of being designated or identified as an audit committee financial
expert. The designation or identification of a person as an audit committee
financial expert does not impose on such person any duties, obligations, or
liabilities that are greater than the duties, obligations, and liabilities
imposed on such person as a member of the audit committee and Board of Trustees
in the absence of such designation or identification.
ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES.
(a)-(d) The aggregate Audit Fees billed by the Trust's principal accountant, for
the audit of the annual financial statements in connection with statutory and
regulatory filings for the fiscal years ended October 31, 2008 and October 31,
2007 were $441,500 and $247,800, respectively. The aggregate Tax Fees billed by
the Trust's principal accountant for professional services rendered for tax
compliance, tax advice, and tax planning, including preparation of tax returns
and distribution assistance, for the fiscal years ended October 31, 2008 and
October 31, 2007 were $0.
(e) The audit committee has adopted a policy whereby audit and non-audit
services performed by the registrant's principal accountant for the registrant,
its investment advisor, and any entity controlling, controlled by, or under
common control with the investment advisor that provides ongoing services to the
registrant require pre-approval in advance at regularly scheduled audit
committee meetings. If such service is required between regularly scheduled
audit committee meetings, the chairman of the audit committee, J. Kenneth
Dalton, is authorized to pre-approve the service with full committee approval at
the next scheduled meeting. There shall be no waivers of the pre-approval
process. No services described in (b)-(d) above were approved pursuant to
paragraph (c)(7)(i)(C) of Rule 2-01 of Regulation S-X.
(f) Not applicable.
(g) Not applicable.
(h) Not applicable.
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 January 7, 2009, the President (principal
executive officer) and the Treasurer (principal financial officer) of the Rydex
ETF Trust (the "Trust") believe that there were no significant deficiencies in
the design or operation of the internal controls of the Trust or Rydex
Investments ("RI") the investment advisor and manager of the Trust, and State
Street Bank and Trust Company (the "Administrator"), the administrator 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, the Administrator or RI 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
RI, the Administrator, 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 and RI internal controls
over financial reporting, including disclosure controls and procedures (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)(1) The registrant's code of ethics pursuant to Item 2 of Form N-CSR is
attached.
(a)(2) Separate certifications by the President (principal executive officer)
and Treasurer (principal financial officer) of the registrant as required by
Rule 30a-2(a) under the Act (17 CFR 270.30a-2(a)) are attached.
(b) A certification by the registrant's President (principal executive officer)
and Treasurer (principal financial officer) as required by Rule 30a-2(b) under
the Act (17 CFR 270.30a-2(b)) is attached.