UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14A
Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934 (Amendment No.)
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] CONFIDENTIAL, FOR USE OF THE COMMISSION ONLY (AS PERMITTED BY RULE
14A-6(E)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to [Section]240.14a-12
(Name of Registrant as Specified In Its Charter)
RYDEX SERIES FUNDS
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
(1) Title of each class of securities to which transaction applies:
(2) Aggregate number of securities to which transaction applies:
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on
which the filing fee is calculated and state how it was
determined):
(4) Proposed maximum aggregate value of transaction:
(5) Total fee paid:
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
(2) Form, Schedule or Registration Statement No.:
(3) Filing Party:
(4) Date Filed:
RYDEX SERIES FUNDS
RYDEX DYNAMIC FUNDS
Dear Shareholder:
I am writing to you on an important matter relating to the Rydex|SGI
family of funds (the "Funds"). On September 20, 2011, Security Investors, LLC,
the Funds' investment adviser, that operates under the name Rydex Investments
(the "Investment Adviser"), an indirect wholly-owned subsidiary of an entity
that is managed by a subsidiary of Guggenheim Capital, LLC ("Guggenheim
Capital"), announced a transaction whereby Guggenheim Capital will acquire 100%
of the Investment Adviser and certain affiliated businesses. This transaction is
expected to be completed in late 2011 or early 2012.
This transaction will not result in material changes to the day-to-day
management and operations of the Funds or any increase in fees. For example, the
portfolio managers of the Funds will remain the same and your daily experience
in dealing with the Funds will remain unchanged. However, for legal reasons, the
transaction would terminate the Funds' investment advisory agreements with the
Investment Adviser and any sub-advisory agreements unless you approve new,
substantially identical, agreements.
Accordingly, by this joint proxy statement, we are requesting that you
vote to approve investment advisory agreements and, as applicable, sub-advisory
agreements to take the place of the current agreements, so that the Investment
Adviser, and, as applicable, any sub-adviser, may continue to manage the Funds
after the transaction is completed in a manner that is substantially similar to
the current management of the Funds.
In addition, you will be asked to consider and approve: (i) the election
of nine individuals to the Boards of Trustees of Rydex Series Funds and Rydex
Dynamic Funds; and (ii) a "manager of managers" arrangement for each of the
Funds to permit the Investment Adviser, subject to prior approval by the Board
of Trustees, to retain sub-advisers or amend the terms of an existing
sub-advisory agreement without shareholder approval where the sub-adviser is not
affiliated with the Investment Adviser, subject to certain conditions set forth
in an order previously granted to the Investment Adviser by the U.S. Securities
and Exchange Commission.
If you are a shareholder of the Rydex Series Funds U.S. Government Money
Market Fund (the "Money Market Fund"), we are also requesting that you vote to
approve the elimination of the Money Market Fund's fundamental investment policy
on investing in other investment companies.
A Special Joint Meeting of Shareholders (the "Meeting") of each of the
Funds, including the Funds listed in an attachment to the Notice of Special
Joint Meeting of Shareholders, has been scheduled for November 22, 2011 to vote
on these matters. If you are a shareholder of record of any of the Funds as of
the close of business on October 3, 2011, you are entitled to vote at the
Meeting and any adjournment of the Meeting, even if you no longer own Fund
shares.
Pursuant to these materials, you are being asked to approve proposals for
the Funds of Rydex Series Funds and Rydex Dynamic Funds, as noted above. Please
note that you may receive similar materials if you own shares of other Funds in
the Rydex|SGI fund complex asking you to approve proposals for the other Funds.
You can vote in one of four ways:
o By mail with the enclosed proxy card -- be sure to sign, date and
return it in the enclosed postage-paid envelope,
o Through the web site listed in the proxy voting instructions,
o By telephone using the toll-free number listed in the proxy voting
instructions, or
o In person at the shareholder meeting on November 22, 2011.
We encourage you to vote over the Internet or by telephone, using the
voting control number that appears on your proxy card. Your vote is extremely
important. Shareholder meetings of the Funds do not generally occur with great
frequency, so we ask that you take the time to carefully consider and vote on
these important proposals. Please read the enclosed information carefully before
voting. If you have questions, please call The Altman Group at 1-877-864-5058.
Proxies may be revoked prior to the Meeting by timely executing and
submitting a revised proxy (following the methods noted above), by giving
written notice of revocation to the Fund(s) prior to the Meeting, or by voting
in person at the Meeting.
We appreciate your participation and prompt response in this matter and
thank you for your continued support.
Sincerely,
Richard M. Goldman
President
PROMPT EXECUTION AND RETURN OF THE ENCLOSED PROXY CARD IS REQUESTED. A
SELF-ADDRESSED, POSTAGE-PAID ENVELOPE IS ENCLOSED FOR YOUR CONVENIENCE, ALONG
WITH INSTRUCTIONS ON HOW TO VOTE OVER THE INTERNET OR BY TELEPHONE SHOULD YOU
PREFER TO VOTE BY ONE OF THOSE METHODS.
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VERY IMPORTANT NEWS FOR SHAREHOLDERS
By its very nature, the following "Questions and Answers" section is a
summary and is not intended to be as detailed as the discussion found later in
the proxy materials. For that reason, the information is qualified in its
entirety by reference to the enclosed joint proxy statement to shareholders
("Joint Proxy Statement").
QUESTIONS AND ANSWERS
Q. WHY AM I RECEIVING THIS JOINT PROXY STATEMENT?
A. You are receiving these proxy materials -- a booklet that includes the
Joint Proxy Statement and your proxy card -- because you have the right
to vote on important proposals concerning the Rydex|SGI family of funds
(the "Funds").
Proposals 1 and 2 relate to actions that need to be taken in light of a
transaction (the "Transaction") involving a change in the corporate
ownership structure of Security Investors, LLC, which operates under the
name Rydex Investments, the investment adviser to each of the Funds (the
"Investment Adviser"). The Investment Adviser is managed by an indirect
wholly-owned subsidiary of Guggenheim Capital, LLC ("Guggenheim
Capital"). Guggenheim Capital wishes to purchase the Investment Adviser
and certain affiliated businesses. This Transaction will be effected by
Guggenheim Capital buying 100% of the equity of the holding company that
owns the Investment Adviser. After the Transaction, Guggenheim Capital
will control the Investment Adviser (through one or more of its
subsidiaries), and it is expected that the services rendered to the
Funds by the Investment Adviser will not change. The Transaction would
terminate the Funds' current investment advisory agreements with the
Investment Adviser (the "Current Investment Advisory Agreements") and
the Investment Adviser's sub-advisory agreement with American
Independence Financial Services, LLC ("AIFS"), the sub-adviser to the
Long Short Interest Rate Strategy Fund (the "Current AIFS Agreement")
(collectively, the "Current Agreements") unless you approve new
substantially identical agreements.
Proposal 3 relates to the election of nine individuals to the Boards of
Trustees (collectively, the "Board") of Rydex Series Funds and Rydex
Dynamic Funds (the "Trusts"). The Board proposes the election of the
following nominees: Donald C. Cacciapaglia, Corey A. Colehour, J.
Kenneth Dalton, John O. Demaret, Richard M. Goldman, Werner E. Keller,
Thomas F. Lydon, Patrick T. McCarville and Roger Somers. Each of the
nominees, other than Mr. Cacciapaglia, currently serves as a Trustee. In
connection with the Transaction, the Board believes that expanding the
Board to include Mr. Cacciapaglia, who is a member of senior management
of Guggenheim's investment management business, and who would serve on
other boards in the Rydex|SGI family of funds, would be appropriate.
Proposal 4 relates to the approval of a "manager of managers"
arrangement for each of the Funds to permit the Investment Adviser,
subject to prior approval by the Board and certain other conditions set
forth in an order previously granted to the Investment Adviser
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by the U.S. Securities and Exchange Commission (the "SEC"), to retain
sub-advisers or amend the terms of an existing sub-advisory agreement
without shareholder approval where the sub-adviser is not affiliated
with the Investment Adviser. Currently, the Investment Adviser must
obtain shareholder approval of any sub-advisory agreement with a new
sub-adviser that it wishes to retain to manage a Fund, as well as any
material changes to an existing sub-advisory agreement. As discussed in
more detail below, a manager of managers arrangement would permit the
Investment Adviser to avoid the expense and delays associated with
obtaining shareholder approval.
Proposal 5 only concerns shareholders of Rydex Series Funds U.S.
Government Money Market Fund (the "Money Market Fund"). Investors in
other Funds are not asked to vote on the fifth proposal. The fifth
proposal relates to the proposed elimination of the fundamental
investment policy on investing in other investment companies to permit
the Money Market Fund to make changes to its investment program as
discussed in more detail below. The Money Market Fund's current policy
on investing in other investment companies is not required and is more
prohibitive than applicable law requires. The Money Market Fund will
continue to invest in compliance with strict regulatory requirements
applicable to money market funds.
Q. WHY AM I BEING ASKED TO VOTE?
A. The Investment Company Act of 1940 (the "1940 Act"), the law that
regulates mutual funds, including the Funds, provides that a mutual
fund's investment advisory agreement terminates whenever there is a
"change in control" of the investment adviser. (In this context, the
term "investment adviser" applies to both an investment adviser and a
sub-adviser.) The change in the corporate ownership structure of the
Investment Adviser contemplated by the Transaction would constitute a
"change in control" (as this term is used for regulatory purposes) of
the Investment Adviser. Before an investment advisory agreement
terminates, a new investment advisory agreement must be in effect in
order for the investment adviser to continue to manage the mutual fund's
investments. For that reason, we are seeking shareholder approval of new
investment advisory agreements for the Funds (the "New Investment
Advisory Agreements"), as well as a new sub-advisory agreement between
the Investment Adviser and AIFS with respect to the Rydex Series
Funds--Long Short Interest Rate Strategy Fund ("Long Short Interest Rate
Strategy Fund") (the "New AIFS Agreement") (collectively, the "New
Agreements").
The Transaction will not result in material changes to the day-to-day
management and operations of the Funds or any increase in fees. The
personnel, officers and managers of the Investment Adviser will remain
the same. Upon completion of the Transaction, Guggenheim Capital will be
the parent company of the Investment Adviser. Guggenheim currently
manages the Investment Adviser and certain of its affiliates through an
indirect subsidiary.
The Boards of Trustees (collectively, the "Board") of Rydex Series Funds
and Rydex Dynamic Funds (the "Trusts") considered the Transaction and
voted in favor of the New Agreements, pursuant to which, subject to
their approval by each Fund's respective shareholders, the Investment
Adviser will continue to serve as investment adviser to the
ii
Funds, and AIFS will continue to serve as sub-adviser to Long Short
Interest Rate Strategy Fund after the completion of the Transaction. The
fees charged by the each of the Investment Adviser and AIFS
(collectively, the "Advisers") for their services to the Funds under
each New Agreement will be the same as their fees under the
corresponding Current Agreement. The other terms of the New Agreements
will also be the same in all material respects to those of the Current
Agreements.
With respect to the third proposal, you are being asked to vote for the
election of board members ("Trustees") because the Board believes it
would be appropriate, in light of the Transaction, to subject the
current Trustees to a shareholder vote and to ask shareholders to vote
to add a new Trustee who is affiliated with Guggenheim Capital. The
Board believes that it is in shareholders' best interest to have a Board
that is composed entirely of elected Trustees.
With respect to the fourth proposal, the 1940 Act makes it unlawful for
any person to act as an investment adviser (including a sub-adviser) to
a fund except pursuant to a written contract that has been approved by a
fund's board of trustees/directors as well as its shareholders. The
Investment Adviser and certain affiliated Funds of the Trusts have
previously received an exemptive order from the SEC pursuant to which
the Investment Adviser is permitted to retain sub-advisers and amend the
terms of existing sub-advisory agreements with unaffiliated sub-advisers
without shareholder approval. This type of arrangement, which gives more
flexibility to appoint investment sub-advisers to manage a fund, is
commonly referred to as a fund "manager of managers" arrangement. The
SEC's order permitting the Investment Adviser to use a manager of
managers arrangement requires that before a Fund may rely on the order,
the Fund must obtain shareholder approval (among other conditions).
Therefore, in order to provide the Investment Adviser with flexibility
(subject to Board approval) to retain sub-advisers and amend
sub-advisory agreements, you are being asked to approve of the use of
the manager of managers arrangement for the Funds. Shareholders should
note, however, that the Investment Adviser and the Board have no intent
to make an extensive use of this arrangement in the foreseeable future.
With respect to the fifth proposal, the 1940 Act requires the Money
Market Fund's shareholders to approve a change to the Money Market
Fund's fundamental investment policy with respect to investing in other
investment companies. The Money Market Fund's current fundamental
investment policy prohibits investing in other investment companies,
which unnecessarily limits investment strategies. Upon a request from
the Investment Adviser to make changes to the Money Market Fund's policy
to be able to invest a portion of the Money Market Fund's assets in
other funds, the Board has reviewed the Money Market Fund's fundamental
investment policies on investing in other investment companies and has
recommended the elimination of the policies. The proposal is unrelated
to the Transaction and only concerns shareholders of the Money Market
Fund.
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Q. WILL THE PROPOSED TRANSACTION AFFECT ME?
A. No. The operations of the Advisers, the fees payable to the Advisers,
and the persons responsible for the day-to-day investment management of
the Funds will remain unchanged. The Board has been assured that there
will be no reduction in the nature or quality of the investment advisory
and sub-advisory services provided to each Fund, as applicable, due to
the Transaction.
Q. WILL THERE BE ANY CHANGES TO THE FUNDS' OTHER SERVICE PROVIDERS?
A. The Transaction would also affect the control of certain of the Funds'
other servicer providers ("Affiliated Service Providers") as a result of
the Transaction. The Affiliated Service Providers include Rydex
Distributors, LLC which serves as the Funds' principal
underwriter/distributor (the "Distributor"), and Rydex Fund Services,
Inc., which provides general administrative, shareholder, dividend
disbursement, transfer agent and registrar services to the Funds. The
Affiliated Service Providers and the Investment Adviser are commonly
held. Under the 1940 Act, shareholder approval is not required in order
for the Affiliated Service Providers to continue providing services to
the Funds after the closing of the Transaction. The Board has also been
assured that there will be no material change in the nature or quality
of the services provided by the Affiliated Service Providers to each
Fund due to the Transaction.
Q. WILL MY FUND'S FEES FOR INVESTMENT ADVISORY AND SUB-ADVISORY SERVICES
INCREASE?
A. No. The fee rates under the New Agreements are identical to those under
the Current Agreements. Services also will remain substantially the same.
Q. WILL THE PROPOSED CHANGES TO THE BOARD RESULT IN HIGHER FUND EXPENSES?
A. No. Only "non-interested" Trustees (as that term is defined in the 1940
Act) receive compensation from the Funds they oversee. The proposed
additional Trustee would be an "interested" Trustee because of his
affiliation with Guggenheim Capital. Because interested Trustees do not
receive compensation from the Funds, the cost of this additional Trustee
would not be borne by the Funds.
Q. FOR SHAREHOLDERS OF THE MONEY MARKET FUND ONLY. WHAT EFFECT WILL THE
PROPOSED ELIMINATION OF THE MONEY MARKET FUND'S FUNDAMENTAL INVESTMENT
POLICIES ON INVESTING IN OTHER INVESTMENT COMPANIES HAVE ON THE MONEY
MARKET FUND?
A. While this proposal is intended to provide the Money Market Fund with
flexibility to invest in other funds, the Money Market Fund would
continue to be managed subject to the limitations on investing in other
investment companies imposed by the 1940 Act, as interpreted or modified
by regulatory authority having jurisdiction from time to time, as well
as the investment objectives, strategies, and policies expressed in the
Money Market Fund's registration statements as may be changed by the
Board from time to time, and regulations that apply to money market
funds.
iv
If the proposal is approved by shareholders, the Money Market Fund would
be permitted to invest in the shares of other investment companies (that
are money market funds). As a shareholder of another investment company,
the Money Market Fund would bear, along with other shareholders, its pro
rata portion of the other investment company's expenses, including
advisory fees, and would be exposed to the risks attributable to
investing in the selected funds. These expenses would be in addition to
the advisory and other expenses that the Money Market Fund bears
directly in connection with its own operations. Notwithstanding the
proposed elimination, at all times, the Money Market Fund will comply
with the provisions of the 1940 Act that apply to investments in other
investment companies and Securities and Exchange Commission Rule 2a-7,
which strictly prescribes the type of investments that money market
funds can invest in. The Money Market Fund will continue to seek to
maintain a stable $1.00 price per share as permitted by current Rule
2a-7.
Should the Money Market Fund's shareholders not approve the proposal to
eliminate the Money Market Fund's fundamental investment policy on
investing in other investment companies, the Fund's current fundamental
investment policy on investing in investment companies would continue to
apply unchanged and the Board would decide whether to make other changes
to the Money Market Fund's investment program.
Q. I OWN SHARES OF OTHER FUNDS IN THE RYDEX|SGI FUND COMPLEX AND RECEIVED
SIMILAR SOLICITATION MATERIALS REGARDING THOSE FUNDS. AM I ALSO BEING
ASKED TO APPROVE THE PROPOSALS CONTAINED IN THIS PROXY STATEMENT?
A. Yes. You are being asked to approve the proposals contained in this
Proxy Statement, in addition to any other proposals contained in other
proxy statements that you may receive for funds in the Rydex|SGI fund
complex.
Q. WHO IS ASKING FOR MY VOTE?
A. The enclosed proxy is being solicited by the Board of your Fund for use
at the Special Joint Meeting of Shareholders to be held on November 22,
2011 (the "Meeting"), and, if the Meeting is adjourned or postponed, at
any later meetings, for the purposes stated in the Notice of Special
Joint Meeting.
Q. HOW DOES THE BOARD SUGGEST THAT I VOTE?
A. After careful consideration, the Board unanimously recommends that you
vote "FOR" all of the proposals contained in the Joint Proxy Statement.
Please see the section entitled "Board Recommendation" with respect to
each proposal for a discussion of the Board's considerations in making
such recommendations.
Q. WHY AM I RECEIVING INFORMATION ABOUT FUNDS I DO NOT OWN?
A. The proposals are similar for each Fund, and management of the Funds has
concluded that it is cost-effective to hold the Meeting concurrently for
all of the Funds. You will be asked to vote separately on the proposals
with respect to the Fund(s) that you own. Assuming that the requisite
levels of aggregate shareholder consent are attained, an
v
unfavorable vote on a proposal by the shareholders of one Fund will not
affect the implementation of a comparable proposal by another Fund if
such proposal is approved by shareholders of that Fund.
Q. WHAT VOTE IS REQUIRED TO APPROVE THE PROPOSALS?
A. To be approved with respect to a particular Fund, each proposal, other
than Proposal 3, must be approved by a "vote of a majority of the
outstanding voting securities" of that Fund. With respect to the Money
Market Fund, the proposed elimination of the Money Market Fund's
fundamental investment policy on investing in other investment companies
also must be approved by a "vote of a majority of the outstanding voting
securities" of the Money Market Fund. In each case, the "vote of a
majority of the outstanding voting securities" is defined in the 1940
Act as the lesser of the vote of (i) 67% or more of the voting
securities of a Fund entitled to vote thereon present at the Meeting or
represented by proxy, if more than 50% of the Fund's outstanding voting
securities are present or represented by proxy; or (ii) more than 50% of
the outstanding voting securities of the Fund entitled to vote thereon.
With respect to Proposal 3, a plurality of the shares voting is required
to elect each individual nominated as a Trustee.
Q. WILL MY VOTE MAKE A DIFFERENCE?
A. Yes! Your vote is needed to ensure that the proposals can be acted upon.
We encourage all shareholders to participate in the governance of their
Fund(s). Additionally, your immediate response on the enclosed proxy
card, on the Internet or over the phone will help save the costs of any
further solicitations.
Q. IF I AM A SMALL INVESTOR, WHY SHOULD I BOTHER TO VOTE?
A. You should vote because every vote is important. If numerous
shareholders just like you fail to vote, the Funds may not receive
enough votes to go forward with the Meeting. If this happens, the Funds
will need to solicit votes again. This may delay the Meeting and the
approval of the proposals and generate unnecessary costs.
Q. HOW DO I PLACE MY VOTE?
A. You may provide a Fund with your vote by mail with the enclosed proxy
card, by Internet by following the instructions in the proxy voting
instructions, by telephone using the toll-free number listed in the
proxy voting instructions, or in person at the Meeting. You may use the
enclosed postage-paid envelope to mail your proxy card. Please follow
the enclosed instructions to utilize any of these voting methods. If you
need more information on how to vote, or if you have any questions,
please call the Funds' proxy solicitation agent at the telephone number
below.
Q. WHOM DO I CALL IF I HAVE QUESTIONS?
A. We will be happy to answer your questions about this proxy solicitation.
If you have questions, please call The Altman Group at 1-877-864-5058.
vi
Proxies may be revoked prior to the Meeting by timely executing and
submitting a revised proxy (following the methods noted above), by
giving written notice of revocation to the Fund(s) prior to the Meeting,
or by voting in person at the Meeting.
PROMPT EXECUTION AND RETURN OF THE ENCLOSED PROXY CARD IS REQUESTED. A
SELF-ADDRESSED, POSTAGE-PAID ENVELOPE IS ENCLOSED FOR YOUR CONVENIENCE, ALONG
WITH INSTRUCTIONS ON HOW TO VOTE OVER THE INTERNET OR BY TELEPHONE SHOULD YOU
PREFER TO VOTE BY ONE OF THOSE METHODS.
vii
RYDEX SERIES FUNDS
RYDEX DYNAMIC FUNDS
805 King Farm Boulevard, Suite 600
Rockville, Maryland 20850
(800) 820-0888
NOTICE OF SPECIAL JOINT MEETING OF SHAREHOLDERS
TO BE HELD ON NOVEMBER 22, 2011
Notice is hereby given that a Special Joint Meeting of Shareholders (the
"Meeting") of Rydex Series Funds and Rydex Dynamic Funds (each, a "Trust" and
collectively, the "Trusts") and each of their respective series listed on the
attached list (each, a "Fund" and collectively, the "Funds") will be held at the
Trusts' offices at 805 King Farm Boulevard, Suite 600, Rockville, Maryland 20850
on November 22, 2011 at 1:00 p.m. Eastern Time for the purposes listed below:
PROPOSAL SHAREHOLDERS SOLICITED TO VOTE
1. THE APPROVAL OF A NEW INVESTMENT ALL FUNDS
ADVISORY AGREEMENT BETWEEN EACH TRUST
AND SECURITY INVESTORS, LLC, WITH RESPECT
TO EACH FUND
2. THE APPROVAL OF A NEW SUB-ADVISORY RYDEX SERIES FUNDS--
AGREEMENT BETWEEN SECURITY INVESTORS, LONG SHORT INTEREST RATE STRATEGY FUND
LLC AND AMERICAN INDEPENDENCE
FINANCIAL SERVICES, LLC, WITH RESPECT TO
LONG SHORT INTEREST RATE STRATEGY FUND
3. THE APPROVAL OF THE ELECTION OF NOMINEES ALL FUNDS
TO THE BOARD OF TRUSTEES
4. THE APPROVAL OF A "MANAGER OF ALL FUNDS
MANAGERS" ARRANGEMENT FOR EACH OF THE
FUNDS
5. THE APPROVAL OF THE ELIMINATION OF THE RYDEX SERIES FUNDS--
FUNDAMENTAL INVESTMENT POLICY ON U.S. GOVERNMENT MONEY MARKET FUND
INVESTING IN OTHER INVESTMENT COMPANIES
6. TO TRANSACT SUCH OTHER BUSINESS AS MAY
PROPERLY COME BEFORE THE MEETING
After careful consideration, the Boards of Trustees of the Trusts
unanimously recommend that shareholders vote "FOR" Proposals 1, 2, 3, 4 and 5.
viii
Shareholders of record at the close of business on October 3, 2011 are
entitled to notice of, and to vote at, the Meeting, even if such shareholders or
insurance product owners no longer own such shares or products.
We call your attention to the accompanying Joint Proxy Statement. You are
requested to complete, date, and sign the enclosed proxy card and return it
promptly in the envelope provided for that purpose. Your proxy card also
provides instructions for voting via telephone or the Internet if you wish to
take advantage of these voting options. Proxies may be revoked prior to the
Meeting by timely executing and submitting a revised proxy (following the
methods noted above), by giving written notice of revocation to the Fund(s)
prior to the Meeting, or by voting in person at the Meeting.
By Order of the Boards of Trustees,
Richard M. Goldman
President
YOUR VOTE IS VERY IMPORTANT TO US REGARDLESS OF THE NUMBER OF VOTES YOU HOLD.
SHAREHOLDERS WHO DO NOT EXPECT TO ATTEND THE MEETING ARE REQUESTED TO COMPLETE,
SIGN, DATE AND RETURN THE ACCOMPANYING PROXY CARD IN THE ENCLOSED ENVELOPE,
WHICH NEEDS NO POSTAGE IF MAILED IN THE UNITED STATES. IT IS IMPORTANT THAT YOUR
PROXY CARD BE RETURNED PROMPTLY.
FOR YOUR CONVENIENCE, YOU MAY ALSO VOTE BY TELEPHONE OR INTERNET BY FOLLOWING
THE ENCLOSED INSTRUCTIONS. IF YOU VOTE BY TELEPHONE OR VIA THE INTERNET, PLEASE
DO NOT RETURN YOUR PROXY CARD UNLESS YOU ELECT TO CHANGE YOUR VOTE.
ix
FUNDS PARTICIPATING IN THE MEETING
ON NOVEMBER 22, 2011
RYDEX SERIES FUNDS
All-Asset Aggressive Strategy Fund Internet Fund Retailing Fund
All-Asset Conservative Strategy Inverse Emerging Markets 2x Russell 2000(R) 1.5x Strategy Fund
Fund Strategy Fund
Russell 2000(R) Fund
All-Asset Moderate Strategy Fund Inverse Government Long Bond
Strategy Fund S&P 500 Fund
Alternative Strategies Fund
Inverse High Yield Strategy Fund S&P 500 Pure Growth Fund
Alternative Strategies Allocation
Fund Inverse Mid-Cap Strategy Fund S&P 500 Pure Value Fund
Banking Fund Inverse NASDAQ-100(R) Strategy S&P MidCap 400 Pure Growth
Fund Fund
Basic Materials Fund
Inverse Russell 2000(R) Strategy S&P MidCap 400 Pure Value Fund
Biotechnology Fund Fund
S&P SmallCap 600 Pure Growth
Commodities Strategy Inverse S&P 500 Strategy Fund Fund
Fund
Japan 2x Strategy Fund S&P SmallCap 600 Pure Value
Consumer Products Fund Fund
Leisure Fund
Electronics Fund Strengthening Dollar 2x Strategy
Long/Short Commodities Strategy Fund
Emerging Markets 2x Strategy Fund Fund
Technology Fund
Energy Fund Long Short Equity Strategy Fund
Telecommunications Fund
Energy Services Fund Long Short Interest Rate Strategy
Fund Transportation Fund
Europe 1.25x Strategy Fund
Managed Futures Strategy Fund U.S. Government Money Market
Event Driven and Distressed Fund
Strategies Fund Mid-Cap 1.5x Strategy Fund
U.S. Long Short Momentum Fund
Financial Services Fund Multi-Hedge Strategies Fund
Utilities Fund
Government Long Bond 1.2x NASDAQ-100(R) Fund
Strategy Fund Weakening Dollar 2x Strategy Fund
Nova Fund
Health Care Fund
Precious Metals Fund
High Yield Strategy Fund
Real Estate Fund
xii
RYDEX DYNAMIC FUNDS
Dow 2x Strategy Fund Inverse S&P 500 2x Strategy Fund
Inverse Dow 2x Strategy Fund NASDAQ-100(R) 2x Strategy Fund
Inverse NASDAQ-100(R) 2x Strategy Fund Russell 2000(R) 2x Strategy Fund
Inverse Russell 2000(R) 2x Strategy Fund S&P 500 2x Strategy Fund
xiii
TABLE OF CONTENTS
OVERVIEW OF THE PROPOSALS.................................................................... 3
PROPOSALS 1-2: Approval of the New Agreements .......................................... 3
Information Regarding the Transaction ............................................. 3
Section 15(f) of the 1940 Act...................................................... 4
Approval of the New Agreements by the Board........................................ 5
Board Considerations in Approving the New Agreements............................... 6
New Agreements..................................................................... 7
PROPOSAL 3: Approval of the Election of Trustees ....................................... 8
PROPOSAL 4: Approval of a "Manager of Managers" Arrangement............................. 9
PROPOSAL 5: Money Market Fund only--Approval of the Elimination of the
Fund's Fundamental Investment Policy on Investing in Other Investment
Companies . ...................................................................... 10
PROPOSAL 1--THE APPROVAL OF NEW INVESTMENT ADVISORY
AGREEMENTS WITH RESPECT TO ALL FUNDS.................................................... 11
The Investment Adviser.................................................................. 11
Material Terms of the New Investment Advisory Agreements ............................... 11
BOARD RECOMMENDATION ON PROPOSAL 1........................................................... 13
PROPOSAL 2--THE APPROVAL OF A NEW SUB-ADVISORY AGREEMENT .................................... 14
Information About AIFS.................................................................. 14
Material Terms of the AIFS Sub-Advisory Agreement....................................... 15
BOARD RECOMMENDATION ON PROPOSAL 2........................................................... 15
PROPOSAL 3--THE APPROVAL OF THE ELECTION OF TRUSTEES FOR THE TRUST........................... 16
Information Regarding the Nominees...................................................... 16
Board's Consideration of Each Nominee's Qualifications, Experience, Attributes
or Skills ....................................................................... 21
Principal Officers of the Funds ........................................................ 24
Nominee Ownership of Portfolio Shares .................................................. 27
Board Compensation...................................................................... 29
Committees and Meetings of the Board.................................................... 30
Independent Registered Public Accounting Firm .......................................... 32
BOARD RECOMMENDATION ON PROPOSAL 3........................................................... 33
PROPOSAL 4--THE APPROVAL OF A "MANAGER OF MANAGERS"
ARRANGEMENT WITH RESPECT TO ALL FUNDS .................................................. 34
"Manager of Managers" Arrangement....................................................... 34
Conditions of the Exemptive Relief...................................................... 35
Board Considerations in Approving the "Manager of Managers" Arrangement ................ 35
BOARD RECOMMENDATION ON PROPOSAL 4........................................................... 36
PROPOSAL 5 -- THE APPROVAL OF A CHANGE TO THE FUNDAMENTAL
INVESTMENT POLICY ON INVESTING IN OTHER INVESTMENT
COMPANIES WITH RESPECT TO THE MONEY MARKET FUND ........................................ 37
Proposed Fundamental Investment Policy.................................................. 37
Current Fundamental Investment Policy .................................................. 37
Discussion of Proposed Modification..................................................... 37
xiv
BOARD RECOMMENDATION ON PROPOSAL 5........................................................... 38
OTHER BUSINESS .............................................................................. 39
ADDITIONAL INFORMATION....................................................................... 39
Administrator, Principal Underwriter and Transfer Agent ................................ 39
Affiliations and Affiliated Brokerage .................................................. 39
Other Information ...................................................................... 39
Voting Information ..................................................................... 39
Shareholder Proposals................................................................... 42
xv
APPENDICES
Appendix A CORPORATE STRUCTURE OF THE INVESTMENT ADVISER.................. A-1
Appendix B FORMS OF NEW INVESTMENT ADVISORY AGREEMENTS.................... B-1
Appendix C INFORMATION REGARDING THE INVESTMENT ADVISORY
AGREEMENTS AND FEES PAID TO THE INVESTMENT
ADVISER AND AFFILIATES ........................................ C-1
Appendix D TRUSTEES/MANAGERS AND OFFICERS OF THE INVESTMENT ADVISER ...... D-1
Appendix E ADVISORY FEE RATES OF FUNDS WITH SIMILAR
INVESTMENT OBJECTIVES ADVISED BY SECURITY
INVESTORS, LLC ................................................ E-1
Appendix F FORM OF NEW SUB-ADVISORY AGREEMENT WITH
AMERICAN INDEPENDENCE FINANCIAL SERVICES, LLC ................. F-1
Appendix G INFORMATION REGARDING THE SUB-ADVISORY
AGREEMENT WITH AMERICAN INDEPENDENCE FINANCIAL
SERVICES, LLC AND FEES PAID TO THE SUB-ADVISER ................ G-1
Appendix H DIRECTORS/TRUSTEES/MANAGERS AND OFFICERS OF
AMERICAN INDEPENDENCE FINANCIAL SERVICES, LLC ................. H-1
Appendix I ADVISORY FEE RATES OF FUNDS WITH SIMILAR
INVESTMENT OBJECTIVES ADVISED BY AMERICAN
INDEPENDENCE FINANCIAL SERVICES, LLC. ......................... I-1
Appendix J OUTSTANDING SHARES............................................. J-1
Appendix K BENEFICIAL OWNERS OF MORE THAN 5% OF A CLASS OF EACH FUND ..... K-1
Appendix L MANAGEMENT OWNERSHIP .......................................... L-1
Appendix M NOMINATING COMMITTEE CHARTER .................................. M-1
xvi
RYDEX SERIES FUNDS
RYDEX DYNAMIC FUNDS
805 King Farm Boulevard, Suite 600
Rockville, Maryland 20850
(800) 820-0888
JOINT PROXY STATEMENT
SPECIAL JOINT MEETING OF SHAREHOLDERS
TO BE HELD ON NOVEMBER 22, 2011
This joint proxy statement ("Joint Proxy Statement") and enclosed notice
and proxy card are being furnished in connection with the solicitation of
proxies by the Boards of Trustees (collectively, the "Board") of Rydex Series
Funds and Rydex Dynamic Funds (each, a "Trust" and collectively, the "Trusts").
The proxies are being solicited for use at a special joint meeting of
shareholders of the Trusts to be held at the Trusts' offices at 805 King Farm
Boulevard, Suite 600, Rockville, Maryland 20850 on November 22, 2011 at 1:00
p.m. Eastern Time, and at any and all adjournments or postponements thereof (the
"Meeting").
The Board has called the Meeting and is soliciting proxies from
shareholders of each series of the Trusts listed in the accompanying notice to
this Joint Proxy Statement (each, a "Fund" and collectively, the "Funds") for
the purposes listed below:
PROPOSAL SHAREHOLDERS SOLICITED TO VOTE
1. THE APPROVAL OF A NEW INVESTMENT ALL FUNDS
ADVISORY AGREEMENT BETWEEN EACH TRUST
AND SECURITY INVESTORS, LLC, WITH RESPECT
TO EACH FUND ("PROPOSAL 1")
2. THE APPROVAL OF A NEW SUB-ADVISORY RYDEX SERIES FUNDS--
AGREEMENT BETWEEN SECURITY INVESTORS, LONG SHORT INTEREST RATE STRATEGY FUND
LLC AND AMERICAN INDEPENDENCE
FINANCIAL SERVICES, LLC, WITH RESPECT TO
LONG SHORT INTEREST RATE STRATEGY FUND
("PROPOSAL 2")
3. THE APPROVAL OF THE ELECTION OF NOMINEES ALL FUNDS
TO THE BOARD OF TRUSTEES ("PROPOSAL 3")
4. THE APPROVAL OF A "MANAGER OF ALL FUNDS
MANAGERS" ARRANGEMENT FOR EACH OF THE
FUNDS ("PROPOSAL 4")
5. THE APPROVAL OF THE ELIMINATION OF THE RYDEX SERIES FUNDS--
FUNDAMENTAL INVESTMENT POLICY ON
INVESTING IN OTHER INVESTMENT COMPANIES U.S. GOVERNMENT MONEY MARKET FUND
("PROPOSAL 5")
6. TO TRANSACT SUCH OTHER BUSINESS AS MAY
PROPERLY COME BEFORE THE MEETING
This Joint Proxy Statement and the accompanying notice and the proxy card
are being first mailed to shareholders on or about October 17, 2011.
The Board has determined that the use of this Joint Proxy Statement for
the Meeting is in the best interests of each Fund and its shareholders in light
of the similar matters being considered and voted on by the shareholders of the
other Funds. You are entitled to vote at the Meeting of each Fund of which you
are a shareholder as of the close of business on October 3, 2011 (the "Record
Date").
If you have any questions about the Proposals or about voting, please
call The Altman Group, the Funds' proxy solicitor, at 1-877-864-5058.
IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS
FOR THE MEETING TO BE HELD ON NOVEMBER 22, 2011
This Joint Proxy Statement is available at www.proxyonline.us/docs/rydexsgi.
In addition, with respect to Rydex Dynamic Funds and Rydex Series Funds
(Commodities Strategy Fund, Long/Short Commodities Strategy Fund, Managed
Futures Strategy Fund and Multi-Hedge Strategies Fund only) shareholders can
find important information about each Fund in the Fund's annual report, dated
December 31, 2010, including financial reports for the fiscal year ended
December 31, 2010, and in any recent semi-annual report succeeding such annual
report, if any. With respect to Rydex Series Funds (except for those Funds
listed above), shareholders can find important information about each Fund in
the Fund's annual report, dated March 31, 2011, including financial reports for
the fiscal year ended March 31, 2011, and in any recent semi-annual report
succeeding such annual report, if any. You may obtain copies of these reports
without charge by writing to a Trust, by calling the telephone number shown on
the front page of this Joint Proxy Statement or at www.rydex-sgi.com.
2
OVERVIEW OF THE PROPOSALS
PROPOSALS 1 - 2
APPROVAL OF THE NEW AGREEMENTS
Proposals 1 and 2 relate to actions that need to be taken in response to
an impending transaction (the "Transaction") involving Securities Investors,
LLC, which operates under the name Rydex Investments, the investment adviser to
each of the Funds (the "Investment Adviser").
The Investment Company Act of 1940 (the "1940 Act"), the law that
regulates mutual funds, such as the Funds, provides that a mutual fund's
investment advisory agreement terminates whenever there is a "change in control"
of the investment adviser. Pursuant to the Transaction, there will be a "change
in control" of the Investment Adviser. In order for the Investment Adviser to
continue to advise the Funds and manage their investments, a new investment
advisory agreement must be in effect upon the consummation of the Transaction.
For that reason, we are seeking shareholder approval of new investment advisory
agreements for the Funds.
In addition, the Transaction will result in the termination of the
current sub-advisory agreements between the Investment Adviser and American
Independence Financial Services, LLC ("AIFS") with respect to the Rydex Series
Funds Long Short Interest Rate Strategy Fund (the "AIFS Fund"). Accordingly,
Proposal 1 relates to the approval by shareholders of new investment advisory
agreements between the Investment Adviser and the Funds (the "New Investment
Advisory Agreements"), and Proposal 2 relates to the approval by shareholders of
a new sub-advisory agreement between the Investment Adviser and AIFS with
respect to the AIFS Fund (the "New AIFS Agreement") (together with the New
Investment Advisory Agreements, the "New Agreements").
FOR THE REASONS DISCUSSED BELOW, THE BOARD RECOMMENDS
THAT SHAREHOLDERS VOTE "FOR" THE APPROVAL OF THE NEW
AGREEMENTS.
INFORMATION REGARDING THE TRANSACTION
Summary Discussion--Currently, the Investment Adviser is a part of a
large group of companies that also includes businesses such as Security Benefit
Life Insurance Company. The Investment Adviser is managed by an indirect
wholly-owned subsidiary of Guggenheim Capital, LLC ("Guggenheim Capital").
Guggenheim Capital wishes to purchase the Investment Adviser and certain
affiliated businesses. This Transaction will be effected by Guggenheim Capital
buying 100% of the equity of the holding company that owns the Investment
Adviser. After the Transaction, Guggenheim Capital will control the Investment
Adviser (through one or more of its subsidiaries), and it is expected that the
services rendered to the Funds by the Investment Adviser will not change.
3
Detailed Discussion--On September 20, 2011, Guggenheim Capital agreed to
purchase the indirect holding company of the Investment Adviser. Guggenheim
Capital's subsidiary, Guggenheim Partners, LLC ("Guggenheim") is a global,
independent, privately-held, diversified financial services firm with more than
1,500 dedicated professionals. Headquartered in Chicago and New York, the firm
operates through offices in 25 cities in the U.S., Europe and Asia. Guggenheim
operates businesses in investment management, capital markets, wealth management
and merchant banking. Within the investment and wealth management businesses,
Guggenheim specializes in fixed income and alternative investments, and in
providing sophisticated wealth advisory and family office services. Within
capital markets, it specializes in providing debt financing and structured
finance solutions to clients. Its merchant banking activities include a
portfolio of investments in funds managed by it, joint venture business
investments, and new business launch activities not integrated into other
primary operating businesses. Detailed information on the effect of the
Transaction on the ownership structure of the Investment Adviser is set forth in
Appendix A to this Joint Proxy Statement.
The Transaction will not result in material changes to the day-to-day
management and operations of the Funds. The personnel, officers and managers of
the Investment Adviser will remain the same. Guggenheim Capital will be the
parent company of the Investment Adviser.
In addition, as a result of the Transaction, Guggenheim Capital will
acquire control of the Funds' principal underwriter/distributor, Rydex
Distributors, LLC (the "Distributor"), an affiliate of the Investment Adviser.
Under the 1940 Act, shareholder approval is not required in order for the
Distributor to continue providing services to the Funds after the closing of the
Transaction. The Board has also approved the continuation of the agreements
related to the implementation of the distribution plans adopted by the Board on
behalf of such Funds pursuant to Rule 12b-1 under the 1940 Act.
While the parties expect the Transaction to be completed in late 2011 or
early 2012, it is subject to various conditions (including a condition that 80%
or more of the Funds' assets managed by the Investment Adviser approve the New
Investment Advisory Agreements), and may be delayed or even terminated due to
unforeseen circumstances. If for some reason the Transaction does not occur, the
current investment advisory agreements between the Investment Adviser and the
Funds (each, a "Current Investment Advisory Agreement" and collectively, the
"Current Investment Advisory Agreements") and the current sub-advisory agreement
between the Investment Adviser and AIFS with respect to the AIFS Fund (the
"Current AIFS Agreement") (collectively, the "Current Agreements") will not
terminate and will remain in effect, and the New Agreements will not be entered
into, even if they have been approved by Fund shareholders. If Proposal 1 is not
approved by shareholders of any Fund, the Board will evaluate other short- and
long-term options permitted by law, which could include interim investment
advisory agreements of limited duration with the Investment Adviser, or
maintaining the current ownership structure pending further discussions.
SECTION 15(f) OF THE 1940 ACT
Section 15(f) of the 1940 Act provides that, when a change in control of
an investment adviser occurs, the investment adviser or any of its affiliated
persons may receive any amount or benefit in connection with the change in
control as long as two conditions are met. The first
4
condition specifies that no "unfair burden" may be imposed on the fund as a
result of a transaction relating to the change in control, including any express
or implied terms, conditions or understandings. The term "unfair burden," as
defined in the 1940 Act, includes any arrangement during the two-year period
after the change in control transaction whereby the investment adviser (or
predecessor or successor adviser), or any "interested person" (as defined in the
1940 Act) of any such investment adviser, receives or is entitled to receive any
compensation, directly or indirectly, from the investment company or its
security holders (other than fees for bona fide investment advisory or other
services), or from any person in connection with the purchase or sale of
securities or other property to, from, or on behalf of the fund (other than fees
for bona fide principal underwriting services), which could limit the ability of
the fund to engage in brokerage transactions with certain broker-dealers,
although such limits are not expected to cause any fund to change its brokerage
relationships. The second condition specifies that, during the three-year period
immediately following consummation of the change in control transaction, at
least 75% of the fund's board of trustees must not be "interested persons" (as
defined in the 1940 Act) of the investment adviser or predecessor adviser.
Consistent with the conditions of Section 15(f), Guggenheim Capital has
agreed that it will not take any action that would have the effect, directly or
indirectly, of causing any requirement of the provisions of Section 15(f) to be
violated with respect to the Transaction. The Investment Adviser has represented
to the Board that no unfair burden would be imposed on the Funds as a result of
the Transaction.
APPROVAL OF THE NEW AGREEMENTS BY THE BOARD
At a Special Meeting of the Board held on August 16, 2011 (the "August
Special Board Meeting"), at which a majority of the members of the Board (the
"Trustees"), including a majority of the Trustees who are not "interested
persons" (as defined under the 1940 Act) of the Trust and who are not interested
persons of any party to the New Investment Advisory Agreements (the "Independent
Trustees"), were present, the Board considered the New Investment Advisory
Agreements, pursuant to which, subject to their approval by each Fund's
shareholders, the Investment Adviser will continue to serve each Fund as
investment adviser after the completion of the Transaction. At a Special Meeting
of the Board held on September 14, 2011 (the "September Special Board Meeting",
and together with the August Special Board Meeting, the "Special Board
Meetings") at which a majority of the Trustees, including a majority of the
Independent Trustees, were present, the Board considered further information
about the Transaction and voted in favor of the New Investment Advisory
Agreements.
The Investment Adviser's rate of fees for its services to each Fund under
each applicable New Investment Advisory Agreement will be the same as its fees
under the corresponding Current Investment Advisory Agreement. The other terms
of each New Investment Advisory Agreement will also be the same in all material
respects to those of the corresponding Current Investment Advisory Agreement. As
a result, in reviewing the New Investment Advisory Agreements at the Special
Board Meetings, the Board also considered its review of relevant materials
relating to the Current Investment Advisory Agreements at the Board's contract
review meeting on August 11, 2011 and contract renewal meeting on August 17,
2011 (together, the "2011 Renewal Meeting").
5
BOARD CONSIDERATIONS IN APPROVING THE NEW AGREEMENTS
Prior to the Special Board Meetings, representatives of Guggenheim
Capital informed the Board of the Transaction. With respect to the Transaction,
the Board reviewed materials received from Guggenheim Capital, including
information relating to the terms of the Transaction. The Board also reviewed
information regarding Guggenheim Capital, including, but not limited to: (a)
certain representations concerning Guggenheim Capital's financial condition, (b)
information regarding the new proposed ownership structure and its possible
effect on shareholders, (c) information regarding the consideration to be paid
by Guggenheim Capital, and (d) potential conflicts of interest.
In considering the New Agreements, the Board determined that the New
Agreements would enable shareholders of the Funds to continue to obtain high
quality services at a cost that is appropriate, reasonable, and in the best
interests of their shareholders. The Board, including the Independent Trustees,
unanimously approved the New Agreements. In reaching their decision, the
Trustees carefully considered information that they had received throughout the
year as part of their regular oversight of the Funds, including, in particular,
information from the Investment Adviser and AIFS (collectively, the "Advisers")
that the Board had received relating to the Current Agreements at the Board's
2011 Renewal Meeting. The Trustees noted that, at the 2011 Renewal Meeting, they
had obtained and reviewed a wide variety of information, including certain
comparative information regarding performance of the Funds relative to
performance of other comparable mutual funds. They also considered the evolution
of the Rydex|SGI family of funds and the Investment Adviser since the change in
control of the Investment Adviser in 2010 and Guggenheim Capital's commitment to
the success of the Investment Adviser and the Funds.
In addition, as a part of their required consideration of the renewal of
the Current Agreements at the 2011 Renewal Meeting, the Trustees, including the
Independent Trustees, had evaluated a number of considerations, including among
others: (a) the quality of the Advisers' investment advisory and other services;
(b) the Advisers' investment management personnel; (c) the Advisers' operations
and financial condition; (d) the Advisers' brokerage practices (including any
soft dollar arrangements) and investment strategies; (e) the level of the fees
that the Advisers charge compared with the fees charged to comparable mutual
funds or accounts; (f) each Fund's overall fees and operating expenses compared
with similar mutual funds; (g) the level of the Advisers' profitability from its
Fund-related operations; (h) the Advisers' compliance systems; (i) the Advisers'
policies on and compliance procedures for personal securities transactions; (j)
the Advisers' reputation, expertise and resources in the financial markets; and
(k) Fund performance compared with similar mutual funds. Based on the Board's
deliberations at the 2011 Renewal Meeting, and its evaluation of the information
regarding the Transaction and the fact that the Transaction is not expected to
change the level and quality of services rendered by the Advisers to any of the
Funds, the Board, including all of the Independent Trustees, unanimously: (a)
concluded that terms of the New Agreements are fair and reasonable; (b)
concluded that the Advisers' fees were reasonable in light of the services that
they provide to the Funds; and (c) agreed to approve the New Agreements, subject
to shareholder approval.
6
NEW AGREEMENTS
NATURE, EXTENT AND QUALITY OF SERVICES PROVIDED BY THE ADVISERS. At the
2011 Renewal Meeting, the Board reviewed the scope of services to be provided by
the Investment Adviser under the Current Investment Advisory Agreements and by
AIFS under the Current AIFS Agreement, and, at the Special Board Meetings, noted
that there would be no significant differences between the scope of services
required to be provided by the Advisers under the Current Agreements (which had
been recently approved by shareholders and renewed by the Board at the 2011
Renewal Meeting) and the scope of services required to be provided by the
Advisers under the New Agreements. The Board noted that the key investment and
management personnel of the Investment Adviser servicing the Funds and the
management personnel of AIFS servicing the AIFS Fund are expected to remain the
same following the Transaction. The Trustees also considered Guggenheim
Capital's representations to the Board that the Investment Adviser would
continue to provide investment and related services that were of materially the
same quality and quantity as services provided to the Funds in the past, and
that these services are appropriate in scope and extent in light of the Funds'
operations, the competitive landscape of the investment company business and
investor needs. The Board also noted that AIFS was not involved in the
Transaction and that the approval of the New AIFS Agreement with AIFS was
required due to the proposed assignment of the Current Investment Advisory
Agreements with the Investment Adviser.
FUND EXPENSES AND PERFORMANCE OF THE FUNDS AND THE ADVISERS. At the 2011
Renewal Meeting, the Board had reviewed statistical information prepared by the
Advisers regarding the expense ratio components and performance of each Fund.
Based on the representations made by Guggenheim Partners at the August Special
Board Meeting that the Investment Adviser would continue to operate following
the closing of the Transaction in much the same manner as it currently operates,
the Board concluded that the investment performance of the Investment Adviser
was not expected to be affected by the Transaction. The Board also concluded
that AIFS would continue to operate following the closing of the Transaction in
much the same manner as it operates today and, as a result, the Board concluded
that the investment performance of AIFS was not expected to be affected by the
Transaction.
COSTS OF SERVICES PROVIDED TO THE FUNDS AND PROFITS REALIZED BY THE
ADVISERS AND THEIR AFFILIATES. At the 2011 Renewal Meeting, the Board had
reviewed information about the profitability of the Funds to the Investment
Adviser based on the advisory fees payable under the Current Investment Advisory
Agreements. At that meeting, the Board had also analyzed the Funds' expenses,
including the investment advisory fees paid to the Investment Adviser. The Board
also had reviewed reports comparing the expense ratios and sub-advisory fees to
those of other comparable mutual funds and concluded that AIFS' sub-advisory
fees were reasonable and the result of arm's length negotiation. At the Special
Board Meetings, the Board considered the fact that the fee rates payable to each
of the Advisers would be the same under each Fund's New Agreements as they are
under such Fund's Current Agreements. At that meeting, the Board had also
concluded that, in the near future, the profits to be realized by AIFS and its
affiliates under the New AIFS Agreement, and from other relationships between
the Funds and AIFS and its affiliates, if any, should remain within the range
the Board previously considered reasonable and appropriate. With respect to
anticipated profitability, the Board noted that it was too early to
7
predict how the Transaction would affect the Advisers' profitability with
respect to the Funds, but noted that this matter would be given further
consideration on an ongoing basis.
ECONOMIES OF SCALE. In connection with its review of the Funds'
profitability analysis at the 2011 Renewal Meeting, the Board reviewed
information regarding economies of scale or other efficiencies that may result
from increases in the Funds' asset levels. The Trustees noted that the fees
would not change under the New Agreements, and that no additional economies of
scale would be directly realized as a result of the Transaction. They also noted
that they will have the opportunity to again review the appropriateness of the
fees payable to the Advisers under the New Agreements when the renewal of the
New Agreements comes before the Board.
OTHER BENEFITS TO THE ADVISERS AND/OR ITS AFFILIATES. In addition to
evaluating the services provided by the Investment Adviser, the Board had
considered the nature, extent, quality and cost of the distribution services
performed by the Distributor under a separate agreement at the 2011 Renewal
Meeting. At the Special Board Meetings, the Board reviewed information regarding
potential economies of scale arising from the integration of the asset
management businesses of Guggenheim Capital. The Board also considered the terms
of the Transaction and the changes to the corporate ownership structure of the
Investment Adviser, noting that the Investment Adviser would no longer be a
subsidiary of SBC. In this regard, the Board noted that, under the corporate
structure after the Transaction, the Investment Adviser would be more closely
controlled by Guggenheim Capital, which could benefit Guggenheim Capital. The
Board also noted that the costs associated with the Transaction would be borne
by Guggenheim Capital (or its affiliates) and not the Funds.
With respect to the New AIFS Agreement, at the 2011 Renewal Meeting, the
Board received and considered information regarding the character and amount of
other incidental benefits AIFS might receive as a result of its relationship
with the AIFS Fund, including its soft dollar practices, if any. The Board
concluded that, taking into account any incidental benefits AIFS might receive,
the terms of the Current AIFS Agreement, including the compensation to be paid
thereunder, were reasonable. At its Special Board Meetings, the Board considered
other benefits to AIFS and its affiliates expected to be derived from its
relationships with the Funds as a result of the Transaction and noted that no
additional benefits were expected because AIFS was not a party to the
Transaction.
PROPOSAL 3
ELECTION OF TRUSTEES
Proposal 3 relates to the election of the following nine individuals to
the Board: Donald C. Cacciapaglia, Corey A. Colehour, J. Kenneth Dalton, John O.
Demaret, Richard M. Goldman, Werner E. Keller, Thomas F. Lydon, Patrick T.
McCarville and Roger Somers. All of the nominees, except for Mr. Cacciapaglia,
currently serve on the Board. If elected, the terms of the nominees will begin
shortly after the shareholder vote and each nominee will serve as Trustee for
the life of the Trusts or until retirement, removal, or his office is terminated
pursuant to the Trusts' Declarations of Trust. Unless and until such new terms
begin, the existing Trustees will continue to serve their current terms. In
connection with the Transaction, the Board believes that expanding the Board to
include Mr. Cacciapaglia, who is a member of senior management of
8
Guggenheim's investment management business, and who is proposed to serve on the
other boards in the Rydex|SGI family of funds would be appropriate. If elected
by shareholders, Mr. Cacciapaglia's term as Trustee would commence shortly
after the shareholder vote.
The Board believes that it is in shareholders' best interest to have a
Board that is composed entirely of elected trustees (and to comply with certain
legal requirements regarding the proportion of board members that need to have
been elected by shareholders). Because a shareholder vote is required to approve
the New Investment Advisory Agreements, the Board has proposed that shareholders
elect all of the nominees during the same shareholder meeting, which would avoid
the expense of preparing and mailing another proxy statement solely for the
election of Trustees.
PROPOSAL 4
APPROVAL OF A "MANAGER OF MANAGERS" ARRANGEMENT
Shareholders of the Funds also are being asked to consider the approval
of a "manager of mangers" arrangement for each of the Funds to permit the
Investment Adviser, subject to prior approval by the Board, to retain
sub-advisers or amend the terms of an existing sub-advisory agreement without
shareholder approval where the sub-adviser is not affiliated with the Investment
Adviser. The 1940 Act makes it unlawful for any person to act as an investment
adviser (including a sub-adviser) to a fund except pursuant to a written
contract that has been approved by the fund's board as well as shareholders.
Therefore, the Investment Adviser is generally required to obtain shareholder
approval prior to retaining a new sub-adviser, which can be costly.
The Investment Adviser and certain affiliated funds have previously
obtained an exemptive order from the U.S. Securities and Exchange Commission
("SEC"), pursuant to which the Investment Adviser may retain a new sub-adviser
to manage a fund, or amend the terms of an existing sub-advisory agreement
without prior shareholder approval, subject to certain conditions, including a
requirement to send information to shareholders with respect to the appointment
of a new sub-adviser (the "Manager of Managers Order"). In addition to the other
conditions imposed by the Manager of Managers Order, before the arrangement may
be relied upon for a Fund, shareholders of the Fund must approve the
arrangement. Although no sub-advisers currently serve the Funds, because
shareholder approval is being solicited for other proposals, you are being asked
to approve the reliance by the Investment Adviser and the Funds on the Manager
of Managers Order. If approved, the Manager of Managers Order would allow the
Investment Adviser, subject to Board review and approval, to retain or replace
sub-advisers without the delay and expenses associated with soliciting
shareholder approval. Shareholders should note, however, that the Investment
Adviser and the Board have no intent to make an extensive use of this
arrangement for the Funds in the foreseeable future.
9
PROPOSAL 5
MONEY MARKET FUND ONLY--APPROVAL OF THE ELIMINATION OF THE FUND'S FUNDAMENTAL
INVESTMENT POLICY ON INVESTING IN OTHER INVESTMENT COMPANIES
Shareholders of the Rydex Series Funds U.S. Government Money Market Fund
(the "Money Market Fund") also is being asked to consider the approval of the
elimination of the Money Market Fund's current fundamental investment policies
on investing in other investment companies. Under the 1940 Act, any change to a
fundamental investment policy must be approved by shareholders of the fund. The
1940 Act does not require that a fund adopt a fundamental investment policy on
investing in other investment companies. Therefore, the Money Market Fund's
current fundamental investment policy on investing in other investment companies
is unnecessary. This proposal is motivated by the decision to change the Money
Market Fund's investment strategies in order to invest in other investment
companies when the Investment Adviser deems such an investment in the best
interests of the Money Market Fund. The Money Market Fund's current policy
restricts unnecessarily the Money Market Fund's ability to invest in other
investment companies so the Investment Adviser proposed, and the Board agreed,
to eliminate the Fund's policy on investing in other investment companies.
Accordingly, Proposal 5 seeks approval of the elimination of the Money Market
Fund's fundamental investment policy on investing in other investment companies
in order to permit the Money Market Fund to invest in other investment
companies. Proposal 5 is unrelated to Proposals 1 and 2. The Investment Adviser
believes that it could be appropriate, when market conditions warrant, for the
Money Market Fund to invest in other money market funds. The Investment Adviser
also believes that this change could improve yield and could permit the Fund to
have exposure to new attractive investment opportunities. The Money Market Fund
will remain subject to strict regulatory requirements that apply to money market
funds.
THE BOARD, INCLUDING THE INDEPENDENT TRUSTEES,
UNANIMOUSLY RECOMMENDS THAT SHAREHOLDERS VOTE
"FOR" THE APPROVAL OF THE NEW AGREEMENTS, "FOR" THE ELECTION OF
EACH NOMINEE, "FOR" THE APPROVAL OF THE A MANAGER OF MANAGERS
ARRANGEMENT AND "FOR" THE ELIMINATION OF THE FUNDAMENTAL
INVESTMENT POLICY ON INVESTING IN OTHER INVESTMENT COMPANIES
FOR EACH MONEY MARKET FUND. UNMARKED, PROPERLY SIGNED AND
DATED PROXIES WILL BE SO VOTED.
10
PROPOSAL 1--THE APPROVAL OF NEW INVESTMENT ADVISORY
AGREEMENTS WITH RESPECT TO ALL FUNDS
As discussed above, Proposal 1 relates to the approval by shareholders of
the New Investment Advisory Agreements between the Investment Adviser and each
of the Funds. You are being asked to vote separately on Proposal 1 solely with
respect to the Fund(s) that you own. Forms of the New Investment Advisory
Agreements are attached in Appendix B.
The terms of the New Investment Advisory Agreements are substantially
identical to those of the Current Investment Advisory Agreements, which were
recently approved by shareholders, except with respect to the date of execution.
Consequently, upon shareholder approval, the Investment Adviser will continue to
render substantially the same services to the Funds under the New Investment
Advisory Agreements that it currently renders to the Funds under the Current
Investment Advisory Agreements.
The Current Investment Advisory Agreements will remain in place until the
completion of the Transaction, at which time, as a result of the change in the
control of the Investment Adviser, the Current Investment Advisory Agreements
will terminate. If for any reason the Transaction does not occur, the Current
Investment Advisory Agreements will not terminate and will remain in effect, and
the New Investment Advisory Agreements will not be entered into, even if they
have been approved by Fund shareholders.
THE INVESTMENT ADVISER
Security Investors, LLC, which operates under the name Rydex Investments,
is located at 805 King Farm Boulevard, Suite 600, Rockville, Maryland 20850, and
currently serves as investment adviser to the Funds pursuant to the Current
Investment Advisory Agreements. Information regarding the Current Investment
Advisory Agreements, including (a) the date of the agreements, (b) the date on
which they were last approved by shareholders and (c) the rate of compensation
to the Investment Adviser, is provided in Appendix C. If the New Investment
Advisory Agreements are approved by shareholders, they will continue for an
initial term of two years and for subsequent one-year terms so long as they are
renewed annually in accordance with their terms (see discussion under "Term and
Continuance" below).
Information regarding the name(s), address(es) and principal
occupation(s) of the principal executive officer(s) and director(s) of the
Investment Adviser is set forth in Appendix D. A list of the Trustees and
officers of the Trusts who hold positions with the Investment Adviser also is
set forth in Appendix D. In addition, set forth in Appendix E is a list of other
registered investment companies with similar investment objectives as each Fund,
for which the Investment Adviser acts as investment manager, adviser or
sub-adviser. (As previously noted, the ownership structure of the Investment
Adviser is set forth in Appendix A.)
MATERIAL TERMS OF THE NEW INVESTMENT ADVISORY AGREEMENTS
The following summary of the New Investment Advisory Agreements
summarizes the material terms of the New Investment Advisory Agreements and is
qualified in its entirety by
11
reference to the New Investment Advisory Agreements, a form of which is attached
in Appendix B.
DUTIES OF THE INVESTMENT ADVISER. Under the Current Investment Advisory
Agreements and the New Investment Advisory Agreements (each, an "Advisory
Agreement" and collectively, the "Advisory Agreements"), the Investment Adviser
is required to:
o provide the Funds with investment research, advice and supervision
and furnish continuously an investment program for the Funds,
consistent with the respective investment objectives and policies of
each Fund;
o determine, in its discretion and without prior consultation, what
securities shall be purchased for the Funds, what securities shall
be held or sold by the Funds and what portion of the Funds' assets
shall be held uninvested in cash, subject always to the provisions
of each Trust's Declaration of Trust, By-Laws and registration
statement on file with the SEC;
o discharge its responsibilities subject to the control of the
officers and the Board, and in compliance with the objectives,
policies, and limitations set forth in the Funds' prospectus(es) and
applicable laws and regulations;
o vote any proxies for Fund securities;
o provide the Trust, and any other agent designated by the Trust, with
records concerning the Investment Adviser's activities which each
Fund is required to maintain; and
o provide other reports reasonably requested by the Trust's officers
and Board concerning the Investment Adviser's discharge of the
foregoing responsibilities.
INDEMNITY OBLIGATION. Under the Advisory Agreements, the Investment
Adviser shall indemnify and hold harmless the Trust and all affiliated persons
thereof (within the meaning of Section 2(a)(3) of the 1940 Act) and all
controlling persons (as described in Section 15 of the Securities Act of 1933)
against any and all losses, claims, damages, liabilities or litigation
(including reasonable legal and other expenses) by reason of or arising out of:
(a) the Investment Adviser being in material violation of any applicable federal
or state law, rule or regulation or any investment policy or restriction set
forth in the Funds' registration statement or any written guidelines or
instruction provided in writing by the Board; (b) a Fund's failure to satisfy
the diversification or source of income requirements of Subchapter M of the
Internal Revenue Code; or (c) the Investment Adviser's willful misfeasance, bad
faith or gross negligence generally in the performance of its duties or its
reckless disregard of its obligations and duties under the Advisory Agreements.
TERM AND CONTINUANCE. Each Advisory Agreement provides that unless
terminated as provided therein, the Advisory Agreement shall continue for an
initial term of two years. Thereafter, the Advisory Agreement shall continue in
effect for successive annual periods provided such continuance is specifically
approved at least annually (a) by the vote of the
12
Trustees or by a vote of the shareholders; and (b) by the vote of a majority of
the Independent Trustees, cast in person at a meeting called for the purpose of
voting on such approval.
Each Advisory Agreement may be terminated with respect to a Fund at any
time without payment of any penalty, by a Fund upon the vote of either the Board
or by a majority of the outstanding voting securities of the Fund. The
Investment Adviser may also, by not more than sixty (60) days' nor less than
thirty (30) days' written notice, terminate the Advisory Agreements. Each
Advisory Agreement will terminate automatically in the event of its "assignment"
(as that term is defined under the 1940 Act).
BOARD RECOMMENDATION ON PROPOSAL 1
THE TRUSTEES UNANIMOUSLY RECOMMEND THAT
SHAREHOLDERS OF THE FUNDS VOTE "FOR" PROPOSAL 1
13
PROPOSAL 2--THE APPROVAL OF NEW SUB-ADVISORY AGREEMENT
WITH RESPECT TO:
LONG SHORT INTEREST RATE STRATEGY FUND
As discussed above, Proposal 2 relates to the approval by shareholders of
the New AIFS Agreement between the Investment Adviser and AIFS with respect to
Long Short Interest Rate Strategy Fund. You are being asked to vote separately
on Proposal 2 solely if you own the AIFS Fund. A form of the New AIFS Agreement
is attached in Appendix F.
The terms of the New AIFS Agreement are identical to those of the Current
AIFS Agreement, except with respect to the date of execution. Consequently, upon
shareholder approval, AIFS will continue to render substantially the same
services to the AIFS Fund under the New AIFS Agreement that it currently renders
to the AIFS Fund under the Current AIFS Agreement.
The Current AIFS Agreement will remain in place until the completion of
the Transaction, at which time, as a result of the change in the control of the
Investment Adviser, the Current AIFS Agreement will terminate. Thereafter,
subject to shareholder approval, the New AIFS Agreement will go into effect. If
for some reason the Transaction does not occur, the Current AIFS Agreement will
not automatically terminate and will remain in effect, and the New AIFS
Agreement will not be entered into, even if it has been approved by Fund
shareholders.
The effectiveness of Proposal 2 is also contingent on the approval of
Proposal 1 by shareholders of the AIFS Fund.
INFORMATION ABOUT AIFS
American Independence Financial Services, LLC, located at 335 Madison
Avenue, Mezzanine, New York, New York 10017, currently serves as sub-adviser to
Long Short Interest Rate Strategy Fund pursuant to the Current AIFS Agreement.
Information regarding the Current AIFS Agreement, including (a) the date of the
agreement, (b) the date on which it was last approved by shareholders and (c)
the rate of compensation to AIFS, is provided in Appendix G. If the New CLS
Agreement is approved by shareholders, it will continue for an initial term of
two years and for subsequent one-year terms so long as it is renewed annually in
accordance with its terms (see discussion under "Term and Continuance" below).
Information regarding the name(s), address(es) and principal
occupation(s) of the principal executive officer(s) and managing member(s) of
AIFS is set forth in Appendix G. A list of the Trustees and officers of the
Trust who hold positions with AIFS also is set forth in Appendix H. In addition,
set forth in Appendix I is a list of other registered investment companies with
similar investment objectives as the AIFS Fund, for which AIFS acts as
investment manager, adviser or sub-adviser.
14
MATERIAL TERMS OF THE AIFS SUB-ADVISORY AGREEMENT
The following summary of the New AIFS Agreement between the Investment
Adviser and AIFS summarizes its material terms and is qualified in its entirety
by reference to such New AIFS Agreement, a form of which is attached in
Appendix F.
DUTIES OF AIFS. Under the Current AIFS Agreement and the New AIFS
Agreement, each between the Investment Adviser and AIFS (collectively, the "AIFS
Sub-Advisory Agreements"), AIFS, subject to the supervision of the Investment
Adviser and the Board, acts as research provider for and provides certain
investment advice for the management of the assets of the AIFS Fund, all in
accordance with the investment objective and policies of such Fund as reflected
in the current prospectus and statement of additional information as may be
adopted from time to time by the Board. In accordance with applicable
requirements, AIFS will also maintain all books and records relating to the
transactions it executes or that are otherwise required, and render to the Trust
and the Investment Adviser such periodic and special reports at any time upon
reasonable request.
INDEMNITY OBLIGATION. The AIFS Sub-Advisory Agreements provide that AIFS
shall indemnify the Investment Adviser and the Trust, and their respective
officers and trustees, for any liability and expenses, including reasonable
attorneys' fees, which may be sustained as a result of AIFS' willful
misfeasance, bad faith or gross negligence, or the reckless disregard of its
obligations and duties under the AIFS Sub-Advisory Agreements. The AIFS
Sub-Advisory Agreements also provide that the Investment Adviser shall indemnify
AIFS and its officers and members for any liability and expenses, including
reasonable attorneys' fees, which may be sustained as a result of the AIFS'
performance of its obligations hereunder, except where such liability or expense
results from the AIFS' willful misfeasance, bad faith or gross negligence, or
the reckless disregard of the its obligations and duties under the AIFS
Sub-Advisory Agreements.
TERM AND CONTINUANCE. Under their terms, the AIFS Sub-Advisory Agreements
will remain in full force and effect for a period of up to two years from the
date of their execution, and will continue thereafter as long as their
continuance is approved at least annually by the Board or by vote of a majority
of the outstanding shares of the AIFS Fund, as well as by a majority of the
Independent Trustees by vote cast in person at a meeting called for that
purpose. However, the AIFS Sub-Advisory Agreements may be terminated with
respect to the AIFS Fund, at any time without the payment of any penalty upon
30-60 days' written notice, either by the Investment Adviser or the Trust, or
upon 60 days' written notice by AIFS. Additionally, each AIFS Sub-Advisory
Agreement will terminate immediately in the event of its assignment or upon the
termination of the corresponding Investment Advisory Agreement.
BOARD RECOMMENDATION ON PROPOSAL 2
THE TRUSTEES UNANIMOUSLY RECOMMEND THAT SHAREHOLDERS
OF THE AIFS FUNDS VOTE "FOR" PROPOSAL 2
15
PROPOSAL 3--THE APPROVAL OF THE ELECTION OF TRUSTEES FOR ALL
FUNDS
Proposal 3 relates to the election of Trustees for the Board. The Board
proposes the election of the following nominees: Donald C. Cacciapaglia, Corey
A. Colehour, J. Kenneth Dalton, John O. Demaret, Richard M. Goldman, Werner E.
Keller, Thomas F. Lydon, Patrick T. McCarville and Roger Somers. Each nominee
has indicated a willingness to serve if elected. If elected, each nominee will
hold office for the life of a Trust or until retirement, removal, or their
office is terminated pursuant to the Trusts' Declarations of Trust. A Trustee
may be removed either by: (i) the vote or written consent of at least two-thirds
of the Trustees prior to such removal or (ii) the vote or written consent of
Shareholders owning at least than two-thirds of a Trust's outstanding shares.
In connection with the Transaction, the Board believes that expanding the
Board to include Mr. Cacciapaglia, who is a member of senior management of
Guggenheim's investment management business, and who is proposed serve on other
boards in the Rydex|SGI family of funds, would be appropriate. If elected, Mr.
Cacciapaglia would be an Interested Trustee due to the position he holds with
Guggenheim Capital.
The Board believes that it is in shareholders' best interest to have a
Board that is composed entirely of elected trustees. The Board also believes
that good governance practices involve having a majority of its members be
Independent Trustees. If all of the nominees are elected, the Board will consist
of seven trustees who are not considered to be "interested persons" of the Funds
as defined in the 1940 Act and two trustees who are considered to be "interested
persons" of the Funds as defined in the 1940 Act.
The Trusts' Nominating Committee, which is responsible for identifying,
evaluating and nominating individuals to serve as trustees of the Trusts,
recommended that the Board expand in size to nine members, and include a trustee
who is affiliated with the Investment Adviser's parent company, Guggenheim
Capital. The Board considered the long-term ability of the Rydex|SGI family of
funds to operate in an efficient and cohesive manner and determined that
expanding the size of the Board to include a representative of the parent of the
Investment Adviser would benefit the Funds. The Nominating Committee also
considered Mr. Cacciapaglia's skills and background, and noted that his past
and current experience in various aspects of banking and finance would make him
a strong addition to the Board. At a meeting held on September 16, 2011, the
Board approved the Nominating Committee's recommendation that the nine nominees
stand for election.
INFORMATION REGARDING THE NOMINEES
The following table lists the nominees for Trustee, including the current
Trustees, their ages, current position(s) held with the Trusts, length of time
served, principal occupations during the past five years, number of funds
overseen within the fund complex and other directorships/trusteeships held
outside of the fund complex. For the new Trustee nominee, the table shows the
number of funds the nominee will oversee if elected. The fund complex consists
of Rydex ETF Trust, Rydex Variable Trust, Rydex Series Funds, Rydex Dynamic
Funds, Security Equity Fund, Security Income Fund, Security Large Cap Value
Fund, Security Mid Cap
16
Growth Fund and SBL Fund. The mailing address of each nominee is 805 King Farm
Boulevard, Suite 600, Rockville, Maryland 20850.
--------------------------------------------------------------------------------------------------------------------------
NUMBER OF
PORTFOLIOS
IN FUND
POSITION(S) HELD WITH COMPLEX OTHER
THE TRUSTS, TERM OF OVERSEEN DIRECTORSHIPS
NAME, ADDRESS OFFICE AND LENGTH OF PRINCIPAL OCCUPATION(S) BY TRUSTEE HELD BY TRUSTEE
AND AGE OF TRUSTEE TIME SERVED DURING PAST 5 YEARS OR NOMINEES OR NOMINEES
--------------------------------------------------------------------------------------------------------------------------
INTERESTED TRUSTEES OR NOMINEES
--------------------------------------------------------------------------------------------------------------------------
Donald C. Nominee Guggenheim Investments: President and 212 None
Cacciapaglia (60)* Chief Administrative Officer from February
2010 to present
Channel Capital Group Inc.: Chairman and
CEO from April 2002 to February 2010
--------------------------------------------------------------------------------------------------------------------------
Richard M. Goldman Trustee and President Security Benefit Corporation: Senior Vice 212 None
(50)** from 2009 to present President from March 2007 to present
Security Benefit Asset Management
Holdings, LLC: Chief Executive Officer
from October 2010 to present
Rydex Holdings, LLC: Chief Executive
Officer & Manager from January 2009 to
present
Security Investors, LLC: President, CEO &
Member Representative from August 2007
to present
Rydex Distributors, LLC: President, Chief
Executive Officer and Manager from
January 2009 to present
Rydex Fund Services, LLC: Manager from
July 2009 to present
SBL Fund, Security Equity Fund, Security
Income Fund, Security Large Cap Value
Fund and Security Mid Cap Growth Fund:
President from May 2008 to present
First Security Benefit Life and Annuity
Insurance Company of New York: Director
from September 2007 to September 2010
Rydex Advisors, LLC: Director and Chief
Executive Officer from January 2009 to
January 2010
Rydex Advisors II, LLC: Director and Chief
Executive Officer from January 2009 to
January 2010
--------------------------------------------------------------------------------------------------------------------------
17
--------------------------------------------------------------------------------------------------------------------------
NUMBER OF
PORTFOLIOS
IN FUND
POSITION(S) HELD WITH COMPLEX OTHER
THE TRUSTS, TERM OF OVERSEEN DIRECTORSHIPS
NAME, ADDRESS OFFICE AND LENGTH OF PRINCIPAL OCCUPATION(S) BY TRUSTEE HELD BY TRUSTEE
AND AGE OF TRUSTEE TIME SERVED DURING PAST 5 YEARS OR NOMINEES OR NOMINEES
--------------------------------------------------------------------------------------------------------------------------
Security Global Investors, LLC: Manager
and President from May 2007 to January
2010
Security Distributors, Inc.: Director from
March 2007 to 2009
R.M. Goldman Partner, LLC: Managing
Member from February 2006 to February
2007
-------------------------------------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------------------------------------
INDEPENDENT TRUSTEES
-------------------------------------------------------------------------------------------------------------------------
Corey A. Colehour Rydex Series Funds: Retired; President and Senior Vice 179 None
(65) Trustee from 1993 to President of Schield Management Company
present; and Member (registered investment adviser) from 2003
of the Audit and to 2006
Governance and
Nominating
Committees from
1995 to present
Rydex Dynamic
Funds: Trustee and
Member of the Audit,
Governance and
Nominating
Committees from
1999 to present
-------------------------------------------------------------------------------------------------------------------------
J. Kenneth Dalton Rydex Series Funds: Retired 179 Trustee of
(70) Trustee from 1995 to Epiphany Funds
present; Member of since 2009
the Governance and
Nominating
Committees from
1995 to present;
Chairman of the Audit
Committee from 1997
to present; and
Member of the Risk
Oversight Committee
from 2010 to present
Rydex Dynamic
Funds: Trustee and
Member of the
Governance and
Nominating
-------------------------------------------------------------------------------------------------------------------------
18
--------------------------------------------------------------------------------------------------------------------------
NUMBER OF
PORTFOLIOS
IN FUND
POSITION(S) HELD WITH COMPLEX OTHER
THE TRUSTS, TERM OF OVERSEEN DIRECTORSHIPS
NAME, ADDRESS OFFICE AND LENGTH OF PRINCIPAL OCCUPATION(S) BY TRUSTEE HELD BY TRUSTEE
AND AGE OF TRUSTEE TIME SERVED DURING PAST 5 YEARS OR NOMINEES OR NOMINEES
-------------------------------------------------------------------------------------------------------------------------
Committees from
1999 to present;
Chairman of the Audit
Committee from 2006
to present; and
Member of the Risk
Oversight Committee
from 2010 to present
-------------------------------------------------------------------------------------------------------------------------
John O. Demaret (71) Rydex Series Funds: Retired 179 None
Trustee from 1997 to
present; Chairman of
the Board from 2006
to present; Member of
the Audit Committee
from 1997 to present;
and Member of the
Risk Oversight
Committee from 2010
to present
Rydex Dynamic
Funds: Chairman of
the Board from 2006
to present; Trustee and
Member of the Audit
Committee from 1999
to present; and
Member of the Risk
Oversight Committee
from 2010 to present
-------------------------------------------------------------------------------------------------------------------------
Werner E. Keller (71) Rydex Series Funds: Founder and President of Keller Partners, 179 None
Vice Chairman of the LLC (registered investment adviser) from
Board of Trustees 2005 to present; and Retired from 2001 to
from 2010 to present; 2005
Trustee and Member
of the Audit and
Governance and
Nominating
Committees from
2005 to present and
Chairman and
Member of the Risk
Oversight Committee
from 2010 to present
Rydex Dynamic
Funds: Vice Chairman
of the Board of
Trustee from 2010 to
-------------------------------------------------------------------------------------------------------------------------
19
--------------------------------------------------------------------------------------------------------------------------
NUMBER OF
PORTFOLIOS
IN FUND
POSITION(S) HELD WITH COMPLEX OTHER
THE TRUSTS, TERM OF OVERSEEN DIRECTORSHIPS
NAME, ADDRESS OFFICE AND LENGTH OF PRINCIPAL OCCUPATION(S) BY TRUSTEE HELD BY TRUSTEE
AND AGE OF TRUSTEE TIME SERVED DURING PAST 5 YEARS OR NOMINEES OR NOMINEES
-------------------------------------------------------------------------------------------------------------------------
present and Trustee
since 2005; Member
of the Audit,
Governance, and
Nominating
Committees from
2005 to present; and
Chairman and
Member of the Risk
Oversight Committee
from 2010 to present
-------------------------------------------------------------------------------------------------------------------------
Thomas F. Lydon Rydex Series Funds: President of Global Trends Investments 179 Board of
(51) Trustee and Member (registered investment adviser) from 1996 Directors of US
of the Audit, to present Global Investors
Governance and (GROW) since
Nominating April 1995
Committees from
2005 to present
Rydex Dynamic
Funds: Trustee and
Member of the Audit,
Governance, and
Nominating
Committees from
2005 to present
-------------------------------------------------------------------------------------------------------------------------
Patrick T. McCarville Rydex Series Funds: Retired. Chief Executive Officer of Par 179 None
(69) Trustee from 1997 to Industries, Inc., d/b/a Par Leasing from
present; Chairman of 1977 to 2010
the Governance and
Nominating
Committees from
1997 to present; and
Member of the Audit
Committee from 1997
to present
Rydex Dynamic
Funds: Trustee,
Chairman of the
Governance and
Nominating
Committees and
Member of the Audit
Committee from 1999
to present
-------------------------------------------------------------------------------------------------------------------------
Roger Somers (67) Rydex Series Funds: Founder and Chief Executive Officer of 179 None
Trustee from 1993 to Arrow Limousine from 1965 to present
present; and Member
-------------------------------------------------------------------------------------------------------------------------
20
--------------------------------------------------------------------------------------------------------------------------
NUMBER OF
PORTFOLIOS
IN FUND
POSITION(S) HELD WITH COMPLEX OTHER
THE TRUSTS, TERM OF OVERSEEN DIRECTORSHIPS
NAME, ADDRESS OFFICE AND LENGTH OF PRINCIPAL OCCUPATION(S) BY TRUSTEE HELD BY TRUSTEE
AND AGE OF TRUSTEE TIME SERVED DURING PAST 5 YEARS OR NOMINEES OR NOMINEES
-------------------------------------------------------------------------------------------------------------------------
of the Audit and
Governance and
Nominating
Committees from
1995 to present
Rydex Dynamic
Funds: Trustee and
Member of the Audit,
Governance, and
Nominating
Committees from
1999 to present
-------------------------------------------------------------------------------------------------------------------------
* Mr. Cacciapaglia is an "interested" person of the Trust, as that term is
defined in the 1940 Act by virtue of his affiliation with the Investment
Adviser's parent company.
** Mr. Goldman is an "interested" person of the Trust, as that term is defined
in the 1940 Act by virtue of his affiliation with the Funds' Investment
Adviser.
The Chairman of the Board, John O. Demaret, is an Independent Trustee. The
Trusts have determined its leadership structure is appropriate given the
specific characteristics and circumstances of the Trusts. The Trusts made this
determination in consideration of, among other things, the fact that the
Chairman of the Board is an Independent Trustee; the fact that only two of the
proposed nominees are "interested persons" of the Trusts; the fact that the
chairperson of each Committee of the Board is an Independent Trustee; the amount
of assets under management in the Trusts; and the number of Funds (and classes
of shares) overseen by the Board. The Board also believes that its leadership
structure facilitates the orderly and efficient flow of information to the
Independent Trustees from Fund management.
BOARD'S CONSIDERATION OF EACH NOMINEE'S QUALIFICATIONS, EXPERIENCE, ATTRIBUTES
OR SKILLS
The Board has concluded that each of the nominees should serve on the Board
because of his ability to review and understand information about the Trusts and
the Funds provided to him by management; to identify and request other
information he may deem relevant to the performance of his duties; to question
management and other service providers regarding material factors bearing on the
management and administration of the Funds; and to exercise his business
judgment in a manner that serves the best interests of the Funds' shareholders.
The Board has concluded that each of the nominees should serve as a Trustee
based on his experience, qualifications, attributes and skills as described
below.
The Board has concluded that Donald C. Cacciapaglia should serve as Trustee
because of his prior experience working in the investment banking and financial
services industries. He is President and Chief Adminstrative Officer of
Guggenheim's investment management business. Most recently he was chairman and
CEO of Channel Capital Group Inc. and its subsidiary
21
broker-dealer, Channel Capital Group LLC, an affiliate of Guggenheim Capital,
from 2002 through 2010. From 1996 until 2002 when he joined Channel Capital
Group, Mr. Cacciapaglia held the position of Managing Director and Chief
Operating Officer of the Investment Banking Group at PaineWebber. Additionally,
in 1998, he started PaineWebber's Private Equity Group and assumed
responsibility for the coverage of leveraged buyout firms and the Investment
Bank's Business Development Group. Before that, Mr. Cacciapaglia was Chief
Operating Officer of the Short and Intermediate Trading Group at CS First Boston
(1995-1996). From his experience as President and COO of Guggenheim, and from
his prior work experience, Mr. Cacciapaglia has extensive knowledge of the
financial services industry and mutual fund business.
The Board has concluded that Richard M. Goldman should serve as Trustee
because of the experience he has gained as a Trustee of each Trust since 2009
and his experience working in the financial services and mutual fund industries.
Mr. Goldman has gained valuable knowledge and experience from holding multiple
roles with Security Global Investors, LLC and Security Benefit Corporation. Mr.
Goldman also serves as a director for First Security Benefit Life and Annuity
Insurance Company of New York and previously served as a director of Security
Distributors, Inc. Prior to working for Security Benefit, Mr. Goldman was the
President and CEO of ForstmannLeff Associates, an investment management firm.
From his experience as CEO of the Investment Adviser, as a Trustee, and from his
prior work experience, Mr. Goldman has extensive knowledge of the financial
services industry and mutual fund business.
The Board has concluded that Corey A. Colehour should serve as Trustee
because of the experience he has gained as a Trustee of each Trust and his prior
experience working in the financial services industry. Mr. Colehour has served
as a Trustee of Rydex Series Funds since 1993, Rydex Variable Trust since 1998,
Rydex Dynamic Funds since 1999, and Rydex ETF Trust since 2003. Mr. Colehour
also has served as a member of the Audit, Nominating and Governance Committees
of each Trust. In addition to his experience as a Trustee for the Funds and his
extensive institutional knowledge of the fund complex, Mr. Colehour acquired
valuable knowledge about the operations of a registered investment adviser in
his role as President and Senior Vice-President of Schield Management Company,
an SEC registered investment adviser. Mr. Colehour's significant tenure as a
Trustee and his extensive knowledge of the financial services industry qualify
Mr. Colehour to serve as Trustee.
The Board has concluded that J. Kenneth Dalton should serve as Trustee
because of his role as a Trustee of each Trust and his extensive knowledge of
the banking and financial services industry. Mr. Dalton has served as a Trustee
of Rydex Series Funds since 1995, Rydex Variable Trust since 1998, Rydex Dynamic
Funds since 1999, and Rydex ETF Trust since 2003. Mr. Dalton also has served as
a member and Chairman of the Audit Committee of Rydex Series Funds since 1997,
Rydex Variable Trust since 1998, Rydex Dynamic Funds since 2006, and Rydex ETF
Trust since 2003; and as a member of the Nominating, Governance and Risk
Oversight Committees of each Trust since 2005 and as a member of the Risk
Oversight Committee since 2010. The expertise Mr. Dalton developed during his
more than thirty years in the mortgage and banking industries, including
positions as President of CRAM Mortgage Group, Inc. and as the founder of the
Dalton Group, a mortgage banking consulting firm, serves as a valuable resource
for the Board when evaluating certain of the Funds' investments and the
22
conditions of the banking and mortgage industries in general, and complements
the other Trustees' areas of expertise. Mr. Dalton's service as a trustee for
another mutual fund company also provides invaluable experience and perspective
to the Board and has contributed to Mr. Dalton's knowledge of the mutual fund
business.
The Board has concluded that John O. Demaret should serve as Trustee and
Chairman of the Board because of the experience he has gained as a Trustee of
each Trust and his experience as Chairman of the Board since 2006. Mr. Demaret
has served as a Trustee of Rydex Series Funds since 1997, Rydex Variable Trust
since 1998, Rydex Dynamic Funds since 1999, and Rydex ETF Trust since 2003. Mr.
Demaret also has served as a member of the Audit and Risk Oversight Committees
of each Trust. As Chairman of the Board, Mr. Demaret has experience working with
all of the Trustees, Officers and management to effectively lead and communicate
with the Board. In addition to his experience as a Trustee for the Rydex Funds,
Mr. Demaret also was Founder and CEO of Health Costs Controls America and served
as General Counsel of the Chicago Transit Authority, and as a senior partner in
a private legal practice. Based on his prior work experience and his experience
serving as a Trustee and Chairman of the Board, Mr. Demaret has extensive
knowledge of the mutual fund business and financial services industry.
The Board has concluded that Werner E. Keller, CFA should serve as Trustee
because of the experience he has gained as a Trustee of each Trust since 2005
and his prior experience working in the financial services industry. Mr. Keller
also served as a trustee of the Rydex Capital Partners Sphinx Fund from 2003 to
2007. Mr. Keller has served as a member of the Audit, Governance and Nominating
Committees of each Trust. In addition, Mr. Keller has served as the Chairman of
the Risk Oversight Committee of each Trust since 2010. Mr. Keller serves as the
Financial Expert of the Audit Committee. In addition to his experience as a
Trustee for the Funds, Mr. Keller acquired understanding about the operations of
a registered investment adviser during his tenure as Founder and President of
Centurion Capital Management, an SEC-registered investor adviser. He also held
the position of Director of Research for three NYSE member firms and taught
courses in portfolio management and investment analysis at UCLA Extension. In
addition, he has published several academic articles on quantitative investment
topics. Mr. Keller's service as a Trustee for five years, specialized prior work
experience, and knowledge of the financial services industry and mutual fund
business qualify Mr. Keller to serve as a Trustee of the Funds.
The Board has concluded that Thomas F. Lydon should serve as Trustee because
of the experience he has gained as a Trustee of each Trust since 2005 and his
prior work experience in the financial services industry. Mr. Lydon also served
as a trustee of the Rydex Capital Partners Sphinx Fund from 2003 to 2007. Mr.
Lydon has served as a member of the Audit, Governance and Nominating Committees
of each Trust. In addition to his experience as a Trustee for the Funds, Mr.
Lydon is currently President of Global Trends Investments, an SEC registered
investment adviser, where he has served since 1996. Mr. Lydon has also served on
the board of U.S. Global Investors, Inc. (GROW), the investment adviser and
transfer agent to thirteen open-end investment companies, since April 1995, and
is the editor of ETF Trends, a website specializing in daily news and commentary
about the ETF industry. He has also authored two books about ETFs. Based on his
experience as a Trustee for five years, his experience serving on
23
another board, and his related work experience, Mr. Lydon has extensive
knowledge of the mutual fund business and the financial services industry.
The Board has concluded that Patrick T. McCarville should serve as Trustee
because of the experience and institutional knowledge he has gained in his role
as Trustee of each Trust. Mr. McCarville has served as a Trustee of Rydex
Series Funds since 1997, Rydex Variable Trust since 1998, Rydex Dynamic Funds
since 1999, and Rydex ETF Trust since 2003. Mr. McCarville also has served as a
member of the Audit, Governance and Nominating Committees of each Trust. Mr.
McCarville contributes a wealth of business and management experience to the
Board having founded Par Industries, Inc., a well-established equipment leasing
business, and serving as its Chief Executive Officer for more than thirty years.
Mr. McCarville continues to be active in the manufacturing industry and serves
as a Director of Tomco Equipment Co., a manufacturer of cylinders for CO2
distribution. Based on his extensive business experience and experience serving
as a Trustee, Mr. McCarville has extensive knowledge of the financial services
industry.
The Board has concluded that Roger Somers should serve as Trustee because of
the experience and institutional knowledge he has gained in his role as Trustee
of each Trust. Mr. Somers has served as a Trustee of Rydex Series Funds since
1993, Rydex Variable Trust since 1998, Rydex Dynamic Funds since 1999, and Rydex
ETF Trust since 2003. Mr. Somers also has served as a member of the Audit,
Governance and Nominating Committees of each Trust. Mr. Somers has extensive
business experience as the founder and president of a transportation company.
Due to his business experience and experience serving as a Trustee, Mr. Somers
is very knowledgeable about the financial services industry.
If the nominees are elected, Mr. Demaret would remain the Chairman of the
Board.
PRINCIPAL OFFICERS OF THE FUNDS
Officers of the Funds are appointed by the Board and serve at the pleasure
of the Board. The following table shows information about the principal
officers, including their ages, their positions with the Trust and their
principal occupations during the past five years. The mailing address of each
officer is 805 King Farm Boulevard, Suite 600, Rockville, Maryland 20850. Each
officer will hold office until his or her successor has been duly elected or
appointed or until his or her earlier death, resignation or removal.
-----------------------------------------------------------------------------------------------------------------------
NUMBER OF
PORTFOLIOS
POSITION(S) HELD WITH IN FUND
NAME, ADDRESS THE TRUST, TERM OF COMPLEX
AND AGE OF OFFICE AND LENGTH OF PRINCIPAL OCCUPATION(S) OVERSEEN
TRUSTEE/OFFICER TIME SERVED DURING PAST 5 YEARS BY OFFICER
-----------------------------------------------------------------------------------------------------------------------
Richard M. Goldman President from 2009 to Current: Senior Vice President, Security Benefit 212
(50) present Corporation; CEO, Security Benefit Asset Management
Holdings, LLC; CEO, President & Manager
Representative, Security Investors, LLC; CEO & Manager,
Rydex Holdings, LLC; CEO, President, & Manager,
Rydex Distributors, LLC; Manager, Rydex Fund Services,
LLC; and President & Trustee, Rydex Series Funds, Rydex
-----------------------------------------------------------------------------------------------------------------------
24
-----------------------------------------------------------------------------------------------------------------------
NUMBER OF
PORTFOLIOS
POSITION(S) HELD WITH IN FUND
NAME, ADDRESS THE TRUST, TERM OF COMPLEX
AND AGE OF OFFICE AND LENGTH OF PRINCIPAL OCCUPATION(S) OVERSEEN
TRUSTEE/OFFICER TIME SERVED DURING PAST 5 YEARS BY OFFICER
-----------------------------------------------------------------------------------------------------------------------
ETF Trust, Rydex Dynamic Funds and Rydex Variable Trust
Previous: Director, First Security Benefit Life Insurance
Company (2007-2010); President & Director, Security
Global Investors (2010-2011); CEO & Director, Rydex
Advisors, LLC & Rydex Advisor II, LLC (2010); Director,
Security Distributors, Inc. (2007-2009); and Managing
Member, RM Goldman Partners, LLC (2006-2007).
-----------------------------------------------------------------------------------------------------------------------
Michael P. Byrum Rydex Series Funds: Current: President, Security Benefit Asset Management 179
(41) Vice President from Holdings, LLC; Senior Vice President, Security Investors,
1999 to present; LLC; President & Chief Investment Officer, Rydex
Trustee from 2005 to Holdings, LLC; Director & Chairman of the Board,
2009 Advisor Research Center, Inc.; and Manager, Rydex
Specialized Products, LLC.
Rydex Dynamic
Funds: Vice President Previous: Rydex Distributors, LLC (f/k/a Rydex
from 2005 to present; Distributors, Inc.), Vice President (2009); Rydex Fund
Trustee from 2005 to Services, LLC, Director (2009-2010), Secretary (2002-
2009 2010), Executive Vice President (2002-2006); Rydex
Advisors, LLC (f/k/a PADCO Advisors, Inc.), Director
(2008-2010), Chief Investment Officer (2006-2010),
President (2004-2010); Secretary (2002-2010); Rydex
Advisors II, LLC (f/k/a PADCO Advisors II, Inc.),
Director (2008-2010), Chief Investment Officer (2006-
2010), President (2004-2010), Secretary (2002-2010);
Rydex Capital Partners, LLC, (President & Secretary
2003-2007); Rydex Capital Partners II, LLC, (2003-2007);
Rydex Holdings, LLC (f/k/a Rydex Holdings, Inc.),
Secretary 2005-2008), Executive Vice President (2005-
2006); Advisor Research Center, Inc., Secretary (2006-
2009), Executive Vice President (2006); and Rydex
Specialized Products, LLC, Secretary (2005-2008).
-----------------------------------------------------------------------------------------------------------------------
Nick Bonos (47) Rydex Series Funds: Current: Senior Vice President, Security Investors, LLC; 179
Vice President and Chief Executive Officer & Manager, Rydex Specialized
Treasurer from 2003 Products, LLC; Chief Executive Officer & President,
to present. Rydex Fund Services, LLC; Vice President, Rydex
Holdings, LLC; Treasurer, SBL Fund; Security Equity
Rydex Dynamic Fund; Security Income Fund; Security Large Cap Value
Funds: Vice President Fund & Security Mid Cap Growth Fund; and Vice
and Treasurer from President, Security Benefit Asset Management Holdings,
2003 to present LLC.
Previous: Security Global Investors, LLC, Senior Vice
President (2010-2011); Rydex Advisors, LLC (f/k/a
PADCO Advisors, Inc.) Senior Vice President (2006-
2011); Rydex Fund Services, LLC (f/k/a Rydex Fund
Services, Inc.), Director (2009) & Senior Vice President
-----------------------------------------------------------------------------------------------------------------------
25
-----------------------------------------------------------------------------------------------------------------------
NUMBER OF
PORTFOLIOS
POSITION(S) HELD WITH IN FUND
NAME, ADDRESS THE TRUST, TERM OF COMPLEX
AND AGE OF OFFICE AND LENGTH OF PRINCIPAL OCCUPATION(S) OVERSEEN
TRUSTEE/OFFICER TIME SERVED DURING PAST 5 YEARS BY OFFICER
-----------------------------------------------------------------------------------------------------------------------
(2003-2006); and Rydex Specialized Products, LLC, Chief
Financial Officer (2005-2009).
-----------------------------------------------------------------------------------------------------------------------
Joanna M. Haigney Rydex Series Funds: Current: Chief Compliance Officer & Secretary, SBL 179
(44) Chief Compliance Fund; Security Equity Fund; Security Income Fund;
Officer from 2004 to Security Large Cap Value Fund & Security Mid Cap
present; and Secretary Growth Fund; Vice President, Rydex Holdings, LLC; Vice
from 2000 to present. President, Security Benefit Asset Management Holdings,
LLC; and Senior Vice President & Chief Compliance
Rydex Dynamic Officer, Security Investors, LLC
Funds: Chief
Compliance Officer Previous: Security Global Investors, LLC, Senior Vice
from 2004 to present; President (2010-2011); Rydex Advisors, LLC (f/k/a
and Secretary from PADCO Advisors, Inc.) and Rydex Advisors II, LLC (f/k/a
2000 to present PADCO Advisors II, Inc.), Chief Compliance Officer and
Senior Vice President (2010-2011); Rydex Capital Partners
I, LLC & Rydex Capital Partners II, LLC, Chief
Compliance Officer (2006-2007); and Rydex Fund
Services, LLC (f/k/a Rydex Fund Services, Inc.), Vice
President (2001-2006).
-----------------------------------------------------------------------------------------------------------------------
Joseph Arruda (44) Rydex Series Funds: Current: Assistant Treasurer, SBL Fund; Security Equity 179
Assistant Treasurer Fund; Security Income Fund; Security Large Cap Value
from 2006 to present. Fund & Security Mid Cap Growth Fund; Vice President,
Security Investors, LLC; and Chief Financial Officer &
Rydex Dynamic Manager, Rydex Specialized Products, LLC.
Funds: Assistant
Treasurer from 2006 Previous: Security Global Investors, LLC, Vice President
to present (2010-2011); and Rydex Advisors, LLC (f/k/a PADCO
Advisors, Inc.) & Rydex Advisors II, LLC (f/ka/ PADCO
Advisors II, Inc.), Vice President (2004-2011).
-----------------------------------------------------------------------------------------------------------------------
Keith Fletcher (53) Rydex Series Funds: Current: Senior Vice President, Security Investors, LLC; 179
Vice President from Vice President, Rydex Holdings, LLC; Vice President,
2009 to present Rydex Specialized Products, LLC; Vice President, Rydex
Distributors, LLC; Vice President, Rydex Fund Services,
Rydex Dynamic LLC; Vice President and Director, Advisor Research
Funds: Vice President Center, Inc.; and Vice President, SBL Fund; Security
from 2009 to present Equity Fund; Security Income Fund; Security Large Cap
Value Fund & Security Mid Cap Growth Fund.
Previous: Security Global Investors, LLC, Vice President
(2010-2011); Rydex Advisors, LLC (f/k/a/ PADCO
Advisors, Inc.) & Rydex Advisors II, LLC (f/k/a PADCO
Advisors II, Inc.), Vice President (2009-2011); Lyster
Watson and Company, Managing Director (2007-2008);
and Fletcher Financial Group, Inc., Chief Executive
Officer (2004-2007).
-----------------------------------------------------------------------------------------------------------------------
Amy Lee (50) Rydex Series Funds: Current: Senior Vice President & Secretary, Security 179
Vice President and Investors, LLC; Secretary & Chief Compliance Officer,
-----------------------------------------------------------------------------------------------------------------------
26
-----------------------------------------------------------------------------------------------------------------------
NUMBER OF
PORTFOLIOS
POSITION(S) HELD WITH IN FUND
NAME, ADDRESS THE TRUST, TERM OF COMPLEX
AND AGE OF OFFICE AND LENGTH OF PRINCIPAL OCCUPATION(S) OVERSEEN
TRUSTEE/OFFICER TIME SERVED DURING PAST 5 YEARS BY OFFICER
-----------------------------------------------------------------------------------------------------------------------
Assistant Secretary Security Distributors, Inc.; Vice President, Associate
from 2009 to present General Counsel & Assistant Secretary, Security Benefit
Rydex Dynamic Life Insurance Company and Security Benefit Corporation;
Funds: Vice Present Associate General Counsel, First Security Benefit Life
and Assistant Insurance and Annuity of New York; Vice President &
Secretary from 2009 to Secretary, SBL Fund; Security Equity Fund; Security
present Income Fund; Security Large Cap Value Fund & Security
Mid Cap Growth Fund; Vice President & Secretary, Rydex
Holdings, LLC Secretary, Advisor Research Center, Inc.,
Rydex Specialized Products, LLC, Rydex Distributors,
LLC and Rydex Fund Services, LLC; and Assistant
Secretary, Security Benefit Clinic and Hospital
Previous: Security Global Investors, LLC, Senior Vice
President & Secretary (2007-2011); Rydex Advisors, LLC
(f/k/a/ PADCO Advisors, Inc.) & Rydex Advisors II, LLC
(f/k/a PADCO Advisors II, Inc.), Senior Vice President &
Secretary (2010-2011); and Brecek & Young Advisors,
Inc., Director (2004-2008).
-----------------------------------------------------------------------------------------------------------------------
NOMINEE OWNERSHIP OF PORTFOLIO SHARES
The following table shows the dollar amount range of each Nominee's beneficial
ownership of shares of the Funds and all Funds that the nominee would oversee in
the family of funds as of the end of the most recently completed calendar year.
Dollar amount ranges disclosed are established by the SEC.
-----------------------------------------------------------------------------------------------------------------------------
AGGREGATE DOLLAR
RANGE OF SHARES IN ALL
DOLLAR RANGE OF FUNDS OVERSEEN BY
NAME FUND NAME FUND SHARES (1) NOMINEE (1,2)
-----------------------------------------------------------------------------------------------------------------------------
INTERESTED NOMINEES
-----------------------------------------------------------------------------------------------------------------------------
Donald C. Cacciapaglia None None None
-----------------------------------------------------------------------------------------------------------------------------
Richard Goldman None None None
-----------------------------------------------------------------------------------------------------------------------------
INDEPENDENT NOMINEES
-----------------------------------------------------------------------------------------------------------------------------
Corey A. Colehour Rydex Series Funds--Managed Futures Strategy $1 - $10,000 $50,001 - $100,000
Fund
------------------------------------------------------------------------
Rydex Series Funds--Long/Short Commodities $10,001 - $50,000
Strategy Fund
------------------------------------------------------------------------
Rydex Series Funds--U.S. Long Short Momentum $1 - $10,000
Fund
------------------------------------------------------------------------
Rydex Series Funds--All-Asset Moderate Strategy $10,001 - 50,000
Fund
-----------------------------------------------------------------------------------------------------------------------------
J. Kenneth Dalton Rydex Series Funds--U.S. Government Money $10,001 - $50,000 $10,001 - $50,000
Market Fund
-----------------------------------------------------------------------------------------------------------------------------
John O. Demaret Rydex Series Funds--Energy Fund $10,001 - $50,000 Over $100,000
-----------------------------------------------------------------------------------------------------------------------------
27
-----------------------------------------------------------------------------------------------------------------------------
AGGREGATE DOLLAR
RANGE OF SHARES IN ALL
DOLLAR RANGE OF FUNDS OVERSEEN BY
NAME FUND NAME FUND SHARES (1) NOMINEE (1,2)
-----------------------------------------------------------------------------------------------------------------------------
Rydex Series Funds--Financial Services Fund $50,001 - $100,000
------------------------------------------------------------------------
Rydex Series Funds--Utilities Fund $10,001 - $50,000
-----------------------------------------------------------------------------------------------------------------------------
Thomas F. Lydon, Jr. None None None
-----------------------------------------------------------------------------------------------------------------------------
Werner E. Keller Rydex Dynamic Funds--NASDAQ(R) 2x Strategy $1 - $10,000 Over $100,000
Fund
------------------------------------------------------------------------
Rydex Dynamic Funds--Russell 2000(R) 2x $1 - $10,000
Strategy Fund
------------------------------------------------------------------------
Rydex Series Funds--U.S. Government Money Over $100,000
Market Fund
-----------------------------------------------------------------------------------------------------------------------------
Patrick T. McCarville Rydex Series Funds--Nova Fund $10,001 - $50,000 $50,001 - $100,000
-----------------------------------------------------------------------------------------------------------------------------
Rydex Series Funds--U.S. Long Short Momentum $50,001 - $100,000
Fund
------------------------------------------------------------------------
Roger J. Somers Rydex Dynamic Funds--NASDAQ(R) 2x Strategy $50,001 - $100,000 Over $100,000
Fund
------------------------------------------------------------------------
Rydex Dynamic Funds--NASDAQ-100(R) 2x
Strategy Fund $50,001 - $100,000
------------------------------------------------------------------------
Rydex Series Funds--Commodities Strategy Fund $10,001 - $50,000
------------------------------------------------------------------------
Rydex Series Funds--Russell 2000(R) 1.5x Strategy
Fund $50,001 - $100,000
------------------------------------------------------------------------
Rydex Series Funds--Mid-Cap 1.5x Strategy Fund Over $100,000
------------------------------------------------------------------------
Rydex Series Funds--Nova Fund $50,001 - $100,000
------------------------------------------------------------------------
Rydex Series Funds--Energy Fund $50,001 - $100,000
------------------------------------------------------------------------
Rydex Series Funds--Financial Services Fund $50,001 - $100,000
------------------------------------------------------------------------
Rydex Series Funds--Basic Materials Fund $50,001 - $100,000
------------------------------------------------------------------------
Rydex Series Funds--Energy Services Fund Over $100,000
------------------------------------------------------------------------
Rydex Series Funds--S&P MidCap 400 Pure
Growth Fund $10,001 - $50,000
------------------------------------------------------------------------
Rydex Series Funds--U.S. Long Short Momentum
Fund $10,001 - $50,000
-----------------------------------------------------------------------------------------------------------------------------
1 Information provided is as of December 31, 2010.
2 Includes the Trust, Rydex Series Funds, Rydex Variable Trust, Rydex Dynamic
Funds, Security Equity Fund, Security Large Cap Value Fund, Security Mid Cap
Growth Fund, Security Income Fund and SBL Fund, as applicable.
None of the nominees who would be Independent Trustees or their immediate
family members had any interest in the Investment Adviser or Distributor, or any
person controlling, controlled by or under common control with such persons. For
this purpose, "immediate family member" includes the Nominee's spouse, children
residing the in the Nominee's household and dependents of the Nominee.
As of October 3, 2011, the Trustees and officers as a group owned less than
1% of the outstanding shares of each Fund, except as listed in Appendix L.
28
BOARD COMPENSATION
The following table sets forth compensation paid by Rydex Dynamic Funds for
the fiscal year ended December 31, 2010.
---------------------------------------------------------------------------------------------------------
PENSION OR
RETIREMENT ESTIMATED TOTAL
AGGREGATE BENEFITS ACCRUED ANNUAL COMPENSATION
COMPENSATION AS PART OF TRUST'S BENEFITS UPON FROM FUND
NAME OF TRUSTEE FROM FUNDS EXPENSES RETIREMENT COMPLEX *
---------------------------------------------------------------------------------------------------------
INTERESTED TRUSTEE
---------------------------------------------------------------------------------------------------------
Richard Goldman** $0 $0 $0 $0
---------------------------------------------------------------------------------------------------------
INDEPENDENT TRUSTEES
---------------------------------------------------------------------------------------------------------
Corey A. Colehour $9,900 $0 $0 $162,000
---------------------------------------------------------------------------------------------------------
J. Kenneth Dalton $10,600 $0 $0 $174,000
---------------------------------------------------------------------------------------------------------
John O. Demaret $12,300 $0 $0 $202,000
---------------------------------------------------------------------------------------------------------
Werner E. Keller $9,900 $0 $0 $163,500
---------------------------------------------------------------------------------------------------------
Thomas F. Lydon $9,800 $0 $0 $161,000
---------------------------------------------------------------------------------------------------------
Patrick T. McCarville $10,200 $0 $0 $168,000
---------------------------------------------------------------------------------------------------------
Roger J. Somers $9,900 $0 $0 $162,000
---------------------------------------------------------------------------------------------------------
* Represents total compensation for service as Trustee of Rydex ETF
Trust, Rydex Series Funds, Rydex Variable Trust and Rydex Dynamic Funds.
** Mr. Goldman is an Interested Trustee, as that term is defined in the 1940
Act by virtue of his affiliation with the Advisor. He does not receive
compensation from the Funds.
With respect to Long/Short Commodities Strategy Fund, Managed Futures
Strategy Fund, Multi-Hedge Strategies Fund and Commodities Strategy Fund, the
following table sets forth compensation paid by Rydex Series Funds for the
fiscal year ended December 31, 2010.
---------------------------------------------------------------------------------------------------------
PENSION OR
RETIREMENT ESTIMATED TOTAL
AGGREGATE BENEFITS ACCRUED ANNUAL COMPENSATION
COMPENSATION AS PART OF TRUST'S BENEFITS UPON FROM FUND
NAME OF TRUSTEE FROM FUNDS EXPENSES RETIREMENT COMPLEX *
---------------------------------------------------------------------------------------------------------
INTERESTED TRUSTEES
---------------------------------------------------------------------------------------------------------
Richard Goldman** $0 $0 $0 $0
---------------------------------------------------------------------------------------------------------
INDEPENDENT TRUSTEES
---------------------------------------------------------------------------------------------------------
Corey A. Colehour $6,153 $0 $0 $162,000
---------------------------------------------------------------------------------------------------------
J. Kenneth Dalton $6,633 $0 $0 $174,000
---------------------------------------------------------------------------------------------------------
John O. Demaret $7,680 $0 $0 $202,000
---------------------------------------------------------------------------------------------------------
Werner E. Keller $6,220 $0 $0 $163,500
---------------------------------------------------------------------------------------------------------
Thomas F. Lydon $6,113 $0 $0 $161,000
---------------------------------------------------------------------------------------------------------
Patrick T. McCarville $6,407 $0 $0 $168,000
---------------------------------------------------------------------------------------------------------
Roger J. Somers $6,153 $0 $0 $162,000
---------------------------------------------------------------------------------------------------------
* Represents total compensation for service as Trustee of Rydex Series Funds,
Rydex ETF Trust, Rydex Dynamic Funds, and Rydex Variable Trust.
** Mr. Goldman is an Interested Trustee, as that term is defined in the 1940
Act by virtue of his affiliation with the Advisor. He does not receive
compensation from the Funds.
29
With respect to all other series of Rydex Series Funds, the following table
sets forth compensation paid by Rydex Series Funds for the fiscal year ended
March 31, 2011.
---------------------------------------------------------------------------------------------------------
PENSION OR
RETIREMENT ESTIMATED TOTAL
AGGREGATE BENEFITS ACCRUED ANNUAL COMPENSATION
COMPENSATION AS PART OF TRUST'S BENEFITS UPON FROM FUND
NAME OF TRUSTEE FROM FUNDS EXPENSES RETIREMENT COMPLEX *
---------------------------------------------------------------------------------------------------------
INTERESTED TRUSTEES
---------------------------------------------------------------------------------------------------------
Richard Goldman** $0 $0 $0 $0
---------------------------------------------------------------------------------------------------------
INDEPENDENT TRUSTEES
---------------------------------------------------------------------------------------------------------
Corey A. Colehour $76,438 $0 $0 $147,000
---------------------------------------------------------------------------------------------------------
J. Kenneth Dalton $82,862 $159,000
---------------------------------------------------------------------------------------------------------
John O. Demaret $97,200 $0 $0 $187,000
---------------------------------------------------------------------------------------------------------
Werner E. Keller $78,114 $0 $0 $150,000
---------------------------------------------------------------------------------------------------------
Thomas F. Lydon $76,438 $0 $0 $147,000
---------------------------------------------------------------------------------------------------------
Patrick T. McCarville $79,790 $0 $0 $153,000
---------------------------------------------------------------------------------------------------------
Roger J. Somers $76,438 $0 $0 $147,000
---------------------------------------------------------------------------------------------------------
* Represents total compensation for service as Trustee of Rydex Series Funds,
Rydex ETF Trust, Rydex Dynamic Funds, and Rydex Variable Trust.
** Mr. Goldman is an Interested Trustee, as that term is defined in the 1940
Act by virtue of his affiliation with the Advisor. He does not receive
compensation from the Funds.
COMMITTEES AND MEETINGS OF THE BOARD
The Board has overall responsibility to manage and control the business
affairs of the Trust, including the complete and exclusive authority to oversee
and to establish policies regarding the management, conduct and operation of the
Trusts' business. The Board held 4 regular meetings, and 2 special meetings,
during the Trusts' most recent fiscal year. Each Trustee then in office attended
at least 75% of the aggregate of the total number of meetings of the Board and
the total number of meetings held by all committees of the Board on which the
Trustee served. The Trusts currently do not have a policy with respect to
Trustees' attendance at shareholder meetings. Shareholders wishing to
communicate with the Board or individual directors should send such
correspondence to the Board at the Trust's offices. Shareholder communications
will be sent directly to the applicable Board member(s). The Board has
established the following standing committees:
AUDIT COMMITTEE. The Board has a standing Audit Committee that is composed
of each of the non-interested trustees of the Trusts. The Audit Committee
operates pursuant to a written charter approved by the Board. The principal
responsibilities of the Audit Committee include: recommending which firm to
engage as the Trusts' independent registered public accounting firm and whether
to terminate this relationship; reviewing the independent registered public
accounting firm's compensation, the proposed scope and terms of its engagement,
and the firm's independence; serving as a channel of communication between the
independent registered public accounting firm and the Board; reviewing the
results of each external audit, including any qualifications in the independent
registered public accounting firm's opinion, any related
30
management letter, management's responses to recommendations made by the
independent registered public accounting firm in connection with the audit, if
any, reports submitted to the Committee by the Trusts' service providers that
are material to the Trusts as a whole, and management's responses to any such
reports; reviewing the Trusts' audited financial statements and considering any
significant disputes between the Trusts' management and the independent
registered public accounting firm that arose in connection with the preparation
of those financial statements; considering, in consultation with the independent
registered public accounting firm and the Trusts' senior internal accounting
executive, the independent registered public accounting firm's report on the
adequacy of the Trusts' internal financial controls; reviewing, in consultation
with the Trusts' independent registered public accounting firm, major changes
regarding auditing and accounting principles and practices to be followed when
auditing the Trusts' financial statements; and other audit related matters.
Messrs. Colehour, Dalton, Demaret, Keller, Lydon, McCarville and Somers serve as
members of the Audit Committee. The Audit Committee met four times in the most
recently completed fiscal year.
GOVERNANCE COMMITTEE. The Board has a standing Governance Committee that
operates under a written charter approved by the Board. The role of the
Governance Committee is to assist the Board in assuring the effective governance
of the Trusts, including: (i) monitoring and making recommendations regarding
committees of the Board, including the responsibilities of those committees as
reflected in written committee charters, and committee assignments; (ii) making
recommendations regarding the term limits and retirement policies applicable to
the Independent Trustees of the Trusts; (iii) considering and making
recommendations to the Board concerning the compensation of the Independent
Trustees, the Independent Chairman of the Board, including any special
compensation for serving as chairman of a member of a committee of the Board,
and expense reimbursement policies applicable to the Independent Trustees; (iv)
periodically reviewing and making recommendations regarding the size and
composition of the Board, including recommendations to the Board concerning the
need to increase or decrease the size of the Board or to add individuals with
special knowledge, skill sets or backgrounds to the Board; (v) overseeing the
orientation and education processes for new Independent Trustees and continuing
education of incumbent Independent Trustees; (vi) monitoring the independence
and performance of legal counsel to the Independent Trustees and making
recommendations to the Independent Trustees regarding the selection of
independent counsel to the Independent Trustees; (vii) overseeing the process
regarding the Board's periodic self-assessments and making recommendations to
the Board concerning that process; and (viii) making recommendations to the
Board concerning all other matters pertaining to the functioning of the Board
and committees of the Board and pertaining generally to the governance of the
Trusts. Messrs. Keller, Lydon, and McCarville serve as members of the
Governance Committee. For the most recently completed fiscal year, the
Governance Committee met once.
NOMINATING COMMITTEE. The Board has a separate standing Nominating Committee
that operates under a written charter approved by the Board, attached hereto as
Appendix M. The role of the Nominating Committee is to identify, evaluate and
nominate individuals to serve as trustees of the Trusts including, shareholder
recommendations for nominations to fill vacancies on the Board. The Nominating
Committee does not currently have specific procedures in place to consider
nominees recommended by shareholders, but would consider such nominees if
submitted in accordance with Rule 14a-8 of the Securities Exchange Act of 1934
in conjunction
31
with a shareholder meeting to consider the election of Board members. Messrs.
Keller, Lydon, and McCarville serve as members of the Nominating Committee. For
the most recently completed fiscal year, the Nominating Committee met once.
Additional information regarding the Nominating Committee may be found in the
charter of the Nominating Committee.
RISK OVERSIGHT COMMITTEE. The Board has a separate standing Risk Oversight
Committee that operates under a written charter approved by the Board. The role
of the Risk Oversight Committee is to assist the Board in fulfilling its
responsibility to oversee risk management activities applicable to the Funds,
including systems failure, disaster recovery, business continuity and other
operational risks; counterparty credit, liquidity, valuation, leverage and other
market and investment risks; and legal and compliance risks. Messrs. Demaret,
Keller, and Dalton, serve as members of the Risk Oversight Committee. For the
most recently completed fiscal year, the Risk Oversight Committee met three
times.
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
The firm of Ernst & Young LLP ("Ernst & Young") has been selected as
independent auditors of the Trusts for the current fiscal year. Ernst & Young
has confirmed to the Audit Committee that they are independent auditors with
respect to the Trusts. Representatives of Ernst & Young are not expected to be
present at the Meeting, but will have the opportunity to make a statement if
they wish, and will be available should any matter arise requiring their
presence.
Certain information concerning the fees and services provided by Ernst &
Young to the Trusts and to the Investment Adviser and its affiliates for the two
most recently completed fiscal years of the Trusts is provided below. The Audit
Committee is responsible for the engagement, compensation, and oversight of
Ernst & Young. The Audit Committee is required to pre-approve all audit and
permitted non-audit services performed by Ernst & Young for the Funds in
accordance with the Audit Committee Charter and the 1940 Act and makes a
determination with respect to Ernst & Young's independence each year. For the
two most recent fiscal years for each if the Funds, none of the services
provided to the Trusts or described under "Audit-Related Fees," "Tax Fees," and
"All Other Fees" were approved by the Audit Committee pursuant to the de minimis
exception to the pre-approval requirements.
The following table sets forth the aggregate fees billed by Ernst & Young
for professional services rendered to the Trusts during the two most recent
fiscal years.
----------------------------------------------------------------------------------------
RYDEX DYNAMIC RYDEX SERIES RYDEX SERIES
FUNDS FUNDS-- FUNDS--ALL OTHER
LONG/SHORT FUNDS
COMMODITIES
STRATEGY, MANAGED
FUTURES STRATEGY,
MULTI-HEDGE
STRATEGIES AND
COMMODITIES
STRATEGY FUNDS
----------------------------------------------------------------------------------------
AUDIT FEES 12/31/10: $146,000 12/31/10: $71,123 3/31/11: $960,156
12/31/09: $150,000 12/31/09: $80,155 3/31/11: $935,845
----------------------------------------------------------------------------------------
32
----------------------------------------------------------------------------------------
AUDIT-RELATED FEES 12/31/10: $2,961 12/31/10: $1,480 3/31/11: $20,899
12/31/09: $5,000 12/31/09: $2,500 3/31/11: $31,875
----------------------------------------------------------------------------------------
TAX FEES 12/31/10: $0 12/31/10: $0 3/31/11: $0
12/31/09: $0 12/31/09: $0 3/31/11: $0
----------------------------------------------------------------------------------------
ALL OTHER FEES 12/31/10: $0 12/31/10: $0 3/31/11: $0
12/31/09: $0 12/31/09: $0 3/31/11: $0
----------------------------------------------------------------------------------------
AGGREGATE NON- 12/31/10: $0 12/31/10: $3,241 3/31/11: $43,759
Audit Fees 12/31/09: $0 12/31/09: $5,172 3/31/11: $69,828
----------------------------------------------------------------------------------------
AUDIT FEES. The aggregate fees billed by Ernst & Young for audit of the
annual financial statements in connection with statutory and regulatory filings.
AUDIT-RELATED FEES. The aggregate fees billed by Ernst & Young for assurance
and related services reasonably related to the performance of the annual audit
or review of the Trust's financial statements (and not reported above).
TAX FEES. The aggregate tax fees billed by Ernst & Young for professional
services rendered for tax compliance, tax advice, and tax planning, including
preparation of tax returns and distribution assistance.
ALL OTHER FEES. The aggregate fees billed by Ernst & Young for products and
services provided by Ernst & Young to the Funds, other than the services
reported above.
AGGREGATE NON-AUDIT FEES. The aggregate non-audit fees were for tax fees
billed by Ernst & Young for professional services rendered for tax compliance,
tax advice, and tax planning, including preparation of tax returns and
distribution assistance. All non-audit services rendered were pre-approved by
the Audit Committee. As such, the Audit Committee has considered these services
in maintaining Ernst & Young's independence.
BOARD RECOMMENDATION ON PROPOSAL 3
THE TRUSTEES UNANIMOUSLY RECOMMEND THAT
SHAREHOLDERS OF THE FUNDS VOTE "FOR" THE
ELECTION OF EACH NOMINEE
33
PROPOSAL 4--THE APPROVAL OF A "MANAGER OF MANAGERS"
ARRANGEMENT WITH RESPECT TO ALL FUNDS
The Board has approved a "manager of managers" arrangement for the Funds and
voted to recommend its approval to the Fund's shareholders. The 1940 Act
generally requires that a written sub-advisory agreement be approved by the
affirmative vote of a majority of the outstanding shares of a fund. The
appointment of a new sub-adviser or material modification of an existing
sub-advisory agreement must also be presented for approval by a fund's
shareholders under the 1940 Act. The SEC has previously issued an order
permitting the Investment Adviser, for a fund for which it serves as investment
adviser, to enter into a new sub-advisory agreement or materially amend an
existing sub-advisory agreement with an unaffiliated sub-adviser, subject to
approval by the Board (including a majority of the Independent Trustees), but
without obtaining shareholder approval (the "Manager of Managers Order").
Each Fund may rely upon the Manager of Managers Order only if, among other
things, the Fund's shareholders have approved the arrangement. Shareholders of
each Fund are therefore being asked to approve the manager of managers
arrangement to permit the Investment Adviser, subject to prior approval by the
Board, to retain sub-advisers or amend the terms of an existing sub-advisory
agreement without approval by shareholders. The manager of managers arrangement
has previously been implemented by other funds managed by the Investment
Adviser.
"MANAGER OF MANAGERS" ARRANGEMENT
On January 12, 2000, the SEC issued the Manager of Managers Order permitting
the Investment Adviser, with the approval of the Board, to enter into or
materially modify sub- advisory agreements with unaffiliated sub-advisers
without requiring shareholder approval. The Investment Adviser anticipates that
this relief would benefit shareholders to the extent that it will give the
Investment Adviser additional flexibility to implement sub-adviser changes or
materially modify sub-advisory agreements with unaffiliated sub-advisers when
needed, and to avoid expensive proxy solicitations. The Fund would obtain
shareholder approval of a sub-advisory agreement (or a material amendment
thereto) with a sub-adviser considered to be an "affiliated person," as defined
in the 1940 Act, of the Fund or the Investment Adviser, other than by reason of
serving as a sub-adviser to the Fund.
The Investment Adviser believes that the Manager of Managers Order would
enable the Funds to operate with greater efficiency by allowing the Investment
Adviser to employ sub-advisers best suited to the needs of a Fund, without
incurring the expense and delays associated with obtaining shareholder approval
of sub-advisers or material amendments to sub-advisory agreements with
sub-advisers that are not affiliated with the Investment Adviser.
The Investment Adviser provides management services to the Funds, including
overall supervisory responsibility for the general management and investment of
each Fund. If the proposal is approved, the Investment Adviser, subject to the
review and approval by the Board, would, in connection with the appointment of
an investment sub-adviser for a Fund: (a) set the Fund's overall investment
strategies; (b) evaluate, select and recommend sub-advisers to manage all or a
part of the Fund's assets; (c) when appropriate, allocate and reallocate a
Fund's assets
34
among multiple sub-adviser(s); (d) monitor and evaluate the investment
performance of the Fund's sub-adviser(s); and (e) implement procedures
reasonably designed to ensure that the Fund's sub-adviser(s) comply with the
relevant Fund's investment objectives, policies, and restrictions.
CONDITIONS OF THE EXEMPTIVE RELIEF
Under the terms of the Manager of Managers Order, the Investment Adviser and
the Funds are, and would continue to be, subject to several conditions imposed
by the SEC. In addition, the Board and the Investment Adviser would not be able
to enter into or materially amend a sub-advisory agreement with an affiliated
sub-adviser without complying with the 1940 Act and applicable regulations
governing shareholder approval of advisory agreements.
In order to rely on the Manager of Managers Order, a majority of the Board
must consist of Independent Trustees, and the nomination of new or additional
Independent Trustees must be at the discretion of the then existing Independent
Trustees. In addition, within 90 days of the appointment of any new sub-adviser,
the Investment Adviser is required to provide the Fund's shareholders with all
information about the new sub-adviser that would be included in a proxy
statement, including any changes caused by the addition of the new sub-adviser.
A Fund relying on the Manager of Managers Order must disclose in its prospectus
the existence, substance and effect of the Manager of Managers Order and must
prominently disclose that the Investment Adviser has ultimate responsibility to
oversee the sub-advisers and recommend their hiring, termination and
replacement.
If shareholders of a Fund do not approve the manager of managers
arrangement, it will not be implemented and that Fund will continue to be
required to obtain shareholder approval of the retention of a sub-adviser of the
Fund or any material changes to a sub-advisory agreement.
BOARD CONSIDERATIONS IN APPROVING THE "MANAGER OF MANAGERS" ARRANGEMENT
In determining whether to approve a "manager of managers" arrangement for
the Funds and to recommend approval of such arrangements to shareholders, the
Board, including the Independent Trustees, considered certain information and
representations provided by the Investment Adviser.
The Board noted that it would continue to review and approve each
sub-adviser selected by the Investment Adviser under the manager of managers
arrangement, and would evaluate and consider for approval all new or amended
sub-advisory agreements. The Board also considered that shareholder approval of
Proposal 4 would not result in changes to the investment advisory fees paid by a
Fund to the Investment Adviser. The Board also noted that fees paid to a sub-
adviser would be negotiated between the Investment Adviser and the sub-adviser,
subject to Board approval, and that any increase in the investment advisory fee
paid to the Investment Adviser by the Fund pursuant to the investment advisory
agreement would continue to require shareholder approval.
The Board concluded that it is appropriate and in the interests of the
Fund's shareholders to provide the Investment Adviser and the Board with maximum
flexibility to enter into or
35
materially modify sub-advisory agreements without incurring the unnecessary
delay or expense of obtaining shareholder approval. This process will allow the
Funds to operate more efficiently.
BOARD RECOMMENDATION ON PROPOSAL 4
THE TRUSTEES UNANIMOUSLY RECOMMEND THAT
SHAREHOLDERS OF THE FUNDS VOTE "FOR" PROPOSAL 4
36
PROPOSAL 5--THE APPROVAL OF THE ELIMINATION OF THE FUNDAMENTAL
INVESTMENT POLICY ON INVESTING IN OTHER INVESTMENT COMPANIES
WITH RESPECT TO THE MONEY MARKET FUND
Proposal 5 relates to the elimination of the fundamental investment policy
on investing in other investment companies for the Money Market Fund. The 1940
Act requires that each fund adopt "fundamental" investment policies with respect
to several types of activities. However, the 1940 Act does not require that a
fund adopt a fundamental investment policy on investing in other investment
companies. Therefore, the Money Market Fund's current fundamental investment
policies on investing in other investment companies is unnecessary.
PROPOSED FUNDAMENTAL INVESTMENT POLICY
It is proposed that the Money Market Fund's fundamental investment restriction
on investing in other investment companies be eliminated in its entirety.
CURRENT FUNDAMENTAL INVESTMENT POLICY
The current fundamental investment policy on investing in other investment
companies for the Money Market Fund reads:
The Money Market Fund shall not:
Invest in securities of other investment companies, except as these
securities may be acquired as part of a merger, consolidation, acquisition
of assets, or plan of reorganization.
DISCUSSION OF PROPOSED MODIFICATION
The Investment Adviser believes that under certain market conditions, it may
be beneficial for the Money Market Fund to invest in other money market funds (a
type of investment company investment permitted under Securities and Exchange
Commission ("SEC") Rule 2a-7, the SEC rule that strictly regulates money market
funds and their investments). These investments could permit specific investment
opportunities or expertise, which could help improve the Money Market Fund's
yield and performance.
As a shareholder of another investment company, the Money Market Fund would
bear, along with other shareholders, its pro rata portion of the other
investment company's expenses, including advisory fees. These expenses would be
in addition to the advisory and other expenses that the Money Market Fund bears
directly in connection with its own operations. Notwithstanding this greater
freedom to invest in other investment companies, the Money Market Fund would
continue to comply with other provisions of the 1940 Act relating to investments
in other investment companies. In addition, the Money Market Fund would be
subject to the risks of investing in the underlying money market funds.
However, the Money Market Fund as well as the underlying money market funds
would be subject to SEC Rule 2a-7 and would invest in compliance with the strict
requirements included in the rule. These requirements include stringent
portfolio quality, maturity and
37
liquidity requirements and other risk-limiting conditions intended to enhance
(but not guarantee) a money market fund's ability to maintain a stable $1.00
price per share. Among other things, Rule 2a-7 limits portfolio holdings to
short-term securities (i) that are denominated in U.S. dollars, (ii) that pose
minimal credit risk to a fund and meet stringent credit quality requirements,
and (iii) that are "Eligible Securities" as defined in Rule 2a-7 under the 1940
Act. The Money Market Fund will continue to seek to maintain a stable $1.00
price per share, as permitted by current Rule 2a-7.
Should the Money Market Fund's shareholders not approve the proposal to
eliminate the Money Market Fund's fundamental investment policy on investing in
other investment companies, the Money Market Fund's current fundamental
investment policy on investing in other investment companies would continue to
apply unchanged and the Board would decide whether to consider other changes to
the Money Market Fund's investment program.
BOARD RECOMMENDATION ON PROPOSAL 5
THE TRUSTEES UNANIMOUSLY RECOMMEND THAT SHAREHOLDERS
OF EACH MONEY MARKET FUND VOTE "FOR" PROPOSAL 5
38
OTHER BUSINESS
The Trustees do not know of any matters to be presented at the Meeting other
than those set forth in this Joint Proxy Statement. If other business should
properly come before the Meeting, proxies will be voted in accordance with the
judgment of the persons named in the accompanying proxy.
ADDITIONAL INFORMATION
ADMINISTRATOR, PRINCIPAL UNDERWRITER AND TRANSFER AGENT
The principal underwriter/distributor of the Trusts is Rydex Distributors,
LLC, located at 805 King Farm Boulevard, Suite 600, Rockville, Maryland 20850,
an affiliate of the Investment Adviser because it is commonly held with the
Investment Adviser (and will remain under common control after the Transaction).
Rydex Fund Services, LLC (the "Administrator"), also an affiliate of the
Investment Adviser, is located at 805 King Farm Boulevard, Suite 600, Rockville,
Maryland 20850 and provides general administrative, shareholder, dividend
disbursement, transfer agent and registrar services to the Funds. Information
regarding the fees paid by each Fund to the Distributor and the Administrator
during the previous fiscal year is provided in Appendix C.
The Transaction would affect the control of the Distributor and the
Administrator because they are commonly held with the Investment Adviser.
However, shareholder approval is not required in order for the Distributor and
the Administrator to continue providing services to the Funds after the closing
of the Transaction. The Board has been assured that there will be no material
change in the nature or quality of the services provided by the Distributor and
the Administrator to each Fund due to the change in control.
AFFILIATIONS AND AFFILIATED BROKERAGE
During the Funds' most recent fiscal year, the Funds paid no commissions on
portfolio brokerage transactions to brokers who may be deemed to be affiliated
persons of the Funds, the Investment Adviser, or affiliated persons of such
persons ("Affiliated Brokers").
OTHER INFORMATION
Proxy materials, reports and other information filed by the Funds can be
inspected and copied at the Public Reference Facilities maintained by the SEC at
100 F Street, NE, Washington, DC 20549. The SEC maintains an Internet web site
(at http://www.sec.gov), which contains other information about the Funds.
VOTING INFORMATION
PROXY SOLICITATION. The principal solicitation of proxies will be by the
mailing of this Joint Proxy Statement on or about October 13, 2011, but proxies
may also be solicited by telephone and/or in person by representatives of the
Trusts, regular employees of the Investment Adviser or its affiliate(s), or The
Altman Group, a private proxy services firm. If we have not received your vote
as the date of the Meeting approaches, you may receive a telephone call from
39
these parties to ask for your vote. Arrangements will be made with brokerage
houses and other custodians, nominees, and fiduciaries to forward proxies and
proxy materials to their principals.
COST OF THE MEETING. The cost of the Meeting, including the costs of
retaining The Altman Group, preparing and mailing of the notice, proxy statement
and proxy, and the solicitation of proxies, including reimbursement to
broker-dealers and others who forwarded proxy materials to their clients, will
be borne by Guggenheim Capital or its affiliates, and not the Funds. The
estimated cost of retaining The Altman Group is approximately $963,183.
SHAREHOLDER VOTING. Shareholders of the Funds who own shares at the close of
business on October 3, 2011 will be entitled to notice of, and to vote at, the
Meeting. Each whole share is entitled to one vote, and each fractional share is
entitled to a proportionate fractional vote on each matter as to which such
shares are to be voted at the Meeting. One-third (331/3%) of a Trust's shares
entitled to vote on a Proposal constitutes a quorum.
In addition, abstentions and broker non-votes will not be counted for or
against the Proposals, but will be counted for purposes of determining whether a
quorum is present. "Broker non-votes" are shares held by a broker or nominee as
to which instructions have not been received from the beneficial owners or
persons entitled to vote, and the broker or nominee does not have discretionary
voting power. Because the affirmative vote of a majority of the outstanding
voting securities of each Fund, as defined below, is required to approve each
Proposal (other than Proposal 3), abstentions and broker non-votes will
effectively be a vote against those Proposals. Abstentions and broker non-votes
will have no effect on Proposal 5, for which the required vote is a plurality of
a Trust's shares voting.
If a quorum is not present at the Meeting, or if a quorum is present at the
Meeting but sufficient votes to approve the Proposals are not received, or if
other matters arise requiring shareholder attention, the persons named as proxy
agents may propose one or more adjournments of the Meeting to permit further
solicitation of proxies. Any such adjournment will require the affirmative vote
of a majority of those shares present at the Meeting or represented by proxy.
The persons named as proxies will vote those proxies that they are entitled to
vote "FOR" a Proposal in favor of such an adjournment, and will vote those
proxies required to be voted "AGAINST" a Proposal, against such an adjournment.
Information regarding the number of issued and outstanding shares of each
Fund as of the Record Date is provided in Appendix J, representing the same
number of votes for each of such Funds. The persons who are known to have owned
beneficially 5% or more of each Fund's outstanding shares as of the Record Date
are listed in Appendix K.
The person(s) named as proxies on the enclosed proxy card will vote in
accordance with your directions, if your proxy is received properly executed. If
we receive your proxy, and it is executed properly, but you give no voting
instructions with respect to any proposal, your shares will be voted "FOR" the
Proposal. The duly appointed proxies may, in their discretion, vote upon such
other matters as may properly come before the Meeting.
In order that your shares may be represented at the Meeting, you are
requested to vote your shares by mail, Internet or telephone by following the
enclosed instructions. IF YOU
40
VOTE BY TELEPHONE OR INTERNET, PLEASE DO NOT RETURN YOUR PROXY CARD, UNLESS YOU
LATER ELECT TO CHANGE YOUR VOTE. You may revoke your proxy: (a) at any time
prior to its exercise by written notice of its revocation to the secretary of
the Trust prior to the Meeting; (b) by the subsequent execution and timely
return of another proxy prior to the Meeting (following the methods noted
above); or (c) by being present and voting in person at the Meeting and giving
oral notice of revocation to the chair of the Meeting. However, attendance
in-person at the Meeting, by itself, will not revoke a previously-tendered
proxy.
REQUIRED VOTE. Approval of each Proposal (other than Proposal 3) requires
the vote of a "majority of the outstanding voting securities" of a Fund, which
means the vote of 67% or more of the shares that are present at the Meeting,
provided that the holders of more than 50% of the outstanding shares are present
or represented by proxy, or the vote of more than 50% of the Fund's outstanding
shares, whichever is less. With respect to Proposal 3, a plurality of a Trust's
shares voting is required to elect a Trustee with respect to that Trust.
The Current Agreements will remain in place until the completion of the
Transaction, at which time, the Current Agreements will terminate and, subject
to shareholder approval, the New Agreements will go into effect. As a result, if
for some reason the Transaction does not occur, the Current Agreements will not
automatically terminate and will remain in effect, and the New Agreements will
not be entered into, even if they have been approved by Fund shareholders.
If Proposals 1 and 2 are not approved by shareholders of any Fund, the Board
will evaluate other short- and long-term options, as previously discussed. If
the nominees are not elected, the current Trustees will continue their current
terms. New Trustees could be appointed in compliance with applicable law. With
respect to Proposal 4, should shareholders of a Fund not approve the manager of
managers arrangement, it will not be implemented and that Fund will continue to
be required to obtain shareholder approval of the retention of an unaffiliated
sub-adviser of the Fund or any material changes to a sub-advisory agreements.
With respect to Proposal 5, should shareholders of the Money Market Fund not
approve the proposal to amend the Money Market Fund's fundamental policy on
investing in other investment companies, the Money Market Fund's fundamental
investment policy on investing in other investment companies would continue to
apply unchanged.
SHAREHOLDERS SHARING THE SAME ADDRESS. As permitted by law, only one copy of
this Joint Proxy Statement may be delivered to shareholders residing at the same
address, unless such shareholders have notified the Trusts of their desire to
receive multiple copies of the shareholder reports and proxy statements that
each Trust sends. If you would like to receive an additional copy, please
contact the Trusts by writing to the Trusts' address, or by calling the
telephone number shown on the front page of this Joint Proxy Statement. The
Trusts will then promptly deliver, upon request, a separate copy of this Joint
Proxy Statement to any shareholder residing at an address to which only one copy
was mailed. Shareholders wishing to receive separate copies of the Trusts'
shareholder reports and proxy statements in the future, and shareholders sharing
an address that wish to receive a single copy if they are receiving multiple
copies, should also send a request as indicated.
41
SHAREHOLDER PROPOSALS
The Trusts are organized as statutory trusts under the laws of Delaware. As
such, the Trusts are not required to, and do not, hold annual shareholder
meetings. Nonetheless, the Board may call a special meeting of shareholders for
action by shareholder vote as may be required by the 1940 Act or as required or
permitted by each Trust's Declaration of Trust and By-Laws. Shareholders who
wish to present a proposal for action at a future meeting should submit a
written proposal to the Secretary of the Trust, c/o Rydex Series Funds or Rydex
Dynamic Funds, 805 King Farm Boulevard, Suite 600, Rockville, Maryland 20850 for
inclusion in a future proxy statement. Shareholder proposals to be presented at
any future meeting of a Trust must be received by the Trust in writing within a
reasonable amount of time before the Trust solicits proxies for that meeting, in
order to be considered for inclusion in the proxy materials for that meeting.
Whether a proposal is included in a proxy statement will be determined in
accordance with applicable federal and state laws. Shareholders retain the right
to request that a meeting of the shareholders be held for the purpose of
considering matters requiring shareholder approval.
TO ENSURE THE PRESENCE OF A QUORUM AT THE SPECIAL MEETING, PROMPT EXECUTION AND
RETURN OF THE ENCLOSED PROXY IS REQUESTED. A SELF-ADDRESSED, POSTAGE-PAID
ENVELOPE IS ENCLOSED FOR YOUR CONVENIENCE, ALONG WITH INSTRUCTIONS ON HOW TO
VOTE OVER THE INTERNET OR BY TELEPHONE SHOULD YOU PREFER TO VOTE BY ONE OF THOSE
METHODS.
By Order of the Boards of Trustees,
Richard M. Goldman
President
42
APPENDIX A
CORPORATE STRUCTURE OF THE INVESTMENT ADVISER
The following sets forth the name and business address of each parent company of
the Investment Adviser, and the basis of each parent company's control the
Investment Adviser as of September 20, 2011.
The Investment Adviser is an indirect wholly-owned subsidiary of an entity that
is managed by Guggenheim Partners, LLC ("Guggenheim Partners"). Guggenheim
Partners is a wholly-owned subsidiary of Guggenheim Capital, LLC ("Guggenheim
Capital"), 227 West Monroe Street, 48th Floor, Chicago, Illinois 60606. Sage
Assets, Inc., 5949 Sherry Lane, Suite 1900, Dallas, Texas 76225, a wholly-owned
subsidiary of Sammons Enterprises, Inc., 5949 Sherry Lane, Suite 1900, Dallas,
Texas 75225, is a control person of Guggenheim Partners as a result of its
equity ownership in excess of 25% (but less than 50%) of Guggenheim Capital.
Following the Transaction, the Investment Adviser will be an indirect
wholly-owned subsidiary of Guggenheim Capital.
A-1
APPENDIX B
FORMS OF NEW INVESTMENT ADVISORY AGREEMENT
ADVISORY AGREEMENT
ADVISORY AGREEMENT made as of this [ ] day of [ ], 2011 by and between RYDEX
SERIES FUNDS (the "Trust"), a Delaware statutory trust registered as an
investment company under the Investment Company Act of 1940, as amended (the
"1940 Act"), and SECURITY INVESTORS, LLC, a Kansas limited liability company,
with its principal place of business at 805 King Farm Boulevard, Suite 600,
Rockville, Maryland 20850 (the "Adviser").
W I T N E S S E T H
WHEREAS, the Board of Trustees (the "Board") of the Trust has selected the
Adviser to act as investment adviser to the Trust on behalf of the series set
forth on Schedule A to this Agreement (each a "Fund" and, collectively, the
"Funds"), as such Schedule may be amended from time to time upon mutual
agreement of the parties, and to provide certain related services, as more fully
set forth below, and to perform such services under the terms and conditions
hereinafter set forth;
NOW, THEREFORE, in consideration of the mutual covenants and benefits set
forth herein, the Trust and the Adviser do hereby agree as follows:
1. THE ADVISER'S SERVICES.
(a) Discretionary Investment Management Services. The Adviser shall act
as investment adviser with respect to the Funds. In such capacity, the
Adviser shall, subject to the supervision of the Board, regularly provide
the Funds with investment research, advice and supervision and shall
furnish continuously an investment program for the Funds, consistent with
the respective investment objectives and policies of each Fund. The
Adviser shall determine, from time to time, what securities shall be
purchased for the Funds, what securities shall be held or sold by the
Funds and what portion of the Funds' assets shall be held uninvested in
cash, subject always to the provisions of the Trust's Declaration of
Trust, By-Laws and its registration statement on Form N-1A (the
"Registration Statement") under the 1940 Act, and under the Securities Act
of 1933, as amended (the "1933 Act"), covering Fund shares, as filed with
the Securities and Exchange Commission (the "Commission"), and to the
investment objectives, policies and restrictions of the Funds, as each of
the same shall be from time to time in effect. To carry out such
obligations, the Adviser shall exercise full discretion and act for the
Funds in the same manner and with the same force and effect as the Funds
themselves might or could do with respect to purchases, sales or other
transactions, as well as with respect to all other such things necessary
or incidental to the furtherance or conduct of such purchases, sales or
other transactions. No reference in this Agreement to the Adviser having
full discretionary authority over each Fund's investments shall in any way
limit the right of the Board, in its sole discretion, to establish or
revise policies in connection with the management of a Fund's assets or to
otherwise exercise its right to control the overall management of a Fund.
B-1
(b) Compliance. The Adviser agrees to comply with the requirements
of the 1940 Act, the Investment Advisers Act of 1940 (the "Advisers Act"),
the 1933 Act, the Securities Exchange Act of 1934, as amended (the "1934
Act"), the Commodity Exchange Act and the respective rules and regulations
thereunder, as applicable, as well as with all other applicable federal
and state laws, rules, regulations and case law that relate to the
services and relationships described hereunder and to the conduct of its
business as a registered investment adviser. The Adviser also agrees to
comply with the objectives, policies and restrictions set forth in the
Registration Statement, as amended or supplemented, of the Funds, and with
any policies, guidelines, instructions and procedures approved by the
Board and provided to the Adviser. In selecting each Fund's portfolio
securities and performing the Adviser's obligations hereunder, the Adviser
shall cause the Fund to comply with the diversification and source of
income requirements of Subchapter M of the Internal Revenue Code of 1986,
as amended (the "Code"), for qualification as a regulated investment
company. The Adviser shall maintain compliance procedures that it
reasonably believes are adequate to ensure its compliance with the
foregoing. No supervisory activity undertaken by the Board shall limit the
Adviser's full responsibility for any of the foregoing.
(c) Proxy Voting. The Board has the authority to determine how
proxies with respect to securities that are held by the Funds shall be
voted, and the Board has initially determined to delegate the authority
and responsibility to vote proxies for the Funds' securities to the
Adviser. So long as proxy voting authority for the Funds has been
delegated to the Adviser, the Adviser shall exercise its proxy voting
responsibilities. The Adviser shall carry out such responsibility in
accordance with any instructions that the Board shall provide from time to
time, and at all times in a manner consistent with Rule 206(4)-6 under the
Advisers Act and its fiduciary responsibilities to the Trust. The Adviser
shall provide periodic reports and keep records relating to proxy voting
as the Board may reasonably request or as may be necessary for the Funds
to comply with the 1940 Act and other applicable law. Any such delegation
of proxy voting responsibility to the Adviser may be revoked or modified
by the Board at any time.
(d) Recordkeeping. The Adviser shall not be responsible for the
provision of administrative, bookkeeping or accounting services to the
Funds, except as otherwise provided herein or as may be necessary for the
Adviser to supply to the Trust or its Board the information required to be
supplied under this Agreement.
The Adviser shall maintain separate books and detailed records of all
matters pertaining to Fund assets advised by the Adviser required by Rule
31a-1 under the 1940 Act (other than those records being maintained by any
administrator, custodian or transfer agent appointed by the Funds) relating
to its responsibilities provided hereunder with respect to the Funds, and
shall preserve such records for the periods and in a manner prescribed
therefore by Rule 31a-2 under the 1940 Act (the "Fund Books and Records").
The Fund Books and Records shall be available to the Board at any time upon
request, shall be delivered to the Trust upon the termination of this
Agreement and shall be available without delay during any day the Trust is
open for business.
B-2
(e) Holdings Information and Pricing. The Adviser shall provide
regular reports regarding Fund holdings, and shall, on its own initiative,
furnish the Trust and its Board from time to time with whatever
information the Adviser believes is appropriate for this purpose. The
Adviser agrees to immediately notify the Trust if the Adviser reasonably
believes that the value of any security held by a Fund may not reflect
fair value. The Adviser agrees to provide any pricing information of which
the Adviser is aware to the Trust, its Board and/or any Fund pricing agent
to assist in the determination of the fair value of any Fund holdings for
which market quotations are not readily available or as otherwise required
in accordance with the 1940 Act or the Trust's valuation procedures for
the purpose of calculating the Fund net asset value in accordance with
procedures and methods established by the Board.
(f) Cooperation with Agents of the Trust. The Adviser agrees to
cooperate with and provide reasonable assistance to the Trust, any Trust
custodian or foreign subcustodians, any Trust pricing agents and all other
agents and representatives of the Trust, such information with respect to
the Funds as they may reasonably request from time to time in the
performance of their obligations, provide prompt responses to reasonable
requests made by such persons and establish appropriate interfaces with
each so as to promote the efficient exchange of information and compliance
with applicable laws and regulations.
2. CODE OF ETHICS. The Adviser has adopted a written code of ethics that it
reasonably believes complies with the requirements of Rule 17j-1 under the 1940
Act, which it will provide to the Trust. The Adviser shall ensure that its
Access Persons (as defined in the Adviser's Code of Ethics) comply in all
material respects with the Adviser's Code of Ethics, as in effect from time to
time. Upon request, the Adviser shall provide the Trust with a (i) a copy of the
Adviser's current Code of Ethics, as in effect from time to time, and (ii)
certification that it has adopted procedures reasonably necessary to prevent
Access Persons from engaging in any conduct prohibited by the Adviser's Code of
Ethics. Annually, the Adviser shall furnish a written report, which complies
with the requirements of Rule 17j-1, concerning the Adviser's Code of Ethics to
the Trust. The Adviser shall respond to requests for information from the Trust
as to violations of the Code of Ethics by Access Persons and the sanctions
imposed by the Adviser. The Adviser shall immediately notify the Trust of any
material violation of the Code of Ethics, whether or not such violation relates
to a security held by any Fund.
3. INFORMATION AND REPORTING. The Adviser shall provide the Trust and its
respective officers with such periodic reports concerning the obligations the
Adviser has assumed under this Agreement as the Trust may from time to time
reasonably request.
(a) Notification of Breach/Compliance Reports. The Adviser shall notify
the Trust immediately upon detection of (i) any material failure to manage
any Fund in accordance with its investment objectives and policies or any
applicable law; or (ii) any material breach of the Funds' or the Adviser's
policies, guidelines or procedures. In addition, the Adviser shall provide
a quarterly report regarding each Fund's compliance with its investment
objectives and policies, applicable law, including, but not limited to the
1940 Act and Subchapter M of the Code, and the Fund's policies, guidelines
or procedures as applicable to the Adviser's obligations under this
Agreement. The Adviser agrees to correct any such failure promptly and to
take any action that the Board may reasonably
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request in connection with any such breach. Upon request, the Adviser shall
also provide the officers of the Trust with supporting certifications in
connection with such certifications of Fund financial statements and
disclosure controls pursuant to the Sarbanes-Oxley Act. The Adviser will
promptly notify the Trust in the event (i) the Adviser is served or
otherwise receives notice of any action, suit, proceeding, inquiry or
investigation, at law or in equity, before or by any court, public board,
or body, involving the affairs of the Trust (excluding class action suits
in which a Fund is a member of the plaintiff class by reason of the Fund's
ownership of shares in the defendant) or the compliance by the Adviser with
the federal or state securities laws or (ii) an actual change in control of
the Adviser resulting in an "assignment" (as defined in the 1940 Act) has
occurred or is otherwise proposed to occur.
(b) Board and Filings Information. The Adviser will also provide the
Trust with any information reasonably requested regarding its management of
the Funds required for any meeting of the Board, or for any shareholder
report, amended registration statement, proxy statement, or prospectus
supplement to be filed by the Trust with the Commission. The Adviser will
make its officers and employees available to meet with the Board from time
to time on due notice to review its investment management services to the
Funds in light of current and prospective economic and market conditions
and shall furnish to the Board such information as may reasonably be
necessary in order for the Board to evaluate this Agreement or any proposed
amendments thereto.
(c) Transaction Information. The Adviser shall furnish to the Trust such
information concerning portfolio transactions as may be necessary to enable
the Trust or its designated agent to perform such compliance testing on the
Funds and the Adviser's services as the Trust may, in its sole discretion,
determine to be appropriate. The provision of such information by the
Adviser to the Trust or its designated agent in no way relieves the Adviser
of its own responsibilities under this Agreement.
4. BROKERAGE.
(a) Principal Transactions. In connection with purchases or sales of
securities for the account of a Fund, neither the Adviser nor any of its
directors, officers or employees will act as a principal or agent or
receive any commission except as permitted by the 1940 Act.
(b) Placement of Orders. The Adviser shall arrange for the placing of
all orders for the purchase and sale of securities for a Fund's account
with brokers or dealers selected by the Adviser. In the selection of such
brokers or dealers and the placing of such orders, the Adviser is directed
at all times to seek for the Fund the most favorable execution and net
price available under the circumstances. It is also understood that it is
desirable for the Fund that the Adviser have access to brokerage and
research services provided by brokers who may execute brokerage
transactions at a higher cost to the Fund than may result when allocating
brokerage to other brokers, consistent with section 28(e) of the 1934 Act
and any Commission staff interpretations thereof. Therefore, the Adviser
is authorized to place orders for the purchase and sale of securities for a
Fund with such brokers, subject to review by the Board from time to time
with respect to the extent and
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continuation of this practice. It is understood that the services provided
by such brokers may be useful to the Adviser in connection with its or its
affiliates' services to other clients.
(c) Aggregated Transactions. On occasions when the Adviser deems the
purchase or sale of a security to be in the best interest of a Fund as well
as other clients of the Adviser, the Adviser may, to the extent permitted
by applicable law and regulations, aggregate the order for securities to be
sold or purchased. In such event, the Adviser will allocate securities or
futures contracts so purchased or sold, as well as the expenses incurred in
the transaction, in the manner the Adviser reasonably considers to be
equitable and consistent with its fiduciary obligations to the Fund and to
such other clients under the circumstances.
(d) Affiliated Brokers. The Adviser or any of its affiliates may act as
broker in connection with the purchase or sale of securities or other
investments for a Fund, subject to: (a) the requirement that the Adviser
seek to obtain best execution and price within the policy guidelines
determined by the Board and set forth in the Fund's current prospectus and
SAI; (b) the provisions of the 1940 Act; (c) the provisions of the Advisers
Act; (d) the provisions of the 1934 Act; and (e) other provisions of
applicable law. These brokerage services are not within the scope of the
duties of the Adviser under this Agreement. Subject to the requirements of
applicable law and any procedures adopted by the Board, the Adviser or its
affiliates may receive brokerage commissions, fees or other remuneration
from a Fund for these services in addition to the Adviser's fees for
services under this Agreement.
5. CUSTODY. Nothing in this Agreement shall permit the Adviser to take
or receive physical possession of cash, securities or other investments of a
Fund.
6. ALLOCATION OF CHARGES AND EXPENSES. The Adviser will bear its own
costs of providing services hereunder. Other than as herein specifically
indicated, the Adviser shall not be responsible for a Fund's expenses, including
brokerage and other expenses incurred in placing orders for the purchase and
sale of securities and other investment instruments.
Notwithstanding the foregoing paragraph, with respect to the All Asset
Conservative Strategy, All Asset Moderate Strategy, All Asset Aggressive
Strategy, and Alternative Strategies Allocation Funds, the Adviser will bear its
own costs of providing services hereunder. In addition, the Adviser agrees to
pay all expenses incurred by the foregoing Funds, except for acquired fund fees
and expenses, interest, taxes, brokerage and other expenses incurred in placing
orders for the purchase and sale of securities and other investment instruments,
extraordinary expenses, and distribution fees and expenses paid by the Funds
under any distribution plan adopted pursuant to Rule 12b-1 under the 1940 Act.
Notwithstanding the foregoing paragraphs, with respect to the Multi-Hedge
Strategies Fund, the Adviser will bear its own costs of providing services
hereunder. The Adviser agrees to pay all expenses incurred by the foregoing
Fund, except for interest, taxes, brokerage and other expenses incurred in
placing orders for the purchase and sale of securities and other investment
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instruments, extraordinary expenses, and distribution fees and expenses paid by
the Fund under any distribution plan adopted pursuant to Rule 12b-1 under the
1940 Act.
7. Representations, Warranties and Covenants.
(a) Properly Registered. The Adviser is registered as an investment
adviser under the Advisers Act, and will remain so registered for the
duration of this Agreement. The Adviser is not prohibited by the Advisers
Act or the 1940 Act from performing the services contemplated by this
Agreement, and to the best knowledge of the Adviser, there is no proceeding
or investigation that is reasonably likely to result in the Adviser being
prohibited from performing the services contemplated by this Agreement. The
Adviser agrees to promptly notify the Trust of the occurrence of any event
that would disqualify the Adviser from serving as an investment adviser to
an investment company. The Adviser is in compliance in all material
respects with all applicable federal and state law in connection with its
investment management operations.
(b) ADV Disclosure. The Adviser has provided the Trust with a copy of
its Form ADV as most recently filed with the Commission and will, promptly
after filing any amendment to its Form ADV with the Commission, furnish a
copy of such amendment(s) to the Trust. The information contained in the
Adviser's Form ADV is accurate and complete in all material respects and
does not omit to state any material fact necessary in order to make the
statements made, in light of the circumstances under which they were made,
not misleading.
(c) Fund Disclosure Documents. The Adviser has reviewed and will in the
future review, the Registration Statement, and any amendments or
supplements thereto, the annual or semi-annual reports to shareholders,
other reports filed with the Commission and any marketing material of the
Funds (collectively the "Disclosure Documents") and represents and warrants
that with respect to disclosure about the Adviser, the manner in which the
Adviser manages the Funds or information relating directly or indirectly to
the Adviser, such Disclosure Documents contain or will contain, as of the
date thereof, no untrue statement of any material fact and does not omit
any statement of material fact which was required to be stated therein or
necessary to make the statements contained therein not misleading.
(d) Use of The Name "Rydex". The Adviser has the right to use the name
"Rydex" in connection with its services to the Trust and that, subject to
the terms set forth in Section 8 of this Agreement, the Trust shall have
the right to use the name "Rydex" in connection with the management and
operation of the Funds. The Adviser is not aware of any threatened or
existing actions, claims, litigation or proceedings that would adversely
affect or prejudice the rights of the Adviser or the Trust to use the name
"Rydex".
(e) Insurance. The Adviser maintains errors and omissions insurance
coverage in an appropriate amount and shall provide prior written notice to
the Trust (i) of any material changes in its insurance policies or
insurance coverage; or (ii) if any material claims will be made on its
insurance policies. Furthermore, the Adviser shall upon reasonable request
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provide the Trust with any information it may reasonably require concerning
the amount of or scope of such insurance.
(f) No Detrimental Agreement. The Adviser represents and warrants that
it has no arrangement or understanding with any party, other than the
Trust, that would influence the decision of the Adviser with respect to its
selection of securities for a Fund, and that all selections shall be done
in accordance with what is in the best interest of the Fund.
(g) Conflicts. The Adviser shall act honestly, in good faith and in the
best interests of the Trust including requiring any of its personnel with
knowledge of Fund activities to place the interest of the Funds first,
ahead of their own interests, in all personal trading scenarios that may
involve a conflict of interest with the Funds, consistent with its
fiduciary duties under applicable law.
(h) Representations. The representations and warranties in this Section
7 shall be deemed to be made on the date this Agreement is executed and at
the time of delivery of the quarterly compliance report required by Section
3(a), whether or not specifically referenced in such report.
8. THE NAME "RYDEX". The Adviser grants to the Trust a license to use
the name "Rydex" (the "Name") as part of the name of any Fund. The foregoing
authorization by the Adviser to the Trust to use the Name as part of the name of
any
Fund is not exclusive of the right of the Adviser itself to use, or to
authorize others to use, the Name; the Trust acknowledges and agrees that, as
between the Trust and the Adviser, the Adviser has the right to use, or
authorize others to use, the Name. The Trust shall (1) only use the Name in a
manner consistent with uses approved by the Adviser; (2) use its best efforts to
maintain the quality of the services offered using the Name; (3) adhere to such
other specific quality control standards as the Adviser may from time to time
promulgate. At the request of the Adviser, the Trust will (a) submit to Adviser
representative samples of any promotional materials using the Name; and (b)
change the name of any Fund within three months of its receipt of the Adviser's
request, or such other shorter time period as may be required under the terms of
a settlement agreement or court order, so as to eliminate all reference to the
Name and will not thereafter transact any business using the Name in the name of
any Fund; provided, however, that the Trust may continue to use beyond such date
any supplies of prospectuses, marketing materials and similar documents that the
Trust had at the date of such name change in quantities not exceeding those
historically produced and used in connection with such Fund.
9. ADVISER'S COMPENSATION. The Funds shall pay to the Adviser, as
compensation for the Adviser's services hereunder, a fee, determined as
described in Schedule A that is attached hereto and made a part hereof. Such fee
shall be computed daily and paid not less than monthly in arrears by the Funds.
The method for determining net assets of a Fund for purposes hereof shall
be the same as the method for determining net assets for purposes of
establishing the offering and redemption prices of Fund shares as described in
the Funds' prospectus(es). In the event of termination of this Agreement, the
fee provided in this Section shall be computed on the basis of the period
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ending on the last business day on which this Agreement is in effect subject to
a pro rata adjustment based on the number of days elapsed in the current month
as a percentage of the total number of days in such month.
10. INDEPENDENT CONTRACTOR. In the performance of its duties hereunder,
the Adviser is and shall be an independent contractor and, unless otherwise
expressly provided herein or otherwise authorized in writing, shall have no
authority to act for or represent the Trust or any Fund in any way or otherwise
be deemed to be an agent of the Trust or any Fund. If any occasion should arise
in which the Adviser gives any advice to its clients concerning the shares of a
Fund, the Adviser will act solely as investment counsel for such clients and not
in any way on behalf of the Fund.
11. ASSIGNMENT AND AMENDMENTS. This Agreement shall automatically
terminate, without the payment of any penalty, in the event of its assignment
(as defined in section 2(a)(4) of the 1940 Act); provided that such termination
shall not relieve the Adviser of any liability incurred hereunder.
This Agreement may not be added to or changed orally and may not be
modified or rescinded except by a writing signed by the parties hereto and in
accordance with the 1940 Act, when applicable.
12. Duration and Termination.
(a) This Agreement shall become effective as of the date executed and
shall remain in full force and effect continually thereafter, subject to
renewal as provided in Section 12(d) and unless terminated automatically as
set forth in Section 11 hereof or until terminated as follows:
(b) The Trust may cause this Agreement to terminate either (i) by vote
of its Board or (ii) with respect to any Fund, upon the affirmative vote of
a majority of the outstanding voting securities of the Fund; or
(c) The Adviser may at any time terminate this Agreement by not more
than sixty (60) days' nor less than thirty (30) days' written notice
delivered or mailed by registered mail, postage prepaid, to the Trust; or
(d) This Agreement shall automatically terminate two years from the date
of its execution unless its renewal is specifically approved at least
annually thereafter by (i) a majority vote of the Trustees, including a
majority vote of such Trustees who are not interested persons of the Trust
or the Adviser, at a meeting called for the purpose of voting on such
approval; or (ii) the vote of a majority of the outstanding voting
securities of each Fund; provided, however, that if the continuance of this
Agreement is submitted to the shareholders of the Funds for their approval
and such shareholders fail to approve such continuance of this Agreement as
provided herein, the Adviser may continue to serve hereunder as to the
Funds in a manner consistent with the 1940 Act and the rules and
regulations thereunder; and
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Termination of this Agreement pursuant to this Section shall be without
payment of any penalty.
In the event of termination of this Agreement for any reason, the Adviser
shall, immediately upon notice of termination or on such later date as may be
specified in such notice, cease all activity on behalf of the Funds and with
respect to any of their assets, except as otherwise required by any fiduciary
duties of the Adviser under applicable law. In addition, the Adviser shall
deliver the Fund Books and Records to the Trust by such means and in accordance
with such schedule as the Trust shall direct and shall otherwise cooperate, as
reasonably directed by the Trust, in the transition of portfolio asset
management to any successor of the Adviser.
13. CERTAIN DEFINITIONS. For the purposes of this Agreement:
(a) "Affirmative vote of a majority of the outstanding voting securities
of the Fund" shall have the meaning as set forth in the 1940 Act, subject,
however, to such exemptions as may be granted by the Commission under the
1940 Act or any interpretations of the Commission staff.
(b) "Interested persons" and "Assignment" shall have their respective
meanings as set forth in the 1940 Act, subject, however, to such exemptions
as may be granted by the Commission under the 1940 Act or any
interpretations of the Commission staff.
14. LIABILITY OF THE ADVISER. The Adviser shall indemnify and hold
harmless the Trust and all affiliated persons thereof (within the meaning of
Section 2(a)(3) of the 1940 Act) and all controlling persons (as described in
Section 15 of the 1933 Act) (collectively, the "Adviser Indemnitees") against
any and all losses, claims, damages, liabilities or litigation (including
reasonable legal and other expenses) by reason of or arising out of: (a) the
Adviser being in material violation of any applicable federal or state law, rule
or regulation or any investment policy or restriction set forth in the Funds'
Registration Statement or any written guidelines or instruction provided in
writing by the Board, (b) a Fund's failure to satisfy the diversification or
source of income requirements of Subchapter M of the Code, or (c) the Adviser's
willful misfeasance, bad faith or gross negligence generally in the performance
of its duties hereunder or its reckless disregard of its obligations and duties
under this Agreement.
15. ENFORCEABILITY. Any term or provision of this Agreement which is
invalid or unenforceable in any jurisdiction shall, as to such jurisdiction be
ineffective to the extent of such invalidity or unenforceability without
rendering invalid or unenforceable the remaining terms or provisions of this
Agreement or affecting the validity or enforceability of any of the terms or
provisions of this Agreement in any other jurisdiction.
16. LIMITATION OF LIABILITY. The parties to this Agreement acknowledge
and agree that all litigation arising hereunder, whether direct or indirect, and
of any and every nature whatsoever shall be satisfied solely out of the assets
of the affected Fund and that no Trustee, officer or holder of shares of
beneficial interest of the Fund shall be personally liable for any of the
foregoing liabilities. The Trust's Certificate of Trust, as amended from time to
time, is on file in the Office of the Secretary of State of the State of
Delaware. Such Certificate of Trust and the
B-9
Trust's Declaration of Trust describe in detail the respective responsibilities
and limitations on liability of the Trustees, officers, and holders of shares of
beneficial interest.
17. JURISDICTION. This Agreement shall be governed by and construed in
accordance with the substantive laws of state of Delaware and the Adviser
consents to the jurisdiction of courts, both state or federal, in Delaware, with
respect to any dispute under this Agreement.
18. PARAGRAPH HEADINGS. The headings of paragraphs contained in this
Agreement are provided for convenience only, form no part of this Agreement and
shall not affect its construction.
19. COUNTERPARTS. This Agreement may be executed simultaneously in two or
more counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have caused this instrument to be
signed on their behalf by their duly authorized officers as of the date first
above written.
RYDEX SERIES FUNDS, on behalf of each Fund
listed on Schedule A
By: __________________________________
Name: Richard M. Goldman
Title: President
SECURITY INVESTORS, LLC
By: __________________________________
Name: Richard M. Goldman
Title: Chief Executive Officer
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SCHEDULE A
TO THE
ADVISORY AGREEMENT
DATED [ ], 2011 BETWEEN
RYDEX SERIES FUNDS
AND
SECURITY INVESTORS, LLC
The Trust will pay to the Adviser as compensation for the Adviser's
services rendered, a fee, computed daily at an annual rate based on the average
daily net assets of the respective Fund in accordance the following fee
schedule:
FUND RATE FUND RATE
----------------------------------------------- -----------------------------------------------
Nova 0.75% Consumer Products 0.85%
Inverse S&P 500 Strategy 0.90% Electronics 0.85%
NASDAQ-100(R) 0.75% Energy Services 0.85%
Inverse NASDAQ-100(R) Strategy 0.90% Financial Services 0.85%
Mid-Cap 1.5x Strategy 0.90% Health Care 0.85%
Russell 2000(R) 1.5x Strategy 0.90% Internet 0.85%
Government Long Bond 1.2x Strategy 0.50% Leisure 0.85%
Europe 1.25x Strategy 0.90% Precious Metals 0.75%
S&P 500 Pure Value 0.75% Real Estate 0.85%
S&P 500 Pure Growth 0.75% Retailing 0.85%
S&P Mid-Cap 400 Pure Value 0.75% Technology 0.85%
S&P Mid-Cap 400 Pure Growth 0.75% Telecommunications 0.85%
Inverse Mid-Cap Strategy 0.90% Transportation 0.85%
S&P Small-Cap 600 Pure Value 0.75% Utilities 0.85%
S&P Small-Cap 600 Pure Growth 0.75% Commodities Strategy 0.75%
Inverse Russell 2000(R) Strategy 0.90% U.S. Long Short Momentum 0.90%
Strengthening Dollar 2x Strategy 0.90% S&P 500 0.75%
Weakening Dollar 2x Strategy 0.90% Russell 2000(R) 0.75%
U.S. Government Money Market 0.50% Inverse International 2x Strategy* 0.75%
High Yield Strategy 0.75% All-Asset Moderate Strategy 0.00%
International 2x Strategy* 0.75% All-Asset Aggressive Strategy 0.00%
Long/Short Commodities Strategy 0.90% Alternative Strategies Allocation 0.00%
Multi-Hedge Strategies 1.15% Event Driven and Distressed Strategies 0.90%
Banking 0.85% Alternative Strategies 0.90%
Basic Materials 0.85% Long Short Equity Strategy 0.90%
Biotechnology 0.85% Long Short Interest Rate Strategy 0.75%
Managed Futures Strategy 0.90% Japan 2x Strategy 0.75%
Inverse High Yield Strategy 0.75% Emerging Markets 2x Strategy 0.90%
Energy 0.85% Inverse Emerging Markets 2x Strategy 0.90%
Inverse Government Long Bond Strategy 0.90% Global Managed Futures Strategy Fund* 0.90%
All-Asset Conservative Strategy 0.00%
* Denotes Funds that have not yet commenced operations.
B-11
ADVISORY AGREEMENT
ADVISORY AGREEMENT made as of this [ ] day of [ ], 2011 by and between
RYDEX DYNAMIC FUNDS (the "Trust"), a Delaware statutory trust registered as an
investment company under the Investment Company Act of 1940, as amended (the
"1940 Act"), and SECURITY INVESTORS, LLC, a Kansas limited liability company,
with its principal place of business at 805 King Farm Boulevard, Suite 600,
Rockville, Maryland 20850 (the "Adviser").
W I T N E S S E T H
WHEREAS, the Board of Trustees (the "Board") of the Trust has selected the
Adviser to act as investment adviser to the Trust on behalf of the series set
forth on Schedule A to this Agreement (each a "Fund" and, collectively, the
"Funds"), as such Schedule may be amended from time to time upon mutual
agreement of the parties, and to provide certain related services, as more fully
set forth below, and to perform such services under the terms and conditions
hereinafter set forth;
NOW, THEREFORE, in consideration of the mutual covenants and benefits set
forth herein, the Trust and the Adviser do hereby agree as follows:
1. THE ADVISER'S SERVICES.
(a) Discretionary Investment Management Services. The Adviser shall act
as investment adviser with respect to the Funds. In such capacity, the
Adviser shall, subject to the supervision of the Board, regularly provide
the Funds with investment research, advice and supervision and shall
furnish continuously an investment program for the Funds, consistent with
the respective investment objectives and policies of each Fund. The
Adviser shall determine, from time to time, what securities shall be
purchased for the Funds, what securities shall be held or sold by the Funds
and what portion of the Funds' assets shall be held uninvested in cash,
subject always to the provisions of the Trust's Declaration of Trust,
By-Laws and its registration statement on Form N-1A (the "Registration
Statement") under the 1940 Act, and under the Securities Act of 1933, as
amended (the "1933 Act"), covering Fund shares, as filed with the U.S.
Securities and Exchange Commission (the "Commission"), and to the
investment objectives, policies and restrictions of the Funds, as each of
the same shall be from time to time in effect. To carry out such
obligations, the Adviser shall exercise full discretion and act for the
Funds in the same manner and with the same force and effect as the Funds
themselves might or could do with respect to purchases, sales or other
transactions, as well as with respect to all other such things necessary or
incidental to the furtherance or conduct of such purchases, sales or other
transactions. No reference in this Agreement to the Adviser having full
discretionary authority over each Fund's investments shall in any way limit
the right of the Board, in its sole discretion, to establish or revise
policies in connection with the management of a Fund's assets or to
otherwise exercise its right to control the overall management of a Fund.
(b) Compliance. The Adviser agrees to comply with the requirements of
the 1940 Act, the Investment Advisers Act of 1940 (the "Advisers Act"), the
1933 Act, the
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Securities Exchange Act of 1934, as amended (the "1934 Act"), the Commodity
Exchange Act and the respective rules and regulations thereunder, as
applicable, as well as with all other applicable federal and state laws,
rules, regulations and case law that relate to the services and
relationships described hereunder and to the conduct of its business as a
registered investment adviser. The Adviser also agrees to comply with the
objectives, policies and restrictions set forth in the Registration
Statement, as amended or supplemented, of the Funds, and with any policies,
guidelines, instructions and procedures approved by the Board and provided
to the Adviser. In selecting each Fund's portfolio securities and
performing the Adviser's obligations hereunder, the Adviser shall cause the
Fund to comply with the diversification and source of income requirements
of Subchapter M of the Internal Revenue Code of 1986, as amended (the
"Code"), for qualification as a regulated investment company. The Adviser
shall maintain compliance procedures that it reasonably believes are
adequate to ensure its compliance with the foregoing. No supervisory
activity undertaken by the Board shall limit the Adviser's full
responsibility for any of the foregoing.
(c) Proxy Voting. The Board has the authority to determine how proxies
with respect to securities that are held by the Funds shall be voted, and
the Board has initially determined to delegate the authority and
responsibility to vote proxies for the Funds' securities to the Adviser.
So long as proxy voting authority for the Funds has been delegated to the
Adviser, the Adviser shall exercise its proxy voting responsibilities. The
Adviser shall carry out such responsibility in accordance with any
instructions that the Board shall provide from time to time, and at all
times in a manner consistent with Rule 206(4)-6 under the Advisers Act and
its fiduciary responsibilities to the Trust. The Adviser shall provide
periodic reports and keep records relating to proxy voting as the Board may
reasonably request or as may be necessary for the Funds to comply with the
1940 Act and other applicable law. Any such delegation of proxy voting
responsibility to the Adviser may be revoked or modified by the Board at
any time.
(d) Recordkeeping. The Adviser shall not be responsible for the
provision of administrative, bookkeeping or accounting services to the
Funds, except as otherwise provided herein or as may be necessary for the
Adviser to supply to the Trust or its Board the information required to be
supplied under this Agreement.
The Adviser shall maintain separate books and detailed records of
all matters pertaining to Fund assets advised by the Adviser required by
Rule 31a-1 under the 1940 Act (other than those records being maintained by
any administrator, custodian or transfer agent appointed by the Funds)
relating to its responsibilities provided hereunder with respect to the
Funds, and shall preserve such records for the periods and in a manner
prescribed therefore by Rule 31a-2 under the 1940 Act (the "Fund Books and
Records"). The Fund Books and Records shall be available to the Board at
any time upon request, shall be delivered to the Trust upon the termination
of this Agreement and shall be available without delay during any day the
Trust is open for business.
(e) Holdings Information and Pricing. The Adviser shall provide regular
reports regarding Fund holdings, and shall, on its own initiative, furnish
the Trust and its Board from time to time with whatever information the
Adviser believes is appropriate for this
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purpose. The Adviser agrees to immediately notify the Trust if the Adviser
reasonably believes that the value of any security held by a Fund may not
reflect fair value. The Adviser agrees to provide any pricing information
of which the Adviser is aware to the Trust, its Board and/or any Fund
pricing agent to assist in the determination of the fair value of any Fund
holdings for which market quotations are not readily available or as
otherwise required in accordance with the 1940 Act or the Trust's valuation
procedures for the purpose of calculating the Fund net asset value in
accordance with procedures and methods established by the Board.
(f) Cooperation with Agents of the Trust. The Adviser agrees to
cooperate with and provide reasonable assistance to the Trust, any Trust
custodian or foreign sub- custodians, any Trust pricing agents and all
other agents and representatives of the Trust, such information with
respect to the Funds as they may reasonably request from time to time in
the performance of their obligations, provide prompt responses to
reasonable requests made by such persons and establish appropriate
interfaces with each so as to promote the efficient exchange of information
and compliance with applicable laws and regulations.
2. CODE OF ETHICS. The Adviser has adopted a written code of ethics that
it reasonably believes complies with the requirements of Rule 17j-1 under the
1940 Act, which it will provide to the Trust. The Adviser shall ensure that its
Access Persons (as defined in the Adviser's Code of Ethics) comply in all
material respects with the Adviser's Code of Ethics, as in effect from time to
time. Upon request, the Adviser shall provide the Trust with a (i) a copy of the
Adviser's current Code of Ethics, as in effect from time to time, and (ii)
certification that it has adopted procedures reasonably necessary to prevent
Access Persons from engaging in any conduct prohibited by the Adviser's Code of
Ethics. Annually, the Adviser shall furnish a written report, which complies
with the requirements of Rule 17j-1, concerning the Adviser's Code of Ethics to
the Trust. The Adviser shall respond to requests for information from the Trust
as to violations of the Code of Ethics by Access Persons and the sanctions
imposed by the Adviser. The Adviser shall immediately notify the Trust of any
material violation of the Code of Ethics, whether or not such violation relates
to a security held by any Fund.
3. INFORMATION AND REPORTING. The Adviser shall provide the Trust and
its respective officers with such periodic reports concerning the obligations
the Adviser has assumed under this Agreement as the Trust may from time to time
reasonably request.
(a) Notification of Breach/Compliance Reports. The Adviser shall notify
the Trust immediately upon detection of (i) any material failure to manage
any Fund in accordance with its investment objectives and policies or any
applicable law; or (ii) any material breach of the Funds' or the Adviser's
policies, guidelines or procedures. In addition, the Adviser shall provide
a quarterly report regarding each Fund's compliance with its investment
objectives and policies, applicable law, including, but not limited to the
1940 Act and Subchapter M of the Code, and the Fund's policies, guidelines
or procedures as applicable to the Adviser's obligations under this
Agreement. The Adviser agrees to correct any such failure promptly and to
take any action that the Board may reasonably request in connection with
any such breach. Upon request, the Adviser shall also provide the officers
of the Trust with supporting certifications in connection with such
certifications of Fund financial statements and disclosure controls
pursuant to the
B-14
Sarbanes-Oxley Act. The Adviser will promptly notify the Trust in the event
(i) the Adviser is served or otherwise receives notice of any action, suit,
proceeding, inquiry or investigation, at law or in equity, before or by any
court, public board, or body, involving the affairs of the Trust (excluding
class action suits in which a Fund is a member of the plaintiff class by
reason of the Fund's ownership of shares in the defendant) or the
compliance by the Adviser with the federal or state securities laws or (ii)
an actual change in control of the Adviser resulting in an "assignment" (as
defined in the 1940 Act) has occurred or is otherwise proposed to occur.
(b) Board and Filings Information. The Adviser will also provide the
Trust with any information reasonably requested regarding its management of
the Funds required for any meeting of the Board, or for any shareholder
report, amended registration statement, proxy statement, or prospectus
supplement to be filed by the Trust with the Commission. The Adviser will
make its officers and employees available to meet with the Board from time
to time on due notice to review its investment management services to the
Funds in light of current and prospective economic and market conditions
and shall furnish to the Board such information as may reasonably be
necessary in order for the Board to evaluate this Agreement or any proposed
amendments thereto.
(c) Transaction Information. The Adviser shall furnish to the Trust such
information concerning portfolio transactions as may be necessary to enable
the Trust or its designated agent to perform such compliance testing on the
Funds and the Adviser's services as the Trust may, in its sole discretion,
determine to be appropriate. The provision of such information by the
Adviser to the Trust or its designated agent in no way relieves the Adviser
of its own responsibilities under this Agreement.
4. BROKERAGE.
(a) Principal Transactions. In connection with purchases or sales of
securities for the account of a Fund, neither the Adviser nor any of its
directors, officers or employees will act as a principal or agent or
receive any commission except as permitted by the 1940 Act.
(b) Placement of Orders. The Adviser shall arrange for the placing of
all orders for the purchase and sale of securities for a Fund's account
with brokers or dealers selected by the Adviser. In the selection of such
brokers or dealers and the placing of such orders, the Adviser is directed
at all times to seek for the Fund the most favorable execution and net
price available under the circumstances. It is also understood that it is
desirable for the Fund that the Adviser have access to brokerage and
research services provided by brokers who may execute brokerage
transactions at a higher cost to the Fund than may result when allocating
brokerage to other brokers, consistent with section 28(e) of the 1934 Act
and any Commission staff interpretations thereof. Therefore, the Adviser
is authorized to place orders for the purchase and sale of securities for a
Fund with such brokers, subject to review by the Board from time to time
with respect to the extent and continuation of this practice. It is
understood that the services provided by such brokers may be useful to the
Adviser in connection with its or its affiliates' services to other
clients.
B-15
(c) Aggregated Transactions. On occasions when the Adviser deems the
purchase or sale of a security to be in the best interest of a Fund as well
as other clients of the Adviser, the Adviser may, to the extent permitted
by applicable law and regulations, aggregate the order for securities to be
sold or purchased. In such event, the Adviser will allocate securities or
futures contracts so purchased or sold, as well as the expenses incurred in
the transaction, in the manner the Adviser reasonably considers to be
equitable and consistent with its fiduciary obligations to the Fund and to
such other clients under the circumstances.
(d) Affiliated Brokers. The Adviser or any of its affiliates may act as
broker in connection with the purchase or sale of securities or other
investments for a Fund, subject to: (a) the requirement that the Adviser
seek to obtain best execution and price within the policy guidelines
determined by the Board and set forth in the Fund's current prospectus and
SAI; (b) the provisions of the 1940 Act; (c) the provisions of the Advisers
Act; (d) the provisions of the 1934 Act; and (e) other provisions of
applicable law. These brokerage services are not within the scope of the
duties of the Adviser under this Agreement. Subject to the requirements of
applicable law and any procedures adopted by the Board, the Adviser or its
affiliates may receive brokerage commissions, fees or other remuneration
from a Fund for these services in addition to the Adviser's fees for
services under this Agreement.
5. CUSTODY. Nothing in this Agreement shall permit the Adviser to take
or receive physical possession of cash, securities or other investments of a
Fund.
6. ALLOCATION OF CHARGES AND EXPENSES. The Adviser will bear its own
costs of providing services hereunder. Other than as herein specifically
indicated, the Adviser shall not be responsible for a Fund's expenses, including
brokerage and other expenses incurred in placing orders for the purchase and
sale of securities and other investment instruments.
7. Representations, Warranties and Covenants.
(a) Properly Registered. The Adviser is registered as an investment
adviser under the Advisers Act, and will remain so registered for the
duration of this Agreement. The Adviser is not prohibited by the Advisers
Act or the 1940 Act from performing the services contemplated by this
Agreement, and to the best knowledge of the Adviser, there is no proceeding
or investigation that is reasonably likely to result in the Adviser being
prohibited from performing the services contemplated by this Agreement. The
Adviser agrees to promptly notify the Trust of the occurrence of any event
that would disqualify the Adviser from serving as an investment adviser to
an investment company. The Adviser is in compliance in all material
respects with all applicable federal and state law in connection with its
investment management operations.
(b) ADV Disclosure. The Adviser has provided the Trust with a copy of
its Form ADV as most recently filed with the Commission and will, promptly
after filing any amendment to its Form ADV with the Commission, furnish a
copy of such amendment(s) to the Trust. The information contained in the
Adviser's Form ADV is accurate and complete in all material respects and
does not omit to state any material fact necessary in
B-16
order to make the statements made, in light of the circumstances under
which they were made, not misleading.
(c) Fund Disclosure Documents. The Adviser has reviewed and will in the
future review, the Registration Statement, and any amendments or
supplements thereto, the annual or semi-annual reports to shareholders,
other reports filed with the Commission and any marketing material of the
Funds (collectively the "Disclosure Documents") and represents and warrants
that with respect to disclosure about the Adviser, the manner in which the
Adviser manages the Funds or information relating directly or indirectly to
the Adviser, such Disclosure Documents contain or will contain, as of the
date thereof, no untrue statement of any material fact and does not omit
any statement of material fact which was required to be stated therein or
necessary to make the statements contained therein not misleading.
(d) Use of The Name "Rydex". The Adviser has the right to use the name
"Rydex" in connection with its services to the Trust and that, subject to
the terms set forth in Section 8 of this Agreement, the Trust shall have
the right to use the name "Rydex" in connection with the management and
operation of the Funds. The Adviser is not aware of any threatened or
existing actions, claims, litigation or proceedings that would adversely
affect or prejudice the rights of the Adviser or the Trust to use the name
"Rydex".
(e) Insurance. The Adviser maintains errors and omissions insurance
coverage in an appropriate amount and shall provide prior written notice to
the Trust (i) of any material changes in its insurance policies or
insurance coverage; or (ii) if any material claims will be made on its
insurance policies. Furthermore, the Adviser shall upon reasonable request
provide the Trust with any information it may reasonably require concerning
the amount of or scope of such insurance.
(f) No Detrimental Agreement. The Adviser represents and warrants that
it has no arrangement or understanding with any party, other than the
Trust, that would influence the decision of the Adviser with respect to its
selection of securities for a Fund, and that all selections shall be done
in accordance with what is in the best interest of the Fund.
(g) Conflicts. The Adviser shall act honestly, in good faith and in the
best interests of the Trust including requiring any of its personnel with
knowledge of Fund activities to place the interest of the Funds first,
ahead of their own interests, in all personal trading scenarios that may
involve a conflict of interest with the Funds, consistent with its
fiduciary duties under applicable law.
(h) Representations. The representations and warranties in this Section
7 shall be deemed to be made on the date this Agreement is executed and at
the time of delivery of the quarterly compliance report required by Section
3(a), whether or not specifically referenced in such report.
8. THE NAME "RYDEX". The Adviser grants to the Trust a license to use
the name "Rydex" (the "Name") as part of the name of any Fund. The foregoing
authorization by the Adviser to the Trust to use the Name as part of the name of
any Fund is not exclusive of the right
B-17
of the Adviser itself to use, or to authorize others to use, the Name; the Trust
acknowledges and agrees that, as between the Trust and the Adviser, the Adviser
has the right to use, or authorize others to use, the Name. The Trust shall (1)
only use the Name in a manner consistent with uses approved by the Adviser; (2)
use its best efforts to maintain the quality of the services offered using the
Name; (3) adhere to such other specific quality control standards as the Adviser
may from time to time promulgate. At the request of the Adviser, the Trust will
(a) submit to Adviser representative samples of any promotional materials using
the Name; and (b) change the name of any Fund within three months of its receipt
of the Adviser's request, or such other shorter time period as may be required
under the terms of a settlement agreement or court order, so as to eliminate all
reference to the Name and will not thereafter transact any business using the
Name in the name of any Fund; provided, however, that the Trust may continue to
use beyond such date any supplies of prospectuses, marketing materials and
similar documents that the Trust had at the date of such name change in
quantities not exceeding those historically produced and used in connection with
such Fund.
9. ADVISER'S COMPENSATION. The Funds shall pay to the Adviser, as
compensation for the Adviser's services hereunder, a fee, determined as
described in Schedule A that is attached hereto and made a part hereof. Such fee
shall be computed daily and paid not less than monthly in arrears by the Funds.
The method for determining net assets of a Fund for purposes hereof shall
be the same as the method for determining net assets for purposes of
establishing the offering and redemption prices of Fund shares as described in
the Funds' prospectus(es). In the event of termination of this Agreement, the
fee provided in this Section shall be computed on the basis of the period ending
on the last business day on which this Agreement is in effect subject to a pro
rata adjustment based on the number of days elapsed in the current month as a
percentage of the total number of days in such month.
10. INDEPENDENT CONTRACTOR. In the performance of its duties hereunder,
the Adviser is and shall be an independent contractor and, unless otherwise
expressly provided herein or otherwise authorized in writing, shall have no
authority to act for or represent the Trust or any Fund in any way or otherwise
be deemed to be an agent of the Trust or any Fund. If any occasion should arise
in which the Adviser gives any advice to its clients concerning the shares of a
Fund, the Adviser will act solely as investment counsel for such clients and not
in any way on behalf of the Fund.
11. ASSIGNMENT AND AMENDMENTS. This Agreement shall automatically
terminate, without the payment of any penalty, in the event of its assignment
(as defined in section 2(a)(4) of the 1940 Act); provided that such termination
shall not relieve the Adviser of any liability incurred hereunder.
This Agreement may not be added to or changed orally and may not be
modified or rescinded except by a writing signed by the parties hereto and in
accordance with the 1940 Act, when applicable.
B-18
12. Duration and Termination.
(a) This Agreement shall become effective as of the date executed and
shall remain in full force and effect continually thereafter, subject to
renewal as provided in Section 12(d) and unless terminated automatically as
set forth in Section 11 hereof or until terminated as follows:
(b) The Trust may cause this Agreement to terminate either (i) by vote
of its Board or (ii) with respect to any Fund, upon the affirmative vote of
a majority of the outstanding voting securities of the Fund; or
(c) The Adviser may at any time terminate this Agreement by not more
than sixty (60) days' nor less than thirty (30) days' written notice
delivered or mailed by registered mail, postage prepaid, to the Trust; or
(d) This Agreement shall automatically terminate two years from the date
of its execution unless its renewal is specifically approved at least
annually thereafter by (i) a majority vote of the Trustees, including a
majority vote of such Trustees who are not interested persons of the Trust
or the Adviser, at a meeting called for the purpose of voting on such
approval; or (ii) the vote of a majority of the outstanding voting
securities of each Fund; provided, however, that if the continuance of this
Agreement is submitted to the shareholders of the Funds for their approval
and such shareholders fail to approve such continuance of this Agreement as
provided herein, the Adviser may continue to serve hereunder as to the
Funds in a manner consistent with the 1940 Act and the rules and
regulations thereunder; and
Termination of this Agreement pursuant to this Section shall be without payment
of any penalty. In the event of termination of this Agreement for any reason,
the Adviser shall, immediately upon notice of termination or on such later date
as may be specified in such notice, cease all activity on behalf of the Funds
and with respect to any of their assets, except as otherwise required by any
fiduciary duties of the Adviser under applicable law. In addition, the Adviser
shall deliver the Fund Books and Records to the Trust by such means and in
accordance with such schedule as the Trust shall direct and shall otherwise
cooperate, as reasonably directed by the Trust, in the transition of portfolio
asset management to any successor of the Adviser.
13. CERTAIN DEFINITIONS. For the purposes of this Agreement:
(a) "Affirmative vote of a majority of the outstanding voting securities
of the Fund" shall have the meaning as set forth in the 1940 Act, subject,
however, to such exemptions as may be granted by the Commission under the
1940 Act or any interpretations of the Commission staff.
(b) "Interested persons" and "Assignment" shall have their respective
meanings as set forth in the 1940 Act, subject, however, to such exemptions
as may be granted by the Commission under the 1940 Act or any
interpretations of the Commission staff.
14. LIABILITY OF THE ADVISER. The Adviser shall indemnify and hold
harmless the Trust and all affiliated persons thereof (within the meaning of
Section 2(a)(3) of the 1940 Act) and all controlling persons (as described in
Section 15 of the 1933 Act) (collectively, the "Adviser Indemnitees") against
any and all losses, claims, damages, liabilities or litigation
B-19
(including reasonable legal and other expenses) by reason of or arising out of:
(a) the Adviser being in material violation of any applicable federal or state
law, rule or regulation or any investment policy or restriction set forth in the
Funds' Registration Statement or any written guidelines or instruction provided
in writing by the Board, (b) a Fund's failure to satisfy the diversification or
source of income requirements of Subchapter M of the Code, or (c) the Adviser's
willful misfeasance, bad faith or gross negligence generally in the performance
of its duties hereunder or its reckless disregard of its obligations and duties
under this Agreement.
15. ENFORCEABILITY. Any term or provision of this Agreement which is
invalid or unenforceable in any jurisdiction shall, as to such jurisdiction be
ineffective to the extent of such invalidity or unenforceability without
rendering invalid or unenforceable the remaining terms or provisions of this
Agreement or affecting the validity or enforceability of any of the terms or
provisions of this Agreement in any other jurisdiction.
16. LIMITATION OF LIABILITY. The parties to this Agreement acknowledge
and agree that all litigation arising hereunder, whether direct or indirect, and
of any and every nature whatsoever shall be satisfied solely out of the assets
of the affected Fund and that no Trustee, officer or holder of shares of
beneficial interest of the Fund shall be personally liable for any of the
foregoing liabilities. The Trust's Certificate of Trust, as amended from time to
time, is on file in the Office of the Secretary of State of the State of
Delaware. Such Certificate of Trust and the Trust's Declaration of Trust
describe in detail the respective responsibilities and limitations on liability
of the Trustees, officers, and holders of shares of beneficial interest.
17. JURISDICTION. This Agreement shall be governed by and construed in
accordance with the substantive laws of state of Delaware and the Adviser
consents to the jurisdiction of courts, both state and/or federal, in Delaware,
with respect to any dispute under this Agreement.
18. PARAGRAPH HEADINGS. The headings of paragraphs contained in this
Agreement are provided for convenience only, form no part of this Agreement and
shall not affect its construction.
19. COUNTERPARTS. This Agreement may be executed simultaneously in two or
more counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have caused this instrument to be
signed on their behalf by their duly authorized officers as of the date first
above written.
RYDEX DYNAMIC FUNDS, on behalf of each
Fund listed on Schedule A
By: __________________________________
Name: Richard M. Goldman
Title: President
B-20
SECURITY INVESTORS, LLC
By: __________________________________
Name: Richard M. Goldman
Title: Chief Executive Officer
B-21
SCHEDULE A
TO THE
ADVISORY AGREEMENT
DATED [ ], 2011 BETWEEN
RYDEX DYNAMIC FUNDS
AND
SECURITY INVESTORS, LLC
The Trust will pay to the Adviser as compensation for the Adviser's
services rendered, a fee, computed daily at an annual rate based on the average
daily net assets of the respective Fund in accordance the following fee
schedule:
FUND RATE
S&P 500 2x Strategy..................................................................... 0.90%
Inverse S&P 500 2x Strategy ............................................................ 0.90%
NASDAQ-100(R) 2x Strategy............................................................... 0.90%
Inverse NASDAQ-100(R) 2x Strategy ...................................................... 0.90%
Dow 2x Strategy......................................................................... 0.90%
Inverse Dow 2x Strategy ................................................................ 0.90%
Russell 2000(R) 2x Strategy............................................................. 0.90%
Inverse Russell 2000(R) 2x Strategy .................................................... 0.90%
B-22
APPENDIX C
INFORMATION REGARDING THE INVESTMENT ADVISORY
AGREEMENTS AND FEES PAID TO THE INVESTMENT ADVISER
AND AFFILIATES
Security Investors, LLC, a Kansas limited liability company (the
"Investment Adviser") currently serves as investment adviser to all series
(collectively, the "Funds") of Rydex Series Funds ("RSF") and Rydex Dynamic
Funds ("RDF") (collectively, the "Trusts") pursuant to investment advisory
agreements between each of the Trusts, on behalf of its series, and the
Investment Adviser. Rydex Fund Services, Inc. ("RFS") serves as the
administrator, transfer agent and accounting services agent for the Funds. Rydex
Distributors, LLC ("RDL") serves as principal underwriter to the Funds. RFS and
RDL are affiliates of the Investment Adviser. The table below provides the
following information:
(i) the date on which each Fund's shareholders last approved the Fund's
investment advisory agreement;
(ii) the annual rate of management fees paid by each Fund to the
Investment Adviser, stated as a percentage of that Fund's average
daily net assets;
(iii) the aggregate amount of management fees paid by each Fund to the
Investment Adviser for the Fund's fiscal year ended March 31, 2011
for RSF (except as noted) and December 31, 2010 for RDF and RSF
(except as noted);
(iv) the amount of fees paid by each Fund to the Administrator for
administrative and transfer agency services for the Fund during the
Fund's fiscal year ended March 31, 2011 for RSF (except as noted)
and December 31, 2010 for RDF and RSF (except as noted);
(v) the amount of accounting service fees paid by each Fund to the
Administrator for accounting services for the Fund during the
Fund's fiscal year ended March 31, 2011 for RSF (except as noted)
and December 31, 2010 for RDF and RSF (except as noted); and
(vi) the amount of distribution (12b-1) fees paid by each RSF and RDF
Fund during the Fund's fiscal year ended March 31, 2011 for RSF
(except as noted) and December 31, 2010 for RDF and RSF (except as
noted).
C-1
RYDEX DYNAMIC FUNDS
MANAGEMENT, ADMINISTRATIVE, AND ACCOUNTING FEES
MANAGEMENT FEES
DATE OF LAST PAID TO ADMINISTRATIVE ACCOUNTING
SHAREHOLDER MANAGEMENT INVESTMENT SERVICE FEES SERVICE FEES
SERIES NAME APPROVAL FEES ADVISER PAID TO RFS PAID TO RFS
--------------------------------------------------------------------------------------------------------------------------------
Dow 2x Strategy Fund 6/18/2010 0.90% $ 270,950 $ 75,264 $ 45,159
Inverse Dow 2x Strategy Fund 6/18/2010 0.90% $ 415,717 $ 115,477 $ 69,286
NASDAQ-100(R) 2x Strategy Fund 6/18/2010 0.90% $1,837,754 $ 510,487 $ 306,293
Inverse NASDAQ-100(R) 2x Strategy Fund 6/18/2010 0.90% $ 722,564 $ 200,712 $ 120,428
Russell 2000(R) 2x Strategy Fund 6/18/2010 0.90% $ 355,211 $ 98,669 $ 59,208
Inverse Russell 2000(R) 2x Strategy Fund 6/18/2010 0.90% $ 365,162 $ 101,434 $ 60,861
S&P 500 2x Strategy Fund 6/18/2010 0.90% $1,369,680 $ 380,467 $ 228,281
Inverse S&P 500 2x Strategy Fund 6/18/2010 0.90% $1,820,386 $ 505,662 $ 303,399
DISTRIBUTION FEES
A-CLASS C-CLASS H-CLASS
SERIES NAME (0.25% 12b-1 FEE) (0.25% 12b-1 FEE) (0.25% 12b-1 FEE)
----------------------------------------------------------------------------------------------------------------
Dow 2x Strategy Fund $ 9,956 $ 36,394 $ 56,210
Inverse Dow 2x Strategy Fund $ 5,155 $ 21,294 $ 104,998
NASDAQ-100(R) 2x Strategy Fund $ 19,905 $ 180,450 $ 445,470
Inverse NASDAQ-100(R) 2x Strategy Fund $ 4,299 $ 55,020 $ 182,658
Russell 2000(R) 2x Strategy Fund $ 6,387 $ 21,168 $ 86,990
Inverse Russell 2000(R) 2x Strategy Fund $ 4,103 $ 35,926 $ 88,350
S&P 500 2x Strategy Fund $ 28,293 $ 168,115 $ 310,145
Inverse S&P 500 2x Strategy Fund $ 24,930 $ 115,314 $ 451,904
C-2
RYDEX SERIES FUNDS
MANAGEMENT, ADMINISTRATIVE, AND ACCOUNTING FEES
DATE OF MANAGEMENT ADMINISTRATIVE ACCOUNTING
LAST FEES PAID SERVICE FEES SERVICE FEES
SHAREHOLDER MANAGEMENT TO INVESTMENT PAID PAID
SERIES NAME APPROVAL FEES ADVISER TO RFS TO RFS
--------------------------------------------------------------------------------------------------------------------------------
All-Asset Aggressive Strategy Fund 6/18/2010 0.00%(1) $ 0(1) $ 0(2) $ 0(2)
All-Asset Conservative Strategy Fund 6/18/2010 0.00%(1) $ 0(1) $ 0(2) $ 0(2)
All-Asset Moderate Strategy Fund 6/18/2010 0.00%(1) $ 0(1) $ 0(2) $ 0(2)
Alternative Strategies Fund 5/19/2010 0.90% $ 24,707 $ 8,645 $ 3,458
Alternative Strategies Allocation Fund 6/18/2010 0.00%(1) $ 0(1) $ 0(2) $ 0(2)
Banking Fund 6/18/2010 0.85% $ 163,421 $ 48,065 $ 19,226
Basic Materials Fund 6/18/2010 0.85% $ 885,645 $ 260,483 $ 104,192
Biotechnology Fund 6/18/2010 0.85% $ 535,192 $ 157,409 $ 62,963
Commodities Strategy Fund* 6/18/2010 0.75%(3) $ 263,603 $ 87,909 $ 35,163
Consumer Products Fund 6/18/2010 0.85% $ 735,452 $ 216,309 $ 86,523
Electronics Fund 6/18/2010 0.85% $ 254,842 $ 74,953 $ 29,981
Emerging Markets 2x Strategy Fund 8/25/2010 0.90% $ 12,414 $ 3,940 $ 1,576
Energy Fund 6/18/2010 0.85% $ 654,649 $ 192,543 $ 77,017
Energy Services Fund 6/18/2010 0.85% $ 929,437 $ 273,363 $ 109,345
Event Driven and Distressed Strategies Fund 5/19/2010 0.90% $ 70,815 $ 23,201 $ 9,280
Europe 1.25x Strategy Fund 6/18/2010 0.90% $ 185,738 $ 51,594 $ 20,637
Financial Services Fund 6/18/2010 0.85% $ 144,677 $ 42,552 $ 17,021
Government Long Bond 1.2x Strategy Fund 6/18/2010 0.50% $ 798,132 $ 319,256 $ 150,545
Health Care Fund 6/18/2010 0.85% $ 235,238 $ 69,188 $ 27,675
High Yield Strategy Fund 6/18/2010 0.75% $ 1,407,964 $ 469,321 $ 181,818
Internet Fund 6/18/2010 0.85% $ 808,473 $ 237,785 $ 95,113
Inverse Emerging Markets 2x Strategy Fund 5/19/2010 0.90% $ 9,183 $ 2,912 $ 1,164
Inverse Government Long Bond Strategy Fund 6/18/2010 0.90% $ 5,382,826 $ 1,495,228 $ 486,317
Inverse High Yield Strategy Fund 6/18/2010 0.75% $ 142,467 $ 47,489 $ 18,995
Inverse Mid-Cap Strategy Fund 6/18/2010 0.90% $ 37,641 $ 10,456 $ 4,182
Inverse NASDAQ-100(R) Strategy Fund 6/18/2010 0.90% $ 241,086 $ 66,968 $ 26,787
C-3
DATE OF MANAGEMENT ADMINISTRATIVE ACCOUNTING
LAST FEES PAID SERVICE FEES SERVICE FEES
SHAREHOLDER MANAGEMENT TO INVESTMENT PAID PAID
SERIES NAME APPROVAL FEES ADVISER TO RFS TO RFS
--------------------------------------------------------------------------------------------------------------------------------
Inverse Russell 2000(R) Strategy Fund 6/18/2010 0.90% $ 243,647 $ 67,680 $ 27,072
Inverse S&P 500 Strategy Fund 6/18/2010 0.90% $ 2,256,839 $ 626,899 $ 242,404
Japan 2x Strategy Fund 6/18/2010 0.75% $ 49,039 $ 16,347 $ 6,538
Leisure Fund 6/18/2010 0.85% $ 121,173 $ 35,639 $ 14,256
Long/Short Commodities Strategy Fund* 6/18/2010 0.90%(3) $ 1,542,411 $ 428,444 $ 170,624
Long Short Equity Strategy Fund 5/19/2010 0.90% $ 19,377 $ 6,424 $ 2,570
Long Short Interest Rate Strategy Fund 5/19/2010 0.75% $ 298,378 $ 99,459 $ 39,783
Managed Futures Strategy Fund* 6/18/2010 0.90%(3) $ 20,164,468 $ 5,567,658 $ 1,006,871
Mid-Cap 1.5x Strategy Fund 6/18/2010 0.90% $ 317,193 $ 88,109 $ 35,243
Multi-Hedge Strategies Fund* 6/18/2010 1.15%(3) $ 1,014,214 $ 0(2) $ 0(2)
NASDAQ-100 Fund(R) 6/18/2010 0.75% $ 4,575,228 $ 1,525,076 $ 492,437
Nova Fund 6/18/2010 0.75% $ 529,891 $ 176,630 $ 70,651
Precious Metals Fund 6/18/2010 0.75% $ 1,785,811 $ 595,270 $ 234,116
Real Estate Fund 6/18/2010 0.85% $ 352,791 $ 103,762 $ 41,504
Retailing Fund 6/18/2010 0.85% $ 104,867 $ 30,843 $ 12,337
Russell 2000(R) 1.5x Strategy Fund 6/18/2010 0.90% $ 234,264 $ 65,073 $ 26,029
Russell 2000(R) Fund 6/18/2010 0.75% $ 174,718 $ 58,239 $ 23,296
S&P 500 Fund 6/18/2010 0.75% $ 1,209,099 $ 403,033 $ 160,721
S&P 500 Pure Growth Fund 6/18/2010 0.75% $ 372,809 $ 124,270 $ 49,707
S&P 500 Pure Value Fund 6/18/2010 0.75% $ 388,056 $ 129,352 $ 51,740
S&P MidCap 400 Pure Growth Fund 6/18/2010 0.75% $ 850,218 $ 283,406 $ 112,276
S&P MidCap 400 Pure Value Fund 6/18/2010 0.75% $ 514,279 $ 171,426 $ 68,562
S&P SmallCap 600 Pure Growth Fund 6/18/2010 0.75% $ 358,410 $ 119,470 $ 47,788
S&P SmallCap 600 Pure Value Fund 6/18/2010 0.75% $ 603,267 $ 201,089 $ 79,365
Strengthening Dollar 2x Strategy Fund 6/18/2010 0.90% $ 410,155 $ 113,932 $ 45,572
Technology Fund 6/18/2010 0.85% $ 365,317 $ 107,446 $ 42,978
Telecommunications Fund 6/18/2010 0.85% $ 111,533 $ 32,804 $ 13,121
Transportation Fund 6/18/2010 0.85% $ 195,474 $ 57,492 $ 22,997
U.S. Long Short Momentum Fund 6/18/2010 0.90% $ 1,546,882 $ 429,689 $ 171,874
U.S. Government Money Market Fund 6/18/2010 0.50% $ 6,592 $ 136,432 $ 423,667
C-4
DATE OF MANAGEMENT ADMINISTRATIVE ACCOUNTING
LAST FEES PAID SERVICE FEES SERVICE FEES
SHAREHOLDER MANAGEMENT TO INVESTMENT PAID PAID
SERIES NAME APPROVAL FEES ADVISER TO RFS TO RFS
--------------------------------------------------------------------------------------------------------------------------------
Utilities Fund 6/18/2010 0.85% $ 388,077 $ 114,140 $ 45,656
Weakening Dollar 2x Strategy Fund 6/18/2010 0.90% $ 321,462 $ 89,295 $ 35,718
* The Fund has a fiscal year end of December 31.
(1) The Fund invests primarily in underlying funds (the "Underlying Funds").
The Investment Adviser receives an investment advisory fee for managing
the Underlying Funds. The Underlying Funds pay a monthly investment
advisory fee to the Investment Adviser for its services. The fee is based
on the average net daily assets of each Underlying Fund and calculated at
an annual rate for each Underlying Fund. For more information regarding
the Underlying funds' investment advisory fees and expense limitations,
please see the Prospectus and applicable sections of the Statement of
Additional Information. The Funds benefit from the investment advisory
services provided to the Underlying Funds and, as shareholders of those
Underlying Funds, indirectly bear a proportionate share of those
Underlying Funds' advisory fees.
(2) The Investment Adviser has contractually agreed to pay all other expenses
of the Fund, excluding Acquired Fund fees and expenses, interest expense
and taxes (expected to be de minimis), brokerage commissions and other
expenses connected with the execution of portfolio transactions and
extraordinary expenses.
(3) The Fund may invest up to 25% of its total assets in a wholly-owned and
controlled Cayman Islands subsidiary (the "Subsidiary"). The Subsidiary
has entered into a separate advisory agreement with the Investment Adviser
for the management of the Subsidiary's portfolio pursuant to which the
Subsidiary pays the Investment Adviser a management fee at the same rate
that the Fund pays the Investment Adviser for services provided to the
Fund. The Investment Adviser has contractually agreed to waive the
management fee it receives from the Fund in an amount equal to the
management fee paid to the Investment Adviser by the Subsidiary. This
undertaking will continue in effect for so long as the Fund invests in the
Subsidiary, and may not be terminated by the Investment Adviser unless the
Investment Adviser first obtains the prior approval of the Fund's Board of
Trustees for such termination. The management fees included in the table
reflect the net management fees paid to the Investment Adviser by the Fund
after the fee waiver.
C-5
DISTRIBUTION FEES*
(*For A-Class, C-Class, H-Class and Advisor Class shares. Investor Class shares
and Investor 2 Class shares were not subject to distribution fees.)
SERIES NAME A-CLASS C-CLASS H-CLASS ADVISOR CLASS
All-Asset Aggressive Strategy Fund $ 0 $ 49,896 $ 0 $ -
All-Asset Conservative Strategy Fund $ 0 $ 70,417 $ 0 $ -
All-Asset Moderate Strategy Fund $ 0 $ 135,183 $ 0 $ -
Alternative Strategies Fund $ 5,878 $ 329 $ 2,666 $ -
Alternative Strategies Allocation Fund $ 0 $ 35,385 $ 0 $ -
Banking Fund $ 6,369 $ 34,655 $ - $ 6,108
Basic Materials Fund $ 28,273 $ 101,719 $ - $ 40,795
Biotechnology Fund $ 5,853 $ 35,685 $ - $ 28,557
Commodities Strategy Fund* $ 16,612 $ 49,430 $ 58,940 N/A
Consumer Products Fund $ 13,922 $ 40,974 $ - $ 27,343
Electronics Fund $ 2,886 $ 16,184 $ - $ 6,934
Emerging Markets 2x Strategy Fund $ 83 $ 1,068 $ 3,591 $ -
Energy Fund $ 13,430 $ 145,036 $ - $ 38,484
Energy Services Fund $ 33,636 $ 112,250 $ - $ 41,040
Europe 1.25x Strategy Fund $ 4,490 $ 10,296 $ 44,530 $ -
Event Driven and Distressed Strategies Fund $ 15,805 $ 4,697 $ 6,189 $ -
Financial Services Fund $ 3,528 $ 14,905 $ - $ 13,615
Government Long Bond 1.2x Strategy Fund $ 9,683 $ 109,419 $ - $ 155,455
Health Care Fund $ 3,883 $ 37,766 $ - $ 11,608
High Yield Strategy Fund $ 21,622 $ 67,617 $ 430,795 $ -
Internet Fund $ 3,250 $ 15,527 $ - $ 13,006
Inverse Emerging Markets 2x Strategy Fund $ 25 $ 938 $ 2,652 $ -
Inverse Government Long Bond Strategy Fund $ 178,979 $ 1,147,960 $ - $ 280,127
Inverse High Yield Strategy Fund $ 8,146 $ 18,869 $ 34,625 $ -
Inverse Mid-Cap Strategy Fund $ 1,109 $ 4,501 $ 8,221 $ -
Inverse NASDAQ-100(R) Strategy Fund $ 2,654 $ 17,199 $ - $ 3,618
Inverse Russell 2000(R) Strategy Fund $ 4,429 $ 19,066 $ 58,484 $ -
Inverse S&P 500 Strategy Fund $ 49,444 $ 159,338 $ - $ 92,097
Japan 2x Strategy Fund $ 2,093 $ 2,685 $ 13,582 $ -
Leisure Fund $ 2,867 $ 9,954 $ - $ 6,081
C-6
SERIES NAME A-CLASS C-CLASS H-CLASS ADVISOR CLASS
Long/Short Commodities Strategy Fund* $ 92,942 $ 103,403 $ 256,324 N/A
Long Short Equity Strategy Fund $ 3,962 $ 892 $ 2,210 $ -
Long Short Interest Rate Strategy Fund $ 37,242 $ 38,587 $ 40,934 $ -
Managed Futures Strategy Fund* $ 1,599,233 $ 1,904,728 $ 3,228,581 N/A
Mid-Cap 1.5x Strategy Fund $ 2,934 $ 47,851 $ 73,212 $ -
Multi-Hedge Strategies Fund* $ 41,486 $ 178,187 $ 132,545 N/A
NASDAQ-100(R) Fund $ 28,678 $ 114,350 $ - $ 203,173
Nova Fund $ 8,415 $ 88,347 $ - $ 36,333
Precious Metals Fund $ 34,882 $ 334,166 $ - $ 114,807
Real Estate Fund $ 12,351 $ 21,400 $ 86,061 $ -
Retailing Fund $ 2,290 $ 18,366 $ - $ 6,611
Russell 2000(R) 1.5x Strategy Fund $ 4,834 $ 23,921 $ 54,259 $ -
Russell 2000(R) Fund $ 2,625 $ 49,787 $ 43,168 $ -
S&P 500 Fund $ 40,436 $ 94,788 $ 338,900 $ -
S&P 500 Pure Growth Fund $ 10,741 $ 70,910 $ 95,802 $ -
S&P 500 Pure Value Fund $ 8,834 $ 29,168 $ 113,226 $ -
S&P MidCap 400 Pure Growth Fund $ 18,395 $ 55,052 $ 251,248 $ -
S&P MidCap 400 Pure Value Fund $ 12,275 $ 18,508 $ 154,524 $ -
S&P SmallCap 600 Pure Growth Fund $ 5,454 $ 17,888 $ 109,544 $ -
S&P SmallCap 600 Pure Value Fund $ 15,508 $ 47,650 $ 173,668 $ -
Strengthening Dollar 2x Strategy Fund $ 21,163 $ 64,252 $ 76,706 $ -
Technology Fund $ 5,342 $ 33,675 $ - $ 50,828
Telecommunications Fund $ 2,211 $ 17,421 $ - $ 3,831
Transportation Fund $ 4,973 $ 20,861 $ - $ 10,722
U.S. Government Money Market Fund $ 74,815 $ 659,962 $ - $ 1,252,940
U.S. Long Short Momentum Fund $ 73,421 $ 541,342 $ 220,933 $ -
Utilities Fund $ 6,079 $ 52,973 $ - $ 15,681
Weakening Dollar 2x Strategy Fund $ 13,612 $ 45,282 $ 64,362 $ -
___________________
* The Fund has a fiscal year end of December 31.
C-7
APPENDIX D
TRUSTEES/MANAGERS AND OFFICERS OF
THE INVESTMENT ADVISER
MEMBER REPRESENTATIVE AND PRINCIPAL EXECUTIVE OFFICER OF SECURITY INVESTORS, LLC
The business address of the member representative and principal executive
officer is 805 King Farm Boulevard, Suite 600, Rockville, Maryland 20850.
NAME POSITION HELD WITH OTHER PRINCIPAL
SECURITY INVESTORS, LLC OCCUPATION/POSITION
--------------------------------------------------------------------------------------------------------------
Richard M. Goldman President, Chief Executive Officer Senior Vice President, Security Benefit
and Member Representative Corporation; CEO, Security Benefit Asset
Management Holdings, LLC; CEO, President
and Manager Representative, Security Investors,
LLC; CEO and Manager, Rydex Holdings, LLC;
CEO, President, and Manager, Rydex
Distributors, LLC; Manager, Rydex Fund
Services, LLC; President and Trustee, Rydex
Series Funds, Rydex ETF Trust, Rydex Dynamic
Funds and Rydex Variable Trust; and President,
Director and Chairman of the Board, Security
Equity Fund, Security Income Fund, Security
Large Cap Value Fund, Security Mid Cap
Growth Fund and SBL Fund
TRUSTEES/OFFICERS OF THE FUNDS WHO HOLD POSITION(S) WITH SECURITY INVESTORS,
LLC. The business address of each of the following persons is 805 King Farm
Boulevard, Suite 600, Rockville, Maryland 20850.
NAME POSITION HELD WITH THE FUNDS POSITION HELD WITH SECURITY INVESTORS, LLC
----------------------------------------------------------------------------------------------------------------
Richard M. Goldman Trustee and President President, Chief Executive Officer and Member
Representative
Michael P. Byrum Vice President Senior Vice President
Nick Bonos Vice President and Treasurer Senior Vice President
Joanna M. Haigney Chief Compliance Officer and Senior Vice President and Chief Compliance
Secretary Officer
Joseph Arruda Assistant Treasurer Vice President
Keith Fletcher Vice President Senior Vice President
Amy Lee Vice President and Assistant Senior Vice President and Secretary
Secretary
D-1
APPENDIX E
ADVISORY FEE RATES OF FUNDS WITH SIMILAR INVESTMENT
OBJECTIVES ADVISED BY SECURITY INVESTORS, LLC
Each of the tables below lists the names of other mutual funds advised by
Security Investors, LLC (the "Investment Adviser") with similar investment
objectives as the Funds, and information concerning the Funds' and such other
funds' net assets as of April 30, 2011 and the rate of compensation for the
Investment Adviser for its services to the Funds and such other funds.
series of rydex dynamic funds:
------------------------------
ANNUAL COMPENSATION TO
THE INVESTMENT ADVISER
NAME OF FUND SUBJECT TO THIS PROXY STATEMENT (AS A PERCENTAGE OF AVERAGE DAILY
Name(s) of Other Fund(s) with Similar Objectives NET ASSETS) NET ASSETS (IN MILLIONS)
-----------------------------------------------------------------------------------------------------------------------------------
DOW 2x STRATEGY FUND, A SERIES OF RYDEX DYNAMIC FUNDS 0.90% $ 39.19
Dow 2x Strategy Fund, a series of Rydex Variable Trust 0.90% $ 18.14
INVERSE DOW 2x STRATEGY FUND, A SERIES OF RYDEX DYNAMIC FUNDS 0.90% $ 37.93
Inverse Dow 2x Strategy Fund, a series of Rydex Variable Trust 0.90% $ 8.50
INVERSE NASDAQ-100 2x STRATEGY FUND, A SERIES OF RYDEX DYNAMIC FUNDS 0.90% $ 47.83
None N/A N/A
INVERSE RUSSELL 2000 2x STRATEGY FUND, A SERIES OF RYDEX DYNAMIC FUNDS 0.90% $ 23.82
None N/A N/A
INVERSE S&P 500 2x STRATEGY FUND, A SERIES OF RYDEX DYNAMIC FUNDS 0.90% $ 108.79
Rydex Inverse 2x S&P 500 ETF, a series of Rydex ETF Trust 0.70% 51.05
NASDAQ-100 2x STRATEGY FUND, A SERIES OF RYDEX DYNAMIC FUNDS 0.90% $ 288.39
NASDAQ-100 2x Strategy Fund, a series of Rydex Variable Trust 0.90% $ 33.22
RUSSELL 2000 2x STRATEGY FUND, A SERIES OF RYDEX DYNAMIC FUNDS 0.90% $ 68.85
Russell 2000 2x Strategy Fund, a series of Rydex Variable Trust 0.90% $ 6.35
S&P 500 2x STRATEGY FUND, A SERIES OF RYDEX DYNAMIC FUNDS 0.90% $ 151.74
S&P 500 2x Strategy Fund, a series of Rydex Variable Trust 0.90% $ 23.55
Rydex 2x S&P 500 ETF, a series of Rydex ETF Trust 0.70% $ 94.29
E-1
series of rydex series funds:
-----------------------------
ANNUAL COMPENSATION TO
THE INVESTMENT ADVISER
NAME OF FUND SUBJECT TO THIS PROXY STATEMENT (AS A PERCENTAGE OF AVERAGE DAILY
Name(s) of Other Fund(s) with Similar Objectives NET ASSETS) NET ASSETS (IN MILLIONS)
-----------------------------------------------------------------------------------------------------------------------------------
ALL-ASSET AGGRESSIVE STRATEGY FUND, A SERIES OF RYDEX SERIES FUNDS 0.00%(1) $ 17.58
All-Asset Aggressive Strategy Fund, a series of Rydex 0.00%(1) $ 7.63
Variable Trust
ALL-ASSET CONSERVATIVE STRATEGY FUND, A SERIES OF RYDEX 0.00%(1) $ 14.32
SERIES FUNDS
All-Asset Conservative Strategy Fund, a series of Rydex 0.00%(1) $ 11.13
Variable Trust
ALL-ASSET MODERATE STRATEGY FUND, A SERIES OF RYDEX 0.00%(1) $ 31.18
SERIES FUNDS
All-Asset Moderate Strategy Fund, a series of Rydex Variable Trust 0.00%(1) $ 23.85
ALTERNATIVE STRATEGIES FUND, A SERIES OF RYDEX SERIES FUNDS 0.90 $ 4.04
None N/A N/A
ALTERNATIVE STRATEGIES ALLOCATION FUND, A SERIES OF RYDEX 0.00%(1) $ 21.01
SERIES FUNDS
Alternative Strategies Allocation Fund, a series of Rydex 0.00%(1) $ 7.44
Variable Trust
BANKING FUND, A SERIES OF RYDEX SERIES FUNDS 0.85% $ 15.87
Banking Fund, a series of Rydex Variable Trust 0.85% $ 5.36
BASIC MATERIALS FUND, A SERIES OF RYDEX SERIES FUNDS 0.85% $ 124.08
Basic Materials Fund, a series of Rydex Variable Trust 0.85% $ 40.65
BIOTECHNOLOGY FUND, A SERIES OF RYDEX SERIES FUNDS 0.85% $ 105.50
Biotechnology Fund, a series of Rydex Variable Trust 0.85% $ 17.99
COMMODITIES STRATEGY FUND, A SERIES OF RYDEX SERIES 0.75%(2) $ 109.21
FUNDS
Commodities Strategy Fund, a series of Rydex Variable Trust 0.75%(2) $ 23.60
CONSUMER PRODUCTS FUND, A SERIES OF RYDEX SERIES FUNDS 0.85% $ 74.07
Consumer Products Fund, a series of Rydex Variable Trust 0.85% $ 18.55
E-2
ANNUAL COMPENSATION TO
THE INVESTMENT ADVISER
NAME OF FUND SUBJECT TO THIS PROXY STATEMENT (AS A PERCENTAGE OF AVERAGE DAILY
Name(s) of Other Fund(s) with Similar Objectives NET ASSETS) NET ASSETS (IN MILLIONS)
-----------------------------------------------------------------------------------------------------------------------------------
ELECTRONICS FUND, A SERIES OF RYDEX SERIES FUNDS 0.85% $ 14.92
Electronics Fund, a series of Rydex Variable Trust 0.85% $ 10.86
EMERGING MARKETS 2x STRATEGY FUND, A SERIES OF RYDEX 0.90% $ 4.77
SERIES FUNDS
None N/A N/A
ENERGY FUND, A SERIES OF RYDEX SERIES FUNDS 0.85% $ 128.46
Energy Fund, a series of Rydex Variable Trust 0.85% $ 57.17
ENERGY SERVICES FUND, A SERIES OF RYDEX SERIES FUNDS 0.85% $ 224.73
Energy Services Fund, a series of Rydex Variable Trust 0.85% $ 55.34
EUROPE 1.25x STRATEGY FUND, A SERIES OF RYDEX SERIES 0.90% $ 32.84
FUNDS
Europe 1.25x Strategy Fund, a series of Rydex Variable Trust 0.90% $ 12.19
EVENT DRIVEN AND DISTRESSED STRATEGIES FUND, A SERIES 0.90% $22.37
RYDEX SERIES FUNDS
None N/A N/A
FINANCIAL SERVICES FUND, A SERIES OF RYDEX SERIES FUNDS 0.85% $ 12.08
Financial Services Fund, a series of Rydex Variable Trust 0.85% $ 8.15
GOVERNMENT LONG BOND 1.2x STRATEGY FUND, A SERIES OF 0.50% $ 102.39
RYDEX SERIES FUNDS
Government Long Bond 1.2x Strategy Fund, a series of Rydex 0.50% $ 15.66
Variable Trust
HEALTH CARE FUND, A SERIES OF RYDEX SERIES FUNDS 0.85% $ 65.66
Health Care Fund, a series of Rydex Variable Trust 0.85% $ 19.25
HIGH YIELD STRATEGY FUND, A SERIES OF RYDEX SERIES FUNDS 0.75% $ 307.52
None N/A N/A
INTERNET FUND, A SERIES OF RYDEX SERIES FUNDS 0.85% $ 28.70
Internet Fund, a series of Rydex Variable Trust 0.85% $ 11.34
INVERSE EMERGING MARKETS 2x STRATEGY FUND, A SERIES OF 0.90% $2.79
RYDEX SERIES FUNDS
None N/A N/A
E-3
ANNUAL COMPENSATION TO
THE INVESTMENT ADVISER
NAME OF FUND SUBJECT TO THIS PROXY STATEMENT (AS A PERCENTAGE OF AVERAGE DAILY
Name(s) of Other Fund(s) with Similar Objectives NET ASSETS) NET ASSETS (IN MILLIONS)
-----------------------------------------------------------------------------------------------------------------------------------
INVERSE GOVERNMENT LONG BOND STRATEGY FUND, A SERIES 0.90% $ 617.94
OF RYDEX SERIES FUNDS
Inverse Government Long Bond Strategy Fund, a series of 0.90% $ 18.71
Rydex Variable Trust
INVERSE HIGH YIELD STRATEGY FUND, A SERIES OF RYDEX 0.75% $ 11.31
SERIES FUNDS
None N/A N/A
INVERSE MID-CAP STRATEGY FUND, A SERIES OF RYDEX SERIES 0.90% $ 2.28
FUNDS
Inverse Mid-Cap Strategy Fund, a series of Rydex Variable 0.90% $ 1.17
Trust
INVERSE NASDAQ-100 STRATEGY FUND, A SERIES OF RYDEX 0.90% $ 14.17
SERIES FUNDS
Inverse NASDAQ-100 Strategy Fund, a series of Rydex 0.90% $ 5.73
Variable Trust
INVERSE RUSSELL 2000 STRATEGY FUND, A SERIES OF RYDEX 0.90% $ 9.22
SERIES FUNDS
Inverse Russell 2000 Strategy Fund, a series of Rydex 0.90% $ 3.15
Variable Trust
INVERSE S&P 500 STRATEGY FUND, A SERIES OF RYDEX SERIES 0.90% $ 136.53
FUNDS
Inverse S&P 500 Strategy Fund, a series of Rydex Variable 0.90% $ 14.23
Trust
JAPAN 2x STRATEGY FUND, A SERIES OF RYDEX SERIES FUNDS 0.75% $ 13.84
Japan 2x Strategy Fund, a series of Rydex Variable Trust 0.75% $ 6.29
LEISURE FUND, A SERIES OF RYDEX SERIES FUNDS 0.85% $ 6.11
Leisure Fund, a series of Rydex Variable Trust 0.85% $ 9.26
LONG/SHORT COMMODITIES STRATEGY FUND, A SERIES OF 0.90%(2) $ 380.59
RYDEX SERIES FUNDS
None N/A N/A
LONG SHORT EQUITY STRATEGY FUND, A SERIES OF RYDEX 0.90% $ 7.23
SERIES FUNDS
None N/A N/A
LONG SHORT INTEREST RATE STRATEGY FUND, A SERIES OF RYDEX 0.75% $ 164.33
SERIES FUNDS
None N/A N/A
E-4
ANNUAL COMPENSATION TO
THE INVESTMENT ADVISER
NAME OF FUND SUBJECT TO THIS PROXY STATEMENT (AS A PERCENTAGE OF AVERAGE DAILY
Name(s) of Other Fund(s) with Similar Objectives NET ASSETS) NET ASSETS (IN MILLIONS)
-----------------------------------------------------------------------------------------------------------------------------------
MANAGED FUTURES STRATEGY FUND, A SERIES OF RYDEX SERIES 0.90%(2) $ 2,583.87
FUNDS
Managed Futures Strategy Fund, a series of Rydex Variable 0.90%(2) $ 16.67
Trust
MID-CAP 1.5X STRATEGY FUND, A SERIES OF RYDEX SERIES 0.90% $ 56.79
FUNDS
Mid-Cap 1.5x Strategy Fund, a series of Rydex Variable 0.90% $ 23.70
Trust
MULTI-HEDGE STRATEGIES FUND, A SERIES OF RYDEX SERIES 1.15% $ 73.92
FUNDS
Multi-Hedge Strategies Fund, a series of Rydex Variable 1.15%(2) $ 17.49
Trust
NASDAQ-100 FUND, A SERIES OF RYDEX SERIES FUNDS 0.75% $ 648.00
NASDAQ-100 Fund, a series of Rydex Variable Trust 0.75% $ 52.92
NOVA FUND, A SERIES OF RYDEX SERIES FUNDS 0.75% $ 85.58
Nova Fund, a series of Rydex Variable Trust 0.75% $ 33.31
PRECIOUS METALS FUND, A SERIES OF RYDEX SERIES FUNDS 0.75% $ 243.13
Precious Metals Fund, a series of Rydex Variable Trust 0.75% $ 109.52
REAL ESTATE FUND, A SERIES OF RYDEX SERIES FUNDS 0.85% $ 24.86
Real Estate Fund, a series of Rydex Variable Trust 0.85% $ 26.88
RETAILING FUND, A SERIES OF RYDEX SERIES FUNDS 0.85% $ 11.76
Retailing Fund, a series of Rydex Variable Trust 0.85% $ 5.81
RUSSELL 2000 1.5x STRATEGY FUND, A SERIES OF RYDEX SERIES 0.90% $ 41.23
FUNDS
Russell 2000 1.5x Strategy Fund, a series of Rydex Variable 0.90% $ 19.74
Trust
RUSSELL 2000 FUND, A SERIES OF RYDEX SERIES FUNDS 0.75% $ 31.63
None N/A N/A
S&P 500 FUND, A SERIES OF RYDEX SERIES FUNDS 0.75% $ 177.93
None N/A N/A
S&P 500 PURE GROWTH FUND, A SERIES OF RYDEX SERIES 0.75% $ 47.33
FUNDS
E-5
ANNUAL COMPENSATION TO
THE INVESTMENT ADVISER
NAME OF FUND SUBJECT TO THIS PROXY STATEMENT (AS A PERCENTAGE OF AVERAGE DAILY
Name(s) of Other Fund(s) with Similar Objectives NET ASSETS) NET ASSETS (IN MILLIONS)
-----------------------------------------------------------------------------------------------------------------------------------
S&P 500 Pure Growth Fund, a series of Rydex Variable 0.75% $ 58.57
Trust
Rydex S&P 500 Pure Growth ETF, a series of Rydex ETF 0.35% $ 264.65
Trust
S&P 500 PURE VALUE FUND, A SERIES OF RYDEX SERIES FUNDS 0.75% $ 58.06
S&P 500 Pure Value Fund, a series of Rydex Variable Trust 0.75% $ 41.06
Rydex S&P 500 Pure Value ETF, a series of Rydex ETF 0.35% $ 112.93
Trust
S&P MIDCAP 400 PURE GROWTH FUND, A SERIES OF RYDEX 0.75% $ 286.18
SERIES FUNDS
S&P MidCap 400 Pure Growth Fund, a series of Rydex 0.75% $ 61.75
Variable Trust
Rydex S&P MidCap 400 Pure Growth ETF, a series of Rydex 0.35% $ 670.63
ETF Trust
S&P MIDCAP 400 PURE VALUE FUND, A SERIES OF RYDEX 0.75% $ 61.56
SERIES FUNDS
S&P MidCap 400 Pure Value Fund, a series of Rydex 0.75% $ 24.09
Variable Trust
Rydex S&P MidCap 400 Pure Value ETF, a series of Rydex 0.35% $ 60.16
ETF Trust
S&P SMALLCAP 600 PURE GROWTH FUND, A SERIES OF RYDEX 0.75% $ 145.49
SERIES FUNDS
S&P SmallCap 600 Pure Growth Fund, a series of Rydex 0.75% $ 32.10
Variable Trust
Rydex S&P SmallCap 600 Pure Growth ETF, a series of 0.35% $ 35.19
Rydex ETF Trust
S&P SMALLCAP 600 PURE VALUE FUND, A SERIES OF RYDEX 0.75% $ 26.90
SERIES FUNDs
S&P SmallCap 600 Pure Value Fund, a series of Rydex 0.75% $ 17.31
Variable Trust
Rydex S&P SmallCap 600 Pure Value ETF, a series of Rydex 0.35% $ 90.18
ETF Trust
STRENGTHENING DOLLAR 2x STRATEGY FUND, A SERIES OF RYDEX 0.90% $ 26.71
SERIES FUNDS
Strengthening Dollar 2x Strategy Fund, a series of Rydex 0.90% $ 2.77
Variable Trust
TECHNOLOGY FUND, A SERIES OF RYDEX SERIES FUNDS 0.85% $ 82.93
Technology Fund, a series of Rydex Variable Trust 0.85% $ 19.90
TELECOMMUNICATIONS FUND, A SERIES OF RYDEX SERIES FUNDS 0.85% $ 12.85
E-6
ANNUAL COMPENSATION TO
THE INVESTMENT ADVISER
NAME OF FUND SUBJECT TO THIS PROXY STATEMENT (AS A PERCENTAGE OF AVERAGE DAILY
Name(s) of Other Fund(s) with Similar Objectives NET ASSETS) NET ASSETS (IN MILLIONS)
-----------------------------------------------------------------------------------------------------------------------------------
Telecommunications Fund, a series of Rydex Variable Trust 0.85% $ 5.76
TRANSPORTATION FUND, A SERIES OF RYDEX SERIES FUNDS 0.85% $ 15.35
Transportation Fund, a series of Rydex Variable Trust 0.85% $ 7.81
U.S. GOVERNMENT MONEY MARKET FUND, A SERIES OF RYDEX 0.50% $ 868.15
SERIES FUNDS
U.S. Government Money Market Fund, a series of Rydex 0.50% $ 162.92
Variable Trust
U.S. LONG SHORT MOMENTUM FUND, A SERIES OF RYDEX 0.90% $ 164.99
SERIES FUNDS
U.S. Long Short Momentum Fund, a series of Rydex Variable 0.90% $ 53.25
Trust
UTILITIES FUND, A SERIES OF RYDEX SERIES FUNDS 0.85% $ 21.87
Utilities Fund, a series of Rydex Variable Trust 0.85% $ 14.74
WEAKENING DOLLAR 2x STRATEGY FUND, A SERIES OF RYDEX 0.90% $ 38.23
SERIES FUNDS
Weakening Dollar 2x Strategy Fund, a series of Rydex 0.90% $ 6.05
Variable Trust
The Investment Adviser did not reduce or waive its investment advisory fees for
the period indicated.
_________________________
1 The Fund invests primarily in underlying funds (the "Underlying Funds").
The Investment Adviser receives an investment advisory fee for managing
the Underlying Funds. The Underlying Funds pay a monthly investment
advisory fee to the Investment Adviser for its services. The fee is based
on the average net daily assets of each Underlying Fund and calculated at
an annual rate for each Underlying Fund. For more information regarding
the Underlying funds' investment advisory fees and expense limitations,
please see the Prospectus and applicable sections of the Statement of
Additional Information. The Funds benefit from the investment advisory
services provided to the Underlying Funds and, as shareholders of those
Underlying Funds, indirectly bear a proportionate share of those
Underlying Funds' advisory fees.
2 The Fund may invest in a wholly-owned and controlled Cayman Islands
subsidiary (the "Subsidiary"). The Subsidiary has entered into a separate
advisory agreement with the Investment Adviser for the management of the
Subsidiary's portfolio pursuant to which the Subsidiary pays the
Investment Adviser a management fee at the same rate that the Fund pays
the Investment Adviser for services provided to the Fund. The Investment
Adviser has contractually agreed to waive the management fee it receives
from the Fund in an amount equal to the management fee paid to the
Investment Adviser by the Subsidiary. This undertaking will continue in
effect for so long as the Fund invests in the Subsidiary, and may not be
terminated by the Investment Adviser unless the Investment Adviser first
obtains the prior approval of the Fund's Board of Trustees for such
termination. The management fees included in the table reflect the net
management fees paid to the Investment Adviser by the Fund after the fee
waiver.
E-7
APPENDIX F
FORM OF NEW SUB-ADVISORY AGREEMENT WITH
AMERICAN INDEPENDENCE FINANCIAL SERVICES, LLC
AGREEMENT made this [ ] day of [ ], 2011 by and between Security Investors, LLC
("Adviser") and American Independence Financial Services, LLC (the
"Sub-Adviser");
WHEREAS, the Rydex Series Funds (the "Trust"), a Delaware statutory trust, is an
open-end, management investment company registered under the Investment Company
Act of 1940, as amended ("1940 Act"), consisting of several series, including
the Long Short Interest Rate Strategy Fund (the "Fund"), each having its own
investment policies; and
WHEREAS, the Trust has retained the Adviser to provide the Trust with business
and asset management services, subject to the control of the Trust's Board of
Trustees;
WHEREAS, the Trust's agreement with the Adviser permits the Adviser to delegate
to other parties certain of its asset management responsibilities; and
WHEREAS, the Adviser desires to retain the Sub-Adviser to render certain
research and investment management services to the Fund, and the Sub-Adviser
desires to render such services;
NOW THEREFORE, in consideration of mutual covenants herein contained, the
parties hereto agree as follows:
1. (a) Duties of Sub-Adviser. The Adviser hereby retains the Sub-Adviser
to act as research provider for and to provide certain investment advice for the
management of the assets of the Fund, subject to the supervision of the Adviser
and the Fund's Board of Trustees (the "Board") and subject to the terms of this
Agreement. The Sub-Adviser hereby accepts such employment. In such capacity, the
Sub-Adviser shall be responsible for the duties defined below.
(i) The Sub-Adviser agrees to construct and provide the Adviser
with the Long Short Treasury Strategy model in an electronic signal, forwarded
to the Adviser on such intervals as determined by the Sub-Adviser (the
"Signal"). The signal shall contain such information necessary for the Adviser
to implement the Fund's strategy. Each Signal shall be delivered to the Adviser
via electronic mail or such other form of communication as the parties mutually
agree.
(ii) The Sub-Adviser shall continuously monitor the performance of
the Long Short Strategy model (the "Model") and will advise the Adviser of any
necessary updates to the Model via a Signal.
(iii) The Sub-Adviser will make available its officers and
employees to meet with the Board at the Trust's principal place of business once
each calendar year, on due notice to the Sub-Adviser, to review the
Sub-Adviser's advice.
F-1
(iv) The Sub-Adviser will maintain all books and records required
to be maintained pursuant to the Investment Company Act of 1940 and the rules
and regulations promulgated thereunder and shall timely furnish to the Adviser
all information relating to the Sub-Adviser's services hereunder as reasonably
requested by the Adviser. The Sub-Adviser further agrees that all books and
records maintained hereunder, including those maintained in electronic formats,
shall be made available to the Trust or the Adviser upon reasonable request and
notice.
(v) In all matters relating to the performance of this Agreement,
the Sub-Adviser and its members, officers, partners, employees and interested
persons shall act in all material respects in conformity with the Trust's
Agreement and Declaration of Trust, By-Laws, and currently effective
registration statement, and with the written instructions and directions of the
Board and the Adviser, after receipt of such documents from the Trust, and shall
comply in all material respects with the requirements of the 1940 Act, the
Investment Advisers Act, the Commodity Exchange Act (the "CEA"), the rules
thereunder, and all other applicable federal and state laws and regulations.
In carrying out its obligations under this Agreement, the Sub-Adviser
shall seek to ensure that, the Fund complies with all applicable statutes and
regulations necessary to qualify the Fund as a Regulated Investment Company
under Subchapter M of the Code (or any successor provision).
(vi) The Sub-Adviser agrees to cooperate with the Adviser and the
Fund and the Trust's officers and Trustees, including the Trust's Chief
Compliance Officer ("CCO"), with respect to (i) compliance-related matters
related to its responsibilities under this Agreement, and (ii) the Trust's
reasonable efforts to assure that each of its service providers adopts and
maintains policies and procedures that are reasonably designed to prevent
violation of the Federal Securities Laws (as that term is defined by Rule 38a-1
under the 1940 Act).
(vii) The Sub-Adviser agrees to cooperate in such marketing efforts
of the Fund, as reasonably requested by the Adviser.
(b) Duties of the Adviser.
----------------------
(i) During the term of this Agreement, the Adviser agrees to
furnish the Sub-Adviser at the Sub-Adviser's principal office all materials,
including registration statements, proxy statements, reports to stockholders,
sales literature or other materials prepared for distribution to shareholders of
the Fund or the public, that refer to the Sub-Adviser for Sub-Adviser's review
and approval. The Sub-Adviser shall be deemed to have approved any such
materials after 10 business days. The Adviser agrees to use its best efforts to
ensure that materials prepared by its employees or agents or its affiliates that
refer to the Sub-Adviser or its clients in any way are consistent with those
materials previously approved by the Sub-Adviser. Sales literature may be
furnished to the Sub-Adviser by first class or overnight mail, facsimile
transmission equipment, email, or hand delivery.
(ii) The Adviser has furnished the Sub-Adviser with copies of each
of the following documents and will furnish the Sub-Adviser at its principal
office all future amendments and supplements to such documents, if any, as soon
as practicable after such documents become available: (i) the Trust's Agreement
and Declaration of Trust, (ii) the Trust's By-Laws, (iii) the Fund's
registration statement under the 1940 Act and the Securities Act as filed with
the Securities and Exchange Commission (the "Commission"), and (iv) any written
instructions of the Trust's Board or the Adviser.
F-2
2. Compensation of the Sub-Adviser. For the services to be rendered by
the Sub-Adviser as provided in Section 1(a) of this Agreement, the Adviser shall
pay to the Sub-Adviser compensation at the rate specified in Schedule A attached
hereto and made a part of this Agreement. Such compensation shall be paid to the
Sub-Adviser quarterly in arrears. For purposes of calculating the compensation
to be paid hereunder, the value of the net assets of the Fund shall be computed
in the same manner at the end of the business day as the value of such net
assets is computed in connection with the determination of the net asset value
of the Fund's shares as described in the then current prospectus for the Fund.
The Sub-Adviser's compensation shall be accrued for each calendar day the
Sub-Adviser renders investment advisory services hereunder and the sum of the
daily fee accruals shall be paid quarterly to the Sub-Adviser as soon as
practicable following the last day of each calendar quarter, by wire transfer if
so requested by the Sub-Adviser, but no later than ten (10) calendar days
thereafter. If this Agreement shall be effective for only a portion of a
quarter, then the Sub-Adviser's fee for said quarter shall be prorated for such
portion.
3. Expenses. The Sub-Adviser shall bear all expenses incurred by it in
connection with its services under this Agreement and may, from time to time, at
its sole expense, employ or associate itself with such persons as it believes to
be fitted to assist it in the execution of its duties hereunder.
4. Status of Sub-Adviser. The services of the Sub-Adviser to the Trust
are not to be deemed exclusive, and the Sub-Adviser and its directors, officers,
employees and affiliates shall be free to render investment advisory and
administrative or other services to others (including other investment
companies) and to engage in other activities so long as its services to the
Trust are not impaired thereby. The Adviser understands that the Sub-Adviser
provides investment advisory services to numerous other funds and accounts. The
Sub-Adviser shall be deemed to be an independent contractor and shall, unless
otherwise expressly provided or authorized, have no authority to act for or
represent the Adviser or the Trust in any way or otherwise be deemed an agent of
the Adviser or the Trust.
5. Representations and Warranties of Sub-Adviser. The Sub-Adviser
represents and warrants to the Adviser and the Trust as follows:
(a) The Sub-Adviser is registered with the Commission as an
investment adviser under the Investment Advisers Act;
(b) The Sub-Adviser will immediately notify the Adviser of the
occurrence of any event that would disqualify the Sub-Adviser from serving
as an investment adviser of an investment company pursuant to Section 9(a)
of the 1940 Act;
(c) The execution, delivery and performance by the Sub-Adviser of
this Agreement are within the Sub-Adviser's powers and have been duly
authorized by all necessary action on the part of its members, and no
action by or in respect of, or filing with, any governmental body, agency
or official is required on the part of the Sub-Adviser for the execution,
delivery and performance by the Sub-Adviser of this Agreement, and the
execution, delivery and performance by the Sub-Adviser of this Agreement
do not contravene or constitute a default under (i) any provision of
applicable law, rule or regulation, (ii) the Sub-Adviser's governing
instruments, or (iii) any agreement, judgment, injunction, order, decree
or other instrument binding upon the Sub-Adviser;
F-3
(d) The Sub-Adviser has filed a notice of exemption pursuant to Rule
4.14 under the CEA with the Commodity Futures Trading Commission (the
"CFTC") and the National Futures Association (the "NFA");
(e) This Agreement is a valid and binding agreement of the Sub-
Adviser;
(f) The Form ADV of the Sub-Adviser previously provided to the
Adviser is a true and complete copy of the form as filed with the
Commission and the information contained therein is accurate and complete
in all material respects as of its filing date, and does not omit to state
any material fact necessary in order to make the statements made, in light
of the circumstances under which they were made, not misleading; and
(g) The Sub-Adviser has implemented and shall maintain a compliance
program in accordance with the requirements of Rule 206(4)-7 under the
Advisers Act.
6. Representations and Warranties of Adviser. The Adviser represents
and warrants to the Sub-Adviser as follows:
(a) The Adviser is registered with the Commission as an investment
adviser under the Investment Advisers Act;
(b) The Adviser has filed a notice of exemption pursuant to Rule 4.14
under the CEA with the CFTC and the NFA;
(c) The execution, delivery and performance by the Adviser of this
Agreement and the Advisory Agreement are within the Adviser's powers and have
been duly authorized by all necessary action on the part of its members, and no
action by or in respect of, or filing with, any governmental body, agency or
official is required on the part of the Adviser for the execution, delivery and
performance by the Adviser of this Agreement, and the execution, delivery and
performance by the Adviser of this Agreement do not contravene or constitute a
default under (i) any provision of applicable law, rule or regulation, (ii) the
Adviser's governing instruments, or (iii) any agreement, judgment, injunction,
order, decree or other instrument binding upon the Adviser;
(d) The Form ADV of the Adviser previously provided to the Sub-
Adviser is a true and complete copy of the form filed with the Commission and
the information contained therein is accurate and complete in all material
respects as of its filing date and does not omit to state any material fact
necessary in order to make the statements made, in light of the circumstances
under which they were made, not misleading;
(e) This Agreement and the Advisory Agreement are valid and binding
agreements of the Adviser; and
(f) The Adviser acknowledges that it received a copy of the Sub-
Adviser's Form ADV at least 48 hours prior to the execution of this Agreement
7. Survival of Representations and Warranties; Duty to Update
Information. All representations and warranties made by the Sub-Adviser and the
Adviser pursuant to Sections 5 and 6
F-4
hereof shall survive for the duration of this Agreement and either party hereto
shall promptly notify the other in writing upon becoming aware that any of their
foregoing representations or warranties is no longer true.
8. Liability of Sub-Adviser. No provision of this Agreement shall be
deemed to protect the Sub-Adviser against any liability to the Trust or its
shareholders to which it might otherwise be subject by reason of any willful
misfeasance, bad faith, or gross negligence in the performance of its duties or
the reckless disregard of its obligations under this Agreement. In the absence
of willful misfeasance, bad faith or gross negligence on the part of the
Sub-Adviser or reckless disregard of the Sub-Adviser's obligations and duties
hereunder, the Sub-Adviser shall not be subject to any liability to the Adviser,
to the Fund or the Trust, or any of the Fund's shareholders, for any act or
omission in the case of, or connected with, rendering services hereunder.
9. Indemnification. The Sub-Adviser shall indemnify the Adviser and the
Trust, and their respective officers and trustees, for any liability and
expenses, including reasonable attorneys' fees, which may be sustained as a
result of the Sub-Adviser's willful misfeasance, bad faith or gross negligence,
or the reckless disregard of the Sub-Adviser's obligations and duties hereunder.
The Adviser shall indemnify the Sub-Adviser and its officers and members for any
liability and expenses, including reasonable attorneys' fees, which may be
sustained as a result of the Sub-Adviser's performance of its obligations
hereunder, except where such liability or expense results from the Sub-Adviser's
willful misfeasance, bad faith or gross negligence, or the reckless disregard of
the Sub-Adviser's obligations and duties hereunder.
10. Duration and Termination. This Agreement, unless sooner terminated as
provided herein, shall continue for two years after its initial approval and
thereafter for periods of one year for so long as such continuance thereafter is
specifically approved at least annually (a) by the vote of a majority of those
Trustees of the Trust who are not parties to this Agreement or interested
persons of any such party, cast in person at a meeting called for the purpose of
voting on such approval, and (b) by the Trustees of the Trust or by vote of a
majority of the outstanding voting securities of the Fund; provided, however,
that if the shareholders of the Fund fail to approve the Agreement as provided
herein, the Sub-Adviser may continue to serve hereunder in the manner and to the
extent permitted by the 1940 Act and rules thereunder. The foregoing requirement
that continuance of this Agreement be "specifically approved at least annually"
shall be construed in a manner consistent with the 1940 Act and the rules and
regulations thereunder.
This Agreement may be terminated at any time, without the payment of any
penalty, by the Adviser, by vote of a majority of the Trustees of the Trust or
by vote of a majority of the outstanding voting securities of the Fund on not
less than 30 days' nor more than 60 days' written notice to the Sub- Adviser, or
by the Sub-Adviser at any time without the payment of any penalty, on 60 days'
written notice to the Adviser and the Trust. This Agreement will automatically
and immediately terminate in the event of its assignment, or upon termination of
the investment advisory agreement between the Adviser and the Trust. Any notice
under this Agreement shall be given in writing, addressed and delivered, or
mailed postpaid, to the other party at the primary office of such party, unless
such party has previously designated another address.
As used in this Section 10, the terms "assignment," "interested persons,"
and a "vote of a majority of the outstanding voting securities" shall have the
respective meanings set forth in the 1940
F-5
Act and the rules and regulations thereunder, subject to such exemptions as may
be granted by the Commission under said Act.
11. Amendment. No provision of this Agreement may be changed, waived,
discharged, or terminated orally, but only by an instrument in writing signed by
the party against which enforcement of the change, waiver, discharge, or
termination is sought, and, no amendment of this Agreement shall be effective
until approved by the Board and, solely to the extent required by the 1940 Act,
regulations thereunder and/or interpretations thereof, the shareholders of the
Fund.
12. Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of Delaware, without regard to its
conflicts of law provisions, and the 1940 Act. To the extent that the applicable
laws of the State of Delaware conflict with the applicable provisions of the
1940 Act, the latter shall control.
13. Counterparts. This Agreement may be executed in one or more
counterparts, all of which shall together constitute one and the same
instrument.
14. Captions. The captions herein are included for convenience of
reference only and shall be ignored in the construction or interpretation
hereof.
15. Severability. If any provision of this Agreement shall be held or
made invalid by a court decision, statute, rule or otherwise, the remainder of
this Agreement shall not be affected thereby.
16. Confidentiality.
----------------
(a) Each party agrees that it will treat confidentially all
information provided by the other party regarding such other party's
businesses and operations, including without limitation the investment
activities or holdings of the Fund ("Confidential Information"). All
Confidential Information provided by a party hereto shall be used only by
the other party hereto solely for the purposes of rendering services
pursuant to this Agreement, and shall not be disclosed to any third party
without the prior consent of the providing party, except for any party
that is under common control and except for a limited number of employees,
attorneys, accountants and other advisers of the party receiving the
information on a need-to-know basis and solely for the purposes of
rendering services under this Agreement.
(b) The foregoing Confidential Information shall not include any
information that: (i) is public when provided or thereafter becomes public
through no wrongful act of the recipient; (ii) is demonstrably known to
the recipient prior to execution of this Agreement; (iii) is independently
developed by the recipient through no wrongful act of the recipient in the
ordinary course of business outside of this Agreement; (iv) is generally
employed by the trade at the time that recipient learns of such
information or knowledge, (v) has been rightfully and lawfully obtained by
recipient from any third party; or (vi) is legally compelled to be
disclosed by any regulatory authority in the lawful and appropriate
exercise of its jurisdiction over a party, by any auditor of the parties
hereto, by judicial or administrative process or otherwise by applicable
laws, rules or regulations.
(c) It is understood that any information or recommendation supplied
by, or produced by, the Sub-Adviser in connection with the performance of
its obligations hereunder is to be regarded by
F-6
the Adviser and the Trust as confidential and for use only by the Adviser
and the Fund. Furthermore, except as required by law (including, but not
limited to semi-annual, annual or other filings made under the 1940 Act)
or as agreed to by the Adviser and the Sub-Adviser, the Adviser and the
Trust will not disclose, in any manner whatsoever except as expressly
authorized in this Agreement, any list of securities held by the Fund for
a period of at least 30 days after month end, except that the Fund's top
10 holdings may be disclosed 30 days after month end. In addition, the
Adviser or the Trust may disclose, earlier than 30 days after month end, a
list of the securities held by the Fund to certain third parties who have
entered into a confidentiality agreement with the Trust.
A copy of the Declaration of Trust of the Trust is on file with the Secretary of
the State of Delaware, and notice is hereby given that this instrument is not
binding upon any of the Trustees, officers, or shareholders of the Trust
individually.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
as of the day and year first written above.
SECURITY INVESTORS, LLC
By: _______________________________________
Name: Richard Goldman
Title: President
Attest: _______________________________________
Name: Michael Byrum
Title: Secretary
AMERICAN INDEPENDENCE FINANCIAL SERVICES, LLC
By: _______________________________________
Name:
Title: President
Attest: _______________________________________
Name:
Title: Secretary
F-7
SCHEDULE A
TO THE
SUB-ADVISER AGREEMENT
BETWEEN
SECURITY INVESTORS, LLC
AND
AMERICAN INDEPENDENCE FINANCIAL SERVICES, LLC
FOR THE
LONG SHORT INTEREST RATE STRATEGY FUND
The Adviser shall pay compensation to the Sub-Adviser pursuant to section 2 of
the Sub-Adviser Agreement between said parties in accordance with the following
annual percentage rate:
Long Short Interest Rate Strategy Fund: 0.20% per annum (net of waivers and
reimbursements)
DATED: [ ]
F-8
APPENDIX G
INFORMATION REGARDING THE SUB-ADVISORY AGREEMENT WITH AMERICAN
INDEPENDENCE FINANCIAL SERVICES, LLC AND FEES PAID TO THE SUB-ADVISER
American Independence Financial Services, LLC (the "Sub-Adviser")
currently serves as sub-adviser to the Long Short Interest Rate Strategy Fund,
a series of Rydex Series Funds (the "Fund"), pursuant to the investment
sub-advisory agreement between Security Investors, LLC, the Fund's investment
adviser (the "Investment Adviser"), and the Sub-Adviser. The table below
provides the following information:
(i) the date of the Sub-Advisory Agreement;
(ii) the date on which the Fund's shareholders last approved the Fund's
Sub-Advisory Agreement;
(iii) the annual rate of sub-advisory fees paid by the Investment Adviser
to the Sub-Adviser for the Sub-Adviser's sub-advisory services to the
Fund; and
(iv) the aggregate amount of advisory fees paid by the Investment Adviser
to the Sub-Adviser for the Sub-Adviser's sub-advisory services to the
Fund during the Fund's fiscal year ended December 31, 2010.
DATE OF DATE OF LAST SUB-ADVISORY
SUB-ADVISORY SHAREHOLDER SUB-ADVISORY FEES PAID TO
FUND AGREEMENT APPROVAL FEES SUB-ADVISER
--------------------------------------------------------------------------------------------------------------------
Long Short Interest Rate Strategy Fund 8/1/2010 6/30/2010 0.20% $24,193.83
G-1
APPENDIX H
DIRECTORS/TRUSTEES/MANAGERS AND OFFICERS OF AMERICAN INDEPENDENCE
FINANCIAL SERVICES, LLC
MANAGERS AND PRINCIPAL EXECUTIVE OFFICERS OF AMERICAN INDEPENDENCE
FINANCIAL SERVICES, LLC. The business address of the managers and principal
executive officers is 335 Madison Avenue, Mezzanine, New York, New York
10017.
POSITION HELD WITH AMERICAN OTHER PRINCIPAL
NAME INDEPENDENCE FINANCIAL SERVICES, LLC OCCUPATION/POSITION
-----------------------------------------------------------------------------------------
Theresa C. Donavan Chief Compliance Officer None
Robert A. Campbell Vice President None
T. Kirkham Barneby Chief Strategist and Portfolio Manager None
Emil A. Polito Senior Executive Director - Global Wealth None
Management & Management & Strategic
Development
Jeffrey A. Miller President of Value Equities None
Eric M. Rubin President None
John J. Pileggi Managing Partner None
There are no Trustees/Officers of the Fund who hold position(s) with American
Independence Financial Services, LLC.
H-1
APPENDIX I
ADVISORY FEE RATES OF FUNDS WITH SIMILAR INVESTMENT OBJECTIVES
ADVISED BY AMERICAN INDEPENDENCE FINANCIAL SERVICES, LLC
Each of the tables below lists the names of other mutual funds advised or
sub-advised by American Independence Financial Services, LLC ("AIFS") with
similar investment objectives as the Long Short Interest Rate Strategy Fund (the
"Fund"), and information concerning the Fund's and such other funds' net assets
and the rate of compensation for AIFS for its services to the Fund and such
other funds.
ANNUAL
COMPENSATION
TO AIFS (AS A
PERCENTAGE OF
NAME OF FUND SUBJECT TO THIS PROXY STATEMENT AVERAGE DAILY NET ASSETS
Name(s) of Other Fund(s) with Similar Objectives NET ASSETS) (IN MILLIONS)
--------------------------------------------------------------------------------------------
LONG SHORT INTEREST RATE STRATEGY FUND, A SERIES OF 0.20% $ 164.3
RYDEX SERIES FUNDS
American Independence Bull Bear Fund 0.50% $ 40
I-1
APPENDIX J
OUTSTANDING SHARES
AS of the Record Date, the total number of shares outstanding for each Fund
is set forth in the table below:
RYDEX DYNAMIC FUNDS:
SHARES OUTSTANDING
--------------------------------------------------------
FUND A-CLASS C-CLASS H-CLASS TOTAL
-----------------------------------------------------------------------------------------------------
Dow 2x Strategy Fund 164096.86 112275.19 2083705.60 2360077.65
Inverse Dow 2x Strategy Fund 86420.89 107457.64 914812.17 1108690.70
Inverse NASDAQ-100(R) 2x Strategy Fund 272844.85 1323731.19 12832225.16 14428801.21
Inverse Russell 2000(R) 2x Strategy Fund 258674.34 418113.66 7478720.27 8155508.28
Inverse S&P 500 2x Strategy Fund 655597.86 739626.77 10314628.16 11709852.78
NASDAQ-100(R) 2x Strategy Fund 38434.95 127602.60 1167481.86 1333519.41
Russell 2000(R) 2x Strategy Fund 17680.02 9174.02 217262.17 244116.21
S&P 500 2x Strategy Fund 285173.27 559776.46 3346872.82 4191822.55
RYDEX SERIES FUNDS
(U.S. Government Money Market Fund)
SHARES OUTSTANDING
----------------------------------------------------------------------------------------------------------
A-CLASS C-CLASS ADVISOR CLASS INVESTOR CLASS INVESTOR 2 CLASS TOTAL
----------------------------------------------------------------------------------------------------------
39738256.99 59746372.03 891585341.87 903067385.84 43697786.78 1937835143.51
----------------------------------------------------------------------------------------------------------
RYDEX SERIES FUNDS
(Alternative Strategies Fund, Event Driven and Distressed Strategies Fund, Long/
Short Commodities Strategy Fund, Long Short Equity Strategy Fund, Long Short
Internet Rate Strategy Fund, Managed Futures Strategy Fund and Multi-Hedge
Strategies Fund)
SHARES OUTSTANDING
--------------------------------------------------------------------------------------------------------------------------
FUND A-CLASS C-CLASS H-CLASS INSTITUTIONAL CLASS Y-CLASS TOTAL
--------------------------------------------------------------------------------------------------------------------------
Alternative Strategies Fund 92359.15 5891.43 48258.24 1200.04 N/A 147708.86
Event Driven and Distressed
Strategies Fund 287658.17 50175.81 291364.55 8709.28 N/A 637907.82
Long/Short Commodities
Strategy Fund 4288980.36 1345884.97 8653108.77 1150530.09 416.50 15438920.69
Long Short Equity Strategy Fund 146197.16 8176.97 70746.15 4597.85 N/A 229718.14
Long Short Internet Rate
Strategy Fund 1674985.73 743652.32 1476097.38 1605970.54 N/A 5500705.97
Managed Futures Strategy Fund 26793857.75 4780573.64 41435734.15 4407577.20 16398546.17 93816288.91
Multi-Hedge Strategies Fund 602237.90 502361.70 1234933.79 13189.67 N/A 2352723.06
RYDEX SERIES FUNDS
(all other series)
SHARES OUTSTANDING
-------------------------------------------------------------------------------
FUND A-CLASS C-CLASS H-CLASS ADVISOR CLASS INVESTOR CLASS TOTAL
------------------------------------------------------------------------------------------------------------------------
All-Asset Aggressive Strategy Fund 396055.89 623882.79 219022.77 N/A N/A 1238961.44
All-Asset Conservative Strategy Fund 289327.02 758275.26 248796.21 N/A N/A 1296398.50
All-Asset Moderate Strategy Fund 711533.99 1437720.89 367567.98 N/A N/A 2516822.86
Alternative Strategies Fund 92359.15 5891.43 48258.24 N/A N/A 147708.86
Alternative Strategies Allocation Fund 108405.06 159641.92 580754.01 N/A N/A 848801.00
Banking Fund 36919.88 47193.87 N/A 6076.37 89063.52 179253.64
J-1
SHARES OUTSTANDING
------------------------------------------------------------------------------------
FUND A-CLASS C-CLASS H-CLASS ADVISOR CLASS INVESTOR CLASS TOTAL
-------------------------------------------------------------------------------------------------------------------------
Basic Materials Fund 280326.95 212175.96 N/A 76692.57 820513.89 1389709.37
Biotechnology Fund 311846.72 171718.91 N/A 156873.85 1876837.45 2517276.92
Commodities Strategy Fund 403171.81 246555.71 1059085.28 N/A N/A 1708812.80
Consumer Products Fund 399047.14 158234.50 N/A 180446.64 2447517.06 3185245.35
Electronics Fund 17846.45 8038.18 N/A 32883.02 114883.55 173651.20
Emerging Markets 2x Strategy Fund 1613.17 1539.72 187835.56 N/A N/A 190988.45
Energy Fund 241597.13 656760.66 N/A 230181.70 1555338.66 2683878.16
Energy Services Fund 164708.96 251659.97 N/A 146285.57 719277.53 1281932.03
Europe 1.25x Strategies Fund 19536.68 66460.20 451496.23 N/A N/A 537493.11
Event Driven and Distressed
Strategies Fund 287658.17 50175.81 291364.55 N/A N/A 637907.82
Financial Services Fund 11082.79 13682.58 N/A 11155.30 62317.85 98238.53]
Government Long Bond 1.2x
Strategy Fund 375008.69 473245.26 N/A 8891235.17 5825881.06 15565370.17
Health Care Fund 134866.46 291654.44 N/A 208820.46 942985.64 1578326.99
High Yield Strategy Fund 614822.70 351001.47 309546.66 0.00 N/A 1275370.82
Internet Fund 19801.84 15560.97 N/A 20485.19 217091.54 272939.55
Inverse Emerging Markets 2x
Strategy Fund 13977.73 8225.43 74237.45 N/A N/A 96440.61
Inverse Government Long Bond
Strategy Fund 5084252.73 8928123.54 N/A 1931473.69 23831356.80 39775206.76
Inverse High Yield Strategy Fund 129406.30 24021.97 1233912.56 N/A N/A 1387340.84
Inverse Mid-Cap Strategy Fund 9120.31 21314.00 429895.70 N/A N/A 460330.01
Inverse NASDAQ-100(R) Strategy
Fund 59436.23 94658.93 N/A 249134.72 1407692.42 1810922.30
Inverse Russell 2000(R)
Strategy Fund 50793.19 98676.88 2201972.40 N/A N/A 2351442.47
Inverse S&P 500 Strategy Fund 380960.85 458733.46 N/A 678771.50 10546670.15 12065135.95
Japan 2x Strategy Fund 91352.42 10196.94 157470.05 N/A N/A 259019.41
Leisure Fund 15174.94 10764.39 N/A 21711.39 54454.12 102104.84
Long/Short Commodities Strategy
Fund 4288980.36 1345884.97 8653108.77 N/A N/A 15438920.69
Long Short Equity Strategy Fund 146197.16 8176.97 70746.15 N/A N/A 229718.14
Long Short Internet Rate
Strategy Fund 1674985.73 743652.32 1476097.38 N/A N/A 5500705.97
Managed Futures Strategy Fund 26793857.75 4780573.64 41435734.15 N/A N/A 93816288.91
Mid-Cap 1.5x Strategy Fund 27504.74 201502.76 314552.56 N/A N/A 543560.06
Multi-Hedge Strategies Fund 602237.90 502361.70 1234933.79 N/A N/A 2352723.06
NASDAQ-100(R) Fund 551786.88 935611.51 N/A 829911.60 36370855.82 38688165.81
Nova Fund 58566.78 401117.18 N/A 165815.72 1405757.86 2031257.55
Precious Metals Fund 114038.38 451475.28 N/A 364939.94 1162336.92 2092790.52
Real Estate Fund 127113.21 49453.11 267101.00 N/A N/A 443667.32
Retailing Fund 22424.00 86785.48 N/A 93683.39 555928.88 758821.74
Russell 2000(R) 1.5x Strategy Fund 17210.87 70841.75 279982.12 N/A N/A 368034.75
Russell 2000(R) Fund 200201.03 286923.39 1552699.05 N/A N/A 2039823.47
S&P 500 Fund 14063.74 55834.43 174903.94 N/A N/A 244802.10
S&P 500 Pure Growth Fund 1053426.87 302269.10 4596145.74 N/A N/A 5951841.71
S&P 500 Pure Value Fund 21549.82 59692.58 185743.58 N/A N/A 266985.98
S&P MidCap 400 Pure Growth Fund 279932.63 78792.99 264782.93 N/A N/A 623508.55
S&P MidCap 400 Pure Value Fund 40945.18 120733.18 322832.99 N/A N/A 484511.35
S&P SmallCap 600 Pure Growth Fund 1353596.15 281133.57 4735864.31 N/A N/A 6370594.03
S&P SmallCap 600 Pure Value Fund 90875.64 208600.79 N/A 151627.70 589245.87 1040350.00
Strengthening Dollar 2x Strategy
Fund 45890.87 122969.48 N/A 16793.34 165391.21 351044.90
Technology Fund 65990.01 38562.60 N/A 17491.80 136937.66 258982.08
Telecommunications Fund 215925.30 251777.20 N/A 132378.28 2384919.96 2985000.74
Transportation Fund 1548099.29 3209315.76 5210710.57 N/A N/A 9968125.61
Utilities Fund 269217.04 146827.13 832627.81 N/A N/A 1248671.98
U.S. Long Short Momentum Fund 396055.89 623882.79 219022.77 N/A N/A 1238961.44
Weakening Dollar 2x Strategy Fund 289327.02 758275.26 248796.21 N/A N/A 1296398.50
J-2
APPENDIX K
BENEFICIAL OWNERS OF MORE THAN 5% OF A CLASS OF EACH FUND
As of the Record Date, the following persons owned, of record and
beneficially (unless otherwise indicated), 5% or more* of a class of each Fund's
outstanding securities:
RYDEX DYNAMIC FUNDS
PERCENTAGE
AMOUNT OF OF THE
NAME OF THE FUND SHARE CLASS SHARES OWNED CLASS NAME AND ADDRESS OF THE BENEFICIAL OWNER
---------------------------------------------------------------------------------------------------------------------------------
Dow 2x Strategy Fund Class A 54,640.05 33.30% FIRST CLEARING, LLC
2801 MARKET STREET
SAINT LOUIS, MO 63115
Dow 2x Strategy Fund Class A 38,267.76 23.30% PERSHING LLC
P. O. BOX 2052
JERSEY CITY, NJ 07303-10091
Dow 2x Strategy Fund Class A 15,008.51 9.14% LPL FINANCIAL
9785 TOWNE CENTRE DRIVE
SAN DIEGO CA 92121-1996
Dow 2x Strategy Fund Class A 12,852.98 7.85% AMERITRADE INC
PO BOX 2226
OMAHA NE 68103-2233
Dow 2x Strategy Fund Class C 16,821.54 14.99% LPL FINANCIAL
9785 TOWNE CENTRE DRIVE
SAN DIEGO CA 92121-1999
Dow 2x Strategy Fund Class C 16,296.72 14.52% AMERICAN ENTERPRISE INV SVCS
707 2ND AVENUE SOUTH
MINNEAPOLIS, MN 55403
Dow 2x Strategy Fund Class C 14,190.20 12.64% PERSHING LLC
P. O. BOX 2052
JERSEY CITY, NJ 07303-10105
Dow 2x Strategy Fund Class C 13,479.96 12.01% FIRST CLEARING, LLC
2801 MARKET STREET
SAINT LOUIS, MO 63116
Dow 2x Strategy Fund Class C 8,362.60 7.43% NFS LLC
PO BOX 1289
NORTH PLATTE, NE 69103
Dow 2x Strategy Fund Class C 6,247.18 5.57% UBS FINANCIAL SERVICES INC.
4822 HOLLADAY, NO 170
SALT LAKE CITY UT 84117-5469
Dow 2x Strategy Fund Class H 1,366,011.48 65.56% TD AMERITRADE INC.
PO BOX 2226
OMAHA, NE 68103-2247
Dow 2x Strategy Fund Class H 128,913.42 6.19% NATIONAL FINANCIAL SVCS CORP
200 LIBERTY STREET
NEW YORK, NY 10281-10071
Inverse Dow 2x Strategy Fund Class A 27,303.84 31.57% PERSHING LLC
P. O. BOX 2052
JERSEY CITY, NJ 07303-10092
Inverse Dow 2x Strategy Fund Class A 16,122.21 18.69% LPL FINANCIAL
9785 TOWNE CENTRE DRIVE
SAN DIEGO CA 92121-2000
Inverse Dow 2x Strategy Fund Class A 8,630.61 9.99% MITRA & CO
11270 W PARK PLACE STE 400
MILWAUKEE, WI 53224-3638
Inverse Dow 2x Strategy Fund Class A 8,096.98 9.39% NFS LLC
PO BOX 1289
NORTH PLATTE, NE 69106
Inverse Dow 2x Strategy Fund Class A 6,273.34 7.26% FIRST CLEARING, LLC
2801 MARKET STREET
SAINT LOUIS, MO 63116
Inverse Dow 2x Strategy Fund Class A 4,781.64 5.53% MORGAN STANLEY SMITH BARNEY
HARBORSIDE FINANCIAL CENTER
PLAZA 2, 3RD FLOOR
JERSEY CITY, NJ 07334
K-1
PERCENTAGE
AMOUNT OF OF THE
NAME OF THE FUND SHARE CLASS SHARES OWNED CLASS NAME AND ADDRESS OF THE BENEFICIAL OWNER
---------------------------------------------------------------------------------------------------------------------------------
Inverse Dow 2x Strategy Fund Class C 35,217.00 32.84% PERSHING LLC
P. O. BOX 2052
JERSEY CITY, NJ 07303-10093
Inverse Dow 2x Strategy Fund Class C 13,606.45 12.66% FIRST CLEARING, LLC
2801 MARKET STREET
SAINT LOUIS, MO 63117
Inverse Dow 2x Strategy Fund Class C 13,447.94 12.51% SCHWAB, SPECIAL CUSTODY ACCOUNT
ATTN: MUTUAL FUNDS TEAM E, 101
MONTGOMERY STREET
SAN FRANCISCO, CA 94104-4155
Inverse Dow 2x Strategy Fund Class C 10,834.90 10.08% NFS LLC
PO BOX 1289
NORTH PLATTE, NE 69113
Inverse Dow 2x Strategy Fund Class C 9,489.21 8.83% AMERITRADE INC
PO BOX 2226
OMAHA NE 68103-2238
Inverse Dow 2x Strategy Fund Class C 7,000.00 6.51% OPPENHEIMER & CO INC.
18908 MT CIMARRON ST
FOUNTAIN VALLEY CA 92705
Inverse Dow 2x Strategy Fund Class H 212,519.13 23.23% NATIONAL FINANCIAL SVCS CORP
200 LIBERTY STREET
NEW YORK, NY 10281-10072
Inverse Dow 2x Strategy Fund Class H 151,052.34 16.51% SCHWAB, SPECIAL CUSTODY ACCOUNT
ATTN: MUTUAL FUNDS TEAM E, 101
MONTGOMERY STREET
SAN FRANCISCO, CA 94104-4156
Inverse Dow 2x Strategy Fund Class H 52,850.57 5.80% PERSHING LLC
P. O. BOX 2052
JERSEY CITY, NJ 07303-10094
Inverse Dow 2x Strategy Fund Class H 49,675.18 5.43% TD AMERITRADE INC.
PO BOX 2226
OMAHA, NE 68103-2248
Inverse NASDAQ-100(R) 2x Strategy Fund Class A 68,150.20 24.98% PERSHING LLC
P. O. BOX 2052
JERSEY CITY, NJ 07303-10095
Inverse NASDAQ-100(R) 2x Strategy Fund Class A 52,311.30 19.17% MORGAN STANLEY SMITH BARNEY
HARBORSIDE FINANCIAL CENTER
PLAZA 2, 3RD FLOOR
JERSEY CITY, NJ 07335
Inverse NASDAQ-100(R) 2x Strategy Fund Class A 36,319.61 13.31% MITRA & CO
11270 W PARK PLACE STE 400
MILWAUKEE, WI 53224-3639
Inverse NASDAQ-100(R) 2x Strategy Fund Class A 30,292.73 11.09% LPL FINANCIAL
9785 TOWNE CENTRE DRIVE
SAN DIEGO CA 92121-1994
Inverse NASDAQ-100(R) 2x Strategy Fund Class A 23,685.29 8.68% FIRST CLEARING, LLC
2801 MARKET STREET
SAINT LOUIS, MO 63118
Inverse NASDAQ-100(R) 2x Strategy Fund Class A 15,022.64 5.51% AMERITRADE INC
PO BOX 2226
OMAHA NE 68103-2235
Inverse NASDAQ-100(R) 2x Strategy Fund Class C 230,786.74 17.44% DONALDSON LUFKIN JENRETTE, SECURITIES
CORPORATION INC.
P.O. BOX 2052
JERSEY CITY, NJ 07303
Inverse NASDAQ-100(R) 2x Strategy Fund Class C 180,367.46 13.63% FIRST CLEARING, LLC
22 PERWINKLE DRIVE
MOUNT LAUREL, NJ 08054
Inverse NASDAQ-100(R) 2x Strategy Fund Class C 91,870.69 6.94% MORGAN STANLEY SMITH BARNEY
HARBORSIDE FINANCIAL CENTER
PLAZA 2, 3RD FLOOR
JERSEY CITY, NJ 07336
Inverse NASDAQ-100(R) 2x Strategy Fund Class C 88,873.31 6.71% NFS LLC
PO BOX 1289
NORTH PLATTE, NE 69104
K-2
PERCENTAGE
AMOUNT OF OF THE
NAME OF THE FUND SHARE CLASS SHARES OWNED CLASS NAME AND ADDRESS OF THE BENEFICIAL OWNER
---------------------------------------------------------------------------------------------------------------------------------
Inverse NASDAQ-100(R) 2x Strategy Fund Class C 66,218.65 5.00% RAYMOND JAMES & ASSOC INC
PO BOX 1287
PASCAGOULA MS 39568-1287876
Inverse NASDAQ-100(R) 2x Strategy Fund Class H 2,685,148.99 20.93% NATIONAL FINANCIAL SVCS CORP
200 LIBERTY STREET
NEW YORK, NY 10281-10073
Inverse NASDAQ-100(R) 2x Strategy Fund Class H 1,523,994.66 11.88% SCHWAB, SPECIAL CUSTODY ACCOUNT
ATTN: MUTUAL FUNDS TEAM E, 101
MONTGOMERY STREET
SAN FRANCISCO, CA 94104-4157
Inverse NASDAQ-100(R) 2x Strategy Fund Class H 815,851.76 6.36% TD AMERITRADE INC.
PO BOX 2226
OMAHA, NE 68103-2249
Inverse Russell 2000(R) 2x Strategy Fund Class A 71,722.84 27.73% TRUST COMPANY OF AMERICA
P O BOX 6503
ENGLEWOOD, CO 80118
Inverse Russell 2000(R) 2x Strategy Fund Class A 38,484.57 14.87% PERSHING LLC
P. O. BOX 2052
JERSEY CITY, NJ 07303-10096
Inverse Russell 2000(R) 2x Strategy Fund Class A 37,235.61 14.39% NFS LLC
PO BOX 1289
NORTH PLATTE, NE 69110
Inverse Russell 2000(R) 2x Strategy Fund Class A 18,061.96 6.98% FIRST CLEARING, LLC
2801 MARKET STREET
SAINT LOUIS, MO 63119
Inverse Russell 2000(R) 2x Strategy Fund Class A 13,239.49 5.13% AMERITRADE INC
PO BOX 2226
OMAHA NE 68103-2236
Inverse Russell 2000(R) 2x Strategy Fund Class C 128,018.29 30.69% PERSHING LLC
P. O. BOX 2052
JERSEY CITY, NJ 07303-10097
Inverse Russell 2000(R) 2x Strategy Fund Class C 35,275.59 8.44% SCHWAB, SPECIAL CUSTODY ACCOUNT
ATTN: MUTUAL FUNDS TEAM E, 101
MONTGOMERY STREET
SAN FRANCISCO, CA 94104-4158
Inverse Russell 2000(R) 2x Strategy Fund Class C 34,594.67 8.31% LPL FINANCIAL
9785 TOWNE CENTRE DRIVE
SAN DIEGO CA 92121-1993
Inverse Russell 2000(R) 2x Strategy Fund Class C 29,537.80 7.07% NFS LLC
PO BOX 1289
NORTH PLATTE, NE 69109
Inverse Russell 2000(R) 2x Strategy Fund Class C 26,738.17 6.40% OPPENHEIMER & CO INC.
111 KIOWA LANE
MONROE LA 71203
Inverse Russell 2000(R) 2x Strategy Fund Class H 2,793,421.94 37.35% TD AMERITRADE INC.
PO BOX 2226
OMAHA, NE 68103-2250
Inverse Russell 2000(R) 2x Strategy Fund Class H 1,997,269.33 26.71% NATIONAL FINANCIAL SVCS CORP
200 LIBERTY STREET
NEW YORK, NY 10281-10074
Inverse S&P 500 2x Strategy Fund Class A 13,355.47 26.33% PERSHING LLC
P. O. BOX 2052
JERSEY CITY, NJ 07303-10098
Inverse S&P 500 2x Strategy Fund Class A 168,471.50 25.68% NFS LLC
PO BOX 1289
NORTH PLATTE, NE 69107
Inverse S&P 500 2x Strategy Fund Class A 130,635.56 19.84% AMERITRADE INC
PO BOX 2226
OMAHA NE 68103-2239
Inverse S&P 500 2x Strategy Fund Class A 88,592.97 13.51% FIRST CLEARING, LLC
2801 MARKET STREET
SAINT LOUIS, MO 63120
Inverse S&P 500 2x Strategy Fund Class A 71,713.26 10.94% LPL FINANCIAL
9785 TOWNE CENTRE DRIVE
SAN DIEGO CA 92121-1995
K-3
PERCENTAGE
AMOUNT OF OF THE
NAME OF THE FUND SHARE CLASS SHARES OWNED CLASS NAME AND ADDRESS OF THE BENEFICIAL OWNER
---------------------------------------------------------------------------------------------------------------------------------
Inverse S&P 500 2x Strategy Fund Class A 64,827.64 9.84% PERSHING LLC
P. O. BOX 2052
JERSEY CITY, NJ 07303-10099
Inverse S&P 500 2x Strategy Fund Class C 256,321.74 34.63% PERSHING LLC
P. O. BOX 2052
JERSEY CITY, NJ 07303-10100
Inverse S&P 500 2x Strategy Fund Class C 100,205.41 13.55% TRUST COMPANY OF AMERICA
P O BOX 6503
ENGLEWOOD, CO 80116
Inverse S&P 500 2x Strategy Fund Class C 84,077.94 11.33% NFS LLC
PO BOX 1289
NORTH PLATTE, NE 69105
Inverse S&P 500 2x Strategy Fund Class C 78,035.90 10.55% SCHWAB, SPECIAL CUSTODY ACCOUNT
ATTN: MUTUAL FUNDS TEAM E, 101
MONTGOMERY STREET
SAN FRANCISCO, CA 94104-4159
Inverse S&P 500 2x Strategy Fund Class C 65,141.38 8.81% FIRST CLEARING, LLC
2801 MARKET STREET
SAINT LOUIS, MO 63121
Inverse S&P 500 2x Strategy Fund Class C 54,442.41 7.39% AMERITRADE INC
PO BOX 2226
OMAHA NE 68103-2237
Inverse S&P 500 2x Strategy Fund Class H 5,343,895.10 51.81% NATIONAL FINANCIAL SVCS CORP
200 LIBERTY STREET
NEW YORK, NY 10281-10075
Inverse S&P 500 2x Strategy Fund Class H 1,028,428.62 9.97% SCHWAB, SPECIAL CUSTODY ACCOUNT
ATTN: MUTUAL FUNDS TEAM E, 101
MONTGOMERY STREET
SAN FRANCISCO, CA 94104-4160
NASDAQ-100(R) 2x Strategy Fund Class A 7,415.06 19.29% STIFEL NICOLAUS & CO INC
501 NORTH BROADWAY
ST LOUIS MO 63102
NASDAQ-100(R) 2x Strategy Fund Class A 7,358.43 19.15% MORGAN STANLEY SMITH BARNEY
HARBORSIDE FINANCIAL CENTER
PLAZA 2, 3RD FLOOR
JERSEY CITY, NJ 07337
NASDAQ-100(R) 2x Strategy Fund Class A 4,098.93 10.69% LPL FINANCIAL
9785 TOWNE CENTRE DRIVE
SAN DIEGO CA 92121-1998
NASDAQ-100(R) 2x Strategy Fund Class A 2,995.14 7.79% PERSHING LLC
P. O. BOX 2052
JERSEY CITY, NJ 07303-10101
NASDAQ-100(R) 2x Strategy Fund Class A 2,070.58 5.40% OPPENHEIMER & CO INC.
125 BROAD STREET
NEW YORK, NY 10004
NASDAQ-100(R) 2x Strategy Fund Class C 16,748.58 13.17% DONALDSON LUFKIN JENRETTE, SECURITIES
CORPORATION INC.
P.O. BOX 2052
JERSEY CITY, NJ 07304
NASDAQ-100(R) 2x Strategy Fund Class C 13,938.97 10.92% FIRST CLEARING, LLC
2801 MARKET STREET
SAINT LOUIS, MO 63122
NASDAQ-100(R) 2x Strategy Fund Class C 9,918.61 7.72% NFS LLC
PO BOX 1289
NORTH PLATTE, NE 69112
NASDAQ-100(R) 2x Strategy Fund Class C 8,714.85 6.88% AMERICAN ENTERPRISE INV SVCS
707 2ND AVENUE SOUTH
MINNEAPOLIS, MN 55402
NASDAQ-100(R) 2x Strategy Fund Class C 7,211.89 5.65% MORGAN STANLEY SMITH BARNEY
HARBORSIDE FINANCIAL CENTER
PLAZA 2, 3RD FLOOR
JERSEY CITY, NJ 07339
NASDAQ-100(R) 2x Strategy Fund Class H 214,334.11 18.36% NATIONAL FINANCIAL SVCS CORP
200 LIBERTY STREET
NEW YORK, NY 10281-10076
K-4
PERCENTAGE
AMOUNT OF OF THE
NAME OF THE FUND SHARE CLASS SHARES OWNED CLASS NAME AND ADDRESS OF THE BENEFICIAL OWNER
---------------------------------------------------------------------------------------------------------------------------------
NASDAQ-100(R) 2x Strategy Fund Class H 139,953.99 11.99% SCHWAB, SPECIAL CUSTODY ACCOUNT
ATTN: MUTUAL FUNDS TEAM E, 101
MONTGOMERY STREET
NASDAQ-100(R) 2x Strategy Fund Class H 95,965.23 8.22% TD AMERITRADE INC.
PO BOX 2226
OMAHA, NE 68103-2251
NASDAQ-100(R) 2x Strategy Fund Class H 69,819.40 5.98% CITICORP USA, INC
227 WEST MONROE STREET, 3RD FL
CHICAGO, IL 60606
NASDAQ-100(R) 2x Strategy Fund Class H 59,407.41 5.09% MERRILL LYNCH, PIERCE, FENNER &
SMITH, INC.
4800 DEER LAKE DRIVE E, 3RD FLOOR
JACKSONVILLE, FL 32246
Russell 2000(R) 2x Strategy Fund Class A 6,357.22 35.94% AMERITRADE INC
PO BOX 2226
OMAHA NE 68103-2234
Russell 2000(R) 2x Strategy Fund Class A 2,422.41 13.70% NFS LLC
PO BOX 1289
NORTH PLATTE, NE 69108
Russell 2000(R) 2x Strategy Fund Class A 1,815.97 10.30% LPL FINANCIAL
9785 TOWNE CENTRE DRIVE
SAN DIEGO CA 92121-2001
Russell 2000(R) 2x Strategy Fund Class A 1,243.12 7.01% OPPENHEIMER & CO INC.
1825 12TH AVE NE
ISSAQUAH WA 98029
Russell 2000(R) 2x Strategy Fund Class A 1,116.23 6.33% PERSHING LLC
P. O. BOX 2052
JERSEY CITY, NJ 07303-10102
Russell 2000(R) 2x Strategy Fund Class C 3,874.39 42.25% LPL FINANCIAL
9785 TOWNE CENTRE DRIVE
SAN DIEGO CA 92121-1997
Russell 2000(R) 2x Strategy Fund Class C 1,169.82 12.74% PERSHING LLC
P. O. BOX 2052
JERSEY CITY, NJ 07303-10103
Russell 2000(R) 2x Strategy Fund Class C 567.81 6.19% RBC CAPITAL MARKETS LLC
7525 PIONEER WAY STE 102
GIG HARBOR WA 98335-1165
Russell 2000(R) 2x Strategy Fund Class C 509.38 5.55% FIRST CLEARING, LLC
2801 MARKET STREET
SAINT LOUIS, MO 63123
Russell 2000(R) 2x Strategy Fund Class H 73,493.98 33.83% CITICORP USA, INC
227 WEST MONROE STREET, 3RD FL
CHICAGO, IL 60607
Russell 2000(R) 2x Strategy Fund Class H 36,429.05 16.77% NATIONAL FINANCIAL SVCS CORP
200 LIBERTY STREET
NEW YORK, NY 10281-10077
Russell 2000(R) 2x Strategy Fund Class H 11,593.12 5.34% SCHWAB, SPECIAL CUSTODY ACCOUNT
ATTN: MUTUAL FUNDS TEAM E, 101
MONTGOMERY STREET
SAN FRANCISCO, CA 94104-4162
S&P 500 2x Strategy Fund Class A 72,524.14 25.43% MORGAN STANLEY SMITH BARNEY
HARBORSIDE FINANCIAL CENTER
PLAZA 2, 3RD FLOOR
JERSEY CITY, NJ 07338
S&P 500 2x Strategy Fund Class A 49,317.27 17.29% DETROL CORPORATION
C/O MUTUAL FUNDS
PO BOX 8971
WILMINGTON, DE 19899-8971
S&P 500 2x Strategy Fund Class A 28,922.44 10.15% PERSHING LLC
P. O. BOX 2052
JERSEY CITY, NJ 07303-10104
S&P 500 2x Strategy Fund Class A 24,684.00 8.64% NFS LLC
PO BOX 1289
NORTH PLATTE, NE 69111
S&P 500 2x Strategy Fund Class A 18,702.86 6.56% FIRST CLEARING, LLC
2801 MARKET STREET
SAINT LOUIS, MO 63124
K-5
PERCENTAGE
AMOUNT OF OF THE
NAME OF THE FUND SHARE CLASS SHARES OWNED CLASS NAME AND ADDRESS OF THE BENEFICIAL OWNER
---------------------------------------------------------------------------------------------------------------------------------
S&P 500 2x Strategy Fund Class C 94,901.93 16.95% FIRST CLEARING, LLC
2873 ASHEVILLE HWY
CANTON NC 28716-8493
S&P 500 2x Strategy Fund Class C 79,184.63 14.15% TRUST COMPANY OF AMERICA
P O BOX 6503
ENGLEWOOD, CO 80117
S&P 500 2x Strategy Fund Class C 50,403.81 8.98% LPL FINANCIAL
9785 TOWNE CENTRE DRIVE
SAN DIEGO CA 92121-2002
S&P 500 2x Strategy Fund Class C 41,358.74 7.39% MORGAN STANLEY SMITH BARNEY
HARBORSIDE FINANCIAL CENTER
PLAZA 2, 3RD FLOOR
JERSEY CITY, NJ 07340
S&P 500 2x Strategy Fund Class C 31,383.96 5.57% DONALDSON LUFKIN JENRETTE, SECURITIES
CORPORATION INC.
P.O. BOX 2052
JERSEY CITY, NJ 07305
S&P 500 2x Strategy Fund Class C 30,718.99 5.49% SCHWAB, SPECIAL CUSTODY ACCOUNT
ATTN: MUTUAL FUNDS TEAM E, 101
MONTGOMERY STREET
SAN FRANCISCO, CA 94104-4163
S&P 500 2x Strategy Fund Class H 499,716.58 14.93% SCHWAB, SPECIAL CUSTODY ACCOUNT
ATTN: MUTUAL FUNDS TEAM E, 101
MONTGOMERY STREET
SAN FRANCISCO, CA 94104-4164
S&P 500 2x Strategy Fund Class H 391,923.04 11.71% CITICORP USA, INC
227 WEST MONROE STREET, 3RD FL
CHICAGO, IL 60608
S&P 500 2x Strategy Fund Class H 360,282.38 10.76% NATIONAL FINANCIAL SVCS CORP
200 LIBERTY STREET
NEW YORK, NY 10281-10078
K-6
RYDEX SERIES FUNDS
PERCENTAGE
AMOUNT OF OF THE
NAME OF THE FUND SHARE CLASS SHARES OWNED CLASS NAME AND ADDRESS OF THE BENEFICIAL OWNER
---------------------------------------------------------------------------------------------------------------------------------
All-Asset Aggressive Strategy Fund Class A 94,908.44 23.93% PERSHING LLC
P. O. BOX 2052
JERSEY CITY, NJ 07303-9998
All-Asset Aggressive Strategy Fund Class A 83,921.77 21.19% FIRST CLEARING, LLC
2801 MARKET STREET
SAINT LOUIS, MO 63103
All-Asset Aggressive Strategy Fund Class A 43,874.94 11.09% LPL FINANCIAL
9785 TOWNE CENTRE DRIVE
SAN DIEGO CA 92121-1981
All-Asset Aggressive Strategy Fund Class A 33,337.92 8.39% AMERITRADE INC
PO BOX 2226
OMAHA NE 68103-2237
All-Asset Aggressive Strategy Fund Class C 123,898.51 19.85% LPL FINANCIAL
9785 TOWNE CENTRE DRIVE
SAN DIEGO CA 92121-1998
All-Asset Aggressive Strategy Fund Class C 60,786.15 9.74% FIRST CLEARING, LLC
2801 MARKET STREET
SAINT LOUIS, MO 63104
All-Asset Aggressive Strategy Fund Class C 55,336.84 8.86% ROBERT W BAIRD & CO. INC.
777 EAST WISCONSIN AVENUE
MILWAUKEE WI 53202-5391
All-Asset Aggressive Strategy Fund Class C 54,309.71 8.70% PERSHING LLC
P. O. BOX 2052
JERSEY CITY, NJ 07303-9999
All-Asset Aggressive Strategy Fund Class C 44,053.73 7.07% NFS LLC
7444 S MARION AVE
TULSA, OK 74136
All-Asset Aggressive Strategy Fund Class C 40,566.11 6.50% CHEVIS F HORNE (IRA)
430 EUDORA ST
DENVER, CO 80220
All-Asset Aggressive Strategy Fund Class H 50,281.96 22.96% NATIONAL FINANCIAL SVCS CORP
200 LIBERTY STREET
NEW YORK, NY 10281-10005
All-Asset Aggressive Strategy Fund Class H 29,866.29 13.62% LPL FINANCIAL
9785 TOWNE CENTRE DRIVE
SAN DIEGO CA 92121-1996
All-Asset Aggressive Strategy Fund Class H 28,461.22 12.99% UMB BANK NA
ONE SECURITY PLACE
TOPEKA, KS 66636-0001
All-Asset Aggressive Strategy Fund Class H 25,676.47 11.72% SCHWAB, SPECIAL CUSTODY ACCOUNT
ATTN: MUTUAL FUNDS TEAM E, 101
MONTGOMERY STREET
SAN FRANCISCO, CA 94104-4122
All-Asset Aggressive Strategy Fund Class H 20,024.78 9.14% FIRST CLEARING, LLC
2801 MARKET STREET
SAINT LOUIS, MO 63105
All-Asset Aggressive Strategy Fund Class H 12,550.12 5.73% TD AMERITRADE INC.
PO BOX 2226
OMAHA, NE 68103-2226
All-Asset Aggressive Strategy Fund Class H 11,987.15 5.48% PERSHING LLC
P. O. BOX 2052
JERSEY CITY, NJ 07303-10000
K-7
PERCENTAGE
AMOUNT OF OF THE
NAME OF THE FUND SHARE CLASS SHARES OWNED CLASS NAME AND ADDRESS OF THE BENEFICIAL OWNER
---------------------------------------------------------------------------------------------------------------------------------
All-Asset Conservative Strategy Fund Class A 59,469.72 20.56% LPL FINANCIAL
9785 TOWNE CENTRE DRIVE
SAN DIEGO CA 92121-2035
All-Asset Conservative Strategy Fund Class A 49,153.53 16.98% PERSHING LLC
P. O. BOX 2052
JERSEY CITY, NJ 07303-10001
All-Asset Conservative Strategy Fund Class A 23,348.34 8.07% NFS LLC
1477 CENTRE STREET
WEST ROXBURY, MA 02132
All-Asset Conservative Strategy Fund Class A 18,502.81 6.39% PENSON FINANCIAL SERVICES, INC.
1700 PACIFIC AVENUE, SUITE 1400
DALLAS, TX 75201
All-Asset Conservative Strategy Fund Class C 113,246.55 14.96% LPL FINANCIAL
9785 TOWNE CENTRE DRIVE
SAN DIEGO CA 92121-2025
All-Asset Conservative Strategy Fund Class C 73,201.32 9.65% PERSHING LLC
P. O. BOX 2052
JERSEY CITY, NJ 07303-10002
All-Asset Conservative Strategy Fund Class C 71,728.30 9.46% FIRST CLEARING, LLC
2801 MARKET STREET
SAINT LOUIS, MO 63106
All-Asset Conservative Strategy Fund Class H 62,536.21 25.14% LPL FINANCIAL
9785 TOWNE CENTRE DRIVE
SAN DIEGO CA 92121-2045
All-Asset Conservative Strategy Fund Class H 35,465.37 14.25% UMB BANK NA
ONE SECURITY PLACE
TOPEKA, KS 66636-0001
All-Asset Conservative Strategy Fund Class H 23,878.74 9.60% SCHWAB, SPECIAL CUSTODY ACCOUNT
ATTN: MUTUAL FUNDS TEAM E, 101
MONTGOMERY STREET
SAN FRANCISCO, CA 94104-4123
All-Asset Conservative Strategy Fund Class H 16,425.05 6.60% LUCIE BOHANNON (RIRA)
130 MIDDLEBROOK RD
W HARTFORD, CT 06119
All-Asset Conservative Strategy Fund Class H 15,416.58 6.20% NATIONAL FINANCIAL SVCS CORP
200 LIBERTY STREET
NEW YORK, NY 10281-10006
All-Asset Conservative Strategy Fund Class H 12,741.17 5.12% TD AMERITRADE INC.
PO BOX 2226
OMAHA, NE 68103-2227
All-Asset Moderate Strategy Fund Class A 193,067.79 27.14% PERSHING LLC
P. O. BOX 2052
JERSEY CITY, NJ 07303-10003
All-Asset Moderate Strategy Fund Class A 143,968.74 20.20% LPL FINANCIAL
9785 TOWNE CENTRE DRIVE
SAN DIEGO CA 92121-1984
All-Asset Moderate Strategy Fund Class A 135,138.25 19.00% NFS LLC
PO BOX 11743
NEW IBERIA, LA 70562
All-Asset Moderate Strategy Fund Class C 298,240.96 20.82% LPL FINANCIAL
9785 TOWNE CENTRE DRIVE
SAN DIEGO CA 92121-2028
All-Asset Moderate Strategy Fund Class C 182,926.51 12.72% FIRST CLEARING, LLC
290 CLUBHOUSE RD
DELTA, PA 17314-8777
K-8
PERCENTAGE
AMOUNT OF OF THE
NAME OF THE FUND SHARE CLASS SHARES OWNED CLASS NAME AND ADDRESS OF THE BENEFICIAL OWNER
---------------------------------------------------------------------------------------------------------------------------------
All-Asset Moderate Strategy Fund Class C 165,892.24 11.56% PERSHING LLC
P. O. BOX 2052
JERSEY CITY, NJ 07303-10004
All-Asset Moderate Strategy Fund Class H 82,520.53 22.45% UMB BANK NA
ONE SECURITY PLACE
TOPEKA, KS 66636-0001
All-Asset Moderate Strategy Fund Class H 70,408.76 19.13% LPL FINANCIAL
9785 TOWNE CENTRE DRIVE
SAN DIEGO CA 92121-1995
All-Asset Moderate Strategy Fund Class H 44,016.61 11.98% FIRST CLEARING, LLC
2801 MARKET STREET
SAINT LOUIS, MO 63107
All-Asset Moderate Strategy Fund Class H 36,973.68 10.06% NATIONAL FINANCIAL SVCS CORP
200 LIBERTY STREET
NEW YORK, NY 10281-10007
All-Asset Moderate Strategy Fund Class H 31,560.77 8.59% SCHWAB, SPECIAL CUSTODY ACCOUNT
ATTN: MUTUAL FUNDS TEAM E, 101
MONTGOMERY STREET
SAN FRANCISCO, CA 94104-4124
Alternative Strategies Allocation Fund Class A 36,721.29 33.85% PERSHING LLC
P. O. BOX 2052
JERSEY CITY, NJ 07303-10005
Alternative Strategies Allocation Fund Class A 35,305.65 32.56% LPL FINANCIAL
9785 TOWNE CENTRE DRIVE
SAN DIEGO CA 92121-1982
Alternative Strategies Allocation Fund Class A 8,248.55 7.63% NFS LLC
615 PALISADE AVE
YONKERS, NY 10703
Alternative Strategies Allocation Fund Class A 6,644.43 6.13% MORGAN STANLEY SMITH BARNEY
HARBORSIDE FINANCIAL CENTER, PLAZA 2,
3RD FLOOR
JERSEY CITY, NJ 07311
Alternative Strategies Allocation Fund Class A 6,269.74 5.78% FIRST CLEARING, LLC
2801 MARKET STREET
SAINT LOUIS, MO 63108
Alternative Strategies Allocation Fund Class C 30,546.26 19.10% LPL FINANCIAL
9785 TOWNE CENTRE DRIVE
SAN DIEGO CA 92121-1979
Alternative Strategies Allocation Fund Class C 21,814.13 13.66% FIRST CLEARING, LLC
2801 MARKET STREET
SAINT LOUIS, MO 63109
Alternative Strategies Allocation Fund Class C 16,558.46 10.36% PERSHING LLC
P. O. BOX 2052
JERSEY CITY, NJ 07303-10006
Alternative Strategies Allocation Fund Class C 11,504.98 7.21% MORGAN STANLEY SMITH BARNEY
HARBORSIDE FINANCIAL CENTER, PLAZA 2,
3RD FLOOR
JERSEY CITY, NJ 07312
Alternative Strategies Allocation Fund Class C 9,171.04 5.74% DAWN D ARMSBY
3030 NY 2
CROPSEYVILLE, NY 12052
Alternative Strategies Allocation Fund Class H 277,344.91 47.76% RELIANCE TRUST
PO BOX 48529
ATLANTA GA 30328
K-9
PERCENTAGE
AMOUNT OF OF THE
NAME OF THE FUND SHARE CLASS SHARES OWNED CLASS NAME AND ADDRESS OF THE BENEFICIAL OWNER
---------------------------------------------------------------------------------------------------------------------------------
Alternative Strategies Allocation Fund Class H 102,738.59 17.65% PERSHING LLC
P. O. BOX 2052
JERSEY CITY, NJ 07303-10007
Alternative Strategies Allocation Fund Class H 53,173.58 9.16% NATIONAL FINANCIAL SVCS CORP
200 LIBERTY STREET
NEW YORK, NY 10281-10008
Alternative Strategies Allocation Fund Class H 43,052.87 7.41% FIRST CLEARING, LLC
2801 MARKET STREET
SAINT LOUIS, MO 63110
Alternative Strategies Allocation Fund Class H 29,898.93 5.14% LPL FINANCIAL
9785 TOWNE CENTRE DRIVE
SAN DIEGO CA 92121-1989
Alternative Strategies Fund Class A 63,670.24 68.94% RYDEX ALTERNATIVE STRATEGIES ALLOCATION
FUND
9601 BLACKWELL RD, STE 500
ROCKVILLE, MD 20850
Alternative Strategies Fund Class A 20,323.44 22.01% RYDEX EPT MODERATE
9601 BLACKWELL RD, STE 500
ROCKVILLE, MD 20850
Alternative Strategies Fund Class A 6,805.29 7.36% LPL FINANCIAL
9785 TOWNE CENTRE DRIVE
SAN DIEGO CA 92121-2034
Alternative Strategies Fund Class C 3,253.44 55.22% PERSHING LLC
P. O. BOX 2052
JERSEY CITY, NJ 07303-10008
Alternative Strategies Fund Class C 599.68 10.18% LPL FINANCIAL
9785 TOWNE CENTRE DRIVE
SAN DIEGO CA 92121-2036
Alternative Strategies Fund Class C 419.74 7.12% RYDEX DISTRIBUTORS
9601 BLACKWELL RD, STE 500
ROCKVILLE, MD 20850
Alternative Strategies Fund Class H 24,853.73 51.50% RYDEX VA ALTERNATIVE STRATEGIES,
ALLOCATION FUND
9601 BLACKWELL RD, STE 500
ROCKVILLE, MD 20850
Alternative Strategies Fund Class H 14,721.98 30.51% RYDEX EPT MODERATE -VA
9601 BLACKWELL RD, STE 500
ROCKVILLE, MD 20850
Alternative Strategies Fund Institutional 780.40 65.03% SCHWAB, SPECIAL CUSTODY ACCOUNT
Class ATTN: MUTUAL FUNDS TEAM E, 101
MONTGOMERY STREET
SAN FRANCISCO, CA 94104-4125
Alternative Strategies Fund Institutional 419.64 34.97% RYDEX DISTRIBUTORS
Class 9601 BLACKWELL RD, STE 500
ROCKVILLE, MD 20851
Amerigo Fund Advisor Class 15,702.74 8.89% CYNTHIA MILANI
1763 STOCKTON ST
SAINT HELENA, CA 94574
Amerigo Fund Advisor Class 10,226.26 5.79% STEVEN B HOLSTEN MD
299 CAREW ST - SUITE 409
SPRINGFIELD, MA 01104-2361
Banking Fund Advisor Class 2,188.45 36.02% NATIONWIDE TRUST COMPANY
P.O. BOX 182029
COLUMBUS, OH 43218-2030
K-10
PERCENTAGE
AMOUNT OF OF THE
NAME OF THE FUND SHARE CLASS SHARES OWNED CLASS NAME AND ADDRESS OF THE BENEFICIAL OWNER
---------------------------------------------------------------------------------------------------------------------------------
Banking Fund Advisor Class 949.80 15.63% SCHWAB, SPECIAL CUSTODY ACCOUNT
ATTN: MUTUAL FUNDS TEAM E, 101 MONTGOMERY
STREET
SAN FRANCISCO, CA 94104-4126
Banking Fund Advisor Class 427.63 7.04% TD AMERITRADE INC.
PO BOX 2226
OMAHA, NE 68103-2228
Banking Fund Class A 20,093.85 54.43% AMERITRADE INC
PO BOX 2226
OMAHA NE 68103-2242
Banking Fund Class A 4,860.79 13.17% UBS FINANCIAL SERVICES INC.
PO BOX 20487
SEDONA AZ 86341-0487
Banking Fund Class A 3,016.67 8.18% PERSHING LLC
P. O. BOX 2052
JERSEY CITY, NJ 07303-10097
Banking Fund Class A 2,746.87 7.44% FIRST CLEARING, LLC
2801 MARKET STREET
SAINT LOUIS, MO 63111
Banking Fund Class A 2,559.47 6.94% NFS LLC
4075 MOUNT OLYMPUS WAY
SALT LAKE CITY, UT 84124
Banking Fund Class C 31,290.83 66.30% FIRST CLEARING, LLC
2801 MARKET STREET
SAINT LOUIS, MO 63112
Banking Fund Class C 6,514.48 13.85% DONALDSON LUFKIN JENRETTE, SECURITIES
CORPORATION INC.
P.O. BOX 2052
JERSEY CITY, NJ 07303-9998-9998
Banking Fund Investor Class 38,103.80 42.79% PERSHING LLC
P. O. BOX 2052
JERSEY CITY, NJ 07303-10009
Banking Fund Investor Class 12,991.03 14.59% HENRY R BERGHOEF REVOCABLE TRUST
2 NORTH LA SALLE ST SUITE 500
CHICAGO, IL 60602
Banking Fund Investor Class 12,602.67 14.15% SCHWAB, SPECIAL CUSTODY ACCOUNT
ATTN: MUTUAL FUNDS TEAM E, 101 MONTGOMERY
STREET
SAN FRANCISCO, CA 94104-4127
Banking Fund Investor Class 4,762.54 5.35% NATIONAL FINANCIAL SVCS CORP
200 LIBERTY STREET
NEW YORK, NY 10281-10009
Basic Materials Fund Advisor Class 22,932.31 29.90% NATIONWIDE TRUST COMPANY
P.O. BOX 182029
COLUMBUS, OH 43218-2031
Basic Materials Fund Advisor Class 13,616.31 17.75% TD AMERITRADE INC.
PO BOX 2226
OMAHA, NE 68103-2229
Basic Materials Fund Advisor Class 9,785.16 12.72% LPL FINANCIAL
9785 TOWNE CENTRE DRIVE
SAN DIEGO CA 92121-1980
Basic Materials Fund Advisor Class 9,221.52 12.02% PERSHING LLC
P. O. BOX 2052
JERSEY CITY, NJ 07303-10010
K-11
PERCENTAGE
AMOUNT OF OF THE
NAME OF THE FUND SHARE CLASS SHARES OWNED CLASS NAME AND ADDRESS OF THE BENEFICIAL OWNER
---------------------------------------------------------------------------------------------------------------------------------
Basic Materials Fund Advisor Class 5,886.70 7.68% NATIONAL FINANCIAL SVCS CORP
200 LIBERTY STREET
NEW YORK, NY 10281-10010
Basic Materials Fund Advisor Class 3,955.05 5.14% AMERICAN ENTERPRISE INV SVCS
707 2ND AVENUE SOUTH
MINNEAPOLIS, MN 55402
Basic Materials Fund Class A 51,457.76 18.35% PERSHING LLC
P. O. BOX 2052
JERSEY CITY, NJ 07303-10011
Basic Materials Fund Class A 41,579.29 14.86% FIRST CLEARING, LLC
2801 MARKET STREET
SAINT LOUIS, MO 63113
Basic Materials Fund Class A 18,673.27 6.65% AMERITRADE INC
PO BOX 2226
OMAHA NE 68103-2233
Basic Materials Fund Class A 18,561.52 6.63% NFS LLC
8 DUVAL LANE
PLAINVILLE, CT 06062
Basic Materials Fund Class C 40,423.06 19.02% PERSHING LLC
P. O. BOX 2052
JERSEY CITY, NJ 07303-10012
Basic Materials Fund Class C 38,747.29 18.26% FIRST CLEARING, LLC
136 ALLEGANY ROAD
STEVENSVILLE MD 21666-3642
Basic Materials Fund Class C 15,062.56 7.10% MORGAN STANLEY SMITH BARNEY, HOUSE
ACCOUNT
700 RED BROOK BLVD
OWINGS MILLS, MD 21117
Basic Materials Fund Class C 11,047.42 5.21% LPL FINANCIAL
9785 TOWNE CENTRE DRIVE
SAN DIEGO CA 92121-2006
Basic Materials Fund Investor Class 282,197.47 34.39% SCHWAB, SPECIAL CUSTODY ACCOUNT
ATTN: MUTUAL FUNDS TEAM E, 101 MONTGOMERY
STREET
SAN FRANCISCO, CA 94104-4128
Basic Materials Fund Investor Class 217,820.60 26.55% NATIONAL FINANCIAL SVCS CORP
200 LIBERTY STREET
NEW YORK, NY 10281-10011
Basic Materials Fund Investor Class 61,608.97 7.52% Oltrust & Company
2801 Buick Cadillac Blvd
Bloomington IN 47401
Basic Materials Fund Investor Class 60,420.07 7.36% FIRST CLEARING, LLC
2801 MARKET STREET
SAINT LOUIS, MO 63114
Biotechnology Fund Advisor Class 50,682.98 32.31% TD AMERITRADE INC.
PO BOX 2226
OMAHA, NE 68103-2230
Biotechnology Fund Advisor Class 32,660.76 20.82% NATIONWIDE TRUST COMPANY
P.O. BOX 182029
COLUMBUS, OH 43218-2032
Biotechnology Fund Advisor Class 30,396.90 19.38% NATIONAL FINANCIAL SVCS CORP
200 LIBERTY STREET
NEW YORK, NY 10281-10012
K-12
PERCENTAGE
AMOUNT OF OF THE
NAME OF THE FUND SHARE CLASS SHARES OWNED CLASS NAME AND ADDRESS OF THE BENEFICIAL OWNER
---------------------------------------------------------------------------------------------------------------------------------
Biotechnology Fund Class A 100,255.29 32.23% PERSHING LLC
P. O. BOX 2052
JERSEY CITY, NJ 07303-10098
Biotechnology Fund Class A 92,635.45 29.70% NFS LLC
200 LIBERTY STREET
NEW YORK, NY 10281
Biotechnology Fund Class A 61,361.02 19.70% AMERITRADE INC
PO BOX 2226
OMAHA NE 68103-2240
Biotechnology Fund Class C 20,821.11 12.14% DONALDSON LUFKIN JENRETTE, SECURITIES
CORPORATION INC.
P.O. BOX 2052
JERSEY CITY, NJ 07303-9998-9999
Biotechnology Fund Class C 20,552.07 11.97% FIRST CLEARING, LLC
2801 MARKET STREET
SAINT LOUIS, MO 63115
Biotechnology Fund Class C 10,552.61 6.15% LPL FINANCIAL
9785 TOWNE CENTRE DRIVE
SAN DIEGO CA 92121-2024
Biotechnology Fund Class C 8,800.98 5.12% STIFEL NICOLAUS & CO INC.
501 NORTH BROADWAY
ST LOUIS MO 63108
Biotechnology Fund Investor Class 676,168.30 36.03% NATIONAL FINANCIAL SVCS CORP
200 LIBERTY STREET
NEW YORK, NY 10281-10013
Biotechnology Fund Investor Class 647,916.41 34.52% SCHWAB, SPECIAL CUSTODY ACCOUNT
ATTN: MUTUAL FUNDS TEAM E, 101 MONTGOMERY
STREET
SAN FRANCISCO, CA 94104-4129
Clermont Fund Advisor Class 11,115.59 18.67% RACHEL LEAH GARBER (IRA)
147 FOXWOOD RD
STAMFORD, CT 06903
Clermont Fund Advisor Class 8,481.15 14.25% VIOLET J HALLAM (IRA)
PO BOX 138
NAVESINK, NJ 07752
Clermont Fund Advisor Class 5,952.38 10.00% STEVEN B HOLSTEN MD
299 CAREW ST - SUITE 409
SPRINGFIELD, MA 01104-2361
Clermont Fund Advisor Class 4,431.08 7.44% STEPHEN HUTNICK OR MARY HUTNICK
107 KENDALL RD
KENDALL PARK, NJ 08824
Commodities Strategy Fund Class A 92,253.19 22.88% MORGAN STANLEY SMITH BARNEY
HARBORSIDE FINANCIAL CENTER
PLAZA 2, 3RD FLOOR
JERSEY CITY, NJ 07313
Commodities Strategy Fund Class A 59,607.64 14.79% NFS LLC
201 ALETHA DRIVE
SIKESTON, MO 63801
Commodities Strategy Fund Class A 58,794.12 14.60% PERSHING LLC
P. O. BOX 2052
JERSEY CITY, NJ 07303-10013
Commodities Strategy Fund Class A 50,527.70 12.53% RYDEX ALTERNATIVE STRATEGIES ALLOCATION
FUND
9601 BLACKWELL RD, STE 500
ROCKVILLE, MD 20851
K-13
PERCENTAGE
AMOUNT OF OF THE
NAME OF THE FUND SHARE CLASS SHARES OWNED CLASS NAME AND ADDRESS OF THE BENEFICIAL OWNER
---------------------------------------------------------------------------------------------------------------------------------
Commodities Strategy Fund Class A 33,119.62 8.21% RYDEX EPT MODERATE
9601 BLACKWELL RD, STE 500
ROCKVILLE, MD 20851
Commodities Strategy Fund Class A 31,086.90 7.74% LPL FINANCIAL
9785 TOWNE CENTRE DRIVE
SAN DIEGO CA 92121-1976
Commodities Strategy Fund Class A 25,124.28 6.23% FIRST CLEARING, LLC
2801 MARKET STREET
SAINT LOUIS, MO 63116
Commodities Strategy Fund Class C 63,460.76 25.74% FIRST CLEARING, LLC
136 ALLEGANY ROAD
STEVENSVILLE MD 21666-3642
Commodities Strategy Fund Class C 46,058.81 18.69% LPL FINANCIAL
9785 TOWNE CENTRE DRIVE
SAN DIEGO CA 92121-2005
Commodities Strategy Fund Class C 38,151.28 15.49% PERSHING LLC
P. O. BOX 2052
JERSEY CITY, NJ 07303-10014
Commodities Strategy Fund Class C 15,159.30 6.15% MORGAN STANLEY SMITH BARNEY
HARBORSIDE FINANCIAL CENTER
PLAZA 2, 3RD FLOOR
JERSEY CITY, NJ 07314
Commodities Strategy Fund Class H 292,919.01 27.66% NATIONAL FINANCIAL SVCS CORP
200 LIBERTY STREET
NEW YORK, NY 10281-10014
Commodities Strategy Fund Class H 273,615.94 25.84% SCHWAB, SPECIAL CUSTODY ACCOUNT
ATTN: MUTUAL FUNDS TEAM E, 101 MONTGOMERY
STREET
SAN FRANCISCO, CA 94104-4130
Commodities Strategy Fund Class H 81,733.95 7.72% FIRST CLEARING, LLC
2801 MARKET STREET
SAINT LOUIS, MO 63117
Commodities Strategy Fund Class H 72,974.72 6.89% TD AMERITRADE INC.
PO BOX 2226
OMAHA, NE 68103-2231
Commodities Strategy Fund Class H 66,682.07 6.28% LPL FINANCIAL
9785 TOWNE CENTRE DRIVE
SAN DIEGO CA 92121-2014
Commodities Strategy Fund Class H 63,249.58 5.96% PERSHING LLC
P. O. BOX 2052
JERSEY CITY, NJ 07303-10015
Consumer Products Fund Advisor Class 68,214.42 37.91% PERSHING LLC
P. O. BOX 2052
JERSEY CITY, NJ 07303-10099
Consumer Products Fund Advisor Class 28,050.05 15.54% NATIONWIDE TRUST COMPANY
P.O. BOX 182029
COLUMBUS, OH 43218-2033
Consumer Products Fund Advisor Class 22,500.84 12.47% NATIONAL FINANCIAL SVCS CORP
200 LIBERTY STREET
NEW YORK, NY 10281-10015
Consumer Products Fund Advisor Class 21,625.87 11.98% TD AMERITRADE INC.
PO BOX 2226
OMAHA, NE 68103-2232
K-14
PERCENTAGE
AMOUNT OF OF THE
NAME OF THE FUND SHARE CLASS SHARES OWNED CLASS NAME AND ADDRESS OF THE BENEFICIAL OWNER
---------------------------------------------------------------------------------------------------------------------------------
Consumer Products Fund Advisor Class 14,476.60 8.03% TRUST COMPANY OF AMERICA
P O BOX 6503
ENGLEWOOD, CO 80113
Consumer Products Fund Class A 115,180.37 28.77% PERSHING LLC
P. O. BOX 2052
JERSEY CITY, NJ 07303-10016
Consumer Products Fund Class A 67,673.47 16.93% AMERITRADE INC
PO BOX 2226
OMAHA NE 68103-2246
Consumer Products Fund Class A 29,926.26 7.52% FREDERIKSE
9785 TOWNE CENTRE DRIVE
SAN DIEGO CA 92121
Consumer Products Fund Class A 28,289.51 7.07% NFS LLC
5615 ROUNDTREE LANE
COLUMBIA, MD 21045
Consumer Products Fund Class A 22,405.11 5.60% LPL FINANCIAL
9785 TOWNE CENTRE DRIVE
SAN DIEGO CA 92121-2020
Consumer Products Fund Class C 42,377.72 26.82% DONALDSON LUFKIN JENRETTE, SECURITIES
CORPORATION INC.
P.O. BOX 2052
JERSEY CITY, NJ 07303
Consumer Products Fund Class C 17,061.26 10.78% MORGAN STANLEY SMITH BARNEY
HARBORSIDE FINANCIAL CENTER, PLAZA 2, 3RD
FLOOR
JERSEY CITY, NJ 07315
Consumer Products Fund Class C 12,295.02 7.75% LPL FINANCIAL
9785 TOWNE CENTRE DRIVE
SAN DIEGO CA 92121-2017
Consumer Products Fund Class C 11,173.75 7.05% NFS LLC
9331 TOWN PLACE DRIVE
OWINGS MILLS, MD 21117
Consumer Products Fund Class C 9,331.02 5.90% FIRST CLEARING, LLC
2801 MARKET STREET
SAINT LOUIS, MO 63118
Consumer Products Fund Investor Class 1,352,379.84 55.26% NATIONAL FINANCIAL SVCS CORP
200 LIBERTY STREET
NEW YORK, NY 10281-10016
Consumer Products Fund Investor Class 465,278.57 19.01% SCHWAB, SPECIAL CUSTODY ACCOUNT
ATTN: MUTUAL FUNDS TEAM E, 101 MONTGOMERY
STREET
SAN FRANCISCO, CA 94104-4131
Consumer Products Fund Investor Class 334,853.50 13.31% DONALDSON LUFKIN JENRETTE, SECURITIES
CORPORATION INC.
P.O. BOX 2052
JERSEY CITY, NJ 07303
Electronics Fund Advisor Class 27,014.10 82.15% TD AMERITRADE INC.
PO BOX 2226
OMAHA, NE 68103-2233
Electronics Fund Advisor Class 3,092.69 9.41% NATIONWIDE TRUST COMPANY
P.O. BOX 182029
COLUMBUS, OH 43218-2034
K-15
PERCENTAGE
AMOUNT OF OF THE
NAME OF THE FUND SHARE CLASS SHARES OWNED CLASS NAME AND ADDRESS OF THE BENEFICIAL OWNER
---------------------------------------------------------------------------------------------------------------------------------
Electronics Fund Class A 13,401.09 75.09% AMERITRADE INC
PO BOX 2226
OMAHA NE 68103-2243
Electronics Fund Class A 1,722.64 9.66% PERSHING LLC
P. O. BOX 2052
JERSEY CITY, NJ 07303-10017
Electronics Fund Class C 1,259.44 15.67% MORGAN STANLEY SMITH BARNEY, HOUSE
ACCOUNT
700 RED BROOK BLVD
OWINGS MILLS, MD 21118
Electronics Fund Class C 1,124.16 13.98% LPL FINANCIAL
9785 TOWNE CENTRE DRIVE
SAN DIEGO CA 92121-2021
Electronics Fund Class C 741.19 9.23% PERSHING LLC
P. O. BOX 2052
JERSEY CITY, NJ 07303-10106
Electronics Fund Class C 655.17 8.15% FIRST CLEARING, LLC
2801 MARKET STREET
SAINT LOUIS, MO 63119
Electronics Fund Class C 452.79 5.63% GREGORY F VERPENT
1801 MARKET STREET
PHILADELPHIA, PA 19103-1675
Electronics Fund Class C 427.35 5.32% MERRILL LYNCH, PIERCE, FENNER & SMITH,
INC.
4800 DEER LAKE DRIVE E, 3RD FLOOR
JACKSONVILLE, FL 32246
Electronics Fund Class C 409.59 5.10% RBC CAPITAL MARKETS CORP
3615 152ND ST
URBANDALE, IA 50323-1623
Electronics Fund Investor Class 30,936.56 26.93% TRUST COMPANY OF AMERICA
P O BOX 6503
ENGLEWOOD, CO 80122
Electronics Fund Investor Class 12,279.92 10.69% NATIONAL FINANCIAL SVCS CORP
200 LIBERTY STREET
NEW YORK, NY 10281-10017
Electronics Fund Investor Class 11,994.86 10.44% SCHWAB, SPECIAL CUSTODY ACCOUNT
ATTN: MUTUAL FUNDS TEAM E, 101 MONTGOMERY
STREET
SAN FRANCISCO, CA 94104-4132
Electronics Fund Investor Class 7,659.59 6.67% DONALDSON LUFKIN JENRETTE, SECURITIES
CORPORATION INC.
P.O. BOX 2052
JERSEY CITY, NJ 07303-9998-10002
Electronics Fund Investor Class 7,119.03 6.20% STOLTZFUS ENTERPRISES, LTD.
26 E. MAIN STREET, P.O. BOX 20
ELVERSON, PA 19520
Emerging Markets 2x Strategy Fund Class A 483.47 29.97% PERSHING LLC
P. O. BOX 2052
JERSEY CITY, NJ 07303-10018
Emerging Markets 2x Strategy Fund Class A 400.00 24.80% RYDEX DISTRIBUTORS
9601 BLACKWELL RD, STE 500
ROCKVILLE, MD 20852
Emerging Markets 2x Strategy Fund Class A 352.88 21.87% ROBERT A MURDOCK OR M PATRICIA MURDOCK
191 BRICKETT HILL CIRCLE
HAVERHILL, MA 01830
K-16
PERCENTAGE
AMOUNT OF OF THE
NAME OF THE FUND SHARE CLASS SHARES OWNED CLASS NAME AND ADDRESS OF THE BENEFICIAL OWNER
---------------------------------------------------------------------------------------------------------------------------------
Emerging Markets 2x Strategy Fund Class A 147.63 9.15% FIDUCIARY TRUST CO
804 NE 7TH PL
CAPE CORAL FL 33909-2089
Emerging Markets 2x Strategy Fund Class A 131.69 8.16% GEORGIA K KROUSTALIS OR SPYROS N
KROUSTALIS
4715 HEARTHSTONE RD.
CLEMMONS, NC 27012
Emerging Markets 2x Strategy Fund Class C 400.00 25.98% RYDEX DISTRIBUTORS
9601 BLACKWELL RD, STE 500
ROCKVILLE, MD 20853
Emerging Markets 2x Strategy Fund Class C 394.85 25.64% PERSHING LLC
P. O. BOX 2052
JERSEY CITY, NJ 07303-10019
Emerging Markets 2x Strategy Fund Class C 336.59 21.86% ANTHONY E RICCIO, OR LILLIAN P RICCIO
18 DAUNTLESS LANE
PLAISTOW, NH 03865
Emerging Markets 2x Strategy Fund Class C 188.08 12.21% LPL FINANCIAL
9785 TOWNE CENTRE DRIVE
SAN DIEGO CA 92121-2047
Emerging Markets 2x Strategy Fund Class C 132.71 8.62% MICHAEL J MCCUNE, OR TARA K MCCUNE
8917 HIGHLAND OAKS DR
JOHNSTON, IA 50131
Emerging Markets 2x Strategy Fund Class H 133,336.68 70.99% RYDEX DISTRIBUTORS
9601 BLACKWELL RD, STE 500
ROCKVILLE, MD 20854
Emerging Markets 2x Strategy Fund Class H 11,914.36 6.34% TRUST COMPANY OF AMERICA
P O BOX 6503
ENGLEWOOD, CO 80120
Energy Fund Advisor Class 84,528.06 36.72% NATIONWIDE TRUST COMPANY
P.O. BOX 182029
COLUMBUS, OH 43218-2035
Energy Fund Advisor Class 19,213.14 8.35% MSCS FINANCIAL SERVICES, LLC
700 17TH STREET, SUITE 300
DENVER, CO 80202
Energy Fund Advisor Class 13,609.09 5.90% D A DAVIDSON & CO
PO BOX 5015
GREAT FALLS MT 59403
Energy Fund Advisor Class 12,398.25 5.39% NATIONAL FINANCIAL SVCS CORP
200 LIBERTY STREET
NEW YORK, NY 10281-10018
Energy Fund Class A 89,443.72 37.02% FIRST CLEARING, LLC
2801 MARKET STREET
SAINT LOUIS, MO 63120
Energy Fund Class A 49,364.23 20.41% NFS LLC
5145 GREENWELL
BATON ROUGE, LA 70805
Energy Fund Class A 30,658.72 12.72% PERSHING LLC
P. O. BOX 2052
JERSEY CITY, NJ 07303-10020
Energy Fund Class C 146,420.02 22.30% PATRICIA S FRUCHTL
1918 S 4TH ST
SPRINGFIELD IL 62703-3149
Energy Fund Class C 63,488.00 9.69% PERSHING LLC
P. O. BOX 2052
JERSEY CITY, NJ 07303-10021
K-17
PERCENTAGE
AMOUNT OF OF THE
NAME OF THE FUND SHARE CLASS SHARES OWNED CLASS NAME AND ADDRESS OF THE BENEFICIAL OWNER
---------------------------------------------------------------------------------------------------------------------------------
Energy Fund Class C 56,037.67 8.53% MORGAN STANLEY SMITH BARNEY
HARBORSIDE FINANCIAL CENTER
PLAZA 2, 3RD FLOOR
JERSEY CITY, NJ 07316
Energy Fund Class C 43,401.17 6.62% LPL FINANCIAL
9785 TOWNE CENTRE DRIVE
SAN DIEGO CA 92121-2007
Energy Fund Class C 37,131.87 5.66% D A DAVIDSON & CO
PO BOX 5015
GREAT FALLS MT 59404
Energy Fund Investor Class 499,529.39 32.12% SCHWAB, SPECIAL CUSTODY ACCOUNT
ATTN: MUTUAL FUNDS TEAM E, 101 MONTGOMERY
STREET
SAN FRANCISCO, CA 94104-4133
Energy Fund Investor Class 342,065.77 21.99% NATIONAL FINANCIAL SVCS CORP
200 LIBERTY STREET
NEW YORK, NY 10281-10019
Energy Fund Investor Class 92,645.76 5.91% LPL FINANCIAL
9785 TOWNE CENTRE DRIVE
SAN DIEGO CA 92121-2026
Energy Services Fund Advisor Class 53,804.00 36.78% NATIONWIDE TRUST COMPANY
P.O. BOX 182029
COLUMBUS, OH 43218-2036
Energy Services Fund Advisor Class 36,554.41 24.99% TD AMERITRADE INC.
PO BOX 2226
OMAHA, NE 68103-2234
Energy Services Fund Advisor Class 16,687.88 11.42% LPL FINANCIAL
9785 TOWNE CENTRE DRIVE
SAN DIEGO CA 92121-2009
Energy Services Fund Class A 60,065.09 36.47% FIRST CLEARING, LLC
2801 MARKET STREET
SAINT LOUIS, MO 63121
Energy Services Fund Class A 31,939.73 19.40% PERSHING LLC
P. O. BOX 2052
JERSEY CITY, NJ 07303-10022
Energy Services Fund Class A 16,675.08 10.04% NFS LLC
343 TREMONT ST
NEWINGTON, CT 06111
Energy Services Fund Class A 9,928.72 6.06% LPL FINANCIAL
9785 TOWNE CENTRE DRIVE
SAN DIEGO CA 92121-1991
Energy Services Fund Class C 42,954.41 17.07% FIRST CLEARING, LLC
2801 MARKET STREET
SAINT LOUIS, MO 63122
Energy Services Fund Class C 42,081.53 16.69% STIFEL NICOLAUS & CO INC.
501 NORTH BROADWAY
ST LOUIS MO 63104
Energy Services Fund Class C 31,703.93 12.60% PERSHING LLC
P. O. BOX 2052
JERSEY CITY, NJ 07303-10023
K-18
PERCENTAGE
AMOUNT OF OF THE
NAME OF THE FUND SHARE CLASS SHARES OWNED CLASS NAME AND ADDRESS OF THE BENEFICIAL OWNER
---------------------------------------------------------------------------------------------------------------------------------
Energy Services Fund Investor Class 201,711.38 28.04% SCHWAB, SPECIAL CUSTODY ACCOUNT
ATTN: MUTUAL FUNDS TEAM E, 101 MONTGOMERY
STREET
SAN FRANCISCO, CA 94104-4134
Energy Services Fund Investor Class 101,600.22 14.13% NATIONAL FINANCIAL SVCS CORP
200 LIBERTY STREET
NEW YORK, NY 10281-10020
Energy Services Fund Investor Class 44,301.17 6.05% PERSHING LLC
P. O. BOX 2052
JERSEY CITY, NJ 07303-10024
Energy Services Fund Investor Class 42,153.75 5.86% FIRST CLEARING, LLC
2801 MARKET STREET
SAINT LOUIS, MO 63123
Europe 1.25x Strategy Fund Class A 8,913.30 45.62% SCHWAB, SPECIAL CUSTODY ACCOUNT
ATTN: MUTUAL FUNDS TEAM E, 101 MONTGOMERY
STREET
SAN FRANCISCO, CA 94104-4135
Europe 1.25x Strategy Fund Class A 4,185.10 21.41% PERSHING LLC
P. O. BOX 2052
JERSEY CITY, NJ 07303-10025
Europe 1.25x Strategy Fund Class A 1,378.08 7.05% MORGAN STANLEY SMITH BARNEY, HOUSE
ACCOUNT
700 RED BROOK BLVD
OWINGS MILLS, MD 21119
Europe 1.25x Strategy Fund Class A 1,269.40 6.50% LPL FINANCIAL
9785 TOWNE CENTRE DRIVE
SAN DIEGO CA 92121-2012
Europe 1.25x Strategy Fund Class C 7,167.01 10.78% FIRST CLEARING, LLC
2801 MARKET STREET
SAINT LOUIS, MO 63124
Europe 1.25x Strategy Fund Class C 4,859.42 7.31% ROBERT R MASHBURN (IRA)
1533 DUNCAN RD
KNOXVILLE, TN 37919
Europe 1.25x Strategy Fund Class C 4,657.10 7.01% LAURETTA M ROBERTS (IRA)
540 N SPOEDE ROAD
SAINT LOUIS, MO 63141
Europe 1.25x Strategy Fund Class C 4,327.08 6.51% ROBERT L HICKS (RIRA)
153 SHANNON VALLEY DRIVE
VICTORIA, TX 77904
Europe 1.25x Strategy Fund Class C 3,800.70 5.73% NFS LLC
32 SHORT ST
BROCKTON, MA 02302
Europe 1.25x Strategy Fund Class H 116,201.05 25.74% NATIONAL FINANCIAL SVCS CORP
200 LIBERTY STREET
NEW YORK, NY 10281-10021
Europe 1.25x Strategy Fund Class H 97,339.11 21.56% TRUST COMPANY OF AMERICA
P O BOX 6503
ENGLEWOOD, CO 80125
Europe 1.25x Strategy Fund Class H 45,110.36 9.99% TD AMERITRADE INC.
PO BOX 2226
OMAHA, NE 68103-2235
Europe 1.25x Strategy Fund Class H 36,051.91 7.98% SCHWAB, SPECIAL CUSTODY ACCOUNT
ATTN: MUTUAL FUNDS TEAM E, 101 MONTGOMERY
STREET
SAN FRANCISCO, CA 94104-4136
K-19
PERCENTAGE
AMOUNT OF OF THE
NAME OF THE FUND SHARE CLASS SHARES OWNED CLASS NAME AND ADDRESS OF THE BENEFICIAL OWNER
---------------------------------------------------------------------------------------------------------------------------------
Europe 1.25x Strategy Fund Class H 28,842.58 6.40% PERSHING LLC
P. O. BOX 2052
JERSEY CITY, NJ 07303-10092
Europe 1.25x Strategy Fund Class H 27,675.99 6.13% NATIONWIDE TRUST COMPANY
P.O. BOX 182029
COLUMBUS, OH 43218-2037
Event Driven and Distressed Class A 105,434.52 36.65% RYDEX ALTERNATIVE STRATEGIES ALLOCATION
Strategies Fund FUND
9601 BLACKWELL RD, STE 500
ROCKVILLE, MD 20852
Event Driven and Distressed Class A 58,782.97 20.44% RYDEX DISTRIBUTORS
Strategies Fund 9601 BLACKWELL RD, STE 500
ROCKVILLE, MD 20855
Event Driven and Distressed Class A 44,916.42 15.62% RYDEX EPT MODERATE
Strategies Fund 9601 BLACKWELL RD, STE 500
ROCKVILLE, MD 20852
Event Driven and Distressed Class C 36,901.95 73.55% FIRST CLEARING, LLC
Strategies Fund 2801 MARKET STREET
SAINT LOUIS, MO 63125
Event Driven and Distressed Class C 3,096.77 6.17% STIFEL NICOLAUS & CO INC.
Strategies Fund 501 NORTH BROADWAY
ST LOUIS MO 63109
Event Driven and Distressed Class H 160,598.50 55.12% SCHWAB, SPECIAL CUSTODY ACCOUNT
Strategies Fund ATTN: MUTUAL FUNDS TEAM E, 101 MONTGOMERY
STREET
SAN FRANCISCO, CA 94104-4137
Event Driven and Distressed Class H 40,867.99 14.03% RYDEX VA ALTERNATIVE STRATEGIES,
Strategies Fund ALLOCATION FUND
9601 BLACKWELL RD, STE 500
ROCKVILLE, MD 20851
Event Driven and Distressed Class H 34,192.07 11.77% LPL FINANCIAL
Strategies Fund 9785 TOWNE CENTRE DRIVE
SAN DIEGO CA 92121-2037
Event Driven and Distressed Class H 32,436.23 11.14% RYDEX EPT MODERATE -VA
Strategies Fund 9601 BLACKWELL RD, STE 500
ROCKVILLE, MD 20851
Event Driven and Distressed Institutional 8,276.55 95.03% SCHWAB, SPECIAL CUSTODY ACCOUNT
Strategies Fund Class ATTN: MUTUAL FUNDS TEAM E, 101 MONTGOMERY
STREET
SAN FRANCISCO, CA 94104-4138
Financial Services Fund Advisor Class 3,070.13 27.52% NATIONWIDE TRUST COMPANY
P.O. BOX 182029
COLUMBUS, OH 43218-2038
Financial Services Fund Advisor Class 1,450.84 13.01% GENWORTH FINANCIAL TRUST COMPANY
3200 N CENTRAL, SUITE 612
PHOENIX, AZ 85012
Financial Services Fund Advisor Class 1,242.85 11.14% TD AMERITRADE INC.
PO BOX 2226
OMAHA, NE 68103-2236
Financial Services Fund Advisor Class 1,118.14 10.02% NATIONAL FINANCIAL SVCS CORP
200 LIBERTY STREET
NEW YORK, NY 10281-10022
K-20
PERCENTAGE
AMOUNT OF OF THE
NAME OF THE FUND SHARE CLASS SHARES OWNED CLASS NAME AND ADDRESS OF THE BENEFICIAL OWNER
---------------------------------------------------------------------------------------------------------------------------------
Financial Services Fund Advisor Class 935.92 8.39% UMB BANK NA
6517 WALEBRIDGE LN
AUSTIN TX 787391408
Financial Services Fund Class A 3,362.79 30.34% FIRST CLEARING, LLC
2801 MARKET STREET
SAINT LOUIS, MO 63126
Financial Services Fund Class A 2,086.86 18.83% PERSHING LLC
P. O. BOX 2052
JERSEY CITY, NJ 07303-10026
Financial Services Fund Class A 1,888.54 17.04% UBS FINANCIAL SERVICES INC.
50 COLUMBIA RD
BRANCHBURG NJ 08876-3519
Financial Services Fund Class A 762.68 6.88% NFS LLC
11722 PRESERVATION LANE
BOCA RATON, FL 33498
Financial Services Fund Class A 612.12 5.52% GARY J ATEN OR CAROLINE J ATEN
PO BOX 886
ATKINSON, NE 68713
Financial Services Fund Class C 3,955.49 28.91% AMERITRADE INC
PO BOX 2226
OMAHA NE 68103-2227
Financial Services Fund Class C 2,529.55 18.49% PERSHING LLC
P. O. BOX 2052
JERSEY CITY, NJ 07303-10027
Financial Services Fund Class C 1,383.78 10.11% FIRST CLEARING, LLC
2801 MARKET STREET
SAINT LOUIS, MO 63127
Financial Services Fund Class C 1,082.09 7.89% LPL FINANCIAL
9785 TOWNE CENTRE DRIVE
SAN DIEGO CA 92121-1974
Financial Services Fund Investor Class 27,875.61 44.73% TD AMERITRADE INC.
PO BOX 2226
OMAHA, NE 68103-2237
Financial Services Fund Investor Class 6,634.24 10.65% SCHWAB, SPECIAL CUSTODY ACCOUNT
ATTN: MUTUAL FUNDS TEAM E, 101 MONTGOMERY
STREET
SAN FRANCISCO, CA 94104-4139
Financial Services Fund Investor Class 6,354.55 10.20% NATIONAL FINANCIAL SVCS CORP
200 LIBERTY STREET
NEW YORK, NY 10281-10023
Government Long Bond 1.2x Strategy Fund Advisor Class 7,361,272.75 82.79% TRUST COMPANY OF AMERICA
P O BOX 6503
ENGLEWOOD, CO 80115
Government Long Bond 1.2x Strategy Fund Class A 175,390.33 46.78% AMERITRADE INC
PO BOX 2226
OMAHA NE 68103-2239
Government Long Bond 1.2x Strategy Fund Class A 105,268.22 28.04% PERSHING LLC
P. O. BOX 2052
JERSEY CITY, NJ 07303-10028
Government Long Bond 1.2x Strategy Fund Class C 156,067.86 33.05% PERSHING LLC
P. O. BOX 2052
JERSEY CITY, NJ 07303-10029
K-21
PERCENTAGE
AMOUNT OF OF THE
NAME OF THE FUND SHARE CLASS SHARES OWNED CLASS NAME AND ADDRESS OF THE BENEFICIAL OWNER
---------------------------------------------------------------------------------------------------------------------------------
Government Long Bond 1.2x Strategy Fund Class C 42,245.32 8.90% AMERITRADE INC
PO BOX 2226
OMAHA NE 68103-2248
Government Long Bond 1.2x Strategy Fund Investor Class 2,753,350.54 47.26% NATIONAL FINANCIAL SVCS CORP
200 LIBERTY STREET
NEW YORK, NY 10281-10024
Government Long Bond 1.2x Strategy Fund Investor Class 1,096,322.32 18.53% PERSHING LLC
P. O. BOX 2052
JERSEY CITY, NJ 07303-10107
Government Long Bond 1.2x Strategy Fund Investor Class 657,172.71 11.28% TD AMERITRADE INC.
PO BOX 2226
OMAHA, NE 68103-2238
Government Long Bond 1.2x Strategy Fund Investor Class 319,811.59 5.48% TRUST COMPANY OF AMERICA
P O BOX 6503
ENGLEWOOD, CO 80114
Health Care Fund Advisor Class 120,065.56 57.50% NATIONWIDE TRUST COMPANY
P.O. BOX 182029
COLUMBUS, OH 43218-2039
Health Care Fund Advisor Class 27,527.45 13.18% TD AMERITRADE INC.
PO BOX 2226
OMAHA, NE 68103-2239
Health Care Fund Advisor Class 20,952.10 10.03% NATIONAL FINANCIAL SVCS CORP
200 LIBERTY STREET
NEW YORK, NY 10281-10025
Health Care Fund Class A 33,872.29 25.14% AMERITRADE INC
PO BOX 2226
OMAHA NE 68103-2232
Health Care Fund Class A 33,179.15 24.56% PERSHING LLC
P. O. BOX 2052
JERSEY CITY, NJ 07303-10030
Health Care Fund Class A 7,648.80 5.67% LPL FINANCIAL
9785 TOWNE CENTRE DRIVE
SAN DIEGO CA 92121-2010
Health Care Fund Class C 27,965.85 9.59% FIRST CLEARING, LLC
2801 MARKET STREET
SAINT LOUIS, MO 63128
Health Care Fund Class C 16,907.13 5.82% NFS LLC
2841 S GLENDALE AVE
SPRINGFIELD, MO 65804
Health Care Fund Investor Class 330,081.69 35.00% NATIONAL FINANCIAL SVCS CORP
200 LIBERTY STREET
NEW YORK, NY 10281-10026
Health Care Fund Investor Class 225,526.63 23.92% SCHWAB, SPECIAL CUSTODY ACCOUNT
ATTN: MUTUAL FUNDS TEAM E, 101 MONTGOMERY
STREET
SAN FRANCISCO, CA 94104-4140
Health Care Fund Investor Class 71,662.50 7.65% DONALDSON LUFKIN JENRETTE, SECURITIES
CORPORATION INC.
P.O. BOX 2052
JERSEY CITY, NJ 07303-9998-10003
Health Care Fund Investor Class 66,176.56 7.02% TD AMERITRADE INC.
PO BOX 2226
OMAHA, NE 68103-2240
K-22
PERCENTAGE
AMOUNT OF OF THE
NAME OF THE FUND SHARE CLASS SHARES OWNED CLASS NAME AND ADDRESS OF THE BENEFICIAL OWNER
---------------------------------------------------------------------------------------------------------------------------------
High Yield Strategy Fund Class A 497,059.56 80.98% AMERITRADE INC
PO BOX 2226
OMAHA NE 68103-2234
High Yield Strategy Fund Class A 50,211.29 8.18% PERSHING LLC
P. O. BOX 2052
JERSEY CITY, NJ 07303-10031
High Yield Strategy Fund Class C 73,313.72 20.92% AMERICAN ENTERPRISE INV SVCS
707 2ND AVENUE SOUTH
MINNEAPOLIS, MN 55403
High Yield Strategy Fund Class C 63,539.63 18.07% PERSHING LLC
P. O. BOX 2052
JERSEY CITY, NJ 07303-10032
High Yield Strategy Fund Class C 25,550.78 7.28% FIRST CLEARING, LLC
2801 MARKET STREET
SAINT LOUIS, MO 63129
High Yield Strategy Fund Class C 19,416.68 5.53% LPL FINANCIAL
9785 TOWNE CENTRE DRIVE
SAN DIEGO CA 92121-2011
High Yield Strategy Fund Class H 88,369.45 28.55% TD AMERITRADE INC.
PO BOX 2226
OMAHA, NE 68103-2241
High Yield Strategy Fund Class H 60,725.65 19.62% SCHWAB, SPECIAL CUSTODY ACCOUNT
ATTN: MUTUAL FUNDS TEAM E, 101 MONTGOMERY
STREET
SAN FRANCISCO, CA 94104-4141
High Yield Strategy Fund Class H 47,293.85 15.28% NATIONAL FINANCIAL SVCS CORP
200 LIBERTY STREET
NEW YORK, NY 10281-10027
High Yield Strategy Fund Class H 22,932.26 7.41% LPL FINANCIAL
9785 TOWNE CENTRE DRIVE
SAN DIEGO CA 92121-2003
Internet Fund Advisor Class 8,392.97 40.97% NATIONWIDE TRUST COMPANY
P.O. BOX 182029
COLUMBUS, OH 43218-2040
Internet Fund Advisor Class 5,173.83 25.26% NATIONAL FINANCIAL SVCS CORP
200 LIBERTY STREET
NEW YORK, NY 10281-10028
Internet Fund Advisor Class 2,019.83 9.86% GENWORTH FINANCIAL TRUST COMPANY
3200 N CENTRAL, SUITE 612
PHOENIX, AZ 85013
Internet Fund Advisor Class 1,283.48 6.27% SCHWAB, SPECIAL CUSTODY ACCOUNT
ATTN: MUTUAL FUNDS TEAM E, 101 MONTGOMERY
STREET
SAN FRANCISCO, CA 94104-4142
Internet Fund Class A 11,178.32 56.45% FIRST CLEARING, LLC
2801 MARKET STREET
SAINT LOUIS, MO 63130
Internet Fund Class A 4,567.44 23.07% PERSHING LLC
P. O. BOX 2052
JERSEY CITY, NJ 07303-10108
K-23
PERCENTAGE
AMOUNT OF OF THE
NAME OF THE FUND SHARE CLASS SHARES OWNED CLASS NAME AND ADDRESS OF THE BENEFICIAL OWNER
---------------------------------------------------------------------------------------------------------------------------------
Internet Fund Class C 3,856.92 24.79% FIRST CLEARING, LLC
2801 MARKET STREET
SAINT LOUIS, MO 63131
Internet Fund Class C 3,561.24 22.88% PERSHING LLC
P. O. BOX 2052
JERSEY CITY, NJ 07303-10033
Internet Fund Class C 1,160.50 7.46% STERLING TRUST CO.
PO BOX 2526
WACO, TX 76702-2526
Internet Fund Class C 890.50 5.71% STIFEL NICOLAUS & CO INC.
501 NORTH BROADWAY
ST LOUIS MO 63105
Internet Fund Investor Class 131,605.24 60.62% FIRST CLEARING, LLC
2801 MARKET STREET
SAINT LOUIS, MO 63132
Internet Fund Investor Class 21,348.67 9.83% SCHWAB, SPECIAL CUSTODY ACCOUNT
ATTN: MUTUAL FUNDS TEAM E, 101 MONTGOMERY
STREET
SAN FRANCISCO, CA 94104-4143
Internet Fund Investor Class 15,241.89 7.02% NATIONAL FINANCIAL SVCS CORP
200 LIBERTY STREET
NEW YORK, NY 10281-10029
Internet Fund Investor Class 11,423.44 5.26% TD AMERITRADE INC.
PO BOX 2226
OMAHA, NE 68103-2242
Inverse Emerging Markets 2x Class A 6,381.78 45.66% RBC CAPITAL MARKETS LLC
Strategy Fund 2146 34TH STREET
LOS ALAMOS NM 87544-2012
Inverse Emerging Markets 2x Class A 2,740.41 19.61% RBC CAPITAL MARKETS LLC
Strategy Fund 3213 A WALNUT STREET
LOS ALAMOS NM 87544-2092
Inverse Emerging Markets 2x Class A 1,021.56 7.31% AMERITRADE INC
Strategy Fund PO BOX 2226
OMAHA NE 68103-2226
Inverse Emerging Markets 2x Class A 972.48 6.96% TRUST COMPANY OF AMERICA
Strategy Fund P O BOX 6503
ENGLEWOOD, CO 80117
Inverse Emerging Markets 2x Class C 1,229.65 14.94% PERSHING LLC
Strategy Fund P. O. BOX 2052
JERSEY CITY, NJ 07303-10034
Inverse Emerging Markets 2x Class C 1,005.18 12.22% FRANK A DIAZ (ROTH)
Strategy Fund 1704 S 39TH STREET #28
MESA, AZ 85206-3844
Inverse Emerging Markets 2x Class C 475.59 5.78% GUSTAVO GOMEZ (RIRA)
Strategy Fund 670 S CACTUS WREN ST
GILBERT, AZ 85296-3110
Inverse Emerging Markets 2x Class C 472.85 5.75% ROSS NICHOLS DYER (RIRA)
Strategy Fund 1345 ANGLERS DR
STEAMBOAT SPRINGS, CO 80487
Inverse Emerging Markets 2x Class H 59,872.81 80.65% RYDEX DISTRIBUTORS
Strategy Fund 9601 BLACKWELL RD, STE 500
ROCKVILLE, MD 20856
Inverse Emerging Markets 2x Class H 5,695.58 7.67% FRANK L KLEMENCIC (IRA)
Strategy Fund 1957 ACORN LN
ABINGTON, PA 19001
K-24
PERCENTAGE
AMOUNT OF OF THE
NAME OF THE FUND SHARE CLASS SHARES OWNED CLASS NAME AND ADDRESS OF THE BENEFICIAL OWNER
---------------------------------------------------------------------------------------------------------------------------------
Inverse Government Long Bond Advisor Class 849,842.02 44.05% LPL FINANCIAL
Strategy Fund 9785 TOWNE CENTRE DRIVE
SAN DIEGO CA 92121-1986
Inverse Government Long Bond Advisor Class 361,649.85 18.73% PIPER JAFFRAY
Strategy Fund 800 NICOLLET MALL 8th STREET
MINNEAPOLIS, MN 55402
Inverse Government Long Bond Advisor Class 121,273.88 6.37% PERSHING LLC
Strategy Fund P. O. BOX 2052
JERSEY CITY, NJ 07303-10093
Inverse Government Long Bond Class A 889,977.22 17.50% FIRST CLEARING, LLC
Strategy Fund 2801 MARKET STREET
SAINT LOUIS, MO 63133
Inverse Government Long Bond Class A 758,754.62 14.85% PERSHING LLC
Strategy Fund P. O. BOX 2052
JERSEY CITY, NJ 07303-10035
Inverse Government Long Bond Class A 589,885.14 11.55% NFS LLC
Strategy Fund 5765 RICH GROVE LN
DUBLIN, OH 43016
Inverse Government Long Bond Class A 472,176.84 9.29% SCHWAB, SPECIAL CUSTODY ACCOUNT
Strategy Fund ATTN: MUTUAL FUNDS TEAM E, 101 MONTGOMERY
STREET
SAN FRANCISCO, CA 94104-4144
Inverse Government Long Bond Class A 299,178.79 5.83% LPL FINANCIAL
Strategy Fund 9785 TOWNE CENTRE DRIVE
SAN DIEGO CA 92121-1975
Inverse Government Long Bond Class C 2,154,885.69 24.14% FIRST CLEARING, LLC
Strategy Fund 2801 MARKET STREET
SAINT LOUIS, MO 63134
Inverse Government Long Bond Class C 637,443.49 7.14% MORGAN STANLEY SMITH BARNEY
Strategy Fund HARBORSIDE FINANCIAL CENTER, PLAZA 2, 3RD
FLOOR
JERSEY CITY, NJ 07317
Inverse Government Long Bond Class C 574,097.50 6.14% PERSHING LLC
Strategy Fund P. O. BOX 2052
JERSEY CITY, NJ 07303-10036
Inverse Government Long Bond Class C 459,941.58 5.01% NFS LLC
Strategy Fund 11177 WOODLANDS WAY
CINCINNATI, OH 45241
Inverse Government Long Bond Investor Class 7,945,626.61 33.34% SCHWAB, SPECIAL CUSTODY ACCOUNT
Strategy Fund ATTN: MUTUAL FUNDS TEAM E, 101 MONTGOMERY
STREET
SAN FRANCISCO, CA 94104-4145
Inverse Government Long Bond Investor Class 5,585,725.55 23.44% NATIONAL FINANCIAL SVCS CORP
Strategy Fund 200 LIBERTY STREET
NEW YORK, NY 10281-10000
Inverse Government Long Bond Investor Class 2,147,453.45 9.01% FIRST CLEARING, LLC
Strategy Fund 2801 MARKET STREET
SAINT LOUIS, MO 63135
Inverse Government Long Bond Investor Class 1,200,159.17 5.04% TD AMERITRADE INC.
Strategy Fund PO BOX 2226
OMAHA, NE 68103-2243
Inverse High Yield Strategy Fund Class A 96,897.57 74.84% AMERITRADE INC
PO BOX 2226
OMAHA NE 68103-2235
K-25
PERCENTAGE
AMOUNT OF OF THE
NAME OF THE FUND SHARE CLASS SHARES OWNED CLASS NAME AND ADDRESS OF THE BENEFICIAL OWNER
-------------------------------------------------------------------------------------------------------------------------------
Inverse High Yield Strategy Fund Class A 18,521.48 14.35% PERSHING LLC
P. O. BOX 2052
JERSEY CITY, NJ 07303-10037
Inverse High Yield Strategy Fund Class C 8,642.44 35.98% PERSHING LLC
P. O. BOX 2052
JERSEY CITY, NJ 07303-10038
Inverse High Yield Strategy Fund Class C 4,061.75 16.91% MORGAN STANLEY SMITH BARNEY, HOUSE
ACCOUNT
700 RED BROOK BLVD
OWINGS MILLS, MD 21120
Inverse High Yield Strategy Fund Class C 1,765.53 7.35% FIRST CLEARING, LLC
2801 MARKET STREET
SAINT LOUIS, MO 63136
Inverse High Yield Strategy Fund Class H 716,565.71 58.07% SCHWAB, SPECIAL CUSTODY ACCOUNT
ATTN: MUTUAL FUNDS TEAM E, 101 MONTGOMERY
STREET
SAN FRANCISCO, CA 94104-4146
Inverse High Yield Strategy Fund Class H 254,688.41 20.65% TRUST COMPANY OF AMERICA
P O BOX 6503
ENGLEWOOD, CO 80124
Inverse High Yield Strategy Fund Class H 134,183.71 10.87% NATIONAL FINANCIAL SVCS CORP
200 LIBERTY STREET
NEW YORK, NY 10281-10030
Inverse Mid-Cap Strategy Fund Class A 3,003.04 32.93% MORGAN STANLEY SMITH BARNEY, HOUSE
ACCOUNT
700 RED BROOK BLVD
OWINGS MILLS, MD 21121
Inverse Mid-Cap Strategy Fund Class A 904.57 9.92% VIOLET B ZEIGLER OR, RHONDA L SORENSON OR,
KENTON D ZEIGLER JTWROS
8106 HIGHWOOD DRIVE #Y310
BLOOMINGTON, MN 55438
Inverse Mid-Cap Strategy Fund Class A 814.10 8.93% RBC CAPITAL MARKETS CORP
1231 SOUTH CARROLLTON
NEW ORLEANS LA 70118-2025
Inverse Mid-Cap Strategy Fund Class A 642.71 7.05% RBC CAPITAL MARKETS CORP
26 SWAN ST
NEW ORLEANS LA 70124-4405
Inverse Mid-Cap Strategy Fund Class A 641.06 7.03% JAMES D KEPPLER (RIRA)
2670 SHADOW WOOD COURT
CHASKA, MN 55318
Inverse Mid-Cap Strategy Fund Class C 10,454.88 49.05% FIRST CLEARING, LLC
2801 MARKET STREET
SAINT LOUIS, MO 63137
Inverse Mid-Cap Strategy Fund Class C 4,000.00 18.77% Brown Brothers Harriman & Co.
525 Washington Blvd.
Jersey City, NJ 07310
Inverse Mid-Cap Strategy Fund Class C 1,294.61 6.07% MICHAEL S SABIN (RIRA)
3600 WEST 83RD ST
MINNEAPOLIS, MN 55431
Inverse Mid-Cap Strategy Fund Class H 274,129.63 63.77% NATIONAL FINANCIAL SVCS CORP
200 LIBERTY STREET
NEW YORK, NY 10281-10031
Inverse Mid-Cap Strategy Fund Class H 48,464.12 11.27% SCHWAB, SPECIAL CUSTODY ACCOUNT
ATTN: MUTUAL FUNDS TEAM E, 101 MONTGOMERY
STREET
SAN FRANCISCO, CA 94104-4147
K-26
PERCENTAGE
AMOUNT OF OF THE
NAME OF THE FUND SHARE CLASS SHARES OWNED CLASS NAME AND ADDRESS OF THE BENEFICIAL OWNER
-------------------------------------------------------------------------------------------------------------------------------
Inverse Mid-Cap Strategy Fund Class H 39,617.02 9.22% TRUST COMPANY OF AMERICA
P O BOX 6503
ENGLEWOOD, CO 80126
Inverse NASDAQ-100(R) Strategy Advisor Class 225,109.94 90.33% LPL FINANCIAL
Fund 9785 TOWNE CENTRE DRIVE
SAN DIEGO CA 92121-2038
Inverse NASDAQ-100(R) Strategy Class A 30,180.39 50.76% NFS LLC FEBO CUSTOMER
Fund 108-23 86TH STREET
OZONE PARK, NY 11417
Inverse NASDAQ-100(R) Strategy Class A 4,153.90 6.97% PERSHING LLC
Fund P. O. BOX 2052
JERSEY CITY, NJ 07303-10094
Inverse NASDAQ-100(R) Strategy Class C 20,953.30 22.13% NFS LLC
Fund 4860 GLENWOOD ST
LITTLE NECK, NY 11362-1423
Inverse NASDAQ-100(R) Strategy Class C 17,621.23 18.62% FIRST CLEARING, LLC
Fund 2801 MARKET STREET
SAINT LOUIS, MO 63138
Inverse NASDAQ-100(R) Strategy Class C 12,213.03 12.89% DONALDSON LUFKIN JENRETTE, SECURITIES
Fund CORPORATION INC.
P.O. BOX 2052
JERSEY CITY, NJ 07303
Inverse NASDAQ-100(R) Strategy Class C 5,120.95 5.41% MORGAN STANLEY SMITH BARNEY
Fund HARBORSIDE FINANCIAL CENTER, PLAZA 2, 3RD
FLOOR
JERSEY CITY, NJ 07318
Inverse NASDAQ-100(R) Strategy Investor Class 190,149.74 13.51% SCHWAB, SPECIAL CUSTODY ACCOUNT
Fund ATTN: MUTUAL FUNDS TEAM E, 101 MONTGOMERY
STREET
SAN FRANCISCO, CA 94104-4148
Inverse NASDAQ-100(R) Strategy Investor Class 160,780.41 11.42% NATIONAL FINANCIAL SVCS CORP
Fund 200 LIBERTY STREET
NEW YORK, NY 10281-10032
Inverse NASDAQ-100(R) Strategy Investor Class 142,306.10 10.11% TD AMERITRADE INC.
Fund PO BOX 2226
OMAHA, NE 68103-2244
Inverse NASDAQ-100(R) Strategy Investor Class 140,599.22 9.99% TRUST COMPANY OF AMERICA
Fund P O BOX 6503
ENGLEWOOD, CO 80127
Inverse NASDAQ-100(R) Strategy Investor Class 116,317.57 8.31% PERSHING LLC
Fund P. O. BOX 2052
JERSEY CITY, NJ 07303-10039
Inverse NASDAQ-100(R) Strategy Investor Class 78,784.74 5.60% THOMAS H THELEN (RIRA)
Fund 13-5725 KAPOHO KALAPANA ROAD
PAHOA, HI 96778
Inverse Russell 2000(R) Strategy Class A 13,355.47 26.33% PERSHING LLC
Fund P. O. BOX 2052
JERSEY CITY, NJ 07303-10040
Inverse Russell 2000(R) Strategy Class A 10,997.80 21.62% AMERITRADE INC
Fund PO BOX 2226
OMAHA NE 68103-2236
Inverse Russell 2000(R) Strategy Class A 7,391.42 14.55% FIRST CLEARING, LLC
Fund 2801 MARKET STREET
SAINT LOUIS, MO 63139
K-27
PERCENTAGE
AMOUNT OF OF THE
NAME OF THE FUND SHARE CLASS SHARES OWNED CLASS NAME AND ADDRESS OF THE BENEFICIAL OWNER
-------------------------------------------------------------------------------------------------------------------------------
Inverse Russell 2000(R) Strategy Class A 3,214.59 6.35% LPL FINANCIAL
Fund 9785 TOWNE CENTRE DRIVE
SAN DIEGO CA 92121-2052
Inverse Russell 2000(R) Strategy Class A 2,686.05 5.28% KIMBERLY A MCCARTY (RIRA)
Fund 7167 SW ARNOLD RD
PLATTSBURG, MO 64477
Inverse Russell 2000(R) Strategy Class C 40,422.82 40.96% FIRST CLEARING, LLC
Fund 2801 MARKET STREET
SAINT LOUIS, MO 63140
Inverse Russell 2000(R) Strategy Class C 8,476.43 8.58% PERSHING LLC
Fund P. O. BOX 2052
JERSEY CITY, NJ 07303-10100
Inverse Russell 2000(R) Strategy Class C 5,303.13 5.37% SCOTT W KLEIN (RIRA)
Fund 7490 MACEDAY LAKE ROAD
WATERFORD, MI 48329
Inverse Russell 2000(R) Strategy Class H 1,269,478.60 57.65% SCHWAB, SPECIAL CUSTODY ACCOUNT
Fund ATTN: MUTUAL FUNDS TEAM E, 101 MONTGOMERY
STREET
SAN FRANCISCO, CA 94104-4149
Inverse Russell 2000(R) Strategy Class H 301,887.87 13.71% NATIONAL FINANCIAL SVCS CORP
Fund 200 LIBERTY STREET
NEW YORK, NY 10281-10033
Inverse Russell 2000(R) Strategy Class H 273,949.07 12.68% LPL FINANCIAL
Fund 9785 TOWNE CENTRE DRIVE
SAN DIEGO CA 92121-2049
Inverse S&P 500 Strategy Fund Advisor Class 343,629.97 50.63% TD AMERITRADE INC.
PO BOX 2226
OMAHA, NE 68103-2245
Inverse S&P 500 Strategy Fund Advisor Class 111,042.53 16.37% LPL FINANCIAL
9785 TOWNE CENTRE DRIVE
SAN DIEGO CA 92121-2043
Inverse S&P 500 Strategy Fund Advisor Class 84,529.16 12.45% NATIONWIDE TRUST COMPANY
P.O. BOX 182029
COLUMBUS, OH 43218-2041
Inverse S&P 500 Strategy Fund Advisor Class 36,454.08 5.37% NATIONWIDE TRUST COMPANY
P.O. BOX 182029
COLUMBUS, OH 43218-2029
Inverse S&P 500 Strategy Fund Class A 91,551.17 24.07% AMERITRADE INC
PO BOX 2226
OMAHA NE 68103-2229
Inverse S&P 500 Strategy Fund Class A 55,610.62 14.58% PERSHING LLC
P. O. BOX 2052
JERSEY CITY, NJ 07303-10095
Inverse S&P 500 Strategy Fund Class A 39,324.96 10.32% LPL FINANCIAL
9785 TOWNE CENTRE DRIVE
SAN DIEGO CA 92121-2039
Inverse S&P 500 Strategy Fund Class A 30,883.89 8.11% FIRST CLEARING, LLC
2801 MARKET STREET
SAINT LOUIS, MO 63141
Inverse S&P 500 Strategy Fund Class A 24,981.30 6.55% MG Trust Company
700 17th Street
Denver, CO 80202
K-28
PERCENTAGE
AMOUNT OF OF THE
NAME OF THE FUND SHARE CLASS SHARES OWNED CLASS NAME AND ADDRESS OF THE BENEFICIAL OWNER
-------------------------------------------------------------------------------------------------------------------------------
Inverse S&P 500 Strategy Fund Class C 159,630.45 34.80% FIRST CLEARING, LLC
2801 MARKET STREET
SAINT LOUIS, MO 63142
Inverse S&P 500 Strategy Fund Class C 85,713.29 18.72% DONALDSON LUFKIN JENRETTE, SECURITIES
CORPORATION INC.
P.O. BOX 2052
JERSEY CITY, NJ 07303
Inverse S&P 500 Strategy Fund Class C 35,871.99 7.82% NFS LLC
P O BOX 876
PARK CITY, UT 84060
Inverse S&P 500 Strategy Fund Class C 25,436.45 5.55% LPL FINANCIAL
9785 TOWNE CENTRE DRIVE
SAN DIEGO CA 92121-2040
Inverse S&P 500 Strategy Fund Class C 23,013.26 5.02% MORGAN STANLEY SMITH BARNEY
HARBORSIDE FINANCIAL CENTER, PLAZA 2, 3RD
FLOOR
JERSEY CITY, NJ 07319
Inverse S&P 500 Strategy Fund Investor Class 5,811,646.78 55.10% SCHWAB, SPECIAL CUSTODY ACCOUNT
ATTN: MUTUAL FUNDS TEAM E, 101 MONTGOMERY
STREET
SAN FRANCISCO, CA 94104-4150
Inverse S&P 500 Strategy Fund Investor Class 1,979,572.12 18.77% NATIONAL FINANCIAL SVCS CORP
200 LIBERTY STREET
NEW YORK, NY 10281-10034
Inverse S&P 500 Strategy Fund Investor Class 532,133.38 5.05% TD AMERITRADE INC.
PO BOX 2226
OMAHA, NE 68103-2246
Investor2 Money Market Class B 220,760.65 6.64% NFS LLC
5 ANNELLO WAY
MIDDLETOWN, CT 06457
Investor2 Money Market Class C 484,457.26 19.57% ALBERT R AITKIN (IRA)
13737 FAIRLAWN AVE
APPLE VALLEY, MN 55124
Investor2 Money Market Class C 134,440.21 5.43% RODNEY L ZENT (403B)
8418 SHADOW OAKS
COLLEGE STA TX 77845-4602
Japan 2x Strategy Fund Class A 47,080.72 51.54% FIRST CLEARING, LLC
2801 MARKET STREET
SAINT LOUIS, MO 63143
Japan 2x Strategy Fund Class A 29,505.94 32.31% PERSHING LLC
P. O. BOX 2052
JERSEY CITY, NJ 07303-10109
Japan 2x Strategy Fund Class A 6,627.38 7.25% PENSON FINANCIAL SERVICES, INC.
1700 PACIFIC AVENUE, SUITE 1400
DALLAS, TX 75202
Japan 2x Strategy Fund Class C 2,594.48 25.44% LPL FINANCIAL
9785 TOWNE CENTRE DRIVE
SAN DIEGO CA 92121-2046
Japan 2x Strategy Fund Class C 1,507.16 14.78% RBC CAPITAL MARKETS CORP
12525 58TH AVENUE NORTH
PLYMOUTH MN 55442-1521
Japan 2x Strategy Fund Class C 1,412.48 13.86% PERSHING LLC
P. O. BOX 2052
JERSEY CITY, NJ 07303-10041
K-29
PERCENTAGE
AMOUNT OF OF THE
NAME OF THE FUND SHARE CLASS SHARES OWNED CLASS NAME AND ADDRESS OF THE BENEFICIAL OWNER
-------------------------------------------------------------------------------------------------------------------------------
Japan 2x Strategy Fund Class C 1,129.61 11.08% RBC CAPITAL MARKETS CORP
2511 BRIDLE CREEK TRAIL
CHANHASSEN MN 55317-9372
Japan 2x Strategy Fund Class C 1,078.00 10.57% STERLING TRUST CO.
PO BOX 2526
WACO, TX 76702-2527
Japan 2x Strategy Fund Class C 850.69 8.34% FIRST CLEARING, LLC
2801 MARKET STREET
SAINT LOUIS, MO 63144
Japan 2x Strategy Fund Class H 36,407.67 23.12% NATIONAL FINANCIAL SVCS CORP
200 LIBERTY STREET
NEW YORK, NY 10281-10035
Japan 2x Strategy Fund Class H 18,658.05 11.85% TRUST COMPANY OF AMERICA
P O BOX 6503
ENGLEWOOD, CO 80128
Japan 2x Strategy Fund Class H 18,333.32 11.64% LPL FINANCIAL
9785 TOWNE CENTRE DRIVE
SAN DIEGO CA 92121-2044
Japan 2x Strategy Fund Class H 16,744.81 10.63% ARNOLD GALMAN
1000 ROCK CREEK RD
BRYN MAWR, PA 19010
Japan 2x Strategy Fund Class H 10,555.68 6.70% SCHWAB, SPECIAL CUSTODY ACCOUNT
ATTN: MUTUAL FUNDS TEAM E, 101 MONTGOMERY
STREET
SAN FRANCISCO, CA 94104-4151
Leisure Fund Advisor Class 7,498.29 34.54% NATIONAL FINANCIAL SVCS CORP
200 LIBERTY STREET
NEW YORK, NY 10281-10036
Leisure Fund Advisor Class 4,189.22 19.30% GENWORTH FINANCIAL TRUST COMPANY
3200 N CENTRAL, SUITE 612
PHOENIX, AZ 85014
Leisure Fund Advisor Class 3,402.07 15.67% NATIONWIDE TRUST COMPANY
P.O. BOX 182029
COLUMBUS, OH 43218-2042
Leisure Fund Advisor Class 2,605.40 11.94% LPL FINANCIAL
9785 TOWNE CENTRE DRIVE
SAN DIEGO CA 92121-2031
Leisure Fund Class A 6,101.68 40.21% PERSHING LLC
P. O. BOX 2052
JERSEY CITY, NJ 07303-10042
Leisure Fund Class A 1,072.05 7.07% AMERICAN ENTERPRISE INV SVCS
707 2ND AVENUE SOUTH
MINNEAPOLIS, MN 55404
Leisure Fund Class A 844.97 5.57% JOHN F ST JOHN (IRA)
107 CROSSWIND CT
CORAOPOLIS, PA 15108-9166
Leisure Fund Class A 819.30 5.40% FIRST CLEARING, LLC
2801 MARKET STREET
SAINT LOUIS, MO 63145
Leisure Fund Class C 2,667.79 24.78% PERSHING LLC
P. O. BOX 2052
JERSEY CITY, NJ 07303-10101
K-30
PERCENTAGE
AMOUNT OF OF THE
NAME OF THE FUND SHARE CLASS SHARES OWNED CLASS NAME AND ADDRESS OF THE BENEFICIAL OWNER
-------------------------------------------------------------------------------------------------------------------------------
Leisure Fund Class C 1,864.99 17.33% CHARLES F ELLIS (IRA)
PO BOX 1616
HILLTOP LAKES, TX 77871
Leisure Fund Class C 1,331.85 12.38% STIFEL NICOLAUS & CO INC.
501 NORTH BROADWAY
ST LOUIS MO 63102
Leisure Fund Class C 1,190.96 11.06% FIRST CLEARING, LLC
2801 MARKET STREET
SAINT LOUIS, MO 63146
Leisure Fund Class C 562.16 5.22% SCHWAB, SPECIAL CUSTODY ACCOUNT
ATTN: MUTUAL FUNDS TEAM E, 101 MONTGOMERY
STREET
SAN FRANCISCO, CA 94104-4152
Leisure Fund Investor Class 27,852.17 51.15% SCHWAB, SPECIAL CUSTODY ACCOUNT
ATTN: MUTUAL FUNDS TEAM E, 101 MONTGOMERY
STREET
SAN FRANCISCO, CA 94104-4153
Leisure Fund Investor Class 7,193.39 13.21% NATIONAL FINANCIAL SVCS CORP
200 LIBERTY STREET
NEW YORK, NY 10281-10037
Leisure Fund Investor Class 4,976.44 9.14% ROBERT P BUCHENBERGER TRUST
8602 EAST AMHERST DRIVE, UNIT F
DENVER, CO 80231
Long Short Equity Strategy Fund Class A 60,211.89 41.19% RYDEX ALTERNATIVE STRATEGIES ALLOCATION
FUND
9601 BLACKWELL RD, STE 500
ROCKVILLE, MD 20853
Long Short Equity Strategy Fund Class A 25,107.88 17.18% RYDEX EPT MODERATE
9601 BLACKWELL RD, STE 500
ROCKVILLE, MD 20853
Long Short Equity Strategy Fund Class A 24,333.13 16.64% TRUST COMPANY OF AMERICA
P O BOX 6503
ENGLEWOOD, CO 80119
Long Short Equity Strategy Fund Class A 9,576.83 6.55% RAYMOND JAMES & ASSOC INC.
25222 PRADO DEL MISTERIO
CALABASAS CA 91302-3600222
Long Short Equity Strategy Fund Class C 2,077.14 25.40% MORGAN KEEGAN & CO.
5026 KINGSWOOD DRIVE
ROSWELL GA 30075
Long Short Equity Strategy Fund Class C 1,429.90 17.49% LPL FINANCIAL
9785 TOWNE CENTRE DRIVE
SAN DIEGO CA 92121-2030
Long Short Equity Strategy Fund Class C 1,038.44 12.70% ROBERT W BAIRD & CO. INC.
777 EAST WISCONSIN AVENUE
MILWAUKEE WI 53202-5391
Long Short Equity Strategy Fund Class C 760.40 9.30% PERSHING LLC
P. O. BOX 2052
JERSEY CITY, NJ 07303-10043
Long Short Equity Strategy Fund Class C 429.17 5.25% RYDEX DISTRIBUTORS
9601 BLACKWELL RD, STE 500
ROCKVILLE, MD 20857
Long Short Equity Strategy Fund Class H 23,483.70 33.19% RYDEX VA ALTERNATIVE STRATEGIES,
ALLOCATION FUND
9601 BLACKWELL RD, STE 500
ROCKVILLE, MD 20852
K-31
PERCENTAGE
AMOUNT OF OF THE
NAME OF THE FUND SHARE CLASS SHARES OWNED CLASS NAME AND ADDRESS OF THE BENEFICIAL OWNER
-------------------------------------------------------------------------------------------------------------------------------
Long Short Equity Strategy Fund Class H 18,444.27 26.07% RYDEX EPT MODERATE -VA
9601 BLACKWELL RD, STE 500
ROCKVILLE, MD 20852
Long Short Equity Strategy Fund Class H 14,777.66 20.89% SCHWAB, SPECIAL CUSTODY ACCOUNT
ATTN: MUTUAL FUNDS TEAM E, 101 MONTGOMERY
STREET
SAN FRANCISCO, CA 94104-4154
Long Short Equity Strategy Fund Institutional 4,168.82 90.67% SCHWAB, SPECIAL CUSTODY ACCOUNT
Class ATTN: MUTUAL FUNDS TEAM E, 101 MONTGOMERY
STREET
SAN FRANCISCO, CA 94104-4155
Long Short Equity Strategy Fund Institutional 429.03 9.33% RYDEX DISTRIBUTORS
Class 9601 BLACKWELL RD, STE 500
ROCKVILLE, MD 20858
Long Short Internet Rate Strategy Class A 133,794.55 7.98% PERSHING LLC
Fund P. O. BOX 2052
JERSEY CITY, NJ 07303-10044
Long Short Internet Rate Strategy Class A 117,759.77 7.04% RYDEX EPT MODERATE
Fund 9601 BLACKWELL RD, STE 500
ROCKVILLE, MD 20854
Long Short Internet Rate Strategy Class A 100,114.48 5.98% RYDEX ALTERNATIVE STRATEGIES ALLOCATION
Fund FUND
9601 BLACKWELL RD, STE 500
ROCKVILLE, MD 20854
Long Short Internet Rate Strategy Class C 143,228.84 19.20% LPL FINANCIAL
Fund 9785 TOWNE CENTRE DRIVE
SAN DIEGO CA 92121-1990
Long Short Internet Rate Strategy Class C 134,374.93 18.07% FIRST CLEARING, LLC
Fund 2801 MARKET STREET
SAINT LOUIS, MO 63147
Long Short Internet Rate Strategy Class H 432,515.84 29.30% SCHWAB, SPECIAL CUSTODY ACCOUNT
Fund ATTN: MUTUAL FUNDS TEAM E, 101 MONTGOMERY
STREET
SAN FRANCISCO, CA 94104-4156
Long Short Internet Rate Strategy Class H 349,195.27 23.66% NATIONAL FINANCIAL SVCS CORP
Fund 200 LIBERTY STREET
NEW YORK, NY 10281-10038
Long Short Internet Rate Strategy Class H 272,104.80 18.41% LPL FINANCIAL
Fund 9785 TOWNE CENTRE DRIVE
SAN DIEGO CA 92121-2042
Long Short Internet Rate Strategy Class H 157,824.81 10.69% TD AMERITRADE INC.
Fund PO BOX 2226
OMAHA, NE 68103-2247
Long Short Internet Rate Strategy Class H 87,235.65 5.92% RYDEX EPT MODERATE -VA
Fund 9601 BLACKWELL RD, STE 500
ROCKVILLE, MD 20853
Long Short Internet Rate Strategy Class H 79,490.29 5.39% PERSHING LLC
Fund P. O. BOX 2052
JERSEY CITY, NJ 07303-10045
Long Short Internet Rate Strategy Institutional 862,305.77 53.69% SCHWAB, SPECIAL CUSTODY ACCOUNT
Fund Class ATTN: MUTUAL FUNDS TEAM E, 101 MONTGOMERY
STREET
SAN FRANCISCO, CA 94104-4157
K-32
PERCENTAGE
AMOUNT OF OF THE
NAME OF THE FUND SHARE CLASS SHARES OWNED CLASS NAME AND ADDRESS OF THE BENEFICIAL OWNER
-------------------------------------------------------------------------------------------------------------------------------
Long Short Internet Rate Strategy Institutional 302,980.44 18.96% PERSHING LLC
Fund Class P. O. BOX 2052
JERSEY CITY, NJ 07303-10046
Long Short Internet Rate Strategy Institutional 148,481.91 9.25% NATIONAL FINANCIAL SVCS CORP
Fund Class 200 LIBERTY STREET
NEW YORK, NY 10281-10001
Long Short Internet Rate Strategy Institutional 110,779.14 6.90% FIRST CLEARING, LLC
Fund Class 2801 MARKET STREET
SAINT LOUIS, MO 63148
Long Short Internet Rate Strategy Institutional 93,711.04 5.84% RSBCO Attn: Operations
Fund Class P.O. Drawer 1410
Ruston LA 712731410
Long Short Internet Rate Strategy Institutional 85,191.62 5.30% TD AMERITRADE INC.
Fund Class PO BOX 2226
OMAHA, NE 68103-2248
Long/Short Commodities Class A 1,304,710.69 30.42% MORGAN STANLEY SMITH BARNEY
Strategy Fund HARBORSIDE FINANCIAL CENTER, PLAZA 2, 3RD
FLOOR
JERSEY CITY, NJ 07320
Long/Short Commodities Class A 546,030.28 11.42% PERSHING LLC
Strategy Fund P. O. BOX 2052
JERSEY CITY, NJ 07303-10047
Long/Short Commodities Class C 202,619.60 15.05% FIRST CLEARING, LLC
Strategy Fund 2801 MARKET STREET
SAINT LOUIS, MO 63149
Long/Short Commodities Class C 143,653.81 10.68% LPL FINANCIAL
Strategy Fund 9785 TOWNE CENTRE DRIVE
SAN DIEGO CA 92121-2033
Long/Short Commodities Class C 125,521.62 9.33% MORGAN STANLEY SMITH BARNEY
Strategy Fund HARBORSIDE FINANCIAL CENTER, PLAZA 2, 3RD
FLOOR
JERSEY CITY, NJ 07321
Long/Short Commodities Class C 75,425.63 5.63% PERSHING LLC
Strategy Fund P. O. BOX 2052
JERSEY CITY, NJ 07303-10048
Long/Short Commodities Class H 2,237,471.10 25.86% NATIONAL FINANCIAL SVCS CORP
Strategy Fund 200 LIBERTY STREET
NEW YORK, NY 10281-10039
Long/Short Commodities Class H 1,746,430.71 20.18% SCHWAB, SPECIAL CUSTODY ACCOUNT
Strategy Fund ATTN: MUTUAL FUNDS TEAM E, 101 MONTGOMERY
STREET
SAN FRANCISCO, CA 94104-4158
Long/Short Commodities Class H 1,242,510.07 14.36% FIRST CLEARING, LLC
Strategy Fund 2801 MARKET STREET
SAINT LOUIS, MO 63150
Long/Short Commodities Class H 1,412,961.46 13.47% LPL FINANCIAL
Strategy Fund 9785 TOWNE CENTRE DRIVE
SAN DIEGO CA 92121-2032
Long/Short Commodities Class H 454,740.88 5.26% MERRILL LYNCH, PIERCE, FENNER & SMITH, INC.
Strategy Fund 4800 DEER LAKE DRIVE E, 3RD FLOOR
JACKSONVILLE, FL 32247
K-33
PERCENTAGE
AMOUNT OF OF THE
NAME OF THE FUND SHARE CLASS SHARES OWNED CLASS NAME AND ADDRESS OF THE BENEFICIAL OWNER
-------------------------------------------------------------------------------------------------------------------------------
Long/Short Commodities Class Y 416.50 100.00% RYDEX DISTRIBUTORS
Strategy Fund 9601 BLACKWELL RD, STE 500
ROCKVILLE, MD 20859
Long/Short Commodities Institutional 741,026.42 64.72% PERSHING LLC
Strategy Fund Class P. O. BOX 2052
JERSEY CITY, NJ 07303-10049
Long/Short Commodities Institutional 292,567.33 25.43% SCHWAB, SPECIAL CUSTODY ACCOUNT
Strategy Fund Class ATTN: MUTUAL FUNDS TEAM E, 101 MONTGOMERY
STREET
SAN FRANCISCO, CA 94104-4159
Long/Short Commodities Institutional 83,422.73 7.25% NATIONAL FINANCIAL SVCS CORP
Strategy Fund Class 200 LIBERTY STREET
NEW YORK, NY 10281-10002
Managed Futures Strategy Fund Class A 14,404,699.74 53.76% MORGAN STANLEY SMITH BARNEY
HARBORSIDE FINANCIAL CENTER, PLAZA 2, 3RD
FLOOR
JERSEY CITY, NJ 07322
Managed Futures Strategy Fund Class C 806,951.04 16.88% MORGAN STANLEY SMITH BARNEY
HARBORSIDE FINANCIAL CENTER, PLAZA 2, 3RD
FLOOR
JERSEY CITY, NJ 07323
Managed Futures Strategy Fund Class C 660,695.10 13.82% FIRST CLEARING, LLC
2801 MARKET STREET
SAINT LOUIS, MO 63151
Managed Futures Strategy Fund Class C 439,439.46 8.53% PERSHING LLC
P. O. BOX 2052
JERSEY CITY, NJ 07303-10050
Managed Futures Strategy Fund Class C 431,339.50 7.92% LPL FINANCIAL
9785 TOWNE CENTRE DRIVE
SAN DIEGO CA 92121-1983
Managed Futures Strategy Fund Class H 15,074,480.68 36.38% MORGAN STANLEY SMITH BARNEY, HOUSE
ACCOUNT
700 RED BROOK BLVD
OWINGS MILLS, MD 21122
Managed Futures Strategy Fund Class H 7,178,401.30 17.32% SCHWAB, SPECIAL CUSTODY ACCOUNT
ATTN: MUTUAL FUNDS TEAM E, 101 MONTGOMERY
STREET
SAN FRANCISCO, CA 94104-4160
Managed Futures Strategy Fund Class H 4,620,206.08 11.15% NATIONAL FINANCIAL SVCS CORP
200 LIBERTY STREET
NEW YORK, NY 10281-10040
Managed Futures Strategy Fund Class H 3,393,874.64 8.19% FIRST CLEARING, LLC
2801 MARKET STREET
SAINT LOUIS, MO 63152
Managed Futures Strategy Fund Class H 2,434,240.98 5.87% TD AMERITRADE INC.
PO BOX 2226
OMAHA, NE 68103-2249
Managed Futures Strategy Fund Class Y 16,077,996.04 98.03% SEI Private Trust Co.
Attn: Mutual Funds Administrator
One Freedom Valley Drive
Oaks, PA 19456
K-34
PERCENTAGE
AMOUNT OF OF THE
NAME OF THE FUND SHARE CLASS SHARES OWNED CLASS NAME AND ADDRESS OF THE BENEFICIAL OWNER
-------------------------------------------------------------------------------------------------------------------------------
Managed Futures Strategy Fund Institutional 2,537,895.46 57.58% SCHWAB, SPECIAL CUSTODY ACCOUNT
Class ATTN: MUTUAL FUNDS TEAM E, 101 MONTGOMERY
STREET
SAN FRANCISCO, CA 94104-4161
Managed Futures Strategy Fund Institutional 1,639,680.62 37.20% NATIONAL FINANCIAL SVCS CORP
Class 200 LIBERTY STREET
NEW YORK, NY 10281-10003
Mid-Cap 1.5x Strategy Fund Class A 8,125.69 29.56% PERSHING LLC
P. O. BOX 2052
JERSEY CITY, NJ 07303-10051
Mid-Cap 1.5x Strategy Fund Class A 3,372.22 12.27% STIFEL NICOLAUS & CO INC.
501 NORTH BROADWAY
ST LOUIS MO 63106
Mid-Cap 1.5x Strategy Fund Class A 3,055.73 11.11% MORGAN STANLEY SMITH BARNEY, HOUSE
ACCOUNT
700 RED BROOK BLVD
OWINGS MILLS, MD 21123
Mid-Cap 1.5x Strategy Fund Class A 2,651.11 9.64% RBC CAPITAL MARKETS CORP
7202 112TH AVE SE
NEW CASTLE WA 98056-1021
Mid-Cap 1.5x Strategy Fund Class A 2,229.17 8.10% LPL FINANCIAL
9785 TOWNE CENTRE DRIVE
SAN DIEGO CA 92121-1971
Mid-Cap 1.5x Strategy Fund Class A 1,384.86 5.03% FIRST CLEARING, LLC
2801 MARKET STREET
SAINT LOUIS, MO 63153
Mid-Cap 1.5x Strategy Fund Class C 54,814.18 27.23% D A DAVIDSON & CO
PO BOX 5015
GREAT FALLS MT 59405
Mid-Cap 1.5x Strategy Fund Class C 15,911.45 7.90% FIRST CLEARING, LLC
2801 MARKET STREET
SAINT LOUIS, MO 63154
Mid-Cap 1.5x Strategy Fund Class C 12,195.58 6.09% PERSHING LLC
P. O. BOX 2052
JERSEY CITY, NJ 07303-10052
Mid-Cap 1.5x Strategy Fund Class C 11,132.96 5.52% SCHWAB, SPECIAL CUSTODY ACCOUNT
ATTN: MUTUAL FUNDS TEAM E, 101 MONTGOMERY
STREET
SAN FRANCISCO, CA 94104-4162
Mid-Cap 1.5x Strategy Fund Class H 121,999.66 38.79% NATIONAL FINANCIAL SVCS CORP
200 LIBERTY STREET
NEW YORK, NY 10281-10041
Mid-Cap 1.5x Strategy Fund Class H 29,991.99 9.53% SCHWAB, SPECIAL CUSTODY ACCOUNT
ATTN: MUTUAL FUNDS TEAM E, 101 MONTGOMERY
STREET
SAN FRANCISCO, CA 94104-4163
Mid-Cap 1.5x Strategy Fund Class H 21,274.93 6.77% D A DAVIDSON & CO
PO BOX 5015
GREAT FALLS MT 59406
Multi-Hedge Strategies Fund Class A 140,253.00 23.29% MORGAN STANLEY SMITH BARNEY
HARBORSIDE FINANCIAL CENTER, PLAZA 2, 3RD
FLOOR
JERSEY CITY, NJ 07324
K-35
PERCENTAGE
AMOUNT OF OF THE
NAME OF THE FUND SHARE CLASS SHARES OWNED CLASS NAME AND ADDRESS OF THE BENEFICIAL OWNER
-------------------------------------------------------------------------------------------------------------------------------
Multi-Hedge Strategies Fund Class A 114,324.83 18.98% RYDEX ALTERNATIVE STRATEGIES ALLOCATION
FUND
9601 BLACKWELL RD, STE 500
ROCKVILLE, MD 20855
Multi-Hedge Strategies Fund Class A 113,106.53 18.78% RYDEX EPT MODERATE
9601 BLACKWELL RD, STE 500
ROCKVILLE, MD 20855
Multi-Hedge Strategies Fund Class A 44,813.33 7.44% FIRST CLEARING, LLC
2801 MARKET STREET
SAINT LOUIS, MO 63155
Multi-Hedge Strategies Fund Class A 35,757.08 5.96% LPL FINANCIAL
9785 TOWNE CENTRE DRIVE
SAN DIEGO CA 92121-1977
Multi-Hedge Strategies Fund Class C 141,536.11 28.17% MORGAN STANLEY SMITH BARNEY
HARBORSIDE FINANCIAL CENTER, PLAZA 2, 3RD
FLOOR
JERSEY CITY, NJ 07325
Multi-Hedge Strategies Fund Class C 121,528.92 24.19% FIRST CLEARING, LLC
2801 MARKET STREET
SAINT LOUIS, MO 63156
Multi-Hedge Strategies Fund Class C 45,516.50 9.04% LPL FINANCIAL
9785 TOWNE CENTRE DRIVE
SAN DIEGO CA 92121-2008
Multi-Hedge Strategies Fund Class C 36,252.25 7.17% PERSHING LLC
P. O. BOX 2052
JERSEY CITY, NJ 07303-10053
Multi-Hedge Strategies Fund Class H 237,136.72 19.20% SCHWAB, SPECIAL CUSTODY ACCOUNT
ATTN: MUTUAL FUNDS TEAM E, 101 MONTGOMERY
STREET
SAN FRANCISCO, CA 94104-4164
Multi-Hedge Strategies Fund Class H 212,324.61 17.19% NATIONAL FINANCIAL SVCS CORP
200 LIBERTY STREET
NEW YORK, NY 10281-10042
Multi-Hedge Strategies Fund Class H 163,815.00 13.27% FIRST CLEARING, LLC
2801 MARKET STREET
SAINT LOUIS, MO 63157
Multi-Hedge Strategies Fund Class H 129,172.25 10.46% PERSHING LLC
P. O. BOX 2052
JERSEY CITY, NJ 07303-10054
Multi-Hedge Strategies Fund Class H 68,741.91 5.60% LPL FINANCIAL
9785 TOWNE CENTRE DRIVE
SAN DIEGO CA 92121-1970
Multi-Hedge Strategies Fund Class H 64,297.08 5.21% TD AMERITRADE INC.
PO BOX 2226
OMAHA, NE 68103-2250
Multi-Hedge Strategies Fund Class H 61,700.11 5.00% MERRILL LYNCH, PIERCE, FENNER & SMITH, INC.
4800 DEER LAKE DRIVE E, 3RD FLOOR
JACKSONVILLE, FL 32248
Multi-Hedge Strategies Fund Institutional 12,704.47 96.32% NATIONAL FINANCIAL SVCS CORP
Class 200 LIBERTY STREET
NEW YORK, NY 10281-10004
K-36
PERCENTAGE
AMOUNT OF OF THE
NAME OF THE FUND SHARE CLASS SHARES OWNED CLASS NAME AND ADDRESS OF THE BENEFICIAL OWNER
-------------------------------------------------------------------------------------------------------------------------------
NASDAQ-100(R) Fund Advisor Class 171,667.00 20.68% NATIONWIDE TRUST COMPANY
P.O. BOX 182029
COLUMBUS, OH 43218-2043
NASDAQ-100(R) Fund Advisor Class 155,209.58 18.70% NATIONAL FINANCIAL SVCS CORP
200 LIBERTY STREET
NEW YORK, NY 10281-10043
NASDAQ-100(R) Fund Advisor Class 112,975.01 13.64% LPL FINANCIAL
9785 TOWNE CENTRE DRIVE
SAN DIEGO CA 92121-2016
NASDAQ-100(R) Fund Advisor Class 87,332.70 10.52% TD AMERITRADE INC.
PO BOX 2226
OMAHA, NE 68103-2251
NASDAQ-100(R) Fund Advisor Class 81,670.91 9.84% SEI Private Trust Co
Attn: Mutual Fund Admin
One Freedom Valley Dr
Oaks, PA 19456
NASDAQ-100(R) Fund Class A 124,550.66 22.49% AMERITRADE INC
PO BOX 2226
OMAHA NE 68103-2241
NASDAQ-100(R) Fund Class A 123,363.40 22.36% MORGAN STANLEY SMITH BARNEY
HARBORSIDE FINANCIAL CENTER, PLAZA 2, 3RD
FLOOR
JERSEY CITY, NJ 07326
NASDAQ-100(R) Fund Class A 91,446.19 16.57% PERSHING LLC
P. O. BOX 2052
JERSEY CITY, NJ 07303-10055
NASDAQ-100(R) Fund Class A 61,853.69 11.21% CAPITAL BANK & TRUST COMPANY
8515 E ORCHARD ROAD, 2T2
ENGLEWOOD, CO 80111
NASDAQ-100(R) Fund Class A 33,149.12 6.01% FIRST CLEARING, LLC
2801 MARKET STREET
SAINT LOUIS, MO 63158
NASDAQ-100(R) Fund Class C 155,443.85 16.61% FIRST CLEARING, LLC
2801 MARKET STREET
SAINT LOUIS, MO 63159
NASDAQ-100(R) Fund Class C 104,290.05 11.15% MORGAN STANLEY SMITH BARNEY
HARBORSIDE FINANCIAL CENTER, PLAZA 2, 3RD
FLOOR
JERSEY CITY, NJ 07327
NASDAQ-100(R) Fund Class C 64,364.78 6.90% NFS LLC
SHELBY TWP, MI 48315
NASDAQ-100(R) Fund Class C 63,913.56 6.87% DONALDSON LUFKIN JENRETTE, SECURITIES
CORPORATION INC.
P.O. BOX 2052
JERSEY CITY, NJ 07303-9998-10006
NASDAQ-100(R) Fund Class C 53,149.22 5.69% LPL FINANCIAL
9785 TOWNE CENTRE DRIVE
SAN DIEGO CA 92121-2050
NASDAQ-100(R) Fund Investor Class 11,930,992.21 32.80% SCHWAB, SPECIAL CUSTODY ACCOUNT
ATTN: MUTUAL FUNDS TEAM E, 101 MONTGOMERY
STREET
SAN FRANCISCO, CA 94104-4165
K-37
PERCENTAGE
AMOUNT OF OF THE
NAME OF THE FUND SHARE CLASS SHARES OWNED CLASS NAME AND ADDRESS OF THE BENEFICIAL OWNER
-------------------------------------------------------------------------------------------------------------------------------
NASDAQ-100(R) Fund Investor Class 6,221,279.09 17.11% NATIONAL FINANCIAL SVCS CORP
200 LIBERTY STREET
NEW YORK, NY 10281-10044
NASDAQ-100(R) Fund Investor Class 2,162,665.58 5.95% TD AMERITRADE INC.
PO BOX 2226
OMAHA, NE 68103-2252
Nova Fund Advisor Class 67,898.77 40.95% NATIONWIDE TRUST COMPANY
P.O. BOX 182029
COLUMBUS, OH 43218-2044
Nova Fund Advisor Class 16,570.00 9.99% TD AMERITRADE INC.
PO BOX 2226
OMAHA, NE 68103-2253
Nova Fund Advisor Class 13,968.03 8.42% NATIONAL FINANCIAL SVCS CORP
200 LIBERTY STREET
NEW YORK, NY 10281-10045
Nova Fund Advisor Class 9,957.03 6.00% PERSHING LLC
P. O. BOX 2052
JERSEY CITY, NJ 07303-10056
Nova Fund Class A 7,688.80 13.13% MORGAN STANLEY SMITH BARNEY, HOUSE
ACCOUNT
700 RED BROOK BLVD
OWINGS MILLS, MD 21124
Nova Fund Class A 7,045.53 12.03% PERSHING LLC
P. O. BOX 2052
JERSEY CITY, NJ 07303-10057
Nova Fund Class A 5,719.77 9.76% RBC CAPITAL MARKETS CORP
282 KAREN DR
ORANGE CT 06477-2936
Nova Fund Class A 5,434.38 9.28% FIRST CLEARING, LLC
2801 MARKET STREET
SAINT LOUIS, MO 63160
Nova Fund Class A 5,439.78 9.28% LPL FINANCIAL
9785 TOWNE CENTRE DRIVE
SAN DIEGO CA 92121-1988
Nova Fund Class A 4,388.74 7.49% NTC & CO
PO Box 173859
DENVER CO 80217
Nova Fund Class A 3,730.19 6.37% NFS LLC
928 GENERAL GEORGE PATTON ROAD
NASHVILLE, TN 37221
Nova Fund Class A 3,082.79 5.26% CATHERINE D FECHNER
411 POPLAR AVE
MAYWOOD, NJ 07607
Nova Fund Class A 3,012.96 5.14% DENNIS H WILLIAMSON (RIRA)
1013 LOUGHBOROUGH CT
WHEATON, IL 60189
Nova Fund Class C 115,495.88 28.79% FIRST CLEARING, LLC
2801 MARKET STREET
SAINT LOUIS, MO 63161
Nova Fund Class C 64,614.99 16.10% DONALDSON LUFKIN JENRETTE, SECURITIES
CORPORATION INC.
P.O. BOX 2052
JERSEY CITY, NJ 07303-9998-10007
K-38
PERCENTAGE
AMOUNT OF OF THE
NAME OF THE FUND SHARE CLASS SHARES OWNED CLASS NAME AND ADDRESS OF THE BENEFICIAL OWNER
-------------------------------------------------------------------------------------------------------------------------------
Nova Fund Investor Class 327,737.67 23.31% NATIONAL FINANCIAL SVCS CORP
200 LIBERTY STREET
NEW YORK, NY 10281-10046
Nova Fund Investor Class 310,578.39 22.09% SCHWAB, SPECIAL CUSTODY ACCOUNT
ATTN: MUTUAL FUNDS TEAM E, 101 MONTGOMERY
STREET
SAN FRANCISCO, CA 94104-4166
Nova Fund Investor Class 95,735.03 6.81% TD AMERITRADE INC.
PO BOX 2226
OMAHA, NE 68103-2254
Precious Metals Fund Advisor Class 219,645.80 60.19% TRUST COMPANY OF AMERICA
P O BOX 6503
ENGLEWOOD, CO 80116
Precious Metals Fund Advisor Class 50,253.29 13.77% NATIONAL FINANCIAL SVCS CORP
200 LIBERTY STREET
NEW YORK, NY 10281-10047
Precious Metals Fund Advisor Class 24,960.42 6.84% NATIONWIDE TRUST COMPANY
P.O. BOX 182029
COLUMBUS, OH 43218-2045
Precious Metals Fund Advisor Class 24,260.67 6.65% TD AMERITRADE INC.
PO BOX 2226
OMAHA, NE 68103-2255
Precious Metals Fund Class A 26,976.90 23.69% PERSHING LLC
P. O. BOX 2052
JERSEY CITY, NJ 07303-10058
Precious Metals Fund Class A 15,471.36 13.56% FIRST CLEARING, LLC
2801 MARKET STREET
SAINT LOUIS, MO 63162
Precious Metals Fund Class A 15,461.24 13.49% LPL FINANCIAL
9785 TOWNE CENTRE DRIVE
SAN DIEGO CA 92121-1985
Precious Metals Fund Class A 11,678.01 10.26% NFS LLC
4302 W QUAIL RIDGE DR
BOISE, ID 83703-3843
Precious Metals Fund Class A 7,306.16 6.40% AMERITRADE INC
PO BOX 2226
OMAHA NE 68103-2230
Precious Metals Fund Class A 6,302.11 5.53% WILLIAMS MARITAL TRUST
6413 JOE ED WAY
BAKERSFIELD, CA 93308
Precious Metals Fund Class C 147,310.29 32.63% MORGAN STANLEY SMITH BARNEY
HARBORSIDE FINANCIAL CENTER
PLAZA 2, 3RD FLOOR
JERSEY CITY, NJ 07328
Precious Metals Fund Class C 54,408.55 12.05% FIRST CLEARING, LLC
3130 COUNTRY BLUFF DR.
ST. CHARLES MO 63301-3741
Precious Metals Fund Class C 32,912.10 7.29% KINDIG KURT L INC
501 NORTH BROADWAY
ST LOUIS MO 63102
Precious Metals Fund Class C 29,558.17 6.47% PERSHING LLC
P. O. BOX 2052
JERSEY CITY, NJ 07303-10059
K-39
PERCENTAGE
AMOUNT OF OF THE
NAME OF THE FUND SHARE CLASS SHARES OWNED CLASS NAME AND ADDRESS OF THE BENEFICIAL OWNER
-------------------------------------------------------------------------------------------------------------------------------
Precious Metals Fund Class C 26,931.58 5.94% LPL FINANCIAL
9785 TOWNE CENTRE DRIVE
SAN DIEGO CA 92121-2022
Precious Metals Fund Investor Class 201,113.67 17.30% NATIONAL FINANCIAL SVCS CORP
200 LIBERTY STREET
NEW YORK, NY 10281-10048
Precious Metals Fund Investor Class 128,247.88 11.03% SCHWAB, SPECIAL CUSTODY ACCOUNT
ATTN: MUTUAL FUNDS TEAM E, 101 MONTGOMERY
STREET
SAN FRANCISCO, CA 94104-4167
Real Estate Fund Class A 41,201.24 32.42% AMERITRADE INC
PO BOX 2226
OMAHA NE 68103-2238
Real Estate Fund Class A 29,832.26 23.47% RYDEX EPT MODERATE
9601 BLACKWELL RD, STE 500
ROCKVILLE, MD 20856
Real Estate Fund Class A 27,311.01 21.49% RYDEX ALTERNATIVE STRATEGIES ALLOCATION
FUND
9601 BLACKWELL RD, STE 500
ROCKVILLE, MD 20856
Real Estate Fund Class A 12,467.75 9.81% PERSHING LLC
P. O. BOX 2052
JERSEY CITY, NJ 07303-10060
Real Estate Fund Class A 8,356.44 6.59% LPL FINANCIAL
9785 TOWNE CENTRE DRIVE
SAN DIEGO CA 92121-1968
Real Estate Fund Class C 12,652.37 25.58% SCHWAB, SPECIAL CUSTODY ACCOUNT
ATTN: MUTUAL FUNDS TEAM E, 101 MONTGOMERY
STREET
SAN FRANCISCO, CA 94104-4168
Real Estate Fund Class C 8,228.99 16.63% PERSHING LLC
P. O. BOX 2052
JERSEY CITY, NJ 07303-10061
Real Estate Fund Class C 7,993.36 16.15% LPL FINANCIAL
9785 TOWNE CENTRE DRIVE
SAN DIEGO CA 92121-2051
Real Estate Fund Class C 5,962.18 12.06% FIRST CLEARING, LLC
2801 MARKET STREET
SAINT LOUIS, MO 63163
Real Estate Fund Class H 90,219.71 33.78% NATIONAL FINANCIAL SVCS CORP
200 LIBERTY STREET
NEW YORK, NY 10281-10049
Real Estate Fund Class H 29,983.48 11.23% FIRST CLEARING, LLC
2801 MARKET STREET
SAINT LOUIS, MO 63164
Real Estate Fund Class H 24,174.66 9.05% SCHWAB, SPECIAL CUSTODY ACCOUNT
ATTN: MUTUAL FUNDS TEAM E, 101 MONTGOMERY
STREET
SAN FRANCISCO, CA 94104-4169
Real Estate Fund Class H 19,632.58 7.35% NATIONWIDE TRUST COMPANY
P.O. BOX 182029
COLUMBUS, OH 43218-2046
K-40
PERCENTAGE
AMOUNT OF OF THE
NAME OF THE FUND SHARE CLASS SHARES OWNED CLASS NAME AND ADDRESS OF THE BENEFICIAL OWNER
-------------------------------------------------------------------------------------------------------------------------------
Retailing Fund Advisor Class 27,749.53 29.62% TRUST COMPANY OF AMERICA
P O BOX 6503
ENGLEWOOD, CO 80121
Retailing Fund Advisor Class 16,509.16 17.63% MG Trust Company
700 17th Street, Suite 300
Denver CO 80202
Retailing Fund Advisor Class 11,145.63 11.90% NATIONWIDE TRUST COMPANY
P.O. BOX 182029
COLUMBUS, OH 43218-2047
Retailing Fund Advisor Class 10,355.06 11.05% NATIONAL FINANCIAL SVCS CORP
200 LIBERTY STREET
NEW YORK, NY 10281-10050
Retailing Fund Advisor Class 8,960.51 9.56% GENWORTH FINANCIAL TRUST COMPANY
3200 N CENTRAL, SUITE 612
PHOENIX, AZ 85015
Retailing Fund Class A 6,273.08 27.97% FIRST CLEARING, LLC
2801 MARKET STREET
SAINT LOUIS, MO 63165
Retailing Fund Class A 6,124.67 27.32% PERSHING LLC
P. O. BOX 2052
JERSEY CITY, NJ 07303-10102
Retailing Fund Class A 1,215.32 5.42% LPL FINANCIAL
9785 TOWNE CENTRE DRIVE
SAN DIEGO CA 92121-2000
Retailing Fund Class C 70,489.48 81.24% NFS LLC
433 AVE T
BROOKLYN, NY 11223
Retailing Fund Investor Class 252,082.93 45.34% NATIONAL FINANCIAL SVCS CORP
200 LIBERTY STREET
NEW YORK, NY 10281-10051
Retailing Fund Investor Class 118,121.54 21.25% SCHWAB, SPECIAL CUSTODY ACCOUNT
ATTN: MUTUAL FUNDS TEAM E, 101 MONTGOMERY
STREET
SAN FRANCISCO, CA 94104-4170
Retailing Fund Investor Class 41,433.87 7.44% PERSHING LLC
P. O. BOX 2052
JERSEY CITY, NJ 07303-10062
Russell 2000(R) 1.5x Strategy Class A 7,410.27 43.07% PERSHING LLC
Fund P. O. BOX 2052
JERSEY CITY, NJ 07303-10063
Russell 2000(R) 1.5x Strategy Class A 3,442.02 20.00% MORGAN STANLEY SMITH BARNEY, HOUSE
Fund ACCOUNT
700 RED BROOK BLVD
OWINGS MILLS, MD 21125
Russell 2000(R) 1.5x Strategy Class A 1,328.93 7.72% PO BOX 509002
Fund DALLAS TX 75250
Russell 2000(R) 1.5x Strategy Class A 1,058.72 6.15% STIFEL NICOLAUS & CO INC.
Fund 501 NORTH BROADWAY
ST LOUIS MO 63107
Russell 2000(R) 1.5x Strategy Class A 939.35 5.46% NFS LLC
Fund 1969 EAST 1ST STREET
BROOKLYN, NY 11223
K-41
PERCENTAGE
AMOUNT OF OF THE
NAME OF THE FUND SHARE CLASS SHARES OWNED CLASS NAME AND ADDRESS OF THE BENEFICIAL OWNER
-------------------------------------------------------------------------------------------------------------------------------
Russell 2000(R) 1.5x Strategy Class C 10,329.93 14.56% DONALDSON LUFKIN JENRETTE, SECURITIES
Fund CORPORATION INC.
P.O. BOX 2052
JERSEY CITY, NJ 07303-9998-10008
Russell 2000(R) 1.5x Strategy Class C 9,186.54 12.97% FIRST CLEARING, LLC
Fund 2801 MARKET STREET
SAINT LOUIS, MO 63166
Russell 2000(R) 1.5x Strategy Class C 5,657.17 7.97% LPL FINANCIAL
Fund 9785 TOWNE CENTRE DRIVE
SAN DIEGO CA 92121-1973
Russell 2000(R) 1.5x Strategy Class C 5,516.63 7.79% MORGAN STANLEY SMITH BARNEY, HOUSE
Fund ACCOUNT
700 RED BROOK BLVD
OWINGS MILLS, MD 21126
Russell 2000(R) 1.5x Strategy Class C 5,418.58 7.65% SCHWAB, SPECIAL CUSTODY ACCOUNT
Fund ATTN: MUTUAL FUNDS TEAM E, 101 MONTGOMERY
STREET
SAN FRANCISCO, CA 94104-4171
Russell 2000(R) 1.5x Strategy Class C 5,274.82 7.43% STIFEL NICOLAUS & CO INC.
Fund 501 NORTH BROADWAY
ST LOUIS MO 63110
Russell 2000(R) 1.5x Strategy Class C 4,535.20 6.40% NFS LLC
Fund 69 HOWLAND DR
PONTE VEDRA, FL 32081
Russell 2000(R) 1.5x Strategy Class C 3,782.99 5.34% MORGAN STANLEY SMITH BARNEY
Fund HARBORSIDE FINANCIAL CENTER
PLAZA 2, 3RD FLOOR
JERSEY CITY, NJ 07329
Russell 2000(R) 1.5x Strategy Class H 101,161.25 36.13% NATIONAL FINANCIAL SVCS CORP
Fund 200 LIBERTY STREET
NEW YORK, NY 10281-10052
Russell 2000(R) 1.5x Strategy Class H 39,089.75 13.96% SCHWAB, SPECIAL CUSTODY ACCOUNT
Fund ATTN: MUTUAL FUNDS TEAM E, 101 MONTGOMERY
STREET
SAN FRANCISCO, CA 94104-4172
Russell 2000(R) Fund Class A 5,071.43 21.83% PAUL D ROHNER (RIRA)
29 T ST
LAKE LOTAWANA, MO 64086
Russell 2000(R) Fund Class A 4,238.91 18.24% PERSHING LLC
P. O. BOX 2052
JERSEY CITY, NJ 07303-10064
Russell 2000(R) Fund Class A 4,133.02 17.79% FIRST CLEARING, LLC
2801 MARKET STREET
SAINT LOUIS, MO 63167
Russell 2000(R) Fund Class A 2,835.88 12.20% LPL FINANCIAL
9785 TOWNE CENTRE DRIVE
SAN DIEGO CA 92121-2013
Russell 2000(R) Fund Class C 165,100.52 69.05% FIRST CLEARING, LLC
2801 MARKET STREET
SAINT LOUIS, MO 63168
Russell 2000(R) Fund Class C 25,217.77 10.53% PERSHING LLC
P. O. BOX 2052
JERSEY CITY, NJ 07303-10065
K-42
PERCENTAGE
AMOUNT OF OF THE
NAME OF THE FUND SHARE CLASS SHARES OWNED CLASS NAME AND ADDRESS OF THE BENEFICIAL OWNER
-------------------------------------------------------------------------------------------------------------------------------
Russell 2000(R) Fund Class C 16,424.85 6.83% LPL FINANCIAL
9785 TOWNE CENTRE DRIVE
SAN DIEGO CA 92121-1994
Russell 2000(R) Fund Class H 38,914.28 26.16% NATIONAL FINANCIAL SVCS CORP
200 LIBERTY STREET
NEW YORK, NY 10281-10053
Russell 2000(R) Fund Class H 36,052.72 24.24% SCHWAB, SPECIAL CUSTODY ACCOUNT
ATTN: MUTUAL FUNDS TEAM E, 101 MONTGOMERY
STREET
SAN FRANCISCO, CA 94104-4173
Russell 2000(R) Fund Class H 29,828.71 20.05% TD AMERITRADE INC.
PO BOX 2226
OMAHA, NE 68103-2256
S&P 500 Fund Class A 293,937.05 61.00% AMERITRADE INC
PO BOX 2226
OMAHA NE 68103-2249
S&P 500 Fund Class A 83,008.02 17.20% PERSHING LLC
P. O. BOX 2052
JERSEY CITY, NJ 07303-10066
S&P 500 Fund Class A 65,599.76 13.63% LPL FINANCIAL
9785 TOWNE CENTRE DRIVE
SAN DIEGO CA 92121-1972
S&P 500 Fund Class C 77,648.91 20.88% FIRST CLEARING, LLC
2801 MARKET STREET
SAINT LOUIS, MO 63169
S&P 500 Fund Class C 33,741.78 9.06% PERSHING LLC
P. O. BOX 2052
JERSEY CITY, NJ 07303-10067
S&P 500 Fund Class C 31,000.09 8.36% WEDBUSH MORGAN SECURITIES
1000 WILSHIRE BLVD.
LOS ANGELES CA 90017
S&P 500 Fund Class C 26,151.33 6.98% LPL FINANCIAL
9785 TOWNE CENTRE DRIVE
SAN DIEGO CA 92121-1999
S&P 500 Fund Class H 1,398,317.71 27.75% NATIONAL FINANCIAL SVCS CORP
200 LIBERTY STREET
NEW YORK, NY 10281-10054
S&P 500 Fund Class H 1,192,485.81 23.67% GENWORTH FINANCIAL TRUST COMPANY
3200 N CENTRAL, SUITE 612
PHOENIX, AZ 85016
S&P 500 Fund Class H 993,339.43 19.72% TRUST COMPANY OF AMERICA
P O BOX 6503
ENGLEWOOD, CO 80112
S&P 500 Fund Class H 389,786.22 7.74% SCHWAB, SPECIAL CUSTODY ACCOUNT
ATTN: MUTUAL FUNDS TEAM E, 101 MONTGOMERY
STREET
SAN FRANCISCO, CA 94104-4174
S&P 500 Fund Class H 276,379.43 5.23% PERSHING LLC
P. O. BOX 2052
JERSEY CITY, NJ 07303-10103
S&P 500 Pure Growth Fund Class A 117,092.09 58.56% PERSHING LLC
P. O. BOX 2052
JERSEY CITY, NJ 07303-10068
K-43
PERCENTAGE
AMOUNT OF OF THE
NAME OF THE FUND SHARE CLASS SHARES OWNED CLASS NAME AND ADDRESS OF THE BENEFICIAL OWNER
-------------------------------------------------------------------------------------------------------------------------------
S&P 500 Pure Growth Fund Class A 35,506.86 17.76% LPL FINANCIAL
9785 TOWNE CENTRE DRIVE
SAN DIEGO CA 92121-2001
S&P 500 Pure Growth Fund Class A 13,790.62 6.89% MORGAN STANLEY SMITH BARNEY
HARBORSIDE FINANCIAL CENTER, PLAZA 2, 3RD
FLOOR
JERSEY CITY, NJ 07330
S&P 500 Pure Growth Fund Class C 105,669.50 36.83% FIRST CLEARING, LLC
2801 MARKET STREET
SAINT LOUIS, MO 63170
S&P 500 Pure Growth Fund Class H 905,485.15 58.32% NATIONAL FINANCIAL SVCS CORP
200 LIBERTY STREET
NEW YORK, NY 10281-10055
S&P 500 Pure Growth Fund Class H 156,213.97 10.06% NATIONWIDE TRUST COMPANY
P.O. BOX 182029
COLUMBUS, OH 43218-2048
S&P 500 Pure Growth Fund Class H 98,735.85 6.36% SCHWAB, SPECIAL CUSTODY ACCOUNT
ATTN: MUTUAL FUNDS TEAM E, 101 MONTGOMERY
STREET
SAN FRANCISCO, CA 94104-4175
S&P 500 Pure Growth Fund Class H 80,117.92 5.16% MERRILL LYNCH, PIERCE, FENNER & SMITH, INC.
4800 DEER LAKE DRIVE E, 3RD FLOOR
JACKSONVILLE, FL 32249
S&P 500 Pure Value Fund Class A 5,018.82 35.69% FIRST CLEARING, LLC
2801 MARKET STREET
SAINT LOUIS, MO 63171
S&P 500 Pure Value Fund Class A 4,956.34 35.25% LPL FINANCIAL
9785 TOWNE CENTRE DRIVE
SAN DIEGO CA 92121-2002
S&P 500 Pure Value Fund Class A 1,032.06 7.34% GARY S REID (IRA)
401 BIRMINGHAM RD
BURBANK, CA 91504
S&P 500 Pure Value Fund Class C 8,153.23 14.64% LPL FINANCIAL
9785 TOWNE CENTRE DRIVE
SAN DIEGO CA 92121-1987
S&P 500 Pure Value Fund Class C 7,124.50 12.76% FIRST CLEARING, LLC
2801 MARKET STREET
SAINT LOUIS, MO 63172
S&P 500 Pure Value Fund Class C 5,286.05 9.47% AMANDA BOHLMAN(RIRA)
22711 WESTCHESTER ROAD
SHAKER HEIGHTS, OH 44122-2978
S&P 500 Pure Value Fund Class C 3,206.28 5.74% HENRY BAELE (RIRA)
6271 MAYPINE FARM BLVD
HIGHLAND HEIGHTS, OH 44143
S&P 500 Pure Value Fund Class H 98,767.30 56.47% NATIONAL FINANCIAL SVCS CORP
200 LIBERTY STREET
NEW YORK, NY 10281-10056
S&P 500 Pure Value Fund Class H 17,152.38 9.81% NATIONWIDE TRUST COMPANY
P.O. BOX 182029
COLUMBUS, OH 43218-2049
K-44
PERCENTAGE
AMOUNT OF OF THE
NAME OF THE FUND SHARE CLASS SHARES OWNED CLASS NAME AND ADDRESS OF THE BENEFICIAL OWNER
-------------------------------------------------------------------------------------------------------------------------------
S&P 500 Pure Value Fund Class H 13,765.10 7.87% SCHWAB, SPECIAL CUSTODY ACCOUNT
ATTN: MUTUAL FUNDS TEAM E, 101 MONTGOMERY
STREET
SAN FRANCISCO, CA 94104-4176
S&P 500 Pure Value Fund Class H 13,361.37 7.64% TD AMERITRADE INC.
PO BOX 2226
OMAHA, NE 68103-2257
S&P MidCap 400 Pure Growth Class A 373,636.78 35.53% DAVENPORT & COMPANY LLC
Fund 737 HARBOUR POINT DR
WEST PALM BCH FL 33410-3416
S&P MidCap 400 Pure Growth Class A 217,906.42 20.35% AMERITRADE INC
Fund PO BOX 2226
OMAHA NE 68103-2247
S&P MidCap 400 Pure Growth Class A 148,439.70 14.09% MORGAN STANLEY SMITH BARNEY
Fund HARBORSIDE FINANCIAL CENTER, PLAZA 2, 3RD
FLOOR
JERSEY CITY, NJ 07331
S&P MidCap 400 Pure Growth Class A 72,972.74 6.94% PERSHING LLC
Fund P. O. BOX 2052
JERSEY CITY, NJ 07303-10069
S&P MidCap 400 Pure Growth Class A 56,754.17 5.42% NFS LLC
Fund 1088 NEW BRITAIN AVE
WEST HARTFORD, CT 06110
S&P MidCap 400 Pure Growth Class A 56,675.56 5.37% FIRST CLEARING, LLC
Fund 2801 MARKET STREET
SAINT LOUIS, MO 63173
S&P MidCap 400 Pure Growth Class C 104,334.69 34.52% FIRST CLEARING, LLC
Fund 2801 MARKET STREET
SAINT LOUIS, MO 63174
S&P MidCap 400 Pure Growth Class C 36,994.75 12.22% NFS LLC
Fund 7444 S MARION AVE
TULSA, OK 74136
S&P MidCap 400 Pure Growth Class C 32,969.69 10.89% PERSHING LLC
Fund P. O. BOX 2052
JERSEY CITY, NJ 07303-10070
S&P MidCap 400 Pure Growth Class C 26,767.54 8.82% LPL FINANCIAL
Fund 9785 TOWNE CENTRE DRIVE
SAN DIEGO CA 92121-2029
S&P MidCap 400 Pure Growth Class C 16,758.11 5.54% MORGAN STANLEY SMITH BARNEY, HOUSE
Fund ACCOUNT
700 RED BROOK BLVD
OWINGS MILLS, MD 21127
S&P MidCap 400 Pure Growth Class H 1,400,732.05 30.48% NATIONAL FINANCIAL SVCS CORP
Fund 200 LIBERTY STREET
NEW YORK, NY 10281-10057
S&P MidCap 400 Pure Growth Class H 1,274,993.76 27.74% SCHWAB, SPECIAL CUSTODY ACCOUNT
Fund ATTN: MUTUAL FUNDS TEAM E, 101 MONTGOMERY
STREET
SAN FRANCISCO, CA 94104-4177
S&P MidCap 400 Pure Growth Class H 460,288.56 10.01% FIRST CLEARING, LLC
Fund 2801 MARKET STREET
SAINT LOUIS, MO 63175
K-45
PERCENTAGE
AMOUNT OF OF THE
NAME OF THE FUND SHARE CLASS SHARES OWNED CLASS NAME AND ADDRESS OF THE BENEFICIAL OWNER
-------------------------------------------------------------------------------------------------------------------------------
S&P MidCap 400 Pure Growth Class H 376,098.65 8.18% TD AMERITRADE INC.
Fund PO BOX 2226
OMAHA, NE 68103-2258
S&P MidCap 400 Pure Growth Class H 297,004.15 6.04% PERSHING LLC
Fund P. O. BOX 2052
JERSEY CITY, NJ 07303-10071
S&P MidCap 400 Pure Value Class A 6,117.46 28.39% FIRST CLEARING, LLC
Fund 2801 MARKET STREET
SAINT LOUIS, MO 63176
S&P MidCap 400 Pure Value Class A 3,707.41 17.22% LPL FINANCIAL
Fund 9785 TOWNE CENTRE DRIVE
SAN DIEGO CA 92121-1992
S&P MidCap 400 Pure Value Class A 1,897.11 8.79% PERSHING LLC
Fund P. O. BOX 2052
JERSEY CITY, NJ 07303-10072
S&P MidCap 400 Pure Value Class C 9,084.09 15.22% FIRST CLEARING, LLC
Fund 2801 MARKET STREET
SAINT LOUIS, MO 63177
S&P MidCap 400 Pure Value Class C 4,369.15 7.31% LPL FINANCIAL
Fund 9785 TOWNE CENTRE DRIVE
SAN DIEGO CA 92121-2023
S&P MidCap 400 Pure Value Class C 3,728.40 6.24% PERSHING LLC
Fund P. O. BOX 2052
JERSEY CITY, NJ 07303-10073
S&P MidCap 400 Pure Value Class H 54,234.34 29.20% NATIONWIDE TRUST COMPANY
Fund P.O. BOX 182029
COLUMBUS, OH 43218-2050
S&P MidCap 400 Pure Value Class H 43,392.24 23.36% TRUST COMPANY OF AMERICA
Fund P O BOX 6503
ENGLEWOOD, CO 80129
S&P MidCap 400 Pure Value Class H 11,637.06 6.27% NATIONAL FINANCIAL SVCS CORP
Fund 200 LIBERTY STREET
NEW YORK, NY 10281-10058
S&P MidCap 400 Pure Value Class H 10,882.14 5.86% FIRST CLEARING, LLC
Fund 2801 MARKET STREET
SAINT LOUIS, MO 63178
S&P SmallCap 600 Pure Growth Class A 246,763.69 88.17% AMERITRADE INC
Fund PO BOX 2226
OMAHA NE 68103-2245
S&P SmallCap 600 Pure Growth Class A 21,384.15 7.64% FIRST CLEARING, LLC
Fund 2801 MARKET STREET
SAINT LOUIS, MO 63179
S&P SmallCap 600 Pure Growth Class C 36,836.83 46.77% NFS LLC
Fund 7444 S MARION DR
TULSA, OK 74136
S&P SmallCap 600 Pure Growth Class C 14,959.26 18.99% FIRST CLEARING, LLC
Fund 2801 MARKET STREET
SAINT LOUIS, MO 63180
S&P SmallCap 600 Pure Growth Class H 87,591.18 33.08% TRUST COMPANY OF AMERICA
Fund P O BOX 6503
ENGLEWOOD, CO 80130
K-46
PERCENTAGE
AMOUNT OF OF THE
NAME OF THE FUND SHARE CLASS SHARES OWNED CLASS NAME AND ADDRESS OF THE BENEFICIAL OWNER
-------------------------------------------------------------------------------------------------------------------------------
S&P SmallCap 600 Pure Growth Class H 20,928.28 7.90% NATIONWIDE TRUST COMPANY
Fund P.O. BOX 182029
COLUMBUS, OH 43218-2051
S&P SmallCap 600 Pure Growth Class H 18,588.27 7.02% SCHWAB, SPECIAL CUSTODY ACCOUNT
Fund ATTN: MUTUAL FUNDS TEAM E, 101 MONTGOMERY
STREET
SAN FRANCISCO, CA 94104-4178
S&P SmallCap 600 Pure Growth Class H 15,419.78 5.82% FIRST CLEARING, LLC
Fund 2801 MARKET STREET
SAINT LOUIS, MO 63181
S&P SmallCap 600 Pure Growth Class H 14,796.32 5.59% NATIONAL FINANCIAL SVCS CORP
Fund 200 LIBERTY STREET
NEW YORK, NY 10281-10059
S&P SmallCap 600 Pure Value Class A 8,237.01 20.10% PERSHING LLC
Fund P. O. BOX 2052
JERSEY CITY, NJ 07303-10074
S&P SmallCap 600 Pure Value Class A 6,881.74 16.81% LPL FINANCIAL
Fund 9785 TOWNE CENTRE DRIVE
SAN DIEGO CA 92121-2015
S&P SmallCap 600 Pure Value Class A 6,703.88 16.37% FIRST CLEARING, LLC
Fund 2801 MARKET STREET
SAINT LOUIS, MO 63182
S&P SmallCap 600 Pure Value Class A 4,149.92 10.13% AMERITRADE INC
Fund PO BOX 2226
OMAHA NE 68103-2244
S&P SmallCap 600 Pure Value Class A 3,110.99 7.60% MORGAN STANLEY SMITH BARNEY
Fund HARBORSIDE FINANCIAL CENTER, PLAZA 2, 3RD
FLOOR
JERSEY CITY, NJ 07332
S&P SmallCap 600 Pure Value Class A 2,068.21 5.05% STIFEL NICOLAUS & CO INC.
Fund 501 NORTH BROADWAY
ST LOUIS MO 63103
S&P SmallCap 600 Pure Value Class C 38,712.22 32.09% PERSHING LLC
Fund P. O. BOX 2052
JERSEY CITY, NJ 07303-10075
S&P SmallCap 600 Pure Value Class C 10,524.76 8.72% FIRST CLEARING, LLC
Fund 2801 MARKET STREET
SAINT LOUIS, MO 63183
S&P SmallCap 600 Pure Value Class C 8,566.27 7.10% LPL FINANCIAL
Fund 9785 TOWNE CENTRE DRIVE
SAN DIEGO CA 92121-1978
S&P SmallCap 600 Pure Value Class H 65,705.95 20.35% NATIONWIDE TRUST COMPANY
Fund P.O. BOX 182029
COLUMBUS, OH 43218-2052
S&P SmallCap 600 Pure Value Class H 62,867.86 19.45% PERSHING LLC
Fund P. O. BOX 2052
JERSEY CITY, NJ 07303-10104
S&P SmallCap 600 Pure Value Class H 53,168.39 16.47% SCHWAB, SPECIAL CUSTODY ACCOUNT
Fund ATTN: MUTUAL FUNDS TEAM E, 101 MONTGOMERY
STREET
SAN FRANCISCO, CA 94104-4179
K-47
PERCENTAGE
AMOUNT OF OF THE
NAME OF THE FUND SHARE CLASS SHARES OWNED CLASS NAME AND ADDRESS OF THE BENEFICIAL OWNER
-------------------------------------------------------------------------------------------------------------------------------
S&P SmallCap 600 Pure Value Class H 51,587.48 15.98% NATIONAL FINANCIAL SVCS CORP
Fund 200 LIBERTY STREET
NEW YORK, NY 10281-10060
Strengthening Dollar 2x Strategy Class A 430,089.54 31.78% PERSHING LLC
Fund P. O. BOX 2052
JERSEY CITY, NJ 07303-10076
Strengthening Dollar 2x Strategy Class A 339,932.28 25.13% NFS LLC
Fund 13 DOXEY DR
GLEN COVE, NY 11542
Strengthening Dollar 2x Strategy Class A 292,174.00 21.57% AMERITRADE INC
Fund PO BOX 2226
OMAHA NE 68103-2231
Strengthening Dollar 2x Strategy Class A 83,107.71 6.14% TRUST COMPANY OF AMERICA
Fund P O BOX 6503
ENGLEWOOD, CO 80118
Strengthening Dollar 2x Strategy Class C 57,824.83 20.56% PERSHING LLC
Fund P. O. BOX 2052
JERSEY CITY, NJ 07303-10077
Strengthening Dollar 2x Strategy Class C 56,503.58 20.10% FIRST CLEARING, LLC
Fund 2801 MARKET STREET
SAINT LOUIS, MO 63184
Strengthening Dollar 2x Strategy Class H 1,859,345.76 39.26% SCHWAB, SPECIAL CUSTODY ACCOUNT
Fund ATTN: MUTUAL FUNDS TEAM E, 101 MONTGOMERY
STREET
SAN FRANCISCO, CA 94104-4180
Strengthening Dollar 2x Strategy Class H 1,216,154.55 25.68% NATIONAL FINANCIAL SVCS CORP
Fund 200 LIBERTY STREET
NEW YORK, NY 10281-10061
Strengthening Dollar 2x Strategy Class H 864,208.52 18.25% TD AMERITRADE INC.
Fund PO BOX 2226
OMAHA, NE 68103-2259
Technology Fund Advisor Class 81,101.58 53.49% NATIONWIDE TRUST COMPANY
P.O. BOX 182029
COLUMBUS, OH 43218-2053
Technology Fund Advisor Class 19,072.47 12.58% GENWORTH FINANCIAL TRUST COMPANY
3200 N CENTRAL, SUITE 612
PHOENIX, AZ 85017
Technology Fund Advisor Class 17,709.19 11.68% NATIONAL FINANCIAL SVCS CORP
200 LIBERTY STREET
NEW YORK, NY 10281-10062
Technology Fund Class A 31,575.96 34.74% PERSHING LLC
P. O. BOX 2052
JERSEY CITY, NJ 07303-10078
Technology Fund Class A 14,834.42 16.32% LPL FINANCIAL
9785 TOWNE CENTRE DRIVE
SAN DIEGO CA 92121-2004
Technology Fund Class A 13,789.49 15.16% NFS LLC
10202 ADDISON CT
BETHESDA, MD 20817
K-48
PERCENTAGE
AMOUNT OF OF THE
NAME OF THE FUND SHARE CLASS SHARES OWNED CLASS NAME AND ADDRESS OF THE BENEFICIAL OWNER
-------------------------------------------------------------------------------------------------------------------------------
Technology Fund Class A 9,231.61 10.16% FIRST CLEARING, LLC
2801 MARKET STREET
SAINT LOUIS, MO 63185
Technology Fund Class C 27,688.69 13.27% FIRST CLEARING, LLC
136 ALLEGANY ROAD
STEVENSVILLE, MD 21666-3642
Technology Fund Class C 26,130.59 12.52% PERSHING LLC
P. O. BOX 2052
JERSEY CITY, NJ 07303-10079
Technology Fund Investor Class 313,250.18 53.16% SCHWAB, SPECIAL CUSTODY ACCOUNT
ATTN: MUTUAL FUNDS TEAM E, 101 MONTGOMERY
STREET
SAN FRANCISCO, CA 94104-4181
Technology Fund Investor Class 80,486.14 13.66% NATIONAL FINANCIAL SVCS CORP
200 LIBERTY STREET
NEW YORK, NY 10281-10063
Technology Fund Investor Class 30,300.19 5.13% PERSHING LLC
P. O. BOX 2052
JERSEY CITY, NJ 07303-10110
Telecommunications Fund Advisor Class 6,521.16 38.83% PERSHING LLC
P. O. BOX 2052
JERSEY CITY, NJ 07303-10105
Telecommunications Fund Advisor Class 2,940.45 17.51% MAURICE W TAYLOR (SEP IRA)
1240 ZION RD
BELLEFONTE, PA 16823
Telecommunications Fund Advisor Class 1,236.50 7.36% NATIONWIDE TRUST COMPANY
P.O. BOX 182029
COLUMBUS, OH 43218-2054
Telecommunications Fund Advisor Class 1,230.14 7.33% NATIONAL FINANCIAL SVCS CORP
200 LIBERTY STREET
NEW YORK, NY 10281-10064
Telecommunications Fund Class A 12,844.79 27.99% FIRST CLEARING, LLC
2801 MARKET STREET
SAINT LOUIS, MO 63186
Telecommunications Fund Class A 10,285.42 22.41% UBS FINANCIAL SERVICES INC.
50 COLUMBIA RD
BRANCHBURG NJ 08876-3519
Telecommunications Fund Class A 8,415.35 18.34% UBS FINANCIAL SERVICES INC.
50 COLUMBIA RD
BRANCHBURG NJ 08876-3519
Telecommunications Fund Class A 2,463.80 5.36% PERSHING LLC
P. O. BOX 2052
JERSEY CITY, NJ 07303-10080
Telecommunications Fund Class A 2,459.03 5.36% UBS FINANCIAL SERVICES INC.
807 BREAKWATER DR
FORT COLLINS CO 80525-3303
Telecommunications Fund Class C 12,480.48 10.14% PERSHING LLC
P. O. BOX 2052
JERSEY CITY, NJ 07303-10081
Telecommunications Fund Investor Class 28,743.18 17.38% SCHWAB, SPECIAL CUSTODY ACCOUNT
ATTN: MUTUAL FUNDS TEAM E, 101 MONTGOMERY
STREET
SAN FRANCISCO, CA 94104-4182
K-49
PERCENTAGE
AMOUNT OF OF THE
NAME OF THE FUND SHARE CLASS SHARES OWNED CLASS NAME AND ADDRESS OF THE BENEFICIAL OWNER
-------------------------------------------------------------------------------------------------------------------------------
Telecommunications Fund Investor Class 27,956.87 16.90% TD AMERITRADE INC.
PO BOX 2226
OMAHA, NE 68103-2260
Telecommunications Fund Investor Class 18,342.07 11.09% NATIONAL FINANCIAL SVCS CORP
200 LIBERTY STREET
NEW YORK, NY 10281-10065
Telecommunications Fund Investor Class 15,167.22 9.17% PERSHING LLC
P. O. BOX 2052
JERSEY CITY, NJ 07303-10096
Telecommunications Fund Investor Class 12,654.07 7.66% STIFEL NICOLAUS & CO INC.
501 NORTH BROADWAY
ST LOUIS MO 63111
Telecommunications Fund Investor Class 11,446.56 6.92% ROBERT P BUCHENBERGER TRUST
8602 EAST AMHERST DRIVE, UNIT F
DENVER, CO 80231
Telecommunications Fund Investor Class 9,713.61 5.87% DUVEDAL ASSOCIATES PARTNERSHIP
129 WASHINGTON ST.
WELLESLEY, MA 02481
Transportation Fund Advisor Class 4,887.03 27.94% NATIONWIDE TRUST COMPANY
P.O. BOX 182029
COLUMBUS, OH 43218-2055
Transportation Fund Advisor Class 3,718.49 21.26% NATIONAL FINANCIAL SVCS CORP
200 LIBERTY STREET
NEW YORK, NY 10281-10066
Transportation Fund Advisor Class 1,123.85 6.42% JANNEY MONTGOMERY SCOTT LLC
1801 MARKET STREET
PHILADELPHIA, PA 19103-1675
Transportation Fund Advisor Class 934.91 5.35% PERSHING LLC
P. O. BOX 2052
JERSEY CITY, NJ 07303-10082
Transportation Fund Advisor Class 912.13 5.21% TD AMERITRADE INC.
PO BOX 2226
OMAHA, NE 68103-2261
Transportation Fund Class A 21,187.54 32.11% FIRST CLEARING, LLC
2801 MARKET STREET
SAINT LOUIS, MO 63187
Transportation Fund Class A 14,964.77 22.71% LPL FINANCIAL
9785 TOWNE CENTRE DRIVE
SAN DIEGO CA 92121-2041
Transportation Fund Class A 8,776.08 13.31% PERSHING LLC
P. O. BOX 2052
JERSEY CITY, NJ 07303-10083
Transportation Fund Class A 7,968.95 12.08% UBS FINANCIAL SERVICES INC.
18 CHENAL CIRCLE
LITTLE ROCK AR 72223-9566
Transportation Fund Class A 7,627.69 11.56% UBS FINANCIAL SERVICES INC.
50 COLUMBIA RD
BRANCHBURG NJ 08876-3519
Transportation Fund Class C 18,181.45 47.14% LPL FINANCIAL
9785 TOWNE CENTRE DRIVE
SAN DIEGO CA 92121-1997
Transportation Fund Class C 4,821.71 12.50% FIRST CLEARING, LLC
2801 MARKET STREET
SAINT LOUIS, MO 63188
K-50
PERCENTAGE
AMOUNT OF OF THE
NAME OF THE FUND SHARE CLASS SHARES OWNED CLASS NAME AND ADDRESS OF THE BENEFICIAL OWNER
-------------------------------------------------------------------------------------------------------------------------------
Transportation Fund Class C 3,826.33 9.93% PERSHING LLC
P. O. BOX 2052
JERSEY CITY, NJ 07303-10084
Transportation Fund Class C 2,223.63 5.77% DANIEL R CERVEN (IRA)
2135 ESTEN RD
QUAKERTOWN, PA 18951
Transportation Fund Class C 2,139.87 5.55% JANNEY MONTGOMERY SCOTT LLC
1801 MARKET STREET
PHILADELPHIA, PA 19103-1675
Transportation Fund Investor Class 41,805.40 30.53% SCHWAB, SPECIAL CUSTODY ACCOUNT
ATTN: MUTUAL FUNDS TEAM E, 101 MONTGOMERY
STREET
SAN FRANCISCO, CA 94104-4183
Transportation Fund Investor Class 32,142.45 23.47% NATIONAL FINANCIAL SVCS CORP
200 LIBERTY STREET
NEW YORK, NY 10281-10067
Transportation Fund Investor Class 31,942.15 23.32% LPL FINANCIAL
9785 TOWNE CENTRE DRIVE
SAN DIEGO CA 92121-1969
Transportation Fund Investor Class 11,632.53 8.49% FIRST CLEARING, LLC
2801 MARKET STREET
SAINT LOUIS, MO 63189
U.S. Government Money Market Advisor Class 521,169,868.38 58.45% GENWORTH FINANCIAL TRUST COMPANY
Fund 3200 N CENTRAL, SUITE 612
PHOENIX, AZ 85018
U.S. Government Money Market Advisor Class 207,343,310.90 23.24% TRUST COMPANY OF AMERICA
Fund P O BOX 6503
ENGLEWOOD, CO 80123
U.S. Government Money Market Advisor Class 53,550,584.92 6.01% NATIONAL FINANCIAL SVCS CORP
Fund 200 LIBERTY STREET
NEW YORK, NY 10281-9999
U.S. Government Money Market Class A 11,247,472.99 28.19% PERSHING LLC
Fund P. O. BOX 2052
JERSEY CITY, NJ 07303-10085
U.S. Government Money Market Class A 6,558,243.51 16.50% UMB BANK NA
Fund ONE SECURITY PLACE
TOPEKA, KS 66636-0001
U.S. Government Money Market Class A 5,598,050.08 14.08% FIDUCIARY TRUST COMPANY OF NEW HAMPSHIRE
Fund ONE SECURITY BENEFIT PLACE
TOPEKA, KS 66636-0001
U.S. Government Money Market Class A 3,454,663.37 8.70% FIRST CLEARING, LLC
Fund 2801 MARKET STREET
SAINT LOUIS, MO 63195
U.S. Government Money Market Class C 11,496,001.84 19.25% FIRST CLEARING CORPORATION
Fund 3601 CATAMARAN DRIVE
CORONA DEL MAR CA 92625-1209
U.S. Government Money Market Class C 3,760,341.96 6.18% DONALDSON LUFKIN JENRETTE, SECURITIES
Fund CORPORATION INC.
P.O. BOX 2052
JERSEY CITY, NJ 07303-9998-10009
U.S. Government Money Market Class C 3,487,639.67 5.92% LPL FINANCIAL
Fund 9785 TOWNE CENTRE DRIVE
SAN DIEGO CA 92121-2018
U.S. Government Money Market Class C 3,254,444.48 5.49% SOUTHWEST SECURITIES INC
Fund PO BOX 509002
DALLAS TX 75250
K-51
PERCENTAGE
AMOUNT OF OF THE
NAME OF THE FUND SHARE CLASS SHARES OWNED CLASS NAME AND ADDRESS OF THE BENEFICIAL OWNER
-------------------------------------------------------------------------------------------------------------------------------
U.S. Government Money Market Investor Class 365,464,065.11 40.47% NATIONAL FINANCIAL SVCS CORP
Fund 200 LIBERTY STREET
NEW YORK, NY 10281-10068
U.S. Long Short Momentum Class A 436,892.04 28.22% RYDEX EPT MODERATE
Fund 9601 BLACKWELL RD, STE 500
ROCKVILLE, MD 20857
U.S. Long Short Momentum Class A 276,317.85 17.83% STEPHENS INC.
Fund 111 CENTER STREET
LITTLE ROCK AR 72201
U.S. Long Short Momentum Class A 185,288.34 11.97% FIRST CLEARING, LLC
Fund 2801 MARKET STREET
SAINT LOUIS, MO 63190
U.S. Long Short Momentum Class A 122,268.58 7.92% PERSHING LLC
Fund P. O. BOX 2052
JERSEY CITY, NJ 07303-10086
U.S. Long Short Momentum Class C 844,787.04 26.32% FIRST CLEARING, LLC
Fund 2801 MARKET STREET
SAINT LOUIS, MO 63191
U.S. Long Short Momentum Class C 307,215.52 9.58% PERSHING LLC
Fund P. O. BOX 2052
JERSEY CITY, NJ 07303-10087
U.S. Long Short Momentum Class C 280,068.53 8.73% MORGAN STANLEY SMITH BARNEY, HOUSE
Fund ACCOUNT
700 RED BROOK BLVD
OWINGS MILLS, MD 21128
U.S. Long Short Momentum Class C 278,857.78 8.67% LPL FINANCIAL
Fund 9785 TOWNE CENTRE DRIVE
SAN DIEGO CA 92121-2027
U.S. Long Short Momentum Class C 172,085.25 5.36% MORGAN STANLEY SMITH BARNEY
Fund HARBORSIDE FINANCIAL CENTER, PLAZA 2, 3RD
FLOOR
JERSEY CITY, NJ 07333
U.S. Long Short Momentum Class H 2,522,810.40 48.42% SCHWAB, SPECIAL CUSTODY ACCOUNT
Fund ATTN: MUTUAL FUNDS TEAM E, 101 MONTGOMERY
STREET
SAN FRANCISCO, CA 94104-4184
U.S. Long Short Momentum Class H 436,076.29 8.37% LPL FINANCIAL
Fund 9785 TOWNE CENTRE DRIVE
SAN DIEGO CA 92121-2019
U.S. Long Short Momentum Class H 375,289.19 7.20% UMB BANK NA
Fund ONE SECURITY PLACE
TOPEKA, KS 66636-0001
U.S. Long Short Momentum Class H 342,746.82 6.58% NATIONAL FINANCIAL SVCS CORP
Fund 200 LIBERTY STREET
NEW YORK, NY 10281-10069
U.S. Long Short Momentum Class H 266,548.32 5.08% DONALDSON LUFKIN JENRETTE, SECURITIES
Fund CORPORATION INC.
P.O. BOX 2052
JERSEY CITY, NJ 07303-9998-10010
Utilities Fund Advisor Class 47,141.64 35.53% LPL FINANCIAL
9785 TOWNE CENTRE DRIVE
SAN DIEGO CA 92121-2048
K-52
PERCENTAGE
AMOUNT OF OF THE
NAME OF THE FUND SHARE CLASS SHARES OWNED CLASS NAME AND ADDRESS OF THE BENEFICIAL OWNER
-------------------------------------------------------------------------------------------------------------------------------
Utilities Fund Advisor Class 33,625.73 25.40% TRUST COMPANY OF AMERICA
P O BOX 6503
ENGLEWOOD, CO 80131
Utilities Fund Advisor Class 15,180.09 11.47% NATIONWIDE TRUST COMPANY
P.O. BOX 182029
COLUMBUS, OH 43218-2056
Utilities Fund Advisor Class 8,550.59 6.46% TD AMERITRADE INC.
PO BOX 2226
OMAHA, NE 68103-2262
Utilities Fund Class A 54,582.57 25.29% PERSHING LLC
P. O. BOX 2052
JERSEY CITY, NJ 07303-10088
Utilities Fund Class A 37,572.85 17.40% MORGAN STANLEY SMITH BARNEY, HOUSE
ACCOUNT
700 RED BROOK BLVD
OWINGS MILLS, MD 21129
Utilities Fund Class A 24,185.47 11.22% LPL FINANCIAL
9785 TOWNE CENTRE DRIVE
SAN DIEGO CA 92121-1993
Utilities Fund Class A 21,508.81 9.96% FIRST CLEARING, LLC
2801 MARKET STREET
SAINT LOUIS, MO 63192
Utilities Fund Class A 16,858.13 7.82% NFS LLC
35 SHEA ROAD
CAMBRIDGE, MA 02140
Utilities Fund Class A 15,397.23 7.15% AMERITRADE INC
PO BOX 2226
OMAHA NE 68103-2228
Utilities Fund Class C 62,983.27 25.02% FIRST CLEARING, LLC
2801 MARKET STREET
SAINT LOUIS, MO 63193
Utilities Fund Class C 61,441.74 24.35% PERSHING LLC
P. O. BOX 2052
JERSEY CITY, NJ 07303-10089
Utilities Fund Investor Class 1,579,190.86 66.22% NATIONAL FINANCIAL SVCS CORP
200 LIBERTY STREET
NEW YORK, NY 10281-10070
Utilities Fund Investor Class 316,055.67 13.19% PERSHING LLC
P. O. BOX 2052
JERSEY CITY, NJ 07303-10111
Utilities Fund Investor Class 196,667.32 8.25% TD AMERITRADE INC.
PO BOX 2226
OMAHA, NE 68103-2263
Weakening Dollar 2x Strategy Class A 129,556.28 48.15% PERSHING LLC
Fund P. O. BOX 2052
JERSEY CITY, NJ 07303-10090
Weakening Dollar 2x Strategy Class A 24,522.37 9.09% SOUTHWEST SECURITIES INC
Fund PO BOX 509002
DALLAS TX 75250
Weakening Dollar 2x Strategy Class A 16,243.55 6.02% NFS LLC
Fund 200 LIBERTY STREET
NEW YORK NY 10281
K-53
PERCENTAGE
AMOUNT OF OF THE
NAME OF THE FUND SHARE CLASS SHARES OWNED CLASS NAME AND ADDRESS OF THE BENEFICIAL OWNER
-------------------------------------------------------------------------------------------------------------------------------
Weakening Dollar 2x Strategy Class A 15,000.00 5.57% Brown Brothers Harriman and Co.
Fund 525 Washington Blvd
Jersey City, NJ 07310
Weakening Dollar 2x Strategy Class C 32,972.21 22.45% PERSHING LLC
Fund P. O. BOX 2052
JERSEY CITY, NJ 07303-10091
Weakening Dollar 2x Strategy Class C 25,593.37 17.43% MORGAN STANLEY SMITH BARNEY
Fund HARBORSIDE FINANCIAL CENTER, PLAZA 2, 3RD
FLOOR
JERSEY CITY, NJ 07334
Weakening Dollar 2x Strategy Class C 25,443.89 17.33% FIRST CLEARING, LLC
Fund 2801 MARKET STREET
SAINT LOUIS, MO 63194
Weakening Dollar 2x Strategy Class C 13,097.79 8.94% NFS LLC
Fund PO BOX 1289
NORTH PLATTE, NE 69103
Weakening Dollar 2x Strategy Class H 377,517.65 45.34% SCHWAB, SPECIAL CUSTODY ACCOUNT
Fund ATTN: MUTUAL FUNDS TEAM E, 101 MONTGOMERY
STREET
SAN FRANCISCO, CA 94104-4185
Weakening Dollar 2x Strategy Class H 135,736.14 16.30% NATIONAL FINANCIAL SVCS CORP
Fund 200 LIBERTY STREET
NEW YORK, NY 10281-10071
----------------------------------------------
* A party holding in excess of 25% of the outstanding voting securities of a
Fund is presumed to be a "control person" (as defined in the 1940 Act) of
su ch Fund, based on the substantial ownership interest held and the
party's resultant ability to influence vot ing on certain matters submitted
for shareholder consideration.
K-54
APPENDIX L
MANAGEMENT OWNERSHIP
As of the Record Date, the Directors and officers owned, of record and
beneficially (unless otherwise indicated), as a group, the following of each
Fund's outstanding securities:
RYDEX SERIES FUNDS-MID-CAP 1.5x STRATEGY FUND
-------------------------------------------------------------------------------------
TITLE OF THE CLASS AMOUNT OF SHARES OWNED PERCENTAGE OF THE CLASS
------------------------------------------------------------------------------------
CLASS H 4,850.62 1.5%
RYDEX SERIES FUNDS-LONG SHORT EQUITY STRATEGY FUND
-------------------------------------------------------------------------------------
TITLE OF THE CLASS AMOUNT OF SHARES OWNED PERCENTAGE OF THE CLASS
-------------------------------------------------------------------------------------
CLASS H 1,717.04 2.4%
RYDEX SERIES FUNDS-FINANCIAL SERVICES FUND
-------------------------------------------------------------------------------------
TITLE OF THE CLASS AMOUNT OF SHARES OWNED PERCENTAGE OF THE CLASS
-------------------------------------------------------------------------------------
INVESTOR CLASS 1,754.58 2.8%
L-1
APPENDIX L
NOMINATING COMMITTEE CHARTER
I. THE COMMITTEE
The Nominating Committee (the "Committee") of the Rydex Series Funds,
Rydex Dynamic Funds, Rydex Variable Trust and Rydex ETF Trust (each a
"Trust" and collectively "the Trusts") shall be composed of at least
three members plus the Independent Chairman as an ex officio member
pursuant to the following sentence, each of whom is a Trustee who is not
an "interested person" of the Trusts ("Independent Trustee") as defined
in Section 2(a)(19) of the Investment Company Act of 1940, as amended
(the "1940 Act"). At any time when there is an Independent Chairman of
the Board, the Independent Chairman shall be a full, voting member of
the Committee, ex officio. The Board shall appoint the other members of
the Committee and shall designate one member of the Committee to act as
chairman of the Committee. All members of the Committee appointed by the
Board shall serve at the pleasure of the Board. The role of the
Committee shall be to assist the Board of Trustees of the Trusts (the
"Board") in identifying and nominating individuals to serve as
Independent Trustees of the Trusts.
II. COMMITTEE FUNCTIONS AND RESPONSIBILITIES
The Committee shall identify and recommend to the Independent Trustees
candidates to serve as Independent Trustees, including those to be
elected by the Shareholders or appointed by the Board to fill vacancies.
For this purpose, the Committee shall canvas, recruit, interview and
solicit candidates to serve as Independent Trustees. The Committee shall
evaluate candidates' qualifications for Board membership in light of
their background, knowledge and experience, in order to assure that the
Board as a whole represents a proper mix of backgrounds and relevant
skill sets. The Committee shall also determine whether each such
candidate qualifies as not being an "interested person" of the Trusts in
terms of both the letter and spirit of the 1940 Act, rules and
regulations of the Securities and Exchange Commission ("SEC") adopted
under said Act, and any other applicable standards of independence.
Among other things, this determination requires the Committee to find
the candidates to be independent from the investment advisers, principal
underwriters and other principal service providers for the Trusts. The
Committee shall also consider the effect of any relationships beyond
those delineated in the 1940 Act or the rules and regulations thereunder
that might impair independence, (e.g., business, financial or family
relationships with investment advisers, principal underwriters or other
service providers). Finally, the Committee shall consider the
willingness and ability of each such candidate to devote the time and
attention needed to perform the functions of an Independent Trustee.
i. The Committee also shall evaluate and report to the Board
concerning the qualifications of candidates to serve as
"interested" Trustees of the Funds.
ii. The Committee may adopt from time to time specific, minimum
qualifications that the Committee believes a candidate must
meet before
M-1
being considered as a candidate for Board membership and
shall comply with any rules adopted from time to time by the
SEC regarding investment company nominating committees and
the nomination of persons to be considered as candidates for
Board membership.
iii. The Committee shall review shareholder recommendations for
nominations to fill vacancies on the Board if such
recommendations are submitted in a timely fashion in writing
and addressed to the Committee at the applicable Trust's
offices. The Committee may adopt, by resolution, a policy
regarding its procedures for considering candidates for the
Board, including any recommended by shareholders.
III. COMMITTEE PROCEDURES
A. MEETINGS
i. The Committee shall meet as needed in open or executive
session.
ii. The Committee may invite members of management, counsel to
the Independent Trustees, Fund counsel, advisers and others
to attend its meetings as it deems appropriate.
iii. A majority of the members of the Committee shall constitute a
quorum for the transaction of business at any meeting of the
Committee. The action of a majority of the members of the
Committee present at a meeting at which a quorum is present
shall be the action of the Committee. The Committee may meet
in person or by telephone, and the Committee may act by
written consent, to the extent permitted by law and by the
applicable Trust's by-laws. The chairman, or a person
designated by the chairman, shall take minutes of all
meetings of the Committee, copies of which shall be furnished
to the Board. In the event of any inconsistency between this
Charter and a Trust's organizational documents, the
provisions of the Trust's organizational documents shall
govern.
B. REPORTS TO THE BOARD
The Committee shall report its activities to the Board and make
such recommendations as are called for under this Charter or as the
Committee may otherwise deem necessary or appropriate.
C. RESOURCES
The Committee shall have the resources appropriate to discharge its
responsibilities, including the authority to consult with counsel
and to retain, at the Trusts' expense, such other experts or
advisors as the Committee deems necessary or appropriate.
M-2
[LOGO OF RYDEX | SGI] PROXY CARD FOR
[FUND NAME PRINTS HERE]
SECURITY GLOBAL INVESTORS(SM) PROXY FOR A SPECIAL JOINT MEETING OF
SHAREHOLDERS - NOVEMBER 22, 2011
The undersigned hereby appoint(s) Joanna Haigney, Amy Lee and Beth Miller, or
any one of them, proxies, each of them with full power of substitution, to vote
and act with respect to all shares of the above referenced fund (the "Fund")
which the undersigned is entitled to vote at the Special Meeting of shareholders
of the Fund to be held at 805 King Farm Boulevard, Suite 600, Rockville,
Maryland 20850 on November 22, 2011 at 1:00 p.m. ET, and at any adjournment(s)
or postponements thereof.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS. THIS PROXY CARD
WILL BE VOTED AS INSTRUCTED. IF NO SPECIFICATION IS MADE, THE PROXY CARD WILL BE
VOTED "FOR" THE PROPOSALS. THE PROXIES ARE AUTHORIZED, IN THEIR DISCRETION, TO
VOTE UPON SUCH MATTERS AS MAY COME BEFORE THE SPECIAL MEETING OR ANY
ADJOURNMENTS.
--------------------------------------------------------
| TAG ID: 123456 |
| |
| NA1 - RYDEX SGI - BALLOT 3 - BOOK 3 RYDEX RETAIL |
| NA2 - RYDEX SGI - BALLOT 3 - BOOK 3 RYDEX RETAIL |
| NA3 - RYDEX SGI - BALLOT 3 - BOOK 3 RYDEX RETAIL |
| NA4 - RYDEX SGI - BALLOT 3 - BOOK 3 RYDEX RETAIL |
| NA5 - RYDEX SGI - BALLOT 3 - BOOK 3 RYDEX RETAIL |
| NA6 - RYDEX SGI - BALLOT 3 - BOOK 3 RYDEX RETAIL |
| NA7 - RYDEX SGI - BALLOT 3 - BOOK 3 RYDEX RETAIL |
--------------------------------------------------------
NOTE: This proxy must be signed exactly as your name(s) appears here on. If as
an attorney, executor, guardian or in some representative capacity or as an
officer of a corporation, please add titles as such. Joint owners must each
sign. By signing this proxy card, you acknowledge that you have received the
proxy statement that the proxy card accompanies.
________________________________________________________________________________
Shareholder sign here Date
________________________________________________________________________________
Joint owner sign here Date
PLEASE SEE THE INSTRUCTIONS BELOW IF YOU WISH TO VOTE BY PHONE (live proxy
representative or touch-tone phone), BY MAIL OR VIA THE INTERNET. Please use
whichever method is most convenient for you. If you choose to vote via the
Internet or by phone, you should not mail your proxy card. Please vote today!
PHONE: To cast your vote by phone with a proxy voting --------------------------------
representative, please call toll-free 1-877-864-5058. | |
Representatives are available to take your voting instructions | CONTROL NUMBER: |
Monday through Friday 9:00 a.m. to 11:00 p.m. Eastern Time. | 123456789112 |
--------------------------------
MAIL: To vote your proxy by mail, check the appropriate voting box
on the reverse side of this proxy card, sign and date the card IMPORTANT NOTICE REGARDING THE
and return it in the enclosed postage-paid envelope. AVAILABILITY OF PROXY MATERIALS FOR
THIS SPECIAL MEETING OF
Options below are available 24 hours a day / 7 days a week SHAREHOLDERS TO BE HELD ON
NOVEMBER 22, 2011
TOUCHTONE: To cast your vote via a touch-tone voting line, call toll-free THE PROXY STATEMENT FOR THIS
1-888-227-9349 and enter the control number to the right. MEETING IS AVAILABLE AT:
www.proxyonline.us/docs/rydexsgi
INTERNET: To vote via the Internet, go to www.proxyonline.us and enter
the control number found to the right.
IT IS IMPORTANT THAT PROXIES BE VOTED PROMPTLY. EVERY SHAREHOLDER'S VOTE IS IMPORTANT.
[FUND NAME PRINTS HERE]
QUESTIONS ABOUT THIS PROXY? Should you have any questions about the proxy
materials or regarding how to vote your shares, please contact our proxy
information line TOLL-FREE AT 1-877-864-5058. Representatives are available
Monday through Friday 9:00 a.m. to 11:00 p.m. Eastern Time. We have retained The
Altman Group to assist our shareholders in the voting process. If we have not
received your proxy card or vote as the date of the Special meeting approaches,
representatives from The Altman Group may call you to remind you to exercise
your vote.
TO VOTE, MARK BOXES BELOW IN BLUE OR BLACK INK AS FOLLOWS. Example: [ ]
YOU MAY VOTE ON THE PROPOSED CHANGES ON THE PROPOSALS AS A GROUP OR
INDIVIDUALLY. PLEASE USE ONLY ONE METHOD.
-------------------------------------------------------------------------------------------------------------------
TO VOTE ALL OF THE PROPOSALS IN ACCORDANCE WITH MANAGEMENT'S RECOMMENDATIONS, PLEASE FOR ALL
CHECK THE BOX TO THE RIGHT.
IF THE FOR ALL BOX ON THIS BALLOT IS MARKED, THIS VOTE WILL OVERRIDE ANY INDIVIDUAL VOTES MADE BELOW. [ ]
-------------------------------------------------------------------------------------------------------------------
FOR AGAINST ABSTAIN
1. To approve a new investment advisory agreement between the Trust
and Securities Investors, LLC. [ ] [ ] [ ]
2. To approve a new investment sub-advisory agreement between Securities
Investors, LLC and American CLS Independence Financial Services, LLC
for Rydex Series Funds - LONG SHORT INTEREST RATE STRATEGY FUND. [ ] [ ] [ ]
3. To approve the following individuals as trustees of the Trust: FOR WITHHOLD
(1) Donald C. Cacciapaglia [ ] [ ]
(2) Corey A. Colehour [ ] [ ]
(3) J. Kenneth Dalton [ ] [ ]
(4) John O. Demaret [ ] [ ]
(5) Richard M. Goldman [ ] [ ]
(6) Werner E. Keller [ ] [ ]
(7) Thomas F. Lydon [ ] [ ]
(8) Patrick T. McCarville [ ] [ ]
(9) Roger Somers [ ] [ ]
FOR AGAINST ABSTAIN
4. To approve a "manager of managers" arrangement [ ] [ ] [ ]
5. To approve the elimination of the fundamental investment policy on
investing in other investment companies for Rydex Series Funds - U.S.
GOVERNMENT MONEY MARKET FUND. [ ] [ ] [ ]
YOU MAY HAVE RECEIVED MORE THAN ONE BALLOT DUE TO MULTIPLE INVESTMENTS IN THE
FUNDS. PLEASE REMEMBER TO VOTE ALL OF YOUR BALLOTS! Remember to SIGN AND DATE
THE REVERSE SIDE before mailing in your vote. This proxy card is valid only when
signed and dated. Thank you for voting.