UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-CSR
CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT INVESTMENT COMPANIES
Investment Company Act file number 811- 09525
Rydex Dynamic Funds
(Exact name of registrant as specified in charter)
805 King Farm Boulevard, Suite 600
Rockville, Maryland 20850
(Address of principal executive offices) (Zip code)
Donald C. Cacciapaglia, President
Rydex Dynamic Funds
805 King Farm Boulevard, Suite 600
Rockville, Maryland 20850
(Name and address of agent for service)
Registrant's telephone number, including area code: 1-301-296-5100
Date of fiscal year end: March 31
Date of reporting period: March 28, 2013
Form N-CSR is to be used by management investment companies to file reports with the Commission not later than 10 days after the transmission to stockholders of any report that is required to be transmitted to stockholders under Rule 30e-1 under the Investment Company Act of 1940 (17 CFR 270.30e-1). The Commission may use the information provided on Form N-CSR in its regulatory, disclosure review, inspection, and policymaking roles.
A registrant is required to disclose the information specified by Form N-CSR, and the Commission will make this information public. A registrant is not required to respond to the collection of information contained in Form N-CSR unless the Form displays a currently valid Office of Management and Budget ("OMB") control number. Please direct comments concerning the accuracy of the information collection burden estimate and any suggestions for reducing the burden to Secretary, Securities and Exchange Commission, 450 Fifth Street, NW, Washington, DC 20549-0609. The OMB has reviewed this collection of information under the clearance requirements of 44 U.S.C. § 3507.
Item 1. Reports to Stockholders.
DOMESTIC EQUITY FUNDS
S&P 500® 2x STRATEGY FUND
INVERSE S&P 500® 2x STRATEGY FUND
NASDAQ-100® 2x STRATEGY FUND
INVERSE NASDAQ-100® 2x STRATEGY FUND
DOW 2x STRATEGY FUND
INVERSE DOW 2x STRATEGY FUND
RUSSELL 2000® 2x STRATEGY FUND
INVERSE RUSSELL 2000® 2x STRATEGY FUND
DYN-ANN-0313x0314
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TABLE OF CONTENTS |
THE RYDEX FUNDS ANNUAL REPORT | 1 |
March 28, 2013 |
Security Investors, LLC (the “Investment Adviser”) is pleased to present the annual shareholder report for eight of our Rydex Funds.
The Investment Adviser is part of Guggenheim Investments, which represents the investment management businesses of Guggenheim Partners, LLC (“Guggenheim”), a global, diversified financial services firm.
Guggenheim Distributors, LLC, is the distributor of the Funds. Guggenheim Distributors, LLC is affiliated with Guggenheim Partners and Security Investors, LLC.
This report covers performance of the following Funds for the three-month period ended March 28, 2013:
DOMESTIC EQUITY FUNDS
– S&P 500® 2x Strategy Fund
– Inverse S&P 500® 2x Strategy Fund
– NASDAQ-100® 2x Strategy Fund
– Inverse NASDAQ-100® 2x Strategy Fund
– Dow 2x Strategy Fund
– Inverse Dow 2x Strategy Fund
– Russell 2000® 2x Strategy Fund
– Inverse Russell 2000® 2x Strategy Fund
We encourage you to read the Economic and Market Overview section of the report, which follows this letter, and then the Performance Report for each Fund.
We are committed to providing innovative investment solutions and appreciate the trust you place in us.
Sincerely,
Donald C. Cacciapaglia
President
April 30, 2013
Read each Fund’s prospectus and summary prospectus (if available) carefully before investing. It contains the Fund’s investment objectives, risks, charges, expenses and other information, which should be considered carefully before investing. Obtain a prospectus and summary prospectus (if available) at guggenheiminvestments.com or call 800.820.0888.
Inverse and leveraged Funds are not suitable for all investors. • These Funds should be utilized only by investors who (a) understand the risks associated with the use of leverage, (b) understand the consequences of seeking daily leveraged investment results, (c) understand the risk of shorting, and (d) intend to actively monitor and manage their investments. • The more a Fund invests in leveraged instruments, the more the leverage will magnify any gains or losses on those investments. • Inverse Funds involve certain risks, which include increased volatility due to the Funds’ possible use of short sales of securities and derivatives, such as options and futures. • The Funds’ use of derivatives, such as futures, options and swap agreements, may expose the Funds’ shareholders to additional risks that they would not be subject to if they invested directly in the securities underlying those derivatives. • Short-selling involves increased risks and costs. You risk paying more for a security than you received from its sale. • Leveraged and inverse Funds seek to provide investment results that match the performance of a specific benchmark, before fees and expenses, on a daily basis. Because the Funds seek to track the performance of their benchmark on a daily basis, mathematical compounding, especially with respect to those Funds that use leverage as part of their investment strategy, may prevent a Fund from correlating with the monthly, quarterly, annual or other period performance of its benchmark. Due to the compounding of daily returns, leveraged and inverse Funds’ returns over periods other than one day will likely differ in amount and possibly direction from the benchmark return for the same period. For those Funds that consistently apply leverage, the value of the Fund’s shares will tend to increase or decrease more than the value of any increase or decrease in its benchmark index. The Funds rebalance their portfolios on a daily basis, increasing exposure in response to that day’s gains or reducing exposure in response to that day’s losses. Daily rebalancing will impair a Fund’s performance if the benchmark experiences volatility. Investors should monitor their leveraged and inverse Funds’ holdings consistent with their strategies, as frequently as daily. • For more on these and other risks, please read the prospectus.
2 | the Rydex FUNDS annual report |
ECONOMIC AND MARKET OVERVIEW | March 28, 2013 |
Recent economic results have been solid, powered by the monetary accommodation from central banks around the world. The U.S. Federal Reserve has signaled that it is likely to continue with its asset purchase program throughout 2013 in an effort to combat long-term structural unemployment. This, coupled with rebound in the housing market, has provided a tailwind for the economy. The run-up in U.S. equity prices, with some major indices testing or exceeding their all-time highs, has also contributed to heightened expectations about the economy and markets. In the fixed income domain, abundant liquidity and the continuation of open-ended quantitative easing have produced a benign credit environment with low default rates.
Following Congress’ New Year’s reprieve on the Fiscal Cliff, markets turned their attention to the impact of sequestration, as well as ongoing tax and spending debates. Despite some uncertainty created by recent political partisanship in Washington, the U.S. economy seems to be on firm footing. Construction spending has been rising, state and local employment has been contributing to GDP and employment growth has been fairly strong. Investors have benefited from the themes that have dominated the environment since the recovery began: tighter credit spreads, low interest rates, improving employment, modest inflation and sustained economic growth. Moreover, the U.S. economic expansion has withstood recent less-than-favorable Chinese economic data and Europe’s continued growth problems and banking crises in certain periphery countries.
For the one-year period ended March 28, 2013, the Standard & Poor’s 500 Index* (the “S&P 500”), which is generally regarded as an indicator of the broad U.S. stock market, returned 13.96%. Foreign developed markets performed in a comparable manner: the Morgan Stanley Capital International (“MSCI”) Europe-Australasia-Far East Index (“EAFE”) Index, which is composed of approximately 1,100 companies in 20 developed countries in Europe and the Pacific Basin, returned 11.25%. Global growth concerns affected emerging markets. The return of the MSCI Emerging Market Index was 1.95%.
In the bond market, higher quality issues underperformed lower-rated bonds, as investors embraced risk. The return of the Barclays U.S. Aggregate Bond Index, which is a proxy for the U.S. investment grade bond market, posted a 3.77% return for the period, while the Barclays U.S. Corporate High Yield Index returned 13.13%. Reflecting the Fed’s continuing accommodative monetary policy, interest rates on short-term securities remained at their lowest levels in many years; the return of the BofA Merrill Lynch 3-Month U.S. Treasury Bill Index was 0.12% for the one-year period.
The opinions and forecasts expressed may not actually come to pass. This information is subject to change at any time, based on market and other conditions, and should not be construed as a recommendation of any specific security or strategy.
*Index Definitions:
The following indices are referenced throughout this report. Indices are unmanaged and not available for direct investment. Index performance does not reflect transaction cost, fees, or expenses.
Barclays U.S. Aggregate Bond Index is a broad-based benchmark that measures the investment grade, U.S. dollar denominated, fixed-rate taxable bond market, including U.S. Treasuries, government-related and corporate securities, MBS (agency fixed-rate and hybrid ARM pass-throughs), ABS, and CMBS.
Barclays U.S. Corporate High Yield Index measures the market of USD-denominated, non-investment grade, fixed-rate, taxable corporate bonds. Securities are classified as high yield if the middle rating of Moody’s, Fitch, and S&P is Ba1/BB+/BB+ or below.
Bank of America Merrill Lynch 3-Month Treasury Bill Index is an unmanaged market index of U.S. Treasury securities maturing in 90 days that assumes reinvestment of all income.
Dow Jones Industrial AverageSM is a price-weighted average of 30 significant stocks traded on the New York Stock Exchange and the Nasdaq. The DJIA was invented by Charles Dow back in 1896.
MSCI EAFE Index (Europe, Australasia, Far East) is a free float-adjusted market capitalization index that is designed to measure the equity market performance of developed markets, excluding the US & Canada.
MSCI Emerging Markets Index is a free float-adjusted market capitalization weighted index that is designed to measure equity market performance in the global emerging markets.
NASDAQ-100® Index includes 100 of the largest domestic and international non-financial securities listed on The Nasdaq Stock Market based on market capitalization. The Index reflects companies across major industry groups including computer hardware and software, telecommunications, retail/wholesale trade and biotechnology. It does not contain securities of financial companies including investment companies.
Russell 2000® Index measures the performance of the small-cap value segment of the U.S. equity universe.
S&P 500® Index is a capitalization-weighted index of 500 stocks designed to measure the performance of the broad economy, representing all major industries and is considered a representation of the U.S. stock market.
the Rydex FUNDS annual report | 3 |
A BRIEF NOTE ON THE COMPOUNDING OF RETURNS (Unaudited) |
The Funds described in this report are benchmarked daily to leveraged and/or inverse leveraged versions of published indices. To properly evaluate the performance of these funds, it is essential to understand the effect of mathematical compounding on their respective returns.
Because of the nonlinear effects of leverage applied over time, it is possible for a fund to perform in line with its benchmark for several individual periods in a row, yet seem to trail the benchmark over the entire period. It is also possible that a fund that performs in-line with its benchmark on a daily basis may seem to outperform its benchmark over longer periods.
An Example of Compounding
For example, consider a hypothetical fund that is designed to produce returns that correspond to 150% of an index. On the first day of a period, the index rises from a level of 100 to a level of 106, producing a 6.0% gain and an expectation that the fund will rise by 9.0%. On the same day, the fund’s net asset value (“NAV”) increases from $10.00 to $10.90 for a gain of 9.0%– in line with its benchmark.
On day two, assume the index falls from 106 to 99 for a loss of about 6.6%. The fund, as expected, falls 9.9% to a price of $9.82. On each day, the fund performed exactly in line with its benchmark, but for the two-day period, the fund was down 1.8%, while the index was down only 1.0%. Without taking into account the daily compounding of returns, one would expect the fund to lose 1.5% and would see the fund as trailing by 0.3% when in fact it had performed perfectly. This example is summarized in the table below.
Index | Index | Fund | Fund | ||||||||||||||||||||
Level | Performance | Expectation | Fund NAV | Performance | Assessment | ||||||||||||||||||
Start | 100 | $10.00 | |||||||||||||||||||||
Day 1 | 106 | 6.0% | 9.0% | $10.90 | 9.0% | in line | |||||||||||||||||
Day 2 | 99 | -6.6% | -9.9% | $9.82 | -9.9% | in line | |||||||||||||||||
Cumulative | -1.0% | -1.5% | -1.8% | -0.3% |
As illustrated by this simple example, the effect of leverage can make it difficult to form expectations or judgments about fund performance given only the returns of the unleveraged index.
Because certain funds seek to track the performance of their benchmark on a daily basis, mathematical compounding, especially with respect to those funds that use leverage as part of their investment strategy, may prevent a fund from correlating with the monthly, quarterly, annual or other period performance of its benchmark. Due to the compounding of daily returns, leveraged and inverse funds’ returns over periods other than one day will likely differ in amount and possibly direction from the benchmark return for the same period. Investors should monitor their leveraged and inverse funds’ holdings consistent with their strategies, as frequently as daily. For those funds that consistently apply leverage, the value of the fund’s shares will tend to increase or decrease more than the value of any increase or decrease in its benchmark index. For more on correlation, leverage and other risks, please read the prospectus.
In general, any change in direction in an index will produce compounding that seems to work against an investor. Were the index to move in the same direction (either up or down) for two or more periods in a row, the compounding of those returns would work in an investor’s favor, causing the fund to seemingly beat its benchmark.
As a general rule of thumb, more leverage in a fund will magnify the compounding effect, while less leverage will generally produce results that are more in line with expectations. In addition, periods of high volatility in an underlying index will also cause the effects of compounding to be more pronounced, while lower volatility will produce a more muted effect.
4 | the Rydex FUNDS annual report |
ABOUT SHAREHOLDERS’ FUND EXPENSES (Unaudited) |
All mutual funds have operating expenses and it is important for our shareholders to understand the impact of costs on their investments. Shareholders of a Fund incur two types of costs: (i) transaction costs, including sales charges (loads) on purchase payments, reinvested dividends, or other distributions; and exchange fees; and (ii) ongoing costs, including management fees, administrative services, and shareholder reports, among others. These ongoing costs, or operating expenses, are deducted from a fund’s gross income and reduce the investment return of the fund.
A fund’s expenses are expressed as a percentage of its average net assets, which is known as the expense ratio. The following examples are intended to help investors understand the ongoing costs (in dollars) of investing in a Fund and to compare these costs with the ongoing costs of investing in other mutual funds.
The examples are based on an investment of $1,000 made at the beginning of the period and held for the entire six-month period beginning September 30, 2012 and ending March 28, 2013.
The following tables illustrate a Fund’s costs in two ways:
Table 1. Based on actual Fund return. This section helps investors estimate the actual expenses paid over the period. The “Ending Account Value” shown is derived from the Fund’s actual return, and the fourth column shows the dollar amount that would have been paid by an investor who started with $1,000 in the Fund. Investors may use the information here, together with the amount invested, to estimate the expenses paid over the period. Simply divide the Fund’s account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number provided under the heading “Expenses Paid During Period.”
Table 2. Based on hypothetical 5% return. This section is intended to help investors compare a Fund’s cost with those of other mutual funds. The table provides information about hypothetical account values and hypothetical expenses based on the Fund’s actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund’s actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses paid during the period. The example is useful in making comparisons because the U.S. Securities and Exchange Commission (the “SEC”) requires all mutual funds to calculate expenses based on the 5% return. Investors can assess a Fund’s costs by comparing this hypothetical example with the hypothetical examples that appear in shareholder reports of other funds.
The calculations illustrated above assume no shares were bought or sold during the period. Actual costs may have been higher or lower, depending on the amount of investment and the timing of any purchases or redemptions.
Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transactional costs, such as sales charges (loads) on purchase payments, and contingent deferred sales charges ("CDSC") on redemptions, if any. Therefore, the second table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.
More information about a Fund’s expenses, including annual expense ratios for the past five years, can be found in the Financial Highlights section of this report. For additional information on operating expenses and other shareholder costs, please refer to the appropriate Fund prospectus.
the Rydex FUNDS annual report | 5 |
ABOUT SHAREHOLDERS’ FUND EXPENSES (Unaudited) (continued) |
Beginning | Ending | Expenses | ||||||||||||||||||
Expense | Fund | Account Value | Account Value | Paid During | ||||||||||||||||
Fund Name | Ratio1 | Return | September 30, 2012 | March 28, 2013 | Period2 | |||||||||||||||
Table 1. Based on actual Fund return3 | ||||||||||||||||||||
S&P 500® 2x Strategy Fund | ||||||||||||||||||||
A-Class | 1.72 | % | 19.03 | % | $1,000.00 | $1,190.30 | $9.24 | |||||||||||||
C-Class | 2.45 | % | 18.63 | % | 1,000.00 | 1,186.30 | 13.13 | |||||||||||||
H-Class | 1.71 | % | 19.07 | % | 1,000.00 | 1,190.70 | 9.19 | |||||||||||||
Inverse S&P 500® 2x Strategy Fund | ||||||||||||||||||||
A-Class | 1.70 | % | (19.93 | %) | 1,000.00 | 800.70 | 7.51 | |||||||||||||
C-Class | 2.45 | % | (20.20 | %) | 1,000.00 | 798.00 | 10.80 | |||||||||||||
H-Class | 1.71 | % | (19.96 | %) | 1,000.00 | 800.40 | 7.55 | |||||||||||||
NASDAQ-100® 2x Strategy Fund | ||||||||||||||||||||
A-Class | 1.74 | % | 0.66 | % | 1,000.00 | 1,006.60 | 8.56 | |||||||||||||
C-Class | 2.50 | % | 0.28 | % | 1,000.00 | 1,002.80 | 12.28 | |||||||||||||
H-Class | 1.75 | % | 0.66 | % | 1,000.00 | 1,006.60 | 8.61 | |||||||||||||
Inverse NASDAQ-100® 2x Strategy Fund | ||||||||||||||||||||
A-Class | 1.73 | % | (6.14 | %) | 1,000.00 | 938.60 | 8.22 | |||||||||||||
C-Class | 2.39 | % | (6.58 | %) | 1,000.00 | 934.20 | 11.34 | |||||||||||||
H-Class | 1.76 | % | (6.25 | %) | 1,000.00 | 937.50 | 8.36 | |||||||||||||
Dow 2x Strategy Fund | ||||||||||||||||||||
A-Class | 1.72 | % | 18.49 | % | 1,000.00 | 1,184.90 | 9.21 | |||||||||||||
C-Class | 2.49 | % | 18.05 | % | 1,000.00 | 1,180.50 | 13.31 | |||||||||||||
H-Class | 1.74 | % | 18.44 | % | 1,000.00 | 1,184.40 | 9.32 | |||||||||||||
Inverse Dow 2x Strategy Fund | ||||||||||||||||||||
A-Class | 1.71 | % | (19.18 | %) | 1,000.00 | 808.20 | 7.58 | |||||||||||||
C-Class | 2.50 | % | (19.56 | %) | 1,000.00 | 804.40 | 11.06 | |||||||||||||
H-Class | 1.74 | % | (19.04 | %) | 1,000.00 | 809.60 | 7.72 | |||||||||||||
Russell 2000® 2x Strategy Fund | ||||||||||||||||||||
A-Class | 1.73 | % | 28.33 | % | 1,000.00 | 1,283.30 | 9.69 | |||||||||||||
C-Class | 2.41 | % | 27.93 | % | 1,000.00 | 1,279.30 | 13.47 | |||||||||||||
H-Class | 1.77 | % | 28.31 | % | 1,000.00 | 1,283.10 | 9.91 | |||||||||||||
Inverse Russell 2000® 2x Strategy Fund | ||||||||||||||||||||
A-Class | 1.79 | % | (26.58 | %) | 1,000.00 | 734.20 | 7.61 | |||||||||||||
C-Class | 2.41 | % | (26.76 | %) | 1,000.00 | 732.40 | 10.24 | |||||||||||||
H-Class | 1.76 | % | (26.49 | %) | 1,000.00 | 735.10 | 7.49 |
6 | the Rydex FUNDS annual report |
ABOUT SHAREHOLDERS’ FUND EXPENSES (Unaudited) (concluded) |
Beginning | Ending | Expenses | ||||||||||||||||||
Expense | Fund | Account Value | Account Value | Paid During | ||||||||||||||||
Fund Name | Ratio1 | Return | September 30, 2012 | March 31, 2013 | Period4 | |||||||||||||||
Table 2. Based on hypothetical 5% return (before expenses)5 | ||||||||||||||||||||
S&P 500® 2x Strategy Fund | ||||||||||||||||||||
A-Class | 1.72 | % | 5.00 | % | $1,000.00 | $1,016.36 | $8.65 | |||||||||||||
C-Class | 2.45 | % | 5.00 | % | 1,000.00 | 1,012.72 | 12.29 | |||||||||||||
H-Class | 1.71 | % | 5.00 | % | 1,000.00 | 1,016.40 | 8.60 | |||||||||||||
Inverse S&P 500® 2x Strategy Fund | ||||||||||||||||||||
A-Class | 1.70 | % | 5.00 | % | 1,000.00 | 1,016.45 | 8.55 | |||||||||||||
C-Class | 2.45 | % | 5.00 | % | 1,000.00 | 1,012.72 | 12.29 | |||||||||||||
H-Class | 1.71 | % | 5.00 | % | 1,000.00 | 1,016.40 | 8.60 | |||||||||||||
NASDAQ-100® 2x Strategy Fund | ||||||||||||||||||||
A-Class | 1.74 | % | 5.00 | % | 1,000.00 | 1,016.26 | 8.75 | |||||||||||||
C-Class | 2.50 | % | 5.00 | % | 1,000.00 | 1,012.47 | 12.54 | |||||||||||||
H-Class | 1.75 | % | 5.00 | % | 1,000.00 | 1,016.21 | 8.80 | |||||||||||||
Inverse NASDAQ-100® 2x Strategy Fund | ||||||||||||||||||||
A-Class | 1.73 | % | 5.00 | % | 1,000.00 | 1,016.31 | 8.70 | |||||||||||||
C-Class | 2.39 | % | 5.00 | % | 1,000.00 | 1,013.01 | 11.99 | |||||||||||||
H-Class | 1.76 | % | 5.00 | % | 1,000.00 | 1,016.16 | 8.85 | |||||||||||||
Dow 2x Strategy Fund | ||||||||||||||||||||
A-Class | 1.72 | % | 5.00 | % | 1,000.00 | 1,016.36 | 8.65 | |||||||||||||
C-Class | 2.49 | % | �� | 5.00 | % | 1,000.00 | 1,012.52 | 12.49 | ||||||||||||
H-Class | 1.74 | % | 5.00 | % | 1,000.00 | 1,016.26 | 8.75 | |||||||||||||
Inverse Dow 2x Strategy Fund | ||||||||||||||||||||
A-Class | 1.71 | % | 5.00 | % | 1,000.00 | 1,016.40 | 8.60 | |||||||||||||
C-Class | 2.50 | % | 5.00 | % | 1,000.00 | 1,012.47 | 12.54 | |||||||||||||
H-Class | 1.74 | % | 5.00 | % | 1,000.00 | 1,016.26 | 8.75 | |||||||||||||
Russell 2000® 2x Strategy Fund | ||||||||||||||||||||
A-Class | 1.73 | % | 5.00 | % | 1,000.00 | 1,016.31 | 8.70 | |||||||||||||
C-Class | 2.41 | % | 5.00 | % | 1,000.00 | 1,012.91 | 12.09 | |||||||||||||
H-Class | 1.77 | % | 5.00 | % | 1,000.00 | 1,016.11 | 8.90 | |||||||||||||
Inverse Russell 2000® 2x Strategy Fund | ||||||||||||||||||||
A-Class | 1.79 | % | 5.00 | % | 1,000.00 | 1,016.01 | 9.00 | |||||||||||||
C-Class | 2.41 | % | 5.00 | % | 1,000.00 | 1,012.91 | 12.09 | |||||||||||||
H-Class | 1.76 | % | 5.00 | % | 1,000.00 | 1,016.16 | 8.85 |
1 | Annualized. |
2 | Expenses are equal to the Fund’s annualized expense ratio, net of any applicable fee waivers, multiplied by the average account value over the period, multiplied by 179/365 (to reflect the one-half year period). |
3 | Actual cumulative return at net asset value for the period September 30, 2012 to March 28, 2013. |
4 | Expenses are equal to the Fund’s annualized expense ratio, net of any applicable fee waivers, multiplied by the average account value over the period, multiplied by 182/365 days (to reflect the one-half year period). |
5 | Hypothetical return for the period September 30, 2012 to March 31, 2013. |
the Rydex FUNDS annual report | 7 |
Performance Report and FUND PROFILE (Unaudited) | March 28, 2013 |
OBJECTIVE: Seeks to provide investment results that match, before fees and expenses, the performance of a specific benchmark on a daily basis. The Fund’s current benchmark is 200% of the performance of the S&P 500® Index (the “underlying index”). The Fund does not seek to achieve its investment objective over a period of time greater than one day.
For the one-year period ended March 28, 2013, S&P 500® 2x Strategy Fund maintained a daily correlation of over 99% to its benchmark of 200% of the daily price movement of the S&P 500® Index. S&P 500® 2x Strategy Fund H-Class returned 24.59%, while the S&P 500 Index gained 13.96% over the same period.
Sectors contributing most to performance of the underlying index were Health Care and Financials. The sector contributing least was Materials. Information Technology was the only sector that detracted from performance of the underlying index.
Johnson & Johnson, Pfizer, Inc. and AT&T, Inc. were the holdings contributing the most to performance of the underlying index for the period. Apple, Inc., Microsoft Corp. and Intel Corp. detracted the most from performance of the underlying index for the year.
Derivatives in the Fund were used to help provide exposure to the composition of the benchmark in the highest efficient manner and to provide leverage, not for hedging purposes. The results of derivatives use during the period were within our expectations and contributed to the Fund’s performance.
Due to the compounding of daily returns, leveraged and inverse funds’ returns over periods other than one day will likely differ in amount and possibly direction from the benchmark return for the same period. Investors should monitor their leveraged and inverse funds’ holdings to ensure that they are consistent with their strategies, as frequently as daily.
The effects of compounding may cause the longer-term correlation of the fund to its benchmark to diminish. The apparent discrepancy between the leveraged and unleveraged indices is the result of compounding, which is described briefly on page 4 of this report.
Performance displayed represents past performance, which is no guarantee of future results.
Holdings Diversification (Market Exposure as % of Net Assets)
“Holdings Diversification (Market Exposure as % of Net Assets)” excludes any temporary cash investments.
Inception Dates: | |
A-Class | September 1, 2004 |
C-Class | November 27, 2000 |
H-Class | May 19, 2000 |
Ten Largest Holdings (% of Total Net Assets) | ||||
Apple, Inc. | 1.8 | % | ||
Exxon Mobil Corp. | 1.7 | % | ||
General Electric Co. | 1.0 | % | ||
Chevron Corp. | 1.0 | % | ||
Johnson & Johnson | 1.0 | % | ||
International Business Machines Corp. | 0.9 | % | ||
Microsoft Corp. | 0.9 | % | ||
Google, Inc. — Class A | 0.9 | % | ||
Procter & Gamble Co. | 0.9 | % | ||
Pfizer, Inc. | 0.9 | % | ||
Top Ten Total | 11.0 | % |
“Ten Largest Holdings” exclude any temporary cash or derivative investments.
8 | the Rydex FUNDS annual report |
Performance Report and FUND PROFILE (Unaudited) (concluded)
Cumulative Fund Performance*
Average Annual Returns*
Periods Ended 03/28/13
1 Year | 5 Year | 10 Year | ||||||||||
C-Class Shares | 23.77 | % | 0.90 | % | 7.52 | % | ||||||
C-Class Shares with CDSC† | 22.77 | % | 0.90 | % | 7.52 | % | ||||||
H-Class Shares | 24.59 | % | 1.65 | % | 8.30 | % | ||||||
S&P 500 Index | 13.96 | % | 5.81 | % | 8.53 | % |
Since | ||||||||||||
Inception | ||||||||||||
1 Year | 5 Year | (09/01/04) | ||||||||||
A-Class Shares | 24.66 | % | 1.63 | % | 3.41 | % | ||||||
A-Class Shares with sales charge‡ | 18.72 | % | 0.65 | % | 2.83 | % | ||||||
S&P 500 Index | 13.96 | % | 5.81 | % | 6.36 | % |
* | The performance data above represents past performance that is not predictive of future results. The investment return and principal value of an investment in the Fund will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than their original cost. Returns are historical and include changes in principal and reinvested dividends and capital gains and do not reflect the effect of taxes. The S&P 500 Index is an unmanaged index and, unlike the Fund, has no management fees or operating expenses to reduce its reported return. The graphs are based on A-Class shares and H-Class shares only; performance for C-Class shares will vary due to differences in fee structure. |
† | Fund returns include a CDSC of 1% if redeemed within 12 months of purchase. |
‡ | Fund returns are calculated using the maximum sales charge of 4.75%. |
the Rydex FUNDS annual report | 9 |
SCHEDULE OF INVESTMENTS | March 28, 2013 |
S&P 500® 2x STRATEGY FUND |
Shares | Value | |||||||
COMMON STOCKS† - 58.6% | ||||||||
INFORMATION TECHNOLOGY - 10.7% | ||||||||
Apple, Inc. | 3,722 | $ | 1,647,470 | |||||
International Business Machines Corp. | 4,153 | 885,836 | ||||||
Microsoft Corp. | 29,886 | 855,039 | ||||||
Google, Inc. — Class A* | 1,054 | 836,908 | ||||||
Oracle Corp. | 14,639 | 473,425 | ||||||
QUALCOMM, Inc. | 6,810 | 455,930 | ||||||
Cisco Systems, Inc. | 21,140 | 442,037 | ||||||
Intel Corp. | 19,608 | 428,434 | ||||||
Visa, Inc. — Class A | 2,044 | 347,153 | ||||||
eBay, Inc.* | 4,628 | 250,930 | ||||||
Mastercard, Inc. — Class A | 419 | 226,733 | ||||||
EMC Corp.* | 8,338 | 199,194 | ||||||
Accenture plc — Class A | 2,552 | 193,875 | ||||||
Hewlett-Packard Co. | 7,741 | 184,545 | ||||||
Texas Instruments, Inc. | 4,380 | 155,401 | ||||||
Automatic Data Processing, Inc. | 1,919 | 124,773 | ||||||
Salesforce.com, Inc.* | 531 | 94,959 | ||||||
Cognizant Technology Solutions | ||||||||
Corp. — Class A* | 1,197 | 91,702 | ||||||
Yahoo!, Inc.* | 3,842 | 90,402 | ||||||
Adobe Systems, Inc.* | 1,981 | 86,193 | ||||||
Dell, Inc. | 5,793 | 83,014 | ||||||
Corning, Inc. | 5,837 | 77,807 | ||||||
Intuit, Inc. | 1,108 | 72,740 | ||||||
Broadcom Corp. — Class A | 2,074 | 71,906 | ||||||
Motorola Solutions, Inc. | 1,094 | 70,049 | ||||||
TE Connectivity Ltd. | 1,666 | 69,856 | ||||||
Symantec Corp.* | 2,732 | 67,426 | ||||||
Applied Materials, Inc. | 4,759 | 64,151 | ||||||
Analog Devices, Inc. | 1,216 | 56,532 | ||||||
Citrix Systems, Inc.* | 739 | 53,326 | ||||||
SanDisk Corp.* | 959 | 52,745 | ||||||
NetApp, Inc.* | 1,431 | 48,883 | ||||||
Amphenol Corp. — Class A | 631 | 47,104 | ||||||
Fiserv, Inc.* | 529 | 46,462 | ||||||
Seagate Technology plc | 1,266 | 46,285 | ||||||
Fidelity National Information | ||||||||
Services, Inc. | 1,165 | 46,157 | ||||||
Altera Corp. | 1,268 | 44,976 | ||||||
Paychex, Inc. | 1,280 | 44,890 | ||||||
Western Digital Corp. | 859 | 43,191 | ||||||
Xerox Corp. | 4,852 | 41,727 | ||||||
Micron Technology, Inc.* | 4,049 | 40,409 | ||||||
Xilinx, Inc. | 1,040 | 39,697 | ||||||
Red Hat, Inc.* | 765 | 38,678 | ||||||
Teradata Corp.* | 657 | 38,441 | ||||||
Juniper Networks, Inc.* | 2,047 | 37,951 | ||||||
Autodesk, Inc.* | 890 | 36,704 | ||||||
Linear Technology Corp. | 923 | 35,416 | ||||||
KLA-Tencor Corp. | 663 | 34,967 | ||||||
Western Union Co. | 2,255 | 33,915 | ||||||
CA, Inc. | 1,319 | 33,199 | ||||||
NVIDIA Corp. | 2,473 | 31,704 | ||||||
Computer Sciences Corp. | 608 | 29,932 | ||||||
VeriSign, Inc.* | 605 | 28,604 | ||||||
Microchip Technology, Inc. | 773 | 28,415 | ||||||
F5 Networks, Inc.* | 312 | 27,793 | ||||||
Lam Research Corp.* | 644 | 26,700 | ||||||
Akamai Technologies, Inc.* | 702 | 24,774 | ||||||
BMC Software, Inc.* | 521 | 24,138 | ||||||
Electronic Arts, Inc.* | 1,190 | 21,063 | ||||||
Harris Corp. | 447 | 20,714 | ||||||
Molex, Inc. | 544 | 15,928 | ||||||
Total System Services, Inc. | 634 | 15,711 | ||||||
SAIC, Inc. | 1,120 | 15,176 | ||||||
FLIR Systems, Inc. | 575 | 14,956 | ||||||
LSI Corp.* | 2,179 | 14,774 | ||||||
Jabil Circuit, Inc. | 729 | 13,472 | ||||||
JDS Uniphase Corp.* | 936 | 12,514 | ||||||
Teradyne, Inc.* | 758 | 12,295 | ||||||
First Solar, Inc.* | 233 | 6,282 | ||||||
Advanced Micro Devices, Inc.*,1 | 2,403 | 6,128 | ||||||
Total Information Technology | 9,980,616 | |||||||
Financials - 9.4% | ||||||||
Berkshire Hathaway, Inc. — Class B* | 7,229 | 753,261 | ||||||
JPMorgan Chase & Co. | 15,171 | 720,016 | ||||||
Wells Fargo & Co. | 19,429 | 718,678 | ||||||
Citigroup, Inc. | 12,047 | 532,959 | ||||||
Bank of America Corp. | 42,896 | 522,473 | ||||||
American Express Co. | 3,810 | 257,022 | ||||||
Goldman Sachs Group, Inc. | 1,735 | 255,305 | ||||||
U.S. Bancorp | 7,387 | 250,641 | ||||||
American International Group, Inc.* | 5,848 | 227,019 | ||||||
Simon Property Group, Inc. | 1,239 | 196,456 | ||||||
MetLife, Inc. | 4,332 | 164,702 | ||||||
PNC Financial Services Group, Inc. | 2,094 | 139,250 | ||||||
Bank of New York Mellon Corp. | 4,612 | 129,090 | ||||||
BlackRock, Inc. — Class A | 499 | 128,183 | ||||||
Capital One Financial Corp. | 2,310 | 126,934 | ||||||
Travelers Companies, Inc. | 1,498 | 126,116 | ||||||
American Tower Corp. — Class A | 1,566 | 120,458 | ||||||
ACE Ltd. | 1,348 | 119,931 | ||||||
Morgan Stanley | 5,443 | 119,637 | ||||||
Prudential Financial, Inc. | 1,847 | 108,955 | ||||||
State Street Corp. | 1,811 | 107,012 | ||||||
Aflac, Inc. | 1,851 | 96,289 | ||||||
Allstate Corp. | 1,893 | 92,890 | ||||||
Chubb Corp. | 1,035 | 90,594 | ||||||
HCP, Inc. | 1,800 | 89,748 | ||||||
Discover Financial Services | 1,964 | 88,066 | ||||||
BB&T Corp. | 2,776 | 87,139 | ||||||
Public Storage | 567 | 86,365 | ||||||
Ventas, Inc. | 1,157 | 84,692 | ||||||
Franklin Resources, Inc. | 551 | 83,096 | ||||||
Marsh & McLennan Companies, Inc. | 2,174 | 82,546 | ||||||
Charles Schwab Corp. | 4,359 | 77,111 | ||||||
T. Rowe Price Group, Inc. | 1,024 | 76,667 | ||||||
Aon plc | 1,235 | 75,953 | ||||||
CME Group, Inc. — Class A | 1,212 | 74,404 | ||||||
Prologis, Inc. | 1,831 | 73,203 | ||||||
Health Care REIT, Inc. | 1,030 | 69,947 | ||||||
Equity Residential | 1,270 | 69,927 |
10 | the Rydex FUNDS annual report | See Notes to Financial Statements. |
SCHEDULE OF INVESTMENTS (continued) | March 28, 2013 |
S&P 500® 2x STRATEGY FUND |
Shares | Value | |||||||
Weyerhaeuser Co. | 2,161 | $ | 67,812 | |||||
SunTrust Banks, Inc. | 2,136 | 61,538 | ||||||
Boston Properties, Inc. | 598 | 60,434 | ||||||
Ameriprise Financial, Inc. | 807 | 59,436 | ||||||
McGraw-Hill Companies, Inc. | 1,108 | 57,705 | ||||||
AvalonBay Communities, Inc. | 448 | 56,748 | ||||||
Fifth Third Bancorp | 3,470 | 56,596 | ||||||
Vornado Realty Trust | 669 | 55,955 | ||||||
Progressive Corp. | 2,202 | 55,645 | ||||||
Loews Corp. | 1,227 | 54,074 | ||||||
Invesco Ltd. | 1,748 | 50,622 | ||||||
Host Hotels & Resorts, Inc. | 2,883 | 50,424 | ||||||
M&T Bank Corp. | 488 | 50,342 | ||||||
Northern Trust Corp. | 863 | 47,085 | ||||||
IntercontinentalExchange, Inc.* | 288 | 46,964 | ||||||
Regions Financial Corp. | 5,606 | 45,913 | ||||||
Hartford Financial Services | ||||||||
Group, Inc. | 1,727 | 44,557 | ||||||
Moody’s Corp. | 768 | 40,950 | ||||||
NYSE Euronext | 966 | 37,326 | ||||||
Principal Financial Group, Inc. | 1,089 | 37,059 | ||||||
SLM Corp. | 1,797 | 36,803 | ||||||
KeyCorp | 3,662 | 36,474 | ||||||
Kimco Realty Corp. | 1,620 | 36,288 | ||||||
XL Group plc — Class A | 1,169 | 35,421 | ||||||
Lincoln National Corp. | 1,076 | 35,088 | ||||||
Plum Creek Timber Company, Inc. | 644 | 33,617 | ||||||
Leucadia National Corp. | 1,159 | 31,791 | ||||||
CBRE Group, Inc. — Class A* | 1,210 | 30,553 | ||||||
Unum Group | 1,070 | 30,228 | ||||||
Cincinnati Financial Corp. | 582 | 27,465 | ||||||
Comerica, Inc. | 744 | 26,747 | ||||||
Huntington Bancshares, Inc. | 3,338 | 24,668 | ||||||
Torchmark Corp. | 371 | 22,186 | ||||||
Genworth Financial, Inc. — Class A* | 1,950 | 19,500 | ||||||
Zions Bancorporation | 727 | 18,168 | ||||||
People’s United Financial, Inc. | 1,343 | 18,050 | ||||||
Apartment Investment & Management | ||||||||
Co. — Class A | 573 | 17,568 | ||||||
Hudson City Bancorp, Inc. | 1,885 | 16,286 | ||||||
NASDAQ OMX Group, Inc. | 465 | 15,020 | ||||||
Legg Mason, Inc. | 455 | 14,628 | ||||||
Assurant, Inc. | 312 | 14,043 | ||||||
E*TRADE Financial Corp.* | 1,018 | 10,903 | ||||||
First Horizon National Corp. | 965 | 10,306 | ||||||
Total Financials | 8,821,721 | |||||||
Health Care - 7.4% | ||||||||
Johnson & Johnson | 11,079 | 903,270 | ||||||
Pfizer, Inc. | 28,500 | 822,510 | ||||||
Merck & Company, Inc. | 11,982 | 529,964 | ||||||
Amgen, Inc. | 2,967 | 304,147 | ||||||
Gilead Sciences, Inc.* | 6,038 | 295,439 | ||||||
Bristol-Myers Squibb Co. | 6,491 | 267,364 | ||||||
AbbVie, Inc. | 6,261 | 255,324 | ||||||
UnitedHealth Group, Inc. | 4,064 | 232,502 | ||||||
Eli Lilly & Co. | 3,958 | 224,775 | ||||||
Abbott Laboratories | 6,227 | 219,937 | ||||||
Celgene Corp.* | 1,660 | 192,411 | ||||||
Medtronic, Inc. | 4,011 | 188,356 | ||||||
Express Scripts Holding Co.* | 3,246 | 187,132 | ||||||
Biogen Idec, Inc.* | 937 | 180,757 | ||||||
Baxter International, Inc. | 2,164 | 157,193 | ||||||
Allergan, Inc. | 1,219 | 136,077 | ||||||
Covidien plc | 1,871 | 126,929 | ||||||
Thermo Fisher Scientific, Inc. | 1,418 | 108,462 | ||||||
McKesson Corp. | 923 | 99,648 | ||||||
WellPoint, Inc. | 1,205 | 79,807 | ||||||
Intuitive Surgical, Inc.* | 157 | 77,117 | ||||||
Stryker Corp. | 1,147 | 74,830 | ||||||
Becton Dickinson and Co. | 769 | 73,524 | ||||||
Alexion Pharmaceuticals, Inc.* | 770 | 70,948 | ||||||
Cigna Corp. | 1,131 | 70,540 | ||||||
Aetna, Inc. | 1,300 | 66,456 | ||||||
Agilent Technologies, Inc. | 1,375 | 57,709 | ||||||
Cardinal Health, Inc. | 1,353 | 56,312 | ||||||
Cerner Corp.* | 575 | 54,481 | ||||||
Zimmer Holdings, Inc. | 671 | 50,473 | ||||||
Actavis, Inc.* | 511 | 47,068 | ||||||
AmerisourceBergen Corp. — Class A | 912 | 46,922 | ||||||
Mylan, Inc.* | 1,568 | 45,378 | ||||||
St. Jude Medical, Inc. | 1,118 | 45,212 | ||||||
Life Technologies Corp.* | 682 | 44,078 | ||||||
Humana, Inc. | 628 | 43,401 | ||||||
Boston Scientific Corp.* | 5,381 | 42,026 | ||||||
Perrigo Co. | 350 | 41,556 | ||||||
DaVita HealthCare Partners, Inc.* | 334 | 39,609 | ||||||
Edwards Lifesciences Corp.* | 452 | 37,136 | ||||||
Quest Diagnostics, Inc. | 627 | 35,394 | ||||||
Forest Laboratories, Inc.* | 926 | 35,225 | ||||||
Laboratory Corporation of | ||||||||
America Holdings* | 369 | 33,284 | ||||||
Waters Corp.* | 340 | 31,929 | ||||||
Varian Medical Systems, Inc.* | 433 | 31,176 | ||||||
CareFusion Corp.* | 882 | 30,861 | ||||||
CR Bard, Inc. | 302 | 30,436 | ||||||
Coventry Health Care, Inc. | 534 | 25,114 | ||||||
DENTSPLY International, Inc. | 565 | 23,967 | ||||||
Hospira, Inc.* | 656 | 21,536 | ||||||
Tenet Healthcare Corp.* | 413 | 19,651 | ||||||
PerkinElmer, Inc. | 451 | 15,172 | ||||||
Patterson Companies, Inc. | 329 | 12,515 | ||||||
Total Health Care | 6,943,040 | |||||||
CONSUMER DISCRETIONARY - 6.8% | ||||||||
Comcast Corp. — Class A | 10,464 | 439,593 | ||||||
Home Depot, Inc. | 5,922 | 413,237 | ||||||
Walt Disney Co. | 7,156 | 406,460 | ||||||
McDonald’s Corp. | 3,972 | 395,968 | ||||||
Amazon.com, Inc.* | 1,445 | 385,078 | ||||||
News Corp. — Class A | 7,928 | 241,962 | ||||||
Time Warner, Inc. | 3,706 | 213,540 | ||||||
Ford Motor Co. | 15,544 | 204,404 | ||||||
Target Corp. | 2,577 | 176,396 | ||||||
NIKE, Inc. — Class B | 2,876 | 169,713 | ||||||
Starbucks Corp. | 2,965 | 168,886 |
See Notes to Financial Statements. | the Rydex FUNDS annual report | 11 |
SCHEDULE OF INVESTMENTS (continued) | March 28, 2013 |
S&P 500® 2x STRATEGY FUND |
Shares | Value | |||||||
Lowe’s Companies, Inc. | 4,400 | $ | 166,848 | |||||
Priceline.com, Inc.* | 197 | 135,522 | ||||||
TJX Companies, Inc. | 2,889 | 135,062 | ||||||
DIRECTV* | 2,275 | 128,788 | ||||||
Yum! Brands, Inc. | 1,783 | 128,269 | ||||||
Time Warner Cable, Inc. | 1,172 | 112,582 | ||||||
Viacom, Inc. — Class B | 1,805 | 111,134 | ||||||
CBS Corp. — Class B | 2,320 | 108,321 | ||||||
Johnson Controls, Inc. | 2,713 | 95,144 | ||||||
Discovery Communications, Inc. — | ||||||||
Class A* | 974 | 76,693 | ||||||
Macy’s, Inc. | 1,566 | 65,522 | ||||||
Omnicom Group, Inc. | 1,036 | 61,021 | ||||||
Dollar General Corp.* | 1,198 | 60,595 | ||||||
Carnival Corp. | 1,761 | 60,402 | ||||||
Mattel, Inc. | 1,361 | 59,598 | ||||||
VF Corp. | 349 | 58,545 | ||||||
Bed Bath & Beyond, Inc.* | 896 | 57,720 | ||||||
AutoZone, Inc.* | 144 | 57,134 | ||||||
Coach, Inc. | 1,113 | 55,639 | ||||||
Ross Stores, Inc. | 878 | 53,224 | ||||||
Delphi Automotive plc | 1,162 | 51,593 | ||||||
Starwood Hotels & Resorts | ||||||||
Worldwide, Inc. | 768 | 48,945 | ||||||
Harley-Davidson, Inc. | 896 | 47,757 | ||||||
Genuine Parts Co. | 609 | 47,502 | ||||||
O’Reilly Automotive, Inc.* | 441 | 45,225 | ||||||
Dollar Tree, Inc.* | 903 | 43,732 | ||||||
L Brands, Inc. | 949 | 42,382 | ||||||
Netflix, Inc.* | 222 | 42,049 | ||||||
The Gap, Inc. | 1,178 | 41,701 | ||||||
Ralph Lauren Corp. — Class A | 241 | 40,804 | ||||||
Marriott International, Inc. — Class A | 966 | 40,794 | ||||||
Chipotle Mexican Grill, Inc. — Class A* | 123 | 40,082 | ||||||
Wynn Resorts Ltd. | 316 | 39,550 | ||||||
Kohl’s Corp. | 841 | 38,795 | ||||||
CarMax, Inc.* | 905 | 37,739 | ||||||
Whirlpool Corp. | 309 | 36,604 | ||||||
Staples, Inc. | 2,669 | 35,845 | ||||||
BorgWarner, Inc.* | 458 | 35,422 | ||||||
Wyndham Worldwide Corp. | 542 | 34,948 | ||||||
Tiffany & Co. | 476 | 33,101 | ||||||
PVH Corp. | 308 | 32,897 | ||||||
Nordstrom, Inc. | 594 | 32,807 | ||||||
H&R Block, Inc. | 1,078 | 31,715 | ||||||
Newell Rubbermaid, Inc. | 1,135 | 29,624 | ||||||
PulteGroup, Inc.* | 1,352 | 27,365 | ||||||
Lennar Corp. — Class A | 651 | 27,003 | ||||||
DR Horton, Inc. | 1,106 | 26,876 | ||||||
Darden Restaurants, Inc. | 517 | 26,719 | ||||||
PetSmart, Inc. | 424 | 26,330 | ||||||
Best Buy Company, Inc. | 1,054 | 23,346 | ||||||
TripAdvisor, Inc.* | 431 | 22,636 | ||||||
Family Dollar Stores, Inc. | 381 | 22,498 | ||||||
Expedia, Inc. | 369 | 22,144 | ||||||
Scripps Networks Interactive, Inc. — | ||||||||
Class A | 341 | 21,940 | ||||||
Interpublic Group of Companies, Inc. | 1,641 | 21,382 | ||||||
Fossil, Inc.* | 212 | 20,479 | ||||||
Hasbro, Inc.1 | 454 | 19,949 | ||||||
Gannett Company, Inc. | 907 | 19,836 | ||||||
Leggett & Platt, Inc. | 567 | 19,153 | ||||||
International Game Technology | 1,047 | 17,276 | ||||||
Urban Outfitters, Inc.* | 434 | 16,813 | ||||||
Abercrombie & Fitch Co. — Class A | 315 | 14,553 | ||||||
Garmin Ltd. | 438 | 14,472 | ||||||
GameStop Corp. — Class A1 | 476 | 13,314 | ||||||
Cablevision Systems Corp. — Class A | 848 | 12,686 | ||||||
Goodyear Tire & Rubber Co.* | 971 | 12,244 | ||||||
Harman International Industries, Inc. | 269 | 12,005 | ||||||
JC Penney Company, Inc.1 | 565 | 8,537 | ||||||
Washington Post Co. — Class B | 18 | 8,046 | ||||||
Apollo Group, Inc. — Class A* | 393 | 6,834 | ||||||
AutoNation, Inc.* | 153 | 6,694 | ||||||
Total Consumer Discretionary | 6,445,743 | |||||||
Consumer Staples - 6.5% | ||||||||
Procter & Gamble Co. | 10,828 | 834,414 | ||||||
Coca-Cola Co. | 15,194 | 614,444 | ||||||
Philip Morris International, Inc. | 6,532 | 605,582 | ||||||
Wal-Mart Stores, Inc. | 6,633 | 496,348 | ||||||
PepsiCo, Inc. | 6,118 | 483,995 | ||||||
Altria Group, Inc. | 7,968 | 274,020 | ||||||
CVS Caremark Corp. | 4,881 | 268,406 | ||||||
Mondelez International, Inc. — Class A | 7,054 | 215,922 | ||||||
Colgate-Palmolive Co. | 1,743 | 205,726 | ||||||
Costco Wholesale Corp. | 1,730 | 183,570 | ||||||
Walgreen Co. | 3,407 | 162,446 | ||||||
Kimberly-Clark Corp. | 1,537 | 150,595 | ||||||
General Mills, Inc. | 2,558 | 126,135 | ||||||
Kraft Foods Group, Inc. | 2,345 | 120,838 | ||||||
HJ Heinz Co. | 1,270 | 91,783 | ||||||
Archer-Daniels-Midland Co. | 2,608 | 87,968 | ||||||
Sysco Corp. | 2,319 | 81,559 | ||||||
Kroger Co. | 2,058 | 68,202 | ||||||
Kellogg Co. | 985 | 63,464 | ||||||
Mead Johnson Nutrition Co. — Class A | 803 | 62,192 | ||||||
Lorillard, Inc. | 1,504 | 60,686 | ||||||
Estee Lauder Companies, Inc. — Class A | 946 | 60,573 | ||||||
Whole Foods Market, Inc. | 683 | 59,250 | ||||||
ConAgra Foods, Inc. | 1,637 | 58,621 | ||||||
Reynolds American, Inc. | 1,276 | 56,769 | ||||||
Hershey Co. | 595 | 52,080 | ||||||
Clorox Co. | 519 | 45,947 | ||||||
Brown-Forman Corp. — Class B | 600 | 42,841 | ||||||
JM Smucker Co. | 425 | 42,143 | ||||||
Beam, Inc. | 636 | 40,411 | ||||||
McCormick & Company, Inc. | 526 | 38,687 | ||||||
Coca-Cola Enterprises, Inc. | 1,040 | 38,397 | ||||||
Dr Pepper Snapple Group, Inc. | 807 | 37,889 | ||||||
Avon Products, Inc. | 1,718 | 35,614 | ||||||
Campbell Soup Co. | 710 | 32,206 | ||||||
Molson Coors Brewing Co. — Class B | 623 | 30,483 | ||||||
Constellation Brands, Inc. — Class A* | 606 | 28,870 | ||||||
Tyson Foods, Inc. — Class A | 1,124 | 27,898 | ||||||
Monster Beverage Corp.* | 571 | 27,260 |
12 | the Rydex FUNDS annual report | See Notes to Financial Statements. |
SCHEDULE OF INVESTMENTS (continued) | March 28, 2013 |
S&P 500® 2x STRATEGY FUND |
Shares | Value | |||||||
Safeway, Inc. | 946 | $ | 24,927 | |||||
Hormel Foods Corp. | 533 | 22,024 | ||||||
Dean Foods Co.* | 740 | 13,416 | ||||||
Total Consumer Staples | 6,074,601 | |||||||
Energy - 6.4% | ||||||||
Exxon Mobil Corp. | 17,762 | 1,600,533 | ||||||
Chevron Corp. | 7,702 | 915,152 | ||||||
Schlumberger Ltd. | 5,262 | 394,072 | ||||||
ConocoPhillips | 4,841 | 290,945 | ||||||
Occidental Petroleum Corp. | 3,193 | 250,235 | ||||||
Anadarko Petroleum Corp. | 1,982 | 173,327 | ||||||
Phillips 66 | 2,464 | 172,406 | ||||||
Halliburton Co. | 3,691 | 149,153 | ||||||
EOG Resources, Inc. | 1,075 | 137,676 | ||||||
Apache Corp. | 1,552 | 119,752 | ||||||
National Oilwell Varco, Inc. | 1,688 | 119,426 | ||||||
Marathon Petroleum Corp. | 1,314 | 117,734 | ||||||
Williams Companies, Inc. | 2,701 | 101,180 | ||||||
Valero Energy Corp. | 2,187 | 99,487 | ||||||
Kinder Morgan, Inc. | 2,502 | 96,777 | ||||||
Marathon Oil Corp. | 2,802 | 94,483 | ||||||
Devon Energy Corp. | 1,501 | 84,686 | ||||||
Hess Corp. | 1,178 | 84,357 | ||||||
Noble Energy, Inc. | 708 | 81,887 | ||||||
Baker Hughes, Inc. | 1,754 | 81,403 | ||||||
Spectra Energy Corp. | 2,645 | 81,334 | ||||||
Pioneer Natural Resources Co. | 521 | 64,734 | ||||||
Cameron International Corp.* | 986 | 64,287 | ||||||
Cabot Oil & Gas Corp. | 830 | 56,116 | ||||||
Ensco plc — Class A | 918 | 55,080 | ||||||
Range Resources Corp. | 650 | 52,676 | ||||||
Southwestern Energy Co.* | 1,393 | 51,903 | ||||||
FMC Technologies, Inc.* | 938 | 51,018 | ||||||
Murphy Oil Corp. | 718 | 45,758 | ||||||
Chesapeake Energy Corp. | 2,067 | 42,187 | ||||||
Equities Corp. | 596 | 40,379 | ||||||
Noble Corp. | 1,006 | 38,379 | ||||||
Tesoro Corp. | 545 | 31,910 | ||||||
CONSOL Energy, Inc. | 906 | 30,487 | ||||||
Denbury Resources, Inc.* | 1,481 | 27,621 | ||||||
Helmerich & Payne, Inc. | 424 | 25,737 | ||||||
QEP Resources, Inc. | 710 | 22,606 | ||||||
Peabody Energy Corp. | 1,066 | 22,546 | ||||||
Diamond Offshore Drilling, Inc. | 275 | 19,129 | ||||||
Nabors Industries Ltd. | 1,150 | 18,653 | ||||||
Rowan Companies plc — Class A* | 493 | 17,432 | ||||||
WPX Energy, Inc.* | 797 | 12,768 | ||||||
Newfield Exploration Co.* | 536 | 12,017 | ||||||
Total Energy | 6,049,428 | |||||||
Industrials - 6.0% | ||||||||
General Electric Co. | 41,222 | 953,053 | ||||||
United Technologies Corp. | 3,342 | 312,242 | ||||||
3M Co. | 2,515 | 267,370 | ||||||
Union Pacific Corp. | 1,860 | 264,882 | ||||||
United Parcel Service, Inc. — Class B | 2,832 | 243,270 | ||||||
Honeywell International, Inc. | 3,102 | 233,736 | ||||||
Boeing Co. | 2,699 | 231,709 | ||||||
Caterpillar, Inc. | 2,597 | 225,862 | ||||||
Emerson Electric Co. | 2,863 | 159,955 | ||||||
Danaher Corp. | 2,295 | 142,634 | ||||||
Deere & Co. | 1,544 | 132,753 | ||||||
Eaton Corporation plc | 1,871 | 114,599 | ||||||
FedEx Corp. | 1,161 | 114,010 | ||||||
Precision Castparts Corp. | 583 | 110,548 | ||||||
Lockheed Martin Corp. | 1,060 | 102,311 | ||||||
Illinois Tool Works, Inc. | 1,646 | 100,306 | ||||||
CSX Corp. | 4,047 | 99,678 | ||||||
Norfolk Southern Corp. | 1,247 | 96,119 | ||||||
General Dynamics Corp. | 1,313 | 92,580 | ||||||
Cummins, Inc. | 700 | 81,067 | ||||||
Raytheon Co. | 1,290 | 75,839 | ||||||
PACCAR, Inc. | 1,400 | 70,784 | ||||||
Waste Management, Inc. | 1,732 | 67,912 | ||||||
Northrop Grumman Corp. | 940 | 65,941 | ||||||
Ingersoll-Rand plc | 1,093 | 60,126 | ||||||
Tyco International Ltd. | 1,849 | 59,168 | ||||||
Fastenal Co. | 1,072 | 55,048 | ||||||
Parker Hannifin Corp. | 591 | 54,124 | ||||||
WW Grainger, Inc. | 234 | 52,645 | ||||||
Stanley Black & Decker, Inc. | 635 | 51,416 | ||||||
Dover Corp. | 692 | 50,433 | ||||||
Roper Industries, Inc. | 392 | 49,906 | ||||||
Rockwell Automation, Inc. | 552 | 47,665 | ||||||
ADT Corp. | 919 | 44,976 | ||||||
Pentair Ltd. | 817 | 43,097 | ||||||
Fluor Corp. | 644 | 42,716 | ||||||
Republic Services, Inc. — Class A | 1,179 | 38,907 | ||||||
Southwest Airlines Co. | 2,886 | 38,903 | ||||||
CH Robinson Worldwide, Inc. | 638 | 37,935 | ||||||
Stericycle, Inc.* | 341 | 36,207 | ||||||
Rockwell Collins, Inc. | 541 | 34,148 | ||||||
Textron, Inc. | 1,076 | 32,076 | ||||||
Flowserve Corp. | 191 | 32,033 | ||||||
Pall Corp. | 440 | 30,083 | ||||||
Expeditors International of | ||||||||
Washington, Inc. | 819 | 29,246 | ||||||
Jacobs Engineering Group, Inc.* | 513 | 28,851 | ||||||
L-3 Communications Holdings, Inc. | 356 | 28,808 | ||||||
Masco Corp. | 1,414 | 28,634 | ||||||
Equifax, Inc. | 477 | 27,471 | ||||||
Joy Global, Inc. | 416 | 24,760 | ||||||
Quanta Services, Inc.* | 848 | 24,236 | ||||||
Iron Mountain, Inc. | 663 | 24,073 | ||||||
Robert Half International, Inc. | 553 | 20,754 | ||||||
Xylem, Inc. | 736 | 20,284 | ||||||
Snap-on, Inc. | 226 | 18,690 | ||||||
Cintas Corp. | 415 | 18,314 | ||||||
Avery Dennison Corp. | 393 | 16,927 | ||||||
Dun & Bradstreet Corp. | 162 | 13,551 | ||||||
Ryder System, Inc. | 203 | 12,129 | ||||||
Pitney Bowes, Inc.1 | 799 | 11,873 | ||||||
Total Industrials | 5,599,373 |
See Notes to Financial Statements. | the Rydex FUNDS annual report | 13 |
SCHEDULE OF INVESTMENTS (continued) | March 28, 2013 |
S&P 500® 2x STRATEGY FUND |
Shares | Value | |||||||
Utilities - 2.1% | ||||||||
Duke Energy Corp. | 2,792 | $ | 202,671 | |||||
Southern Co. | 3,445 | 161,639 | ||||||
Dominion Resources, Inc. | 2,285 | 132,942 | ||||||
NextEra Energy, Inc. | 1,684 | 130,813 | ||||||
Exelon Corp. | 3,385 | 116,715 | ||||||
American Electric Power Company, Inc. | 1,924 | 93,564 | ||||||
PG&E Corp. | 1,740 | 77,483 | ||||||
PPL Corp. | 2,307 | 72,232 | ||||||
Sempra Energy | 896 | 71,626 | ||||||
Consolidated Edison, Inc. | 1,161 | 70,856 | ||||||
FirstEnergy Corp. | 1,658 | 69,968 | ||||||
Public Service Enterprise Group, Inc. | 2,010 | 69,023 | ||||||
Edison International | 1,288 | 64,812 | ||||||
Xcel Energy, Inc. | 1,935 | 57,470 | ||||||
Northeast Utilities | 1,247 | 54,195 | ||||||
DTE Energy Co. | 684 | 46,745 | ||||||
Entergy Corp. | 703 | 44,458 | ||||||
CenterPoint Energy, Inc. | 1,695 | 40,612 | ||||||
Wisconsin Energy Corp. | 908 | 38,944 | ||||||
ONEOK, Inc. | 812 | 38,708 | ||||||
NiSource, Inc. | 1,230 | 36,088 | ||||||
NRG Energy, Inc. | 1,280 | 33,907 | ||||||
Ameren Corp. | 959 | 33,584 | ||||||
AES Corp. | 2,453 | 30,834 | ||||||
CMS Energy Corp. | 1,053 | 29,421 | ||||||
SCANA Corp. | 527 | 26,961 | ||||||
Pinnacle West Capital Corp. | 434 | 25,124 | ||||||
Pepco Holdings, Inc. | 916 | 19,602 | ||||||
AGL Resources, Inc. | 467 | 19,591 | ||||||
Integrys Energy Group, Inc. | 308 | 17,913 | ||||||
TECO Energy, Inc. | 809 | 14,416 | ||||||
Total Utilities | 1,942,917 | |||||||
Materials - 2.0% | ||||||||
Monsanto Co. | 2,125 | 224,463 | ||||||
EI du Pont de Nemours & Co. | 3,703 | 182,040 | ||||||
Dow Chemical Co. | 4,773 | 151,973 | ||||||
Praxair, Inc. | 1,170 | 130,502 | ||||||
Freeport-McMoRan Copper & Gold, Inc. | 3,761 | 124,489 | ||||||
LyondellBasell Industries N.V. — Class A | 1,505 | 95,251 | ||||||
Ecolab, Inc. | 1,050 | 84,189 | ||||||
Newmont Mining Corp. | 1,969 | 82,481 | ||||||
International Paper Co. | 1,747 | 81,375 | ||||||
PPG Industries, Inc. | 566 | 75,810 | ||||||
Air Products & Chemicals, Inc. | 823 | 71,700 | ||||||
Mosaic Co. | 1,098 | 65,452 | ||||||
Nucor Corp. | 1,258 | 58,057 | ||||||
Sherwin-Williams Co. | 336 | 56,747 | ||||||
CF Industries Holdings, Inc. | 245 | 46,641 | ||||||
Eastman Chemical Co. | 608 | 42,481 | ||||||
Sigma-Aldrich Corp. | 472 | 36,665 | ||||||
Alcoa, Inc. | 4,236 | 36,091 | ||||||
FMC Corp. | 548 | 31,252 | ||||||
Ball Corp. | 592 | 28,167 | ||||||
Airgas, Inc. | 271 | 26,872 | ||||||
Vulcan Materials Co. | 515 | 26,626 | ||||||
MeadWestvaco Corp. | 698 | 25,337 | ||||||
International Flavors & Fragrances, Inc. | 318 | 24,381 | ||||||
Sealed Air Corp. | 771 | 18,589 | ||||||
Owens-Illinois, Inc.* | 650 | 17,323 | ||||||
Bemis Company, Inc. | 408 | 16,467 | ||||||
Allegheny Technologies, Inc. | 426 | 13,508 | ||||||
Cliffs Natural Resources, Inc.1 | 598 | 11,368 | ||||||
United States Steel Corp. | 572 | 11,154 | ||||||
Total Materials | 1,897,451 | |||||||
Telecommunication Services - 1.7% | ||||||||
AT&T, Inc. | 21,771 | 798,778 | ||||||
Verizon Communications, Inc. | 11,326 | 556,673 | ||||||
CenturyLink, Inc. | 2,476 | 86,982 | ||||||
Crown Castle International Corp.* | 1,166 | 81,200 | ||||||
Sprint Nextel Corp.* | 11,939 | 74,141 | ||||||
Windstream Corp.1 | 2,336 | 18,571 | ||||||
Frontier Communications Corp.1 | 3,956 | 15,745 | ||||||
MetroPCS Communications, Inc.* | 1,273 | 13,876 | ||||||
Total Telecommunication Services | 1,645,966 | |||||||
Total Common Stocks | ||||||||
(Cost $42,121,484) | 55,400,856 | |||||||
Face | ||||||||
Amount | ||||||||
REPURCHASE AGREEMENTS††,2 - 66.4% | ||||||||
Mizuho Financial Group, Inc. | ||||||||
issued 03/28/13 at 0.11% | ||||||||
due 04/01/13 | $ | 50,202,368 | 50,202,368 | |||||
Credit Suisse Group | ||||||||
issued 03/28/13 at 0.10% | ||||||||
due 04/01/133 | 12,330,098 | 12,330,098 | ||||||
Total Repurchase Agreements | ||||||||
(Cost $62,532,466) | 62,532,466 | |||||||
SECURITIES LENDING COLLATERAL††,4 - 0.0% | ||||||||
Repurchase Agreements | ||||||||
RBS Securities, Inc. | ||||||||
issued 03/28/13 at 0.18% | ||||||||
due 04/01/13 | 23,104 | 23,104 | ||||||
HSBC Securities, Inc. | ||||||||
issued 03/28/13 at 0.17% | ||||||||
due 04/01/13 | 18,175 | 18,175 | ||||||
Total Securities Lending Collateral | ||||||||
(Cost $41,279) | 41,279 | |||||||
Total Investments - 125.3% | ||||||||
(Cost $104,695,229) | $ | 117,974,601 | ||||||
Other Assets & Liabilities, net - (25.3)% | (23,837,273 | ) | ||||||
Total Net Assets - 100.0% | $ | 94,137,328 |
14 | the Rydex FUNDS annual report | See Notes to Financial Statements. |
SCHEDULE OF INVESTMENTS (concluded) | March 28, 2013 |
S&P 500® 2x STRATEGY FUND |
Unrealized | ||||||||
Contracts | Gain | |||||||
EQUITY FUTURES CONTRACTS PURCHASED† | ||||||||
June 2013 S&P 500 Index Mini | ||||||||
Futures Contracts | ||||||||
(Aggregate Value of | ||||||||
Contracts $8,196,563) | 105 | $ | 28,019 | |||||
Units | ||||||||
EQUITY INDEX SWAP AGREEMENTS†† | ||||||||
Credit Suisse Capital, LLC | ||||||||
April 2013 S&P 500 Index Swap, | ||||||||
Terminating 04/30/135 | ||||||||
(Notional Value $84,007,417) | 53,536 | $ | 335,032 | |||||
Goldman Sachs International | ||||||||
April 2013 S&P 500 Index Swap, | ||||||||
Terminating 04/29/135 | ||||||||
(Notional Value $32,213,672) | 20,529 | 104,894 | ||||||
Barclays Bank plc | ||||||||
April 2013 S&P 500 Index Swap, | ||||||||
Terminating 04/30/135 | ||||||||
(Notional Value $8,422,403) | 5,367 | 33,265 | ||||||
(Total Notional Value | ||||||||
$124,643,492) | $ | 473,191 |
* | Non-income producing security. |
† | Value determined based on Level 1 inputs — See Note 4. |
† † | Value determined based on Level 2 inputs — See Note 4. |
1 | All or portion of this security is on loan at March 28, 2013 — See Note 10. |
2 | Repurchase Agreements — See Note 5. |
3 | All or a portion of this security is pledged as equity index swap collateral at March 28, 2013. |
4 | Securities lending collateral — See Note 10. |
5 | Total Return based on S&P 500 Index +/- financing at a variable rate. |
plc — Public Limited Company
REIT — Real Estate Investment Trust
See Notes to Financial Statements. | the Rydex FUNDS annual report | 15 |
S&P 500® 2x STRATEGY FUND |
STATEMENT OF ASSETS |
AND LIABILITIES |
March 28, 2013 |
Assets: | ||||
Investments, at value - including $40,486 of securities loaned | ||||
(cost $42,121,484) | $ | 55,400,856 | ||
Repurchase agreements, at value | ||||
(cost $62,573,745) | 62,573,745 | |||
Total investments | ||||
(cost $104,695,229) | 117,974,601 | |||
Segregated cash with broker | 7,845,698 | |||
Unrealized appreciation on swap agreements | 473,191 | |||
Receivable for swap settlement | 60,910 | |||
Cash | 10,432 | |||
Receivables: | ||||
Fund shares sold | 4,241,352 | |||
Variation margin | 236,374 | |||
Dividends | 69,213 | |||
Interest | 805 | |||
Total assets | 130,912,576 | |||
Liabilities: | ||||
Payable for: | ||||
Fund shares redeemed | 36,479,728 | |||
Management fees | 79,666 | |||
Upon return of securities loaned | 41,279 | |||
Distribution and service fees | 28,639 | |||
Transfer agent and administrative fees | 22,130 | |||
Portfolio accounting fees | 13,278 | |||
Securities purchased | 8,042 | |||
Miscellaneous | 102,486 | |||
Total liabilities | 36,775,248 | |||
Net assets | $ | 94,137,328 | ||
Net assets consist of: | ||||
Paid in capital | $ | 120,855,661 | ||
Undistributed net investment income | 4,093 | |||
Accumulated net realized loss on investments | (40,503,008 | ) | ||
Net unrealized appreciation on investments | 13,780,582 | |||
Net assets | $ | 94,137,328 | ||
A-Class: | ||||
Net assets | $ | 6,537,310 | ||
Capital shares outstanding | 159,837 | |||
Net asset value per share | $ | 40.90 | ||
Maximum offering price per share | ||||
(Net asset value divided by 95.25%) | $ | 42.94 | ||
C-Class: | ||||
Net assets | $ | 10,666,805 | ||
Capital shares outstanding | 287,337 | |||
Net asset value per share | $ | 37.12 | ||
H-Class: | ||||
Net assets | $ | 76,933,213 | ||
Capital shares outstanding | 1,881,801 | |||
Net asset value per share | $ | 40.88 |
STATEMENTS OF |
OPERATIONS |
Period | Year Ended | |||||||
January 1, 2013 to | December 31, | |||||||
March 28, 2013* | 2012 | |||||||
Investment Income: | ||||||||
Dividends** | $ | 280,034 | $ | 1,281,365 | ||||
Interest | 7,328 | 60,210 | ||||||
Income from securities lending, net | 210 | 500 | ||||||
Total investment income | 287,572 | 1,342,075 | ||||||
Expenses: | ||||||||
Management fees | 223,848 | 1,006,055 | ||||||
Transfer agent and administrative fees | 62,180 | 279,460 | ||||||
Distribution and service fees: | ||||||||
A-Class | 3,879 | 14,755 | ||||||
C-Class | 24,460 | 114,838 | ||||||
H-Class | 52,187 | 235,996 | ||||||
Professional fees | 42,749 | 28,947 | ||||||
Portfolio accounting fees | 37,308 | 167,678 | ||||||
Registration fees | 31,882 | 62,601 | ||||||
Custodian fees | 2,920 | 24,763 | ||||||
Trustees’ fees† | 2,434 | 11,441 | ||||||
Miscellaneous | (27,642 | ) | 111,384 | |||||
Total expenses | 456,205 | 2,057,918 | ||||||
Net investment loss | (168,633 | ) | (715,843 | ) | ||||
Net Realized and Unrealized Gain (Loss): | ||||||||
Net realized gain (loss) on: | ||||||||
Investments | 516,296 | 18,152,192 | ||||||
Swap agreements | 12,712,631 | 14,506,890 | ||||||
Futures contracts | 2,599,218 | 3,979,513 | ||||||
Net realized gain | 15,828,145 | 36,638,595 | ||||||
Net change in unrealized appreciation (depreciation) on: | ||||||||
Investments | 4,934,611 | (9,526,274 | ) | |||||
Swap agreements | (433,894 | ) | 1,544,160 | |||||
Futures contracts | (253,540 | ) | 191,680 | |||||
Net change in unrealized appreciation (depreciation) | 4,247,177 | (7,790,434 | ) | |||||
Net realized and unrealized gain | 20,075,322 | 28,848,161 | ||||||
Net increase in net assets resulting from operations | $ | 19,906,689 | $ | 28,132,318 |
* The Fund changed its fiscal year end from December to March in 2013.
** Net of foreign withholding tax of $90 and $704 for the period January 1, 2013 to March 28, 2013 and year ended December 31, 2012, respectively.
† Relates to Trustees not deemed “interested persons” within the meaning of Section 2(a)(19) of the 1940 Act.
16 | the Rydex FUNDS annual report | See Notes to Financial Statements. |
S&P 500® 2x STRATEGY FUND |
STATEMENTS OF CHANGES IN NET ASSETS |
Period | Year Ended | Year Ended | ||||||||||
January 1, 2013 to | December 31, | December 31, | ||||||||||
March 28, 2013* | 2012 | 2011 | ||||||||||
Increase (Decrease) In Net Assets From Operations: | ||||||||||||
Net investment loss | $ | (168,633 | ) | $ | (715,843 | ) | $ | (1,102,554 | ) | |||
Net realized gain on investments | 15,828,145 | 36,638,595 | 3,107,477 | |||||||||
Net change in unrealized appreciation (depreciation) on investments | 4,247,177 | (7,790,434 | ) | (14,409,830 | ) | |||||||
Net increase (decrease) in net assets resulting from operations | 19,906,689 | 28,132,318 | (12,404,907 | ) | ||||||||
Capital share transactions: | ||||||||||||
Proceeds from sale of shares | ||||||||||||
A-Class | 3,108,935 | 5,345,648 | 10,547,070 | |||||||||
C-Class | 13,974,092 | 137,299,494 | 201,678,258 | |||||||||
H-Class | 781,575,961 | 5,303,245,543 | 4,321,567,697 | |||||||||
Cost of shares redeemed | ||||||||||||
A-Class | (2,806,247 | ) | (7,721,809 | ) | (15,938,654 | ) | ||||||
C-Class | (13,699,428 | ) | (142,790,939 | ) | (206,648,444 | ) | ||||||
H-Class | (786,175,033 | ) | (5,436,451,502 | ) | (4,274,141,798 | ) | ||||||
Net increase (decrease) from capital share transactions | (4,021,720 | ) | (141,073,565 | ) | 37,064,129 | |||||||
Net increase (decrease) in net assets | 15,884,969 | (112,941,247 | ) | 24,659,222 | ||||||||
Net assets: | ||||||||||||
Beginning of period | 78,252,359 | 191,193,606 | 166,534,384 | |||||||||
End of period | $ | 94,137,328 | $ | 78,252,359 | $ | 191,193,606 | ||||||
Undistributed net investment income at end of period | $ | 4,093 | $ | 4,093 | $ | — | ||||||
Capital share activity: | ||||||||||||
Shares sold | ||||||||||||
A-Class | 81,734 | 167,157 | 381,959 | |||||||||
C-Class | 408,328 | 4,854,385 | 8,153,246 | |||||||||
H-Class | 20,646,485 | 170,656,205 | 155,493,316 | |||||||||
Shares redeemed | ||||||||||||
A-Class | (72,691 | ) | (245,083 | ) | (572,352 | ) | ||||||
C-Class | (399,196 | ) | (5,030,393 | ) | (8,366,859 | ) | ||||||
H-Class | (20,678,784 | ) | (175,406,405 | ) | (153,892,681 | ) | ||||||
Net increase (decrease) in shares | (14,124 | ) | (5,004,134 | ) | 1,196,629 |
* | The Fund changed its fiscal year end from December to March in 2013. |
See Notes to Financial Statements. | the Rydex FUNDS annual report | 17 |
S&P 500® 2x STRATEGY FUND |
FINANCIAL HIGHLIGHTS |
This table is presented to show selected data for a share outstanding throughout each period and to assist shareholders in evaluating a Fund’s performance for the periods presented.
Period Ended | Year Ended | Year Ended | Year Ended | Year Ended | Year Ended | |||||||||||||||||||
March 28, | December 31, | December 31, | December 31, | December 31, | December 31, | |||||||||||||||||||
A-Class | 2013a,b | 2012 | 2011 | 2010 | 2009 | 2008 | ||||||||||||||||||
Per Share Data | ||||||||||||||||||||||||
Net asset value, beginning of period | $ | 33.77 | $ | 26.15 | $ | 27.31 | $ | 22.03 | $ | 15.10 | $ | 47.66 | ||||||||||||
Income (loss) from investment operations: | ||||||||||||||||||||||||
Net investment income (loss)c | (.06 | ) | (.15 | ) | (.18 | ) | (.11 | ) | (.03 | ) | .17 | |||||||||||||
Net gain (loss) on investments (realized and unrealized) | 7.19 | 7.77 | (.98 | ) | 5.39 | 6.98 | (32.65 | ) | ||||||||||||||||
Total from investment operations | 7.13 | 7.62 | (1.16 | ) | 5.28 | 6.95 | (32.48 | ) | ||||||||||||||||
Less distributions from: | ||||||||||||||||||||||||
Net investment income | — | — | — | — | (.02 | ) | (.08 | ) | ||||||||||||||||
Total distributions | — | — | — | — | (.02 | ) | (.08 | ) | ||||||||||||||||
Net asset value, end of period | $ | 40.90 | $ | 33.77 | $ | 26.15 | $ | 27.31 | $ | 22.03 | $ | 15.10 | ||||||||||||
Total Returnd | 21.11 | % | 29.14 | % | (4.21 | %) | 23.92 | % | 46.00 | % | (68.14 | %) | ||||||||||||
Ratios/Supplemental Data | ||||||||||||||||||||||||
Net assets, end of period (in thousands) | $ | 6,537 | $ | 5,092 | $ | 5,982 | $ | 11,445 | $ | 14,077 | $ | 16,149 | ||||||||||||
Ratios to average net assets: | ||||||||||||||||||||||||
Net investment income (loss) | (0.59 | %) | (0.49 | %) | (0.66 | %) | (0.47 | %) | (0.25 | %) | 0.58 | % | ||||||||||||
Total expenses | 1.77 | % | 1.76 | % | 1.89 | % | 1.78 | % | 1.81 | % | 1.73 | % | ||||||||||||
Portfolio turnover rate | — | e | 548 | % | 311 | % | 145 | % | 187 | % | 92 | % |
Period Ended | Year Ended | Year Ended | Year Ended | Year Ended | Year Ended | |||||||||||||||||||
March 28, | December 31, | December 31, | December 31, | December 31, | December 31, | |||||||||||||||||||
C-Class | 2013a,b | 2012 | 2011 | 2010 | 2009 | 2008 | ||||||||||||||||||
Per Share Data | ||||||||||||||||||||||||
Net asset value, beginning of period | $ | 30.71 | $ | 23.94 | $ | 25.16 | $ | 20.44 | $ | 14.13 | $ | 44.94 | ||||||||||||
Income (loss) from investment operations: | ||||||||||||||||||||||||
Net investment lossc | (.11 | ) | (.36 | ) | (.35 | ) | (.25 | ) | (.14 | ) | (.05 | ) | ||||||||||||
Net gain (loss) on investments (realized and unrealized) | 6.52 | 7.13 | (.87 | ) | 4.97 | 6.47 | (30.68 | ) | ||||||||||||||||
Total from investment operations | 6.41 | 6.77 | (1.22 | ) | 4.72 | 6.33 | (30.73 | ) | ||||||||||||||||
Less distributions from: | ||||||||||||||||||||||||
Net investment income | — | — | — | — | (.02 | ) | (.08 | ) | ||||||||||||||||
Total distributions | — | — | — | — | (.02 | ) | (.08 | ) | ||||||||||||||||
Net asset value, end of period | $ | 37.12 | $ | 30.71 | $ | 23.94 | $ | 25.16 | $ | 20.44 | $ | 14.13 | ||||||||||||
Total Returnd | 20.87 | % | 28.28 | % | (4.81 | %) | 23.04 | % | 44.77 | % | (68.37 | %) | ||||||||||||
Ratios/Supplemental Data | ||||||||||||||||||||||||
Net assets, end of period (in thousands) | $ | 10,667 | $ | 8,543 | $ | 10,876 | $ | 16,801 | $ | 21,325 | $ | 32,159 | ||||||||||||
Ratios to average net assets: | ||||||||||||||||||||||||
Net investment loss | (1.34 | %) | (1.25 | %) | (1.39 | %) | (1.21 | %) | (0.99 | %) | (0.16 | %) | ||||||||||||
Total expenses | 2.51 | % | 2.51 | % | 2.64 | % | 2.53 | % | 2.57 | % | 2.48 | % | ||||||||||||
Portfolio turnover rate | — | e | 548 | % | 311 | % | 145 | % | 187 | % | 92 | % |
18 | the Rydex FUNDS annual report | See Notes to Financial Statements. |
S&P 500® 2x STRATEGY FUND |
FINANCIAL HIGHLIGHTS (concluded) |
This table is presented to show selected data for a share outstanding throughout each period and to assist shareholders in evaluating a Fund’s performance for the periods presented.
Period Ended | Year Ended | Year Ended | Year Ended | Year Ended | Year Ended | |||||||||||||||||||
March 28, | December 31, | December 31, | December 31, | December 31, | December 31, | |||||||||||||||||||
H-Class | 2013a,b | 2012 | 2011 | 2010 | 2009 | 2008 | ||||||||||||||||||
Per Share Data | ||||||||||||||||||||||||
Net asset value, beginning of period | $ | 33.76 | $ | 26.16 | $ | 27.31 | $ | 22.03 | $ | 15.10 | $ | 47.63 | ||||||||||||
Income (loss) from investment operations: | ||||||||||||||||||||||||
Net investment income (loss)c | (.06 | ) | (.18 | ) | (.21 | ) | (.14 | ) | (.07 | ) | .16 | |||||||||||||
Net gain (loss) on investments (realized and unrealized) | 7.18 | 7.78 | (.94 | ) | 5.42 | 7.02 | (32.61 | ) | ||||||||||||||||
Total from investment operations | 7.12 | 7.60 | (1.15 | ) | 5.28 | 6.95 | (32.45 | ) | ||||||||||||||||
Less distributions from: | ||||||||||||||||||||||||
Net investment income | — | — | — | — | (.02 | ) | (.08 | ) | ||||||||||||||||
Total distributions | — | — | — | — | (.02 | ) | (.08 | ) | ||||||||||||||||
Net asset value, end of period | $ | 40.88 | $ | 33.76 | $ | 26.16 | $ | 27.31 | $ | 22.03 | $ | 15.10 | ||||||||||||
Total Returnd | 21.12 | % | 29.05 | % | (4.21 | %) | 23.97 | % | 46.00 | % | (68.12 | %) | ||||||||||||
Ratios/Supplemental Data | ||||||||||||||||||||||||
Net assets, end of period (in thousands) | $ | 76,933 | $ | 64,617 | $ | 174,336 | $ | 138,289 | $ | 290,100 | $ | 110,656 | ||||||||||||
Ratios to average net assets: | ||||||||||||||||||||||||
Net investment income (loss) | (0.61 | %) | (0.58 | %) | (0.76 | %) | (0.61 | %) | (0.45 | %) | 0.53 | % | ||||||||||||
Total expenses | 1.76 | % | 1.76 | % | 1.89 | % | 1.78 | % | 1.81 | % | 1.73 | % | ||||||||||||
Portfolio turnover rate | — | e | 548 | % | 311 | % | 145 | % | 187 | % | 92 | % |
a | Percentage amounts for the period, except total return and portfolio turnover rate, have been annualized. |
b | The Fund changed its fiscal year end from December to March in 2013. |
c | Net investment income (loss) per share was computed using average shares outstanding throughout the period. |
d | Total return does not reflect the impact of any applicable sales charges and has not been annualized. |
e | Less than 1%. |
See Notes to Financial Statements. | the Rydex FUNDS annual report | 19 |
Performance Report and FUND PROFILE (Unaudited) | March 28, 2013 |
INVERSE S&P 500® 2x STRATEGY FUND
OBJECTIVE: Seeks to provide investment results that match, before fees and expenses, the performance of a specific benchmark on a daily basis. The Fund’s current benchmark is 200% of the inverse (opposite) of the performance of the S&P 500® Index (the “underlying index”). The Fund does not seek to achieve its investment objective over a period of time greater than one day.
For the one-year period ended March 28, 2013, Inverse S&P 500® 2x Strategy Fund maintained a daily correlation of over 99% to its benchmark of -200% of the daily price movement of the S&P 500 Index. Inverse S&P 500® 2x Strategy Fund H-Class returned -27.98%, while the S&P 500 Index gained 13.96% over the same period.
Sectors contributing most to performance of the underlying index were Health Care and Financials. The sector contributing least was Materials. Information Technology was the only sector that detracted from performance of the underlying index.
Johnson & Johnson, Pfizer, Inc. and AT&T, Inc. were the holdings contributing the most to performance of the underlying index for the period. Apple, Inc., Microsoft Corp. and Intel Corp. detracted the most from performance of the underlying index for the year.
Derivatives in the Fund were used to help provide exposure to the composition of the benchmark in the highest efficient manner and to provide leverage, not for hedging purposes. The results of derivatives use during the period were within our expectations and contributed to the Fund’s performance.
Due to the compounding of daily returns, leveraged and inverse funds’ returns over periods other than one day will likely differ in amount and possibly direction from the benchmark return for the same period. Investors should monitor their leveraged and inverse funds’ holdings to ensure that they are consistent with their strategies, as frequently as daily.
The effects of compounding may cause the longer-term correlation of the fund to its benchmark to diminish. The apparent discrepancy between the leveraged and unleveraged indices is the result of compounding, which is described briefly on page 4 of this report.
Performance displayed represents past performance, which is no guarantee of future results.
Holdings Diversification (Market Exposure as % of Net Assets)
"Holdings Diversification (Market Exposure as % of Net Assets)" excludes any temporary cash investments.
Inception Dates: | |
A-Class | September 1, 2004 |
C-Class | March 7, 2001 |
H-Class | May 19, 2000 |
The Fund invests principally in derivative investments such as swap agreements and futures contracts.
20 | the Rydex FUNDS annual report |
Performance Report and FUND PROFILE (Unaudited) (concluded) |
Cumulative Fund Performance*
Average Annual Returns*
Periods Ended 03/28/13 | ||||||||||||
1 Year | 5 Year | 10 Year | ||||||||||
C-Class Shares | -28.43 | % | -27.60 | % | -22.69 | % | ||||||
C-Class Shares with CDSC† | -29.15 | % | -27.60 | % | -22.69 | % | ||||||
H-Class Shares | -27.98 | % | -27.04 | % | -22.09 | % | ||||||
S&P 500 Index | 13.96 | % | 5.81 | % | 8.53 | % |
Since | ||||||||||||
Inception | ||||||||||||
1 Year | 5 Year | (09/01/04) | ||||||||||
A-Class Shares | -28.00 | % | -27.10 | % | -19.58 | % | ||||||
A-Class Shares with sales charge‡ | -31.45 | % | -27.81 | % | -20.03 | % | ||||||
S&P 500 Index | 13.96 | % | 5.81 | % | 6.36 | % |
* | The performance data above represents past performance that is not predictive of future results. The investment return and principal value of an investment in the Fund will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than their original cost. Returns are historical and include changes in principal and reinvested dividends and capital gains and do not reflect the effect of taxes. The S&P 500 Index is an unmanaged index and, unlike the Fund, has no management fees or operating expenses to reduce its reported return. The graphs are based on A-Class shares and H-Class shares only; performance for C-Class shares will vary due to differences in fee structure. |
† | Fund returns include a CDSC of 1% if redeemed within 12 months of purchase. |
‡ | Fund returns are calculated using the maximum sales charge of 4.75%. |
the Rydex FUNDS annual report | 21 |
SCHEDULE OF INVESTMENTS | March 28, 2013 |
INVERSE S&P 500® 2x STRATEGY FUND |
Face | ||||||||
Amount | Value | |||||||
FEDERAL AGENCY DISCOUNT NOTES†† - 31.1% | ||||||||
Freddie Mac1 | ||||||||
0.09% due 05/29/13 | $ | 10,000,000 | $ | 9,999,190 | ||||
0.11% due 08/02/13 | 10,000,000 | 9,997,610 | ||||||
Total Freddie Mac | 19,996,800 | |||||||
Total Federal Agency Discount Notes | ||||||||
(Cost $19,994,792) | 19,996,800 | |||||||
REPURCHASE AGREEMENT††,2 - 37.2% | ||||||||
Mizuho Financial Group, Inc. | ||||||||
issued 03/28/13 at 0.11% | ||||||||
due 04/01/13 | 23,920,170 | 23,920,170 | ||||||
Total Repurchase Agreement | ||||||||
(Cost $23,920,170) | 23,920,170 | |||||||
Total Investments - 68.3% | ||||||||
(Cost $43,914,962) | $ | 43,916,970 | ||||||
Other Assets & Liabilities, net - 31.7% | 20,430,206 | |||||||
Total Net Assets - 100.0% | $ | 64,347,176 |
Unrealized | ||||||||
Contracts | Loss | |||||||
EQUITY FUTURES CONTRACTS SOLD SHORT† | ||||||||
June 2013 S&P 500 Index Mini | �� | |||||||
Futures Contracts | ||||||||
(Aggregate Value of | ||||||||
Contracts $26,307,063) | 337 | $ | (10,915 | ) | ||||
Units | ||||||||
EQUITY INDEX SWAP AGREEMENTS SOLD SHORT†† | ||||||||
Goldman Sachs International | ||||||||
April 2013 S&P 500 Index Swap, | ||||||||
Terminating 04/29/133 | ||||||||
(Notional Value $20,149,184) | 12,840 | $ | (70,708 | ) | ||||
Barclays Bank plc | ||||||||
April 2013 S&P 500 Index Swap, | ||||||||
Terminating 04/30/133 | ||||||||
(Notional Value $29,467,578) | 18,779 | (118,721 | ) | |||||
Credit Suisse Capital, LLC | ||||||||
April 2013 S&P 500 Index Swap, | ||||||||
Terminating 04/30/133 | ||||||||
(Notional Value $52,216,554) | 33,276 | (212,024 | ) | |||||
(Total Notional Value | ||||||||
$101,833,316) | $ | (401,453 | ) |
† | Value determined based on Level 1 inputs — See Note 4. |
†† | Value determined based on Level 2 inputs — See Note 4. |
1 | On September 7, 2008, the issuer was placed in conservatorship by the Federal Housing Finance Agency (FHFA). As conservator, the FHFA has full powers to control the assets and operations of the firm. |
2 | Repurchase Agreement — See Note 5. |
3 | Total Return based on S&P 500 Index +/- financing at a variable rate. plc — Public Limited Company |
22 | the Rydex FUNDS annual report | See Notes to Financial Statements. |
INVERSE S&P 500® 2x STRATEGY FUND |
STATEMENT OF ASSETS |
AND LIABILITIES |
March 28, 2013
Assets: | ||||
Investments, at value | ||||
(cost $19,994,792) | $ | 19,996,800 | ||
Repurchase agreements, at value | ||||
(cost $23,920,170) | 23,920,170 | |||
Total investments | ||||
(cost $43,914,962) | 43,916,970 | |||
Segregated cash with broker | 18,517,470 | |||
Receivables: | ||||
Fund shares sold | 4,123,254 | |||
Variation margin | 1,131 | |||
Interest | 292 | |||
Total assets | 66,559,117 | |||
Liabilities: | ||||
Unrealized depreciation on swap agreements | 401,453 | |||
Payable for: | ||||
Fund shares redeemed | 1,582,690 | |||
Swap settlement | 65,444 | |||
Management fees | 54,943 | |||
Distribution and service fees | 17,513 | |||
Transfer agent and administrative fees | 15,262 | |||
Portfolio accounting fees | 9,158 | |||
Miscellaneous | 65,478 | |||
Total liabilities | 2,211,941 | |||
Net assets | $ | 64,347,176 | ||
Net assets consist of: | ||||
Paid in capital | $ | 469,627,199 | ||
Undistributed net investment income | — | |||
Accumulated net realized loss on investments | (404,869,663 | ) | ||
Net unrealized depreciation on investments | (410,360 | ) | ||
Net assets | $ | 64,347,176 | ||
A-Class: | ||||
Net assets | $ | 4,920,762 | ||
Capital shares outstanding | 687,885 | |||
Net asset value per share | $ | 7.15 | ||
Maximum offering price per share | ||||
(Net asset value divided by 95.25%) | $ | 7.51 | ||
C-Class: | ||||
Net assets | $ | 3,853,547 | ||
Capital shares outstanding | 590,800 | |||
Net asset value per share | $ | 6.52 | ||
H-Class: | ||||
Net assets | $ | 55,572,867 | ||
Capital shares outstanding | 7,739,929 | |||
Net asset value per share | $ | 7.18 |
STATEMENTS OF |
OPERATIONS |
Period | Year Ended | |||||||
January 1, 2013 to | December 31, | |||||||
March 28, 2013* | 2012 | |||||||
Investment Income: | ||||||||
Interest | $ | 15,070 | $ | 117,095 | ||||
Total investment income | 15,070 | 117,095 | ||||||
Expenses: | ||||||||
Management fees | 150,450 | 823,627 | ||||||
Transfer agent and administrative fees | 41,792 | 228,786 | ||||||
Distribution and service fees: | ||||||||
A-Class | 2,584 | 11,516 | ||||||
C-Class | 9,337 | 57,362 | ||||||
H-Class | 36,874 | 202,930 | ||||||
Professional fees | 28,754 | 24,004 | ||||||
Registration fees | 26,949 | 61,621 | ||||||
Portfolio accounting fees | 25,076 | 137,273 | ||||||
Custodian fees | 1,906 | 17,828 | ||||||
Trustees’ fees** | 1,980 | 11,391 | ||||||
Miscellaneous | (24,786 | ) | 79,802 | |||||
Total expenses | 300,916 | 1,656,140 | ||||||
Net investment loss | (285,846 | ) | (1,539,045 | ) | ||||
Net Realized and Unrealized Gain (Loss): | ||||||||
Net realized gain (loss) on: | ||||||||
Swap agreements | (11,633,856 | ) | (20,311,435 | ) | ||||
Futures contracts | (2,455,666 | ) | (11,504,725 | ) | ||||
Net realized loss | (14,089,522 | ) | (31,816,160 | ) | ||||
Net change in unrealized appreciation (depreciation) on: | ||||||||
Investments | (338 | ) | (10,608 | ) | ||||
Swap agreements | (168,735 | ) | (851,124 | ) | ||||
Futures contracts | 108,641 | (204,453 | ) | |||||
Net change in unrealized appreciation (depreciation) | (60,432 | ) | (1,066,185 | ) | ||||
Net realized and unrealized loss | (14,149,954 | ) | (32,882,345 | ) | ||||
Net decrease in net assets resulting from operations | $ | (14,435,800 | ) | $ | (34,421,390 | ) |
* | The Fund changed its fiscal year end from December to March in 2013. |
** | Relates to Trustees not deemed “interested persons” within the meaning of Section 2(a)(19) of the 1940 Act. |
See Notes to Financial Statements. | the Rydex FUNDS annual report | 23 |
INVERSE S&P 500® 2x STRATEGY FUND |
STATEMENTS OF CHANGES IN NET ASSETS |
Period | Year Ended | Year Ended | ||||||||||
January 1, 2013 to | December 31, | December 31, | ||||||||||
March 28, 2013* | 2012 | 2011 | ||||||||||
Increase (Decrease) In Net Assets From Operations: | ||||||||||||
Net investment loss | $ | (285,846 | ) | $ | (1,539,045 | ) | $ | (2,670,581 | ) | |||
Net realized loss on investments | (14,089,522 | ) | (31,816,160 | ) | (24,381,239 | ) | ||||||
Net change in unrealized appreciation (depreciation) on investments | (60,432 | ) | (1,066,185 | ) | 802,055 | |||||||
Net decrease in net assets resulting from operations | (14,435,800 | ) | (34,421,390 | ) | (26,249,765 | ) | ||||||
Capital share transactions: | ||||||||||||
Proceeds from sale of shares | ||||||||||||
A-Class | 3,331,122 | 9,359,726 | 22,039,520 | |||||||||
C-Class | 20,120,889 | 146,728,868 | 257,594,595 | |||||||||
H-Class | 320,703,351 | 2,510,982,585 | 3,760,764,762 | |||||||||
Cost of shares redeemed | ||||||||||||
A-Class | (2,772,336 | ) | (8,367,525 | ) | (20,788,219 | ) | ||||||
C-Class | (19,634,356 | ) | (147,079,728 | ) | (257,281,439 | ) | ||||||
H-Class | (304,513,349 | ) | (2,502,402,768 | ) | (3,794,996,116 | ) | ||||||
Net increase (decrease) from capital share transactions | 17,235,321 | 9,221,158 | (32,666,897 | ) | ||||||||
Net increase (decrease) in net assets | 2,799,521 | (25,200,232 | ) | (58,916,662 | ) | |||||||
Net assets: | ||||||||||||
Beginning of period | 61,547,655 | 86,747,887 | 145,664,549 | |||||||||
End of period | $ | 64,347,176 | $ | 61,547,655 | $ | 86,747,887 | ||||||
Undistributed (Accumulated) net investment income (loss) at end of period | $ | — | $ | (1 | ) | $ | — | |||||
Capital share activity: | ||||||||||||
Shares sold | ||||||||||||
A-Class | 441,576 | 959,922 | 1,500,170 | |||||||||
C-Class | 2,806,736 | 15,592,158 | 19,255,477 | |||||||||
H-Class | 40,940,187 | 243,346,167 | 254,860,943 | |||||||||
Shares redeemed | ||||||||||||
A-Class | (351,493 | ) | (843,922 | ) | (1,451,085 | ) | ||||||
C-Class | (2,733,744 | ) | (15,660,217 | ) | (19,256,137 | ) | ||||||
H-Class | (39,060,594 | ) | (243,259,912 | ) | (257,232,763 | ) | ||||||
Net increase (decrease) in shares | 2,042,668 | 134,196 | (2,323,395 | ) |
* | The Fund changed its fiscal year end from December to March in 2013. |
24 | the Rydex FUNDS annual report | See Notes to Financial Statements. |
INVERSE S&P 500® 2x STRATEGY FUND |
FINANCIAL HIGHLIGHTS |
This table is presented to show selected data for a share outstanding throughout each period and to assist shareholders in evaluating a Fund’s performance for the periods presented.
Period Ended | Year Ended | Year Ended | Year Ended | Year Ended | Year Ended | |||||||||||||||||||
March 28, | December 31, | December 31, | December 31, | December 31, | December 31, | |||||||||||||||||||
A-Class | 2013a,b | 2012 | 2011 | 2010 | 2009 | 2008 | ||||||||||||||||||
Per Share Data | ||||||||||||||||||||||||
Net asset value, beginning of period | $ | 8.86 | $ | 12.74 | $ | 15.95 | $ | 23.77 | $ | 48.14 | $ | 29.16 | ||||||||||||
Income (loss) from investment operations: | ||||||||||||||||||||||||
Net investment income (loss)c | (.03 | ) | (.16 | ) | (.27 | ) | (.34 | ) | (.61 | ) | .10 | |||||||||||||
Net gain (loss) on investments (realized and unrealized) | (1.68 | ) | (3.72 | ) | (2.94 | ) | (7.48 | ) | (23.74 | ) | 19.18 | |||||||||||||
Total from investment operations | (1.71 | ) | (3.88 | ) | (3.21 | ) | (7.82 | ) | (24.35 | ) | 19.28 | |||||||||||||
Less distributions from: | ||||||||||||||||||||||||
Net investment income | — | — | — | — | (.02 | ) | (.30 | ) | ||||||||||||||||
Total distributions | — | — | — | — | (.02 | ) | (.30 | ) | ||||||||||||||||
Net asset value, end of period | $ | 7.15 | $ | 8.86 | $ | 12.74 | $ | 15.95 | $ | 23.77 | $ | 48.14 | ||||||||||||
Total Returnd | (19.30 | %) | (30.46 | %) | (20.13 | %) | (32.90 | %) | (50.58 | %) | 66.10 | % | ||||||||||||
Ratios/Supplemental Data | ||||||||||||||||||||||||
Net assets, end of period (in thousands) | $ | 4,921 | $ | 5,295 | $ | 6,138 | $ | 6,902 | $ | 7,069 | $ | 14,897 | ||||||||||||
Ratios to average net assets: | ||||||||||||||||||||||||
Net investment income (loss) | (1.66 | %) | (1.62 | %) | (1.84 | %) | (1.60 | %) | (1.60 | %) | 0.27 | % | ||||||||||||
Total expenses | 1.75 | % | 1.75 | % | 1.93 | % | 1.79 | % | 1.80 | % | 1.74 | % | ||||||||||||
Portfolio turnover rate | — | — | — | — | — | — |
Period Ended | Year Ended | Year Ended | Year Ended | Year Ended | Year Ended | |||||||||||||||||||
March 28, | December 31, | December 31, | December 31, | December 31, | December 31, | |||||||||||||||||||
C-Class | 2013a,b | 2012 | 2011 | 2010 | 2009 | 2008 | ||||||||||||||||||
Per Share Data | ||||||||||||||||||||||||
Net asset value, beginning of period | $ | 8.09 | $ | 11.71 | $ | 14.75 | $ | 22.13 | $ | 45.16 | $ | 27.56 | ||||||||||||
Income (loss) from investment operations: | ||||||||||||||||||||||||
Net investment lossc | (.04 | ) | (.22 | ) | (.34 | ) | (.44 | ) | (.79 | ) | (.15 | ) | ||||||||||||
Net gain (loss) on investments (realized and unrealized) | (1.53 | ) | (3.40 | ) | (2.70 | ) | (6.94 | ) | (22.22 | ) | 18.05 | |||||||||||||
Total from investment operations | (1.57 | ) | (3.62 | ) | (3.04 | ) | (7.38 | ) | (23.01 | ) | 17.90 | |||||||||||||
Less distributions from: | ||||||||||||||||||||||||
Net investment income | — | — | — | — | (.02 | ) | (.30 | ) | ||||||||||||||||
Total distributions | — | — | — | — | (.02 | ) | (.30 | ) | ||||||||||||||||
Net asset value, end of period | $ | 6.52 | $ | 8.09 | $ | 11.71 | $ | 14.75 | $ | 22.13 | $ | 45.16 | ||||||||||||
Total Returnd | (19.41 | %) | (30.91 | %) | (20.61 | %) | (33.35 | %) | (50.95 | %) | 64.93 | % | ||||||||||||
Ratios/Supplemental Data | ||||||||||||||||||||||||
Net assets, end of period (in thousands) | $ | 3,854 | $ | 4,187 | $ | 6,860 | $ | 8,654 | $ | 14,720 | $ | 17,565 | ||||||||||||
Ratios to average net assets: | ||||||||||||||||||||||||
Net investment loss | (2.39 | %) | (2.37 | %) | (2.58 | %) | (2.35 | %) | (2.39 | %) | (0.42 | %) | ||||||||||||
Total expenses | 2.47 | % | 2.50 | % | 2.68 | % | 2.54 | % | 2.59 | % | 2.49 | % | ||||||||||||
Portfolio turnover rate | — | — | — | — | — | — |
See Notes to Financial Statements. | the Rydex FUNDS annual report | 25 |
INVERSE S&P 500® 2x STRATEGY FUND |
FINANCIAL HIGHLIGHTS (concluded) |
This table is presented to show selected data for a share outstanding throughout each period and to assist shareholders in evaluating a Fund’s performance for the periods presented.
Period Ended | Year Ended | Year Ended | Year Ended | Year Ended | Year Ended | |||||||||||||||||||
March 28, | December 31, | December 31, | December 31, | December 31, | December 31, | |||||||||||||||||||
H-Class | 2013a,b | 2012 | 2011 | 2010 | 2009 | 2008 | ||||||||||||||||||
Per Share Data | ||||||||||||||||||||||||
Net asset value, beginning of period | $ | 8.88 | $ | 12.77 | $ | 15.97 | $ | 23.79 | $ | 48.17 | $ | 29.16 | ||||||||||||
Income (loss) from investment operations: | ||||||||||||||||||||||||
Net investment income (loss)c | (.03 | ) | (.17 | ) | (.27 | ) | (.34 | ) | (.60 | ) | .11 | |||||||||||||
Net gain (loss) on investments (realized and unrealized) | (1.67 | ) | (3.72 | ) | (2.93 | ) | (7.48 | ) | (23.76 | ) | 19.20 | |||||||||||||
Total from investment operations | (1.70 | ) | (3.89 | ) | (3.20 | ) | (7.82 | ) | (24.36 | ) | 19.31 | |||||||||||||
Less distributions from: | ||||||||||||||||||||||||
Net investment income | — | — | — | — | (.02 | ) | (.30 | ) | ||||||||||||||||
Total distributions | — | — | — | — | (.02 | ) | (.30 | ) | ||||||||||||||||
Net asset value, end of period | $ | 7.18 | $ | 8.88 | $ | 12.77 | $ | 15.97 | $ | 23.79 | $ | 48.17 | ||||||||||||
Total Returnd | (19.14 | %) | (30.46 | %) | (20.04 | %) | (32.87 | %) | (50.57 | %) | 66.21 | % | ||||||||||||
Ratios/Supplemental Data | ||||||||||||||||||||||||
Net assets, end of period (in thousands) | $ | 55,573 | $ | 52,066 | $ | 73,750 | $ | 130,109 | $ | 122,431 | $ | 177,979 | ||||||||||||
Ratios to average net assets: | ||||||||||||||||||||||||
Net investment income (loss) | (1.67 | %) | (1.64 | %) | (1.83 | %) | (1.61 | %) | (1.62 | %) | 0.29 | % | ||||||||||||
Total expenses | 1.76 | % | 1.76 | % | 1.93 | % | 1.79 | % | 1.81 | % | 1.73 | % | ||||||||||||
Portfolio turnover rate | — | — | — | — | — | — |
a | Percentage amounts for the period, except total return and portfolio turnover rate, have been annualized. |
b | The Fund changed its fiscal year end from December to March in 2013. |
c | Net investment income (loss) per share was computed using average shares outstanding throughout the period. |
d | Total return does not reflect the impact of any applicable sales charges and has not been annualized. |
26 | the Rydex FUNDS annual report | See Notes to Financial Statements. |
This page intentionally left blank. |
the Rydex FUNDS annual report | 27 |
Performance Report and FUND PROFILE (Unaudited) | March 28, 2013 |
OBJECTIVE: Seeks to provide investment results that match, before fees and expenses, the performance of a specific benchmark on a daily basis. The Fund’s current benchmark is 200% of the performance of the NASDAQ-100® Index (the “underlying index”). The Fund does not seek to achieve its investment objective over a period of time greater than one day.
For the one-year period ended March 28, 2013, with the NASDAQ-100 Index up 3.72%, the NASDAQ-100® 2x Strategy Fund H-Class returned 2.68%. For the one-year period ending March 28, 2013, the Fund maintained a daily correlation of over 99% to its benchmark of 200% of the daily price movement of the NASDAQ-100 Index.
The Health Care sector contributed the most to performance of the underlying index, followed by the Consumer Discretionary sector. Information Technology, which accounted for most of the underlying index, was the largest detractor, followed by the Industrials sector.
Google, Inc., Gilead Sciences, Inc. and Amazon.com, Inc., were the holdings contributing most to performance of the underlying index for the year, while Apple, Inc., Intel Corp. and Microsoft Corp. detracted most from performance of the underlying index for the year.
Derivatives in the Fund were used to help provide exposure to the composition of the benchmark in the highest efficient manner and to provide leverage, not for hedging purposes. The results of derivatives use during the period were within our expectations and contributed to the Fund’s performance.
Due to the compounding of daily returns, leveraged and inverse funds’ returns over periods other than one day will likely differ in amount and possibly direction from the benchmark return for the same period. Investors should monitor their leveraged and inverse funds’ holdings to ensure that they are consistent with their strategies, as frequently as daily.
The effects of compounding may cause the longer-term correlation of the fund to its benchmark to diminish. The apparent discrepancy between the leveraged and unleveraged indices is the result of compounding, which is described briefly on page 4 of this report.
Performance displayed represents past performance, which is no guarantee of future results.
Holdings Diversification (Market Exposure as % of Net Assets)
"Holdings Diversification (Market Exposure as % of Net Assets)" excludes any temporary cash investments.
Inception Dates: | |
A-Class | September 1, 2004 |
C-Class | November 20, 2000 |
H-Class | May 24, 2000 |
Ten Largest Holdings (% of Total Net Assets) | ||||
Apple, Inc. | 10.7 | % | ||
Microsoft Corp. | 6.2 | % | ||
Google, Inc. — Class A | 5.5 | % | ||
Oracle Corp. | 3.9 | % | ||
Amazon.com, Inc. | 3.1 | % | ||
QUALCOMM, Inc. | 3.0 | % | ||
Cisco Systems, Inc. | 2.9 | % | ||
Intel Corp. | 2.8 | % | ||
Comcast Corp. — Class A | 2.3 | % | ||
Amgen, Inc. | 2.0 | % | ||
Top Ten Total | 42.4 | % |
“Ten Largest Holdings” exclude any temporary cash or derivative investments.
28 | THE RYDEX FUNDS ANNUAL REPORT |
Performance Report and FUND PROFILE (Unaudited) (concluded) |
Cumulative Fund Performance*
Average Annual Returns*
Periods Ended 03/28/13 | ||||||||||||
1 Year | 5 Year | 10 Year | ||||||||||
C-Class Shares | 1.91 | % | 10.36 | % | 12.57 | % | ||||||
C-Class Shares with CDSC† | 0.91 | % | 10.36 | % | 12.57 | % | ||||||
H-Class Shares | 2.68 | % | 11.24 | % | 13.45 | % | ||||||
NASDAQ-100 Index | 3.72 | % | 10.58 | % | 11.42 | % |
Since | ||||||||||||
Inception | ||||||||||||
1 Year | 5 Year | (09/01/04) | ||||||||||
A-Class Shares | 2.75 | % | 11.26 | % | 9.38 | % | ||||||
A-Class Shares with sales charge‡ | -2.13 | % | 10.19 | % | 8.76 | % | ||||||
NASDAQ-100 Index | 3.72 | % | 10.58 | % | 9.46 | % |
* | The performance data above represents past performance that is not predictive of future results. The investment return and principal value of an investment in the Fund will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than their original cost. Returns are historical and include changes in principal and reinvested dividends and capital gains and do not reflect the effect of taxes. The NASDAQ-100 Index is an unmanaged index and, unlike the Fund, has no management fees or operating expenses to reduce its reported return. The graphs are based on A-Class shares and H-Class shares only; performance for C-Class shares will vary due to differences in fee structure. |
† | Fund returns include a CDSC of 1% if redeemed within 12 months of purchase. |
‡ | Fund returns are calculated using the maximum sales charge of 4.75%. |
the Rydex FUNDS annual report | 29 |
SCHEDULE OF INVESTMENTS | March 28, 2013 |
NASDAQ-100® 2x STRATEGY FUND |
Shares | Value | |||||||
COMMON STOCKS† - 84.2% | ||||||||
Information Technology - 51.3% | ||||||||
Apple, Inc. | 79,166 | $ | 35,041,246 | |||||
Microsoft Corp. | 706,119 | 20,202,064 | ||||||
Google, Inc. — Class A* | 22,554 | 17,908,552 | ||||||
Oracle Corp. | 399,102 | 12,906,959 | ||||||
QUALCOMM, Inc. | 144,843 | 9,697,239 | ||||||
Cisco Systems, Inc. | 449,483 | 9,398,690 | ||||||
Intel Corp. | 416,955 | 9,110,468 | ||||||
eBay, Inc.* | 109,299 | 5,926,192 | ||||||
Facebook, Inc. — Class A* | 141,982 | 3,631,900 | ||||||
Texas Instruments, Inc. | 93,131 | 3,304,288 | ||||||
Automatic Data Processing, Inc. | 40,892 | 2,658,798 | ||||||
Yahoo!, Inc.* | 99,705 | 2,346,059 | ||||||
Dell, Inc. | 146,565 | 2,100,276 | ||||||
Baidu, Inc. ADR* | 23,147 | �� | 2,029,992 | |||||
Cognizant Technology Solutions | ||||||||
Corp. — Class A* | 25,449 | 1,949,648 | ||||||
Adobe Systems, Inc.* | 42,055 | 1,829,812 | ||||||
Intuit, Inc. | 24,964 | 1,638,887 | ||||||
Broadcom Corp. — Class A | 43,674 | 1,514,178 | ||||||
Symantec Corp.* | 58,098 | 1,433,859 | ||||||
Activision Blizzard, Inc. | 93,884 | 1,367,890 | ||||||
Applied Materials, Inc. | 101,160 | 1,363,637 | ||||||
Analog Devices, Inc. | 25,790 | 1,198,977 | ||||||
Citrix Systems, Inc.* | 15,713 | 1,133,850 | ||||||
SanDisk Corp.* | 20,386 | 1,121,230 | ||||||
Seagate Technology plc | 30,252 | 1,106,013 | ||||||
Paychex, Inc. | 30,665 | 1,075,422 | ||||||
NetApp, Inc.* | 30,383 | 1,037,883 | ||||||
Western Digital Corp. | 20,288 | 1,020,081 | ||||||
Fiserv, Inc.* | 11,252 | 988,263 | ||||||
CA, Inc. | 38,436 | 967,434 | ||||||
Altera Corp. | 26,960 | 956,271 | ||||||
Equinix, Inc.* | 4,117 | 890,548 | ||||||
Micron Technology, Inc.* | 86,140 | 859,677 | ||||||
Xilinx, Inc. | 22,046 | 841,496 | ||||||
Check Point Software Technologies Ltd.* | 17,263 | 811,188 | ||||||
Maxim Integrated Products, Inc. | 24,659 | 805,116 | ||||||
Autodesk, Inc.* | 18,849 | 777,333 | ||||||
Linear Technology Corp. | 19,601 | 752,090 | ||||||
Avago Technologies Ltd. | 20,758 | 745,627 | ||||||
KLA-Tencor Corp. | 14,003 | 738,518 | ||||||
NVIDIA Corp. | 52,672 | 675,255 | ||||||
Microchip Technology, Inc. | 16,471 | 605,474 | ||||||
F5 Networks, Inc.* | 6,627 | 590,333 | ||||||
BMC Software, Inc.* | 12,049 | 558,230 | ||||||
Nuance Communications, Inc.* | 26,659 | 537,979 | ||||||
Akamai Technologies, Inc.* | 14,967 | 528,185 | ||||||
Total Information Technology | 168,683,107 | |||||||
Consumer Discretionary - 14.7% | ||||||||
Amazon.com, Inc.* | 38,320 | 10,211,897 | ||||||
Comcast Corp. — Class A | 178,909 | 7,515,968 | ||||||
News Corp. — Class A | 128,704 | 3,928,046 | ||||||
Starbucks Corp. | 63,169 | 3,598,106 | ||||||
Priceline.com, Inc.* | 4,204 | 2,892,058 | ||||||
DIRECTV* | 48,308 | 2,734,716 | ||||||
Viacom, Inc. — Class B | 37,409 | 2,303,272 | ||||||
Sirius XM Radio, Inc. | 552,925 | 1,703,009 | ||||||
Mattel, Inc. | 29,041 | 1,271,705 | ||||||
Bed Bath & Beyond, Inc.* | 19,061 | 1,227,910 | ||||||
Ross Stores, Inc. | 18,748 | 1,136,504 | ||||||
Virgin Media, Inc. | 22,707 | 1,111,962 | ||||||
Wynn Resorts Ltd. | 8,501 | 1,063,985 | ||||||
Discovery Communications, | ||||||||
Inc. — Class A* | 12,233 | 963,226 | ||||||
O’Reilly Automotive, Inc.* | 9,385 | 962,432 | ||||||
Dollar Tree, Inc.* | 19,159 | 927,870 | ||||||
Liberty Interactive Corp. — Class A* | 43,235 | 924,364 | ||||||
Liberty Global, Inc. — Class A* | 11,918 | 874,781 | ||||||
Staples, Inc. | 56,810 | 762,958 | ||||||
Expedia, Inc. | 10,335 | 620,203 | ||||||
Garmin Ltd.1 | 16,492 | 544,896 | ||||||
Fossil, Inc.* | 5,009 | 483,869 | ||||||
Sears Holdings Corp.*,1 | 8,977 | 448,581 | ||||||
Total Consumer Discretionary | 48,212,318 | |||||||
Health Care - 11.1% | ||||||||
Amgen, Inc. | 63,088 | 6,467,151 | ||||||
Gilead Sciences, Inc.* | 128,337 | 6,279,529 | ||||||
Celgene Corp.* | 35,300 | 4,091,623 | ||||||
Express Scripts Holding Co.* | 68,996 | 3,977,619 | ||||||
Biogen Idec, Inc.* | 19,930 | 3,844,696 | ||||||
Intuitive Surgical, Inc.* | 3,383 | 1,661,696 | ||||||
Alexion Pharmaceuticals, Inc.* | 16,457 | 1,516,348 | ||||||
Regeneron Pharmaceuticals, Inc.* | 8,040 | 1,418,256 | ||||||
Cerner Corp.* | 14,526 | 1,376,339 | ||||||
Vertex Pharmaceuticals, Inc.* | 18,313 | 1,006,849 | ||||||
Mylan, Inc.* | 33,342 | 964,917 | ||||||
Perrigo Co. | 7,923 | 940,698 | ||||||
Life Technologies Corp.* | 14,370 | 928,733 | ||||||
Catamaran Corp.* | 17,317 | 918,321 | ||||||
Henry Schein, Inc.* | 7,377 | 682,741 | ||||||
DENTSPLY International, Inc. | 12,038 | 510,652 | ||||||
Total Health Care | 36,586,168 | |||||||
Consumer Staples - 4.0% | ||||||||
Mondelez International, Inc. — Class A | 149,906 | 4,588,622 | ||||||
Costco Wholesale Corp. | 36,725 | 3,896,890 | ||||||
Kraft Foods Group, Inc. | 49,950 | 2,573,924 | ||||||
Whole Foods Market, Inc. | 15,625 | 1,355,469 | ||||||
Monster Beverage Corp.* | 13,979 | 667,357 | ||||||
Total Consumer Staples | 13,082,262 | |||||||
Industrials - 1.8% | ||||||||
PACCAR, Inc. | 29,799 | 1,506,638 | ||||||
Fastenal Co. | 25,009 | 1,284,212 | ||||||
Verisk Analytics, Inc. — Class A* | 14,170 | 873,297 | ||||||
CH Robinson Worldwide, Inc. | 13,600 | 808,656 | ||||||
Stericycle, Inc.* | 7,252 | 770,017 | ||||||
Expeditors International of | ||||||||
Washington, Inc. | 17,408 | 621,640 | ||||||
Total Industrials | 5,864,460 |
30 | the Rydex FUNDS annual report | See Notes to Financial Statements. |
SCHEDULE OF INVESTMENTS (concluded) | March 28, 2013 |
NASDAQ-100® 2x STRATEGY FUND |
Shares | Value | |||||||
Telecommunication Services - 1.0% | ||||||||
Vodafone Group plc ADR | 83,019 | $ | 2,358,570 | |||||
SBA Communications Corp. — | ||||||||
Class A* | 10,704 | 770,902 | ||||||
Total Telecommunication Services | 3,129,472 | |||||||
Materials - 0.3% | ||||||||
Sigma-Aldrich Corp. | 10,149 | 788,374 | ||||||
Randgold Resources Ltd. ADR | 4,206 | 361,632 | ||||||
Total Materials | 1,150,006 | |||||||
Total Common Stocks | ||||||||
(Cost $218,627,383) | 276,707,793 | |||||||
Face | ||||||||
Amount | ||||||||
REPURCHASE AGREEMENTS††,2 - 9.8% | ||||||||
Mizuho Financial Group, Inc. | ||||||||
issued 03/28/13 at 0.11% | ||||||||
due 04/01/13 | $ | 21,948,140 | 21,948,140 | |||||
Credit Suisse Group | ||||||||
issued 03/28/13 at 0.10% | ||||||||
due 04/01/133 | 10,219,431 | 10,219,431 | ||||||
Total Repurchase Agreements | ||||||||
(Cost $32,167,571) | 32,167,571 | |||||||
SECURITIES LENDING COLLATERAL††,4 - 0.1% | ||||||||
Repurchase Agreements | ||||||||
RBS Securities, Inc. | ||||||||
issued 03/28/13 at 0.18% | ||||||||
due 04/01/13 | 268,333 | 268,333 | ||||||
HSBC Securities, Inc. | ||||||||
issued 03/28/13 at 0.17% | ||||||||
due 04/01/13 | 211,086 | 211,086 | ||||||
Total Securities Lending Collateral | ||||||||
(Cost $479,419) | 479,419 | |||||||
Total Investments - 94.1% | ||||||||
(Cost $251,274,373) | $ | 309,354,783 | ||||||
Other Assets & Liabilities, net - 5.9% | 19,276,534 | |||||||
Total Net Assets - 100.0% | $ | 328,631,317 |
Unrealized | ||||||||
Contracts | Gain | |||||||
EQUITY FUTURES CONTRACTS PURCHASED† | ||||||||
June 2013 NASDAQ-100 Index Mini | ||||||||
Futures Contracts | ||||||||
(Aggregate Value of | ||||||||
Contracts $99,630,700) | 1,772 | $ | 713,848 | |||||
Units | ||||||||
EQUITY INDEX SWAP AGREEMENTS†† | ||||||||
Barclays Bank plc | ||||||||
April 2013 NASDAQ-100 Index Swap, | ||||||||
Terminating 04/30/135 | ||||||||
(Notional Value $150,163,799) | 53,274 | $ | 456,283 | |||||
Goldman Sachs International | ||||||||
April 2013 NASDAQ-100 Index Swap, | ||||||||
Terminating 04/29/135 | ||||||||
(Notional Value $76,707,817) | 27,214 | 332,852 | ||||||
Credit Suisse Capital, LLC | ||||||||
April 2013 NASDAQ-100 Index Swap, | ||||||||
Terminating 04/30/135 | ||||||||
(Notional Value $54,034,942) | 19,170 | 167,715 | ||||||
(Total Notional Value | ||||||||
$280,906,558) | $ | 956,850 |
* | Non-income producing security. |
† | Value determined based on Level 1 inputs — See Note 4. |
†† | Value determined based on Level 2 inputs — See Note 4. |
1 | All or portion of this security is on loan at March 28, 2013 — See Note 10. |
2 | Repurchase Agreements — See Note 5. |
3 | All or a portion of this security is pledged as equity index swap collateral at March 28, 2013. |
4 | Securities lending collateral — See Note 10. |
5 | Total Return based on NASDAQ-100 Index +/- financing at a variable rate. |
ADR — American Depositary Receipt
plc — Public Limited Company
See Notes to Financial Statements. | the Rydex FUNDS annual report | 31 |
NASDAQ-100® 2x STRATEGY FUND |
STATEMENT OF ASSETS |
AND LIABILITIES |
March 28, 2013 |
Assets: | ||||
Investments, at value - including $466,274 of securities loaned | ||||
(cost $218,627,383) | $ | 276,707,793 | ||
Repurchase agreements, at value | ||||
(cost $32,646,990) | 32,646,990 | |||
Total investments | ||||
(cost $251,274,373) | 309,354,783 | |||
Segregated cash with broker | 27,378,475 | |||
Unrealized appreciation on swap agreements | 956,850 | |||
Receivable for swap settlement | 46,351 | |||
Cash | 11,497 | |||
Receivables: | ||||
Fund shares sold | 4,305,533 | |||
Variation margin | 363,260 | |||
Dividends | 112,723 | |||
Interest | 917 | |||
Total assets | 342,530,389 | |||
Liabilities: | ||||
Payable for: | ||||
Fund shares redeemed | 12,815,097 | |||
Upon return of securities loaned | 479,419 | |||
Management fees | 209,993 | |||
Distribution and service fees | 65,499 | |||
Transfer agent and administrative fees | 58,331 | |||
Portfolio accounting fees | 34,999 | |||
Miscellaneous | 235,734 | |||
Total liabilities | 13,899,072 | |||
Net assets | $ | 328,631,317 | ||
Net assets consist of: | ||||
Paid in capital | $ | 346,896,159 | ||
Undistributed net investment income | 22,928 | |||
Accumulated net realized loss on investments | (78,038,878 | ) | ||
Net unrealized appreciation on investments | 59,751,108 | |||
Net assets | $ | 328,631,317 | ||
A-Class: | ||||
Net assets | $ | 6,409,300 | ||
Capital shares outstanding | 35,713 | |||
Net asset value per share | $ | 179.47 | ||
Maximum offering price per share | ||||
(Net asset value divided by 95.25%) | $ | 188.42 | ||
C-Class: | ||||
Net assets | $ | 11,522,244 | ||
Capital shares outstanding | 72,751 | |||
Net asset value per share | $ | 158.38 | ||
H-Class: | ||||
Net assets | $ | 310,699,773 | ||
Capital shares outstanding | 1,731,441 | |||
Net asset value per share | $ | 179.45 |
STATEMENTS OF |
OPERATIONS |
Period | Year Ended | |||||||
January 1, 2013 to | December 31, | |||||||
March 28, 2013* | 2012 | |||||||
Investment Income: | ||||||||
Dividends** | $ | 414,943 | $ | 2,430,580 | ||||
Interest | 6,546 | 54,846 | ||||||
Income from securities lending, net | 2,085 | 3,185 | ||||||
Total investment income | 423,574 | 2,488,611 | ||||||
Expenses: | ||||||||
Management fees | 443,239 | 2,159,912 | ||||||
Transfer agent and administrative fees | 123,122 | 599,975 | ||||||
Distribution and service fees: | ||||||||
A-Class | 3,731 | 14,644 | ||||||
C-Class | 28,789 | 145,085 | ||||||
H-Class | 112,194 | 549,061 | ||||||
Professional fees | 85,280 | 61,857 | ||||||
Portfolio accounting fees | 73,874 | 359,989 | ||||||
Registration fees | 69,659 | 113,356 | ||||||
Custodian fees | 5,680 | 48,251 | ||||||
Trustees’ fees† | 5,352 | 20,192 | ||||||
Miscellaneous | (41,390 | ) | 348,601 | |||||
Total expenses | 909,530 | 4,420,923 | ||||||
Net investment loss | (485,956 | ) | (1,932,312 | ) | ||||
Net Realized and Unrealized Gain (Loss): | ||||||||
Net realized gain (loss) on: | ||||||||
Investments | 5,897,844 | 18,899,364 | ||||||
Swap agreements | 12,039,981 | 26,622,145 | ||||||
Futures contracts | (598,576 | ) | 12,388,497 | |||||
Foreign currency | — | 54 | ||||||
Net realized gain | 17,339,249 | 57,910,060 | ||||||
Net change in unrealized appreciation (depreciation) on: | ||||||||
Investments | 1,563,533 | 3,420,100 | ||||||
Swap agreements | (1,528,735 | ) | 2,973,685 | |||||
Futures contracts | 397,869 | (324,427 | ) | |||||
Net change in unrealized appreciation (depreciation) | 432,667 | 6,069,358 | ||||||
Net realized and unrealized gain | 17,771,916 | 63,979,418 | ||||||
Net increase in net assets resulting from operations | $ | 17,285,960 | $ | 62,047,106 |
* | The Fund changed its fiscal year end from December to March in 2013. |
** | Net foreign witholding tax of $0 and $419 for the period January 1, 2013 to March 28, 2013 and year ended December 31, 2012, respectively. |
† | Relates to Trustees not deemed "interested persons" within the meaning of Section 2(a)(19) of the 1940 Act. |
32 | the Rydex FUNDS annual report | See Notes to Financial Statements. |
NASDAQ-100® 2x STRATEGY FUND |
STATEMENTS OF CHANGES IN NET ASSETS |
Period | Year Ended | Year Ended | ||||||||||
January 1, 2013 to | December 31, | December 31, | ||||||||||
March 28, 2013* | 2012 | 2011 | ||||||||||
Increase (Decrease) In Net Assets From Operations: | ||||||||||||
Net investment loss | $ | (485,956 | ) | $ | (1,932,312 | ) | $ | (2,753,994 | ) | |||
Net realized gain on investments | 17,339,249 | 57,910,060 | 2,232,991 | |||||||||
Net change in unrealized appreciation (depreciation) on investments | 432,667 | 6,069,358 | (24,536,197 | ) | ||||||||
Net increase (decrease) in net assets resulting from operations | 17,285,960 | 62,047,106 | (25,057,200 | ) | ||||||||
Capital share transactions: | ||||||||||||
Proceeds from sale of shares | ||||||||||||
A-Class | 1,426,639 | 6,880,015 | 7,758,964 | |||||||||
C-Class | 13,323,097 | 90,422,354 | 236,147,951 | |||||||||
H-Class | 894,394,581 | 3,488,001,370 | 3,162,891,812 | |||||||||
Cost of shares redeemed | ||||||||||||
A-Class | (1,552,159 | ) | (6,744,636 | ) | (11,013,699 | ) | ||||||
C-Class | (14,680,945 | ) | (100,102,558 | ) | (240,215,055 | ) | ||||||
H-Class | (731,066,587 | ) | (3,528,492,348 | ) | (3,257,167,447 | ) | ||||||
Net increase (decrease) from capital share transactions | 161,844,626 | (50,035,803 | ) | (101,597,474 | ) | |||||||
Net increase (decrease) in net assets | 179,130,586 | 12,011,303 | (126,654,674 | ) | ||||||||
Net assets: | ||||||||||||
Beginning of period | 149,500,731 | 137,489,428 | 264,144,102 | |||||||||
End of period | $ | 328,631,317 | $ | 149,500,731 | $ | 137,489,428 | ||||||
Undistributed net investment income at end of period | $ | 22,928 | $ | 22,928 | $ | — | ||||||
Capital share activity: | ||||||||||||
Shares sold | ||||||||||||
A-Class | 8,164 | 41,943 | 60,483 | |||||||||
C-Class | 87,674 | 646,589 | 2,084,346 | |||||||||
H-Class | 5,151,900 | 22,001,255 | 24,995,303 | |||||||||
Shares redeemed | ||||||||||||
A-Class | (8,975 | ) | (42,638 | ) | (88,547 | ) | ||||||
C-Class | (96,910 | ) | (713,685 | ) | (2,120,012 | ) | ||||||
H-Class | (4,242,524 | ) | (22,156,286 | ) | (25,971,202 | ) | ||||||
Net increase (decrease) in shares | 899,329 | (222,822 | ) | (1,039,629 | ) |
* The Fund changed its fiscal year end from December to March in 2013.
See Notes to Financial Statements. | the Rydex FUNDS annual report | 33 |
NASDAQ-100® 2x STRATEGY FUND |
FINANCIAL HIGHLIGHTS |
This table is presented to show selected data for a share outstanding throughout each period and to assist shareholders in evaluating a Fund’s performance for the periods presented.
Period Ended | Year Ended | Year Ended | Year Ended | Year Ended | Year Ended | |||||||||||||||||||
March 28, | December 31, | December 31, | December 31, | December 31, | December 31, | |||||||||||||||||||
A-Class | 2013a,b | 2012 | 2011 | 2010 | 2009c | 2008c | ||||||||||||||||||
Per Share Data | ||||||||||||||||||||||||
Net asset value, beginning of period | $ | 160.58 | $ | 119.78 | $ | 120.86 | $ | 88.62 | $ | 40.54 | $ | 148.85 | ||||||||||||
Income (loss) from investment operations: | ||||||||||||||||||||||||
Net investment lossd | (.36 | ) | (1.06 | ) | (1.62 | ) | (1.08 | ) | (.73 | ) | (.90 | ) | ||||||||||||
Net gain (loss) on investments (realized and unrealized) | 19.25 | 41.86 | .54 | 33.32 | 48.81 | (107.41 | ) | |||||||||||||||||
Total from investment operations | 18.89 | 40.80 | (1.08 | ) | 32.24 | 48.08 | (108.31 | ) | ||||||||||||||||
Net asset value, end of period | $ | 179.47 | $ | 160.58 | $ | 119.78 | $ | 120.86 | $ | 88.62 | $ | 40.54 | ||||||||||||
Total Returne | 11.76 | % | 34.07 | % | (0.89 | %) | 36.37 | % | 118.60 | % | (72.76 | %) | ||||||||||||
Ratios/Supplemental Data | ||||||||||||||||||||||||
Net assets, end of period (in thousands) | $ | 6,409 | $ | 5,865 | $ | 4,458 | $ | 7,890 | $ | 10,134 | $ | 5,835 | ||||||||||||
Ratios to average net assets: | ||||||||||||||||||||||||
Net investment loss | (0.84 | %) | (0.66 | %) | (1.27 | %) | (1.15 | %) | (1.25 | %) | (0.90 | %) | ||||||||||||
Total expenses | 1.79 | % | 1.78 | % | 1.92 | % | 1.82 | % | 1.85 | % | 1.76 | % | ||||||||||||
Portfolio turnover rate | 71 | % | 307 | % | 164 | % | 121 | % | 78 | % | 50 | % |
Period Ended | Year Ended | Year Ended | Year Ended | Year Ended | Year Ended | |||||||||||||||||||
March 28, | December 31, | December 31, | December 31, | December 31, | December 31, | |||||||||||||||||||
C-Class | 2013a,b | 2012 | 2011 | 2010 | 2009c | 2008c | ||||||||||||||||||
Per Share Data | ||||||||||||||||||||||||
Net asset value, beginning of period | $ | 141.97 | $ | 106.78 | $ | 108.57 | $ | 80.21 | $ | 37.03 | $ | 137.05 | ||||||||||||
Income (loss) from investment operations: | ||||||||||||||||||||||||
Net investment lossd | (.59 | ) | (2.08 | ) | (2.30 | ) | (1.60 | ) | (1.07 | ) | (1.45 | ) | ||||||||||||
Net gain (loss) on investments (realized and unrealized) | 17.00 | 37.27 | .51 | 29.96 | 44.25 | (98.57 | ) | |||||||||||||||||
Total from investment operations | 16.41 | 35.19 | (1.79 | ) | 28.36 | 43.18 | (100.02 | ) | ||||||||||||||||
Net asset value, end of period | $ | 158.38 | $ | 141.97 | $ | 106.78 | $ | 108.57 | $ | 80.21 | $ | 37.03 | ||||||||||||
Total Returne | 11.57 | % | 32.96 | % | (1.64 | %) | 35.33 | % | 116.61 | % | (72.97 | %) | ||||||||||||
Ratios/Supplemental Data | ||||||||||||||||||||||||
Net assets, end of period (in thousands) | $ | 11,522 | $ | 11,640 | $ | 15,920 | $ | 20,058 | $ | 19,475 | $ | 13,791 | ||||||||||||
Ratios to average net assets: | ||||||||||||||||||||||||
Net investment loss | (1.58 | %) | (1.49 | %) | (2.03 | %) | (1.88 | %) | (2.02 | %) | (1.67 | %) | ||||||||||||
Total expenses | 2.54 | % | 2.55 | % | 2.68 | % | 2.57 | % | 2.60 | % | 2.52 | % | ||||||||||||
Portfolio turnover rate | 71 | % | 307 | % | 164 | % | 121 | % | 78 | % | 50 | % |
34 | the Rydex FUNDS annual report | See Notes to Financial Statements. |
NASDAQ-100® 2x STRATEGY FUND |
FINANCIAL HIGHLIGHTS (concluded) |
This table is presented to show selected data for a share outstanding throughout each period and to assist shareholders in evaluating a Fund’s performance for the periods presented.
Period Ended | Year Ended | Year Ended | Year Ended | Year Ended | Year Ended | |||||||||||||||||||
March 28, | December 31, | December 31, | December 31, | December 31, | December 31, | |||||||||||||||||||
H-Class | 2013a,b | 2012 | 2011 | 2010 | 2009c | 2008c | ||||||||||||||||||
Per Share Data | ||||||||||||||||||||||||
Net asset value, beginning of period | $ | 160.57 | $ | 119.86 | $ | 120.94 | $ | 88.62 | $ | 40.54 | $ | 148.85 | ||||||||||||
Income (loss) from investment operations: | ||||||||||||||||||||||||
Net investment lossd | (.41 | ) | (1.24 | ) | (1.59 | ) | (1.07 | ) | (.74 | ) | (.80 | ) | ||||||||||||
Net gain (loss) on investments (realized and unrealized) | 19.29 | 41.95 | .51 | 33.39 | 48.82 | (107.51 | ) | |||||||||||||||||
Total from investment operations | 18.88 | 40.71 | (1.08 | ) | 32.32 | 48.08 | (108.31 | ) | ||||||||||||||||
Net asset value, end of period | $ | 179.45 | $ | 160.57 | $ | 119.86 | $ | 120.94 | $ | 88.62 | $ | 40.54 | ||||||||||||
Total Returne | 11.77 | % | 33.98 | % | (0.90 | %) | 36.46 | % | 118.60 | % | (72.76 | %) | ||||||||||||
Ratios/Supplemental Data | ||||||||||||||||||||||||
Net assets, end of period (in thousands) | $ | 310,700 | $ | 131,996 | $ | 117,112 | $ | 236,196 | $ | 193,465 | $ | 118,414 | ||||||||||||
Ratios to average net assets: | ||||||||||||||||||||||||
Net investment loss | (0.95 | %) | (0.76 | %) | (1.24 | %) | (1.13 | %) | (1.29 | %) | (0.90 | %) | ||||||||||||
Total expenses | 1.80 | % | 1.80 | % | 1.92 | % | 1.82 | % | 1.84 | % | 1.77 | % | ||||||||||||
Portfolio turnover rate | 71 | % | 307 | % | 164 | % | 121 | % | 78 | % | 50 | % |
a | Percentage amounts for the period, except total return and portfolio turnover rate, have been annualized. |
b | The Fund changed its fiscal year end from December to March in 2013. |
c | Per share amounts for the year ended December 31, 2008 and the period January 1, 2009 through April 19, 2009 have been restated to reflect a 1:5 reverse share split effective April 20, 2009. |
d | Net investment income (loss) per share was computed using average shares outstanding throughout the period. |
e | Total return does not reflect the impact of any applicable sales charges and has not been annualized. |
See Notes to Financial Statements. | the Rydex FUNDS annual report | 35 |
Performance Report and FUND PROFILE (Unaudited) | March 28, 2013 |
INVERSE NASDAQ-100® 2x STRATEGY FUND
OBJECTIVE: Seeks to provide investment results that match, before fees and expenses, the performance of a specific benchmark on a daily basis. The Fund’s current benchmark is 200% the inverse (opposite) of the performance of the NASDAQ-100® Index (the “underlying index”). The Fund does not seek to achieve its investment objective over a period of time greater than one day.
For the one-year period ended March 28, 2013, with the NASDAQ-100 Index up 3.72%, the Inverse NASDAQ-100® 2x Strategy Fund H-Class returned -15.03%. For the one-year period ended March 28, 2013, Inverse NASDAQ-100® 2x Strategy Fund maintained a daily correlation of over 99% to its benchmark of -200% of the daily price movement of the NASDAQ-100 Index.
The Health Care sector contributed the most to performance of the underlying index, followed by the Consumer Discretionary sector. Information Technology, which accounted for most of the underlying index, was the largest detractor, followed by the Industrials sector.
Google, Inc., Gilead Sciences, Inc. and Amazon.com, Inc., were the holdings contributing most to performance of the underlying index for the year, while Apple, Inc., Intel Corp. and Microsoft Corp. detracted most from performance of the underlying index for the year.
Derivatives in the Fund were used to help provide exposure to the composition of the benchmark in the highest efficient manner and to provide leverage, not for hedging purposes. The results of derivatives use during the period were within our expectations and contributed to the Fund’s performance.
Due to the compounding of daily returns, leveraged and inverse funds’ returns over periods other than one day will likely differ in amount and possibly direction from the benchmark return for the same period. Investors should monitor their leveraged and inverse funds’ holdings to ensure that they are consistent with their strategies, as frequently as daily.
The effects of compounding may cause the longer-term correlation of the fund to its benchmark to diminish. The apparent discrepancy between the leveraged and unleveraged indices is the result of compounding, which is described briefly on page 4 of this report.
Performance displayed represents past performance, which is no guarantee of future results.
Holdings Diversification (Market Exposure as % of Net Assets)
“Holdings Diversification (Market Exposure as % of Net Assets)” excludes any temporary cash investments.
Inception Dates: | |
A-Class | September 1, 2004 |
C-Class | March 8, 2001 |
H-Class | May 23, 2000 |
The Fund invests principally in derivative investments such as swap agreements and futures contracts.
36 | the Rydex FUNDS annual report |
Performance Report and FUND PROFILE (Unaudited) (concluded)
Cumulative Fund Performance*
Average Annual Returns*
Periods Ended 03/28/13 | ||||||||||||
1 Year | 5 Year | 10 Year | ||||||||||
C-Class Shares | -15.98 | % | -34.39 | % | -28.86 | % | ||||||
C-Class Shares with CDSC† | -16.82 | % | -34.39 | % | -28.86 | % | ||||||
H-Class Shares | -15.03 | % | -33.86 | % | -28.30 | % | ||||||
NASDAQ-100 Index | 3.72 | % | 10.58 | % | 11.42 | % |
Since | ||||||||||||
Inception | ||||||||||||
1 Year | 5 Year | (09/01/04) | ||||||||||
A-Class Shares | -14.75 | % | -33.88 | % | -25.69 | % | ||||||
A-Class Shares with sales charge‡ | -18.83 | % | -34.52 | % | -26.11 | % | ||||||
NASDAQ-100 Index | 3.72 | % | 10.58 | % | 9.46 | % |
* | The performance data above represents past performance that is not predictive of future results. The investment return and principal value of an investment in the Fund will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than their original cost. Returns are historical and include changes in principal and reinvested dividends and capital gains and do not reflect the effect of taxes. The NASDAQ-100 Index is an unmanaged index and, unlike the Fund, has no management fees or operating expenses to reduce its reported return. The graphs are based on A-Class shares and H-Class shares only; performance for C-Class shares will vary due to differences in fee structure. |
† | Fund returns include a CDSC of 1% if redeemed within 12 months of purchase. |
‡ | Fund returns are calculated using the maximum sales charge of 4.75%. |
the Rydex FUNDS annual report | 37 |
SCHEDULE OF INVESTMENTS | March 28, 2013 |
INVERSE NASDAQ-100® 2x STRATEGY FUND |
Face | ||||||||
Amount | Value | |||||||
FEDERAL AGENCY DISCOUNT NOTES†† - 39.2% | ||||||||
Fannie Mae1 | ||||||||
0.09% due 05/23/13 | $ | 10,000,000 | $ | 9,999,280 | ||||
Freddie Mac1 | ||||||||
0.11% due 08/02/13 | 10,000,000 | 9,997,610 | ||||||
Total Federal Agency Discount Notes | ||||||||
(Cost $19,994,942) | 19,996,890 | |||||||
REPURCHASE AGREEMENT††,2 - 44.7% | ||||||||
Mizuho Financial Group, Inc. | ||||||||
issued 03/28/13 at 0.11% | ||||||||
due 04/01/13 | 22,767,451 | 22,767,451 | ||||||
Total Repurchase Agreement | ||||||||
(Cost $22,767,451) | 22,767,451 | |||||||
Total Investments - 83.9% | ||||||||
(Cost $42,762,393) | $ | 42,764,341 | ||||||
Other Assets & Liabilities, net - 16.1% | 8,191,714 | |||||||
Total Net Assets - 100.0% | $ | 50,956,055 |
Unrealized | ||||||||
Contracts | Loss | |||||||
EQUITY FUTURES CONTRACTS SOLD SHORT† | ||||||||
June 2013 NASDAQ-100 Index | ||||||||
Mini Futures Contracts | ||||||||
(Aggregate Value of | ||||||||
Contracts $393,575) | 7 | $ | (1,479 | ) | ||||
Units | ||||||||
EQUITY INDEX SWAP AGREEMENTS SOLD SHORT†† | ||||||||
Barclays Bank plc | ||||||||
April 2013 NASDAQ-100 Index Swap, | ||||||||
Terminating 04/30/133 | ||||||||
(Notional Value $2,506,598) | 889 | $ | (7,711 | ) | ||||
Goldman Sachs International | ||||||||
April 2013 NASDAQ-100 Index Swap, | ||||||||
Terminating 04/29/133 | ||||||||
(Notional Value $29,525,920) | 10,475 | (123,042 | ) | |||||
Credit Suisse Capital, LLC | ||||||||
April 2013 NASDAQ-100 Index Swap, | ||||||||
Terminating 04/30/133 | ||||||||
(Notional Value $68,716,932) | 24,379 | (213,285 | ) | |||||
(Total Notional Value | ||||||||
$100,749,450) | $ | (344,038 | ) |
† | Value determined based on Level 1 inputs — See Note 4. |
†† | Value determined based on Level 2 inputs — See Note 4. |
1 | On September 7, 2008, the issuer was placed in conservatorship by the Federal Housing Finance Agency (FHFA). As conservator, the FHFA has full powers to control the assets and operations of the firm. |
2 | Repurchase Agreement — See Note 5. |
3 | Total return based on NASDAQ-100 Index +/- financing at a variable rate. |
plc — Public Limited Company
38 | the Rydex FUNDS annual report | See Notes to Financial Statements. |
INVERSE NASDAQ-100® 2x STRATEGY FUND |
STATEMENT OF ASSETS |
AND LIABILITIES |
March 28, 2013 |
Assets: | ||||
Investments, at value | ||||
(cost $19,994,942) | $ | 19,996,890 | ||
Repurchase agreements, at value | ||||
(cost $22,767,451) | 22,767,451 | |||
Total investments | ||||
(cost $42,762,393) | 42,764,341 | |||
Segregated cash with broker | 20,286,688 | |||
Receivables: | ||||
Fund shares sold | 3,124,533 | |||
Interest | 278 | |||
Total assets | 66,175,840 | |||
Liabilities: | ||||
Unrealized depreciation on swap agreements | 344,038 | |||
Payable for: | ||||
Fund shares redeemed | 14,678,471 | |||
Swap settlement | 76,912 | |||
Management fees | 44,192 | |||
Distribution and service fees | 13,434 | |||
Transfer agent and administrative fees | 12,276 | |||
Portfolio accounting fees | 7,366 | |||
Variation margin | 1,435 | |||
Miscellaneous | 41,661 | |||
Total liabilities | 15,219,785 | |||
Net assets | $ | 50,956,055 | ||
Net assets consist of: | ||||
Paid in capital | $ | 453,402,877 | ||
Undistributed net investment income | — | |||
Accumulated net realized loss on investments | (402,103,253 | ) | ||
Net unrealized depreciation on investments | (343,569 | ) | ||
Net assets | $ | 50,956,055 | ||
A-Class: | ||||
Net assets | $ | 605,404 | ||
Capital shares outstanding | 77,627 | |||
Net asset value per share | $ | 7.80 | ||
Maximum offering price per share | ||||
(Net asset value divided by 95.25%) | $ | 8.19 | ||
C-Class: | ||||
Net assets | $ | 1,622,727 | ||
Capital shares outstanding | 228,709 | |||
Net asset value per share | $ | 7.10 | ||
H-Class: | ||||
Net assets | $ | 48,727,924 | ||
Capital shares outstanding | 6,246,479 | |||
Net asset value per share | $ | 7.80 |
STATEMENTS OF |
OPERATIONS |
Period | Year Ended | |||||||
January 1, 2013 to | December 31, | |||||||
March 28, 2013* | 2012 | |||||||
Investment Income: | ||||||||
Interest | $ | 8,911 | $ | 53,818 | ||||
Total investment income | 8,911 | 53,818 | ||||||
Expenses: | ||||||||
Management fees | 104,488 | 411,797 | ||||||
Transfer agent and administrative fees | 29,025 | 114,388 | ||||||
Distribution and service fees: | ||||||||
A-Class | 363 | 1,842 | ||||||
C-Class | 4,774 | 21,613 | ||||||
H-Class | 27,469 | 107,144 | ||||||
Professional fees | 19,922 | 12,064 | ||||||
Portfolio accounting fees | 17,415 | 68,634 | ||||||
Registration fees | 12,724 | 26,694 | ||||||
Custodian fees | 1,326 | 8,748 | ||||||
Trustees’ fees** | 998 | 4,887 | ||||||
Miscellaneous | (5,890 | ) | 57,763 | |||||
Total expenses | 212,614 | 835,574 | ||||||
Net investment loss | (203,703 | ) | (781,756 | ) | ||||
Net Realized and Unrealized Gain (Loss): | ||||||||
Net realized gain (loss) on: | ||||||||
Swap agreements | (5,445,566 | ) | (13,548,358 | ) | ||||
Futures contracts | (1,315,974 | ) | (2,536,320 | ) | ||||
Net realized loss | (6,761,540 | ) | (16,084,678 | ) | ||||
Net change in unrealized appreciation (depreciation) on: | ||||||||
Investments | 1,948 | (3,585 | ) | |||||
Swap agreements | 506,887 | (1,208,830 | ) | |||||
Futures contracts | (209,466 | ) | 184,062 | |||||
Net change in unrealized appreciation (depreciation) | 299,369 | (1,028,353 | ) | |||||
Net realized and unrealized loss | (6,462,171 | ) | (17,113,031 | ) | ||||
Net decrease in net assets resulting from operations | $ | (6,665,874 | ) | $ | (17,894,787 | ) |
* The Fund changed its fiscal year end from December to March in 2013.
** Relates to Trustees not deemed “interested persons” within the meaning of Section 2(a)(19) of the 1940 Act.
See Notes to Financial Statements. | the Rydex FUNDS annual report | 39 |
INVERSE NASDAQ-100® 2x STRATEGY FUND |
STATEMENTS OF CHANGES IN NET ASSETS |
Period | Year Ended | Year Ended | ||||||||||
January 1, 2013 to | December 31, | December 31, | ||||||||||
March 28, 2013* | 2012 | 2011 | ||||||||||
Increase (Decrease) In Net Assets From Operations: | ||||||||||||
Net investment loss | $ | (203,703 | ) | $ | (781,756 | ) | $ | (1,094,996 | ) | |||
Net realized loss on investments | (6,761,540 | ) | (16,084,678 | ) | (16,038,254 | ) | ||||||
Net change in unrealized appreciation (depreciation) on investments | 299,369 | (1,028,353 | ) | (241,605 | ) | |||||||
Net decrease in net assets resulting from operations | (6,665,874 | ) | (17,894,787 | ) | (17,374,855 | ) | ||||||
Capital share transactions: | ||||||||||||
Proceeds from sale of shares | ||||||||||||
A-Class | 351,599 | 1,553,495 | 8,638,126 | |||||||||
C-Class | 14,381,043 | 65,942,270 | 168,430,185 | |||||||||
H-Class | 490,759,094 | 1,551,870,494 | 1,751,401,630 | |||||||||
Cost of shares redeemed | ||||||||||||
A-Class | (527,548 | ) | (2,566,663 | ) | (6,982,258 | ) | ||||||
C-Class | (14,606,858 | ) | (66,618,363 | ) | (166,791,204 | ) | ||||||
H-Class | (465,261,755 | ) | (1,549,877,084 | ) | (1,745,481,910 | ) | ||||||
Net increase from capital share transactions | 25,095,575 | 304,149 | 9,214,569 | |||||||||
Net increase (decrease) in net assets | 18,429,701 | (17,590,638 | ) | (8,160,286 | ) | |||||||
Net assets: | ||||||||||||
Beginning of period | 32,526,354 | 50,116,992 | 58,277,278 | |||||||||
End of period | $ | 50,956,055 | $ | 32,526,354 | $ | 50,116,992 | ||||||
Undistributed net investment income at end of period | $ | — | $ | — | $ | — | ||||||
Capital share activity: | ||||||||||||
Shares sold | ||||||||||||
A-Class | 42,550 | 163,487 | 553,832 | 1 | ||||||||
C-Class | 1,919,438 | 7,465,680 | 12,129,627 | 1 | ||||||||
H-Class | 59,787,702 | 159,758,767 | 114,422,071 | 1 | ||||||||
Shares redeemed | ||||||||||||
A-Class | (63,717 | ) | (236,421 | ) | (440,860 | )1 | ||||||
C-Class | (1,954,707 | ) | (7,525,055 | ) | (12,017,166 | )1 | ||||||
H-Class | (56,847,805 | ) | (159,641,659 | ) | (114,257,264 | )1 | ||||||
Net increase (decrease) in shares | 2,883,461 | (15,201 | ) | 390,240 |
* | The Fund changed its fiscal year end from December to March in 2013. |
1 | The share activity for the period January 1, 2011 through December 2, 2011 has been restated to reflect 1:4 reverse share split effective December 2, 2011. |
40 | the Rydex FUNDS annual report | See Notes to Financial Statements. |
INVERSE NASDAQ-100® 2x STRATEGY FUND |
FINANCIAL HIGHLIGHTS |
This table is presented to show selected data for a share outstanding throughout each period and to assist shareholders in evaluating a Fund’s performance for the periods presented.
Period Ended | Year Ended | Year Ended | Year Ended | Year Ended | Year Ended | |||||||||||||||||||
March 28, | December 31, | December 31, | December 31, | December 31, | December 31, | |||||||||||||||||||
A-Class | 2013a,b | 2012 | 2011c | 2010c | 2009c | 2008c | ||||||||||||||||||
Per Share Data | ||||||||||||||||||||||||
Net asset value, beginning of period | $ | 8.92 | $ | 13.66 | $ | 17.80 | $ | 29.28 | $ | 87.68 | $ | 47.12 | ||||||||||||
Income (loss) from investment operations: | ||||||||||||||||||||||||
Net investment income (loss)d | (.04 | ) | (.16 | ) | (.28 | ) | (.44 | ) | (.96 | ) | .12 | |||||||||||||
Net gain (loss) on investments (realized and unrealized) | (1.08 | ) | (4.58 | ) | (3.86 | ) | (11.04 | ) | (57.44 | ) | 40.88 | |||||||||||||
Total from investment operations | (1.12 | ) | (4.74 | ) | (4.14 | ) | (11.48 | ) | (58.40 | ) | 41.00 | |||||||||||||
Less distributions from: | ||||||||||||||||||||||||
Net investment income | — | — | — | — | — | (.44 | ) | |||||||||||||||||
Total distributions | — | — | — | — | — | (.44 | ) | |||||||||||||||||
Net asset value, end of period | $ | 7.80 | $ | 8.92 | $ | 13.66 | $ | 17.80 | $ | 29.28 | $ | 87.68 | ||||||||||||
Total Returne | (12.56 | %) | (34.70 | %) | (23.26 | %) | (39.21 | %) | (66.61 | %) | 87.03 | % | ||||||||||||
Ratios/Supplemental Data | ||||||||||||||||||||||||
Net assets, end of period (in thousands) | $ | 605 | $ | 881 | $ | 2,346 | $ | 1,045 | $ | 1,282 | $ | 3,847 | ||||||||||||
Ratios to average net assets: | ||||||||||||||||||||||||
Net investment income (loss) | (1.72 | %) | (1.67 | %) | (1.84 | %) | (1.66 | %) | (1.67 | %) | 0.21 | % | ||||||||||||
Total expenses | 1.80 | % | 1.78 | % | 1.92 | % | 1.82 | % | 1.83 | % | 1.76 | % | ||||||||||||
Portfolio turnover rate | — | — | — | — | — | — |
Period Ended | Year Ended | Year Ended | Year Ended | Year Ended | Year Ended | |||||||||||||||||||
March 28, | December 31, | December 31, | December 31, | December 31, | December 31, | |||||||||||||||||||
C-Class | 2013a,b | 2012 | 2011c | 2010c | 2009c | 2008c | ||||||||||||||||||
Per Share Data | ||||||||||||||||||||||||
Net asset value, beginning of period | $ | 8.13 | $ | 12.63 | $ | 16.52 | $ | 27.32 | $ | 82.48 | $ | 44.68 | ||||||||||||
Income (loss) from investment operations: | ||||||||||||||||||||||||
Net investment lossd | (.05 | ) | (.22 | ) | (.38 | ) | (.52 | ) | (1.12 | ) | (.24 | ) | ||||||||||||
Net gain (loss) on investments (realized and unrealized) | (.98 | ) | (4.28 | ) | (3.51 | ) | (10.28 | ) | (54.04 | ) | 38.48 | |||||||||||||
Total from investment operations | (1.03 | ) | (4.50 | ) | (3.89 | ) | (10.80 | ) | (55.16 | ) | 38.24 | |||||||||||||
Less distributions from: | ||||||||||||||||||||||||
Net investment income | — | — | — | — | — | (.44 | ) | |||||||||||||||||
Total distributions | — | — | — | — | — | (.44 | ) | |||||||||||||||||
Net asset value, end of period | $ | 7.10 | $ | 8.13 | $ | 12.63 | $ | 16.52 | $ | 27.32 | $ | 82.48 | ||||||||||||
Total Returne | (12.67 | %) | (35.63 | %) | (23.55 | %) | (39.53 | %) | (66.88 | %) | 85.61 | % | ||||||||||||
Ratios/Supplemental Data | ||||||||||||||||||||||||
Net assets, end of period (in thousands) | $ | 1,623 | $ | 2,146 | $ | 4,084 | $ | 3,485 | $ | 4,879 | $ | 8,532 | ||||||||||||
Ratios to average net assets: | ||||||||||||||||||||||||
Net investment loss | (2.38 | %) | (2.39 | %) | (2.67 | %) | (2.41 | %) | (2.39 | %) | (0.40 | %) | ||||||||||||
Total expenses | 2.45 | % | 2.50 | % | 2.68 | % | 2.57 | % | 2.59 | % | 2.51 | % | ||||||||||||
Portfolio turnover rate | — | — | — | — | — | — |
See Notes to Financial Statements. | the Rydex FUNDS annual report | 41 |
INVERSE NASDAQ-100® 2x STRATEGY FUND |
FINANCIAL HIGHLIGHTS (concluded) |
This table is presented to show selected data for a share outstanding throughout each period and to assist shareholders in evaluating a Fund’s performance for the periods presented.
Period Ended | Year Ended | Year Ended | Year Ended | Year Ended | Year Ended | |||||||||||||||||||
March 28, | December 31, | December 31, | December 31, | December 31, | December 31, | |||||||||||||||||||
H-Class | 2013a,b | 2012 | 2011c | 2010c | 2009c | 2008c | ||||||||||||||||||
Per Share Data | ||||||||||||||||||||||||
Net asset value, beginning of period | $ | 8.92 | $ | 13.70 | $ | 17.76 | $ | 29.24 | $ | 87.56 | $ | 47.08 | ||||||||||||
Income (loss) from investment operations: | ||||||||||||||||||||||||
Net investment income (loss)d | (.04 | ) | (.16 | ) | (.29 | ) | (.40 | ) | (.84 | ) | .20 | |||||||||||||
Net gain (loss) on investments (realized and unrealized) | (1.08 | ) | (4.62 | ) | (3.77 | ) | (11.08 | ) | (57.48 | ) | 40.72 | |||||||||||||
Total from investment operations | (1.12 | ) | (4.78 | ) | (4.06 | ) | (11.48 | ) | (58.32 | ) | 40.92 | |||||||||||||
Less distributions from: | ||||||||||||||||||||||||
Net investment income | — | — | — | — | — | (.44 | ) | |||||||||||||||||
Total distributions | — | — | — | — | — | (.44 | ) | |||||||||||||||||
Net asset value, end of period | $ | 7.80 | $ | 8.92 | $ | 13.70 | $ | 17.76 | $ | 29.24 | $ | 87.56 | ||||||||||||
Total Returne | (12.56 | %) | (34.84 | %) | (22.92 | %) | (39.26 | %) | (66.61 | %) | 86.93 | % | ||||||||||||
Ratios/Supplemental Data | ||||||||||||||||||||||||
Net assets, end of period (in thousands) | $ | 48,728 | $ | 29,499 | $ | 43,686 | $ | 53,747 | $ | 62,049 | $ | 110,965 | ||||||||||||
Ratios to average net assets: | ||||||||||||||||||||||||
Net investment income (loss) | (1.73 | %) | (1.67 | %) | (1.86 | %) | (1.66 | %) | (1.69 | %) | 0.35 | % | ||||||||||||
Total expenses | 1.81 | % | 1.79 | % | 1.93 | % | 1.82 | % | 1.84 | % | 1.76 | % | ||||||||||||
Portfolio turnover rate | — | — | — | — | — | — |
a | Percentage amounts for the period, except total return and portfolio turnover rate, have been annualized. |
b | The Fund changed its fiscal year end from December to March in 2013. |
c | Per share amounts for years ended December 31, 2008 – December 31, 2010 and the period January 1, 2011 through December 2, 2011 have been restated to reflect a 1:4 reverse share split effective December 2, 2011. |
d | Net investment income (loss) per share was computed using average shares outstanding throughout the period. |
e | Total return does not reflect the impact of any applicable sales charges and has not been annualized. |
42 | the Rydex FUNDS annual report | See Notes to Financial Statements. |
This page intentionally left blank. |
the Rydex FUNDS annual report | 43 |
Performance Report and FUND PROFILE (Unaudited) | March 28, 2013 |
DOW 2x STRATEGY FUND |
OBJECTIVE: Seeks to provide investment results that match, before fees and expenses, the performance of a specific benchmark on a daily basis. The Fund’s current benchmark is 200% of the performance of the Dow Jones Industrial AverageSM Index (the “underlying index”). The Fund does not seek to achieve its investment objective over a period of time greater than one day.
For the one-year period ended March 28, 2013, Dow 2x Strategy Fund maintained a daily correlation of over 99% to its benchmark of 200% of the daily price movement of the Dow Jones Industrial Average. Dow 2x Strategy Fund H-Class gained 23.32% while the Dow Jones Industrial Average rose 13.37% over the same period.
Financials and Consumer Staples provided the most performance to the underlying index during the period. Information Technology and Materials detracted most from performance of the underlying index for the period.
Travelers Cos., Inc., Home Depot, Inc. and 3M Co. were the largest contributors to performance of the underlying index for the period. Caterpillar, Inc., Intel Corp. and Microsoft Corp. were the largest detractors from performance of the underlying index for the period.
Derivatives in the Fund were used to help provide exposure to the composition of the benchmark in the highest efficient manner and to provide leverage, not for hedging purposes. The results of derivatives use during the period were within our expectations and contributed to the Fund’s performance.
Due to the compounding of daily returns, leveraged and inverse funds’ returns over periods other than one day will likely differ in amount and possibly direction from the benchmark return for the same period. Investors should monitor their leveraged and inverse funds’ holdings to ensure that they are consistent with their strategies, as frequently as daily.
The effects of compounding may cause the longer-term correlation of the fund to its benchmark to diminish. The apparent discrepancy between the leveraged and unleveraged indices is the result of compounding, which is described briefly on page 4 of this report.
Performance displayed represents past performance, which is no guarantee of future results.
Holdings Diversification (Market Exposure as % of Net Assets)
“Holdings Diversification (Market Exposure as % of Net Assets)” excludes any temporary cash investments.
Inception Dates: | |
A-Class | September 1, 2004 |
C-Class | February 20, 2004 |
H-Class | February 20, 2004 |
Ten Largest Holdings (% of Total Net Assets) | ||||
International Business Machines Corp. | 8.5 | % | ||
Chevron Corp. | 4.7 | % | ||
3M Co. | 4.2 | % | ||
McDonald’s Corp. | 4.0 | % | ||
United Technologies Corp. | 3.7 | % | ||
Exxon Mobil Corp. | 3.6 | % | ||
Caterpillar, Inc. | 3.5 | % | ||
Boeing Co. | 3.4 | % | ||
Travelers Companies, Inc. | 3.4 | % | ||
Johnson & Johnson | 3.3 | % | ||
Top Ten Total | 42.3 | % |
“Ten Largest Holdings” exclude any temporary cash or derivative investments.
44 | the Rydex FUNDS annual report |
Performance Report and FUND PROFILE (Unaudited) (concluded) |
Cumulative Fund Performance*
Average Annual Returns*
Periods Ended 03/28/13 | ||||||||||||
Since | ||||||||||||
Inception | ||||||||||||
1 Year | 5 Year | (09/01/04) | ||||||||||
A-Class Shares | 23.45 | % | 3.65 | % | 4.90 | % | ||||||
A-Class Shares with sales charge† | 17.58 | % | 2.64 | % | 4.31 | % | ||||||
Dow Jones Industrial Average Index | 13.37 | % | 6.50 | % | 7.04 | % | ||||||
(02/20/04) | ||||||||||||
C-Class Shares | 22.57 | % | 2.85 | % | 2.73 | % | ||||||
C-Class Shares with CDSC‡ | 21.57 | % | 2.85 | % | 2.73 | % | ||||||
H-Class Shares | 23.32 | % | 3.56 | % | 3.48 | % | ||||||
Dow Jones Industrial Average Index | 13.37 | % | 6.50 | % | 6.24 | % |
* | The performance data above represents past performance that is not predictive of future results. The investment return and principal value of an investment in the Fund will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than their original cost. Returns are historical and include changes in principal and reinvested dividends and capital gains and do not reflect the effect of taxes. The Dow Jones Industrial Average Index is an unmanaged index and, unlike the Fund, has no management fees or operating expenses to reduce its reported return. The graphs are based on A-Class shares and H-Class shares only; performance for C-Class shares will vary due to differences in fee structure. |
† | Fund returns are calculated using the maximum sales charge of 4.75%. |
‡ | Fund returns include a CDSC of 1% if redeemed within 12 months of purchase. |
the Rydex FUNDS annual report | 45 |
SCHEDULE OF INVESTMENTS | March 28, 2013 |
Dow 2x strategy FUND |
Shares | Value | |||||||
COMMON STOCKS† - 75.8% | ||||||||
Industrials - 15.8% | ||||||||
3M Co. | 22,310 | $ | 2,371,776 | |||||
United Technologies Corp. | 22,311 | 2,084,516 | ||||||
Caterpillar, Inc. | 22,310 | 1,940,301 | ||||||
Boeing Co. | 22,310 | 1,915,313 | ||||||
General Electric Co. | 22,310 | 515,807 | ||||||
Total Industrials | 8,827,713 | |||||||
Information Technology - 12.3% | ||||||||
International Business Machines Corp. | 22,312 | 4,759,151 | ||||||
Microsoft Corp. | 22,310 | 638,289 | ||||||
Hewlett-Packard Co. | 22,310 | 531,870 | ||||||
Intel Corp. | 22,311 | 487,495 | ||||||
Cisco Systems, Inc. | 22,310 | 466,502 | ||||||
Total Information Technology | 6,883,307 | |||||||
Consumer Discretionary - 9.0% | ||||||||
McDonald’s Corp. | 22,310 | 2,224,084 | ||||||
Home Depot, Inc. | 22,310 | 1,556,792 | ||||||
Walt Disney Co. | 22,310 | 1,267,208 | ||||||
Total Consumer Discretionary | 5,048,084 | |||||||
Health Care - 8.5% | ||||||||
Johnson & Johnson | 22,310 | 1,818,934 | ||||||
UnitedHealth Group, Inc. | 22,310 | 1,276,355 | ||||||
Merck & Company, Inc. | 22,310 | 986,771 | ||||||
Pfizer, Inc. | 22,310 | 643,867 | ||||||
Total Health Care | 4,725,927 | |||||||
Financials - 8.4% | ||||||||
Travelers Companies, Inc. | 22,305 | 1,877,858 | ||||||
American Express Co. | 22,312 | 1,505,168 | ||||||
JPMorgan Chase & Co. | 22,310 | 1,058,832 | ||||||
Bank of America Corp. | 22,310 | 271,736 | ||||||
Total Financials | 4,713,594 | |||||||
Energy - 8.4% | ||||||||
Chevron Corp. | 22,310 | 2,650,875 | ||||||
Exxon Mobil Corp. | 22,312 | 2,010,534 | ||||||
Total Energy | 4,661,409 | |||||||
Consumer Staples - 7.7% | ||||||||
Procter & Gamble Co. | 22,310 | 1,719,209 | ||||||
Wal-Mart Stores, Inc. | 22,310 | 1,669,457 | ||||||
Coca-Cola Co. | 22,307 | 902,095 | ||||||
Total Consumer Staples | 4,290,761 | |||||||
Telecommunication Services - 3.4% | ||||||||
Verizon Communications, Inc. | 22,310 | 1,096,536 | ||||||
AT&T, Inc. | 22,310 | 818,554 | ||||||
Total Telecommunication Services | 1,915,090 | |||||||
Materials - 2.3% | ||||||||
EI du Pont de Nemours & Co. | 22,310 | 1,096,760 | ||||||
Alcoa, Inc. | 22,306 | 190,047 | ||||||
Total Materials | 1,286,807 | |||||||
Total Common Stocks | ||||||||
(Cost $41,849,637) | 42,352,692 | |||||||
Face | ||||||||
Amount | ||||||||
REPURCHASE AGREEMENT††,1 - 7.3% | ||||||||
Mizuho Financial Group, Inc. | ||||||||
issued 03/28/13 at 0.11% | ||||||||
due 04/01/13 | $ | 4,093,596 | 4,093,596 | |||||
Total Repurchase Agreement | ||||||||
(Cost $4,093,596) | 4,093,596 | |||||||
Total Investments - 83.1% | ||||||||
(Cost $45,943,233) | $ | 46,446,288 | ||||||
Other Assets & Liabilities, net - 16.9% | 9,414,921 | |||||||
Total Net Assets - 100.0% | $ | 55,861,209 |
Unrealized | ||||||||
Contracts | Gain | |||||||
EQUITY FUTURES CONTRACTS PURCHASED† | ||||||||
June 2013 Dow Jones | ||||||||
Industrial Average Index Mini | ||||||||
Futures Contracts | ||||||||
(Aggregate Value of | ||||||||
Contracts $37,901,810) | 523 | $ | 50,736 | |||||
Units | ||||||||
EQUITY INDEX SWAP AGREEMENTS†† | ||||||||
Goldman Sachs International | ||||||||
April 2013 Dow Jones | ||||||||
Industrial Average Index Swap, | ||||||||
Terminating 04/29/132 | ||||||||
(Notional Value $22,584,328) | 1,549 | $ | 24,291 | |||||
Credit Suisse Capital, LLC | ||||||||
April 2013 Dow Jones | ||||||||
Industrial Average Index Swap, | ||||||||
Terminating 04/30/132 | ||||||||
(Notional Value $4,796,802) | 329 | 16,982 | ||||||
Barclays Bank plc | ||||||||
April 2013 Dow Jones | ||||||||
Industrial Average Index Swap, | ||||||||
Terminating 04/30/132 | ||||||||
(Notional Value $4,294,097) | 295 | 15,301 | ||||||
(Total Notional Value $31,675,227) | $ | 56,574 |
† | Value determined based on Level 1 inputs — See Note 4. |
†† | Value determined based on Level 2 inputs — See Note 4. |
1 | Repurchase Agreement — See Note 5. |
2 | Total Return based on Dow Jones Industrial Average Index +/- financing at a variable rate. |
plc — Public Limited Company
46 | the Rydex FUNDS annual report | See Notes to Financial Statements. |
Dow 2x strategy FUND |
STATEMENT OF ASSETS |
AND LIABILITIES |
March 28, 2013
Assets: | ||||
Investments, at value | ||||
(cost $41,849,637) | $ | 42,352,692 | ||
Repurchase agreements, at value | ||||
(cost $4,093,596) | 4,093,596 | |||
Total investments | ||||
(cost $45,943,233) | 46,446,288 | |||
Segregated cash with broker | 2,820,257 | |||
Unrealized appreciation on swap agreements | 56,574 | |||
Cash | 1,663 | |||
Receivables: | ||||
Fund shares sold | 27,776,827 | |||
Variation margin | 43,487 | |||
Dividends | 5,639 | |||
Interest | 50 | |||
Total assets | 77,150,785 | |||
Liabilities: | ||||
Payable for: | ||||
Securities purchased | 20,029,438 | |||
Fund shares redeemed | 1,187,594 | |||
Management fees | 24,971 | |||
Distribution and service fees | 9,174 | |||
Transfer agent and administrative fees | 6,937 | |||
Portfolio accounting fees | 4,162 | |||
Miscellaneous | 27,300 | |||
Total liabilities | 21,289,576 | |||
Net assets | $ | 55,861,209 | ||
Net assets consist of: | ||||
Paid in capital | $ | 71,694,199 | ||
Undistributed net investment income | — | |||
Accumulated net realized loss on investments | (16,443,355 | ) | ||
Net unrealized appreciation on investments | 610,365 | |||
Net assets | $ | 55,861,209 | ||
A-Class: | ||||
Net assets | $ | 4,754,969 | ||
Capital shares outstanding | 141,345 | |||
Net asset value per share | $ | 33.64 | ||
Maximum offering price per share | ||||
(Net asset value divided by 95.25%) | $ | 35.32 | ||
C-Class: | ||||
Net assets | $ | 3,622,918 | ||
Capital shares outstanding | 115,424 | |||
Net asset value per share | $ | 31.39 | ||
H-Class: | ||||
Net assets | $ | 47,483,322 | ||
Capital shares outstanding | 1,416,191 | |||
Net asset value per share | $ | 33.53 |
STATEMENTS OF |
OPERATIONS |
Period | Year Ended | |||||||
January 1, 2013 to | December 31, | |||||||
March 28, 2013* | 2012 | |||||||
Investment Income: | ||||||||
Dividends | $ | 66,068 | $ | 221,650 | ||||
Interest | 2,102 | 22,113 | ||||||
Total investment income | 68,170 | 243,763 | ||||||
Expenses: | ||||||||
Management fees | 64,313 | 296,005 | ||||||
Transfer agent and administrative fees | 17,865 | 82,224 | ||||||
Distribution and service fees: | ||||||||
A-Class | 2,561 | 11,162 | ||||||
C-Class | 7,266 | 26,805 | ||||||
H-Class | 13,488 | 64,362 | ||||||
Professional fees | 12,218 | 8,840 | ||||||
Portfolio accounting fees | 10,720 | 49,335 | ||||||
Registration fees | 9,377 | 17,067 | ||||||
Custodian fees | 824 | 6,672 | ||||||
Trustees’ fees** | 701 | 3,112 | ||||||
Miscellaneous | (6,037 | ) | 41,604 | |||||
Total expenses | 133,296 | 607,188 | ||||||
Net investment loss | (65,126 | ) | (363,425 | ) | ||||
Net Realized and Unrealized Gain (Loss): | ||||||||
Net realized gain (loss) on: | ||||||||
Investments | 1,230,479 | (1,886,557 | ) | |||||
Swap agreements | 3,263,051 | 2,176,372 | ||||||
Futures contracts | 743,235 | 1,680,643 | ||||||
Net realized gain | 5,236,765 | 1,970,458 | ||||||
Net change in unrealized appreciation (depreciation) on: | ||||||||
Investments | 202,574 | (1,141,903 | ) | |||||
Swap agreements | (62,690 | ) | 280,783 | |||||
Futures contracts | 61,025 | (342,711 | ) | |||||
Net change in unrealized appreciation (depreciation) | 200,909 | (1,203,831 | ) | |||||
Net realized and unrealized gain | 5,437,674 | 766,627 | ||||||
Net increase in net assets resulting from operations | $ | 5,372,548 | $ | 403,202 |
* The Fund changed its fiscal year end from December to March in 2013.
** Relates to Trustees not deemed “interested persons” within the meaning of Section 2(a)(19) of the 1940 Act.
See Notes to Financial Statements. | the Rydex FUNDS annual report | 47 |
Dow 2x strategy FUND |
STATEMENTS OF CHANGES IN NET ASSETS |
Period | Year Ended | Year Ended | ||||||||||
January 1, 2013 to | December 31, | December 31, | ||||||||||
March 28, 2013* | 2012 | 2011 | ||||||||||
Increase (Decrease) In Net Assets From Operations: | ||||||||||||
Net investment loss | $ | (65,126 | ) | $ | (363,425 | ) | $ | (177,928 | ) | |||
Net realized gain on investments | 5,236,765 | 1,970,458 | 11,731,701 | |||||||||
Net change in unrealized appreciation (depreciation) on investments | 200,909 | (1,203,831 | ) | (4,970,122 | ) | |||||||
Net increase in net assets resulting from operations | 5,372,548 | 403,202 | 6,583,651 | |||||||||
Distributions to shareholders from: | ||||||||||||
Net investment income | ||||||||||||
A-Class | — | — | (1,026 | ) | ||||||||
C-Class | — | — | (623 | ) | ||||||||
H-Class | — | — | (4,308 | ) | ||||||||
Total distributions to shareholders | — | — | (5,957 | ) | ||||||||
Capital share transactions: | ||||||||||||
Proceeds from sale of shares | ||||||||||||
A-Class | 959,564 | 3,490,424 | 7,194,909 | |||||||||
C-Class | 8,707,955 | 52,394,203 | 87,536,343 | |||||||||
H-Class | 252,043,087 | 1,355,221,856 | 1,303,115,130 | |||||||||
Distributions reinvested | ||||||||||||
A-Class | — | — | 911 | |||||||||
C-Class | — | — | 589 | |||||||||
H-Class | — | — | 4,133 | |||||||||
Cost of shares redeemed | ||||||||||||
A-Class | (642,968 | ) | (4,848,853 | ) | (7,027,933 | ) | ||||||
C-Class | (7,927,879 | ) | (53,010,685 | ) | (88,451,396 | ) | ||||||
H-Class | (225,625,326 | ) | (1,365,747,777 | ) | (1,322,782,149 | ) | ||||||
Net increase (decrease) from capital share transactions | 27,514,433 | (12,500,832 | ) | (20,409,463 | ) | |||||||
Net increase (decrease) in net assets | 32,886,981 | (12,097,630 | ) | (13,831,769 | ) | |||||||
Net assets: | ||||||||||||
Beginning of period | 22,974,228 | 35,071,858 | 48,903,627 | |||||||||
End of period | $ | 55,861,209 | $ | 22,974,228 | $ | 35,071,858 | ||||||
Undistributed net investment income at end of period | $ | — | $ | — | $ | — | ||||||
Capital share activity: | ||||||||||||
Shares sold | ||||||||||||
A-Class | 30,480 | 132,732 | 319,381 | |||||||||
C-Class | 290,559 | 2,147,731 | 4,084,106 | |||||||||
H-Class | 8,012,962 | 51,790,336 | 58,203,935 | |||||||||
Shares issued from reinvestment of distributions | ||||||||||||
A-Class | — | — | 42 | |||||||||
C-Class | — | — | 29 | |||||||||
H-Class | — | — | 190 | |||||||||
Shares redeemed | ||||||||||||
A-Class | (20,830 | ) | (184,099 | ) | (308,951 | ) | ||||||
C-Class | (263,809 | ) | (2,175,807 | ) | (4,134,969 | ) | ||||||
H-Class | (7,230,706 | ) | (52,370,871 | ) | (58,937,225 | ) | ||||||
Net increase (decrease) in shares | 818,656 | (659,978 | ) | (773,462 | ) |
* The Fund changed its fiscal year end from December to March in 2013.
48 | the Rydex FUNDS annual report | See Notes to Financial Statements. |
Dow 2x strategy FUND |
FINANCIAL HIGHLIGHTS |
This table is presented to show selected data for a share outstanding throughout each period and to assist shareholders in evaluating a Fund’s performance for the periods presented.
Period Ended | Year Ended | Year Ended | Year Ended | Year Ended | Year Ended | |||||||||||||||||||
March 28, | December 31, | December 31, | December 31, | December 31, | December 31, | |||||||||||||||||||
A-Class | 2013a,b | 2012 | 2011 | 2010 | 2009 | 2008 | ||||||||||||||||||
Per Share Data | ||||||||||||||||||||||||
Net asset value, beginning of period | $ | 27.14 | $ | 23.31 | $ | 21.48 | $ | 17.53 | $ | 12.68 | $ | 33.86 | ||||||||||||
Income (loss) from investment operations: | ||||||||||||||||||||||||
Net investment income (loss)c | (.06 | ) | (.29 | ) | (.14 | ) | — | d | .03 | .18 | ||||||||||||||
Net gain (loss) on investments (realized and unrealized) | 6.56 | 4.12 | 1.98 | 3.95 | 4.86 | (21.27 | ) | |||||||||||||||||
Total from investment operations | 6.50 | 3.83 | 1.84 | 3.95 | 4.89 | (21.09 | ) | |||||||||||||||||
Less distributions from: | ||||||||||||||||||||||||
Net investment income | — | — | (.01 | ) | — | (.02 | ) | (.08 | ) | |||||||||||||||
Return of capital | — | — | — | — | (.02 | ) | (.01 | ) | ||||||||||||||||
Total distributions | — | — | (.01 | ) | — | (.04 | ) | (.09 | ) | |||||||||||||||
Net asset value, end of period | $ | 33.64 | $ | 27.14 | $ | 23.31 | $ | 21.48 | $ | 17.53 | $ | 12.68 | ||||||||||||
Total Returne | 23.95 | % | 16.43 | % | 8.55 | % | 22.53 | % | 38.54 | % | (62.28 | %) | ||||||||||||
Ratios/Supplemental Data | ||||||||||||||||||||||||
Net assets, end of period (in thousands) | $ | 4,755 | $ | 3,574 | $ | 4,267 | $ | 3,708 | $ | 5,556 | $ | 7,563 | ||||||||||||
Ratios to average net assets: | ||||||||||||||||||||||||
Net investment income (loss) | (0.77 | %) | (1.12 | %) | (0.63 | %) | 0.02 | % | 0.26 | % | 0.80 | % | ||||||||||||
Total expenses | 1.77 | % | 1.78 | % | 1.92 | % | 1.81 | % | 1.83 | % | 1.74 | % | ||||||||||||
Portfolio turnover rate | 979 | % | 15,091 | % | 7,150 | % | 108 | % | 148 | % | 30 | % |
Period Ended | Year Ended | Year Ended | Year Ended | Year Ended | Year Ended | |||||||||||||||||||
March 28, | December 31, | December 31, | December 31, | December 31, | December 31, | |||||||||||||||||||
C-Class | 2013a,b | 2012 | 2011 | 2010 | 2009 | 2008 | ||||||||||||||||||
Per Share Data | ||||||||||||||||||||||||
Net asset value, beginning of period | $ | 25.37 | $ | 21.95 | $ | 20.41 | $ | 16.77 | $ | 12.22 | $ | 32.91 | ||||||||||||
Income (loss) from investment operations: | ||||||||||||||||||||||||
Net investment income (loss)c | (.11 | ) | (.46 | ) | (.30 | ) | (.14 | ) | (.06 | ) | .01 | |||||||||||||
Net gain (loss) on investments (realized and unrealized) | 6.13 | 3.88 | 1.85 | 3.78 | 4.65 | (20.61 | ) | |||||||||||||||||
Total from investment operations | 6.02 | 3.42 | 1.55 | 3.64 | 4.59 | (20.60 | ) | |||||||||||||||||
Less distributions from: | ||||||||||||||||||||||||
Net investment income | — | — | (.01 | ) | — | (.02 | ) | (.08 | ) | |||||||||||||||
Return of capital | — | — | — | — | (.02 | ) | (.01 | ) | ||||||||||||||||
Total distributions | — | — | (.01 | ) | — | (.04 | ) | (.09 | ) | |||||||||||||||
Net asset value, end of period | $ | 31.39 | $ | 25.37 | $ | 21.95 | $ | 20.41 | $ | 16.77 | $ | 12.22 | ||||||||||||
Total Returne | 23.73 | % | 15.63 | % | 7.58 | % | 21.65 | % | 37.53 | % | (62.59 | %) | ||||||||||||
Ratios/Supplemental Data | ||||||||||||||||||||||||
Net assets, end of period (in thousands) | $ | 3,623 | $ | 2,249 | $ | 2,562 | $ | 3,420 | $ | 4,652 | $ | 5,610 | ||||||||||||
Ratios to average net assets: | ||||||||||||||||||||||||
Net investment income (loss) | (1.57 | %) | (1.89 | %) | (1.40 | %) | (0.78 | %) | (0.48 | %) | 0.07 | % | ||||||||||||
Total expenses | 2.53 | % | 2.54 | % | 2.67 | % | 2.56 | % | 2.59 | % | 2.49 | % | ||||||||||||
Portfolio turnover rate | 979 | % | 15,091 | % | 7,150 | % | 108 | % | 148 | % | 30 | % |
See Notes to Financial Statements. | the Rydex FUNDS annual report | 49 |
Dow 2x strategy FUND |
FINANCIAL HIGHLIGHTS (concluded) |
This table is presented to show selected data for a share outstanding throughout each period and to assist shareholders in evaluating a Fund’s performance for the periods presented.
Period Ended | Year Ended | Year Ended | Year Ended | Year Ended | Year Ended | |||||||||||||||||||
March 28, | December 31, | December 31, | December 31, | December 31, | December 31, | |||||||||||||||||||
H-Class | 2013a,b | 2012 | 2011 | 2010 | 2009 | 2008 | ||||||||||||||||||
Per Share Data | ||||||||||||||||||||||||
Net asset value, beginning of period | $ | 27.05 | $ | 23.26 | $ | 21.45 | $ | 17.53 | $ | 12.69 | $ | 33.90 | ||||||||||||
Income (loss) from investment operations: | ||||||||||||||||||||||||
Net investment income (loss)c | (.06 | ) | (.27 | ) | (.10 | ) | (.02 | ) | .03 | .16 | ||||||||||||||
Net gain (loss) on investments (realized and unrealized) | 6.54 | 4.06 | 1.92 | 3.94 | 4.85 | (21.28 | ) | |||||||||||||||||
Total from investment operations | 6.48 | 3.79 | 1.82 | 3.92 | 4.88 | (21.12 | ) | |||||||||||||||||
Less distributions from: | ||||||||||||||||||||||||
Net investment income | — | — | (.01 | ) | — | (.02 | ) | (.08 | ) | |||||||||||||||
Return of capital | — | — | — | — | (.02 | ) | (.01 | ) | ||||||||||||||||
Total distributions | — | — | (.01 | ) | — | (.04 | ) | (.09 | ) | |||||||||||||||
Net asset value, end of period | $ | 33.53 | $ | 27.05 | $ | 23.26 | $ | 21.45 | $ | 17.53 | $ | 12.69 | ||||||||||||
Total Returne | 23.96 | % | 16.34 | % | 8.42 | % | 22.36 | % | 38.43 | % | (62.30 | %) | ||||||||||||
Ratios/Supplemental Data | ||||||||||||||||||||||||
Net assets, end of period (in thousands) | $ | 47,483 | $ | 17,151 | $ | 28,243 | $ | 41,776 | $ | 41,873 | $ | 32,737 | ||||||||||||
Ratios to average net assets: | ||||||||||||||||||||||||
Net investment income (loss) | (0.85 | %) | (1.02 | %) | (0.42 | %) | (0.11 | %) | 0.23 | % | 0.72 | % | ||||||||||||
Total expenses | 1.79 | % | 1.79 | % | 1.92 | % | 1.81 | % | 1.83 | % | 1.74 | % | ||||||||||||
Portfolio turnover rate | 979 | % | 15,091 | % | 7,150 | % | 108 | % | 148 | % | 30 | % |
a | Percentage amounts for the period, except total return and portfolio turnover rate, have been annualized. |
b | The Fund changed its fiscal year end from December to March in 2013. |
c | Net investment income (loss) per share was computed using average shares outstanding throughout the period. |
d | Net investment income is less than $0.01 per share. |
e | Total return does not reflect the impact of any applicable sales charges and has not been annualized. |
50 | the Rydex FUNDS annual report | See Notes to Financial Statements. |
This page intentionally left blank. |
the Rydex FUNDS annual report | 51 |
Performance Report and FUND PROFILE (Unaudited) | March 28, 2013 |
OBJECTIVE: Seeks to provide investment results that match, before fees and expenses, the performance of a specific benchmark on a daily basis. The Fund’s current benchmark is 200% of the inverse (opposite) of the performance of the Dow Jones Industrial AverageSM Index (the “underlying index”). The Fund does not seek to achieve its investment objective over a period of time greater than one day.
For the one-year period ended March 28, 2013, Inverse Dow 2x Strategy Fund maintained a daily correlation of over 99% to its benchmark of -200% of the daily price movement of the Dow Jones Industrial. Inverse Dow 2x Strategy Fund H-Class returned -26.56% while the Dow Jones Industrial Average rose 13.37% over the same period.
Financials and Consumer Staples provided the most performance to the underlying index during the period. Information Technology and Materials detracted most from performance of the underlying index for the period.
Travelers Cos., Inc., Home Depot, Inc. and 3M Co. were the largest contributors to performance of the underlying index for the period. Caterpillar, Inc., Intel Corp. and Microsoft Corp. were the largest detractors from performance of the underlying index for the period.
Derivatives in the Fund were used to help provide exposure to the composition of the benchmark in the highest efficient manner and to provide leverage, not for hedging purposes. The results of derivatives use during the period were within our expectations and contributed to the Fund’s performance.
Due to the compounding of daily returns, leveraged and inverse funds’ returns over periods other than one day will likely differ in amount and possibly direction from the benchmark return for the same period. Investors should monitor their leveraged and inverse funds’ holdings to ensure that they are consistent with their strategies, as frequently as daily.
The effects of compounding may cause the longer-term correlation of the fund to its benchmark to diminish. The apparent discrepancy between the leveraged and unleveraged indices is the result of compounding, which is described briefly on page 4 of this report.
Performance displayed represents past performance, which is no guarantee of future results.
Holdings Diversification (Market Exposure as % of Net Assets)
“Holdings Diversification (Market Exposure as % of Net Assets)” excludes any temporary cash investments.
Inception Dates: | |
A-Class | September 1, 2004 |
C-Class | February 20, 2004 |
H-Class | February 20, 2004 |
The Fund invests principally in derivative investments such as swap agreements and futures contracts.
52 | the Rydex FUNDS annual report |
Performance Report and FUND PROFILE (Unaudited) (concluded) |
Cumulative Fund Performance*
Average Annual Returns*
Periods Ended 03/28/13
Since | ||||||||||||
Inception | ||||||||||||
1 Year | 5 Year | (09/01/04) | ||||||||||
A-Class Shares | -26.53 | % | -25.59 | % | -19.08 | % | ||||||
A-Class Shares with sales charge† | -30.04 | % | -26.31 | % | -19.54 | % | ||||||
Dow Jones Industrial Average Index | 13.37 | % | 6.50 | % | 7.04 | % |
(02/20/04) | ||||||||||||
C-Class Shares | -27.13 | % | -26.19 | % | -18.36 | % | ||||||
C-Class Shares with CDSC‡ | -27.86 | % | -26.19 | % | -18.36 | % | ||||||
H-Class Shares | -26.56 | % | -25.61 | % | -17.73 | % | ||||||
Dow Jones Industrial Average Index | 13.37 | % | 6.50 | % | 6.24 | % |
* | The performance data above represents past performance that is not predictive of future results. The investment return and principal value of an investment in the Fund will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than their original cost. Returns are historical and include changes in principal and reinvested dividends and capital gains and do not reflect the effect of taxes. The Dow Jones Industrial Average Index is an unmanaged index and, unlike the Fund, has no management fees or operating expenses to reduce its reported return. The graphs are based on A-Class shares and H-Class shares only; performance for C-Class shares will vary due to differences in fee structure. |
† Fund returns are calculated using the maximum sales charge of 4.75%.
‡ Fund returns include a CDSC of 1% if redeemed within 12 months of purchase.
the Rydex FUNDS annual report | 53 |
SCHEDULE OF INVESTMENTS | March 28, 2013 |
INVERSE DOW 2x STRATEGY FUND |
Face | ||||||||
Amount | Value | |||||||
REPURCHASE AGREEMENT††,1 - 63.5% | ||||||||
Mizuho Financial Group, Inc. | ||||||||
issued 03/28/13 at 0.11% | ||||||||
due 04/01/13 | $ | 6,357,840 | $ | 6,357,840 | ||||
Total Repurchase Agreement | ||||||||
(Cost $6,357,840) | 6,357,840 | |||||||
Total Investments - 63.5% | ||||||||
(Cost $6,357,840) | $ | 6,357,840 | ||||||
Other Assets & Liabilities, net - 36.5% | 3,651,070 | |||||||
Total Net Assets - 100.0% | $ | 10,008,910 |
Unrealized | ||||||||
Contracts | Loss | |||||||
EQUITY FUTURES CONTRACTS SOLD SHORT† | ||||||||
June 2013 Dow Jones Industrial | ||||||||
Average Index Mini Futures | ||||||||
Contracts (Aggregate Value of | ||||||||
Contracts $1,014,580) | 14 | $ | (5,234 | ) | ||||
Units | ||||||||
EQUITY INDEX SWAP AGREEMENTS SOLD SHORT†† | ||||||||
Goldman Sachs International | ||||||||
April 2013 Dow Jones | ||||||||
Industrial Average Index Swap, | ||||||||
Terminating 04/29/132 | ||||||||
(Notional Value $8,247,150) | 566 | $ | (9,681 | ) | ||||
Credit Suisse Capital, LLC | ||||||||
April 2013 Dow Jones | ||||||||
Industrial Average Index Swap, | ||||||||
Terminating 04/30/132 | ||||||||
(Notional Value $5,316,297) | 365 | (18,821 | ) | |||||
Barclays Bank plc | ||||||||
April 2013 Dow Jones | ||||||||
Industrial Average Index Swap, | ||||||||
Terminating 04/30/132 | ||||||||
(Notional Value $5,406,804) | 371 | (19,351 | ) | |||||
(Total Notional Value | ||||||||
$18,970,251) | $ | (47,853 | ) |
† | Value determined based on Level 1 inputs — See Note 4. |
†† | Value determined based on Level 2 inputs — See Note 4. |
1 | Repurchase Agreement — See Note 5. |
2 | Total Return based on Dow Jones Industrial Average Index +/- financing at a variable rate. |
plc — Public Limited Company
54 | the Rydex FUNDS annual report | See Notes to Financial Statements. |
INVERSE DOW 2x STRATEGY FUND |
STATEMENT OF ASSETS |
AND LIABILITIES |
March 28, 2013 |
Assets: | ||||
Repurchase agreements, at value | ||||
(cost $6,357,840) | $ | 6,357,840 | ||
Segregated cash with broker | 3,362,088 | |||
Receivables: | ||||
Fund shares sold | 1,595,779 | |||
Interest | 77 | |||
Total assets | 11,315,784 | |||
Liabilities: | ||||
Unrealized depreciation on swap agreements | 47,853 | |||
Payable for: | ||||
Fund shares redeemed | 1,206,176 | |||
Management fees | 13,897 | |||
Distribution and service fees | 4,449 | |||
Variation margin | 4,047 | |||
Transfer agent and administrative fees | 3,860 | |||
Swap settlement | 2,791 | |||
Portfolio accounting fees | 2,316 | |||
Miscellaneous | 21,485 | |||
Total liabilities | 1,306,874 | |||
Net assets | $ | 10,008,910 | ||
Net assets consist of: | ||||
Paid in capital | $ | 71,880,026 | ||
Undistributed net investment income | — | |||
Accumulated net realized loss on investments | (61,818,029 | ) | ||
Net unrealized depreciation on investments | (53,087 | ) | ||
Net assets | $ | 10,008,910 | ||
A-Class: | ||||
Net assets | $ | 588,350 | ||
Capital shares outstanding | 74,312 | |||
Net asset value per share | $ | 7.92 | ||
Maximum offering price per share | ||||
(Net asset value divided by 95.25%) | $ | 8.31 | ||
C-Class: | ||||
Net assets | $ | 913,402 | ||
Capital shares outstanding | 124,110 | |||
Net asset value per share | $ | 7.36 | ||
H-Class: | ||||
Net assets | $ | 8,507,158 | ||
Capital shares outstanding | 1,075,113 | |||
Net asset value per share | $ | 7.91 |
STATEMENTS OF |
OPERATIONS |
Period | Year Ended | |||||||
January 1, 2013 to | December 31, | |||||||
March 28, 2013* | 2012 | |||||||
Investment Income: | ||||||||
Interest | $ | 2,940 | $ | 27,474 | ||||
Total investment income | 2,940 | 27,474 | ||||||
Expenses: | ||||||||
Management fees | 34,115 | 213,374 | ||||||
Transfer agent and administrative fees | 9,477 | 59,271 | ||||||
Distribution and service fees: | ||||||||
A-Class | 428 | 3,015 | ||||||
C-Class | 2,198 | 10,598 | ||||||
H-Class | 8,500 | 53,607 | ||||||
Registration fees | 7,081 | 15,271 | ||||||
Professional fees | 6,488 | 6,099 | ||||||
Portfolio accounting fees | 5,686 | 35,563 | ||||||
Custodian fees | 433 | 4,751 | ||||||
Trustees’ fees** | 505 | 2,752 | ||||||
Miscellaneous | (5,439 | ) | 27,967 | |||||
Total expenses | 69,472 | 432,268 | ||||||
Net investment loss | (66,532 | ) | (404,794 | ) | ||||
Net Realized and Unrealized Gain (Loss): | ||||||||
Net realized gain (loss) on: | ||||||||
Swap agreements | (2,639,208 | ) | (3,760,689 | ) | ||||
Futures contracts | (442,055 | ) | (2,671,076 | ) | ||||
Net realized loss | (3,081,263 | ) | (6,431,765 | ) | ||||
Net change in unrealized appreciation (depreciation) on: | ||||||||
Swap agreements | 17,474 | (206,538 | ) | |||||
Futures contracts | (31,126 | ) | 21,437 | |||||
Net change in unrealized appreciation (depreciation) | (13,652 | ) | (185,101 | ) | ||||
Net realized and unrealized loss | (3,094,915 | ) | (6,616,866 | ) | ||||
Net decrease in net assets resulting from operations | $ | (3,161,447 | ) | $ | (7,021,660 | ) |
* The Fund changed its fiscal year end from December to March in 2013.
** Relates to Trustees not deemed “interested persons” within the meaning of Section 2(a)(19) of the 1940 Act.
See Notes to Financial Statements. | the Rydex FUNDS annual report | 55 |
INVERSE DOW 2x STRATEGY FUND |
STATEMENTS OF CHANGES IN NET ASSETS |
Period | Year Ended | Year Ended | ||||||||||
January 1, 2013 to | December 31, | December 31, | ||||||||||
March 28, 2013* | 2012 | 2011 | ||||||||||
Increase (Decrease) In Net Assets From Operations: | ||||||||||||
Net investment loss | $ | (66,532 | ) | $ | (404,794 | ) | $ | (648,627 | ) | |||
Net realized loss on investments | (3,081,263 | ) | (6,431,765 | ) | (1,893,932 | ) | ||||||
Net change in unrealized appreciation (depreciation) on investments | (13,652 | ) | (185,101 | ) | 243,098 | |||||||
Net decrease in net assets resulting from operations | (3,161,447 | ) | (7,021,660 | ) | (2,299,461 | ) | ||||||
Capital share transactions: | ||||||||||||
Proceeds from sale of shares | ||||||||||||
A-Class | 240,418 | 1,615,765 | 6,292,035 | |||||||||
C-Class | 5,777,378 | 32,149,401 | 50,643,163 | |||||||||
H-Class | 162,315,528 | 1,001,892,960 | 1,083,400,474 | |||||||||
Cost of shares redeemed | ||||||||||||
A-Class | (346,345 | ) | (2,456,712 | ) | (5,577,016 | ) | ||||||
C-Class | (5,450,440 | ) | (32,311,050 | ) | (50,265,078 | ) | ||||||
H-Class | (160,630,555 | ) | (996,641,886 | ) | (1,096,879,809 | ) | ||||||
Net increase (decrease) from capital share transactions | 1,905,984 | 4,248,478 | (12,386,231 | ) | ||||||||
Net decrease in net assets | (1,255,463 | ) | (2,773,182 | ) | (14,685,692 | ) | ||||||
Net assets: | ||||||||||||
Beginning of period | 11,264,373 | 14,037,555 | 28,723,247 | |||||||||
End of period | $ | 10,008,910 | $ | 11,264,373 | $ | 14,037,555 | ||||||
Undistributed net investment income at end of period | $ | — | $ | — | $ | — | ||||||
Capital share activity: | ||||||||||||
Shares sold | ||||||||||||
A-Class | 27,967 | 146,308 | 412,243 | |||||||||
C-Class | 715,802 | 3,024,833 | 3,534,115 | |||||||||
H-Class | 19,161,670 | 91,585,671 | 69,710,282 | |||||||||
Shares redeemed | ||||||||||||
A-Class | (39,987 | ) | (216,704 | ) | (353,486 | ) | ||||||
C-Class | (675,906 | ) | (3,043,155 | ) | (3,524,046 | ) | ||||||
H-Class | (19,051,574 | ) | (91,452,997 | ) | (70,296,847 | ) | ||||||
Net increase (decrease) in shares | 137,972 | 43,956 | (517,739 | ) |
* The Fund changed its fiscal year end from December to March in 2013.
56 | the Rydex FUNDS annual report | See Notes to Financial Statements. |
INVERSE DOW 2x STRATEGY FUND |
FINANCIAL HIGHLIGHTS |
This table is presented to show selected data for a share outstanding throughout each period and to assist shareholders in evaluating a Fund’s performance for the periods presented.
Period Ended | Year Ended | Year Ended | Year Ended | Year Ended | Year Ended | |||||||||||||||||||
March 28, | December 31, | December 31, | December 31, | December 31, | December 31, | |||||||||||||||||||
A-Class | 2013a,b | 2012 | 2011 | 2010 | 2009 | 2008 | ||||||||||||||||||
Per Share Data | ||||||||||||||||||||||||
Net asset value, beginning of period | $ | 10.00 | $ | 12.94 | $ | 17.89 | $ | 25.80 | $ | 46.96 | $ | 30.59 | ||||||||||||
Income (loss) from investment operations: | ||||||||||||||||||||||||
Net investment lossc | (.04 | ) | (.19 | ) | (.29 | ) | (.38 | ) | (.68 | ) | (.17 | ) | ||||||||||||
Net gain (loss) on investments (realized and unrealized) | (2.04 | ) | (2.75 | ) | (4.66 | ) | (7.53 | ) | (20.41 | ) | 16.59 | |||||||||||||
Total from investment operations | (2.08 | ) | (2.94 | ) | (4.95 | ) | (7.91 | ) | (21.09 | ) | 16.42 | |||||||||||||
Less distributions from: | ||||||||||||||||||||||||
Net investment income | — | — | — | — | — | (.05 | ) | |||||||||||||||||
Net realized gains | — | — | — | — | (.07 | ) | — | |||||||||||||||||
Total distributions | — | — | — | — | (.07 | ) | (.05 | ) | ||||||||||||||||
Net asset value, end of period | $ | 7.92 | $ | 10.00 | $ | 12.94 | $ | 17.89 | $ | 25.80 | $ | 46.96 | ||||||||||||
Total Returnd | (20.80 | %) | (22.66 | %) | (27.68 | %) | (30.70 | %) | (44.92 | %) | 53.68 | % | ||||||||||||
Ratios/Supplemental Data | ||||||||||||||||||||||||
Net assets, end of period (in thousands) | $ | 588 | $ | 863 | $ | 2,027 | $ | 1,752 | $ | 1,984 | $ | 3,889 | ||||||||||||
Ratios to average net assets: | ||||||||||||||||||||||||
Net investment loss | (1.69 | %) | (1.68 | %) | (1.85 | %) | (1.65 | %) | (1.69 | %) | (0.41 | %) | ||||||||||||
Total expenses | 1.76 | % | 1.79 | % | 1.92 | % | 1.81 | % | 1.83 | % | 1.75 | % | ||||||||||||
Portfolio turnover rate | — | — | — | — | — | — |
Period Ended | Year Ended | Year Ended | Year Ended | Year Ended | Year Ended | |||||||||||||||||||
March 28, | December 31, | December 31, | December 31, | December 31, | December 31, | |||||||||||||||||||
C-Class | 2013a,b | 2012 | 2011 | 2010 | 2009 | 2008 | ||||||||||||||||||
Per Share Data | ||||||||||||||||||||||||
Net asset value, beginning of period | $ | 9.31 | $ | 12.15 | $ | 16.94 | $ | 24.62 | $ | 45.18 | $ | 29.65 | ||||||||||||
Income (loss) from investment operations: | ||||||||||||||||||||||||
Net investment lossc | (.05 | ) | (.25 | ) | (.38 | ) | (.52 | ) | (.97 | ) | (.32 | ) | ||||||||||||
Net gain (loss) on investments (realized and unrealized) | (1.90 | ) | (2.59 | ) | (4.41 | ) | (7.16 | ) | (19.52 | ) | 15.90 | |||||||||||||
Total from investment operations | (1.95 | ) | (2.84 | ) | (4.79 | ) | (7.68 | ) | (20.49 | ) | 15.58 | |||||||||||||
Less distributions from: | ||||||||||||||||||||||||
Net investment income | — | — | — | — | — | (.05 | ) | |||||||||||||||||
Net realized gains | — | — | — | — | (.07 | ) | — | |||||||||||||||||
Total distributions | — | — | — | — | (.07 | ) | (.05 | ) | ||||||||||||||||
Net asset value, end of period | $ | 7.36 | $ | 9.31 | $ | 12.15 | $ | 16.94 | $ | 24.62 | $ | 45.18 | ||||||||||||
Total Returnd | (20.95 | %) | (23.31 | %) | (28.34 | %) | (31.19 | %) | (45.36 | %) | 52.55 | % | ||||||||||||
Ratios/Supplemental Data | ||||||||||||||||||||||||
Net assets, end of period (in thousands) | $ | 913 | $ | 784 | $ | 1,245 | $ | 1,567 | $ | 2,091 | $ | 3,600 | ||||||||||||
Ratios to average net assets: | ||||||||||||||||||||||||
Net investment loss | (2.49 | %) | (2.42 | %) | (2.60 | %) | (2.40 | %) | (2.40 | %) | (0.86 | %) | ||||||||||||
Total expenses | 2.57 | % | 2.53 | % | 2.67 | % | 2.56 | % | 2.54 | % | 2.49 | % | ||||||||||||
Portfolio turnover rate | — | — | — | — | — | — |
See Notes to Financial Statements. | the Rydex FUNDS annual report | 57 |
INVERSE DOW 2x STRATEGY FUND |
FINANCIAL HIGHLIGHTS (concluded) |
This table is presented to show selected data for a share outstanding throughout each period and to assist shareholders in evaluating a Fund’s performance for the periods presented.
Period Ended | Year Ended | Year Ended | Year Ended | Year Ended | Year Ended | |||||||||||||||||||
March 28, | December 31, | December 31, | December 31, | December 31, | December 31, | |||||||||||||||||||
H-Class | 2013a,b | 2012 | 2011 | 2010 | 2009 | 2008 | ||||||||||||||||||
Per Share Data | ||||||||||||||||||||||||
Net asset value, beginning of period | $ | 9.97 | $ | 12.93 | $ | 17.90 | $ | 25.81 | $ | 46.97 | $ | 30.59 | ||||||||||||
Income (loss) from investment operations: | ||||||||||||||||||||||||
Net investment lossc | (.04 | ) | (.18 | ) | (.29 | ) | (.38 | ) | (.63 | ) | (.06 | ) | ||||||||||||
Net gain (loss) on investments (realized and unrealized) | (2.02 | ) | (2.78 | ) | (4.68 | ) | (7.53 | ) | (20.46 | ) | 16.49 | |||||||||||||
Total from investment operations | (2.06 | ) | (2.96 | ) | (4.97 | ) | (7.91 | ) | (21.09 | ) | 16.43 | |||||||||||||
Less distributions from: | ||||||||||||||||||||||||
Net investment income | — | — | — | — | — | (.05 | ) | |||||||||||||||||
Net realized gains | — | — | — | — | (.07 | ) | — | |||||||||||||||||
Total distributions | — | — | — | — | (.07 | ) | (.05 | ) | ||||||||||||||||
Net asset value, end of period | $ | 7.91 | $ | 9.97 | $ | 12.93 | $ | 17.90 | $ | 25.81 | $ | 46.97 | ||||||||||||
Total Returnd | (20.66 | %) | (22.89 | %) | (27.77 | %) | (30.65 | %) | (44.91 | %) | 53.71 | % | ||||||||||||
Ratios/Supplemental Data | ||||||||||||||||||||||||
Net assets, end of period (in thousands) | $ | 8,507 | $ | 9,617 | $ | 10,765 | $ | 25,404 | $ | 34,994 | $ | 33,528 | ||||||||||||
Ratios to average net assets: | ||||||||||||||||||||||||
Net investment loss | (1.71 | %) | (1.67 | %) | (1.85 | %) | (1.66 | %) | (1.70 | %) | (0.15 | %) | ||||||||||||
Total expenses | 1.79 | % | 1.79 | % | 1.92 | % | 1.81 | % | 1.83 | % | 1.74 | % | ||||||||||||
Portfolio turnover rate | — | — | — | — | — | — |
a | Percentage amounts for the period, except total return and portfolio turnover rate, have been annualized. |
b | The Fund changed its fiscal year end from December to March in 2013. |
c | Net investment loss per share was computed using average shares outstanding throughout the period. |
d | Total return does not reflect the impact of any applicable sales charges and has not been annualized. |
58 | the Rydex FUNDS annual report | See Notes to Financial Statements. |
This page intentionally left blank. |
the Rydex FUNDS annual report | 59 |
Performance Report and FUND PROFILE (Unaudited) | March 28, 2013 |
RUSSELL 2000® 2x STRATEGY FUND
OBJECTIVE: Seeks to provide investment results that match, before fees and expenses, the performance of a specific benchmark on a daily basis. The Fund’s current benchmark is 200% of the performance of the Russell 2000® Index (the “underlying index”). The Fund does not seek to achieve its investment objective over a period of time greater than one day.
For the one-year period ended March 28, 2013, Russell 2000® 2x Strategy Fund maintained a daily correlation of over 99% to its benchmark of 200% of the daily price movement of the Russell 2000 Index. Russell 2000® 2x Strategy Fund H-Class returned 28.76%, while the Russell 2000 Index returned 16.30% over the same period.
Among sectors, the biggest performance contributors to the underlying index during the period were Financials and Industrials. Telecommunication Services contributed least to performance of the underlying index for the period. Energy was the only sector that detracted from performance of the underlying index for the period.
Pharmacyclics, Inc., Ocwen Financial Corp. and Onyx Pharmaceuticals, Inc. were the largest contributors to performance of the underlying index for the year. MAKO Surgical Corp., Vivus, Inc. and Quality Systems, Inc. were the leading detractors from performance of the underlying index for the year.
Derivatives in the Fund were used to help provide exposure to the composition of the benchmark in the highest efficient manner and to provide leverage, not for hedging purposes. The results of derivatives use during the period were within our expectations and contributed to the Fund’s performance.
Due to the compounding of daily returns, leveraged and inverse funds’ returns over periods other than one day will likely differ in amount and possibly direction from the benchmark return for the same period. Investors should monitor their leveraged and inverse funds’ holdings to ensure that they are consistent with their strategies, as frequently as daily.
The effects of compounding may cause the longer-term correlation of the fund to its benchmark to diminish. The apparent discrepancy between the leveraged and unleveraged indices is the result of compounding, which is described briefly on page 4 of this report.
Performance displayed represents past performance, which is no guarantee of future results.
Holdings Diversification (Market Exposure as % of Net Assets)
“Holdings Diversification (Market Exposure as % of Net Assets)” excludes any temporary cash investments.
Inception Dates: | |
A-Class | May 31, 2006 |
C-Class | May 31, 2006 |
H-Class | May 31, 2006 |
Ten Largest Holdings (% of Total Net Assets) | ||||
Alaska Air Group, Inc. | 0.2 | % | ||
Pharmacyclics, Inc. | 0.2 | % | ||
Axiall Corp. | 0.2 | % | ||
Genesee & Wyoming, Inc. — Class A | 0.2 | % | ||
Ocwen Financial Corp. | 0.2 | % | ||
Starwood Property Trust, Inc. | 0.2 | % | ||
Two Harbors Investment Corp. | 0.2 | % | ||
CommVault Systems, Inc. | 0.2 | % | ||
Dril-Quip, Inc. | 0.2 | % | ||
Gulfport Energy Corp. | 0.2 | % | ||
Top Ten Total | 2.0 | % |
“Ten Largest Holdings” exclude any temporary cash or derivative investments.
60 | the Rydex FUNDS annual report |
Performance Report and FUND PROFILE (Unaudited) (concluded) |
Cumulative Fund Performance*
Average Annual Returns*
Periods Ended 03/28/13 | ||||||||||||
Since | ||||||||||||
Inception | ||||||||||||
1 Year | 5 Year | (05/31/06) | ||||||||||
A-Class Shares | 28.82 | % | 2.94 | % | -1.72 | % | ||||||
A-Class Shares with sales charge† | 22.70 | % | 1.94 | % | -2.42 | % | ||||||
C-Class Shares | 27.99 | % | 2.20 | % | -2.46 | % | ||||||
C-Class Shares with CDSC‡ | 26.99 | % | 2.20 | % | -2.46 | % | ||||||
H-Class Shares | 28.76 | % | 2.89 | % | -1.74 | % | ||||||
Russell 2000 Index | 16.30 | % | 8.24 | % | 5.59 | % |
* | The performance data above represents past performance that is not predictive of future results. The investment return and principal value of an investment in the Fund will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than their original cost. Returns are historical and include changes in principal and reinvested dividends and capital gains and do not reflect the effect of taxes. The Russell 2000 Index is an unmanaged index and, unlike the Fund, has no management fees or operating expenses to reduce its reported return. The graphs are based on A-Class shares and H-Class shares only; performance for C-Class shares will vary due to differences in fee structure. |
† | Fund returns are calculated using the maximum sales charge of 4.75%. |
‡ | Fund returns include a CDSC of 1% if redeemed within 12 months of purchase. |
the Rydex FUNDS annual report | 61 |
SCHEDULE OF INVESTMENTS | March 28, 2013 |
RUSSELL 2000® 2X STRATEGY FUND |
Shares | Value | |||||||
COMMON STOCKS† - 59.5% | ||||||||
FINANCIALS - 13.8% | ||||||||
Ocwen Financial Corp.* | 2,694 | $ | 102,155 | |||||
Starwood Property Trust, Inc. | 3,383 | 93,911 | ||||||
Two Harbors Investment Corp. | 7,397 | 93,276 | ||||||
Omega Healthcare Investors, Inc. | 2,804 | 85,129 | ||||||
Highwoods Properties, Inc. | 1,967 | 77,835 | ||||||
Invesco Mortgage Capital, Inc. | 3,343 | 71,507 | ||||||
First American Financial Corp. | 2,660 | 68,016 | ||||||
Alterra Capital Holdings Ltd. | 2,150 | 67,725 | ||||||
Geo Group, Inc. | 1,780 | 66,964 | ||||||
Healthcare Realty Trust, Inc. | 2,187 | 62,089 | ||||||
ARMOUR Residential REIT, Inc. | 9,361 | 61,127 | ||||||
EPR Properties | 1,173 | 61,055 | ||||||
RLJ Lodging Trust | 2,669 | 60,746 | ||||||
LaSalle Hotel Properties | 2,388 | 60,607 | ||||||
Hancock Holding Co. | 1,906 | 58,933 | ||||||
Susquehanna Bancshares, Inc. | 4,700 | 58,420 | ||||||
CNO Financial Group, Inc. | 5,038 | 57,684 | ||||||
Prosperity Bancshares, Inc. | 1,184 | 56,109 | ||||||
Prospect Capital Corp. | 5,018 | 54,747 | ||||||
Portfolio Recovery Associates, Inc.* | 431 | 54,702 | ||||||
Medical Properties Trust, Inc. | 3,390 | 54,376 | ||||||
Stifel Financial Corp.* | 1,526 | 52,906 | ||||||
CYS Investments, Inc. | 4,383 | 51,456 | ||||||
DCT Industrial Trust, Inc. | 6,827 | 50,520 | ||||||
Sunstone Hotel Investors, Inc.* | 4,062 | 50,003 | ||||||
Colonial Properties Trust | 2,200 | 49,741 | ||||||
CubeSmart | 3,084 | 48,727 | ||||||
Sovran Self Storage, Inc. | 724 | 46,691 | ||||||
Potlatch Corp. | 1,013 | 46,456 | ||||||
Washington Real Estate Investment Trust | 1,664 | 46,325 | ||||||
Platinum Underwriters Holdings Ltd. | 824 | 45,987 | ||||||
NorthStar Realty Finance Corp. | 4,845 | 45,931 | ||||||
Redwood Trust, Inc. | 1,977 | 45,827 | ||||||
FirstMerit Corp. | 2,741 | 45,308 | ||||||
Webster Financial Corp. | 1,807 | 43,838 | ||||||
DiamondRock Hospitality Co. | 4,706 | 43,813 | ||||||
EastGroup Properties, Inc. | 751 | 43,708 | ||||||
Apollo Investment Corp. | 5,084 | 42,502 | ||||||
FNB Corp. | 3,491 | 42,241 | ||||||
First Industrial Realty Trust, Inc. | 2,461 | 42,157 | ||||||
Financial Engines, Inc. | 1,163 | 42,124 | ||||||
Trustmark Corp. | 1,676 | 41,917 | ||||||
First Cash Financial Services, Inc.* | 714 | 41,655 | ||||||
Glimcher Realty Trust | 3,495 | 40,543 | ||||||
Texas Capital Bancshares, Inc.* | 999 | 40,410 | ||||||
National Health Investors, Inc. | 610 | 39,925 | ||||||
UMB Financial Corp. | 810 | 39,747 | ||||||
Cathay General Bancorp | 1,970 | 39,636 | ||||||
Pebblebrook Hotel Trust | 1,518 | 39,149 | ||||||
Lexington Realty Trust | 3,304 | 38,987 | ||||||
Greenhill & Company, Inc. | 725 | 38,701 | ||||||
BancorpSouth, Inc. | 2,360 | 38,468 | ||||||
First Financial Bankshares, Inc. | 791 | 38,443 | ||||||
RLI Corp. | 534 | 38,368 | ||||||
Cash America International, Inc. | 731 | 38,356 | ||||||
American Capital Mortgage Investment Corp. | 1,478 | 38,206 | ||||||
PennyMac Mortgage Investment Trust | 1,472 | 38,110 | ||||||
Strategic Hotels & Resorts, Inc.* | 4,528 | 37,809 | ||||||
Ryman Hospitality Properties | 820 | 37,515 | ||||||
Umpqua Holdings Corp. | 2,802 | 37,155 | ||||||
DuPont Fabros Technology, Inc. | 1,530 | 37,133 | ||||||
IBERIABANK Corp. | 739 | 36,965 | ||||||
Sun Communities, Inc. | 748 | 36,899 | ||||||
Primerica, Inc. | 1,109 | 36,353 | ||||||
PS Business Parks, Inc. | 459 | 36,224 | ||||||
Colony Financial, Inc. | 1,613 | 35,809 | ||||||
Radian Group, Inc. | 3,337 | 35,739 | ||||||
Acadia Realty Trust | 1,271 | 35,296 | ||||||
Old National Bancorp | 2,535 | 34,856 | ||||||
Glacier Bancorp, Inc. | 1,796 | 34,088 | ||||||
MarketAxess Holdings, Inc. | 912 | 34,018 | ||||||
Wintrust Financial Corp. | 909 | 33,669 | ||||||
United Bankshares, Inc.1 | 1,259 | 33,502 | ||||||
Walter Investment Management Corp.* | 898 | 33,451 | ||||||
National Penn Bancshares, Inc. | 3,088 | 33,011 | ||||||
MB Financial, Inc. | 1,365 | 32,992 | ||||||
Selective Insurance Group, Inc. | 1,372 | 32,942 | ||||||
Equity One, Inc. | 1,372 | 32,887 | ||||||
Montpelier Re Holdings Ltd. | 1,254 | 32,667 | ||||||
Bank of the Ozarks, Inc. | 728 | 32,287 | ||||||
Capstead Mortgage Corp. | 2,471 | 31,678 | ||||||
Westamerica Bancorporation | 697 | 31,595 | ||||||
LTC Properties, Inc. | 764 | 31,118 | ||||||
PHH Corp.* | 1,414 | 31,051 | ||||||
Northwest Bancshares, Inc. | 2,443 | 31,002 | ||||||
Home Loan Servicing Solutions Ltd. | 1,322 | 30,842 | ||||||
PrivateBancorp, Inc. — Class A | 1,608 | 30,407 | ||||||
Evercore Partners, Inc. — Class A | 717 | 29,827 | ||||||
Education Realty Trust, Inc. | 2,832 | 29,821 | ||||||
Community Bank System, Inc. | 987 | 29,245 | ||||||
Fifth Street Finance Corp. | 2,631 | 28,994 | ||||||
Virtus Investment Partners, Inc.* | 154 | 28,687 | ||||||
Chesapeake Lodging Trust | 1,220 | 27,987 | ||||||
International Bancshares Corp. | 1,338 | 27,830 | ||||||
Government Properties Income Trust | 1,081 | 27,814 | ||||||
Pennsylvania Real Estate Investment Trust | 1,401 | 27,165 | ||||||
Sabra Health Care REIT, Inc. | 923 | 26,776 | ||||||
Argo Group International Holdings Ltd. | 646 | 26,731 | ||||||
Franklin Street Properties Corp. | 1,813 | 26,506 | ||||||
American Assets Trust, Inc. | 823 | 26,344 | ||||||
Solar Capital Ltd. | 1,118 | 26,262 | ||||||
Symetra Financial Corp. | 1,933 | 25,922 | ||||||
EZCORP, Inc. — Class A* | 1,200 | 25,560 | ||||||
BBCN Bancorp, Inc. | 1,957 | 25,558 | ||||||
Western Alliance Bancorporation* | 1,822 | 25,216 | ||||||
Hersha Hospitality Trust — Class A | 4,308 | 25,159 | ||||||
First Midwest Bancorp, Inc. | 1,873 | 24,873 | ||||||
CVB Financial Corp. | 2,207 | 24,873 | ||||||
Cousins Properties, Inc. | 2,300 | 24,587 | ||||||
Main Street Capital Corp. | 762 | 24,453 | ||||||
NBT Bancorp, Inc. | 1,088 | 24,099 | ||||||
First Financial Bancorp | 1,468 | 23,561 |
62 | THE RYDEX FUNDS ANNUAL REPORT | SEE NOTES TO FINANCIAL STATEMENTS. |
SCHEDULE OF INVESTMENTS (continued) | March 28, 2013 |
RUSSELL 2000® 2X STRATEGY FUND |
Shares | Value | |||||||
Hudson Pacific Properties, Inc. | 1,080 | $ | 23,490 | |||||
MGIC Investment Corp.* | 4,723 | 23,379 | ||||||
Amtrust Financial Services, Inc. | 674 | 23,354 | ||||||
Associated Estates Realty Corp. | 1,242 | 23,151 | ||||||
Provident Financial Services, Inc. | 1,511 | 23,073 | ||||||
iStar Financial, Inc.* | 2,114 | 23,021 | ||||||
National Financial Partners Corp.* | 1,012 | 22,699 | ||||||
Credit Acceptance Corp.* | 185 | 22,596 | ||||||
Citizens Republic Bancorp, Inc.* | 1,000 | 22,550 | ||||||
Investors Real Estate Trust | 2,278 | 22,484 | ||||||
American Equity Investment Life Holding Co. | 1,504 | 22,395 | ||||||
PacWest Bancorp | 763 | 22,211 | ||||||
Columbia Banking System, Inc. | 994 | 21,848 | ||||||
CreXus Investment Corp. | 1,672 | 21,769 | ||||||
Anworth Mortgage Asset Corp. | 3,432 | 21,725 | ||||||
Astoria Financial Corp. | 2,179 | 21,485 | ||||||
Home BancShares, Inc. | 555 | 20,907 | ||||||
Investors Bancorp, Inc. | 1,111 | 20,865 | ||||||
SCBT Financial Corp. | 410 | 20,664 | ||||||
Horace Mann Educators Corp. | 991 | 20,662 | ||||||
World Acceptance Corp.* | 239 | 20,523 | ||||||
Ramco-Gershenson Properties Trust | 1,210 | 20,328 | ||||||
Nelnet, Inc. — Class A | 600 | 20,280 | ||||||
Pinnacle Financial Partners, Inc.* | 863 | 20,160 | ||||||
Park National Corp. | 279 | 19,471 | ||||||
STAG Industrial, Inc. | 913 | 19,420 | ||||||
Inland Real Estate Corp. | 1,920 | 19,373 | ||||||
Boston Private Financial Holdings, Inc. | 1,958 | 19,345 | ||||||
Triangle Capital Corp. | 682 | 19,089 | ||||||
Forestar Group, Inc.* | 869 | 18,996 | ||||||
First Potomac Realty Trust | 1,272 | 18,864 | ||||||
First Commonwealth Financial Corp. | 2,498 | 18,635 | ||||||
Retail Opportunity Investments Corp. | 1,329 | 18,619 | ||||||
FelCor Lodging Trust, Inc.* | 3,113 | 18,522 | ||||||
PennantPark Investment Corp. | 1,637 | 18,482 | ||||||
Employers Holdings, Inc. | 787 | 18,455 | ||||||
BlackRock Kelso Capital Corp. | 1,839 | 18,390 | ||||||
DFC Global Corp.* | 1,100 | 18,304 | ||||||
Independent Bank Corp. | 559 | 18,218 | ||||||
Coresite Realty Corp. | 518 | 18,120 | ||||||
Tower Group International Ltd. | 982 | 18,118 | ||||||
Chemical Financial Corp. | 683 | 18,018 | ||||||
Nationstar Mortgage Holdings, Inc.*,1 | 483 | 17,823 | ||||||
Oriental Financial Group, Inc. | 1,143 | 17,728 | ||||||
Oritani Financial Corp. | 1,141 | 17,674 | ||||||
Banco Latinoamericano de Comercio Exterior S.A. — Class E | 703 | 17,392 | ||||||
Greenlight Capital Re Ltd. — Class A* | 708 | 17,311 | ||||||
AG Mortgage Investment Trust, Inc. | 678 | 17,269 | ||||||
Universal Health Realty Income Trust | 299 | 17,255 | ||||||
Knight Capital Group, Inc. — Class A* | 4,546 | 16,911 | ||||||
ViewPoint Financial Group, Inc. | 839 | 16,872 | ||||||
Cohen & Steers, Inc. | 466 | 16,809 | ||||||
Infinity Property & Casualty Corp. | 298 | 16,748 | ||||||
Kennedy-Wilson Holdings, Inc. | 1,076 | 16,688 | ||||||
Resource Capital Corp. | 2,493 | 16,479 | ||||||
Ashford Hospitality Trust, Inc. | 1,333 | 16,476 | ||||||
Hercules Technology Growth Capital, Inc. | 1,324 | 16,219 | ||||||
HFF, Inc. — Class A | 812 | 16,183 | ||||||
Alexander’s, Inc. | 49 | 16,155 | ||||||
AMERISAFE, Inc. | 452 | 16,064 | ||||||
Brookline Bancorp, Inc. | 1,751 | 16,004 | ||||||
Spirit Realty Capital, Inc. | 830 | 15,770 | ||||||
Berkshire Hills Bancorp, Inc. | 614 | 15,682 | ||||||
City Holding Co. | 394 | 15,677 | ||||||
Encore Capital Group, Inc.* | 514 | 15,471 | ||||||
Safety Insurance Group, Inc. | 314 | 15,433 | ||||||
Excel Trust, Inc. | 1,123 | 15,329 | ||||||
WisdomTree Investments, Inc.* | 1,470 | 15,288 | ||||||
WesBanco, Inc. | 637 | 15,256 | ||||||
Banner Corp. | 478 | 15,215 | ||||||
Summit Hotel Properties, Inc. | 1,405 | 14,710 | ||||||
Sterling Financial Corp. | 673 | 14,597 | ||||||
Dynex Capital, Inc. | 1,361 | 14,535 | ||||||
Navigators Group, Inc.* | 245 | 14,394 | ||||||
Renasant Corp. | 625 | 13,988 | ||||||
Apollo Residential Mortgage, Inc. | 610 | 13,597 | ||||||
Urstadt Biddle Properties, Inc. — Class A | 619 | 13,469 | ||||||
Hilltop Holdings, Inc.* | 996 | 13,436 | ||||||
S&T Bancorp, Inc. | 723 | 13,404 | ||||||
Campus Crest Communities, Inc. | 961 | 13,358 | ||||||
Maiden Holdings Ltd. | 1,254 | 13,280 | ||||||
Cardinal Financial Corp. | 728 | 13,235 | ||||||
Flushing Financial Corp. | 774 | 13,112 | ||||||
TrustCo Bank Corp. NY | 2,348 | 13,102 | ||||||
State Bank Financial Corp. | 794 | 12,998 | ||||||
Getty Realty Corp. | 643 | 12,995 | ||||||
Piper Jaffray Cos.* | 377 | 12,931 | ||||||
United Fire Group, Inc. | 504 | 12,837 | ||||||
PICO Holdings, Inc.* | 570 | 12,654 | ||||||
Hanmi Financial Corp.* | 789 | 12,624 | ||||||
Sandy Spring Bancorp, Inc. | 603 | 12,120 | ||||||
CapLease, Inc. | 1,901 | 12,109 | ||||||
Duff & Phelps Corp. — Class A | 777 | 12,051 | ||||||
RAIT Financial Trust | 1,509 | 12,027 | ||||||
Community Trust Bancorp, Inc. | 348 | 11,842 | ||||||
TICC Capital Corp. | 1,190 | 11,829 | ||||||
United Community Banks, Inc.* | 1,042 | 11,816 | ||||||
West Coast Bancorp | 486 | 11,800 | ||||||
Tompkins Financial Corp. | 279 | 11,796 | ||||||
ICG Group, Inc.* | 937 | 11,694 | ||||||
Stewart Information Services Corp. | 457 | 11,640 | ||||||
Medley Capital Corp. | 719 | 11,396 | ||||||
Bancorp, Inc.* | 815 | 11,288 | ||||||
Monmouth Real Estate Investment Corp. — Class A | 1,011 | 11,273 | ||||||
Dime Community Bancshares, Inc. | 782 | 11,230 | ||||||
Netspend Holdings, Inc.* | 705 | 11,202 | ||||||
First Merchants Corp. | 718 | 11,107 | ||||||
Kite Realty Group Trust | 1,638 | 11,040 | ||||||
Lakeland Financial Corp. | 412 | 10,996 | ||||||
First BanCorp* | 1,760 | 10,965 | ||||||
Western Asset Mortgage Capital Corp. | 470 | 10,923 | ||||||
Simmons First National Corp. — Class A | 430 | 10,888 |
SEE NOTES TO FINANCIAL STATEMENTS. | THE RYDEX FUNDS ANNUAL REPORT | 63 |
SCHEDULE OF INVESTMENTS (continued) | March 28, 2013 |
RUSSELL 2000® 2X STRATEGY FUND |
Shares | Value | |||||||
Investment Technology Group, Inc.* | 968 | $ | 10,687 | |||||
Wilshire Bancorp, Inc.* | 1,546 | 10,482 | ||||||
BGC Partners, Inc. — Class A | 2,462 | 10,242 | ||||||
Apollo Commercial Real Estate Finance, Inc. | 581 | 10,220 | ||||||
Green Dot Corp. — Class A* | 600 | 10,026 | ||||||
Eagle Bancorp, Inc.* | 457 | 10,004 | ||||||
Parkway Properties, Inc. | 539 | 9,998 | ||||||
Agree Realty Corp. | 331 | 9,963 | ||||||
Rouse Properties, Inc. | 550 | 9,955 | ||||||
Tejon Ranch Co.* | 333 | 9,917 | ||||||
Union First Market Bankshares Corp. | 506 | 9,897 | ||||||
BofI Holding, Inc.* | 275 | 9,867 | ||||||
TowneBank | 655 | 9,805 | ||||||
Washington Trust Bancorp, Inc. | 355 | 9,720 | ||||||
Virginia Commerce Bancorp, Inc.* | 674 | 9,470 | ||||||
Enstar Group Ltd.* | 76 | 9,446 | ||||||
New York Mortgage Trust, Inc. | 1,240 | 9,350 | ||||||
WSFS Financial Corp. | 191 | 9,290 | ||||||
StellarOne Corp. | 575 | 9,286 | ||||||
Rockville Financial, Inc. | 715 | 9,266 | ||||||
FBL Financial Group, Inc. — Class A | 238 | 9,249 | ||||||
Heartland Financial USA, Inc. | 364 | 9,198 | ||||||
Cedar Realty Trust, Inc. | 1,504 | 9,189 | ||||||
Winthrop Realty Trust | 729 | 9,171 | ||||||
Southside Bancshares, Inc. | 429 | 9,013 | ||||||
Provident New York Bancorp | 988 | 8,961 | ||||||
Meadowbrook Insurance Group, Inc. | 1,263 | 8,904 | ||||||
Capital Southwest Corp. | 77 | 8,855 | ||||||
First Financial Corp. | 281 | 8,849 | ||||||
National Western Life Insurance Co. — Class A | 50 | 8,800 | ||||||
eHealth, Inc.* | 491 | 8,779 | ||||||
MCG Capital Corp. | 1,825 | 8,724 | ||||||
First Financial Holdings, Inc. | 416 | 8,719 | ||||||
NewStar Financial, Inc.* | 658 | 8,705 | ||||||
1st Source Corp. | 366 | 8,674 | ||||||
EverBank Financial Corp. | 561 | 8,639 | ||||||
Ameris Bancorp* | 599 | 8,596 | ||||||
Terreno Realty Corp. | 477 | 8,576 | ||||||
First Busey Corp. | 1,861 | 8,505 | ||||||
Beneficial Mutual Bancorp, Inc.* | 825 | 8,498 | ||||||
Central Pacific Financial Corp.* | 538 | 8,447 | ||||||
GAMCO Investors, Inc. — Class A | 159 | 8,444 | ||||||
HomeTrust Bancshares, Inc.* | 530 | 8,374 | ||||||
Saul Centers, Inc. | 191 | 8,354 | ||||||
Safeguard Scientifics, Inc.* | 524 | 8,279 | ||||||
Citizens, Inc.* | 977 | 8,197 | ||||||
United Financial Bancorp, Inc. | 531 | 8,071 | ||||||
FXCM, Inc. — Class A | 585 | 8,003 | ||||||
Sterling Bancorp | 778 | 7,904 | ||||||
Chatham Lodging Trust | 438 | 7,713 | ||||||
MVC Capital, Inc. | 601 | 7,711 | ||||||
OneBeacon Insurance Group Ltd. — Class A | 570 | 7,706 | ||||||
Select Income REIT | 290 | 7,671 | ||||||
Golub Capital BDC, Inc. | 460 | 7,595 | ||||||
First Interstate Bancsystem, Inc. — Class A | 402 | 7,562 | ||||||
Federal Agricultural Mortgage Corp. — Class C | 245 | 7,544 | ||||||
Silver Bay Realty Trust Corp. | 362 | 7,503 | ||||||
Westwood Holdings Group, Inc. | 166 | 7,375 | ||||||
Univest Corporation of Pennsylvania | 419 | 7,299 | ||||||
Lakeland Bancorp, Inc. | 736 | 7,250 | ||||||
German American Bancorp, Inc. | 313 | 7,202 | ||||||
MainSource Financial Group, Inc. | 505 | 7,090 | ||||||
CoBiz Financial, Inc. | 873 | 7,054 | ||||||
New Mountain Finance Corp. | 482 | 7,047 | ||||||
Arlington Asset Investment Corp. — Class A | 272 | 7,020 | ||||||
First Community Bancshares, Inc. | 441 | 6,990 | ||||||
OmniAmerican Bancorp, Inc.* | 276 | 6,977 | ||||||
Financial Institutions, Inc. | 347 | 6,926 | ||||||
KCAP Financial, Inc. | 639 | 6,882 | ||||||
SY Bancorp, Inc. | 303 | 6,818 | ||||||
Trico Bancshares | 398 | 6,806 | ||||||
Bryn Mawr Bank Corp. | 290 | 6,751 | ||||||
First Connecticut Bancorp, Inc. | 450 | 6,629 | ||||||
BancFirst Corp. | 158 | 6,589 | ||||||
Territorial Bancorp, Inc. | 275 | 6,540 | ||||||
State Auto Financial Corp. | 374 | 6,515 | ||||||
Fidus Investment Corp. | 339 | 6,492 | ||||||
Taylor Capital Group, Inc.* | 405 | 6,476 | ||||||
Centerstate Banks, Inc. | 753 | 6,461 | ||||||
Enterprise Financial Services Corp. | 449 | 6,439 | ||||||
Camden National Corp. | 194 | 6,418 | ||||||
Bank Mutual Corp. | 1,155 | 6,387 | ||||||
Park Sterling Corp.* | 1,117 | 6,300 | ||||||
Great Southern Bancorp, Inc. | 258 | 6,293 | ||||||
Arrow Financial Corp. | 255 | 6,283 | ||||||
National Bankshares, Inc. | 178 | 6,218 | ||||||
One Liberty Properties, Inc. | 285 | 6,190 | ||||||
Cowen Group, Inc. — Class A* | 2,195 | 6,190 | ||||||
Franklin Financial Corp. | 338 | 6,169 | ||||||
Southwest Bancorp, Inc.* | 488 | 6,129 | ||||||
International. FCStone, Inc.* | 347 | 6,041 | ||||||
Global Indemnity plc — Class A* | 260 | 6,032 | ||||||
Citizens & Northern Corp. | 308 | 6,006 | ||||||
Gramercy Capital Corporation* | 1,150 | 5,992 | ||||||
First Bancorp | 443 | 5,976 | ||||||
Medallion Financial Corp. | 450 | 5,949 | ||||||
Peoples Bancorp, Inc. | 264 | 5,911 | ||||||
Northfield Bancorp, Inc. | 515 | 5,850 | ||||||
Hudson Valley Holding Corp. | 391 | 5,830 | ||||||
Metro Bancorp, Inc.* | 351 | 5,806 | ||||||
GFI Group, Inc. | 1,725 | 5,762 | ||||||
Homeowners Choice, Inc. | 211 | 5,750 | ||||||
Republic Bancorp, Inc. — Class A | 253 | 5,728 | ||||||
Calamos Asset Management, Inc. — | ||||||||
Class A | 485 | 5,708 | ||||||
First of Long Island Corp. | 192 | 5,693 | ||||||
THL Credit, Inc. | 376 | 5,632 | ||||||
Heritage Financial Corp. | 385 | 5,583 | ||||||
First Defiance Financial Corp. | 239 | 5,573 | ||||||
Manning & Napier, Inc. — Class A | 336 | 5,557 | ||||||
American Safety Insurance Holdings Ltd.* | 221 | 5,516 |
64 | THE RYDEX FUNDS ANNUAL REPORT | SEE NOTES TO FINANCIAL STATEMENTS. |
SCHEDULE OF INVESTMENTS (continued) | March 28, 2013 |
RUSSELL 2000® 2X STRATEGY FUND |
Shares | Value | |||||||
Solar Senior Capital Ltd. | 286 | $ | 5,491 | |||||
Washington Banking Co. | 387 | 5,395 | ||||||
Fox Chase Bancorp, Inc. | 319 | 5,388 | ||||||
Baldwin & Lyons, Inc. — Class B | 226 | 5,377 | ||||||
Gladstone Commercial Corp. | 272 | 5,296 | ||||||
Bank of Marin Bancorp | 132 | 5,292 | ||||||
Diamond Hill Investment Group, Inc. | 68 | 5,291 | ||||||
CNB Financial Corp. | 309 | 5,268 | ||||||
OceanFirst Financial Corp. | 362 | 5,220 | ||||||
Whitestone REIT — Class B | 342 | 5,178 | ||||||
Walker & Dunlop, Inc.* | 284 | 5,103 | ||||||
Pacific Continental Corp. | 453 | 5,060 | ||||||
Crawford & Co. — Class B | 659 | 5,002 | ||||||
Oppenheimer Holdings, Inc. — Class A | 255 | 4,965 | ||||||
HomeStreet, Inc.* | 220 | 4,915 | ||||||
Gladstone Capital Corp. | 527 | 4,848 | ||||||
1st United Bancorp, Inc. | 748 | 4,832 | ||||||
First California Financial Group, Inc.* | 566 | 4,822 | ||||||
Westfield Financial, Inc. | 611 | 4,754 | ||||||
Gladstone Investment Corp. | 650 | 4,752 | ||||||
Home Federal Bancorp, Inc. | 367 | 4,698 | ||||||
Bridge Bancorp, Inc. | 218 | 4,689 | ||||||
Marlin Business Services Corp. | 202 | 4,684 | ||||||
National Interstate Corp. | 155 | 4,647 | ||||||
Preferred Bank/Los Angeles CA* | 289 | 4,560 | ||||||
Phoenix Companies, Inc.* | 148 | 4,554 | ||||||
Zillow, Inc. — Class A* | 83 | 4,538 | ||||||
SWS Group, Inc.* | 727 | 4,398 | ||||||
FBR & Co.* | 231 | 4,373 | ||||||
West Bancorporation, Inc. | 388 | 4,307 | ||||||
BankFinancial Corp. | 530 | 4,288 | ||||||
Ladenburg Thalmann Financial Services, Inc.* | 2,578 | 4,279 | ||||||
Consolidated-Tomoka Land Co. | 109 | 4,278 | ||||||
Ames National Corp. | 205 | 4,276 | ||||||
American National Bankshares, Inc. | 195 | 4,204 | ||||||
Thomas Properties Group, Inc. | 810 | 4,155 | ||||||
Kansas City Life Insurance Co. | 106 | 4,148 | ||||||
Capital Bank Financial Corp. — Class A* | 240 | 4,118 | ||||||
Penns Woods Bancorp, Inc. | 100 | 4,097 | ||||||
MidWestOne Financial Group, Inc. | 172 | 4,095 | ||||||
Provident Financial Holdings, Inc. | 240 | 4,082 | ||||||
Bank of Kentucky Financial Corp. | 148 | 4,060 | ||||||
Guaranty Bancorp* | 1,910 | 4,011 | ||||||
Sierra Bancorp | 302 | 3,971 | ||||||
GSV Capital Corp.* | 480 | 3,965 | ||||||
MetroCorp Bancshares, Inc.* | 391 | 3,945 | ||||||
First Bancorp, Inc. | 219 | 3,944 | ||||||
Meridian Interstate Bancorp, Inc.* | 208 | 3,900 | ||||||
Merchants Bancshares, Inc. | 128 | 3,857 | ||||||
Kearny Financial Corp. | 378 | 3,856 | ||||||
Seacoast Banking Corporation of Florida* | 1,844 | 3,854 | ||||||
NGP Capital Resources Co. | 538 | 3,825 | ||||||
Center Bancorp, Inc. | 300 | 3,729 | ||||||
Mercantile Bank Corp. | 220 | 3,676 | ||||||
Bar Harbor Bankshares | 100 | 3,655 | ||||||
Nicholas Financial, Inc. | 247 | 3,631 | ||||||
Northrim BanCorp, Inc. | 160 | 3,595 | ||||||
Capital City Bank Group, Inc.* | 291 | 3,594 | ||||||
UMH Properties, Inc. | 348 | 3,574 | ||||||
JAVELIN Mortgage Investment Corp. | 180 | 3,537 | ||||||
ESB Financial Corp. | 257 | 3,518 | ||||||
Bridge Capital Holdings* | 229 | 3,490 | ||||||
Heritage Commerce Corp.* | 516 | 3,473 | ||||||
Suffolk Bancorp* | 239 | 3,403 | ||||||
Sun Bancorp, Inc.* | 995 | 3,393 | ||||||
MidSouth Bancorp, Inc. | 207 | 3,366 | ||||||
Peapack Gladstone Financial Corp. | 223 | 3,325 | ||||||
National Bank Holdings Corp. — Class A | 180 | 3,294 | ||||||
Ares Commercial Real Estate Corp. | 192 | 3,249 | ||||||
Horizon Bancorp | 160 | 3,234 | ||||||
AV Homes, Inc.* | 242 | 3,226 | ||||||
Hallmark Financial Services* | 356 | 3,204 | ||||||
C&F Financial Corp. | 78 | 3,194 | ||||||
SI Financial Group, Inc. | 262 | 3,168 | ||||||
First Financial Northwest, Inc.* | 405 | 3,163 | ||||||
Simplicity Bancorp, Inc. | 207 | 3,111 | ||||||
Access National Corp. | 189 | 3,100 | ||||||
Home Bancorp, Inc.* | 166 | 3,089 | ||||||
Eastern Insurance Holdings, Inc. | 163 | 3,058 | ||||||
First Pactrust Bancorp, Inc. | 265 | 3,021 | ||||||
EMC Insurance Group, Inc. | 114 | 3,002 | ||||||
Resource America, Inc. — Class A | 301 | 2,998 | ||||||
Roma Financial Corp. | 185 | 2,971 | ||||||
Farmers National Banc Corp. | 470 | 2,966 | ||||||
Stellus Capital Investment Corp. | 200 | 2,964 | ||||||
Donegal Group, Inc. — Class A | 194 | 2,962 | ||||||
Heritage Financial Group, Inc. | 200 | 2,896 | ||||||
Peoples Federal Bancshares, Inc. | 151 | 2,884 | ||||||
BSB Bancorp, Inc.* | 207 | 2,859 | ||||||
Heritage Oaks Bancorp* | 500 | 2,850 | ||||||
Horizon Technology Finance Corp. | 194 | 2,834 | ||||||
Century Bancorp, Inc. — Class A | 83 | 2,815 | ||||||
Harris & Harris Group, Inc.* | 780 | 2,808 | ||||||
Tree.com, Inc. | 151 | 2,792 | ||||||
Fidelity Southern Corp.* | 242 | 2,783 | ||||||
JMP Group, Inc. | 399 | 2,757 | ||||||
ESSA Bancorp, Inc. | 246 | 2,667 | ||||||
Asset Acceptance Capital Corp.* | 392 | 2,642 | ||||||
Clifton Savings Bancorp, Inc. | 211 | 2,629 | ||||||
Cape Bancorp, Inc. | 280 | 2,565 | ||||||
Enterprise Bancorp, Inc. | 150 | 2,543 | ||||||
Middleburg Financial Corp. | 129 | 2,504 | ||||||
Regional Management Corp.* | 120 | 2,424 | ||||||
FNB United Corp.* | 247 | 2,411 | ||||||
OFS Capital Corp. | 170 | 2,380 | ||||||
TCP Capital Corp. | 146 | 2,330 | ||||||
Asta Funding, Inc. | 241 | 2,314 | ||||||
Hingham Institution for Savings | 33 | 2,300 | ||||||
Gyrodyne Company of America, Inc. | 31 | 2,279 | ||||||
Universal Insurance Holdings, Inc. | 468 | 2,270 | ||||||
Doral Financial Corp.* | 3,219 | 2,268 | ||||||
NASB Financial, Inc.* | 107 | 2,252 | ||||||
Investors Title Co. | 31 | 2,141 | ||||||
Artio Global Investors, Inc. — Class A | 774 | 2,105 | ||||||
AmREIT, Inc. — Class B | 106 | 2,063 |
SEE NOTES TO FINANCIAL STATEMENTS. | THE RYDEX FUNDS ANNUAL REPORT | 65 |
SCHEDULE OF INVESTMENTS (continued) | March 28, 2013 |
RUSSELL 2000® 2x STRATEGY FUND |
Shares | Value | |||||||
Independence Holding Co. | 202 | $ | 2,056 | |||||
Charter Financial Corp. | 159 | 2,034 | ||||||
MicroFinancial, Inc. | 207 | 1,745 | ||||||
Gain Capital Holdings, Inc. | 375 | 1,673 | ||||||
Pzena Investment Management, Inc. — Class A | 240 | 1,560 | ||||||
Pacific Mercantile Bancorp* | 264 | 1,544 | ||||||
Waterstone Financial, Inc.* | 184 | 1,522 | ||||||
First Marblehead Corp.* | 1,452 | 1,467 | ||||||
Fortegra Financial Corp.* | 163 | 1,428 | ||||||
CIFC Corp.* | 148 | 1,218 | ||||||
Cascade Bancorp* | 151 | 1,021 | ||||||
Berkshire Bancorp, Inc. | 109 | 910 | ||||||
California First National Bancorp | 52 | 899 | ||||||
First Federal Bancshares of Arkansas, Inc.* | 82 | 820 | ||||||
Crescent Financial Bancshares, Inc.* | 70 | 276 | ||||||
Total Financials | 7,799,381 | |||||||
INFORMATION TECHNOLOGY - 9.8% | ||||||||
CommVault Systems, Inc.* | 1,113 | 91,243 | ||||||
CoStar Group, Inc.* | 701 | 76,730 | ||||||
PTC, Inc.* | 2,993 | 76,291 | ||||||
WEX, Inc.* | 969 | 76,067 | ||||||
Aspen Technology, Inc.* | 2,343 | 75,654 | ||||||
Cymer, Inc.* | 772 | 74,188 | ||||||
Aruba Networks, Inc.* | 2,800 | 69,272 | ||||||
Ultimate Software Group, Inc.* | 662 | 68,954 | ||||||
MAXIMUS, Inc. | 851 | 68,054 | ||||||
FEI Co. | 949 | 61,257 | ||||||
Semtech Corp.* | 1,643 | 58,145 | ||||||
3D Systems Corp.*,1 | 1,760 | 56,742 | ||||||
ValueClick, Inc.* | 1,878 | 55,495 | ||||||
QLIK Technologies, Inc.* | 2,139 | 55,250 | ||||||
Microsemi Corp.* | 2,227 | 51,599 | ||||||
Anixter International, Inc. | 710 | 49,642 | ||||||
InterDigital, Inc. | 1,022 | 48,882 | ||||||
Arris Group, Inc.* | 2,834 | 48,660 | ||||||
ACI Worldwide, Inc.* | 994 | 48,567 | ||||||
Cavium, Inc.* | 1,248 | 48,435 | ||||||
Hittite Microwave Corp.* | 791 | 47,903 | ||||||
Plantronics, Inc. | 1,063 | 46,974 | ||||||
Convergys Corp. | 2,730 | 46,492 | ||||||
Tyler Technologies, Inc.* | 755 | 46,251 | ||||||
Verint Systems, Inc.* | 1,262 | 46,126 | ||||||
ViaSat, Inc.* | 941 | 45,582 | ||||||
j2 Global, Inc. | 1,162 | 45,562 | ||||||
Cognex Corp. | 1,069 | 45,058 | ||||||
Sourcefire, Inc.* | 738 | 43,712 | ||||||
Mentor Graphics Corp. | 2,332 | 42,093 | ||||||
First Solar, Inc.* | 1,510 | 40,710 | ||||||
Ciena Corp.* | 2,487 | 39,817 | ||||||
Fair Isaac Corp. | 862 | 39,385 | ||||||
Acxiom Corp.* | 1,918 | 39,126 | ||||||
TiVo, Inc.* | 3,117 | 38,620 | ||||||
Manhattan Associates, Inc.* | 506 | 37,591 | ||||||
Sapient Corp.* | 3,080 | 37,545 | ||||||
Veeco Instruments, Inc.* | 973 | 37,295 | ||||||
RF Micro Devices, Inc.* | 6,968 | 37,070 | ||||||
Littelfuse, Inc. | 544 | 36,910 | ||||||
Cirrus Logic, Inc.* | 1,618 | 36,810 | ||||||
International Rectifier Corp.* | 1,730 | 36,590 | ||||||
MKS Instruments, Inc. | 1,314 | 35,741 | ||||||
OpenTable, Inc.* | 566 | 35,647 | ||||||
Synaptics, Inc.* | 841 | 34,219 | ||||||
Entegris, Inc.* | 3,432 | 33,840 | ||||||
Coherent, Inc. | 596 | 33,817 | ||||||
Blackbaud, Inc. | 1,129 | 33,452 | ||||||
Euronet Worldwide, Inc.* | 1,269 | 33,425 | ||||||
VistaPrint N.V.*,1 | 860 | 33,248 | ||||||
Progress Software Corp.* | 1,448 | 32,985 | ||||||
CACI International, Inc. — Class A* | 564 | 32,639 | ||||||
Heartland Payment Systems, Inc. | 970 | 31,981 | ||||||
NETGEAR, Inc.* | 950 | 31,835 | ||||||
Take-Two Interactive Software, Inc.* | 1,961 | 31,670 | ||||||
ADTRAN, Inc. | 1,594 | 31,322 | ||||||
Dealertrack Technologies, Inc.* | 1,063 | 31,231 | ||||||
OSI Systems, Inc.* | 498 | 31,020 | ||||||
Power Integrations, Inc. | 713 | 30,951 | ||||||
NIC, Inc. | 1,614 | 30,924 | ||||||
WebMD Health Corp. — Class A* | 1,270 | 30,886 | ||||||
Cardtronics, Inc.* | 1,103 | 30,288 | ||||||
Finisar Corp.* | 2,285 | 30,139 | ||||||
Electronics for Imaging, Inc.* | 1,160 | 29,418 | ||||||
Universal Display Corp.* | 992 | 29,155 | ||||||
Cornerstone OnDemand, Inc.* | 843 | 28,746 | ||||||
Intersil Corp. — Class A | 3,190 | 27,785 | ||||||
Bottomline Technologies de, Inc.* | 941 | 26,828 | ||||||
Integrated Device Technology, Inc.* | 3,561 | 26,601 | ||||||
QLogic Corp.* | 2,280 | 26,448 | ||||||
Syntel, Inc. | 387 | 26,130 | ||||||
Benchmark Electronics, Inc.* | 1,447 | 26,076 | ||||||
Ultratech, Inc.* | 656 | 25,932 | ||||||
MEMC Electronic Materials, Inc.* | 5,780 | 25,432 | ||||||
SS&C Technologies Holdings, Inc.* | 844 | 25,303 | ||||||
Unisys Corp.* | 1,095 | 24,911 | ||||||
Tessera Technologies, Inc. | 1,296 | 24,300 | ||||||
SYNNEX Corp.* | 655 | 24,235 | ||||||
MTS Systems Corp. | 406 | 23,609 | ||||||
Sanmina Corp.* | 2,042 | 23,197 | ||||||
Insight Enterprises, Inc.* | 1,111 | 22,909 | ||||||
Ixia* | 1,056 | 22,852 | ||||||
NetScout Systems, Inc.* | 917 | 22,531 | ||||||
Advent Software, Inc.* | 791 | 22,124 | ||||||
Monotype Imaging Holdings, Inc. | 914 | 21,708 | ||||||
Cray, Inc.* | 926 | 21,492 | ||||||
Synchronoss Technologies, Inc.* | 692 | 21,473 | ||||||
TriQuint Semiconductor, Inc.* | 4,218 | 21,301 | ||||||
Plexus Corp.* | 874 | 21,247 | ||||||
MicroStrategy, Inc. — Class A* | 210 | 21,227 | ||||||
Cabot Microelectronics Corp.* | 591 | 20,537 | ||||||
VirnetX Holding Corp.* | 1,054 | 20,205 | ||||||
Badger Meter, Inc. | 367 | 19,642 | ||||||
ScanSource, Inc.* | 691 | 19,500 | ||||||
Guidewire Software, Inc.* | 507 | 19,489 | ||||||
Rofin-Sinar Technologies, Inc.* | 710 | 19,234 | ||||||
Infinera Corp.*,1 | 2,744 | 19,208 |
66 | The Rydex Funds Annual Report | See Notes To Financial Statements. |
SCHEDULE OF INVESTMENTS (continued) | March 28, 2013 |
RUSSELL 2000® 2x STRATEGY FUND |
Shares | Value | |||||||
Rogers Corp.* | 403 | $ | 19,191 | |||||
Tellabs, Inc. | 9,170 | 19,165 | ||||||
ExlService Holdings, Inc.* | 580 | 19,070 | ||||||
LivePerson, Inc.* | 1,382 | 18,768 | ||||||
Diodes, Inc.* | 891 | 18,693 | ||||||
Monolithic Power Systems, Inc. | 763 | 18,594 | ||||||
RealPage, Inc.*,1 | 892 | 18,473 | ||||||
FARO Technologies, Inc.* | 422 | 18,311 | ||||||
Advanced Energy Industries, Inc.* | 997 | 18,245 | ||||||
BroadSoft, Inc.* | 686 | 18,158 | ||||||
OmniVision Technologies, Inc.* | 1,309 | 18,038 | ||||||
CSG Systems International, Inc.* | 851 | 18,033 | ||||||
ATMI, Inc.* | 798 | 17,899 | ||||||
Angie’s List, Inc.* | 886 | 17,507 | ||||||
Liquidity Services, Inc.* | 586 | 17,469 | ||||||
Harmonic, Inc.* | 2,941 | 17,028 | ||||||
Brooks Automation, Inc. | 1,662 | 16,919 | ||||||
Loral Space & Communications, Inc. | 273 | 16,893 | ||||||
Interactive Intelligence Group, Inc.* | 372 | 16,498 | ||||||
Newport Corp.* | 956 | 16,176 | ||||||
Lattice Semiconductor Corp.* | 2,949 | 16,072 | ||||||
Sykes Enterprises, Inc.* | 974 | 15,545 | ||||||
Rambus, Inc.* | 2,763 | 15,500 | ||||||
Spansion, Inc. — Class A* | 1,204 | 15,495 | ||||||
ManTech International Corp. — Class A | 576 | 15,477 | ||||||
Blucora, Inc.* | 998 | 15,449 | ||||||
Monster Worldwide, Inc.* | 3,034 | 15,382 | ||||||
Comverse, Inc.* | 544 | 15,254 | ||||||
Ellie Mae, Inc.* | 633 | 15,224 | ||||||
iGATE Corp.* | 806 | 15,161 | ||||||
Measurement Specialties, Inc.* | 380 | 15,113 | ||||||
Web.com Group, Inc.* | 881 | 15,047 | ||||||
PROS Holdings, Inc.* | 545 | 14,808 | ||||||
comScore, Inc.* | 881 | 14,783 | ||||||
Intermec, Inc.* | 1,503 | 14,774 | ||||||
EarthLink, Inc. | 2,661 | 14,423 | ||||||
Emulex Corp.* | 2,169 | 14,164 | ||||||
Websense, Inc.* | 936 | 14,040 | ||||||
Sonus Networks, Inc.* | 5,322 | 13,784 | ||||||
Bankrate, Inc.* | 1,152 | 13,755 | ||||||
United Online, Inc. | 2,266 | 13,664 | ||||||
Accelrys, Inc.* | 1,387 | 13,537 | ||||||
RealD, Inc.*,1 | 1,037 | 13,481 | ||||||
SPS Commerce, Inc.* | 311 | 13,270 | ||||||
Checkpoint Systems, Inc.* | 1,013 | 13,230 | ||||||
Park Electrochemical Corp. | 521 | 13,202 | ||||||
Digital River, Inc.* | 919 | 12,995 | ||||||
Micrel, Inc. | 1,215 | 12,770 | ||||||
Internap Network Services Corp.* | 1,327 | 12,407 | ||||||
TeleTech Holdings, Inc.* | 575 | 12,196 | ||||||
Applied Micro Circuits Corp.* | 1,638 | 12,154 | ||||||
Pegasystems, Inc. | 427 | 11,990 | ||||||
Methode Electronics, Inc. | 930 | 11,978 | ||||||
Move, Inc.* | 984 | 11,759 | ||||||
Global Cash Access Holdings, Inc.* | 1,642 | 11,576 | ||||||
Ebix, Inc. | 711 | 11,532 | ||||||
SunPower Corp. — Class A* | 999 | 11,528 | ||||||
Virtusa Corp.* | 470 | 11,167 | ||||||
EPIQ Systems, Inc. | 790 | 11,084 | ||||||
Forrester Research, Inc. | 350 | 11,078 | ||||||
Silicon Graphics International Corp.* | 798 | 10,973 | ||||||
Cass Information Systems, Inc. | 260 | 10,930 | ||||||
Comtech Telecommunications Corp. | 447 | 10,853 | ||||||
SciQuest, Inc.* | 451 | 10,842 | ||||||
Dice Holdings, Inc.* | 1,056 | 10,697 | ||||||
LogMeIn, Inc.* | 555 | 10,667 | ||||||
Silicon Image, Inc.* | 2,088 | 10,148 | ||||||
TTM Technologies, Inc.* | 1,335 | 10,146 | ||||||
Photronics, Inc.* | 1,513 | 10,107 | ||||||
Constant Contact, Inc.* | 760 | 9,865 | ||||||
Exar Corp.* | 931 | 9,776 | ||||||
InvenSense, Inc. — Class A* | 913 | 9,751 | ||||||
GT Advanced Technologies, Inc.*,1 | 2,962 | 9,745 | ||||||
PDF Solutions, Inc.* | 605 | 9,692 | ||||||
MoneyGram International, Inc.* | 535 | 9,684 | ||||||
CalAmp Corp.* | 880 | 9,654 | ||||||
Rudolph Technologies, Inc.* | 807 | 9,506 | ||||||
Daktronics, Inc. | 899 | 9,440 | ||||||
Imperva, Inc.* | 244 | 9,394 | ||||||
Tangoe, Inc.* | 751 | 9,305 | ||||||
Perficient, Inc.* | 798 | 9,305 | ||||||
Envestnet, Inc.* | 522 | 9,140 | ||||||
Black Box Corp. | 417 | 9,095 | ||||||
Volterra Semiconductor Corp.* | 637 | 9,045 | ||||||
Ceva, Inc.* | 577 | 9,001 | ||||||
Entropic Communications, Inc.* | 2,202 | 8,962 | ||||||
CTS Corp. | 856 | 8,937 | ||||||
ServiceSource International, Inc.*,1 | 1,245 | 8,802 | ||||||
Electro Rent Corp. | 470 | 8,714 | ||||||
CIBER, Inc.* | 1,826 | 8,582 | ||||||
Seachange International, Inc.* | 718 | 8,537 | ||||||
Stamps.com, Inc.* | 340 | 8,490 | ||||||
Nanometrics, Inc.* | 583 | 8,413 | ||||||
Super Micro Computer, Inc.* | 727 | 8,208 | ||||||
Immersion Corp.* | 699 | 8,206 | ||||||
Computer Task Group, Inc. | 381 | 8,150 | ||||||
Fabrinet* | 556 | 8,123 | ||||||
Calix, Inc.* | 983 | 8,011 | ||||||
Responsys, Inc.* | 898 | 7,947 | ||||||
Extreme Networks* | 2,355 | 7,936 | ||||||
Oplink Communications, Inc.* | 473 | 7,757 | ||||||
DTS, Inc.* | 462 | 7,683 | ||||||
Quantum Corp.* | 5,870 | 7,514 | ||||||
Actuate Corp.* | 1,238 | 7,428 | ||||||
Amkor Technology, Inc.*,1 | 1,850 | 7,400 | ||||||
LTX-Credence Corp.* | 1,222 | 7,381 | ||||||
Vocus, Inc.* | 516 | 7,301 | ||||||
KEMET Corp.* | 1,125 | 7,031 | ||||||
Parkervision, Inc.* | 1,900 | 6,973 | ||||||
Power-One, Inc.* | 1,680 | 6,972 | ||||||
Globecomm Systems, Inc.* | 575 | 6,906 | ||||||
NVE Corp.* | 119 | 6,714 | ||||||
XO Group, Inc.* | 653 | 6,530 | ||||||
Demand Media, Inc.* | 750 | 6,473 | ||||||
Anaren, Inc.* | 328 | 6,360 | ||||||
Electro Scientific Industries, Inc. | 571 | 6,310 |
See Notes to Financial Statements. | THE Rydex FUNDS annual report | 67 |
SCHEDULE OF INVESTMENTS (continued) | March 28, 2013 |
RUSSELL 2000® 2x STRATEGY FUND |
Shares | Value | |||||||
Integrated Silicon Solution, Inc.* | 683 | $ | 6,263 | |||||
GSI Group, Inc.* | 734 | 6,261 | ||||||
Kopin Corp.* | 1,671 | 6,183 | ||||||
Jive Software, Inc.* | 401 | 6,095 | ||||||
Zygo Corp.* | 410 | 6,072 | ||||||
Inphi Corp.* | 581 | 6,071 | ||||||
Higher One Holdings, Inc.* | 682 | 6,063 | ||||||
VASCO Data Security International, Inc.* | 707 | 5,967 | ||||||
Saba Software, Inc.* | 747 | 5,939 | ||||||
IXYS Corp. | 616 | 5,907 | ||||||
IntraLinks Holdings, Inc.* | 915 | 5,819 | ||||||
FormFactor, Inc.* | 1,238 | 5,819 | ||||||
Digi International, Inc.* | 649 | 5,796 | ||||||
Mercury Systems, Inc.* | 777 | 5,726 | ||||||
Procera Networks, Inc.* | 477 | 5,672 | ||||||
Supertex, Inc. | 255 | 5,664 | ||||||
Cohu, Inc. | 605 | 5,663 | ||||||
ExactTarget, Inc.* | 240 | 5,585 | ||||||
Keynote Systems, Inc. | 393 | 5,486 | ||||||
Lionbridge Technologies, Inc.* | 1,410 | 5,457 | ||||||
Zix Corp.* | 1,523 | 5,452 | ||||||
FleetMatics Group plc* | 220 | 5,335 | ||||||
Trulia, Inc.* | 170 | 5,335 | ||||||
Aviat Networks, Inc.* | 1,533 | 5,166 | ||||||
PLX Technology, Inc.* | 1,119 | 5,103 | ||||||
support.com, Inc.* | 1,217 | 5,087 | ||||||
Market Leader, Inc.* | 556 | 4,982 | ||||||
KVH Industries, Inc.* | 366 | 4,967 | ||||||
American Software, Inc. — Class A | 591 | 4,917 | ||||||
Yelp, Inc. — Class A* | 207 | 4,908 | ||||||
QuinStreet, Inc.* | 822 | 4,907 | ||||||
Unwired Planet, Inc.* | 2,168 | 4,813 | ||||||
ePlus, Inc. | 103 | 4,760 | ||||||
Symmetricom, Inc.* | 1,043 | 4,735 | ||||||
Avid Technology, Inc.* | 750 | 4,703 | ||||||
Datalink Corp.* | 378 | 4,566 | ||||||
Vishay Precision Group, Inc.* | 310 | 4,554 | ||||||
Ultra Clean Holdings* | 690 | 4,485 | ||||||
Infoblox, Inc.* | 204 | 4,427 | ||||||
Ruckus Wireless, Inc.* | 210 | 4,410 | ||||||
ShoreTel, Inc.* | 1,208 | 4,385 | ||||||
DSP Group, Inc.* | 543 | 4,382 | ||||||
RealNetworks, Inc.* | 550 | 4,241 | ||||||
Telular Corp. | 419 | 4,215 | ||||||
Demandware, Inc.* | 166 | 4,208 | ||||||
Bel Fuse, Inc. — Class B | 266 | 4,152 | ||||||
Active Network, Inc.* | 974 | 4,081 | ||||||
Rosetta Stone, Inc.* | 265 | 4,076 | ||||||
PRGX Global, Inc.* | 585 | 4,066 | ||||||
Glu Mobile, Inc.* | 1,352 | 4,029 | ||||||
Sigma Designs, Inc.* | 826 | 4,023 | ||||||
Pericom Semiconductor Corp.* | 590 | 4,018 | ||||||
Digimarc Corp. | 181 | 3,977 | ||||||
Callidus Software, Inc.* | 869 | 3,971 | ||||||
MoSys, Inc.* | 840 | 3,956 | ||||||
Guidance Software, Inc.* | 362 | 3,928 | ||||||
STEC, Inc.* | 887 | 3,921 | ||||||
Maxwell Technologies, Inc.* | 727 | 3,919 | ||||||
Aeroflex Holding Corp.* | 498 | 3,914 | ||||||
Travelzoo, Inc.* | 181 | 3,868 | ||||||
Alpha & Omega Semiconductor Ltd.* | 429 | 3,810 | ||||||
Richardson Electronics Ltd. | 317 | 3,760 | ||||||
Numerex Corp. — Class A* | 293 | 3,747 | ||||||
PC Connection, Inc. | 225 | 3,679 | ||||||
Agilysys, Inc.* | 369 | 3,668 | ||||||
Intermolecular, Inc.* | 351 | 3,580 | ||||||
ANADIGICS, Inc.* | 1,762 | 3,524 | ||||||
MaxLinear, Inc. — Class A* | 558 | 3,460 | ||||||
Multi-Fineline Electronix, Inc.* | 221 | 3,410 | ||||||
GSI Technology, Inc.* | 511 | 3,367 | ||||||
Axcelis Technologies, Inc.* | 2,693 | 3,366 | ||||||
Ubiquiti Networks, Inc. | 243 | 3,334 | ||||||
ModusLink Global Solutions, Inc.* | 990 | 3,267 | ||||||
PC-Telephone, Inc. | 457 | 3,245 | ||||||
Neonode, Inc.* | 560 | 3,231 | ||||||
Mesa Laboratories, Inc. | 60 | 3,179 | ||||||
Pervasive Software, Inc.* | 334 | 3,063 | ||||||
Carbonite, Inc.* | 278 | 3,044 | ||||||
OCZ Technology Group, Inc.*,1 | 1,690 | 3,042 | ||||||
Key Tronic Corp.* | 263 | 3,014 | ||||||
Mindspeed Technologies, Inc.* | 904 | 3,010 | ||||||
Imation Corp.* | 775 | 2,961 | ||||||
Limelight Networks, Inc.* | 1,418 | 2,921 | ||||||
Tessco Technologies, Inc. | 130 | 2,813 | ||||||
Radisys Corp.* | 571 | 2,809 | ||||||
Hackett Group, Inc. | 613 | 2,801 | ||||||
EPAM Systems, Inc.* | 120 | 2,788 | ||||||
Rubicon Technology, Inc.* | 421 | 2,779 | ||||||
AVG Technologies N.V.* | 199 | 2,770 | ||||||
Intevac, Inc.* | 579 | 2,733 | ||||||
QuickLogic Corp.* | 1,106 | 2,721 | ||||||
Qualys, Inc.* | 220 | 2,715 | ||||||
Telenav, Inc.* | 420 | 2,709 | ||||||
Proofpoint, Inc.* | 158 | 2,664 | ||||||
iPass, Inc.* | 1,300 | 2,574 | ||||||
NeoPhotonics Corp.* | 490 | 2,504 | ||||||
M/A-COM Technology Solutions | ||||||||
Holdings, Inc.* | 150 | 2,411 | ||||||
Marchex, Inc. — Class B | 567 | 2,387 | ||||||
AXT, Inc.* | 811 | 2,384 | ||||||
Ambarella, Inc.* | 150 | 2,349 | ||||||
Echelon Corp.* | 950 | 2,318 | ||||||
Audience, Inc.* | 152 | 2,318 | ||||||
E2open, Inc.* | 116 | 2,313 | ||||||
Westell Technologies, Inc. — Class A* | 1,148 | 2,307 | ||||||
Oclaro, Inc.*,1 | 1,823 | 2,297 | ||||||
FalconStor Software, Inc.* | 789 | 2,115 | ||||||
Spark Networks, Inc.* | 291 | 2,049 | ||||||
Mattson Technology, Inc.* | 1,460 | 2,015 | ||||||
QAD, Inc. — Class A | 155 | 1,990 | ||||||
Innodata, Inc.* | 560 | 1,932 | ||||||
Bazaarvoice, Inc.* | 261 | 1,911 | ||||||
TechTarget, Inc.* | 384 | 1,878 | ||||||
Sapiens International Corporation N.V. | 340 | 1,850 | ||||||
Millennial Media, Inc.* | 290 | 1,842 | ||||||
Riverbed Technology, Inc.* | 112 | 1,670 |
68 | the Rydex FUNDS annual report | See Notes to Financial Statements. |
SCHEDULE OF INVESTMENTS (continued) | March 28, 2013 |
RUSSELL 2000® 2x STRATEGY FUND |
Shares | Value | |||||||
STR Holdings, Inc.* | 753 | $ | 1,634 | |||||
Peregrine Semiconductor Corp.* | 157 | 1,534 | ||||||
Exa Corp.* | 155 | 1,476 | ||||||
Aware, Inc. | 306 | 1,417 | ||||||
Viasystems Group, Inc.* | 95 | 1,239 | ||||||
Mattersight Corp.* | 257 | 1,103 | ||||||
MeetMe, Inc.* | 461 | 1,051 | ||||||
Brightcove, Inc.* | 150 | 932 | ||||||
Synacor, Inc.* | 172 | 514 | ||||||
Envivio, Inc.* | 195 | 332 | ||||||
KIT Digital, Inc.* | 592 | 172 | ||||||
Ambient Corp.* | 70 | 172 | ||||||
Sycamore Networks, Inc. | 359 | 133 | ||||||
Total Information Technology | 5,505,439 | |||||||
INDUSTRIALS - 9.1% | ||||||||
Alaska Air Group, Inc.* | 1,780 | 113,848 | ||||||
Genesee & Wyoming, Inc. — Class A* | 1,111 | 103,445 | ||||||
Avis Budget Group, Inc.* | 2,657 | 73,944 | ||||||
Acuity Brands, Inc. | 1,061 | 73,581 | ||||||
Teledyne Technologies, Inc.* | 923 | 72,400 | ||||||
Hexcel Corp.* | 2,495 | 72,380 | ||||||
AO Smith Corp. | 971 | 71,437 | ||||||
Middleby Corp.* | 469 | 71,359 | ||||||
EMCOR Group, Inc. | 1,670 | 70,790 | ||||||
US Airways Group, Inc.* | 4,063 | 68,949 | ||||||
Woodward, Inc. | 1,726 | 68,626 | ||||||
Old Dominion Freight Line, Inc.* | 1,779 | 67,957 | ||||||
CLARCOR, Inc. | 1,258 | 65,894 | ||||||
Watsco, Inc. | 732 | 61,619 | ||||||
Chart Industries, Inc.* | 744 | 59,527 | ||||||
Belden, Inc. | 1,135 | 58,623 | ||||||
Esterline Technologies Corp.* | 765 | 57,911 | ||||||
HEICO Corp. | 1,322 | 57,388 | ||||||
Actuant Corp. — Class A | 1,822 | 55,790 | ||||||
EnerSys, Inc.* | 1,198 | 54,605 | ||||||
Deluxe Corp. | 1,276 | 52,827 | ||||||
Moog, Inc. — Class A* | 1,134 | 51,971 | ||||||
USG Corp.* | 1,851 | 48,940 | ||||||
Corporate Executive Board Co. | 837 | 48,681 | ||||||
Tetra Tech, Inc.* | 1,584 | 48,297 | ||||||
Applied Industrial Technologies, Inc. | 1,057 | 47,565 | ||||||
Beacon Roofing Supply, Inc.* | 1,175 | 45,426 | ||||||
Advisory Board Co.* | 863 | 45,325 | ||||||
Healthcare Services Group, Inc. | 1,680 | 43,059 | ||||||
Brady Corp. — Class A | 1,224 | 41,041 | ||||||
Curtiss-Wright Corp. | 1,174 | 40,738 | ||||||
HNI Corp. | 1,139 | 40,423 | ||||||
Herman Miller, Inc. | 1,460 | 40,398 | ||||||
JetBlue Airways Corp.* | 5,849 | 40,358 | ||||||
MasTec, Inc.* | 1,371 | 39,965 | ||||||
FTI Consulting, Inc.* | 1,049 | 39,505 | ||||||
Franklin Electric Company, Inc. | 1,174 | 39,411 | ||||||
Barnes Group, Inc. | 1,354 | 39,171 | ||||||
United Stationers, Inc. | 1,013 | 39,152 | ||||||
DigitalGlobe, Inc.* | 1,333 | 38,537 | ||||||
Acacia Research Corp.* | 1,242 | 37,471 | ||||||
AMERCO | 213 | 36,964 | ||||||
Hub Group, Inc. — Class A* | 924 | 35,538 | ||||||
Mine Safety Appliances Co. | 693 | 34,387 | ||||||
Watts Water Technologies, Inc. — Class A | 701 | 33,641 | ||||||
Brink’s Co. | 1,182 | 33,403 | ||||||
TAL International Group, Inc. | 728 | 32,986 | ||||||
Allegiant Travel Co. — Class A | 371 | 32,937 | ||||||
UniFirst Corp. | 359 | 32,490 | ||||||
Granite Construction, Inc. | 972 | 30,948 | ||||||
AZZ, Inc. | 636 | 30,655 | ||||||
Raven Industries, Inc. | 912 | 30,652 | ||||||
Simpson Manufacturing Company, Inc. | 997 | 30,518 | ||||||
Briggs & Stratton Corp. | 1,218 | 30,206 | ||||||
ABM Industries, Inc. | 1,340 | 29,802 | ||||||
Interface, Inc. — Class A | 1,471 | 28,273 | ||||||
RBC Bearings, Inc.* | 559 | 28,263 | ||||||
Mobile Mini, Inc.* | 959 | 28,223 | ||||||
Swift Transportation Co. — Class A* | 1,980 | 28,076 | ||||||
Steelcase, Inc. — Class A | 1,900 | 27,987 | ||||||
Lindsay Corp. | 314 | 27,690 | ||||||
ESCO Technologies, Inc. | 666 | 27,213 | ||||||
On Assignment, Inc.* | 1,071 | 27,108 | ||||||
Forward Air Corp. | 725 | 27,035 | ||||||
Atlas Air Worldwide Holdings, Inc.* | 657 | 26,779 | ||||||
Werner Enterprises, Inc. | 1,107 | 26,723 | ||||||
Mueller Industries, Inc. | 499 | 26,592 | ||||||
Spirit Airlines, Inc.* | 1,046 | 26,527 | ||||||
EnPro Industries, Inc.* | 518 | 26,506 | ||||||
Trimas Corp.* | 810 | 26,301 | ||||||
Titan International, Inc. | 1,191 | 25,106 | ||||||
Orbital Sciences Corp.* | 1,477 | 24,651 | ||||||
Knight Transportation, Inc. | 1,446 | 23,281 | ||||||
Kaman Corp. | 656 | 23,268 | ||||||
Mueller Water Products, Inc. — Class A | 3,918 | 23,234 | ||||||
Huron Consulting Group, Inc.* | 572 | 23,063 | ||||||
Tennant Co. | 471 | 22,872 | ||||||
Aegion Corp. — Class A* | 985 | 22,803 | ||||||
II-VI, Inc.* | 1,319 | 22,476 | ||||||
Generac Holdings, Inc. | 621 | 21,946 | ||||||
Knoll, Inc. | 1,199 | 21,738 | ||||||
TrueBlue, Inc.* | 1,012 | 21,394 | ||||||
G&K Services, Inc. — Class A | 469 | 21,344 | ||||||
Korn/Ferry International* | 1,193 | 21,307 | ||||||
SkyWest, Inc. | 1,273 | 20,432 | ||||||
Team, Inc.* | 497 | 20,412 | ||||||
Apogee Enterprises, Inc. | 705 | 20,410 | ||||||
Kaydon Corp. | 797 | 20,387 | ||||||
Aircastle Ltd. | 1,472 | 20,137 | ||||||
Rush Enterprises, Inc. — Class A* | 830 | 20,020 | ||||||
Albany International Corp. — Class A | 690 | 19,941 | ||||||
GenCorp, Inc.* | 1,490 | 19,817 | ||||||
Universal Forest Products, Inc. | 489 | 19,467 | ||||||
McGrath RentCorp | 616 | 19,158 | ||||||
ACCO Brands Corp.* | 2,833 | 18,924 | ||||||
AAR Corp. | 1,009 | 18,556 | ||||||
Trex Company, Inc.* | 376 | 18,492 | ||||||
CIRCOR International, Inc. | 435 | 18,488 | ||||||
Altra Holdings, Inc. | 670 | 18,237 | ||||||
Exponent, Inc. | 334 | 18,016 |
See Notes to Financial Statements. | THE Rydex FUNDS annual report | 69 |
SCHEDULE OF INVESTMENTS (continued) | March 28, 2013 |
RUSSELL 2000® 2x STRATEGY FUND |
Shares | Value | |||||||
Astec Industries, Inc. | 500 | $ | 17,465 | |||||
Wabash National Corp.* | 1,706 | 17,333 | ||||||
Tutor Perini Corp.* | 898 | 17,331 | ||||||
Standex International Corp. | 313 | 17,284 | ||||||
Sauer-Danfoss, Inc. | 294 | 17,178 | ||||||
Cubic Corp. | 400 | 17,088 | ||||||
Navigant Consulting, Inc.* | 1,295 | 17,016 | ||||||
Sun Hydraulics Corp. | 514 | 16,710 | ||||||
Primoris Services Corp. | 750 | 16,583 | ||||||
Dycom Industries, Inc.* | 838 | 16,500 | ||||||
Blount International, Inc.* | 1,222 | 16,350 | ||||||
Insperity, Inc. | 568 | 16,114 | ||||||
Heartland Express, Inc. | 1,204 | 16,061 | ||||||
DXP Enterprises, Inc.* | 215 | 16,061 | ||||||
Hyster-Yale Materials Handling, Inc. | 273 | 15,586 | ||||||
Rexnord Corp.* | 721 | 15,307 | ||||||
Quad/Graphics, Inc. | 634 | 15,178 | ||||||
John Bean Technologies Corp. | 727 | 15,085 | ||||||
Quanex Building Products Corp. | 921 | 14,828 | ||||||
H&E Equipment Services, Inc. | 720 | 14,688 | ||||||
Saia, Inc.* | 405 | 14,649 | ||||||
Encore Wire Corp. | 417 | 14,603 | ||||||
Republic Airways Holdings, Inc.* | 1,215 | 14,021 | ||||||
Gibraltar Industries, Inc.* | 766 | 13,980 | ||||||
Nortek, Inc.* | 195 | 13,915 | ||||||
Viad Corp. | 503 | 13,913 | ||||||
Textainer Group Holdings Ltd. | 347 | 13,724 | ||||||
ICF International, Inc.* | 499 | 13,573 | ||||||
Griffon Corp. | 1,135 | 13,529 | ||||||
Resources Connection, Inc. | 1,063 | 13,500 | ||||||
Comfort Systems USA, Inc. | 939 | 13,231 | ||||||
Greenbrier Companies, Inc.* | 568 | 12,899 | ||||||
AAON, Inc. | 467 | 12,885 | ||||||
American Science & Engineering, Inc. | 208 | 12,686 | ||||||
Federal Signal Corp.* | 1,556 | 12,666 | ||||||
Kelly Services, Inc. — Class A | 674 | 12,590 | ||||||
MYR Group, Inc.* | 510 | 12,526 | ||||||
US Ecology, Inc. | 458 | 12,160 | ||||||
InnerWorkings, Inc.* | 795 | 12,036 | ||||||
Powell Industries, Inc.* | 227 | 11,933 | ||||||
Kforce, Inc. | 721 | 11,803 | ||||||
Titan Machinery, Inc.* | 421 | 11,683 | ||||||
Gorman-Rupp Co. | 382 | 11,479 | ||||||
Meritor, Inc.* | 2,412 | 11,409 | ||||||
American Railcar Industries, Inc. | 233 | 10,890 | ||||||
EnerNOC, Inc.* | 618 | 10,735 | ||||||
Layne Christensen Co.* | 497 | 10,626 | ||||||
Celadon Group, Inc. | 501 | 10,451 | ||||||
CAI International, Inc.* | 361 | 10,404 | ||||||
Taser International, Inc.* | 1,290 | 10,256 | ||||||
LB Foster Co. — Class A | 228 | 10,098 | ||||||
Great Lakes Dredge & Dock Corp. | 1,480 | 9,960 | ||||||
KEYW Holding Corp.* | 617 | 9,952 | ||||||
Ennis, Inc. | 656 | 9,886 | ||||||
National Presto Industries, Inc. | 119 | 9,580 | ||||||
Barrett Business Services, Inc. | 179 | 9,426 | ||||||
Mistras Group, Inc.* | 388 | 9,393 | ||||||
Columbus McKinnon Corp.* | 483 | 9,298 | ||||||
Astronics Corp.* | 303 | 9,035 | ||||||
GP Strategies Corp.* | 372 | 8,876 | ||||||
Multi-Color Corp. | 334 | 8,614 | ||||||
Roadrunner Transportation Systems, Inc.* | 360 | 8,280 | ||||||
Thermon Group Holdings, Inc.* | 371 | 8,240 | ||||||
American Woodmark Corp.* | 241 | 8,201 | ||||||
Standard Parking Corp.* | 393 | 8,135 | ||||||
Echo Global Logistics, Inc.* | 366 | 8,096 | ||||||
Marten Transport Ltd. | 394 | 7,931 | ||||||
NCI Building Systems, Inc.* | 454 | 7,886 | ||||||
Aerovironment, Inc.* | 431 | 7,814 | ||||||
Air Transport Services Group, Inc.* | 1,334 | 7,777 | ||||||
Douglas Dynamics, Inc. | 549 | 7,587 | ||||||
Global Power Equipment Group, Inc. | 430 | 7,577 | ||||||
Aceto Corp. | 676 | 7,483 | ||||||
RPX Corp.* | 529 | 7,464 | ||||||
Arkansas Best Corp. | 639 | 7,464 | ||||||
EnergySolutions, Inc.* | 1,983 | 7,436 | ||||||
Hawaiian Holdings, Inc.* | 1,281 | 7,379 | ||||||
Kadant, Inc.* | 295 | 7,375 | ||||||
XPO Logistics, Inc.* | 437 | 7,359 | ||||||
Kimball International, Inc. — Class B | 811 | 7,348 | ||||||
Park-Ohio Holdings Corp.* | 221 | 7,322 | ||||||
Insteel Industries, Inc. | 446 | 7,279 | ||||||
Consolidated Graphics, Inc.* | 184 | 7,194 | ||||||
Orion Marine Group, Inc.* | 680 | 6,759 | ||||||
Heidrick & Struggles International, Inc. | 451 | 6,742 | ||||||
Capstone Turbine Corp.* | 7,476 | 6,728 | ||||||
Builders FirstSource, Inc.* | 1,128 | 6,610 | ||||||
FreightCar America, Inc. | 302 | 6,590 | ||||||
Lydall, Inc.* | 426 | 6,539 | ||||||
Northwest Pipe Co.* | 231 | 6,463 | ||||||
Wesco Aircraft Holdings, Inc.* | 438 | 6,447 | ||||||
Pendrell Corp.* | 3,875 | 6,433 | ||||||
Alamo Group, Inc. | 168 | 6,426 | ||||||
Accuride Corp.* | 1,183 | 6,376 | ||||||
Furmanite Corp.* | 937 | 6,269 | ||||||
SeaCube Container Leasing Ltd. | 273 | 6,268 | ||||||
Graham Corp. | 253 | 6,259 | ||||||
Pike Electric Corp. | 427 | 6,076 | ||||||
CBIZ, Inc.* | 950 | 6,061 | ||||||
Odyssey Marine Exploration, Inc.* | 1,832 | 5,972 | ||||||
Proto Labs, Inc.* | 121 | 5,941 | ||||||
CRA International, Inc.* | 264 | 5,906 | ||||||
CDI Corp. | 342 | 5,882 | ||||||
Dynamic Materials Corp. | 336 | 5,846 | ||||||
Houston Wire & Cable Co. | 450 | 5,828 | ||||||
Twin Disc, Inc. | 216 | 5,417 | ||||||
Michael Baker Corp. | 219 | 5,366 | ||||||
Kratos Defense & Security Solutions, Inc.* | 1,005 | 5,055 | ||||||
Franklin Covey Co.* | 345 | 5,013 | ||||||
Commercial Vehicle Group, Inc.* | 610 | 4,758 | ||||||
Flow International Corp.* | 1,202 | 4,700 | ||||||
LMI Aerospace, Inc.* | 226 | 4,699 | ||||||
WageWorks, Inc.* | 180 | 4,505 | ||||||
Quality Distribution, Inc.* | 534 | 4,491 | ||||||
Pacer International, Inc.* | 880 | 4,426 | ||||||
Sterling Construction Company, Inc.* | 404 | 4,400 |
70 | the Rydex FUNDS annual report | See Notes to Financial Statements. |
SCHEDULE OF INVESTMENTS (continued) | March 28, 2013 |
Russell 2000® 2x Strategy Fund |
Shares | Value | |||||||
Miller Industries, Inc. | 274 | $ | 4,398 | |||||
Patriot Transportation Holding, Inc.* | 157 | 4,368 | ||||||
Hurco Companies, Inc.* | 158 | 4,302 | ||||||
TMS International Corp. — Class A* | 322 | 4,250 | ||||||
Casella Waste Systems, Inc. — Class A* | 939 | 4,103 | ||||||
Energy Recovery, Inc.* | 1,098 | 4,063 | ||||||
NN, Inc.* | 425 | 4,021 | ||||||
Hardinge, Inc. | 294 | 4,007 | ||||||
Ampco-Pittsburgh Corp. | 210 | 3,971 | ||||||
Preformed Line Products Co. | 55 | 3,848 | ||||||
Met-Pro Corp. | 372 | 3,843 | ||||||
Ameresco, Inc. — Class A* | 502 | 3,715 | ||||||
Swisher Hygiene, Inc.* | 2,823 | 3,642 | ||||||
Argan, Inc. | 242 | 3,608 | ||||||
FuelCell Energy, Inc.*,1 | 3,792 | 3,579 | ||||||
Courier Corp. | 240 | 3,458 | ||||||
LSI Industries, Inc. | 490 | 3,420 | ||||||
PGT, Inc.* | 490 | 3,366 | ||||||
Coleman Cable, Inc. | 222 | 3,330 | ||||||
Acorn Energy, Inc. | 450 | 3,308 | ||||||
Universal Truckload Services, Inc.* | 141 | 3,290 | ||||||
Hudson Global, Inc.* | 833 | 3,282 | ||||||
Schawk, Inc. — Class A | 298 | 3,275 | ||||||
AT Cross Co. — Class A* | 237 | 3,263 | ||||||
PMFG, Inc.* | 523 | 3,227 | ||||||
Cenveo, Inc.* | 1,355 | 2,913 | ||||||
Heritage-Crystal Clean, Inc.* | 192 | 2,899 | ||||||
Performant Financial Corp.* | 226 | 2,775 | ||||||
ARC Document Solutions, Inc.* | 917 | 2,733 | ||||||
Edgen Group, Inc. — Class A* | 376 | 2,718 | ||||||
Rand Logistics, Inc.* | 440 | 2,695 | ||||||
American Superconductor Corp.* | 976 | 2,596 | ||||||
Eastern Co. | 148 | 2,596 | ||||||
International Shipholding Corp. | 140 | 2,548 | ||||||
TRC Companies, Inc.* | 383 | 2,470 | ||||||
VSE Corp. | 98 | 2,449 | ||||||
Vicor Corp.* | 492 | 2,445 | ||||||
CECO Environmental Corp. | 182 | 2,353 | ||||||
BlueLinx Holdings, Inc.* | 825 | 2,351 | ||||||
Genco Shipping & Trading Ltd.* | 783 | 2,255 | ||||||
Intersections, Inc. | 228 | 2,145 | ||||||
Willis Lease Finance Corp.* | 135 | 2,041 | ||||||
API Technologies Corp.* | 809 | 2,006 | ||||||
NL Industries, Inc. | 160 | 1,989 | ||||||
Dolan Co.* | 767 | 1,833 | ||||||
Hill International, Inc.* | 572 | 1,710 | ||||||
Metalico, Inc.* | 999 | 1,618 | ||||||
Patrick Industries, Inc.* | 98 | 1,544 | ||||||
CPI Aerostructures, Inc.* | 163 | 1,397 | ||||||
Enphase Energy, Inc.* | 198 | 1,228 | ||||||
Omega Flex, Inc. | 71 | 1,220 | ||||||
Sypris Solutions, Inc. | 262 | 1,095 | ||||||
SIFCO Industries, Inc. | 58 | 1,068 | ||||||
Astronics Corp. — Class B* | 20 | 588 | ||||||
Compx International, Inc. | 32 | 405 | ||||||
Total Industrials | 5,120,251 | |||||||
Consumer Discretionary - 8.2% | ||||||||
Brunswick Corp. | 2,233 | 76,413 | ||||||
Domino’s Pizza, Inc. | 1,451 | 74,638 | ||||||
Cabela’s, Inc.* | 1,169 | 71,053 | ||||||
Six Flags Entertainment Corp. | 933 | 67,624 | ||||||
Dana Holding Corp. | 3,699 | 65,954 | ||||||
Sotheby’s | 1,693 | 63,334 | ||||||
Tenneco, Inc.* | 1,521 | 59,791 | ||||||
Pool Corp. | 1,185 | 56,880 | ||||||
Fifth & Pacific Companies, Inc.* | 3,003 | 56,696 | ||||||
Vail Resorts, Inc. | 904 | 56,337 | ||||||
Pier 1 Imports, Inc. | 2,433 | 55,959 | ||||||
Rent-A-Center, Inc. — Class A | 1,485 | 54,856 | ||||||
Wolverine World Wide, Inc. | 1,218 | 54,043 | ||||||
Cheesecake Factory, Inc. | 1,349 | 52,084 | ||||||
HSN, Inc. | 894 | 49,045 | ||||||
Lumber Liquidators Holdings, Inc.* | 693 | 48,663 | ||||||
Lions Gate Entertainment Corp.* | 1,987 | 47,231 | ||||||
Ryland Group, Inc. | 1,116 | 46,447 | ||||||
Iconix Brand Group, Inc.* | 1,779 | 46,022 | ||||||
Life Time Fitness, Inc.* | 1,073 | 45,903 | ||||||
KB Home | 2,071 | 45,086 | ||||||
Live Nation Entertainment, Inc.* | 3,503 | 43,332 | ||||||
Steven Madden Ltd.* | 986 | 42,536 | ||||||
Men’s Wearhouse, Inc. | 1,270 | 42,443 | ||||||
Coinstar, Inc.*,1 | 700 | 40,894 | ||||||
Buffalo Wild Wings, Inc.* | 464 | 40,614 | ||||||
Express, Inc.* | 2,244 | 39,966 | ||||||
Cooper Tire & Rubber Co. | 1,555 | 39,901 | ||||||
Shutterfly, Inc.* | 890 | 39,312 | ||||||
Cracker Barrel Old Country Store, Inc. | 485 | 39,212 | ||||||
Jack in the Box, Inc.* | 1,111 | 38,429 | ||||||
Hibbett Sports, Inc.* | 661 | 37,195 | ||||||
Genesco, Inc.* | 611 | 36,715 | ||||||
Vitamin Shoppe, Inc.* | 738 | 36,051 | ||||||
Meritage Homes Corp.* | 769 | 36,035 | ||||||
Penske Automotive Group, Inc. | 1,062 | 35,428 | ||||||
ANN, Inc.* | 1,219 | 35,375 | ||||||
MDC Holdings, Inc. | 955 | 35,001 | ||||||
Hillenbrand, Inc. | 1,377 | 34,811 | ||||||
WMS Industries, Inc.* | 1,380 | 34,790 | ||||||
Meredith Corp.1 | 909 | 34,779 | ||||||
Group 1 Automotive, Inc. | 574 | 34,480 | ||||||
New York Times Co. — Class A* | 3,409 | 33,408 | ||||||
Crocs, Inc.* | 2,247 | 33,301 | ||||||
Buckle, Inc. | 691 | 32,235 | ||||||
Texas Roadhouse, Inc. — Class A | 1,563 | 31,557 | ||||||
Saks, Inc.* | 2,750 | 31,543 | ||||||
Bob Evans Farms, Inc. | 730 | 31,113 | ||||||
Arbitron, Inc. | 661 | 30,980 | ||||||
Monro Muffler Brake, Inc.1 | 770 | 30,577 | ||||||
Helen of Troy Ltd.* | 790 | 30,304 | ||||||
Valassis Communications, Inc.1 | 996 | 29,751 | ||||||
Marriott Vacations Worldwide Corp.* | 670 | 28,750 | ||||||
Select Comfort Corp.* | 1,418 | 28,034 | ||||||
Jos. A. Bank Clothiers, Inc.* | 701 | 27,970 | ||||||
Office Depot, Inc.* | 7,103 | 27,915 |
See Notes to Financial Statements. | THE Rydex FUNDS annual report | 71 |
SCHEDULE OF INVESTMENTS (continued) | March 28, 2013 |
Russell 2000® 2x Strategy Fund |
Shares | Value | |||||||
Papa John’s International, Inc.* | 448 | $ | 27,695 | |||||
Aeropostale, Inc.* | 2,035 | 27,676 | ||||||
Children’s Place Retail Stores, Inc.* | 604 | 27,071 | ||||||
DineEquity, Inc. | 382 | 26,278 | ||||||
Regis Corp. | 1,441 | 26,212 | ||||||
Ascent Capital Group, Inc. — Class A* | 351 | 26,128 | ||||||
Jones Group, Inc. | 2,053 | 26,113 | ||||||
Lithia Motors, Inc. — Class A | 540 | 25,639 | ||||||
Asbury Automotive Group, Inc.* | 697 | 25,573 | ||||||
Sinclair Broadcast Group, Inc. — Class A | 1,263 | 25,564 | ||||||
Grand Canyon Education, Inc.* | 996 | 25,287 | ||||||
OfficeMax, Inc. | 2,167 | 25,159 | ||||||
Francesca’s Holdings Corp.*,1 | 873 | 25,020 | ||||||
Standard Pacific Corp.*,1 | 2,893 | 24,996 | ||||||
Finish Line, Inc. — Class A | 1,271 | 24,899 | ||||||
Matthews International Corp. — Class A | 710 | 24,772 | ||||||
La-Z-Boy, Inc. | 1,291 | 24,361 | ||||||
Sturm Ruger & Company, Inc. | 475 | 24,097 | ||||||
Orient-Express Hotels Ltd. — Class A* | 2,424 | 23,901 | ||||||
Sonic Automotive, Inc. — Class A | 1,068 | 23,667 | ||||||
Belo Corp. — Class A | 2,343 | 23,032 | ||||||
American Axle & Manufacturing Holdings, Inc.* | 1,669 | 22,782 | ||||||
Dorman Products, Inc. | 611 | 22,735 | ||||||
SHFL Entertainment, Inc.* | 1,372 | 22,734 | ||||||
International Speedway Corp. — Class A | 695 | 22,713 | ||||||
Churchill Downs, Inc. | 324 | 22,693 | ||||||
AFC Enterprises, Inc.* | 609 | 22,125 | ||||||
National CineMedia, Inc. | 1,399 | 22,076 | ||||||
Ameristar Casinos, Inc. | 827 | 21,692 | ||||||
Pinnacle Entertainment, Inc.* | 1,478 | 21,608 | ||||||
Krispy Kreme Doughnuts, Inc.* | 1,488 | 21,487 | ||||||
Interval Leisure Group, Inc. | 974 | 21,175 | ||||||
BJ’s Restaurants, Inc.* | 615 | 20,467 | ||||||
Skechers U.S.A., Inc. — Class A* | 947 | 20,029 | ||||||
Ethan Allen Interiors, Inc. | 606 | 19,950 | ||||||
Quiksilver, Inc.* | 3,270 | 19,849 | ||||||
Stage Stores, Inc. | 765 | 19,798 | ||||||
Oxford Industries, Inc. | 355 | 18,851 | ||||||
Sonic Corp.* | 1,426 | 18,367 | ||||||
Steiner Leisure Ltd.* | 377 | 18,232 | ||||||
Columbia Sportswear Co.1 | 309 | 17,885 | ||||||
iRobot Corp.* | 692 | 17,757 | ||||||
Drew Industries, Inc. | 482 | 17,501 | ||||||
Stewart Enterprises, Inc. — Class A | 1,868 | 17,354 | ||||||
Scholastic Corp. | 648 | 17,269 | ||||||
Brown Shoe Company, Inc. | 1,071 | 17,136 | ||||||
True Religion Apparel, Inc. | 648 | 16,919 | ||||||
G-III Apparel Group Ltd.* | 418 | 16,766 | ||||||
Red Robin Gourmet Burgers, Inc.* | 365 | 16,644 | ||||||
Cato Corp. — Class A | 685 | 16,536 | ||||||
K12, Inc.* | 672 | 16,202 | ||||||
American Public Education, Inc.* | 449 | 15,666 | ||||||
Pep Boys-Manny Moe & Jack* | 1,324 | 15,610 | ||||||
Conn’s, Inc.* | 425 | 15,258 | ||||||
Hovnanian Enterprises, Inc. — Class A* | 2,634 | 15,198 | ||||||
Winnebago Industries, Inc.* | 727 | 15,005 | ||||||
CEC Entertainment, Inc. | 457 | 14,967 | ||||||
Movado Group, Inc. | 441 | 14,782 | ||||||
Hot Topic, Inc. | 1,057 | 14,671 | ||||||
Smith & Wesson Holding Corp.* | 1,627 | 14,643 | ||||||
Caesars Entertainment Corp.* | 919 | 14,575 | ||||||
Core-Mark Holding Company, Inc. | 282 | 14,469 | ||||||
Strayer Education, Inc. | 299 | 14,466 | ||||||
Multimedia Games Holding Company, Inc.* | 681 | 14,212 | ||||||
Denny’s Corp.* | 2,404 | 13,871 | ||||||
Standard Motor Products, Inc. | 497 | 13,777 | ||||||
Arctic Cat, Inc.* | 313 | 13,678 | ||||||
M/I Homes, Inc.* | 534 | 13,056 | ||||||
American Greetings Corp. — Class A | 792 | 12,751 | ||||||
Zumiez, Inc.* | 552 | 12,641 | ||||||
Fred’s, Inc. — Class A | 919 | 12,572 | ||||||
Gentherm, Inc.* | 735 | 12,039 | ||||||
Vera Bradley, Inc.*,1 | 501 | 11,839 | ||||||
Ruby Tuesday, Inc.* | 1,600 | 11,792 | ||||||
Barnes & Noble, Inc.* | 712 | 11,712 | ||||||
Biglari Holdings, Inc.* | 31 | 11,569 | ||||||
Boyd Gaming Corp.*,1 | 1,389 | 11,487 | ||||||
Scientific Games Corp. — Class A* | 1,305 | 11,419 | ||||||
rue21, Inc.* | 385 | 11,315 | ||||||
Tumi Holdings, Inc.* | 540 | 11,308 | ||||||
Blue Nile, Inc.* | 315 | 10,852 | ||||||
Fiesta Restaurant Group, Inc.* | 408 | 10,841 | ||||||
Callaway Golf Co. | 1,631 | 10,797 | ||||||
LeapFrog Enterprises, Inc. — Class A* | 1,260 | 10,786 | ||||||
Superior Industries International, Inc. | 575 | 10,741 | ||||||
Modine Manufacturing Co.* | 1,171 | 10,656 | ||||||
Five Below, Inc.* | 280 | 10,609 | ||||||
MDC Partners, Inc. — Class A | 642 | 10,381 | ||||||
Maidenform Brands, Inc.* | 584 | 10,238 | ||||||
Libbey, Inc.* | 518 | 10,013 | ||||||
Capella Education Co.* | 321 | 9,996 | ||||||
Haverty Furniture Companies, Inc. | 476 | 9,787 | ||||||
Beazer Homes USA, Inc.* | 615 | 9,742 | ||||||
Mattress Firm Holding Corp.* | 273 | 9,429 | ||||||
America’s Car-Mart, Inc.* | 195 | 9,114 | ||||||
EW Scripps Co. — Class A* | 748 | 8,998 | ||||||
Harte-Hanks, Inc. | 1,111 | 8,655 | ||||||
Universal Electronics, Inc.* | 369 | 8,580 | ||||||
Fisher Communications, Inc. | 218 | 8,554 | ||||||
Cavco Industries, Inc.* | 177 | 8,420 | ||||||
Ruth’s Hospitality Group, Inc.* | 881 | 8,405 | ||||||
RadioShack Corp.1 | 2,490 | 8,366 | ||||||
LIN TV Corp. — Class A* | 761 | 8,363 | ||||||
Carriage Services, Inc. — Class A | 392 | 8,330 | ||||||
Bloomin’ Brands, Inc.* | 459 | 8,202 | ||||||
Tuesday Morning Corp.* | 1,046 | 8,117 | ||||||
Carmike Cinemas, Inc.* | 440 | 7,973 | ||||||
Destination Maternity Corp. | 336 | 7,862 | ||||||
Bravo Brio Restaurant Group, Inc.* | 484 | 7,662 | ||||||
Shoe Carnival, Inc. | 354 | 7,236 | ||||||
NACCO Industries, Inc. — Class A | 133 | 7,097 | ||||||
MarineMax, Inc.* | 507 | 6,890 |
72 | the Rydex FUNDS annual report | See Notes to Financial Statements. |
SCHEDULE OF INVESTMENTS (continued) | March 28, 2013 |
Russell 2000® 2x Strategy Fund |
Shares | Value | |||||||
Wet Seal, Inc. — Class A* | 2,264 | $ | 6,837 | |||||
PetMed Express, Inc. | 508 | 6,815 | ||||||
Unifi, Inc.* | 355 | 6,781 | ||||||
Journal Communications, Inc. — Class A* | 1,008 | 6,774 | ||||||
Universal Technical Institute, Inc. | 528 | 6,669 | ||||||
Big 5 Sporting Goods Corp. | 417 | 6,509 | ||||||
CSS Industries, Inc. | 240 | 6,233 | ||||||
Fuel Systems Solutions, Inc.* | 371 | 6,110 | ||||||
NutriSystem, Inc. | 708 | 6,004 | ||||||
World Wrestling Entertainment, Inc. — Class A | 680 | 5,998 | ||||||
Shutterstock, Inc.* | 130 | 5,847 | ||||||
Marcus Corp. | 461 | 5,758 | ||||||
Stein Mart, Inc. | 686 | 5,749 | ||||||
JAKKS Pacific, Inc. | 547 | 5,738 | ||||||
Chuy’s Holdings, Inc.* | 170 | 5,539 | ||||||
Jamba, Inc.* | 1,936 | 5,518 | ||||||
Town Sports International Holdings, Inc. | 577 | 5,458 | ||||||
Perry Ellis International, Inc. | 298 | 5,421 | ||||||
Saga Communications, Inc. — Class A | 116 | 5,366 | ||||||
Destination XL Group, Inc.* | 1,054 | 5,365 | ||||||
Stoneridge, Inc.* | 696 | 5,310 | ||||||
Speedway Motorsports, Inc. | 295 | 5,307 | ||||||
Exide Technologies* | 1,956 | 5,281 | ||||||
Cumulus Media, Inc. — Class A* | 1,545 | 5,207 | ||||||
Rentrak Corp.* | 232 | 5,099 | ||||||
Nexstar Broadcasting Group, Inc. — Class A | 281 | 5,058 | ||||||
VOXX International Corp. — Class A* | 459 | 4,916 | ||||||
Restoration Hardware Holdings, Inc.* | 140 | 4,900 | ||||||
Black Diamond, Inc.* | 528 | 4,810 | ||||||
Zagg, Inc.* | 640 | 4,659 | ||||||
Blyth, Inc. | 264 | 4,583 | ||||||
Entercom Communications Corp. — Class A* | 610 | 4,538 | ||||||
Spartan Motors, Inc. | 844 | 4,482 | ||||||
Digital Generation, Inc.* | 692 | 4,450 | ||||||
Bridgepoint Education, Inc.* | 434 | 4,440 | ||||||
Bassett Furniture Industries, Inc. | 277 | 4,421 | ||||||
West Marine, Inc.* | 380 | 4,343 | ||||||
LifeLock, Inc.* | 450 | 4,334 | ||||||
Hooker Furniture Corp. | 269 | 4,288 | ||||||
Steinway Musical Instruments, Inc.* | 177 | 4,252 | ||||||
McClatchy Co. — Class A* | 1,454 | 4,217 | ||||||
Corinthian Colleges, Inc.* | 1,962 | 4,120 | ||||||
Bon-Ton Stores, Inc. | 314 | 4,082 | ||||||
Entravision Communications Corp. — Class A | 1,269 | 4,048 | ||||||
Weyco Group, Inc. | 163 | 3,995 | ||||||
Vitacost.com, Inc.* | 550 | 3,977 | ||||||
hhgregg, Inc.* | 356 | 3,934 | ||||||
Kirkland’s, Inc.* | 341 | 3,908 | ||||||
Central European Media Enterprises Ltd. — Class A* | 916 | 3,866 | ||||||
Mac-Gray Corp. | 301 | 3,853 | ||||||
bebe stores, Inc. | 923 | 3,849 | ||||||
Body Central Corp.* | 408 | 3,835 | ||||||
ReachLocal, Inc.* | 255 | 3,815 | ||||||
Citi Trends, Inc.* | 372 | 3,806 | ||||||
Luby’s, Inc.* | 500 | 3,740 | ||||||
Overstock.com, Inc.* | 295 | 3,634 | ||||||
Kayak Software Corp.* | 90 | 3,596 | ||||||
Global Sources Ltd.* | 471 | 3,561 | ||||||
Bluegreen Corp.* | 360 | 3,542 | ||||||
Culp, Inc. | 221 | 3,516 | ||||||
Johnson Outdoors, Inc. — Class A* | 144 | 3,433 | ||||||
Lincoln Educational Services Corp. | 570 | 3,340 | ||||||
Isle of Capri Casinos, Inc.* | 526 | 3,309 | ||||||
Morgans Hotel Group Co.* | 557 | 3,297 | ||||||
Orbitz Worldwide, Inc.* | 575 | 3,283 | ||||||
Winmark Corp. | 52 | 3,275 | ||||||
Outdoor Channel Holdings, Inc. | 367 | 3,274 | ||||||
1-800-Flowers.com, Inc. — Class A* | 653 | 3,245 | ||||||
K-Swiss, Inc. — Class A* | 657 | 3,114 | ||||||
Career Education Corp.* | 1,300 | 3,081 | ||||||
Delta Apparel, Inc.* | 180 | 2,965 | ||||||
Nathan’s Famous, Inc.* | 70 | 2,958 | ||||||
RG Barry Corp. | 219 | 2,932 | ||||||
Tilly’s, Inc. — Class A* | 229 | 2,913 | ||||||
Cherokee, Inc. | 207 | 2,836 | ||||||
Flexsteel Industries, Inc. | 114 | 2,820 | ||||||
New York & Company, Inc.* | 685 | 2,802 | ||||||
Federal-Mogul Corp.* | 458 | 2,762 | ||||||
Systemax, Inc. | 278 | 2,752 | ||||||
Lifetime Brands, Inc. | 238 | 2,716 | ||||||
Gordmans Stores, Inc.* | 213 | 2,494 | ||||||
Red Lion Hotels Corp.* | 346 | 2,460 | ||||||
Education Management Corp.* | 665 | 2,441 | ||||||
Del Frisco’s Restaurant Group, Inc.* | 147 | 2,440 | ||||||
Ignite Restaurant Group, Inc.* | 163 | 2,393 | ||||||
Reading International, Inc. — Class A* | 419 | 2,346 | ||||||
Einstein Noah Restaurant Group, Inc. | 154 | 2,284 | ||||||
Skullcandy, Inc.* | 408 | 2,154 | ||||||
Monarch Casino & Resort, Inc.* | 218 | 2,121 | ||||||
Daily Journal Corp.* | 19 | 2,109 | ||||||
Salem Communications Corp. — Class A | 256 | 2,030 | ||||||
Tower International, Inc.* | 143 | 2,002 | ||||||
Carrols Restaurant Group, Inc.* | 380 | 1,972 | ||||||
MTR Gaming Group, Inc.* | 566 | 1,868 | ||||||
Marine Products Corp. | 251 | 1,847 | ||||||
Martha Stewart Living Omnimedia — Class A* | 697 | 1,840 | ||||||
Crown Media Holdings, Inc. — Class A* | 865 | 1,773 | ||||||
Premier Exhibitions, Inc.* | 644 | 1,713 | ||||||
Geeknet, Inc.* | 112 | 1,654 | ||||||
Collectors Universe, Inc. | 138 | 1,624 | ||||||
Shiloh Industries, Inc. | 147 | 1,583 | ||||||
Frisch’s Restaurants, Inc. | 80 | 1,435 | ||||||
National American University Holdings, Inc. | 249 | 971 | ||||||
Perfumania Holdings, Inc.* | 124 | 714 | ||||||
CafePress, Inc.* | 115 | 691 |
See Notes to Financial Statements. | THE Rydex FUNDS annual report | 73 |
SCHEDULE OF INVESTMENTS (continued) | March 28, 2013 |
Russell 2000® 2x Strategy Fund |
Shares | Value | |||||||
Beasley Broadcasting Group, Inc. — Class A | 106 | $ | 625 | |||||
US Auto Parts Network, Inc.* | 373 | 448 | ||||||
Value Line, Inc. | 34 | 320 | ||||||
Orchard Supply Hardware Stores Corp. — Class A* | 45 | 178 | ||||||
Total Consumer Discretionary | 4,623,006 | |||||||
Health Care - 7.3% | ||||||||
Pharmacyclics, Inc.* | 1,365 | 109,759 | ||||||
athenahealth, Inc.* | 900 | 87,337 | ||||||
Seattle Genetics, Inc.* | 2,382 | 84,584 | ||||||
Cubist Pharmaceuticals, Inc.* | 1,584 | 74,163 | ||||||
Alkermes plc* | 3,066 | 72,695 | ||||||
HealthSouth Corp.* | 2,389 | 62,997 | ||||||
Cepheid, Inc.* | 1,641 | 62,965 | ||||||
WellCare Health Plans, Inc.* | 1,077 | 62,423 | ||||||
Align Technology, Inc.* | 1,798 | 60,251 | ||||||
STERIS Corp. | 1,446 | 60,169 | ||||||
PAREXEL International Corp.* | 1,504 | 59,422 | ||||||
HMS Holdings Corp.* | 2,156 | 58,536 | ||||||
Jazz Pharmaceuticals plc* | 1,035 | 57,866 | ||||||
Centene Corp.* | 1,289 | 56,768 | ||||||
West Pharmaceutical Services, Inc. | 844 | 54,809 | ||||||
Haemonetics Corp.* | 1,264 | 52,658 | ||||||
Owens & Minor, Inc. | 1,590 | 51,771 | ||||||
Air Methods Corp. | 959 | 46,263 | ||||||
Medicines Co.* | 1,381 | 46,153 | ||||||
Arena Pharmaceuticals, Inc.*,1 | 5,433 | 44,605 | ||||||
Questcor Pharmaceuticals, Inc.1 | 1,350 | 43,929 | ||||||
Isis Pharmaceuticals, Inc.* | 2,509 | 42,502 | ||||||
MWI Veterinary Supply, Inc.* | 315 | 41,662 | ||||||
ViroPharma, Inc.* | 1,650 | 41,514 | ||||||
Chemed Corp. | 485 | 38,790 | ||||||
Theravance, Inc.* | 1,515 | 35,784 | ||||||
Ironwood Pharmaceuticals, Inc. — Class A* | 1,877 | 34,330 | ||||||
Infinity Pharmaceuticals, Inc.* | 708 | 34,317 | ||||||
Insulet Corp.* | 1,305 | 33,748 | ||||||
ImmunoGen, Inc.*,1 | 2,086 | 33,501 | ||||||
Alnylam Pharmaceuticals, Inc.* | 1,374 | 33,484 | ||||||
Magellan Health Services, Inc.* | 681 | 32,395 | ||||||
Acorda Therapeutics, Inc.* | 1,006 | 32,222 | ||||||
Cyberonics, Inc.* | 687 | 32,158 | ||||||
Medidata Solutions, Inc.* | 551 | 31,947 | ||||||
Nektar Therapeutics* | 2,869 | 31,559 | ||||||
HeartWare International, Inc.* | 355 | 31,393 | ||||||
Volcano Corp.* | 1,336 | 29,739 | ||||||
Neogen Corp.* | 587 | 29,098 | ||||||
DexCom, Inc.* | 1,717 | 28,708 | ||||||
Aegerion Pharmaceuticals, Inc.* | 701 | 28,278 | ||||||
MedAssets, Inc.* | 1,459 | 28,086 | ||||||
Vivus, Inc.*,1 | 2,497 | 27,467 | ||||||
Hanger, Inc.* | 854 | 26,927 | ||||||
Amsurg Corp. — Class A* | 793 | 26,677 | ||||||
Wright Medical Group, Inc.* | 1,101 | 26,215 | ||||||
Impax Laboratories, Inc.* | 1,680 | 25,939 | ||||||
Team Health Holdings, Inc.* | 713 | 25,939 | ||||||
Abaxis, Inc. | 541 | 25,600 | ||||||
PDL BioPharma, Inc.1 | 3,501 | 25,592 | ||||||
Masimo Corp. | 1,250 | 24,525 | ||||||
Analogic Corp. | 304 | 24,022 | ||||||
CONMED Corp. | 705 | 24,012 | ||||||
ArthroCare Corp.* | 690 | 23,984 | ||||||
Santarus, Inc.* | 1,370 | 23,742 | ||||||
Meridian Bioscience, Inc. | 1,037 | 23,664 | ||||||
Celldex Therapeutics, Inc.* | 2,017 | 23,357 | ||||||
Molina Healthcare, Inc.* | 752 | 23,214 | ||||||
NuVasive, Inc.* | 1,080 | 23,015 | ||||||
Endologix, Inc.* | 1,383 | 22,335 | ||||||
NPS Pharmaceuticals, Inc.* | 2,161 | 22,021 | ||||||
Emeritus Corp.* | 772 | 21,454 | ||||||
Exelixis, Inc.*,1 | 4,587 | 21,192 | ||||||
Auxilium Pharmaceuticals, Inc.* | 1,207 | 20,857 | ||||||
Opko Health, Inc.*,1 | 2,678 | 20,433 | ||||||
Neurocrine Biosciences, Inc.* | 1,662 | 20,177 | ||||||
Akorn, Inc.* | 1,427 | 19,735 | ||||||
Acadia Healthcare Company, Inc.* | 670 | 19,691 | ||||||
Integra LifeSciences Holdings Corp.* | 489 | 19,076 | ||||||
Conceptus, Inc.* | 789 | 19,054 | ||||||
Capital Senior Living Corp.* | 709 | 18,739 | ||||||
IPC The Hospitalist Company, Inc.* | 416 | 18,504 | ||||||
InterMune, Inc.* | 2,035 | 18,417 | ||||||
ICU Medical, Inc.* | 312 | 18,392 | ||||||
Dendreon Corp.* | 3,860 | 18,258 | ||||||
Quality Systems, Inc. | 991 | 18,115 | ||||||
Greatbatch, Inc.* | 587 | 17,534 | ||||||
AMN Healthcare Services, Inc.* | 1,106 | 17,508 | ||||||
Luminex Corp.* | 1,048 | 17,313 | ||||||
Orthofix International N.V.* | 473 | 16,967 | ||||||
Quidel Corp.*,1 | 710 | 16,863 | ||||||
Bio-Reference Labs, Inc.* | 615 | 15,978 | ||||||
Omnicell, Inc.* | 843 | 15,916 | ||||||
Cantel Medical Corp. | 529 | 15,902 | ||||||
Spectranetics Corp.* | 856 | 15,862 | ||||||
Momenta Pharmaceuticals, Inc.* | 1,177 | 15,701 | ||||||
Exact Sciences Corp.* | 1,595 | 15,631 | ||||||
ABIOMED, Inc.* | 833 | 15,552 | ||||||
Synageva BioPharma Corp.* | 282 | 15,487 | ||||||
Computer Programs & Systems, Inc. | 274 | 14,826 | ||||||
NxStage Medical, Inc.* | 1,291 | 14,562 | ||||||
Ensign Group, Inc. | 434 | 14,496 | ||||||
Rigel Pharmaceuticals, Inc.* | 2,131 | 14,469 | ||||||
Keryx Biopharmaceuticals, Inc.* | 2,042 | 14,376 | ||||||
Array BioPharma, Inc.* | 2,911 | 14,322 | ||||||
Accretive Health, Inc.* | 1,408 | 14,305 | ||||||
Optimer Pharmaceuticals, Inc.* | 1,177 | 14,006 | ||||||
BioScrip, Inc.* | 1,099 | 13,968 | ||||||
Kindred Healthcare, Inc.* | 1,325 | 13,952 | ||||||
Landauer, Inc. | 241 | 13,588 | ||||||
Pacira Pharmaceuticals, Inc.* | 460 | 13,276 | ||||||
Achillion Pharmaceuticals, Inc.* | 1,489 | 13,014 | ||||||
Merit Medical Systems, Inc.* | 1,056 | 12,947 | ||||||
Halozyme Therapeutics, Inc.* | 2,243 | 12,942 |
74 | the Rydex FUNDS annual report | See Notes to Financial Statements. |
SCHEDULE OF INVESTMENTS (continued) | March 28, 2013 |
Russell 2000® 2x Strategy Fund |
Shares | Value | |||||||
AMAG Pharmaceuticals, Inc.* | 536 | $ | 12,784 | |||||
ExamWorks Group, Inc.* | 731 | 12,661 | ||||||
Sangamo Biosciences, Inc.* | 1,312 | 12,543 | ||||||
National Healthcare Corp. | 263 | 12,024 | ||||||
Sequenom, Inc.*,1 | 2,864 | 11,886 | ||||||
Vanguard Health Systems, Inc.* | 796 | 11,837 | ||||||
Ligand Pharmaceuticals, Inc. — Class B* | 435 | 11,593 | ||||||
Lexicon Pharmaceuticals, Inc.* | 5,292 | 11,537 | ||||||
Genomic Health, Inc.* | 406 | 11,482 | ||||||
MannKind Corp.* | 3,366 | 11,411 | ||||||
Orexigen Therapeutics, Inc.* | 1,818 | 11,363 | ||||||
HealthStream, Inc.* | 492 | 11,286 | ||||||
Fluidigm Corp.* | 607 | 11,236 | ||||||
Spectrum Pharmaceuticals, Inc.1 | 1,485 | 11,078 | ||||||
MAKO Surgical Corp.* | 982 | 10,949 | ||||||
Dyax Corp.* | 2,470 | 10,769 | ||||||
Symmetry Medical, Inc.* | 916 | 10,488 | ||||||
Astex Pharmaceuticals* | 2,330 | 10,392 | ||||||
Invacare Corp. | 796 | 10,388 | ||||||
PharMerica Corp.* | 735 | 10,290 | ||||||
Healthways, Inc.* | 835 | 10,229 | ||||||
Cadence Pharmaceuticals, Inc.* | 1,504 | 10,062 | ||||||
Natus Medical, Inc.* | 737 | 9,905 | ||||||
Clovis Oncology, Inc.* | 338 | 9,690 | ||||||
Dynavax Technologies Corp.* | 4,361 | 9,681 | ||||||
Antares Pharma, Inc.* | 2,681 | 9,598 | ||||||
Cambrex Corp.* | 738 | 9,439 | ||||||
AVANIR Pharmaceuticals, Inc. — Class A* | 3,398 | 9,311 | ||||||
Endocyte, Inc.* | 736 | 9,163 | ||||||
Emergent Biosolutions, Inc.* | 651 | 9,101 | ||||||
Hi-Tech Pharmacal Company, Inc. | 268 | 8,873 | ||||||
SurModics, Inc.* | 325 | 8,856 | ||||||
Cardiovascular Systems, Inc.* | 423 | 8,663 | ||||||
Synta Pharmaceuticals Corp.*,1 | 997 | 8,574 | ||||||
Obagi Medical Products, Inc.* | 433 | 8,552 | ||||||
Triple-S Management Corp. — Class B* | 487 | 8,484 | ||||||
AVEO Pharmaceuticals, Inc.* | 1,147 | 8,430 | ||||||
Amedisys, Inc.* | 754 | 8,384 | ||||||
Affymetrix, Inc.* | 1,769 | 8,350 | ||||||
Accuray, Inc.* | 1,789 | 8,301 | ||||||
Gentiva Health Services, Inc.* | 762 | 8,245 | ||||||
Depomed, Inc.* | 1,391 | 8,165 | ||||||
Cynosure, Inc. — Class A* | 310 | 8,113 | ||||||
Idenix Pharmaceuticals, Inc.* | 2,260 | 8,046 | ||||||
LHC Group, Inc.* | 373 | 8,016 | ||||||
US Physical Therapy, Inc. | 297 | 7,974 | ||||||
Select Medical Holdings Corp. | 873 | 7,857 | ||||||
Universal American Corp. | 943 | 7,855 | ||||||
XenoPort, Inc.* | 1,071 | 7,658 | ||||||
Corvel Corp.* | 154 | 7,621 | ||||||
Raptor Pharmaceutical Corp.* | 1,293 | 7,564 | ||||||
Vical, Inc.* | 1,899 | 7,558 | ||||||
Atrion Corp. | 39 | 7,488 | ||||||
Tornier N.V.* | 394 | 7,427 | ||||||
Novavax, Inc.* | 3,250 | 7,410 | ||||||
OraSure Technologies, Inc.* | 1,360 | 7,344 | ||||||
Navidea Biopharmaceuticals, Inc.* | 2,678 | 7,257 | ||||||
Five Star Quality Care, Inc.* | 1,066 | 7,132 | ||||||
XOMA Corp.* | 2,040 | 7,120 | ||||||
Furiex Pharmaceuticals, Inc.* | 187 | 7,009 | ||||||
AngioDynamics, Inc.* | 612 | 6,995 | ||||||
Repros Therapeutics, Inc.* | 424 | 6,826 | ||||||
Palomar Medical Technologies, Inc.* | 490 | 6,610 | ||||||
Vascular Solutions, Inc.* | 404 | 6,553 | ||||||
SciClone Pharmaceuticals, Inc.* | 1,421 | 6,537 | ||||||
Curis, Inc.* | 1,982 | 6,501 | ||||||
Synergy Pharmaceuticals, Inc.* | 1,030 | 6,252 | ||||||
Providence Service Corp.* | 325 | 6,009 | ||||||
Cerus Corp.* | 1,357 | 5,998 | ||||||
Assisted Living Concepts, Inc. — Class A | 487 | 5,790 | ||||||
Progenics Pharmaceuticals, Inc.* | 1,038 | 5,595 | ||||||
RTI Biologics, Inc.* | 1,399 | 5,512 | ||||||
Repligen Corp.* | 769 | 5,314 | ||||||
Trius Therapeutics, Inc.* | 765 | 5,233 | ||||||
PhotoMedex, Inc.* | 325 | 5,229 | ||||||
Threshold Pharmaceuticals, Inc.* | 1,128 | 5,200 | ||||||
Staar Surgical Co.* | 910 | 5,123 | ||||||
Unilife Corp.*,1 | 2,253 | 4,912 | ||||||
NewLink Genetics Corp.* | 387 | 4,748 | ||||||
Intercept Pharmaceuticals, Inc.* | 120 | 4,488 | ||||||
Exactech, Inc.* | 214 | 4,428 | ||||||
Anika Therapeutics, Inc.* | 299 | 4,341 | ||||||
Coronado Biosciences, Inc.* | 444 | 4,316 | ||||||
Merge Healthcare, Inc.* | 1,481 | 4,280 | ||||||
Osiris Therapeutics, Inc.* | 407 | 4,233 | ||||||
OncoGenex Pharmaceutical, Inc.* | 368 | 4,169 | ||||||
Almost Family, Inc. | 203 | 4,147 | ||||||
Sagent Pharmaceuticals, Inc.* | 236 | 4,142 | ||||||
CryoLife, Inc. | 689 | 4,141 | ||||||
Vocera Communications, Inc.* | 180 | 4,140 | ||||||
Sunesis Pharmaceuticals, Inc.* | 737 | 4,031 | ||||||
Lannett Company, Inc.* | 396 | 4,004 | ||||||
Chindex International, Inc.* | 291 | 3,998 | ||||||
Immunomedics, Inc.* | 1,654 | 3,986 | ||||||
Utah Medical Products, Inc. | 80 | 3,902 | ||||||
Rochester Medical Corp.* | 266 | 3,889 | ||||||
Cytori Therapeutics, Inc.* | 1,535 | 3,853 | ||||||
National Research Corp. | 66 | 3,831 | ||||||
Arqule, Inc.* | 1,477 | 3,825 | ||||||
Solta Medical, Inc.* | 1,717 | 3,777 | ||||||
Enzon Pharmaceuticals, Inc. | 970 | 3,686 | ||||||
Cross Country Healthcare, Inc.* | 681 | 3,616 | ||||||
AtriCure, Inc.* | 448 | 3,548 | ||||||
Geron Corp.* | 3,303 | 3,534 | ||||||
Pozen, Inc.* | 667 | 3,515 | ||||||
Harvard Bioscience, Inc.* | 621 | 3,509 | ||||||
ImmunoCellular Therapeutics Ltd.* | 1,280 | 3,507 | ||||||
Derma Sciences, Inc.* | 290 | 3,503 | ||||||
Globus Medical, Inc. — Class A* | 237 | 3,479 | ||||||
Pain Therapeutics, Inc. | 951 | 3,262 | ||||||
KYTHERA Biopharmaceuticals, Inc.* | 130 | 3,167 | ||||||
SIGA Technologies, Inc.* | 878 | 3,143 | ||||||
Skilled Healthcare Group, Inc. — Class A* | 477 | 3,134 | ||||||
Greenway Medical Technologies* | 196 | 3,116 |
See Notes to Financial Statements. | THE Rydex FUNDS annual report | 75 |
SCHEDULE OF INVESTMENTS (continued) | March 28, 2013 |
Russell 2000® 2x Strategy Fund |
Shares | Value | |||||||
ZIOPHARM Oncology, Inc.* | 1,665 | $ | 3,047 | |||||
Oncothyreon, Inc.* | 1,433 | 2,981 | ||||||
Ampio Pharmaceuticals, Inc.* | 643 | 2,939 | ||||||
Biotime, Inc.* | 762 | 2,911 | ||||||
Targacept, Inc.* | 677 | 2,898 | ||||||
Alphatec Holdings, Inc.* | 1,366 | 2,882 | ||||||
BioDelivery Sciences International, Inc.* | 670 | 2,821 | ||||||
Hansen Medical, Inc.*,1 | 1,373 | 2,760 | ||||||
Vanda Pharmaceuticals, Inc.* | 704 | 2,760 | ||||||
GTx, Inc.* | 663 | 2,751 | ||||||
Omeros Corp.* | 650 | 2,678 | ||||||
Anacor Pharmaceuticals, Inc.* | 405 | 2,616 | ||||||
Discovery Laboratories, Inc.* | 1,090 | 2,496 | ||||||
Corcept Therapeutics, Inc.* | 1,237 | 2,474 | ||||||
Zogenix, Inc.* | 1,364 | 2,455 | ||||||
TESARO, Inc.* | 110 | 2,416 | ||||||
Horizon Pharma, Inc.* | 886 | 2,401 | ||||||
Amicus Therapeutics, Inc.* | 751 | 2,381 | ||||||
Agenus, Inc.* | 611 | 2,377 | ||||||
Merrimack Pharmaceuticals, Inc.* | 378 | 2,306 | ||||||
Pacific Biosciences of California, Inc.* | 925 | 2,303 | ||||||
Hyperion Therapeutics, Inc.* | 85 | 2,195 | ||||||
Biospecifics Technologies Corp.* | 126 | 2,148 | ||||||
Rockwell Medical Technologies, Inc.* | 521 | 2,063 | ||||||
Durata Therapeutics, Inc.* | 219 | 1,971 | ||||||
ChemoCentryx, Inc.* | 140 | 1,935 | ||||||
Regulus Therapeutics, Inc.* | 240 | 1,860 | ||||||
Sucampo Pharmaceuticals, Inc. — Class A* | 274 | 1,792 | ||||||
Maxygen, Inc. | 691 | 1,665 | ||||||
Zeltiq Aesthetics, Inc.* | 419 | 1,601 | ||||||
Codexis, Inc.* | 652 | 1,558 | ||||||
Verastem, Inc.* | 156 | 1,501 | ||||||
Transcept Pharmaceuticals, Inc.* | 311 | 1,490 | ||||||
Cornerstone Therapeutics, Inc.* | 210 | 1,485 | ||||||
Cumberland Pharmaceuticals, Inc.* | 295 | 1,469 | ||||||
Ventrus Biosciences, Inc.* | 490 | 1,465 | ||||||
PDI, Inc.* | 248 | 1,463 | ||||||
BioCryst Pharmaceuticals, Inc.* | 1,227 | 1,460 | ||||||
Affymax, Inc.* | 902 | 1,254 | ||||||
Pernix Therapeutics Holdings* | 225 | 1,116 | ||||||
Cempra, Inc.* | 104 | 702 | ||||||
BG Medicine, Inc.* | 369 | 686 | ||||||
EnteroMedics, Inc.* | 672 | 672 | ||||||
Acura Pharmaceuticals, Inc.* | 303 | 645 | ||||||
Supernus Pharmaceuticals, Inc.* | 110 | 618 | ||||||
Total Health Care | 4,094,488 | |||||||
Energy - 3.6% | ||||||||
Dril-Quip, Inc.* | 1,005 | 87,605 | ||||||
Gulfport Energy Corp.* | 1,910 | 87,536 | ||||||
Oasis Petroleum, Inc.* | 2,002 | 76,216 | ||||||
Rosetta Resources, Inc.* | 1,325 | 63,044 | ||||||
Berry Petroleum Co. — Class A | 1,315 | 60,871 | ||||||
Helix Energy Solutions Group, Inc.* | 2,642 | 60,449 | ||||||
Kodiak Oil & Gas Corp.* | 6,602 | 60,012 | ||||||
Bristow Group, Inc. | 896 | 59,082 | ||||||
Lufkin Industries, Inc. | 839 | 55,701 | ||||||
SemGroup Corp. — Class A* | 1,044 | 53,996 | ||||||
Energy XXI Bermuda Ltd. | 1,970 | 53,623 | ||||||
Western Refining, Inc. | 1,436 | 50,848 | ||||||
Targa Resources Corp. | 724 | 49,203 | ||||||
Exterran Holdings, Inc.* | 1,626 | 43,902 | ||||||
McMoRan Exploration Co.* | 2,540 | 41,529 | ||||||
Hornbeck Offshore Services, Inc.* | 881 | 40,931 | ||||||
PDC Energy, Inc.* | 751 | 37,227 | ||||||
Geospace Technologies Corp.* | 318 | 34,319 | ||||||
Key Energy Services, Inc.* | 3,777 | 30,518 | ||||||
Hercules Offshore, Inc.* | 3,966 | 29,427 | ||||||
Arch Coal, Inc. | 5,310 | 28,833 | ||||||
Cloud Peak Energy, Inc.* | 1,528 | 28,696 | ||||||
Stone Energy Corp.* | 1,235 | 26,861 | ||||||
Gulfmark Offshore, Inc. — Class A | 668 | 26,025 | ||||||
Carrizo Oil & Gas, Inc.* | 989 | 25,487 | ||||||
C&J Energy Services, Inc.* | 1,112 | 25,465 | ||||||
Bill Barrett Corp.* | 1,204 | 24,405 | ||||||
Northern Oil and Gas, Inc.*,1 | 1,588 | 22,835 | ||||||
ION Geophysical Corp.* | 3,307 | 22,521 | ||||||
Halcon Resources Corp.* | 2,788 | 21,719 | ||||||
Clean Energy Fuels Corp.* | 1,657 | 21,541 | ||||||
CVR Energy, Inc. | 416 | 21,474 | ||||||
Ship Finance International Ltd. | 1,217 | 21,468 | ||||||
Newpark Resources, Inc.* | 2,251 | 20,889 | ||||||
Approach Resources, Inc.* | 833 | 20,500 | ||||||
TETRA Technologies, Inc.* | 1,944 | 19,945 | ||||||
Comstock Resources, Inc.* | 1,209 | 19,646 | ||||||
Crosstex Energy, Inc. | 1,016 | 19,568 | ||||||
Scorpio Tankers, Inc.* | 2,092 | 18,661 | ||||||
EPL Oil & Gas, Inc.* | 695 | 18,633 | ||||||
Rex Energy Corp.* | 1,085 | 17,881 | ||||||
Delek US Holdings, Inc. | 423 | 16,692 | ||||||
Forum Energy Technologies, Inc.* | 560 | 16,106 | ||||||
Swift Energy Co.* | 1,070 | 15,847 | ||||||
Forest Oil Corp.* | 2,950 | 15,517 | ||||||
Nordic American Tankers Ltd. | 1,320 | 15,246 | ||||||
Heckmann Corp.*,1 | 3,522 | 15,109 | ||||||
Magnum Hunter Resources Corp.*,1 | 3,692 | 14,805 | ||||||
Resolute Energy Corp.* | 1,205 | 13,870 | ||||||
Rentech, Inc. | 5,718 | 13,437 | ||||||
Pioneer Energy Services Corp.* | 1,551 | 12,796 | ||||||
Contango Oil & Gas Co. | 316 | 12,668 | ||||||
Parker Drilling Co.* | 2,946 | 12,609 | ||||||
W&T Offshore, Inc. | 869 | 12,340 | ||||||
PHI, Inc.* | 323 | 11,050 | ||||||
Vaalco Energy, Inc.* | 1,449 | 10,998 | ||||||
Basic Energy Services, Inc.*,1 | 776 | 10,608 | ||||||
Tesco Corp.* | 759 | 10,163 | ||||||
Goodrich Petroleum Corp.* | 649 | 10,157 | ||||||
Diamondback Energy, Inc.* | 360 | 9,662 | ||||||
Matrix Service Co.* | 644 | 9,596 | ||||||
Willbros Group, Inc.* | 977 | 9,594 | ||||||
Bonanza Creek Energy, Inc.* | 246 | 9,513 | ||||||
Vantage Drilling Co.* | 4,793 | 8,388 | ||||||
RigNet, Inc.* | 307 | 7,657 | ||||||
GasLog Ltd. | 593 | 7,626 | ||||||
Gulf Island Fabrication, Inc. | 355 | 7,476 |
76 | the Rydex FUNDS annual report | See Notes to Financial Statements. |
SCHEDULE OF INVESTMENTS (continued) | March 28, 2013 |
Russell 2000® 2x Strategy Fund |
Shares | Value | |||||||
Triangle Petroleum Corp.* | 1,107 | $ | 7,306 | |||||
Green Plains Renewable Energy, Inc.* | 619 | 7,081 | ||||||
Synergy Resources Corp.* | 981 | 6,730 | ||||||
Quicksilver Resources, Inc.* | 2,940 | 6,615 | ||||||
Clayton Williams Energy, Inc.* | 150 | 6,560 | ||||||
Solazyme, Inc.* | 823 | 6,428 | ||||||
PetroQuest Energy, Inc.* | 1,415 | 6,283 | ||||||
BPZ Resources, Inc.* | 2,620 | 5,947 | ||||||
Natural Gas Services Group, Inc.* | 307 | 5,913 | ||||||
Dawson Geophysical Co.* | 197 | 5,910 | ||||||
Sanchez Energy Corp.* | 293 | 5,837 | ||||||
Warren Resources, Inc.* | 1,791 | 5,749 | ||||||
Penn Virginia Corp. | 1,375 | 5,555 | ||||||
Mitcham Industries, Inc.* | 314 | 5,313 | ||||||
Midstates Petroleum Company, Inc.* | 600 | 5,130 | ||||||
Panhandle Oil and Gas, Inc. — Class A | 177 | 5,071 | ||||||
Knightsbridge Tankers Ltd. | 610 | 5,002 | ||||||
Abraxas Petroleum Corp.*,1 | 2,066 | 4,772 | ||||||
Uranium Energy Corp.* | 2,121 | 4,666 | ||||||
Alon USA Energy, Inc. | 239 | 4,553 | ||||||
Teekay Tankers Ltd. — Class A | 1,572 | 4,480 | ||||||
FX Energy, Inc.* | 1,326 | 4,455 | ||||||
Cal Dive International, Inc.* | 2,407 | 4,333 | ||||||
Evolution Petroleum Corp.* | 418 | 4,243 | ||||||
Bolt Technology Corp. | 219 | 3,824 | ||||||
Callon Petroleum Co.* | 987 | 3,652 | ||||||
TGC Industries, Inc. | 360 | 3,564 | ||||||
Harvest Natural Resources, Inc.* | 984 | 3,454 | ||||||
Endeavour International Corp.* | 1,168 | 3,446 | ||||||
REX American Resources Corp.* | 143 | 3,163 | ||||||
Matador Resources Co.* | 355 | 3,145 | ||||||
Westmoreland Coal Co.* | 274 | 3,113 | ||||||
KiOR, Inc. — Class A*,1 | 657 | 3,055 | ||||||
Frontline Ltd.* | 1,290 | 3,019 | ||||||
Miller Energy Resources, Inc.* | 773 | 2,868 | ||||||
Apco Oil and Gas International, Inc. | 228 | 2,827 | ||||||
Emerald Oil, Inc.* | 400 | 2,816 | ||||||
Gastar Exploration Ltd.* | 1,474 | 2,594 | ||||||
Adams Resources & Energy, Inc. | 49 | 2,499 | ||||||
Amyris, Inc.*,1 | 757 | 2,332 | ||||||
Isramco, Inc.* | 22 | 2,181 | ||||||
Uranerz Energy Corp.*,1 | 1,654 | 2,101 | ||||||
Gevo, Inc.* | 768 | 1,720 | ||||||
Crimson Exploration, Inc.* | 534 | 1,527 | ||||||
Renewable Energy Group, Inc.* | 182 | 1,400 | ||||||
Forbes Energy Services Ltd.* | 368 | 1,354 | ||||||
Saratoga Resources, Inc.* | 508 | 1,351 | ||||||
Global Geophysical Services, Inc.* | 487 | 1,193 | ||||||
ZaZa Energy Corp.* | 620 | 1,122 | ||||||
Hallador Energy Co. | 160 | 1,104 | ||||||
Ceres, Inc.* | 151 | 525 | ||||||
Total Energy | 2,057,503 | |||||||
Materials - 3.2% | ||||||||
Axiall Corp. | 1,741 | 108,220 | ||||||
Eagle Materials, Inc. | 1,227 | 81,755 | ||||||
Louisiana-Pacific Corp.* | 3,445 | 74,412 | ||||||
PolyOne Corp. | 2,492 | 60,830 | ||||||
Chemtura Corp.* | 2,474 | 53,463 | ||||||
Olin Corp. | 2,003 | 50,516 | ||||||
HB Fuller Co. | 1,250 | 48,850 | ||||||
Sensient Technologies Corp. | 1,249 | 48,823 | ||||||
Coeur d’Alene Mines Corp.* | 2,251 | 42,454 | ||||||
Worthington Industries, Inc. | 1,307 | 40,491 | ||||||
Stillwater Mining Co.* | 2,901 | 37,510 | ||||||
Minerals Technologies, Inc. | 884 | 36,695 | ||||||
Texas Industries, Inc.* | 568 | 35,846 | ||||||
Resolute Forest Products* | 2,032 | 32,877 | ||||||
Balchem Corp. | 729 | 32,032 | ||||||
Kaiser Aluminum Corp. | 485 | 31,355 | ||||||
Clearwater Paper Corp.* | 581 | 30,613 | ||||||
Schweitzer-Mauduit International, Inc. | 781 | 30,248 | ||||||
Buckeye Technologies, Inc. | 989 | 29,621 | ||||||
Innophos Holdings, Inc. | 542 | 29,572 | ||||||
SunCoke Energy, Inc.* | 1,750 | 28,577 | ||||||
Hecla Mining Co. | 7,143 | 28,215 | ||||||
KapStone Paper and Packaging Corp. | 1,014 | 28,189 | ||||||
Graphic Packaging Holding Co.* | 3,670 | 27,489 | ||||||
Stepan Co. | 421 | 26,565 | ||||||
Calgon Carbon Corp.* | 1,426 | 25,810 | ||||||
Innospec, Inc. | 576 | 25,505 | ||||||
PH Glatfelter Co. | 1,068 | 24,970 | ||||||
RTI International Metals, Inc.* | 754 | 23,893 | ||||||
A. Schulman, Inc. | 734 | 23,165 | ||||||
Koppers Holdings, Inc. | 522 | 22,957 | ||||||
Boise, Inc. | 2,511 | 21,745 | ||||||
Globe Specialty Metals, Inc. | 1,535 | 21,367 | ||||||
American Vanguard Corp. | 693 | 21,164 | ||||||
Flotek Industries, Inc.* | 1,236 | 20,209 | ||||||
Headwaters, Inc.* | 1,823 | 19,871 | ||||||
Quaker Chemical Corp. | 323 | 19,063 | ||||||
OM Group, Inc.* | 810 | 19,019 | ||||||
AMCOL International Corp. | 629 | 18,990 | ||||||
Kraton Performance Polymers, Inc.* | 808 | 18,907 | ||||||
Deltic Timber Corp. | 271 | 18,623 | ||||||
Tredegar Corp. | 606 | 17,841 | ||||||
Haynes International, Inc. | 309 | 17,088 | ||||||
Schnitzer Steel Industries, Inc. — Class A | 629 | 16,769 | ||||||
LSB Industries, Inc.* | 466 | 16,207 | ||||||
McEwen Mining, Inc.* | 5,435 | 15,544 | ||||||
Ferro Corp.* | 2,167 | 14,627 | ||||||
Materion Corp. | 506 | 14,421 | ||||||
Berry Plastics Group, Inc.* | 740 | 14,098 | ||||||
Neenah Paper, Inc. | 392 | 12,058 | ||||||
Horsehead Holding Corp.* | 1,094 | 11,903 | ||||||
Wausau Paper Corp. | 1,100 | 11,858 | ||||||
Myers Industries, Inc. | 841 | 11,740 | ||||||
AK Steel Holding Corp.1 | 3,400 | 11,254 | ||||||
Golden Star Resources Ltd.* | 6,481 | 10,370 | ||||||
Century Aluminum Co.* | 1,288 | 9,969 | ||||||
Gold Resource Corp. | 750 | 9,773 | ||||||
Landec Corp.* | 642 | 9,290 | ||||||
Hawkins, Inc. | 229 | 9,149 | ||||||
OMNOVA Solutions, Inc.* | 1,161 | 8,905 | ||||||
Zep, Inc. | 558 | 8,376 | ||||||
Zoltek Companies, Inc.* | 693 | 8,281 |
See Notes to Financial Statements. | THE Rydex FUNDS annual report | 77 |
SCHEDULE OF INVESTMENTS (continued) | March 28, 2013 |
Russell 2000® 2x Strategy Fund |
Shares | Value | |||||||
AEP Industries, Inc.* | 104 | $ | 7,468 | |||||
Paramount Gold and Silver Corp.* | 3,271 | 7,294 | ||||||
AM Castle & Co.* | 416 | 7,280 | ||||||
US Silica Holdings, Inc. | 291 | 6,862 | ||||||
Universal Stainless & Alloy* | 169 | 6,143 | ||||||
Metals USA Holdings Corp. | 295 | 6,092 | ||||||
ADA-ES, Inc.* | 228 | 6,058 | ||||||
FutureFuel Corp. | 485 | 5,893 | ||||||
Olympic Steel, Inc. | 227 | 5,425 | ||||||
Arabian American Development Co.* | 499 | 4,207 | ||||||
Midway Gold Corp.* | 3,201 | 3,905 | ||||||
KMG Chemicals, Inc. | 194 | 3,771 | ||||||
Noranda Aluminum Holding Corp. | 838 | 3,763 | ||||||
General Moly, Inc.* | 1,679 | 3,711 | ||||||
Vista Gold Corp.* | 1,539 | 3,324 | ||||||
Chase Corp. | 158 | 3,053 | ||||||
UFP Technologies, Inc.* | 141 | 2,776 | ||||||
US Antimony Corp.* | 1,350 | 2,336 | ||||||
United States Lime & Minerals, Inc.* | 43 | 2,287 | ||||||
Handy & Harman Ltd.* | 133 | 2,047 | ||||||
Golden Minerals Co.* | 823 | 1,959 | ||||||
GSE Holding, Inc.* | 197 | 1,627 | ||||||
Revett Minerals, Inc.* | 635 | 1,448 | ||||||
Total Materials | 1,778,726 | |||||||
Consumer Staples - 2.1% | ||||||||
United Natural Foods, Inc.* | 1,227 | 60,368 | ||||||
TreeHouse Foods, Inc.* | 899 | 58,569 | ||||||
Hain Celestial Group, Inc.* | 919 | 56,132 | ||||||
Casey’s General Stores, Inc. | 951 | 55,444 | ||||||
Darling International, Inc.* | 2,941 | 52,821 | ||||||
Harris Teeter Supermarkets, Inc. | 1,097 | 46,853 | ||||||
B&G Foods, Inc. — Class A | 1,313 | 40,032 | ||||||
PriceSmart, Inc. | 458 | 35,646 | ||||||
Lancaster Colony Corp. | 460 | 35,420 | ||||||
Spectrum Brands Holdings, Inc. | 575 | 32,540 | ||||||
Universal Corp. | 578 | 32,391 | ||||||
Prestige Brands Holdings, Inc.* | 1,257 | 32,292 | ||||||
Sanderson Farms, Inc. | 577 | 31,516 | ||||||
Rite Aid Corp.* | 16,520 | 31,388 | ||||||
Boston Beer Company, Inc. — Class A* | 193 | 30,810 | ||||||
Post Holdings, Inc.* | 660 | 28,334 | ||||||
J&J Snack Foods Corp. | 368 | 28,296 | ||||||
Snyders-Lance, Inc. | 1,100 | 27,786 | ||||||
SUPERVALU, Inc.1 | 5,310 | 26,762 | ||||||
Fresh Del Monte Produce, Inc. | 950 | 25,631 | ||||||
Elizabeth Arden, Inc.* | 635 | 25,559 | ||||||
Andersons, Inc. | 463 | 24,780 | ||||||
Vector Group Ltd. | 1,389 | 22,391 | ||||||
WD-40 Co. | 398 | 21,798 | ||||||
Tootsie Roll Industries, Inc.1 | 614 | 18,367 | ||||||
Cal-Maine Foods, Inc. | 366 | 15,577 | ||||||
Susser Holdings Corp.* | 277 | 14,157 | ||||||
Pilgrim’s Pride Corp.* | 1,508 | 13,859 | ||||||
Boulder Brands, Inc.* | 1,471 | 13,210 | ||||||
Weis Markets, Inc. | 273 | 11,111 | ||||||
Inter Parfums, Inc. | 412 | 10,065 | ||||||
Dole Food Company, Inc.* | 900 | 9,810 | ||||||
Spartan Stores, Inc. | 541 | 9,495 | ||||||
Diamond Foods, Inc.* | 550 | 9,273 | ||||||
Chiquita Brands International, Inc.* | 1,146 | 8,893 | ||||||
Calavo Growers, Inc. | 302 | 8,692 | ||||||
Alliance One International, Inc.* | 2,191 | 8,523 | ||||||
Harbinger Group, Inc.* | 1,029 | 8,500 | ||||||
Seaboard Corp. | 3 | 8,400 | ||||||
Medifast, Inc.* | 350 | 8,022 | ||||||
Central Garden and Pet Co. — Class A* | 970 | 7,973 | ||||||
USANA Health Sciences, Inc.* | 151 | 7,298 | ||||||
Pantry, Inc.* | 582 | 7,258 | ||||||
Village Super Market, Inc. — Class A | 215 | 7,243 | ||||||
Coca-Cola Bottling Company Consolidated | 118 | 7,118 | ||||||
Seneca Foods Corp. — Class A* | 206 | 6,802 | ||||||
Ingles Markets, Inc. — Class A | 314 | 6,745 | ||||||
Revlon, Inc. — Class A* | 279 | 6,238 | ||||||
Star Scientific, Inc.*,1 | 3,645 | 6,051 | ||||||
Nash Finch Co. | 309 | 6,050 | ||||||
Omega Protein Corp.* | 489 | 5,257 | ||||||
Chefs’ Warehouse, Inc.* | 273 | 5,042 | ||||||
Limoneira Co. | 243 | 4,695 | ||||||
Annie’s, Inc.* | 121 | 4,629 | ||||||
Nature’s Sunshine Products, Inc. | 279 | 4,252 | ||||||
Natural Grocers by Vitamin Cottage, Inc.* | 180 | 4,059 | ||||||
National Beverage Corp. | 287 | 4,032 | ||||||
John B Sanfilippo & Son, Inc. | 199 | 3,976 | ||||||
Alico, Inc. | 85 | 3,931 | ||||||
Nutraceutical International Corp. | 220 | 3,817 | ||||||
Female Health Co. | 484 | 3,504 | ||||||
Orchids Paper Products Co. | 146 | 3,406 | ||||||
Oil-Dri Corporation of America | 123 | 3,349 | ||||||
Roundy’s, Inc. | 499 | 3,278 | ||||||
Arden Group, Inc. — Class A | 31 | 3,134 | ||||||
Inventure Foods, Inc.* | 331 | 2,575 | ||||||
Farmer Bros Co.* | 168 | 2,470 | ||||||
Synutra International, Inc.* | 437 | 2,054 | ||||||
Craft Brew Alliance, Inc.* | 259 | 1,927 | ||||||
Griffin Land & Nurseries, Inc. | 63 | 1,893 | ||||||
Lifeway Foods, Inc. | 115 | 1,599 | ||||||
Central European Distribution Corp.*,1 | 1,654 | 554 | ||||||
Total Consumer Staples | 1,181,722 | |||||||
Utilities - 2.0% | ||||||||
Cleco Corp. | 1,526 | 71,769 | ||||||
Piedmont Natural Gas Company, Inc. | 1,891 | 62,176 | ||||||
IDACORP, Inc. | 1,253 | 60,482 | ||||||
Portland General Electric Co. | 1,893 | 57,415 | ||||||
WGL Holdings, Inc. | 1,290 | 56,889 | ||||||
Southwest Gas Corp. | 1,155 | 54,816 | ||||||
UIL Holdings Corp. | 1,264 | 50,042 | ||||||
UNS Energy Corp. | 1,010 | 49,429 | ||||||
Black Hills Corp. | 1,108 | 48,797 | ||||||
New Jersey Resources Corp. | 1,044 | 46,823 | ||||||
ALLETE, Inc. | 952 | 46,667 | ||||||
PNM Resources, Inc. | 1,991 | 46,370 | ||||||
South Jersey Industries, Inc. | 760 | 42,248 | ||||||
Avista Corp. | 1,471 | 40,305 | ||||||
NorthWestern Corp. | 906 | 36,113 |
78 | the Rydex FUNDS annual report | See Notes to Financial Statements. |
SCHEDULE OF INVESTMENTS (continued) | March 28, 2013 |
Russell 2000® 2x Strategy Fund |
Shares | Value | |||||||
El Paso Electric Co. | 998 | $ | 33,583 | |||||
MGE Energy, Inc. | 576 | 31,933 | ||||||
Northwest Natural Gas Co. | 674 | 29,535 | ||||||
Otter Tail Corp. | 906 | 28,213 | ||||||
American States Water Co. | 471 | 27,115 | ||||||
CH Energy Group, Inc. | 376 | 24,587 | ||||||
Laclede Group, Inc. | 565 | 24,126 | ||||||
Empire District Electric Co. | 1,051 | 23,542 | ||||||
California Water Service Group | 1,051 | 20,915 | ||||||
Atlantic Power Corp. | 2,994 | 14,761 | ||||||
Chesapeake Utilities Corp. | 235 | 11,527 | ||||||
Unitil Corp. | 342 | 9,620 | ||||||
Ormat Technologies, Inc. | 448 | 9,251 | ||||||
SJW Corp. | 349 | 9,249 | ||||||
Connecticut Water Service, Inc. | 272 | 7,951 | ||||||
Middlesex Water Co. | 391 | 7,632 | ||||||
York Water Co. | 316 | 5,941 | ||||||
Artesian Resources Corp. — Class A | 188 | 4,224 | ||||||
Consolidated Water Company Ltd. | 369 | 3,653 | ||||||
Delta Natural Gas Company, Inc. | 165 | 3,607 | ||||||
Genie Energy Ltd. — Class B | 378 | 3,500 | ||||||
Cadiz, Inc.* | 326 | 2,204 | ||||||
American DG Energy, Inc.* | 643 | 1,350 | ||||||
Total Utilities | 1,108,360 | |||||||
Telecommunication Services - 0.4% | ||||||||
Cogent Communications Group, Inc. | 1,175 | 31,020 | ||||||
Consolidated Communications Holdings, Inc. | 999 | 17,532 | ||||||
Cincinnati Bell, Inc.* | 4,934 | 16,085 | ||||||
Premiere Global Services, Inc.* | 1,253 | 13,770 | ||||||
8x8, Inc.* | 1,767 | 12,104 | ||||||
Vonage Holdings Corp.* | 3,772 | 10,901 | ||||||
Atlantic Tele-Network, Inc. | 221 | 10,721 | ||||||
Shenandoah Telecommunications Co. | 599 | 9,123 | ||||||
General Communication, Inc. — Class A* | 924 | 8,473 | ||||||
Leap Wireless International, Inc.* | 1,344 | 7,916 | ||||||
inContact, Inc.* | 939 | 7,597 | ||||||
Iridium Communications, Inc.* | 1,240 | 7,465 | ||||||
USA Mobility, Inc. | 558 | 7,405 | ||||||
Hawaiian Telcom Holdco, Inc.* | 260 | 5,998 | ||||||
Lumos Networks Corp. | 383 | 5,163 | ||||||
Cbeyond, Inc.* | 680 | 5,052 | ||||||
magicJack VocalTec Ltd.* | 350 | 4,900 | ||||||
NTELOS Holdings Corp. | 374 | 4,791 | ||||||
ORBCOMM, Inc.* | 891 | 4,642 | ||||||
IDT Corp. — Class B | 377 | 4,547 | ||||||
Fairpoint Communications, Inc.* | 519 | 3,877 | ||||||
HickoryTech Corp. | 338 | 3,431 | ||||||
Primus Telecommunications Group, Inc. | 300 | 3,315 | ||||||
Towerstream Corp.* | 1,415 | 3,155 | ||||||
Neutral Tandem, Inc. | 699 | 2,286 | ||||||
Boingo Wireless, Inc.* | 391 | 2,158 | ||||||
Total Telecommunication Services | 213,427 | |||||||
Total Common Stocks | ||||||||
(Cost $29,068,953) | 33,482,303 | |||||||
WARRANTS†† - 0.0% | ||||||||
Magnum Hunter Resources Corp. | ||||||||
$10.50, 08/16/13* | 47 | $ | — | |||||
Total Warrants | ||||||||
(Cost $—) | — | |||||||
RIGHTS†† - 0.0% | ||||||||
BlueLinx Holdings, Inc. | ||||||||
Expires 04/01/13* | 505 | 199 | ||||||
Total Rights | ||||||||
(Cost $148) | 199 | |||||||
CLOSED-END FUNDS† - 0.0% | ||||||||
Firsthand Technology Value Fund, Inc.* | 210 | 4,051 | ||||||
Total Closed-End Funds | ||||||||
(Cost $3,797) | 4,051 | |||||||
Face | ||||||||
Amount | ||||||||
CORPORATE BONDS†† - 0.0% | ||||||||
FINANCIALS - 0.0% | ||||||||
GAMCO Investors, Inc. | ||||||||
0.00% due 12/31/15 | $ | 200 | 180 | |||||
Total Corporate Bonds | ||||||||
(Cost $—) | 180 | |||||||
REPURCHASE AGREEMENT††,2 - 95.0% | ||||||||
Mizuho Financial Group, Inc. | ||||||||
issued 03/28/13 at 0.11% | ||||||||
due 04/01/13 | 53,491,699 | 53,491,699 | ||||||
Total Repurchase Agreement | ||||||||
(Cost $53,491,699) | 53,491,699 | |||||||
SECURITIES LENDING COLLATERAL††,3 - 0.3% | ||||||||
Repurchase Agreements | ||||||||
RBS Securities, Inc. | ||||||||
issued 03/28/13 at 0.18% | ||||||||
due 04/01/13 | 105,871 | 105,871 | ||||||
HSBC Securities, Inc. | ||||||||
issued 03/28/13 at 0.17% | ||||||||
due 04/01/13 | 83,285 | 83,285 | ||||||
Total Securities Lending Collateral | ||||||||
(Cost $189,156) | 189,156 | |||||||
Total Investments - 154.8% | ||||||||
(Cost $82,753,753) | $ | 87,167,588 | ||||||
Other Assets & Liabilities, net - (54.8)% | (30,880,942 | ) | ||||||
Total Net Assets - 100.0% | $ | 56,286,646 |
See Notes to Financial Statements. | THE Rydex FUNDS annual report | 79 |
SCHEDULE OF INVESTMENTS (concluded) | March 28, 2013 |
Russell 2000® 2x Strategy Fund |
Unrealized | ||||||||
Contracts | Gain | |||||||
EQUITY FUTURES CONTRACTS PURCHASED† | ||||||||
June 2013 Russell 2000 Index | ||||||||
Mini Futures Contracts | ||||||||
(Aggregate Value of | ||||||||
Contracts $2,461,680) | 26 | $ | 32,799 | |||||
Units | ||||||||
EQUITY INDEX SWAP AGREEMENTS†† | ||||||||
Goldman Sachs International April 2013 | ||||||||
Russell 2000 Index Swap, | ||||||||
Terminating 04/29/134 | ||||||||
(Notional Value $22,677,735) | 23,833 | $ | 50,477 | |||||
Barclays Bank plc April 2013 | ||||||||
Russell 2000 Index Swap, | ||||||||
Terminating 04/30/134 | ||||||||
(Notional Value $31,898,511) | 33,523 | 49,363 | ||||||
Credit Suisse Capital, LLC April 2013 | ||||||||
Russell 2000 Index Swap, | ||||||||
Terminating 04/30/134 | ||||||||
(Notional Value $22,154,193) | 23,282 | 31,132 | ||||||
(Total Notional Value $76,730,439) | $ | 130,972 |
* | Non-income producing security. |
† | Value determined based on Level 1 inputs — See Note 4. |
†† | Value determined based on Level 2 inputs — See Note 4. |
1 | All or portion of this security is on loan at March 28, 2013 — See Note 10. |
2 | Repurchase Agreement — See Note 5. |
3 | Securities lending collateral — See Note 10. |
4 | Total Return based on Russell 2000 Index +/- financing at a variable rate. |
plc — Public Limited Company |
REIT — Real Estate Investment Trust |
80 | The Rydex Funds Annual Report | See Notes to Financial Statements. |
Russell 2000® 2x Strategy Fund |
STATEMENT OF ASSETS
AND LIABILITIES
March 28, 2013
Assets: | ||||
Investments, at value - including $182,127 of securities loaned | ||||
(cost $29,072,898) | $ | 33,486,733 | ||
Repurchase agreements, at value | ||||
(cost $53,680,855) | 53,680,855 | |||
Total investments | ||||
(cost $82,753,753) | 87,167,588 | |||
Foreign currency, at value | ||||
(cost $138) | 138 | |||
Segregated cash with broker | 15,626,329 | |||
Receivable for swap settlement | 240,434 | |||
Unrealized appreciation on swap agreements | 130,972 | |||
Receivables: | ||||
Fund shares sold | 2,644,256 | |||
Variation margin | 59,099 | |||
Dividends | 35,372 | |||
Securities sold | 14,940 | |||
Interest | 1,324 | |||
Total assets | 105,920,452 | |||
Liabilities: | ||||
Overdraft due to custodian bank | 172,055 | |||
Payable for: | ||||
Fund shares redeemed | 49,133,212 | |||
Upon return of securities loaned | 189,156 | |||
Management fees | 47,904 | |||
Distribution and service fees | 14,880 | |||
Transfer agent and administrative fees | 13,307 | |||
Portfolio accounting fees | 7,984 | |||
Miscellaneous | 55,308 | |||
Total liabilities | 49,633,806 | |||
Net assets | $ | 56,286,646 | ||
Net assets consist of: | ||||
Paid in capital | $ | 54,317,653 | ||
Accumulated net investment loss | (16,952 | ) | ||
Accumulated net realized loss on investments | (2,591,661 | ) | ||
Net unrealized appreciation on investments | 4,577,606 | |||
Net assets | $ | 56,286,646 | ||
A-Class: | ||||
Net assets | $ | 5,149,285 | ||
Capital shares outstanding | 23,714 | |||
Net asset value per share | $ | 217.14 | ||
Maximum offering price per share | ||||
(Net asset value divided by 95.25%) | $ | 227.97 | ||
C-Class: | ||||
Net assets | $ | 2,300,550 | ||
Capital shares outstanding | 11,153 | |||
Net asset value per share | $ | 206.27 | ||
H-Class: | ||||
Net assets | $ | 48,836,811 | ||
Capital shares outstanding | 225,174 | |||
Net asset value per share | $ | 216.88 |
STATEMENTS OF
OPERATIONS
Period | Year Ended | |||||||
January 1, 2013 to | December 31, | |||||||
March 28, 2013* | 2012 | |||||||
Investment Income: | ||||||||
Dividends** | $ | 67,676 | $ | 324,786 | ||||
Interest | 5,701 | 22,780 | ||||||
Income from securities lending, net | 2,563 | 1,653 | ||||||
Total investment income | 75,940 | 349,219 | ||||||
Expenses: | ||||||||
Management fees | 126,897 | 345,406 | ||||||
Transfer agent and administrative fees | 35,250 | 95,947 | ||||||
Distribution and service fees: | ||||||||
A-Class | 1,752 | 6,269 | ||||||
C-Class | 5,797 | 18,400 | ||||||
H-Class | 32,049 | 85,079 | ||||||
Professional fees | 24,285 | 9,917 | ||||||
Portfolio accounting fees | 21,150 | 57,569 | ||||||
Custodian fees | 1,690 | 7,827 | ||||||
Trustees’ fees† | 866 | 3,735 | ||||||
Miscellaneous | 11,371 | 79,354 | ||||||
Total expenses | 261,107 | 709,503 | ||||||
Net investment loss | (185,167 | ) | (360,284 | ) | ||||
Net Realized and Unrealized Gain (Loss): | ||||||||
Net realized gain (loss) on: | ||||||||
Investments | 1,385,231 | 3,153,078 | ||||||
Swap agreements | 6,811,757 | 12,343,065 | ||||||
Futures contracts | 2,143,577 | (641,859 | ) | |||||
Foreign currency | (2 | ) | (5 | ) | ||||
Net realized gain | 10,340,563 | 14,854,279 | ||||||
Net change in unrealized appreciation | ||||||||
(depreciation) on: | ||||||||
Investments | 1,751,936 | (5,776 | ) | |||||
Swap agreements | (697,044 | ) | 943,723 | |||||
Futures contracts | (221,148 | ) | (127,827 | ) | ||||
Foreign currency | (1 | ) | — | |||||
Net change in unrealized appreciation | ||||||||
(depreciation) | 833,743 | 810,120 | ||||||
Net realized and unrealized gain | 11,174,306 | 15,664,399 | ||||||
Net increase in net assets resulting | ||||||||
from operations | $ | 10,989,139 | $ | 15,304,115 |
* | The Fund changed its fiscal year end from December to March in 2013. |
** | Net of foreign withholding tax of $164 and $346 for period January 1, 2012 to March 28, 2013 and year ended December 31, 2012, respectively. |
† | Relates to Trustees not deemed “interested persons” within the meaning of Section 2(a)(19) of the 1940 Act. |
See Notes to Financial Statements. | THE Rydex FUNDS annual report | 81 |
Russell 2000® 2x Strategy Fund |
STATEMENTS OF CHANGES IN NET ASSETS
Period | Year Ended | Year Ended | ||||||||||
January 1, 2013 to | December 31, | December 31, | ||||||||||
March 28, 2013* | 2012 | 2011 | ||||||||||
Increase (Decrease) In Net Assets From Operations: | ||||||||||||
Net investment loss | $ | (185,167 | ) | $ | (360,284 | ) | $ | (678,626 | ) | |||
Net realized gain (loss) on investments | 10,340,563 | 14,854,279 | (7,734,467 | ) | ||||||||
Net change in unrealized appreciation (depreciation) on investments | 833,743 | 810,120 | (1,619,961 | ) | ||||||||
Net increase (decrease) in net assets resulting from operations | 10,989,139 | 15,304,115 | (10,033,054 | ) | ||||||||
Capital share transactions: | ||||||||||||
Proceeds from sale of shares | ||||||||||||
A-Class | 3,570,328 | 5,037,656 | 10,074,129 | |||||||||
C-Class | 14,105,565 | 53,115,224 | 156,272,513 | |||||||||
H-Class | 577,611,151 | 2,005,261,845 | 1,891,218,731 | |||||||||
Cost of shares redeemed | ||||||||||||
A-Class | (642,042 | ) | (7,400,995 | ) | (8,604,460 | ) | ||||||
C-Class | (15,768,902 | ) | (51,128,780 | ) | (156,531,878 | ) | ||||||
H-Class | (582,536,433 | ) | (2,006,194,742 | ) | (1,892,269,714 | ) | ||||||
Net increase (decrease) from capital share transactions | (3,660,333 | ) | (1,309,792 | ) | 159,321 | |||||||
Net increase (decrease) in net assets | 7,328,806 | 13,994,323 | (9,873,733 | ) | ||||||||
Net assets: | ||||||||||||
Beginning of period | 48,957,840 | 34,963,517 | 44,837,250 | |||||||||
End of period | $ | 56,286,646 | $ | 48,957,840 | $ | 34,963,517 | ||||||
Accumulated net investment loss at end of period | $ | (16,952 | ) | $ | (245 | ) | $ | (3,128 | ) | |||
Capital share activity: | ||||||||||||
Shares sold | ||||||||||||
A-Class | 17,079 | 32,384 | 63,400 | |||||||||
C-Class | 74,434 | 349,533 | 1,054,439 | |||||||||
H-Class | 2,882,840 | 12,829,378 | 12,335,564 | |||||||||
Shares redeemed | ||||||||||||
A-Class | (3,196 | ) | (47,341 | ) | (57,437 | ) | ||||||
C-Class | (83,861 | ) | (338,986 | ) | (1,056,059 | ) | ||||||
H-Class | (2,910,639 | ) | (12,800,388 | ) | (12,346,693 | ) | ||||||
Net increase (decrease) in shares | (23,343 | ) | 24,580 | (6,786 | ) |
* The Fund changed its fiscal year end from December to March in 2013.
82 | the Rydex FUNDS annual report | See Notes to Financial Statements. |
Russell 2000® 2x Strategy Fund |
FINANCIAL HIGHLIGHTS
This table is presented to show selected data for a share outstanding throughout each period and to assist shareholders in evaluating a Fund’s performance for the periods presented.
Period Ended | Year Ended | Year Ended | Year Ended | Year Ended | Year Ended | |||||||||||||||||||
March 28, | December 31, | December 31, | December 31, | December 31, | December 31, | |||||||||||||||||||
A-Class | 2013a,b | 2012 | 2011 | 2010 | 2009e | 2008e | ||||||||||||||||||
Per Share Data | ||||||||||||||||||||||||
Net asset value, beginning of period | $ | 173.53 | $ | 135.39 | $ | 169.09 | $ | 113.55 | $ | 80.46 | $ | 239.10 | ||||||||||||
Income (loss) from investment operations: | ||||||||||||||||||||||||
Net investment lossc | (.60 | ) | (1.50 | ) | (2.46 | ) | (1.49 | ) | (.83 | ) | (.10 | ) | ||||||||||||
Net gain (loss) on investments | ||||||||||||||||||||||||
(realized and unrealized) | 44.21 | 39.64 | (31.24 | ) | 57.03 | 33.92 | (158.44 | ) | ||||||||||||||||
Total from investment operations | 43.61 | 38.14 | (33.70 | ) | 55.54 | 33.09 | (158.54 | ) | ||||||||||||||||
Less distributions from: | ||||||||||||||||||||||||
Return of capital | — | — | — | — | — | (.10 | ) | |||||||||||||||||
Total distributions | — | — | — | — | — | (.10 | ) | |||||||||||||||||
Net asset value, end of period | $ | 217.14 | $ | 173.53 | $ | 135.39 | $ | 169.09 | $ | 113.55 | $ | 80.46 | ||||||||||||
Total Returnd | 25.14 | % | 28.18 | % | (19.93 | %) | 48.89 | % | 41.13 | % | (66.27 | %) | ||||||||||||
Ratios/Supplemental Data | ||||||||||||||||||||||||
Net assets, end of period (in thousands) | $ | 5,149 | $ | 1,706 | $ | 3,356 | $ | 3,183 | $ | 1,890 | $ | 893 | ||||||||||||
Ratios to average net assets: | ||||||||||||||||||||||||
Net investment loss | (1.21 | %) | (0.95 | %) | (1.52 | %) | (1.16 | %) | (1.00 | %) | (0.05 | %) | ||||||||||||
Total expenses | 1.79 | % | 1.82 | % | 1.94 | % | 1.80 | % | 1.87 | % | 1.75 | % | ||||||||||||
Portfolio turnover rate | 88 | % | 622 | % | 150 | % | 148 | % | 335 | % | 631 | % |
Period Ended | Year Ended | Year Ended | Year Ended | Year Ended | Year Ended | |||||||||||||||||||
March 28, | December 31, | December 31, | December 31, | December 31, | December 31, | |||||||||||||||||||
C-Class | 2013a,b | 2012 | 2011 | 2010 | 2009e | 2008e | ||||||||||||||||||
Per Share Data | ||||||||||||||||||||||||
Net asset value, beginning of period | $ | 165.09 | $ | 129.68 | $ | 163.02 | $ | 110.27 | $ | 78.83 | $ | 236.20 | ||||||||||||
Income (loss) from investment operations: | ||||||||||||||||||||||||
Net investment lossc | (.96 | ) | (2.28 | ) | (3.51 | ) | (2.28 | ) | (1.32 | ) | (1.20 | ) | ||||||||||||
Net gain (loss) on investments | ||||||||||||||||||||||||
(realized and unrealized) | 42.14 | 37.69 | (29.83 | ) | 55.03 | 32.76 | (156.07 | ) | ||||||||||||||||
Total from investment operations | 41.18 | 35.41 | (33.34 | ) | 52.75 | 31.44 | (157.27 | ) | ||||||||||||||||
Less distributions from: | ||||||||||||||||||||||||
Return of capital | — | — | — | — | — | (.10 | ) | |||||||||||||||||
Total distributions | — | — | — | — | — | (.10 | ) | |||||||||||||||||
Net asset value, end of period | $ | 206.27 | $ | 165.09 | $ | 129.68 | $ | 163.02 | $ | 110.27 | $ | 78.83 | ||||||||||||
Total Returnd | 24.95 | % | 27.32 | % | (20.45 | %) | 47.82 | % | 39.88 | % | (66.58 | %) | ||||||||||||
Ratios/Supplemental Data | ||||||||||||||||||||||||
Net assets, end of period (in thousands) | $ | 2,301 | $ | 3,398 | $ | 1,301 | $ | 1,900 | $ | 3,116 | $ | 1,446 | ||||||||||||
Ratios to average net assets: | ||||||||||||||||||||||||
Net investment loss | (2.00 | %) | (1.48 | %) | (2.28 | %) | (1.91 | %) | (1.77 | %) | (0.78 | %) | ||||||||||||
Total expenses | 2.49 | % | 2.51 | % | 2.69 | % | 2.56 | % | 2.63 | % | 2.50 | % | ||||||||||||
Portfolio turnover rate | 88 | % | 622 | % | 150 | % | 148 | % | 335 | % | 631 | % |
See Notes to Financial Statements. | THE Rydex FUNDS annual report | 83 |
Russell 2000® 2x Strategy Fund |
FINANCIAL HIGHLIGHTS (concluded)
This table is presented to show selected data for a share outstanding throughout each period and to assist shareholders in evaluating a Fund’s performance for the periods presented.
Period Ended | Year Ended | Year Ended | Year Ended | Year Ended | Year Ended | |||||||||||||||||||
March 28, | December 31, | December 31, | December 31, | December 31, | December 31, | |||||||||||||||||||
H-Class | 2013a,b | 2012 | 2011 | 2010 | 2009e | 2008e | ||||||||||||||||||
Per Share Data | ||||||||||||||||||||||||
Net asset value, beginning of period | $ | 173.36 | $ | 135.31 | $ | 169.09 | $ | 113.58 | $ | 80.37 | $ | 239.40 | ||||||||||||
Income (loss) from investment operations: | ||||||||||||||||||||||||
Net investment income (loss)c | (.62 | ) | (1.42 | ) | (2.48 | ) | (1.57 | ) | (.81 | ) | .04 | |||||||||||||
Net gain (loss) on investments | ||||||||||||||||||||||||
(realized and unrealized) | 44.14 | 39.47 | (31.30 | ) | 57.08 | 34.02 | (158.97 | ) | ||||||||||||||||
Total from investment operations | 43.52 | 38.05 | (33.78 | ) | 55.51 | 33.21 | (158.93 | ) | ||||||||||||||||
Less distributions from: | ||||||||||||||||||||||||
Return of capital | — | — | — | — | — | (.10 | ) | |||||||||||||||||
Total distributions | — | — | — | — | — | (.10 | ) | |||||||||||||||||
Net asset value, end of period | $ | 216.88 | $ | 173.36 | $ | 135.31 | $ | 169.09 | $ | 113.58 | $ | 80.37 | ||||||||||||
Total Returnd | 25.12 | % | 28.13 | % | (19.98 | %) | 48.86 | % | 41.32 | % | (66.35 | %) | ||||||||||||
Ratios/Supplemental Data | ||||||||||||||||||||||||
Net assets, end of period (in thousands) | $ | 48,837 | $ | 43,854 | $ | 30,306 | $ | 39,755 | $ | 21,811 | $ | 26,162 | ||||||||||||
Ratios to average net assets: | ||||||||||||||||||||||||
Net investment income (loss) | (1.29 | %) | (0.91 | %) | (1.56 | %) | (1.20 | %) | (1.00 | %) | 0.03 | % | ||||||||||||
Total expenses | 1.83 | % | 1.82 | % | 1.94 | % | 1.81 | % | 1.84 | % | 1.75 | % | ||||||||||||
Portfolio turnover rate | 88 | % | 622 | % | 150 | % | 148 | % | 335 | % | 631 | % |
a | Percentage amounts for the period, except total return and portfolio turnover rate, have been annualized. |
b | The Fund changed its fiscal year end from December to March in 2013. |
c | Net investment income (loss) per share was computed using average shares outstanding throughout the period. |
d | Total return does not reflect the impact of any applicable sales charges and has not been annualized. |
e | Per share amounts for the year ended December 31, 2008 and the period January 1, 2009 through April 19, 2009 have been restated to reflect a 1:10 reverse share split effective April 20, 2009. |
84 | the Rydex FUNDS annual report | See Notes to Financial Statements. |
This page intentionally left blank.
THE Rydex FUNDS annual report | 85 |
Performance Report and FUND PROFILE (Unaudited) | March 28, 2013 |
INVERSE RUSSELL 2000® 2x STRATEGY FUND
OBJECTIVE: Seeks to provide investment results that match, before fees and expenses, the performance of a specific benchmark on a daily basis. The Fund’s current benchmark is 200% of the inverse (opposite) of the performance of the Russell 2000® Index (the “underlying index”). The Fund does not seek to achieve its investment objective over a period of time greater than one day.
For the one-year period ended March 28, 2013, Inverse Russell 2000® 2x Strategy Fund maintained a daily correlation of over 99% to its benchmark of -200% of the daily price movement of the Russell 2000 Index. Inverse Russell 2000® 2x Strategy Fund H-Class returned -33.53%, while the Russell 2000 Index returned 16.30% over the same period.
Among sectors, the biggest performance contributors to the underlying index during the period were Financials and Industrials. Telecommunication Services contributed least to performance of the underlying index for the period. Energy was the only sector that detracted from performance of the underlying index for the period.
Pharmacyclics, Inc., Ocwen Financial Corp. and Onyx Pharmaceuticals, Inc. were the largest contributors to performance of the underlying index for the year. MAKO Surgical Corp., Vivus, Inc. and Quality Systems, Inc. were the leading detractors from performance of the underlying index for the year.
Derivatives in the Fund were used to help provide exposure to the composition of the benchmark in the highest efficient manner and to provide leverage, not for hedging purposes. The results of derivatives use during the period were within our expectations and contributed to the Fund’s performance.
Due to the compounding of daily returns, leveraged and inverse funds’ returns over periods other than one day will likely differ in amount and possibly direction from the benchmark return for the same period. Investors should monitor their leveraged and inverse funds’ holdings to ensure that they are consistent with their strategies, as frequently as daily.
The effects of compounding may cause the longer-term correlation of the fund to its benchmark to diminish. The apparent discrepancy between the leveraged and unleveraged indices is the result of compounding, which is described briefly on page 4 of this report.
Performance displayed represents past performance, which is no guarantee of future results.
Holdings Diversification (Market Exposure as % of Net Assets)
“Holdings Diversification (Market Exposure as % of Net Assets)” excludes any temporary cash investments.
Inception Dates: | ||||
A-Class | May 31, 2006 | |||
C-Class | May 31, 2006 | |||
H-Class | May 31, 2006 |
The Fund invests principally in derivative investments such as swap agreements and futures contracts.
86 | the Rydex FUNDS annual report |
Performance Report and FUND PROFILE (Unaudited)(concluded) |
Cumulative Fund Performance*
Average Annual Returns*
Periods Ended 03/28/13
Since | ||||||||||||
Inception | ||||||||||||
1 Year | 5 Year | (05/31/06) | ||||||||||
A-Class Shares | -33.43 | % | -38.90 | % | -30.34 | % | ||||||
A-Class Shares with sales charge† | -36.58 | % | -39.50 | % | -30.83 | % | ||||||
C-Class Shares | -33.52 | % | -39.27 | % | -30.79 | % | ||||||
C-Class Shares with CDSC‡ | -34.18 | % | -39.27 | % | -30.79 | % | ||||||
H-Class Shares | -33.53 | % | -38.99 | % | -30.41 | % | ||||||
Russell 2000 Index | 16.30 | % | 8.24 | % | 5.59 | % |
* | The performance data above represents past performance that is not predictive of future results. The investment return and principal value of an investment in the Fund will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than their original cost. Returns are historical and include changes in principal and reinvested dividends and capital gains and do not reflect the effect of taxes. The Russell 2000 Index is an unmanaged index and, unlike the Fund, has no management fees or operating expenses to reduce its reported return. The graphs are based on A-Class shares and H-Class shares only; performance for C-Class shares will vary due to differences in fee structure. |
† | Fund returns are calculated using the maximum sales charge of 4.75%. |
‡ | Fund returns include a CDSC of 1% if redeemed within 12 months of purchase. |
THE Rydex FUNDS annual report | 87 |
SCHEDULE OF INVESTMENTS | March 28, 2013 |
INVERSE Russell 2000® 2x Strategy Fund |
Face | ||||||||
Amount | Value | |||||||
REPURCHASE AGREEMENT††,1 - 23.1% | ||||||||
Mizuho Financial Group, Inc. | ||||||||
issued 03/28/13 at 0.11% | ||||||||
due 04/01/13 | $ | 10,476,841 | $ | 10,476,841 | ||||
Total Repurchase Agreement | ||||||||
(Cost $10,476,841) | 10,476,841 | |||||||
Total Investments - 23.1% | ||||||||
(Cost $10,476,841) | $ | 10,476,841 | ||||||
Other Assets & Liabilities, | ||||||||
net - 76.9% | 34,785,681 | |||||||
Total Net Assets - 100.0% | $ | 45,262,522 |
Unrealized | ||||||||
Contracts | Gain (Loss) | |||||||
EQUITY FUTURES CONTRACTS SOLD SHORT† | ||||||||
June 2013 Russell 2000 Index | ||||||||
Mini Futures Contracts | ||||||||
(Aggregate Value of | ||||||||
Contracts $9,468,000) | 100 | $ | 18,422 | |||||
Units | ||||||||
EQUITY INDEX SWAP AGREEMENTS SOLD SHORT†† | ||||||||
Barclays Bank plc | ||||||||
April 2013 Russell 2000 Index Swap, | ||||||||
Terminating 04/30/132 | ||||||||
(Notional Value $51,572,031) | 54,198 | $ | (15,448 | ) | ||||
Goldman Sachs International | ||||||||
April 2013 Russell 2000 Index Swap, | ||||||||
Terminating 04/29/132 | ||||||||
(Notional Value $7,931,207) | 8,335 | (16,722 | ) | |||||
Credit Suisse Capital, LLC | ||||||||
April 2013 Russell 2000 Index Swap, | ||||||||
Terminating 04/30/132 | ||||||||
(Notional Value $21,244,924) | 22,327 | (28,325 | ) | |||||
(Total Notional Value | ||||||||
$80,748,162) | $ | (60,495 | ) |
† | Value determined based on Level 1 inputs — See Note 4. |
†† | Value determined based on Level 2 inputs — See Note 4. |
1 | Repurchase Agreement — See Note 5. |
2 | Total Return based on Russell 2000 Index +/- financing at a variable rate. |
plc — Public Limited Company |
88 | the Rydex FUNDS annual report | See Notes to Financial Statements. |
INVERSE Russell 2000® 2x Strategy Fund |
STATEMENT OF ASSETS
AND LIABILITIES
March 28, 2013
Assets: | ||||
Repurchase agreements, at value | ||||
(cost $10,476,841) | $ | 10,476,841 | ||
Segregated cash with broker | 7,477,292 | |||
Receivables: | ||||
Fund shares sold | 28,477,650 | |||
Variation margin | 18,422 | |||
Interest | 128 | |||
Total assets | 46,450,333 | |||
Liabilities: | ||||
Unrealized depreciation on swap agreements | 60,495 | |||
Payable for: | ||||
Fund shares redeemed | 1,041,506 | |||
Management fees | 23,503 | |||
Swap settlement | 17,460 | |||
Distribution and service fees | 6,967 | |||
Transfer agent and administrative fees | 6,529 | |||
Portfolio accounting fees | 3,917 | |||
Miscellaneous | 27,434 | |||
Total liabilities | 1,187,811 | |||
Net assets | $ | 45,262,522 | ||
Net assets consist of: | ||||
Paid in capital | $ | 157,299,711 | ||
Undistributed net investment income | — | |||
Accumulated net realized loss on investments | (111,995,116 | ) | ||
Net unrealized depreciation on investments | (42,073 | ) | ||
Net assets | $ | 45,262,522 | ||
A-Class: | ||||
Net assets | $ | 822,972 | ||
Capital shares outstanding | 72,148 | |||
Net asset value per share | $ | 11.41 | ||
Maximum offering price per share | ||||
(Net asset value divided by 95.25%) | $ | 11.98 | ||
C-Class: | ||||
Net assets | $ | 532,728 | ||
Capital shares outstanding | 49,302 | |||
Net asset value per share | $ | 10.81 | ||
H-Class: | ||||
Net assets | $ | 43,906,822 | ||
Capital shares outstanding | 3,878,100 | |||
Net asset value per share | $ | 11.32 |
STATEMENTS OF
OPERATIONS
Period | Year Ended | |||||||
January 1, 2013 to | December 31, | |||||||
March 28, 2013* | 2012 | |||||||
Investment Income: | ||||||||
Interest | $ | 5,370 | $ | 33,081 | ||||
Total investment income | 5,370 | 33,081 | ||||||
Expenses: | ||||||||
Management fees | 63,788 | 259,056 | ||||||
Transfer agent and administrative fees | 17,719 | 71,960 | ||||||
Distribution and service fees: | ||||||||
A-Class | 538 | 2,329 | ||||||
C-Class | 2,126 | 14,707 | ||||||
H-Class | 16,650 | 65,956 | ||||||
Professional fees | 12,194 | 7,966 | ||||||
Portfolio accounting fees | 10,632 | 43,177 | ||||||
Registration fees | 8,072 | 16,412 | ||||||
Licensing fees | 3,542 | 29,606 | ||||||
Custodian fees | 808 | 5,546 | ||||||
Trustees’ fees** | 633 | 3,072 | ||||||
Miscellaneous | (7,191 | ) | 25,813 | |||||
Total expenses | 129,511 | 545,600 | ||||||
Net investment loss | (124,141 | ) | (512,519 | ) | ||||
Net Realized and Unrealized Gain (Loss): | ||||||||
Net realized gain (loss) on: | ||||||||
Swap agreements | (4,627,868 | ) | (3,396,086 | ) | ||||
Futures contracts | (1,528,798 | ) | (2,590,256 | ) | ||||
Net realized loss | (6,156,666 | ) | (5,986,342 | ) | ||||
Net change in unrealized appreciation | ||||||||
(depreciation) on: | ||||||||
Swap agreements | 342,250 | (726,601 | ) | |||||
Futures contracts | (4,391 | ) | (12,374 | ) | ||||
Net change in unrealized appreciation | ||||||||
(depreciation) | 337,859 | (738,975 | ) | |||||
Net realized and unrealized loss | (5,818,807 | ) | (6,725,317 | ) | ||||
Net decrease in net assets resulting | ||||||||
from operations | $ | (5,942,948 | ) | $ | (7,237,836 | ) |
* The Fund changed its fiscal year end from December to March in 2013.
** Relates to Trustees not deemed “interested persons” within the meaning of Section 2(a)(19) of the 1940 Act.
See Notes to Financial Statements. | THE Rydex FUNDS annual report | 89 |
INVERSE Russell 2000® 2x Strategy Fund |
STATEMENTS OF CHANGES IN NET ASSETS
Period | Year Ended | Year Ended | ||||||||||
January 1, 2013 to | December 31, | December 31, | ||||||||||
March 28, 2013* | 2012 | 2011 | ||||||||||
Increase (Decrease) In Net Assets From Operations: | ||||||||||||
Net investment loss | $ | (124,141 | ) | $ | (512,519 | ) | $ | (652,149 | ) | |||
Net realized loss on investments | (6,156,666 | ) | (5,986,342 | ) | (9,058,226 | ) | ||||||
Net change in unrealized appreciation (depreciation) on investments | 337,859 | (738,975 | ) | (39,587 | ) | |||||||
Net decrease in net assets resulting from operations | (5,942,948 | ) | (7,237,836 | ) | (9,749,962 | ) | ||||||
Capital share transactions: | ||||||||||||
Proceeds from sale of shares | ||||||||||||
A-Class | 3,584,711 | 3,825,671 | 9,866,313 | |||||||||
C-Class | 13,667,153 | 103,494,688 | 203,560,060 | |||||||||
H-Class | 430,039,207 | 1,664,693,322 | 1,799,938,174 | |||||||||
Cost of shares redeemed | ||||||||||||
A-Class | (3,506,211 | ) | (3,198,645 | ) | (9,442,327 | ) | ||||||
C-Class | (13,910,883 | ) | (104,592,364 | ) | (203,307,012 | ) | ||||||
H-Class | (394,186,486 | ) | (1,668,707,308 | ) | (1,792,376,733 | ) | ||||||
Net increase (decrease) from capital share transactions | 35,687,491 | (4,484,636 | ) | 8,238,475 | ||||||||
Net decrease in net assets | 29,744,543 | (11,722,472 | ) | (1,511,487 | ) | |||||||
Net assets: | ||||||||||||
Beginning of period | 15,517,979 | 27,240,451 | 28,751,938 | |||||||||
End of period | $ | 45,262,522 | $ | 15,517,979 | $ | 27,240,451 | ||||||
Undistributed net investment income at end of period | $ | — | $ | — | $ | — | ||||||
Capital share activity: | ||||||||||||
Shares sold | ||||||||||||
A-Class | 300,008 | 208,066 | 347,749 | 1 | ||||||||
C-Class | 1,111,982 | 6,196,679 | 8,025,398 | 1 | ||||||||
H-Class | 34,953,178 | 94,523,775 | 67,615,839 | 1 | ||||||||
Shares redeemed | ||||||||||||
A-Class | (295,805 | ) | (177,495 | ) | (339,425 | )1 | ||||||
C-Class | (1,138,799 | ) | (6,256,294 | ) | (7,989,606 | )1 | ||||||
H-Class | (32,000,764 | ) | (94,654,473 | ) | (67,421,219 | )1 | ||||||
Net increase (decrease) in shares | 2,929,800 | (159,742 | ) | 238,736 |
* | The Fund changed its fiscal year end from December to March in 2013. |
1 | The share activity for the period January 1, 2011 through December 2, 2011 has been restated to reflect a 1:4 reverse share split effective December 2, 2011. |
90 | the Rydex FUNDS annual report | See Notes to Financial Statements. |
INVERSE RUSSELL 2000® 2x STRATEGY FUND
FINANCIAL HIGHLIGHTS
This table is presented to show selected data for a share outstanding throughout each period and to assist shareholders in evaluating a Fund’s performance for the periods presented.
Period Ended | Year Ended | Year Ended | Year Ended | Year Ended | Year Ended | |||||||||||||||||||
March 28, | December 31, | December 31, | December 31, | December 31, | December 31, | |||||||||||||||||||
A-Class | 2013a,b | 2012 | 2011c | 2010c | 2009c | 2008c | ||||||||||||||||||
Per Share Data | ||||||||||||||||||||||||
Net asset value, beginning of period | $ | 14.67 | $ | 22.38 | $ | 29.28 | $ | 58.36 | $ | 142.48 | $ | 161.36 | ||||||||||||
Income (loss) from investment operations: | ||||||||||||||||||||||||
Net investment income (loss)d | (.05 | ) | (.29 | ) | (.53 | ) | (.72 | ) | (1.64 | ) | 2.80 | |||||||||||||
Net gain (loss) on investments (realized and unrealized) | (3.21 | ) | (7.42 | ) | (6.37 | ) | (28.36 | ) | (82.44 | ) | 45.64 | |||||||||||||
Total from investment operations | (3.26 | ) | (7.71 | ) | (6.90 | ) | (29.08 | ) | (84.08 | ) | 48.44 | |||||||||||||
Less distributions from: | ||||||||||||||||||||||||
Net investment income | — | — | — | — | — | (8.44 | ) | |||||||||||||||||
Net realized gains | — | — | — | — | (.04 | ) | (58.88 | ) | ||||||||||||||||
Total distributions | — | — | — | — | (.04 | ) | (67.32 | ) | ||||||||||||||||
Net asset value, end of period | $ | 11.41 | $ | 14.67 | $ | 22.38 | $ | 29.28 | $ | 58.36 | $ | 142.48 | ||||||||||||
Total Returne | (22.22 | %) | (34.45 | %) | (23.57 | %) | (49.83 | %) | (59.01 | %) | 25.10 | % | ||||||||||||
Ratios/Supplemental Data | ||||||||||||||||||||||||
Net assets, end of period (in thousands) | $ | 823 | $ | 997 | $ | 837 | $ | 851 | $ | 1,385 | $ | 1,941 | ||||||||||||
Ratios to average net assets: | ||||||||||||||||||||||||
Net investment income (loss) | (1.86 | %) | (1.69 | %) | (1.95 | %) | (1.66 | %) | (1.70 | %) | 1.50 | % | ||||||||||||
Total expenses | 1.94 | % | 1.81 | % | 1.99 | % | 1.81 | % | 1.83 | % | 2.39 | % | ||||||||||||
Portfolio turnover rate | — | — | — | — | — | 174 | % | |||||||||||||||||
Period Ended | Year Ended | Year Ended | Year Ended | Year Ended | Year Ended | |||||||||||||||||||
March 28, | December 31, | December 31, | December 31, | December 31, | December 31, | |||||||||||||||||||
C-Class | 2013a,b | 2012 | 2011c | 2010c | 2009c | 2008c | ||||||||||||||||||
Per Share Data | ||||||||||||||||||||||||
Net asset value, beginning of period | $ | 13.91 | $ | 21.26 | $ | 28.00 | $ | 56.12 | $ | 137.96 | $ | 159.48 | ||||||||||||
Income (loss) from investment operations: | ||||||||||||||||||||||||
Net investment lossd | (.08 | ) | (.41 | ) | (.68 | ) | (.96 | ) | (2.16 | ) | (.64 | ) | ||||||||||||
Net gain (loss) on investments (realized and unrealized) | (3.02 | ) | (6.94 | ) | (6.06 | ) | (27.16 | ) | (79.64 | ) | 46.44 | |||||||||||||
Total from investment operations | (3.10 | ) | (7.35 | ) | (6.74 | ) | (28.12 | ) | (81.80 | ) | 45.80 | |||||||||||||
Less distributions from: | ||||||||||||||||||||||||
Net investment income | — | — | — | — | — | (8.44 | ) | |||||||||||||||||
Net realized gains | — | — | — | — | (.04 | ) | (58.88 | ) | ||||||||||||||||
Total distributions | — | — | — | — | (.04 | ) | (67.32 | ) | ||||||||||||||||
Net asset value, end of period | $ | 10.81 | $ | 13.91 | $ | 21.26 | $ | 28.00 | $ | 56.12 | $ | 137.96 | ||||||||||||
Total Returne | (22.29 | %) | (34.57 | %) | (24.07 | %) | (50.11 | %) | (59.29 | %) | 23.72 | % | ||||||||||||
Ratios/Supplemental Data | ||||||||||||||||||||||||
Net assets, end of period (in thousands) | $ | 533 | $ | 1,059 | $ | 2,886 | $ | 2,798 | $ | 2,107 | $ | 1,509 | ||||||||||||
Ratios to average net assets: | ||||||||||||||||||||||||
Net investment loss | (2.32 | %) | (2.46 | %) | (2.65 | %) | (2.39 | %) | (2.44 | %) | (0.35 | %) | ||||||||||||
Total expenses | 2.39 | % | 2.57 | % | 2.73 | % | 2.56 | % | 2.59 | % | 3.08 | % | ||||||||||||
Portfolio turnover rate | — | — | — | — | — | 174 | % |
SEE NOTES TO FINANCIAL STATEMENTS. | THE RYDEX FUNDS ANNUAL REPORT | 91 |
INVERSE RUSSELL 2000® 2x STRATEGY FUND
FINANCIAL HIGHLIGHTS (concluded)
This table is presented to show selected data for a share outstanding throughout each period and to assist shareholders in evaluating a Fund’s performance for the periods presented.
Period Ended | Year Ended | Year Ended | Year Ended | Year Ended | Year Ended | |||||||||||||||||||
March 28, | December 31, | December 31, | December 31, | December 31, | December 31, | |||||||||||||||||||
H-Class | 2013a,b | 2012 | 2011c | 2010c | 2009c | 2008c | ||||||||||||||||||
Per Share Data | ||||||||||||||||||||||||
Net asset value, beginning of period | $ | 14.54 | $ | 22.26 | $ | 29.12 | $ | 58.08 | $ | 142.00 | $ | 161.48 | ||||||||||||
Income (loss) from investment operations: | ||||||||||||||||||||||||
Net investment income (loss)d | (.05 | ) | (.30 | ) | (.51 | ) | (.72 | ) | (1.52 | ) | .76 | |||||||||||||
Net gain (loss) on investments (realized and unrealized) | (3.17 | ) | (7.42 | ) | (6.35 | ) | (28.24 | ) | (82.36 | ) | 47.08 | |||||||||||||
Total from investment operations | (3.22 | ) | (7.72 | ) | (6.86 | ) | (28.96 | ) | (83.88 | ) | 47.84 | |||||||||||||
Less distributions from: | ||||||||||||||||||||||||
Net investment income | — | — | — | — | — | (8.44 | ) | |||||||||||||||||
Net realized gains | — | — | — | — | (.04 | ) | (58.88 | ) | ||||||||||||||||
Total distributions | — | — | — | — | (.04 | ) | (67.32 | ) | ||||||||||||||||
Net asset value, end of period | $ | 11.32 | $ | 14.54 | $ | 22.26 | $ | 29.12 | $ | 58.08 | $ | 142.00 | ||||||||||||
Total Returne | (22.15 | %) | (34.68 | %) | (23.56 | %) | (49.86 | %) | (59.07 | %) | 24.71 | % | ||||||||||||
Ratios/Supplemental Data | ||||||||||||||||||||||||
Net assets, end of period (in thousands) | $ | 43,907 | $ | 13,462 | $ | 23,518 | $ | 25,103 | $ | 41,895 | $ | 38,460 | ||||||||||||
Ratios to average net assets: | ||||||||||||||||||||||||
Net investment income (loss) | (1.73 | %) | (1.75 | %) | (1.94 | %) | (1.66 | %) | (1.70 | %) | 0.42 | % | ||||||||||||
Total expenses | 1.81 | % | 1.86 | % | 1.97 | % | 1.81 | % | 1.83 | % | 2.32 | % | ||||||||||||
Portfolio turnover rate | — | — | — | — | — | 174 | % |
a | Percentage amounts for the period, except total return and portfolio turnover rate, have been annualized. |
b | The Fund changed its fiscal year end from December to March in 2013. |
c | Per share amounts for years ended December 31, 2008–December 31, 2010 and the period January 1, 2011 through December 2, 2011 have been restated to reflect a 1:4 share split effective December 2, 2011. |
d | Net investment income (loss) per share was computed using average shares outstanding throughout the period. |
e | Total return does not reflect the impact of any applicable sales charges and has not been annualized. |
92 | THE RYDEX FUNDS ANNUAL REPORT | SEE NOTES TO FINANCIAL STATEMENTS. |
1. Organization and Significant Accounting Policies
Organization
The Rydex Dynamic Funds (the “Trust”) is registered with the SEC under the Investment Company Act of 1940 (the “1940 Act”) as a non-diversified, open-ended investment company, and is authorized to issue an unlimited number of shares (no par value). The Trust offers three separate classes of shares, A-Class shares, C-Class shares, and H-Class shares. Sales of shares of each Class are made without a sales charge at the NAV, with the exception of A-Class Shares. A-Class shares are sold at the NAV, plus the applicable front-end sales charge. The sales charge varies depending on the amount purchased, but will not exceed 4.75%. A-Class share purchases of $1 million or more are exempt from the front-end sales charge but have a 1% contingent deferred sales charge (“CDSC”) if shares are redeemed within 12 months of purchase. C-Class shares have a 1% CDSC if shares are redeemed within 12 months of purchase.
At March 28, 2013, the Trust consisted of eight separate Funds: the S&P 500® 2x Strategy Fund, the Inverse S&P 500® 2x Strategy Fund, the NASDAQ-100® 2x Strategy Fund, the Inverse NASDAQ-100® 2x Strategy Fund, the Dow 2x Strategy Fund, the Inverse Dow 2x Strategy Fund, the Russell 2000® 2x Strategy Fund, and the Inverse Russell 2000® 2x Strategy Fund (the “Funds”).
Guggenheim Investments (“GI”) provides advisory services, and Rydex Fund Services, LLC (“RFS”) provides transfer agent, administrative and accounting services to the Trust. Guggenheim Distributors, LLC (“GDL”) acts as principal underwriter for the Trust. GI, RFS and GDL are affiliated entities.
The Funds are designed and operated to accommodate frequent trading by shareholders and, unlike most mutual funds, offer unlimited exchange privileges with no minimum holding periods or transactions fees, which may cause the Funds to experience high portfolio turnover.
Significant Accounting Policies
Since March 28, 2013 represents the last day during the Funds’ annual period on which the New York Stock Exchange was open for trading, the Funds’ financial statements have been presented through that date to maintain consistency with the Funds’ net asset value calculations used for shareholder transactions.
The following significant accounting policies are in conformity with U.S. generally accepted accounting principles (“U.S. GAAP”) and are consistently followed by the Trust. This requires management to make estimates and assumptions that affect the reported amount of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from these estimates. All time references are based on Eastern Time.
A. The Trust calculates a NAV twice each business day; at 10:45 a.m. and at the close of the New York Stock Exchange (“NYSE”), usually 4:00 p.m. The NAV is calculated using the current market value of each Fund’s total assets, as of the respective time of calculation. These financial statements are based on the March 28, 2013, afternoon NAV.
Equity securities listed on an exchange (NYSE or American Stock Exchange) are valued at the last quoted sales price as of the close of business on the NYSE, usually 4.00 p.m. on the valuation date. Equity securities listed on the NASDAQ market system are valued at the NASDAQ Official Closing Price on the valuation date.
The value of futures is accounted for using the unrealized gain or loss on the contracts that is determined by marking the contracts to their current realized settlement prices. Financial futures contracts are valued at the last quoted sales price on the valuation date for the morning pricing cycle. In the event that the exchange for a specific futures contract closes earlier than 4:00 p.m., the futures contract is valued at the Official Settlement Price of the exchange. However, the underlying securities from which the futures contract value is derived are monitored until 4:00 p.m. to determine if fair valuation would provide a more accurate valuation.
Debt securities with a maturity of greater than 60 days at acquisition are valued at prices that reflect broker/dealer supplied valuations or are obtained from independent pricing services, which may consider the trade activity, treasury spreads, yields or price of bonds of comparable quality, coupon, maturity, and type, as well as prices quoted by dealers who make markets in such securities. Short-term debt securities with a maturity of 60 days or less at acquisition and repurchase agreements are valued at amortized cost, which approximates market value.
The value of equity index swap agreements entered into by a Fund is accounted for using the unrealized gain or loss on the agreements. For the afternoon pricing cycle, unrealized gain or loss is calculated using the close of the NYSE to the relevant index or, if there is an afternoon trade, to the “fill”, adjusted to include dividends accrued, and financing charges and/or interest associated with the swap agreements.
Investments for which market quotations are not readily available are fair valued as determined in good faith by GI under the direction of the Board of Trustees using methods established or ratified by the Board of Trustees. These methods include,
THE RYDEX FUNDS ANNUAL REPORT | 93
NOTES TO FINANCIAL STATEMENTS (continued)
but are not limited to: (i) obtaining general information as to how these securities and assets trade; (ii) in connection with futures contracts and options thereupon, and other derivative investments, obtaining information as to how (a) these contracts and other derivative investments trade in the futures or other derivative markets, respectively, and (b) the securities underlying these contracts and other derivative investments trade in the cash market; and (iii) obtaining other information and considerations, including current values in related markets.
B. Security transactions are recorded on the trade date for financial reporting purposes. Realized gains and losses from securities transactions are recorded using the identified cost basis. Proceeds from lawsuits related to investment holdings are recorded as realized gains in the respective Fund. Dividend income is recorded on the ex-dividend date, net of applicable taxes withheld by foreign countries. Taxable non-cash dividends are recorded as dividend income. Interest income, including amortization of premiums and accretion of discounts, is accrued on a daily basis. Distributions received from investments in REITs are recorded as dividend income on the ex-dividend date, subject to reclassification upon notice of the character of such distribution by the issuer.
C. Distributions of net investment income and net realized gains, if any, are declared and paid at least annually. Distributions are recorded on the ex-dividend date and are determined in accordance with income tax regulations which may differ from U.S. GAAP.
D. Upon entering into a futures contract, the Fund deposits and maintains as collateral such initial margin as required by the exchange on which the transaction is affected. Pursuant to the contract, the Fund agrees to receive from or pay to the broker an amount of cash equal to the daily fluctuation in value of the contract. Such receipts or payments are known as variation margin and are recorded by the Fund as unrealized gains or losses. When the contract is closed, the Fund records a realized gain or loss equal to the difference between the value of the contract at the time it was opened and the value at the time it was closed.
E. Swap agreements are marked-to-market daily and the change, if any, is recorded as unrealized gain or loss. Payments received or made as a result of an agreement or termination of the agreement are recognized as realized gains or losses.
F. Certain U.S. Government and Agency Obligations are traded on a discount basis; the interest rates shown on the Schedules of Investments reflect the effective rates paid at the time of purchase by the Funds. Other securities bear interest at the rates shown, payable at fixed dates through maturity.
G. The Funds may leave cash overnight in their cash account with the custodian, U.S. Bank. Periodically, a Fund may have cash due to the custodian bank as an overdraft balance. A fee is incurred on this overdraft, calculated by multiplying the overdraft by a rate based on the federal funds rate.
Segregated cash with the broker is held as collateral for investments in derivative instruments such as futures contracts or swap agreements.
H. Interest and dividend income, most expenses, all realized gains and losses, and all unrealized gains and losses are allocated to the Classes based upon the value of the outstanding shares in each Class. Certain costs, such as distribution fees relating to A-Class shares and H-Class shares and service and distribution fees related to C-Class shares, are charged directly to specific Classes. In addition, certain expenses have been allocated to the individual Funds in the Trust on a pro rata basis upon the respective aggregate net assets of each Fund included in the Trust.
I. Throughout the normal course of business, the Funds enter into contracts that contain a variety of representations and warranties which provide general indemnifications. The Funds’ maximum exposure under these arrangements is unknown, as this would involve future claims that may be made against the Funds and/or their affiliates that have not yet occurred. However, based on experience, the Funds expect the risk of loss to be remote.
2. Financial Instruments
As part of their investment strategy, the Funds utilize a variety of derivative instruments including futures and swap agreements. These investments involve, to varying degrees, elements of market risk and risks in excess of the amounts recognized in the Statements of Assets and Liabilities.
A futures contract is an agreement to purchase (long) or sell (short) an agreed amount of securities or other instruments at a set price for delivery at a future date. There are significant risks associated with a Fund’s or an underlying fund’s use of futures contracts and related options, including (i) there may be an imperfect or no correlation between the changes in market value of the underlying asset and the prices of futures contracts; (ii) there may not be a liquid secondary market for a futures contract; (iii) trading restrictions or limitations may be imposed by an exchange; and (iv) government regulations may restrict trading in futures contracts. When investing in futures, there is minimal counterparty credit risk to the Fund because futures are exchange-traded and the exchange’s clearinghouse, as counterparty to all exchange-traded futures, guarantees against default.
94 | THE RYDEX FUNDS ANNUAL REPORT
NOTES TO FINANCIAL STATEMENTS (continued)
A swap is an agreement that obligates two parties to exchange a series of cash flows at specified intervals based upon or calculated by reference to changes in specified prices or rates for a specified amount of an underlying asset. A Fund bears the risk of loss of the amount expected to be received under a swap agreement in the event of the default or bankruptcy of a swap agreement counterparty. Additionally, there is no guarantee that a Fund or an underlying fund could eliminate its exposure under an outstanding swap agreement by entering into an offsetting swap agreement with the same or another party.
In conjunction with the use of futures and swap agreements, the Funds are required to maintain collateral in various forms. The Funds use, where appropriate, depending on the financial instrument utilized and the broker involved, margin deposits at the broker, cash and/or securities segregated at the custodian bank, discount notes, or the repurchase agreements allocated to each Fund.
The Trust has established counterparty credit guidelines and enters into transactions only with financial institutions of investment grade or better. The Trust monitors the counterparty credit risk.
3. Fees and Other Transactions with Affiliates
Under the terms of an investment advisory contract, the Trust pays GI investment advisory fees calculated at an annualized rate of 0.90% of the average daily net assets of each of the Funds.
RFS provides transfer agent and administrative services to the Funds for fees calculated at an annualized rate of 0.25% of the average daily net assets of each of the Funds. RFS also provides accounting services to the Funds for fees calculated at an annualized rate of 0.15% of the average daily net assets of each Fund.
RFS engages external service providers to perform other necessary services for the Trust, such as audit and accounting related services, legal services, custody, printing and mailing, etc., on a pass-through basis. Such expenses are allocated to various Funds within the complex based on relative net assets.
The Trust has adopted a Distribution Plan applicable to A-Class shares and H-Class shares for which GDL and other firms that provide distribution and/or shareholder services (“Service Providers”) may receive compensation. If a Service Provider provides distribution services, the Trust will pay distribution fees to GDL at an annual rate not to exceed 0.25% of average daily net assets, pursuant to Rule 12b-1 of the 1940 Act. GDL, in turn, will pay the Service Provider out of its fees. GDL may, at its discretion, retain a portion of such payments to compensate itself for distribution services.
The Trust has adopted a separate Distribution and Shareholder Services Plan applicable to its C-Class shares that allows the Funds to pay annual distribution and service fees of 1.00% of the Funds’ C-Class shares average daily net assets. The annual 0.25% service fee compensates the shareholder’s financial advisor for providing ongoing services to the shareholder. The annual distribution fee of 0.75% reimburses GDL for paying the shareholder’s financial advisor an ongoing sales commission. GDL advances the first year’s service and distribution fees to the financial advisor. GDL retains the service and distribution fees on accounts with no authorized dealer of record.
For the period ended March 28, 2013, GDL retained sales charges of $13,768 relating to sales of A-Class shares of the Trust.
Certain officers and trustees of the Trust are also officers of GI, RFS and GDL.
4. Fair Value Measurement
In accordance with U.S. GAAP, fair value is defined as the price that the Fund would receive to sell an investment or pay to transfer a liability in an orderly transaction with an independent buyer in the principal market, or in the absence of a principal market the most advantageous market for the investment or liability. A three-tier hierarchy is utilized to distinguish between (1) inputs that reflect the assumptions market participants would use in pricing an asset or liability developed based on market data obtained from sources independent of the reporting entity (observable inputs) and (2) inputs that reflect the reporting entity’s own assumptions about the assumptions market participants would use in pricing an asset or liability developed based on the best information available in the circumstances (unobservable inputs) and to establish classification of fair value measurements for disclosure purposes. Various inputs are used in determining the value of the Funds’ investments. The inputs are summarized in the three broad levels listed below:
Level 1 — quoted prices in active markets for identical securities.
Level 2 — other significant observable inputs (including quoted prices for similar securities, interest rates, prepayment speeds, credit risk, etc.).
Level 3 — significant unobservable inputs (including the fund’s own assumptions used to determine the fair value of investments).
THE RYDEX FUNDS ANNUAL REPORT | 95
NOTES TO FINANCIAL STATEMENTS (continued)
The inputs or methodologies used for valuing securities are not necessarily an indication of the risk associated with investing in those securities.
The following table summarizes the inputs used to value the Funds’ net assets at March 28, 2013:
Level 1 | Level 1 | Level 2 | Level 2 | Level 3 | ||||||||||||||||||||
Investments | Other Financial | Investments | Other Financial | Investments | ||||||||||||||||||||
In Securities | Instruments* | In Securities | Instruments* | In Securities | Total | |||||||||||||||||||
Assets | ||||||||||||||||||||||||
S&P 500® 2x Strategy Fund | $ | 55,400,856 | $ | 28,019 | $ | 62,573,745 | $ | 473,191 | $ | — | $ | 118,475,811 | ||||||||||||
Inverse S&P 500® 2x Strategy Fund | — | — | 43,916,970 | — | — | 43,916,970 | ||||||||||||||||||
NASDAQ-100® 2x Strategy Fund | 276,707,793 | 713,848 | 32,646,990 | 956,850 | — | 311,025,481 | ||||||||||||||||||
Inverse NASDAQ-100® 2x Strategy Fund | — | — | 42,764,341 | — | — | 42,764,341 | ||||||||||||||||||
Dow 2x Strategy Fund | 42,352,692 | 50,736 | 4,093,596 | 56,574 | — | 46,553,598 | ||||||||||||||||||
Inverse Dow 2x Strategy Fund | — | — | 6,357,840 | — | — | 6,357,840 | ||||||||||||||||||
Russell 2000® 2x Strategy Fund | 33,486,354 | 32,799 | 53,681,234 | 130,972 | — | 87,331,359 | ||||||||||||||||||
Inverse Russell 2000® 2x Strategy Fund | — | 18,422 | 10,476,841 | — | — | 10,495,263 | ||||||||||||||||||
Liabilities | ||||||||||||||||||||||||
Inverse S&P 500® 2x Strategy Fund | $ | — | $ | 10,915 | $ | — | $ | 401,453 | $ | — | $ | 412,368 | ||||||||||||
Inverse NASDAQ-100® 2x Strategy Fund | — | 1,479 | — | 344,038 | — | 345,517 | ||||||||||||||||||
Inverse Dow 2x Strategy Fund | — | 5,234 | — | 47,853 | — | 53,087 | ||||||||||||||||||
Inverse Russell 2000® 2x Strategy Fund | — | — | — | 60,495 | — | 60,495 |
* Other financial instruments may include futures contracts and/or swaps, which are reported as unrealized gain/loss at period end.
For the period ended March 28, 2013, there were no transfers between levels.
5. Repurchase Agreements
The Funds transfer uninvested cash balances into a single joint account, the daily aggregate balance of which is invested in one or more repurchase agreements collateralized by obligations of the U.S. Treasury and U.S. Government Agencies. The collateral is in the possession of the Funds’ custodian and is evaluated to ensure that its market value exceeds, at a minimum, 102% of the original face amount of the repurchase agreements. Each Fund holds a pro rata share of the collateral based on the dollar amount of the repurchase agreement entered into by each Fund.
At March 28, 2013, the repurchase agreements in the joint account were as follows:
Counterparty and Terms of Agreement | Face Value | Repurchase Price | Collateral | Par Value | Fair Value | |||||||||||||
Mizuho Financial Group, Inc. | U.S. Treasury Bills | |||||||||||||||||
0.11% | 0.00% | |||||||||||||||||
Due 04/01/13 | $ | 193,258,106 | $ | 193,260,468 | 09/05/13 – 02/06/14 | $ | 192,908,900 | $ | 192,739,115 | |||||||||
U.S. Treasury Note | ||||||||||||||||||
1.75% | ||||||||||||||||||
05/31/16 | 4,158,900 | 4,384,392 | ||||||||||||||||
Credit Suisse Group | U.S. Treasury Note | |||||||||||||||||
0.10% | 0.50% | |||||||||||||||||
Due 04/01/13 | 22,549,529 | 22,549,654 | 07/31/17 | 22,992,800 | 23,000,873 |
In the event of counterparty default, the Funds have the right to collect the collateral to offset losses incurred. There is potential loss to the Funds in the event the Funds are delayed or prevented from exercising their rights to dispose of the collateral securities, including the risk of a possible decline in the value of the underlying securities during the period while the Funds seek to assert their rights. The Funds’ investment advisor, acting under the supervision of the Board of Trustees, reviews the value of the collateral and the creditworthiness of those banks and dealers with which the Funds enter into repurchase agreements to evaluate potential risks.
6. Derivative Investment Holdings Categorized by Risk Exposure
U.S. GAAP requires disclosures to enable investors to better understand how and why the Funds use derivative instruments, how these derivative instruments are accounted for and their effects on the Funds’ financial position and results of operations.
96 | THE RYDEX FUNDS ANNUAL REPORT
NOTES TO FINANCIAL STATEMENTS (continued)
During the period ended March 28, 2013, the Funds sought to gain exposure to their respective benchmarks by investing in financial-linked derivative instruments, including swap agreements and futures. The following table represents the notional amount of derivative instruments outstanding, as an approximate percentage of the Funds’ net assets on a daily basis.
Approximate percentage of | ||||||||
Fund’s net assets on a daily basis | ||||||||
Fund | Long | Short | ||||||
S&P 500® 2x Strategy Fund | 140 | % | — | |||||
Inverse S&P 500® 2x Strategy Fund | — | 200 | % | |||||
NASDAQ-100® 2x Strategy Fund | 115 | % | — | |||||
Inverse NASDAQ-100® 2x Strategy Fund | — | 200 | % | |||||
Dow 2x Strategy Fund | 125 | % | — | |||||
Inverse Dow 2x Strategy Fund | — | 200 | % | |||||
Russell 2000® 2x Strategy Fund | 140 | % | — | |||||
Inverse Russell 2000® 2x Strategy Fund | — | 200 | % |
The following is a summary of the location of derivative investments on the Funds’ Statements of Assets and Liabilities as of March 28, 2013:
Derivative Investment Type | Asset Derivatives | Liability Derivatives | ||
Equity contracts | Variation margin | Variation margin | ||
Unrealized appreciation on swap agreements | Unrealized depreciation on swap agreements |
The following table sets forth the fair value of the Funds’ derivative investments categorized by primary risk exposure at March 28, 2013:
Asset Derivative Investments Value | ||||||||||||
Futures | Swaps | Total Value at | ||||||||||
Equity | Equity | March 28, | ||||||||||
Fund | Contracts* | Contracts | 2013 | |||||||||
S&P 500® 2x Strategy Fund | $ | 28,019 | $ | 473,191 | $ | 501,210 | ||||||
NASDAQ-100® 2x Strategy Fund | 713,848 | 956,850 | 1,670,698 | |||||||||
Dow 2x Strategy Fund | 50,736 | 56,574 | 107,310 | |||||||||
Russell 2000® 2x Strategy Fund | 32,799 | 130,972 | 163,771 | |||||||||
Inverse Russell 2000® 2x Strategy Fund | 18,422 | — | 18,422 | |||||||||
Liability Derivative Investments Value | ||||||||||||
Futures | Swaps | Total Value at | ||||||||||
Equity | Equity | March 28, | ||||||||||
Fund | Contracts* | Contracts | 2013 | |||||||||
Inverse S&P 500® 2x Strategy Fund | $ | 10,915 | $ | 401,453 | $ | 412,368 | ||||||
Inverse NASDAQ-100® 2x Strategy Fund | 1,479 | 344,038 | 345,517 | |||||||||
Inverse Dow 2x Strategy Fund | 5,234 | 47,853 | 53,087 | |||||||||
Inverse Russell 2000® 2x Strategy Fund | — | 60,495 | 60,495 |
* Includes cumulative appreciation (depreciation) of futures contracts as reported on the Schedules of Investments. Only current day’s variation margin is reported within the Statements of Assets and Liabilities.
The following is a summary of the location of derivative investments on the Funds’ Statements of Operations for the period ended March 28, 2013:
Derivative Investment Type | Location of Gain (Loss) on Derivatives | |
Equity contracts | Net realized gain (loss) on swap agreements | |
Net realized gain (loss) on futures contracts | ||
Net change in unrealized appreciation (depreciation) on swap agreements | ||
Net change in unrealized appreciation (depreciation) on futures contracts |
THE RYDEX FUNDS ANNUAL REPORT | 97
NOTES TO FINANCIAL STATEMENTS (continued)
The following is a summary of the Funds’ realized gain (loss) and change in unrealized appreciation (depreciation) on derivative investments recognized on the Statements of Operations categorized by primary risk exposure for the period ended March 28, 2013:
Realized Gain (Loss) on Derivative Investments Recognized on the Statements of Operations | ||||||||||||
Futures | Swaps | |||||||||||
Equity | Equity | |||||||||||
Fund | Contracts | Contracts | Total | |||||||||
S&P 500® 2x Strategy Fund | $ | 2,599,218 | $ | 12,712,631 | $ | 15,311,849 | ||||||
Inverse S&P 500® 2x Strategy Fund | (2,455,666 | ) | (11,633,856 | ) | (14,089,522 | ) | ||||||
NASDAQ-100® 2x Strategy Fund | (598,576 | ) | 12,039,981 | 11,441,405 | ||||||||
Inverse NASDAQ-100® 2x Strategy Fund | (1,315,974 | ) | (5,445,566 | ) | (6,761,540 | ) | ||||||
Dow 2x Strategy Fund | 743,235 | 3,263,051 | 4,006,286 | |||||||||
Inverse Dow 2x Strategy Fund | (442,055 | ) | (2,639,208 | ) | (3,081,263 | ) | ||||||
Russell 2000® 2x Strategy Fund | 2,143,577 | 6,811,757 | 8,955,334 | |||||||||
Inverse Russell 2000® 2x Strategy Fund | (1,528,798 | ) | (4,627,868 | ) | (6,156,666 | ) | ||||||
Change in Unrealized Appreciation (Depreciation) on Derivative Investments Recognized on the Statements of Operations | ||||||||||||
Futures | Swaps | |||||||||||
Equity | Equity | |||||||||||
Fund | Contracts | Contracts | Total | |||||||||
S&P 500® 2x Strategy Fund | $ | (253,540 | ) | $ | (433,894 | ) | $ | (687,434 | ) | |||
Inverse S&P 500® 2x Strategy Fund | 108,641 | (168,735 | ) | (60,094 | ) | |||||||
NASDAQ-100® 2x Strategy Fund | 397,869 | (1,528,735 | ) | (1,130,866 | ) | |||||||
Inverse NASDAQ-100® 2x Strategy Fund | (209,466 | ) | 506,887 | 297,421 | ||||||||
Dow 2x Strategy Fund | 61,025 | (62,690 | ) | (1,665 | ) | |||||||
Inverse Dow 2x Strategy Fund | (31,126 | ) | 17,474 | (13,652 | ) | |||||||
Russell 2000® 2x Strategy Fund | (221,148 | ) | (697,044 | ) | (918,192 | ) | ||||||
Inverse Russell 2000® 2x Strategy Fund | (4,391 | ) | 342,250 | 337,859 | ||||||||
The following is a summary of the Funds’ realized gain (loss) and change in unrealized appreciation (depreciation) on derivative investments recognized on the Statements of Operations categorized by primary risk exposure for the year ended December 31, 2012: | ||||||||||||
Realized Gain (Loss) on Derivative Investments Recognized in the Statements of Operations | ||||||||||||
Futures | Swaps | |||||||||||
Equity | Equity | |||||||||||
Fund | Contracts | Contracts | Total | |||||||||
S&P 500® 2x Strategy Fund | $ | 3,979,513 | $ | 14,506,890 | $ | 18,486,403 | ||||||
Inverse S&P 500® 2x Strategy Fund | (11,504,725 | ) | (20,311,435 | ) | (31,816,160 | ) | ||||||
NASDAQ-100® 2x Strategy Fund | 12,388,497 | 26,622,145 | 39,010,642 | |||||||||
Inverse NASDAQ-100® 2x Strategy Fund | (2,536,320 | ) | (13,548,358 | ) | (16,084,678 | ) | ||||||
Dow 2x Strategy Fund | 1,680,643 | 2,176,372 | 3,857,015 | |||||||||
Inverse Dow 2x Strategy Fund | (2,671,076 | ) | (3,760,689 | ) | (6,431,765 | ) | ||||||
Russell 2000® 2x Strategy Fund | (641,859 | ) | 12,343,065 | 11,701,206 | ||||||||
Inverse Russell 2000® 2x Strategy Fund | (2,590,256 | ) | (3,396,086 | ) | (5,986,342 | ) | ||||||
Change in Unrealized Appreciation (Depreciation) on Derivative Investments Recognized in the Statements of Operations | ||||||||||||
Futures | Swaps | |||||||||||
Equity | Equity | |||||||||||
Fund | Contracts | Contracts | Total | |||||||||
S&P 500® 2x Strategy Fund | $ | 191,680 | $ | 1,544,160 | $ | 1,735,840 | ||||||
Inverse S&P 500® 2x Strategy Fund | (204,453 | ) | (851,124 | ) | (1,055,577 | ) | ||||||
NASDAQ-100® 2x Strategy Fund | (324,427 | ) | 2,973,685 | 2,649,258 | ||||||||
Inverse NASDAQ-100® 2x Strategy Fund | 184,062 | (1,208,830 | ) | (1,024,768 | ) | |||||||
Dow 2x Strategy Fund | (342,711 | ) | 280,783 | (61,928 | ) | |||||||
Inverse Dow 2x Strategy Fund | 21,437 | (206,538 | ) | (185,101 | ) | |||||||
Russell 2000® 2x Strategy Fund | (127,827 | ) | 943,723 | 815,896 | ||||||||
Inverse Russell 2000® 2x Strategy Fund | (12,374 | ) | (726,601 | ) | (738,975 | ) |
98 | THE RYDEX FUNDS ANNUAL REPORT
NOTES TO FINANCIAL STATEMENTS (continued)
7. Federal Income Tax Information
The Funds intend to comply with the provisions of Subchapter M of the Internal Revenue Code applicable to regulated investment companies and will distribute substantially all taxable net investment income and capital gains sufficient to relieve the Funds from all, or substantially all, federal income, excise and state income taxes. Therefore, no provision for federal or state income tax is required.
Tax positions taken or expected to be taken in the course of preparing the Funds’ tax returns are evaluated to determine whether the tax positions are “more-likely-than-not” of being sustained by the applicable tax authority. Tax positions not deemed to meet the more-likely-than-not threshold would be recorded as a tax benefit or expense in the current year. Management has analyzed the Funds’ tax positions taken, or to be taken, on Federal income tax returns for all open tax years (fiscal years 2010 – 2013), and has concluded that no provision for income tax is required in the Funds’ financial statements.
The RIC Modernization Act of 2010 was signed into law on December 22, 2010. It simplified some of the tax provisions applicable to regulated investment companies, the tax reporting to their shareholders and improved the tax efficiency of certain fund structures. The changes were generally effective for taxable years beginning after the date of enactment.
One of the more prominent changes addresses capital loss carryforwards. Funds will be permitted to carry forward capital losses incurred in taxable years beginning after December 22, 2010 for an unlimited period. However, any losses incurred during those future taxable years will be required to be utilized prior to the losses incurred in pre-enactment taxable years. Under pre-enactment law, capital losses could be carried forward for eight years, and carried forward as short-term capital, irrespective of the character of the original loss. As a result of this ordering rule, pre-enactment capital loss carryforwards may potentially expire unused. Additionally, post-enactment capital losses that are carried forward will retain their character as either short-term or long-term capital losses rather than being considered all short-term as under previous law.
Tax basis capital losses in excess of capital gains are carried forward to offset future net capital gains. For the period ended March 28, 2013, the following capital loss carryforward amounts expired, were used, or were permanently lost due to loss limitation rules in Section 382 of the Internal Revenue Code:
Fund | Amount | |||
S&P 500® 2x Strategy Fund | $ | (15,163,880 | ) | |
Inverse S&P 500® 2x Strategy Fund | (58,089,386 | ) | ||
NASDAQ-100® 2x Strategy Fund | (15,244,059 | ) | ||
Inverse Nasdaq 100® 2x Strategy Fund | (38,003,206 | ) | ||
Dow 2x Strategy Fund | (890,916 | ) | ||
Russell 2000® 2x Strategy Fund | (9,843,594 | ) |
The Funds did not pay distributions during the period ended March 28, 2013 and during the year ended December 31, 2012.
The tax character of distributions paid during the year ended December 31, 2011 was as follows:
Ordinary | Long-Term | Total | ||||||||||
Fund | Income | Capital Gain | Distributions | |||||||||
Dow 2x Strategy Fund | $ | 5,957 | $ | — | $ | 5,957 |
The tax character of distributable earnings/(accumulated losses) at March 28, 2013 was as follows:
Undistributed | Undistributed | Net Unrealized | ||||||||||||||
Ordinary | Long-Term | Appreciation/ | Capital Loss | |||||||||||||
Fund | Income | Capital Gain | Depreciation | Carryforward1 | ||||||||||||
S&P 500® 2x Strategy Fund | $ | — | $ | — | $ | 4,943,721 | $ | (31,662,054 | ) | |||||||
Inverse S&P 500® 2x Strategy Fund | — | — | (399,445 | ) | (404,880,578 | ) | ||||||||||
NASDAQ-100® 2x Strategy Fund | — | — | 49,926,123 | (68,190,965 | ) | |||||||||||
Inverse NASDAQ-100® 2x Strategy Fund | — | — | (342,090 | ) | (402,104,732 | ) | ||||||||||
Dow 2x Strategy Fund | — | — | (554,819 | ) | (15,278,171 | ) | ||||||||||
Inverse Dow 2x Strategy Fund | — | — | (47,853 | ) | (61,823,263 | ) | ||||||||||
Russell 2000® 2x Strategy Fund | — | — | 2,944,508 | (975,515 | ) | |||||||||||
Inverse Russell 2000® 2x Strategy Fund | — | — | (60,495 | ) | (111,976,694 | ) |
Note: Capital Loss Carryforward amounts may be limited due to Federal income tax regulations.
1 A summary of the expiration of the aforementioned Capital Loss Carryforward is as follows:
THE RYDEX FUNDS ANNUAL REPORT | 99
NOTES TO FINANCIAL STATEMENTS (continued)
Total | ||||||||||||||||||||||||||||||||
Expires in | Expires in | Expires in | Expires in | Expires in | Unlimited | Capital Loss | ||||||||||||||||||||||||||
Fund | 2014 | 2015 | 2016 | 2017 | 2018 | Short Term | Long Term | Carryforward | ||||||||||||||||||||||||
S&P 500® 2x Strategy Fund | $ | — | $ | — | $ | (31,662,054 | ) | $ | — | $ | — | $ | — | $ | — | $ | (31,662,054 | ) | ||||||||||||||
Inverse S&P 500® 2x Strategy Fund | (104,028,982 | ) | (22,695,519 | ) | - | (68,859,274 | ) | (116,286,366 | ) | (77,983,901 | ) | (15,026,536 | ) | (404,880,578 | ) | |||||||||||||||||
NASDAQ-100® 2x Strategy Fund | - | - | (68,190,965 | ) | - | - | - | - | (68,190,965 | ) | ||||||||||||||||||||||
Inverse NASDAQ-100® 2x Strategy Fund | (95,162,970 | ) | (111,374,734 | ) | - | (100,324,296 | ) | (50,483,391 | ) | (41,188,655 | ) | (3,570,686 | ) | (402,104,732 | ) | |||||||||||||||||
Dow 2x Strategy Fund | - | - | (7,559,724 | ) | (7,718,447 | ) | - | - | - | (15,278,171 | ) | |||||||||||||||||||||
Inverse Dow 2x Strategy Fund | - | - | - | (25,983,806 | ) | (19,579,661 | ) | (14,386,105 | ) | (1,873,691 | ) | (61,823,263 | ) | |||||||||||||||||||
Russell 2000® 2x Strategy Fund | - | - | - | (975,515 | ) | - | - | - | (975,515 | ) | ||||||||||||||||||||||
Inverse Russell 2000® 2x Strategy Fund | - | - | - | (53,655,098 | ) | (28,383,576 | ) | (25,234,050 | ) | (4,703,970 | ) | (111,976,694 | ) |
Net investment income and net realized gains (losses) may differ for financial statement and tax purposes because of temporary or permanent book/tax differences. These differences are primarily due to wash sales, mark-to-market of passive foreign investment companies, and foreign currency gains and losses. Additional differences may result from the tax treatment of net investment losses and expired capital loss carryforwards. To the extent these differences are permanent, reclassifications are made to the appropriate equity accounts in the period that the differences arise. These reclassifications have no effect on net assets or NAV per share.
On the Statements of Assets and Liabilities the following adjustments were made for permanent book/tax differences:
Undistributed | Accumulated | |||||||||||
Paid In | Net Investment | Net Realized | ||||||||||
Fund | Capital | Income | Gain (Loss) | |||||||||
S&P 500® 2x Strategy Fund | $ | (168,386 | ) | $ | 168,633 | $ | (247 | ) | ||||
Inverse S&P 500® 2x Strategy Fund | (58,375,234 | ) | 285,847 | 58,089,387 | ||||||||
NASDAQ-100® 2x Strategy Fund | (485,956 | ) | 485,956 | — | ||||||||
Inverse NASDAQ-100® 2x Strategy Fund | (38,206,909 | ) | 203,703 | 38,003,206 | ||||||||
Dow 2x Strategy Fund | (65,126 | ) | 65,126 | — | ||||||||
Inverse Dow 2x Strategy Fund | (66,531 | ) | 66,532 | (1 | ) | |||||||
Russell 2000® 2x Strategy Fund | (172,078 | ) | 168,460 | 3,618 | ||||||||
Inverse Russell 2000® 2x Strategy Fund | (124,141 | ) | 124,141 | — |
At March 28, 2013, the cost of securities for Federal income tax purposes, the aggregate gross unrealized gain for allsecurities for which there was an excess of value over tax cost and the aggregate gross unrealized loss for all securities for which there was an excess of tax cost over value, were as follows:
Tax | Tax | Net | ||||||||||||||
Tax | Unrealized | Unrealized | Unrealized | |||||||||||||
Fund | Cost | Gain | Loss | Gain | ||||||||||||
S&P 500® 2x Strategy Fund | $ | 113,504,070 | $ | 5,281,615 | $ | (811,084 | ) | $ | 4,470,531 | |||||||
Inverse S&P 500® 2x Strategy Fund | 43,914,962 | 2,008 | — | 2,008 | ||||||||||||
NASDAQ-100® 2x Strategy Fund | 260,385,511 | 52,025,709 | (3,056,437 | ) | 48,969,272 | |||||||||||
Inverse NASDAQ-100® 2x Strategy Fund | 42,762,393 | 1,948 | — | 1,948 | ||||||||||||
Dow 2x Strategy Fund | 47,057,682 | — | (611,394 | ) | (611,394 | ) | ||||||||||
Inverse Dow 2x Strategy Fund | 6,357,840 | — | — | — | ||||||||||||
Russell 2000® 2x Strategy Fund | 84,354,052 | 3,183,390 | (369,854 | ) | 2,813,536 | |||||||||||
Inverse Russell 2000® 2x Strategy Fund | 10,476,841 | — | — | — |
Appropriate tax adjustments have been made to the tax cost of investments, accumulated earnings on a tax basis, capital loss carryforwards, post-October losses and utilized capital loss carryforwards in accordance with March 31, 2013 tax year end of the Funds.
8. Securities Transactions
For the period ended March 28, 2013, the cost of purchases and proceeds from sales of investment securities, excluding government securities and short-term investments, were as follows:
Fund | Purchases | Sales | ||||||
S&P 500® 2x Strategy Fund | $ | 263,394 | $ | 15,211,646 | ||||
Inverse S&P 500® 2x Strategy Fund | — | — | ||||||
NASDAQ-100® 2x Strategy Fund | 258,989,384 | 108,100,910 | ||||||
Inverse NASDAQ-100® 2x Strategy Fund | — | — | ||||||
Dow 2x Strategy Fund | 212,666,931 | 188,641,238 | ||||||
Inverse Dow 2x Strategy Fund | — | — | ||||||
Russell 2000® 2x Strategy Fund | 23,148,776 | 29,361,264 | ||||||
Inverse Russell 2000® 2x Strategy Fund | — | — |
100 | THE RYDEX FUNDS ANNUAL REPORT
NOTES TO FINANCIAL STATEMENTS (continued)
9. Line of Credit
The Trust, along with other affiliated trusts, secured an uncommitted, $75,000,000 line of credit from U.S. Bank, N.A., which expires June 15, 2013. This line of credit is reserved for emergency or temporary purposes. Borrowings, if any, under this arrangement bear interest equal to the Prime Rate, minus 2%, which shall be paid monthly, averaging 1.25% for the period ended March 28, 2013. The Funds did not have any borrowings under this agreement at March 28, 2013.
The average daily balances borrowed for the period ended March 28, 2013 were as follows:
Fund | Average Daily Balance | |||
S&P 500® 2x Strategy Fund | $ | 3,828 | ||
NASDAQ-100® 2x Strategy Fund | 21,874 | |||
Dow 2x Strategy Fund | 3,069 | |||
Russell 2000® 2x Strategy Fund | 27,345 |
The average daily balances borrowed for the year ended December 31, 2012 were as follows:
Fund | Average Daily Balance | |||
S&P 500® 2x Strategy Fund | $ | 174,249 | ||
NASDAQ-100® 2x Strategy Fund | 56,847 | |||
Dow 2x Strategy Fund | 6,986 | |||
Russell 2000® 2x Strategy Fund | 19,598 |
10. Portfolio Securities Loaned
The Funds may lend their securities to approved brokers to earn additional income. Security lending income shown on the statement of operations is shown net of rebates paid to the borrowers and earnings on cash collateral investments shared with the lending agent. Within this arrangement, the Funds act as the lender, Credit Suisse acts as the lending agent, and other approved registered broker dealers act as the borrowers. The Funds receive cash collateral, valued at 102% of the value of the securities on loan. Under the terms of the Funds’ securities lending agreement with Credit Suisse, cash collateral is invested in one or more joint repurchase agreements collateralized by obligations of the U.S. Treasury or Government Agencies and cash. The Funds bear the risk of loss on cash collateral investments. Collateral is maintained over the life of the loan in an amount not less than the value of loaned securities, as determined at the close of fund business each day; any additional collateral required due to changes in security values is delivered to the Funds the next business day. Although the collateral mitigates the risk, the Funds could experience a delay in recovering its securities and a possible loss of income or value if the borrower fails to return the securities. The Funds have the right under the securities lending agreement to recover the securities from the borrower on demand.
At March 28, 2013, the Funds participated in securities lending as follows:
Value of | Cash | ||||||||
Fund | Securities Loaned | Collateral Received | |||||||
S&P 500® 2x Strategy Fund | $ | 40,486 | $ | 41,279 | |||||
NASDAQ-100® 2x Strategy Fund | 466,274 | 479,419 | |||||||
Russell 2000® 2x Strategy Fund | 182,127 | 189,156 |
The following represents a breakdown of the collateral for the joint repurchase agreements at March 28, 2013:
Counterparty and Terms of Agreement | Face Value | Repurchase Price | Collateral | Par Value | Fair Value | |||||||||||||
HSBC Securities (USA), Inc. | Fannie Mae | |||||||||||||||||
0.17% | 0.00% | |||||||||||||||||
Due 04/01/13 | $ | 312,546 | $ | 312,552 | 11/15/17 | $ | 60,825 | $ | 58,121 | |||||||||
Fannie Mae | ||||||||||||||||||
0.00% | ||||||||||||||||||
11/15/19 | 291,375 | 260,679 | ||||||||||||||||
RBS Securities, Inc. | Federal Home Loan Bank | |||||||||||||||||
0.18% | 0.375% | |||||||||||||||||
Due 04/01/13 | 397,308 | 397,316 | 10/18/13 | 39,938 | 40,051 | |||||||||||||
Fannie Mae | ||||||||||||||||||
0.50% | ||||||||||||||||||
05/27/15 | 363,375 | 365,188 |
THE RYDEX FUNDS ANNUAL REPORT | 101
NOTES TO FINANCIAL STATEMENTS (concluded)
11. Legal Proceedings
Tribune Company
Rydex Dynamic Funds has been named as a defendant and a putative member of the proposed defendant class of shareholders in the case entitled Official Committee of Unsecured Creditors of Tribune Co. v. FitzSimons (In re Tribune Co.), No. 12-2652 (S.D.N.Y.) (formerly Adv. Pro. No. 10-54010 (Bankr. D. Del.)) (the “FitzSimons action”), as a result of ownership of shares in the Tribune Company (“Tribune”) in 2007 by certain series of the Rydex Dynamic Funds when Tribune effected a leveraged buyout transaction (“LBO”) by which Tribune converted to a privately-held company. In its complaint, the Unsecured Creditors Committee (the “UCC”) has alleged that, in connection with the LBO, insiders and major shareholders were overpaid for their Tribune stock using financing that the insiders knew would, and ultimately did, leave the Tribune insolvent. The UCC has asserted claims against certain insiders, major shareholders, professional advisers, and others involved in the LBO, and is attempting to obtain from shareholders, including Rydex Dynamic Funds, the proceeds paid out in connection with the LBO.
In June 2011, a group of Tribune creditors, not including the UCC, filed multiple actions involving state law constructive fraudulent conveyance claims against former Tribune shareholders (the “SLCFC actions”). Rydex Dynamic Funds has been named as a defendant in one or more of these suits.
The FitzSimons action and the SLCFC actions have been consolidated with the majority of the other Tribune LBO-related lawsuits in a multidistrict litigation proceeding captioned In re Tribune Company Fraudulent Conveyance Litig., No. 11-md-2696 (S.D.N.Y.) (the “MDL Proceeding”). On November 6, 2012, the defendants moved to dismiss the SLCFC actions. On December 21, 2012, the plaintiffs filed a memorandum in opposition to the motion to dismiss. On February 4, 2013, the defendants filed a reply in support of the motion to dismiss. The Court has not issued a decision on the motion.
None of these lawsuits allege any wrongdoing on the part of Rydex Dynamic Funds. The following series of Rydex Dynamic Funds held shares of Tribune and tendered these shares as part of Tribune’s LBO: S&P 500® 2x Strategy Fund (the “Fund”). The value of the proceeds received by the foregoing Fund was $52,020. At this stage of the proceedings, Rydex Dynamic Funds is not able to make a reliable predication as to the outcome of these lawsuits or the effect, if any, on a Fund’s net asset value.
12. Fiscal Year End Change
At a meeting of the Board of Trustees of the Rydex Dynamic Funds held on February 14, 2013, the Board unanimously voted to change the fiscal year end of the Funds from December 31 to March 31. The change in fiscal year end will have no impact on the Funds’ investment objectives, principal investment strategies or fees and expenses.
13. New Accounting Pronouncement
In January 2013, the Financial Accounting Standards Board issued an Accounting Standards Update No. 2013-01, Clarifying the Scope of Disclosures about Offsetting Assets and Liabilities, which limits the scope of the new balance sheet offsetting disclosures to derivatives, repurchase agreements and securities lending. The new disclosure is effective for Funds whose annual or interim periods begin on or after January 1, 2013. Management is evaluating the impact of this update on its current disclosures.
102 | THE RYDEX FUNDS ANNUAL REPORT
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Board of Trustees and Shareholders
of Rydex Dynamic Funds:
We have audited the accompanying statements of assets and liabilities, including the schedules of investments, of Rydex Dynamic Funds (comprising, the S&P 500® 2x Strategy Fund, Inverse S&P 500® 2x Strategy Fund, NASDAQ-100® 2x Strategy Fund, Inverse NASDAQ-100® 2x Strategy Fund, Dow 2x Strategy Fund, Inverse Dow 2x Strategy Fund, Russell 2000® 2x Strategy Fund and Inverse Russell 2000® 2x Strategy Fund) (the “Funds”) as of March 28, 2013, and the related statements of operations, the statements of changes in net assets, and the financial highlights for each of the years or periods indicated therein. These financial statements and financial highlights are the responsibility of the Funds’ management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audits.
We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement. We were not engaged to perform an audit of the Funds’ internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Funds’ internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements and financial highlights, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. Our procedures included confirmation of securities owned as of March 28, 2013, by correspondence with the custodian and brokers or by other appropriate auditing procedures where replies from brokers were not received. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred to above present fairly, in all material respects, the financial position of each of the respective portfolios constituting the Rydex Dynamic Funds at March 28, 2013, and the results of their operations, the changes in their net assets, and their financial highlights for each of the years or periods indicated therein, in conformity with U.S. generally accepted accounting principles.
McLean, Virginia
May 24, 2013
THE RYDEX FUNDS ANNUAL REPORT | 103
Proxy Voting Information
A description of the policies and procedures that the Trust uses to determine how to vote proxies relating to securities held in the Funds’ portfolios is available, without charge and upon request, by calling 1.800.820.0888. This information is also available from the EDGAR database on the SEC’s website at http://www.sec.gov.
Information regarding how the Funds voted proxies relating to portfolio securities during the most recent 12-month period ended June 30 is available without charge, upon request, by calling 1.800.820.0888. This information is also available from the EDGAR database on the SEC’s website at http://www.sec.gov.
Quarterly Portfolio Schedules Information
The Trust files its complete schedule of portfolio holdings with the SEC for the first and third quarters of each fiscal year on Form N-Q; which are available on the SEC’s website at http://www.sec.gov. The Funds’ Forms N-Q may be reviewed and copied at the SEC’s Public Reference Room in Washington, DC, and that information on the operation of the Public Reference Room may be obtained by calling 1-800-SEC-0330. Copies of the portfolio holdings are also available to shareholders, without charge and upon request, by calling 1.800.820.0888.
Office Locations
The offices of Guggenheim Investments can be found in the following locations:
40 East 52nd Street
16th Floor
New York, NY 10022
(Headquarters)
Four Irvington Centre
805 King Farm Boulevard
Suite 600
Rockville, MD 20850
9401 Indian Creek Parkway
40 Corporate Woods
Suite 850
Overland Park, KS 66210
Distributor Name Change
Effective January 1, 2013, Rydex Distributors, LLC changed its name to Guggenheim Distributors, LLC. The name change marks another step in the business integration process following the acquisition of Rydex by Guggenheim announced last year. The name change should not result in any material change to the day-to-day management or operations of the funds.
104 | THE RYDEX FUNDS ANNUAL REPORT
INFORMATION ON BOARD OF TRUSTEES AND OFFICERS (Unaudited)
A Board of Trustees oversees the Trust, as well as other trusts of GI, in which its members have no stated term of service, and continue to serve after election until resignation. The Statement of Additional Information includes further information about Fund Trustees and Officers, and can be obtained without charge by calling 800.820.0888.
All Trustees and Officers may be reached c/o Guggenheim Investments, 805 King Farm Boulevard, Suite 600, Rockville, MD 20850.
TRUSTEE AND OFFICER | ||||
Length of Service | ||||
Name and | as Trustee | Number of | ||
Year of Birth | (Year Began) | Funds Overseen | ||
Donald C. Cacciapaglia* | Rydex Series Funds – 2012 | 136 | ||
(1951) | Rydex Variable Trust – 2012 | |||
Rydex Dynamic Funds – 2012 | ||||
Rydex ETF Trust – 2012 |
Principal Occupations During Past Five Years: Current: Security Investors, LLC: President and CEO from April 2012 to present; Guggenheim Investments: President and Chief Administrative Officer from February 2010 to present; Previous: Channel Capital Group, Inc.: Chairman and CEO from April 2002 to February 2010
Positions held within the Trust: Trustee from 2012 to present; President from 2012 to present
INDEPENDENT TRUSTEES | ||||
Length of Service | ||||
Name and | as Trustee | Number of | ||
Year of Birth | (Year Began) | Funds Overseen | ||
Corey A. Colehour | Rydex Series Funds – 1993 | 136 | ||
(1945) | Rydex Variable Trust – 1998 | |||
Rydex Dynamic Funds – 1999 | ||||
Rydex ETF Trust – 2003 |
Principal Occupations During Past Five Years: Current: Retired; Previous: President and Senior Vice President of Schield Management Company (registered investment adviser) from 2003 to 2006
Positions held within the Trust: Trustee from 1993 to present; Member of the Audit and Governance and Nominating Committees from 1995 to present
J. Kenneth Dalton | Rydex Series Funds – 1995 | 136 | ||
(1941) | Rydex Variable Trust – 1998 | |||
Rydex Dynamic Funds – 1999 | ||||
Rydex ETF Trust – 2003 |
Principal Occupations During Past Five Years: Current: Retired
Positions held within the Trust: Trustee from 1995 to present; Member and Chairman of the Audit Committee from 1997 to present; Member of the Governance and Nominating Committees from 1995 to present; and Member of the Risk Oversight Committee from 2010 to present
John O. Demaret | Rydex Series Funds – 1997 | 136 | ||
(1940) | Rydex Variable Trust – 1998 | |||
Rydex Dynamic Funds – 1999 | ||||
Rydex ETF Trust – 2003 |
Principal Occupations During Past Five Years: Current: Retired
Positions held within the Trust: 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
THE RYDEX FUNDS ANNUAL REPORT | 105
INFORMATION ON BOARD OF TRUSTEES AND OFFICERS (Unaudited) (continued)
INDEPENDENT TRUSTEES – concluded | ||||
Length of Service | ||||
Name and | as Trustee | Number of | ||
Year of Birth | (Year Began) | Funds Overseen | ||
Werner E. Keller | Rydex Series Funds – 2005 | 136 | ||
(1940) | Rydex Variable Trust – 2005 | |||
Rydex Dynamic Funds – 2005 | ||||
Rydex ETF Trust – 2005 |
Principal Occupations During Past Five Years: Current: Founder and President of Keller Partners, LLC (investment research firm) from 2005 to present; Previous:Retired from 2001 to 2005
Positions held within the Trust: Vice Chairman of the Board of Trustees from 2010 to present; 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
Thomas F. Lydon, Jr. | Rydex Series Funds – 2005 | 136 | ||
(1960) | Rydex Variable Trust – 2005 | |||
Rydex Dynamic Funds – 2005 | ||||
Rydex ETF Trust – 2005 |
Principal Occupations During Past Five Years: Current: President of Global Trends Investments (registered investment adviser) from 1996 to present
Positions held within the Trust: Trustee and Member of the Audit and Governance and Nominating Committees from 2005 to present
Patrick T. McCarville | Rydex Series Funds – 1997 | 136 | ||
(1942) | Rydex Variable Trust – 1998 | |||
Rydex Dynamic Funds – 1999 | ||||
Rydex ETF Trust – 2003 |
Principal Occupations During Past Five Years: Current: Retired; Previous: Chief Executive Officer of Par Industries, Inc., d/b/a Par Leasing from 1977 to 2010
Positions held within the Trust: Trustee from 1997 to present; Member of the Audit Committee from 1997 to present; and Chairman of the Governance and Nominating Committees from 1997 to present
Roger Somers | Rydex Series Funds – 1993 | 136 | ||
(1944) | Rydex Variable Trust – 1998 | |||
Rydex Dynamic Funds – 1999 | ||||
Rydex ETF Trust – 2003 |
Principal Occupations During Past Five Years: Current: Founder and Chief Executive Officer of Arrow Limousine from 1965 to present
Positions held within the Trust: Trustee from 1993 to present; Member of the Audit and Governance and Nominating Committees from 1995 to present
EXECUTIVE OFFICERS
Name, Position and | Principal Occupations | |
Year of Birth | During Past Five Years | |
Michael P. Byrum* Vice President (1970 | Current: President, Security Benefit Asset Management Holdings, LLC; Senior Vice President, Security Investors, LLC; President & Chief Investment Officer, Rydex Holdings, LLC; Director & Chairman of the Board, Advisor Research Center, Inc.; and Manager, Rydex Specialized Products, LLC | |
Previous: Guggenheim Distributors, LLC (f/k/a Rydex Distributors, LLC.), Vice President (2009); Rydex Fund Services, LLC, Director (2009–2010), Secretary (2002–2010), 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) |
106 | THE RYDEX FUNDS ANNUAL REPORT
INFORMATION ON BOARD OF TRUSTEES AND OFFICERS (Unaudited) (concluded)
EXECUTIVE OFFICERS – concluded | ||
Name, Position and | Principal Occupations | |
Year of Birth | During Past Five Years | |
Nikolaos Bonos* Vice President and Treasurer (1963) | Current: Senior Vice President, Security Investors, LLC; Chief Executive Officer & Manager, Rydex Specialized Products, LLC; Chief Executive Officer & President, Rydex Fund Services, LLC; Vice President, Rydex Holdings, LLC; Treasurer, SBL Fund; Security Equity Fund; Security Income Fund; Security Large Cap Value Fund & Security Mid Cap Growth Fund; and Vice President, Security Benefit Asset Management Holdings, 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 (2003–2006); and Rydex Specialized Products, LLC, Chief Financial Officer (2005–2009) | ||
Elisabeth Miller* Chief Compliance Officer (1968) | Current: Chief Compliance Officer, Rydex Series Funds, Rydex Dynamic Funds, Rydex Variable Trust, Rydex ETF Trust, Security Equity Fund, Security Income Fund, Security Large Cap Value Fund, Security Mid Cap Growth Fund, SBL Fund, Security Investors, LLC, and Guggenheim Distributors, LLC | |
Previous: Senior Manager, Security Investors, LLC and Guggenheim Distributors, LLC (2004–2009) | ||
Amy J. Lee* Vice President and Secretary (1961) | Current: Managing Director, Guggenheim Investments; Senior Vice President & Secretary, Security Investors, LLC; Secretary & Vice President, Rydex ETF Trust, Rydex Dynamic Funds, Rydex Variable Trust, SBL Fund, Security Equity Fund, Security Income Fund, Security Large Cap Value Fund and Security Mid Cap Growth Fund; Vice President & Secretary, Rydex Holdings, LLC; Secretary, Advisor Research Center, Inc., Guggenheim Specialized Products, LLC, Guggenheim Distributors, LLC and Rydex Fund Services, LLC | |
Previous: Vice President, Associate General Counsel & Assistant Secretary, Security Benefit Life Insurance Company and Security Benefit Corporation (1987–2012); Security Global Investors, LLC, Senior Vice President & Secretary (2007–2011); Rydex Advisors, LLC (f/ka/ PADCO Advisors, Inc.) & Rydex Advisors II, LLC (f/k/a PADCO Advisors II, Inc.), Senior Vice President & Secretary (2010–2011) | ||
Joseph M. Arruda* Assistant Treasurer (1966) | Current: Assistant Treasurer, SBL Fund, Security Equity Fund, Security Income Fund, Security Large Cap Value Fund & Security Mid Cap Growth Fund; Vice President, Security Investors, LLC; and Chief Financial Officer & Manager, Rydex Specialized Products, LLC | |
Previous: Security Global Investors, LLC, Vice President (2010–2011); and Rydex Advisors, LLC (f/k/a PADCO Advisors, Inc.) & Rydex Advisors II, LLC (f/k/a PADCO Advisors II, Inc.), Vice President (2004–2011) |
* | Officers of the Funds are deemed to be “interested persons” of the Trust, within the meaning of Section 2(a)(19) of the 1940 Act, inasmuch as this person is affiliated with Guggenheim Investments. |
THE RYDEX FUNDS ANNUAL REPORT | 107
GUGGENHEIM INVESTMENTS PRIVACY POLICIES
Rydex Funds, Guggenheim Funds, Rydex Investments, Guggenheim Distributors, LLC, Security Investors, LLC, Security Distributors, Inc. and Rydex Advisory Services (Collectively “Guggenheim Investments”).
Our Commitment to You
When you become a Guggenheim Investments investor, you entrust us with not only your hard-earned money but also with personal and financial information about you. We recognize that your relationship with us is based on trust and that you expect us to act responsibly and in your best interests. Because we have access to this private information about you, we hold ourselves to the highest standards in its safekeeping and use. This means, most importantly, that we do not sell client information to anyone—whether it is your personal information or if you are a current or former Guggenheim Investments client.
The Information We Collect About You
In the course of doing business with shareholders and investors, we collect nonpublic personal information about you. You typically provide personal information when you complete a Guggenheim Investments account application or when you request a transaction that involves Rydex and Guggenheim Investments funds or one of the Guggenheim Investments affiliated companies. “Nonpublic personal information” is personally identifiable private information about you. For example, it includes information regarding your name and address, Social Security or taxpayer identification number, assets, income, account balance, bank account information and investment activity (e.g., purchase and redemption history).
How We Handle Your Personal Information
As emphasized above, we do not sell information about current or former clients or their accounts to third parties. Nor do we share such information, except when necessary to complete transactions at your request or to make you aware of related investment products and services that we offer. Additional details about how we handle your personal information are provided below. To complete certain transactions or account changes that you direct, it may be necessary to provide identifying information to companies, individuals or groups that are not affiliated with Guggenheim Investments. For example, if you ask to transfer assets from another financial institution to Guggenheim Investments, we will need to provide certain information about you to that company to complete the transaction. To alert you to other Guggenheim Investments investment products and services, we may share your information within the Guggenheim Investments family of affiliated companies. This would include, for example, sharing your information within Guggenheim Investments so we can make you aware of new Rydex and Guggenheim Investments funds or the services offered through another Guggenheim Investments affiliated company. In certain instances, we may contract with nonaffiliated companies to perform services for us. Where necessary, we will disclose information we have about you to these third parties. In all such cases, we provide the third party with only the information necessary to carry out its assigned responsibilities and only for that purpose. And we require these third parties to treat your private information with the same high degree of confidentiality that we do. In certain instances, we may share information with other financial institutions regarding individuals and entities in response to the U.S.A. Patriot Act. Finally, we will release information about you if you direct us to do so, if we are compelled by law to do so or in other circumstances permitted by law.
Opt Out Provisions
We do not sell your personal information to anyone. The law allows you to “opt out” of only certain kinds of information sharing with third parties. The firm does not share personal information about you with any third parties that triggers this opt-out right. This means YOU ARE ALREADY OPTED OUT.
How We Protect Privacy Online
Our concern for the privacy of our shareholders also extends to those who use our web site, guggenheiminvestments.com. Our web site uses some of the most secure forms of online communication available, including encryption technology, Secure Socket Layer (SSL) protocol, firewalls and user names and passwords. These technologies provide a high level of security and privacy when you access your account information or initiate online transactions. The Guggenheim Investments web site offers customized features that require our use of “http cookies”—tiny pieces of information that we ask your browser to store. However, we make very limited use of these cookies. We only use cookies for session management and security features on the Guggenheim Investments web site. We do not use them to pull data from your hard drive, to learn your email address, or to view data in cookies created by other web sites. We will not share the information in our cookies or give others access to it. See the legal information area on our web site for more details about web site security and privacy features.
108 | THE RYDEX FUNDS ANNUAL REPORT
GUGGENHEIM INVESTMENTS PRIVACY POLICIES (concluded)
How We Safeguard Your Personal Information
We restrict access to nonpublic personal information about shareholders to our employees and in some cases to third parties (for example, the service providers described above) as permitted by law. We maintain strict physical, electronic and procedural safeguards that comply with federal standards to guard your nonpublic personal information.
We’ll Keep You Informed
As required by federal law, we will notify shareholders of our privacy policy annually. We reserve the right to modify this policy at any time, but rest assured that if we do change it, we will tell you promptly. You will also be able to access our privacy policy from our web site at guggenheiminvestments.com. Should you have any questions regarding our privacy policy, contact us at 800.820.0888 or 301.296.5100.
THE RYDEX FUNDS ANNUAL REPORT | 109
Item 2. Code of Ethics.
The registrant’s Board of Trustees has adopted a code of ethics that applies to the registrant’s principal executive officer and principal financial officer. No substantive amendments were approved or waivers were granted to the Code during the period covered by this report. The Code is filed as an exhibit to this Form N-CSR.
Item 3. Audit Committee Financial Expert.
The registrant's Board of Trustees has determined that Werner Keller, an "independent" Trustee serving on the registrant's audit committee, is an "audit committee financial expert," as defined in Item 3 of Form N-CSR. Under applicable securities laws, a person who is determined to be an audit committee financial expert will not be deemed an "expert" for any purpose, including without limitation for the purposes of Section 11 of the Securities Act of 1933, as a result of being designated or identified as an audit committee financial expert. The designation or identification of a person as an audit committee financial expert does not impose on such person any duties, obligations, or liabilities that are greater than the duties, obligations, and liabilities imposed on such person as a member of the audit committee and Board of Trustees in the absence of such designation or identification.
Item 4. Principal Accountant Fees and Services.
(a) The aggregate Audit Fees billed by the Trust’s principal accountant, for the audit of the annual financial statements in connection with statutory and regulatory filings for the fiscal years ended March 28, 2013 and December 31, 2012 were $108,000 and $138,570, respectively.
(b) The aggregate Audit Related Fees by the Trust’s principal accountant billed for the fiscal years ended March 28, 2013 and December 31, 2012 were $0 and $0 respectively.
The aggregate fees billed in the Reporting Periods for assurance and related services by the Auditor to the Registrant’s investment adviser (not including any sub-investment adviser whose role is primarily portfolio management and is subcontracted with or overseen by another investment adviser), and any entity controlling, controlled by or under common control with the investment adviser that provides ongoing services to the Registrant (“Service Affiliates”) which required pre-approval by the Audit Committee which related to the review of the transfer agent function for the fiscal years ended March 28, 2013 and December 31, 2012 were $35,000 and $35,000, respectively.
(c) The aggregate Tax Fees billed by the Trust’s principal accountant for professional services rendered for tax compliance, tax advice, and tax planning, including preparation of tax returns and distribution assistance, for the fiscal years ended March 28, 2013 and December 31, 2012 was $0 and $0, respectively.
(d) The aggregate All Other Fees billed by the Trust’s principal accountant for products and services provided by the Auditor, other than the services reported in paragraphs (a) through (c) of this Item, for the fiscal years ended March 28, 2013 and December 31, 2012 were $0 and $0, respectively.
(e) The audit committee has adopted a policy whereby audit and non-audit services performed by the registrant’s principal accountant for the registrant, its investment advisor, and any entity controlling, controlled by, or under common control with the investment advisor that provides ongoing services to the registrant require pre-approval in advance at regularly scheduled audit committee meetings. If such service is required between regularly scheduled audit committee meetings, the chairman of the audit committee, J. Kenneth Dalton, is authorized to pre-approve the service with full committee approval at the next scheduled meeting. There shall be no waivers of the pre-approval process. No services described in (b)-(d) above were approved pursuant to paragraph (c)(7)(i)(C) of Rule 2-01 of Regulation S-X.
(f) Not applicable.
(g) The aggregate non-audit fees billed by the registrant’s accountant for the most recent fiscal year and the preceding fiscal year for services rendered to the registrant, the investment advisor, and any entity controlling, controlled by, or under common control with the advisor that provides ongoing services to the registrant were $35,000 and $35,000, respectively. These aggregate fees were less than the aggregate fees billed for the same periods by the registrant’s principal accountant for audit services rendered to the registrant, the investment advisor, and any entity controlling, controlled by, or under common control with the advisor that provides ongoing services to the registrant.
(h) All non-audit services rendered in (g) above were pre-approved by the registrant’s audit committee. As such, the audit committee has considered these services in maintaining the principal accountant’s independence.
Item 5. Audit Committee of Listed Registrants.
Not applicable.
Item 6. Investments
Schedule of Investments is included as part of the report to shareholders filed under Item 1 of this form.
Item 7. Disclosure of Proxy Voting Policies and Procedures for Closed-End Management Investment Companies.
Not applicable.
Item 8. Portfolio Managers of Closed-End Management Investment Companies.
Not applicable.
Item 9. Purchases of Equity Securities by Closed-End Management Investment Company and Affiliated Purchasers.
Not applicable.
Item 10. Submission of Matters to a Vote of Security Holders.
Not applicable.
Item 11. Controls and Procedures.
(a) | The registrant’s President (principal executive officer) and Treasurer (principal financial officer) have evaluated the registrant’s disclosure controls and procedures within 90 days of this filing and have concluded that the registrant’s disclosure controls and procedures were effective as of that date in ensuring that information required to be disclosed by the registrant in this Form N-CSR was recorded, processed, summarized, and reported timely. |
(b) | The registrant’s principal executive officer and principal financial officer are aware of no change in the registrant’s internal control over financial reporting that occurred during the registrant’s second fiscal quarter covered by this report that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting. |
Item 12. Exhibits.
(a)(1) The registrant’s code of ethics pursuant to Item 2 of Form N-CSR is attached.
(a)(2) Separate certifications by the President (principal executive officer) and Treasurer (principal financial officer) of the registrant as required by Rule 30a-2(a) under the Act (17 CFR 270.30a-2(a)) are attached.
(b) A certification by the registrant’s President (principal executive officer) and Treasurer (principal financial officer) as required by Rule 30a-2(b) under the Act (17 CFR 270.30a-2(b)) is attached.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
(Registrant) Rydex Dynamic Funds
By (Signature and Title)* /s/ Donald C. Cacciapaglia
Donald C. Cacciapaglia, President
Date June 5, 2013
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
By (Signature and Title)* _/s/ Donald C. Cacciapaglia_
Donald C. Cacciapaglia, President
Date June 5, 2013
By (Signature and Title)* /s/ Nikolaos Bonos _ _
Nikolaos Bonos, Vice President and Treasurer
Date June 5, 2013
* Print the name and title of each signing officer under his or her signature.