ThZeal - The Zeal

DEF 14A 1 e81847a.txt UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 SCHEDULE 14A Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934 (Amendment No.) Filed by the Registrant [X] Filed by a Party other than the Registrant [ ] Check the appropriate box: [ ] Preliminary Proxy Statement [ ] CONFIDENTIAL, FOR USE OF THE COMMISSION ONLY (AS PERMITTED BY RULE 14A-6(E)(2)) [X] Definitive Proxy Statement [ ] Definitive Additional Materials [ ] Soliciting Material Pursuant to [Section]240.14a-12 (Name of Registrant as Specified In Its Charter) RYDEX DYNAMIC FUNDS (Name of Person(s) Filing Proxy Statement, if other than the Registrant) Payment of Filing Fee (Check the appropriate box): [X] No fee required. [ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11. (1) Title of each class of securities to which transaction applies: (2) Aggregate number of securities to which transaction applies: (3) Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is calculated and state how it was determined): (4) Proposed maximum aggregate value of transaction: (5) Total fee paid: [ ] Fee paid previously with preliminary materials. [ ] Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing. (1) Amount Previously Paid: (2) Form, Schedule or Registration Statement No.: (3) Filing Party: (4) Date Filed: RYDEX SERIES FUNDS RYDEX DYNAMIC FUNDS Dear Shareholder: I am writing to you on an important matter relating to the Rydex|SGI family of funds (the "Funds"). On September 20, 2011, Security Investors, LLC, the Funds' investment adviser, that operates under the name Rydex Investments (the "Investment Adviser"), an indirect wholly-owned subsidiary of an entity that is managed by a subsidiary of Guggenheim Capital, LLC ("Guggenheim Capital"), announced a transaction whereby Guggenheim Capital will acquire 100% of the Investment Adviser and certain affiliated businesses. This transaction is expected to be completed in late 2011 or early 2012. This transaction will not result in material changes to the day-to-day management and operations of the Funds or any increase in fees. For example, the portfolio managers of the Funds will remain the same and your daily experience in dealing with the Funds will remain unchanged. However, for legal reasons, the transaction would terminate the Funds' investment advisory agreements with the Investment Adviser and any sub-advisory agreements unless you approve new, substantially identical, agreements. Accordingly, by this joint proxy statement, we are requesting that you vote to approve investment advisory agreements and, as applicable, sub-advisory agreements to take the place of the current agreements, so that the Investment Adviser, and, as applicable, any sub-adviser, may continue to manage the Funds after the transaction is completed in a manner that is substantially similar to the current management of the Funds. In addition, you will be asked to consider and approve: (i) the election of nine individuals to the Boards of Trustees of Rydex Series Funds and Rydex Dynamic Funds; and (ii) a "manager of managers" arrangement for each of the Funds to permit the Investment Adviser, subject to prior approval by the Board of Trustees, to retain sub-advisers or amend the terms of an existing sub-advisory agreement without shareholder approval where the sub-adviser is not affiliated with the Investment Adviser, subject to certain conditions set forth in an order previously granted to the Investment Adviser by the U.S. Securities and Exchange Commission. If you are a shareholder of the Rydex Series Funds U.S. Government Money Market Fund (the "Money Market Fund"), we are also requesting that you vote to approve the elimination of the Money Market Fund's fundamental investment policy on investing in other investment companies. A Special Joint Meeting of Shareholders (the "Meeting") of each of the Funds, including the Funds listed in an attachment to the Notice of Special Joint Meeting of Shareholders, has been scheduled for November 22, 2011 to vote on these matters. If you are a shareholder of record of any of the Funds as of the close of business on October 3, 2011, you are entitled to vote at the Meeting and any adjournment of the Meeting, even if you no longer own Fund shares. Pursuant to these materials, you are being asked to approve proposals for the Funds of Rydex Series Funds and Rydex Dynamic Funds, as noted above. Please note that you may receive similar materials if you own shares of other Funds in the Rydex|SGI fund complex asking you to approve proposals for the other Funds. You can vote in one of four ways: o By mail with the enclosed proxy card -- be sure to sign, date and return it in the enclosed postage-paid envelope, o Through the web site listed in the proxy voting instructions, o By telephone using the toll-free number listed in the proxy voting instructions, or o In person at the shareholder meeting on November 22, 2011. We encourage you to vote over the Internet or by telephone, using the voting control number that appears on your proxy card. Your vote is extremely important. Shareholder meetings of the Funds do not generally occur with great frequency, so we ask that you take the time to carefully consider and vote on these important proposals. Please read the enclosed information carefully before voting. If you have questions, please call The Altman Group at 1-877-864-5058. Proxies may be revoked prior to the Meeting by timely executing and submitting a revised proxy (following the methods noted above), by giving written notice of revocation to the Fund(s) prior to the Meeting, or by voting in person at the Meeting. We appreciate your participation and prompt response in this matter and thank you for your continued support. Sincerely, Richard M. Goldman President PROMPT EXECUTION AND RETURN OF THE ENCLOSED PROXY CARD IS REQUESTED. A SELF-ADDRESSED, POSTAGE-PAID ENVELOPE IS ENCLOSED FOR YOUR CONVENIENCE, ALONG WITH INSTRUCTIONS ON HOW TO VOTE OVER THE INTERNET OR BY TELEPHONE SHOULD YOU PREFER TO VOTE BY ONE OF THOSE METHODS. ii VERY IMPORTANT NEWS FOR SHAREHOLDERS By its very nature, the following "Questions and Answers" section is a summary and is not intended to be as detailed as the discussion found later in the proxy materials. For that reason, the information is qualified in its entirety by reference to the enclosed joint proxy statement to shareholders ("Joint Proxy Statement"). QUESTIONS AND ANSWERS Q. WHY AM I RECEIVING THIS JOINT PROXY STATEMENT? A. You are receiving these proxy materials -- a booklet that includes the Joint Proxy Statement and your proxy card -- because you have the right to vote on important proposals concerning the Rydex|SGI family of funds (the "Funds"). Proposals 1 and 2 relate to actions that need to be taken in light of a transaction (the "Transaction") involving a change in the corporate ownership structure of Security Investors, LLC, which operates under the name Rydex Investments, the investment adviser to each of the Funds (the "Investment Adviser"). The Investment Adviser is managed by an indirect wholly-owned subsidiary of Guggenheim Capital, LLC ("Guggenheim Capital"). Guggenheim Capital wishes to purchase the Investment Adviser and certain affiliated businesses. This Transaction will be effected by Guggenheim Capital buying 100% of the equity of the holding company that owns the Investment Adviser. After the Transaction, Guggenheim Capital will control the Investment Adviser (through one or more of its subsidiaries), and it is expected that the services rendered to the Funds by the Investment Adviser will not change. The Transaction would terminate the Funds' current investment advisory agreements with the Investment Adviser (the "Current Investment Advisory Agreements") and the Investment Adviser's sub-advisory agreement with American Independence Financial Services, LLC ("AIFS"), the sub-adviser to the Long Short Interest Rate Strategy Fund (the "Current AIFS Agreement") (collectively, the "Current Agreements") unless you approve new substantially identical agreements. Proposal 3 relates to the election of nine individuals to the Boards of Trustees (collectively, the "Board") of Rydex Series Funds and Rydex Dynamic Funds (the "Trusts"). The Board proposes the election of the following nominees: Donald C. Cacciapaglia, Corey A. Colehour, J. Kenneth Dalton, John O. Demaret, Richard M. Goldman, Werner E. Keller, Thomas F. Lydon, Patrick T. McCarville and Roger Somers. Each of the nominees, other than Mr. Cacciapaglia, currently serves as a Trustee. In connection with the Transaction, the Board believes that expanding the Board to include Mr. Cacciapaglia, who is a member of senior management of Guggenheim's investment management business, and who would serve on other boards in the Rydex|SGI family of funds, would be appropriate. Proposal 4 relates to the approval of a "manager of managers" arrangement for each of the Funds to permit the Investment Adviser, subject to prior approval by the Board and certain other conditions set forth in an order previously granted to the Investment Adviser i by the U.S. Securities and Exchange Commission (the "SEC"), to retain sub-advisers or amend the terms of an existing sub-advisory agreement without shareholder approval where the sub-adviser is not affiliated with the Investment Adviser. Currently, the Investment Adviser must obtain shareholder approval of any sub-advisory agreement with a new sub-adviser that it wishes to retain to manage a Fund, as well as any material changes to an existing sub-advisory agreement. As discussed in more detail below, a manager of managers arrangement would permit the Investment Adviser to avoid the expense and delays associated with obtaining shareholder approval. Proposal 5 only concerns shareholders of Rydex Series Funds U.S. Government Money Market Fund (the "Money Market Fund"). Investors in other Funds are not asked to vote on the fifth proposal. The fifth proposal relates to the proposed elimination of the fundamental investment policy on investing in other investment companies to permit the Money Market Fund to make changes to its investment program as discussed in more detail below. The Money Market Fund's current policy on investing in other investment companies is not required and is more prohibitive than applicable law requires. The Money Market Fund will continue to invest in compliance with strict regulatory requirements applicable to money market funds. Q. WHY AM I BEING ASKED TO VOTE? A. The Investment Company Act of 1940 (the "1940 Act"), the law that regulates mutual funds, including the Funds, provides that a mutual fund's investment advisory agreement terminates whenever there is a "change in control" of the investment adviser. (In this context, the term "investment adviser" applies to both an investment adviser and a sub-adviser.) The change in the corporate ownership structure of the Investment Adviser contemplated by the Transaction would constitute a "change in control" (as this term is used for regulatory purposes) of the Investment Adviser. Before an investment advisory agreement terminates, a new investment advisory agreement must be in effect in order for the investment adviser to continue to manage the mutual fund's investments. For that reason, we are seeking shareholder approval of new investment advisory agreements for the Funds (the "New Investment Advisory Agreements"), as well as a new sub-advisory agreement between the Investment Adviser and AIFS with respect to the Rydex Series Funds--Long Short Interest Rate Strategy Fund ("Long Short Interest Rate Strategy Fund") (the "New AIFS Agreement") (collectively, the "New Agreements"). The Transaction will not result in material changes to the day-to-day management and operations of the Funds or any increase in fees. The personnel, officers and managers of the Investment Adviser will remain the same. Upon completion of the Transaction, Guggenheim Capital will be the parent company of the Investment Adviser. Guggenheim currently manages the Investment Adviser and certain of its affiliates through an indirect subsidiary. The Boards of Trustees (collectively, the "Board") of Rydex Series Funds and Rydex Dynamic Funds (the "Trusts") considered the Transaction and voted in favor of the New Agreements, pursuant to which, subject to their approval by each Fund's respective shareholders, the Investment Adviser will continue to serve as investment adviser to the ii Funds, and AIFS will continue to serve as sub-adviser to Long Short Interest Rate Strategy Fund after the completion of the Transaction. The fees charged by the each of the Investment Adviser and AIFS (collectively, the "Advisers") for their services to the Funds under each New Agreement will be the same as their fees under the corresponding Current Agreement. The other terms of the New Agreements will also be the same in all material respects to those of the Current Agreements. With respect to the third proposal, you are being asked to vote for the election of board members ("Trustees") because the Board believes it would be appropriate, in light of the Transaction, to subject the current Trustees to a shareholder vote and to ask shareholders to vote to add a new Trustee who is affiliated with Guggenheim Capital. The Board believes that it is in shareholders' best interest to have a Board that is composed entirely of elected Trustees. With respect to the fourth proposal, the 1940 Act makes it unlawful for any person to act as an investment adviser (including a sub-adviser) to a fund except pursuant to a written contract that has been approved by a fund's board of trustees/directors as well as its shareholders. The Investment Adviser and certain affiliated Funds of the Trusts have previously received an exemptive order from the SEC pursuant to which the Investment Adviser is permitted to retain sub-advisers and amend the terms of existing sub-advisory agreements with unaffiliated sub-advisers without shareholder approval. This type of arrangement, which gives more flexibility to appoint investment sub-advisers to manage a fund, is commonly referred to as a fund "manager of managers" arrangement. The SEC's order permitting the Investment Adviser to use a manager of managers arrangement requires that before a Fund may rely on the order, the Fund must obtain shareholder approval (among other conditions). Therefore, in order to provide the Investment Adviser with flexibility (subject to Board approval) to retain sub-advisers and amend sub-advisory agreements, you are being asked to approve of the use of the manager of managers arrangement for the Funds. Shareholders should note, however, that the Investment Adviser and the Board have no intent to make an extensive use of this arrangement in the foreseeable future. With respect to the fifth proposal, the 1940 Act requires the Money Market Fund's shareholders to approve a change to the Money Market Fund's fundamental investment policy with respect to investing in other investment companies. The Money Market Fund's current fundamental investment policy prohibits investing in other investment companies, which unnecessarily limits investment strategies. Upon a request from the Investment Adviser to make changes to the Money Market Fund's policy to be able to invest a portion of the Money Market Fund's assets in other funds, the Board has reviewed the Money Market Fund's fundamental investment policies on investing in other investment companies and has recommended the elimination of the policies. The proposal is unrelated to the Transaction and only concerns shareholders of the Money Market Fund. iii Q. WILL THE PROPOSED TRANSACTION AFFECT ME? A. No. The operations of the Advisers, the fees payable to the Advisers, and the persons responsible for the day-to-day investment management of the Funds will remain unchanged. The Board has been assured that there will be no reduction in the nature or quality of the investment advisory and sub-advisory services provided to each Fund, as applicable, due to the Transaction. Q. WILL THERE BE ANY CHANGES TO THE FUNDS' OTHER SERVICE PROVIDERS? A. The Transaction would also affect the control of certain of the Funds' other servicer providers ("Affiliated Service Providers") as a result of the Transaction. The Affiliated Service Providers include Rydex Distributors, LLC which serves as the Funds' principal underwriter/distributor (the "Distributor"), and Rydex Fund Services, Inc., which provides general administrative, shareholder, dividend disbursement, transfer agent and registrar services to the Funds. The Affiliated Service Providers and the Investment Adviser are commonly held. Under the 1940 Act, shareholder approval is not required in order for the Affiliated Service Providers to continue providing services to the Funds after the closing of the Transaction. The Board has also been assured that there will be no material change in the nature or quality of the services provided by the Affiliated Service Providers to each Fund due to the Transaction. Q. WILL MY FUND'S FEES FOR INVESTMENT ADVISORY AND SUB-ADVISORY SERVICES INCREASE? A. No. The fee rates under the New Agreements are identical to those under the Current Agreements. Services also will remain substantially the same. Q. WILL THE PROPOSED CHANGES TO THE BOARD RESULT IN HIGHER FUND EXPENSES? A. No. Only "non-interested" Trustees (as that term is defined in the 1940 Act) receive compensation from the Funds they oversee. The proposed additional Trustee would be an "interested" Trustee because of his affiliation with Guggenheim Capital. Because interested Trustees do not receive compensation from the Funds, the cost of this additional Trustee would not be borne by the Funds. Q. FOR SHAREHOLDERS OF THE MONEY MARKET FUND ONLY. WHAT EFFECT WILL THE PROPOSED ELIMINATION OF THE MONEY MARKET FUND'S FUNDAMENTAL INVESTMENT POLICIES ON INVESTING IN OTHER INVESTMENT COMPANIES HAVE ON THE MONEY MARKET FUND? A. While this proposal is intended to provide the Money Market Fund with flexibility to invest in other funds, the Money Market Fund would continue to be managed subject to the limitations on investing in other investment companies imposed by the 1940 Act, as interpreted or modified by regulatory authority having jurisdiction from time to time, as well as the investment objectives, strategies, and policies expressed in the Money Market Fund's registration statements as may be changed by the Board from time to time, and regulations that apply to money market funds. iv If the proposal is approved by shareholders, the Money Market Fund would be permitted to invest in the shares of other investment companies (that are money market funds). As a shareholder of another investment company, the Money Market Fund would bear, along with other shareholders, its pro rata portion of the other investment company's expenses, including advisory fees, and would be exposed to the risks attributable to investing in the selected funds. These expenses would be in addition to the advisory and other expenses that the Money Market Fund bears directly in connection with its own operations. Notwithstanding the proposed elimination, at all times, the Money Market Fund will comply with the provisions of the 1940 Act that apply to investments in other investment companies and Securities and Exchange Commission Rule 2a-7, which strictly prescribes the type of investments that money market funds can invest in. The Money Market Fund will continue to seek to maintain a stable $1.00 price per share as permitted by current Rule 2a-7. Should the Money Market Fund's shareholders not approve the proposal to eliminate the Money Market Fund's fundamental investment policy on investing in other investment companies, the Fund's current fundamental investment policy on investing in investment companies would continue to apply unchanged and the Board would decide whether to make other changes to the Money Market Fund's investment program. Q. I OWN SHARES OF OTHER FUNDS IN THE RYDEX|SGI FUND COMPLEX AND RECEIVED SIMILAR SOLICITATION MATERIALS REGARDING THOSE FUNDS. AM I ALSO BEING ASKED TO APPROVE THE PROPOSALS CONTAINED IN THIS PROXY STATEMENT? A. Yes. You are being asked to approve the proposals contained in this Proxy Statement, in addition to any other proposals contained in other proxy statements that you may receive for funds in the Rydex|SGI fund complex. Q. WHO IS ASKING FOR MY VOTE? A. The enclosed proxy is being solicited by the Board of your Fund for use at the Special Joint Meeting of Shareholders to be held on November 22, 2011 (the "Meeting"), and, if the Meeting is adjourned or postponed, at any later meetings, for the purposes stated in the Notice of Special Joint Meeting. Q. HOW DOES THE BOARD SUGGEST THAT I VOTE? A. After careful consideration, the Board unanimously recommends that you vote "FOR" all of the proposals contained in the Joint Proxy Statement. Please see the section entitled "Board Recommendation" with respect to each proposal for a discussion of the Board's considerations in making such recommendations. Q. WHY AM I RECEIVING INFORMATION ABOUT FUNDS I DO NOT OWN? A. The proposals are similar for each Fund, and management of the Funds has concluded that it is cost-effective to hold the Meeting concurrently for all of the Funds. You will be asked to vote separately on the proposals with respect to the Fund(s) that you own. Assuming that the requisite levels of aggregate shareholder consent are attained, an v unfavorable vote on a proposal by the shareholders of one Fund will not affect the implementation of a comparable proposal by another Fund if such proposal is approved by shareholders of that Fund. Q. WHAT VOTE IS REQUIRED TO APPROVE THE PROPOSALS? A. To be approved with respect to a particular Fund, each proposal, other than Proposal 3, must be approved by a "vote of a majority of the outstanding voting securities" of that Fund. With respect to the Money Market Fund, the proposed elimination of the Money Market Fund's fundamental investment policy on investing in other investment companies also must be approved by a "vote of a majority of the outstanding voting securities" of the Money Market Fund. In each case, the "vote of a majority of the outstanding voting securities" is defined in the 1940 Act as the lesser of the vote of (i) 67% or more of the voting securities of a Fund entitled to vote thereon present at the Meeting or represented by proxy, if more than 50% of the Fund's outstanding voting securities are present or represented by proxy; or (ii) more than 50% of the outstanding voting securities of the Fund entitled to vote thereon. With respect to Proposal 3, a plurality of the shares voting is required to elect each individual nominated as a Trustee. Q. WILL MY VOTE MAKE A DIFFERENCE? A. Yes! Your vote is needed to ensure that the proposals can be acted upon. We encourage all shareholders to participate in the governance of their Fund(s). Additionally, your immediate response on the enclosed proxy card, on the Internet or over the phone will help save the costs of any further solicitations. Q. IF I AM A SMALL INVESTOR, WHY SHOULD I BOTHER TO VOTE? A. You should vote because every vote is important. If numerous shareholders just like you fail to vote, the Funds may not receive enough votes to go forward with the Meeting. If this happens, the Funds will need to solicit votes again. This may delay the Meeting and the approval of the proposals and generate unnecessary costs. Q. HOW DO I PLACE MY VOTE? A. You may provide a Fund with your vote by mail with the enclosed proxy card, by Internet by following the instructions in the proxy voting instructions, by telephone using the toll-free number listed in the proxy voting instructions, or in person at the Meeting. You may use the enclosed postage-paid envelope to mail your proxy card. Please follow the enclosed instructions to utilize any of these voting methods. If you need more information on how to vote, or if you have any questions, please call the Funds' proxy solicitation agent at the telephone number below. Q. WHOM DO I CALL IF I HAVE QUESTIONS? A. We will be happy to answer your questions about this proxy solicitation. If you have questions, please call The Altman Group at 1-877-864-5058. vi Proxies may be revoked prior to the Meeting by timely executing and submitting a revised proxy (following the methods noted above), by giving written notice of revocation to the Fund(s) prior to the Meeting, or by voting in person at the Meeting. PROMPT EXECUTION AND RETURN OF THE ENCLOSED PROXY CARD IS REQUESTED. A SELF-ADDRESSED, POSTAGE-PAID ENVELOPE IS ENCLOSED FOR YOUR CONVENIENCE, ALONG WITH INSTRUCTIONS ON HOW TO VOTE OVER THE INTERNET OR BY TELEPHONE SHOULD YOU PREFER TO VOTE BY ONE OF THOSE METHODS. vii RYDEX SERIES FUNDS RYDEX DYNAMIC FUNDS 805 King Farm Boulevard, Suite 600 Rockville, Maryland 20850 (800) 820-0888 NOTICE OF SPECIAL JOINT MEETING OF SHAREHOLDERS TO BE HELD ON NOVEMBER 22, 2011 Notice is hereby given that a Special Joint Meeting of Shareholders (the "Meeting") of Rydex Series Funds and Rydex Dynamic Funds (each, a "Trust" and collectively, the "Trusts") and each of their respective series listed on the attached list (each, a "Fund" and collectively, the "Funds") will be held at the Trusts' offices at 805 King Farm Boulevard, Suite 600, Rockville, Maryland 20850 on November 22, 2011 at 1:00 p.m. Eastern Time for the purposes listed below:

After careful consideration, the Boards of Trustees of the Trusts unanimously recommend that shareholders vote "FOR" Proposals 1, 2, 3, 4 and 5. viii Shareholders of record at the close of business on October 3, 2011 are entitled to notice of, and to vote at, the Meeting, even if such shareholders or insurance product owners no longer own such shares or products. We call your attention to the accompanying Joint Proxy Statement. You are requested to complete, date, and sign the enclosed proxy card and return it promptly in the envelope provided for that purpose. Your proxy card also provides instructions for voting via telephone or the Internet if you wish to take advantage of these voting options. Proxies may be revoked prior to the Meeting by timely executing and submitting a revised proxy (following the methods noted above), by giving written notice of revocation to the Fund(s) prior to the Meeting, or by voting in person at the Meeting. By Order of the Boards of Trustees, Richard M. Goldman President YOUR VOTE IS VERY IMPORTANT TO US REGARDLESS OF THE NUMBER OF VOTES YOU HOLD. SHAREHOLDERS WHO DO NOT EXPECT TO ATTEND THE MEETING ARE REQUESTED TO COMPLETE, SIGN, DATE AND RETURN THE ACCOMPANYING PROXY CARD IN THE ENCLOSED ENVELOPE, WHICH NEEDS NO POSTAGE IF MAILED IN THE UNITED STATES. IT IS IMPORTANT THAT YOUR PROXY CARD BE RETURNED PROMPTLY. FOR YOUR CONVENIENCE, YOU MAY ALSO VOTE BY TELEPHONE OR INTERNET BY FOLLOWING THE ENCLOSED INSTRUCTIONS. IF YOU VOTE BY TELEPHONE OR VIA THE INTERNET, PLEASE DO NOT RETURN YOUR PROXY CARD UNLESS YOU ELECT TO CHANGE YOUR VOTE. ix FUNDS PARTICIPATING IN THE MEETING ON NOVEMBER 22, 2011 RYDEX SERIES FUNDS All-Asset Aggressive Strategy Fund Internet Fund Retailing Fund All-Asset Conservative Strategy Inverse Emerging Markets 2x Russell 2000(R) 1.5x Strategy Fund Fund Strategy Fund Russell 2000(R) Fund All-Asset Moderate Strategy Fund Inverse Government Long Bond Strategy Fund S&P 500 Fund Alternative Strategies Fund Inverse High Yield Strategy Fund S&P 500 Pure Growth Fund Alternative Strategies Allocation Fund Inverse Mid-Cap Strategy Fund S&P 500 Pure Value Fund Banking Fund Inverse NASDAQ-100(R) Strategy S&P MidCap 400 Pure Growth Fund Fund Basic Materials Fund Inverse Russell 2000(R) Strategy S&P MidCap 400 Pure Value Fund Biotechnology Fund Fund S&P SmallCap 600 Pure Growth Commodities Strategy Inverse S&P 500 Strategy Fund Fund Fund Japan 2x Strategy Fund S&P SmallCap 600 Pure Value Consumer Products Fund Fund Leisure Fund Electronics Fund Strengthening Dollar 2x Strategy Long/Short Commodities Strategy Fund Emerging Markets 2x Strategy Fund Fund Technology Fund Energy Fund Long Short Equity Strategy Fund Telecommunications Fund Energy Services Fund Long Short Interest Rate Strategy Fund Transportation Fund Europe 1.25x Strategy Fund Managed Futures Strategy Fund U.S. Government Money Market Event Driven and Distressed Fund Strategies Fund Mid-Cap 1.5x Strategy Fund U.S. Long Short Momentum Fund Financial Services Fund Multi-Hedge Strategies Fund Utilities Fund Government Long Bond 1.2x NASDAQ-100(R) Fund Strategy Fund Weakening Dollar 2x Strategy Fund Nova Fund Health Care Fund Precious Metals Fund High Yield Strategy Fund Real Estate Fund

xii RYDEX DYNAMIC FUNDS Dow 2x Strategy Fund Inverse S&P 500 2x Strategy Fund Inverse Dow 2x Strategy Fund NASDAQ-100(R) 2x Strategy Fund Inverse NASDAQ-100(R) 2x Strategy Fund Russell 2000(R) 2x Strategy Fund Inverse Russell 2000(R) 2x Strategy Fund S&P 500 2x Strategy Fund

xiii TABLE OF CONTENTS OVERVIEW OF THE PROPOSALS.................................................................... 3 PROPOSALS 1-2: Approval of the New Agreements .......................................... 3 Information Regarding the Transaction ............................................. 3 Section 15(f) of the 1940 Act...................................................... 4 Approval of the New Agreements by the Board........................................ 5 Board Considerations in Approving the New Agreements............................... 6 New Agreements..................................................................... 7 PROPOSAL 3: Approval of the Election of Trustees ....................................... 8 PROPOSAL 4: Approval of a "Manager of Managers" Arrangement............................. 9 PROPOSAL 5: Money Market Fund only--Approval of the Elimination of the Fund's Fundamental Investment Policy on Investing in Other Investment Companies . ...................................................................... 10 PROPOSAL 1--THE APPROVAL OF NEW INVESTMENT ADVISORY AGREEMENTS WITH RESPECT TO ALL FUNDS.................................................... 11 The Investment Adviser.................................................................. 11 Material Terms of the New Investment Advisory Agreements ............................... 11 BOARD RECOMMENDATION ON PROPOSAL 1........................................................... 13 PROPOSAL 2--THE APPROVAL OF A NEW SUB-ADVISORY AGREEMENT .................................... 14 Information About AIFS.................................................................. 14 Material Terms of the AIFS Sub-Advisory Agreement....................................... 15 BOARD RECOMMENDATION ON PROPOSAL 2........................................................... 15 PROPOSAL 3--THE APPROVAL OF THE ELECTION OF TRUSTEES FOR THE TRUST........................... 16 Information Regarding the Nominees...................................................... 16 Board's Consideration of Each Nominee's Qualifications, Experience, Attributes or Skills ....................................................................... 21 Principal Officers of the Funds ........................................................ 24 Nominee Ownership of Portfolio Shares .................................................. 27 Board Compensation...................................................................... 29 Committees and Meetings of the Board.................................................... 30 Independent Registered Public Accounting Firm .......................................... 32 BOARD RECOMMENDATION ON PROPOSAL 3........................................................... 33 PROPOSAL 4--THE APPROVAL OF A "MANAGER OF MANAGERS" ARRANGEMENT WITH RESPECT TO ALL FUNDS .................................................. 34 "Manager of Managers" Arrangement....................................................... 34 Conditions of the Exemptive Relief...................................................... 35 Board Considerations in Approving the "Manager of Managers" Arrangement ................ 35 BOARD RECOMMENDATION ON PROPOSAL 4........................................................... 36 PROPOSAL 5 -- THE APPROVAL OF A CHANGE TO THE FUNDAMENTAL INVESTMENT POLICY ON INVESTING IN OTHER INVESTMENT COMPANIES WITH RESPECT TO THE MONEY MARKET FUND ........................................ 37 Proposed Fundamental Investment Policy.................................................. 37 Current Fundamental Investment Policy .................................................. 37 Discussion of Proposed Modification..................................................... 37

xiv BOARD RECOMMENDATION ON PROPOSAL 5........................................................... 38 OTHER BUSINESS .............................................................................. 39 ADDITIONAL INFORMATION....................................................................... 39 Administrator, Principal Underwriter and Transfer Agent ................................ 39 Affiliations and Affiliated Brokerage .................................................. 39 Other Information ...................................................................... 39 Voting Information ..................................................................... 39 Shareholder Proposals................................................................... 42

xv APPENDICES Appendix A CORPORATE STRUCTURE OF THE INVESTMENT ADVISER.................. A-1 Appendix B FORMS OF NEW INVESTMENT ADVISORY AGREEMENTS.................... B-1 Appendix C INFORMATION REGARDING THE INVESTMENT ADVISORY AGREEMENTS AND FEES PAID TO THE INVESTMENT ADVISER AND AFFILIATES ........................................ C-1 Appendix D TRUSTEES/MANAGERS AND OFFICERS OF THE INVESTMENT ADVISER ...... D-1 Appendix E ADVISORY FEE RATES OF FUNDS WITH SIMILAR INVESTMENT OBJECTIVES ADVISED BY SECURITY INVESTORS, LLC ................................................ E-1 Appendix F FORM OF NEW SUB-ADVISORY AGREEMENT WITH AMERICAN INDEPENDENCE FINANCIAL SERVICES, LLC ................. F-1 Appendix G INFORMATION REGARDING THE SUB-ADVISORY AGREEMENT WITH AMERICAN INDEPENDENCE FINANCIAL SERVICES, LLC AND FEES PAID TO THE SUB-ADVISER ................ G-1 Appendix H DIRECTORS/TRUSTEES/MANAGERS AND OFFICERS OF AMERICAN INDEPENDENCE FINANCIAL SERVICES, LLC ................. H-1 Appendix I ADVISORY FEE RATES OF FUNDS WITH SIMILAR INVESTMENT OBJECTIVES ADVISED BY AMERICAN INDEPENDENCE FINANCIAL SERVICES, LLC. ......................... I-1 Appendix J OUTSTANDING SHARES............................................. J-1 Appendix K BENEFICIAL OWNERS OF MORE THAN 5% OF A CLASS OF EACH FUND ..... K-1 Appendix L MANAGEMENT OWNERSHIP .......................................... L-1 Appendix M NOMINATING COMMITTEE CHARTER .................................. M-1 xvi RYDEX SERIES FUNDS RYDEX DYNAMIC FUNDS 805 King Farm Boulevard, Suite 600 Rockville, Maryland 20850 (800) 820-0888 JOINT PROXY STATEMENT SPECIAL JOINT MEETING OF SHAREHOLDERS TO BE HELD ON NOVEMBER 22, 2011 This joint proxy statement ("Joint Proxy Statement") and enclosed notice and proxy card are being furnished in connection with the solicitation of proxies by the Boards of Trustees (collectively, the "Board") of Rydex Series Funds and Rydex Dynamic Funds (each, a "Trust" and collectively, the "Trusts"). The proxies are being solicited for use at a special joint meeting of shareholders of the Trusts to be held at the Trusts' offices at 805 King Farm Boulevard, Suite 600, Rockville, Maryland 20850 on November 22, 2011 at 1:00 p.m. Eastern Time, and at any and all adjournments or postponements thereof (the "Meeting"). The Board has called the Meeting and is soliciting proxies from shareholders of each series of the Trusts listed in the accompanying notice to this Joint Proxy Statement (each, a "Fund" and collectively, the "Funds") for the purposes listed below:
PROPOSAL SHAREHOLDERS SOLICITED TO VOTE 1. THE APPROVAL OF A NEW INVESTMENT ALL FUNDS ADVISORY AGREEMENT BETWEEN EACH TRUST AND SECURITY INVESTORS, LLC, WITH RESPECT TO EACH FUND ("PROPOSAL 1") 2. THE APPROVAL OF A NEW SUB-ADVISORY RYDEX SERIES FUNDS-- AGREEMENT BETWEEN SECURITY INVESTORS, LONG SHORT INTEREST RATE STRATEGY FUND LLC AND AMERICAN INDEPENDENCE FINANCIAL SERVICES, LLC, WITH RESPECT TO LONG SHORT INTEREST RATE STRATEGY FUND ("PROPOSAL 2") 3. THE APPROVAL OF THE ELECTION OF NOMINEES ALL FUNDS TO THE BOARD OF TRUSTEES ("PROPOSAL 3") 4. THE APPROVAL OF A "MANAGER OF ALL FUNDS MANAGERS" ARRANGEMENT FOR EACH OF THE FUNDS ("PROPOSAL 4") 5. THE APPROVAL OF THE ELIMINATION OF THE RYDEX SERIES FUNDS-- FUNDAMENTAL INVESTMENT POLICY ON INVESTING IN OTHER INVESTMENT COMPANIES U.S. GOVERNMENT MONEY MARKET FUND ("PROPOSAL 5") 6. TO TRANSACT SUCH OTHER BUSINESS AS MAY PROPERLY COME BEFORE THE MEETING
This Joint Proxy Statement and the accompanying notice and the proxy card are being first mailed to shareholders on or about October 17, 2011. The Board has determined that the use of this Joint Proxy Statement for the Meeting is in the best interests of each Fund and its shareholders in light of the similar matters being considered and voted on by the shareholders of the other Funds. You are entitled to vote at the Meeting of each Fund of which you are a shareholder as of the close of business on October 3, 2011 (the "Record Date"). If you have any questions about the Proposals or about voting, please call The Altman Group, the Funds' proxy solicitor, at 1-877-864-5058. IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS FOR THE MEETING TO BE HELD ON NOVEMBER 22, 2011 This Joint Proxy Statement is available at www.proxyonline.us/docs/rydexsgi. In addition, with respect to Rydex Dynamic Funds and Rydex Series Funds (Commodities Strategy Fund, Long/Short Commodities Strategy Fund, Managed Futures Strategy Fund and Multi-Hedge Strategies Fund only) shareholders can find important information about each Fund in the Fund's annual report, dated December 31, 2010, including financial reports for the fiscal year ended December 31, 2010, and in any recent semi-annual report succeeding such annual report, if any. With respect to Rydex Series Funds (except for those Funds listed above), shareholders can find important information about each Fund in the Fund's annual report, dated March 31, 2011, including financial reports for the fiscal year ended March 31, 2011, and in any recent semi-annual report succeeding such annual report, if any. You may obtain copies of these reports without charge by writing to a Trust, by calling the telephone number shown on the front page of this Joint Proxy Statement or at www.rydex-sgi.com. 2 OVERVIEW OF THE PROPOSALS PROPOSALS 1 - 2 APPROVAL OF THE NEW AGREEMENTS Proposals 1 and 2 relate to actions that need to be taken in response to an impending transaction (the "Transaction") involving Securities Investors, LLC, which operates under the name Rydex Investments, the investment adviser to each of the Funds (the "Investment Adviser"). The Investment Company Act of 1940 (the "1940 Act"), the law that regulates mutual funds, such as the Funds, provides that a mutual fund's investment advisory agreement terminates whenever there is a "change in control" of the investment adviser. Pursuant to the Transaction, there will be a "change in control" of the Investment Adviser. In order for the Investment Adviser to continue to advise the Funds and manage their investments, a new investment advisory agreement must be in effect upon the consummation of the Transaction. For that reason, we are seeking shareholder approval of new investment advisory agreements for the Funds. In addition, the Transaction will result in the termination of the current sub-advisory agreements between the Investment Adviser and American Independence Financial Services, LLC ("AIFS") with respect to the Rydex Series Funds Long Short Interest Rate Strategy Fund (the "AIFS Fund"). Accordingly, Proposal 1 relates to the approval by shareholders of new investment advisory agreements between the Investment Adviser and the Funds (the "New Investment Advisory Agreements"), and Proposal 2 relates to the approval by shareholders of a new sub-advisory agreement between the Investment Adviser and AIFS with respect to the AIFS Fund (the "New AIFS Agreement") (together with the New Investment Advisory Agreements, the "New Agreements"). FOR THE REASONS DISCUSSED BELOW, THE BOARD RECOMMENDS THAT SHAREHOLDERS VOTE "FOR" THE APPROVAL OF THE NEW AGREEMENTS. INFORMATION REGARDING THE TRANSACTION Summary Discussion--Currently, the Investment Adviser is a part of a large group of companies that also includes businesses such as Security Benefit Life Insurance Company. The Investment Adviser is managed by an indirect wholly-owned subsidiary of Guggenheim Capital, LLC ("Guggenheim Capital"). Guggenheim Capital wishes to purchase the Investment Adviser and certain affiliated businesses. This Transaction will be effected by Guggenheim Capital buying 100% of the equity of the holding company that owns the Investment Adviser. After the Transaction, Guggenheim Capital will control the Investment Adviser (through one or more of its subsidiaries), and it is expected that the services rendered to the Funds by the Investment Adviser will not change. 3 Detailed Discussion--On September 20, 2011, Guggenheim Capital agreed to purchase the indirect holding company of the Investment Adviser. Guggenheim Capital's subsidiary, Guggenheim Partners, LLC ("Guggenheim") is a global, independent, privately-held, diversified financial services firm with more than 1,500 dedicated professionals. Headquartered in Chicago and New York, the firm operates through offices in 25 cities in the U.S., Europe and Asia. Guggenheim operates businesses in investment management, capital markets, wealth management and merchant banking. Within the investment and wealth management businesses, Guggenheim specializes in fixed income and alternative investments, and in providing sophisticated wealth advisory and family office services. Within capital markets, it specializes in providing debt financing and structured finance solutions to clients. Its merchant banking activities include a portfolio of investments in funds managed by it, joint venture business investments, and new business launch activities not integrated into other primary operating businesses. Detailed information on the effect of the Transaction on the ownership structure of the Investment Adviser is set forth in Appendix A to this Joint Proxy Statement. The Transaction will not result in material changes to the day-to-day management and operations of the Funds. The personnel, officers and managers of the Investment Adviser will remain the same. Guggenheim Capital will be the parent company of the Investment Adviser. In addition, as a result of the Transaction, Guggenheim Capital will acquire control of the Funds' principal underwriter/distributor, Rydex Distributors, LLC (the "Distributor"), an affiliate of the Investment Adviser. Under the 1940 Act, shareholder approval is not required in order for the Distributor to continue providing services to the Funds after the closing of the Transaction. The Board has also approved the continuation of the agreements related to the implementation of the distribution plans adopted by the Board on behalf of such Funds pursuant to Rule 12b-1 under the 1940 Act. While the parties expect the Transaction to be completed in late 2011 or early 2012, it is subject to various conditions (including a condition that 80% or more of the Funds' assets managed by the Investment Adviser approve the New Investment Advisory Agreements), and may be delayed or even terminated due to unforeseen circumstances. If for some reason the Transaction does not occur, the current investment advisory agreements between the Investment Adviser and the Funds (each, a "Current Investment Advisory Agreement" and collectively, the "Current Investment Advisory Agreements") and the current sub-advisory agreement between the Investment Adviser and AIFS with respect to the AIFS Fund (the "Current AIFS Agreement") (collectively, the "Current Agreements") will not terminate and will remain in effect, and the New Agreements will not be entered into, even if they have been approved by Fund shareholders. If Proposal 1 is not approved by shareholders of any Fund, the Board will evaluate other short- and long-term options permitted by law, which could include interim investment advisory agreements of limited duration with the Investment Adviser, or maintaining the current ownership structure pending further discussions. SECTION 15(f) OF THE 1940 ACT Section 15(f) of the 1940 Act provides that, when a change in control of an investment adviser occurs, the investment adviser or any of its affiliated persons may receive any amount or benefit in connection with the change in control as long as two conditions are met. The first 4 condition specifies that no "unfair burden" may be imposed on the fund as a result of a transaction relating to the change in control, including any express or implied terms, conditions or understandings. The term "unfair burden," as defined in the 1940 Act, includes any arrangement during the two-year period after the change in control transaction whereby the investment adviser (or predecessor or successor adviser), or any "interested person" (as defined in the 1940 Act) of any such investment adviser, receives or is entitled to receive any compensation, directly or indirectly, from the investment company or its security holders (other than fees for bona fide investment advisory or other services), or from any person in connection with the purchase or sale of securities or other property to, from, or on behalf of the fund (other than fees for bona fide principal underwriting services), which could limit the ability of the fund to engage in brokerage transactions with certain broker-dealers, although such limits are not expected to cause any fund to change its brokerage relationships. The second condition specifies that, during the three-year period immediately following consummation of the change in control transaction, at least 75% of the fund's board of trustees must not be "interested persons" (as defined in the 1940 Act) of the investment adviser or predecessor adviser. Consistent with the conditions of Section 15(f), Guggenheim Capital has agreed that it will not take any action that would have the effect, directly or indirectly, of causing any requirement of the provisions of Section 15(f) to be violated with respect to the Transaction. The Investment Adviser has represented to the Board that no unfair burden would be imposed on the Funds as a result of the Transaction. APPROVAL OF THE NEW AGREEMENTS BY THE BOARD At a Special Meeting of the Board held on August 16, 2011 (the "August Special Board Meeting"), at which a majority of the members of the Board (the "Trustees"), including a majority of the Trustees who are not "interested persons" (as defined under the 1940 Act) of the Trust and who are not interested persons of any party to the New Investment Advisory Agreements (the "Independent Trustees"), were present, the Board considered the New Investment Advisory Agreements, pursuant to which, subject to their approval by each Fund's shareholders, the Investment Adviser will continue to serve each Fund as investment adviser after the completion of the Transaction. At a Special Meeting of the Board held on September 14, 2011 (the "September Special Board Meeting", and together with the August Special Board Meeting, the "Special Board Meetings") at which a majority of the Trustees, including a majority of the Independent Trustees, were present, the Board considered further information about the Transaction and voted in favor of the New Investment Advisory Agreements. The Investment Adviser's rate of fees for its services to each Fund under each applicable New Investment Advisory Agreement will be the same as its fees under the corresponding Current Investment Advisory Agreement. The other terms of each New Investment Advisory Agreement will also be the same in all material respects to those of the corresponding Current Investment Advisory Agreement. As a result, in reviewing the New Investment Advisory Agreements at the Special Board Meetings, the Board also considered its review of relevant materials relating to the Current Investment Advisory Agreements at the Board's contract review meeting on August 11, 2011 and contract renewal meeting on August 17, 2011 (together, the "2011 Renewal Meeting"). 5 BOARD CONSIDERATIONS IN APPROVING THE NEW AGREEMENTS Prior to the Special Board Meetings, representatives of Guggenheim Capital informed the Board of the Transaction. With respect to the Transaction, the Board reviewed materials received from Guggenheim Capital, including information relating to the terms of the Transaction. The Board also reviewed information regarding Guggenheim Capital, including, but not limited to: (a) certain representations concerning Guggenheim Capital's financial condition, (b) information regarding the new proposed ownership structure and its possible effect on shareholders, (c) information regarding the consideration to be paid by Guggenheim Capital, and (d) potential conflicts of interest. In considering the New Agreements, the Board determined that the New Agreements would enable shareholders of the Funds to continue to obtain high quality services at a cost that is appropriate, reasonable, and in the best interests of their shareholders. The Board, including the Independent Trustees, unanimously approved the New Agreements. In reaching their decision, the Trustees carefully considered information that they had received throughout the year as part of their regular oversight of the Funds, including, in particular, information from the Investment Adviser and AIFS (collectively, the "Advisers") that the Board had received relating to the Current Agreements at the Board's 2011 Renewal Meeting. The Trustees noted that, at the 2011 Renewal Meeting, they had obtained and reviewed a wide variety of information, including certain comparative information regarding performance of the Funds relative to performance of other comparable mutual funds. They also considered the evolution of the Rydex|SGI family of funds and the Investment Adviser since the change in control of the Investment Adviser in 2010 and Guggenheim Capital's commitment to the success of the Investment Adviser and the Funds. In addition, as a part of their required consideration of the renewal of the Current Agreements at the 2011 Renewal Meeting, the Trustees, including the Independent Trustees, had evaluated a number of considerations, including among others: (a) the quality of the Advisers' investment advisory and other services; (b) the Advisers' investment management personnel; (c) the Advisers' operations and financial condition; (d) the Advisers' brokerage practices (including any soft dollar arrangements) and investment strategies; (e) the level of the fees that the Advisers charge compared with the fees charged to comparable mutual funds or accounts; (f) each Fund's overall fees and operating expenses compared with similar mutual funds; (g) the level of the Advisers' profitability from its Fund-related operations; (h) the Advisers' compliance systems; (i) the Advisers' policies on and compliance procedures for personal securities transactions; (j) the Advisers' reputation, expertise and resources in the financial markets; and (k) Fund performance compared with similar mutual funds. Based on the Board's deliberations at the 2011 Renewal Meeting, and its evaluation of the information regarding the Transaction and the fact that the Transaction is not expected to change the level and quality of services rendered by the Advisers to any of the Funds, the Board, including all of the Independent Trustees, unanimously: (a) concluded that terms of the New Agreements are fair and reasonable; (b) concluded that the Advisers' fees were reasonable in light of the services that they provide to the Funds; and (c) agreed to approve the New Agreements, subject to shareholder approval. 6 NEW AGREEMENTS NATURE, EXTENT AND QUALITY OF SERVICES PROVIDED BY THE ADVISERS. At the 2011 Renewal Meeting, the Board reviewed the scope of services to be provided by the Investment Adviser under the Current Investment Advisory Agreements and by AIFS under the Current AIFS Agreement, and, at the Special Board Meetings, noted that there would be no significant differences between the scope of services required to be provided by the Advisers under the Current Agreements (which had been recently approved by shareholders and renewed by the Board at the 2011 Renewal Meeting) and the scope of services required to be provided by the Advisers under the New Agreements. The Board noted that the key investment and management personnel of the Investment Adviser servicing the Funds and the management personnel of AIFS servicing the AIFS Fund are expected to remain the same following the Transaction. The Trustees also considered Guggenheim Capital's representations to the Board that the Investment Adviser would continue to provide investment and related services that were of materially the same quality and quantity as services provided to the Funds in the past, and that these services are appropriate in scope and extent in light of the Funds' operations, the competitive landscape of the investment company business and investor needs. The Board also noted that AIFS was not involved in the Transaction and that the approval of the New AIFS Agreement with AIFS was required due to the proposed assignment of the Current Investment Advisory Agreements with the Investment Adviser. FUND EXPENSES AND PERFORMANCE OF THE FUNDS AND THE ADVISERS. At the 2011 Renewal Meeting, the Board had reviewed statistical information prepared by the Advisers regarding the expense ratio components and performance of each Fund. Based on the representations made by Guggenheim Partners at the August Special Board Meeting that the Investment Adviser would continue to operate following the closing of the Transaction in much the same manner as it currently operates, the Board concluded that the investment performance of the Investment Adviser was not expected to be affected by the Transaction. The Board also concluded that AIFS would continue to operate following the closing of the Transaction in much the same manner as it operates today and, as a result, the Board concluded that the investment performance of AIFS was not expected to be affected by the Transaction. COSTS OF SERVICES PROVIDED TO THE FUNDS AND PROFITS REALIZED BY THE ADVISERS AND THEIR AFFILIATES. At the 2011 Renewal Meeting, the Board had reviewed information about the profitability of the Funds to the Investment Adviser based on the advisory fees payable under the Current Investment Advisory Agreements. At that meeting, the Board had also analyzed the Funds' expenses, including the investment advisory fees paid to the Investment Adviser. The Board also had reviewed reports comparing the expense ratios and sub-advisory fees to those of other comparable mutual funds and concluded that AIFS' sub-advisory fees were reasonable and the result of arm's length negotiation. At the Special Board Meetings, the Board considered the fact that the fee rates payable to each of the Advisers would be the same under each Fund's New Agreements as they are under such Fund's Current Agreements. At that meeting, the Board had also concluded that, in the near future, the profits to be realized by AIFS and its affiliates under the New AIFS Agreement, and from other relationships between the Funds and AIFS and its affiliates, if any, should remain within the range the Board previously considered reasonable and appropriate. With respect to anticipated profitability, the Board noted that it was too early to 7 predict how the Transaction would affect the Advisers' profitability with respect to the Funds, but noted that this matter would be given further consideration on an ongoing basis. ECONOMIES OF SCALE. In connection with its review of the Funds' profitability analysis at the 2011 Renewal Meeting, the Board reviewed information regarding economies of scale or other efficiencies that may result from increases in the Funds' asset levels. The Trustees noted that the fees would not change under the New Agreements, and that no additional economies of scale would be directly realized as a result of the Transaction. They also noted that they will have the opportunity to again review the appropriateness of the fees payable to the Advisers under the New Agreements when the renewal of the New Agreements comes before the Board. OTHER BENEFITS TO THE ADVISERS AND/OR ITS AFFILIATES. In addition to evaluating the services provided by the Investment Adviser, the Board had considered the nature, extent, quality and cost of the distribution services performed by the Distributor under a separate agreement at the 2011 Renewal Meeting. At the Special Board Meetings, the Board reviewed information regarding potential economies of scale arising from the integration of the asset management businesses of Guggenheim Capital. The Board also considered the terms of the Transaction and the changes to the corporate ownership structure of the Investment Adviser, noting that the Investment Adviser would no longer be a subsidiary of SBC. In this regard, the Board noted that, under the corporate structure after the Transaction, the Investment Adviser would be more closely controlled by Guggenheim Capital, which could benefit Guggenheim Capital. The Board also noted that the costs associated with the Transaction would be borne by Guggenheim Capital (or its affiliates) and not the Funds. With respect to the New AIFS Agreement, at the 2011 Renewal Meeting, the Board received and considered information regarding the character and amount of other incidental benefits AIFS might receive as a result of its relationship with the AIFS Fund, including its soft dollar practices, if any. The Board concluded that, taking into account any incidental benefits AIFS might receive, the terms of the Current AIFS Agreement, including the compensation to be paid thereunder, were reasonable. At its Special Board Meetings, the Board considered other benefits to AIFS and its affiliates expected to be derived from its relationships with the Funds as a result of the Transaction and noted that no additional benefits were expected because AIFS was not a party to the Transaction. PROPOSAL 3 ELECTION OF TRUSTEES Proposal 3 relates to the election of the following nine individuals to the Board: Donald C. Cacciapaglia, Corey A. Colehour, J. Kenneth Dalton, John O. Demaret, Richard M. Goldman, Werner E. Keller, Thomas F. Lydon, Patrick T. McCarville and Roger Somers. All of the nominees, except for Mr. Cacciapaglia, currently serve on the Board. If elected, the terms of the nominees will begin shortly after the shareholder vote and each nominee will serve as Trustee for the life of the Trusts or until retirement, removal, or his office is terminated pursuant to the Trusts' Declarations of Trust. Unless and until such new terms begin, the existing Trustees will continue to serve their current terms. In connection with the Transaction, the Board believes that expanding the Board to include Mr. Cacciapaglia, who is a member of senior management of 8 Guggenheim's investment management business, and who is proposed to serve on the other boards in the Rydex|SGI family of funds would be appropriate. If elected by shareholders, Mr. Cacciapaglia's term as Trustee would commence shortly after the shareholder vote. The Board believes that it is in shareholders' best interest to have a Board that is composed entirely of elected trustees (and to comply with certain legal requirements regarding the proportion of board members that need to have been elected by shareholders). Because a shareholder vote is required to approve the New Investment Advisory Agreements, the Board has proposed that shareholders elect all of the nominees during the same shareholder meeting, which would avoid the expense of preparing and mailing another proxy statement solely for the election of Trustees. PROPOSAL 4 APPROVAL OF A "MANAGER OF MANAGERS" ARRANGEMENT Shareholders of the Funds also are being asked to consider the approval of a "manager of mangers" arrangement for each of the Funds to permit the Investment Adviser, subject to prior approval by the Board, to retain sub-advisers or amend the terms of an existing sub-advisory agreement without shareholder approval where the sub-adviser is not affiliated with the Investment Adviser. The 1940 Act makes it unlawful for any person to act as an investment adviser (including a sub-adviser) to a fund except pursuant to a written contract that has been approved by the fund's board as well as shareholders. Therefore, the Investment Adviser is generally required to obtain shareholder approval prior to retaining a new sub-adviser, which can be costly. The Investment Adviser and certain affiliated funds have previously obtained an exemptive order from the U.S. Securities and Exchange Commission ("SEC"), pursuant to which the Investment Adviser may retain a new sub-adviser to manage a fund, or amend the terms of an existing sub-advisory agreement without prior shareholder approval, subject to certain conditions, including a requirement to send information to shareholders with respect to the appointment of a new sub-adviser (the "Manager of Managers Order"). In addition to the other conditions imposed by the Manager of Managers Order, before the arrangement may be relied upon for a Fund, shareholders of the Fund must approve the arrangement. Although no sub-advisers currently serve the Funds, because shareholder approval is being solicited for other proposals, you are being asked to approve the reliance by the Investment Adviser and the Funds on the Manager of Managers Order. If approved, the Manager of Managers Order would allow the Investment Adviser, subject to Board review and approval, to retain or replace sub-advisers without the delay and expenses associated with soliciting shareholder approval. Shareholders should note, however, that the Investment Adviser and the Board have no intent to make an extensive use of this arrangement for the Funds in the foreseeable future. 9 PROPOSAL 5 MONEY MARKET FUND ONLY--APPROVAL OF THE ELIMINATION OF THE FUND'S FUNDAMENTAL INVESTMENT POLICY ON INVESTING IN OTHER INVESTMENT COMPANIES Shareholders of the Rydex Series Funds U.S. Government Money Market Fund (the "Money Market Fund") also is being asked to consider the approval of the elimination of the Money Market Fund's current fundamental investment policies on investing in other investment companies. Under the 1940 Act, any change to a fundamental investment policy must be approved by shareholders of the fund. The 1940 Act does not require that a fund adopt a fundamental investment policy on investing in other investment companies. Therefore, the Money Market Fund's current fundamental investment policy on investing in other investment companies is unnecessary. This proposal is motivated by the decision to change the Money Market Fund's investment strategies in order to invest in other investment companies when the Investment Adviser deems such an investment in the best interests of the Money Market Fund. The Money Market Fund's current policy restricts unnecessarily the Money Market Fund's ability to invest in other investment companies so the Investment Adviser proposed, and the Board agreed, to eliminate the Fund's policy on investing in other investment companies. Accordingly, Proposal 5 seeks approval of the elimination of the Money Market Fund's fundamental investment policy on investing in other investment companies in order to permit the Money Market Fund to invest in other investment companies. Proposal 5 is unrelated to Proposals 1 and 2. The Investment Adviser believes that it could be appropriate, when market conditions warrant, for the Money Market Fund to invest in other money market funds. The Investment Adviser also believes that this change could improve yield and could permit the Fund to have exposure to new attractive investment opportunities. The Money Market Fund will remain subject to strict regulatory requirements that apply to money market funds. THE BOARD, INCLUDING THE INDEPENDENT TRUSTEES, UNANIMOUSLY RECOMMENDS THAT SHAREHOLDERS VOTE "FOR" THE APPROVAL OF THE NEW AGREEMENTS, "FOR" THE ELECTION OF EACH NOMINEE, "FOR" THE APPROVAL OF THE A MANAGER OF MANAGERS ARRANGEMENT AND "FOR" THE ELIMINATION OF THE FUNDAMENTAL INVESTMENT POLICY ON INVESTING IN OTHER INVESTMENT COMPANIES FOR EACH MONEY MARKET FUND. UNMARKED, PROPERLY SIGNED AND DATED PROXIES WILL BE SO VOTED. 10 PROPOSAL 1--THE APPROVAL OF NEW INVESTMENT ADVISORY AGREEMENTS WITH RESPECT TO ALL FUNDS As discussed above, Proposal 1 relates to the approval by shareholders of the New Investment Advisory Agreements between the Investment Adviser and each of the Funds. You are being asked to vote separately on Proposal 1 solely with respect to the Fund(s) that you own. Forms of the New Investment Advisory Agreements are attached in Appendix B. The terms of the New Investment Advisory Agreements are substantially identical to those of the Current Investment Advisory Agreements, which were recently approved by shareholders, except with respect to the date of execution. Consequently, upon shareholder approval, the Investment Adviser will continue to render substantially the same services to the Funds under the New Investment Advisory Agreements that it currently renders to the Funds under the Current Investment Advisory Agreements. The Current Investment Advisory Agreements will remain in place until the completion of the Transaction, at which time, as a result of the change in the control of the Investment Adviser, the Current Investment Advisory Agreements will terminate. If for any reason the Transaction does not occur, the Current Investment Advisory Agreements will not terminate and will remain in effect, and the New Investment Advisory Agreements will not be entered into, even if they have been approved by Fund shareholders. THE INVESTMENT ADVISER Security Investors, LLC, which operates under the name Rydex Investments, is located at 805 King Farm Boulevard, Suite 600, Rockville, Maryland 20850, and currently serves as investment adviser to the Funds pursuant to the Current Investment Advisory Agreements. Information regarding the Current Investment Advisory Agreements, including (a) the date of the agreements, (b) the date on which they were last approved by shareholders and (c) the rate of compensation to the Investment Adviser, is provided in Appendix C. If the New Investment Advisory Agreements are approved by shareholders, they will continue for an initial term of two years and for subsequent one-year terms so long as they are renewed annually in accordance with their terms (see discussion under "Term and Continuance" below). Information regarding the name(s), address(es) and principal occupation(s) of the principal executive officer(s) and director(s) of the Investment Adviser is set forth in Appendix D. A list of the Trustees and officers of the Trusts who hold positions with the Investment Adviser also is set forth in Appendix D. In addition, set forth in Appendix E is a list of other registered investment companies with similar investment objectives as each Fund, for which the Investment Adviser acts as investment manager, adviser or sub-adviser. (As previously noted, the ownership structure of the Investment Adviser is set forth in Appendix A.) MATERIAL TERMS OF THE NEW INVESTMENT ADVISORY AGREEMENTS The following summary of the New Investment Advisory Agreements summarizes the material terms of the New Investment Advisory Agreements and is qualified in its entirety by 11 reference to the New Investment Advisory Agreements, a form of which is attached in Appendix B. DUTIES OF THE INVESTMENT ADVISER. Under the Current Investment Advisory Agreements and the New Investment Advisory Agreements (each, an "Advisory Agreement" and collectively, the "Advisory Agreements"), the Investment Adviser is required to: o provide the Funds with investment research, advice and supervision and furnish continuously an investment program for the Funds, consistent with the respective investment objectives and policies of each Fund; o determine, in its discretion and without prior consultation, what securities shall be purchased for the Funds, what securities shall be held or sold by the Funds and what portion of the Funds' assets shall be held uninvested in cash, subject always to the provisions of each Trust's Declaration of Trust, By-Laws and registration statement on file with the SEC; o discharge its responsibilities subject to the control of the officers and the Board, and in compliance with the objectives, policies, and limitations set forth in the Funds' prospectus(es) and applicable laws and regulations; o vote any proxies for Fund securities; o provide the Trust, and any other agent designated by the Trust, with records concerning the Investment Adviser's activities which each Fund is required to maintain; and o provide other reports reasonably requested by the Trust's officers and Board concerning the Investment Adviser's discharge of the foregoing responsibilities. INDEMNITY OBLIGATION. Under the Advisory Agreements, the Investment Adviser shall indemnify and hold harmless the Trust and all affiliated persons thereof (within the meaning of Section 2(a)(3) of the 1940 Act) and all controlling persons (as described in Section 15 of the Securities Act of 1933) against any and all losses, claims, damages, liabilities or litigation (including reasonable legal and other expenses) by reason of or arising out of: (a) the Investment Adviser being in material violation of any applicable federal or state law, rule or regulation or any investment policy or restriction set forth in the Funds' registration statement or any written guidelines or instruction provided in writing by the Board; (b) a Fund's failure to satisfy the diversification or source of income requirements of Subchapter M of the Internal Revenue Code; or (c) the Investment Adviser's willful misfeasance, bad faith or gross negligence generally in the performance of its duties or its reckless disregard of its obligations and duties under the Advisory Agreements. TERM AND CONTINUANCE. Each Advisory Agreement provides that unless terminated as provided therein, the Advisory Agreement shall continue for an initial term of two years. Thereafter, the Advisory Agreement shall continue in effect for successive annual periods provided such continuance is specifically approved at least annually (a) by the vote of the 12 Trustees or by a vote of the shareholders; and (b) by the vote of a majority of the Independent Trustees, cast in person at a meeting called for the purpose of voting on such approval. Each Advisory Agreement may be terminated with respect to a Fund at any time without payment of any penalty, by a Fund upon the vote of either the Board or by a majority of the outstanding voting securities of the Fund. The Investment Adviser may also, by not more than sixty (60) days' nor less than thirty (30) days' written notice, terminate the Advisory Agreements. Each Advisory Agreement will terminate automatically in the event of its "assignment" (as that term is defined under the 1940 Act). BOARD RECOMMENDATION ON PROPOSAL 1 THE TRUSTEES UNANIMOUSLY RECOMMEND THAT SHAREHOLDERS OF THE FUNDS VOTE "FOR" PROPOSAL 1 13 PROPOSAL 2--THE APPROVAL OF NEW SUB-ADVISORY AGREEMENT WITH RESPECT TO: LONG SHORT INTEREST RATE STRATEGY FUND As discussed above, Proposal 2 relates to the approval by shareholders of the New AIFS Agreement between the Investment Adviser and AIFS with respect to Long Short Interest Rate Strategy Fund. You are being asked to vote separately on Proposal 2 solely if you own the AIFS Fund. A form of the New AIFS Agreement is attached in Appendix F. The terms of the New AIFS Agreement are identical to those of the Current AIFS Agreement, except with respect to the date of execution. Consequently, upon shareholder approval, AIFS will continue to render substantially the same services to the AIFS Fund under the New AIFS Agreement that it currently renders to the AIFS Fund under the Current AIFS Agreement. The Current AIFS Agreement will remain in place until the completion of the Transaction, at which time, as a result of the change in the control of the Investment Adviser, the Current AIFS Agreement will terminate. Thereafter, subject to shareholder approval, the New AIFS Agreement will go into effect. If for some reason the Transaction does not occur, the Current AIFS Agreement will not automatically terminate and will remain in effect, and the New AIFS Agreement will not be entered into, even if it has been approved by Fund shareholders. The effectiveness of Proposal 2 is also contingent on the approval of Proposal 1 by shareholders of the AIFS Fund. INFORMATION ABOUT AIFS American Independence Financial Services, LLC, located at 335 Madison Avenue, Mezzanine, New York, New York 10017, currently serves as sub-adviser to Long Short Interest Rate Strategy Fund pursuant to the Current AIFS Agreement. Information regarding the Current AIFS Agreement, including (a) the date of the agreement, (b) the date on which it was last approved by shareholders and (c) the rate of compensation to AIFS, is provided in Appendix G. If the New CLS Agreement is approved by shareholders, it will continue for an initial term of two years and for subsequent one-year terms so long as it is renewed annually in accordance with its terms (see discussion under "Term and Continuance" below). Information regarding the name(s), address(es) and principal occupation(s) of the principal executive officer(s) and managing member(s) of AIFS is set forth in Appendix G. A list of the Trustees and officers of the Trust who hold positions with AIFS also is set forth in Appendix H. In addition, set forth in Appendix I is a list of other registered investment companies with similar investment objectives as the AIFS Fund, for which AIFS acts as investment manager, adviser or sub-adviser. 14 MATERIAL TERMS OF THE AIFS SUB-ADVISORY AGREEMENT The following summary of the New AIFS Agreement between the Investment Adviser and AIFS summarizes its material terms and is qualified in its entirety by reference to such New AIFS Agreement, a form of which is attached in Appendix F. DUTIES OF AIFS. Under the Current AIFS Agreement and the New AIFS Agreement, each between the Investment Adviser and AIFS (collectively, the "AIFS Sub-Advisory Agreements"), AIFS, subject to the supervision of the Investment Adviser and the Board, acts as research provider for and provides certain investment advice for the management of the assets of the AIFS Fund, all in accordance with the investment objective and policies of such Fund as reflected in the current prospectus and statement of additional information as may be adopted from time to time by the Board. In accordance with applicable requirements, AIFS will also maintain all books and records relating to the transactions it executes or that are otherwise required, and render to the Trust and the Investment Adviser such periodic and special reports at any time upon reasonable request. INDEMNITY OBLIGATION. The AIFS Sub-Advisory Agreements provide that AIFS shall indemnify the Investment Adviser and the Trust, and their respective officers and trustees, for any liability and expenses, including reasonable attorneys' fees, which may be sustained as a result of AIFS' willful misfeasance, bad faith or gross negligence, or the reckless disregard of its obligations and duties under the AIFS Sub-Advisory Agreements. The AIFS Sub-Advisory Agreements also provide that the Investment Adviser shall indemnify AIFS and its officers and members for any liability and expenses, including reasonable attorneys' fees, which may be sustained as a result of the AIFS' performance of its obligations hereunder, except where such liability or expense results from the AIFS' willful misfeasance, bad faith or gross negligence, or the reckless disregard of the its obligations and duties under the AIFS Sub-Advisory Agreements. TERM AND CONTINUANCE. Under their terms, the AIFS Sub-Advisory Agreements will remain in full force and effect for a period of up to two years from the date of their execution, and will continue thereafter as long as their continuance is approved at least annually by the Board or by vote of a majority of the outstanding shares of the AIFS Fund, as well as by a majority of the Independent Trustees by vote cast in person at a meeting called for that purpose. However, the AIFS Sub-Advisory Agreements may be terminated with respect to the AIFS Fund, at any time without the payment of any penalty upon 30-60 days' written notice, either by the Investment Adviser or the Trust, or upon 60 days' written notice by AIFS. Additionally, each AIFS Sub-Advisory Agreement will terminate immediately in the event of its assignment or upon the termination of the corresponding Investment Advisory Agreement. BOARD RECOMMENDATION ON PROPOSAL 2 THE TRUSTEES UNANIMOUSLY RECOMMEND THAT SHAREHOLDERS OF THE AIFS FUNDS VOTE "FOR" PROPOSAL 2 15 PROPOSAL 3--THE APPROVAL OF THE ELECTION OF TRUSTEES FOR ALL FUNDS Proposal 3 relates to the election of Trustees for the Board. The Board proposes the election of the following nominees: Donald C. Cacciapaglia, Corey A. Colehour, J. Kenneth Dalton, John O. Demaret, Richard M. Goldman, Werner E. Keller, Thomas F. Lydon, Patrick T. McCarville and Roger Somers. Each nominee has indicated a willingness to serve if elected. If elected, each nominee will hold office for the life of a Trust or until retirement, removal, or their office is terminated pursuant to the Trusts' Declarations of Trust. A Trustee may be removed either by: (i) the vote or written consent of at least two-thirds of the Trustees prior to such removal or (ii) the vote or written consent of Shareholders owning at least than two-thirds of a Trust's outstanding shares. In connection with the Transaction, the Board believes that expanding the Board to include Mr. Cacciapaglia, who is a member of senior management of Guggenheim's investment management business, and who is proposed serve on other boards in the Rydex|SGI family of funds, would be appropriate. If elected, Mr. Cacciapaglia would be an Interested Trustee due to the position he holds with Guggenheim Capital. The Board believes that it is in shareholders' best interest to have a Board that is composed entirely of elected trustees. The Board also believes that good governance practices involve having a majority of its members be Independent Trustees. If all of the nominees are elected, the Board will consist of seven trustees who are not considered to be "interested persons" of the Funds as defined in the 1940 Act and two trustees who are considered to be "interested persons" of the Funds as defined in the 1940 Act. The Trusts' Nominating Committee, which is responsible for identifying, evaluating and nominating individuals to serve as trustees of the Trusts, recommended that the Board expand in size to nine members, and include a trustee who is affiliated with the Investment Adviser's parent company, Guggenheim Capital. The Board considered the long-term ability of the Rydex|SGI family of funds to operate in an efficient and cohesive manner and determined that expanding the size of the Board to include a representative of the parent of the Investment Adviser would benefit the Funds. The Nominating Committee also considered Mr. Cacciapaglia's skills and background, and noted that his past and current experience in various aspects of banking and finance would make him a strong addition to the Board. At a meeting held on September 16, 2011, the Board approved the Nominating Committee's recommendation that the nine nominees stand for election. INFORMATION REGARDING THE NOMINEES The following table lists the nominees for Trustee, including the current Trustees, their ages, current position(s) held with the Trusts, length of time served, principal occupations during the past five years, number of funds overseen within the fund complex and other directorships/trusteeships held outside of the fund complex. For the new Trustee nominee, the table shows the number of funds the nominee will oversee if elected. The fund complex consists of Rydex ETF Trust, Rydex Variable Trust, Rydex Series Funds, Rydex Dynamic Funds, Security Equity Fund, Security Income Fund, Security Large Cap Value Fund, Security Mid Cap 16 Growth Fund and SBL Fund. The mailing address of each nominee is 805 King Farm Boulevard, Suite 600, Rockville, Maryland 20850.
-------------------------------------------------------------------------------------------------------------------------- NUMBER OF PORTFOLIOS IN FUND POSITION(S) HELD WITH COMPLEX OTHER THE TRUSTS, TERM OF OVERSEEN DIRECTORSHIPS NAME, ADDRESS OFFICE AND LENGTH OF PRINCIPAL OCCUPATION(S) BY TRUSTEE HELD BY TRUSTEE AND AGE OF TRUSTEE TIME SERVED DURING PAST 5 YEARS OR NOMINEES OR NOMINEES -------------------------------------------------------------------------------------------------------------------------- INTERESTED TRUSTEES OR NOMINEES -------------------------------------------------------------------------------------------------------------------------- Donald C. Nominee Guggenheim Investments: President and 212 None Cacciapaglia (60)* Chief Administrative Officer from February 2010 to present Channel Capital Group Inc.: Chairman and CEO from April 2002 to February 2010 -------------------------------------------------------------------------------------------------------------------------- Richard M. Goldman Trustee and President Security Benefit Corporation: Senior Vice 212 None (50)** from 2009 to present President from March 2007 to present Security Benefit Asset Management Holdings, LLC: Chief Executive Officer from October 2010 to present Rydex Holdings, LLC: Chief Executive Officer & Manager from January 2009 to present Security Investors, LLC: President, CEO & Member Representative from August 2007 to present Rydex Distributors, LLC: President, Chief Executive Officer and Manager from January 2009 to present Rydex Fund Services, LLC: Manager from July 2009 to present SBL Fund, Security Equity Fund, Security Income Fund, Security Large Cap Value Fund and Security Mid Cap Growth Fund: President from May 2008 to present First Security Benefit Life and Annuity Insurance Company of New York: Director from September 2007 to September 2010 Rydex Advisors, LLC: Director and Chief Executive Officer from January 2009 to January 2010 Rydex Advisors II, LLC: Director and Chief Executive Officer from January 2009 to January 2010 --------------------------------------------------------------------------------------------------------------------------
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-------------------------------------------------------------------------------------------------------------------------- NUMBER OF PORTFOLIOS IN FUND POSITION(S) HELD WITH COMPLEX OTHER THE TRUSTS, TERM OF OVERSEEN DIRECTORSHIPS NAME, ADDRESS OFFICE AND LENGTH OF PRINCIPAL OCCUPATION(S) BY TRUSTEE HELD BY TRUSTEE AND AGE OF TRUSTEE TIME SERVED DURING PAST 5 YEARS OR NOMINEES OR NOMINEES -------------------------------------------------------------------------------------------------------------------------- Security Global Investors, LLC: Manager and President from May 2007 to January 2010 Security Distributors, Inc.: Director from March 2007 to 2009 R.M. Goldman Partner, LLC: Managing Member from February 2006 to February 2007 ------------------------------------------------------------------------------------------------------------------------- ------------------------------------------------------------------------------------------------------------------------- INDEPENDENT TRUSTEES ------------------------------------------------------------------------------------------------------------------------- Corey A. Colehour Rydex Series Funds: Retired; President and Senior Vice 179 None (65) Trustee from 1993 to President of Schield Management Company present; and Member (registered investment adviser) from 2003 of the Audit and to 2006 Governance and Nominating Committees from 1995 to present Rydex Dynamic Funds: Trustee and Member of the Audit, Governance and Nominating Committees from 1999 to present ------------------------------------------------------------------------------------------------------------------------- J. Kenneth Dalton Rydex Series Funds: Retired 179 Trustee of (70) Trustee from 1995 to Epiphany Funds present; Member of since 2009 the Governance and Nominating Committees from 1995 to present; Chairman of the Audit Committee from 1997 to present; and Member of the Risk Oversight Committee from 2010 to present Rydex Dynamic Funds: Trustee and Member of the Governance and Nominating -------------------------------------------------------------------------------------------------------------------------
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-------------------------------------------------------------------------------------------------------------------------- NUMBER OF PORTFOLIOS IN FUND POSITION(S) HELD WITH COMPLEX OTHER THE TRUSTS, TERM OF OVERSEEN DIRECTORSHIPS NAME, ADDRESS OFFICE AND LENGTH OF PRINCIPAL OCCUPATION(S) BY TRUSTEE HELD BY TRUSTEE AND AGE OF TRUSTEE TIME SERVED DURING PAST 5 YEARS OR NOMINEES OR NOMINEES ------------------------------------------------------------------------------------------------------------------------- Committees from 1999 to present; Chairman of the Audit Committee from 2006 to present; and Member of the Risk Oversight Committee from 2010 to present ------------------------------------------------------------------------------------------------------------------------- John O. Demaret (71) Rydex Series Funds: Retired 179 None Trustee from 1997 to present; Chairman of the Board from 2006 to present; Member of the Audit Committee from 1997 to present; and Member of the Risk Oversight Committee from 2010 to present Rydex Dynamic Funds: Chairman of the Board from 2006 to present; Trustee and Member of the Audit Committee from 1999 to present; and Member of the Risk Oversight Committee from 2010 to present ------------------------------------------------------------------------------------------------------------------------- Werner E. Keller (71) Rydex Series Funds: Founder and President of Keller Partners, 179 None Vice Chairman of the LLC (registered investment adviser) from Board of Trustees 2005 to present; and Retired from 2001 to from 2010 to present; 2005 Trustee and Member of the Audit and Governance and Nominating Committees from 2005 to present and Chairman and Member of the Risk Oversight Committee from 2010 to present Rydex Dynamic Funds: Vice Chairman of the Board of Trustee from 2010 to -------------------------------------------------------------------------------------------------------------------------
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-------------------------------------------------------------------------------------------------------------------------- NUMBER OF PORTFOLIOS IN FUND POSITION(S) HELD WITH COMPLEX OTHER THE TRUSTS, TERM OF OVERSEEN DIRECTORSHIPS NAME, ADDRESS OFFICE AND LENGTH OF PRINCIPAL OCCUPATION(S) BY TRUSTEE HELD BY TRUSTEE AND AGE OF TRUSTEE TIME SERVED DURING PAST 5 YEARS OR NOMINEES OR NOMINEES ------------------------------------------------------------------------------------------------------------------------- present and Trustee since 2005; Member of the Audit, Governance, and Nominating Committees from 2005 to present; and Chairman and Member of the Risk Oversight Committee from 2010 to present ------------------------------------------------------------------------------------------------------------------------- Thomas F. Lydon Rydex Series Funds: President of Global Trends Investments 179 Board of (51) Trustee and Member (registered investment adviser) from 1996 Directors of US of the Audit, to present Global Investors Governance and (GROW) since Nominating April 1995 Committees from 2005 to present Rydex Dynamic Funds: Trustee and Member of the Audit, Governance, and Nominating Committees from 2005 to present ------------------------------------------------------------------------------------------------------------------------- Patrick T. McCarville Rydex Series Funds: Retired. Chief Executive Officer of Par 179 None (69) Trustee from 1997 to Industries, Inc., d/b/a Par Leasing from present; Chairman of 1977 to 2010 the Governance and Nominating Committees from 1997 to present; and Member of the Audit Committee from 1997 to present Rydex Dynamic Funds: Trustee, Chairman of the Governance and Nominating Committees and Member of the Audit Committee from 1999 to present ------------------------------------------------------------------------------------------------------------------------- Roger Somers (67) Rydex Series Funds: Founder and Chief Executive Officer of 179 None Trustee from 1993 to Arrow Limousine from 1965 to present present; and Member -------------------------------------------------------------------------------------------------------------------------
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-------------------------------------------------------------------------------------------------------------------------- NUMBER OF PORTFOLIOS IN FUND POSITION(S) HELD WITH COMPLEX OTHER THE TRUSTS, TERM OF OVERSEEN DIRECTORSHIPS NAME, ADDRESS OFFICE AND LENGTH OF PRINCIPAL OCCUPATION(S) BY TRUSTEE HELD BY TRUSTEE AND AGE OF TRUSTEE TIME SERVED DURING PAST 5 YEARS OR NOMINEES OR NOMINEES ------------------------------------------------------------------------------------------------------------------------- of the Audit and Governance and Nominating Committees from 1995 to present Rydex Dynamic Funds: Trustee and Member of the Audit, Governance, and Nominating Committees from 1999 to present -------------------------------------------------------------------------------------------------------------------------
* Mr. Cacciapaglia is an "interested" person of the Trust, as that term is defined in the 1940 Act by virtue of his affiliation with the Investment Adviser's parent company. ** Mr. Goldman is an "interested" person of the Trust, as that term is defined in the 1940 Act by virtue of his affiliation with the Funds' Investment Adviser. The Chairman of the Board, John O. Demaret, is an Independent Trustee. The Trusts have determined its leadership structure is appropriate given the specific characteristics and circumstances of the Trusts. The Trusts made this determination in consideration of, among other things, the fact that the Chairman of the Board is an Independent Trustee; the fact that only two of the proposed nominees are "interested persons" of the Trusts; the fact that the chairperson of each Committee of the Board is an Independent Trustee; the amount of assets under management in the Trusts; and the number of Funds (and classes of shares) overseen by the Board. The Board also believes that its leadership structure facilitates the orderly and efficient flow of information to the Independent Trustees from Fund management. BOARD'S CONSIDERATION OF EACH NOMINEE'S QUALIFICATIONS, EXPERIENCE, ATTRIBUTES OR SKILLS The Board has concluded that each of the nominees should serve on the Board because of his ability to review and understand information about the Trusts and the Funds provided to him by management; to identify and request other information he may deem relevant to the performance of his duties; to question management and other service providers regarding material factors bearing on the management and administration of the Funds; and to exercise his business judgment in a manner that serves the best interests of the Funds' shareholders. The Board has concluded that each of the nominees should serve as a Trustee based on his experience, qualifications, attributes and skills as described below. The Board has concluded that Donald C. Cacciapaglia should serve as Trustee because of his prior experience working in the investment banking and financial services industries. He is President and Chief Adminstrative Officer of Guggenheim's investment management business. Most recently he was chairman and CEO of Channel Capital Group Inc. and its subsidiary 21 broker-dealer, Channel Capital Group LLC, an affiliate of Guggenheim Capital, from 2002 through 2010. From 1996 until 2002 when he joined Channel Capital Group, Mr. Cacciapaglia held the position of Managing Director and Chief Operating Officer of the Investment Banking Group at PaineWebber. Additionally, in 1998, he started PaineWebber's Private Equity Group and assumed responsibility for the coverage of leveraged buyout firms and the Investment Bank's Business Development Group. Before that, Mr. Cacciapaglia was Chief Operating Officer of the Short and Intermediate Trading Group at CS First Boston (1995-1996). From his experience as President and COO of Guggenheim, and from his prior work experience, Mr. Cacciapaglia has extensive knowledge of the financial services industry and mutual fund business. The Board has concluded that Richard M. Goldman should serve as Trustee because of the experience he has gained as a Trustee of each Trust since 2009 and his experience working in the financial services and mutual fund industries. Mr. Goldman has gained valuable knowledge and experience from holding multiple roles with Security Global Investors, LLC and Security Benefit Corporation. Mr. Goldman also serves as a director for First Security Benefit Life and Annuity Insurance Company of New York and previously served as a director of Security Distributors, Inc. Prior to working for Security Benefit, Mr. Goldman was the President and CEO of ForstmannLeff Associates, an investment management firm. From his experience as CEO of the Investment Adviser, as a Trustee, and from his prior work experience, Mr. Goldman has extensive knowledge of the financial services industry and mutual fund business. The Board has concluded that Corey A. Colehour should serve as Trustee because of the experience he has gained as a Trustee of each Trust and his prior experience working in the financial services industry. Mr. Colehour has served as a Trustee of Rydex Series Funds since 1993, Rydex Variable Trust since 1998, Rydex Dynamic Funds since 1999, and Rydex ETF Trust since 2003. Mr. Colehour also has served as a member of the Audit, Nominating and Governance Committees of each Trust. In addition to his experience as a Trustee for the Funds and his extensive institutional knowledge of the fund complex, Mr. Colehour acquired valuable knowledge about the operations of a registered investment adviser in his role as President and Senior Vice-President of Schield Management Company, an SEC registered investment adviser. Mr. Colehour's significant tenure as a Trustee and his extensive knowledge of the financial services industry qualify Mr. Colehour to serve as Trustee. The Board has concluded that J. Kenneth Dalton should serve as Trustee because of his role as a Trustee of each Trust and his extensive knowledge of the banking and financial services industry. Mr. Dalton has served as a Trustee of Rydex Series Funds since 1995, Rydex Variable Trust since 1998, Rydex Dynamic Funds since 1999, and Rydex ETF Trust since 2003. Mr. Dalton also has served as a member and Chairman of the Audit Committee of Rydex Series Funds since 1997, Rydex Variable Trust since 1998, Rydex Dynamic Funds since 2006, and Rydex ETF Trust since 2003; and as a member of the Nominating, Governance and Risk Oversight Committees of each Trust since 2005 and as a member of the Risk Oversight Committee since 2010. The expertise Mr. Dalton developed during his more than thirty years in the mortgage and banking industries, including positions as President of CRAM Mortgage Group, Inc. and as the founder of the Dalton Group, a mortgage banking consulting firm, serves as a valuable resource for the Board when evaluating certain of the Funds' investments and the 22 conditions of the banking and mortgage industries in general, and complements the other Trustees' areas of expertise. Mr. Dalton's service as a trustee for another mutual fund company also provides invaluable experience and perspective to the Board and has contributed to Mr. Dalton's knowledge of the mutual fund business. The Board has concluded that John O. Demaret should serve as Trustee and Chairman of the Board because of the experience he has gained as a Trustee of each Trust and his experience as Chairman of the Board since 2006. Mr. Demaret has served as a Trustee of Rydex Series Funds since 1997, Rydex Variable Trust since 1998, Rydex Dynamic Funds since 1999, and Rydex ETF Trust since 2003. Mr. Demaret also has served as a member of the Audit and Risk Oversight Committees of each Trust. As Chairman of the Board, Mr. Demaret has experience working with all of the Trustees, Officers and management to effectively lead and communicate with the Board. In addition to his experience as a Trustee for the Rydex Funds, Mr. Demaret also was Founder and CEO of Health Costs Controls America and served as General Counsel of the Chicago Transit Authority, and as a senior partner in a private legal practice. Based on his prior work experience and his experience serving as a Trustee and Chairman of the Board, Mr. Demaret has extensive knowledge of the mutual fund business and financial services industry. The Board has concluded that Werner E. Keller, CFA should serve as Trustee because of the experience he has gained as a Trustee of each Trust since 2005 and his prior experience working in the financial services industry. Mr. Keller also served as a trustee of the Rydex Capital Partners Sphinx Fund from 2003 to 2007. Mr. Keller has served as a member of the Audit, Governance and Nominating Committees of each Trust. In addition, Mr. Keller has served as the Chairman of the Risk Oversight Committee of each Trust since 2010. Mr. Keller serves as the Financial Expert of the Audit Committee. In addition to his experience as a Trustee for the Funds, Mr. Keller acquired understanding about the operations of a registered investment adviser during his tenure as Founder and President of Centurion Capital Management, an SEC-registered investor adviser. He also held the position of Director of Research for three NYSE member firms and taught courses in portfolio management and investment analysis at UCLA Extension. In addition, he has published several academic articles on quantitative investment topics. Mr. Keller's service as a Trustee for five years, specialized prior work experience, and knowledge of the financial services industry and mutual fund business qualify Mr. Keller to serve as a Trustee of the Funds. The Board has concluded that Thomas F. Lydon should serve as Trustee because of the experience he has gained as a Trustee of each Trust since 2005 and his prior work experience in the financial services industry. Mr. Lydon also served as a trustee of the Rydex Capital Partners Sphinx Fund from 2003 to 2007. Mr. Lydon has served as a member of the Audit, Governance and Nominating Committees of each Trust. In addition to his experience as a Trustee for the Funds, Mr. Lydon is currently President of Global Trends Investments, an SEC registered investment adviser, where he has served since 1996. Mr. Lydon has also served on the board of U.S. Global Investors, Inc. (GROW), the investment adviser and transfer agent to thirteen open-end investment companies, since April 1995, and is the editor of ETF Trends, a website specializing in daily news and commentary about the ETF industry. He has also authored two books about ETFs. Based on his experience as a Trustee for five years, his experience serving on 23 another board, and his related work experience, Mr. Lydon has extensive knowledge of the mutual fund business and the financial services industry. The Board has concluded that Patrick T. McCarville should serve as Trustee because of the experience and institutional knowledge he has gained in his role as Trustee of each Trust. Mr. McCarville has served as a Trustee of Rydex Series Funds since 1997, Rydex Variable Trust since 1998, Rydex Dynamic Funds since 1999, and Rydex ETF Trust since 2003. Mr. McCarville also has served as a member of the Audit, Governance and Nominating Committees of each Trust. Mr. McCarville contributes a wealth of business and management experience to the Board having founded Par Industries, Inc., a well-established equipment leasing business, and serving as its Chief Executive Officer for more than thirty years. Mr. McCarville continues to be active in the manufacturing industry and serves as a Director of Tomco Equipment Co., a manufacturer of cylinders for CO2 distribution. Based on his extensive business experience and experience serving as a Trustee, Mr. McCarville has extensive knowledge of the financial services industry. The Board has concluded that Roger Somers should serve as Trustee because of the experience and institutional knowledge he has gained in his role as Trustee of each Trust. Mr. Somers has served as a Trustee of Rydex Series Funds since 1993, Rydex Variable Trust since 1998, Rydex Dynamic Funds since 1999, and Rydex ETF Trust since 2003. Mr. Somers also has served as a member of the Audit, Governance and Nominating Committees of each Trust. Mr. Somers has extensive business experience as the founder and president of a transportation company. Due to his business experience and experience serving as a Trustee, Mr. Somers is very knowledgeable about the financial services industry. If the nominees are elected, Mr. Demaret would remain the Chairman of the Board. PRINCIPAL OFFICERS OF THE FUNDS Officers of the Funds are appointed by the Board and serve at the pleasure of the Board. The following table shows information about the principal officers, including their ages, their positions with the Trust and their principal occupations during the past five years. The mailing address of each officer is 805 King Farm Boulevard, Suite 600, Rockville, Maryland 20850. Each officer will hold office until his or her successor has been duly elected or appointed or until his or her earlier death, resignation or removal.
----------------------------------------------------------------------------------------------------------------------- NUMBER OF PORTFOLIOS POSITION(S) HELD WITH IN FUND NAME, ADDRESS THE TRUST, TERM OF COMPLEX AND AGE OF OFFICE AND LENGTH OF PRINCIPAL OCCUPATION(S) OVERSEEN TRUSTEE/OFFICER TIME SERVED DURING PAST 5 YEARS BY OFFICER ----------------------------------------------------------------------------------------------------------------------- Richard M. Goldman President from 2009 to Current: Senior Vice President, Security Benefit 212 (50) present Corporation; CEO, Security Benefit Asset Management Holdings, LLC; CEO, President & Manager Representative, Security Investors, LLC; CEO & Manager, Rydex Holdings, LLC; CEO, President, & Manager, Rydex Distributors, LLC; Manager, Rydex Fund Services, LLC; and President & Trustee, Rydex Series Funds, Rydex -----------------------------------------------------------------------------------------------------------------------
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----------------------------------------------------------------------------------------------------------------------- NUMBER OF PORTFOLIOS POSITION(S) HELD WITH IN FUND NAME, ADDRESS THE TRUST, TERM OF COMPLEX AND AGE OF OFFICE AND LENGTH OF PRINCIPAL OCCUPATION(S) OVERSEEN TRUSTEE/OFFICER TIME SERVED DURING PAST 5 YEARS BY OFFICER ----------------------------------------------------------------------------------------------------------------------- ETF Trust, Rydex Dynamic Funds and Rydex Variable Trust Previous: Director, First Security Benefit Life Insurance Company (2007-2010); President & Director, Security Global Investors (2010-2011); CEO & Director, Rydex Advisors, LLC & Rydex Advisor II, LLC (2010); Director, Security Distributors, Inc. (2007-2009); and Managing Member, RM Goldman Partners, LLC (2006-2007). ----------------------------------------------------------------------------------------------------------------------- Michael P. Byrum Rydex Series Funds: Current: President, Security Benefit Asset Management 179 (41) Vice President from Holdings, LLC; Senior Vice President, Security Investors, 1999 to present; LLC; President & Chief Investment Officer, Rydex Trustee from 2005 to Holdings, LLC; Director & Chairman of the Board, 2009 Advisor Research Center, Inc.; and Manager, Rydex Specialized Products, LLC. Rydex Dynamic Funds: Vice President Previous: Rydex Distributors, LLC (f/k/a Rydex from 2005 to present; Distributors, Inc.), Vice President (2009); Rydex Fund Trustee from 2005 to Services, LLC, Director (2009-2010), Secretary (2002- 2009 2010), Executive Vice President (2002-2006); Rydex Advisors, LLC (f/k/a PADCO Advisors, Inc.), Director (2008-2010), Chief Investment Officer (2006-2010), President (2004-2010); Secretary (2002-2010); Rydex Advisors II, LLC (f/k/a PADCO Advisors II, Inc.), Director (2008-2010), Chief Investment Officer (2006- 2010), President (2004-2010), Secretary (2002-2010); Rydex Capital Partners, LLC, (President & Secretary 2003-2007); Rydex Capital Partners II, LLC, (2003-2007); Rydex Holdings, LLC (f/k/a Rydex Holdings, Inc.), Secretary 2005-2008), Executive Vice President (2005- 2006); Advisor Research Center, Inc., Secretary (2006- 2009), Executive Vice President (2006); and Rydex Specialized Products, LLC, Secretary (2005-2008). ----------------------------------------------------------------------------------------------------------------------- Nick Bonos (47) Rydex Series Funds: Current: Senior Vice President, Security Investors, LLC; 179 Vice President and Chief Executive Officer & Manager, Rydex Specialized Treasurer from 2003 Products, LLC; Chief Executive Officer & President, to present. Rydex Fund Services, LLC; Vice President, Rydex Holdings, LLC; Treasurer, SBL Fund; Security Equity Rydex Dynamic Fund; Security Income Fund; Security Large Cap Value Funds: Vice President Fund & Security Mid Cap Growth Fund; and Vice and Treasurer from President, Security Benefit Asset Management Holdings, 2003 to present LLC. Previous: Security Global Investors, LLC, Senior Vice President (2010-2011); Rydex Advisors, LLC (f/k/a PADCO Advisors, Inc.) Senior Vice President (2006- 2011); Rydex Fund Services, LLC (f/k/a Rydex Fund Services, Inc.), Director (2009) & Senior Vice President -----------------------------------------------------------------------------------------------------------------------
25
----------------------------------------------------------------------------------------------------------------------- NUMBER OF PORTFOLIOS POSITION(S) HELD WITH IN FUND NAME, ADDRESS THE TRUST, TERM OF COMPLEX AND AGE OF OFFICE AND LENGTH OF PRINCIPAL OCCUPATION(S) OVERSEEN TRUSTEE/OFFICER TIME SERVED DURING PAST 5 YEARS BY OFFICER ----------------------------------------------------------------------------------------------------------------------- (2003-2006); and Rydex Specialized Products, LLC, Chief Financial Officer (2005-2009). ----------------------------------------------------------------------------------------------------------------------- Joanna M. Haigney Rydex Series Funds: Current: Chief Compliance Officer & Secretary, SBL 179 (44) Chief Compliance Fund; Security Equity Fund; Security Income Fund; Officer from 2004 to Security Large Cap Value Fund & Security Mid Cap present; and Secretary Growth Fund; Vice President, Rydex Holdings, LLC; Vice from 2000 to present. President, Security Benefit Asset Management Holdings, LLC; and Senior Vice President & Chief Compliance Rydex Dynamic Officer, Security Investors, LLC Funds: Chief Compliance Officer Previous: Security Global Investors, LLC, Senior Vice from 2004 to present; President (2010-2011); Rydex Advisors, LLC (f/k/a and Secretary from PADCO Advisors, Inc.) and Rydex Advisors II, LLC (f/k/a 2000 to present PADCO Advisors II, Inc.), Chief Compliance Officer and Senior Vice President (2010-2011); Rydex Capital Partners I, LLC & Rydex Capital Partners II, LLC, Chief Compliance Officer (2006-2007); and Rydex Fund Services, LLC (f/k/a Rydex Fund Services, Inc.), Vice President (2001-2006). ----------------------------------------------------------------------------------------------------------------------- Joseph Arruda (44) Rydex Series Funds: Current: Assistant Treasurer, SBL Fund; Security Equity 179 Assistant Treasurer Fund; Security Income Fund; Security Large Cap Value from 2006 to present. Fund & Security Mid Cap Growth Fund; Vice President, Security Investors, LLC; and Chief Financial Officer & Rydex Dynamic Manager, Rydex Specialized Products, LLC. Funds: Assistant Treasurer from 2006 Previous: Security Global Investors, LLC, Vice President to present (2010-2011); and Rydex Advisors, LLC (f/k/a PADCO Advisors, Inc.) & Rydex Advisors II, LLC (f/ka/ PADCO Advisors II, Inc.), Vice President (2004-2011). ----------------------------------------------------------------------------------------------------------------------- Keith Fletcher (53) Rydex Series Funds: Current: Senior Vice President, Security Investors, LLC; 179 Vice President from Vice President, Rydex Holdings, LLC; Vice President, 2009 to present Rydex Specialized Products, LLC; Vice President, Rydex Distributors, LLC; Vice President, Rydex Fund Services, Rydex Dynamic LLC; Vice President and Director, Advisor Research Funds: Vice President Center, Inc.; and Vice President, SBL Fund; Security from 2009 to present Equity Fund; Security Income Fund; Security Large Cap Value Fund & Security Mid Cap Growth Fund. Previous: Security Global Investors, LLC, Vice President (2010-2011); Rydex Advisors, LLC (f/k/a/ PADCO Advisors, Inc.) & Rydex Advisors II, LLC (f/k/a PADCO Advisors II, Inc.), Vice President (2009-2011); Lyster Watson and Company, Managing Director (2007-2008); and Fletcher Financial Group, Inc., Chief Executive Officer (2004-2007). ----------------------------------------------------------------------------------------------------------------------- Amy Lee (50) Rydex Series Funds: Current: Senior Vice President & Secretary, Security 179 Vice President and Investors, LLC; Secretary & Chief Compliance Officer, -----------------------------------------------------------------------------------------------------------------------
26
----------------------------------------------------------------------------------------------------------------------- NUMBER OF PORTFOLIOS POSITION(S) HELD WITH IN FUND NAME, ADDRESS THE TRUST, TERM OF COMPLEX AND AGE OF OFFICE AND LENGTH OF PRINCIPAL OCCUPATION(S) OVERSEEN TRUSTEE/OFFICER TIME SERVED DURING PAST 5 YEARS BY OFFICER ----------------------------------------------------------------------------------------------------------------------- Assistant Secretary Security Distributors, Inc.; Vice President, Associate from 2009 to present General Counsel & Assistant Secretary, Security Benefit Rydex Dynamic Life Insurance Company and Security Benefit Corporation; Funds: Vice Present Associate General Counsel, First Security Benefit Life and Assistant Insurance and Annuity of New York; Vice President & Secretary from 2009 to Secretary, SBL Fund; Security Equity Fund; Security present Income Fund; Security Large Cap Value Fund & Security Mid Cap Growth Fund; Vice President & Secretary, Rydex Holdings, LLC Secretary, Advisor Research Center, Inc., Rydex Specialized Products, LLC, Rydex Distributors, LLC and Rydex Fund Services, LLC; and Assistant Secretary, Security Benefit Clinic and Hospital Previous: Security Global Investors, LLC, Senior Vice President & Secretary (2007-2011); Rydex Advisors, LLC (f/k/a/ PADCO Advisors, Inc.) & Rydex Advisors II, LLC (f/k/a PADCO Advisors II, Inc.), Senior Vice President & Secretary (2010-2011); and Brecek & Young Advisors, Inc., Director (2004-2008). -----------------------------------------------------------------------------------------------------------------------
NOMINEE OWNERSHIP OF PORTFOLIO SHARES The following table shows the dollar amount range of each Nominee's beneficial ownership of shares of the Funds and all Funds that the nominee would oversee in the family of funds as of the end of the most recently completed calendar year. Dollar amount ranges disclosed are established by the SEC.
----------------------------------------------------------------------------------------------------------------------------- AGGREGATE DOLLAR RANGE OF SHARES IN ALL DOLLAR RANGE OF FUNDS OVERSEEN BY NAME FUND NAME FUND SHARES (1) NOMINEE (1,2) ----------------------------------------------------------------------------------------------------------------------------- INTERESTED NOMINEES ----------------------------------------------------------------------------------------------------------------------------- Donald C. Cacciapaglia None None None ----------------------------------------------------------------------------------------------------------------------------- Richard Goldman None None None ----------------------------------------------------------------------------------------------------------------------------- INDEPENDENT NOMINEES ----------------------------------------------------------------------------------------------------------------------------- Corey A. Colehour Rydex Series Funds--Managed Futures Strategy $1 - $10,000 $50,001 - $100,000 Fund ------------------------------------------------------------------------ Rydex Series Funds--Long/Short Commodities $10,001 - $50,000 Strategy Fund ------------------------------------------------------------------------ Rydex Series Funds--U.S. Long Short Momentum $1 - $10,000 Fund ------------------------------------------------------------------------ Rydex Series Funds--All-Asset Moderate Strategy $10,001 - 50,000 Fund ----------------------------------------------------------------------------------------------------------------------------- J. Kenneth Dalton Rydex Series Funds--U.S. Government Money $10,001 - $50,000 $10,001 - $50,000 Market Fund ----------------------------------------------------------------------------------------------------------------------------- John O. Demaret Rydex Series Funds--Energy Fund $10,001 - $50,000 Over $100,000 -----------------------------------------------------------------------------------------------------------------------------
27
----------------------------------------------------------------------------------------------------------------------------- AGGREGATE DOLLAR RANGE OF SHARES IN ALL DOLLAR RANGE OF FUNDS OVERSEEN BY NAME FUND NAME FUND SHARES (1) NOMINEE (1,2) ----------------------------------------------------------------------------------------------------------------------------- Rydex Series Funds--Financial Services Fund $50,001 - $100,000 ------------------------------------------------------------------------ Rydex Series Funds--Utilities Fund $10,001 - $50,000 ----------------------------------------------------------------------------------------------------------------------------- Thomas F. Lydon, Jr. None None None ----------------------------------------------------------------------------------------------------------------------------- Werner E. Keller Rydex Dynamic Funds--NASDAQ(R) 2x Strategy $1 - $10,000 Over $100,000 Fund ------------------------------------------------------------------------ Rydex Dynamic Funds--Russell 2000(R) 2x $1 - $10,000 Strategy Fund ------------------------------------------------------------------------ Rydex Series Funds--U.S. Government Money Over $100,000 Market Fund ----------------------------------------------------------------------------------------------------------------------------- Patrick T. McCarville Rydex Series Funds--Nova Fund $10,001 - $50,000 $50,001 - $100,000 ----------------------------------------------------------------------------------------------------------------------------- Rydex Series Funds--U.S. Long Short Momentum $50,001 - $100,000 Fund ------------------------------------------------------------------------ Roger J. Somers Rydex Dynamic Funds--NASDAQ(R) 2x Strategy $50,001 - $100,000 Over $100,000 Fund ------------------------------------------------------------------------ Rydex Dynamic Funds--NASDAQ-100(R) 2x Strategy Fund $50,001 - $100,000 ------------------------------------------------------------------------ Rydex Series Funds--Commodities Strategy Fund $10,001 - $50,000 ------------------------------------------------------------------------ Rydex Series Funds--Russell 2000(R) 1.5x Strategy Fund $50,001 - $100,000 ------------------------------------------------------------------------ Rydex Series Funds--Mid-Cap 1.5x Strategy Fund Over $100,000 ------------------------------------------------------------------------ Rydex Series Funds--Nova Fund $50,001 - $100,000 ------------------------------------------------------------------------ Rydex Series Funds--Energy Fund $50,001 - $100,000 ------------------------------------------------------------------------ Rydex Series Funds--Financial Services Fund $50,001 - $100,000 ------------------------------------------------------------------------ Rydex Series Funds--Basic Materials Fund $50,001 - $100,000 ------------------------------------------------------------------------ Rydex Series Funds--Energy Services Fund Over $100,000 ------------------------------------------------------------------------ Rydex Series Funds--S&P MidCap 400 Pure Growth Fund $10,001 - $50,000 ------------------------------------------------------------------------ Rydex Series Funds--U.S. Long Short Momentum Fund $10,001 - $50,000 -----------------------------------------------------------------------------------------------------------------------------
1 Information provided is as of December 31, 2010. 2 Includes the Trust, Rydex Series Funds, Rydex Variable Trust, Rydex Dynamic Funds, Security Equity Fund, Security Large Cap Value Fund, Security Mid Cap Growth Fund, Security Income Fund and SBL Fund, as applicable. None of the nominees who would be Independent Trustees or their immediate family members had any interest in the Investment Adviser or Distributor, or any person controlling, controlled by or under common control with such persons. For this purpose, "immediate family member" includes the Nominee's spouse, children residing the in the Nominee's household and dependents of the Nominee. As of October 3, 2011, the Trustees and officers as a group owned less than 1% of the outstanding shares of each Fund, except as listed in Appendix L. 28 BOARD COMPENSATION The following table sets forth compensation paid by Rydex Dynamic Funds for the fiscal year ended December 31, 2010.
--------------------------------------------------------------------------------------------------------- PENSION OR RETIREMENT ESTIMATED TOTAL AGGREGATE BENEFITS ACCRUED ANNUAL COMPENSATION COMPENSATION AS PART OF TRUST'S BENEFITS UPON FROM FUND NAME OF TRUSTEE FROM FUNDS EXPENSES RETIREMENT COMPLEX * --------------------------------------------------------------------------------------------------------- INTERESTED TRUSTEE --------------------------------------------------------------------------------------------------------- Richard Goldman** $0 $0 $0 $0 --------------------------------------------------------------------------------------------------------- INDEPENDENT TRUSTEES --------------------------------------------------------------------------------------------------------- Corey A. Colehour $9,900 $0 $0 $162,000 --------------------------------------------------------------------------------------------------------- J. Kenneth Dalton $10,600 $0 $0 $174,000 --------------------------------------------------------------------------------------------------------- John O. Demaret $12,300 $0 $0 $202,000 --------------------------------------------------------------------------------------------------------- Werner E. Keller $9,900 $0 $0 $163,500 --------------------------------------------------------------------------------------------------------- Thomas F. Lydon $9,800 $0 $0 $161,000 --------------------------------------------------------------------------------------------------------- Patrick T. McCarville $10,200 $0 $0 $168,000 --------------------------------------------------------------------------------------------------------- Roger J. Somers $9,900 $0 $0 $162,000 ---------------------------------------------------------------------------------------------------------
* Represents total compensation for service as Trustee of Rydex ETF Trust, Rydex Series Funds, Rydex Variable Trust and Rydex Dynamic Funds. ** Mr. Goldman is an Interested Trustee, as that term is defined in the 1940 Act by virtue of his affiliation with the Advisor. He does not receive compensation from the Funds. With respect to Long/Short Commodities Strategy Fund, Managed Futures Strategy Fund, Multi-Hedge Strategies Fund and Commodities Strategy Fund, the following table sets forth compensation paid by Rydex Series Funds for the fiscal year ended December 31, 2010.
--------------------------------------------------------------------------------------------------------- PENSION OR RETIREMENT ESTIMATED TOTAL AGGREGATE BENEFITS ACCRUED ANNUAL COMPENSATION COMPENSATION AS PART OF TRUST'S BENEFITS UPON FROM FUND NAME OF TRUSTEE FROM FUNDS EXPENSES RETIREMENT COMPLEX * --------------------------------------------------------------------------------------------------------- INTERESTED TRUSTEES --------------------------------------------------------------------------------------------------------- Richard Goldman** $0 $0 $0 $0 --------------------------------------------------------------------------------------------------------- INDEPENDENT TRUSTEES --------------------------------------------------------------------------------------------------------- Corey A. Colehour $6,153 $0 $0 $162,000 --------------------------------------------------------------------------------------------------------- J. Kenneth Dalton $6,633 $0 $0 $174,000 --------------------------------------------------------------------------------------------------------- John O. Demaret $7,680 $0 $0 $202,000 --------------------------------------------------------------------------------------------------------- Werner E. Keller $6,220 $0 $0 $163,500 --------------------------------------------------------------------------------------------------------- Thomas F. Lydon $6,113 $0 $0 $161,000 --------------------------------------------------------------------------------------------------------- Patrick T. McCarville $6,407 $0 $0 $168,000 --------------------------------------------------------------------------------------------------------- Roger J. Somers $6,153 $0 $0 $162,000 ---------------------------------------------------------------------------------------------------------
* Represents total compensation for service as Trustee of Rydex Series Funds, Rydex ETF Trust, Rydex Dynamic Funds, and Rydex Variable Trust. ** Mr. Goldman is an Interested Trustee, as that term is defined in the 1940 Act by virtue of his affiliation with the Advisor. He does not receive compensation from the Funds. 29 With respect to all other series of Rydex Series Funds, the following table sets forth compensation paid by Rydex Series Funds for the fiscal year ended March 31, 2011.
--------------------------------------------------------------------------------------------------------- PENSION OR RETIREMENT ESTIMATED TOTAL AGGREGATE BENEFITS ACCRUED ANNUAL COMPENSATION COMPENSATION AS PART OF TRUST'S BENEFITS UPON FROM FUND NAME OF TRUSTEE FROM FUNDS EXPENSES RETIREMENT COMPLEX * --------------------------------------------------------------------------------------------------------- INTERESTED TRUSTEES --------------------------------------------------------------------------------------------------------- Richard Goldman** $0 $0 $0 $0 --------------------------------------------------------------------------------------------------------- INDEPENDENT TRUSTEES --------------------------------------------------------------------------------------------------------- Corey A. Colehour $76,438 $0 $0 $147,000 --------------------------------------------------------------------------------------------------------- J. Kenneth Dalton $82,862 $159,000 --------------------------------------------------------------------------------------------------------- John O. Demaret $97,200 $0 $0 $187,000 --------------------------------------------------------------------------------------------------------- Werner E. Keller $78,114 $0 $0 $150,000 --------------------------------------------------------------------------------------------------------- Thomas F. Lydon $76,438 $0 $0 $147,000 --------------------------------------------------------------------------------------------------------- Patrick T. McCarville $79,790 $0 $0 $153,000 --------------------------------------------------------------------------------------------------------- Roger J. Somers $76,438 $0 $0 $147,000 ---------------------------------------------------------------------------------------------------------
* Represents total compensation for service as Trustee of Rydex Series Funds, Rydex ETF Trust, Rydex Dynamic Funds, and Rydex Variable Trust. ** Mr. Goldman is an Interested Trustee, as that term is defined in the 1940 Act by virtue of his affiliation with the Advisor. He does not receive compensation from the Funds. COMMITTEES AND MEETINGS OF THE BOARD The Board has overall responsibility to manage and control the business affairs of the Trust, including the complete and exclusive authority to oversee and to establish policies regarding the management, conduct and operation of the Trusts' business. The Board held 4 regular meetings, and 2 special meetings, during the Trusts' most recent fiscal year. Each Trustee then in office attended at least 75% of the aggregate of the total number of meetings of the Board and the total number of meetings held by all committees of the Board on which the Trustee served. The Trusts currently do not have a policy with respect to Trustees' attendance at shareholder meetings. Shareholders wishing to communicate with the Board or individual directors should send such correspondence to the Board at the Trust's offices. Shareholder communications will be sent directly to the applicable Board member(s). The Board has established the following standing committees: AUDIT COMMITTEE. The Board has a standing Audit Committee that is composed of each of the non-interested trustees of the Trusts. The Audit Committee operates pursuant to a written charter approved by the Board. The principal responsibilities of the Audit Committee include: recommending which firm to engage as the Trusts' independent registered public accounting firm and whether to terminate this relationship; reviewing the independent registered public accounting firm's compensation, the proposed scope and terms of its engagement, and the firm's independence; serving as a channel of communication between the independent registered public accounting firm and the Board; reviewing the results of each external audit, including any qualifications in the independent registered public accounting firm's opinion, any related 30 management letter, management's responses to recommendations made by the independent registered public accounting firm in connection with the audit, if any, reports submitted to the Committee by the Trusts' service providers that are material to the Trusts as a whole, and management's responses to any such reports; reviewing the Trusts' audited financial statements and considering any significant disputes between the Trusts' management and the independent registered public accounting firm that arose in connection with the preparation of those financial statements; considering, in consultation with the independent registered public accounting firm and the Trusts' senior internal accounting executive, the independent registered public accounting firm's report on the adequacy of the Trusts' internal financial controls; reviewing, in consultation with the Trusts' independent registered public accounting firm, major changes regarding auditing and accounting principles and practices to be followed when auditing the Trusts' financial statements; and other audit related matters. Messrs. Colehour, Dalton, Demaret, Keller, Lydon, McCarville and Somers serve as members of the Audit Committee. The Audit Committee met four times in the most recently completed fiscal year. GOVERNANCE COMMITTEE. The Board has a standing Governance Committee that operates under a written charter approved by the Board. The role of the Governance Committee is to assist the Board in assuring the effective governance of the Trusts, including: (i) monitoring and making recommendations regarding committees of the Board, including the responsibilities of those committees as reflected in written committee charters, and committee assignments; (ii) making recommendations regarding the term limits and retirement policies applicable to the Independent Trustees of the Trusts; (iii) considering and making recommendations to the Board concerning the compensation of the Independent Trustees, the Independent Chairman of the Board, including any special compensation for serving as chairman of a member of a committee of the Board, and expense reimbursement policies applicable to the Independent Trustees; (iv) periodically reviewing and making recommendations regarding the size and composition of the Board, including recommendations to the Board concerning the need to increase or decrease the size of the Board or to add individuals with special knowledge, skill sets or backgrounds to the Board; (v) overseeing the orientation and education processes for new Independent Trustees and continuing education of incumbent Independent Trustees; (vi) monitoring the independence and performance of legal counsel to the Independent Trustees and making recommendations to the Independent Trustees regarding the selection of independent counsel to the Independent Trustees; (vii) overseeing the process regarding the Board's periodic self-assessments and making recommendations to the Board concerning that process; and (viii) making recommendations to the Board concerning all other matters pertaining to the functioning of the Board and committees of the Board and pertaining generally to the governance of the Trusts. Messrs. Keller, Lydon, and McCarville serve as members of the Governance Committee. For the most recently completed fiscal year, the Governance Committee met once. NOMINATING COMMITTEE. The Board has a separate standing Nominating Committee that operates under a written charter approved by the Board, attached hereto as Appendix M. The role of the Nominating Committee is to identify, evaluate and nominate individuals to serve as trustees of the Trusts including, shareholder recommendations for nominations to fill vacancies on the Board. The Nominating Committee does not currently have specific procedures in place to consider nominees recommended by shareholders, but would consider such nominees if submitted in accordance with Rule 14a-8 of the Securities Exchange Act of 1934 in conjunction 31 with a shareholder meeting to consider the election of Board members. Messrs. Keller, Lydon, and McCarville serve as members of the Nominating Committee. For the most recently completed fiscal year, the Nominating Committee met once. Additional information regarding the Nominating Committee may be found in the charter of the Nominating Committee. RISK OVERSIGHT COMMITTEE. The Board has a separate standing Risk Oversight Committee that operates under a written charter approved by the Board. The role of the Risk Oversight Committee is to assist the Board in fulfilling its responsibility to oversee risk management activities applicable to the Funds, including systems failure, disaster recovery, business continuity and other operational risks; counterparty credit, liquidity, valuation, leverage and other market and investment risks; and legal and compliance risks. Messrs. Demaret, Keller, and Dalton, serve as members of the Risk Oversight Committee. For the most recently completed fiscal year, the Risk Oversight Committee met three times. INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM The firm of Ernst & Young LLP ("Ernst & Young") has been selected as independent auditors of the Trusts for the current fiscal year. Ernst & Young has confirmed to the Audit Committee that they are independent auditors with respect to the Trusts. Representatives of Ernst & Young are not expected to be present at the Meeting, but will have the opportunity to make a statement if they wish, and will be available should any matter arise requiring their presence. Certain information concerning the fees and services provided by Ernst & Young to the Trusts and to the Investment Adviser and its affiliates for the two most recently completed fiscal years of the Trusts is provided below. The Audit Committee is responsible for the engagement, compensation, and oversight of Ernst & Young. The Audit Committee is required to pre-approve all audit and permitted non-audit services performed by Ernst & Young for the Funds in accordance with the Audit Committee Charter and the 1940 Act and makes a determination with respect to Ernst & Young's independence each year. For the two most recent fiscal years for each if the Funds, none of the services provided to the Trusts or described under "Audit-Related Fees," "Tax Fees," and "All Other Fees" were approved by the Audit Committee pursuant to the de minimis exception to the pre-approval requirements. The following table sets forth the aggregate fees billed by Ernst & Young for professional services rendered to the Trusts during the two most recent fiscal years.
---------------------------------------------------------------------------------------- RYDEX DYNAMIC RYDEX SERIES RYDEX SERIES FUNDS FUNDS-- FUNDS--ALL OTHER LONG/SHORT FUNDS COMMODITIES STRATEGY, MANAGED FUTURES STRATEGY, MULTI-HEDGE STRATEGIES AND COMMODITIES STRATEGY FUNDS ---------------------------------------------------------------------------------------- AUDIT FEES 12/31/10: $146,000 12/31/10: $71,123 3/31/11: $960,156 12/31/09: $150,000 12/31/09: $80,155 3/31/11: $935,845 ----------------------------------------------------------------------------------------
32 ---------------------------------------------------------------------------------------- AUDIT-RELATED FEES 12/31/10: $2,961 12/31/10: $1,480 3/31/11: $20,899 12/31/09: $5,000 12/31/09: $2,500 3/31/11: $31,875 ---------------------------------------------------------------------------------------- TAX FEES 12/31/10: $0 12/31/10: $0 3/31/11: $0 12/31/09: $0 12/31/09: $0 3/31/11: $0 ---------------------------------------------------------------------------------------- ALL OTHER FEES 12/31/10: $0 12/31/10: $0 3/31/11: $0 12/31/09: $0 12/31/09: $0 3/31/11: $0 ---------------------------------------------------------------------------------------- AGGREGATE NON- 12/31/10: $0 12/31/10: $3,241 3/31/11: $43,759 Audit Fees 12/31/09: $0 12/31/09: $5,172 3/31/11: $69,828 ----------------------------------------------------------------------------------------

AUDIT FEES. The aggregate fees billed by Ernst & Young for audit of the annual financial statements in connection with statutory and regulatory filings. AUDIT-RELATED FEES. The aggregate fees billed by Ernst & Young for assurance and related services reasonably related to the performance of the annual audit or review of the Trust's financial statements (and not reported above). TAX FEES. The aggregate tax fees billed by Ernst & Young for professional services rendered for tax compliance, tax advice, and tax planning, including preparation of tax returns and distribution assistance. ALL OTHER FEES. The aggregate fees billed by Ernst & Young for products and services provided by Ernst & Young to the Funds, other than the services reported above. AGGREGATE NON-AUDIT FEES. The aggregate non-audit fees were for tax fees billed by Ernst & Young for professional services rendered for tax compliance, tax advice, and tax planning, including preparation of tax returns and distribution assistance. All non-audit services rendered were pre-approved by the Audit Committee. As such, the Audit Committee has considered these services in maintaining Ernst & Young's independence. BOARD RECOMMENDATION ON PROPOSAL 3 THE TRUSTEES UNANIMOUSLY RECOMMEND THAT SHAREHOLDERS OF THE FUNDS VOTE "FOR" THE ELECTION OF EACH NOMINEE 33 PROPOSAL 4--THE APPROVAL OF A "MANAGER OF MANAGERS" ARRANGEMENT WITH RESPECT TO ALL FUNDS The Board has approved a "manager of managers" arrangement for the Funds and voted to recommend its approval to the Fund's shareholders. The 1940 Act generally requires that a written sub-advisory agreement be approved by the affirmative vote of a majority of the outstanding shares of a fund. The appointment of a new sub-adviser or material modification of an existing sub-advisory agreement must also be presented for approval by a fund's shareholders under the 1940 Act. The SEC has previously issued an order permitting the Investment Adviser, for a fund for which it serves as investment adviser, to enter into a new sub-advisory agreement or materially amend an existing sub-advisory agreement with an unaffiliated sub-adviser, subject to approval by the Board (including a majority of the Independent Trustees), but without obtaining shareholder approval (the "Manager of Managers Order"). Each Fund may rely upon the Manager of Managers Order only if, among other things, the Fund's shareholders have approved the arrangement. Shareholders of each Fund are therefore being asked to approve the manager of managers arrangement to permit the Investment Adviser, subject to prior approval by the Board, to retain sub-advisers or amend the terms of an existing sub-advisory agreement without approval by shareholders. The manager of managers arrangement has previously been implemented by other funds managed by the Investment Adviser. "MANAGER OF MANAGERS" ARRANGEMENT On January 12, 2000, the SEC issued the Manager of Managers Order permitting the Investment Adviser, with the approval of the Board, to enter into or materially modify sub- advisory agreements with unaffiliated sub-advisers without requiring shareholder approval. The Investment Adviser anticipates that this relief would benefit shareholders to the extent that it will give the Investment Adviser additional flexibility to implement sub-adviser changes or materially modify sub-advisory agreements with unaffiliated sub-advisers when needed, and to avoid expensive proxy solicitations. The Fund would obtain shareholder approval of a sub-advisory agreement (or a material amendment thereto) with a sub-adviser considered to be an "affiliated person," as defined in the 1940 Act, of the Fund or the Investment Adviser, other than by reason of serving as a sub-adviser to the Fund. The Investment Adviser believes that the Manager of Managers Order would enable the Funds to operate with greater efficiency by allowing the Investment Adviser to employ sub-advisers best suited to the needs of a Fund, without incurring the expense and delays associated with obtaining shareholder approval of sub-advisers or material amendments to sub-advisory agreements with sub-advisers that are not affiliated with the Investment Adviser. The Investment Adviser provides management services to the Funds, including overall supervisory responsibility for the general management and investment of each Fund. If the proposal is approved, the Investment Adviser, subject to the review and approval by the Board, would, in connection with the appointment of an investment sub-adviser for a Fund: (a) set the Fund's overall investment strategies; (b) evaluate, select and recommend sub-advisers to manage all or a part of the Fund's assets; (c) when appropriate, allocate and reallocate a Fund's assets 34 among multiple sub-adviser(s); (d) monitor and evaluate the investment performance of the Fund's sub-adviser(s); and (e) implement procedures reasonably designed to ensure that the Fund's sub-adviser(s) comply with the relevant Fund's investment objectives, policies, and restrictions. CONDITIONS OF THE EXEMPTIVE RELIEF Under the terms of the Manager of Managers Order, the Investment Adviser and the Funds are, and would continue to be, subject to several conditions imposed by the SEC. In addition, the Board and the Investment Adviser would not be able to enter into or materially amend a sub-advisory agreement with an affiliated sub-adviser without complying with the 1940 Act and applicable regulations governing shareholder approval of advisory agreements. In order to rely on the Manager of Managers Order, a majority of the Board must consist of Independent Trustees, and the nomination of new or additional Independent Trustees must be at the discretion of the then existing Independent Trustees. In addition, within 90 days of the appointment of any new sub-adviser, the Investment Adviser is required to provide the Fund's shareholders with all information about the new sub-adviser that would be included in a proxy statement, including any changes caused by the addition of the new sub-adviser. A Fund relying on the Manager of Managers Order must disclose in its prospectus the existence, substance and effect of the Manager of Managers Order and must prominently disclose that the Investment Adviser has ultimate responsibility to oversee the sub-advisers and recommend their hiring, termination and replacement. If shareholders of a Fund do not approve the manager of managers arrangement, it will not be implemented and that Fund will continue to be required to obtain shareholder approval of the retention of a sub-adviser of the Fund or any material changes to a sub-advisory agreement. BOARD CONSIDERATIONS IN APPROVING THE "MANAGER OF MANAGERS" ARRANGEMENT In determining whether to approve a "manager of managers" arrangement for the Funds and to recommend approval of such arrangements to shareholders, the Board, including the Independent Trustees, considered certain information and representations provided by the Investment Adviser. The Board noted that it would continue to review and approve each sub-adviser selected by the Investment Adviser under the manager of managers arrangement, and would evaluate and consider for approval all new or amended sub-advisory agreements. The Board also considered that shareholder approval of Proposal 4 would not result in changes to the investment advisory fees paid by a Fund to the Investment Adviser. The Board also noted that fees paid to a sub- adviser would be negotiated between the Investment Adviser and the sub-adviser, subject to Board approval, and that any increase in the investment advisory fee paid to the Investment Adviser by the Fund pursuant to the investment advisory agreement would continue to require shareholder approval. The Board concluded that it is appropriate and in the interests of the Fund's shareholders to provide the Investment Adviser and the Board with maximum flexibility to enter into or 35 materially modify sub-advisory agreements without incurring the unnecessary delay or expense of obtaining shareholder approval. This process will allow the Funds to operate more efficiently. BOARD RECOMMENDATION ON PROPOSAL 4 THE TRUSTEES UNANIMOUSLY RECOMMEND THAT SHAREHOLDERS OF THE FUNDS VOTE "FOR" PROPOSAL 4 36 PROPOSAL 5--THE APPROVAL OF THE ELIMINATION OF THE FUNDAMENTAL INVESTMENT POLICY ON INVESTING IN OTHER INVESTMENT COMPANIES WITH RESPECT TO THE MONEY MARKET FUND Proposal 5 relates to the elimination of the fundamental investment policy on investing in other investment companies for the Money Market Fund. The 1940 Act requires that each fund adopt "fundamental" investment policies with respect to several types of activities. However, the 1940 Act does not require that a fund adopt a fundamental investment policy on investing in other investment companies. Therefore, the Money Market Fund's current fundamental investment policies on investing in other investment companies is unnecessary. PROPOSED FUNDAMENTAL INVESTMENT POLICY It is proposed that the Money Market Fund's fundamental investment restriction on investing in other investment companies be eliminated in its entirety. CURRENT FUNDAMENTAL INVESTMENT POLICY The current fundamental investment policy on investing in other investment companies for the Money Market Fund reads: The Money Market Fund shall not: Invest in securities of other investment companies, except as these securities may be acquired as part of a merger, consolidation, acquisition of assets, or plan of reorganization. DISCUSSION OF PROPOSED MODIFICATION The Investment Adviser believes that under certain market conditions, it may be beneficial for the Money Market Fund to invest in other money market funds (a type of investment company investment permitted under Securities and Exchange Commission ("SEC") Rule 2a-7, the SEC rule that strictly regulates money market funds and their investments). These investments could permit specific investment opportunities or expertise, which could help improve the Money Market Fund's yield and performance. As a shareholder of another investment company, the Money Market Fund would bear, along with other shareholders, its pro rata portion of the other investment company's expenses, including advisory fees. These expenses would be in addition to the advisory and other expenses that the Money Market Fund bears directly in connection with its own operations. Notwithstanding this greater freedom to invest in other investment companies, the Money Market Fund would continue to comply with other provisions of the 1940 Act relating to investments in other investment companies. In addition, the Money Market Fund would be subject to the risks of investing in the underlying money market funds. However, the Money Market Fund as well as the underlying money market funds would be subject to SEC Rule 2a-7 and would invest in compliance with the strict requirements included in the rule. These requirements include stringent portfolio quality, maturity and 37 liquidity requirements and other risk-limiting conditions intended to enhance (but not guarantee) a money market fund's ability to maintain a stable $1.00 price per share. Among other things, Rule 2a-7 limits portfolio holdings to short-term securities (i) that are denominated in U.S. dollars, (ii) that pose minimal credit risk to a fund and meet stringent credit quality requirements, and (iii) that are "Eligible Securities" as defined in Rule 2a-7 under the 1940 Act. The Money Market Fund will continue to seek to maintain a stable $1.00 price per share, as permitted by current Rule 2a-7. Should the Money Market Fund's shareholders not approve the proposal to eliminate the Money Market Fund's fundamental investment policy on investing in other investment companies, the Money Market Fund's current fundamental investment policy on investing in other investment companies would continue to apply unchanged and the Board would decide whether to consider other changes to the Money Market Fund's investment program. BOARD RECOMMENDATION ON PROPOSAL 5 THE TRUSTEES UNANIMOUSLY RECOMMEND THAT SHAREHOLDERS OF EACH MONEY MARKET FUND VOTE "FOR" PROPOSAL 5 38 OTHER BUSINESS The Trustees do not know of any matters to be presented at the Meeting other than those set forth in this Joint Proxy Statement. If other business should properly come before the Meeting, proxies will be voted in accordance with the judgment of the persons named in the accompanying proxy. ADDITIONAL INFORMATION ADMINISTRATOR, PRINCIPAL UNDERWRITER AND TRANSFER AGENT The principal underwriter/distributor of the Trusts is Rydex Distributors, LLC, located at 805 King Farm Boulevard, Suite 600, Rockville, Maryland 20850, an affiliate of the Investment Adviser because it is commonly held with the Investment Adviser (and will remain under common control after the Transaction). Rydex Fund Services, LLC (the "Administrator"), also an affiliate of the Investment Adviser, is located at 805 King Farm Boulevard, Suite 600, Rockville, Maryland 20850 and provides general administrative, shareholder, dividend disbursement, transfer agent and registrar services to the Funds. Information regarding the fees paid by each Fund to the Distributor and the Administrator during the previous fiscal year is provided in Appendix C. The Transaction would affect the control of the Distributor and the Administrator because they are commonly held with the Investment Adviser. However, shareholder approval is not required in order for the Distributor and the Administrator to continue providing services to the Funds after the closing of the Transaction. The Board has been assured that there will be no material change in the nature or quality of the services provided by the Distributor and the Administrator to each Fund due to the change in control. AFFILIATIONS AND AFFILIATED BROKERAGE During the Funds' most recent fiscal year, the Funds paid no commissions on portfolio brokerage transactions to brokers who may be deemed to be affiliated persons of the Funds, the Investment Adviser, or affiliated persons of such persons ("Affiliated Brokers"). OTHER INFORMATION Proxy materials, reports and other information filed by the Funds can be inspected and copied at the Public Reference Facilities maintained by the SEC at 100 F Street, NE, Washington, DC 20549. The SEC maintains an Internet web site (at http://www.sec.gov), which contains other information about the Funds. VOTING INFORMATION PROXY SOLICITATION. The principal solicitation of proxies will be by the mailing of this Joint Proxy Statement on or about October 13, 2011, but proxies may also be solicited by telephone and/or in person by representatives of the Trusts, regular employees of the Investment Adviser or its affiliate(s), or The Altman Group, a private proxy services firm. If we have not received your vote as the date of the Meeting approaches, you may receive a telephone call from 39 these parties to ask for your vote. Arrangements will be made with brokerage houses and other custodians, nominees, and fiduciaries to forward proxies and proxy materials to their principals. COST OF THE MEETING. The cost of the Meeting, including the costs of retaining The Altman Group, preparing and mailing of the notice, proxy statement and proxy, and the solicitation of proxies, including reimbursement to broker-dealers and others who forwarded proxy materials to their clients, will be borne by Guggenheim Capital or its affiliates, and not the Funds. The estimated cost of retaining The Altman Group is approximately $963,183. SHAREHOLDER VOTING. Shareholders of the Funds who own shares at the close of business on October 3, 2011 will be entitled to notice of, and to vote at, the Meeting. Each whole share is entitled to one vote, and each fractional share is entitled to a proportionate fractional vote on each matter as to which such shares are to be voted at the Meeting. One-third (331/3%) of a Trust's shares entitled to vote on a Proposal constitutes a quorum. In addition, abstentions and broker non-votes will not be counted for or against the Proposals, but will be counted for purposes of determining whether a quorum is present. "Broker non-votes" are shares held by a broker or nominee as to which instructions have not been received from the beneficial owners or persons entitled to vote, and the broker or nominee does not have discretionary voting power. Because the affirmative vote of a majority of the outstanding voting securities of each Fund, as defined below, is required to approve each Proposal (other than Proposal 3), abstentions and broker non-votes will effectively be a vote against those Proposals. Abstentions and broker non-votes will have no effect on Proposal 5, for which the required vote is a plurality of a Trust's shares voting. If a quorum is not present at the Meeting, or if a quorum is present at the Meeting but sufficient votes to approve the Proposals are not received, or if other matters arise requiring shareholder attention, the persons named as proxy agents may propose one or more adjournments of the Meeting to permit further solicitation of proxies. Any such adjournment will require the affirmative vote of a majority of those shares present at the Meeting or represented by proxy. The persons named as proxies will vote those proxies that they are entitled to vote "FOR" a Proposal in favor of such an adjournment, and will vote those proxies required to be voted "AGAINST" a Proposal, against such an adjournment. Information regarding the number of issued and outstanding shares of each Fund as of the Record Date is provided in Appendix J, representing the same number of votes for each of such Funds. The persons who are known to have owned beneficially 5% or more of each Fund's outstanding shares as of the Record Date are listed in Appendix K. The person(s) named as proxies on the enclosed proxy card will vote in accordance with your directions, if your proxy is received properly executed. If we receive your proxy, and it is executed properly, but you give no voting instructions with respect to any proposal, your shares will be voted "FOR" the Proposal. The duly appointed proxies may, in their discretion, vote upon such other matters as may properly come before the Meeting. In order that your shares may be represented at the Meeting, you are requested to vote your shares by mail, Internet or telephone by following the enclosed instructions. IF YOU 40 VOTE BY TELEPHONE OR INTERNET, PLEASE DO NOT RETURN YOUR PROXY CARD, UNLESS YOU LATER ELECT TO CHANGE YOUR VOTE. You may revoke your proxy: (a) at any time prior to its exercise by written notice of its revocation to the secretary of the Trust prior to the Meeting; (b) by the subsequent execution and timely return of another proxy prior to the Meeting (following the methods noted above); or (c) by being present and voting in person at the Meeting and giving oral notice of revocation to the chair of the Meeting. However, attendance in-person at the Meeting, by itself, will not revoke a previously-tendered proxy. REQUIRED VOTE. Approval of each Proposal (other than Proposal 3) requires the vote of a "majority of the outstanding voting securities" of a Fund, which means the vote of 67% or more of the shares that are present at the Meeting, provided that the holders of more than 50% of the outstanding shares are present or represented by proxy, or the vote of more than 50% of the Fund's outstanding shares, whichever is less. With respect to Proposal 3, a plurality of a Trust's shares voting is required to elect a Trustee with respect to that Trust. The Current Agreements will remain in place until the completion of the Transaction, at which time, the Current Agreements will terminate and, subject to shareholder approval, the New Agreements will go into effect. As a result, if for some reason the Transaction does not occur, the Current Agreements will not automatically terminate and will remain in effect, and the New Agreements will not be entered into, even if they have been approved by Fund shareholders. If Proposals 1 and 2 are not approved by shareholders of any Fund, the Board will evaluate other short- and long-term options, as previously discussed. If the nominees are not elected, the current Trustees will continue their current terms. New Trustees could be appointed in compliance with applicable law. With respect to Proposal 4, should shareholders of a Fund not approve the manager of managers arrangement, it will not be implemented and that Fund will continue to be required to obtain shareholder approval of the retention of an unaffiliated sub-adviser of the Fund or any material changes to a sub-advisory agreements. With respect to Proposal 5, should shareholders of the Money Market Fund not approve the proposal to amend the Money Market Fund's fundamental policy on investing in other investment companies, the Money Market Fund's fundamental investment policy on investing in other investment companies would continue to apply unchanged. SHAREHOLDERS SHARING THE SAME ADDRESS. As permitted by law, only one copy of this Joint Proxy Statement may be delivered to shareholders residing at the same address, unless such shareholders have notified the Trusts of their desire to receive multiple copies of the shareholder reports and proxy statements that each Trust sends. If you would like to receive an additional copy, please contact the Trusts by writing to the Trusts' address, or by calling the telephone number shown on the front page of this Joint Proxy Statement. The Trusts will then promptly deliver, upon request, a separate copy of this Joint Proxy Statement to any shareholder residing at an address to which only one copy was mailed. Shareholders wishing to receive separate copies of the Trusts' shareholder reports and proxy statements in the future, and shareholders sharing an address that wish to receive a single copy if they are receiving multiple copies, should also send a request as indicated. 41 SHAREHOLDER PROPOSALS The Trusts are organized as statutory trusts under the laws of Delaware. As such, the Trusts are not required to, and do not, hold annual shareholder meetings. Nonetheless, the Board may call a special meeting of shareholders for action by shareholder vote as may be required by the 1940 Act or as required or permitted by each Trust's Declaration of Trust and By-Laws. Shareholders who wish to present a proposal for action at a future meeting should submit a written proposal to the Secretary of the Trust, c/o Rydex Series Funds or Rydex Dynamic Funds, 805 King Farm Boulevard, Suite 600, Rockville, Maryland 20850 for inclusion in a future proxy statement. Shareholder proposals to be presented at any future meeting of a Trust must be received by the Trust in writing within a reasonable amount of time before the Trust solicits proxies for that meeting, in order to be considered for inclusion in the proxy materials for that meeting. Whether a proposal is included in a proxy statement will be determined in accordance with applicable federal and state laws. Shareholders retain the right to request that a meeting of the shareholders be held for the purpose of considering matters requiring shareholder approval. TO ENSURE THE PRESENCE OF A QUORUM AT THE SPECIAL MEETING, PROMPT EXECUTION AND RETURN OF THE ENCLOSED PROXY IS REQUESTED. A SELF-ADDRESSED, POSTAGE-PAID ENVELOPE IS ENCLOSED FOR YOUR CONVENIENCE, ALONG WITH INSTRUCTIONS ON HOW TO VOTE OVER THE INTERNET OR BY TELEPHONE SHOULD YOU PREFER TO VOTE BY ONE OF THOSE METHODS. By Order of the Boards of Trustees, Richard M. Goldman President 42 APPENDIX A CORPORATE STRUCTURE OF THE INVESTMENT ADVISER The following sets forth the name and business address of each parent company of the Investment Adviser, and the basis of each parent company's control the Investment Adviser as of September 20, 2011. The Investment Adviser is an indirect wholly-owned subsidiary of an entity that is managed by Guggenheim Partners, LLC ("Guggenheim Partners"). Guggenheim Partners is a wholly-owned subsidiary of Guggenheim Capital, LLC ("Guggenheim Capital"), 227 West Monroe Street, 48th Floor, Chicago, Illinois 60606. Sage Assets, Inc., 5949 Sherry Lane, Suite 1900, Dallas, Texas 76225, a wholly-owned subsidiary of Sammons Enterprises, Inc., 5949 Sherry Lane, Suite 1900, Dallas, Texas 75225, is a control person of Guggenheim Partners as a result of its equity ownership in excess of 25% (but less than 50%) of Guggenheim Capital. Following the Transaction, the Investment Adviser will be an indirect wholly-owned subsidiary of Guggenheim Capital. A-1 APPENDIX B FORMS OF NEW INVESTMENT ADVISORY AGREEMENT ADVISORY AGREEMENT ADVISORY AGREEMENT made as of this [ ] day of [ ], 2011 by and between RYDEX SERIES FUNDS (the "Trust"), a Delaware statutory trust registered as an investment company under the Investment Company Act of 1940, as amended (the "1940 Act"), and SECURITY INVESTORS, LLC, a Kansas limited liability company, with its principal place of business at 805 King Farm Boulevard, Suite 600, Rockville, Maryland 20850 (the "Adviser"). W I T N E S S E T H WHEREAS, the Board of Trustees (the "Board") of the Trust has selected the Adviser to act as investment adviser to the Trust on behalf of the series set forth on Schedule A to this Agreement (each a "Fund" and, collectively, the "Funds"), as such Schedule may be amended from time to time upon mutual agreement of the parties, and to provide certain related services, as more fully set forth below, and to perform such services under the terms and conditions hereinafter set forth; NOW, THEREFORE, in consideration of the mutual covenants and benefits set forth herein, the Trust and the Adviser do hereby agree as follows: 1. THE ADVISER'S SERVICES. (a) Discretionary Investment Management Services. The Adviser shall act as investment adviser with respect to the Funds. In such capacity, the Adviser shall, subject to the supervision of the Board, regularly provide the Funds with investment research, advice and supervision and shall furnish continuously an investment program for the Funds, consistent with the respective investment objectives and policies of each Fund. The Adviser shall determine, from time to time, what securities shall be purchased for the Funds, what securities shall be held or sold by the Funds and what portion of the Funds' assets shall be held uninvested in cash, subject always to the provisions of the Trust's Declaration of Trust, By-Laws and its registration statement on Form N-1A (the "Registration Statement") under the 1940 Act, and under the Securities Act of 1933, as amended (the "1933 Act"), covering Fund shares, as filed with the Securities and Exchange Commission (the "Commission"), and to the investment objectives, policies and restrictions of the Funds, as each of the same shall be from time to time in effect. To carry out such obligations, the Adviser shall exercise full discretion and act for the Funds in the same manner and with the same force and effect as the Funds themselves might or could do with respect to purchases, sales or other transactions, as well as with respect to all other such things necessary or incidental to the furtherance or conduct of such purchases, sales or other transactions. No reference in this Agreement to the Adviser having full discretionary authority over each Fund's investments shall in any way limit the right of the Board, in its sole discretion, to establish or revise policies in connection with the management of a Fund's assets or to otherwise exercise its right to control the overall management of a Fund. B-1 (b) Compliance. The Adviser agrees to comply with the requirements of the 1940 Act, the Investment Advisers Act of 1940 (the "Advisers Act"), the 1933 Act, the Securities Exchange Act of 1934, as amended (the "1934 Act"), the Commodity Exchange Act and the respective rules and regulations thereunder, as applicable, as well as with all other applicable federal and state laws, rules, regulations and case law that relate to the services and relationships described hereunder and to the conduct of its business as a registered investment adviser. The Adviser also agrees to comply with the objectives, policies and restrictions set forth in the Registration Statement, as amended or supplemented, of the Funds, and with any policies, guidelines, instructions and procedures approved by the Board and provided to the Adviser. In selecting each Fund's portfolio securities and performing the Adviser's obligations hereunder, the Adviser shall cause the Fund to comply with the diversification and source of income requirements of Subchapter M of the Internal Revenue Code of 1986, as amended (the "Code"), for qualification as a regulated investment company. The Adviser shall maintain compliance procedures that it reasonably believes are adequate to ensure its compliance with the foregoing. No supervisory activity undertaken by the Board shall limit the Adviser's full responsibility for any of the foregoing. (c) Proxy Voting. The Board has the authority to determine how proxies with respect to securities that are held by the Funds shall be voted, and the Board has initially determined to delegate the authority and responsibility to vote proxies for the Funds' securities to the Adviser. So long as proxy voting authority for the Funds has been delegated to the Adviser, the Adviser shall exercise its proxy voting responsibilities. The Adviser shall carry out such responsibility in accordance with any instructions that the Board shall provide from time to time, and at all times in a manner consistent with Rule 206(4)-6 under the Advisers Act and its fiduciary responsibilities to the Trust. The Adviser shall provide periodic reports and keep records relating to proxy voting as the Board may reasonably request or as may be necessary for the Funds to comply with the 1940 Act and other applicable law. Any such delegation of proxy voting responsibility to the Adviser may be revoked or modified by the Board at any time. (d) Recordkeeping. The Adviser shall not be responsible for the provision of administrative, bookkeeping or accounting services to the Funds, except as otherwise provided herein or as may be necessary for the Adviser to supply to the Trust or its Board the information required to be supplied under this Agreement. The Adviser shall maintain separate books and detailed records of all matters pertaining to Fund assets advised by the Adviser required by Rule 31a-1 under the 1940 Act (other than those records being maintained by any administrator, custodian or transfer agent appointed by the Funds) relating to its responsibilities provided hereunder with respect to the Funds, and shall preserve such records for the periods and in a manner prescribed therefore by Rule 31a-2 under the 1940 Act (the "Fund Books and Records"). The Fund Books and Records shall be available to the Board at any time upon request, shall be delivered to the Trust upon the termination of this Agreement and shall be available without delay during any day the Trust is open for business. B-2 (e) Holdings Information and Pricing. The Adviser shall provide regular reports regarding Fund holdings, and shall, on its own initiative, furnish the Trust and its Board from time to time with whatever information the Adviser believes is appropriate for this purpose. The Adviser agrees to immediately notify the Trust if the Adviser reasonably believes that the value of any security held by a Fund may not reflect fair value. The Adviser agrees to provide any pricing information of which the Adviser is aware to the Trust, its Board and/or any Fund pricing agent to assist in the determination of the fair value of any Fund holdings for which market quotations are not readily available or as otherwise required in accordance with the 1940 Act or the Trust's valuation procedures for the purpose of calculating the Fund net asset value in accordance with procedures and methods established by the Board. (f) Cooperation with Agents of the Trust. The Adviser agrees to cooperate with and provide reasonable assistance to the Trust, any Trust custodian or foreign subcustodians, any Trust pricing agents and all other agents and representatives of the Trust, such information with respect to the Funds as they may reasonably request from time to time in the performance of their obligations, provide prompt responses to reasonable requests made by such persons and establish appropriate interfaces with each so as to promote the efficient exchange of information and compliance with applicable laws and regulations. 2. CODE OF ETHICS. The Adviser has adopted a written code of ethics that it reasonably believes complies with the requirements of Rule 17j-1 under the 1940 Act, which it will provide to the Trust. The Adviser shall ensure that its Access Persons (as defined in the Adviser's Code of Ethics) comply in all material respects with the Adviser's Code of Ethics, as in effect from time to time. Upon request, the Adviser shall provide the Trust with a (i) a copy of the Adviser's current Code of Ethics, as in effect from time to time, and (ii) certification that it has adopted procedures reasonably necessary to prevent Access Persons from engaging in any conduct prohibited by the Adviser's Code of Ethics. Annually, the Adviser shall furnish a written report, which complies with the requirements of Rule 17j-1, concerning the Adviser's Code of Ethics to the Trust. The Adviser shall respond to requests for information from the Trust as to violations of the Code of Ethics by Access Persons and the sanctions imposed by the Adviser. The Adviser shall immediately notify the Trust of any material violation of the Code of Ethics, whether or not such violation relates to a security held by any Fund. 3. INFORMATION AND REPORTING. The Adviser shall provide the Trust and its respective officers with such periodic reports concerning the obligations the Adviser has assumed under this Agreement as the Trust may from time to time reasonably request. (a) Notification of Breach/Compliance Reports. The Adviser shall notify the Trust immediately upon detection of (i) any material failure to manage any Fund in accordance with its investment objectives and policies or any applicable law; or (ii) any material breach of the Funds' or the Adviser's policies, guidelines or procedures. In addition, the Adviser shall provide a quarterly report regarding each Fund's compliance with its investment objectives and policies, applicable law, including, but not limited to the 1940 Act and Subchapter M of the Code, and the Fund's policies, guidelines or procedures as applicable to the Adviser's obligations under this Agreement. The Adviser agrees to correct any such failure promptly and to take any action that the Board may reasonably B-3 request in connection with any such breach. Upon request, the Adviser shall also provide the officers of the Trust with supporting certifications in connection with such certifications of Fund financial statements and disclosure controls pursuant to the Sarbanes-Oxley Act. The Adviser will promptly notify the Trust in the event (i) the Adviser is served or otherwise receives notice of any action, suit, proceeding, inquiry or investigation, at law or in equity, before or by any court, public board, or body, involving the affairs of the Trust (excluding class action suits in which a Fund is a member of the plaintiff class by reason of the Fund's ownership of shares in the defendant) or the compliance by the Adviser with the federal or state securities laws or (ii) an actual change in control of the Adviser resulting in an "assignment" (as defined in the 1940 Act) has occurred or is otherwise proposed to occur. (b) Board and Filings Information. The Adviser will also provide the Trust with any information reasonably requested regarding its management of the Funds required for any meeting of the Board, or for any shareholder report, amended registration statement, proxy statement, or prospectus supplement to be filed by the Trust with the Commission. The Adviser will make its officers and employees available to meet with the Board from time to time on due notice to review its investment management services to the Funds in light of current and prospective economic and market conditions and shall furnish to the Board such information as may reasonably be necessary in order for the Board to evaluate this Agreement or any proposed amendments thereto. (c) Transaction Information. The Adviser shall furnish to the Trust such information concerning portfolio transactions as may be necessary to enable the Trust or its designated agent to perform such compliance testing on the Funds and the Adviser's services as the Trust may, in its sole discretion, determine to be appropriate. The provision of such information by the Adviser to the Trust or its designated agent in no way relieves the Adviser of its own responsibilities under this Agreement. 4. BROKERAGE. (a) Principal Transactions. In connection with purchases or sales of securities for the account of a Fund, neither the Adviser nor any of its directors, officers or employees will act as a principal or agent or receive any commission except as permitted by the 1940 Act. (b) Placement of Orders. The Adviser shall arrange for the placing of all orders for the purchase and sale of securities for a Fund's account with brokers or dealers selected by the Adviser. In the selection of such brokers or dealers and the placing of such orders, the Adviser is directed at all times to seek for the Fund the most favorable execution and net price available under the circumstances. It is also understood that it is desirable for the Fund that the Adviser have access to brokerage and research services provided by brokers who may execute brokerage transactions at a higher cost to the Fund than may result when allocating brokerage to other brokers, consistent with section 28(e) of the 1934 Act and any Commission staff interpretations thereof. Therefore, the Adviser is authorized to place orders for the purchase and sale of securities for a Fund with such brokers, subject to review by the Board from time to time with respect to the extent and B-4 continuation of this practice. It is understood that the services provided by such brokers may be useful to the Adviser in connection with its or its affiliates' services to other clients. (c) Aggregated Transactions. On occasions when the Adviser deems the purchase or sale of a security to be in the best interest of a Fund as well as other clients of the Adviser, the Adviser may, to the extent permitted by applicable law and regulations, aggregate the order for securities to be sold or purchased. In such event, the Adviser will allocate securities or futures contracts so purchased or sold, as well as the expenses incurred in the transaction, in the manner the Adviser reasonably considers to be equitable and consistent with its fiduciary obligations to the Fund and to such other clients under the circumstances. (d) Affiliated Brokers. The Adviser or any of its affiliates may act as broker in connection with the purchase or sale of securities or other investments for a Fund, subject to: (a) the requirement that the Adviser seek to obtain best execution and price within the policy guidelines determined by the Board and set forth in the Fund's current prospectus and SAI; (b) the provisions of the 1940 Act; (c) the provisions of the Advisers Act; (d) the provisions of the 1934 Act; and (e) other provisions of applicable law. These brokerage services are not within the scope of the duties of the Adviser under this Agreement. Subject to the requirements of applicable law and any procedures adopted by the Board, the Adviser or its affiliates may receive brokerage commissions, fees or other remuneration from a Fund for these services in addition to the Adviser's fees for services under this Agreement. 5. CUSTODY. Nothing in this Agreement shall permit the Adviser to take or receive physical possession of cash, securities or other investments of a Fund. 6. ALLOCATION OF CHARGES AND EXPENSES. The Adviser will bear its own costs of providing services hereunder. Other than as herein specifically indicated, the Adviser shall not be responsible for a Fund's expenses, including brokerage and other expenses incurred in placing orders for the purchase and sale of securities and other investment instruments. Notwithstanding the foregoing paragraph, with respect to the All Asset Conservative Strategy, All Asset Moderate Strategy, All Asset Aggressive Strategy, and Alternative Strategies Allocation Funds, the Adviser will bear its own costs of providing services hereunder. In addition, the Adviser agrees to pay all expenses incurred by the foregoing Funds, except for acquired fund fees and expenses, interest, taxes, brokerage and other expenses incurred in placing orders for the purchase and sale of securities and other investment instruments, extraordinary expenses, and distribution fees and expenses paid by the Funds under any distribution plan adopted pursuant to Rule 12b-1 under the 1940 Act. Notwithstanding the foregoing paragraphs, with respect to the Multi-Hedge Strategies Fund, the Adviser will bear its own costs of providing services hereunder. The Adviser agrees to pay all expenses incurred by the foregoing Fund, except for interest, taxes, brokerage and other expenses incurred in placing orders for the purchase and sale of securities and other investment B-5 instruments, extraordinary expenses, and distribution fees and expenses paid by the Fund under any distribution plan adopted pursuant to Rule 12b-1 under the 1940 Act. 7. Representations, Warranties and Covenants. (a) Properly Registered. The Adviser is registered as an investment adviser under the Advisers Act, and will remain so registered for the duration of this Agreement. The Adviser is not prohibited by the Advisers Act or the 1940 Act from performing the services contemplated by this Agreement, and to the best knowledge of the Adviser, there is no proceeding or investigation that is reasonably likely to result in the Adviser being prohibited from performing the services contemplated by this Agreement. The Adviser agrees to promptly notify the Trust of the occurrence of any event that would disqualify the Adviser from serving as an investment adviser to an investment company. The Adviser is in compliance in all material respects with all applicable federal and state law in connection with its investment management operations. (b) ADV Disclosure. The Adviser has provided the Trust with a copy of its Form ADV as most recently filed with the Commission and will, promptly after filing any amendment to its Form ADV with the Commission, furnish a copy of such amendment(s) to the Trust. The information contained in the Adviser's Form ADV is accurate and complete in all material respects and does not omit to state any material fact necessary in order to make the statements made, in light of the circumstances under which they were made, not misleading. (c) Fund Disclosure Documents. The Adviser has reviewed and will in the future review, the Registration Statement, and any amendments or supplements thereto, the annual or semi-annual reports to shareholders, other reports filed with the Commission and any marketing material of the Funds (collectively the "Disclosure Documents") and represents and warrants that with respect to disclosure about the Adviser, the manner in which the Adviser manages the Funds or information relating directly or indirectly to the Adviser, such Disclosure Documents contain or will contain, as of the date thereof, no untrue statement of any material fact and does not omit any statement of material fact which was required to be stated therein or necessary to make the statements contained therein not misleading. (d) Use of The Name "Rydex". The Adviser has the right to use the name "Rydex" in connection with its services to the Trust and that, subject to the terms set forth in Section 8 of this Agreement, the Trust shall have the right to use the name "Rydex" in connection with the management and operation of the Funds. The Adviser is not aware of any threatened or existing actions, claims, litigation or proceedings that would adversely affect or prejudice the rights of the Adviser or the Trust to use the name "Rydex". (e) Insurance. The Adviser maintains errors and omissions insurance coverage in an appropriate amount and shall provide prior written notice to the Trust (i) of any material changes in its insurance policies or insurance coverage; or (ii) if any material claims will be made on its insurance policies. Furthermore, the Adviser shall upon reasonable request B-6 provide the Trust with any information it may reasonably require concerning the amount of or scope of such insurance. (f) No Detrimental Agreement. The Adviser represents and warrants that it has no arrangement or understanding with any party, other than the Trust, that would influence the decision of the Adviser with respect to its selection of securities for a Fund, and that all selections shall be done in accordance with what is in the best interest of the Fund. (g) Conflicts. The Adviser shall act honestly, in good faith and in the best interests of the Trust including requiring any of its personnel with knowledge of Fund activities to place the interest of the Funds first, ahead of their own interests, in all personal trading scenarios that may involve a conflict of interest with the Funds, consistent with its fiduciary duties under applicable law. (h) Representations. The representations and warranties in this Section 7 shall be deemed to be made on the date this Agreement is executed and at the time of delivery of the quarterly compliance report required by Section 3(a), whether or not specifically referenced in such report. 8. THE NAME "RYDEX". The Adviser grants to the Trust a license to use the name "Rydex" (the "Name") as part of the name of any Fund. The foregoing authorization by the Adviser to the Trust to use the Name as part of the name of any Fund is not exclusive of the right of the Adviser itself to use, or to authorize others to use, the Name; the Trust acknowledges and agrees that, as between the Trust and the Adviser, the Adviser has the right to use, or authorize others to use, the Name. The Trust shall (1) only use the Name in a manner consistent with uses approved by the Adviser; (2) use its best efforts to maintain the quality of the services offered using the Name; (3) adhere to such other specific quality control standards as the Adviser may from time to time promulgate. At the request of the Adviser, the Trust will (a) submit to Adviser representative samples of any promotional materials using the Name; and (b) change the name of any Fund within three months of its receipt of the Adviser's request, or such other shorter time period as may be required under the terms of a settlement agreement or court order, so as to eliminate all reference to the Name and will not thereafter transact any business using the Name in the name of any Fund; provided, however, that the Trust may continue to use beyond such date any supplies of prospectuses, marketing materials and similar documents that the Trust had at the date of such name change in quantities not exceeding those historically produced and used in connection with such Fund. 9. ADVISER'S COMPENSATION. The Funds shall pay to the Adviser, as compensation for the Adviser's services hereunder, a fee, determined as described in Schedule A that is attached hereto and made a part hereof. Such fee shall be computed daily and paid not less than monthly in arrears by the Funds. The method for determining net assets of a Fund for purposes hereof shall be the same as the method for determining net assets for purposes of establishing the offering and redemption prices of Fund shares as described in the Funds' prospectus(es). In the event of termination of this Agreement, the fee provided in this Section shall be computed on the basis of the period B-7 ending on the last business day on which this Agreement is in effect subject to a pro rata adjustment based on the number of days elapsed in the current month as a percentage of the total number of days in such month. 10. INDEPENDENT CONTRACTOR. In the performance of its duties hereunder, the Adviser is and shall be an independent contractor and, unless otherwise expressly provided herein or otherwise authorized in writing, shall have no authority to act for or represent the Trust or any Fund in any way or otherwise be deemed to be an agent of the Trust or any Fund. If any occasion should arise in which the Adviser gives any advice to its clients concerning the shares of a Fund, the Adviser will act solely as investment counsel for such clients and not in any way on behalf of the Fund. 11. ASSIGNMENT AND AMENDMENTS. This Agreement shall automatically terminate, without the payment of any penalty, in the event of its assignment (as defined in section 2(a)(4) of the 1940 Act); provided that such termination shall not relieve the Adviser of any liability incurred hereunder. This Agreement may not be added to or changed orally and may not be modified or rescinded except by a writing signed by the parties hereto and in accordance with the 1940 Act, when applicable. 12. Duration and Termination. (a) This Agreement shall become effective as of the date executed and shall remain in full force and effect continually thereafter, subject to renewal as provided in Section 12(d) and unless terminated automatically as set forth in Section 11 hereof or until terminated as follows: (b) The Trust may cause this Agreement to terminate either (i) by vote of its Board or (ii) with respect to any Fund, upon the affirmative vote of a majority of the outstanding voting securities of the Fund; or (c) The Adviser may at any time terminate this Agreement by not more than sixty (60) days' nor less than thirty (30) days' written notice delivered or mailed by registered mail, postage prepaid, to the Trust; or (d) This Agreement shall automatically terminate two years from the date of its execution unless its renewal is specifically approved at least annually thereafter by (i) a majority vote of the Trustees, including a majority vote of such Trustees who are not interested persons of the Trust or the Adviser, at a meeting called for the purpose of voting on such approval; or (ii) the vote of a majority of the outstanding voting securities of each Fund; provided, however, that if the continuance of this Agreement is submitted to the shareholders of the Funds for their approval and such shareholders fail to approve such continuance of this Agreement as provided herein, the Adviser may continue to serve hereunder as to the Funds in a manner consistent with the 1940 Act and the rules and regulations thereunder; and B-8 Termination of this Agreement pursuant to this Section shall be without payment of any penalty. In the event of termination of this Agreement for any reason, the Adviser shall, immediately upon notice of termination or on such later date as may be specified in such notice, cease all activity on behalf of the Funds and with respect to any of their assets, except as otherwise required by any fiduciary duties of the Adviser under applicable law. In addition, the Adviser shall deliver the Fund Books and Records to the Trust by such means and in accordance with such schedule as the Trust shall direct and shall otherwise cooperate, as reasonably directed by the Trust, in the transition of portfolio asset management to any successor of the Adviser. 13. CERTAIN DEFINITIONS. For the purposes of this Agreement: (a) "Affirmative vote of a majority of the outstanding voting securities of the Fund" shall have the meaning as set forth in the 1940 Act, subject, however, to such exemptions as may be granted by the Commission under the 1940 Act or any interpretations of the Commission staff. (b) "Interested persons" and "Assignment" shall have their respective meanings as set forth in the 1940 Act, subject, however, to such exemptions as may be granted by the Commission under the 1940 Act or any interpretations of the Commission staff. 14. LIABILITY OF THE ADVISER. The Adviser shall indemnify and hold harmless the Trust and all affiliated persons thereof (within the meaning of Section 2(a)(3) of the 1940 Act) and all controlling persons (as described in Section 15 of the 1933 Act) (collectively, the "Adviser Indemnitees") against any and all losses, claims, damages, liabilities or litigation (including reasonable legal and other expenses) by reason of or arising out of: (a) the Adviser being in material violation of any applicable federal or state law, rule or regulation or any investment policy or restriction set forth in the Funds' Registration Statement or any written guidelines or instruction provided in writing by the Board, (b) a Fund's failure to satisfy the diversification or source of income requirements of Subchapter M of the Code, or (c) the Adviser's willful misfeasance, bad faith or gross negligence generally in the performance of its duties hereunder or its reckless disregard of its obligations and duties under this Agreement. 15. ENFORCEABILITY. Any term or provision of this Agreement which is invalid or unenforceable in any jurisdiction shall, as to such jurisdiction be ineffective to the extent of such invalidity or unenforceability without rendering invalid or unenforceable the remaining terms or provisions of this Agreement or affecting the validity or enforceability of any of the terms or provisions of this Agreement in any other jurisdiction. 16. LIMITATION OF LIABILITY. The parties to this Agreement acknowledge and agree that all litigation arising hereunder, whether direct or indirect, and of any and every nature whatsoever shall be satisfied solely out of the assets of the affected Fund and that no Trustee, officer or holder of shares of beneficial interest of the Fund shall be personally liable for any of the foregoing liabilities. The Trust's Certificate of Trust, as amended from time to time, is on file in the Office of the Secretary of State of the State of Delaware. Such Certificate of Trust and the B-9 Trust's Declaration of Trust describe in detail the respective responsibilities and limitations on liability of the Trustees, officers, and holders of shares of beneficial interest. 17. JURISDICTION. This Agreement shall be governed by and construed in accordance with the substantive laws of state of Delaware and the Adviser consents to the jurisdiction of courts, both state or federal, in Delaware, with respect to any dispute under this Agreement. 18. PARAGRAPH HEADINGS. The headings of paragraphs contained in this Agreement are provided for convenience only, form no part of this Agreement and shall not affect its construction. 19. COUNTERPARTS. This Agreement may be executed simultaneously in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. IN WITNESS WHEREOF, the parties hereto have caused this instrument to be signed on their behalf by their duly authorized officers as of the date first above written. RYDEX SERIES FUNDS, on behalf of each Fund listed on Schedule A By: __________________________________ Name: Richard M. Goldman Title: President SECURITY INVESTORS, LLC By: __________________________________ Name: Richard M. Goldman Title: Chief Executive Officer B-10 SCHEDULE A TO THE ADVISORY AGREEMENT DATED [ ], 2011 BETWEEN RYDEX SERIES FUNDS AND SECURITY INVESTORS, LLC The Trust will pay to the Adviser as compensation for the Adviser's services rendered, a fee, computed daily at an annual rate based on the average daily net assets of the respective Fund in accordance the following fee schedule:
FUND RATE FUND RATE ----------------------------------------------- ----------------------------------------------- Nova 0.75% Consumer Products 0.85% Inverse S&P 500 Strategy 0.90% Electronics 0.85% NASDAQ-100(R) 0.75% Energy Services 0.85% Inverse NASDAQ-100(R) Strategy 0.90% Financial Services 0.85% Mid-Cap 1.5x Strategy 0.90% Health Care 0.85% Russell 2000(R) 1.5x Strategy 0.90% Internet 0.85% Government Long Bond 1.2x Strategy 0.50% Leisure 0.85% Europe 1.25x Strategy 0.90% Precious Metals 0.75% S&P 500 Pure Value 0.75% Real Estate 0.85% S&P 500 Pure Growth 0.75% Retailing 0.85% S&P Mid-Cap 400 Pure Value 0.75% Technology 0.85% S&P Mid-Cap 400 Pure Growth 0.75% Telecommunications 0.85% Inverse Mid-Cap Strategy 0.90% Transportation 0.85% S&P Small-Cap 600 Pure Value 0.75% Utilities 0.85% S&P Small-Cap 600 Pure Growth 0.75% Commodities Strategy 0.75% Inverse Russell 2000(R) Strategy 0.90% U.S. Long Short Momentum 0.90% Strengthening Dollar 2x Strategy 0.90% S&P 500 0.75% Weakening Dollar 2x Strategy 0.90% Russell 2000(R) 0.75% U.S. Government Money Market 0.50% Inverse International 2x Strategy* 0.75% High Yield Strategy 0.75% All-Asset Moderate Strategy 0.00% International 2x Strategy* 0.75% All-Asset Aggressive Strategy 0.00% Long/Short Commodities Strategy 0.90% Alternative Strategies Allocation 0.00% Multi-Hedge Strategies 1.15% Event Driven and Distressed Strategies 0.90% Banking 0.85% Alternative Strategies 0.90% Basic Materials 0.85% Long Short Equity Strategy 0.90% Biotechnology 0.85% Long Short Interest Rate Strategy 0.75% Managed Futures Strategy 0.90% Japan 2x Strategy 0.75% Inverse High Yield Strategy 0.75% Emerging Markets 2x Strategy 0.90% Energy 0.85% Inverse Emerging Markets 2x Strategy 0.90% Inverse Government Long Bond Strategy 0.90% Global Managed Futures Strategy Fund* 0.90% All-Asset Conservative Strategy 0.00%
* Denotes Funds that have not yet commenced operations. B-11 ADVISORY AGREEMENT ADVISORY AGREEMENT made as of this [ ] day of [ ], 2011 by and between RYDEX DYNAMIC FUNDS (the "Trust"), a Delaware statutory trust registered as an investment company under the Investment Company Act of 1940, as amended (the "1940 Act"), and SECURITY INVESTORS, LLC, a Kansas limited liability company, with its principal place of business at 805 King Farm Boulevard, Suite 600, Rockville, Maryland 20850 (the "Adviser"). W I T N E S S E T H WHEREAS, the Board of Trustees (the "Board") of the Trust has selected the Adviser to act as investment adviser to the Trust on behalf of the series set forth on Schedule A to this Agreement (each a "Fund" and, collectively, the "Funds"), as such Schedule may be amended from time to time upon mutual agreement of the parties, and to provide certain related services, as more fully set forth below, and to perform such services under the terms and conditions hereinafter set forth; NOW, THEREFORE, in consideration of the mutual covenants and benefits set forth herein, the Trust and the Adviser do hereby agree as follows: 1. THE ADVISER'S SERVICES. (a) Discretionary Investment Management Services. The Adviser shall act as investment adviser with respect to the Funds. In such capacity, the Adviser shall, subject to the supervision of the Board, regularly provide the Funds with investment research, advice and supervision and shall furnish continuously an investment program for the Funds, consistent with the respective investment objectives and policies of each Fund. The Adviser shall determine, from time to time, what securities shall be purchased for the Funds, what securities shall be held or sold by the Funds and what portion of the Funds' assets shall be held uninvested in cash, subject always to the provisions of the Trust's Declaration of Trust, By-Laws and its registration statement on Form N-1A (the "Registration Statement") under the 1940 Act, and under the Securities Act of 1933, as amended (the "1933 Act"), covering Fund shares, as filed with the U.S. Securities and Exchange Commission (the "Commission"), and to the investment objectives, policies and restrictions of the Funds, as each of the same shall be from time to time in effect. To carry out such obligations, the Adviser shall exercise full discretion and act for the Funds in the same manner and with the same force and effect as the Funds themselves might or could do with respect to purchases, sales or other transactions, as well as with respect to all other such things necessary or incidental to the furtherance or conduct of such purchases, sales or other transactions. No reference in this Agreement to the Adviser having full discretionary authority over each Fund's investments shall in any way limit the right of the Board, in its sole discretion, to establish or revise policies in connection with the management of a Fund's assets or to otherwise exercise its right to control the overall management of a Fund. (b) Compliance. The Adviser agrees to comply with the requirements of the 1940 Act, the Investment Advisers Act of 1940 (the "Advisers Act"), the 1933 Act, the B-12 Securities Exchange Act of 1934, as amended (the "1934 Act"), the Commodity Exchange Act and the respective rules and regulations thereunder, as applicable, as well as with all other applicable federal and state laws, rules, regulations and case law that relate to the services and relationships described hereunder and to the conduct of its business as a registered investment adviser. The Adviser also agrees to comply with the objectives, policies and restrictions set forth in the Registration Statement, as amended or supplemented, of the Funds, and with any policies, guidelines, instructions and procedures approved by the Board and provided to the Adviser. In selecting each Fund's portfolio securities and performing the Adviser's obligations hereunder, the Adviser shall cause the Fund to comply with the diversification and source of income requirements of Subchapter M of the Internal Revenue Code of 1986, as amended (the "Code"), for qualification as a regulated investment company. The Adviser shall maintain compliance procedures that it reasonably believes are adequate to ensure its compliance with the foregoing. No supervisory activity undertaken by the Board shall limit the Adviser's full responsibility for any of the foregoing. (c) Proxy Voting. The Board has the authority to determine how proxies with respect to securities that are held by the Funds shall be voted, and the Board has initially determined to delegate the authority and responsibility to vote proxies for the Funds' securities to the Adviser. So long as proxy voting authority for the Funds has been delegated to the Adviser, the Adviser shall exercise its proxy voting responsibilities. The Adviser shall carry out such responsibility in accordance with any instructions that the Board shall provide from time to time, and at all times in a manner consistent with Rule 206(4)-6 under the Advisers Act and its fiduciary responsibilities to the Trust. The Adviser shall provide periodic reports and keep records relating to proxy voting as the Board may reasonably request or as may be necessary for the Funds to comply with the 1940 Act and other applicable law. Any such delegation of proxy voting responsibility to the Adviser may be revoked or modified by the Board at any time. (d) Recordkeeping. The Adviser shall not be responsible for the provision of administrative, bookkeeping or accounting services to the Funds, except as otherwise provided herein or as may be necessary for the Adviser to supply to the Trust or its Board the information required to be supplied under this Agreement. The Adviser shall maintain separate books and detailed records of all matters pertaining to Fund assets advised by the Adviser required by Rule 31a-1 under the 1940 Act (other than those records being maintained by any administrator, custodian or transfer agent appointed by the Funds) relating to its responsibilities provided hereunder with respect to the Funds, and shall preserve such records for the periods and in a manner prescribed therefore by Rule 31a-2 under the 1940 Act (the "Fund Books and Records"). The Fund Books and Records shall be available to the Board at any time upon request, shall be delivered to the Trust upon the termination of this Agreement and shall be available without delay during any day the Trust is open for business. (e) Holdings Information and Pricing. The Adviser shall provide regular reports regarding Fund holdings, and shall, on its own initiative, furnish the Trust and its Board from time to time with whatever information the Adviser believes is appropriate for this B-13 purpose. The Adviser agrees to immediately notify the Trust if the Adviser reasonably believes that the value of any security held by a Fund may not reflect fair value. The Adviser agrees to provide any pricing information of which the Adviser is aware to the Trust, its Board and/or any Fund pricing agent to assist in the determination of the fair value of any Fund holdings for which market quotations are not readily available or as otherwise required in accordance with the 1940 Act or the Trust's valuation procedures for the purpose of calculating the Fund net asset value in accordance with procedures and methods established by the Board. (f) Cooperation with Agents of the Trust. The Adviser agrees to cooperate with and provide reasonable assistance to the Trust, any Trust custodian or foreign sub- custodians, any Trust pricing agents and all other agents and representatives of the Trust, such information with respect to the Funds as they may reasonably request from time to time in the performance of their obligations, provide prompt responses to reasonable requests made by such persons and establish appropriate interfaces with each so as to promote the efficient exchange of information and compliance with applicable laws and regulations. 2. CODE OF ETHICS. The Adviser has adopted a written code of ethics that it reasonably believes complies with the requirements of Rule 17j-1 under the 1940 Act, which it will provide to the Trust. The Adviser shall ensure that its Access Persons (as defined in the Adviser's Code of Ethics) comply in all material respects with the Adviser's Code of Ethics, as in effect from time to time. Upon request, the Adviser shall provide the Trust with a (i) a copy of the Adviser's current Code of Ethics, as in effect from time to time, and (ii) certification that it has adopted procedures reasonably necessary to prevent Access Persons from engaging in any conduct prohibited by the Adviser's Code of Ethics. Annually, the Adviser shall furnish a written report, which complies with the requirements of Rule 17j-1, concerning the Adviser's Code of Ethics to the Trust. The Adviser shall respond to requests for information from the Trust as to violations of the Code of Ethics by Access Persons and the sanctions imposed by the Adviser. The Adviser shall immediately notify the Trust of any material violation of the Code of Ethics, whether or not such violation relates to a security held by any Fund. 3. INFORMATION AND REPORTING. The Adviser shall provide the Trust and its respective officers with such periodic reports concerning the obligations the Adviser has assumed under this Agreement as the Trust may from time to time reasonably request. (a) Notification of Breach/Compliance Reports. The Adviser shall notify the Trust immediately upon detection of (i) any material failure to manage any Fund in accordance with its investment objectives and policies or any applicable law; or (ii) any material breach of the Funds' or the Adviser's policies, guidelines or procedures. In addition, the Adviser shall provide a quarterly report regarding each Fund's compliance with its investment objectives and policies, applicable law, including, but not limited to the 1940 Act and Subchapter M of the Code, and the Fund's policies, guidelines or procedures as applicable to the Adviser's obligations under this Agreement. The Adviser agrees to correct any such failure promptly and to take any action that the Board may reasonably request in connection with any such breach. Upon request, the Adviser shall also provide the officers of the Trust with supporting certifications in connection with such certifications of Fund financial statements and disclosure controls pursuant to the B-14 Sarbanes-Oxley Act. The Adviser will promptly notify the Trust in the event (i) the Adviser is served or otherwise receives notice of any action, suit, proceeding, inquiry or investigation, at law or in equity, before or by any court, public board, or body, involving the affairs of the Trust (excluding class action suits in which a Fund is a member of the plaintiff class by reason of the Fund's ownership of shares in the defendant) or the compliance by the Adviser with the federal or state securities laws or (ii) an actual change in control of the Adviser resulting in an "assignment" (as defined in the 1940 Act) has occurred or is otherwise proposed to occur. (b) Board and Filings Information. The Adviser will also provide the Trust with any information reasonably requested regarding its management of the Funds required for any meeting of the Board, or for any shareholder report, amended registration statement, proxy statement, or prospectus supplement to be filed by the Trust with the Commission. The Adviser will make its officers and employees available to meet with the Board from time to time on due notice to review its investment management services to the Funds in light of current and prospective economic and market conditions and shall furnish to the Board such information as may reasonably be necessary in order for the Board to evaluate this Agreement or any proposed amendments thereto. (c) Transaction Information. The Adviser shall furnish to the Trust such information concerning portfolio transactions as may be necessary to enable the Trust or its designated agent to perform such compliance testing on the Funds and the Adviser's services as the Trust may, in its sole discretion, determine to be appropriate. The provision of such information by the Adviser to the Trust or its designated agent in no way relieves the Adviser of its own responsibilities under this Agreement. 4. BROKERAGE. (a) Principal Transactions. In connection with purchases or sales of securities for the account of a Fund, neither the Adviser nor any of its directors, officers or employees will act as a principal or agent or receive any commission except as permitted by the 1940 Act. (b) Placement of Orders. The Adviser shall arrange for the placing of all orders for the purchase and sale of securities for a Fund's account with brokers or dealers selected by the Adviser. In the selection of such brokers or dealers and the placing of such orders, the Adviser is directed at all times to seek for the Fund the most favorable execution and net price available under the circumstances. It is also understood that it is desirable for the Fund that the Adviser have access to brokerage and research services provided by brokers who may execute brokerage transactions at a higher cost to the Fund than may result when allocating brokerage to other brokers, consistent with section 28(e) of the 1934 Act and any Commission staff interpretations thereof. Therefore, the Adviser is authorized to place orders for the purchase and sale of securities for a Fund with such brokers, subject to review by the Board from time to time with respect to the extent and continuation of this practice. It is understood that the services provided by such brokers may be useful to the Adviser in connection with its or its affiliates' services to other clients. B-15 (c) Aggregated Transactions. On occasions when the Adviser deems the purchase or sale of a security to be in the best interest of a Fund as well as other clients of the Adviser, the Adviser may, to the extent permitted by applicable law and regulations, aggregate the order for securities to be sold or purchased. In such event, the Adviser will allocate securities or futures contracts so purchased or sold, as well as the expenses incurred in the transaction, in the manner the Adviser reasonably considers to be equitable and consistent with its fiduciary obligations to the Fund and to such other clients under the circumstances. (d) Affiliated Brokers. The Adviser or any of its affiliates may act as broker in connection with the purchase or sale of securities or other investments for a Fund, subject to: (a) the requirement that the Adviser seek to obtain best execution and price within the policy guidelines determined by the Board and set forth in the Fund's current prospectus and SAI; (b) the provisions of the 1940 Act; (c) the provisions of the Advisers Act; (d) the provisions of the 1934 Act; and (e) other provisions of applicable law. These brokerage services are not within the scope of the duties of the Adviser under this Agreement. Subject to the requirements of applicable law and any procedures adopted by the Board, the Adviser or its affiliates may receive brokerage commissions, fees or other remuneration from a Fund for these services in addition to the Adviser's fees for services under this Agreement. 5. CUSTODY. Nothing in this Agreement shall permit the Adviser to take or receive physical possession of cash, securities or other investments of a Fund. 6. ALLOCATION OF CHARGES AND EXPENSES. The Adviser will bear its own costs of providing services hereunder. Other than as herein specifically indicated, the Adviser shall not be responsible for a Fund's expenses, including brokerage and other expenses incurred in placing orders for the purchase and sale of securities and other investment instruments. 7. Representations, Warranties and Covenants. (a) Properly Registered. The Adviser is registered as an investment adviser under the Advisers Act, and will remain so registered for the duration of this Agreement. The Adviser is not prohibited by the Advisers Act or the 1940 Act from performing the services contemplated by this Agreement, and to the best knowledge of the Adviser, there is no proceeding or investigation that is reasonably likely to result in the Adviser being prohibited from performing the services contemplated by this Agreement. The Adviser agrees to promptly notify the Trust of the occurrence of any event that would disqualify the Adviser from serving as an investment adviser to an investment company. The Adviser is in compliance in all material respects with all applicable federal and state law in connection with its investment management operations. (b) ADV Disclosure. The Adviser has provided the Trust with a copy of its Form ADV as most recently filed with the Commission and will, promptly after filing any amendment to its Form ADV with the Commission, furnish a copy of such amendment(s) to the Trust. The information contained in the Adviser's Form ADV is accurate and complete in all material respects and does not omit to state any material fact necessary in B-16 order to make the statements made, in light of the circumstances under which they were made, not misleading. (c) Fund Disclosure Documents. The Adviser has reviewed and will in the future review, the Registration Statement, and any amendments or supplements thereto, the annual or semi-annual reports to shareholders, other reports filed with the Commission and any marketing material of the Funds (collectively the "Disclosure Documents") and represents and warrants that with respect to disclosure about the Adviser, the manner in which the Adviser manages the Funds or information relating directly or indirectly to the Adviser, such Disclosure Documents contain or will contain, as of the date thereof, no untrue statement of any material fact and does not omit any statement of material fact which was required to be stated therein or necessary to make the statements contained therein not misleading. (d) Use of The Name "Rydex". The Adviser has the right to use the name "Rydex" in connection with its services to the Trust and that, subject to the terms set forth in Section 8 of this Agreement, the Trust shall have the right to use the name "Rydex" in connection with the management and operation of the Funds. The Adviser is not aware of any threatened or existing actions, claims, litigation or proceedings that would adversely affect or prejudice the rights of the Adviser or the Trust to use the name "Rydex". (e) Insurance. The Adviser maintains errors and omissions insurance coverage in an appropriate amount and shall provide prior written notice to the Trust (i) of any material changes in its insurance policies or insurance coverage; or (ii) if any material claims will be made on its insurance policies. Furthermore, the Adviser shall upon reasonable request provide the Trust with any information it may reasonably require concerning the amount of or scope of such insurance. (f) No Detrimental Agreement. The Adviser represents and warrants that it has no arrangement or understanding with any party, other than the Trust, that would influence the decision of the Adviser with respect to its selection of securities for a Fund, and that all selections shall be done in accordance with what is in the best interest of the Fund. (g) Conflicts. The Adviser shall act honestly, in good faith and in the best interests of the Trust including requiring any of its personnel with knowledge of Fund activities to place the interest of the Funds first, ahead of their own interests, in all personal trading scenarios that may involve a conflict of interest with the Funds, consistent with its fiduciary duties under applicable law. (h) Representations. The representations and warranties in this Section 7 shall be deemed to be made on the date this Agreement is executed and at the time of delivery of the quarterly compliance report required by Section 3(a), whether or not specifically referenced in such report. 8. THE NAME "RYDEX". The Adviser grants to the Trust a license to use the name "Rydex" (the "Name") as part of the name of any Fund. The foregoing authorization by the Adviser to the Trust to use the Name as part of the name of any Fund is not exclusive of the right B-17 of the Adviser itself to use, or to authorize others to use, the Name; the Trust acknowledges and agrees that, as between the Trust and the Adviser, the Adviser has the right to use, or authorize others to use, the Name. The Trust shall (1) only use the Name in a manner consistent with uses approved by the Adviser; (2) use its best efforts to maintain the quality of the services offered using the Name; (3) adhere to such other specific quality control standards as the Adviser may from time to time promulgate. At the request of the Adviser, the Trust will (a) submit to Adviser representative samples of any promotional materials using the Name; and (b) change the name of any Fund within three months of its receipt of the Adviser's request, or such other shorter time period as may be required under the terms of a settlement agreement or court order, so as to eliminate all reference to the Name and will not thereafter transact any business using the Name in the name of any Fund; provided, however, that the Trust may continue to use beyond such date any supplies of prospectuses, marketing materials and similar documents that the Trust had at the date of such name change in quantities not exceeding those historically produced and used in connection with such Fund. 9. ADVISER'S COMPENSATION. The Funds shall pay to the Adviser, as compensation for the Adviser's services hereunder, a fee, determined as described in Schedule A that is attached hereto and made a part hereof. Such fee shall be computed daily and paid not less than monthly in arrears by the Funds. The method for determining net assets of a Fund for purposes hereof shall be the same as the method for determining net assets for purposes of establishing the offering and redemption prices of Fund shares as described in the Funds' prospectus(es). In the event of termination of this Agreement, the fee provided in this Section shall be computed on the basis of the period ending on the last business day on which this Agreement is in effect subject to a pro rata adjustment based on the number of days elapsed in the current month as a percentage of the total number of days in such month. 10. INDEPENDENT CONTRACTOR. In the performance of its duties hereunder, the Adviser is and shall be an independent contractor and, unless otherwise expressly provided herein or otherwise authorized in writing, shall have no authority to act for or represent the Trust or any Fund in any way or otherwise be deemed to be an agent of the Trust or any Fund. If any occasion should arise in which the Adviser gives any advice to its clients concerning the shares of a Fund, the Adviser will act solely as investment counsel for such clients and not in any way on behalf of the Fund. 11. ASSIGNMENT AND AMENDMENTS. This Agreement shall automatically terminate, without the payment of any penalty, in the event of its assignment (as defined in section 2(a)(4) of the 1940 Act); provided that such termination shall not relieve the Adviser of any liability incurred hereunder. This Agreement may not be added to or changed orally and may not be modified or rescinded except by a writing signed by the parties hereto and in accordance with the 1940 Act, when applicable. B-18 12. Duration and Termination. (a) This Agreement shall become effective as of the date executed and shall remain in full force and effect continually thereafter, subject to renewal as provided in Section 12(d) and unless terminated automatically as set forth in Section 11 hereof or until terminated as follows: (b) The Trust may cause this Agreement to terminate either (i) by vote of its Board or (ii) with respect to any Fund, upon the affirmative vote of a majority of the outstanding voting securities of the Fund; or (c) The Adviser may at any time terminate this Agreement by not more than sixty (60) days' nor less than thirty (30) days' written notice delivered or mailed by registered mail, postage prepaid, to the Trust; or (d) This Agreement shall automatically terminate two years from the date of its execution unless its renewal is specifically approved at least annually thereafter by (i) a majority vote of the Trustees, including a majority vote of such Trustees who are not interested persons of the Trust or the Adviser, at a meeting called for the purpose of voting on such approval; or (ii) the vote of a majority of the outstanding voting securities of each Fund; provided, however, that if the continuance of this Agreement is submitted to the shareholders of the Funds for their approval and such shareholders fail to approve such continuance of this Agreement as provided herein, the Adviser may continue to serve hereunder as to the Funds in a manner consistent with the 1940 Act and the rules and regulations thereunder; and Termination of this Agreement pursuant to this Section shall be without payment of any penalty. In the event of termination of this Agreement for any reason, the Adviser shall, immediately upon notice of termination or on such later date as may be specified in such notice, cease all activity on behalf of the Funds and with respect to any of their assets, except as otherwise required by any fiduciary duties of the Adviser under applicable law. In addition, the Adviser shall deliver the Fund Books and Records to the Trust by such means and in accordance with such schedule as the Trust shall direct and shall otherwise cooperate, as reasonably directed by the Trust, in the transition of portfolio asset management to any successor of the Adviser. 13. CERTAIN DEFINITIONS. For the purposes of this Agreement: (a) "Affirmative vote of a majority of the outstanding voting securities of the Fund" shall have the meaning as set forth in the 1940 Act, subject, however, to such exemptions as may be granted by the Commission under the 1940 Act or any interpretations of the Commission staff. (b) "Interested persons" and "Assignment" shall have their respective meanings as set forth in the 1940 Act, subject, however, to such exemptions as may be granted by the Commission under the 1940 Act or any interpretations of the Commission staff. 14. LIABILITY OF THE ADVISER. The Adviser shall indemnify and hold harmless the Trust and all affiliated persons thereof (within the meaning of Section 2(a)(3) of the 1940 Act) and all controlling persons (as described in Section 15 of the 1933 Act) (collectively, the "Adviser Indemnitees") against any and all losses, claims, damages, liabilities or litigation B-19 (including reasonable legal and other expenses) by reason of or arising out of: (a) the Adviser being in material violation of any applicable federal or state law, rule or regulation or any investment policy or restriction set forth in the Funds' Registration Statement or any written guidelines or instruction provided in writing by the Board, (b) a Fund's failure to satisfy the diversification or source of income requirements of Subchapter M of the Code, or (c) the Adviser's willful misfeasance, bad faith or gross negligence generally in the performance of its duties hereunder or its reckless disregard of its obligations and duties under this Agreement. 15. ENFORCEABILITY. Any term or provision of this Agreement which is invalid or unenforceable in any jurisdiction shall, as to such jurisdiction be ineffective to the extent of such invalidity or unenforceability without rendering invalid or unenforceable the remaining terms or provisions of this Agreement or affecting the validity or enforceability of any of the terms or provisions of this Agreement in any other jurisdiction. 16. LIMITATION OF LIABILITY. The parties to this Agreement acknowledge and agree that all litigation arising hereunder, whether direct or indirect, and of any and every nature whatsoever shall be satisfied solely out of the assets of the affected Fund and that no Trustee, officer or holder of shares of beneficial interest of the Fund shall be personally liable for any of the foregoing liabilities. The Trust's Certificate of Trust, as amended from time to time, is on file in the Office of the Secretary of State of the State of Delaware. Such Certificate of Trust and the Trust's Declaration of Trust describe in detail the respective responsibilities and limitations on liability of the Trustees, officers, and holders of shares of beneficial interest. 17. JURISDICTION. This Agreement shall be governed by and construed in accordance with the substantive laws of state of Delaware and the Adviser consents to the jurisdiction of courts, both state and/or federal, in Delaware, with respect to any dispute under this Agreement. 18. PARAGRAPH HEADINGS. The headings of paragraphs contained in this Agreement are provided for convenience only, form no part of this Agreement and shall not affect its construction. 19. COUNTERPARTS. This Agreement may be executed simultaneously in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. IN WITNESS WHEREOF, the parties hereto have caused this instrument to be signed on their behalf by their duly authorized officers as of the date first above written. RYDEX DYNAMIC FUNDS, on behalf of each Fund listed on Schedule A By: __________________________________ Name: Richard M. Goldman Title: President B-20 SECURITY INVESTORS, LLC By: __________________________________ Name: Richard M. Goldman Title: Chief Executive Officer B-21 SCHEDULE A TO THE ADVISORY AGREEMENT DATED [ ], 2011 BETWEEN RYDEX DYNAMIC FUNDS AND SECURITY INVESTORS, LLC The Trust will pay to the Adviser as compensation for the Adviser's services rendered, a fee, computed daily at an annual rate based on the average daily net assets of the respective Fund in accordance the following fee schedule:
FUND RATE S&P 500 2x Strategy..................................................................... 0.90% Inverse S&P 500 2x Strategy ............................................................ 0.90% NASDAQ-100(R) 2x Strategy............................................................... 0.90% Inverse NASDAQ-100(R) 2x Strategy ...................................................... 0.90% Dow 2x Strategy......................................................................... 0.90% Inverse Dow 2x Strategy ................................................................ 0.90% Russell 2000(R) 2x Strategy............................................................. 0.90% Inverse Russell 2000(R) 2x Strategy .................................................... 0.90%
B-22 APPENDIX C INFORMATION REGARDING THE INVESTMENT ADVISORY AGREEMENTS AND FEES PAID TO THE INVESTMENT ADVISER AND AFFILIATES Security Investors, LLC, a Kansas limited liability company (the "Investment Adviser") currently serves as investment adviser to all series (collectively, the "Funds") of Rydex Series Funds ("RSF") and Rydex Dynamic Funds ("RDF") (collectively, the "Trusts") pursuant to investment advisory agreements between each of the Trusts, on behalf of its series, and the Investment Adviser. Rydex Fund Services, Inc. ("RFS") serves as the administrator, transfer agent and accounting services agent for the Funds. Rydex Distributors, LLC ("RDL") serves as principal underwriter to the Funds. RFS and RDL are affiliates of the Investment Adviser. The table below provides the following information: (i) the date on which each Fund's shareholders last approved the Fund's investment advisory agreement; (ii) the annual rate of management fees paid by each Fund to the Investment Adviser, stated as a percentage of that Fund's average daily net assets; (iii) the aggregate amount of management fees paid by each Fund to the Investment Adviser for the Fund's fiscal year ended March 31, 2011 for RSF (except as noted) and December 31, 2010 for RDF and RSF (except as noted); (iv) the amount of fees paid by each Fund to the Administrator for administrative and transfer agency services for the Fund during the Fund's fiscal year ended March 31, 2011 for RSF (except as noted) and December 31, 2010 for RDF and RSF (except as noted); (v) the amount of accounting service fees paid by each Fund to the Administrator for accounting services for the Fund during the Fund's fiscal year ended March 31, 2011 for RSF (except as noted) and December 31, 2010 for RDF and RSF (except as noted); and (vi) the amount of distribution (12b-1) fees paid by each RSF and RDF Fund during the Fund's fiscal year ended March 31, 2011 for RSF (except as noted) and December 31, 2010 for RDF and RSF (except as noted). C-1 RYDEX DYNAMIC FUNDS MANAGEMENT, ADMINISTRATIVE, AND ACCOUNTING FEES
MANAGEMENT FEES DATE OF LAST PAID TO ADMINISTRATIVE ACCOUNTING SHAREHOLDER MANAGEMENT INVESTMENT SERVICE FEES SERVICE FEES SERIES NAME APPROVAL FEES ADVISER PAID TO RFS PAID TO RFS -------------------------------------------------------------------------------------------------------------------------------- Dow 2x Strategy Fund 6/18/2010 0.90% $ 270,950 $ 75,264 $ 45,159 Inverse Dow 2x Strategy Fund 6/18/2010 0.90% $ 415,717 $ 115,477 $ 69,286 NASDAQ-100(R) 2x Strategy Fund 6/18/2010 0.90% $1,837,754 $ 510,487 $ 306,293 Inverse NASDAQ-100(R) 2x Strategy Fund 6/18/2010 0.90% $ 722,564 $ 200,712 $ 120,428 Russell 2000(R) 2x Strategy Fund 6/18/2010 0.90% $ 355,211 $ 98,669 $ 59,208 Inverse Russell 2000(R) 2x Strategy Fund 6/18/2010 0.90% $ 365,162 $ 101,434 $ 60,861 S&P 500 2x Strategy Fund 6/18/2010 0.90% $1,369,680 $ 380,467 $ 228,281 Inverse S&P 500 2x Strategy Fund 6/18/2010 0.90% $1,820,386 $ 505,662 $ 303,399
DISTRIBUTION FEES
A-CLASS C-CLASS H-CLASS SERIES NAME (0.25% 12b-1 FEE) (0.25% 12b-1 FEE) (0.25% 12b-1 FEE) ---------------------------------------------------------------------------------------------------------------- Dow 2x Strategy Fund $ 9,956 $ 36,394 $ 56,210 Inverse Dow 2x Strategy Fund $ 5,155 $ 21,294 $ 104,998 NASDAQ-100(R) 2x Strategy Fund $ 19,905 $ 180,450 $ 445,470 Inverse NASDAQ-100(R) 2x Strategy Fund $ 4,299 $ 55,020 $ 182,658 Russell 2000(R) 2x Strategy Fund $ 6,387 $ 21,168 $ 86,990 Inverse Russell 2000(R) 2x Strategy Fund $ 4,103 $ 35,926 $ 88,350 S&P 500 2x Strategy Fund $ 28,293 $ 168,115 $ 310,145 Inverse S&P 500 2x Strategy Fund $ 24,930 $ 115,314 $ 451,904
C-2 RYDEX SERIES FUNDS MANAGEMENT, ADMINISTRATIVE, AND ACCOUNTING FEES
DATE OF MANAGEMENT ADMINISTRATIVE ACCOUNTING LAST FEES PAID SERVICE FEES SERVICE FEES SHAREHOLDER MANAGEMENT TO INVESTMENT PAID PAID SERIES NAME APPROVAL FEES ADVISER TO RFS TO RFS -------------------------------------------------------------------------------------------------------------------------------- All-Asset Aggressive Strategy Fund 6/18/2010 0.00%(1) $ 0(1) $ 0(2) $ 0(2) All-Asset Conservative Strategy Fund 6/18/2010 0.00%(1) $ 0(1) $ 0(2) $ 0(2) All-Asset Moderate Strategy Fund 6/18/2010 0.00%(1) $ 0(1) $ 0(2) $ 0(2) Alternative Strategies Fund 5/19/2010 0.90% $ 24,707 $ 8,645 $ 3,458 Alternative Strategies Allocation Fund 6/18/2010 0.00%(1) $ 0(1) $ 0(2) $ 0(2) Banking Fund 6/18/2010 0.85% $ 163,421 $ 48,065 $ 19,226 Basic Materials Fund 6/18/2010 0.85% $ 885,645 $ 260,483 $ 104,192 Biotechnology Fund 6/18/2010 0.85% $ 535,192 $ 157,409 $ 62,963 Commodities Strategy Fund* 6/18/2010 0.75%(3) $ 263,603 $ 87,909 $ 35,163 Consumer Products Fund 6/18/2010 0.85% $ 735,452 $ 216,309 $ 86,523 Electronics Fund 6/18/2010 0.85% $ 254,842 $ 74,953 $ 29,981 Emerging Markets 2x Strategy Fund 8/25/2010 0.90% $ 12,414 $ 3,940 $ 1,576 Energy Fund 6/18/2010 0.85% $ 654,649 $ 192,543 $ 77,017 Energy Services Fund 6/18/2010 0.85% $ 929,437 $ 273,363 $ 109,345 Event Driven and Distressed Strategies Fund 5/19/2010 0.90% $ 70,815 $ 23,201 $ 9,280 Europe 1.25x Strategy Fund 6/18/2010 0.90% $ 185,738 $ 51,594 $ 20,637 Financial Services Fund 6/18/2010 0.85% $ 144,677 $ 42,552 $ 17,021 Government Long Bond 1.2x Strategy Fund 6/18/2010 0.50% $ 798,132 $ 319,256 $ 150,545 Health Care Fund 6/18/2010 0.85% $ 235,238 $ 69,188 $ 27,675 High Yield Strategy Fund 6/18/2010 0.75% $ 1,407,964 $ 469,321 $ 181,818 Internet Fund 6/18/2010 0.85% $ 808,473 $ 237,785 $ 95,113 Inverse Emerging Markets 2x Strategy Fund 5/19/2010 0.90% $ 9,183 $ 2,912 $ 1,164 Inverse Government Long Bond Strategy Fund 6/18/2010 0.90% $ 5,382,826 $ 1,495,228 $ 486,317 Inverse High Yield Strategy Fund 6/18/2010 0.75% $ 142,467 $ 47,489 $ 18,995 Inverse Mid-Cap Strategy Fund 6/18/2010 0.90% $ 37,641 $ 10,456 $ 4,182 Inverse NASDAQ-100(R) Strategy Fund 6/18/2010 0.90% $ 241,086 $ 66,968 $ 26,787
C-3
DATE OF MANAGEMENT ADMINISTRATIVE ACCOUNTING LAST FEES PAID SERVICE FEES SERVICE FEES SHAREHOLDER MANAGEMENT TO INVESTMENT PAID PAID SERIES NAME APPROVAL FEES ADVISER TO RFS TO RFS -------------------------------------------------------------------------------------------------------------------------------- Inverse Russell 2000(R) Strategy Fund 6/18/2010 0.90% $ 243,647 $ 67,680 $ 27,072 Inverse S&P 500 Strategy Fund 6/18/2010 0.90% $ 2,256,839 $ 626,899 $ 242,404 Japan 2x Strategy Fund 6/18/2010 0.75% $ 49,039 $ 16,347 $ 6,538 Leisure Fund 6/18/2010 0.85% $ 121,173 $ 35,639 $ 14,256 Long/Short Commodities Strategy Fund* 6/18/2010 0.90%(3) $ 1,542,411 $ 428,444 $ 170,624 Long Short Equity Strategy Fund 5/19/2010 0.90% $ 19,377 $ 6,424 $ 2,570 Long Short Interest Rate Strategy Fund 5/19/2010 0.75% $ 298,378 $ 99,459 $ 39,783 Managed Futures Strategy Fund* 6/18/2010 0.90%(3) $ 20,164,468 $ 5,567,658 $ 1,006,871 Mid-Cap 1.5x Strategy Fund 6/18/2010 0.90% $ 317,193 $ 88,109 $ 35,243 Multi-Hedge Strategies Fund* 6/18/2010 1.15%(3) $ 1,014,214 $ 0(2) $ 0(2) NASDAQ-100 Fund(R) 6/18/2010 0.75% $ 4,575,228 $ 1,525,076 $ 492,437 Nova Fund 6/18/2010 0.75% $ 529,891 $ 176,630 $ 70,651 Precious Metals Fund 6/18/2010 0.75% $ 1,785,811 $ 595,270 $ 234,116 Real Estate Fund 6/18/2010 0.85% $ 352,791 $ 103,762 $ 41,504 Retailing Fund 6/18/2010 0.85% $ 104,867 $ 30,843 $ 12,337 Russell 2000(R) 1.5x Strategy Fund 6/18/2010 0.90% $ 234,264 $ 65,073 $ 26,029 Russell 2000(R) Fund 6/18/2010 0.75% $ 174,718 $ 58,239 $ 23,296 S&P 500 Fund 6/18/2010 0.75% $ 1,209,099 $ 403,033 $ 160,721 S&P 500 Pure Growth Fund 6/18/2010 0.75% $ 372,809 $ 124,270 $ 49,707 S&P 500 Pure Value Fund 6/18/2010 0.75% $ 388,056 $ 129,352 $ 51,740 S&P MidCap 400 Pure Growth Fund 6/18/2010 0.75% $ 850,218 $ 283,406 $ 112,276 S&P MidCap 400 Pure Value Fund 6/18/2010 0.75% $ 514,279 $ 171,426 $ 68,562 S&P SmallCap 600 Pure Growth Fund 6/18/2010 0.75% $ 358,410 $ 119,470 $ 47,788 S&P SmallCap 600 Pure Value Fund 6/18/2010 0.75% $ 603,267 $ 201,089 $ 79,365 Strengthening Dollar 2x Strategy Fund 6/18/2010 0.90% $ 410,155 $ 113,932 $ 45,572 Technology Fund 6/18/2010 0.85% $ 365,317 $ 107,446 $ 42,978 Telecommunications Fund 6/18/2010 0.85% $ 111,533 $ 32,804 $ 13,121 Transportation Fund 6/18/2010 0.85% $ 195,474 $ 57,492 $ 22,997 U.S. Long Short Momentum Fund 6/18/2010 0.90% $ 1,546,882 $ 429,689 $ 171,874 U.S. Government Money Market Fund 6/18/2010 0.50% $ 6,592 $ 136,432 $ 423,667
C-4
DATE OF MANAGEMENT ADMINISTRATIVE ACCOUNTING LAST FEES PAID SERVICE FEES SERVICE FEES SHAREHOLDER MANAGEMENT TO INVESTMENT PAID PAID SERIES NAME APPROVAL FEES ADVISER TO RFS TO RFS -------------------------------------------------------------------------------------------------------------------------------- Utilities Fund 6/18/2010 0.85% $ 388,077 $ 114,140 $ 45,656 Weakening Dollar 2x Strategy Fund 6/18/2010 0.90% $ 321,462 $ 89,295 $ 35,718
* The Fund has a fiscal year end of December 31. (1) The Fund invests primarily in underlying funds (the "Underlying Funds"). The Investment Adviser receives an investment advisory fee for managing the Underlying Funds. The Underlying Funds pay a monthly investment advisory fee to the Investment Adviser for its services. The fee is based on the average net daily assets of each Underlying Fund and calculated at an annual rate for each Underlying Fund. For more information regarding the Underlying funds' investment advisory fees and expense limitations, please see the Prospectus and applicable sections of the Statement of Additional Information. The Funds benefit from the investment advisory services provided to the Underlying Funds and, as shareholders of those Underlying Funds, indirectly bear a proportionate share of those Underlying Funds' advisory fees. (2) The Investment Adviser has contractually agreed to pay all other expenses of the Fund, excluding Acquired Fund fees and expenses, interest expense and taxes (expected to be de minimis), brokerage commissions and other expenses connected with the execution of portfolio transactions and extraordinary expenses. (3) The Fund may invest up to 25% of its total assets in a wholly-owned and controlled Cayman Islands subsidiary (the "Subsidiary"). The Subsidiary has entered into a separate advisory agreement with the Investment Adviser for the management of the Subsidiary's portfolio pursuant to which the Subsidiary pays the Investment Adviser a management fee at the same rate that the Fund pays the Investment Adviser for services provided to the Fund. The Investment Adviser has contractually agreed to waive the management fee it receives from the Fund in an amount equal to the management fee paid to the Investment Adviser by the Subsidiary. This undertaking will continue in effect for so long as the Fund invests in the Subsidiary, and may not be terminated by the Investment Adviser unless the Investment Adviser first obtains the prior approval of the Fund's Board of Trustees for such termination. The management fees included in the table reflect the net management fees paid to the Investment Adviser by the Fund after the fee waiver. C-5 DISTRIBUTION FEES* (*For A-Class, C-Class, H-Class and Advisor Class shares. Investor Class shares and Investor 2 Class shares were not subject to distribution fees.)
SERIES NAME A-CLASS C-CLASS H-CLASS ADVISOR CLASS All-Asset Aggressive Strategy Fund $ 0 $ 49,896 $ 0 $ - All-Asset Conservative Strategy Fund $ 0 $ 70,417 $ 0 $ - All-Asset Moderate Strategy Fund $ 0 $ 135,183 $ 0 $ - Alternative Strategies Fund $ 5,878 $ 329 $ 2,666 $ - Alternative Strategies Allocation Fund $ 0 $ 35,385 $ 0 $ - Banking Fund $ 6,369 $ 34,655 $ - $ 6,108 Basic Materials Fund $ 28,273 $ 101,719 $ - $ 40,795 Biotechnology Fund $ 5,853 $ 35,685 $ - $ 28,557 Commodities Strategy Fund* $ 16,612 $ 49,430 $ 58,940 N/A Consumer Products Fund $ 13,922 $ 40,974 $ - $ 27,343 Electronics Fund $ 2,886 $ 16,184 $ - $ 6,934 Emerging Markets 2x Strategy Fund $ 83 $ 1,068 $ 3,591 $ - Energy Fund $ 13,430 $ 145,036 $ - $ 38,484 Energy Services Fund $ 33,636 $ 112,250 $ - $ 41,040 Europe 1.25x Strategy Fund $ 4,490 $ 10,296 $ 44,530 $ - Event Driven and Distressed Strategies Fund $ 15,805 $ 4,697 $ 6,189 $ - Financial Services Fund $ 3,528 $ 14,905 $ - $ 13,615 Government Long Bond 1.2x Strategy Fund $ 9,683 $ 109,419 $ - $ 155,455 Health Care Fund $ 3,883 $ 37,766 $ - $ 11,608 High Yield Strategy Fund $ 21,622 $ 67,617 $ 430,795 $ - Internet Fund $ 3,250 $ 15,527 $ - $ 13,006 Inverse Emerging Markets 2x Strategy Fund $ 25 $ 938 $ 2,652 $ - Inverse Government Long Bond Strategy Fund $ 178,979 $ 1,147,960 $ - $ 280,127 Inverse High Yield Strategy Fund $ 8,146 $ 18,869 $ 34,625 $ - Inverse Mid-Cap Strategy Fund $ 1,109 $ 4,501 $ 8,221 $ - Inverse NASDAQ-100(R) Strategy Fund $ 2,654 $ 17,199 $ - $ 3,618 Inverse Russell 2000(R) Strategy Fund $ 4,429 $ 19,066 $ 58,484 $ - Inverse S&P 500 Strategy Fund $ 49,444 $ 159,338 $ - $ 92,097 Japan 2x Strategy Fund $ 2,093 $ 2,685 $ 13,582 $ - Leisure Fund $ 2,867 $ 9,954 $ - $ 6,081
C-6
SERIES NAME A-CLASS C-CLASS H-CLASS ADVISOR CLASS Long/Short Commodities Strategy Fund* $ 92,942 $ 103,403 $ 256,324 N/A Long Short Equity Strategy Fund $ 3,962 $ 892 $ 2,210 $ - Long Short Interest Rate Strategy Fund $ 37,242 $ 38,587 $ 40,934 $ - Managed Futures Strategy Fund* $ 1,599,233 $ 1,904,728 $ 3,228,581 N/A Mid-Cap 1.5x Strategy Fund $ 2,934 $ 47,851 $ 73,212 $ - Multi-Hedge Strategies Fund* $ 41,486 $ 178,187 $ 132,545 N/A NASDAQ-100(R) Fund $ 28,678 $ 114,350 $ - $ 203,173 Nova Fund $ 8,415 $ 88,347 $ - $ 36,333 Precious Metals Fund $ 34,882 $ 334,166 $ - $ 114,807 Real Estate Fund $ 12,351 $ 21,400 $ 86,061 $ - Retailing Fund $ 2,290 $ 18,366 $ - $ 6,611 Russell 2000(R) 1.5x Strategy Fund $ 4,834 $ 23,921 $ 54,259 $ - Russell 2000(R) Fund $ 2,625 $ 49,787 $ 43,168 $ - S&P 500 Fund $ 40,436 $ 94,788 $ 338,900 $ - S&P 500 Pure Growth Fund $ 10,741 $ 70,910 $ 95,802 $ - S&P 500 Pure Value Fund $ 8,834 $ 29,168 $ 113,226 $ - S&P MidCap 400 Pure Growth Fund $ 18,395 $ 55,052 $ 251,248 $ - S&P MidCap 400 Pure Value Fund $ 12,275 $ 18,508 $ 154,524 $ - S&P SmallCap 600 Pure Growth Fund $ 5,454 $ 17,888 $ 109,544 $ - S&P SmallCap 600 Pure Value Fund $ 15,508 $ 47,650 $ 173,668 $ - Strengthening Dollar 2x Strategy Fund $ 21,163 $ 64,252 $ 76,706 $ - Technology Fund $ 5,342 $ 33,675 $ - $ 50,828 Telecommunications Fund $ 2,211 $ 17,421 $ - $ 3,831 Transportation Fund $ 4,973 $ 20,861 $ - $ 10,722 U.S. Government Money Market Fund $ 74,815 $ 659,962 $ - $ 1,252,940 U.S. Long Short Momentum Fund $ 73,421 $ 541,342 $ 220,933 $ - Utilities Fund $ 6,079 $ 52,973 $ - $ 15,681 Weakening Dollar 2x Strategy Fund $ 13,612 $ 45,282 $ 64,362 $ -
___________________ * The Fund has a fiscal year end of December 31. C-7 APPENDIX D TRUSTEES/MANAGERS AND OFFICERS OF THE INVESTMENT ADVISER MEMBER REPRESENTATIVE AND PRINCIPAL EXECUTIVE OFFICER OF SECURITY INVESTORS, LLC The business address of the member representative and principal executive officer is 805 King Farm Boulevard, Suite 600, Rockville, Maryland 20850.
NAME POSITION HELD WITH OTHER PRINCIPAL SECURITY INVESTORS, LLC OCCUPATION/POSITION -------------------------------------------------------------------------------------------------------------- Richard M. Goldman President, Chief Executive Officer Senior Vice President, Security Benefit and Member Representative Corporation; CEO, Security Benefit Asset Management Holdings, LLC; CEO, President and Manager Representative, Security Investors, LLC; CEO and Manager, Rydex Holdings, LLC; CEO, President, and Manager, Rydex Distributors, LLC; Manager, Rydex Fund Services, LLC; President and Trustee, Rydex Series Funds, Rydex ETF Trust, Rydex Dynamic Funds and Rydex Variable Trust; and President, Director and Chairman of the Board, Security Equity Fund, Security Income Fund, Security Large Cap Value Fund, Security Mid Cap Growth Fund and SBL Fund
TRUSTEES/OFFICERS OF THE FUNDS WHO HOLD POSITION(S) WITH SECURITY INVESTORS, LLC. The business address of each of the following persons is 805 King Farm Boulevard, Suite 600, Rockville, Maryland 20850.
NAME POSITION HELD WITH THE FUNDS POSITION HELD WITH SECURITY INVESTORS, LLC ---------------------------------------------------------------------------------------------------------------- Richard M. Goldman Trustee and President President, Chief Executive Officer and Member Representative Michael P. Byrum Vice President Senior Vice President Nick Bonos Vice President and Treasurer Senior Vice President Joanna M. Haigney Chief Compliance Officer and Senior Vice President and Chief Compliance Secretary Officer Joseph Arruda Assistant Treasurer Vice President Keith Fletcher Vice President Senior Vice President Amy Lee Vice President and Assistant Senior Vice President and Secretary Secretary
D-1 APPENDIX E ADVISORY FEE RATES OF FUNDS WITH SIMILAR INVESTMENT OBJECTIVES ADVISED BY SECURITY INVESTORS, LLC Each of the tables below lists the names of other mutual funds advised by Security Investors, LLC (the "Investment Adviser") with similar investment objectives as the Funds, and information concerning the Funds' and such other funds' net assets as of April 30, 2011 and the rate of compensation for the Investment Adviser for its services to the Funds and such other funds. series of rydex dynamic funds: ------------------------------
ANNUAL COMPENSATION TO THE INVESTMENT ADVISER NAME OF FUND SUBJECT TO THIS PROXY STATEMENT (AS A PERCENTAGE OF AVERAGE DAILY Name(s) of Other Fund(s) with Similar Objectives NET ASSETS) NET ASSETS (IN MILLIONS) ----------------------------------------------------------------------------------------------------------------------------------- DOW 2x STRATEGY FUND, A SERIES OF RYDEX DYNAMIC FUNDS 0.90% $ 39.19 Dow 2x Strategy Fund, a series of Rydex Variable Trust 0.90% $ 18.14 INVERSE DOW 2x STRATEGY FUND, A SERIES OF RYDEX DYNAMIC FUNDS 0.90% $ 37.93 Inverse Dow 2x Strategy Fund, a series of Rydex Variable Trust 0.90% $ 8.50 INVERSE NASDAQ-100 2x STRATEGY FUND, A SERIES OF RYDEX DYNAMIC FUNDS 0.90% $ 47.83 None N/A N/A INVERSE RUSSELL 2000 2x STRATEGY FUND, A SERIES OF RYDEX DYNAMIC FUNDS 0.90% $ 23.82 None N/A N/A INVERSE S&P 500 2x STRATEGY FUND, A SERIES OF RYDEX DYNAMIC FUNDS 0.90% $ 108.79 Rydex Inverse 2x S&P 500 ETF, a series of Rydex ETF Trust 0.70% 51.05 NASDAQ-100 2x STRATEGY FUND, A SERIES OF RYDEX DYNAMIC FUNDS 0.90% $ 288.39 NASDAQ-100 2x Strategy Fund, a series of Rydex Variable Trust 0.90% $ 33.22 RUSSELL 2000 2x STRATEGY FUND, A SERIES OF RYDEX DYNAMIC FUNDS 0.90% $ 68.85 Russell 2000 2x Strategy Fund, a series of Rydex Variable Trust 0.90% $ 6.35 S&P 500 2x STRATEGY FUND, A SERIES OF RYDEX DYNAMIC FUNDS 0.90% $ 151.74 S&P 500 2x Strategy Fund, a series of Rydex Variable Trust 0.90% $ 23.55 Rydex 2x S&P 500 ETF, a series of Rydex ETF Trust 0.70% $ 94.29
E-1 series of rydex series funds: -----------------------------
ANNUAL COMPENSATION TO THE INVESTMENT ADVISER NAME OF FUND SUBJECT TO THIS PROXY STATEMENT (AS A PERCENTAGE OF AVERAGE DAILY Name(s) of Other Fund(s) with Similar Objectives NET ASSETS) NET ASSETS (IN MILLIONS) ----------------------------------------------------------------------------------------------------------------------------------- ALL-ASSET AGGRESSIVE STRATEGY FUND, A SERIES OF RYDEX SERIES FUNDS 0.00%(1) $ 17.58 All-Asset Aggressive Strategy Fund, a series of Rydex 0.00%(1) $ 7.63 Variable Trust ALL-ASSET CONSERVATIVE STRATEGY FUND, A SERIES OF RYDEX 0.00%(1) $ 14.32 SERIES FUNDS All-Asset Conservative Strategy Fund, a series of Rydex 0.00%(1) $ 11.13 Variable Trust ALL-ASSET MODERATE STRATEGY FUND, A SERIES OF RYDEX 0.00%(1) $ 31.18 SERIES FUNDS All-Asset Moderate Strategy Fund, a series of Rydex Variable Trust 0.00%(1) $ 23.85 ALTERNATIVE STRATEGIES FUND, A SERIES OF RYDEX SERIES FUNDS 0.90 $ 4.04 None N/A N/A ALTERNATIVE STRATEGIES ALLOCATION FUND, A SERIES OF RYDEX 0.00%(1) $ 21.01 SERIES FUNDS Alternative Strategies Allocation Fund, a series of Rydex 0.00%(1) $ 7.44 Variable Trust BANKING FUND, A SERIES OF RYDEX SERIES FUNDS 0.85% $ 15.87 Banking Fund, a series of Rydex Variable Trust 0.85% $ 5.36 BASIC MATERIALS FUND, A SERIES OF RYDEX SERIES FUNDS 0.85% $ 124.08 Basic Materials Fund, a series of Rydex Variable Trust 0.85% $ 40.65 BIOTECHNOLOGY FUND, A SERIES OF RYDEX SERIES FUNDS 0.85% $ 105.50 Biotechnology Fund, a series of Rydex Variable Trust 0.85% $ 17.99 COMMODITIES STRATEGY FUND, A SERIES OF RYDEX SERIES 0.75%(2) $ 109.21 FUNDS Commodities Strategy Fund, a series of Rydex Variable Trust 0.75%(2) $ 23.60 CONSUMER PRODUCTS FUND, A SERIES OF RYDEX SERIES FUNDS 0.85% $ 74.07 Consumer Products Fund, a series of Rydex Variable Trust 0.85% $ 18.55
E-2
ANNUAL COMPENSATION TO THE INVESTMENT ADVISER NAME OF FUND SUBJECT TO THIS PROXY STATEMENT (AS A PERCENTAGE OF AVERAGE DAILY Name(s) of Other Fund(s) with Similar Objectives NET ASSETS) NET ASSETS (IN MILLIONS) ----------------------------------------------------------------------------------------------------------------------------------- ELECTRONICS FUND, A SERIES OF RYDEX SERIES FUNDS 0.85% $ 14.92 Electronics Fund, a series of Rydex Variable Trust 0.85% $ 10.86 EMERGING MARKETS 2x STRATEGY FUND, A SERIES OF RYDEX 0.90% $ 4.77 SERIES FUNDS None N/A N/A ENERGY FUND, A SERIES OF RYDEX SERIES FUNDS 0.85% $ 128.46 Energy Fund, a series of Rydex Variable Trust 0.85% $ 57.17 ENERGY SERVICES FUND, A SERIES OF RYDEX SERIES FUNDS 0.85% $ 224.73 Energy Services Fund, a series of Rydex Variable Trust 0.85% $ 55.34 EUROPE 1.25x STRATEGY FUND, A SERIES OF RYDEX SERIES 0.90% $ 32.84 FUNDS Europe 1.25x Strategy Fund, a series of Rydex Variable Trust 0.90% $ 12.19 EVENT DRIVEN AND DISTRESSED STRATEGIES FUND, A SERIES 0.90% $22.37 RYDEX SERIES FUNDS None N/A N/A FINANCIAL SERVICES FUND, A SERIES OF RYDEX SERIES FUNDS 0.85% $ 12.08 Financial Services Fund, a series of Rydex Variable Trust 0.85% $ 8.15 GOVERNMENT LONG BOND 1.2x STRATEGY FUND, A SERIES OF 0.50% $ 102.39 RYDEX SERIES FUNDS Government Long Bond 1.2x Strategy Fund, a series of Rydex 0.50% $ 15.66 Variable Trust HEALTH CARE FUND, A SERIES OF RYDEX SERIES FUNDS 0.85% $ 65.66 Health Care Fund, a series of Rydex Variable Trust 0.85% $ 19.25 HIGH YIELD STRATEGY FUND, A SERIES OF RYDEX SERIES FUNDS 0.75% $ 307.52 None N/A N/A INTERNET FUND, A SERIES OF RYDEX SERIES FUNDS 0.85% $ 28.70 Internet Fund, a series of Rydex Variable Trust 0.85% $ 11.34 INVERSE EMERGING MARKETS 2x STRATEGY FUND, A SERIES OF 0.90% $2.79 RYDEX SERIES FUNDS None N/A N/A
E-3
ANNUAL COMPENSATION TO THE INVESTMENT ADVISER NAME OF FUND SUBJECT TO THIS PROXY STATEMENT (AS A PERCENTAGE OF AVERAGE DAILY Name(s) of Other Fund(s) with Similar Objectives NET ASSETS) NET ASSETS (IN MILLIONS) ----------------------------------------------------------------------------------------------------------------------------------- INVERSE GOVERNMENT LONG BOND STRATEGY FUND, A SERIES 0.90% $ 617.94 OF RYDEX SERIES FUNDS Inverse Government Long Bond Strategy Fund, a series of 0.90% $ 18.71 Rydex Variable Trust INVERSE HIGH YIELD STRATEGY FUND, A SERIES OF RYDEX 0.75% $ 11.31 SERIES FUNDS None N/A N/A INVERSE MID-CAP STRATEGY FUND, A SERIES OF RYDEX SERIES 0.90% $ 2.28 FUNDS Inverse Mid-Cap Strategy Fund, a series of Rydex Variable 0.90% $ 1.17 Trust INVERSE NASDAQ-100 STRATEGY FUND, A SERIES OF RYDEX 0.90% $ 14.17 SERIES FUNDS Inverse NASDAQ-100 Strategy Fund, a series of Rydex 0.90% $ 5.73 Variable Trust INVERSE RUSSELL 2000 STRATEGY FUND, A SERIES OF RYDEX 0.90% $ 9.22 SERIES FUNDS Inverse Russell 2000 Strategy Fund, a series of Rydex 0.90% $ 3.15 Variable Trust INVERSE S&P 500 STRATEGY FUND, A SERIES OF RYDEX SERIES 0.90% $ 136.53 FUNDS Inverse S&P 500 Strategy Fund, a series of Rydex Variable 0.90% $ 14.23 Trust JAPAN 2x STRATEGY FUND, A SERIES OF RYDEX SERIES FUNDS 0.75% $ 13.84 Japan 2x Strategy Fund, a series of Rydex Variable Trust 0.75% $ 6.29 LEISURE FUND, A SERIES OF RYDEX SERIES FUNDS 0.85% $ 6.11 Leisure Fund, a series of Rydex Variable Trust 0.85% $ 9.26 LONG/SHORT COMMODITIES STRATEGY FUND, A SERIES OF 0.90%(2) $ 380.59 RYDEX SERIES FUNDS None N/A N/A LONG SHORT EQUITY STRATEGY FUND, A SERIES OF RYDEX 0.90% $ 7.23 SERIES FUNDS None N/A N/A LONG SHORT INTEREST RATE STRATEGY FUND, A SERIES OF RYDEX 0.75% $ 164.33 SERIES FUNDS None N/A N/A
E-4
ANNUAL COMPENSATION TO THE INVESTMENT ADVISER NAME OF FUND SUBJECT TO THIS PROXY STATEMENT (AS A PERCENTAGE OF AVERAGE DAILY Name(s) of Other Fund(s) with Similar Objectives NET ASSETS) NET ASSETS (IN MILLIONS) ----------------------------------------------------------------------------------------------------------------------------------- MANAGED FUTURES STRATEGY FUND, A SERIES OF RYDEX SERIES 0.90%(2) $ 2,583.87 FUNDS Managed Futures Strategy Fund, a series of Rydex Variable 0.90%(2) $ 16.67 Trust MID-CAP 1.5X STRATEGY FUND, A SERIES OF RYDEX SERIES 0.90% $ 56.79 FUNDS Mid-Cap 1.5x Strategy Fund, a series of Rydex Variable 0.90% $ 23.70 Trust MULTI-HEDGE STRATEGIES FUND, A SERIES OF RYDEX SERIES 1.15% $ 73.92 FUNDS Multi-Hedge Strategies Fund, a series of Rydex Variable 1.15%(2) $ 17.49 Trust NASDAQ-100 FUND, A SERIES OF RYDEX SERIES FUNDS 0.75% $ 648.00 NASDAQ-100 Fund, a series of Rydex Variable Trust 0.75% $ 52.92 NOVA FUND, A SERIES OF RYDEX SERIES FUNDS 0.75% $ 85.58 Nova Fund, a series of Rydex Variable Trust 0.75% $ 33.31 PRECIOUS METALS FUND, A SERIES OF RYDEX SERIES FUNDS 0.75% $ 243.13 Precious Metals Fund, a series of Rydex Variable Trust 0.75% $ 109.52 REAL ESTATE FUND, A SERIES OF RYDEX SERIES FUNDS 0.85% $ 24.86 Real Estate Fund, a series of Rydex Variable Trust 0.85% $ 26.88 RETAILING FUND, A SERIES OF RYDEX SERIES FUNDS 0.85% $ 11.76 Retailing Fund, a series of Rydex Variable Trust 0.85% $ 5.81 RUSSELL 2000 1.5x STRATEGY FUND, A SERIES OF RYDEX SERIES 0.90% $ 41.23 FUNDS Russell 2000 1.5x Strategy Fund, a series of Rydex Variable 0.90% $ 19.74 Trust RUSSELL 2000 FUND, A SERIES OF RYDEX SERIES FUNDS 0.75% $ 31.63 None N/A N/A S&P 500 FUND, A SERIES OF RYDEX SERIES FUNDS 0.75% $ 177.93 None N/A N/A S&P 500 PURE GROWTH FUND, A SERIES OF RYDEX SERIES 0.75% $ 47.33 FUNDS
E-5
ANNUAL COMPENSATION TO THE INVESTMENT ADVISER NAME OF FUND SUBJECT TO THIS PROXY STATEMENT (AS A PERCENTAGE OF AVERAGE DAILY Name(s) of Other Fund(s) with Similar Objectives NET ASSETS) NET ASSETS (IN MILLIONS) ----------------------------------------------------------------------------------------------------------------------------------- S&P 500 Pure Growth Fund, a series of Rydex Variable 0.75% $ 58.57 Trust Rydex S&P 500 Pure Growth ETF, a series of Rydex ETF 0.35% $ 264.65 Trust S&P 500 PURE VALUE FUND, A SERIES OF RYDEX SERIES FUNDS 0.75% $ 58.06 S&P 500 Pure Value Fund, a series of Rydex Variable Trust 0.75% $ 41.06 Rydex S&P 500 Pure Value ETF, a series of Rydex ETF 0.35% $ 112.93 Trust S&P MIDCAP 400 PURE GROWTH FUND, A SERIES OF RYDEX 0.75% $ 286.18 SERIES FUNDS S&P MidCap 400 Pure Growth Fund, a series of Rydex 0.75% $ 61.75 Variable Trust Rydex S&P MidCap 400 Pure Growth ETF, a series of Rydex 0.35% $ 670.63 ETF Trust S&P MIDCAP 400 PURE VALUE FUND, A SERIES OF RYDEX 0.75% $ 61.56 SERIES FUNDS S&P MidCap 400 Pure Value Fund, a series of Rydex 0.75% $ 24.09 Variable Trust Rydex S&P MidCap 400 Pure Value ETF, a series of Rydex 0.35% $ 60.16 ETF Trust S&P SMALLCAP 600 PURE GROWTH FUND, A SERIES OF RYDEX 0.75% $ 145.49 SERIES FUNDS S&P SmallCap 600 Pure Growth Fund, a series of Rydex 0.75% $ 32.10 Variable Trust Rydex S&P SmallCap 600 Pure Growth ETF, a series of 0.35% $ 35.19 Rydex ETF Trust S&P SMALLCAP 600 PURE VALUE FUND, A SERIES OF RYDEX 0.75% $ 26.90 SERIES FUNDs S&P SmallCap 600 Pure Value Fund, a series of Rydex 0.75% $ 17.31 Variable Trust Rydex S&P SmallCap 600 Pure Value ETF, a series of Rydex 0.35% $ 90.18 ETF Trust STRENGTHENING DOLLAR 2x STRATEGY FUND, A SERIES OF RYDEX 0.90% $ 26.71 SERIES FUNDS Strengthening Dollar 2x Strategy Fund, a series of Rydex 0.90% $ 2.77 Variable Trust TECHNOLOGY FUND, A SERIES OF RYDEX SERIES FUNDS 0.85% $ 82.93 Technology Fund, a series of Rydex Variable Trust 0.85% $ 19.90 TELECOMMUNICATIONS FUND, A SERIES OF RYDEX SERIES FUNDS 0.85% $ 12.85
E-6
ANNUAL COMPENSATION TO THE INVESTMENT ADVISER NAME OF FUND SUBJECT TO THIS PROXY STATEMENT (AS A PERCENTAGE OF AVERAGE DAILY Name(s) of Other Fund(s) with Similar Objectives NET ASSETS) NET ASSETS (IN MILLIONS) ----------------------------------------------------------------------------------------------------------------------------------- Telecommunications Fund, a series of Rydex Variable Trust 0.85% $ 5.76 TRANSPORTATION FUND, A SERIES OF RYDEX SERIES FUNDS 0.85% $ 15.35 Transportation Fund, a series of Rydex Variable Trust 0.85% $ 7.81 U.S. GOVERNMENT MONEY MARKET FUND, A SERIES OF RYDEX 0.50% $ 868.15 SERIES FUNDS U.S. Government Money Market Fund, a series of Rydex 0.50% $ 162.92 Variable Trust U.S. LONG SHORT MOMENTUM FUND, A SERIES OF RYDEX 0.90% $ 164.99 SERIES FUNDS U.S. Long Short Momentum Fund, a series of Rydex Variable 0.90% $ 53.25 Trust UTILITIES FUND, A SERIES OF RYDEX SERIES FUNDS 0.85% $ 21.87 Utilities Fund, a series of Rydex Variable Trust 0.85% $ 14.74 WEAKENING DOLLAR 2x STRATEGY FUND, A SERIES OF RYDEX 0.90% $ 38.23 SERIES FUNDS Weakening Dollar 2x Strategy Fund, a series of Rydex 0.90% $ 6.05 Variable Trust
The Investment Adviser did not reduce or waive its investment advisory fees for the period indicated. _________________________ 1 The Fund invests primarily in underlying funds (the "Underlying Funds"). The Investment Adviser receives an investment advisory fee for managing the Underlying Funds. The Underlying Funds pay a monthly investment advisory fee to the Investment Adviser for its services. The fee is based on the average net daily assets of each Underlying Fund and calculated at an annual rate for each Underlying Fund. For more information regarding the Underlying funds' investment advisory fees and expense limitations, please see the Prospectus and applicable sections of the Statement of Additional Information. The Funds benefit from the investment advisory services provided to the Underlying Funds and, as shareholders of those Underlying Funds, indirectly bear a proportionate share of those Underlying Funds' advisory fees. 2 The Fund may invest in a wholly-owned and controlled Cayman Islands subsidiary (the "Subsidiary"). The Subsidiary has entered into a separate advisory agreement with the Investment Adviser for the management of the Subsidiary's portfolio pursuant to which the Subsidiary pays the Investment Adviser a management fee at the same rate that the Fund pays the Investment Adviser for services provided to the Fund. The Investment Adviser has contractually agreed to waive the management fee it receives from the Fund in an amount equal to the management fee paid to the Investment Adviser by the Subsidiary. This undertaking will continue in effect for so long as the Fund invests in the Subsidiary, and may not be terminated by the Investment Adviser unless the Investment Adviser first obtains the prior approval of the Fund's Board of Trustees for such termination. The management fees included in the table reflect the net management fees paid to the Investment Adviser by the Fund after the fee waiver. E-7 APPENDIX F FORM OF NEW SUB-ADVISORY AGREEMENT WITH AMERICAN INDEPENDENCE FINANCIAL SERVICES, LLC AGREEMENT made this [ ] day of [ ], 2011 by and between Security Investors, LLC ("Adviser") and American Independence Financial Services, LLC (the "Sub-Adviser"); WHEREAS, the Rydex Series Funds (the "Trust"), a Delaware statutory trust, is an open-end, management investment company registered under the Investment Company Act of 1940, as amended ("1940 Act"), consisting of several series, including the Long Short Interest Rate Strategy Fund (the "Fund"), each having its own investment policies; and WHEREAS, the Trust has retained the Adviser to provide the Trust with business and asset management services, subject to the control of the Trust's Board of Trustees; WHEREAS, the Trust's agreement with the Adviser permits the Adviser to delegate to other parties certain of its asset management responsibilities; and WHEREAS, the Adviser desires to retain the Sub-Adviser to render certain research and investment management services to the Fund, and the Sub-Adviser desires to render such services; NOW THEREFORE, in consideration of mutual covenants herein contained, the parties hereto agree as follows: 1. (a) Duties of Sub-Adviser. The Adviser hereby retains the Sub-Adviser to act as research provider for and to provide certain investment advice for the management of the assets of the Fund, subject to the supervision of the Adviser and the Fund's Board of Trustees (the "Board") and subject to the terms of this Agreement. The Sub-Adviser hereby accepts such employment. In such capacity, the Sub-Adviser shall be responsible for the duties defined below. (i) The Sub-Adviser agrees to construct and provide the Adviser with the Long Short Treasury Strategy model in an electronic signal, forwarded to the Adviser on such intervals as determined by the Sub-Adviser (the "Signal"). The signal shall contain such information necessary for the Adviser to implement the Fund's strategy. Each Signal shall be delivered to the Adviser via electronic mail or such other form of communication as the parties mutually agree. (ii) The Sub-Adviser shall continuously monitor the performance of the Long Short Strategy model (the "Model") and will advise the Adviser of any necessary updates to the Model via a Signal. (iii) The Sub-Adviser will make available its officers and employees to meet with the Board at the Trust's principal place of business once each calendar year, on due notice to the Sub-Adviser, to review the Sub-Adviser's advice. F-1 (iv) The Sub-Adviser will maintain all books and records required to be maintained pursuant to the Investment Company Act of 1940 and the rules and regulations promulgated thereunder and shall timely furnish to the Adviser all information relating to the Sub-Adviser's services hereunder as reasonably requested by the Adviser. The Sub-Adviser further agrees that all books and records maintained hereunder, including those maintained in electronic formats, shall be made available to the Trust or the Adviser upon reasonable request and notice. (v) In all matters relating to the performance of this Agreement, the Sub-Adviser and its members, officers, partners, employees and interested persons shall act in all material respects in conformity with the Trust's Agreement and Declaration of Trust, By-Laws, and currently effective registration statement, and with the written instructions and directions of the Board and the Adviser, after receipt of such documents from the Trust, and shall comply in all material respects with the requirements of the 1940 Act, the Investment Advisers Act, the Commodity Exchange Act (the "CEA"), the rules thereunder, and all other applicable federal and state laws and regulations. In carrying out its obligations under this Agreement, the Sub-Adviser shall seek to ensure that, the Fund complies with all applicable statutes and regulations necessary to qualify the Fund as a Regulated Investment Company under Subchapter M of the Code (or any successor provision). (vi) The Sub-Adviser agrees to cooperate with the Adviser and the Fund and the Trust's officers and Trustees, including the Trust's Chief Compliance Officer ("CCO"), with respect to (i) compliance-related matters related to its responsibilities under this Agreement, and (ii) the Trust's reasonable efforts to assure that each of its service providers adopts and maintains policies and procedures that are reasonably designed to prevent violation of the Federal Securities Laws (as that term is defined by Rule 38a-1 under the 1940 Act). (vii) The Sub-Adviser agrees to cooperate in such marketing efforts of the Fund, as reasonably requested by the Adviser. (b) Duties of the Adviser. ---------------------- (i) During the term of this Agreement, the Adviser agrees to furnish the Sub-Adviser at the Sub-Adviser's principal office all materials, including registration statements, proxy statements, reports to stockholders, sales literature or other materials prepared for distribution to shareholders of the Fund or the public, that refer to the Sub-Adviser for Sub-Adviser's review and approval. The Sub-Adviser shall be deemed to have approved any such materials after 10 business days. The Adviser agrees to use its best efforts to ensure that materials prepared by its employees or agents or its affiliates that refer to the Sub-Adviser or its clients in any way are consistent with those materials previously approved by the Sub-Adviser. Sales literature may be furnished to the Sub-Adviser by first class or overnight mail, facsimile transmission equipment, email, or hand delivery. (ii) The Adviser has furnished the Sub-Adviser with copies of each of the following documents and will furnish the Sub-Adviser at its principal office all future amendments and supplements to such documents, if any, as soon as practicable after such documents become available: (i) the Trust's Agreement and Declaration of Trust, (ii) the Trust's By-Laws, (iii) the Fund's registration statement under the 1940 Act and the Securities Act as filed with the Securities and Exchange Commission (the "Commission"), and (iv) any written instructions of the Trust's Board or the Adviser. F-2 2. Compensation of the Sub-Adviser. For the services to be rendered by the Sub-Adviser as provided in Section 1(a) of this Agreement, the Adviser shall pay to the Sub-Adviser compensation at the rate specified in Schedule A attached hereto and made a part of this Agreement. Such compensation shall be paid to the Sub-Adviser quarterly in arrears. For purposes of calculating the compensation to be paid hereunder, the value of the net assets of the Fund shall be computed in the same manner at the end of the business day as the value of such net assets is computed in connection with the determination of the net asset value of the Fund's shares as described in the then current prospectus for the Fund. The Sub-Adviser's compensation shall be accrued for each calendar day the Sub-Adviser renders investment advisory services hereunder and the sum of the daily fee accruals shall be paid quarterly to the Sub-Adviser as soon as practicable following the last day of each calendar quarter, by wire transfer if so requested by the Sub-Adviser, but no later than ten (10) calendar days thereafter. If this Agreement shall be effective for only a portion of a quarter, then the Sub-Adviser's fee for said quarter shall be prorated for such portion. 3. Expenses. The Sub-Adviser shall bear all expenses incurred by it in connection with its services under this Agreement and may, from time to time, at its sole expense, employ or associate itself with such persons as it believes to be fitted to assist it in the execution of its duties hereunder. 4. Status of Sub-Adviser. The services of the Sub-Adviser to the Trust are not to be deemed exclusive, and the Sub-Adviser and its directors, officers, employees and affiliates shall be free to render investment advisory and administrative or other services to others (including other investment companies) and to engage in other activities so long as its services to the Trust are not impaired thereby. The Adviser understands that the Sub-Adviser provides investment advisory services to numerous other funds and accounts. The Sub-Adviser shall be deemed to be an independent contractor and shall, unless otherwise expressly provided or authorized, have no authority to act for or represent the Adviser or the Trust in any way or otherwise be deemed an agent of the Adviser or the Trust. 5. Representations and Warranties of Sub-Adviser. The Sub-Adviser represents and warrants to the Adviser and the Trust as follows: (a) The Sub-Adviser is registered with the Commission as an investment adviser under the Investment Advisers Act; (b) The Sub-Adviser will immediately notify the Adviser of the occurrence of any event that would disqualify the Sub-Adviser from serving as an investment adviser of an investment company pursuant to Section 9(a) of the 1940 Act; (c) The execution, delivery and performance by the Sub-Adviser of this Agreement are within the Sub-Adviser's powers and have been duly authorized by all necessary action on the part of its members, and no action by or in respect of, or filing with, any governmental body, agency or official is required on the part of the Sub-Adviser for the execution, delivery and performance by the Sub-Adviser of this Agreement, and the execution, delivery and performance by the Sub-Adviser of this Agreement do not contravene or constitute a default under (i) any provision of applicable law, rule or regulation, (ii) the Sub-Adviser's governing instruments, or (iii) any agreement, judgment, injunction, order, decree or other instrument binding upon the Sub-Adviser; F-3 (d) The Sub-Adviser has filed a notice of exemption pursuant to Rule 4.14 under the CEA with the Commodity Futures Trading Commission (the "CFTC") and the National Futures Association (the "NFA"); (e) This Agreement is a valid and binding agreement of the Sub- Adviser; (f) The Form ADV of the Sub-Adviser previously provided to the Adviser is a true and complete copy of the form as filed with the Commission and the information contained therein is accurate and complete in all material respects as of its filing date, and does not omit to state any material fact necessary in order to make the statements made, in light of the circumstances under which they were made, not misleading; and (g) The Sub-Adviser has implemented and shall maintain a compliance program in accordance with the requirements of Rule 206(4)-7 under the Advisers Act. 6. Representations and Warranties of Adviser. The Adviser represents and warrants to the Sub-Adviser as follows: (a) The Adviser is registered with the Commission as an investment adviser under the Investment Advisers Act; (b) The Adviser has filed a notice of exemption pursuant to Rule 4.14 under the CEA with the CFTC and the NFA; (c) The execution, delivery and performance by the Adviser of this Agreement and the Advisory Agreement are within the Adviser's powers and have been duly authorized by all necessary action on the part of its members, and no action by or in respect of, or filing with, any governmental body, agency or official is required on the part of the Adviser for the execution, delivery and performance by the Adviser of this Agreement, and the execution, delivery and performance by the Adviser of this Agreement do not contravene or constitute a default under (i) any provision of applicable law, rule or regulation, (ii) the Adviser's governing instruments, or (iii) any agreement, judgment, injunction, order, decree or other instrument binding upon the Adviser; (d) The Form ADV of the Adviser previously provided to the Sub- Adviser is a true and complete copy of the form filed with the Commission and the information contained therein is accurate and complete in all material respects as of its filing date and does not omit to state any material fact necessary in order to make the statements made, in light of the circumstances under which they were made, not misleading; (e) This Agreement and the Advisory Agreement are valid and binding agreements of the Adviser; and (f) The Adviser acknowledges that it received a copy of the Sub- Adviser's Form ADV at least 48 hours prior to the execution of this Agreement 7. Survival of Representations and Warranties; Duty to Update Information. All representations and warranties made by the Sub-Adviser and the Adviser pursuant to Sections 5 and 6 F-4 hereof shall survive for the duration of this Agreement and either party hereto shall promptly notify the other in writing upon becoming aware that any of their foregoing representations or warranties is no longer true. 8. Liability of Sub-Adviser. No provision of this Agreement shall be deemed to protect the Sub-Adviser against any liability to the Trust or its shareholders to which it might otherwise be subject by reason of any willful misfeasance, bad faith, or gross negligence in the performance of its duties or the reckless disregard of its obligations under this Agreement. In the absence of willful misfeasance, bad faith or gross negligence on the part of the Sub-Adviser or reckless disregard of the Sub-Adviser's obligations and duties hereunder, the Sub-Adviser shall not be subject to any liability to the Adviser, to the Fund or the Trust, or any of the Fund's shareholders, for any act or omission in the case of, or connected with, rendering services hereunder. 9. Indemnification. The Sub-Adviser shall indemnify the Adviser and the Trust, and their respective officers and trustees, for any liability and expenses, including reasonable attorneys' fees, which may be sustained as a result of the Sub-Adviser's willful misfeasance, bad faith or gross negligence, or the reckless disregard of the Sub-Adviser's obligations and duties hereunder. The Adviser shall indemnify the Sub-Adviser and its officers and members for any liability and expenses, including reasonable attorneys' fees, which may be sustained as a result of the Sub-Adviser's performance of its obligations hereunder, except where such liability or expense results from the Sub-Adviser's willful misfeasance, bad faith or gross negligence, or the reckless disregard of the Sub-Adviser's obligations and duties hereunder. 10. Duration and Termination. This Agreement, unless sooner terminated as provided herein, shall continue for two years after its initial approval and thereafter for periods of one year for so long as such continuance thereafter is specifically approved at least annually (a) by the vote of a majority of those Trustees of the Trust who are not parties to this Agreement or interested persons of any such party, cast in person at a meeting called for the purpose of voting on such approval, and (b) by the Trustees of the Trust or by vote of a majority of the outstanding voting securities of the Fund; provided, however, that if the shareholders of the Fund fail to approve the Agreement as provided herein, the Sub-Adviser may continue to serve hereunder in the manner and to the extent permitted by the 1940 Act and rules thereunder. The foregoing requirement that continuance of this Agreement be "specifically approved at least annually" shall be construed in a manner consistent with the 1940 Act and the rules and regulations thereunder. This Agreement may be terminated at any time, without the payment of any penalty, by the Adviser, by vote of a majority of the Trustees of the Trust or by vote of a majority of the outstanding voting securities of the Fund on not less than 30 days' nor more than 60 days' written notice to the Sub- Adviser, or by the Sub-Adviser at any time without the payment of any penalty, on 60 days' written notice to the Adviser and the Trust. This Agreement will automatically and immediately terminate in the event of its assignment, or upon termination of the investment advisory agreement between the Adviser and the Trust. Any notice under this Agreement shall be given in writing, addressed and delivered, or mailed postpaid, to the other party at the primary office of such party, unless such party has previously designated another address. As used in this Section 10, the terms "assignment," "interested persons," and a "vote of a majority of the outstanding voting securities" shall have the respective meanings set forth in the 1940 F-5 Act and the rules and regulations thereunder, subject to such exemptions as may be granted by the Commission under said Act. 11. Amendment. No provision of this Agreement may be changed, waived, discharged, or terminated orally, but only by an instrument in writing signed by the party against which enforcement of the change, waiver, discharge, or termination is sought, and, no amendment of this Agreement shall be effective until approved by the Board and, solely to the extent required by the 1940 Act, regulations thereunder and/or interpretations thereof, the shareholders of the Fund. 12. Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of Delaware, without regard to its conflicts of law provisions, and the 1940 Act. To the extent that the applicable laws of the State of Delaware conflict with the applicable provisions of the 1940 Act, the latter shall control. 13. Counterparts. This Agreement may be executed in one or more counterparts, all of which shall together constitute one and the same instrument. 14. Captions. The captions herein are included for convenience of reference only and shall be ignored in the construction or interpretation hereof. 15. Severability. If any provision of this Agreement shall be held or made invalid by a court decision, statute, rule or otherwise, the remainder of this Agreement shall not be affected thereby. 16. Confidentiality. ---------------- (a) Each party agrees that it will treat confidentially all information provided by the other party regarding such other party's businesses and operations, including without limitation the investment activities or holdings of the Fund ("Confidential Information"). All Confidential Information provided by a party hereto shall be used only by the other party hereto solely for the purposes of rendering services pursuant to this Agreement, and shall not be disclosed to any third party without the prior consent of the providing party, except for any party that is under common control and except for a limited number of employees, attorneys, accountants and other advisers of the party receiving the information on a need-to-know basis and solely for the purposes of rendering services under this Agreement. (b) The foregoing Confidential Information shall not include any information that: (i) is public when provided or thereafter becomes public through no wrongful act of the recipient; (ii) is demonstrably known to the recipient prior to execution of this Agreement; (iii) is independently developed by the recipient through no wrongful act of the recipient in the ordinary course of business outside of this Agreement; (iv) is generally employed by the trade at the time that recipient learns of such information or knowledge, (v) has been rightfully and lawfully obtained by recipient from any third party; or (vi) is legally compelled to be disclosed by any regulatory authority in the lawful and appropriate exercise of its jurisdiction over a party, by any auditor of the parties hereto, by judicial or administrative process or otherwise by applicable laws, rules or regulations. (c) It is understood that any information or recommendation supplied by, or produced by, the Sub-Adviser in connection with the performance of its obligations hereunder is to be regarded by F-6 the Adviser and the Trust as confidential and for use only by the Adviser and the Fund. Furthermore, except as required by law (including, but not limited to semi-annual, annual or other filings made under the 1940 Act) or as agreed to by the Adviser and the Sub-Adviser, the Adviser and the Trust will not disclose, in any manner whatsoever except as expressly authorized in this Agreement, any list of securities held by the Fund for a period of at least 30 days after month end, except that the Fund's top 10 holdings may be disclosed 30 days after month end. In addition, the Adviser or the Trust may disclose, earlier than 30 days after month end, a list of the securities held by the Fund to certain third parties who have entered into a confidentiality agreement with the Trust. A copy of the Declaration of Trust of the Trust is on file with the Secretary of the State of Delaware, and notice is hereby given that this instrument is not binding upon any of the Trustees, officers, or shareholders of the Trust individually. IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed as of the day and year first written above. SECURITY INVESTORS, LLC By: _______________________________________ Name: Richard Goldman Title: President Attest: _______________________________________ Name: Michael Byrum Title: Secretary AMERICAN INDEPENDENCE FINANCIAL SERVICES, LLC By: _______________________________________ Name: Title: President Attest: _______________________________________ Name: Title: Secretary F-7 SCHEDULE A TO THE SUB-ADVISER AGREEMENT BETWEEN SECURITY INVESTORS, LLC AND AMERICAN INDEPENDENCE FINANCIAL SERVICES, LLC FOR THE LONG SHORT INTEREST RATE STRATEGY FUND The Adviser shall pay compensation to the Sub-Adviser pursuant to section 2 of the Sub-Adviser Agreement between said parties in accordance with the following annual percentage rate: Long Short Interest Rate Strategy Fund: 0.20% per annum (net of waivers and reimbursements) DATED: [ ] F-8 APPENDIX G INFORMATION REGARDING THE SUB-ADVISORY AGREEMENT WITH AMERICAN INDEPENDENCE FINANCIAL SERVICES, LLC AND FEES PAID TO THE SUB-ADVISER American Independence Financial Services, LLC (the "Sub-Adviser") currently serves as sub-adviser to the Long Short Interest Rate Strategy Fund, a series of Rydex Series Funds (the "Fund"), pursuant to the investment sub-advisory agreement between Security Investors, LLC, the Fund's investment adviser (the "Investment Adviser"), and the Sub-Adviser. The table below provides the following information: (i) the date of the Sub-Advisory Agreement; (ii) the date on which the Fund's shareholders last approved the Fund's Sub-Advisory Agreement; (iii) the annual rate of sub-advisory fees paid by the Investment Adviser to the Sub-Adviser for the Sub-Adviser's sub-advisory services to the Fund; and (iv) the aggregate amount of advisory fees paid by the Investment Adviser to the Sub-Adviser for the Sub-Adviser's sub-advisory services to the Fund during the Fund's fiscal year ended December 31, 2010.
DATE OF DATE OF LAST SUB-ADVISORY SUB-ADVISORY SHAREHOLDER SUB-ADVISORY FEES PAID TO FUND AGREEMENT APPROVAL FEES SUB-ADVISER -------------------------------------------------------------------------------------------------------------------- ~~Long Short Interest Rate Strategy Fund 8/1/2010 6/30/2010 0.20% $24,193.83~~
G-1 APPENDIX H DIRECTORS/TRUSTEES/MANAGERS AND OFFICERS OF AMERICAN INDEPENDENCE FINANCIAL SERVICES, LLC MANAGERS AND PRINCIPAL EXECUTIVE OFFICERS OF AMERICAN INDEPENDENCE FINANCIAL SERVICES, LLC. The business address of the managers and principal executive officers is 335 Madison Avenue, Mezzanine, New York, New York 10017.
POSITION HELD WITH AMERICAN OTHER PRINCIPAL NAME INDEPENDENCE FINANCIAL SERVICES, LLC OCCUPATION/POSITION ----------------------------------------------------------------------------------------- Theresa C. Donavan Chief Compliance Officer None Robert A. Campbell Vice President None T. Kirkham Barneby Chief Strategist and Portfolio Manager None Emil A. Polito Senior Executive Director - Global Wealth None Management & Management & Strategic Development Jeffrey A. Miller President of Value Equities None Eric M. Rubin President None John J. Pileggi Managing Partner None
There are no Trustees/Officers of the Fund who hold position(s) with American Independence Financial Services, LLC. H-1 APPENDIX I ADVISORY FEE RATES OF FUNDS WITH SIMILAR INVESTMENT OBJECTIVES ADVISED BY AMERICAN INDEPENDENCE FINANCIAL SERVICES, LLC Each of the tables below lists the names of other mutual funds advised or sub-advised by American Independence Financial Services, LLC ("AIFS") with similar investment objectives as the Long Short Interest Rate Strategy Fund (the "Fund"), and information concerning the Fund's and such other funds' net assets and the rate of compensation for AIFS for its services to the Fund and such other funds.
ANNUAL COMPENSATION TO AIFS (AS A PERCENTAGE OF NAME OF FUND SUBJECT TO THIS PROXY STATEMENT AVERAGE DAILY NET ASSETS Name(s) of Other Fund(s) with Similar Objectives NET ASSETS) (IN MILLIONS) -------------------------------------------------------------------------------------------- ~~LONG SHORT INTEREST RATE STRATEGY FUND, A SERIES OF 0.20% $ 164.3 RYDEX SERIES FUNDS American Independence Bull Bear Fund 0.50% $ 40~~
I-1 APPENDIX J OUTSTANDING SHARES AS of the Record Date, the total number of shares outstanding for each Fund is set forth in the table below: RYDEX DYNAMIC FUNDS:
SHARES OUTSTANDING -------------------------------------------------------- FUND A-CLASS C-CLASS H-CLASS TOTAL ----------------------------------------------------------------------------------------------------- Dow 2x Strategy Fund 164096.86 112275.19 2083705.60 2360077.65 Inverse Dow 2x Strategy Fund 86420.89 107457.64 914812.17 1108690.70 Inverse NASDAQ-100(R) 2x Strategy Fund 272844.85 1323731.19 12832225.16 14428801.21 Inverse Russell 2000(R) 2x Strategy Fund 258674.34 418113.66 7478720.27 8155508.28 Inverse S&P 500 2x Strategy Fund 655597.86 739626.77 10314628.16 11709852.78 NASDAQ-100(R) 2x Strategy Fund 38434.95 127602.60 1167481.86 1333519.41 Russell 2000(R) 2x Strategy Fund 17680.02 9174.02 217262.17 244116.21 S&P 500 2x Strategy Fund 285173.27 559776.46 3346872.82 4191822.55
RYDEX SERIES FUNDS (U.S. Government Money Market Fund)
SHARES OUTSTANDING ---------------------------------------------------------------------------------------------------------- A-CLASS C-CLASS ADVISOR CLASS INVESTOR CLASS INVESTOR 2 CLASS TOTAL ---------------------------------------------------------------------------------------------------------- 39738256.99 59746372.03 891585341.87 903067385.84 43697786.78 1937835143.51 ----------------------------------------------------------------------------------------------------------
RYDEX SERIES FUNDS (Alternative Strategies Fund, Event Driven and Distressed Strategies Fund, Long/ Short Commodities Strategy Fund, Long Short Equity Strategy Fund, Long Short Internet Rate Strategy Fund, Managed Futures Strategy Fund and Multi-Hedge Strategies Fund)
SHARES OUTSTANDING -------------------------------------------------------------------------------------------------------------------------- FUND A-CLASS C-CLASS H-CLASS INSTITUTIONAL CLASS Y-CLASS TOTAL -------------------------------------------------------------------------------------------------------------------------- Alternative Strategies Fund 92359.15 5891.43 48258.24 1200.04 N/A 147708.86 Event Driven and Distressed Strategies Fund 287658.17 50175.81 291364.55 8709.28 N/A 637907.82 Long/Short Commodities Strategy Fund 4288980.36 1345884.97 8653108.77 1150530.09 416.50 15438920.69 Long Short Equity Strategy Fund 146197.16 8176.97 70746.15 4597.85 N/A 229718.14 Long Short Internet Rate Strategy Fund 1674985.73 743652.32 1476097.38 1605970.54 N/A 5500705.97 Managed Futures Strategy Fund 26793857.75 4780573.64 41435734.15 4407577.20 16398546.17 93816288.91 Multi-Hedge Strategies Fund 602237.90 502361.70 1234933.79 13189.67 N/A 2352723.06
RYDEX SERIES FUNDS (all other series)
SHARES OUTSTANDING ------------------------------------------------------------------------------- FUND A-CLASS C-CLASS H-CLASS ADVISOR CLASS INVESTOR CLASS TOTAL ------------------------------------------------------------------------------------------------------------------------ All-Asset Aggressive Strategy Fund 396055.89 623882.79 219022.77 N/A N/A 1238961.44 All-Asset Conservative Strategy Fund 289327.02 758275.26 248796.21 N/A N/A 1296398.50 All-Asset Moderate Strategy Fund 711533.99 1437720.89 367567.98 N/A N/A 2516822.86 Alternative Strategies Fund 92359.15 5891.43 48258.24 N/A N/A 147708.86 Alternative Strategies Allocation Fund 108405.06 159641.92 580754.01 N/A N/A 848801.00 Banking Fund 36919.88 47193.87 N/A 6076.37 89063.52 179253.64
J-1
SHARES OUTSTANDING ------------------------------------------------------------------------------------ FUND A-CLASS C-CLASS H-CLASS ADVISOR CLASS INVESTOR CLASS TOTAL ------------------------------------------------------------------------------------------------------------------------- Basic Materials Fund 280326.95 212175.96 N/A 76692.57 820513.89 1389709.37 Biotechnology Fund 311846.72 171718.91 N/A 156873.85 1876837.45 2517276.92 Commodities Strategy Fund 403171.81 246555.71 1059085.28 N/A N/A 1708812.80 Consumer Products Fund 399047.14 158234.50 N/A 180446.64 2447517.06 3185245.35 Electronics Fund 17846.45 8038.18 N/A 32883.02 114883.55 173651.20 Emerging Markets 2x Strategy Fund 1613.17 1539.72 187835.56 N/A N/A 190988.45 Energy Fund 241597.13 656760.66 N/A 230181.70 1555338.66 2683878.16 Energy Services Fund 164708.96 251659.97 N/A 146285.57 719277.53 1281932.03 Europe 1.25x Strategies Fund 19536.68 66460.20 451496.23 N/A N/A 537493.11 Event Driven and Distressed Strategies Fund 287658.17 50175.81 291364.55 N/A N/A 637907.82 Financial Services Fund 11082.79 13682.58 N/A 11155.30 62317.85 98238.53] Government Long Bond 1.2x Strategy Fund 375008.69 473245.26 N/A 8891235.17 5825881.06 15565370.17 Health Care Fund 134866.46 291654.44 N/A 208820.46 942985.64 1578326.99 High Yield Strategy Fund 614822.70 351001.47 309546.66 0.00 N/A 1275370.82 Internet Fund 19801.84 15560.97 N/A 20485.19 217091.54 272939.55 Inverse Emerging Markets 2x Strategy Fund 13977.73 8225.43 74237.45 N/A N/A 96440.61 Inverse Government Long Bond Strategy Fund 5084252.73 8928123.54 N/A 1931473.69 23831356.80 39775206.76 Inverse High Yield Strategy Fund 129406.30 24021.97 1233912.56 N/A N/A 1387340.84 Inverse Mid-Cap Strategy Fund 9120.31 21314.00 429895.70 N/A N/A 460330.01 Inverse NASDAQ-100(R) Strategy Fund 59436.23 94658.93 N/A 249134.72 1407692.42 1810922.30 Inverse Russell 2000(R) Strategy Fund 50793.19 98676.88 2201972.40 N/A N/A 2351442.47 Inverse S&P 500 Strategy Fund 380960.85 458733.46 N/A 678771.50 10546670.15 12065135.95 Japan 2x Strategy Fund 91352.42 10196.94 157470.05 N/A N/A 259019.41 Leisure Fund 15174.94 10764.39 N/A 21711.39 54454.12 102104.84 Long/Short Commodities Strategy Fund 4288980.36 1345884.97 8653108.77 N/A N/A 15438920.69 Long Short Equity Strategy Fund 146197.16 8176.97 70746.15 N/A N/A 229718.14 Long Short Internet Rate Strategy Fund 1674985.73 743652.32 1476097.38 N/A N/A 5500705.97 Managed Futures Strategy Fund 26793857.75 4780573.64 41435734.15 N/A N/A 93816288.91 Mid-Cap 1.5x Strategy Fund 27504.74 201502.76 314552.56 N/A N/A 543560.06 Multi-Hedge Strategies Fund 602237.90 502361.70 1234933.79 N/A N/A 2352723.06 NASDAQ-100(R) Fund 551786.88 935611.51 N/A 829911.60 36370855.82 38688165.81 Nova Fund 58566.78 401117.18 N/A 165815.72 1405757.86 2031257.55 Precious Metals Fund 114038.38 451475.28 N/A 364939.94 1162336.92 2092790.52 Real Estate Fund 127113.21 49453.11 267101.00 N/A N/A 443667.32 Retailing Fund 22424.00 86785.48 N/A 93683.39 555928.88 758821.74 Russell 2000(R) 1.5x Strategy Fund 17210.87 70841.75 279982.12 N/A N/A 368034.75 Russell 2000(R) Fund 200201.03 286923.39 1552699.05 N/A N/A 2039823.47 S&P 500 Fund 14063.74 55834.43 174903.94 N/A N/A 244802.10 S&P 500 Pure Growth Fund 1053426.87 302269.10 4596145.74 N/A N/A 5951841.71 S&P 500 Pure Value Fund 21549.82 59692.58 185743.58 N/A N/A 266985.98 S&P MidCap 400 Pure Growth Fund 279932.63 78792.99 264782.93 N/A N/A 623508.55 S&P MidCap 400 Pure Value Fund 40945.18 120733.18 322832.99 N/A N/A 484511.35 S&P SmallCap 600 Pure Growth Fund 1353596.15 281133.57 4735864.31 N/A N/A 6370594.03 S&P SmallCap 600 Pure Value Fund 90875.64 208600.79 N/A 151627.70 589245.87 1040350.00 Strengthening Dollar 2x Strategy Fund 45890.87 122969.48 N/A 16793.34 165391.21 351044.90 Technology Fund 65990.01 38562.60 N/A 17491.80 136937.66 258982.08 Telecommunications Fund 215925.30 251777.20 N/A 132378.28 2384919.96 2985000.74 Transportation Fund 1548099.29 3209315.76 5210710.57 N/A N/A 9968125.61 Utilities Fund 269217.04 146827.13 832627.81 N/A N/A 1248671.98 U.S. Long Short Momentum Fund 396055.89 623882.79 219022.77 N/A N/A 1238961.44 Weakening Dollar 2x Strategy Fund 289327.02 758275.26 248796.21 N/A N/A 1296398.50
J-2 APPENDIX K BENEFICIAL OWNERS OF MORE THAN 5% OF A CLASS OF EACH FUND As of the Record Date, the following persons owned, of record and beneficially (unless otherwise indicated), 5% or more* of a class of each Fund's outstanding securities: RYDEX DYNAMIC FUNDS
PERCENTAGE AMOUNT OF OF THE NAME OF THE FUND SHARE CLASS SHARES OWNED CLASS NAME AND ADDRESS OF THE BENEFICIAL OWNER --------------------------------------------------------------------------------------------------------------------------------- Dow 2x Strategy Fund Class A 54,640.05 33.30% FIRST CLEARING, LLC 2801 MARKET STREET SAINT LOUIS, MO 63115 Dow 2x Strategy Fund Class A 38,267.76 23.30% PERSHING LLC P. O. BOX 2052 JERSEY CITY, NJ 07303-10091 Dow 2x Strategy Fund Class A 15,008.51 9.14% LPL FINANCIAL 9785 TOWNE CENTRE DRIVE SAN DIEGO CA 92121-1996 Dow 2x Strategy Fund Class A 12,852.98 7.85% AMERITRADE INC PO BOX 2226 OMAHA NE 68103-2233 Dow 2x Strategy Fund Class C 16,821.54 14.99% LPL FINANCIAL 9785 TOWNE CENTRE DRIVE SAN DIEGO CA 92121-1999 Dow 2x Strategy Fund Class C 16,296.72 14.52% AMERICAN ENTERPRISE INV SVCS 707 2ND AVENUE SOUTH MINNEAPOLIS, MN 55403 Dow 2x Strategy Fund Class C 14,190.20 12.64% PERSHING LLC P. O. BOX 2052 JERSEY CITY, NJ 07303-10105 Dow 2x Strategy Fund Class C 13,479.96 12.01% FIRST CLEARING, LLC 2801 MARKET STREET SAINT LOUIS, MO 63116 Dow 2x Strategy Fund Class C 8,362.60 7.43% NFS LLC PO BOX 1289 NORTH PLATTE, NE 69103 Dow 2x Strategy Fund Class C 6,247.18 5.57% UBS FINANCIAL SERVICES INC. 4822 HOLLADAY, NO 170 SALT LAKE CITY UT 84117-5469 Dow 2x Strategy Fund Class H 1,366,011.48 65.56% TD AMERITRADE INC. PO BOX 2226 OMAHA, NE 68103-2247 Dow 2x Strategy Fund Class H 128,913.42 6.19% NATIONAL FINANCIAL SVCS CORP 200 LIBERTY STREET NEW YORK, NY 10281-10071 Inverse Dow 2x Strategy Fund Class A 27,303.84 31.57% PERSHING LLC P. O. BOX 2052 JERSEY CITY, NJ 07303-10092 Inverse Dow 2x Strategy Fund Class A 16,122.21 18.69% LPL FINANCIAL 9785 TOWNE CENTRE DRIVE SAN DIEGO CA 92121-2000 Inverse Dow 2x Strategy Fund Class A 8,630.61 9.99% MITRA & CO 11270 W PARK PLACE STE 400 MILWAUKEE, WI 53224-3638 Inverse Dow 2x Strategy Fund Class A 8,096.98 9.39% NFS LLC PO BOX 1289 NORTH PLATTE, NE 69106 Inverse Dow 2x Strategy Fund Class A 6,273.34 7.26% FIRST CLEARING, LLC 2801 MARKET STREET SAINT LOUIS, MO 63116 Inverse Dow 2x Strategy Fund Class A 4,781.64 5.53% MORGAN STANLEY SMITH BARNEY HARBORSIDE FINANCIAL CENTER PLAZA 2, 3RD FLOOR JERSEY CITY, NJ 07334
K-1
PERCENTAGE AMOUNT OF OF THE NAME OF THE FUND SHARE CLASS SHARES OWNED CLASS NAME AND ADDRESS OF THE BENEFICIAL OWNER --------------------------------------------------------------------------------------------------------------------------------- Inverse Dow 2x Strategy Fund Class C 35,217.00 32.84% PERSHING LLC P. O. BOX 2052 JERSEY CITY, NJ 07303-10093 Inverse Dow 2x Strategy Fund Class C 13,606.45 12.66% FIRST CLEARING, LLC 2801 MARKET STREET SAINT LOUIS, MO 63117 Inverse Dow 2x Strategy Fund Class C 13,447.94 12.51% SCHWAB, SPECIAL CUSTODY ACCOUNT ATTN: MUTUAL FUNDS TEAM E, 101 MONTGOMERY STREET SAN FRANCISCO, CA 94104-4155 Inverse Dow 2x Strategy Fund Class C 10,834.90 10.08% NFS LLC PO BOX 1289 NORTH PLATTE, NE 69113 Inverse Dow 2x Strategy Fund Class C 9,489.21 8.83% AMERITRADE INC PO BOX 2226 OMAHA NE 68103-2238 Inverse Dow 2x Strategy Fund Class C 7,000.00 6.51% OPPENHEIMER & CO INC. 18908 MT CIMARRON ST FOUNTAIN VALLEY CA 92705 Inverse Dow 2x Strategy Fund Class H 212,519.13 23.23% NATIONAL FINANCIAL SVCS CORP 200 LIBERTY STREET NEW YORK, NY 10281-10072 Inverse Dow 2x Strategy Fund Class H 151,052.34 16.51% SCHWAB, SPECIAL CUSTODY ACCOUNT ATTN: MUTUAL FUNDS TEAM E, 101 MONTGOMERY STREET SAN FRANCISCO, CA 94104-4156 Inverse Dow 2x Strategy Fund Class H 52,850.57 5.80% PERSHING LLC P. O. BOX 2052 JERSEY CITY, NJ 07303-10094 Inverse Dow 2x Strategy Fund Class H 49,675.18 5.43% TD AMERITRADE INC. PO BOX 2226 OMAHA, NE 68103-2248 Inverse NASDAQ-100(R) 2x Strategy Fund Class A 68,150.20 24.98% PERSHING LLC P. O. BOX 2052 JERSEY CITY, NJ 07303-10095 Inverse NASDAQ-100(R) 2x Strategy Fund Class A 52,311.30 19.17% MORGAN STANLEY SMITH BARNEY HARBORSIDE FINANCIAL CENTER PLAZA 2, 3RD FLOOR JERSEY CITY, NJ 07335 Inverse NASDAQ-100(R) 2x Strategy Fund Class A 36,319.61 13.31% MITRA & CO 11270 W PARK PLACE STE 400 MILWAUKEE, WI 53224-3639 Inverse NASDAQ-100(R) 2x Strategy Fund Class A 30,292.73 11.09% LPL FINANCIAL 9785 TOWNE CENTRE DRIVE SAN DIEGO CA 92121-1994 Inverse NASDAQ-100(R) 2x Strategy Fund Class A 23,685.29 8.68% FIRST CLEARING, LLC 2801 MARKET STREET SAINT LOUIS, MO 63118 Inverse NASDAQ-100(R) 2x Strategy Fund Class A 15,022.64 5.51% AMERITRADE INC PO BOX 2226 OMAHA NE 68103-2235 Inverse NASDAQ-100(R) 2x Strategy Fund Class C 230,786.74 17.44% DONALDSON LUFKIN JENRETTE, SECURITIES CORPORATION INC. P.O. BOX 2052 JERSEY CITY, NJ 07303 Inverse NASDAQ-100(R) 2x Strategy Fund Class C 180,367.46 13.63% FIRST CLEARING, LLC 22 PERWINKLE DRIVE MOUNT LAUREL, NJ 08054 Inverse NASDAQ-100(R) 2x Strategy Fund Class C 91,870.69 6.94% MORGAN STANLEY SMITH BARNEY HARBORSIDE FINANCIAL CENTER PLAZA 2, 3RD FLOOR JERSEY CITY, NJ 07336 Inverse NASDAQ-100(R) 2x Strategy Fund Class C 88,873.31 6.71% NFS LLC PO BOX 1289 NORTH PLATTE, NE 69104
K-2
PERCENTAGE AMOUNT OF OF THE NAME OF THE FUND SHARE CLASS SHARES OWNED CLASS NAME AND ADDRESS OF THE BENEFICIAL OWNER --------------------------------------------------------------------------------------------------------------------------------- Inverse NASDAQ-100(R) 2x Strategy Fund Class C 66,218.65 5.00% RAYMOND JAMES & ASSOC INC PO BOX 1287 PASCAGOULA MS 39568-1287876 Inverse NASDAQ-100(R) 2x Strategy Fund Class H 2,685,148.99 20.93% NATIONAL FINANCIAL SVCS CORP 200 LIBERTY STREET NEW YORK, NY 10281-10073 Inverse NASDAQ-100(R) 2x Strategy Fund Class H 1,523,994.66 11.88% SCHWAB, SPECIAL CUSTODY ACCOUNT ATTN: MUTUAL FUNDS TEAM E, 101 MONTGOMERY STREET SAN FRANCISCO, CA 94104-4157 Inverse NASDAQ-100(R) 2x Strategy Fund Class H 815,851.76 6.36% TD AMERITRADE INC. PO BOX 2226 OMAHA, NE 68103-2249 Inverse Russell 2000(R) 2x Strategy Fund Class A 71,722.84 27.73% TRUST COMPANY OF AMERICA P O BOX 6503 ENGLEWOOD, CO 80118 Inverse Russell 2000(R) 2x Strategy Fund Class A 38,484.57 14.87% PERSHING LLC P. O. BOX 2052 JERSEY CITY, NJ 07303-10096 Inverse Russell 2000(R) 2x Strategy Fund Class A 37,235.61 14.39% NFS LLC PO BOX 1289 NORTH PLATTE, NE 69110 Inverse Russell 2000(R) 2x Strategy Fund Class A 18,061.96 6.98% FIRST CLEARING, LLC 2801 MARKET STREET SAINT LOUIS, MO 63119 Inverse Russell 2000(R) 2x Strategy Fund Class A 13,239.49 5.13% AMERITRADE INC PO BOX 2226 OMAHA NE 68103-2236 Inverse Russell 2000(R) 2x Strategy Fund Class C 128,018.29 30.69% PERSHING LLC P. O. BOX 2052 JERSEY CITY, NJ 07303-10097 Inverse Russell 2000(R) 2x Strategy Fund Class C 35,275.59 8.44% SCHWAB, SPECIAL CUSTODY ACCOUNT ATTN: MUTUAL FUNDS TEAM E, 101 MONTGOMERY STREET SAN FRANCISCO, CA 94104-4158 Inverse Russell 2000(R) 2x Strategy Fund Class C 34,594.67 8.31% LPL FINANCIAL 9785 TOWNE CENTRE DRIVE SAN DIEGO CA 92121-1993 Inverse Russell 2000(R) 2x Strategy Fund Class C 29,537.80 7.07% NFS LLC PO BOX 1289 NORTH PLATTE, NE 69109 Inverse Russell 2000(R) 2x Strategy Fund Class C 26,738.17 6.40% OPPENHEIMER & CO INC. 111 KIOWA LANE MONROE LA 71203 Inverse Russell 2000(R) 2x Strategy Fund Class H 2,793,421.94 37.35% TD AMERITRADE INC. PO BOX 2226 OMAHA, NE 68103-2250 Inverse Russell 2000(R) 2x Strategy Fund Class H 1,997,269.33 26.71% NATIONAL FINANCIAL SVCS CORP 200 LIBERTY STREET NEW YORK, NY 10281-10074 Inverse S&P 500 2x Strategy Fund Class A 13,355.47 26.33% PERSHING LLC P. O. BOX 2052 JERSEY CITY, NJ 07303-10098 Inverse S&P 500 2x Strategy Fund Class A 168,471.50 25.68% NFS LLC PO BOX 1289 NORTH PLATTE, NE 69107 Inverse S&P 500 2x Strategy Fund Class A 130,635.56 19.84% AMERITRADE INC PO BOX 2226 OMAHA NE 68103-2239 Inverse S&P 500 2x Strategy Fund Class A 88,592.97 13.51% FIRST CLEARING, LLC 2801 MARKET STREET SAINT LOUIS, MO 63120 Inverse S&P 500 2x Strategy Fund Class A 71,713.26 10.94% LPL FINANCIAL 9785 TOWNE CENTRE DRIVE SAN DIEGO CA 92121-1995
K-3
PERCENTAGE AMOUNT OF OF THE NAME OF THE FUND SHARE CLASS SHARES OWNED CLASS NAME AND ADDRESS OF THE BENEFICIAL OWNER --------------------------------------------------------------------------------------------------------------------------------- Inverse S&P 500 2x Strategy Fund Class A 64,827.64 9.84% PERSHING LLC P. O. BOX 2052 JERSEY CITY, NJ 07303-10099 Inverse S&P 500 2x Strategy Fund Class C 256,321.74 34.63% PERSHING LLC P. O. BOX 2052 JERSEY CITY, NJ 07303-10100 Inverse S&P 500 2x Strategy Fund Class C 100,205.41 13.55% TRUST COMPANY OF AMERICA P O BOX 6503 ENGLEWOOD, CO 80116 Inverse S&P 500 2x Strategy Fund Class C 84,077.94 11.33% NFS LLC PO BOX 1289 NORTH PLATTE, NE 69105 Inverse S&P 500 2x Strategy Fund Class C 78,035.90 10.55% SCHWAB, SPECIAL CUSTODY ACCOUNT ATTN: MUTUAL FUNDS TEAM E, 101 MONTGOMERY STREET SAN FRANCISCO, CA 94104-4159 Inverse S&P 500 2x Strategy Fund Class C 65,141.38 8.81% FIRST CLEARING, LLC 2801 MARKET STREET SAINT LOUIS, MO 63121 Inverse S&P 500 2x Strategy Fund Class C 54,442.41 7.39% AMERITRADE INC PO BOX 2226 OMAHA NE 68103-2237 Inverse S&P 500 2x Strategy Fund Class H 5,343,895.10 51.81% NATIONAL FINANCIAL SVCS CORP 200 LIBERTY STREET NEW YORK, NY 10281-10075 Inverse S&P 500 2x Strategy Fund Class H 1,028,428.62 9.97% SCHWAB, SPECIAL CUSTODY ACCOUNT ATTN: MUTUAL FUNDS TEAM E, 101 MONTGOMERY STREET SAN FRANCISCO, CA 94104-4160 NASDAQ-100(R) 2x Strategy Fund Class A 7,415.06 19.29% STIFEL NICOLAUS & CO INC 501 NORTH BROADWAY ST LOUIS MO 63102 NASDAQ-100(R) 2x Strategy Fund Class A 7,358.43 19.15% MORGAN STANLEY SMITH BARNEY HARBORSIDE FINANCIAL CENTER PLAZA 2, 3RD FLOOR JERSEY CITY, NJ 07337 NASDAQ-100(R) 2x Strategy Fund Class A 4,098.93 10.69% LPL FINANCIAL 9785 TOWNE CENTRE DRIVE SAN DIEGO CA 92121-1998 NASDAQ-100(R) 2x Strategy Fund Class A 2,995.14 7.79% PERSHING LLC P. O. BOX 2052 JERSEY CITY, NJ 07303-10101 NASDAQ-100(R) 2x Strategy Fund Class A 2,070.58 5.40% OPPENHEIMER & CO INC. 125 BROAD STREET NEW YORK, NY 10004 NASDAQ-100(R) 2x Strategy Fund Class C 16,748.58 13.17% DONALDSON LUFKIN JENRETTE, SECURITIES CORPORATION INC. P.O. BOX 2052 JERSEY CITY, NJ 07304 NASDAQ-100(R) 2x Strategy Fund Class C 13,938.97 10.92% FIRST CLEARING, LLC 2801 MARKET STREET SAINT LOUIS, MO 63122 NASDAQ-100(R) 2x Strategy Fund Class C 9,918.61 7.72% NFS LLC PO BOX 1289 NORTH PLATTE, NE 69112 NASDAQ-100(R) 2x Strategy Fund Class C 8,714.85 6.88% AMERICAN ENTERPRISE INV SVCS 707 2ND AVENUE SOUTH MINNEAPOLIS, MN 55402 NASDAQ-100(R) 2x Strategy Fund Class C 7,211.89 5.65% MORGAN STANLEY SMITH BARNEY HARBORSIDE FINANCIAL CENTER PLAZA 2, 3RD FLOOR JERSEY CITY, NJ 07339 NASDAQ-100(R) 2x Strategy Fund Class H 214,334.11 18.36% NATIONAL FINANCIAL SVCS CORP 200 LIBERTY STREET NEW YORK, NY 10281-10076
K-4
PERCENTAGE AMOUNT OF OF THE NAME OF THE FUND SHARE CLASS SHARES OWNED CLASS NAME AND ADDRESS OF THE BENEFICIAL OWNER --------------------------------------------------------------------------------------------------------------------------------- NASDAQ-100(R) 2x Strategy Fund Class H 139,953.99 11.99% SCHWAB, SPECIAL CUSTODY ACCOUNT ATTN: MUTUAL FUNDS TEAM E, 101 MONTGOMERY STREET NASDAQ-100(R) 2x Strategy Fund Class H 95,965.23 8.22% TD AMERITRADE INC. PO BOX 2226 OMAHA, NE 68103-2251 NASDAQ-100(R) 2x Strategy Fund Class H 69,819.40 5.98% CITICORP USA, INC 227 WEST MONROE STREET, 3RD FL CHICAGO, IL 60606 NASDAQ-100(R) 2x Strategy Fund Class H 59,407.41 5.09% MERRILL LYNCH, PIERCE, FENNER & SMITH, INC. 4800 DEER LAKE DRIVE E, 3RD FLOOR JACKSONVILLE, FL 32246 Russell 2000(R) 2x Strategy Fund Class A 6,357.22 35.94% AMERITRADE INC PO BOX 2226 OMAHA NE 68103-2234 Russell 2000(R) 2x Strategy Fund Class A 2,422.41 13.70% NFS LLC PO BOX 1289 NORTH PLATTE, NE 69108 Russell 2000(R) 2x Strategy Fund Class A 1,815.97 10.30% LPL FINANCIAL 9785 TOWNE CENTRE DRIVE SAN DIEGO CA 92121-2001 Russell 2000(R) 2x Strategy Fund Class A 1,243.12 7.01% OPPENHEIMER & CO INC. 1825 12TH AVE NE ISSAQUAH WA 98029 Russell 2000(R) 2x Strategy Fund Class A 1,116.23 6.33% PERSHING LLC P. O. BOX 2052 JERSEY CITY, NJ 07303-10102 Russell 2000(R) 2x Strategy Fund Class C 3,874.39 42.25% LPL FINANCIAL 9785 TOWNE CENTRE DRIVE SAN DIEGO CA 92121-1997 Russell 2000(R) 2x Strategy Fund Class C 1,169.82 12.74% PERSHING LLC P. O. BOX 2052 JERSEY CITY, NJ 07303-10103 Russell 2000(R) 2x Strategy Fund Class C 567.81 6.19% RBC CAPITAL MARKETS LLC 7525 PIONEER WAY STE 102 GIG HARBOR WA 98335-1165 Russell 2000(R) 2x Strategy Fund Class C 509.38 5.55% FIRST CLEARING, LLC 2801 MARKET STREET SAINT LOUIS, MO 63123 Russell 2000(R) 2x Strategy Fund Class H 73,493.98 33.83% CITICORP USA, INC 227 WEST MONROE STREET, 3RD FL CHICAGO, IL 60607 Russell 2000(R) 2x Strategy Fund Class H 36,429.05 16.77% NATIONAL FINANCIAL SVCS CORP 200 LIBERTY STREET NEW YORK, NY 10281-10077 Russell 2000(R) 2x Strategy Fund Class H 11,593.12 5.34% SCHWAB, SPECIAL CUSTODY ACCOUNT ATTN: MUTUAL FUNDS TEAM E, 101 MONTGOMERY STREET SAN FRANCISCO, CA 94104-4162 S&P 500 2x Strategy Fund Class A 72,524.14 25.43% MORGAN STANLEY SMITH BARNEY HARBORSIDE FINANCIAL CENTER PLAZA 2, 3RD FLOOR JERSEY CITY, NJ 07338 S&P 500 2x Strategy Fund Class A 49,317.27 17.29% DETROL CORPORATION C/O MUTUAL FUNDS PO BOX 8971 WILMINGTON, DE 19899-8971 S&P 500 2x Strategy Fund Class A 28,922.44 10.15% PERSHING LLC P. O. BOX 2052 JERSEY CITY, NJ 07303-10104 S&P 500 2x Strategy Fund Class A 24,684.00 8.64% NFS LLC PO BOX 1289 NORTH PLATTE, NE 69111 S&P 500 2x Strategy Fund Class A 18,702.86 6.56% FIRST CLEARING, LLC 2801 MARKET STREET SAINT LOUIS, MO 63124
K-5
PERCENTAGE AMOUNT OF OF THE NAME OF THE FUND SHARE CLASS SHARES OWNED CLASS NAME AND ADDRESS OF THE BENEFICIAL OWNER --------------------------------------------------------------------------------------------------------------------------------- S&P 500 2x Strategy Fund Class C 94,901.93 16.95% FIRST CLEARING, LLC 2873 ASHEVILLE HWY CANTON NC 28716-8493 S&P 500 2x Strategy Fund Class C 79,184.63 14.15% TRUST COMPANY OF AMERICA P O BOX 6503 ENGLEWOOD, CO 80117 S&P 500 2x Strategy Fund Class C 50,403.81 8.98% LPL FINANCIAL 9785 TOWNE CENTRE DRIVE SAN DIEGO CA 92121-2002 S&P 500 2x Strategy Fund Class C 41,358.74 7.39% MORGAN STANLEY SMITH BARNEY HARBORSIDE FINANCIAL CENTER PLAZA 2, 3RD FLOOR JERSEY CITY, NJ 07340 S&P 500 2x Strategy Fund Class C 31,383.96 5.57% DONALDSON LUFKIN JENRETTE, SECURITIES CORPORATION INC. P.O. BOX 2052 JERSEY CITY, NJ 07305 S&P 500 2x Strategy Fund Class C 30,718.99 5.49% SCHWAB, SPECIAL CUSTODY ACCOUNT ATTN: MUTUAL FUNDS TEAM E, 101 MONTGOMERY STREET SAN FRANCISCO, CA 94104-4163 S&P 500 2x Strategy Fund Class H 499,716.58 14.93% SCHWAB, SPECIAL CUSTODY ACCOUNT ATTN: MUTUAL FUNDS TEAM E, 101 MONTGOMERY STREET SAN FRANCISCO, CA 94104-4164 S&P 500 2x Strategy Fund Class H 391,923.04 11.71% CITICORP USA, INC 227 WEST MONROE STREET, 3RD FL CHICAGO, IL 60608 S&P 500 2x Strategy Fund Class H 360,282.38 10.76% NATIONAL FINANCIAL SVCS CORP 200 LIBERTY STREET NEW YORK, NY 10281-10078
K-6 RYDEX SERIES FUNDS
PERCENTAGE AMOUNT OF OF THE NAME OF THE FUND SHARE CLASS SHARES OWNED CLASS NAME AND ADDRESS OF THE BENEFICIAL OWNER --------------------------------------------------------------------------------------------------------------------------------- All-Asset Aggressive Strategy Fund Class A 94,908.44 23.93% PERSHING LLC P. O. BOX 2052 JERSEY CITY, NJ 07303-9998 All-Asset Aggressive Strategy Fund Class A 83,921.77 21.19% FIRST CLEARING, LLC 2801 MARKET STREET SAINT LOUIS, MO 63103 All-Asset Aggressive Strategy Fund Class A 43,874.94 11.09% LPL FINANCIAL 9785 TOWNE CENTRE DRIVE SAN DIEGO CA 92121-1981 All-Asset Aggressive Strategy Fund Class A 33,337.92 8.39% AMERITRADE INC PO BOX 2226 OMAHA NE 68103-2237 All-Asset Aggressive Strategy Fund Class C 123,898.51 19.85% LPL FINANCIAL 9785 TOWNE CENTRE DRIVE SAN DIEGO CA 92121-1998 All-Asset Aggressive Strategy Fund Class C 60,786.15 9.74% FIRST CLEARING, LLC 2801 MARKET STREET SAINT LOUIS, MO 63104 All-Asset Aggressive Strategy Fund Class C 55,336.84 8.86% ROBERT W BAIRD & CO. INC. 777 EAST WISCONSIN AVENUE MILWAUKEE WI 53202-5391 All-Asset Aggressive Strategy Fund Class C 54,309.71 8.70% PERSHING LLC P. O. BOX 2052 JERSEY CITY, NJ 07303-9999 All-Asset Aggressive Strategy Fund Class C 44,053.73 7.07% NFS LLC 7444 S MARION AVE TULSA, OK 74136 All-Asset Aggressive Strategy Fund Class C 40,566.11 6.50% CHEVIS F HORNE (IRA) 430 EUDORA ST DENVER, CO 80220 All-Asset Aggressive Strategy Fund Class H 50,281.96 22.96% NATIONAL FINANCIAL SVCS CORP 200 LIBERTY STREET NEW YORK, NY 10281-10005 All-Asset Aggressive Strategy Fund Class H 29,866.29 13.62% LPL FINANCIAL 9785 TOWNE CENTRE DRIVE SAN DIEGO CA 92121-1996 All-Asset Aggressive Strategy Fund Class H 28,461.22 12.99% UMB BANK NA ONE SECURITY PLACE TOPEKA, KS 66636-0001 All-Asset Aggressive Strategy Fund Class H 25,676.47 11.72% SCHWAB, SPECIAL CUSTODY ACCOUNT ATTN: MUTUAL FUNDS TEAM E, 101 MONTGOMERY STREET SAN FRANCISCO, CA 94104-4122 All-Asset Aggressive Strategy Fund Class H 20,024.78 9.14% FIRST CLEARING, LLC 2801 MARKET STREET SAINT LOUIS, MO 63105 All-Asset Aggressive Strategy Fund Class H 12,550.12 5.73% TD AMERITRADE INC. PO BOX 2226 OMAHA, NE 68103-2226 All-Asset Aggressive Strategy Fund Class H 11,987.15 5.48% PERSHING LLC P. O. BOX 2052 JERSEY CITY, NJ 07303-10000
K-7
PERCENTAGE AMOUNT OF OF THE NAME OF THE FUND SHARE CLASS SHARES OWNED CLASS NAME AND ADDRESS OF THE BENEFICIAL OWNER --------------------------------------------------------------------------------------------------------------------------------- All-Asset Conservative Strategy Fund Class A 59,469.72 20.56% LPL FINANCIAL 9785 TOWNE CENTRE DRIVE SAN DIEGO CA 92121-2035 All-Asset Conservative Strategy Fund Class A 49,153.53 16.98% PERSHING LLC P. O. BOX 2052 JERSEY CITY, NJ 07303-10001 All-Asset Conservative Strategy Fund Class A 23,348.34 8.07% NFS LLC 1477 CENTRE STREET WEST ROXBURY, MA 02132 All-Asset Conservative Strategy Fund Class A 18,502.81 6.39% PENSON FINANCIAL SERVICES, INC. 1700 PACIFIC AVENUE, SUITE 1400 DALLAS, TX 75201 All-Asset Conservative Strategy Fund Class C 113,246.55 14.96% LPL FINANCIAL 9785 TOWNE CENTRE DRIVE SAN DIEGO CA 92121-2025 All-Asset Conservative Strategy Fund Class C 73,201.32 9.65% PERSHING LLC P. O. BOX 2052 JERSEY CITY, NJ 07303-10002 All-Asset Conservative Strategy Fund Class C 71,728.30 9.46% FIRST CLEARING, LLC 2801 MARKET STREET SAINT LOUIS, MO 63106 All-Asset Conservative Strategy Fund Class H 62,536.21 25.14% LPL FINANCIAL 9785 TOWNE CENTRE DRIVE SAN DIEGO CA 92121-2045 All-Asset Conservative Strategy Fund Class H 35,465.37 14.25% UMB BANK NA ONE SECURITY PLACE TOPEKA, KS 66636-0001 All-Asset Conservative Strategy Fund Class H 23,878.74 9.60% SCHWAB, SPECIAL CUSTODY ACCOUNT ATTN: MUTUAL FUNDS TEAM E, 101 MONTGOMERY STREET SAN FRANCISCO, CA 94104-4123 All-Asset Conservative Strategy Fund Class H 16,425.05 6.60% LUCIE BOHANNON (RIRA) 130 MIDDLEBROOK RD W HARTFORD, CT 06119 All-Asset Conservative Strategy Fund Class H 15,416.58 6.20% NATIONAL FINANCIAL SVCS CORP 200 LIBERTY STREET NEW YORK, NY 10281-10006 All-Asset Conservative Strategy Fund Class H 12,741.17 5.12% TD AMERITRADE INC. PO BOX 2226 OMAHA, NE 68103-2227 All-Asset Moderate Strategy Fund Class A 193,067.79 27.14% PERSHING LLC P. O. BOX 2052 JERSEY CITY, NJ 07303-10003 All-Asset Moderate Strategy Fund Class A 143,968.74 20.20% LPL FINANCIAL 9785 TOWNE CENTRE DRIVE SAN DIEGO CA 92121-1984 All-Asset Moderate Strategy Fund Class A 135,138.25 19.00% NFS LLC PO BOX 11743 NEW IBERIA, LA 70562 All-Asset Moderate Strategy Fund Class C 298,240.96 20.82% LPL FINANCIAL 9785 TOWNE CENTRE DRIVE SAN DIEGO CA 92121-2028 All-Asset Moderate Strategy Fund Class C 182,926.51 12.72% FIRST CLEARING, LLC 290 CLUBHOUSE RD DELTA, PA 17314-8777
K-8
PERCENTAGE AMOUNT OF OF THE NAME OF THE FUND SHARE CLASS SHARES OWNED CLASS NAME AND ADDRESS OF THE BENEFICIAL OWNER --------------------------------------------------------------------------------------------------------------------------------- All-Asset Moderate Strategy Fund Class C 165,892.24 11.56% PERSHING LLC P. O. BOX 2052 JERSEY CITY, NJ 07303-10004 All-Asset Moderate Strategy Fund Class H 82,520.53 22.45% UMB BANK NA ONE SECURITY PLACE TOPEKA, KS 66636-0001 All-Asset Moderate Strategy Fund Class H 70,408.76 19.13% LPL FINANCIAL 9785 TOWNE CENTRE DRIVE SAN DIEGO CA 92121-1995 All-Asset Moderate Strategy Fund Class H 44,016.61 11.98% FIRST CLEARING, LLC 2801 MARKET STREET SAINT LOUIS, MO 63107 All-Asset Moderate Strategy Fund Class H 36,973.68 10.06% NATIONAL FINANCIAL SVCS CORP 200 LIBERTY STREET NEW YORK, NY 10281-10007 All-Asset Moderate Strategy Fund Class H 31,560.77 8.59% SCHWAB, SPECIAL CUSTODY ACCOUNT ATTN: MUTUAL FUNDS TEAM E, 101 MONTGOMERY STREET SAN FRANCISCO, CA 94104-4124 Alternative Strategies Allocation Fund Class A 36,721.29 33.85% PERSHING LLC P. O. BOX 2052 JERSEY CITY, NJ 07303-10005 Alternative Strategies Allocation Fund Class A 35,305.65 32.56% LPL FINANCIAL 9785 TOWNE CENTRE DRIVE SAN DIEGO CA 92121-1982 Alternative Strategies Allocation Fund Class A 8,248.55 7.63% NFS LLC 615 PALISADE AVE YONKERS, NY 10703 Alternative Strategies Allocation Fund Class A 6,644.43 6.13% MORGAN STANLEY SMITH BARNEY HARBORSIDE FINANCIAL CENTER, PLAZA 2, 3RD FLOOR JERSEY CITY, NJ 07311 Alternative Strategies Allocation Fund Class A 6,269.74 5.78% FIRST CLEARING, LLC 2801 MARKET STREET SAINT LOUIS, MO 63108 Alternative Strategies Allocation Fund Class C 30,546.26 19.10% LPL FINANCIAL 9785 TOWNE CENTRE DRIVE SAN DIEGO CA 92121-1979 Alternative Strategies Allocation Fund Class C 21,814.13 13.66% FIRST CLEARING, LLC 2801 MARKET STREET SAINT LOUIS, MO 63109 Alternative Strategies Allocation Fund Class C 16,558.46 10.36% PERSHING LLC P. O. BOX 2052 JERSEY CITY, NJ 07303-10006 Alternative Strategies Allocation Fund Class C 11,504.98 7.21% MORGAN STANLEY SMITH BARNEY HARBORSIDE FINANCIAL CENTER, PLAZA 2, 3RD FLOOR JERSEY CITY, NJ 07312 Alternative Strategies Allocation Fund Class C 9,171.04 5.74% DAWN D ARMSBY 3030 NY 2 CROPSEYVILLE, NY 12052 Alternative Strategies Allocation Fund Class H 277,344.91 47.76% RELIANCE TRUST PO BOX 48529 ATLANTA GA 30328
K-9
PERCENTAGE AMOUNT OF OF THE NAME OF THE FUND SHARE CLASS SHARES OWNED CLASS NAME AND ADDRESS OF THE BENEFICIAL OWNER --------------------------------------------------------------------------------------------------------------------------------- Alternative Strategies Allocation Fund Class H 102,738.59 17.65% PERSHING LLC P. O. BOX 2052 JERSEY CITY, NJ 07303-10007 Alternative Strategies Allocation Fund Class H 53,173.58 9.16% NATIONAL FINANCIAL SVCS CORP 200 LIBERTY STREET NEW YORK, NY 10281-10008 Alternative Strategies Allocation Fund Class H 43,052.87 7.41% FIRST CLEARING, LLC 2801 MARKET STREET SAINT LOUIS, MO 63110 Alternative Strategies Allocation Fund Class H 29,898.93 5.14% LPL FINANCIAL 9785 TOWNE CENTRE DRIVE SAN DIEGO CA 92121-1989 Alternative Strategies Fund Class A 63,670.24 68.94% RYDEX ALTERNATIVE STRATEGIES ALLOCATION FUND 9601 BLACKWELL RD, STE 500 ROCKVILLE, MD 20850 Alternative Strategies Fund Class A 20,323.44 22.01% RYDEX EPT MODERATE 9601 BLACKWELL RD, STE 500 ROCKVILLE, MD 20850 Alternative Strategies Fund Class A 6,805.29 7.36% LPL FINANCIAL 9785 TOWNE CENTRE DRIVE SAN DIEGO CA 92121-2034 Alternative Strategies Fund Class C 3,253.44 55.22% PERSHING LLC P. O. BOX 2052 JERSEY CITY, NJ 07303-10008 Alternative Strategies Fund Class C 599.68 10.18% LPL FINANCIAL 9785 TOWNE CENTRE DRIVE SAN DIEGO CA 92121-2036 Alternative Strategies Fund Class C 419.74 7.12% RYDEX DISTRIBUTORS 9601 BLACKWELL RD, STE 500 ROCKVILLE, MD 20850 Alternative Strategies Fund Class H 24,853.73 51.50% RYDEX VA ALTERNATIVE STRATEGIES, ALLOCATION FUND 9601 BLACKWELL RD, STE 500 ROCKVILLE, MD 20850 Alternative Strategies Fund Class H 14,721.98 30.51% RYDEX EPT MODERATE -VA 9601 BLACKWELL RD, STE 500 ROCKVILLE, MD 20850 Alternative Strategies Fund Institutional 780.40 65.03% SCHWAB, SPECIAL CUSTODY ACCOUNT Class ATTN: MUTUAL FUNDS TEAM E, 101 MONTGOMERY STREET SAN FRANCISCO, CA 94104-4125 Alternative Strategies Fund Institutional 419.64 34.97% RYDEX DISTRIBUTORS Class 9601 BLACKWELL RD, STE 500 ROCKVILLE, MD 20851 Amerigo Fund Advisor Class 15,702.74 8.89% CYNTHIA MILANI 1763 STOCKTON ST SAINT HELENA, CA 94574 Amerigo Fund Advisor Class 10,226.26 5.79% STEVEN B HOLSTEN MD 299 CAREW ST - SUITE 409 SPRINGFIELD, MA 01104-2361 Banking Fund Advisor Class 2,188.45 36.02% NATIONWIDE TRUST COMPANY P.O. BOX 182029 COLUMBUS, OH 43218-2030
K-10
PERCENTAGE AMOUNT OF OF THE NAME OF THE FUND SHARE CLASS SHARES OWNED CLASS NAME AND ADDRESS OF THE BENEFICIAL OWNER --------------------------------------------------------------------------------------------------------------------------------- Banking Fund Advisor Class 949.80 15.63% SCHWAB, SPECIAL CUSTODY ACCOUNT ATTN: MUTUAL FUNDS TEAM E, 101 MONTGOMERY STREET SAN FRANCISCO, CA 94104-4126 Banking Fund Advisor Class 427.63 7.04% TD AMERITRADE INC. PO BOX 2226 OMAHA, NE 68103-2228 Banking Fund Class A 20,093.85 54.43% AMERITRADE INC PO BOX 2226 OMAHA NE 68103-2242 Banking Fund Class A 4,860.79 13.17% UBS FINANCIAL SERVICES INC. PO BOX 20487 SEDONA AZ 86341-0487 Banking Fund Class A 3,016.67 8.18% PERSHING LLC P. O. BOX 2052 JERSEY CITY, NJ 07303-10097 Banking Fund Class A 2,746.87 7.44% FIRST CLEARING, LLC 2801 MARKET STREET SAINT LOUIS, MO 63111 Banking Fund Class A 2,559.47 6.94% NFS LLC 4075 MOUNT OLYMPUS WAY SALT LAKE CITY, UT 84124 Banking Fund Class C 31,290.83 66.30% FIRST CLEARING, LLC 2801 MARKET STREET SAINT LOUIS, MO 63112 Banking Fund Class C 6,514.48 13.85% DONALDSON LUFKIN JENRETTE, SECURITIES CORPORATION INC. P.O. BOX 2052 JERSEY CITY, NJ 07303-9998-9998 Banking Fund Investor Class 38,103.80 42.79% PERSHING LLC P. O. BOX 2052 JERSEY CITY, NJ 07303-10009 Banking Fund Investor Class 12,991.03 14.59% HENRY R BERGHOEF REVOCABLE TRUST 2 NORTH LA SALLE ST SUITE 500 CHICAGO, IL 60602 Banking Fund Investor Class 12,602.67 14.15% SCHWAB, SPECIAL CUSTODY ACCOUNT ATTN: MUTUAL FUNDS TEAM E, 101 MONTGOMERY STREET SAN FRANCISCO, CA 94104-4127 Banking Fund Investor Class 4,762.54 5.35% NATIONAL FINANCIAL SVCS CORP 200 LIBERTY STREET NEW YORK, NY 10281-10009 Basic Materials Fund Advisor Class 22,932.31 29.90% NATIONWIDE TRUST COMPANY P.O. BOX 182029 COLUMBUS, OH 43218-2031 Basic Materials Fund Advisor Class 13,616.31 17.75% TD AMERITRADE INC. PO BOX 2226 OMAHA, NE 68103-2229 Basic Materials Fund Advisor Class 9,785.16 12.72% LPL FINANCIAL 9785 TOWNE CENTRE DRIVE SAN DIEGO CA 92121-1980 Basic Materials Fund Advisor Class 9,221.52 12.02% PERSHING LLC P. O. BOX 2052 JERSEY CITY, NJ 07303-10010
K-11
PERCENTAGE AMOUNT OF OF THE NAME OF THE FUND SHARE CLASS SHARES OWNED CLASS NAME AND ADDRESS OF THE BENEFICIAL OWNER --------------------------------------------------------------------------------------------------------------------------------- Basic Materials Fund Advisor Class 5,886.70 7.68% NATIONAL FINANCIAL SVCS CORP 200 LIBERTY STREET NEW YORK, NY 10281-10010 Basic Materials Fund Advisor Class 3,955.05 5.14% AMERICAN ENTERPRISE INV SVCS 707 2ND AVENUE SOUTH MINNEAPOLIS, MN 55402 Basic Materials Fund Class A 51,457.76 18.35% PERSHING LLC P. O. BOX 2052 JERSEY CITY, NJ 07303-10011 Basic Materials Fund Class A 41,579.29 14.86% FIRST CLEARING, LLC 2801 MARKET STREET SAINT LOUIS, MO 63113 Basic Materials Fund Class A 18,673.27 6.65% AMERITRADE INC PO BOX 2226 OMAHA NE 68103-2233 Basic Materials Fund Class A 18,561.52 6.63% NFS LLC 8 DUVAL LANE PLAINVILLE, CT 06062 Basic Materials Fund Class C 40,423.06 19.02% PERSHING LLC P. O. BOX 2052 JERSEY CITY, NJ 07303-10012 Basic Materials Fund Class C 38,747.29 18.26% FIRST CLEARING, LLC 136 ALLEGANY ROAD STEVENSVILLE MD 21666-3642 Basic Materials Fund Class C 15,062.56 7.10% MORGAN STANLEY SMITH BARNEY, HOUSE ACCOUNT 700 RED BROOK BLVD OWINGS MILLS, MD 21117 Basic Materials Fund Class C 11,047.42 5.21% LPL FINANCIAL 9785 TOWNE CENTRE DRIVE SAN DIEGO CA 92121-2006 Basic Materials Fund Investor Class 282,197.47 34.39% SCHWAB, SPECIAL CUSTODY ACCOUNT ATTN: MUTUAL FUNDS TEAM E, 101 MONTGOMERY STREET SAN FRANCISCO, CA 94104-4128 Basic Materials Fund Investor Class 217,820.60 26.55% NATIONAL FINANCIAL SVCS CORP 200 LIBERTY STREET NEW YORK, NY 10281-10011 Basic Materials Fund Investor Class 61,608.97 7.52% Oltrust & Company 2801 Buick Cadillac Blvd Bloomington IN 47401 Basic Materials Fund Investor Class 60,420.07 7.36% FIRST CLEARING, LLC 2801 MARKET STREET SAINT LOUIS, MO 63114 Biotechnology Fund Advisor Class 50,682.98 32.31% TD AMERITRADE INC. PO BOX 2226 OMAHA, NE 68103-2230 Biotechnology Fund Advisor Class 32,660.76 20.82% NATIONWIDE TRUST COMPANY P.O. BOX 182029 COLUMBUS, OH 43218-2032 Biotechnology Fund Advisor Class 30,396.90 19.38% NATIONAL FINANCIAL SVCS CORP 200 LIBERTY STREET NEW YORK, NY 10281-10012
K-12
PERCENTAGE AMOUNT OF OF THE NAME OF THE FUND SHARE CLASS SHARES OWNED CLASS NAME AND ADDRESS OF THE BENEFICIAL OWNER --------------------------------------------------------------------------------------------------------------------------------- Biotechnology Fund Class A 100,255.29 32.23% PERSHING LLC P. O. BOX 2052 JERSEY CITY, NJ 07303-10098 Biotechnology Fund Class A 92,635.45 29.70% NFS LLC 200 LIBERTY STREET NEW YORK, NY 10281 Biotechnology Fund Class A 61,361.02 19.70% AMERITRADE INC PO BOX 2226 OMAHA NE 68103-2240 Biotechnology Fund Class C 20,821.11 12.14% DONALDSON LUFKIN JENRETTE, SECURITIES CORPORATION INC. P.O. BOX 2052 JERSEY CITY, NJ 07303-9998-9999 Biotechnology Fund Class C 20,552.07 11.97% FIRST CLEARING, LLC 2801 MARKET STREET SAINT LOUIS, MO 63115 Biotechnology Fund Class C 10,552.61 6.15% LPL FINANCIAL 9785 TOWNE CENTRE DRIVE SAN DIEGO CA 92121-2024 Biotechnology Fund Class C 8,800.98 5.12% STIFEL NICOLAUS & CO INC. 501 NORTH BROADWAY ST LOUIS MO 63108 Biotechnology Fund Investor Class 676,168.30 36.03% NATIONAL FINANCIAL SVCS CORP 200 LIBERTY STREET NEW YORK, NY 10281-10013 Biotechnology Fund Investor Class 647,916.41 34.52% SCHWAB, SPECIAL CUSTODY ACCOUNT ATTN: MUTUAL FUNDS TEAM E, 101 MONTGOMERY STREET SAN FRANCISCO, CA 94104-4129 Clermont Fund Advisor Class 11,115.59 18.67% RACHEL LEAH GARBER (IRA) 147 FOXWOOD RD STAMFORD, CT 06903 Clermont Fund Advisor Class 8,481.15 14.25% VIOLET J HALLAM (IRA) PO BOX 138 NAVESINK, NJ 07752 Clermont Fund Advisor Class 5,952.38 10.00% STEVEN B HOLSTEN MD 299 CAREW ST - SUITE 409 SPRINGFIELD, MA 01104-2361 Clermont Fund Advisor Class 4,431.08 7.44% STEPHEN HUTNICK OR MARY HUTNICK 107 KENDALL RD KENDALL PARK, NJ 08824 Commodities Strategy Fund Class A 92,253.19 22.88% MORGAN STANLEY SMITH BARNEY HARBORSIDE FINANCIAL CENTER PLAZA 2, 3RD FLOOR JERSEY CITY, NJ 07313 Commodities Strategy Fund Class A 59,607.64 14.79% NFS LLC 201 ALETHA DRIVE SIKESTON, MO 63801 Commodities Strategy Fund Class A 58,794.12 14.60% PERSHING LLC P. O. BOX 2052 JERSEY CITY, NJ 07303-10013 Commodities Strategy Fund Class A 50,527.70 12.53% RYDEX ALTERNATIVE STRATEGIES ALLOCATION FUND 9601 BLACKWELL RD, STE 500 ROCKVILLE, MD 20851
K-13
PERCENTAGE AMOUNT OF OF THE NAME OF THE FUND SHARE CLASS SHARES OWNED CLASS NAME AND ADDRESS OF THE BENEFICIAL OWNER --------------------------------------------------------------------------------------------------------------------------------- Commodities Strategy Fund Class A 33,119.62 8.21% RYDEX EPT MODERATE 9601 BLACKWELL RD, STE 500 ROCKVILLE, MD 20851 Commodities Strategy Fund Class A 31,086.90 7.74% LPL FINANCIAL 9785 TOWNE CENTRE DRIVE SAN DIEGO CA 92121-1976 Commodities Strategy Fund Class A 25,124.28 6.23% FIRST CLEARING, LLC 2801 MARKET STREET SAINT LOUIS, MO 63116 Commodities Strategy Fund Class C 63,460.76 25.74% FIRST CLEARING, LLC 136 ALLEGANY ROAD STEVENSVILLE MD 21666-3642 Commodities Strategy Fund Class C 46,058.81 18.69% LPL FINANCIAL 9785 TOWNE CENTRE DRIVE SAN DIEGO CA 92121-2005 Commodities Strategy Fund Class C 38,151.28 15.49% PERSHING LLC P. O. BOX 2052 JERSEY CITY, NJ 07303-10014 Commodities Strategy Fund Class C 15,159.30 6.15% MORGAN STANLEY SMITH BARNEY HARBORSIDE FINANCIAL CENTER PLAZA 2, 3RD FLOOR JERSEY CITY, NJ 07314 Commodities Strategy Fund Class H 292,919.01 27.66% NATIONAL FINANCIAL SVCS CORP 200 LIBERTY STREET NEW YORK, NY 10281-10014 Commodities Strategy Fund Class H 273,615.94 25.84% SCHWAB, SPECIAL CUSTODY ACCOUNT ATTN: MUTUAL FUNDS TEAM E, 101 MONTGOMERY STREET SAN FRANCISCO, CA 94104-4130 Commodities Strategy Fund Class H 81,733.95 7.72% FIRST CLEARING, LLC 2801 MARKET STREET SAINT LOUIS, MO 63117 Commodities Strategy Fund Class H 72,974.72 6.89% TD AMERITRADE INC. PO BOX 2226 OMAHA, NE 68103-2231 Commodities Strategy Fund Class H 66,682.07 6.28% LPL FINANCIAL 9785 TOWNE CENTRE DRIVE SAN DIEGO CA 92121-2014 Commodities Strategy Fund Class H 63,249.58 5.96% PERSHING LLC P. O. BOX 2052 JERSEY CITY, NJ 07303-10015 Consumer Products Fund Advisor Class 68,214.42 37.91% PERSHING LLC P. O. BOX 2052 JERSEY CITY, NJ 07303-10099 Consumer Products Fund Advisor Class 28,050.05 15.54% NATIONWIDE TRUST COMPANY P.O. BOX 182029 COLUMBUS, OH 43218-2033 Consumer Products Fund Advisor Class 22,500.84 12.47% NATIONAL FINANCIAL SVCS CORP 200 LIBERTY STREET NEW YORK, NY 10281-10015 Consumer Products Fund Advisor Class 21,625.87 11.98% TD AMERITRADE INC. PO BOX 2226 OMAHA, NE 68103-2232
K-14
PERCENTAGE AMOUNT OF OF THE NAME OF THE FUND SHARE CLASS SHARES OWNED CLASS NAME AND ADDRESS OF THE BENEFICIAL OWNER --------------------------------------------------------------------------------------------------------------------------------- Consumer Products Fund Advisor Class 14,476.60 8.03% TRUST COMPANY OF AMERICA P O BOX 6503 ENGLEWOOD, CO 80113 Consumer Products Fund Class A 115,180.37 28.77% PERSHING LLC P. O. BOX 2052 JERSEY CITY, NJ 07303-10016 Consumer Products Fund Class A 67,673.47 16.93% AMERITRADE INC PO BOX 2226 OMAHA NE 68103-2246 Consumer Products Fund Class A 29,926.26 7.52% FREDERIKSE 9785 TOWNE CENTRE DRIVE SAN DIEGO CA 92121 Consumer Products Fund Class A 28,289.51 7.07% NFS LLC 5615 ROUNDTREE LANE COLUMBIA, MD 21045 Consumer Products Fund Class A 22,405.11 5.60% LPL FINANCIAL 9785 TOWNE CENTRE DRIVE SAN DIEGO CA 92121-2020 Consumer Products Fund Class C 42,377.72 26.82% DONALDSON LUFKIN JENRETTE, SECURITIES CORPORATION INC. P.O. BOX 2052 JERSEY CITY, NJ 07303 Consumer Products Fund Class C 17,061.26 10.78% MORGAN STANLEY SMITH BARNEY HARBORSIDE FINANCIAL CENTER, PLAZA 2, 3RD FLOOR JERSEY CITY, NJ 07315 Consumer Products Fund Class C 12,295.02 7.75% LPL FINANCIAL 9785 TOWNE CENTRE DRIVE SAN DIEGO CA 92121-2017 Consumer Products Fund Class C 11,173.75 7.05% NFS LLC 9331 TOWN PLACE DRIVE OWINGS MILLS, MD 21117 Consumer Products Fund Class C 9,331.02 5.90% FIRST CLEARING, LLC 2801 MARKET STREET SAINT LOUIS, MO 63118 Consumer Products Fund Investor Class 1,352,379.84 55.26% NATIONAL FINANCIAL SVCS CORP 200 LIBERTY STREET NEW YORK, NY 10281-10016 Consumer Products Fund Investor Class 465,278.57 19.01% SCHWAB, SPECIAL CUSTODY ACCOUNT ATTN: MUTUAL FUNDS TEAM E, 101 MONTGOMERY STREET SAN FRANCISCO, CA 94104-4131 Consumer Products Fund Investor Class 334,853.50 13.31% DONALDSON LUFKIN JENRETTE, SECURITIES CORPORATION INC. P.O. BOX 2052 JERSEY CITY, NJ 07303 Electronics Fund Advisor Class 27,014.10 82.15% TD AMERITRADE INC. PO BOX 2226 OMAHA, NE 68103-2233 Electronics Fund Advisor Class 3,092.69 9.41% NATIONWIDE TRUST COMPANY P.O. BOX 182029 COLUMBUS, OH 43218-2034
K-15
PERCENTAGE AMOUNT OF OF THE NAME OF THE FUND SHARE CLASS SHARES OWNED CLASS NAME AND ADDRESS OF THE BENEFICIAL OWNER --------------------------------------------------------------------------------------------------------------------------------- Electronics Fund Class A 13,401.09 75.09% AMERITRADE INC PO BOX 2226 OMAHA NE 68103-2243 Electronics Fund Class A 1,722.64 9.66% PERSHING LLC P. O. BOX 2052 JERSEY CITY, NJ 07303-10017 Electronics Fund Class C 1,259.44 15.67% MORGAN STANLEY SMITH BARNEY, HOUSE ACCOUNT 700 RED BROOK BLVD OWINGS MILLS, MD 21118 Electronics Fund Class C 1,124.16 13.98% LPL FINANCIAL 9785 TOWNE CENTRE DRIVE SAN DIEGO CA 92121-2021 Electronics Fund Class C 741.19 9.23% PERSHING LLC P. O. BOX 2052 JERSEY CITY, NJ 07303-10106 Electronics Fund Class C 655.17 8.15% FIRST CLEARING, LLC 2801 MARKET STREET SAINT LOUIS, MO 63119 Electronics Fund Class C 452.79 5.63% GREGORY F VERPENT 1801 MARKET STREET PHILADELPHIA, PA 19103-1675 Electronics Fund Class C 427.35 5.32% MERRILL LYNCH, PIERCE, FENNER & SMITH, INC. 4800 DEER LAKE DRIVE E, 3RD FLOOR JACKSONVILLE, FL 32246 Electronics Fund Class C 409.59 5.10% RBC CAPITAL MARKETS CORP 3615 152ND ST URBANDALE, IA 50323-1623 Electronics Fund Investor Class 30,936.56 26.93% TRUST COMPANY OF AMERICA P O BOX 6503 ENGLEWOOD, CO 80122 Electronics Fund Investor Class 12,279.92 10.69% NATIONAL FINANCIAL SVCS CORP 200 LIBERTY STREET NEW YORK, NY 10281-10017 Electronics Fund Investor Class 11,994.86 10.44% SCHWAB, SPECIAL CUSTODY ACCOUNT ATTN: MUTUAL FUNDS TEAM E, 101 MONTGOMERY STREET SAN FRANCISCO, CA 94104-4132 Electronics Fund Investor Class 7,659.59 6.67% DONALDSON LUFKIN JENRETTE, SECURITIES CORPORATION INC. P.O. BOX 2052 JERSEY CITY, NJ 07303-9998-10002 Electronics Fund Investor Class 7,119.03 6.20% STOLTZFUS ENTERPRISES, LTD. 26 E. MAIN STREET, P.O. BOX 20 ELVERSON, PA 19520 Emerging Markets 2x Strategy Fund Class A 483.47 29.97% PERSHING LLC P. O. BOX 2052 JERSEY CITY, NJ 07303-10018 Emerging Markets 2x Strategy Fund Class A 400.00 24.80% RYDEX DISTRIBUTORS 9601 BLACKWELL RD, STE 500 ROCKVILLE, MD 20852 Emerging Markets 2x Strategy Fund Class A 352.88 21.87% ROBERT A MURDOCK OR M PATRICIA MURDOCK 191 BRICKETT HILL CIRCLE HAVERHILL, MA 01830
K-16
PERCENTAGE AMOUNT OF OF THE NAME OF THE FUND SHARE CLASS SHARES OWNED CLASS NAME AND ADDRESS OF THE BENEFICIAL OWNER --------------------------------------------------------------------------------------------------------------------------------- Emerging Markets 2x Strategy Fund Class A 147.63 9.15% FIDUCIARY TRUST CO 804 NE 7TH PL CAPE CORAL FL 33909-2089 Emerging Markets 2x Strategy Fund Class A 131.69 8.16% GEORGIA K KROUSTALIS OR SPYROS N KROUSTALIS 4715 HEARTHSTONE RD. CLEMMONS, NC 27012 Emerging Markets 2x Strategy Fund Class C 400.00 25.98% RYDEX DISTRIBUTORS 9601 BLACKWELL RD, STE 500 ROCKVILLE, MD 20853 Emerging Markets 2x Strategy Fund Class C 394.85 25.64% PERSHING LLC P. O. BOX 2052 JERSEY CITY, NJ 07303-10019 Emerging Markets 2x Strategy Fund Class C 336.59 21.86% ANTHONY E RICCIO, OR LILLIAN P RICCIO 18 DAUNTLESS LANE PLAISTOW, NH 03865 Emerging Markets 2x Strategy Fund Class C 188.08 12.21% LPL FINANCIAL 9785 TOWNE CENTRE DRIVE SAN DIEGO CA 92121-2047 Emerging Markets 2x Strategy Fund Class C 132.71 8.62% MICHAEL J MCCUNE, OR TARA K MCCUNE 8917 HIGHLAND OAKS DR JOHNSTON, IA 50131 Emerging Markets 2x Strategy Fund Class H 133,336.68 70.99% RYDEX DISTRIBUTORS 9601 BLACKWELL RD, STE 500 ROCKVILLE, MD 20854 Emerging Markets 2x Strategy Fund Class H 11,914.36 6.34% TRUST COMPANY OF AMERICA P O BOX 6503 ENGLEWOOD, CO 80120 Energy Fund Advisor Class 84,528.06 36.72% NATIONWIDE TRUST COMPANY P.O. BOX 182029 COLUMBUS, OH 43218-2035 Energy Fund Advisor Class 19,213.14 8.35% MSCS FINANCIAL SERVICES, LLC 700 17TH STREET, SUITE 300 DENVER, CO 80202 Energy Fund Advisor Class 13,609.09 5.90% D A DAVIDSON & CO PO BOX 5015 GREAT FALLS MT 59403 Energy Fund Advisor Class 12,398.25 5.39% NATIONAL FINANCIAL SVCS CORP 200 LIBERTY STREET NEW YORK, NY 10281-10018 Energy Fund Class A 89,443.72 37.02% FIRST CLEARING, LLC 2801 MARKET STREET SAINT LOUIS, MO 63120 Energy Fund Class A 49,364.23 20.41% NFS LLC 5145 GREENWELL BATON ROUGE, LA 70805 Energy Fund Class A 30,658.72 12.72% PERSHING LLC P. O. BOX 2052 JERSEY CITY, NJ 07303-10020 Energy Fund Class C 146,420.02 22.30% PATRICIA S FRUCHTL 1918 S 4TH ST SPRINGFIELD IL 62703-3149 Energy Fund Class C 63,488.00 9.69% PERSHING LLC P. O. BOX 2052 JERSEY CITY, NJ 07303-10021
K-17
PERCENTAGE AMOUNT OF OF THE NAME OF THE FUND SHARE CLASS SHARES OWNED CLASS NAME AND ADDRESS OF THE BENEFICIAL OWNER --------------------------------------------------------------------------------------------------------------------------------- Energy Fund Class C 56,037.67 8.53% MORGAN STANLEY SMITH BARNEY HARBORSIDE FINANCIAL CENTER PLAZA 2, 3RD FLOOR JERSEY CITY, NJ 07316 Energy Fund Class C 43,401.17 6.62% LPL FINANCIAL 9785 TOWNE CENTRE DRIVE SAN DIEGO CA 92121-2007 Energy Fund Class C 37,131.87 5.66% D A DAVIDSON & CO PO BOX 5015 GREAT FALLS MT 59404 Energy Fund Investor Class 499,529.39 32.12% SCHWAB, SPECIAL CUSTODY ACCOUNT ATTN: MUTUAL FUNDS TEAM E, 101 MONTGOMERY STREET SAN FRANCISCO, CA 94104-4133 Energy Fund Investor Class 342,065.77 21.99% NATIONAL FINANCIAL SVCS CORP 200 LIBERTY STREET NEW YORK, NY 10281-10019 Energy Fund Investor Class 92,645.76 5.91% LPL FINANCIAL 9785 TOWNE CENTRE DRIVE SAN DIEGO CA 92121-2026 Energy Services Fund Advisor Class 53,804.00 36.78% NATIONWIDE TRUST COMPANY P.O. BOX 182029 COLUMBUS, OH 43218-2036 Energy Services Fund Advisor Class 36,554.41 24.99% TD AMERITRADE INC. PO BOX 2226 OMAHA, NE 68103-2234 Energy Services Fund Advisor Class 16,687.88 11.42% LPL FINANCIAL 9785 TOWNE CENTRE DRIVE SAN DIEGO CA 92121-2009 Energy Services Fund Class A 60,065.09 36.47% FIRST CLEARING, LLC 2801 MARKET STREET SAINT LOUIS, MO 63121 Energy Services Fund Class A 31,939.73 19.40% PERSHING LLC P. O. BOX 2052 JERSEY CITY, NJ 07303-10022 Energy Services Fund Class A 16,675.08 10.04% NFS LLC 343 TREMONT ST NEWINGTON, CT 06111 Energy Services Fund Class A 9,928.72 6.06% LPL FINANCIAL 9785 TOWNE CENTRE DRIVE SAN DIEGO CA 92121-1991 Energy Services Fund Class C 42,954.41 17.07% FIRST CLEARING, LLC 2801 MARKET STREET SAINT LOUIS, MO 63122 Energy Services Fund Class C 42,081.53 16.69% STIFEL NICOLAUS & CO INC. 501 NORTH BROADWAY ST LOUIS MO 63104 Energy Services Fund Class C 31,703.93 12.60% PERSHING LLC P. O. BOX 2052 JERSEY CITY, NJ 07303-10023
K-18
PERCENTAGE AMOUNT OF OF THE NAME OF THE FUND SHARE CLASS SHARES OWNED CLASS NAME AND ADDRESS OF THE BENEFICIAL OWNER --------------------------------------------------------------------------------------------------------------------------------- Energy Services Fund Investor Class 201,711.38 28.04% SCHWAB, SPECIAL CUSTODY ACCOUNT ATTN: MUTUAL FUNDS TEAM E, 101 MONTGOMERY STREET SAN FRANCISCO, CA 94104-4134 Energy Services Fund Investor Class 101,600.22 14.13% NATIONAL FINANCIAL SVCS CORP 200 LIBERTY STREET NEW YORK, NY 10281-10020 Energy Services Fund Investor Class 44,301.17 6.05% PERSHING LLC P. O. BOX 2052 JERSEY CITY, NJ 07303-10024 Energy Services Fund Investor Class 42,153.75 5.86% FIRST CLEARING, LLC 2801 MARKET STREET SAINT LOUIS, MO 63123 Europe 1.25x Strategy Fund Class A 8,913.30 45.62% SCHWAB, SPECIAL CUSTODY ACCOUNT ATTN: MUTUAL FUNDS TEAM E, 101 MONTGOMERY STREET SAN FRANCISCO, CA 94104-4135 Europe 1.25x Strategy Fund Class A 4,185.10 21.41% PERSHING LLC P. O. BOX 2052 JERSEY CITY, NJ 07303-10025 Europe 1.25x Strategy Fund Class A 1,378.08 7.05% MORGAN STANLEY SMITH BARNEY, HOUSE ACCOUNT 700 RED BROOK BLVD OWINGS MILLS, MD 21119 Europe 1.25x Strategy Fund Class A 1,269.40 6.50% LPL FINANCIAL 9785 TOWNE CENTRE DRIVE SAN DIEGO CA 92121-2012 Europe 1.25x Strategy Fund Class C 7,167.01 10.78% FIRST CLEARING, LLC 2801 MARKET STREET SAINT LOUIS, MO 63124 Europe 1.25x Strategy Fund Class C 4,859.42 7.31% ROBERT R MASHBURN (IRA) 1533 DUNCAN RD KNOXVILLE, TN 37919 Europe 1.25x Strategy Fund Class C 4,657.10 7.01% LAURETTA M ROBERTS (IRA) 540 N SPOEDE ROAD SAINT LOUIS, MO 63141 Europe 1.25x Strategy Fund Class C 4,327.08 6.51% ROBERT L HICKS (RIRA) 153 SHANNON VALLEY DRIVE VICTORIA, TX 77904 Europe 1.25x Strategy Fund Class C 3,800.70 5.73% NFS LLC 32 SHORT ST BROCKTON, MA 02302 Europe 1.25x Strategy Fund Class H 116,201.05 25.74% NATIONAL FINANCIAL SVCS CORP 200 LIBERTY STREET NEW YORK, NY 10281-10021 Europe 1.25x Strategy Fund Class H 97,339.11 21.56% TRUST COMPANY OF AMERICA P O BOX 6503 ENGLEWOOD, CO 80125 Europe 1.25x Strategy Fund Class H 45,110.36 9.99% TD AMERITRADE INC. PO BOX 2226 OMAHA, NE 68103-2235 Europe 1.25x Strategy Fund Class H 36,051.91 7.98% SCHWAB, SPECIAL CUSTODY ACCOUNT ATTN: MUTUAL FUNDS TEAM E, 101 MONTGOMERY STREET SAN FRANCISCO, CA 94104-4136
K-19
PERCENTAGE AMOUNT OF OF THE NAME OF THE FUND SHARE CLASS SHARES OWNED CLASS NAME AND ADDRESS OF THE BENEFICIAL OWNER --------------------------------------------------------------------------------------------------------------------------------- Europe 1.25x Strategy Fund Class H 28,842.58 6.40% PERSHING LLC P. O. BOX 2052 JERSEY CITY, NJ 07303-10092 Europe 1.25x Strategy Fund Class H 27,675.99 6.13% NATIONWIDE TRUST COMPANY P.O. BOX 182029 COLUMBUS, OH 43218-2037 Event Driven and Distressed Class A 105,434.52 36.65% RYDEX ALTERNATIVE STRATEGIES ALLOCATION Strategies Fund FUND 9601 BLACKWELL RD, STE 500 ROCKVILLE, MD 20852 Event Driven and Distressed Class A 58,782.97 20.44% RYDEX DISTRIBUTORS Strategies Fund 9601 BLACKWELL RD, STE 500 ROCKVILLE, MD 20855 Event Driven and Distressed Class A 44,916.42 15.62% RYDEX EPT MODERATE Strategies Fund 9601 BLACKWELL RD, STE 500 ROCKVILLE, MD 20852 Event Driven and Distressed Class C 36,901.95 73.55% FIRST CLEARING, LLC Strategies Fund 2801 MARKET STREET SAINT LOUIS, MO 63125 Event Driven and Distressed Class C 3,096.77 6.17% STIFEL NICOLAUS & CO INC. Strategies Fund 501 NORTH BROADWAY ST LOUIS MO 63109 Event Driven and Distressed Class H 160,598.50 55.12% SCHWAB, SPECIAL CUSTODY ACCOUNT Strategies Fund ATTN: MUTUAL FUNDS TEAM E, 101 MONTGOMERY STREET SAN FRANCISCO, CA 94104-4137 Event Driven and Distressed Class H 40,867.99 14.03% RYDEX VA ALTERNATIVE STRATEGIES, Strategies Fund ALLOCATION FUND 9601 BLACKWELL RD, STE 500 ROCKVILLE, MD 20851 Event Driven and Distressed Class H 34,192.07 11.77% LPL FINANCIAL Strategies Fund 9785 TOWNE CENTRE DRIVE SAN DIEGO CA 92121-2037 Event Driven and Distressed Class H 32,436.23 11.14% RYDEX EPT MODERATE -VA Strategies Fund 9601 BLACKWELL RD, STE 500 ROCKVILLE, MD 20851 Event Driven and Distressed Institutional 8,276.55 95.03% SCHWAB, SPECIAL CUSTODY ACCOUNT Strategies Fund Class ATTN: MUTUAL FUNDS TEAM E, 101 MONTGOMERY STREET SAN FRANCISCO, CA 94104-4138 Financial Services Fund Advisor Class 3,070.13 27.52% NATIONWIDE TRUST COMPANY P.O. BOX 182029 COLUMBUS, OH 43218-2038 Financial Services Fund Advisor Class 1,450.84 13.01% GENWORTH FINANCIAL TRUST COMPANY 3200 N CENTRAL, SUITE 612 PHOENIX, AZ 85012 Financial Services Fund Advisor Class 1,242.85 11.14% TD AMERITRADE INC. PO BOX 2226 OMAHA, NE 68103-2236 Financial Services Fund Advisor Class 1,118.14 10.02% NATIONAL FINANCIAL SVCS CORP 200 LIBERTY STREET NEW YORK, NY 10281-10022
K-20
PERCENTAGE AMOUNT OF OF THE NAME OF THE FUND SHARE CLASS SHARES OWNED CLASS NAME AND ADDRESS OF THE BENEFICIAL OWNER --------------------------------------------------------------------------------------------------------------------------------- Financial Services Fund Advisor Class 935.92 8.39% UMB BANK NA 6517 WALEBRIDGE LN AUSTIN TX 787391408 Financial Services Fund Class A 3,362.79 30.34% FIRST CLEARING, LLC 2801 MARKET STREET SAINT LOUIS, MO 63126 Financial Services Fund Class A 2,086.86 18.83% PERSHING LLC P. O. BOX 2052 JERSEY CITY, NJ 07303-10026 Financial Services Fund Class A 1,888.54 17.04% UBS FINANCIAL SERVICES INC. 50 COLUMBIA RD BRANCHBURG NJ 08876-3519 Financial Services Fund Class A 762.68 6.88% NFS LLC 11722 PRESERVATION LANE BOCA RATON, FL 33498 Financial Services Fund Class A 612.12 5.52% GARY J ATEN OR CAROLINE J ATEN PO BOX 886 ATKINSON, NE 68713 Financial Services Fund Class C 3,955.49 28.91% AMERITRADE INC PO BOX 2226 OMAHA NE 68103-2227 Financial Services Fund Class C 2,529.55 18.49% PERSHING LLC P. O. BOX 2052 JERSEY CITY, NJ 07303-10027 Financial Services Fund Class C 1,383.78 10.11% FIRST CLEARING, LLC 2801 MARKET STREET SAINT LOUIS, MO 63127 Financial Services Fund Class C 1,082.09 7.89% LPL FINANCIAL 9785 TOWNE CENTRE DRIVE SAN DIEGO CA 92121-1974 Financial Services Fund Investor Class 27,875.61 44.73% TD AMERITRADE INC. PO BOX 2226 OMAHA, NE 68103-2237 Financial Services Fund Investor Class 6,634.24 10.65% SCHWAB, SPECIAL CUSTODY ACCOUNT ATTN: MUTUAL FUNDS TEAM E, 101 MONTGOMERY STREET SAN FRANCISCO, CA 94104-4139 Financial Services Fund Investor Class 6,354.55 10.20% NATIONAL FINANCIAL SVCS CORP 200 LIBERTY STREET NEW YORK, NY 10281-10023 Government Long Bond 1.2x Strategy Fund Advisor Class 7,361,272.75 82.79% TRUST COMPANY OF AMERICA P O BOX 6503 ENGLEWOOD, CO 80115 Government Long Bond 1.2x Strategy Fund Class A 175,390.33 46.78% AMERITRADE INC PO BOX 2226 OMAHA NE 68103-2239 Government Long Bond 1.2x Strategy Fund Class A 105,268.22 28.04% PERSHING LLC P. O. BOX 2052 JERSEY CITY, NJ 07303-10028 Government Long Bond 1.2x Strategy Fund Class C 156,067.86 33.05% PERSHING LLC P. O. BOX 2052 JERSEY CITY, NJ 07303-10029
K-21
PERCENTAGE AMOUNT OF OF THE NAME OF THE FUND SHARE CLASS SHARES OWNED CLASS NAME AND ADDRESS OF THE BENEFICIAL OWNER --------------------------------------------------------------------------------------------------------------------------------- Government Long Bond 1.2x Strategy Fund Class C 42,245.32 8.90% AMERITRADE INC PO BOX 2226 OMAHA NE 68103-2248 Government Long Bond 1.2x Strategy Fund Investor Class 2,753,350.54 47.26% NATIONAL FINANCIAL SVCS CORP 200 LIBERTY STREET NEW YORK, NY 10281-10024 Government Long Bond 1.2x Strategy Fund Investor Class 1,096,322.32 18.53% PERSHING LLC P. O. BOX 2052 JERSEY CITY, NJ 07303-10107 Government Long Bond 1.2x Strategy Fund Investor Class 657,172.71 11.28% TD AMERITRADE INC. PO BOX 2226 OMAHA, NE 68103-2238 Government Long Bond 1.2x Strategy Fund Investor Class 319,811.59 5.48% TRUST COMPANY OF AMERICA P O BOX 6503 ENGLEWOOD, CO 80114 Health Care Fund Advisor Class 120,065.56 57.50% NATIONWIDE TRUST COMPANY P.O. BOX 182029 COLUMBUS, OH 43218-2039 Health Care Fund Advisor Class 27,527.45 13.18% TD AMERITRADE INC. PO BOX 2226 OMAHA, NE 68103-2239 Health Care Fund Advisor Class 20,952.10 10.03% NATIONAL FINANCIAL SVCS CORP 200 LIBERTY STREET NEW YORK, NY 10281-10025 Health Care Fund Class A 33,872.29 25.14% AMERITRADE INC PO BOX 2226 OMAHA NE 68103-2232 Health Care Fund Class A 33,179.15 24.56% PERSHING LLC P. O. BOX 2052 JERSEY CITY, NJ 07303-10030 Health Care Fund Class A 7,648.80 5.67% LPL FINANCIAL 9785 TOWNE CENTRE DRIVE SAN DIEGO CA 92121-2010 Health Care Fund Class C 27,965.85 9.59% FIRST CLEARING, LLC 2801 MARKET STREET SAINT LOUIS, MO 63128 Health Care Fund Class C 16,907.13 5.82% NFS LLC 2841 S GLENDALE AVE SPRINGFIELD, MO 65804 Health Care Fund Investor Class 330,081.69 35.00% NATIONAL FINANCIAL SVCS CORP 200 LIBERTY STREET NEW YORK, NY 10281-10026 Health Care Fund Investor Class 225,526.63 23.92% SCHWAB, SPECIAL CUSTODY ACCOUNT ATTN: MUTUAL FUNDS TEAM E, 101 MONTGOMERY STREET SAN FRANCISCO, CA 94104-4140 Health Care Fund Investor Class 71,662.50 7.65% DONALDSON LUFKIN JENRETTE, SECURITIES CORPORATION INC. P.O. BOX 2052 JERSEY CITY, NJ 07303-9998-10003 Health Care Fund Investor Class 66,176.56 7.02% TD AMERITRADE INC. PO BOX 2226 OMAHA, NE 68103-2240
K-22
PERCENTAGE AMOUNT OF OF THE NAME OF THE FUND SHARE CLASS SHARES OWNED CLASS NAME AND ADDRESS OF THE BENEFICIAL OWNER --------------------------------------------------------------------------------------------------------------------------------- High Yield Strategy Fund Class A 497,059.56 80.98% AMERITRADE INC PO BOX 2226 OMAHA NE 68103-2234 High Yield Strategy Fund Class A 50,211.29 8.18% PERSHING LLC P. O. BOX 2052 JERSEY CITY, NJ 07303-10031 High Yield Strategy Fund Class C 73,313.72 20.92% AMERICAN ENTERPRISE INV SVCS 707 2ND AVENUE SOUTH MINNEAPOLIS, MN 55403 High Yield Strategy Fund Class C 63,539.63 18.07% PERSHING LLC P. O. BOX 2052 JERSEY CITY, NJ 07303-10032 High Yield Strategy Fund Class C 25,550.78 7.28% FIRST CLEARING, LLC 2801 MARKET STREET SAINT LOUIS, MO 63129 High Yield Strategy Fund Class C 19,416.68 5.53% LPL FINANCIAL 9785 TOWNE CENTRE DRIVE SAN DIEGO CA 92121-2011 High Yield Strategy Fund Class H 88,369.45 28.55% TD AMERITRADE INC. PO BOX 2226 OMAHA, NE 68103-2241 High Yield Strategy Fund Class H 60,725.65 19.62% SCHWAB, SPECIAL CUSTODY ACCOUNT ATTN: MUTUAL FUNDS TEAM E, 101 MONTGOMERY STREET SAN FRANCISCO, CA 94104-4141 High Yield Strategy Fund Class H 47,293.85 15.28% NATIONAL FINANCIAL SVCS CORP 200 LIBERTY STREET NEW YORK, NY 10281-10027 High Yield Strategy Fund Class H 22,932.26 7.41% LPL FINANCIAL 9785 TOWNE CENTRE DRIVE SAN DIEGO CA 92121-2003 Internet Fund Advisor Class 8,392.97 40.97% NATIONWIDE TRUST COMPANY P.O. BOX 182029 COLUMBUS, OH 43218-2040 Internet Fund Advisor Class 5,173.83 25.26% NATIONAL FINANCIAL SVCS CORP 200 LIBERTY STREET NEW YORK, NY 10281-10028 Internet Fund Advisor Class 2,019.83 9.86% GENWORTH FINANCIAL TRUST COMPANY 3200 N CENTRAL, SUITE 612 PHOENIX, AZ 85013 Internet Fund Advisor Class 1,283.48 6.27% SCHWAB, SPECIAL CUSTODY ACCOUNT ATTN: MUTUAL FUNDS TEAM E, 101 MONTGOMERY STREET SAN FRANCISCO, CA 94104-4142 Internet Fund Class A 11,178.32 56.45% FIRST CLEARING, LLC 2801 MARKET STREET SAINT LOUIS, MO 63130 Internet Fund Class A 4,567.44 23.07% PERSHING LLC P. O. BOX 2052 JERSEY CITY, NJ 07303-10108
K-23
PERCENTAGE AMOUNT OF OF THE NAME OF THE FUND SHARE CLASS SHARES OWNED CLASS NAME AND ADDRESS OF THE BENEFICIAL OWNER --------------------------------------------------------------------------------------------------------------------------------- Internet Fund Class C 3,856.92 24.79% FIRST CLEARING, LLC 2801 MARKET STREET SAINT LOUIS, MO 63131 Internet Fund Class C 3,561.24 22.88% PERSHING LLC P. O. BOX 2052 JERSEY CITY, NJ 07303-10033 Internet Fund Class C 1,160.50 7.46% STERLING TRUST CO. PO BOX 2526 WACO, TX 76702-2526 Internet Fund Class C 890.50 5.71% STIFEL NICOLAUS & CO INC. 501 NORTH BROADWAY ST LOUIS MO 63105 Internet Fund Investor Class 131,605.24 60.62% FIRST CLEARING, LLC 2801 MARKET STREET SAINT LOUIS, MO 63132 Internet Fund Investor Class 21,348.67 9.83% SCHWAB, SPECIAL CUSTODY ACCOUNT ATTN: MUTUAL FUNDS TEAM E, 101 MONTGOMERY STREET SAN FRANCISCO, CA 94104-4143 Internet Fund Investor Class 15,241.89 7.02% NATIONAL FINANCIAL SVCS CORP 200 LIBERTY STREET NEW YORK, NY 10281-10029 Internet Fund Investor Class 11,423.44 5.26% TD AMERITRADE INC. PO BOX 2226 OMAHA, NE 68103-2242 Inverse Emerging Markets 2x Class A 6,381.78 45.66% RBC CAPITAL MARKETS LLC Strategy Fund 2146 34TH STREET LOS ALAMOS NM 87544-2012 Inverse Emerging Markets 2x Class A 2,740.41 19.61% RBC CAPITAL MARKETS LLC Strategy Fund 3213 A WALNUT STREET LOS ALAMOS NM 87544-2092 Inverse Emerging Markets 2x Class A 1,021.56 7.31% AMERITRADE INC Strategy Fund PO BOX 2226 OMAHA NE 68103-2226 Inverse Emerging Markets 2x Class A 972.48 6.96% TRUST COMPANY OF AMERICA Strategy Fund P O BOX 6503 ENGLEWOOD, CO 80117 Inverse Emerging Markets 2x Class C 1,229.65 14.94% PERSHING LLC Strategy Fund P. O. BOX 2052 JERSEY CITY, NJ 07303-10034 Inverse Emerging Markets 2x Class C 1,005.18 12.22% FRANK A DIAZ (ROTH) Strategy Fund 1704 S 39TH STREET #28 MESA, AZ 85206-3844 Inverse Emerging Markets 2x Class C 475.59 5.78% GUSTAVO GOMEZ (RIRA) Strategy Fund 670 S CACTUS WREN ST GILBERT, AZ 85296-3110 Inverse Emerging Markets 2x Class C 472.85 5.75% ROSS NICHOLS DYER (RIRA) Strategy Fund 1345 ANGLERS DR STEAMBOAT SPRINGS, CO 80487 Inverse Emerging Markets 2x Class H 59,872.81 80.65% RYDEX DISTRIBUTORS Strategy Fund 9601 BLACKWELL RD, STE 500 ROCKVILLE, MD 20856 Inverse Emerging Markets 2x Class H 5,695.58 7.67% FRANK L KLEMENCIC (IRA) Strategy Fund 1957 ACORN LN ABINGTON, PA 19001
K-24
PERCENTAGE AMOUNT OF OF THE NAME OF THE FUND SHARE CLASS SHARES OWNED CLASS NAME AND ADDRESS OF THE BENEFICIAL OWNER --------------------------------------------------------------------------------------------------------------------------------- Inverse Government Long Bond Advisor Class 849,842.02 44.05% LPL FINANCIAL Strategy Fund 9785 TOWNE CENTRE DRIVE SAN DIEGO CA 92121-1986 Inverse Government Long Bond Advisor Class 361,649.85 18.73% PIPER JAFFRAY Strategy Fund 800 NICOLLET MALL 8th STREET MINNEAPOLIS, MN 55402 Inverse Government Long Bond Advisor Class 121,273.88 6.37% PERSHING LLC Strategy Fund P. O. BOX 2052 JERSEY CITY, NJ 07303-10093 Inverse Government Long Bond Class A 889,977.22 17.50% FIRST CLEARING, LLC Strategy Fund 2801 MARKET STREET SAINT LOUIS, MO 63133 Inverse Government Long Bond Class A 758,754.62 14.85% PERSHING LLC Strategy Fund P. O. BOX 2052 JERSEY CITY, NJ 07303-10035 Inverse Government Long Bond Class A 589,885.14 11.55% NFS LLC Strategy Fund 5765 RICH GROVE LN DUBLIN, OH 43016 Inverse Government Long Bond Class A 472,176.84 9.29% SCHWAB, SPECIAL CUSTODY ACCOUNT Strategy Fund ATTN: MUTUAL FUNDS TEAM E, 101 MONTGOMERY STREET SAN FRANCISCO, CA 94104-4144 Inverse Government Long Bond Class A 299,178.79 5.83% LPL FINANCIAL Strategy Fund 9785 TOWNE CENTRE DRIVE SAN DIEGO CA 92121-1975 Inverse Government Long Bond Class C 2,154,885.69 24.14% FIRST CLEARING, LLC Strategy Fund 2801 MARKET STREET SAINT LOUIS, MO 63134 Inverse Government Long Bond Class C 637,443.49 7.14% MORGAN STANLEY SMITH BARNEY Strategy Fund HARBORSIDE FINANCIAL CENTER, PLAZA 2, 3RD FLOOR JERSEY CITY, NJ 07317 Inverse Government Long Bond Class C 574,097.50 6.14% PERSHING LLC Strategy Fund P. O. BOX 2052 JERSEY CITY, NJ 07303-10036 Inverse Government Long Bond Class C 459,941.58 5.01% NFS LLC Strategy Fund 11177 WOODLANDS WAY CINCINNATI, OH 45241 Inverse Government Long Bond Investor Class 7,945,626.61 33.34% SCHWAB, SPECIAL CUSTODY ACCOUNT Strategy Fund ATTN: MUTUAL FUNDS TEAM E, 101 MONTGOMERY STREET SAN FRANCISCO, CA 94104-4145 Inverse Government Long Bond Investor Class 5,585,725.55 23.44% NATIONAL FINANCIAL SVCS CORP Strategy Fund 200 LIBERTY STREET NEW YORK, NY 10281-10000 Inverse Government Long Bond Investor Class 2,147,453.45 9.01% FIRST CLEARING, LLC Strategy Fund 2801 MARKET STREET SAINT LOUIS, MO 63135 Inverse Government Long Bond Investor Class 1,200,159.17 5.04% TD AMERITRADE INC. Strategy Fund PO BOX 2226 OMAHA, NE 68103-2243 Inverse High Yield Strategy Fund Class A 96,897.57 74.84% AMERITRADE INC PO BOX 2226 OMAHA NE 68103-2235
K-25
PERCENTAGE AMOUNT OF OF THE NAME OF THE FUND SHARE CLASS SHARES OWNED CLASS NAME AND ADDRESS OF THE BENEFICIAL OWNER ------------------------------------------------------------------------------------------------------------------------------- Inverse High Yield Strategy Fund Class A 18,521.48 14.35% PERSHING LLC P. O. BOX 2052 JERSEY CITY, NJ 07303-10037 Inverse High Yield Strategy Fund Class C 8,642.44 35.98% PERSHING LLC P. O. BOX 2052 JERSEY CITY, NJ 07303-10038 Inverse High Yield Strategy Fund Class C 4,061.75 16.91% MORGAN STANLEY SMITH BARNEY, HOUSE ACCOUNT 700 RED BROOK BLVD OWINGS MILLS, MD 21120 Inverse High Yield Strategy Fund Class C 1,765.53 7.35% FIRST CLEARING, LLC 2801 MARKET STREET SAINT LOUIS, MO 63136 Inverse High Yield Strategy Fund Class H 716,565.71 58.07% SCHWAB, SPECIAL CUSTODY ACCOUNT ATTN: MUTUAL FUNDS TEAM E, 101 MONTGOMERY STREET SAN FRANCISCO, CA 94104-4146 Inverse High Yield Strategy Fund Class H 254,688.41 20.65% TRUST COMPANY OF AMERICA P O BOX 6503 ENGLEWOOD, CO 80124 Inverse High Yield Strategy Fund Class H 134,183.71 10.87% NATIONAL FINANCIAL SVCS CORP 200 LIBERTY STREET NEW YORK, NY 10281-10030 Inverse Mid-Cap Strategy Fund Class A 3,003.04 32.93% MORGAN STANLEY SMITH BARNEY, HOUSE ACCOUNT 700 RED BROOK BLVD OWINGS MILLS, MD 21121 Inverse Mid-Cap Strategy Fund Class A 904.57 9.92% VIOLET B ZEIGLER OR, RHONDA L SORENSON OR, KENTON D ZEIGLER JTWROS 8106 HIGHWOOD DRIVE #Y310 BLOOMINGTON, MN 55438 Inverse Mid-Cap Strategy Fund Class A 814.10 8.93% RBC CAPITAL MARKETS CORP 1231 SOUTH CARROLLTON NEW ORLEANS LA 70118-2025 Inverse Mid-Cap Strategy Fund Class A 642.71 7.05% RBC CAPITAL MARKETS CORP 26 SWAN ST NEW ORLEANS LA 70124-4405 Inverse Mid-Cap Strategy Fund Class A 641.06 7.03% JAMES D KEPPLER (RIRA) 2670 SHADOW WOOD COURT CHASKA, MN 55318 Inverse Mid-Cap Strategy Fund Class C 10,454.88 49.05% FIRST CLEARING, LLC 2801 MARKET STREET SAINT LOUIS, MO 63137 Inverse Mid-Cap Strategy Fund Class C 4,000.00 18.77% Brown Brothers Harriman & Co. 525 Washington Blvd. Jersey City, NJ 07310 Inverse Mid-Cap Strategy Fund Class C 1,294.61 6.07% MICHAEL S SABIN (RIRA) 3600 WEST 83RD ST MINNEAPOLIS, MN 55431 Inverse Mid-Cap Strategy Fund Class H 274,129.63 63.77% NATIONAL FINANCIAL SVCS CORP 200 LIBERTY STREET NEW YORK, NY 10281-10031 Inverse Mid-Cap Strategy Fund Class H 48,464.12 11.27% SCHWAB, SPECIAL CUSTODY ACCOUNT ATTN: MUTUAL FUNDS TEAM E, 101 MONTGOMERY STREET SAN FRANCISCO, CA 94104-4147
K-26
PERCENTAGE AMOUNT OF OF THE NAME OF THE FUND SHARE CLASS SHARES OWNED CLASS NAME AND ADDRESS OF THE BENEFICIAL OWNER ------------------------------------------------------------------------------------------------------------------------------- Inverse Mid-Cap Strategy Fund Class H 39,617.02 9.22% TRUST COMPANY OF AMERICA P O BOX 6503 ENGLEWOOD, CO 80126 Inverse NASDAQ-100(R) Strategy Advisor Class 225,109.94 90.33% LPL FINANCIAL Fund 9785 TOWNE CENTRE DRIVE SAN DIEGO CA 92121-2038 Inverse NASDAQ-100(R) Strategy Class A 30,180.39 50.76% NFS LLC FEBO CUSTOMER Fund 108-23 86TH STREET OZONE PARK, NY 11417 Inverse NASDAQ-100(R) Strategy Class A 4,153.90 6.97% PERSHING LLC Fund P. O. BOX 2052 JERSEY CITY, NJ 07303-10094 Inverse NASDAQ-100(R) Strategy Class C 20,953.30 22.13% NFS LLC Fund 4860 GLENWOOD ST LITTLE NECK, NY 11362-1423 Inverse NASDAQ-100(R) Strategy Class C 17,621.23 18.62% FIRST CLEARING, LLC Fund 2801 MARKET STREET SAINT LOUIS, MO 63138 Inverse NASDAQ-100(R) Strategy Class C 12,213.03 12.89% DONALDSON LUFKIN JENRETTE, SECURITIES Fund CORPORATION INC. P.O. BOX 2052 JERSEY CITY, NJ 07303 Inverse NASDAQ-100(R) Strategy Class C 5,120.95 5.41% MORGAN STANLEY SMITH BARNEY Fund HARBORSIDE FINANCIAL CENTER, PLAZA 2, 3RD FLOOR JERSEY CITY, NJ 07318 Inverse NASDAQ-100(R) Strategy Investor Class 190,149.74 13.51% SCHWAB, SPECIAL CUSTODY ACCOUNT Fund ATTN: MUTUAL FUNDS TEAM E, 101 MONTGOMERY STREET SAN FRANCISCO, CA 94104-4148 Inverse NASDAQ-100(R) Strategy Investor Class 160,780.41 11.42% NATIONAL FINANCIAL SVCS CORP Fund 200 LIBERTY STREET NEW YORK, NY 10281-10032 Inverse NASDAQ-100(R) Strategy Investor Class 142,306.10 10.11% TD AMERITRADE INC. Fund PO BOX 2226 OMAHA, NE 68103-2244 Inverse NASDAQ-100(R) Strategy Investor Class 140,599.22 9.99% TRUST COMPANY OF AMERICA Fund P O BOX 6503 ENGLEWOOD, CO 80127 Inverse NASDAQ-100(R) Strategy Investor Class 116,317.57 8.31% PERSHING LLC Fund P. O. BOX 2052 JERSEY CITY, NJ 07303-10039 Inverse NASDAQ-100(R) Strategy Investor Class 78,784.74 5.60% THOMAS H THELEN (RIRA) Fund 13-5725 KAPOHO KALAPANA ROAD PAHOA, HI 96778 Inverse Russell 2000(R) Strategy Class A 13,355.47 26.33% PERSHING LLC Fund P. O. BOX 2052 JERSEY CITY, NJ 07303-10040 Inverse Russell 2000(R) Strategy Class A 10,997.80 21.62% AMERITRADE INC Fund PO BOX 2226 OMAHA NE 68103-2236 Inverse Russell 2000(R) Strategy Class A 7,391.42 14.55% FIRST CLEARING, LLC Fund 2801 MARKET STREET SAINT LOUIS, MO 63139
K-27
PERCENTAGE AMOUNT OF OF THE NAME OF THE FUND SHARE CLASS SHARES OWNED CLASS NAME AND ADDRESS OF THE BENEFICIAL OWNER ------------------------------------------------------------------------------------------------------------------------------- Inverse Russell 2000(R) Strategy Class A 3,214.59 6.35% LPL FINANCIAL Fund 9785 TOWNE CENTRE DRIVE SAN DIEGO CA 92121-2052 Inverse Russell 2000(R) Strategy Class A 2,686.05 5.28% KIMBERLY A MCCARTY (RIRA) Fund 7167 SW ARNOLD RD PLATTSBURG, MO 64477 Inverse Russell 2000(R) Strategy Class C 40,422.82 40.96% FIRST CLEARING, LLC Fund 2801 MARKET STREET SAINT LOUIS, MO 63140 Inverse Russell 2000(R) Strategy Class C 8,476.43 8.58% PERSHING LLC Fund P. O. BOX 2052 JERSEY CITY, NJ 07303-10100 Inverse Russell 2000(R) Strategy Class C 5,303.13 5.37% SCOTT W KLEIN (RIRA) Fund 7490 MACEDAY LAKE ROAD WATERFORD, MI 48329 Inverse Russell 2000(R) Strategy Class H 1,269,478.60 57.65% SCHWAB, SPECIAL CUSTODY ACCOUNT Fund ATTN: MUTUAL FUNDS TEAM E, 101 MONTGOMERY STREET SAN FRANCISCO, CA 94104-4149 Inverse Russell 2000(R) Strategy Class H 301,887.87 13.71% NATIONAL FINANCIAL SVCS CORP Fund 200 LIBERTY STREET NEW YORK, NY 10281-10033 Inverse Russell 2000(R) Strategy Class H 273,949.07 12.68% LPL FINANCIAL Fund 9785 TOWNE CENTRE DRIVE SAN DIEGO CA 92121-2049 Inverse S&P 500 Strategy Fund Advisor Class 343,629.97 50.63% TD AMERITRADE INC. PO BOX 2226 OMAHA, NE 68103-2245 Inverse S&P 500 Strategy Fund Advisor Class 111,042.53 16.37% LPL FINANCIAL 9785 TOWNE CENTRE DRIVE SAN DIEGO CA 92121-2043 Inverse S&P 500 Strategy Fund Advisor Class 84,529.16 12.45% NATIONWIDE TRUST COMPANY P.O. BOX 182029 COLUMBUS, OH 43218-2041 Inverse S&P 500 Strategy Fund Advisor Class 36,454.08 5.37% NATIONWIDE TRUST COMPANY P.O. BOX 182029 COLUMBUS, OH 43218-2029 Inverse S&P 500 Strategy Fund Class A 91,551.17 24.07% AMERITRADE INC PO BOX 2226 OMAHA NE 68103-2229 Inverse S&P 500 Strategy Fund Class A 55,610.62 14.58% PERSHING LLC P. O. BOX 2052 JERSEY CITY, NJ 07303-10095 Inverse S&P 500 Strategy Fund Class A 39,324.96 10.32% LPL FINANCIAL 9785 TOWNE CENTRE DRIVE SAN DIEGO CA 92121-2039 Inverse S&P 500 Strategy Fund Class A 30,883.89 8.11% FIRST CLEARING, LLC 2801 MARKET STREET SAINT LOUIS, MO 63141 Inverse S&P 500 Strategy Fund Class A 24,981.30 6.55% MG Trust Company 700 17th Street Denver, CO 80202
K-28
PERCENTAGE AMOUNT OF OF THE NAME OF THE FUND SHARE CLASS SHARES OWNED CLASS NAME AND ADDRESS OF THE BENEFICIAL OWNER ------------------------------------------------------------------------------------------------------------------------------- Inverse S&P 500 Strategy Fund Class C 159,630.45 34.80% FIRST CLEARING, LLC 2801 MARKET STREET SAINT LOUIS, MO 63142 Inverse S&P 500 Strategy Fund Class C 85,713.29 18.72% DONALDSON LUFKIN JENRETTE, SECURITIES CORPORATION INC. P.O. BOX 2052 JERSEY CITY, NJ 07303 Inverse S&P 500 Strategy Fund Class C 35,871.99 7.82% NFS LLC P O BOX 876 PARK CITY, UT 84060 Inverse S&P 500 Strategy Fund Class C 25,436.45 5.55% LPL FINANCIAL 9785 TOWNE CENTRE DRIVE SAN DIEGO CA 92121-2040 Inverse S&P 500 Strategy Fund Class C 23,013.26 5.02% MORGAN STANLEY SMITH BARNEY HARBORSIDE FINANCIAL CENTER, PLAZA 2, 3RD FLOOR JERSEY CITY, NJ 07319 Inverse S&P 500 Strategy Fund Investor Class 5,811,646.78 55.10% SCHWAB, SPECIAL CUSTODY ACCOUNT ATTN: MUTUAL FUNDS TEAM E, 101 MONTGOMERY STREET SAN FRANCISCO, CA 94104-4150 Inverse S&P 500 Strategy Fund Investor Class 1,979,572.12 18.77% NATIONAL FINANCIAL SVCS CORP 200 LIBERTY STREET NEW YORK, NY 10281-10034 Inverse S&P 500 Strategy Fund Investor Class 532,133.38 5.05% TD AMERITRADE INC. PO BOX 2226 OMAHA, NE 68103-2246 Investor2 Money Market Class B 220,760.65 6.64% NFS LLC 5 ANNELLO WAY MIDDLETOWN, CT 06457 Investor2 Money Market Class C 484,457.26 19.57% ALBERT R AITKIN (IRA) 13737 FAIRLAWN AVE APPLE VALLEY, MN 55124 Investor2 Money Market Class C 134,440.21 5.43% RODNEY L ZENT (403B) 8418 SHADOW OAKS COLLEGE STA TX 77845-4602 Japan 2x Strategy Fund Class A 47,080.72 51.54% FIRST CLEARING, LLC 2801 MARKET STREET SAINT LOUIS, MO 63143 Japan 2x Strategy Fund Class A 29,505.94 32.31% PERSHING LLC P. O. BOX 2052 JERSEY CITY, NJ 07303-10109 Japan 2x Strategy Fund Class A 6,627.38 7.25% PENSON FINANCIAL SERVICES, INC. 1700 PACIFIC AVENUE, SUITE 1400 DALLAS, TX 75202 Japan 2x Strategy Fund Class C 2,594.48 25.44% LPL FINANCIAL 9785 TOWNE CENTRE DRIVE SAN DIEGO CA 92121-2046 Japan 2x Strategy Fund Class C 1,507.16 14.78% RBC CAPITAL MARKETS CORP 12525 58TH AVENUE NORTH PLYMOUTH MN 55442-1521 Japan 2x Strategy Fund Class C 1,412.48 13.86% PERSHING LLC P. O. BOX 2052 JERSEY CITY, NJ 07303-10041
K-29
PERCENTAGE AMOUNT OF OF THE NAME OF THE FUND SHARE CLASS SHARES OWNED CLASS NAME AND ADDRESS OF THE BENEFICIAL OWNER ------------------------------------------------------------------------------------------------------------------------------- Japan 2x Strategy Fund Class C 1,129.61 11.08% RBC CAPITAL MARKETS CORP 2511 BRIDLE CREEK TRAIL CHANHASSEN MN 55317-9372 Japan 2x Strategy Fund Class C 1,078.00 10.57% STERLING TRUST CO. PO BOX 2526 WACO, TX 76702-2527 Japan 2x Strategy Fund Class C 850.69 8.34% FIRST CLEARING, LLC 2801 MARKET STREET SAINT LOUIS, MO 63144 Japan 2x Strategy Fund Class H 36,407.67 23.12% NATIONAL FINANCIAL SVCS CORP 200 LIBERTY STREET NEW YORK, NY 10281-10035 Japan 2x Strategy Fund Class H 18,658.05 11.85% TRUST COMPANY OF AMERICA P O BOX 6503 ENGLEWOOD, CO 80128 Japan 2x Strategy Fund Class H 18,333.32 11.64% LPL FINANCIAL 9785 TOWNE CENTRE DRIVE SAN DIEGO CA 92121-2044 Japan 2x Strategy Fund Class H 16,744.81 10.63% ARNOLD GALMAN 1000 ROCK CREEK RD BRYN MAWR, PA 19010 Japan 2x Strategy Fund Class H 10,555.68 6.70% SCHWAB, SPECIAL CUSTODY ACCOUNT ATTN: MUTUAL FUNDS TEAM E, 101 MONTGOMERY STREET SAN FRANCISCO, CA 94104-4151 Leisure Fund Advisor Class 7,498.29 34.54% NATIONAL FINANCIAL SVCS CORP 200 LIBERTY STREET NEW YORK, NY 10281-10036 Leisure Fund Advisor Class 4,189.22 19.30% GENWORTH FINANCIAL TRUST COMPANY 3200 N CENTRAL, SUITE 612 PHOENIX, AZ 85014 Leisure Fund Advisor Class 3,402.07 15.67% NATIONWIDE TRUST COMPANY P.O. BOX 182029 COLUMBUS, OH 43218-2042 Leisure Fund Advisor Class 2,605.40 11.94% LPL FINANCIAL 9785 TOWNE CENTRE DRIVE SAN DIEGO CA 92121-2031 Leisure Fund Class A 6,101.68 40.21% PERSHING LLC P. O. BOX 2052 JERSEY CITY, NJ 07303-10042 Leisure Fund Class A 1,072.05 7.07% AMERICAN ENTERPRISE INV SVCS 707 2ND AVENUE SOUTH MINNEAPOLIS, MN 55404 Leisure Fund Class A 844.97 5.57% JOHN F ST JOHN (IRA) 107 CROSSWIND CT CORAOPOLIS, PA 15108-9166 Leisure Fund Class A 819.30 5.40% FIRST CLEARING, LLC 2801 MARKET STREET SAINT LOUIS, MO 63145 Leisure Fund Class C 2,667.79 24.78% PERSHING LLC P. O. BOX 2052 JERSEY CITY, NJ 07303-10101
K-30
PERCENTAGE AMOUNT OF OF THE NAME OF THE FUND SHARE CLASS SHARES OWNED CLASS NAME AND ADDRESS OF THE BENEFICIAL OWNER ------------------------------------------------------------------------------------------------------------------------------- Leisure Fund Class C 1,864.99 17.33% CHARLES F ELLIS (IRA) PO BOX 1616 HILLTOP LAKES, TX 77871 Leisure Fund Class C 1,331.85 12.38% STIFEL NICOLAUS & CO INC. 501 NORTH BROADWAY ST LOUIS MO 63102 Leisure Fund Class C 1,190.96 11.06% FIRST CLEARING, LLC 2801 MARKET STREET SAINT LOUIS, MO 63146 Leisure Fund Class C 562.16 5.22% SCHWAB, SPECIAL CUSTODY ACCOUNT ATTN: MUTUAL FUNDS TEAM E, 101 MONTGOMERY STREET SAN FRANCISCO, CA 94104-4152 Leisure Fund Investor Class 27,852.17 51.15% SCHWAB, SPECIAL CUSTODY ACCOUNT ATTN: MUTUAL FUNDS TEAM E, 101 MONTGOMERY STREET SAN FRANCISCO, CA 94104-4153 Leisure Fund Investor Class 7,193.39 13.21% NATIONAL FINANCIAL SVCS CORP 200 LIBERTY STREET NEW YORK, NY 10281-10037 Leisure Fund Investor Class 4,976.44 9.14% ROBERT P BUCHENBERGER TRUST 8602 EAST AMHERST DRIVE, UNIT F DENVER, CO 80231 Long Short Equity Strategy Fund Class A 60,211.89 41.19% RYDEX ALTERNATIVE STRATEGIES ALLOCATION FUND 9601 BLACKWELL RD, STE 500 ROCKVILLE, MD 20853 Long Short Equity Strategy Fund Class A 25,107.88 17.18% RYDEX EPT MODERATE 9601 BLACKWELL RD, STE 500 ROCKVILLE, MD 20853 Long Short Equity Strategy Fund Class A 24,333.13 16.64% TRUST COMPANY OF AMERICA P O BOX 6503 ENGLEWOOD, CO 80119 Long Short Equity Strategy Fund Class A 9,576.83 6.55% RAYMOND JAMES & ASSOC INC. 25222 PRADO DEL MISTERIO CALABASAS CA 91302-3600222 Long Short Equity Strategy Fund Class C 2,077.14 25.40% MORGAN KEEGAN & CO. 5026 KINGSWOOD DRIVE ROSWELL GA 30075 Long Short Equity Strategy Fund Class C 1,429.90 17.49% LPL FINANCIAL 9785 TOWNE CENTRE DRIVE SAN DIEGO CA 92121-2030 Long Short Equity Strategy Fund Class C 1,038.44 12.70% ROBERT W BAIRD & CO. INC. 777 EAST WISCONSIN AVENUE MILWAUKEE WI 53202-5391 Long Short Equity Strategy Fund Class C 760.40 9.30% PERSHING LLC P. O. BOX 2052 JERSEY CITY, NJ 07303-10043 Long Short Equity Strategy Fund Class C 429.17 5.25% RYDEX DISTRIBUTORS 9601 BLACKWELL RD, STE 500 ROCKVILLE, MD 20857 Long Short Equity Strategy Fund Class H 23,483.70 33.19% RYDEX VA ALTERNATIVE STRATEGIES, ALLOCATION FUND 9601 BLACKWELL RD, STE 500 ROCKVILLE, MD 20852
K-31
PERCENTAGE AMOUNT OF OF THE NAME OF THE FUND SHARE CLASS SHARES OWNED CLASS NAME AND ADDRESS OF THE BENEFICIAL OWNER ------------------------------------------------------------------------------------------------------------------------------- Long Short Equity Strategy Fund Class H 18,444.27 26.07% RYDEX EPT MODERATE -VA 9601 BLACKWELL RD, STE 500 ROCKVILLE, MD 20852 Long Short Equity Strategy Fund Class H 14,777.66 20.89% SCHWAB, SPECIAL CUSTODY ACCOUNT ATTN: MUTUAL FUNDS TEAM E, 101 MONTGOMERY STREET SAN FRANCISCO, CA 94104-4154 Long Short Equity Strategy Fund Institutional 4,168.82 90.67% SCHWAB, SPECIAL CUSTODY ACCOUNT Class ATTN: MUTUAL FUNDS TEAM E, 101 MONTGOMERY STREET SAN FRANCISCO, CA 94104-4155 Long Short Equity Strategy Fund Institutional 429.03 9.33% RYDEX DISTRIBUTORS Class 9601 BLACKWELL RD, STE 500 ROCKVILLE, MD 20858 Long Short Internet Rate Strategy Class A 133,794.55 7.98% PERSHING LLC Fund P. O. BOX 2052 JERSEY CITY, NJ 07303-10044 Long Short Internet Rate Strategy Class A 117,759.77 7.04% RYDEX EPT MODERATE Fund 9601 BLACKWELL RD, STE 500 ROCKVILLE, MD 20854 Long Short Internet Rate Strategy Class A 100,114.48 5.98% RYDEX ALTERNATIVE STRATEGIES ALLOCATION Fund FUND 9601 BLACKWELL RD, STE 500 ROCKVILLE, MD 20854 Long Short Internet Rate Strategy Class C 143,228.84 19.20% LPL FINANCIAL Fund 9785 TOWNE CENTRE DRIVE SAN DIEGO CA 92121-1990 Long Short Internet Rate Strategy Class C 134,374.93 18.07% FIRST CLEARING, LLC Fund 2801 MARKET STREET SAINT LOUIS, MO 63147 Long Short Internet Rate Strategy Class H 432,515.84 29.30% SCHWAB, SPECIAL CUSTODY ACCOUNT Fund ATTN: MUTUAL FUNDS TEAM E, 101 MONTGOMERY STREET SAN FRANCISCO, CA 94104-4156 Long Short Internet Rate Strategy Class H 349,195.27 23.66% NATIONAL FINANCIAL SVCS CORP Fund 200 LIBERTY STREET NEW YORK, NY 10281-10038 Long Short Internet Rate Strategy Class H 272,104.80 18.41% LPL FINANCIAL Fund 9785 TOWNE CENTRE DRIVE SAN DIEGO CA 92121-2042 Long Short Internet Rate Strategy Class H 157,824.81 10.69% TD AMERITRADE INC. Fund PO BOX 2226 OMAHA, NE 68103-2247 Long Short Internet Rate Strategy Class H 87,235.65 5.92% RYDEX EPT MODERATE -VA Fund 9601 BLACKWELL RD, STE 500 ROCKVILLE, MD 20853 Long Short Internet Rate Strategy Class H 79,490.29 5.39% PERSHING LLC Fund P. O. BOX 2052 JERSEY CITY, NJ 07303-10045 Long Short Internet Rate Strategy Institutional 862,305.77 53.69% SCHWAB, SPECIAL CUSTODY ACCOUNT Fund Class ATTN: MUTUAL FUNDS TEAM E, 101 MONTGOMERY STREET SAN FRANCISCO, CA 94104-4157
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PERCENTAGE AMOUNT OF OF THE NAME OF THE FUND SHARE CLASS SHARES OWNED CLASS NAME AND ADDRESS OF THE BENEFICIAL OWNER ------------------------------------------------------------------------------------------------------------------------------- Long Short Internet Rate Strategy Institutional 302,980.44 18.96% PERSHING LLC Fund Class P. O. BOX 2052 JERSEY CITY, NJ 07303-10046 Long Short Internet Rate Strategy Institutional 148,481.91 9.25% NATIONAL FINANCIAL SVCS CORP Fund Class 200 LIBERTY STREET NEW YORK, NY 10281-10001 Long Short Internet Rate Strategy Institutional 110,779.14 6.90% FIRST CLEARING, LLC Fund Class 2801 MARKET STREET SAINT LOUIS, MO 63148 Long Short Internet Rate Strategy Institutional 93,711.04 5.84% RSBCO Attn: Operations Fund Class P.O. Drawer 1410 Ruston LA 712731410 Long Short Internet Rate Strategy Institutional 85,191.62 5.30% TD AMERITRADE INC. Fund Class PO BOX 2226 OMAHA, NE 68103-2248 Long/Short Commodities Class A 1,304,710.69 30.42% MORGAN STANLEY SMITH BARNEY Strategy Fund HARBORSIDE FINANCIAL CENTER, PLAZA 2, 3RD FLOOR JERSEY CITY, NJ 07320 Long/Short Commodities Class A 546,030.28 11.42% PERSHING LLC Strategy Fund P. O. BOX 2052 JERSEY CITY, NJ 07303-10047 Long/Short Commodities Class C 202,619.60 15.05% FIRST CLEARING, LLC Strategy Fund 2801 MARKET STREET SAINT LOUIS, MO 63149 Long/Short Commodities Class C 143,653.81 10.68% LPL FINANCIAL Strategy Fund 9785 TOWNE CENTRE DRIVE SAN DIEGO CA 92121-2033 Long/Short Commodities Class C 125,521.62 9.33% MORGAN STANLEY SMITH BARNEY Strategy Fund HARBORSIDE FINANCIAL CENTER, PLAZA 2, 3RD FLOOR JERSEY CITY, NJ 07321 Long/Short Commodities Class C 75,425.63 5.63% PERSHING LLC Strategy Fund P. O. BOX 2052 JERSEY CITY, NJ 07303-10048 Long/Short Commodities Class H 2,237,471.10 25.86% NATIONAL FINANCIAL SVCS CORP Strategy Fund 200 LIBERTY STREET NEW YORK, NY 10281-10039 Long/Short Commodities Class H 1,746,430.71 20.18% SCHWAB, SPECIAL CUSTODY ACCOUNT Strategy Fund ATTN: MUTUAL FUNDS TEAM E, 101 MONTGOMERY STREET SAN FRANCISCO, CA 94104-4158 Long/Short Commodities Class H 1,242,510.07 14.36% FIRST CLEARING, LLC Strategy Fund 2801 MARKET STREET SAINT LOUIS, MO 63150 Long/Short Commodities Class H 1,412,961.46 13.47% LPL FINANCIAL Strategy Fund 9785 TOWNE CENTRE DRIVE SAN DIEGO CA 92121-2032 Long/Short Commodities Class H 454,740.88 5.26% MERRILL LYNCH, PIERCE, FENNER & SMITH, INC. Strategy Fund 4800 DEER LAKE DRIVE E, 3RD FLOOR JACKSONVILLE, FL 32247
K-33
PERCENTAGE AMOUNT OF OF THE NAME OF THE FUND SHARE CLASS SHARES OWNED CLASS NAME AND ADDRESS OF THE BENEFICIAL OWNER ------------------------------------------------------------------------------------------------------------------------------- Long/Short Commodities Class Y 416.50 100.00% RYDEX DISTRIBUTORS Strategy Fund 9601 BLACKWELL RD, STE 500 ROCKVILLE, MD 20859 Long/Short Commodities Institutional 741,026.42 64.72% PERSHING LLC Strategy Fund Class P. O. BOX 2052 JERSEY CITY, NJ 07303-10049 Long/Short Commodities Institutional 292,567.33 25.43% SCHWAB, SPECIAL CUSTODY ACCOUNT Strategy Fund Class ATTN: MUTUAL FUNDS TEAM E, 101 MONTGOMERY STREET SAN FRANCISCO, CA 94104-4159 Long/Short Commodities Institutional 83,422.73 7.25% NATIONAL FINANCIAL SVCS CORP Strategy Fund Class 200 LIBERTY STREET NEW YORK, NY 10281-10002 Managed Futures Strategy Fund Class A 14,404,699.74 53.76% MORGAN STANLEY SMITH BARNEY HARBORSIDE FINANCIAL CENTER, PLAZA 2, 3RD FLOOR JERSEY CITY, NJ 07322 Managed Futures Strategy Fund Class C 806,951.04 16.88% MORGAN STANLEY SMITH BARNEY HARBORSIDE FINANCIAL CENTER, PLAZA 2, 3RD FLOOR JERSEY CITY, NJ 07323 Managed Futures Strategy Fund Class C 660,695.10 13.82% FIRST CLEARING, LLC 2801 MARKET STREET SAINT LOUIS, MO 63151 Managed Futures Strategy Fund Class C 439,439.46 8.53% PERSHING LLC P. O. BOX 2052 JERSEY CITY, NJ 07303-10050 Managed Futures Strategy Fund Class C 431,339.50 7.92% LPL FINANCIAL 9785 TOWNE CENTRE DRIVE SAN DIEGO CA 92121-1983 Managed Futures Strategy Fund Class H 15,074,480.68 36.38% MORGAN STANLEY SMITH BARNEY, HOUSE ACCOUNT 700 RED BROOK BLVD OWINGS MILLS, MD 21122 Managed Futures Strategy Fund Class H 7,178,401.30 17.32% SCHWAB, SPECIAL CUSTODY ACCOUNT ATTN: MUTUAL FUNDS TEAM E, 101 MONTGOMERY STREET SAN FRANCISCO, CA 94104-4160 Managed Futures Strategy Fund Class H 4,620,206.08 11.15% NATIONAL FINANCIAL SVCS CORP 200 LIBERTY STREET NEW YORK, NY 10281-10040 Managed Futures Strategy Fund Class H 3,393,874.64 8.19% FIRST CLEARING, LLC 2801 MARKET STREET SAINT LOUIS, MO 63152 Managed Futures Strategy Fund Class H 2,434,240.98 5.87% TD AMERITRADE INC. PO BOX 2226 OMAHA, NE 68103-2249 Managed Futures Strategy Fund Class Y 16,077,996.04 98.03% SEI Private Trust Co. Attn: Mutual Funds Administrator One Freedom Valley Drive Oaks, PA 19456
K-34
PERCENTAGE AMOUNT OF OF THE NAME OF THE FUND SHARE CLASS SHARES OWNED CLASS NAME AND ADDRESS OF THE BENEFICIAL OWNER ------------------------------------------------------------------------------------------------------------------------------- Managed Futures Strategy Fund Institutional 2,537,895.46 57.58% SCHWAB, SPECIAL CUSTODY ACCOUNT Class ATTN: MUTUAL FUNDS TEAM E, 101 MONTGOMERY STREET SAN FRANCISCO, CA 94104-4161 Managed Futures Strategy Fund Institutional 1,639,680.62 37.20% NATIONAL FINANCIAL SVCS CORP Class 200 LIBERTY STREET NEW YORK, NY 10281-10003 Mid-Cap 1.5x Strategy Fund Class A 8,125.69 29.56% PERSHING LLC P. O. BOX 2052 JERSEY CITY, NJ 07303-10051 Mid-Cap 1.5x Strategy Fund Class A 3,372.22 12.27% STIFEL NICOLAUS & CO INC. 501 NORTH BROADWAY ST LOUIS MO 63106 Mid-Cap 1.5x Strategy Fund Class A 3,055.73 11.11% MORGAN STANLEY SMITH BARNEY, HOUSE ACCOUNT 700 RED BROOK BLVD OWINGS MILLS, MD 21123 Mid-Cap 1.5x Strategy Fund Class A 2,651.11 9.64% RBC CAPITAL MARKETS CORP 7202 112TH AVE SE NEW CASTLE WA 98056-1021 Mid-Cap 1.5x Strategy Fund Class A 2,229.17 8.10% LPL FINANCIAL 9785 TOWNE CENTRE DRIVE SAN DIEGO CA 92121-1971 Mid-Cap 1.5x Strategy Fund Class A 1,384.86 5.03% FIRST CLEARING, LLC 2801 MARKET STREET SAINT LOUIS, MO 63153 Mid-Cap 1.5x Strategy Fund Class C 54,814.18 27.23% D A DAVIDSON & CO PO BOX 5015 GREAT FALLS MT 59405 Mid-Cap 1.5x Strategy Fund Class C 15,911.45 7.90% FIRST CLEARING, LLC 2801 MARKET STREET SAINT LOUIS, MO 63154 Mid-Cap 1.5x Strategy Fund Class C 12,195.58 6.09% PERSHING LLC P. O. BOX 2052 JERSEY CITY, NJ 07303-10052 Mid-Cap 1.5x Strategy Fund Class C 11,132.96 5.52% SCHWAB, SPECIAL CUSTODY ACCOUNT ATTN: MUTUAL FUNDS TEAM E, 101 MONTGOMERY STREET SAN FRANCISCO, CA 94104-4162 Mid-Cap 1.5x Strategy Fund Class H 121,999.66 38.79% NATIONAL FINANCIAL SVCS CORP 200 LIBERTY STREET NEW YORK, NY 10281-10041 Mid-Cap 1.5x Strategy Fund Class H 29,991.99 9.53% SCHWAB, SPECIAL CUSTODY ACCOUNT ATTN: MUTUAL FUNDS TEAM E, 101 MONTGOMERY STREET SAN FRANCISCO, CA 94104-4163 Mid-Cap 1.5x Strategy Fund Class H 21,274.93 6.77% D A DAVIDSON & CO PO BOX 5015 GREAT FALLS MT 59406 Multi-Hedge Strategies Fund Class A 140,253.00 23.29% MORGAN STANLEY SMITH BARNEY HARBORSIDE FINANCIAL CENTER, PLAZA 2, 3RD FLOOR JERSEY CITY, NJ 07324
K-35
PERCENTAGE AMOUNT OF OF THE NAME OF THE FUND SHARE CLASS SHARES OWNED CLASS NAME AND ADDRESS OF THE BENEFICIAL OWNER ------------------------------------------------------------------------------------------------------------------------------- Multi-Hedge Strategies Fund Class A 114,324.83 18.98% RYDEX ALTERNATIVE STRATEGIES ALLOCATION FUND 9601 BLACKWELL RD, STE 500 ROCKVILLE, MD 20855 Multi-Hedge Strategies Fund Class A 113,106.53 18.78% RYDEX EPT MODERATE 9601 BLACKWELL RD, STE 500 ROCKVILLE, MD 20855 Multi-Hedge Strategies Fund Class A 44,813.33 7.44% FIRST CLEARING, LLC 2801 MARKET STREET SAINT LOUIS, MO 63155 Multi-Hedge Strategies Fund Class A 35,757.08 5.96% LPL FINANCIAL 9785 TOWNE CENTRE DRIVE SAN DIEGO CA 92121-1977 Multi-Hedge Strategies Fund Class C 141,536.11 28.17% MORGAN STANLEY SMITH BARNEY HARBORSIDE FINANCIAL CENTER, PLAZA 2, 3RD FLOOR JERSEY CITY, NJ 07325 Multi-Hedge Strategies Fund Class C 121,528.92 24.19% FIRST CLEARING, LLC 2801 MARKET STREET SAINT LOUIS, MO 63156 Multi-Hedge Strategies Fund Class C 45,516.50 9.04% LPL FINANCIAL 9785 TOWNE CENTRE DRIVE SAN DIEGO CA 92121-2008 Multi-Hedge Strategies Fund Class C 36,252.25 7.17% PERSHING LLC P. O. BOX 2052 JERSEY CITY, NJ 07303-10053 Multi-Hedge Strategies Fund Class H 237,136.72 19.20% SCHWAB, SPECIAL CUSTODY ACCOUNT ATTN: MUTUAL FUNDS TEAM E, 101 MONTGOMERY STREET SAN FRANCISCO, CA 94104-4164 Multi-Hedge Strategies Fund Class H 212,324.61 17.19% NATIONAL FINANCIAL SVCS CORP 200 LIBERTY STREET NEW YORK, NY 10281-10042 Multi-Hedge Strategies Fund Class H 163,815.00 13.27% FIRST CLEARING, LLC 2801 MARKET STREET SAINT LOUIS, MO 63157 Multi-Hedge Strategies Fund Class H 129,172.25 10.46% PERSHING LLC P. O. BOX 2052 JERSEY CITY, NJ 07303-10054 Multi-Hedge Strategies Fund Class H 68,741.91 5.60% LPL FINANCIAL 9785 TOWNE CENTRE DRIVE SAN DIEGO CA 92121-1970 Multi-Hedge Strategies Fund Class H 64,297.08 5.21% TD AMERITRADE INC. PO BOX 2226 OMAHA, NE 68103-2250 Multi-Hedge Strategies Fund Class H 61,700.11 5.00% MERRILL LYNCH, PIERCE, FENNER & SMITH, INC. 4800 DEER LAKE DRIVE E, 3RD FLOOR JACKSONVILLE, FL 32248 Multi-Hedge Strategies Fund Institutional 12,704.47 96.32% NATIONAL FINANCIAL SVCS CORP Class 200 LIBERTY STREET NEW YORK, NY 10281-10004
K-36
PERCENTAGE AMOUNT OF OF THE NAME OF THE FUND SHARE CLASS SHARES OWNED CLASS NAME AND ADDRESS OF THE BENEFICIAL OWNER ------------------------------------------------------------------------------------------------------------------------------- NASDAQ-100(R) Fund Advisor Class 171,667.00 20.68% NATIONWIDE TRUST COMPANY P.O. BOX 182029 COLUMBUS, OH 43218-2043 NASDAQ-100(R) Fund Advisor Class 155,209.58 18.70% NATIONAL FINANCIAL SVCS CORP 200 LIBERTY STREET NEW YORK, NY 10281-10043 NASDAQ-100(R) Fund Advisor Class 112,975.01 13.64% LPL FINANCIAL 9785 TOWNE CENTRE DRIVE SAN DIEGO CA 92121-2016 NASDAQ-100(R) Fund Advisor Class 87,332.70 10.52% TD AMERITRADE INC. PO BOX 2226 OMAHA, NE 68103-2251 NASDAQ-100(R) Fund Advisor Class 81,670.91 9.84% SEI Private Trust Co Attn: Mutual Fund Admin One Freedom Valley Dr Oaks, PA 19456 NASDAQ-100(R) Fund Class A 124,550.66 22.49% AMERITRADE INC PO BOX 2226 OMAHA NE 68103-2241 NASDAQ-100(R) Fund Class A 123,363.40 22.36% MORGAN STANLEY SMITH BARNEY HARBORSIDE FINANCIAL CENTER, PLAZA 2, 3RD FLOOR JERSEY CITY, NJ 07326 NASDAQ-100(R) Fund Class A 91,446.19 16.57% PERSHING LLC P. O. BOX 2052 JERSEY CITY, NJ 07303-10055 NASDAQ-100(R) Fund Class A 61,853.69 11.21% CAPITAL BANK & TRUST COMPANY 8515 E ORCHARD ROAD, 2T2 ENGLEWOOD, CO 80111 NASDAQ-100(R) Fund Class A 33,149.12 6.01% FIRST CLEARING, LLC 2801 MARKET STREET SAINT LOUIS, MO 63158 NASDAQ-100(R) Fund Class C 155,443.85 16.61% FIRST CLEARING, LLC 2801 MARKET STREET SAINT LOUIS, MO 63159 NASDAQ-100(R) Fund Class C 104,290.05 11.15% MORGAN STANLEY SMITH BARNEY HARBORSIDE FINANCIAL CENTER, PLAZA 2, 3RD FLOOR JERSEY CITY, NJ 07327 NASDAQ-100(R) Fund Class C 64,364.78 6.90% NFS LLC SHELBY TWP, MI 48315 NASDAQ-100(R) Fund Class C 63,913.56 6.87% DONALDSON LUFKIN JENRETTE, SECURITIES CORPORATION INC. P.O. BOX 2052 JERSEY CITY, NJ 07303-9998-10006 NASDAQ-100(R) Fund Class C 53,149.22 5.69% LPL FINANCIAL 9785 TOWNE CENTRE DRIVE SAN DIEGO CA 92121-2050 NASDAQ-100(R) Fund Investor Class 11,930,992.21 32.80% SCHWAB, SPECIAL CUSTODY ACCOUNT ATTN: MUTUAL FUNDS TEAM E, 101 MONTGOMERY STREET SAN FRANCISCO, CA 94104-4165
K-37
PERCENTAGE AMOUNT OF OF THE NAME OF THE FUND SHARE CLASS SHARES OWNED CLASS NAME AND ADDRESS OF THE BENEFICIAL OWNER ------------------------------------------------------------------------------------------------------------------------------- NASDAQ-100(R) Fund Investor Class 6,221,279.09 17.11% NATIONAL FINANCIAL SVCS CORP 200 LIBERTY STREET NEW YORK, NY 10281-10044 NASDAQ-100(R) Fund Investor Class 2,162,665.58 5.95% TD AMERITRADE INC. PO BOX 2226 OMAHA, NE 68103-2252 Nova Fund Advisor Class 67,898.77 40.95% NATIONWIDE TRUST COMPANY P.O. BOX 182029 COLUMBUS, OH 43218-2044 Nova Fund Advisor Class 16,570.00 9.99% TD AMERITRADE INC. PO BOX 2226 OMAHA, NE 68103-2253 Nova Fund Advisor Class 13,968.03 8.42% NATIONAL FINANCIAL SVCS CORP 200 LIBERTY STREET NEW YORK, NY 10281-10045 Nova Fund Advisor Class 9,957.03 6.00% PERSHING LLC P. O. BOX 2052 JERSEY CITY, NJ 07303-10056 Nova Fund Class A 7,688.80 13.13% MORGAN STANLEY SMITH BARNEY, HOUSE ACCOUNT 700 RED BROOK BLVD OWINGS MILLS, MD 21124 Nova Fund Class A 7,045.53 12.03% PERSHING LLC P. O. BOX 2052 JERSEY CITY, NJ 07303-10057 Nova Fund Class A 5,719.77 9.76% RBC CAPITAL MARKETS CORP 282 KAREN DR ORANGE CT 06477-2936 Nova Fund Class A 5,434.38 9.28% FIRST CLEARING, LLC 2801 MARKET STREET SAINT LOUIS, MO 63160 Nova Fund Class A 5,439.78 9.28% LPL FINANCIAL 9785 TOWNE CENTRE DRIVE SAN DIEGO CA 92121-1988 Nova Fund Class A 4,388.74 7.49% NTC & CO PO Box 173859 DENVER CO 80217 Nova Fund Class A 3,730.19 6.37% NFS LLC 928 GENERAL GEORGE PATTON ROAD NASHVILLE, TN 37221 Nova Fund Class A 3,082.79 5.26% CATHERINE D FECHNER 411 POPLAR AVE MAYWOOD, NJ 07607 Nova Fund Class A 3,012.96 5.14% DENNIS H WILLIAMSON (RIRA) 1013 LOUGHBOROUGH CT WHEATON, IL 60189 Nova Fund Class C 115,495.88 28.79% FIRST CLEARING, LLC 2801 MARKET STREET SAINT LOUIS, MO 63161 Nova Fund Class C 64,614.99 16.10% DONALDSON LUFKIN JENRETTE, SECURITIES CORPORATION INC. P.O. BOX 2052 JERSEY CITY, NJ 07303-9998-10007
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PERCENTAGE AMOUNT OF OF THE NAME OF THE FUND SHARE CLASS SHARES OWNED CLASS NAME AND ADDRESS OF THE BENEFICIAL OWNER ------------------------------------------------------------------------------------------------------------------------------- Nova Fund Investor Class 327,737.67 23.31% NATIONAL FINANCIAL SVCS CORP 200 LIBERTY STREET NEW YORK, NY 10281-10046 Nova Fund Investor Class 310,578.39 22.09% SCHWAB, SPECIAL CUSTODY ACCOUNT ATTN: MUTUAL FUNDS TEAM E, 101 MONTGOMERY STREET SAN FRANCISCO, CA 94104-4166 Nova Fund Investor Class 95,735.03 6.81% TD AMERITRADE INC. PO BOX 2226 OMAHA, NE 68103-2254 Precious Metals Fund Advisor Class 219,645.80 60.19% TRUST COMPANY OF AMERICA P O BOX 6503 ENGLEWOOD, CO 80116 Precious Metals Fund Advisor Class 50,253.29 13.77% NATIONAL FINANCIAL SVCS CORP 200 LIBERTY STREET NEW YORK, NY 10281-10047 Precious Metals Fund Advisor Class 24,960.42 6.84% NATIONWIDE TRUST COMPANY P.O. BOX 182029 COLUMBUS, OH 43218-2045 Precious Metals Fund Advisor Class 24,260.67 6.65% TD AMERITRADE INC. PO BOX 2226 OMAHA, NE 68103-2255 Precious Metals Fund Class A 26,976.90 23.69% PERSHING LLC P. O. BOX 2052 JERSEY CITY, NJ 07303-10058 Precious Metals Fund Class A 15,471.36 13.56% FIRST CLEARING, LLC 2801 MARKET STREET SAINT LOUIS, MO 63162 Precious Metals Fund Class A 15,461.24 13.49% LPL FINANCIAL 9785 TOWNE CENTRE DRIVE SAN DIEGO CA 92121-1985 Precious Metals Fund Class A 11,678.01 10.26% NFS LLC 4302 W QUAIL RIDGE DR BOISE, ID 83703-3843 Precious Metals Fund Class A 7,306.16 6.40% AMERITRADE INC PO BOX 2226 OMAHA NE 68103-2230 Precious Metals Fund Class A 6,302.11 5.53% WILLIAMS MARITAL TRUST 6413 JOE ED WAY BAKERSFIELD, CA 93308 Precious Metals Fund Class C 147,310.29 32.63% MORGAN STANLEY SMITH BARNEY HARBORSIDE FINANCIAL CENTER PLAZA 2, 3RD FLOOR JERSEY CITY, NJ 07328 Precious Metals Fund Class C 54,408.55 12.05% FIRST CLEARING, LLC 3130 COUNTRY BLUFF DR. ST. CHARLES MO 63301-3741 Precious Metals Fund Class C 32,912.10 7.29% KINDIG KURT L INC 501 NORTH BROADWAY ST LOUIS MO 63102 Precious Metals Fund Class C 29,558.17 6.47% PERSHING LLC P. O. BOX 2052 JERSEY CITY, NJ 07303-10059
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PERCENTAGE AMOUNT OF OF THE NAME OF THE FUND SHARE CLASS SHARES OWNED CLASS NAME AND ADDRESS OF THE BENEFICIAL OWNER ------------------------------------------------------------------------------------------------------------------------------- Precious Metals Fund Class C 26,931.58 5.94% LPL FINANCIAL 9785 TOWNE CENTRE DRIVE SAN DIEGO CA 92121-2022 Precious Metals Fund Investor Class 201,113.67 17.30% NATIONAL FINANCIAL SVCS CORP 200 LIBERTY STREET NEW YORK, NY 10281-10048 Precious Metals Fund Investor Class 128,247.88 11.03% SCHWAB, SPECIAL CUSTODY ACCOUNT ATTN: MUTUAL FUNDS TEAM E, 101 MONTGOMERY STREET SAN FRANCISCO, CA 94104-4167 Real Estate Fund Class A 41,201.24 32.42% AMERITRADE INC PO BOX 2226 OMAHA NE 68103-2238 Real Estate Fund Class A 29,832.26 23.47% RYDEX EPT MODERATE 9601 BLACKWELL RD, STE 500 ROCKVILLE, MD 20856 Real Estate Fund Class A 27,311.01 21.49% RYDEX ALTERNATIVE STRATEGIES ALLOCATION FUND 9601 BLACKWELL RD, STE 500 ROCKVILLE, MD 20856 Real Estate Fund Class A 12,467.75 9.81% PERSHING LLC P. O. BOX 2052 JERSEY CITY, NJ 07303-10060 Real Estate Fund Class A 8,356.44 6.59% LPL FINANCIAL 9785 TOWNE CENTRE DRIVE SAN DIEGO CA 92121-1968 Real Estate Fund Class C 12,652.37 25.58% SCHWAB, SPECIAL CUSTODY ACCOUNT ATTN: MUTUAL FUNDS TEAM E, 101 MONTGOMERY STREET SAN FRANCISCO, CA 94104-4168 Real Estate Fund Class C 8,228.99 16.63% PERSHING LLC P. O. BOX 2052 JERSEY CITY, NJ 07303-10061 Real Estate Fund Class C 7,993.36 16.15% LPL FINANCIAL 9785 TOWNE CENTRE DRIVE SAN DIEGO CA 92121-2051 Real Estate Fund Class C 5,962.18 12.06% FIRST CLEARING, LLC 2801 MARKET STREET SAINT LOUIS, MO 63163 Real Estate Fund Class H 90,219.71 33.78% NATIONAL FINANCIAL SVCS CORP 200 LIBERTY STREET NEW YORK, NY 10281-10049 Real Estate Fund Class H 29,983.48 11.23% FIRST CLEARING, LLC 2801 MARKET STREET SAINT LOUIS, MO 63164 Real Estate Fund Class H 24,174.66 9.05% SCHWAB, SPECIAL CUSTODY ACCOUNT ATTN: MUTUAL FUNDS TEAM E, 101 MONTGOMERY STREET SAN FRANCISCO, CA 94104-4169 Real Estate Fund Class H 19,632.58 7.35% NATIONWIDE TRUST COMPANY P.O. BOX 182029 COLUMBUS, OH 43218-2046
K-40
PERCENTAGE AMOUNT OF OF THE NAME OF THE FUND SHARE CLASS SHARES OWNED CLASS NAME AND ADDRESS OF THE BENEFICIAL OWNER ------------------------------------------------------------------------------------------------------------------------------- Retailing Fund Advisor Class 27,749.53 29.62% TRUST COMPANY OF AMERICA P O BOX 6503 ENGLEWOOD, CO 80121 Retailing Fund Advisor Class 16,509.16 17.63% MG Trust Company 700 17th Street, Suite 300 Denver CO 80202 Retailing Fund Advisor Class 11,145.63 11.90% NATIONWIDE TRUST COMPANY P.O. BOX 182029 COLUMBUS, OH 43218-2047 Retailing Fund Advisor Class 10,355.06 11.05% NATIONAL FINANCIAL SVCS CORP 200 LIBERTY STREET NEW YORK, NY 10281-10050 Retailing Fund Advisor Class 8,960.51 9.56% GENWORTH FINANCIAL TRUST COMPANY 3200 N CENTRAL, SUITE 612 PHOENIX, AZ 85015 Retailing Fund Class A 6,273.08 27.97% FIRST CLEARING, LLC 2801 MARKET STREET SAINT LOUIS, MO 63165 Retailing Fund Class A 6,124.67 27.32% PERSHING LLC P. O. BOX 2052 JERSEY CITY, NJ 07303-10102 Retailing Fund Class A 1,215.32 5.42% LPL FINANCIAL 9785 TOWNE CENTRE DRIVE SAN DIEGO CA 92121-2000 Retailing Fund Class C 70,489.48 81.24% NFS LLC 433 AVE T BROOKLYN, NY 11223 Retailing Fund Investor Class 252,082.93 45.34% NATIONAL FINANCIAL SVCS CORP 200 LIBERTY STREET NEW YORK, NY 10281-10051 Retailing Fund Investor Class 118,121.54 21.25% SCHWAB, SPECIAL CUSTODY ACCOUNT ATTN: MUTUAL FUNDS TEAM E, 101 MONTGOMERY STREET SAN FRANCISCO, CA 94104-4170 Retailing Fund Investor Class 41,433.87 7.44% PERSHING LLC P. O. BOX 2052 JERSEY CITY, NJ 07303-10062 Russell 2000(R) 1.5x Strategy Class A 7,410.27 43.07% PERSHING LLC Fund P. O. BOX 2052 JERSEY CITY, NJ 07303-10063 Russell 2000(R) 1.5x Strategy Class A 3,442.02 20.00% MORGAN STANLEY SMITH BARNEY, HOUSE Fund ACCOUNT 700 RED BROOK BLVD OWINGS MILLS, MD 21125 Russell 2000(R) 1.5x Strategy Class A 1,328.93 7.72% PO BOX 509002 Fund DALLAS TX 75250 Russell 2000(R) 1.5x Strategy Class A 1,058.72 6.15% STIFEL NICOLAUS & CO INC. Fund 501 NORTH BROADWAY ST LOUIS MO 63107 Russell 2000(R) 1.5x Strategy Class A 939.35 5.46% NFS LLC Fund 1969 EAST 1ST STREET BROOKLYN, NY 11223
K-41
PERCENTAGE AMOUNT OF OF THE NAME OF THE FUND SHARE CLASS SHARES OWNED CLASS NAME AND ADDRESS OF THE BENEFICIAL OWNER ------------------------------------------------------------------------------------------------------------------------------- Russell 2000(R) 1.5x Strategy Class C 10,329.93 14.56% DONALDSON LUFKIN JENRETTE, SECURITIES Fund CORPORATION INC. P.O. BOX 2052 JERSEY CITY, NJ 07303-9998-10008 Russell 2000(R) 1.5x Strategy Class C 9,186.54 12.97% FIRST CLEARING, LLC Fund 2801 MARKET STREET SAINT LOUIS, MO 63166 Russell 2000(R) 1.5x Strategy Class C 5,657.17 7.97% LPL FINANCIAL Fund 9785 TOWNE CENTRE DRIVE SAN DIEGO CA 92121-1973 Russell 2000(R) 1.5x Strategy Class C 5,516.63 7.79% MORGAN STANLEY SMITH BARNEY, HOUSE Fund ACCOUNT 700 RED BROOK BLVD OWINGS MILLS, MD 21126 Russell 2000(R) 1.5x Strategy Class C 5,418.58 7.65% SCHWAB, SPECIAL CUSTODY ACCOUNT Fund ATTN: MUTUAL FUNDS TEAM E, 101 MONTGOMERY STREET SAN FRANCISCO, CA 94104-4171 Russell 2000(R) 1.5x Strategy Class C 5,274.82 7.43% STIFEL NICOLAUS & CO INC. Fund 501 NORTH BROADWAY ST LOUIS MO 63110 Russell 2000(R) 1.5x Strategy Class C 4,535.20 6.40% NFS LLC Fund 69 HOWLAND DR PONTE VEDRA, FL 32081 Russell 2000(R) 1.5x Strategy Class C 3,782.99 5.34% MORGAN STANLEY SMITH BARNEY Fund HARBORSIDE FINANCIAL CENTER PLAZA 2, 3RD FLOOR JERSEY CITY, NJ 07329 Russell 2000(R) 1.5x Strategy Class H 101,161.25 36.13% NATIONAL FINANCIAL SVCS CORP Fund 200 LIBERTY STREET NEW YORK, NY 10281-10052 Russell 2000(R) 1.5x Strategy Class H 39,089.75 13.96% SCHWAB, SPECIAL CUSTODY ACCOUNT Fund ATTN: MUTUAL FUNDS TEAM E, 101 MONTGOMERY STREET SAN FRANCISCO, CA 94104-4172 Russell 2000(R) Fund Class A 5,071.43 21.83% PAUL D ROHNER (RIRA) 29 T ST LAKE LOTAWANA, MO 64086 Russell 2000(R) Fund Class A 4,238.91 18.24% PERSHING LLC P. O. BOX 2052 JERSEY CITY, NJ 07303-10064 Russell 2000(R) Fund Class A 4,133.02 17.79% FIRST CLEARING, LLC 2801 MARKET STREET SAINT LOUIS, MO 63167 Russell 2000(R) Fund Class A 2,835.88 12.20% LPL FINANCIAL 9785 TOWNE CENTRE DRIVE SAN DIEGO CA 92121-2013 Russell 2000(R) Fund Class C 165,100.52 69.05% FIRST CLEARING, LLC 2801 MARKET STREET SAINT LOUIS, MO 63168 Russell 2000(R) Fund Class C 25,217.77 10.53% PERSHING LLC P. O. BOX 2052 JERSEY CITY, NJ 07303-10065
K-42
PERCENTAGE AMOUNT OF OF THE NAME OF THE FUND SHARE CLASS SHARES OWNED CLASS NAME AND ADDRESS OF THE BENEFICIAL OWNER ------------------------------------------------------------------------------------------------------------------------------- Russell 2000(R) Fund Class C 16,424.85 6.83% LPL FINANCIAL 9785 TOWNE CENTRE DRIVE SAN DIEGO CA 92121-1994 Russell 2000(R) Fund Class H 38,914.28 26.16% NATIONAL FINANCIAL SVCS CORP 200 LIBERTY STREET NEW YORK, NY 10281-10053 Russell 2000(R) Fund Class H 36,052.72 24.24% SCHWAB, SPECIAL CUSTODY ACCOUNT ATTN: MUTUAL FUNDS TEAM E, 101 MONTGOMERY STREET SAN FRANCISCO, CA 94104-4173 Russell 2000(R) Fund Class H 29,828.71 20.05% TD AMERITRADE INC. PO BOX 2226 OMAHA, NE 68103-2256 S&P 500 Fund Class A 293,937.05 61.00% AMERITRADE INC PO BOX 2226 OMAHA NE 68103-2249 S&P 500 Fund Class A 83,008.02 17.20% PERSHING LLC P. O. BOX 2052 JERSEY CITY, NJ 07303-10066 S&P 500 Fund Class A 65,599.76 13.63% LPL FINANCIAL 9785 TOWNE CENTRE DRIVE SAN DIEGO CA 92121-1972 S&P 500 Fund Class C 77,648.91 20.88% FIRST CLEARING, LLC 2801 MARKET STREET SAINT LOUIS, MO 63169 S&P 500 Fund Class C 33,741.78 9.06% PERSHING LLC P. O. BOX 2052 JERSEY CITY, NJ 07303-10067 S&P 500 Fund Class C 31,000.09 8.36% WEDBUSH MORGAN SECURITIES 1000 WILSHIRE BLVD. LOS ANGELES CA 90017 S&P 500 Fund Class C 26,151.33 6.98% LPL FINANCIAL 9785 TOWNE CENTRE DRIVE SAN DIEGO CA 92121-1999 S&P 500 Fund Class H 1,398,317.71 27.75% NATIONAL FINANCIAL SVCS CORP 200 LIBERTY STREET NEW YORK, NY 10281-10054 S&P 500 Fund Class H 1,192,485.81 23.67% GENWORTH FINANCIAL TRUST COMPANY 3200 N CENTRAL, SUITE 612 PHOENIX, AZ 85016 S&P 500 Fund Class H 993,339.43 19.72% TRUST COMPANY OF AMERICA P O BOX 6503 ENGLEWOOD, CO 80112 S&P 500 Fund Class H 389,786.22 7.74% SCHWAB, SPECIAL CUSTODY ACCOUNT ATTN: MUTUAL FUNDS TEAM E, 101 MONTGOMERY STREET SAN FRANCISCO, CA 94104-4174 S&P 500 Fund Class H 276,379.43 5.23% PERSHING LLC P. O. BOX 2052 JERSEY CITY, NJ 07303-10103 S&P 500 Pure Growth Fund Class A 117,092.09 58.56% PERSHING LLC P. O. BOX 2052 JERSEY CITY, NJ 07303-10068
K-43
PERCENTAGE AMOUNT OF OF THE NAME OF THE FUND SHARE CLASS SHARES OWNED CLASS NAME AND ADDRESS OF THE BENEFICIAL OWNER ------------------------------------------------------------------------------------------------------------------------------- S&P 500 Pure Growth Fund Class A 35,506.86 17.76% LPL FINANCIAL 9785 TOWNE CENTRE DRIVE SAN DIEGO CA 92121-2001 S&P 500 Pure Growth Fund Class A 13,790.62 6.89% MORGAN STANLEY SMITH BARNEY HARBORSIDE FINANCIAL CENTER, PLAZA 2, 3RD FLOOR JERSEY CITY, NJ 07330 S&P 500 Pure Growth Fund Class C 105,669.50 36.83% FIRST CLEARING, LLC 2801 MARKET STREET SAINT LOUIS, MO 63170 S&P 500 Pure Growth Fund Class H 905,485.15 58.32% NATIONAL FINANCIAL SVCS CORP 200 LIBERTY STREET NEW YORK, NY 10281-10055 S&P 500 Pure Growth Fund Class H 156,213.97 10.06% NATIONWIDE TRUST COMPANY P.O. BOX 182029 COLUMBUS, OH 43218-2048 S&P 500 Pure Growth Fund Class H 98,735.85 6.36% SCHWAB, SPECIAL CUSTODY ACCOUNT ATTN: MUTUAL FUNDS TEAM E, 101 MONTGOMERY STREET SAN FRANCISCO, CA 94104-4175 S&P 500 Pure Growth Fund Class H 80,117.92 5.16% MERRILL LYNCH, PIERCE, FENNER & SMITH, INC. 4800 DEER LAKE DRIVE E, 3RD FLOOR JACKSONVILLE, FL 32249 S&P 500 Pure Value Fund Class A 5,018.82 35.69% FIRST CLEARING, LLC 2801 MARKET STREET SAINT LOUIS, MO 63171 S&P 500 Pure Value Fund Class A 4,956.34 35.25% LPL FINANCIAL 9785 TOWNE CENTRE DRIVE SAN DIEGO CA 92121-2002 S&P 500 Pure Value Fund Class A 1,032.06 7.34% GARY S REID (IRA) 401 BIRMINGHAM RD BURBANK, CA 91504 S&P 500 Pure Value Fund Class C 8,153.23 14.64% LPL FINANCIAL 9785 TOWNE CENTRE DRIVE SAN DIEGO CA 92121-1987 S&P 500 Pure Value Fund Class C 7,124.50 12.76% FIRST CLEARING, LLC 2801 MARKET STREET SAINT LOUIS, MO 63172 S&P 500 Pure Value Fund Class C 5,286.05 9.47% AMANDA BOHLMAN(RIRA) 22711 WESTCHESTER ROAD SHAKER HEIGHTS, OH 44122-2978 S&P 500 Pure Value Fund Class C 3,206.28 5.74% HENRY BAELE (RIRA) 6271 MAYPINE FARM BLVD HIGHLAND HEIGHTS, OH 44143 S&P 500 Pure Value Fund Class H 98,767.30 56.47% NATIONAL FINANCIAL SVCS CORP 200 LIBERTY STREET NEW YORK, NY 10281-10056 S&P 500 Pure Value Fund Class H 17,152.38 9.81% NATIONWIDE TRUST COMPANY P.O. BOX 182029 COLUMBUS, OH 43218-2049
K-44
PERCENTAGE AMOUNT OF OF THE NAME OF THE FUND SHARE CLASS SHARES OWNED CLASS NAME AND ADDRESS OF THE BENEFICIAL OWNER ------------------------------------------------------------------------------------------------------------------------------- S&P 500 Pure Value Fund Class H 13,765.10 7.87% SCHWAB, SPECIAL CUSTODY ACCOUNT ATTN: MUTUAL FUNDS TEAM E, 101 MONTGOMERY STREET SAN FRANCISCO, CA 94104-4176 S&P 500 Pure Value Fund Class H 13,361.37 7.64% TD AMERITRADE INC. PO BOX 2226 OMAHA, NE 68103-2257 S&P MidCap 400 Pure Growth Class A 373,636.78 35.53% DAVENPORT & COMPANY LLC Fund 737 HARBOUR POINT DR WEST PALM BCH FL 33410-3416 S&P MidCap 400 Pure Growth Class A 217,906.42 20.35% AMERITRADE INC Fund PO BOX 2226 OMAHA NE 68103-2247 S&P MidCap 400 Pure Growth Class A 148,439.70 14.09% MORGAN STANLEY SMITH BARNEY Fund HARBORSIDE FINANCIAL CENTER, PLAZA 2, 3RD FLOOR JERSEY CITY, NJ 07331 S&P MidCap 400 Pure Growth Class A 72,972.74 6.94% PERSHING LLC Fund P. O. BOX 2052 JERSEY CITY, NJ 07303-10069 S&P MidCap 400 Pure Growth Class A 56,754.17 5.42% NFS LLC Fund 1088 NEW BRITAIN AVE WEST HARTFORD, CT 06110 S&P MidCap 400 Pure Growth Class A 56,675.56 5.37% FIRST CLEARING, LLC Fund 2801 MARKET STREET SAINT LOUIS, MO 63173 S&P MidCap 400 Pure Growth Class C 104,334.69 34.52% FIRST CLEARING, LLC Fund 2801 MARKET STREET SAINT LOUIS, MO 63174 S&P MidCap 400 Pure Growth Class C 36,994.75 12.22% NFS LLC Fund 7444 S MARION AVE TULSA, OK 74136 S&P MidCap 400 Pure Growth Class C 32,969.69 10.89% PERSHING LLC Fund P. O. BOX 2052 JERSEY CITY, NJ 07303-10070 S&P MidCap 400 Pure Growth Class C 26,767.54 8.82% LPL FINANCIAL Fund 9785 TOWNE CENTRE DRIVE SAN DIEGO CA 92121-2029 S&P MidCap 400 Pure Growth Class C 16,758.11 5.54% MORGAN STANLEY SMITH BARNEY, HOUSE Fund ACCOUNT 700 RED BROOK BLVD OWINGS MILLS, MD 21127 S&P MidCap 400 Pure Growth Class H 1,400,732.05 30.48% NATIONAL FINANCIAL SVCS CORP Fund 200 LIBERTY STREET NEW YORK, NY 10281-10057 S&P MidCap 400 Pure Growth Class H 1,274,993.76 27.74% SCHWAB, SPECIAL CUSTODY ACCOUNT Fund ATTN: MUTUAL FUNDS TEAM E, 101 MONTGOMERY STREET SAN FRANCISCO, CA 94104-4177 S&P MidCap 400 Pure Growth Class H 460,288.56 10.01% FIRST CLEARING, LLC Fund 2801 MARKET STREET SAINT LOUIS, MO 63175
K-45
PERCENTAGE AMOUNT OF OF THE NAME OF THE FUND SHARE CLASS SHARES OWNED CLASS NAME AND ADDRESS OF THE BENEFICIAL OWNER ------------------------------------------------------------------------------------------------------------------------------- S&P MidCap 400 Pure Growth Class H 376,098.65 8.18% TD AMERITRADE INC. Fund PO BOX 2226 OMAHA, NE 68103-2258 S&P MidCap 400 Pure Growth Class H 297,004.15 6.04% PERSHING LLC Fund P. O. BOX 2052 JERSEY CITY, NJ 07303-10071 S&P MidCap 400 Pure Value Class A 6,117.46 28.39% FIRST CLEARING, LLC Fund 2801 MARKET STREET SAINT LOUIS, MO 63176 S&P MidCap 400 Pure Value Class A 3,707.41 17.22% LPL FINANCIAL Fund 9785 TOWNE CENTRE DRIVE SAN DIEGO CA 92121-1992 S&P MidCap 400 Pure Value Class A 1,897.11 8.79% PERSHING LLC Fund P. O. BOX 2052 JERSEY CITY, NJ 07303-10072 S&P MidCap 400 Pure Value Class C 9,084.09 15.22% FIRST CLEARING, LLC Fund 2801 MARKET STREET SAINT LOUIS, MO 63177 S&P MidCap 400 Pure Value Class C 4,369.15 7.31% LPL FINANCIAL Fund 9785 TOWNE CENTRE DRIVE SAN DIEGO CA 92121-2023 S&P MidCap 400 Pure Value Class C 3,728.40 6.24% PERSHING LLC Fund P. O. BOX 2052 JERSEY CITY, NJ 07303-10073 S&P MidCap 400 Pure Value Class H 54,234.34 29.20% NATIONWIDE TRUST COMPANY Fund P.O. BOX 182029 COLUMBUS, OH 43218-2050 S&P MidCap 400 Pure Value Class H 43,392.24 23.36% TRUST COMPANY OF AMERICA Fund P O BOX 6503 ENGLEWOOD, CO 80129 S&P MidCap 400 Pure Value Class H 11,637.06 6.27% NATIONAL FINANCIAL SVCS CORP Fund 200 LIBERTY STREET NEW YORK, NY 10281-10058 S&P MidCap 400 Pure Value Class H 10,882.14 5.86% FIRST CLEARING, LLC Fund 2801 MARKET STREET SAINT LOUIS, MO 63178 S&P SmallCap 600 Pure Growth Class A 246,763.69 88.17% AMERITRADE INC Fund PO BOX 2226 OMAHA NE 68103-2245 S&P SmallCap 600 Pure Growth Class A 21,384.15 7.64% FIRST CLEARING, LLC Fund 2801 MARKET STREET SAINT LOUIS, MO 63179 S&P SmallCap 600 Pure Growth Class C 36,836.83 46.77% NFS LLC Fund 7444 S MARION DR TULSA, OK 74136 S&P SmallCap 600 Pure Growth Class C 14,959.26 18.99% FIRST CLEARING, LLC Fund 2801 MARKET STREET SAINT LOUIS, MO 63180 S&P SmallCap 600 Pure Growth Class H 87,591.18 33.08% TRUST COMPANY OF AMERICA Fund P O BOX 6503 ENGLEWOOD, CO 80130
K-46
PERCENTAGE AMOUNT OF OF THE NAME OF THE FUND SHARE CLASS SHARES OWNED CLASS NAME AND ADDRESS OF THE BENEFICIAL OWNER ------------------------------------------------------------------------------------------------------------------------------- S&P SmallCap 600 Pure Growth Class H 20,928.28 7.90% NATIONWIDE TRUST COMPANY Fund P.O. BOX 182029 COLUMBUS, OH 43218-2051 S&P SmallCap 600 Pure Growth Class H 18,588.27 7.02% SCHWAB, SPECIAL CUSTODY ACCOUNT Fund ATTN: MUTUAL FUNDS TEAM E, 101 MONTGOMERY STREET SAN FRANCISCO, CA 94104-4178 S&P SmallCap 600 Pure Growth Class H 15,419.78 5.82% FIRST CLEARING, LLC Fund 2801 MARKET STREET SAINT LOUIS, MO 63181 S&P SmallCap 600 Pure Growth Class H 14,796.32 5.59% NATIONAL FINANCIAL SVCS CORP Fund 200 LIBERTY STREET NEW YORK, NY 10281-10059 S&P SmallCap 600 Pure Value Class A 8,237.01 20.10% PERSHING LLC Fund P. O. BOX 2052 JERSEY CITY, NJ 07303-10074 S&P SmallCap 600 Pure Value Class A 6,881.74 16.81% LPL FINANCIAL Fund 9785 TOWNE CENTRE DRIVE SAN DIEGO CA 92121-2015 S&P SmallCap 600 Pure Value Class A 6,703.88 16.37% FIRST CLEARING, LLC Fund 2801 MARKET STREET SAINT LOUIS, MO 63182 S&P SmallCap 600 Pure Value Class A 4,149.92 10.13% AMERITRADE INC Fund PO BOX 2226 OMAHA NE 68103-2244 S&P SmallCap 600 Pure Value Class A 3,110.99 7.60% MORGAN STANLEY SMITH BARNEY Fund HARBORSIDE FINANCIAL CENTER, PLAZA 2, 3RD FLOOR JERSEY CITY, NJ 07332 S&P SmallCap 600 Pure Value Class A 2,068.21 5.05% STIFEL NICOLAUS & CO INC. Fund 501 NORTH BROADWAY ST LOUIS MO 63103 S&P SmallCap 600 Pure Value Class C 38,712.22 32.09% PERSHING LLC Fund P. O. BOX 2052 JERSEY CITY, NJ 07303-10075 S&P SmallCap 600 Pure Value Class C 10,524.76 8.72% FIRST CLEARING, LLC Fund 2801 MARKET STREET SAINT LOUIS, MO 63183 S&P SmallCap 600 Pure Value Class C 8,566.27 7.10% LPL FINANCIAL Fund 9785 TOWNE CENTRE DRIVE SAN DIEGO CA 92121-1978 S&P SmallCap 600 Pure Value Class H 65,705.95 20.35% NATIONWIDE TRUST COMPANY Fund P.O. BOX 182029 COLUMBUS, OH 43218-2052 S&P SmallCap 600 Pure Value Class H 62,867.86 19.45% PERSHING LLC Fund P. O. BOX 2052 JERSEY CITY, NJ 07303-10104 S&P SmallCap 600 Pure Value Class H 53,168.39 16.47% SCHWAB, SPECIAL CUSTODY ACCOUNT Fund ATTN: MUTUAL FUNDS TEAM E, 101 MONTGOMERY STREET SAN FRANCISCO, CA 94104-4179
K-47
PERCENTAGE AMOUNT OF OF THE NAME OF THE FUND SHARE CLASS SHARES OWNED CLASS NAME AND ADDRESS OF THE BENEFICIAL OWNER ------------------------------------------------------------------------------------------------------------------------------- S&P SmallCap 600 Pure Value Class H 51,587.48 15.98% NATIONAL FINANCIAL SVCS CORP Fund 200 LIBERTY STREET NEW YORK, NY 10281-10060 Strengthening Dollar 2x Strategy Class A 430,089.54 31.78% PERSHING LLC Fund P. O. BOX 2052 JERSEY CITY, NJ 07303-10076 Strengthening Dollar 2x Strategy Class A 339,932.28 25.13% NFS LLC Fund 13 DOXEY DR GLEN COVE, NY 11542 Strengthening Dollar 2x Strategy Class A 292,174.00 21.57% AMERITRADE INC Fund PO BOX 2226 OMAHA NE 68103-2231 Strengthening Dollar 2x Strategy Class A 83,107.71 6.14% TRUST COMPANY OF AMERICA Fund P O BOX 6503 ENGLEWOOD, CO 80118 Strengthening Dollar 2x Strategy Class C 57,824.83 20.56% PERSHING LLC Fund P. O. BOX 2052 JERSEY CITY, NJ 07303-10077 Strengthening Dollar 2x Strategy Class C 56,503.58 20.10% FIRST CLEARING, LLC Fund 2801 MARKET STREET SAINT LOUIS, MO 63184 Strengthening Dollar 2x Strategy Class H 1,859,345.76 39.26% SCHWAB, SPECIAL CUSTODY ACCOUNT Fund ATTN: MUTUAL FUNDS TEAM E, 101 MONTGOMERY STREET SAN FRANCISCO, CA 94104-4180 Strengthening Dollar 2x Strategy Class H 1,216,154.55 25.68% NATIONAL FINANCIAL SVCS CORP Fund 200 LIBERTY STREET NEW YORK, NY 10281-10061 Strengthening Dollar 2x Strategy Class H 864,208.52 18.25% TD AMERITRADE INC. Fund PO BOX 2226 OMAHA, NE 68103-2259 Technology Fund Advisor Class 81,101.58 53.49% NATIONWIDE TRUST COMPANY P.O. BOX 182029 COLUMBUS, OH 43218-2053 Technology Fund Advisor Class 19,072.47 12.58% GENWORTH FINANCIAL TRUST COMPANY 3200 N CENTRAL, SUITE 612 PHOENIX, AZ 85017 Technology Fund Advisor Class 17,709.19 11.68% NATIONAL FINANCIAL SVCS CORP 200 LIBERTY STREET NEW YORK, NY 10281-10062 Technology Fund Class A 31,575.96 34.74% PERSHING LLC P. O. BOX 2052 JERSEY CITY, NJ 07303-10078 Technology Fund Class A 14,834.42 16.32% LPL FINANCIAL 9785 TOWNE CENTRE DRIVE SAN DIEGO CA 92121-2004 Technology Fund Class A 13,789.49 15.16% NFS LLC 10202 ADDISON CT BETHESDA, MD 20817
K-48
PERCENTAGE AMOUNT OF OF THE NAME OF THE FUND SHARE CLASS SHARES OWNED CLASS NAME AND ADDRESS OF THE BENEFICIAL OWNER ------------------------------------------------------------------------------------------------------------------------------- Technology Fund Class A 9,231.61 10.16% FIRST CLEARING, LLC 2801 MARKET STREET SAINT LOUIS, MO 63185 Technology Fund Class C 27,688.69 13.27% FIRST CLEARING, LLC 136 ALLEGANY ROAD STEVENSVILLE, MD 21666-3642 Technology Fund Class C 26,130.59 12.52% PERSHING LLC P. O. BOX 2052 JERSEY CITY, NJ 07303-10079 Technology Fund Investor Class 313,250.18 53.16% SCHWAB, SPECIAL CUSTODY ACCOUNT ATTN: MUTUAL FUNDS TEAM E, 101 MONTGOMERY STREET SAN FRANCISCO, CA 94104-4181 Technology Fund Investor Class 80,486.14 13.66% NATIONAL FINANCIAL SVCS CORP 200 LIBERTY STREET NEW YORK, NY 10281-10063 Technology Fund Investor Class 30,300.19 5.13% PERSHING LLC P. O. BOX 2052 JERSEY CITY, NJ 07303-10110 Telecommunications Fund Advisor Class 6,521.16 38.83% PERSHING LLC P. O. BOX 2052 JERSEY CITY, NJ 07303-10105 Telecommunications Fund Advisor Class 2,940.45 17.51% MAURICE W TAYLOR (SEP IRA) 1240 ZION RD BELLEFONTE, PA 16823 Telecommunications Fund Advisor Class 1,236.50 7.36% NATIONWIDE TRUST COMPANY P.O. BOX 182029 COLUMBUS, OH 43218-2054 Telecommunications Fund Advisor Class 1,230.14 7.33% NATIONAL FINANCIAL SVCS CORP 200 LIBERTY STREET NEW YORK, NY 10281-10064 Telecommunications Fund Class A 12,844.79 27.99% FIRST CLEARING, LLC 2801 MARKET STREET SAINT LOUIS, MO 63186 Telecommunications Fund Class A 10,285.42 22.41% UBS FINANCIAL SERVICES INC. 50 COLUMBIA RD BRANCHBURG NJ 08876-3519 Telecommunications Fund Class A 8,415.35 18.34% UBS FINANCIAL SERVICES INC. 50 COLUMBIA RD BRANCHBURG NJ 08876-3519 Telecommunications Fund Class A 2,463.80 5.36% PERSHING LLC P. O. BOX 2052 JERSEY CITY, NJ 07303-10080 Telecommunications Fund Class A 2,459.03 5.36% UBS FINANCIAL SERVICES INC. 807 BREAKWATER DR FORT COLLINS CO 80525-3303 Telecommunications Fund Class C 12,480.48 10.14% PERSHING LLC P. O. BOX 2052 JERSEY CITY, NJ 07303-10081 Telecommunications Fund Investor Class 28,743.18 17.38% SCHWAB, SPECIAL CUSTODY ACCOUNT ATTN: MUTUAL FUNDS TEAM E, 101 MONTGOMERY STREET SAN FRANCISCO, CA 94104-4182
K-49
PERCENTAGE AMOUNT OF OF THE NAME OF THE FUND SHARE CLASS SHARES OWNED CLASS NAME AND ADDRESS OF THE BENEFICIAL OWNER ------------------------------------------------------------------------------------------------------------------------------- Telecommunications Fund Investor Class 27,956.87 16.90% TD AMERITRADE INC. PO BOX 2226 OMAHA, NE 68103-2260 Telecommunications Fund Investor Class 18,342.07 11.09% NATIONAL FINANCIAL SVCS CORP 200 LIBERTY STREET NEW YORK, NY 10281-10065 Telecommunications Fund Investor Class 15,167.22 9.17% PERSHING LLC P. O. BOX 2052 JERSEY CITY, NJ 07303-10096 Telecommunications Fund Investor Class 12,654.07 7.66% STIFEL NICOLAUS & CO INC. 501 NORTH BROADWAY ST LOUIS MO 63111 Telecommunications Fund Investor Class 11,446.56 6.92% ROBERT P BUCHENBERGER TRUST 8602 EAST AMHERST DRIVE, UNIT F DENVER, CO 80231 Telecommunications Fund Investor Class 9,713.61 5.87% DUVEDAL ASSOCIATES PARTNERSHIP 129 WASHINGTON ST. WELLESLEY, MA 02481 Transportation Fund Advisor Class 4,887.03 27.94% NATIONWIDE TRUST COMPANY P.O. BOX 182029 COLUMBUS, OH 43218-2055 Transportation Fund Advisor Class 3,718.49 21.26% NATIONAL FINANCIAL SVCS CORP 200 LIBERTY STREET NEW YORK, NY 10281-10066 Transportation Fund Advisor Class 1,123.85 6.42% JANNEY MONTGOMERY SCOTT LLC 1801 MARKET STREET PHILADELPHIA, PA 19103-1675 Transportation Fund Advisor Class 934.91 5.35% PERSHING LLC P. O. BOX 2052 JERSEY CITY, NJ 07303-10082 Transportation Fund Advisor Class 912.13 5.21% TD AMERITRADE INC. PO BOX 2226 OMAHA, NE 68103-2261 Transportation Fund Class A 21,187.54 32.11% FIRST CLEARING, LLC 2801 MARKET STREET SAINT LOUIS, MO 63187 Transportation Fund Class A 14,964.77 22.71% LPL FINANCIAL 9785 TOWNE CENTRE DRIVE SAN DIEGO CA 92121-2041 Transportation Fund Class A 8,776.08 13.31% PERSHING LLC P. O. BOX 2052 JERSEY CITY, NJ 07303-10083 Transportation Fund Class A 7,968.95 12.08% UBS FINANCIAL SERVICES INC. 18 CHENAL CIRCLE LITTLE ROCK AR 72223-9566 Transportation Fund Class A 7,627.69 11.56% UBS FINANCIAL SERVICES INC. 50 COLUMBIA RD BRANCHBURG NJ 08876-3519 Transportation Fund Class C 18,181.45 47.14% LPL FINANCIAL 9785 TOWNE CENTRE DRIVE SAN DIEGO CA 92121-1997 Transportation Fund Class C 4,821.71 12.50% FIRST CLEARING, LLC 2801 MARKET STREET SAINT LOUIS, MO 63188
K-50
PERCENTAGE AMOUNT OF OF THE NAME OF THE FUND SHARE CLASS SHARES OWNED CLASS NAME AND ADDRESS OF THE BENEFICIAL OWNER ------------------------------------------------------------------------------------------------------------------------------- Transportation Fund Class C 3,826.33 9.93% PERSHING LLC P. O. BOX 2052 JERSEY CITY, NJ 07303-10084 Transportation Fund Class C 2,223.63 5.77% DANIEL R CERVEN (IRA) 2135 ESTEN RD QUAKERTOWN, PA 18951 Transportation Fund Class C 2,139.87 5.55% JANNEY MONTGOMERY SCOTT LLC 1801 MARKET STREET PHILADELPHIA, PA 19103-1675 Transportation Fund Investor Class 41,805.40 30.53% SCHWAB, SPECIAL CUSTODY ACCOUNT ATTN: MUTUAL FUNDS TEAM E, 101 MONTGOMERY STREET SAN FRANCISCO, CA 94104-4183 Transportation Fund Investor Class 32,142.45 23.47% NATIONAL FINANCIAL SVCS CORP 200 LIBERTY STREET NEW YORK, NY 10281-10067 Transportation Fund Investor Class 31,942.15 23.32% LPL FINANCIAL 9785 TOWNE CENTRE DRIVE SAN DIEGO CA 92121-1969 Transportation Fund Investor Class 11,632.53 8.49% FIRST CLEARING, LLC 2801 MARKET STREET SAINT LOUIS, MO 63189 U.S. Government Money Market Advisor Class 521,169,868.38 58.45% GENWORTH FINANCIAL TRUST COMPANY Fund 3200 N CENTRAL, SUITE 612 PHOENIX, AZ 85018 U.S. Government Money Market Advisor Class 207,343,310.90 23.24% TRUST COMPANY OF AMERICA Fund P O BOX 6503 ENGLEWOOD, CO 80123 U.S. Government Money Market Advisor Class 53,550,584.92 6.01% NATIONAL FINANCIAL SVCS CORP Fund 200 LIBERTY STREET NEW YORK, NY 10281-9999 U.S. Government Money Market Class A 11,247,472.99 28.19% PERSHING LLC Fund P. O. BOX 2052 JERSEY CITY, NJ 07303-10085 U.S. Government Money Market Class A 6,558,243.51 16.50% UMB BANK NA Fund ONE SECURITY PLACE TOPEKA, KS 66636-0001 U.S. Government Money Market Class A 5,598,050.08 14.08% FIDUCIARY TRUST COMPANY OF NEW HAMPSHIRE Fund ONE SECURITY BENEFIT PLACE TOPEKA, KS 66636-0001 U.S. Government Money Market Class A 3,454,663.37 8.70% FIRST CLEARING, LLC Fund 2801 MARKET STREET SAINT LOUIS, MO 63195 U.S. Government Money Market Class C 11,496,001.84 19.25% FIRST CLEARING CORPORATION Fund 3601 CATAMARAN DRIVE CORONA DEL MAR CA 92625-1209 U.S. Government Money Market Class C 3,760,341.96 6.18% DONALDSON LUFKIN JENRETTE, SECURITIES Fund CORPORATION INC. P.O. BOX 2052 JERSEY CITY, NJ 07303-9998-10009 U.S. Government Money Market Class C 3,487,639.67 5.92% LPL FINANCIAL Fund 9785 TOWNE CENTRE DRIVE SAN DIEGO CA 92121-2018 U.S. Government Money Market Class C 3,254,444.48 5.49% SOUTHWEST SECURITIES INC Fund PO BOX 509002 DALLAS TX 75250
K-51
PERCENTAGE AMOUNT OF OF THE NAME OF THE FUND SHARE CLASS SHARES OWNED CLASS NAME AND ADDRESS OF THE BENEFICIAL OWNER ------------------------------------------------------------------------------------------------------------------------------- U.S. Government Money Market Investor Class 365,464,065.11 40.47% NATIONAL FINANCIAL SVCS CORP Fund 200 LIBERTY STREET NEW YORK, NY 10281-10068 U.S. Long Short Momentum Class A 436,892.04 28.22% RYDEX EPT MODERATE Fund 9601 BLACKWELL RD, STE 500 ROCKVILLE, MD 20857 U.S. Long Short Momentum Class A 276,317.85 17.83% STEPHENS INC. Fund 111 CENTER STREET LITTLE ROCK AR 72201 U.S. Long Short Momentum Class A 185,288.34 11.97% FIRST CLEARING, LLC Fund 2801 MARKET STREET SAINT LOUIS, MO 63190 U.S. Long Short Momentum Class A 122,268.58 7.92% PERSHING LLC Fund P. O. BOX 2052 JERSEY CITY, NJ 07303-10086 U.S. Long Short Momentum Class C 844,787.04 26.32% FIRST CLEARING, LLC Fund 2801 MARKET STREET SAINT LOUIS, MO 63191 U.S. Long Short Momentum Class C 307,215.52 9.58% PERSHING LLC Fund P. O. BOX 2052 JERSEY CITY, NJ 07303-10087 U.S. Long Short Momentum Class C 280,068.53 8.73% MORGAN STANLEY SMITH BARNEY, HOUSE Fund ACCOUNT 700 RED BROOK BLVD OWINGS MILLS, MD 21128 U.S. Long Short Momentum Class C 278,857.78 8.67% LPL FINANCIAL Fund 9785 TOWNE CENTRE DRIVE SAN DIEGO CA 92121-2027 U.S. Long Short Momentum Class C 172,085.25 5.36% MORGAN STANLEY SMITH BARNEY Fund HARBORSIDE FINANCIAL CENTER, PLAZA 2, 3RD FLOOR JERSEY CITY, NJ 07333 U.S. Long Short Momentum Class H 2,522,810.40 48.42% SCHWAB, SPECIAL CUSTODY ACCOUNT Fund ATTN: MUTUAL FUNDS TEAM E, 101 MONTGOMERY STREET SAN FRANCISCO, CA 94104-4184 U.S. Long Short Momentum Class H 436,076.29 8.37% LPL FINANCIAL Fund 9785 TOWNE CENTRE DRIVE SAN DIEGO CA 92121-2019 U.S. Long Short Momentum Class H 375,289.19 7.20% UMB BANK NA Fund ONE SECURITY PLACE TOPEKA, KS 66636-0001 U.S. Long Short Momentum Class H 342,746.82 6.58% NATIONAL FINANCIAL SVCS CORP Fund 200 LIBERTY STREET NEW YORK, NY 10281-10069 U.S. Long Short Momentum Class H 266,548.32 5.08% DONALDSON LUFKIN JENRETTE, SECURITIES Fund CORPORATION INC. P.O. BOX 2052 JERSEY CITY, NJ 07303-9998-10010 Utilities Fund Advisor Class 47,141.64 35.53% LPL FINANCIAL 9785 TOWNE CENTRE DRIVE SAN DIEGO CA 92121-2048
K-52
PERCENTAGE AMOUNT OF OF THE NAME OF THE FUND SHARE CLASS SHARES OWNED CLASS NAME AND ADDRESS OF THE BENEFICIAL OWNER ------------------------------------------------------------------------------------------------------------------------------- Utilities Fund Advisor Class 33,625.73 25.40% TRUST COMPANY OF AMERICA P O BOX 6503 ENGLEWOOD, CO 80131 Utilities Fund Advisor Class 15,180.09 11.47% NATIONWIDE TRUST COMPANY P.O. BOX 182029 COLUMBUS, OH 43218-2056 Utilities Fund Advisor Class 8,550.59 6.46% TD AMERITRADE INC. PO BOX 2226 OMAHA, NE 68103-2262 Utilities Fund Class A 54,582.57 25.29% PERSHING LLC P. O. BOX 2052 JERSEY CITY, NJ 07303-10088 Utilities Fund Class A 37,572.85 17.40% MORGAN STANLEY SMITH BARNEY, HOUSE ACCOUNT 700 RED BROOK BLVD OWINGS MILLS, MD 21129 Utilities Fund Class A 24,185.47 11.22% LPL FINANCIAL 9785 TOWNE CENTRE DRIVE SAN DIEGO CA 92121-1993 Utilities Fund Class A 21,508.81 9.96% FIRST CLEARING, LLC 2801 MARKET STREET SAINT LOUIS, MO 63192 Utilities Fund Class A 16,858.13 7.82% NFS LLC 35 SHEA ROAD CAMBRIDGE, MA 02140 Utilities Fund Class A 15,397.23 7.15% AMERITRADE INC PO BOX 2226 OMAHA NE 68103-2228 Utilities Fund Class C 62,983.27 25.02% FIRST CLEARING, LLC 2801 MARKET STREET SAINT LOUIS, MO 63193 Utilities Fund Class C 61,441.74 24.35% PERSHING LLC P. O. BOX 2052 JERSEY CITY, NJ 07303-10089 Utilities Fund Investor Class 1,579,190.86 66.22% NATIONAL FINANCIAL SVCS CORP 200 LIBERTY STREET NEW YORK, NY 10281-10070 Utilities Fund Investor Class 316,055.67 13.19% PERSHING LLC P. O. BOX 2052 JERSEY CITY, NJ 07303-10111 Utilities Fund Investor Class 196,667.32 8.25% TD AMERITRADE INC. PO BOX 2226 OMAHA, NE 68103-2263 Weakening Dollar 2x Strategy Class A 129,556.28 48.15% PERSHING LLC Fund P. O. BOX 2052 JERSEY CITY, NJ 07303-10090 Weakening Dollar 2x Strategy Class A 24,522.37 9.09% SOUTHWEST SECURITIES INC Fund PO BOX 509002 DALLAS TX 75250 Weakening Dollar 2x Strategy Class A 16,243.55 6.02% NFS LLC Fund 200 LIBERTY STREET NEW YORK NY 10281
K-53
PERCENTAGE AMOUNT OF OF THE NAME OF THE FUND SHARE CLASS SHARES OWNED CLASS NAME AND ADDRESS OF THE BENEFICIAL OWNER ------------------------------------------------------------------------------------------------------------------------------- Weakening Dollar 2x Strategy Class A 15,000.00 5.57% Brown Brothers Harriman and Co. Fund 525 Washington Blvd Jersey City, NJ 07310 Weakening Dollar 2x Strategy Class C 32,972.21 22.45% PERSHING LLC Fund P. O. BOX 2052 JERSEY CITY, NJ 07303-10091 Weakening Dollar 2x Strategy Class C 25,593.37 17.43% MORGAN STANLEY SMITH BARNEY Fund HARBORSIDE FINANCIAL CENTER, PLAZA 2, 3RD FLOOR JERSEY CITY, NJ 07334 Weakening Dollar 2x Strategy Class C 25,443.89 17.33% FIRST CLEARING, LLC Fund 2801 MARKET STREET SAINT LOUIS, MO 63194 Weakening Dollar 2x Strategy Class C 13,097.79 8.94% NFS LLC Fund PO BOX 1289 NORTH PLATTE, NE 69103 Weakening Dollar 2x Strategy Class H 377,517.65 45.34% SCHWAB, SPECIAL CUSTODY ACCOUNT Fund ATTN: MUTUAL FUNDS TEAM E, 101 MONTGOMERY STREET SAN FRANCISCO, CA 94104-4185 Weakening Dollar 2x Strategy Class H 135,736.14 16.30% NATIONAL FINANCIAL SVCS CORP Fund 200 LIBERTY STREET NEW YORK, NY 10281-10071
---------------------------------------------- * A party holding in excess of 25% of the outstanding voting securities of a Fund is presumed to be a "control person" (as defined in the 1940 Act) of su ch Fund, based on the substantial ownership interest held and the party's resultant ability to influence vot ing on certain matters submitted for shareholder consideration. K-54 APPENDIX L MANAGEMENT OWNERSHIP As of the Record Date, the Directors and officers owned, of record and beneficially (unless otherwise indicated), as a group, the following of each Fund's outstanding securities: RYDEX SERIES FUNDS-MID-CAP 1.5x STRATEGY FUND
------------------------------------------------------------------------------------- TITLE OF THE CLASS AMOUNT OF SHARES OWNED PERCENTAGE OF THE CLASS ------------------------------------------------------------------------------------ ~~CLASS H 4,850.62 1.5%~~
RYDEX SERIES FUNDS-LONG SHORT EQUITY STRATEGY FUND
------------------------------------------------------------------------------------- TITLE OF THE CLASS AMOUNT OF SHARES OWNED PERCENTAGE OF THE CLASS ------------------------------------------------------------------------------------- ~~CLASS H 1,717.04 2.4%~~
RYDEX SERIES FUNDS-FINANCIAL SERVICES FUND
------------------------------------------------------------------------------------- TITLE OF THE CLASS AMOUNT OF SHARES OWNED PERCENTAGE OF THE CLASS ------------------------------------------------------------------------------------- ~~INVESTOR CLASS 1,754.58 2.8%~~
L-1 APPENDIX L NOMINATING COMMITTEE CHARTER I. THE COMMITTEE The Nominating Committee (the "Committee") of the Rydex Series Funds, Rydex Dynamic Funds, Rydex Variable Trust and Rydex ETF Trust (each a "Trust" and collectively "the Trusts") shall be composed of at least three members plus the Independent Chairman as an ex officio member pursuant to the following sentence, each of whom is a Trustee who is not an "interested person" of the Trusts ("Independent Trustee") as defined in Section 2(a)(19) of the Investment Company Act of 1940, as amended (the "1940 Act"). At any time when there is an Independent Chairman of the Board, the Independent Chairman shall be a full, voting member of the Committee, ex officio. The Board shall appoint the other members of the Committee and shall designate one member of the Committee to act as chairman of the Committee. All members of the Committee appointed by the Board shall serve at the pleasure of the Board. The role of the Committee shall be to assist the Board of Trustees of the Trusts (the "Board") in identifying and nominating individuals to serve as Independent Trustees of the Trusts. II. COMMITTEE FUNCTIONS AND RESPONSIBILITIES The Committee shall identify and recommend to the Independent Trustees candidates to serve as Independent Trustees, including those to be elected by the Shareholders or appointed by the Board to fill vacancies. For this purpose, the Committee shall canvas, recruit, interview and solicit candidates to serve as Independent Trustees. The Committee shall evaluate candidates' qualifications for Board membership in light of their background, knowledge and experience, in order to assure that the Board as a whole represents a proper mix of backgrounds and relevant skill sets. The Committee shall also determine whether each such candidate qualifies as not being an "interested person" of the Trusts in terms of both the letter and spirit of the 1940 Act, rules and regulations of the Securities and Exchange Commission ("SEC") adopted under said Act, and any other applicable standards of independence. Among other things, this determination requires the Committee to find the candidates to be independent from the investment advisers, principal underwriters and other principal service providers for the Trusts. The Committee shall also consider the effect of any relationships beyond those delineated in the 1940 Act or the rules and regulations thereunder that might impair independence, (e.g., business, financial or family relationships with investment advisers, principal underwriters or other service providers). Finally, the Committee shall consider the willingness and ability of each such candidate to devote the time and attention needed to perform the functions of an Independent Trustee. i. The Committee also shall evaluate and report to the Board concerning the qualifications of candidates to serve as "interested" Trustees of the Funds. ii. The Committee may adopt from time to time specific, minimum qualifications that the Committee believes a candidate must meet before M-1 being considered as a candidate for Board membership and shall comply with any rules adopted from time to time by the SEC regarding investment company nominating committees and the nomination of persons to be considered as candidates for Board membership. iii. The Committee shall review shareholder recommendations for nominations to fill vacancies on the Board if such recommendations are submitted in a timely fashion in writing and addressed to the Committee at the applicable Trust's offices. The Committee may adopt, by resolution, a policy regarding its procedures for considering candidates for the Board, including any recommended by shareholders. III. COMMITTEE PROCEDURES A. MEETINGS i. The Committee shall meet as needed in open or executive session. ii. The Committee may invite members of management, counsel to the Independent Trustees, Fund counsel, advisers and others to attend its meetings as it deems appropriate. iii. A majority of the members of the Committee shall constitute a quorum for the transaction of business at any meeting of the Committee. The action of a majority of the members of the Committee present at a meeting at which a quorum is present shall be the action of the Committee. The Committee may meet in person or by telephone, and the Committee may act by written consent, to the extent permitted by law and by the applicable Trust's by-laws. The chairman, or a person designated by the chairman, shall take minutes of all meetings of the Committee, copies of which shall be furnished to the Board. In the event of any inconsistency between this Charter and a Trust's organizational documents, the provisions of the Trust's organizational documents shall govern. B. REPORTS TO THE BOARD The Committee shall report its activities to the Board and make such recommendations as are called for under this Charter or as the Committee may otherwise deem necessary or appropriate. C. RESOURCES The Committee shall have the resources appropriate to discharge its responsibilities, including the authority to consult with counsel and to retain, at the Trusts' expense, such other experts or advisors as the Committee deems necessary or appropriate. M-2 [LOGO OF RYDEX | SGI] PROXY CARD FOR [FUND NAME PRINTS HERE] SECURITY GLOBAL INVESTORS(SM) PROXY FOR A SPECIAL JOINT MEETING OF SHAREHOLDERS - NOVEMBER 22, 2011 The undersigned hereby appoint(s) Joanna Haigney, Amy Lee and Beth Miller, or any one of them, proxies, each of them with full power of substitution, to vote and act with respect to all shares of the above referenced fund (the "Fund") which the undersigned is entitled to vote at the Special Meeting of shareholders of the Fund to be held at 805 King Farm Boulevard, Suite 600, Rockville, Maryland 20850 on November 22, 2011 at 1:00 p.m. ET, and at any adjournment(s) or postponements thereof. THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS. THIS PROXY CARD WILL BE VOTED AS INSTRUCTED. IF NO SPECIFICATION IS MADE, THE PROXY CARD WILL BE VOTED "FOR" THE PROPOSALS. THE PROXIES ARE AUTHORIZED, IN THEIR DISCRETION, TO VOTE UPON SUCH MATTERS AS MAY COME BEFORE THE SPECIAL MEETING OR ANY ADJOURNMENTS. -------------------------------------------------------- | TAG ID: 123456 | | | | NA1 - RYDEX SGI - BALLOT 3 - BOOK 3 RYDEX RETAIL | | NA2 - RYDEX SGI - BALLOT 3 - BOOK 3 RYDEX RETAIL | | NA3 - RYDEX SGI - BALLOT 3 - BOOK 3 RYDEX RETAIL | | NA4 - RYDEX SGI - BALLOT 3 - BOOK 3 RYDEX RETAIL | | NA5 - RYDEX SGI - BALLOT 3 - BOOK 3 RYDEX RETAIL | | NA6 - RYDEX SGI - BALLOT 3 - BOOK 3 RYDEX RETAIL | | NA7 - RYDEX SGI - BALLOT 3 - BOOK 3 RYDEX RETAIL | -------------------------------------------------------- NOTE: This proxy must be signed exactly as your name(s) appears here on. If as an attorney, executor, guardian or in some representative capacity or as an officer of a corporation, please add titles as such. Joint owners must each sign. By signing this proxy card, you acknowledge that you have received the proxy statement that the proxy card accompanies. ________________________________________________________________________________ Shareholder sign here Date ________________________________________________________________________________ Joint owner sign here Date PLEASE SEE THE INSTRUCTIONS BELOW IF YOU WISH TO VOTE BY PHONE (live proxy representative or touch-tone phone), BY MAIL OR VIA THE INTERNET. Please use whichever method is most convenient for you. If you choose to vote via the Internet or by phone, you should not mail your proxy card. Please vote today! PHONE: To cast your vote by phone with a proxy voting -------------------------------- representative, please call toll-free 1-877-864-5058. | | Representatives are available to take your voting instructions | CONTROL NUMBER: | Monday through Friday 9:00 a.m. to 11:00 p.m. Eastern Time. | 123456789112 | -------------------------------- MAIL: To vote your proxy by mail, check the appropriate voting box on the reverse side of this proxy card, sign and date the card IMPORTANT NOTICE REGARDING THE and return it in the enclosed postage-paid envelope. AVAILABILITY OF PROXY MATERIALS FOR THIS SPECIAL MEETING OF Options below are available 24 hours a day / 7 days a week SHAREHOLDERS TO BE HELD ON NOVEMBER 22, 2011 TOUCHTONE: To cast your vote via a touch-tone voting line, call toll-free THE PROXY STATEMENT FOR THIS 1-888-227-9349 and enter the control number to the right. MEETING IS AVAILABLE AT: www.proxyonline.us/docs/rydexsgi INTERNET: To vote via the Internet, go to www.proxyonline.us and enter the control number found to the right. IT IS IMPORTANT THAT PROXIES BE VOTED PROMPTLY. EVERY SHAREHOLDER'S VOTE IS IMPORTANT.

[FUND NAME PRINTS HERE] QUESTIONS ABOUT THIS PROXY? Should you have any questions about the proxy materials or regarding how to vote your shares, please contact our proxy information line TOLL-FREE AT 1-877-864-5058. Representatives are available Monday through Friday 9:00 a.m. to 11:00 p.m. Eastern Time. We have retained The Altman Group to assist our shareholders in the voting process. If we have not received your proxy card or vote as the date of the Special meeting approaches, representatives from The Altman Group may call you to remind you to exercise your vote. TO VOTE, MARK BOXES BELOW IN BLUE OR BLACK INK AS FOLLOWS. Example: [ ] YOU MAY VOTE ON THE PROPOSED CHANGES ON THE PROPOSALS AS A GROUP OR INDIVIDUALLY. PLEASE USE ONLY ONE METHOD. ------------------------------------------------------------------------------------------------------------------- TO VOTE ALL OF THE PROPOSALS IN ACCORDANCE WITH MANAGEMENT'S RECOMMENDATIONS, PLEASE FOR ALL CHECK THE BOX TO THE RIGHT. IF THE FOR ALL BOX ON THIS BALLOT IS MARKED, THIS VOTE WILL OVERRIDE ANY INDIVIDUAL VOTES MADE BELOW. [ ] -------------------------------------------------------------------------------------------------------------------
FOR AGAINST ABSTAIN 1. To approve a new investment advisory agreement between the Trust and Securities Investors, LLC. [ ] [ ] [ ] 2. To approve a new investment sub-advisory agreement between Securities Investors, LLC and American CLS Independence Financial Services, LLC for Rydex Series Funds - LONG SHORT INTEREST RATE STRATEGY FUND. [ ] [ ] [ ] 3. To approve the following individuals as trustees of the Trust: FOR WITHHOLD (1) Donald C. Cacciapaglia [ ] [ ] (2) Corey A. Colehour [ ] [ ] (3) J. Kenneth Dalton [ ] [ ] (4) John O. Demaret [ ] [ ] (5) Richard M. Goldman [ ] [ ] (6) Werner E. Keller [ ] [ ] (7) Thomas F. Lydon [ ] [ ] (8) Patrick T. McCarville [ ] [ ] (9) Roger Somers [ ] [ ] FOR AGAINST ABSTAIN 4. To approve a "manager of managers" arrangement [ ] [ ] [ ] 5. To approve the elimination of the fundamental investment policy on investing in other investment companies for Rydex Series Funds - U.S. GOVERNMENT MONEY MARKET FUND. [ ] [ ] [ ]

YOU MAY HAVE RECEIVED MORE THAN ONE BALLOT DUE TO MULTIPLE INVESTMENTS IN THE FUNDS. PLEASE REMEMBER TO VOTE ALL OF YOUR BALLOTS! Remember to SIGN AND DATE THE REVERSE SIDE before mailing in your vote. This proxy card is valid only when signed and dated. Thank you for voting.