<PAGE> 1
SECURITY
FUNDS
ANNUAL
REPORT
SEPTEMBER 30, 2000
- SECURITY ULTRA FUND
(P.3)
- SECURITY EQUITY FUND
- SMALL CAP GROWTH
SERIES (P.8)
- GLOBAL SERIES (P.12)
- MID CAP VALUE SERIES
(P.17)
- ENHANCED INDEX SERIES
(P.21)
- INTERNATIONAL SERIES
(P.32)
- SOCIAL AWARENESS
SERIES (P.38)
- SELECT 25(R) SERIES
(P.42)
- EQUITY SERIES (P.45)
- TOTAL RETURN SERIES
(P.50)
- LARGE CAP GROWTH
SERIES (P.54)
- TECHNOLOGY SERIES
(P.58)
- SECURITY GROWTH AND
INCOME FUND (P.61)
SECURITY DISTRIBUTORS,
INC.
A Member of The
Security Benefit
Group of Companies
[SECURITY DISTRIBUTORS,
INC. LOGO]
[BACKGROUND]
<PAGE> 2
--------------------------------------------------------------------------------
CHAIRMAN OF THE BOARD'S COMMENTARY
NOVEMBER 15, 2000
[CLELAND PHOTO]
John Cleland
TO OUR SHAREHOLDERS:
The equity markets over the past twelve months exhibited almost mob-like
behavioral characteristics, swinging from seemingly irrational market runups in
the September-December period of 1999 to major selloffs in the late months of
the fiscal year. From time to time the stock markets participants place undue
focus on the news headlines of the moment, diverting all attention from
underlying fundamental conditions and defying all logic. The fiscal year ended
September 30 was just such a time.
"THE BAD E'S" MOVE THE MARKETS
As we traversed the final quarter of the fiscal year investors increasingly
focused on what was classified as "The Bad E's:" the economy, earnings, energy,
the euro, and the elections. As you know, the Federal Reserve's policy-making
Open Market Committee (FOMC) raised interest rates six times beginning in
mid-1999 in a move to slow economic growth to a sustainable, noninflationary
pace. But when data began to confirm that the slowdown in the U.S. economy was a
reality, equity investors failed to see the value in a sustainable long-term
economic growth rate and instead focused on a slowdown's short-term impact on
the second "E," earnings.
In late August and September many highly visible companies across the entire
market spectrum announced that their third quarter earnings were likely to be
weaker than forecast. While this should not have been a surprise given that a
slowing economy means lower sales volume, investors behaved as if such a thing
had never happened before and sold these stocks quickly. Also contributing to
lower earnings was the weakness of the euro, the new currency of the eleven
European Union countries, and the resulting slower sales in Europe. (The reverse
side of the weak euro is a strong dollar, which makes U.S.-manufactured goods
more expensive in European countries.)
ENERGY PRICES COMPOUND THE EARNINGS PROBLEM
Rapidly increasing energy prices also weighed on investors' minds. Consumers who
must spend more to fill their gas tanks consequently have less to spend in
retail stores. In addition to the impact of the resulting slower retail sales,
energy prices push up corporate costs for raw materials and utilities. These
negative effects on corporate earnings added to investors' worries as they
appeared to see no end to higher energy prices.
THE ELECTIONS CONTRIBUTE TO UNCERTAINTY
By the time you read this letter the outcome of the November elections will be
known. But during the second half of the fiscal year the uncertainty typically
generated by a pending change in the White House and in Congress was just one
more unsettling concern for the stock markets. Federal Reserve Chairman Alan
Greenspan compounded this concern by pointing out that one candidate's proposed
spending increases and the other's proposed tax cuts would both decimate our
budget surplus. We must keep in mind the great distance between campaign
promises and final legislative approval by Congress for the proposals, and the
"watering-down" effect of discussions in the interim.
DESPITE ALL THE NEGATIVES, AN OPTIMISTIC OUTLOOK
In the face of all the prevailing negative market psychology, we believe the
potential for a market rally is great. Inflation remains largely absent from the
scene, and the FOMC is not expected to raise rates further this calendar year. A
slowing economy generally brings with it lower interest rates, a strong positive
for the equity markets. We remind our shareholders that slowing the U.S. economy
to sustainable growth rates in Gross Domestic Product of 3.5% to 4% should allow
the "good times" to continue for several more years. We believe sharp market
selloffs such as we have seen in recent months create excellent buying
opportunities which can allow long-term investment goals to be achieved more
readily.
As always, we appreciate the privilege of managing your investment funds. We
invite your questions and comments at any time.
Sincerely,
/s/ JOHN CLELAND
John Cleland, Chairman
Security Management Company, LLC
--------------------------------------------------------------------------------
1
--------------------------------------------------------------------------------
PRESIDENT'S COMMENTARY
NOVEMBER 15, 2000
--------------------------------------------------------------------------------
2
<PAGE> 3
--------------------------------------------------------------------------------
[SCHMANK PHOTO]
James Schmank
TO OUR SHAREHOLDERS:
The financial markets in the twelve month period which ended September 30, 2000
exhibited unusually wide swings, both up and down. For example, in the period
from October 15, 1999 to November 18, 1999 the S&P 500 Stock Index rose 14.38%,
a return for just over a month that was greater than most total yearly returns
in the index's history. Then, in the brief period from March 24, 2000 to April
14, 2000 the same index fell 11.14%, again losing more ground than would be lost
in an entire year of market weakness by historical standards.
LONG TERM OBJECTIVES AND SHORT TERM VOLATILITY
This kind of market volatility is unsettling not only to investors, but to
experienced professionals as well. It reinforces the importance of an element we
continue to stress to our shareholders: maintaining focus on your long-term
investment objectives. When we step back and look at performance charts for the
major market indexes over ten, twenty, or thirty years we are reminded that
despite many periods of market weakness the long-term trends have been steadily
upward. We expect that several years from now we will again review these charts
and see today's current volatility "smoothed" to these historic patterns.
While many of our funds participated in the most recent growth cycle, we
recognize in hindsight that several of our large cap equity portfolios fell
short of anticipating the sharp runup in technology-related stocks that occurred
in the period from October, 1999 through mid-March of this year. Like many other
portfolio management groups, we assessed that the valuations of most of these
stocks were considerably higher than levels we believed were reasonable. We were
therefore reluctant to increase the risk profile of these funds by emphasizing
growth stocks such as technology, and avoiding these stocks hurt our performance
during that period.
PERIODS OF MARKET WEAKNESS CREATE BUYING OPPORTUNITIES
The subsequent downturn in technology issues that began in April, 2000 brought
many other market sectors down with it. While we recognize how unsettling the
sharp market declines have been for investors, we believe we are near the bottom
of the market cycle and will soon return to more normal performance in the major
stock indexes. The managers of our large cap portfolios have maintained their
long-term investment focus and have wisely taken advantage of the weaker markets
to add to existing holdings or begin positions in names which appear
undervalued.
Although large cap portfolios have had a difficult year, we have been most
pleased with returns for our mid cap and small cap funds. Our global and
international funds have also handily outperformed their benchmark indexes.
These successes in the midst of a less-successful period for the large cap group
emphasize the value of diversification of assets in an individual investor's
total portfolio. Ownership of several different types of funds can help reduce
overall portfolio volatility. Years like the one just completed underscore the
advantages of such diversification.
Again, we stress the importance of maintaining sight of your investment
objectives. We believe time will show that we are now close to the bottom of the
market cycle for many stocks, and today's weaker market sectors should prove to
be rewarding investments for the long term.
Sincerely,
James R. Schmank, President
Security Management Company, LLC
--------------------------------------------------------------------------------
3
<PAGE> 4
--------------------------------------------------------------------------------
MANAGER'S COMMENTARY
SECURITY ULTRA FUND
NOVEMBER 15, 2000
FLYING S LOGO
[SCHIER PHOTO]
Jim Schier
Portfolio Manager
TO OUR SHAREHOLDERS:
The fiscal year ended September 30, 2000 was a very good one for mid cap growth
stocks in general, and for the Security Ultra Fund in particular. Total return
for the Fund was +72.82% for the year, outperforming the benchmark S&P Midcap
Growth Index's total return of +63.69%.(1)
HEALTH STOCKS LED PORTFOLIO PERFORMANCE
The greatest contributor to positive total return for the year was stock
selection in the health care sector. The average return on the health care
stocks in the portfolio exceeded +150%, while those in the benchmark index
returned +97% for the twelve-month period. Sector performance in the portfolio
was led by biomedical firm Millennium Pharmaceuticals, Inc. Millennium's stock
price rose nearly 350% during the year as investors flocked to genomics
companies. Analysts generally view Millennium as the most advanced in the group,
with the best business model.
PE Corp-PE Biosystems Group, formerly PerkinElmer Corporation, was the second
largest gainer, rising over 220% during the fiscal year. PE makes instrument
systems and software including DNA sequencers for the biotechnology industry.
Another leader in performance was Trimeris, Inc., a biotechnology company
involved in the discovery and development of a drug now in Phase III trials that
is expected to extend the lives of AIDS patients who have received all the
benefits they can from available drugs.
AN UNDERWEIGHTING IN TECHNOLOGY WAS A BENEFIT
At the beginning of the fiscal year the portfolio was overweighted in technology
stocks, holding 42% of assets in the sector compared with a 33% weighting in the
benchmark index. After these stocks had made a strong upward move we took some
profits and reduced the position by about one-fourth, bringing its weighting
down to just over 30%. This proved to be a good move, allowing us to escape some
of the "carnage" as technology stocks began a sharp sell-off.
Some of our financial sector stocks also performed very well. Among these were
Northern Trust Corporation and AFLAC Incorporated, both fee-based financial
service providers with strong unit growth and consistent performance. Northern
Trust's stock gained 114% and AFLAC rose 54% during the twelve months.
MID CAP STOCKS HAVE A BRIGHT FUTURE
We believe the outlook for mid cap growth stocks is extremely positive. This is
particularly true when their valuations are compared with those in the large cap
sector, where prices were driven extremely high in 1999. The recent volatility
in the stock markets, with frequent sharp moves to the downside, has created
some excellent buying opportunities.
At the end of the fiscal year the portfolio was positioned a bit more
defensively than many mid cap growth portfolios, with an underweighting in
technology stocks and overweightings in health care and energy issues. We
anticipate moving to a more aggressive stance as the markets approach a bottom;
we would likely sell some of the energy stocks to fund a move into areas with
more growth potential, such as technology.
Sincerely,
Jim Schier
Senior Portfolio Manager
(1) Performance figures are based on Class A shares and do not reflect deduction
of the sales charge. Performance is attributable, in part, to unusually
favorable market conditions and may not be repeated or consistently achieved
in the future. Recent market volatility may affect performance so that
current performance may be lower.
--------------------------------------------------------------------------------
3
<PAGE> 5
MANAGER'S COMMENTARY (CONTINUED)
SECURITY ULTRA FUND
NOVEMBER 15, 2000
c-------------------------------------------------------------------------------
SECURITY ULTRA FUND VS.
S&P MIDCAP 400, AND
S&P MIDCAP GROWTH
[LINE GRAPH]
<TABLE>
<CAPTION>
ULTRA FUND S&P MIDCAP GROWTH S&P MIDCAP 400
---------- ----------------- --------------
<S> <C> <C> <C>
90 10000.00 10000.00
10493.00 11243.00
14339.00 13823.00
13650.00 13722.00
14939.00 10000.00 15029.00
91 16761.00 11641.00 16876.00
16921.00 11225.00 16790.00
14552.00 10465.00 16269.00
15167.00 10916.00 16901.00
92 18164.00 12450.00 18688.00
18307.00 12334.00 19507.00
18236.00 12690.00 19962.00
19355.00 13517.00 20966.00
93 19952.00 14151.00 21525.00
18858.00 13496.00 20709.00
17164.00 12449.00 19953.00
18640.00 13478.00 21304.00
94 18627.00 13163.00 20754.00
19268.00 14243.00 22453.00
20561.00 15482.00 24411.00
22866.00 17113.00 26793.00
95 22206.00 16756.00 27178.00
23772.00 17976.00 28851.00
25721.00 18480.00 29680.00
26360.00 19221.00 30544.00
96 26232.00 19841.00 32393.00
24166.00 19311.00 31912.00
27574.00 22807.00 36600.00
31808.00 26908.00 42485.00
97 30915.00 25848.00 42839.00
34119.00 29005.00 47561.00
33428.00 28940.00 46539.00
27856.00 24549.00 39809.00
98 35930.00 34858.00 51032.00
35839.00 32895.00 47773.00
41668.00 37312.00 54539.00
41850.00 34719.00 49959.00
99 57391.00 44399.00 68561.00
68661.00 52819.00 77044.00
64920.00 51037.00 74282.00
00 72354.00 56829.00 83076.00
</TABLE>
$10,000 OVER TEN YEARS
This chart assumes a $10,000 investment in Class A shares of Ultra fund on
9/30/1990 and reflects a deduction of the 5.75% sales load. On 9/30/2000, the
value of your investment in Class A shares of the fund (with dividends
reinvested) would have grown to $72,354. In comparison, the same $10,000
investment would have grown to $83,076 based on the S&P MidCap index's
performance over the same time period or $56,829 based on the S&P MidCap Growth
index's performance from 9/30/91 to 9/30/00.
Benchmark was switched from the S&P MidCap 400 index to the S&P MidCap Growth
index as this index's investment style more closely reflects the fund's
investment style.
---------------- PERFORMANCE ----------------
TOP 5 HOLDINGS**
<TABLE>
<CAPTION>
% OF
NET ASSETS
----------
<S> <C>
Rational Software Corporation 7.0%
PE Corp--PE Biosystems Group 4.8%
Comverse Technology, Inc. 3.9%
Millennium Pharmaceuticals 3.6%
Acxiom Corporation 3.5%
</TABLE>
** At September 30, 2000
AVERAGE ANNUAL RETURNS
AS OF SEPTEMBER 30, 2000
<TABLE>
<CAPTION>
1 YEAR 5 YEARS 10 YEARS
------ ------- --------
<S> <C> <C> <C>
A Shares 72.82%* 26.00% 22.59%
A Shares with sales 62.90%* 24.52% 21.87%
charge
B Shares 71.17%* 24.72% 19.54%
(10-19-93)
(since inception)
B Shares with CDSC 66.17%* 24.55% 19.54%
(10-19-93)
(since inception)
C Shares 71.10%* 46.87% N/A
(1-29-99)
(since inception)
C Shares with CDSC 70.10%* 46.87% N/A
(1-29-99)
(since inception)
</TABLE>
The performance data above represents past performance which is not predictive
of future results. The investment return and principal value of an investment in
the fund will fluctuate so that an investor's shares, when redeemed, may be
worth more or less than their original cost. The figures above do not reflect
deduction of the maximum front-end sales charge of 5.75% for Class A shares or
the contingent deferred sales charge of 5% for Class B shares and 1% for Class C
shares, as applicable, except where noted. Such figures would be lower if the
maximum sales charge were deducted.
*Performance is attributable, in part, to unusually favorable market conditions
and may not be repeated or consistently achieved in the future. Recent market
volatility may affect performance so that current performance may be lower.
--------------------------------------------------------------------------------
4
<PAGE> 6
--------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS
SEPTEMBER 30, 2000
<TABLE>
<CAPTION>
SECURITY ULTRA FUND
NUMBER MARKET
COMMON STOCKS OF SHARES VALUE
-------------------------------------------------------------
<S> <C> <C>
ADVERTISING - 0.5%
True North Communications,
Inc.......................... 35,000 $ 1,251,250
AIR FREIGHT & COURIERS - 0.9%
Expeditors International of
Washington, Inc. ............ 50,000 2,253,125
APPAREL RETAIL - 0.2%
Children's Place Retail Stores,
Inc.*........................ 16,100 414,575
APPLICATION SOFTWARE - 15.9%
AVT Corporation*............... 100,000 556,250
AXENT Technologies, Inc.*...... 162,200 3,497,437
Cerner Corporation*............ 48,900 2,270,794
Diversinet Corporation*........ 55,000 323,125
Electronic Arts, Inc.*......... 20,400 1,007,250
EPIQ Systems, Inc.*............ 10,000 155,000
HNC Software, Inc.*............ 23,000 1,881,688
Hyperion Solutions
Corporation*................. 100,000 2,587,500
Jack Henry & Associates,
Inc. ........................ 89,450 3,879,894
Lernout & Hauspie Speech
Products N.V.*............... 160,000 2,100,000
Peregrine Systems, Inc.*....... 154,575 2,927,264
Rational Software
Corporation*................. 250,000 17,343,750
Take-Two Interactive Software,
Inc.*........................ 50,000 628,125
--------------
39,158,077
AUTO PARTS & EQUIPMENT - 1.3%
Federal Signal Corporation..... 58,600 1,164,675
Gentex Corporation*............ 85,700 2,142,500
--------------
3,307,175
BANKS - 2.6%
Marshall & Ilsley
Corporation.................. 34,000 1,704,250
Northern Trust Corporation..... 52,000 4,621,500
--------------
6,325,750
BIOTECHNOLOGY - 6.0%
Affymetrix, Inc.*.............. 18,000 897,750
Arena Pharmaceuticals, Inc.*... 13,000 559,000
Gene Logic, Inc.*.............. 48,000 1,104,000
Ligand Pharmaceuticals, Inc.
(Cl. B)*..................... 200,000 2,562,500
Millennium Pharmaceuticals*.... 60,700 8,865,994
Trimeris, Inc.*................ 10,800 755,325
--------------
14,744,569
</TABLE>
<TABLE>
<CAPTION>
NUMBER MARKET
COMMON STOCKS (CONTINUED) OF SHARES VALUE
-------------------------------------------------------------
<S> <C> <C>
BROADCASTING & CABLE TV - 1.7%
CINAR Corporation (Cl. B)*..... 349,600 $ 961,400
Sirius Satellite Radio,
Inc.*........................ 36,000 1,903,500
XM Satellite Radio Holdings,
Inc.*........................ 32,100 1,382,306
--------------
4,247,206
BUILDING PRODUCTS - 0.4%
Crane Company.................. 40,200 919,575
CATALOG RETAIL - 1.0%
Lands' End, Inc.*.............. 128,000 2,688,000
COMMODITY CHEMICALS - 0.1%
Lyondell Chemical Company...... 31,700 374,456
CONSTRUCTION & ENGINEERING - 0.5%
MasTec, Inc.*.................. 36,000 1,125,000
DIVERSIFIED COMMERCIAL SERVICES - 1.8%
DeVry, Inc.*................... 115,000 4,326,875
DRUG RETAIL - 0.8%
CVS Corporation................ 42,000 1,945,125
ELECTRICAL COMPONENTS & EQUIPMENT - 0.8%
Baldor Electric Company........ 8,600 174,688
Comdisco, Inc.................. 90,000 1,715,625
--------------
1,890,313
ELECTRONIC EQUIPMENT & INSTRUMENTS - 2.5%
Aclara Biosciences, Inc.*...... 45,000 1,366,875
Maxwell Technologies, Inc.*.... 190,000 3,443,750
PerkinElmer, Inc............... 14,200 1,482,125
--------------
6,292,750
FOOD RETAIL - 0.3%
Winn-Dixie Stores, Inc......... 44,400 638,250
GAS UTILITIES - 1.8%
Dynegy, Inc.................... 80,000 4,560,000
HEALTH CARE DISTRIBUTORS & SERVICES - 2.5%
Cardinal Health, Inc........... 18,000 1,587,375
CryoLife, Inc.*................ 52,300 1,814,156
Hooper Holmes, Inc............. 300,000 2,853,000
--------------
6,254,531
HEALTH CARE EQUIPMENT - 8.4%
Becton, Dickinson & Company.... 58,000 1,533,375
ChromaVision Medical Systems,
Inc.*........................ 29,000 275,500
Closure Medical Corporation*... 168,000 4,231,500
INAMED Corporation*............ 60,000 1,687,500
Micro Therapeutics, Inc.*...... 50,000 334,375
</TABLE>
See accompanying notes.
--------------------------------------------------------------------------------
6
<PAGE> 7
SCHEDULE OF INVESTMENTS (CONTINUED)
SEPTEMBER 30, 2000
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SECURITY ULTRA FUND
(CONTINUED)
NUMBER MARKET
COMMON STOCKS (CONTINUED) OF SHARES VALUE
-------------------------------------------------------------
<S> <C> <C>
HEALTH CARE EQUIPMENT (CONTINUED)
ORATEC Interventions, Inc.*.... 22,600 $ 276,850
PE Corp - PE Biosystems
Group........................ 101,000 11,766,500
Sunrise Medical, Inc.*......... 100,000 600,000
--------------
20,705,600
HEALTH CARE SUPPLIES - 0.1%
Interpore International,
Inc.*........................ 19,400 145,500
INDUSTRIAL MACHINERY - 0.5%
Flowserve Corporation.......... 74,000 1,216,375
INTEGRATED OIL & GAS - 0.4%
USX - Marathon Group........... 36,000 1,021,500
INTERNET SOFTWARE & SERVICES - 0.3%
High Speed Access
Corporation*................. 75,000 271,875
Liquid Audio, Inc.*............ 80,000 360,000
--------------
631,875
IT CONSULTING & SERVICES - 7.9%
Acxiom Corporation*(1)......... 270,000 8,572,500
Computer Sciences
Corporation*................. 45,000 3,341,250
Keane, Inc.*................... 150,000 2,610,000
Safeguard Scientifics, Inc.*... 123,000 2,452,313
SunGard Data Systems, Inc.*.... 60,000 2,568,750
--------------
19,544,813
LEISURE PRODUCTS - 1.5%
Mattel, Inc.................... 320,000 3,580,000
LIFE & HEALTH INSURANCE - 2.4%
AFLAC, Inc.(1)................. 82,000 5,253,125
UnumProvident Corporation...... 23,000 626,750
--------------
5,879,875
OIL & GAS DRILLING - 4.8%
ENSCO International, Inc....... 94,600 3,618,450
Nabors Industries, Inc.*....... 46,250 2,423,500
R & B Falcon Corporation*...... 62,300 1,736,613
Santa Fe International
Corporation.................. 60,000 2,703,750
Transocean Sedco Forex, Inc.... 25,000 1,465,625
--------------
11,947,938
OIL & GAS EQUIPMENT & SERVICES - 0.9%
Tidewater, Inc................. 50,000 2,275,000
OIL & GAS EXPLORATION & PRODUCTION - 7.6%
Anadarko Petroleum
Corporation.................. 62,000 4,120,520
Apache Corporation............. 89,000 5,262,125
Callon Petroleum Company*...... 105,000 1,660,312
</TABLE>
<TABLE>
<CAPTION>
NUMBER MARKET
COMMON STOCKS (CONTINUED) OF SHARES VALUE
-------------------------------------------------------------
-------------------------------------------------------------
<S> <C> <C>
OIL & GAS EXPLORATION &
PRODUCTION (CONTINUED)
Evergreen Resources, Inc.*..... 61,500 $ 2,137,125
Forest Oil Corporation*........ 130,000 2,104,375
Ocean Energy, Inc.*............ 208,000 3,211,000
TransMontaigne, Inc.*.......... 64,500 318,469
--------------
18,813,926
PHARMACEUTICALS - 6.5%
Catalytica, Inc.*.............. 72,000 891,000
Guilford Pharmaceuticals,
Inc.*........................ 63,200 1,457,550
Mylan Laboratories, Inc........ 181,300 4,883,769
Penwest Pharmaceuticals
Company*..................... 60,000 761,250
Teva Pharmaceutical Industries,
Ltd. ADR..................... 110,000 8,050,625
--------------
16,044,194
PUBLISHING & PRINTING - 2.2%
E.W. Scripps Company(1)........ 92,600 5,000,400
John Wiley & Sons, Inc......... 13,600 311,950
--------------
5,312,350
RAILROADS - 0.8%
CSX Corporation................ 40,000 872,500
RailAmerica, Inc.*............. 150,000 1,171,875
--------------
2,044,375
RESTAURANTS - 2.1%
Cheesecake Factory, Inc.*...... 119,850 5,183,512
SEMICONDUCTORS - 1.9%
Advanced Power Technology,
Inc.*........................ 31,600 1,046,750
Alpha Industries, Inc.*........ 52,150 1,776,359
Power Integrations, Inc.*...... 61,000 850,188
S3, Inc.*...................... 101,000 1,041,562
--------------
4,714,859
SPECIALTY CHEMICALS - 0.9%
Material Sciences
Corporation*................. 105,200 1,196,650
Rentech, Inc.*................. 470,000 940,000
--------------
2,136,650
SYSTEMS SOFTWARE - 1.4%
DST Systems, Inc.*............. 13,640 1,602,700
New Era of Networks, Inc.*..... 25,000 608,203
Wind River Systems, Inc.*...... 24,000 1,150,500
--------------
3,361,403
</TABLE>
See accompanying notes.
--------------------------------------------------------------------------------
7
<PAGE> 8
SCHEDULE OF INVESTMENTS (CONTINUED)
SEPTEMBER 30, 2000
c-------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SECURITY ULTRA FUND
(CONTINUED)
PRINCIPAL
AMOUNT OR
NUMBER MARKET
COMMON STOCKS (CONTINUED) OF SHARES VALUE
-------------------------------------------------------------
<S> <C> <C>
TELECOMMUNICATIONS EQUIPMENT - 4.0%
Comverse Technology, Inc.*..... 90,000 $ 9,720,000
Transcrypt International,
Inc.*........................ 166,500 260,156
--------------
9,980,156
--------------
Total common stocks - 96.2%............... 237,256,503
<CAPTION>
COMMERCIAL PAPER
----------------
CHEMICALS - BASIC - 0.6%
E.I. duPont de Nemours &
Company, 6.515% - 10-6-00.... $ 1,600,000 1,598,552
COMBINATION GAS & ELECTRIC - 0.3%
Baltimore Gas & Electric
Company, 6.48% - 10-4-00..... $ 700,000 699,622
ELECTRIC UTILITIES - 0.5%
Duke Energy Corporation, 6.65%
- 10-2-00.................... $ 1,200,000 1,199,778
NATURAL GAS - 1.2%
Northern Illinois Gas, 6.50% -
10-5-00...................... $ 2,900,000 2,897,906
</TABLE>
<TABLE>
<S> <C> <C>
<CAPTION>
PRINCIPAL MARKET
COMMERCIAL PAPER (CONTINUED) AMOUNT VALUE
-------------------------------------------------------------
<S> <C> <C>
RETAIL - DEPARTMENT STORES - 0.4%
May Department Stores Company,
6.47% - 10-17-00............. $ 1,000,000 $ 997,124
TELECOMMUNICATIONS - 1.6%
BellSouth Telecommunications,
Inc., 6.47% - 10-19-00....... 4,000,000 3,987,060
--------------
Total commercial paper - 4.6%............. 11,380,042
--------------
Total investments - 100.8%................ 248,636,545
Liabilities, less cash and other assets -
(0.8%).................................. (2,020,525)
--------------
Total net assets - 100.0%................. $ 246,616,020
==============
</TABLE>
The identified cost of investments for federal income tax purposes at September
30, 2000 was $153,589,029.
* Non-Income producing security.
ADR (American Depositary Receipt)
(1) Security is segregated as collateral for futures, forward contracts or
options.
See accompanying notes.
--------------------------------------------------------------------------------
8
<PAGE> 9
c-------------------------------------------------------------------------------
MANAGER'S COMMENTARY
SECURITY EQUITY FUND--
SMALL CAP GROWTH SERIES
NOVEMBER 15, 2000
[STRONG LOGO]
[OGNAR PHOTO]
Ronald C. Ognar
Portfolio Manager
TO OUR SHAREHOLDERS:
Security Small Cap Growth Fund had an excellent year, producing a total return
for the twelve months ending September 30, 2000 of +74.58%.(1) The benchmark
index, the Russell 2000 Growth Index, gained 29.66% over the same period.
INVESTORS' WORRIES ABOUT EARNINGS PRODUCED SHARP MARKET SWINGS
As the year 1999 ended, the equity markets grappled with the question of whether
rising interest rates would stifle the sizzling U.S. economy. Seeing that the
Federal Reserve Board was working to slow economic growth, investors who feared
that such a slowdown would probably result in a slowdown in corporate earnings
responded by flocking to those companies that historically produced the most
consistent revenue and earnings growth. The playing field between New Economy
and Old Economy stocks evened out modestly in the last weeks of the first
calendar quarter with the Dow Jones Industrial Average and the S&P 500 Stock
Index rallying from oversold depths.
During the summer months of 2000 the market was characterized by severe
volatility combined with a rotation from highly valued growth stocks into less
expensive market sectors. The stock market rally we saw in August quickly
evaporated after Labor Day as the major indexes gave back their gains. Higher
oil prices, a weak euro, sluggish personal computer demand, and concerns over
decreased spending on telecommunications equipment all added to already-existing
worries about slower earnings growth. Though evidence mounted that the Federal
Reserve is at or near the end of its cycle of raising interest rates, the
markets were pressured by fears that the economy may be slowing too much and
might be headed for a recession.
PORTFOLIO DIVERSIFICATION HELPED GENERATE STRONG RESULTS
Throughout the fiscal year the strongest relative performance in the Small Cap
Growth Fund came from optical and networking technology companies as well as
various health care related stocks. As market volatility increased, the Fund
benefited by maintaining a diverse list of companies spread across various
sectors. In a declining market, superior stock picking was the primary way to
add value to the Fund. In many instances, companies in similar industries with
similar products had very different stock price performance. While some of the
Fund's holdings in premier growth technology stocks were down in the second half
of the fiscal year, we remain committed to these long-term leaders in the growth
of the networked economy.
POST ELECTION MARKETS SHOULD IMPROVE
With economic data pointing to more moderate growth trends, it is increasingly
likely that an end to the Fed's tightening is near. We expect November to bring
with it better markets, as a result of the typical post-election optimism that
has been apparent in past election years. The year 2000 is shaping up to be a
year when good stock picking across all sectors of the market can add value in
spite of the negative returns for the broader indexes. We are somewhat concerned
about 2001 if the economy slows more than expected or inflation inches higher
under a new administration. We plan to watch market reactions carefully, and
will continue to focus on well-managed growth companies in dynamic industries
such as technology, healthcare, and financial services.
Sincerely,
Ronald C. Ognar
Portfolio Manager
(1) Performance figures are based on Class A shares and do not reflect deduction
of the sales charge. Fee waivers and/or reimbursements reduced Fund expenses
and in the absence of such waivers, the performance quoted would be reduced.
Performance is attributable, in part, to unusually favorable market
conditions and may not be repeated or consistently achieved in the future.
Recent market volatility may affect performance so that current performance
may be lower.
The Small Cap Growth Fund participates in the initial public offering
("IPO") market which may significantly increase its total return during the
time it has a small asset base. As the Fund's assets grow, the impact from
IPOs may be reduced.
--------------------------------------------------------------------------------
9
<PAGE> 10
MANAGER'S COMMENTARY (CONTINUED)
SECURITY EQUITY FUND--
SMALL CAP GROWTH SERIES
NOVEMBER 15, 2000
-------------------------------------------------------------------------------
SMALL CAP GROWTH SERIES VS.
RUSSELL 2000 INDEX, AND
RUSSELL 2000 GROWTH INDEX
[LINE GRAPH]
<TABLE>
<CAPTION>
RUSSELL 2000 GROWTH
SMALL CAP GROWTH SERIES RUSSELL 2000 INDEX INDEX
----------------------- ------------------ -------------------
<S> <C> <C> <C>
10/97 10000.00 10000.00 10000.00
9072.00 9444.00 9767.00
10129.00 10393.00 10928.00
9921.00 9908.00 10300.00
9/98 8205.00 7912.00 7997.00
10006.00 9203.00 9888.00
10016.00 8704.00 9721.00
10572.00 10057.00 11155.00
9/99 12241.00 9422.00 10607.00
18726.00 11160.00 14149.00
23778.00 11950.00 15483.00
20730.00 11498.00 14322.00
9/00 21368.00 11610.00 13753.00
</TABLE>
This chart assumes a $10,000 investment in Class A shares of Small Cap Growth
Series on 10/15/1997 and reflects a deduction of the 5.75% sales load. On
9/30/2000, the value of your investment in Class A shares of the fund (with
dividends reinvested) would have grown to $21,368. In comparison, the same
$10,000 investment would have grown to $11,610 based on the Russell 2000 index's
performance and $13,753 based on the Russell 2000 Growth index's performance.
Benchmark was switched from the Russell 2000 to Russell 2000 Growth as this
index's investment style more closely reflects the fund's investment style.
---------------- PERFORMANCE ----------------
TOP 5 HOLDINGS**
<TABLE>
<CAPTION>
% OF
NET ASSETS
----------
<S> <C>
Titan Pharmaceuticals, Inc. 4.9%
Polycom, Inc. 3.4%
Oak Technology, Inc. 3.3%
Newport Corporation 2.7%
Aeroflex, Inc. 2.6%
</TABLE>
** At September 30, 2000
AVERAGE ANNUAL RETURNS
AS OF SEPTEMBER 30, 2000
<TABLE>
<CAPTION>
1 YEAR SINCE INCEPTION
------ ---------------
<S> <C> <C>
A Shares 74.58%* 31.84%
(10-15-97)
A Shares with sales charge 64.56%* 29.23%
(10-15-97)
B Shares 72.70%* 30.33%
(10-15-97)
B Shares with CDSC 67.70%* 29.73%
(10-15-97)
C Shares 73.54%* 51.39%
(1-29-99)
C Shares with CDSC 72.54%* 51.39%
(1-29-99)
</TABLE>
The performance data above represents past performance which is not predictive
of future results. The investment return and principal value of an investment in
the fund will fluctuate so that an investor's shares, when redeemed, may be
worth more or less than their original cost. The figures above do not reflect
deduction of the maximum front-end sales charge of 5.75% for Class A shares or
the contingent deferred sales charge of 5% for Class B shares and 1% for Class C
shares, as applicable, except where noted. Such figures would be lower if the
maximum sales charge were deducted.
*Performance is attributable, in part, to unusually favorable market conditions
and may not be repeated or consistently achieved in the future. Recent market
volatility may affect performance so that current performance may be lower.
--------------------------------------------------------------------------------
9
<PAGE> 11
SCHEDULE OF INVESTMENTS (CONTINUED)
SEPTEMBER 30, 2000
c-------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SECURITY EQUITY FUND - SMALL CAP GROWTH
SERIES
NUMBER MARKET
COMMON STOCKS OF SHARES VALUE
-------------------------------------------------------------
<S> <C> <C>
AEROSPACE & DEFENSE - 3.8%
Aeroflex, Inc.*................ 28,600 $ 1,390,675
REMEC, Inc.*................... 21,300 627,019
--------------
2,017,694
AGRICULTURAL PRODUCTS - 0.2%
Eden Bioscience Corporation*... 3,500 115,500
AIRLINES - 1.1%
Frontier Airlines, Inc.*....... 29,000 563,687
APPLICATION SOFTWARE - 5.9%
Advent Software, Inc.*......... 14,000 978,250
Elantec Semiconductor, Inc.*... 7,000 697,375
Manugistics Group, Inc.*....... 4,000 392,500
Natural MicroSystems
Corporation*................. 11,500 618,664
SmartForce Public Limited
Company*..................... 6,000 284,250
SpeechWorks International,
Inc.*........................ 3,000 186,000
--------------
3,157,039
BANKS - 3.8%
Greater Bay Bancorp............ 8,000 555,500
Silicon Valley Bancshares*..... 10,000 582,344
Southwest Bancorporation of
Texas, Inc.*................. 13,500 441,281
TCF Financial Corporation...... 11,500 432,687
--------------
2,011,812
BIOTECHNOLOGY - 12.2%
Cell Therapeutics, Inc.*....... 11,300 753,569
Connetics Corporation*......... 23,500 566,937
COR Therapeutics, Inc.*........ 8,500 529,656
Inhale Therapeutic Systems..... 5,200 293,150
Neose Technologies, Inc.*...... 17,300 836,888
OSI Pharmaceuticals, Inc.*..... 13,500 945,000
Titan Pharmaceuticals, Inc.*... 40,500 2,632,500
--------------
6,557,700
COMPUTER HARDWARE - 0.5%
Carreker Corporation*.......... 14,000 273,000
COMPUTER STORAGE & PERIPHERALS - 0.9%
InFocus Corporation*........... 9,000 477,000
CONSUMER FINANCE - 4.4%
AmeriCredit Corporation*....... 25,500 734,719
CompuCredit Corporation*....... 5,300 297,297
Metris Companies, Inc.......... 34,000 1,343,000
--------------
2,375,016
</TABLE>
<TABLE>
<CAPTION>
NUMBER MARKET
COMMON STOCKS (CONTINUED) OF SHARES VALUE
-------------------------------------------------------------
-------------------------------------------------------------
<S> <C> <C>
DIVERSIFIED COMMERCIAL SERVICES - 5.8%
Career Education
Corporation*................. 9,000 $ 400,500
ChoicePoint, Inc.*............. 5,500 252,312
Corporate Executive Board
Company*..................... 30,000 1,207,500
DeVry, Inc.*................... 11,500 432,688
Education Management
Corporation*................. 16,000 431,000
ProsoftTraining.com*........... 27,000 384,750
--------------
3,108,750
DIVERSIFIED FINANCIAL SERVICES - 3.4%
Affiliated Managers Group,
Inc.*........................ 9,500 540,906
Dain Rauscher Corporation...... 9,000 837,000
Raymond James Financial,
Inc.......................... 14,000 461,125
--------------
1,839,031
ELECTRICAL COMPONENTS & EQUIPMENT - 4.2%
American Superconductor
Corporation*................. 4,500 221,203
Artesyn Technologies, Inc.*.... 17,000 495,125
AstroPower, Inc.*.............. 4,500 178,312
DDI Corporation................ 2,000 88,500
Plexus Corporation*............ 9,000 634,500
Power-One, Inc.*............... 5,000 302,578
Technitrol, Inc................ 3,000 303,000
--------------
2,223,218
ELECTRONIC EQUIPMENT & INSTRUMENTS - 3.7%
Merix Corporation*............. 6,500 421,281
Newport Corporation............ 9,000 1,433,391
Vertex Interactive, Inc.*...... 7,400 135,512
--------------
1,990,184
ENVIRONMENTAL SERVICES - 1.6%
Tetra Tech, Inc.*.............. 29,000 828,312
GENERAL MERCHANDISE STORES - 0.6%
99 Cents Only Stores*.......... 6,500 326,219
HEALTH CARE DISTRIBUTORS & SERVICES - 2.3%
AmeriSource Health
Corporation*................. 8,000 376,000
Laboratory Corporation of
America Holdings*............ 4,500 538,875
Priority Healthcare Corporation
(Cl. B)*..................... 4,300 327,875
--------------
1,242,750
</TABLE>
See accompanying notes.
--------------------------------------------------------------------------------
11
<PAGE> 12
SCHEDULE OF INVESTMENTS (CONTINUED)
SEPTEMBER 30, 2000
c-------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SECURITY EQUITY FUND - SMALL CAP GROWTH
SERIES (CONTINUED)
NUMBER MARKET
COMMON STOCKS (CONTINUED) OF SHARES VALUE
-------------------------------------------------------------
<S> <C> <C>
HEALTH CARE EQUIPMENT - 2.5%
Physiometrix, Inc.*............ 19,500 $ 431,438
Thoratec Laboratories
Corporation*................. 17,000 374,000
Vascular Solutions, Inc.*...... 28,200 529,191
--------------
1,334,629
INTERNET SOFTWARE & SERVICES - 2.0%
WatchGuard Technologies,
Inc.*........................ 10,500 630,000
WebTrends Corporation*......... 11,500 429,813
--------------
1,059,813
MOVIES & ENTERTAINMENT - 2.4%
Macrovision Corporation*....... 16,000 1,296,000
NETWORKING EQUIPMENT - 1.0%
Tut Systems, Inc.*............. 6,500 561,031
OIL & GAS DRILLING - 2.8%
Grey Wolf, Inc.*............... 200,500 1,152,875
Marine Drilling Companies,
Inc.*........................ 13,000 371,313
--------------
1,524,188
OIL & GAS EQUIPMENT & SERVICES - 3.3%
Key Energy Services, Inc.*..... 29,000 284,562
Lone Star Technologies,
Inc.*........................ 11,000 507,650
National-Oilwell, Inc.*........ 8,500 265,625
Patterson Energy, Inc.*........ 12,000 412,500
Trico Marine Services, Inc.*... 19,000 301,625
--------------
1,771,962
OIL & GAS EXPLORATION & PRODUCTION - 0.9%
Cross Timbers Oil Company...... 22,500 431,719
Proton Energy Systems, Inc.*... 1,800 51,525
--------------
483,244
PACKAGED FOODS - 0.5%
Suiza Foods Corporation*....... 5,500 278,781
PHARMACEUTICALS - 3.1%
CIMA Labs, Inc.*............... 12,800 666,400
Maxim Pharmaceuticals, Inc.*... 11,500 698,625
NPS Pharmaceuticals, Inc.*..... 4,900 277,156
--------------
1,642,181
PROPERTY & CASUALTY INSURANCE - 0.8%
Radian Group, Inc.............. 6,000 405,000
SEMICONDUCTOR EQUIPMENT - 0.4%
Cabot Microelectronics
Corporation*................. 5,000 240,000
</TABLE>
<TABLE>
<CAPTION>
NUMBER MARKET
COMMON STOCKS (CONTINUED) OF SHARES VALUE
-------------------------------------------------------------
-------------------------------------------------------------
<S> <C> <C>
SEMICONDUCTORS - 10.1%
Actel Corporation*............. 9,500 $ 341,406
Advanced Power Technology,
Inc.*........................ 22,400 742,000
Exar Corporation*.............. 7,400 895,400
Integrated Device Technology,
Inc.*........................ 6,000 543,000
Micrel, Inc.*.................. 7,000 469,000
Microtune, Inc.*............... 7,000 374,938
Oak Technology, Inc.*.......... 65,000 1,779,375
Virata Corporation*............ 4,000 264,500
--------------
5,409,619
SPECIALTY STORES - 2.8%
Michaels Stores, Inc.*......... 7,000 280,000
PETsMART, Inc.*................ 85,000 398,438
Pier 1 Imports, Inc.*.......... 62,000 840,875
--------------
1,519,313
STEEL - 0.5%
Shaw Group, Inc.*.............. 4,000 282,000
SYSTEMS SOFTWARE - 3.0%
Concurrent Computer
Corporation*................. 30,000 570,000
Micromuse, Inc.*............... 2,200 442,062
OPNET Technologies, Inc.*...... 17,000 620,500
--------------
1,632,562
TELECOMMUNICATIONS EQUIPMENT - 5.3%
Netro Corporation*............. 10,000 592,500
Polycom, Inc.*................. 27,500 1,841,641
Research in Motion, Ltd.*...... 4,000 394,438
--------------
2,828,579
--------------
Total common stocks - 95.8%............... 51,375,814
Cash & other assets, less liabilities -
4.2%.................................... 2,224,426
--------------
Total net assets - 100.0%................. $ 53,600,240
==============
</TABLE>
The identified cost of investments for federal income tax purposes at September
30, 2000 was $37,265,491.
* Non-Income producing security.
See accompanying notes.
--------------------------------------------------------------------------------
12
<PAGE> 13
c-------------------------------------------------------------------------------
MANAGER'S COMMENTARY
SECURITY EQUITY FUND--
GLOBAL SERIES
NOVEMBER 15, 2000
[OPPENHEIMER FUNDS LOGO]
[WILBY PHOTO]
William L. Wilby
Portfolio Manager
TO OUR SHAREHOLDERS:
Security Global Fund gained 47.04% during the fiscal year ended September 30,
2000, while its benchmark index, the MSCI World Index, rose 7.08%.(1) We
attribute this strong performance to our investment approach which focuses on
individual companies that, in our view, stand to benefit from one or more key
worldwide growth trends. The four themes we have identified are new
technologies, mass affluence, restructuring, and aging populations. Using these
themes as a starting point, we then employ rigorous fundamental research to
uncover companies with the potential to deliver earnings growth and stock price
appreciation in nearly any type of market.
BOTH POSITIVE AND NEGATIVE MARKETS DURING THE PERIOD
Interestingly, the past twelve months displayed virtually every type of market.
The first six months of the fiscal year were very positive for U.S. and foreign
markets, even though the monumental gains were mostly driven by a narrow group
of technology and telecommunications stocks. Toward the end of March, however,
investor sentiment began to shift. Concerns over the high valuations of "new
economy" stocks and continued monetary tightening in the U.S. unleashed a
torrent of selling, at times seemingly indiscriminate, resulting in several
broad market downturns. From time to time it looked as though "old economy"
stocks would lead a recovery; yet for much of the next six months, global
markets settled into a holding pattern, appearing to have no clear direction.
A WEAK EURO HELPED EUROPEAN EXPORTING COMPANIES
The past six months also saw a dramatic strengthening of the U.S. dollar against
many foreign currencies, particularly the euro, the currency of the European
Monetary Union. Despite healthy economic fundamentals throughout much of Europe,
the weaker currency resulted in massive capital outflows into the United States
markets, which investors believed offered higher return potential. The irony is
that this weakness may have actually benefited European companies that export to
the United States, allowing them to realize substantial gains from revenue
generated in U.S. dollars. In fact, several of our top holdings profited from
this development. German automobile manufacturer Porsche AG demonstrated the
impact of widening mass affluence, as well as the upside of the currency
situations.
Although Japan remains mired in recession, we've invested there selectively,
focusing our purchases in the new technologies theme. In contrast, Fund
performance was hurt during July by a decline in the value of semiconductor
stocks.
A POSITIVE OUTLOOK FOR INTERNATIONAL MARKETS
Regardless of market conditions, we believe there are virtually always
opportunities to buy great companies. However, from a market standpoint our
outlook for the United States is unclear at this time because of the upcoming
election. On the other hand, we remain optimistic regarding international
markets. In our view, the signs are quite compelling. For example, both Europe
and Japan have close to a two-year advantage over the United States in the area
of mobile Internet penetration. The proliferation of luxury goods overseas
continues to offer unique possibilities. Despite its current weakness, the euro
since its launch has brought about a wave of restructuring that is making
European companies more competitive and shareholder-friendly. Finally, there is
a growing equity culture overseas, particularly in Europe and Japan, as
investors seek the returns they need to meet their long term investment goals.
Sincerely,
William L. Wilby
Portfolio Manager
(1) Performance figures are based on Class A shares and do not reflect deduction
of the sales charge.
Investing in foreign countries may involve risks, such as currency
fluctuations and political instability, not associated with investing
exclusively in the U.S.
--------------------------------------------------------------------------------
13
<PAGE> 14
MANAGER'S COMMENTARY (CONTINUED)
SECURITY EQUITY FUND--
GLOBAL SERIES
NOVEMBER 15, 2000
-------------------------------------------------------------------------------
GLOBAL SERIES VS. MORGAN STANLEY
CAPITAL INTERNATIONAL WORLD INDEX
[LINE GRAPH]
<TABLE>
<CAPTION>
MORGAN STANLEY CAPITAL
GLOBAL SERIES INTERNATIONAL WORLD INDEX
------------- -------------------------
<S> <C> <C>
93 10000.00 10000.00
9736.00 10174.00
9764.00 10248.00
10000.00 10568.00
10217.00 10807.00
94 9859.00 10741.00
9735.00 11259.00
9946.00 11753.00
10503.00 12424.00
95 10882.00 13029.00
11579.00 13575.00
12206.00 13983.00
12366.00 14185.00
96 12735.00 14852.00
13042.00 14911.00
14357.00 17173.00
14851.00 17681.00
97 13613.00 17263.00
15697.00 19753.00
15357.00 20172.00
13601.00 17771.00
98 16217.00 21543.00
16517.00 22329.00
17980.00 23415.00
18267.00 23086.00
99 25110.00 27000.00
28471.00 27297.00
27431.00 26349.00
00 26861.00 25043.00
</TABLE>
This chart assumes a $10,000 investment in Class A shares of Global Series on
10/01/1993 and reflects a deduction of the 5.75% sales load. On 9/30/2000, the
value of your investment in Class A shares of the fund (with dividends
reinvested) would have grown to $26,861. In comparison, the same $10,000
investment would have grown to $25,043 based on the MSCI World index's
performance.
---------------- PERFORMANCE ----------------
TOP 5 HOLDINGS**
<TABLE>
<CAPTION>
% OF
NET ASSETS
----------
<S> <C>
Cadence Design Systems, Inc. 4.2%
Porsche AG 3.1%
Reckitt Benckiser plc 2.3%
Fresenius AG 2.1%
National Semiconductor Corporation 2.1%
</TABLE>
** At September 30, 2000
AVERAGE ANNUAL RETURNS
AS OF SEPTEMBER 30, 2000
<TABLE>
<CAPTION>
1 YEAR 5 YEARS 10 YEARS
------ ------- --------
<S> <C> <C> <C>
A Shares 47.04% 20.68% 16.16%
(10-1-93)
(since inception)
A Shares with sales 38.62% 19.26% 15.18%
charge (10-1-93)
(since inception)
B Shares 46.53% 19.62% 15.31%
(10-19-93)
(since inception)
B Shares with CDSC 41.53% 19.43% 15.31%
(10-19-93)
(since inception)
C Shares 45.67% 32.32% N/A
(1-29-99)
(since inception)
C Shares with CDSC 44.67% 32.32% N/A
(1-29-99)
(since inception)
</TABLE>
The performance data above represents past performance which is not predictive
of future results. The investment return and principal value of an investment in
the fund will fluctuate so that an investor's shares, when redeemed, may be
worth more or less than their original cost. The figures above do not reflect
deduction of the maximum front-end sales charge of 5.75% for Class A shares or
the contingent deferred sales charge of 5% for Class B shares and 1% for Class C
shares, as applicable, except where noted. Such figures would be lower if the
maximum sales charge were deducted.
--------------------------------------------------------------------------------
13
<PAGE> 15
SCHEDULE OF INVESTMENTS (CONTINUED)
SEPTEMBER 30, 2000
c-------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SECURITY EQUITY FUND - GLOBAL SERIES
NUMBER MARKET
COMMON STOCKS OF SHARES VALUE
-------------------------------------------------------------
<S> <C> <C>
AUSTRALIA - 0.9%
Australia & New Zealand Banking
Group, Ltd. ................. 118,900 $ 855,182
BRAZIL - 2.5%
Embraer - Empresa Brasileira de
Aeronautica S.A. ............ 9,100 282,100
Tele Norte Leste Participacoes
S.A. ........................ 62,688,269 1,423,652
Telesp Celular Participacoes
S.A. ........................ 21,300 701,569
--------------
2,407,321
CANADA - 2.3%
Bombardier, Inc. (Cl. B)....... 99,800 1,724,578
Husky Energy, Inc.*............ 50,490 468,121
--------------
2,192,699
FINLAND - 1.0%
Elisa Communications Oyj....... 12,700 453,802
Nokia Oyj ADR.................. 10,900 433,956
--------------
887,758
FRANCE - 7.8%
Alcatel........................ 27,600 1,765,883
Axa............................ 3,440 449,298
Canal Plus..................... 3,200 479,233
Cap Gemini S.A. ............... 4,800 902,268
Genset ADR*.................... 12,100 332,750
Sanofi-Synthelabo S.A.......... 28,800 1,547,834
Sidel S.A. .................... 10,600 604,301
Societe BIC S.A................ 23,830 891,040
Societe Television
Francaise(1)................. 6,100 349,911
--------------
7,322,518
GERMANY - 7.5%
Depfa Deutsche Pfandbriefbank
AG........................... 4,800 383,358
Fresenius AG................... 8,050 2,003,363
Porsche AG..................... 805 2,912,691
Prosieben Media AG............. 3,105 354,851
Wella AG....................... 41,702 1,477,601
--------------
7,131,864
HONG KONG - 0.3%
Television Broadcasts, Ltd. ... 47,500 285,113
INDIA - 0.6%
ICICI, Ltd. ADR................ 53,900 592,900
IRELAND - 1.6%
Elan Corporation plc ADR*...... 27,500 1,505,625
ITALY - 0.6%
Telecom Italia Mobile SpA...... 73,700 595,769
</TABLE>
<TABLE>
<CAPTION>
NUMBER MARKET
COMMON STOCKS (CONTINUED) OF SHARES VALUE
-------------------------------------------------------------
<S> <C> <C>
JAPAN - 6.5%
Credit Saison Company, Ltd. ... 28,100 $ 611,096
Eisai Company, Ltd. ........... 31,200 984,564
Hirose Electric Company,
Ltd. ........................ 6,100 795,947
Kyocera Corporation............ 5,300 809,273
Nikon Corporation.............. 19,000 383,306
NTT Docomo, Inc. .............. 32 918,009
Toshiba Corporation............ 206,000 1,660,429
--------------
6,162,624
MEXICO - 1.0%
Grupo Televisa S.A. GDR*....... 15,920 918,385
NETHERLANDS - 1.6%
Koninklijke (Royal) Philips
Electronics N.V.............. 10,386 447,009
Royal Dutch Petroleum
Company...................... 14,800 887,075
STMicroelectronics N.V......... 4,150 197,644
--------------
1,531,728
SINGAPORE - 0.9%
Singapore Press Holdings,
Ltd. ........................ 54,900 823,358
SOUTH KOREA - 0.4%
Samsung Electronics............ 2,132 386,194
SWEDEN - 0.7%
Telefonaktiebolaget LM Ericsson
AB ADR....................... 43,660 646,714
SWITZERLAND - 0.4%
Serono S.A. ................... 300 366,235
UNITED KINGDOM - 13.7%
Allied Zurich plc.............. 86,900 983,527
Bass plc....................... 133,500 1,305,667
BP Amoco plc ADR............... 18,600 985,800
Cadbury Schweppes plc.......... 148,260 875,714
Hanson plc..................... 139,400 775,977
Hilton Group plc............... 106,300 304,899
Oxford Glycosciences plc*...... 5,000 170,024
Peninsular and Oriental Steam
Navigation Company........... 67,800 593,936
Reckitt Benckiser plc.......... 173,949 2,132,052
Reed International plc......... 213,000 1,683,250
Rentokil Initial plc........... 416,900 932,285
Royal Bank of Scotland Group
plc.......................... 70,100 1,477,947
WPP Group plc.................. 64,150 766,354
--------------
12,987,432
</TABLE>
See accompanying notes.
--------------------------------------------------------------------------------
15
<PAGE> 16
SCHEDULE OF INVESTMENTS (CONTINUED)
SEPTEMBER 30, 2000
c-------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SECURITY EQUITY FUND - GLOBAL SERIES
(CONTINUED)
NUMBER MARKET
COMMON STOCKS OF SHARES VALUE
-------------------------------------------------------------
<S> <C> <C>
UNITED STATES - 35.5%
Affymetrix, Inc.*.............. 6,200 $ 309,225
Alza Corporation*.............. 12,200 1,055,300
America Online, Inc.*.......... 17,000 913,750
American Express Company....... 12,900 783,675
American Home Products
Corporation.................. 15,100 854,094
American International Group,
Inc. ........................ 12,100 1,157,819
Amgen, Inc.*................... 12,700 886,817
Bank One Corporation........... 32,900 1,270,762
Bard (C.R.), Inc. ............. 28,100 1,187,225
Cadence Design Systems,
Inc.*........................ 154,340 3,964,609
Circuit City Stores - Circuit
City Group................... 40,500 931,500
Citigroup, Inc. ............... 17,066 922,631
Fannie Mae..................... 21,300 1,522,950
Gilead Sciences, Inc.*......... 15,000 1,645,313
Hasbro, Inc. .................. 38,000 434,625
Human Genome Sciences, Inc.*... 4,700 813,688
International Business Machines
Corporation.................. 8,600 967,500
International Flavors and
Fragrances, Inc. ............ 39,600 722,700
International Game
Technology*.................. 23,400 786,825
Intuit, Inc.*.................. 5,800 330,600
Lehman Brothers Holdings,
Inc. ........................ 7,900 1,167,225
Manpower, Inc. ................ 25,870 826,223
MBNA Corporation............... 44,600 1,717,100
Millennium Pharmaceuticals*.... 3,440 502,455
National Semiconductor
Corporation*................. 49,200 1,980,300
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT OR
NUMBER MARKET
COMMON STOCKS (CONTINUED) OF SHARES VALUE
-------------------------------------------------------------
<S> <C> <C>
UNITED STATES (CONTINUED)
Oracle Corporation*............ 10,580 $ 833,175
Pfizer, Inc. .................. 11,000 494,313
QUALCOMM, Inc.*................ 12,220 870,675
Quintiles Transnational
Corporation*................. 10,900 173,719
Sanmina Corporation*........... 3,400 318,325
Scientific-Atlanta, Inc. ...... 9,600 610,800
Solectron Corporation*......... 8,100 373,612
Sun Microsystems, Inc.*........ 5,700 665,475
Sybase, Inc.*.................. 45,300 1,041,900
WorldCom, Inc.*................ 17,000 516,375
--------------
33,553,280
--------------
Total common stocks - 85.8%............... 81,152,699
REPURCHASE AGREEMENT - 12.9%
--------------------------------------------
State Street, 4.25%, 10-02-00
(Collateralized by FHLB,
6.00% - 2002 with a value of
$12,460,000)................. $12,172,375 12,172,375
--------------
Total investments - 98.7%.... 93,325,074
Cash and other assets, less
liabilities - 1.3%......... 1,226,031
--------------
Total net assets - 100.0%.... $ 94,551,105
==============
</TABLE>
See accompanying notes.
--------------------------------------------------------------------------------
16
<PAGE> 17
SCHEDULE OF INVESTMENTS (CONTINUED)
SEPTEMBER 30, 2000
c-------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SECURITY EQUITY FUND - GLOBAL SERIES
(CONTINUED)
<S> <C> <C>
INVESTMENT CONCENTRATION
--------------------------------------------
At September 30, 2000, Global Series' investment
concentration by industry was as follows:
Advertising.................... 0.8%
Aerospace/Defense.............. 0.3%
Automobiles.................... 3.1%
Banks & Credit................. 4.2%
Beverages...................... 1.4%
Broadcast Media................ 2.5%
Building & Construction........ 0.8%
Communications................. 0.9%
Computer Software.............. 5.5%
Computer Systems............... 3.6%
Cosmetics...................... 1.6%
Electrical Equipment........... 2.6%
Electronics.................... 2.5%
Entertainment.................. 1.3%
Financial Services............. 7.8%
Food Wholesalers............... 0.9%
Healthcare..................... 7.0%
Hotel/Motel.................... 0.3%
Household Products............. 3.0%
Insurance...................... 2.7%
Machinery...................... 0.6%
Manufacturing.................. 1.8%
Medical........................ 1.4%
Office Equipment............... 0.9%
Oil............................ 2.5%
Pharmaceuticals................ 7.3%
Photography.................... 0.4%
Publishing..................... 1.8%
Retail......................... 1.0%
Semiconductors................. 2.3%
Services....................... 3.0%
Telecommunications............. 9.4%
Transportation................. 0.6%
Cash, short-term investments
and other assets, less
liabilities.................. 14.2%
--------------
100.0%
==============
</TABLE>
The identified cost of investments for federal income tax purposes at September
30, 2000 was $84,339,719.
* Non-Income producing security.
ADR (American Depositary Receipt)
See accompanying notes.
--------------------------------------------------------------------------------
17
<PAGE> 18
c-------------------------------------------------------------------------------
MANAGER'S COMMENTARY
SECURITY EQUITY FUND--
MID CAP VALUE SERIES
NOVEMBER 15, 2000
FLYING S LOGO
[SCHIER PHOTO]
Jim Schier
Portfolio Manager
TO OUR SHAREHOLDERS:
The fiscal year ended September 30, 2000 was an excellent one for Security Mid
Cap Value Fund, which returned +30.46% for the year.(1) The benchmark S&P Mid
Cap Value Index gained 25.49% over the same period.
HEALTH CARE STOCKS LED PERFORMANCE
The greatest contributor to total return was stock selection in the health care
sector. The average return on the health care stocks in the portfolio exceeded
100%, while those in the benchmark index averaged 58%. The performance of our
health care holdings was led by CryoLife, Inc., a biomedical company whose core
business is harvesting and preserving human tissue. CryoLife also develops
medical devices, and has received favorable press for two of its newest
products: BioGlue, a surgical adhesive, and SynerGraft, a tissue-engineered
heart valve. Both products are being used successfully in Europe, and the
company is seeking FDA approval in the U.S.
Noven Pharmaceuticals, Inc. was a second outstanding performer in health care.
Noven develops transdermal drug delivery systems, primarily "patch" delivery
products. Success with new products, including the smallest available estrogen
patch, drove the stock's price up.
MANY INDUSTRIAL COMPANIES PRODUCE SOLID RESULTS
A variety of industrial companies also contributed to the year's positive
results. Benchmark Electronics, Inc. provides contract electronics manufacturing
and design services to original equipment manufacturers in several industries.
Benchmark Electronics' stock price fell sharply in October, 1999 after the
company reported lower than expected earnings caused by product delays and high
costs. However, many analysts upgraded their earnings forecasts for the company
a few months later, once it had overcome high acquisition costs for a company it
purchased in mid-1999.
Other companies with favorable performance results included Maxwell
Technologies, Inc., recovering from a weak earnings period in 1999, and ITT
Educational Services, which offers associate, bachelor's and master's degrees in
technology-oriented programs. ITT Educational Services gained over 120% as
investors recognized the great demand for its programs.
THE VOLATILE TECHNOLOGY SECTOR LED THE NEGATIVES
Stock selection in the technology sector was the major drag on total return
during the year. Two stocks, Mediconsult.com, Inc. and AVT Corporation,
inflicted most of the damage. Mediconsult provides health care information and
services via the Internet, and found itself caught in the Internet stock selloff
this year resulting in a 72% decline in its stock price. AVT Corporation sells
unified messaging systems to corporations. These are high-ticket items which
often result in volatile revenues for the company. AVT fell more than 60% in a
single day after announcing disappointing earnings for its first quarter of
2000.
MID CAP STOCKS OFFER STRONG UPSIDE POTENTIAL
The outlook for mid cap value stocks, we believe, is very favorable. Valuations
of many companies in this sector are at their lowest levels in two decades. A
number of mid cap stocks sell at large discounts to large cap issues, increasing
their attractiveness to investors who have seen extremely high valuations in the
large cap market sector in recent months.
At the close of the fiscal year for the Mid Cap Value Fund we held an overweight
position in energy stocks relative to the benchmark index. We may begin selling
some of these positions in the coming months, believing that reduced demand for
and increased production of petroleum products will eventually lead to a decline
in oil prices. We are watching technology stock prices, some of which may
present attractive buying opportunities after the recent selloff in the
technology sector.
Sincerely,
Jim Schier
Senior Portfolio Manager
(1) Performance figures are based on Class A shares and do not reflect deduction
of the sales charge.
--------------------------------------------------------------------------------
18
<PAGE> 19
MANAGER'S COMMENTARY (CONTINUED)
SECURITY EQUITY FUND--
MID CAP VALUE SERIES
NOVEMBER 15, 2000
-------------------------------------------------------------------------------
MID CAP VALUE SERIES VS.
S&P MIDCAP VALUE INDEX
AND S&P MIDCAP 400
[LINE GRAPH]
<TABLE>
<CAPTION>
MIDCAP VALUE SERIES S&P MIDCAP 400 S&P MIDCAP VALUE
------------------- -------------- ----------------
<S> <C> <C> <C>
5/97 10000.00 10000.00 10000.00
10318.00 11151.00 10925.00
9/97 12125.00 12902.00 12471.00
11807.00 12968.00 13145.00
13530.00 14354.00 14438.00
13464.00 14007.00 13841.00
9/98 11301.00 11943.00 11931.00
13713.00 15261.00 13759.00
13515.00 14241.00 12652.00
16325.00 16210.00 14541.00
9/99 15602.00 14805.00 13124.00
16702.00 17298.00 14080.00
18526.00 19438.00 14963.00
18379.00 18741.00 14565.00
9/00 20350.00 20960.00 16465.00
</TABLE>
This chart assumes a $10,000 investment in Class A shares of MidCap Value Series
on 05/01/1997 and reflects a deduction of the 5.75% sales load. On 9/30/2000,
the value of your investment in Class A shares of the fund (with dividends
reinvested) would have grown to $20,350. In comparison, the same $10,000
investment would have grown to $16,465 based on the S&P MidCap Value index's
performance and $20,960 based on the S&P MidCap 400.
Benchmark was switched from the S&P MidCap 400 to the S&P MidCap Value index as
this index's investment style more closely reflects the fund's investment style.
---------------- PERFORMANCE ----------------
TOP 5 HOLDINGS**
<TABLE>
<CAPTION>
% OF
NET ASSETS
----------
<S> <C>
CryoLife, Inc. 4.4%
Benchmark Electronics, Inc. 4.0%
Ocean Energy, Inc. 3.3%
Maxwell Technologies, Inc. 2.8%
Kinder Morgan, Inc. 2.8%
</TABLE>
** September 30, 2000
AVERAGE ANNUAL RETURNS
AS OF SEPTEMBER 30, 2000
<TABLE>
<CAPTION>
1 YEAR SINCE INCEPTION
------ ---------------
<S> <C> <C> <C>
A Shares 30.46% 26.47% (5-1-97)
A Shares with sales 22.97% 24.30% (5-1-97)
charge
B Shares 29.21% 25.22% (5-1-97)
B Shares with CDSC 24.21% 24.71% (5-1-97)
C Shares 28.93% 25.62% (1-29-99)
C Shares with CDSC 27.93% 25.62% (1-29-99)
</TABLE>
The performance data above represents past performance which is not predictive
of future results. The investment return and principal value of an investment in
the fund will fluctuate so that an investor's shares, when redeemed, may be
worth more or less than their original cost. The figures above do not reflect
deduction of the maximum front-end sales charge of 5.75% for Class A shares or
the contingent deferred sales charge of 5% for Class B shares and 1% for Class C
shares, as applicable, except where noted. Such figures would be lower if the
maximum sales charge were deducted.
--------------------------------------------------------------------------------
18
<PAGE> 20
SCHEDULE OF INVESTMENTS (CONTINUED)
SEPTEMBER 30, 2000
c-------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SECURITY EQUITY FUND - MID CAP VALUE SERIES
NUMBER MARKET
COMMON STOCKS OF SHARES VALUE
-------------------------------------------------------------
<S> <C> <C>
AEROSPACE & DEFENSE - 3.3%
Alliant Techsystems, Inc.*..... 8,600 $ 706,275
Raytheon Company............... 18,000 492,750
Raytheon Company (Cl. B)....... 18,000 511,875
--------------
1,710,900
AGRICULTURAL PRODUCTS - 1.3%
Archer-Daniels-Midland
Company...................... 80,000 690,000
APPAREL & ACCESSORIES - 3.3%
Jones Apparel Group,
Inc.*(1)..................... 20,000 530,000
Kellwood Company(1)............ 65,000 1,186,250
--------------
1,716,250
APPLICATION SOFTWARE - 1.8%
AVT Corporation*............... 83,500 464,469
JDA Software Group, Inc.*...... 35,000 446,250
--------------
910,719
AUTO PARTS & EQUIPMENT - 2.2%
Federal Signal Corporation..... 33,000 655,875
Motorcar Parts & Accessories,
Inc.*........................ 50,000 42,500
TRW, Inc.(1)................... 11,000 446,875
--------------
1,145,250
BANKS - 4.0%
Bank of Montreal............... 13,000 587,437
Marshall & Ilsley
Corporation.................. 21,000 1,052,625
Wilmington Trust Corporation... 8,000 429,000
--------------
2,069,062
BROADCASTING & CABLE TV - 0.5%
Cinar Corporation (Cl. B)*..... 86,000 236,500
CATALOG RETAIL - 0.5%
Lands' End, Inc.*.............. 11,800 247,800
DIVERSIFIED CHEMICALS - 1.3%
Engelhard Corporation.......... 40,000 650,000
DIVERSIFIED COMMERCIAL SERVICES - 2.7%
ITT Educational Services,
Inc.*........................ 24,000 651,000
Profit Recovery Group
International, Inc.*......... 76,000 750,500
--------------
1,401,500
DRUG RETAIL - 0.5%
CVS Corporation................ 6,000 277,875
ELECTRICAL COMPONENTS & EQUIPMENT - 8.5%
Baldor Electric Company........ 32,800 666,250
Benchmark Electronics, Inc.*... 40,000 2,080,000
</TABLE>
<TABLE>
<CAPTION>
NUMBER MARKET
COMMON STOCKS (CONTINUED) OF SHARES VALUE
-------------------------------------------------------------
<S> <C> <C>
ELECTRICAL COMPONENTS & EQUIPMENT
(CONTINUED)
Brady Corporation.............. 16,000 $ 484,000
Comdisco, Inc.................. 18,000 343,125
Energizer Holdings, Inc.*...... 34,000 833,000
--------------
4,406,375
ELECTRIC UTILITIES - 2.4%
Unisource Energy Corporation... 75,000 1,228,125
ELECTRONIC EQUIPMENT & INSTRUMENTS - 2.8%
Maxwell Technologies, Inc.*.... 80,000 1,450,000
FOOTWEAR - 1.2%
Brown Shoe Company, Inc........ 68,000 624,750
GAS UTILITIES - 4.7%
El Paso Energy Corporation..... 16,000 986,000
Kinder Morgan, Inc............. 35,000 1,432,813
--------------
2,418,813
HEALTH CARE DISTRIBUTORS & SERVICES - 6.7%
CryoLife, Inc.*................ 66,000 2,289,375
Hooper Holmes, Inc............. 120,000 1,141,200
--------------
3,430,575
HEALTH CARE FACILITIES - 0.6%
Quorum Health Group, Inc.*..... 24,000 312,000
HEALTH CARE SUPPLIES - 1.7%
Akorn, Inc.*................... 80,000 885,000
INDUSTRIAL CONGLOMERATES - 1.3%
ITT Industries, Inc............ 19,800 642,263
INTEGRATED OIL & GAS - 0.5%
USX-Marathon Group............. 8,500 241,187
INTERNET SOFTWARE & SERVICES - 0.6%
EDGAR Online, Inc.*............ 61,900 294,025
IT CONSULTING & SERVICES - 5.9%
Acxiom Corporation*(1)......... 39,000 1,238,250
Computer Sciences
Corporation*................. 8,800 653,400
SunGard Data Systems, Inc.*.... 14,000 599,375
Tier Technologies, Inc. (CI.
B)*.......................... 76,000 558,125
--------------
3,049,150
LEISURE PRODUCTS - 1.7%
Mattel, Inc.................... 48,000 537,000
Midway Games, Inc.*............ 48,000 336,000
--------------
873,000
</TABLE>
See accompanying notes.
--------------------------------------------------------------------------------
20
<PAGE> 21
SCHEDULE OF INVESTMENTS (CONTINUED)
SEPTEMBER 30, 2000
c-------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SECURITY EQUITY FUND - MID CAP VALUE SERIES
(CONTINUED)
NUMBER MARKET
COMMON STOCKS (CONTINUED) OF SHARES VALUE
-------------------------------------------------------------
<S> <C> <C>
LIFE & HEALTH INSURANCE - 4.2%
AFLAC, Inc.(1)................. 12,000 $ 768,750
American General Corporation... 10,000 780,000
UnumProvident Corporation...... 22,000 599,500
--------------
2,148,250
MULTI-UTILITIES - 2.0%
Questar Corporation............ 37,000 1,029,063
OIL & GAS DRILLING - 3.6%
ENSCO International, Inc....... 27,000 1,032,750
R & B Falcon Corporation*...... 30,300 844,612
--------------
1,877,362
OIL & GAS EQUIPMENT & SERVICES - 2.4%
Tidewater, Inc................. 27,000 1,228,500
OIL & GAS EXPLORATION & PRODUCTION - 11.8%
Anadarko Petroleum
Corporation.................. 4,200 279,132
Apache Corporation............. 3,700 218,763
Callon Petroleum Company*...... 50,000 790,625
Chieftain International,
Inc.*........................ 30,800 637,175
Evergreen Resources, Inc.*..... 15,000 521,250
Forest Oil Corporation*........ 45,000 728,437
Murphy Oil Corporation......... 13,000 842,562
Ocean Energy, Inc.*............ 110,000 1,698,125
TransMontaigne, Inc.*.......... 77,500 382,656
--------------
6,098,725
OIL & GAS REFINING & MARKETING - 1.4%
Ultramar Diamond Shamrock
Corporation.................. 28,000 710,500
PACKAGED FOODS - 1.1%
Agribrands International,
Inc.*........................ 700 30,537
American Italian Pasta
Company*..................... 10,300 197,631
Hormel Foods Corporation....... 20,000 333,750
--------------
561,918
PHARMACEUTICALS - 2.2%
Mylan Laboratories, Inc........ 42,000 1,131,375
PROPERTY & CASUALTY INSURANCE - 1.7%
MBIA, Inc...................... 12,500 889,063
</TABLE>
<TABLE>
<CAPTION>
NUMBER MARKET
COMMON STOCKS (CONTINUED) OF SHARES VALUE
-------------------------------------------------------------
-------------------------------------------------------------
<S> <C> <C>
PUBLISHING & PRINTING - 1.4%
E.W. Scripps Company........... 13,000 $ 702,000
RAILROADS - 1.4%
CSX Corporation................ 18,000 392,625
RailAmerica, Inc.*............. 45,000 351,563
--------------
744,188
RESTAURANTS - 0.4%
Sonic Corporation*............. 7,000 220,500
SEMICONDUCTORS - 0.4%
Power Integrations, Inc.*...... 13,500 188,156
SPECIALTY CHEMICALS - 1.9%
International Flavors &
Fragrances, Inc.............. 28,000 511,000
Material Sciences
Corporation*................. 43,000 489,125
--------------
1,000,125
TELECOMMUNICATIONS EQUIPMENT - 0.1%
Transcrypt International,
Inc.*........................ 25,000 39,063
TEXTILES - 0.8%
Unifi, Inc.*................... 43,000 438,063
TRUCKING - 1.6%
Covenant Transport, Inc.*...... 54,000 502,875
MS Carriers, Inc.*............. 9,600 150,000
Motor Cargo Industries,
Inc.*........................ 29,200 178,850
--------------
831,725
--------------
Total common stocks - 98.4%............... 50,749,695
Cash and other assets, less liabilities -
1.6%.................................... 818,399
--------------
Total net assets - 100.0%................. $ 51,568,094
==============
</TABLE>
The identified cost of investments owned at September 30, 2000 was the same for
book and tax purposes.
* Non-Income producing security.
(1) Security is segregated as collateral for futures, forward contracts or
options.
See accompanying notes.
--------------------------------------------------------------------------------
21
<PAGE> 22
c-------------------------------------------------------------------------------
MANAGER'S COMMENTARY
SECURITY EQUITY FUND--
ENHANCED INDEX SERIES
NOVEMBER 15, 2000
[BANKERS TRUST LOGO]
TO OUR SHAREHOLDERS:
For the fiscal year ended September 30, 2000 the Enhanced Index Fund returned
+13.65%,(1) achieving its goal of adding value to the return of the benchmark
S&P 500 Stock Index which rose 13.28% over the twelve months. The core portfolio
of the Fund is designed to contain at least 80% of the companies represented in
the benchmark index. Through the use of our proprietary screening process
approximately one-fourth of these stocks, which in our view have above-average
potential for appreciation, are overweighted, while another one-fourth, which
our screens show have less than average potential, are underweighted.
OPERATION OF THE PROPRIETARY SCREENS
The Enhanced Index Team at Bankers Trust Company uses several proprietary
screens in deciding when to overweight or underweight stocks in the portfolio.
Stocks are overweighted when one of the following shows up on our screens: the
company reports a positive earnings surprise, the company becomes an acquisition
target, it is announced that the company will be added to the S&P Index, the
stock has a high dividend yield or a zero dividend yield (if further research
shows that the company uses the funds for internal investment), or the stock's
price shows significant value based on options pricing techniques.
Conversely, stocks are underweighted if there is a negative earnings surprise,
if the company issues a seasoned equity offering (as opposed to an initial
public offering of stock), it is announced that the company will be deleted from
the S&P 500 Index, or if financials show downward momentum. If none of these
positive or negative screens apply, we will hold a neutral position in the
stock.
During the fiscal year the Fund benefited from the abundance of merger and
acquisition activity. According to statistics complied by Thomson Financial
Securities Data, the volume of U.S. mergers and acquisitions rose to more than
$2.0 trillion over the latest twelve months compared to $1.5 trillion in the
prior twelve-month period. The Fund also benefited from the fifty-one additions
to the S&P 500 Stock Index. Among the additions were Yahoo! Inc., Broadcom
Corporation and Qwest Communications International Inc. The excellent
performance of several of our quantitative screens also added value, most
notably the screens for positive earnings surprises and dividend yields.
PORTFOLIO MANAGERS' OUTLOOK
While as index fund managers we don't manage the portfolio according to a given
outlook for the equity markets or the economy, we do monitor economic conditions
and how they affect the financial markets. Looking ahead, we do not expect the
recent moderation in growth to accelerate into a severe slowing. Growth is
likely to proceed at a less exuberant clip than earlier this year, as the lagged
effects of higher interest rates, higher energy prices, and softer equity
markets continue to exert some restraint. The possibility of a more pronounced
slowing cannot be ruled out, especially if energy prices surge further and/or
equity markets collapse, undercutting confidence. But the most likely outcome is
that growth will be well maintained by solid consumer and business fundamentals
through 2001.
Sincerely,
Enhanced Index Team
(1) Performance figures are based on Class A shares and do not reflect deduction
of the sales charge.
--------------------------------------------------------------------------------
22
<PAGE> 23
MANAGER'S COMMENTARY (CONTINUED)
SECURITY EQUITY FUND--
ENHANCED INDEX SERIES
NOVEMBER 15, 2000
-------------------------------------------------------------------------------
ENHANCED INDEX SERIES VS.
S&P 500 INDEX
[LINE GRAPH]
<TABLE>
<CAPTION>
ENHANCED INDEX SERIES S&P 500 INDEX
--------------------- -------------
<S> <C> <C>
1/99 10000 10000
3/99 9425 10076
6/99 10057 10786
9/99 9416 10112
12/99 10773 11616
3/00 11018 11883
6/00 10660 11567
9/00 10509 11455
</TABLE>
This chart assumes a $10,000 investment in Class A shares of Enhanced Index
Series on 01/29/1999 and reflects a deduction of the 5.75% sales load. On
9/30/2000, the value of your investment in Class A shares of the fund (with
dividends reinvested) would have grown to $10,509. In comparison, the same
$10,000 investment would have grown to $11,455 based on the S&P 500 index's
performance.
---------------- PERFORMANCE ----------------
TOP 5 HOLDINGS**
<TABLE>
<CAPTION>
% OF
NET ASSETS
----------
<S> <C>
General Electric Company 4.0%
Cisco Systems, Inc. 2.8%
Exxon Mobil Corporation 2.2%
Microsoft Corporation 2.2%
Intel Corporation 2.0%
</TABLE>
** At September 30, 2000
AVERAGE ANNUAL RETURNS
AS OF SEPTEMBER 30, 2000
<TABLE>
<CAPTION>
1 YEAR SINCE INCEPTION
------ ---------------
<S> <C> <C> <C>
A Shares 13.65% 8.22% (1-29-99)
A Shares with sales charge 7.14% 4.45% (1-29-99)
B Shares 12.82% 7.42% (1-29-99)
B Shares with CDSC 7.82% 5.12% (1-29-99)
C Shares 12.69% 7.47% (1-29-99)
C Shares with CDSC 11.69% 7.47% (1-29-99)
</TABLE>
The performance data above represents past performance which is not predictive
of future results. The investment return and principal value of an investment in
the fund will fluctuate so that an investor's shares, when redeemed, may be
worth more or less than their original cost. The figures above do not reflect
deduction of the maximum front-end sales charge of 5.75% for Class A shares or
the contingent deferred sales charge of 5% for Class B shares and 1% for Class C
shares, as applicable, except where noted. Such figures would be lower if the
maximum sales charge were deducted.
--------------------------------------------------------------------------------
22
<PAGE> 24
SCHEDULE OF INVESTMENTS (CONTINUED)
SEPTEMBER 30, 2000
c-------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SECURITY EQUITY FUND - ENHANCED INDEX SERIES
NUMBER MARKET
COMMON STOCKS OF SHARES VALUE
-------------------------------------------------------------
<S> <C> <C>
ADVERTISING - 0.2%
Interpublic Group of Companies,
Inc. ........................ 500 $ 17,031
Omnicom Group, Inc. ........... 296 21,590
--------------
38,621
AEROSPACE & DEFENSE - 1.0%
BF Goodrich Company............ 100 3,919
Boeing Company................. 1,600 100,800
General Dynamics Corporation... 500 31,406
Honeywell International,
Inc. ........................ 900 32,063
Lockheed Martin Corporation.... 700 23,072
Northrop Grumman Corporation... 100 9,088
United Technologies
Corporation.................. 800 55,400
--------------
255,748
AGRICULTURAL PRODUCTS - 0.0%
Archer-Daniels-Midland
Company...................... 1,202 10,369
AIR FREIGHT & COURIERS - 0.1%
FedEx Corporation*............. 700 31,038
AIRLINES - 0.3%
AMR Corporation*............... 500 16,344
Delta Air Lines, Inc. ......... 300 13,312
Southwest Airlines Company..... 1,200 29,100
U.S. Airways Group, Inc.*...... 300 9,131
--------------
67,887
ALTERNATIVE CARRIERS - 0.8%
Global Crossing, Ltd.*......... 1,900 58,900
Qwest Communications Interna-
tional, Inc. ................ 3,000 144,188
--------------
203,088
ALUMINUM - 0.2%
Alcan Aluminum, Ltd. .......... 400 11,575
Alcoa, Inc. ................... 1,600 40,500
--------------
52,075
APPAREL & ACCESSORIES - 0.0%
V.F. Corporation............... 200 4,938
APPAREL RETAIL - 0.2%
Gap, Inc. ..................... 1,600 32,200
Limited, Inc. ................. 1,100 24,269
--------------
56,469
APPLICATION SOFTWARE - 0.5%
Autodesk, Inc. ................ 100 2,538
Citrix Systems, Inc.*.......... 300 6,019
Parametric Technology
Company*..................... 900 9,844
PeopleSoft, Inc.*.............. 700 19,556
</TABLE>
<TABLE>
<CAPTION>
NUMBER MARKET
COMMON STOCKS (CONTINUED) OF SHARES VALUE
-------------------------------------------------------------
<S> <C> <C>
APPLICATION SOFTWARE (CONTINUED)
Siebel Systems, Inc.*.......... 800 $ 89,050
Synavant, Inc.*................ 28 187
--------------
127,194
AUTO PARTS & EQUIPMENT - 0.1%
Dana Corporation............... 300 6,450
Delphi Automotive Systems
Corporation.................. 1,000 15,125
Johnson Controls, Inc. ........ 100 5,319
TRW, Inc. ..................... 100 4,063
Visteon Corporation............ 200 3,025
--------------
33,982
AUTOMOBILE MANUFACTURERS - 0.6%
Ford Motor Company............. 3,700 93,656
General Motors Corporation..... 1,100 71,500
--------------
165,156
BANKS - 4.6%
AmSouth Bancorporation......... 700 8,750
BB&T Corporation............... 600 18,075
Bank of America Corporation.... 3,200 167,600
Bank of New York Company,
Inc. ........................ 1,318 73,890
Bank One Corporation(1)........ 1,600 61,800
Bank United Corporation........ 200 10,138
Charter One Financial, Inc. ... 420 10,238
Chase Manhattan
Corporation(1)............... 550 25,403
Comerica, Inc. ................ 200 11,688
Fifth Third Bancorp............ 800 43,100
First Union Corporation........ 1,800 57,937
Firstar Corporation............ 1,800 40,275
FleetBoston Financial
Corporation.................. 1,600 62,400
Golden West Financial
Corporation.................. 216 11,583
Huntington Bancshares, Inc. ... 900 13,219
J.P. Morgan & Company, Inc. ... 800 130,700
KeyCorp........................ 900 22,781
Mellon Financial Corporation... 800 37,100
National City Corporation...... 1,300 28,763
Northern Trust Corporation..... 400 35,550
Old Kent Financial
Corporation.................. 200 5,787
PNC Bank Corporation........... 491 31,915
Regions Financial
Corporation.................. 600 13,613
Summit Bancorp................. 465 16,042
SunTrust Banks, Inc. .......... 500 24,906
Synovus Financial
Corporation.................. 534 11,314
U.S. Bancorp................... 1,400 31,850
Union Planters Corporation..... 400 13,225
</TABLE>
See accompanying notes.
--------------------------------------------------------------------------------
24
<PAGE> 25
SCHEDULE OF INVESTMENTS (CONTINUED)
SEPTEMBER 30, 2000
c-------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SECURITY EQUITY FUND - ENHANCED INDEX SERIES
(CONTINUED)
NUMBER MARKET
COMMON STOCKS (CONTINUED) OF SHARES VALUE
-------------------------------------------------------------
<S> <C> <C>
BANKS (CONTINUED)
Wachovia Corporation........... 300 $ 17,006
Washington Mutual, Inc. ....... 700 27,869
Wells Fargo & Company(1)....... 3,000 137,812
--------------
1,202,329
BIOTECHNOLOGY - 0.8%
Amgen, Inc.*................... 2,000 139,656
Biogen, Inc.*.................. 400 24,400
Medimmune, Inc.*............... 500 38,625
--------------
202,681
BREWERS - 0.3%
Anheuser-Busch Companies,
Inc. ........................ 1,600 67,700
Brown-Forman Corporation (Cl.
B)........................... 100 5,475
--------------
73,175
BROADCASTING & CABLE TV - 0.6%
Clear Channel Communications,
Inc.*........................ 1,300 73,450
Comcast Corporation*........... 1,900 77,781
General Motors Corporation (Cl.
H)........................... 3 112
--------------
151,343
BUILDING PRODUCTS - 0.1%
Armstrong Holdings, Inc. ...... 62 740
Crane Company.................. 127 2,905
Masco Corporation.............. 800 14,900
--------------
18,545
CASINOS & GAMING - 0.1%
Harrah's Entertainment,
Inc.*........................ 500 13,750
COMMERCIAL PRINTING - 0.0%
Donnelley (R.R.) & Sons
Company...................... 100 2,456
COMPUTER & ELECTRONICS RETAIL - 0.2%
Best Buy Company, Inc.*........ 500 31,813
Radio Shack Corporation........ 300 19,387
--------------
51,200
COMPUTER HARDWARE - 4.7%
Apple Computer, Inc.*.......... 700 17,981
Compaq Computer Corporation.... 3,100 85,498
Dell Computer
Corporation*(1).............. 4,900 150,981
Gateway, Inc.*................. 700 32,725
Hewlett-Packard Company(1)..... 2,000 194,000
International Business Machines
Corporation(1)............... 3,200 360,000
</TABLE>
<TABLE>
<CAPTION>
NUMBER MARKET
COMMON STOCKS (CONTINUED) OF SHARES VALUE
-------------------------------------------------------------
-------------------------------------------------------------
<S> <C> <C>
COMPUTER HARDWARE (CONTINUED)
NCR Corporation*............... 400 $ 15,125
Palm, Inc.*.................... 1,000 52,938
Sun Microsystems, Inc.*(1)..... 2,800 326,900
--------------
1,236,148
COMPUTER STORAGE & PERIPHERALS - 2.3%
Cobalt Networks*............... 600 34,725
EMC Corporation*(1)............ 4,099 406,313
Lexmark International, Inc.*... 200 7,500
Network Appliance, Inc.*....... 600 76,425
Seagate Technology, Inc.*...... 1,100 75,900
--------------
600,863
CONSTRUCTION & ENGINEERING - 0.0%
Fluor Corporation.............. 100 3,000
CONSTRUCTION & FARM MACHINERY - 0.2%
Caterpillar, Inc............... 100 3,375
Cummins Engine Company, Inc.... 200 5,988
Deere & Company................ 300 9,975
Navistar International
Corporation*................. 300 8,981
Paccar, Inc.................... 300 11,119
--------------
39,438
CONSTRUCTION MATERIALS - 0.5%
Southdown, Inc. ............... 1,900 135,375
Vulcan Materials Company....... 100 4,019
--------------
139,394
CONSUMER FINANCE - 0.6%
Capital One Financial
Corporation.................. 300 21,019
Countrywide Credit Industries,
Inc. ........................ 100 3,775
Household International,
Inc.......................... 811 45,923
MBNA Corporation............... 1,500 57,750
Providian Financial
Corporation.................. 200 25,400
--------------
153,867
DATA PROCESSING SERVICES - 0.6%
Automatic Data Processing,
Inc. ........................ 1,100 73,562
First Data Corporation......... 700 27,344
Paychex, Inc. ................. 800 42,000
Sabre Holdings Corporation..... 401 11,604
--------------
154,510
DEPARTMENT STORES - 0.4%
Dillard's Inc. ................ 207 2,199
Federated Department Stores,
Inc.*........................ 600 15,675
J.C. Penney Company, Inc. ..... 500 5,906
Kohl's Corporation*............ 700 40,381
</TABLE>
See accompanying notes.
--------------------------------------------------------------------------------
25
<PAGE> 26
SCHEDULE OF INVESTMENTS (CONTINUED)
SEPTEMBER 30, 2000
c-------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SECURITY EQUITY FUND - ENHANCED INDEX SERIES
(CONTINUED)
NUMBER MARKET
COMMON STOCKS (CONTINUED) OF SHARES VALUE
-------------------------------------------------------------
<S> <C> <C>
DEPARTMENT STORES (CONTINUED)
May Department Stores
Company...................... 600 $ 12,300
Nordstrom, Inc. ............... 300 4,669
Sears, Roebuck & Company....... 800 25,936
--------------
107,066
DIVERSIFIED CHEMICALS - 0.5%
E.I. du Pont de Nemours &
Company(1)................... 1,400 58,013
Eastman Chemical Company....... 300 11,081
Engelhard Corporation.......... 200 3,250
FMC Corporation*............... 200 13,412
Hercules, Inc. ................ 201 2,839
Union Carbide Corporation...... 1,000 37,750
--------------
126,345
DIVERSIFIED COMMERCIAL SERVICES - 0.2%
Cendant Corporation*........... 1,300 14,138
Convergys Corporation*......... 400 15,550
Dun & Bradstreet
Corporation*................. 200 6,887
Ecolab, Inc. .................. 200 7,213
IMS Health, Inc. .............. 571 11,848
--------------
55,636
DIVERSIFIED FINANCIAL SERVICES - 5.3%
American Express Company(1).... 2,600 157,950
Associates First Capital
Corporation.................. 2,700 102,600
Bear Stearns Companies,
Inc. ........................ 200 12,600
Charles Schwab Corporation..... 2,501 88,785
CIT Group, Inc. ............... 475 8,313
Citigroup, Inc.(1)............. 7,450 402,766
Fannie Mae(1).................. 1,800 128,700
Franklin Resources, Inc. ...... 400 17,772
Freddie Mac.................... 900 48,656
Lehman Brothers Holdings,
Inc. ........................ 300 44,325
Merrill Lynch & Company,
Inc. ........................ 1,600 105,600
Morgan Stanley Dean Witter &
Company(1)................... 2,000 182,875
Paine Webber Group, Inc. ...... 200 13,687
State Street Corporation....... 300 39,000
Stilwell Financial, Inc.*...... 400 17,400
T.Rowe Price Associates........ 200 9,388
USA Education, Inc. ........... 200 9,638
--------------
1,390,055
</TABLE>
<TABLE>
<CAPTION>
NUMBER MARKET
COMMON STOCKS (CONTINUED) OF SHARES VALUE
-------------------------------------------------------------
-------------------------------------------------------------
<S> <C> <C>
DIVERSIFIED METALS & MINING - 0.1%
Arch Coal, Inc. ............... 12 $ 120
Freeport-McMoRan Copper & Gold,
Inc. (Cl. B)*................ 410 3,613
Inco, Ltd.*.................... 300 4,838
Phelps Dodge Corporation....... 100 4,175
--------------
12,746
DRUG RETAIL - 0.4%
CVS Corporation................ 700 32,419
Longs Drug Stores
Corporation.................. 100 1,912
Walgreen Company............... 1,800 68,288
--------------
102,619
ELECTRIC UTILITIES - 2.2%
AES Corporation*............... 900 61,650
Ameren Corporation............. 400 16,750
American Electric Power
Company, Inc. ............... 500 19,563
CMS Energy Corporation......... 400 10,775
CP&L Energy, Inc. ............. 500 20,844
Cinergy Corporation............ 200 6,612
Consolidated Edison, Inc. ..... 300 10,238
Constellation Energy Group..... 391 19,452
DTE Energy Company............. 400 15,300
Dominion Resources, Inc. ...... 500 29,031
Duke Energy Corporation........ 600 51,450
Edison International........... 900 17,381
Entergy Corporation............ 600 22,350
FPL Group, Inc. ............... 300 19,725
FirstEnergy Corporation........ 700 18,856
Florida Progress Corporation... 400 21,175
GPU, Inc. ..................... 100 3,244
Niagra Mohawk Holdings,
Inc.*........................ 300 4,725
PECO Energy Company............ 500 30,281
PG&E Corporation............... 900 21,769
PPL Corporation................ 400 16,700
Pinnacle West Capital
Corporation.................. 100 5,087
Public Service Enterprise
Group, Inc. ................. 400 17,875
Reliant Energy, Inc. .......... 700 32,550
Southern Company............... 1,400 45,413
TXU Corporation................ 700 27,738
Unicom Corporation............. 300 16,856
--------------
583,390
</TABLE>
See accompanying notes.
--------------------------------------------------------------------------------
26
<PAGE> 27
SCHEDULE OF INVESTMENTS (CONTINUED)
SEPTEMBER 30, 2000
c-------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SECURITY EQUITY FUND - ENHANCED INDEX SERIES
(CONTINUED)
NUMBER MARKET
COMMON STOCKS (CONTINUED) OF SHARES VALUE
-------------------------------------------------------------
<S> <C> <C>
ELECTRICAL COMPONENTS & EQUIPMENT - 0.4%
American Power Conversion
Corporation*................. 400 $ 7,675
Cooper Industries, Inc. ....... 109 3,842
Emerson Electric Company....... 700 46,900
Molex, Inc. ................... 300 16,331
National Service Industries,
Inc. ........................ 300 5,869
Rockwell International
Corporation.................. 200 6,050
Thermo Electron Corporation*... 302 7,852
--------------
94,519
ELECTRONIC EQUIPMENT & INSTRUMENTS - 0.6%
Agilent Technologies, Inc.*.... 700 34,256
PerkinElmer, Inc. ............. 200 20,875
Sanmina Corporation*........... 300 28,087
Solectron Corporation*......... 1,300 59,963
--------------
143,181
ENVIRONMENTAL SERVICES - 0.1%
Allied Waste Industries,
Inc.*........................ 348 3,197
Waste Management, Inc. ........ 1,200 20,925
--------------
24,122
FOOD DISTRIBUTORS - 0.1%
SUPERVALU, Inc. ............... 200 3,013
SYSCO Corporation.............. 500 23,156
--------------
26,169
FOOD RETAIL - 0.3%
Kroger Company*................ 1,500 33,844
Safeway, Inc.*................. 1,100 51,356
Winn-Dixie Stores, Inc. ....... 300 4,312
--------------
89,512
FOOTWEAR - 0.0%
Reebok International, Ltd.*.... 600 11,288
FOREST PRODUCTS - 0.1%
Georgia-Pacific Group.......... 300 7,050
Louisiana-Pacific
Corporation.................. 200 1,838
Weyerhaeuser Company........... 200 8,075
--------------
16,963
GAS UTILITIES - 0.3%
Columbia Energy Group.......... 112 7,952
El Paso Energy Corporation..... 600 36,975
Keyspan Corporation............ 400 16,050
NICOR, Inc. ................... 193 6,984
ONEOK, Inc. ................... 21 835
</TABLE>
<TABLE>
<CAPTION>
NUMBER MARKET
COMMON STOCKS (CONTINUED) OF SHARES VALUE
-------------------------------------------------------------
-------------------------------------------------------------
<S> <C> <C>
GAS UTILITIES (CONTINUED)
Peoples Energy Corporation..... 200 $ 6,675
Sempra Energy.................. 600 12,487
--------------
87,958
GENERAL MERCHANDISE STORES - 1.9%
Consolidated Stores
Corporation*................. 900 12,150
Costco Wholesale
Corporation*................. 1,000 34,938
Dollar General Corporation..... 600 10,050
Kmart Corporation*............. 900 5,400
Target Corporation............. 1,700 43,562
Wal-Mart Stores, Inc.(1)....... 8,200 394,625
--------------
500,725
GOLD - 0.1%
Barrick Gold Corporation....... 740 11,285
Homestake Mining Company....... 497 2,578
Newmont Mining Corporation..... 300 5,100
Placer Dome, Inc. ............. 624 5,889
--------------
24,852
HEALTH CARE DISTRIBUTORS & SERVICES - 0.3%
Cardinal Health, Inc. ......... 500 44,094
McKesson HBOC, Inc. ........... 400 12,225
Quintiles Transnational
Corporation*................. 600 9,563
--------------
65,882
HEALTH CARE EQUIPMENT - 1.7%
Acuson Corporation*............ 5,600 127,400
Baxter International, Inc. .... 505 40,305
Becton, Dickinson & Company.... 400 10,575
Biomet, Inc. .................. 600 21,000
Boston Scientific
Corporation*................. 700 11,506
Guidant Corporation*........... 700 49,481
Mallinckrodt, Inc. ............ 300 13,687
Medtronic, Inc. ............... 2,200 113,988
PE Corp - PE Biosystems
Group........................ 400 46,600
St. Jude Medical, Inc.*........ 300 15,300
--------------
449,842
HEALTH CARE FACILITIES - 0.3%
HCA - The Healthcare Company... 900 33,412
HEALTHSOUTH Corporation*....... 1,700 13,813
Manor Care, Inc.*.............. 700 10,981
Tenet Healthcare
Corporation*................. 800 29,100
--------------
87,306
</TABLE>
See accompanying notes.
--------------------------------------------------------------------------------
27
<PAGE> 28
SCHEDULE OF INVESTMENTS (CONTINUED)
SEPTEMBER 30, 2000
c-------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SECURITY EQUITY FUND - ENHANCED INDEX SERIES
(CONTINUED)
NUMBER MARKET
COMMON STOCKS (CONTINUED) OF SHARES VALUE
-------------------------------------------------------------
<S> <C> <C>
HEALTH CARE SUPPLIES - 0.1%
Allergan, Inc. ................ 201 $ 16,972
HOME FURNISHINGS - 0.1%
Leggett & Platt, Inc. ......... 400 6,325
Springs Industries, Inc. ...... 200 5,637
--------------
11,962
HOME IMPROVEMENT RETAIL - 0.9%
Home Depot, Inc.(1)............ 4,200 222,863
Lowe's Companies, Inc. ........ 300 13,462
Sherwin-Williams Company....... 300 6,413
--------------
242,738
HOMEBUILDING - 0.1%
Centex Corporation............. 95 3,052
Kaufman & Broad Home
Corporation.................. 300 8,081
Pulte Corporation.............. 300 9,900
--------------
21,033
HOTELS - 0.1%
Carnival Corporation........... 300 7,388
Hilton Hotels Corporation...... 694 8,024
Marriott International,
Inc.*........................ 400 14,575
--------------
29,987
HOUSEHOLD APPLIANCES - 0.0%
Black & Decker Corporation..... 100 3,419
Stanley Works.................. 166 3,828
Whirlpool Corporation.......... 100 3,887
--------------
11,134
HOUSEHOLD PRODUCTS - 2.1%
Clorox Company................. 400 15,825
Colgate-Palmolive Company...... 1,000 47,200
Fort James Corporation......... 9,500 290,344
Kimberly-Clark Corporation..... 900 50,231
Procter & Gamble Company(1).... 2,100 140,700
--------------
544,300
HOUSEWARES & SPECIALTIES - 0.1%
American Greetings
Corporation.................. 100 1,750
Fortune Brands, Inc. .......... 300 7,950
Newell Rubbermaid, Inc. ....... 500 11,406
Tupperware Corporation......... 400 7,200
--------------
28,306
</TABLE>
<TABLE>
<CAPTION>
NUMBER MARKET
COMMON STOCKS (CONTINUED) OF SHARES VALUE
-------------------------------------------------------------
-------------------------------------------------------------
<S> <C> <C>
INDUSTRIAL CONGLOMERATES - 5.0%
General Electric Company(1).... 18,300 $ 1,055,681
ITT Industries, Inc. .......... 95 3,082
Minnesota Mining & Manufac-
turing Company............... 706 64,334
Textron, Inc. ................. 400 18,450
Tyco International, Ltd.(1).... 3,100 160,813
--------------
1,302,360
INDUSTRIAL GASES - 0.1%
Air Products & Chemicals,
Inc. ........................ 400 14,400
Praxair, Inc. ................. 200 7,475
--------------
21,875
INDUSTRIAL MACHINERY - 0.3%
Briggs & Stratton
Corporation.................. 300 11,344
Danaher Corporation............ 207 10,298
Dover Corporation.............. 300 14,081
Eaton Corporation.............. 109 6,717
Illinois Tool Works, Inc. ..... 200 11,175
Ingersoll-Rand Company......... 100 3,388
Pall Corporation............... 200 3,987
Parker-Hannifin Corporation.... 100 3,375
Timken Company................. 100 1,369
--------------
65,734
INSURANCE BROKERS - 0.3%
Aon Corporation................ 400 15,700
Marsh & McLennan Companies,
Inc. ........................ 500 66,375
--------------
82,075
INTEGRATED OIL & GAS - 4.2%
Amerada Hess Corporation....... 100 6,694
Chevron Corporation(1)......... 1,200 102,300
Coastal Corporation............ 400 29,650
Conoco, Inc. (CL. B)........... 999 26,911
Exxon Mobil Corporation........ 6,600 588,225
Occidental Petroleum
Corporation.................. 900 19,631
Phillips Petroleum Company..... 700 43,925
Royal Dutch Petroleum
Company(1)................... 3,900 233,756
Texaco, Inc. .................. 600 31,500
USX-Marathon Group............. 600 17,025
--------------
1,099,617
INTEGRATED TELECOMMUNICATION SERVICES - 4.0%
AT&T Corporation(1)............ 6,400 188,000
ALLTEL Corporation............. 200 10,438
BellSouth Corporation(1)....... 3,400 136,850
SBC Communications, Inc.(1).... 6,199 309,950
</TABLE>
See accompanying notes.
--------------------------------------------------------------------------------
28
<PAGE> 29
SCHEDULE OF INVESTMENTS (CONTINUED)
SEPTEMBER 30, 2000
c-------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SECURITY EQUITY FUND - ENHANCED INDEX SERIES
(CONTINUED)
NUMBER MARKET
COMMON STOCKS (CONTINUED) OF SHARES VALUE
-------------------------------------------------------------
<S> <C> <C>
INTEGRATED TELECOMMUNICATION SERVICES
(CONTINUED)
Sprint Corporation (FON
Group)....................... 900 $ 26,381
Verizon Communications......... 4,600 222,813
WorldCom, Inc.*................ 5,300 160,987
--------------
1,055,419
INTERNET SOFTWARE & SERVICES - 1.2%
Alteon Websystems, Inc.*....... 400 43,356
America Online, Inc.*(1)....... 3,400 182,750
Yahoo!, Inc.*.................. 1,100 100,444
--------------
326,550
IT CONSULTING & SERVICES - 1.2%
Ceridian Corporation*.......... 500 14,031
Computer Sciences
Corporation*................. 400 29,700
Electronic Data Systems
Corporation.................. 400 16,600
Mynd Corporation*.............. 17,350 234,225
Unisys Corporation*............ 700 7,875
--------------
302,431
LEISURE PRODUCTS - 0.1%
Brunswick Corporation.......... 200 3,650
Hasbro, Inc. .................. 300 3,431
Mattel, Inc. .................. 804 8,995
--------------
16,076
LIFE & HEALTH INSURANCE - 0.4%
AFLAC, Inc. ................... 400 25,625
American General Corporation... 403 31,434
Conseco Inc. .................. 622 4,743
Jefferson-Pilot Corporation.... 100 6,788
Lincoln National Corporation... 285 13,716
Torchmark Corporation.......... 200 5,562
UnumProvident Corporation...... 400 10,900
--------------
98,768
MANAGED HEALTH CARE - 0.4%
Aetna, Inc. ................... 200 11,613
Cigna Corporation.............. 300 31,320
Humana, Inc.*.................. 1,000 10,750
United Health Group, Inc. ..... 300 29,625
Wellpoint Health Networks,
Inc.*........................ 200 19,200
--------------
102,508
METAL & GLASS CONTAINERS - 0.0%
Crown Cork & Seal Company,
Inc. ........................ 700 7,481
Owens-Illinois, Inc.*.......... 290 2,683
--------------
10,164
</TABLE>
<TABLE>
<CAPTION>
NUMBER MARKET
COMMON STOCKS (CONTINUED) OF SHARES VALUE
-------------------------------------------------------------
-------------------------------------------------------------
<S> <C> <C>
MOTORCYCLE MANUFACTURERS - 0.1%
Harley-Davidson, Inc. ......... 494 $ 23,650
MOVIES & ENTERTAINMENT - 2.3%
Seagram Company, Ltd. ......... 700 40,206
Time Warner, Inc.(1)........... 3,100 242,575
Viacom, Inc. (Cl.B)*........... 2,900 169,650
Walt Disney Company............ 3,700 141,525
--------------
593,956
MULTI-LINE INSURANCE - 1.8%
American International Group,
Inc.(1)...................... 4,400 421,025
Hartford Financial Services
Group, Inc. ................. 400 29,175
Loews Corporation.............. 200 16,675
--------------
466,875
MULTI-UTILITIES - 0.6%
Enron Corporation.............. 1,308 114,613
Williams Companies, Inc. ...... 1,000 42,250
Xcel Energy, Inc. ............. 500 13,750
--------------
170,613
NETWORKING EQUIPMENT - 2.8%
Cabletron Systems, Inc.*....... 500 14,688
Cisco Systems, Inc.*(1)........ 13,300 734,825
--------------
749,513
OFFICE ELECTRONICS - 0.1%
Xerox Corporation.............. 1,200 18,075
OFFICE SERVICES & SUPPLIES - 0.0%
Avery Dennison Corporation..... 200 9,275
OIL & GAS DRILLING - 0.1%
Rowan Companies, Inc.*......... 400 11,600
Transocean Sedco Forex,
Inc. ........................ 300 17,587
--------------
29,187
OIL & GAS EQUIPMENT & SERVICES - 0.5%
Baker Hughes, Inc. ............ 500 18,563
Halliburton Company............ 800 39,150
Schlumberger, Ltd. ............ 1,000 82,312
--------------
140,025
OIL & GAS EXPLORATION & PRODUCTION - 0.4%
Anadarko Petroleum
Corporation.................. 600 39,876
Apache Corporation............. 200 11,825
Burlington Resources, Inc. .... 300 11,044
Devon Energy Corporation....... 250 15,038
Kerr-Mcgee Corporation......... 400 26,500
Unocal Corporation............. 400 14,175
--------------
118,458
</TABLE>
See accompanying notes.
--------------------------------------------------------------------------------
29
<PAGE> 30
SCHEDULE OF INVESTMENTS (CONTINUED)
SEPTEMBER 30, 2000
c-------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SECURITY EQUITY FUND - ENHANCED INDEX SERIES
(CONTINUED)
NUMBER MARKET
COMMON STOCKS (CONTINUED) OF SHARES VALUE
-------------------------------------------------------------
<S> <C> <C>
OIL & GAS REFINING & MARKETING - 0.0%
Sunoco, Inc. .................. 100 $ 2,694
Tosco Corporation.............. 173 5,395
--------------
8,089
PACKAGED FOODS - 4.0%
Bestfoods...................... 5,600 407,400
ConAgra, Inc. ................. 900 18,056
General Mills, Inc. ........... 400 14,200
Heinz (H.J.) Company........... 600 22,237
Nabisco Group Holdings
Corporation.................. 6,200 176,700
Nabisco Holdings Corporation... 5,900 317,125
Quaker Oats Company............ 200 15,825
Ralston-Ralston Purina Group... 566 13,407
Sara Lee Corporation........... 1,600 32,500
Unilever N.V. ................. 700 33,775
Wm. Wrigley Jr. Company........ 200 14,975
--------------
1,066,200
PAPER PACKAGING - 0.1%
Pactiv Corporation*............ 320 3,580
Sealed Air Corporation*........ 200 9,050
Temple-Inland, Inc. ........... 200 7,575
--------------
20,205
PAPER PRODUCTS - 0.1%
Boise Cascade Corporation...... 300 7,969
International Paper Company.... 201 5,766
Mead Corporation............... 200 4,675
Potlatch Corporation........... 200 6,325
Westvaco Corporation........... 200 5,337
Willamette Industries, Inc. ... 100 2,800
--------------
32,872
PERSONAL PRODUCTS - 0.2%
Alberto-Culver Company (Cl.
B)........................... 11 317
Avon Products, Inc. ........... 400 16,350
Gillette Company(1)............ 1,300 40,137
--------------
56,804
PHARMACEUTICALS - 7.6%
Abbott Laboratories(1)......... 2,400 114,150
ALZA Corporation*.............. 311 26,902
American Home Products
Corporation(1)............... 2,400 135,750
Bristol-Myers Squibb
Company(1)................... 3,600 205,650
Eli Lilly & Company(1)......... 2,100 170,362
Johnson & Johnson(1)........... 2,500 234,844
Merck & Company, Inc.(1)....... 4,200 312,638
</TABLE>
<TABLE>
<CAPTION>
NUMBER MARKET
COMMON STOCKS (CONTINUED) OF SHARES VALUE
-------------------------------------------------------------
-------------------------------------------------------------
<S> <C> <C>
PHARMACEUTICALS (CONTINUED)
Pfizer, Inc.(1)................ 11,601 $ 521,297
Pharmacia Corporation.......... 2,400 144,450
Schering-Plough
Corporation(1)............... 2,600 120,900
Watson Pharmaceuticals,
Inc.*........................ 300 19,462
--------------
2,006,405
PHOTOGRAPHIC PRODUCTS - 0.1%
Eastman Kodak Company.......... 400 16,350
Polaroid Corporation........... 100 1,344
--------------
17,694
PROPERTY & CASUALTY INSURANCE - 0.4%
Allstate Corporation........... 1,300 45,175
Chubb Corporation.............. 292 23,105
Cincinnati Financial
Corporation.................. 200 7,100
MBIA, Inc. .................... 100 7,112
MGIC Investment Corporation.... 200 12,225
SAFECO Corporation............. 400 10,900
St. Paul Companies, Inc. ...... 300 14,794
--------------
120,411
PUBLISHING & PRINTING - 0.4%
Dow Jones & Company, Inc. ..... 100 6,050
Gannett Company, Inc. ......... 400 21,200
Harcourt General, Inc. ........ 300 17,700
Knight-Ridder, Inc. ........... 300 15,244
McGraw-Hill Companies, Inc. ... 300 19,069
New York Times Company......... 200 7,863
Tribune Company................ 500 21,812
--------------
108,938
RAILROADS - 0.2%
Burlington Northern Santa Fe
Corporation.................. 800 17,250
CSX Corporation................ 400 8,725
Norfolk Southern Corporation... 719 10,515
Union Pacific Corporation...... 400 15,550
--------------
52,040
REAL ESTATE INVESTMENT TRUSTS - 0.8%
Urban Shopping Centers,
Inc. ........................ 4,400 209,000
RESTAURANTS - 0.4%
Darden Restaurants, Inc. ...... 800 16,650
McDonald's Corporation......... 1,800 54,338
Starbucks Corporation*......... 500 20,031
Tricon Global Restaurants,
Inc.*........................ 284 8,697
Wendy's International, Inc. ... 200 4,013
--------------
103,729
</TABLE>
See accompanying notes.
--------------------------------------------------------------------------------
30
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SEPTEMBER 30, 2000
c-------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SECURITY EQUITY FUND - ENHANCED INDEX SERIES
(CONTINUED)
NUMBER MARKET
COMMON STOCKS (CONTINUED) OF SHARES VALUE
-------------------------------------------------------------
<S> <C> <C>
SEMICONDUCTOR EQUIPMENT - 0.5%
Applied Materials, Inc.*....... 1,600 $ 94,900
KLA-Tencor Corporation*........ 500 20,594
Novellus Systems, Inc.*........ 400 18,625
Teradyne, Inc.*................ 400 14,000
--------------
148,119
SEMICONDUCTORS - 4.6%
Adaptec, Inc.*................. 200 4,000
Advanced Micro Devices,
Inc.*........................ 700 16,537
Altera Corporation*............ 900 42,975
Analog Devices, Inc.*.......... 800 66,050
Broadcom Corporation*.......... 400 97,500
Conexant Systems, Inc.*........ 600 25,125
Intel Corporation(1)........... 12,700 528,638
LSI Logic Corporation*......... 700 20,475
Linear Technology
Corporation.................. 500 32,375
Maxim Integrated Products,
Inc.*........................ 600 48,262
Micron Technology, Inc.*....... 1,100 50,600
National Semiconductor
Corporation*................. 500 20,125
SDL, Inc.*..................... 185 56,980
Texas Instruments, Inc.(1)..... 3,100 146,281
Xilinx, Inc.*.................. 700 59,938
--------------
1,215,861
SOFT DRINKS - 1.4%
Coca-Cola Company(1)........... 4,500 248,062
Coca-Cola Enterprises, Inc. ... 800 12,750
PepsiCo, Inc. ................. 2,600 119,600
--------------
380,412
SPECIALTY CHEMICALS - 1.5%
Bush Boake Allen, Inc.*........ 2,100 100,406
Grace (W.R.) & Company*........ 138 949
Great Lakes Chemical Company... 100 2,931
International Flavors &
Fragrances, Inc. ............ 400 7,300
Lilly Industries, Inc. ........ 9,200 271,400
PPG Industries, Inc. .......... 200 7,938
Rohm & Haas Company............ 400 11,625
Sigma-Aldrich Corporation...... 100 3,300
--------------
405,849
SPECIALTY STORES - 0.4%
AutoZone, Inc.*................ 500 11,344
Bed Bath & Beyond, Inc.*....... 900 21,952
Office Depot, Inc.*............ 1,400 10,937
Staples, Inc.*................. 900 12,769
</TABLE>
<TABLE>
<CAPTION>
NUMBER MARKET
COMMON STOCKS (CONTINUED) OF SHARES VALUE
-------------------------------------------------------------
-------------------------------------------------------------
<S> <C> <C>
SPECIALTY STORES (CONTINUED)
Tiffany & Company.............. 600 $ 23,137
Toys 'R' Us, Inc.*............. 800 13,000
--------------
93,139
STEEL - 0.1%
Allegheny Technologies,
Inc. ........................ 200 3,625
Bethlehem Steel Corporation*... 1,800 5,400
Nucor Corporation.............. 100 3,012
USX-U.S. Steel Group, Inc. .... 500 7,594
Worthington Industries,
Inc. ........................ 456 4,275
--------------
23,906
SYSTEMS SOFTWARE - 4.6%
Adobe Systems, Inc. ........... 196 30,429
BMC Software, Inc. *........... 500 9,562
Computer Associates
International, Inc. ......... 1,000 25,188
Compuware Corporation*......... 700 5,862
Mercury Interactive
Corporation*................. 200 31,350
Microsoft Corporation*(1)...... 9,700 584,425
Novell, Inc.*.................. 600 5,963
Oracle Corporation*(1)......... 5,300 417,375
Sapient Corporation*........... 300 12,206
VERITAS Software
Corporation*................. 600 85,200
--------------
1,207,560
TELECOMMUNICATIONS EQUIPMENT - 4.2%
ADC Telecommunications,
Inc.*........................ 1,600 43,025
Andrew Corporation*............ 400 10,475
Comverse Technology, Inc.*..... 400 43,200
Corning, Inc. ................. 500 148,500
JDS Uniphase Corporation*...... 1,000 94,687
Lucent Technologies, Inc.(1)... 6,000 183,375
Motorola, Inc. ................ 3,999 112,972
Nortel Networks Corporation.... 4,800 285,900
QUALCOMM, Inc.*(1)............. 1,500 106,875
Scientific-Atlanta, Inc. ...... 400 25,450
Tellabs, Inc.*................. 800 38,200
--------------
1,092,659
TIRES & RUBBER - 0.0%
Cooper Tire & Rubber Company... 600 6,038
Goodyear Tire & Rubber
Company...................... 300 5,400
--------------
11,438
</TABLE>
See accompanying notes.
--------------------------------------------------------------------------------
31
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SCHEDULE OF INVESTMENTS (CONTINUED)
SEPTEMBER 30, 2000
c-------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SECURITY EQUITY FUND - ENHANCED INDEX SERIES
(CONTINUED)
PRINCIPAL
AMOUNT OR
NUMBER MARKET
COMMON STOCKS (CONTINUED) OF SHARES VALUE
-------------------------------------------------------------
<S> <C> <C>
TOBACCO - 0.5%
Philip Morris Companies,
Inc.(1)...................... 4,100 $ 120,694
UST, Inc. ..................... 326 7,457
--------------
128,151
TRADING COMPANIES & DISTRIBUTORS - 0.0%
Genuine Parts Company.......... 500 9,531
TRUCKING - 0.0%
Ryder System, Inc. ............ 400 7,375
WIRELESS TELECOMMUNICATION SERVICES - 0.5%
Nextel Communications, Inc.*... 1,600 74,800
Sprint Corporation (PCS
Group)*...................... 1,796 62,972
--------------
137,772
--------------
Total common stocks - 96.9%............... 25,463,235
U.S. GOVERNMENT SECURITIES - 0.8%
--------------------------------------------
U.S. Treasury Bill, 5.93% -
10-19-00..................... $ 200,000 199,452
--------------
Total investments - 97.7%................. 25,662,687
Cash and other assets, less
liabilities - 2.3%...................... 608,068
--------------
Total net assets - 100.0%................. $ 26,270,755
==============
</TABLE>
The identified cost of investments for federal income tax purposes at September
30, 2000 was $23,565,505.
* Non-Income producing security.
(1) Security is segregated as collateral for futures, forward contracts or
options.
See accompanying notes.
--------------------------------------------------------------------------------
32
<PAGE> 33
c-------------------------------------------------------------------------------
MANAGER'S COMMENTARY
SECURITY EQUITY FUND--
INTERNATIONAL SERIES
NOVEMBER 15, 2000
[BANKERS TRUST LOGO]
<TABLE>
<C> <C> <S>
[LEVY PHOTO] [REINER PHOTO]
Michael Levy Robert Reiner
Portfolio Manager Portfolio Manager
</TABLE>
[WANG PHOTO]
Julie Wang
Portfolio Manager
TO OUR SHAREHOLDERS:
For the fiscal year ended September 30, 2000 the Security International Fund
generated a total return of +13.62%, compared with a return for its benchmark
MSCI-EAFE Index of +1.95%.(1) The portfolio is primarily composed of high
quality, undervalued large cap and mid cap stocks of foreign issuers in both
developed and emerging market countries.
A VOLATILE PERIOD FOR GLOBAL MARKETS
Beginning in mid-March when the U.S.'s Nasdaq Composite Index peaked, we saw a
period of volatility which displayed extraordinarily wide swings upward and
downward in market indexes and in individual stocks as well. This negative
investor sentiment was coupled with a continued increase in global interest
rates and a steady weakening of the euro. We believe that after nearly twelve
months of interest rate increases in all G7 countries, rates are now at or near
their peak and this phase of rate hikes is almost over.
The exception is the European Central Bank, where the interest rate increases to
date have merely offset the devaluation of the euro. The euro has remained under
pressure throughout the calendar year despite some of the best economic
conditions in recent times in the European Union countries. While the weak
currency has helped the export picture, it has negative implications for
inflation and therefore for interest rates. Europe, excluding the U.K., was
perhaps the most negatively affected by stock market volatility and the weak
currency. The U.K. proved more resilient, since its economy began its downward
movement earlier and has now begun to recover.
Japan's equity markets remain weak despite signs of improving economic activity.
The Japanese consumer, however, has remained absent from this recovery as
continued weak retail sales indicate. Foreign institutions that supported the
Japanese markets earlier have become net sellers. The weakness in the Nasdaq
Composite Index in the U.S. also caused difficulties in Japan, as the "new
Japan" technology-related stocks came under renewed pressure along with the "new
economy" stocks in other global markets. Japanese markets were unfazed by the
discontinuance of the Zero Interest Rate policy there.
PORTFOLIO STRATEGIES DURING PERIODS OF HIGH VOLATILITY
Overweightings in the portfolio in telecommunications, media and technology
sectors were favorable for performance. While the long term growth prospects for
some of these companies are not in dispute, when they reached lofty valuation
levels we elected to move out of some of the higher-growth companies in order to
move into stocks generally considered to be more defensive in nature. Two of
these major moves involved underweighting telecommunications companies and
overweighting financials, especially banks.
As volatility remained high and the earnings outlook became clouded, companies
which we perceived as safe havens (for example, pharmaceutical companies Aventis
S.A. and Elan Corporation plc, and food manufacturer Nestle S.A.) performed
well. Another strong performer was Reckitt Benckiser plc, a manufacturer of
household
--------------------------------------------------------------------------------
33
<PAGE> 34
MANAGER'S COMMENTARY (CONTINUED)
SECURITY EQUITY FUND--
INTERNATIONAL SERIES
NOVEMBER 15, 2000
c-------------------------------------------------------------------------------
products. The company was formed by the merger of Reckitt & Coleman of the U.K.
and Dutch company Benckiser. The synergies resulting from the merger boosted the
stock price, as investors found the union attractive.
In the financial sector Spanish banks continued to perform well. Financial
stocks were also among the best-performing areas in the U.K. markets as interest
rates there were perceived to be near their peaks. Positions in Royal Bank of
Scotland and Barclays Bank Limited added to performance following strong
corporate earnings reports. Insurers did well also as investors considered them
defensive in the short term, and to have positive structural trends underpinning
them in the long term as pension fund reform takes place in Europe.
OUR OUTLOOK FOR INTERNATIONAL MARKETS
We expect market volatility to continue in the months ahead. Europe, except for
the U.K., has seen the peak in its economic growth at a time when interest rates
could still rise to maintain price stability. In Japan, while there are signs of
recovery, they are faltering, with poor consumer demand and confidence weighing
heavily on the markets. We expect to remain somewhat defensive in searching for
attractive opportunities at reduced price levels in the international markets.
Sincerely,
Michael Levy, Robert Reiner, and Julie Wang
Portfolio Managers
(1) Performance figures are based on Class A shares and do not reflect deduction
of the sales charge. Fee waivers and/or reimbursements reduced Fund expenses
and in the absence of such waivers, the performance quoted would be reduced.
Investing in foreign countries may involve risks, such as currency
fluctuations and political instability, not associated with investing
exclusively in the U.S.
--------------------------------------------------------------------------------
34
<PAGE> 35
MANAGER'S COMMENTARY (CONTINUED)
SECURITY EQUITY FUND--
INTERNATIONAL SERIES
NOVEMBER 15, 2000
-------------------------------------------------------------------------------
INTERNATIONAL SERIES VS.
MORGAN STANLEY CAPITAL
INTERNATIONAL EAFE
[LINE GRAPH]
<TABLE>
<CAPTION>
MORGAN STANLEY CAPITAL
INTERNATIONAL SERIES INTERNATIONAL EAFE
-------------------- ----------------------
<S> <C> <C>
1/99 10000.00 10000.00
3/99 8822.00 10174.00
6/99 9086.00 10439.00
9/99 9133.00 10905.00
12/99 12064.00 12765.00
3/00 12073.00 12758.00
6/00 11253.00 12261.00
9/00 10377.00 11278.00
</TABLE>
This chart assumes a $10,000 investment in Class A shares of International
Series on 01/29/1999 and reflects a deduction of the 5.75% sales load. On
9/30/2000, the value of your investment in Class A shares of the fund (with
dividends reinvested) would have grown to $10,377. In comparison, the same
$10,000 investment would have grown to $11,278 based on the MSCI EAFE index's
performance.
---------------- PERFORMANCE ----------------
TOP 5 HOLDINGS**
<TABLE>
<CAPTION>
% OF
NET ASSETS
----------
<S> <C>
ING Groep N.V. 2.4%
Royal Bank of Scotland Group plc 2.1%
Total Fina Elf S.A. (Cl. B) 2.1%
Shell Transport & Trading Company plc 2.1%
Reckitt Benckiser plc 2.0%
</TABLE>
** At September 30, 2000
AVERAGE ANNUAL RETURNS
AS OF SEPTEMBER 30, 2000
<TABLE>
<CAPTION>
1 YEAR SINCE INCEPTION
------ ---------------
<S> <C> <C> <C>
A Shares 13.62% 5.93% (1-29-99)
A Shares with sales charge 7.10% 2.24% (1-29-99)
B Shares 12.75% 5.18% (1-29-99)
B Shares with CDSC 7.75% 2.85% (1-29-99)
C Shares 12.81% 5.41% (1-29-99)
C Shares with CDSC 11.81% 5.41% (1-29-99)
</TABLE>
The performance data above represents past performance which is not predictive
of future results. The investment return and principal value of an investment in
the fund will fluctuate so that an investor's shares, when redeemed, may be
worth more or less than their original cost. The figures above do not reflect
deduction of the maximum front-end sales charge of 5.75% for Class A shares or
the contingent deferred sales charge of 5% for Class B shares and 1% for Class C
shares, as applicable, except where noted. Such figures would be lower if the
maximum sales charge were deducted.
--------------------------------------------------------------------------------
34
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SEPTEMBER 30, 2000
c-------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SECURITY EQUITY FUND - INTERNATIONAL SERIES
NUMBER MARKET
COMMON STOCKS OF SHARES VALUE
-------------------------------------------------------------
<S> <C> <C>
AUSTRALIA - 1.1%
Brambles Industries, Ltd. ..... 2,080 $ 54,365
Cable & Wireless Optus,
Ltd.*........................ 17,860 38,750
Qantas Airways, Ltd. .......... 14,000 26,971
--------------
120,086
BRAZIL - 1.4%
Petroleo Brasileiro S.A.*(1)... 1,980 59,524
Tele Norte Leste Participacoes
S.A.(1)...................... 1,478 33,808
Telecomunicacoes Brasilerias
S.A.(1)...................... 660 52,223
--------------
145,555
CANADA - 4.7%
Bombardier, Inc. (Cl. B)....... 3,800 65,665
Canada Life Financial
Corporation.................. 200 4,652
Celestica, Inc.*............... 890 61,311
C-MAC Industries, Inc.*(1)..... 800 46,000
Nortel Networks Corporation.... 2,260 135,711
Rogers Communications, Inc.
(Cl. B)*..................... 4,210 99,752
Sun Life Financial Services of
Canada*...................... 4,016 82,877
--------------
495,968
CHINA - 0.3%
China Unicom, Ltd. ADR*........ 1,370 29,883
DENMARK - 0.4%
Vestas Wind Systems A.S. ...... 740 37,813
FINLAND - 2.4%
Jot Automation Group Ojy....... 10,080 59,601
Nokia Oyj ADR(1)............... 4,822 191,976
--------------
251,577
FRANCE - 12.4%
Alcatel(1)..................... 1,960 125,403
Aventis S.A.(1)................ 2,410 180,780
Axa(1)......................... 1,043 136,226
BNP Paribas S.A.(1)............ 1,510 133,124
Business Objects S.A.*(1)...... 761 86,041
Christian Dior S.A.(1)......... 1,270 68,423
Societe Generale(1)............ 2,800 156,538
Societe Television Francaise
1(1)......................... 1,300 74,571
Suez Lyonnaise des Eaux
S.A.(1)...................... 760 117,842
Total Fina Elf S.A.(1)......... 1,497 219,039
--------------
1,297,987
</TABLE>
<TABLE>
<CAPTION>
NUMBER MARKET
COMMON STOCKS (CONTINUED) OF SHARES VALUE
-------------------------------------------------------------
<S> <C> <C>
GERMANY - 7.1%
Deutsche Lufthansa AG(1)....... 4,320 $ 89,553
Dresdner Bank AG............... 2,020 88,740
E.On AG(1)..................... 2,220 114,218
EM.TV & Merchandising AG....... 900 47,496
Intershop Communications
AG*(1)....................... 1,470 96,323
Porsche AG(1).................. 14 50,656
Siemens AG(1).................. 926 119,311
SAP AG(1)...................... 580 143,344
--------------
749,641
HONG KONG - 2.0%
HSBC Holdings plc.............. 6,400 89,471
Hutchison Whampoa, Ltd. ....... 5,920 78,585
Li & Fung, Ltd.*............... 17,600 37,133
--------------
205,189
HUNGARY - 0.3%
OTP Bank Rt. .................. 500 25,769
IRELAND - 5.2%
Bank of Ireland................ 22,947 183,472
CRH plc........................ 9,700 154,427
Elan Corporation plc ADR*(1)... 3,700 202,575
--------------
540,474
ISRAEL - 0.2%
Partner Communications Company,
Ltd.*(1)..................... 3,200 24,600
ITALY - 7.2%
ENI SpA(1)..................... 31,010 164,198
Ruinione Adriatica di Sicurta
SpA(1)....................... 10,560 138,856
Saipem SpA(1).................. 6,530 36,305
San Paolo - IMI SpA(1)......... 9,151 148,755
Telecom Italia SpA(1).......... 10,770 114,435
Unicredito Italiano SpA(1)..... 30,300 158,032
--------------
760,581
JAPAN - 11.7%
Fanuc, Ltd. ................... 1,400 154,821
Fujitsu, Ltd.(1)............... 4,000 92,911
Furukawa Electric Company,
Ltd.(1)...................... 5,000 138,118
Kyocera Corporation(1)......... 700 106,885
Nippon Telegraph & Telephone
Corporation(1)............... 5 49,047
Nissan Motor Company, Ltd.*.... 3,000 17,213
Pioneer Corporation............ 3,000 122,154
Rohm Company, Ltd.(1).......... 400 109,606
Sony Corporation(1)............ 1,500 152,138
</TABLE>
See accompanying notes.
--------------------------------------------------------------------------------
36
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SCHEDULE OF INVESTMENTS (CONTINUED)
SEPTEMBER 30, 2000
c-------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SECURITY EQUITY FUND - INTERNATIONAL SERIES
(CONTINUED)
NUMBER MARKET
COMMON STOCKS (CONTINUED) OF SHARES VALUE
-------------------------------------------------------------
<S> <C> <C>
JAPAN (CONTINUED)
Takeda Chemical Industries,
Ltd.(1)...................... 2,100 $ 138,756
Toshiba Corporation(1)......... 18,000 145,086
--------------
1,226,735
NETHERLANDS - 12.7%
ABN AMRO Holding N.V. ......... 4,915 114,510
ASM Lithography Holding
N.V.*........................ 3,930 130,405
Buhrmann N.V. ................. 7,575 190,521
Fortis (NL) N.V. .............. 2,990 91,562
Hagemeyer N.V. ................ 2,220 58,970
ING Groep N.V. ................ 3,840 255,787
Koninklijke Ahold N.V. ........ 5,490 155,667
Koninklijke Numico N.V. ....... 1,460 74,923
Koninklijke (Royal) Philips
Electronics N.V. ............ 3,190 137,296
STMicroelectronics N.V.(1)..... 2,540 120,968
--------------
1,330,609
NORWAY - 0.2%
Petroleum Geo-Services ASA*.... 1,330 22,561
POLAND - 0.2%
Telekomunikacja Polska S.A.
GDR.......................... 4,353 23,336
SINGAPORE - 0.9%
Chartered Semiconductor
Manufacturing, Ltd.
ADR*(1)...................... 390 23,668
DBS Group Holdings, Ltd. ...... 4,000 44,130
NatSteel Electronics, Ltd. .... 11,500 29,736
--------------
97,534
SOUTH KOREA - 0.6%
Korea Electric Power
Corporation ADR(1)........... 1,880 24,558
Korea Telecom Corporation
ADR(1)....................... 1,140 38,333
--------------
62,891
SPAIN - 5.2%
Altadis S.A. .................. 8,280 119,471
Banco Bilbao Vizcaya Argentaria
S.A. ........................ 8,159 123,269
Banco Popular Espanol S.A. .... 3,800 116,534
Telefonica S.A.*............... 4,673 92,582
Union Electrica Fenosa S.A. ... 5,170 93,121
--------------
544,977
</TABLE>
<TABLE>
<CAPTION>
NUMBER MARKET
COMMON STOCKS (CONTINUED) OF SHARES VALUE
-------------------------------------------------------------
-------------------------------------------------------------
<S> <C> <C>
SWITZERLAND - 3.6%
Adecco S.A. ................... 190 $ 123,120
Nestle S.A. ................... 58 120,805
Swiss Re....................... 21 40,095
Serono S.A. ................... 79 96,442
--------------
380,462
TAIWAN - 0.5%
Taiwan Semiconductor
Manufacturing Company,
Ltd.*........................ 9,624 31,948
United Microelectronics
Corporation ADR*............. 1,947 23,121
--------------
55,069
TURKEY - 0.3%
Vestel Elektronik Sanayi ve
Ticaret A.S.*................ 2,500 460
Yapi ve Kredi Bankasi A.S.*.... 3,592,551 25,911
--------------
26,371
UNITED KINGDOM - 13.2%
BP Amoco plc ADR(1)............ 1,530 81,090
Barclays plc(1)................ 6,340 175,944
Celltech Group plc*(1)......... 4,500 89,154
Glaxo Wellcome plc(1).......... 3,130 94,451
Imperial Tobacco Group
plc(1)....................... 1,770 16,932
International Power plc........ 4,070 28,342
Reckitt Benckiser plc(1)....... 16,680 204,443
Royal Bank of Scotland Group
plc*(1)...................... 19,990 233,372
Shell Transport & Trading
Company plc(1)............... 26,190 213,745
Vodafone Group plc(1).......... 38,723 144,417
WPP Group plc(1)............... 9,070 108,353
--------------
1,390,243
UNITED STATES - 0.3%
Comverse Technology,
Inc.*(1)..................... 300 32,400
--------------
Total common stocks - 94.1%............... 9,878,311
</TABLE>
See accompanying notes.
--------------------------------------------------------------------------------
37
<PAGE> 38
SCHEDULE OF INVESTMENTS (CONTINUED)
SEPTEMBER 30, 2000
c-------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SECURITY EQUITY FUND - INTERNATIONAL SERIES
(CONTINUED)
PRINCIPAL
AMOUNT OR
NUMBER MARKET
COMMON STOCKS (CONTINUED) OF SHARES VALUE
-------------------------------------------------------------
<S> <C> <C>
OPTIONS PURCHASED - 0.7%
--------------------------------------------
Euro Put Option, expires
10/25/00 strike price 0.86... 500,000 $ 2,400
Euro Put Option, expires
11/27/00 strike price 0.86... 500,000 4,649
NIKKEI 225 Call Option 5%,
expires 12/08/00 strike price
17,703.4366.................. 22 2,002
NIKKEI 225 Call Option 5%,
expires 12/08/00 strike price
174.111...................... 2,233 11
NIKKEI 225 Call Option 5%,
expires 12/08/00 strike price
156.9375..................... 2,154 6,312
NIKKEI 225 Call Option 5%,
expires 12/08/00 strike price
153.39....................... 9,283 41,865
NIKKEI 225 Call Option 5%,
expires 12/08/00 strike price
155.9718..................... 6,469 20,803
--------------
78,042
REPURCHASE AGREEMENT - 9.7%
--------------------------------------------
State Street, 4.25%, 10-02-00
(Collateralized by FNMA,
6.00% - 2001 with a value of
$1,025,000).................. $ 1,016,380 1,016,380
--------------
Total investments - 104.5%................ 10,972,733
Liabilities, less cash & other assets -
(4.5%).................................. (473,802)
--------------
Total net assets - 100.0%................. $ 10,498,931
==============
<CAPTION>
INVESTMENT CONCENTRATION
-------------------------------------------------------------
<S> <C> <C>
At September 30, 2000, International Series' investment
concentration, by industry, was as follows:
Advertising................................. 1.0%
Aerospace/Defense........................... 0.3%
Airlines.................................... 1.1%
Automobiles................................. 0.6%
Banks & Credit.............................. 19.8%
Broadcast Media............................. 1.2%
Building & Construction..................... 2.6%
Computer Software........................... 3.1%
Computer Systems............................ 1.4%
Cosmetics................................... 0.7%
Electric Utilities.......................... 1.4%
Electrical Equipment........................ 2.8%
Electronics................................. 5.4%
Financial Services.......................... 2.4%
Food Processing............................. 1.9%
Food Wholesalers............................ 1.5%
Health Care................................. 2.8%
Household Products.......................... 2.0%
Insurance................................... 3.0%
Manufacturing............................... 5.3%
Medical..................................... 1.3%
Oil......................................... 7.6%
Pharmaceuticals............................. 3.5%
Retail...................................... 0.9%
Semi-Conductors............................. 4.0%
Services.................................... 3.0%
Telecommunications.......................... 11.7%
Tobacco..................................... 1.3%
Transportation.............................. 0.5%
Options..................................... 0.7%
Cash, short-term investments and other
assets, less liabilities.................. 5.2%
--------------
100.0%
==============
</TABLE>
The identified cost of investments for federal income tax purposes at September
30, 2000 was $10,623,270.
* Non-Income producing security.
ADR (American Depositary Receipt)
(1) Security is segregated as collateral for futures, forward contracts or
options.
See accompanying notes.
--------------------------------------------------------------------------------
38
<PAGE> 39
c-------------------------------------------------------------------------------
MANAGER'S COMMENTARY
SECURITY EQUITY FUND--
SOCIAL AWARENESS SERIES
NOVEMBER 15, 2000
FLYING S LOGO
[SHIELDS PHOTO]
Cindy Shields
Portfolio Manager
TO OUR SHAREHOLDERS:
Performance in the Social Awareness Fund for the twelve months ended September
30, 2000 was favorable. The Fund returned +9.88%, ahead of its benchmark index,
the Domini Social Index, which returned +9.80% over the same period.(1)
ADDING VALUE THROUGH STOCK SELECTION
The greatest positive during the fiscal year was favorable stock selection. We
don't depend on market timing or on overweighting or underweighting a particular
sector to generate positive returns. Instead of taking these sorts of risks, we
focus on selecting the industries and companies within each sector which we
believe have the most potential for long term growth.
For example, the information technology sector is made up of a number of
industries. These include communications equipment, computer hardware, software,
networking, semiconductors, and other industries. Our task is to understand the
prospects for each sector's business cycle, and to determine which industries
hold the greatest performance potential given the current position in the
business cycle. We must then select companies within those industries that
exhibit consistent growth characteristics.
TECHNOLOGY STOCK SELECTION LED PERFORMANCE
Following the above-described process, we were able to choose stocks within the
information technology sector that served us very well during the fiscal year.
Our best performers were in a primary growth area, communications-related
companies. Adobe Systems Incorporated, a manufacturer of desktop publishing
software and other products for creating, distributing, and managing
information, gained 173%.
Analog Devices, Inc. and Scientific-Atlanta, Inc. were also strong performers in
the information technology group. Analog Devices makes semiconductor components
used in high-performance consumer electronics applications like wireless
handsets. Scientific-Atlanta provides products and services such as set-top
boxes for advanced communications networks. We believe worldwide portability of
data is in its infancy. Although there have been some rough spots recently, we
expect it to be a prime growth area over the long term.
HEALTH CARE STOCKS ADDED VALUE TO THE PORTFOLIO
Many of our health care holdings performed well during the year. Cardinal
Health, Inc., a pharmaceutical distribution services provider, gained over 60%
after its stock price had been pushed down along with a group of its
competitors. Cardinal Health's share value recovered when the company
consistently reported favorable earnings.
Specialty pharmaceutical companies Allergan, Inc. and Watson Pharmaceuticals,
Inc. have benefited from buying many smaller drugs from the major pharmaceutical
manufacturers and focusing marketing attention on them in order to increase
sales. They also have not been threatened by a large number of looming patent
expirations, a growing problem for the major companies. Watson Pharmaceuticals,
as a manufacturer of generic drugs, has felt less pressure from Medicare
reimbursement issues that have arisen during the presidential campaign
discussions than the major drug manufacturers have felt.
A FEW WEAKER PERFORMERS DETRACTED
Within the telecommunications services sector, the stock of WorldCom, Inc.
declined about 36% after its merger with Sprint Corporation was rejected by the
Justice Department. WorldCom was forced to lower its projections for growth when
the merger was denied, and as a result of a more competitive pricing environment
for its long distance business.
In the consumer discretionary sector, Wal-Mart Stores, Inc. has been a
disappointment over the short term. Investors abandoned the stock when consumer
spending began to slow, expecting Wal-Mart's revenues and profits to slow
accordingly. We continue to hold the stock, however, believing that over the
long term Wal-Mart should gain share at the expense of other retailers if a
general consumer spending slowdown continues.
--------------------------------------------------------------------------------
39
<PAGE> 40
MANAGER'S COMMENTARY (CONTINUED)
SECURITY EQUITY FUND--
SOCIAL AWARENESS SERIES
NOVEMBER 15, 2000
-------------------------------------------------------------------------------
SOCIAL AWARENESS SERIES VS.
S&P 500 INDEX, AND
DOMINI SOCIAL INDEX
[LINE GRAPH]
<TABLE>
<CAPTION>
SOCIAL AWARENESS SERIES S&P 500 INDEX DOMINI SOCIAL INDEX
----------------------- ------------- -------------------
<S> <C> <C> <C>
11/96 10000 10000 10000
9441 10543 10553
9008 10825 10913
10433 12715 12858
9/97 11300 13668 13937
11544 14060 14591
13048 16021 16693
13337 16551 17352
9/98 12192 14904 15687
15052 18078 19833
15468 18981 20654
16439 20319 22055
9/99 15372 19049 20721
17390 21884 24441
18350 22386 25222
17779 21791 23867
9/00 16890 21580 25792
</TABLE>
This chart assumes a $10,000 investment in Class A shares of Social Awareness
Series on 11/01/1996 and reflects a deduction of the 5.75% sales load. On
9/30/2000, the value of your investment in Class A shares of the fund (with
dividends reinvested) would have grown to $16,890. In comparison, the same
$10,000 investment would have grown to $25,792 based on the Domini Social
index's performance and $21,580 based on the S&P 500 Index.
A VICTORY FOR SOCIAL INVESTING ACTIVISTS
Building materials retailers The Home Depot, Inc. and Lowe's Companies, Inc.
have both announced plans to discontinue the practice of harvesting and selling
old growth lumber. These announcements were major victories for social activism;
the firms are to be commended for their decisions. While it is often difficult
to convince corporations that they should change such practices, these decisions
are proof that persistence can be rewarded, and we are pleased that both stocks
are a part of our portfolio.
Sincerely,
Cindy Shields
Portfolio Manager
(1) Performance figures are based on Class A shares and do not reflect deduction
of the sales charge.
---------------- PERFORMANCE ----------------
TOP 5 HOLDINGS**
<TABLE>
<CAPTION>
% OF
NET ASSETS
----------
<S> <C>
Cisco Systems, Inc. 5.8%
Microsoft Corporation 4.7%
Intel Corporation 4.4%
American International Group, Inc. 3.4%
EMC Corporation 3.3%
</TABLE>
** September 30, 2000
AVERAGE ANNUAL RETURNS
AS OF SEPTEMBER 30, 2000
<TABLE>
<CAPTION>
1 YEAR SINCE INCEPTION
------ ---------------
<S> <C> <C> <C>
A Shares 9.88% 16.09% (11-1-96)
A Shares with sales charge 3.55% 14.33% (11-1-96)
B Shares 8.53% 14.80% (11-1-96)
B Shares with CDSC 3.53% 14.29% (11-1-96)
C Shares 8.43% 3.41% (1-29-99)
C Shares with CDSC 7.43% 3.41% (1-29-99)
</TABLE>
The performance data above represents past performance which is not predictive
of future results. The investment return and principal value of an investment in
the fund will fluctuate so that an investor's shares, when redeemed, may be
worth more or less than their original cost. The figures above do not reflect
deduction of the maximum front-end sales charge of 5.75% for Class A shares or
the contingent deferred sales charge of 5% for Class B shares and 1% for Class C
shares, as applicable, except where noted. Such figures would be lower if the
maximum sales charge were deducted.
--------------------------------------------------------------------------------
39
<PAGE> 41
SCHEDULE OF INVESTMENTS (CONTINUED)
SEPTEMBER 30, 2000
c-------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SECURITY EQUITY FUND - SOCIAL AWARENESS
SERIES
NUMBER MARKET
COMMON STOCKS OF SHARES VALUE
-------------------------------------------------------------
<S> <C> <C>
ADVERTISING - 0.6%
Omnicom Group, Inc............. 2,600 $ 189,637
AIR FREIGHT & COURIERS - 0.2%
FedEx Corporation*............. 1,500 66,510
AIRLINES - 0.7%
Southwest Airlines Company..... 9,600 232,800
APPAREL RETAIL - 0.6%
Talbots, Inc. ................. 3,000 198,750
BANKS - 7.0%
Bank of America Corporation.... 4,800 251,400
Bank of New York Company,
Inc. ........................ 7,700 431,681
Chase Manhattan Corporation.... 4,500 207,844
Mellon Financial Corporation... 3,700 171,587
Northern Trust Corporation..... 5,600 497,700
PNC Financial Services Group... 4,300 279,500
Wells Fargo & Company.......... 7,700 353,719
--------------
2,193,431
BIOTECHNOLOGY - 0.6%
Amgen, Inc.*................... 2,500 174,570
BROADCASTING & CABLE TV - 1.0%
Clear Channel Communications,
Inc.*........................ 1,692 95,598
Comcast Corporation*........... 5,000 204,688
--------------
300,286
COMPUTER HARDWARE - 7.4%
Compaq Computer Corporation.... 5,300 146,174
Dell Computer Corporation*..... 12,200 375,912
Hewlett-Packard Company........ 2,800 271,600
International Business Machines
Corporation.................. 5,400 607,500
Sun Microsystems, Inc.*........ 7,800 910,650
--------------
2,311,836
COMPUTER STORAGE & PERIPHERALS - 3.3%
EMC Corporation*............... 10,400 1,030,900
CONSTRUCTION & FARM MACHINERY - 0.3%
Deere & Company................ 3,100 103,075
CONSUMER FINANCE - 1.5%
Household International,
Inc. ........................ 3,600 203,850
MBNA Corporation............... 7,200 277,200
--------------
481,050
DATA PROCESSING SERVICES - 1.6%
Paychex, Inc................... 9300 488,250
DEPARTMENT STORES - 0.6%
Kohl's Corporation*............ 3,200 184,600
</TABLE>
<TABLE>
<CAPTION>
NUMBER MARKET
COMMON STOCKS (CONTINUED) OF SHARES VALUE
-------------------------------------------------------------
-------------------------------------------------------------
<S> <C> <C>
DIVERSIFIED FINANCIAL SERVICES - 4.0%
American Express Company....... 6,300 $ 382,725
Charles Schwab Corporation..... 6,300 223,650
Fannie Mae..................... 3,500 250,250
Freddie Mac.................... 3,100 167,594
Merrill Lynch & Company,
Inc.......................... 3,600 237,600
--------------
1,261,819
DRUG RETAIL - 1.2%
CVS Corporation................ 5,000 231,562
Walgreen Company............... 4,000 151,750
--------------
383,312
ELECTRICAL COMPONENTS & EQUIPMENT - 1.1%
Molex, Inc. ................... 6,500 353,844
ELECTRONIC EQUIPMENT & INSTRUMENTS - 1.0%
Sanmina Corporation*........... 3,400 318,325
FOOD RETAIL - 0.7%
Kroger Company*................ 10,200 230,137
GENERAL MERCHANDISE STORES - 4.4%
Family Dollar Stores, Inc. .... 10,000 192,500
Target Corporation............. 7,000 179,375
Wal-Mart Stores, Inc. ......... 21,000 1,010,625
--------------
1,382,500
HEALTH CARE DISTRIBUTORS & SERVICES - 0.8%
Cardinal Health, Inc. ......... 2,675 235,902
HEALTH CARE EQUIPMENT - 1.9%
Guidant Corporation*........... 4,200 296,888
Medtronic, Inc. ............... 5,700 295,331
--------------
592,219
HEALTH CARE SUPPLIES - 0.7%
Allergan, Inc. ................ 2,600 219,538
HOME IMPROVEMENT RETAIL - 1.6%
Home Depot, Inc. .............. 2,400 127,350
Lowe's Companies, Inc. ........ 8,000 359,000
--------------
486,350
HOUSEHOLD PRODUCTS - 2.1%
Clorox Company................. 2,800 110,775
Colgate-Palmolive Company...... 1,600 75,520
Kimberly-Clark Corporation..... 2,000 111,625
Procter & Gamble Company....... 5,300 355,100
--------------
653,020
</TABLE>
See accompanying notes.
--------------------------------------------------------------------------------
41
<PAGE> 42
SCHEDULE OF INVESTMENTS (CONTINUED)
SEPTEMBER 30, 2000
c-------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SECURITY EQUITY FUND - SOCIAL AWARENESS
SERIES (CONTINUED)
NUMBER MARKET
COMMON STOCKS (CONTINUED) OF SHARES VALUE
-------------------------------------------------------------
<S> <C> <C>
INDUSTRIAL GASES - 0.5%
Praxair, Inc. ................. 4,000 $ 149,500
INDUSTRIAL MACHINERY - 0.4%
Illinois Tool Works, Inc. ..... 2,300 128,512
INTEGRATED TELECOMMUNICATION SERVICES - 4.0%
AT&T Corporation............... 12,244 359,668
BellSouth Corporation.......... 5,000 201,250
SBC Communications, Inc. ...... 12,248 612,400
Sprint Corporation (FON
Group)....................... 2,200 64,487
--------------
1,237,805
INTERNET SOFTWARE & SERVICES - 1.6%
America Online, Inc.*.......... 5,600 301,000
Yahoo!, Inc.*.................. 2,200 200,888
--------------
501,888
LIFE & HEALTH INSURANCE - 1.1%
American General Corporation... 4,300 335,400
MOVIES & ENTERTAINMENT - 2.4%
Viacom, Inc. (Cl. B)*.......... 7,300 427,050
Walt Disney Company............ 8,700 332,775
--------------
759,825
MULTI-LINE INSURANCE - 3.4%
American International Group,
Inc. ........................ 11,080 1,060,218
MULTI-UTILITIES - 1.4%
Enron Corporation.............. 4,900 429,363
NETWORKING EQUIPMENT - 5.8%
Cisco Systems, Inc.*........... 32,900 1,817,725
OFFICE SERVICES & SUPPLIES - 0.6%
Avery Dennison Corporation..... 2,500 115,938
Pitney Bowes, Inc. ............ 1,800 70,987
--------------
186,925
OIL & GAS EQUIPMENT & SERVICES - 0.6%
BJ Services Company*........... 3,200 195,600
PACKAGED FOODS - 0.9%
Bestfoods...................... 2,500 181,875
General Mills, Inc. ........... 3,000 106,500
--------------
288,375
PERSONAL PRODUCTS - 0.4%
Gillette Company............... 3,500 108,062
</TABLE>
<TABLE>
<CAPTION>
NUMBER MARKET
COMMON STOCKS (CONTINUED) OF SHARES VALUE
-------------------------------------------------------------
-------------------------------------------------------------
<S> <C> <C>
PHARMACEUTICALS - 6.9%
ALZA Corporation*.............. 2,600 $ 224,900
Forest Laboratories, Inc.*..... 1,700 194,969
Johnson & Johnson.............. 6,600 619,987
Merck & Company, Inc. ......... 10,800 803,925
Schering-Plough Corporation.... 6,500 302,250
--------------
2,146,031
PROPERTY & CASUALTY INSURANCE - 0.9%
Chubb Corporation.............. 3,700 292,762
PUBLISHING & PRINTING - 0.8%
McGraw-Hill Companies, Inc. ... 1,800 114,412
New York Times Company......... 3,100 121,869
--------------
236,281
RESTAURANTS - 0.4%
McDonald's Corporation......... 4,200 126,788
SEMICONDUCTORS - 7.1%
Analog Devices, Inc.*.......... 2,700 222,919
Intel Corporation.............. 33,000 1,373,625
Texas Instruments, Inc. ....... 6,800 320,875
Xilinx, Inc.*.................. 3,600 308,250
--------------
2,225,669
SOFT DRINKS - 3.1%
Coca-Cola Company.............. 11,600 639,450
PepsiCo, Inc. ................. 6,900 317,400
--------------
956,850
SYSTEMS SOFTWARE - 5.9%
Adobe Systems, Inc............. 2,400 372,600
Microsoft Corporation*......... 24,400 1,470,100
--------------
1,842,700
TELECOMMUNICATIONS EQUIPMENT - 4.1%
ADC Telecommunications,
Inc.*........................ 6,400 172,100
Comverse Technology, Inc.*..... 3,800 410,400
Lucent Technologies, Inc. ..... 13,710 419,012
Scientific-Atlanta, Inc. ...... 4,200 267,225
--------------
1,268,737
WIRELESS TELECOMMUNICATION SERVICES - 0.5%
Sprint Corporation (PCS
Group)*...................... 4,900 171,806
--------------
Total common stocks - 97.7%............... 30,539,483
Cash and other assets, less liabilities -
2.3%.................................... 713,904
--------------
Total net assets - 100.0%................. $ 31,253,387
==============
</TABLE>
The identified cost of investments owned at September 30, 2000 was the same for
book and tax purposes.
* Non-Income producing security.
See accompanying notes.
--------------------------------------------------------------------------------
42
<PAGE> 43
c-------------------------------------------------------------------------------
MANAGER'S COMMENTARY
SECURITY EQUITY FUND--SELECT 25 SERIES(R)
NOVEMBER 15, 2000
FLYING S LOGO
[MILBERGER PHOTO]
Terry Milberger
Senior Portfolio Manager
TO OUR SHAREHOLDERS:
The Select 25(R) Fund, a concentrated portfolio made up of 25 premier growth
company stocks, returned +7.69% during the twelve months ended September 30,
2000.(1) Its benchmark index, the S&P 500 Index, gained 13.28% over the same
period.
Our management objective for the Select 25 Fund is a long term strategy of
carefully selecting individual companies which have displayed consistent
earnings growth over several years and which we expect to continue to perform in
the same excellent manner in the years ahead. We do not target certain weights
for the various market sectors; instead, our sector weightings are a by-product
of our stock selection. While a concentrated portfolio of this type may exhibit
more volatility over short periods, we believe that over the long term the
strategy of buying and holding premier growth companies will produce solid
results.
TECHNOLOGY STOCKS SAGGED IN THE LATEST SIX MONTHS
A large weighting in technology stocks, which were stellar performers in the
first half of the fiscal year, was a major negative during the most recent six
months. With technology stocks making up about 40% of the total portfolio, the
sharp selloff in tech-related issues led to significant underperformance for the
portfolio. Although short-term performance in technology has been weak, we
believe many companies in this sector--those which have sound fundamental
qualities--have outstanding growth prospects over the long term.
Still, some of our technology holdings, such as EMC Corporation, did very well.
In early October of 1999 EMC's stock traded at about $35 per share; it closed
the fiscal year at $99.25 per share. The company is benefiting greatly from the
Internet's rapid growth, since it is considered the leader in products that deal
with information storage and retrieval. Semiconductor manufacturer Intel
Corporation exhibited performance more representative of the sector, however,
gaining 77% in the first six months of the fiscal year, only to fall 37% in the
second six months. We continue to hold this stock, recognizing the cyclical
volatility in its price movement.
INVESTORS IN RETAIL COMPANY STOCKS FEARED THE SLOWING ECONOMY
Extreme volatility was also displayed in the retail sector as concerns about a
slowing economy led investors to worry about weaker store sales and revenues.
Wal-Mart Stores, Inc. exemplified this growing concern as its stock price gained
19% in the first half of the fiscal year and fell 15% in the second half.
Another of our favorite companies, The Home Depot, Inc., rose 50% in the first
quarter of the fiscal year, but fell 23% before the end of September.
We don't believe these companies have become bad companies. Short-term economic
events have hurt their stock prices, but their long-term fundamentals remain
sound, and earnings growth should recover in the coming months. We have often
said that good companies can be bad stocks over short periods of time; stock
performance over the past twelve months bears that out.
MARKET DOWNTURNS CREATE BUYING OPPORTUNITIES
Indeed, we believe that the sharp downturns in the markets in 2000 have created
excellent buying opportunities for many premier stocks. Concerns about an
economic slowdown were appropriate, in our opinion, but concerns about the long
term growth prospects for these companies is misplaced. We anticipate keeping
portfolio turnover low in the Select 25(R) Fund, expecting that outstanding
companies which have proven themselves over time will continue to prove
themselves in the months and years ahead.
Sincerely,
Terry Milberger
Senior Portfolio Manager
(1) Performance figures are based on Class A shares and do not reflect deduction
of the sales charge.
--------------------------------------------------------------------------------
43
<PAGE> 44
MANAGER'S COMMENTARY (CONTINUED)
SECURITY EQUITY FUND--SELECT 25 SERIES(R)
NOVEMBER 15, 2000
-------------------------------------------------------------------------------
SELECT 25 SERIES VS.
S&P 500 INDEX, AND
S&P BARRA GROWTH INDEX
[LINE GRAPH]
<TABLE>
<CAPTION>
SELECT 25 SERIES S&P 500 INDEX S&P BARRA GROWTH INDEX
---------------- ------------- ----------------------
<S> <C> <C> <C>
1/99 10000.00 10000.00 10000.00
3/99 9802.00 10076.00 10073.00
6/99 9906.00 10786.00 10460.00
9/99 9925.00 10112.00 10095.00
12/99 11734.00 11616.00 12088.00
3/00 11574.00 11883.00 12584.00
6/00 11065.00 11567.00 12400.00
9/00 10688.00 11455.00 11310.00
</TABLE>
This chart assumes a $10,000 investment in Class A shares of Select 25 Series on
01/29/1999 and reflects a deduction of the 5.75% sales load. On 9/30/2000, the
value of your investment in Class A shares of the fund (with dividends
reinvested) would have grown to $10,688. In comparison, the same $10,000
investment would have grown to $11,455 in the S&P 500 index and $11,310 based on
the S&P Barra Growth index's performance.
---------------- PERFORMANCE ----------------
TOP 5 HOLDINGS**
<TABLE>
<CAPTION>
% OF
NET ASSETS
----------
<S> <C>
Walgreen Company 5.6%
General Electric Company 5.4%
Comverse Technology, Inc. 5.1%
Automatic Data Processing, Inc. 4.9%
American International Group, Inc. 4.8%
</TABLE>
** At September 30, 2000
AVERAGE ANNUAL RETURNS
AS OF SEPTEMBER 30, 2000
<TABLE>
<CAPTION>
1 YEAR SINCE INCEPTION
------ ---------------
<S> <C> <C> <C>
A Shares 7.69% 7.82% (1-29-99)
A Shares with sales charge 1.52% 4.06% (1-29-99)
B Shares 6.65% 7.13% (1-29-99)
B Shares with CDSC 1.65% 4.83% (1-29-99)
C Shares 6.73% 7.36% (1-29-99)
C Shares with CDSC 5.73% 7.36% (1-29-99)
</TABLE>
The performance data above represents past performance which is not predictive
of future results. The investment return and principal value of an investment in
the fund will fluctuate so that an investor's shares, when redeemed, may be
worth more or less than their original cost. The figures above do not reflect
deduction of the maximum front-end sales charge of 5.75% for Class A shares or
contingent deferred sales charge of 5% for Class B shares and 1% for Class C
shares, as applicable, except where noted. Such figures would be lower if the
maximum sales charge were deducted.
--------------------------------------------------------------------------------
43
<PAGE> 45
SCHEDULE OF INVESTMENTS (CONTINUED)
SEPTEMBER 30, 2000
c-------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SECURITY EQUITY FUND - SELECT 25 SERIES(R)
NUMBER MARKET
COMMON STOCKS OF SHARES VALUE
-------------------------------------------------------------
<S> <C> <C>
ADVERTISING - 3.5%
Omnicom Group, Inc. ........... 22,700 $ 1,655,681
BROADCASTING & CABLE TV - 6.3%
Clear Channel Communications,
Inc.*........................ 26,500 1,497,250
Univision Communications,
Inc.*........................ 39,700 1,483,787
--------------
2,981,037
COMPUTER HARDWARE - 6.7%
Dell Computer Corporation*..... 46,800 1,442,025
Sun Microsystems, Inc.*........ 15,100 1,762,925
--------------
3,204,950
COMPUTER STORAGE & PERIPHERALS - 4.6%
EMC Corporation*............... 22,000 2,180,750
DATA PROCESSING SERVICES - 4.9%
Automatic Data Processing,
Inc. ........................ 34,800 2,327,250
DIVERSIFIED FINANCIAL SERVICES - 4.6%
Citigroup, Inc. ............... 40,000 2,162,500
DRUG RETAIL - 5.6%
Walgreen Company............... 70,000 2,655,625
ELECTRONIC EQUIPMENT & INSTRUMENTS - 3.0%
Sanmina Corporation*........... 15,000 1,404,375
GENERAL MERCHANDISE STORES - 3.6%
Wal-Mart Stores, Inc. ......... 35,500 1,708,438
HEALTH CARE EQUIPMENT - 4.1%
Medtronic, Inc. ............... 37,700 1,953,331
HOME IMPROVEMENT RETAIL - 3.9%
Home Depot, Inc. .............. 35,000 1,857,188
HOUSEHOLD PRODUCTS - 3.5%
Colgate-Palmolive Company...... 35,100 1,656,720
INDUSTRIAL CONGLOMERATES - 5.4%
General Electric Company....... 44,300 2,555,556
IT CONSULTING & SERVICES - 4.3%
Computer Sciences
Corporation*................. 27,700 2,056,725
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT OR
NUMBER MARKET
COMMON STOCKS (CONTINUED) OF SHARES VALUE
-------------------------------------------------------------
MOTORCYCLE MANUFACTURERS - 4.0%
Harley-Davidson, Inc. ......... 40,200 $ 1,924,575
MULTI-LINE INSURANCE - 4.8%
American International Group,
Inc. ........................ 24,000 2,296,500
NETWORKING EQUIPMENT - 3.4%
Cisco Systems, Inc.*........... 28,900 1,596,725
PHARMACEUTICALS - 4.2%
Pfizer, Inc. .................. 45,000 2,022,188
SEMICONDUCTORS - 2.6%
Intel Corporation.............. 30,000 1,248,750
SYSTEMS SOFTWARE - 3.0%
Microsoft Corporation*......... 23,500 1,415,875
TELECOMMUNICATIONS EQUIPMENT - 7.3%
Comverse Technology, Inc.*..... 22,200 2,397,600
Nortel Networks Corporation.... 17,700 1,054,256
--------------
3,451,856
WIRELESS TELECOMMUNICATION SERVICES - 3.1%
Nextel Communications, Inc.*... 32,000 1,496,000
--------------
Total common stocks - 96.4%.... 45,812,595
<CAPTION>
COMMERCIAL PAPER
----------------
<S> <C> <C>
<S> <C> <C>
RETAIL - DEPARTMENT STORES - 2.1%
May Department Stores,
6.47% - 10-17-00............. $ 1,000,000 997,124
--------------
Total investments - 98.5%................ 46,809,719
Cash and other assets, less
liabilities - 1.5%...................... 688,912
--------------
Total net assets - 100.0%................. $ 47,498,631
==============
</TABLE>
The identified cost of investments for federal income tax purposes at September
30, 2000 was $43,101,999.
* Non-Income producing security.
See accompanying notes.
--------------------------------------------------------------------------------
45
<PAGE> 46
c-------------------------------------------------------------------------------
MANAGER'S COMMENTARY
SECURITY EQUITY FUND--
EQUITY SERIES
NOVEMBER 15, 2000
FLYING S LOGO
[MILBERGER PHOTO]
Terry Milberger
Senior Portfolio
Manager
TO OUR SHAREHOLDERS:
Security Equity Fund generated a return of +6.64% in the twelve months ended
September 30, 2000.(1) The benchmark S&P 500 Stock Index returned +13.28% over
the same period.
SHARP SWINGS IN TECHNOLOGY-RELATED STOCKS
The greatest portion of the Fund's underperformance relative to its benchmark
occurred in the first quarter of the fiscal year (the fourth quarter of calendar
1999). During this period technology stock prices moved up sharply;
unfortunately, we were underweight in the sector at that time. The valuations on
a majority of these issues had surged to historical highs we didn't believe were
sustainable, so we chose not to include many of them in the portfolio. However,
a number of investors thought otherwise, and the technology sector led all other
groups in performance in the benchmark S&P 500 Stock Index.
RISK/REWARD RATIOS ARE IMPORTANT TO LONG TERM INVESTORS
Because of the conservative nature of the portfolio and its orientation toward
long-term results, we look carefully at the potential rewards of each investment
given the level of risk we feel we are taking. Now that the technology stocks
have fallen in price, we consider their risk/reward characteristics to be more
attractive and plan to increase our holdings in the sector. We believe that
carefully-selected technology stocks have outstanding long-term growth potential
and will be sound investments over time. While a slowing economy may still
inflict some pain on these stocks, we think most of the downside in their prices
has already occurred.
GLOBAL ECONOMIES HAVE BECOME MORE IMPORTANT
Signs of a slowdown in global economies are playing a much more significant role
in prices of U.S. stocks than was the case five or ten years ago. In recent
weeks companies that depend on sales of their products in Europe and other
countries have announced that they expect earnings to fall short of forecasts
because of weaker global sales and the negative effect of currency translations.
For example, on September 14, 2000 the stock of one of our holdings,
Colgate-Palmolive Company, fell 15% after the company told analysts that
third-quarter sales would be less than expected because of the falling euro. It
was Colgate's biggest one-day price decline since the stock market crash of
October 1987, and in our view a much harsher result than was warranted by the
company's fundamentals.
A SLOWING U.S. ECONOMY HURT EARNINGS ALSO
Companies like Wal-Mart Stores, Inc. and The Home Depot, Inc., also holdings in
our portfolio, have felt the impact of slowing retail sales in the U.S. Although
Wal-Mart is doing well relative to other discount department stores, their sales
are at the lower end of analysts' expectations. The dollar amount, although not
the volume, of sales at Home Depot stores has declined since a slowdown in the
housing sector reduced demand for lumber, causing its price to fall. Retailers
in general expect sales during the upcoming Christmas season to be lower than
average also.
A notable exception to the disappointing retail story is Kohl's Corporation,
whose sales have consistently met expectations. Kohl's has displayed great skill
in executing in line with their forecasts. They excel at pricing their products
competitively, and show an outstanding ability to select and display merchandise
in a way that meets customers' needs. Kohl's stock has risen over 74% in the
past twelve months.
HEALTH CARE STOCKS PERFORMED WELL
The health care sector has been a bright spot in the overall markets.
Potentially damaging legislation that had been under consideration in Congress
failed to pass, improving the outlook for the sector. Other factors helping
health care stocks are the aging of the "baby boomers," which will increase
demand for health care products and services, and investors' natural gravitation
toward the less economically-sensitive health care stocks in a period of
perceived economic slowdown. Some of our holdings in the sector include
Schering-Plough Corporation, American Home Products Corporation, Pfizer Inc.,
and Baxter International Inc.
--------------------------------------------------------------------------------
46
<PAGE> 47
MANAGER'S COMMENTARY (CONTINUED)
SECURITY EQUITY FUND--
EQUITY SERIES
NOVEMBER 15, 2000
-------------------------------------------------------------------------------
SECURITY EQUITY SERIES VS.
S&P 500 INDEX
[LINE GRAPH]
<TABLE>
<CAPTION>
EQUITY SERIES S&P 500 INDEX
------------- -------------
<S> <C> <C>
62 10000.00000 10000.00000
70 30574.00000 21379.00000
80 101872.00000 47835.00000
90 286515.00000 176194.00000
00 141794.00000 955412.00000
</TABLE>
$10,000 SINCE INCEPTION
This chart assumes a $10,000 investment in Class A shares of Equity Series on
09/30/1962 and reflects a deduction of the 5.75% sales load. On 9/30/2000, the
value of your investment in Class A shares of the fund (with dividends
reinvested) would have grown to $1,417,944. In comparison, the same $10,000
investment would have grown to $955,412 based on the S&P 500 index's
performance.
A CLASSIC BUYING OPPORTUNITY
We believe that investors' expectations have become far too negative about the
potential for earnings growth in the months ahead. We see the recent decline in
the markets creating a classic buying opportunity, and plan to increase our
weighting in the technology sector as well as in economically sensitive areas
such as chemicals, papers, and some retail stocks. Valuations on some of these
issues are now at levels not seen since 1990 and 1991; because we don't expect a
severe economic decline like we experienced then, we believe these companies
will prove to be excellent holdings over the long term. They should be good fits
for Security Equity Fund, with its philosophy of conservative long-term
investing in companies displaying sound fundamental financial and managerial
trends.
Sincerely,
Terry Milberger,
Senior Portfolio Manager
(1) Performance figures are based on Class A shares and do not reflect deduction
of the sales charge.
---------------- PERFORMANCE ----------------
TOP 5 HOLDINGS**
<TABLE>
<CAPTION>
% OF
NET ASSETS
----------
<S> <C>
General Electric Company 5.1%
Standard & Poor's Depositary Receipts 4.2%
NASDAQ--100 Shares 3.5%
Cisco Systems, Inc. 3.3%
Microsoft Corporation 2.7%
</TABLE>
** September 30, 2000
AVERAGE ANNUAL RETURNS
AS OF SEPTEMBER 30, 2000
<TABLE>
<CAPTION>
1 YEAR 5 YEARS 10 YEARS
------ ------- --------
<S> <C> <C> <C>
A Shares 6.64% 17.91% 18.35%
A Shares with sales 0.48% 16.52% 17.66%
charge
B Shares 5.69% 16.73% 15.62%
(10-19-93)
(since inception)
B Shares with CDSC 0.69% 16.51% 15.62%
(10-19-93)
(since inception)
C Shares 5.55% 1.75% N/A
(1-29-99)
(since inception)
C Shares with CDSC 4.55% 1.75% N/A
(1-29-99)
(since inception)
</TABLE>
The performance data above represents past performance which is not predictive
of future results. The investment return and principal value of an investment in
the fund will fluctuate so that an investor's shares, when redeemed, may be
worth more or less than their original cost. The figures above do not reflect
deduction of the maximum front-end sales charge of 5.75% for Class A shares or
the contingent deferred sales charge of 5% for Class B shares and 1% for Class C
shares, as applicable, except where noted. Such figures would be lower if the
maximum sales charge were deducted.
--------------------------------------------------------------------------------
46
<PAGE> 48
SCHEDULE OF INVESTMENTS (CONTINUED)
SEPTEMBER 30, 2000
c-------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SECURITY EQUITY FUND - EQUITY SERIES
NUMBER MARKET
COMMON STOCKS OF SHARES VALUE
-------------------------------------------------------------
<S> <C> <C>
ADVERTISING - 0.6%
Omnicom Group, Inc. ........... 90,000 $ 6,564,375
AEROSPACE & DEFENSE - 0.9%
Boeing Company................. 50,000 3,150,000
United Technologies
Corporation.................. 90,000 6,232,500
--------------
9,382,500
ALTERNATIVE CARRIERS - 0.6%
Qwest Communications
International, Inc.*......... 120,000 5,767,500
ALUMINUM - 0.3%
Alcoa, Inc. ................... 110,000 2,784,375
APPLICATION SOFTWARE - 0.8%
Amdocs, Ltd.*.................. 60,000 3,742,500
Siebel Systems, Inc.*.......... 40,000 4,452,500
--------------
8,195,000
BANKS - 5.6%
Bank of America Corporation.... 115,000 6,023,125
Bank of New York Company,
Inc. ........................ 230,000 12,894,375
Chase Manhattan Corporation.... 232,500 10,738,594
FleetBoston Financial
Corporation.................. 120,000 4,680,000
Mellon Financial Corporation... 100,000 4,637,500
Northern Trust Corporation..... 110,000 9,776,250
Wells Fargo Company............ 180,000 8,268,750
--------------
57,018,594
BIOTECHNOLOGY - 0.7%
Amgen, Inc.*................... 100,000 6,982,813
BREWERS - 0.5%
Anheuser-Busch Companies,
Inc. ........................ 120,000 5,077,500
BROADCASTING & CABLE TV - 1.1%
Clear Channel Communications,
Inc. ........................ 145,700 8,232,050
General Motors Corporation (Cl.
H)*.......................... 1 27
Univision Communications,
Inc.*........................ 80,000 2,990,000
--------------
11,222,077
COMPUTER HARDWARE - 5.4%
Compaq Computer Corporation.... 120,000 $ 3,309,600
Dell Computer Corporation*..... 200,000 6,162,500
Hewlett-Packard Company........ 75,000 7,275,000
International Business Machines
Corporation.................. 160,000 18,000,000
Sun Microsystems, Inc.*........ 175,000 20,431,250
--------------
55,178,350
</TABLE>
<TABLE>
<CAPTION>
NUMBER MARKET
COMMON STOCKS (CONTINUED) OF SHARES VALUE
-------------------------------------------------------------
<S> <C> <C>
COMPUTER STORAGE & PERIPHERALS - 2.2%
EMC Corporation*............... 170,000 $ 16,851,250
Network Appliance, Inc.*....... 40,000 5,095,000
--------------
21,946,250
DATA PROCESSING SERVICES - 0.9%
Automatic Data Processing,
Inc. ........................ 100,000 6,687,500
First Data Corporation......... 50,000 1,953,125
--------------
8,640,625
DEPARTMENT STORES - 0.3%
Kohl's Corporation*............ 60,000 3,461,250
DIVERSIFIED COMMERCIAL SERVICES - 0.4%
Ecolab, Inc. .................. 125,000 4,507,813
DIVERSIFIED FINANCIAL SERVICES - 5.3%
American Express Company....... 120,000 7,290,000
Citigroup, Inc. ............... 360,000 19,462,500
Fannie Mae..................... 150,000 10,725,000
Freddie Mac.................... 140,000 7,568,750
Merrill Lynch & Company,
Inc. ........................ 30,000 1,980,000
Morgan Stanley Dean Witter &
Company...................... 80,000 7,315,000
--------------
54,341,250
DRUG RETAIL - 1.5%
Walgreen Company............... 400,000 15,175,000
ELECTRICAL COMPONENTS & EQUIPMENT - 0.5%
Molex, Inc. ................... 100,000 5,443,750
ELECTRONIC EQUIPMENT & INSTRUMENTS - 0.6%
Sanmina Corporation*........... 60,000 5,617,500
FOOD RETAIL - 0.9%
Safeway, Inc.*................. 200,000 9,337,500
GENERAL MERCHANDISE STORES - 2.2%
Target Corporation............. 320,000 8,200,000
Wal-Mart Stores, Inc. ......... 300,000 14,437,500
--------------
22,637,500
HEALTH CARE DISTRIBUTORS & SERVICES - 1.3%
Cardinal Health, Inc. ......... 145,000 12,787,188
</TABLE>
See accompanying notes.
--------------------------------------------------------------------------------
48
<PAGE> 49
SCHEDULE OF INVESTMENTS (CONTINUED)
SEPTEMBER 30, 2000
c-------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SECURITY EQUITY FUND - EQUITY SERIES
(CONTINUED)
NUMBER MARKET
COMMON STOCKS (CONTINUED) OF SHARES VALUE
-------------------------------------------------------------
<S> <C> <C>
HEALTH CARE EQUIPMENT - 2.1%
Baxter International, Inc. .... 75,000 $ 5,985,937
Guidant Corporation*........... 70,000 4,948,125
Medtronic, Inc. ............... 200,000 10,362,500
--------------
21,296,562
HEALTH CARE SUPPLIES - 0.3%
Allergan, Inc. ................ 40,000 3,377,500
HOME IMPROVEMENT RETAIL - 1.1%
Home Depot, Inc. .............. 180,000 9,551,250
Lowe's Companies, Inc. ........ 40,000 1,795,000
--------------
11,346,250
HOUSEHOLD PRODUCTS - 1.5%
Colgate-Palmolive Company...... 160,000 7,552,000
Kimberly-Clark Corporation..... 40,000 2,232,500
Procter & Gamble Company....... 75,000 5,025,000
--------------
14,809,500
INDUSTRIAL CONGLOMERATES - 6.8%
General Electric Company....... 900,000 51,918,750
Minnesota Mining &
Manufacturing Company........ 50,000 4,556,250
Textron, Inc. ................. 48,600 2,241,675
Tyco International, Ltd. ...... 200,000 10,375,000
--------------
69,091,675
INDUSTRIAL GASES - 0.4%
Praxair, Inc. ................. 100,000 3,737,500
INSURANCE BROKERS - 0.4%
Marsh & McLennan Companies,
Inc. ........................ 30,000 3,982,500
INTEGRATED OIL & GAS - 5.1%
Chevron Corporation............ 90,000 7,672,500
Coastal Corporation............ 130,000 9,636,250
Exxon Mobil Corporation........ 250,000 22,281,250
Royal Dutch Petroleum
Company...................... 200,000 11,987,500
--------------
51,577,500
INTEGRATED TELECOMMUNICATIONS SERVICES -
2.6%
AT&T Corporation............... 100,000 2,937,500
BellSouth Corporation.......... 100,000 4,025,000
SBC Communications, Inc. ...... 220,000 11,000,000
Verizon Communications......... 100,000 4,843,750
WorldCom, Inc.*................ 120,000 3,645,000
--------------
26,451,250
INTERNET SOFTWARE & SERVICES - 0.9%
America Online, Inc.*.......... 170,000 9,137,500
</TABLE>
<TABLE>
<CAPTION>
NUMBER MARKET
COMMON STOCKS (CONTINUED) OF SHARES VALUE
-------------------------------------------------------------
-------------------------------------------------------------
<S> <C> <C>
IT CONSULTING & SERVICES - 1.1%
Acxiom Corporation*............ 60,000 $ 1,905,000
Computer Sciences
Corporation*................. 120,000 8,910,000
--------------
10,815,000
LIFE & HEALTH INSURANCE - 0.7%
American General Corporation... 85,000 6,630,000
MOTORCYCLE MANUFACTURERS - 0.4%
Harley-Davidson, Inc. ......... 90,000 4,308,750
MOVIES & ENTERTAINMENT - 2.2%
News Corporation, Ltd. ADR..... 80,000 4,485,000
Time Warner, Inc. ............. 140,000 10,955,000
Viacom, Inc. (Cl. B)*.......... 120,000 7,020,000
--------------
22,460,000
MULTI-LINE INSURANCE - 3.0%
American International Group,
Inc. ........................ 240,000 22,965,000
Hartford Financial Services
Group, Inc. ................. 100,000 7,293,750
--------------
30,258,750
MULTI-UTILITIES - 1.8%
Enron Corporation.............. 100,000 8,762,500
Williams Companies, Inc. ...... 230,000 9,717,500
--------------
18,480,000
NETWORKING EQUIPMENT - 3.3%
Cisco Systems, Inc.*........... 600,000 33,150,000
PHARMACEUTICALS - 7.5%
ALZA Corporation*.............. 60,000 5,190,000
American Home Products
Corporation.................. 150,000 8,484,375
Bristol-Myers Squibb Company... 125,000 7,140,625
Forest Laboratories, Inc.*..... 40,000 4,587,500
Johnson & Johnson.............. 100,000 9,393,750
Merck & Company, Inc. ......... 130,000 9,676,875
Pfizer, Inc. .................. 300,000 13,481,250
Pharmacia Corporation.......... 150,000 9,028,125
Schering-Plough Corporation.... 200,000 9,300,000
--------------
76,282,500
PUBLISHING & PRINTING - 1.0%
Gannett Company, Inc........... 100,000 5,300,000
McGraw-Hill Companies, Inc. ... 85,000 5,402,812
--------------
10,702,812
</TABLE>
See accompanying notes.
--------------------------------------------------------------------------------
49
<PAGE> 50
SCHEDULE OF INVESTMENTS (CONTINUED)
SEPTEMBER 30, 2000
c-------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SECURITY EQUITY FUND - EQUITY SERIES
(CONTINUED)
PRINCIPAL
AMOUNT OR
NUMBER MARKET
COMMON STOCKS (CONTINUED) OF SHARES VALUE
-------------------------------------------------------------
<S> <C> <C>
SEMICONDUCTORS - 3.3%
Intel Corporation.............. 600,000 $ 24,975,000
National Semiconductor
Corporation*................. 60,000 2,415,000
Texas Instruments, Inc. ....... 120,000 5,662,500
--------------
33,052,500
SOFT DRINKS - 1.3%
Coca-Cola Company.............. 125,000 6,890,625
PepsiCo, Inc. ................. 130,000 5,980,000
--------------
12,870,625
SPECIALTY CHEMICALS - 0.2%
Rohm & Haas Company............ 60,000 1,743,750
SYSTEMS SOFTWARE - 4.8%
Microsoft Corporation*......... 460,000 27,715,000
Oracle Corporation*............ 200,000 15,750,000
Veritas Software
Corporation*................. 40,000 5,680,000
--------------
49,145,000
TELECOMMUNICATIONS EQUIPMENT - 2.8%
ADC Telecommunications,
Inc.*........................ 130,000 3,495,781
Comverse Technology, Inc.*..... 40,000 4,320,000
Corning, Inc. ................. 20,000 5,940,000
Motorola, Inc. ................ 100,000 2,825,000
Nortel Networks Corporation.... 200,000 11,912,500
--------------
28,493,281
UNIT INVESTMENT TRUST - 9.4%
Nasdaq - 100 Shares............ 400,000 35,475,000
S&P Mid - Cap 400 Depositary
Receipts..................... 170,000 16,702,500
Standard & Poor's Depositary
Receipts..................... 300,000 43,087,500
--------------
95,265,000
WIRELESS TELECOMMUNICATION SERVICES - 0.7%
Nextel Communications, Inc.*... 80,000 3,740,000
Sprint Corporation (PCS
Group)*...................... 90,000 3,155,625
--------------
6,895,625
--------------
Total common stocks - 97.3%............... 987,430,040
<CAPTION>
COMMERCIAL PAPER
----------------
CHEMICALS - BASIC - 0.1%
E.I. Dupont de Nemours &
Company, 6.51%, 10-06-00..... $ 1,400,000 1,398,735
</TABLE>
<TABLE>
<S> <C> <C>
<CAPTION>
PRINCIPAL MARKET
COMMERCIAL PAPER (CONTINUED) AMOUNT VALUE
-------------------------------------------------------------
<S> <C> <C>
COMBINATION GAS & ELECTRIC - .5%
Baltimore Gas & Electric
Company,
6.48%, 10-03-00.............. $ 1,000,000 $ 999,640
6.48%, 10-10-00.............. 4,000,000 3,993,520
--------------
4,993,160
ELECTRIC UTILITIES - .6%
Wisconsin Public Service
Corporation, 6.65%,
10-02-00..................... 6,200,000 6,198,855
NATURAL GAS - 0.5%
Nicor Gas, 6.50%, 10-05-00..... 4,500,000 4,496,750
TELECOMMUNICATIONS - 0.6%
Bellsouth Telecommunications,
Inc., 6.47%, 10-19-00........ 2,700,000 2,691,266
Verizon Network Funding, 6.50%,
10-23-00..................... 3,500,000 3,486,097
--------------
6,177,363
--------------
Total commercial paper - 2.3%............. 23,264,863
--------------
Total investments - 99.6%................. 1,010,694,903
Cash and other assets, less liabilities -
.4%..................................... 4,490,111
--------------
Total net assets - 100.0%................. $1,015,185,014
==============
</TABLE>
The identified cost of investments owned at September 30, 2000 was the same for
book and tax purposes.
* Non-Income producing security.
ADR (American Depositary Receipt)
See accompanying notes.
--------------------------------------------------------------------------------
50
<PAGE> 51
c-------------------------------------------------------------------------------
MANAGER'S COMMENTARY
SECURITY EQUITY FUND--
TOTAL RETURN SERIES
NOVEMBER 15, 2000
FLYING S LOGO
[MILBERGER PHOTO]
Terry Milberger
Senior Portfolio
Manager
TO OUR SHAREHOLDERS:
In the fiscal year ended September 30, 2000, the Total Return Fund returned
+6.49%, while the benchmark S&P 500 Stock Index gained 13.28%.(1) The majority
of the underperformance occurred in the first six months of the fiscal year,
when the Fund was underweighted relative to the benchmark index in technology
stocks.
TECHNOLOGY WAS THE WINNER IN THE FIRST HALF
During the first half of the fiscal year technology stocks were the sector with
strongest performance. The Total Return Fund was underweight in technology; we
believed the high valuations were unsustainable over the long term.
Consequently, the portfolio return lagged the benchmark and many peer funds. We
gradually increased our exposure to technology stocks, approaching a weighting
close to the benchmark's technology weighting just in time to see the sector
begin a slide that continued through the second half of the year. The most
notable drag on portfolio performance was Microsoft Corporation, whose stock
fell from a high just over $119 per share to a low of about $60 between late
December and the fiscal year end.
FINANCIAL STOCKS SLID AS INTEREST RATES ROSE
Stocks in the financial sector also dampened portfolio return as the Federal
Reserve Bank's policy-making Open Market Committee pushed up interest rates
throughout most of the fiscal year. The stock performance of home mortgage
lender Fannie Mae was not only hurt by rising interest rates, but also suffered
because of proposed legislation in Congress which would reduce or eliminate the
line of credit with the Treasury Department, and thus the implied backing of the
Federal government for the company's securities.
Bank of America Corporation's difficulty in assimilating a lengthy chain of
mergers weakened investor enthusiasm for its stock, which represents the largest
weighting in the money center banking sector of the benchmark index. The Chase
Manhattan Corporation suffered under a similar merger cloud when investors
believed Chase had overpaid for its acquisition of global financial services
firm J.P. Morgan & Company.
CONSUMER STAPLES COMPANIES ADD VALUE
Many of our holdings in the consumer staples sector performed well over the
year. Bestfoods, an international food company with products including
Hellmann's mayonnaise, Skippy peanut butter, Mazola corn oil and many others,
gained about 50% when the company was acquired by diversified food giant
Unilever PLC.
Also in the consumer staples area, retail drug store operator Walgreen Co.,
which acted sluggish in the first six months, recovered to gain nearly 48% in
the second half of the fiscal year. The company continued to steadily generate
solid revenues and earnings throughout the year, which was extremely difficult
in an environment of slowing consumer spending.
STRONG PERFORMERS IN A VARIETY OF SECTORS
We also saw good performance from selected issues in a number of sectors. Kohl's
Corporation rose 67% despite the threat of a consumer slowdown, as its skills in
product selection and merchandising brought customers into the stores in a
steady stream. Motorcycle manufacturer Harley-Davidson, Inc. continued its
consistent performance in a niche market for its products. In the energy sector,
oil field services company Schlumberger Limited gained over 40% as drilling
activity increased in response to rising oil prices.
We believe our practice of seeking companies which have exhibited steady growth
in earnings over long periods will lead us to favorable performance in the long
run. The stocks of these companies may lag from time to time, but as long as the
fundamentals remain sound we expect to keep them in the portfolio, keeping our
long term investment objectives in mind.
Sincerely,
Terry Milberger, Senior Portfolio Manager
Frank Whitsell, Portfolio Manager
(1) Performance figures are based on Class A shares and do not reflect deduction
of the sales charge.
--------------------------------------------------------------------------------
51
<PAGE> 52
MANAGER'S COMMENTARY (CONTINUED)
SECURITY EQUITY FUND--
TOTAL RETURN SERIES
NOVEMBER 15, 2000
-------------------------------------------------------------------------------
TOTAL RETURN SERIES VS.
S&P 500 INDEX
[LINE GRAPH]
<TABLE>
<CAPTION>
TOTAL RETURN SERIES S&P 500 INDEX
------------------- -------------
<S> <C> <C>
95 10000.00 10000.00
9500.00 10235.00
9934.00 11049.00
10158.00 11707.00
10563.00 12343.00
10791.00 12901.00
10929.00 13295.00
96 11497.00 14408.00
11569.00 14785.00
12376.00 17372.00
13006.00 18679.00
97 12182.00 19216.00
13464.00 21897.00
13621.00 22620.00
12059.00 20371.00
98 13650.00 24708.00
13808.00 25938.00
14853.00 27766.00
14209.00 26031.00
99 15823.00 29904.00
15733.00 30590.00
15477.00 29777.00
00 15131.00 29489.00
</TABLE>
This chart assumes a $10,000 investment in Class A shares of Total Return Series
on 06/01/1995 and reflects a deduction of the 5.75% sales load. On 9/30/2000,
the value of your investment in Class A shares of the fund (with dividends
reinvested) would have grown to $15,131. In comparison, the same $10,000
investment would have grown to $29,489 based on the S&P 500 index's performance.
---------------- PERFORMANCE ----------------
TOP 5 EQUITY HOLDINGS**
<TABLE>
<CAPTION>
% OF
NET ASSETS
----------
<S> <C>
General Electric Company 5.7%
Microsoft Corporation 3.7%
Cisco Systems, Inc. 3.6%
Cardinal Health, Inc. 3.3%
Intel Corporation 2.7%
</TABLE>
** September 30, 2000
AVERAGE ANNUAL RETURNS
AS OF SEPTEMBER 30, 2000
<TABLE>
<CAPTION>
5
1 YEAR YEARS SINCE INCEPTION
------ ----- ---------------
<S> <C> <C> <C> <C>
A Shares 6.49% 8.80% 9.30% (6-1-95)
A Shares with sales 0.39% 7.53% 8.10% (6-1-95)
charge
B Shares 5.39% 7.78% 8.26% (6-1-95)
B Shares with CDSC 0.39% 7.48% 8.26% (6-1-95)
C Shares 5.65% N/A 3.88% (1-29-99)
C Shares with CDSC 4.65% N/A 3.88% (1-29-99)
</TABLE>
The performance data above represents past performance which is not predictive
of future results. The investment return and principal value of an investment in
the fund will fluctuate so that an investor's shares, when redeemed, may be
worth more or less than their original cost. The figures above do not reflect
deduction of the maximum front-end sales charge of 5.75% for Class A shares or
the contingent deferred sales charge of 5% for Class B shares and 1% for Class C
shares, as applicable, except where noted. Such figures would be lower if the
maximum sales charge were deducted.
--------------------------------------------------------------------------------
51
<PAGE> 53
SCHEDULE OF INVESTMENTS (CONTINUED)
SEPTEMBER 30, 2000
c-------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SECURITY EQUITY FUND - TOTAL RETURN SERIES
NUMBER MARKET
COMMON STOCKS OF SHARES VALUE
-------------------------------------------------------------
<S> <C> <C>
ADVERTISING - 1.3%
Omnicom Group, Inc. ........... 1,450 $ 105,759
AEROSPACE & DEFENSE - 1.2%
General Dynamics Corporation... 1,450 91,078
ALTERNATIVE CARRIERS - 0.9%
Qwest Communications
International, Inc.*......... 1,550 74,497
APPLICATION SOFTWARE - 1.9%
Amdocs, Ltd.*.................. 1,300 81,087
Portal Software, Inc.*......... 1,800 72,000
--------------
153,087
BANKS - 4.2%
Bank of America Corporation.... 1,400 73,325
Bank of New York Company,
Inc. ........................ 2,150 120,534
Chase Manhattan Corporation.... 2,925 135,098
--------------
328,957
BREWERS - 0.4%
Anheuser-Busch Companies,
Inc. ........................ 800 33,850
BROADCASTING & CABLE TV - 2.2%
Clear Channel Communications,
Inc.*........................ 2,225 125,713
Univision Communications,
Inc.*........................ 1,200 44,850
--------------
170,563
COMPUTER HARDWARE - 3.5%
Dell Computer Corporation*..... 4,600 141,738
International Business Machines
Corporation.................. 1,200 135,000
--------------
276,738
COMPUTERS STORAGE & PERIPHERALS - 3.7%
EMC Corporation*............... 1,600 158,600
Lexmark International, Inc.*... 700 26,250
Network Appliance, Inc.*....... 850 108,269
--------------
293,119
DATA PROCESSING SERVICES - 1.1%
Automatic Data Processing,
Inc. ........................ 1,350 90,281
DEPARTMENT STORES - 1.6%
Kohl's Corporation*............ 2,200 126,913
DIVERSIFIED COMMERCIAL SERVICES - 0.5%
Ecolab, Inc. .................. 1,050 37,866
</TABLE>
<TABLE>
<CAPTION>
NUMBER MARKET
COMMON STOCKS (CONTINUED) OF SHARES VALUE
-------------------------------------------------------------
<S> <C> <C>
DIVERSIFIED FINANCIAL SERVICES - 6.2%
American Express Company....... 1,050 $ 63,788
Citigroup, Inc................. 3,066 165,756
Fannie Mae..................... 1,800 128,700
Merrill Lynch & Company,
Inc.......................... 900 59,400
Morgan Stanley Dean Witter &
Company...................... 800 73,150
--------------
490,794
DRUG RETAIL - 1.3%
Walgreen Company............... 2,700 102,431
ELECTRICAL COMPONENTS & EQUIPMENT - 1.1%
Molex, Inc..................... 1,550 84,378
ELECTRONIC EQUIPMENT & INSTRUMENTS - 1.8%
Sanmina Corporation*........... 1,500 140,437
FOOD RETAIL - 0.8%
Safeway, Inc.*................. 1,300 60,694
GAS UTILITIES - 0.9%
El Paso Energy Corporation..... 1,100 67,787
GENERAL MERCHANDISE STORES - 2.7%
Target Corporation............. 2,900 74,312
Wal-Mart Stores, Inc........... 2,850 137,156
--------------
211,468
HEALTH CARE DISTRIBUTORS & SERVICES - 3.0%
Cardinal Health, Inc. ......... 2,650 233,697
HEALTH CARE EQUIPMENT - 3.8%
Baxter International, Inc...... 1,500 119,719
Guidant Corporation............ 1,100 77,756
Medtronic, Inc................. 2,000 103,625
--------------
301,100
HEALTH CARE FACILITIES - 0.8%
Tenet Healthcare Corporation... 1,800 65,475
HOME IMPROVEMENT RETAIL - 1.1%
Home Depot, Inc................ 1,600 84,900
HOUSEHOLD PRODUCTS - 0.8%
Colgate-Palmolive Company...... 1,350 63,720
HOUSEWARES & SPECIALTIES - 0.5%
Newell Rubbermaid, Inc. ....... 1,600 36,500
INDUSTRIAL CONGLOMERATES - 7.0%
General Electric Company....... 6,950 400,928
Tyco International, Ltd. ...... 2,900 150,437
--------------
551,365
INDUSTRIAL MACHINERY - 1.0%
Illinois Tool Works, Inc. ..... 1,450 81,019
</TABLE>
See accompanying notes.
--------------------------------------------------------------------------------
53
<PAGE> 54
SCHEDULE OF INVESTMENTS (CONTINUED)
SEPTEMBER 30, 2000
c-------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SECURITY EQUITY FUND - TOTAL RETURN SERIES
(CONTINUED)
NUMBER MARKET
COMMON STOCKS (CONTINUED) OF SHARES VALUE
-------------------------------------------------------------
<S> <C> <C>
INTEGRATED OIL & GAS - 3.7%
Chevron Corporation............ 900 $ 76,725
Exxon Mobil Corporation........ 1,550 138,144
Royal Dutch Petroleum
Company...................... 1,350 80,916
--------------
295,785
INTEGRATED TELECOMMUNICATION SERVICES - 4.9%
BellSouth Corporation.......... 1,600 64,400
Nextlink Communications,
Inc.*........................ 2,900 102,044
SBC Communications, Inc. ...... 2,250 112,500
Sprint Corporation (FON
Group)....................... 1,600 46,900
Verizon Communications......... 1,200 58,125
--------------
383,969
INTERNET SOFTWARE & SERVICES - 1.8%
America Online, Inc.*.......... 1,350 72,562
Yahoo, Inc.*................... 800 73,050
--------------
145,612
IT CONSULTING & SERVICES - 0.9%
Computer Sciences
Corporation*................. 1,000 74,250
LIFE & HEALTH INSURANCE - 1.3%
American General Corporation... 1,350 105,300
MOTORCYCLE MANUFACTURERS - 1.2%
Harley-Davidson, Inc. ......... 2,050 98,144
MOVIES & ENTERTAINMENT - 0.9%
Viacom, Inc. (Cl. B)*.......... 1,200 70,200
MULTI-LINE INSURANCE - 2.0%
American International Group,
Inc. ........................ 1,612 154,248
MULTI-UTILITIES - 1.1%
Williams Companies, Inc. ...... 2,100 88,725
NETWORKING EQUIPMENT - 3.2%
Cisco Systems, Inc.*........... 4,600 254,150
OFFICE SERVICES & SUPPLIES - 0.4%
Avery Dennison Corporation..... 750 34,781
OIL & GAS EQUIPMENT & SERVICES - 0.9%
Schlumberger, Ltd. ............ 850 69,966
PACKAGED FOODS - 0.6%
Ralston Purina Group........... 1,950 46,191
</TABLE>
<TABLE>
<CAPTION>
NUMBER MARKET
COMMON STOCKS (CONTINUED) OF SHARES VALUE
-------------------------------------------------------------
-------------------------------------------------------------
<S> <C> <C>
PHARMACEUTICALS - 5.0%
Abbott Laboratories............ 1,400 $ 66,587
ALZA Corporation*.............. 550 47,575
Bristol-Myers Squibb Company... 1,200 68,550
Johnson & Johnson.............. 900 84,544
Merck & Company, Inc. ......... 1,700 126,544
--------------
393,800
PUBLISHING & PRINTING - 2.4%
Gannett Company, Inc. ......... 1,400 74,200
McGraw-Hill Companies, Inc. ... 700 44,494
Tribune Company................ 1,600 69,800
--------------
188,494
SEMICONDUCTOR EQUIPMENT - 0.6%
Applied Materials, Inc.*....... 800 47,450
SEMICONDUCTORS - 2.4%
Intel Corporation.............. 4,500 187,312
SOFT DRINKS - 0.8%
PepsiCo, Inc. ................. 1,300 59,800
SPECIALTY CHEMICALS - 0.8%
Rohm & Haas Company............ 2,100 61,031
SYSTEMS SOFTWARE - 4.3%
Microsoft Corporation*......... 4,300 259,075
Oracle Corporation*............ 1,000 78,750
--------------
337,825
TELECOMMUNICATIONS EQUIPMENT - 4.4%
Comverse Technology, Inc.*..... 1,050 113,400
Nokia Oyj ADR.................. 1,900 75,644
Nortel Networks Corporation.... 2,000 119,125
Tellabs, Inc.*................. 900 42,975
--------------
351,144
--------------
Total common stocks - 98.9%............... 7,806,650
Cash and other assets, less liabilities -
1.1%.................................... 83,005
--------------
Total net assets - 100.0%................. $ 7,889,655
==============
</TABLE>
The identified cost of investments for federal income tax purposes at September
30, 2000 was $6,948,744.
* Non-Income producing security.
ADR (American Depositary Receipt)
See accompanying notes.
--------------------------------------------------------------------------------
54
<PAGE> 55
c-------------------------------------------------------------------------------
MANAGER'S COMMENTARY
SECURITY EQUITY FUND--
LARGE CAP GROWTH SERIES
NOVEMBER 15, 2000
FLYING S LOGO
[SHIELDS PHOTO]
Cindy Shields
Portfolio Manager
TO OUR SHAREHOLDERS:
The Security Large Cap Growth Fund began operations May 1, 2000. This is a
nondiversified fund, which permits investments to exceed 5% in any single stock
position, and investments are not limited to 25% of assets in any one industry.
Because the benchmark for the Large Cap Growth Fund is the S&P Barra Growth
Index, which holds positions greater than 5% in many names, we believed the
"nondiversified" classification was necessary in order to have competitive
performance with other funds in the group. For the period from inception on May
1, 2000 through the end of the fiscal year, September 30, 2000, the Fund
returned -2.90%, comparing favorably with the benchmark index's return of
-6.44%.(1)
OUTPERFORMANCE IN INFORMATION TECHNOLOGY STOCKS
Three software companies which are market leaders in their industry were
excellent performers over the period. Siebel Systems, Inc. provides e-business
applications which allow companies to communicate with their customers in the
most effective way. The stock of Siebel Systems rose nearly 80% during the five
months the Fund has been in existence.
I2 Technologies, Inc. also provides e-business solutions, primarily in the area
of supply-chain management. I2 Technologies can help companies find the best
ways to manage staffing, inventories, and equipment, making the best use of the
resources available to them. BEA Systems, Inc. provides e-commerce
infrastructure software, offering consulting, education, and support services to
help companies launch e-commerce programs. BEA Systems is benefiting from the
growing interest in Internet-based commerce.
HEALTH CARE COMPANIES AND SELECTED INDUSTRIALS ADD VALUE
While the benchmark index contains positions in major pharmaceutical
corporations, we focused attention on smaller specialty companies in the field.
Allergan, Inc. and Watson Pharmaceuticals, Inc., two such specialty companies,
have benefited from buying smaller drugs from the major pharmaceutical
manufacturers and focusing marketing attention on them in order to increase
sales. They also have not been threatened by a large number of looming patent
expirations, a growing problem for the major companies. Watson Pharmaceuticals,
a manufacturer of generic drugs, has felt less pressure from Medicare
reimbursement issues that have arisen during the presidential campaign
discussions than the major drug manufacturers have felt. A third specialty
pharmaceutical company, Forest Laboratories, Inc., gained 34% on the outlook for
its antidepressant drug Celexa. They expect Celexa to take market share from
competitors such as Prozac and Zoloft. Celexa is lower cost, and has an
excellent side effect profile.
Among our industrial holdings, Paychex, Inc. is a company that provides payroll
and human resource services to small and medium-sized corporations. Paychex has
gone beyond providing payroll systems, adding tax filing services, "cafeteria"
benefit plans, and similar services to its list of offerings. We believe Paychex
is less sensitive to economic cycles than other industrial companies. We also
believe its growth potential is quite large, given its small penetration in the
industry presently.
VOLATILE MARKETS CAN PROVIDE OPPORTUNITIES
During periods in which markets are extremely volatile, portfolio managers can
often find excellent values. We believe recent market declines have created
buying opportunities among many large cap stocks, and will use such selloffs to
build portfolios which we believe will have excellent growth potential over the
long term. Inflation remains well contained, and energy prices will eventually
decline. We expect the Federal Reserve to begin lowering interest rates sometime
next year, which will help stocks in the economically sensitive areas to recover
from their
--------------------------------------------------------------------------------
55
<PAGE> 56
MANAGER'S COMMENTARY (CONTINUED)
SECURITY EQUITY FUND--
LARGE CAP GROWTH SERIES
NOVEMBER 15, 2000
-------------------------------------------------------------------------------
LARGE CAP GROWTH SERIES VS.
S&P BARRA GROWTH
[LINE GRAPH]
<TABLE>
<CAPTION>
LARGE CAP GROWTH SERIES S&P BARRA GROWTH INDEX
----------------------- ----------------------
<S> <C> <C>
4/00 10000.00 10000.00
5/00 9430.00 9592.00
6/00 10230.00 10366.00
7/00 9970.00 9905.00
8/00 10530.00 10478.00
9/00 9710.00 9456.00
</TABLE>
This chart assumes a $10,000 investment in Class A shares of Large Cap Growth
Series on 05/01/2000 and reflects a deduction of the 5.75% sales load. On
9/30/2000, the value of your investment in Class A shares of the fund (with
dividends reinvested) would have grown to $9,152. In comparison, the same
$10,000 investment would have grown to $9,456 based on the S&P Barra Growth
index's performance.
recent price slides. We look forward to the year ahead for the new Large Cap
Growth Fund.
Sincerely,
Cindy Shields
Portfolio Manager
(1) Performance figures are based on Class A shares and do not reflect deduction
of the sales charge.
---------------- PERFORMANCE ----------------
TOP 5 HOLDINGS**
<TABLE>
<CAPTION>
% OF
NET ASSETS
----------
<S> <C>
General Electric Company 8.4%
Cisco Systems, Inc. 5.5%
Microsoft Corporation 4.2%
Intel Corporation 4.0%
Pfizer, Inc. 3.8%
</TABLE>
** At September 30, 2000
AVERAGE ANNUAL RETURNS
AS OF SEPTEMBER 30, 2000
<TABLE>
<CAPTION>
SINCE INCEPTION
---------------
<S> <C>
A Shares (2.90%) (5/1/00)
A Shares with sales charge (8.48%) (5/1/00)
B Shares (3.50%) (5/1/00)
B Shares with CDSC (8.33%) (5/1/00)
C Shares (3.50%) (5/1/00)
C Shares with CDSC (4.47%) (5/1/00)
</TABLE>
The performance data above represents past performance which is not predictive
of future results. The returns have been calculated from May 1, 2000 (date of
inception) to September 30, 2000 and are not annualized. The investment return
and principal value of an investment in the fund will fluctuate so that an
investor's shares, when redeemed, may be worth more or less than their original
cost. The figures above do not reflect deduction of the maximum front-end sales
charge of 5.75% for Class A shares or the contingent deferred sales charge of 5%
for Class B shares and 1% for Class C shares, as applicable, except where noted.
Such figures would be lower if the maximum sales charge were deducted.
--------------------------------------------------------------------------------
55
<PAGE> 57
SCHEDULE OF INVESTMENTS (CONTINUED)
SEPTEMBER 30, 2000
c-------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SECURITY EQUITY FUND - LARGE CAP GROWTH
SERIES
NUMBER MARKET
COMMON STOCKS OF SHARES VALUE
-------------------------------------------------------------
<S> <C> <C>
ADVERTISING - 0.3%
Omnicom Group, Inc. ............. 300 $ 21,881
APPLICATION SOFTWARE - 2.6%
i2 Technologies, Inc.*........... 300 56,119
Siebel Systems, Inc.*............ 1,000 111,312
------------
167,431
BIOTECHNOLOGY - 1.1%
Amgen, Inc.*..................... 1,000 69,828
BROADCASTING & CABLE TV - 1.0%
Clear Channel Communications,
Inc.*.......................... 376 21,244
Comcast Corporation*............. 700 28,656
Univision Communications,
Inc.*.......................... 400 14,950
------------
64,850
COMPUTER HARDWARE - 8.1%
Celestica, Inc.*................. 700 48,475
Dell Computer Corporation*....... 2,300 70,869
International Business Machines
Corporation.................... 1,800 202,500
Sun Microsystems, Inc.*.......... 1,600 186,800
Sycamore Networks, Inc.*......... 200 21,600
------------
530,244
COMPUTER STORAGE & PERIPHERALS - 4.1%
EMC Corporation*................. 2,100 208,163
Network Appliance, Inc.*......... 500 63,687
------------
271,850
DATA PROCESSING SERVICES - 0.6%
Paychex, Inc. ................... 750 39,375
DEPARTMENT STORES - 0.4%
Kohl's Corporation*.............. 500 28,844
DIVERSIFIED FINANCIAL SERVICES - 1.1%
Charles Schwab Corporation....... 1,100 39,050
Morgan Stanley Dean Witter &
Company........................ 400 36,575
------------
75,625
DRUG RETAIL - 0.9%
Walgreen Company................. 1,500 56,906
ELECTRONIC EQUIPMENT & INSTRUMENTS - 0.9%
Sanmina Corporation*............. 600 56,175
FOOD RETAIL - 0.6%
Safeway, Inc.*................... 800 37,350
GENERAL MERCHANDISE STORES - 2.8%
Wal-Mart Stores, Inc. ........... 3,800 182,875
</TABLE>
<TABLE>
<CAPTION>
NUMBER MARKET
COMMON STOCKS (CONTINUED) OF SHARES VALUE
-------------------------------------------------------------
-------------------------------------------------------------
<S> <C> <C>
HEALTH CARE EQUIPMENT - 2.3%
Guidant Corporation*............. 800 $ 56,550
Medtronic, Inc. ................. 1,100 56,994
PE Corp - PE Biosystems Group.... 300 34,950
------------
148,494
HEALTH CARE SUPPLIES - 0.8%
Allergan, Inc. .................. 600 50,663
HOME IMPROVEMENT RETAIL - 1.7%
Home Depot, Inc. ................ 2,100 111,431
HOUSEHOLD PRODUCTS - 1.2%
Colgate-Palmolive Company........ 600 28,320
Kimberly-Clark Corporation....... 900 50,231
------------
78,551
INDUSTRIAL CONGLOMERATES - 9.4%
General Electric Company......... 9,500 548,031
Tyco International, Ltd. ........ 1,300 67,438
------------
615,469
INTEGRATED TELECOMMUNICATION SERVICES - 1.5%
SBC Communications, Inc. ........ 2,000 100,000
INTERNET & SOFTWARE SERVICES - 2.6%
America Online, Inc.*............ 2,300 123,625
Yahoo, Inc.*..................... 500 45,656
------------
169,281
MOVIES & ENTERTAINMENT - 2.7%
Time Warner, Inc. ............... 1,200 93,900
Viacom, Inc. (Cl. B)*............ 1,400 81,900
------------
175,800
NETWORKING EQUIPMENT - 5.8%
Cisco Systems, Inc.*............. 6,500 359,125
Juniper Networks, Inc.*.......... 100 21,894
------------
381,019
PACKAGED FOODS - 0.6%
Bestfoods........................ 500 36,375
PHARMACEUTICALS - 14.0%
ALZA Corporation*................ 700 60,550
Bristol-Myers Squibb Company..... 1,900 108,538
Eli Lilly & Company.............. 1,100 89,237
Forest Laboratories, Inc.*....... 400 45,875
Johnson & Johnson................ 1,300 122,119
Merck & Company, Inc. ........... 2,000 148,875
Pfizer, Inc. .................... 5,550 249,403
</TABLE>
See accompanying notes.
--------------------------------------------------------------------------------
57
<PAGE> 58
SCHEDULE OF INVESTMENTS (CONTINUED)
SEPTEMBER 30, 2000
c-------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SECURITY EQUITY FUND - LARGE CAP GROWTH
SERIES (CONTINUED)
NUMBER MARKET
COMMON STOCKS (CONTINUED) OF SHARES VALUE
-------------------------------------------------------------
<S> <C> <C>
PHARMACEUTICALS (CONTINUED)
Schering-Plough Corporation...... 1,200 $ 55,800
Watson Pharmaceuticals, Inc.*.... 600 38,925
------------
919,322
SEMICONDUCTORS - 6.7%
Flextronics International,
Ltd.*.......................... 600 49,275
Intel Corporation................ 6,300 262,238
PMC -- Sierra, Inc.*............. 200 43,050
Texas Instruments, Inc. ......... 1,200 56,625
Xilinx, Inc.*.................... 300 25,687
------------
436,875
SOFT DRINKS - 2.9%
Coca-Cola Company................ 2,200 121,275
PepsiCo, Inc. ................... 1,500 69,000
------------
190,275
SYSTEMS SOFTWARE - 10.4%
Adobe Systems, Inc. ............. 300 46,575
BEA Systems, Inc.*............... 700 54,513
Microsoft Corporation*........... 4,600 277,150
Oracle Corporation*.............. 2,800 220,500
Sapient Corporation*............. 300 12,206
VERITAS Software Corporation*.... 500 71,000
------------
681,944
TELECOMMUNICATIONS EQUIPMENT - 7.3%
Comverse Technology, Inc.*....... 300 32,400
Corning, Inc. ................... 300 89,100
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT OR
NUMBER MARKET
COMMON STOCKS (CONTINUED) OF SHARES VALUE
-------------------------------------------------------------
<S> <C> <C>
TELECOMMUNICATIONS EQUIPMENT (CONTINUED)
JDS Uniphase Corporation*........ 800 $ 75,750
Lucent Technologies, Inc. ....... 2,400 73,350
Nortel Networks Corporation...... 2,800 166,775
QUALCOMM, Inc.*.................. 600 42,750
------------
480,125
WIRELESS TELECOMMUNICATION SERVICES - 0.9%
Nextel Communications, Inc.*..... 700 32,725
Sprint Corporation (PCS
Group)*........................ 800 28,050
------------
60,775
------------
Total common stocks - 95.3%................. 6,239,633
<CAPTION>
REPURCHASE AGREEMENT - 5.6%
---------------------------
<S> <C> <C>
STATE STREET REPO, 2.0% - 7/3/00
(Collateralized by FHLB, 6.25%
- 2029 with a value of
$400,000)(3)................. $ 369,465 369,465
------------
Total investments - 100.9%.................. 6,609,098
------------
Liabilities, less cash and other assets -
(0.9%).................................... (63,194)
------------
Total net assets - 100.0%................... $ 6,545,904
============
</TABLE>
The identified cost of investments for federal income tax purposes at September
30, 2000 was $6,817,149.
* Non-Income producing security.
See accompanying notes.
--------------------------------------------------------------------------------
58
<PAGE> 59
c-------------------------------------------------------------------------------
MANAGER'S COMMENTARY
SECURITY EQUITY FUND--
TECHNOLOGY SERIES
NOVEMBER 15, 2000
[WELLINGTON MANAGEMENT LOGO]
TO OUR SHAREHOLDERS:
Security Technology Fund began operations on May 1, 2000. During the period
since inception, which has been a particularly difficult period for
technology-related companies, the Fund generated a return of -6.70%.(1) For the
same period its benchmark index, the Goldman Sachs Technology Index, returned
-9.81%.
A TEAM APPROACH TO FUND MANAGEMENT
The Fund is managed by a team of five senior analysts from Wellington Management
Company, LLP. Each analyst is responsible for covering one or two technology
subsectors, and when they are combined they span the broad technology universe.
Our approach to investing is based on analyzing the competitive outlook for the
various subsectors, recognizing those likely to benefit from the current and
expected future environment, and identifying individual opportunities within
each subsector.
Our evaluation of technology companies rests on our solid knowledge of the
overall competitive environment including supply and demand characteristics,
secular trends, existing product evaluations, and new product developments. Our
central theme is that stocks which we believe are less than efficiently priced
can be found through extensive fundamental research. By focusing on early
identification of the factors that lead to earnings revisions, we are able to
determine favorable investment opportunities not yet recognized in the market.
A CHALLENGING TIME FOR TECHNOLOGY STOCKS
Since the inception of the Fund on May 1, 2000, technology stocks have wrestled
with interest rate fears and deteriorating fundamentals. The result has been
considerable volatility as the markets adjusted to the new environment.
Unfortunately, with the exception of interest rates, which we believe are more
likely to be cut than raised at this point, the environment remains challenging.
Specifically, we are seeing signs that the ongoing economic slowdown,
particularly when combined with the demise of many of the "dot.com" companies,
is taking its toll on demand for technology products and services.
In this difficult environment the Fund has weathered the volatility reasonably
well when compared with the benchmark index. The solid relative returns were
driven primarily by good stock selection. For the period from inception of the
fund through September 30, 2000 the top three contributors to performance were
3COM Corporation, Rational Software Corporation, and Ciena Corporation. The
three weakest performers were Micron Technology, Inc., Dell Computer
Corporation, and Cisco Systems, Inc.
DIFFICULT MARKETS CREATE BUYING OPPORTUNITIES
In some cases, such as semiconductors and personal computer companies, stock
prices already reflect the current environment, and this creates opportunities
to buy. However, in many other technology sectors we believe stocks continue to
look expensive. An advantage of managing a technology fund which is
diversified(2) across many subsectors is that we are able to shift the exposure
of the portfolio from those areas where we perceive still-high levels of risk to
other areas where we believe valuations are fair or even cheap. As of September
30, 2000 the electronics sector was overweight relative to the benchmark index,
and the communications equipment sector was underweight. Sector weightings for
both the computer and office equipment sector and the software and services
sector were close to their relative weights in the index.
THE LONG TERM OUTLOOK REMAINS POSITIVE
While we continue to believe our overall positioning is appropriate, and our
long term favorable outlook is unwavering, we are concerned about the near term
and expect the recent volatility to continue. However, we are excited that the
ongoing weakness may create opportunities to buy companies that are well
positioned for the future, but which have been too expensive in our opinion to
merit purchase in the past.
Sincerely,
The Global Technology Portfolio Management Team
Wellington Management Company, LLP
(1) Performance figures are based on Class A shares and do not reflect deduction
of the sales charge.
(2) The Technology Fund is a nondiversified fund that invests a substantial
portion of its assets in the technology sector and may be subject to risks
such as increased market fluctuations and price volatility.
--------------------------------------------------------------------------------
59
<PAGE> 60
MANAGER'S COMMENTARY (CONTINUED)
SECURITY EQUITY FUND--
TECHNOLOGY SERIES
NOVEMBER 15, 2000
-------------------------------------------------------------------------------
TECHNOLOGY SERIES VS.
S&P 500 INDEX, AND
GOLDMAN SACHS TECHNOLOGY INDEX
[LINE GRAPH]
<TABLE>
<CAPTION>
GOLDMAN SACHS
TECHNOLOGY SERIES S&P 500 INDEX TECHNOLOGY INDEX
----------------- ------------- ----------------
<S> <C> <C> <C>
5/00 10000.00 10000.00 10000.00
6/00 9736.03 10036.00 9990.00
7/00 9113.98 9879.00 9523.00
8/00 10329.80 10493.00 10761.00
9/00 8793.53 9939.00 9018.00
</TABLE>
This chart assumes a $10,000 investment in Class A shares of Technology Series
on 05/01/2000 and reflects a deduction of the 5.75% sales load. On 9/30/2000,
the value of your investment in Class A shares of the fund (with dividends
reinvested) would have grown to $8,793. In comparison, the same $10,000
investment would have grown to $9,018 based on the Goldman Sachs Technology
index's performance and $9,939 based on the S&P 500 Index.
---------------- PERFORMANCE ----------------
TOP 5 HOLDINGS**
<TABLE>
<CAPTION>
% OF
NET ASSETS
----------
<S> <C>
Cisco Systems, Inc. 8.5%
Microsoft Corporation 5.9%
International Business Machines 5.5%
Corporation
Analog Devices, Inc. 5.4%
Verisign, Inc. 4.0%
</TABLE>
** At September 30, 2000
AVERAGE ANNUAL RETURNS
AS OF SEPTEMBER 30, 2000
<TABLE>
<CAPTION>
SINCE INCEPTION
---------------
<S> <C> <C>
A Shares (6.70%) (5-1-00)
A Shares with sales charge (12.06%) (5-1-00)
B Shares (7.90%) (5-1-00)
B Shares with CDSC (12.51%) (5-1-00)
C Shares (7.90%) (5-1-00)
C Shares with CDSC (8.82%) (5-1-00)
</TABLE>
The performance data above represents past performance which is not predictive
of future results. The returns have been calculated from May 1, 2000 (date of
inception) to September 30, 2000 and are not annualized. The investment return
and principal value of an investment in the fund will fluctuate so that an
investor's shares, when redeemed, may be worth more or less than their original
cost. The figures above do not reflect deduction of the maximum front-end sales
charge of 5.75% for Class A shares or the contingent deferred sales charge of 5%
for Class B shares and 1% for Class C shares, as applicable, except where noted.
Such figures would be lower if the maximum sales charge were deducted.
--------------------------------------------------------------------------------
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SEPTEMBER 30, 2000
c-------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SECURITY EQUITY FUND - TECHNOLOGY
SERIES
NUMBER MARKET
COMMON STOCKS OF SHARES VALUE
-------------------------------------------------------------
<S> <C> <C>
APPLICATION SOFTWARE - 8.9%
Macromedia, Inc.*.............. 3,200 $ 258,600
Rational Software
Corporation*................. 4,300 298,313
Verity, Inc.*.................. 5,800 206,987
--------------
763,900
COMPUTER HARDWARE - 17.3%
Compaq Computer Corporation.... 9,500 262,010
Dell Computer Corporation*..... 2,900 89,356
Handspring, Inc.*.............. 1,800 124,313
International Business Machines
Corporation.................. 4,200 472,500
Palm, Inc.*.................... 4,800 254,100
Sun Microsystems, Inc.*........ 2,400 280,200
--------------
1,482,479
COMPUTER STORAGE & PERIPHERALS - 2.7%
Quantum Corporation - Hard Disk
Drive*....................... 23,289 231,434
ELECTRONIC EQUIPMENT & INSTRUMENTS - 0.0%
Agilent Technologies, Inc.*.... 1 49
IT CONSULTING & SERVICES - 6.4%
Ceridian Corporation*.......... 11,900 333,944
Electronic Data Systems
Corporation.................. 5,200 215,800
--------------
549,744
INTERNET SOFTWARE & SERVICES - 10.0%
America Online, Inc.*.......... 2,300 123,625
Exodus Communications, Inc.*... 4,200 207,375
Phone.com, Inc.*............... 900 102,263
VeriSign, Inc.*................ 1,682 340,710
Vignette Corporation*.......... 2,900 86,637
--------------
860,610
NETWORKING EQUIPMENT - 10.6%
Cisco Systems, Inc.*........... 13,200 729,300
Inrange Technologies
Corporation (CI.B)*.......... 100 5,300
Juniper Networks, Inc.*........ 800 175,150
--------------
909,750
SEMICONDUCTOR EQUIPMENT - 9.9%
Applied Materials, Inc.*....... 1,100 65,244
Brooks Automation, Inc.*....... 1,300 43,062
Credence Systems
Corporation*................. 2,200 66,000
KLA-Tencor Corporation*........ 3,300 135,919
Lam Research Corporation*...... 7,600 159,125
MEMC Electronic Materials,
Inc.*........................ 11,300 145,487
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT OR
NUMBER MARKET
COMMON STOCKS (CONTINUED) OF SHARES VALUE
-------------------------------------------------------------
<S> <C> <C>
SEMICONDUCTOR EQUIPMENT (CONTINUED)
Teradyne, Inc.*................ 6,500 $ 227,500
Ultratech Stepper, Inc.*....... 300 4,819
--------------
847,156
SEMICONDUCTORS - 14.7%
Analog Devices, Inc.*.......... 5,600 462,350
Applied Micro Circuits
Corporation*................. 1,100 227,769
Cypress Semiconductor
Corporation*................. 2,000 83,125
Micron Technology, Inc.*....... 5,800 266,800
OmniVision Technologies,
Inc.*........................ 700 25,331
SDL, Inc.*..................... 500 154,000
SpeedFam-IPEC, Inc.*........... 4,000 45,750
--------------
1,265,125
SYSTEMS SOFTWARE - 5.9%
Microsoft Corporation*......... 8,400 506,100
TELECOMMUNICATIONS EQUIPMENT - 9.3%
CIENA Corporation*............. 2,700 331,594
JDS Uniphase Corporation*...... 3,100 293,531
Research In Motion, Ltd.*...... 1,800 177,497
--------------
802,622
--------------
Total common stocks - 95.7%............... 8,218,969
<CAPTION>
FOREIGN STOCKS
--------------
FRANCE - 2.6%
STMicroelectronics N.V......... 4,600 219,075
TAIWAN - 0.5%
United Microelectronics
Corporation*................. 4,000 47,500
--------------
Total foreign stocks - 3.1%............... 266,575
<CAPTION>
REPURCHASE AGREEMENT - 1.8%
---------------------------
<S> <C> <C>
<S> <C> <C>
State Street, 4.25% - 10/2/00
(Collateralized by Fannie
Mae,
6.40% - 2001, with a value
of $165,000)............... $ 157,933 157,933
--------------
Total investments - 100.6%................ 8,643,477
Liabilities, less cash and other assets -
(0.6%).................................. (56,789)
--------------
Total net assets - 100.0%................. $ 8,586,688
==============
</TABLE>
The identified cost of investments for federal income tax purposes at September
30, 2000 was $9,249,886.
* Non-Income producing security.
See accompanying notes.
--------------------------------------------------------------------------------
61
<PAGE> 62
c-------------------------------------------------------------------------------
MANAGER'S COMMENTARY
SECURITY GROWTH AND INCOME FUND
NOVEMBER 15, 2000
FLYING S LOGO
[MILBERGER PHOTO]
Terry Milberger
Senior Portfolio
Manager
TO OUR SHAREHOLDERS:
The fiscal year just completed was a difficult one for Security Growth and
Income Fund. Total return for the Fund over the period was -7.28%, while the
benchmark S&P Barra Value Index gained 13.75%.(1) The majority of the
underperformance relative to the benchmark index occurred in the first half of
the fiscal year, prior to the time when we refocused our strategies in the
portfolio.
VALUE STOCKS SUFFERED DURING THE FIRST SIX MONTHS
The orientation of portfolio holdings early in the fiscal year toward
conservative value stocks with capitalizations lower than those used by many of
our peer funds was a primary contributor to underperformance. During the first
six months of the fiscal year the value components of the S&P 500 Index and the
S&P Midcap 400 Index gained only about 1/3 as much as those indexes'
corresponding growth components.
The second major contributor to underperformance during the first half was our
small weighting in technology stocks. Because of those stocks' high
price/earnings ratios, a trait not generally found in traditional growth and
income portfolios, technology issues had not been included to any great extent
among portfolio assets.
LARGE CAP VALUE STOCKS ARE THE PRIMARY PORTFOLIO EMPHASIS
During the first half of the fiscal year we began restructuring the portfolio,
repositioning it toward larger cap value stocks that we expected would perform
more in line with the benchmark S&P/Barra Value Index. We felt that this
orientation would best support the overall objectives of the fund, generating an
attractive return while lowering the downside risk over time.
The largest sector weighting at the close of the year was financial stocks,
making up about 26% of portfolio assets. Financial issues suffered as interest
rates rose in the second half of 1999. We believed they were undervalued as a
result of the selloff, and took advantage of the depressed prices to build our
portfolio position. Citigroup Inc., a diversified financial services company and
the dominant stock in the financial group, was the major holding at about 4% of
the portfolio. Multiline insurance company American International Group, Inc.,
was another primary holding. Financial stocks performed well most of the year,
and we sold portions of these holdings to take profits from time to time as
their stock prices rose.
Energy stocks also are a major part of the Fund, with a 12% weighting. Energy
stocks as a group excelled as petroleum prices rose. Integrated oil company
Exxon Mobil Corporation performed well, benefiting from the merger of the two
companies in late 1999. Other holdings in this sector included Royal Dutch
Petroleum Company and Texaco Inc.
VALUE FUNDS ARE A GOOD COMPLEMENT TO GROWTH FUNDS
We believe value funds have an important role in an investor's overall
investment portfolio at times like these. Since most holdings in a value
portfolio are purchased when the stocks' prices appear depressed, the downside
risk may be lower than that of growth funds. Historically, value stocks have
displayed less volatility than growth stocks in periods of market weakness while
generating similar returns over long periods of time. With the markets still
showing considerable skittishness, and with investors uncertain about the
direction the markets may be heading in coming months, value stock portfolios
can be an important part of a long-term investment plan.
Sincerely,
Terry Milberger
Senior Portfolio Manager
(1) Performance figures are based on Class A shares and do not reflect deduction
of the sales charge.
--------------------------------------------------------------------------------
62
<PAGE> 63
MANAGER'S COMMENTARY (CONTINUED)
SECURITY GROWTH AND INCOME FUND
NOVEMBER 15, 2000
-------------------------------------------------------------------------------
SECURITY GROWTH AND INCOME FUND
VS. S&P 500 INDEX, AND
S&P BARRA VALUE INDEX
[LINE GRAPH]
<TABLE>
<CAPTION>
GROWTH AND INCOME FUND S&P 500 INDEX S&P BARRA VALUE INDEX
---------------------- ------------- ---------------------
<S> <C> <C> <C>
89 10000.00 10000.00 10000.00
90 9334.00 9882.00 9305.00
91 11375.00 12900.00 11405.00
92 11922.00 13890.00 12605.00
93 12897.00 15278.00 14951.00
94 11885.00 15477.00 14855.00
95 15175.00 21270.00 20351.00
96 18104.00 26178.00 24828.00
97 23657.00 34913.00 32272.00
98 23534.00 44891.00 37008.00
99 24123.00 54333.00 41717.00
00 22478.00 53579.00 43545.00
</TABLE>
$10,000 OVER TEN YEARS
This chart assumes a $10,000 investment in Class A shares of Growth & Income
Series on 09/30/1989 and reflects a deduction of the 5.75% sales load. On
9/30/2000, the value of your investment in Class A shares of the fund (with
dividends reinvested) would have grown to $22,478. In comparison, the same
$10,000 investment would have grown to $53,579 based on the S&P 500 index's
performance and $43,545 based on the S&P Barra Value index's performance.
Benchmark was switched from the S&P 500 to the S&P Barra Value index as this
index's investment style more closely reflects the fund's investment style.
---------------- PERFORMANCE ----------------
TOP 5 HOLDINGS**
<TABLE>
<CAPTION>
% OF
NET ASSETS
----------
<S> <C>
Exxon Mobil Corporation 4.6%
Citigroup, Inc. 4.2%
American International Group, Inc. 3.5%
Royal Dutch Petroleum Company 2.2%
SBC Communications, Inc. 2.2%
</TABLE>
** At September 30, 2000
AVERAGE ANNUAL RETURNS
AS OF SEPTEMBER 30, 2000
<TABLE>
<CAPTION>
1 YEAR 5 YEARS 10 YEARS
------ ------- --------
<S> <C> <C> <C>
A Shares (7.28%) 9.25% 9.84%
A Shares with sales (12.64%) 7.97% 11.02%
charge
B Shares (8.36%) 8.10% 7.16%
(10-19-93)
(since inception)
B Shares with (12.94%) 7.81% 7.16%
CDSC (10-19-93)
(since inception)
C Shares (8.10%) (2.95%) N/A
(1-29-99)
(since inception)
C Shares with (9.02%) (2.95%) N/A
CDSC (1-29-99)
(since inception)
</TABLE>
The performance data above represents past performance which is not predictive
of future results. The investment return and principal value of an investment in
the fund will fluctuate so that an investor's shares, when redeemed, may be
worth more or less than their original cost. The figures above do not reflect
deduction of the maximum front-end sales charge of 5.75% for Class A shares or
the contingent deferred sales charge of 5% for Class B shares and 1% for Class C
shares, as applicable, except where noted. Such figures would be lower if the
maximum sales charge were deducted.
--------------------------------------------------------------------------------
62
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SEPTEMBER 30, 2000
c-------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SECURITY GROWTH AND INCOME FUND
PRINCIPAL
AMOUNT OR
NUMBER MARKET
CORPORATE BONDS OF SHARES VALUE
-------------------------------------------------------------
<S> <C> <C>
CONSUMER CYCLICAL - OTHER - 0.0%
American Eco Corporation,
9.625% - 2008................ $ 125,000 $ 5,000
HEALTH CARE - 0.0%
Multicare Companies, Inc.,
9.00% - 2007................. $ 200,000 12,000
INSURANCE - 0.1%
GenAmerica Capital, Inc.,
8.525% - 2027................ $ 75,000 70,406
ENERGY - REFINING - 0.2%
Crown Central Petroleum,
10.875% - 2005............... $ 200,000 170,000
SERVICES - 0.1%
Loewen Group, Inc., 6.70% -
2049......................... $ 75,000 27,750
--------------
Total corporate bonds - 0.4%... 285,156
<CAPTION>
COMMON STOCKS
-------------
<S> <C> <C>
ADVERTISING - 0.4%
Interpublic Group of Companies,
Inc.......................... 8,000 272,500
AEROSPACE & DEFENSE - 2.7%
Boeing Company................. 10,000 630,000
General Dynamics Corporation... 5,000 314,063
Honeywell International,
Inc.......................... 9,000 320,625
United Technologies
Corporation.................. 8,000 554,000
--------------
1,818,688
AIRLINES - 0.2%
Southwest Airlines Company..... 5,000 121,250
ALTERNATIVE CARRIERS - 0.3%
Global Crossing, Ltd.*......... 7,000 217,000
ALUMINUM - 0.3%
Alcoa, Inc..................... 8,000 202,500
AUTO PARTS & EQUIPMENT - 0.5%
Delphi Automotive Systems
Corporation.................. 15,000 226,875
TRW, Inc....................... 3,000 121,875
--------------
348,750
AUTOMOBILE MANUFACTURERS - 0.8%
Ford Motor Company............. 10,000 253,125
General Motors................. 5,000 325,000
--------------
578,125
BANKS - 10.1%
Bank of America Corporation.... 18,000 942,750
Bank of New York Company,
Inc. ........................ 12,000 672,750
</TABLE>
<TABLE>
<CAPTION>
NUMBER MARKET
COMMON STOCKS (CONTINUED) OF SHARES VALUE
-------------------------------------------------------------
<S> <C> <C>
BANKS - (CONTINUED)
Bank One Corporation........... 15,000 $ 579,375
Chase Manhattan Corporation.... 14,250 658,172
Fifth Third Bancorp............ 7,500 404,063
Firstar Corporation............ 11,000 246,125
FleetBoston Financial
Corporation.................. 15,000 585,000
Mellon Financial Corporation... 6,000 278,250
PNC Financial Services Group... 10,000 650,000
SunTrust Banks, Inc............ 5,000 249,063
U.S. Bancorp................... 9,000 204,750
Wachovia Corporation........... 5,000 283,437
Washington Mutual, Inc......... 8,000 318,500
Wells Fargo & Company.......... 17,000 780,938
--------------
6,853,173
BIOTECHNOLOGY - 0.3%
Amgen, Inc.*................... 3,500 244,398
BREWERS - 0.4%
Anheuser-Busch Companies,
Inc.......................... 7,200 304,650
BROADCASTING & CABLE TV - 1.3%
Clear Channel Communications,
Inc.*........................ 5,000 282,500
Comcast Corporation*........... 11,000 450,315
Univision Communications,
Inc.*........................ 3,600 134,550
--------------
867,365
BUILDING PRODUCTS - 0.2%
Masco Corporation.............. 6,000 111,750
COMPUTER & ELECTRONICS RETAIL - 0.2%
Circuit City Stores-Circuit
City Group................... 5,000 115,000
COMPUTER HARDWARE - 3.5%
Apple Computer, Inc.*.......... 4,000 102,750
Compaq Computer Corporation.... 19,000 524,020
Hewlett-Packard Company........ 12,000 1,164,000
International Business Machines
Corporation.................. 5,000 562,500
--------------
2,353,270
CONSTRUCTION & FARM MACHINERY - 0.4%
Caterpillar, Inc............... 3,000 101,250
Deere & Company................ 5,000 166,250
--------------
267,500
</TABLE>
See accompanying notes.
--------------------------------------------------------------------------------
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SEPTEMBER 30, 2000
c-------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SECURITY GROWTH AND INCOME FUND
(CONTINUED)
NUMBER MARKET
COMMON STOCKS (CONTINUED) OF SHARES VALUE
-------------------------------------------------------------
<S> <C> <C>
CONSUMER FINANCE - 0.9%
Household International,
Inc.......................... 5,000 $ 283,125
MBNA Corporation............... 8,000 308,000
--------------
591,125
DATA PROCESSING SERVICES - 0.4%
Automatic Data Processing,
Inc.......................... 3,600 240,750
DIVERSIFIED CHEMICALS - 1.1%
Dow Chemical Company........... 9,000 224,438
E.I. du Pont de Nemours &
Company...................... 13,200 546,975
--------------
771,413
DIVERSIFIED COMMERCIAL SERVICES - 0.3%
Ecolab, Inc.................... 5,000 180,312
DIVERSIFIED FINANCIAL SERVICES - 10.8%
American Express Company....... 16,500 1,002,375
Associates First Capital
Corporation.................. 7,000 266,000
Citigroup, Inc................. 53,333 2,883,315
Fannie Mae..................... 12,000 858,000
Freddie Mac.................... 8,000 432,500
Merrill Lynch & Company,
Inc.......................... 8,000 528,000
Morgan Stanley Dean Witter &
Company...................... 14,000 1,280,125
State Street Corporation....... 1000 130,000
--------------
7,380,315
DRUG RETAIL - 0.3%
CVS Corporation................ 5,000 231,563
ELECTRIC UTILITIES - 3.0%
AES Corporation*............... 4,000 274,000
American Electric Power
Company, Inc................. 3,500 136,938
Dominion Resources, Inc........ 2,500 145,156
Duke Energy Corporation........ 5,000 428,750
FPL Group, Inc................. 2,000 131,500
PECO Energy Company............ 2,000 121,125
PG&E Corporation............... 5,000 120,937
Public Service Enterprise
Group, Inc................... 3,000 134,063
Reliant Energy, Inc............ 3,000 139,500
Southern Company............... 7,000 227,062
TXU Corporation................ 4,000 158,500
--------------
2,017,531
ELECTRICAL COMPONENTS & EQUIPMENT - 1.1%
Emerson Electric Company....... 8,000 536,000
Molex, Inc..................... 4,000 217,750
--------------
753,750
</TABLE>
<TABLE>
<CAPTION>
NUMBER MARKET
COMMON STOCKS (CONTINUED) OF SHARES VALUE
-------------------------------------------------------------
-------------------------------------------------------------
<S> <C> <C>
ELECTRONIC EQUIPMENT & INSTRUMENTS - 0.4%
Sanmina Corporation*........... 2,800 $ 262,150
FOOD RETAIL - 0.8%
Kroger Company*................ 10,000 225,625
Safeway, Inc.*................. 6,700 312,806
--------------
538,431
FOREST PRODUCTS - 0.4%
Georgia-Pacific Group.......... 6,000 141,000
Weyerhaeuser Company........... 3,000 121,125
--------------
262,125
GAS UTILITIES - 0.9%
El Paso Energy Corporation..... 10,000 616,250
GENERAL MERCHANDISE STORES - 0.9%
Costco Wholesale
Corporation*................. 4,000 139,750
Target Corporation............. 10,000 256,250
Wal-Mart Stores, Inc........... 5,000 240,625
--------------
636,625
HEALTH CARE DISTRIBUTORS & SERVICES - 0.9%
Cardinal Health, Inc........... 7,000 617,312
HEALTH CARE EQUIPMENT - 1.1%
Baxter International, Inc...... 5,000 399,063
Becton, Dickinson & Company.... 5,000 132,187
Medtronic, Inc................. 4,000 207,250
--------------
738,500
HEALTH CARE FACILITIES - 0.4%
HCA - The Healthcare Company... 7,000 259,875
HOME IMPROVEMENT RETAIL - 0.9%
Home Depot, Inc................ 6,000 318,375
Lowe's Companies, Inc.......... 6,000 269,250
--------------
587,625
HOTELS - 0.3%
Carnival Corporation........... 7,000 172,375
HOUSEHOLD PRODUCTS - 1.8%
Clorox Company................. 6,000 237,375
Kimberly-Clark Corporation..... 5,500 306,969
Procter & Gamble Company....... 10,000 670,000
--------------
1,214,344
</TABLE>
See accompanying notes.
--------------------------------------------------------------------------------
65
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SEPTEMBER 30, 2000
c-------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SECURITY GROWTH AND INCOME FUND
(CONTINUED)
NUMBER MARKET
COMMON STOCKS (CONTINUED) OF SHARES VALUE
-------------------------------------------------------------
<S> <C> <C>
HOUSEWARES & SPECIALTIES - 0.2%
Newell Rubbermaid, Inc......... 5,000 $ 114,063
INDUSTRIAL CONGLOMERATES - 4.3%
General Electric Company....... 20,000 1,153,750
Minnesota Mining &
Manufacturing Company........ 5,500 501,187
Textron, Inc................... 5,000 230,625
Tyco International, Ltd........ 20,000 1,037,500
--------------
2,923,062
INDUSTRIAL GASES - 0.4%
Air Products & Chemicals,
Inc.......................... 4,000 144,000
Praxair, Inc................... 3,000 112,125
--------------
256,125
INDUSTRIAL MACHINERY - 0.6%
Illinois Tool Works, Inc....... 5,000 279,375
Ingersoll-Rand Company......... 3,000 101,625
--------------
381,000
INSURANCE BROKERS - 0.6%
Marsh & McLennan Companies,
Inc.......................... 3,000 398,250
INTEGRATED OIL & GAS - 9.9%
Chevron Corporation............ 8,200 699,050
Conoco, Inc. (Cl. B)........... 8,000 215,500
Exxon Mobil Corporation........ 35,000 3,119,375
Phillips Petroleum Company..... 8,000 502,000
Royal Dutch Petroleum
Company...................... 25,100 1,504,431
Texaco, Inc.................... 13,200 693,000
--------------
6,733,356
INTEGRATED TELECOMMUNICATION SERVICES - 7.1%
AT&T Corporation............... 40,000 1,175,000
BellSouth Corporation.......... 15,000 603,750
SBC Communications, Inc........ 30,000 1,500,000
Verizon Communications......... 20,000 968,750
WorldCom, Inc.*................ 20,000 607,500
--------------
4,855,000
IT CONSULTING & SERVICES - 0.5%
Computer Sciences
Corporation*................. 2,100 155,925
Electronic Data Systems
Corporation.................. 5,000 207,500
--------------
363,425
LIFE & HEALTH INSURANCE - 1.0%
AFLAC, Inc..................... 5,000 320,313
American General Corporation... 5,000 390,000
--------------
710,313
</TABLE>
<TABLE>
<CAPTION>
NUMBER MARKET
COMMON STOCKS (CONTINUED) OF SHARES VALUE
-------------------------------------------------------------
-------------------------------------------------------------
<S> <C> <C>
MANAGED HEALTH CARE - 0.4%
Aetna, Inc..................... 2,000 $ 116,125
UnitedHealth Group, Inc........ 1,500 148,125
--------------
264,250
MOTORCYCLE MANUFACTURERS - 0.3%
Harley-Davidson, Inc........... 4,800 229,800
MOVIES & ENTERTAINMENT - 2.3%
Viacom, Inc. (Cl. B)*.......... 10,000 585,000
Walt Disney Company............ 25,000 956,250
--------------
1,541,250
MULTI-LINE INSURANCE - 3.7%
American International Group,
Inc.......................... 25,000 2,392,188
Hartford Financial Services
Group, Inc................... 2,000 145,875
--------------
2,538,063
MULTI-UTILITIES - 1.2%
Enron Corporation.............. 6,000 525,750
Williams Companies, Inc........ 8,000 338,000
--------------
863,750
NETWORKING EQUIPMENT - 0.4%
Cisco Systems, Inc.*........... 5,000 276,250
OIL & GAS EQUIPMENT & SERVICES - 0.9%
Halliburton Company............ 6,000 293,625
Schlumberger, Ltd.............. 4,000 329,250
--------------
622,875
OIL & GAS EXPLORATION & PRODUCTION - 0.5%
Unocal Corporation............. 10,000 354,375
PACKAGED FOODS - 0.5%
Unilever N.V. ................. 7,000 337,750
PAPER PRODUCTS - 0.4%
International Paper Company.... 10,000 286,875
PHARMACEUTICALS - 5.0%
American Home Products
Corporation.................. 10,000 565,625
Bristol-Myers Squibb Company... 6,300 359,887
Johnson & Johnson.............. 6,900 648,169
Merck & Company, Inc........... 9,000 669,938
Pharmacia Corporation.......... 12,000 722,250
Schering-Plough Corporation.... 9,600 446,400
--------------
3,412,269
PHOTOGRAPHIC PRODUCTS - 0.2%
Eastman Kodak Company.......... 4,000 163,500
</TABLE>
See accompanying notes.
--------------------------------------------------------------------------------
66
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SEPTEMBER 30, 2000
c-------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SECURITY GROWTH AND INCOME FUND
(CONTINUED)
NUMBER MARKET
COMMON STOCKS (CONTINUED) OF SHARES VALUE
-------------------------------------------------------------
<S> <C> <C>
PROPERTY & CASUALTY INSURANCE - 0.8%
Allstate Corporation........... 9,000 $ 312,750
Chubb Corporation.............. 3,000 237,375
--------------
550,125
PUBLISHING & PRINTING - 0.9%
Gannett Company, Inc........... 8,000 424,000
McGraw-Hill Companies, Inc..... 3,000 190,687
--------------
614,687
RAILROADS - 0.4%
Burlington Northern Santa Fe
Corporation.................. 6,000 129,375
Union Pacific Corporation...... 3,000 116,625
--------------
246,000
RESTAURANTS - 0.8%
McDonald's Corporation......... 17,000 513,188
SEMICONDUCTORS - 0.6%
Intel Corporation.............. 10,000 416,250
SOFT DRINKS - 0.4%
PepsiCo, Inc................... 6,600 303,600
SPECIALTY CHEMICALS - 0.4%
Rohm & Haas Company............ 10,000 290,625
SYSTEMS SOFTWARE - 0.9%
Microsoft Corporation*......... 10,000 602,500
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT OR
NUMBER MARKET
COMMON STOCKS (CONTINUED) OF SHARES VALUE
-------------------------------------------------------------
<S> <C> <C>
TELECOMMUNICATIONS EQUIPMENT - 1.0%
Motorola, Inc.................. 24,000 $ 678,000
WIRELESS TELECOMMUNICATION SERVICES - 0.3%
Nextel Communications, Inc.*... 4,200 196,350
--------------
Total common stocks - 95.2%............... 64,785,216
COMMERCIAL PAPER
--------------------------------------------
COMBINATION GAS & ELECTRIC - 0.9%
Baltimore Gas & Electric
Company, 6.48%, 10-4-00...... $ 600,000 $ 599,676
ELECTRIC UTILITIES - 1.7%
Wisconsin Public Service
Corporation, 6.65%,
10-2-00...................... $ 1,200,000 1,199,778
--------------
Total commercial paper - 2.6%............. 1,799,454
--------------
Total investments - 98.2%................. 66,869,826
Cash and other assets, less liabilities -
1.8%.................................... 1,212,939
--------------
Total net assets - 100.0%................. $ 68,082,765
==============
</TABLE>
The identified cost of investments for federal income tax purposes at September
30, 2000 was $72,457,471.
* Non-Income producing security.
See accompanying notes.
--------------------------------------------------------------------------------
67
<PAGE> 68
c-------------------------------------------------------------------------------
STATEMENTS OF ASSETS AND LIABILITIES
SEPTEMBER 30, 2000
<TABLE>
<CAPTION>
SECURITY EQUITY FUND
-------------------------------------------------------
SECURITY TOTAL SOCIAL
GROWTH AND EQUITY GLOBAL RETURN AWARENESS
INCOME FUND SERIES SERIES SERIES SERIES
<S> <C> <C> <C> <C> <C>
ASSETS
Investments, at value(1)................................ $66,869,826 $1,010,694,903 $93,325,074 $7,806,650 $30,539,483
Cash.................................................... 593,763 581,915 50,297 82,921 743,030
Cash denominated in a foreign currency, at value(2)..... -- -- 35,600 -- --
Receivables:
Fund shares sold...................................... 6,833 273,278 118,353 2,324 5,402
Securities sold....................................... 684,748 5,116,272 1,330,222 -- --
Net unrealized appreciation on forward foreign
exchange contracts.................................. -- -- -- -- --
Interest.............................................. 7,273 2,560 76 531 2,590
Dividends............................................. 52,158 585,555 70,639 3,335 17,068
Variation margin...................................... -- -- -- -- --
Security Management Company............................. -- -- -- -- --
Foreign taxes recoverable............................... -- -- 26,798 218 --
Prepaid expenses........................................ -- -- -- 10,214 3,950
----------- -------------- ----------- ---------- -----------
Total assets........................................ 68,214,601 1,017,254,483 94,957,059 7,906,193 31,311,523
----------- -------------- ----------- ---------- -----------
LIABILITIES
Net realized depreciation on forward foreign exchange
contracts............................................. $ -- $ -- $ -- $ -- $ --
Payable for:
Securities purchased.................................. -- -- 175,432 -- --
Fund shares redeemed.................................. 51,428 1,028,069 78,539 -- 3,951
Written options....................................... -- -- -- -- --
Variation margin...................................... -- -- -- -- --
Management fees....................................... 72,678 884,661 144,168 5,012 26,690
Custodian fees........................................ -- -- -- 1,030 1,260
Transfer and administration fees...................... -- -- -- 1,264 5,641
Professional fees..................................... -- -- -- 5,364 6,300
12b-1 distribution plan fees.......................... 7,623 156,739 7,815 3,483 13,740
Other payables........................................ 107 -- -- 385 554
----------- -------------- ----------- ---------- -----------
Total liabilities................................... 131,836 2,069,469 405,954 16,538 58,136
----------- -------------- ----------- ---------- -----------
NET ASSETS.............................................. $68,082,765 $1,015,185,014 $94,551,105 $7,889,655 $31,253,387
=========== ============== =========== ========== ===========
NET ASSETS CONSIST OF:
Paid in capital......................................... $73,956,490 $ 526,487,568 $68,212,435 $7,006,777 $24,126,323
Accumulated undistributed net investment income
(loss)................................................ 441,483 -- (287,392) -- --
Accumulated undistributed net realized gain (loss) on
sale of investments, futures and foreign currency
transactions.......................................... (8,743,788) 137,502,874 17,055,212 6,201 600,357
Net unrealized appreciation in value of investments,
futures and translation of assets and liabilities in
foreign currency...................................... 2,428,580 351,194,572 9,570,850 876,677 6,526,707
----------- -------------- ----------- ---------- -----------
Total net assets.................................... $68,082,765 $1,015,185,014 $94,551,105 $7,889,655 $31,253,387
=========== ============== =========== ========== ===========
CLASS "A" SHARES
Capital shares outstanding.............................. 9,420,559 83,143,334 3,229,164 332,579 679,943
Net assets.............................................. $60,447,540 $ 853,126,008 $60,908,945 $3,927,586 $17,702,262
Net asset value per share............................... $ 6.42 $ 10.26 $ 18.86 $ 11.81 $ 26.04
=========== ============== =========== ========== ===========
Offering price per share (net asset value per share
divided by 94.25%).................................... $ 6.81 $ 10.89 $ 20.01 $ 12.53 $ 27.63
=========== ============== =========== ========== ===========
CLASS "B" SHARES
Capital shares outstanding.............................. 1,151,151 16,235,940 1,719,057 337,878 506,060
Net assets.............................................. $7,152,430 $ 156,632,733 $30,951,169 $3,903,399 $12,633,318
Net asset value per share............................... $ 6.21 $ 9.65 $ 18.00 $ 11.55 $ 24.96
=========== ============== =========== ========== ===========
CLASS "C" SHARES
Capital shares outstanding.............................. 76,414 538,996 145,046 5,058 35,988
Net assets.............................................. $ 482,795 $ 5,426,273 $ 2,690,991 $ 58,670 $ 917,807
Net asset value per share............................... $ 6.32 $ 10.07 $ 18.55 $ 11.60 $ 25.50
=========== ============== =========== ========== ===========
(1) Investments, at cost................................ $64,441,246 $ 659,500,331 $83,748,754 $6,929,900 $24,012,776
(2) Cash denominated in a foreign currency, at cost..... -- -- 34,571 -- --
</TABLE>
See accompanying notes.
--------------------------------------------------------------------------------
68
<PAGE> 69
STATEMENTS OF ASSETS AND LIABILITIES (CONTINUED)
SEPTEMBER 30, 2000
c-------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SECURITY EQUITY FUND
--------------------------------------------------------
MID CAP SMALL CAP
VALUE GROWTH ENHANCED INTERNATIONAL
SERIES SERIES INDEX SERIES SERIES
<S> <C> <C> <C> <C>
ASSETS
Investments, at value(1).................................... $50,749,695 $51,375,814 $25,662,687 $10,972,733
Cash........................................................ 473,253 2,369,002 1,096,746 189,289
Cash denominated in a foreign currency, at value(2)......... -- -- -- 86,323
Receivables:
Fund shares sold.......................................... 26,065 44,945 2,255 3,173
Securities sold........................................... 716,572 1,617,026 477,418 821,318
Net unrealized appreciation on forward foreign exchange
contracts............................................... -- -- -- --
Interest.................................................. 1,731 12,987 3,647 108
Dividends................................................. 32,268 2,875 22,521 6,900
Variation margin.......................................... -- -- 95 --
Security Management Company................................. -- -- -- --
Foreign taxes recoverable................................... -- -- -- 10,233
Prepaid expenses............................................ 23,663 11,661 10,371 17,134
----------- ----------- ----------- -----------
Total assets............................................ 52,023,247 55,434,310 27,275,740 12,107,211
----------- ----------- ----------- -----------
LIABILITIES
Net realized depreciation on forward foreign exchange
contracts................................................. $ -- $ -- $ -- $ 1,659
Payable for:
Securities purchased...................................... 190,735 1,662,996 832,756 1,470,037
Fund shares redeemed...................................... 2,346 6,475 -- 17,863
Written options........................................... 181,735 -- -- 1,250
Variation margin.......................................... -- -- 46,830 --
Management fees........................................... 41,521 45,867 16,581 9,815
Custodian fees............................................ 2,610 5,182 8,478 54,459
Transfer and administration fees.......................... 6,811 13,218 3,308 4,745
Professional fees......................................... 6,769 5,364 4,364 5,364
12b-1 distribution plan fees.............................. 21,213 94,240 91,981 42,852
Other payables............................................ 1,413 728 687 236
----------- ----------- ----------- -----------
Total liabilities....................................... 455,153 1,834,070 1,004,985 1,608,280
----------- ----------- ----------- -----------
NET ASSETS.................................................. $51,568,094 $53,600,240 $26,270,755 $10,498,931
=========== =========== =========== ===========
NET ASSETS CONSIST OF:
Paid in capital............................................. $36,118,587 $36,333,914 $23,962,620 $ 9,766,912
Accumulated undistributed net investment income (loss)...... -- -- -- 534
Accumulated undistributed net realized gain on sale of
investments, futures and foreign currency transactions.... 4,459,765 3,008,865 223,625 373,721
Net unrealized appreciation in value of investments, futures
and translation of assets and liabilities in foreign
currency.................................................. 10,989,742 14,257,461 2,084,510 357,764
----------- ----------- ----------- -----------
Total net assets........................................ $51,568,094 $53,600,240 $26,270,755 $10,498,931
=========== =========== =========== ===========
CLASS "A" SHARES
Capital shares outstanding.................................. 1,660,620 1,728,834 728,116 400,768
Net assets.................................................. $34,458,428 $38,171,838 $ 8,218,926 $ 4,414,481
Net asset value per share................................... $ 20.75 $ 22.08 $ 11.29 $ 11.01
=========== =========== =========== ===========
Offering price per share (net asset value per share divided
by 94.25%)................................................ $ 22.02 $ 23.43 $ 11.98 $ 11.68
=========== =========== =========== ===========
CLASS "B" SHARES
Capital shares outstanding.................................. 698,301 547,742 983,371 231,532
Net assets.................................................. $14,040,504 $11,687,756 $10,960,153 $ 2,519,997
Net asset value per share................................... $ 20.11 $ 21.34 $ 11.15 $ 10.88
=========== =========== =========== ===========
CLASS "C" SHARES
Capital shares outstanding.................................. 150,491 172,033 635,235 326,457
Net assets.................................................. $ 3,069,162 $3,740,646 $ 7,091,676 $ 3,564,453
Net asset value per share................................... $ 20.39 $ 21.74 $ 11.16 $ 10.92
=========== =========== =========== ===========
(1) Investments, at cost.................................... $39,722,663 $37,118,353 $23,416,694 $10,614,929
(2) Cash denominated in a foreign currency, at cost......... -- -- -- 86,261
</TABLE>
See accompanying notes.
--------------------------------------------------------------------------------
69
<PAGE> 70
STATEMENTS OF ASSETS AND LIABILITIES (CONTINUED)
SEPTEMBER 30, 2000
c-------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SECURITY EQUITY FUND
---------------------------------------
SELECT LARGE CAP
25(R) GROWTH TECHNOLOGY SECURITY
SERIES SERIES SERIES ULTRA FUND
<S> <C> <C> <C> <C>
ASSETS
Investments, at value(1).................................... $46,809,719 $6,609,098 $8,643,477 $248,636,545
Cash........................................................ 812,795 5,042 -- 525,974
Cash denominated in a foreign currency, at value(2)......... -- -- -- --
Receivables:
Fund shares sold.......................................... 26,835 44,113 32,877 112,070
Securities sold........................................... -- -- 144,282 251,834
Net unrealized appreciation on forward foreign exchange
contracts............................................... -- -- -- --
Interest.................................................. 1,859 -- -- 4,812
Dividends................................................. 15,201 3,045 235 59,890
Variation margin.......................................... -- -- -- --
Security Management Company................................. -- -- -- --
Foreign taxes recoverable................................... -- -- -- --
Prepaid expenses............................................ 12,663 25,418 26,684 --
----------- ---------- ---------- ------------
Total assets............................................ 47,679,072 6,686,716 8,847,555 249,591,125
----------- ---------- ---------- ------------
LIABILITIES
Net realized depreciation on forward foreign exchange
contracts................................................. $ -- $ -- $ -- $ --
Payable for:
Securities purchased...................................... -- 117,508 228,866 1,152,657
Fund shares redeemed...................................... 37,480 -- 87 89,029
Written options........................................... -- -- -- 1,479,585
Variation margin.......................................... -- -- -- --
Management fees........................................... 30,235 5,420 7,388 215,328
Custodian fees............................................ 896 436 2,400 --
Transfer and administration fees.......................... 8,402 664 3,530 --
Professional fees......................................... 4,364 5,000 5,000 --
12b-1 distribution plan fees.............................. 98,201 11,663 13,481 38,506
Other payables............................................ 863 121 115 --
----------- ---------- ---------- ------------
Total liabilities....................................... 180,441 140,812 260,867 2,975,105
----------- ---------- ---------- ------------
NET ASSETS.................................................. $47,498,631 $6,545,904 $8,586,688 $246,616,020
=========== ========== ========== ============
NET ASSETS CONSIST OF:
Paid in capital............................................. $44,159,377 $6,753,955 $9,193,097 $130,696,127
Accumulated undistributed net investment income (loss)...... -- -- -- --
Accumulated undistributed net realized gain (loss) on sale
of investments, futures and foreign currency
transactions.............................................. (1,324,359) (60,159) (193,663) 21,251,707
Net unrealized appreciation (depreciation) in value of
investments, futures and translation of assets and
liabilities in foreign currency........................... 4,663,613 (147,892) (412,746) 94,668,186
----------- ---------- ---------- ------------
Total net assets........................................ $47,498,631 $6,545,904 $8,586,688 $246,616,020
=========== ========== ========== ============
CLASS "A" SHARES
Capital shares outstanding.................................. 1,941,192 247,709 465,246 13,404,250
Net assets.................................................. $22,005,815 $2,404,798 $4,339,614 $204,787,284
Net asset value per share................................... $ 11.34 $ 9.71 $ 9.33 $ 15.28
=========== ========== ========== ============
Offering price per share (net asset value divided by
94.25%)................................................... $ 12.03 $ 10.30 $ 9.90 $ 16.21
=========== ========== ========== ============
CLASS "B" SHARES
Capital shares outstanding.................................. 1,621,970 211,290 214,073 2,768,442
Net assets.................................................. $18,199,061 $2,038,998 $1,970,673 $ 38,811,644
Net asset value per share................................... $ 11.22 $ 9.65 $ 9.21 $ 14.02
=========== ========== ========== ============
CLASS "C" SHARES
Capital shares outstanding.................................. 647,843 217,844 247,232 201,238
Net assets.................................................. $ 7,293,755 $2,102,108 $2,276,401 $ 3,017,092
Net asset value per share................................... $ 11.26 $ 9.65 $ 9.21 $ 14.99
=========== ========== ========== ============
(1) Investments, at cost.................................... $42,146,106 $6,756,990 $9,056,223 $153,371,069
(2) Cash denominated in a foreign currency, at cost......... -- -- -- --
</TABLE>
See accompanying notes.
--------------------------------------------------------------------------------
70
<PAGE> 71
c-------------------------------------------------------------------------------
STATEMENTS OF OPERATIONS
FOR THE YEAR ENDED SEPTEMBER 30, 2000, EXCEPT AS NOTED.
<TABLE>
<CAPTION>
SECURITY EQUITY FUND
-----------------------------------------------------
SECURITY TOTAL SOCIAL
GROWTH AND EQUITY GLOBAL RETURN AWARENESS
INCOME FUND SERIES SERIES SERIES SERIES
<S> <C> <C> <C> <C> <C>
INVESTMENT INCOME:
Dividends.......................................... $1,397,138 $ 8,792,261 $ 773,515 $ 61,690 $ 203,470
Interest........................................... 282,173 2,722,902 329,294 6,216 60,287
----------- ------------ ----------- -------- ----------
1,679,311 11,515,163 1,102,809 67,906 263,757
Less foreign tax expense......................... -- -- (52,994) -- --
----------- ------------ ----------- -------- ----------
Total investment income.......................... 1,679,311 11,515,163 1,049,815 67,906 263,757
EXPENSES:
Management fees.................................... 942,194 11,139,289 1,532,893 58,548 291,335
Custodian fees..................................... -- -- -- 3,753 3,537
Transfer/maintenance fees.......................... -- -- -- 10,727 43,826
Administration fees................................ -- -- -- 7,026 26,220
Directors' fees.................................... -- -- -- 67 166
Professional fees.................................. -- -- -- 7,013 3,829
Reports to shareholders............................ -- -- -- 3,225 10,925
Registration fees.................................. -- -- -- 24,236 32,618
Other expenses..................................... 107 -- -- 227 523
12b-1 distribution plan fees....................... 86,494 1,712,743 126,900 39,782 122,203
----------- ------------ ----------- -------- ----------
Total expenses..................................... 1,028,795 12,852,032 1,659,793 154,604 535,182
Less reimbursement of expenses..................... -- -- -- -- --
----------- ------------ ----------- -------- ----------
Net expenses....................................... 1,028,795 12,852,032 1,659,793 154,604 535,182
----------- ------------ ----------- -------- ----------
Net investment income (loss)....................... 650,516 (1,336,869) (609,978) (86,698) (271,425)
NET REALIZED AND UNREALIZED GAIN (LOSS):
Net realized gain (loss) during the period on:
Investments........................................ (8,743,788) 155,161,988 19,251,482 10,642 607,076
Futures............................................ -- (3,789,922) -- -- --
Options written.................................... -- -- -- -- --
Foreign currency transactions...................... -- -- (405,783) (48) --
----------- ------------ ----------- -------- ----------
Net realized gain (loss)......................... (8,743,788) 151,372,066 18,845,699 10,594 607,076
Net change in unrealized appreciation (depreciation)
during the period on:
Investments........................................ 1,703,197 (80,889,669) 2,692,214 502,527 1,627,369
Futures............................................ -- -- -- -- --
Options written.................................... -- -- -- -- --
Translation of assets and liabilities in foreign
currencies....................................... -- -- 48,576 (29) --
----------- ------------ ----------- -------- ----------
Net unrealized appreciation (depreciation)......... 1,703,197 (80,889,669) 2,740,790 502,498 1,627,369
----------- ------------ ----------- -------- ----------
Net gain (loss).................................. (7,040,591) 70,482,397 21,586,489 513,092 2,234,445
----------- ------------ ----------- -------- ----------
Net increase (decrease) in net assets resulting
from operations............................. $(6,390,075) $ 69,145,528 $20,976,511 $426,394 $1,963,020
=========== ============ =========== ======== ==========
</TABLE>
See accompanying notes.
--------------------------------------------------------------------------------
71
<PAGE> 72
STATEMENTS OF OPERATIONS (CONTINUED)
FOR THE YEAR ENDED SEPTEMBER 30, 2000, EXCEPT AS NOTED.
c-------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SECURITY EQUITY FUND
------------------------------------------------------
MID CAP SMALL CAP ENHANCED
VALUE GROWTH INDEX INTERNATIONAL
SERIES SERIES SERIES SERIES
<S> <C> <C> <C> <C>
INVESTMENT INCOME:
Dividends................................................. $ 390,650 $ 17,480 $ 273,440 $ 134,104
Interest.................................................. 19,204 220,394 86,479 21,820
----------- ----------- ---------- ---------
409,854 237,874 359,919 155,924
Less foreign tax expense................................ -- -- -- (16,488)
----------- ----------- ---------- ---------
Total investment income................................. 409,854 237,874 359,919 139,436
EXPENSES:
Management fees........................................... 393,950 408,564 194,986 113,344
Custodian fees............................................ 6,661 13,094 25,200 128,711
Transfer/maintenance fees................................. 39,655 56,866 17,934 5,513
Administration fees....................................... 35,455 36,771 23,398 44,637
Directors' fees........................................... 384 308 196 (20)
Professional fees......................................... 7,521 5,738 5,825 7,710
Reports to shareholders................................... 8,111 4,540 5,351 2,472
Registration fees......................................... 17,101 27,447 31,779 26,788
Other expenses............................................ 778 342 360 135
12b-1 distribution plan fees.............................. 126,829 192,714 196,881 71,740
----------- ----------- ---------- ---------
Total expenses............................................ 636,445 746,384 501,910 401,030
Less: Reimbursement of expenses........................... -- (35,191) -- (103,999)
----------- ----------- ---------- ---------
Net expenses.............................................. 636,445 711,193 501,910 297,031
----------- ----------- ---------- ---------
Net investment loss....................................... (226,591) (473,319) (141,991) (157,595)
NET REALIZED AND UNREALIZED GAIN (LOSS):
Net realized gain (loss) during the period on:
Investments............................................... 4,735,454 4,009,340 197,767 915,028
Futures................................................... -- -- 203,576 (117,246)
Options written........................................... 203,468 -- -- (31,742)
Foreign currency transactions............................. -- -- -- 49,267
----------- ----------- ---------- ---------
Net realized gain....................................... 4,938,922 4,009,340 401,343 815,307
Net change in unrealized appreciation (depreciation) during
the period on:
Investments............................................... 5,850,727 9,887,451 2,728,318 28,570
Futures................................................... -- -- (4,548) --
Options written........................................... (37,290) -- -- 1,301
Translation of assets and liabilities in foreign
currencies.............................................. -- -- -- 11,794
----------- ----------- ---------- ---------
Net unrealized appreciation (depreciation)................ 5,813,437 9,887,451 2,723,770 41,665
----------- ----------- ---------- ---------
Net gain................................................ 10,752,359 13,896,791 3,125,113 856,972
----------- ----------- ---------- ---------
Net increase in net assets resulting from
operations......................................... $10,525,768 $13,423,472 $2,983,122 $ 699,377
=========== =========== ========== =========
</TABLE>
See accompanying notes.
--------------------------------------------------------------------------------
72
<PAGE> 73
STATEMENTS OF OPERATIONS (CONTINUED)
FOR THE YEAR ENDED SEPTEMBER 30, 2000, EXCEPT AS NOTED.
c-------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SECURITY EQUITY FUND
-------------------------------------
LARGE CAP SECURITY
SELECT 25(R) GROWTH TECHNOLOGY ULTRA
SERIES SERIES* SERIES* FUND
<S> <C> <C> <C> <C>
INVESTMENT INCOME:
Dividends................................................. $ 137,993 $ 10,518 $ 1,935 $ 528,079
Interest.................................................. 126,114 3,306 4,213 341,896
---------- --------- --------- -----------
264,107 13,824 6,148 869,975
Less foreign tax expense................................ -- -- -- --
---------- --------- --------- -----------
Total investment income................................. 264,107 13,824 6,148 869,975
EXPENSES:
Management fees........................................... 323,864 23,741 29,670 1,981,499
Custodian fees............................................ 2,287 2,038 6,377 --
Transfer/maintenance fees................................. 56,873 405 1,645 --
Administration fees....................................... 38,864 2,137 13,835 --
Directors' fees........................................... 199 27 30 --
Professional fees......................................... 5,899 5,000 5,024 --
Reports to shareholders................................... 11,202 103 100 --
Registration fees......................................... 36,896 5,083 5,091 --
Other expenses............................................ 423 4 -- --
12b-1 distribution plan fees.............................. 283,037 17,584 19,352 237,111
---------- --------- --------- -----------
Total expenses............................................ 759,544 56,122 81,124 2,218,610
Less: Reimbursement of expenses........................... -- -- (1,046) --
Earnings credits applied.............................. -- (1,602) (772) --
---------- --------- --------- -----------
Net expenses.............................................. 759,544 54,520 79,306 2,218,610
---------- --------- --------- -----------
Net investment loss....................................... (495,437) (40,696) (73,158) (1,348,635)
NET REALIZED AND UNREALIZED GAIN (LOSS):
Net realized gain (loss) during the period on:
Investments............................................... (955,892) (60,159) (193,663) 23,478,453
Futures................................................... -- -- -- (240,660)
Options written........................................... -- -- -- 1,479,026
Foreign currency transactions............................. -- -- -- --
---------- --------- --------- -----------
Net realized gain (loss)................................ (955,892) (60,159) (193,663) 24,716,819
Net change in unrealized appreciation (depreciation) during
the period on:
Investments............................................... 3,265,926 (147,892) (412,746) 62,700,503
Futures................................................... -- -- -- --
Options written........................................... -- -- -- (597,290)
Translation of assets and liabilities in foreign
currencies.............................................. -- -- -- --
---------- --------- --------- -----------
Net unrealized appreciation (depreciation)................ 3,265,926 (147,892) (412,746) 62,103,213
---------- --------- --------- -----------
Net gain (loss)......................................... 2,310,034 (208,051) (606,409) 86,820,032
---------- --------- --------- -----------
Net increase (decrease) in net assets resulting from
operations......................................... $1,814,597 $(248,747) $(679,567) $85,471,397
========== ========= ========= ===========
</TABLE>
* Period May 1, 2000 (inception) through September 30, 2000.
See accompanying notes.
--------------------------------------------------------------------------------
73
<PAGE> 74
c-------------------------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEAR ENDED SEPTEMBER 30, 2000,
EXCEPT AS NOTED.
<TABLE>
<CAPTION>
SECURITY EQUITY FUND
-------------------------------------------------------
SECURITY TOTAL SOCIAL
GROWTH AND EQUITY GLOBAL RETURN AWARENESS
INCOME FUND SERIES SERIES SERIES SERIES
<S> <C> <C> <C> <C> <C>
INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONS:
Net investment income (loss)....................... $ 650,516 $ (1,336,869) $ (609,978) $ (86,698) $ (271,425)
Net realized gain (loss)........................... (8,743,788) 151,372,066 18,845,699 10,594 607,076
Unrealized appreciation (depreciation) during the
period........................................... 1,703,197 (80,889,669) 2,740,790 502,498 1,627,369
------------ -------------- ----------- ---------- -----------
Net increase (decrease) in net assets resulting
from operations.................................. (6,390,075) 69,145,528 20,976,511 426,394 1,963,020
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income
Class A........................................ (1,285,098) -- -- -- --
Class B........................................ (75,787) -- -- -- --
Class C........................................ (5,850) -- -- -- --
Net realized gain
Class A........................................ (1,172,179) (32,981,516) (2,782,654) (196,255) (229,880)
Class B........................................ (159,994) (6,354,341) (1,989,962) (202,329) (157,943)
Class C........................................ (5,955) (208,842) (27,301) (692) (7,240)
------------ -------------- ----------- ---------- -----------
Total distributions to shareholders............ (2,704,863) (39,544,699) (4,799,917) (399,276) (395,063)
NET INCREASE (DECREASE) FROM CAPITAL SHARE
TRANSACTIONS..................................... (7,744,010) (95,973,119) 29,289,332 615,238 6,742,570
------------ -------------- ----------- ---------- -----------
Total increase (decrease) in net assets........ (16,838,948) (66,372,290) 45,465,926 642,356 8,310,527
------------ -------------- ----------- ---------- -----------
NET ASSETS:
Beginning of period................................ 84,921,713 1,081,557,304 49,085,179 7,247,299 22,942,860
------------ -------------- ----------- ---------- -----------
End of period...................................... $68,082,765.. $1,015,185,014 $94,551,105 $7,889,655 $31,253,387
============ ============== =========== ========== ===========
Accumulated undistributed net investment income
(loss) at end of period.......................... $ 441,483 $ -- $ (287,392) $ -- $ --
============ ============== =========== ========== ===========
</TABLE>
See accompanying notes.
--------------------------------------------------------------------------------
74
<PAGE> 75
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEAR ENDED SEPTEMBER 30, 2000,
EXCEPT AS NOTED.
c-------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SECURITY EQUITY FUND
-------------------------------------------------------
MID CAP SMALL CAP ENHANCED
VALUE GROWTH INDEX INTERNATIONAL
SERIES SERIES SERIES SERIES
<S> <C> <C> <C> <C>
INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONS:
Net investment income (loss)................................ $ (226,591) $ (473,319) $ (141,991) $ (157,595)
Net realized gain (loss).................................... 4,938,922 4,009,340 401,343 815,307
Unrealized appreciation (depreciation) during the period.... 5,813,437 9,887,451 2,723,770 41,665
----------- ----------- ----------- -----------
Net increase (decrease) in net assets resulting from
operations................................................ 10,525,768 13,423,472 2,983,122 699,377
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income
Class A................................................. -- -- -- --
Class B................................................. -- -- -- --
Class C................................................. -- -- -- --
Net realized gain
Class A................................................. (939,549) (562,440) (95,114) --
Class B................................................. (379,149) (43,258) (118,324) --
Class C................................................. (48,048) (38,867) (63,100) --
----------- ----------- ----------- -----------
Total distributions to shareholders..................... (1,366,746) (644,565) (276,538) --
NET INCREASE (DECREASE) FROM CAPITAL SHARE TRANSACTIONS..... 8,785,203 20,624,275 1,178,896 2,351,127
----------- ----------- ----------- -----------
Total increase (decrease) in net assets................. 17,944,225 33,403,182 3,885,480 3,050,504
----------- ----------- ----------- -----------
NET ASSETS:
Beginning of period......................................... 33,623,869 20,197,058 22,385,275 7,448,427
----------- ----------- ----------- -----------
End of period............................................... $51,568,094 $53,600,240 $26,270,755 $10,498,931
=========== =========== =========== ===========
Accumulated undistributed net investment income (loss) at
end of period............................................. $ -- $ -- $ -- $ 534
=========== =========== =========== ===========
</TABLE>
See accompanying notes.
--------------------------------------------------------------------------------
75
<PAGE> 76
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEAR ENDED SEPTEMBER 30, 2000,
EXCEPT AS NOTED.
c-------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SECURITY EQUITY FUND
--------------------------------------
LARGE CAP SECURITY
SELECT 25(R) GROWTH TECHNOLOGY ULTRA
SERIES SERIES* SERIES* FUND
<S> <C> <C> <C> <C>
INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONS:
Net investment income (loss)................................ $ (495,437) $ (40,696) $ (73,158) $ (1,348,635)
Net realized gain (loss).................................... (955,892) (60,159) (193,663) 24,716,819
Unrealized appreciation (depreciation) during the period.... 3,265,926 (147,892) (412,746) 62,103,213
----------- ---------- ---------- ------------
Net increase (decrease) in net assets resulting from
operations................................................ 1,814,597 (248,747) (679,567) 85,471,397
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income
Class A................................................. -- -- -- --
Class B................................................. -- -- -- --
Class C................................................. -- -- -- --
Net realized gain
Class A................................................. -- -- -- (4,644,959)
Class B................................................. -- -- -- (603,560)
Class C................................................. -- -- -- (7,207)
----------- ---------- ---------- ------------
Total distributions to shareholders..................... -- -- -- (5,255,726)
NET INCREASE (DECREASE) FROM CAPITAL SHARE TRANSACTIONS..... 14,329,137 6,794,651 9,266,255 62,249,722
----------- ---------- ---------- ------------
Total increase (decrease) in net assets................. 16,143,734 6,545,904 8,586,688 142,465,393
----------- ---------- ---------- ------------
NET ASSETS:
Beginning of period......................................... 31,354,897 -- -- 104,150,627
----------- ---------- ---------- ------------
End of period............................................... $47,498,631 $6,545,904 $8,586,688 $246,616,020
=========== ========== ========== ============
Accumulated undistributed net investment income (loss) at
end of period............................................. $ -- $ -- $ -- $ --
=========== ========== ========== ============
</TABLE>
*Period May 1, 2000 (inception) through September 30, 2000.
See accompanying notes.
--------------------------------------------------------------------------------
76
<PAGE> 77
c-------------------------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE PERIOD ENDED SEPTEMBER 30, 1999
<TABLE>
<CAPTION>
SECURITY EQUITY FUND
-------------------------------------------------------
SECURITY TOTAL SOCIAL
GROWTH AND EQUITY GLOBAL RETURN AWARENESS
INCOME FUND SERIES SERIES SERIES SERIES
<S> <C> <C> <C> <C> <C>
INCREASE (DECREASE) IN NET ASSETS FROM
OPERATIONS:
Net investment income (loss)................. $ 1,366,815 $ 505,077 $ (122,839) $ (55,554) $ (124,655)
Net realized gain............................ 1,499,433 32,211,396 3,673,233 454,525 389,442
Unrealized appreciation during the period.... 7,103,219 152,612,833 7,593,805 717,116 3,012,833
------------ -------------- ----------- ---------- -----------
Net increase in net assets resulting from
operations............................... 9,969,467 185,329,306 11,144,199 1,116,087 3,277,620
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income
Class A.................................... (367,013) (3,097,449) (13,695) (47,225) --
Class B.................................... (38,484) -- -- (14,003) --
In excess of net investment income
Class A.................................... -- -- (66,260) -- --
Net realized gain
Class A.................................... (12,948,745) (60,267,479) (1,515,813) (224,998) (154,865)
Class B.................................... (1,659,373) (10,058,359) (1,024,593) (227,702) (112,426)
------------ -------------- ----------- ---------- -----------
Total distributions to shareholders...... (15,013,615) (73,423,287) (2,620,361) (513,928) (267,291)
NET INCREASE FROM CAPITAL SHARE TRANSACTIONS: 4,337,737 83,066,728 9,001,395 46,655 7,068,711
------------ -------------- ----------- ---------- -----------
Total increase (decrease) in net
assets................................. (706,411) 194,972,747 17,525,233 648,814 10,079,040
NET ASSETS:
Beginning of period.......................... 85,628,124 886,584,557 31,559,946 6,598,485 12,863,820
------------ -------------- ----------- ---------- -----------
End of period................................ $84,921,713 $1,081,557,304 $49,085,179 $7,247,299 $22,942,860
============ ============== =========== ========== ===========
Accumulated undistributed net investment
income (loss) at end of period............. $ 1,168,914 $ -- $ (308,258) $ -- $ --
============ ============== =========== ========== ===========
</TABLE>
See accompanying notes.
--------------------------------------------------------------------------------
77
<PAGE> 78
c-------------------------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE PERIOD ENDED SEPTEMBER 30, 1999, EXCEPT AS NOTED
<TABLE>
<CAPTION>
SECURITY EQUITY FUND
----------------------------------------------------------------------
MID CAP SMALL CAP ENHANCED SECURITY
VALUE GROWTH INDEX INTERNATIONAL SELECT 25(R) ULTRA
SERIES SERIES SERIES* SERIES* SERIES* FUND
<S> <C> <C> <C> <C> <C> <C>
INCREASE (DECREASE) IN NET
ASSETS FROM OPERATIONS:
Net investment income (loss).... $ (208,118) $ (25,884) $ (4,731) $ (28,874) $ (142,990) $ (792,211)
Net realized gain (loss)........ 1,382,994 785,644 221,310 (417,768) (368,467) 4,048,648
Unrealized appreciation
(depreciation) during the
period........................ 5,996,566 4,231,813 (639,260) 316,099 1,397,687 33,757,944
----------- ----------- ----------- ---------- ----------- ------------
Net increase (decrease) in net
assets resulting from
operations.................. 7,171,442 4,991,573 (422,681) (130,543) 886,230 37,014,381
DISTRIBUTIONS TO SHAREHOLDERS
FROM:
Net investment income
Class A....................... -- -- -- -- -- --
Class B....................... -- -- -- -- -- --
Class C....................... -- -- -- -- -- --
Net realized gain
Class A....................... (55,560) -- -- -- -- (17,136,006)
Class B....................... (30,703) -- -- -- -- (1,984,512)
Class C....................... -- -- -- -- -- --
----------- ----------- ----------- ---------- ----------- ------------
Total distributions to
shareholders.............. (86,263) -- -- -- -- (19,120,518)
NET INCREASE FROM CAPITAL SHARE
TRANSACTIONS: 9,023,108 11,024,528 22,807,956 7,578,970 30,468,667 13,092,243
----------- ----------- ----------- ---------- ----------- ------------
Total increase in net
assets.................... 16,108,287 16,016,101 22,385,275 7,448,427 31,354,897 30,986,106
----------- ----------- ----------- ---------- ----------- ------------
NET ASSETS:
Beginning of period............. 17,515,582 4,180,957 -- -- -- 73,164,521
----------- ----------- ----------- ---------- ----------- ------------
End of period................... $33,623,869 $20,197,058 $22,385,275 $7,448,427 $31,354,897 $104,150,627
=========== =========== =========== ========== =========== ============
Undistributed net investment
income at end of period....... $ -- $ -- $ -- $ 14,551 $ -- $ --
=========== =========== =========== ========== =========== ============
</TABLE>
*Period January 29, 1999 (inception) through September 30, 1999.
See accompanying notes.
--------------------------------------------------------------------------------
78
<PAGE> 79
c-------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
SELECTED DATA FOR EACH SHARE OF CAPITAL STOCK OUTSTANDING THROUGHOUT EACH PERIOD
SECURITY GROWTH AND INCOME FUND (CLASS A)
<TABLE>
<CAPTION>
FISCAL PERIOD ENDED SEPTEMBER 30
-----------------------------------------------
2000(C) 1999(C) 1998(C) 1997(C) 1996(C)
------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C>
PER SHARE DATA
NET ASSET VALUE BEGINNING OF PERIOD......................... $7.17 $7.68 $11.14 $9.05 $7.93
INCOME FROM INVESTMENT OPERATIONS:
Net Investment Income (Loss)................................ 0.07 0.12 0.13 0.15 0.18
Net Gain (Loss) on Securities (realized and unrealized)..... (0.58) 0.75 (0.87) 2.81 1.37
------- ------- ------- ------- -------
Total from Investment Operations............................ (0.51) 0.87 (0.74) 2.96 1.55
LESS DISTRIBUTIONS:
Dividends (from Net Investment Income)...................... (0.13) (0.04) (0.13) (0.16) (0.16)
Distributions (from Realized Gains)......................... (0.11) (1.34) (2.59) (0.71) (0.27)
------- ------- ------- ------- -------
Total Distributions....................................... (0.24) (1.38) (2.72) (0.87) (0.43)
------- ------- ------- ------- -------
NET ASSET VALUE END OF PERIOD............................... $6.42 $7.17 $7.68 $11.14 $9.05
======= ======= ======= ======= =======
TOTAL RETURN (A)............................................ (7.28%) 12.00% (7.95%) 35.31% 20.31%
RATIOS/SUPPLEMENTAL DATA
Net Assets End of Period (thousands)........................ $60,448 $74,796 $76,371 $91,252 $73,273
Ratio of Expenses to Average Net Assets..................... 1.27% 1.22% 1.21% 1.24% 1.29%
Ratio of Net Investment Income (Loss) to Average Net
Assets.................................................... 0.99% 1.63% 1.49% 1.53% 2.09%
Portfolio Turnover Rate..................................... 144% 98% 144% 124% 69%
</TABLE>
--------------------------------------------------------------------------------
SECURITY GROWTH AND INCOME FUND (CLASS B)
<TABLE>
<CAPTION>
FISCAL PERIOD ENDED SEPTEMBER 30
-----------------------------------------------
2000(C) 1999(C) 1998(C) 1997(C) 1996(C)
------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C>
PER SHARE DATA
NET ASSET VALUE BEGINNING OF PERIOD......................... $6.95 $7.54 $10.99 $8.94 $7.85
INCOME FROM INVESTMENT OPERATIONS:
Net Investment Income (Loss)................................ -- 0.05 0.05 0.05 0.09
Net Gain (Loss) on Securities (realized and unrealized)..... (0.58) 0.73 (0.88) 2.77 1.35
------ ------ ------ ------- ------
Total from Investment Operations............................ (0.58) 0.78 (0.83) 2.82 1.44
LESS DISTRIBUTIONS:
Dividends (from Net Investment Income)...................... (0.05) (0.03) (0.03) (0.06) (0.08)
Distributions (from Realized Gains)......................... (0.11) (1.34) (2.59) (0.71) (0.27)
------ ------ ------ ------- ------
Total Distributions....................................... (0.16) (1.37) (2.62) (0.77) (0.35)
------ ------ ------ ------- ------
NET ASSET VALUE END OF PERIOD............................... $6.21 $6.95 $7.54 $10.99 $8.94
====== ====== ====== ======= ======
TOTAL RETURN (A)............................................ (8.36%) 10.93% (8.95%) 34.01% 19.01%
RATIOS/SUPPLEMENTAL DATA
Net Assets End of Period (thousands)........................ $7,152 $9,829 $9,257 $6,737 $2,247
Ratio of Expenses to Average Net Assets..................... 2.27% 2.22% 2.21% 2.24% 2.29%
Ratio of Net Investment Income (Loss) to Average Net
Assets.................................................... 0.01% 0.63% 0.59% 0.53% 1.09%
Portfolio Turnover Rate..................................... 144% 98% 144% 124% 69%
</TABLE>
--------------------------------------------------------------------------------
79
<PAGE> 80
FINANCIAL HIGHLIGHTS (CONTINUED)
SELECTED DATA FOR EACH SHARE OF CAPITAL STOCK OUTSTANDING THROUGHOUT EACH PERIOD
c-------------------------------------------------------------------------------
SECURITY GROWTH AND INCOME FUND (CLASS C)
<TABLE>
<CAPTION>
FISCAL PERIOD ENDED
SEPTEMBER 30
---------------------
2000(C) 1999(C)(I)
-------- ----------
<S> <C> <C>
PER SHARE DATA
NET ASSET VALUE BEGINNING OF PERIOD......................... $7.11 $6.87
INCOME FROM INVESTMENT OPERATIONS:
Net Investment Income (Loss)................................ (0.01) 0.03
Net Gain (Loss) on Securities (realized and unrealized)..... (0.56) 0.21
------ ------
Total from Investment Operations............................ (0.57) 0.24
LESS DISTRIBUTIONS:
Dividends (from Net Investment Income)...................... (0.11) --
Distributions (from Realized Gains)......................... (0.11) --
------ ------
Total Distributions....................................... (0.22) --
------ ------
NET ASSET VALUE END OF PERIOD............................... $6.32 $7.11
====== ======
TOTAL RETURN (A)............................................ (8.10%) 3.49%
RATIOS/SUPPLEMENTAL DATA
Net Assets End of Period (thousands)........................ $483 $297
Ratio of Expenses to Average Net Assets..................... 2.28% 2.22%
Ratio of Net Investment Income (Loss) to Average Net
Assets.................................................... (0.10%) 0.62%
Portfolio Turnover Rate..................................... 144% 90%
</TABLE>
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
80
<PAGE> 81
FINANCIAL HIGHLIGHTS (CONTINUED)
SELECTED DATA FOR EACH SHARE OF CAPITAL STOCK OUTSTANDING THROUGHOUT EACH PERIOD
c-------------------------------------------------------------------------------
SECURITY EQUITY FUND--EQUITY SERIES (CLASS A)
<TABLE>
<CAPTION>
FISCAL PERIOD ENDED SEPTEMBER 30
----------------------------------------------------
2000(C) 1999(C) 1998(C) 1997(C) 1996(C)
-------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
PER SHARE DATA
NET ASSET VALUE BEGINNING OF PERIOD......................... $9.96 $8.86 $9.09 $7.54 $6.55
INCOME FROM INVESTMENT OPERATIONS:
Net Investment Income (Loss)................................ -- 0.02 0.04 0.04 0.05
Net Gain (Loss) on Securities (realized and unrealized)..... 0.66 1.80 0.56 2.20 1.48
-------- -------- -------- -------- --------
Total from Investment Operations............................ 0.66 1.82 0.60 2.24 1.53
LESS DISTRIBUTIONS:
Dividends (from Net Investment Income)...................... -- (0.04) (0.03) (0.04) (0.06
Distributions (from Realized Gains)......................... (0.36) (0.68) (0.80) (0.65) (0.48)
-------- -------- -------- -------- --------
Total Distributions....................................... (0.36) (0.72) (0.83) (0.69) (0.54)
-------- -------- -------- -------- --------
NET ASSET VALUE END OF PERIOD............................... $10.26 $9.96 $8.86 $9.09 $7.54
======== ======== ======== ======== ========
TOTAL RETURN (A)............................................ 6.64% 20.66% 7.38% 32.08% 24.90%
RATIOS/SUPPLEMENTAL DATA
Net Assets End of Period (thousands)........................ $853,126 $917,179 $773,606 $757,520 $575,680
Ratio of Expenses to Average Net Assets..................... 1.02% 1.02% 1.02% 1.03% 1.04%
Ratio of Net Investment Income (Loss) to Average Net
Assets.................................................... 0.03% 0.19% 0.39% 0.46% 0.75%
Portfolio Turnover Rate..................................... 54% 36% 47% 66% 64%
</TABLE>
--------------------------------------------------------------------------------
SECURITY EQUITY FUND--EQUITY SERIES (CLASS B)
<TABLE>
<CAPTION>
FISCAL PERIOD ENDED SEPTEMBER 30
----------------------------------------------------
2000(C) 1999(C) 1998(C) 1997(C) 1996(C)
-------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
PER SHARE DATA
NET ASSET VALUE BEGINNING OF PERIOD......................... $9.47 $8.52 $8.82 $7.36 $6.43
INCOME FROM INVESTMENT OPERATIONS:
Net Investment Income (Loss)................................ (0.10) (0.08) (0.05) (0.04) (0.02)
Net Gain (Loss) on Securities (realized and unrealized)..... 0.64 1.71 0.55 2.15 1.45
-------- -------- -------- -------- --------
Total from Investment Operations............................ 0.54 1.63 0.50 2.11 1.43
LESS DISTRIBUTIONS:
Dividends (from Net Investment Income)...................... -- -- -- -- (0.02)
Distributions (from Realized Gains)......................... (0.36) (0.68) (0.80) (0.65) (0.48)
-------- -------- -------- -------- --------
Total Distributions....................................... (0.36) (0.68) (0.80) (0.65) (0.50)
-------- -------- -------- -------- --------
NET ASSET VALUE END OF PERIOD............................... $9.65 $9.47 $8.52 $8.82 $7.36
======== ======== ======== ======== ========
TOTAL RETURN (A)............................................ 5.69% 19.23% 6.38% 30.85% 23.57%
RATIOS/SUPPLEMENTAL DATA
Net Assets End of Period (thousands)........................ $156,633 $159,872 $112,978 $89,336 $38,822
Ratio of Expenses to Average Net Assets..................... 2.02% 2.02% 2.02% 2.03% 2.04%
Ratio of Net Investment Income (Loss) to Average Net
Assets.................................................... (0.97%) (0.82%) (0.61%) (0.54%) (0.25%)
Portfolio Turnover Rate..................................... 54% 36% 47% 66% 64%
</TABLE>
--------------------------------------------------------------------------------
81
<PAGE> 82
FINANCIAL HIGHLIGHTS (CONTINUED)
SELECTED DATA FOR EACH SHARE OF CAPITAL STOCK OUTSTANDING THROUGHOUT EACH PERIOD
c-------------------------------------------------------------------------------
SECURITY EQUITY FUND--EQUITY SERIES (CLASS C)
<TABLE>
<CAPTION>
FISCAL PERIOD ENDED
SEPTEMBER 30
---------------------
2000(C) 1999(C)(I)
-------- ----------
<S> <C> <C>
PER SHARE DATA
NET ASSET VALUE BEGINNING OF PERIOD......................... $9.89 $10.13
INCOME FROM INVESTMENT OPERATIONS:
Net Investment Income (Loss)................................ (0.10) (0.05)
Net Gain (Loss) on Securities (realized and unrealized)..... 0.64 (0.19)
------ ------
Total from Investment Operations............................ 0.54 (0.24)
LESS DISTRIBUTIONS:
Dividends (from Net Investment Income)...................... -- --
Distributions (from Realized Gains)......................... (0.36) --
------ ------
Total Distributions....................................... (0.36) --
------ ------
NET ASSET VALUE END OF PERIOD............................... $10.07 $9.89
====== ======
TOTAL RETURN (A)............................................ 5.55% (2.37%)
RATIOS/SUPPLEMENTAL DATA
Net Assets End of Period (thousands)........................ $5,426 $4,507
Ratio of Expenses to Average Net Assets..................... 2.02% 2.02%
Ratio of Net Investment Income (Loss) to Average Net
Assets.................................................... (0.96%) (0.89%)
Portfolio Turnover Rate..................................... 54% 45%
</TABLE>
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
82
<PAGE> 83
FINANCIAL HIGHLIGHTS (CONTINUED)
SELECTED DATA FOR EACH SHARE OF CAPITAL STOCK OUTSTANDING THROUGHOUT EACH PERIOD
c-------------------------------------------------------------------------------
SECURITY EQUITY FUND--GLOBAL SERIES (CLASS A)
<TABLE>
<CAPTION>
FISCAL PERIOD ENDED SEPTEMBER 30
-----------------------------------------------
2000(C) 1999(C) 1998(C) 1997(C) 1996(C)
------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C>
PER SHARE DATA
NET ASSET VALUE BEGINNING OF PERIOD......................... $13.99 $11.23 $13.56 $12.42 $10.94
INCOME FROM INVESTMENT OPERATIONS:
Net Investment Income (Loss)................................ (0.11) 0.01 0.02 0.01 0.01
Net Gain (Loss) on Securities (realized and unrealized)..... 6.47 3.71 (1.19) 2.29 1.87
------- ------- ------- ------- -------
Total from Investment Operations............................ 6.36 3.72 (1.17) 2.30 1.88
LESS DISTRIBUTIONS:
Dividends (from Net Investment Income)...................... -- (0.01) (0.09) (0.38) (0.25)
Distributions (from Realized Gains)......................... (1.49) (0.91) (1.07) (0.78) (0.15)
In Excess of Net Investment Income.......................... -- (0.04) -- -- --
------- ------- ------- ------- -------
Total Distributions....................................... (1.49) (0.96) (1.16) (1.16) (0.40)
------- ------- ------- ------- -------
NET ASSET VALUE END OF PERIOD............................... $18.86 $13.99 $11.23 $13.56 $12.42
======= ======= ======= ======= =======
TOTAL RETURN (A)............................................ 47.04% 34.39% (8.47%) 20.22% 17.73%
RATIOS/SUPPLEMENTAL DATA
Net Assets End of Period (thousands)........................ $60,909 $28,292 $18,941 $24,193 $19,644
Ratio of Expenses to Average Net Assets..................... 1.92% 2.00% 2.00% 2.00% 2.00%
Ratio of Net Investment Income (Loss) to Average Net
Assets.................................................... (0.62%) 0.11% 0.15% 0.07% 0.07%
Portfolio Turnover Rate..................................... 92% 141% 122% 132% 142%
</TABLE>
--------------------------------------------------------------------------------
SECURITY EQUITY FUND--GLOBAL SERIES (CLASS B)
<TABLE>
<CAPTION>
FISCAL PERIOD ENDED SEPTEMBER 30
-----------------------------------------------
2000(C) 1999(C) 1998(C) 1997(C) 1996(C)
------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C>
PER SHARE DATA
NET ASSET VALUE BEGINNING OF PERIOD......................... $13.45 $10.89 $13.22 $12.18 $10.74
INCOME FROM INVESTMENT OPERATIONS:
Net Investment Income (Loss)................................ (0.17) (0.11) (0.10) (0.11) (0.10)
Net Gain (Loss) on Securities (realized and unrealized)..... 6.21 3.58 (1.16) 2.24 1.84
------- ------- ------- ------- ------
Total from Investment Operations............................ 6.04 3.47 (1.26) 2.13 1.74
LESS DISTRIBUTIONS:
Dividends (from Net Investment Income)...................... -- -- -- (0.31) (0.14)
Distributions (from Realized Gains)......................... (1.49) (0.91) (1.07) (0.78) (0.16)
------- ------- ------- ------- ------
Total Distributions....................................... (1.49) (0.91) (1.07) (1.09) (0.30)
------- ------- ------- ------- ------
NET ASSET VALUE END OF PERIOD............................... $18.00 $13.45 $10.89 $13.22 $12.18
======= ======= ======= ======= ======
TOTAL RETURN (A)............................................ 46.53% 33.04% (9.43%) 19.01% 16.57%
RATIOS/SUPPLEMENTAL DATA
Net Assets End of Period (thousands)........................ $30,951 $20,591 $12,619 $13,061 $7,285
Ratio of Expenses to Average Net Assets..................... 2.29% 3.00% 3.00% 3.00% 3.00%
Ratio of Net Investment Income (Loss) to Average Net
Assets.................................................... (0.96%) (0.87%) (0.85%) (0.93%) (0.93%)
Portfolio Turnover Rate..................................... 92% 141% 122% 132% 142%
</TABLE>
--------------------------------------------------------------------------------
83
<PAGE> 84
FINANCIAL HIGHLIGHTS (CONTINUED)
SELECTED DATA FOR EACH SHARE OF CAPITAL STOCK OUTSTANDING THROUGHOUT EACH PERIOD
c-------------------------------------------------------------------------------
SECURITY EQUITY FUND -- GLOBAL SERIES (CLASS C)
<TABLE>
<CAPTION>
FISCAL PERIOD ENDED
SEPTEMBER 30
-----------------------
2000(C) 1999(C)(I)
---------- ----------
<S> <C> <C>
PER SHARE DATA
NET ASSET VALUE BEGINNING OF PERIOD......................... $ 13.90 $ 12.68
INCOME FROM INVESTMENT OPERATIONS:
Net Investment Income (Loss)................................ (0.26) (0.03)
Net Gain (Loss) on Securities (realized and unrealized)..... 6.40 1.25
---------- ----------
Total from Investment Operations............................ 6.14 1.22
LESS DISTRIBUTIONS:
Dividends (from Net Investment Income)...................... -- --
Distributions (from Realized Gains)......................... (1.49) --
---------- ----------
Total Distributions....................................... (1.49) --
---------- ----------
NET ASSET VALUE END OF PERIOD............................... $ 18.55 $ 13.90
========== ==========
TOTAL RETURN (A)............................................ 45.67% 9.62%
RATIOS/SUPPLEMENTAL DATA
Net Assets End of Period (thousands)........................ $ 2,691 $ 202
Ratio of Expenses to Average Net Assets..................... 2.92% 3.00%
Ratio of Net Investment Income (Loss) to Average Net
Assets.................................................... (1.53%) (0.49%)
Portfolio Turnover Rate..................................... 92% 90%
</TABLE>
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
84
<PAGE> 85
FINANCIAL HIGHLIGHTS (CONTINUED)
SELECTED DATA FOR EACH SHARE OF CAPITAL STOCK OUTSTANDING THROUGHOUT EACH PERIOD
c-------------------------------------------------------------------------------
SECURITY EQUITY FUND--TOTAL RETURN SERIES (CLASS A)
<TABLE>
<CAPTION>
FISCAL PERIOD ENDED SEPTEMBER 30
-----------------------------------------------------------------
2000(C) 1999(B)(C)(J) 1998(B)(C) 1997(B)(C)(F) 1996(B)(C)
------- ------------- ---------- ------------- ----------
<S> <C> <C> <C> <C> <C>
PER SHARE DATA
NET ASSET VALUE BEGINNING OF PERIOD....................... $11.69 $10.73 $12.58 $11.06 $10.54
INCOME FROM INVESTMENT OPERATIONS:
Net Investment Income (Loss).............................. (0.07) (0.03) 0.08 0.17 0.25
Net Gain (Loss) on Securities (realized and unrealized)... 0.83 1.90 (0.98) 1.86 0.77
------ ------ ------ ------ ------
Total from Investment Operations.......................... 0.76 1.87 (0.90) 2.03 1.02
LESS DISTRIBUTIONS:
Dividends (from Net Investment Income).................... -- (0.16) (0.20) (0.26) (0.33)
Distributions (from Realized Gains)....................... (0.64) (0.75) (0.75) (0.25) (0.17)
------ ------ ------ ------ ------
Total Distributions..................................... (0.64) (0.91) (0.95) (0.51) (0.50)
------ ------ ------ ------ ------
NET ASSET VALUE END OF PERIOD............................. $11.81 $11.69 $10.73 $12.58 $11.06
====== ====== ====== ====== ======
TOTAL RETURN (A).......................................... 6.49% 17.84% (7.19%) 19.00% 10.01%
RATIOS/SUPPLEMENTAL DATA
Net Assets End of Period (thousands)...................... $3,928 $3,587 $3,294 $3,906 $2,449
Ratio of Expenses to Average Net Assets................... 1.49% 2.00% 2.00% 1.68% 2.00%
Ratio of Net Investment Income (Loss) to Average Net
Assets.................................................. (0.61%) (0.29%) 0.65% 1.52% 2.32%
Portfolio Turnover Rate................................... 55% 121% 45% 79% 75%
</TABLE>
--------------------------------------------------------------------------------
SECURITY EQUITY FUND--TOTAL RETURN SERIES (CLASS B)
<TABLE>
<CAPTION>
FISCAL PERIOD ENDED SEPTEMBER 30
-----------------------------------------------------------------
2000(C) 1999(B)(C)(J) 1998(B)(C) 1997(B)(C)(F) 1996(B)(C)
------- ------------- ---------- ------------- ----------
<S> <C> <C> <C> <C> <C>
PER SHARE DATA
NET ASSET VALUE BEGINNING OF PERIOD....................... $11.56 $10.62 $12.45 $10.97 $10.50
INCOME FROM INVESTMENT OPERATIONS:
Net Investment Income (Loss).............................. (0.19) (0.14) (0.03) 0.07 0.14
Net Gain (Loss) on Securities (realized and unrealized)... 0.82 1.88 (0.96) 1.84 0.77
------ ------ ------ ------ ------
Total from Investment Operations.......................... 0.63 1.74 (0.99) 1.91 0.91
LESS DISTRIBUTIONS:
Dividends (from Net Investment Income).................... -- (0.05) (0.09) (0.18) (0.27)
Distributions (from Realized Gains)....................... (0.64) (0.75) (0.75) (0.25) (0.17)
------ ------ ------ ------ ------
Total Distributions..................................... (0.64) (0.80) (0.84) (0.43) (0.44)
------ ------ ------ ------ ------
NET ASSET VALUE END OF PERIOD............................. $11.55 $11.56 $10.62 $12.45 $10.97
====== ====== ====== ====== ======
TOTAL RETURN (A).......................................... 5.39% 16.68% (7.99%) 17.95% 8.97%
RATIOS/SUPPLEMENTAL DATA
Net Assets End of Period (thousands)...................... $3,903 $3,652 $3,304 $3,851 $2,781
Ratio of Expenses to Average Net Assets................... 2.49% 2.94% 2.94% 2.58% 3.00%
Ratio of Net Investment Income (Loss) to Average Net
Assets.................................................. (1.61%) (1.23%) (0.29%) 0.61% 1.32%
Portfolio Turnover Rate................................... 55% 121% 45% 79% 75%
</TABLE>
--------------------------------------------------------------------------------
85
<PAGE> 86
FINANCIAL HIGHLIGHTS (CONTINUED)
SELECTED DATA FOR EACH SHARE OF CAPITAL STOCK OUTSTANDING THROUGHOUT EACH PERIOD
c-------------------------------------------------------------------------------
SECURITY EQUITY FUND--TOTAL RETURN SERIES (CLASS C)
<TABLE>
<CAPTION>
FISCAL PERIOD ENDED
SEPTEMBER 30
--------------------------
2000(C) 1999(B)(C)(I)(J)
------- ----------------
<S> <C> <C>
PER SHARE DATA
NET ASSET VALUE BEGINNING OF PERIOD......................... $11.58 $ 11.48
INCOME FROM INVESTMENT OPERATIONS:
Net Investment Income (Loss)................................ (0.16) (0.11)
Net Gain (Loss) on Securities (realized and unrealized)..... 0.82 0.21
------ ----------
Total from Investment Operations............................ 0.66 0.10
LESS DISTRIBUTIONS:
Dividends (from Net Investment Income)...................... -- --
Distributions (from Realized Gains)......................... (0.64) --
------ ----------
Total Distributions....................................... (0.64) --
------ ----------
NET ASSET VALUE END OF PERIOD............................... $11.60 $ 11.58
====== ==========
TOTAL RETURN (A)............................................ 5.65% 0.87%
RATIOS/SUPPLEMENTAL DATA
Net Assets End of Period (thousands)........................ $59 $8
Ratio of Expenses to Average Net Assets..................... 2.30% 2.93%
Ratio of Net Investment Income (Loss) to Average Net
Assets.................................................... (1.45%) (1.84%)
Portfolio Turnover Rate..................................... 55% 149%
</TABLE>
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
86
<PAGE> 87
FINANCIAL HIGHLIGHTS (CONTINUED)
SELECTED DATA FOR EACH SHARE OF CAPITAL STOCK OUTSTANDING THROUGHOUT EACH PERIOD
c-------------------------------------------------------------------------------
SECURITY EQUITY FUND--SOCIAL AWARENESS SERIES (CLASS A)
<TABLE>
<CAPTION>
FISCAL PERIOD ENDED SEPTEMBER 30
----------------------------------------------
2000(C) 1999(C) 1998(B)(C) 1997(B)(C)(D)
------- ------- ---------- -------------
<S> <C> <C> <C> <C>
PER SHARE DATA
NET ASSET VALUE BEGINNING OF PERIOD......................... $24.05 $19.37 $17.99 $15.00
INCOME FROM INVESTMENT OPERATIONS:
Net Investment Income (Loss)................................ (0.13) (0.05) -- 0.08
Net Gain (Loss) on Securities (realized and unrealized)..... 2.50 5.09 1.42 2.91
------- ------- ------ ------
Total from Investment Operations............................ 2.37 5.04 1.42 2.99
LESS DISTRIBUTIONS:
Dividends (from Net Investment Income)...................... -- -- (0.04) --
Distributions (from Realized Gains)......................... (0.38) (0.36) -- --
------- ------- ------ ------
Total Distributions....................................... (0.38) (0.36) (0.04) --
------- ------- ------ ------
NET ASSET VALUE END OF PERIOD............................... $26.04 $24.05 $19.37 $17.99
======= ======= ====== ======
TOTAL RETURN (A)............................................ 9.88% 26.12% 7.89% 19.93%
RATIOS/SUPPLEMENTAL DATA
Net Assets End of Period (thousands)........................ $17,702 $13,403 $7,619 $6,209
Ratio of Expenses to Average Net Assets..................... 1.42% 1.42% 1.22% 0.67%
Ratio of Net Investment Income (Loss) to Average Net
Assets.................................................... (0.51%) (0.22%) -- 0.57%
Portfolio Turnover Rate..................................... 26% 26% 41% 38%
</TABLE>
--------------------------------------------------------------------------------
SECURITY EQUITY FUND--SOCIAL AWARENESS SERIES (CLASS B)
<TABLE>
<CAPTION>
FISCAL PERIOD ENDED SEPTEMBER 30
----------------------------------------------
2000(C) 1999(C) 1998(B)(C) 1997(B)(C)(D)
------- ------- ---------- -------------
<S> <C> <C> <C> <C>
PER SHARE DATA
NET ASSET VALUE BEGINNING OF PERIOD......................... $23.35 $19.01 $17.81 $15.00
INCOME FROM INVESTMENT OPERATIONS:
Net Investment Income (Loss)................................ (0.38) (0.30) (0.19) (0.08)
Net Gain (Loss) on Securities (realized and unrealized)..... 2.37 5.00 1.39 2.89
------- ------- ------ ------
Total from Investment Operations............................ 1.99 4.70 1.20 2.81
LESS DISTRIBUTIONS:
Dividends (from Net Investment Income)...................... -- -- -- --
Distributions (from Realized Gains)......................... (0.38) (0.36) -- --
------- ------- ------ ------
Total Distributions....................................... (0.38) (0.36) -- --
------- ------- ------ ------
NET ASSET VALUE END OF PERIOD............................... $24.96 $23.35 $19.01 $17.81
======= ======= ====== ======
TOTAL RETURN (A)............................................ 8.53% 24.81% 6.74% 18.73%
RATIOS/SUPPLEMENTAL DATA
Net Assets End of Period (thousands)........................ $12,633 $9,136 $5,245 $3,641
Ratio of Expenses to Average Net Assets..................... 2.43% 2.51% 2.20% 1.84%
Ratio of Net Investment Income (Loss) to Average Net
Assets.................................................... (1.52%) (1.30%) (0.98%) (0.60%)
Portfolio Turnover Rate..................................... 26% 26% 41% 38%
</TABLE>
--------------------------------------------------------------------------------
87
<PAGE> 88
FINANCIAL HIGHLIGHTS (CONTINUED)
SELECTED DATA FOR EACH SHARE OF CAPITAL STOCK OUTSTANDING THROUGHOUT EACH PERIOD
c-------------------------------------------------------------------------------
SECURITY EQUITY FUND--SOCIAL AWARENESS SERIES (CLASS C)
<TABLE>
<CAPTION>
FISCAL PERIOD ENDED
SEPTEMBER 30
--------------------
2000(C) 1999(C)(I)
------- ----------
<S> <C> <C>
PER SHARE DATA
NET ASSET VALUE BEGINNING OF PERIOD......................... $23.87 $24.47
INCOME FROM INVESTMENT OPERATIONS:
Net Investment Income (Loss)................................ (0.41) (0.22)
Net Gain (Loss) on Securities (realized and unrealized)..... 2.42 (0.38)
------ ------
Total from Investment Operations............................ 2.01 (0.60)
LESS DISTRIBUTIONS:
Dividends (from Net Investment Income)...................... -- --
Distributions (from Realized Gains)......................... (0.38) --
------ ------
Total Distributions....................................... (0.38) --
------ ------
NET ASSET VALUE END OF PERIOD............................... $25.50 $23.87
====== ======
TOTAL RETURN (A)............................................ 8.43% (2.45%)
RATIOS/SUPPLEMENTAL DATA
Net Assets End of Period (thousands)........................ $918 $405
Ratio of Expenses to Average Net Assets..................... 2.55% 2.66%
Ratio of Net Investment Income (Loss) to Average Net
Assets.................................................... (1.64%) (1.46%)
Portfolio Turnover Rate..................................... 26% 33%
</TABLE>
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
88
<PAGE> 89
FINANCIAL HIGHLIGHTS (CONTINUED)
SELECTED DATA FOR EACH SHARE OF CAPITAL STOCK OUTSTANDING THROUGHOUT EACH PERIOD
c-------------------------------------------------------------------------------
SECURITY EQUITY FUND--MID CAP VALUE SERIES (CLASS A)
<TABLE>
<CAPTION>
FISCAL PERIOD ENDED SEPTEMBER 30
----------------------------------------------
2000(C) 1999(C) 1998(B)(C) 1997(B)(C)(E)
------- ------- ---------- -------------
<S> <C> <C> <C> <C>
PER SHARE DATA
NET ASSET VALUE BEGINNING OF PERIOD......................... $16.60 $12.07 $12.95 $10.00
INCOME FROM INVESTMENT OPERATIONS:
Net Investment Income (Loss)................................ (0.04) (0.07) (0.02) 0.05
Net Gain (Loss) on Securities (realized and unrealized)..... 4.89 4.65 (0.53) 2.90
------ ------ ------ ------
Total from Investment Operations............................ 4.85 4.58 (0.55) 2.95
LESS DISTRIBUTIONS:
Dividends (from Net Investment Income)...................... -- -- (0.05) --
Distributions (from Realized Gains)......................... (0.70) (0.05) (0.28) --
------ ------ ------ ------
Total Distributions....................................... (0.70) (0.05) (0.33) --
------ ------ ------ ------
NET ASSET VALUE END OF PERIOD............................... $20.75 $16.60 $12.07 $12.95
====== ====== ====== ======
TOTAL RETURN (A)............................................ 30.46% 38.06% (4.31%) 29.50%
RATIOS/SUPPLEMENTAL DATA
Net Assets End of Period (thousands)........................ $34,458 $22,804 $10,901 $4,631
Ratio of Expenses to Average Net Assets..................... 1.29% 1.33% 1.27% 1.10%
Ratio of Net Investment Income (Loss) to Average Net
Assets.................................................... (0.25%) (0.44%) (0.13%) 1.43%
Portfolio Turnover Rate..................................... 69% 79% 98% 35%
</TABLE>
--------------------------------------------------------------------------------
SECURITY EQUITY FUND--MID CAP VALUE SERIES (CLASS B)
<TABLE>
<CAPTION>
FISCAL PERIOD ENDED SEPTEMBER 30
----------------------------------------------
2000(C) 1999(C) 1998(B)(C) 1997(B)(C)(E)
------- ------- ---------- -------------
<S> <C> <C> <C> <C>
PER SHARE DATA
NET ASSET VALUE BEGINNING OF PERIOD......................... $16.26 $11.94 $12.91 $10.00
INCOME FROM INVESTMENT OPERATIONS:
Net Investment Income (Loss)................................ (0.22) (0.22) (0.15) 0.01
Net Gain (Loss) on Securities (realized and unrealized)..... 4.77 4.59 (0.54) 2.90
------- ------ ------ ------
Total from Investment Operations............................ 4.55 4.37 (0.69) 2.91
LESS DISTRIBUTIONS:
Dividends (from Net Investment Income)...................... -- -- -- --
Distributions (from Realized Gains)......................... (0.70) (0.05) (0.28) --
------- ------ ------ ------
Total Distributions....................................... (0.70) (0.05) (0.28) --
------- ------ ------ ------
NET ASSET VALUE END OF PERIOD............................... $20.11 $16.26 $11.94 $12.91
======= ====== ====== ======
TOTAL RETURN (A)............................................ 29.21% 36.71% (5.38%) 29.10%
RATIOS/SUPPLEMENTAL DATA
Net Assets End of Period (thousands)........................ $14,041 $9,682 $6,615 $3,572
Ratio of Expenses to Average Net Assets..................... 2.32% 2.37% 2.33% 2.26%
Ratio of Net Investment Income (Loss) to Average Net
Assets.................................................... (1.27%) (1.50%) (1.19%) 0.27%
Portfolio Turnover Rate..................................... 69% 79% 98% 35%
</TABLE>
--------------------------------------------------------------------------------
89
<PAGE> 90
FINANCIAL HIGHLIGHTS (CONTINUED)
SELECTED DATA FOR EACH SHARE OF CAPITAL STOCK OUTSTANDING THROUGHOUT EACH PERIOD
c-------------------------------------------------------------------------------
SECURITY EQUITY FUND--MID CAP VALUE SERIES (CLASS C)
<TABLE>
<CAPTION>
FISCAL PERIOD ENDED
SEPTEMBER 30
---------------------
2000(C) 1999(C)(I)
-------- ----------
<S> <C> <C>
PER SHARE DATA
NET ASSET VALUE BEGINNING OF PERIOD......................... $16.51 $14.54
INCOME FROM INVESTMENT OPERATIONS:
Net Investment Income (Loss)................................ (0.22) (0.13)
Net Gain (Loss) on Securities (realized and unrealized)..... 4.80 2.10
------ ------
Total from Investment Operations............................ 4.58 1.97
LESS DISTRIBUTIONS:
Dividends (from Net Investment Income)...................... -- --
Distributions (from Realized Gains)......................... (0.70) --
------ ------
Total Distributions....................................... (0.70) --
------ ------
NET ASSET VALUE END OF PERIOD............................... $20.39 $16.51
====== ======
TOTAL RETURN (A)............................................ 28.93% 13.55%
RATIOS/SUPPLEMENTAL DATA
Net Assets End of Period (thousands)........................ $3,069 $1,138
Ratio of Expenses to Average Net Assets..................... 2.36% 2.38%
Ratio of Net Investment Income (Loss) to Average Net
Assets.................................................... (1.28%) (1.36%)
Portfolio Turnover Rate..................................... 69% 92%
</TABLE>
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
90
<PAGE> 91
FINANCIAL HIGHLIGHTS (CONTINUED)
SELECTED DATA FOR EACH SHARE OF CAPITAL STOCK OUTSTANDING THROUGHOUT EACH PERIOD
c-------------------------------------------------------------------------------
SECURITY EQUITY FUND--SMALL CAP GROWTH SERIES (CLASS A)
<TABLE>
<CAPTION>
FISCAL PERIOD ENDED SEPTEMBER 30
---------------------------------------
2000(B)(C) 1999(B)(C) 1998(B)(C)(G)
---------- ---------- -------------
<S> <C> <C> <C>
PER SHARE DATA
NET ASSET VALUE BEGINNING OF PERIOD......................... $12.98 $8.70 $10.00
INCOME FROM INVESTMENT OPERATIONS:
Net Investment Income (Loss)................................ (0.19) -- (0.03)
Net Gain (Loss) on Securities (realized and unrealized)..... 9.75 4.28 (1.26)
------- ------- -------
Total from Investment Operations............................ 9.56 4.28 (1.29)
LESS DISTRIBUTIONS:
Dividends (from Net Investment Income)...................... -- -- (0.01)
Distributions (from Realized Gains)......................... (0.46) -- --
------- ------- -------
Total Distributions....................................... (0.46) -- (0.01)
------- ------- -------
NET ASSET VALUE END OF PERIOD............................... $22.08 $12.98 $8.70
======= ======= =======
TOTAL RETURN (A)............................................ 74.58% 49.20% (12.95%)
RATIOS/SUPPLEMENTAL DATA
Net Assets End of Period (thousands)........................ $38,172 $16,877 $2,677
Ratio of Expenses to Average Net Assets..................... 1.55% 0.49% 1.39%
Ratio of Net Investment Income (Loss) to Average Net
Assets.................................................... (0.97%) 0.03% (0.35%)
Portfolio Turnover Rate..................................... 318% 361% 366%
</TABLE>
--------------------------------------------------------------------------------
SECURITY EQUITY FUND--SMALL CAP GROWTH SERIES (CLASS B)
<TABLE>
<CAPTION>
FISCAL PERIOD ENDED SEPTEMBER 30
---------------------------------------
2000(B)(C) 1999(B)(C) 1998(B)(C)(G)
---------- ---------- -------------
<S> <C> <C> <C>
PER SHARE DATA
NET ASSET VALUE BEGINNING OF PERIOD......................... $12.69 $8.63 $10.00
INCOME FROM INVESTMENT OPERATIONS:
Net Investment Income (Loss)................................ (0.31) (0.14) (0.13)
Net Gain (Loss) on Securities (realized and unrealized)..... 9.42 4.20 (1.24)
------- ------ -------
Total from Investment Operations............................ 9.11 4.06 (1.37)
LESS DISTRIBUTIONS:
Dividends (from Net Investment Income)...................... -- -- --
Distributions (from Realized Gains)......................... (0.46) -- --
------- ------ -------
Total Distributions....................................... (0.46) -- --
------- ------ -------
NET ASSET VALUE END OF PERIOD............................... $21.34 $12.69 $8.63
======= ====== =======
TOTAL RETURN (A)............................................ 72.70% 47.05% (13.70%)
RATIOS/SUPPLEMENTAL DATA
Net Assets End of Period (thousands)........................ $11,688 $2,430 $1,504
Ratio of Expenses to Average Net Assets..................... 2.44% 1.94% 2.38%
Ratio of Net Investment Income (Loss) to Average Net
Assets.................................................... (1.81%) (1.41%) (1.34%)
Portfolio Turnover Rate..................................... 318% 361% 366%
</TABLE>
--------------------------------------------------------------------------------
91
<PAGE> 92
FINANCIAL HIGHLIGHTS (CONTINUED)
SELECTED DATA FOR EACH SHARE OF CAPITAL STOCK OUTSTANDING THROUGHOUT EACH PERIOD
c-------------------------------------------------------------------------------
SECURITY EQUITY FUND--SMALL CAP GROWTH SERIES (CLASS C)
<TABLE>
<CAPTION>
FISCAL PERIOD ENDED
SEPTEMBER 30
--------------------------
2000(B)(C) 1999(B)(C)(I)
---------- -------------
<S> <C> <C>
PER SHARE DATA
NET ASSET VALUE BEGINNING OF PERIOD......................... $12.86 $11.16
INCOME FROM INVESTMENT OPERATIONS:
Net Investment Income (Loss)................................ (0.35) (0.07)
Net Gain (Loss) on Securities (realized and unrealized)..... 9.69 1.77
------ ------
Total from Investment Operations............................ 9.34 1.70
LESS DISTRIBUTIONS:
Dividends (from Net Investment Income)...................... -- --
Distributions (from Realized Gains)......................... (0.46) --
------ ------
Total Distributions....................................... (0.46) --
------ ------
NET ASSET VALUE END OF PERIOD............................... $21.74 $12.86
====== ======
TOTAL RETURN (A)............................................ 73.54% 15.23%
RATIOS/SUPPLEMENTAL DATA
Net Assets End of Period (thousands)........................ $3,741 $890
Ratio of Expenses to Average Net Assets..................... 2.39% 1.47%
Ratio of Net Investment Income (Loss) to Average Net
Assets.................................................... (1.81%) (0.95%)
Portfolio Turnover Rate..................................... 318% 374%
</TABLE>
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
92
<PAGE> 93
FINANCIAL HIGHLIGHTS (CONTINUED)
SELECTED DATA FOR EACH SHARE OF CAPITAL STOCK OUTSTANDING THROUGHOUT EACH PERIOD
c-------------------------------------------------------------------------------
SECURITY EQUITY FUND--ENHANCED INDEX SERIES (CLASS A)
<TABLE>
<CAPTION>
FISCAL PERIOD ENDED
SEPTEMBER 30
--------------------
2000(C) 1999(C)(H)
------- ----------
<S> <C> <C>
PER SHARE DATA
NET ASSET VALUE BEGINNING OF PERIOD......................... $10.04 $10.00
INCOME FROM INVESTMENT OPERATIONS:
Net Investment Income (Loss)................................ -- 0.03
Net Gain (Loss) on Securities (realized and unrealized)..... 1.37 0.01
------ --------
Total from Investment Operations............................ 1.37 0.04
LESS DISTRIBUTIONS:
Dividends (from Net Investment Income)...................... -- --
Distributions (from Realized Gains)......................... (0.12) --
------ --------
Total Distributions....................................... (0.12) --
------ --------
NET ASSET VALUE END OF PERIOD............................... $11.29 $10.04
====== ========
TOTAL RETURN (A)............................................ 13.65% 0.40%
RATIOS/SUPPLEMENTAL DATA
Net Assets End of Period (thousands)........................ $8,219 $7,589
Ratio of Expenses to Average Net Assets..................... 1.44% 1.48%
Ratio of Net Investment Income (Loss) to Average Net
Assets.................................................... (0.05)% 0.39%
Portfolio Turnover Rate..................................... 73% 68%
</TABLE>
--------------------------------------------------------------------------------
SECURITY EQUITY FUND--ENHANCED INDEX SERIES (CLASS B)
<TABLE>
<CAPTION>
FISCAL PERIOD ENDED
SEPTEMBER 30
---------------------
2000(C) 1999(C)(H)
-------- ----------
<S> <C> <C>
PER SHARE DATA
NET ASSET VALUE BEGINNING OF PERIOD......................... $9.99 $10.00
INCOME FROM INVESTMENT OPERATIONS:
Net Investment Income (Loss)................................ (0.09) (0.02)
Net Gain (Loss) on Securities (realized and unrealized)..... 1.37 0.01
------ ------
Total from Investment Operations............................ 1.28 (0.01)
LESS DISTRIBUTIONS:
Dividends (from Net Investment Income)...................... -- --
Distributions (from Realized Gains)......................... (0.12) --
------ ------
Total Distributions....................................... (0.12) --
------ ------
NET ASSET VALUE END OF PERIOD............................... $11.15 $9.99
====== ======
TOTAL RETURN (A)............................................ 12.82% (0.10%)
RATIOS/SUPPLEMENTAL DATA
Net Assets End of Period (thousands)........................ $10,960 $9,591
Ratio of Expenses to Average Net Assets..................... 2.18% 2.20%
Ratio of Net Investment Income (Loss) to Average Net
Assets.................................................... (0.79%) (0.33%)
Portfolio Turnover Rate..................................... 73% 68%
</TABLE>
--------------------------------------------------------------------------------
93
<PAGE> 94
FINANCIAL HIGHLIGHTS (CONTINUED)
SELECTED DATA FOR EACH SHARE OF CAPITAL STOCK OUTSTANDING THROUGHOUT EACH PERIOD
c-------------------------------------------------------------------------------
SECURITY EQUITY FUND--ENHANCED INDEX SERIES (CLASS C)
<TABLE>
<CAPTION>
FISCAL PERIOD ENDED
SEPTEMBER 30
-----------------------
2000(C) 1999(C)(H)
------- -------------
<S> <C> <C>
PER SHARE DATA
NET ASSET VALUE BEGINNING OF PERIOD......................... $10.00 $10.00
INCOME FROM INVESTMENT OPERATIONS:
Net Investment Income (Loss)................................ (0.09) (0.01)
Net Gain (Loss) on Securities (realized and unrealized)..... 1.37 0.01
------ ------
Total from Investment Operations............................ 1.28 0.00
LESS DISTRIBUTIONS:
Dividends (from Net Investment Income)...................... -- --
Distributions (from Realized Gains)......................... (0.12) --
------ ------
Total Distributions....................................... (0.12) --
------ ------
NET ASSET VALUE END OF PERIOD............................... $11.16 $10.00
====== ======
TOTAL RETURN (A)............................................ 12.69% 0.00%
RATIOS/SUPPLEMENTAL DATA
Net Assets End of Period (thousands)........................ $7,092 $5,205
Ratio of Expenses to Average Net Assets..................... 2.15% 2.05%
Ratio of Net Investment Income (Loss) to Average Net
Assets.................................................... (0.77%) (0.18)
Portfolio Turnover Rate..................................... 73% 68%
</TABLE>
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
94
<PAGE> 95
FINANCIAL HIGHLIGHTS (CONTINUED)
SELECTED DATA FOR EACH SHARE OF CAPITAL STOCK OUTSTANDING THROUGHOUT EACH PERIOD
c-------------------------------------------------------------------------------
SELECT EQUITY FUND--INTERNATIONAL SERIES (CLASS A)
<TABLE>
<CAPTION>
FISCAL PERIOD ENDED
SEPTEMBER 30
--------------------------
2000(B)(C) 1999(B)(C)(H)
---------- -------------
<S> <C> <C>
PER SHARE DATA
NET ASSET VALUE BEGINNING OF PERIOD......................... $9.69 $10.00
INCOME FROM INVESTMENT OPERATIONS:
Net Investment Income (Loss)................................ (0.13) (0.03)
Net Gain (Loss) on Securities (realized and unrealized)..... 1.45 (0.28)
------ ------
Total from Investment Operations............................ 1.32 (0.31)
LESS DISTRIBUTIONS:
Dividends (from Net Investment Income)...................... -- --
Distributions (from Realized Gains)......................... -- --
------ ------
Total Distributions....................................... -- --
------ ------
NET ASSET VALUE END OF PERIOD............................... $11.01 $9.69
====== ======
TOTAL RETURN (A)............................................ 13.62% (3.10%)
RATIOS/SUPPLEMENTAL DATA
Net Assets End of Period (thousands)........................ $4,414 $2,928
Ratio of Expenses to Average Net Assets..................... 2.46% 2.50%
Ratio of Net Investment Income (Loss) to Average Net
Assets.................................................... (1.08%) (0.41%)
Portfolio Turnover Rate..................................... 116% 115%
</TABLE>
--------------------------------------------------------------------------------
SELECT EQUITY FUND--INTERNATIONAL SERIES (CLASS B)
<TABLE>
<CAPTION>
FISCAL PERIOD ENDED
SEPTEMBER 30
--------------------------
2000(B)(C) 1999(B)(C)(H)
---------- -------------
<S> <C> <C>
PER SHARE DATA
NET ASSET VALUE BEGINNING OF PERIOD......................... $9.65 $10.00
INCOME FROM INVESTMENT OPERATIONS:
Net Investment Income (Loss)................................ (0.22) (0.07)
Net Gain (Loss) on Securities (realized and unrealized)..... 1.45 (0.28)
------ ------
Total from Investment Operations............................ 1.23 (0.35)
LESS DISTRIBUTIONS:
Dividends (from Net Investment Income)...................... -- --
Distributions (from Realized Gains)......................... -- --
------ ------
Total Distributions....................................... -- --
------ ------
NET ASSET VALUE END OF PERIOD............................... $10.88 $9.65
====== ======
TOTAL RETURN (A)............................................ 12.75% (3.50%)
RATIOS/SUPPLEMENTAL DATA
Net Assets End of Period (thousands)........................ $2,520 $2,028
Ratio of Expenses to Average Net Assets..................... 3.26% 3.19%
Ratio of Net Investment Income (Loss) to Average Net
Assets.................................................... (1.92%) (1.09%)
Portfolio Turnover Rate..................................... 116% 115%
</TABLE>
--------------------------------------------------------------------------------
95
<PAGE> 96
FINANCIAL HIGHLIGHTS (CONTINUED)
SELECTED DATA FOR EACH SHARE OF CAPITAL STOCK OUTSTANDING THROUGHOUT EACH PERIOD
c-------------------------------------------------------------------------------
SELECT EQUITY FUND--INTERNATIONAL SERIES (CLASS C)
<TABLE>
<CAPTION>
FISCAL PERIOD ENDED
SEPTEMBER 30
--------------------------
2000(B)(C) 1999(B)(C)(H)
---------- -------------
<S> <C> <C>
PER SHARE DATA
NET ASSET VALUE BEGINNING OF PERIOD......................... $9.68 $10.00
INCOME FROM INVESTMENT OPERATIONS:
Net Investment Income (Loss)................................ (0.21) (0.04)
Net Gain (Loss) on Securities (realized and unrealized)..... 1.45 (0.28)
------ ------
Total from Investment Operations............................ 1.24 (0.32)
LESS DISTRIBUTIONS:
Dividends (from Net Investment Income)...................... -- --
Distributions (from Realized Gains)......................... -- --
------ ------
Total Distributions....................................... -- --
------ ------
NET ASSET VALUE END OF PERIOD............................... $10.92 $9.68
====== ======
TOTAL RETURN (A)............................................ 12.81% (3.20%)
RATIOS/SUPPLEMENTAL DATA
Net Assets End of Period (thousands)........................ $3,564 $2,493
Ratio of Expenses to Average Net Assets..................... 3.11% 2.78%
Ratio of Net Investment Income (Loss) to Average Net
Assets.................................................... (1.76%) (0.71%)
Portfolio Turnover Rate..................................... 116% 115%
</TABLE>
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
96
<PAGE> 97
FINANCIAL HIGHLIGHTS (CONTINUED)
SELECTED DATA FOR EACH SHARE OF CAPITAL STOCK OUTSTANDING THROUGHOUT EACH PERIOD
c-------------------------------------------------------------------------------
SELECT EQUITY FUND--SELECT 25(R) SERIES (CLASS A)
<TABLE>
<CAPTION>
FISCAL PERIOD ENDED
SEPTEMBER 30
---------------------
2000(C) 1999(C)(H)
-------- ----------
<S> <C> <C>
PER SHARE DATA
NET ASSET VALUE BEGINNING OF PERIOD......................... $10.53 $10.00
INCOME FROM INVESTMENT OPERATIONS:
Net Investment Income (Loss)................................ (0.09) (0.05)
Net Gain (Loss) on Securities (realized and unrealized)..... 0.90 0.58
------- -------
Total from Investment Operations............................ 0.81 0.53
LESS DISTRIBUTIONS:
Dividends (from Net Investment Income)...................... -- --
Distributions (from Realized Gains)......................... -- --
------- -------
Total Distributions....................................... -- --
------- -------
NET ASSET VALUE END OF PERIOD............................... $11.34 $10.53
======= =======
TOTAL RETURN (A)............................................ 7.69% 5.30%
RATIOS/SUPPLEMENTAL DATA
Net Assets End of Period (thousands)........................ $22,006 $13,975
Ratio of Expenses to Average Net Assets..................... 1.35% 1.48%
Ratio of Net Investment Income (Loss) to Average Net
Assets.................................................... (0.74%) (0.75%)
Portfolio Turnover Rate..................................... 89% 14%
</TABLE>
--------------------------------------------------------------------------------
SELECT EQUITY FUND--SELECT 25(R) SERIES (CLASS B)
<TABLE>
<CAPTION>
FISCAL PERIOD ENDED
SEPTEMBER 30
---------------------
2000(C) 1999(C)(H)
-------- ----------
<S> <C> <C>
PER SHARE DATA
NET ASSET VALUE BEGINNING OF PERIOD......................... $10.52 $10.00
INCOME FROM INVESTMENT OPERATIONS:
Net Investment Income (Loss)................................ (0.17) (0.09)
Net Gain (Loss) on Securities (realized and unrealized)..... 0.87 0.61
------- -------
Total from Investment Operations............................ 0.70 0.52
LESS DISTRIBUTIONS:
Dividends (from Net Investment Income)...................... -- --
Distributions (from Realized Gains)......................... -- --
Total Distributions................................... -- --
------- -------
NET ASSET VALUE END OF PERIOD............................... $11.22 $10.52
======= =======
TOTAL RETURN (A)............................................ 6.65% 5.20%
RATIOS/SUPPLEMENTAL DATA
Net Assets End of Period (thousands)........................ $18,199 $12,938
Ratio of Expenses to Average Net Assets..................... 2.11% 2.19%
Ratio of Net Investment Income (Loss) to Average Net
Assets.................................................... (1.49%) (1.47%)
Portfolio Turnover Rate..................................... 89% 14%
</TABLE>
--------------------------------------------------------------------------------
97
<PAGE> 98
FINANCIAL HIGHLIGHTS (CONTINUED)
SELECTED DATA FOR EACH SHARE OF CAPITAL STOCK OUTSTANDING THROUGHOUT EACH PERIOD
c-------------------------------------------------------------------------------
SELECT EQUITY FUND--SELECT 25(R) SERIES (CLASS C)
<TABLE>
<CAPTION>
FISCAL PERIOD ENDED
SEPTEMBER 30
---------------------
2000(C) 1999(C)(H)
-------- ----------
<S> <C> <C>
PER SHARE DATA
NET ASSET VALUE BEGINNING OF PERIOD......................... $10.55 $10.00
INCOME FROM INVESTMENT OPERATIONS:
Net Investment Income (Loss)................................ (0.17) (0.09)
Net Gain (Loss) on Securities (realized and unrealized)..... 0.88 0.64
------ ------
Total from Investment Operations............................ 0.71 0.55
LESS DISTRIBUTIONS:
Dividends (from Net Investment Income)...................... -- --
Distributions (from Realized Gains)......................... -- --
------ ------
Total Distributions....................................... -- --
------ ------
NET ASSET VALUE END OF PERIOD............................... $11.26 $10.55
====== ======
TOTAL RETURN (A)............................................ 6.73% 5.50%
RATIOS/SUPPLEMENTAL DATA
Net Assets End of Period (thousands)........................ $7,294 $4,442
Ratio of Expenses to Average Net Assets..................... 2.10% 2.07%
Ratio of Net Investment Income (Loss) to Average Net
Assets.................................................... (1.49%) (1.34%)
Portfolio Turnover Rate..................................... 89% 14%
</TABLE>
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
98
<PAGE> 99
FINANCIAL HIGHLIGHTS (CONTINUED)
SELECTED DATA FOR EACH SHARE OF CAPITAL STOCK OUTSTANDING THROUGHOUT EACH PERIOD
c-------------------------------------------------------------------------------
SELECT EQUITY FUND--LARGE CAP GROWTH SERIES (CLASS A)
<TABLE>
<CAPTION>
FISCAL PERIOD
ENDED
SEPTEMBER 30
-------------
2000(C)(K)(L)
-------------
<S> <C>
PER SHARE DATA
NET ASSET VALUE BEGINNING OF PERIOD......................... $10.00
INCOME FROM INVESTMENT OPERATIONS:
Net Investment Income (Loss)................................ (0.05)
Net Gain (Loss) on Securities (realized and unrealized)..... (0.24)
------
Total from Investment Operations............................ (0.29)
LESS DISTRIBUTIONS:
Dividends (from Net Investment Income)...................... --
Distributions (from Realized Gains)......................... --
------
Total Distributions....................................... --
------
NET ASSET VALUE END OF PERIOD............................... $9.71
======
TOTAL RETURN (A)............................................ (2.90%)
RATIOS/SUPPLEMENTAL DATA
Net Assets End of Period (thousands)........................ $2,405
Ratio of Expenses to Average Net Assets..................... 1.92%
Ratio of Net Investment Income (Loss) to Average Net
Assets.................................................... (1.25%)
Portfolio Turnover Rate..................................... 5%
</TABLE>
--------------------------------------------------------------------------------
SELECT EQUITY FUND--LARGE CAP GROWTH SERIES (CLASS B)
<TABLE>
<CAPTION>
FISCAL PERIOD
ENDED
SEPTEMBER 30
-------------
2000(C)(K)(L)
-------------
<S> <C>
PER SHARE DATA
NET ASSET VALUE BEGINNING OF PERIOD......................... $10.00
INCOME FROM INVESTMENT OPERATIONS:
Net Investment Income (Loss)................................ (0.08)
Net Gain (Loss) on Securities (realized and unrealized)..... (0.27)
------
Total from Investment Operations............................ (0.35)
LESS DISTRIBUTIONS:
Dividends (from Net Investment Income)...................... --
Distributions (from Realized Gains)......................... --
Total Distributions................................... --
------
NET ASSET VALUE END OF PERIOD............................... $9.65
======
TOTAL RETURN (A)............................................ (3.50%)
RATIOS/SUPPLEMENTAL DATA
Net Assets End of Period (thousands)........................ $2,039
Ratio of Expenses to Average Net Assets..................... 2.68%
Ratio of Net Investment Income (Loss) to Average Net
Assets.................................................... (2.02%)
Portfolio Turnover Rate..................................... 5%
</TABLE>
--------------------------------------------------------------------------------
99
<PAGE> 100
FINANCIAL HIGHLIGHTS (CONTINUED)
SELECTED DATA FOR EACH SHARE OF CAPITAL STOCK OUTSTANDING THROUGHOUT EACH PERIOD
c-------------------------------------------------------------------------------
SELECT EQUITY FUND--LARGE CAP GROWTH SERIES (CLASS C)
<TABLE>
<CAPTION>
FISCAL PERIOD
ENDED
SEPTEMBER 30
-------------
2000(C)(K)(L)
-------------
<S> <C>
PER SHARE DATA
NET ASSET VALUE BEGINNING OF PERIOD......................... $10.00
INCOME FROM INVESTMENT OPERATIONS:
Net Investment Income (Loss)................................ (0.08)
Net Gain (Loss) on Securities (realized and unrealized)..... (0.27)
------
Total from Investment Operations............................ (0.35)
LESS DISTRIBUTIONS:
Dividends (from Net Investment Income)...................... --
Distributions (from Realized Gains)......................... --
------
Total Distributions....................................... --
------
NET ASSET VALUE END OF PERIOD............................... $9.65
======
TOTAL RETURN (A)............................................ (3.50%)
RATIOS/SUPPLEMENTAL DATA
Net Assets End of Period (thousands)........................ $2,102
Ratio of Expenses to Average Net Assets..................... 2.66%
Ratio of Net Investment Income (Loss) to Average Net
Assets.................................................... (2.00%)
Portfolio Turnover Rate..................................... 5%
</TABLE>
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
100
<PAGE> 101
FINANCIAL HIGHLIGHTS (CONTINUED)
SELECTED DATA FOR EACH SHARE OF CAPITAL STOCK OUTSTANDING THROUGHOUT EACH PERIOD
c-------------------------------------------------------------------------------
SELECT EQUITY FUND--TECHNOLOGY SERIES (CLASS A)
<TABLE>
<CAPTION>
FISCAL PERIOD
ENDED
SEPTEMBER 30
----------------
2000(B)(C)(K)(L)
----------------
<S> <C>
PER SHARE DATA
NET ASSET VALUE BEGINNING OF PERIOD......................... $10.00
INCOME FROM INVESTMENT OPERATIONS:
Net Investment Income (Loss)................................ (0.08)
Net Gain (Loss) on Securities (realized and unrealized)..... (0.59)
------
Total from Investment Operations............................ (0.67)
LESS DISTRIBUTIONS:
Dividends (from Net Investment Income)...................... --
Distributions (from Realized Gains)......................... --
------
Total Distributions....................................... --
------
NET ASSET VALUE END OF PERIOD............................... $9.33
======
TOTAL RETURN (A)............................................ (6.70%)
RATIOS/SUPPLEMENTAL DATA
Net Assets End of Period (thousands)........................ $4,340
Ratio of Expenses to Average Net Assets..................... 2.28%
Ratio of Net Investment Income (Loss) to Average Net
Assets.................................................... (2.05%)
Portfolio Turnover Rate..................................... 148%
</TABLE>
--------------------------------------------------------------------------------
SELECT EQUITY FUND--TECHNOLOGY SERIES (CLASS B)
<TABLE>
<CAPTION>
FISCAL PERIOD
ENDED
SEPTEMBER 30
----------------
2000(B)(C)(K)(L)
----------------
<S> <C>
PER SHARE DATA
NET ASSET VALUE BEGINNING OF PERIOD......................... $10.00
INCOME FROM INVESTMENT OPERATIONS:
Net Investment Income (Loss)................................ (0.11)
Net Gain (Loss) on Securities (realized and unrealized)..... (0.68)
------
Total from Investment Operations............................ (0.79)
LESS DISTRIBUTIONS:
Dividends (from Net Investment Income)...................... --
Distributions (from Realized Gains)......................... --
Total Distributions................................... --
------
NET ASSET VALUE END OF PERIOD............................... $9.21
======
TOTAL RETURN (A)............................................ (7.90%)
RATIOS/SUPPLEMENTAL DATA
Net Assets End of Period (thousands)........................ $1,971
Ratio of Expenses to Average Net Assets..................... 3.03%
Ratio of Net Investment Income (Loss) to Average Net
Assets.................................................... (2.79%)
Portfolio Turnover Rate..................................... 148%
</TABLE>
--------------------------------------------------------------------------------
101
<PAGE> 102
FINANCIAL HIGHLIGHTS (CONTINUED)
SELECTED DATA FOR EACH SHARE OF CAPITAL STOCK OUTSTANDING THROUGHOUT EACH PERIOD
c-------------------------------------------------------------------------------
SELECT EQUITY FUND--TECHNOLOGY SERIES (CLASS C)
<TABLE>
<CAPTION>
FISCAL PERIOD
ENDED
SEPTEMBER 30
----------------
2000(B)(C)(K)(L)
----------------
<S> <C>
PER SHARE DATA
NET ASSET VALUE BEGINNING OF PERIOD......................... $10.00
INCOME FROM INVESTMENT OPERATIONS:
Net Investment Income (Loss)................................ (0.11)
Net Gain (Loss) on Securities (realized and unrealized)..... (0.68)
------
Total from Investment Operations............................ (0.79)
LESS DISTRIBUTIONS:
Dividends (from Net Investment Income)...................... --
Distributions (from Realized Gains)......................... --
------
Total Distributions....................................... --
------
NET ASSET VALUE END OF PERIOD............................... $9.21
======
TOTAL RETURN (A)............................................ (7.90%)
RATIOS/SUPPLEMENTAL DATA
Net Assets End of Period (thousands)........................ $2,276
Ratio of Expenses to Average Net Assets..................... 3.03%
Ratio of Net Investment Income (Loss) to Average Net
Assets.................................................... (2.79%)
Portfolio Turnover Rate..................................... 148%
</TABLE>
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
102
<PAGE> 103
FINANCIAL HIGHLIGHTS (CONTINUED)
SELECTED DATA FOR EACH SHARE OF CAPITAL STOCK OUTSTANDING THROUGHOUT EACH PERIOD
c-------------------------------------------------------------------------------
SECURITY ULTRA FUND (CLASS A)
<TABLE>
<CAPTION>
FISCAL PERIOD ENDED SEPTEMBER 30
------------------------------------------------
2000(C) 1999(C) 1998(C) 1997(C) 1996(C)
-------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C>
PER SHARE DATA
NET ASSET VALUE BEGINNING OF PERIOD......................... $9.19 $7.65 $9.24 $8.25 $8.20
INCOME FROM INVESTMENT OPERATIONS:
Net Investment Income (loss)................................ (0.08) (0.06) (0.06) (0.08) (0.05)
Net Gain (Loss) on Securities (realized and unrealized)..... 6.60 3.51 (1.06) 1.65 1.10
-------- ------ ------- ------ ------
Total from Investment Operations............................ 6.52 3.45 (1.12) 1.57 1.05
LESS DISTRIBUTIONS:
Dividends (from Net Investment Income)...................... -- -- -- -- --
Distributions (from Realized Gains)......................... (0.43) (1.91) (0.47) (0.58) (1.00)
-------- ------ ------- ------ ------
Total Distributions....................................... (0.43) (1.91) (0.47) (0.58) (1.00)
-------- ------ ------- ------ ------
NET ASSET VALUE END OF PERIOD............................... $15.28 $9.19 $7.65 $9.24 $8.25
======== ====== ======= ====== ======
TOTAL RETURN (A)...................................... 72.82% 50.91% (12.45%) 20.57% 15.36%
RATIOS/SUPPLEMENTAL DATA
Net Assets End of Period (thousands)........................ $204,787 $96,238 $67,554 $84,504 $74,230
Ratio of Expenses to Average Net Assets..................... 1.11% 1.21% 1.23% 1.71% 1.31%
Ratio of Net Investment Income (Loss) to Average Net
Assets.................................................... (0.62%) (0.77%) (0.64%) (1.01%) (0.61%)
Portfolio Turnover Rate..................................... 35% 54% 116% 68% 161%
</TABLE>
--------------------------------------------------------------------------------
SECURITY ULTRA FUND (CLASS B)
<TABLE>
<CAPTION>
FISCAL PERIOD ENDED SEPTEMBER 30
-----------------------------------------------
2000(C) 1999(C) 1998(C) 1997(C) 1996(C)
------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C>
PER SHARE DATA
NET ASSET VALUE BEGINNING OF PERIOD......................... $8.54 $7.28 $8.90 $8.03 $8.11
INCOME FROM INVESTMENT OPERATIONS:
Net Investment Income (loss)................................ (0.19) (0.14) (0.14) (0.15) (0.13)
Net Gain (Loss) on Securities (realized and unrealized)..... 6.10 3.31 (1.01) 1.60 1.05
------ ------ ------- ------ ------
Total from Investment Operations............................ 5.91 3.17 (1.15) 1.45 0.92
LESS DISTRIBUTIONS:
Dividends (from Net Investment Income)...................... -- -- -- -- --
Distributions (from Realized Gains)......................... (0.43) (1.91) (0.47) (0.58) (1.00)
------ ------ ------- ------ ------
Total Distributions....................................... (0.43) (1.91) (0.47) (0.58) (1.00)
------ ------ ------- ------ ------
NET ASSET VALUE END OF PERIOD............................... $14.02 $8.54 $7.28 $8.90 $8.03
====== ====== ======= ====== ======
TOTAL RETURN (A)............................................ 71.17% 49.39% (13.30%) 19.58% 13.81%
RATIOS/SUPPLEMENTAL DATA
Net Assets End of Period (thousands)........................ $38,812 $7,818 $5,610 $5,964 $2,698
Ratio of Expenses to Average Net Assets..................... 2.11% 2.21% 2.23% 2.71% 2.31%
Ratio of Net Investment Income (Loss) to Average Net
Assets.................................................... (1.61%) (1.77%) (1.64%) (2.01%) (1.61%)
Portfolio Turnover Rate..................................... 35% 54% 116% 68% 161%
</TABLE>
--------------------------------------------------------------------------------
103
<PAGE> 104
FINANCIAL HIGHLIGHTS (CONTINUED)
SELECTED DATA FOR EACH SHARE OF CAPITAL STOCK OUTSTANDING THROUGHOUT EACH PERIOD
c-------------------------------------------------------------------------------
SELECT ULTRA FUND (CLASS C)
<TABLE>
<CAPTION>
FISCAL PERIOD ENDED
SEPTEMBER 30
---------------------
2000(C) 1999(C)(I)
-------- ----------
<S> <C> <C>
PER SHARE DATA
NET ASSET VALUE BEGINNING OF PERIOD......................... $9.11 $8.20
INCOME FROM INVESTMENT OPERATIONS:
Net Investment Income (Loss)................................ (0.20) (0.07)
Net Gain (Loss) on Securities (realized and unrealized)..... 6.51 0.98
------ ------
Total from Investment Operations............................ 6.31 0.91
LESS DISTRIBUTIONS:
Dividends (from Net Investment Income)...................... -- --
Distributions (from Realized Gains)......................... (0.43) --
------ ------
Total Distributions....................................... (0.43) --
------ ------
NET ASSET VALUE END OF PERIOD............................... $14.99 $9.11
====== ======
TOTAL RETURN (A)............................................ 71.10% 11.10%
RATIOS/SUPPLEMENTAL DATA
Net Assets End of Period (thousands)........................ $3,017 $95
Ratio of Expenses to Average Net Assets..................... 2.11% 2.21%
Ratio of Net Investment Income (Loss) to Average Net
Assets.................................................... (1.61%) (1.75%)
Portfolio Turnover Rate..................................... 35% 54%
</TABLE>
(a) Total return information does not reflect deduction of any sales charges
imposed at the time of purchase for Class A shares or upon redemption for
Class B and C shares.
(b) Fund expenses were reduced by the Investment Manager during the period and
expense ratios absent such reimbursement would have been as follows:
<TABLE>
<CAPTION>
1996 1997 1998 1999 2000
---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
Total Return Series Class A 3.1% 2.4% 2.5% 2.3% N/A
Class B 3.9% 3.3% 3.4% 3.2% N/A
Class C N/A N/A N/A 3.2% N/A
Social Awareness Series Class A N/A 1.7% 1.5% N/A N/A
Class B N/A 2.8% 2.5% N/A N/A
Mid Cap Value Series Class A N/A 1.9% 1.5% N/A N/A
Class B N/A 2.8% 2.6% N/A N/A
Small Cap Growth Series Class A N/A N/A 2.4% 1.5% 1.6%
Class B N/A N/A 3.4% 2.9% 2.5%
Class C N/A N/A N/A 2.5% 2.5%
International Series Class A N/A N/A N/A 4.7% 3.5%
Class B N/A N/A N/A 5.4% 4.3%
Class C N/A N/A N/A 5.0% 4.1%
Technology Series Class A N/A N/A N/A N/A 2.33%
Class B N/A N/A N/A N/A 3.04%
Class C N/A N/A N/A N/A 3.04%
</TABLE>
(c) Net investment income (loss) was computed using average shares outstanding
throughout the period.
(d) Security Social Awareness Series was initially capitalized on November 1,
1996, with a net asset value of $15 per share. Percentage amounts for the
period, except for total return, have been annualized.
(e) Security Mid Cap Value Series was initially capitalized on May 1, 1997,
with a net asset value of $10 per share. Percentage amounts for the period,
except for total return, have been annualized.
(f) Meridian Investment Management Corporation (Meridian) became the
sub-advisor of Total Return Series effective August 1, 1997. Prior to
August 1, 1997 Security Management Company, LLC (SMC) paid
Templeton/Franklin Investment Services, Inc. and Meridian for research
services provided to Total Return Series.
(g) Security Small Cap Growth Series was initially capitalized on October 15,
1997, with a net asset value of $10 per share. Percentage amounts for the
period, except for total return, have been annualized.
(h) Security Enhanced Index Series, Security International Series and Security
Select 25 Series were initially capitalized on January 29, 1999, with a net
asset value of $10 per share. Percentage amounts for the period, except for
total return, have been annualized.
(i) Class "C" Shares were initially offered for sale on January 29, 1999.
Percentage amounts for the period, except total return, have been
annualized.
(j) Prior to May 15, 1999 SMC paid Meridian for sub-advisory services provided
to Total Return Series. Effective May 15, 1999 the sub-advisory contract
with Meridian was terminated and SMC continued to provide advisory services
to the Total Return Series.
(k) Security Large Cap Growth Series and Security Technology Series were
initially capitalized on May 1, 2000, with a net asset value of $10 per
share. Percentage amounts for the period, except for total return, have
been annualized.
(l) Expense ratios, including reimbursements, were calculated without the
reduction for custodian fees earnings credits beginning May 1, 2000 for
Security Large Cap Growth
--------------------------------------------------------------------------------
104
<PAGE> 105
FINANCIAL HIGHLIGHTS (CONTINUED)
SELECTED DATA FOR EACH SHARE OF CAPITAL STOCK OUTSTANDING THROUGHOUT EACH PERIOD
c-------------------------------------------------------------------------------
Series and Security Technology Series. Expense ratios with such reductions
would have been follows:
<TABLE>
<CAPTION>
2000
----
<S> <C> <C>
Large Cap Growth Series Class A 1.85%
Class B 2.61%
Class C 2.60%
Technology Series Class A 2.25%
Class B 3.00%
Class C 3.00%
</TABLE>
--------------------------------------------------------------------------------
105
<PAGE> 106
c-------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2000
1. SIGNIFICANT ACCOUNTING POLICIES
Security Growth and Income, Equity and Ultra Funds (the Funds) are
registered under the Investment Company Act of 1940, as amended, as diversified
open-end management investment companies. The shares of Security Equity Fund are
currently issued in multiple Series, with each Series, in effect, representing a
separate fund. Class A shares are generally sold with a sales charge at the time
of purchase. Class A shares are not subject to a sales charge when they are
redeemed, except that purchases of Class A shares of $1 million or more sold
without a front-end sales charge are subject to a contingent deferred sales
charge if redeemed within one year of purchase. The Funds began offering an
additional class of shares ("B" shares) to the public on October 19, 1993. The
shares are offered without a front-end sales charge but incur additional
class-specific expenses. Redemptions of the shares within five years of
acquisition incur a contingent deferred sales charge. The Funds began offering
an additional class of shares ("C" shares) to the public on January 29, 1999.
The shares are offered without a front-end sales charge but incur additional
class-specific expenses. Redemptions of the shares within one year of
acquisition incur a contingent deferred sales charge. The following is a summary
of the significant accounting policies followed by the Funds in the preparation
of their financial statements.
A. SECURITY VALUATION -- Securities listed or traded on a national
securities exchange are valued on the basis of the last sales price. If there
are no sales on a particular day, then the securities are valued at the last bid
price. If a security is traded on multiple exchanges, its value will be based on
prices from the principal exchange where it is traded. All other securities for
which market quotations are available are valued on the basis of the current bid
price. If there is no bid price or if the bid price is deemed to be
unsatisfactory by the Board of Directors or the Funds' investment manager, then
the securities are valued in good faith by such method as the Board of Directors
determines will reflect the fair market value. The Funds generally will value
short-term debt securities at prices based on market quotations for securities
of similar type, yield, quality and duration, except those securities purchased
with 60 days or less to maturity are valued on the basis of amortized cost which
approximates market value.
Generally, trading in foreign securities markets is substantially completed
each day at various times prior to the close of the New York Stock Exchange. The
values of foreign securities are determined as of the close of such foreign
markets or the close of the New York Stock Exchange, if earlier. All investments
quoted in foreign currency are valued in U.S. dollars on the basis of the
foreign currency exchange rates prevailing at the close of business. The Global
Series' and International Series' investments in foreign securities may involve
risks not present in domestic investments. Since foreign securities may be
denominated in a foreign currency and involve settlement and pay interest or
dividends in foreign currencies, changes in the relationship of these foreign
currencies to the U.S. dollar can significantly affect the value of the
investments and earnings of the Funds. Foreign investments may also subject the
Global Series and International Series to foreign government exchange
restrictions, expropriation, taxation or other political, social or economic
developments, all of which could affect the market and/or credit risk of the
investments.
B. FOREIGN CURRENCY TRANSACTIONS -- The accounting records of the Funds are
maintained in U.S. dollars. All assets and liabilities initially expressed in
foreign currencies are converted into U.S. dollars at prevailing exchange rates.
Purchases and sales of investment securities, dividend and interest income, and
certain expenses are translated at the rates of exchange prevailing on the
respective dates of such transactions.
The Funds do not isolate that portion of the results of operations resulting
from changes in the foreign exchange rates on investments from the fluctuations
arising from changes in the market prices of securities held. Such fluctuations
are included with the net realized and unrealized gain or loss on investments.
Net realized foreign exchange gains or losses arise from sales of portfolio
securities, sales of foreign currencies, and the difference between asset and
liability amounts initially stated in foreign currencies and the U.S. dollar
value of the amounts actually received or paid. Net unrealized foreign exchange
gains or losses arise from changes in the value of portfolio securities and
other assets and liabilities at the end of the reporting period, resulting from
changes in the exchange rates.
C. FORWARD FOREIGN CURRENCY EXCHANGE CONTRACTS -- Global Series and
International Series may enter into forward foreign exchange contracts in order
to manage foreign currency risk from purchase or sale of securities denominated
in foreign currency. These funds may also enter into such contracts to manage
changes in foreign currency exchange rates on portfolio positions. These
contracts are marked to market daily, by recognizing the difference between the
contract exchange rate and the current market rate as unrealized gains or
losses. Realized gains or losses are recognized when contracts are settled and
are reflected in the statement of operations. These contracts involve market
risk in excess of the amount reflected in the balance sheet. The face or
contract amount in U.S. dollars reflects the total exposure these funds have in
that particular currency contract. Losses may arise due to changes in the value
of the foreign currency or if the counterparty does not perform under the
contract.
D. FUTURES -- Growth & Income Fund, Equity Series, Social Awareness Series,
Small Cap Growth Series, Enhanced Index Series, International Series, and Ultra
Fund utilize futures contracts to a limited extent, with the objectives of
maintaining full exposure to the underlying stock market, enhancing returns,
maintaining liquidity, and minimizing transaction costs. These funds may
purchase futures contracts to immediately position incoming cash in the market,
thereby simulating a fully invested position in the underlying index while
maintaining a cash balance for liquidity. In the event of redemptions, the Funds
may pay departing shareholders from its cash balances and reduce their futures
positions accordingly. Returns may be enhanced by purchasing futures contracts
instead of the underlying securities when futures are believed to be priced more
attractively than the underlying securities. The primary risks associated with
the use of futures contracts are imperfect correlation between changes in market
values of stocks contained in the
--------------------------------------------------------------------------------
106
<PAGE> 107
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
SEPTEMBER 30, 2000
c-------------------------------------------------------------------------------
indexes and the prices of futures contracts, and the possibility of an illiquid
market. Futures contracts are valued based upon their quoted daily settlement
prices. Upon entering into a futures contract, the Funds are required to deposit
and maintain as collateral either cash or securities, representing the initial
margin, equal to a certain percentage of the contract value. Subsequent changes
in the value of the contract, or variation margin, are recorded as unrealized
gains or losses. The variation margin is paid or received in cash daily by the
Funds. The Funds realize a gain or loss when the contract is closed or expires.
E. SECURITY TRANSACTIONS AND INVESTMENT INCOME -- Security transactions are
accounted for on the date the securities are purchased or sold. Realized gains
and losses are reported on an identified cost basis. Dividend income less
foreign taxes withheld (if any) plus foreign taxes recoverable (if any) are
recorded on the ex-dividend date. Interest income is recognized on the accrual
basis. Premium and discounts (except original issue discounts) on debt
securities are not amortized.
F. DISTRIBUTIONS TO SHAREHOLDERS -- Distributions to shareholders are
recorded on the ex-dividend date. The character of distributions made during the
year from net investment income or net realized gains may differ from their
ultimate characterization for federal income tax purposes. These differences are
primarily due to differing treatments relating to the expiration of net
operating losses and the recharacterization of foreign currency gains and
losses.
G. TAXES -- The Funds complied with the requirements of the Internal Revenue
Code applicable to regulated investment companies and distributed all of their
taxable net income and net realized gains sufficient to relieve them from all,
or substantially all, federal income, excise and state income taxes. Therefore,
no provision for federal or state income tax is required.
H. USE OF ESTIMATES -- The preparation of financial statements in conformity
with generally accepted accounting principles requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities at the date of the financial statements and the reported amounts of
increases and decreases in net assets from operations during the reporting
period. Actual results could differ from those estimates.
2. MANAGEMENT FEES AND OTHER TRANSACTIONS WITH AFFILIATES
Under terms of the investment advisory contract, Security Management
Company, LLC (SMC) agrees to provide, or arrange for others to provide, all the
services required by the Growth and Income Fund, Equity Series, Global Series,
and Ultra Fund for a single fee, including investment advisory services,
transfer agent services and certain other administrative services. For Growth
and Income Fund, Equity Series and Ultra Fund this fee is equal to 2% of the
first $10 million of the average daily closing value of each Fund's net assets,
1.5% of the next $20 million, and 1% of the remaining net assets of the fund for
the fiscal year. For Global Series this fee is equal to 2% of the first $70
million of the average daily closing value of the series' net assets and 1.5% of
the remaining average net assets of the series for the fiscal year.
Additionally, SMC agrees to assume all of the Funds' expenses, except for its
fee and the expenses of interest, taxes, brokerage commissions and extraordinary
items and Class B and Class C distribution fees. Management fees are payable to
SMC under an investment advisory contract at an annual rate of 0.75% of the
average daily net assets for Total Return, Enhanced Index and Select 25 Series,
1.00% for Social Awareness, Mid Cap Value, Small Cap Growth Series, Large Cap
Growth and Technology Series, and 1.10% for International Series.
SMC also acts as the administrative agent and transfer agent for the funds,
and as such performs administrative functions, transfer agency and dividend
disbursing services, and the bookkeeping, accounting and pricing functions for
each fund. For these services, the Investment Manager receives, from the
International Series an administrative fee equal to .045% of the average daily
net assets of the series plus the greater of .10% of the average net assets for
(i) $30,000 for the year ended January 31, 2000, (ii) $45,000 for the year ended
January 31, 2001 and (iii) $60,000 for the year ended January 31, 2002. For
administrative services provided to the Total Return Series, Social Awareness
Series, Mid Cap Value Series, Small Cap Growth Series, Enhanced Index Series,
Select 25 Series and the Large Cap Growth Series, SMC receives an administrative
fee equal to .09% of the average daily net assets of each series. For transfer
agent services, SMC is paid an annual fixed charge per account as well as a
transaction fee for all shareholder and dividend payments, except from Growth
and Income Fund, Equity Series, Global Series and Ultra Fund.
For the Technology Series, the administrative fee is equal to .045% of the
average daily net assets of the Series plus the greater of .10% of the average
net assets or (i) $30,000 in the year ending April 30, 2001; (ii) $45,000 in the
year ending April 30, 2002 or (iii) $60,000 thereafter.
SMC pays OppenheimerFunds, Inc. an annual fee equal to a percentage of the
average daily closing value of the combined average daily net assets of Global
Series and another fund managed by SMC, SBL Series D, computed on a daily basis
as follows:
<TABLE>
<CAPTION>
Combined Average Daily Net Assets Annual Fees
--------------------------------- -----------
<S> <C>
$0 to $300 Million.......................................... .35%
$300 Million to $750 Million................................ .30%
$750 Million or more........................................ .25%
</TABLE>
--------------------------------------------------------------------------------
107
<PAGE> 108
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
SEPTEMBER 30, 2000
c-------------------------------------------------------------------------------
SMC pays Strong Capital Management, Inc. ("Strong") with respect to Small
Cap Growth Series, an annual fee based on the combined average net assets of the
Series and another fund managed by SMC, SBL Series X. The fee is equal to:
<TABLE>
<CAPTION>
Combined Average Daily Net Assets Annual Fees
--------------------------------- -----------
<S> <C>
Less Than $150 Million...................................... .50%
$150 Million to $500 Million................................ .45%
$500 Million or more........................................ .40%
</TABLE>
Bankers Trust company furnishes investment advisory services to Enhanced
Index Series and International Series. For such services to the Enhanced Index
Series SMC pays Bankers Trust an annual fee equal to a percentage of the average
daily closing value of the combined net assets of Enhanced Index Series and
another fund, managed by SMC, SBL Series H as follows:
<TABLE>
<CAPTION>
Combined Average Daily Net Assets Annual Fees
--------------------------------- -----------
<S> <C>
$0 to $100 Million.......................................... .20%
$100 Million to $300 Million................................ .15%
$300 Million or more........................................ .13%
</TABLE>
SMC will also pay Bankers Trust the following minimum fees with respect to
the Enhanced Index Series: (i) no minimum fee in the first year the Enhanced
Index begins operations; and (ii) $100,000 in the series' second year of
operations; and (iii) $200,000 in the third and following years of the series'
operations. For the services provided to the International Series, SMC pays
Bankers Trust an annual fee equal to a percentage of the average daily closing
value of the combined net assets of International Series and another fund
managed by SMC, SBL Series I, computed on a daily basis as follows:
<TABLE>
<CAPTION>
Combined Average Daily Net Assets Annual Fees
--------------------------------- -----------
<S> <C>
$0 to $200 Million.......................................... .60%
$200 Million or more........................................ .55%
</TABLE>
Wellington Management Company, LLP furnishes investment advisory services to
the Technology Series. For such services, SMC pays Wellington an annual fee
equal to .50% of the average daily closing value of the combined net assets of
Technology Series and Series T of SBL Fund, another fund managed by SMC.
SMC has agreed to limit the total expenses of the Enhanced Index Series and
Select 25 Series to 1.75%, Total Return Series, Social Awareness Series, Mid Cap
Value Series, Small Cap Growth Series, Large Cap Growth Series to 2.00%, and
International Series and the Technology Series to 2.25%, in each case exclusive
of interest, taxes, extraordinary expenses, brokerage fees and commissions and
12b-1 fees. The expense limits other than those for Enhanced Index, Select 25
and International Series are voluntary limits which may be limited at any time
without notice to shareholders. SMC waived management fees for the Small Cap
Growth Series through November 30, 1999.
The Funds have adopted Distribution Plans related to the offering of Class B
and Class C shares pursuant to Rule 12b-1 under the Investment Company Act of
1940 and Small Cap Growth, Enhanced Index, International, Select 25, Large Cap
Growth and the Technology Series have also adopted such a Plan with respect to
their Class A Shares. The plans provide for payments at an annual rate of 1.00%
of the average daily net assets of each Fund's Class B and Class C shares and
0.25% of the average daily net assets of the Small Cap Growth, Enhanced Index,
International, Select 25 Series, Large Cap Growth and the Technology Series
Class A shares.
Deutsche Bank Securities, Inc., an affiliate of the sub-advisor for the
International Series received $628 from brokerage fees on executions of
purchases and sales of portfolio investments.
Security Distributors, Inc. (SDI), a wholly-owned subsidiary of Security
Benefit Group, Inc. and the national distributor of the Funds, received net
underwriting commissions on sales of Class A shares and contingent deferred
sales charges on redemptions
--------------------------------------------------------------------------------
108
<PAGE> 109
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
SEPTEMBER 30, 2000
c-------------------------------------------------------------------------------
occurring within 5 years of the date of purchase of Class B shares and within 1
year of the date of purchase for Class C shares, after allowances to brokers and
dealers, all in the amounts presented in the following table:
<TABLE>
<CAPTION>
SDI BROKER/ BROKER/ BROKER/
UNDERWRITING CDSC CDSC DEALER DEALER DEALER
(CLASS A) (CLASS B) (CLASS C) (CLASS A) (CLASS B) (CLASS C)
------------ --------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C> <C>
Growth and Income Fund:............................ $ 2,728 $ 23,917 $ 1 $ 40,119 $ 50,832 $ 5,236
Security Equity Fund:
Equity Series.................................... 32,889 357,162 10,941 1,225,981 1,373,396 59,033
Global Series.................................... 2,506 26,752 592 71,243 123,223 21,611
Total Return Series.............................. 159 4,769 23 6,472 9,544 333
Social Awareness Series.......................... 1,777 14,850 1,100 99,133 103,091 3,587
Mid Cap Value Series............................. 2,131 16,553 889 83,150 93,390 13,515
Small Cap Growth Series.......................... 6,617 4,915 331 75,095 93,105 22,939
Enhanced Index Series............................ 2,511 21,202 1,437 38,121 62,757 12,006
International Series............................. 1,145 495 74 11,927 10,533 6,301
Select 25 Series................................. 16,845 39,458 3,869 283,894 223,472 28,369
Large Cap Growth Series.......................... 233 12 -- 7,044 20,629 7,058
Technology Series................................ 453 243 -- 9,881 13,975 5,648
Security Ultra Fund:............................... 10,148 17,647 254 147,618 234,166 17,366
</TABLE>
Certain officers and directors of the Funds are also officers and/or
directors of Security Benefit Life Insurance Company and its subsidiaries, which
include SMC and SDI.
3. FEDERAL UNREALIZED APPRECIATION/DEPRECIATION
For federal income tax purposes, the amounts of unrealized appreciation
(depreciation) at September 30, 2000, were as follows:
<TABLE>
<CAPTION>
NET
GROSS GROSS UNREALIZED
UNREALIZED UNREALIZED APPRECIATION
APPRECIATION DEPRECIATION (DEPRECIATION)
------------ ------------ --------------
<S> <C> <C> <C>
Growth and Income Fund...................................... $ 7,722,263 $(13,309,908) $ (5,587,645)
Security Equity Fund:
Equity Series............................................. 374,192,018 (22,997,446) 351,194,572
Global Series............................................. 13,499,409 (4,519,524) 8,979,885
Total Return Series....................................... 1,440,970 (583,143) 857,827
Social Awareness Series................................... 8,391,858 (1,865,151) 6,526,707
Mid Cap Value Series...................................... 13,482,800 (2,493,058) 10,989,742
Small Cap Growth Series................................... 14,523,030 (412,707) 14,110,323
Enhanced Index Series..................................... 3,913,012 (1,977,314) 1,935,698
International Series...................................... 846,886 (497,423) 349,463
Select 25 Series.......................................... 7,534,005 (3,826,285) 3,707,720
Large Cap Growth Series................................... 457,985 (666,036) (208,051)
Technology Series......................................... 476,099 (1,082,508) (606,409)
Security Ultra Fund......................................... 106,595,806 (12,145,580) 94,450,226
</TABLE>
--------------------------------------------------------------------------------
109
<PAGE> 110
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
SEPTEMBER 30, 2000
c-------------------------------------------------------------------------------
4. INVESTMENT TRANSACTIONS
Investment transactions for the year ended September 30, 2000 (excluding
overnight investments and short-term commercial paper), are as follows:
<TABLE>
<CAPTION>
PROCEEDS
PURCHASES FROM SALES
--------- ----------
<S> <C> <C>
Growth and Income Fund...................................... $101,944,698 $110,696,751
Security Equity Fund:
Equity Series............................................. 560,843,681 665,352,678
Global Series............................................. 80,661,299 66,248,242
Total Return Series....................................... 4,383,203 4,233,516
Social Awareness Series................................... 13,710,646 7,195,348
Mid Cap Value Series...................................... 33,895,646 27,230,553
Small Cap Growth Series................................... 135,685,132 117,449,305
Enhanced Index Series..................................... 19,868,822 17,760,175
International Series...................................... 12,909,597 10,963,526
Select 25 Series.......................................... 49,717,133 36,578,853
Large Cap Growth Series................................... 6,566,007 118,323
Technology Series......................................... 13,613,692 4,521,739
Security Ultra Fund......................................... 109,674,728 59,350,303
</TABLE>
5. FORWARD FOREIGN EXCHANGE CONTRACTS
At September 30, 2000, International Series had the following open forward
foreign exchange contracts to buy or sell currency (excluding foreign currency
contracts used for purchase and sale settlements):
<TABLE>
<CAPTION>
NET UNREALIZED
CONTRACTS SETTLEMENT FOREIGN CURRENCY AMOUNT TO BE U.S. $ VALUE APPRECIATION
TO BUY DATE TO BE DELIVERED IN U.S. $ PAID IN U.S. $ AS OF 09/30/00 (DEPRECIATION)
--------- ---------- ------------------------- -------------- -------------- --------------
<S> <C> <C> <C> <C> <C>
European Monetary Unit... 10/16/2000 282,535 $ 250,000 $ 249,466 $ (534)
</TABLE>
6. OPEN FUTURE CONTRACTS
<TABLE>
<CAPTION>
NUMBER OF CONTRACT MARKET UNREALIZED
CURRENCY CONTRACTS EXPIRATION DATE AMOUNT VALUE GAIN/LOSS
-------- --------- --------------- -------- ------ ----------
<S> <C> <C> <C> <C> <C>
ENHANCED INDEX SERIES
S&P 500 E-Mini Future............................. 2 12/14/2000 $ 146,799 $ 145,370 $ (1,429)
S&P 500 Index Future.............................. 8 12/14/2000 3,067,453 2,907,400 (160,053)
---------
$(161,482)
=========
</TABLE>
At September 30, 2000, the market value of assets pledged to cover margin
requirements for open futures contracts was $9,597,282.
--------------------------------------------------------------------------------
110
<PAGE> 111
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
SEPTEMBER 30, 2000
c-------------------------------------------------------------------------------
7. CAPITAL SHARE TRANSACTIONS
The Funds are authorized to issue unlimited number of shares in an unlimited
number of classes. Transactions in the capital shares of the Funds were as
follows:
<TABLE>
<CAPTION>
2000 2000 2000 2000 2000 2000
Shares Amount Shares Amount Shares Amount
Sold Sold Reinvested Reinvested Redeemed Redeemed
---------- ------------ ---------- ----------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Growth & Income Fund
Class A shares........................... 1,009,210 $ 6,523,541 334,927 $ 2,254,392 (2,350,550) $ (15,151,767)
Class B shares........................... 278,673 1,787,298 35,504 232,977 (578,249) (3,612,927)
Class C shares........................... 72,069 460,165 1,771 11,805 (39,137) (249,494)
---------- ------------ --------- ----------- ----------- -------------
Total.................................. 1,359,952 $ 8,771,004 372,202 $ 2,499,174 (2,967,936) $ (19,014,188)
========== ============ ========= =========== =========== =============
Equity Series
Class A shares........................... 15,238,098 $159,026,464 2,954,492 $30,481,483 (27,144,218) $(280,873,595)
Class B shares........................... 6,501,463 64,250,119 643,490 6,291,400 (7,783,050) (76,002,989)
Class C shares........................... 387,617 4,006,316 77,916 814,389 (382,364) (3,966,706)
---------- ------------ --------- ----------- ----------- -------------
Total.................................. 22,127,178 $227,282,899 3,675,898 $37,587,272 (35,309,632) $(360,843,290)
========== ============ ========= =========== =========== =============
Global Series
Class A shares........................... 2,462,327 $ 46,229,349 168,184 $ 2,757,048 (1,423,899) $ (25,970,043)
Class B shares........................... 1,144,475 20,285,235 126,914 1,989,121 (1,082,927) (18,443,388)
Class C shares........................... 134,949 2,527,662 1,680 27,301 (6,103) (112,953)
---------- ------------ --------- ----------- ----------- -------------
Total.................................. 3,741,751 $ 69,042,246 296,778 $ 4,773,470 (2,512,929) $ (44,526,384)
========== ============ ========= =========== =========== =============
Total Return Series
Class A shares........................... 65,822 $ 782,816 16,654 $ 196,238 (56,832) $ (675,711)
Class B shares........................... 37,266 439,913 17,284 200,891 (32,672) (380,528)
Class C shares........................... 4,815 57,237 59 692 (525) (6,310)
---------- ------------ --------- ----------- ----------- -------------
Total.................................. 107,903 $ 1,279,966 33,997 $ 397,821 (90,029) $ (1,062,549)
========== ============ ========= =========== =========== =============
Social Awareness Series
Class A shares........................... 290,347 $ 7,743,854 8,781 $ 225,141 (176,439) $ (4,657,500)
Class B shares........................... 146,061 3,722,266 6,210 154,141 (37,406) (954,285)
Class C shares........................... 27,842 737,958 286 7,240 (9,088) (236,244)
---------- ------------ --------- ----------- ----------- -------------
Total.................................. 464,250 $ 12,204,078 15,277 $ 386,522 (222,933) $ (5,848,029)
========== ============ ========= =========== =========== =============
Mid Cap Value Series
Class A shares........................... 510,359 $ 9,287,405 56,965 $ 907,160 (280,317) $ (4,827,525)
Class B shares........................... 221,880 3,957,700 24,284 377,734 (143,355) (2,401,680)
Class C shares........................... 91,251 1,668,689 2,976 47,000 (12,680) (231,280)
---------- ------------ --------- ----------- ----------- -------------
Total.................................. 823,490 $ 14,913,794 84,225 $ 1,331,894 (436,352) $ (7,460,485)
========== ============ ========= =========== =========== =============
Small Cap Growth Series
Class A shares........................... 1,022,035 $ 22,293,603 32,035 $ 561,850 (625,943) $ (12,618,641)
Class B shares........................... 723,075 14,757,159 2,531 43,258 (369,326) (6,538,157)
Class C shares........................... 128,771 2,639,962 2,240 38,867 (28,187) (553,626)
---------- ------------ --------- ----------- ----------- -------------
Total.................................. 1,873,881 $ 39,690,724 36,806 $ 643,975 (1,023,456) $ (19,710,424)
========== ============ ========= =========== =========== =============
Enhanced Index Series
Class A shares........................... 237,263 $ 2,447,889 7,667 $ 84,510 (272,853) $ (3,053,416)
Class B shares........................... 199,389 2,318,766 10,742 117,646 (186,972) (2,080,793)
Class C shares........................... 137,050 1,592,783 5,675 62,264 (27,751) (310,753)
---------- ------------ --------- ----------- ----------- -------------
Total.................................. 573,702 $ 6,359,438 24,084 $ 264,420 (487,576) $ (5,444,962)
========== ============ ========= =========== =========== =============
International Series
Class A shares........................... 140,827 $ 1,768,064 -- $ -- (42,180) $ (510,492)
Class B shares........................... 37,806 465,637 -- -- (16,359) (189,690)
Class C shares........................... 70,866 840,265 -- -- (2,014) (22,657)
---------- ------------ --------- ----------- ----------- -------------
Total.................................. 249,499 $ 3,073,966 -- $ -- (60,553) $ (722,839)
========== ============ ========= =========== =========== =============
Select 25 Series
Class A shares........................... 1,189,517 $ 13,894,273 -- $ -- (574,931) $ (6,684,023)
Class B shares........................... 783,600 9,067,246 -- -- (391,043) (4,535,961)
Class C shares........................... 393,644 4,533,396 -- -- (166,703) (1,945,794)
---------- ------------ --------- ----------- ----------- -------------
Total.................................. 2,366,761 $ 27,494,915 -- $ -- (1,132,677) $ (13,165,778)
========== ============ ========= =========== =========== =============
Large Cap Growth Series
Class A shares........................... 257,785 $ 2,590,226 -- $ -- (10,076) $ (103,394)
Class B shares........................... 212,322 2,140,185 -- -- (1,032) (10,357)
Class C shares........................... 217,879 2,178,340 -- -- (35) (349)
---------- ------------ --------- ----------- ----------- -------------
Total.................................. 687,986 $ 6,908,751 -- $ -- (11,143) $ (114,100)
========== ============ ========= =========== =========== =============
Technology Series
Class A shares........................... 474,075 $ 4,740,692 -- $ -- (8,829) $ (86,896)
Class B shares........................... 221,002 2,208,003 -- -- (6,929) (70,401)
Class C shares........................... 249,271 2,495,567 -- -- (2,039) (20,710)
---------- ------------ --------- ----------- ----------- -------------
Total.................................. 944,348 $ 9,444,262 -- $ -- (17,797) $ (178,007)
========== ============ ========= =========== =========== =============
Security Ultra Fund
Class A shares........................... 5,814,574 $ 74,604,827 411,416 $ 4,476,586 (3,296,864) $ (41,794,421)
Class B shares........................... 2,510,768 30,361,621 59,870 602,354 (718,043) (8,615,115)
Class C shares........................... 195,926 2,684,227 670 7,207 (5,811) (77,564)
---------- ------------ --------- ----------- ----------- -------------
Total.................................. 8,521,268 $107,650,675 471,956 $ 5,086,147 (4,020,718) $ (50,487,100)
========== ============ ========= =========== =========== =============
<CAPTION>
2000 Total 2000 Total
Increase/Decrease Increase/Decrease
Shares Amount
----------------- -----------------
<S> <C> <C>
Growth & Income Fund
Class A shares........................... (1,006,413) $ (6,373,834)
Class B shares........................... (264,072) (1,592,652)
Class C shares........................... 34,703 222,476
---------- ------------
Total.................................. (1,235,782) $ (7,744,010)
========== ============
Equity Series
Class A shares........................... (8,951,628) ($91,365,648)
Class B shares........................... (638,097) (5,461,470)
Class C shares........................... 83,169 853,999
---------- ------------
Total.................................. (9,506,556) $(95,973,119)
========== ============
Global Series
Class A shares........................... 1,206,612 $ 23,016,354
Class B shares........................... 188,462 3,830,968
Class C shares........................... 130,526 2,442,010
---------- ------------
Total.................................. 1,525,600 $ 29,289,332
========== ============
Total Return Series
Class A shares........................... 25,644 $ 303,343
Class B shares........................... 21,878 260,276
Class C shares........................... 4,349 51,619
---------- ------------
Total.................................. 51,871 $ 615,238
========== ============
Social Awareness Series
Class A shares........................... 122,689 $ 3,311,494
Class B shares........................... 114,865 2,922,122
Class C shares........................... 19,040 508,954
---------- ------------
Total.................................. 256,594 $ 6,742,570
========== ============
Mid Cap Value Series
Class A shares........................... 287,007 $ 5,367,040
Class B shares........................... 102,809 1,933,754
Class C shares........................... 81,547 1,484,409
---------- ------------
Total.................................. 471,363 $ 8,785,203
========== ============
Small Cap Growth Series
Class A shares........................... 428,127 $ 10,236,812
Class B shares........................... 356,280 8,262,260
Class C shares........................... 102,824 2,125,203
---------- ------------
Total.................................. 887,231 $ 20,624,275
========== ============
Enhanced Index Series
Class A shares........................... (27,923) $ (521,017)
Class B shares........................... 23,159 355,619
Class C shares........................... 114,974 1,344,294
---------- ------------
Total.................................. 110,210 $ 1,178,896
========== ============
International Series
Class A shares........................... 98,647 $ 1,257,572
Class B shares........................... 21,447 275,947
Class C shares........................... 68,852 817,608
---------- ------------
Total.................................. 188,946 $ 2,351,127
========== ============
Select 25 Series
Class A shares........................... 614,586 $ 7,210,250
Class B shares........................... 392,557 4,531,285
Class C shares........................... 226,941 2,587,602
---------- ------------
Total.................................. 1,234,084 $ 14,329,137
========== ============
Large Cap Growth Series
Class A shares........................... 247,709 $ 2,486,832
Class B shares........................... 211,290 2,129,828
Class C shares........................... 217,844 2,177,991
---------- ------------
Total.................................. 676,843 $ 6,794,651
========== ============
Technology Series
Class A shares........................... 465,246 $ 4,653,796
Class B shares........................... 214,073 2,137,602
Class C shares........................... 247,232 2,474,857
---------- ------------
Total.................................. 926,551 $ 9,266,255
========== ============
Security Ultra Fund
Class A shares........................... 2,929,126 $ 37,286,992
Class B shares........................... 1,852,595 22,348,860
Class C shares........................... 190,785 2,613,870
---------- ------------
Total.................................. 4,972,506 $ 62,249,722
========== ============
</TABLE>
--------------------------------------------------------------------------------
111
<PAGE> 112
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
SEPTEMBER 30, 2000
c-------------------------------------------------------------------------------
<TABLE>
<CAPTION>
1999 1999 1999 1999 1999 1999
Shares Amount Shares Amount Shares Amount
Sold Sold Reinvested Reinvested Redeemed Redeemed
---------- ------------ ---------- ----------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Growth & Income Fund
Class A shares................... 673,512 $ 5,147,174 1,799,088 $12,417,291 (1,994,458) $ (14,859,162)
Class B shares................... 383,324 2,857,782 247,855 1,670,300 (444,025) (3,216,919)
Class C shares................... 43,144 332,472 0 0 (1,433) (11,201)
---------- ------------ --------- ----------- ----------- -------------
Total.......................... 1,099,980 $ 8,337,428 2,046,943 $14,087,591 (2,439,916) $ (18,087,282)
========== ============ ========= =========== =========== =============
Equity Series
Class A shares................... 13,420,421 $132,649,509 6,045,433 $59,027,585 (14,665,109) $(147,063,933)
Class B shares................... 8,372,638 79,823,484 1,056,640 9,899,655 (5,823,017) (55,932,934)
Class C shares................... 466,193 4,768,942 0 0 (10,366) (105,580)
---------- ------------ --------- ----------- ----------- -------------
Total.......................... 22,259,252 $217,241,935 7,102,073 $68,927,240 (20,498,492) $(203,102,447)
========== ============ ========= =========== =========== =============
Global Series
Class A shares................... 695,668 $ 8,911,418 130,230 $ 1,583,863 (490,657) $ (6,276,602)
Class B shares................... 692,033 8,616,997 86,877 1,024,274 (407,260) (5,056,378)
Class C shares................... 14,520 197,823 0 0 0 0
---------- ------------ --------- ----------- ----------- -------------
Total.......................... 1,402,221 $ 17,726,238 217,107 $ 2,608,137 (897,917) (11,332,980)
========== ============ ========= =========== =========== =============
Total Return Series
Class A shares................... 31,506 $ 368,718 24,537 $ 271,998 (56,089) $ (652,076)
Class B shares................... 27,410 315,455 21,691 239,384 (44,246) (505,377)
Class C shares................... 709 8,553 0 0 0 0
---------- ------------ --------- ----------- ----------- -------------
Total.......................... 59,625 $ 692,726 46,228 $ 511,382 (100,335) $ (1,157,453)
========== ============ ========= =========== =========== =============
Social Awareness Series
Class A shares................... 306,741 $ 7,392,701 6,458 $ 147,295 (149,302) $ (3,600,362)
Class B shares................... 204,928 4,817,870 4,916 109,778 (94,506) (2,217,147)
Class C shares................... 16,960 418,879 0 0 (12) (303)
---------- ------------ --------- ----------- ----------- -------------
Total.......................... 528,629 $ 12,629,450 11,374 $ 257,073 (243,820) $ (5,817,812)
========== ============ ========= =========== =========== =============
Mid Cap Value Series
Class A shares................... 749,287 $ 11,366,515 3,927 $ 54,487 (283,023) $ (4,222,754)
Class B shares................... 177,704 2,663,312 2,087 28,596 (138,360) $ (1,970,978)
Class C shares................... 69,766 1,117,339 0 0 (822) (13,409)
---------- ------------ --------- ----------- ----------- -------------
Total.......................... 996,757 $ 15,147,166 6,014 $ 83,083 (422,205) $ (6,207,141)
========== ============ ========= =========== =========== =============
Small Cap Growth Series
Class A shares................... 1,039,226 $ 10,583,205 0 $ 0 (46,168) $ (479,808)
Class B shares................... 29,971 312,814 0 0 (12,838) (128,933)
Class C shares................... 69,336 738,707 0 0 (127) (1,457)
---------- ------------ --------- ----------- ----------- -------------
Total.......................... 1,138,533 $ 11,634,726 0 $ 0 (59,133) $ (610,198)
========== ============ ========= =========== =========== =============
Enhanced Index Series
Class A shares................... 814,143 $ 8,317,912 0 $ 0 (58,104) $ (609,377)
Class B shares................... 973,729 9,959,395 0 0 (13,517) (140,440)
Class C shares................... 521,068 5,288,712 0 0 (807) (8,246)
---------- ------------ --------- ----------- ----------- -------------
Total.......................... 2,308,940 $ 23,566,019 0 $ 0 (72,428) $ (758,063)
========== ============ ========= =========== =========== =============
International Series
Class A shares................... 307,889 $ 3,015,685 0 0 (5,768) $ (55,982)
Class B shares................... 210,293 2,081,770 0 0 (208) $ (2,000)
Class C shares................... 258,214 2,545,289 0 0 (609) $ (5,792)
---------- ------------ --------- ----------- ----------- -------------
Total.......................... 776,396 $ 7,642,744 0 $ 0 (6,585) $ (63,774)
========== ============ ========= =========== =========== =============
Select 25 Series
Class A shares................... 1,447,176 $ 14,845,141 0 $ 0 (120,570) $ (1,239,696)
Class B shares................... 1,278,626 13,090,317 0 0 (49,213) (515,290)
Class C shares................... 426,772 4,350,090 0 0 (5,870) (61,895)
---------- ------------ --------- ----------- ----------- -------------
Total.......................... 3,152,574 $ 32,285,548 0 $ 0 (175,653) $ (1,816,881)
========== ============ ========= =========== =========== =============
Security Ultra Fund
Class A shares................... 3,546,126 $ 30,558,437 2,215,618 $16,490,845 (4,118,483) $ (35,203,189)
Class B shares................... 881,272 7,056,830 280,843 1,958,316 (1,016,884) (7,863,259)
Class C shares................... 11,687 105,169 0 0 (1,234) (10,906)
---------- ------------ --------- ----------- ----------- -------------
Total.......................... 4,439,085 $ 37,720,436 2,496,461 $18,449,161 (5,136,601) $ (43,077,354)
========== ============ ========= =========== =========== =============
<CAPTION>
1999 1999
Increase/Decrease Increase/Decrease
Shares Amount
----------------- -----------------
<S> <C> <C>
Growth & Income Fund
Class A shares................... 478,142 $ 2,705,303
Class B shares................... 187,154 1,311,163
Class C shares................... 41,711 321,271
--------- -----------
Total.......................... 707,007 $ 4,337,737
========= ===========
Equity Series
Class A shares................... 4,800,745 $44,613,161
Class B shares................... 3,606,261 33,790,205
Class C shares................... 455,827 4,663,362
--------- -----------
Total.......................... 8,862,833 $83,066,728
========= ===========
Global Series
Class A shares................... 335,241 $ 4,218,679
Class B shares................... 371,650 4,584,893
Class C shares................... 14,520 197,823
--------- -----------
Total.......................... 721,411 $ 9,001,395
========= ===========
Total Return Series
Class A shares................... (46) $ (11,360)
Class B shares................... 4,855 49,462
Class C shares................... 709 8,553
--------- -----------
Total.......................... 5,518 $ 46,655
========= ===========
Social Awareness Series
Class A shares................... 163,896 $ 3,939,634
Class B shares................... 115,339 2,710,501
Class C shares................... 16,948 418,576
--------- -----------
Total.......................... 296,183 $ 7,068,711
========= ===========
Mid Cap Value Series
Class A shares................... 470,191 $ 7,198,248
Class B shares................... 41,431 720,930
Class C shares................... 68,944 1,103,930
--------- -----------
Total.......................... 580,566 $ 9,023,108
========= ===========
Small Cap Growth Series
Class A shares................... 993,058 $10,103,396
Class B shares................... 17,133 183,882
Class C shares................... 69,209 737,250
--------- -----------
Total.......................... 1,079,400 $11,024,528
========= ===========
Enhanced Index Series
Class A shares................... 756,039 $ 7,708,535
Class B shares................... 960,212 9,818,955
Class C shares................... 520,261 5,280,466
--------- -----------
Total.......................... 2,236,512 $22,807,956
========= ===========
International Series
Class A shares................... 302,121 $ 2,959,703
Class B shares................... 210,085 2,079,770
Class C shares................... 257,605 2,539,497
--------- -----------
Total.......................... 769,811 $ 7,578,970
========= ===========
Select 25 Series
Class A shares................... 1,326,606 $13,605,445
Class B shares................... 1,229,413 12,575,027
Class C shares................... 420,902 4,288,195
--------- -----------
Total.......................... 2,976,921 $30,468,667
========= ===========
Security Ultra Fund
Class A shares................... 1,643,261 $11,846,093
Class B shares................... 145,231 1,151,887
Class C shares................... 10,453 94,263
--------- -----------
Total.......................... 1,798,945 $13,092,243
========= ===========
</TABLE>
--------------------------------------------------------------------------------
112
<PAGE> 113
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
SEPTEMBER 30, 2000
c-------------------------------------------------------------------------------
8. FEES PAID INDIRECTLY
The funds have directed certain portfolio trades to brokers who paid a
portion of each Fund's expenses. Fund expenses were reduced as indicated in the
table below:
<TABLE>
<CAPTION>
Year Year
Ended 9/30/00 Ended 9/30/99
------------- -------------
<S> <C> <C>
Growth and Income Fund...................................... $ 150 $ 670
Equity Series............................................... 2,044 7,860
Total Return Series......................................... 14 54
Social Awareness Series..................................... 46 135
Mid Cap Value Series........................................ 59 183
Select 25 Series............................................ 63 90
Ultra Fund.................................................. 226 690
------ ------
$2,602 $9,682
====== ======
</TABLE>
9. OPTIONS WRITTEN
The following options written were outstanding for Security Ultra Fund at
September 30, 2000:
PUT OPTIONS WRITTEN
<TABLE>
<CAPTION>
Expiration Exercise Number of Market
Common Stock Date Price Contracts Value
------------ ---------- -------- --------- ----------
<S> <C> <C> <C> <C>
Alpha Industries, Inc. ..................................... 11/20/2000 35.00 345 $ 181,125
Ingersoll-Rand Company...................................... 10/23/2000 40.00 335 205,187
Lernout En Hauspie Speech Products N.V. .................... 10/23/2000 30.00 372 618,450
Phelps Dodge Corporation.................................... 10/23/2000 40.00 280 22,750
Ultramar Diamond Shamrock Corporation....................... 11/20/2000 25.00 490 58,188
----- ----------
Total put options outstanding (premiums received,
$406,931)................................................. 1,822 $1,085,700
===== ==========
</TABLE>
CALL OPTIONS WRITTEN
<TABLE>
<CAPTION>
Expiration Exercise Number of Market
Common Stock Date Price Contracts Value
------------ ---------- -------- --------- ----------
<S> <C> <C> <C> <C>
Affymetrix, Inc. ........................................... 10/23/2000 75.00 180 $ 0
Anadarko Petroleum Corporation.............................. 10/23/2000 65.00 172 56,760
Apache Corporation.......................................... 01/22/2001.. 65.00 180 78,750
Cheesecake Factory, Inc. ................................... 10/23/2000 35.00 320 168,000
Northern Trust Corporation.................................. 01/22/2001 90.00 136 76,500
Winn-Dixie Stores, Inc. .................................... 10/23/2000.. 15.00 444 13,875
----- ----------
Total call options outstanding (premiums received,
$475,364)................................................. 1,432 $ 393,885
===== ==========
</TABLE>
Transactions in options written for Security Ultra Fund for the period ended
September 30, 2000 were as follows:
CALL OPTIONS WRITTEN
<TABLE>
<CAPTION>
Number of Premium
Contracts Amount
--------- ----------
<S> <C> <C>
Balance at October 1, 1999.................................. -- $ --
Opened...................................................... 4,523 1,622,528
Bought Back................................................. (381) (117,578)
Expired..................................................... (1,986) (742,580)
Exercised................................................... (724) (287,006)
------ ----------
Balance at September 30, 2000............................... 1,432 $ 475,364
====== ==========
</TABLE>
--------------------------------------------------------------------------------
113
<PAGE> 114
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
SEPTEMBER 30, 2000
c-------------------------------------------------------------------------------
PUT OPTIONS WRITTEN
<TABLE>
<CAPTION>
Number of Premium
Contracts Amount
--------- ----------
<S> <C> <C>
Balance at October 1, 1999.................................. -- $ --
Opened...................................................... 9,391 1,607,473
Bought Back................................................. (256) (106,153)
Expired..................................................... (5,220) (852,727)
Exercised................................................... (2,093) (241,662)
------ ----------
Balance at September 30, 2000............................... 1,822 $ 406,931
====== ==========
</TABLE>
The following options written were outstanding for Mid Cap Value Series at
September 30, 2000:
PUT OPTIONS WRITTEN
<TABLE>
<CAPTION>
Expiration Exercise Number of Market
Common Stock Date Price Contracts Value
------------ ---------- -------- --------- --------
<S> <C> <C> <C> <C>
CSX Corporation............................................. 10/20/2000 25.00 95 $ 27,312
Ingersoll-Rand Company...................................... 10/20/2000 40.00 65 39,813
Maxwell Technologies, Inc. ................................. 10/20/2000 15.00 174 3,263
Newmont Mining Corporation.................................. 10/20/2000 17.50 136 13,600
Profit Recovery Group International, Inc. .................. 10/20/2000 10.00 238 17,850
Ultramar Diamond Shamrock Corporation....................... 11/17/2000 25.00 104 12,350
--- --------
Total put options outstanding (premiums received,
$92,801).................................................. 812 $114,188
=== ========
</TABLE>
CALL OPTIONS WRITTEN
<TABLE>
<CAPTION>
Expiration Exercise Number of Market
Common Stock Date Price Contracts Value
------------ ---------- -------- --------- --------
<S> <C> <C> <C> <C>
Anadarko Petroleum Corporation.............................. 10/20/2000 65.00 42 $ 13,860
Apache Corporation.......................................... 01/19/2001.. 65.00 37 16,187
CVS Corporation............................................. 10/20/2000 40.00 60 37,500
--- --------
Total call options outstanding (premiums received,
$51,644).................................................. 139 $ 67,547
=== ========
</TABLE>
Transactions in options written for Mid Cap Value Series for the period
ended September 30, 2000 were as follows:
CALL OPTIONS WRITTEN
<TABLE>
<CAPTION>
Number of Premium
Contracts Amount
--------- --------
<S> <C> <C>
Balance at October 1, 1999.................................. -- $ --
Opened...................................................... 580 129,070
Bought Back................................................. -- --
Expired..................................................... (441) (77,426)
Exercised................................................... -- --
---- --------
Balance at September 30, 2000............................... 139 $ 51,644
==== ========
</TABLE>
--------------------------------------------------------------------------------
114
<PAGE> 115
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
SEPTEMBER 30, 2000
c-------------------------------------------------------------------------------
PUT OPTIONS WRITTEN
<TABLE>
<CAPTION>
Number of Premium
Contracts Amount
--------- ---------
<S> <C> <C>
Balance at October 1, 1999.................................. -- $ --
Opened...................................................... 2,396 288,518
Bought Back................................................. -- --
Expired..................................................... (1,080) (149,656)
Exercised................................................... (504) (46,061)
------ ---------
Balance at September 30, 2000............................... 812 $ 92,801
====== =========
</TABLE>
The following options written were outstanding for International Series at
September 30, 2000:
PUT OPTIONS WRITTEN
<TABLE>
<CAPTION>
Expiration Exercise Number of Market
Currency Date Price Contracts Value
-------- ---------- -------- --------- ------
<S> <C> <C> <C> <C>
European Monetary Unit...................................... 10/28/2000 0.86 250,000 $1,250
------- ------
Total put options outstanding (premiums received, $2,550)... 250,000 $1,250
======= ======
</TABLE>
Transactions in options written for International Series for the period
ended September 30, 2000 were as follows:
CALL OPTIONS WRITTEN
<TABLE>
<CAPTION>
Number of Premium
Contracts Amount
---------- --------
<S> <C> <C>
Balance at October 1, 1999.................................. -- $ --
Opened...................................................... 2,598,064 20,402
Bought Back................................................. (400,000) (3,640)
Expired..................................................... (2,198,064) (16,762)
Exercised................................................... -- --
---------- --------
Balance at September 30, 2000............................... -- $ --
========== ========
</TABLE>
PUT OPTIONS WRITTEN
<TABLE>
<CAPTION>
Number of Premium
Contracts Amount
---------- --------
<S> <C> <C>
Balance at October 1, 1999.................................. -- $ --
Opened...................................................... 3,050,000 13,871
Bought Back................................................. -- --
Expired..................................................... (2,800,000) (11,321)
Exercised................................................... -- --
---------- --------
Balance at September 30, 2000............................... 250,000 $ 2,550
========== ========
</TABLE>
--------------------------------------------------------------------------------
115
<PAGE> 116
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
SEPTEMBER 30, 2000
c-------------------------------------------------------------------------------
10. FEDERAL TAX MATTERS
The fund's designate as capital gain dividends paid during the fiscal year
ended September 30, 2000 for the purpose of the dividends paid deduction on each
Fund's federal income tax return as follows:
<TABLE>
<S> <C>
Growth and Income Fund...................................... $ 1,338,128
Security Equity Fund:
Equity Series............................................. 39,544,699
Global Series............................................. 1,536,355
Total Return Series....................................... 397,514
Social Awareness Series................................... 395,063
Mid Cap Value Series...................................... 1,366,746
Small Cap Growth Series................................... 15,380
Enhanced Index Series..................................... 116,687
International Series...................................... --
Select 25 Series.......................................... --
Large Cap Growth Series................................... --
Technology Series......................................... --
Security Ultra Fund......................................... 2,331,302
</TABLE>
In accordance with the provisions of the Internal Revenue Code, the
percentage of ordinary dividends (including net short-term capital gains)
attributable to the fiscal year ended September 30, 2000, which qualify for the
dividends received deduction for corporate shareholders are as follows.
<TABLE>
<S> <C>
Growth and Income Fund...................................... 100%
Security Equity Fund:
Equity Series............................................. 0%
Global Series............................................. 2%
Total Return Series....................................... 0%
Social Awareness Series................................... 0%
Mid Cap Value Series...................................... 19%
Small Cap Growth Series................................... 2%
Enhanced Index Series..................................... 100%
International Series...................................... 0%
Select 25 Series.......................................... 0%
Large Cap Growth Series................................... 0%
Technology Series......................................... 0%
Security Ultra Fund......................................... 44%
</TABLE>
At September 30, 2000, the Growth and Income Fund and Security Equity Fund
Select 25 Series have capital loss carryforwards of $727,563 (expires in 2008)
and $368,467 (expires in 2008), respectively.
--------------------------------------------------------------------------------
116
<PAGE> 117
c-------------------------------------------------------------------------------
REPORT OF INDEPENDENT AUDITORS
THE SHAREHOLDERS AND BOARD OF DIRECTORS
SECURITY GROWTH AND INCOME FUND, SECURITY EQUITY FUND AND SECURITY ULTRA FUND
We have audited the accompany statements of assets and liabilities of Security
Growth and Income Fund, Security Equity Fund (comprised of the Equity, Global,
Total Return, Social Awareness, Mid Cap Value, Small Cap Growth, Enhanced Index,
International, Select 25, Large Cap Growth and Technology Series) and Security
Ultra Fund (the Funds), including the schedules of investments, as of September
30, 2000, and the related statements of operations, changes in net assets and
financial highlights for the periods indicated therein. These financial
statements and financial highlights are the responsibility of the Funds'
management. Our responsibility is to express an opinion on these financial
statements and financial highlights based on our audits.
We conducted our audits in accordance with auditing standards generally accepted
in the United States. Those standards require that we plan and perform the audit
to obtain reasonable assurance about whether the financial statements and
financial highlights are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements and financial highlights. Our procedures included
confirmation of securities owned as of September 30, 2000, by correspondence
with the custodians and brokers. As to certain securities relating to
uncompleted transactions, we performed other audit procedures. An audit also
includes assessing the accounting principles used and significant estimates made
by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of each
of the respective entities/series constituting the Funds at September 30, 2000,
and the results of their operations, the changes in their net assets and their
financial highlights for the periods indicated above in conformity with
accounting principles generally accepted in the United States.
/s/ ERNST & YOUNG LLP
Kansas City, Missouri
November 10, 2000
--------------------------------------------------------------------------------
117
<PAGE> 118
SHAREHOLDER UPDATE
SEPTEMBER 30, 2000
ANNUAL MEETING RESULTS
An annual meeting of the stockholders of Security Equity Fund, Security
Growth & Income Fund and the Security Ultra Fund was held on January 26, 2000.
Each matter voted upon at that meeting, as well as the number of votes cast for,
against or withheld, and the number of abstentions with respect to such matters
are set forth below:
(1) The election of six directors to serve on the Board of Directors of the
Funds until the next annual meeting, if any, or until their successors shall
have been duly elected and qualified. The following votes were cast regarding
this matter.
(a) Security Equity Fund
<TABLE>
<CAPTION>
Votes
Votes Against/
Directors For Abstentions
--------- ----- -----------
<S> <C> <C>
Donald A. Chubb, Jr. ............ 79,175,606 2,011,887
John D. Cleland.................. 79,192,259 1,995,234
Penny A. Lumpkin................. 79,114,078 2,073,415
Mark L. Morris, Jr. ............. 79,106,728 2,080,765
Maynard F. Oliverius............. 79,109,217 2,078,276
James R. Schmank................. 79,182,149 2,005,345
</TABLE>
(b) Security Growth & Income Fund
<TABLE>
<CAPTION>
Votes
Votes Against/
Directors For Abstentions
--------- ----- -----------
<S> <C> <C>
Donald A. Chubb, Jr. ............. 8,129,063 105,435
John D. Cleland................... 8,134,456 100,043
Penny A. Lumpkin.................. 8,131,081 103,418
Mark L. Morris, Jr. .............. 8,126,750 107,749
Maynard F. Oliverius.............. 8,127,525 106,973
James R. Schmank.................. 8,133,412 101,087
</TABLE>
(c) Security Ultra Fund
<TABLE>
<CAPTION>
Votes
Votes Against/
Directors For Abstentions
--------- ----- -----------
<S> <C> <C>
Donald A. Chubb, Jr. ............. 7,853,199 129,895
John D. Cleland................... 7,853,895 129,199
Penny A. Lumpkin.................. 7,855,758 127,336
Mark L. Morris, Jr. .............. 7,828,446 154,649
Maynard F. Oliverius.............. 7,851,952 131,143
James R. Schmank.................. 7,858,426 124,668
</TABLE>
(2) The ratification of Ernst & Young LLP as the independent accountants for
the Funds. The following votes were cast regarding this matter.
<TABLE>
<CAPTION>
Votes
Votes Against/
For Abstentions
----- -----------
<S> <C> <C>
Security Equity Fund............. 78,379,645 2,807,849
Security Growth & Income Fund.... 7,972,437 262,062
Security Ultra Fund.............. 7,758,326 224,768
</TABLE>
(3) The approval of an arrangement and new investment advisory contract that
would permit Security Management Company, LLC, the Funds investment advisor,
with Board approval, to enter into or amend sub-advisory agreements without
stockholder approval. The following votes were cast regarding this matter:
<TABLE>
<CAPTION>
Votes
Votes Against/
For Abstentions
----- -----------
<S> <C> <C>
(a) Security Equity Fund
Equity Series 57,460,002 13,460,322
Global Series 1,634,174 169,362
Total Return Series 436,999 22,394
Social Awareness Series 494,489 214,875
Mid Cap Value Series 1,076,472 323,568
Small Cap Growth Series 1,233,181 28,295
Enhanced Index Series 1,338,841 557,169
International Series 658,233 72,871
Select 25 Series 1,348,942 657,305
(b) Security Growth & Income Fund 7,276,586 957,913
(c) Security Ultra Fund 7,185,530 797,564
</TABLE>
(4) The approval of the Brokerage Enhancement Plan pursuant to Rule 12b-1
under the Investment Company Act of 1940, and a new investment advisory contract
that would permit the implementation of the Plan. The following votes were cast
regarding this matter:
<TABLE>
<CAPTION>
Votes
Votes Against/
For Abstentions
----- -----------
<S> <C> <C>
(a) Security Equity Fund
Equity Series 58,102,524 12,817,801
Global Series 1,662,754 140,782
Total Return Series 436,999 22,394
Social Awareness Series 500,734 208,629
Mid Cap Value Series 1,076,472 323,568
Small Cap Growth Series 1,233,181 28,295
Enhanced Index Series 1,338,841 557,169
International Series 658,233 72,871
Select 25 Series 1,348,942 657,304
(b) Security Growth & Income Fund 7,332,736 901,762
(c) Security Ultra Fund 7,212,720 770,374
</TABLE>
--------------------------------------------------------------------------------
118
<PAGE> 119
SHAREHOLDER UPDATE (CONTINUED)
SEPTEMBER 30, 2000
(5) The approval of the proposed change to the Funds fundamental policies.
The following votes were cast regarding the following issues relating to the
fundamental policies:
(a) To amend the Fund's fundamental investment limitation concerning
diversification.
<TABLE>
<CAPTION>
Votes
Votes Against/
For Abstentions
----- -----------
<S> <C> <C>
Series of Security Equity Fund
Equity Series................ 58,733,693 12,186,632
Total Return Series.......... 442,705 16,687
Social Awareness Series...... 495,855 213,508
Mid Cap Value Series......... 1,029,891 370,149
Small Cap Growth Series...... 1,235,768 25,708
Security Growth & Income
Fund....................... 7,403,810 830,689
Security Ultra Fund.......... 7,289,912 693,182
</TABLE>
(b) To amend the Funds fundamental investment limitation concerning share
ownership of any one issuer.
<TABLE>
<CAPTION>
Votes
Votes Against/
For Abstentions
----- -----------
<S> <C> <C>
Series of Security Equity Fund
Equity Series................ 58,697,764 12,222,560
Global Series................ 1,656,889 146,647
Total Return Series.......... 442,705 16,687
Social Awareness Series...... 496,153 213,210
Mid Cap Value Series......... 1,028,935 371,105
Small Cap Growth Series...... 1,235,768 25,708
Enhanced Index Series........ 1,339,453 556,557
International Series......... 657,285 73,819
Select 25 Series............. 1,373,734 632,513
Security Growth & Income Fund.... 7,403,496 831,003
Security Ultra Fund.............. 7,291,196 691,898
</TABLE>
(c) To eliminate the Funds fundamental investment limitation concerning
investing for control of portfolio companies.
<TABLE>
<CAPTION>
Votes
Votes Against/
For Abstentions
----- -----------
<S> <C> <C>
Series of Security Equity Fund
Equity Series................ 58,675,402 12,244,923
Global Series................ 1,657,009 146,527
Total Return Series.......... 442,705 16,687
Social Awareness Series...... 495,101 214,262
Mid Cap Value Series......... 1,029,891 370,149
Small Cap Growth Series...... 1,235,753 25,722
Enhanced Index Series........ 1,335,826 560,184
International Series......... 657,285 73,819
Select 25 Series............. 1,375,645 630,602
Security Growth & Income Fund.... 7,400,448 834,051
Security Ultra Fund.............. 7,299,086 684,008
</TABLE>
(d) To amend the Funds fundamental investment limitation concerning
underwriting.
<TABLE>
<CAPTION>
Votes
Votes Against/
For Abstentions
----- -----------
<S> <C> <C>
Series of Security Equity Fund
Equity Series................ 58,698,621 12,221,703
Total Return Series.......... 442,705 16,687
Social Awareness Series...... 494,687 214,676
Mid Cap Value Series......... 1,028,238 371,802
Small Cap Growth Series...... 1,235,768 25,708
Security Growth & Income Fund.... 7,400,144 834,355
Security Ultra Fund.............. 7,286,189 696,905
</TABLE>
(e) To amend the Funds fundamental investment limitation concerning
borrowing.
<TABLE>
<CAPTION>
Votes
Votes Against/
For Abstentions
----- -----------
<S> <C> <C>
Series of Security Equity Fund
Equity Series................ 58,542,923 12,377,402
Total Return Series.......... 442,705 16,687
Social Awareness Series...... 493,928 215,435
Mid Cap Value Series......... 1,027,649 372,390
Small Cap Growth Series...... 1,235,720 25,756
Security Growth & Income Fund.... 7,396,191 838,307
</TABLE>
(f) To amend the Funds fundamental investment limitation concerning lending.
<TABLE>
<CAPTION>
Votes
Votes Against/
For Abstentions
----- -----------
<S> <C> <C>
Series of Security Equity Fund
Equity Series................ 58,492,218 12,428,107
Total Return Series.......... 442,705 16,687
Social Awareness Series...... 496,057 213,306
Mid Cap Value Series......... 1,028,835 371,204
Small Cap Growth Series...... 1,235,720 25,756
Security Growth & Income Fund.... 7,392,874 841,625
Security Ultra Fund.............. 7,209,561 692,534
</TABLE>
(g) To eliminate the Funds fundamental investment limitation concerning
short sales and margin purchases of securities.
<TABLE>
<CAPTION>
Votes
Votes Against/
For Abstentions
----- -----------
<S> <C> <C>
Series of Security Equity Fund
Equity Series................ 58,449,305 12,471,020
Total Return Series.......... 442,705 16,687
Social Awareness Series...... 490,871 218,493
Mid Cap Value Series......... 1,027,281 372,759
Security Growth & Income Fund.... 7,392,939 841,560
</TABLE>
--------------------------------------------------------------------------------
119
<PAGE> 120
SHAREHOLDER UPDATE (CONTINUED)
SEPTEMBER 30, 2000
(h) To amend the Fund's fundamental investment limitation concerning senior
securities.
<TABLE>
<CAPTION>
Votes
Votes Against/
For Abstentions
----- -----------
<S> <C> <C>
Series of Security Equity Fund
Equity Series................ 58,623,705 12,296,620
</TABLE>
(i) To eliminate the Fund's fundamental investment limitation concerning
investment in other investment companies.
<TABLE>
<CAPTION>
Votes
Votes Against/
For Abstentions
----- -----------
<S> <C> <C>
Series of Security Equity Fund
Equity Series................ 58,650,724 12,269,600
Security Growth & Income Fund.... 7,391,782 842,716
Security Ultra Fund.............. 7,293,258 689,836
</TABLE>
(j) To eliminate the Fund's fundamental investment limitation concerning
investment in companies with less than three years' operating history.
<TABLE>
<CAPTION>
Votes
Votes Against/
For Abstentions
----- -----------
<S> <C> <C>
Series of Security Equity Fund
Equity Series................ 58,575,839 12,344,485
Security Growth & Income Fund.... 7,396,882 837,616
Security Ultra Fund.............. 7,285,081 698,013
</TABLE>
(k) To eliminate the Fund's fundamental investment limitation concerning
mortgaging, pledging or hypothecating its assets.
<TABLE>
<CAPTION>
Votes
Votes Against/
For Abstentions
----- -----------
<S> <C> <C>
Security Growth & Income Fund..... 7,395,366 839,133
</TABLE>
(l) To eliminate the Fund's fundamental investment limitation concerning
purchasing securities that are not traded on an exchange or actively traded
over-the-counter.
<TABLE>
<CAPTION>
Votes
Votes Against/
For Abstentions
----- -----------
<S> <C> <C>
Security Growth & Income Fund..... 7,392,879 841,620
</TABLE>
(m) To eliminate the Funds fundamental investment limitation concerning
purchasing securities of an issuer in which the officers and directors of the
Funds, investment manager or underwriter own more than 5% of the outstanding
securities of such issuer.
<TABLE>
<CAPTION>
Votes
Votes Against/
For Abstentions
----- -----------
<S> <C> <C>
Series of Security Equity Fund
Equity Series................ 58,490,755 12,429,569
Total Return Series.......... 442,705 16,687
Social Awareness Series...... 491,006 218,358
Mid Cap Value Series......... 1,029,096 370,944
Security Growth & Income Fund.... 7,386,317 848,181
</TABLE>
(n) To eliminate the Funds fundamental investment limitation concerning the
officers or directors of the Funds, the Underwriter or Manager purchasing shares
of the Funds, except at current net asset value.
<TABLE>
<CAPTION>
Votes
Votes Against/
For Abstentions
----- -----------
<S> <C> <C>
Series of Security Equity Fund
Equity Series................ 58,541,563 12,378,761
Global Series................ 1,657,152 146,384
Total Return Series.......... 442,705 16,687
Social Awareness Series...... 493,775 215,588
Mid Cap Value Series......... 1,028,605 371,435
Small Cap Growth Series...... 1,235,084 26,392
Enhanced Index Series........ 1,334,684 561,326
International Series......... 657,285 73,819
Select 25 Series............. 1,367,798 638,449
Security Growth & Income Fund.... 7,395,717 838,782
</TABLE>
(o) To amend the Fund's fundamental investment limitation concerning buying
or selling real estate.
<TABLE>
<CAPTION>
Votes
Votes Against/
For Abstentions
----- -----------
<S> <C> <C>
Series of Security Equity Fund
Equity Series................ 58,626,048 12,294,276
Total Return Series.......... 442,705 16,687
Social Awareness Series...... 495,033 214,330
Mid Cap Value Series......... 1,027,503 372,537
Small Cap Growth Series...... 1,233,234 28,242
</TABLE>
--------------------------------------------------------------------------------
120
<PAGE> 121
SHAREHOLDER UPDATE (CONTINUED)
SEPTEMBER 30, 2000
(p) To amend the Funds fundamental investment limitation concerning buying
or selling commodities or commodity contracts.
<TABLE>
<CAPTION>
Votes
Votes Against/
For Abstentions
----- -----------
<S> <C> <C>
Series of Security Equity Fund
Equity Series................ 57,758,613 13,161,711
Total Return Series.......... 442,705 16,687
Social Awareness Series...... 493,138 216,225
Mid Cap Value Series......... 1,025,383 374,657
Small Cap Growth Series...... 1,233,234 28,242
Security Growth & Income Fund.... 7,386,559 847,940
</TABLE>
(q) To eliminate the Fund's fundamental investment limitation concerning
investment in warrants.
<TABLE>
<CAPTION>
Votes
Votes Against/
For Abstentions
----- -----------
<S> <C> <C>
Series of Security Equity Fund
Equity Series................ 58,550,788 12,369,537
</TABLE>
(r) To eliminate the Fund's fundamental investment limitation concerning
restricted securities.
<TABLE>
<CAPTION>
Votes
Votes Against/
For Abstentions
----- -----------
<S> <C> <C>
Series of Security Equity Fund
Equity Series................ 58,428,788 12,491,536
Security Ultra Fund.............. 7,279,047 704,047
</TABLE>
(s) To eliminate the Funds fundamental investment limitation concerning
investment in puts, calls, straddles or spreads.
<TABLE>
<CAPTION>
Votes
Votes Against/
For Abstentions
----- -----------
<S> <C> <C>
Series of Security Equity Fund
Equity Series................ 57,609,176 13,311,149
Security Growth & Income Fund.... 7,382,010 852,489
Security Ultra Fund.............. 7,272,129 710,966
</TABLE>
(t) To eliminate the Funds fundamental investment limitation concerning
investment in oil, gas, mineral leases or other mineral exploration or
development programs.
<TABLE>
<CAPTION>
Votes
Votes Against/
For Abstentions
----- -----------
<S> <C> <C>
Series of Security Equity Fund
Equity Series................ 57,668,510 13,251,815
Total Return Series.......... 442,705 16,687
Social Awareness Series...... 492,724 216,640
Mid Cap Value Series......... 1,027,748 372,292
Security Growth & Income Fund.... 7,388,227 846,271
Security Ultra Fund.............. 7,281,931 701,164
</TABLE>
(u) To eliminate the Fund's fundamental investment limitation concerning
senior securities and borrowing.
<TABLE>
<CAPTION>
Votes
Votes Against/
For Abstentions
----- -----------
<S> <C> <C>
Security Ultra Fund............... 7,290,613 692,481
</TABLE>
(v) To amend the Fund's fundamental investment limitation concerning margin
purchases of securities.
<TABLE>
<CAPTION>
Votes
Votes Against/
For Abstentions
----- -----------
<S> <C> <C>
Security Ultra Fund............... 7,280,778 702,316
</TABLE>
(w) To eliminate the Fund's fundamental investment limitation concerning
short sales of securities.
<TABLE>
<CAPTION>
Votes
Votes Against/
For Abstentions
----- -----------
<S> <C> <C>
Security Ultra Fund............... 7,284,210 698,884
</TABLE>
(x) To amend the Fund's fundamental investment limitation concerning buying
or selling real estate, commodities or commodity contracts.
<TABLE>
<CAPTION>
Votes
Votes Against/
For Abstentions
----- -----------
<S> <C> <C>
Security Ultra Fund............... 7,281,567 701,527
</TABLE>
(y) To eliminate the Fund's fundamental investment limitation concerning
investment in warrants.
<TABLE>
<CAPTION>
Votes
Votes Against/
For Abstentions
----- -----------
<S> <C> <C>
Security Ultra Fund............... 7,294,799 688,296
</TABLE>
--------------------------------------------------------------------------------
121
<PAGE> 122
c-------------------------------------------------------------------------------
THE SECURITY GROUP
OF MUTUAL FUNDS
Security Ultra Fund
Security Equity Fund
- Small Cap Growth Series
- Global Series
- Mid Cap Value Series
- Enhanced Index Series
- International Series
- Social Awareness Series
- Select 25(R) Series
- Equity Series
- Total Return Series
- Large Cap Growth Series
- Technology Series
Security Growth and Income Fund
Security Income Fund
- Diversified Income Series
- High Yield Series
Security Municipal Bond Fund
Security Cash Fund
This report is submitted for the general information of the shareholders of the
Funds. The report is not authorized for distribution to prospective investors in
the Funds unless preceded or accompanied by an effective prospectus which
contains details concerning the sales charges and other pertinent information.
SECURITY FUNDS
OFFICERS AND DIRECTORS
DIRECTORS
Donald A. Chubb, Jr.
John D. Cleland
Penny A. Lumpkin
Mark L. Morris, Jr., D.V.M.
Maynard F. Oliverius
James R. Schmank
OFFICERS
John D. Cleland, Chairman of the Board
James R. Schmank, President
Terry A. Milberger, Vice President, Equity Fund and Growth & Income Fund
James P. Schier, Vice President, Equity and Ultra Fund
Cindy L. Shields, Vice President, Equity Fund
Amy J. Lee, Secretary
Christopher D. Swickard, Assistant Secretary
Brenda M. Harwood, Treasurer
www.securitybenefit.com
[Security Distributors, Inc.]
700 SW Harrison St.
Topeka, KS 66636-0001
PRESORTED
STANDARD
U.S. POSTAGE
PAID
CHICAGO, IL
PERMIT NO. 941
SDI 604 (R9-00) 46-06041-00
