<PAGE>
SECURITY
FUNDS
SEMIANNUAL
REPORT
MARCH 31, 1996
* SECURITY
GROWTH AND
INCOME FUND
* SECURITY EQUITY
FUND
-EQUITY SERIES
-GLOBAL SERIES
-ASSET
ALLOCATION
SERIES
* SECURITY ULTRA
FUND
[SDI Logo]
<PAGE>
PRESIDENT'S COMMENTARY
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MAY 15, 1996
SECURITY
FUNDS
Dear Shareholders:
The six months just completed were a positive period for the equity markets. In
general, stocks of larger companies outperformed those of midsized and smaller
ones, as can be seen in their respective index returns. The Dow Jones Industrial
Average, indicative of stock prices of large companies, increased 18.04%.
Although not quite as impressive, but very attractive nonetheless, the Standard
and Poor's 500 Index which represents midsized companies rose 11.71%. The S&P
Midcap Growth index was up 5.05% over the period. Exemplifying the global
markets, the Morgan Stanley Capital International World Index increased 8.15%.
THE USE OF BENCHMARKS IN PORTFOLIO MANAGEMENT
Our equity portfolio management team uses benchmark indexes (with the exception
of the Dow Jones Average, included here for informational purposes) as a risk
control device to help our portfolio managers understand where pockets of
outperformance or underperformance in their portfolios are occurring.
Backtesting of our funds' performance numbers has shown that if we outperform
these benchmarks we should rank consistently above the median average of our
funds' respective peer groups. We feel that this use of benchmarks is helping us
achieve more consistent performance over time.
THE FISCAL YEAR BEGINS WITH A FAVORABLE ECONOMIC BACKDROP
In 1995 the economic climate of slow but steady
[PICTURE OF JOHN CLELAND]
JOHN CLELAND
PRESIDENT
growth and declining interest rates, combined with the realization of increased
profits resulting from corporate restructurings, led to outstanding returns in
the stock market. These favorable conditions carried over into early 1996 until
mid-February, when interest rates began an upward climb. Anecdotal reports
showed some indications that economic activity was accelerating, which led the
bond markets to believe that the Federal Reserve would not be able to continue
lowering interest rates as they had hoped. Stock market participants worry about
higher interest rates because of their impact on corporate expenses and profits,
as well as their dampening effect on economic growth. Also contributing to
rising interest rates was a perception that Congress had lost its focus on
shrinking the overall role of the Federal government. The low interest-rate
environment had been a major psychological prop of the strong markets.
We believe that the productivity improvement theme which resulted from corporate
restructuring and downsizing still has a good while to run. This improvement
will give corporations the ability to continue to increase earnings even if
economic growth stagnates. Market analysts have already scaled back earnings
estimates based on their slow-growth scenarios. This makes moderate gains in
earnings look even more favorable when compared with these reduced forecasts,
and can add upward momentum to the markets.
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1
<PAGE>
PRESIDENT'S COMMENTARY (CONTINUED)
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MAY 15, 1996
SECURITY
FUNDS
THE GLOBAL MARKET PERFORMANCE OUTLOOK IS BRIGHT
The productivity improvement theme we've mentioned has been present in the
United States for a number of years. This same idea--downsizing and
restructuring of corporations in order to get the most productivity from the
least number of workers--is just beginning to take hold in Europe and Asia. In
the past, the corporation was a "social net" for its workers in many foreign
countries. Jobs and benefits were guaranteed for life. These firms are now
realizing that if they are to survive in a competitive world, this must change.
This improvement process will be a major factor in the returns of global markets
over the next several years. As corporations trim excess expenses, profits will
increase just as they did in the U.S. This will drive the global markets to
generate very attractive returns, in our estimation, for many years to come. As
we have seen in our own country, the benefits of corporate restructurings are
not a short-term phenomenon.
WHAT'S AHEAD FOR INVESTMENT MARKETS
We think that the climate will continue to be positive for the stock and bond
markets. We expect sustained domestic economic growth, a slow pickup in the
global economies, and a continued absence of inflationary pressures. We
anticipate a return to lower interest rate levels or, at worst, interest rates
remaining about where they are now. The equity markets should continue their
climb to higher levels, but in all likelihood at a slower pace than in 1995.
Volatility will be an ever-present companion to investors--it is difficult for
the markets to accommodate the greatly increased volume of daily trading
activity. We believe liquidity in the markets will always be available, but
increased price fluctuation is the cost of the ability to trade at will.
We continue to emphasize the difference in being a trader and being an investor.
We encourage our shareholders to think of themselves as investors, with long
term objectives in mind. With an investment plan that carries you through the
next five to ten years and beyond, the impact of daily volatility is negligible.
The important thing is the long-term trend of share prices. We feel that the
proper building blocks are in place for an excellent investment climate for many
years to come.
Sincerely,
JOHN CLELAND
John Cleland
President
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2
<PAGE>
MANAGER'S COMMENTARY
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MAY 15, 1996
SECURITY
GROWTH AND
INCOME FUND
To Our Shareholders:
The first half of fiscal year 1996 has been rewarding for shareholders, with
your fund appreciating 11.09% over the six-month period beginning October 1,
1995.* This compares favorably with the Lipper Growth and Income Funds' peer
group average of 10.2%, and with the 10.26% return of our internal benchmark
index, a blend of 80% Standard and Poor's 500 Index and 20% Lehman Brothers BB
Rated Bond Index.
During the first three months of the fiscal year (October, November, and
December), the portfolio slightly underperformed its peers. Although the bond
portion of the portfolio did better than its benchmark, it held back the fund as
a whole as the equity market returns surpassed those of bonds. A gradual shift
from value-oriented stocks to growth stocks toward the end of 1995 and through
early 1996 helped improve performance.
HOW THE PORTFOLIO LOOKS NOW
The portfolio balance is now tilted toward high-quality growth issues. Profit
margins have reached record highs as many corporate restructurings have been
completed, and further revenue growth will be difficult for some companies to
achieve. We actively seek out those firms which have solid earnings records and
excellent prospects for continuing growth, such as McDonald's and Procter and
Gamble.
Some value stocks still remain in the portfolio. We maintain a large weighting
(about 4%) in the portfolio in the aerospace-defense industry. This sector is
currently out of favor, as many investors expect defense spending to decline
with government cutbacks. They overlook the fact that some of these companies
have a large industrial base which keeps earnings stable. They have
[PICTURE OF SECURITY MANAGEMENT GROWTH AND INCOME TEAM]
THE SECURITY MANAGEMENT GROWTH AND INCOME TEAM
CHUCK LAUBER, TERRY MILBERGER, TOM SWANK, JOHN CLELAND
gone through restructurings and made acquisitions to augment growth.
Rising commodity prices have been in the news frequently in the last few months.
We have suffered by not having a significant presence in energy stocks as oil
prices have risen. Holding such names as Deere, Monsanto, and Potash Corporation
have helped as agricultural commodity prices have gone up.
THE FIXED INCOME COMPONENT OF THE PORTFOLIO
The high yield bond component of the fund has outperformed its benchmark index
consistently through the last six months. Overall fund performance was held back
because of this component, however, as equity markets have been stronger than
bond markets. The fund reaped the benefits of U.S. West's buyout of Continental
Cablevision, whose bonds soared in value on the news. Bonds of capital goods
producing companies such as Sequa Corporation, a maker of jet engine components,
have performed well through the
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3
<PAGE>
MANAGER'S COMMENTARY (CONTINUED)
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MAY 15, 1996
SECURITY
GROWTH AND
INCOME FUND
PERFORMANCE
period. Consumer noncyclical issuers such as Penn Traffic, a food supermarket
chain, have added to total return as well. The portfolio benefitted by not
owning utility bonds. As utility companies split into various parts, the
stockholders may prosper but bondholders generally suffer as revenue streams are
divided. Utilities comprise almost 13% of our benchmark bond index. Our
underweighting thus increased our return relative to the index.
OUR PLANS FOR THE SECOND HALF
Looking ahead to the balance of this fiscal year, we plan to stay with high
quality, predictable growth companies. We expect the economy to continue along
the path of moderate growth, perhaps in the 2% to 2.5% range. We are considering
moving to a slightly smaller average capitalization in the portfolio, adding
some mid-cap names to our present holdings. The larger companies have already
done very well in stock price appreciation, and we feel that on a relative basis
the smaller companies may be better values at this time. The financial sector
looks more attractive now for appreciation potential; interest rates have risen
recently and we expect them to recede to their previous levels. This would be
favorable for profits of banks and insurance companies.
As always, we invite your questions and comments.
Terry Milberger
Senior Portfolio Manager
Tom Swank
Portfolio Manager
TOP 5 HOLDINGS**
% of
NET ASSETS
U. S. Robotics Corporation 1.8%
Monsanto Company 1.7%
Praxair, Inc. 1.7%
General Electric Company 1.6%
Omnicom Group, Inc. 1.6%
**At March 31, 1996
AVERAGE ANNUAL RETURNS
As of March 31, 1996
1 YEAR 5 YEARS 10 YEARS
A Shares 28.88% 9.83% 8.60%
A Shares with sales charge 21.49% 8.54% 7.96%
B Shares 27.59% 8.10% N/A
(10-19-93)
(since inception)
B Shares with CDSC 22.59% 6.63% N/A
(10-19-93)
(since inception)
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, as applicable, except
where noted. Such figures would be lower if the maximum sales charge were
deducted.
*Performance figures are based on Class A shares and do not reflect deduction of
the sales charge.
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4
<PAGE>
MANAGER'S COMMENTARY
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MAY 15, 1996
SECURITY EQUITY
FUND-
EQUITY SERIES
To Our Shareholders:
In the latter part of fiscal year 1995, anticipating an earnings slowdown in
1996, we positioned the portfolio to focus on stable growth issues such as
financial services, consumer products and healthcare, whose earnings tend to
hold up regardless of economic activity. This strategy has served us well in the
first six months of the current fiscal year. During this period your fund has
increased 15.12%, compared with the Lipper peer group average of 7.73%, and an
11.71% return for the Standard and Poor's 500 index.*
Our outlook for the stock markets has remained the same since the last report. A
few cyclical stocks have performed well, but those companies which have shown
consistent earnings growth have contributed the most to the strong market
returns. The Equity Series portfolio currently is invested about 90% in growth
companies of this type and approximately 10% in value names, a departure from
our typical 75%/25% long term strategy.
ACTIONS TAKEN IN THE PORTFOLIO
Early in the six-month period just completed, we began lowering our weighting in
technology. This helped our performance relative to our benchmark index, the S&P
500 Index, as the luster of technology investing faded. We still participate in
some areas of the technology sector, such as our investment in Microsoft which
represents the software segment. We also like computer service companies that
benefit from corporate outsourcing trends. One such company is Computer
Sciences, a firm that processes payrolls for corporations.
Among the technology issues we sold was IBM, which had performed well for us,
rising from 95 to 120 since early October. However, IBM's revenue growth is now
expected to slow in the months ahead as many corporations pare back their
capital spending plans. We will avoid other companies whose sales are dependent
on capital spending, as well.
Within the small portion of our portfolio that is still invested in value
stocks, we hold companies that we consider to be undervalued by the markets. One
such issue is U.S. Industries, a conglomerate that is in the process of
restructuring. As they reevaluate their various components and pare down those
that are not profitable, their overall prospects will improve along with their
earnings. U.S. Industries also fits well with our emphasis on medium-sized
firms.
INFLUENCES ON RECENT STOCK MARKET PERFORMANCE
Because interest rates have risen over the past three months, prices of
financial stocks have been hurt. We feel that rates will come back down in the
months
[PICTURE OF THE SECURITY MANAGEMENT LARGE CAP TEAM]
THE SECURITY MANAGEMENT LARGE CAP TEAM
JOHN CLELAND, TERRY MILBERGER, CHUCK LAUBER
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5
<PAGE>
MANAGER'S COMMENTARY (CONTINUED)
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MAY 15, 1996
SECURITY EQUITY
FUND-
EQUITY SERIES
PERFORMANCE
ahead and issues of banking and insurance companies should profit from this
reversal. We now own stock in Equitable Companies, and are considering other
stocks in the financial sector.
In economic climates of slow growth such as we are now experiencing, we look for
companies whose earnings increases are not dependent on the economy. These firms
will profit from specific achievements within rather than from general market
growth. One of our holdings, a hotel-casino complex called Mirage Resorts, is an
outstanding example of this type of growth. Mirage is expanding its properties
in Las Vegas, and will add significant incremental earnings from this
company-specific growth.
OUR THOUGHTS ABOUT THE SECOND HALF
We plan to continue with our present strategy through the second half of the
fiscal year, assuming that we have no economic surprises. We will actively seek
high quality companies with records of consistent earnings growth. We will also
shift a portion of assets into medium-sized firms which have more upside
potential in their stock prices. Their large-cap counterparts experienced the
most appreciation in the past year, making mid-caps more attractive on a
relative basis.
We appreciate the privilege of managing your investment dollars. We will do our
best to continue to earn your confidence.
Terry Milberger
Senior Portfolio Manager
SECURITY EQUITY SERIES VS. S&P 500
TOP 5 HOLDINGS**
% of
NET ASSETS
Allied-Signal, Inc. 1.8%
Frontier Corporation 1.8%
General Electric Company 1.8%
Deere & Company 1.7%
American Home Products
Corporation 1.6%
**At March 31, 1996
AVERAGE ANNUAL RETURNS
As of March 31, 1996
1 YEAR 5 YEARS 10 YEARS
A Shares 36.36% 16.38% 14.36%
A Shares with sales charge 28.46% 15.00% 13.68%
B Shares 35.10% 16.33% N/A
(10-19-93)
(since inception)
B Shares with CDSC 30.10% 15.01% N/A
(10-19-93)
(since inception)
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, as applicable, except
where noted. Such figures would be lower if the maximum sales charge were
deducted.
*Performance figures are based on Class A shares and do not reflect deduction of
the sales charge.
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6
<PAGE>
MANAGER'S COMMENTARY
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MAY 15, 1996
SECURITY
EQUITY FUND -
GLOBAL SERIES
To Our Shareholders:
The Global Series enjoyed a strong first half of the fiscal year, gaining
10.25%.* Our benchmark index, the Morgan Stanley Capital International World
Index, rose 8.15% in the same period. Despite its low weighting in U.S. stocks,
the Global Series performed well because of strong stock selection in countries
such as Japan, as well as large gains in Polish equities.
THE CURRENT GLOBAL INVESTMENT PICTURE
Global equity markets have continued their bullish trends, ignoring a sharp rise
in world bond yields. The U.S. economy remains in excellent shape, operating at
full employment. Corporate America has become highly competitive, and the U.S.
budget deficit is now the lowest among G-7 nations. Conversely, European
economies are suffering from structurally high unemployment--German joblessness
reached a record 10.8% in March. Responding to intense global competition,
European companies are finally restructuring. Headcount is being reduced,
mergers are becoming more commonplace, production is being moved to lower cost
regions such as Eastern Europe, and technology is increasing efficiencies. These
trends portend a favorable outlook for profit growth in Europe, once downsizing
is accomplished.
Japanese growth has finally turned upward after five difficult years. Gross
domestic product grew 3.6% last quarter, benefitting from several factors. Since
mid-1995 the Bank of Japan has been aggressively adding liquidity to the banking
system. Interest rates are at record low levels, stimulating economic growth and
allowing the troubled Japanese banking system to improve vulnerable balance
sheets. Fiscal spending of
[PICTURE OF RICHARD SALER] [PICTURE OF ALAN WAPNICK]
RICHARD SALER ALAN WAPNICK
PORTFOLIO MANAGER PORTFOLIO MANAGER
$130 billion is entering the economy as construction spending is rising.
Finally, the reversal of the yen from 80 to the dollar last March to current
level of 108 has helped corporate Japan regain some lost competitiveness and
profits.
WORLD GROWTH AND INFLATION
World growth is likely to increase as we move toward 1997. We expect the U.S.
economy to accelerate during the year as unemployment remains low, the backlog
of auto inventories has fallen, and personal income is strengthening. Japan, the
world's second largest economy, is finally providing a major stimulus to world
growth, and economic activity there should continue to rise. Although European
growth will lag the U.S. and Japan, economic activity is probably near trough
levels. Spurred by excess global liquidity in 1995 and stronger growth in the
U.S. and Japan, European growth should improve in the latter half of 1996.
An extended acceleration in global growth could create problems for world equity
markets, increasing the likelihood of rising inflation. Key commodities such as
grains and oil have already experienced sharp price increases. Given U.S.
employment at current levels, increased economic growth may finally force wages
up. Japanese growth may also threaten current positive global liquidity trends:
as expansion takes hold, the Bank of Japan will reduce its massive liquidity
injections
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7
<PAGE>
MANAGER'S COMMENTARY (CONTINUED)
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MAY 15, 1996
SECURITY
EQUITY FUND -
GLOBAL SERIES
PERFORMANCE
which have been a major underpinning for global markets since mid-1995.
OUTLOOK FOR THE COMING MONTHS
The Global Series remains underweight in U.S. equities. We expect U.S. profit
growth to be in single digits at best in 1996 and probably into 1997. Factoring
in this slow profit outlook and rising bond yields, U.S. stocks look expensive.
Japanese equities should continue to benefit from the stimulative monetary
policy of 1995 and 1996. Japan will be one of the few markets to enjoy strong
profit growth in the current year. We believe earnings will be better than
expectations as sales accelerate.
Stock selection will be more challenging in Europe, particularly if U.S.
equities suffer a sharp correction. However, Europe is undergoing structural
change toward a more investor friendly bias. Restructuring will provide great
opportunities in the years ahead as profitability should rise to new heights.
Eastern Europe, particularly Poland, will enjoy rapid growth as their low cost
production capability attracts foreign direct investment and leads to increases
in their standard of living.
We remain cautious in Southeast Asia due to its high correlation with U.S.
stocks and bonds. Asian stocks are not cheap and competition is becoming fierce.
Finally, the Global Series remains partially hedged out of Japanese yen due to
our expectations of further dollar strength.
Richard Saler and Alan Wapnick
Portfolio Managers
PORTFOLIO BREAKDOWN BY COUNTRY (TOP 5)**
% of
NET ASSETS
Japan 23.4%
United States 19.8%
France 5.6%
Germany 4.3%
United Kingdom 4.2%
**At March 31, 1996
AVERAGE ANNUAL RETURNS
As of March 31, 1996
1 YEAR SINCE INCEPTION
A Shares 18.94% 8.59%
(10-1-93)
A Shares with sales charge 12.09% 6.04%
(10-1-93)
B Shares 17.80% 7.91%
(10-19-93)
B Shares with CDSC 12.80% 6.43%
(10-19-93)
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, as applicable, except
where noted. Such figures would be lower if the maximum sales charge were
deducted.
*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.
which have been a major underpinning for global markets since mid-1995.
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8
<PAGE>
MANAGER'S COMMENTARY
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MAY 15, 1996
SECURITY
EQUITY FUND -
ASSET ALLOCATION
SERIES
To Our Shareholders:
The most recent addition to Security Equity Fund, the Asset Allocation Series,
performed well in the first half of the fiscal year. With a total return of
6.33%, it compared favorably with the 6.13% average of its Lipper peer group.*
Those broad sectors contributing the most to the Series' total return were U.S.
equities, foreign equities and real estate. The weakest areas were U.S. bonds
and cash. We had no allocation during the period to foreign bonds or gold.
THE BENEFITS OF SECTOR DIVERSIFICATION
One of the primary attractions of an asset allocation fund is reduced risk
through diversification. For example, the bond markets have been the
weakest-performing sectors during the six month period. Because the allocation
to U.S. bonds has been only 15% and none to international bonds, the effect on
the total return of the portfolio has not been serious. Conversely, equity
markets both here and abroad have done quite well. This favorable performance
was captured in the 37.6% U.S. equity and 32.4% foreign stock and foreign stock
index futures apportionments of the portfolio.
Of course, the diversification goes beyond allocation among the seven broad
sectors. Within these sectors, additional breakdowns spread risk even further.
The U.S. equity market portion at the end of March contained twelve different
industries, the largest of which were computers, electronics, recreation and
leisure, and building materials. The foreign investments were divided among
Japan, Germany, Hong Kong, Belgium, and the United Kingdom.
[PICTURE OF JANE TEDDER]
JANE TEDDER
PORTFOLIO MANAGER
FREQUENCY OF CHANGES IN ALLOCATION GUIDELINES
The purpose of our asset allocation fund is not to forecast every slight change
in the various markets, but to look at broad longer-term trends. As you know, we
have retained Meridian Investment Management Corporation in Englewood, Colorado
to provide research on sector allocation for the Asset Allocation Series. Since
the inception of the fund on June 1, 1995, Meridian has suggested only three
allocation shifts. These three have all been in designations within the broad
sectors, rather than in the sectors themselves.
In October of 1995, Meridian changed their allotments within U.S. equities,
indicating that electrical equipment stocks should be sold and the proceeds
reinvested in telecommunications issues. Many companies in this sector have
since benefitted from speculation about possible mergers or other events arising
from recent industry deregulation. In January it was suggested that we sell our
appliance stocks and place the resulting funds in exchange-traded real estate
investment trusts (REITs). As interest rates subsequently rose, appliance
manufacturing stocks weakened on fears that home sales would decline.
Conversely, REIT prices rose in anticipation of increased cash flows from higher
mortgage interest rates.
The third allocation shift was within the international equity sector. Meridian
advised us on March 26 to reduce our holdings in the United Kingdom by half,
placing the proceeds from the sales in cash temporarily until another sector
emerged as a strong buy candidate. Meridian was not looking negatively on the
U.K. market.
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9
<PAGE>
MANAGER'S COMMENTARY (CONTINUED)
- --------------------------------------------------------------------------------
MAY 15, 1996
SECURITY
EQUITY FUND -
ASSET ALLOCATION
SERIES
[TEMPLETON LOGO] [MERIDIAN LOGO]
Research provided by Meridian Investment Management Corporation and
Templeton/Franklin Investment Services, Inc. Templeton/Franklin's research is
derived from research provided by a third party which is analyzed and monitored
by Templeton/Franklin.
PERFORMANCE
at the time; rather, they thought we should take profits in the issues which had
performed very well in those markets which had risen sharply
THE OUTLOOK FOR THE MONTHS AHEAD
The investment professionals at both Security Management Company and Meridian
think foreign stocks are still fairly valued and present attractive buying
opportunities. The best pockets of value are perhaps to be found in Europe and
Asia, and particularly in Germany and Japan. We do not view the recent rise in
interest rates as the beginning of a long-term upward spiral, but rather as a
temporary increase. We see more reasons for lower rates than for higher levels,
and feel that stock values will go up when rates move back down.
Although the Meridian team thinks the prospects for foreign bonds are positive,
they are not recommending that we invest in that sector at present because they
feel that the other areas will perform much better. They add that since gold is
such a volatile holding, the outlook must be extremely positive for gold prices
before we designate funds to that area.
Security Management Company, Meridian and Templeton/Franklin continue to work
hard to take advantage of opportunities that await us now and in the future.
Jane Tedder
Senior Portfolio Manager
ASSET MIX**
% of
NET ASSETS
U. S. Equities 38.25%
Foreign Stocks 29.65%
U. S. Government and Agencies 14.86%
Real Estate 11.93%
Cash 5.31%
**At March 31, 1996
AVERAGE ANNUAL RETURNS
As of March 31, 1996
SINCE INCEPTION
(not annualized)
A Shares 12.08%
(6-1-95)
A Shares with sales charge 5.63%
(6-1-95)
B Shares 11.19%
(6-1-95)
B Shares with CDSC 6.19%
(6-1-95)
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, as applicable, except
where noted. Such figures would be lower if the maximum sales charge were
deducted.
*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.
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10
<PAGE>
MANAGER'S COMMENTARY
- --------------------------------------------------------------------------------
MAY 15, 1996
SECURITY
ULTRA
FUND
To Our Shareholders:
Since mid-February the stock markets have been favoring small and midsized
companies. For Ultra Fund investors this has been a welcome relief from last
fall and early winter when stocks of major corporations outperformed
considerably. This preference for big companies dimmed toward the end of 1995
and through early 1996 when the economy appeared to be weak, with fading
prospects for earnings growth in large firms. Security Ultra Fund mirrored the
behavior of the small-cap markets with a total return of -2.88% in the first
quarter of the fiscal year, followed by an increase of 7.05% in the three months
ending March 30.*
INVESTORS TURN TO SMALL AND MIDSIZED COMPANIES
The pickup in economic activity since mid-February and better earnings growth in
small and midsized companies have helped these markets outperform their
large-cap counterparts. Additionally, the recent rise in U.S. interest rates
caused the dollar to strengthen; multinational corporations with foreign
subsidiaries fell out of favor with equity investors because of their currency
exposures. This, too, brought investors to the smaller companies, most of which
have little or no currency risk because they typically have no foreign
operations. Mutual funds investing in aggressive growth companies experienced
increased cash inflows as investors recognized the attractiveness of these
markets.
FINDING VALUE IN REJECTED SECTORS
We have been seeking out companies whose stock prices were beaten down in late
1995 but whose fundamentals remained strong. For example, we have found value in
the retail sector. Because shopping
[PICTURE OF THE SECURITY MANAGEMENT SMALL CAP TEAM]
THE SECURITY MANAGEMENT SMALL CAP TEAM
LARRY VALENCIA, FRANK WHITSELL, CINDY SHIELDS, JOHN CLELAND
activity was generally sluggish during the 1995 holiday season, stocks of many
retail firms lagged the markets considerably. Sales have looked better in recent
months because in comparison with last year's weak figures even modest increases
look attractive. In addition, an early Easter shopping season and larger income
tax refunds have boosted spring sales. We have increased our retail portion of
the portfolio to 7.6%, up from 4% earlier in the year.
One of our favorite retailers is Kohl's Department Stores, a company benefitting
from geographic expansion. Their stores are located in strip shopping malls
instead of large enclosed malls, and carry brand-name items at attractive
prices. Another company we like, Men's Wearhouse, primarily sells suits and
other business attire, focusing on name brands for less. Many specialty
retailers of this kind of apparel have gone out of business because of the move
to casual dress, so more purchasers of business clothing are coming to Men's
Wearhouse for their needs. They not only find traditional business attire, but
also learn that Men's Wearhouse can teach them how to dress casually as well.
- --------------------------------------------------------------------------------
11
<PAGE>
MANAGER'S COMMENTARY (CONTINUED)
- --------------------------------------------------------------------------------
MAY 15, 1996
SECURITY
ULTRA
FUND
PERFORMANCE
A second example of out-of-favor sectors with pockets of value is technology. On
a sector-wide basis it has continued to perform poorly, although it has
stabilized a bit in early 1996. We have avoided areas in this sector such as
commodity semiconductor companies which have suffered from inventory
overstocking, but have found other parts of the sector attractive. Cascade
Communications, a maker of wide area network switches, is up almost 58% in the
first quarter of 1996. Their equipment allows companies with multiple offices
nationwide to dial into their computer networks from any location. Makers of
business intelligent tools, such as Cognos, Inc., have also performed well by
serving developing needs of computer users. Cognos manufactures software which
allows quicker, more cost effective access to and sorting of large quantities of
data warehoused in a central location.
OUR PLANS FOR THE REST OF THE YEAR
As we continue through the fiscal year we plan to keep larger weights in the
sectors where we find good growth prospects. Currently these areas include
healthcare, business services and technology. We will seek companies who have
consistent earnings and dominant technology positions in their industry. We may
also shift our average market capitalization down somewhat, since we expect
smaller companies to outperform their larger counterparts over the next several
months.
We appreciate your investment in Ultra Fund and in the Security Family of Mutual
Funds.
Cindy Shields
Portfolio Manager
TOP 5 HOLDINGS**
% of
NET ASSETS
Worldcom, Inc. 2.7%
Sunglass Hut International 1.9%
Staples, Inc. 1.9%
Dura Pharmaceuticals, Inc. 1.8%
Sonat, Inc. 1.7%
**At March 31, 1996
AVERAGE ANNUAL RETURNS
As of March 31, 1996
1 YEAR 5 YEARS 10 YEARS
A Shares 23.45% 10.54% 5.56%
A Shares with sales charge 16.38% 9.25% 4.94%
B Shares 21.81% 7.08% N/A
(10-19-93)
(since inception)
B Shares with CDSC 16.81% 5.59% N/A
(10-19-93)
(since inception)
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, as applicable, except
where noted. Such figures would be lower if the maximum sales charge were
deducted.
*Performance figures are based on Class A shares and do not reflect deduction of
the sales charge.
- --------------------------------------------------------------------------------
12
<PAGE>
STATEMENTS OF NET ASSETS
- --------------------------------------------------------------------------------
MARCH 31, 1996
(UNAUDITED)
SECURITY GROWTH AND INCOME FUND
PRINCIPAL MARKET
AMOUNT CORPORATE BONDS VALUE
COMMUNICATIONS - 5.3%
$1,000,000 Century Communications, 9.50% - 2005............... $ 1,017,500
1,000,000 Continental Cablevision, Inc., 8.875% - 2005....... 1,070,000
500,000 Comcast Corporation, 9.125% - 2006................. 498,750
250,000 Heritage Media, 8.75% - 2006....................... 241,563
1,000,000 Rogers Communications, Inc., 10.875% - 2004........ 1,040,000
-----------
3,867,813
CONSUMER GOODS & SERVICES - 0.8%
1,000,000 International Semi-Tech, 0% - 20031................ 600,000
DIVERSIFIED - 1.3%
1,000,000 Sequa Corporation, 9.375% - 2003................... 977,500
FINANCE - 2.0%
1,000,000 Home Holdings, 7.75% - 1998........................ 937,500
500,000 Keystone Group, Inc., 9.75% - 2003................. 488,750
-----------
1,426,250
FOOD & BEVERAGES - 1.4%
500,000 Cott Corporation, 9.375% - 2005.................... 495,000
500,000 TLC Beatrice, 11.5% - 2005......................... 507,500
-----------
1,002,500
GROCERY STORES - 1.4%
1,000,000 Penn Traffic Company, 10.65% - 2004................ 995,000
HOTELS - 1.3%
900,000 Harrahs Entertainment, 8.75% - 2000................ 928,125
MEDICAL & HEALTH SERVICES - 0.7%
500,000 Healthsouth Rehabilitation Corporation,
9.50% - 2001..................................... 525,000
NATURAL GAS - 1.4%
500,000 Crown Central Petroleum, 10.875% - 2005............ 517,500
500,000 Seagull Energy Corporation, 8.625% - 2005.......... 482,500
-----------
1,000,000
PUBLISHING & PRINTING - 1.1%
1,000,000 Marvel Holdings, 0% - 1998......................... 760,000
PRINCIPAL
AMOUNT OR
NUMBER OF MARKET
SHARES CORPORATE BONDS (CONTINUED) VALUE
REAL ESTATE - 0.3%
$250,000 Chelsea GCA Realty, Inc., 7.75% - 2001............. $ 248,125
RESTAURANTS - 0.7%
$500,000 Carrols Corporation, 11.5% - 2003.................. 515,000
STEEL AND METAL PRODUCTS - 0.7%
$500,000 Weirton Steel Corporation, 11.50% - 1998........... 515,625
-----------
Total corporate bonds - (cost $12,964,712) - 18.4%. 13,360,938
PREFERRED STOCK
BANKING & CREDIT - 1.6%
10,000 First Nationwide Bank.............................. 1,115,000
-----------
Total preferred stock - (cost $1,051,250) - 1.6%... 1,115,000
COMMON STOCKS
ADVERTISING - 1.6%
25,000 Omnicom Group, Inc................................. 1,125,000
AEROSPACE & DEFENSE - 4.4%
10,000 Lockheed Martin Corporation........................ 758,750
10,000 McDonnell Douglas Corporation...................... 916,250
15,000 Raytheon Company................................... 768,750
12,000 Rockwell International Corporation................. 706,500
-----------
3,150,250
BANKING & FINANCE - 2.5%
10,000 BankAmerica Corporation............................ 775,000
15,000 Chemical Banking Corporation....................... 1,057,500
-----------
1,832,500
CASINOS - 1.2%
20,000 Mirage Resorts, Inc.*.............................. 877,499
CHEMICALS - BASIC -3.0%
15,000 Hercules, Inc...................................... 930,000
8,000 Monsanto Company................................... 1,228,000
-----------
2,158,000
CHEMICALS - SPECIALTY - 4.0%
30,000 Cabot Corporation.................................. 915,000
20,000 Morton International, Inc.......................... 767,500
30,000 Praxair, Inc....................................... 1,196,250
-----------
2,878,750
SEE ACCOMPANYING NOTES.
- --------------------------------------------------------------------------------
13
<PAGE>
STATEMENTS OF NET ASSETS
- --------------------------------------------------------------------------------
MARCH 31, 1996
(UNAUDITED)
SECURITY GROWTH AND INCOME FUND
(CONTINUED)
NUMBER OF MARKET
SHARES COMMON STOCKS (CONTINUED) VALUE
COMMUNICATION EQUIPMENT - 1.8%
10,000 U.S. Robotics Corporation*......................... $ 1,292,500
COMPUTER SERVICES - 3.3%
20,000 Ceridian Corporation*.............................. 860,000
10,000 Computer Sciences Corporation*..................... 703,750
15,000 General Motors Corporation, (CI.E)................. 855,000
-----------
2,418,750
COMPUTER SOFTWARE - 2.4%
8,000 Microsoft Corporation*............................. 825,000
20,000 Oracle Corporation*................................ 942,500
-----------
1,767,500
COMPUTER SYSTEMS - 1.5%
10,000 International Business Machines Corporation........ 1,111,250
CONGLOMERATE - 5.5%
15,000 AlliedSignal, Inc.................................. 886,875
15,000 American Standard Companies*....................... 438,750
20,000 Cooper Industries, Inc............................. 780,000
30,000 Dial Corporation................................... 840,000
50,000 U.S. Industries, Inc.*............................. 1,037,500
-----------
3,983,125
CONSUMER SERVICES - 0.7%
30,000 ADT, Ltd.*......................................... 528,750
ELECTRICAL MACHINERY & ELECTRONIC COMPONENTS - 1.6%
15,000 General Electric Company........................... 1,168,125
ELECTRONICS -1.4%
20,000 Varian Associates, Inc............................. 997,500
ENTERTAINMENT - 2.0%
30,000 Carnival Corporation (CI.A)........................ 825,000
10,000 The Walt Disney Company............................ 638,750
-----------
1,463,750
FERTILIZER - 0.9%
10,000 Potash Corporation of Saskatchewan, Inc............ 625,000
FINANCE - 1.1%
24,000 Federal National Mortgage Association.............. 765,000
FOOD & BEVERAGES- 6.1%
15,000 Anheuser-Busch Companies, Inc...................... 1,010,625
15,000 CPC International, Inc............................. 1,040,625
20,000 Heinz (H.J.) Company............................... 662,500
17,000 PepsiCo, Inc....................................... 1,075,250
20,000 Sara Lee Corporation............................... 652,500
-----------
4,441,500
NUMBER OF MARKET
SHARES COMMON STOCKS (CONTINUED) VALUE
FOOD WHOLESALE - 0.0%
600 Earthgrains Company*............................... $ 17,925
HOSPITAL MANAGEMENT & SERVICES - 1.2%
15,000 Columbia HCA Healthcare Corporation................ 866,250
HOUSEHOLD FURNISHING - 1.2%
40,000 Leggett & Platt, Inc............................... 915,000
HOUSEHOLD PRODUCTS - 1.2%
10,000 Procter & Gamble Company........................... 847,500
INSURANCE - 1.8%
20,000 Equitable Companies, Inc........................... 485,000
15,000 Jefferson-Pilot Corporation........................ 808,125
-----------
1,293,125
MACHINERY - 1.4%
25,000 Deere & Company.................................... 1,043,750
MANUFACTURING - 1.5%
10,000 Corning, Inc....................................... 350,000
30,000 Pall Corporation................................... 768,750
-----------
1,118,750
MEDICAL INSTRUMENTS & SUPPLIES - 2.0%
15,000 Allergan, Inc...................................... 553,125
20,000 Baxter International, Inc.......................... 905,000
-----------
1,458,125
NATURAL GAS - 1.4%
25,000 Coastal Corporation................................ 987,500
OIL & GAS PIPELINES - 0.8%
10,000 Mapco, Inc......................................... 558,750
PHARMACEUTICALS - 5.1%
10,000 American Home Products Corporation................. 1,083,750
13,000 Merck & Company, Inc............................... 809,250
25,000 Pharmacia & Upjohn, Inc............................ 996,875
15,000 SmithKline Beecham PLC ADR......................... 772,500
-----------
3,662,375
PHOTOGRAPHIC EQUIPMENT & SUPPLIES - 1.5%
15,000 Eastman Kodak Company.............................. 1,065,000
RESTAURANTS & FOOD SERVICE - 2.3%
20,000 McDonald's Corporation............................. 960,000
40,000 Wendy's International, Inc......................... 725,000
-----------
1,685,000
RETAIL TRADE - 3.2%
20,000 Albertson's, Inc................................... 742,500
30,000 Federated Department Stores, Inc.*................. 967,500
20,000 Walgreen Company................................... 652,500
-----------
2,362,500
SEE ACCOMPANYING NOTES.
- --------------------------------------------------------------------------------
14
<PAGE>
STATEMENTS OF NET ASSETS
- --------------------------------------------------------------------------------
MARCH 31, 1996
(UNAUDITED)
SECURITY GROWTH AND INCOME FUND
(CONTINUED)
NUMBER OF MARKET
SHARES COMMON STOCKS (CONTINUED) VALUE
TELECOMMUNICATIONS - 3.6%
15,000 AT&T Corporation................................... $ 918,750
35,000 Frontier Corporation............................... 1,102,500
15,000 Sprint Corporation................................. 570,000
-----------
2,591,250
TRANSPORTATION - 2.1%
10,000 Burlington Northern Santa Fe....................... 821,250
10,000 Union Pacific Corporation.......................... 686,250
-----------
1,507,500
UTILITIES-ELECTRIC - 0.9%
25,000 Kansas City Power & Light Company.................. 637,500
WHOLESALE TRADE - 1.1%
25,000 Sysco Corporation.................................. 821,875
Total common stock - (cost $44,065,383) - 77.3%.... 56,024,424
-----------
Total investments - (cost $58,081,345) - 97.3%..... 70,500,362
Cash and other assets, less liabilities - 2.7%..... 1,975,501
-----------
Total net assets - 100.0%.......................... $72,475,863
===========
SECURITY EQUITY FUND - EQUITY SERIES
COMMON STOCKS
ADVERTISING - 1.7%
200,000 Omnicom Group, Inc................................. $ 9,000,000
AEROSPACE & DEFENSE - 5.5%
100,000 Lockheed Martin Corporation........................ 7,587,500
90,000 McDonnell Douglas Corporation...................... 8,246,250
140,000 Raytheon Company................................... 7,175,000
100,000 Rockwell International Corporation................. 5,887,500
------------
28,896,250
BANKING & FINANCE - 4.6%
100,000 BankAmerica Corporation............................ 7,750,000
120,000 Chemical Banking Corporation....................... 8,460,000
30,000 Wells Fargo & Company.............................. 7,830,000
------------
24,040,000
CASINOS - 1.2%
150,000 Mirage Resorts, Inc.*.............................. 6,581,250
SECURITY EQUITY FUND - EQUITY SERIES
(CONTINUED)
NUMBER OF MARKET
SHARES COMMON STOCKS (CONTINUED) VALUE
CHEMICALS - BASIC - 2.9%
120,000 Hercules, Inc...................................... $ 7,440,000
50,000 Monsanto Company................................... 7,675,000
------------
15,115,000
CHEMICALS - SPECIALTY - 4.2%
240,000 Cabot Corporation.................................. 7,320,000
170,000 Morton International, Inc.......................... 6,523,750
200,000 Praxair,Inc........................................ 7,975,000
------------
21,818,750
COMMUNICATION EQUIPMENT - 1.5%
60,000 U.S. Robotics Corporation*......................... 7,755,000
COMPUTER SERVICES - 4.2%
150,000 Ceridian Corporation*.............................. 6,450,000
100,000 Computer Sciences Corporation*..................... 7,037,500
150,000 General Motors Corporation, (Cl.E)................. 8,550,000
------------
22,037,500
COMPUTER SOFTWARE - 1.9%
65,000 Microsoft Corporation*............................. 6,703,125
75,000 Oracle Corporation*................................ 3,534,375
------------
10,237,500
CONGLOMERATE - 6.0%
160,000 AlliedSignal, Inc.................................. 9,460,000
150,000 American Standard Companies*....................... 4,387,500
120,000 Canadian Pacific, Ltd.............................. 2,400,000
170,000 Cooper Industries, Inc............................. 6,630,000
400,000 U.S. Industries, Inc.*............................. 8,300,000
------------
31,177,500
CONSUMER SERVICES - 1.0%
300,000 ADT, Ltd.*......................................... 5,287,500
ELECTRICAL MACHINERY & ELECTRONIC COMPONENTS - 1.8%
120,000 General Electric Company........................... 9,345,000
ELECTRONICS - 1.3%
140,000 Varian Associates, Inc............................. 6,982,500
ENTERTAINMENT - 2.2%
240,000 Carnival Corporation (CI.A)........................ 6,600,000
80,000 The Walt Disney Company............................ 5,110,000
------------
11,710,000
FERTILIZER - 1.1%
90,000 Potash Corporation of Saskatchewan, Inc............ 5,625,000
SEE ACCOMPANYING NOTES.
- --------------------------------------------------------------------------------
15
<PAGE>
STATEMENTS OF NET ASSETS
- --------------------------------------------------------------------------------
MARCH 31, 1996
(UNAUDITED)
SECURITY EQUITY FUND - EQUITY SERIES
(CONTINUED)
NUMBER OF MARKET
SHARES COMMON STOCKS (CONTINUED) VALUE
FINANCE - 1.2%
50,000 Federal National Mortgage Association.............. $ 6,375,000
FOOD & BEVERAGES - 6.4%
100,000 Anheuser-Busch Companies, Inc...................... 6,737,500
100,000 CPC International, Inc............................. 6,937,500
150,000 Heinz (H.J.) Company............................... 4,968,750
130,000 PepsiCo, Inc....................................... 8,222,500
200,000 Sara Lee Corporation............................... 6,525,000
------------
33,391,250
FOOD WHOLESALE - 0.0%
4,000 Earthgrains Company*............................... 119,500
HOSPITAL MANAGEMENT & SERVICES - 2.3%
200,000 Caremark International, Inc........................ 5,025,000
125,000 Columbia HCA Healthcare Corporation................ 7,218,750
------------
12,243,750
HOUSEHOLD PRODUCTS - 2.2%
100,000 Gillette Company................................... 5,175,000
75,000 Procter & Gamble Company........................... 6,356,250
------------
11,531,250
INSURANCE - 4.7%
80,000 American International Group, Inc.................. 7,490,000
240,000 Equitable Companies, Inc........................... 5,820,000
127,500 Jefferson-Pilot Corporation........................ 6,869,063
133,000 TIG Holdings, Inc.................................. 4,322,500
------------
24,501,563
MACHINERY - 1.7%
210,000 Deere & Company.................................... 8,767,500
MANUFACTURING - 1.7%
90,000 Corning, Inc....................................... 3,150,000
217,500 Pall Corporation................................... 5,573,438
------------
8,723,438
MEDICAL INSTRUMENTS & SUPPLIES - 3.0%
200,000 Allergan, Inc...................................... 7,375,000
180,000 Baxter International, Inc.......................... 8,145,000
------------
15,520,000
MOTOR VEHICLES & EQUIPMENT - 0.7%
110,000 Ford Motor Company................................. 3,781,250
NATURAL GAS - 1.3%
170,000 Coastal Corporation................................ 6,715,000
OIL & GAS PIPELINES - 1.3%
120,000 Mapco, Inc......................................... 6,705,000
NUMBER OF MARKET
SHARES COMMON STOCKS (CONTINUED) VALUE
PAINT & ALLIED PRODUCTS - 1.5%
175,000 Sherwin-Williams Company........................... $ 7,765,625
PETROLEUM REFINING - 2.9%
70,000 Mobil Corporation.................................. 8,111,250
50,000 Royal Dutch Petroleum Company ADR.................. 7,062,500
------------
15,173,750
PHARMACEUTICALS - 6.5%
80,000 American Home Products Corporation................. 8,670,000
115,000 Merck & Company, Inc............................... 7,158,750
200,000 Pharmacia & Upjohn, Inc............................ 7,975,000
90,000 Schering-Plough Corporation........................ 5,231,250
100,000 SmithKline Beecham ADR PLC......................... 5,150,000
------------
34,185,000
PHOTOGRAPHIC EQUIPMENT & SUPPLIES - 1.4%
100,000 Eastman Kodak Company.............................. 7,100,000
RESTAURANTS & FOOD SERVICE - 2.6%
170,000 McDonald's Corporation............................. 8,160,000
305,000 Wendy's International, Inc......................... 5,528,125
------------
13,688,125
RETAIL TRADE - 5.8%
200,000 Albertson's, Inc................................... 7,425,000
235,000 Federated Department Stores, Inc.*................. 7,578,750
50,000 May Department Stores Company (The)................ 2,412,500
220,000 Safeway, Inc.*..................................... 6,270,000
200,000 Walgreen Company................................... 6,525,000
------------
30,211,250
SHOES - 0.9%
60,000 Nike, Inc. (Cl.B).................................. 4,875,000
TELECOMMUNICATIONS - 2.7%
300,000 Frontier Corporation............................... 9,450,000
125,000 Sprint Corporation................................. 4,750,000
------------
14,200,000
TOYS & SPORTING GOODS - 0.8%
162,500 Mattel, Inc........................................ 4,407,813
TRANSPORTATION - 2.6%
85,000 Burlington Northern Santa Fe....................... 6,980,625
100,000 Union Pacific Corporation.......................... 6,862,500
------------
13,843,125
WHOLESALE TRADE - 0.8%
130,000 Sysco Corporation.................................. 4,273,750
------------
Total common stocks - (cost $359,881,289) - 96.1%.. 503,706,689
SEE ACCOMPANYING NOTES.
- --------------------------------------------------------------------------------
16
<PAGE>
STATEMENTS OF NET ASSETS
- --------------------------------------------------------------------------------
MARCH 31, 1996
(UNAUDITED)
SECURITY EQUITY FUND - EQUITY SERIES
(CONTINUED)
PRINCIPAL
AMOUNT OR
NUMBER OF MARKET
SHARES COMMERCIAL PAPER VALUE
$900,000 South Carolina Electric & Gas Company,
5.195%, 4-11-96.................................. $ 898,441
------------
Total commercial paper - (cost $898,441) - 0.2%.... 898,441
------------
Total investments - (cost $360,779,730) - 96.3%.... 504,605,130
Cash and other assets, less liabilities - 3.7%..... 19,231,090
------------
Total net assets - 100.0%.......................... $523,836,220
============
SECURITY EQUITY FUND - GLOBAL SERIES
PREFERRED STOCKS
GERMANY - 1.6%
2,300 Fielmann AG*....................................... $ 109,375
1,130 SAP AG*............................................ 162,741
228 Sto AG............................................. 104,872
-----------
376,988
-----------
Total preferred stocks - (cost $409,816) - 1.6%.... 376,988
COMMON STOCKS
AUSTRALIA - 0.5%
25,600 QBE Insurance Group Ltd............................ 127,906
AUSTRIA - 2.3%
4,900 Bank Austria AG*................................... 216,149
4,100 Creditanstalt-Bankverein*.......................... 263,176
300 Wolford AG*........................................ 60,232
-----------
539,557
CANADA - 0.6%
8,200 Jetform Corporation*............................... 142,475
CHILE - 1.2%
18,800 Banco Osorno y La Union ADR........................ 291,400
FRANCE - 5.6%
2,160 Alcatel Alstho*.................................... 200,418
931 Cetelem............................................ 181,686
70 Grand Optical Photoservice......................... 8,207
4,000 Lafarge*........................................... 265,024
4,400 SGS-Thomson Microelectronics N.V*.................. 155,644
SECURITY EQUITY FUND - GLOBAL SERIES
(CONTINUED)
NUMBER OF MARKET
SHARES COMMON STOCKS (CONTINUED) VALUE
FRANCE (CONTINUED)
500 Sidel S.A.*........................................ $ 127,782
2,120 Soclete Generale de Surveillance Holdings S.A. "B"* 235,930
1,900 Synthelabo*........................................ 149,901
-----------
1,324,592
GERMANY - 2.7%
9,200 Continental AG..................................... 161,975
420 Daimler-Benz AG*................................... 228,465
1,160 G.M. Pfaff AG*..................................... 63,650
540 Hoechst AG*........................................ 191,316
-----------
645,406
GREECE - 0.8%
3,900 Ergo Bank S.A.*.................................... 191,200
HONG KONG - 0.6%
160,000 National Mutual Asia, Ltd.......................... 145,846
HUNGARY - 1.1%
15,400 OTP Rt.*........................................... 153,581
2,600 Pick Szeged Rt.*................................... 123,391
-----------
276,972
INDONESIA - 1.2%
86,500 PT Kawasan Industri Jababeka....................... 144,352
51,500 PT Semen Ciblnog*.................................. 144,031
-----------
288,383
IRELAND - 2.2%
31,400 Allied Irish Banks Plc............................. 158,105
148,300 Jefferson Smurfit.................................. 359,359
-----------
517,464
ISRAEL - 1.6%
80 Africa-Israel Investments, Ltd.*................... 81,032
17,000 Clal Industries Ltd................................ 97,272
2,120 Koor Industries Ltd................................ 201,630
-----------
379,934
ITALY - 0.8%
15,000 Bulgari SPA........................................ 188,948
JAPAN - 23.4%
26,000 Amada Company, Ltd................................. 274,093
6,400 Amway Japan, Ltd................................... 322,418
4,000 CSK Corporation.................................... 108,592
4,000 H.I.S. Company, Ltd................................ 226,514
30,000 Hlno Motors, Ltd................................... 265,883
89,000 Kawasaki Kisen Kaisha, Ltd......................... 300,569
81,000 Kawasaki Steel Corporation......................... 289,421
28,000 Komatsu Fork Lift Company, Ltd..................... 191,996
SEE ACCOMPANYING NOTES.
- --------------------------------------------------------------------------------
17
<PAGE>
STATEMENTS OF NET ASSETS
- --------------------------------------------------------------------------------
MARCH 31, 1996
(UNAUDITED)
SECURITY EQUITY FUND - GLOBAL SERIES
(CONTINUED)
NUMBER OF MARKET
SHARES COMMON STOCKS (CONTINUED) VALUE
JAPAN (CONTINUED)
20,000 Matsushita Electric Industrial Company, Ltd........ $ 324,657
14,000 Matsushita Refrigeration Company, Ltd.............. 104,749
15,000 Matsuzakaya Company, Ltd........................... 169,326
73,000 Mitsui Engineering and Shipbuilding................ 215,888
80 NTT Data Communications Systems Corporation........ 243,306
9,000 National House Industrial Corporation.............. 152,813
25,000 Nippon Chemi-Con Corporation....................... 156,265
9,000 Nippon Electric Glass Company, Ltd................. 164,568
83,000 Nippon Steel Corporation........................... 284,952
10,000 Nitto Denko Corporation............................ 147,402
8,800 Paris Mlkl, Inc.................................... 336,599
2,600 Ryohin Keikaku Company, Ltd........................ 206,176
33,000 Shinmaywa Industries, Ltd.......................... 292,471
3,700 Sony Corporation................................... 220,571
11,000 Sumitomo Forestry Company.......................... 168,299
38,000 Sumitomo Reality and Development Company........... 291,053
12,000 Yamato Kogyo Company, Ltd.......................... 114,190
-----------
5,572,771
MEXICO - 2.1%
221,000 Grupo Industrial Maseco S.A. de C.V.*.............. 186,223
38,900 Tubos De Acero De Mexico S.A. ADR*................. 306,338
-----------
492,561
NETHERLANDS - 4.1%
8,100 ABN AMRO Holdings N.V.*............................ 402,795
2,900 Baan Company, N.V.*................................ 167,656
11,400 Elsevier N.V....................................... 174,483
6,750 Philips Electronics N.V............................ 245,417
-----------
990,351
NEW ZEALAND - 1.5%
215,100 Brierley Investments, Ltd.......................... 205,046
47,500 Fisher & Paykel Industries, Ltd.................... 152,011
-----------
357,057
NORWAY - 1.8%
32,300 Fokus Banken AS*................................... 176,357
19,800 Saga Petroleum AS*................................. 253,280
-----------
429,637
NUMBER OF MARKET
SHARES COMMON STOCKS (CONTINUED) VALUE
PHILIPPINES - 1.7%
230,100 C & P Homes, Inc................................... $ 173,918
374,500 Filinvest Land, Inc.*.............................. 175,569
110,100 Universal Robina Corporation*...................... 53,723
-----------
403,210
POLAND - 3.0%
8,900 Bank Rozwoju Eksportu S.A.*........................ 189,369
2,500 Bank Slaski S.A.*.................................. 176,989
8,700 Debica S.A.*....................................... 212,039
1,520 Zaklady Plwowarski w Zywcu S.A.*................... 125,250
-----------
703,647
PORTUGAL - 1.3%
14,300 Portugal Telecom S.A. ADR*......................... 322,976
RUSSIA - 0.5%
5,900 Lukoll Oil Company ADR*............................ 111,097
SOUTH AFRICA - 0.7%
2,900 Rustenburg Platinum Holdings, Ltd.................. 51,037
6,666 Rustenburg Platinum Holdings, Ltd. ADR............. 117,291
-----------
168,328
SPAIN - 1.9%
5,500 Repsol S.A......................................... 207,397
15,400 Telefonica de Espana............................... 244,444
-----------
451,841
SWEDEN - 0.8%
4,250 Astra AB........................................... 196,611
SWITZERLAND - 2.2%
150 Nestle S.A......................................... 169,103
21 Roche Holdings AG*................................. 174,293
165 Union Bank of Switzerland.......................... 182,964
-----------
526,360
THAILAND - 1.3%
31,000 Krung Thai Bank Public Company, Ltd.*.............. 146,128
18,800 Total Access Communication PLC*.................... 165,440
-----------
311,568
UNITED KINGDOM - 4.2%
157,500 Aegis Group Plc*................................... 110,609
22,800 Antofagasta Holdings Plc........................... 126,355
9,700 Bluebird Toys Plc*................................. 41,910
22,200 D.F.S. Furniture Company Plc....................... 163,024
SEE ACCOMPANYING NOTES.
- --------------------------------------------------------------------------------
18
<PAGE>
STATEMENTS OF NET ASSETS
- --------------------------------------------------------------------------------
MARCH 31, 1996
(UNAUDITED)
SECURITY EQUITY FUND - GLOBAL SERIES
(CONTINUED)
NUMBER OF MARKET
SHARES COMMON STOCKS (CONTINUED) VALUE
UNITED KINGDOM (CONTINUED)
13,400 RTZ Corporation Plc................................ $ 194,144
1,700 SmithKline Beecham ADR............................. 87,550
72,500 Tomkins Plc........................................ 280,035
-----------
1,003,627
UNITED STATES - 19.8%
1,000 AMR Corporation*................................... 89,500
1,600 AlliedSignal, Inc.................................. 94,600
1,600 Aluminum Company of America........................ 100,200
2,200 American Express Company........................... 108,625
1,000 American International Group....................... 93,625
1,700 Amgen, Inc.*....................................... 98,706
1,900 Bank of New York Company, Inc...................... 97,850
1,200 Boeing Company..................................... 103,950
4,900 Borders Group, Inc.*............................... 139,650
2,000 Boston Scientific Corporation*..................... 92,000
900 Chubb Corporation.................................. 84,488
1,200 Citicorp........................................... 96,000
1,300 Computer Associates International, Inc............. 93,113
1,400 Conseco, Inc....................................... 101,325
2,000 Crown Cork & Seal Company, Inc..................... 97,500
2,800 Deere & Company.................................... 116,900
2,100 Diamond Offshore Drilling, Inc.*................... 90,038
1,200 Digital Equipment Corporation*..................... 66,150
2,400 Dole Food Company.................................. 92,400
2,200 Dover Corporation.................................. 100,650
3,100 Ecolab, Inc........................................ 93,000
1,800 Eli Lilly & Company................................ 117,000
1,200 FMC Corporation*................................... 90,150
1,600 Fluor Corporation.................................. 109,200
1,500 Hercules, Inc...................................... 93,000
1,400 Hershey Foods Corporation.......................... 104,300
1,900 Honeywell, Inc..................................... 104,975
1,600 Intel Corporation.................................. 90,900
1,100 Johnson & Johnson.................................. 101,475
1,300 Lockheed Martin Corporation........................ 98,638
2,900 Loral Corporation.................................. 142,100
1,800 Meredith Corporation............................... 74,250
2,200 Millipore Corporation.............................. 84,150
900 Mobil Corporation.................................. 104,288
NUMBER OF MARKET
SHARES COMMON STOCKS (CONTINUED) VALUE
UNITED STATES, (CONTINUED)
1,200 NationsBank Corporation............................ $ 96,150
1,300 Nike, Inc. (Cl. B)................................. 105,625
1,600 PepsiCo, Inc....................................... 101,200
1,700 Pioneer Hi-Bred International, Inc................. 89,463
1,000 Procter & Gamble Company........................... 84,750
1,500 Ralston Purina Group............................... 100,312
1,900 Raytheon Company................................... 97,372
2,600 Safeco Corporation................................. 87,263
3,200 Safeway, Inc.*..................................... 91,200
1,200 Schlumberger, Ltd.................................. 94,950
2,100 Service Corporation International.................. 102,375
2,200 Union Carbide Corporation.......................... 109,175
2,200 Williams Companies, Inc............................ 110,825
600 Xerox Corporation.................................. 75,300
-----------
4,710,656
-----------
Total common stocks - (cost $19,929,654) - 91.5%... 21,812,381
-----------
Total investments - (cost $20,339,470) - 93.1%..... 22,189,369
Cash and other assets less liabilities - 6.9%...... 1,653,744
-----------
Total net assets - 100.0%.......................... $23,843,113
===========
INVESTMENT CONCENTRATION
At March 31, 1996, Global Series' investment concentration, by industry, was as
follows:
Banking................................................................ 12.5%
Capital Equipment...................................................... 11.3%
Consumer Durables...................................................... 8.4%
Consumer Nondurables................................................... 7.1%
Construction and Housing............................................... 1.4%
Electrical and Electronics............................................. 4.9%
Energy................................................................. 3.7%
Environmental Technology............................................... 0.4%
Financial Services..................................................... 5.1%
Healthcare and Personal Care........................................... 4.3%
Materials.............................................................. 11.4%
Merchandising.......................................................... 5.1%
Multi-Industry......................................................... 4.6%
Real Estate............................................................ 2.6%
Services............................................................... 5.6%
Telecommunications..................................................... 3.1%
Transportation......................................................... 1.6%
Cash and other assets, less liabilities................................ 6.9%
------
Total net assets....................................................... 100.0%
======
SEE ACCOMPANYING NOTES.
- --------------------------------------------------------------------------------
19
<PAGE>
STATEMENTS OF NET ASSETS
- --------------------------------------------------------------------------------
MARCH 31, 1996
(UNAUDITED)
SECURITY EQUITY FUND - ASSET ALLOCATION SERIES
PRINCIPAL
AMOUNT OR
NUMBER OF MARKET
SHARES CORPORATE BONDS VALUE
BROKERAGE - 1.2%
$50,000 Merrill Lynch, 8.0% - 2007......................... $ 53,437
FINANCIAL SERVICES - 0.6%
$25,000 MCN Investment Corporation, 6.32% - 2003........... 24,219
----------
Total corporate bonds (cost $78,785) - 1.8% 77,656
COMMON STOCKS
AUTO PARTS & SUPPLIES - 2.9%
1,400 Dana Corporation................................... 46,725
400 Eaton Corporation.................................. 24,100
800 Modine Manufacturing Company....................... 21,200
1,500 Simpson Industries................................. 14,062
1,000 Walbro Corporation................................. 20,375
----------
126,462
BUILDING MATERIALS - 3.5%
400 Ameron, Inc........................................ 14,950
1,100 Apogee Enterprises, Inc............................ 23,925
700 Armstrong World Industries, Inc.................... 43,487
700 Crane Company...................................... 28,263
600 Owens-Corning Corporation*......................... 24,075
1,200 Ply Gem Industries................................. 17,550
----------
152,250
CHEMICALS - BASIC - 3.1%
300 Arco Chemical Company.............................. 15,562
200 Dow Chemicals...................................... 17,375
300 DuPont (E.I.) de Nemours & Company................. 24,900
600 Lyondell Petrochemical Company..................... 18,300
300 Olin Corporation................................... 26,100
600 Union Carbide Corporation.......................... 29,775
----------
132,012
COMPUTER SYSTEMS - 4.3%
500 Apple Computer, Inc................................ 12,281
500 Compaq Computer Corporation*....................... 19,312
400 Dell Computer Corporation*......................... 13,400
300 Hewlett-Packard Company............................ 28,200
400 International Business Machines Corporation........ 44,450
500 Quantum Corporation*............................... 9,000
500 SCI Systems, Inc.*................................. 18,313
600 Sequent Computer Systems, Inc.*.................... 6,975
600 Sun Microsystems, Inc.*............................ 26,250
700 Tandem Computers, Inc.*............................ 6,213
----------
184,394
NUMBER OF MARKET
SHARES COMMON STOCKS (CONTINUED) VALUE
ELECTRONICS - 4.2%
300 AMP, Inc........................................... $ 12,412
700 Arrow Electronics, Inc.*........................... 32,900
600 Augat, Inc......................................... 10,500
800 Avnet, Inc......................................... 38,600
1,000 Core Industries, Inc............................... 14,750
200 Fluke (John) Manufacturing Company................. 7,625
400 Harris Corporation................................. 24,750
600 Pioneer Standard Electronics, Inc.................. 9,225
300 Varian Associates, Inc............................. 14,963
400 Wyle Electronics................................... 13,850
----------
179,575
ENTERTAINMENT - 0.6%
400 The Walt Disney Company............................ 25,550
HOUSING - HOME BUILDING - 2.8%
750 Clayton Homes, Inc................................. 15,656
700 Fleetwood Enterprises, Inc......................... 17,325
1,200 Hechinger Company.................................. 4,350
500 Hughes Supply, Inc................................. 14,312
400 Lowes Companies, Inc............................... 14,300
400 Oakwood Homes Corporation.......................... 19,850
600 PPG Industries, Inc................................ 29,325
100 Sherwin-Williams Company........................... 4,438
----------
119,556
MACHINERY - 4.0%
1,500 Baldwin Technology, Inc.*.......................... 6,281
900 Bearings, Inc...................................... 25,538
300 Briggs & Stratton Corporation...................... 12,938
700 Commercial Intertech Corporation................... 13,212
700 Dover Corporation.................................. 32,025
500 Gatx Corporation................................... 23,000
800 Graco, Inc......................................... 15,600
600 Parker-Hannifin Corporation........................ 22,500
600 Trinova Corporation................................ 19,125
----------
170,219
MINING & METALS - 2.6%
300 Alcan Aluminum, Ltd................................ 9,675
300 Aluminum Company of America........................ 18,787
300 Asarco, Inc........................................ 10,500
300 Ashland Coal, Inc.................................. 7,012
700 Phelps Dodge Corporation........................... 48,038
300 Reynolds Metals Company............................ 17,738
----------
111,750
SEE ACCOMPANYING NOTES.
- --------------------------------------------------------------------------------
20
<PAGE>
STATEMENTS OF NET ASSETS
- --------------------------------------------------------------------------------
MARCH 31, 1996
(UNAUDITED)
SECURITY EQUITY FUND - ASSET ALLOCATION SERIES
(CONTINUED)
PRINCIPAL
AMOUNT OR
NUMBER OF MARKET
SHARES COMMON STOCKS (CONTINUED) VALUE
RECREATION - 3.6%
1,400 Brunswick Corporation.............................. $ 32,200
1,300 CPI Corporation.................................... 20,800
800 Harcourt General, Inc.............................. 36,300
800 Harley Davidson, Inc............................... 31,100
800 King World Productions, Inc.*...................... 33,100
----------
153,500
SHOES - 2.6%
2,000 J Baker, Inc....................................... 15,000
1,100 Brown Group, Inc................................... 14,850
500 Nike, Inc. (Cl. B)................................. 40,625
700 Reebok International, Ltd.......................... 19,338
800 Wolverine Worldwide, Inc........................... 22,400
----------
112,213
STEEL - 2.2%
500 Birmingham Steel Corporation....................... 7,375
400 Carpenter Technology............................... 15,400
400 Cleveland Cliffs, Inc.............................. 17,700
400 Commercial Metals Company.......................... 11,500
300 Lukens Steel Company............................... 7,462
100 Nucor Corporation.................................. 5,913
800 Quanex Corporation................................. 17,500
1,000 Steel Technologies, Inc............................ 11,750
----------
94,600
TELECOMMUNICATIONS - 1.9%
400 Ameritech Corporation.............................. 21,800
300 Bell Atlantic Corporation.......................... 18,525
500 GTE Corporation.................................... 21,938
400 NYNEX Corporation.................................. 19,950
----------
82,213
----------
Total common stocks - (cost $1,613,922) - 38.3%.... 1,644,294
U.S. GOVERNMENT & AGENCIES
FEDERAL HOME LOAN MORTGAGE CORPORATION - 3.4%
$100,000 7.0% - 2020........................................ 99,312
$ 50,000 7.0% - 2021........................................ 48,776
----------
148,088
FINANCING CORPORATION - 0.6%
$ 75,000 0% - 2010.......................................... 26,503
FEDERAL NATIONAL MORTGAGE ASSOCIATION - 8.4%
$ 46,511 6.5% - 2018........................................ 44,443
$ 50,000 6.5% - 2018........................................ 48,421
$130,000 6.95% - 2020....................................... 125,850
$ 40,000 7.5% - 2020........................................ 40,012
$100,000 8.8% - 2025........................................ 102,531
----------
361,257
PRINCIPAL
AMOUNT OR
NUMBER OF MARKET
SHARES U.S. GOVERNMENT & AGENCIES (CONTINUED) VALUE
U.S. TREASURY BILLS - 18.6%
$800,000 4.85% - 4-4-96..................................... $ 739,349
4.87% - 4-4-96..................................... 59,947
----------
799,296
U.S. TREASURY NOTES - 0.6%
$ 25,000 6.38% - 2002....................................... 25,144
----------
Total U.S. government & agencies
(cost $1,362,183) - 31.6%........................ 1,360,288
REAL ESTATE INVESTMENT TRUSTS
1,000 BRE Properties, Inc................................ 35,500
3,400 Cambridge Shopping Centres, Ltd.................... 21,835
1,800 Federal Realty Investment Trust.................... 40,050
4,000 First Union Real Estate Investment Trust........... 29,000
1,700 HRE Properties..................................... 25,712
1,900 MGI Properties, Inc................................ 31,825
3,100 New Plan Realty Trust.............................. 63,938
1,400 Pennsylvania Real Estate Investment Trust.......... 29,400
2,000 Santa Anita Realty Enterprises, Inc................ 30,500
2,700 Security Capital Pacific Trust..................... 59,400
3,600 United Realty Trust Dominion....................... 52,650
2,000 Washington Real Estate Investment Trust............ 32,000
1,700 Weingarten Realty Investors........................ 60,988
----------
Total real estate investment trusts
(cost $504,631) - 11.9%.......................... 512,798
FOREIGN STOCKS
BELGIUM - 5.6%
200 Fortis AG.......................................... 24,390
100 Cementbedrijven Cimenteries........................ 39,881
500 Delhaize - Le Lion................................. 21,193
100 Electrabel......................................... 22,314
250 Gevaert Photo Productions.......................... 15,409
100 Petrofina SA....................................... 28,082
150 Royale Belgium..................................... 30,158
100 Solvay SA.......................................... 57,268
----------
238,695
SEE ACCOMPANYING NOTES.
- --------------------------------------------------------------------------------
21
<PAGE>
STATEMENTS OF NET ASSETS
- --------------------------------------------------------------------------------
MARCH 31, 1996
(UNAUDITED)
SECURITY EQUITY FUND - ASSET ALLOCATION SERIES
(CONTINUED)
NUMBER OF MARKET
SHARES FOREIGN STOCKS (CONTINUED) VALUE
HONG KONG - 5.8%
3,600 Bank of East Asia.................................. $ 12,337
5,000 Cathay Pacific Airways............................. 8,793
4,000 China Light & Power Company........................ 18,052
8,000 Chinese Estates.................................... 7,242
4,000 Dicksons Concept International..................... 4,397
4,000 Hong Kong & Shanghai Hotels........................ 6,543
18,410 Hong Kong Telecommunications....................... 36,782
8,000 Hutchinson Whampoa Limited......................... 50,485
2,000 Kumagai Gumi....................................... 1,784
2,000 Lai-Sun Garment International...................... 2,289
3,000 Oriental Press Group............................... 1,358
2,000 Peregrine Investment Holdings...................... 3,220
8,000 Sun Hung Kai Properties............................ 71,641
12,000 Tai Cheung Holdings................................ 10,940
2,000 Wing Lung Bank..................................... 13,901
----------
249,764
----------
Total foreign stocks (cost $466,121) - 11.4%....... 488,459
TEMPORARY CASH INVESTMENTS
204,000 Chase Master Note Program.......................... 204,000
----------
Total temporary cash investments -
(cost $204,000) - 4.7%........................... 204,000
----------
Total investments - (cost $4,229,642) - 99.7%...... 4,287,495
Cash and other assets, less liabilities - 0.3%..... 12,294
----------
Total net assets - 100.0%.......................... $4,299,789
==========
SECURITY ULTRA FUND
COMMON STOCKS
ADVERTISING - 0.6%
6,000 Omnicom Group, Inc................................. $ 382,500
BANKS & TRUSTS - 1.4%
18,000 State Street Boston Corporation.................... 900,000
BIOTECHNOLOGY - 1.9%
12,500 Amgen, Inc.*....................................... 726,562
9,500 Genzyme Corporation/General Division............... 522,500
-----------
1,249,062
SECURITY ULTRA FUND
(CONTINUED)
NUMBER OF MARKET
SHARES COMMON STOCKS (CONTINUED) VALUE
BROKERAGE - 1.5%
38,000 Schwab (Charles) Corporation....................... $ 973,750
BUSINESS SERVICES - 9.3%
3,500 ABR Information Services, Inc.*.................... 162,750
6,500 APAC Teleservices, Inc.*........................... 463,125
9,500 Cintas Corporation................................. 475,000
11,000 Corrections Corp of America*....................... 627,000
31,500 Equifax, Inc....................................... 633,937
15,030 First Data Corporation............................. 1,059,615
11,500 Flightsafety International......................... 641,125
5,000 HBO & Company...................................... 471,250
13,500 PMT Services, Inc.*................................ 324,000
9,000 Paychex, Inc....................................... 526,500
13,500 Snap-on, Inc....................................... 631,125
-----------
6,015,427
CHEMICALS - SPECIALTY - 3.6%
17,000 Cabot Corporation.................................. 518,500
15,200 IMC Global, Inc.................................... 554,800
16,000 Praxair, Inc....................................... 638,000
11,000 Sigma-Aldrich...................................... 629,750
-----------
2,341,050
COMMUNICATION EQUIPMENT - 6.9%
11,000 Ascend Communications, Inc.*....................... 592,625
17,500 Aspect Telecommunications*......................... 800,625
9,000 Cascade Communications Corporation*................ 807,750
25,000 General Instruments Corporation*................... 684,375
14,500 Tellabs, Inc.*..................................... 701,437
6,700 U.S. Robotics Corporation*......................... 865,975
-----------
4,452,787
COMPUTER SOFTWARE - 10.0%
13,000 America Online, Inc.*.............................. 728,000
8,000 Atria Software, Inc.*.............................. 438,000
3,500 Business Objects SA ADR*........................... 297,500
12,000 Cadence Design Sys, Inc.*.......................... 529,500
13,500 Cambridge Tech Partners, Inc.*..................... 771,187
13,000 Cognos, Inc.*...................................... 737,750
29,500 Informix Corporation*.............................. 778,062
18,000 Parametric Technology Corporation*................. 704,250
6,000 Peoplesoft, Inc.*.................................. 345,000
6,500 Rational Software Corporation*..................... 256,750
9,000 Structural Dynamics Research*...................... 303,750
22,500 Viasoft, Inc.*..................................... 632,813
-----------
6,522,562
SEE ACCOMPANYING NOTES.
- --------------------------------------------------------------------------------
22
<PAGE>
STATEMENTS OF NET ASSETS
- --------------------------------------------------------------------------------
MARCH 31, 1996
(UNAUDITED)
SECURITY ULTRA FUND
(CONTINUED)
NUMBER OF MARKET
SHARES COMMON STOCKS (CONTINUED) VALUE
COMPUTER SYSTEMS - 1.9%
14,000 SCI Systems, Inc.*................................. $ 512,750
9,500 Seagate Technology, Inc.*.......................... 520,125
5,000 Verifone, Inc.*.................................... 210,000
-----------
1,242,875
DRUGS - 2.7%
23,000 Dura Pharmaceuticals, Inc.*........................ 1,141,375
10,000 Elan Corporation PLC ADR*.......................... 642,500
-----------
1,783,875
ELECTRONICS - 1.9%
15,000 Thermo Electron Corporation*....................... 892,500
6,500 Varian Associates, Inc............................. 324,188
-----------
1,216,688
ENERGY - 1.7%
30,500 Sonat, Inc......................................... 1,098,000
FINANCIAL SERVICES - 1.6%
18,000 Franklin Resources, Inc............................ 1,026,000
FOOD PROCESSING - 0.8%
20,000 IBP, Inc........................................... 512,500
HEALTH CARE - 6.2%
16,000 Cardinal Health, Inc............................... 1,060,125
9,500 McKesson Corporation............................... 486,875
15,000 Medpartners/Mullikins, Inc.*....................... 427,500
16,000 Occusystems, Inc.*................................. 364,000
6,000 Omnicare, Inc...................................... 323,250
8,300 Parexel International Corporation*................. 358,975
10,000 Phycor, Inc.*...................................... 440,000
8,500 Quintiles Transnational Corporation*............... 552,500
-----------
4,013,225
HOSPITAL SUPPLIES/MANAGEMENT - 2.6%
23,500 Community Health Systems*.......................... 963,500
21,500 Healthsouth Corporation*........................... 731,000
-----------
1,694,500
HOTEL/MOTEL - 2.6%
21,000 HFS, Inc.*......................................... 1,021,125
22,500 LaQuinta Inns, Inc................................. 660,938
-----------
1,682,063
HOUSEHOLD FURNISHING - 0.9%
24,900 Leggett & Platt, Inc............................... 569,588
NUMBER OF MARKET
SHARES COMMON STOCKS (CONTINUED) VALUE
HOUSEHOLD PRODUCTS - 0.6%
12,750 USA Detergents, Inc.*.............................. $ 414,375
INSURANCE - 3.2%
31,500 Aflac, Inc......................................... 984,375
3,100 Oxford Health Plans*............................... 272,025
15,000 Riscorp, Inc. (Cl. A)*............................. 285,000
11,500 SunAmerica, Inc.................................... 579,312
-----------
2,120,712
MANUFACTURING - 1.9%
10,500 Illinois Tool Works................................ 678,562
14,500 Millipore Corporation.............................. 554,625
-----------
1,233,187
MEDICAL - 1.9%
18,000 Guidant Corporation................................ 974,250
11,000 Spine-Tech, Inc.*.................................. 253,000
-----------
1,227,250
OFFICE EQUIPMENT & SUPPLIES - 1.8%
12,750 Diebold, Inc....................................... 505,219
16,500 Reynolds & Reynolds (Cl. A)........................ 676,500
-----------
1,181,719
OIL & GAS DRILLING - 1.0%
20,000 Noble Affliates, Inc............................... 650,000
OIL & GAS PIPELINES - 0.5%
6,000 Mapco, Inc......................................... 335,250
PACKAGING & CONTAINERS - 0.5%
9,000 Sealed Air Corporation*............................ 307,125
POLLUTION CONTROL - 1.1%
10,500 United Waste Systems, Inc.*........................ 525,000
14,500 Superior Services, Inc.*........................... 192,125
-----------
717,125
RECREATION 1.0%
16,500 Harley-Davidson, Inc............................... 641,438
RESTAURANTS - 2.9%
18,500 Boston Chicken, Inc.*.............................. 630,156
8,500 Lone Star Steakhouse & Saloon*..................... 325,125
17,000 Outback Steakhouse, Inc.*.......................... 640,688
6,750 Papa John's International, Inc.*................... 301,219
-----------
1,897,188
SEE ACCOMPANYING NOTES.
- --------------------------------------------------------------------------------
23
<PAGE>
STATEMENTS OF NET ASSETS
- --------------------------------------------------------------------------------
MARCH 31, 1996
(UNAUDITED)
SECURITY ULTRA FUND
(CONTINUED)
NUMBER OF MARKET
SHARES COMMON STOCKS (CONTINUED) VALUE
RETAIL - 7.6%
5,000 Bed Bath & Beyond, Inc.*........................... $ 263,750
10,500 Corporate Express, Inc.*........................... 346,500
27,500 General Nutrition Companies*....................... 687,500
8,000 Kohl's Corporation*................................ 507,000
10,000 The Men's Warehouse, Inc.*......................... 315,000
8,000 Nine West Group, Inc.*............................. 346,000
58,875 Staples, Inc.*..................................... 1,199,578
38,000 Sunglass Hut International*........................ 1,258,750
-----------
4,924,078
SEMICONDUCTORS - 4.1%
9,500 Altera Corporation*................................ 530,813
25,500 Atmel Corporation*................................. 650,250
23,500 International Rectifier Corporation*............... 423,000
16,000 Linear Technology Corporation...................... 668,000
13,500 Maxim Integrated Products*......................... 418,500
-----------
2,690,563
TELECOMMUNICATIONS - 5.3%
33,500 Frontier Corporation............................... 1,055,250
25,000 360 Communications Company*........................ 596,875
38,500 Worldcom, Inc.*.................................... 1,771,000
-----------
3,423,125
TRANSPORTATION - 2.0%
23,000 Southwest Airlines................................. 681,375
21,000 Illinois Central Corporation....................... 598,500
-----------
1,279,875
UTILITIES - 2.4%
15,000 AES Corporation*................................... 373,125
9,000 California Energy*................................. 239,625
19,000 Century Telephone Enterprises...................... 603,250
14,000 MCN Corporation.................................... 323,750
-----------
1,539,750
-----------
Total common stocks - (cost $52,402,233) - 95.9%... 62,259,212
-----------
Total investments - (cost $52,402,233) - 95.9%..... 62,259,212
Cash and other assets less liabilities - 4.1%...... 2,644,718
-----------
Total net assets - 100.0%.......................... $64,903,930
===========
The identified cost of investments owned at March 31, 1996, was the same for
federal income tax and financial statement purposes.
*Securities on which no cash dividend was paid during the preceding twelve
months.
ADR (American Depositary Receipt)
1 Deferred interest obligation; currently zero coupon under terms of initial
offering.
2 These securities have been segregated with the custodian to cover margin
requirements for the following open long financial futures contracts traded
on foreign exchanges as indicated below:
UNREALIZED
TYPE CONTRACTS GAIN
Financial Index - DAX (6/96) 2 $ 7,857
Financial Index - FTSE (6/96) 1 1,641
Financial Index - TOPIX (6/96) 2 18,727
-------
$28,225
=======
SEE ACCOMPANYING NOTES.
- --------------------------------------------------------------------------------
24
<PAGE>
BALANCE SHEETS
- --------------------------------------------------------------------------------
MARCH 31, 1996
(UNAUDITED)
<TABLE>
<CAPTION>
SECURITY EQUITY FUND
-------------------------------------------------------------------
SECURITY ASSET SECURITY
GROWTH AND EQUITY GLOBAL ALLOCATION ULTRA
INCOME FUND SERIES SERIES SERIES FUND
-------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
ASSETS
Investments, at value (identified cost $58,081,345,
$359,881,289, $20,339,470, $4,229,642 and
$52,402,233, respectively)............................... $70,500,362 $503,706,689 $22,189,369 $4,287,495 $62,259,212
Commercial paper, at amortized cost which
approximates market value................................ --- 898,441 --- --- ---
Cash....................................................... 1,056,692 11,756,580 887,495 1,069 2,444,525
Receivables:
Fund shares sold......................................... 3,551 322,595 1,030 5,242 35
Securities sold.......................................... 640,004 13,170,725 917,497 --- 1,754,456
Foreign forward exchange contracts....................... --- --- 28,648 --- ---
Dividends................................................ 88,369 658,092 51,599 4,532 22,688
Prepaid expenses......................................... --- --- --- 18,621 ---
Interest................................................. 290,227 35,307 2,473 6,213 7,353
Miscellaneous receivable................................. --- 9,768 --- --- ---
Foreign taxes recoverable................................ --- --- 20,416 44 ---
Variation margin......................................... --- --- --- 1,936 ---
----------- ------------ ----------- ---------- -----------
Total assets........................................... $72,579,205 $530,558,197 $24,098,527 $4,325,152 $66,488,269
=========== ============ =========== ========== ===========
LIABILITIES AND NET ASSETS
Liabilities:
Payable for:
Fund shares redeemed................................... $ 23,007 $ 6,257,192 $ 2,071 $ --- $ 194,688
Securities purchased................................... --- --- 209,743 --- 1,314,059
Other Liabilities:
Management fees........................................ 78,952 439,505 38,699 10,475 71,660
Custodian fees......................................... --- --- --- 7,844 ---
Transfer and administration fees....................... --- --- --- 697 ---
12b-1 distribution plan fees........................... 1,383 22,344 4,901 1,854 3,932
Miscellaneous fees..................................... --- 2,936 --- 4,493 ---
----------- ------------ ----------- ---------- -----------
Total liabilities 103,342 6,721,977 255,414 25,363 1,584,339
Net Assets:
Paid in capital.......................................... 56,417,327 348,655,884 21,162,366 4,084,340 50,560,785
Undistributed net investment income (loss)............... 158,197 711,996 (390,461) (59,254) (176,326)
Accumulated undistributed net realized gain on sale of
investments, futures and foreign currency transactions. 3,481,322 30,642,940 1,193,299 188,626 4,662,492
Net unrealized appreciation in value of investments,
futures and translation of assets and liabilities in
foreign currencies..................................... 12,419,017 143,825,400 1,877,909 86,077 9,856,979
----------- ------------ ----------- ---------- -----------
Net assets........................................... 72,475,863 523,836,220 23,843,113 4,299,789 64,903,930
----------- ------------ ----------- ---------- -----------
Total liabilities and net assets................... $72,579,205 $530,558,197 $24,098,527 $4,325,152 $66,488,269
=========== ============ =========== ========== ===========
CLASS "A" SHARES
Capital shares outstanding............................... 8,395,252 71,530,711 1,529,157 195,949 8,095,476
Net assets............................................... $70,843,088 $496,808,017 $17,776,977 $2,095,045 $60,218,161
Net asset value per share (net assets divided by
shares outstanding).................................... $8.44 $6.95 $11.63 $10.69 $ 7.44
Add: Selling commission (5.75% of the offering price).... 0.51 0.42 0.71 0.65 0.45
----------- ------------- ----------- ---------- -----------
Offering price per share (net asset value
divided by 94.25%)..................................... $8.95 $7.37 $12.34 $11.34 $7.89
=========== ============= =========== ========== ===========
CLASS "B" SHARES
Capital shares outstanding............................... 195,843 3,964,718 529,411 206,852 643,919
Net assets............................................... $1,632,775 $27,028,203 $6,066,136 $2,204,744 $4,685,769
Net asset value per share (net assets divided by
shares outstanding).................................... $8.34 $6.82 $11.46 $10.66 $7.28
========== ============= ============ ========== ===========
</TABLE>
SEE ACCOMPANYING NOTES.
- --------------------------------------------------------------------------------
25
<PAGE>
STATEMENTS OF OPERATIONS
- --------------------------------------------------------------------------------
FOR THE SIX MONTHS ENDED MARCH 31, 1996
(UNAUDITED)
<TABLE>
<CAPTION>
SECURITY EQUITY FUND
-----------------------------------------------------------------
SECURITY ASSET SECURITY
GROWTH AND EQUITY GLOBAL ALLOCATION ULTRA
INCOME FUND SERIES SERIES SERIES FUND
-----------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
INVESTMENT INCOME:
Interest................................................. $ 683,466 $ 516,795 $ 21,837 $ 54,768 $ 96,376
Dividends................................................ 508,878 3,833,363 149,715 31,276 157,559
---------- ----------- ---------- -------- ----------
1,192,344 4,350,158 171,552 86,044 253,935
Less foreign tax expense............................... --- --- (17,006) --- ---
---------- ----------- ---------- -------- ----------
Total investment income.............................. 1,192,344 4,350,158 154,546 86,044 253,935
EXPENSES:
Management fees.......................................... 453,709 2,601,229 222,854 19,472 410,465
Custodian fees........................................... --- --- --- 7,440 ---
Transfer/maintenance fees................................ --- --- --- 2,687 ---
Administration fees...................................... --- --- --- 15,876 ---
Professional fees........................................ --- --- --- 5,952 ---
Reports to shareholders.................................. --- --- --- 678 ---
Registration fees........................................ --- --- --- 12,321 ---
Other expenses........................................... --- --- --- 2,576 ---
12b-1 distribution plan fees (Class B)................... 6,862 122,910 28,016 9,620 19,796
Interest................................................. --- --- --- 193 ---
---------- ----------- ---------- -------- ----------
460,571 2,724,139 250,870 76,815 430,261
Reimbursement of expenses and management fees waived..... --- --- --- (28,383) ---
---------- ----------- ---------- -------- ----------
Total expenses......................................... 460,571 2,724,139 250,870 48,432 430,261
---------- ----------- ---------- -------- ----------
Net investment income (loss)......................... 731,773 1,626,019 (96,324) 37,612 (176,326)
NET REALIZED AND UNREALIZED GAIN (LOSS):
Net realized gain (loss) during the period on:
Investments............................................ 3,847,748 39,285,680 796,896 150,731 7,352,679
Foreign currency transactions.......................... --- --- 496,842 (3,385) ---
Futures contracts...................................... --- --- --- 41,071 ---
---------- ----------- ---------- -------- ----------
Net realized gains................................... 3,847,748 39,285,680 1,293,738 188,417 7,352,679
Net change in unrealized appreciation (depreciation)
during the period on:
Investments............................................ 2,770,007 30,158,245 1,172,411 (32,166) (4,969,663)
Translation of assets and liabilities in foreign
currencies........................................... --- --- (225,672) --- ---
Futures contracts...................................... --- --- --- 41,770 ---
---------- ----------- ---------- -------- ----------
Net unrealized appreciation (depreciation)........... 2,770,007 30,158,245 946,739 9,604 (4,969,663)
---------- ----------- ---------- -------- ----------
Net gain........................................... 6,617,755 69,443,925 2,240,477 198,021 2,383,016
---------- ----------- ---------- -------- ----------
Net increase in net assets resulting from
operations..................................... $7,349,528 $71,069,944 $2,144,153 $235,633 $2,206,690
========== =========== ========== ======== ==========
</TABLE>
SEE ACCOMPANYING NOTES.
- --------------------------------------------------------------------------------
26
<PAGE>
STATEMENTS OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
FOR THE SIX MONTHS ENDED MARCH 31, 1996
(UNAUDITED)
<TABLE>
<CAPTION>
SECURITY EQUITY FUND
------------------------------------------------------------------------
SECURITY ASSET SECURITY
GROWTH AND EQUITY GLOBAL ALLOCATION ULTRA
INCOME FUND SERIES SERIES SERIES FUND
------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
INCREASE IN NET ASSETS FROM OPERATIONS:
Net investment income (loss).......................... $ 731,773 $ 1,626,019 $ (96,324) $ 37,612 $ (176,326)
Net realized gain..................................... 3,847,748 39,285,680 1,293,738 188,417 7,352,679
Unrealized appreciation (depreciation) during the
period.............................................. 2,770,007 30,158,245 946,739 9,604 (4,969,663)
------------------------------------------------------------------------
Net increase in net assets resulting from operations 7,349,528 71,069,944 2,144,153 235,633 2,206,690
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income
Class A............................................. (584,778) (4,154,232) (357,503) (59,838) ---
Class B............................................. (6,065) (64,778) (72,239) (50,820) ---
Net realized gain
Class A............................................. (2,290,058) (33,372,465) (224,881) (30,467) (7,109,015)
Class B............................................. (44,994) (1,836,645) (77,719) (31,088) (500,515)
------------------------------------------------------------------------
Total distributions to shareholders................. (2,925,895) (39,428,120) (732,342) (172,213) (7,609,530)
CAPITAL SHARE TRANSACTIONS (A):
Proceeds from sale of shares
Class A............................................. 2,126,559 162,802,532 2,185,434 303,782 8,542,237
Class B............................................. 407,722 40,565,950 588,856 560,026 1,521,132
Dividends reinvested
Class A............................................. 2,626,207 34,973,082 571,678 89,983 6,772,088
Class B............................................. 50,172 1,882,237 149,212 81,908 500,487
Shares redeemed
Class A............................................. (5,675,348) (171,462,755) (2,284,944) (234,013) (16,088,239)
Class B............................................. (42,675) (36,193,147) (473,310) (209) (2,421,291)
------------------------------------------------------------------------
Net increase (decrease) from capital share
transactions...................................... (507,363) 32,567,899 736,926 801,477 (1,173,586)
------------------------------------------------------------------------
Total increase (decrease) in net assets........... 3,916,270 64,209,723 2,148,737 864,897 (6,576,426)
NET ASSETS:
Beginning of period................................... 68,559,593 459,626,497 21,694,376 3,434,892 71,480,356
------------------------------------------------------------------------
End of period......................................... $72,475,863 $523,836,220 $23,843,113 $4,299,789 $64,903,930
========================================================================
Undistributed net investment income (loss) at end of
period................................................ $158,197 $711,996 $(390,461) $(59,254) $(176,326)
========================================================================
(a) Shares issued and redeemed
Shares sold
Class A......................................... 259,483 24,376,911 196,465 28,663 1,140,086
Class B......................................... 50,626 6,148,492 53,343 53,242 212,389
Dividends reinvested
Class A......................................... 332,220 5,483,525 52,399 8,800 996,416
Class B......................................... 6,442 300,149 13,842 8,015 75,103
Shares redeemed
Class A......................................... (698,419) (25,564,675) (205,717) (22,354) (2,094,788)
Class B......................................... (5,205) (5,484,396) (43,481) (20) (312,918)
------------------------------------------------------------------------
Net increase (decrease)....................... (54,853) 5,260,006 66,851 76,346 16,288
========================================================================
</TABLE>
SEE ACCOMPANYING NOTES.
- --------------------------------------------------------------------------------
27
<PAGE>
STATEMENTS OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
FOR THE YEAR ENDED SEPTEMBER 30, 1995
<TABLE>
<CAPTION>
SECURITY EQUITY FUND
------------------------------------------------------------------------
SECURITY ASSET SECURITY
GROWTH AND EQUITY GLOBAL ALLOCATION ULTRA
INCOME FUND SERIES SERIES SERIES FUND
------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
INCREASE IN NET ASSETS FROM OPERATIONS:
Net investment income (loss).......................... $ 1,407,287 $ 3,304,987 $ (91,058) $ 13,792 $ (223,015)
Net realized gain..................................... 1,984,078 27,972,416 419,260 61,764 4,989,643
Unrealized appreciation during the period............. 8,482,309 69,736,879 95,995 76,473 8,466,565
------------------------------------------------------------------------
Net increase in net assets resulting from operations 11,873,674 101,014,282 424,197 152,029 13,233,193
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income
Class A............................................. (1,378,072) --- --- --- ---
Class B............................................. (11,951) --- --- --- ---
Net realized gain
Class A............................................. (1,912,997) (26,300,092) (347,497) --- (1,149,264)
Class B............................................. (23,632) (690,558) (84,333) --- (28,504)
------------------------------------------------------------------------
Total distributions to shareholders................. (3,326,652) (26,990,650) (431,830) --- (1,177,768)
CAPITAL SHARE TRANSACTIONS (A):
Proceeds from sale of shares
Class A............................................. 2,681,709 159,433,767 4,130,645 1,846,588 97,988,749
Class B............................................. 635,799 36,310,779 3,765,671 1,469,193 10,247,969
Dividends reinvested
Class A............................................. 2,965,256 24,498,993 340,567 --- 1,088,376
Class B............................................. 34,468 690,184 84,001 --- 28,502
Shares redeemed
Class A............................................. (11,959,939) (172,929,497) (8,249,891) (28,739) (105,077,941)
Class B............................................. (340,406) (28,090,274) (2,457,097) (4,179) (6,799,714)
------------------------------------------------------------------------
Net increase (decrease) from capital share
transactions................................... (5,983,113) 19,913,952 (2,386,104) 3,282,863 (2,524,059)
------------------------------------------------------------------------
Total increase (decrease) in net assets......... 2,563,909 93,937,584 (2,393,737) 3,434,892 9,531,366
NET ASSETS:
Beginning of period................................... 65,995,684 365,688,913 24,088,113 --- 61,948,990
------------------------------------------------------------------------
End of period......................................... $68,559,593 $459,626,497 $21,694,376 $3,434,892 $71,480,356
========================================================================
Undistributed net investment income at end of period.. $17,267 $3,304,987 $135,605 $13,792 $---
========================================================================
(a) Shares issued and redeemed
Shares sold
Class A......................................... 380,257 27,957,351 395,288 183,574 13,881,834
Class B......................................... 91,007 6,432,534 366,335 146,016 1,427,321
Dividends reinvested
Class A......................................... 434,705 4,858,020 33,389 --- 164,781
Class B......................................... 5,126 138,507 8,325 --- 4,328
Shares redeemed
Class A......................................... (1,697,766) (30,292,120) (799,467) (2,733) (14,892,245)
Class B......................................... (48,979) (4,927,928) (237,369) (401) (946,401)
------------------------------------------------------------------------
Net increase (decrease)....................... (835,650) 4,166,364 (233,499) 326,456 (360,382)
========================================================================
</TABLE>
*Period June 1, 1995 (inception) through September 30, 1995.
SEE ACCOMPANYING NOTES.
- --------------------------------------------------------------------------------
28
<PAGE>
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
SELECTED DATA FOR EACH SHARE OF CAPITAL STOCK OUTSTANDING THROUGHOUT EACH PERIOD
<TABLE>
<CAPTION>
Ratio
Net of
gains Divi- Ratio of net
Net or Total dends expenses income
Fiscal asset Net losses from from Distri- Net Net to (loss) Port-
year value invest- on invest- net butions asset assets to Ratio to folio
ended begin- ment securities ment invest- (from Total value end of average average turn-
Septem- ning of income realized & opera- ment realized distri- end of Total period net net over
ber 30 period (loss) unrealized) tions income) gains) butions period return(a) (thousands) assets assets rate
- ------------------------------------------------------------------------------------------------------------------------------------
SECURITY GROWTH AND INCOME FUND (CLASS A)(b)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1991 $ 7.43 $ 0.45 $ 0.992 $ 1.442 $(0.474) $(1.088) $(1.562) $ 7.31 22.30% $ 77,418 1.28% 6.14% 103%
1992 7.31 0.35 (0.016) 0.334 (0.343) (0.171) (0.514) 7.13 4.70% 75,436 1.27% 4.79% 74%
1993 7.13 0.21 0.876 1.086 (0.218) (0.158) (0.376) 7.84 15.60% 81,982 1.26% 2.80% 135%
1994(i) 7.84 0.13 (0.713) (0.583) (0.128) (0.169) (0.297) 6.96 (7.60)% 65,328 1.28% 1.70% 163%
1995(i) 6.90 0.16 1.183 1.343 (0.158) (0.215) (0.373) 7.93 20.25% 67,430 1.31% 2.21% 130%
1996(j) 7.93 0.09 0.765 0.855 (0.07) (0.275) (0.345) 8.44 11.09% 70,843 1.31% 2.09% 80%
SECURITY GROWTH AND INCOME FUND (CLASS B)
1994(e) $ 7.83 $ 0.05 $(0.694) $(0.644) $(0.117) $(0.169) $(0.286) $ 6.90 (8.00%) $ 668 2.27% 1.03% 178%
1995(i) 6.90 0.08 1.179 1.259 (0.094) (0.215) (0.309) 7.85 19.07% 1,130 2.31% 1.21% 130%
1996(j) 7.85 0.04 0.758 0.798 (0.033) (0.275) (0.308) 8.34 10.46% 1,633 2.31% 1.09% 80%
SECURITY EQUITY SERIES (CLASS A)
1991 $ 4.82 $ 0.12 $ 1.403 $ 1.523 $(0.148) $(0.375) $(0.523) $ 5.82 34.20% $295,030 1.08% 2.34% 61%
1992 5.82 0.09 .475 0.565 (0.132) (0.393) (0.525) 5.86 10.20% 313,582 1.06% 1.48% 83%
1993 5.86 0.12 1.165 1.285 (0.053) (0.362) (0.415) 6.73 22.70% 375,565 1.06% 1.95% 95%
1994(i) 6.73 0.05 0.085 0.135 (0.120) (1.205) (1.325) 5.54 1.95% 358,237 1.06% 0.86% 79%
1995(i) 5.54 0.04 1.377 1.417 --- (0.407) (0.407) 6.55 27.77% 440,339 1.05% 0.87% 95%
1996(j) 6.55 0.02 0.922 0.942 (0.06) (0.482) (0.542) 6.95 15.12% 496,808 1.05% 0.71% 86%
SECURITY EQUITY SERIES (CLASS B)
1994(e) $ 6.81 $ 0.01 $(0.005) $ 0.005 $(0.12) $(1.205) $(1.325) $ 5.49 (0.15%) $ 7,452 2.07% (0.01%) 80%
1995(i) 5.49 (0.01) 1.357 1.347 --- (0.407) (0.407) 6.43 26.69% 19,288 2.05% (0.13%) 95%
1996(j) 6.43 (0.01) 0.899 0.889 (0.017) (0.482) (0.499) 6.82 14.51% 27,028 2.05% (0.29%) 86%
SECURITY GLOBAL SERIES (CLASS A)
1994(f) $10.00 $(0.03) $ 0.87 $ 0.84 $ --- $ --- $ --- $10.84 8.40% $ 20,128 2.00% (0.01%) 73%
1995(i) 10.84 (0.02) 0.31 0.29 --- (0.19) (0.19) 10.94 2.80% 16,261 2.00% (0.17%) 141%
1996(j) 10.94 (0.01) 1.104 1.094 (0.248) (0.156) (0.404) 11.63 10.25% 17,777 2.00% (0.46%) 196%
SECURITY GLOBAL SERIES (CLASS B)
1994(e) $ 9.96 $(0.12) $ 0.91 $ 0.79 $ --- $ --- $ --- $10.75 7.90% $ 3,960 3.00% (0.01%) 73%
1995(i) 10.75 (0.12) 0.30 0.18 --- (0.19) (0.19) 10.74 1.79% 5,433 3.00% (1.17%) 141%
1996(j) 10.74 (0.09) 1.111 1.021 (0.145) (0.156) (0.301) 11.46 9.68% 6,066 3.00% (1.46%) 196%
SECURITY ASSET ALLOCATION SERIES (CLASS A)
1995) $10.00 $ 0.04 $ 0.50 $ 0.54 $ --- $ --- $ --- $10.54 5.40% $ 1,906 2.00% 1.33% 129%
(g)(h)
1996(j) 10.54 0.13 0.515 0.645 (0.328) (0.167) (0.495) 10.69 6.33% 2,095 2.00% 2.46% 115%
SECURITY ASSET ALLOCATION SERIES (CLASS B)
1995 $10.00 $ 0.01 $ 0.490 $ 0.500 $ --- $ --- $ --- $10.50 5.00% $ 1,529 3.00% 0.31% 129%
(g)(h)
1996(j) 10.50 0.07 0.530 0.600 (0.273) (0.167) (0.44) 10.66 5.89% 2,205 3.00% 1.46% 115%
</TABLE>
SEE ACCOMPANYING NOTES.
- --------------------------------------------------------------------------------
29
<PAGE>
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
SELECTED DATA FOR EACH SHARE OF CAPITAL STOCK OUTSTANDING THROUGHOUT EACH PERIOD
<TABLE>
<CAPTION>
Ratio
Net of
gains Divi- Ratio of net
Net or Total dends expenses income
Fiscal asset Net losses from from Distri- Net Net to (loss) Port-
year value invest- on invest- net butions asset assets to Ratio to folio
ended begin- ment securities ment invest- (from Total value end of average average turn-
Septem- ning of income realized & opera- ment realized distri- end of Total period net net over
ber 30 period (loss) unrealized) tions income) gains) butions period return(a) (thousands) assets assets rate
- ------------------------------------------------------------------------------------------------------------------------------------
SECURITY ULTRA FUND (CLASS A)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1991 $ 4.46 $(0.030) $ 2.525 $ 2.495 $ --- $(0.235) $(0.235) $ 6.72 58.40% $65,449 1.61% (0.51%) 163%
(c)(d)
1992 6.72 (0.090) (0.202) (0.292) --- (0.172) (0.172) 6.66 1.50% 57,128 1.32% (0.46%) 142%
1993 6.66 (0.028) 1.791 1.763 --- (0.293) (0.293) 8.13 26.80% 71,056 1.30% (0.50%) 101%
1994(i) 8.13 (0.056) (0.188) (0.244) --- (1.066) (1.066) 6.82 (3.60%) 60,695 1.33% (0.80%) 111%
1995(i) 6.82 (0.02) 1.535 1.515 --- (0.135) (0.135) 8.20 22.69% 66,052 1.32% (0.31% 180%
1996(j) 8.20 (0.02) 0.256 0.236 --- (0.996) (0.996) 7.44 4.03% 60,218 1.35% (0.52%) 212%
SECURITY ULTRA FUND (CLASS B)
1994(e) $ 8.30 $(0.103) $(0.321) $(0.424) $ --- $(1.066) $(1.066) $ 6.81 (5.70%) $ 1,254 2.36% (1.76%) 110%
1995(i) 6.81 (0.09) 1.525 1.435 --- (0.135) (0.135) 8.11 21.53% 5,428 2.32% (1.32%) 180%
1996(j) 8.11 (0.05) 0.216 0.166 --- (0.996) (0.996) 7.28 3.18% 4,686 2.35% (1.52%) 212%
</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 shares.
(b) Effective July 6, 1993, Security Growth and Income Fund changed its
investment objective from investing for income with secondary emphasis on
long-term capital growth to long-term capital growth with secondary
emphasis on income. Effective the same date the fund changed its name from
Security Investment Fund to Security Growth and Income Fund.
<TABLE>
<CAPTION>
(c) WEIGHTED
DEBT AVERAGE DEBT WEIGHTED
OUTSTANDING OUTSTANDING AVERAGE MONTH-
AT END OF DURING END SHARES AVERAGE DEBT INTEREST EXPENSE
YEAR PERIOD THE PERIOD OUTSTANDING PER SHARE PER SHARE
<S> <C> <C> <C> <C> <C> <C>
Security Ultra Fund 1991 --- 970,096 8,817,652 .11 .01
</TABLE>
Borrowings and related interest, if any, were immaterial in 1992, 1993,
1994, 1995, and for the six month period ended March 31, 1996.
(d) Portfolio turnover calculation excludes the portfolio investments acquired
in the Omni Fund merger. Per share data has been calculated using average
month-end shares outstanding.
(e) Class "B" Shares were initially capitalized on October 19, 1993. Percentage
amounts for the period, except total return, have been annualized. Per
share data has been calculated using the average month-end shares
outstanding.
(f) Security Global Series was initially capitalized on October 1, 1993, with a
net asset value of $10 per share. Percentage amounts for the period, except
for total return, have been annualized.
(g) Security Asset Allocation Series was initially capitalized on June 1, 1995,
with a net asset value of $10 per share. Percentage amounts for the period
have been annualized, except for total return. Per share data has been
calculated using average month-end shares outstanding.
(h) Fund expenses were reduced by the Investment Manager during the period and
expense ratios absent such reimbursement would have been as follows:
1995 1996
Asset Allocation Series Class A 3.6% 3.5%
Class B 4.7% 4.5%
(i) Per share data has been calculated using average month-end shares
outstanding.
(j) Unaudited figures for the six months ended March 31, 1996. Percentage
amounts for the period, except total return, have been annualized. Per
share data has been calculated using average month-end shares outstanding.
SEE ACCOMPANYING NOTES.
- --------------------------------------------------------------------------------
30
<PAGE>
NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
MARCH 31, 1996
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 three Series, the Equity Series, the Global Series, and the
Asset Allocation Series, with each Series, in effect representing a separate
Fund. 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
following is a summary of the significant accounting policies followed by the
Funds in the preparation of their financial statements.These policies are in
conformity with generally accepted accounting principles.
A. SECURITY VALUATION - Valuations of the Funds' securities are supplied by
a pricing service approved by the Board of Directors. 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 Asset Allocation 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 Asset Allocation 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 Asset
Allocation Series may enter into forward foreign exchange contracts in order to
manage against foreign currency risk from purchase or sale of securities
denominated in foreign currency. Global Series and Asset Allocation Series 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 the Global Series and Asset Allocation Series 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 - Asset Allocation Series utilizes futures contracts to a limited
extent, with the objectives of maintaining full exposure to the underlying stock
markets, enhancing returns, maintaining liquidity, and minimizing transaction
costs. Asset Allocation Series may purchase futures con tracts 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 Asset Allocation Series may pay departing
shareholders from its cash balances and reduce its 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 securi ties. The primary risks associated with
the use of futures contracts are imperfect correlation between changes in market
values of stocks contained in the 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 Series is required to deposit 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 Series. The Series realizes a gain or loss when the
contract is closed or expires.
- --------------------------------------------------------------------------------
31
<PAGE>
NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
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) 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 for tax equalization debits, expiration of
net operating losses and 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.
2. MANAGEMENT FEES AND OTHER TRANSACTIONS WITH AFFILIATES
Under terms of the investment advisory contract, Security Management Company
(SMC) agrees to provide, or arrange for others to provide, all the services
required by the Funds for a single fee (except for the Asset Allocation Series
of Security Equity Fund), 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 1/2% of the next
$20 million, and 1% of the remaining net asset value 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 1/2% 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 distribution fees. SMC also serves as Investment Advisor to the Asset
Allocation Series, and accordingly receives a fee equal to 1% of the average net
assets of this Series.
SMC also acts as the administrative agent and transfer agent for the Asset
Allocation Series, and as such performs administrative functions, transfer
agency and dividend disbursing services, and the bookkeeping, accounting and
pricing functions for the Series. For these services, the Investment Manager
receives an administrative fee equal to .045% of the average daily net assets of
the Series plus the greater of .10% of its average net assets or (i) $30,000 in
the year ending June 1, 1996; (ii) $45,000 in the year ending June 1, 1997; and
(iii) $60,000 thereafter. 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.
SMC pays a Sub-Advisor, Lexington Management Corporation (LMC), an annual
fee in an amount equal to .50% of the average daily net assets of Global Series,
for investment advisory and certain administrative services provided to the
Global Series. SMC pays Templeton/Franklin Investment Services, Inc. for
research provided to the Asset Allocation Series, an annual fee equal to .30% of
the first $50 million of the average net assets of the Asset Allocation Series
invested in equity securities and .25% of the average equity security assets in
excess of $50 million. SMC also pays Meridian Management Corporation for
research provided to the Asset Allocation Series an annual fee equal to .20% of
the average net assets of that Series. SMC has agreed to limit the total
expenses of the Asset Allocation Series to 2% of the average net assets,
excluding 12b-1 fees.
For the Asset Allocation Series, SMC and Meridian Management Corporation
have agreed to waive their portions of the management fees to December 31, 1996.
The Funds have adopted Distribution Plans related to the offering of Class B
shares pursuant to Rule 12b-1 under the Investment Company Act of 1940. ThePlans
provide for payments at an annual rate of 1.0% of the average net assets of each
Fund's Class B shares.
Security Distributors, Inc. (SDl), a wholly-owned subsidiary of SMC and the
national distributor for the Funds, received net underwriting commissions after
allowances to brokers and dealers in the amounts presented in the following
table:
ASSET
GROWTH AND EQUITY GLOBAL ALLOCATION ULTRA
INCOME FUND SERIES SERIES SERIES FUND
SDI underwriting $ 2,698 $ 79,763 $1,821 $ 346 $ 4,064
Broker/Dealer $13,024 $328,732 $9,496 $2,301 $17,255
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 INCOME TAX MATTERS
For federal income tax purposes, the amounts of unrealized appreciation
(depreciation) at March 31, 1996, were as follows:
<TABLE>
<CAPTION>
ASSET
GROWTH AND EQUITY GLOBAL ALLOCATION ULTRA
INCOME FUND SERIES SERIES SERIES FUND
<S> <C> <C> <C> <C> <C>
Gross unrealized appreciation $12,641,827 $145,129,505 $2,365,810 $216,732 $10,411,043
Gross unrealized depreciation (222,810) (1,304,105) (487,901) (130,655) (554,064)
------------------------------------------------------------------------------
Net unrealized appreciation $12,419,017 $143,825,400 $1,877,909 $ 86,077 $ 9,856,979
==============================================================================
</TABLE>
- --------------------------------------------------------------------------------
32
<PAGE>
NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
4. INVESTMENT TRANSACTIONS
Investment transactions for the period ended March 31, 1996, (excluding
overnight investments and short-term commercial paper) are as follows:
<TABLE>
<CAPTION>
ASSET
GROWTH AND EQUITY GLOBAL ALLOCATION ULTRA
INCOME FUND SERIES SERIES SERIES FUND
<S> <C> <C> <C> <C> <C>
Purchases $29,666,314 $204,557,073 $20,669,481 $2,910,991 $62,725,517
Proceeds from sales $26,639,306 $209,650,759 $21,321,338 $2,180,571 $69,983,833
</TABLE>
5. FORWARD FOREIGN EXCHANGE CONTRACTS
At March 31, 1996, Global Series had the following open forward foreign
exchange contracts to sell currency (excluding foreign currency contracts used
for purchase and sale settlements):
SETTLEMENT CONTRACT CONTRACT CURRENT UNREALIZED
CURRENCY DATE AMOUNT RATE RATE GAIN (LOSS)
French Franc 7-31-96 3,553,304 5.0972 5.007320 $(12,513)
Japanese Yen 6-28-96 40,492,997 99.8450 105.753667 22,659
Japanese Yen 6-28-96 54,715,933 105.2100 105.753667 2,674
Japanese Yen 6-28-96 48,242,996 105.0700 105.753667 2,968
Japanese Yen 7-8-96 56,349,359 102.9150 105.390333 12,860
--------
$28,648
========
- --------------------------------------------------------------------------------
33
<PAGE>
THE SECURITY GROUP OF
MUTUAL FUNDS
Security Growth and Income Fund
Security Equity Fund
* Equity Series
* Global Series
* Asset Allocation Series
Security Ultra Fund
Security Income Fund
* Corporate Bond Series
* U.S. Government Series
* Limited Maturity Bond Series
* Global Aggressive Bond Series
Security Tax-Exempt 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
- ---------
Willis A. Anton
Donald A. Chubb, Jr.
John D. Cleland
Donald L. Hardesty
Penny A. Lumpkin
Mark L. Morris, Jr., D.V.M.
Jeffrey B. Pantages
Hugh L. Thompson, Ph.D.
OFFICERS
- --------
John D. Cleland, President
James R. Schmank, Vice President and Treasurer
Mark E. Young, Vice President
Terry A. Milberger, Vice President, Equity Fund
Jane A. Tedder, Vice President
Greg A. Hamilton, Assistant Vice President
Cindy L. Shields, Assistant Vice President
Thomas A. Swank, Assistant Vice President
Amy J. Lee, Secretary
Christopher D. Swickard, Assistant Secretary
Brenda M. Luthi, Assistant Treasurer and Assistant Secretary
[SDI LOGO] BULK RATE
700 SW Harrison St. U.S. POSTAGE PAID
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(913) 295-3127 PERMIT NO. 385
(800) 888-2461
