<PAGE>
SECURITY FUNDS
SEMIANNUAL REPORT
MARCH 31, 1997
* Security Growth and Income Fund
* Security Equity Fund
- Equity Series
- Global Series
- Asset Allocation Series
- Social Awareness Series
* Security Ultra Fund
[SDI LOGO]
Security Distributors, Inc.
A Member of The Security Benefit
Group of Companies
<PAGE>
PRESIDENT'S COMMENTARY
SECURITY FUNDS
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MAY 15, 1997
[PHOTO OF JOHN CLELAND]
JOHN CLELAND, PRESIDENT
To Our Shareholders:
We have experienced quite a roller coaster ride in the first quarter of 1997,
following a very strong fourth quarter in 1996. This year began on an equally
optimistic note, only to have a dose of reality injected into investors'
consciousness in the form of fears of an interest rate increase by the Federal
Reserve. These fears, followed by the actual occurrence of that event, reversed
in one month most of the gains in the market as measured by the large-cap
averages. The damage was much worse in the small-cap and mid-cap markets, with
many stocks losing 20% to 30% over the space of the first quarter.
THE FOUNDATION FOR INVESTORS' CONCERNS
At the heart of investors' worries lies the great debate about the outlook for
economic growth over the remainder of 1997. The Federal Reserve remains
concerned that growth is likely to be strong enough to put upward pressure on
inflation. If the Gross Domestic Product (GDP) increases in excess of 3%, the
Fed will likely increase interest rates one or two more times. If, on the other
hand, economic growth slows, primarily as a result of a heavy consumer debt
load, the Fed's work should be over.
The conundrum, of course, lies in what a slower rate of economic growth can
produce in the way of corporate earnings gains. If earnings growth slows
dramatically, this would adversely affect equity markets which are currently
selling at what many consider to be high valuation levels.
A LOOK AT THE MONTHS AHEAD
Our view is that the actual outcome will see a mix of the above-described
events. We believe the economy will continue its strength, although at growth
rates significantly less than those experienced in the first quarter. This
growth will remain strong enough to cause the Fed to raise short-term interest
rates one or two more times. However, earnings gains led by continued
productivity improvement should be enough to cushion the market to some extent.
The ultimate outcome is likely to be a continued period of volatility for the
equity markets for at least one more quarter. We don't believe that the great
bull market is over by any means, and we expect 1997 to close with the markets,
as measured by the major indices, to reach new high ground. The gains will,
however, be more modest than those of the last two years. Investors'
expectations should be more in line with the historic averages as we move
through the last years of the twentieth century.
As always, we are pleased that you have chosen us to manage your investments. We
invite your questions or comments at any time.
Sincerely,
JOHN CLELAND
John Cleland,
President
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MANAGER'S COMMENTARY
SECURITY GROWTH AND INCOME FUND
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MAY 15, 1997
[PHOTO OF CHUCK LAUBER, TERRY MILBERGER, TOM SWANK, JIM SCHIER JOHN CLELAND]
The Security Management Growth-Income Team:
(L-R) Chuck Lauber, Terry Milberger, Tom Swank,
Jim Schier and (seated) John Cleland
To Our Shareholders:
During the six months ended March 31, 1997, we have experienced wide price
swings in both the stock markets and the bond markets. At the beginning of the
period, interest rates on long government bonds stood at about 6.90%. By the end
of November they had declined to 6.35%, sparking a rally in stocks that lasted
until mid-February before investor sentiment changed. As signs of
stronger-than-expected growth emerged and raised fears once again of potential
inflation, interest rates rose and stock prices declined. During this period
Security Growth and Income Fund returned +2.89%, underperforming its Lipper peer
group average of +8.54%.*
AREAS OF STRENGTH IN A VOLATILE MARKET
The value orientation of many stocks in the portfolio has contributed positively
to performance in a volatile market atmosphere. One such company, U.S.
Industries, Inc., increased nearly 35% over the six-month period as it reaped
the benefits of its recent restructuring moves. Another, security systems
service company ADT, Ltd., climbed over 30% as it was viewed as a potential
buyout candidate in the mergers and acquisitions arena. Insurance company
Allstate Corporation rose over 20% as it progressed through its restructuring
process.
High quality growth issues also added to total return. In the last six months,
for example, Microsoft has gained nearly 40%. In late 1996, as investors became
concerned about economic weakness, they favored this type of stock because of
consistent earnings growth records.
PERFORMANCE IN THE BOND SECTOR
In the first two months of the fiscal year the high yield bond portion of the
portfolio underperformed primarily because of two holdings. The first of these,
Marvel Holdings, declined substantially in value after the company announced
poor earnings and liquidity problems. The second, Home Holdings, also lost
considerable value after the company became involved in litigation surrounding
the lease on its New York headquarters. Both issues have now been sold out of
the portfolio.
On the bright side, bonds of Heritage Media Corporation increased in value after
News Corporation announced an agreement to buy the company. Because of News
Corporation's investment-grade ratings, Heritage Media bonds were placed on
rating agencies' watch lists for a
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2
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MANAGER'S COMMENTARY (continued)
SECURITY GROWTH AND INCOME FUND
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MAY 15, 1997
PERFORMANCE
possible upgrade. The bond portion of the portfolio is now approximately 60%
invested in issues rated BB with the remaining 40% in single-B bonds.
LOOKING TO THE NEXT SIX MONTHS
Because the Federal Reserve Open Market Committee remains vigilant in its
inflation-fighting efforts, we expect interest rates to moderate as we move
through the next six months. Stocks at the present time are very sensitive to
interest rates, so a rate decline will benefit the stock market as well as bond
prices. Although we don't expect to see the strong returns of the past two years
again in 1997, we do think that gains more in line with annual averages are in
order.
Terry Milberger & Tom Swank
Portfolio Managers
TOP 5 HOLDINGS**
% of
net assets
----------
Intel Corporation 3.7%
Computer Sciences Corporation 3.0%
Elan Corporation PLC ADR 2.2%
U.S. Industries, Inc. 1.9%
Leggett & Platt, Inc. 1.7%
**At March 31, 1997
AVERAGE ANNUAL RETURNS
AS OF MARCH 31, 1997
1 year 5 years 10 years
A Shares 11.43% 10.11% 8.21%
A Shares with sales charge 5.08% 8.81% 7.56%
B Shares 10.28% 8.73% N/A
(10-19-93)
since inception
B Shares with CDSC 5.28% 8.01% 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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MANAGER'S COMMENTARY
SECURITY EQUITY FUND-EQUITY SERIES
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MAY 15, 1997
To Our Shareholders:
The stock market has been extremely volatile for the six months ended March 31,
1997. The Standard & Poor's 500 Stock Index began the period at just over 687
and rose unevenly until it peaked at 816 in mid-February. During this period
people felt the economy was moderating, and that inflation would be no problem.
Then signs of strength began to appear, and the index declined, to close on
March 31, 1997 at about 757. As the specter of inflation once again cast its
shadow on the bond markets, interest rates moved up over 7%. Stocks, which were
sensitive to interest rates during this period, weakened. We have in this very
short time period experienced both a bull and a bear market. Security Equity
Fund--Equity Series returned +5.34% over the time period, comparing favorably
with its Lipper peer group average of +3.86%.*
WEAK SECTORS OF THE MARKET
Computer services stocks, comprising about 6% of the portfolio, were a
weak-performing sector during the period. As computer service companies became
more price competitive one of our holdings, Electronic Data Systems, failed to
attract as much new business as analysts had expected. Its stock price declined
steadily as its profit margins narrowed. This price competition weighed down the
entire sector. As one company became more aggressive, others had to follow in
order to maintain market share. We have recently reduced our exposure in the
computer service sector to about 2%.
[PHOTO OF JOHN CLELAND, TERRY MILBERGER, CHUCK LAUBER]
The Security Management Large Cap Team
John Cleland, Terry Milberger, Chuck Lauber
A second underperforming sector was aerospace and defense. With federal
budget-balancing efforts continuing, investors became concerned about reductions
in defense spending. This sector performed well in 1996, but has been in a
downtrend since then. At the beginning of the year we owned such companies as
Lockheed, Martin Marietta, McDonnell Douglas Corporation, and Boeing Company. We
have since reduced our exposure in this sector and now of this group only own
McDonnell Douglas, which is being acquired by Boeing.
AREAS OF BETTER PERFORMANCE
Our continued focus on high quality growth names such as Microsoft Corporation,
Gillette Company, Colgate-Palmolive Company, and Procter & Gamble Company has
helped stabilize the portfolio over the six-month period. In the last
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MANAGER'S COMMENTARY (continued)
SECURITY EQUITY FUND-EQUITY SERIES
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MAY 15, 1997
PERFORMANCE
six months, for example, Microsoft has gained nearly 40% while the other three
have increased around 20% apiece. In late 1996 as investors became concerned
about economic weakness, they moved to these high quality companies because of
their consistent earnings growth records.
We have added to our banking and finance sector which has outperformed other
market areas so far in 1997. We now own such banks as Bank of New York Company,
Inc., Northern Trust Corporation and Chase Manhattan Corporation, and Allstate
Corporation, General Re Corporation and Chubb Corporation among other insurance
companies.
PLANS FOR THE REST OF THE YEAR
We believe that our unique blend of growth issues and selected value stocks will
help lower the fund's volatility while increasing the potential for strong
returns. Because of steps taken by the Federal Reserve Open Market Committee to
raise interest rates, we expect the economy to moderate later in the year. In
the coming months we plan to continue our strategy of seeking out companies with
above-average earnings growth.
Terry Milberger
Portfolio Manager
TOP 5 HOLDINGS**
% of
net assets
----------
U.S. Industries, Inc. 1.8%
Microsoft Corporation 1.8%
AlliedSignal, Inc. 1.7%
Bristol-Myers Squibb Company 1.6%
Allstate Corporation 1.6%
**At March 31, 1997
AVERAGE ANNUAL RETURNS
As of March 31, 1997
1 year 5 years 10 years
------ ------- --------
A Shares 14.28% 15.88% 14.00%
A Shares with sales charge 7.77% 14.51% 13.33%
B Shares 13.35% 15.46% N/A
(10-19-93)
(since inception)
B Shares with CDSC 8.35% 14.84% 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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MANAGER'S COMMENTARY
SECURITY EQUITY FUND-GLOBAL SERIES
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MAY 15, 1997
[LEXINGTON LOGO]
SUBADVISOR - LEXINGTON MANAGEMENT CORPORATION
To Our Shareholders:
The Global Series of Security Equity Fund returned 5.5% in the first half of the
fiscal year, comparing favorably with the average global fund return of 5.2% as
reported by Lipper Analytical Services, Inc.* The benchmark Morgan Stanley
Capital International World Index lagged the average global fund with a return
of 4.1%.
BEHAVIOR OF WORLD MARKETS
World markets advanced strongly in the six months ended March 31, 1997.
Especially impressive were European markets, fueled by restructuring and the
dollar rising 10% versus the German mark. Germany's stock market rose 17.1% in
dollar terms (up 28.1% in local currency), while France rose 15.0%. Increased
confidence in the European Monetary Union becoming reality, combined with bond
market rallies in non-core countries, sparked a buying spree in Spain and
Sweden, with equity market increases of 21.6% and 19.8% respectively in dollar
terms.
Far East markets performed well in the first three months of the period, and
then corrected somewhat, underperforming Europe by a substantial margin over the
fiscal first half. Hong Kong rose 2.3%, Malaysia was up 7.5%, and Singapore
declined 4.8%. The Series' overweighting in Asia hurt performance as Asian
markets reacted in sympathy with rising U.S. bond yields. The portfolio
benefited from continued underweighting of Japan, which declined 21.9% in the
Morgan Stanley Capital International Index. The prospect of a faltering economic
recovery after a large tax increase in Japan weighed heavily on those markets.
[PHOTO OF RICHARD SALER] [PHOTO OF ALAN WAPNICK]
RICHARD SALER ALAN WAPNICK
PORTFOLIO MANAGER PORTFOLIO MANAGER
Exposure to emerging markets boosted returns in the first half. Latin America
advanced strongly, with Brazil rising 31.4%, Argentina 21.2% and Mexico 10.1%.
Greece gained 25.5%. Eastern Europe also rose sharply, with the Russian market
up 77.8% over the past six months.
THE OUTLOOK FOR GLOBAL MARKETS
The global economic outlook continues mixed, with strengthening signs in core
European countries. Should U.S. economic strengthening continue, the Federal
Reserve's offsetting interest rate increases would significantly pressure U.S.
equities. The portfolio continues to be underweighted versus the benchmark index
in U.S. stocks as well as in Japanese equities.
European prospects are more favorable. Government spending is restrained as
countries strive to meet Maastricht criteria for entrance into the European
Monetary Union (EMU) while unemployment is high, so growth remains slow.
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MANAGER'S COMMENTARY
SECURITY EQUITY FUND-EQUITY SERIES
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MAY 15, 1997
PERFORMANCE
The past three months have seen a slight weakening of confidence in EMU, but it
is increasingly certain that EMU will be pushed forward. The weaker German mark
versus the dollar is helping spur export orders and industrial production in
that country. GDP growth in core European countries should be near 3% this year.
Restructuring is ongoing, with increasing numbers of companies speaking about
shareholder value enhancement.
In an environment of strengthening world growth and rising bond yields the
chances for sharp declines in global markets are real. Our focus remains on
quality European restructuring plays, where profit margins could expand for
several years. In all countries the overriding emphasis is on finding quality
corporate management teams, since we believe this to be a key factor
contributing to outperformance.
Richard Saler and Alan Wapnick
Portfolio Managers
PORTFOLIO BREAKDOWN BY COUNTRY (TOP 5)**
% of
net assets
----------
United States 16.7%
United Kingdom 9.8%
Japan 8.1%
France 5.5%
Switzerland 5.0%
**At March 31, 1997
AVERAGE ANNUAL RETURNS
As of March 31, 1997
1 Year Since Inception
------ ---------------
A Shares 12.67% 9.74%
(10-1-93)
A Shares with sales charge 6.19% 7.90%
(10-1-93)
B Shares 11.56% 8.96%
(10-19-93)
B Shares with CDSC 6.56% 8.25%
(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.
Investing in foreign countries may involve risks, such as currency fluctuations
and political instability, not associated with investing exclusively in the U.S.
*Performance figures are based on Class A shares and do not reflect deduction of
the sales charge.
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MANAGER'S COMMENTARY
SECURITY EQUITY FUND-ASSET ALLOCATION SERIES
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MAY 15, 1997
[TEMPLETON LOGO]
[MERIDIAN INVESTMENT MANAGEMENT LOGO]
[SMC LOGO]
SECURITY MANAGEMENT COMPANY, LLC
A Member of The Security Benefit
Group of Companies
MANAGED BY SECURITY MANAGEMENT COMPANY, LLC
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.
To Our Shareholders:
The Asset Allocation Series performed very well in the first half of the fiscal
year, returning 5.86% compared with a Lipper peer group average of 5.69%.* In
volatile market periods such as we have experienced over the past several
months, the diversification in an asset allocation portfolio provides the
opportunity to reduce risk while generating a favorable return.
PORTFOLIO PERFORMANCE IN THE FIRST HALF
The Asset Allocation Series may invest its assets in seven asset categories:
U.S. stocks, foreign stocks, U.S. bonds, foreign bonds, real estate (through
Real Estate Investment Trusts), gold stocks and cash. Through the first three
months of the fiscal year we invested in all of these categories except foreign
bonds and gold stocks. During that period the U.S. stock market was strong and
U.S. equities performed well. Foreign stocks, however, were hurt by the strength
in the U.S. dollar. Although markets in countries such as Germany, Belgium, and
Italy did well in terms of local currencies, the effect of currency conversion
weakened their performance. U.S. bonds had a strong quarter in late 1996, but
have since displayed weakness as inflation fears once again grip investors.
[PHOTO OF JANE TEDDER]
JANE TEDDER
PORTFOLIO MANAGER
CHANGES IN ASSET ALLOCATION
Our outside provider of research, Meridian Investment Management Corporation,
began suggesting moves into cash in late February. The first of their
recommendations was to sell all of the real estate investment trust positions in
the portfolio and to sell the remaining Hong Kong holdings, placing the proceeds
in cash equivalents. Since that time the benchmark Wilshire Real Estate
Securities Index has declined slightly and the Hang Seng Stock Index (the market
index for Hong Kong stocks) has lost 5.8% in value.
In early March Meridian recommended a second movement into cash. They suggested
selling one-half of our positions in the U.S. market sectors of Recreation and
Leisure, Machinery, Electronics, Computers and Building Materials. At the same
time they advised reducing the holdings of U.S. bonds from 21.75% of the total
portfolio to 15%. These moves, too, were timely in view of both markets' recent
declines.
PLANS FOR THE NEXT SIX MONTHS
The portfolio managers at Meridian have no near-term plans to recommend reducing
the cash position from its current weighting of
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MANAGER'S COMMENTARY (continued)
SECURITY EQUITY FUND-ASSET ALLOCATION SERIES
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MAY 15, 1997
PERFORMANCE
approximately 30%. At some time in the future, though, they expect U.S. bonds to
become more attractive on a relative value basis, particularly if the Federal
Reserve considers it necessary to raise short-term interest rates at their
coming Open Market Committee meetings. Gold stocks, as well, have cheapened
considerably and could possibly become appealing in the not-too-distant future.
For the present, though, a relatively large position in cash is serving
shareholders well.
Jane Tedder
Portfolio Manager
ASSET MIX**
% of
net assets
----------
U.S. Equities 24.1%
Foreign Stocks 29.0%
Corporate Bonds 12.1%
U.S. Government and Agencies 5.3%
Cash 29.5%
**At March 31, 1997
AVERAGE ANNUAL RETURNS
AS OF MARCH 31, 1997
1 Year Since Inception
------ ---------------
A Shares 9.52% 11.83%
(6-1-95)
A Shares with sales charge 3.22% 8.27%
(6-1-95)
B Shares 8.41% 10.73%
(6-1-95)
B Shares with CDSC 3.41% 8.71%
(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 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. In addition, the investment manager is waiving a portion of the
management fee for the Series. Performance figures would be lower if the maximum
sales charge and advisory fee 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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MANAGER'S COMMENTARY (continued)
SECURITY EQUITY FUND-SOCIAL AWARENESS SERIES
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MAY 15, 1997
To Our Shareholders:
The Social Awareness Series began operations November 1, 1996. Throughout most
of the period during which the Series has been in operation, small-cap and
mid-cap stocks have underperformed their larger counterparts. Because a portion
of our portfolio is invested in stocks of these smaller firms, the Series'
performance has lagged, returning -4.40% for the period compared with the Lipper
average return of a group of similarly managed funds of +3.40%.* This market
weakness will, however, give us excellent opportunities to invest future cash
that comes into the Fund.
SOCIAL SCREENS APPLIED IN THE SELECTION PROCESS
The Social Awareness Series uses both positive and negative screens to search
for companies that might be appropriate investments. Selection of securities for
the portfolio is an ongoing process of weighing the positive things companies do
against potential negatives, and balancing these with fundamental analysis of
the companies' financial positions. The positive screens include community
support, strong employee relations, fair employee practices and family benefits,
and strong environmental programs. The negative screens--corporate practices to
avoid--include nuclear energy, weapons, environmental abuse, tobacco and
alcohol, and gambling. These screens are applied after a company's financial
performance and future earnings outlook have been carefully evaluated.
MARKET BEHAVIOR SINCE INCEPTION OF THE FUND
The price decline in smaller company stocks has been driven by two factors.
First, investors are reluctant to take the risks associated with less liquid
holdings when markets are volatile, and second, supply has exceeded demand as
the Initial Public Offering (IPO) market continued strong through early 1997.
Stocks in the technology, health care, and business services sectors turned in
poor performances in the past six months. Conversely, however, our holdings in
the consumer staples sector such as Coca-Cola Company, Procter & Gamble Company,
Colgate-Palmolive Company, and Walgreens Company did well, as did banks and
insurances companies including our positions in American International Group,
Inc. and Chubb Corporation.
PROXY VOTING SEASON IMPORTANT
As companies approach their annual meetings of shareholders, proxy voting
becomes very important for socially conscious investors. Our policy is to vote
proxies in accordance with our social screens, even if it requires a vote
against management. Proxy voting gives us an excellent opportunity to
communicate with management about our shareholders' beliefs.
Three primary issues are the focus for shareholders currently. They include the
CERES (Coalition for Environmentally Responsible Economies)
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MANAGER'S COMMENTARY (continued)
SECURITY EQUITY FUND-SOCIAL AWARENESS SERIES
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MAY 15, 1997
PERFORMANCE
principles, tobacco, and workplace diversity. The most prominent of these is
tobacco, both its selling and its use. The American Medical Association is
calling on doctors to dispose of their holdings in mutual funds that own tobacco
stocks. We actively seek out companies such as Dayton Hudson Corporation, the
parent of Target Stores, the stores which recently made the difficult decision
to discontinue sales of tobacco products.
LOOKING AHEAD TO THE NEXT SIX MONTHS
As we move forward, we expect economic growth to moderate in light of the
Federal Reserve's determination to keep inflation under control. This should
allow interest rates to decline, which will give a boost to the stock market.
Because small-cap and mid-cap issues have underperformed their larger
counterparts over the past several months, we believe that they have a good
opportunity to outperform in the months to come. We will continue our search for
financially sound companies which operate in a manner consistent with our social
screens.
Cindy Shields
Portfolio Manager
TOP 5 HOLDINGS**
% of
net assets
----------
Coca-Cola Company 2.5%
Intel Corporation 2.5%
Procter & Gamble Company 2.4%
Guidant Corporation 2.4%
Merck & Company 2.3%
**At March 31, 1997
AVERAGE ANNUAL RETURNS
AS OF MARCH 31, 1997
Since Inception
---------------
A Shares -4.40%
(11-1-96)
A Shares with sales charge -9.92%
(11-1-96)
B Shares -4.73%
(11-1-96)
B Shares with CDSC -9.50%
(11-1-96)
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 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. In addition, the investment manager is waiving all of the
management fees for the Series. Performance figures would be lower if the
maximum sales charge and advisory fee were deducted.
*Performance figures are based on Class A shares and do not reflect deduction of
the sales charge.
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11
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MANAGER'S COMMENTARY
SECURITY ULTRA FUND
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MAY 15, 1997
To Our Shareholders:
The correction in the small-cap and mid-cap stocks which began last June has
continued through the first quarter of 1997. This price decline has been driven
by two primary factors. First, investors have been reluctant in a period of
volatile market prices to take the risks inherent in less liquid stocks. Second,
the supply of small-cap and mid-cap stocks has exceeded the demand as the
Initial Public Offering (IPO) market continued strong through early 1997.
Security Ultra Fund, returned -8.40% for the six-month period ended March 31,
1997, compared with its Lipper peer group average of -0.76%.*
IS THE WORST BEHIND US?
We believe that the greatest part of the market decline is now behind us. The
Federal Reserve Open Market Committee is remaining vigilant in its fight to keep
inflation under control, and first quarter earnings estimates are looking
favorable. The second half of the year could be attractive for small and
midsized company stocks for several reasons.
Relative valuations of stocks in these sectors are approaching historical trough
levels, making the stocks very attractively priced. Portfolio managers have been
raising cash in recent months, with some managers now holding over 10% of their
assets in cash equivalents. The IPO and secondary offering calendars have slowed
because of the volatile markets. Also, as the dollar continues to strengthen,
multinational companies become less attractive because of their foreign earnings
exposure, making smaller companies more favorable investments.
[PHOTO OF LARRY VALENCIA, FRANK WHITSELL, CINDY SHIELDS, JOHN CLELAND]
THE SECURITY MANAGEMENT SMALL CAP TEAM
LARRY VALENCIA, FRANK WHITSELL, CINDY SHIELDS, JOHN CLELAND
PORTFOLIO HOLDINGS DURING THE PERIOD
Many stocks in emerging growth areas such as technology, health care, and
business services experienced double-digit declines over the past six months as
investors shied away from these types of issues. Although the fundamentals of
these companies remained strong, investors' concerns about lack of liquidity
overrode their inclination to buy.
Some bright spots remained in the technology sector. An overweighting in the
portfolio in semiconductors and personal computers helped performance.
Semiconductor equipment companies Altera Corporation and Novellus Systems, Inc.,
returned 18.2% and 27.2% respectively in the first quarter of 1997, and personal
computer manufacturer Dell Computer Corporation increased 27.3% in the same
period.
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12
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MANAGER'S COMMENTARY (continued)
SECURITY ULTRA FUND
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MAY 15, 1997
PERFORMANCE
LOOKING AHEAD
Because of the correction that has taken place over the past six months, stocks
in the small-cap and mid-cap sectors of the market appear undervalued. We
believe that there are many good buying opportunities awaiting us. Our equity
analysts continue searching for solid growing companies in order to build strong
performance potential for the coming months.
Cindy Shields
Portfolio Manager
TOP 5 HOLDINGS**
% of
net assets
----------
Coca-Cola Enterprises, Inc. 2.4%
Franklin Resources, Inc. 2.1%
Cardinal Health, Inc. 1.9%
Dura Pharmaceuticals, Inc. 1.9%
State Street Boston Corporation 1.8%
**At March 31, 1997
AVERAGE ANNUAL RETURNS
AS OF MARCH 31, 1997
1 year 5 years 10 years
------ ------- --------
A Shares 1.57% 6.46% 4.38%
A Shares with sales charge -4.22% 5.21% 3.75%
B Shares 0.63% 5.17% N/A
(10-19-93)
(since inception)
B Shares with CDSC -4.37% 4.39% 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.
- --------------------------------------------------------------------------------
13
<PAGE>
STATEMENTS OF NET ASSETS
- --------------------------------------------------------------------------------
MARCH 31, 1997
(UNAUDITED)
- -------------------------------
SECURITY GROWTH AND INCOME FUND
- -------------------------------
PRINCIPAL
AMOUNT OR
NUMBER OF MARKET
PREFERRED STOCKS SHARES VALUE
- --------------------------------------------------------------------------------
BANKING & CREDIT - 1.6%
California Federal Bank .............................. 8,250 $932,250
Salomon Brothers, Inc. ............................... 10,000 257,500
----------
1,189,750
COMMUNICATION - 0.7%
Cablevision Systems .................................. 5,594 501,343
ENTERTAINMENT - 0.8%
Time Warner .......................................... 551 596,199
PUBLISHING & PRINTING - 0.5%
K-III Communications ................................. 4,000 396,000
----------
Total preferred stocks - 3.6% ........................ 2,683,292
CORPORATE BONDS
- ---------------
AIR TRANSPORTATION - 0.7%
Atlas Air, Inc., 12.25% - 2002 ....................... $500,000 551,875
AUTOMOTIVE - 0.4%
Exide Corporation, 10.75% - 2002 ..................... $300,000 308,625
BANKING & CREDIT - 0.3%
BF Saul Reit, 11.625% - 2002 ......................... $250,000 269,063
BUILDING MATERIALS - 0.4%
Knoll, Inc., 10.875% - 2006 .......................... $250,000 274,688
CHEMICALS - 0.4%
Envirodyne Industries, Inc., 12.00% - 2000 ........... $250,000 269,063
COMMUNICATIONS - 3.2%
Allbritton Communications Company, 11.50% - 2004 ..... $125,000 118,437
Century Communications Corporation, 9.50% - 2005 ..... $500,000 496,250
CF Cable Television, Inc., 11.625% - 2005 ............ $250,000 285,625
Comcast Corporation, 9.125% - 2006 ................... $500,000 507,500
Heritage Media Corporation, 8.75% - 2006 ............. $250,000 258,125
Rogers Cable System, 9.625% - 2002 ................... $250,000 258,438
Rogers Communications, Inc., 9.125% - 2006 ........... $250,000 246,875
Valassis Communications, Inc., 9.55% - 2003 .......... $250,000 265,000
----------
2,436,250
DIVERSIFIED - 0.8%
Jordan Industries, Inc., 10.375% - 2003 .............. $250,000 247,188
Sequa Corporation, 9.375% - 2003 ..................... $350,000 354,375
----------
601,563
PRINCIPAL MARKET
CORPORATE BONDS (CONTINUED) AMOUNT VALUE
- --------------------------------------------------------------------------------
ELECTRIC & GAS COMPANIES - 0.8%
AES Corporation, 10.25% - 2006 ....................... $250,000 $ 272,500
California Energy, 9.50% - 2006 ...................... 300,000 310,500
----------
583,000
ENTERTAINMENT - 0.8%
Harrah's Entertainment, 10.875% - 2002 ............... 500,000 506,250
Stations Casino, 10.125% - 2006 ...................... 125,000 120,312
----------
626,562
FINANCE - 0.8%
Dollar Financial Group, Inc., 10.875% - 2006 ......... 300,000 305,250
Homeside, 11.25% - 2003 .............................. 250,000 284,688
----------
589,938
FOOD & BEVERAGE TRADE - 1.4%
Cott Corporation, 9.375% - 2005 ...................... 500,000 507,500
Delta Beverage, 9.75% - 2003 ......................... 250,000 260,000
TLC Beatrice, 11.50% - 2005 .......................... 250,000 267,500
----------
1,035,000
HOSPITAL MANAGEMENT - 1.0%
Regency Health Services, Inc., 9.875% - 2002 ......... 500,000 507,500
Tenet Healthcare, 10.125% - 2005 ..................... 250,000 271,875
----------
779,375
HOTEL & RECREATION - 0.3%
Four Seasons, 9.125% - 2000 .......................... 250,000 255,313
INDUSTRIAL PRODUCT - 0.5%
Shopvac, 10.625% - 2003 .............................. 350,000 367,937
MANUFACTURING - 0.5%
Agco Corporation, 10.00% - 2006 ...................... 250,000 254,062
Titan Wheel International, Inc., 8.75% - 2007 ........ 125,000 123,125
----------
377,187
OIL & GAS COMPANIES - 0.7%
Seagull Energy Corporation, 8.625% - 2005 ............ 500,000 515,000
PLASTIC PRODUCTS - 0.5%
Plastic Container, 10.00% - 2006 ..................... 350,000 357,875
PUBLISHING & PRINTING - 0.6%
Golden Books Publishing, Inc., 7.65% - 2002 .......... 250,000 231,250
Hollinger International, 10.625% - 2002 .............. 250,000 244,375
----------
475,625
SEE ACCOMPANYING NOTES.
- --------------------------------------------------------------------------------
14
<PAGE>
STATEMENTS OF NET ASSETS
- --------------------------------------------------------------------------------
MARCH 31, 1997
(UNAUDITED)
- -------------------------------------------
SECURITY GROWTH AND INCOME FUND (CONTINUED)
- -------------------------------------------
PRINCIPAL
AMOUNT OR
NUMBER OF MARKET
CORPORATE BONDS SHARES VALUE
- --------------------------------------------------------------------------------
REFINERY - 0.3%
Crown Central Petroleum, 10.875% - 2005 .............. $250,000 $257,812
RESTAURANTS - 0.7%
Carrols Corporation, 11.50% - 2003 ................... $500,000 526,875
STEEL & METAL PRODUCTS - 0.2%
AK Steel, 9.125% - 2006 .............................. $150,000 149,437
TEXTILES - 1.0%
Pillowtex Corporation, 10.00% - 2006 ................. $250,000 258,125
Westpoint Stevens, Inc., 9.375% - 2005 ............... $500,000 506,250
----------
764,375
TOBACCO PRODUCTS - 0.3%
Dimon, Inc., 8.875% - 2006 ........................... $250,000 254,375
----------
Total corporate bonds - 16.6% ........................ 12,626,813
COMMON STOCKS
- -------------
ADVERTISING - 1.3%
Omnicom Group, Inc. .................................. 20,000 997,500
AEROSPACE & DEFENSE - 3.6%
Boeing Company ....................................... 8,630 851,134
McDonnell Douglas Corporation ........................ 15,000 915,000
Rockwell International Corporation ................... 15,000 973,125
----------
2,739,259
BANKING & FINANCE - 3.9%
Banc One Corporation ................................. 15,000 596,250
Bank of New York Company, Inc. ....................... 20,000 735,000
H.F. Ahmanson & Company .............................. 25,000 912,500
Northern Trust Corporation ........................... 20,000 750,000
----------
2,993,750
BUSINESS SERVICES - 0.8%
Cognizant Corporation ................................ 20,000 582,500
CHEMICALS--BASIC - 1.3%
Monsanto Company ..................................... 25,000 956,250
CHEMICALS--SPECIALTY - 3.6%
Airgas, Inc. ......................................... 47,000 793,125
Morton International, Inc. ........................... 20,000 845,000
Praxair, Inc. ........................................ 25,000 1,121,875
----------
2,760,000
COMPUTER SERVICES - 5.4%
Ceridian Corporation* ................................ 20,000 717,500
Computer Sciences Corporation* ....................... 38,000 2,346,500
DST Systems, Inc.* ................................... 35,000 997,500
----------
4,061,500
COMPUTER SOFTWARE - 0.9%
HBO & Company ........................................ 15,000 712,500
NUMBER OF MARKET
COMMON STOCKS (CONTINUED) SHARES VALUE
- --------------------------------------------------------------------------------
CONGLOMERATE - 4.5%
AlliedSignal, Inc. ................................... 15,000 $1,068,750
Canadian Pacific, Ltd. ............................... 40,000 960,000
U.S. Industries, Inc.* ............................... 40,000 1,410,000
----------
3,438,750
CONSUMER SERVICES - 1.0%
ADT, Ltd.* ........................................... 30,000 750,000
ENERGY SERVICES - 0.9%
Halliburton Company .................................. 10,000 677,500
ENTERTAINMENT - 1.5%
Carnival Corporation (Cl.A) .......................... 30,000 1,110,000
FERTILIZER - 1.0%
Potash Corporation of Saskatchewan, Inc. ............. 10,000 760,000
FINANCIAL SERVICES - 1.2%
Federal National Mortgage Association ................ 24,000 867,000
FOOD & BEVERAGES - 8.2%
Anheuser-Busch Companies, Inc. ....................... 20,000 842,500
Chiquita Brands International, Inc. .................. 80,000 1,250,000
ConAgra, Inc. ........................................ 20,000 1,085,000
CPC International, Inc. .............................. 15,000 1,230,000
PepsiCo, Inc. ........................................ 30,000 978,750
Sara Lee Corporation ................................. 20,000 810,000
----------
6,196,250
HOSPITAL MANAGEMENT - 1.0%
Columbia/HCA Healthcare Corporation .................. 22,500 756,562
HOUSEHOLD FURNISHINGS & APPLIANCES - 1.7%
Leggett & Platt, Inc. ................................ 40,000 1,300,000
HOUSEHOLD PRODUCTS - 1.5%
Procter & Gamble Company ............................. 10,000 1,150,000
INSURANCE - 2.0%
Allstate Corporation ................................. 15,000 890,625
St. Paul Companies, Inc. ............................. 10,000 648,750
----------
1,539,375
MANUFACTURING - 0.8%
Perkin-Elmer Corporation ............................. 10,000 643,750
MEDICAL INSTRUMENTS - 3.7%
Allegiance Corporation ............................... 30,000 663,750
Baxter International, Inc. ........................... 20,000 862,500
Becton, Dickinson & Company .......................... 15,000 675,000
Medtronic, Inc. ...................................... 10,000 622,500
----------
2,823,750
MINING & METALS - 0.9%
Aluminum Company of America .......................... 10,000 680,000
SEE ACCOMPANYING NOTES.
- --------------------------------------------------------------------------------
15
<PAGE>
STATEMENTS OF NET ASSETS
- --------------------------------------------------------------------------------
MARCH 31, 1997
(UNAUDITED)
- -------------------------------------------
SECURITY GROWTH AND INCOME FUND (CONTINUED)
- -------------------------------------------
NUMBER OF MARKET
COMMON STOCKS (CONTINUED) SHARES VALUE
- --------------------------------------------------------------------------------
MULTIMEDIA - 2.3%
E.W. Scripps Company ................................. 35,000 $1,141,875
Tribune Company ...................................... 15,000 607,500
----------
1,749,375
NATURAL GAS - 3.9%
Coastal Corporation .................................. 25,000 1,200,000
El Paso Natural Gas Company .......................... 20,000 1,132,500
Equitable Resources, Inc. ............................ 20,200 618,625
----------
2,951,125
OIL & GAS COMPANIES - 3.3%
Louisiana Land & Exploration Company ................. 15,000 710,625
Noble Affiliates, Inc. ............................... 20,000 755,000
Pennzoil Company ..................................... 10,000 517,500
Union Pacific Resources Group, Inc. .................. 20,000 535,000
----------
2,518,125
OIL & GAS EQUIPMENT - 1.1%
Input/Output, Inc.* .................................. 60,000 870,000
PHARMACEUTICALS - 6.2%
Bristol-Myers Squibb Company ......................... 20,000 1,180,000
Elan Corporation PLC ADR* ............................ 50,000 1,706,250
Mylan Laboratories ................................... 55,000 804,375
SmithKline Beecham PLC ADR ........................... 15,000 1,050,000
----------
4,740,625
PHOTOGRAPHIC EQUIPMENT & SUPPLIES - 1.5%
Eastman Kodak Company ................................ 15,000 1,138,125
PUBLISHING & PRINTING - 0.9%
McGraw-Hill Companies, Inc. .......................... 13,000 664,625
RESTAURANTS & FOOD SERVICE - 1.2%
Cheesecake Factory, The* ............................. 5,000 98,750
Wendy's International, Inc. .......................... 40,000 825,000
----------
923,750
RETAIL TRADE - 4.2%
Federated Department Stores, Inc.* ................... 30,000 986,250
TJX Companies, Inc. .................................. 15,000 641,250
Walgreens Company .................................... 20,000 837,500
Woolworth Corporation* ............................... 30,000 701,250
----------
3,166,250
SEMICONDUCTORS - 3.7%
Intel Corporation .................................... 20,000 2,782,500
TRANSPORTATION - 0.4%
Union Pacific Corporation ............................ 5,000 283,749
----------
NUMBER OF MARKET
COMMON STOCKS (CONTINUED) SHARES VALUE
- --------------------------------------------------------------------------------
Total common stocks - 79.4% .......................... $60,284,445
----------
Total investments - 99.6% ............................ 75,594,550
Cash and other assets, less liabilities - 0.4% ....... 336,309
----------
Total net assets - 100.0% ............................ $75,930,859
==========
- -------------------------------------
SECURITY EQUITY FUND - EQUITY SERIES
- -------------------------------------
COMMON STOCKS
- -------------
ADVERTISING - 1.5%
Omnicom Group, Inc. .................................. 200,000 $9,975,000
AEROSPACE & DEFENSE - 3.9%
McDonnell Douglas Corporation ........................ 160,000 9,760,000
Rockwell International Corporation ................... 150,000 9,731,250
United Technologies Corporation ...................... 85,000 6,396,250
----------
25,887,500
BROADCAST MEDIA - 1.0%
Tribune Company ...................................... 155,000 6,277,500
BANKING & FINANCE - 6.8%
Banc One Corporation ................................. 150,000 5,962,500
Bank of New York Company, Inc. ....................... 175,000 6,431,250
Chase Manhattan Corporation .......................... 110,000 10,298,750
H.F. Ahmanson & Company .............................. 160,000 5,840,000
Northern Trust Corporation ........................... 200,000 7,500,000
Norwest Corporation .................................. 40,000 1,850,000
Wells Fargo & Company ................................ 25,000 7,103,125
----------
44,985,625
BUSINESS SERVICES - 0.9%
Cognizant Corporation ................................ 120,000 3,495,000
ITT Industries, Inc. ................................. 120,000 2,685,000
----------
6,180,000
CHEMICALS--BASIC - 2.6%
du Pont (E.I.) de Nemours & Company .................. 90,000 9,540,000
Monsanto Company ..................................... 200,000 7,650,000
----------
17,190,000
CHEMICALS--SPECIALTY - 3.5%
Morton International, Inc. ........................... 170,000 7,182,500
Nalco Chemical Company ............................... 175,000 6,540,625
Praxair, Inc. ........................................ 200,000 8,975,000
----------
22,698,125
SEE ACCOMPANYING NOTES.
- --------------------------------------------------------------------------------
16
<PAGE>
STATEMENTS OF NET ASSETS
- --------------------------------------------------------------------------------
MARCH 31, 1997
(UNAUDITED)
- ------------------------------------------------
SECURITY EQUITY FUND - EQUITY SERIES (CONTINUED)
- ------------------------------------------------
NUMBER OF MARKET
COMMON STOCKS (CONTINUED) SHARES VALUE
- --------------------------------------------------------------------------------
COMPUTER SERVICES - 1.8%
Ceridian Corporation* ................................ 150,000 $5,381,250
Computer Sciences Corporation* ....................... 100,000 6,175,000
----------
11,556,250
COMPUTER SOFTWARE - 2.8%
BMC Software, Inc.* .................................. 75,000 3,459,375
HBO & Company ........................................ 70,000 3,325,000
Microsoft Corporation* ............................... 130,000 11,919,375
----------
18,703,750
COMPUTER SYSTEMS - 0.9%
Compaq Computer Corporation* ......................... 80,000 6,130,000
CONGLOMERATE - 5.0%
AlliedSignal, Inc. ................................... 160,000 11,400,000
Canadian Pacific, Ltd. ............................... 400,000 9,600,000
U.S. Industries, Inc.* ............................... 340,000 11,985,000
----------
32,985,000
CONSUMER SERVICES - 1.5%
ADT, Ltd.* ........................................... 400,000 10,000,000
ELECTRICAL MACHINERY & ELECTRONIC COMPONENTS - 1.5%
General Electric Company ............................. 100,000 9,925,000
ELECTRONICS - 0.5%
Perkin-Elmer Corporation ............................. 50,000 3,218,750
ENERGY EXPLORATION--PRODUCTION - 1.1%
Louisiana Land & Exploration Company ................. 150,000 7,106,250
ENERGY SERVICES - 0.9%
Halliburton Company .................................. 85,000 5,758,750
ENTERTAINMENT - 1.4%
Carnival Corporation (Cl.A) .......................... 240,000 8,880,000
FINANCIAL SERVICES - 2.0%
Federal Home Loan Mortgage Corporation ............... 180,000 4,905,000
Federal National Mortgage Association ................ 230,000 8,308,750
----------
13,213,750
FOOD & BEVERAGES - 7.8%
Anheuser-Busch Companies, Inc. ....................... 170,000 7,161,250
ConAgra, Inc. ........................................ 160,000 8,680,000
CPC International, Inc. .............................. 120,000 9,840,000
PepsiCo, Inc. ........................................ 260,000 8,482,500
Sara Lee Corporation ................................. 200,000 8,100,000
Unilever NY ADR ...................................... 50,000 9,312,500
----------
51,576,250
HOSPITAL MANAGEMENT - 1.0%
Columbia/HCA Healthcare Corporation .................. 200,000 6,725,000
NUMBER OF MARKET
COMMON STOCKS (CONTINUED) SHARES VALUE
- --------------------------------------------------------------------------------
HOUSEHOLD PRODUCTS - 4.1%
Colgate-Palmolive Company ............................ 75,000 $7,471,875
Gillette Company ..................................... 100,000 7,262,500
Kimberly-Clark Corporation ........................... 35,000 3,478,125
Procter & Gamble Company ............................. 75,000 8,625,000
----------
26,837,500
INSURANCE - 10.6%
Aetna, Inc. .......................................... 100,000 8,587,500
Allstate Corporation ................................. 175,000 10,390,625
American International Group, Inc. ................... 80,000 9,390,000
Chubb Corporation .................................... 120,000 6,465,000
Cigna Corporation .................................... 50,000 7,306,250
General Re Corporation ............................... 35,000 5,530,000
ITT Hartford Group, Inc. ............................. 100,000 7,212,500
Provident Companies, Inc. ............................ 150,000 8,212,500
St. Paul Companies, Inc. ............................. 100,000 6,487,500
----------
69,581,875
MANUFACTURING - 1.3%
Corning, Inc. ........................................ 150,000 6,656,250
Millipore Corporation ................................ 50,000 2,118,750
----------
8,775,000
MEDICAL INSTRUMENTS - 3.4%
Baxter International, Inc. ........................... 200,000 8,625,000
Becton, Dickinson & Company .......................... 100,000 4,500,000
Medtronic, Inc. ...................................... 120,000 7,470,000
U.S. Surgical Corporation ............................ 50,000 1,525,000
----------
22,120,000
MINING & METALS - 0.6%
Aluminum Company of America .......................... 60,000 4,080,000
NATURAL GAS - 1.2%
Coastal Corporation .................................. 170,000 8,160,000
OIL & GAS COMPANIES - 1.6%
Noble Affiliates, Inc. ............................... 165,000 6,228,750
Union Pacific Resources Group, Inc. .................. 160,000 4,280,000
----------
10,508,750
OIL & GAS PIPELINES - 1.1%
MAPCO, Inc. .......................................... 240,000 7,440,000
PAINT & ALLIED PRODUCTS - 1.4%
Sherwin-Williams Company ............................. 350,000 9,450,000
PETROLEUM REFINING - 2.7%
Mobil Corporation .................................... 70,000 9,143,750
Royal Dutch Petroleum Company ADR .................... 50,000 8,750,000
----------
17,893,750
SEE ACCOMPANYING NOTES.
- --------------------------------------------------------------------------------
17
<PAGE>
STATEMENTS OF NET ASSETS
- --------------------------------------------------------------------------------
MARCH 31, 1997
(UNAUDITED)
- ------------------------------------------------
SECURITY EQUITY FUND - EQUITY SERIES (CONTINUED)
- ------------------------------------------------
NUMBER OF MARKET
COMMON STOCKS (CONTINUED) SHARES VALUE
- --------------------------------------------------------------------------------
PHARMACEUTICALS - 6.4%
American Home Products Corporation ................... 115,000 $6,900,000
Bristol-Myers Squibb Company ......................... 180,000 10,620,000
Merck & Company, Inc. ................................ 115,000 9,688,750
Schering-Plough Corporation .......................... 110,000 8,002,500
SmithKline Beecham PLC ADR ........................... 100,000 7,000,000
----------
42,211,250
PHOTOGRAPHIC EQUIPMENT & SUPPLIES - 1.2%
Eastman Kodak Company ................................ 100,000 7,587,500
PUBLISHING & PRINTING - 2.3%
Gannett Company, Inc. ................................ 90,000 7,728,750
McGraw-Hill Companies, Inc. .......................... 145,000 7,413,125
----------
15,141,875
RESTAURANTS & FOOD SERVICE - 1.0%
Wendy's International, Inc. .......................... 305,000 6,290,625
RETAIL TRADE - 6.8%
Dayton Hudson Corporation ............................ 125,000 5,218,750
Federated Department Stores, Inc.* ................... 235,000 7,725,625
Payless Shoesource, Inc.* ............................ 50,000 2,093,750
Safeway, Inc.* ....................................... 170,000 7,883,750
TJX Companies, Inc. .................................. 150,000 6,412,500
Walgreens Company .................................... 200,000 8,375,000
Woolworth Corporation* ............................... 300,000 7,012,500
----------
44,721,875
SEMICONDUCTORS - 2.1%
Intel Corporation .................................... 45,000 6,260,625
Linear Technology Corporation ........................ 85,000 3,761,250
Xilinx, Inc.* ........................................ 85,000 4,143,750
----------
14,165,625
TRANSPORTATION - 0.9%
Union Pacific Corporation ............................ 100,000 5,675,000
-------------
Total common stocks - 97.1% .......................... 639,613,125
Cash and other assets, less liabilities - 2.9% ....... 19,264,671
-------------
Total net assets - 100.0% ............................ $658,877,796
=============
- ------------------------------------
SECURITY EQUITY FUND - GLOBAL SERIES
- ------------------------------------
PREFERRED STOCKS
- -----------------
GERMANY - 1.0%
Sto AG ............................................... 758 $304,401
- ------------------------------------------------
SECURITY EQUITY FUND - GLOBAL SERIES (continued)
- ------------------------------------------------
NUMBER OF MARKET
COMMON STOCKS SHARES VALUE
- --------------------------------------------------------------------------------
ARGENTINA - 0.7%
Transportadora de Gas del Sur, S.A. .................. 18,600 $239,475
AUSTRALIA - 1.9%
Foster's Brewing Group, Ltd. ......................... 120,000 248,322
QBE Insurance Group, Ltd. ............................ 66,425 342,079
----------
590,401
AUSTRIA - 2.2%
Bohler-Uddeholm AG ................................... 1,800 125,087
Wienerberger Baustoffindustrie AG .................... 3,100 586,616
----------
711,703
BELGIUM - 1.1%
Credit Communal Holding/Dexia* ....................... 3,100 343,840
BRAZIL - 1.1%
Aracruz Cellulose S.A. ADR ........................... 18,550 338,538
CANADA - 2.8%
Bombardier, Inc. `B' ................................. 20,000 362,669
Imax Corporation ..................................... 3,800 130,388
Jetform Corporation .................................. 9,600 151,800
Noranda Forest, Inc. ................................. 36,400 243,734
----------
888,591
CHILE - 1.9%
Antofagasta Holdings PLC ............................. 22,800 136,647
Banco Santander ADR .................................. 18,600 311,550
Maderas y Sinteticos Sociedad Anonima S.A. ADR ....... 10,500 166,031
----------
614,228
FINLAND - 1.0%
Valmet Corporation ................................... 17,000 305,484
FRANCE - 5.5%
Alcatel Alsthom ...................................... 3,270 393,899
Elf Aquitaine S.A. ADR ............................... 8,500 418,625
Lafarge .............................................. 5,700 394,752
Sidel S.A. ........................................... 2,520 196,997
Societe Generale de Surveillance Holding S.A. `B' .... 2,840 332,010
----------
1,736,283
GERMANY - 2.3%
Continental AG ....................................... 12,300 273,515
Deutsche Bank AG ..................................... 6,600 371,460
Hoechst AG ........................................... 2,500 101,220
----------
746,195
GREECE - 1.6%
Hellenic Tellecommunication Organization S.A. ........ 15,600 338,401
Michaniki S.A. ....................................... 15,900 166,756
----------
505,157
SEE ACCOMPANYING NOTES.
- --------------------------------------------------------------------------------
18
<PAGE>
STATEMENTS OF NET ASSETS
- --------------------------------------------------------------------------------
MARCH 31, 1997
(UNAUDITED)
- ------------------------------------------------
SECURITY EQUITY FUND - GLOBAL SERIES (CONTINUED)
- ------------------------------------------------
NUMBER OF MARKET
COMMON STOCKS (CONTINUED) SHARES VALUE
- --------------------------------------------------------------------------------
HONG KONG - 2.4%
China Light & Power Company, Ltd. .................... 46,000 $202,425
Guangdong Investments ................................ 21,000 18,021
JCG Holdings, Ltd. ................................... 57,000 44,870
National Mutual Asia, Ltd. ........................... 318,000 332,403
Peregrine Investment Holdings, Ltd. .................. 100,000 159,374
----------
757,093
INDONESIA - 1.2%
PT Semen Cibinong .................................... 51,000 153,998
PT Tambang Timah ..................................... 149,500 233,496
----------
387,494
IRELAND - 2.5%
Allied Irish Banks PLC ............................... 38,900 267,557
Jefferson Smurfit .................................... 194,500 515,958
----------
783,515
ITALY - 1.1%
Instituto Mobiliare Italiano S.p.a. .................. 22,800 200,823
Stet Societa Finanziaria Telefonica S.p.a. ........... 37,100 166,124
----------
366,947
JAPAN - 8.1%
Amway Japan, Ltd. .................................... 9,900 271,868
Bunka Shutter Company, Ltd. .......................... 23,000 118,149
Canon, Inc. .......................................... 3,000 64,211
Citizen Watch Company, Ltd. .......................... 25,000 171,836
Isuzu Motors, Ltd. ................................... 50,000 183,749
Kubota Corporation ................................... 28,000 116,469
Maruco Company, Ltd. ................................. 2,200 21,322
Matsushita Electric Industrial Company, Ltd. ......... 10,000 155,883
Mitsubishi Estate Company, Ltd. ...................... 51,000 543,736
Mitsukoshi, Ltd. ..................................... 34,000 184,266
Nippon Steel Company ................................. 93,000 255,391
Sony Corporation ..................................... 4,800 335,352
Yamato Kogyo Company, Ltd. ........................... 16,000 136,984
----------
2,559,216
MALAYSIA - 4.4%
Arab Malaysian Finance Bhd ........................... 64,000 193,604
Berjaya Sports Toto Bhd .............................. 3,000 15,367
Hong Leong Credit Bhd ................................ 31,000 202,558
Magnum Corporation Bhd ............................... 151,000 286,251
MBF Capital Bhd ...................................... 120,000 211,996
Sime Darby Bhd ....................................... 27,000 98,556
Sime Darby Bhd ....................................... 23,000 83,955
Tanjong PLC .......................................... 75,000 297,968
----------
1,390,255
MEXICO - 0.7%
Tubos De Acero De Mexico S.A. ADR* ................... 13,500 231,188
NUMBER OF MARKET
COMMON STOCKS (CONTINUED) SHARES VALUE
- --------------------------------------------------------------------------------
NETHERLANDS - 0.9%
Philips Electronics N.V. ............................. 6,050 $282,219
NEW ZEALAND - 2.4%
Brierly Investments, Ltd. ............................ 215,100 200,262
Carter Holt Harvey, Ltd. ............................. 110,600 234,374
Fletcher Challenge Building, Ltd. .................... 113,000 336,029
----------
770,665
NORWAY - 0.5%
Saga Petroleum AS .................................... 8,700 150,320
PHILIPPINES - 2.3%
C & P Homes, Inc. .................................... 471,450 223,520
Filinvest Land, Inc.* ................................ 305,750 97,413
Manila Electric Company `B' .......................... 51,000 406,219
----------
727,152
POLAND - 1.8%
Debica S.A.* ......................................... 5,600 148,445
Elektrim S.A. ........................................ 18,000 158,072
Wedel S.A. ........................................... 4,403 247,750
----------
554,267
SINGAPORE - 4.0%
City Developments, Ltd. .............................. 28,000 247,975
Clipsal Industries, Ltd. ............................. 59,700 223,875
DBS Land, Ltd. ....................................... 71,000 242,675
Inchcape, Bhd ........................................ 51,300 177,471
Jardine Strategic Holding, Ltd. ...................... 61,000 211,060
Want Want Holdings* .................................. 60,000 172,200
----------
1,275,256
SPAIN - 1.9%
Banco Popular Espanol S.A. ........................... 1,400 251,026
Repsol S.A. .......................................... 5,500 228,892
Tele Pizza S.A. ...................................... 2,700 117,126
----------
597,044
SWEDEN - 1.1%
Astra AB ............................................. 2,660 128,698
Skandinaviska Enskiilda Banken ....................... 18,900 209,479
----------
338,177
SWITZERLAND - 5.0%
ABB AG ............................................... 330 396,287
Nestle S.A. .......................................... 326 381,301
Novartis AG .......................................... 210 260,346
Saurer AG ............................................ 510 243,562
Winterthur Scheizerische Verischerungs-Gesellschaft .. 450 312,365
----------
1,593,861
THAILAND - 0.5%
BEC World Public Company, Ltd.* ...................... 14,000 133,667
Property Perfect Public Company ...................... 9,000 8,922
----------
142,589
SEE ACCOMPANYING NOTES.
- --------------------------------------------------------------------------------
19
<PAGE>
STATEMENTS OF NET ASSETS
- --------------------------------------------------------------------------------
MARCH 31, 1997
(UNAUDITED)
- ------------------------------------------------
SECURITY EQUITY FUND - GLOBAL SERIES (CONTINUED)
- ------------------------------------------------
NUMBER OF MARKET
COMMON STOCKS (CONTINUED) SHARES VALUE
- --------------------------------------------------------------------------------
UNITED KINGDOM - 9.8%
Aegis Group PLC* ..................................... 260,100 $266,928
British Telecommunication PLC ........................ 35,300 258,223
D.F.S. Furniture Company PLC ......................... 15,900 148,945
Grand Metropolitan PLC ............................... 88,200 711,088
Harvey Nichols PLC ................................... 22,800 125,042
Inchcape PLC ......................................... 116,700 502,048
RTZ Corporation PLC .................................. 13,800 218,325
SmithKline Beecham PLC ADR ........................... 1,600 112,000
Tomkins PLC .......................................... 115,900 518,589
Vodafone Group PLC ................................... 53,400 244,197
----------
3,105,385
UNITED STATES - 16.7%
Ace, Ltd. ............................................ 2,000 128,000
AlliedSignal, Inc. ................................... 1,600 114,000
Aon Corporation ...................................... 1,800 110,250
Avery-Dennison Corporation ........................... 3,000 115,500
Becton, Dickinson & Company .......................... 2,400 108,000
Boeing Company ....................................... 1,200 118,350
Border Group, Inc.* .................................. 6,000 113,250
Bristol-Myers Squibb Company ......................... 2,000 118,000
Calpine Corporation* ................................. 5,200 94,250
Chubb Corporation .................................... 2,000 107,750
Citicorp ............................................. 900 97,425
Conseco, Inc. ........................................ 3,200 114,000
Crown Cork & Seal Company, Inc. ...................... 2,000 103,250
Data General Corporation ............................. 6,900 117,300
Diamond Offshore Drilling, Inc. ...................... 2,100 143,850
Equity Residential Properties Trust .................. 2,600 115,375
Federal National Mortgage Association ................ 2,700 97,538
Fleet Financial Group, Inc. .......................... 2,000 114,500
Gap, Inc. ............................................ 3,300 110,550
Georgia Pacific Corporation .......................... 1,700 123,250
Hasbro, Inc. ......................................... 3,750 102,656
Honeywell, Inc. ...................................... 1,500 101,813
Ingersoll-Rand Company ............................... 2,500 109,063
Johnson & Johnson .................................... 2,200 116,325
Kimberly-Clark Corporation ........................... 1,100 109,313
Mobil Corporation .................................... 900 117,563
Monsanto Company ..................................... 3,400 130,050
NAC Re Corporation ................................... 3,000 106,875
NationsBank Corporation .............................. 1,900 105,213
Norwest Corporation .................................. 2,500 115,625
PacifiCare Health Systems, Inc.* ..................... 1,500 129,469
Perkin Elmer Corporation ............................. 1,500 96,563
Procter & Gamble Company ............................. 1,000 115,000
Raychem Corporation .................................. 1,400 115,325
Safeway, Inc.* ....................................... 2,400 111,300
Schlumberger, Ltd. ................................... 1,200 128,700
Service Corporation International .................... 4,200 124,950
Snap-On, Inc. ........................................ 3,100 120,125
NUMBER OF MARKET
COMMON STOCKS (CONTINUED) SHARES VALUE
- --------------------------------------------------------------------------------
UNITED STATES, CONTINUED
Structual Dynamics Research Corporation .............. 6,000 $123,750
Tosco Corporation .................................... 3,900 111,150
Tyco Corporation ..................................... 2,100 115,500
Union Pacific Corporation ............................ 2,000 113,500
Union Pacific Resources Group, Inc. .................. 3,693 98,788
United Healthcare Corporation ........................ 1,400 66,675
WMX Technologies, Inc. ............................... 2,700 82,688
Warner-Lambert Company ............................... 1,500 129,750
Williams Companies, Inc. ............................. 2,600 115,700
----------
5,277,817
----------
Total common stocks - 89.4% .......................... 28,310,355
FOREIGN GOVERNMENT AGENCY
Japanese Treasury Note, due 6/10/971 - 1.8% ..........70,000,000 565,198
----------
Total investments - 92.2% ............................ 29,179,954
Cash and other assets, less liabilities - 7.8% ....... 2,485,240
----------
Total net assets - 100.0% ............................ $31,665,194
===========
INVESTMENT CONCENTRATION
At March 31, 1997, Global Series' investment concentration, by industry, was as
follows:
Banking ............................................................... 7.9%
Capital Equipment ..................................................... 7.7%
Chemicals ............................................................. 0.4%
Construction and Housing .............................................. 1.6%
Consumer Durables ..................................................... 5.2%
Consumer Nondurables .................................................. 8.2%
Electrical and Electronics ............................................ 2.1%
Energy Sources ........................................................ 5.1%
Financial Services .................................................... 9.8%
Foreign Governments and Agencies ...................................... 1.8%
Healthcare ............................................................ 3.7%
Materials ............................................................. 14.2%
Merchandising ......................................................... 2.9%
Multi-Industry ........................................................ 6.1%
Real Estate ........................................................... 4.0%
Services .............................................................. 4.0%
Telecommunications .................................................... 3.2%
Trade ................................................................. 2.1%
Transportation ........................................................ 0.3%
Utilities ............................................................. 1.9%
Cash and other assets, less liabilities ............................... 7.8%
----------
Total net assets ...................................................... 100.0%
==========
SEE ACCOMPANYING NOTES.
- --------------------------------------------------------------------------------
20
<PAGE>
STATEMENTS OF NET ASSETS
- --------------------------------------------------------------------------------
MARCH 31, 1997
(UNAUDITED)
- ----------------------------------------------
SECURITY EQUITY FUND - ASSET ALLOCATION SERIES
- ----------------------------------------------
PRINCIPAL
AMOUNT OR
NUMBER OF MARKET
CORPORATE BONDS SHARES VALUE
- --------------------------------------------------------------------------------
BROKERAGE - 0.8%
Merrill Lynch & Company, Inc. 8.00% - 2007 ........... $50,000 $ 51,563
FINANCIAL SERVICES - 0.4%
MCN Investment Corporation, 6.32% - 2003 ............. $25,000 23,906
INDUSTRIAL SERVICES - 10.9%
Rite Aid Corporation, 6.70% -2001 .................... $125,000 122,187
Sun Company, Inc., 7.125% - 2004 ..................... $300,000 294,375
Xerox Corporation, 8.125% - 2002 ..................... $300,000 311,250
----------
727,812
----------
Total corporate bonds - 12.1% ........................ 803,281
COMMON STOCKS
- -------------
AUTO PARTS & SUPPLIES - 2.8%
Arvin Industries, Inc. ............................... 2,100 49,088
Dana Corporation ..................................... 1,400 46,025
Eaton Corporation .................................... 400 28,350
Modine Manufacturing Company ......................... 800 19,600
Simpson Industries, Inc. ............................. 2,500 24,687
Walbro Corporation ................................... 1,000 17,625
----------
185,375
BUILDING MATERIALS - 1.7%
Ameron International Corporation ..................... 500 24,937
Armstrong World Industries, Inc. ..................... 300 19,425
Crane Company ........................................ 1,050 32,944
Thomas Industries, Inc. .............................. 1,400 32,900
----------
110,206
BROADCAST MEDIA - 2.5%
A.H. Belo Corporation ................................ 1,000 37,000
Chris-Craft Industries, Inc.* ........................ 515 20,407
TCI Satellite Entertainment, Inc.* ................... 240 1,860
Tele-Communications, Inc.* ........................... 2,400 28,800
Time Warner, Inc. .................................... 1,000 43,250
U.S. West Media Group* ............................... 2,000 37,250
----------
168,567
COMPUTER SYSTEMS - 2.1%
Compaq Computer Corporation* ......................... 300 22,988
Hewlett-Packard Company .............................. 600 31,950
Quantum Corporation* ................................. 1,000 38,625
SCI Systems, Inc.* ................................... 600 30,375
Sun Microsystems, Inc.* .............................. 600 17,325
----------
141,263
NUMBER OF MARKET
COMMON STOCKS (CONTINUED) SHARES VALUE
- --------------------------------------------------------------------------------
ELECTRONICS - 2.0%
Bell Industries, Inc.* ............................... 1,000 $ 18,000
CTS Corporation ...................................... 700 35,700
Fluke (John) Manufacturing Company ................... 700 31,063
Harris Corporation ................................... 400 30,750
Zero Corporation ..................................... 1,000 18,750
----------
134,263
MACHINERY - 1.9%
Dover Corporation .................................... 700 36,750
GATX Corporation ..................................... 400 19,550
Graco, Inc. .......................................... 800 23,000
Lindsay Manufacturing Company ........................ 100 3,275
Parker-Hannifin Corporation .......................... 600 25,650
Trinova Corporation .................................. 600 20,100
----------
128,325
MINING & METALS - 2.3%
Asarco, Inc. ......................................... 600 16,875
Brush Wellman, Inc. .................................. 3,700 67,063
Handy & Harman ....................................... 1,300 19,500
Phelps Dodge Corporation ............................. 700 51,187
----------
154,625
RECREATION - 2.0%
Brunswick Corporation ................................ 1,200 32,250
Callaway Golf Company ................................ 700 20,038
Handleman Company* ................................... 1,200 8,550
Harcourt General, Inc. ............................... 500 23,250
Huffy Corporation .................................... 1,700 23,375
King World Productions, Inc.* ........................ 600 21,900
----------
129,363
RESTAURANTS - 2.5%
Applebees International, Inc. ........................ 600 14,475
CKE Restaurants, Inc. ................................ 1,500 33,187
International Dairy Queen, Inc.* ..................... 1,000 22,000
Luby's Cafeterias, Inc. .............................. 1,000 18,625
Ruby Tuesday, Inc. ................................... 1,500 26,063
Ryan's Family Steak House, Inc.* ..................... 4,000 31,250
Wendy's International, Inc. .......................... 1,000 20,625
----------
166,225
STEEL - 2.1%
Carpenter Technology Corporation ..................... 400 15,300
Cleveland Cliffs, Inc. ............................... 1,300 54,925
Commerical Metals Company ............................ 1,100 31,487
Quanex Corporation ................................... 1,000 25,125
Steel Technologies, Inc. ............................. 1,000 11,250
----------
138,087
SEE ACCOMPANYING NOTES.
- --------------------------------------------------------------------------------
21
<PAGE>
STATEMENTS OF NET ASSETS
- --------------------------------------------------------------------------------
MARCH 31, 1997
(UNAUDITED)
- ----------------------------------------------------------
SECURITY EQUITY FUND - ASSET ALLOCATION SERIES (continued)
- ----------------------------------------------------------
PRINCIPAL
AMOUNT OR
NUMBER OF MARKET
COMMON STOCKS SHARES VALUE
- --------------------------------------------------------------------------------
TELECOMMUNICATIONS - 2.2%
Ameritech Corporation ................................ 400 $24,600
Bell Atlantic Corporation ............................ 500 30,438
Bellsouth Corporation ................................ 500 21,125
GTE Corporation ...................................... 500 23,312
Nynex Corporation .................................... 400 18,250
Pacific Telesis Group ................................ 400 15,100
Southern New England Telecommunications .............. 300 10,762
----------
143,587
----------
Total common stocks - 24.1% .......................... 1,599,886
U.S. GOVERNMENT AGENCIES
- ------------------------
FEDERAL HOME LOAN MORTGAGE CORPORATION - 2.2%
7.00% - 2020 ................................ $100,000 96,658
7.00% - 2021 ................................ $50,000 48,063
FEDERAL NATIONAL MORTGAGE ASSOCIATION - 3.1%
6.50% - 2018 ................................ $50,000 47,230
6.95% - 2020 ................................ $130,000 122,355
7.50% - 2020 ................................ $40,000 39,358
----------
Total U.S. government & government agencies - 5.3% ... 353,664
FOREIGN STOCKS
- --------------
BELGIUM - 6.8%
Cementbedrijven Cimenteries .......................... 800 79,802
Delhaize - Le Lion ................................... 800 44,540
Electrabel ........................................... 150 34,449
Fortis AG ............................................ 300 53,501
Gevaert Photo Productions ............................ 400 29,809
Petrofina SA ......................................... 150 52,196
Royale Belgium ....................................... 250 63,795
Solvay SA ............................................ 150 90,473
----------
448,565
GERMANY - 7.4%
Allianz AG Holdings .................................. 36 74,098
BASF AG .............................................. 1,081 41,403
Bayer AG ............................................. 735 30,926
Continental AG ....................................... 202 4,510
Daimler-Benz AG* ..................................... 850 68,575
Degussa AG ........................................... 14 5,975
Deutsche Bank AG ..................................... 692 39,196
Dresdner Bank AG ..................................... 1,211 43,079
Friedrich Grohe AG - Vorzugsak ....................... 7 2,232
Heidelberger Zement AG ............................... 79 6,960
Hochtief AG .......................................... 180 7,552
Linde AG ............................................. 14 9,843
Merck KGAA ........................................... 187 7,655
Muenchener Rueckversicherungs-Gesellschaft AG ........ 7 18,167
NUMBER OF MARKET
FOREIGN STOCKS (continued) SHARES VALUE
- --------------------------------------------------------------------------------
GERMANY, CONTINUED
Preussag AG .......................................... 72 19,463
SAP AG ............................................... 122 20,767
Siemens AG ........................................... 1,038 55,870
Veba AG .............................................. 634 36,405
----------
492,676
HONG KONG - 0.0%
Bank of East Asia .................................... 720 2,444
ITALY - 4.4%
Assicurazioni Generali ............................... 2,475 43,321
Banco Commerciale Italiane ........................... 11,000 22,023
Edison SPA ........................................... 4,000 21,364
Fiat SPA ............................................. 7,000 22,239
Ina-Instituto Naz Assicuraz .......................... 16,638 22,340
Instituto Mobiliare Italiano ......................... 3,208 27,874
Mediobanca ........................................... 3,500 21,966
Montedison SPA* ...................................... 29,600 19,961
Telecom Italia Mobile SPA ............................ 18,821 54,153
Telcom Italia SPA .................................... 15,000 37,494
----------
292,735
JAPAN - 10.4%
Asahi Bank, Ltd. ..................................... 1,000 6,284
The Bank of Tokyo-Mitsubishi ......................... 4,000 62,353
Bank of Yokohama, Ltd. ............................... 1,000 4,604
East Japan Railway Company ........................... 1 4,079
Fuji Bank, Ltd. ...................................... 1,000 11,550
Fujitsu, Ltd. ........................................ 1,000 10,177
Hitachi, Ltd. (Hit. Seisakusho) ...................... 1,000 8,885
Industrial Bank of Japan ............................. 1,000 10,177
Itoham Foods ......................................... 1,000 5,024
Japan Energy Corporation ............................. 1,000 2,399
Kawasaki Heavy Industries ............................ 4,000 15,540
Marui Company, Ltd. .................................. 1,000 14,458
Matsushita Electric Industrial Company, Ltd. ......... 1,000 15,588
Mitsubishi Corporation ............................... 4,000 35,538
Mitsubishi Heavy Industrial, Ltd. .................... 4,000 26,007
Mitsubishi Materials Corporation ..................... 4,000 13,957
Mitsubishi Trust & Bank .............................. 1,000 9,934
Nippon Comsys Corporation ............................ 1,000 10,338
Nippon Shokubai K.K. Company ......................... 1,000 5,961
NSK Ltd. ............................................. 4,000 21,291
Nissan Motor Company, Ltd. ........................... 1,000 6,017
Nomura Securities Company, Ltd. ...................... 1,000 11,065
Oyo Corporation ...................................... 320 9,744
Sakura Bank, Ltd. .................................... 1,000 5,597
Sega Enterprises ..................................... 100 2,504
Sekisui House, Ltd. .................................. 4,000 39,092
Sharp Corporation .................................... 1,000 11,873
Shimizu Corporation .................................. 6,000 33,196
SEE ACCOMPANYING NOTES.
- --------------------------------------------------------------------------------
22
<PAGE>
STATEMENTS OF NET ASSETS
- --------------------------------------------------------------------------------
MARCH 31, 1997
(UNAUDITED)
- ----------------------------------------------------------
SECURITY EQUITY FUND - ASSET ALLOCATION SERIES (continued)
- ----------------------------------------------------------
PRINCIPAL
AMOUNT OR
NUMBER OF MARKET
FOREIGN STOCKS (continued) SHARES VALUE
- --------------------------------------------------------------------------------
JAPAN, CONTINUED
Shin-Etsu Chemical Company ........................... 1,000 $18,981
Sumitomo Bank ........................................ 4,000 47,492
Sumitomo Chemical Company ............................ 6,000 23,407
Sumitomo Marine & Fire ............................... 1,000 6,058
Tokyo Dome Corporation ............................... 1,000 12,600
Tokyo Electric Power ................................. 2,700 49,067
Tokyu Corporation .................................... 4,000 18,803
Toyoda Automatic Loom Works .......................... 1,000 16,558
Toyota Motor Corporation ............................. 3,000 75,842
Yamaichi Securities .................................. 3,000 9,353
----------
691,393
----------
Total foreign stocks - 29.0% ......................... 1,927,813
TEMPORARY CASH INVESTMENTS
- --------------------------
Chase Master Note Program - 2.6% ..................... 176,000 176,000
Federal Farm Credit Banks - 7.5%
5.15% - 4-7-97 .............................. $500,000 499,571
Federal Mortgage Corporation - 6.0%
5.21% - 4-25-97 ............................. $400,000 398,611
Federal National Mortgage Association - 13.5%
5.10% - 4-10-97 ............................. $500,000 499,362
5.09% - 4-24-97 ............................. $100,000 99,675
5.30% - 4-29-97 ............................. $300,000 298,763
----------
897,800
----------
Total temporary cash investments - 29.6% ............. 1,971,982
----------
Total investments - 100.1% ........................... 6,656,626
Liabilities, less cash and other assets - (0.1%) ..... (4,400)
----------
Total net assets - 100.0% ............................ $6,652,226
==========
- ----------------------------------------------
SECURITY EQUITY FUND - SOCIAL AWARENESS SERIES
- ----------------------------------------------
COMMON STOCKS
- -------------
ADVERTISING - 1.2%
Omnicom Group, Inc. .................................. 800 $39,900
BANKING & FINANCE - 3.8%
Banc One Corporation ................................. 800 31,800
Bank of New York Company, Inc. ....................... 800 29,400
H.F. Ahmanson & Company .............................. 800 29,200
Northern Trust Corporation ........................... 900 33,750
----------
124,150
BEVERAGES - 3.5%
Coca-Cola Company .................................... 1,500 83,813
PepsiCo, Inc. ........................................ 1,000 32,625
----------
116,438
NUMBER OF MARKET
COMMON STOCKS (continued) SHARES VALUE
- --------------------------------------------------------------------------------
BIOTECHNOLOGY - 1.0%
Amgen, Inc.* ......................................... 600 $33,525
BUSINESS SERVICES - 1.6%
Automatic Data Processing, Inc. ...................... 900 37,688
Paychex, Inc. ........................................ 400 16,450
----------
54,138
CHEMICALS--SPECIALTY - 3.0%
Nalco Chemical Company ............................... 800 29,900
Praxxair, Inc. ....................................... 1,000 44,875
Sigma-Aldrich ........................................ 800 24,700
----------
99,475
COMPUTER SOFTWARE - 7.1%
BMC Software, Inc.* .................................. 1,200 55,350
Electronics for Imaging, Inc.* ....................... 800 31,900
HBO & Company ........................................ 600 28,500
Microsoft Corporation* ............................... 700 64,181
Parametric Technology Corporation* ................... 500 22,562
Peoplesoft, Inc.* .................................... 800 32,000
----------
234,493
COMPUTER SYSTEMS - 2.8%
Compaq Computer Corporation* ......................... 300 22,987
Hewlett-Packard Company .............................. 700 37,274
Sun Microsystems, Inc.* .............................. 1,100 31,763
----------
92,024
CONSUMER SERVICES - 2.5%
Apollo Group, Inc. (Cl.A)* ........................... 1,300 31,850
Service Corporation International .................... 1,100 32,725
Sylvan Learning Systems, Inc.* ....................... 750 18,563
----------
83,138
CONSUMER STAPLES - 0.9%
Rexall Sundown, Inc.* ................................ 1,200 30,750
ELECTRONIC--INSTRUMENTS - 1.7%
Perkin-Elmer Corporation ............................. 400 25,750
Solectron Corporation* ............................... 600 30,075
----------
55,825
FINANCIAL SERVICES - 3.2%
Federal Home Loan Mortgage Corporation ............... 1,300 35,425
Federal National Mortgage Association ................ 1,000 36,125
Finova Group, Inc. ................................... 500 33,813
----------
105,363
HEALTH CARE - 2.3%
Cardinal Health, Inc. ................................ 750 40,781
Omnicare, Inc. ....................................... 800 18,800
Quintiles Transnational Corporation* ................. 300 16,163
----------
75,744
HOUSEHOLD FURNISHING - 1.6%
Leggett & Platt, Inc. ................................ 1,600 52,000
SEE ACCOMPANYING NOTES.
- --------------------------------------------------------------------------------
23
<PAGE>
STATEMENTS OF NET ASSETS
- --------------------------------------------------------------------------------
MARCH 31, 1997
(UNAUDITED)
- ----------------------------------------------------------
SECURITY EQUITY FUND - SOCIAL AWARENESS SERIES (continued)
- ----------------------------------------------------------
NUMBER OF MARKET
COMMON STOCKS (continued) SHARES VALUE
- --------------------------------------------------------------------------------
HOUSEHOLD PRODUCTS - 5.6%
Clorox Company ....................................... 300 $33,638
Colgate-Palmolive Company ............................ 400 39,850
Kimberly-Clark Corporation ........................... 300 29,813
Procter & Gamble Company ............................. 700 80,500
----------
183,801
INSURANCE - 4.8%
Aetna, Inc. .......................................... 400 34,350
American International Group, Inc. ................... 500 58,687
Chubb Corporation .................................... 600 32,325
SunAmerica, Inc. ..................................... 800 30,100
----------
155,462
MACHINERY - 1.2%
Deere & Company ...................................... 900 39,150
MANUFACTURING - 1.6%
Illinois Tool Works, Inc. ............................ 600 48,975
MEDICAL INSTRUMENTS - 5.2%
Boston Scientific Corporation* ....................... 600 37,050
Guidant Corporation .................................. 1,300 79,950
Medtronics, Inc. ..................................... 250 15,563
St. Jude Medical, Inc.* .............................. 1,200 40,050
----------
172,613
OIL & GAS EXPLORATION - 2.6%
Anadarko Petroleum Corporation ....................... 500 28,063
Apache Corporation ................................... 600 20,100
Sonat, Inc. .......................................... 700 38,150
----------
86,313
PACKAGING & CONTAINERS - 0.8%
Sealed Air Corporation* .............................. 600 24,675
PHARMACEUTICALS - 6.7%
Dura Pharmaceuticals, Inc.* .......................... 700 25,025
Johnson & Johnson .................................... 1,300 68,738
Merck & Company, Inc. ................................ 900 75,825
Schering-Plough Corporation .......................... 700 50,925
----------
220,513
POLLUTION CONTROL - 1.1%
United States Filter Corporation* .................... 1,200 37,050
RESTAURANTS - 2.1%
Landry's Seafood Restaurants* ........................ 1,100 17,463
Papa John's International, Inc.* ..................... 750 19,781
Starbuck's Corporation* .............................. 1,100 32,587
----------
69,831
RETAIL TRADE - 7.9%
Dayton Hudson Corporation ............................ 1,100 45,925
Kohl's Corporation* .................................. 600 25,425
Nine West Group, Inc.* ............................... 400 17,900
Petsmart, Inc.* ...................................... 800 16,200
Staples, Inc.* ....................................... 1,200 24,150
NUMBER OF MARKET
COMMON STOCKS (continued) SHARES VALUE
- --------------------------------------------------------------------------------
RETAIL TRADE, CONTINUED
TJX Companies, Inc. .................................. 700 $29,925
Tiffany & Company .................................... 600 22,800
Toys `R' Us, Inc.* ................................... 1,100 30,800
Walgreens Company .................................... 1,100 46,062
----------
259,187
SEMICONDUCTORS - 7.3%
Analog Devices, Inc.* ................................ 1,000 22,500
Applied Materials, Inc.* ............................. 700 32,462
Intel Corporation .................................... 600 83,475
KLA Instruments Corporation* ......................... 900 32,850
Novellus Systems, Inc.* .............................. 500 34,500
Xilinx, Inc.* ........................................ 700 34,125
----------
239,912
TELECOMMUNICATIONS - 0.9%
ADC Telecommunications, Inc.* ........................ 1,100 29,562
TEXTILES--APPAREL - 2.0%
Jones Apparel Group, Inc. ............................ 900 33,412
Tommy Hilfiger Corporation* .......................... 600 31,350
----------
64,762
TOOLS - 1.6%
Snap-On, Inc. ........................................ 1,400 54,250
TOYS & SPORTING GOODS - 0.6%
Mattel, Inc. ......................................... 800 19,200
TRANSPORTATION - 0.7%
Illinois Central Corporation ......................... 700 22,050
UTILITITES - 0.6%
Consolidated Natural Gas Company ..................... 400 20,150
----------
Total common stocks - 89.5% .......................... 2,944,419
Cash and other assets, less liabilities - 10.5% ...... 344,687
----------
Total net assets - 100.0% ............................ $3,289,106
==========
- -------------------
SECURITY ULTRA FUND
- -------------------
COMMON STOCKS
- -------------
ADVERTISING - 1.4%
Omincom Group, Inc. .................................. 19,000 $947,625
BANKS & TRUSTS - 3.2%
State Street Boston Corporation ...................... 18,000 1,248,750
Northern Trust Corporation ........................... 26,000 975,000
----------
2,223,750
BEVERAGES - 2.4%
Coca-Cola Enterprises, Inc. .......................... 28,600 1,640,925
SEE ACCOMPANYING NOTES.
- --------------------------------------------------------------------------------
24
<PAGE>
STATEMENTS OF NET ASSETS
- --------------------------------------------------------------------------------
MARCH 31, 1997
(UNAUDITED)
- -------------------------------
SECURITY ULTRA FUND (continued)
- -------------------------------
NUMBER OF MARKET
COMMON STOCKS (continued) SHARES VALUE
- --------------------------------------------------------------------------------
BIOTECHNOLOGY - 2.7%
Amgen, Inc.* ......................................... 12,500 $698,438
Biogen, Inc.* ........................................ 17,200 642,850
Centocor, Inc.* ...................................... 16,000 488,000
----------
1,829,288
BROKERAGE - 1.8%
Schwab (Charles) Corporation ......................... 39,000 1,243,125
BUSINESS SERVICES - 1.6%
Cambridge Technology Partners, Inc.* ................. 26,000 601,250
Paychex, Inc. ........................................ 12,500 514,063
----------
1,115,313
CHEMICALS--SPECIALTY - 2.4%
Praxxair, Inc. ....................................... 21,000 942,375
Sigma-Aldrich Corporation ............................ 22,000 679,250
----------
1,621,625
COMPUTER SOFTWARE - 8.3%
BMC Software, Inc.* .................................. 25,000 1,153,125
Cadence Design Systems, Inc.* ........................ 20,250 696,093
Electronics for Imaging, Inc.* ....................... 18,000 717,750
HBO & Company ........................................ 15,500 736,250
Parametric Technology Corporation* ................... 15,000 676,875
Peoplesoft, Inc.* .................................... 23,000 920,000
Project Software & Development* ...................... 14,500 464,000
Wind River Systems* .................................. 12,750 301,218
----------
5,665,311
COMPUTER SYSTEMS - 4.0%
Dell Computer Corporation* ........................... 11,500 777,687
Encad, Inc.* ......................................... 24,500 731,937
SCI Systems, Inc.* ................................... 17,500 885,938
Sanmina Corporation* ................................. 7,000 313,250
----------
2,708,812
CONSUMER SERVICES - 1.5%
Apollo Group, Inc.* .................................. 15,000 367,500
Stewart Enterprises, Inc. (Cl.A) ..................... 17,500 638,750
----------
1,006,250
CONSUMER STAPLES - 0.9%
Rexall Sundown, Inc.* ................................ 25,000 640,625
ELECTRONIC--INSTRUMENTS - 0.5%
Perkin-Elmer Corporation ............................. 5,300 341,187
ENTERTAINMENT - 2.3%
Circus Circus Enterprises, Inc.* ..................... 25,000 650,000
Mirage Resorts, Inc.* ................................ 45,000 956,250
----------
1,606,250
FINANCIAL SERVICES - 2.1%
Franklin Resources, Inc. ............................. 28,000 1,428,000
NUMBER OF MARKET
COMMON STOCKS (continued) SHARES VALUE
- --------------------------------------------------------------------------------
HEALTH CARE - 3.3%
Cardinal Health, Inc. ................................ 24,000 $1,305,000
Parexel International Corporation* ................... 16,000 368,000
Quintiles Transnational Corporation* ................. 11,100 598,012
----------
2,271,012
HEALTH CARE--HMO - 1.5%
Oxford Health Plans, Inc.* ........................... 17,100 1,002,487
HOTEL/MOTEL - 0.5%
Promus Hotel Corporation* ............................ 11,000 365,750
HOUSEHOLD PRODUCTS - 0.5%
Dial Corporation ..................................... 22,000 354,750
INSURANCE - 3.3%
Aflac, Inc. .......................................... 27,500 1,031,250
SunAmerica, Inc. ..................................... 32,000 1,204,000
----------
2,235,250
INVESTMENT MANAGEMENT - 0.7%
T. Rowe Price Associates ............................. 13,700 508,613
MANUFACTURING - 1.3%
Illinois Tool Works, Inc. ............................ 10,500 857,063
MEDICAL INSTRUMENTS - 1.4%
Guidant Corporation .................................. 15,500 953,250
MEDICAL PRODUCTS - 0.7%
Hologic, Inc.* ....................................... 19,500 475,313
OFFICE EQUIPMENT & SUPPLIES - 2.0%
Checkpoint Systems, Inc. ............................. 16,500 282,563
Diebold, Inc. ........................................ 16,500 620,812
Viking Office Products, Inc.* ........................ 23,000 445,625
----------
1,349,000
OIL & GAS DRILLING - 2.4%
Ensco International, Inc.* ........................... 17,500 861,875
Noble Affiliates, Inc. ............................... 20,000 755,000
----------
1,616,875
OIL & GAS EQUIPMENT & SERVICES - 3.9%
BJ Services Company* ................................. 9,000 430,875
Global Marine, Inc.* ................................. 42,000 903,000
Smith International, Inc.* ........................... 10,000 456,250
Tidewater, Inc. ...................................... 15,000 690,000
Varco International, Inc.* ........................... 8,000 200,000
----------
2,680,125
OIL & GAS EXPLORATION - 2.2%
Anadarko Petroleum Corporation ....................... 11,400 639,825
Sonat, Inc. .......................................... 16,500 899,250
----------
1,539,075
PACKAGING & CONTAINERS - 0.6%
Sealed Air Corporation* .............................. 10,500 431,813
SEE ACCOMPANYING NOTES.
- --------------------------------------------------------------------------------
25
<PAGE>
STATEMENTS OF NET ASSETS
- --------------------------------------------------------------------------------
MARCH 31, 1997
(UNAUDITED)
- -------------------------------
SECURITY ULTRA FUND (continued)
- -------------------------------
NUMBER OF MARKET
COMMON STOCKS (continued) SHARES VALUE
- --------------------------------------------------------------------------------
PHARMACEUTICALS - 2.8%
Dura Pharmaceuticals, Inc.* .......................... 36,000 $1,287,000
Jones Medical Industries, Inc. ....................... 12,500 300,000
Medicis Pharmaceuticals Corporation .................. 10,500 312,375
----------
1,899,375
POLLUTION CONTROL - 1.9%
United States Filter Corporation* .................... 16,500 509,438
United Waste Systems, Inc.* .......................... 21,000 782,250
----------
1,291,688
RESTAURANTS - 1.5%
Landry's Seafood Restaurants, Inc.* .................. 29,500 468,313
Papa John's International, Inc.* ..................... 22,125 583,546
----------
1,051,859
RETAIL - 6.4%
Bed Bath & Beyond, Inc.* ............................. 16,000 387,000
Consolidated Stores Corporation ...................... 16,000 564,000
Dollar General Corporation ........................... 25,000 781,250
Kohl's Corporation* .................................. 20,000 847,500
Nine West Group, Inc.* ............................... 12,000 537,000
Staples, Inc* ........................................ 46,375 933,297
Tiffany & Company .................................... 8,000 304,000
----------
4,354,047
SEMICONDUCTORS - 8.0%
Altera Corporation* .................................. 22,000 946,000
Analog Devices, Inc.* ................................ 36,666 824,985
Cymer, Inc.* ......................................... 8,500 304,938
KLA Instruments Corporation* ......................... 22,000 803,000
Linear Technology Corporation* ....................... 18,000 796,500
Novellus Systems, Inc.* .............................. 13,000 897,000
Xilinx, Inc* ......................................... 18,000 877,500
----------
5,449,923
NUMBER OF MARKET
COMMON STOCKS (continued) SHARES VALUE
- --------------------------------------------------------------------------------
TELECOMMUNICATIONS - 0.4%
ADC Telecommunications, Inc.* ........................ 11,000 $295,625
TEXTILES--APPAREL - 1.6%
Tommy Hilfiger Corporation* .......................... 11,500 600,875
Jones Apparel Group, Inc. ............................ 13,000 482,625
----------
1,083,500
TOOLS - 1.1%
Snap-On, Inc. ........................................ 20,250 784,687
TRANSPORTATION - 0.7%
Illinois Central Corporation ......................... 15,000 472,500
----------
Total common stocks - 83.8% .......................... 57,341,666
Cash and other assets, less liabilities - 16.2% ...... 11,080,139
----------
Total net assets - 100.0% ............................ $68,421,805
==========
The identified cost of investments owned at March 31, 1997, 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) Principal amount on foreign bond is reflected in local currency (e.g.,
Japanese yen) while market value is reflected in U.S. dollars.
SEE ACCOMPANYING NOTES.
- --------------------------------------------------------------------------------
26
<PAGE>
BALANCE SHEETS
- --------------------------------------------------------------------------------
MARCH 31, 1997
(UNAUDITED)
<TABLE>
<CAPTION>
SECURITY EQUITY FUND
-------------------------------------------------------------
SECURITY ASSET SOCIAL SECURITY
GROWTH AND EQUITY GLOBAL ALLOCATION AWARENESS ULTRA
INCOME FUND SERIES SERIES SERIES SERIES FUND
---------------------------------------------------------------------------------------
ASSETS
<S> <C> <C> <C> <C> <C> <C>
Investments, at value (identified
cost $65,104,785, $471,902,761,
$26,898,645, $6,621,740, $3,027,893
and $49,626,171, respectively) .......... $75,594,550 $639,613,125 $29,179,954 $6,656,626 $2,944,419 $57,341,666
Cash ...................................... 453,382 20,281,124 2,207,120 349 560,146 11,503,954
Receivables:
Fund shares sold ........................ 35,894 995,319 90,158 25,673 43,693 30,238
Securities sold ......................... 2,435,329 -- 954,715 -- 32,709 825,042
Forward foreign exchange contracts ...... -- -- 5,033 -- -- --
Interest ................................ 84,070 88,351 7,078 19,280 2,263 27,748
Dividends ............................... 301,894 790,067 85,140 4,502 1,772 23,903
Miscellaneous ........................... -- -- -- 9,968 15,738 --
Foreign taxes recoverable ............... -- -- 22,511 1,253 -- --
------------ ------------ ------------ ------------ ------------ ------------
Total assets ................... $78,905,119 $661,767,986 $32,551,709 $6,717,651 $3,600,740 $69,752,551
============ ============ ============ ============ ============ ============
LIABILITIES AND NET ASSETS
Liabilities:
Payable for:
Securities purchased .................... $2,829,446 $615,832 $816,232 $39,251 $307,556 $726,659
Fund shares redeemed .................... 57,178 1,616,462 5,669 --- --- 410,582
Forward exchange contracts .............. -- -- 7,019 -- -- --
Other Liabilities:
Management fees ......................... 84,397 605,356 49,942 13,484 -- 80,204
Custodian fees .......................... -- -- -- -- 214 --
Transfer and administration fees ........ -- -- -- 4,601 590 --
Professional fees ....................... -- -- -- 3,536 -- --
12b-1 distribution plan fees ............ 3,239 52,540 7,653 2,898 1,567 3,801
Variation margin payable ................ -- -- -- -- -- 109,500
Miscellaneous fees ...................... -- -- -- 1,655 1,707 --
------------ ------------ ------------ ------------ ------------ ------------
Total liabilities ..................... 2,974,260 2,890,190 886,515 65,425 311,634 1,330,746
Net Assets:
Paid in capital ......................... 59,101,750 461,328,036 28,499,178 6,227,177 3,481,296 58,487,214
Undistributed net investment income (loss) 272,396 1,036,678 (224,909) 24,303 (4,846) (247,345)
Accumulated undistributed net realized
gain (loss) on sale of investments,
futures and foreigncurrency transactions 6,066,948 28,802,718 1,120,576 365,932 (103,870) 2,752,004
Net unrealized appreciation (depreciation)
in value of investments, futures and
translation of assets and liabilities
in foreign currency ................... 10,489,765 167,710,364 2,270,349 34,814 (83,474) 7,429,932
------------ ------------ ------------ ------------ ------------ ------------
Net assets .......................... 75,930,859 658,877,796 31,665,194 6,652,226 3,289,106 68,421,805
------------ ------------ ------------ ------------ ------------ ------------
Total liabilities and net assets .. $78,905,119 $661,767,986 $32,551,709 $6,717,651 $3,600,740 $69,752,551
============ ============ ============ ============ ============ ============
CLASS "A" SHARES
Capital shares outstanding .............. 8,453,267 82,720,343 1,850,681 289,192 99,799 9,123,631
Net assets .............................. $72,149,981 $600,067,470 $22,017,841 $3,234,990 $1,430,821 $64,007,175
Net asset value per share (net assets
divided by shares outstanding) ........ $8.54 $7.25 $11.90 $11.19 $14.34 $7.02
Add: Selling commission (5.75% of the
offering price) ....................... $0.52 $0.44 $0.73 $0.68 $0.87 $0.43
------------ ------------ ------------ ------------ ------------ ------------
Offering price per share (net asset value
divided by 94.25%) .................... $9.06 $7.69 $12.63 $11.87 $15.21 $7.45
============ ============ ============ ============ ============ ============
CLASS "B" SHARES
Capital shares outstanding .............. 449,200 8,312,485 827,488 307,412 130,076 649,744
Net assets .............................. $3,780,878 $58,810,326 $9,647,353 $3,417,236 $1,858,285 $4,414,630
Net asset value per share
(net assets divided
by shares outstanding) ................ $8.42 $7.08 $11.66 $11.12 $14.29 $6.79
============ ============ ============ ============ ============ ============
</TABLE>
SEE ACCOMPANYING NOTES.
- --------------------------------------------------------------------------------
27
<PAGE>
STATEMENTS OF OPERATIONS
- --------------------------------------------------------------------------------
FOR THE SIX MONTHS ENDED
MARCH 31, 1997
(UNAUDITED)
<TABLE>
<CAPTION>
SECURITY EQUITY FUND
-------------------------------------------------------------
SECURITY ASSET SOCIAL SECURITY
GROWTH AND EQUITY GLOBAL ALLOCATION AWARENESS ULTRA
INCOME FUND SERIES SERIES SERIES SERIES* FUND
---------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Investment Income:
Dividends ............................... $691,035 $4,556,233 $214,269 $42,018 $8,158 $105,238
Interest ................................ 507,250 575,729 40,963 49,809 6,749 154,140
------------ ------------ ------------ ------------ ------------ ------------
1,198,285 5,131,962 255,232 91,827 14,907 259,378
Less foreign tax expense .............. -- -- (23,862) (1,124) -- --
------------ ------------ ------------ ------------ ------------ ------------
Total investment income ............... 1,198,285 5,131,962 231,370 90,703 14,907 259,378
Expenses:
Management fees ......................... 488,268 3,407,298 289,193 28,710 10,785 486,111
Custodian fees .......................... -- -- -- 2,421 1,143 --
Transfer/maintenance fees ............... -- -- -- 3,521 860 --
Administration fees ..................... -- -- -- 23,877 972 --
Directors' fees ......................... -- -- -- 308 114 --
Professional fees ....................... -- -- -- 3,161 1,080 --
Reports to shareholders ................. -- -- -- 295 19 --
Registration fees ....................... -- -- -- 5,243 9,157 --
Other expenses .......................... -- -- -- 632 509 --
12b-1 distribution plan fees (Class B) .. 15,298 261,527 41,936 16,503 5,899 20,612
Reimbursement of expenses ............... -- -- -- (21,552) (10,785) --
------------ ------------ ------------ ------------ ------------ ------------
Total expenses ........................ 503,566 3,668,825 331,129 63,119 19,753 506,723
------------ ------------ ------------ ------------ ------------ ------------
Net investment income (loss) ........ 694,719 1,463,137 (99,759) 27,584 (4,846) (247,345)
NET REALIZED AND UNREALIZED GAIN (LOSS):
Net realized gain (loss) during the period on:
Investments ............................. 6,220,879 36,868,278 1,230,114 372,660 (103,870) 3,523,977
Foreign currency transactions ........... -- -- 89,839 (64) -- --
------------ ------------ ------------ ------------ ------------ ------------
Net realized gain (loss) .............. 6,220,879 36,868,278 1,319,953 372,596 (103,870) 3,523,977
Net change in unrealized appreciation
(depreciation) during the period on:
Investments ............................. (4,732,237) (4,965,231) 258,357 (91,203) (83,474) (9,974,473)
Translation of assets and liabilities in
foreign currencies .................... -- -- (10,960) (61) -- --
Futures contracts ....................... -- -- -- -- -- 285,562
------------ ------------ ------------ ------------ ------------ ------------
Net unrealized appreciation
(depreciation) ........................ (4,732,237) (4,965,231) 247,397 (91,264) (83,474) (9,688,911)
------------ ------------ ------------ ------------ ------------ ------------
Net gain (loss) .................... 1,488,642 31,903,047 1,567,350 281,332 (187,344) (6,164,934)
------------ ------------ ------------ ------------ ------------ ------------
Net increase (decrease) in net
assets resulting from operations $2,183,361 $33,366,184 $1,467,591 $308,916 $(192,190) $(6,412,279)
============ ============ ============ ============ ============ ============
*Period November 1, 1996 (inception) through March 31, 1997.
</TABLE>
SEE ACCOMPANYING NOTES.
- --------------------------------------------------------------------------------
28
<PAGE>
STATEMENTS OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
FOR THE SIX MONTHS ENDED
MARCH 31, 1997
(UNAUDITED)
<TABLE>
<CAPTION>
SECURITY EQUITY FUND
-------------------------------------------------------------
SECURITY ASSET SOCIAL SECURITY
GROWTH AND EQUITY GLOBAL ALLOCATION AWARENESS ULTRA
INCOME FUND SERIES SERIES SERIES SERIES* FUND
---------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
INCREASE (DECREASE) IN NET ASSETS
FROM OPERATIONS:
Net investment income (loss) .............. $694,719 $1,463,137 $(99,759) $27,584 $(4,846) $(247,345)
Net realized gain (loss) .................. 6,220,879 36,868,278 1,319,953 372,596 (103,870) 3,523,977
Unrealized appreciation
(depreciation)
during the period ......................... (4,732,237) (4,965,231) 247,397 (91,264) (83,474) (9,688,911)
------------ ------------- ------------ ----------- ----------- ------------
Net increase (decrease) in net
assets resulting from operations ...... 2,183,361 33,366,184 1,467,591 308,916 (192,190) (6,412,279)
Distributions to shareholders from:
Net investment income
Class A ................................. (592,251) (3,155,322) (524,784) (63,009) -- --
Class B ................................. (12,770) -- (272,215) (52,830) -- --
Net realized gain
Class A ................................. (5,648,304) (49,869,439) (1,243,269) (61,070) -- (5,180,780)
Class B ................................. (232,549) (4,463,902) (515,069) (73,554) -- (326,155)
------------ ------------- ------------ ----------- ----------- ------------
Total distributions to shareholders ..... (6,485,874) (57,488,663) (2,555,337) (250,463) -- (5,506,935)
CAPITAL SHARE TRANSACTIONS (A):
Proceeds from sale of shares
Class A ................................. 2,880,625 131,937,085 2,978,950 851,931 1,560,330 15,997,022
Class B ................................. 1,652,118 61,661,540 2,720,268 758,871 1,974,207 3,220,779
Dividends reinvested
Class A ................................. 5,739,367 49,656,221 1,808,604 122,613 -- 4,973,700
Class B ................................. 237,811 4,431,044 714,502 124,004 -- 326,142
Shares redeemed
Class A ................................. (5,652,383) (135,701,733) (1,653,670) (211,586) (53,241) (19,986,314)
Class B ................................. (144,460) (43,486,558) (744,226) (282,232) -- (1,118,745)
------------ ------------- ------------ ----------- ----------- ------------
Net increase from capital share
transactions ........................ 4,713,078 68,497,599 5,824,428 1,363,601 3,481,296 3,412,584
------------ ------------- ------------ ----------- ----------- ------------
Total increase (decrease)
in net assets ..................... 410,565 44,375,120 4,736,682 1,422,054 3,289,106 (8,506,630)
NET ASSETS:
Beginning of period ....................... 75,520,294 614,502,676 26,928,512 5,230,172 -- 76,928,435
------------ ------------- ------------ ----------- ----------- ------------
End of period ............................. $75,930,859 $658,877,796 $31,665,194 $6,652,226 $3,289,106 $68,421,805
============ ============ ============ ============ ============ ============
Undistributed net investment
income (loss) at end
of period ................................. $272,396 $1,036,678 $(224,909) $24,303 $(4,846) $(247,345)
============ ============ ============ ============ ============ ============
(a) Shares issued and redeemed
Shares sold
Class A .............................. 318,537 17,293,489 245,047 75,384 103,213 2,074,954
Class B .............................. 27,800 8,279,799 228,272 67,858 130,076 417,009
Dividends reinvested
Class A .............................. 662,038 6,886,179 157,805 11,078 -- 656,941
Class B .............................. 186,083 628,339 63,438 11,246 -- 44,428
Shares redeemed
Class A .............................. (626,732) (17,849,311) (134,394) (18,684) (3,414) (2,602,956)
Class B .............................. (16,129) (5,871,179) (62,464) (25,103) -- (147,693)
------------ ------------- ------------ ----------- ----------- ------------
Net increase (decrease) ................ 551,597 9,367,316 497,704 121,779 229,875 442,683
============ ============ ============ ============ ============ ============
</TABLE>
*Period November 1, 1996 (inception) through March 31, 1997
SEE ACCOMPANYING NOTES.
- --------------------------------------------------------------------------------
29
<PAGE>
STATEMENTS OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
FOR THE YEAR ENDED SEPTEMBER 30, 1996
<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 (DECREASE) IN NET
ASSETS FROM OPERATIONS:
Net investment income (loss) ................. $1,481,389 $3,642,879 $(42,350) $84,407 $(439,871)
Net realized gain ............................ 6,097,347 54,909,397 2,667,735 252,773 7,865,014
Unrealized appreciation during the year ...... 5,572,992 59,008,440 1,091,782 49,605 2,292,201
------------ ------------- ------------ ----------- -----------
Net increase in net assets resulting
from operations .......................... 13,151,728 117,560,716 3,717,167 386,785 9,717,344
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income
Class A .................................... (1,303,374) (4,154,225) (357,503) (59,841) --
Class B .................................... (16,567) (64,778) (72,239) (50,821) --
Net realized gain
Class A .................................... (2,290,075) (33,371,334) (224,880) (30,468) (7,109,009)
Class B .................................... (44,993) (1,836,652) (77,719) (31,088) (500,515)
------------ ------------- ------------ ----------- -----------
Total distributions to shareholders ...... (3,655,009) (39,426,989) (732,341) (172,218) (7,609,524)
CAPITAL SHARE TRANSACTIONS (A):
Proceeds from sale of shares
Class A .................................... 3,975,290 299,520,899 5,778,490 682,087 27,602,365
Class B .................................... 1,200,271 93,534,094 2,179,465 1,119,612 3,050,423
Dividends reinvested
Class A .................................... 3,265,411 34,973,081 570,969 89,987 6,772,088
Class B .................................... 60,327 1,882,247 149,212 81,908 500,487
Shares redeemed
Class A ....................................(10,667,756) (273,412,317) (5,192,505) (337,484) (28,420,959)
Class B .................................... (369,561) (79,755,552) (1,236,321) (55,397) (6,164,145)
------------ ------------- ------------ ----------- -----------
Net increase (decrease)
from capital share
transactions ........................... (2,536,018) 76,742,452 2,249,310 1,580,713 3,340,259
------------ ------------- ------------ ----------- -----------
Total increase in net assets .......... 6,960,701 154,876,179 5,234,136 1,795,280 5,448,079
NET ASSETS:
Beginning of year .......................... 68,559,593 459,626,497 21,694,376 3,434,892 71,480,356
------------ ------------- ------------ ----------- -----------
End of year ................................$75,520,294 $614,502,676 $26,928,512 $5,230,172 $76,928,435
Undistributed net investment income
at end of year ............................. $182,698 $2,728,863 $671,849 $112,622 $--
============ ============ ============ ============ ============
(a) Shares issued and redeemed
Shares sold
Class A .............................. 474,232 43,657,565 491,586 63,688 3,632,551
Class B .............................. 143,440 13,771,902 186,645 104,927 412,321
Dividends reinvested
Class A .............................. 404,486 5,483,525 52,399 8,801 996,776
Class B .............................. 7,601 300,151 13,842 8,014 75,103
Shares redeemed
Class A .............................. (1,281,262) (39,986,054) (447,772) (31,916) (3,688,397)
Class B .............................. (43,575) (11,797,000) (107,952) (5,145) (820,769)
------------ ------------- ------------ ----------- -----------
Net increase (decrease) ............ (295,078) 11,430,089 188,748 148,369 607,585
============ ============ ============ ============ ============
</TABLE>
SEE ACCOMPANYING NOTES.
- --------------------------------------------------------------------------------
30
<PAGE>
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
SELECTED DATA FOR EACH SHARE OF CAPITAL STOCK
OUTSTANDING THROUGHOUT EACH PERIOD
SECURITY GROWTH AND INCOME FUND (CLASS A)(b)
<TABLE>
<CAPTION>
FISCAL PERIOD ENDED SEPTEMBER 30
--------------------------------------------------------------------------------
1997(g)(i) 1996(g) 1995(g) 1994(c) 1993 1992
---------- ---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
PER SHARE DATA
Net Asset Value Beginning of Period ....... $9.05 $7.93 $6.96 $7.84 $7.13 $7.31
INCOME FROM INVESTMENT OPERATIONS:
Net Investment Income ..................... 0.082 0.18 0.16 0.13 0.21 0.35
Net Gain (Loss) on Securities
(realized & unrealized) ................. 0.188 1.373 1.183 (0.713) 0.876 (0.016)
---------- ---------- ---------- ---------- ---------- ----------
Total from Investment Operations .......... 0.270 1.553 1.343 (0.583) 1.086 0.334
LESS DISTRIBUTIONS
Dividends (from Net Investment Income) .... (0.072) (0.158) (0.158) (0.128) (0.218) (0.343)
Distributions (from Capital Gains) ........ (0.708) (0.275) (0.215) (0.169) (0.158) (0.171)
---------- ---------- ---------- ---------- ---------- ----------
Total Distributions ..................... (0.780) (0.433) (0.373) (0.297) (0.376) (0.514)
---------- ---------- ---------- ---------- ---------- ----------
NET ASSET VALUE END OF PERIOD ............. $8.54 $9.05 $7.93 $6.96 $7.84 $7.13
========== ========== ========== ========== ========== ==========
TOTAL RETURN (a) .......................... 2.89% 20.31% 20.25% (7.6%) 15.6% 4.7%
RATIOS/SUPPLEMENTAL DATA
Net Assets End of Period (thousands) ...... $72,150 $73,273 $67,430 $65,328 $81,982 $75,436
Ratio of Expenses to Average Net Assets ... 1.26% 1.29% 1.31% 1.28% 1.26% 1.27%
Ratio of Net Income (Loss) to Average
Net Assets .............................. 1.83% 2.09% 2.21% 1.70% 2.80% 4.79%
Portfolio Turnover Rate ................... 99% 69% 130% 163% 135% 74%
Average Commission Paid Per
Equity Shares Traded .................... $0.0580 $0.0625 -- -- -- --
</TABLE>
SECURITY GROWTH AND INCOME FUND (CLASS B)
<TABLE>
<CAPTION>
FISCAL PERIOD ENDED SEPTEMBER 30
----------------------------------------------------
1997(g)(i) 1996(g) 1995(g) 1994(c)
---------- ---------- ---------- ----------
PER SHARE DATA
<S> <C> <C> <C> <C>
NET ASSET VALUE BEGINNING OF PERIOD ....... $8.94 $7.85 $6.90 $7.83
INCOME FROM INVESTMENT OPERATIONS:
Net Investment Income ..................... 0.032 0.09 0.08 0.05
Net Gain (Loss) on Securities
(realized & unrealized) ................... 0.188 1.353 1.179 (0.694)
---------- ---------- ---------- ----------
Total from Investment Operations ........ 0.220 1.443 1.259 (0.644)
LESS DISTRIBUTIONS
Dividends (from Net Investment Income) .... (0.032) (0.078) (0.094) (0.117)
Distributions (from Capital Gains) ........ (0.708) (0.275) (0.215) (0.169)
---------- ---------- ---------- ----------
Total Distributions ..................... (0.740) (0.353) (0.309) (0.286)
---------- ---------- ---------- ----------
NET ASSET VALUE END OF PERIOD ............. $8.42 $8.94 $7.85 $6.90
========== ========== ========== ==========
TOTAL RETURN (a) .......................... 2.35% 19.01% 19.07% (8.0%)
RATIOS/SUPPLEMENTAL DATA
Net Assets End of Period (thousands) ...... $3,781 $2,247 $1,130 $668
Ratio of Expenses to Average Net Assets ... 2.26% 2.29% 2.31% 2.27%
Ratio of Net Income (Loss) to Average
Net Assets .............................. 0.85% 1.09% 1.21% 1.03%
Portfolio Turnover Rate ................... 99% 69% 130% 178%
Average Commission Paid Per Equity
Shares Traded ........................... $0.0580 $0.0625 -- --
</TABLE>
SEE ACCOMPANYING NOTES.
- --------------------------------------------------------------------------------
31
<PAGE>
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
SELECTED DATA FOR EACH SHARE OF CAPITAL STOCK
OUTSTANDING THROUGHOUT EACH PERIOD
SECURITY EQUITY SERIES (CLASS A)
<TABLE>
<CAPTION>
FISCAL PERIOD ENDED SEPTEMBER 30
--------------------------------------------------------------------------------
1997(g)(i) 1996(g) 1995(g) 1994(c) 1993 1992
---------- ---------- ---------- ---------- ---------- ----------
PER SHARE DATA
<S> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE BEGINNING OF PERIOD ...... $7.54 $6.55 $5.54 $6.73 $5.86 $5.82
INCOME FROM INVESTMENT OPERATIONS:
Net Investment Income .................... 0.02 0.05 0.04 0.05 0.12 0.09
Net Gain (Loss) on Securities
(realized & unrealized) ................ 0.379 1.482 1.377 0.085 1.165 0.475
---------- ---------- ---------- ---------- ---------- ----------
Total from Investment Operations ......... 0.399 1.532 1.417 0.135 1.285 0.565
LESS DISTRIBUTIONS
Dividends (from Net Investment Income) ... (0.041) (0.060) -- (0.120) (0.053) (0.132)
Distributions (from Capital Gains) ....... (0.648) (0.482) (0.407) (1.205) (.362) (0.393)
---------- ---------- ---------- ---------- ---------- ----------
Total Distributions .................... (0.689) (0.542) (0.407) (1.325) (0.415) (0.525)
---------- ---------- ---------- ---------- ---------- ----------
NET ASSET VALUE END OF PERIOD ............ $7.25 $7.54 $6.55 $5.54 $6.73 $5.86
---------- ---------- ---------- ---------- ---------- ----------
TOTAL RETURN (a) ......................... 5.34% 24.90% 27.77% 1.95% 22.70% 10.20%
RATIOS/SUPPLEMENTAL DATA
Net Assets End of Period (thousands) ..... $600,067 $575,680 $440,339 $358,237 $375,565 $313,582
Ratio of Expenses to Average Net Assets .. 1.03% 1.04% 1.05% 1.06% 1.06% 1.06%
Ratio of Net Income (Loss) to Average
Net Assets ............................. 0.52% 0.75% 0.87% 0.86% 1.95% 1.48%
Portfolio Turnover Rate .................. 72% 64% 95% 79% 95% 83%
Average Commission Paid Per Equity
Shares Traded .......................... $0.0600 $0.0609 -- -- -- --
</TABLE>
SECURITY EQUITY SERIES (CLASS B)
<TABLE>
<CAPTION>
FISCAL PERIOD ENDED SEPTEMBER 30
----------------------------------------------------
1997(g)(i) 1996(g) 1995(g) 1994(c)
---------- ---------- ---------- ----------
PER SHARE DATA
<S> <C> <C> <C> <C>
NET ASSET VALUE BEGINNING OF PERIOD ...... $7.36 $6.43 $5.49 $6.81
INCOME FROM INVESTMENT OPERATIONS:
Net Investment Income (Loss) ............. (.02) (0.02) (0.01) 0.01
Net Gain (Loss) on Securities
(realized & unrealized) ................ 0.388 1.449 1.357 (0.005)
---------- ---------- ---------- ----------
Total from Investment Operations ......... 0.368 1.429 1.347 0.005
LESS DISTRIBUTIONS
Dividends (from Net Investment Income) ... -- (0.017) -- (0.12)
Distributions (from Capital Gains) ....... (0.648) (0.482) (0.407) (1.205)
---------- ---------- ---------- ----------
Total Distributions .................... (0.648) (0.499) (0.407) (1.325)
NET ASSET VALUE END OF PERIOD ............ $7.08 $7.36 $6.43 $5.49
========== ========== ========== ==========
TOTAL RETURN(a) .......................... 5.03% 23.57% 26.69% (0.15%)
RATIOS/SUPPLEMENTAL DATA
Net Assets End of Period (thousands) ..... $58,810 $38,822 $19,288 $7,452
Ratio of Expenses to Average Net Assets .. 2.04% 2.04% 2.05% 2.07%
Ratio of Net Income (Loss) to Average
Net Assets ............................. (0.47%) (0.13%) (0.01%)
Portfolio Turnover Rate .................. 72% 64% 95% 80%
Average Commission Paid Per Equity
Shares Traded .......................... $0.0600 $0.0609 -- --
</TABLE>
SEE ACCOMPANYING NOTES.
- --------------------------------------------------------------------------------
32
<PAGE>
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
SELECTED DATA FOR EACH SHARE OF CAPITAL STOCK
OUTSTANDING THROUGHOUT EACH PERIOD
SECURITY GLOBAL SERIES (CLASS A)
<TABLE>
<CAPTION>
FISCAL PERIOD ENDED SEPTEMBER 30
----------------------------------------------------
1997(i) 1996(g) 1995(g) 1994(c)
---------- ---------- ---------- ----------
PER SHARE DATA
<S> <C> <C> <C> <C>
NET ASSET VALUE BEGINNING OF PERIOD ...... $12.42 $10.94 $10.84 $10.00
INCOME FROM INVESTMENT OPERATIONS:
Net Investment Income (Loss) ............. (0.03) 0.01 (0.02) (0.03)
Net Gain (Loss) on Securities
(realized & unrealized) ................ 0.669 1.874 0.31 0.87
---------- ---------- ---------- ----------
Total from Investment Operations ......... 0.639 1.884 0.29 0.84
LESS DISTRIBUTIONS
Dividends (from Net Investment Income) ... (0.376) (0.248) -- --
Distributions (from Capital Gains) ....... (0.783) (0.156) (0.19) --
---------- ---------- ---------- ----------
Total Distributions .................... (1.159) (0.404) (0.19) --
---------- ---------- ---------- ----------
NET ASSET VALUE END OF PERIOD ............ $11.90 $12.42 $10.94 $10.84
========== ========== ========== ==========
TOTAL RETURN (a) ......................... 5.50% 17.73% 2.80% 8.40%
RATIOS/SUPPLEMENTAL DATA
Net Assets End of Period (thousands) ..... $22,018 $19,644 $16,261 $20,128
Ratio of Expenses to Average Net Assets .. 2.00% 2.00% 2.00% 2.00%
Ratio of Net Income (Loss) to Average
Net Assets ............................. (0.21%) 0.07% (0.17%) (0.01%)
Portfolio Turnover Rate .................. 138% 142% 141% 73%
Average Commission Paid Per Equity
Shares Traded .......................... $0.0116 $0.0338 -- --
SECURITY GLOBAL SERIES (CLASS B)
FISCAL PERIOD ENDED SEPTEMBER 30
----------------------------------------------------
1997(i) 1996(g) 1995(g) 1994(c)
---------- ---------- ---------- ----------
PER SHARE DATA
NET ASSET VALUE BEGINNING OF PERIOD ...... $12.18 $10.74 $10.75 $9.96
INCOME FROM INVESTMENT OPERATIONS:
Net Investment Income (Loss) ............. (0.07) (0.10) (0.12) (0.12)
Net Gain (Loss) on Securities
(realized & unrealized) ................ 0.637 1.841 0.30 0.91
---------- ---------- ---------- ----------
Total from Investment Operations ......... 0.567 1.741 0.18 0.79
LESS DISTRIBUTIONS
Dividends (from Net Investment Income) ... (0.304) (0.145) -- --
Distributions (from Capital Gains) ....... (0.783) (0.156) (0.19) --
---------- ---------- ---------- ----------
Total Distributions ...................... (1.087) (0.301) (0.19) --
---------- ---------- ---------- ----------
NET ASSET VALUE END OF PERIOD ............ $11.66 $12.18 $10.74 $10.75
========== ========== ========== ==========
TOTAL RETURN (a) ......................... 4.97% 16.57% 1.79% 7.90%
RATIOS/SUPPLEMENTAL DATA
Net Assets End of Period (thousands) ..... $9,647 $7,285 $5,433 $3,960
Ratio of Expenses to Average Net Assets .. 3.00% 3.00% 3.00% 3.00%
Ratio of Net Income (Loss) to Average
Net Assets ............................. (0.56%) (0.93%) (1.17%) (0.01%)
Portfolio Turnover Rate .................. 138% 142% 141% 73%
Average Commission Paid Per Equity
Shares Traded .......................... $0.0116 $0.0338 -- --
</TABLE>
SEE ACCOMPANYING NOTES.
- --------------------------------------------------------------------------------
33
<PAGE>
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
SELECTED DATA FOR EACH SHARE OF CAPITAL STOCK
OUTSTANDING THROUGHOUT EACH PERIOD
SECURITY ASSET ALLOCATION SERIES (CLASS A)
FISCAL PERIOD ENDED SEPTEMBER 30
--------------------------------------
1995
1997(g)(i) 1996(g) (e)(f)(g)
---------- ---------- ----------
PER SHARE DATA
NET ASSET VALUE BEGINNING OF PERIOD ..... $11.06 $10.54 $10.00
INCOME FROM INVESTMENT OPERATIONS:
Net Investment Income (Loss) ............ 0.08 0.25 0.04
Net Gain (Loss) on Securities
(realized & unrealized) ............... 0.562 0.765 0.50
---------- ---------- ----------
Total from Investment Operations ........ 0.642 1.015 0.54
LESS DISTRIBUTIONS
Dividends (from Net Investment Income) .. (0.26) (0.328) --
Distributions (from Capital Gains) ...... (0.252) (0.167) --
---------- ---------- ----------
Total Distributions ................... (0.512) (0.495) --
---------- ---------- ----------
NET ASSET VALUE END OF PERIOD ........... $11.19 $11.06 $10.54
========== ========== ==========
TOTAL RETURN (a) ........................ 5.86% 10.01% 5.40%
RATIOS/SUPPLEMENTAL DATA
Net Assets End of Period (thousands) .... $3,235 $2,449 $1,906
Ratio of Expenses to Average Net Assets . 1.38% 2.00% 2.00%
Ratio of Net Income (Loss) to Average
Net Assets ............................ 1.22% 2.32% 1.33%
Portfolio Turnover Rate ................. 45% 75% 129%
Average Commission Paid Per Equity
Shares Traded ......................... $0.0346 $0.0247 --
SECURITY ASSET ALLOCATION SERIES (CLASS B)
FISCAL PERIOD ENDED SEPTEMBER 30
--------------------------------------
1995
1997(g)(i) 1996(g) (e)(f)(g)
---------- ---------- ----------
PER SHARE DATA
NET ASSET VALUE BEGINNING OF PERIOD ..... $10.97 $10.50 $10.00
INCOME FROM INVESTMENT OPERATIONS:
Net Investment Income (Loss) ............ 0.03 0.14 0.01
Net Gain (Loss) on Securities
(realized & unrealized) ............... 0.553 0.77 0.49
---------- ---------- ----------
Total from Investment Operations ........ 0.583 0.91 0.50
LESS DISTRIBUTIONS
Dividends (from Net Investment Income) .. (0.181) (0.273) --
Distributions (from Capital Gains) ...... (0.252) (0.167) --
---------- ---------- ----------
Total Distributions ................... (0.433) (0.440) --
NET ASSET VALUE END OF PERIOD ........... $11.12 $10.97 $10.50
========== ========== ==========
TOTAL RETURN (a) ........................ 5.35% 8.97% 5.00%
RATIOS/SUPPLEMENTAL DATA
Net Assets End of Period (thousands) .... $3,417 $2,781 $1,529
Ratio of Expenses to Average Net Assets . 2.18% 3.00% 3.00%
Ratio of Net Income (Loss) to Average
Net Assets ............................ 0.43% 1.32% 0.31%
Portfolio Turnover Rate ................. 45% 75% 129%
Average Commission Paid Per Equity
Shares Traded ......................... $0.0346 $0.0247 --
SEE ACCOMPANYING NOTES.
- --------------------------------------------------------------------------------
34
<PAGE>
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
SELECTED DATA FOR EACH SHARE OF CAPITAL STOCK
OUTSTANDING THROUGHOUT EACH PERIOD
SECURITY SOCIAL AWARENESS SERIES (CLASS A)
FISCAL PERIOD ENDED SEPTEMBER 30
--------------------------------
1997(g)(h)(i)
-------------
PER SHARE DATA
NET ASSET VALUE BEGINNING OF PERIOD .......... $15.00
INCOME FROM INVESTMENT OPERATIONS:
Net Investment Income (Loss) ................. (0.002)
Net Gain (Loss) on Securities
(realized & unrealized) .................... (0.658)
----------
Total from Investment Operations ............. (0.660)
LESS DISTRIBUTIONS
Dividends (from Net Investment Income) ....... --
Distributions (from Capital Gains) ........... --
----------
Total Distributions ........................ --
NET ASSET VALUE END OF PERIOD ................ $14.34
==========
TOTAL RETURN (a) ............................. (4.40%)
RATIOS/SUPPLEMENTAL DATA
Net Assets End of Period (thousands) ......... $1,431
Ratio of Expenses to Average Net Assets ...... 1.42%
Ratio of Net Income (Loss) to Average
Net Assets ................................. (0.04%)
Portfolio Turnover Rate ...................... 22%
Average Commission Paid Per Equity
Shares Traded .............................. $0.0600
SECURITY SOCIAL AWARENESS SERIES (CLASS B)
FISCAL PERIOD ENDED SEPTEMBER 30
--------------------------------
1997(g)(h)(i)
-------------
PER SHARE DATA
NET ASSET VALUE BEGINNING OF PERIOD .......... $15.00
INCOME FROM INVESTMENT OPERATIONS:
Net Investment Income (Loss) ................. (0.046)
Net Gain (Loss) on Securities
(realized & unrealized) .................... (0.664)
----------
Total from Investment Operations ............. (0.710)
LESS DISTRIBUTIONS
Dividends (from Net Investment Income) ....... --
Distributions (from Capital Gains) ........... --
----------
Total Distributions ........................ --
NET ASSET VALUE END OF PERIOD ................ $14.29
==========
TOTAL RETURN (a) ............................. (4.73%)
RATIOS/SUPPLEMENTAL DATA
Net Assets End of Period (thousands) ......... $1,858
Ratio of Expenses to Average Net Assets ...... 2.17%
Ratio of Net Income (Loss) to Average
Net Assets ................................. (0.79%)
Portfolio Turnover Rate ...................... 22%
Average Commission Paid Per Equity
Shares Traded .............................. $0.0600
SEE ACCOMPANYING NOTES.
- --------------------------------------------------------------------------------
35
<PAGE>
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
SELECTED DATA FOR EACH SHARE OF CAPITAL STOCK
OUTSTANDING THROUGHOUT EACH PERIOD
SECURITY ULTRA FUND (CLASS A)
<TABLE>
<CAPTION>
FISCAL PERIOD ENDED SEPTEMBER 30
--------------------------------------------------------------------------------
1997(g)(i) 1996(g) 1995(g) 1994(c) 1993 1992
---------- ---------- ---------- ---------- ---------- ----------
PER SHARE DATA
<S> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE BEGINNING OF PERIOD .......... $8.25 $8.20 $6.82 $8.13 $6.66 $6.72
INCOME FROM INVESTMENT OPERATIONS:
Net Investment Income (Loss) ................. (0.05) (0.05) (0.02) (0.056) (0.028) (0.09)
Net Gain (Loss) on Securities
(realized & unrealized) .................... (0.601) 1.096 1.535 (0.188) 1.791 0.202
---------- ---------- ---------- ---------- ---------- ----------
Total from Investment Operations ............. (0.651) 1.046 1.515 (0.244) 1.763 0.112
LESS DISTRIBUTIONS
Dividends (from Net Investment Income) ....... -- -- -- -- -- --
Distributions (from Capital Gains) ........... (0.579) (0.996) (0.135) (1.066) (0.293) (0.172)
---------- ---------- ---------- ---------- ---------- ----------
Total Distributions ........................ (0.579) (0.996) (0.135) (1.066) (0.293) (0.172)
---------- ---------- ---------- ---------- ---------- ----------
NET ASSET VALUE END OF PERIOD ................ $7.02 $8.25 $8.20 $6.82 $8.13 $6.66
========== ========== ========== ========== ========== ==========
TOTAL RETURN (a) ............................. (8.40%) 15.36% 22.69% (3.6%) 26.80% 1.50%
RATIOS/SUPPLEMENTAL DATA
Net Assets End of Period (thousands) ......... $64,007 $74,230 $66,052 $60,695 $71,056 $57,128
Ratio of Expenses to Average Net Assets ...... 1.26% 1.31% 1.32% 1.33% 1.30% 1.32%
Ratio of Net Income (Loss) to Average
Net Assets ................................. (.59%) (.61%) (.31%) (.80%) (.50%) (.46%)
Portfolio Turnover Rate ...................... 75% 161% 180% 111% 101% 142%
Average Commission Paid Per Equity
Shares Traded .............................. $0.0600 $0.0606 -- -- -- --
</TABLE>
SECURITY ULTRA FUND (CLASS B)
<TABLE>
<CAPTION>
FISCAL PERIOD ENDED SEPTEMBER 30
----------------------------------------------------
1997(g)(i) 1996(g) 1995(g) 1994(c)
---------- ---------- ---------- ----------
PER SHARE DATA
<S> <C> <C> <C> <C>
NET ASSET VALUE BEGINNING OF PERIOD ...... $8.03 $8.11 $6.81 $8.30
INCOME FROM INVESTMENT OPERATIONS:
Net Investment Income (Loss) ............. (0.12) (0.13) (0.09) (0.103)
Net Gain (Loss) on Securities
(realized & unrealized) ................ (0.541) 1.046 1.525 (0.321)
---------- ---------- ---------- ----------
Total from Investment Operations ......... (0.661) 0.916 1.435 (0.424)
LESS DISTRIBUTIONS
Dividends (from Net Investment Income) ... -- -- -- --
Distributions (from Capital Gains) ....... (0.579) (0.996) (0.135) (1.066)
---------- ---------- ---------- ----------
Total Distributions .................... (0.579) (0.996) (0.135) (1.066)
---------- ---------- ---------- ----------
NET ASSET VALUE END OF PERIOD ............ $6.79 $8.03 $8.11 $6.81
========== ========== ========== ==========
TOTAL RETURN (a) ......................... (8.77%) 13.81% 21.53% (5.70%)
RATIOS/SUPPLEMENTAL DATA
Net Assets End of Period (thousands) ..... $4,415 $2,698 $5,428 $1,254
Ratio of Expenses to Average Net Assets .. (2.25%) 2.31% 2.32% 2.36%
Ratio of Net Income (Loss) to Average
Net Assets ............................. (1.56%) (1.61%) (1.32%) (1.76%)
Portfolio Turnover Rate .................. 75% 161% 180% 110%
Average Commission Paid Per Equity
Shares Traded .......................... $0.0600 $0.0606 -- --
</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.
(c) 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.
(d) 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.
(e) 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.
(f) Fund expenses were reduced by the Investment Manager during the period and
expense ratios absent such reimbursement would have been as follows:
1995 1996 1997
---- ---- ----
Asset Allocation Series Class A 3.6% 3.1% 2.0%
Class B 4.7% 3.9% 2.8%
(g) Net investment income (loss) was computed using average shares outstanding
throughout the period.
(h) Security Social Awareness Series was initially capitalized on November 1,
1996, with a net asset value of $15 per share. Percentage amounts for the
period, except for total return, have been annualized.
(i) Unaudited figures for the six months ended March 31, 1997. Percentage
amounts for the period, except total return, have been annualized.
SEE ACCOMPANYING NOTES.
- --------------------------------------------------------------------------------
36
<PAGE>
NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
MARCH 31, 1997
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 four Series, the Equity Series, the Global Series, the Asset
Allocation Series and the Social Awareness 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
pricing services 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 which 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 and Ultra Fund utilize 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 and Ultra Fund may
purchase futures contracts to immediately position incoming cash in the market,
thereby simulating a fully invested position in the underlying index while
maintaining a cash balance for liquidity. In the event of redemptions, the Asset
Allocation Series and Ultra Fund may pay departing shareholders from its cash
balances and reduce their futures positions accordingly. Returns may be enhanced
by purchasing futures contracts instead of the underlying securities when
futures are believed to be priced more attractively than the underlying
securities. The primary risks associated with the use of futures contracts are
imperfect correlation between changes in market values of stocks contained in
the indexes and the prices of futures contracts, and the possibility of an
illiquid market. Futures contracts are valued based upon their quoted daily
settlement
- --------------------------------------------------------------------------------
37
<PAGE>
NOTES TO FINANCIAL STATEMENTS (continued)
- --------------------------------------------------------------------------------
prices. Upon entering into a futures contract, the Funds are required to deposit
either cash or securities, representing the initial margin, equal to the
contract value. Subsequent changes in the value of the contract, or variation
margin, are recorded as unrealized gains or losses. The variation margin is paid
or received in cash daily by the Funds. The Funds realize a gain or loss when
the contract is closed or expires. There were no futures contracts held by the
Funds at March 31, 1997.
E. SECURITY TRANSACTIONS AND INVESTMENT INCOME - Security transactions are
accounted for on the date the securities are purchased or sold. Realized gains
and losses are reported on an identified cost basis. Dividend income less
foreign taxes withheld (if any) plus foreign taxes recoverable (if any) are
recorded on the ex-dividend date. Interest income is recognized on the accrual
basis. Premium and discounts (except original issue discounts) on debt
securities are not amortized.
F. DISTRIBUTIONS TO SHAREHOLDERS - Distributions to shareholders are
recorded on the ex-dividend date. The character of distributions made during the
year from net investment income or net realized gains may differ from their
ultimate characterization for federal income tax purposes. These differences are
primarily due to differing treatments relating to the expiration of net
operating losses and the recharacterization of foreign currency gains and
losses.
G. TAXES - The Funds complied with the requirements of the Internal Revenue
Code applicable to regulated investment companies and distributed all of their
taxable net income and net realized gains sufficient to relieve them from all,
or substantially all, federal income, excise and state income taxes. Therefore,
no provision for federal or state income tax is required.
2. MANAGEMENT FEES AND OTHER TRANSACTIONS WITH AFFILIATES
Under terms of the investment advisory contract, Security Management
Company, LLC (SMC) agrees to provide, or arrange for others to provide, all the
services required by the Funds for a single fee (except for the Asset Allocation
Series and Social Awareness 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 assets of the Fund for the fiscal year. For Global Series
this fee is equal to 2% of the first $70 million of the average daily closing
value of the Series' net assets and 1 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, extraordinary items and Class B distribution fees. SMC
also serves as Investment Advisor to the Asset Allocation and Social Awareness
Series, and accordingly receives a fee equal to 1% of the average net assets of
each Series.
SMC also acts as the administrative agent and transfer agent for the Asset
Allocation and the Social Awareness Series, and as such performs administrative
functions, transfer agency and dividend disbursing services, and the
bookkeeping, accounting and pricing functions for each Series. For these
services, the Investment Manager receives an administrative fee equal to .045%
of the average daily net assets of each Series plus, for Asset Allocation
Series, the greater of .10% of its average net assets or (i) $45,000 in the year
ending June 1, 1997; and (ii) $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 and Social Awareness Series to 2% of the
average net assets, excluding 12b-1 fees.
SMC has agreed to waive their portion of management fees for the Asset
Allocation Series and the Social Awareness Series until December 31, 1997. For
the Asset Allocation Series, Meridian Management Corporation has also agreed to
waive their portion of the management fees until December 31, 1997.
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. The
Plans 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 on
sales of Class A shares and contingent deferred sales charges on redemptions
occurring within 5 years of the date of purchase of Class B shares after
allowances to brokers and dealers in the amounts presented in the following
table:
SDI BROKER/ BROKER/
UNDERWRITING CDSC DEALER DEALER
(CLASS A) (CLASS B) (CLASS A) (CLASS B)
------------ --------- --------- ---------
Growth & Income Fund $2,708 $220 $35,682 $57,184
Equity Series 21,344 31,015 778,593 1,211,263
Global Series 918 6,351 14,668 25,244
Asset Allocation Series 954 38 11,701 33,584
Social Awareness Series 1,572 0 15,230 0
Ultra Fund 3,014 12,153 18,346 19,368
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.
- --------------------------------------------------------------------------------
38
<PAGE>
NOTES TO FINANCIAL STATEMENTS (continued)
- --------------------------------------------------------------------------------
3. FEDERAL INCOME TAX MATTERS
For federal income tax purposes, the amounts of unrealized appreciation
(depreciation) at March 31, 1997, were as follows:
NET
GROSS GROSS UNREALIZED
UNREALIZED UNREALIZED APPRECIATION
APPRECIATION DEPRECIATION (DEPRECIATION)
------------ ------------ --------------
Growth & Income Fund $12,013,181 $(1,523,417) $10,489,765
Equity Series 175,934,764 (8,224,400) 167,710,364
Global Series 3,048,536 (778,187) 2,270,349
Asset Allocation Series 305,787 (270,973) 34,814
Social Awareness Series 61,278 (144,752) (83,474)
Ultra Fund 10,420,907 (2,990,975) 7,429,932
4. INVESTMENT TRANSACTIONS
Investment transactions for the six months ended March 31, 1997, (excluding
overnight investments and short-term commercial paper) are as follows:
PROCEEDS
PURCHASES FROM SALES
------------ ------------
Growth & Income Fund $37,808,470 $36,489,287
Equity Series 247,865,999 226,018,040
Global Series 23,135,579 18,673,086
Asset Allocation Series 2,419,092 2,997,769
Social Awareness Series 3,657,053 525,290
Ultra Fund 25,677,940 33,883,430
5. FORWARD FOREIGN EXCHANGE CONTRACTS
At March 31, 1997, 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 LOSS
-------- ---------- -------- -------- ------- ----------
New Zealand
Dollar 4-1-97 771,335 0.6859 0.6950 $(7,109)
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39
<PAGE>
THE SECURITY GROUP OF MUTUAL FUNDS
SECURITY GROWTH AND INCOME FUND
SECURITY EQUITY FUND
* EQUITY SERIES
* GLOBAL SERIES
* ASSET ALLOCATION SERIES
* SOCIAL AWARENESS SERIES
SECURITY ULTRA FUND
SECURITY INCOME FUND
* CORPORATE BOND SERIES
* U.S. GOVERNMENT SERIES
* LIMITED MATURITY BOND SERIES
* GLOBAL AGGRESSIVE BOND SERIES
* HIGH YIELD 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
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. Harwood, Assistant Treasurer and Assistant Secretary
[SDI LOGO]
SECURITY DISTRIBUTORS, INC. BULK RATE
700 SW HARRISON ST. U.S. POSTAGE PAID
TOPEKA, KS 66636-0001 TOPEKA, KS
(913) 295-3127 PERMIT NO. 385
(800) 888-2461
SDI 604 46-06045-00
