SECURITY
FUNDS
SEMI-ANNUAL
REPORT
MARCH 31, 1998
o Security
Growth and
Income Fund
o Security Equity
Fund
-Equity Series
-Global Series
-Asset
Allocation
Series
-Social
Awareness
Series
-Value
Series
-Small
Company
Series
o Security Ultra
Fund
[LOGO] Security Distributors, Inc.
<PAGE>
PRESIDENT'S COMMENTARY
May 15, 1998
To Our Shareholders:
The financial markets continued to reward investors over the last six months.
After a short-lived correction last fall, the markets began 1998 with another
rally led once again by the larger companies. This rally produced returns for
the six months ended March 31, 1998 of 17.22% for the S&P 500 Index and 11.74%
for the Dow Jones Industrial Average.
AMAZING EQUITY MARKET PERFORMANCE
The equity markets continue to defy the expectations of most forecasters, who
believed that the turmoil in southeast Asia would produce a dramatic decline in
global economic growth. This slowdown was expected to produce negative earnings
surprises which would be sufficient to dampen market sentiment. However, these
potential negatives have simply been overwhelmed by the great supply of new
investment money pouring into the markets month after month in 1998. A large
part of these cash flows is coming from a new generation of investors who are
using 401(k), 403(b), and other types of long-term investment instruments
centered around a portfolio of common stocks to maximize retirement savings.
CASH FLOWS INTO EQUITY MARKETS SHOULD
CONTINUE
We believe that these money flows, absent some unforeseen shock to change
investor psychology, are likely to continue. Although we expect a slowdown in
earnings growth due to a moderating economy, we believe that cash flows will be
sufficient to offset this negative influence on the markets. We would caution,
however, that increased volatility is to be expected and a short-lived
correction in the markets of as much as 10% to 15% could occur at any time. The
long-term fundamentals continue to be enormously positive for owners of
financial assets, and in our view, short-term volatility should be ignored by
investors who hold a long-term optimistic outlook.
ADDITIONS TO OUR PORTFOLIO MANAGEMENT TEAM
Since my last writing in the annual report, Security Management Company, LLC has
made some major additions to our investment management team. Security Growth and
Income Fund is now managed by Michael Petersen, Senior Portfolio Manager. Mike
joined the Security family in November 1997, bringing with him ten years of
experience in managing a growth and income fund for another organization. Jim
Schier, Portfolio Manager for the Value Series, is also taking on responsibility
for the Security Ultra Fund portfolio. We have added a new Small Company Series
which will be subadvised for us by Strong Capital Management, Inc., with Ron
Ognar of that organization acting as lead portfolio manager.
In the pages that follow, our portfolio managers discuss their performance as
well as the current structure of the portfolios and their outlook for the months
ahead. As always, we appreciate your continuing investments in Security
products. We invite your questions and comments at any time.
John Cleland, President
The Security Funds
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<PAGE>
MANAGER'S COMMENTARY
SECURITY GROWTH AND INCOME FUND
May 15, 1998
To Our Shareholders:
The Growth and Income Fund returned 8.55% in the first six months of the fiscal
year, underperforming its Lipper peer group's average return of 12.49% primarily
because of its orientation toward small-cap and midcap stocks, which returned
less than their large-cap counterparts.1 We began restructuring the portfolio
toward the larger-cap growth and value names at the beginning of 1998. Because
of the lower returns year to date in the small-cap markets and the high
valuations in the large-cap issues, this must be a slow and careful process.
OVERALL RESTRUCTURING STRATEGY
Our general strategy is to realign the sector weightings in the Fund to more
closely resemble those of other growth and income funds. This includes
overweighting income-oriented sectors such as energy and utilities while
underweighting the pure growth areas like health care and technology. The focus
is primarily to have a value orientation, concentrating on stocks with earnings
per share potential better than that of the overall S&P 500 average. For
example, the paper industry is currently undervalued because of a perceived lack
of pricing power. This situation is beginning to turn around, and analysts
expect 10% to 20% earnings growth in the industry this calendar year.
Additionally, we will target a portfolio yield which is about 50% above that of
the S&P 500--our target now is a 2.5% yield versus the S&P's 1.6%.
FAVORED INDUSTRIES
We currently overweight the energy industry, including such integrated oil
companies as Phillips Petroleum Company, Amoco Corporation, and Kerr McGee
Corporation. This strategy is based on expectations that oil prices will move up
more on a percentage basis than the overall Consumer Price Index or Producer
Price Index.
The utility sector is another area of emphasis. We have added electric and
natural gas utilities to the portfolio including Consolidated Natural Gas
Company, American Electric Power Company, Inc., and Texas Utilities Company.
While earnings growth is expected to slow in many S&P 500 companies, these
utilities are predicted to show better-than-average earnings increases.
Additionally, their valuations are presently more attractive than those in many
other sectors.
Within the broad capital goods category, waste management companies have been
out of favor for a very long time. Because of this disfavor, they now display
attractive valuations. We believe that ongoing consolidation in the industry
should lead to better pricing potential, which will in turn strengthen profits.
Companies in this category include Browning Ferris, perceived as a likely merger
candidate, and Waste Management, which has benefited from its purchase by USA
Waste which should close by the end of this
2
<PAGE>
MANAGER'S COMMENTARY (continued)
SECURITY GROWTH AND INCOME FUND
May 15, 1998
calendar year. Waste Management's stock has risen nearly 40% from its pre-buyout
level.
SUMMARY OF PLANS FOR THE NEXT SIX MONTHS
The overall strategy in the portfolio restructuring is to keep the risk--the
pattern of volatility in returns over time--lower than that of competing funds.
We hope to compile a portfolio of stocks which will generate higher earnings
than those of the average growth and income fund. We plan to increase the
large-cap holdings to be about half of the total assets. We also will strive to
reduce risk by diversifying the portfolio, increasing the number of holdings
from sixty at the beginning of this fiscal year to about 105 names. We plan to
maintain a bond position of about 10% of total portfolio assets, emphasizing
corporate bonds yielding about 8% to 9%.
Michael A. Petersen
Portfolio Manager
(1) Performance figures are based on Class A shares and do not reflect deduction
of the sales charge.
--PERFORMANCE--
TOP 5 HOLDINGS**
% of
net assets
----------
Equitable Resources, Inc. 2.8%
AlliedSignal, Inc. 2.0%
Wells Fargo & Company 1.9%
Texaco, Inc. 1.7%
St. Paul Companies, Inc. 1.7%
**At March 31, 1998
AVERAGE ANNUAL RETURNS
As of March 31, 1998
1 year 5 years 10 years
------ ------- --------
A Shares 42.7% 15.7% 13.0%
A Shares with sales charge 34.6% 14.3% 12.3%
B Shares 41.3% 15.3% N/A
(10-19-93)
(since inception)
B Shares with CDSC 36.3% 14.9% 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.
3
<PAGE>
MANAGER'S COMMENTARY
SECURITY EQUITY FUND - EQUITY SERIES
May 15, 1998
To Our Shareholders:
The stock market turned in very different performances in the fourth quarter of
1997 and the first quarter of 1998. The benchmark S&P 500 Stock Index returned a
meager 2.87% in the last three months of last year, but regained momentum and
climbed 13.95% in the first quarter this year. The Equity Series mirrored this
diverse performance, but overall fared very well as it rose 17.32% for the first
half of the fiscal year, comparing favorably with its Lipper peer group average
of 11.55%.(1)
CONSISTENT EARNERS PROVIDE FAVORABLE RETURNS
The portfolio continues to perform well due to our concentration on high quality
companies with consistent earnings growth records. Because we expect an earnings
slowdown in coming months as a result of the weak Asian economies, we have no
plans to shift away from this strategy at this time. In an environment of
slowing earnings those corporations which have proven their ability to generate
consistent earnings are likely to continue doing so. Among the steady growers
are companies in the consumer nondurables sector including health care giants
Schering Plough Corporation, SmithKline Beecham PLC ADR, and American Home
Products Corporation. Over the past six months Schering rose nearly 60%, and the
other two were each up close to 30%. Other consumer nondurables which have
continued to perform well are Colgate-Palmolive Company, Procter & Gamble
Company, and Gillette Company, all of which rose more than the S&P 500.
DECLINING INTEREST RATES BOOST FINANCIAL COMPANIES
The environment for stocks in the financial sector remained positive as interest
rates continued to decline. The insurance segment of the portfolio is
overweighted versus the corresponding segment in the S&P 500. Among our holdings
in this group are multiline insurors American International Group, Inc. and
Allstate Corporation. We also own Lincoln National Corporation, which sold its
property and casualty lines and now focuses on life and health insurance as well
as other financial services.
Also in the financial sector in the portfolio are stocks of banks whose primary
source of revenue is fee-based services. For example, Bank of New York Company,
Inc., derives a large portion of its income from processing services. They are
the largest servicer of American Depositary Receipts, and are continuing to
expand their other lines. Northern Trust Corporation remains a major player in
the fee-based trust services arena. We also own Federal National Mortgage
Association ("Fannie Mae") and Federal Home Loan Mortgage Corporation ("Freddie
Mac") stocks, both of which are benefiting from their mortgage businesses in a
low interest rate climate.
Although the portfolio has performed very well over the six months, there are
some areas that have hurt total return. Telephone issues outperformed general
market indexes late in 1997 when investors were frightened by the events in Asia
and sought out stocks in companies whose earnings were largely
4
<PAGE>
MANAGER'S COMMENTARY (continued)
SECURITY EQUITY FUND - EQUITY SERIES
May 15, 1998
domestically generated. Our low weighting in telephone stocks was harmful, as
this sector has a large weighting in the benchmark S&P 500 Index. We have been
adding names in this area in recent months, including WorldCom, Inc., LCI
International, and Lucent Technologies, Inc.
PLANS FOR THE COMING SIX MONTHS
Looking forward, we plan to stay with our practice of buying those companies
which display consistent earnings growth, and which have a low level of economic
sensitivity. We also prefer companies with little earnings exposure in Asia at
the present time. We presently hold about 95 different names in the portfolio,
and plan to increase that number to provide a measure of safety through
diversification. As the opportunity for earnings disappointments increases,
having smaller exposure in any one name reduces the impact of negative earnings
surprises.
Terry Milberger
Portfolio Manager
(1)Performance figures are based on Class A shares and do not reflect deduction
of the sales charge.
--PERFORMANCE--
TOP 5 HOLDINGS**
% of
net assets
----------
General Electric Company 1.8%
Tyco International, Ltd. 1.8%
Payless ShoeSource, Inc. 1.8%
Schering-Plough Corporation 1.7%
Microsoft Corporation 1.7%
**At March 31, 1998
AVERAGE ANNUAL RETURNS
As of March 31, 1998
1 year 5 years 10 years
------ ------- --------
A Shares 47.1% 21.5% 19.3%
A Shares with sales charge 38.7% 20.1% 18.6%
B Shares 45.4% 21.6% N/A
(10-19-93)
(since inception)
B Shares with CDSC 40.4% 21.3% 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.
5
<PAGE>
MANAGER'S COMMENTARY
SECURITY EQUITY FUND - GLOBAL SERIES
May 15, 1998
[LOGO] Subadvisor - LEXINGTON
MANAGEMENT CORPORATION
To Our Shareholders:
The Global Series of Security Equity Fund returned 5.63% for the six-month
period ended March 31, 1998, underperforming the Lipper peer group average of
7.79%.(1) The Series' underperformance occurred during the first half of the
period when a substantial underweighting in U.S. equities combined with sharp
falls in Asian markets to lead to weak returns. The second three months of the
fiscal period produced better results, primarily because of strong gains in
European equities. During this three-month period the Series increased 15.30%
versus the peer group's average 13.55%.
HOW THE MARKETS LOOK NOW
The current investment environment remains extremely favorable for both U.S. and
European equities. Low inflation has allowed interest rates to fall and remain
at low levels. Merger and acquisition activity in North America and Europe has
gained momentum. Strategic buyers believe size to be a competitive advantage in
the global marketplace. Low interest rates have made deals easier to finance.
Investors on both continents continue to pour money into equities due to
demographic needs to fund retirement.
A COMPARISON OF EUROPEAN AND U.S. MARKET OUTLOOKS
U.S. equities face several difficult hurdles, however. The strong dollar has
made U.S. products less competitive with the rest of the world. Due to Asian
devaluation and the consequent recessions there, the traded goods sector of the
U.S. economy will come under greater attack. Profit margins are already at very
high levels while wage pressures build due to low unemployment levels. Finally,
valuations look particularly excessive given the anemic profit outlook for most
U.S. companies.
The portfolio remains heavily overweighted toward European equities due to
several factors. Corporate restructuring in Europe is at a much earlier stage
than in the U.S., so profitability levels have room for substantial expansion.
Unlike the U.S. investors, individuals in Europe are only now discovering equity
investing. The flow of funds argument is much stronger in Europe as equities in
the region gain market share from other asset groups. Although valuation levels
are also high, European profits should grow at a much faster rate than U.S.
profits.
OTHER WORLD MARKETS
Japan continues to struggle as government policy remains inadequate to address
deep structural problems. The Japanese economy is currently in recession with
weakness throughout the rest of Asia intensifying Japanese problems. Stocks
there now look cheap on both a price-to-book value and a cash flow basis. Until
the government and corporations move toward a more shareholder-friendly system,
the economy and equities will continue to struggle. China is clearly taking a
leadership role in southeast Asia. Strong Chinese leadership is a bright spot in
the region and China appears unlikely to devalue its currency. Restructuring
within China is also creating exciting long-term opportunities.
In other emerging regions, Latin America is suffering from Asian fallout. Weak
commodity prices have pressured Latin economies and currencies, forcing
6
<PAGE>
MANAGER'S COMMENTARY (continued)
SECURITY EQUITY FUND - GLOBAL SERIES
May 15, 1998
interest rates higher while fiscal policy is tightened. Greece, with its entry
into the European monetary union, provides an early stage investment
opportunity. If the Greek government holds its resolve and privatizes industry
while controlling spending, Greek equities should shine.
PORTFOLIO PLANS FOR THE COMING PERIOD
The Global Series continues to emphasize European equities with a heavily
overweighted position. European stocks should provide strong profit growth due
to management refocus on shareholder value. Japanese equities currently
represent a small percentage of the portfolio, but could offer great
opportunities in the future if managements begin to restructure and focus on
profits and shareholder interests. Latin American equities are avoided due to a
weakening profit outlook and difficult macroeconomic conditions. Finally, Greek
equities may be added if the government continues to show its resolve in
fighting the unions. Interest rates are likely to fall sharply in Greece, and
equities are substantially cheaper than other European stocks.
Richard Saler
Portfolio Manager
Alan Wapnick
Portfolio Manager
(1)Performance figures are based on Class A shares and do not reflect deduction
of the sales charge.
Investing in foreign countries may involve risks, such as currency fluctuations
and political instability, not associated with investing exclusively in the U.S.
--PERFORMANCE--
TOP 5 HOLDINGS**
% of
net assets
----------
Imax Corporation ADR 2.4%
Whitbred PLC 1.9%
Elan Corporation PLC ADR 1.8%
Foster's Brewing Group, Ltd. 1.8%
Teva Pharmaceutical
Industries, Ltd. 1.7%
**At March 31, 1998
AVERAGE ANNUAL RETURNS
As of March 31, 1998
1 year Since Inception
------ ---------------
A Shares 20.4% 12.0%
(10-1-93)
A Shares with sales charge 13.4% 10.6%
(10-1-93)
B Shares 19.1% 11.2%
(10-19-93)
B Shares with CDSC 14.1% 10.7%
(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.
7
<PAGE>
MANAGER'S COMMENTARY
SECURITY EQUITY FUND - ASSET ALLOCATION SERIES
May 15, 1998
[LOGO] MERIDIAN
INVESTMENT
MANAGEMENT
Subadvisor: Meridian Investment Management Corporation
To Our Shareholders:
Global equity markets, after bouncing back from a rapid October decline, raced
to new highs as the first quarter of 1998 ended. Already this year many of these
markets have posted returns far in excess of annual norms. The favorable
investing environment has been fueled by solid economic growth and low
inflation. The Asset Allocation Series was up 10.52% in the first quarter of
this year following a weak fourth quarter of 1997, posting a 3.63% total return
for the six month period ended March 31, 1998.1 The Lipper peer group average
rose 8.72% in the 1998 first quarter and 5.39% over the six months.
FOREIGN MARKETS HAVE BECOME STRONG PERFORMERS
The U.S. stock market's well-publicized advance has been overshadowed by the
performance of many foreign markets. Because of attractive valuations abroad,
the Series has maintained about 40% of its assets in foreign stocks for much of
the last two years. Four of the portfolio's five country holdings outpaced the
U.S. market in the last six months. Italian stocks led the global advance,
rallying nearly 60% over the period. Returns in Germany, Belgium, and Denmark
have been approximately 20% each, outpacing the S&P 500's 17% move. Thus far,
the performance of the Japanese market has been disappointing. With valuations
at historic lows and investor sentiment unanimously poor, a market bottom should
be near. We believe that the Japanese market will contribute positively to
performance in 1998.
U.S. STOCK MARKET ALLOCATION
Currently approximately 35% of portfolio assets are invested in the U.S. stock
market. Sectors of concentration include Leisure, Technology, and Health Care.
Within the Leisure sector the cable, entertainment, and restaurant industries
all were strong performers the last six months. Such household names as The Walt
Disney Company and McDonald's Corporation were significant contributors to the
Series' performance. Leisure stocks remain good values and will likely be
emphasized in the portfolio throughout 1998. The technology sector, hit hard in
the fourth quarter of 1997, has bounced back. Large capitalization stocks within
the communications equipment and computer peripheral industries led the first
quarter rally. The Series benefited from the technology rebound by owning stocks
within these industries, along with networking and equipment semiconductor
stocks. Health care stocks, also, participated in the first quarter rally.
OTHER SECTOR ALLOCATIONS
Our 20% weighting in U.S. bonds added to performance over the last six months as
well. The strength in the domestic bond market, as evidenced by the yield on the
thirty-year bond falling well below 6%, appears likely to continue. With
inflation near historic lows and real yields above their long term norms, our
outlook for the U.S. bond market is favorable. We believe it could garner
additional investors' attention should equity markets rise to levels
8
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MANAGER'S COMMENTARY (continued)
SECURITY EQUITY FUND - ASSET ALLOCATION SERIES
May 15, 1998
not justified by valuations. Then, additional bond investments could be used as
a temporary defensive position.
We have maintained a 5% investment in gold stocks and a 5% exposure to real
estate in the portfolio. These investments aided portfolio diversification and
contributed positively to performance thus far in 1998.
The Asset Allocation Series continues to emphasize foreign and domestic stocks.
Much of the equity exposure that suffered in the fourth quarter of 1997 has
bounced back and led the market in 1998. With the Series up 10.52% in the first
quarter, we will remain diligent in trying to preserve gains and capitalize on
new opportunities.
Patrick Boyle
Portfolio Manager
(1)Performance figures are based on Class A shares and do not reflect deduction
of the sales charge. Management fee waivers reduced Fund expenses during the
period covered by this report and in the absence of such waiver the performance
quoted would be reduced.
Investing in foreign countries may involve risks, such as currency fluctuations
and political instability, not associated with investing exclusively in the U.S.
--PERFORMANCE--
TOP 5 EQUITY HOLDINGS**
% of
net assets
----------
Bayerische Motoren
Werke (BMW) AG 1.5%
Allianz AG 1.5%
Telecom Italia
Mobile SPA 1.4%
Assicurazioni Gererali 1.0%
Tele-Communications, Inc. 1.0%
**March 31, 1998
AVERAGE ANNUAL RETURNS
As of March 31, 1998
1 year Since Inception
------ ---------------
A Shares 16.5% 13.5%
(6-1-95)
A Shares with sales charge 9.8% 11.1%
(6-1-95)
B Shares 15.5% 12.4%
(6-1-95)
B Shares with CDSC 10.5% 11.3%
(6-1-95)
The performance data above represents past performance which is not predictive
of future results. The investment return and principal value of an investment in
the fund will fluctuate so that an investor's shares, when redeemed, may be
worth more or less than their original cost. The figures above do not reflect
deduction of the maximum front-end sales charge of 5.75% for Class A shares or
contingent deferred sales charge of 5% for Class B shares, as applicable, except
where noted. In addition, the investment manager waived a portion of the
management fee for the Series for the period ended January 31, 1998 and began
charging management fees February 1, 1998. Performance figures would be lower if
the maximum sales charge and advisory fee were deducted.
9
<PAGE>
MANAGER'S COMMENTARY
SECURITY EQUITY FUND - SOCIAL AWARENESS SERIES
May 15, 1998
To Our Shareholders:
The Social Awareness Series performed well compared with its peer group of
funds, returning 15.46% over the first half of the fiscal year versus the peer
group average 11.55%.(1) In the fourth quarter of 1997 (the first quarter of the
fiscal year) the stock markets were weak because of concerns about the effect
that the southeast Asian economic crisis would have on stocks. The first quarter
of 1998 saw a reversal of this negative outlook, as earnings reports came fairly
in line with estimates. Investors became more optimistic with the passage of
time, deciding that the Asian situation might have a less negative impact than
originally believed.
AREAS OF STRONG PERFORMANCE
Early in the fourth quarter of 1997 we increased our position in communications
services, concentrating particularly on the regional Bell operating companies
(RBOCs) and long distance providers. These include names such as AT&T
Corporation, Sprint Corporation, Ameritech Corporation, BellSouth Corporation,
Bell Atlantic Corporation, and SBC Communications, Inc. The sector held less
than a 2% position in the portfolio prior to the beginning of the fiscal year in
October, and was built up to approximately 9% by the end of March.
Communications Services has proven to be a defensive sector during the turmoil
generated by the Asian crisis because of its domestic orientation.
Various portions of the financial sector also performed well because of the
continuing decline in interest rates. The Social Awareness Series portfolio has
representation in diversified financial companies such as mortgage lenders
Federal National Mortgage Association ("Fannie Mae") and Federal Home Loan
Mortgage Company ("Freddie Mac"). Another strong performer in the sector was
H.F. Ahmanson and Company, a savings and loan institution which announced its
intentions to merge with financial services company, Washington Mutual, Inc. We
also hold regional banking companies Bank of New York Company, Inc., and
Northern Trust Corporation, which have very limited exposure to Asian events. On
average over the first half of the fiscal year the financial sector has been
close to 20% of the total portfolio.
A SOCIAL INVESTMENT NEWS UPDATE
As many socially-oriented investors are aware, last September the Securities and
Exchange Commission (SEC) proposed new rules which would have made it much more
difficult for shareholders to place resolutions on proxy ballots. A large
coalition of over 400 socially concerned businesses, investment companies,
religious organizations, and other groups formed a coalition to protest these
proposed rules. We are pleased to report that the two top advisers on
shareholder issues appointed to make recommendations to the SEC on the proposals
essentially sided with the coalition and recommended reverting to the existing
rules. It is widely expected that the SEC will adopt these recommendations in
the near future.
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MANAGER'S COMMENTARY (continued)
SECURITY EQUITY FUND - SOCIAL AWARENESS SERIES
May 15, 1998
THE OUTLOOK FOR THE SECOND HALF OF THE FISCAL YEAR
Along with other portfolio managers at Security Management Company, LLC, we
expect corporate profits to slow in the next two quarters. Since stock prices
are currently at high valuation levels, earnings surprises could have strong
negative impact on share prices. Believing caution to be the safest avenue, we
plan to further diversify the portfolio by adding more names and keeping the
sizes of holdings in any one company relatively small.
Cindy Shields
Portfolio Manager
(1)Performance figures are based on Class A shares and do not reflect deduction
of the sales charge. Management fee waivers reduced Fund expenses during the
period covered by this report and in the absence of such waiver the performance
quoted would be reduced.
--PERFORMANCE--
TOP 5 HOLDINGS**
% of
net assets
----------
Microsoft Corporation 3.0%
Coca-Cola Company 3.0%
Merck & Company, Inc. 2.6%
Intel Corporation 2.2%
Johnson & Johnson 2.2%
**At March 31, 1998
AVERAGE ANNUAL RETURNS
As of March 31, 1998
1 year Since Inception
------ ---------------
A Shares 44.9% 25.9%
(11-1-96)
A Shares with sales charge 36.6% 20.7%
(11-1-96)
B Shares 43.1% 24.5%
(11-1-96)
B Shares with CDSC 38.1% 21.9%
(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 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. In addition, the investment manager waived the management fee for
the Series for the period ended January 31, 1998 and began charging management
fees February 1, 1998. Performance figures would be lower if the maximum sales
charge and advisory fee were deducted.
11
<PAGE>
MANAGER'S COMMENTARY
SECURITY EQUITY FUND - VALUE SERIES
May 15, 1998
To Our Shareholders:
The Value Series continues the excellent performance that has occurred since its
inception in May 1997. For the six months concluded March 31, 1998 the Series
returned 14.56% versus its Lipper peer group average of 12.49%.(1) Its
benchmark, the S&P 500/Barra Value Index, rose 12.92% over the same period.
PRIMARY CONTRIBUTORS TO STRONG PERFORMANCE
During the first quarter of 1998, the total return of the portfolio was enhanced
by the selection of stocks in the technology sector. Our choices of companies
have been geared toward the computer services portion of the sector, an area
benefiting from stable earnings growth. The companies in this category have in
general been less susceptible to earnings announcement surprises than other
technology areas. In addition, computer services are perceived by investors to
have added strategic value in light of the takeover bid for Computer Sciences by
Computer Associates.
Comverse Technology, Inc., a provider of value-added hardware and software for
multimedia communications and voice processing applications, rose over 38% after
reporting record earnings in the last quarter of 1997. Electronics for Imaging,
Inc., which develops products and technologies that enable digital color
printing over computer networks, also rose over 30% after being recommended
highly by industry analysts.
OTHER AREAS OF STRENGTH
Other strong performers during the period included energy stocks Quaker State
Corporation and Tesoro Petroleum Corporation. Quaker State's share price rose
late in the period on buyout speculation, while Tesoro increased after receiving
favorable recommendations from several Wall Street analysts. In communications,
Metromedia International Group, Inc., has been a strong performer in part
because of its ownership of cellular licenses in emerging markets where
communication structures are in the early stages of expansion.
In some cases the portfolio benefited from what it didn't own. Sectors which
were underweighted relative to the benchmark index include utilities, banks, and
other economically sensitive sectors. These areas underperformed in general when
compared with the broad market returns, and our underweighting boosted our
performance versus other funds in the peer group.
STRATEGIES FOR FUTURE PURCHASES
The Value Series ideally seeks to capitalize on two types of investment
opportunities. The first is an early-stage growth company which possesses
internal dynamics that may reduce its dependency overall economic conditions. We
would purchase these stocks at no more than very modest premiums to general
market valuation levels in order to avoid those "high expectations" stocks
generally owned by
12
<PAGE>
MANAGER'S COMMENTARY (continued)
SECURITY EQUITY FUND - VALUE SERIES
May 15, 1998
aggressive, short-term oriented investors. Stocks in this category which can
still be purchased at attractive prices may be clouded by some negative issue or
concern, or perceived as broken growth stocks because the sector is experiencing
a temporary difficulty.
The second opportunity lies in companies which have historically been
underachievers but have the potential to significantly improve their
performance. Such companies may be in the early stages of a restructuring or
reorganization process that can provide the basis for sustained earnings
acceleration. They would ideally have an attractive franchise value that could
induce outsiders to consider improving the company if current management is
unable to accomplish its goals.
Many of these opportunities are present today predominantly in the small-cap and
midcap market sectors. I expect the Value Series to focus on these areas as we
move through the second half of the fiscal year.
Jim Schier
Portfolio Manager
(1)Performance figures are based on Class A shares and do not reflect deduction
of the sales charge. Management fee waivers reduced Fund expenses during the
period covered by this report and in the absence of such waiver the performance
quoted would be reduced.
--PERFORMANCE--
TOP 5 HOLDINGS**
% of
net assets
----------
Mylan Laboratories, Inc. 3.9%
Comverse Technology, Inc. 3.8%
Computer Sciences Corporation 3.1%
Hasbro, Inc. 3.0%
Angelica Corporation 2.8%
** At March 31, 1998
AVERAGE ANNUAL RETURNS
As of March 31, 1998
Since Inception
---------------
A Shares 48.4%
(5-1-97)
A Shares with sales charge 39.8%
(5-1-97)
B Shares 47.2%
(5-1-97)
B Shares with CDSC 42.2%
(5-1-97)
The performance data above represents past performance which is not predictive
of future results. The returns have been calculated from May 1, 1997 (date of
inception) to March 31, 1998, and are not annualized. The investment return and
principal value of an investment in the fund will fluctuate so that an
investor's shares, when redeemed, may be worth more or less than their original
cost. The figures above do not reflect deduction of the maximum front-end sales
charge of 5.75% for Class A shares or contingent deferred sales charge of 5% for
Class B shares, as applicable, except where noted. In addition, the investment
manager waived the management fee for the Series for the period ended January
31, 1998 and began charging management fees February 1, 1998. Performance
figures would be lower if the maximum sales charge and advisory fee were
deducted.
13
<PAGE>
MANAGER'S COMMENTARY
SECURITY EQUITY FUND - SMALL COMPANY SERIES
May 15, 1998
[LOGO] STRONG CAPITAL MANAGEMENT, INC.
To Our Shareholders:
The Small Company Series began operations on October 15, 1997. For the period
since inception the Series returned 7.47%.(1) For the similar period the
benchmark Russell 2000 Index of small-cap stocks gained 4.21%, and the Lipper
peer group of small company funds rose 4.46%.
ECONOMIC ENVIRONMENT DURING THE PERIOD
The concerns of late 1997 carried over to the new year, and January saw cautious
investors, leery of the effects of the Asian slowdown, create softness in equity
prices. When fourth quarter earnings reports generally met expectations, buyers
returned to the market and propelled the major indexes to all-time highs.
Worries about profit margin squeezes continued to abound in an environment of
full employment and expectations of price competition from Asian imports.
However, these concerns were offset by strong cash flows into equities and the
absence of inflation at both the producer and consumer levels.
The market generally shrugged off a deceleration of corporate earnings growth,
resulting in further expansion of valuation measures. Flush with cash flows and
discounting fears of impending global financial collapse, investors continued
their affection for the liquidity of large-cap stocks. Newfound enthusiasm for
sectors which were oversold in late 1997, such as technology, gave rise to a
healthy broadening of the market in February and March.
SECTOR PERFORMANCE IN THE PORTFOLIO
Strong performance from the overweight retail and technology sectors and
commercial services group helped the portfolio outperform its benchmark for the
first quarter. Gains were slightly offset by weakness in oil service stocks and
the soft financial sector, in which the portfolio's real estate holdings fared
poorly. Healthcare and media holdings were solid, if unspectacular, contributors
to overall positive returns. Stellar performers were quite diverse, including an
aerospace and defense stock (Orbital Sciences Corporation), a food company
(American Italian Pasta Company), a diversified drug firm (Biovail, Inc.), and a
regional airline (Midwest Express Holdings, Inc.).
During the quarter, holdings of consumer cyclicals and oil service stocks were
trimmed and financials, particularly real estate stocks, were significantly
reduced. We used proceeds and inflows to the portfolio to expand holdings in the
commercial service and computer service groups, diversify the portfolio's health
care stocks, and increase weighting to the retail sector. We also initiated
positions in two companies in the basic material sector.
14
<PAGE>
MANAGER'S COMMENTARY (continued)
SECURITY EQUITY FUND - SMALL COMPANY SERIES
May 15, 1998
OUR THOUGHTS ABOUT THE COMING MONTHS
A gradual broadening of the market to secondary issues is a healthy and
important force propelling the ongoing bull market. However, equity valuations
are at very lofty levels, by all commonly accepted measures. We must continue to
closely monitor the Asian situation for negative effects on corporate earnings,
as well as the potential overheating of the domestic economy. We remain
committed to investing in premier smaller long-term growth companies with sound
managements, selling at reasonable valuations.
Ron Ognar
Portfolio Manager
(1)Performance figures are based on Class A shares and do not reflect deduction
of the sales charge. Management fee waivers reduced Fund expenses during the
period covered by this report and in the absence of such waiver the performance
quoted would be reduced.
--PERFORMANCE--
TOP 5 HOLDINGS**
% of
net assets
----------
Lamar Advertising Company 3.3%
Romac International, Inc. 2.8%
Information Management
Resources, Inc. 2.6%
Sinclair Broadcast Group, Inc. 2.4%
Biovail Corporation International 2.4%
** At March 31, 1998
AVERAGE ANNUAL RETURNS
As of March 31, 1998
Since Inception
---------------
A Shares 7.5%
(10-15-97)
A Shares with sales charge 1.3%
(10-15-97)
B Shares 7.1%
(10-15-97)
B Shares with CDSC 2.1%
(10-15-97)
The performance data above represents past performance which is not predictive
of future results. The returns have been calculated from October 15, 1997 (date
of inception) to March 31, 1998, and are not annualized. The investment return
and principal value of an investment in the fund will fluctuate so that an
investor's shares, when redeemed, may be worth more or less than their original
cost. The figures above do not reflect deduction of the maximum front-end sales
charge of 5.75% for Class A shares or contingent deferred sales charge of 5% for
Class B shares, as applicable, except where noted. In addition, the investment
manager waived the management fee for the Series for the period ended March 31,
1998 and has agreed to continue waiving its fee until September 30, 1998.
Performance figures would be lower if the maximum sales charge and advisory fee
were deducted.
15
<PAGE>
MANAGER'S COMMENTARY
SECURITY ULTRA FUND
May 15, 1998
To Our Shareholders:
The Security Ultra Fund got off to a slow start in the first half of the current
fiscal year with a 7.24% total return, compared with 8.22% for its Lipper peer
group.1 With a change in portfolio managers in mid-December came a planned
restructuring which we believe will position the Fund for improved performance
in the months ahead. In general, we have shifted out of some lower-growth
companies into those with a higher growth potential. The capital goods and
finance sectors have been reduced, while health care and technology have been
increased.
STRONG PERFORMERS IN THE FIRST HALF
The greatest contributor to positive performance in recent months occurred in a
financial sector holding. Insurance company AFLAC, Inc., gained investor favor
after its management made positive comments about its earnings prospects. The
financial sector overall, however, was a weak performer after the Asian economic
crisis unfolded. Because we had a smaller weighting in financials than that of
the benchmark index, the impact on our total return was less.
The energy sector benefited from an increase in oil prices. Our shares in Quaker
State Corporation rose in value on buyout speculation. Another energy holding,
Tesoro Petroleum Corporation, increased after receiving favorable
recommendations from several Wall Street analysts.
AREAS OF WEAKER PERFORMANCE
Earnings disappointments played a large part in the underperformance of Ultra
Fund. ADC Telecommunications, Inc., a manufacturer of transmission and
networking systems, announced in January that its earnings were held back by
slower-than-expected demand. Dura Pharmaceuticals, Inc., dropped 37% in value
after announcing in late February that its earnings and sales would not meet
expectations. A third company, CompUSA, which retails and resells personal
computers, also said earnings would fail to meet expectations as personal
computer prices continued to fall.
PLANS FOR THE COMING MONTHS
As we enter the second half of the fiscal year we plan to keep our technology
sector weighting high, focusing on areas such as computer services, software,
and telecommunications. We avoid heavy concentrations in personal computer
stocks, hardware manufacturers, and peripherals because of the potential for
slowing earnings growth, anticipated profit margin problems, and current high
valuations.
16
<PAGE>
MANAGER'S COMMENTARY (continued)
SECURITY ULTRA FUND
May 15, 1998
Health care will also be a large weighting, with emphasis on less well-known
companies whose prices are at smaller premiums than their big-name
pharmaceutical counterparts. We prefer manufacturers who are in the early stages
of new product introductions, and whose stock prices may be penalized simply
because of their smaller sizes.
We are anticipating a more difficult stock market environment for the next few
months. Valuations are historically very high now, making it difficult to find
attractive issues for purchase. Profitability levels are high as well, and may
come under pressure because of slowing revenue growth and higher costs from
items such as wage inflation. We will continue to search for reasonably priced
growth issues.
Jim Schier
Portfolio Manager
(1)Performance figures are based on Class A shares and do not reflect deduction
of the sales charge.
--PERFORMANCE--
TOP 5 HOLDINGS**
% of
net assets
----------
Comverse Technology, Inc. 4.6%
Mylan Laboratories, Inc. 4.3%
AFLAC, Inc. 2.7%
American Management
Systems, Inc. 2.4%
Northern Trust Corporation 2.0%
**At March 31, 1998
AVERAGE ANNUAL RETURNS
As of March 31, 1998
1 year 5 years 10 years
------ ------- --------
A Shares 41.2% 13.3% 11.0%
A Shares with sales charge 33.0% 11.9% 10.4%
B Shares 39.9% 12.1% N/A
(10-19-93)
(since inception)
B Shares with CDSC 34.9% 11.7% 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.
17
<PAGE>
SCHEDULE OF INVESTMENTS
March 31, 1998
(Unaudited)
SECURITY GROWTH AND INCOME FUND
PRINCIPAL
AMOUNT OR
NUMBER OF MARKET
PREFERRED STOCKS SHARES VALUE
- --------------------------------------------------------------------------------
BANKING AND CREDIT - 0.6%
California Federal Bank, 9.125% .................... 17,050 $ 468,875
California Federal Bank, 11.50% .................... 1,875 212,344
------------
681,219
COMMUNICATIONS - 0.2%
CSC Holdings, Inc. ................................. 1,788 204,771
ENTERTAINMENT - 0.3%
Time Warner, Inc. .................................. 278 311,012
PUBLISHING & PRINTING - 0.3%
K-III Communications Corporation ................... 2,500 266,250
------------
Total preferred stocks - 1.4% ...................... 1,463,252
TRUST PREFERRED SECURITIES(1)
- -----------------------------
FINANCE - 0.4%
S I Financing Inc., 9.5% - 2026 .................... 7,500 202,031
IBJ Preferred Capital Company, LLC,
8.79% - 2049 ..................................... $ 200,000 193,500
------------
395,531
CORPORATE BONDS
- ---------------
AEROSPACE & DEFENSE - 0.1%
Burke Industries, Inc., 10.0% - 2007 ............... $ 100,000 106,375
BANKING & CREDIT - 0.5%
BF Saul REIT, 11.625% - 2002 ....................... $ 200,000 212,250
BF Saul REIT, 9.75% - 2008 ......................... $ 100,000 101,000
Bay View Capital Corporation,
9.125% - 2007 .................................... $ 100,000 105,000
FCB/NC Capital Trust, Inc.,
8.05% - 2028 ..................................... $ 125,000 126,250
------------
544,500
BROADCAST MEDIA - 0.2%
Allbritton Communications Company,
9.75% - 2007 ..................................... $ 125,000 132,188
Allbritton Communications, Inc.,
8.875% - 2008 .................................... $ 50,000 50,625
------------
182,813
CABLE SYSTEMS - 0.4%
Adelphia Communications, Inc.,
8.375% - 2008 .................................... $ 125,000 125,313
Diamond Holdings, Inc.,
9.125% - 2008 .................................... $ 125,000 128,750
Jones Intercable, Inc., 7.625% - 2008 .............. $ 100,000 98,625
------------
352,688
CHEMICALS - 0.1%
Envirodyne Industries, Inc.,
12.00% -2000 ..................................... $ 100,000 106,875
PRINCIPAL MARKET
CORPORATE BONDS (continued) AMOUNT VALUE
- --------------------------------------------------------------------------------
COMMUNICATIONS - 1.2%
Century Communications Corporation,
9.50% - 2005 ..................................... $ 100,000 $ 107,125
Century Communications Corporation,
8.75% - 2007 ..................................... 100,000 101,750
CF Cable TV, Inc., 11.625% - 2005 .................. 150,000 170,625
Comcast Corporation, 9.125% - 2006 ................. 75,000 79,969
CSC Holdings, Inc., 7.875% - 2007 .................. 75,000 76,875
CSC Holdings, Inc., 7.875% - 2018 .................. 25,000 24,750
Heritage Media Corporation,
8.75% - 2006 ..................................... 100,000 107,000
Lenfest Communications, Inc.,
10.50% -2006 ..................................... 125,000 142,500
Rogers Cablesystems Ltd.,
9.625% - 2002 .................................... 175,000 187,687
Rogers Communications, Inc.,
9.125% - 2006 .................................... 200,000 204,500
------------
1,202,781
CONSUMER GOODS & SERVICES - 0.1%
Chattem, Inc., 8.875% - 2008 ....................... 150,000 151,875
COSMETICS - 0.2%
Revlon Consumer Products,
8.125% - 2006 .................................... 175,000 177,187
DIVERSIFIED - 0.2%
Sequa Corporation, 9.375% - 2003 ................... 250,000 258,750
ELECTRIC & GAS COMPANIES - 0.3%
AES Corporation, 10.25% - 2006 ..................... 200,000 220,500
Cal Energy Company, Inc.,
9.50% - 2006 ..................................... 100,000 108,375
------------
328,875
FINANCE - 0.5%
Dollar Financial Group, Inc.,
10.875% - 2006 ................................... 300,000 328,500
Homeside, Inc., 11.25% - 2003 ...................... 121,000 143,385
------------
471,885
FOOD & BEVERAGE TRADE - 0.2%
Delta Beverage Group,
9.75% - 2003 ..................................... 200,000 210,000
GAMING - 0.7%
Hard Rock Hotel, Inc.,
9.25% - 2005 ..................................... 75,000 76,500
Harrah's Operating, Inc.,
8.75% - 2000 ..................................... 350,000 363,125
MGM Grand, Inc., 6.625% - 2005 ..................... 125,000 122,500
Mirage Resorts, Inc.,
6.625% - 2005 .................................... 125,000 123,281
------------
685,406
See accompanying notes.
18
<PAGE>
SCHEDULE OF INVESTMENTS
March 31, 1998
(Unaudited)
SECURITY GROWTH AND INCOME FUND (continued)
PRINCIPAL MARKET
CORPORATE BONDS (continued) AMOUNT VALUE
- --------------------------------------------------------------------------------
HEALTH CARE - SERVICES - 0.3%
Genesis Eldercare Acq,
9.0% - 2007 ...................................... $ 200,000 $ 206,250
Prime Medical Services,
8.75% - 2008 ..................................... 75,000 75,375
------------
281,625
HOSPITAL MANAGEMENT - 0.1%
Tenet Healthcare Corporation,
10.125% - 2005 ................................... 100,000 109,750
HOUSING-HOME BUILDING - 0.3%
Hovnanian Enterprise,
9.75% - 2005 ..................................... 100,000 101,500
Toll Corporation, 7.75% - 2007 ..................... 250,000 253,438
------------
354,938
INDUSTRIAL PRODUCT - 0.2%
Shop Vac Corporation,
10.625% - 2003 ................................... 200,000 218,500
MACHINERY - 0.1%
Columbus McKinnon Corporation,
8.5% - 2008 ...................................... 150,000 150,750
MANUFACTURING - 0.1%
AGCO Corporation,
8.50% - 2006 ..................................... 100,000 103,750
METALS & MINERALS - 0.1%
Simcala, Inc., 9.625% - 2006 ....................... 75,000 75,750
OIL & GAS COMPANIES - 0.1%
Seagull Energy Corporation,
8.625% - 2005 .................................... 100,000 103,500
PUBLISHING & PRINTING - 0.2%
Golden Books Publishing, Inc.,
7.65% - 2002 ..................................... 200,000 193,000
REFINERY - 0.2%
Crown Central Petroleum Corporation,
10.875% - 2005 ................................... 200,000 213,500
RESTAURANTS - 0.4%
Carrols Corporation,
11.50% - 2003 .................................... 425,000 450,500
RETAIL - APPAREL - 0.1%
Specialty Retailers, Inc.,
8.50% - 2005 ..................................... 125,000 128,125
RETAIL - SPECIALTY - 0.1%
Zale's Corporation,
8.50% - 2007 ..................................... 100,000 102,250
PRINCIPAL
AMOUNT OR
NUMBER OF MARKET
CORPORATE BONDS (continued) SHARES VALUE
- --------------------------------------------------------------------------------
STEEL & METAL PRODUCTS - 0.4%
AK Steel Corporation,
9.125% - 2006 .................................... $ 125,000 $ 134,062
Ameristeel Corporation,
8.75% - 2008 ..................................... $ 100,000 101,250
WHX Corporation,
10.5% - 2005 ..................................... $ 75,000 76,500
Wheeling-Pittsburg Corporation,
9.25% - 2007 ..................................... $ 100,000 101,500
------------
413,312
TELECOMMUNICATIONS - 1.1%
Comcast Cellular Holdings, Inc.,
9.5% - 2007 ...................................... $ 200,000 210,500
Intermedia Communications,
8.5% - 2008 ...................................... $ 250,000 261,875
Mastec, Inc., 7.75% - 2008 ......................... $ 75,000 75,188
Mcleodusa, Inc.,
8.375% - 2008 .................................... $ 175,000 181,125
RCN Corporation, 10.0% - 2007 ...................... $ 225,000 240,187
Satelites Mexicanos, Inc.,
10.125% - 2004 ................................... $ 200,000 205,500
------------
1,174,375
TEXTILES - 0.3%
Delta Mills, Inc., 9.625% - 2007 ................... $ 100,000 104,000
Westpoint Stevens, Inc.,
9.375% - 2005 .................................... $ 200,000 211,500
------------
315,500
------------
Total corporate bonds - 8.8% ..................................... 9,169,135
COMMON STOCKS
- -------------
AGRICULTURAL PRODUCTS - 1.3%
Archer-Daniels-Midland Company ..................... 60,000 1,316,250
ALUMINUM - 0.8%
Aluminum Company of America ........................ 10,000 688,125
AUTO PARTS & EQUIPMENT - 1.1%
TRW, Inc. .......................................... 20,000 1,102,500
AUTOMOBILES - 1.3%
General Motors Corporation ......................... 20,000 1,348,750
BANKS - MAJOR REGIONAL - 2.3%
Bank of New York Company, Inc. ..................... 5,000 314,062
Wells Fargo & Company .............................. 5,800 1,921,250
------------
2,235,312
BANKS - MONEY CENTER - 0.3%
Chase Manhattan Corporation ........................ 2,200 296,725
See accompanying notes.
19
<PAGE>
SCHEDULE OF INVESTMENTS
March 31, 1998
(Unaudited)
SECURITY GROWTH AND INCOME FUND (continued)
NUMBER MARKET
COMMON STOCKS (continued) OF SHARES VALUE
- --------------------------------------------------------------------------------
BEVERAGES - ALCOHOLIC - 0.9%
Anheuser-Busch Companies, Inc ...................... 20,000 $ 926,250
BEVERAGES - SOFT DRINK - 1.2%
PepsiCo, Inc. ...................................... 30,000 1,280,625
CHEMICALS-BASIC - 1.2%
Praxair, Inc. ...................................... 25,000 1,285,938
CHEMICALS-SPECIALTY - 1.8%
Dexter Corporation ................................. 20,000 827,500
Materials Sciences Corporation* .................... 30,000 328,125
Minerals Technologies, Inc. ........................ 15,000 755,625
------------
1,911,250
COMMUNICATION EQUIPMENT - 2.6%
ANTEC Corporation* ................................. 50,000 750,000
Ciena Corporation* ................................. 10,000 426,250
Harris Corporation ................................. 25,000 1,515,625
------------
2,691,875
COMPUTER SOFTWARE/SERVICES - 0.6%
Computer Sciences Corporation ...................... 12,000 660,000
CONTAINERS & PACKAGING - 0.9%
Bemis Company, Inc. ................................ 6,000 270,750
Sealright Company, Inc.* .......................... 5,400 74,250
Union Camp Corporation ............................. 10,000 597,500
------------
942,500
ELECTRIC COMPANIES - 4.9%
Allegheny Energy, Inc. ............................. 13,000 436,313
American Electric Power
Company, Inc. .................................... 15,000 753,750
Kansas City Power & Light
Company .......................................... 30,000 945,000
LG&E Energy Corporation ............................ 10,000 258,125
Peco Energy Company ................................ 40,000 885,000
Potomac Electric Power Company ..................... 20,000 501,250
Public Service Enterprise Group,Inc ................ 13,000 492,375
Texas Utilities Company ............................ 20,000 786,250
------------
5,058,063
ELECTRICAL EQUIPMENT - 2.8%
AMP, Inc. .......................................... 20,000 876,250
Emerson Electric Company ........................... 6,000 391,125
General Electric Company ........................... 10,000 861,875
Hubbell, Inc. (Cl.B) ............................... 15,000 755,625
------------
2,884,875
ELECTRONICS - DEFENSE - 1.1%
Raytheon Company (Cl.B) ............................ 20,000 1,167,500
ELECTRONICS - INSTRUMENTATION - 1.2%
E G & G, Inc. ...................................... 22,000 639,375
Sawtek, Inc.* ...................................... 24,000 609,000
------------
1,248,375
FINANCIAL-DIVERSE - 0.9%
Fannie Mae ......................................... 15,000 948,750
FOODS - 3.0%
Chiquita Brands International, Inc. ................ 105,000 1,437,188
ConAgra, Inc. ...................................... 30,000 963,750
General Mills, Inc. ................................ 10,000 760,000
------------
3,160,938
FOOTWEAR - 0.2%
Nike, Inc. (Cl.B) .................................. 4,000 177,000
GAMING - 0.8%
Circus Circus Enterprises, Inc.* ................... 38,000 798,000
GOLD & PRECIOUS METALS MINING - 0.9%
Barrick Gold Corporation ........................... 45,000 973,125
HEALTH CARE - LONG TERM CARE - 0.8%
Integrated Health Services, Inc. ................... 20,000 786,250
HEALTH CARE - MANAGED CARE - 1.1%
Humana, Inc.* ...................................... 20,000 496,250
United Healthcare Corporation ...................... 10,000 647,500
------------
1,143,750
HOUSEHOLD FURNISHINGS & APPLIANCES -1.8%
Meadowcraft, Inc.* ................................. 87,500 1,279,687
Whirlpool Corporation .............................. 9,000 617,063
------------
1,896,750
INSURANCE - PROPERTY - 3.8%
Allstate Corporation ............................... 5,000 459,687
Leucadia National Corporation ...................... 30,000 1,181,250
SAFECO Corporation ................................. 10,000 546,563
St. Paul Companies, Inc. ........................... 20,000 1,782,500
------------
3,970,000
IRON & STEEL - 0.8%
Cleveland-Cliffs, Inc. ............................. 15,000 806,250
LEISURE TIME PRODUCTS - 0.3%
Hasbro, Inc. ....................................... 10,000 353,125
LODGING - HOTELS - 0.4%
La Quinta Inns, Inc. ............................... 20,000 420,000
MANUFACTURING-DIVERSIFIED - 3.2%
AlliedSignal, Inc. ................................. 50,000 2,100,000
Tenneco, Inc. ...................................... 28,000 1,195,250
------------
3,295,250
MEDICAL PRODUCTS & SUPPLIES - 2.9%
Baxter International, Inc. ......................... 20,000 1,102,500
Stryker Corporation ................................ 20,000 937,500
See accompanying notes.
20
<PAGE>
SCHEDULE OF INVESTMENTS
March 31, 1998
(Unaudited)
SECURITY GROWTH AND INCOME FUND (continued)
NUMBER MARKET
COMMON STOCKS (continued) OF SHARES VALUE
- --------------------------------------------------------------------------------
MEDICAL PRODUCTS & SUPPLIES (continued)
Sunrise Medical, Inc.* ............................. 60,000 $ 956,250
------------
2,996,250
NATURAL GAS - 4.7%
Consolidated Natural Gas Company ................... 15,000 865,312
Equitable Resources, Inc. .......................... 86,200 2,866,150
People's Energy Corporation ........................ 30,000 1,091,250
------------
4,822,712
OFFICE EQUIPMENT & SUPPLIES - 1.2%
Corporate Express, Inc. ............................ 120,000 1,196,250
OIL - DOMESTIC - 0.6%
Unocal Corporation ................................. 15,000 580,312
OIL - INTERNATIONAL - 4.2%
Chevron Corporation ................................ 13,000 1,044,063
Mobil Corporation .................................. 20,000 1,532,500
Texaco, Inc. ....................................... 30,000 1,807,500
------------
4,384,063
OIL & GAS - DRILLING & EQUIPMENT - 0.8%
Halliburton Company ................................ 10,000 501,875
Schlumberger, Ltd. ................................. 5,000 378,750
------------
880,625
OIL & GAS - EXPLORATION & PRODUCTION - 4.2%
Enron Oil & Gas Company ............................ 40,000 917,500
Forcenergy, Inc.* .................................. 40,000 1,060,000
Kerr-McGee Corporation ............................. 10,000 695,625
YPF Sociedad Anomima ADR ........................... 50,000 1,700,000
------------
4,373,125
OIL & GAS - REFINING & MARKETING -1.7%
Ultramar Diamond Shamrock
Corporation ...................................... 50,000 1,762,500
PAPER & FOREST PRODUCTS - 4.1%
Boise Cascade Corporation .......................... 20,000 721,250
Champion International Corporation ................. 10,000 543,125
International Paper Company ........................ 30,000 1,404,375
Louisiana-Pacific Corporation ...................... 50,000 1,162,500
Rayonier, Inc. ..................................... 10,000 456,875
------------
4,288,125
PHARMACEUTICALS - 2.1%
Mylan Laboratories, Inc. ........................... 40,000 920,000
Teva Pharmaceutical Industries,
Ltd., ADR ........................................ 30,000 1,282,500
------------
2,202,500
PHOTOGRAPHY - IMAGING - 0.6%
Eastman Kodak Company .............................. 10,000 648,750
PUBLISHING - NEWSPAPER - 1.0%
News Corporation, Ltd. ADR ......................... 45,000 1,035,000
RAILROADS - 1.9%
Canadian Pacific, Ltd. ............................. 40,000 1,180,000
Norfolk Southern Corporation ....................... 10,000 373,750
RailAmerica, Inc.* ................................. 60,000 401,250
------------
1,955,000
REAL ESTATE INVESTMENT TRUSTS - 3.2%
Camden Property Trust .............................. 20,000 592,500
Health & Retirement Property Trust ................. 20,000 402,500
Highwoods Properties, Inc. ......................... 10,000 353,125
Hospitality Properties Trust ....................... 20,000 708,750
Liberty Property Trust ............................. 16,000 430,000
Simon Debartolo Group, Inc.* ....................... 12,000 411,000
United Dominion Realty Trust, Inc. ................. 30,000 435,000
------------
3,332,875
RESTAURANTS - 2.9%
The Cheesecake Factory* ............................ 30,000 999,375
McDonald's Corporation ............................. 23,000 1,380,000
Wendy's International, Inc. ........................ 30,000 669,375
------------
3,048,750
RETAIL - DEPARTMENT STORES - 0.7%
Dillard's Inc. ..................................... 20,000 738,750
RETAIL - FOOD CHAINS - 0.6%
Giant Food, Inc. ................................... 15,000 579,375
RETAIL - SPECIALTY - 1.5%
Toys "R" Us, Inc.* ................................. 20,000 601,250
Woolworth Corporation* ............................ 40,000 1,000,000
------------
1,601,250
SERVICES - ADVERTISING/MARKETING -1.7%
Acxiom Corporation* ................................ 50,000 1,281,250
Omnicom Group, Inc. ................................ 10,000 470,625
------------
1,751,875
SERVICES - COMMERCIAL & CONSUMER -1.2%
Angelica Corporation ............................... 53,000 1,222,313
SERVICES - DATA PROCESSING - 0.9%
First Data Corporation ............................. 30,000 975,000
TOBACCO - 0.6%
Philip Morris Companies, Inc. ...................... 15,000 625,312
WASTE MANAGEMENT - 1.1%
Browning-Ferris Industries ......................... 15,000 489,375
Waste Management, Inc. ............................. 20,000 616,250
------------
1,105,625
------------
Total common stocks - 88.7% ...................................... 91,880,438
------------
Total investments - 99.3% 102,908,356
Cash and other assets, less liabilities - 0.7% ................... 729,714
------------
Total net assets - 100.0%......................................... $103,638,070
============
See accompanying notes.
21
<PAGE>
SCHEDULE OF INVESTMENTS
March 31, 1998
(Unaudited)
SECURITY EQUITY FUND - EQUITY SERIES
NUMBER OF MARKET
COMMON STOCKS SHARES VALUE
- --------------------------------------------------------------------------------
AUTOMOBILES - 1.0%
Chrysler Corporation ............................... 230,000 $ 9,559,375
BANKS - MAJOR REGIONAL - 3.9%
Bank of New York Company, Inc. ..................... 200,000 12,562,500
Northern Trust Corporation ......................... 200,000 14,950,000
Norwest Corporation ................................ 240,000 9,975,000
------------
37,487,500
BANKS - MONEY CENTER - 2.2%
BankAmerica Corporation ............................ 80,000 6,610,000
Chase Manhattan Corporation ........................ 110,000 14,836,250
------------
21,446,250
BEVERAGES - SOFT DRINK - 1.2%
PepsiCo, Inc. ...................................... 260,000 11,098,750
BROADCAST MEDIA - 0.7%
Chancellor Media Corporation* ...................... 150,000 6,881,250
CHEMICALS - BASIC - 1.9%
Imperial Chemical Industries PLC ADR ............... 115,000 8,265,625
Praxair, Inc. ...................................... 200,000 10,287,500
------------
18,553,125
CHEMICALS - DIVERSIFIED - 1.1%
B.F. Goodrich Company .............................. 200,000 10,212,500
COMMUNICATION EQUIPMENT - 0.7%
Lucent Technologies, Inc. .......................... 50,000 6,393,750
COMPUTER HARDWARE - 1.3%
Compaq Computer Corporation ........................ 80,000 2,070,000
International Business Machines
Corporation ...................................... 100,000 10,387,500
------------
12,457,500
COMPUTERS - NETWORKING - 1.1%
Cisco Systems, Inc.* ............................... 150,000 10,256,250
COMPUTER SOFTWARE/SERVICES - 3.6%
BMC Software, Inc.* ................................ 135,000 11,314,688
Computer Sciences Corporation* ..................... 120,000 6,600,000
Microsoft Corporation* ............................. 180,000 16,110,000
Wang Laboratories, Inc. Warrants ................... 2,369 30,501
------------
34,055,189
ELECTRICAL EQUIPMENT - 3.4%
Emerson Electric Company ........................... 150,000 9,778,125
General Electric Company ........................... 200,000 17,237,500
Honeywell, Inc. .................................... 65,000 5,374,687
------------
32,390,312
ELECTRONICS - SEMICONDUCTORS - 0.7%
Intel Corporation .................................. 90,000 7,025,625
ENTERTAINMENT - 0.8%
Time Warner, Inc. .................................. 100,000 7,200,000
FINANCIAL - DIVERSE - 3.5%
American General Corporation ....................... 100,000 6,468,750
Fannie Mae ......................................... 230,000 14,547,500
Federal Home Loan Mortgage
Corporation ...................................... 270,000 12,808,125
------------
33,824,375
FOODS - 3.4%
Bestfoods .......................................... 120,000 14,025,000
ConAgra, Inc. ...................................... 320,000 10,280,000
Ralston-Purina Group ............................... 75,000 7,950,000
------------
32,255,000
GAMING & LOTTERY - 0.1 %
Circus Circus Enterprises, Inc.* ................... 53,000 1,113,000
HARDWARE & TOOLS - 0.3%
Black & Decker Corporation ......................... 50,000 2,653,125
HEALTH CARE - DIVERSE - 3.1%
American Home Products Corporation ................. 150,000 14,306,250
Bristol-Myers Squibb Company ....................... 150,000 15,646,875
------------
29,953,125
HOUSEHOLD FURNISHINGS & APPLIANCES - 2.2%
Leggett & Platt, Inc. .............................. 230,500 11,856,344
Sunbeam Corporation ................................ 200,000 8,812,500
------------
20,668,844
HOUSEHOLD PRODUCTS - 3.8%
Colgate-Palmolive Company .......................... 150,000 12,993,750
Fort James Corporation ............................. 225,000 10,307,812
Procter & Gamble Company ........................... 150,000 12,656,250
------------
35,957,812
INSURANCE - MULTI-LINE - 3.8%
American International Group, Inc. ................. 110,000 13,853,125
Hartford Financial Services Group,Inc .............. 100,000 10,850,000
Lincoln National Corporation ....................... 135,000 11,458,125
------------
36,161,250
INSURANCE - PROPERTY - 2.5%
Allstate Corporation ............................... 145,000 13,330,938
Chubb Corporation .................................. 140,000 10,972,500
------------
24,303,438
LODGING - HOTELS - 1.5%
Carnival Corporation (Cl. A) ....................... 200,000 13,950,000
MACHINERY - DIVERSE - 0.8%
Cooper Industries, Inc. ............................ 120,000 7,132,500
MANUFACTURING - DIVERSIFIED - 7.7%
AlliedSignal, Inc. ................................. 320,000 13,440,000
Crane Company ...................................... 200,000 10,600,000
Textron, Inc. ...................................... 105,000 8,085,000
See accompanying notes.
22
<PAGE>
SCHEDULE OF INVESTMENTS
March 31, 1998
(Unaudited)
SECURITY EQUITY FUND - EQUITY SERIES (continued)
NUMBER OF MARKET
COMMON STOCKS (continued) SHARES VALUE
- --------------------------------------------------------------------------------
MANUFACTURING - DIVERSIFIED (continued)
Tyco International, Ltd. ........................... 315,000 $ 17,206,875
U.S. Industries, Inc. .............................. 470,000 14,129,375
United Technologies Corporation ...................... 115,000 10,615,937
------------
74,077,187
MEDICAL PRODUCTS & SUPPLIES - 3.6%
Baxter International, Inc. ......................... 200,000 11,025,000
Becton, Dickinson & Company ........................ 200,000 13,612,500
Medtronic, Inc. .................................... 200,000 10,375,000
------------
35,012,500
NATURAL GAS - 2.0%
Coastal Corporation ................................ 170,000 11,071,250
MCN Energy Group, Inc. ............................. 150,000 5,606,250
Williams Companies, Inc. ........................... 70,000 2,240,000
------------
18,917,500
OIL - DOMESTIC - 0.4%
USX Marathon Group ................................. 100,000 3,762,500
OIL - INTERNATIONAL - 4.2%
Chevron Corporation ................................ 90,000 7,228,125
Mobil Corporation .................................. 140,000 10,727,500
Royal Dutch Petroleum Company ...................... 200,000 11,362,500
Texaco, Inc. ....................................... 180,000 10,845,000
------------
40,163,125
OIL & GAS - DRILLING & EQUIPMENT - 0.6%
Schlumberger, Ltd. ................................. 70,000 5,302,500
OIL & GAS - EXPLORATION & PRODUCTION - 1.8%
Burlington Resources, Inc. ......................... 250,000 11,984,375
YPF Sociedad Anonima ADR ........................... 150,000 5,100,000
------------
17,084,375
PAPER & FOREST PRODUCTS - 0.8%
Bowater, Inc. ...................................... 140,000 7,901,250
PERSONAL CARE - 1.2%
Gillette Company ................................... 100,000 11,868,750
PHARMACEUTICALS - 3.0%
Schering-Plough Corporation ........................ 200,000 16,337,500
SmithKline Beecham PLC ADR ......................... 200,000 12,512,500
------------
28,850,000
PHOTOGRAPHY/IMAGING - 1.3%
Xerox Corporation .................................. 120,000 12,772,500
PUBLISHING - 0.9%
McGraw-Hill Companies, Inc. ........................ 110,000 8,366,875
PUBLISHING - NEWSPAPER - 2.4%
Gannett Company, Inc. .............................. 160,000 11,500,000
Tribune Company .................................... 165,000 11,632,500
------------
23,132,500
RAILROADS - 1.2%
Canadian Pacific, Ltd. ............................. 400,000 11,800,000
RETAIL - APPAREL - 1.0%
TJX Companies, Inc. ................................ 220,000 9,955,000
RETAIL - BUILDING SUPPLIES - 1.6%
Home Depot, Inc. ................................... 45,000 3,034,687
Sherwin-Williams Company ........................... 350,000 12,425,000
------------
15,459,687
RETAIL - DEPARTMENT STORES - 2.2%
Federated Department Stores, Inc.* ................. 200,000 10,362,500
Proffitt's, Inc.* .................................. 300,000 10,875,000
------------
21,237,500
RETAIL - DRUG STORES - 2.3%
Rite Aid Corporation ............................... 340,000 11,645,000
Walgreen Company ................................... 300,000 10,556,250
------------
22,201,250
RETAIL - FOOD CHAINS - 2.1%
Kroger Company* .................................... 175,000 8,082,813
Safeway, Inc.* ..................................... 340,000 12,558,750
------------
20,641,563
RETAIL - GENERAL MERCHANDISE - 0.5%
Dayton Hudson Corporation .......................... 60,000 5,280,000
RETAIL - SPECIALTY - 2.1%
Payless ShoeSource, Inc.* .......................... 225,000 16,931,250
Woolworth Corporation* ............................ 120,000 3,000,000
------------
19,931,250
SERVICES - ADVERTISING/MARKETING - 1.7%
Omnicom Group, Inc. ................................ 340,000 16,001,250
SERVICES - COMMERCIAL & CONSUMER - 1.1%
Viad Corporation ................................... 450,000 10,912,500
TELECOMMUNICATIONS - LONG DISTANCE - 1.1%
WorldCom, Inc.* .................................... 250,000 10,765,625
WASTE MANAGEMENT - 0.7%
U.S.A. Waste Service, Inc.* ........................ 160,000 7,130,000
------------
Total common stocks - 96.1% ...................................... 921,517,032
Cash and other assets, less liabilities - 3.9% ................... 37,331,498
------------
Total net assets - 100% .......................................... $958,848,530
============
See accompanying notes.
23
<PAGE>
SCHEDULE OF INVESTMENTS
March 31, 1998
(Unaudited)
SECURITY EQUITY FUND - GLOBAL SERIES
NUMBER OF MARKET
COMMON STOCKS SHARES VALUE
- --------------------------------------------------------------------------------
AUSTRALIA - 3.8%
Foster's Brewing Group, Ltd. ....................... 281,600 $ 614,390
QBE Insurance Group, Ltd. .......................... 60,031 262,745
Telestra Corporation, Ltd.* ........................ 170,000 438,545
------------
1,315,680
AUSTRIA - 1.6%
Boehler-Uddeholm AG ................................ 3,300 223,707
Wienerberger Baustoffindustrie AG .................. 1,530 314,920
------------
538,627
BELGIUM - 1.0%
Electrabel S.A ..................................... 1,370 349,064
CANADA - 5.9%
Bombardier, Inc. "B" ............................... 13,100 322,864
Chapters, Inc.* .................................... 800 17,917
Hudson's Bay Company ............................... 7,800 164,542
Imax Corporation ADR* .............................. 28,800 817,200
Tarragon Oil and Gas, Ltd.* ........................ 24,600 167,790
Yogen Fruz World-Wide Inc.* ........................ 76,230 541,387
------------
2,031,700
CHILE - 0.5%
Banco Santander ADR ................................ 11,100 156,094
FRANCE - 6.5%
Alcatel Alsthom .................................... 2,070 388,562
AXA-UAP ............................................ 3,400 350,114
Banque Nationale De Paris .......................... 4,500 349,719
Elf Aquitaine S.A. ADR ............................. 8,500 550,375
Sidel S.A .......................................... 3,720 270,188
Societe Generale-A ................................. 1,700 340,237
------------
2,249,195
GERMANY - 3.6%
Allianz AG ......................................... 1,170 351,442
Allianz AG Rights .................................. 1,850 9,153
Deutsche Bank AG ................................... 7,700 577,291
Hoechst AG ......................................... 2,500 97,400
Rofin-Sinar Technologies
Inc. ADR* ........................................ 11,300 217,525
------------
1,252,811
GREECE - 1.0%
Ergo Bank S.A ...................................... 4,800 343,747
HONG KONG - 1.6%
China Resources Enterprises, Ltd. .................. 66,000 133,737
China Telecommunications, Ltd.* .................... 132,000 267,473
JCG Holdings, Ltd. ................................. 320,000 164,170
------------
565,380
HUNGARY - 0.3%
Zalakeramia Rt ..................................... 1,800 88,608
IRELAND - 3.8%
Allied Irish Banks PLC ............................. 31,700 388,961
Elan Corporation PLC ADR ........................... 9,600 620,400
Ryanair Holdings PLC ............................... 41,900 310,292
------------
1,319,653
ITALY - 1.1%
Telecom Italia SpA ................................. 47,100 371,168
JAPAN - 5.9%
Acom Company, Ltd. ................................. 3,500 174,539
Amway Japan, Ltd. .................................. 7,300 109,485
Asahi Diamond Industry
Company, Ltd. .................................... 22,000 105,586
Benesse Corporation ................................ 5,000 139,856
Bunka Shutter Company Ltd. ......................... 44,000 130,992
Daiwa House Industry
Company, Ltd. .................................... 23,000 168,165
Doutor Coffee Company, Ltd. ........................ 6,500 153,542
Maruko Company, Ltd. ............................... 2,200 12,703
Mos Food Service Inc. .............................. 18,000 233,519
National House Industrial
Company, Ltd. .................................... 14,000 118,634
Paris Miki Inc. .................................... 3,600 51,023
Snow Brand Milk Products
Company, Ltd. .................................... 48,000 160,179
Sony Corporation ................................... 2,300 194,899
Tiemco, Ltd. ....................................... 3,300 43,307
York-Benimaru Company,
Ltd .............................................. 12,000 220,471
------------
2,016,900
MALAYSIA - 2.2%
Austral Enterprises Berhad ......................... 119,000 147,773
Kuala Lumpur Kepong Berhad ......................... 71,000 170,677
Leader Universal Holdings Berhad ................... 107,000 49,680
Magnum Corporation Berhad .......................... 451,000 386,580
------------
754,710
NETHERLANDS - 0.2%
Koninklijke Ahrend Group N.V ....................... 1,600 56,642
NORWAY - 1.4%
Saga Petroleum ASA "A" ............................. 27,800 494,083
PHILIPPINES - 0.5%
C&P Homes, Inc. .................................... 1,397,450 125,369
Ionics Circuit, Inc. ............................... 111,800 58,261
------------
183,630
See accompanying notes.
24
<PAGE>
SCHEDULE OF INVESTMENTS
March 31, 1998
(Unaudited)
SECURITY EQUITY FUND - GLOBAL SERIES (continued)
NUMBER OF MARKET
COMMON STOCKS (continued) SHARES VALUE
- --------------------------------------------------------------------------------
SINGAPORE - 1.0%
Cerebos Pacific, Ltd. .............................. 68,000 $ 160,847
Keppek Fels, Ltd. .................................. 47,000 131,546
Mandarin Oriental International,
Ltd .............................................. 60,000 48,000
------------
340,393
SPAIN - 0.5%
Adolfo Dominguez S.A.* ............................. 5,400 183,313
SWEDEN - 4.9%
Castellum AB* ...................................... 45,900 479,424
Fastighets AB Hufvudstaden "A" ..................... 52,400 209,095
Industrial & Financial
Systems "B"* ..................................... 41,500 342,621
Skandinaviska Enskilda Banken ...................... 13,700 199,649
Swedish Match AB ................................... 134,200 446,535
------------
1,677,324
SWITZERLAND - 4.3%
Nestle S.A ......................................... 186 355,411
Novartis AG ........................................ 184 325,640
Saurer AG .......................................... 440 455,446
Schweizerische
Lebensversicherungs-und
Rentenstalt ...................................... 410 346,668
------------
1,483,165
UNITED KINGDOM, - 16.6%
Aegis Group PLC .................................... 222,500 314,847
Beazer Group PLC ................................... 15,300 53,292
Cadbury Schweppes PLC .............................. 25,000 341,200
Capita Group PLC ................................... 41,900 315,395
D.F.S. Furniture Company PLC ....................... 29,600 172,745
George Wimpey PLC .................................. 212,000 457,970
Glaxo Wellcome PLC ................................. 10,700 284,183
Harvey Nichols PLC ................................. 22,800 91,252
J.D. Wetherspoon PLC ............................... 36,800 207,677
Oriflame International S.A ......................... 12,000 86,811
PizzaExpress PLC ................................... 19,900 275,094
Polypipe PLC ....................................... 83,700 236,877
Provident Financial PLC ............................ 29,600 469,163
Regent Inns PLC .................................... 61,500 384,145
Rio Tinto PLC ...................................... 13,800 185,569
Royal Bank of Scotland Group PLC ................... 21,700 336,316
Tomkins PLC ........................................ 69,000 419,148
Vodafone Group PLC ................................. 41,800 435,739
Whitbread PLC ...................................... 34,900 648,723
------------
5,716,146
UNITED STATES - 25.0%
Ace Ltd. ........................................... 3,900 146,981
AlliedSignal, Inc. ................................. 3,100 130,200
B.J. Services Company* ............................. 3,800 138,463
Bell Atlantic Corporation .......................... 1,300 133,250
Bristol-Myers Squibb Company ....................... 1,000 104,312
Burlington Northern Santa Fe
Corporation ...................................... 1,500 156,000
Caribiner International Inc.* ...................... 3,700 142,450
Case Corporation ................................... 2,400 163,500
Cit Group Inc., The ................................ 4,200 137,025
Computer Associates
International, Inc. .............................. 2,800 161,700
Conseco, Inc. ...................................... 1,800 101,925
Costco Companies, Inc.* ............................ 2,300 123,050
Cymer, Inc.* ....................................... 4,500 90,844
Dana Corporation ................................... 3,300 192,019
Data General Corporation* .......................... 7,400 130,887
Dover Corporation .................................. 2,800 106,400
EMC Corporation* ................................... 3,600 136,125
Emerson Electric Company ........................... 2,000 130,375
Equity Residential Properties Trust ................ 2,600 130,650
Espirito Santo Financial Group ..................... 10,300 269,731
EXEL, Ltd. ......................................... 1,800 139,500
Fannie Mae ......................................... 2,000 126,500
Fort James Corporation ............................. 2,800 128,275
Gap, Inc. .......................................... 2,950 132,750
General Electric Company ........................... 2,300 198,231
Global Industries, Ltd.* .......................... 9,700 197,638
GTE Corporation .................................... 2,600 155,675
Ingersoll-Rand Company ............................. 3,250 155,797
J.P. Foodservice, Inc.* ............................ 4,700 173,019
Marsh and Mclennan
Companies, Inc. .................................. 1,500 130,969
Mobil Corporation .................................. 1,800 137,925
Nabisco Holdings Cl.A .............................. 3,000 140,625
NAC Re Corporation ................................. 3,000 157,313
NationsBank Corporation ............................ 1,900 138,581
Oxford Health Plans, Inc.* ......................... 6,500 97,094
Pepsico, Inc. ...................................... 3,900 166,481
Perkin-Elmer Corporation ........................... 2,000 144,625
Pfizer, Inc. ....................................... 2,100 209,344
Pharmacia & Upjohn, Inc. ........................... 4,200 183,750
Procter & Gamble Company, The ...................... 2,000 168,750
Rite Aid Corporation ............................... 4,700 160,975
Safeway, Inc.* ..................................... 4,800 177,300
See accompanying notes.
25
<PAGE>
SCHEDULE OF INVESTMENTS
March 31, 1998
(Unaudited)
SECURITY EQUITY FUND - GLOBAL SERIES (continued)
PRINCIPAL
AMOUNT OR
NUMBER OF MARKET
COMMON STOCKS (continued) SHARES VALUE
- --------------------------------------------------------------------------------
UNITED STATES, (continued)
Structural Dynamics
Research Corporation* ............................ 6,000 $ 149,250
Sungard Data Systems, Inc.* ........................ 4,800 176,700
Teva Pharmaceutical
Industries, Ltd. ................................. 14,100 602,776
Texaco, Inc. ....................................... 2,800 168,700
TJX Companies, Inc. ................................ 3,300 149,325
Tyco International, Ltd. ........................... 2,800 152,950
Union Planters Corporation ......................... 2,600 161,688
United Healthcare Corporation ...................... 1,800 116,550
Valero Energy Corporation* ......................... 4,900 163,538
Walt Disney Company, The ........................... 1,200 128,100
Warner-Lambert Company ............................. 900 153,281
Williams Companies, Inc., The ...................... 4,800 153,600
Zale's Corporation* ................................ 4,500 129,938
------------
8,653,400
------------
Total common stocks - 93.2% ...................................... 32,141,433
PREFERRED STOCKS
- ----------------
GERMANY - 0.8%
Sto Ag Vorzug ...................................... 758 278,716
U.S. GOVERNMENT SECURITIES
- --------------------------
U.S. TREASURY STRIPS - 4.5%
0.00% - 2023 ..................................... $ 7,000,000 1,562,610
------------
Total investments - 98.5% ........................................ 33,982,759
Cash and other assets, less
liabilities - 1.5% ............................................. 508,285
------------
Total net assets - 100% .......................................... $ 34,491,044
============
INVESTMENT CONCENTRATION
- ------------------------
At March 31, 1998, Global Series' investment concentration, by
industry, was as follows:
Banking....................................................... 10.0%
Capital Equipment ............................................ 8.7%
Construction and Housing ..................................... 7.0%
Consumer Durables ............................................ 6.7%
Consumer Nondurables ......................................... 8.2%
Electrical and Electronics ................................... 6.6%
Energy Sources ............................................... 7.5%
Financial Services ........................................... 9.1%
Healthcare ................................................... 6.2%
Materials .................................................... 5.6%
Merchandising ................................................ 6.5%
Multi-Industry ............................................... 0.8%
Real Estate .................................................. 2.4%
Services ..................................................... 2.9%
Telecommunications ........................................... 6.9%
Trade ........................................................ 2.0%
Transportation ............................................... 1.4%
Cash and other assets, less liabilities ...................... 1.5%
-----
100.0%
=====
SECURITY EQUITY FUND - ASSET ALLOCATION SERIES
PRINCIPAL MARKET
CORPORATE BONDS AMOUNT VALUE
- --------------------------------------------------------------------------------
BANKING - 0.6%
Abbey National Place, 6.69% - 2005 ................. $ 25,000 $ 25,562
Bank of New York, 6.50% - 2003 ..................... 25,000 25,250
------------
50,812
BROKERAGE - 0.4%
Merrill Lynch & Company, Inc.,
8.00% - 2007 ..................................... 25,000 27,750
CONSUMER CYCLICAL - 2.7%
Lowe's Companies, Inc.,
6.70% - 2007 ..................................... 25,000 25,500
MGM Grand, Inc., 6.95% - 2005 ...................... 10,000 9,800
Mirage Resorts, Inc., 6.625% - 2005 ................ 10,000 9,863
News American Holdings,
8.625% - 2003 .................................... 25,000 27,375
Rite Aid Corporation, 6.70% - 2001 ................. 125,000 127,031
------------
199,569
CONSUMER NONCYCLICAL - 0.7%
Archer-Daniels-Midland Company,
8.875% - 2011 .................................... 25,000 30,313
Cargill, Inc., 6.15% - 2008 ........................ 25,000 24,656
------------
54,969
INSURANCE - 0.4%
Hartford Life, Inc., 7.10% - 2007 .................. 25,000 25,781
NATURAL GAS - 0.3%
MCN Investment Corporation,
6.32% - 2003 ..................................... 25,000 24,938
TELECOMMUNICATIONS - 0.4%
Southwestern Bell,
6.625% - 2003 .................................... 25,000 25,594
TRANSPORTATION - 2.1%
Hertz Corporation, 7.00% - 2004 ................... 150,000 153,937
------------
Total corporate bonds - 7.6% ..................................... 563,350
See accompanying notes.
26
<PAGE>
SCHEDULE OF INVESTMENTS
March 31, 1998
(Unaudited)
SECURITY EQUITY FUND - ASSET ALLOCATION SERIES (continued)
PRINCIPAL
AMOUNT OR
NUMBER OF MARKET
TRUST PREFERRED SECURITIES(1) SHARES VALUE
- --------------------------------------------------------------------------------
BANKING - 0.4%
Washington Mutual Capital,
8.375% - 2027 .................................... $ 25,000 $ 27,125
FINANCE - 0.3%
SI Financing Trust I, 9.50% - 2026 ................ 910 24,513
------------
Total trust preferred securities - 0.7% .......................... 51,638
COMMON STOCKS
- -------------
ALUMINUM - 1.1%
Alcan Aluminum, Ltd. ............................... 600 18,750
Alumax, Inc. ....................................... 600 27,113
Aluminum Company of America ........................ 300 20,644
Reynolds Metals Company ............................ 300 18,431
------------
84,938
BIOTECHNOLOGY - 1.8%
Amgen, Inc.* ....................................... 600 36,525
Centocor, Inc.* .................................... 700 31,237
Chiron Corporation* ................................ 1,600 33,500
Genome Therapeutics Corporation* ................... 3,500 30,188
------------
131,450
BROADCAST MEDIA - 2.0%
TCI Satellite Entertainment, Inc.* ................. 240 1,710
Tele-Communications, Inc.* ......................... 2,400 74,625
U.S. West Media Group* ............................. 2,000 69,500
------------
145,835
COMMUNICATION EQUIPMENT - 2.2%
ADC Telecommunications, Inc.* ...................... 800 22,050
Allen Telecom, Inc.* ............................... 900 14,175
Andrew Corporation* ................................ 700 13,869
Lucent Technologies, Inc. .......................... 200 25,575
Motorola, Inc. ..................................... 400 24,250
Northern Telecom, Ltd. ............................. 400 25,850
QUALCOMM, Inc.* .................................... 300 16,050
Tellabs, Inc.* ..................................... 300 20,137
------------
161,956
COMPUTERS-NETWORKING - 2.0%
Bay Networks, Inc.* ................................ 1,500 40,688
Cabletron Systems, Inc.* .......................... 1,500 21,844
Cisco Systems, Inc.* ............................... 750 51,281
3Com Corporation* .................................. 1,000 35,937
------------
149,750
COMPUTERS-PERIPHERALS - 2.4%
EMC Corporation* ................................... 1,000 37,813
Iomega Corporation* ................................ 2,000 13,750
Lexmark International Group, Inc.* ................. 800 36,100
Quantum Corporation* ............................... 800 17,050
Read-Rite Corporation* ............................. 700 9,669
Seagate Technology, Inc.* .......................... 800 20,200
Storage Technology Corporation* .................... 600 45,637
------------
180,219
CONSUMER FINANCE - 1.7%
Capital One Financial Corporation .................. 200 15,775
Contifinancial Corporation* ........................ 800 24,400
Greentree Financial Corporation .................... 900 25,594
Household International, Inc. ...................... 200 27,550
MBNA Corporation ................................... 900 32,231
------------
125,550
ENTERTAINMENT - 1.3%
Time Warner, Inc. .................................. 600 43,200
Viacom, Inc.* ...................................... 600 31,875
The Walt Disney Company ............................ 200 21,350
------------
96,425
EQUIPMENT-SEMICONDUCTORS - 1.4%
Applied Materials, Inc.* .......................... 700 24,719
KLA-Tencor Corporation* ............................ 600 22,950
Novellus Systems, Inc.* ............................ 700 30,275
Teradyne, Inc.* .................................... 600 24,037
------------
101,981
FOOTWEAR - 1.2%
Nike, Inc. ......................................... 500 22,125
Nine West Group, Inc.* ............................. 800 19,700
Reebok International, Ltd.* ........................ 800 24,400
Wolverine World Wide, Inc. ......................... 900 25,425
------------
91,650
GAMING & LOTTERY - 2.4%
Circus Circus Enterprises, Inc.* ................... 1,400 29,400
Harrah's Entertainment, Inc.* ...................... 2,100 51,581
International Game Technology ...................... 2,300 57,500
Mirage Resorts, Inc.* .............................. 1,750 42,547
------------
181,028
GOLD COMPANIES - 4.1%
Barrick Gold Corporation ........................... 2,400 51,900
Battle Mountain Gold Company ....................... 8,200 52,275
Hecla Mining Company* .............................. 3,600 23,850
Homestake Mining Company ........................... 5,000 54,375
Newmont Mining Corporation ......................... 1,800 55,012
Placer Dome, Inc. .................................. 3,800 50,113
Stillwater Mining Company* ......................... 700 17,719
------------
305,244
See accompanying notes.
27
<PAGE>
SCHEDULE OF INVESTMENTS
March 31, 1998
(Unaudited)
SECURITY EQUITY FUND - ASSET ALLOCATION SERIES (continued)
PRINCIPAL
AMOUNT OR
NUMBER OF MARKET
COMMON STOCKS (continued) SHARES VALUE
- --------------------------------------------------------------------------------
LONG-TERM HEALTH CARE - 2.2%
Beverly Enterprises, Inc.* ......................... 1,100 $ 14,644
Genesis Health Ventures, Inc.* ..................... 1,000 28,125
HEALTHSOUTH Corporation* .......................... 1,551 43,525
Health Care and Retirements
Corporation* ..................................... 500 21,469
Integrated Health Services, Inc. ................... 700 27,519
Mariner Health Group, Inc.* ........................ 1,450 24,831
------------
160,113
MANAGED HEALTH CARE - 1.6%
Express Scripts, Inc.* ............................. 500 42,391
First Health Group Corporation* .................... 500 27,125
Oxford Health Plans* ............................... 350 5,228
Pacificare Health Systems, Inc.* ................... 250 18,812
United Healthcare Corporation ...................... 400 25,900
------------
119,456
LEISURE TIME PRODUCTS - 0.8%
Brunswick Corporation .............................. 1,200 41,850
Callaway Golf Company .............................. 700 20,300
------------
62,150
RESTAURANTS - 1.8%
Applebees International, Inc. ...................... 600 13,875
Brinker International, Inc.* ....................... 900 19,688
CKE Restaurants, Inc. .............................. 470 17,272
Cracker Barrel Old Country Store,
Inc .............................................. 600 24,000
McDonald's Corporation ............................. 400 24,000
Outback Steakhouse, Inc.* .......................... 400 15,650
Wendy's International, Inc. ........................ 1,000 22,313
------------
136,798
RETAIL - SPECIALTY - 2.5%
AutoZone, Inc.* .................................... 900 30,487
Claire's Stores .................................... 1,300 29,819
OfficeMax, Inc.* ................................... 1,700 30,387
The Pep Boys - Manny, Moe & Jack ................... 900 20,869
Staples, Inc.* ..................................... 1,350 31,303
Toys "R" Us, Inc.* ................................. 700 21,044
Viking Office Products, Inc.* ...................... 1,000 23,250
------------
187,159
TELECOMMUNICATIONS - 0.9%
Ameritech Corporation .............................. 300 14,831
Bell Atlantic Corporation .......................... 107 10,968
Bellsouth Corporation .............................. 200 13,512
GTE Corporation .................................... 200 11,975
SBC Communication, Inc. ............................ 384 16,752
------------
68,038
TRUCKING - 2.1%
FDX Corporation* ................................... 560 39,830
Rollins Truck Leasing Corporation .................. 2,250 31,078
Ryder System, Inc. ................................. 650 24,700
USFreightways Corporation .......................... 800 28,800
Werner Enterprises, Inc. ........................... 1,100 28,050
------------
152,458
------------
Total common stocks - 35.5% ...................................... 2,642,198
U.S. GOVERNMENT AGENCIES
- ------------------------
FEDERAL HOME LOAN MORTGAGES - 2.0%
7.00% - 2020 ..................................... $ 100,000 100,465
7.00% - 2021 ..................................... $ 50,000 50,024
------------
150,489
FEDERAL NATIONAL MORTGAGE ASSOCIATION - 3.0%
6.50% - 2018 ..................................... $ 50,000 49,572
6.95% - 2020 ..................................... $ 130,000 129,714
7.50% - 2020 ..................................... $ 40,000 40,702
------------
219,988
U.S. TREASURY NOTE - 4.6%
6.50% - 2006 ..................................... $ 325,000 340,831
U.S. TREASURY BOND - 1.3%
6.00% - 2026 ..................................... $ 100,000 99,929
------------
Total U.S. government & government
agencies - 10.9% ............................................... 811,237
REAL ESTATE INVESTMENT TRUSTS
- -----------------------------
American Health Properties, Inc. ................... 700 18,550
Avalon Properties, Inc. ............................ 600 17,400
CBL & Associates Properties, Inc. .................. 700 17,150
Duke Realty Investments, Inc. ...................... 900 21,937
Equity Residential Properties Trust ................ 400 20,100
Federal Realty Investment Trust .................... 650 15,966
General Growth Property, Inc. ...................... 550 20,281
Glimcher Realty Trust .............................. 850 18,594
Health Care Property Investors, Inc. ............... 500 18,469
Kimco Realty Corporation ........................... 600 21,225
Merry Land & Investment Company .................... 800 17,900
New Plan Realty Trust .............................. 800 20,100
Post Properties, Inc. .............................. 450 17,972
Public Storage, Inc. ............................... 600 18,525
Security Capital Pacific Trust ..................... 800 19,250
Security Capital Pacific Trust,
Warrants - 1998 .................................. 42 139
Simon Debartolo Group, Inc. ........................ 600 20,550
Spieker Properties, Inc. ........................... 500 20,625
United Realty Trust Dominion ....................... 1,200 17,400
See accompanying notes.
28
<PAGE>
SCHEDULE OF INVESTMENTS
March 31, 1998
(Unaudited)
SECURITY EQUITY FUND - ASSET ALLOCATION SERIES (continued)
NUMBER OF MARKET
REAL ESTATE INVESTMENT TRUSTS (continued) SHARES VALUE
- --------------------------------------------------------------------------------
Washington Real Estate Investment Trust ............ 1,000 $ 17,188
Weingarten Realty Investors ........................ 400 17,900
------------
Total real estate investment trusts - 5.1% ....................... 377,221
FOREIGN STOCKS
- --------------
BELGIUM - 4.1%
Cementbedrijven Cimenteries ........................ 200 19,345
Delhaize-Le Lion ................................... 300 19,266
Electrabel ......................................... 150 38,219
Fortis AG .......................................... 200 55,572
Gevaert NV ......................................... 200 11,193
Gevaert NV, Warrants - 2000 ........................ 400 3,009
Petrofina SA ....................................... 150 54,163
Royale Belgium ..................................... 130 45,578
Solvay SA .......................................... 800 60,605
------------
306,950
DENMARK - 4.2%
A/S Dampskibsselskabet Svendborg ................... 1 68,018
A/S Forsikringsselskabet Codan ..................... 45 7,979
Akieselskabet Potagua .............................. 140 4,389
Bang & Olufsen Holding A/S ......................... 82 5,176
BG Bank A/S ........................................ 133 8,113
Carlsberg A/S ...................................... 197 12,756
Cheminova Holding A/S .............................. 214 5,403
D/S Norden A/S ..................................... 35 3,830
Danisco A/S ........................................ 244 16,025
Danske Traelast .................................... 54 5,362
Den Danske Bank .................................... 245 32,021
Finansierings Instituttet for Industri
og Handvaerk A/S ................................. 189 4,413
Finansieringsselskabet Gefion A/S .................. 240 4,732
FLS Industries A/S ................................. 212 6,015
ISS International Service System A/S* .............. 148 7,075
J. Lauritzen Holdings A/S* ......................... 89 9,216
Jyske Bank A/S ..................................... 61 7,052
Korn-OG Foderstof Kompagniet A/S ................... 153 4,015
Novo Nordisk A/S ................................... 263 44,768
Radiometer A/S ..................................... 94 4,667
Ratin A/S* ......................................... 88 15,604
Sophus Berendsen A/S* .............................. 88 3,420
Sydbank A/S ........................................ 108 5,362
Tele Danmark A/S ................................... 94 8,534
Topdanmark A/S* .................................... 30 5,320
Tryg-Baltica Forsikring A/S ........................ 128 10,064
------------
309,329
GERMANY - 10.1%
Allianz AG ......................................... 360 108,136
Allianz AG, Rights - 1998 .......................... 360 1,781
BASF AG ............................................ 1,081 47,815
Bayer AG ........................................... 735 33,445
Bayerische Motoren Werke
(BMW) AG ......................................... 100 112,581
Continental AG ..................................... 202 5,150
Daimler-Benz AG .................................... 450 41,415
Degussa AG ......................................... 140 7,949
Deutsche Bank AG ................................... 692 51,881
Deutsche Telekom AG ................................ 2,900 63,431
Dresdner Bank AG ................................... 611 27,885
Friedrich Grohe AG- Vorzugsak ...................... 7 1,987
Heidelberger Zement AG ............................. 86 6,696
Hochtief AG ........................................ 180 7,329
Linde AG ........................................... 14 10,099
Merck KGAA ......................................... 187 7,897
Muenchener Rueckversicherungs-
Gesellschaft AG .................................. 70 30,205
Preussag AG ........................................ 72 24,644
SAP AG ............................................. 122 48,554
Siemens AG ......................................... 1,038 69,206
Veba AG ............................................ 634 45,202
------------
753,288
ITALY - 8.1%
Assicurazioni Gererali ............................. 2,475 76,305
Banco Commerciale Italiane ......................... 11,000 54,883
Edison SPA ......................................... 4,000 33,672
ENI SPA ............................................ 5,100 34,749
Fiat SPA ........................................... 7,700 32,124
Ina - Instituto Naz Assicuraz ...................... 16,638 53,943
Instituto Mobiliare Italiano ....................... 3,208 52,092
Mediobanca ......................................... 3,500 51,073
Montedison SPA ..................................... 29,600 43,599
Telecom Italia Mobile SPA .......................... 18,821 101,133
Telecom Italia- SPA ................................ 8,330 65,644
------------
599,217
JAPAN - 9.9%
All Nippon Airways Company, Ltd. ................... 2,000 10,634
Asahi Glass Company, Ltd. .......................... 2,000 11,068
Bank of Tokyo-Mitsubishi, Ltd. ..................... 3,000 36,445
Chubu Electric Power Company, Inc. ................. 400 5,969
Fuji Bank, Ltd. .................................... 1,000 5,999
Fujitsu, Ltd. ...................................... 2,000 20,847
Hitachi, Ltd. ...................................... 3,000 21,822
Industrial Bank of Japan, Ltd. ..................... 2,000 13,648
Kansai Electric Power Company ...................... 1,400 23,517
See accompanying notes.
29
<PAGE>
SCHEDULE OF INVESTMENTS
March 31, 1998
(Unaudited)
SECURITY EQUITY FUND - ASSET ALLOCATION SERIES (continued)
NUMBER OF MARKET
FOREIGN STOCKS (continued) SHARES VALUE
- --------------------------------------------------------------------------------
JAPAN (continued)
Kawasaki Heavy Industries .......................... 4,000 $ 8,009
Kawasaki Steel Corporation ......................... 5,000 7,349
Kinki Nippon Railway Company, Ltd. ................. 2,000 10,919
Kirin Brewery Company, Ltd. ........................ 1,000 8,924
Kyocera Corporation ................................ 100 5,249
Marubeni Corporation ............................... 3,000 7,896
Marui Company, Ltd. ................................ 1,000 15,373
Matsushita Electric Industrial
Company, Ltd. .................................... 2,000 32,096
Mitsubishi Corporation ............................. 4,000 32,696
Mitsubishi Estate Company, Ltd. .................... 1,000 9,749
Mitsubishi Heavy
Industrial, Ltd. ................................. 4,000 15,208
Mitsubishi Motors Corporation ...................... 2,000 5,549
Mitsubishi Trust & Banking
Corporation ...................................... 1,000 9,824
Mitsui Fudosan Company, Ltd. ....................... 1,000 9,524
NEC Corporation .................................... 2,000 20,097
Nippon Steel Corporation ........................... 6,000 9,629
Nissan Motor Company, Ltd. ......................... 2,000 7,649
Normura Securities Company, Ltd. ................... 2,000 23,547
NSK, Ltd. .......................................... 4,000 15,748
Sekisui House, Ltd. ................................ 4,000 32,696
Sharp Corporation .................................. 2,000 13,648
Shin-Etsu Chemical Company ......................... 1,000 19,797
Sony Corporation ................................... 100 8,474
Sumitomo Bank, Ltd. ................................ 4,000 40,795
Sumitomo Chemical Company .......................... 6,000 17,278
Tokio Marine & Fire
Insurance Company ................................ 2,000 22,347
Tokyo Electric Power Company ....................... 2,700 51,023
Tokyu Corporation .................................. 4,000 16,198
Toshiba Corporation ................................ 3,000 12,148
Toyoda Automatic Loom Works, Ltd. .................. 1,000 17,098
Toyota Motor Corporation ........................... 3,000 79,864
------------
736,350
------------
Total foreign stocks - 36.4% ................................... 2,705,134
TEMPORARY CASH INVESTMENTS
- --------------------------
MONEY MARKET FUND - 0.2%
Chase Master Note Program .......................... 12,000 12,000
------------
Total investments - 96.4% ........................................ 7,162,778
Cash and other assets, less
liabilities - 3.6% ............................................. 263,922
------------
Total net assets - 100% .......................................... $ 7,426,700
============
SECURITY EQUITY FUND - SOCIAL AWARENESS SERIES
NUMBER OF MARKET
COMMON STOCKS SHARES VALUE
- --------------------------------------------------------------------------------
AIR FREIGHT - 0.3%
FDX Corporation* ................................... 500 $ 35,563
AUTO PARTS & EQUIPMENT - 1.1%
Snap-On, Inc. ...................................... 2,900 132,312
BANKS - MAJOR REGIONAL - 5.2%
Banc One Corporation ............................... 2,640 166,980
Bank of New York Company, Inc. ..................... 2,900 182,156
Northern Trust Corporation ......................... 2,600 194,350
Wachovia Corporation ............................... 1,300 110,256
------------
653,742
BANKS - MONEY CENTER - 1.1%
First Chicago NBD Corporation ...................... 1,500 132,188
BEVERAGES - SOFT DRINK - 4.2%
Coca-Cola Company .................................. 4,800 371,700
PepsiCo, Inc. ...................................... 3,600 153,675
------------
525,375
BROADCAST MEDIA - 1.4%
Comcast Corporation ................................ 2,500 88,281
Tele-Communications, Inc.* ......................... 2,900 90,172
------------
178,453
CHEMICALS - BASIC - 0.9%
Praxair, Inc. ...................................... 2,200 113,163
CHEMICALS - SPECIALTY - 0.8%
H.B. Fuller Company ................................ 900 53,888
Nalco Chemical Company ............................. 1,200 48,675
------------
102,563
COMMUNICATIONS EQUIPMENT - 0.9%
Tellabs, Inc.* ..................................... 1,700 114,112
COMPUTER HARDWARE - 2.7%
Compaq Computer Corporation ........................ 2,000 51,750
Hewlett-Packard Corporation ........................ 2,000 126,750
International Business
Machines Corporation ............................. 1,500 155,812
------------
334,312
COMPUTER SOFTWARE/SERVICES - 5.6%
BMC Software, Inc.* ................................ 1,900 159,244
Microsoft Corporation* ............................. 4,200 375,900
PeopleSoft, Inc.* .................................. 3,200 168,600
------------
703,744
CONTAINERS - METAL/GLASS - 0.9%
Crown Cork & Seal Company, Inc. .................... 2,100 112,350
See accompanying notes.
30
<PAGE>
SCHEDULE OF INVESTMENTS
March 31, 1998
(Unaudited)
SECURITY EQUITY FUND - SOCIAL AWARENESS SERIES (continued)
NUMBER OF MARKET
COMMON STOCKS (continued) SHARES VALUE
- --------------------------------------------------------------------------------
DATA PROCESSING SERVICES - 1.8%
Automatic Data Processing, Inc. .................... 1,600 $ 108,900
First Data Corporation ............................. 3,500 113,750
------------
222,650
DISTRIBUTION - FOOD & HEALTH - 0.9%
Cardinal Health, Inc. .............................. 1,350 119,053
ELECTRIC COMPANIES - 0.4%
New Century Energies, Inc. ......................... 1,000 50,375
ELECTRICAL EQUIPMENT - 0.6%
Hubbell, Inc. ...................................... 1,500 75,563
ELECTRONICS - SEMICONDUCTORS - 3.1%
Analog Devices, Inc.* .............................. 3,200 106,400
Intel Corporation .................................. 3,600 281,025
------------
387,425
ENTERTAINMENT - 2.1%
Time Warner, Inc. .................................. 1,700 122,400
Viacom, Inc.* ...................................... 2,600 139,750
------------
262,150
FINANCIAL-DIVERSE - 7.5%
American Express Company ........................... 1,600 146,900
American General Corporation ....................... 2,500 161,719
Fannie Mae ......................................... 2,600 164,450
Federal Home Loan
Mortgage Corporation ............................. 3,500 166,031
FINOVA Group, Inc. ................................. 2,800 164,850
SunAmerica, Inc. ................................... 3,000 143,625
------------
947,575
FOODS - 3.0%
Campbell Soup Company .............................. 2,000 113,500
Interstate Bakeries Corporation .................... 4,000 129,250
Ralston-Purina Group ............................... 1,200 127,200
Vlasic Foods International, Inc.* .................. 200 5,112
------------
375,062
HARDWARE & TOOLS - 0.5%
Black & Decker Corporation ......................... 1,200 63,675
HEALTH CARE - DIVERSE - 2.2%
Johnson & Johnson, Inc. ............................ 3,700 271,256
HOUSEHOLD FURNISHINGS & APPLIANCES - 1.4%
Leggett & Platt, Inc. .............................. 3,400 174,888
HOUSEHOLD PRODUCTS - 5.3%
Clorox Company ..................................... 1,800 154,238
Colgate-Palmolive Company .......................... 1,800 155,925
Kimberly-Clark Corporation ......................... 2,000 100,250
Procter & Gamble Company ........................... 3,000 253,125
------------
663,538
INSURANCE - LIFE/HEALTH - 1.2%
UNUM Corporation ................................... 2,800 154,525
INSURANCE - MULTI-LINE - 1.8%
American International Group, Inc. ................. 1,800 226,687
INSURANCE-PROPERTY - 1.2%
Chubb Corporation .................................. 2,000 156,750
LEISURE TIME PRODUCTS - 0.9%
Mattel, Inc. ....................................... 2,700 106,988
MACHINERY - DIVERSE - 1.1%
Deere & Company .................................... 2,200 136,263
MANUFACTURING - DIVERSIFIED - 1.0%
Illinois Tool Works, Inc. .......................... 1,900 123,025
MEDICAL PRODUCTS & SUPPLIES - 1.5%
ATL Ultrasound, Inc.* .............................. 1,100 55,963
Guidant Corporation ................................ 1,800 132,075
------------
188,038
NATURAL GAS - 0.5%
Consolidated Natural Gas Company ................... 1,100 63,456
NETWORKING - 1.4%
Cisco Systems, Inc.* ............................... 2,550 174,356
OIL - INTERNATIONAL - 0.7%
Amoco Corporation .................................. 1,000 86,375
OIL & GAS - EXPLORATION/PRODUCTION - 1.5%
Anadarko Petroleum Corporation ..................... 1,400 96,600
Apache Corporation ................................. 2,600 95,550
------------
192,150
PAPER & FOREST PRODUCTS - 0.2%
Mead Corporation ................................... 800 28,650
PHARMACEUTICALS - 5.0%
Forest Laboratories, Inc. * ........................ 1,800 67,500
Merck & Company, Inc. .............................. 2,500 320,938
Schering-Plough Corporation ........................ 3,000 245,063
------------
633,501
PHOTOGRAPHY/IMAGING - 0.8%
Xerox Corporation .................................. 900 95,794
RAILROADS - 0.5%
Norfolk Southern Corporation ....................... 1,700 63,537
See accompanying notes.
31
<PAGE>
SCHEDULE OF INVESTMENTS
March 31, 1998
(Unaudited)
SECURITY EQUITY FUND - SOCIAL AWARENESS SERIES (continued)
NUMBER OF MARKET
COMMON STOCKS (continued) SHARES VALUE
- --------------------------------------------------------------------------------
RESTAURANTS - 0.9%
McDonald's Corporation ............................. 1,800 $ 108,000
RETAIL - APPAREL - 1.2%
TJX Companies, Inc. ................................ 3,400 153,850
RETAIL - DEPARTMENT STORES - 2.2%
Kohl's Corporation* ................................ 1,500 122,625
Profitt's, Inc.* ................................... 4,400 159,500
------------
282,125
RETAIL - DISCOUNTERS - 1.7%
Dayton Hudson Corporation .......................... 2,400 211,200
RETAIL - DRUG STORES - 1.3%
Walgreen Company ................................... 4,800 168,900
RETAIL - FOOD CHAINS - 1.8%
American Stores Company ............................ 3,500 91,000
Kroger Company* .................................... 3,000 138,562
------------
229,562
RETAIL - GENERAL MERCHANDISE - 0.8%
Consolidated Stores Corporation* ................... 2,200 94,462
RETAIL - SPECIALTY - 0.7%
Woolworth Corporation* ............................. 3,500 87,500
SAVINGS & LOAN - 0.6%
H.F. Ahmanson & Company ............................ 1,000 77,500
SERVICES - ADVERTISING/MARKETING - 1.5%
Omnicom Group, Inc. ................................ 4,000 188,250
SERVICES - COMMERCIAL & CONSUMER - 1.6%
Apollo Group, Inc.* ................................ 1,200 57,750
Service Corporation International .................. 1,900 80,631
Sylvan Learning Systems, Inc.* ..................... 1,450 68,331
------------
206,712
SERVICES - COMPUTER SYSTEMS - 1.0%
SunGard Data Systems, Inc.* ........................ 3,500 128,844
TELECOMMUNICATION - LONG DISTANCE - 3.7%
AT&T Corporation ................................... 3,400 223,125
Sprint Corporation ................................. 1,100 74,456
WorldCom, Inc.* .................................... 4,000 172,250
------------
469,831
TELEPHONE - 5.2%
Ameritech Corporation .............................. 3,000 148,312
Bell Atlantic Corporation .......................... 1,200 123,000
BellSouth Corporation .............................. 2,700 182,419
SBC Communications, Inc. ........................... 4,600 200,675
------------
654,406
TRUCKING - 0.3%
Consolidated Freightways Corporation* .............. 2,500 $ 42,500
------------
Total common stocks - 97.7% ...................................... 12,284,824
Cash and other assets, less
liabilities - 2.3% ............................................. 283,197
------------
Total net assets - 100% .......................................... $ 12,568,021
============
SECURITY EQUITY FUND - VALUE SERIES
PREFERRED STOCKS
- ----------------
COMPUTER SOFTWARE - 2.1%
Unisys Corporation ................................. 7,000 $ 329,875
COMMON STOCKS
- -------------
AIR FREIGHT - 3.1%
Monaco Coach Corporation* .......................... 8,500 333,625
Old Dominion Freight Line, Inc.* ................... 8,500 145,562
------------
479,187
ALUMINUM - 0.6%
Easco, Inc. ........................................ 6,000 91,500
BANKS - MAJOR REGIONAL - 0.8%
Northern Trust Corporation ......................... 1,600 119,600
BUILDING MATERIALS - 0.9%
American Standard Companies,
Inc.* ............................................ 3,000 137,625
CHEMICALS - SPECIALTY - 0.6%
Material Sciences Corporation* ..................... 9,000 98,437
COMMUNICATION EQUIPMENT - 6.4%
Antec Corporation* ................................. 16,200 243,000
Comverse Technology, Inc.* ......................... 12,000 586,500
Transcrypt International, Inc.* 15,000 ............. 164,062
------------
993,562
COMPUTER HARDWARE - 1.2%
CHS Electronics, Inc.* ............................. 10,250 192,187
COMPUTER SOFTWARE/SERVICES - 10.7%
American Management
Systems, Inc.* ................................... 12,000 330,000
Computer Sciences Corporation* ..................... 8,800 484,000
DST Systems, Inc.* ................................. 5,400 283,837
Electronics For Imaging, Inc.* ..................... 11,100 288,600
Rational Software Corporation* ..................... 20,000 260,000
------------
1,646,437
See accompanying notes.
32
<PAGE>
SCHEDULE OF INVESTMENTS
March 31, 1998
(Unaudited)
SECURITY EQUITY FUND - VALUE SERIES (continued)
NUMBER OF MARKET
COMMON STOCKS (continued) SHARES VALUE
- --------------------------------------------------------------------------------
CONTAINERS - PACKAGING - 2.3%
Bemis Company, Inc. ................................ 3,100 $ 139,887
Sealright Company, Inc.* .......................... 15,600 214,500
------------
354,387
ELECTRICAL EQUIPMENT - 3.5%
AMP, Inc. .......................................... 4,400 192,775
Honeywell, Inc. .................................... 1,700 140,569
Hubbell, Inc. (Cl. B) .............................. 4,200 211,575
------------
544,919
ELECTRONICS - INSTRUMENTATION - 1.8%
E G & G, Inc. ...................................... 9,700 281,906
ENTERTAINMENT - 1.3%
Metromedia International Group, Inc. ............... 13,000 197,437
FOODS - 4.1%
Chiquita Brands International, Inc. ................ 24,000 328,500
Hormel Foods Corporation ........................... 8,000 310,500
------------
639,000
GAMING & LOTTERY - 1.4%
Circus Circus Enterprises, Inc.* ................... 10,000 210,000
HEALTH CARE - LONG TERM CARE - 2.5%
Integrated Health Services, Inc. ................... 10,000 393,125
HEALTH CARE - SPECIALIZED SERVICES - 1.3%
Allegiance Corporation ............................. 5,000 197,813
HOUSEHOLD FURNISHINGS & APPLIANCES - 4.7%
Leggett & Platt, Inc. .............................. 1,400 72,013
Meadowcraft, Inc.* ................................. 11,000 160,875
O'Sullivan Industries
Holdings, Inc.* .................................. 33,000 420,750
The Rival Company .................................. 4,000 69,000
------------
722,638
HOUSEHOLD PRODUCTS - 1.5%
Kimberly-Clark Corporation ......................... 4,500 225,563
INSURANCE - LIFE/HEALTH - 4.4%
AFLAC, Inc. ........................................ 6,000 379,500
John Alden Financial Corporation ................... 3,100 66,844
Unum Corporation ................................... 4,100 226,269
------------
672,613
INSURANCE - PROPERTY - 0.8%
Leucadia National Corporation ...................... 3,000 118,125
IRON & STEEL - 1.7%
Cleveland-Cliffs, Inc. ............................. 5,000 268,750
LEISURE TIME PRODUCTS - 4.5%
Callaway Golf Company .............................. 8,200 237,800
Hasbro, Inc. ....................................... 13,000 459,063
------------
696,863
MANUFACTURING - DIVERSIFIED - 1.0%
AEP Industries, Inc.* .............................. 4,500 154,125
MEDICAL PRODUCTS & SUPPLIES - 2.6%
ATL Ultrasound, Inc.* .............................. 3,700 188,238
Sunrise Medical, Inc.* ............................. 13,500 215,156
------------
403,394
NATURAL GAS - 2.6%
Equitable Resources, Inc. .......................... 12,000 399,000
OFFICE EQUIPMENT & SUPPLIES - 1.3%
Corporate Express, Inc.* .......................... 20,700 206,353
OIL - INTERNATIONAL - 2.7%
Tesoro Petroleum Corporation* ...................... 23,000 411,125
OIL & GAS - EXPLORATION & PRODUCTION - 6.1%
Apache Corporation ................................. 6,000 220,500
Forcenergy, Inc.* .................................. 12,800 339,200
YPF Sociedad Anonima ADR ........................... 11,000 374,000
------------
933,700
OIL & GAS - REFINING & MARKETING - 1.0%
Quaker State Corporation ........................... 8,000 150,500
PHARMACEUTICALS - 5.7%
Dura Pharmaceuticals, Inc.* ........................ 4,800 118,200
Mylan Laboratories, Inc. ........................... 26,000 598,000
Teva Pharmaceutical Industries,
Ltd. ADR ......................................... 3,800 162,450
------------
878,650
PUBLISHING - NEWSPAPER - 4.3%
E.W. Scripps Company ............................... 7,000 387,188
News Corporation, Ltd. ADR ......................... 10,000 269,375
------------
656,563
RAILROADS - 1.2%
RailAmerica, Inc.* ................................. 27,000 180,563
RESTAURANTS - 2.4%
The Cheesecake Factory* ............................ 11,000 366,438
RETAIL - APPAREL - 1.4%
Talbots, Inc. ...................................... 11,000 214,500
RETAIL - SPECIALTY - 0.8%
Payless ShoeSource, Inc.* .......................... 1,600 120,400
See accompanying notes.
33
<PAGE>
SCHEDULE OF INVESTMENTS
March 31, 1998
(Unaudited)
SECURITY EQUITY FUND - VALUE SERIES (continued)
NUMBER OF MARKET
COMMON STOCKS (continued) SHARES VALUE
- --------------------------------------------------------------------------------
SERVICES - COMMERCIAL & CONSUMER - 2.8%
Angelica Corporation ............................... 18,500 $ 426,656
TRUCKS & PARTS - 0.7%
Titan International, Inc. .......................... 6,000 115,500
------------
Total common stocks - 96.7% ...................................... 14,899,141
------------
Total investments - 98.8% ........................................ 15,229,016
Cash and other assets, less
liabilities - 1.2% ............................................. 189,692
------------
Total net assets - 100.0%......................................... $ 15,418,708
============
SECURITY EQUITY FUND - SMALL COMPANY SERIES
COMMON STOCKS
- -------------
AEROSPACE & DEFENSE - 0.8%
Orbital Sciences Corporation* ...................... 700 $ 31,413
AIRLINES - 2.1%
Midwest Express Holdings, Inc.* .................... 1,600 78,400
BIOTECHNOLOGY - 1.0%
Incyte Pharmaceuticals, Inc.* ...................... 800 37,400
BROADCAST MEDIA - 4.8%
Cox Radio, Inc.* ................................... 1,600 77,600
Heftel Broadcasting Corporation* ................... 300 13,425
Sinclair Broadcast Group, Inc.* .................... 1,600 92,200
------------
183,225
COMMUNICATION EQUIPMENT - 1.0%
DSET Corporation* .................................. 1,000 18,687
Omnipoint Corporation* ............................. 700 20,650
------------
39,337
COMPUTER SOFTWARE/SERVICES - 7.3%
CBT Group PLC ADR* ................................. 700 36,225
Documentum, Inc.* .................................. 800 43,300
Information Management
Resources, Inc.* ................................. 1,700 100,087
Legato Systems, Inc.* .............................. 600 35,625
Sykes Enterprises, Inc.* .......................... 600 12,600
Systems & Computer Technology
Corporation* ..................................... 500 20,625
Visio Corporation* ................................. 700 30,100
------------
278,562
DISTRIBUTION - FOOD & HEALTH - 2.2%
Hain Food Group, Inc.* ............................. 1,200 22,350
Suiza Foods Corporation* .......................... 1,000 61,500
------------
83,850
ELECTRICAL EQUIPMENT - 2.2%
Chicago Miniature Lamp, Inc.* ...................... 2,150 83,581
ELECTRONICS-SEMICONDUCTORS - 1.3%
Sipex Corporation* ................................. 1,100 36,300
Uniphase Corporation* .............................. 300 12,619
------------
48,919
FOODS - 2.2%
American Italian Pasta
Company (Cl.A)* .................................. 2,300 83,088
HEALTH CARE - LONG TERM CARE - 1.1%
Hanger Orthopedic Group, Inc.* ..................... 2,600 43,712
HEALTH CARE - MANAGED CARE - 1.2%
United Wisconsin Services, Inc. .................... 1,400 46,463
HEALTH CARE - SPECIALIZED SERVICES - 5.7%
ABR Information Services, Inc.* .................... 1,700 47,812
Advance Paradigm, Inc.* ............................ 1,800 71,325
Parexel International* ............................. 700 21,875
Physician Reliance Network, Inc.* .................. 2,800 38,500
Renal Care Group, Inc.* ............................ 1,000 38,000
------------
217,512
HOMEBUILDING - 1.6%
Centex Construction Products, Inc. ................. 1,700 61,944
HOUSEHOLD PRODUCTS - 0.5%
Central Garden & Pet Company* ...................... 500 19,531
INSURANCE-PROPERTY - 1.1%
Executive Risk, Inc. ............................... 600 42,750
IRON & STEEL - 1.4%
Oregon Steel Mills, Inc. ........................... 2,500 55,000
LEISURE TIME PRODUCTS - 0.9%
Speedway Motorsports, Inc.* ........................ 1,300 34,856
MANUFACTURING - DIVERSIFIED - 1.7%
MSC Industrial Direct Company,
Inc. (Cl.A)* ..................................... 1,200 65,025
MEDICAL PRODUCTS & SUPPLIES - 1.9%
Henry Schein, Inc.* ................................ 1,200 49,800
Ventana Medical Systems, Inc.* ..................... 900 23,963
------------
73,763
PHARMACEUTICALS - 2.9%
Amerisource Health Corporation* .................... 300 18,037
Biovail Corporation International* ................. 1,900 91,675
------------
109,712
See accompanying notes.
34
<PAGE>
SCHEDULE OF INVESTMENTS
March 31, 1998
(Unaudited)
SECURITY EQUITY FUND - SMALL COMPANY SERIES (continued)
NUMBER OF MARKET
COMMON STOCKS (continued) SHARES VALUE
- --------------------------------------------------------------------------------
REAL ESTATE INVESTMENT TRUSTS - 2.5%
Glenborough Realty Trust, Inc. ..................... 700 $ 20,388
Laser Mortgage Management, Inc. .................... 3,800 61,987
Patriot American Hospitality, Inc. ................. 500 13,500
------------
95,875
RESTAURANTS - 1.9%
Landry's Seafood Restaurants, Inc.* ................ 1,100 33,825
Papa John's International, Inc.* ................... 500 19,188
Schlotzsky's, Inc.* ................................ 900 21,037
------------
74,050
RETAIL APPAREL - 1.1%
Stage Stores, Inc.* ................................ 800 41,300
RETAIL - FOOD CHAINS - 4.3%
Dominick's Supermarkets, Inc.* ..................... 2,000 91,000
Wild Oats Market, Inc.* ............................ 2,100 74,813
------------
165,813
RETAIL - GENERAL MERCHANDISE - 2.0%
Linens 'N Things, Inc.* ............................ 1,400 76,912
RETAIL - SPECIALTY - 1.3%
Michaels Stores, Inc.* ............................. 1,300 48,588
SAVINGS & LOANS - 1.0%
Sterling Financial Corporation* .................... 1,500 39,000
SERVICES - ADVERTISING/MARKETING - 8.2%
Acxiom Corporation* ................................ 2,600 66,625
Boron, Lepore & Associates, Inc.* .................. 1,100 36,437
Lamar Advertising Company* ......................... 3,600 126,000
Metris Companies, Inc. ............................. 600 26,100
Universal Outdoor Holdings, Inc.* .................. 900 58,050
------------
313,212
SERVICES - COMMERCIAL & CONSUMER - 15.4%
CCC Information Services
Group, Inc.* ..................................... 1,200 33,000
CSG Systems International, Inc.* ................... 500 22,625
Data Processing Resources
Corporation* ..................................... 1,200 37,275
Integrated Electrical Services, Inc.* .............. 3,800 75,525
International Telecommunication
Data Systems, Inc.* .............................. 2,250 58,781
Lamalie Associates, Inc.* .......................... 1,600 35,600
Personnel Group of America, Inc.* .................. 2,800 63,700
Profit Recovery Group
International, Inc.* ............................. 2,400 51,900
Rent-Way, Inc.* .................................... 2,500 59,375
Romac International, Inc.* ......................... 3,900 107,250
Sylvan Learnings Systems, Inc.* .................... 900 42,413
------------
587,444
SERVICES - DATA PROCESSING - 3.9%
Billing Information Concepts
Corporation* ..................................... 3,000 77,812
Envoy Corporation* ................................. 1,700 73,100
------------
150,912
TELECOMMUNICATION - LONG DISTANCE - 6.4%
IDT Corporation* ................................... 1,200 45,000
IXC Communications, Inc.* .......................... 400 22,825
Metromedia Fiber Network,
Inc. (Cl.A)* ..................................... 2,000 67,250
Premiere Technologies, Inc.* ....................... 700 24,238
Saville Systems Ireland PLC ADR* ................... 1,200 61,500
Telegroup, Inc.* ................................... 1,200 24,300
------------
245,113
TEXTILES - APPAREL - 0.6%
Columbia Sportswear Company* ....................... 1,100 23,238
WASTE MANAGEMENT - 2.0%
Superior Services, Inc.* .......................... 2,400 74,850
------------
Total common stocks - 95.5% ...................................... 3,654,350
Cash and other assets, less
liabilities - 4.5% ............................................. 172,143
------------
Total net assets - 100.0% ........................................ $ 3,826,493
============
SECURITY ULTRA FUND
COMMON STOCKS
- -------------
AIR FREIGHT - 1.5%
Expeditors International of
Washington, Inc. ................................. 34,000 $ 1,457,750
BANKS - MAJOR REGIONAL - 3.1%
Northern Trust Corporation ......................... 26,000 1,943,500
State Street Corporation ........................... 15,500 1,054,969
------------
2,998,469
BIOTECHNOLOGY - 0.7%
Centocor, Inc.* .................................... 16,000 714,000
CHEMICALS - BASIC - 1.9%
Praxair, Inc. ...................................... 21,000 1,080,187
Solutia, Inc. ...................................... 23,900 711,025
------------
1,791,212
CHEMICALS - SPECIALTY - 1.7%
BetzDearborn, Inc. ................................. 6,000 338,625
See accompanying notes.
35
<PAGE>
SCHEDULE OF INVESTMENTS
March 31, 1998
(Unaudited)
SECURITY ULTRA FUND (continued)
NUMBER OF MARKET
COMMON STOCKS (continued) SHARES VALUE
- --------------------------------------------------------------------------------
CHEMICALS - SPECIALTY (CONTINUED)
M.A. Hanna Company ................................. 14,800 $ 361,675
Sigma-Aldrich Corporation .......................... 26,000 968,500
------------
1,668,800
COMMUNICATION EQUIPMENT - 5.7%
Comverse Technology, Inc.* ......................... 90,000 4,398,750
Transcrypt International, Inc.* .................... 100,000 1,093,750
------------
5,492,500
COMPUTER HARDWARE - 1.3%
CHS Electronics, Inc.* ............................. 68,500 1,284,375
COMPUTER SOFTWARE/SERVICES - 11.0%
America OnLine, Inc.* .............................. 22,800 1,557,525
American Management
Systems, Inc.* ................................... 83,000 2,282,500
Cambridge Technology Partners,
Inc.* ............................................ 26,000 1,288,625
Computer Sciences Corporation ...................... 22,000 1,210,000
Electronics for Imaging, Inc.* ..................... 36,000 936,000
Network Associates, Inc.* .......................... 23,000 1,523,750
Rational Software Corporation* ..................... 140,000 1,820,000
------------
10,618,400
COMPUTER SYSTEMS - SERVICES - 0.6%
Sungard Data Systems, Inc.* ........................ 17,000 625,812
CONTAINERS - METAL/GLASS - 1.8%
Crown Cork & Seal Company, Inc. .................... 32,000 1,712,000
CONTAINERS & PACKAGING - 0.6%
Bemis Company, Inc. ................................ 12,800 577,600
DATA PROCESSING - SERVICES - 1.4%
Paychex, Inc. ...................................... 23,400 1,349,888
DISTRIBUTION - FOOD & HEALTH - 1.6%
Cardinal Health, Inc. .............................. 17,500 1,543,281
ELECTRICAL EQUIPMENT - 1.6%
Maxwell Technologies, Inc.* ........................ 52,100 1,509,272
ELECTRONIC EQUIPMENT - 1.1%
SCI Systems, Inc.* ................................. 30,000 1,068,750
ELECTRONICS - INSTRUMENTATION - 3.0%
E G & G, Inc. ...................................... 44,000 1,278,750
Perkin-Elmer Corporation ........................... 7,300 527,881
Sawtek, Inc.* ...................................... 42,000 1,065,750
------------
2,872,381
ELECTRONICS - SEMICONDUCTORS - 2.9%
Analog Devices, Inc.* .............................. 34,666 1,152,645
Linear Technology Corporation ...................... 16,000 1,104,000
Xilinx, Inc.* ...................................... 15,000 561,563
------------
2,818,208
ENTERTAINMENT - 1.3%
Metromedia International
Group, Inc.* ..................................... 80,000 1,215,000
FOODS - 2.5%
Chiquita Brands International, Inc. ................ 132,000 1,806,750
Dole Food Company, Inc. ............................ 12,800 619,200
------------
2,425,950
GAMING & LOTTERY - 1.3%
Circus Circus Enterprises, Inc.* ................... 60,000 1,260,000
HEALTH CARE - LONG TERM CARE - 1.9%
Integrated Health Services, Inc. ................... 46,000 1,808,375
HOSPITAL MANAGEMENT - 1.5%
Vencor, Inc.* ...................................... 48,000 1,437,000
HOUSEHOLD FURNISHINGS & APPLIANCES - 3.0%
Leggett & Platt, Inc. .............................. 19,900 1,023,606
Meadowcraft, Inc.* ................................. 70,000 1,023,750
O'Sullivan Industries
Holdings, Inc.* .................................. 70,000 892,500
------------
2,939,856
HOUSEHOLD PRODUCTS - 0.5%
Dial Corporation ................................... 22,000 526,625
INSURANCE - LIFE/HEALTH - 3.2%
AFLAC, Inc. ........................................ 41,000 2,593,250
John Alden Financial Corporation ................... 21,000 452,812
------------
3,046,062
INVESTMENT MANAGEMENT - 1.5%
Franklin Resources, Inc. ........................... 28,000 1,484,000
LEISURE TIME PRODUCTS - 2.8%
Callaway Golf Company .............................. 48,000 1,392,000
Hasbro, Inc. ....................................... 38,000 1,341,875
------------
2,733,875
LODGING - HOTELS - 0.8%
La Quinta Inns, Inc. ............................... 37,500 787,500
MANUFACTURING - DIVERSIFIED - 0.3%
Carlisle Companies, Inc. ........................... 6,100 299,662
See accompanying notes.
36
<PAGE>
SCHEDULE OF INVESTMENTS
March 31, 1998
(Unaudited)
SECURITY ULTRA FUND (continued)
NUMBER OF MARKET
COMMON STOCKS (continued) SHARES VALUE
- --------------------------------------------------------------------------------
MANUFACTURING - SPECIALIZED - 2.1%
Ionics, Inc.* ...................................... 21,000 $ 904,312
Sealed Air Corporation* ............................ 17,000 1,113,500
------------
2,017,812
MEDICAL PRODUCTS & SUPPLIES - 4.6%
ATL Ultrasound, Inc.* .............................. 29,000 1,475,375
DePuy, Inc. ........................................ 47,000 1,424,688
Stryker Corporation ................................ 22,000 1,031,250
Sunrise Medical, Inc.* ............................. 30,000 478,125
------------
4,409,438
NATURAL GAS - 0.7%
Sonat, Inc. ........................................ 16,500 717,750
OFFICE EQUIPMENT & SUPPLIES - 2.1%
Corporate Express, Inc.* .......................... 137,000 1,365,719
Herman Miller, Inc. ................................ 19,000 637,094
------------
2,002,813
OIL - INTERNATIONAL - 1.5%
Tesoro Petroleum Corporation* ...................... 80,100 1,431,787
OIL & GAS - EXPLORATION & PRODUCTION - 3.8%
Apache Corporation ................................. 52,000 1,911,000
Forcenergy, Inc.* .................................. 68,000 1,802,000
------------
3,713,000
OIL & GAS - REFINING & MARKETING - 0.9%
Quaker State Corporation ........................... 45,000 846,562
PHARMACEUTICALS - 8.4%
Dura Pharmaceuticals, Inc.* ........................ 42,700 1,051,488
Forest Laboratories, Inc.* ......................... 11,800 442,500
Mylan Laboratories, Inc. ........................... 180,000 4,140,000
R.P. Scherer Corporation* .......................... 18,000 1,215,000
Teva Pharmaceuticals
Industries, Ltd. ................................. 30,000 1,282,500
------------
8,131,488
RAILROADS - 0.8%
RailAmerica, Inc.* ................................. 110,000 735,625
RESTAURANTS - 1.0%
The Cheesecake Factory* ............................ 28,000 932,750
RETAIL - APPAREL - 0.9%
Stage Stores, Inc.* ................................ 16,000 826,000
RETAIL - DISCOUNTERS - 1.5%
Consolidated Stores Corporation* ................... 24,000 1,030,500
Family Dollar Stores, Inc. ......................... 10,500 399,000
------------
1,429,500
SPECIALTY - 1.3%
Payless ShoeSource, Inc.* .......................... 11,000 $ 827,750
Tiffany & Company .................................. 8,000 389,500
------------
1,217,250
SERVICES - ADVERTISING/MARKETING - 3.5%
Acxiom Corporation* ................................ 63,300 1,622,063
Omnicom Group, Inc. ................................ 38,000 1,788,375
------------
3,410,438
SERVICES - COMMERCIAL & CONSUMER - 1.2%
Angelica Corporation ............................... 20,000 461,250
Manpower, Inc. ..................................... 17,000 686,375
------------
1,147,625
SPECIALIZED SERVICES - 1.1%
Quintiles Transnational Corporation* ............... 22,200 1,069,763
TELECOMMUNICATION - LONG DISTANCE - 1.3%
LCI International, Inc.* .......................... 32,300 1,243,550
------------
Total common stocks - 98.8% ...................................... 95,349,754
Cash and other assets, less
liabilities - 1.2% ............................................. 1,152,703
------------
Total net assets - 100.0% ........................................ $ 96,502,457
============
The identified cost of investments owned at March 31, 1998, 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 Depository Receipt)
(1) Trust preferred securities -- securities issued by financial institutions to
augment their Tier 1 capital base. Issue on a subordinate basis relative to
senior notes or debentures. Institutions may defer cash payments for up to 10
pay periods.
<PAGE>
<TABLE>
<CAPTION>
BALANCE SHEETS
March 31, 1998
(Unaudited)
Security Equity Fund
-------------------------------------------
Security Asset
Growth and Equity Global Allocation
Income Fund Series Series Series
----------------------------------------------------------
<S> <C> <C> <C> <C>
ASSETS
Investments, at value (identified
cost $93,089,306, $528,568,458,
$28,369,253 and $6,360,779 respectively) ...................... $102,908,356 $921,517,032 $ 33,982,759 $ 7,162,778
Cash .................................................................. 719,070 38,625,152 150,337 409
Receivables:
Fund shares sold .............................................. 80,846 414,301 1,166 349
Securities sold ............................................... 1,692,394 2,211,700 915,618 244,461
Interest ...................................................... 180,535 127,159 5,678 23,879
Dividends ..................................................... 135,087 1,056,889 83,828 6,989
Foreign taxes recoverable ..................................... -- -- 32,864 1,426
Prepaid expenses ...................................................... -- -- -- 9,777
------------ ------------ ------------ -----------
Total assets .......................................... $105,716,288 $963,952,233 $ 35,172,250 $ 7,450,068
============ ============ ============ ===========
LIABILITIES AND NET ASSETS
Liabilities:
Payable for:
Securities purchased .......................................... $ 1,902,746 $ 3,793,277 $ 604,003 $ --
Fund shares redeemed .......................................... 60,894 380,764 2,405 4,196
Forward foreign exchange contracts ............................ -- -- 4,513 --
Other Liabilities:
Management fees ............................................... 106,756 838,853 59,523 6,449
Custodian fees ................................................ -- -- -- 1,199
Transfer and administration fees .............................. -- -- -- 6,357
Professional fees ............................................. -- -- -- 1,006
12b-1 distribution plan fees .................................. 7,822 90,809 10,762 3,157
Other payables ................................................ -- -- -- 1,004
------------ ------------ ------------ -----------
Total liabilities ..................................... 2,078,218 5,103,703 681,206 23,368
Net Assets:
Paid in capital ....................................................... 78,786,774 528,564,419 28,366,555 6,471,957
Undistributed net investment
income (loss) ................................................. 153,677 1,229,462 (198,729) (25,147)
Accumulated undistributed net realized gain
on sale of investments, futures and foreign
currency transactions ......................................... 14,878,569 36,106,075 706,463 178,103
Net unrealized appreciation in value
of investments, futures and translation of assets and
liabilities in foreign currency ............................... 9,819,050 392,948,574 5,616,755 801,787
------------ ------------ ------------ -----------
Net assets ............................................ 103,638,070 958,848,530 34,491,044 7,426,700
------------ ------------ ------------ -----------
Total liabilities and net assets ...................... $105,716,288 $963,952,233 $ 35,172,250 $ 7,450,068
============ ============ ============ ===========
CLASS "A" SHARES
Capital shares outstanding ............................................ 10,301,798 87,895,000 1,694,517 319,150
Net assets ............................................................ $ 94,259,946 $851,243,697 $ 21,960,053 $ 3,823,059
Net asset value per share (net assets divided by
shares outstanding) ........................................... $ 9.15 $ 9.68 $ 12.96 $ 11.98
Add: Selling commission (5.75% of the offering price) ................. 0.56 0.59 0.79 0.73
------------ ------------ ------------ -----------
Offering price per share (net asset
value divided by 94.25%) ...................................... $ 9.71 $ 10.27 $ 13.75 $ 12.71
============ ============ ============ ===========
CLASS "B" SHARES
Capital shares outstanding ............................................ 1,045,432 11,504,206 992,254 302,583
Net assets ............................................................ $ 9,378,124 $107,604,833 $ 12,530,991 $ 3,603,641
Net asset value per share (net assets divided by
shares outstanding) .......................................... $ 8.97 $ 9.35 $ 12.63 $ 11.91
============ ============ ============ ===========
See accompanying notes.
38
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
BALANCE SHEETS
March 31, 1998
(Unaudited)
Security Equity Fund
----------------------------------------------
Social Security
Awareness Value Small Company Ultra
Series Series Series Fund
---------------------------------------------------------------
<S> <C> <C> <C> <C>
ASSETS
Investments, at value (identified
cost $9,273,672, $12,934,186,
$3,073,151 and $74,059,091 respectively) ................ $ 12,284,824 $ 15,229,016 $ 3,654,350 $ 95,349,754
Cash ............................................................ 324,588 368,402 144,666 1,116,296
Receivables:
Fund shares sold ........................................ 11,102 88,590 8,354 785
Securities sold ......................................... -- 84,755 79,325 974,181
Interest ................................................ 1,538 1,994 1,182 7,805
Dividends ............................................... 9,875 16,458 2,013 35,626
Prepaid expenses ................................................ 16,877 16,163 15,349 --
------------ ------------ ----------- ------------
Total assets .................................... $ 12,648,804 $ 15,805,378 $ 3,905,239 $ 97,484,447
============ ============ =========== ============
LIABILITIES AND NET ASSETS
Liabilities:
Payable for:
Securities purchased .................................... $ -- $ 355,490 $ 73,652 $ 849,228
Fund shares redeemed .................................... 62,203 -- -- 25,377
Other Liabilities:
Management fees ......................................... 10,721 12,760 -- 100,588
Custodian fees .......................................... -- -- 715 --
Transfer and administration fees ........................ 2,204 3,038 792 --
Professional fees ....................................... 1,041 9,943 1,474 --
12b-1 distribution plan fees ............................ 4,025 4,843 1,451 6,797
Other payables .......................................... 589 596 662 --
------------ ------------ ----------- ------------
Total liabilities ....................................... 80,783 386,670 78,746 981,990
Net Assets:
Paid in capital ................................................. 9,490,652 12,855,078 3,541,938 62,167,986
Undistributed net investment loss ............................... (11,720) (23,120) (5,644) (306,673)
Accumulated undistributed net realized gain (loss)
on sale of investments and futures .................... 77,937 291,920 (291,000) 13,350,481
Net unrealized appreciation in value
of investments and futures .............................. 3,011,152 2,294,830 581,199 21,290,663
------------ ------------ ----------- ------------
Net assets ...................................... 12,568,021 15,418,708 3,826,493 96,502,457
------------ ------------ ----------- ------------
Total liabilities and net assets ........ $ 12,648,804 $ 15,805,378 $ 3,905,239 $ 97,484,447
============ ============ =========== ============
CLASS "A" SHARES
Capital shares outstanding ...................................... 378,524 666,825 197,339 9,454,842
Net assets ...................................................... $ 7,847,080 $ 9,636,168 $ 2,120,141 $ 88,573,969
Net asset value per share (net assets divided by
shares outstanding) ..................................... $ 20.73 $ 14.45 $ 10.74 $ 9.37
Add: Selling commission (5.75% of the offering price) ........... 1.26 0.88 _0.66 0.57
------------ ------------ ----------- ------------
Offering price per share (net asset
value divided by 94.25%) ................................ $ 21.99 $ 15.33 $ 11.40 $ 9.94
============ ============ =========== ============
CLASS "B" SHARES
Capital shares outstanding ...................................... 230,840 401,961 159,355 884,580
Net assets ...................................................... $ 4,720,941 $ 5,782,540 $ 1,706,352 $ 7,928,488
Net asset value per share (net assets divided by
shares outstanding) .................................... $ 20.45 $ 14.39 $ 10.71 $ 8.96
============ ============ =========== ============
See accompanying notes.
39
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
STATEMENTS OF OPERATIONS
For the Six Months Ended March 31, 1998
(Unaudited)
Security Equity Fund
----------------------------------------
Security Asset
Growth and Equity Global Allocation
Income Fund Series Series Series
----------------------------------------------------------
<S> <C> <C> <C> <C>
INVESTMENT INCOME:
Dividends ....................................................... $ 710,265 $ 5,023,407 $ 222,509 $ 28,020
Interest ........................................................ 387,003 1,131,725 52,075 55,913
------------ ------------ ----------- ---------
1,097,268 6,155,132 274,584 83,933
Less foreign tax expense ................................ -- -- (22,144) (1,019)
------------ ------------ ----------- ---------
Total investment income ................................. 1,097,268 6,155,132 252,440 82,914
EXPENSES:
Management fees ................................................. 582,975 4,385,673 344,800 36,271
Custodian fees .................................................. -- -- -- 2,177
Transfer/maintenance fees ....................................... -- -- -- 6,565
Administration fees ............................................. -- -- -- 31,632
Directors' fees ................................................. -- -- -- 62
Professional fees ............................................... -- -- -- 1,643
Reports to shareholders ......................................... -- -- -- 642
Registration fees ............................................... -- -- -- 10,502
Other expenses .................................................. -- -- -- 34
12b-1 distribution plan fees (Class B) .......................... 38,107 460,957 62,173 18,079
Reimbursement of expenses ....................................... -- -- -- (18,705)
------------ ------------ ----------- ---------
Total expenses .......................................... 621,082 4,846,630 406,973 88,902
------------ ------------ ----------- ---------
Net investment income (loss) .................... 476,186 1,308,502 (154,533) (5,988)
NET REALIZED AND UNREALIZED GAIN (LOSS):
Net realized gain during the period on:
Investments ............................................. 16,422,248 45,961,813 596,638 179,799
Foreign currency transactions ........................... -- -- 115,101 263
------------ ------------ ----------- ---------
Net realized gain ....................................... 16,422,248 45,961,813 711,739 180,062
Net change in unrealized appreciation
(depreciation) during the period on:
Investments ............................................. (8,853,464) 93,509,864 1,095,121 56,079
Translation of assets and liabilities in
foreign currencies .............................. -- -- (65,209) (128)
------------ ------------ ----------- ---------
Net unrealized appreciation (depreciation) .............. (8,853,464) 93,509,864 1,029,912 55,951
------------ ------------ ----------- ---------
Net gain ........................................ 7,568,784 139,471,677 1,741,651 236,013
------------ ------------ ----------- ---------
Net increase in net assets resulting from
operations .............................. $ 8,044,970 $140,780,179 $ 1,587,118 $ 230,025
============ ============ =========== =========
See accompanying notes.
40
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
STATEMENTS OF OPERATIONS
For the Six Months Ended March 31, 1998
(Unaudited)
Security Equity Fund
----------------------------------------------
Social Security
Awareness Value Small Company Ultra
Series Series Series Fund
---------------------------------------------------------------
<S> <C> <C> <C> <C>
INVESTMENT INCOME:
Dividends ........................................... $ 49,102 $ 68,768 $ 6,516 $ 167,969
Interest ............................................ 13,038 7,079 13,310 87,795
----------- ----------- --------- ------------
Total investment income ..................... 62,140 75,847 19,826 255,764
EXPENSES:
Management fees ..................................... 53,567 57,533 14,437 531,811
Custodian fees ...................................... 456 1,247 3,556 --
Transfer/maintenance fees ........................... 6,166 7,911 1,611 --
Administration fees ................................. 4,821 5,178 1,299 --
Directors' fees ..................................... (178) 77 81 --
Professional fees ................................... 3,240 15,951 1,824 --
Reports to shareholders ............................. 470 27 90 --
Registration fees ................................... 12,085 10,141 9,097 --
Other expenses ...................................... (66) 547 544 --
12b-1 distribution plan fees (Class B) .............. 19,935 22,899 6,302 30,626
Reimbursement of expenses ........................... (34,388) (35,151) (14,437) --
----------- ----------- --------- ------------
Total expenses .............................. 66,108 86,360 24,404 562,437
----------- ----------- --------- ------------
Net investment loss ................. (3,968) (10,513) (4,578) (306,673)
NET REALIZED AND UNREALIZED GAIN (LOSS):
Net realized gain (loss) during the
period on investments ....................... 282,795 432,803 (291,000) 15,700,320
Net change in unrealized appreciation
(depreciation) during the period on
investments ........................... 1,370,547 1,437,861 581,199 (9,020,020)
----------- ----------- --------- ------------
Net gain .................................... 1,653,342 1,870,664 290,199 6,680,300
----------- ----------- --------- ------------
Net increase in net assets resulting
from operations ............. $ 1,649,374 $ 1,860,151 $ 285,621 $ 6,373,627
=========== =========== ========= ============
* Period October 15, 1997 (inception) through March 31, 1998.
See accompanying notes
41
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
STATEMENTS OF CHANGES IN NET ASSETS
For the Six Months Ended March 31, 1998
(Unaudited)
Security Equity Fund
-------------------------------------------
Security Asset
Growth and Equity Global Allocation
Income Fund Series Series Series
--------------------------------------------------------------------
<S> <C> <C> <C> <C>
INCREASE IN NET ASSETS FROM OPERATIONS:
Net investment income (loss) .............................. $ 476,186 $ 1,308,502 $ (154,533) $ (5,988)
Net realized gain ......................................... 16,422,248 45,961,813 711,739 180,062
Unrealized appreciation (depreciation)
during the period ................................. (8,853,464) 93,509,864 1,029,912 55,951
------------- ------------- ------------ -----------
Net increase in net assets
resulting from operations ......... 8,044,970 140,780,179 1,587,118 230,025
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income
Class A ........................................... (413,683) (2,345,323) (149,980) (58,958)
Class B ........................................... (5,181) -- -- (28,115)
Net realized gain
Class A ........................................... (20,855,491) (64,375,168) (1,839,563) (224,701)
Class B ........................................... (1,779,726) (7,895,826) (1,085,885) (230,748)
------------- ------------- ------------ -----------
Total distributions to shareholders ....... (23,054,081) (74,616,317) (3,075,428) (542,522)
CAPITAL SHARE TRANSACTIONS (a):
Proceeds from sale of shares
Class A ........................................... 4,531,435 70,130,505 2,563,556 183,650
Class B ........................................... 3,590,927 38,211,592 1,579,494 73,182
Dividends reinvested
Class A ........................................... 19,700,352 62,157,961 1,937,568 281,349
Class B ........................................... 1,768,638 7,737,663 1,817,695 257,505
Shares redeemed
Class A ........................................... (7,339,627) (97,705,153) (5,751,450) (393,826)
Class B ........................................... (1,592,972) (34,704,139) (3,422,008) (420,043)
------------- ------------- ------------ -----------
Net increase (decrease) from capital
share transactions ........................ 20,658,753 45,828,429 (1,275,145) (18,183)
------------- ------------- ------------ -----------
Total increase (decrease)
in net assets ............................. 5,649,642 111,992,291 (2,763,455) (330,680)
NET ASSETS:
Beginning of period ....................................... 97,988,428 846,856,239 37,254,499 7,757,380
------------- ------------- ------------ -----------
End of period ............................................. $ 103,638,070 $ 958,848,530 $ 34,491,044 $ 7,426,700
============= ============= ============ ===========
Undistributed net investment
income (loss) at end of period .................... $ 153,677 $ 1,229,462 ($ 198,729) ($ 25,147)
============= ============= ============ ===========
(a) Shares issued and redeemed
Shares sold
Class A ................................... 482,377 7,867,508 203,929 15,546
Class B ................................... 380,372 4,417,720 191,262 6,312
Dividends reinvested
Class A ................................... 2,399,216 7,659,638 178,897 26,302
Class B ................................... 219,859 983,935 101,172 24,152
Shares redeemed
Class A ................................... (770,466) (10,942,879) (472,462) (33,177)
Class B ................................... (167,851) (4,022,808) (287,924) (37,095)
------------- ------------- ------------ -----------
Net increase (decrease) ................... 2,543,507 5,963,114 (85,126) 2,040
============= ============= ============ ===========
See accompanying notes.
42
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
STATEMENTS OF CHANGES IN NET ASSETS
For the Six Months Ended March 31, 1998
(Unaudited)
Security Equity Fund
------------------------------------------------
Social Security
Awareness Value Small Company Ultra
Series Series Series* Fund
-----------------------------------------------------------------
<S> <C> <C> <C> <C>
INCREASE IN NET ASSETS FROM OPERATIONS:
Net investment loss ......................................... $ (3,968) $ (10,513) $ (4,578) $ (306,673)
Net realized gain (loss) .................................... 282,795 432,803 (291,000) 15,700,320
Unrealized appreciation (depreciation)
during the period ................................... 1,370,547 1,437,861 581,199 (9,020,020)
------------ ------------ ----------- ------------
Net increase in net assets
resulting from operations ................... 1,649,374 1,860,151 285,621 6,373,627
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income
Class A ............................................. (13,294) (23,796) (1,066) --
Class B ............................................. -- -- -- --
Net realized gain
Class A ............................................. -- (148,593) -- (4,076,977)
Class B ............................................. -- (99,378) -- (303,175)
------------ ------------ ----------- ------------
Total distributions to shareholders ......... (13,294) (271,767) (1,066) (4,380,152)
CAPITAL SHARE TRANSACTIONS (a):
Proceeds from sale of shares
Class A ............................................. 765,837 4,126,805 2,066,613 6,911,023
Class B ............................................. 527,743 2,055,039 1,595,376 2,854,425
Dividends reinvested
Class A ............................................. 12,614 169,270 1,049 3,906,269
Class B ............................................. -- 87,953 -- 296,782
Shares redeemed
Class A ............................................. (171,533) (259,417) (111,100) (8,538,821)
Class B ............................................. (52,664) (551,917) (10,000) (1,387,967)
------------ ------------ ----------- ------------
Net increase from capital share transactions ........ 1,081,997 5,627,733 3,541,938 4,041,711
------------ ------------ ----------- ------------
Total increase in net assets ........................ 2,718,077 7,216,117 3,826,493 6,035,186
NET ASSETS:
Beginning of period ......................................... 9,849,944 8,202,591 -- 90,467,271
------------ ------------ ----------- ------------
End of period ............................................... $ 12,568,021 $ 15,418,708 $ 3,826,493 $ 96,502,457
------------ ------------ ----------- ------------
Undistributed net investment income at end of period ........ $ (11,720) $ (23,120) $ (5,644) $ (306,673)
============ ============ =========== ============
(a) Shares issued and redeemed
Shares sold
Class A ............................. 41,488 315,140 208,166 805,876
Class B ............................. 29,194 161,774 160,360 341,420
Dividends reinvested
Class A ............................. 705 13,859 113 479,768
Class B ............................. -- 7,210 -- 37,991
Shares redeemed
Class A ............................. (8,797) (19,698) (10,940) (980,114)
Class B ............................. (2,720) (43,596) (1,005) (164,757)
------------ ------------ ----------- ------------
Net increase ........................ 59,870 434,689 356,694 520,184
============ ============ =========== ============
*Period October 15, 1997 (inception) through March 31, 1998
See accompanying notes
43
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
STATEMENTS OF CHANGES IN NET ASSETS
For the Year Ended September 30, 1997
Security Equity Fund
------------------------------------------------
Security Asset
Growth and Equity Global Allocation
Income Fund Series Series Series
--------------------------------------------------------------------
<S> <C> <C> <C> <C>
INCREASE IN NET ASSETS FROM OPERATIONS:
Net investment income (loss) ............................... $ 1,221,015 $ 2,692,742 $ (77,044) $ 70,250
Net realized gain .......................................... 21,245,450 70,480,807 3,427,527 461,093
Unrealized appreciation
during the period .................................. 3,450,512 126,763,115 2,563,891 619,758
------------ ------------- ------------ -----------
Net increase in net assets resulting
from operations ............................ 25,916,977 199,936,664 5,914,374 1,151,101
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income
Class A ............................................ (1,278,257) (3,155,322) (597,023) (63,009)
Class B ............................................ (29,101) -- (199,976) (52,830)
Net realized gain
Class A ............................................ (5,648,284) (49,869,431) (1,243,269) (61,070)
Class B ............................................ (232,550) (4,463,901) (515,069) (73,554)
------------ ------------- ------------ -----------
Total distributions to shareholders ........ (7,188,192) (57,488,654) (2,555,337) (250,463)
CAPITAL SHARE TRANSACTIONS (a):
Proceeds from sales of shares
Class A ............................................ 5,721,292 221,241,550 6,304,969 1,478,803
Class B ............................................ 3,688,134 110,104,405 6,613,460 1,009,991
Dividends reinvested
Class A ............................................ 6,351,214 49,656,213 1,808,607 122,613
Class B ............................................ 253,502 4,431,044 714,502 124,004
Shares redeemed
Class A ............................................ (11,732,659) (219,339,034) (5,834,526) (595,393)
Class B ............................................ (542,134) (76,188,625) (2,640,062) (513,448)
------------ ------------- ------------ -----------
Net increase from capital share transactions ....... 3,739,349 89,905,553 6,966,950 1,626,570
------------ ------------- ------------ -----------
Total increase in net assets ............... 22,468,134 232,353,563 10,325,987 2,527,208
NET ASSETS:
Beginning of year .................................. 75,520,294 614,502,676 26,928,512 5,230,172
------------ ------------- ------------ -----------
End of year ........................................ $ 97,988,428 $ 846,856,239 $ 37,254,499 $ 7,757,380
============ ============= ============ ===========
Undistributed net investment income
at end of year ..................................... $ 96,355 $ 2,266,283 $ 105,784 $ 67,914
============ ============= ============ ===========
(a) Shares issued and redeemed
Shares sold
Class A ............................ 602,485 27,937,552 503,842 128,634
Class B ............................ 388,324 14,249,362 537,435 89,049
Dividends reinvested
Class A ............................ 721,721 6,886,178 157,805 11,078
Class B ............................ 29,373 628,340 63,438 11,246
Shares redeemed
Class A ............................ (1,232,959) (27,902,983) (459,717) (50,647)
Class B ............................ (56,091) (10,027,869) (211,371) (44,492)
------------ ------------- ------------ -----------
Net increase ....................... 452,853 11,770,580 591,432 144,868
============ ============= ============ ===========
See accompanying notes.
44
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
STATEMENTS OF CHANGES IN NET ASSETS
For the Year Ended September 30, 1997
Security Equity Fund
---------------------------------
Social Security
Awareness Value Ultra
Series* Series** Fund
-------------------------------------------------------
<S> <C> <C> <C>
INCREASE IN NET ASSETS FROM OPERATIONS:
Net investment income (loss) ....................................... $ 5,542 $ 11,189 $ (832,436)
Net realized gain (loss) ........................................... (204,858) 107,088 2,802,288
Unrealized appreciation
during the period .......................................... 1,640,605 856,969 13,191,840
----------- ----------- ------------
Net increase in net assets resulting
from operations .................................... 1,441,289 975,246 15,161,692
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income
Class A .................................................... -- -- --
Class B .................................................... -- -- --
Net realized gain
Class A .................................................... -- -- (5,180,781)
Class B .................................................... -- -- (326,156)
----------- ----------- ------------
Total distributions to shareholders ..................... -- -- (5,506,937)
CAPITAL SHARE TRANSACTIONS (a):
Proceeds from sales of shares
Class A .................................................... 5,535,748 4,177,778 22,311,821
Class B .................................................... 3,185,475 3,087,104 6,072,670
Dividends reinvested
Class A .................................................... -- -- 4,973,701
Class B .................................................... -- -- 326,142
Shares redeemed
Class A .................................................... (306,673) (23,359) (26,312,322)
Class B .................................................... (5,895) (14,178) (3,487,931)
----------- ----------- ------------
Net increase from capital share
transactions ........................................... 8,408,655 7,227,345 3,884,081
----------- ----------- ------------
Total increase in net assets ....................... 9,849,944 8,202,591 13,538,836
NET ASSETS:
Beginning of period ........................................ -- -- 76,928,435
----------- ----------- ------------
End of period .............................................. $ 9,849,944 $ 8,202,591 $ 90,467,271
----------- ----------- ------------
Undistributed net investment income
at end of period ........................................... $ 5,542 $ 11,189 $ --
=========== =========== ============
(a) Shares issued and redeemed
Shares sold
Class A .................................... 363,334 359,432 2,872,813
Class B .................................... 204,698 277,836 766,245
Dividends reinvested
Class A .................................... -- -- 656,941
Class B .................................... -- -- 44,428
Shares redeemed
Class A .................................... (18,206) (1,908) (3,375,134)
Class B .................................... (332) (1,263) (476,747)
----------- ----------- ------------
Net increase ............................... 549,494 634,097 488,546
=========== =========== ============
* Period November 1, 1996 (inception) through September 30,1997.
** Period May 1, 1997 (inception) through September 30,1997.
See accompanying notes
45
</TABLE>
<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
------------------------------------------------------------------------------------------
1998(g)(m) 1997(g) 1996(g) 1995(g) 1994(c) 1993
---------- ------------ ------------ ---------- ---------- ------------
<S> <C> <C> <C> <C> <C> <C>
PER SHARE DATA
NET ASSET VALUE BEGINNING OF PERIOD .. $ 11.14 $ 9.05 $ 7.93 $ 6.96 $ 7.84 $ 7.13
INCOME FROM INVESTMENT OPERATIONS:
Net Investment Income ................ 0.05 0.15 0.18 0.16 0.13 0.21
Net Gain (Loss) on Securities
(realized and unrealized) .... 0.58 2.81 1.37 1.18 (0.71) 0.88
---------- ------------ ------------ ---------- ---------- ------------
Total from Investment Operations ..... 0.63 2.96 1.55 1.34 (0.58) 1.09
LESS DISTRIBUTIONS
Dividends (from Net Investment Income) (0.03) (0.16) (0.16) (0.16) (0.13) (0.22)
Distributions (from Capital Gains) ... (2.59) (0.71) (0.27) (0.21) (0.17) (0.16)
---------- ------------ ------------ ---------- ---------- ------------
Total Distributions .......... (2.62) (0.87) (0.43) (0.37) (0.30) (0.38)
---------- ------------ ------------ ---------- ---------- ------------
NET ASSET VALUE END OF PERIOD ........ $ 9.15 $ 11.14 $ 9.05 $ 7.93 $ 6.96 $ 7.84
========== ============ ============ ========== ========== ============
TOTAL RETURN(a) ...................... 8.55% 35.31% 20.31% 20.25% (7.6%) 15.6%
RATIOS/SUPPLEMENTAL DATA
Net Assets End of Period (thousands) . $ 94,260 $ 91,252 $ 73,273 $ 67,430 $ 65,328 $ 81,982
Ratio of Expenses to Average Net
Assets ....................... 1.21% 1.24% 1.29% 1.31% 1.28% 1.26%
Ratio of Net Investment Income (Loss)
to Average Net Assets ........ 1.06% 1.53% 2.09% 2.21% 1.70% 2.80%
Portfolio Turnover Rate .............. 176% 124% 69% 130% 163% 135%
Average Commission Paid Per Equity
Share Traded(j) .............. $ 0.0600 $ 0.0600 $ 0.0625 -- -- --
SECURITY GROWTH AND INCOME FUND (CLASS B)
Fiscal Period Ended September 30
------------------------------------------------------------------------------
1998(g)(m) 1997(g) 1996(g) 1995(g) 1994(c)
---------- ----------- ----------- ---------- ----------
PER SHARE DATA
NET ASSET VALUE BEGINNING OF PERIOD ............. $ 10.99 $ 8.94 $ 7.85 $ 6.90 $ 7.83
INCOME FROM INVESTMENT OPERATIONS:
Net Investment Income ........................... -- 0.05 0.09 0.08 0.05
Net Gain (Loss) on Securities
(realized and unrealized) ............... 0.57 2.77 1.35 1.18 (0.69)
---------- ----------- ----------- ---------- ----------
Total from Investment Operations ................ 0.57 2.82 1.44 1.26 (0.64)
LESS DISTRIBUTIONS
Dividends (from Net Investment Income) .......... -- (0.06) (0.08) (0.09) (0.12)
Distributions (from Capital Gains) .............. (2.59) (0.71) (0.27) (0.22) (0.17)
---------- ----------- ----------- ---------- ----------
Total Distributions ..................... (2.59) (0.77) (0.35) (0.31) (0.29)
---------- ----------- ----------- ---------- ----------
NET ASSET VALUE END OF PERIOD ................... $ 8.97 $ 10.99 $ 8.94 $ 7.85 $ 6.90
========== =========== =========== ========== ==========
TOTAL RETURN(a) ................................. 7.95% 34.01% 19.01% 19.07% (8.0%)
RATIOS/SUPPLEMENTAL DATA
Net Assets End of Period (thousands) ............ $ 9,378 $ 6,737 $ 2,247 $ 1,130 $ 668
Ratio of Expenses to Average Net
Assets .................................. 2.21% 2.24% 2.29% 2.31% 2.27%
Ratio of Net Investment Income (Loss)
to Average Net Assets ................... 0.06% 0.53% 1.09% 1.21% 1.03%
Portfolio Turnover Rate ......................... 176% 124% 69% 130% 178%
Average Commission Paid Per Equity
Share Traded(j) ......................... $ 0.0600 $ 0.0600 $ 0.0625 -- --
See accompanying notes.
46
</TABLE>
<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
-----------------------------------------------------------------------------------------
1998(g)(m) 1997(g) 1996(g) 1995(g) 1994(c) 1993
------------ ------------ ------------ ------------ ------------ -------------
<S> <C> <C> <C> <C> <C> <C>
PER SHARE DATA
NET ASSET VALUE BEGINNING OF PERIOD .. $ 9.09 $ 7.54 $ 6.55 $ 5.54 $ 6.73 $ 5.86
INCOME FROM INVESTMENT OPERATIONS:
Net Investment Income ................ 0.02 0.04 0.05 0.04 0.05 0.12
Net Gain (Loss) on Securities
(realized and unrealized) .... 1.40 2.20 1.48 1.38 0.09 1.17
------------ ------------ ------------ ------------ ------------ -------------
Total from Investment Operations ..... 1.42 2.24 1.53 1.42 0.14 1.29
LESS DISTRIBUTIONS
Dividends (from Net Investment Income) (0.03) (0.04) (0.06) -- (0.12) (0.06)
Distributions (from Capital Gains) ... (0.80) (0.65) (0.48) (0.41) (1.21) (0.36)
------------ ------------ ------------ ------------ ------------ -------------
Total Distributions .......... (0.83) (0.69) (0.54) (0.41) (1.33) (0.42)
------------ ------------ ------------ ------------ ------------ -------------
NET ASSET VALUE END OF PERIOD ........ $ 9.68 $ 9.09 $ 7.54 $ 6.55 $ 5.54 $ 6.73
============ ============ ============ ============ ============ =============
TOTAL RETURN(a) ...................... 17.32% 32.08% 24.90% 27.77% 1.95% 22.70%
RATIOS/SUPPLEMENTAL DATA
Net Assets End of Period (thousands) . $ 851,244 $ 757,520 $ 575,680 $ 440,339 $ 358,237 $ 375,565
Ratio of Expenses to Average Net
Assets ....................... 1.02% 1.03% 1.04% 1.05% 1.06% 1.06%
Ratio of Net Investment Income (Loss)
to Average Net Assets ........ 0.41% 0.46% 0.75% 0.87% 0.86% 1.95%
Portfolio Turnover Rate .............. 57% 66% 64% 95% 79% 95%
Average Commission Paid Per Equity
Share Traded(j) .............. $ 0.0600 $ 0.0600 $ 0.0609 -- -- --
SECURITY EQUITY SERIES (CLASS B)
Fiscal Period Ended September 30
--------------------------------------------------------------------------
1998(g)(m) 1997(g) 1996(g) 1995(g) 1994(c)
----------- ----------- ----------- ----------- -----------
PER SHARE DATA
NET ASSET VALUE BEGINNING OF PERIOD .......... $ 8.82 $ 7.36 $ 6.43 $ 5.49 $ 6.81
INCOME FROM INVESTMENT OPERATIONS:
Net Investment Income (Loss) ................. (0.02) (0.04) (0.02) (0.01) 0.01
Net Gain (Loss) on Securities
(realized and unrealized) ............ 1.35 2.15 1.45 1.36 --
----------- ----------- ----------- ----------- -----------
Total from Investment Operations ............. 1.33 2.11 1.43 1.35 0.01
LESS DISTRIBUTIONS
Dividends (from Net Investment Income) ....... -- -- (0.02) -- (0.12)
Distributions (from Capital Gains) ........... (0.80) (0.65) (0.48) (0.41) (1.21)
----------- ----------- ----------- ----------- -----------
Total Distributions .................. (0.80) (0.65) (0.50) (0.41) (1.33)
----------- ----------- ----------- ----------- -----------
NET ASSET VALUE END OF PERIOD ................ $ 9.35 $ 8.82 $ 7.36 $ 6.43 $ 5.49
=========== =========== =========== =========== ===========
TOTAL RETURN(a) .............................. 16.74% 30.85% 23.57% 26.69% (0.15%)
RATIOS/SUPPLEMENTAL DATA
Net Assets End of Period (thousands) ......... $ 107,605 $ 89,336 $ 38,822 $ 19,288 $ 7,452
Ratio of Expenses to Average Net
Assets ............................... 2.02% 2.03% 2.04% 2.05% 2.07%
Ratio of Net Investment Income (Loss)
to Average Net Assets ................ (0.59%) (0.54%) (0.25%) (0.13%) (0.01%)
Portfolio Turnover Rate ...................... 57% 66% 64% 95% 80%
Average Commission Paid Per Equity
Share Traded(j) ...................... $ 0.0600 $ 0.0600 $ 0.0609 -- --
See accompanying notes.
47
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
FINANCIAL HIGHLIGHTS
Selected data for each share of capital stock outstanding throughout each period
SECURITY GLOBAL SERIES (CLASS A)
Fiscal Period Ended September 30
-------------------------------------------------------------------------------------
1998(g)(m) 1997(g) 1996(g) 1995(g) 1994(c)(d)
------------- ------------- ------------ ------------ -----------
<S> <C> <C> <C> <C> <C>
PER SHARE DATA
NET ASSET VALUE BEGINNING OF PERIOD ......... $ 13.56 $ 12.42 $ 10.94 $ 10.84 $ 10.00
INCOME FROM INVESTMENT OPERATIONS:
Net Investment Income (Loss) ................ (0.03) 0.01 0.01 (0.02) (0.03)
Net Gain (Loss) on Securities
(realized and unrealized) ........... 0.59 2.29 1.87 0.31 0.87
------------ ------------ ------------ ------------ ----------
Total from Investment Operations ............ 0.56 2.30 1.88 0.29 0.84
LESS DISTRIBUTIONS
Dividends (from Net Investment Income) ...... (0.09) (0.38) (0.25) -- --
Distributions (from Capital Gains) .......... (1.07) (0.78) (0.15) (0.19) --
------------ ------------ ------------ ------------ ----------
Total Distributions ................. (1.16) (1.16) (0.40) (0.19) --
------------ ------------ ------------ ------------ ----------
NET ASSET VALUE END OF PERIOD ............... $ 12.96 $ 13.56 $ 12.42 $ 10.94 $ 10.84
============ ============ ============ ============ ==========
TOTAL RETURN (a) ............................ 5.63% 20.22% 17.73% 2.80% 8.40%
RATIOS/SUPPLEMENTAL DATA
Net Assets End of Period (thousands) ........ $ 21,960 $ 24,193 $ 19,644 $ 16,261 $ 20,128
Ratio of Expenses to Average Net
Assets .............................. 2.00% 2.00% 2.00% 2.00% 2.00%
Ratio of Net Investment Income (Loss)
to Average Net Assets ............... (0.54%) (0.07%) 0.07% (0.17%) (0.01%)
Portfolio Turnover Rate ..................... 100% 132% 142% 141% 73%
Average Commission Paid Per Equity
Share Traded (j) .................... $ 0.0177 $ 0.0141 $ 0.0338 -- --
SECURITY GLOBAL SERIES (CLASS B)
Fiscal Period Ended September 30
---------------------------------------------------------------------------
1998(g)(m) 1997(g) 1996(g) 1995(g) 1994(c)(d)
----------- ----------- ----------- ----------- -----------
PER SHARE DATA
NET ASSET VALUE BEGINNING OF PERIOD ............. $ 13.22 $ 12.18 $ 10.74 $ 10.75 $ 9.96
INCOME FROM INVESTMENT OPERATIONS:
Net Investment Income ........................... (0.09) (0.11) (0.10) (0.12) (0.12)
Net Gain (Loss) on Securities
(realized and unrealized) ............... 0.57 2.24 1.84 0.30 0.91
----------- ----------- ----------- ----------- -----------
Total from Investment Operations ................ 0.48 2.13 1.74 0.18 0.79
LESS DISTRIBUTIONS
Dividends (from Net Investment Income) .......... -- (0.31) (0.14) -- --
Distributions (from Capital Gains) .............. (1.07) (0.78) (0.16) (0.19) --
----------- ----------- ----------- ----------- -----------
Total Distributions ..................... (1.07) (1.09) (0.30) (0.19) --
----------- ----------- ----------- ----------- -----------
NET ASSET VALUE END OF PERIOD ................... $ 12.63 $ 13.22 $ 12.18 $ 10.74 $ 10.75
=========== =========== =========== =========== ===========
TOTAL RETURN(a) ................................. 5.04% 19.01% 16.57% 1.79% 7.90%
RATIOS/SUPPLEMENTAL DATA
Net Assets End of Period (thousands) ............ $ 12,531 $ 13,061 $ 7,285 $ 5,433 $ 3,960
Ratio of Expenses to Average Net
Assets .................................. 3.00% 3.00% 3.00% 3.00% 3.00%
Ratio of Net Investment Income (Loss)
to Average Net Assets ................... (1.54%) (0.93%) (0.93%) (1.17%) (0.01%)
Portfolio Turnover Rate ......................... 100% 132% 142% 141% 73%
Average Commission Paid Per Equity
Share Traded(j) ......................... $ 0.0177 $ 0.0141 $ 0.0338 -- --
See accompanying notes.
48
</TABLE>
<PAGE>
FINANCIAL HIGHLIGHTS
Selected data for each share of capital stock outstanding throughout each period
SECURITY ASSET ALLOCATION SERIES (CLASS A)
<TABLE>
<CAPTION>
Fiscal Period Ended September 30
-----------------------------------------------------------------------
1998(f)(g)(m) 1997(f)(g)(k) (1996 (f)(g) 1995(e)(f)(g)
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
PER SHARE DATA
NET ASSET VALUE BEGINNING OF PERIOD ............. $ 12.58 $ 11.06 $ 10.54 $ 10.00
INCOME FROM INVESTMENT OPERATIONS:
Net Investment Income (Loss) .................... 0.02 0.17 0.25 0.04
Net Gain (Loss) on Securities
(realized and unrealized) ............... 0.33 1.86 0.77 0.50
----------- ----------- ----------- -----------
Total from Investment Operations ................ 0.35 2.03 1.02 0.54
LESS DISTRIBUTIONS
Dividends (from Net Investment Income) .......... (0.20) (0.26) (0.33) --
Distributions (from Capital Gains) .............. (0.75) (0.25) (0.17) --
----------- ----------- ----------- -----------
Total Distributions ..................... (0.95) (0.51) (0.50) --
----------- ----------- ----------- -----------
NET ASSET VALUE END OF PERIOD ................... $ 11.98 $ 12.58 $ 11.06 $ 10.54
=========== =========== =========== ===========
TOTAL RETURN (a) ................................ 3.63% 19.00% 10.01% 5.40%
RATIOS/SUPPLEMENTAL DATA
Net Assets End of Period (thousands) ............ $ 3,823 $ 3,906 $ 2,449 $ 1,906
Ratio of Expenses to Average Net
Assets .................................. 2.00% 1.68% 2.00% 2.00%
Ratio of Net Investment Income (Loss)
to Average Net Assets ................... 0.29% 1.52% 2.32% 1.33%
Portfolio Turnover Rate ......................... 53% 79% 75% 129%
Average Commission Paid Per Equity
Share Traded (j) ........................ $ 0.0614 $ 0.0409 $ 0.0247 --
SECURITY ASSET ALLOCATION SERIES (CLASS B)
Fiscal Period Ended September 30
-----------------------------------------------------------------------
1998(f)(g)(m) 1997(f)(g)(k) (1996 (f)(g) 1995(e)(f)(g)
----------- ----------- ----------- -----------
PER SHARE DATA
NET ASSET VALUE BEGINNING OF PERIOD .............. $ 12.45 $ 10.97 $ 10.50 $ 10.00
INCOME FROM INVESTMENT OPERATIONS:
Net Investment Income ............................ (0.04) 0.07 0.14 0.01
Net Gain (Loss) on Securities
(realized and unrealized) ................ 0.34 1.84 0.77 0.49
----------- ----------- ----------- -----------
Total from Investment Operations ................. 0.30 1.91 0.91 0.50
LESS DISTRIBUTIONS
Dividends (from Net Investment Income) ........... (0.09) (0.18) (0.27) --
Distributions (from Capital Gains) ............... (0.75) (0.25) (0.17) --
----------- ----------- ----------- -----------
Total Distributions ...................... (0.84) (0.43) (0.44) --
----------- ----------- ----------- -----------
NET ASSET VALUE END OF PERIOD .................... $ 11.91 $ 12.45 $ 10.97 $ 10.50
=========== =========== =========== ===========
TOTAL RETURN(a) .................................. 3.18% 17.95% 8.97% 5.00%
RATIOS/SUPPLEMENTAL DATA
Net Assets End of Period (thousands) ............. $ 3,604 $ 3,851 $ 2,781 $ 1,529
Ratio of Expenses to Average Net
Assets ................................... 2.91% 2.58% 3.00% 3.00%
Ratio of Net Investment Income (Loss)
to Average Net Assets .................... (0.62%) 0.61% 1.32% 0.31%
Portfolio Turnover Rate .......................... 53% 79% 75% 129%
Average Commission Paid Per Equity
Share Traded(j) .......................... $ 0.0614 $ 0.0409 $ 0.0247 --
See accompanying notes.
49
</TABLE>
<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
----------------------------------
1998(f)(g)(m) 1997(g)(h)
------------- -----------
PER SHARE DATA
NET ASSET VALUE BEGINNING OF PERIOD ...... $ 17.99 $ 15.00
INCOME FROM INVESTMENT OPERATIONS:
Net Investment Income (Loss) ............. 0.03 0.08
Net Gain (Loss) on Securities
(realized and unrealized) ........ 2.75 2.91
----------- -----------
Total from Investment Operations ......... 2.78 2.99
LESS DISTRIBUTIONS
Dividends (from Net Investment Income) ... (0.04) --
Distributions (from Capital Gains) ....... -- --
----------- -----------
Total Distributions .............. (0.04) --
----------- -----------
NET ASSET VALUE END OF PERIOD ............ $ 20.73 $ 17.99
=========== ===========
TOTAL RETURN (a) ......................... 15.46% 19.93%
RATIOS/SUPPLEMENTAL DATA
Net Assets End of Period (thousands) ..... $ 7,847 $ 6,209
Ratio of Expenses to Average Net
Assets ........................... 0.81% 0.67%
Ratio of Net Investment Income (Loss)
to Average Net Assets ............ 0.35% 0.57%
Portfolio Turnover Rate .................. 54% 38%
Average Commission Paid Per Equity
Share Traded (j) ................. $ 0.0600 $ 0.0600
SECURITY SOCIAL AWARENESS SERIES (CLASS B)
Fiscal Period Ended September 30
------------------------------------
1998(f)(g)(m) 1997(f)(g)(h)
-------------- -------------
PER SHARE DATA
NET ASSET VALUE BEGINNING OF PERIOD ...... $ 17.81 $ 15.00
INCOME FROM INVESTMENT OPERATIONS:
Net Investment Income .................... (0.07) (0.08)
Net Gain (Loss) on Securities
(realized and unrealized) ........ 2.71 2.89
----------- -----------
Total from Investment Operations ......... 2.64 2.81
LESS DISTRIBUTIONS
Dividends (from Net Investment Income) ... -- --
Distributions (from Capital Gains) ....... -- --
----------- -----------
Total Distributions .............. -- --
----------- -----------
NET ASSET VALUE END OF PERIOD ............ $ 20.45 $ 17.81
=========== ===========
TOTAL RETURN(a) .......................... 14.82% 18.73%
RATIOS/SUPPLEMENTAL DATA
Net Assets End of Period (thousands) ..... $ 4,721 $ 3,641
Ratio of Expenses to Average Net
Assets ........................... 1.95% 1.84%
Ratio of Net Investment Income (Loss)
to Average Net Assets ............ (0.79%) (0.60%)
Portfolio Turnover Rate .................. 54% 38%
Average Commission Paid Per Equity
Share Traded(j) .................. $ 0.0600 $ 0.0600
See accompaniying notes.
50
<PAGE>
FINANCIAL HIGHLIGHTS
Selected data for each share of capital stock outstanding throughout each period
SECURITY VALUE SERIES (CLASS A)
Fiscal Period Ended September 30
-----------------------------------
1998(f)(g)(m) 1997(f)(g)(i)
------------- -------------
PER SHARE DATA
NET ASSET VALUE BEGINNING OF PERIOD ....... $ 12.95 $ 10.00
INCOME FROM INVESTMENT OPERATIONS:
Net Investment Income (Loss) .............. 0.01 0.05
Net Gain (Loss) on Securities
(realized and unrealized) ......... 1.82 2.90
----------- -----------
Total from Investment Operations .......... 1.83 2.95
LESS DISTRIBUTIONS
Dividends (from Net Investment Income) .... (0.05) --
Distributions (from Capital Gains) ........ (0.28) --
----------- -----------
Total Distributions ............... (0.33) --
----------- -----------
NET ASSET VALUE END OF PERIOD ............. $ 14.45 $ 12.95
=========== ===========
TOTAL RETURN (a) .......................... 14.56% 29.50%
RATIOS/SUPPLEMENTAL DATA
Net Assets End of Period (thousands) ...... $ 9,636 $ 4,631
Ratio of Expenses to Average Net
Assets ............................ 1.09% 1.10%
Ratio of Net Investment Income (Loss)
to Average Net Assets ............. 0.23% 1.43%
Portfolio Turnover Rate ................... 103% 35%
Average Commission Paid Per Equity
Share Traded (j) .................. $ 0.0600 $ 0.0600
SECURITY VALUE SERIES (CLASS B)
Fiscal Period Ended September 30
----------------------------------
1998(f)(g)(m) 1997(f)(g)(i)
------------- -------------
PER SHARE DATA
NET ASSET VALUE BEGINNING OF PERIOD ....... $ 12.91 $ 10.00
INCOME FROM INVESTMENT OPERATIONS:
Net Investment Income ..................... (0.05) 0.01
Net Gain (Loss) on Securities
(realized and unrealized) ......... 1.81 2.90
----------- -----------
Total from Investment Operations .......... 1.76 2.91
LESS DISTRIBUTIONS
Dividends (from Net Investment Income) .... -- --
Distributions (from Capital Gains) ........ (0.28) --
----------- -----------
Total Distributions ............... (0.28) --
----------- -----------
NET ASSET VALUE END OF PERIOD ............. $ 14.39 $ 12.91
=========== ===========
TOTAL RETURN(a) ........................... 14.03% 29.10%
RATIOS/SUPPLEMENTAL DATA
Net Assets End of Period (thousands) ...... $ 5,783 $ 3,572
Ratio of Expenses to Average Net
Assets ............................ 2.13% 2.26%
Ratio of Net Investment Income (Loss)
to Average Net Assets ............. (0.81%) 0.27%
Portfolio Turnover Rate ................... 103% 35%
Average Commission Paid Per Equity
Share Traded(j) ................... $ 0.0600 $ 0.0600
See accompanying notes.
51
<PAGE>
FINANCIAL HIGHLIGHTS
Selected data for each share of capital stock outstanding throughout each period
SECURITY SMALL COMPANY SERIES (CLASS A)
Fiscal Period Ended September 30
--------------------------------
1998(f)(g)(l)(m)
----------------
PER SHARE DATA
NET ASSET VALUE BEGINNING OF PERIOD .......................$ 10.00
INCOME FROM INVESTMENT OPERATIONS:
Net Investment Income (Loss) .............................. 0.01
Net Gain (Loss) on Securities
(realized and unrealized) ......................... 0.74
-----------
Total from Investment Operations .......................... 0.75
LESS DISTRIBUTIONS
Dividends (from Net Investment Income) .................... (0.01)
Distributions (from Capital Gains) ........................ --
-----------
Total Distributions ............................... (0.01)
-----------
NET ASSET VALUE END OF PERIOD .............................$ 10.74
===========
TOTAL RETURN (a) .......................................... 7.47%
RATIOS/SUPPLEMENTAL DATA
Net Assets End of Period (thousands) ......................$ 2,120
Ratio of Expenses to Average Net
Assets ............................................ 1.34%
Ratio of Net Investment Income (Loss)
to Average Net Assets ............................. 0.14%
Portfolio Turnover Rate ................................... 341%
Average Commission Paid Per Equity
Share Traded (j) ..................................$ 0.0672
SECURITY SMALL COMPANY SERIES (CLASS B)
Fiscal Period Ended September 30
--------------------------------
1998(f)(g)(l)(m)
----------------
PER SHARE DATA
NET ASSET VALUE BEGINNING OF PERIOD .......................$ 10.00
INCOME FROM INVESTMENT OPERATIONS:
Net Investment Income ..................................... (0.04)
Net Gain (Loss) on Securities
(realized and unrealized) ......................... 0.75
-----------
Total from Investment Operations .......................... 0.71
LESS DISTRIBUTIONS
Dividends (from Net Investment Income) .................... --
Distributions (from Capital Gains) ........................ --
-----------
Total Distributions ............................... --
-----------
NET ASSET VALUE END OF PERIOD .............................$ 10.71
===========
TOTAL RETURN(a) ........................................... 7.10%
RATIOS/SUPPLEMENTAL DATA
Net Assets End of Period (thousands) ......................$ 1,706
Ratio of Expenses to Average Net
Assets ............................................ 2.46%
Ratio of Net Investment Income (Loss)
to Average Net Assets ............................. (0.97%)
Portfolio Turnover Rate ................................... 341%
Average Commission Paid Per Equity
Share Traded(j) ...................................$ 0.0672
See accompanying notes.
52
<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
------------------------------------------------------------------------------------------
1998(g)(m) 1997(g) 1996(g) 1995(g) 1994(c) 1993
----------- ----------- ------------ ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
PER SHARE DATA
NET ASSET VALUE BEGINNING OF PERIOD .. $ 9.24 $ 8.25 $ 8.20 $ 6.82 $ 8.13 $ 6.66
INCOME FROM INVESTMENT OPERATIONS:
Net Investment Income ................ (0.03) (0.08) (0.05) (0.02) (0.05) (0.03)
Net Gain (Loss) on Securities
(realized and unrealized) .... 0.63 1.65 1.10 1.54 (0.19) 1.79
---------- ----------- ------------ ----------- ----------- -----------
Total from Investment Operations ..... 0.60 1.57 1.05 1.52 (0.24) 1.76
LESS DISTRIBUTIONS
Dividends (from Net Investment Income) -- -- -- -- -- --
Distributions (from Capital Gains) ... (0.47) (0.58) (1.00) (0.14) (1.07) (0.29)
---------- ----------- ------------ ----------- ----------- -----------
Total Distributions .......... (0.47) (0.58) (1.00) (0.14) (1.07) (0.29)
---------- ----------- ------------ ----------- ----------- -----------
NET ASSET VALUE END OF PERIOD ........ $ 9.37 $ 9.24 $ 8.25 $ 8.20 $ 6.82 $ 8.13
========== =========== ============ =========== =========== ===========
TOTAL RETURN(a) ...................... 7.24% 20.57% 15.36% 22.69% (3.6%) 26.80%
RATIOS/SUPPLEMENTAL DATA
Net Assets End of Period (thousands) . $ 88,574 $ 84,504 $ 74,230 $ 66,052 $ 60,695 $ 71,056
Ratio of Expenses to Average Net
Assets ....................... 1.23% 1.71% 1.31% 1.32% 1.33% 1.30%
Ratio of Net Investment Income (Loss)
to Average Net Assets ........ (0.64%) (1.01%) (.61%) (.31%) (.80%) (.50%)
Portfolio Turnover Rate .............. 139% 68% 161% 180% 111% 101%
Average Commission Paid Per Equity
Share Traded(j) .............. $ 0.0592 $ 0.0600 $ 0.0606 -- -- --
SECURITY ULTRA FUND (CLASS B)
Fiscal Period Ended September 30
-------------------------------------------------------------------------------
1998(g)(m) 1997(g) 1996(g) 1995(g) 1994(c)
----------- ------------ ----------- ------------ ----------
PER SHARE DATA
NET ASSET VALUE BEGINNING OF PERIOD ............ $ 8.90 $ 8.03 $ 8.11 $ 6.81 $ 8.30
INCOME FROM INVESTMENT OPERATIONS:
Net Investment Income .......................... (0.07) (0.15) (0.13) (0.09) (0.10)
Net Gain (Loss) on Securities
(realized and unrealized) .............. 0.60 1.60 1.05 1.53 (0.32)
---------- ----------- ---------- ----------- ----------
Total from Investment Operations ............... 0.53 1.45 0.92 1.44 (0.42)
LESS DISTRIBUTIONS
Dividends (from Net Investment Income) ......... -- -- -- -- --
Distributions (from Capital Gains) ............. (0.47) (0.58) (1.00) (0.14) (1.07)
---------- ----------- ---------- ----------- ----------
Total Distributions .................... (0.47) (0.58) (1.00) (0.14) (1.07)
---------- ----------- ---------- ----------- ----------
NET ASSET VALUE END OF PERIOD .................. $ 8.96 $ 8.90 $ 8.03 $ 8.11 $ 6.81
========== =========== ========== =========== ==========
TOTAL RETURN(a) ................................ 6.71% 19.58% 13.81% 21.53% (5.70%)
RATIOS/SUPPLEMENTAL DATA
Net Assets End of Period (thousands) ........... $ 7,928 $ 5,964 $ 2,698 $ 5,428 $ 1,254
Ratio of Expenses to Average Net
Assets ................................. 2.23% 2.71% 2.31% 2.32% 2.36%
Ratio of Net Investment Income (Loss)
to Average Net Assets .................. (1.64%) (2.01%) (1.61%) (1.31%) (1.76%)
Portfolio Turnover Rate ........................ 139% 68% 161% 180% 110%
Average Commission Paid Per Equity
Share Traded(j) ........................ $ 0.0592 $ 0.0600 $ 0.0606 -- --
</TABLE>
See accompanying notes.
53
<PAGE>
FINANCIAL HIGHLIGHTS
Selected data for each share of capital stock outstanding throughout each period
(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 1998
---- ---- ---- ----
Asset Allocation Series Class A 3.6% 3.1% 2.4% 2.5%
Class B 4.7% 3.9% 3.3% 3.4%
Social Awareness Series Class A N/A N/A 1.7% 1.5%
Class B N/A N/A 2.8% 2.6%
Value Series Class A N/A N/A 1.9% 1.7%
Class B N/A N/A 2.8% 2.8%
Small Company Series Class A N/A N/A N/A 2.4%
Class B N/A N/A N/A 3.5%
(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) Security Value Series was initially capitalized on May 1, 1997, with a net
asset value of $10 per share. Percentage amounts for the period, except for
total return, have been annualized.
(j) Brokerage commissions paid on portfolio transactions increase the cost of
securities purchased or reduce the proceeds of securities sold and are not
reflected in the Fund's statement of operations. Shares traded on a
principal basis, such as most over-the-counter and fixed-income
transctions, pay a "spread" or "mark-up" rather than a commission and are
therefore excluded from this calculation. Generally, non-U.S. commissions
are lower than U.S. commissions when expressed as cents per share but
higher when expressed as a percentage of transactions because of the lower
per-share prices of many non-U.S. Securities. Prior to 1996, average
commission information was not required to be disclosed.
(k) Meridian Investment Management Corporation (Meridian) became the
sub-advisor of Asset Allocation Series effective August 1, 1997. Prior to
August 1, 1997 SMC paid Templeton/Franklin Investment Services, Inc. and
Meridian for research services provided to Asset Allocation Series.
(l) Security Small Company Series was initially capitalized on October 15,
1997, with a net asset of value of $10 per share. Percentage amounts for
the period, except for total return, have been annualized.
(m) Unaudited figures for the six months ended March 31, 1998. Percentage
amounts for the period, except total return, have been annualized.
See accompanying notes.
54
<PAGE>
NOTES TO FINANCIAL STATEMENTS (Unaudited)
March 31, 1998
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 six Series, the Equity Series, the Global Series, the Asset
Allocation Series, the Social Awareness Series, Value Series and the Small
Company Series with each Series, in effect representing a separate Fund. Class A
shares are sold with a sales charge at the time of purchase. Class A shares are
not subject to a sales charge when they are redeemed. The Funds began offering
an additional class of shares ("B"shares) to the public on October 19, 1993. The
shares are offered without a front-end sales charge but incur additional class -
specific expenses. Redemptions of the shares within five years of acquisition
incur a contingent deferred sales charge. The following is a summary of the
significant accounting policies followed by the Funds in the preparation of
their financial statements. These policies are in conformity with generally
accepted accounting principles.
A. SECURITY VALUATION -- Valuations of the Funds' securities are supplied by
a pricing service approved by the Board of Directors. Securities listed or
traded on a national securities exchange are valued on the basis of the last
sales price. If there are no sales on a particular day, then the securities are
valued at the last bid price. If a security is traded on multiple exchanges, its
value will be based on prices from the principal exchange where it is traded.
All other securities for which market quotations are available are valued on the
basis of the current bid price. If there is no bid price or if the bid price is
deemed to be unsatisfactory by the Board of Directors or the Funds' investment
manager, then the securities are valued in good faith by such method as the
Board of Directors determines will reflect the fair market value. The Funds
generally will value short-term debt securities at prices based on market
quotations for securities of similar type, yield, quality and duration, except
those securities purchased with 60 days or less to maturity are valued on the
basis of amortized cost which approximates market value.
Generally, trading in foreign securities markets is substantially completed
each day at various times prior to the close of the New York Exchange. The
values of foreign securities are determined as of the close of such foreign
markets or the close of the New York 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. dollars
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 -- Growth & Income Fund, Asset Allocation Series, Social
Awareness Series and Ultra Fund utilize futures contracts to a limited extent,
with the objectives of maintaining full exposure to the underlying stock market,
enhancing returns, maintaining liquidity, and minimizing transaction costs.
Growth & Income Fund, Asset Allocation Series, Social
55
<PAGE>
NOTES TO FINANCIAL STATEMENTS (Unaudited)
Awareness 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 the redemptions, the Growth & Income Fund, Asset Allocation Series,
Social Awareness 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 prices. Upon entering into a futures contract, the Funds are required
to deposit either cash or securities, representing the initial margin, equal to
a certain percentage of the contract value. Subsequent changes in the value of
the contract, or variation margin, are recorded as unrealized gains or losses.
The variation margin is paid or received in cash daily by the 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, 1998.
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 inocme 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, Social Awareness, Value and Small Company 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 and extraordinary items and Class B distribution fees. SMC
also serves as Investment Advisor to the Asset Allocation, Social Awareness,
Value Series and Small Company Series, and accordingly receives a fee equal to
1% of the average net assets of these Series.
SMC also acts as the administrative agent and transfer agent for the Asset
Allocation, Social Awareness, Value and Small Company 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, from Asset Allocation
Series, an administrative fee equal to .045% of the average daily net assets of
the Series plus, the greater of .10% of its average net assets or $60,000. For
administrative services provided to the Social Awareness Series, Value Series
and the Small Company Series, SMC receives an administrative fee equal to .09%
of the average daily net assets of each Series. For transfer agent services, SMC
is paid an annual fixed charge per account as well as a transaction fee for all
shareholder and dividend payments.
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 Meridian Investment Management Corporation for
subadvisory services provided to the asset Allocation Series, an annual fee
equal to the following schedule:
AVERAGE DAILY NET ASSETS OF THE SERIES ANNUAL FEES
- -------------------------------------- -----------
Less Than $100 Million................................... .40%, plus
$100 Million but less than $200 Million.................. .35%, plus
$200 Million but less than $400 Million.................. .30%, plus
$400 Million or more..................................... .25%
SMC pays Strong Capital Management, Inc. ("Strong") with respect to Small
Company Series, an annual fee based on the combined average net assets of the
Series and another fund within the Security Funds for which Strong provides
advisory services. The fee is equal to .50% of the combined average net assets
under $150,000,000, .45% of the combined average net assets at or above
$150,000,000 but less than $500,000,000, and .40% of the combined average net
assets at or above $500,000,000.
SMC has agreed to limit the total expenses of the Asset Allocation Series,
Social Awareness Series, Value Series and the Small Company Series to 2% of the
average net assets, excluding 12b-1 fees. SMC waived management fees on the
Asset Allocation Series, Social Awareness Series and Value Series until February
1, 1998. SMC has also agreed to waive the management fees for the Small Company
Series until September 30, 1998.
56
<PAGE>
NOTES TO FINANCIAL STATEMENTS (Unaudited)
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. (SDI), a wholly-owned subsidiary of SMC and the
national distributor of 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 $10,454 $7,249 $87,688 $86,005
Equity Series $117,403 $60,299 $585,441 $498,012
Global Series $1,347 $16,236 $7,533 $21,565
Asset Allocation Series $821 $6,858 $4,361 $2,740
Social Awareness Series $4,023 $560 $23,900 $9,735
Value Series $4,239 $2,374 $72,478 $77,666
Small Company Series $0 $0 $14,410 $6,738
Ultra Fund $3,133 $3,989 $14,212 $9,271
Certain officers and directors of the Funds are also officers and/or
directors of Security Benefit Life Insurance Company and its subsidiaries, which
include SMC and SDI.
3. FEDERAL INCOME TAX MATTERS
For federal income tax purposes, the amounts of unrealized appreciation
(depreciation) at March 31, 1998, were as follows:
GROSS GROSS NET
UNREALIZED UNREALIZED UNREALIZED
APPRECIATION DEPRECIATION APPRECIATION
------------ ------------ ------------
Growth & Income Fund $ 11,109,339 $(1,290,289) $ 9,819,050
Equity Series 393,135,718 (187,144) 392,948,574
Global Series 7,106,893 (1,490,138) 5,616,755
Asset Allocation Series 1,231,577 (429,790) 801,787
Social Awareness Series 3,047,159 (36,007) 3,011,152
Value Series 2,474,928 (180,098) 2,294,830
Small Company Series 595,145 (13,946) 581,199
Ultra Fund 22,855,646 (1,564,983) 21,290,663
4. INVESTMENT TRANSACTIONS
Investment transactions for the period ended March 31, 1998, (excluding
overnight investments and short-term commercial paper) are as follows:
PROCEEDS
PURCHASES FROM SALES
--------- ---------
Growth & Income Fund $ 84,535,621 $ 87,038,836
Equity Series 232,973,941 245,131,110
Global Series 16,134,048 19,325,909
Asset Allocation Series 1,869,710 2,155,734
Social Awareness Series 4,177,762 2,769,227
Value Series 11,073,295 5,861,546
Small Company Series 7,887,160 2,885,104
Ultra Fund 60,978,475 57,845,787
5. FORWARD FOREIGN EXCHANGE CONTRACTS
At March 31, 1998, Global Series had the following open forward foreign
exchange contracts to sell currency (excluding foreign currency contracts used
for purchase and sale settlements):
SETTLEMENT FOREIGN U.S. UNREALIZED
CURRENCY TYPE DATE AMOUNT AMOUNT GAIN (LOSS)
- -------- ---- ------- ---------- --------- -----------
Australian Dollar Sell 5/4/98 $1,305,170 $917,600 $53,525
Canadian Dollar Sell 6/1/98 1,472,878 1,042,008 2,207
Canadian Dollar Buy 6/1/98 145,359 102,071 548
German Deutsche Mark Sell 10/1/98 1,902,027 1,039,984 (1)
British Pound Sell 4/1/98 1,161,148 1,857,430 (87,028)
British Pound Buy 4/1/98 1,161,148 1,934,519 9,940
Japanese Yen Sell 7/8/98 176,720,700 1,356,000 10,825
Japanese Yen Buy 7/8/98 176,720,700 1,406,116 (60,942)
New Zealand Dollar Sell 4/6/98 917,017 584,919 78,302
New Zealand Dollar Buy 4/6/98 917,017 521,736 (15,119)
Swedish Krona Sell 10/1/98 5,481,412 693,323 3,230
--------
($4,513)
========
<PAGE>
The Security Group of Mutual Funds
Security Growth and Income Fund
Security Equity Fund
o Equity Series
o Global Series
o Asset Allocation Series
o Social Awareness Series
o Value Series
o Small Company Series
Security Ultra Fund
Security Income Fund
o Corporate Bond Series
o U.S. Government Series
o Limited Maturity Bond Series
o High Yield Series
Security Municipal Bond Fund
Security Cash Fund
This report is submitted for the general information of the shareholders of the
Funds. The report is not authorized for distribution to prospective investors in
the Funds unless preceded or accompanied by an effective prospectus which
contains details concerning the sales charges and other pertinent information.
SECURITY FUNDS
OFFICERS AND DIRECTORS
DIRECTORS
Donald A. Chubb, Jr.
John D. Cleland
Donald L. Hardesty
Penny A. Lumpkin
Mark L. Morris, Jr., D.V.M.
Maynard F. Oliverius
James R. Schmank
OFFICERS
John D. Cleland, President
James R. Schmank, Vice President
Mark E. Young, Vice President
Steven M. Bowser, Vice President, Equity Fund
David Eshnaur, Vice President, Equity Fund
Terry A. Milberger, Vice President, Equity Fund
Michael A. Petersen, Vice President, Growth and Income Fund
James P. Schier, Vice President, Equity Fund
Cindy L. Shields, Vice President, Ultra and Equity Fund
Jane A. Tedder, Vice President, Equity Fund
Amy J. Lee, Secretary
Christopher D. Swickard, Assistant Secretary
Brenda M. Harwood, Treasurer
Security Distributors, Inc.
700 SW Harrison St.
Topeka, KS 66636-0001
(785) 431-3127
(800) 888-2461
