<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
RYDEX SERIES TRUST
[LOGO] SEMI-ANNUAL REPORT
September 30, 1998
6116 Executive Boulevard, Suite 400
Rockville, MD 20852
(301) 468-8520 (800) 820-0888
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
DEAR SHAREHOLDER:
The U.S. stock market staged a powerful rally during the first half of 1998.
The advance continued briefly into the third quarter, until late July, when the
market, by most broad-based measures, had peaked. In dramatic fashion, the
market quickly retreated, giving back most of the year's gains, resulting in the
worst performing quarter for stocks since third quarter of 1990. Several
fundamental economic factors, highlighted briefly below, led to heightened
market volatility during the reporting period.
ECONOMIC REVIEW
In April, investors were struck with the realization that the economic and
political woes of Asia were not improving and could even become worse. Exports
to Asia and Europe contracted, the trade deficit grew, and investors became
concerned over the ability of corporations to sustain their earnings growth. In
June, Federal Reserve Chairman Alan Greenspan described the current economy as
the most impressive he has ever witnessed and warned that the potential for
inflation was still present. Investors interpreted the comments as a possibility
that the Fed would raise rates. Yet investors seemed more concerned with a
potential economic slowdown rather than the Fed's view that the economy may be
overheating. By early August, domestic, political and economic uncertainty,
coupled with the deepening global economic crisis, became too much for the
markets to bear. U.S. stocks came under severe selling pressure as investors
sought shelter from the global economic crisis that started in Asia, moved to
Russia, and began threatening several emerging markets in Latin America. The
pullback culminated on August 31, when the Dow Jones Industrial Average tumbled
512 points to post its second worst point loss in history, wiping out all of the
year's gains. Adding to the turmoil, the market had to face the near-collapse of
one of the country's largest hedge funds, Long Term Capital Management. Taking
note of the severe negative investor sentiment, Greenspan indicated that the Fed
must take action to contain the effects of the global economic crisis on U.S.
growth. U.S. stocks rose sharply in reaction to the favorable comments. In an
effort to alleviate further economic pressures on September 29, the Federal
Reserve Board cut the federal funds rate by 0.25%. The following day investors
expressed disappointment that the Fed didn't implement a deeper cut in interest
rates and once again, U.S. stocks plummeted, ending the worst quarter for U.S.
stocks in eight years.
<PAGE>
While the equity markets languished, the bond market exploded as investors
pursued a "flight to quality" investment strategy. Strong demand for high
quality, liquid investment alternatives sent the price on longer term U.S.
Treasury Bonds soaring. The yield on the bellwether 30-year Treasury Bond fell
to 4.978% on September 30,1998. This was the first time the yield on long-term
U.S. Government Bonds fell below 5% since July 19, 1967.
SUMMARY
During the second and third quarter, investors endured economic uncertainty
and increased volatility in the equity markets. Although it is projected that
this environment is likely to continue, the economic fundamentals of lower
interest rates, benign inflation, high employment, and strong productivity are
still in place to support a strong stock market and provide investment
opportunities among various market segments. As always, we welcome your
questions or comments about the Rydex Funds. Feel free to contact us over the
Internet via our web site at WWW.RYDEXFUNDS.COM or call us at 800-820-0888.
Sincerely,
/s/ Albert P. Viragh, Jr.
Albert P. (Skip) Viragh
Chairman of the Board
2
<PAGE>
RYDEX SERIES TRUST
NOVA FUND
SCHEDULE OF INVESTMENTS (UNAUDITED)
- --------------------------------------------------------------------------------
September 30, 1998
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
MARKET
VALUE
CONTRACTS (NOTE 1)
----------- ------------
<S> <C> <C>
OPTIONS PURCHASED 47.2%
Call Options on:
S&P 500 Index Expiring December 1998
at 550 1,801 $214,319,000
S&P 500 Index Expiring December 1998
at 400 458 70,788,480
------------
Total Call Options (Cost
$307,628,358) 285,107,480
------------
</TABLE>
<TABLE>
<CAPTION>
FACE
AMOUNT
-----------
<S> <C> <C>
U.S. TREASURY OBLIGATIONS 4.1%
U.S. Treasury Bill 4.21% 12/17/98 $25,000,000 24,774,882
------------
Total U.S. Treasury Obligations
(Cost $24,744,882) 24,774,882
------------
</TABLE>
See Notes to Financial Statements.
3
<PAGE>
RYDEX SERIES TRUST
NOVA FUND
SCHEDULE OF INVESTMENTS (UNAUDITED) (CONTINUED)
- --------------------------------------------------------------------------------
September 30, 1998
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
MARKET
VALUE
SHARES (NOTE 1)
--------- ------------
<S> <C> <C>
COMMON STOCKS 27.1%
Microsoft Corporation* 49,727 $ 5,473,078
General Electric Company 65,077 5,177,689
Exxon Corporation 48,552 3,407,744
Merck & Company, Inc. 23,915 3,098,487
Intel Corporation 35,416 3,036,922
Coca-Cola Company 49,299 2,840,855
Pfizer, Inc. 25,881 2,741,768
Wal-Mart Stores, Inc. 45,313 2,475,223
International Business Machines
Corporation 19,044 2,437,632
Philip Morris Companies, Inc. 49,554 2,282,581
AT&T Corporation 36,399 2,127,067
Johnson & Johnson 26,862 2,101,951
Royal Dutch Petroleum Company 43,384 2,066,163
Bristol-Myers Squibb Company 19,626 2,038,651
Cisco Systems, Inc.* 31,729 1,961,249
MCI WorldCom, Inc.* 39,814 1,945,957
Procter & Gamble Company 26,261 1,862,890
Lucent Technologies, Inc. 26,052 1,799,216
Eli Lilly and Company 22,430 1,756,549
American International Group, Inc. 22,380 1,723,260
SBC Communications, Inc. 37,739 1,677,027
BellSouth Corporation 20,904 1,573,026
Schering-Plough Corporation 15,015 1,554,991
Bell Atlantic Corporation 30,968 1,500,013
American Home Products Corporation 25,976 1,360,493
Abbott Laboratories 30,878 1,341,263
Dell Computer Corporation* 19,578 1,287,254
<CAPTION>
MARKET
VALUE
SHARES (NOTE 1)
--------- ------------
<S> <C> <C>
Freddie Mac 19,734 $ 1,267,910
Mobil Corporation 16,488 1,252,058
Warner-Lambert Company 16,134 1,218,117
E. I. du Pont de Nemours and Company 21,221 1,191,029
Home Depot, Inc. 29,703 1,173,268
Chevron Corporation 13,762 1,156,868
The Walt Disney Company 45,168 1,143,315
Ford Motor Company 24,275 1,139,408
Ameritech Corporation/DEL 23,233 1,100,663
Hewlett-Packard Company 20,724 1,097,077
Amoco Corporation 20,358 1,096,787
Compaq Computer Corporation 34,126 1,079,235
GTE Corporation 19,579 1,076,845
Time Warner, Inc. 11,726 1,026,758
Nationsbank Corporation 19,039 1,018,587
First Union Corporation 18,067 924,805
Travelers Group, Inc. 22,875 857,813
PepsiCo, Inc. 29,007 853,894
Texaco, Inc. 13,432 842,018
McDonald's Corporation 13,880 828,462
Gillette Company 21,448 820,386
BankAmerica Corporation 13,559 815,235
Citigroup, Inc. 8,747 812,924
Unilever N V - NY Shares 13,125 803,906
Waste Management, Inc. 15,740 756,504
General Motors Corporation 13,808 755,125
American Express Company 9,312 722,844
Allstate Corporation 17,322 722,111
Fannie Mae 14,382 711,010
Chase Manhattan Corporation 16,437 710,900
Sprint Corporation 9,873 710,856
</TABLE>
* NON-INCOME PRODUCING SECURITIES
See Notes to Financial Statements.
4
<PAGE>
RYDEX SERIES TRUST
NOVA FUND
SCHEDULE OF INVESTMENTS (UNAUDITED) (CONTINUED)
- --------------------------------------------------------------------------------
September 30, 1998
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
MARKET
VALUE
SHARES (NOTE 1)
--------- ------------
<S> <C> <C>
Monsanto Company 12,349 $ 696,175
Raytheon Company, Class B 12,737 687,002
AirTouch Communications, Inc.* 11,969 682,233
Emerson Electric Company 10,817 673,358
Minnesota Mining and Manufacturing
Company 9,109 671,219
Tyco International Limited 12,108 668,967
Wells Fargo Company 1,880 667,400
Chrysler Corporation 13,358 639,514
EMC Corporation/MASS 11,169 638,727
Viacom, Inc., Class B* 10,873 630,634
Norwest Corporation 17,501 626,755
Boeing Company 18,070 620,027
Xerox Corporation 7,223 612,149
Bank One Corporation 14,323 610,518
Eastman Kodak Company 7,835 605,743
U S WEST, Inc. 11,396 597,578
Anheuser-Busch Companies, Inc. 10,988 593,352
MediaOne Group, Inc.* 13,130 583,464
Oracle Corporation* 19,987 582,121
Pharmacia & Upjohn, Inc. 11,593 581,824
U. S. Bancorp 15,879 564,697
Atlantic Richfield Company 7,873 558,491
Motorola, Inc. 13,058 557,413
Bank of New York Company, Inc. 20,156 551,771
Automatic Data Processing, Inc. 7,346 549,114
Medtronic, Inc. 9,352 541,247
Sara Lee Corporation 9,836 531,144
National City Corporation 7,956 524,599
Enron Corporation 9,930 524,428
<CAPTION>
MARKET
VALUE
SHARES (NOTE 1)
--------- ------------
<S> <C> <C>
Fleet Financial Group, Inc. 7,086 $ 520,378
Morgan Stanley Dean Witter & Company 11,957 514,898
Southern Company 17,314 509,681
Walgreen Company 11,566 509,627
Associates First Capital Corporation,
Class A 7,668 500,337
Lockheed Martin Corporation 4,839 487,832
Campbell Soup Company 9,666 485,112
Texas Instruments, Inc. 9,039 476,807
Duke Energy Corporation 7,173 474,763
First Chicago NBD Corporation 6,795 465,458
Wachovia Corporation 5,446 464,272
Kimberly-Clark Corporation 11,458 464,049
Gap, Inc. 8,650 456,287
Colgate-Palmolive Company 6,589 451,347
United Technologies Corporation 5,847 446,930
FirstEnergy Corporation 14,313 444,598
Caterpillar, Inc. 9,975 444,511
AlliedSignal, Inc. 12,562 444,381
Dow Chemical Company 5,170 441,712
Schlumberger Limited 8,687 437,065
Electronic Data Systems Corporation 13,110 435,088
Northern Telecom Limited 13,536 433,152
CVS Corporation 9,602 420,688
Cardinal Health, Inc. 4,015 414,549
Public Service Enterprise Group, Inc. 10,528 413,882
H. J. Heinz Company 8,079 413,039
Amgen, Inc.* 5,464 412,874
General Re Corporation 2,007 407,421
</TABLE>
* NON-INCOME PRODUCING SECURITIES
See Notes to Financial Statements.
5
<PAGE>
RYDEX SERIES TRUST
NOVA FUND
SCHEDULE OF INVESTMENTS (UNAUDITED) (CONTINUED)
- --------------------------------------------------------------------------------
September 30, 1998
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
MARKET
VALUE
SHARES (NOTE 1)
--------- ------------
<S> <C> <C>
Illinois Tool Works, Inc. 7,430 $ 404,935
Aluminum Company of America 5,698 404,558
Sun Microsystems, Inc.* 8,112 404,079
Computer Associates International, Inc. 10,586 391,682
Pitney Bowes, Inc. 7,425 390,277
USX-Marathon Group 11,003 389,919
Consolidated Edison, Inc. 7,470 389,374
PNC Bank Corporation 8,559 385,155
UST, Inc. 12,981 383,751
American Electric Power Company, Inc. 7,800 380,737
Fifth Third Bancorp 6,568 377,660
American General Corporation 5,883 375,777
Baxter International, Inc. 6,313 375,624
Household International, Inc. 10,009 375,337
International Paper Company 7,944 370,389
Comcast Corporation, Special Class A 7,881 369,914
Gannett Company, Inc. 6,845 366,635
CIGNA Corporation 5,539 366,266
Sears, Roebuck and Company 8,239 364,061
Williams Companies, Inc. 12,657 363,889
KeyCorp 12,236 353,314
Kroger Company 7,038 351,900
Dayton Hudson Corporation 9,834 351,566
Becton, Dickinson and Company 8,546 351,454
Marsh & McLennan Companies, Inc. 7,004 348,449
<CAPTION>
MARKET
VALUE
SHARES (NOTE 1)
--------- ------------
<S> <C> <C>
Ralston-Ralston Purina Group 11,905 $ 348,221
Phillips Petroleum Company 7,699 347,417
Aon Corporation 5,347 344,882
MBNA Corporation 11,993 343,300
Aetna, Inc. 4,895 340,203
Mellon Bank Corporation 6,174 339,956
Edison International 13,176 338,458
Halliburton Company 11,848 338,408
Hartford Financial Services Group, Inc. 7,128 338,134
Tele-Communications, Inc., Class A* 8,626 337,492
Goodyear Tire & Rubber Company 6,554 336,712
SYSCO Corporation 14,258 335,954
FPL Group, Inc. 4,791 333,873
Occidental Petroleum Corporation 15,412 331,358
CBS Corporation 13,493 327,205
Washington Mutual, Inc. 9,662 326,093
Merrill Lynch & Company 6,778 321,108
J. P. Morgan & Company, Inc. 3,770 319,036
Bestfoods 6,562 317,847
Houston Industries, Inc. 9,958 309,943
Comerica, Inc. 5,641 309,197
PPG Industries, Inc. 5,633 307,351
May Department Stores Company 5,892 303,438
IMS Health, Inc. 4,827 298,972
Barrick Gold Corporation 14,928 298,560
Albertson's, Inc. 5,470 296,064
PG&E Corporation 9,259 295,709
</TABLE>
* NON-INCOME PRODUCING SECURITIES
See Notes to Financial Statements.
6
<PAGE>
RYDEX SERIES TRUST
NOVA FUND
SCHEDULE OF INVESTMENTS (UNAUDITED) (CONTINUED)
- --------------------------------------------------------------------------------
September 30, 1998
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
MARKET
VALUE
SHARES (NOTE 1)
--------- ------------
<S> <C> <C>
Chubb Corporation 4,684 $ 295,092
Norfolk Southern Corporation 10,097 293,444
St. Paul Companies, Inc. 9,025 293,313
McGraw-Hill Companies, Inc. 3,690 292,433
BB&T Corporation 9,705 290,543
Kellogg Company 8,805 290,015
Textron, Inc. 4,779 289,727
Loews Corporation 3,427 289,153
J. C. Penney Company, Inc. 6,388 287,061
Clear Channel Communications, Inc. 5,992 284,620
Columbia/HCA Healthcare Corporation 14,135 283,583
First Data Corporation 11,992 281,812
Genuine Parts Company 9,355 281,235
PacifiCorp 14,631 280,732
Burlington Resources, Inc. 7,489 279,901
3Com Corporation* 9,300 279,581
SunTrust Banks, Inc. 4,506 279,372
AMR Corporation/DEL 5,025 278,573
General Dynamics Corporation 5,466 274,325
HBO & Company 9,445 272,724
Tenneco, Inc. 8,274 272,008
CSX Corporation 6,435 270,672
Nike, Inc., Class B 7,331 269,872
ALLTEL Corporation 5,654 267,858
Charles Schwab Corporation 6,766 266,411
Lowe's Companies, Inc. 8,317 264,585
Union Carbide Corporation 6,118 263,839
Archer-Daniels-Midland Company 15,744 263,712
SunAmerica, Inc. 4,323 263,703
<CAPTION>
MARKET
VALUE
SHARES (NOTE 1)
--------- ------------
<S> <C> <C>
Rite Aid Corporation 7,422 $ 263,481
ConAgra, Inc. 9,741 262,398
Dana Corporation 6,998 261,113
Honeywell, Inc. 4,051 259,517
Costco Companies. Inc. 5,442 257,815
Guidant Corporation 3,450 256,163
State Street Corporation 4,627 252,461
Progressive Corporation 2,222 250,530
Northrop Grumman Corporation 3,414 249,222
Burlington Northern Santa Fe
Corporation 7,728 247,296
Air Products & Chemicals, Inc. 8,296 246,806
Masco Corporation 9,978 245,708
Ingersoll-Rand Company 6,467 245,342
Seagram Company Limited 8,494 243,672
Federal Express Corporation* 5,385 242,998
Interpublic Group of Companies, Inc. 4,505 242,988
Delta Air Lines, Inc. 2,497 242,833
Hershey Foods Corporation 3,529 241,516
Avon Products, Inc. 8,578 240,720
Wm. Wrigley Jr. Company 3,155 239,583
Computer Sciences Corporation 4,386 239,037
Omnicom Group, Inc. 5,305 238,725
Nucor Corporation 5,863 238,184
Fortune Brands, Inc. 7,889 233,712
Weyerhaeuser Company 5,528 233,213
Applied Materials, Inc.* 9,210 232,553
TRW, Inc. 5,174 229,596
Dover Corporation 7,396 228,352
</TABLE>
* NON-INCOME PRODUCING SECURITIES
See Notes to Financial Statements.
7
<PAGE>
RYDEX SERIES TRUST
NOVA FUND
SCHEDULE OF INVESTMENTS (UNAUDITED) (CONTINUED)
- --------------------------------------------------------------------------------
September 30, 1998
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
MARKET
VALUE
SHARES (NOTE 1)
--------- ------------
<S> <C> <C>
New York Times Company, Class A 8,274 $ 227,535
American Stores Company 7,026 226,149
Clorox Company 2,740 226,050
BankBoston Corporation 6,811 224,763
Georgia-Pacific Group 4,920 224,475
Mattel, Inc. 8,003 224,084
Service Corporation International 6,947 221,436
Conseco, Inc. 7,197 219,958
Gateway 2000, Inc.* 4,213 219,603
Boston Scientific Corporation* 4,192 215,364
Browning-Ferris Industries, Inc. 6,898 208,665
Union Pacific Resources Group, Inc. 16,685 205,434
Tenet Healthcare Corporation * 7,144 205,390
Praxair, Inc. 6,195 202,499
Avery Dennison Corporation 4,635 202,492
Federated Department Stores, Inc.* 5,516 200,645
Fort James Corporation 6,104 200,288
Deere & Company 6,567 198,652
Marriott International, Inc., Class A 8,279 197,661
Ascend Communications, Inc.* 4,303 195,787
R. R. Donnelley & Sons Company 5,558 195,572
Micron Technology, Inc. 6,389 194,465
<CAPTION>
MARKET
VALUE
SHARES (NOTE 1)
--------- ------------
<S> <C> <C>
Franklin Resources, Inc. 6,420 $ 192,600
Cendant Corporation 16,540 192,278
AMP. Inc. 5,364 191,763
Tribune Company 3,810 191,691
V. F. Corporation 5,161 191,602
Rockwell International Corporation 5,259 189,981
Union Pacific Corporation 4,416 188,232
Limited, Inc. 8,440 185,152
Bankers Trust Corporation 3,036 179,124
Cincinnati Financial Corporation 5,777 177,643
Pioneer Hi-Bred International, Inc. 6,752 177,240
Sherwin-Williams Company 8,075 174,622
Unisys Corporation 7,547 171,694
TJX Companies, Inc. 9,334 166,262
Hilton Hotels Corporation 9,503 162,145
Baker Hughes, Inc. 7,704 161,303
Owens-Illinois, Inc.* 6,348 158,700
Kmart Corporation 13,007 155,271
United HealthCare Corporation 4,272 149,520
Tellabs, Inc.* 3,656 145,555
HEALTHSOUTH Corporation* 9,656 101,991
Lehman Brothers Holdings, Inc. 3,534 99,828
------------
Total Common Stock (Cost
$174,594,336) 164,176,309
------------
</TABLE>
* NON-INCOME PRODUCING SECURITIES
See Notes to Financial Statements.
8
<PAGE>
RYDEX SERIES TRUST
NOVA FUND
SCHEDULE OF INVESTMENTS (UNAUDITED) (CONTINUED)
- --------------------------------------------------------------------------------
September 30, 1998
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
MARKET
FACE VALUE
AMOUNT (NOTE 1)
----------- ------------
<S> <C> <C>
REPURCHASE AGREEMENTS 21.6%
Repurchase Agreements Collaterialized
by U.S. Treasury Obligations-
5.40% due 10/01/98 (Note 3) $33,121,988 $ 33,121,988
5.45% due 10/01/98 (Note 3) 66,243,977 66,243,977
5.50% due 10/01/98 (Note 3) 31,234,035 31,234,035
------------
Total Repurchase Agreements (Cost
$130,600,000) 130,600,000
------------
Total Investments 100% (Cost
$637,597,576) $604,658,671
------------
------------
- ------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
UNREALIZED
LOSS
CONTRACTS (NOTE 1)
----------- ------------
<S> <C> <C>
FUTURES CONTRACTS PURCHASED
S&P 500 Futures Contracts Expiring
December 1998 (Underlying Face
Amount at Market Value
$131,071,500) 511 $ (3,867,602)
------------
------------
</TABLE>
See Notes to Financial Statements.
9
<PAGE>
RYDEX SERIES TRUST
URSA FUND
SCHEDULE OF INVESTMENTS (UNAUDITED)
- --------------------------------------------------------------------------------
September 30, 1998
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
MARKET
VALUE
CONTRACTS (NOTE 1)
----------- ------------
<S> <C> <C>
OPTIONS PURCHASED 4.5%
Put Options on:
S&P 500 Futures Contract Expiring
December 1998 at 1400 750 $ 28,050,000
------------
Total Put Options (Cost
$21,602,100) 28,050,000
------------
</TABLE>
<TABLE>
<CAPTION>
FACE
AMOUNT
-----------
<S> <C> <C>
U.S. TREASURY OBLIGATIONS 85.1%
U.S. Treasury Bill 4.830% 10/15/98 $25,000,000 24,953,041
U.S. Treasury Bill 4.880% 11/12/98 75,000,000 74,572,999
U.S. Treasury Bill 4.730% 12/10/98 25,000,000 24,770,069
U.S. Treasury Bill 4.740% 12/10/98 25,000,000 24,769,583
U.S. Treasury Bill 4.650% 10/22/98 50,000,000 49,864,813
U.S. Treasury Bill 4.940% 10/29/98* 10,000,000 9,961,578
U.S. Treasury Bill 4.480% 11/05/98 100,000,000 99,564,444
U.S. Treasury Bill 4.940% 11/19/98 50,000,000 49,663,806
U.S. Treasury Bill 4.400% 11/27/98* 5,000,000 4,965,167
U.S. Treasury Bill 4.610% 11/27/98 50,000,000 49,635,042
U.S. Treasury Bill 4.680% 11/27/98 25,000,000 24,814,750
U.S. Treasury Bill 4.715% 12/03/98* 9,000,000 8,925,739
U.S. Treasury Bill 4.72% 12/03/98* 5,000,000 4,958,700
U.S. Treasury Bill 4.73% 12/03/98* 1,000,000 991,723
U.S. Treasury Bill 4.500% 12/17/98* 2,500,000 2,475,938
U.S. Treasury Bill 4.510% 12/17/98 50,000,000 49,517,681
U.S. Treasury Bill 4.620% 12/17/98 25,000,000 24,752,958
------------
Total U.S. Treasury Obligations
(Cost $529,158,031) 529,158,031
------------
</TABLE>
<TABLE>
<S> <C> <C>
REPURCHASE AGREEMENTS 10.4%
Repurchase Agreements Collateralized
by U.S. Treasury Obligations:
5.40% due 10/01/98 (Note 3) 16,408,825 $ 16,408,825
5.45% due 10/01/98 (Note 3) 32,817,652 32,817,652
5.50% due 10/01/98 (Note 3) 15,473,523 15,473,523
------------
Total Repurchase Agreements (Cost
$64,700,000) 64,700,000
------------
Total Investments 100% (Cost
$615,460,131) $621,908,031
------------
------------
- ------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
UNREALIZED
LOSS
CONTRACTS (NOTE 1)
----------- ------------
<S> <C> <C>
FUTURES CONTRACTS SOLD
S&P 500 Futures Contract Expiring Dec
1998 2336 $ (2,806,589)
------------
------------
(Underlying Face Amount at Market
Value $596,393,762)
</TABLE>
* A PORTION OF THIS HOLDING IS PLEDGED AS COLLATERAL FOR STOCK INDEX
FUTURES CONTRACTS.
See Notes to Financial Statements.
10
<PAGE>
RYDEX SERIES TRUST
U.S. GOVERNMENT MONEY MARKET FUND
SCHEDULE OF INVESTMENTS (UNAUDITED)
- --------------------------------------------------------------------------------
September 30, 1998
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
FACE MARKET
AMOUNT VALUE
----------- ------------
<S> <C> <C>
FEDERAL AGENCY DISCOUNT NOTES 76.8%
Farmer Mac 5.25% 10/26/98 $30,000,000 $ 29,890,625
Federal Farm Credit Banks 5.13%
10/06/98 35,000,000 34,975,063
Federal Farm Credit Banks 5.13%
10/27/98 35,000,000 34,870,325
Federal Home Loan Banks 5.41%
10/09/98 30,000,000 29,963,933
Federal Home Loan Banks 5.13%
10/15/98 35,000,000 34,930,175
Federal Home Loan Banks 5.10%
10/21/98 35,000,000 34,900,833
Federal Home Loan Banks 5.10%
10/23/98 35,000,000 34,890,917
Freddie Mac 5.25% 10/02/98 25,000,000 24,996,354
Freddie Mac 5.45% 10/02/98 30,000,000 29,995,458
Freddie Mac 5.44% 10/05/98 30,000,000 29,981,867
Freddie Mac 5.42% 10/06/98 30,000,000 29,977,417
Freddie Mac 5.43% 10/07/98 30,000,000 29,972,850
Freddie Mac 5.41% 10/08/98 30,000,000 29,968,442
Freddie Mac 5.42% 10/14/98 30,000,000 29,941,283
Freddie Mac 5.16% 10/20/98 30,000,000 29,918,300
Freddie Mac 5.41% 10/30/98 30,000,000 29,869,258
Freddie Mac 5.40% 11/04/98 30,000,000 29,847,000
Freddie Mac 5.34% 11/05/98 30,000,000 29,844,250
Fannie Mae 5.15% 10/05/98 30,000,000 29,982,833
Fannie Mae 5.15% 10/06/98 30,000,000 29,978,542
Fannie Mae 5.41% 10/13/98 30,000,000 29,945,900
Fannie Mae 5.41% 10/16/98 30,000,000 29,932,375
Fannie Mae 5.14% 10/19/98 30,000,000 29,922,900
Fannie Mae 5.45% 10/20/98 30,000,000 29,913,708
Fannie Mae 5.34% 12/10/98 20,000,000 19,792,333
------------
Total Federal Agency Discount Notes
(Cost $758,202,941) 758,202,941
------------
FEDERAL AGENCY BONDS 4.6%
Federal Farm Credit Banks 5.53%
10/01/98 20,000,000 20,000,000
Federal Farm Credit Banks 5.48%
12/01/98 25,000,000 25,000,000
------------
Total Federal Agency Bonds (Cost
$45,000,000) 45,000,000
------------
</TABLE>
See Notes to Financial Statements.
11
<PAGE>
RYDEX SERIES TRUST
U.S. GOVERNMENT MONEY MARKET FUND
SCHEDULE OF INVESTMENTS (UNAUDITED) (CONTINUED)
- --------------------------------------------------------------------------------
September 30, 1998
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
FACE MARKET
AMOUNT VALUE
----------- ------------
<S> <C> <C>
REPURCHASE AGREEMENTS 18.6%
Repurchase Agreements Collateralized by
U.S. Treasury Obligations: 5.40% due
10/01/98 (Note 3) $46,436,723 $ 46,436,723
5.45% due 10/01/98 (Note 3) 92,873,447 92,873,447
5.50% due 10/01/98 (Note 3) 43,789,830 43,789,830
------------
Total Repurchase Agreements (Cost
$183,100,000) 183,100,000
------------
Total Investments 100% (Cost
$986,302,941) $986,302,941
------------
------------
</TABLE>
See Notes to Financial Statements.
12
<PAGE>
RYDEX SERIES TRUST
OVER-THE-COUNTER FUND
SCHEDULE OF INVESTMENTS (UNAUDITED)
- --------------------------------------------------------------------------------
September 30, 1998
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
MARKET
VALUE
SHARES (NOTE 1)
---------- ------------
<S> <C> <C>
COMMON STOCKS 99.0%
Microsoft Corporation* 1,087,174 $119,657,082
Intel Corporation 746,954 64,051,306
Cisco Systems, Inc.* 723,544 44,724,064
MCI WorldCom, Inc.* 847,873 41,439,793
Dell Computer Corporation* 595,906 39,180,820
Oracle Corporation* 449,481 13,091,134
Amgen, Inc.* 118,074 8,921,967
Sun Microsystems, Inc.* 177,102 8,821,893
Tele-Communications,
Inc. Series A* 222,175 8,692,597
Comcast Corporation, Special Class A 152,275 7,147,408
BMC Software, Inc.* 97,443 5,852,670
HBO & Company 199,948 5,773,499
Yahoo! Inc.* 43,457 5,627,681
3Com Corporation* 168,022 5,051,161
Qwest Communications, Inc.* 161,287 5,050,299
Compuware Corporation* 84,682 4,985,653
Ericsson (LM) Telephone Company Class
B ADR 262,287 4,819,524
Costco Companies* 100,525 4,762,372
Level 3 Communications, Inc.* 142,426 4,548,730
Applied Materials, Inc.* 170,024 4,293,106
Ascend Communications, Inc.* 91,858 4,179,539
Paychex, Inc. 73,158 3,772,209
Staples, Inc.* 126,529 3,716,789
Tellabs, Inc.* 90,057 3,585,394
Peoplesoft, Inc.* 107,389 3,503,566
Panamsat Corporation 65,795 2,701,707
<CAPTION>
MARKET
VALUE
SHARES (NOTE 1)
---------- ------------
<S> <C> <C>
Nextel Communications, Inc.* 125,051 $ 2,524,467
Cintas Corporation 48,359 2,423,995
Apple Computer, Inc.* 63,422 2,417,964
Biogen, Inc.* 34,425 2,265,595
Network Associates, Inc.* 62,332 2,212,786
Chancellor Media Corporation* 65,795 2,195,908
Novell, Inc.* 165,158 2,023,186
Biomet, Inc.* 52,731 1,829,107
Linear Technology Corporation 36,516 1,825,800
Fiserv, Inc.* 37,751 1,738,905
Maxim Integrated Products, Inc.* 61,683 1,719,414
American Power Conversion, Inc.* 44,371 1,672,232
Chiron Corporation* 82,452 1,638,734
Altera Corporation* 46,443 1,631,310
Nordstrom, Inc.* 65,795 1,628,426
Qualcomm, Inc.* 32,290 1,547,902
PACCAR, Inc. 37,310 1,536,706
Quintiles Transnational Corporation* 34,993 1,530,944
Starbucks Corporation* 41,910 1,516,618
Bed Bath & Beyond, Inc.* 64,410 1,505,584
Sigma Aldrich Corporation 47,851 1,381,698
ADC Telecommunications, Inc.* 63,634 1,344,268
Parametric Technologies, Inc.* 131,590 1,324,124
</TABLE>
* NON-INCOME PRODUCING SECURITIES
See Notes to Financial Statements.
13
<PAGE>
RYDEX SERIES TRUST
OVER-THE-COUNTER FUND
SCHEDULE OF INVESTMENTS (UNAUDITED) (CONTINUED)
- --------------------------------------------------------------------------------
September 30, 1998
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
MARKET
VALUE
SHARES (NOTE 1)
---------- ------------
<S> <C> <C>
Genzyme Corporation* 35,577 $ 1,285,219
Centocor, Inc.* 32,277 1,278,976
Electronic Arts, Inc.* 28,360 1,244,295
USA Networks, Inc.* 61,586 1,197,078
Xilinx, Inc.* 33,717 1,180,095
Jacor Communications, Inc.* 23,162 1,172,576
Tech Data Corporation* 22,699 1,136,369
Quantum Corporation* 70,323 1,116,378
Reuters Group, PLC-Sponsored ADR 21,876 1,088,331
Adobe Systems, Inc. 31,241 1,083,672
KLA-Tencor Corporation* 40,440 1,005,945
Netscape, Inc.* 45,376 992,600
Apollo Group, Inc.* 35,565 991,374
Northwest Airlines Corporation Class
A* 38,893 974,756
McCormick & Company, Inc. 28,958 841,592
Fore Systems, Inc.* 44,523 740,195
<CAPTION>
MARKET
VALUE
SHARES (NOTE 1)
---------- ------------
<S> <C> <C>
First Health Group Corporation* 28,636 $ 694,423
Cracker Barrel Old Country Store,
Inc. 30,284 688,961
Cambridge Technology Partners, Inc.* 27,070 603,999
Autodesk, Inc. 22,505 590,756
Worthington Industries, Inc. 45,116 563,950
Adaptec, Inc.* 51,943 493,459
Fastenal Company 17,765 444,125
Atmel Corporation* 44,170 400,291
Oxford Health Plans, Inc.* 38,050 394,769
General Nutrition Companies* 36,510 394,763
------------
Total Common Stocks (Cost
$404,642,826) 491,986,583
------------
</TABLE>
* NON-INCOME PRODUCING SECURITIES
See Notes to Financial Statements.
14
<PAGE>
RYDEX SERIES TRUST
OVER-THE-COUNTER FUND
SCHEDULE OF INVESTMENTS (UNAUDITED) (CONTINUED)
- --------------------------------------------------------------------------------
September 30, 1998
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
MARKET
FACE VALUE
AMOUNT (NOTE 1)
---------- ------------
<S> <C> <C>
REPURCHASE AGREEMENTS 1.0%
Repurchase Agreements Collateralized by U.S.
Treasury Obligations:
5.40% due 10/01/98 (Note 3) $1,318,793 $ 1,318,793
5.45% due 10/01/98 (Note 3) 2,637,585 2,637,585
5.50% due 10/01/98 (Note 3) 1,243,622 1,243,622
------------
Total Repurchase Agreements (Cost $5,200,000) 5,200,000
------------
Total Investments 100% (Cost $409,842,826) $497,186,583
------------
------------
- ----------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
UNREALIZED
GAIN
CONTRACTS (NOTE 1)
----------- ----------
<S> <C> <C>
FUTURES CONTRACTS PURCHASED
NASDAQ 100 Futures Contract Expiring December
1998
(Underlying Face Amount at Market Value
$3,405,000) 25 $ 113,575
----------
----------
</TABLE>
* NON-INCOME PRODUCING SECURITIES
See Notes to Financial Statements.
15
<PAGE>
RYDEX SERIES TRUST
PRECIOUS METALS FUND
SCHEDULE OF INVESTMENTS (UNAUDITED)
- --------------------------------------------------------------------------------
September 30, 1998
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
MARKET
VALUE
SHARES (NOTE1)
-------- -----------
<S> <C> <C>
COMMON STOCKS 99.2%
Mining and Precious Metals Stocks
Barrick Gold Corporation 602,906 $12,058,120
Newmont Mining Corporation 236,431 5,733,457
Placer Dome, Inc. 377,681 5,216,719
Homestake Mining Company 318,988 3,867,729
Freeport-McMoRan Copper & Gold, Inc.,
Class B 273,278 3,245,176
Battle Mountain Gold Company 347,139 2,104,530
Ashanti Goldfields Company,
Ltd.--Sponsored GDR 163,237 1,489,538
Getchell Gold Corporation* 46,506 979,533
Hecla Mining Company 83,231 421,357
Coeur d'Alene Mines Corporation 33,081 241,905
-----------
Total Common Stocks (Cost
$29,320,505) 35,358,064
-----------
</TABLE>
<TABLE>
<CAPTION>
FACE AMOUNT
------------
<S> <C> <C>
REPURCHASE AGREEMENTS 0.8%
Face Amount Repurchase Agreements
Collateralized by U.S. Treasury
Obligations:
5.40% due 10/01/98 (Note 3) $ 76,084 $ 76,084
5.45% due 10/01/98 (Note 3) 152,169 152,169
5.50% due 10/01/98 (Note 3) 71,747 71,747
-------------
Total Repurchase Agreements (Cost
$300,000) 300,000
-------------
Total Investments 100% (Cost
$29,620,505) $ 35,658,064
-------------
-------------
</TABLE>
* NON-INCOME PRODUCING SECURITIES
See Notes to Financial Statements
16
<PAGE>
RYDEX SERIES TRUST
U.S. GOVERNMENT BOND FUND
SCHEDULE OF INVESTMENTS (UNAUDITED)
- --------------------------------------------------------------------------------
September 30, 1998
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
MARKET
VALUE
FACE AMOUNT (NOTE 1)
----------- -----------
<S> <C> <C>
U.S. TREASURY OBLIGATIONS 89.0%
U.S. Treasury Bond 5.50% due 8/15/2028 $56,013,000 $60,555,304
-----------
Total U.S. Treasury Obligations (Cost
$57,616,551) 60,555,304
-----------
</TABLE>
<TABLE>
<CAPTION>
CONTRACTS
-----------
<S> <C> <C>
OPTIONS PURCHASED 9.4%
Call Options on U.S Treasury Bond
Futures Contract Expiring December
1998 at 100 202 6,356,687
-----------
Total Call Options (Cost $5,219,187) 6,356,687
-----------
</TABLE>
<TABLE>
<CAPTION>
FACE AMOUNT
-----------
<S> <C> <C>
REPURCHASE AGREEMENTS 1.6%
Repurchase Agreements Collateralized by
U.S. Treasury Obligations:
5.40% due 10/01/98 (Note 3) $ 278,975 278,975
5.45% due 10/01/98 (Note 3) 557,951 557,951
5.50% due 10/01/98 (Note 3) 263,074 263,074
-----------
Total Repurchase Agreements (Cost
$1,100,000) 1,100,000
-----------
Total Investments 100.0% (Cost
$63,935,738) $68,011,991
-----------
-----------
</TABLE>
See Notes to Financial Statements
17
<PAGE>
RYDEX SERIES TRUST
JUNO FUND
SCHEDULE OF INVESTMENTS (UNAUDITED)
- --------------------------------------------------------------------------------
September 30, 1998
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
MARKET
VALUE
CONTRACTS (NOTE 1)
---------- -----------
<S> <C> <C>
OPTIONS PURCHASED 0.3%
Put options on:
U.S. Treasury Bond Futures Contracts
Expiring December 1998 at 132 15 $ 31,640
-----------
Total Put Options (Cost $124,126) 31,640
-----------
</TABLE>
<TABLE>
<CAPTION>
FACE
AMOUNT
----------
<S> <C> <C>
U.S. TREASURY OBLIGATIONS 69.8%
U.S. Treasury Bill 3.8% 10/15/98 $7,000,000 6,989,656
-----------
Total U.S. Treasury Obligations
(Cost $6,989,656) 6,989,656
-----------
REPURCHASE AGREEMENTS 29.9%
Repurchase Agreements Collateralized by
U.S. Treasury Obligations:
5.45% due 10/01/98 (Note 3) 2,282,526 2,282,526
5.50% due 10/01/98 (Note 3) 717,474 717,474
-----------
Total Repurchase Agreements (Cost
$3,000,000) 3,000,000
-----------
Total Investments 100% (Cost
$10,113,782) $10,021,296
-----------
-----------
- ----------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
UNREALIZED
LOSS
CONTRACTS (NOTE 1)
---------- -----------
<S> <C> <C>
FUTURES CONTRACTS SOLD
U.S. Treasury Bond Futures Contract
Expiring December 1998
(Underlying Face Amount at Market
Value $10,386,031) 79 $ (179,188)
-----------
-----------
</TABLE>
See Notes to Financial Statements
18
<PAGE>
RYDEX SERIES TRUST
ARKTOS FUND
SCHEDULE OF INVESTMENTS (UNAUDITED)
- --------------------------------------------------------------------------------
September 30, 1998
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
MARKET
FACE VALUE
AMOUNT (NOTE 1)
---------- -----------
<S> <C> <C>
U.S. TREASURY OBLIGATIONS 63.8%
U.S. Treasury Bill 3.000% 10/15/98 $4,000,000 $ 3,995,333
U.S. Treasury Bill 3.150% 10/15/98 5,000,000 4,993,875
-----------
Total U.S. Treasury Obligations
(Cost $8,989,208) 8,989,208
-----------
</TABLE>
<TABLE>
<S> <C> <C>
REPURCHASE AGREEMENTS 36.2%
Repurchase Agreements Collateralized by
U.S. Treasury Obligations:
5.40% due 10/01/98 (Note 3) 1,293,431 1,293,431
5.45% due 10/01/98 (Note 3) 2,586,863 2,586,863
5.50% due 10/01/98 (Note 3) 1,219,706 1,219,706
-----------
Total Repurchase Agreements (Cost
$5,100,000) 5,100,000
-----------
Total Investments 100% (Cost
$14,089,208) $14,089,208
-----------
-----------
</TABLE>
See Notes to Financial Statements.
19
<PAGE>
RYDEX SERIES TRUST
ARKTOS FUND
SCHEDULE OF INVESTMENTS (UNAUDITED) (CONTINUED)
- --------------------------------------------------------------------------------
September 30, 1998
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
MARKET
VALUE
SHARES (NOTE 1)
--------- ------------
<S> <C> <C>
COMMON STOCKS SOLD SHORT
Microsoft Corporation* (36,149) $ (3,978,679)
Intel Corporation (24,531) (2,103,533)
Cisco Systems, Inc.* (22,867) (1,413,466)
MCI WorldCom, Inc.* (26,542) (1,297,240)
Dell Computer Corporation* (18,741) (1,232,221)
Oracle Corporation* (14,276) (415,789)
Amgen, Inc.* (3,731) (281,924)
Sun Microsystems, Inc.* (5,519) (274,915)
Tele-Communications, Inc. Series A* (6,875) (268,984)
Comcast Corporation
Class A Special (4,817) (226,098)
BMC Software, Inc.* (3,145) (188,897)
HBO & Company (6,264) (180,873)
Yahoo! Inc.* (1,348) (174,566)
3Com Corporation* (5,256) (158,009)
Compuware Corporation* (2,648) (155,901)
Costco Companies* (3,226) (152,832)
Ericsson (LM) Telephone Company Class B
ADR (8,203) (150,730)
Qwest Communications, Inc.* (4,792) (150,050)
Level 3 Communications, Inc.* (4,431) (141,515)
Applied Materials, Inc.* (5,372) (135,643)
Ascend Communications, Inc.* (2,892) (131,586)
Staples, Inc.* (4,314) (126,724)
Paychex, Inc. (2,407) (124,111)
Tellabs, Inc.* (2,859) (113,824)
Peoplesoft, Inc.* (3,378) (110,207)
Panamsat Corporation (2,208) (90,666)
<CAPTION>
MARKET
VALUE
SHARES (NOTE 1)
--------- ------------
<S> <C> <C>
Nextel Communications, Inc.* (3,903) $ (78,792)
Cintas Corporation (1,535) (76,942)
Apple Computer, Inc.* (1,967) (74,992)
Biogen, Inc.* (1,083) (71,275)
Chancellor Media Corporation* (2,084) (69,554)
Network Associates, Inc.* (1,937) (68,764)
Novell, Inc.* (5,207) (63,786)
Linear Technology Corporation (1,147) (57,350)
Biomet, Inc.* (1,639) (56,853)
Fiserv, Inc.* (1,207) (55,597)
Maxim Integrated Products, Inc.* (1,925) (53,659)
Nordstrom, Inc.* (2,154) (53,312)
American Power Conversion, Inc.* (1,394) (52,536)
Chiron Corporation* (2,598) (51,635)
Altera Corporation* (1,410) (49,526)
Quintiles Transnational Corporation* (1,124) (49,175)
Qualcomm, Inc.* (1,015) (48,657)
Bed Bath & Beyond, Inc.* (2,069) (48,363)
Starbucks Corporation* (1,319) (47,731)
PACCAR, Inc. (1,158) (47,695)
Allied Waste Industries Inc. (1,989) (46,493)
Citrix Systems Inc. (605) (42,955)
Sigma Aldrich Corporation (1,468) (42,389)
ADC Telecommunications, Inc.* (1,944) (41,067)
Centocor, Inc.* (1,031) (40,853)
Parametric Technologies, Inc.* (4,049) (40,743)
</TABLE>
* NON-INCOME PRODUCING SECURITIES
See Notes to Financial Statements.
20
<PAGE>
RYDEX SERIES TRUST
ARKTOS FUND
SCHEDULE OF INVESTMENTS (UNAUDITED) (CONCLUDED)
- --------------------------------------------------------------------------------
September 30, 1998
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
MARKET
VALUE
SHARES (NOTE 1)
--------- ------------
<S> <C> <C>
Genzyme Corporation* (1,125) $ (40,641)
Electronic Arts, Inc.* (882) (38,698)
Jacor Communications, Inc.* (742) (37,564)
Concord Efs Inc (1,435) (37,041)
Xilinx, Inc.* (1,047) (36,645)
Tech Data Corporation* (717) (35,895)
Usa Networks, Inc.* (1,802) (35,026)
Quantum Corporation* (2,201) (34,941)
Reuters Hldgs, PLC-Sponsor ADR (693) (34,477)
Adobe Systems, Inc. (977) (33,890)
Pacificare Health System (447) (33,302)
Food Lion, Inc. (3,411) (33,257)
Synopsys, Inc. (988) (32,913)
Molex, Inc. (1,115) (32,335)
Immunex Corporation (583) (32,284)
Netscape, Inc.* (1,454) (31,806)
Apollo Group, Inc.* (1,134) (31,610)
KLA-Tencor Corporation* (1,255) (31,218)
<CAPTION>
MARKET
VALUE
SHARES (NOTE 1)
--------- ------------
<S> <C> <C>
Northwest Airlines Corporation Class A* (1,187) $ (29,749)
McCormick & Company (934) (27,144)
Herman Miller, Inc. (1,278) (25,241)
Fore Systems, Inc.* (1,513) (25,154)
Stewart Enterprises (1,371) (22,964)
Cracker Barrel Old Country Store, Inc. (916) (20,839)
Ross Stores, Inc. (692) (19,809)
Cambridge Technology Partners, Inc.* (830) (18,519)
Autodesk, Inc. (683) (17,929)
General Nutrition Companies* (1,068) (11,545)
------------
Total Common Stocks (Proceeds
$15,949,079) (16,052,113)
------------
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
UNREALIZED
LOSS
CONTRACTS (NOTE 1)
--------- ---------------
<S> <C> <C>
FUTURES CONTRACTS SOLD
NASDAQ 100 Futures Contract Expiring
December 1998
(Proceeds $3,442,811) (27) $ (234,589)
---------------
---------------
</TABLE>
See Notes to Financial Statements.
21
<PAGE>
RYDEX SERIES TRUST
STATEMENT OF ASSETS AND LIABILITIES (UNAUDITED)
- --------------------------------------------------------------------------------
September 30, 1998
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
U.S.
GOVERNMENT
MONEY OVER-THE-
NOVA URSA MARKET COUNTER
FUND FUND FUND FUND
------------ ------------ -------------- ------------
<S> <C> <C> <C> <C>
ASSETS
Repurchase Agreements $130,600,000 $ 64,700,000 $ 183,100,000 $ 5,200,000
Investment Securities 474,058,671 557,208,031 803,202,941 491,986,583
------------ ------------ -------------- ------------
Securities at Value (Note 1)--See
Accompanying Schedules 604,658,671 621,908,031 986,302,941 497,186,583
Receivable for Securities Sold 42,235,827 -- -- 62,808,857
Receivable for Futures Contracts
Settlement -- 15,941,275 -- --
Investment Income Receivable 226,522 -- 416,409 14,487
Cash in Custodian Bank 1,513,338 1,491,388 42,536 26,701
Cash on Deposit with Broker -- -- -- 196,283
Receivable for Shares Purchased 13,513,621 68,948,115 199,540,796 13,452,415
Unamortized Organization Costs (Note
1) -- 4,172 2,342 1,247
Other Assets -- 24,591 115,500 1,705
------------ ------------ -------------- ------------
Total Assets 662,147,979 708,317,572 1,186,420,524 573,688,278
------------ ------------ -------------- ------------
LIABILITIES
Payable for Futures Contracts
Settlement 4,677,141 -- -- 86,875
Liability for Shares Redeemed 74,807,130 32,558,582 64,969,228 75,953,911
Dividends Payable -- -- 17,462 --
Investment Advisory Fee Payable 267,555 770,095 388,038 222,005
Transfer Agent Fee Payable 89,185 213,915 153,023 60,377
Other Liabilities 438,707 530,416 365,625 410,623
------------ ------------ -------------- ------------
Total Liabilities 80,279,718 34,073,008 65,893,376 76,733,791
------------ ------------ -------------- ------------
NET ASSETS $581,868,261 $674,244,564 $1,120,527,148 $496,954,487
------------ ------------ -------------- ------------
------------ ------------ -------------- ------------
INVESTOR CLASS:
Net Assets $581,868,261 $674,222,870 $ 653,280,586 $496,954,388
Shares Outstanding 22,746,898 62,330,847 653,298,245 16,148,064
Net Asset Value Per Share $25.58 $10.82 $1.00 $30.77
ADVISOR CLASS:
Net Assets N/A $ 21,694 $ 467,246,562 $ 99
Shares Outstanding 2,009 467,233,490 3
Net Asset Value Per Share $10.80 $1.00 $30.77
</TABLE>
See Notes to Financial Statements.
22
<PAGE>
RYDEX SERIES TRUST
STATEMENT OF ASSETS AND LIABILITIES (UNAUDITED)
- --------------------------------------------------------------------------------
September 30, 1998
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRECIOUS U.S.
METALS GOVERNMENT JUNO ARKTOS
FUND BOND FUND FUND FUND
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
ASSETS
Repurchase Agreements $ 300,000 $ 1,100,000 $ 3,000,000 $ 5,100,000
Investment Securities 35,358,064 66,911,991 7,021,296 8,989,208
----------- ----------- ----------- -----------
Securities at Value (Note 1)--See
Accompanying Schedules 35,658,064 68,011,991 10,021,296 14,089,208
Receivable--Short Sales Open -- -- -- 15,949,079
Receivable for Futures Contract
Settlement -- -- -- 86,661
Premium Receivable for Written
Options -- -- -- --
Investment Income Receivable 11,615 393,628 454 772
Cash in Custodian Bank 87,707 86,337 51,856 45,472
Cash on Deposit with Broker -- -- 423,573 6,791,496
Receivable for Shares Purchased 4,157,583 4,904,498 1,610,207 5,585,863
Unamortized Organization Costs (Note
1) 1,673 1,045 9,637 --
Other Assets 7 11 -- --
----------- ----------- ----------- -----------
Total Assets 39,916,639 73,397,510 12,117,023 42,548,551
----------- ----------- ----------- -----------
LIABILITIES
Payable for Securities Purchased 1,249,932 1,246,406 -- --
Payable for Futures Contracts
Settlement -- -- 97,126 --
Short Sale at Market Value -- -- -- 16,052,113
Liability for Shares Redeemed 3,010,713 3,232,428 274,916 6,816,528
Dividends Payable -- 9,544 --
Investment Advisory Fee Payable 18,237 24,240 9,168 9,183
Transfer Agent Fee Payable 4,863 9,696 2,547 2,449
Other Liabilities 44,901 64,056 22,143 3,631
----------- ----------- ----------- -----------
Total Liabilities 4,328,646 4,586,370 405,900 22,883,904
----------- ----------- ----------- -----------
NET ASSETS $35,587,993 $68,811,140 $11,711,123 $19,664,647
----------- ----------- ----------- -----------
----------- ----------- ----------- -----------
INVESTOR CLASS:
Net Assets $35,587,993 $68,811,140 $11,711,123 $19,664,647
Shares Outstanding 6,792,880 5,928,927 1,470,487 1,479,275
Net Asset Value Per Share $5.24 $11.61 $7.96 $13.29
</TABLE>
See Notes to Financial Statements.
23
<PAGE>
RYDEX SERIES TRUST
STATEMENT OF OPERATIONS (UNAUDITED)
- --------------------------------------------------------------------------------
Six Months Ended September 30, 1998
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
U.S.
GOVERNMENT OVER-THE-
MONEY COUNTER
NOVA FUND URSA FUND MARKET FUND FUND
------------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
INVESTMENT INCOME
Interest $ 11,831,126 $13,811,959 $18,504,604 $ 183,225
Dividends 348,010 -- -- 164,373
------------- ----------- ----------- -----------
Total Income 12,179,136 13,811,959 18,504,604 347,598
------------- ----------- ----------- -----------
EXPENSES
Advisory Fees (Note 4) 2,723,025 2,517,880 1,607,843 1,497,928
Transfer Agent Fees (Note 4) 895,879 699,411 643,137 399,447
Audit and Outside Services 41,242 21,329 29,397 18,877
Accounting Fees (Note 4) 95,903 60,859 73,788 58,641
Legal 28,425 13,861 19,937 12,680
Organizational Expenses 93,781 28,586 32,041 40,237
Registration Fees 63,996 78,083 57,470 71,342
Custodian Fees 148,628 114,271 165,051 97,181
Distribution Fees--Advisor Class
(Note 4) -- 62,356 226,372 378
Servicing Fees--Advisor Class (Note
4) -- 62,356 226,372 378
Miscellaneous 661,782 487,826 268,382 460,414
------------- ----------- ----------- -----------
Total Expenses 4,752,661 4,146,818 3,349,790 2,657,503
Custodian Fees Paid Indirectly
(Note 5) 68,330 64,056 91,354 --
------------- ----------- ----------- -----------
Net Expenses 4,684,331 4,082,762 3,258,436 2,657,503
------------- ----------- ----------- -----------
Net Investment Income 7,494,805 9,729,197 15,246,168 (2,309,905)
------------- ----------- ----------- -----------
REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENTS
Net Realized Gain (Loss) on:
Investment Securities 82,358 271,052 (4,720) (7,423,590)
Written Options (32,054,468) (619,200) -- 322,697
Futures Contracts (20,598,185) 20,923,805 -- 235,674
------------- ----------- ----------- -----------
Total Net Realized Gain (Loss) (52,570,295) 20,575,657 (4,720) (6,865,219)
Net Change in Unrealized Appreciation
(Depreciation) On Investments (63,154,231) 11,029,920 -- 23,205,075
------------- ----------- ----------- -----------
Net Gain (Loss) on Investments (115,724,526) 31,605,577 (4,720) 16,339,856
------------- ----------- ----------- -----------
Net Increase (Decrease) in Net Assets
from Operations $(108,229,721) $41,334,774 $15,241,448 $14,029,951
------------- ----------- ----------- -----------
------------- ----------- ----------- -----------
</TABLE>
See Notes to Financial Statements.
24
<PAGE>
RYDEX SERIES TRUST
STATEMENT OF OPERATIONS (UNAUDITED)
- --------------------------------------------------------------------------------
Six Months Ended September 30, 1998
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRECIOUS U.S.
METALS GOVERNMENT ARKTOS
FUND BOND FUND JUNO FUND FUND*
----------- ---------- ----------- -----------
<S> <C> <C> <C> <C>
INVESTMENT INCOME
Interest $ 21,638 $ 786,944 $ 331,826 $ 44,204
Dividends 81,539 -- -- --
----------- ---------- ----------- -----------
Total Income 103,177 786,944 331,826 44,204
----------- ---------- ----------- -----------
EXPENSES
Advisory Fees (Note 2) 107,188 77,396 57,562 9,183
Transfer Agent Fees (Note 2) 28,583 30,959 15,989 2,449
Audit and Outside Services 1,659 1,225 655 --
Accounting Fees (Note 4) 13,491 12,652 10,000 --
Legal 1,223 722 448 --
Organizational Expenses 3,422 2,081 4,425 --
Registration Fees 5,710 3,086 1,055 42
Custodian Fees 12,557 5,037 4,667 --
Miscellaneous 43,125 50,858 14,391 3,631
----------- ---------- ----------- -----------
Total Expenses 216,958 184,016 109,192 15,305
Custodian Fees Paid Indirectly
(Note 5) 1,532 803 2,604 --
----------- ---------- ----------- -----------
Net Expenses 215,426 183,213 106,588 15,305
----------- ---------- ----------- -----------
Net Investment Income (Loss) (112,249) 603,731 225,238 28,899
----------- ---------- ----------- -----------
REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENTS
Net Realized Gain (Loss) on:
Investment Securities (5,681,955) 1,516,156 -- --
Written Options (32,161) 174,393 (38,539) --
Futures Contracts -- -- (1,203,258) (191,855)
Securities Sold Short -- -- -- (1,159,417)
----------- ---------- ----------- -----------
Total Net Realized Gain (Loss) (5,714,116) 1,690,549 (1,241,797) (1,351,272)
Net Change in Unrealized Appreciation/
(Depreciation) on Investments 1,702,960 3,821,013 (175,741) (337,623)
----------- ---------- ----------- -----------
(4,011,156) 5,511,562 (1,417,538) (1,688,895)
----------- ---------- ----------- -----------
Net Increase (Decrease) in Net Assets
from Operations $(4,123,405) $6,115,293 $(1,192,300) $(1,659,996)
----------- ---------- ----------- -----------
----------- ---------- ----------- -----------
</TABLE>
* COMMENCEMENT OF OPERATIONS: SEPTEMBER 3, 1998.
See Notes to Financial Statements.
25
<PAGE>
RYDEX SERIES TRUST
STATEMENT OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
NOVA FUND URSA FUND
-------------------------------------- ----------------------------------------
SIX MONTHS SIX MONTHS
ENDED SEPTEMBER 30, YEAR ENDED ENDED SEPTEMBER 30, YEAR ENDED
1998 MARCH 31,1998 1998 MARCH 31,1998
-------------------- --------------- -------------------- -----------------
<S> <C> <C> <C> <C>
UNAUDITED UNAUDITED
FROM INVESTMENT ACTIVITIES
Net Investment Income $ 7,494,805 $ 14,837,385 $ 9,729,197 $ 10,439,890
Net Realized Gain (Loss) on
Investments (52,570,295) 188,136,498 20,575,657 (109,079,393)
Net Change in Unrealized Appreciation
(Depreciation) of Investments (63,154,231) 36,083,994 11,029,920 (36,070,499)
-------------------- --------------- -------------------- -----------------
Net Increase (Decrease) in Net Assets
from Operations (108,229,721) 239,057,877 41,334,774 (134,710,002)
-------------------- --------------- -------------------- -----------------
Distributions to Shareholders
From Net Investment Income (Note 1) -- -- -- (1,305,283)
From Realized Gain on Investments -- (1,480,654) -- --
Net Increase (Decrease) in Net Assets
from Shares Transactions (Note 8) (296,148,633) 566,739,695 378,684,570 (192,047,007)
-------------------- --------------- -------------------- -----------------
Net Increase (Decrease) in Net Assets (404,378,354) 804,316,918 420,019,344 (328,062,292)
-------------------- --------------- -------------------- -----------------
NET ASSETS--Beginning of Period 986,246,615 181,929,697 254,225,220 582,287,512
-------------------- --------------- -------------------- -----------------
NET ASSETS--End of Period $ 581,868,261 $ 986,246,615 $ 674,244,564 $ 254,225,220
-------------------- --------------- -------------------- -----------------
-------------------- --------------- -------------------- -----------------
</TABLE>
See Notes to Financial Statements.
26
<PAGE>
RYDEX SERIES TRUST
STATEMENT OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
U.S. GOVERNMENT
MONEY MARKET FUND OVER-THE-COUNTER FUND
------------------------------------- -------------------------------------
SIX MONTHS ENDED YEAR ENDED SIX MONTHS ENDED YEAR ENDED
SEPTEMBER 30, 1998 MARCH 31, 1998 SEPTEMBER 30, 1998 MARCH 31, 1998
------------------- --------------- ------------------- ---------------
<S> <C> <C> <C> <C>
UNAUDITED UNAUDITED
FROM INVESTMENT ACTIVITIES
Net Investment Income (Loss) $ 15,246,168 $ 12,372,829 $ (2,309,905) $ (1,957,250)
Net Realized Gain (Loss) on
Investments (4,720) (8,594) (6,865,219) 47,009,145
Net Change in Unrealized Appreciation
(Depreciation) of Investments -- -- 23,205,075 57,345,453
------------------- --------------- ------------------- ---------------
Net Increase in Net Assets from
Operations 15,241,448 12,364,235 14,029,951 102,397,348
------------------- --------------- ------------------- ---------------
Distributions to Shareholders
From Net Investment Income (Note 1) (15,305,544) (12,303,858) -- --
From Realized Gain on Investments -- -- -- (1,017,455)
Net Increase (Decrease) in Net Assets
from Shares Transactions (Note 8) 867,296,520 (30,318,479) 33,130,803 296,135,642
------------------- --------------- ------------------- ---------------
Net Increase (Decrease) in Net Assets 867,232,424 (30,258,102) 47,160,754 397,515,535
------------------- --------------- ------------------- ---------------
NET ASSETS--Beginning of Period 253,294,724 283,552,826 449,793,733 52,278,198
------------------- --------------- ------------------- ---------------
NET ASSETS--End of Period $ 1,120,527,148 $ 253,294,724 $ 496,954,487 $ 449,793,733
------------------- --------------- ------------------- ---------------
------------------- --------------- ------------------- ---------------
</TABLE>
See Notes to Financial Statements.
27
<PAGE>
RYDEX SERIES TRUST
STATEMENT OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRECIOUS METALS FUND U.S. GOVERNMENT BOND FUND
-------------------------------------- --------------------------------------
SIX MONTHS SIX MONTHS
ENDED SEPTEMBER 30, YEAR ENDED ENDED SEPTEMBER 30, YEAR ENDED
1998 MARCH 31, 1998 1998 MARCH 31, 1998
-------------------- --------------- -------------------- ---------------
<S> <C> <C> <C> <C>
UNAUDITED UNAUDITED
FROM INVESTMENT ACTIVITIES
Net Investment Income (Loss) $ (112,249) $ 14,138 $ 603,731 $ 836,197
Net Realized Gain (Loss) on
Investments (5,714,116) (14,349,828) 1,690,549 2,555,601
Net Change in Unrealized Appreciation
(Depreciation) of Investments 1,702,960 4,609,432 3,821,013 312,595
-------------------- --------------- -------------------- ---------------
Net Increase (Decrease) in Net Assets
from Operations (4,123,405) (9,726,258) 6,115,293 3,704,393
-------------------- --------------- -------------------- ---------------
Distributions to Shareholders
From Net Investment Income (Note 1) -- -- (615,020) (795,589)
Net Increase in Net Assets from
Shares Transactions (Note 8) 5,173,186 20,584,331 42,803,067 14,297,344
-------------------- --------------- -------------------- ---------------
Net Increase in Net Assets 1,049,781 10,858,073 48,303,340 17,206,148
-------------------- --------------- -------------------- ---------------
NET ASSETS--Beginning of Period 34,538,212 23,680,139 20,507,800 3,301,652
-------------------- --------------- -------------------- ---------------
NET ASSETS--End of Period $ 35,587,993 $ 34,538,212 $ 68,811,140 $ 20,507,800
-------------------- --------------- -------------------- ---------------
-------------------- --------------- -------------------- ---------------
</TABLE>
See Notes to Financial Statements.
28
<PAGE>
RYDEX SERIES TRUST
STATEMENT OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
JUNO FUND ARKTOS FUND
-------------------------------------- --------------------
SIX MONTHS PERIOD
ENDED SEPTEMBER 30, YEAR ENDED ENDED SEPTEMBER 30,
1998 MARCH 31, 1998 1998*
-------------------- --------------- --------------------
<S> <C> <C> <C>
UNAUDITED UNAUDITED
FROM INVESTMENT ACTIVITIES
Net Investment Income $ 225,238 $ 633,933 $ 28,899
Net Realized Gain (Loss) on
Investments (1,241,797) (2,278,841) (1,351,272)
Net Change in Unrealized Appreciation
(Depreciation) of Investments (175,741) (794,967) (337,623)
-------------------- --------------- --------------------
Net (Decrease) in Net Assets from
Operations (1,192,300) (2,439,875) (1,659,996)
-------------------- --------------- --------------------
Distributions to Shareholders
From Net Investment Income (Note 1) -- (128,263) --
Net Increase (Decrease) in Net Assets
from Shares Transactions (Note 8) 16,295 (17,121,999) 21,324,643
-------------------- --------------- --------------------
Net Increase (Decrease) in Net Assets (1,176,005) (19,690,137) 19,664,647
-------------------- --------------- --------------------
NET ASSETS--Beginning of Period 12,887,128 32,577,265 --
-------------------- --------------- --------------------
NET ASSETS--End of Period $ 11,711,123 $ 12,887,128 $ 19,664,647
-------------------- --------------- --------------------
-------------------- --------------- --------------------
</TABLE>
* COMMENCEMENT OF OPERATIONS: SEPTEMBER 3, 1998
See Notes to Financial Statements.
29
<PAGE>
RYDEX SERIES TRUST
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
NOVA FUND
---------------------------------------------------------------------------
INVESTOR CLASS
---------------------------------------------------------------------------
SIX MONTHS YEAR PERIOD YEAR YEAR PERIOD
ENDED ENDED ENDED ENDED ENDED ENDED
SEPTEMBER 30, MARCH 31, MARCH 31, JUNE 30, JUNE 30, JUNE 30,
1998 1998 1997 1996 1995 1994*
------------- ---------- ---------- --------- --------- ---------
<S> <C> <C> <C> <C> <C> <C>
UNAUDITED
PER SHARE OPERATING PERFORMANCE:+
NET ASSET VALUE--BEGINNING OF PERIOD $ 29.82 $ 17.89 $ 15.68 $ 11.81 $ 9.77 $ 10.01
------------- ---------- ---------- --------- --------- ---------
Net Investment Income .31 .59 .35 .56 .28 .01
Net Realized and Unrealized Gains
(Losses) on Securities (4.55) 11.39 2.19 3.31 2.88 (.25)
------------- ---------- ---------- --------- --------- ---------
Net Increase (Decrease) in Net Asset
Value Resulting from Operations (4.24) 11.98 2.54 3.87 3.16 (.24)
Dividends to Shareholders from Net
Investment Income .00 .00 .00 .00 (.29) .00
Distributions to Shareholders from
Net Realized Capital Gain .00 (.05) (.33) .00 (.83) .00
------------- ---------- ---------- --------- --------- ---------
Net Increase (Decrease) in Net Asset
Value (4.24) 11.93 2.21 3.87 2.04 (.24)
------------- ---------- ---------- --------- --------- ---------
NET ASSET VALUE--END OF PERIOD $ 25.58 $ 29.82 $ 17.89 $ 15.68 $ 11.81 $ 9.77
------------- ---------- ---------- --------- --------- ---------
------------- ---------- ---------- --------- --------- ---------
TOTAL INVESTMENT RETURN (14.22)% 67.02% 20.92%** 32.77% 32.65% (2.47)%
RATIOS TO AVERAGE NET ASSETS
Gross Expenses 1.33%** 1.13% 1.19%** -- -- --
Net Expenses 1.31%** 1.11% 1.16%** 1.31% 1.43% 1.73%**
Net Investment Income 2.09%** 2.42% 2.69%** 3.14% 2.62% 1.05%**
SUPPLEMENTARY DATA:
Portfolio Turnover Rate*** 0% 0% 0% 0% 0% 0%
Net Assets, End of Period (000's
omitted) $581,868 $986,247 $181,930 $224,541 $62,916 $77,914
</TABLE>
+ THE PER SHARE DATA OF THE FINANCIAL HIGHLIGHTS TABLE IS CALCULATED USING
THE DAILY SHARES OUTSTANDING AVERAGE FOR THE YEAR.
* COMMENCEMENT OF OPERATIONS: JULY 12, 1993--NOVA FUND
** ANNUALIZED
*** PORTFOLIO TURNOVER RATIO IS CALCULATED WITHOUT REGARD TO SHORT-TERM
SECURITIES HAVING A MATURITY OF LESS THAN ONE YEAR. THE NOVA, URSA, AND
JUNO FUNDS TYPICALLY HOLD MOST OF THEIR INVESTMENTS IN OPTIONS AND
FUTURES CONTRACTS WHICH ARE DEEMED SHORT-TERM SECURITIES.
See Notes to Financial Statements.
30
<PAGE>
RYDEX SERIES TRUST
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
URSA FUND
---------------------------------------------------------------------------
INVESTOR CLASS
---------------------------------------------------------------------------
SIX MONTHS YEAR PERIOD YEAR YEAR PERIOD
ENDED ENDED ENDED ENDED ENDED ENDED
SEPTEMBER 30, MARCH 31, MARCH 31, JUNE 30, JUNE 30, JUNE 30,
1998 1998 1997 1996 1995 1994*
------------- ---------- ---------- --------- --------- ---------
<S> <C> <C> <C> <C> <C> <C>
UNAUDITED
PER SHARE OPERATING PERFORMANCE:+
NET ASSET VALUE--BEGINNING OF PERIOD $ 9.92 $ 14.04 $ 15.10 $ 17.58 $ 21.08 $ 20.00
------------- ---------- ---------- --------- --------- ---------
Net Investment Income .11 .38 .34 .60 .70 .02
Net Realized and Unrealized Gains
(Losses) on Securities .79 (4.46) (1.36) (3.08) (3.56) 1.06
------------- ---------- ---------- --------- --------- ---------
Net Increase (Decrease) in Net Asset
Value Resulting from Operations .90 (4.08) (1.02) (2.48) (2.86) 1.08
Dividends to Shareholders from Net
Investment Income .00 (.04) (.04) .00 (.64) .00
------------- ---------- ---------- --------- --------- ---------
Net Increase (Decrease) in Net Asset
Value .90 (4.12) (1.06) (2.48) (3.50) 1.08
------------- ---------- ---------- --------- --------- ---------
NET ASSET VALUE--END OF PERIOD $ 10.82 $ 9.92 $ 14.04 $ 15.10 $ 17.58 $ 21.08
------------- ---------- ---------- --------- --------- ---------
------------- ---------- ---------- --------- --------- ---------
TOTAL INVESTMENT RETURN 9.07% (29.06)% (8.98)%** (14.11)% (14.08)% 10.89%
RATIOS TO AVERAGE NET ASSETS
Gross Expenses 1.42%** 1.36% 1.36%**
Net Expenses 1.40%** 1.34% 1.34%** 1.39% 1.39% 1.67%**
Net Investment Income 3.48%** 3.18% 3.21%** 3.38% 3.50% 1.43%**
SUPPLEMENTARY DATA:
Portfolio Turnover Rate*** 0% 0% 0% 0% 0% 0%
Net Assets, End of Period (000's
omitted) $674,223 $254,225 $582,288 $192,553 $127,629 $110,899
</TABLE>
Effective after the close of business on August 14, 1998, the Ursa Fund Investor
Class shares underwent a 1-for-2 reverse split. The effect of this transaction
was to reduce the number of outstanding shares in this class by one half, while
doubling the price per share. The price per share prior to the reverse split was
$5.25; after the reverse split, the price per share was $10.50. There was no
change in the aggregate market value of the outstanding shares as a result of
this transaction. All shares and per share data have been restated to reflect
the reverse split of issued and outstanding shares.
+ THE PER SHARE DATA OF THE FINANCIAL HIGHLIGHTS TABLE IS CALCULATED USING
THE DAILY SHARES OUTSTANDING AVERAGE FOR THE YEAR.
* COMMENCEMENT OF OPERATIONS: JANUARY 7, 1994--URSA FUND
** ANNUALIZED
*** PORTFOLIO TURNOVER RATIO IS CALCULATED WITHOUT REGARD TO SHORT-TERM
SECURITIES HAVING A MATURITY OF LESS THAN ONE YEAR. THE NOVA, URSA, AND
JUNO FUNDS TYPICALLY HOLD MOST OF THEIR INVESTMENTS IN OPTIONS AND
FUTURES CONTRACTS WHICH ARE DEEMED SHORT-TERM SECURITIES.
See Notes to Financial Statements.
31
<PAGE>
RYDEX SERIES TRUST
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
U.S. GOVERNMENT MONEY MARKET FUND
----------------------------------------------------------------------------
INVESTOR CLASS
----------------------------------------------------------------------------
SIX MONTHS YEAR PERIOD YEAR YEAR PERIOD
ENDED ENDED ENDED ENDED ENDED ENDED
SEPTEMBER 30, MARCH 31, MARCH 31, JUNE 30, JUNE 30, JUNE 30,
1998 1998 1997 1996 1995 1994*
-------------- ---------- ---------- --------- --------- ---------
<S> <C> <C> <C> <C> <C> <C>
UNAUDITED
PER SHARE OPERATING PERFORMANCE:+
NET ASSET VALUE--BEGINNING OF PERIOD $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
-------------- ---------- ---------- --------- --------- ---------
Net Investment Income .02 .04 .03 .04 .04 .01
-------------- ---------- ---------- --------- --------- ---------
Net Increase in Net Asset Value
Resulting from Operations .02 .04 .03 .04 .04 .01
Dividends to Shareholders from Net
Investment Income (.02) (.04) (.03) (.04) (.04) (.01)
-------------- ---------- ---------- --------- --------- ---------
Net Increase in Net Asset Value .00 .00 .00 .00 .00 .00
-------------- ---------- ---------- --------- --------- ---------
NET ASSET VALUE--END OF PERIOD $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
-------------- ---------- ---------- --------- --------- ---------
-------------- ---------- ---------- --------- --------- ---------
TOTAL INVESTMENT RETURN 2.42% 4.69% 4.39%** 4.60% 4.43% 2.47%
RATIOS TO AVERAGE NET ASSETS
Gross Expenses 0.86%** 0.89% 0.86%**
Net Expenses 0.84%** 0.89% 0.86%** 0.99% 0.89% 1.16%**
Net Investment Income 4.72%** 4.37% 4.06%** 4.18% 4.23% 2.34%**
SUPPLEMENTARY DATA:
Portfolio Turnover Rate*** 0% 0% 0% 0% 0% 0%
Net Assets, End of Period (000's
omitted) $ 653,281 $ 253,295 $ 283,553 $ 153,925 $ 284,198 $88,107
</TABLE>
+ THE PER SHARE DATA OF THE FINANCIAL HIGHLIGHTS TABLE IS CALCULATED USING
THE DAILY SHARES OUTSTANDING AVERAGE FOR THE YEAR.
* COMMENCEMENT OF OPERATIONS: DECEMBER 3, 1993--U.S. GOVERNMENT MONEY
MARKET FUND
** ANNUALIZED
*** PORTFOLIO TURNOVER RATIO IS CALCULATED WITHOUT REGARD TO SHORT-TERM
SECURITIES HAVING A MATURITY OF LESS THAN ONE YEAR.
See Notes to Financial Statements.
32
<PAGE>
RYDEX SERIES TRUST
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
OVER-THE-COUNTER FUND
-------------------------------------------------------------------------------
INVESTOR CLASS
-------------------------------------------------------------------------------
SIX MONTHS YEAR PERIOD YEAR YEAR PERIOD
ENDED ENDED ENDED ENDED ENDED ENDED
SEPTEMBER 30, MARCH 31, MARCH 31, JUNE 30, JUNE 30, JUNE 30,
1998 1998 1997 1996 1995 1994*
-------------- ---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
UNAUDITED
PER SHARE OPERATING PERFORMANCE:+
NET ASSET VALUE--BEGINNING OF PERIOD $27.68 $17.93 $15.16 $12.22 $8.76 $10.00
-------------- ---------- ---------- ---------- ---------- ----------
Net Investment Income (Loss) (.17) (.14) .01 .06 .14 .01
Net Realized and Unrealized Gains
(Losses) on Securities 3.26 9.99 2.84 3.24 4.17 (1.25)
-------------- ---------- ---------- ---------- ---------- ----------
Net Increase (Decrease) in Net Asset
Value Resulting from Operations 3.09 9.85 2.85 3.30 4.31 (1.24)
-------------- ---------- ---------- ---------- ---------- ----------
Dividends to Shareholders from Net
Investment Income .00 .00 (.07) .00 (.12) .00
Distributions to Shareholders from
Net Realized Capital Gain .00 (.10) (.01) (.36) (.73) .00
-------------- ---------- ---------- ---------- ---------- ----------
Net Increase (Decrease) in Net Asset
Value 3.09 9.75 2.77 2.94 3.46 (1.24)
-------------- ---------- ---------- ---------- ---------- ----------
NET ASSET VALUE--END OF PERIOD $30.77 $27.68 $17.93 $15.16 $12.22 $8.76
-------------- ---------- ---------- ---------- ---------- ----------
-------------- ---------- ---------- ---------- ---------- ----------
TOTAL INVESTMENT RETURN 11.16% 55.05% 24.77%** 26.44% 49.00% (30.17)%
RATIOS TO AVERAGE NET ASSETS
Gross Expenses 1.33%** 1.13% 1.27%**
Net Expenses 1.33%** 1.13% 1.27%** 1.33% 1.41% 1.97%**
Net Investment Income (1.15)%** (0.58)% 0.08%** 0.44% 1.34% 1.69%**
SUPPLEMENTARY DATA:
Portfolio Turnover Rate*** 533.01% 971.80% 1,140.35% 2,578.56% 2,241.00% 1,171.00%
Net Assets, End of Period (000's
omitted) $496,954 $449,794 $52,278 $48,716 $61,948 $30,695
</TABLE>
+ THE PER SHARE DATA OF THE FINANCIAL HIGHLIGHTS TABLE IS CALCULATED USING
THE DAILY SHARES OUTSTANDING AVERAGE FOR THE YEAR.
* COMMENCEMENT OF OPERATIONS: FEBRUARY 14, 1994--OVER-THE-COUNTER FUND,
** ANNUALIZED
*** PORTFOLIO TURNOVER RATIO IS CALCULATED WITHOUT REGARD TO SHORT-TERM
SECURITIES HAVING A MATURITY OF LESS THAN ONE YEAR.
See Notes to Financial Statements.
33
<PAGE>
RYDEX SERIES TRUST
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRECIOUS METALS FUND
------------------------------------------------------------------------------------
INVESTOR CLASS
------------------------------------------------------------------------------------
SIX MONTHS YEAR PERIOD YEAR YEAR PERIOD
ENDED ENDED ENDED ENDED ENDED ENDED
SEPTEMBER 30, MARCH 31, MARCH 31, JUNE 30, JUNE 30, JUNE 30,
1998 1998 1997 1996 1995 1994*
-------------- ---------- ------------ ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
UNAUDITED
PER SHARE OPERATING PERFORMANCE:+
NET ASSET VALUE--BEGINNING OF PERIOD $5.82 $7.64 $9.05 $8.73 $8.29 $10.00
-------------- ---------- ------------ ----------- ----------- -----------
Net Investment Income (.02) .00 .00 .00 .10 .01
Net Realized and Unrealized Gains
(Losses) on Securities (.56) (1.82) (1.41) .32 .43 (1.72)
-------------- ---------- ------------ ----------- ----------- -----------
Net Increase (Decrease) in Net Asset
Value Resulting from Operations (.58) (1.82) (1.41) .32 .53 (1.71)
Dividends to Shareholders from Net
Investment Income .00 .00 .00 .00 (.09) .00
-------------- ---------- ------------ ----------- ----------- -----------
Net Increase (Decrease) in Net Asset
Value (.58) (1.82) (1.41) .32 .44 (1.71)
-------------- ---------- ------------ ----------- ----------- -----------
NET ASSET VALUE--END OF PERIOD $5.24 $5.82 $7.64 $9.05 $8.73 $8.29
-------------- ---------- ------------ ----------- ----------- -----------
-------------- ---------- ------------ ----------- ----------- -----------
TOTAL INVESTMENT RETURN (9.97)% (23.82)% (20.77)%** 3.67% 6.21% (29.27)%
RATIOS TO AVERAGE NET ASSETS
Gross Expenses 1.58%** 1.42% 1.49%**
Net Expenses 1.57%** 1.41% 1.45%** 1.33% 1.38% 2.06%**
Net Investment Income (0.79)%** 0.05% 0.00%** (0.01)% 1.15% 1.23%**
SUPPLEMENTARY DATA:
Portfolio Turnover Rate*** 456.30% 752.05% 743.33% 1,036.37% 1,765.00% 2,728.00%
Net Assets, End of Period (000's
omitted) $35,588 $34,538 $23,680 $36,574 $40,861 $1,526
</TABLE>
+ THE PER SHARE DATA OF THE FINANCIAL HIGHLIGHTS TABLE IS CALCULATED USING
THE DAILY SHARES OUTSTANDING AVERAGE FOR THE YEAR.
* COMMENCEMENT OF OPERATIONS: DECEMBER 1, 1993--PRECIOUS METALS FUND
** ANNUALIZED
*** PORTFOLIO TURNOVER RATIO IS CALCULATED WITHOUT REGARD TO SHORT-TERM
SECURITIES HAVING A MATURITY OF LESS THAN ONE YEAR.
See Notes to Financial Statements.
34
<PAGE>
RYDEX SERIES TRUST
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
U.S. GOVERNMENT BOND FUND
---------------------------------------------------------------------------------------
INVESTOR CLASS
---------------------------------------------------------------------------------------
SIX MONTHS YEAR PERIOD YEAR YEAR PERIOD
ENDED ENDED ENDED ENDED ENDED ENDED
SEPTEMBER 30, MARCH 31, MARCH 31, JUNE 30, JUNE 30, JUNE 30,
1998 1998 1997 1996 1995 1994*
-------------- ------------ ------------ ---------- ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
UNAUDITED
PER SHARE OPERATING PERFORMANCE:+
NET ASSET VALUE--BEGINNING OF PERIOD $10.04 $8.52 $8.97 $9.55 $8.24 $10.00
-------------- ------------ ------------ ---------- ------------ ------------
Net Investment Income .21 .45 .34 .46 .39 .02
Net Realized and Unrealized Gains
(Losses) on Securities 1.57 1.50 (.45) (.45) 1.17 (1.76)
-------------- ------------ ------------ ---------- ------------ ------------
Net Increase (Decrease) in Net Asset
Value Resulting from Operations 1.78 1.95 (.11) .01 1.56 (1.74)
Dividends to Shareholders from Net
Investment Income (.21) (.43) (.34) (.46) (.25) (.02)
Distributions to Shareholders from
Net Realized Capital Gain .00 .00 .00 (.13) .00 .00
-------------- ------------ ------------ ---------- ------------ ------------
Net Increase (Decrease) in Net Asset
Value 1.57 1.52 (.45) (.58) 1.31 (1.76)
-------------- ------------ ------------ ---------- ------------ ------------
NET ASSET VALUE--END OF PERIOD $11.61 $10.04 $8.52 $8.97 $9.55 $8.24
-------------- ------------ ------------ ---------- ------------ ------------
-------------- ------------ ------------ ---------- ------------ ------------
TOTAL INVESTMENT RETURN 17.91% 24.72% (0.46)%** (1.48)% 18.97% (32.63)%
RATIOS TO AVERAGE NET ASSETS
Gross Expenses 1.19%** 1.13% 1.51%**
Net Expenses 1.18%** 1.11% 1.49%** 1.26% 2.26% 3.05%**
Net Investment Income 3.89%** 4.65% 5.06%** 4.73% 4.64% 3.39%**
SUPPLEMENTARY DATA:
Portfolio Turnover Rate*** 649.75% 1,496.21% 962.17% 780.30% 3,452.59% 1,290.00%
Net Assets, End of Period (000's
omitted) $68,811 $20,508 $3,302 $18,331 $2,592 $1,564
</TABLE>
+ THE PER SHARE DATA OF THE FINANCIAL HIGHLIGHTS TABLE IS CALCULATED USING
THE DAILY SHARES OUTSTANDING AVERAGE FOR THE YEAR.
* COMMENCEMENT OF OPERATIONS: JANUARY 3, 1994--U.S.GOVERNMENT BOND FUND
** ANNUALIZED
*** PORTFOLIO TURNOVER RATIO IS CALCULATED WITHOUT REGARD TO SHORT-TERM
SECURITIES HAVING A MATURITY OF LESS THAN ONE YEAR.
See Notes to Financial Statements.
35
<PAGE>
RYDEX SERIES TRUST
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
JUNO FUND
---------------------------------------------------------------
INVESTOR CLASS
---------------------------------------------------------------
SIX MONTHS YEAR PERIOD YEAR PERIOD
ENDED ENDED ENDED ENDED ENDED
SEPTEMBER 30, MARCH 31, MARCH 31, JUNE 30, JUNE 30,
1998 1998 1997 1996 1995*
-------------- ---------- --------- --------- ---------
<S> <C> <C> <C> <C> <C>
UNAUDITED
PER SHARE OPERATING PERFORMANCE:+
NET ASSET VALUE--BEGINNING OF PERIOD $8.65 $9.69 $9.47 $9.08 $10.00
-------------- ---------- --------- --------- ---------
Net Investment Income .15 .16 .25 .34 .14
Net Realized and Unrealized Gains
(Losses) on Securities (.84) (1.12) .00 .05 (1.06)
-------------- ---------- --------- --------- ---------
Net Increase (Decrease) in Net Asset
Value Resulting from Operations (.69) (.96) .25 .39 (.92)
Dividends to Shareholders from Net
Investment Income .00 (.08) (.03) .00 .00
-------------- ---------- --------- --------- ---------
Net Increase (Decrease) in Net Asset
Value (.69) (1.04) .22 .39 (.92)
-------------- ---------- --------- --------- ---------
NET ASSET VALUE--END OF PERIOD $7.96 $8.65 $9.69 $9.47 $9.08
-------------- ---------- --------- --------- ---------
-------------- ---------- --------- --------- ---------
TOTAL INVESTMENT RETURN (7.98)% (9.92)% 3.75%** 4.30% (9.20)%
RATIOS TO AVERAGE NET ASSETS
Gross Expenses 1.71%** 1.61% 1.60%**
Net Expenses 1.67%** 1.59% 1.58%** 1.64% 1.50%**
Net Investment Income 3.53%** 3.55% 3.51%** 3.63% 1.32%**
SUPPLEMENTARY DATA:
Portfolio Turnover Rate*** 0% 0% 0% 0% 0%
Net Assets, End of Period (000's
omitted) $11,711 $12,887 $32,577 $18,860 $4,301
</TABLE>
+ THE PER SHARE DATA OF THE FINANCIAL HIGHLIGHTS TABLE IS CALCULATED USING
THE DAILY SHARES OUTSTANDING AVERAGE FOR THE YEAR.
* COMMENCEMENT OF OPERATIONS: MARCH 3, 1995--JUNO FUND
** ANNUALIZED
*** PORTFOLIO TURNOVER RATIO IS CALCULATED WITHOUT REGARD TO SHORT-TERM
SECURITIES HAVING A MATURITY OF LESS THAN ONE YEAR. THE NOVA , URSA, AND
JUNO FUNDS TYPICALLY HOLD MOST OF THEIR INVESTMENTS IN OPTIONS AND
FUTURES CONTRACTS WHICH ARE DEEMED SHORT-TERM SECURITIES.
See Notes to Financial Statements.
36
<PAGE>
RYDEX SERIES TRUST
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
ARKTOS FUND*
--------------
INVESTOR CLASS
--------------
PERIOD
ENDED
SEPTEMBER 30,
1998
--------------
<S> <C>
UNAUDITED
PER SHARE OPERATING PERFORMANCE:+
NET ASSET VALUE--BEGINNING OF PERIOD $15.00
--------------
Net Investment Income .02
Net Realized and Unrealized Gains
(Losses) on Securities (1.73)
--------------
Net Increase (Decrease) in Net Asset
Value Resulting from Operations (1.71)
Dividends to Shareholders from Net
Investment Income .00
--------------
Net Increase (Decrease) in Net Asset
Value (1.71)
--------------
NET ASSET VALUE--END OF PERIOD $13.29
--------------
--------------
TOTAL INVESTMENT RETURN (11.40)%
RATIOS TO AVERAGE NET ASSETS
Gross Expenses 1.26%**
Net Expenses 1.26%**
Net Investment Income 2.38%**
SUPPLEMENTARY DATA:
Portfolio Turnover Rate*** 291.00%
Net Assets, End of Period (000's
omitted) $19,665
</TABLE>
+ THE PER SHARE DATA OF THE FINANCIAL HIGHLIGHTS TABLE IS CALCULATED USING
THE DAILY SHARES OUTSTANDING AVERAGE FOR THE YEAR.
* COMMENCEMENT OF OPERATIONS: SEPTEMBER 3, 1998--ARKTOS FUND
** ANNUALIZED
*** PORTFOLIO TURNOVER RATIO IS CALCULATED WITHOUT REGARD TO SHORT-TERM
SECURITIES HAVING A MATURITY OF LESS THAN ONE YEAR.
See Notes to Financial Statements.
37
<PAGE>
RYDEX SERIES TRUST
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
ADVISOR CLASS
-------------------------------------
FOR THE PERIOD ENDED SEPTEMBER 30,
1998*
-------------------------------------
U.S.
GOVERNMENT
MONEY OVER-THE-
URSA MARKET COUNTER
FUND FUND FUND
---------- ----------- ----------
<S> <C> <C> <C>
UNAUDITED UNAUDITED UNAUDITED
PER SHARE OPERATING PERFORMANCE:+
NET ASSET VALUE--BEGINNING OF PERIOD $10.25 $1.00 $30.52
---------- ----------- ----------
Net Investment Income .05 .02 .00
Net Realized and Unrealized Gains
(Losses) on Securities .50 .00 .25
---------- ----------- ----------
Net Increase (Decrease) in Net Asset
Value Resulting from Operations .55 .02 .25
Dividends to Shareholders from Net
Investment Income .00 (.02) .00
---------- ----------- ----------
Net Increase (Decrease) in Net Asset
Value .55 .00 .25
---------- ----------- ----------
NET ASSET VALUE--END OF PERIOD $10.80 $1.00 $30.77
---------- ----------- ----------
---------- ----------- ----------
TOTAL INVESTMENT RETURN 5.37% 2.16% .82%
RATIOS TO AVERAGE NET ASSETS**
Gross Expenses** 2.00% 1.39% 1.46%
Net Expenses** 1.97% 1.36% 1.46%
Net Investment Income** 3.19% 4.19% (0.26%)
SUPPLEMENTARY DATA:
Portfolio Turnover Rate*** 0% 0% 533.01%
Net Assets, End of Period (000's
omitted) $22 $467,247 $--
</TABLE>
+ THE PER SHARE DATA OF THE FINANCIAL HIGHLIGHTS TABLE IS CALCULATED USING
THE DAILY SHARES OUTSTANDING AVERAGE FOR THE YEAR.
* COMMENCEMENT OF OPERATIONS: APRIL 1, 1998--U.S. GOVERNMENT MONEY MARKET
FUND; AUGUST 5, 1998--URSA FUND, SEPTEMBER 22, 1998--OVER-THE-COUNTER
FUND.
** ANNUALIZED
*** PORTFOLIO TURNOVER RATIO IS CALCULATED WITHOUT REGARD TO SHORT-TERM
SECURITIES HAVING A MATURITY OF LESS THAN ONE YEAR.
See Notes to Financial Statements.
38
<PAGE>
RYDEX SERIES TRUST
NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
1. SIGNIFICANT ACCOUNTING POLICIES
The Rydex Series Trust (the "Trust") is registered with the Securities and
Exchange Commission under the Investment Company of 1940 (the "1940 Act") as a
non-diversified, open-ended investment company and is authorized to issue an
unlimited number of shares. The Trust consists of twenty two separate series,
the Nova Fund, the Ursa Fund, the U.S. Government Money Market Fund, the
Over-the-Counter Fund, the Precious Metals Fund, the U.S. Government Bond Fund,
the Juno Fund, and the Arktos Fund, as well as fourteen Sector Funds. The Sector
Funds became available to investors on April 1, 1998, with individual Sector
Funds commencing operations at various dates through July, 1998. In conjunction
with the offering of the Sector Funds, the Trust also initiated the addition of
a second class of shares. The original shares of previously existing Funds
became known as the Investor Class Shares, with the second class being known as
the Advisor Class Shares. The Advisor Class carries additional fees in an annual
amount of one half of one percent (0.50%) of the average net assets of the
Advisor Class. In addition to the Sector Funds Advisor Class, the U.S.
Government Money Market Fund, the Ursa Fund, and the Over-the-Counter Fund
commenced operations in the Advisor Class during the period ended September 30,
1998. These financial statements include the eight Funds named above. The Sector
Funds are covered in a separate report. Because the Trust is 100% no-load, the
shares of each fund are offered and redeemed at the net asset value per share.
The following significant accounting policies are in conformity with generally
accepted accounting principles and are consistently followed by the Trust in the
preparation of its financial statements.
During 1997, the Trust changed its fiscal year end from June 30 to March 31.
Accordingly, statements for the period ended March 31, 1997, reflect nine months
of activity.
A. Securities listed on an exchange are valued at the latest quoted sales prices
as of 4:00 P.M. on the valuation date. Securities not traded on an exchange are
valued at their last sales price. Listed options held by the Trust are valued at
their last bid price. Over-the-counter options held by the Trust are valued
using the average bid price obtained from one or more security dealers. The
value of futures contracts purchased and sold by the Trust are accounted for
using the unrealized gain or loss on the contracts that is determined by marking
the contracts to their current realized settlement prices. Short-term securities
are valued at amortized cost, which approximates market. Securities and assets
for which market quotations are not readily available are valued at fair value
as determined in good faith by or under direction of the Board of Trustees or by
the Advisor using methods established or ratified by the Board of Trustees.
B. Securities transactions are generally recorded on the day after the trade is
executed. Realized gains and losses from securities transactions are recorded on
the identified cost basis. Dividend
39
<PAGE>
RYDEX SERIES TRUST
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
income is recorded on the ex-dividend date, net of applicable taxes withheld by
foreign countries. Interest income is accrued on a daily basis.
C. Net investment income is computed, and dividends are declared daily in the
U.S. Government Money Market Fund and the U.S. Government Bond Fund. Income
dividends in these funds are paid monthly. Dividends are reinvested in
additional shares unless shareholders request payment in cash. Generally,
short-term capital gains are distributed monthly in the U.S. Government Money
Market Fund.
D. When the Trust engages in a short sale, an amount equal to the proceeds
received by the Trust is reflected as an asset and an equivalent liability. The
amount of the liability is subsequently marked to market to reflect the market
value of the short sale. The Trust maintains a segregated account of cash or
securities as collateral for the short sales. The Trust is exposed to market
risk based on the amount, if any, that the market value of the stock exceeds the
market value of the cash or securities in the segregated account.
E. When the Trust writes (sells) an option, an amount equal to the premium
received is entered in the Trust's accounting records as an asset and equivalent
liability. The amount of the liability is subsequently marked to market to
reflect the current value of the option written. When an option expires, or if
the Trust enters into a closing purchase transaction, the Trust realizes a gain
(or loss if the cost of a closing purchase transaction exceeds the premium
received when the option was sold).
F. The Trust may purchase or sell stock index futures contracts and options on
such futures contracts. Futures contracts are contracts for delayed delivery of
securities at a specified future delivery date and at a specific price. Upon
entering into a contract, the Trust deposits and maintains as collateral such
initial margin as required by the exchange on which the transaction is effected.
Pursuant to the contract, the Trust agrees to receive from or pay to the broker
an amount of cash equal to the daily fluctuation in value of the contract. Such
receipts or payments are known as variation margin and are recorded by the Trust
as unrealized gains or losses. When the contract is closed, the Trust records a
realized gain or loss equal to the difference between the value of the contract
at the time it was opened and the value at the time it was closed.
G. Futures contracts and written options involve to varying degrees, elements of
market risk and risks in excess of the amount recognized in the Statements of
Assets and Liabilities. The face or contract amounts reflect the extent of the
involvement each fund has in the particular classes of instruments. Risks may be
caused by an imperfect correlation between movements in the price of the
instruments and the price of the underlying securities.
40
<PAGE>
RYDEX SERIES TRUST
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
H. The Trust intends to comply with the provisions of the Internal Revenue Code
applicable to regulated investment companies and will distribute all net
investment income to its shareholders. Therefore, no Federal income tax
provision is required.
I. Costs incurred by the individual Funds in connection with their organization
and registration prior to December 31, 1997, have been deferred and are being
amortized on the straight-line method over a five year period beginning on the
date on which the individual Fund commenced its investment activities. Costs
incurred subsequent to this date, and those related to the organization and
registration of the Sector Funds and the Advisor Class of certain Funds, have
been expensed as incurred.
J. Interest and dividend income, most expenses, all realized gains and losses,
and all unrealized gains and losses are allocated to the Classes based upon the
value of the outstanding shares in each Class. Certain costs are charged
directly to the specific Class, for example, distribution fees related to the
Advisor Classes.
K. The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amount of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of revenues and expenses during the reporting period.
Actual results could differ from those estimates.
2. OPERATING POLICIES
The Trust utilizes futures contracts, options, options on futures contracts, and
short sales of securities in order to meet the specific investment objectives of
the individual funds.
The Nova Fund, which is designed to provide total returns over time that are
superior to the Standard and Poor's 500 Composite Stock Price Index ("S&P 500")
invests primarily in futures on the S&P 500 index and options on those futures
in order to correlate its return with an amount approximately 150% of the
performance of the S&P 500. The Ursa Fund primarily sells futures contracts and
buys options on futures contracts in furtherance of its investment objective to
inversely correlate to the S&P 500. The Precious Metals Fund seeks capital
appreciation. It buys primarily equity securities and purchases call options and
sells put options on the Philadelphia Stock Exchange Gold/Silver Index-TM- ("XAU
Index"). The U. S. Government Bond Fund strives to provide income and capital
appreciation. It purchases primarily long-term U. S. Treasury Bonds. It also
purchases futures contracts on U.S. Treasury Bonds and buys call options on U.S.
Treasury Bond futures as a substitute for a comparable market position in the
underlying U.S. Treasury securities. The Juno Fund seeks to inversely correlate
with the price changes of the current Thirty Year U. S. Treasury Bond. To meet
this objective, Juno primarily buys put options on U. S. Treasury Bond futures
and sells U. S. Treasury
41
<PAGE>
RYDEX SERIES TRUST
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Bond futures. The Over-the-Counter Fund strives to provide investment results
before fees and expenses that closely correlate the total return of the NASDAQ
100 Index-TM-. The Over-the-Counter Fund invests in securities included in the
NASDAQ 100 Index-TM- and buys call options and sells put options on stock
indexes. The Arktos Fund attempts to inversely correlate to the NASDAQ 100
Index-TM-. To do this, the Arktos Fund engages in short sales of the securities
that comprise the NASDAQ 100 Index-TM-, as well as selling futures on the NASDAQ
100 Index-TM-. In addition the Nova Fund, the Ursa Fund, the OTC Fund, and the
Precious Metals Fund all write options to further meet their investment
objectives.
The risks inherent in the use of options, futures contracts, options on futures
contracts, and short sales include 1) adverse changes in the value of such
instruments; 2) imperfect correlation between the price of options and futures
contracts and options thereon and movements in the price of the underlying
securities, index, or futures contract; and 3) the possible absence of a liquid
secondary market for any particular instrument at any time.
3. REPURCHASE AGREEMENTS
The Trust transfers uninvested cash balances into a single joint account, the
daily aggregate balance of which is invested in one or more repurchase
agreements collateralized by U.S. Treasury obligations. As of September 30, 1998
the repurchase agreements with Fuji Securities, Inc., Paine Webber, Inc., Lehman
Brothers, and Prudential Securities, Inc., in the joint account and the
collateral therefore was as follows:
<TABLE>
<CAPTION>
RANGE OF
SECURITY TYPE RATES PAR VALUE MARKET VALUE
- --------------------------------------- ------------ ------------ ------------
<S> <C> <C> <C>
United States Treasury Notes 5.25%-7.875% $281,200,000 $297,604,261
United States Treasury Bonds 8.875% $ 69,910,000 $101,227,495
</TABLE>
4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES
Under the terms of an investment advisory contract, the Trust pays PADCO
Advisors, Inc., an affiliated entity, investment advisory fees calculated at an
annualized rate, based on average daily net assets, of one half of one percent
(0.50%) of the net assets of the U.S. Government Money Market Fund and the U.S.
Government Bond Fund; three-quarters of one percent (0.75%) of the net assets of
the Nova Fund, the Precious Metals Fund, the Over-the-Counter Fund, and the
Arktos Fund; and nine-tenths of one percent (0.90%) of the net assets of the
Ursa Fund and the Juno Fund.
PADCO Service Company, Inc., a subsidiary of the investment advisor, provides
transfer agent service to the Trust at an annualized rate, based on average
daily net assets, of two-tenths of one percent (0.20%) of the net assets of the
U.S. Government Money Market Fund, U.S. Government
42
<PAGE>
RYDEX SERIES TRUST
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Bond Fund, Precious Metals Fund, Over-the-Counter Fund, and the Arktos Fund; and
one-quarter of one percent (0.25%) of the Nova Fund, the Ursa Fund, and the Juno
Fund. The Trust paid PADCO Service Company, Inc. $325,334 in accounting fees for
the above eight funds for the six month period ended September 30, 1998.
The Trust has adopted a Distribution and Shareholder Services Plan applicable to
Advisor Class Shares, for which the Distributor, PADCO Financial Services, Inc.,
(an affiliated entity), and other firms that provide distribution and
shareholder services ("Service Providers") may receive compensation. If a
Service Provider provides distribution services, the Trust will pay fees to the
Distributor at an annual rate not to exceed one quarter of one percent (0.25%)
of average daily net assets, pursuant to Rule 12b-1 of the 1940 Act. The
Distributor will pay the Service Provider out of its fees. The Distributor may,
at its discretion, retain a portion of such payments to compensate itself for
distribution services. If a Service Provider provides shareholders services, the
Distributor will receive fees from the Trust at an annual rate not to exceed one
quarter of one percent (0.25%) of average daily net assets. The Distributor will
pay the Service Provider out of its fees.
5. ACCOUNTING FOR EXPENSES
The Trust has entered into an arrangement with its custodian whereby interest
earned on uninvested cash balances was used to offset a portion of the Trust's
expenses.
6. SECURITIES TRANSACTIONS
During the six months ended September 30, 1998 purchases and sales of investment
securities were: (Unaudited)
<TABLE>
<CAPTION>
U.S.
GOVERNMENT
MONEY U.S.
NOVA URSA MARKET OVER-THE- PRECIOUS GOVERNMENT JUNO ARKTOS
FUND FUND FUND COUNTER FUND METALS FUND BOND FUND FUND FUND*
------------ -- -- -------------- ------------ ------------ -- -----------
<S> <C> <C> <C> <C> <C> <C>
Purchases $174,594,443 $0 $0 $2,292,416,212 $132,793,542 $214,281,760 $0 $52,221,349
Sales $ 102 $0 $0 $2,257,216,429 $127,398,955 $215,459,365 $0 $35,112,006
</TABLE>
The transactions shown above exclude short-term and temporary cash investments.
* COMMENCEMENT OF OPERATIONS: SEPTEMBER 3, 1998--ARKTOS FUND
43
<PAGE>
RYDEX SERIES TRUST
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
7. NET UNREALIZED APPRECIATION/DEPRECIATION OF SECURITIES
At September 30, 1998 unrealized appreciation (depreciation) and cost of
investment securities for Federal income tax purposes was: (Unaudited)
<TABLE>
<CAPTION>
U.S.
GOVERNMENT U.S.
NOVA URSA MONEY OVER-THE- PRECIOUS GOVERNMENT
FUND FUND MARKET FUND COUNTER FUND METALS FUND BOND FUND
------------ ------------ ------------ ------------ ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
Gross Unrealized Appreciation $ 3,487,694 $ 6,447,900 $ -- $ 89,079,709 $ 6,287,018 $ 4,076,253
Gross Unrealized (Depreciation) (36,426,599) -- -- (1,735,952) (249,459) --
------------ ------------ ------------ ------------ ----------- -----------
Net Unrealized Appreciation/
(Depreciation) $(32,938,905) $ 6,447,900 -- $ 87,343,757 $ 6,037,559 $ 4,076,253
------------ ------------ ------------ ------------ ----------- -----------
------------ ------------ ------------ ------------ ----------- -----------
Cost of Investments for Federal Income
Tax Purposes $637,597,576 $615,460,131 $986,302,941 $409,842,826 $29,620,505 $63,935,738
<CAPTION>
JUNO ARKTOS
FUND FUND
----------- -----------
<S> <C> <C>
Gross Unrealized Appreciation $ -- $ 177,385
Gross Unrealized (Depreciation) (92,486) (280,419)
----------- -----------
Net Unrealized Appreciation/
(Depreciation) $ (92,486) $ (103,034)
----------- -----------
----------- -----------
Cost of Investments for Federal Income
Tax Purposes $10,113,782 $14,089,208
</TABLE>
8. SHARE TRANSACTIONS
Transactions in shares for the six months ended September 30, 1998 were:
(Unaudited)
INVESTOR CLASS:
<TABLE>
<CAPTION>
U.S.
GOVERNMENT U.S.
NOVA URSA MONEY OVER-THE- PRECIOUS GOVERNMENT
FUND FUND MARKET FUND COUNTER FUND METALS FUND BOND FUND
------------ ------------ -------------- ------------ ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
Shares Purchased 204,197,101 706,531,444 9,165,343,272 130,966,598 48,011,696 35,115,308
Dividend Reinvestment 0 0 11,334,959 0 0 52,819
------------ ------------ -------------- ------------ ----------- -----------
Total Purchased 204,197,101 706,531,444 9,176,678,231 130,966,598 48,011,696 35,168,127
Reduction in Shares due to 1 for 2
Reverse Stock Split (Note 12) (71,204,880)
Shares Redeemed (214,526,066) (624,279,012) (8,776,615,201) (131,067,544) (47,155,567) (31,282,369)
------------ ------------ -------------- ------------ ----------- -----------
Net Shares Purchased/ (Redeemed) (10,328,965) 11,047,552 400,063,030 (100,946) 856,129 3,885,758
------------ ------------ -------------- ------------ ----------- -----------
------------ ------------ -------------- ------------ ----------- -----------
<CAPTION>
JUNO ARKTOS
FUND FUND*
----------- ----------
<S> <C> <C>
Shares Purchased 15,316,627 6,719,239
Dividend Reinvestment 0 0
----------- ----------
Total Purchased 15,316,627 6,719,239
Reduction in Shares due to 1 for 2
Reverse Stock Split (Note 12)
Shares Redeemed (15,335,866) (5,239,964)
----------- ----------
Net Shares Purchased/ (Redeemed) (19,239) 1,479,275
----------- ----------
----------- ----------
</TABLE>
* COMMENCEMENT OF OPERATIONS: SEPTEMBER 3, 1998.
44
<PAGE>
RYDEX SERIES TRUST
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
ADVISOR CLASS:
<TABLE>
<CAPTION>
U.S.
GOVERNMENT
URSA MONEY OVER-THE-
FUND MARKET FUND COUNTER FUND
----------- -------------- ------------
<S> <C> <C> <C>
Shares Purchased 29,167,861 3,804,510,639 884,220
Dividend Reinvestment 0 3,723,478 0
----------- -------------- ------------
Total Purchased 29,167,861 3,808,234,117 884,220
Shares Redeemed (29,165,852) (3,341,000,627) (884,217)
----------- -------------- ------------
Net Shares Purchased/(Redeemed) 2,009 467,233,490 3
----------- -------------- ------------
----------- -------------- ------------
</TABLE>
Transactions in shares for the year ended March 31,1998 were:
INVESTOR CLASS:
<TABLE>
<CAPTION>
U.S.
GOVERNMENT U.S.
NOVA URSA MONEY OVER-THE- PRECIOUS GOVERNMENT
FUND FUND MARKET FUND COUNTER FUND METALS FUND BOND FUND
------------ ------------ -------------- ------------ ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
Shares Purchased 298,544,343 602,377,836 7,003,801,278 211,244,843 59,825,453 31,718,190
Dividend Reinvestment 50,353 208,677 12,114,239 35,575 -- 90,703
------------ ------------ -------------- ------------ ----------- -----------
Total Purchased 298,594,696 602,586,513 7,015,915,517 211,280,418 59,825,453 31,808,893
Shares Redeemed (275,687,374) (634,264,432) (7,046,233,581) (197,947,783) (56,987,792) (30,153,060)
------------ ------------ -------------- ------------ ----------- -----------
Net Shares Purchased/(Redeemed) 22,907,322 (31,677,919) (30,318,064) 13,332,635 2,837,661 1,655,833
------------ ------------ -------------- ------------ ----------- -----------
------------ ------------ -------------- ------------ ----------- -----------
<CAPTION>
JUNO
FUND
-----------
<S> <C>
Shares Purchased 23,983,761
Dividend Reinvestment 12,022
-----------
Total Purchased 23,995,783
Shares Redeemed (25,868,396)
-----------
Net Shares Purchased/(Redeemed) (1,872,613)
-----------
-----------
</TABLE>
45
<PAGE>
RYDEX SERIES TRUST
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Transactions in dollars for the six months ended September 30, 1998 were:
(Unaudited)
INVESTOR CLASS:
<TABLE>
<CAPTION>
U.S.
GOVERNMENT
NOVA URSA MONEY OVER-THE- PRECIOUS
FUND FUND MARKET FUND COUNTER FUND METALS FUND
--------------- --------------- --------------- --------------- -------------
<S> <C> <C> <C> <C> <C>
Shares Purchased $ 5,722,734,509 $ 4,562,173,947 $ 9,165,439,122 $ 3,750,764,948 $ 247,933,886
Purchased through Dividend Reinvestment -- -- 11,334,959 -- --
--------------- --------------- --------------- --------------- -------------
Total Purchased 5,722,734,509 4,562,173,947 9,176,774,081 3,750,764,948 247,933,886
Shares Redeemed (6,018,883,142) (4,186,300,383) (8,776,711,051) (3,717,227,505) (242,760,700)
--------------- --------------- --------------- --------------- -------------
Net Shares Purchased/ (Redeemed) $ (296,148,633) $ 375,873,564 $ 400,063,030 $ 33,537,443 $ 5,173,186
--------------- --------------- --------------- --------------- -------------
--------------- --------------- --------------- --------------- -------------
<CAPTION>
U.S.
GOVERNMENT JUNO ARKTOS
BOND FUND FUND FUND*
------------- ------------- ------------
<S> <C> <C> <C>
Shares Purchased $ 370,525,983 $ 129,897,665 $ 92,117,925
Purchased through Dividend Reinvestment 568,078 -- --
------------- ------------- ------------
Total Purchased 371,094,061 129,897,665 92,117,925
Shares Redeemed (328,290,994) (129,881,370) (70,793,282)
------------- ------------- ------------
Net Shares Purchased/ (Redeemed) $ 42,803,067 $ 16,295 $ 21,324,643
------------- ------------- ------------
------------- ------------- ------------
</TABLE>
ADVISOR CLASS:
<TABLE>
<CAPTION>
U.S.
GOVERNMENT
URSA MONEY OVER-THE-
FUND MARKET FUND COUNTER FUND
------------- --------------- ------------
<S> <C> <C> <C>
Shares Purchased $ 304,681,304 $ 3,804,510,639 $ 26,986,395
Purchased through Dividend Reinvestment -- 3,723,478 --
------------- --------------- ------------
Total Purchased 304,681,304 3,808,234,117 26,986,395
Shares Redeemed (301,870,298) (3,341,000,627) (27,393,035)
------------- --------------- ------------
Net Shares Purchased/(Redeemed) $ 2,811,006 $ 467,233,490 $ (406,640)
------------- --------------- ------------
------------- --------------- ------------
</TABLE>
* COMMENCEMENT OF OPERATIONS: SEPTEMBER 3, 1998.
46
<PAGE>
RYDEX SERIES TRUST
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Transactions in dollars for the year ended March 31, 1998 were:
<TABLE>
<CAPTION>
U.S.
GOVERNMENT
NOVA URSA MONEY OVER-THE- PRECIOUS
FUND FUND MARKET FUND COUNTER FUND METALS FUND
--------------- --------------- --------------- --------------- -------------
<S> <C> <C> <C> <C> <C>
Shares Purchased $ 7,141,740,122 $ 3,520,783,180 $ 7,003,800,863 $ 4,997,462,409 $ 386,233,985
Purchased through Dividend Reinvestment 1,289,557 1,133,118 12,114,239 861,979 --
--------------- --------------- --------------- --------------- -------------
Total Purchased 7,143,029,679 3,521,916,298 7,015,915,102 4,998,324,388 386,233,985
Shares Redeemed (6,576,289,984) (3,713,963,305) (7,046,233,581) (4,702,188,746) (365,649,654)
--------------- --------------- --------------- --------------- -------------
Net Shares Purchased/ (Redeemed) $ 566,739,695 $ (192,047,007) $ (30,318,479) $ 296,135,642 $ 20,584,331
--------------- --------------- --------------- --------------- -------------
--------------- --------------- --------------- --------------- -------------
<CAPTION>
U.S.
GOVERNMENT JUNO
BOND FUND FUND
------------- -------------
<S> <C> <C>
Shares Purchased $ 307,497,702 $ 216,439,760
Purchased through Dividend Reinvestment 863,573 104,843
------------- -------------
Total Purchased 308,361,275 216,544,603
Shares Redeemed (294,063,931) (233,666,602)
------------- -------------
Net Shares Purchased/ (Redeemed) $ 14,297,344 $ (17,121,999)
------------- -------------
------------- -------------
</TABLE>
9. OPTION CONTRACTS WRITTEN
During the six months ended September 30, 1998 the Trust wrote the following
contracts: (Unaudited)
PUT OPTIONS WRITTEN:
<TABLE>
<CAPTION>
OVER-THE-COUNTER
FUND
--------------
NUMBER
OF INITIAL
CONTRACTS PREMIUMS
--- ---------
<S> <C> <C>
Outstanding at Beginning of Period 20 $ 3,440
Options Written 68 137,241
Options Terminated (88) (140,681)
--- ---------
Outstanding at End of Period 0 $ 0
--- ---------
--- ---------
</TABLE>
47
<PAGE>
RYDEX SERIES TRUST
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
10. NET ASSETS
At September 30, 1998, net assets consisted of: (Unaudited)
<TABLE>
<CAPTION>
U.S.
GOVERNMENT
MONEY MARKET
NOVA FUND URSA FUND FUND
------------ ------------- --------------
<S> <C> <C> <C>
Paid-In-Capital $639,364,514 $ 892,646,261 $1,120,493,164
Undistributed Net Investment Income 22,332,190 10,601,108 47,298
Accumulated Net Realized Gain (Loss) on
Investments (43,021,936) (232,644,116) (13,314)
Net Unrealized Appreciation
(Depreciation) on Investments,
Options and Futures Contracts (36,806,507) 3,641,311 0
------------ ------------- --------------
Net Assets $581,868,261 $ 674,244,564 $1,120,527,148
------------ ------------- --------------
------------ ------------- --------------
</TABLE>
<TABLE>
<CAPTION>
U.S.
OVER-THE- PRECIOUS GOVERNMENT JUNO ARKTOS
COUNTER FUND METALS FUND BOND FUND FUND FUND
------------ ------------ ----------- ----------- -----------
<S> <C> <C> <C> <C> <C>
Paid-In-Capital $418,672,279 $ 69,336,237 $61,219,410 $19,940,395 $21,324,643
Undistributed Net Investment Income
(Loss) (2,309,905) (112,249) 218,469 247,753 28,899
Accumulated Net Realized Gain (Loss) on
Investments (6,865,219) (39,673,554) 3,297,008 (8,205,351) (1,351,272)
Net Unrealized Appreciation
(Depreciation) on Investments,
Options and Futures Contracts 87,457,332 6,037,559 4,076,253 (271,674) (337,623)
------------ ------------ ----------- ----------- -----------
Net Assets $496,954,487 $ 35,587,993 $68,811,140 $11,711,123 $19,664,647
------------ ------------ ----------- ----------- -----------
------------ ------------ ----------- ----------- -----------
</TABLE>
11. LOSS CARRYFORWARD--FEDERAL INCOME TAX
At March 31, 1998, for Federal income tax purposes, the following funds have
capital loss carryovers which may be applied against future net taxable realized
gains of each succeeding year until the earlier of its utilization or
expiration.
<TABLE>
<CAPTION>
PRECIOUS
METALS
EXPIRES MARCH 31 URSA FUND FUND JUNO FUND
- --------------------------------------- ------------ ---------- ----------
<S> <C> <C> <C>
2003 $ 6,618,786 $ 0 $ 0
2004 43,168,709 4,249,968 3,643,317
2005 50,012,823 709,440 106,438
2006 102,945,587 6,318,198 2,486,456
</TABLE>
48
<PAGE>
RYDEX SERIES TRUST
NOTES TO FINANCIAL STATEMENTS (CONCLUDED)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
12. URSA FUND REVERSE STOCK SPLIT
Effective after the close of business on August 14, 1998, the Ursa Fund Investor
Class Shares underwent a 1-for-2 reverse split. The effect of this transaction
was to reduce the number of outstanding shares in this class by one half, while
doubling the price per share. The price per share prior to the reverse split was
$5.25; after the reverse split, the price per share was $10.50. There was no
change in the aggregate market value of the outstanding shares as a result of
this transaction. All shares and per share data have been restated to reflect
the reverse split of issued and outstanding shares.
49
<PAGE>
A FAMILY OF MUTUAL FUNDS
DESIGNED EXCLUSIVELY FOR
PROFESSIONAL MONEY MANAGERS
NOVA FUND
URSA FUND
U.S. GOVERNMENT MONEY MARKET FUND
OVER-THE-COUNTER FUND
PRECIOUS METALS FUND
U.S. GOVERNMENT BOND FUND
JUNO FUND
ARKTOS FUND
THIS REPORT AND THE FINANCIAL STATEMENTS CONTAINED HEREIN ARE SUBMITTED FOR THE
GENERAL INFORMATION OF OUR SHAREHOLDERS. THE REPORT IS NOT AUTHORIZED FOR
DISTRIBUTION TO PROSPECTIVE INVESTORS UNLESS PRECEDED OR ACCOMPANIED BY AN
EFFECTIVE PROSPECTUS.
RYDEX SERIES TRUST
6116 Executive Blvd., Suite 400
Rockville, MD 20852
(301) 468-8520 (800) 820-0888
[LOGO]
SEMI-ANNUAL REPORT
SEPTEMBER 30, 1998
NOVA FUND
URSA FUND
U.S. GOVERNMENT MONEY MARKET FUND
OVER-THE-COUNTER FUND
PRECIOUS METALS FUND
U.S. GOVERNMENT BOND FUND
JUNO FUND
ARKTOS FUND
