<PAGE>
RYDEX SERIES TRUST
INSTITUTIONAL MONEY MARKET FUND
SCHEDULE OF INVESTMENTS
- --------------------------------------------------------------------------------
March 31, 1998
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
MARKET
VALUE
FACE AMOUNT (NOTE 1)
----------- -----------
<S> <C> <C>
REPURCHASE AGREEMENTS 100.00%
Repurchase Agreements Collateralized by U.S. Treasury
Obligations (Note 2)
5.87% due 4/01/98 $28,101,929 $28,101,929
5.875% due 4/01/98 28,101,929 28,101,929
5.89% due 4/01/98 21,076,447 21,076,447
5.90% due 4/01/98 40,719,698 40,719,698
-----------
Total Repurchase Agreements (Cost $118,000,003) 118,000,003
-----------
Total Investments 100% (Cost $118,000,003) $118,000,003
-----------
-----------
</TABLE>
See Notes to Financial Statements.
1
<PAGE>
RYDEX SERIES TRUST
INSTITUTIONAL MONEY MARKET FUND
STATEMENT OF ASSETS AND LIABILITIES
- --------------------------------------------------------------------------------
March 31, 1998
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
ASSETS
Repurchase Agreements (Notes 1 and 2) $118,000,003
Investment Income Receivable 19,290
Cash in Custodian Bank 58,206
Receivable for Shares Purchased 3,556,198
Unamortized Organization Costs (Note
1) 40,618
------------
Total Assets 121,674,315
------------
LIABILITIES
12b-1 Distribution Fee Payable 24,124
Payable for Shares Redeemed 52,028,196
Dividends Payable 6,596
Investment Advisory Fee Payable 47,203
Transfer Agent Fee Payable 17,167
Other Liabilities 71,527
------------
Total Liabilities 52,194,813
------------
NET ASSETS $ 69,479,502
------------
------------
Shares Outstanding 69,487,392
------------
------------
Net Asset Value Per Share $1.00
------------
------------
</TABLE>
See Notes to Financial Statements.
2
<PAGE>
RYDEX SERIES TRUST
INSTITUTIONAL MONEY MARKET FUND
STATEMENT OF OPERATIONS
- --------------------------------------------------------------------------------
Year Ended March 31, 1998
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
INVESTMENT INCOME
Interest $4,815,542
----------
Total Income 4,815,542
----------
EXPENSES
12b-1 Distribution Fees (Note 3) 219,374
Advisory Fees (Note 3) 482,629
Transfer Agent Fees (Note 3) 176,489
Audit and Outside Services 7,926
Accounting Fees (Note 3) 47,113
Legal 27,776
Organizational Expenses (Note 1) 12,092
Registration Fees 14,749
Custodian Fees 9,772
Miscellaneous 134,065
----------
Total Expenses 1,131,985
Custodian Fees Paid Indirectly
(Note 4) 2,380
----------
Net Expenses 1,129,605
----------
Net Investment Income 3,685,937
----------
REALIZED LOSS ON INVESTMENTS
Net Realized Loss on:
Investment Securities (5,883)
----------
Net Increase in Net Assets from
Operations $3,680,054
----------
----------
</TABLE>
See Notes to Financial Statements.
3
<PAGE>
RYDEX SERIES TRUST
INSTITUTIONAL MONEY MARKET FUND
STATEMENT OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
YEAR ENDED PERIOD ENDED
MARCH 31, 1998 MARCH 31, 1997*
--------------- ----------------
<S> <C> <C>
FROM INVESTMENT ACTIVITIES
Net Investment Income $ 3,685,937 $ 1,333,387
Net Realized Gain (Loss) on
Investments (5,883) 503
--------------- ----------------
Net Increase in Net Assets from
Operations 3,680,054 1,333,890
--------------- ----------------
Distributions to Shareholders
From Net Investment Income (Note 1) (3,690,407) (1,330,924)
From Realized Gain on Investments -- (503)
Net Increase (Decrease) in Net Assets
Resulting from Shares Transactions
(Note 5) (40,826,088) 110,313,480
--------------- ----------------
Net Increase (Decrease) in Net Assets (40,836,441) 110,315,943
--------------- ----------------
NET ASSETS--Beginning of Period 110,315,943 --
--------------- ----------------
NET ASSETS--End of Period $ 69,479,502 $110,315,943
--------------- ----------------
--------------- ----------------
</TABLE>
* COMMENCEMENT OF OPERATIONS: JULY 11, 1996
See Notes to Financial Statements.
4
<PAGE>
RYDEX SERIES TRUST
INSTITUTIONAL MONEY MARKET FUND
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
YEAR ENDED PERIOD ENDED
MARCH 31, 1998 MARCH 31, 1997*
--------------- ----------------
<S> <C> <C>
PER SHARE OPERATING PERFORMANCE:+
NET ASSET VALUE--BEGINNING OF PERIOD $ 1.00 $ 1.00
--------------- ----------------
Net Investment Income .04 .03
--------------- ----------------
Net Increase in Net Asset Value
Resulting from Operations .04 .03
Dividends to Shareholders from Net
Investment Income (.04) (.03)
--------------- ----------------
Net Increase in Net Asset Value .00 .00
--------------- ----------------
NET ASSET VALUE--END OF PERIOD $ 1.00 $ 1.00
--------------- ----------------
--------------- ----------------
Total Investment Return 4.29% 4.17%**
RATIOS TO AVERAGE NET ASSETS
Gross Expenses 1.24% 1.15%**
Net Expenses 1.24% 1.15%**
Net Investment Income 4.05% 3.50%**
SUPPLEMENTARY DATA:
Portfolio Turnover Rate*** 0% 0%
Net Assets, End of Period (000's
omitted) $69,480 $110,316
</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 11, 1996
** 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.
5
<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 as a non-diversified,
open-ended investment company. The Trust consists of nine 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, the High Yield Fund and the Institutional Money Market Fund.
These statements relate to the Institutional Money Market Fund (the "Fund"). The
following significant accounting policies are in conformity with generally
accepted accounting principles and are consistently followed by the Trust.
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. Effective April 1, 1998, the Institutional Money Market portfolio
ceased operations.
A. 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 of the Trust.
B. Securities transactions are recorded on the trade date (the date the
order to buy or sell is executed). Realized gains and losses from securities
transactions are recorded on the identified cost basis. Dividend income is
recorded on the ex-dividend date. Interest income is accrued on a daily basis.
C. Net investment income and short-term capital gains (if any) are
computed, and dividends are declared, daily. Dividends are reinvested in
additional shares unless shareholders request payment in cash.
D. The Fund 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.
E. Costs incurred by the Fund in connection with its organization and
registration have been deferred and are being amortized on the straight-line
method over a five year period beginning on the date on which the Fund commenced
its investment activities.
F. 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
6
<PAGE>
RYDEX SERIES TRUST
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates.
2. REPURCHASE AGREEMENTS
The Trust transfers uninvested cash balances into a single joint account, the
daily aggregate balance of which is invested in repurchase agreements
collateralized by U.S. Treasury obligations. As of March 31,1998 the repurchase
agreements with Fuji Securities, Inc., Paine Webber, Inc., Smith Barney, and
Prudential Securities, Inc., in the joint account and the collateral therefore
was as follows:
<TABLE>
<CAPTION>
SECURITY TYPE RANGE OF RATES PAR VALUE MARKET VALUE
- ---------------------------------- ------------------ ---------------- ----------------
<S> <C> <C> <C>
United States Treasury Notes 5.25%-8.875% $ 304,468,000 $ 311,647,808
United States Treasury Bonds 6.375%-8.125% $ 96,310,000 $ 118,594,270
</TABLE>
3. FEES AND OTHER TRANSACTIONS WITH AFFILIATES
Under the terms of an investment advisory contract, the Fund pays PADCO
Advisors, Inc., an affiliated entity, investment advisory fees calculated at an
annual percentage rate of fifty-five one hundreths of one percent (0.55%) of the
average daily net assets of the Fund.
PADCO Service Company, Inc., an affiliate of the investment advisor, provides
transfer agent services to the Fund at an annual rate of two-tenths of one
percent (0.20%) of the average daily net assets of the Fund.
The Fund has adopted a Distribution Plan (the "Plan") pursuant to Rule 12b-1
under the 1940 Act. The Plan provides that the Fund will pay the Distributor,
PADCO Financial Services, Inc., an affiliated entity, up to a maximum of 0.25%
per annum of the Fund's average daily net assets for expenses incurred by the
Distributor relating to distribution and promotion of the Fund's shares. Such
expenses include, but are not limited to, printing of certain reports used for
sales purposes, preparation and printing of sales literature, and related
expenses, including any maintenance, distribution, or service fees paid to
securities dealers or brokers, administrators, investment advisors or other
institutions or persons who have executed a distribution or service agreement.
The Fund paid PADCO Service Company, Inc. $47,113 in accounting fees for the
year ended March 31, 1998.
4. ACCOUNTING FOR EXPENSES
The Fund entered into an arrangement with its custodian whereby interest earned
on uninvested balances was used to offset a portion of the Fund's expenses.
7
<PAGE>
RYDEX SERIES TRUST
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
5. SHARE TRANSACTIONS
The Fund is authorized to issue an unlimited number of shares.
Transactions in SHARES for the year ended March 31,1998 were:
<TABLE>
<CAPTION>
Shares Purchased 3,388,469,075
<S> <C> <C>
Dividend Reinvestment 3,502,676
--------------
Total Purchased 3,391,971,751
Shares Redeemed (3,432,797,839)
--------------
Net Shares Redeemed (40,826,088)
--------------
--------------
Transactions in DOLLARS for the year ended March 31, 1998 were:
Shares Purchased $3,388,469,075
Dividend Reinvestment 3,502,676
--------------
Total Purchased 3,391,971,751
Shares Redeemed (3,432,797,839)
--------------
Net Shares Redeemed $ (40,826,088)
--------------
--------------
Transactions in SHARES for the period ended March 31,1997 were:
Shares Purchased 1,748,417,852
Dividend Reinvestment 1,179,631
--------------
Total Purchased 1,749,597,483
Shares Redeemed (1,639,284,003)
--------------
Net Shares Purchased 110,313,480
--------------
--------------
Transactions in DOLLARS for the period ended March 31, 1997 were:
Shares Purchased $1,748,417,852
Dividend Reinvestment 1,179,631
--------------
Total Purchased 1,749,597,483
Shares Redeemed (1,639,284,003)
--------------
Net Shares Purchased $ 110,313,480
--------------
--------------
</TABLE>
8
<PAGE>
RYDEX SERIES TRUST
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
6. NET ASSETS
At March 31, 1998, net assets consisted of:
<TABLE>
<CAPTION>
Paid-In-Capital $69,487,392
<S> <C> <C>
Distribution in Excess of Net Investment Income (2,007)
Accumulated Net Realized Loss on Investments (5,883)
-----------
Net Assets $69,479,502
-----------
-----------
</TABLE>
9
<PAGE>
INDEPENDENT AUDITORS' REPORT
The Shareholders and Board of Trustees,
Rydex Series Trust:
We have audited the statement of assets and liabilities, including the
schedule of investments, of the Institutional Money Market Fund (one of the nine
Funds) of Rydex Series Trust (the "Trust") as of March 31, 1998, the related
statements of operations, changes in net assets, and the financial highlights
for the periods presented. These financial statements and financial highlights
are the responsibility of the Trust's management. Our responsibility is to
express an opinion on these financial statements and financial highlights based
on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of securities owned as of March
31, 1998 by correspondence with the custodian and brokers. An audit also
includes assessing the accounting principles used and significant estimates made
by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements and financial highlights referred
to above present fairly, in all material respects, the financial position as of
March 31, 1998, the results of its operations, the changes in its net assets,
and the financial highlights for the periods presented in conformity with
generally accepted accounting principles.
DELOITTE & TOUCHE LLP
Princeton, New Jersey
May 22, 1998
