-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, EM0TUv/Gd8aGgjDIo2j0ZXipn8dytuaBM9FLUpbl1unUw1GZsa935EZg9dL3+4sc nbYyz/0NYw+/W3nWqKWZZA== 0000935069-05-000494.txt : 20050309 0000935069-05-000494.hdr.sgml : 20050309 20050309093730 ACCESSION NUMBER: 0000935069-05-000494 CONFORMED SUBMISSION TYPE: N-CSR PUBLIC DOCUMENT COUNT: 6 CONFORMED PERIOD OF REPORT: 20041231 FILED AS OF DATE: 20050309 DATE AS OF CHANGE: 20050309 EFFECTIVENESS DATE: 20050309 FILER: COMPANY DATA: COMPANY CONFORMED NAME: RYDEX VARIABLE TRUST CENTRAL INDEX KEY: 0001064046 IRS NUMBER: 000000000 FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: N-CSR SEC ACT: 1940 Act SEC FILE NUMBER: 811-08821 FILM NUMBER: 05668215 BUSINESS ADDRESS: STREET 1: 9601 BLACKWELL ROAD STREET 2: SUITE 500 CITY: ROCKVILLE STATE: MD ZIP: 20850 BUSINESS PHONE: 301-296-5100 MAIL ADDRESS: STREET 1: 9601 BLACKWELL ROAD STREET 2: SUITE 500 CITY: ROCKVILLE STATE: MD ZIP: 20850 N-CSR 1 vartarcomb12_04.txt VARIABLE TRUST AR 12-31-04 UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM N-CSR CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT INVESTMENT COMPANIES Investment Company Act file number 811- 08821 ----------- Rydex Variable Trust -------------------------------------------------- (Exact name of registrant as specified in charter) 9601 Blackwell Road, Suite 500 Rockville, Maryland 20850 -------------------------------------------------- (Address of principal executive offices) (Zip code) Carl G. Verboncoeur Rydex Variable Trust 9601 Blackwell Road, Suite 500 Rockville, Maryland 20850 -------------------------------------------------- (Name and address of agent for service) Registrant's telephone number, including area code: 1-301-296-5100 -------------- Date of fiscal year end: December 31, 2004 ----------------- Date of reporting period: December 31, 2004 ----------------- Form N-CSR is to be used by management investment companies to file reports with the Commission not later than 10 days after the transmission to stockholders of any report that is required to be transmitted to stockholders under Rule 30e-1 under the Investment Company Act of 1940 (17 CFR 270.30e-1). The Commission may use the information provided on Form N-CSR in its regulatory, disclosure review, inspection, and policymaking roles. A registrant is required to disclose the information specified by Form N-CSR, and the Commission will make this information public. A registrant is not required to respond to the collection of information contained in Form N-CSR unless the Form displays a currently valid Office of Management and Budget ("OMB") control number. Please direct comments concerning the accuracy of the information collection burden estimate and any suggestions for reducing the burden to Secretary, Securities and Exchange Commission, 450 Fifth Street, NW, Washington, DC 20549-0609. The OMB has reviewed this collection of information under the clearance requirements of 44 U.S.C. ss. 3507. ITEM 1. REPORTS TO STOCKHOLDERS. - -------------------------------------------------------------------------------- THE RYDEX VARIABLE TRUST - -------------------------------------------------------------------------------- ANNUAL REPORT DECEMBER 31, 2004 NOVA FUND URSA FUND OTC FUND ARKTOS FUND TITAN 500 FUND VELOCITY 100 FUND MEDIUS FUND INVERSE MID-CAP FUND MEKROS FUND INVERSE SMALL-CAP FUND U.S. GOVERNMENT BOND FUND JUNO FUND LARGE-CAP EUROPE FUND LARGE-CAP JAPAN FUND LONG DYNAMIC DOW 30 FUND INVERSE DYNAMIC DOW 30 FUND SMALL-CAP VALUE FUND MID-CAP VALUE FUND LARGE-CAP VALUE FUND SMALL-CAP GROWTH FUND MID-CAP GROWTH FUND LARGE-CAP GROWTH FUND SECTOR ROTATION FUND U.S. GOVERNMENT MONEY MARKET FUND BANKING FUND BASIC MATERIALS FUND BIOTECHNOLOGY FUND CONSUMER PRODUCTS FUND ELECTRONICS FUND ENERGY FUND ENERGY SERVICES FUND FINANCIAL SERVICES FUND HEALTH CARE FUND INTERNET FUND LEISURE FUND PRECIOUS METALS FUND REAL ESTATE FUND RETAILING FUND TECHNOLOGY FUND TELECOMMUNICATIONS FUND TRANSPORTATION FUND UTILITIES FUND [LOGO] RYDEXINVESTMENTS VA-ANN-1204 Essential for modern markets(TM) 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. Distributed by Rydex Distributors, Inc. TABLE OF CONTENTS - -------------------------------------------------------------------------------- LETTER TO OUR SHAREHOLDERS................................................ 2 ABOUT SHAREHOLDERS FUND'S EXPENSES........................................ 4 PERFORMANCE REPORTS AND FUND PROFILES..................................... 7 SCHEDULES OF INVESTMENTS.................................................. 49 STATEMENTS OF ASSETS AND LIABILITIES...................................... 150 STATEMENTS OF OPERATIONS.................................................. 158 STATEMENTS OF CHANGES IN NET ASSETS....................................... 166 FINANCIAL HIGHLIGHTS...................................................... 178 NOTES TO FINANCIAL STATEMENTS............................................. 183 REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM................... 194 OTHER INFORMATION......................................................... 195 UNAUDITED INFORMATION ON BOARD OF TRUSTEES AND OFFICERS................... 196 THE RYDEX VARIABLE TRUST ANNUAL REPORT | 1 - -------------------------------------------------------------------------------- DEAR SHAREHOLDER: The U.S. economy in 2004 was a study in contradiction, with a few surprises as well as continuation of long-running trends such as continued outperformance of small-caps, mid-caps and value. Entering 2004, job creation was stubbornly disappointing and the unemployment rate hovered near 6.0%. The first few months of the year brought more of the same, but the economy shifted into a more mature phase last spring. Despite record-high oil prices that reached $55 per barrel in October before leveling off at $43 at year-end, and a series of Federal Reserve rate hikes that brought the Fed funds rate up to 2.25% from 1.0%, inflation remained tame, job creation picked up and the nation's economy grew at a sustainable rate. More than two million jobs were created in 2004, while the unemployment rate dropped to 5.4% in December. Inflation, measured by the Consumer Price Index ("CPI"), grew at 3.3%, but energy price hikes comprised a good portion of the increase, with the core inflation index remaining historically low. When final figures are released, gross domestic product will have grown between 3% and 4% annually, while corporate profits leveled off from their hyper pace at the beginning of the year. Domestic equity markets struggled for much of the year, before a final-quarter push pumped up index numbers. As a group, small stocks outperformed large stocks for the year, despite struggling during the middle two quarters. The S&P 500(R) Index advanced 10.89% for the year and the Dow Jones Industrial Average Index gained 5.31%. The Nasdaq 100 Index(R) began the year at 1467.92 and sank to 1304.43 in August, before advancing to 1621.12 at the end of the year--delivering a 10.43% one-year return. In contrast, the S&P MidCap 400 and Russell 2000 indices returned 16.48% and 18.33%, respectively. Value outperformed growth for the fourth consecutive year - a surprise - while small-cap and mid-cap stocks outperformed large-cap stocks. RYDEX BENCHMARK FUNDS With broad market indices in positive territory for the year, Rydex long benchmark funds also enjoyed positive performance. Mid- and small-cap stocks reigned in 2004, with the Russell 2000 and the S&P MidCap 400 delivering 18.33% and 16.48% returns, respectively, for the year. In fact, the Russell bested the S&P 500 for the sixth year straight and the S&P MidCap 400 outdid the venerable index for the fifth consecutive year. Likewise, Rydex Medius Fund, which seeks to provide 150% of the daily price performance of the S&P MidCap 400 Index, turned in a 22.14% one-year return, while Rydex Mekros Fund, which seeks to provide 150% of the daily price performance of the Russell 2000 Index, provided a 25.20% return. Rydex Nova Fund, which seeks to provide 150% of the daily price performance of the S&P 500, and Rydex OTC Fund, which seeks to provide 100% of the daily price performance of the Nasdaq 100, delivered 14.62% and 9.35% returns, respectively, for the year. As would be expected on the short side, with positive performance among the benchmark indexes, the Rydex inverse funds were in negative territory for the year. RYDEX VALUE AND GROWTH FUNDS Value stocks showed a staying power in 2004, outperforming growth stocks across most styles. In the large-cap stock arena, the S&P 500/Barra Value Index rose 13.34% for the period, in contrast to the S&P 500/Barra Growth Index's return of 4.70%. The S&P MidCap 400/Barra Value Index returned 17.08% versus the 13.19% return of the S&P MidCap 400/Barra Growth Index. Also, the S&P SmallCap 600/Barra Value Index gained 21.78%, outperforming the S&P SmallCap 600/Barra Growth Index, which returned 21.37%. Rydex Large-Cap Growth Fund returned 4.26% and Rydex Mid-Cap Growth Fund returned 8.52%, the only two style funds that didn't best the S&P 500 Index or the S&P 1500 Super Composite Index. RYDEX INTERNATIONAL FUNDS International stocks, especially from emerging economies, surprisingly outperformed domestic equities for the second consecutive year. The average emerging market fund returned 25%, while the MSCI EAFE Index returned 17.6% for 2004, with about one-third of the latter's performance due to the dollar's decline against international currencies. In Europe, the Dow Jones STOXX 50 Index advanced just 4.30%, but returned 16.15% when the currency exchange was factored into the equation. Utilities and energy led the overseas rally, while semiconductor stocks lagged the index. Japanese stocks didn't fare as well, with the Topix 100 Index returning 6.76% for the 12 months. Financial services stocks helped performance, but semiconductors detracted. A 4% annual appreciation of the yen helped boost the index. Rydex Large-Cap Europe Fund was up 16.15% and Rydex Large-Cap Japan Fund advanced 10.33%. RYDEX BOND FUNDS Investors anticipated that interest rates would begin to rise in 2004, and they were not disappointed as the Federal Reserve raised its Fed funds rate 25 basis points five separate times from June 30 through year-end. Once the CPI met forecasts in mid-year, Fed Reserve Chairman Alan Greenspan not only raised the benchmark rate for the first time since 2000, but announced the board's intention to continue a series of measured rate hikes to head off inflation while maintaining job creation. In April, economic reports indicated an improved employment picture forcing inflationary concerns to gather steam. Long-term Treasury rates rose steadily until June, when increasing oil prices threatened to slow the economy and unemployment remained too high. As a result, inflationary pressures declined and long Treasury yields drifted lower. The current Long Bond ended the year at 4.82%. The 10-year Treasury note, when all was said and done, finished the 12 months about where it began, yielding 4.22%. In contrast, yields of shorter-term Treasuries continued to rise flattening the yield curve. Rydex U.S. Government Bond Fund returned 8.42%. The fund' s objective is correlation to 120% of the daily performance of the Lehman Long Treasury Bond Index. 2 | THE RYDEX VARIABLE TRUST ANNUAL REPORT RYDEX SECTOR FUNDS It was a positive year for sector investing, with a wide dispersion of returns providing opportunities for investors and positive returns across most sectors. Twelve of the 18 Rydex sector funds bested the S&P 500. Propelled by increased demand and record high crude oil prices, Rydex Energy Services Fund was top dog among the Rydex sector funds, sporting a 33.74% annual return. Following close behind were Rydex Energy Fund at 32.27%, Rydex Real Estate Fund at 29.54% and Rydex Transportation Fund at 22.99%. Only two Rydex sector funds were in negative territory: Rydex Electronics Fund and Rydex Precious Metals Fund, weighed down by overcapacity in the former industry and a stock market rebound and dollar strengthening in the latter. As always, we appreciate the trust you have placed in our firm's quality and integrity by investing with us. Sincerely, /s/ Carl G. Verboncoeur Carl G. Verboncoeur President THE RYDEX VARIABLE TRUST ANNUAL REPORT | 3 ABOUT SHAREHOLDERS FUND'S EXPENSES - -------------------------------------------------------------------------------- All mutual funds have operating expenses and it is important for our shareholders to understand the impact of costs on their investments. As a shareholder of the fund, you incur two types of costs: (1) transaction costs, including sales charges (loads) on purchase payments, reinvested dividends, or other distributions; redemption fees; and exchange fees; and (2) ongoing costs, including management fees, administrative services, and shareholder reports, among others. Operating expenses, which are deducted from a fund's gross income, reduce the investment return of the fund. A fund's expenses are expressed as a percentage of its average net assets, which is known as the expense ratio. The following examples are intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds. The examples are based on an investment of $1,000 made at the beginning of the period and held for the entire six-month period beginning June 30, 2004 and ending December 31, 2004. The following tables illustrate your fund's costs in two ways: TABLE 1. BASED ON ACTUAL FUND RETURN. This section helps you estimate the actual expenses that you paid over the period. The "Ending Account Value" shown is derived from the fund's actual return, and the fourth column shows the dollar amount that would have been paid by an investor who started with $1,000 in the fund. You may use the information here, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number given for your fund under the heading "Expenses Paid During Period." Certain retirement plans such as IRA, Roth IRA and 403(b) accounts are charged an annual $15 maintenance fee. Upon liquidating your retirement account, a $15 account-closing fee will be taken from the proceeds of your redemption. TABLE 2. BASED ON HYPOTHETICAL 5% RETURN. This section is intended to help you compare your fund's cost with those of other mutual funds. The table provides information about hypothetical account values and hypothetical expenses based on the fund's actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the fund's actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid during the period. In addition, certain retirement plans such as IRA, Roth IRA and 403(b) accounts are charged an annual $15 maintenance fee. Upon liquidating your retirement account, a $15 account-closing fee will be taken from the proceeds of your redemption. The example is useful in making comparisons because the Securities Exchange Commission requires all mutual funds to calculate expenses based on the 5% return. You can assess your fund's costs by comparing this hypothetical example with the hypothetical examples that appear in shareholder reports of other funds. The calculations above assume no shares were bought or sold during the period. Your actual costs may have been higher or lower, depending on the amount of your investment and the timing of any purchases or redemptions. Note that the expenses shown in the table are meant to highlight and help you compare ongoing costs only and do not reflect any transactional costs which may be incurred by some of the fund's classes. These costs may include, but are not limited to, sales charges (loads), redemption fees, and exchange fees. See Notes to Financial Statements. 4 | THE RYDEX VARIABLE TRUST ANNUAL REPORT ABOUT SHAREHOLDERS FUND'S EXPENSES (CONTINUED) - -------------------------------------------------------------------------------- You can find more information about the fund's expenses, including annual expense ratios for the past five years, in the Financial Highlights section of this report. For additional information on operating expenses and other shareholder costs, please refer to the appropriate fund prospectus. TABLE 1. BASED ON ACTUAL FUND RETURN
BEGINNING ENDING EXPENSES EXPENSE ACCOUNT VALUE ACCOUNT VALUE PAID DURING RATIOS+ JUNE 30, 2004 DECEMBER 31, 2004 PERIOD* - ------------------------------------------------------------------------------------------------------ ACTUAL FUND RETURN NOVA FUND 1.40% $1,000.00 $1,091.71 $7.35 URSA FUND 1.60% 1,000.00 936.82 7.76 OTC FUND 1.44% 1,000.00 1,061.99 7.42 ARKTOS FUND 1.62% 1,000.00 927.11 7.83 TITAN 500 FUND 1.62% 1,000.00 1,116.74 8.62 VELOCITY 100 FUND 1.63% 1,000.00 1,101.52 8.60 MEDIUS FUND 1.61% 1,000.00 1,134.75 8.62 INVERSE MID-CAP FUND 1.63% 1,000.00 913.86 7.80 MEKROS FUND 1.62% 1,000.00 1,148.53 8.75 INVERSE SMALL-CAP FUND 1.66% 1,000.00 899.03 7.91 U.S. GOVERNMENT BOND FUND 1.19% 1,000.00 1,108.50 6.31 JUNO FUND 1.61% 1,000.00 911.33 7.70 LARGE-CAP EUROPE FUND 1.61% 1,000.00 1,191.21 8.87 LARGE-CAP JAPAN FUND 1.56% 1,000.00 1,014.24 7.89 LONG DYNAMIC DOW 30 FUND 1.63% 1,000.00 1,060.61 8.44 INVERSE DYNAMIC DOW 30 FUND 1.63% 1,000.00 915.36 7.81 SMALL-CAP VALUE FUND 1.46% 1,000.00 1,113.93 7.73 MID-CAP VALUE FUND 1.48% 1,000.00 1,107.71 7.83 LARGE-CAP VALUE FUND 1.45% 1,000.00 1,102.37 7.65 SMALL-CAP GROWTH FUND 1.46% 1,000.00 1,087.67 7.62 MID-CAP GROWTH FUND 1.46% 1,000.00 1,063.92 7.55 LARGE-CAP GROWTH FUND 1.46% 1,000.00 1,022.19 7.41 SECTOR ROTATION FUND 1.59% 1,000.00 1,101.68 8.36 U.S. GOVERNMENT MONEY MARKET FUND 1.18% 1,000.00 1,002.34 5.93 BANKING FUND 1.57% 1,000.00 1,114.77 8.35 BASIC MATERIALS FUND 1.57% 1,000.00 1,146.22 8.44 BIOTECHNOLOGY FUND 1.56% 1,000.00 993.31 7.81 CONSUMER PRODUCTS FUND 1.58% 1,000.00 1,032.24 8.04 ELECTRONICS FUND 1.56% 1,000.00 867.02 7.28 ENERGY FUND 1.57% 1,000.00 1,158.60 8.50 ENERGY SERVICES FUND 1.57% 1,000.00 1,166.76 8.53 FINANCIAL SERVICES FUND 1.57% 1,000.00 1,125.29 8.37 HEALTH CARE FUND 1.57% 1,000.00 1,016.60 7.94 INTERNET FUND 1.54% 1,000.00 1,052.60 7.94 LEISURE FUND 1.56% 1,000.00 1,166.29 8.49 PRECIOUS METALS FUND 1.41% 1,000.00 1,087.56 7.39 REAL ESTATE FUND 1.57% 1,000.00 1,230.74 8.80 RETAILING FUND 1.57% 1,000.00 1,053.96 8.08 TECHNOLOGY FUND 1.53% 1,000.00 1,004.75 7.71 TELECOMMUNICATIONS FUND 1.55% 1,000.00 1,063.73 8.03 TRANSPORTATION FUND 1.57% 1,000.00 1,161.46 8.48 UTILITIES FUND 1.55% 1,000.00 1,130.07 8.29 - ------------------------------------------------------------------------------------------------------
See Notes to Financial Statements. THE RYDEX VARIABLE TRUST ANNUAL REPORT | 5 ABOUT SHAREHOLDERS FUND'S EXPENSES (CONCLUDED) - --------------------------------------------------------------------------------
TABLE 2. BASED ON HYPOTHETICAL 5% RETURN BEGINNING ENDING EXPENSES EXPENSE ACCOUNT VALUE ACCOUNT VALUE PAID DURING RATIOS+ JUNE 30, 2004 DECEMBER 31, 2004 PERIOD* - ------------------------------------------------------------------------------------------------------ HYPOTHETICAL 5% RETURN NOVA FUND 1.40% $1,000.00 $1,042.80 $7.20 URSA FUND 1.60% 1,000.00 1,041.78 8.22 OTC FUND 1.44% 1,000.00 1,042.62 7.38 ARKTOS FUND 1.62% 1,000.00 1,041.65 8.35 TITAN 500 FUND 1.62% 1,000.00 1,041.65 8.35 VELOCITY 100 FUND 1.63% 1,000.00 1,041.61 8.39 MEDIUS FUND 1.61% 1,000.00 1,041.70 8.30 INVERSE MID-CAP FUND 1.63% 1,000.00 1,041.61 8.39 MEKROS FUND 1.62% 1,000.00 1,041.65 8.35 INVERSE SMALL-CAP FUND 1.66% 1,000.00 1,041.46 8.54 U.S. GOVERNMENT BOND FUND 1.19% 1,000.00 1,043.86 6.14 JUNO FUND 1.61% 1,000.00 1,041.70 8.30 LARGE-CAP EUROPE FUND 1.61% 1,000.00 1,041.70 8.30 LARGE-CAP JAPAN FUND 1.56% 1,000.00 1,041.97 8.03 LONG DYNAMIC DOW 30 FUND 1.63% 1,000.00 1,041.61 8.39 INVERSE DYNAMIC DOW 30 FUND 1.63% 1,000.00 1,041.61 8.39 SMALL-CAP VALUE FUND 1.46% 1,000.00 1,042.50 7.50 MID-CAP VALUE FUND 1.48% 1,000.00 1,042.38 7.62 LARGE-CAP VALUE FUND 1.45% 1,000.00 1,042.54 7.46 SMALL-CAP GROWTH FUND 1.46% 1,000.00 1,042.50 7.50 MID-CAP GROWTH FUND 1.46% 1,000.00 1,042.50 7.50 LARGE-CAP GROWTH FUND 1.46% 1,000.00 1,042.50 7.50 SECTOR ROTATION FUND 1.59% 1,000.00 1,041.84 8.16 U.S. GOVERNMENT MONEY MARKET FUND 1.18% 1,000.00 1,043.93 6.07 BANKING FUND 1.57% 1,000.00 1,041.91 8.09 BASIC MATERIALS FUND 1.57% 1,000.00 1,041.91 8.09 BIOTECHNOLOGY FUND 1.56% 1,000.00 1,041.97 8.03 CONSUMER PRODUCTS FUND 1.58% 1,000.00 1,041.89 8.11 ELECTRONICS FUND 1.56% 1,000.00 1,041.97 8.03 ENERGY FUND 1.57% 1,000.00 1,041.91 8.09 ENERGY SERVICES FUND 1.57% 1,000.00 1,041.91 8.09 FINANCIAL SERVICES FUND 1.57% 1,000.00 1,041.91 8.09 HEALTH CARE FUND 1.57% 1,000.00 1,041.91 8.09 INTERNET FUND 1.54% 1,000.00 1,042.07 7.93 LEISURE FUND 1.56% 1,000.00 1,041.97 8.03 PRECIOUS METALS FUND 1.41% 1,000.00 1,042.74 7.26 REAL ESTATE FUND 1.57% 1,000.00 1,041.91 8.09 RETAILING FUND 1.57% 1,000.00 1,041.91 8.09 TECHNOLOGY FUND 1.53% 1,000.00 1,042.12 7.88 TELECOMMUNICATIONS FUND 1.55% 1,000.00 1,042.02 7.98 TRANSPORTATION FUND 1.57% 1,000.00 1,041.91 8.09 UTILTITIES FUND 1.55% 1,000.00 1,042.02 7.98 - ------------------------------------------------------------------------------------------------------
* EXPENSES ARE EQUAL TO THE FUND'S ANNUALIZED EXPENSE RATIO, MULTIPLIED BY THE AVERAGE ACCOUNT VALUE OVER THE PERIOD, MULTIPLIED BY THE NUMBER OF DAYS IN THE MOST RECENT FISCAL HALF-YEAR, THEN DIVIDED BY 365. + ANNUALIZED. See Notes to Financial Statements. 6 | THE RYDEX VARIABLE TRUST ANNUAL REPORT PERFORMANCE REPORTS AND FUND PROFILES - -------------------------------------------------------------------------------- NOVA FUND OBJECTIVE: To provide investment results that match the performance of a specific benchmark on a daily basis. The Fund's current benchmark is 150% of the performance of the S&P 500(R) Index. Inception: May 7, 1997 The Fund's relation to the S&P 500 Index, which gained 10.89% in 2004 and outperformed both the Dow Jones Industrial Average Index and Nasdaq 100 Index, helped it post strong relative returns for the year. Energy, led by Exxon Mobil, the industrials and consumer discretionary sector, was one of the leaders for the year. The technology and health care sectors fared poorly. The Fund returned 14.62% for the year. For the year, the Fund achieved a daily correlation of more than .99 to its benchmark of 150% of the daily price performance of the S&P 500 Index. The effects of compounding may cause the longer-term correlation of the Fund to its benchmark to diminish.(1) (1) 1.00 EQUALS PERFECT CORRELATION. THIS CALCULATION IS BASED ON THE DAILY PRICE RETURN OF AN INDEX. CUMULATIVE FUND PERFORMANCE: MAY 7, 1997 - DECEMBER 31, 2004 [THE FOLLOWING TABLE WAS REPRESENTED AS A LINE GRAPH IN THE PRINTED MATERIAL.] DATE NOVA FUND S&P 500 INDEX - ---- --------- ------------- 5/7/1997 10,000 10,000 6/30/1997 10,970 10,885 9/30/1997 11,950 11,700 12/31/1997 12,210 12,036 3/31/1998 14,190 13,715 6/30/1998 14,570 14,168 9/30/1998 12,070 12,759 12/31/1998 15,880 15,476 3/31/1999 16,600 16,247 6/30/1999 18,070 17,392 9/30/1999 16,182 16,306 12/31/1999 19,577 18,732 3/31/2000 19,893 19,162 6/30/2000 18,575 18,653 9/30/2000 18,051 18,472 12/31/2000 15,602 17,027 3/31/2001 12,592 15,008 6/30/2001 13,535 15,887 9/30/2001 10,424 13,555 12/31/2001 11,923 15,003 3/31/2002 11,882 15,044 6/30/2002 9,434 13,029 9/30/2002 6,909 10,778 12/31/2002 7,664 11,687 3/31/2003 7,131 11,319 6/30/2003 8,788 13,062 9/30/2003 9,084 13,407 12/31/2003 10,667 15,040 3/31/2004 10,978 15,294 6/30/2004 11,200 15,558 9/30/2004 10,762 15,267 12/31/2004 12,227 16,676 AVERAGE ANNUAL TOTAL RETURNS FOR THE PERIOD ENDED 12/31/04 - -------------------------------------------------------------------------------- SINCE ONE FIVE INCEPTION YEAR YEAR (05/07/97) - -------------------------------------------------------------------------------- NOVA FUND 14.62% -8.98% 2.66% S&P 500 INDEX 10.89% -2.30% 6.91% - -------------------------------------------------------------------------------- THE RETURNS PRESENTED ABOVE DO NOT REFLECT THE EFFECTS OF TAXES. PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS. THE S&P 500 INDEX IS AN UNMANAGED STOCK INDEX AND, UNLIKE THE FUND, HAS NO MANAGEMENT FEES OR OTHER OPERATING EXPENSES TO REDUCE ITS REPORTED RETURNS. RETURNS ARE HISTORICAL AND INCLUDE CHANGES IN PRINCIPAL AND REINVESTED DIVIDENDS AND CAPITAL GAINS. HOLDINGS DIVERSIFICATION (MARKET EXPOSURE AS % OF NET ASSETS) [THE FOLLOWING TABLE WAS REPRESENTED AS A BAR GRAPH IN THE PRINTED MATERIAL.] NOVA FUND S&P 500 INDEX --------- ------------- OTHER 7.1% 9.6% FINANCIALS 15.2% 20.8% INFORMATION TECHNOLOGY 12.8% 15.9% HEALTH CARE 9.7% 12.4% INDUSTRIALS 8.9% 11.8% CONSUMER DISCRETIONARY 8.8% 11.9% CONSUMER STAPLES 8.0% 10.6% ENERGY 5.4% 7.0% FUTURES CONTRACTS 74.1% "Holdings Diversification (Market Exposure as % of Net Assets)" excludes any temporary cash investments. TEN LARGEST HOLDINGS (% OF TOTAL NET ASSETS) - ------------------------------------------------------ Exxon Mobil Corp. 2.5% General Electric Co. 2.3% Microsoft Corp. 1.7% Pfizer, Inc. 1.6% International Business Machines Corp. 1.4% Johnson & Johnson 1.4% Citigroup, Inc. 1.4% Bank of America Corp. 1.3% JPMorgan Chase & Co. 1.2% Wal-Mart Stores, Inc. 1.2% - ------------------------------------------------------ Top Ten Total 16.0% - ------------------------------------------------------ "Ten Largest Holdings" excludes any temporary cash investments and equity index products. See Notes to Financial Statements. THE RYDEX VARIABLE TRUST ANNUAL REPORT | 7 PERFORMANCE REPORTS AND FUND PROFILES (CONTINUED) - -------------------------------------------------------------------------------- URSA FUND OBJECTIVE: To provide investment results that will inversely correlate to the performance of the S&P 500(R) Index. Inception: June 9, 1997 The energy, industrials and consumer discretionary sectors led the S&P 500 Index to a 10.89% gain last year, outperforming both the Dow Jones Industrial Average Index and the Nasdaq 100 Index. McDonald's, Exxon Mobil, Eastman Kodak and Johnson & Johnson all gained at least 25% last year, leading the list of gainers. As a result, Rydex Ursa Fund, which strives to achieve results that are opposite the S&P 500 Index, declined 10.05% during the period. It's important to note that the Fund performed the way it was designed to perform. For the year ended December 31, 2004, the Fund achieved a daily correlation of more than .99 to its benchmark of -100% of the daily price performance of the S&P 500 Index. The effects of compounding may cause the longer-term correlation of the Fund to its benchmark to diminish.(1) (1) 1.00 EQUALS PERFECT CORRELATION. THIS CALCULATION IS BASED ON THE DAILY PRICE RETURN OF AN INDEX. CUMULATIVE FUND PERFORMANCE: JUNE 9, 1997 - DECEMBER 31, 2004 [THE FOLLOWING TABLE WAS REPRESENTED AS A LINE GRAPH IN THE PRINTED MATERIAL.] DATE URSA FUND S&P 500 INDEX - ---- --------- ------------- 6/9/1997 10,000 10,000 6/30/1997 9,786 10,266 9/30/1997 9,028 11,035 12/31/1997 8,622 11,352 3/31/1998 7,618 12,935 6/30/1998 7,425 13,362 9/30/1998 8,098 12,033 12/31/1998 6,731 14,596 3/31/1999 6,432 15,323 6/30/1999 5,994 16,403 9/30/1999 6,465 15,379 12/31/1999 5,717 17,667 3/31/2000 5,610 18,072 6/30/2000 5,856 17,592 9/30/2000 6,025 17,422 12/31/2000 6,635 16,059 3/31/2001 7,593 14,155 6/30/2001 7,234 14,983 9/30/2001 8,466 12,784 12/31/2001 7,629 14,150 3/31/2002 7,581 14,189 6/30/2002 8,697 12,288 9/30/2002 10,237 10,165 12/31/2002 9,280 11,023 3/31/2003 9,477 10,676 6/30/2003 8,177 12,319 9/30/2003 7,932 12,645 12/31/2003 7,086 14,184 3/31/2004 6,927 14,425 6/30/2004 6,792 14,673 9/30/2004 6,927 14,399 12/31/2004 6,363 15,728 AVERAGE ANNUAL TOTAL RETURNS FOR THE PERIOD ENDED 12/31/04 - -------------------------------------------------------------------------------- SINCE ONE FIVE INCEPTION YEAR YEAR (06/09/97) - -------------------------------------------------------------------------------- URSA FUND -10.05% 2.16% -5.80% S&P 500 INDEX 10.89% -2.30% 6.17% - -------------------------------------------------------------------------------- THE RETURNS PRESENTED ABOVE DO NOT REFLECT THE EFFECTS OF TAXES. PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS. THE S&P 500 INDEX IS AN UNMANAGED STOCK INDEX AND, UNLIKE THE FUND, HAS NO MANAGEMENT FEES OR OTHER OPERATING EXPENSES TO REDUCE ITS REPORTED RETURNS. RETURNS ARE HISTORICAL AND INCLUDE CHANGES IN PRINCIPAL AND REINVESTED DIVIDENDS AND CAPITAL GAINS. HOLDINGS DIVERSIFICATION (MARKET EXPOSURE AS % OF NET ASSETS) [THE FOLLOWING TABLE WAS REPRESENTED AS A BAR GRAPH IN THE PRINTED MATERIAL.] URSA FUND S&P 500 INDEX --------- ------------- OTHER 9.6% FINANCIALS 20.8% INFORMATION TECHNOLOGY 15.9% HEALTH CARE 12.4% CONSUMER DISCRETIONARY 11.9% INDUSTRIALS 11.8% CONSUMER STAPLES 10.6% ENERGY 7.0% FUTURES CONTRACTS SHORT SALES -99.9% EQUITY INDEX SWAP AGREEMENTS 0.0% "Holdings Diversification (Market Exposure as % of Net Assets)" excludes any temporary cash investments. The fund invests principally in leveraged derivative instruments, such as equity swap agreements, futures contracts, and options on securities, futures contracts and stock indices. See Notes to Financial Statements. 8 | THE RYDEX VARIABLE TRUST ANNUAL REPORT PERFORMANCE REPORTS AND FUND PROFILES (CONTINUED) - -------------------------------------------------------------------------------- OTC FUND OBJECTIVE: To provide investment results that correspond to a benchmark for over-the-counter securities. The Fund's current benchmark is the Nasdaq 100 Index(R). Inception: May 7, 1997 Although corporate earnings and the nation's output slowed somewhat after a torrid 2003, last year marked the second year of positive, albeit more subdued, returns for the major market indices. Rydex OTC Fund gained 9.35%, which, accounting for fees, was in line with the Nasdaq 100 Index's showing of 10.43%. The Nasdaq 100 Index's positive performance was attained despite a pullback by the technology and health care sectors. For the year ended December 31, 2004, the Fund achieved a daily correlation of more than .99 to its benchmark of the daily price performance of the Nasdaq 100 Index. The effects of compounding may cause the longer-term correlation of the Fund to its benchmark to diminish.(1) (1) 1.00 EQUALS PERFECT CORRELATION. THIS CALCULATION IS BASED ON THE DAILY PRICE RETURN OF AN INDEX. CUMULATIVE FUND PERFORMANCE: MAY 7, 1997 - DECEMBER 31, 2004 [THE FOLLOWING TABLE WAS REPRESENTED AS A LINE GRAPH IN THE PRINTED MATERIAL.] DATE OTC FUND NASDAQ 100 INDEX - ---- -------- ---------------- 5/7/1997 10,000 10,000 6/30/1997 10,400 10,528 9/30/1997 11,760 12,067 12/31/1997 10,650 10,897 3/31/1998 13,120 13,425 6/30/1998 14,360 14,708 9/30/1998 14,470 14,798 12/31/1998 19,570 20,192 3/31/1999 22,630 23,166 6/30/1999 24,630 25,260 9/30/1999 25,734 26,482 12/31/1999 39,399 40,779 3/31/2000 46,497 48,367 6/30/2000 39,685 41,394 9/30/2000 37,486 39,270 12/31/2000 24,354 25,754 3/31/2001 16,087 17,303 6/30/2001 18,700 20,128 9/30/2001 11,756 12,850 12/31/2001 15,788 17,344 3/31/2002 14,476 15,978 6/30/2002 10,401 11,563 9/30/2002 8,203 9,156 12/31/2002 9,654 10,826 3/31/2003 9,964 11,203 6/30/2003 11,670 13,216 9/30/2003 12,513 14,338 12/31/2003 14,039 16,144 3/31/2004 13,729 15,820 6/30/2004 14,455 16,680 9/30/2004 13,409 15,537 12/31/2004 15,351 17,829 AVERAGE ANNUAL TOTAL RETURNS FOR THE PERIOD ENDED 12/31/04 - -------------------------------------------------------------------------------- SINCE ONE FIVE INCEPTION YEAR YEAR (05/07/97) - -------------------------------------------------------------------------------- OTC FUND 9.35% -17.18% 5.76% NASDAQ 100 INDEX 10.43% -15.25% 7.85% - -------------------------------------------------------------------------------- THE RETURNS PRESENTED ABOVE DO NOT REFLECT THE EFFECTS OF TAXES. PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS. THE NASDAQ 100 INDEX IS AN UNMANAGED STOCK INDEX AND, UNLIKE THE FUND, HAS NO MANAGEMENT FEES OR OTHER OPERATING EXPENSES TO REDUCE ITS REPORTED RETURNS. RETURNS ARE HISTORICAL AND INCLUDE CHANGES IN PRINCIPAL AND REINVESTED DIVIDENDS AND CAPITAL GAINS. HOLDINGS DIVERSIFICATION (MARKET EXPOSURE AS % OF NET ASSETS) [THE FOLLOWING TABLE WAS REPRESENTED AS A BAR GRAPH IN THE PRINTED MATERIAL.] OTC FUND NASDAQ 100 INDEX -------- ---------------- OTHER 4.9% 5.7% INFORMATION TECHNOLOGY 53.2% 58.4% CONSUMER DISCRETIONARY 15.7% 16.8% HEALTH CARE 11.2% 12.9% INDUSTRIALS 4.5% 6.2% FUTURES CONTRACTS 10.7% 0.0% "Holdings Diversification (Market Exposure as % of Net Assets)" excludes any temporary cash investments. TEN LARGEST HOLDINGS (% OF TOTAL NET ASSETS) - ------------------------------------------------------ Microsoft Corp. 8.0% Qualcomm, Inc. 5.8% eBay, Inc. 3.9% Intel Corp. 3.9% Cisco Systems, Inc. 3.5% Dell, Inc. 3.2% Nextel Communications, Inc. - Class A 2.8% Oracle Corp. 2.5% Starbucks Corp. 2.4% Apple Computer, Inc. 2.4% - ------------------------------------------------------ Top Ten Total 38.4% - ------------------------------------------------------ "Ten Largest Holdings" excludes any temporary cash investments and equity index products. See Notes to Financial Statements. THE RYDEX VARIABLE TRUST ANNUAL REPORT | 9 PERFORMANCE REPORTS AND FUND PROFILES (CONTINUED) - -------------------------------------------------------------------------------- ARKTOS FUND OBJECTIVE: To provide investment results that will match the performance of a specific benchmark. The Fund's current benchmark is the inverse of the performance of the Nasdaq 100 Index(R). Inception: May 21, 2001 Although the Nasdaq 100 Index didn't match its strong performance of 2003, it did gain a respectable 10.43% for the past year. The technology and health care sectors, two major components of the index, struggled during the year, but consumer discretionary stocks, another large part of the Nasdaq 100 Index, performed well. The index's positive performance meant that Rydex Arktos Fund, since it strives to achieve the opposite results of the index, performed as expected declining 11.83% in 2004. For the year ended December 31, 2004, the Fund achieved a daily correlation of more than .99 to its benchmark of -100% of the daily price performance of the Nasdaq 100 Index. The effects of compounding may cause the longer-term correlation of the Fund to its benchmark to diminish.(1) (1) 1.00 EQUALS PERFECT CORRELATION. THIS CALCULATION IS BASED ON THE DAILY PRICE RETURN OF AN INDEX. CUMULATIVE FUND PERFORMANCE: MAY 21, 2001 - DECEMBER 31, 2004 [THE FOLLOWING TABLE WAS REPRESENTED AS A LINE GRAPH IN THE PRINTED MATERIAL.] DATE ARKTOS FUND NASDAQ 100 INDEX - ---- ----------- ---------------- 5/21/2001 10,000 10,000 5/31/2001 11,420 8,769 6/30/2001 11,132 8,917 7/31/2001 11,996 8,203 8/31/2001 13,576 7,160 9/30/2001 16,868 5,692 10/31/2001 13,972 6,649 11/30/2001 11,852 7,776 12/31/2001 11,792 7,683 1/31/2002 11,888 7,552 2/28/2002 13,432 6,622 3/31/2002 12,436 7,078 4/30/2002 14,028 6,222 5/31/2002 14,472 5,887 6/30/2002 16,440 5,122 7/31/2002 17,404 4,687 8/31/2002 17,428 4,591 9/30/2002 19,478 4,056 10/31/2002 16,074 4,821 11/30/2002 14,033 5,438 12/31/2002 15,783 4,796 1/31/2003 15,589 4,789 2/28/2003 15,092 4,919 3/31/2003 14,797 4,963 4/30/2003 13,555 5,389 5/31/2003 12,460 5,836 6/30/2003 12,387 5,855 7/31/2003 11,603 6,221 8/31/2003 11,013 6,534 9/30/2003 11,264 6,352 10/31/2003 10,324 6,901 11/30/2003 10,226 6,939 12/31/2003 9,885 7,152 1/31/2004 9,688 7,274 2/29/2004 9,820 7,164 3/31/2004 10,000 7,008 4/30/2004 10,214 6,827 5/31/2004 9,738 7,143 6/30/2004 9,401 7,389 7/31/2004 10,152 6,823 8/31/2004 10,361 6,668 9/30/2004 10,025 6,883 10/31/2004 9,504 7,243 11/30/2004 8,983 7,656 12/31/2004 8,716 7,898 AVERAGE ANNUAL TOTAL RETURNS FOR THE PERIOD ENDED 12/31/04 - -------------------------------------------------------------------------------- SINCE ONE INCEPTION YEAR (05/21/01) - -------------------------------------------------------------------------------- ARKTOS FUND -11.83% -3.73% NASDAQ 100 INDEX 10.43% -6.32% - -------------------------------------------------------------------------------- THE RETURNS PRESENTED ABOVE DO NOT REFLECT THE EFFECTS OF TAXES. PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS. THE NASDAQ 100 INDEX IS AN UNMANAGED STOCK INDEX AND, UNLIKE THE FUND, HAS NO MANAGEMENT FEES OR OTHER OPERATING EXPENSES TO REDUCE ITS REPORTED RETURNS. RETURNS ARE HISTORICAL AND INCLUDE CHANGES IN PRINCIPAL AND REINVESTED DIVIDENDS AND CAPITAL GAINS. HOLDINGS DIVERSIFICATION (MARKET EXPOSURE AS % OF NET ASSETS) [THE FOLLOWING TABLE WAS REPRESENTED AS A BAR GRAPH IN THE PRINTED MATERIAL.] ARKTOS FUND NASDAQ 100 INDEX ----------- ---------------- OTHER 5.7% INFORMATION TECHNOLOGY 58.4% CONSUMER DISCRETIONARY 16.8% HEALTH CARE 12.9% INDUSTRIALS 6.2% FUTURES CONTRACTS SHORT SALES -14.3% EQUITY INDEX SWAP AGREEMENTS -85.5% "Holdings Diversification (Market Exposure as % of Net Assets)" excludes any temporary cash investments. The fund invests principally in leveraged derivative instruments, such as equity swap agreements, futures contracts, and options on securities, futures contracts and stock indices. See Notes to Financial Statements. 10 | THE RYDEX VARIABLE TRUST ANNUAL REPORT PERFORMANCE REPORTS AND FUND PROFILES (CONTINUED) - -------------------------------------------------------------------------------- TITAN 500 FUND OBJECTIVE: To provide investment results that will match the performance of a specific benchmark on a daily basis. The Fund's current benchmark is 200% of the performance of the S&P 500(R) Index. Inception: October 1, 2001 Employing a long strategy to the S&P 500 Index, as Rydex Titan 500 Fund does, worked in the Fund's favor during 2004. The Index rallied during the latter half of the year to post a 10.89% gain. The energy sector generally benefited from rising energy costs, especially of crude oil, to easily lead sector performance. Leverage also added to performance. The Fund returned 16.90% during the period. For the year ended December 31, 2004, the Fund achieved a daily correlation of more than .99 to its benchmark of 200% the daily price performance of the S&P 500 Index. The effects of compounding may cause the longer-term correlation of the Fund to its benchmark to diminish.(1) (1) 1.00 EQUALS PERFECT CORRELATION. THIS CALCULATION IS BASED ON THE DAILY PRICE RETURN OF AN INDEX. CUMULATIVE FUND PERFORMANCE: OCTOBER 1, 2001 - DECEMBER 31, 2004 [THE FOLLOWING TABLE WAS REPRESENTED AS A LINE GRAPH IN THE PRINTED MATERIAL.] DATE TITAN 500 FUND S&P 500 INDEX - ---- -------------- ------------- 10/1/2001 10,000 10,000 10/31/2001 10,356 10,213 11/30/2001 11,824 10,997 12/31/2001 11,948 11,093 1/31/2002 11,496 10,931 2/28/2002 11,048 10,721 3/31/2002 11,724 11,124 4/30/2002 10,276 10,449 5/31/2002 10,020 10,372 6/30/2002 8,432 9,633 7/31/2002 7,084 8,883 8/31/2002 7,092 8,941 9/30/2002 5,577 7,969 10/31/2002 6,544 8,671 11/30/2002 7,317 9,181 12/31/2002 6,451 8,642 1/31/2003 6,042 8,415 2/28/2003 5,822 8,289 3/31/2003 5,866 8,369 4/30/2003 6,812 9,059 5/31/2003 7,558 9,536 6/30/2003 7,698 9,658 7/31/2003 7,923 9,828 8/31/2003 8,236 10,020 9/30/2003 8,007 9,913 10/31/2003 8,921 10,474 11/30/2003 9,142 10,566 12/31/2003 9,996 11,120 1/31/2004 10,357 11,325 2/29/2004 10,616 11,482 3/31/2004 10,241 11,309 4/30/2004 9,885 11,131 5/31/2004 10,126 11,284 6/30/2004 10,464 11,503 7/31/2004 9,741 11,123 8/31/2004 9,783 11,168 9/30/2004 9,936 11,289 10/31/2004 10,188 11,461 11/30/2004 10,984 11,925 12/31/2004 11,685 12,331 AVERAGE ANNUAL TOTAL RETURNS FOR THE PERIOD ENDED 12/31/04 - -------------------------------------------------------------------------------- SINCE ONE INCEPTION YEAR (10/01/01) - -------------------------------------------------------------------------------- TITAN 500 FUND 16.90% 4.91% S&P 500 INDEX 10.89% 6.66% - -------------------------------------------------------------------------------- THE RETURNS PRESENTED ABOVE DO NOT REFLECT THE EFFECTS OF TAXES. PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS. THE S&P 500 INDEX IS AN UNMANAGED STOCK INDEX AND, UNLIKE THE FUND, HAS NO MANAGEMENT FEES OR OTHER OPERATING EXPENSES TO REDUCE ITS REPORTED RETURNS. RETURNS ARE HISTORICAL AND INCLUDE CHANGES IN PRINCIPAL AND REINVESTED DIVIDENDS AND CAPITAL GAINS. HOLDINGS DIVERSIFICATION (MARKET EXPOSURE AS % OF NET ASSETS) [THE FOLLOWING TABLE WAS REPRESENTED AS A BAR GRAPH IN THE PRINTED MATERIAL.] TITAN 500 FUND S&P 500 Indexr -------------- -------------- OTHER 6.2% 9.6% FINANCIALS 13.7% 20.8% INFORMATION TECHNOLOGY 10.7% 15.9% HEALTH CARE 8.4% 12.4% CONSUMER DISCRETIONARY 7.9% 11.9% INDUSTRIALS 7.8% 11.8% CONSUMER STAPLES 7.0% 10.6% ENERGY 4.8% 7.0% FUTURES CONTRACTS 133.7% "Holdings Diversification (Market Exposure as % of Net Assets)" excludes any temporary cash investments. TEN LARGEST HOLDINGS (% OF TOTAL NET ASSETS) - ------------------------------------------------------ General Electric Co. 2.3% Exxon Mobil Corp. 1.9% Microsoft Corp. 1.7% Citigroup, Inc. 1.5% Wal-Mart Stores, Inc. 1.3% Pfizer, Inc. 1.2% Bank of America Corp. 1.1% Johnson & Johnson 1.1% American International Group, Inc. 1.0% International Business Machines Corp. 1.0% - ------------------------------------------------------ Top Ten Total 14.1% - ------------------------------------------------------ "Ten Largest Holdings" excludes any temporary cash investments and equity index products. See Notes to Financial Statements. THE RYDEX VARIABLE TRUST ANNUAL REPORT | 11 PERFORMANCE REPORTS AND FUND PROFILES (CONTINUED) - -------------------------------------------------------------------------------- VELOCITY 100 FUND OBJECTIVE: To provide investment results that will match the performance of a specific benchmark on a daily basis. The Fund's current benchmark is 200% of the performance of the Nasdaq 100 Index(R). Inception: October 1, 2001 The Nasdaq 100 Index struggled during the first eight months of the year, but rebounded during the remainder of the year to post a positive annual return. Technology and health care, two dominant sectors in the index, lagged other groups during the year. Stocks in the consumer discretionary sector were among the stronger performers in the index. The Fund rallied with the Nasdaq 100 Index at year-end to post a gain of 14.21% for the year. For the year ended December 31, 2004, the Fund achieved a daily correlation of more than .99 to its benchmark of 200% of the daily price performance of the Nasdaq 100 Index. The effects of compounding may cause the longer-term correlation of the Fund to its benchmark to diminish.(1) (1) 1.00 EQUALS PERFECT CORRELATION. THIS CALCULATION IS BASED ON THE DAILY PRICE RETURN OF AN INDEX. CUMULATIVE FUND PERFORMANCE: OCTOBER 1, 2001 - DECEMBER 31, 2004 [THE FOLLOWING TABLE WAS REPRESENTED AS A LINE GRAPH IN THE PRINTED MATERIAL.] DATE VELOCITY 100 FUND NASDAQ 100 INDEX - ---- ----------------- ---------------- 10/1/2001 10,000 10,000 10/31/2001 12,912 11,854 11/30/2001 17,148 13,863 12/31/2001 15,588 13,698 1/31/2002 14,860 13,465 2/28/2002 11,212 11,806 3/31/2002 12,532 12,619 4/30/2002 9,540 11,093 5/31/2002 8,340 10,496 6/30/2002 6,208 9,133 7/31/2002 5,040 8,357 8/31/2002 4,708 8,186 9/30/2002 3,584 7,231 10/31/2002 4,984 8,595 11/30/2002 6,208 9,694 12/31/2002 4,760 8,550 1/31/2003 4,676 8,539 2/28/2003 4,896 8,771 3/31/2003 4,940 8,848 4/30/2003 5,764 9,607 5/31/2003 6,680 10,405 6/30/2003 6,676 10,438 7/31/2003 7,432 11,092 8/31/2003 8,140 11,650 9/30/2003 7,612 11,324 10/31/2003 8,920 12,303 11/30/2003 8,976 12,371 12/31/2003 9,455 12,750 1/31/2004 9,738 12,969 2/29/2004 9,420 12,772 3/31/2004 8,946 12,494 4/30/2004 8,459 12,172 5/31/2004 9,233 12,736 6/30/2004 9,803 13,174 7/31/2004 8,280 12,164 8/31/2004 7,862 11,888 9/30/2004 8,329 12,271 10/31/2004 9,166 12,914 11/30/2004 10,200 13,650 12/31/2004 10,798 14,081 AVERAGE ANNUAL TOTAL RETURNS FOR THE PERIOD ENDED 12/31/04 - -------------------------------------------------------------------------------- SINCE ONE INCEPTION YEAR (10/01/01) - -------------------------------------------------------------------------------- VELOCITY 100 FUND 14.21% 2.39% NASDAQ 100 INDEX 10.43% 11.11% - -------------------------------------------------------------------------------- THE RETURNS PRESENTED ABOVE DO NOT REFLECT THE EFFECTS OF TAXES. PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS. THE NASDAQ 100 INDEX IS AN UNMANAGED STOCK INDEX AND, UNLIKE THE FUND, HAS NO MANAGEMENT FEES OR OTHER OPERATING EXPENSES TO REDUCE ITS REPORTED RETURNS. RETURNS ARE HISTORICAL AND INCLUDE CHANGES IN PRINCIPAL AND REINVESTED DIVIDENDS AND CAPITAL GAINS. [THE FOLLOWING TABLE WAS REPRESENTED AS A BAR GRAPH IN THE PRINTED MATERIAL.] HOLDINGS DIVERSIFICATION (MARKET EXPOSURE AS % OF NET ASSETS) VELOCITY 100 FUND NASDAQ 100 INDEX ----------------- ---------------- EQUITY INDEX SWAP AGREEMENTS 93.2% FUTURES CONTRACTS 32.3% HEALTH CARE 9.1% 12.9% CONSUMER DISCRETIONARY 14.8% 16.8% INFORMATION TECHNOLOGY 42.7% 58.4% OTHER 7.8% 5.7% INDUSTRIALS 6.2% "HOLDINGS DIVERSIFICATION (MARKET EXPOSURE AS % OF NET ASSETS)" EXCLUDES ANY TEMPORARY CASH INVESTMENTS. TEN LARGEST HOLDINGS (% OF TOTAL NET ASSETS) - ------------------------------------------------------ Microsoft Corp. 5.5% Qualcomm, Inc. 4.6% eBay, Inc. 3.2% Intel Corp. 2.9% Cisco Systems, Inc. 2.5% Nextel Communications, Inc. - Class A 2.3% Dell, Inc. 2.1% Amgen, Inc. 2.1% Apple Computer, Inc. 2.0% Starbucks Corp. 1.9% - ------------------------------------------------------ Top Ten Total 29.1% - ------------------------------------------------------ "Ten Largest Holdings" excludes any temporary cash investments and equity index products. See Notes to Financial Statements. 12 | THE RYDEX VARIABLE TRUST ANNUAL REPORT PERFORMANCE REPORTS AND FUND PROFILES (CONTINUED) - -------------------------------------------------------------------------------- MEDIUS FUND OBJECTIVE: To provide investment results that correlate to the performance of a specific benchmark for mid-cap securities. The Fund's current benchmark is the S&P MidCap 400(R) Index. Inception: October 1, 2001 In the four previous years, mid-cap stocks outperformed large-cap stocks, and 2004 provided more of the same. The S&P MidCap 400 Index gained 16.48% in 2004, easily outdistancing larger-cap indices such as the S&P 500 Index. Strong earnings growth and a steadily growing economy contributed to mid-caps' performance. Rydex Medius Fund returned 22.14% for the year. For the year ended December 31, 2004, the Fund achieved a daily correlation of more than .99 to its benchmark of 150% of the daily price performance of the S&P MidCap 400 Index. The effects of compounding may cause the longer-term correlation of the Fund to its benchmark to diminish.(1) (1) 1.00 EQUALS PERFECT CORRELATION. THIS CALCULATION IS BASED ON THE DAILY PRICE RETURN OF AN INDEX. CUMULATIVE FUND PERFORMANCE: OCTOBER 1, 2001 - DECEMBER 31, 2004 [THE FOLLOWING TABLE WAS REPRESENTED AS A LINE GRAPH IN THE PRINTED MATERIAL.] DATE MEDIUS FUND S&P 400 INDEX - ---- ----------- ------------- 10/1/2001 10,000 10,000 10/31/2001 10,848 10,633 11/30/2001 11,920 11,424 12/31/2001 12,667 12,015 1/31/2002 12,569 11,952 2/28/2002 12,618 11,967 3/31/2002 13,876 12,822 4/30/2002 13,860 12,762 5/31/2002 13,519 12,547 6/30/2002 12,017 11,629 7/31/2002 10,374 10,502 8/31/2002 10,297 10,555 9/30/2002 8,973 9,705 10/31/2002 9,512 10,125 11/30/2002 10,315 10,711 12/31/2002 9,571 10,271 1/31/2003 9,157 9,971 2/28/2003 8,806 9,733 3/31/2003 8,823 9,815 4/30/2003 9,749 10,528 5/31/2003 11,074 11,401 6/30/2003 11,241 11,546 7/31/2003 11,769 11,956 8/31/2003 12,539 12,498 9/30/2003 12,297 12,306 10/31/2003 13,659 13,237 11/30/2003 14,316 13,698 12/31/2003 14,589 13,929 1/31/2004 15,049 14,231 2/29/2004 15,551 14,573 3/31/2004 15,651 14,635 4/30/2004 14,831 14,155 5/31/2004 15,197 14,448 6/30/2004 15,704 14,777 7/31/2004 14,530 14,087 8/31/2004 14,418 14,051 9/30/2004 15,063 14,467 10/31/2004 15,466 14,698 11/30/2004 16,865 15,573 12/31/2004 17,820 16,225 AVERAGE ANNUAL TOTAL RETURNS FOR THE PERIOD ENDED 12/31/04 - -------------------------------------------------------------------------------- SINCE ONE INCEPTION YEAR (10/01/01) - -------------------------------------------------------------------------------- MEDIUS FUND 22.14% 19.46% S&P MIDCAP 400 INDEX 16.48% 16.06% - -------------------------------------------------------------------------------- THE RETURNS PRESENTED ABOVE DO NOT REFLECT THE EFFECTS OF TAXES. PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS. THE S&P MIDCAP 400 INDEX IS AN UNMANAGED STOCK INDEX AND, UNLIKE THE FUND, HAS NO MANAGEMENT FEES OR OTHER OPERATING EXPENSES TO REDUCE ITS REPORTED RETURNS. RETURNS ARE HISTORICAL AND INCLUDE CHANGES IN PRINCIPAL AND REINVESTED DIVIDENDS AND CAPITAL GAINS. HOLDINGS DIVERSIFICATION (MARKET EXPOSURE AS % OF NET ASSETS) [THE FOLLOWING TABLE WAS REPRESENTED AS A BAR GRAPH IN THE PRINTED MATERIAL.] MEDIUS FUND S&P MIDCAP 400 INDEX ----------- -------------------- OTHER 8.1% 5.2% CONSUMER DISCRETIONARY 14.6% 19.4% FINANCIALS 14.8% 18.7% INFORMATION TECHNOLOGY 11.5% 14.4% INDUSTRIALS 10.0% 12.8% HEALTH CARE 8.4% 10.6% UTILITIES 5.3% 6.9% ENERGY 5.1% 6.7% MATERIALS 0.0% 5.3% FUTURES CONTRACTS 25.5% 0.0% EQUITY INDEX SWAP AGREEMENTS 43.1% 0.0% "Holdings Diversification (Market Exposure as % of Net Assets)" excludes any temporary cash investments. TEN LARGEST HOLDINGS (% OF TOTAL NET ASSETS) - ------------------------------------------------------ Washington Post - Class B 1.1% Legg Mason, Inc. 1.1% Lyondell Chemical Co. 1.0% Weatherford International Ltd. 1.0% Banknorth Group, Inc. 0.9% Toll Brothers, Inc. 0.9% Murphy Oil Corp. 0.9% Barr Pharmaceuticals, Inc. 0.9% New York Community Bancorp, Inc. 0.9% Tyson Foods, Inc. - Class A 0.9% - ------------------------------------------------------ Top Ten Total 9.6% - ------------------------------------------------------ "Ten Largest Holdings" excludes any temporary cash investments and equity index products. See Notes to Financial Statements. THE RYDEX VARIABLE TRUST ANNUAL REPORT | 13 PERFORMANCE REPORTS AND FUND PROFILES (CONTINUED) - -------------------------------------------------------------------------------- INVERSE MID-CAP FUND OBJECTIVE: To provide investment results that will match the performance of a specific benchmark. The Fund's current benchmark is the inverse of the performance of the S&P MidCap 400 Index. Inception: May 3, 2004 Mid-caps performed well during the period. Rydex Inverse Mid-Cap Fund, which seeks to provide investment results that inversely correspond to that of the S&P MidCap 400 Index, declined--which is what it is designed to do when the value of the underlying index increases. The Fund's benchmark returned 13.58% during the period, while Rydex Inverse Mid-Cap Fund returned -11.94%. For the year ended December 31, 2004, the Fund achieved a daily correlation of more than 0.99 to its benchmark of -100% the daily price performance of the S&P MidCap 400 Index. The effects of compounding may cause the longer-term correlation of the Fund to its benchmark to diminish.(1) (1) 1.00 EQUALS PERFECT CORRELATION. THIS CALCULATION IS BASED ON THE DAILY PRICE RETURN OF AN INDEX. CUMULATIVE FUND PERFORMANCE: MAY 3, 2004 - DECEMBER 31, 2004 [THE FOLLOWING TABLE WAS REPRESENTED AS A LINE GRAPH IN THE PRINTED MATERIAL.] DATE INVERSE MID-CAP FUND S&P MIDCAP 400 INDEX - ---- -------------------- -------------------- 5/3/2004 10,000 10,000 5/4/2004 9,988 10,024 5/5/2004 9,922 10,074 5/6/2004 10,042 9,955 5/7/2004 10,258 9,742 5/8/2004 10,258 9,742 5/9/2004 10,258 9,742 5/10/2004 10,436 9,577 5/11/2004 10,282 9,703 5/12/2004 10,308 9,677 5/13/2004 10,298 9,690 5/14/2004 10,338 9,660 5/15/2004 10,338 9,660 5/16/2004 10,338 9,660 5/17/2004 10,450 9,547 5/18/2004 10,356 9,634 5/19/2004 10,380 9,608 5/20/2004 10,378 9,612 5/21/2004 10,320 9,660 5/22/2004 10,320 9,660 5/23/2004 10,320 9,660 5/24/2004 10,212 9,760 5/25/2004 10,018 9,948 5/26/2004 9,962 10,008 5/27/2004 9,916 10,063 5/28/2004 9,866 10,114 5/29/2004 9,866 10,114 5/30/2004 9,866 10,114 5/31/2004 9,866 10,114 6/1/2004 9,822 10,146 6/2/2004 9,838 10,146 6/3/2004 9,972 10,004 6/4/2004 9,894 10,075 6/5/2004 9,894 10,075 6/6/2004 9,894 10,075 6/7/2004 9,738 10,246 6/8/2004 9,746 10,228 6/9/2004 9,874 10,103 6/10/2004 9,830 10,129 6/11/2004 9,830 10,129 6/12/2004 9,830 10,129 6/13/2004 9,830 10,129 6/14/2004 9,970 9,986 6/15/2004 9,830 10,111 6/16/2004 9,832 10,129 6/17/2004 9,828 10,122 6/18/2004 9,864 10,123 6/19/2004 9,864 10,123 6/20/2004 9,864 10,123 6/21/2004 9,864 10,096 6/22/2004 9,798 10,153 6/23/2004 9,712 10,244 6/24/2004 9,740 10,228 6/25/2004 9,686 10,274 6/26/2004 9,686 10,274 6/27/2004 9,686 10,274 6/28/2004 9,746 10,221 6/29/2004 9,714 10,252 6/30/2004 9,636 10,344 7/1/2004 9,760 10,215 7/2/2004 9,768 10,193 7/3/2004 9,768 10,193 7/4/2004 9,768 10,193 7/5/2004 9,768 10,193 7/6/2004 9,898 10,053 7/7/2004 9,880 10,083 7/8/2004 10,002 9,960 7/9/2004 9,936 10,009 7/10/2004 9,936 10,009 7/11/2004 9,936 10,009 7/12/2004 9,988 9,983 7/13/2004 9,978 9,993 7/14/2004 10,012 9,960 7/15/2004 9,954 10,012 7/16/2004 10,012 9,942 7/17/2004 10,012 9,942 7/18/2004 10,012 9,942 7/19/2004 10,020 9,952 7/20/2004 9,888 10,070 7/21/2004 10,096 9,864 7/22/2004 10,104 9,845 7/23/2004 10,240 9,730 7/24/2004 10,240 9,730 7/25/2004 10,240 9,730 7/26/2004 10,332 9,646 7/27/2004 10,186 9,776 7/28/2004 10,240 9,726 7/29/2004 10,094 9,853 7/30/2004 10,102 9,861 7/31/2004 10,102 9,861 8/1/2004 10,102 9,861 8/2/2004 10,076 9,877 8/3/2004 10,204 9,770 8/4/2004 10,234 9,737 8/5/2004 10,416 9,554 8/6/2004 10,600 9,399 8/7/2004 10,600 9,399 8/8/2004 10,600 9,399 8/9/2004 10,588 9,414 8/10/2004 10,408 9,567 8/11/2004 10,480 9,507 8/12/2004 10,630 9,375 8/13/2004 10,630 9,368 8/14/2004 10,630 9,368 8/15/2004 10,630 9,368 8/16/2004 10,456 9,523 8/17/2004 10,404 9,567 8/18/2004 10,252 9,707 8/19/2004 10,330 9,642 8/20/2004 10,190 9,770 8/21/2004 10,190 9,770 8/22/2004 10,190 9,770 8/23/2004 10,246 9,716 8/24/2004 10,234 9,731 8/25/2004 10,128 9,822 8/26/2004 10,136 9,826 8/27/2004 10,082 9,874 8/28/2004 10,082 9,874 8/29/2004 10,082 9,874 8/30/2004 10,200 9,761 8/31/2004 10,122 9,836 9/1/2004 10,042 9,917 9/2/2004 9,952 10,006 9/3/2004 10,002 9,959 9/4/2004 10,002 9,959 9/5/2004 10,002 9,959 9/6/2004 10,002 9,959 9/7/2004 9,928 10,034 9/8/2004 10,024 9,940 9/9/2004 9,950 10,010 9/10/2004 9,910 10,051 9/11/2004 9,910 10,051 9/12/2004 9,910 10,051 9/13/2004 9,848 10,114 9/14/2004 9,870 10,090 9/15/2004 9,926 10,036 9/16/2004 9,858 10,106 9/17/2004 9,864 10,105 9/18/2004 9,864 10,105 9/19/2004 9,864 10,105 9/20/2004 9,906 10,059 9/21/2004 9,822 10,143 9/22/2004 9,946 10,020 9/23/2004 9,970 9,989 9/24/2004 9,926 10,044 9/25/2004 9,926 10,044 9/26/2004 9,926 10,044 9/27/2004 10,014 9,946 9/28/2004 9,946 10,015 9/29/2004 9,906 10,055 9/30/2004 9,842 10,127 10/1/2004 9,694 10,274 10/2/2004 9,694 10,274 10/3/2004 9,694 10,274 10/4/2004 9,666 10,306 10/5/2004 9,694 10,280 10/6/2004 9,632 10,346 10/7/2004 9,752 10,217 10/8/2004 9,824 10,146 10/9/2004 9,824 10,146 10/10/2004 9,824 10,146 10/11/2004 9,812 10,148 10/12/2004 9,854 10,117 10/13/2004 9,934 10,032 10/14/2004 10,002 9,957 10/15/2004 9,962 9,996 10/16/2004 9,962 9,996 10/17/2004 9,962 9,996 10/18/2004 9,914 10,045 10/19/2004 9,986 9,972 10/20/2004 9,938 10,017 10/21/2004 9,848 10,113 10/22/2004 9,940 10,022 10/23/2004 9,940 10,022 10/24/2004 9,940 10,022 10/25/2004 9,910 10,051 10/26/2004 9,826 10,121 10/27/2004 9,690 10,277 10/28/2004 9,704 10,266 10/29/2004 9,688 10,289 10/30/2004 9,688 10,289 10/31/2004 9,688 10,289 11/1/2004 9,688 10,290 11/2/2004 9,700 10,277 11/3/2004 9,564 10,417 11/4/2004 9,428 10,567 11/5/2004 9,404 10,595 11/6/2004 9,404 10,595 11/7/2004 9,404 10,595 11/8/2004 9,436 10,558 11/9/2004 9,406 10,595 11/10/2004 9,384 10,622 11/11/2004 9,296 10,724 11/12/2004 9,192 10,845 11/13/2004 9,192 10,845 11/14/2004 9,192 10,845 11/15/2004 9,200 10,836 11/16/2004 9,258 10,771 11/17/2004 9,180 10,860 11/18/2004 9,190 10,853 11/19/2004 9,298 10,726 11/20/2004 9,298 10,726 11/21/2004 9,298 10,726 11/22/2004 9,224 10,808 11/23/2004 9,188 10,852 11/24/2004 9,108 10,946 11/25/2004 9,108 10,946 11/26/2004 9,106 10,955 11/27/2004 9,106 10,955 11/28/2004 9,106 10,955 11/29/2004 9,128 10,932 11/30/2004 9,152 10,902 12/1/2004 9,032 11,046 12/2/2004 9,070 11,002 12/3/2004 9,050 11,032 12/4/2004 9,050 11,032 12/5/2004 9,050 11,032 12/6/2004 9,076 11,000 12/7/2004 9,200 10,846 12/8/2004 9,142 10,913 12/9/2004 9,108 10,961 12/10/2004 9,098 10,975 12/11/2004 9,098 10,975 12/12/2004 9,098 10,975 12/13/2004 9,032 11,053 12/14/2004 8,946 11,156 12/15/2004 8,896 11,226 12/16/2004 8,950 11,158 12/17/2004 8,958 11,154 12/18/2004 8,958 11,154 12/19/2004 8,958 11,154 12/20/2004 8,990 11,103 12/21/2004 8,900 11,221 12/22/2004 8,866 11,258 12/23/2004 8,860 11,271 12/24/2004 8,860 11,271 12/25/2004 8,860 11,271 12/26/2004 8,860 11,271 12/27/2004 8,924 11,203 12/28/2004 8,816 11,341 12/29/2004 8,800 11,351 12/30/2004 8,794 11,378 12/31/2004 8,806 11,358 AVERAGE ANNUAL TOTAL RETURNS FOR THE PERIOD ENDED 12/31/04 - -------------------------------------------------------------------------------- SINCE INCEPTION (05/03/04) - -------------------------------------------------------------------------------- INVERSE MID-CAP FUND -11.94% S&P MIDCAP 400 INDEX 13.58% - -------------------------------------------------------------------------------- THE RETURNS PRESENTED ABOVE DO NOT REFLECT THE EFFECTS OF TAXES. PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS. THE S&P MIDCAP 400 INDEX IS AN UNMANAGED STOCK INDEX AND, UNLIKE THE FUND, HAS NO MANAGEMENT FEES OR OTHER OPERATING EXPENSES TO REDUCE ITS REPORTED RETURNS. RETURNS ARE HISTORICAL AND INCLUDE CHANGES IN PRINCIPAL AND REINVESTED DIVIDENDS AND CAPITAL GAINS. HOLDINGS DIVERSIFICATION (MARKET EXPOSURE AS % OF NET ASSETS) [THE FOLLOWING TABLE WAS REPRESENTED AS A BAR GRAPH IN THE PRINTED MATERIAL.] INVERSE MID-CAP FUND S&P MIDCAP 400 INDEX -------------------- -------------------- OTHER 5.2% CONSUMER DISCRETIONARY 19.4% FINANCIALS 18.7% INFORMATION TECHNOLOGY 14.4% INDUSTRIALS 12.8% HEALTH CARE 10.6% UTILITIES 6.9% ENERGY 6.7% MATERIALS 5.3% FUTURES CONTRACTS SHORT SALES -55.4% EQUITY INDEX SWAP AGREEMENTS -46.1% "Holdings Diversification (Market Exposure as % of Net Assets)" excludes any temporary cash investments. The fund invests principally in leveraged derivative instruments, such as equity swap agreements, futures contracts, and options on securities, futures contracts and stock indices. See Notes to Financial Statements. 14 | THE RYDEX VARIABLE TRUST ANNUAL REPORT PERFORMANCE REPORTS AND FUND PROFILES (CONTINUED) - -------------------------------------------------------------------------------- MEKROS FUND OBJECTIVE: To provide investment results that correlate to the performance of a specific benchmark for small-cap securities. The Fund's current benchmark is the Russell 2000 Index(R). Inception: October 1, 2001 Small-cap stocks outperformed both mid-cap and large-cap indices in 2004, riding the performance of the energy and materials sectors. The Russell 2000 Index, which returned 18.33% for the year, outperformed both mid-cap and large-cap indices, besting the S&P 500 Index, in eight of the 12 months. The Index also bested the performance of the S&P 500 Index across all sectors. Top performers in the Fund included Travelzoo (997%), Cheniere Energy (444%), WR Grace (430%) and Jupitermedia (423%). Rydex Mekros Fund returned 25.20% on the year. For the year ended December 31, 2004, the Fund achieved a daily correlation of more than ..99 to its benchmark of 150% of the daily price performance of the Russell 2000 Index. The effects of compounding may cause the longer-term correlation of the Fund to its benchmark to diminish.(1) (1) 1.00 EQUALS PERFECT CORRELATION. THIS CALCULATION IS BASED ON THE DAILY PRICE RETURN OF AN INDEX. CUMULATIVE FUND PERFORMANCE: OCTOBER 1, 2001 - DECEMBER 31, 2004 [THE FOLLOWING TABLE WAS REPRESENTED AS A LINE GRAPH IN THE PRINTED MATERIAL.] DATE MEKROS FUND RUSSELL 2000 INDEX - ---- ----------- ------------------ 10/1/2001 10,000 10,000 10/31/2001 11,036 10,779 11/30/2001 12,112 11,613 12/31/2001 12,897 12,330 1/31/2002 12,711 12,202 2/28/2002 12,214 11,868 3/31/2002 13,709 12,821 4/30/2002 14,214 12,938 5/31/2002 13,067 12,364 6/30/2002 12,068 11,750 7/31/2002 9,482 9,976 8/31/2002 9,433 9,950 9/30/2002 8,387 9,236 10/31/2002 8,284 9,532 11/30/2002 9,079 10,382 12/31/2002 8,325 9,804 1/31/2003 7,862 9,533 2/28/2003 7,419 9,245 3/31/2003 7,464 9,364 4/30/2003 8,565 10,252 5/31/2003 9,977 11,352 6/30/2003 10,072 11,567 7/31/2003 10,950 12,280 8/31/2003 11,650 12,843 9/30/2003 11,240 12,606 10/31/2003 12,681 13,665 11/30/2003 13,281 14,150 12/31/2003 13,677 14,437 1/31/2004 14,582 15,064 2/29/2004 14,784 15,199 3/31/2004 14,922 15,341 4/30/2004 13,658 14,559 5/31/2004 13,948 14,791 6/30/2004 14,909 15,413 7/31/2004 13,401 14,376 8/31/2004 13,263 14,302 9/30/2004 14,172 14,973 10/31/2004 14,523 15,268 11/30/2004 16,395 16,592 12/31/2004 17,123 17,083 AVERAGE ANNUAL TOTAL RETURNS FOR THE PERIOD ENDED 12/31/04 - -------------------------------------------------------------------------------- SINCE ONE INCEPTION YEAR (10/01/01) - -------------------------------------------------------------------------------- MEKROS FUND 25.20% 18.00% RUSSELL 2000 INDEX 18.33% 17.92% - -------------------------------------------------------------------------------- THE RETURNS PRESENTED ABOVE DO NOT REFLECT THE EFFECTS OF TAXES. PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS. THE RUSSELL 2000 INDEX IS AN UNMANAGED STOCK INDEX AND, UNLIKE THE FUND, HAS NO MANAGEMENT FEES OR OTHER OPERATING EXPENSES TO REDUCE ITS REPORTED RETURNS. RETURNS ARE HISTORICAL AND INCLUDE CHANGES IN PRINCIPAL AND REINVESTED DIVIDENDS AND CAPITAL GAINS. HOLDINGS DIVERSIFICATION (MARKET EXPOSURE AS % OF NET ASSETS) [THE FOLLOWING TABLE WAS REPRESENTED AS A BAR GRAPH IN THE PRINTED MATERIAL.] MEKROS FUND RUSSELL 2000 INDEX ----------- ------------------ OTHER 10.4% 6.2% FINANCIALS 12.8% INFORMATION TECHNOLOGY 10.7% 24.2% CONSUMER DISCRETIONARY 8.7% 10.4% INDUSTRIALS 8.3% 15.8% HEALTH CARE 7.4% 17.6% CONSUMER STAPLES 18.5% ENERGY 7.3% FUTURES CONTRACTS 46.5% EQUITY INDEX SWAP AGREEMENTS 45.5% "Holdings Diversification (Market Exposure as % of Net Assets)" excludes any temporary cash investments. TEN LARGEST HOLDINGS (% OF TOTAL NET ASSETS) - ------------------------------------------------------ Taser International, Inc. 0.3% Goodyear Tire & Rubber Co. 0.3% F5 Networks, Inc. 0.3% First Bancorp/Puerto Rico 0.3% Intuitive Surgical, Inc. 0.3% Allegheny Technologies, Inc. 0.3% East-West Bancorp, Inc. 0.3% Brocade Communications Systems, Inc. 0.3% CACI International, Inc. - Class A 0.3% Micros Systems, Inc. 0.3% - ------------------------------------------------------ Top Ten Total 3.0% - ------------------------------------------------------ "Ten Largest Holdings" excludes any temporary cash investments and equity index products. See Notes to Financial Statements. THE RYDEX VARIABLE TRUST ANNUAL REPORT | 15 PERFORMANCE REPORTS AND FUND PROFILES (CONTINUED) - -------------------------------------------------------------------------------- INVERSE SMALL-CAP FUND OBJECTIVE: To provide investment results that will match the performance of a specific benchmark. The Fund's current benchmark is inverse of the performance of the Russell 2000 Index(R). Inception: May 3, 2004 Small-caps were a bright spot during the reporting period. Because Rydex Inverse Small-Cap Fund seeks to provide investment results that inversely correspond to the small-cap Russell 2000 Index, the Fund had a negative return. The Fund performed the way it was designed to perform, returning -14.34% versus the Russell 2000 Index, which returned 16.15%. For the year ended December 31, 2004, the Fund achieved a daily correlation of more than .99 to its benchmark of -100% the daily price performance of the Russell 2000 Index. The effects of compounding may cause the longer-term correlation of the Fund to its benchmark to diminish.(1) (1) 1.00 EQUALS PERFECT CORRELATION. THIS CALCULATION IS BASED ON THE DAILY PRICE RETURN OF AN INDEX. CUMULATIVE FUND PERFORMANCE: MAY 3, 2004 - DECEMBER 31, 2004 [THE FOLLOWING TABLE WAS REPRESENTED AS A LINE GRAPH IN THE PRINTED MATERIAL.] DATE INVERSE SMALL-CAP FUND RUSSELL 2000 INDEX - ---- ---------------------- ------------------ 5/3/2004 10,000 10,000 5/4/2004 9,936 10,073 5/5/2004 9,928 10,081 5/6/2004 10,072 9,959 5/7/2004 10,368 9,702 5/8/2004 10,368 9,702 5/9/2004 10,368 9,702 5/10/2004 10,572 9,514 5/11/2004 10,344 9,704 5/12/2004 10,338 9,711 5/13/2004 10,404 9,680 5/14/2004 10,480 9,619 5/15/2004 10,480 9,619 5/16/2004 10,480 9,619 5/17/2004 10,616 9,470 5/18/2004 10,468 9,598 5/19/2004 10,524 9,569 5/20/2004 10,514 9,567 5/21/2004 10,406 9,656 5/22/2004 10,406 9,656 5/23/2004 10,406 9,656 5/24/2004 10,278 9,761 5/25/2004 10,040 10,003 5/26/2004 9,982 10,046 5/27/2004 9,980 10,061 5/28/2004 9,972 10,056 5/29/2004 9,972 10,056 5/30/2004 9,972 10,056 5/31/2004 9,972 10,056 6/1/2004 9,876 10,131 6/2/2004 9,888 10,150 6/3/2004 10,070 9,954 6/4/2004 9,974 10,048 6/5/2004 9,974 10,048 6/6/2004 9,974 10,048 6/7/2004 9,778 10,245 6/8/2004 9,784 10,228 6/9/2004 9,950 10,064 6/10/2004 9,928 10,074 6/11/2004 9,928 10,074 6/12/2004 9,928 10,074 6/13/2004 9,928 10,074 6/14/2004 10,128 9,873 6/15/2004 9,920 10,055 6/16/2004 9,898 10,093 6/17/2004 9,900 10,085 6/18/2004 9,890 10,102 6/19/2004 9,890 10,102 6/20/2004 9,890 10,102 6/21/2004 9,914 10,070 6/22/2004 9,848 10,126 6/23/2004 9,702 10,273 6/24/2004 9,738 10,254 6/25/2004 9,574 10,407 6/26/2004 9,574 10,407 6/27/2004 9,574 10,407 6/28/2004 9,634 10,347 6/29/2004 9,570 10,414 6/30/2004 9,528 10,479 7/1/2004 9,666 10,319 7/2/2004 9,674 10,325 7/3/2004 9,674 10,325 7/4/2004 9,674 10,325 7/5/2004 9,674 10,325 7/6/2004 9,830 10,142 7/7/2004 9,842 10,136 7/8/2004 10,046 9,936 7/9/2004 9,984 9,990 7/10/2004 9,984 9,990 7/11/2004 9,984 9,990 7/12/2004 10,022 9,963 7/13/2004 10,010 9,972 7/14/2004 10,064 9,920 7/15/2004 10,028 9,963 7/16/2004 10,154 9,845 7/17/2004 10,154 9,845 7/18/2004 10,154 9,845 7/19/2004 10,142 9,832 7/20/2004 9,974 9,999 7/21/2004 10,264 9,723 7/22/2004 10,296 9,687 7/23/2004 10,444 9,557 7/24/2004 10,444 9,557 7/25/2004 10,444 9,557 7/26/2004 10,554 9,456 7/27/2004 10,326 9,653 7/28/2004 10,386 9,594 7/29/2004 10,220 9,748 7/30/2004 10,210 9,774 7/31/2004 10,210 9,774 8/1/2004 10,210 9,774 8/2/2004 10,190 9,786 8/3/2004 10,348 9,639 8/4/2004 10,364 9,622 8/5/2004 10,570 9,440 8/6/2004 10,818 9,215 8/7/2004 10,818 9,215 8/8/2004 10,818 9,215 8/9/2004 10,848 9,193 8/10/2004 10,600 9,397 8/11/2004 10,670 9,341 8/12/2004 10,856 9,172 8/13/2004 10,848 9,178 8/14/2004 10,848 9,178 8/15/2004 10,848 9,178 8/16/2004 10,630 9,367 8/17/2004 10,590 9,402 8/18/2004 10,356 9,608 8/19/2004 10,438 9,535 8/20/2004 10,244 9,721 8/21/2004 10,244 9,721 8/22/2004 10,244 9,721 8/23/2004 10,316 9,642 8/24/2004 10,292 9,670 8/25/2004 10,196 9,761 8/26/2004 10,252 9,710 8/27/2004 10,166 9,789 8/28/2004 10,166 9,789 8/29/2004 10,166 9,789 8/30/2004 10,296 9,664 8/31/2004 10,230 9,724 9/1/2004 10,148 9,805 9/2/2004 10,012 9,935 9/3/2004 10,080 9,872 9/4/2004 10,080 9,872 9/5/2004 10,080 9,872 9/6/2004 10,080 9,872 9/7/2004 9,954 9,991 9/8/2004 10,044 9,901 9/9/2004 9,890 10,050 9/10/2004 9,826 10,116 9/11/2004 9,826 10,116 9/12/2004 9,826 10,116 9/13/2004 9,770 10,174 9/14/2004 9,806 10,137 9/15/2004 9,852 10,094 9/16/2004 9,748 10,201 9/17/2004 9,772 10,177 9/18/2004 9,772 10,177 9/19/2004 9,772 10,177 9/20/2004 9,808 10,134 9/21/2004 9,704 10,244 9/22/2004 9,888 10,049 9/23/2004 9,888 10,048 9/24/2004 9,886 10,051 9/25/2004 9,886 10,051 9/26/2004 9,886 10,051 9/27/2004 10,018 9,915 9/28/2004 9,884 10,050 9/29/2004 9,790 10,147 9/30/2004 9,760 10,180 10/1/2004 9,554 10,395 10/2/2004 9,554 10,395 10/3/2004 9,554 10,395 10/4/2004 9,486 10,468 10/5/2004 9,514 10,437 10/6/2004 9,424 10,533 10/7/2004 9,590 10,355 10/8/2004 9,706 10,232 10/9/2004 9,706 10,232 10/10/2004 9,706 10,232 10/11/2004 9,672 10,266 10/12/2004 9,688 10,251 10/13/2004 9,812 10,122 10/14/2004 9,892 10,041 10/15/2004 9,808 10,122 10/16/2004 9,808 10,122 10/17/2004 9,808 10,122 10/18/2004 9,762 10,168 10/19/2004 9,864 10,073 10/20/2004 9,806 10,135 10/21/2004 9,692 10,251 10/22/2004 9,846 10,093 10/23/2004 9,846 10,093 10/24/2004 9,846 10,093 10/25/2004 9,776 10,162 10/26/2004 9,686 10,268 10/27/2004 9,520 10,440 10/28/2004 9,546 10,413 10/29/2004 9,576 10,381 10/30/2004 9,576 10,381 10/31/2004 9,576 10,381 11/1/2004 9,524 10,438 11/2/2004 9,554 10,410 11/3/2004 9,390 10,587 11/4/2004 9,280 10,709 11/5/2004 9,242 10,747 11/6/2004 9,242 10,747 11/7/2004 9,242 10,747 11/8/2004 9,284 10,709 11/9/2004 9,212 10,791 11/10/2004 9,164 10,846 11/11/2004 9,064 10,965 11/12/2004 8,984 11,066 11/13/2004 8,984 11,066 11/14/2004 8,984 11,066 11/15/2004 8,958 11,100 11/16/2004 9,038 10,994 11/17/2004 8,964 11,084 11/18/2004 8,980 11,068 11/19/2004 9,102 10,915 11/20/2004 9,102 10,915 11/21/2004 9,102 10,915 11/22/2004 8,980 11,059 11/23/2004 8,942 11,113 11/24/2004 8,862 11,202 11/25/2004 8,862 11,202 11/26/2004 8,846 11,233 11/27/2004 8,846 11,233 11/28/2004 8,846 11,233 11/29/2004 8,802 11,293 11/30/2004 8,810 11,281 12/1/2004 8,666 11,458 12/2/2004 8,690 11,437 12/3/2004 8,694 11,432 12/4/2004 8,694 11,432 12/5/2004 8,694 11,432 12/6/2004 8,738 11,376 12/7/2004 8,922 11,135 12/8/2004 8,838 11,236 12/9/2004 8,868 11,202 12/10/2004 8,826 11,256 12/11/2004 8,826 11,256 12/12/2004 8,826 11,256 12/13/2004 8,744 11,361 12/14/2004 8,670 11,460 12/15/2004 8,604 11,551 12/16/2004 8,688 11,438 12/17/2004 8,700 11,435 12/18/2004 8,700 11,435 12/19/2004 8,700 11,435 12/20/2004 8,748 11,364 12/21/2004 8,634 11,511 12/22/2004 8,606 11,552 12/23/2004 8,596 11,568 12/24/2004 8,596 11,568 12/25/2004 8,596 11,568 12/26/2004 8,596 11,568 12/27/2004 8,666 11,478 12/28/2004 8,528 11,661 12/29/2004 8,540 11,645 12/30/2004 8,544 11,641 12/31/2004 8,564 11,615 AVERAGE ANNUAL TOTAL RETURNS FOR THE PERIOD ENDED 12/31/04 - -------------------------------------------------------------------------------- SINCE INCEPTION (05/03/04) - -------------------------------------------------------------------------------- INVERSE SMALL-CAP FUND -14.34% RUSSELL 2000 INDEX 16.15% - -------------------------------------------------------------------------------- THE RETURNS PRESENTED ABOVE DO NOT REFLECT THE EFFECTS OF TAXES. PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS. THE RUSSELL 2000 INDEX IS AN UNMANAGED STOCK INDEX AND, UNLIKE THE FUND, HAS NO MANAGEMENT FEES OR OTHER OPERATING EXPENSES TO REDUCE ITS REPORTED RETURNS. RETURNS ARE HISTORICAL AND INCLUDE CHANGES IN PRINCIPAL AND REINVESTED DIVIDENDS AND CAPITAL GAINS. HOLDINGS DIVERSIFICATION (MARKET EXPOSURE AS % OF NET ASSETS) [THE FOLLOWING TABLE WAS REPRESENTED AS A BAR GRAPH IN THE PRINTED MATERIAL.] INVERSE SMALL-CAP FUND RUSSELL 2000 INDEX ---------------------- ------------------ OTHER 6.2% INFORMATION TECHNOLOGY 24.2% CONSUMER STAPLES 18.5% HEALTH CARE 17.6% INDUSTRIALS 15.8% CONSUMER DISCRETIONARY 10.4% ENERGY 7.3% FUTURES CONTRACTS SHORT SALES -15.0% EQUITY INDEX SWAP AGREEMENTS -84.3% "Holdings Diversification (Market Exposure as % of Net Assets)" excludes any temporary cash investments. The fund invests principally in leveraged derivative instruments, such as equity swap agreements, futures contracts, and options on securities, futures contracts and stock indices. See Notes to Financial Statements. 16 | THE RYDEX VARIABLE TRUST ANNUAL REPORT PERFORMANCE REPORTS AND FUND PROFILES (CONTINUED) - -------------------------------------------------------------------------------- U.S. GOVERNMENT BOND FUND OBJECTIVE: To provide investment results that correspond to a benchmark for U.S. Government securities. The Fund's current benchmark is 120% of the price movement of the Lehman Long Treasury Bond Index. Inception: August 18, 1997 The year began with the specter of rising interest rates, an event that didn't take place until late June, when the Federal Reserve initiated the first of its five Fed fund rate hikes of 25 basis points, bringing the rate up to 2.25%. The Long Bond began the year with a 5.19% yield and ended the year at 4.82%, bouncing around for much of the year. Rydex U.S. Government Bond Fund, which invests in the current 30-year Treasury Bond and Treasury Bond futures, returned 8.42%. For the year ended December 31, 2004, the Fund achieved a daily correlation of more than .99 to its benchmark of 120% of the daily price performance of the current U.S. Treasury Long Bond. The effects of compounding may cause the longer-term correlation of the Fund to its benchmark to diminish.(1) (1) 1.00 EQUALS PERFECT CORRELATION. THIS CALCULATION IS BASED ON THE DAILY PRICE RETURN OF AN INDEX. CUMULATIVE FUND PERFORMANCE: AUGUST 18, 1997 - DECEMBER 31, 2004 [THE FOLLOWING TABLE WAS REPRESENTED AS A LINE GRAPH IN THE PRINTED MATERIAL.] U.S. GOVERNMENT LEHMAN LONG U.S. TREASURY DATE BOND FUND TREASURY BOND INDEX LONG BOND INDEX - ---- --------- ------------------- --------------- 8/18/1997 10,000 10,000 10,000 9/30/1997 10,177 10,202 10,147 12/31/1997 10,985 10,865 10,749 3/31/1998 11,022 11,029 10,733 6/30/1998 11,626 11,544 11,211 9/30/1998 12,797 12,454 12,238 12/31/1998 12,397 12,334 11,946 3/31/1999 11,211 11,806 10,886 6/30/1999 10,632 11,513 10,335 9/30/1999 10,407 11,498 10,100 12/31/1999 9,859 11,256 9,539 3/31/2000 10,833 12,163 10,228 6/30/2000 10,812 12,283 10,139 9/30/2000 10,955 12,624 10,165 12/31/2000 11,850 13,537 10,788 3/31/2001 11,803 13,723 10,652 6/30/2001 11,370 13,482 10,189 9/30/2001 12,093 14,389 10,705 12/31/2001 11,860 14,107 10,613 3/31/2002 11,307 13,872 10,112 6/30/2002 12,131 14,703 10,559 9/30/2002 14,257 16,477 11,959 12/31/2002 14,068 16,476 11,741 3/31/2003 14,144 16,704 11,678 6/30/2003 15,066 17,551 12,152 9/30/2003 14,359 17,081 11,586 12/31/2003 13,978 16,885 11,232 3/31/2004 14,900 17,782 11,735 6/30/2004 13,671 16,855 10,889 9/30/2004 14,836 17,927 11,535 12/31/2004 15,155 18,186 11,652 AVERAGE ANNUAL TOTAL RETURNS FOR THE PERIOD ENDED 12/31/04 - -------------------------------------------------------------------------------- SINCE ONE FIVE INCEPTION YEAR YEAR (08/18/97) - -------------------------------------------------------------------------------- U.S. GOVERNMENT BOND FUND 8.42% 8.98% 5.80% PRICE MOVEMENT OF LONG TREASURY BOND 3.74% 4.08% 2.10% LEHMAN LONG TREASURY BOND INDEX 7.70% 10.07% 8.45% - -------------------------------------------------------------------------------- THE RETURNS PRESENTED ABOVE DO NOT REFLECT THE EFFECTS OF TAXES. PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS. THE LEHMAN LONG TREASURY BOND INDEX IS AN UNMANAGED BOND INDEX AND, UNLIKE THE FUND, HAS NO MANAGEMENT FEES OR OTHER OPERATING EXPENSES TO REDUCE ITS REPORTED RETURN. THE PRICE MOVEMENT OF THE LONG TREASURY BOND REPRESENTS A CUMULATIVE PERCENTAGE CHANGE IN ITS CLOSING PRICE. RETURNS ARE HISTORICAL AND INCLUDE CHANGES IN PRINCIPAL AND REINVESTED DIVIDENDS AND CAPITAL GAINS. HOLDINGS DIVERSIFICATION (MARKET EXPOSURE AS % OF NET ASSETS) [THE FOLLOWING TABLE WAS REPRESENTED AS A BAR GRAPH IN THE PRINTED MATERIAL.] U.S. GOVERNMENT BOND FUND - -------------------------------------------------------------------------------- U.S. TREASURY OBLIGATIONS 33.5% FUTURES CONTRACTS 84.6% "Holdings Diversification (Market Exposure as % of Net Assets)" excludes any temporary cash investments. The fund invests principally in leveraged derivative instruments, such as equity swap agreements, futures contracts, and options on securities, futures contracts and stock indices. See Notes to Financial Statements. THE RYDEX VARIABLE TRUST ANNUAL REPORT | 17 PERFORMANCE REPORTS AND FUND PROFILES (CONTINUED) - -------------------------------------------------------------------------------- JUNO FUND OBJECTIVE: To provide total returns that will inversely correlate to the price movements of a benchmark for U.S.Treasury debt instruments or futures contract on a specified debt instrument. The Fund's current benchmark is the inverse of the daily price movement of the Lehman Long Treasury Bond Index. Inception: May 1, 2003 The Federal Reserve maintained its accommodative monetary policy during the first half of 2004, but the Long Bond yield moved higher during those months, anticipating the Fed funds rate increases that would follow. From a historic low of 1.0%, the Fed increased rates five times in the second half of 2004, bringing the rate to 2.25% at year-end. However, the Long Bond yield ended the year at 4.82%, below its yield of 5.19% on January 1, in reaction to a slowing economy and low inflation. Mid-year, the Bond price began to rise and the yield trended lower. Rydex Juno Fund establishes short positions in both U.S. Treasury bonds, bond futures contracts, and purchases call options on U.S. Treasury bond futures contracts traded on the Chicago Board of Trade. The Fund ended the year at - -10.67%, due in large part to its usual negative cost of carry and unusually low money market rates. For the year ended December 31, 2004, the fund achieved a daily correlation of more than .97 to its benchmark of -100% of the daily price performance of the current U.S. Treasury Long Bond. The effects of compounding may cause the longer-term correlation of the fund to its benchmark to diminish.(1) (1) 1.00 EQUALS PERFECT CORRELATION. THIS CALCULATION IS BASED ON THE DAILY PRICE RETURN OF AN INDEX. CUMULATIVE FUND PERFORMANCE: MAY 1, 2003 - DECEMBER 31, 2004 [THE FOLLOWING TABLE WAS REPRESENTED AS A LINE GRAPH IN THE PRINTED MATERIAL.] LEHMAN LONG TREASURY U.S. TREASURY DATE JUNO FUND BOND INDEX LONG BOND INDEX - ---- --------- ---------- --------------- 5/1/2003 10,000 10,000 10,000 5/31/2003 9,296 10,562 10,635 6/30/2003 9,448 10,401 10,337 7/31/2003 10,728 9,471 9,145 8/31/2003 10,540 9,622 9,372 9/30/2003 9,816 10,122 9,856 10/31/2003 10,184 9,841 9,492 11/30/2003 10,100 9,888 9,489 12/31/2003 9,928 10,006 9,555 1/31/2004 9,676 10,178 9,721 2/29/2004 9,384 10,380 9,894 3/31/2004 9,184 10,538 9,983 4/30/2004 9,828 9,947 9,276 5/31/2004 9,864 9,898 9,201 6/30/2004 9,732 9,989 9,263 7/31/2004 9,540 10,158 9,397 8/31/2004 9,120 10,534 9,765 9/30/2004 9,043 10,624 9,813 10/31/2004 8,877 10,780 9,957 11/30/2004 9,144 10,540 9,647 12/31/2004 8,869 10,777 9,912 AVERAGE ANNUAL TOTAL RETURNS FOR THE PERIOD ENDED 12/31/04 - -------------------------------------------------------------------------------- SINCE ONE INCEPTION YEAR (05/01/03) - -------------------------------------------------------------------------------- JUNO FUND -10.67% -6.94% PRICE MOVEMENT OF LONG TREASURY BOND 3.74% -0.53% LEHMAN LONG TREASURY BOND INDEX 7.70% 4.59% - -------------------------------------------------------------------------------- THE RETURNS PRESENTED ABOVE DO NOT REFLECT THE EFFECTS OF TAXES. PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS. THE LEHMAN LONG TREASURY BOND INDEX IS AN UNMANAGED BOND INDEX AND, UNLIKE THE FUND, HAS NO MANAGEMENT FEES OR OTHER OPERATING EXPENSES TO REDUCE ITS REPORTED RETURN. THE PRICE MOVEMENT OF THE LONG TREASURY BOND REPRESENTS A CUMULATIVE PERCENTAGE CHANGE IN ITS CLOSING PRICE. RETURNS ARE HISTORICAL AND INCLUDE CHANGES IN PRINCIPAL AND REINVESTED DIVIDENDS AND CAPITAL GAINS. HOLDINGS DIVERSIFICATION (MARKET EXPOSURE AS % OF NET ASSETS) [THE FOLLOWING TABLE WAS REPRESENTED AS A BAR GRAPH IN THE PRINTED MATERIAL.] JUNO FUND ---------- U.S. TREASURY OBLIGATIONS SHORT SALES -70.0% FUTURES CONTRACTS SHORT SALES -30.0% "Holdings Diversification (Market Exposure as % of Net Assets)" excludes any temporary cash investments. The fund invests principally in short sales of long-term Treasury Bonds and derivative instruments, such as futures and option contracts. See Notes to Financial Statements. 18 | THE RYDEX VARIABLE TRUST ANNUAL REPORT PERFORMANCE REPORTS AND FUND PROFILES (CONTINUED) - -------------------------------------------------------------------------------- LARGE-CAP EUROPE FUND OBJECTIVE: To provide investment results that correlate to the performance of a specific benchmark. The Fund's current benchmark is the Dow Jones STOXX 50 Index(sm). Inception: October 1, 2001 For the second consecutive year, European markets bested both U.S. and Japanese markets. Although the Dow Jones STOXX 50 Index returned 4.30%, short of the S&P 500 Index's gain of 10.89%, the euro's appreciation versus the dollar helped Rydex Large-Cap Europe Fund to a gain of 16.15% for the year. Utilities and energy were the best-performing sectors in the STOXX 50 Index, while semiconductors underperformed. For the year ended December 31, 2004, the Fund achieved a daily correlation of more than 0.98 to its benchmark of 125% the daily price performance of the Dow Jones STOXX 50 Index. The effects of compounding may cause the longer-term correlation of the Fund to its benchmark to diminish.(1) (1) 1.00 EQUALS PERFECT CORRELATION. THIS CALCULATION IS BASED ON THE DAILY PRICE RETURN OF AN INDEX. CUMULATIVE FUND PERFORMANCE: OCTOBER 1, 2001 - DECEMBER 31, 2004 [THE FOLLOWING TABLE WAS REPRESENTED AS A LINE CHART IN THE PRINTED MATERIAL.] DATE LARGE-CAP EUROPE FUND DOW JONES STOXX 50 INDEX - ---- --------------------- ------------------------ 10/1/2001 10,000 10,000 10/31/2001 10,524 10,685 11/30/2001 10,920 11,010 12/31/2001 11,204 11,428 1/31/2002 10,444 11,050 2/28/2002 10,236 10,951 3/31/2002 10,808 11,392 4/30/2002 10,620 10,821 5/31/2002 10,476 10,352 6/30/2002 10,052 9,437 7/31/2002 8,812 8,438 8/31/2002 8,524 8,353 9/30/2002 7,151 7,137 10/31/2002 7,933 7,896 11/30/2002 8,373 8,209 12/31/2002 8,027 7,423 1/31/2003 7,505 6,899 2/28/2003 7,151 6,676 3/31/2003 7,011 6,471 4/30/2003 8,159 7,148 5/31/2003 8,755 7,139 6/30/2003 8,932 7,385 7/31/2003 8,870 7,628 8/31/2003 8,915 7,645 9/30/2003 9,109 7,359 10/31/2003 9,758 7,824 11/30/2003 10,314 7,914 12/31/2003 11,485 8,202 1/31/2004 11,475 8,313 2/29/2004 11,751 8,474 3/31/2004 11,174 8,211 4/30/2004 10,872 8,348 5/31/2004 11,088 8,230 6/30/2004 11,199 8,286 7/31/2004 10,797 8,171 8/31/2004 10,918 8,078 9/30/2004 11,452 8,227 10/31/2004 11,931 8,300 11/30/2004 12,700 8,440 12/31/2004 13,340 8,555 AVERAGE ANNUAL TOTAL RETURNS FOR THE PERIOD ENDED 12/31/04 - -------------------------------------------------------------------------------- SINCE ONE INCEPTION YEAR (10/01/01) - -------------------------------------------------------------------------------- LARGE-CAP EUROPE FUND 16.15% 9.27% DOW JONES STOXX 50 INDEX 4.30% -4.69% - -------------------------------------------------------------------------------- THE RETURNS PRESENTED ABOVE DO NOT REFLECT THE EFFECTS OF TAXES. PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS. THE DOW JONES STOXX 50 INDEX IS AN UNMANAGED STOCK INDEX AND, UNLIKE THE FUND, HAS NO MANAGEMENT FEES OR OTHER OPERATING EXPENSES TO REDUCE ITS REPORTED RETURNS. RETURNS ARE HISTORICAL AND INCLUDE CHANGES IN PRINCIPAL AND REINVESTED DIVIDENDS AND CAPITAL GAINS. HOLDINGS DIVERSIFICATION (MARKET EXPOSURE AS % OF NET ASSETS) [THE FOLLOWING TABLE WAS REPRESENTED AS A BAR CHART IN THE PRINTED MATERIAL.] LARGE-CAP EUROPE FUND DOW JONES STOXX 50 INDEX --------------------- ------------------------ OTHER 10.2% FINANCIAL 36.4% CONSUMER, NON-CYCLICAL 20.4% ENERGY 17.8% COMMUNICATIONS 15.2% FUTURES CONTRACTS 122.9% EQUITY INDEX SWAP AGREEMENTS 0.0% "Holdings Diversification (Market Exposure as % of Net Assets)" excludes any temporary cash investments. The fund invests principally in leveraged derivative instruments, such as equity swap agreements, futures contracts, and options on securities, futures contracts and stock indices. See Notes to Financial Statements. THE RYDEX VARIABLE TRUST ANNUAL REPORT | 19 PERFORMANCE REPORTS AND FUND PROFILES (CONTINUED) - -------------------------------------------------------------------------------- LARGE-CAP JAPAN FUND OBJECTIVE: To provide investment results that correlate to the performance of a specific benchmark. The Fund's current benchmark is the Topix 100 Index. Inception: October 1, 2001 Japanese markets joined U.S. and European markets in rallying for the second consecutive year, with the Topix 100 Index gaining 6.76% for the year. Rydex Large-Cap Japan Fund advanced 10.33%, helped in part by the yen's 4.3% appreciation versus the dollar. The country's economy continued to improve slowly, helped by increased trade with China. Financial services led the top-performing sectors, while semiconductor stocks struggled during the period. For the year ended December 31, 2004, the Fund achieved a daily correlation of more than 0.95 to its benchmark of 125% the daily price performance of the Topix 100 Index. The effects of compounding may cause the longer-term correlation of the Fund to its benchmark to diminish.(1) (1) 1.00 EQUALS PERFECT CORRELATION. THIS CALCULATION IS BASED ON THE DAILY PRICE RETURN OF AN INDEX. CUMULATIVE FUND PERFORMANCE: OCTOBER 1, 2001 - DECEMBER 31, 2004 [THE FOLLOWING TABLE WAS REPRESENTED AS A LINE CHART IN THE PRINTED MATERIAL.] DATE LARGE-CAP JAPAN FUND TOPIX 100 INDEX - ---- -------------------- --------------- 10/1/2001 10,000 10,000 10/31/2001 9,864 10,046 11/30/2001 9,760 10,150 12/31/2001 8,764 10,008 1/31/2002 7,856 9,337 2/28/2002 8,432 9,691 3/31/2002 9,348 10,509 4/30/2002 9,788 10,441 5/31/2002 10,344 10,701 6/30/2002 9,524 9,711 7/31/2002 8,704 9,056 8/31/2002 8,556 8,844 9/30/2002 7,854 8,604 10/31/2002 7,228 8,091 11/30/2002 7,537 8,460 12/31/2002 7,344 7,917 1/31/2003 6,939 7,661 2/28/2003 6,959 7,512 3/31/2003 6,477 7,134 4/30/2003 6,341 7,128 5/31/2003 6,786 7,505 6/30/2003 7,389 8,088 7/31/2003 7,878 8,491 8/31/2003 8,762 9,074 9/30/2003 9,184 9,085 10/31/2003 9,613 9,238 11/30/2003 9,324 8,984 12/31/2003 10,107 9,359 1/31/2004 10,147 9,391 2/29/2004 10,191 9,672 3/31/2004 11,709 10,332 4/30/2004 10,597 10,375 5/31/2004 10,380 9,992 6/30/2004 10,995 10,256 7/31/2004 9,967 9,897 8/31/2004 10,131 9,806 9/30/2004 9,685 9,524 10/31/2004 9,975 9,426 11/30/2004 10,412 9,533 12/31/2004 11,151 9,991 AVERAGE ANNUAL TOTAL RETURNS FOR THE PERIOD ENDED 12/31/04 - -------------------------------------------------------------------------------- SINCE ONE INCEPTION YEAR (10/01/01) - -------------------------------------------------------------------------------- LARGE-CAP JAPAN FUND 10.33% 3.41% TOPIX 100 INDEX 6.76% -0.03% - -------------------------------------------------------------------------------- THE RETURNS PRESENTED ABOVE DO NOT REFLECT THE EFFECTS OF TAXES. PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS. THE TOPIX 100 INDEX IS AN UNMANAGED STOCK INDEX AND, UNLIKE THE FUND, HAS NO MANAGEMENT FEES OR OTHER OPERATING EXPENSES TO REDUCE ITS REPORTED RETURNS. RETURNS ARE HISTORICAL AND INCLUDE CHANGES IN PRINCIPAL AND REINVESTED DIVIDENDS AND CAPITAL GAINS. HOLDINGS DIVERSIFICATION (MARKET EXPOSURE AS % OF NET ASSETS) [THE FOLLOWING TABLE WAS REPRESENTED AS A BAR CHART IN THE PRINTED MATERIAL.] LARGE-CAP JAPAN FUND TOPIX 100 FUND -------------------- -------------- OTHER 4.8% CONSUMER, CYCLICAL 26.9% FINANCIAL 21.9% INDUSTRIAL 14.6% COMMUNICATIONS 12.1% CONSUMER, NON-CYCLICAL 8.0% TECHNOLOGY 6.1% UTILITIES 5.7% FUTURES CONTRACTS 6.9% EQUITY INDEX SWAP AGREEMENTS 118.5% "Holdings Diversification (Market Exposure as % of Net Assets)" excludes any temporary cash investments. The fund invests principally in leveraged derivative instruments, such as equity swap agreements, futures contracts, and options on securities, futures contracts and stock indices. See Notes to Financial Statements. 20 | THE RYDEX VARIABLE TRUST ANNUAL REPORT PERFORMANCE REPORTS AND FUND PROFILES (CONTINUED) - -------------------------------------------------------------------------------- LONG DYNAMIC DOW 30 FUND OBJECTIVE: To provide investment results that will match the performance of a specific benchmark on a daily basis. The Fund's current benchmark is 200% of the performance of the Dow Jones Industrial Average Index. Inception: May 3, 2004 The Dow Jones Industrial Average Index was in a range for most of the year before rallying in the fourth quarter. The energy sector, consisting almost entirely of Exxon Mobil, was an outperformer for the year, while the health care and technology sectors struggled during the period. McDonald's (31.5%), Exxon Mobil (28%), Eastman Kodak (27.9%) and Johnson & Johnson (25.2%) led the list of gainers. Merck (-27.8%), Intel (-22.3%), Pfizer (-22.3%) and General Motors (-21.5%) were the year's big losers. Because this Fund is long the Dow average, which underperformed other broad-market indices in the past year, the fund returned 8.65% since May 3, 2004, the Fund's inception, through December 31, 2004.For the year ended December 31, 2004, the Fund achieved a daily correlation of more than .99 to its benchmark of 200% the daily price performance of the Dow Jones Industrial Average Index. The effects of compounding may cause the longer-term correlation of the Fund to its benchmark to diminish.(1) (1) 1.00 EQUALS PERFECT CORRELATION. THIS CALCULATION IS BASED ON THE DAILY PRICE RETURN OF AN INDEX. CUMULATIVE FUND PERFORMANCE: MAY 3, 2004 - DECEMBER 31, 2004 [THE FOLLOWING TABLE WAS REPRESENTED AS A LINE CHART IN THE PRINTED MATERIAL.] DATE LONG DYNAMIC DOW 30 FUND DOW JONES INDUSTRIAL AVERAGE - ---- ------------------------ ---------------------------- 5/3/2004 10,000 10,000 5/4/2004 10,008 10,003 5/5/2004 10,000 9,997 5/6/2004 9,856 9,932 5/7/2004 9,624 9,811 5/8/2004 9,624 9,811 5/9/2004 9,624 9,811 5/10/2004 9,380 9,688 5/11/2004 9,436 9,718 5/12/2004 9,496 9,750 5/13/2004 9,428 9,717 5/14/2004 9,432 9,721 5/15/2004 9,432 9,721 5/16/2004 9,432 9,721 5/17/2004 9,228 9,618 5/18/2004 9,348 9,679 5/19/2004 9,304 9,656 5/20/2004 9,308 9,656 5/21/2004 9,360 9,685 5/22/2004 9,360 9,685 5/23/2004 9,360 9,685 5/24/2004 9,340 9,677 5/25/2004 9,640 9,831 5/26/2004 9,624 9,824 5/27/2004 9,804 9,916 5/28/2004 9,764 9,900 5/29/2004 9,764 9,900 5/30/2004 9,764 9,900 5/31/2004 9,764 9,900 6/1/2004 9,788 9,914 6/2/2004 9,908 9,975 6/3/2004 9,780 9,910 6/4/2004 9,864 9,956 6/5/2004 9,864 9,956 6/6/2004 9,864 9,956 6/7/2004 10,148 10,100 6/8/2004 10,228 10,141 6/9/2004 10,104 10,079 6/10/2004 10,184 10,119 6/11/2004 10,184 10,119 6/12/2004 10,184 10,119 6/13/2004 10,184 10,119 6/14/2004 10,048 10,053 6/15/2004 10,144 10,097 6/16/2004 10,140 10,096 6/17/2004 10,132 10,094 6/18/2004 10,204 10,132 6/19/2004 10,204 10,132 6/20/2004 10,204 10,132 6/21/2004 10,124 10,088 6/22/2004 10,172 10,111 6/23/2004 10,332 10,194 6/24/2004 10,264 10,160 6/25/2004 10,120 10,090 6/26/2004 10,120 10,090 6/27/2004 10,120 10,090 6/28/2004 10,088 10,076 6/29/2004 10,196 10,131 6/30/2004 10,244 10,153 7/1/2004 10,040 10,057 7/2/2004 9,936 10,007 7/3/2004 9,936 10,007 7/4/2004 9,936 10,007 7/5/2004 9,936 10,007 7/6/2004 9,820 9,945 7/7/2004 9,868 9,970 7/8/2004 9,728 9,903 7/9/2004 9,804 9,944 7/10/2004 9,804 9,944 7/11/2004 9,804 9,944 7/12/2004 9,848 9,968 7/13/2004 9,864 9,977 7/14/2004 9,784 9,940 7/15/2004 9,704 9,895 7/16/2004 9,664 9,875 7/17/2004 9,664 9,875 7/18/2004 9,664 9,875 7/19/2004 9,572 9,831 7/20/2004 9,676 9,885 7/21/2004 9,476 9,786 7/22/2004 9,484 9,790 7/23/2004 9,316 9,704 7/24/2004 9,316 9,704 7/25/2004 9,316 9,704 7/26/2004 9,316 9,704 7/27/2004 9,544 9,824 7/28/2004 9,604 9,855 7/29/2004 9,636 9,870 7/30/2004 9,648 9,880 7/31/2004 9,648 9,880 8/1/2004 9,648 9,880 8/2/2004 9,720 9,919 8/3/2004 9,608 9,861 8/4/2004 9,624 9,869 8/5/2004 9,308 9,709 8/6/2004 9,036 9,567 8/7/2004 9,036 9,567 8/8/2004 9,036 9,567 8/9/2004 9,036 9,566 8/10/2004 9,272 9,693 8/11/2004 9,280 9,697 8/12/2004 9,044 9,576 8/13/2004 9,064 9,589 8/14/2004 9,064 9,589 8/15/2004 9,064 9,589 8/16/2004 9,300 9,715 8/17/2004 9,336 9,733 8/18/2004 9,548 9,848 8/19/2004 9,464 9,807 8/20/2004 9,600 9,874 8/21/2004 9,600 9,874 8/22/2004 9,600 9,874 8/23/2004 9,532 9,839 8/24/2004 9,576 9,864 8/25/2004 9,736 9,945 8/26/2004 9,716 9,937 8/27/2004 9,764 9,958 8/28/2004 9,764 9,958 8/29/2004 9,764 9,958 8/30/2004 9,624 9,887 8/31/2004 9,712 9,938 9/1/2004 9,708 9,936 9/2/2004 9,948 10,055 9/3/2004 9,888 10,026 9/4/2004 9,888 10,026 9/5/2004 9,888 10,026 9/6/2004 9,888 10,026 9/7/2004 10,036 10,106 9/8/2004 9,976 10,077 9/9/2004 9,928 10,054 9/10/2004 9,960 10,077 9/11/2004 9,960 10,077 9/12/2004 9,960 10,077 9/13/2004 9,972 10,086 9/14/2004 9,988 10,090 9/15/2004 9,808 10,005 9/16/2004 9,832 10,018 9/17/2004 9,912 10,057 9/18/2004 9,912 10,057 9/19/2004 9,912 10,057 9/20/2004 9,748 9,979 9/21/2004 9,820 10,018 9/22/2004 9,548 9,885 9/23/2004 9,420 9,818 9/24/2004 9,432 9,826 9/25/2004 9,432 9,826 9/26/2004 9,432 9,826 9/27/2004 9,320 9,769 9/28/2004 9,488 9,856 9/29/2004 9,596 9,913 9/30/2004 9,488 9,859 10/1/2004 9,700 9,969 10/2/2004 9,700 9,969 10/3/2004 9,700 9,969 10/4/2004 9,744 9,994 10/5/2004 9,676 9,956 10/6/2004 9,796 10,023 10/7/2004 9,576 9,911 10/8/2004 9,444 9,842 10/9/2004 9,444 9,842 10/10/2004 9,444 9,842 10/11/2004 9,496 9,869 10/12/2004 9,480 9,864 10/13/2004 9,332 9,791 10/14/2004 9,144 9,685 10/15/2004 9,204 9,723 10/16/2004 9,204 9,723 10/17/2004 9,204 9,723 10/18/2004 9,248 9,746 10/19/2004 9,136 9,688 10/20/2004 9,116 9,679 10/21/2004 9,080 9,662 10/22/2004 8,884 9,556 10/23/2004 8,884 9,556 10/24/2004 8,884 9,556 10/25/2004 8,868 9,548 10/26/2004 9,112 9,684 10/27/2004 9,324 9,795 10/28/2004 9,332 9,800 10/29/2004 9,368 9,823 10/30/2004 9,368 9,823 10/31/2004 9,368 9,823 11/1/2004 9,416 9,849 11/2/2004 9,380 9,831 11/3/2004 9,572 9,932 11/4/2004 9,904 10,109 11/5/2004 10,048 10,181 11/6/2004 10,048 10,181 11/7/2004 10,048 10,181 11/8/2004 10,060 10,186 11/9/2004 10,064 10,186 11/10/2004 10,076 10,191 11/11/2004 10,240 10,274 11/12/2004 10,364 10,344 11/13/2004 10,364 10,344 11/14/2004 10,364 10,344 11/15/2004 10,384 10,356 11/16/2004 10,264 10,294 11/17/2004 10,424 10,361 11/18/2004 10,468 10,384 11/19/2004 10,236 10,270 11/20/2004 10,236 10,270 11/21/2004 10,236 10,270 11/22/2004 10,296 10,302 11/23/2004 10,304 10,305 11/24/2004 10,352 10,307 11/25/2004 10,352 10,333 11/26/2004 10,356 10,335 11/27/2004 10,356 10,335 11/28/2004 10,356 10,335 11/29/2004 10,264 10,291 11/30/2004 10,172 10,244 12/1/2004 10,488 10,407 12/2/2004 10,476 10,402 12/3/2004 10,488 10,409 12/4/2004 10,488 10,409 12/5/2004 10,488 10,409 12/6/2004 10,396 10,365 12/7/2004 10,188 10,260 12/8/2004 10,292 10,315 12/9/2004 10,408 10,372 12/10/2004 10,388 10,363 12/11/2004 10,388 10,363 12/12/2004 10,388 10,363 12/13/2004 10,572 10,457 12/14/2004 10,652 10,494 12/15/2004 10,680 10,510 12/16/2004 10,704 10,524 12/17/2004 10,600 10,469 12/18/2004 10,600 10,469 12/19/2004 10,600 10,469 12/20/2004 10,612 10,481 12/21/2004 10,804 10,577 12/22/2004 10,940 10,639 12/23/2004 10,968 10,650 12/24/2004 10,968 10,650 12/25/2004 10,968 10,650 12/26/2004 10,968 10,650 12/27/2004 10,860 10,600 12/28/2004 11,012 10,677 12/29/2004 10,960 10,652 12/30/2004 10,907 10,624 12/31/2004 10,865 10,607 AVERAGE ANNUAL TOTAL RETURNS FOR THE PERIOD ENDED 12/31/04 - -------------------------------------------------------------------------------- SINCE INCEPTION (05/03/04) - -------------------------------------------------------------------------------- LONG DYNAMIC DOW 30 FUND 8.65% DOW JONES INDUSTRIAL AVERAGE INDEX 6.07% - -------------------------------------------------------------------------------- THE RETURNS PRESENTED ABOVE DO NOT REFLECT THE EFFECTS OF TAXES. PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS. THE DOW JONES INDUSTRIAL AVERAGE INDEX IS AN UNMANAGED STOCK INDEX AND, UNLIKE THE FUND, HAS NO MANAGEMENT FEES OR OTHER OPERATING EXPENSES TO REDUCE ITS REPORTED RETURNS. RETURNS ARE HISTORICAL AND INCLUDE CHANGES IN PRINCIPAL AND REINVESTED DIVIDENDS AND CAPITAL GAINS. HOLDINGS DIVERSIFICATION (MARKET EXPOSURE AS % OF NET ASSETS) [THE FOLLOWING TABLE WAS REPRESENTED AS A BAR CHART IN THE PRINTED MATERIAL.] LONG DYNAMIC DOW JONES INDUSTRIAL DOW 30 FUND AVERAGE INDEX ----------- ------------- OTHER 9.0% 8.0% INDUSTRIALS 18.5% 27.8% CONSUMER STAPLES 9.6% 14.6% FINANCIALS 9.5% 14.5% INFORMATION TECHNOLOGY 7.7% 11.6% CONSUMER DISCRETIONARY 6.5% 9.8% HEALTH CARE 5.6% 8.3% MATERIALS 5.4% FUTURES CONTRACTS 65.7% EQUITY INDEX SWAP AGREEMENTS 68.3% 0.0% "Holdings Diversification (Market Exposure as % of Net Assets)" excludes any temporary cash investments. TEN LARGEST HOLDINGS (% OF TOTAL NET ASSETS) - ------------------------------------------------------ United Technologies Corp. 4.7% International Business Machines Corp. 4.5% Caterpillar, Inc. 4.4% 3M Co. 3.7% American International Group, Inc. 3.0% Johnson & Johnson 2.9% Altria Group, Inc. 2.8% American Express Co. 2.6% Procter & Gamble Co. 2.5% Wal-Mart Stores, Inc. 2.4% - ------------------------------------------------------ Top Ten Total 33.5% - ------------------------------------------------------ "Ten Largest Holdings" excludes any temporary cash investments and equity index products. See Notes to Financial Statements. THE RYDEX VARIABLE TRUST ANNUAL REPORT | 21 PERFORMANCE REPORTS AND FUND PROFILES (CONTINUED) - -------------------------------------------------------------------------------- INVERSE DYNAMIC DOW 30 FUND OBJECTIVE: To provide investment results that will match the performance of a specific benchmark on a daily basis. The Fund's current benchmark is 200% of the inverse (opposite) performance of the Dow Jones Industrial Average Index. Inception: May 3, 2004 The Dow Jones Industrial Average Index rose 6.07% since May 3, 2004. The Index was in a trading range for most of the year before rising strongly in the fourth quarter. The energy sector, consisting almost entirely of Exxon Mobil, was also an outperformer for the period, while the health care and technology sectors struggled. McDonald's (31.5%), Exxon Mobil (28%), Eastman Kodak (27.9%) and Johnson & Johnson (25.2%) led the list of gainers. Merck (-27.8%), Intel (-22.3%), Pfizer (-22.3%) and General Motors (-21.5%) were the year's big losers. Striving to achieve 200% of the daily performance of the Dow proved advantageous, as the average disappointed. The Fund returned -11.47% for the period beginning May 3, 2004, the Fund's inception, through December 31, 2004. For the year ended December 31, 2004, the Fund achieved a daily correlation of more than .99 to its benchmark of -200% the daily price performance of the Dow Jones Industrial Average Index. The effects of compounding may cause the longer-term correlation of the Fund to its benchmark to diminish.(1) (1) 1.00 EQUALS PERFECT CORRELATION. THIS CALCULATION IS BASED ON THE DAILY PRICE RETURN OF AN INDEX. CUMULATIVE FUND PERFORMANCE: MAY 3, 2004 - DECEMBER 31, 2004 [THE FOLLOWING TABLE WAS REPRESENTED AS A LINE CHART IN THE PRINTED MATERIAL.] DATE INVERSE DYNAMIC DOW 30 FUND DOW JONES INDUSTRIAL AVERAGE INDEX - ---- --------------------------- ---------------------------------- 5/3/2004 10,000 10,000 5/4/2004 9,992 10,003 5/5/2004 9,996 9,997 5/6/2004 10,138 9,932 5/7/2004 10,378 9,811 5/8/2004 10,378 9,811 5/9/2004 10,378 9,811 5/10/2004 10,658 9,688 5/11/2004 10,586 9,718 5/12/2004 10,512 9,750 5/13/2004 10,592 9,717 5/14/2004 10,590 9,721 5/15/2004 10,590 9,721 5/16/2004 10,590 9,721 5/17/2004 10,812 9,618 5/18/2004 10,666 9,679 5/19/2004 10,718 9,656 5/20/2004 10,714 9,656 5/21/2004 10,650 9,685 5/22/2004 10,650 9,685 5/23/2004 10,650 9,685 5/24/2004 10,672 9,677 5/25/2004 10,336 9,831 5/26/2004 10,348 9,824 5/27/2004 10,160 9,916 5/28/2004 10,192 9,900 5/29/2004 10,192 9,900 5/30/2004 10,192 9,900 5/31/2004 10,192 9,900 6/1/2004 10,164 9,914 6/2/2004 10,038 9,975 6/3/2004 10,172 9,910 6/4/2004 10,076 9,956 6/5/2004 10,076 9,956 6/6/2004 10,076 9,956 6/7/2004 9,790 10,100 6/8/2004 9,710 10,141 6/9/2004 9,828 10,079 6/10/2004 9,748 10,119 6/11/2004 9,748 10,119 6/12/2004 9,748 10,119 6/13/2004 9,748 10,119 6/14/2004 9,876 10,053 6/15/2004 9,786 10,097 6/16/2004 9,790 10,096 6/17/2004 9,794 10,094 6/18/2004 9,726 10,132 6/19/2004 9,726 10,132 6/20/2004 9,726 10,132 6/21/2004 9,804 10,088 6/22/2004 9,758 10,111 6/23/2004 9,602 10,194 6/24/2004 9,664 10,160 6/25/2004 9,800 10,090 6/26/2004 9,800 10,090 6/27/2004 9,800 10,090 6/28/2004 9,828 10,076 6/29/2004 9,714 10,131 6/30/2004 9,672 10,153 7/1/2004 9,860 10,057 7/2/2004 9,962 10,007 7/3/2004 9,962 10,007 7/4/2004 9,962 10,007 7/5/2004 9,962 10,007 7/6/2004 10,080 9,945 7/7/2004 10,030 9,970 7/8/2004 10,168 9,903 7/9/2004 10,084 9,944 7/10/2004 10,084 9,944 7/11/2004 10,084 9,944 7/12/2004 10,036 9,968 7/13/2004 10,018 9,977 7/14/2004 10,102 9,940 7/15/2004 10,180 9,895 7/16/2004 10,224 9,875 7/17/2004 10,224 9,875 7/18/2004 10,224 9,875 7/19/2004 10,320 9,831 7/20/2004 10,206 9,885 7/21/2004 10,416 9,786 7/22/2004 10,410 9,790 7/23/2004 10,594 9,704 7/24/2004 10,594 9,704 7/25/2004 10,594 9,704 7/26/2004 10,584 9,704 7/27/2004 10,330 9,824 7/28/2004 10,264 9,855 7/29/2004 10,232 9,870 7/30/2004 10,220 9,880 7/31/2004 10,220 9,880 8/1/2004 10,220 9,880 8/2/2004 10,138 9,919 8/3/2004 10,266 9,861 8/4/2004 10,248 9,869 8/5/2004 10,580 9,709 8/6/2004 10,894 9,567 8/7/2004 10,894 9,567 8/8/2004 10,894 9,567 8/9/2004 10,890 9,566 8/10/2004 10,608 9,693 8/11/2004 10,596 9,697 8/12/2004 10,860 9,576 8/13/2004 10,828 9,589 8/14/2004 10,828 9,589 8/15/2004 10,828 9,589 8/16/2004 10,548 9,715 8/17/2004 10,508 9,733 8/18/2004 10,262 9,848 8/19/2004 10,350 9,807 8/20/2004 10,204 9,874 8/21/2004 10,204 9,874 8/22/2004 10,204 9,874 8/23/2004 10,276 9,839 8/24/2004 10,232 9,864 8/25/2004 10,060 9,945 8/26/2004 10,080 9,937 8/27/2004 10,032 9,958 8/28/2004 10,032 9,958 8/29/2004 10,032 9,958 8/30/2004 10,176 9,887 8/31/2004 10,076 9,938 9/1/2004 10,082 9,936 9/2/2004 9,838 10,055 9/3/2004 9,900 10,026 9/4/2004 9,900 10,026 9/5/2004 9,900 10,026 9/6/2004 9,900 10,026 9/7/2004 9,744 10,106 9/8/2004 9,798 10,077 9/9/2004 9,844 10,054 9/10/2004 9,788 10,077 9/11/2004 9,788 10,077 9/12/2004 9,788 10,077 9/13/2004 9,772 10,086 9/14/2004 9,760 10,090 9/15/2004 9,932 10,005 9/16/2004 9,908 10,018 9/17/2004 9,830 10,057 9/18/2004 9,830 10,057 9/19/2004 9,830 10,057 9/20/2004 9,986 9,979 9/21/2004 9,906 10,018 9/22/2004 10,174 9,885 9/23/2004 10,308 9,818 9/24/2004 10,294 9,826 9/25/2004 10,294 9,826 9/26/2004 10,294 9,826 9/27/2004 10,412 9,769 9/28/2004 10,230 9,856 9/29/2004 10,116 9,913 9/30/2004 10,228 9,859 10/1/2004 9,996 9,969 10/2/2004 9,996 9,969 10/3/2004 9,996 9,969 10/4/2004 9,948 9,994 10/5/2004 10,024 9,956 10/6/2004 9,892 10,023 10/7/2004 10,116 9,911 10/8/2004 10,260 9,842 10/9/2004 10,260 9,842 10/10/2004 10,260 9,842 10/11/2004 10,202 9,869 10/12/2004 10,216 9,864 10/13/2004 10,370 9,791 10/14/2004 10,592 9,685 10/15/2004 10,516 9,723 10/16/2004 10,516 9,723 10/17/2004 10,516 9,723 10/18/2004 10,466 9,746 10/19/2004 10,590 9,688 10/20/2004 10,612 9,679 10/21/2004 10,654 9,662 10/22/2004 10,886 9,556 10/23/2004 10,886 9,556 10/24/2004 10,886 9,556 10/25/2004 10,906 9,548 10/26/2004 10,602 9,684 10/27/2004 10,356 9,795 10/28/2004 10,346 9,800 10/29/2004 10,302 9,823 10/30/2004 10,302 9,823 10/31/2004 10,302 9,823 11/1/2004 10,248 9,849 11/2/2004 10,288 9,831 11/3/2004 10,074 9,932 11/4/2004 9,714 10,109 11/5/2004 9,578 10,181 11/6/2004 9,578 10,181 11/7/2004 9,578 10,181 11/8/2004 9,566 10,186 11/9/2004 9,566 10,186 11/10/2004 9,552 10,191 11/11/2004 9,398 10,274 11/12/2004 9,282 10,344 11/13/2004 9,282 10,344 11/14/2004 9,282 10,344 11/15/2004 9,262 10,356 11/16/2004 9,372 10,294 11/17/2004 9,246 10,361 11/18/2004 9,204 10,384 11/19/2004 9,406 10,270 11/20/2004 9,406 10,270 11/21/2004 9,406 10,270 11/22/2004 9,350 10,302 11/23/2004 9,344 10,305 11/24/2004 9,298 10,307 11/25/2004 9,298 10,333 11/26/2004 9,296 10,335 11/27/2004 9,296 10,335 11/28/2004 9,296 10,335 11/29/2004 9,378 10,291 11/30/2004 9,462 10,244 12/1/2004 9,172 10,407 12/2/2004 9,182 10,402 12/3/2004 9,174 10,409 12/4/2004 9,174 10,409 12/5/2004 9,174 10,409 12/6/2004 9,250 10,365 12/7/2004 9,432 10,260 12/8/2004 9,342 10,315 12/9/2004 9,236 10,372 12/10/2004 9,254 10,363 12/11/2004 9,254 10,363 12/12/2004 9,254 10,363 12/13/2004 9,088 10,457 12/14/2004 9,016 10,494 12/15/2004 8,998 10,510 12/16/2004 8,982 10,524 12/17/2004 9,060 10,469 12/18/2004 9,060 10,469 12/19/2004 9,060 10,469 12/20/2004 9,054 10,481 12/21/2004 8,896 10,577 12/22/2004 8,786 10,639 12/23/2004 8,760 10,650 12/24/2004 8,760 10,650 12/25/2004 8,760 10,650 12/26/2004 8,760 10,650 12/27/2004 8,848 10,600 12/28/2004 8,726 10,677 12/29/2004 8,772 10,652 12/30/2004 8,814 10,624 12/31/2004 8,853 10,607 AVERAGE ANNUAL TOTAL RETURNS FOR THE PERIOD ENDED 12/31/04 - -------------------------------------------------------------------------------- SINCE INCEPTION (05/03/04) - -------------------------------------------------------------------------------- INVERSE DYNAMIC DOW 30 FUND -11.47% DOW JONES INDUSTRIAL AVERAGE INDEX 6.07% - -------------------------------------------------------------------------------- THE RETURNS PRESENTED ABOVE DO NOT REFLECT THE EFFECTS OF TAXES. PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS. THE DOW JONES INDUSTRIAL AVERAGE INDEX IS AN UNMANAGED STOCK INDEX AND, UNLIKE THE FUND, HAS NO MANAGEMENT FEES OR OTHER OPERATING EXPENSES TO REDUCE ITS REPORTED RETURNS. RETURNS ARE HISTORICAL AND INCLUDE CHANGES IN PRINCIPAL AND REINVESTED DIVIDENDS AND CAPITAL GAINS. HOLDINGS DIVERSIFICATION (MARKET EXPOSURE AS % OF NET ASSETS) [THE FOLLOWING TABLE WAS REPRESENTED AS A BAR CHART IN THE PRINTED MATERIAL.] INVERSE DYNAMIC DOW JONES INDUSTRIAL DOW 30 FUND AVERAGE INDEX ----------- ------------- OTHER 8.0% INDUSTRIALS 27.8% CONSUMER STAPLES 14.6% FINANCIALS 14.5% INFORMATION TECHNOLOGY 11.6% CONSUMER DISCRETIONARY 9.8% HEALTH CARE 8.3% MATERIALS 5.4% FUTURES CONTRACTS -133.8% EQUITY INDEX SWAP AGREEMENTS -66.3% "Holdings Diversification (Market Exposure as % of Net Assets)" excludes any temporary cash investments. The fund invests principally in leveraged derivative instruments, such as equity swap agreements, futures contracts, and options on securities, futures contracts and stock indices. See Notes to Financial Statements. 22 | THE RYDEX VARIABLE TRUST ANNUAL REPORT PERFORMANCE REPORTS AND FUND PROFILES (CONTINUED) - -------------------------------------------------------------------------------- SMALL-CAP VALUE FUND OBJECTIVE: To provide investment results that match the performance of a benchmark for small cap value securities. The Fund's current benchmark is the S&P SmallCap 600/Barra Value Index. Inception: May 3, 2004 There was a lot of good news for Rydex Small-Cap Value Fund during the reporting period, as small-caps outperformed the other market capitalizations and value outperformed growth. Rydex Small-Cap Value Fund returned 18.03% versus its benchmark, the S&P SmallCap 600/Barra Value Index, which returned 18.38%. For the year ended December 31, 2004, the Fund achieved a daily correlation of more than .99 to its benchmark of the daily price performance of the S&P SmallCap 600/Barra Value Index. The effects of compounding may cause the longer-term correlation of the Fund to its benchmark to diminish.(1) (1) 1.00 EQUALS PERFECT CORRELATION. THIS CALCULATION IS BASED ON THE DAILY PRICE RETURN OF AN INDEX. CUMULATIVE FUND PERFORMANCE: MAY 3, 2004 - DECEMBER 31, 2004 [THE FOLLOWING TABLE WAS REPRESENTED AS A LINE CHART IN THE PRINTED MATERIAL.] DATE SMALL-CAP VALUE FUND S&P SMALLCAP 600/BARRA VALUE INDEX - ---- -------------------- ---------------------------------- 5/3/2004 10,000 10,000 5/4/2004 10,072 10,076 5/5/2004 10,064 10,067 5/6/2004 9,964 9,966 5/7/2004 9,708 9,709 5/8/2004 9,708 9,709 5/9/2004 9,708 9,709 5/10/2004 9,536 9,534 5/11/2004 9,692 9,691 5/12/2004 9,728 9,727 5/13/2004 9,664 9,665 5/14/2004 9,640 9,640 5/15/2004 9,640 9,640 5/16/2004 9,640 9,640 5/17/2004 9,496 9,494 5/18/2004 9,628 9,632 5/19/2004 9,604 9,604 5/20/2004 9,648 9,652 5/21/2004 9,712 9,716 5/22/2004 9,712 9,716 5/23/2004 9,712 9,716 5/24/2004 9,828 9,833 5/25/2004 10,060 10,067 5/26/2004 10,056 10,063 5/27/2004 10,056 10,063 5/28/2004 10,052 10,063 5/29/2004 10,052 10,063 5/30/2004 10,052 10,063 5/31/2004 10,052 10,063 6/1/2004 10,108 10,117 6/2/2004 10,124 10,133 6/3/2004 9,960 9,968 6/4/2004 10,020 10,030 6/5/2004 10,020 10,030 6/6/2004 10,020 10,030 6/7/2004 10,232 10,241 6/8/2004 10,236 10,247 6/9/2004 10,108 10,115 6/10/2004 10,132 10,140 6/11/2004 10,132 10,140 6/12/2004 10,132 10,140 6/13/2004 10,132 10,140 6/14/2004 9,960 9,966 6/15/2004 10,124 10,134 6/16/2004 10,172 10,180 6/17/2004 10,212 10,220 6/18/2004 10,244 10,255 6/19/2004 10,244 10,255 6/20/2004 10,244 10,255 6/21/2004 10,216 10,228 6/22/2004 10,256 10,266 6/23/2004 10,376 10,391 6/24/2004 10,344 10,356 6/25/2004 10,448 10,462 6/26/2004 10,448 10,462 6/27/2004 10,448 10,462 6/28/2004 10,424 10,437 6/29/2004 10,532 10,540 6/30/2004 10,596 10,605 7/1/2004 10,476 10,480 7/2/2004 10,500 10,507 7/3/2004 10,500 10,507 7/4/2004 10,500 10,507 7/5/2004 10,500 10,507 7/6/2004 10,356 10,354 7/7/2004 10,356 10,363 7/8/2004 10,188 10,193 7/9/2004 10,224 10,233 7/10/2004 10,224 10,233 7/11/2004 10,224 10,233 7/12/2004 10,216 10,222 7/13/2004 10,252 10,259 7/14/2004 10,204 10,206 7/15/2004 10,248 10,249 7/16/2004 10,188 10,187 7/17/2004 10,188 10,187 7/18/2004 10,188 10,187 7/19/2004 10,180 10,174 7/20/2004 10,320 10,318 7/21/2004 10,088 10,083 7/22/2004 9,996 9,989 7/23/2004 9,924 9,919 7/24/2004 9,924 9,919 7/25/2004 9,924 9,919 7/26/2004 9,856 9,848 7/27/2004 10,016 10,013 7/28/2004 9,960 9,950 7/29/2004 10,096 10,084 7/30/2004 10,100 10,090 7/31/2004 10,100 10,090 8/1/2004 10,100 10,090 8/2/2004 10,140 10,132 8/3/2004 10,012 10,004 8/4/2004 10,024 10,012 8/5/2004 9,852 9,841 8/6/2004 9,640 9,627 8/7/2004 9,640 9,627 8/8/2004 9,640 9,627 8/9/2004 9,644 9,628 8/10/2004 9,824 9,809 8/11/2004 9,808 9,792 8/12/2004 9,608 9,595 8/13/2004 9,620 9,607 8/14/2004 9,620 9,607 8/15/2004 9,620 9,607 8/16/2004 9,836 9,824 8/17/2004 9,856 9,845 8/18/2004 10,016 10,002 8/19/2004 9,960 9,947 8/20/2004 10,136 10,130 8/21/2004 10,136 10,130 8/22/2004 10,136 10,130 8/23/2004 10,032 10,026 8/24/2004 10,092 10,086 8/25/2004 10,132 10,127 8/26/2004 10,116 10,108 8/27/2004 10,188 10,181 8/28/2004 10,188 10,181 8/29/2004 10,188 10,181 8/30/2004 10,064 10,055 8/31/2004 10,120 10,111 9/1/2004 10,192 10,184 9/2/2004 10,344 10,335 9/3/2004 10,276 10,270 9/4/2004 10,276 10,270 9/5/2004 10,276 10,270 9/6/2004 10,276 10,270 9/7/2004 10,408 10,402 9/8/2004 10,316 10,308 9/9/2004 10,448 10,438 9/10/2004 10,492 10,482 9/11/2004 10,492 10,482 9/12/2004 10,492 10,482 9/13/2004 10,536 10,528 9/14/2004 10,476 10,468 9/15/2004 10,436 10,425 9/16/2004 10,548 10,541 9/17/2004 10,556 10,547 9/18/2004 10,556 10,547 9/19/2004 10,556 10,547 9/20/2004 10,496 10,490 9/21/2004 10,628 10,619 9/22/2004 10,444 10,434 9/23/2004 10,444 10,437 9/24/2004 10,440 10,435 9/25/2004 10,440 10,435 9/26/2004 10,440 10,435 9/27/2004 10,340 10,337 9/28/2004 10,452 10,447 9/29/2004 10,564 10,559 9/30/2004 10,600 10,597 10/1/2004 10,828 10,829 10/2/2004 10,828 10,829 10/3/2004 10,828 10,829 10/4/2004 10,888 10,892 10/5/2004 10,856 10,859 10/6/2004 10,964 10,967 10/7/2004 10,756 10,762 10/8/2004 10,660 10,662 10/9/2004 10,660 10,662 10/10/2004 10,660 10,662 10/11/2004 10,652 10,657 10/12/2004 10,672 10,676 10/13/2004 10,520 10,522 10/14/2004 10,392 10,393 10/15/2004 10,472 10,478 10/16/2004 10,472 10,478 10/17/2004 10,472 10,478 10/18/2004 10,476 10,485 10/19/2004 10,384 10,391 10/20/2004 10,404 10,411 10/21/2004 10,528 10,538 10/22/2004 10,348 10,362 10/23/2004 10,348 10,362 10/24/2004 10,348 10,362 10/25/2004 10,420 10,431 10/26/2004 10,592 10,605 10/27/2004 10,752 10,762 10/28/2004 10,700 10,709 10/29/2004 10,672 10,679 10/30/2004 10,672 10,679 10/31/2004 10,672 10,679 11/1/2004 10,744 10,752 11/2/2004 10,712 10,718 11/3/2004 10,888 10,894 11/4/2004 11,016 11,022 11/5/2004 11,040 11,048 11/6/2004 11,040 11,048 11/7/2004 11,040 11,048 11/8/2004 10,996 11,005 11/9/2004 11,076 11,085 11/10/2004 11,116 11,125 11/11/2004 11,236 11,246 11/12/2004 11,332 11,345 11/13/2004 11,332 11,345 11/14/2004 11,332 11,345 11/15/2004 11,360 11,372 11/16/2004 11,256 11,272 11/17/2004 11,364 11,380 11/18/2004 11,356 11,371 11/19/2004 11,236 11,251 11/20/2004 11,236 11,251 11/21/2004 11,236 11,251 11/22/2004 11,392 11,409 11/23/2004 11,444 11,461 11/24/2004 11,544 11,565 11/25/2004 11,544 11,565 11/26/2004 11,572 11,593 11/27/2004 11,572 11,593 11/28/2004 11,572 11,593 11/29/2004 11,644 11,666 11/30/2004 11,616 11,638 12/1/2004 11,792 11,814 12/2/2004 11,724 11,743 12/3/2004 11,708 11,731 12/4/2004 11,708 11,731 12/5/2004 11,708 11,731 12/6/2004 11,652 11,675 12/7/2004 11,408 11,430 12/8/2004 11,492 11,514 12/9/2004 11,484 11,507 12/10/2004 11,520 11,546 12/11/2004 11,520 11,546 12/12/2004 11,520 11,546 12/13/2004 11,604 11,628 12/14/2004 11,664 11,690 12/15/2004 11,772 11,798 12/16/2004 11,676 11,697 12/17/2004 11,680 11,705 12/18/2004 11,680 11,705 12/19/2004 11,680 11,705 12/20/2004 11,580 11,609 12/21/2004 11,724 11,758 12/22/2004 11,772 11,804 12/23/2004 11,760 11,794 12/24/2004 11,760 11,794 12/25/2004 11,760 11,794 12/26/2004 11,760 11,794 12/27/2004 11,640 11,676 12/28/2004 11,828 11,864 12/29/2004 11,816 11,850 12/30/2004 11,803 11,839 12/31/2004 11,803 11,838 AVERAGE ANNUAL TOTAL RETURNS FOR THE PERIOD ENDED 12/31/04 - -------------------------------------------------------------------------------- SINCE INCEPTION (05/03/04) - -------------------------------------------------------------------------------- SMALL-CAP VALUE FUND 18.03% S&P SMALLCAP 600/BARRA VALUE INDEX 18.38% - -------------------------------------------------------------------------------- THE RETURNS PRESENTED ABOVE DO NOT REFLECT THE EFFECTS OF TAXES. PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS. THE S&P SMALLCAP 600/BARRA VALUE INDEX IS AN UNMANAGED STOCK INDEX AND, UNLIKE THE FUND, HAS NO MANAGEMENT FEES OR OTHER OPERATING EXPENSES TO REDUCE ITS REPORTED RETURNS. RETURNS ARE HISTORICAL AND INCLUDE CHANGES IN PRINCIPAL AND REINVESTED DIVIDENDS AND CAPITAL GAINS. HOLDINGS DIVERSIFICATION (MARKET EXPOSURE AS % OF NET ASSETS) [THE FOLLOWING TABLE WAS REPRESENTED AS A BAR CHART IN THE PRINTED MATERIAL.] S&P SMALLCAP 600/BARRA SMALL-CAP VALUE FUND VALUE INDEX -------------------- ----------- OTHER 7.6% 8.6% INDUSTRIALS 21.8% 21.5% FINANCIALS 20.0% 20.6% CONSUMER DISCRETIONARY 14.6% 14.8% INFORMATION TECHNOLOGY 13.8% 12.7% HEALTH CARE 7.8% 7.9% MATERIALS 7.2% 7.9% UTILITIES 6.7% 6.1% "Holdings Diversification (Market Exposure as % of Net Assets)" excludes any temporary cash investments. TEN LARGEST HOLDINGS (% OF TOTAL NET ASSETS) - ------------------------------------------------------ MDC Holdings, Inc. 1.0% Yellow Roadway Corp. 1.0% Timken Co. 0.9% South Financial Group, Inc. 0.9% Briggs & Stratton Corp. 0.8% Standard-Pacific Corp. 0.8% Hughes Supply, Inc. 0.8% Atmos Energy Corp. 0.8% UGI Corp. 0.8% Shurgard Storage Centers, Inc. - Class A 0.8% - ------------------------------------------------------ Top Ten Total 8.6% - ------------------------------------------------------ "Ten Largest Holdings" excludes any temporary cash investments and equity index products. See Notes to Financial Statements. THE RYDEX VARIABLE TRUST ANNUAL REPORT | 23 PERFORMANCE REPORTS AND FUND PROFILES (CONTINUED) - -------------------------------------------------------------------------------- MID-CAP VALUE FUND OBJECTIVE: To provide investment results that match the performance of a benchmark for mid cap value securities. The Fund's current benchmark is the S&P MidCap 400/Barra Value Index. Inception: May 3, 2004 Value outperformed growth during the period, and mid-caps performed relatively well. Boosted by the energy, utilities and materials sectors, Rydex Mid-Cap Value Fund returned 15.20%. Its benchmark, the S&P MidCap 400/Barra Value Index, returned 15.00% for the same period. For the year ended December 31, 2004, the Fund achieved a daily correlation of more than .99 to its benchmark of the daily price performance of the S&P Midcap 400/Barra Value Index. The effects of compounding may cause the longer-term correlation of the Fund to its benchmark to diminish.(1) (1) 1.00 EQUALS PERFECT CORRELATION. THIS CALCULATION IS BASED ON THE DAILY PRICE RETURN OF AN INDEX. CUMULATIVE FUND PERFORMANCE: MAY 3, 2004 - DECEMBER 31, 2004 [THE FOLLOWING TABLE WAS REPRESENTED AS A LINE CHART IN THE PRINTED MATERIAL.] DATE MID-CAP VALUE FUND S&P MIDCAP 400/BARRA VALUE INDEX - ---- ------------------ -------------------------------- 5/3/2004 10,000 10,000 5/4/2004 10,024 10,028 5/5/2004 10,044 10,048 5/6/2004 9,948 9,950 5/7/2004 9,732 9,731 5/8/2004 9,732 9,731 5/9/2004 9,732 9,731 5/10/2004 9,568 9,565 5/11/2004 9,668 9,668 5/12/2004 9,656 9,651 5/13/2004 9,672 9,670 5/14/2004 9,672 9,669 5/15/2004 9,672 9,669 5/16/2004 9,672 9,669 5/17/2004 9,564 9,560 5/18/2004 9,624 9,624 5/19/2004 9,592 9,594 5/20/2004 9,616 9,618 5/21/2004 9,648 9,653 5/22/2004 9,648 9,653 5/23/2004 9,648 9,653 5/24/2004 9,760 9,764 5/25/2004 9,940 9,946 5/26/2004 10,008 10,012 5/27/2004 10,056 10,061 5/28/2004 10,100 10,108 5/29/2004 10,100 10,108 5/30/2004 10,100 10,108 5/31/2004 10,100 10,108 6/1/2004 10,120 10,127 6/2/2004 10,140 10,147 6/3/2004 10,012 10,018 6/4/2004 10,080 10,089 6/5/2004 10,080 10,089 6/6/2004 10,080 10,089 6/7/2004 10,240 10,249 6/8/2004 10,216 10,223 6/9/2004 10,096 10,103 6/10/2004 10,124 10,134 6/11/2004 10,124 10,134 6/12/2004 10,124 10,134 6/13/2004 10,124 10,134 6/14/2004 9,992 10,000 6/15/2004 10,116 10,121 6/16/2004 10,132 10,140 6/17/2004 10,152 10,160 6/18/2004 10,160 10,168 6/19/2004 10,160 10,168 6/20/2004 10,160 10,168 6/21/2004 10,148 10,153 6/22/2004 10,196 10,205 6/23/2004 10,288 10,307 6/24/2004 10,264 10,288 6/25/2004 10,304 10,328 6/26/2004 10,304 10,328 6/27/2004 10,304 10,328 6/28/2004 10,260 10,270 6/29/2004 10,288 10,293 6/30/2004 10,400 10,408 7/1/2004 10,268 10,269 7/2/2004 10,268 10,261 7/3/2004 10,268 10,261 7/4/2004 10,268 10,261 7/5/2004 10,268 10,261 7/6/2004 10,144 10,125 7/7/2004 10,164 10,138 7/8/2004 10,060 10,024 7/9/2004 10,108 10,074 7/10/2004 10,108 10,074 7/11/2004 10,108 10,074 7/12/2004 10,104 10,068 7/13/2004 10,120 10,088 7/14/2004 10,116 10,076 7/15/2004 10,156 10,120 7/16/2004 10,104 10,069 7/17/2004 10,104 10,069 7/18/2004 10,104 10,069 7/19/2004 10,120 10,083 7/20/2004 10,220 10,182 7/21/2004 10,040 9,983 7/22/2004 10,008 9,947 7/23/2004 9,904 9,845 7/24/2004 9,904 9,845 7/25/2004 9,904 9,845 7/26/2004 9,836 9,777 7/27/2004 9,936 9,879 7/28/2004 9,900 9,841 7/29/2004 10,016 9,958 7/30/2004 10,008 9,947 7/31/2004 10,008 9,947 8/1/2004 10,008 9,947 8/2/2004 10,060 9,998 8/3/2004 9,964 9,901 8/4/2004 9,944 9,880 8/5/2004 9,768 9,702 8/6/2004 9,632 9,568 8/7/2004 9,632 9,568 8/8/2004 9,632 9,568 8/9/2004 9,648 9,585 8/10/2004 9,796 9,733 8/11/2004 9,736 9,670 8/12/2004 9,604 9,537 8/13/2004 9,596 9,530 8/14/2004 9,596 9,530 8/15/2004 9,596 9,530 8/16/2004 9,756 9,691 8/17/2004 9,796 9,729 8/18/2004 9,916 9,862 8/19/2004 9,856 9,798 8/20/2004 9,968 9,912 8/21/2004 9,968 9,912 8/22/2004 9,968 9,912 8/23/2004 9,920 9,866 8/24/2004 9,940 9,887 8/25/2004 10,032 9,975 8/26/2004 10,036 9,981 8/27/2004 10,080 10,023 8/28/2004 10,080 10,023 8/29/2004 10,080 10,023 8/30/2004 9,960 9,904 8/31/2004 10,056 9,998 9/1/2004 10,132 10,075 9/2/2004 10,208 10,147 9/3/2004 10,172 10,114 9/4/2004 10,172 10,114 9/5/2004 10,172 10,114 9/6/2004 10,172 10,114 9/7/2004 10,260 10,200 9/8/2004 10,128 10,068 9/9/2004 10,212 10,150 9/10/2004 10,228 10,167 9/11/2004 10,228 10,167 9/12/2004 10,228 10,167 9/13/2004 10,272 10,214 9/14/2004 10,240 10,180 9/15/2004 10,188 10,129 9/16/2004 10,280 10,223 9/17/2004 10,296 10,240 9/18/2004 10,296 10,240 9/19/2004 10,296 10,240 9/20/2004 10,244 10,190 9/21/2004 10,336 10,280 9/22/2004 10,228 10,173 9/23/2004 10,192 10,139 9/24/2004 10,236 10,185 9/25/2004 10,236 10,185 9/26/2004 10,236 10,185 9/27/2004 10,164 10,115 9/28/2004 10,228 10,177 9/29/2004 10,244 10,193 9/30/2004 10,336 10,286 10/1/2004 10,484 10,437 10/2/2004 10,484 10,437 10/3/2004 10,484 10,437 10/4/2004 10,476 10,431 10/5/2004 10,460 10,414 10/6/2004 10,540 10,493 10/7/2004 10,400 10,353 10/8/2004 10,332 10,291 10/9/2004 10,332 10,291 10/10/2004 10,332 10,291 10/11/2004 10,324 10,283 10/12/2004 10,308 10,267 10/13/2004 10,192 10,151 10/14/2004 10,128 10,090 10/15/2004 10,168 10,132 10/16/2004 10,168 10,132 10/17/2004 10,168 10,132 10/18/2004 10,180 10,143 10/19/2004 10,096 10,061 10/20/2004 10,116 10,082 10/21/2004 10,204 10,171 10/22/2004 10,136 10,105 10/23/2004 10,136 10,105 10/24/2004 10,136 10,105 10/25/2004 10,184 10,154 10/26/2004 10,280 10,254 10/27/2004 10,392 10,365 10/28/2004 10,368 10,341 10/29/2004 10,384 10,359 10/30/2004 10,384 10,359 10/31/2004 10,384 10,359 11/1/2004 10,412 10,386 11/2/2004 10,396 10,370 11/3/2004 10,552 10,525 11/4/2004 10,712 10,684 11/5/2004 10,716 10,690 11/6/2004 10,716 10,690 11/7/2004 10,716 10,690 11/8/2004 10,680 10,654 11/9/2004 10,720 10,695 11/10/2004 10,748 10,720 11/11/2004 10,848 10,821 11/12/2004 10,980 10,955 11/13/2004 10,980 10,955 11/14/2004 10,980 10,955 11/15/2004 10,964 10,939 11/16/2004 10,908 10,883 11/17/2004 11,000 10,970 11/18/2004 11,000 10,974 11/19/2004 10,892 10,865 11/20/2004 10,892 10,865 11/21/2004 10,892 10,865 11/22/2004 10,996 10,969 11/23/2004 11,032 11,007 11/24/2004 11,132 11,105 11/25/2004 11,132 11,105 11/26/2004 11,144 11,119 11/27/2004 11,144 11,119 11/28/2004 11,144 11,119 11/29/2004 11,116 11,092 11/30/2004 11,104 11,078 12/1/2004 11,216 11,193 12/2/2004 11,152 11,128 12/3/2004 11,192 11,168 12/4/2004 11,192 11,168 12/5/2004 11,192 11,168 12/6/2004 11,140 11,117 12/7/2004 10,992 10,973 12/8/2004 11,044 11,018 12/9/2004 11,100 11,075 12/10/2004 11,136 11,112 12/11/2004 11,136 11,112 12/12/2004 11,136 11,112 12/13/2004 11,220 11,195 12/14/2004 11,312 11,291 12/15/2004 11,416 11,396 12/16/2004 11,348 11,325 12/17/2004 11,336 11,316 12/18/2004 11,336 11,316 12/19/2004 11,336 11,316 12/20/2004 11,268 11,247 12/21/2004 11,384 11,363 12/22/2004 11,420 11,400 12/23/2004 11,424 11,406 12/24/2004 11,424 11,406 12/25/2004 11,424 11,406 12/26/2004 11,424 11,406 12/27/2004 11,360 11,342 12/28/2004 11,484 11,465 12/29/2004 11,496 11,478 12/30/2004 11,541 11,522 12/31/2004 11,520 11,500 AVERAGE ANNUAL TOTAL RETURNS FOR THE PERIOD ENDED 12/31/04 - -------------------------------------------------------------------------------- SINCE INCEPTION (05/03/04) - -------------------------------------------------------------------------------- MID-CAP VALUE FUND 15.20% S&P MIDCAP 400/BARRA VALUE INDEX 15.00% - -------------------------------------------------------------------------------- THE RETURNS PRESENTED ABOVE DO NOT REFLECT THE EFFECTS OF TAXES. PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS. THE S&P MIDCAP 400/BARRA VALUE INDEX IS AN UNMANAGED STOCK INDEX AND, UNLIKE THE FUND, HAS NO MANAGEMENT FEES OR OTHER OPERATING EXPENSES TO REDUCE ITS REPORTED RETURNS. RETURNS ARE HISTORICAL AND INCLUDE CHANGES IN PRINCIPAL AND REINVESTED DIVIDENDS AND CAPITAL GAINS. HOLDINGS DIVERSIFICATION (MARKET EXPOSURE AS % OF NET ASSETS) [THE FOLLOWING TABLE WAS REPRESENTED AS A BAR CHART IN THE PRINTED MATERIAL.] S&P MIDCAP 400/BARRA MID-CAP VALUE FUND VALUE INDEX ------------------ ----------- OTHER 0.8% 0.8% FINANCIALS 24.3% 24.7% CONSUMER DISCRETIONARY 16.9% 16.7% INFORMATION TECHNOLOGY 13.2% 13.0% UTILITIES 11.0% 11.2% INDUSTRIALS 8.6% 8.7% ENERGY 7.1% 7.0% MATERIALS 6.5% 6.5% HEALTH CARE 5.7% 5.7% CONSUMER STAPLES 5.4% 5.7% "Holdings Diversification (Market Exposure as % of Net Assets)" excludes any temporary cash investments. TEN LARGEST HOLDINGS (% OF TOTAL NET ASSETS) - ------------------------------------------------------ DR Horton, Inc. 1.7% Lennar Corp. - Class A 1.6% Fidelity National Financial, Inc. 1.5% Weatherford International Ltd. 1.3% Tyson Foods, Inc. - Class A 1.2% Banknorth Group, Inc. 1.2% Caesars Entertainment, Inc. 1.2% Mohawk Industries, Inc. 1.1% New York Community Bancorp, Inc. 1.0% Toll Brothers, Inc. 0.9% - ------------------------------------------------------ Top Ten Total 12.7% - ------------------------------------------------------ "Ten Largest Holdings" excludes any temporary cash investments and equity index products. See Notes to Financial Statements. 24 | THE RYDEX VARIABLE TRUST ANNUAL REPORT PERFORMANCE REPORTS AND FUND PROFILES (CONTINUED) - -------------------------------------------------------------------------------- LARGE-CAP VALUE FUND OBJECTIVE: To provide investment results that match the performance of a benchmark for large cap value securities. The Fund's current benchmark is the S&P 500/Barra Value Index. Inception: May 3, 2004 Large-caps were the worst performers of the three market capitalizations, but fortunately for Rydex Large-Cap Value Fund, there was good news. Value outperformed growth, helping to level off some of the negatives of large-cap investing during the period. The Fund returned 12.49% versus its benchmark, the S&P 500/Barra Value Index, which returned 12.21%. For the year ended December 31, 2004, the Fund achieved a daily correlation of 1.00 to its benchmark of the daily price performance of the S&P 500/Barra Value Index. The effects of compounding may cause the longer-term correlation of the Fund to its benchmark to diminish.(1) (1) 1.00 EQUALS PERFECT CORRELATION. THIS CALCULATION IS BASED ON THE DAILY PRICE RETURN OF AN INDEX. CUMULATIVE FUND PERFORMANCE: MAY 3, 2004 - DECEMBER 31, 2004 [THE FOLLOWING TABLE WAS REPRESENTED AS A LINE CHART IN THE PRINTED MATERIAL.] DATE LARGE-CAP VALUE FUND S&P 500/BARRA VALUE INDEX - ---- -------------------- ------------------------- 5/3/2004 10,000 10,000 5/4/2004 10,008 10,026 5/5/2004 10,024 10,043 5/6/2004 9,928 9,947 5/7/2004 9,748 9,753 5/8/2004 9,748 9,753 5/9/2004 9,748 9,753 5/10/2004 9,600 9,605 5/11/2004 9,688 9,688 5/12/2004 9,744 9,743 5/13/2004 9,744 9,745 5/14/2004 9,764 9,765 5/15/2004 9,764 9,765 5/16/2004 9,764 9,765 5/17/2004 9,644 9,643 5/18/2004 9,716 9,716 5/19/2004 9,708 9,705 5/20/2004 9,716 9,714 5/21/2004 9,760 9,759 5/22/2004 9,760 9,759 5/23/2004 9,760 9,759 5/24/2004 9,804 9,806 5/25/2004 9,960 9,966 5/26/2004 9,972 9,975 5/27/2004 10,004 10,005 5/28/2004 10,004 10,008 5/29/2004 10,004 10,008 5/30/2004 10,004 10,008 5/31/2004 10,004 10,008 6/1/2004 10,008 10,011 6/2/2004 10,052 10,051 6/3/2004 9,972 9,969 6/4/2004 10,020 10,022 6/5/2004 10,020 10,022 6/6/2004 10,020 10,022 6/7/2004 10,180 10,181 6/8/2004 10,180 10,181 6/9/2004 10,088 10,086 6/10/2004 10,144 10,145 6/11/2004 10,144 10,145 6/12/2004 10,144 10,145 6/13/2004 10,144 10,145 6/14/2004 10,028 10,026 6/15/2004 10,080 10,082 6/16/2004 10,108 10,110 6/17/2004 10,112 10,115 6/18/2004 10,148 10,150 6/19/2004 10,148 10,150 6/20/2004 10,148 10,150 6/21/2004 10,108 10,108 6/22/2004 10,140 10,142 6/23/2004 10,224 10,229 6/24/2004 10,204 10,210 6/25/2004 10,160 10,178 6/26/2004 10,160 10,178 6/27/2004 10,160 10,178 6/28/2004 10,144 10,151 6/29/2004 10,156 10,161 6/30/2004 10,204 10,211 7/1/2004 10,120 10,119 7/2/2004 10,104 10,105 7/3/2004 10,104 10,105 7/4/2004 10,104 10,105 7/5/2004 10,104 10,105 7/6/2004 10,036 10,025 7/7/2004 10,056 10,045 7/8/2004 9,976 9,960 7/9/2004 10,004 9,986 7/10/2004 10,004 9,986 7/11/2004 10,004 9,986 7/12/2004 10,028 10,014 7/13/2004 10,032 10,017 7/14/2004 10,012 9,997 7/15/2004 9,976 9,955 7/16/2004 9,952 9,931 7/17/2004 9,952 9,931 7/18/2004 9,952 9,931 7/19/2004 9,964 9,943 7/20/2004 10,024 10,005 7/21/2004 9,900 9,878 7/22/2004 9,916 9,893 7/23/2004 9,868 9,846 7/24/2004 9,868 9,846 7/25/2004 9,868 9,846 7/26/2004 9,856 9,834 7/27/2004 9,952 9,928 7/28/2004 9,968 9,941 7/29/2004 10,028 9,998 7/30/2004 10,028 9,999 7/31/2004 10,028 9,999 8/1/2004 10,028 9,999 8/2/2004 10,068 10,041 8/3/2004 10,036 10,007 8/4/2004 10,008 9,977 8/5/2004 9,860 9,830 8/6/2004 9,720 9,688 8/7/2004 9,720 9,688 8/8/2004 9,720 9,688 8/9/2004 9,736 9,704 8/10/2004 9,852 9,823 8/11/2004 9,832 9,796 8/12/2004 9,712 9,673 8/13/2004 9,716 9,678 8/14/2004 9,716 9,678 8/15/2004 9,716 9,678 8/16/2004 9,872 9,831 8/17/2004 9,888 9,847 8/18/2004 10,004 9,960 8/19/2004 9,976 9,933 8/20/2004 10,056 10,014 8/21/2004 10,056 10,014 8/22/2004 10,056 10,014 8/23/2004 10,016 9,976 8/24/2004 10,024 9,982 8/25/2004 10,100 10,060 8/26/2004 10,108 10,070 8/27/2004 10,128 10,090 8/28/2004 10,128 10,090 8/29/2004 10,128 10,090 8/30/2004 10,064 10,025 8/31/2004 10,128 10,087 9/1/2004 10,136 10,090 9/2/2004 10,260 10,199 9/3/2004 10,236 10,178 9/4/2004 10,236 10,178 9/5/2004 10,236 10,178 9/6/2004 10,236 10,178 9/7/2004 10,316 10,258 9/8/2004 10,256 10,195 9/9/2004 10,276 10,216 9/10/2004 10,308 10,254 9/11/2004 10,308 10,254 9/12/2004 10,308 10,254 9/13/2004 10,324 10,268 9/14/2004 10,340 10,284 9/15/2004 10,276 10,219 9/16/2004 10,336 10,282 9/17/2004 10,376 10,322 9/18/2004 10,376 10,322 9/19/2004 10,376 10,322 9/20/2004 10,320 10,267 9/21/2004 10,412 10,359 9/22/2004 10,284 10,231 9/23/2004 10,220 10,170 9/24/2004 10,260 10,215 9/25/2004 10,260 10,215 9/26/2004 10,260 10,215 9/27/2004 10,188 10,155 9/28/2004 10,248 10,212 9/29/2004 10,264 10,228 9/30/2004 10,300 10,264 10/1/2004 10,448 10,417 10/2/2004 10,448 10,417 10/3/2004 10,448 10,417 10/4/2004 10,484 10,451 10/5/2004 10,472 10,442 10/6/2004 10,560 10,524 10/7/2004 10,488 10,450 10/8/2004 10,436 10,401 10/9/2004 10,436 10,401 10/10/2004 10,436 10,401 10/11/2004 10,448 10,410 10/12/2004 10,424 10,387 10/13/2004 10,324 10,287 10/14/2004 10,204 10,170 10/15/2004 10,248 10,220 10/16/2004 10,248 10,220 10/17/2004 10,248 10,220 10/18/2004 10,272 10,242 10/19/2004 10,148 10,118 10/20/2004 10,136 10,109 10/21/2004 10,156 10,128 10/22/2004 10,088 10,060 10/23/2004 10,088 10,060 10/24/2004 10,088 10,060 10/25/2004 10,104 10,077 10/26/2004 10,276 10,249 10/27/2004 10,360 10,334 10/28/2004 10,388 10,355 10/29/2004 10,432 10,400 10/30/2004 10,432 10,400 10/31/2004 10,432 10,400 11/1/2004 10,448 10,419 11/2/2004 10,440 10,410 11/3/2004 10,548 10,517 11/4/2004 10,740 10,706 11/5/2004 10,764 10,732 11/6/2004 10,764 10,732 11/7/2004 10,764 10,732 11/8/2004 10,740 10,708 11/9/2004 10,732 10,697 11/10/2004 10,744 10,708 11/11/2004 10,836 10,800 11/12/2004 10,944 10,908 11/13/2004 10,944 10,908 11/14/2004 10,944 10,908 11/15/2004 10,912 10,879 11/16/2004 10,836 10,802 11/17/2004 10,896 10,860 11/18/2004 10,908 10,870 11/19/2004 10,804 10,769 11/20/2004 10,804 10,769 11/21/2004 10,804 10,769 11/22/2004 10,892 10,859 11/23/2004 10,924 10,889 11/24/2004 10,972 10,939 11/25/2004 10,972 10,939 11/26/2004 10,992 10,957 11/27/2004 10,992 10,957 11/28/2004 10,992 10,957 11/29/2004 10,952 10,916 11/30/2004 10,920 10,884 12/1/2004 11,060 11,020 12/2/2004 11,004 10,965 12/3/2004 11,004 10,967 12/4/2004 11,004 10,967 12/5/2004 11,004 10,967 12/6/2004 11,012 10,975 12/7/2004 10,888 10,851 12/8/2004 10,928 10,887 12/9/2004 10,984 10,945 12/10/2004 10,976 10,940 12/11/2004 10,976 10,940 12/12/2004 10,976 10,940 12/13/2004 11,088 11,049 12/14/2004 11,120 11,084 12/15/2004 11,152 11,116 12/16/2004 11,108 11,074 12/17/2004 11,056 11,024 12/18/2004 11,056 11,024 12/19/2004 11,056 11,024 12/20/2004 11,044 11,015 12/21/2004 11,156 11,127 12/22/2004 11,208 11,179 12/23/2004 11,208 11,179 12/24/2004 11,208 11,179 12/25/2004 11,208 11,179 12/26/2004 11,208 11,179 12/27/2004 11,168 11,142 12/28/2004 11,252 11,223 12/29/2004 11,260 11,230 12/30/2004 11,261 11,230 12/31/2004 11,249 11,221 AVERAGE ANNUAL TOTAL RETURNS FOR THE PERIOD ENDED 12/31/04 - -------------------------------------------------------------------------------- SINCE INCEPTION (05/03/04) - -------------------------------------------------------------------------------- LARGE-CAP VALUE FUND 12.49% S&P 500/BARRA VALUE INDEX 12.21% - -------------------------------------------------------------------------------- THE RETURNS PRESENTED ABOVE DO NOT REFLECT THE EFFECTS OF TAXES. PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS. THE S&P 500/BARRA VALUE INDEX IS AN UNMANAGED STOCK INDEX AND, UNLIKE THE FUND, HAS NO MANAGEMENT FEES OR OTHER OPERATING EXPENSES TO REDUCE ITS REPORTED RETURNS. RETURNS ARE HISTORICAL AND INCLUDE CHANGES IN PRINCIPAL AND REINVESTED DIVIDENDS AND CAPITAL GAINS. HOLDINGS DIVERSIFICATION (MARKET EXPOSURE AS % OF NET ASSETS) [THE FOLLOWING TABLE WAS REPRESENTED AS A BAR CHART IN THE PRINTED MATERIAL.] LARGE-CAP VALUE FUND S&P 500/BARRA VALUE INDEX -------------------- ------------------------- OTHER 6.2% 6.8% FINANCIALS 38.6% 39.2% CONSUMER DISCRETIONARY 13.3% 13.4% INFORMATION TECHNOLOGY 7.9% 7.6% INDUSTRIALS 7.9% 7.9% HEALTH CARE 7.7% 7.3% ENERGY 6.8% 6.7% TELECOMMUNICATION SERVICES 5.8% 5.8% UTILITIES 5.3% 5.4% "Holdings Diversification (Market Exposure as % of Net Assets)" excludes any temporary cash investments. TEN LARGEST HOLDINGS (% OF TOTAL NET ASSETS) - ------------------------------------------------------ Citigroup, Inc. 4.4% Pfizer, Inc. 3.6% Bank of America Corp. 3.3% American International Group, Inc. 3.0% JPMorgan Chase & Co. 2.4% Verizon Communications, Inc. 2.0% ChevronTexaco Corp. 2.0% Wells Fargo & Co. 1.8% Time Warner, Inc. 1.6% SBC Communications, Inc. 1.5% - ------------------------------------------------------ Top Ten Total 25.6% - ------------------------------------------------------ "Ten Largest Holdings" excludes any temporary cash investments and equity index products. See Notes to Financial Statements. THE RYDEX VARIABLE TRUST ANNUAL REPORT | 25 PERFORMANCE REPORTS AND FUND PROFILES (CONTINUED) - -------------------------------------------------------------------------------- SMALL-CAP GROWTH FUND OBJECTIVE: To provide investment results that match the performance of a benchmark for small cap growth securities. The Fund's current benchmark is the S&P SmallCap 600/Barra Growth Index. Inception: May 3, 2004 Value stocks showed staying power in 2004, outperforming growth stocks. This hurt the Rydex growth funds. Fortunately for Rydex Small-Cap Growth Fund, however, small-caps were strong performers during the period. Rydex Small-Cap Growth Fund returned 15.82%, which, accounting for fees, was in line with its benchmark, the S&P SmallCap 600/Barra Growth Index, which returned 17.33%. For the year ended December 31, 2004, the Fund achieved a daily correlation of more than 0.99 to its benchmark of the daily price performance of the S&P SmallCap 600/Barra Growth Index. The effects of compounding may cause the longer-term correlation of the Fund to its benchmark to diminish.(1) (1) 1.00 EQUALS PERFECT CORRELATION. THIS CALCULATION IS BASED ON THE DAILY PRICE RETURN OF AN INDEX. CUMULATIVE FUND PERFORMANCE: MAY 3, 2004 - DECEMBER 31, 2004 [THE FOLLOWING TABLE WAS REPRESENTED AS A LINE CHART IN THE PRINTED MATERIAL.] DATE SMALL-CAP GROWTH FUND S&P SMALLCAP 600/BARRA GROWTH INDEX - ---- --------------------- ----------------------------------- 5/3/2004 10,000 10,000 5/4/2004 10,056 10,056 5/5/2004 10,104 10,105 5/6/2004 9,976 9,975 5/7/2004 9,748 9,748 5/8/2004 9,748 9,748 5/9/2004 9,748 9,748 5/10/2004 9,560 9,550 5/11/2004 9,752 9,746 5/12/2004 9,752 9,745 5/13/2004 9,720 9,713 5/14/2004 9,664 9,656 5/15/2004 9,664 9,656 5/16/2004 9,664 9,656 5/17/2004 9,520 9,513 5/18/2004 9,628 9,621 5/19/2004 9,616 9,610 5/20/2004 9,612 9,607 5/21/2004 9,704 9,701 5/22/2004 9,704 9,701 5/23/2004 9,704 9,701 5/24/2004 9,804 9,799 5/25/2004 10,060 10,057 5/26/2004 10,112 10,108 5/27/2004 10,112 10,102 5/28/2004 10,096 10,085 5/29/2004 10,096 10,085 5/30/2004 10,096 10,085 5/31/2004 10,096 10,085 6/1/2004 10,168 10,160 6/2/2004 10,204 10,196 6/3/2004 10,028 10,015 6/4/2004 10,120 10,116 6/5/2004 10,120 10,116 6/6/2004 10,120 10,116 6/7/2004 10,308 10,307 6/8/2004 10,324 10,324 6/9/2004 10,204 10,200 6/10/2004 10,192 10,188 6/11/2004 10,192 10,188 6/12/2004 10,192 10,188 6/13/2004 10,192 10,188 6/14/2004 10,044 10,041 6/15/2004 10,224 10,220 6/16/2004 10,304 10,302 6/17/2004 10,288 10,284 6/18/2004 10,284 10,282 6/19/2004 10,284 10,282 6/20/2004 10,284 10,282 6/21/2004 10,268 10,265 6/22/2004 10,336 10,333 6/23/2004 10,468 10,458 6/24/2004 10,460 10,448 6/25/2004 10,556 10,551 6/26/2004 10,556 10,551 6/27/2004 10,556 10,551 6/28/2004 10,492 10,481 6/29/2004 10,576 10,563 6/30/2004 10,648 10,644 7/1/2004 10,488 10,501 7/2/2004 10,444 10,461 7/3/2004 10,444 10,461 7/4/2004 10,444 10,461 7/5/2004 10,444 10,461 7/6/2004 10,272 10,306 7/7/2004 10,232 10,272 7/8/2004 10,072 10,114 7/9/2004 10,100 10,146 7/10/2004 10,100 10,146 7/11/2004 10,100 10,146 7/12/2004 10,036 10,090 7/13/2004 10,048 10,105 7/14/2004 9,984 10,045 7/15/2004 10,040 10,096 7/16/2004 9,960 10,023 7/17/2004 9,960 10,023 7/18/2004 9,960 10,023 7/19/2004 9,924 9,995 7/20/2004 10,068 10,131 7/21/2004 9,820 9,872 7/22/2004 9,796 9,842 7/23/2004 9,664 9,710 7/24/2004 9,664 9,710 7/25/2004 9,664 9,710 7/26/2004 9,560 9,603 7/27/2004 9,748 9,796 7/28/2004 9,708 9,754 7/29/2004 9,868 9,919 7/30/2004 9,924 9,978 7/31/2004 9,924 9,978 8/1/2004 9,924 9,978 8/2/2004 9,920 9,972 8/3/2004 9,784 9,836 8/4/2004 9,748 9,798 8/5/2004 9,556 9,605 8/6/2004 9,284 9,332 8/7/2004 9,284 9,332 8/8/2004 9,284 9,332 8/9/2004 9,300 9,347 8/10/2004 9,456 9,508 8/11/2004 9,440 9,488 8/12/2004 9,244 9,291 8/13/2004 9,244 9,292 8/14/2004 9,244 9,292 8/15/2004 9,244 9,292 8/16/2004 9,428 9,478 8/17/2004 9,464 9,515 8/18/2004 9,652 9,706 8/19/2004 9,628 9,680 8/20/2004 9,772 9,826 8/21/2004 9,772 9,826 8/22/2004 9,772 9,826 8/23/2004 9,720 9,775 8/24/2004 9,700 9,755 8/25/2004 9,768 9,822 8/26/2004 9,732 9,789 8/27/2004 9,808 9,866 8/28/2004 9,808 9,866 8/29/2004 9,808 9,866 8/30/2004 9,672 9,726 8/31/2004 9,704 9,762 9/1/2004 9,820 9,877 9/2/2004 9,952 10,011 9/3/2004 9,912 9,977 9/4/2004 9,912 9,977 9/5/2004 9,912 9,977 9/6/2004 9,912 9,977 9/7/2004 10,024 10,091 9/8/2004 9,932 9,998 9/9/2004 10,056 10,127 9/10/2004 10,140 10,211 9/11/2004 10,140 10,211 9/12/2004 10,140 10,211 9/13/2004 10,216 10,290 9/14/2004 10,208 10,282 9/15/2004 10,152 10,223 9/16/2004 10,232 10,308 9/17/2004 10,212 10,288 9/18/2004 10,212 10,288 9/19/2004 10,212 10,288 9/20/2004 10,192 10,271 9/21/2004 10,324 10,402 9/22/2004 10,104 10,181 9/23/2004 10,108 10,184 9/24/2004 10,132 10,209 9/25/2004 10,132 10,209 9/26/2004 10,132 10,209 9/27/2004 9,972 10,048 9/28/2004 10,108 10,184 9/29/2004 10,236 10,316 9/30/2004 10,228 10,306 10/1/2004 10,416 10,499 10/2/2004 10,416 10,499 10/3/2004 10,416 10,499 10/4/2004 10,484 10,569 10/5/2004 10,444 10,531 10/6/2004 10,524 10,611 10/7/2004 10,384 10,472 10/8/2004 10,216 10,304 10/9/2004 10,216 10,304 10/10/2004 10,216 10,304 10/11/2004 10,252 10,340 10/12/2004 10,232 10,318 10/13/2004 10,132 10,218 10/14/2004 10,084 10,168 10/15/2004 10,152 10,239 10/16/2004 10,152 10,239 10/17/2004 10,152 10,239 10/18/2004 10,180 10,270 10/19/2004 10,132 10,223 10/20/2004 10,208 10,303 10/21/2004 10,340 10,436 10/22/2004 10,212 10,311 10/23/2004 10,212 10,311 10/24/2004 10,212 10,311 10/25/2004 10,264 10,367 10/26/2004 10,360 10,467 10/27/2004 10,528 10,638 10/28/2004 10,480 10,587 10/29/2004 10,496 10,604 10/30/2004 10,496 10,604 10/31/2004 10,496 10,604 11/1/2004 10,532 10,645 11/2/2004 10,504 10,616 11/3/2004 10,700 10,814 11/4/2004 10,844 10,962 11/5/2004 10,932 11,054 11/6/2004 10,932 11,054 11/7/2004 10,932 11,054 11/8/2004 10,884 11,002 11/9/2004 10,932 11,053 11/10/2004 10,968 11,090 11/11/2004 11,068 11,190 11/12/2004 11,164 11,289 11/13/2004 11,164 11,289 11/14/2004 11,164 11,289 11/15/2004 11,176 11,301 11/16/2004 11,052 11,178 11/17/2004 11,160 11,285 11/18/2004 11,140 11,266 11/19/2004 10,964 11,091 11/20/2004 10,964 11,091 11/21/2004 10,964 11,091 11/22/2004 11,128 11,255 11/23/2004 11,184 11,315 11/24/2004 11,260 11,391 11/25/2004 11,260 11,391 11/26/2004 11,276 11,408 11/27/2004 11,276 11,408 11/28/2004 11,276 11,408 11/29/2004 11,320 11,453 11/30/2004 11,312 11,445 12/1/2004 11,440 11,571 12/2/2004 11,412 11,544 12/3/2004 11,392 11,528 12/4/2004 11,392 11,528 12/5/2004 11,392 11,528 12/6/2004 11,328 11,460 12/7/2004 11,076 11,208 12/8/2004 11,160 11,293 12/9/2004 11,132 11,269 12/10/2004 11,164 11,303 12/11/2004 11,164 11,303 12/12/2004 11,164 11,303 12/13/2004 11,272 11,409 12/14/2004 11,372 11,513 12/15/2004 11,432 11,576 12/16/2004 11,368 11,508 12/17/2004 11,364 11,505 12/18/2004 11,364 11,505 12/19/2004 11,364 11,505 12/20/2004 11,316 11,457 12/21/2004 11,460 11,603 12/22/2004 11,512 11,657 12/23/2004 11,528 11,677 12/24/2004 11,528 11,677 12/25/2004 11,528 11,677 12/26/2004 11,528 11,677 12/27/2004 11,400 11,547 12/28/2004 11,612 11,763 12/29/2004 11,608 11,756 12/30/2004 11,598 11,747 12/31/2004 11,582 11,733 AVERAGE ANNUAL TOTAL RETURNS FOR THE PERIOD ENDED 12/31/04 - -------------------------------------------------------------------------------- SINCE INCEPTION (05/03/04) - -------------------------------------------------------------------------------- SMALL-CAP GROWTH FUND 15.82% S&P SMALLCAP 600/BARRA GROWTH INDEX 17.33% - -------------------------------------------------------------------------------- THE RETURNS PRESENTED ABOVE DO NOT REFLECT THE EFFECTS OF TAXES. PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS. THE S&P SMALLCAP 600/BARRA GROWTH INDEX IS AN UNMANAGED STOCK INDEX AND, UNLIKE THE FUND, HAS NO MANAGEMENT FEES OR OTHER OPERATING EXPENSES TO REDUCE ITS REPORTED RETURNS. RETURNS ARE HISTORICAL AND INCLUDE CHANGES IN PRINCIPAL AND REINVESTED DIVIDENDS AND CAPITAL GAINS. HOLDINGS DIVERSIFICATION (MARKET EXPOSURE AS % OF NET ASSETS) [THE FOLLOWING TABLE WAS REPRESENTED AS A BAR CHART IN THE PRINTED MATERIAL.] S&P SMALLCAP 600/BARRA SMALL-CAP GROWTH FUND GROWTH INDEX --------------------- ------------ OTHER 9.7% 5.2% CONSUMER DISCRETIONARY 19.8% 20.1% INFORMATION TECHNOLOGY 17.8% 17.5% INDUSTRIALS 16.8% 16.2% HEALTH CARE 16.7% 17.4% FINANCIALS 11.0% 9.9% ENERGY 7.7% 7.7% MATERIALS 6.0% "Holdings Diversification (Market Exposure as % of Net Assets)" excludes any temporary cash investments. TEN LARGEST HOLDINGS (% OF TOTAL NET ASSETS) - ------------------------------------------------------ NVR, Inc. 1.7% New Century Financial Corp. 1.3% Polaris Industries, Inc. 1.1% Massey Energy Co. 1.0% Patina Oil & Gas Corp. 1.0% Florida Rock Industries, Inc. 1.0% Roper Industries, Inc. 1.0% First Bancorp/Puerto Rico 1.0% Oshkosh Truck Corp. 0.9% Pharmaceutical Product Development, Inc. 0.9% - ------------------------------------------------------ Top Ten Total 10.9% - ------------------------------------------------------ "Ten Largest Holdings" excludes any temporary cash investments and equity index products. See Notes to Financial Statements. 26 | THE RYDEX VARIABLE TRUST ANNUAL REPORT PERFORMANCE REPORTS AND FUND PROFILES (CONTINUED) - -------------------------------------------------------------------------------- MID-CAP GROWTH FUND OBJECTIVE: To provide investment results that match the performance of a benchmark for mid cap growth securities. The Fund's current benchmark is the S&P MidCap 400/Barra Growth Index. Inception: May 3, 2004 As the market favored value to growth over the period, growth funds suffered. And while mid-caps didn't perform as well as small-caps during the period, they did outperform large-caps. The energy and utilities sectors, which returned 34.9% and 25.2%, respectively, helped Rydex Mid-Cap Growth Fund hand in 8.52%, which, after accounting for fees, was in line with the S&P MidCap 400/Barra Growth Index's return of 10.36% for the same time period. For the year ended December 31, 2004, the Fund achieved a daily correlation of 1.00 to its benchmark of the daily price performance of the S&P Midcap 400/Barra Growth Index. The effects of compounding may cause the longer-term correlation of the Fund to its benchmark to diminish.(1) (1) 1.00 EQUALS PERFECT CORRELATION. THIS CALCULATION IS BASED ON THE DAILY PRICE RETURN OF AN INDEX. CUMULATIVE FUND PERFORMANCE: MAY 3, 2004 - DECEMBER 31, 2004 [THE FOLLOWING TABLE WAS REPRESENTED AS A LINE CHART IN THE PRINTED MATERIAL.] DATE MID-CAP GROWTH FUND S&P MIDCAP 400/BARRA GROWTH INDEX - ---- ------------------- --------------------------------- 5/3/2004 10,000 10,000 5/4/2004 10,016 10,018 5/5/2004 10,092 10,095 5/6/2004 9,952 9,954 5/7/2004 9,748 9,746 5/8/2004 9,748 9,746 5/9/2004 9,748 9,746 5/10/2004 9,588 9,582 5/11/2004 9,732 9,729 5/12/2004 9,696 9,691 5/13/2004 9,700 9,695 5/14/2004 9,640 9,637 5/15/2004 9,640 9,637 5/16/2004 9,640 9,637 5/17/2004 9,524 9,520 5/18/2004 9,632 9,629 5/19/2004 9,608 9,607 5/20/2004 9,592 9,589 5/21/2004 9,652 9,650 5/22/2004 9,652 9,650 5/23/2004 9,652 9,650 5/24/2004 9,740 9,739 5/25/2004 9,932 9,933 5/26/2004 9,980 9,984 5/27/2004 10,040 10,043 5/28/2004 10,092 10,097 5/29/2004 10,092 10,097 5/30/2004 10,092 10,097 5/31/2004 10,092 10,097 6/1/2004 10,136 10,141 6/2/2004 10,112 10,119 6/3/2004 9,960 9,964 6/4/2004 10,024 10,033 6/5/2004 10,024 10,033 6/6/2004 10,024 10,033 6/7/2004 10,204 10,215 6/8/2004 10,192 10,202 6/9/2004 10,064 10,072 6/10/2004 10,080 10,093 6/11/2004 10,080 10,093 6/12/2004 10,080 10,093 6/13/2004 10,080 10,093 6/14/2004 9,928 9,937 6/15/2004 10,052 10,065 6/16/2004 10,072 10,084 6/17/2004 10,036 10,049 6/18/2004 10,032 10,042 6/19/2004 10,032 10,042 6/20/2004 10,032 10,042 6/21/2004 9,988 10,004 6/22/2004 10,048 10,064 6/23/2004 10,124 10,144 6/24/2004 10,108 10,131 6/25/2004 10,156 10,185 6/26/2004 10,156 10,185 6/27/2004 10,156 10,185 6/28/2004 10,108 10,135 6/29/2004 10,136 10,170 6/30/2004 10,200 10,238 7/1/2004 10,080 10,119 7/2/2004 10,036 10,083 7/3/2004 10,036 10,083 7/4/2004 10,036 10,083 7/5/2004 10,036 10,083 7/6/2004 9,892 9,940 7/7/2004 9,940 9,983 7/8/2004 9,808 9,851 7/9/2004 9,852 9,898 7/10/2004 9,852 9,898 7/11/2004 9,852 9,898 7/12/2004 9,808 9,854 7/13/2004 9,808 9,853 7/14/2004 9,752 9,800 7/15/2004 9,808 9,858 7/16/2004 9,708 9,770 7/17/2004 9,708 9,770 7/18/2004 9,708 9,770 7/19/2004 9,716 9,775 7/20/2004 9,852 9,909 7/21/2004 9,644 9,699 7/22/2004 9,644 9,695 7/23/2004 9,524 9,569 7/24/2004 9,524 9,569 7/25/2004 9,524 9,569 7/26/2004 9,424 9,468 7/27/2004 9,576 9,625 7/28/2004 9,516 9,561 7/29/2004 9,644 9,696 7/30/2004 9,668 9,723 7/31/2004 9,668 9,723 8/1/2004 9,668 9,723 8/2/2004 9,648 9,702 8/3/2004 9,532 9,584 8/4/2004 9,488 9,537 8/5/2004 9,304 9,350 8/6/2004 9,132 9,172 8/7/2004 9,132 9,172 8/8/2004 9,132 9,172 8/9/2004 9,148 9,185 8/10/2004 9,300 9,340 8/11/2004 9,244 9,282 8/12/2004 9,112 9,148 8/13/2004 9,104 9,141 8/14/2004 9,104 9,141 8/15/2004 9,104 9,141 8/16/2004 9,248 9,288 8/17/2004 9,296 9,336 8/18/2004 9,440 9,483 8/19/2004 9,372 9,416 8/20/2004 9,508 9,556 8/21/2004 9,508 9,556 8/22/2004 9,508 9,556 8/23/2004 9,448 9,493 8/24/2004 9,456 9,503 8/25/2004 9,548 9,594 8/26/2004 9,548 9,596 8/27/2004 9,600 9,647 8/28/2004 9,600 9,647 8/29/2004 9,600 9,647 8/30/2004 9,492 9,539 8/31/2004 9,548 9,595 9/1/2004 9,632 9,679 9/2/2004 9,732 9,783 9/3/2004 9,680 9,723 9/4/2004 9,680 9,723 9/5/2004 9,680 9,723 9/6/2004 9,680 9,723 9/7/2004 9,732 9,784 9/8/2004 9,676 9,726 9/9/2004 9,728 9,784 9/10/2004 9,792 9,849 9/11/2004 9,792 9,849 9/12/2004 9,792 9,849 9/13/2004 9,868 9,926 9/14/2004 9,848 9,911 9/15/2004 9,792 9,854 9/16/2004 9,836 9,898 9/17/2004 9,812 9,878 9/18/2004 9,812 9,878 9/19/2004 9,812 9,878 9/20/2004 9,772 9,838 9/21/2004 9,848 9,913 9/22/2004 9,708 9,776 9/23/2004 9,680 9,748 9/24/2004 9,704 9,811 9/25/2004 9,704 9,811 9/26/2004 9,704 9,811 9/27/2004 9,580 9,686 9/28/2004 9,652 9,760 9/29/2004 9,712 9,821 9/30/2004 9,756 9,869 10/1/2004 9,892 10,011 10/2/2004 9,892 10,011 10/3/2004 9,892 10,011 10/4/2004 9,960 10,079 10/5/2004 9,924 10,045 10/6/2004 9,972 10,095 10/7/2004 9,856 9,978 10/8/2004 9,776 9,898 10/9/2004 9,776 9,898 10/10/2004 9,776 9,898 10/11/2004 9,788 9,911 10/12/2004 9,740 9,864 10/13/2004 9,688 9,810 10/14/2004 9,592 9,719 10/15/2004 9,628 9,755 10/16/2004 9,628 9,755 10/17/2004 9,628 9,755 10/18/2004 9,712 9,841 10/19/2004 9,648 9,779 10/20/2004 9,716 9,845 10/21/2004 9,816 9,948 10/22/2004 9,696 9,832 10/23/2004 9,696 9,832 10/24/2004 9,696 9,832 10/25/2004 9,704 9,841 10/26/2004 9,740 9,878 10/27/2004 9,936 10,077 10/28/2004 9,936 10,077 10/29/2004 9,960 10,104 10/30/2004 9,960 10,104 10/31/2004 9,960 10,104 11/1/2004 9,936 10,078 11/2/2004 9,924 10,069 11/3/2004 10,044 10,189 11/4/2004 10,176 10,326 11/5/2004 10,224 10,377 11/6/2004 10,224 10,377 11/7/2004 10,224 10,377 11/8/2004 10,184 10,336 11/9/2004 10,216 10,367 11/10/2004 10,240 10,391 11/11/2004 10,340 10,493 11/12/2004 10,440 10,597 11/13/2004 10,440 10,597 11/14/2004 10,440 10,597 11/15/2004 10,440 10,595 11/16/2004 10,364 10,521 11/17/2004 10,448 10,608 11/18/2004 10,428 10,589 11/19/2004 10,288 10,448 11/20/2004 10,288 10,448 11/21/2004 10,288 10,448 11/22/2004 10,340 10,505 11/23/2004 10,388 10,552 11/24/2004 10,472 10,639 11/25/2004 10,472 10,639 11/26/2004 10,472 10,641 11/27/2004 10,472 10,641 11/28/2004 10,472 10,641 11/29/2004 10,452 10,620 11/30/2004 10,408 10,575 12/1/2004 10,576 10,745 12/2/2004 10,552 10,721 12/3/2004 10,568 10,741 12/4/2004 10,568 10,741 12/5/2004 10,568 10,741 12/6/2004 10,556 10,729 12/7/2004 10,396 10,566 12/8/2004 10,476 10,648 12/9/2004 10,516 10,687 12/10/2004 10,504 10,677 12/11/2004 10,504 10,677 12/12/2004 10,504 10,677 12/13/2004 10,572 10,746 12/14/2004 10,680 10,856 12/15/2004 10,712 10,890 12/16/2004 10,652 10,824 12/17/2004 10,648 10,825 12/18/2004 10,648 10,825 12/19/2004 10,648 10,825 12/20/2004 10,616 10,793 12/21/2004 10,728 10,908 12/22/2004 10,764 10,945 12/23/2004 10,784 10,964 12/24/2004 10,784 10,964 12/25/2004 10,784 10,964 12/26/2004 10,784 10,964 12/27/2004 10,712 10,894 12/28/2004 10,856 11,042 12/29/2004 10,864 11,046 12/30/2004 10,872 11,055 12/31/2004 10,852 11,036 AVERAGE ANNUAL TOTAL RETURNS FOR THE PERIOD ENDED 12/31/04 - -------------------------------------------------------------------------------- SINCE INCEPTION (05/03/04) - -------------------------------------------------------------------------------- MID-CAP GROWTH FUND 8.52% S&P MIDCAP 400/BARRA GROWTH INDEX 10.36% - -------------------------------------------------------------------------------- THE RETURNS PRESENTED ABOVE DO NOT REFLECT THE EFFECTS OF TAXES. PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS. THE S&P MIDCAP 400/BARRA GROWTH INDEX IS AN UNMANAGED STOCK INDEX AND, UNLIKE THE FUND, HAS NO MANAGEMENT FEES OR OTHER OPERATING EXPENSES TO REDUCE ITS REPORTED RETURNS. RETURNS ARE HISTORICAL AND INCLUDE CHANGES IN PRINCIPAL AND REINVESTED DIVIDENDS AND CAPITAL GAINS. HOLDINGS DIVERSIFICATION (MARKET EXPOSURE AS % OF NET ASSETS) [THE FOLLOWING TABLE WAS REPRESENTED AS A BAR CHART IN THE PRINTED MATERIAL.] S&P MIDCAP 400/BARRA MID-CAP GROWTH FUND GROWTH INDEX ------------------- ------------ OTHER 10.4% 10.3% CONSUMER DISCRETIONARY 21.5% 22.2% INDUSTRIALS 16.9% 16.9% INFORMATION TECHNOLOGY 16.0% 15.8% HEALTH CARE 15.8% 15.6% FINANCIALS 12.5% 12.7% ENERGY 6.5% 6.4% "Holdings Diversification (Market Exposure as % of Net Assets)" excludes any temporary cash investments. TEN LARGEST HOLDINGS (% OF TOTAL NET ASSETS) - ------------------------------------------------------ Harman International Industries, Inc. 1.6% Washington Post - Class B 1.5% Murphy Oil Corp. 1.4% Legg Mason, Inc. 1.4% Lyondell Chemical Co. 1.3% Sepracor, Inc. 1.2% Patterson Cos., Inc. 1.1% Expeditors International Washington, Inc. 1.1% Whole Foods Market, Inc. 1.1% Varian Medical Systems, Inc. 1.1% - ------------------------------------------------------ Top Ten Total 12.8% - ------------------------------------------------------ "Ten Largest Holdings" excludes any temporary cash investments and equity index products. See Notes to Financial Statements. THE RYDEX VARIABLE TRUST ANNUAL REPORT | 27 PERFORMANCE REPORTS AND FUND PROFILES (CONTINUED) - -------------------------------------------------------------------------------- LARGE-CAP GROWTH FUND OBJECTIVE: To provide investment results that match the performance of a benchmark for large cap growth securities. The Fund's current benchmark is the S&P 500/Barra Growth Index. Inception: May 3, 2004 There was not a lot of good news for Rydex Large-Cap Growth Fund during the period, as value outperformed growth and large-cap stocks were the worst performers of the three market capitalizations. The technology and health care sectors were another drag on the Fund, which returned 4.26% during the period. The Fund's benchmark, the S&P 500/Barra Growth Index, returned 4.71%. For the year ended December 31, 2004, the Fund achieved a daily correlation of more than 0.99 to its benchmark of the daily price performance of the S&P 500/Barra Growth Index. The effects of compounding may cause the longer-term correlation of the Fund to its benchmark to diminish.(1) (1) 1.00 EQUALS PERFECT CORRELATION. THIS CALCULATION IS BASED ON THE DAILY PRICE RETURN OF AN INDEX. CUMULATIVE FUND PERFORMANCE: MAY 3, 2004 - DECEMBER 31, 2004 [THE FOLLOWING TABLE WAS REPRESENTED AS A LINE CHART IN THE PRINTED MATERIAL.] DATE LARGE-CAP GROWTH FUND S&P 500/BARRA GROWTH INDEX - ---- --------------------- -------------------------- 5/3/2004 10,000 10,000 5/4/2004 10,004 10,011 5/5/2004 10,024 10,030 5/6/2004 9,984 9,991 5/7/2004 9,908 9,913 5/8/2004 9,908 9,913 5/9/2004 9,908 9,913 5/10/2004 9,852 9,855 5/11/2004 9,916 9,921 5/12/2004 9,896 9,897 5/13/2004 9,880 9,880 5/14/2004 9,848 9,846 5/15/2004 9,848 9,846 5/16/2004 9,848 9,846 5/17/2004 9,760 9,761 5/18/2004 9,820 9,820 5/19/2004 9,784 9,780 5/20/2004 9,788 9,781 5/21/2004 9,816 9,814 5/22/2004 9,816 9,814 5/23/2004 9,816 9,814 5/24/2004 9,800 9,799 5/25/2004 9,956 9,954 5/26/2004 9,980 9,980 5/27/2004 10,064 10,064 5/28/2004 10,048 10,050 5/29/2004 10,048 10,050 5/30/2004 10,048 10,050 5/31/2004 10,048 10,050 6/1/2004 10,056 10,056 6/2/2004 10,084 10,083 6/3/2004 10,016 10,017 6/4/2004 10,068 10,069 6/5/2004 10,068 10,069 6/6/2004 10,068 10,069 6/7/2004 10,228 10,230 6/8/2004 10,260 10,263 6/9/2004 10,164 10,163 6/10/2004 10,192 10,195 6/11/2004 10,192 10,195 6/12/2004 10,192 10,195 6/13/2004 10,192 10,195 6/14/2004 10,116 10,115 6/15/2004 10,180 10,179 6/16/2004 10,180 10,179 6/17/2004 10,148 10,146 6/18/2004 10,164 10,163 6/19/2004 10,164 10,163 6/20/2004 10,164 10,163 6/21/2004 10,116 10,122 6/22/2004 10,160 10,162 6/23/2004 10,240 10,247 6/24/2004 10,200 10,205 6/25/2004 10,124 10,125 6/26/2004 10,124 10,125 6/27/2004 10,124 10,125 6/28/2004 10,128 10,133 6/29/2004 10,168 10,174 6/30/2004 10,200 10,207 7/1/2004 10,080 10,086 7/2/2004 10,032 10,036 7/3/2004 10,032 10,036 7/4/2004 10,032 10,036 7/5/2004 10,032 10,036 7/6/2004 9,944 9,953 7/7/2004 9,960 9,970 7/8/2004 9,884 9,891 7/9/2004 9,920 9,930 7/10/2004 9,920 9,930 7/11/2004 9,920 9,930 7/12/2004 9,920 9,930 7/13/2004 9,928 9,941 7/14/2004 9,880 9,895 7/15/2004 9,836 9,852 7/16/2004 9,764 9,782 7/17/2004 9,764 9,782 7/18/2004 9,764 9,782 7/19/2004 9,740 9,760 7/20/2004 9,820 9,838 7/21/2004 9,680 9,699 7/22/2004 9,720 9,737 7/23/2004 9,576 9,594 7/24/2004 9,576 9,594 7/25/2004 9,576 9,594 7/26/2004 9,548 9,568 7/27/2004 9,644 9,667 7/28/2004 9,644 9,664 7/29/2004 9,676 9,697 7/30/2004 9,696 9,719 7/31/2004 9,696 9,719 8/1/2004 9,696 9,719 8/2/2004 9,740 9,764 8/3/2004 9,652 9,674 8/4/2004 9,664 9,685 8/5/2004 9,484 9,512 8/6/2004 9,324 9,354 8/7/2004 9,324 9,354 8/8/2004 9,324 9,354 8/9/2004 9,332 9,361 8/10/2004 9,456 9,489 8/11/2004 9,432 9,458 8/12/2004 9,332 9,356 8/13/2004 9,352 9,379 8/14/2004 9,352 9,379 8/15/2004 9,352 9,379 8/16/2004 9,460 9,487 8/17/2004 9,484 9,513 8/18/2004 9,612 9,641 8/19/2004 9,572 9,597 8/20/2004 9,616 9,644 8/21/2004 9,616 9,644 8/22/2004 9,616 9,644 8/23/2004 9,616 9,633 8/24/2004 9,620 9,636 8/25/2004 9,696 9,716 8/26/2004 9,688 9,708 8/27/2004 9,716 9,735 8/28/2004 9,716 9,735 8/29/2004 9,716 9,735 8/30/2004 9,628 9,647 8/31/2004 9,656 9,675 9/1/2004 9,684 9,703 9/2/2004 9,796 9,816 9/3/2004 9,732 9,753 9/4/2004 9,732 9,753 9/5/2004 9,732 9,753 9/6/2004 9,732 9,753 9/7/2004 9,776 9,810 9/8/2004 9,752 9,783 9/9/2004 9,764 9,800 9/10/2004 9,820 9,861 9/11/2004 9,820 9,861 9/12/2004 9,820 9,861 9/13/2004 9,840 9,881 9/14/2004 9,868 9,910 9/15/2004 9,792 9,832 9/16/2004 9,784 9,825 9/17/2004 9,832 9,876 9/18/2004 9,832 9,876 9/19/2004 9,832 9,876 9/20/2004 9,772 9,818 9/21/2004 9,804 9,852 9/22/2004 9,656 9,698 9/23/2004 9,628 9,667 9/24/2004 9,628 9,653 9/25/2004 9,628 9,653 9/26/2004 9,628 9,653 9/27/2004 9,572 9,595 9/28/2004 9,632 9,655 9/29/2004 9,700 9,723 9/30/2004 9,660 9,684 10/1/2004 9,804 9,834 10/2/2004 9,804 9,834 10/3/2004 9,804 9,834 10/4/2004 9,836 9,865 10/5/2004 9,832 9,862 10/6/2004 9,884 9,916 10/7/2004 9,756 9,785 10/8/2004 9,652 9,682 10/9/2004 9,652 9,682 10/10/2004 9,652 9,682 10/11/2004 9,680 9,714 10/12/2004 9,660 9,690 10/13/2004 9,612 9,644 10/14/2004 9,544 9,575 10/15/2004 9,580 9,613 10/16/2004 9,580 9,613 10/17/2004 9,580 9,613 10/18/2004 9,664 9,695 10/19/2004 9,596 9,627 10/20/2004 9,612 9,643 10/21/2004 9,644 9,675 10/22/2004 9,520 9,551 10/23/2004 9,520 9,551 10/24/2004 9,520 9,551 10/25/2004 9,484 9,517 10/26/2004 9,604 9,636 10/27/2004 9,772 9,807 10/28/2004 9,788 9,822 10/29/2004 9,792 9,828 10/30/2004 9,792 9,828 10/31/2004 9,792 9,828 11/1/2004 9,780 9,814 11/2/2004 9,788 9,824 11/3/2004 9,908 9,943 11/4/2004 10,048 10,084 11/5/2004 10,100 10,139 11/6/2004 10,100 10,139 11/7/2004 10,100 10,139 11/8/2004 10,100 10,140 11/9/2004 10,100 10,137 11/10/2004 10,072 10,104 11/11/2004 10,164 10,201 11/12/2004 10,248 10,285 11/13/2004 10,248 10,285 11/14/2004 10,248 10,285 11/15/2004 10,272 10,308 11/16/2004 10,200 10,235 11/17/2004 10,260 10,293 11/18/2004 10,276 10,312 11/19/2004 10,140 10,176 11/20/2004 10,140 10,176 11/21/2004 10,140 10,176 11/22/2004 10,172 10,210 11/23/2004 10,136 10,175 11/24/2004 10,172 10,211 11/25/2004 10,172 10,211 11/26/2004 10,168 10,209 11/27/2004 10,168 10,209 11/28/2004 10,168 10,209 11/29/2004 10,140 10,177 11/30/2004 10,084 10,124 12/1/2004 10,264 10,302 12/2/2004 10,296 10,338 12/3/2004 10,308 10,352 12/4/2004 10,308 10,352 12/5/2004 10,308 10,352 12/6/2004 10,284 10,327 12/7/2004 10,172 10,216 12/8/2004 10,240 10,282 12/9/2004 10,296 10,339 12/10/2004 10,280 10,322 12/11/2004 10,280 10,322 12/12/2004 10,280 10,322 12/13/2004 10,360 10,405 12/14/2004 10,408 10,453 12/15/2004 10,416 10,462 12/16/2004 10,416 10,460 12/17/2004 10,304 10,349 12/18/2004 10,304 10,349 12/19/2004 10,304 10,349 12/20/2004 10,320 10,365 12/21/2004 10,404 10,447 12/22/2004 10,432 10,470 12/23/2004 10,440 10,479 12/24/2004 10,440 10,479 12/25/2004 10,440 10,479 12/26/2004 10,440 10,479 12/27/2004 10,384 10,424 12/28/2004 10,456 10,497 12/29/2004 10,448 10,489 12/30/2004 10,447 10,490 12/31/2004 10,426 10,471 AVERAGE ANNUAL TOTAL RETURNS FOR THE PERIOD ENDED 12/31/04 - -------------------------------------------------------------------------------- SINCE INCEPTION (05/03/04) - -------------------------------------------------------------------------------- LARGE-CAP GROWTH FUND 4.26% S&P 500/BARRA GROWTH INDEX 4.71% - -------------------------------------------------------------------------------- THE RETURNS PRESENTED ABOVE DO NOT REFLECT THE EFFECTS OF TAXES. PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS. THE S&P 500/BARRA GROWTH INDEX IS AN UNMANAGED STOCK INDEX AND, UNLIKE THE FUND, HAS NO MANAGEMENT FEES OR OTHER OPERATING EXPENSES TO REDUCE ITS REPORTED RETURNS. RETURNS ARE HISTORICAL AND INCLUDE CHANGES IN PRINCIPAL AND REINVESTED DIVIDENDS AND CAPITAL GAINS. HOLDINGS DIVERSIFICATION (MARKET EXPOSURE AS % OF NET ASSETS) [THE FOLLOWING TABLE WAS REPRESENTED AS A BAR CHART IN THE PRINTED MATERIAL.] LARGE-CAP GROWTH FUND S&P 500/BARRA GROWTH INDEX --------------------- -------------------------- OTHER 6.2% 6.2% INFORMATION TECHNOLOGY 24.2% 24.2% CONSUMER STAPLES 18.3% 18.5% HEALTH CARE 17.6% 17.6% INDUSTRIALS 15.5% 15.8% CONSUMER DISCRETIONARY 10.2% 10.4% ENERGY 7.5% 7.3% "Holdings Diversification (Market Exposure as % of Net Assets)" excludes any temporary cash investments. TEN LARGEST HOLDINGS (% OF TOTAL NET ASSETS) - ------------------------------------------------------ General Electric Co. 6.9% Exxon Mobil Corp. 5.9% Microsoft Corp. 5.2% Wal-Mart Stores, Inc. 4.0% Johnson & Johnson 3.4% International Business Machines Corp. 2.9% Intel Corp. 2.7% Procter & Gamble Co. 2.5% Cisco Systems, Inc. 2.3% Altria Group, Inc. 2.3% - ------------------------------------------------------ Top Ten Total 38.1% - ------------------------------------------------------ "Ten Largest Holdings" excludes any temporary cash investments and equity index products. See Notes to Financial Statements. 28 | THE RYDEX VARIABLE TRUST ANNUAL REPORT PERFORMANCE REPORTS AND FUND PROFILES (CONTINUED) - -------------------------------------------------------------------------------- SECTOR ROTATION FUND OBJECTIVE: Seeks long term capital appreciation. Inception: May 1, 2002 In 2004, the Fund's value and growth exposures were comparable to the S&P 500 Index's, and Rydex Sector Rotation Fund's return of 10.71% fell between the Index's price return of 8.99% and total return of 10.89%. Sector overweights in internet software and services, hotels, restaurants and leisure, energy equipment and services and building products were beneficial to performance, as were underweights in semiconductors, pharmaceuticals and media sectors, which struggled in 2004. Being at the right place at the wrong time detracted from performance, as the Fund owned securities in some sectors that performed well, such as construction and engineering and personal products, at the wrong time. In general, the smaller the capitalization, the better the performer in 2004, and value generally bested growth. CUMULATIVE FUND PERFORMANCE: MAY 1, 2002 - DECEMBER 31, 2004 [THE FOLLOWING TABLE WAS REPRESENTED BY A LINE GRAPH IN THE PRINTED MATERIAL.] SECTOR ROTATION DATE FUND S&P 500 INDEX - ---- --------------- ------------- 5/1/2002 10,000 10,000 5/31/2002 9,860 9,838 6/30/2002 9,400 9,137 7/31/2002 8,520 8,425 8/31/2002 8,410 8,480 9/30/2002 7,740 7,559 10/31/2002 7,830 8,224 11/30/2002 8,240 8,708 12/31/2002 7,760 8,196 1/31/2003 7,520 7,982 2/28/2003 7,410 7,862 3/31/2003 7,550 7,938 4/30/2003 7,990 8,592 5/31/2003 8,710 9,045 6/30/2003 8,660 9,160 7/31/2003 8,940 9,322 8/31/2003 9,390 9,503 9/30/2003 9,140 9,403 10/31/2003 9,870 9,935 11/30/2003 9,960 10,022 12/31/2003 10,080 10,547 1/31/2004 10,410 10,741 2/29/2004 10,590 10,890 3/31/2004 10,370 10,726 4/30/2004 9,700 10,558 5/31/2004 9,820 10,703 6/30/2004 10,130 10,911 7/31/2004 9,660 10,550 8/31/2004 9,570 10,592 9/30/2004 9,990 10,707 10/31/2004 10,200 10,871 11/30/2004 10,790 11,310 12/31/2004 11,160 11,695 AVERAGE ANNUAL TOTAL RETURNS FOR THE PERIOD ENDED 12/31/04 - -------------------------------------------------------------------------------- SINCE ONE INCEPTION YEAR (05/01/02) - -------------------------------------------------------------------------------- SECTOR ROTATION FUND 10.71% 4.20% S&P 500 INDEX 10.89% 6.04% - -------------------------------------------------------------------------------- THE RETURNS PRESENTED ABOVE DO NOT REFLECT THE EFFECTS OF TAXES. PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS. THE S&P 500 INDEX IS AN UNMANGED STOCK INDEX AND, UNLIKE THE FUND, HAS NO MANAGEMENT FEES OR OTHER OPERATING EXPENSES TO REDUCE ITS REPORTED RETURNS. RETURNS ARE HISTORICAL AND INCLUDE CHANGES IN PRINCIPAL AND REINVESTED DIVIDENDS AND CAPITAL GAINS. HOLDINGS DIVERSIFICATION (MARKET EXPOSURE AS % OF NET ASSETS) [THE FOLLOWING TABLE WAS REPRESENTED AS A BAR CHART IN THE PRINTED MATERIAL.] SECTOR ROTATION FUND UTILITIES 6.52% HEALTH CARE 5.87% MATERIALS 6.68% INFORMATION TECHNOLOGY 8.72% ENERGY 14.13% CONSUMER DISCRETIONARY 15.87% INDUSTRIALS 42.21% "Holdings Diversification (Market Exposure as % of Net Assets)" excludes any temporary cash investments. TEN LARGEST HOLDINGS (% OF TOTAL NET ASSETS) - ------------------------------------------------------ Yahoo!, Inc. 4.2% eBay, Inc. 2.7% United Parcel Service, Inc. - Class B 2.4% Masco Corp. 2.3% W.W. Grainger, Inc. 1.8% American Standard Cos., Inc. 1.5% Fastenal Co. 1.5% InterActiveCorp 1.4% VeriSign, Inc. 1.4% Amazon.Com, Inc. 1.4% - ------------------------------------------------------ Top Ten Total 20.6% - ------------------------------------------------------ "Ten Largest Holdings" excludes any temporary cash investments and equity index products. See Notes to Financial Statements. THE RYDEX VARIABLE TRUST ANNUAL REPORT | 29 PERFORMANCE REPORTS AND FUND PROFILES (CONTINUED) - -------------------------------------------------------------------------------- U.S. GOVERNMENT MONEY MARKET FUND OBJECTIVE: To provide security of principal, high current income, and liquidity. Inception: May 7, 1997 AVERAGE ANNUAL TOTAL RETURNS FOR THE PERIOD ENDED 12/31/04 - -------------------------------------------------------------------------------- SINCE ONE FIVE INCEPTION YEAR YEAR (05/07/97) - -------------------------------------------------------------------------------- U.S. GOVERNMENT MONEY MARKET FUND 0.23% 1.72% 2.30% - -------------------------------------------------------------------------------- HOLDINGS DIVERSIFICATION (MARKET EXPOSURE AS % OF NET ASSETS) [THE FOLLOWING TABLE WAS REPRESENTED AS A BAR CHART IN THE PRINTED MATERIAL.] U.S. GOVERNMENT MONEY MARKET FUND FEDERAL HOME LOAN BANK-FADN 25.6% FREDDIE MAC-FADN 25.5% FANNIE MAE-FADN 18.5% FARMER MAC-FADN 14.2% REPURCHASE AGREEMENTS 10.2% FEDERAL FARM CREDIT BANK-FADN 4.7% FEDERAL AGENCY BONDS 2.3% FADN - Federal Agency Discount Notes The fund invests principally in U.S. Government securities. See Notes to Financial Statements. 30 | THE RYDEX VARIABLE TRUST ANNUAL REPORT PERFORMANCE REPORTS AND FUND PROFILES (CONTINUED) - -------------------------------------------------------------------------------- BANKING FUND OBJECTIVE: Seeks capital appreciation by investing in companies that are involved in the banking sector, including commercial banks (and their holding companies) and savings-and-loan institutions. Inception: May 2, 2001 Increases in the Fed funds rates during the second half of 2004 had minimal to little effect on Rydex Banking Fund, which outperformed the S&P 500 Index for the fourth consecutive year. Diversified banks led the outperformers in this sector, and most sub-industries also recorded gains that beat the Index. The exceptions were asset management and custody banks, with the former enduring another year of investigations into trading practices at some firms by the SEC and various states' attorney generals. Rydex Banking Fund returned 14.74% during the period. Because large-cap banks did well, the Fund's modified cap weight (less emphasis of the large-cap names) lessened performance. CUMULATIVE FUND PERFORMANCE: MAY 2, 2001 - DECEMBER 31, 2004 [THE FOLLOWING TABLE WAS REPRESENTED BY A LINE GRAPH IN THE PRINTED MATERIAL.] DATE BANKING FUND S&P 500 INDEX - ---- ------------ ------------- 5/2/2001 10,000 10,000 5/31/2001 10,448 9,924 6/30/2001 10,464 9,682 7/31/2001 10,636 9,587 8/31/2001 10,204 8,987 9/30/2001 9,676 8,261 10/31/2001 9,124 8,419 11/30/2001 9,812 9,065 12/31/2001 10,084 9,144 1/31/2002 10,216 9,011 2/28/2002 10,248 8,837 3/31/2002 10,984 9,169 4/30/2002 11,344 8,613 5/31/2002 11,548 8,550 6/30/2002 11,148 7,941 7/31/2002 10,508 7,322 8/31/2002 10,840 7,370 9/30/2002 9,604 6,569 10/31/2002 10,017 7,147 11/30/2002 10,178 7,568 12/31/2002 10,005 7,123 1/31/2003 10,021 6,937 2/28/2003 9,897 6,832 3/31/2003 9,604 6,899 4/30/2003 10,410 7,467 5/31/2003 11,128 7,860 6/30/2003 11,096 7,961 7/31/2003 11,561 8,101 8/31/2003 11,561 8,259 9/30/2003 11,559 8,171 10/31/2003 12,654 8,634 11/30/2003 12,974 8,710 12/31/2003 13,181 9,166 1/31/2004 13,436 9,335 2/29/2004 13,830 9,464 3/31/2004 13,603 9,322 4/30/2004 12,929 9,175 5/31/2004 13,590 9,301 6/30/2004 13,566 9,482 7/31/2004 13,526 9,168 8/31/2004 13,984 9,205 9/30/2004 14,069 9,305 10/31/2004 14,298 9,447 11/30/2004 14,731 9,829 12/31/2004 15,123 10,164 AVERAGE ANNUAL TOTAL RETURNS FOR THE PERIOD ENDED 12/31/04 - -------------------------------------------------------------------------------- SINCE ONE INCEPTION YEAR (05/02/01) - -------------------------------------------------------------------------------- BANKING FUND 14.74% 11.95% S&P 500 INDEX 10.89% 0.44% - -------------------------------------------------------------------------------- THE RETURNS PRESENTED ABOVE DO NOT REFLECT THE EFFECTS OF TAXES. PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS. THE S&P 500 INDEX IS AN UNMANAGED STOCK INDEX AND, UNLIKE THE FUND, HAS NO MANAGEMENT FEES OR OTHER OPERATING EXPENSES TO REDUCE ITS REPORTED RETURNS. RETURNS ARE HISTORICAL AND INCLUDE CHANGES IN PRINCIPAL AND REINVESTED DIVIDENDS AND CAPITAL GAINS. INDUSTRY DIVERSIFICATION (MARKET EXPOSURE AS % OF NET ASSETS) [THE FOLLOWING TABLE WAS REPRESENTED BY A PIE CHART IN THE PRINTED MATERIAL.] BANKING FUND THRIFTS & MORTGAGE FINANCE 35% COMMERCIAL BANKS 60% OTHER 5% "Industry Diversification (Market Exposure as % of Net Assets)" excludes any temporary cash investments. TEN LARGEST HOLDINGS (% OF TOTAL NET ASSETS) - ------------------------------------------------------ JPMorgan Chase & Co. 4.7% Fannie Mae 4.3% Bank of America Corp. 4.1% Washington Mutual, Inc. 3.5% Freddie Mac 3.4% Fifth Third Bancorp 3.1% National City Corp. 3.0% Regions Financial Corp. 2.8% Wells Fargo & Co. 2.7% Keycorp 2.7% - ------------------------------------------------------ Top Ten Total 34.3% - ------------------------------------------------------ "Ten Largest Holdings" excludes any temporary cash investments and equity index products. See Notes to Financial Statements. THE RYDEX VARIABLE TRUST ANNUAL REPORT | 31 PERFORMANCE REPORTS AND FUND PROFILES (CONTINUED) - -------------------------------------------------------------------------------- BASIC MATERIALS FUND OBJECTIVE: Seeks capital appreciation by investing in companies engaged in the mining, manufacture or sale of basic materials, such as lumber, steel, iron, aluminum, concrete, chemicals and other basic building and manufacturing materials. Inception: May 2, 2001 Basic materials sharply outgained the S&P 500 Index during the period, as a maturing economic recovery and overseas demand for products helped boost this sector. While demand from China continued unabated during 2004, steady growth in the U.S. economy also helped basic materials companies. Construction materials and chemicals led the gainers, with these industries advancing 28.9% and 21.1%, respectively. Metal stocks dragged on performance, partly due to a pull-back from torrid performance in 2003 and sporadic concern that China's demand for metals would soon abate. Rydex Basic Materials Fund returned 20.83% during the period. CUMULATIVE FUND PERFORMANCE: MAY 2, 2001 - DECEMBER 31, 2004 [THE FOLLOWING TABLE WAS REPRESENTED BY A LINE GRAPH IN THE PRINTED MATERIAL.] DATE BASIC MATERIALS FUND S&P 500 INDEX - ---- -------------------- ------------- 5/2/2001 10,000 10,000 5/31/2001 10,304 9,924 6/30/2001 9,840 9,682 7/31/2001 9,788 9,587 8/31/2001 9,764 8,987 9/30/2001 8,668 8,261 10/31/2001 8,868 8,419 11/30/2001 9,820 9,065 12/31/2001 9,684 9,144 1/31/2002 9,804 9,011 2/28/2002 10,316 8,837 3/31/2002 10,672 9,169 4/30/2002 10,108 8,613 5/31/2002 10,520 8,550 6/30/2002 10,256 7,941 7/31/2002 9,020 7,322 8/31/2002 9,000 7,370 9/30/2002 7,800 6,569 10/31/2002 8,016 7,147 11/30/2002 8,802 7,568 12/31/2002 8,450 7,123 1/31/2003 7,960 6,937 2/28/2003 7,668 6,832 3/31/2003 7,539 6,899 4/30/2003 8,137 7,467 5/31/2003 8,554 7,860 6/30/2003 8,606 7,961 7/31/2003 9,079 8,101 8/31/2003 9,420 8,259 9/30/2003 9,098 8,171 10/31/2003 9,936 8,634 11/30/2003 10,161 8,710 12/31/2003 11,108 9,166 1/31/2004 10,735 9,335 2/29/2004 11,244 9,464 3/31/2004 11,184 9,322 4/30/2004 10,710 9,175 5/31/2004 10,943 9,301 6/30/2004 11,709 9,482 7/31/2004 11,372 9,168 8/31/2004 11,553 9,205 9/30/2004 12,168 9,305 10/31/2004 11,967 9,447 11/30/2004 13,195 9,829 12/31/2004 13,421 10,164 AVERAGE ANNUAL TOTAL RETURNS FOR THE PERIOD ENDED 12/31/04 - -------------------------------------------------------------------------------- SINCE ONE INCEPTION YEAR (05/02/01) - -------------------------------------------------------------------------------- BASIC MATERIALS FUND 20.83% 8.36% S&P 500 INDEX 10.89% 0.44% - -------------------------------------------------------------------------------- THE RETURNS PRESENTED ABOVE DO NOT REFLECT THE EFFECTS OF TAXES. PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS. THE S&P 500 INDEX IS AN UNMANAGED STOCK INDEX AND, UNLIKE THE FUND, HAS NO MANAGEMENT FEES OR OTHER OPERATING EXPENSES TO REDUCE ITS REPORTED RETURNS. RETURNS ARE HISTORICAL AND INCLUDE CHANGES IN PRINCIPAL AND REINVESTED DIVIDENDS AND CAPITAL GAINS. INDUSTRY DIVERSIFICATION (MARKET EXPOSURE AS % OF NET ASSETS) [THE FOLLOWING TABLE WAS REPRESENTED BY A PIE CHART IN THE PRINTED MATERIAL.] BASIC MATERIALS FUND CONSTRUCTION MATERIALS 6% CHEMICALS 44% METALS & MINING 25% PAPER & FOREST PRODUCTS 13% CONTAINERS & PACKAGING 12% "Industry Diversification (Market Exposure as % of Net Assets)" excludes any temporary cash investments. TEN LARGEST HOLDINGS (% OF TOTAL NET ASSETS) - ------------------------------------------------------ EI Du Pont de Nemours & Co. 5.6% Monsanto Co. 3.1% Dow Chemical Co. 3.1% MeadWestvaco Corp. 2.9% Alcoa, Inc. 2.7% Scotts Co. - Class A 2.4% Ecolab, Inc. 2.4% Praxair, Inc. 2.3% Newmont Mining Corp. 2.3% Air Products & Chemicals, Inc. 2.2% - ------------------------------------------------------ Top Ten Total 29.0% - ------------------------------------------------------ "Ten Largest Holdings" excludes any temporary cash investments and equity index products. See Notes to Financial Statements. 32 | THE RYDEX VARIABLE TRUST ANNUAL REPORT PERFORMANCE REPORTS AND FUND PROFILES (CONTINUED) - -------------------------------------------------------------------------------- BIOTECHNOLOGY FUND OBJECTIVE: Seeks capital appreciation by investing in companies that are involved in the biotechnology industry, including companies involved in research and development, genetic or other biological engineering and in the design, manufacture or sale of related biotechnology products or services. Inception: May 2, 2001 The biotechnology industry's performance was basically flat during 2004, gaining just 1.1%. Political pressure on pharmaceutical companies to lower prescription drug prices leaked down to the biotechnology industry, preventing any momentum. Chiron led the list of underperformers, suffering a financial and public relations black eye in October when Great Britain's regulators pulled the company's license after discovering non-sterile batches of flu vaccine. This led to a flu vaccine shortage in the U.S. OSI Pharmaceutical and Eyetech Pharmaceutical topped the list of winners. OSI showed in clinical trials that its Tarceva drug could lengthen the lives of lung cancer patients, while Eyetech received FDA approval in August for Macugen, a drug that helps improve the vision of people with macular degeneration, an eye disorder. Rydex Biotechnology Fund was also relatively flat during the period, returning 1.10%. The Fund's methodology resulted in an underweight of Biogen, which subtracted from fund performance relative to a cap-weighted index. CUMULATIVE FUND PERFORMANCE: MAY 2, 2001 - DECEMBER 31, 2004 [THE FOLLOWING TABLE WAS REPRESENTED BY A LINE GRAPH IN THE PRINTED MATERIAL.] DATE BIOTECHNOLOGY FUND S&P 500 INDEX - ---- ------------------ ------------- 5/2/2001 10,000 10,000 5/31/2001 10,564 9,924 6/30/2001 10,828 9,682 7/31/2001 9,588 9,587 8/31/2001 9,664 8,987 9/30/2001 8,304 8,261 10/31/2001 9,588 8,419 11/30/2001 10,448 9,065 12/31/2001 9,868 9,144 1/31/2002 8,432 9,011 2/28/2002 8,060 8,837 3/31/2002 8,332 9,169 4/30/2002 7,072 8,613 5/31/2002 6,348 8,550 6/30/2002 5,604 7,941 7/31/2002 5,676 7,322 8/31/2002 5,424 7,370 9/30/2002 5,196 6,569 10/31/2002 5,666 7,147 11/30/2002 6,063 7,568 12/31/2002 5,393 7,123 1/31/2003 5,244 6,937 2/28/2003 5,124 6,832 3/31/2003 5,401 6,899 4/30/2003 5,971 7,467 5/31/2003 7,010 7,860 6/30/2003 6,813 7,961 7/31/2003 7,423 8,101 8/31/2003 7,303 8,259 9/30/2003 7,287 8,171 10/31/2003 7,283 8,634 11/30/2003 7,371 8,710 12/31/2003 7,664 9,166 1/31/2004 8,037 9,335 2/29/2004 8,077 9,464 3/31/2004 7,953 9,322 4/30/2004 8,041 9,175 5/31/2004 7,833 9,301 6/30/2004 7,800 9,482 7/31/2004 7,006 9,168 8/31/2004 7,038 9,205 9/30/2004 7,367 9,305 10/31/2004 7,086 9,447 11/30/2004 7,367 9,829 12/31/2004 7,748 10,164 AVERAGE ANNUAL TOTAL RETURNS FOR THE PERIOD ENDED 12/31/04 - -------------------------------------------------------------------------------- SINCE ONE INCEPTION YEAR (05/02/01) - -------------------------------------------------------------------------------- BIOTECHNOLOGY FUND 1.10% -6.72% S&P 500 INDEX 10.89% 0.44% - -------------------------------------------------------------------------------- THE RETURNS PRESENTED ABOVE DO NOT REFLECT THE EFFECTS OF TAXES. PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS. THE S&P 500 INDEX IS AN UNMANAGED STOCK INDEX AND, UNLIKE THE FUND, HAS NO MANAGEMENT FEES OR OTHER OPERATING EXPENSES TO REDUCE ITS REPORTED RETURNS. RETURNS ARE HISTORICAL AND INCLUDE CHANGES IN PRINCIPAL AND REINVESTED DIVIDENDS AND CAPITAL GAINS. INDUSTRY DIVERSIFICATION (MARKET EXPOSURE AS % OF NET ASSETS) [THE FOLLOWING TABLE WAS REPRESENTED BY A PIE CHART IN THE PRINTED MATERIAL.] BIOTECHNOLOGY FUND BIOTECHNOLOGY 100% "Industry Diversification (Market Exposure as % of Net Assets)" excludes any temporary cash investments. TEN LARGEST HOLDINGS (% OF TOTAL NET ASSETS) - ------------------------------------------------------ Amgen, Inc. 10.9% Genentech, Inc. 8.3% Biogen Idec, Inc. 5.6% Genzyme Corp. 4.9% Gilead Sciences, Inc. 4.9% Chiron Corp. 3.6% Applera Corp. - Applied Biosystems Group 3.1% Invitrogen Corp. 3.1% Cephalon, Inc. 2.9% Millennium Pharmaceuticals, Inc. 2.7% - ------------------------------------------------------ Top Ten Total 50.0% - ------------------------------------------------------ "Ten Largest Holdings" excludes any temporary cash investments and equity index products. See Notes to Financial Statements. THE RYDEX VARIABLE TRUST ANNUAL REPORT | 33 PERFORMANCE REPORTS AND FUND PROFILES (CONTINUED) - -------------------------------------------------------------------------------- CONSUMER PRODUCTS FUND OBJECTIVE: Seeks capital appreciation by investing in companies engaged in manufacturing finished goods and services both domestically and internationally. Inception: May 29, 2001 Although typically a defensive holding, the consumer products sector outgained the S&P 500 Index, returning 13.30% in 2004. Tobacco firms and alcohol manufacturers and producers led the list of gainers. Despite a May filing of a $280 billion racketeering charge by the Department of Labor, the tobacco industry gained 26% for the period. Mondavi and Coors returned 45% and 36% respectively, helping to propel the alcohol industry. On the whole, beverages returned only 2% in 2004, as soft drink giants Pepsi and Coke both felt the effects of slowing soft drink consumption. The Fund's methodology caused a significant overweight to Food Products and underweight to Food Retailers, which boosted performance. Rydex Consumer Products Fund returned 13.30%. CUMULATIVE FUND PERFORMANCE: MAY 29, 2001 - DECEMBER 31, 2004 [THE FOLLOWING TABLE WAS REPRESENTED BY A LINE GRAPH IN THE PRINTED MATERIAL.] CONSUMER PRODUCTS DATE FUND S&P 500 INDEX - ---- ----------------- ------------- 5/29/2001 10,000 10,000 5/31/2001 9,860 9,908 6/30/2001 9,604 9,667 7/31/2001 9,664 9,572 8/31/2001 9,968 8,973 9/30/2001 9,716 8,248 10/31/2001 9,752 8,405 11/30/2001 10,044 9,050 12/31/2001 10,128 9,129 1/31/2002 10,216 8,996 2/28/2002 10,624 8,823 3/31/2002 10,984 9,155 4/30/2002 11,108 8,599 5/31/2002 11,208 8,536 6/30/2002 10,596 7,928 7/31/2002 10,124 7,310 8/31/2002 10,268 7,358 9/30/2002 9,446 6,558 10/31/2002 9,911 7,136 11/30/2002 9,919 7,556 12/31/2002 9,763 7,112 1/31/2003 9,418 6,925 2/28/2003 9,162 6,822 3/31/2003 9,202 6,888 4/30/2003 9,747 7,455 5/31/2003 10,464 7,848 6/30/2003 10,608 7,948 7/31/2003 10,632 8,088 8/31/2003 10,841 8,246 9/30/2003 10,913 8,158 10/31/2003 11,358 8,620 11/30/2003 11,682 8,696 12/31/2003 11,897 9,152 1/31/2004 12,111 9,320 2/29/2004 12,568 9,449 3/31/2004 12,641 9,307 4/30/2004 12,856 9,161 5/31/2004 12,747 9,286 6/30/2004 13,058 9,467 7/31/2004 12,180 9,154 8/31/2004 12,386 9,191 9/30/2004 12,056 9,290 10/31/2004 12,203 9,432 11/30/2004 12,890 9,814 12/31/2004 13,479 10,148 AVERAGE ANNUAL TOTAL RETURNS FOR THE PERIOD ENDED 12/31/04 - -------------------------------------------------------------------------------- SINCE ONE INCEPTION YEAR (05/29/01) - -------------------------------------------------------------------------------- CONSUMER PRODUCTS FUND 13.30% 8.67% S&P 500 INDEX 10.89% 0.41% - -------------------------------------------------------------------------------- THE RETURNS PRESENTED ABOVE DO NOT REFLECT THE EFFECTS OF TAXES. PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS. THE S&P 500 INDEX IS AN UNMANAGED STOCK INDEX AND, UNLIKE THE FUND, HAS NO MANAGEMENT FEES OR OTHER OPERATING EXPENSES TO REDUCE ITS REPORTED RETURNS. RETURNS ARE HISTORICAL AND INCLUDE CHANGES IN PRINCIPAL AND REINVESTED DIVIDENDS AND CAPITAL GAINS. INDUSTRY DIVERSIFICATION (MARKET EXPOSURE AS % OF NET ASSETS) [THE FOLLOWING TABLE WAS REPRESENTED BY A PIE CHART IN THE PRINTED MATERIAL.] CONSUMER PRODUCTS FUND FOOD PRODUCTS 33% BEVERAGES 19% HOUSEHOLD PRODUCTS 16% FOOD & STAPLES RETAILING 13% TOBACCO 10% PERSONAL PRODUCTS 9% "Industry Diversification (Market Exposure as % of Net Assets)" excludes any temporary cash investments. TEN LARGEST HOLDINGS (% OF TOTAL NET ASSETS) - ------------------------------------------------------ Altria Group, Inc. 6.9% Procter & Gamble Co. 6.0% Coca-Cola Co. 5.8% PepsiCo, Inc. 4.8% Anheuser-Busch Cos., Inc. 3.9% Sysco Corp. 3.8% Kimberly-Clark Corp. 3.6% Colgate-Palmolive Co. 3.6% Archer-Daniels-Midland Co. 3.2% Sara Lee Corp. 3.1% - ------------------------------------------------------ Top Ten Total 44.7% - ------------------------------------------------------ "Ten Largest Holdings" excludes any temporary cash investments and equity index products. See Notes to Financial Statements. 34 | THE RYDEX VARIABLE TRUST ANNUAL REPORT PERFORMANCE REPORTS AND FUND PROFILES (CONTINUED) - -------------------------------------------------------------------------------- ELECTRONICS FUND OBJECTIVE: Seeks capital appreciation by investing in companies that are involved in the electronics sector, including semiconductor manufacturers and distributors, and makers and vendors of other electronic components and devices. Inception: August 3, 2001 Concerns about overcapacity weighed on the electronics industry during the first eight months of 2004. Although the industry rebounded in August, it still trailed the S&P 500 Index and most other industries for the year. The S&P 500 Electronic Manufacturing Services Index lost 16.91% and the S&P 500 Electronic Equipment Manufacturer Index lost 2.25%. Rydex Electronics Fund had more smaller stock exposure than these indices and this adversely affected performance when uncertainty clouded the market in the first eight months of the period. Rydex Electronics Fund returned -21.98% during the period. CUMULATIVE FUND PERFORMANCE: AUGUST 3, 2001 - DECEMBER 31, 2004 [THE FOLLOWING TABLE WAS REPRESENTED BY A LINE GRAPH IN THE PRINTED MATERIAL.] DATE ELECTRONICS FUND S&P 500 INDEX - ---- ---------------- ------------- 8/3/2001 10,000 10,000 8/31/2001 8,824 9,347 9/30/2001 6,068 8,592 10/31/2001 7,312 8,756 11/30/2001 8,432 9,427 12/31/2001 8,256 9,510 1/31/2002 8,504 9,371 2/28/2002 7,568 9,190 3/31/2002 8,696 9,536 4/30/2002 7,864 8,958 5/31/2002 7,308 8,892 6/30/2002 5,900 8,258 7/31/2002 5,164 7,615 8/31/2002 4,688 7,665 9/30/2002 3,643 6,832 10/31/2002 4,482 7,433 11/30/2002 5,674 7,871 12/31/2002 4,276 7,408 1/31/2003 4,043 7,214 2/28/2003 4,319 7,106 3/31/2003 4,147 7,175 4/30/2003 4,676 7,766 5/31/2003 5,484 8,175 6/30/2003 5,244 8,279 7/31/2003 5,764 8,425 8/31/2003 6,753 8,590 9/30/2003 6,125 8,498 10/31/2003 7,222 8,979 11/30/2003 7,627 9,058 12/31/2003 7,261 9,533 1/31/2004 7,450 9,708 2/29/2004 7,166 9,843 3/31/2004 6,908 9,695 4/30/2004 6,035 9,542 5/31/2004 6,685 9,673 6/30/2004 6,534 9,861 7/31/2004 5,433 9,535 8/31/2004 4,848 9,574 9/30/2004 4,998 9,677 10/31/2004 5,338 9,825 11/30/2004 5,480 10,223 12/31/2004 5,665 10,571 AVERAGE ANNUAL TOTAL RETURNS FOR THE PERIOD ENDED 12/31/04 - -------------------------------------------------------------------------------- SINCE ONE INCEPTION YEAR (08/03/01) - -------------------------------------------------------------------------------- ELECTRONICS FUND -21.98% -15.35% S&P 500 INDEX 10.89% 1.64% - -------------------------------------------------------------------------------- THE RETURNS PRESENTED ABOVE DO NOT REFLECT THE EFFECTS OF TAXES. PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS. THE S&P 500 INDEX IS AN UNMANAGED STOCK INDEX AND, UNLIKE THE FUND, HAS NO MANAGEMENT FEES OR OTHER OPERATING EXPENSES TO REDUCE ITS REPORTED RETURNS. RETURNS ARE HISTORICAL AND INCLUDE CHANGES IN PRINCIPAL AND REINVESTED DIVIDENDS AND CAPITAL GAINS. INDUSTRY DIVERSIFICATION (MARKET EXPOSURE AS % OF NET ASSETS) [THE FOLLOWING TABLE WAS REPRESENTED BY A PIE CHART IN THE PRINTED MATERIAL.] ELECTRONICS FUND SEMICONDUCTORS & SEMICONDUCTOR EQUIPMENT 100% "Industry Diversification (Market Exposure as % of Net Assets)" excludes any temporary cash investments. TEN LARGEST HOLDINGS (% OF TOTAL NET ASSETS) - ------------------------------------------------------ Intel Corp. 11.6% Texas Instruments, Inc. 5.9% Applied Materials, Inc. 5.4% Micron Technology, Inc. 3.1% Advanced Micro Devices, Inc. 3.0% Broadcom Corp. - Class A 3.0% Lam Research Corp. 2.8% Analog Devices, Inc. 2.6% Kla-Tencor Corp. 2.5% Xilinx, Inc. 2.5% - ------------------------------------------------------ Top Ten Total 42.4% - ------------------------------------------------------ "Ten Largest Holdings" excludes any temporary cash investments and equity index products. See Notes to Financial Statements. THE RYDEX VARIABLE TRUST ANNUAL REPORT | 35 PERFORMANCE REPORTS AND FUND PROFILES (CONTINUED) - -------------------------------------------------------------------------------- ENERGY FUND OBJECTIVE: Seeks capital appreciation by investing in companies involved in the energy field, including the exploration, production and development of oil, gas, coal and alternative sources of energy. Inception: May 29, 2001 Crude oil prices, which surged to a record $55 per barrel in October before falling back somewhat at year-end, helped propel this sector to the stock market's strongest annual returns. Rydex Energy Fund gained 32.27% for the year. The twin pillars of pricing and supply and demand helped drive energy prices during the period. Increased demand for product in Asia, particularly China, helped force prices up. Both potential and real supply disruptions also played a large role in the industry's performance. Sabotage of Iraqi oil facilities, a spate of hurricanes that damaged oil platforms in the Gulf of Mexico, the Russian government's year-long claims to billions in back taxes from one of its largest oil companies, worker unrest in Nigeria and Norway and election uncertainty in Venezuela all played a role in limiting supply during 2004. In short, higher crude oil prices translated to higher profits for energy companies. CUMULATIVE FUND PERFORMANCE: MAY 29, 2001 - DECEMBER 31, 2004 [THE FOLLOWING TABLE WAS REPRESENTED BY A LINE GRAPH IN THE PRINTED MATERIAL.] DATE ENERGY FUND S&P 500 INDEX - ---- ----------- ------------- 5/29/2001 10,000 10,000 5/31/2001 9,984 9,908 6/30/2001 9,188 9,667 7/31/2001 9,040 9,572 8/31/2001 8,796 8,973 9/30/2001 8,088 8,248 10/31/2001 8,324 8,405 11/30/2001 7,984 9,050 12/31/2001 8,440 9,129 1/31/2002 8,052 8,996 2/28/2002 8,304 8,823 3/31/2002 9,060 9,155 4/30/2002 8,768 8,599 5/31/2002 8,376 8,536 6/30/2002 8,104 7,928 7/31/2002 7,072 7,310 8/31/2002 7,200 7,358 9/30/2002 6,648 6,558 10/31/2002 6,980 7,136 11/30/2002 7,180 7,556 12/31/2002 7,300 7,112 1/31/2003 7,040 6,925 2/28/2003 7,140 6,822 3/31/2003 7,052 6,888 4/30/2003 7,120 7,455 5/31/2003 7,972 7,848 6/30/2003 7,900 7,948 7/31/2003 7,504 8,088 8/31/2003 7,916 8,246 9/30/2003 7,748 8,158 10/31/2003 7,876 8,620 11/30/2003 7,980 8,696 12/31/2003 8,980 9,152 1/31/2004 9,100 9,320 2/29/2004 9,576 9,449 3/31/2004 9,556 9,307 4/30/2004 9,752 9,161 5/31/2004 9,616 9,286 6/30/2004 10,252 9,467 7/31/2004 10,536 9,154 8/31/2004 10,300 9,191 9/30/2004 11,290 9,290 10/31/2004 11,330 9,432 11/30/2004 12,294 9,814 12/31/2004 11,878 10,148 AVERAGE ANNUAL TOTAL RETURNS FOR THE PERIOD ENDED 12/31/04 - -------------------------------------------------------------------------------- SINCE ONE INCEPTION YEAR (05/29/01) - -------------------------------------------------------------------------------- ENERGY FUND 32.27% 4.91% S&P 500 INDEX 10.89% 0.41% - -------------------------------------------------------------------------------- THE RETURNS PRESENTED ABOVE DO NOT REFLECT THE EFFECTS OF TAXES. PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS. THE S&P 500 INDEX IS AN UNMANAGED STOCK INDEX AND, UNLIKE THE FUND, HAS NO MANAGEMENT FEES OR OTHER OPERATING EXPENSES TO REDUCE ITS REPORTED RETURNS. RETURNS ARE HISTORICAL AND INCLUDE CHANGES IN PRINCIPAL AND REINVESTED DIVIDENDS AND CAPITAL GAINS. INDUSTRY DIVERSIFICATION (MARKET EXPOSURE AS % OF NET ASSETS) [THE FOLLOWING TABLE WAS REPRESENTED BY A PIE CHART IN THE PRINTED MATERIAL.] ENERGY FUND OIL & GAS 73% ENERGY EQUIPMENT & SERVICES 27% "Industry Diversification (Market Exposure as % of Net Assets)" excludes any temporary cash investments. TEN LARGEST HOLDINGS (% OF TOTAL NET ASSETS) - ------------------------------------------------------ Exxon Mobil Corp. 7.0% BP PLC - SP ADR 4.8% ChevronTexaco Corp. 4.2% ConocoPhillips 4.1% Total SA - SP ADR 3.9% Royal Dutch Petroleum Co. 3.5% Occidental Petroleum Corp. 2.8% Shell Transport & Trading Co. PLC - SP ADR 2.8% Devon Energy Corp. 2.7% El Paso Corp. 2.1% - ------------------------------------------------------ Top Ten Total 37.9% - ------------------------------------------------------ "Ten Largest Holdings" excludes any temporary cash investments and equity index products. See Notes to Financial Statements. 36 | THE RYDEX VARIABLE TRUST ANNUAL REPORT PERFORMANCE REPORTS AND FUND PROFILES (CONTINUED) - -------------------------------------------------------------------------------- ENERGY SERVICES FUND OBJECTIVE: Seeks capital appreciation by investing in companies that are involved in the energy services field, including those that provide services and equipment in the areas of oil, coal and gas exploration and production. Inception: May 2, 2001 Increased demand and, consequently, record high crude oil prices, helped propel the energy services sector to impressive gains during the period. Rydex Energy Services Fund returned a healthy 33.74% in 2004. Typically, higher demand results in increased drilling and refining. However, regulatory roadblocks hindered most attempts at drilling in new oil fields, while U.S. refineries operated near capacity during the year. Energy services companies were able to raise their prices during the period, using extra cash to bolster their balance sheets, buy back shares, pay down debt and increase dividends. CUMULATIVE FUND PERFORMANCE: MAY 2, 2001 - DECEMBER 31, 2004 [THE FOLLOWING TABLE WAS REPRESENTED BY A LINE GRAPH IN THE PRINTED MATERIAL.] DATE ENERGY SERVICES FUND S&P 500 INDEX - ---- -------------------- ------------ 5/2/2001 10,000 10,000 5/31/2001 10,376 9,924 6/30/2001 8,272 9,682 7/31/2001 7,620 9,587 8/31/2001 6,660 8,987 9/30/2001 5,700 8,261 10/31/2001 6,772 8,419 11/30/2001 6,584 9,065 12/31/2001 7,096 9,144 1/31/2002 6,836 9,011 2/28/2002 7,112 8,837 3/31/2002 7,844 9,169 4/30/2002 7,976 8,613 5/31/2002 7,776 8,550 6/30/2002 6,864 7,941 7/31/2002 5,940 7,322 8/31/2002 6,060 7,370 9/30/2002 5,571 6,569 10/31/2002 5,944 7,147 11/30/2002 6,296 7,568 12/31/2002 6,239 7,123 1/31/2003 5,953 6,937 2/28/2003 6,278 6,832 3/31/2003 5,983 6,899 4/30/2003 6,048 7,467 5/31/2003 7,029 7,860 6/30/2003 6,690 7,961 7/31/2003 6,083 8,101 8/31/2003 6,513 8,259 9/30/2003 6,122 8,171 10/31/2003 6,083 8,634 11/30/2003 6,027 8,710 12/31/2003 6,764 9,166 1/31/2004 7,198 9,335 2/29/2004 7,641 9,464 3/31/2004 7,411 9,322 4/30/2004 7,402 9,175 5/31/2004 7,111 9,301 6/30/2004 7,753 9,482 7/31/2004 8,044 9,168 8/31/2004 7,914 9,205 9/30/2004 8,782 9,305 10/31/2004 8,556 9,447 11/30/2004 9,198 9,829 12/31/2004 9,046 10,164 AVERAGE ANNUAL TOTAL RETURNS FOR THE PERIOD ENDED 12/31/04 - -------------------------------------------------------------------------------- SINCE ONE INCEPTION YEAR (05/02/01) - -------------------------------------------------------------------------------- ENERGY SERVICES FUND 33.74% -2.70% S&P 500 INDEX 10.89% 0.44% - -------------------------------------------------------------------------------- THE RETURNS PRESENTED ABOVE DO NOT REFLECT THE EFFECTS OF TAXES. PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS. THE S&P 500 INDEX IS AN UNMANAGED STOCK INDEX AND, UNLIKE THE FUND, HAS NO MANAGEMENT FEES OR OTHER OPERATING EXPENSES TO REDUCE ITS REPORTED RETURNS. RETURNS ARE HISTORICAL AND INCLUDE CHANGES IN PRINCIPAL AND REINVESTED DIVIDENDS AND CAPITAL GAINS. INDUSTRY DIVERSIFICATION (MARKET EXPOSURE AS % OF NET ASSETS) [THE FOLLOWING TABLE WAS REPRESENTED BY A LINE GRAPH IN THE PRINTED MATERIAL.] ENERGY SERVICES FUND ENERGY EQUIPMENT & SERVICES 100% "Industry Diversification (Market Exposure as % of Net Assets)" excludes any temporary cash investments. TEN LARGEST HOLDINGS (% OF TOTAL NET ASSETS) - ------------------------------------------------------ Schlumberger Ltd. 8.2% Halliburton Co. 6.5% Transocean, Inc. 6.2% Baker Hughes, Inc. 5.3% Weatherford International Ltd. 4.6% BJ Services Co. 4.3% Diamond Offshore Drilling, Inc. 3.7% Nabors Industries Ltd. 3.5% Tidewater, Inc. 3.3% ENSCO International, Inc. 3.1% - ------------------------------------------------------ Top Ten Total 48.7% - ------------------------------------------------------ "Ten Largest Holdings" excludes any temporary cash investments and equity index products. See Notes to Financial Statements. THE RYDEX VARIABLE TRUST ANNUAL REPORT | 37 PERFORMANCE REPORTS AND FUND PROFILES (CONTINUED) - -------------------------------------------------------------------------------- FINANCIAL SERVICES FUND OBJECTIVE: Seeks capital appreciation by investing in companies that are involved in the financial services sector. Inception: July 20, 2001 Despite a series of Fed fund rate increases during the latter half of 2004, the financial services sector performed strongly for the year, outperforming the S&P 500 Index. Banks, the worst performing industry in the group, still outperformed the Index. Real estate, consumer finance and life & health insurance were among the leaders of the group. REITs, in particular, remained a popular investment due to their high dividends. Under-performers included investment banking and brokerage, insurance brokers and reinsurance. Both investment and insurance brokers came under fire during 2004 for the way some companies conducted business. Rydex Financial Services Fund handed out a 17.12% return, in part due to its modified cap weight (less emphasis of the large-cap names). CUMULATIVE FUND PERFORMANCE: JULY 20, 2001 - DECEMBER 31, 2004 [THE FOLLOWING TABLE WAS REPRESENTED BY A LINE GRAPH IN THE PRINTED MATERIAL.] FINANCIAL DATE SERVICES FUND S&P 500 INDEX - ---- ------------- ------------- 7/20/2001 10,000 10,000 7/31/2001 10,108 10,005 8/31/2001 9,496 9,378 9/30/2001 8,992 8,621 10/31/2001 8,680 8,785 11/30/2001 9,280 9,459 12/31/2001 9,560 9,542 1/31/2002 9,480 9,403 2/28/2002 9,460 9,222 3/31/2002 10,064 9,568 4/30/2002 9,980 8,988 5/31/2002 9,984 8,922 6/30/2002 9,500 8,287 7/31/2002 8,628 7,641 8/31/2002 8,808 7,691 9/30/2002 7,678 6,855 10/31/2002 8,097 7,458 11/30/2002 8,406 7,897 12/31/2002 8,117 7,433 1/31/2003 7,988 7,239 2/28/2003 7,775 7,130 3/31/2003 7,682 7,199 4/30/2003 8,486 7,792 5/31/2003 8,993 8,203 6/30/2003 9,005 8,307 7/31/2003 9,403 8,454 8/31/2003 9,355 8,619 9/30/2003 9,370 8,527 10/31/2003 9,993 9,010 11/30/2003 10,106 9,089 12/31/2003 10,464 9,566 1/31/2004 10,855 9,741 2/29/2004 11,209 9,877 3/31/2004 11,064 9,728 4/30/2004 10,541 9,575 5/31/2004 10,839 9,706 6/30/2004 10,891 9,895 7/31/2004 10,589 9,567 8/31/2004 10,955 9,606 9/30/2004 11,065 9,710 10/31/2004 11,267 9,859 11/30/2004 11,787 10,258 12/31/2004 12,255 10,607 AVERAGE ANNUAL TOTAL RETURNS FOR THE PERIOD ENDED 12/31/04 - -------------------------------------------------------------------------------- SINCE ONE INCEPTION YEAR (07/20/01) - -------------------------------------------------------------------------------- FINANCIAL SERVICES FUND 17.12% 6.07% S&P 500 INDEX 10.89% 1.72% - -------------------------------------------------------------------------------- THE RETURNS PRESENTED ABOVE DO NOT REFLECT THE EFFECTS OF TAXES. PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS. THE S&P 500 INDEX IS AN UNMANAGED STOCK INDEX AND, UNLIKE THE FUND, HAS NO MANAGEMENT FEES OR OTHER OPERATING EXPENSES TO REDUCE ITS REPORTED RETURNS. RETURNS ARE HISTORICAL AND INCLUDE CHANGES IN PRINCIPAL AND REINVESTED DIVIDENDS AND CAPITAL GAINS. INDUSTRY DIVERSIFICATION (MARKET EXPOSURE AS % OF NET ASSETS) [THE FOLLOWING TABLE WAS REPRESENTED BY A PIE CHART IN THE PRINTED MATERIAL.] FINANCIAL SERVICES FUND COMMERCIAL BANKS 22% INSURANCE 22% REAL ESTATE 17% THRIFTS & MORTGAGE FINANCE 13% DIVERSIFIED FINANCIAL SERVICES 10% CAPITAL MARKETS 9% CONSUMER FINANCE 7% "Industry Diversification (Market Exposure as % of Net Assets)" excludes any temporary cash investments. TEN LARGEST HOLDINGS (% OF TOTAL NET ASSETS) - ------------------------------------------------------ Citigroup, Inc. 3.4% JPMorgan Chase & Co. 2.7% American Express Co. 2.0% National City Corp. 1.9% Fifth Third Bancorp 1.9% Bank of New York Co., Inc. 1.9% Keycorp 1.8% Progressive Corp. 1.8% Chubb Corp. 1.8% Principal Financial Group 1.8% - ------------------------------------------------------ Top Ten Total 21.0% - ------------------------------------------------------ "Ten Largest Holdings" excludes any temporary cash investments and equity index products. See Notes to Financial Statements. 38 | THE RYDEX VARIABLE TRUST ANNUAL REPORT PERFORMANCE REPORTS AND FUND PROFILES (CONTINUED) - -------------------------------------------------------------------------------- HEALTH CARE FUND OBJECTIVE: Seeks capital appreciation by investing in companies that are involved in the health care industry. Inception: June 19, 2001 The growing threat of Medicare legislation during the first 10 months of the year depressed the industry, especially pharmaceutical companies. The second half of the year was marked by major setbacks for pharmaceutical companies. Sales of COX-2 inhibitors, known by their brand names Vioxx and Celebrex, ground to a halt during the last quarter. Merck voluntarily pulled Vioxx from the market and the FDA halted clinical trials using Pfizer's Celebrex when it was determined that the drugs could lead to heart attacks and strokes. As a group, pharmaceuticals lost -5% for the period. Other health care industries fared much better during 2004. The health care equipment and supplies industry returned 19%, spurred on in part by the Centers for Medicare and Medicaid Services' decision to expand coverage of implantable cardiac defibrillators for people with congestive heart failure. St. Jude Medical and Guidant responded with gains of 37% and 21%, respectively. Health care providers and services fared even better, gaining 22% on the year, propelled by the election results. Rydex Health Care Fund returned 6.22% in 2004. The Fund's methodology resulted in an average underweighting to the pharmaceutical sector, which contributed to the Fund's outperformance. CUMULATIVE FUND PERFORMANCE: JUNE 19, 2001 - DECEMBER 31, 2004 [THE FOLLOWING TABLE WAS REPRESENTED AS A LINE GRAPH IN THE PRINTED MATERIAL.] DATE HEALTH CARE FUND S&P 500 INDEX - ---- ---------------- ------------- 6/19/2001 10,000 10,000 6/30/2001 9,552 10,099 7/31/2001 9,852 10,000 8/31/2001 9,516 9,374 9/30/2001 9,480 8,617 10/31/2001 9,436 8,781 11/30/2001 9,796 9,455 12/31/2001 9,528 9,537 1/31/2002 9,356 9,398 2/28/2002 9,360 9,217 3/31/2002 9,416 9,564 4/30/2002 8,848 8,984 5/31/2002 8,740 8,918 6/30/2002 7,856 8,282 7/31/2002 7,640 7,637 8/31/2002 7,736 7,687 9/30/2002 7,273 6,851 10/31/2002 7,538 7,455 11/30/2002 7,674 7,893 12/31/2002 7,498 7,430 1/31/2003 7,510 7,235 2/28/2003 7,342 7,126 3/31/2003 7,526 7,196 4/30/2003 7,943 7,788 5/31/2003 8,488 8,199 6/30/2003 8,688 8,303 7/31/2003 9,017 8,450 8/31/2003 8,944 8,614 9/30/2003 8,964 8,523 10/31/2003 9,205 9,005 11/30/2003 9,433 9,084 12/31/2003 9,730 9,561 1/31/2004 10,103 9,736 2/29/2004 10,167 9,872 3/31/2004 10,010 9,723 4/30/2004 10,131 9,570 5/31/2004 10,095 9,701 6/30/2004 10,167 9,890 7/31/2004 9,501 9,563 8/31/2004 9,598 9,601 9/30/2004 9,662 9,705 10/31/2004 9,438 9,854 11/30/2004 9,751 10,252 12/31/2004 10,335 10,601 AVERAGE ANNUAL TOTAL RETURNS FOR THE PERIOD ENDED 12/31/04 - -------------------------------------------------------------------------------- SINCE ONE INCEPTION YEAR (06/19/01) - -------------------------------------------------------------------------------- HEALTH CARE FUND 6.22% 0.94% S&P 500 INDEX 10.89% 1.67% - -------------------------------------------------------------------------------- THE RETURNS PRESENTED ABOVE DO NOT REFLECT THE EFFECTS OF TAXES. PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS. THE S&P 500 INDEX IS AN UNMANAGED STOCK INDEX AND, UNLIKE THE FUND, HAS NO MANAGEMENT FEES OR OTHER OPERATING EXPENSES TO REDUCE ITS REPORTED RETURNS. RETURNS ARE HISTORICAL AND INCLUDE CHANGES IN PRINCIPAL AND REINVESTED DIVIDENDS AND CAPITAL GAINS. INDUSTRY DIVERSIFICATION (MARKET EXPOSURE AS % OF NET ASSETS) [THE FOLLOWING TABLE WAS REPRESENTED AS A PIE CHART IN THE PRINTED MATERIAL.] HEALTH CARE FUND PHARMACEUTICALS 37% HEALTH CARE PROVIDERS & SERVICES 27% HEALTH CARE EQUIPMENT & SUPPLIES 21% BIOTECHNOLOGY 15% "Industry Diversification (Market Exposure as % of Net Assets)" excludes any temporary cash investments. TEN LARGEST HOLDINGS (% OF TOTAL NET ASSETS) - ------------------------------------------------------ Pfizer, Inc. 7.6% Johnson & Johnson 6.2% Abbott Laboratories 4.3% UnitedHealth Group, Inc. 3.3% Bristol-Myers Squibb Co. 3.1% Wyeth 2.9% Eli Lilly & Co. 2.9% Genentech, Inc. 2.9% Amgen, Inc. 2.7% Boston Scientific Corp. 2.6% - ------------------------------------------------------ Top Ten Total 38.5% - ------------------------------------------------------ "Ten Largest Holdings" excludes any temporary cash investments and equity index products. See Notes to Financial Statements. THE RYDEX VARIABLE TRUST ANNUAL REPORT | 39 PERFORMANCE REPORTS AND FUND PROFILES (CONTINUED) - -------------------------------------------------------------------------------- INTERNET FUND OBJECTIVE: Seeks capital appreciation by investing in companies that provide products or services designed for or related to the Internet ("Internet Companies"). Inception: May 24, 2001 For the second consecutive year, Internet companies outpaced the S&P 500 Index. Internet software, service and security companies, including Yahoo, McAfee, Check Point Software, Tibco, Websense and Verisign, were among the Fund's better performers. Internet retailers eBay and Priceline led a mixed retailing industry, while Amazon, Netflix and Interactive Corp. disappointed during the period. Generally, improved company fundamentals helped the industry. Rydex Internet Fund gained 15.87% for the year. Its modified cap weight (less emphasis of the large-cap names) strategy placed less emphasis on the large-cap Internet winners. CUMULATIVE FUND PERFORMANCE: MAY 24, 2001 - DECEMBER 31, 2004 [THE FOLLOWING TABLE WAS REPRESENTED AS A LINE GRAPH IN THE PRINTED MATERIAL.] DATE INTERNET FUND S&P 500 INDEX - ---- ------------- ------------- 5/24/2001 10,000 10,000 5/31/2001 8,716 9,715 6/30/2001 8,232 9,478 7/31/2001 7,292 9,385 8/31/2001 5,840 8,798 9/30/2001 4,544 8,087 10/31/2001 5,236 8,241 11/30/2001 6,360 8,874 12/31/2001 6,304 8,951 1/31/2002 5,976 8,821 2/28/2002 4,804 8,651 3/31/2002 5,216 8,976 4/30/2002 4,336 8,432 5/31/2002 4,172 8,370 6/30/2002 3,608 7,773 7/31/2002 3,132 7,167 8/31/2002 3,196 7,215 9/30/2002 2,780 6,430 10/31/2002 3,440 6,996 11/30/2002 4,288 7,408 12/31/2002 3,572 6,973 1/31/2003 3,540 6,790 2/28/2003 3,484 6,688 3/31/2003 3,512 6,753 4/30/2003 3,880 7,310 5/31/2003 4,544 7,695 6/30/2003 4,620 7,793 7/31/2003 4,764 7,930 8/31/2003 5,036 8,085 9/30/2003 4,912 7,999 10/31/2003 5,384 8,452 11/30/2003 5,524 8,526 12/31/2003 5,872 8,973 1/31/2004 6,284 9,138 2/29/2004 6,176 9,265 3/31/2004 6,144 9,125 4/30/2004 5,788 8,982 5/31/2004 6,196 9,105 6/30/2004 6,464 9,282 7/31/2004 5,764 8,975 8/31/2004 5,468 9,011 9/30/2004 5,788 9,109 10/31/2004 6,144 9,248 11/30/2004 6,604 9,622 12/31/2004 6,804 9,950 AVERAGE ANNUAL TOTAL RETURNS FOR THE PERIOD ENDED 12/31/04 - -------------------------------------------------------------------------------- SINCE ONE INCEPTION YEAR (05/24/01) - -------------------------------------------------------------------------------- INTERNET FUND 15.87% -10.13% S&P 500 INDEX 10.89% -0.14% - -------------------------------------------------------------------------------- THE RETURNS PRESENTED ABOVE DO NOT REFLECT THE EFFECTS OF TAXES. PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS. THE S&P 500 INDEX IS AN UNMANAGED STOCK INDEX AND, UNLIKE THE FUND, HAS NO MANAGEMENT FEES OR OTHER OPERATING EXPENSES TO REDUCE ITS REPORTED RETURNS. RETURNS ARE HISTORICAL AND INCLUDE CHANGES IN PRINCIPAL AND REINVESTED DIVIDENDS AND CAPITAL GAINS. INDUSTRY DIVERSIFICATION (MARKET EXPOSURE AS % OF NET ASSETS) [THE FOLLOWING TABLE WAS REPRESENTED AS A PIE CHART IN THE PRINTED MATERIAL.] INTERNET FUND OTHER 16% DIVERSIFIED TELECOMMUNICATION SERVICES 24% CAPITAL MARKETS 22% HEALTH CARE PROVIDERS & SERVICES 16% SEMICONDUCTORS & SEMICONDUCTOR EQUIPMENT 15% COMMERCIAL SERVICES & SUPPLIES 7% "Industry Diversification (Market Exposure as % of Net Assets)" excludes any temporary cash investments. TEN LARGEST HOLDINGS (% OF TOTAL NET ASSETS) - ------------------------------------------------------ Cisco Systems, Inc. 8.8% Qualcomm, Inc. 6.7% Yahoo!, Inc. 6.6% Time Warner, Inc. 6.6% eBay, Inc. 6.4% Amazon.Com, Inc. 4.4% Juniper Networks, Inc. 4.1% Research In Motion Ltd. 3.0% Qwest Communications International, Inc. 2.9% Sun Microsystems, Inc. 2.7% - ------------------------------------------------------ Top Ten Total 52.2% - ------------------------------------------------------ "Ten Largest Holdings" excludes any temporary cash investments and equity index products. See Notes to Financial Statements. 40 | THE RYDEX VARIABLE TRUST ANNUAL REPORT PERFORMANCE REPORTS AND FUND PROFILES (CONTINUED) - -------------------------------------------------------------------------------- LEISURE FUND OBJECTIVE: Seeks capital appreciation by investing in companies in the leisure and entertainment businesses. Inception: May 22, 2001 For the third consecutive year, the leisure industry outperformed the S&P 500 Index. Rydex Leisure Fund rose 23.86%, helped by a number of sub-industries. Casinos, gaming companies, hotels, resorts, cruise lines and home entertainment software all contributed to positive performance. Boyd Gaming's and MGM Mirage's joint venture in Atlantic City, the Borgata, led to a gain in market share during the period for the merged companies. The Borgata is the first Atlantic City hotel and casino to attempt to attract multi-day visitors, as opposed to day trippers. Casino gambling continued to grow in other states. More than 20 have made it legal, compared with only two states 20 years ago. Leisure facilities dragged on performance, dropping -9.2% for the period. The Fund's modified cap-weighting was beneficial in the movies and entertainment industries, but not elsewhere. CUMULATIVE FUND PERFORMANCE: MAY 22, 2001 - DECEMBER 31, 2004 [THE FOLLOWING TABLE WAS REPRESENTED AS A LINE GRAPH IN THE PRINTED MATERIAL.] DATE LEISURE FUND S&P 500 INDEX - ---- ------------ ------------- 5/22/2001 10,000 10,000 5/31/2001 9,528 9,595 6/30/2001 9,488 9,362 7/31/2001 8,792 9,270 8/31/2001 7,872 8,689 9/30/2001 6,136 7,988 10/31/2001 6,368 8,140 11/30/2001 6,980 8,764 12/31/2001 7,236 8,841 1/31/2002 7,504 8,712 2/28/2002 7,424 8,544 3/31/2002 7,828 8,866 4/30/2002 8,060 8,328 5/31/2002 8,020 8,267 6/30/2002 7,608 7,678 7/31/2002 7,000 7,079 8/31/2002 6,876 7,126 9/30/2002 6,292 6,351 10/31/2002 6,312 6,910 11/30/2002 6,572 7,317 12/31/2002 6,168 6,887 1/31/2003 5,908 6,707 2/28/2003 5,676 6,606 3/31/2003 5,912 6,670 4/30/2003 6,272 7,220 5/31/2003 6,688 7,600 6/30/2003 6,952 7,697 7/31/2003 7,180 7,833 8/31/2003 7,380 7,986 9/30/2003 7,320 7,901 10/31/2003 7,908 8,348 11/30/2003 8,124 8,421 12/31/2003 8,320 8,863 1/31/2004 8,580 9,026 2/29/2004 9,004 9,151 3/31/2004 9,148 9,013 4/30/2004 8,796 8,871 5/31/2004 8,708 8,993 6/30/2004 8,836 9,168 7/31/2004 8,500 8,865 8/31/2004 8,392 8,901 9/30/2004 8,812 8,997 10/31/2004 8,990 9,134 11/30/2004 9,615 9,504 12/31/2004 10,305 9,827 AVERAGE ANNUAL TOTAL RETURNS FOR THE PERIOD ENDED 12/31/04 - -------------------------------------------------------------------------------- SINCE ONE INCEPTION YEAR (05/22/01) - -------------------------------------------------------------------------------- LEISURE FUND 23.86% 0.84% S&P 500 INDEX 10.89% -0.48% - -------------------------------------------------------------------------------- THE RETURNS PRESENTED ABOVE DO NOT REFLECT THE EFFECTS OF TAXES. PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS. THE S&P 500 INDEX IS AN UNMANAGED STOCK INDEX AND, UNLIKE THE FUND, HAS NO MANAGEMENT FEES OR OTHER OPERATING EXPENSES TO REDUCE ITS REPORTED RETURNS. RETURNS ARE HISTORICAL AND INCLUDE CHANGES IN PRINCIPAL AND REINVESTED DIVIDENDS AND CAPITAL GAINS. INDUSTRY DIVERSIFICATION (MARKET EXPOSURE AS % OF NET ASSETS) [THE FOLLOWING TABLE WAS REPRESENTED AS A PIE CHART IN THE PRINTED MATERIAL.] LEISURE FUND HOTELS RESTAURANTS & LEISURE 61% MEDIA 21% LEISURE EQUIPMENT & PRODUCTS 12% SOFTWARE 6% "Industry Diversification (Market Exposure as % of Net Assets)" excludes any temporary cash investments. TEN LARGEST HOLDINGS (% OF TOTAL NET ASSETS) - ------------------------------------------------------ Time Warner, Inc. 6.0% Viacom, Inc. - Class B 5.8% McDonald's Corp. 5.1% Walt Disney Co. 4.4% Electronic Arts, Inc. 4.3% Marriott International, Inc. - Class A 3.7% Yum! Brands, Inc. 3.5% Fox Entertainment Group, Inc. - Class A 3.5% Hilton Hotels Corp. 3.1% Harrah's Entertainment, Inc. 3.0% - ------------------------------------------------------ Top Ten Total 42.4% - ------------------------------------------------------ "Ten Largest Holdings" excludes any temporary cash investments and equity index products. See Notes to Financial Statements. THE RYDEX VARIABLE TRUST ANNUAL REPORT | 41 PERFORMANCE REPORTS AND FUND PROFILES (CONTINUED) - -------------------------------------------------------------------------------- PRECIOUS METALS FUND OBJECTIVE: To provide capital appreciation by investing in U.S. and foreign companies that are involved in the precious metals sector, including exploration, mining, production and development, and other precious metals-related services. Inception: May 29, 1997 After an impressive year in 2003, precious metals stocks pulled back in 2004. In particular, gold stocks fell early in the year and later in December, when the stock market rallied and the U.S. dollar appreciated. In between, concerns about the dollar's weakness and higher oil prices drove investors toward the sector. The XAU fell 7.7%. The Fund's methodology caused the Fund to be underweight Barrick Gold and overweight DRD Gold and Coeur d'Alene Mines relative to the XAU, lending to underperformance relative to the XAU, an Index that consists of 12 precious metals mining companies. For the year, Rydex Precious Metals Fund fell -14.21%. CUMULATIVE FUND PERFORMANCE: MAY 29, 1997 - DECEMBER 31, 2004 [THE FOLLOWING TABLE WAS REPRESENTED AS A LINE GRAPH IN THE PRINTED MATERIAL.] DATE PRECIOUS METAL FUND S&P 500 INDEX - ---- ------------------- ------------- 5/29/1997 10,000 10,000 6/30/1997 8,870 10,501 9/30/1997 9,990 11,287 12/31/1997 7,020 11,611 3/31/1998 7,650 13,231 6/30/1998 6,610 13,668 9/30/1998 6,730 12,309 12/31/1998 5,810 14,930 3/31/1999 5,240 15,674 6/30/1999 5,740 16,778 9/30/1999 6,499 15,731 12/31/1999 5,602 18,071 3/31/2000 4,611 18,486 6/30/2000 4,797 17,995 9/30/2000 4,323 17,820 12/31/2000 4,446 16,426 3/31/2001 4,333 14,479 6/30/2001 4,890 15,326 9/30/2001 5,179 13,076 12/31/2001 5,024 14,474 3/31/2002 6,603 14,513 6/30/2002 6,819 12,569 9/30/2002 6,541 10,398 12/31/2002 7,314 11,275 3/31/2003 6,272 10,920 6/30/2003 7,139 12,601 9/30/2003 8,202 12,934 12/31/2003 10,306 14,509 3/31/2004 10,255 14,755 6/30/2004 8,129 15,009 9/30/2004 9,532 14,728 12/31/2004 8,841 16,088 AVERAGE ANNUAL TOTAL RETURNS FOR THE PERIOD ENDED 12/31/04 - -------------------------------------------------------------------------------- SINCE ONE FIVE INCEPTION YEAR YEAR (05/29/97) - -------------------------------------------------------------------------------- PRECIOUS METALS FUND -14.21% 9.56% -1.61% S&P 500 INDEX 10.89% -2.30% 6.46% - -------------------------------------------------------------------------------- THE RETURNS PRESENTED ABOVE DO NOT REFLECT THE EFFECTS OF TAXES. PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS. THE S&P 500 INDEX IS AN UNMANAGED STOCK INDEX AND, UNLIKE THE FUND, HAS NO MANAGEMENT FEES OR OTHER OPERATING EXPENSES TO REDUCE ITS REPORTED RETURNS. RETURNS ARE HISTORICAL AND INCLUDE CHANGES IN PRINCIPAL AND REINVESTED DIVIDENDS AND CAPITAL GAINS. INDUSTRY DIVERSIFICATION (MARKET EXPOSURE AS % OF NET ASSETS) [THE FOLLOWING TABLE WAS REPRESENTED AS A PIE CHART IN THE PRINTED MATERIAL.] PRECIOUS METALS FUND METALS & MINING 100% "Industry Diversification (Market Exposure as % of Net Assets)" excludes any temporary cash investments. TEN LARGEST HOLDINGS (% OF TOTAL NET ASSETS) - ------------------------------------------------------ Newmont Mining Corp. 13.9% Freeport-McMoRan Copper & Gold, Inc. - Class B 10.1% Barrick Gold Corp. 6.4% Placer Dome, Inc. 5.5% AngloGold Ashanti Ltd. - SP ADR 5.2% Gold Fields Ltd. - SP ADR 4.7% Goldcorp, Inc. 4.6% Harmony Gold Mining Co. Ltd. - SP ADR 4.5% PAN American Silver Corp. 3.4% Meridian Gold, Inc. 3.3% - ------------------------------------------------------ Top Ten Total 61.6% - ------------------------------------------------------ "Ten Largest Holdings" excludes any temporary cash investments and equity index products. See Notes to Financial Statements. 42 | THE RYDEX VARIABLE TRUST ANNUAL REPORT PERFORMANCE REPORTS AND FUND PROFILES (CONTINUED) - -------------------------------------------------------------------------------- REAL ESTATE FUND OBJECTIVE: Rydex Real Estate Fund seeks to provide capital appreciation by investing in companies that are involved in the real estate industry including real estate investment trusts ("REITs"). Inception: October 1, 2001 In the previous four years, the real estate investment trust (REIT) industry easily outperformed the broader markets, and 2004 proved no different. REIT stocks have gained 22.5% annually during the last five years, while the S&P 500 Index has lost -2.3% during the same time span. Rydex Real Estate Fund gained 29.54% in 2004, almost tripling the S&P 500 Index gain. REIT stocks fell off in April because of concerns about the potential for rising interest rates, but performed strongly throughout the rest of the year. The Fund benefited from slight overweights in REITs. Despite incremental Fed funds rate increases during the latter half of the year, an improving economy helped this sector. Strong consumer consumption resulted in strong store sales, which in turn helped provide stability in the commercial renting and leasing area. CUMULATIVE FUND PERFORMANCE: OCTOBER 1, 2001 - DECEMBER 31, 2004 [THE FOLLOWING TABLE WAS REPRESENTED BY A LINE GRAPH IN THE PRINTED MATERIAL.] DATE REAL ESTATE FUND S&P 500 INDEX - ---------- ---------------- ------------- 10/1/2001 10,000 10,000 10/31/2001 9,708 10,213 11/30/2001 10,208 10,997 12/31/2001 10,409 11,093 1/31/2002 10,284 10,931 2/28/2002 10,401 10,721 3/31/2002 10,975 11,124 4/30/2002 10,979 10,449 5/31/2002 11,100 10,372 6/30/2002 11,338 9,633 7/31/2002 10,757 8,883 8/31/2002 10,733 8,941 9/30/2002 10,276 7,969 10/31/2002 9,782 8,671 11/30/2002 10,231 9,181 12/31/2002 10,293 8,642 1/31/2003 9,963 8,415 2/28/2003 10,062 8,289 3/31/2003 10,215 8,369 4/30/2003 10,623 9,059 5/31/2003 11,122 9,536 6/30/2003 11,332 9,658 7/31/2003 11,914 9,828 8/31/2003 11,910 10,020 9/30/2003 12,280 9,913 10/31/2003 12,490 10,474 11/30/2003 13,019 10,566 12/31/2003 13,413 11,120 1/31/2004 13,923 11,325 2/29/2004 14,149 11,482 3/31/2004 14,956 11,309 4/30/2004 12,796 11,131 5/31/2004 13,683 11,284 6/30/2004 14,118 11,503 7/31/2004 14,118 11,123 8/31/2004 15,204 11,168 9/30/2004 15,198 11,289 10/31/2004 15,922 11,461 11/30/2004 16,610 11,925 12/31/2004 17,375 12,331 AVERAGE ANNUAL TOTAL RETURNS FOR THE PERIOD ENDED 12/31/04 - -------------------------------------------------------------------------------- SINCE ONE INCEPTION YEAR (10/01/01) - -------------------------------------------------------------------------------- REAL ESTATE FUND 29.54% 18.53% S&P 500 INDEX 10.89% 6.66% - -------------------------------------------------------------------------------- THE RETURNS PRESENTED ABOVE DO NOT REFLECT THE EFFECTS OF TAXES. PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS. THE S&P 500 INDEX IS AN UNMANAGED STOCK INDEX AND, UNLIKE THE FUND, HAS NO MANAGEMENT FEES OR OTHER OPERATING EXPENSES TO REDUCE ITS REPORTED RETURNS. RETURNS ARE HISTORICAL AND INCLUDE CHANGES IN PRINCIPAL AND REINVESTED DIVIDENDS AND CAPITAL GAINS. INDUSTRY DIVERSIFICATION (MARKET EXPOSURE AS % OF NET ASSETS) [THE FOLLOWING TABLE WAS REPRESENTED BY A PIE CHART IN THE PRINTED MATERIAL.] REAL ESTATE FUND REAL ESTATE 100% "Industry Diversification (Market Exposure as % of Net Assets)" excludes any temporary cash investments. TEN LARGEST HOLDINGS (% OF TOTAL NET ASSETS) - ------------------------------------------------------ Simon Property Group, Inc. 2.5% Equity Office Properties Trust 2.2% Equity Residential 2.2% Vornado Realty Trust 2.0% Prologis 1.9% General Growth Properties, Inc. 1.8% Plum Creek Timber (REIT) Co. 1.7% Boston Properties, Inc. 1.7% Archstone-Smith Trust 1.7% Public Storage, Inc. 1.7% - ------------------------------------------------------ Top Ten Total 19.4% - ------------------------------------------------------ "Ten Largest Holdings" excludes any temporary cash investments and equity index products. See Notes to Financial Statements. THE RYDEX VARIABLE TRUST ANNUAL REPORT | 43 PERFORMANCE REPORTS AND FUND PROFILES (CONTINUED) - -------------------------------------------------------------------------------- RETAILING FUND OBJECTIVE: Seeks capital appreciation by investing in companies engaged in merchandising finished goods and services, including department stores, restaurant franchises, mail-order operations and other companies involved in selling products to consumers. Inception: July 23, 2001 Consumer confidence indices increased throughout the year, and consumers showed their confidence in a tangible way by continuing their retail spending. The retailing sector outperformed the S&P 500 Index, but Rydex Retailing Fund lagged slightly, returning 10.06%. Distributors, department stores and clothing retailers led the gainers. Specialty stores, general merchandise stores and food and staples retailers all fell short of the S&P 500 Index's increase for 2004. The Fund's overweight position in smaller-cap stocks and the underperforming specialty store segment adversely affected performance CUMULATIVE FUND PERFORMANCE: JULY 23, 2001 - DECEMBER 31, 2004 [THE FOLLOWING TABLE WAS REPRESENTED BY A LINE GRAPH IN THE PRINTED MATERIAL.] DATE RETAILING FUND S&P 500 INDEX - ---------- -------------- ------------- 7/23/2001 10,000 10,000 7/31/2001 10,224 10,171 8/31/2001 9,400 9,534 9/30/2001 8,412 8,764 10/31/2001 8,628 8,932 11/30/2001 9,892 9,617 12/31/2001 10,260 9,701 1/31/2002 10,420 9,559 2/28/2002 10,408 9,375 3/31/2002 10,480 9,728 4/30/2002 10,300 9,138 5/31/2002 10,112 9,071 6/30/2002 9,520 8,424 7/31/2002 8,344 7,768 8/31/2002 8,600 7,819 9/30/2002 7,833 6,969 10/31/2002 8,436 7,582 11/30/2002 8,780 8,029 12/31/2002 8,012 7,557 1/31/2003 7,696 7,359 2/28/2003 7,538 7,249 3/31/2003 7,783 7,319 4/30/2003 8,598 7,922 5/31/2003 8,992 8,339 6/30/2003 9,316 8,446 7/31/2003 9,798 8,595 8/31/2003 10,624 8,762 9/30/2003 9,958 8,669 10/31/2003 10,979 9,159 11/30/2003 11,146 9,240 12/31/2003 10,838 9,725 1/31/2004 10,775 9,903 2/29/2004 11,409 10,041 3/31/2004 11,434 9,889 4/30/2004 11,004 9,734 5/31/2004 11,179 9,868 6/30/2004 11,317 10,060 7/31/2004 10,658 9,727 8/31/2004 10,412 9,766 9/30/2004 10,639 9,872 10/31/2004 10,939 10,023 11/30/2004 11,529 10,428 12/31/2004 11,928 10,783 AVERAGE ANNUAL TOTAL RETURNS FOR THE PERIOD ENDED 12/31/04 - -------------------------------------------------------------------------------- SINCE ONE INCEPTION YEAR (07/23/01) - -------------------------------------------------------------------------------- RETAILING FUND 10.06% 5.26% S&P 500 INDEX 10.89% 2.21% - -------------------------------------------------------------------------------- THE RETURNS PRESENTED ABOVE DO NOT REFLECT THE EFFECTS OF TAXES. PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS. THE S&P 500 INDEX IS AN UNMANAGED STOCK INDEX AND, UNLIKE THE FUND, HAS NO MANAGEMENT FEES OR OTHER OPERATING EXPENSES TO REDUCE ITS REPORTED RETURNS. RETURNS ARE HISTORICAL AND INCLUDE CHANGES IN PRINCIPAL AND REINVESTED DIVIDENDS AND CAPITAL GAINS. INDUSTRY DIVERSIFICATION (MARKET EXPOSURE AS % OF NET ASSETS) [THE FOLLOWING TABLE WAS REPRESENTED BY A PIE CHART IN THE PRINTED MATERIAL.] RETAILING FUND SPECILTY RETAIL 58% FOOD AND STAPLES RETAILING 15% MULTILINE RETAIL 13% INTERNET & CATALOG RETAIL 13% OTHER 1% "Industry Diversification (Market Exposure as % of Net Assets)" excludes any temporary cash investments. TEN LARGEST HOLDINGS (% OF TOTAL NET ASSETS) - ------------------------------------------------------ Wal-Mart Stores, Inc. 7.1% Home Depot, Inc. 5.2% eBay, Inc. 5.1% Lowe's Cos., Inc. 3.8% Target Corp. 3.3% Costco Wholesale Corp. 3.1% InterActiveCorp 3.0% Amazon.Com, Inc. 2.9% Gap, Inc. 2.8% Staples, Inc. 2.8% - ------------------------------------------------------ Top Ten Total 39.1% - ------------------------------------------------------ "Ten Largest Holdings" excludes any temporary cash investments and equity index products. See Notes to Financial Statements. 44 | THE RYDEX VARIABLE TRUST ANNUAL REPORT PERFORMANCE REPORTS AND FUND PROFILES (CONTINUED) - -------------------------------------------------------------------------------- TECHNOLOGY FUND OBJECTIVE: Seeks capital appreciation by investing in companies that are involved in the technology sector, including computer software and service companies, semiconductor manufacturers, networking and telecommunications equipment manufacturers and PC hardware and peripherals companies. Inception: May 2, 2001 The technology sector was beaten up heavily in the first eight months of the year, when there was much uncertainty in the market. Despite a year-end rally, the technology sector was one of the market's worst-performing groups. Small-cap companies typically performed better than larger companies, helping to boost performance somewhat in Rydex Technology Fund, which was up 1.15% for the year. CUMULATIVE FUND PERFORMANCE: MAY 2, 2001 - DECEMBER 31, 2004 [THE FOLLOWING TABLE WAS REPRESENTED BY A LINE GRAPH IN THE PRINTED MATERIAL.] DATE TECHNOLOGY FUND S&P 500 INDEX - ---- --------------- ------------- 5/2/2001 10,000 10,000 5/31/2001 8,972 9,924 6/30/2001 8,896 9,682 7/31/2001 8,220 9,587 8/31/2001 7,112 8,987 9/30/2001 5,640 8,261 10/31/2001 6,524 8,419 11/30/2001 7,596 9,065 12/31/2001 7,444 9,144 1/31/2002 7,408 9,011 2/28/2002 6,432 8,837 3/31/2002 6,820 9,169 4/30/2002 6,032 8,613 5/31/2002 5,776 8,550 6/30/2002 4,992 7,941 7/31/2002 4,500 7,322 8/31/2002 4,480 7,370 9/30/2002 3,651 6,569 10/31/2002 4,524 7,147 11/30/2002 5,419 7,568 12/31/2002 4,533 7,123 1/31/2003 4,482 6,937 2/28/2003 4,542 6,832 3/31/2003 4,496 6,899 4/30/2003 4,962 7,467 5/31/2003 5,707 7,860 6/30/2003 5,725 7,961 7/31/2003 6,127 8,101 8/31/2003 6,785 8,259 9/30/2003 6,506 8,171 10/31/2003 7,170 8,634 11/30/2003 7,307 8,710 12/31/2003 7,312 9,166 1/31/2004 7,705 9,335 2/29/2004 7,524 9,464 3/31/2004 7,391 9,322 4/30/2004 6,855 9,175 5/31/2004 7,239 9,301 6/30/2004 7,361 9,482 7/31/2004 6,580 9,168 8/31/2004 6,207 9,205 9/30/2004 6,454 9,305 10/31/2004 6,821 9,447 11/30/2004 7,183 9,829 12/31/2004 7,396 10,164 AVERAGE ANNUAL TOTAL RETURNS FOR THE PERIOD ENDED 12/31/04 - -------------------------------------------------------------------------------- SINCE ONE INCEPTION YEAR (05/02/01) - -------------------------------------------------------------------------------- TECHNOLOGY FUND 1.15% -7.90% S&P 500 INDEX 10.89% 0.44% - -------------------------------------------------------------------------------- THE RETURNS PRESENTED ABOVE DO NOT REFLECT THE EFFECTS OF TAXES. PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS. THE S&P 500 INDEX IS AN UNMANAGED STOCK INDEX AND, UNLIKE THE FUND, HAS NO MANAGEMENT FEES OR OTHER OPERATING EXPENSES TO REDUCE ITS REPORTED RETURNS. RETURNS ARE HISTORICAL AND INCLUDE CHANGES IN PRINCIPAL AND REINVESTED DIVIDENDS AND CAPITAL GAINS. INDUSTRY DIVERSIFICATION (MARKET EXPOSURE AS % OF NET ASSETS) [THE FOLLOWING TABLE WAS REPRESENTED BY A PIE CHART IN THE PRINTED MATERIAL.] TECHNOLOGY FUND SOFTWARE 24% SEMICONDUCTORS & SEMICONDUCTOR EQUIPMENT 20% COMPUTERS & PERIPHERALS 19% COMMUNICATIONS EUIPMENT 16% IT SERVICES 9% ELECTRONIC EQUIPMENT & INSTRUMENTS 7% OTHER 5% "Industry Diversification (Market Exposure as % of Net Assets)" excludes any temporary cash investments. TEN LARGEST HOLDINGS (% OF TOTAL NET ASSETS) - ------------------------------------------------------ Microsoft Corp. 8.4% Intel Corp. 5.3% Cisco Systems, Inc. 4.9% Dell, Inc. 4.8% International Business Machines Corp. 4.6% Oracle Corp. 4.1% Hewlett-Packard Co. 3.3% Motorola, Inc. 2.7% Qualcomm, Inc. 2.5% EMC Corp./MA 2.2% - ------------------------------------------------------ Top Ten Total 42.8% - ------------------------------------------------------ "Ten Largest Holdings" excludes any temporary cash investments and equity index products. See Notes to Financial Statements. THE RYDEX VARIABLE TRUST ANNUAL REPORT | 45 PERFORMANCE REPORTS AND FUND PROFILES (CONTINUED) - -------------------------------------------------------------------------------- TELECOMMUNICATIONS FUND OBJECTIVE: Seeks capital appreciation by investing in companies engaged in the development, manufacture or sale of communications services or communications equipment. Inception: July 27, 2001 A strong second half of the year propelled the telecommunications sector and, in particular, Rydex Telecommunications Fund, which gained 12.68% for the year. Diversified telecommunications services outperformed the sector during the first eight months of 2004, when the group struggled. Higher-beta telecommunication companies, which have higher risk and potentially higher returns, did very well in January and later in the year. Overall, this industry produced volatile returns, which is typical for higher-beta firms. Our model let us overweight small stocks, which helped the Fund. CUMULATIVE FUND PERFORMANCE: JULY 27, 2001 - DECEMBER 31, 2004 [THE FOLLOWING TABLE WAS REPRESENTED BY A LINE GRAPH IN THE PRINTED MATERIAL.] DATE TELECOMMUNICATIONS FUND S&P 500 INDEX - ---- ----------------------- ------------- 7/27/2001 10,000 10,000 7/31/2001 9,960 10,046 8/31/2001 8,932 9,417 9/30/2001 8,804 8,656 10/31/2001 8,524 8,821 11/30/2001 9,092 9,498 12/31/2001 9,024 9,581 1/31/2002 8,180 9,441 2/28/2002 7,292 9,259 3/31/2002 7,216 9,607 4/30/2002 6,076 9,025 5/31/2002 5,936 8,958 6/30/2002 5,176 8,320 7/31/2002 4,576 7,672 8/31/2002 4,668 7,722 9/30/2002 3,948 6,883 10/31/2002 5,148 7,489 11/30/2002 6,188 7,929 12/31/2002 5,452 7,464 1/31/2003 5,420 7,268 2/28/2003 5,184 7,159 3/31/2003 5,096 7,229 4/30/2003 5,588 7,824 5/31/2003 6,188 8,236 6/30/2003 6,216 8,341 7/31/2003 6,232 8,488 8/31/2003 6,488 8,654 9/30/2003 6,512 8,562 10/31/2003 6,992 9,046 11/30/2003 7,068 9,126 12/31/2003 7,288 9,605 1/31/2004 8,072 9,781 2/29/2004 8,220 9,917 3/31/2004 7,936 9,767 4/30/2004 7,372 9,614 5/31/2004 7,444 9,746 6/30/2004 7,720 9,935 7/31/2004 7,204 9,606 8/31/2004 7,120 9,645 9/30/2004 7,392 9,750 10/31/2004 7,676 9,899 11/30/2004 8,072 10,299 12/31/2004 8,212 10,650 AVERAGE ANNUAL TOTAL RETURNS FOR THE PERIOD ENDED 12/31/04 - -------------------------------------------------------------------------------- SINCE ONE INCEPTION YEAR (07/27/01) - -------------------------------------------------------------------------------- TELECOMMUNICATIOnS FUND 12.68% -5.58% S&P 500 INDEX 10.89% 1.85% - -------------------------------------------------------------------------------- THE RETURNS PRESENTED ABOVE DO NOT REFLECT THE EFFECTS OF TAXES. PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS. THE S&P 500 INDEX IS AN UNMANAGED STOCK INDEX AND, UNLIKE THE FUND, HAS NO MANAGEMENT FEES OR OTHER OPERATING EXPENSES TO REDUCE ITS REPORTED RETURNS. RETURNS ARE HISTORICAL AND INCLUDE CHANGES IN PRINCIPAL AND REINVESTED DIVIDENDS AND CAPITAL GAINS. INDUSTRY DIVERSIFICATION (MARKET EXPOSURE AS % OF NET ASSETS) [THE FOLLOWING TABLE WAS REPRESENTED BY A PIE CHART IN THE PRINTED MATERIAL.] TELECOMMUNICATIONS FUND COMMUNICATIONS EQUIPMENT 52% DIVERSIFIED TELECOMMUNICATION SERVICES 28% WIRELESS TELECOMMUNICATION SERVICES 19% OTHER 1% "Industry Diversification (Market Exposure as % of Net Assets)" excludes any temporary cash investments. TEN LARGEST HOLDINGS (% OF TOTAL NET ASSETS) - ------------------------------------------------------ Cisco Systems, Inc. 7.2% Vodafone Group PLC - SP ADR 6.4% SBC Communications, Inc. 5.4% Nokia OYJ - SP ADR 5.1% Verizon Communications, Inc. 4.7% Qualcomm, Inc. 4.5% Motorola, Inc. 4.0% BellSouth Corp. 3.9% Telefonaktiebolaget LM Ericsson - SP ADR 3.7% Lucent Technologies, Inc. 3.6% - ------------------------------------------------------ Top Ten Total 48.5% - ------------------------------------------------------ "Ten Largest Holdings" excludes any temporary cash investments and equity index products. See Notes to Financial Statements. 46 | THE RYDEX VARIABLE TRUST ANNUAL REPORT PERFORMANCE REPORTS AND FUND PROFILES (CONTINUED) - -------------------------------------------------------------------------------- TRANSPORTATION FUND OBJECTIVE: Seeks capital appreciation by investing in companies engaged in providing transportation services or companies engaged in the design, manufacture, distribution or sale of transportation equipment. Inception: June 11, 2001 The transportation industry outperformed the S&P 500 Index in 2004, despite the poor performance of legacy airlines. Rydex Transportation Fund was up 22.99% for the year. Despite rising fuel costs, trucking stocks were among the best performers in the group due to consolidation in the industry and increased demand for their services. The road and rail group and air freight logistics companies also had strong years. Soaring fuel costs, high capacity and mounting labor costs drove stock prices down for legacy air carriers, such as United and Continental. Fund holdings JetBlue Airways and Southwest Airways, fared better than most due to pre-purchases of jet fuel before prices rose and lower labor costs. The Fund's modified cap weighting and stock selection contributed to its outperformance. CUMULATIVE FUND PERFORMANCE: JUNE 11, 2001 - DECEMBER 31, 2004 [THE FOLLOWING TABLE WAS REPRESENTED BY A LINE GRAPH IN THE PRINTED MATERIAL.] DATE TRANSPORTATION FUND S&P 500 INDEX - ---- ------------------- ------------- 6/11/2001 10,000 10,000 6/30/2001 10,008 9,766 7/31/2001 10,184 9,670 8/31/2001 9,760 9,065 9/30/2001 8,112 8,333 10/31/2001 8,392 8,492 11/30/2001 9,448 9,143 12/31/2001 9,760 9,223 1/31/2002 10,312 9,089 2/28/2002 10,412 8,913 3/31/2002 10,584 9,249 4/30/2002 9,704 8,688 5/31/2002 9,820 8,624 6/30/2002 9,748 8,010 7/31/2002 8,652 7,385 8/31/2002 8,404 7,434 9/30/2002 8,004 6,626 10/31/2002 8,484 7,209 11/30/2002 8,780 7,633 12/31/2002 8,620 7,185 1/31/2003 7,940 6,997 2/28/2003 7,608 6,892 3/31/2003 7,860 6,959 4/30/2003 8,704 7,532 5/31/2003 8,972 7,929 6/30/2003 8,904 8,030 7/31/2003 9,316 8,171 8/31/2003 9,568 8,331 9/30/2003 9,508 8,242 10/31/2003 10,204 8,709 11/30/2003 10,200 8,785 12/31/2003 10,388 9,246 1/31/2004 9,900 9,416 2/29/2004 9,888 9,546 3/31/2004 9,936 9,402 4/30/2004 10,004 9,255 5/31/2004 10,220 9,382 6/30/2004 11,000 9,564 7/31/2004 10,444 9,248 8/31/2004 10,440 9,285 9/30/2004 10,838 9,386 10/31/2004 11,700 9,529 11/30/2004 12,337 9,915 12/31/2004 12,776 10,252 AVERAGE ANNUAL TOTAL RETURNS FOR THE PERIOD ENDED 12/31/04 - -------------------------------------------------------------------------------- SINCE ONE INCEPTION YEAR (06/11/01) - -------------------------------------------------------------------------------- TRANSPORTATION FUND 22.99% 7.13% S&P 500 INDEX 10.89% 0.70% - -------------------------------------------------------------------------------- THE RETURNS PRESENTED ABOVE DO NOT REFLECT THE EFFECTS OF TAXES. PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS. THE S&P 500 INDEX IS AN UNMANAGED STOCK INDEX AND, UNLIKE THE FUND, HAS NO MANAGEMENT FEES OR OTHER OPERATING EXPENSES TO REDUCE ITS REPORTED RETURNS. RETURNS ARE HISTORICAL AND INCLUDE CHANGES IN PRINCIPAL AND REINVESTED DIVIDENDS AND CAPITAL GAINS. INDUSTRY DIVERSIFICATION (MARKET EXPOSURE AS % OF NET ASSETS) [THE FOLLOWING TABLE WAS REPRESENTED BY A PIE CHART IN THE PRINTED MATERIAL.] TRANSPOTATION FUND ROAD & RAIL 44% AIR FREIGHT & LOGISTICS 33% AIRLINES 20% OTHER 3% "Industry Diversification (Market Exposure as % of Net Assets)" excludes any temporary cash investments. TEN LARGEST HOLDINGS (% OF TOTAL NET ASSETS) - ------------------------------------------------------ United Parcel Service, Inc. - Class B 11.8% FedEx Corp. 7.9% Norfolk Southern Corp. 6.5% Burlington Northern Santa Fe Corp. 6.0% Union Pacific Corp. 5.8% Southwest Airlines Co. 5.5% CNF, Inc. 4.0% CSX Corp. 3.9% JB Hunt Transport Services, Inc. 3.3% Yellow Roadway Corp. 2.9% - ------------------------------------------------------ Top Ten Total 57.6% - ------------------------------------------------------ "Ten Largest Holdings" excludes any temporary cash investments and equity index products. See Notes to Financial Statements. THE RYDEX VARIABLE TRUST ANNUAL REPORT | 47 PERFORMANCE REPORTS AND FUND PROFILES (CONCLUDED) - -------------------------------------------------------------------------------- UTILITIES FUND OBJECTIVE: Seeks capital appreciation by investing in companies that operate public utilities ("Utilities Companies"). Inception: May 2, 2001 Higher interest rates didn't dampen the performance of the utilities sector, which had a surprisingly strong year. The enactment of new federal tax legislation, which lowered the federal income tax rate on most stock dividends to 15%, likely helped companies in this sector. Utilities companies typically pay higher dividends than most other sectors, relative to their share prices. Rydex Utilities Fund returned 17.31% for 2004. CUMULATIVE FUND PERFORMANCE: MAY 2, 2001 - DECEMBER 31, 2004 [THE FOLLOWING TABLE WAS REPRESENTED BY A LINE GRAPH IN THE PRINTED MATERIAL.] DATE UTILITIES FUND S&P 500 INDEX - ---- -------------- ------------- 5/2/2001 10,000 10,000 5/31/2001 9,904 9,924 6/30/2001 9,124 9,682 7/31/2001 8,672 9,587 8/31/2001 8,460 8,987 9/30/2001 7,548 8,261 10/31/2001 7,500 8,419 11/30/2001 7,072 9,065 12/31/2001 7,292 9,144 1/31/2002 6,736 9,011 2/28/2002 6,528 8,837 3/31/2002 7,276 9,169 4/30/2002 7,144 8,613 5/31/2002 6,516 8,550 6/30/2002 6,032 7,941 7/31/2002 5,156 7,322 8/31/2002 5,336 7,370 9/30/2002 4,674 6,569 10/31/2002 4,646 7,147 11/30/2002 4,778 7,568 12/31/2002 4,898 7,123 1/31/2003 4,774 6,937 2/28/2003 4,562 6,832 3/31/2003 4,798 6,899 4/30/2003 5,254 7,467 5/31/2003 5,803 7,860 6/30/2003 5,791 7,961 7/31/2003 5,475 8,101 8/31/2003 5,563 8,259 9/30/2003 5,785 8,171 10/31/2003 5,867 8,634 11/30/2003 5,896 8,710 12/31/2003 6,142 9,166 1/31/2004 6,257 9,335 2/29/2004 6,339 9,464 3/31/2004 6,368 9,322 4/30/2004 6,175 9,175 5/31/2004 6,270 9,301 6/30/2004 6,376 9,482 7/31/2004 6,331 9,168 8/31/2004 6,549 9,205 9/30/2004 6,607 9,305 10/31/2004 6,761 9,447 11/30/2004 7,048 9,829 12/31/2004 7,206 10,164 AVERAGE ANNUAL TOTAL RETURNS FOR THE PERIOD ENDED 12/31/04 - -------------------------------------------------------------------------------- SINCE ONE INCEPTION YEAR (05/02/01) - -------------------------------------------------------------------------------- UTILITIES FUND 17.31% -8.55% S&P 500 INDEX 10.89% 0.44% - -------------------------------------------------------------------------------- THE RETURNS PRESENTED ABOVE DO NOT REFLECT THE EFFECTS OF TAXES. PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS. THE S&P 500 INDEX IS AN UNMANAGED STOCK INDEX AND, UNLIKE THE FUND, HAS NO MANAGEMENT FEES OR OTHER OPERATING EXPENSES TO REDUCE ITS REPORTED RETURNS. RETURNS ARE HISTORICAL AND INCLUDE CHANGES IN PRINCIPAL AND REINVESTED DIVIDENDS AND CAPITAL GAINS. INDUSTRY DIVERSIFICATION (MARKET EXPOSURE AS % OF NET ASSETS) [THE FOLLOWING TABLE WAS REPRESENTED BY A PIE CHART IN THE PRINTED MATERIAL.] UTILITIES FUND ELECTRIC UTILITIES 57% MULTI-UTILITIES & UNREGULATED POWER 30% GAS UTILITIES 11% OTHER 1% "Industry Diversification (Market Exposure as % of Net Assets)" excludes any temporary cash investments. TEN LARGEST HOLDINGS (% OF TOTAL NET ASSETS) - ------------------------------------------------------ Exelon Corp. 4.6% FirstEnergy Corp. 3.4% Consolidated Edison, Inc. 3.3% Progress Energy, Inc. 3.2% Public Service Enterprise Group, Inc. 3.2% Constellation Energy Group, Inc. 3.0% TXU Corp. 2.9% DTE Energy Co. 2.8% Pinnacle West Capital Corp. 2.7% Energy East Corp. 2.7% - ------------------------------------------------------ Top Ten Total 31.8% - ------------------------------------------------------ "Ten Largest Holdings" excludes any temporary cash investments and equity index products. See Notes to Financial Statements. 48 | THE RYDEX VARIABLE TRUST ANNUAL REPORT SCHEDULE OF INVESTMENTS December 31, 2004 - -------------------------------------------------------------------------------- NOVA FUND - -------------------------------------------------------------------------------- MARKET VALUE SHARES (NOTE 1) - ------------------------------------------------------------------------------ COMMON STOCKS 75.9% FINANCIALS 15.2% BANKS 4.0% Bank of America Corp. 37,360 $ 1,755,546 Wachovia Corp.+ 13,630 716,938 U.S. Bancorp 20,760 650,203 National City Corp. 16,110 604,931 Wells Fargo & Co. 8,630 536,355 KeyCorp 15,030 509,517 Comerica, Inc.+ 7,670 468,023 --------------- TOTAL BANKS 5,241,513 --------------- INSURANCE 3.6% American International Group, Inc.+ 22,260 1,461,814 Allstate Corp. 13,650 705,978 Loews Corp. 7,100 499,130 SAFECO Corp.+ 8,970 468,593 Lincoln National Corp.+ 9,680 451,862 Chubb Corp.+ 4,530 348,357 ACE Ltd. 8,010 342,427 Prudential Financial, Inc. 6,050 332,508 Torchmark Corp. 1,840 105,138 --------------- TOTAL INSURANCE 4,715,807 --------------- DIVERSIFIED FINANCIALS 3.4% Citigroup, Inc. 36,960 1,780,733 J.P. Morgan Chase & Co. 41,320 1,611,893 Principal Financial Group, Inc. 12,760 522,395 CIT Group, Inc. 10,810 495,314 --------------- TOTAL DIVERSIFIED FINANCIALS 4,410,335 --------------- THRIFTS & MORTGAGE FINANCE 1.9% Fannie Mae+ 13,930 991,955 Freddie Mac 11,480 846,076 MGIC Investment Corp.+ 6,570 452,739 Countrywide Financial Corp. 3,650 135,086 --------------- TOTAL THRIFTS & MORTGAGE FINANCE 2,425,856 --------------- CONSUMER FINANCE 1.3% American Express Co. 10,920 615,560 Capital One Financial Corp.+ 6,970 586,944 Providian Financial Corp.* 26,850 442,220 --------------- TOTAL CONSUMER FINANCE 1,644,724 --------------- CAPITAL MARKETS 1.0% Bear Stearns Cos., Inc.+ 4,780 489,042 Franklin Resources, Inc.+ 6,390 445,064 Janus Capital Group, Inc. 8,530 143,389 Morgan Stanley 2,200 122,144 Merrill Lynch & Co., Inc. 1,410 84,276 Goldman Sachs Group, Inc.+ 634 65,961 --------------- TOTAL CAPITAL MARKETS 1,349,876 --------------- MARKET VALUE SHARES (NOTE 1) - ------------------------------------------------------------------------------ REAL ESTATE 0.0% Equity Office Properties Trust 1,640 $ 47,757 --------------- TOTAL REAL ESTATE 47,757 --------------- TOTAL FINANCIALS 19,835,868 --------------- INFORMATION TECHNOLOGY 12.8% SOFTWARE 2.7% Microsoft Corp. 81,960 2,189,152 BMC Software, Inc.* 22,540 419,244 Compuware Corp.* 56,300 364,261 Oracle Corp.* 16,420 225,282 Novell, Inc.*+ 29,490 199,058 Veritas Software Corp.* 2,620 74,801 Symantec Corp.*+ 1,940 49,974 --------------- TOTAL SOFTWARE 3,521,772 --------------- SEMICONDUCTOR & SEMICONDUCTOR EQUIPMENT 2.6% Intel Corp. 53,990 1,262,826 Applied Materials, Inc.*+ 37,040 633,384 Micron Technology, Inc.*+ 36,520 451,022 Broadcom Corp. -- Class A*+ 13,700 442,236 National Semiconductor Corp.+ 18,590 333,691 Texas Instruments, Inc.+ 7,560 186,127 --------------- TOTAL SEMICONDUCTOR & SEMICONDUCTOR EQUIPMENT 3,309,286 --------------- COMPUTERS & PERIPHERALS 2.5% International Business Machines Corp. 18,710 1,844,432 Hewlett-Packard Co. 31,500 660,555 Dell, Inc.* 12,540 528,436 Sun Microsystems, Inc.* 31,880 171,514 Apple Computer, Inc.* 1,410 90,804 --------------- TOTAL COMPUTERS & PERIPHERALS 3,295,741 --------------- COMMUNICATIONS EQUIPMENT 2.4% Cisco Systems, Inc.*+ 59,260 1,143,718 Motorola, Inc.+ 40,430 695,396 Comverse Technology, Inc.* 19,140 467,973 Tellabs, Inc.*+ 49,910 428,727 Qualcomm, Inc. 5,390 228,536 Scientific-Atlanta, Inc.+ 3,850 127,088 --------------- TOTAL COMMUNICATIONS EQUIPMENT 3,091,438 --------------- IT CONSULTING & SERVICES 1.7% First Data Corp. 16,430 698,932 Affiliated Computer Services, Inc. -- Class A*+ 7,610 458,046 Sabre Holdings Corp.+ 17,770 393,783 Computer Sciences Corp.*+ 6,830 385,007 SunGard Data Systems, Inc.*+ 9,570 271,118 --------------- TOTAL IT CONSULTING & SERVICES 2,206,886 --------------- See Notes to Financial Statements. THE RYDEX VARIABLE TRUST ANNUAL REPORT | 49 SCHEDULE OF INVESTMENTS (CONTINUED) December 31, 2004 - -------------------------------------------------------------------------------- NOVA FUND - -------------------------------------------------------------------------------- MARKET VALUE SHARES (NOTE 1) - ------------------------------------------------------------------------------ OFFICE ELECTRONICS 0.5% Xerox Corp.* 36,610 $ 622,736 --------------- TOTAL OFFICE ELECTRONICS 622,736 --------------- ELECTRONIC EQUIPMENT & INSTRUMENTS 0.3% Molex, Inc. 14,000 420,000 Agilent Technologies, Inc.* 760 18,316 --------------- TOTAL ELECTRONIC EQUIPMENT & INSTRUMENTS 438,316 --------------- INTERNET SOFTWARE & SERVICES 0.1% Yahoo!, Inc.*+ 4,010 151,097 --------------- TOTAL INTERNET SOFTWARE & SERVICES 151,097 --------------- TOTAL INFORMATION TECHNOLOGY 16,637,272 --------------- HEALTH CARE 9.7% PHARMACEUTICALS 5.3% Pfizer, Inc. 78,800 2,118,932 Johnson & Johnson, Inc.+ 28,080 1,780,834 Merck & Co., Inc. 31,870 1,024,302 Wyeth 21,050 896,519 Abbott Laboratories 7,920 369,468 Forest Laboratories, Inc.*+ 6,880 308,637 Eli Lilly & Co. 2,840 161,170 Mylan Laboratories, Inc.+ 5,350 94,588 Watson Pharmaceuticals, Inc.*+ 2,780 91,212 Bristol-Myers Squibb Co. 1,020 26,132 --------------- TOTAL PHARMACEUTICALS 6,871,794 --------------- HEALTH CARE PROVIDERS & SERVICES 2.0% WellPoint, Inc.* 6,250 718,750 Aetna, Inc. 4,480 558,880 CIGNA Corp. 6,380 520,417 Laboratory Corporation of America Holdings*+ 9,320 464,322 Quest Diagnostics, Inc.+ 1,830 174,857 UnitedHealth Group, Inc.+ 1,560 137,327 Cardinal Health, Inc. 1,160 67,454 --------------- TOTAL HEALTH CARE PROVIDERS & SERVICES 2,642,007 --------------- HEALTH CARE EQUIPMENT & SUPPLIES 1.4% Hospira, Inc.* 13,580 454,930 Becton, Dickinson & Co. 7,520 427,136 Bausch & Lomb, Inc.+ 6,590 424,792 Thermo Electron Corp.* 14,060 424,471 Medtronic, Inc. 2,720 135,102 --------------- TOTAL HEALTH CARE EQUIPMENT & SUPPLIES 1,866,431 --------------- BIOTECHNOLOGY 1.0% Genzyme Corp.* 9,780 567,924 Amgen, Inc.*+ 4,940 316,901 Biogen Idec, Inc.*+ 3,670 244,459 MARKET VALUE SHARES (NOTE 1) - ------------------------------------------------------------------------------ Gilead Sciences, Inc.* 2,160 $ 75,578 Chiron Corp.* 2,020 67,327 --------------- TOTAL BIOTECHNOLOGY 1,272,189 --------------- TOTAL HEALTH CARE 12,652,421 --------------- INDUSTRIALS 8.9% INDUSTRIAL CONGLOMERATES 3.6% General Electric Co. 81,810 2,986,065 Tyco International Ltd.+ 28,900 1,032,886 Textron, Inc. 6,410 473,058 3M Co. 2,010 164,961 --------------- TOTAL INDUSTRIAL CONGLOMERATES 4,656,970 --------------- MACHINERY 1.4% Illinois Tool Works, Inc. 5,590 518,081 Dover Corp. 11,120 466,373 Parker Hannifin Corp. 3,970 300,688 Paccar, Inc.+ 3,310 266,389 Danaher Corp.+ 2,410 138,358 Eaton Corp.+ 1,810 130,972 Cummins, Inc. 780 65,356 --------------- TOTAL MACHINERY 1,886,217 --------------- AEROSPACE & DEFENSE 1.4% Lockheed Martin Corp. 10,210 567,165 Northrop Grumman Corp.+ 9,930 539,795 Raytheon Co. 7,650 297,050 General Dynamics Corp. 2,770 289,742 L-3 Communications Holdings, Inc. 910 66,648 United Technologies Corp. 580 59,943 Boeing Co. 300 15,531 --------------- TOTAL AEROSPACE & DEFENSE 1,835,874 --------------- ROAD & RAIL 0.8% Burlington Northern Santa Fe Corp. 11,760 556,365 Norfolk Southern Corp. 14,130 511,365 --------------- TOTAL ROAD & RAIL 1,067,730 --------------- COMMERCIAL SERVICES & SUPPLIES 0.8% Cendant Corp. 24,420 570,939 Waste Management, Inc. 7,450 223,053 Robert Half International, Inc. 5,900 173,637 Monster Worldwide, Inc.*+ 1,990 66,944 --------------- TOTAL COMMERCIAL SERVICES & SUPPLIES 1,034,573 --------------- AIR FREIGHT & COURIERS 0.5% United Parcel Service, Inc. -- Class B+ 5,330 455,502 FedEx Corp.+ 2,560 252,134 --------------- TOTAL AIR FREIGHT & COURIERS 707,636 --------------- BUILDING PRODUCTS 0.2% Masco Corp.+ 7,030 256,806 --------------- TOTAL BUILDING PRODUCTS 256,806 --------------- See Notes to Financial Statements. 50 | THE RYDEX VARIABLE TRUST ANNUAL REPORT SCHEDULE OF INVESTMENTS (CONTINUED) December 31, 2004 - -------------------------------------------------------------------------------- NOVA FUND - -------------------------------------------------------------------------------- MARKET VALUE SHARES (NOTE 1) - ------------------------------------------------------------------------------ TRADING COMPANIES & DISTRIBUTORS 0.2% W.W. Grainger, Inc. 3,020 $ 201,192 --------------- TOTAL TRADING COMPANIES & DISTRIBUTORS 201,192 --------------- TOTAL INDUSTRIALS 11,646,998 --------------- CONSUMER DISCRETIONARY 8.8% MEDIA 2.8% Comcast Corp. -- Class A* 32,570 1,083,929 Walt Disney Co.+ 32,050 890,990 Viacom, Inc. -- Class B 14,720 535,661 McGraw-Hill Cos., Inc. 4,310 394,537 Time Warner, Inc.*+ 18,840 366,250 Clear Channel Communications, Inc.+ 6,310 211,322 Gannett Co., Inc. 1,080 88,236 --------------- TOTAL MEDIA 3,570,925 --------------- SPECIALTY RETAIL 1.6% Home Depot, Inc. 18,980 811,205 Limited Brands, Inc.+ 19,730 454,185 Sherwin-Williams Co. 9,860 440,052 Circuit City Stores, Inc. 23,050 360,502 Toys `R' Us, Inc.*+ 1,620 33,161 TJX Cos., Inc.+ 970 24,376 Lowe's Cos., Inc.+ 90 5,183 --------------- TOTAL SPECIALTY RETAIL 2,128,664 --------------- HOTELS RESTAURANTS & LEISURE 1.3% Marriott International, Inc. -- Class A 8,710 548,556 Starwood Hotels & Resorts Worldwide, Inc.+ 9,100 531,440 Carnival Corp.+ 7,330 422,428 McDonald's Corp. 3,160 101,310 Starbucks Corp.* 170 10,601 --------------- TOTAL HOTELS RESTAURANTS & LEISURE 1,614,335 --------------- MULTILINE RETAIL 0.8% JC Penney Holding Co., Inc.+ 10,810 447,534 Federated Department Stores, Inc. 7,350 424,757 Nordstrom, Inc. 1,710 79,908 Target Corp. 600 31,158 --------------- TOTAL MULTILINE RETAIL 983,357 --------------- TEXTILES & APPAREL 0.7% Nike, Inc. -- Class B 6,160 558,650 Jones Apparel Group, Inc. 10,940 400,076 --------------- TOTAL TEXTILES & APPAREL 958,726 --------------- MARKET VALUE SHARES (NOTE 1) - ------------------------------------------------------------------------------ AUTOMOBILES 0.6% Ford Motor Co.+ 42,890 $ 627,910 Harley-Davidson, Inc. 2,950 179,212 --------------- TOTAL AUTOMOBILES 807,122 --------------- INTERNET & CATALOG RETAIL 0.5% eBay, Inc.*+ 6,020 700,006 --------------- TOTAL INTERNET & CATALOG RETAIL 700,006 --------------- DISTRIBUTORS 0.3% Genuine Parts Co. 9,600 422,976 --------------- TOTAL DISTRIBUTORS 422,976 --------------- HOUSEHOLD DURABLES 0.1% Leggett & Platt, Inc.+ 3,640 103,485 Stanley Works 700 34,293 --------------- TOTAL HOUSEHOLD DURABLES 137,778 --------------- LEISURE EQUIPMENT & PRODUCTS 0.1% Brunswick Corp. 2,360 116,820 --------------- TOTAL LEISURE EQUIPMENT & PRODUCTS 116,820 --------------- TOTAL CONSUMER DISCRETIONARY 11,440,709 --------------- CONSUMER STAPLES 8.0% FOOD & DRUG RETAILING 2.4% Wal-Mart Stores, Inc. 30,270 1,598,862 Costco Wholesale Corp.+ 11,920 577,047 Albertson's, Inc.+ 19,240 459,451 Supervalu, Inc.+ 13,260 457,735 Walgreen Co. 2,570 98,611 --------------- TOTAL FOOD & DRUG RETAILING 3,191,706 --------------- BEVERAGES 1.7% Coca-Cola Co. 11,690 486,654 Brown-Forman Corp. -- Class B 9,200 447,856 Pepsi Bottling Group, Inc.+ 16,020 433,181 Adolph Coors Co. -- Class B+ 5,530 418,455 PepsiCo, Inc. 7,380 385,236 --------------- TOTAL BEVERAGES 2,171,382 --------------- HOUSEHOLD PRODUCTS 1.6% Procter & Gamble Co. 16,630 915,980 Kimberly-Clark Corp. 10,290 677,185 Clorox Co. 8,050 474,387 --------------- TOTAL HOUSEHOLD PRODUCTS 2,067,552 --------------- TOBACCO 1.2% Altria Group, Inc.+ 24,680 1,507,948 --------------- TOTAL TOBACCO 1,507,948 --------------- FOOD PRODUCTS 0.8% Archer-Daniels-Midland Co. 23,450 523,170 See Notes to Financial Statements. THE RYDEX VARIABLE TRUST ANNUAL REPORT | 51 SCHEDULE OF INVESTMENTS (CONTINUED) December 31, 2004 - -------------------------------------------------------------------------------- NOVA FUND - -------------------------------------------------------------------------------- MARKET VALUE SHARES (NOTE 1) - ------------------------------------------------------------------------------ McCormick & Co., Inc.+ 8,020 $ 309,572 Sara Lee Corp. 11,360 274,230 --------------- TOTAL FOOD PRODUCTS 1,106,972 --------------- PERSONAL PRODUCTS 0.3% Gillette Co.+ 8,130 364,061 --------------- TOTAL PERSONAL PRODUCTS 364,061 --------------- TOTAL CONSUMER STAPLES 10,409,621 --------------- ENERGY 5.4% OIL & GAS 5.3% Exxon Mobil Corp. 62,790 3,218,616 ConocoPhillips 10,550 916,057 ChevronTexaco Corp.+ 11,300 593,363 Burlington Resources, Inc.+ 12,530 545,055 Occidental Petroleum Corp. 9,140 533,410 Amerada Hess Corp.+ 4,630 381,419 Devon Energy Corp. 9,470 368,572 Valero Energy Corp.+ 5,320 241,528 Anadarko Petroleum Corp. 1,090 70,643 --------------- TOTAL OIL & GAS 6,868,663 --------------- ENERGY EQUIPMENT & SERVICES 0.1% Transocean, Inc.*+ 3,400 144,126 --------------- TOTAL ENERGY EQUIPMENT & SERVICES 144,126 --------------- TOTAL ENERGY 7,012,789 --------------- TELECOMMUNICATION SERVICES 2.5% DIVERSIFIED TELECOMMUNICATION SERVICES 2.5% SBC Communications, Inc. 43,380 1,117,903 BellSouth Corp. 25,950 721,150 Verizon Communications, Inc.+ 15,160 614,132 Alltel Corp. 9,310 547,056 CenturyTel, Inc.+ 6,120 217,076 --------------- TOTAL DIVERSIFIED TELECOMMUNICATION SERVICES 3,217,317 --------------- TOTAL TELECOMMUNICATION SERVICES 3,217,317 --------------- MATERIALS 2.4% PAPER & FOREST PRODUCTS 1.1% Georgia-Pacific Corp.+ 11,900 446,012 MeadWestvaco Corp. 13,090 443,620 Louisiana-Pacific Corp.+ 11,080 296,279 Weyerhaeuser Co. 3,630 244,009 --------------- TOTAL PAPER & FOREST PRODUCTS 1,429,920 --------------- METALS & MINING 0.8% Phelps Dodge Corp.+ 4,980 492,622 Nucor Corp.+ 6,850 358,529 Newmont Mining Corp.+ 5,650 250,916 --------------- TOTAL METALS & MINING 1,102,067 --------------- MARKET VALUE SHARES (NOTE 1) - ------------------------------------------------------------------------------ CHEMICALS 0.5% Monsanto Co.+ 10,650 $ 591,607 Dow Chemical Co. 480 23,765 EI Du Pont de Nemours & Co. 320 15,696 --------------- TOTAL CHEMICALS 631,068 --------------- TOTAL MATERIALS 3,163,055 --------------- UTILITIES 2.2% ELECTRIC UTILITIES 1.8% Exelon Corp.+ 15,170 668,542 American Electric Power Co., Inc.+ 14,900 511,666 FirstEnergy Corp. 12,780 504,938 PPL Corp. 9,170 488,577 Entergy Corp.+ 3,240 218,992 TXU Corp. 140 9,038 --------------- TOTAL ELECTRIC UTILITIES 2,401,753 --------------- MULTI-UTILITIES 0.4% Duke Energy Corp.+ 13,160 333,343 Constellation Energy Group, Inc. 3,260 142,495 --------------- TOTAL MULTI-UTILITIES 475,838 --------------- TOTAL UTILITIES 2,877,591 --------------- TOTAL COMMON STOCKS (Cost $88,750,718) 98,893,641 --------------- FACE AMOUNT -------------- REPURCHASE AGREEMENTS 20.2% Repurchase Agreement (Note 5) 1.55% due 01/03/05 $ 6,527,151 6,527,151 1.48% due 01/03/05 13,240,092 13,240,092 1.25% due 01/03/05 6,481,164 6,481,164 --------------- TOTAL REPURCHASE AGREEMENTS (Cost $26,248,407) 26,248,407 --------------- SECURITIES LENDING COLLATERAL 10.6% Investment in Securities Lending Short Term Investment Portfolio held by U.S. Bank (Note 8) 13,804,518 13,804,518 --------------- TOTAL SECURITIES LENDING COLLATERAL (Cost $13,804,518) 13,804,518 --------------- TOTAL INVESTMENTS 106.7% (Cost $128,803,643) $ 138,946,566 =============== LIABILITIES IN EXCESS OF OTHER ASSETS - (6.7)% $ (8,746,536) =============== NET ASSETS - 100.0% $ 130,200,030 ============================================================================== See Notes to Financial Statements. 52 | THE RYDEX VARIABLE TRUST ANNUAL REPORT SCHEDULE OF INVESTMENTS (CONCLUDED) December 31, 2004 - -------------------------------------------------------------------------------- NOVA FUND - -------------------------------------------------------------------------------- UNREALIZED GAIN CONTRACTS (NOTE 1) - ------------------------------------------------------------------------------ FUTURES CONTRACTS PURCHASED March 2005 S&P 500 Index Mini Futures Contracts (Aggregate Market Value of Contracts $96,473,250) 1,590 $ 1,090,290 =============== * NON-INCOME PRODUCING SECURITIES. + ALL OR A PORTION OF THIS SECURITY IS ON LOAN AT DECEMBER 31, 2004 - SEE NOTE 8. See Notes to Financial Statements. THE RYDEX VARIABLE TRUST ANNUAL REPORT | 53 SCHEDULE OF INVESTMENTS December 31, 2004 - -------------------------------------------------------------------------------- URSA FUND - -------------------------------------------------------------------------------- MARKET FACE VALUE AMOUNT (NOTE 1) - ------------------------------------------------------------------------------ FEDERAL AGENCY DISCOUNT NOTES 47.2% Fannie Mae* 2.17% due 01/07/05 $ 2,000,000 $ 1,999,518 Federal Farm Credit Bank* 2.18% due 01/06/05 3,000,000 2,999,455 Federal Home Loan Bank* 2.20% due 01/07/05 2,000,000 1,999,511 Freddie Mac* 2.21% due 01/14/05 2,000,000 1,998,649 --------------- TOTAL FEDERAL AGENCY DISCOUNT NOTES (Cost $8,997,133) 8,997,133 --------------- REPURCHASE AGREEMENTS 46.5% Repurchase Agreement (Note 5) 1.55% due 01/03/05 2,207,968 2,207,968 1.48% due 01/03/05 4,478,783 4,478,783 1.25% due 01/03/05 2,192,412 2,192,412 --------------- TOTAL REPURCHASE AGREEMENTS (Cost $8,879,163) 8,879,163 --------------- TOTAL INVESTMENTS 93.7% (Cost $17,876,296) $ 17,876,296 =============== OTHER ASSETS IN EXCESS OF LIABILITIES - 6.3% $ 1,199,328 =============== NET ASSETS - 100.0% $ 19,075,624 ============================================================================== UNREALIZED LOSS CONTRACTS (NOTE 1) - ------------------------------------------------------------------------------ FUTURES CONTRACTS SOLD SHORT March 2005 S&P 500 Index Mini Futures Contracts (Aggregate Market Value of Contracts $19,051,950) 314 $ (407,049) =============== * The issuer is a publicly traded company that operates under a Congressional charter; its securities are neither issued nor guaranteed by the U.S. Government. See Notes to Financial Statements. 54 | THE RYDEX VARIABLE TRUST ANNUAL REPORT SCHEDULE OF INVESTMENTS December 31, 2004 - -------------------------------------------------------------------------------- OTC FUND - -------------------------------------------------------------------------------- MARKET VALUE SHARES (NOTE 1) - ------------------------------------------------------------------------------ COMMON STOCKS 89.4% INFORMATION TECHNOLOGY 53.2% SOFTWARE 17.4% Microsoft Corp. 572,830 $ 15,300,289 Oracle Corp.* 355,250 4,874,030 Electronic Arts, Inc.*+ 39,560 2,440,061 Adobe Systems, Inc.+ 36,640 2,298,794 Symantec Corp.*+ 89,200 2,297,792 Veritas Software Corp.* 54,880 1,566,824 Mercury Interactive Corp.*+ 30,290 1,379,709 Check Point Software Technologies Ltd.*+ 30,120 741,856 Siebel Systems, Inc.* 61,110 641,655 Citrix Systems, Inc.* 22,800 559,284 BEA Systems, Inc.* 51,350 454,961 Intuit, Inc.*+ 10,150 446,701 Synopsys, Inc.*+ 13,260 260,161 --------------- TOTAL SOFTWARE 33,262,117 --------------- COMMUNICATIONS EQUIPMENT 12.7% Qualcomm, Inc. 260,110 11,028,664 Cisco Systems, Inc.*+ 351,310 6,780,283 Comverse Technology, Inc.*+ 122,120 2,985,834 Research In Motion Ltd.*+ 24,890 2,051,434 Juniper Networks, Inc.*+ 40,400 1,098,476 Tellabs, Inc.*+ 34,610 297,300 JDS Uniphase Corp.*+ 53,190 168,612 --------------- TOTAL COMMUNICATIONS EQUIPMENT 24,410,603 --------------- SEMICONDUCTOR & SEMICONDUCTOR EQUIPMENT 12.1% Intel Corp. 318,670 7,453,691 Maxim Integrated Products, Inc.+ 72,540 3,074,971 Applied Materials, Inc.*+ 132,850 2,271,735 Xilinx, Inc.+ 55,010 1,631,047 KLA-Tencor Corp.*+ 33,470 1,559,033 Lam Research Corp.*+ 53,770 1,554,491 Broadcom Corp. -- Class A*+ 42,780 1,380,938 Altera Corp.*+ 63,990 1,324,593 Microchip Technology, Inc. 33,020 880,313 ATI Technologies, Inc.* 38,780 751,944 Novellus Systems, Inc.*+ 20,200 563,378 Marvell Technology Group Ltd.*+ 13,000 461,110 Intersil Corp. -- Class A 10,480 175,435 Linear Technology Corp. 4,420 171,319 --------------- TOTAL SEMICONDUCTOR & SEMICONDUCTOR EQUIPMENT 23,253,998 --------------- COMPUTERS & PERIPHERALS 6.6% Dell, Inc.*+ 143,590 6,050,883 Apple Computer, Inc.* 71,210 4,585,924 MARKET VALUE SHARES (NOTE 1) - ------------------------------------------------------------------------------ Sun Microsystems, Inc.* 163,910 $ 881,836 Sandisk Corp.*+ 20,130 502,646 QLogic Corp.*+ 12,410 455,819 Network Appliance, Inc.*+ 5,600 186,032 --------------- TOTAL COMPUTERS & PERIPHERALS 12,663,140 --------------- INTERNET SOFTWARE & SERVICES 2.3% Yahoo!, Inc.*+ 96,080 3,620,294 VeriSign, Inc.*+ 20,990 703,585 --------------- TOTAL INTERNET SOFTWARE & SERVICES 4,323,879 --------------- IT CONSULTING & SERVICES 1.3% Paychex, Inc.+ 51,010 1,738,421 Cognizant Technology Solutions Corp.* 16,240 687,439 --------------- TOTAL IT CONSULTING & SERVICES 2,425,860 --------------- ELECTRONIC EQUIPMENT & INSTRUMENTS 0.8% Flextronics International Ltd.*+ 78,280 1,081,830 Sanmina-SCI Corp.*+ 52,750 446,792 --------------- TOTAL ELECTRONIC EQUIPMENT & INSTRUMENTS 1,528,622 --------------- TOTAL INFORMATION TECHNOLOGY 101,868,219 --------------- CONSUMER DISCRETIONARY 15.7% INTERNET & CATALOG RETAIL 6.2% eBay, Inc.*+ 64,540 7,504,711 InterActiveCorp*+ 87,940 2,428,903 Amazon.com, Inc.*+ 41,690 1,846,450 --------------- TOTAL INTERNET & CATALOG RETAIL 11,780,064 --------------- MEDIA 3.3% Comcast Corp. -- Class A*+ 124,890 4,156,339 EchoStar Communications Corp.+ 41,140 1,367,493 Lamar Advertising Co.*+ 13,010 556,568 Pixar* 2,570 220,018 --------------- TOTAL MEDIA 6,300,418 --------------- SPECIALTY RETAIL 2.6% Staples, Inc.+ 62,540 2,108,224 Bed Bath & Beyond, Inc.*+ 43,840 1,746,147 Petsmart, Inc.+ 17,830 633,500 Ross Stores, Inc.+ 17,130 494,543 --------------- TOTAL SPECIALTY RETAIL 4,982,414 --------------- HOTELS, RESTAURANTS & LEISURE 2.4% Starbucks Corp.*+ 74,070 4,619,005 --------------- TOTAL HOTELS, RESTAURANTS & LEISURE 4,619,005 --------------- MULTILINE RETAIL 0.8% Kmart Holding Corp.*+ 13,530 1,338,794 Dollar Tree Stores, Inc.*+ 7,550 216,534 --------------- TOTAL MULTILINE RETAIL 1,555,328 --------------- See Notes to Financial Statements. THE RYDEX VARIABLE TRUST ANNUAL REPORT | 55 SCHEDULE OF INVESTMENTS (CONTINUED) December 31, 2004 - -------------------------------------------------------------------------------- OTC FUND - -------------------------------------------------------------------------------- MARKET VALUE SHARES (NOTE 1) - ------------------------------------------------------------------------------ HOUSEHOLD DURABLES 0.4% Garmin Ltd.+ 14,030 $ 853,585 --------------- TOTAL HOUSEHOLD DURABLES 853,585 --------------- TOTAL CONSUMER DISCRETIONARY 30,090,814 --------------- HEALTH CARE 11.1% BIOTECHNOLOGY 7.9% Amgen, Inc.*+ 64,260 4,122,279 Biogen Idec, Inc.*+ 48,670 3,241,909 Genzyme Corp.* 42,020 2,440,101 Gilead Sciences, Inc.*+ 67,070 2,346,779 Chiron Corp.* 39,100 1,303,203 Millennium Pharmaceuticals, Inc.*+ 58,930 714,232 Invitrogen Corp.*+ 8,980 602,827 Medimmune, Inc.*+ 14,280 387,131 --------------- TOTAL BIOTECHNOLOGY 15,158,461 --------------- HEALTH CARE EQUIPMENT & SUPPLIES 1.3% Biomet, Inc. 42,670 1,851,451 DENTSPLY International, Inc. 13,018 731,612 --------------- TOTAL HEALTH CARE EQUIPMENT & SUPPLIES 2,583,063 --------------- HEALTH CARE PROVIDERS & SERVICES 1.0% Express Scripts, Inc.*+ 10,210 780,453 Patterson Cos., Inc.*+ 13,870 601,819 Lincare Holdings, Inc.* 11,840 504,976 --------------- TOTAL HEALTH CARE PROVIDERS & SERVICES 1,887,248 --------------- PHARMACEUTICALS 0.9% Teva Pharmaceutical Industries Ltd. - SP ADR+ 57,900 1,728,894 --------------- TOTAL PHARMACEUTICALS 1,728,894 --------------- TOTAL HEALTH CARE 21,357,666 --------------- INDUSTRIALS 4.5% COMMERCIAL SERVICES & SUPPLIES 2.0% Apollo Group, Inc. -- Class A*+ 26,530 2,141,236 Cintas Corp.+ 25,120 1,101,763 Career Education Corp.*+ 14,580 583,200 --------------- TOTAL COMMERCIAL SERVICES & SUPPLIES 3,826,199 --------------- MACHINERY 1.1% Paccar, Inc.+ 25,550 2,056,264 --------------- TOTAL MACHINERY 2,056,264 --------------- AIR FREIGHT & COURIERS 0.8% Expeditors International Washington, Inc.+ 13,730 767,233 C.H. Robinson Worldwide, Inc.+ 12,870 714,542 --------------- TOTAL AIR FREIGHT & COURIERS 1,481,775 --------------- MARKET VALUE SHARES (NOTE 1) - ------------------------------------------------------------------------------ TRADING COMPANIES & DISTRIBUTORS 0.3% Fastenal Co.+ 11,010 $ 677,776 --------------- TOTAL TRADING COMPANIES & DISTRIBUTORS 677,776 --------------- ELECTRICAL EQUIPMENT 0.3% American Power Conversion Corp.+ 22,780 487,492 --------------- TOTAL ELECTRICAL EQUIPMENT 487,492 --------------- TOTAL INDUSTRIALS 8,529,506 --------------- TELECOMMUNICATION SERVICES 3.0% WIRELESS TELECOMMUNICATION SERVICES 2.8% Nextel Communications, Inc. -- Class A*+ 181,630 5,448,900 --------------- TOTAL WIRELESS TELECOMMUNICATION SERVICES 5,448,900 --------------- DIVERSIFIED TELECOMMUNICATION SERVICES 0.2% Level 3 Communications, Inc.*+ 88,780 300,964 --------------- TOTAL DIVERSIFIED TELECOMMUNICATION SERVICES 300,964 --------------- TOTAL TELECOMMUNICATION SERVICES 5,749,864 --------------- CONSUMER STAPLES 1.3% FOOD & DRUG RETAILING 1.3% Costco Wholesale Corp.+ 30,740 1,488,123 Whole Foods Market, Inc.+ 9,770 931,570 --------------- TOTAL FOOD & DRUG RETAILING 2,419,693 --------------- TOTAL CONSUMER STAPLES 2,419,693 --------------- MATERIALS 0.6% CONTAINERS & PACKAGING 0.4% Smurfit-Stone Container Corp.*+ 37,760 705,357 --------------- TOTAL CONTAINERS & PACKAGING 705,357 --------------- CHEMICALS 0.2% Sigma-Aldrich Corp.+ 7,420 448,613 --------------- TOTAL CHEMICALS 448,613 --------------- TOTAL MATERIALS 1,153,970 --------------- TOTAL COMMON STOCKS (Cost $124,122,987) 171,169,732 --------------- FACE AMOUNT -------------- REPURCHASE AGREEMENTS 9.9% Repurchase Agreement (Note 5) 1.55% due 01/03/05 $ 4,717,767 4,717,767 1.48% due 01/03/05 9,569,821 9,569,821 1.25% due 01/03/05 4,684,528 4,684,528 --------------- TOTAL REPURCHASE AGREEMENTS (Cost $18,972,116) 18,972,116 --------------- See Notes to Financial Statements. 56 | THE RYDEX VARIABLE TRUST ANNUAL REPORT SCHEDULE OF INVESTMENTS (CONCLUDED) December 31, 2004 - -------------------------------------------------------------------------------- OTC FUND - -------------------------------------------------------------------------------- MARKET FACE VALUE AMOUNT (NOTE 1) - ------------------------------------------------------------------------------ SECURITIES LENDING COLLATERAL 19.4% Investment in Securities Lending Short Term Investment Portfolio Held by U.S. Bank (Note 8) $ 37,093,297 $ 37,093,297 --------------- TOTAL SECURITIES LENDING COLLATERAL (Cost $37,093,297) 37,093,297 --------------- TOTAL INVESTMENTS 118.7% (Cost $180,188,400) $ 227,235,145 =============== LIABILITIES IN EXCESS OF OTHER ASSETS - (18.7)% $ (35,758,824) =============== NET ASSETS - 100.0% $ 191,476,321 ============================================================================== UNREALIZED GAIN CONTRACTS (NOTE 1) - ------------------------------------------------------------------------------ FUTURES CONTRACTS PURCHASED March 2005 Nasdaq 100 Index Mini Futures Contracts (Aggregate Market Value of Contracts $20,506,500) 630 $ 169,190 =============== * NON-INCOME PRODUCING SECURITIES. + ALL OR A PORTION OF THIS SECURITY IS ON LOAN AT DECEMBER 31, 2004 - SEE NOTE 8. ADR--AMERICAN DEPOSITORY RECEIPT. See Notes to Financial Statements. THE RYDEX VARIABLE TRUST ANNUAL REPORT | 57 SCHEDULE OF INVESTMENTS December 31, 2004 - -------------------------------------------------------------------------------- ARKTOS FUND - -------------------------------------------------------------------------------- MARKET FACE VALUE AMOUNT (NOTE 1) - ------------------------------------------------------------------------------ FEDERAL AGENCY DISCOUNT NOTES 29.2% Farmer Mac* 2.12% due 01/14/05 $ 2,000,000 $ 1,998,704 Federal Farm Credit Bank* 2.18% due 01/06/05 2,000,000 1,999,637 Federal Home Loan Bank* 2.15% due 01/05/05 3,000,000 2,999,642 --------------- TOTAL FEDERAL AGENCY DISCOUNT NOTES (Cost $6,997,983) 6,997,983 --------------- REPURCHASE AGREEMENTS 71.7% Repurchase Agreement (Note 5) 1.55% due 01/03/05+ 5,832,417 5,832,417 1.48% due 01/03/05 7,598,214 7,598,214 1.25% due 01/03/05 3,719,405 3,719,405 --------------- TOTAL REPURCHASE AGREEMENTS (Cost $17,150,036) 17,150,036 --------------- TOTAL INVESTMENTS 100.9% (Cost $24,148,019) $ 24,148,019 =============== LIABILITIES IN EXCESS OF OTHER ASSETS - (0.9)% $ (220,322) =============== NET ASSETS - 100.0% $ 23,927,697 ============================================================================== UNREALIZED GAIN (LOSS) CONTRACTS (NOTE 1) - ------------------------------------------------------------------------------ FUTURES CONTRACTS SOLD SHORT March 2005 Nasdaq 100 Index Mini Futures Contracts (Aggregate Market Value of Contracts $3,417,750) 105 $ (21,331) =============== UNITS -------------- EQUITY INDEX SWAP AGREEMENT March 2005 Nasdaq 100 Index Swap, Maturing 03/14/05** (Notional Market Value $20,474,208) 12,630 $ 23,244 --------------- * THE ISSUER IS A PUBLICLY TRADED COMPANY THAT OPERATES UNDER A CONGRESSIONAL CHARTER; ITS SECURITIES ARE NEITHER ISSUED NOR GUARANTEED BY THE U.S. GOVERNMENT. ** PRICE RETURN BASED ON NASDAQ 100 INDEX +/- FINANCING AT A VARIABLE RATE. + ALL OR A PORTION OF THIS SECURITY IS HELD AS COLLATERAL AT DECEMBER 31, 2004. See Notes to Financial Statements. 58 | THE RYDEX VARIABLE TRUST ANNUAL REPORT SCHEDULE OF INVESTMENTS December 31, 2004 - -------------------------------------------------------------------------------- TITAN 500 FUND - -------------------------------------------------------------------------------- MARKET VALUE SHARES (NOTE 1) - ------------------------------------------------------------------------------ COMMON STOCKS 66.4% FINANCIALS 13.7% BANKS 4.0% Bank of America Corp. 6,910 $ 324,701 Wells Fargo & Co. 2,890 179,613 Wachovia Corp. 2,745 144,387 U.S. Bancorp 3,190 99,911 SunTrust Banks, Inc. 630 46,544 Fifth Third Bancorp 960 45,389 National City Corp. 1,160 43,558 BB&T Corp. 940 39,527 Regions Financial Corp. 790 28,116 PNC Financial Services Group, Inc. 484 27,801 KeyCorp 700 23,730 North Fork Bancorporation, Inc. 805 23,224 M&T Bank Corp. 200 21,568 Comerica, Inc. 290 17,696 Marshall & Ilsley Corp. 380 16,796 AmSouth Bancorp+ 610 15,799 Synovus Financial Corp. 530 15,147 Compass Bancshares, Inc. 210 10,221 Zions Bancorporation 150 10,205 Huntington Bancshares, Inc. 400 9,912 First Horizon National Corp. 210 9,053 --------------- TOTAL BANKS 1,152,898 --------------- INSURANCE 2.8% American International Group, Inc.+ 4,450 292,231 Allstate Corp. 1,170 60,512 MetLife, Inc. 1,270 51,448 Prudential Financial, Inc. 880 48,365 St. Paul Travelers Cos., Inc. 1,150 42,631 AFLAC, Inc. 870 34,661 Hartford Financial Services Group, Inc. 500 34,655 Marsh & McLennan Cos., Inc. 900 29,610 Progressive Corp. 340 28,846 Chubb Corp.+ 330 25,377 Loews Corp. 320 22,496 ACE Ltd. 494 21,119 XL Capital Ltd. 240 18,636 Ambac Financial Group, Inc. 190 15,605 MBIA, Inc. 240 15,187 Lincoln National Corp.+ 300 14,004 Aon Corp. 540 12,884 Cincinnati Financial Corp. 290 12,835 Jefferson-Pilot Corp. 230 11,951 MARKET VALUE SHARES (NOTE 1) - ------------------------------------------------------------------------------ SAFECO Corp.+ 220 $ 11,493 Torchmark Corp. 180 10,285 UnumProvident Corp.+ 510 9,149 --------------- TOTAL INSURANCE 823,980 --------------- DIVERSIFIED FINANCIALS 2.5% Citigroup, Inc. 8,879 427,790 J.P. Morgan Chase & Co. 6,090 237,571 Moody's Corp. 250 21,713 Principal Financial Group, Inc. 530 21,698 CIT Group, Inc. 360 16,495 --------------- TOTAL DIVERSIFIED FINANCIALS 725,267 --------------- CAPITAL MARKETS 1.9% Morgan Stanley 1,870 103,822 Merrill Lynch & Co., Inc. 1,590 95,034 Goldman Sachs Group, Inc.+ 830 86,353 Bank of New York Co., Inc. 1,330 44,449 Lehman Brothers Holdings, Inc. 460 40,241 Franklin Resources, Inc. 430 29,949 State Street Corp. 574 28,195 Charles Schwab Corp. 2,300 27,508 Mellon Financial Corp. 720 22,399 Bear Stearns Cos., Inc. 180 18,416 Northern Trust Corp. 370 17,975 T. Rowe Price Group, Inc. 220 13,684 E*Trade Financial Corp.* 640 9,568 Janus Capital Group, Inc. 400 6,724 Federated Investors, Inc. -- Class B 180 5,472 --------------- TOTAL CAPITAL MARKETS 549,789 --------------- THRIFTS & MORTGAGE FINANCE 1.2% Fannie Mae+ 1,664 118,493 Freddie Mac 1,180 86,966 Washington Mutual, Inc. 1,490 62,997 Countrywide Financial Corp. 990 36,640 Golden West Financial Corp. 520 31,938 Sovereign Bancorp, Inc. 590 13,305 MGIC Investment Corp. 170 11,715 --------------- TOTAL THRIFTS & MORTGAGE FINANCE 362,054 --------------- CONSUMER FINANCE 0.9% American Express Co. 2,150 121,196 MBNA Corp. 2,190 61,736 SLM Corp. 740 39,509 Capital One Financial Corp.+ 420 35,368 Providian Financial Corp.* 500 8,235 --------------- TOTAL CONSUMER FINANCE 266,044 --------------- See Notes to Financial Statements. THE RYDEX VARIABLE TRUST ANNUAL REPORT | 59 SCHEDULE OF INVESTMENTS (CONTINUED) December 31, 2004 - -------------------------------------------------------------------------------- TITAN 500 FUND - -------------------------------------------------------------------------------- MARKET VALUE SHARES (NOTE 1) - ------------------------------------------------------------------------------ REAL ESTATE 0.4% Simon Property Group, Inc. 380 $ 24,575 Equity Office Properties Trust 690 20,093 Equity Residential 480 17,367 ProLogis 310 13,432 Archstone-Smith Trust 330 12,639 Plum Creek Timber (REIT) Co., Inc. 310 11,916 Apartment Investment & Management Co. -- Class A 160 6,166 --------------- TOTAL REAL ESTATE 106,188 --------------- TOTAL FINANCIALS 3,986,220 --------------- INFORMATION TECHNOLOGY 10.7% SOFTWARE 2.9% Microsoft Corp. 18,590 496,539 Oracle Corp.* 8,770 120,324 Electronic Arts, Inc.* 520 32,074 Computer Associates International, Inc. 1,000 31,060 Symantec Corp.*+ 1,080 27,821 Adobe Systems, Inc. 410 25,723 Veritas Software Corp.* 720 20,556 Autodesk, Inc. 390 14,801 Intuit, Inc.*+ 320 14,083 Siebel Systems, Inc.* 870 9,135 Citrix Systems, Inc.* 290 7,114 BMC Software, Inc.* 380 7,068 Mercury Interactive Corp.* 140 6,377 Novell, Inc.* 640 4,320 Compuware Corp.* 660 4,270 Parametric Technology Corp.*+ 460 2,709 --------------- TOTAL SOFTWARE 823,974 --------------- COMPUTERS & PERIPHERALS 2.6% International Business Machines, Corp. 2,851 281,051 Dell, Inc.* 4,250 179,095 Hewlett-Packard Co. 5,171 108,436 EMC Corp./MA* 4,100 60,967 Apple Computer, Inc.* 690 44,436 Sun Microsystems, Inc.* 5,749 30,930 Network Appliance, Inc.* 610 20,264 Lexmark International, Inc.* 220 18,700 NCR Corp.* 164 11,354 QLogic Corp.* 160 5,877 Gateway, Inc.* 640 3,846 --------------- TOTAL COMPUTERS & PERIPHERALS 764,956 --------------- SEMICONDUCTOR & SEMICONDUCTOR EQUIPMENT 2.0% Intel Corp. 10,810 252,846 Texas Instruments, Inc.+ 2,959 72,851 MARKET VALUE SHARES (NOTE 1) - ------------------------------------------------------------------------------ Applied Materials, Inc.* 2,900 $ 49,590 Maxim Integrated Products, Inc. 560 23,738 Analog Devices, Inc. 640 23,629 Linear Technology Corp. 530 20,543 Broadcom Corp. -- Class A*+ 560 18,077 Xilinx, Inc.+ 600 17,790 KLA-Tencor Corp.* 330 15,371 Advanced Micro Devices, Inc.*+ 660 14,533 Altera Corp.* 640 13,248 Micron Technology, Inc.*+ 1,050 12,967 Freescale Semiconductor, Inc. -- Class B* 670 12,301 National Semiconductor Corp.+ 610 10,950 Novellus Systems, Inc.* 240 6,694 Nvidia Corp.* 280 6,597 Teradyne, Inc.* 330 5,633 LSI Logic Corp.* 660 3,617 PMC - Sierra, Inc.* 300 3,375 Applied Micro Circuits Corp.* 530 2,231 --------------- TOTAL SEMICONDUCTOR & SEMICONDUCTOR EQUIPMENT 586,581 --------------- COMMUNICATIONS EQUIPMENT 1.8% Cisco Systems, Inc.* 11,260 217,318 Qualcomm, Inc. 2,800 118,720 Motorola, Inc. 4,161 71,569 Lucent Technologies, Inc.* 7,559 28,422 Corning, Inc.*+ 2,400 28,248 Avaya, Inc.* 780 13,416 Scientific-Atlanta, Inc. 260 8,583 Comverse Technology, Inc.* 340 8,313 JDS Uniphase Corp.*+ 2,470 7,830 Tellabs, Inc.* 790 6,786 Andrew Corp.* 280 3,817 ADC Telecommunications, Inc.* 1,380 3,698 CIENA Corp.* 980 3,273 --------------- TOTAL COMMUNICATIONS EQUIPMENT 519,993 --------------- IT CONSULTING & SERVICES 0.8% First Data Corp. 1,420 60,407 Automatic Data Processing, Inc. 1,000 44,350 Paychex, Inc. 650 22,152 Electronic Data Systems Corp. 880 20,328 Computer Sciences Corp.* 320 18,038 SunGard Data Systems, Inc.* 490 13,882 Fiserv, Inc.* 330 13,263 Affiliated Computer Services, Inc. -- Class A* 220 13,242 Unisys Corp.* 570 5,802 See Notes to Financial Statements. 60 | THE RYDEX VARIABLE TRUST ANNUAL REPORT SCHEDULE OF INVESTMENTS (CONTINUED) December 31, 2004 - -------------------------------------------------------------------------------- TITAN 500 FUND - -------------------------------------------------------------------------------- MARKET VALUE SHARES (NOTE 1) - ------------------------------------------------------------------------------ Sabre Holdings Corp. 234 $ 5,185 Convergys Corp.* 240 3,598 --------------- TOTAL IT CONSULTING & SERVICES 220,247 --------------- INTERNET SOFTWARE & SERVICES 0.3% Yahoo!, Inc.*+ 2,350 88,548 --------------- TOTAL INTERNET SOFTWARE & SERVICES 88,548 --------------- ELECTRONIC EQUIPMENT & INSTRUMENTS 0.2% Agilent Technologies, Inc.* 830 20,003 Molex, Inc. 320 9,600 Solectron Corp.*+ 1,660 8,848 Jabil Circuit, Inc.* 340 8,697 Sanmina-SCI Corp.* 890 7,538 Symbol Technologies, Inc. 410 7,093 Tektronix, Inc. 150 4,532 --------------- TOTAL ELECTRONIC EQUIPMENT & INSTRUMENTS 66,311 --------------- OFFICE ELECTRONICS 0.1% Xerox Corp.* 1,630 27,726 --------------- TOTAL OFFICE ELECTRONICS 27,726 --------------- TOTAL INFORMATION TECHNOLOGY 3,098,336 --------------- HEALTH CARE 8.4% PHARMACEUTICALS 4.5% Pfizer, Inc. 12,880 346,343 Johnson & Johnson, Inc. 5,084 322,427 Abbott Laboratories 2,660 124,089 Merck & Co., Inc. 3,790 121,811 Eli Lilly & Co. 1,940 110,095 Wyeth 2,280 97,105 Bristol-Myers Squibb Co. 3,331 85,340 Schering-Plough Corp. 2,520 52,618 Forest Laboratories, Inc.*+ 634 28,441 Allergan, Inc. 220 17,835 Mylan Laboratories, Inc. 460 8,133 Watson Pharmaceuticals, Inc.* 190 6,234 King Pharmaceuticals, Inc.* 410 5,084 --------------- TOTAL PHARMACEUTICALS 1,325,555 --------------- HEALTH CARE PROVIDERS & SERVICES 1.5% UnitedHealth Group, Inc. 1,120 98,594 WellPoint, Inc.* 500 57,500 Cardinal Health, Inc. 740 43,031 Aetna, Inc. 250 31,188 Caremark Rx, Inc.*+ 780 30,755 HCA, Inc. 720 28,771 Medco Health Solutions, Inc.*+ 470 19,552 CIGNA Corp. 230 18,761 MARKET VALUE SHARES (NOTE 1) - ------------------------------------------------------------------------------ Quest Diagnostics, Inc. 170 $ 16,244 McKesson Corp. 500 15,730 Laboratory Corporation of America Holdings* 240 11,957 AmerisourceBergen Corp. 180 10,562 Express Scripts, Inc.* 130 9,937 Health Management Associates, Inc. -- Class A 420 9,542 IMS Health, Inc. 400 9,284 Tenet Healthcare Corp.* 800 8,784 Humana, Inc.* 270 8,016 Manor Care, Inc. 150 5,315 --------------- TOTAL HEALTH CARE PROVIDERS & SERVICES 433,523 --------------- HEALTH CARE EQUIPMENT & SUPPLIES 1.5% Medtronic, Inc. 2,070 102,817 Boston Scientific Corp.* 1,440 51,192 Guidant Corp. 540 38,934 Baxter International, Inc. 1,050 36,267 Zimmer Holdings, Inc.* 420 33,650 Stryker Corp. 690 33,293 St. Jude Medical, Inc.* 610 25,577 Becton, Dickinson & Co. 430 24,424 Biomet, Inc. 430 18,658 Fisher Scientific International, Inc.* 200 12,476 C.R. Bard, Inc. 180 11,516 Waters Corp.* 210 9,826 Hospira, Inc.* 270 9,045 Thermo Electron Corp.* 270 8,151 Bausch & Lomb, Inc. 90 5,801 PerkinElmer, Inc. 220 4,948 Millipore Corp.* 90 4,483 --------------- TOTAL HEALTH CARE EQUIPMENT & SUPPLIES 431,058 --------------- BIOTECHNOLOGY 0.9% Amgen, Inc.* 2,170 139,206 Biogen Idec, Inc.* 570 37,968 Gilead Sciences, Inc.* 740 25,893 Genzyme Corp.* 420 24,389 Medimmune, Inc.* 430 11,657 Chiron Corp.* 320 10,666 Applera Corp. - Applied Biosystems Group 340 7,109 --------------- TOTAL BIOTECHNOLOGY 256,888 --------------- TOTAL HEALTH CARE 2,447,024 --------------- See Notes to Financial Statements. THE RYDEX VARIABLE TRUST ANNUAL REPORT | 61 SCHEDULE OF INVESTMENTS (CONTINUED) December 31, 2004 - -------------------------------------------------------------------------------- TITAN 500 FUND - -------------------------------------------------------------------------------- MARKET VALUE SHARES (NOTE 1) - ------------------------------------------------------------------------------ CONSUMER DISCRETIONARY 7.9% MEDIA 2.6% Time Warner, Inc.* 7,831 $ 152,235 Comcast Corp. -- Class A* 3,800 126,464 Viacom, Inc. -- Class B 2,924 106,404 Walt Disney Co.+ 3,490 97,022 News Corp. -- Class A 4,470 83,410 Gannett Co., Inc. 440 35,948 Clear Channel Communications, Inc. 980 32,820 McGraw-Hill Cos., Inc. 320 29,293 Omnicom Group 320 26,982 Tribune Co. 540 22,756 Univision Communications, Inc. -- Class A* 550 16,099 New York Times Co. -- Class A+ 250 10,200 Interpublic Group of Cos., Inc.* 720 9,648 Knight-Ridder, Inc. 130 8,702 Dow Jones & Co., Inc. 140 6,028 Meredith Corp. 90 4,878 --------------- TOTAL MEDIA 768,889 --------------- SPECIALTY RETAIL 1.6% Home Depot, Inc. 3,760 160,702 Lowe's Cos., Inc.+ 1,320 76,019 Best Buy Co., Inc. 550 32,681 The Gap, Inc. 1,500 31,680 Staples, Inc. 850 28,653 TJX Cos., Inc.+ 820 20,607 Bed Bath & Beyond, Inc.* 510 20,313 Limited Brands, Inc. 700 16,114 AutoZone, Inc.* 140 12,783 Sherwin-Williams Co. 240 10,711 Office Depot, Inc.* 530 9,201 RadioShack Corp. 270 8,878 AutoNation, Inc.*+ 450 8,645 Tiffany & Co.+ 250 7,993 Toys `R' Us, Inc.* 370 7,574 Circuit City Stores, Inc. 330 5,161 OfficeMax, Inc. 160 5,021 --------------- TOTAL SPECIALTY RETAIL 462,736 --------------- HOTELS RESTAURANTS & LEISURE 1.0% McDonald's Corp. 2,150 68,929 Carnival Corp. 1,080 62,241 Starbucks Corp.* 680 42,405 Marriott International, Inc. -- Class A 384 24,184 Yum! Brands, Inc. 500 23,590 Starwood Hotels & Resorts Worldwide, Inc.+ 350 20,440 International Game Technology, Inc. 590 20,284 MARKET VALUE SHARES (NOTE 1) - ------------------------------------------------------------------------------ Hilton Hotels Corp. 660 $ 15,009 Harrah's Entertainment, Inc. 190 12,709 Darden Restaurants, Inc. 270 7,490 Wendy's International, Inc. 190 7,459 --------------- TOTAL HOTELS RESTAURANTS & LEISURE 304,740 --------------- MULTILINE RETAIL 0.7% Target Corp. 1,530 79,453 Kohl's Corp.*+ 590 29,010 JC Penney Holding Co., Inc.+ 490 20,286 Sears Roebuck and Co. 350 17,861 Federated Department Stores, Inc. 290 16,759 May Department Stores Co.+ 500 14,700 Dollar General Corp. 560 11,631 Nordstrom, Inc. 240 11,215 Family Dollar Stores, Inc. 290 9,057 Dillard's, Inc./AR -- Class A 140 3,762 Big Lots, Inc.* 190 2,305 --------------- TOTAL MULTILINE RETAIL 216,039 --------------- INTERNET & CATALOG RETAIL 0.5% eBay, Inc.*+ 1,130 131,396 --------------- TOTAL INTERNET & CATALOG RETAIL 131,396 --------------- AUTOMOBILES 0.4% Ford Motor Co. 3,134 45,882 General Motors Corp.+ 970 38,858 Harley-Davidson, Inc. 500 30,375 --------------- TOTAL AUTOMOBILES 115,115 --------------- HOUSEHOLD DURABLES 0.4% Fortune Brands, Inc. 250 19,295 Pulte Homes, Inc. 220 14,036 Centex Corp.+ 210 12,512 Black & Decker Corp. 140 12,366 Newell Rubbermaid, Inc. 470 11,369 Leggett & Platt, Inc.+ 330 9,382 KB Home 80 8,352 Whirlpool Corp. 110 7,613 Stanley Works 140 6,859 Snap-On, Inc. 100 3,436 Maytag Corp.+ 140 2,954 --------------- TOTAL HOUSEHOLD DURABLES 108,174 --------------- TEXTILES & APPAREL 0.3% Nike, Inc. -- Class B 450 40,810 Coach, Inc.* 320 18,048 VF Corp. 190 10,522 Liz Claiborne, Inc. 190 8,020 Jones Apparel Group, Inc. 210 7,680 Reebok International Ltd. 100 4,400 --------------- TOTAL TEXTILES & APPAREL 89,480 --------------- See Notes to Financial Statements. 62 | THE RYDEX VARIABLE TRUST ANNUAL6 REPORT SCHEDULE OF INVESTMENTS (CONTINUED) December 31, 2004 - -------------------------------------------------------------------------------- TITAN 500 FUND - -------------------------------------------------------------------------------- MARKET VALUE SHARES (NOTE 1) - ------------------------------------------------------------------------------ AUTO COMPONENTS 0.2% Johnson Controls, Inc.+ 330 $ 20,935 Delphi Corp.+ 960 8,659 Dana Corp. 260 4,506 Goodyear Tire & Rubber Co.* 300 4,398 Cooper Tire & Rubber Co. 130 2,802 Visteon Corp. 220 2,149 --------------- TOTAL AUTO COMPONENTS 43,449 --------------- LEISURE EQUIPMENT & PRODUCTS 0.2% Eastman Kodak Co.+ 490 15,802 Mattel, Inc. 710 13,838 Brunswick Corp. 160 7,920 Hasbro, Inc. 300 5,814 --------------- TOTAL LEISURE EQUIPMENT & PRODUCTS 43,374 --------------- DISTRIBUTORS 0.0% Genuine Parts Co. 300 13,218 --------------- TOTAL DISTRIBUTORS 13,218 --------------- TOTAL CONSUMER DISCRETIONARY 2,296,610 --------------- INDUSTRIALS 7.8% INDUSTRIAL CONGLOMERATES 3.1% General Electric Co. 18,080 659,920 Tyco International Ltd.+ 3,445 123,124 3M Co. 1,330 109,153 Textron, Inc. 240 17,712 --------------- TOTAL INDUSTRIAL CONGLOMERATES 909,909 --------------- AEROSPACE & DEFENSE 1.3% United Technologies Corp. 874 90,328 Boeing Co. 1,440 74,549 Honeywell International, Inc. 1,470 52,052 Lockheed Martin Corp. 760 42,218 General Dynamics Corp. 340 35,564 Northrop Grumman Corp. 630 34,247 Raytheon Co. 770 29,899 L-3 Communications Holdings, Inc. 200 14,648 Rockwell Collins, Inc. 300 11,832 Goodrich Corp. 200 6,528 --------------- TOTAL AEROSPACE & DEFENSE 391,865 --------------- MACHINERY 1.0% Caterpillar, Inc. 580 56,556 Illinois Tool Works, Inc. 510 47,267 Deere & Co. 420 31,248 Danaher Corp.+ 530 30,427 Paccar, Inc. 300 24,144 Ingersoll-Rand Co. -- Class A 290 23,287 Eaton Corp. 260 18,814 MARKET VALUE SHARES (NOTE 1) - ------------------------------------------------------------------------------ Parker Hannifin Corp. 200 $ 15,148 Dover Corp. 350 14,679 ITT Industries, Inc. 160 13,512 Cummins, Inc. 80 6,703 Pall Corp. 210 6,079 Navistar International Corp.* 120 5,278 --------------- TOTAL MACHINERY 293,142 --------------- AIR FREIGHT & COURIERS 0.8% United Parcel Service, Inc. -- Class B+ 1,924 164,425 FedEx Corp.+ 510 50,230 Ryder System, Inc. 110 5,255 --------------- TOTAL AIR FREIGHT & COURIERS 219,910 --------------- COMMERCIAL SERVICES & SUPPLIES 0.7% Cendant Corp. 1,800 42,084 Waste Management, Inc. 980 29,341 Apollo Group, Inc. -- Class A* 320 25,827 Pitney Bowes, Inc. 390 18,049 H&R Block, Inc. 280 13,720 RR Donnelley & Sons Co. 380 13,410 Cintas Corp. 290 12,720 Avery Dennison Corp. 190 11,395 Robert Half International, Inc. 300 8,829 Monster Worldwide, Inc.* 200 6,728 Equifax, Inc. 230 6,463 Allied Waste Industries, Inc.* 540 5,011 --------------- TOTAL COMMERCIAL SERVICES & SUPPLIES 193,577 --------------- ROAD & RAIL 0.3% Burlington Northern Santa Fe Corp. 640 30,278 Union Pacific Corp. 440 29,590 Norfolk Southern Corp. 680 24,609 CSX Corp. 370 14,830 --------------- TOTAL ROAD & RAIL 99,307 --------------- ELECTRICAL EQUIPMENT 0.3% Emerson Electric Co. 720 50,472 Rockwell Automation, Inc. 320 15,856 Cooper Industries Ltd. -- Class A 160 10,862 American Power Conversion Corp.+ 330 7,062 Power-One, Inc.* 140 1,249 --------------- TOTAL ELECTRICAL EQUIPMENT 85,501 --------------- BUILDING PRODUCTS 0.2% Masco Corp.+ 770 28,128 American Standard Cos., Inc.* 370 15,289 --------------- TOTAL BUILDING PRODUCTS 43,417 --------------- See Notes to Financial Statements. THE RYDEX VARIABLE TRUST ANNUAL REPORT | 63 SCHEDULE OF INVESTMENTS (CONTINUED) December 31, 2004 - -------------------------------------------------------------------------------- TITAN 500 FUND - -------------------------------------------------------------------------------- MARKET VALUE SHARES (NOTE 1) - ------------------------------------------------------------------------------ AIRLINES 0.1% Southwest Airlines Co. 1,330 $ 21,652 Delta Air Lines, Inc.*+ 220 1,646 --------------- TOTAL AIRLINES 23,298 --------------- TRADING COMPANIES & DISTRIBUTORS 0.0% W.W. Grainger, Inc. 150 9,993 --------------- TOTAL TRADING COMPANIES & DISTRIBUTORS 9,993 --------------- CONSTRUCTION & ENGINEERING 0.0% Fluor Corp. 140 7,631 --------------- TOTAL CONSTRUCTION & ENGINEERING 7,631 --------------- TOTAL INDUSTRIALS 2,277,550 --------------- CONSUMER STAPLES 7.0% FOOD & DRUG RETAILING 2.1% Wal-Mart Stores, Inc. 7,240 382,417 Walgreen Co. 1,750 67,147 Sysco Corp. 1,090 41,605 Costco Wholesale Corp.+ 800 38,728 CVS Corp. 680 30,648 Kroger Co.*+ 1,260 22,100 Safeway, Inc.* 770 15,200 Albertson's, Inc.+ 630 15,044 Supervalu, Inc. 230 7,940 --------------- TOTAL FOOD & DRUG RETAILING 620,829 --------------- BEVERAGES 1.5% Coca-Cola Co. 4,140 172,348 PepsiCo, Inc. 2,880 150,336 Anheuser-Busch Cos., Inc. 1,350 68,486 Coca-Cola Enterprises, Inc. 800 16,680 Pepsi Bottling Group, Inc. 430 11,627 Brown-Forman Corp. -- Class B 210 10,223 Adolph Coors Co. -- Class B 60 4,540 --------------- TOTAL BEVERAGES 434,240 --------------- HOUSEHOLD PRODUCTS 1.2% Procter & Gamble Co. 4,340 239,047 Kimberly-Clark Corp. 830 54,622 Colgate-Palmolive Co. 910 46,556 Clorox Co. 260 15,322 --------------- TOTAL HOUSEHOLD PRODUCTS 355,547 --------------- FOOD PRODUCTS 0.9% Sara Lee Corp. 1,340 32,348 Kellogg Co. 710 31,709 General Mills, Inc. 620 30,820 WM Wrigley Jr Co. 380 26,292 ConAgra Foods, Inc. 880 25,916 Archer-Daniels-Midland Co. 1,120 24,987 H.J. Heinz Co. 600 23,394 Hershey Foods Corp. 420 23,327 MARKET VALUE SHARES (NOTE 1) - ------------------------------------------------------------------------------ Campbell Soup Co.+ 700 $ 20,923 McCormick & Co., Inc. 230 8,878 --------------- TOTAL FOOD PRODUCTS 248,594 --------------- TOBACCO 0.9% Altria Group, Inc.+ 3,509 214,400 Reynolds American, Inc. 250 19,650 UST, Inc. 280 13,471 --------------- TOTAL TOBACCO 247,521 --------------- PERSONAL PRODUCTS 0.4% Gillette Co. 1,700 76,126 Avon Products, Inc.+ 810 31,347 Alberto-Culver Co. -- Class B 160 7,771 --------------- TOTAL PERSONAL PRODUCTS 115,244 --------------- TOTAL CONSUMER STAPLES 2,021,975 --------------- ENERGY 4.8% OIL & GAS 4.1% Exxon Mobil Corp. 11,030 565,398 ChevronTexaco Corp.+ 3,620 190,086 ConocoPhillips 1,184 102,807 Occidental Petroleum Corp. 680 39,685 Devon Energy Corp. 830 32,304 Burlington Resources, Inc. 670 29,145 Apache Corp. 560 28,319 Anadarko Petroleum Corp. 420 27,220 Marathon Oil Corp. 590 22,190 Valero Energy Corp. 440 19,976 Unocal Corp. 450 19,458 XTO Energy, Inc. 450 15,921 Williams Cos., Inc. 950 15,475 Kinder Morgan, Inc. 210 15,357 Kerr-McGee Corp. 260 15,025 EOG Resources, Inc.+ 200 14,272 Amerada Hess Corp. 160 13,181 El Paso Corp.+ 1,100 11,440 Sunoco, Inc. 130 10,622 Ashland, Inc. 120 7,006 --------------- TOTAL OIL & GAS 1,194,887 --------------- ENERGY EQUIPMENT & SERVICES 0.7% Schlumberger Ltd. 1,010 67,620 Halliburton Co. 760 29,822 Baker Hughes, Inc. 570 24,322 Transocean, Inc.*+ 550 23,315 Nabors Industries Ltd.* 260 13,335 BJ Services Co. 280 13,031 Noble Corp.* 230 11,440 Rowan Cos., Inc.* 180 4,662 --------------- TOTAL ENERGY EQUIPMENT & SERVICES 187,547 --------------- TOTAL ENERGY 1,382,434 --------------- See Notes to Financial Statements. 64 | THE RYDEX VARIABLE TRUST ANNUAL REPORT SCHEDULE OF INVESTMENTS (CONTINUED) December 31, 2004 - -------------------------------------------------------------------------------- TITAN 500 FUND - -------------------------------------------------------------------------------- MARKET VALUE SHARES (NOTE 1) - ------------------------------------------------------------------------------ TELECOMMUNICATION SERVICES 2.2% DIVERSIFIED TELECOMMUNICATION SERVICES 2.0% Verizon Communications, Inc. 4,740 $ 192,017 SBC Communications, Inc. 5,675 146,245 BellSouth Corp. 3,130 86,983 Sprint Corp. 2,520 62,622 Alltel Corp. 520 30,555 AT&T Corp.+ 1,360 25,922 Qwest Communications International, Inc.* 3,110 13,808 CenturyTel, Inc. 230 8,158 Citizens Communications Co. 570 7,860 --------------- TOTAL DIVERSIFIED TELECOMMUNICATION SERVICES 574,170 --------------- WIRELESS TELECOMMUNICATION SERVICES 0.2% Nextel Communications, Inc. -- Class A* 1,900 57,000 --------------- TOTAL WIRELESS TELECOMMUNICATION SERVICES 57,000 --------------- TOTAL TELECOMMUNICATION SERVICES 631,170 --------------- MATERIALS 2.0% CHEMICALS 1.1% EI Du Pont de Nemours & Co. 1,700 83,385 Dow Chemical Co. 1,610 79,711 Monsanto Co. 450 24,998 Praxair, Inc. 560 24,724 Air Products & Chemicals, Inc. 390 22,608 PPG Industries, Inc. 290 19,767 Rohm & Haas Co. 380 16,807 Ecolab, Inc.+ 440 15,457 Eastman Chemical Co. 130 7,505 Sigma-Aldrich Corp. 120 7,255 International Flavors & Fragrances, Inc. 160 6,854 Engelhard Corp. 210 6,441 Hercules, Inc.*+ 190 2,822 Great Lakes Chemical Corp. 90 2,564 --------------- TOTAL CHEMICALS 320,898 --------------- METALS & MINING 0.5% Alcoa, Inc. 1,490 46,816 Newmont Mining Corp. 760 33,752 Phelps Dodge Corp. 160 15,827 Nucor Corp. 270 14,132 Freeport-McMoRan Copper & Gold, Inc. -- Class B+ 310 11,851 United States Steel Corp. 190 9,737 Allegheny Technologies, Inc.+ 160 3,467 --------------- TOTAL METALS & MINING 135,582 --------------- MARKET VALUE SHARES (NOTE 1) - ------------------------------------------------------------------------------ PAPER & FOREST PRODUCTS 0.3% International Paper Co. 830 $ 34,860 Weyerhaeuser Co. 410 27,560 Georgia-Pacific Corp. 440 16,491 MeadWestvaco Corp. 350 11,861 Louisiana-Pacific Corp. 190 5,081 --------------- TOTAL PAPER & FOREST PRODUCTS 95,853 --------------- CONTAINERS & PACKAGING 0.1% Ball Corp. 190 8,356 Sealed Air Corp.* 140 7,458 Temple-Inland, Inc. 100 6,840 Pactiv Corp.* 250 6,323 Bemis Co. 180 5,236 --------------- TOTAL CONTAINERS & PACKAGING 34,213 --------------- CONSTRUCTION MATERIALS 0.0% Vulcan Materials Co. 180 9,830 --------------- TOTAL CONSTRUCTION MATERIALS 9,830 --------------- TOTAL MATERIALS 596,376 --------------- UTILITIES 1.9% ELECTRIC UTILITIES 1.3% Exelon Corp.+ 1,130 49,799 Southern Co. 1,270 42,570 TXU Corp. 410 26,470 Entergy Corp. 380 25,684 FPL Group, Inc. 320 23,920 American Electric Power Co., Inc. 680 23,351 PG&E Corp.* 690 22,963 FirstEnergy Corp. 560 22,126 Progress Energy, Inc. 420 19,001 Consolidated Edison, Inc. 410 17,937 Edison International 560 17,937 PPL Corp. 320 17,050 Ameren Corp. 330 16,546 DTE Energy Co. 300 12,939 Cinergy Corp. 310 12,905 Xcel Energy, Inc.+ 680 12,376 Pinnacle West Capital Corp. 160 7,106 CenterPoint Energy, Inc. 530 5,989 TECO Energy, Inc. 340 5,216 Allegheny Energy, Inc.*+ 230 4,533 --------------- TOTAL ELECTRIC UTILITIES 386,418 --------------- MULTI-UTILITIES 0.5% Duke Energy Corp. 1,640 41,541 Dominion Resources, Inc./VA+ 570 38,612 Public Service Enterprise Group, Inc. 410 21,226 AES Corp.* 1,110 15,174 Sempra Energy 400 14,672 See Notes to Financial Statements. THE RYDEX VARIABLE TRUST ANNUAL REPORT | 65 SCHEDULE OF INVESTMENTS (CONCLUDED) December 31, 2004 - -------------------------------------------------------------------------------- TITAN 500 FUND - -------------------------------------------------------------------------------- MARKET VALUE SHARES (NOTE 1) - ------------------------------------------------------------------------------ Constellation Energy Group, Inc. 300 $ 13,113 Calpine Corp.*+ 910 3,585 CMS Energy Corp.* 330 3,448 Dynegy, Inc. -- Class A* 650 3,003 --------------- TOTAL MULTI-UTILITIES 154,374 --------------- GAS UTILITIES 0.1% KeySpan Corp.+ 270 10,652 NiSource, Inc. 460 10,479 Nicor, Inc. 80 2,955 Peoples Energy Corp. 60 2,637 --------------- TOTAL GAS UTILITIES 26,723 --------------- TOTAL UTILITIES 567,515 --------------- TOTAL COMMON STOCKS (Cost $17,492,026) 19,305,210 --------------- CONTRACTS -------------- OPTIONS PURCHASED 0.0% Put Options on: February 2005 S&P 500 Index Futures Contracts Expiring February 2005 with strike price of 700 40 -- --------------- TOTAL OPTIONS PURCHASED (Cost $660) -- --------------- FACE AMOUNT -------------- REPURCHASE AGREEMENTS 36.2% Repurchase Agreement (Note 5) 1.55% due 01/03/05 $ 2,612,524 2,612,524 1.48% due 01/03/05 5,299,410 5,299,410 1.25% due 01/03/05 2,594,117 2,594,117 --------------- TOTAL REPURCHASE AGREEMENTS (Cost $10,506,051) 10,506,051 --------------- SECURITIES LENDING COLLATERAL 2.1% Investment in Securities Lending Short Term Investment Portfolio Held by U.S. Bank (Note 8) 600,365 600,365 --------------- TOTAL SECURITIES LENDING COLLATERAL (Cost $600,365) 600,365 --------------- TOTAL INVESTMENTS 104.7% (Cost $28,599,102) $ 30,411,626 =============== LIABILITIES IN EXCESS OF OTHER ASSETS - (4.7)% $ (1,358,972) =============== NET ASSETS - 100.0% $ 29,052,654 ============================================================================== UNREALIZED GAIN CONTRACTS (NOTE 1) - ------------------------------------------------------------------------------ FUTURES CONTRACTS PURCHASED March 2005 S&P 500 Index Mini Futures Contracts (Aggregate Market Value of Contracts $38,832,000) 640 $ 513,080 =============== * NON-INCOME PRODUCING SECURITIES. + ALL OR A PORTION OF THIS SECURITY IS ON LOAN AT DECEMBER 31, 2004 - SEE NOTE 8. REIT - REAL ESTATE INVESTMENT TRUST. See Notes to Financial Statements. 66 | THE RYDEX VARIABLE TRUST ANNUAL REPORT SCHEDULE OF INVESTMENTS December 31, 2004 - -------------------------------------------------------------------------------- VELOCITY 100 FUND - -------------------------------------------------------------------------------- MARKET VALUE SHARES (NOTE 1) - ------------------------------------------------------------------------------ COMMON STOCKS 74.3% INFORMATION TECHNOLOGY 42.7% SOFTWARE 13.3% Microsoft Corp. 119,031 $ 3,179,318 Oracle Corp.* 68,070 933,920 Electronic Arts, Inc.*+ 9,802 604,587 Symantec Corp.*+ 23,406 602,939 Adobe Systems, Inc. 7,439 466,723 Veritas Software Corp.* 13,734 392,106 Intuit, Inc.*+ 7,500 330,075 Autodesk, Inc. 7,670 291,076 Check Point Software Technologies Ltd.*+ 8,100 199,503 Siebel Systems, Inc.* 18,947 198,943 Citrix Systems, Inc.*+ 6,410 157,237 Mercury Interactive Corp.*+ 2,860 130,273 BEA Systems, Inc.* 11,930 105,700 Synopsys, Inc.* 4,330 84,955 --------------- TOTAL SOFTWARE 7,677,355 --------------- SEMICONDUCTOR & SEMICONDUCTOR EQUIPMENT 9.7% Intel Corp. 70,480 1,648,527 Maxim Integrated Products, Inc. 14,514 615,248 Linear Technology Corp. 13,060 506,206 Applied Materials, Inc.* 27,962 478,150 Xilinx, Inc.+ 14,710 436,151 KLA-Tencor Corp.* 7,540 351,213 Altera Corp.* 16,670 345,069 Marvell Technology Group Ltd.*+ 8,200 290,854 Broadcom Corp. -- Class A*+ 7,852 253,462 ATI Technologies, Inc.* 7,799 151,223 Microchip Technology, Inc. 5,460 145,564 Lam Research Corp.*+ 4,480 129,517 Novellus Systems, Inc.* 4,540 126,621 Intersil Corp. -- Class A 4,840 81,022 --------------- TOTAL SEMICONDUCTOR & SEMICONDUCTOR EQUIPMENT 5,558,827 --------------- COMMUNICATIONS EQUIPMENT 9.5% Qualcomm, Inc. 62,935 2,668,444 Cisco Systems, Inc.*+ 74,880 1,445,184 Research In Motion Ltd.*+ 5,979 492,789 Juniper Networks, Inc.*+ 11,248 305,833 Telefonaktiebolaget LM Ericsson - SP ADR* 5,540 174,455 JDS Uniphase Corp.*+ 52,200 165,474 Comverse Technology, Inc.* 6,526 159,561 Tellabs, Inc.*+ 7,570 65,026 --------------- TOTAL COMMUNICATIONS EQUIPMENT 5,476,766 --------------- MARKET VALUE SHARES (NOTE 1) - ------------------------------------------------------------------------------ COMPUTERS & PERIPHERALS 5.7% Dell, Inc.* 29,090 $ 1,225,852 Apple Computer, Inc.* 17,854 1,149,798 Network Appliance, Inc.*+ 11,945 396,813 Sun Microsystems, Inc.* 46,568 250,536 Sandisk Corp.* 4,760 118,857 QLogic Corp.*+ 3,000 110,190 --------------- TOTAL COMPUTERS & PERIPHERALS 3,252,046 --------------- INTERNET SOFTWARE & SERVICES 1.8% Yahoo!, Inc.*+ 21,040 792,787 VeriSign, Inc.*+ 7,649 256,395 --------------- TOTAL INTERNET SOFTWARE & SERVICES 1,049,182 --------------- IT CONSULTING & SERVICES 1.5% Paychex, Inc. 11,420 389,193 Fiserv, Inc.*+ 7,790 313,080 Cognizant Technology Solutions Corp.* 4,120 174,400 --------------- TOTAL IT CONSULTING & SERVICES 876,673 --------------- ELECTRONIC EQUIPMENT & INSTRUMENTS 1.2% Flextronics International Ltd.*+ 19,320 267,002 CDW Corp.+ 2,750 182,463 Sanmina-SCI Corp.* 17,710 150,004 Molex, Inc. 3,140 94,200 --------------- TOTAL ELECTRONIC EQUIPMENT & INSTRUMENTS 693,669 --------------- TOTAL INFORMATION TECHNOLOGY 24,584,518 --------------- CONSUMER DISCRETIONARY 14.7% INTERNET & CATALOG RETAIL 4.9% eBay, Inc.*+ 15,737 1,829,898 InterActiveCorp*+ 22,820 630,289 Amazon.com, Inc.*+ 8,625 382,001 --------------- TOTAL INTERNET & CATALOG RETAIL 2,842,188 --------------- MEDIA 4.5% Comcast Corp. -- Class A* 30,290 1,008,051 Sirius Satellite Radio, Inc.*+ 43,540 333,081 Liberty Media International, Inc. -- Class A* 5,630 260,275 XM Satellite Radio Holdings, Inc.* 6,720 252,806 EchoStar Communications Corp.+ 7,100 236,004 NTL, Inc.* 3,040 221,798 Pixar*+ 1,850 158,379 Lamar Advertising Co.*+ 2,710 115,934 --------------- TOTAL MEDIA 2,586,328 --------------- HOTELS RESTAURANTS & LEISURE 2.3% Starbucks Corp.*+ 17,590 1,096,912 Wynn Resorts Ltd.*+ 3,400 227,528 --------------- TOTAL HOTELS RESTAURANTS & LEISURE 1,324,440 --------------- See Notes to Financial Statements. THE RYDEX VARIABLE TRUST ANNUAL REPORT | 67 SCHEDULE OF INVESTMENTS (CONTINUED) December 31, 2004 - -------------------------------------------------------------------------------- VELOCITY 100 FUND - -------------------------------------------------------------------------------- MARKET VALUE SHARES (NOTE 1) - ------------------------------------------------------------------------------ SPECIALTY RETAIL 2.0% Bed Bath & Beyond, Inc.*+ 12,880 $ 513,011 Staples, Inc. 10,648 358,944 Petsmart, Inc.+ 4,600 163,438 Ross Stores, Inc.+ 4,620 133,379 --------------- TOTAL SPECIALTY RETAIL 1,168,772 --------------- MULTILINE RETAIL 0.7% Kmart Holding Corp.*+ 2,966 293,486 Dollar Tree Stores, Inc.*+ 3,460 99,233 --------------- TOTAL MULTILINE RETAIL 392,719 --------------- HOUSEHOLD DURABLES 0.3% Garmin Ltd.+ 3,190 194,080 --------------- TOTAL HOUSEHOLD DURABLES 194,080 --------------- TOTAL CONSUMER DISCRETIONARY 8,508,527 --------------- HEALTH CARE 9.1% BIOTECHNOLOGY 6.5% Amgen, Inc.*+ 18,840 1,208,586 Biogen Idec, Inc.*+ 11,540 768,679 Genzyme Corp.* 9,165 532,212 Gilead Sciences, Inc.* 13,572 474,884 Chiron Corp.* 8,320 277,306 Medimmune, Inc.*+ 8,470 229,622 Millennium Pharmaceuticals, Inc.* 10,680 129,442 Invitrogen Corp.*+ 1,527 102,507 --------------- TOTAL BIOTECHNOLOGY 3,723,238 --------------- HEALTH CARE EQUIPMENT & SUPPLIES 1.0% Biomet, Inc. 10,850 470,781 DENTSPLY International, Inc. 2,470 138,814 --------------- TOTAL HEALTH CARE EQUIPMENT & SUPPLIES 609,595 --------------- HEALTH CARE PROVIDERS & SERVICES 0.8% Patterson Cos., Inc.*+ 4,190 181,804 Express Scripts, Inc.*+ 2,160 165,111 Lincare Holdings, Inc.*+ 3,080 131,362 --------------- TOTAL HEALTH CARE PROVIDERS & SERVICES 478,277 --------------- PHARMACEUTICALS 0.8% Teva Pharmaceutical Industries Ltd. - SP ADR+ 14,640 437,150 --------------- TOTAL PHARMACEUTICALS 437,150 --------------- TOTAL HEALTH CARE 5,248,260 --------------- INDUSTRIALS 3.5% COMMERCIAL SERVICES & SUPPLIES 1.6% Apollo Group, Inc. -- Class A*+ 5,960 481,031 Cintas Corp.+ 6,560 287,722 Career Education Corp.*+ 3,316 132,640 --------------- TOTAL COMMERCIAL SERVICES & SUPPLIES 901,393 --------------- MARKET VALUE SHARES (NOTE 1) - ------------------------------------------------------------------------------ MACHINERY 0.9% Paccar, Inc. 6,200 $ 498,976 --------------- TOTAL MACHINERY 498,976 --------------- AIR FREIGHT & COURIERS 0.6% Expeditors International Washington, Inc.+ 3,329 186,024 C.H. Robinson Worldwide, Inc.+ 2,680 148,794 --------------- TOTAL AIR FREIGHT & COURIERS 334,818 --------------- TRADING COMPANIES & DISTRIBUTORS 0.2% Fastenal Co.+ 2,310 142,204 --------------- TOTAL TRADING COMPANIES & DISTRIBUTORS 142,204 --------------- ELECTRICAL EQUIPMENT 0.2% American Power Conversion Corp.+ 6,116 130,882 --------------- TOTAL ELECTRICAL EQUIPMENT 130,882 --------------- TOTAL INDUSTRIALS 2,008,273 --------------- TELECOMMUNICATION SERVICES 2.8% WIRELESS TELECOMMUNICATION SERVICES 2.3% Nextel Communications, Inc. -- Class A*+ 44,339 1,330,170 --------------- TOTAL WIRELESS TELECOMMUNICATION SERVICES 1,330,170 --------------- DIVERSIFIED TELECOMMUNICATION SERVICES 0.5% MCI, Inc. 11,020 222,163 Level 3 Communications, Inc.*+ 21,550 73,055 --------------- TOTAL DIVERSIFIED TELECOMMUNICATION SERVICES 295,218 --------------- TOTAL TELECOMMUNICATION SERVICES 1,625,388 --------------- CONSUMER STAPLES 1.0% FOOD & DRUG RETAILING 1.0% Costco Wholesale Corp.+ 7,862 380,600 Whole Foods Market, Inc.+ 1,952 186,123 --------------- TOTAL FOOD & DRUG RETAILING 566,723 --------------- TOTAL CONSUMER STAPLES 566,723 --------------- MATERIALS 0.5% CONTAINERS & PACKAGING 0.3% Smurfit-Stone Container Corp.* 7,929 148,114 --------------- TOTAL CONTAINERS & PACKAGING 148,114 --------------- CHEMICALS 0.2% Sigma-Aldrich Corp. 2,110 127,570 --------------- TOTAL CHEMICALS 127,570 --------------- TOTAL MATERIALS 275,684 --------------- TOTAL COMMON STOCKS (Cost $38,270,401) 42,817,373 --------------- See Notes to Financial Statements. 68 | THE RYDEX VARIABLE TRUST ANNUAL REPORT SCHEDULE OF INVESTMENTS (CONCLUDED) December 31, 2004 - -------------------------------------------------------------------------------- VELOCITY 100 FUND - -------------------------------------------------------------------------------- MARKET FACE VALUE AMOUNT (NOTE 1) - ------------------------------------------------------------------------------ REPURCHASE AGREEMENTS 25.0% Repurchase Agreement (Note 5) 1.55% due 01/03/05++ $ 7,599,073 $ 7,599,073 1.48% due 01/03/05 4,572,615 4,572,615 1.25% due 01/03/05 2,238,343 2,238,343 --------------- TOTAL REPURCHASE AGREEMENTS (Cost $14,410,031) 14,410,031 --------------- SECURITIES LENDING COLLATERAL 11.4% Investment in Securities Lending Short Term Investment Portfolio Held by U.S. Bank (Note 8) 6,533,954 6,533,954 --------------- TOTAL SECURITIES LENDING COLLATERAL (Cost $6,533,954) 6,533,954 --------------- TOTAL INVESTMENTS 110.7% (Cost $59,214,386) $ 63,761,358 =============== LIABILITIES IN EXCESS OF OTHER ASSETS - (10.7)% $ (6,162,556) =============== NET ASSETS - 100.0% $ 57,598,802 ============================================================================== UNREALIZED GAIN CONTRACTS (NOTE 1) - ------------------------------------------------------------------------------ FUTURES CONTRACTS PURCHASED March 2005 Nasdaq 100 Index Mini Futures Contracts (Aggregate Market Value of Contracts $18,586,050) 571 $ 42,325 =============== UNITS -------------- EQUITY INDEX SWAP AGREEMENT March 2005 Nasdaq 100 Index Swap, Maturing 03/14/05** (Notional Market Value $53,708,939) 33,131 $ 224,574 --------------- * NON-INCOME PRODUCING SECURITIES. ** PRICE RETURN BASED ON NASDAQ 100 INDEX +/- FINANCING AT A VARIABLE RATE. + ALL OR A PORTION OF THIS SECURITY IS ON LOAN AT DECEMBER 31, 2004 - SEE NOTE 8. ++ ALL OR A PORTION OF THIS SECURITY IS HELD AS COLLATERAL AT DECEMBER 31, 2004. ADR--AMERICAN DEPOSITORY RECEIPT. See Notes to Financial Statements. THE RYDEX VARIABLE TRUST ANNUAL REPORT | 69 SCHEDULE OF INVESTMENTS December 31, 2004 - -------------------------------------------------------------------------------- MEDIUS FUND - -------------------------------------------------------------------------------- MARKET VALUE SHARES (NOTE 1) - ------------------------------------------------------------------------------ COMMON STOCKS 77.8% FINANCIALS 14.8% BANKS 3.6% Banknorth Group, Inc. 8,740 $ 319,884 Mercantile Bankshares Corp. 5,180 270,396 Commerce Bancorp, Inc./NJ+ 4,170 268,548 Greater Bay Bancorp+ 7,030 195,996 Hibernia Corp. -- Class A 5,370 158,469 Colonial BancGroup, Inc. 770 16,347 --------------- TOTAL BANKS 1,229,640 --------------- INSURANCE 3.6% W.R. Berkley Corp. 5,790 273,114 Allmerica Financial Corp.* 6,530 214,380 Horace Mann Educators Corp. 9,890 188,701 American Financial Group, Inc./OH+ 5,190 162,499 Brown & Brown, Inc. 3,510 152,861 Fidelity National Financial, Inc. 2,260 103,214 Unitrin, Inc. 1,320 59,994 Arthur J. Gallagher & Co.+ 1,700 55,250 HCC Insurance Holdings, Inc.+ 100 3,312 --------------- TOTAL INSURANCE 1,213,325 --------------- THRIFTS & MORTGAGE FINANCE 2.4% New York Community Bancorp, Inc.+ 14,990 308,344 Independence Community Bank Corp.+ 6,010 255,906 Astoria Financial Corp. 5,950 237,822 Radian Group, Inc. 350 18,634 Webster Financial Corp. 180 9,115 --------------- TOTAL THRIFTS & MORTGAGE FINANCE 829,821 --------------- REAL ESTATE 2.2% Hospitality Properties Trust 4,340 199,640 Rayonier, Inc. 3,680 179,989 Liberty Property Trust 3,190 137,808 Developers Diversified Realty Corp.+ 2,600 115,362 Weingarten Realty Investors 1,990 79,799 Mack-Cali Realty Corp. 900 41,427 Highwoods Properties, Inc. 470 13,019 --------------- TOTAL REAL ESTATE 767,044 --------------- CAPITAL MARKETS 2.1% Legg Mason, Inc.+ 4,900 358,974 Waddell & Reed Financial, Inc. -- Class A 9,370 223,849 Eaton Vance Corp. 2,200 114,730 Investors Financial Services Corp. 210 10,496 --------------- TOTAL CAPITAL MARKETS 708,049 --------------- MARKET VALUE SHARES (NOTE 1) - ------------------------------------------------------------------------------ CONSUMER FINANCE 0.9% AmeriCredit Corp.* 11,770 $ 287,777 MoneyGram International, Inc. 1,360 28,750 --------------- TOTAL CONSUMER FINANCE 316,527 --------------- TOTAL FINANCIALS 5,064,406 --------------- CONSUMER DISCRETIONARY 14.6% SPECIALTY RETAIL 4.5% Chico's FAS, Inc.*+ 5,660 257,700 O'Reilly Automotive, Inc.* 4,390 197,769 Payless Shoesource, Inc.* 15,480 190,404 Foot Locker, Inc. 6,550 176,392 Regis Corp. 3,420 157,833 AnnTaylor Stores Corp.*+ 7,260 156,308 American Eagle Outfitters, Inc.+ 3,090 145,539 Urban Outfitters, Inc.* 3,270 145,188 Advance Auto Parts, Inc.* 1,800 78,624 Aeropostale, Inc.* 980 28,841 Williams-Sonoma, Inc.* 540 18,922 --------------- TOTAL SPECIALTY RETAIL 1,553,520 --------------- HOUSEHOLD DURABLES 3.7% Toll Brothers, Inc.*+ 4,650 319,036 Harman International Industries, Inc. 2,230 283,210 Mohawk Industries, Inc.*+ 2,490 227,212 American Greetings Corp. -- Class A 7,840 198,744 Furniture Brands International, Inc.+ 3,650 91,433 D.R. Horton, Inc.+ 1,790 72,155 Lennar Corp. -- Class A+ 1,120 63,482 --------------- TOTAL HOUSEHOLD DURABLES 1,255,272 --------------- HOTELS RESTAURANTS & LEISURE 2.2% Mandalay Resort Group 3,270 230,306 Ruby Tuesday, Inc.+ 6,070 158,306 GTECH Holdings Corp. 5,160 133,902 Caesars Entertainment, Inc.* 5,660 113,992 Boyd Gaming Corp. 940 39,151 Cheesecake Factory, Inc.*+ 1,155 37,503 Applebee's International, Inc. 1,310 34,649 --------------- TOTAL HOTELS RESTAURANTS & LEISURE 747,809 --------------- MEDIA 2.2% Washington Post Co. -- Class B 380 373,548 Media General, Inc. 2,670 173,043 Harte-Hanks, Inc. 3,590 93,268 Emmis Communications Corp. -- Class A* 4,570 87,698 Entercom Communications Corp.* 360 12,920 --------------- TOTAL MEDIA 740,477 --------------- AUTO COMPONENTS 1.1% Bandag, Inc. 3,280 163,377 See Notes to Financial Statements. 70 | THE RYDEX VARIABLE TRUST ANNUAL REPORT SCHEDULE OF INVESTMENTS (CONTINUED) December 31, 2004 - -------------------------------------------------------------------------------- MEDIUS FUND - -------------------------------------------------------------------------------- MARKET VALUE SHARES (NOTE 1) - ------------------------------------------------------------------------------ BorgWarner, Inc.+ 2,750 $ 148,968 Gentex Corp.+ 1,360 50,347 --------------- TOTAL AUTO COMPONENTS 362,692 --------------- MULTILINE RETAIL 0.8% Neiman-Marcus Group, Inc. -- Class A+ 3,760 268,990 --------------- TOTAL MULTILINE RETAIL 268,990 --------------- AUTOMOBILES 0.1% Thor Industries, Inc. 1,210 44,831 --------------- TOTAL AUTOMOBILES 44,831 --------------- TOTAL CONSUMER DISCRETIONARY 4,973,591 --------------- INFORMATION TECHNOLOGY 11.5% SOFTWARE 3.6% Activision, Inc.* 13,630 275,053 McAfee, Inc.*+ 8,570 247,930 Jack Henry & Associates, Inc.+ 10,950 218,014 Wind River Systems, Inc.* 14,130 191,461 Transaction Systems Architects, Inc. -- Class A* 6,700 132,995 Synopsys, Inc.* 5,940 116,543 Cadence Design Systems, Inc.*+ 3,360 46,402 Ascential Software Corp.* 850 13,864 --------------- TOTAL SOFTWARE 1,242,262 --------------- SEMICONDUCTOR & SEMICONDUCTOR EQUIPMENT 2.6% Lam Research Corp.*+ 9,320 269,441 Semtech Corp.* 7,730 169,055 Micrel, Inc.*+ 13,490 148,660 Cree, Inc.*+ 3,530 141,482 Fairchild Semiconductor International, Inc.* 7,900 128,454 Cypress Semiconductor Corp.*+ 2,170 25,454 --------------- TOTAL SEMICONDUCTOR & SEMICONDUCTOR EQUIPMENT 882,546 --------------- COMPUTERS & PERIPHERALS 1.6% Sandisk Corp.*+ 11,080 276,668 Storage Technology Corp.*+ 8,100 256,041 --------------- TOTAL COMPUTERS & PERIPHERALS 532,709 --------------- ELECTRONIC EQUIPMENT & INSTRUMENTS 1.2% Tech Data Corp.*+ 4,490 203,846 Vishay Intertechnology, Inc.* 10,090 151,552 National Instruments Corp.+ 2,430 66,218 Amphenol Corp. -- Class A* 210 7,715 --------------- TOTAL ELECTRONIC EQUIPMENT & INSTRUMENTS 429,331 --------------- COMMUNICATIONS EQUIPMENT 1.2% Polycom, Inc.* 6,280 146,450 CommScope, Inc.*+ 6,800 128,520 MARKET VALUE SHARES (NOTE 1) - ------------------------------------------------------------------------------ Plantronics, Inc. 2,550 $ 105,748 ADTRAN, Inc. 1,340 25,648 --------------- TOTAL COMMUNICATIONS EQUIPMENT 406,366 --------------- IT CONSULTING & SERVICES 1.0% Keane, Inc.* 12,520 184,044 Acxiom Corp. 5,790 152,277 --------------- TOTAL IT CONSULTING & SERVICES 336,321 --------------- OFFICE ELECTRONICS 0.3% Zebra Technologies Corp. -- Class A* 1,690 95,113 --------------- TOTAL OFFICE ELECTRONICS 95,113 --------------- TOTAL INFORMATION TECHNOLOGY 3,924,648 --------------- INDUSTRIALS 10.0% COMMERCIAL SERVICES & SUPPLIES 3.7% ChoicePoint, Inc.* 5,940 273,181 Stericycle, Inc.* 5,030 231,128 Education Management Corp.* 5,320 175,613 Career Education Corp.*+ 3,860 154,400 Copart, Inc.* 5,130 135,022 Kelly Services, Inc. 3,150 95,067 Republic Services, Inc. 2,500 83,850 Dun & Bradstreet Corp.* 1,110 66,212 Deluxe Corp. 1,310 48,902 Corinthian Colleges, Inc.*+ 980 18,468 --------------- TOTAL COMMERCIAL SERVICES & SUPPLIES 1,281,843 --------------- MACHINERY 2.0% Pentair, Inc. 5,850 254,826 Kennametal, Inc. 4,130 205,550 Harsco Corp.+ 2,590 144,366 Crane Co. 1,490 42,972 AGCO Corp.*+ 1,840 40,278 --------------- TOTAL MACHINERY 687,992 --------------- ROAD & RAIL 1.1% J.B. Hunt Transport Services, Inc. 4,330 194,201 Swift Transportation Co., Inc.*+ 8,380 180,002 --------------- TOTAL ROAD & RAIL 374,203 --------------- AEROSPACE & DEFENSE 0.7% Precision Castparts Corp. 3,710 243,673 --------------- TOTAL AEROSPACE & DEFENSE 243,673 --------------- AIR FREIGHT & COURIERS 0.6% Expeditors International Washington, Inc.+ 3,290 183,845 CNF, Inc. 340 17,034 --------------- TOTAL AIR FREIGHT & COURIERS 200,879 --------------- INDUSTRIAL CONGLOMERATES 0.6% Teleflex, Inc. 3,690 191,658 --------------- TOTAL INDUSTRIAL CONGLOMERATES 191,658 --------------- See Notes to Financial Statements. THE RYDEX VARIABLE TRUST ANNUAL REPORT | 71 SCHEDULE OF INVESTMENTS (CONTINUED) December 31, 2004 - -------------------------------------------------------------------------------- MEDIUS FUND - -------------------------------------------------------------------------------- MARKET VALUE SHARES (NOTE 1) - ------------------------------------------------------------------------------ ELECTRICAL EQUIPMENT 0.5% Thomas & Betts Corp.* 5,750 $ 176,812 --------------- TOTAL ELECTRICAL EQUIPMENT 176,812 --------------- CONSTRUCTION & ENGINEERING 0.5% Dycom Industries, Inc.*+ 5,490 167,555 --------------- TOTAL CONSTRUCTION & ENGINEERING 167,555 --------------- AIRLINES 0.3% Alaska Air Group, Inc.*+ 3,100 103,819 --------------- TOTAL AIRLINES 103,819 --------------- TOTAL INDUSTRIALS 3,428,434 --------------- HEALTH CARE 8.4% HEALTH CARE PROVIDERS & SERVICES 4.3% Lincare Holdings, Inc.*+ 6,850 292,152 Triad Hospitals, Inc.*+ 6,520 242,609 Patterson Cos., Inc.*+ 4,910 213,045 Universal Health Services, Inc. -- Class B 4,310 191,795 Apria Healthcare Group, Inc.* 5,750 189,462 Community Health Systems, Inc.* 4,550 126,854 Renal Care Group, Inc.* 1,890 68,021 Henry Schein, Inc.*+ 940 65,462 Covance, Inc.* 1,320 51,150 First Health Group Corp.* 1,860 34,801 --------------- TOTAL HEALTH CARE PROVIDERS & SERVICES 1,475,351 --------------- BIOTECHNOLOGY 1.8% Invitrogen Corp.*+ 3,940 264,492 Charles River Laboratories International, Inc.*+ 5,020 230,970 Millennium Pharmaceuticals, Inc.* 9,120 110,535 --------------- TOTAL BIOTECHNOLOGY 605,997 --------------- HEALTH CARE EQUIPMENT & SUPPLIES 1.4% DENTSPLY International, Inc. 4,260 239,412 Hillenbrand Industries, Inc. 2,110 117,190 Varian, Inc.* 1,220 50,032 Cytyc Corp.* 1,440 39,701 Varian Medical Systems, Inc.*+ 380 16,431 --------------- TOTAL HEALTH CARE EQUIPMENT & SUPPLIES 462,766 --------------- PHARMACEUTICALS 0.9% Barr Pharmaceuticals, Inc.*+ 6,810 310,127 --------------- TOTAL PHARMACEUTICALS 310,127 --------------- TOTAL HEALTH CARE 2,854,241 --------------- UTILITIES 5.3% ELECTRIC UTILITIES 2.7% Pepco Holdings, Inc.+ 12,230 260,744 IDACORP, Inc. 6,590 201,456 MARKET VALUE SHARES (NOTE 1) - ------------------------------------------------------------------------------ OGE Energy Corp.+ 6,960 $ 184,510 Duquesne Light Holdings, Inc.+ 8,480 159,848 NSTAR 2,230 121,044 --------------- TOTAL ELECTRIC UTILITIES 927,602 --------------- MULTI-UTILITIES 2.6% Oneok, Inc. 8,770 249,244 Energy East Corp. 9,130 243,588 MDU Resources Group, Inc. 9,100 242,788 Sierra Pacific Resources*+ 14,350 150,675 --------------- TOTAL MULTI-UTILITIES 886,295 --------------- TOTAL UTILITIES 1,813,897 --------------- ENERGY 5.1% OIL & GAS 3.4% Murphy Oil Corp. 3,950 317,777 Pogo Producing Co. 5,130 248,754 Forest Oil Corp.*+ 6,690 212,207 Noble Energy, Inc.+ 3,360 207,178 Newfield Exploration Co.* 3,310 195,455 --------------- TOTAL OIL & GAS 1,181,371 --------------- ENERGY EQUIPMENT & SERVICES 1.7% Weatherford International Ltd.*+ 6,470 331,911 Grant Prideco, Inc.* 6,490 130,124 Cooper Cameron Corp.*+ 1,950 104,930 ENSCO International, Inc.+ 90 2,857 --------------- TOTAL ENERGY EQUIPMENT & SERVICES 569,822 --------------- TOTAL ENERGY 1,751,193 --------------- MATERIALS 4.2% CHEMICALS 2.7% Lyondell Chemical Co.+ 12,110 350,221 Scotts Co. -- Class A* 3,270 240,410 Lubrizol Corp. 5,910 217,843 Airgas, Inc. 3,670 97,292 --------------- TOTAL CHEMICALS 905,766 --------------- PAPER & FOREST PRODUCTS 1.0% Potlatch Corp.+ 4,040 204,343 Bowater, Inc.+ 2,860 125,754 --------------- TOTAL PAPER & FOREST PRODUCTS 330,097 --------------- METALS & MINING 0.5% Peabody Energy Corp. 1,280 103,565 Steel Dynamics, Inc. 1,110 42,047 Worthington Industries, Inc. 2,000 39,160 --------------- TOTAL METALS & MINING 184,772 --------------- TOTAL MATERIALS 1,420,635 --------------- See Notes to Financial Statements. 72 | THE RYDEX VARIABLE TRUST ANNUAL REPORT SCHEDULE OF INVESTMENTS (CONCLUDED) December 31, 2004 - -------------------------------------------------------------------------------- MEDIUS FUND - -------------------------------------------------------------------------------- MARKET VALUE SHARES (NOTE 1) - ------------------------------------------------------------------------------ CONSUMER STAPLES 3.5% FOOD PRODUCTS 1.9% Tyson Foods, Inc. -- Class A 16,140 $ 296,976 Hormel Foods Corp. 7,250 227,287 Lancaster Colony Corp. 2,050 87,884 Dean Foods Co.* 840 27,678 --------------- TOTAL FOOD PRODUCTS 639,825 --------------- FOOD & DRUG RETAILING 0.6% BJ's Wholesale Club, Inc.*+ 4,300 125,259 Ruddick Corp. 4,170 90,447 --------------- TOTAL FOOD & DRUG RETAILING 215,706 --------------- BEVERAGES 0.6% PepsiAmericas, Inc. 10,090 214,311 --------------- TOTAL BEVERAGES 214,311 --------------- HOUSEHOLD PRODUCTS 0.4% Energizer Holdings, Inc.*+ 2,590 128,697 Church & Dwight Co., Inc. 230 7,733 --------------- TOTAL HOUSEHOLD PRODUCTS 136,430 --------------- TOTAL CONSUMER STAPLES 1,206,272 --------------- TELECOMMUNICATION SERVICES 0.4% WIRELESS TELECOMMUNICATION SERVICES 0.4% Telephone & Data Systems, Inc.+ 1,740 133,893 --------------- TOTAL WIRELESS TELECOMMUNICATION SERVICES 133,893 --------------- TOTAL TELECOMMUNICATION SERVICES 133,893 --------------- TOTAL COMMON STOCKS (Cost $24,475,292) 26,571,210 --------------- FACE AMOUNT -------------- FFEDERAL AGENCY DISCOUNT NOTES 5.9% Federal Home Loan Bank** 2.20% due 01/07/05 $ 1,000,000 999,756 Freddie Mac** 2.21% due 01/14/05 1,000,000 999,325 --------------- TOTAL FEDERAL AGENCY DISCOUNT NOTES (Cost $1,999,081) 1,999,081 --------------- REPURCHASE AGREEMENTS 18.5% Repurchase Agreement (Note 5) 1.55% due 01/03/05 1,575,642 1,575,642 1.48% due 01/03/05 3,196,132 3,196,132 1.25% due 01/03/05 1,564,540 1,564,540 --------------- TOTAL REPURCHASE AGREEMENTS (Cost $6,336,314) 6,336,314 --------------- MARKET FACE VALUE AMOUNT (NOTE 1) - ------------------------------------------------------------------------------ SECURITIES LENDING COLLATERAL 12.4% Investment in Securities Lending Short Term Investment Portfolio Held by U.S. Bank (Note 8) $ 4,234,054 $ 4,234,054 --------------- TOTAL SECURITIES LENDING COLLATERAL (Cost $4,234,054) 4,234,054 --------------- TOTAL INVESTMENTS 114.6% (Cost $37,044,741) $ 39,140,659 =============== LIABILITIES IN EXCESS OF OTHER ASSETS - (14.6)% $ (4,979,116) =============== NET ASSETS - 100.0% $ 34,161,543 ============================================================================== UNREALIZED GAIN CONTRACTS (NOTE 1) - ------------------------------------------------------------------------------ FUTURES CONTRACTS PURCHASED March 2005 S&P MidCap 400 Index Mini Futures Contracts (Aggregate Market Value of Contracts $9,898,070) 149 $ 344,720 =============== UNITS -------------- EQUITY INDEX SWAP AGREEMENT February 2005 S&P MidCap 400 Index Swap, Maturing 02/22/05*** (Notional Market Value $14,723,147) 22,196 $ 754,960 --------------- * NON-INCOME PRODUCING SECURITIES. ** THE ISSUER IS A PUBLICLY TRADED COMPANY THAT OPERATES UNDER A CONGRESSIONAL CHARTER; ITS SECURITIES ARE NEITHER ISSUED NOR GUARANTEED BY THE U.S. GOVERNMENT. *** PRICE RETURN BASED ON S&P MidCap 400 Index +/- financing at a variable rate. + All or a portion of this security is on loan at December 31, 2004 - See Note 8. See Notes to Financial Statements. THE RYDEX VARIABLE TRUST ANNUAL REPORT | 73 SCHEDULE OF INVESTMENTS December 31, 2004 - -------------------------------------------------------------------------------- INVERSE MID-CAP FUND - -------------------------------------------------------------------------------- MARKET FACE VALUE AMOUNT (NOTE 1) - ------------------------------------------------------------------------------ FEDERAL AGENCY DISCOUNT NOTES 45.5% Fannie Mae* 2.25% due 01/26/05 $ 100,000 $ 99,856 Farmer Mac* 2.24% due 01/06/05 250,000 249,953 Federal Home Loan Bank* 2.22% due 01/06/05 250,000 249,954 --------------- TOTAL FEDERAL AGENCY DISCOUNT NOTES (Cost $599,763) 599,763 --------------- REPURCHASE AGREEMENTS 34.7% Repurchase Agreement (Note 5) 1.55% due 01/03/05 113,951 113,951 1.48% due 01/03/05 231,146 231,146 1.25% due 01/03/05 113,149 113,149 --------------- TOTAL REPURCHASE AGREEMENTS (Cost $458,246) 458,246 --------------- TOTAL INVESTMENTS 80.2% (Cost $1,058,009) $ 1,058,009 =============== OTHER ASSETS IN EXCESS OF LIABILITIES - 19.8% $ 260,838 =============== NET ASSETS - 100.0% $ 1,318,847 - ------------------------------------------------------------------------------ UNREALIZED LOSS CONTRACTS (NOTE 1) - ------------------------------------------------------------------------------ FUTURES CONTRACTS SOLD SHORT March 2005 S&P MidCap 400 Index Mini Futures Contracts (Aggregate Market Value of Contracts $730,730) 11 $ (25,184) =============== UNITS -------------- EQUITY INDEX SWAP AGREEMENT February 2005 S&P MidCap 400 Index Swap, Maturing 02/22/05** (Notional Market Value $617,846) 931 $ (15,129) --------------- * THE ISSUER IS A PUBLICLY TRADED COMPANY THAT OPERATES UNDER A CONGRESSIONAL CHARTER; ITS SECURITIES ARE NEITHER ISSUED NOR GUARANTEED BY THE U.S. GOVERNMENT. ** PRICE RETURN BASED ON S&P MidCap 400 Index +/- financing at a variable rate. See Notes to Financial Statements. 74 | THE RYDEX VARIABLE TRUST ANNUAL REPORT SCHEDULE OF INVESTMENTS December 31, 2004 - -------------------------------------------------------------------------------- MEKROS FUND - -------------------------------------------------------------------------------- MARKET VALUE SHARES (NOTE 1) - ------------------------------------------------------------------------------ COMMON STOCKS 58.2% FINANCIALS 12.8% BANKS 5.0% First Bancorp Puerto Rico 5,150 $ 327,076 East-West Bancorp, Inc.+ 7,525 315,749 Silicon Valley Bancshares* 6,105 273,626 Southwest Bancorp of Texas, Inc. 11,600 270,164 Pacific Capital Bancorp 7,800 265,122 BancorpSouth, Inc. 10,867 264,829 Central Pacific Financial Corp. Co. 6,900 249,573 Citizens Banking Corp./MI 7,202 247,389 Cathay General Bancorp 6,528 244,800 Chittenden Corp. 8,320 239,034 Umpqua Holding Corp. 9,263 233,520 TrustCo Bank Corp./NY 16,140 222,571 Alabama National Bancorporation 3,330 214,785 Community Bank System, Inc. 7,544 213,118 Hancock Holding Co. 6,352 212,538 PrivateBancorp, Inc. 6,550 211,107 Hanmi Financial Corp. 5,830 209,530 Oriental Financial Group 7,266 205,686 First Charter Corp. 7,796 204,021 City Holding Co. 5,530 200,407 First Financial Bancorp 11,010 192,675 Irwin Financial Corp. 6,760 191,916 Nara Bancorp, Inc. 8,765 186,432 First Midwest Bancorp, Inc./IL 2,900 105,241 Prosperity Bancshares, Inc. 1,690 49,365 Signature Bank/New York NY* 1,120 36,243 --------------- TOTAL BANKS 5,586,517 --------------- REAL ESTATE 4.1% First Industrial Realty Trust, Inc. 6,585 268,207 American Home Mortgage Investment Corp. 7,680 263,040 Prentiss Properties Trust 6,835 261,097 Brandywine Realty Trust 8,170 240,116 Glimcher Realty Trust 8,290 229,716 Corporate Office Properties Trust SBI/MD 7,795 228,783 LaSalle Hotel Properties 6,980 222,173 Impac Mortgage Holdings, Inc. 9,730 220,579 Redwood Trust, Inc.+ 3,450 214,210 Jones Lang LaSalle, Inc.* 5,685 212,676 CRT Properties, Inc. 8,465 201,975 Mid-America Apartment Communities, Inc. 4,895 201,772 Parkway Properties, Inc./MD 3,933 199,600 MARKET VALUE SHARES (NOTE 1) - ------------------------------------------------------------------------------ Sovran Self Storage, Inc. 4,720 $ 198,901 Cousins Properties, Inc. 6,470 195,847 National Health Investors, Inc. 6,613 192,967 Colonial Properties Trust+ 4,840 190,067 MFA Mortgage Investments, Inc. 21,040 185,573 Bedford Property Investors, Inc. 5,780 164,210 LTC Properties, Inc. 7,381 146,956 Capstead Mortgage Corp.+ 13,190 139,023 Essex Property Trust, Inc. 910 76,258 HomeBanc Corp./Atlanta GA 3,390 32,815 Newcastle Investment Corp. 990 31,462 Luminent Mortgage Capital, Inc. 2,430 28,917 Anworth Mortgage Asset Corp. 1,680 17,993 CB Richard Ellis Group, Inc. -- Class A* 120 4,026 MortgageIT Holdings, Inc. 180 3,231 --------------- TOTAL REAL ESTATE 4,572,190 --------------- INSURANCE 1.5% ProAssurance Corp.*+ 5,840 228,402 RLI Corp. 5,322 221,236 Delphi Financial Group, Inc. -- Class A 4,600 212,290 Triad Guaranty, Inc.* 3,325 201,096 Direct General Corp. 6,170 198,057 State Auto Financial Corp. 6,108 157,892 Universal American Financial Corp.* 9,800 151,606 Selective Insurance Group, Inc. 1,880 83,171 Infinity Property & Casualty Corp. 2,275 80,080 Zenith National Insurance Corp. 910 45,354 American Equity Investment Life Holding Co.+ 3,245 34,949 UICI 1,020 34,578 Vesta Insurance Group, Inc. 2,199 8,092 --------------- TOTAL INSURANCE 1,656,803 --------------- THRIFTS & MORTGAGE FINANCE 1.4% MAF Bancorp, Inc. 5,200 233,064 BankAtlantic Bancorp, Inc. -- Class A 10,645 211,836 Corus Bankshares, Inc. 4,324 207,595 Harbor Florida Bancshares, Inc. 5,986 207,175 Commercial Capital Bancorp, Inc. 8,547 198,119 NetBank, Inc. 17,780 185,090 Flagstar Bancorp, Inc. 5,617 126,944 Dime Community Bancshares 5,925 106,117 Franklin Bank Corp./Houston TX* 5,148 93,951 Ocwen Financial Corp.*+ 5,030 48,087 Brookline Bancorp, Inc. 4 65 --------------- TOTAL THRIFTS & MORTGAGE FINANCE 1,618,043 --------------- See Notes to Financial Statements. THE RYDEX VARIABLE TRUST ANNUAL REPORT | 75 SCHEDULE OF INVESTMENTS (CONTINUED) December 31, 2004 - -------------------------------------------------------------------------------- MEKROS FUND - -------------------------------------------------------------------------------- MARKET VALUE SHARES (NOTE 1) - ------------------------------------------------------------------------------ CAPITAL MARKETS 0.5% National Financial Partners Corp. 6,170 $ 239,396 MCG Capital Corp. 10,705 183,377 Affiliated Managers Group*+ 730 49,450 Gabelli Asset Management, Inc. -- Class A 850 41,242 Cohen & Steers, Inc. 2,115 34,369 --------------- TOTAL CAPITAL MARKETS 547,834 --------------- CONSUMER FINANCE 0.2% Nelnet, Inc. -- Class A* 7,440 200,359 Collegiate Funding Services LLC* 3,450 48,611 Education Lending Group, Inc.*+ 2,257 35,006 --------------- TOTAL CONSUMER FINANCE 283,976 --------------- DIVERSIFIED FINANCIALS 0.1% GATX Corp.+ 5,870 173,517 --------------- TOTAL DIVERSIFIED FINANCIALS 173,517 --------------- TOTAL FINANCIALS 14,438,880 --------------- INFORMATION TECHNOLOGY 10.7% SOFTWARE 2.2% Micros Systems, Inc.* 3,900 304,434 Parametric Technology Corp.*+ 44,840 264,108 Kronos, Inc./MA* 5,135 262,553 Borland Software Corp.* 22,390 261,515 Macrovision Corp.*+ 9,275 238,553 Ansys, Inc.* 7,336 235,192 Progress Software Corp.* 9,555 223,109 Transaction Systems Architects, Inc. -- Class A* 10,335 205,150 Epicor Software Corp.* 14,400 202,896 Midway Games, Inc.* 17,240 181,020 MicroStrategy, Inc. -- Class A* 722 43,500 Advent Software, Inc.* 1,875 38,400 --------------- TOTAL SOFTWARE 2,460,430 --------------- SEMICONDUCTOR & SEMICONDUCTOR EQUIPMENT 2.0% Varian Semiconductor Equipment Associates, Inc.* 6,780 249,843 ON Semiconductor Corp.*+ 54,985 249,632 Kulicke & Soffa Industries, Inc.* 28,300 243,946 AMIS Holdings, Inc.* 12,639 208,796 MKS Instruments, Inc.* 11,185 207,482 Cymer, Inc.*+ 7,020 207,371 ATMI, Inc.* 8,890 200,292 Micrel, Inc.*+ 17,970 198,029 Axcelis Technologies, Inc.* 22,675 184,348 OmniVision Technologies, Inc.*+ 3,537 64,904 Photronics, Inc.* 3,460 57,090 Sigmatel, Inc.* 1,442 51,234 Brooks Automation, Inc.* 2,765 47,613 MARKET VALUE SHARES (NOTE 1) - ------------------------------------------------------------------------------ Skyworks Solutions, Inc.* 4,660 $ 43,944 Pixelworks, Inc.* 2,459 27,885 --------------- TOTAL SEMICONDUCTOR & SEMICONDUCTOR EQUIPMENT 2,242,409 --------------- ELECTRONIC EQUIPMENT & INSTRUMENTS 1.6% Taser International, Inc.*+ 10,840 342,436 Coherent, Inc.* 7,692 234,144 Littelfuse, Inc.* 5,588 190,886 CTS Corp. 13,905 184,797 Agilsys, Inc. 10,395 178,170 BEI Technologies, Inc. 5,686 175,584 Methode Electronics, Inc. -- Class A 13,307 170,995 Paxar Corp.* 6,150 136,346 Anixter International, Inc.*+ 3,505 126,145 Trimble Navigation Ltd.* 2,950 97,468 --------------- TOTAL ELECTRONIC EQUIPMENT & INSTRUMENTS 1,836,971 --------------- INTERNET SOFTWARE & SERVICES 1.4% EarthLink, Inc.*+ 22,300 256,896 Jupitermedia Corp.* 9,800 233,044 Equinix, Inc.* 5,442 232,591 Digitas, Inc.*+ 22,560 215,448 WebEx Communications, Inc.*+ 8,590 204,270 Sohu.com, Inc.*+ 9,130 161,692 aQuantive, Inc.* 17,710 158,328 Travelzoo, Inc.*+ 1,445 137,897 FindWhat.com*+ 1,547 27,428 --------------- TOTAL INTERNET SOFTWARE & SERVICES 1,627,594 --------------- IT CONSULTING & SERVICES 1.3% CACI International, Inc. -- Class A*+ 4,540 309,310 BISYS Group, Inc.*+ 17,465 287,299 Euronet Worldwide, Inc.* 9,375 243,938 CSG Systems International, Inc.* 12,880 240,856 iPayment Holdings, Inc.* 4,350 215,412 Sapient Corp.* 7,000 55,370 TNS, Inc.* 2,420 52,877 --------------- TOTAL IT CONSULTING & SERVICES 1,405,062 --------------- COMMUNICATIONS EQUIPMENT 1.2% F5 Networks, Inc.* 6,870 334,706 Extreme Networks, Inc.* 39,290 257,350 CommScope, Inc.* 10,100 190,890 Sycamore Networks, Inc.* 38,585 156,655 Arris Group, Inc.*+ 19,360 136,294 Ditech Communications Corp.* 8,440 126,178 Black Box Corp.+ 2,420 116,208 ViaSat, Inc.* 1,202 29,173 --------------- TOTAL COMMUNICATIONS EQUIPMENT 1,347,454 --------------- See Notes to Financial Statements. 76 | THE RYDEX VARIABLE TRUST ANNUAL REPORT SCHEDULE OF INVESTMENTS (CONTINUED) December 31, 2004 - -------------------------------------------------------------------------------- MEKROS FUND - -------------------------------------------------------------------------------- MARKET VALUE SHARES (NOTE 1) - ------------------------------------------------------------------------------ COMPUTERS & PERIPHERALS 1.0% Brocade Communications Systems, Inc.*+ 40,590 $ 310,108 Intergraph Corp.* 7,735 208,304 Electronics for Imaging, Inc.*+ 9,450 164,524 PalmOne, Inc.*+ 4,941 155,889 Komag, Inc.*+ 8,230 154,559 McData Corp. -- Class A* 20,690 123,312 --------------- TOTAL COMPUTERS & PERIPHERALS 1,116,696 --------------- TOTAL INFORMATION TECHNOLOGY 12,036,616 --------------- CONSUMER DISCRETIONARY 8.7% HOTELS, RESTAURANTS & LEISURE 1.9% La Quinta Corp.* 30,425 276,563 Rare Hospitality International, Inc.* 7,870 250,738 Sunterra Corp.*+ 16,700 234,468 Landry's Restaurants, Inc. 6,895 200,369 Steak N Shake Co.* 9,130 183,330 Ameristar Casinos, Inc. 4,176 180,027 Six Flags, Inc.* 33,510 179,949 Vail Resorts, Inc.* 5,590 125,328 P.F. Chang's China Bistro, Inc.* 2,180 122,843 Isle of Capri Casinos, Inc.* 3,450 88,493 Bluegreen Corp.* 3,850 76,346 Krispy Kreme Doughnuts, Inc.*+ 4,779 60,215 Navigant International* 4,105 49,958 Red Robin Gourmet Burgers, Inc.* 700 37,429 Life Time Fitness, Inc.* 1,150 29,762 Multimedia Games, Inc.* 1,387 21,859 Marcus Corp. 60 1,508 --------------- TOTAL HOTELS, RESTAURANTS & LEISURE 2,119,185 --------------- SPECIALTY RETAIL 1.8% Charming Shoppes, Inc.* 28,006 262,416 Cato Corp. -- Class A 7,862 226,583 Sonic Automotive, Inc. 9,070 224,936 Group 1 Automotive, Inc.* 6,570 206,955 United Auto Group, Inc. 6,990 206,834 Movie Gallery, Inc.+ 10,160 193,751 West Marine, Inc.* 7,735 191,441 Select Comfort Corp.* 5,020 90,059 Cost Plus, Inc.* 2,720 87,394 Finish Line, Inc. -- Class A+ 4,360 79,788 Bebe Stores, Inc. 2,625 70,822 Sports Authority, Inc.*+ 2,420 62,315 HOT Topic, Inc.* 2,720 46,757 Christopher & Banks Corp. 2,239 41,310 Jos. A. Bank Clothiers, Inc.*+ 1,210 34,243 Guess ?, Inc.* 1,750 21,962 --------------- TOTAL SPECIALTY RETAIL 2,047,566 --------------- MARKET VALUE SHARES (NOTE 1) - ------------------------------------------------------------------------------ MEDIA 1.4% RH Donnelley Corp.* 4,410 $ 260,410 Cumulus Media, Inc. -- Class A* 13,490 203,429 Entravision Communications Corp. -- Class A* 22,374 186,823 Lin TV Corp. -- Class A* 9,435 180,208 Insight Communications Co., Inc.* 19,119 177,233 Reader's Digest Association, Inc. 11,780 163,860 Mediacom Communications Corp.* 25,670 160,437 Emmis Communications Corp. -- Class A* 8,050 154,480 Sinclair Broadcast Group, Inc. -- Class A 7,070 65,115 Primedia, Inc.* 7,742 29,420 --------------- TOTAL MEDIA 1,581,415 --------------- HOUSEHOLD DURABLES 1.1% Yankee Candle Co., Inc.* 8,350 277,053 Ethan Allen Interiors, Inc. 6,360 254,527 WCI Communities, Inc.* 8,530 250,782 Libbey, Inc. 7,257 161,178 Interface, Inc. -- Class A* 12,325 122,880 Champion Enterprises, Inc.* 6,920 81,795 Tempur-Pedic International, Inc.*+ 2,000 42,400 Blount International, Inc.* 2,235 38,934 --------------- TOTAL HOUSEHOLD DURABLES 1,229,549 --------------- AUTO COMPONENTS 0.7% Goodyear Tire & Rubber Co.*+ 23,290 341,431 Tenneco Automotive, Inc.* 13,730 236,705 Superior Industries International, Inc.+ 4,360 126,658 Exide Technologies* 6,775 93,360 --------------- TOTAL AUTO COMPONENTS 798,154 --------------- TEXTILES & APPAREL 0.7% K-Swiss, Inc. -- Class A 8,540 248,685 Brown Shoe Co., Inc. 7,200 214,776 Oxford Industries, Inc. 4,596 189,815 Warnaco Group, Inc.* 4,225 91,260 --------------- TOTAL TEXTILES & APPAREL 744,536 --------------- LEISURE EQUIPMENT & PRODUCTS 0.4% SCP Pool Corp. 7,980 254,562 K2, Inc.* 12,870 204,376 --------------- TOTAL LEISURE EQUIPMENT & PRODUCTS 458,938 --------------- AUTOMOBILES 0.2% Winnebago Industries, Inc. 5,950 232,407 Thor Industries, Inc. 1,110 41,125 --------------- TOTAL AUTOMOBILES 273,532 --------------- See Notes to Financial Statements. THE RYDEX VARIABLE TRUST ANNUAL REPORT | 77 SCHEDULE OF INVESTMENTS (CONTINUED) December 31, 2004 - -------------------------------------------------------------------------------- MEKROS FUND - -------------------------------------------------------------------------------- MARKET VALUE SHARES (NOTE 1) - ------------------------------------------------------------------------------ INTERNET & CATALOG RETAIL 0.2% 1-800-FLOWERS.com, Inc.* 19,654 $ 165,290 Priceline.com, Inc.*+ 2,600 61,334 --------------- TOTAL INTERNET & CATALOG RETAIL 226,624 --------------- MULTILINE RETAIL 0.2% ShopKo Stores, Inc.* 9,425 176,059 --------------- TOTAL MULTILINE RETAIL 176,059 --------------- DISTRIBUTORS 0.1% Handleman Co. 4,420 94,942 --------------- TOTAL DISTRIBUTORS 94,942 --------------- TOTAL CONSUMER DISCRETIONARY 9,750,500 --------------- INDUSTRIALS 8.3% COMMERCIAL SERVICES & SUPPLIES 2.3% Resources Connection, Inc.*+ 5,320 288,929 Ionics, Inc.*+ 6,530 283,010 Brady Corp. -- Class A 3,812 238,517 Mobile Mini, Inc.* 6,782 224,077 Sotheby's Holdings, Inc. -- Class A*+ 12,215 221,824 Bowne & Co., Inc. 13,600 221,136 Kelly Services, Inc. 6,526 196,955 Central Parking Corp. 12,916 195,677 Spherion Corp.* 22,320 187,488 Korn/Ferry International, Inc.* 8,170 169,527 Imagistics International, Inc.* 2,780 93,575 Jackson Hewitt Tax Service, Inc. 3,630 91,658 Rollins, Inc. 1,810 47,639 NCO Group, Inc.* 1,613 41,696 Tetra Tech, Inc.* 2,290 38,335 Casella Waste Systems, Inc. -- Class A* 2,337 34,214 Waste Connections, Inc.* 140 4,795 --------------- TOTAL COMMERCIAL SERVICES & SUPPLIES 2,579,052 --------------- MACHINERY 1.9% Toro Co.+ 3,570 290,420 Watts Industries, Inc. -- Class A. 7,019 226,293 Wabtec Corp. 10,395 221,621 Thomas Industries, Inc. 5,496 219,400 Wabash National Corp.*+ 7,037 189,506 Mueller Industries, Inc. 5,630 181,286 Terex Corp.* 3,630 172,970 Astec Industries, Inc.* 8,890 152,997 Barnes Group, Inc. 5,745 152,300 Middleby Corp. 2,827 143,386 Tecumseh Products Co. -- Class A 2,340 111,852 Gardner Denver, Inc.* 2,749 99,761 Bucyrus International, Inc. -- Class A 724 29,423 --------------- TOTAL MACHINERY 2,191,215 --------------- MARKET VALUE SHARES (NOTE 1) - ------------------------------------------------------------------------------ ROAD & RAIL 0.9% Swift Transportation Co., Inc.*+ 11,670 $ 250,672 Kansas City Southern*+ 13,641 241,855 Dollar Thrifty Automotive Group, Inc.* 7,700 232,540 Old Dominion Freight Line, Inc.* 4,107 142,924 RailAmerica, Inc.* 9,320 121,626 USF Corp. 1,632 61,934 --------------- TOTAL ROAD & RAIL 1,051,551 --------------- AEROSPACE & DEFENSE 0.9% Moog, Inc. -- Class A* 5,614 254,595 DRS Technologies, Inc.* 5,380 229,780 Aviall, Inc.* 8,465 194,441 Cubic Corp. 7,440 187,265 Curtiss-Wright Corp. 1,090 62,577 EDO Corp. 1,505 47,784 Teledyne Technologies, Inc.* 790 23,249 --------------- TOTAL AEROSPACE & DEFENSE 999,691 --------------- ELECTRICAL EQUIPMENT 0.7% Thomas & Betts Corp.* 8,860 272,445 II-Vi, Inc.* 4,895 207,989 Franklin Electric Co., Inc. 4,540 191,860 A.O. Smith Corp. 1,600 47,904 Plug Power, Inc.*+ 2,840 17,352 --------------- TOTAL ELECTRICAL EQUIPMENT 737,550 --------------- BUILDING PRODUCTS 0.5% Trex Co., Inc.*+ 3,985 208,973 Jacuzzi Brands, Inc.* 20,375 177,263 Apogee Enterprises, Inc. 10,590 142,012 --------------- TOTAL BUILDING PRODUCTS 528,248 --------------- CONSTRUCTION & ENGINEERING 0.4% Washington Group International, Inc.* 4,980 205,425 Shaw Group, Inc.* 10,147 181,124 Mastec, Inc.* 1,375 13,901 --------------- TOTAL CONSTRUCTION & ENGINEERING 400,450 --------------- AIR FREIGHT & COURIERS 0.2% Pacer International, Inc.* 8,748 185,982 EGL, Inc.*+ 2,331 69,674 --------------- TOTAL AIR FREIGHT & COURIERS 255,656 --------------- AIRLINES 0.2% Alaska Air Group, Inc.* 3,925 131,448 ExpressJet Holdings, Inc.* 5,500 70,840 Continental Airlines, Inc. -- Class B* 3,841 52,007 --------------- TOTAL AIRLINES 254,295 --------------- See Notes to Financial Statements. 78 | THE RYDEX VARIABLE TRUST ANNUAL REPORT SCHEDULE OF INVESTMENTS (CONTINUED) December 31, 2004 - -------------------------------------------------------------------------------- MEKROS FUND - -------------------------------------------------------------------------------- MARKET VALUE SHARES (NOTE 1) - ------------------------------------------------------------------------------ MARINE 0.1% Kirby Corp.* 3,145 $ 139,575 --------------- TOTAL MARINE 139,575 --------------- TRADING COMPANIES & DISTRIBUTORS 0.1% Watsco, Inc. 3,265 114,993 --------------- TOTAL TRADING COMPANIES & DISTRIBUTORS 114,993 --------------- INDUSTRIAL CONGLOMERATES 0.1% Tredegar Corp. 4,250 85,893 --------------- TOTAL INDUSTRIAL CONGLOMERATES 85,893 --------------- TOTAL INDUSTRIALS 9,338,169 --------------- HEALTH CARE 7.4% HEALTH CARE EQUIPMENT & SUPPLIES 2.3% Intuitive Surgical, Inc.* 8,100 324,162 Sola International, Inc.* 10,040 276,502 Steris Corp.* 11,149 264,454 West Pharmaceutical Services, Inc. 8,826 220,915 Haemonetics Corp./MA*+ 5,805 210,199 Conmed Corp.* 7,380 209,740 Kyphon, Inc.*+ 7,675 197,708 Analogic Corp. 4,230 189,462 Varian, Inc.* 3,850 157,888 Laserscope* 4,080 146,513 Align Technology, Inc.* 12,825 137,869 Mentor Corp. 3,052 102,974 Biosite, Inc.*+ 1,500 92,310 Intermagnetics General Corp.* 2,295 58,316 --------------- TOTAL HEALTH CARE EQUIPMENT & SUPPLIES 2,589,012 --------------- HEALTH CARE PROVIDERS & SERVICES 2.1% Cerner Corp.*+ 5,120 272,230 Chemed Corp. 3,450 231,529 eResearch Technology, Inc.* 14,568 230,903 NDCHealth Corp. 11,460 213,041 IDX Systems Corp.* 5,805 200,040 Magellan Health Services, Inc.* 5,800 198,128 Parexel International Corp.* 9,403 190,881 First Health Group Corp.* 8,540 159,783 Apria Healthcare Group, Inc.* 4,445 146,463 American Healthways, Inc.* 3,945 130,343 Per-Se Technologies, Inc.* 8,050 127,431 Pediatrix Medical Group, Inc.* 1,473 94,346 Advisory Board Co.* 1,145 42,228 Genesis HealthCare Corp.* 990 34,680 Odyssey HealthCare, Inc.* 2,092 28,619 LabOne, Inc.* 370 11,855 AMN Healthcare Services, Inc.* 675 10,739 --------------- TOTAL HEALTH CARE PROVIDERS & SERVICES 2,323,239 --------------- MARKET VALUE SHARES (NOTE 1) - ------------------------------------------------------------------------------ BIOTECHNOLOGY 2.0% Human Genome Sciences, Inc.* 21,890 $ 263,118 Transkaryotic Therapies, Inc.* 10,040 254,915 United Therapeutics Corp.* 5,440 245,616 Alexion Pharmaceuticals, Inc.* 9,740 245,448 Cubist Pharmaceuticals, Inc.* 17,963 212,502 Vertex Pharmaceuticals, Inc.*+ 19,240 203,367 Exelixis, Inc.* 21,380 203,110 NPS Pharmaceuticals, Inc.*+ 9,120 166,714 Medarex, Inc.*+ 15,097 162,746 Vicuron Pharmaceuticals, Inc.* 8,358 145,513 Abgenix, Inc.*+ 12,915 133,541 Serologicals Corp.* 2,120 46,894 Digene Corp.* 805 21,051 MannKind Corp.* 670 10,552 --------------- TOTAL BIOTECHNOLOGY 2,315,087 --------------- PHARMACEUTICALS 1.0% Bone Care International, Inc.* 7,203 200,603 Perrigo Co. 11,210 193,597 Connetics Corp.*+ 7,620 185,090 Kos Pharmaceuticals, Inc.* 4,870 183,307 Alpharma, Inc. -- Class A 9,916 168,076 First Horizon Pharmaceutical* 7,220 165,266 --------------- TOTAL PHARMACEUTICALS 1,095,939 --------------- TOTAL HEALTH CARE 8,323,277 --------------- MATERIALS 3.7% CHEMICALS 1.7% Cytec Industries, Inc. 5,865 301,578 Mosaic Co.*+ 15,610 254,755 Airgas, Inc. 9,605 254,629 Georgia Gulf Corp.+ 5,090 253,482 MacDermid, Inc. 6,705 242,050 PolyOne Corp.* 23,910 216,625 Arch Chemicals, Inc. 6,533 188,020 FMC Corp.* 3,020 145,866 Minerals Technologies, Inc. 650 43,355 Westlake Chemical Corp. 1,070 35,738 --------------- TOTAL CHEMICALS 1,936,098 --------------- METALS & MINING 1.1% Allegheny Technologies, Inc.+ 14,820 321,149 Cleveland-Cliffs, Inc.+ 2,540 263,804 GrafTech International Ltd.*+ 16,820 159,117 AK Steel Holding Corp.* 10,178 147,276 Oregon Steel Mills, Inc.* 6,437 130,607 Wheeling-Pittsburgh Corp.* 2,840 109,454 Stillwater Mining Co.* 6,220 70,037 Hecla Mining Co.* 7,273 42,402 --------------- TOTAL METALS & MINING 1,243,846 --------------- See Notes to Financial Statements. THE RYDEX VARIABLE TRUST ANNUAL REPORT | 79 SCHEDULE OF INVESTMENTS (CONTINUED) December 31, 2004 - -------------------------------------------------------------------------------- MEKROS FUND - -------------------------------------------------------------------------------- MARKET VALUE SHARES (NOTE 1) - ------------------------------------------------------------------------------ CONTAINERS & PACKAGING 0.5% AptarGroup, Inc. 5,490 $ 289,762 Silgan Holdings, Inc. 3,450 210,312 Crown Holdings, Inc.*+ 2,480 34,075 --------------- TOTAL CONTAINERS & PACKAGING 534,149 --------------- PAPER & FOREST PRODUCTS 0.2% Potlatch Corp.+ 4,990 252,394 --------------- TOTAL PAPER & FOREST PRODUCTS 252,394 --------------- CONSTRUCTION MATERIALS 0.2% Texas Industries, Inc. 3,190 198,992 --------------- TOTAL CONSTRUCTION MATERIALS 198,992 --------------- TOTAL MATERIALS 4,165,479 --------------- ENERGY 2.7% OIL & GAS 1.5% Vintage Petroleum, Inc. 10,525 238,812 Stone Energy Corp.* 4,826 217,604 Frontier Oil Corp. 7,915 211,014 Spinnaker Exploration Co.* 5,865 205,686 Holly Corp. 7,120 198,434 Tesoro Corp.* 5,880 187,337 Plains Exploration & Production Co.* 6,550 170,300 Meridian Resource Corp.* 14,990 90,689 Whiting Petroleum Corp.* 2,300 69,575 Overseas Shipholding Group, Inc.+ 1,070 59,064 Comstock Resources, Inc.* 1,810 39,911 Energy Partners Ltd.* 1,496 30,324 Brigham Exploration Co.* 1,459 13,131 --------------- TOTAL OIL & GAS 1,731,881 --------------- ENERGY EQUIPMENT & SERVICES 1.2% Maverick Tube Corp.*+ 7,380 223,614 Cal Dive International, Inc.*+ 4,720 192,340 Universal Compression Holdings, Inc.* 5,440 189,910 Unit Corp.*+ 4,860 185,701 Dril-Quip, Inc.* 6,409 155,482 Atwood Oceanics, Inc.* 2,285 119,049 Newpark Resources, Inc.* 17,535 90,305 Offshore Logistics, Inc.* 1,640 53,251 Veritas DGC, Inc.* 1,987 44,529 Lone Star Technologies, Inc.* 1,150 38,479 Todco -- Class A* 1,770 32,603 --------------- TOTAL ENERGY EQUIPMENT & SERVICES 1,325,263 --------------- TOTAL ENERGY 3,057,144 --------------- MARKET VALUE SHARES (NOTE 1) - ------------------------------------------------------------------------------ UTILITIES 2.0% GAS UTILITIES 0.8% Southern Union Co.*+ 11,311 $ 271,234 Atmos Energy Corp. 9,730 266,115 Laclede Group, Inc. 6,470 201,541 South Jersey Industries, Inc. 3,750 197,100 --------------- TOTAL GAS UTILITIES 935,990 --------------- ELECTRIC UTILITIES 0.6% Cleco Corp.+ 11,665 236,333 Duquesne Light Holdings, Inc.+ 12,195 229,876 IDACORP, Inc. 7,395 226,065 --------------- TOTAL ELECTRIC UTILITIES 692,274 --------------- MULTI-UTILITIES 0.5% CMS Energy Corp.*+ 25,760 269,192 Sierra Pacific Resources*+ 24,320 255,360 --------------- TOTAL MULTI-UTILITIES 524,552 --------------- WATER UTILITIES 0.1% American States Water Co. 4,715 122,590 --------------- TOTAL WATER UTILITIES 122,590 --------------- TOTAL UTILITIES 2,275,406 --------------- CONSUMER STAPLES 1.5% FOOD PRODUCTS 0.6% Chiquita Brands International, Inc. 10,830 238,910 Sanderson Farms, Inc.+ 4,952 214,323 American Italian Pasta Co. -- Class A+ 5,080 118,110 Ralcorp Holdings, Inc. 1,782 74,719 --------------- TOTAL FOOD PRODUCTS 646,062 --------------- FOOD & DRUG RETAILING 0.4% Longs Drug Stores Corp. 7,890 217,527 Central European Distribution Corp.* 7,335 216,676 Smart & Final, Inc.* 2,955 42,522 Winn-Dixie Stores, Inc.+ 4,841 22,027 --------------- TOTAL FOOD & DRUG RETAILING 498,752 --------------- PERSONAL PRODUCTS 0.2% Nu Skin Enterprises, Inc.+ 9,407 238,750 --------------- TOTAL PERSONAL PRODUCTS 238,750 --------------- HOUSEHOLD PRODUCTS 0.2% Central Garden and Pet Co.* 3,925 163,829 --------------- TOTAL HOUSEHOLD PRODUCTS 163,829 --------------- TOBACCO 0.1% Vector Group Ltd. 7,390 122,896 --------------- TOTAL TOBACCO 122,896 --------------- TOTAL CONSUMER STAPLES 1,670,289 --------------- See Notes to Financial Statements. 80 | THE RYDEX VARIABLE TRUST ANNUAL REPORT SCHEDULE OF INVESTMENTS (CONCLUDED) December 31, 2004 - -------------------------------------------------------------------------------- MEKROS FUND - -------------------------------------------------------------------------------- MARKET VALUE SHARES (NOTE 1) - ------------------------------------------------------------------------------ TELECOMMUNICATION SERVICES 0.4% WIRELESS TELECOMMUNICATION SERVICES 0.3% USA Mobility, Inc.* 6,333 $ 223,618 Ubiquitel, Inc.* 7,920 56,390 Dobson Communications Corp. -- Class A* 27,890 47,971 --------------- TOTAL WIRELESS TELECOMMUNICATION SERVICES 327,979 --------------- DIVERSIFIED TELECOMMUNICATION SERVICES 0.1% Time Warner Telecom, Inc. -- Class A* 19,930 86,895 Golden Telecom, Inc. 3,040 80,317 --------------- TOTAL DIVERSIFIED TELECOMMUNICATION SERVICES 167,212 --------------- TOTAL TELECOMMUNICATION SERVICES 495,191 --------------- TOTAL COMMON STOCKS (Cost $60,973,106) 65,550,951 --------------- FACE AMOUNT ------------- FEDERAL AGENCY DISCOUNT NOTES 8.9% Farmer Mac** 2.12% due 01/14/05 $ 2,000,000 1,998,705 Federal Farm Credit Bank** 2.18% due 01/06/05 2,000,000 1,999,653 Federal Home Loan Bank** 2.15% due 01/05/05 2,000,000 1,999,761 Freddie Mac** 2.21% due 01/14/05 4,000,000 3,997,299 --------------- TOTAL FEDERAL AGENCY DISCOUNT NOTES (Cost $9,995,418) 9,995,418 --------------- REPURCHASE AGREEMENTS 29.2% Repurchase Agreement (Note 5) 1.55% due 01/03/05++ 8,450,129 8,450,129 1.48% due 01/03/05 16,390,719 16,390,719 1.25% due 01/03/05 8,023,429 8,023,429 --------------- TOTAL REPURCHASE AGREEMENTS (Cost $32,864,277) 32,864,277 --------------- MARKET FACE VALUE AMOUNT (NOTE 1) - ------------------------------------------------------------------------------ SECURITIES LENDING COLLATERAL 4.7% Investment in Securities Lending Short Term Investment Portfolio Held by U.S. Bank (Note 8) $ 5,310,738 $ 5,310,738 --------------- TOTAL SECURITIES LENDING COLLATERAL (Cost $5,310,738) 5,310,738 --------------- TOTAL INVESTMENTS 101.0% (Cost $109,143,539) $ 113,721,384 =============== LIABILITIES IN EXCESS OF OTHER ASSETS - (1.0)% $ (1,072,588) =============== NET ASSETS - 100.0% $ 112,648,796 ============================================================================== UNREALIZED GAIN CONTRACTS (NOTE 1) - ------------------------------------------------------------------------------ FUTURES CONTRACTS PURCHASED March 2005 Russell 2000 Index Mini Futures Contracts (Aggregate Market Value of Contracts $52,330,500) 802 $ 1,178,307 =============== UNITS ------------- EQUITY INDEX SWAP AGREEMENTS February 2005 Russell 2000 Index Swap, Maturing 02/22/05*** (Notional Market Value $48,704,189) 74,749 $ 1,474,112 March 2005 Russell 2000 Index Swap, Maturing 03/14/05*** (Notional Market Value $2,516,979) 3,863 51,435 --------------- (TOTAL NOTIONAL MARKET VALUE $51,221,168) $ 1,525,547 =============== * Non-Income Producing Securities. ** The issuer is a publicly traded company that operates under a Congressional charter; its securities are neither issued nor guaranteed by the U.S. Government. *** Price Return based on Russell 2000 Index +/- financing at a variable rate. + All or a portion of this security is on loan at December 31, 2004 - See Note 8. ++ All or a portion of this security is held as collateral at December 31, 2004. See Notes to Financial Statements. THE RYDEX VARIABLE TRUST ANNUAL REPORT | 81 SCHEDULE OF INVESTMENTS December 31, 2004 - -------------------------------------------------------------------------------- INVERSE SMALL-CAP FUND - -------------------------------------------------------------------------------- MARKET FACE VALUE AMOUNT (NOTE 1) - ------------------------------------------------------------------------------ FEDERAL AGENCY DISCOUNT NOTES 17.3% Fannie Mae* 2.25% due 01/26/05 $ 250,000 $ 249,641 Farmer Mac* 2.24% due 01/06/05 250,000 249,953 Federal Home Loan Bank* 2.22% due 01/06/05 250,000 249,954 --------------- TOTAL FEDERAL AGENCY DISCOUNT NOTES (Cost $749,548) 749,548 --------------- REPURCHASE AGREEMENTS 89.7% Repurchase Agreement (Note 5) 1.55% due 01/03/05 968,873 968,873 1.48% due 01/03/05 1,965,324 1,965,324 1.25% due 01/03/05 962,046 962,046 --------------- TOTAL REPURCHASE AGREEMENTS (Cost $3,896,243) 3,896,243 --------------- TOTAL INVESTMENTS 107.0% (Cost $4,645,791) $ 4,645,791 =============== LIABILITIES IN EXCESS OF OTHER ASSETS - (7.0)% $ (301,995) =============== NET ASSETS - 100.0% $ 4,343,796 ============================================================================== UNREALIZED LOSS CONTRACTS (NOTE 1) - ------------------------------------------------------------------------------ FUTURES CONTRACTS SOLD SHORT March 2005 Russell 2000 Index Mini Futures Contracts (Aggregate Market Value of Contracts $652,500) 10 $ (14,093) =============== UNITS ------------- EQUITY INDEX SWAP AGREEMENT February 2005 Russell 2000 Index Swap, Maturing 02/22/05** (Notional Market Value $3,662,529) 5,621 $ (89,390) --------------- * THE ISSUER IS A PUBLICLY TRADED COMPANY THAT OPERATES UNDER A CONGRESSIONAL CHARTER; ITS SECURITIES ARE NEITHER ISSUED NOR GUARANTEED BY THE U.S. GOVERNMENT. ** PRICE RETURN BASED ON RUSSELL 2000 INDEX +/- FINANCING AT A VARIABLE RATE. See Notes to Financial Statements. 82 | THE RYDEX VARIABLE TRUST ANNUAL REPORT SCHEDULE OF INVESTMENTS December 31, 2004 - -------------------------------------------------------------------------------- U.S. GOVERNMENT BOND FUND - -------------------------------------------------------------------------------- MARKET FACE VALUE AMOUNT (NOTE 1) - ------------------------------------------------------------------------------ FEDERAL AGENCY DISCOUNT NOTES 18.5% Fannie Mae* 2.15% due 01/07/05 $ 2,000,000 $ 1,999,522 Federal Home Loan Bank* 2.20% due 01/07/05 4,000,000 3,999,022 Freddie Mac* 2.12% due 01/11/05 3,000,000 2,998,587 --------------- TOTAL FEDERAL AGENCY DISCOUNT NOTES (Cost $8,997,131) 8,997,131 --------------- U.S. TREASURY OBLIGATIONS 36.2% U.S. Treasury Bond 5.38% due 02/15/31 16,297,000 17,628,770 --------------- TOTAL U.S. TREASURY OBLIGATIONS (Cost $16,386,361) 17,628,770 --------------- REPURCHASE AGREEMENTS 42.3% Repurchase Agreement (Note 5) 1.55% due 01/03/05 5,123,749 5,123,749 1.48% due 01/03/05 10,393,340 10,393,340 1.25% due 01/03/05 5,087,649 5,087,649 --------------- TOTAL REPURCHASE AGREEMENTS (Cost $20,604,738) 20,604,738 --------------- TOTAL INVESTMENTS 97.0% (Cost $45,988,230) $ 47,230,639 =============== OTHER ASSETS IN EXCESS OF LIABILITIES - 3.0% $ 1,478,453 =============== NET ASSETS - 100.0% $ 48,709,092 ============================================================================== UNREALIZED GAIN CONTRACTS (NOTE 1) - ------------------------------------------------------------------------------ FUTURES CONTRACTS PURCHASED March 2005 U.S. Treasury Bond Futures Contracts (Aggregate Market Value of Contracts $60,187,500) 535 $ 484,056 =============== * THE ISSUER IS A PUBLICLY TRADED COMPANY THAT OPERATES UNDER A CONGRESSIONAL CHARTER; ITS SECURITIES ARE NEITHER ISSUED NOR GUARANTEED BY THE U.S. GOVERNMENT. See Notes to Financial Statements. THE RYDEX VARIABLE TRUST ANNUAL REPORT | 83 SCHEDULE OF INVESTMENTS December 31, 2004 - -------------------------------------------------------------------------------- JUNO FUND - -------------------------------------------------------------------------------- MARKET FACE VALUE AMOUNT (NOTE 1) - ------------------------------------------------------------------------------ FEDERAL AGENCY DISCOUNT NOTES 60.8% Fannie Mae* 2.17% due 01/07/05 $ 3,000,000 $ 2,999,277 Farmer Mac* 2.12% due 01/14/05 7,000,000 6,995,466 Federal Farm Credit Bank* 2.19% due 01/18/05+ 3,000,000 2,997,262 Federal Home Loan Bank* 2.22% due 01/07/05+ 5,000,000 4,998,767 2.15% due 01/05/05+ 4,000,000 3,999,522 Freddie Mac* 2.21% due 01/14/05+ 3,000,000 2,997,974 --------------- TOTAL FEDERAL AGENCY DISCOUNT NOTES (Cost $24,988,268) 24,988,268 --------------- CONTRACTS ------------- OPTIONS PURCHASED 0.0% Call Options on: March 2005 U.S. Treasury Bond Futures Contracts Expiring March 2005 with strike price of 1260 191 2,984 March 2005 U.S Treasury Bond Futures Contracts Expiring March 2005 with strike price of 1240 18 281 --------------- TOTAL OPTIONS PURCHASED (Cost $4,259) 3,265 --------------- MARKET FACE VALUE AMOUNT (NOTE 1) - ------------------------------------------------------------------------------ REPURCHASE AGREEMENTS 121.0% Repurchase Agreement (Note 5) 1.55% due 01/03/05+ $ 4,302,078 $ 4,302,078 1.48% due 01/03/05+ 8,726,611 8,726,611 1.25% due 01/03/05+ 4,271,768 4,271,768 Individual Repurchase Agreement Lehman Brothers, Inc. at 0.95% due 01/03/05 (Secured by U.S. Treasury Bonds, at a rate of 5.375% and maturing 02/15/31 as collateral, with a Market Value of $33,058,050) 32,405,000 32,405,000 --------------- TOTAL REPURCHASE AGREEMENTS (Cost $49,705,457) 49,705,457 --------------- TOTAL INVESTMENTS 181.8% (Cost $74,697,984) $ 74,696,990 =============== U.S. TREASURY OBLIGATIONS SOLD SHORT (77.7)% U.S. Treasury Bond (Cost $32,524,572) $ 29,525,000 (31,937,746) =============== LIABILITIES IN EXCESS OF OTHER ASSETS - (4.1)% $ (1,661,448) =============== NET ASSETS - 100.0% $ 41,097,796 ============================================================================== UNREALIZED GAIN (LOSS) CONTRACTS (NOTE 1) - ------------------------------------------------------------------------------ FUTURES CONTRACTS SOLD SHORT March 2005 U.S. Treasury Bond Futures Contracts (Aggregate Market Value of Contracts $13,837,500) 123 $ (24,566) =============== * THE ISSUER IS A PUBLICLY TRADED COMPANY THAT OPERATES UNDER A CONGRESSIONAL CHARTER; ITS SECURITIES ARE NEITHER ISSUED NOR GUARANTEED BY THE U.S. GOVERNMENT. + ALL OR A PORTION OF THIS SECURITY IS HELD AS COLLATERAL AT DECEMBER 31, 2004. See Notes to Financial Statements. 84 | THE RYDEX VARIABLE TRUST ANNUAL REPORT SCHEDULE OF INVESTMENTS December 31, 2004 - -------------------------------------------------------------------------------- LARGE-CAP EUROPE FUND MARKET - -------------------------------------------------------------------------------- FACE VALUE AMOUNT (NOTE 1) - ------------------------------------------------------------------------------ FEDERAL AGENCY DISCOUNT NOTES 18.2% Farmer Mac* 2.12% due 01/14/05 $ 2,000,000 $ 1,998,704 Federal Farm Credit Bank* 2.18% due 01/06/05 3,000,000 2,999,455 Federal Home Loan Bank* 2.15% due 01/05/05 3,000,000 2,999,642 Freddie Mac* 2.21% due 01/14/05 2,000,000 1,998,649 --------------- TOTAL FEDERAL AGENCY DISCOUNT NOTES (Cost $9,996,450) 9,996,450 --------------- REPURCHASE AGREEMENTS 77.3% Repurchase Agreement (Note 5) 1.55% due 01/03/05+ $ 18,013,659 18,013,659 1.48% due 01/03/05 16,458,627 16,458,627 1.25% due 01/03/05 8,056,671 8,056,671 --------------- TOTAL REPURCHASE AGREEMENTS (Cost $42,528,957) 42,528,957 --------------- TOTAL INVESTMENTS 95.5% (Cost $52,525,407) $ 52,525,407 =============== OTHER ASSETS IN EXCESS OF LIABILITIES - 4.5% $ 2,468,842 =============== NET ASSETS - 100.0% $ 54,994,249 ============================================================================== UNREALIZED GAIN UNITS (NOTE 1) - ------------------------------------------------------------------------------ EQUITY INDEX SWAP AGREEMENT March 2005 Dow Jones STOXX 50 Index Swap, Maturing 3/14/05** (Notional Market Value $68,713,017) 18,178 $ 989,008 --------------- * THE ISSUER IS A PUBLICLY TRADED COMPANY THAT OPERATES UNDER A CONGRESSIONAL CHARTER; ITS SECURITIES ARE NEITHER ISSUED NOR GUARANTEED BY THE U.S. GOVERNMENT. ** PRICE RETURN BASED ON DOW JONES STOXX 50 INDEX +/- FINANCING AT A VARIABLE RATE. + ALL OR A PORTION OF THIS SECURITY IS HELD AS COLLATERAL AT DECEMBER 31, 2004. See Notes to Financial Statements. THE RYDEX VARIABLE TRUST ANNUAL REPORT | 85 SCHEDULE OF INVESTMENTS December 31, 2004 - -------------------------------------------------------------------------------- LARGE-CAP JAPAN FUND - -------------------------------------------------------------------------------- MARKET FACE VALUE AMOUNT (NOTE 1) - ------------------------------------------------------------------------------ FEDERAL AGENCY DISCOUNT NOTES 28.1% Farmer Mac* 2.12% due 01/14/05 $ 2,000,000 $ 1,998,704 Federal Farm Credit Bank* 2.18% due 01/06/05 2,000,000 1,999,653 --------------- TOTAL FEDERAL AGENCY DISCOUNT NOTES (Cost $3,998,357) 3,998,357 --------------- REPURCHASE AGREEMENTS 34.9% Repurchase Agreement (Note 5) 1.55% due 01/03/05+ 2,427,975 2,427,975 1.48% due 01/03/05 1,704,714 1,704,714 1.25% due 01/03/05 834,475 834,475 --------------- TOTAL REPURCHASE AGREEMENTS (Cost $4,967,164) 4,967,164 --------------- TOTAL INVESTMENTS 63.0% (Cost $8,965,521) $ 8,965,521 =============== OTHER ASSETS IN EXCESS OF LIABILITIES - 37.0% $ 5,262,570 =============== NET ASSETS - 100.0% $ 14,228,091 ============================================================================== UNREALIZED GAIN CONTRACTS (NOTE 1) - ------------------------------------------------------------------------------ FUTURES CONTRACTS PURCHASED March 2005 Nikkei 225 Index Futures Contracts (Aggregate Market Value of Contracts $983,450) 17 $ 21,559 March 2005 Yen Currency Exchange Futures Contracts (Aggregate Market Value of Contracts $1,592,013) 13 10,201 --------------- (TOTAL AGGREGATE MARKET VALUE OF CONTRACTS $2,575,463) $ 31,760 --------------- UNITS ------------- EQUITY INDEX SWAP AGREEMENT March 2005 Topix 100 Index Swap, Maturing 03/14/05** (Notional Market Value $16,861,372) 2,075,051 $ 827,597 =============== * THE ISSUER IS A PUBLICLY TRADED COMPANY THAT OPERATES UNDER A CONGRESSIONAL CHARTER; ITS SECURITIES ARE NEITHER ISSUED NOR GUARANTEED BY THE U.S. GOVERNMENT. ** PRICE RETURN BASED ON TOPIX 100 INDEX +/- FINANCING AT A VARIABLE RATE. + ALL OR A PORTION OF THIS SECURITY IS HELD AS COLLATERAL AT DECEMBER 31, 2004. See Notes to Financial Statements. 86 | THE RYDEX VARIABLE TRUST ANNUAL REPORT SCHEDULE OF INVESTMENTS December 31, 2004 - -------------------------------------------------------------------------------- LONG DYNAMIC DOW 30 FUND - -------------------------------------------------------------------------------- MARKET VALUE SHARES (NOTE 1) - ------------------------------------------------------------------------------ COMMON STOCKS 66.2% INDUSTRIALS 18.4% AEROSPACE & DEFENSE 8.6% United Technologies Corp. 4,730 $ 488,846 Boeing Co. 4,730 244,872 Honeywell International, Inc. 4,730 167,489 --------------- TOTAL AEROSPACE & DEFENSE 901,207 --------------- INDUSTRIAL CONGLOMERATES 5.4% 3M Co.+ 4,730 388,191 General Electric Co. 4,730 172,645 --------------- TOTAL INDUSTRIAL CONGLOMERATES 560,836 --------------- MACHINERY 4.4% Caterpillar, Inc.+ 4,730 461,222 --------------- TOTAL MACHINERY 461,222 --------------- TOTAL INDUSTRIALS 1,923,265 --------------- CONSUMER STAPLES 9.6% TOBACCO 2.8% Altria Group, Inc.+ 4,730 289,003 --------------- TOTAL TOBACCO 289,003 --------------- HOUSEHOLD PRODUCTS 2.5% Procter & Gamble Co. 4,730 260,528 --------------- TOTAL HOUSEHOLD PRODUCTS 260,528 --------------- FOOD & DRUG RETAILING 2.4% Wal-Mart Stores, Inc. 4,730 249,839 --------------- TOTAL FOOD & DRUG RETAILING 249,839 --------------- BEVERAGES 1.9% Coca-Cola Co. 4,730 196,910 --------------- TOTAL BEVERAGES 196,910 --------------- TOTAL CONSUMER STAPLES 996,280 --------------- FINANCIALS 9.5% DIVERSIFIED FINANCIALS 3.9% Citigroup, Inc. 4,730 227,892 J.P. Morgan Chase & Co. 4,730 184,517 --------------- TOTAL DIVERSIFIED FINANCIALS 412,409 --------------- INSURANCE 3.0% American International Group, Inc.+ 4,730 310,619 --------------- TOTAL INSURANCE 310,619 --------------- CONSUMER FINANCE 2.6% American Express Co. 4,730 266,630 --------------- TOTAL CONSUMER FINANCE 266,630 --------------- TOTAL FINANCIALS 989,658 --------------- MARKET VALUE SHARES (NOTE 1) - ------------------------------------------------------------------------------ INFORMATION TECHNOLOGY 7.7% COMPUTERS & PERIPHERALS 5.4% International Business Machines Corp. 4,730 $ 466,283 Hewlett-Packard Co. 4,730 99,188 --------------- TOTAL COMPUTERS & PERIPHERALS 565,471 --------------- SOFTWARE 1.2% Microsoft Corp. 4,730 126,338 --------------- TOTAL SOFTWARE 126,338 --------------- SEMICONDUCTOR & SEMICONDUCT OR EQUIPMENT 1.1% Intel Corp. 4,730 110,635 --------------- TOTAL SEMICONDUCTOR & SEMICONDUCTOR EQUIPMENT 110,635 --------------- TOTAL INFORMATION TECHNOLOGY 802,444 --------------- CONSUMER DISCRETIONARY 6.5% SPECIALTY RETAIL 1.9% Home Depot, Inc. 4,730 202,160 --------------- TOTAL SPECIALTY RETAIL 202,160 --------------- AUTOMOBILES 1.8% General Motors Corp.+ 4,730 189,484 --------------- TOTAL AUTOMOBILES 189,484 --------------- HOTELS RESTAURANTS & LEISURE 1.5% McDonald's Corp. 4,730 151,644 --------------- TOTAL HOTELS RESTAURANTS & LEISURE 151,644 --------------- MEDIA 1.3% Walt Disney Co.+ 4,730 131,494 --------------- TOTAL MEDIA 131,494 --------------- TOTAL CONSUMER DISCRETIONARY 674,782 --------------- HEALTH CARE 5.6% PHARMACEUTICALS 5.6% Johnson & Johnson, Inc. 4,730 299,977 Merck & Co., Inc. 4,730 152,022 Pfizer, Inc. 4,730 127,190 --------------- TOTAL PHARMACEUTICALS 579,189 --------------- TOTAL HEALTH CARE 579,189 --------------- MATERIALS 3.6% CHEMICALS 2.2% EI Du Pont de Nemours & Co. 4,730 232,006 --------------- TOTAL CHEMICALS 232,006 --------------- METALS & MINING 1.4% Alcoa, Inc. 4,730 148,617 --------------- TOTAL METALS & MINING 148,617 --------------- TOTAL MATERIALS 380,623 --------------- See Notes to Financial Statements. THE RYDEX VARIABLE TRUST ANNUAL REPORT | 87 SCHEDULE OF INVESTMENTS (CONCLUDED) December 31, 2004 - -------------------------------------------------------------------------------- LONG DYNAMIC DOW 30 FUND - -------------------------------------------------------------------------------- MARKET VALUE SHARES (NOTE 1) - ------------------------------------------------------------------------------ TELECOMMUNICATION SERVICES 3.0% DIVERSIFIED TELECOMMUNICATION SERVICES 3.0% Verizon Communications, Inc. 4,730 $ 191,612 SBC Communications, Inc. 4,730 121,892 --------------- TOTAL DIVERSIFIED TELECOMMUNICATION SERVICES 313,504 --------------- TOTAL TELECOMMUNICATION SERVICES 313,504 --------------- ENERGY 2.3% OIL & GAS 2.3% Exxon Mobil Corp. 4,730 242,460 --------------- TOTAL OIL & GAS 242,460 --------------- TOTAL ENERGY 242,460 --------------- TOTAL COMMON STOCKS (Cost $6,599,108) 6,902,205 --------------- FACE AMOUNT ------------- REPURCHASE AGREEMENTS 28.0% Repurchase Agreement (Note 5) 1.55% due 01/03/05++ $ 1,257,546 1,257,546 1.48% due 01/03/05 1,112,034 1,112,034 1.25% due 01/03/05 544,353 544,353 --------------- TOTAL REPURCHASE AGREEMENTS (Cost $2,913,933) 2,913,933 --------------- SECURITIES LENDING COLLATERAL 6.0% Investment in Securities Lending Short Term Investment Portfolio held by U.S. Bank (Note 8) 621,340 621,340 --------------- TOTAL SECURITIES LENDING COLLATERAL (Cost $621,340) $ 621,340 --------------- TOTAL INVESTMENTS 100.2% (Cost $10,134,381) $ 10,437,478 =============== LIABILITIES IN EXCESS OF OTHER ASSETS - (0.2)% $ (18,135) =============== NET ASSETS - 100.0% $ 10,419,343 ============================================================================== UNREALIZED GAIN CONTRACTS (NOTE 1) - ------------------------------------------------------------------------------ FUTURES CONTRACTS PURCHASED March 2005 Dow Jones Industrial Average Index Mini Futures Contracts (Aggregate Market Value of Contracts $6,849,745) 127 $ 53,336 =============== UNITS ------------- EQUITY INDEX SWAP AGREEMENT March 2005 Dow Jones Industrial Average Index Swap, Maturing 03/14/05* (Notional Market Value $7,115,159) 660 $ 9,579 --------------- * PRICE RETURN BASED ON DOW JONES INDUSTRIAL AVERAGE INDEX +/- FINANCING AT A VARIABLE RATE. + ALL OR A PORTION OF THIS SECURITY IS ON LOAN AT DECEMBER 31, 2004 - SEE NOTE 8. ++ ALL OR A PORTION OF THIS SECURITY IS HELD AS COLLATERAL AT DECEMBER 31, 2004. See Notes to Financial Statements. 88 | THE RYDEX VARIABLE TRUST ANNUAL REPORT SCHEDULE OF INVESTMENTS December 31, 2004 - -------------------------------------------------------------------------------- INVERSE DYNAMIC DOW 30 FUND - -------------------------------------------------------------------------------- MARKET FACE VALUE AMOUNT (NOTE 1) - ------------------------------------------------------------------------------ FEDERAL AGENCY DISCOUNT NOTES 22.0% Fannie Mae* 2.25% due 01/26/05 $ 200,000 $ 199,713 Farmer Mac* 2.24% due 01/06/05 250,000 249,953 Federal Home Loan Bank* 2.22% due 01/06/05 250,000 249,954 --------------- TOTAL FEDERAL AGENCY DISCOUNT NOTES (Cost $699,620) 699,620 --------------- REPURCHASE AGREEMENTS 73.6% Repurchase Agreement (Note 5) 1.55% due 01/03/05+ 741,185 741,185 1.48% due 01/03/05 1,075,414 1,075,414 1.25% due 01/03/05 526,427 526,427 --------------- TOTAL REPURCHASE AGREEMENTS (Cost $2,343,026) 2,343,026 --------------- TOTAL INVESTMENTS 95.6% (Cost $3,042,646) $ 3,042,646 =============== OTHER ASSETS IN EXCESS OF LIABILITIES - 4.4% $ 141,652 =============== NET ASSETS - 100.0% $ 3,184,298 ============================================================================== UNREALIZED LOSS CONTRACTS (NOTE 1) - ------------------------------------------------------------------------------ FUTURES CONTRACTS SOLD SHORT March 2005 Dow Jones Industrial Average Index Mini Futures Contracts (Aggregate Market Value of Contracts $4,260,865) 79 $ (105,806) =============== UNITS ------------- EQUITY INDEX SWAP AGREEMENT March 2005 Dow Jones Industrial Average Index Swap, Maturing 03/14/05** (Notional Market Value $2,132,460) 198 $ (13,425) =============== * THE ISSUER IS A PUBLICLY TRADED COMPANY THAT OPERATES UNDER A CONGRESSIONAL CHARTER; ITS SECURITIES ARE NEITHER ISSUED NOR GUARANTEED BY THE U.S. GOVERNMENT. ** PRICE RETURN BASED ON DOW JONES INDUSTRIAL AVERAGE INDEX +/- FINANCING AT A VARIABLE RATE. + ALL OR A PORTION OF THIS SECURITY IS HELD AS COLLATERAL AT DECEMBER 31, 2004. See Notes to Financial Statements. THE RYDEX VARIABLE TRUST ANNUAL REPORT | 89 SCHEDULE OF INVESTMENTS December 31, 2004 - -------------------------------------------------------------------------------- SMALL-CAP VALUE FUND - -------------------------------------------------------------------------------- MARKET VALUE SHARES (NOTE 1) - ------------------------------------------------------------------------------ COMMON STOCKS 99.4% INDUSTRIALS 21.9% COMMERCIAL SERVICES & SUPPLIES 5.7% Waste Connections, Inc.* 8,521 $ 291,844 United Stationers, Inc.* 5,873 271,333 Ionics, Inc.*+ 4,044 175,267 ABM Industries, Inc. 8,624 170,065 Tetra Tech, Inc.* 9,990 167,233 G & K Services, Inc. -- Class A 3,726 161,783 School Specialty, Inc.* 4,037 155,667 NCO Group, Inc.* 5,691 147,112 Viad Corp. 3,938 112,194 Consolidated Graphics, Inc.* 2,424 111,262 Bowne & Co., Inc. 6,365 103,495 Central Parking Corp. 6,502 98,505 Imagistics International, Inc.* 2,900 97,614 Spherion Corp.* 10,836 91,022 Mobile Mini, Inc.* 2,599 85,871 Volt Information Sciences, Inc.* 2,704 79,470 CDI Corp. 3,496 74,744 Standard Register Co. 5,075 71,659 PRG-Schultz International, Inc.* 10,997 55,315 SOURCECORP, Inc.* 2,798 53,470 Insurance Auto Auctions, Inc.* 2,052 46,006 Angelica Corp. 1,598 43,226 On Assignment, Inc.* 4,490 23,303 --------------- TOTAL COMMERCIAL SERVICES & SUPPLIES 2,687,460 --------------- MACHINERY 5.0% Timken Co. 16,035 417,231 Briggs & Stratton Corp.+ 9,160 380,873 Reliance Steel & Aluminum Co. 5,794 225,734 Mueller Industries, Inc. 6,461 208,044 Albany International Corp. -- Class A 5,635 198,127 Watts Industries, Inc. -- Class A. 5,747 185,283 Gardner Denver, Inc.* 3,528 128,031 Thomas Industries, Inc. 3,138 125,269 Barnes Group, Inc. 4,120 109,221 Valmont Industries, Inc. 4,246 106,617 Stewart & Stevenson Services, Inc. 5,107 103,315 Robbins & Myers, Inc. 2,581 61,505 Astec Industries, Inc.* 3,549 61,078 Lydall, Inc.* 3,311 39,268 Wolverine Tube, Inc.* 2,650 34,212 --------------- TOTAL MACHINERY 2,383,808 --------------- AEROSPACE & DEFENSE 2.4% Curtiss-Wright Corp. 3,805 218,445 Moog, Inc. -- Class A* 4,561 206,841 DRS Technologies, Inc.* 4,837 206,588 MARKET VALUE SHARES (NOTE 1) - ------------------------------------------------------------------------------ Esterline Technologies Corp.* 4,361 $ 142,387 Cubic Corp. 4,750 119,558 Triumph Group, Inc.* 2,824 111,548 AAR Corp.* 5,731 78,056 Kaman Corp. -- Class A 4,037 51,068 --------------- TOTAL AEROSPACE & DEFENSE 1,134,491 --------------- ROAD & RAIL 2.3% Yellow Roadway Corp.*+ 8,634 481,000 Arkansas Best Corp. 4,464 200,389 Kansas City Southern* 11,145 197,601 USF Corp. 4,967 188,498 --------------- TOTAL ROAD & RAIL 1,067,488 --------------- TRADING COMPANIES & DISTRIBUTORS 1.5% Hughes Supply, Inc.+ 11,736 379,660 Watsco, Inc. 4,744 167,084 Applied Industrial Technologies, Inc. 5,261 144,151 --------------- TOTAL TRADING COMPANIES & DISTRIBUTORS 690,895 --------------- CONSTRUCTION & ENGINEERING 1.4% URS Corp.* 7,726 248,005 Shaw Group, Inc.* 11,384 203,204 EMCOR Group, Inc.* 2,690 121,534 Insituform Technologies, Inc. -- Class A* 4,751 107,705 --------------- TOTAL CONSTRUCTION & ENGINEERING 680,448 --------------- ELECTRICAL EQUIPMENT 1.3% A.O. Smith Corp. 5,237 156,796 Woodward Governor Co. 2,006 143,650 Regal-Beloit Corp.+ 4,347 124,324 Vicor Corp. 7,480 98,063 C&D Technologies, Inc. 4,505 76,765 MagneTek, Inc.* 5,074 35,010 --------------- TOTAL ELECTRICAL EQUIPMENT 634,608 --------------- BUILDING PRODUCTS 1.2% Lennox International, Inc. 10,701 217,765 Griffon Corp.* 5,210 140,670 Universal Forest Products, Inc. 3,177 137,882 Apogee Enterprises, Inc. 4,849 65,025 --------------- TOTAL BUILDING PRODUCTS 561,342 --------------- AIRLINES 0.7% SkyWest, Inc. 10,205 204,712 Frontier Airlines, Inc.* 6,327 72,191 Mesa Air Group, Inc.*+ 5,610 44,544 --------------- TOTAL AIRLINES 321,447 --------------- INDUSTRIAL CONGLOMERATES 0.4% Tredegar Corp. 6,856 138,560 Standex International Corp. 2,194 62,507 --------------- TOTAL INDUSTRIAL CONGLOMERATES 201,067 --------------- TOTAL INDUSTRIALS 10,363,054 --------------- See Notes to Financial Statements. 90 | THE RYDEX VARIABLE TRUST ANNUAL REPORT SCHEDULE OF INVESTMENTS (CONTINUED) December 31, 2004 - -------------------------------------------------------------------------------- SMALL-CAP VALUE FUND - -------------------------------------------------------------------------------- MARKET VALUE SHARES (NOTE 1) - ------------------------------------------------------------------------------ FINANCIALS 20.0% BANKS 5.4% South Financial Group, Inc. 12,630 $ 410,854 Whitney Holding Corp. 7,463 335,760 Chittenden Corp. 8,223 236,247 Provident Bankshares Corp. 5,886 214,074 Susquehanna Bancshares, Inc. 8,263 206,162 Umpqua Holding Corp. 7,931 199,941 First Republic Bank 2,910 154,230 Community Bank System, Inc. 5,442 153,736 Irwin Financial Corp. 5,038 143,029 Boston Private Financial Holdings, Inc.+ 4,900 138,033 Riggs National Corp. 5,617 119,417 Sterling Bancshares, Inc./TX 7,980 113,875 Gold Banc Corp., Inc. 7,140 104,387 --------------- TOTAL BANKS 2,529,745 --------------- THRIFTS & MORTGAGE FINANCE 5.1% Fremont General Corp. 13,700 344,966 Downey Financial Corp. 4,946 281,922 MAF Bancorp, Inc. 5,960 267,127 Flagstar Bancorp, Inc. 10,898 246,295 Commercial Federal Corp. 6,993 207,762 Brookline Bancorp, Inc. 10,511 171,540 Bankunited Financial Corp. -- Class A* 5,334 170,421 Waypoint Financial Corp. 5,951 168,711 Sterling Financial Corp./WA* 4,050 159,003 FirstFed Financial Corp.* 2,924 151,668 Anchor BanCorp Wisconsin, Inc. 4,076 118,815 Dime Community Bancshares 6,620 118,564 --------------- TOTAL THRIFTS & MORTGAGE FINANCE 2,406,794 --------------- REAL ESTATE 4.4% Shurgard Storage Centers, Inc. -- Class A 8,261 363,567 Capital Automotive REIT 7,644 271,553 Entertainment Properties Trust 4,513 201,054 Lexington Corporate Properties Trust 8,616 194,549 Colonial Properties Trust 4,867 191,127 Commercial Net Lease Realty 9,231 190,159 Gables Residential Trust 5,205 186,287 CRT Properties, Inc. 5,550 132,423 Glenborough Realty Trust, Inc. 5,680 120,870 Parkway Properties, Inc./MD 2,350 119,262 Sovran Self Storage, Inc. 2,805 118,203 --------------- TOTAL REAL ESTATE 2,089,054 --------------- MARKET VALUE SHARES (NOTE 1) - ------------------------------------------------------------------------------ INSURANCE 3.6% UICI 8,122 $ 275,336 Delphi Financial Group, Inc. -- Class A 5,626 259,640 Selective Insurance Group, Inc. 4,933 218,236 ProAssurance Corp.* 5,185 202,785 RLI Corp. 4,489 186,608 Zenith National Insurance Corp. 3,424 170,652 LandAmerica Financial Group, Inc. 3,161 170,473 Stewart Information Services Corp. 3,219 134,071 Presidential Life Corp. 5,219 88,514 SCPIE Holdings Inc.* 1,765 17,474 --------------- TOTAL INSURANCE 1,723,789 --------------- CAPITAL MARKETS 0.8% Piper Jaffray Cos., Inc.* 3,532 169,359 Investment Technology Group, Inc.* 7,450 149,000 SWS Group, Inc. 3,065 67,185 --------------- TOTAL CAPITAL MARKETS 385,544 --------------- CONSUMER FINANCE 0.4% Cash America International, Inc. 5,087 151,237 Rewards Network, Inc.* 4,400 30,800 --------------- TOTAL CONSUMER FINANCE 182,037 --------------- DIVERSIFIED FINANCIALS 0.3% Financial Federal Corp.* 3,081 120,775 --------------- TOTAL DIVERSIFIED FINANCIALS 120,775 --------------- TOTAL FINANCIALS 9,437,738 --------------- CONSUMER DISCRETIONARY 14.6% SPECIALTY RETAIL 5.1% Zale Corp.*+ 9,210 275,103 Men's Wearhouse, Inc.*+ 6,360 203,266 GameStop Corp. -- Class B* 9,010 201,914 Linens `N Things, Inc.*+ 8,026 199,045 Sonic Automotive, Inc. 7,350 182,280 Burlington Coat Factory Warehouse Corp. 7,933 180,079 PEP Boys-Manny Moe & Jack 10,160 173,431 Stage Stores, Inc.* 3,160 131,203 Group 1 Automotive, Inc.* 4,108 129,402 Jo-Ann Stores, Inc.* 4,021 110,738 TBC Corp.* 3,960 110,088 Movie Gallery, Inc.+ 5,525 105,362 Building Material Holding Corp. 2,442 93,504 Dress Barn, Inc.* 5,299 93,262 Haverty Furniture Cos., Inc. 4,020 74,370 Gymboree Corp.* 5,460 69,997 Goody's Family Clothing, Inc. 5,825 53,241 See Notes to Financial Statements. THE RYDEX VARIABLE TRUST ANNUAL REPORT | 91 SCHEDULE OF INVESTMENTS (CONTINUED) December 31, 2004 - -------------------------------------------------------------------------------- SMALL-CAP VALUE FUND - -------------------------------------------------------------------------------- MARKET VALUE SHARES (NOTE 1) - ------------------------------------------------------------------------------ Hancock Fabrics, Inc./DE 3,363 $ 34,874 --------------- TOTAL SPECIALTY RETAIL 2,421,159 --------------- HOUSEHOLD DURABLES 3.0% M.D.C. Holdings, Inc. 5,720 494,437 Standard-Pacific Corp. 5,937 380,799 La-Z-Boy, Inc. 9,251 142,188 Russ Berrie & Co., Inc. 3,704 84,599 Skyline Corp. 1,490 60,792 National Presto Industries, Inc. 1,214 55,237 Libbey, Inc. 2,450 54,414 Bassett Furniture Industries, Inc. 2,073 40,683 Department 56, Inc.* 2,399 39,943 Applica, Inc.* 4,274 25,858 Enesco Group, Inc.* 2,555 20,644 Fedders Corp. 5,380 19,476 --------------- TOTAL HOUSEHOLD DURABLES 1,419,070 --------------- HOTELS RESTAURANTS & LEISURE 2.8% Jack in the Box, Inc.*+ 6,541 241,167 Aztar Corp.* 6,160 215,107 Pinnacle Entertainment, Inc.* 7,069 139,825 Landry's Restaurants, Inc. 4,709 136,844 Marcus Corp. 5,354 134,600 Ryan's Restaurant Group, Inc.* 7,415 114,339 Lone Star Steakhouse & Saloon, Inc. 3,627 101,556 Steak N Shake Co.* 4,910 98,593 Multimedia Games, Inc.* 4,990 78,642 O'Charleys, Inc.* 3,797 74,231 --------------- TOTAL HOTELS RESTAURANTS & LEISURE 1,334,904 --------------- TEXTILES & APPAREL 1.1% Kellwood Co.+ 4,916 169,602 Russell Corp. 5,802 113,023 Brown Shoe Co., Inc. 3,231 96,381 Stride Rite Corp. 6,535 72,996 Haggar Corp. 1,279 30,030 Ashworth, Inc.* 2,388 26,005 --------------- TOTAL TEXTILES & APPAREL 508,037 --------------- LEISURE EQUIPMENT & PRODUCTS 0.7% K2, Inc.* 8,296 131,741 Jakks Pacific, Inc.*+ 4,658 102,988 Sturm Ruger & Co., Inc. 4,780 43,163 Action Performance Cos., Inc.+ 3,258 35,806 Meade Instruments Corp.* 3,552 12,183 --------------- TOTAL LEISURE EQUIPMENT & PRODUCTS 325,881 --------------- INTERNET & CATALOG RETAIL 0.5% Insight Enterprises, Inc.* 8,657 177,642 J. Jill Group, Inc.* 3,570 53,157 --------------- TOTAL INTERNET & CATALOG RETAIL 230,799 --------------- MARKET VALUE SHARES (NOTE 1) - ------------------------------------------------------------------------------ MULTILINE RETAIL 0.5% Fred's, Inc. 6,980 $ 121,452 ShopKo Stores, Inc.* 5,236 97,809 --------------- TOTAL MULTILINE RETAIL 219,261 --------------- AUTO COMPONENTS 0.4% Superior Industries International, Inc.+ 4,350 126,368 Standard Motor Products, Inc. 3,519 55,600 --------------- TOTAL AUTO COMPONENTS 181,968 --------------- AUTOMOBILES 0.3% Monaco Coach Corp. 5,230 107,581 Coachmen Industries, Inc. 2,789 48,417 --------------- TOTAL AUTOMOBILES 155,998 --------------- MEDIA 0.1% 4Kids Entertainment, Inc.* 2,370 49,817 --------------- TOTAL MEDIA 49,817 --------------- DISTRIBUTORS 0.1% Advanced Marketing Services, Inc. 3,388 34,083 --------------- TOTAL DISTRIBUTORS 34,083 --------------- TOTAL CONSUMER DISCRETIONARY 6,880,977 --------------- INFORMATION TECHNOLOGY 13.8% ELECTRONIC EQUIPMENT & INSTRUMENTS 4.5% Benchmark Electronics, Inc.* 7,338 250,226 Anixter International, Inc.*+ 6,624 238,398 Coherent, Inc.* 5,387 163,980 Aeroflex, Inc.* 13,230 160,347 Paxar Corp.* 7,042 156,121 Technitrol, Inc.* 7,181 130,694 Checkpoint Systems, Inc.*+ 6,683 120,628 Veeco Instruments, Inc.* 5,280 111,250 Electro Scientific Industries, Inc.* 5,046 99,709 Agilsys, Inc. 5,736 98,315 Itron, Inc.* 3,760 89,902 CTS Corp. 6,378 84,764 Methode Electronics, Inc. -- Class A 6,365 81,790 Park Electrochemical Corp. 3,540 76,747 Photon Dynamics, Inc.* 2,990 72,597 Radisys Corp.* 3,402 66,509 Bell Microproducts, Inc.* 5,043 48,514 Gerber Scientific, Inc.* 3,960 30,136 Planar Systems, Inc.* 2,598 29,175 --------------- TOTAL ELECTRONIC EQUIPMENT & INSTRUMENTS 2,109,802 --------------- SEMICONDUCTOR & SEMICONDUCTOR EQUIPMENT 4.3% Skyworks Solutions, Inc.* 27,640 260,645 Varian Semiconductor Equipment Associates, Inc.* 6,470 238,420 Cymer, Inc.* 6,560 193,783 See Notes to Financial Statements. 92 | THE RYDEX VARIABLE TRUST ANNUAL REPORT SCHEDULE OF INVESTMENTS (CONTINUED) December 31, 2004 - -------------------------------------------------------------------------------- SMALL-CAP VALUE FUND - -------------------------------------------------------------------------------- MARKET VALUE SHARES (NOTE 1) - ------------------------------------------------------------------------------ Axcelis Technologies, Inc.* 17,760 $ 144,389 Brooks Automation, Inc.* 7,920 136,382 FEI Co.*+ 5,910 124,110 DSP Group, Inc.* 4,980 111,203 Exar Corp.* 7,398 104,978 Photronics, Inc.*+ 5,799 95,684 Dupont Photomasks, Inc.* 3,292 86,942 Ultratech, Inc.* 4,230 79,736 Actel Corp.* 4,500 78,930 Cohu, Inc. 3,825 70,992 Standard Microsystems Corp.* 3,280 58,482 Advanced Energy Industries, Inc.* 5,810 53,045 Rudolph Technologies, Inc.*+ 2,990 51,338 ESS Technologies, Inc.* 7,030 49,983 Kopin Corp.* 12,440 48,143 Pericom Semiconductor Corp.* 4,712 44,434 Alliance Semiconductor Corp.* 6,306 23,332 --------------- TOTAL SEMICONDUCTOR & SEMICONDUCTOR EQUIPMENT 2,054,951 --------------- COMMUNICATIONS EQUIPMENT 1.6% Belden CDT, Inc. 8,327 193,186 Black Box Corp. 3,069 147,373 Symmetricom, Inc.* 8,049 78,156 C-COR, Inc.* 7,660 71,238 Bel Fuse, Inc. -- Class B 1,980 66,904 Audiovox Corp. -- Class A* 4,093 64,588 Network Equipment Technologies, Inc.* 4,349 42,707 PC-Tel, Inc.* 3,683 29,206 Tollgrade Communications, Inc.* 2,336 28,593 Brooktrout, Inc.* 2,260 27,143 --------------- TOTAL COMMUNICATIONS EQUIPMENT 749,094 --------------- SOFTWARE 1.4% THQ, Inc.* 6,907 158,447 Verity, Inc.* 6,636 87,064 JDA Software Group, Inc.* 5,173 70,456 MRO Software, Inc.* 4,440 57,809 SPSS, Inc.* 3,120 48,797 EPIQ Systems, Inc.* 3,180 46,555 MapInfo Corp.* 3,620 43,368 Concord Communications, Inc.* 3,250 36,010 Phoenix Technologies, Ltd.* 4,355 35,972 NYFIX, Inc.* 5,760 35,654 Radiant Systems, Inc.* 4,700 30,597 Captaris, Inc.* 5,395 27,838 --------------- TOTAL SOFTWARE 678,567 --------------- MARKET VALUE SHARES (NOTE 1) - ------------------------------------------------------------------------------ COMPUTERS & PERIPHERALS 0.9% Hutchinson Technology, Inc.* 4,633 $ 160,163 Adaptec, Inc.* 19,755 149,940 Pinnacle Systems, Inc.* 12,317 75,134 SBS Technologies, Inc.* 2,760 38,530 --------------- TOTAL COMPUTERS & PERIPHERALS 423,767 --------------- IT CONSULTING & SERVICES 0.7% MAXIMUS, Inc.* 3,850 119,812 Ciber, Inc.* 11,094 106,946 Pegasus Solutions, Inc.* 3,868 48,737 Intrado, Inc.* 3,090 37,389 --------------- TOTAL IT CONSULTING & SERVICES 312,884 --------------- INTERNET SOFTWARE & SERVICES 0.4% Digital Insight Corp.* 6,344 116,730 FindWhat.com*+ 5,380 95,387 --------------- TOTAL INTERNET SOFTWARE & SERVICES 212,117 --------------- TOTAL INFORMATION TECHNOLOGY 6,541,182 --------------- HEALTH CARE 7.8% HEALTH CARE PROVIDERS & SERVICES 4.6% Pediatrix Medical Group, Inc.* 3,970 254,278 Accredo Health, Inc.* 8,690 240,887 United Surgical Partners International, Inc.* 5,060 211,002 Province Healthcare Co.*+ 8,843 197,641 Owens & Minor, Inc. 7,010 197,472 Priority Healthcare Corp. -- Class B* 7,740 168,500 Sunrise Senior Living, Inc.* 3,617 167,684 Chemed Corp. 2,218 148,850 NDCHealth Corp. 6,390 118,790 Cross Country Healthcare, Inc.* 5,692 102,911 Parexel International Corp.* 4,623 93,847 RehabCare Group, Inc.* 2,919 81,703 Gentiva Health Services, Inc.* 4,269 71,378 Hooper Holmes, Inc. 11,550 68,376 OCA, Inc.*+ 8,906 56,553 Curative Health Services, Inc.* 2,294 15,714 --------------- TOTAL HEALTH CARE PROVIDERS & SERVICES 2,195,586 --------------- HEALTH CARE EQUIPMENT & SUPPLIES 2.6% Invacare Corp. 5,548 256,650 Sola International, Inc.* 5,726 157,694 Conmed Corp.* 5,304 150,740 Analogic Corp. 2,425 108,616 Viasys Healthcare, Inc.* 5,514 104,766 Datascope Corp. 2,626 104,226 Vital Signs, Inc. 2,255 87,765 See Notes to Financial Statements. THE RYDEX VARIABLE TRUST ANNUAL REPORT | 93 SCHEDULE OF INVESTMENTS (CONTINUED) December 31, 2004 - -------------------------------------------------------------------------------- SMALL-CAP VALUE FUND - -------------------------------------------------------------------------------- MARKET VALUE SHARES (NOTE 1) - ------------------------------------------------------------------------------ Wilson Greatbatch Technologies, Inc.* 3,800 $ 85,196 DJ Orthopedics, Inc.* 3,810 81,610 ICU Medical, Inc.*+ 2,410 65,889 Theragenics Corp* 5,329 21,636 Osteotech, Inc.* 3,055 16,802 --------------- TOTAL HEALTH CARE EQUIPMENT & SUPPLIES 1,241,590 --------------- PHARMACEUTICALS 0.5% Alpharma, Inc. -- Class A 9,366 158,754 Bradley Pharmaceuticals, Inc.* 2,810 54,514 --------------- TOTAL PHARMACEUTICALS 213,268 --------------- BIOTECHNOLOGY 0.1% Arqule, Inc.* 5,138 29,749 Savient Pharmaceuticals, Inc.* 10,743 29,114 --------------- TOTAL BIOTECHNOLOGY 58,863 --------------- TOTAL HEALTH CARE 3,709,307 --------------- MATERIALS 7.2% METALS & MINING 2.7% Commercial Metals Co. 5,222 264,024 Carpenter Technology Corp. 4,253 248,630 Quanex Corp.+ 2,938 201,459 Century Aluminum Co.* 5,690 149,420 Aleris International, Inc.* 5,126 86,732 RTI International Metals, Inc.* 3,848 79,038 Ryerson Tull, Inc. 4,444 69,993 Brush Engineered Materials, Inc.* 3,408 63,048 Steel Technologies, Inc. 2,273 62,530 A.M. Castle & Co.* 2,803 33,468 --------------- TOTAL METALS & MINING 1,258,342 --------------- CHEMICALS 2.1% OM Group, Inc.* 5,043 163,494 PolyOne Corp.* 16,280 147,497 H.B. Fuller Co. 5,084 144,945 Cambrex Corp. 4,640 125,744 Arch Chemicals, Inc. 4,165 119,869 A. Schulman, Inc. 5,430 116,256 Wellman, Inc. 5,692 60,847 Material Sciences Corp.* 2,557 46,000 Quaker Chemical Corp. 1,720 42,725 Penford Corp. 1,564 24,602 --------------- TOTAL CHEMICALS 991,979 --------------- CONTAINERS & PACKAGING 1.4% AptarGroup, Inc. 6,355 335,417 Rock-Tenn Co. -- Class A 6,331 95,978 Chesapeake Corp. 3,466 94,137 Caraustar Industries, Inc.* 5,059 85,092 Myers Industries, Inc. 6,123 78,374 --------------- TOTAL CONTAINERS & PACKAGING 688,998 --------------- MARKET VALUE SHARES (NOTE 1) - ------------------------------------------------------------------------------ CONSTRUCTION MATERIALS 0.5% Texas Industries, Inc.+ 3,852 $ 240,288 --------------- TOTAL CONSTRUCTION MATERIALS 240,288 --------------- PAPER & FOREST PRODUCTS 0.5% Schweitzer-Mauduit International, Inc. 2,636 89,492 Buckeye Technologies, Inc.* 6,637 86,347 Pope & Talbot, Inc. 2,891 49,465 --------------- TOTAL PAPER & FOREST PRODUCTS 225,304 --------------- TOTAL MATERIALS 3,404,911 --------------- UTILITIES 6.7% GAS UTILITIES 4.0% Atmos Energy Corp. 13,598 371,905 UGI Corp. 9,052 370,317 Southern Union Co.*+ 14,630 350,835 Piedmont Natural Gas Co.+ 13,622 316,575 Northwest Natural Gas Co. 4,875 164,483 Southwest Gas Corp. 6,408 162,763 Laclede Group, Inc. 3,736 116,377 Cascade Natural Gas Corp. 1,996 42,315 --------------- TOTAL GAS UTILITIES 1,895,570 --------------- ELECTRIC UTILITIES 2.2% Allete, Inc. 5,248 192,864 Cleco Corp.+ 8,688 176,019 El Paso Electric Co.* 8,423 159,532 Unisource Energy Corp. 6,092 146,878 CH Energy Group, Inc. 2,803 134,684 UIL Holding Corp. 2,591 132,918 Central Vermont Public Service Corp. 2,159 50,218 Green Mountain Power Corp. 913 26,322 --------------- TOTAL ELECTRIC UTILITIES 1,019,435 --------------- MULTI-UTILITIES 0.3% Avista Corp. 8,606 152,068 --------------- TOTAL MULTI-UTILITIES 152,068 --------------- WATER UTILITIES 0.2% American States Water Co. 2,966 77,116 --------------- TOTAL WATER UTILITIES 77,116 --------------- TOTAL UTILITIES 3,144,189 --------------- ENERGY 3.6% ENERGY EQUIPMENT & SERVICES 2.4% Maverick Tube Corp.* 7,580 229,674 SEACOR Holdings, Inc.* 3,252 173,657 Oceaneering International, Inc.* 4,555 169,992 Offshore Logistics, Inc.* 4,136 134,296 Veritas DGC, Inc.*+ 5,941 133,138 Input/Output, Inc.*+ 13,770 121,727 W-H Energy Services, Inc.* 4,925 110,123 Dril-Quip, Inc.* 3,078 74,672 --------------- TOTAL ENERGY EQUIPMENT & SERVICES 1,147,279 --------------- See Notes to Financial Statements. 94 | THE RYDEX VARIABLE TRUST ANNUAL REPORT SCHEDULE OF INVESTMENTS (CONCLUDED) December 31, 2004 - -------------------------------------------------------------------------------- SMALL-CAP VALUE FUND - -------------------------------------------------------------------------------- MARKET VALUE SHARES (NOTE 1) - ------------------------------------------------------------------------------ OIL & GAS 1.2% Stone Energy Corp.* 4,740 $ 213,727 Spinnaker Exploration Co.* 6,025 211,297 Swift Energy Co.* 4,978 144,063 --------------- TOTAL OIL & GAS 569,087 --------------- TOTAL ENERGY 1,716,366 --------------- CONSUMER STAPLES 3.5% FOOD PRODUCTS 1.9% Corn Products International, Inc. 6,452 345,569 Flowers Foods, Inc. 7,679 242,503 Hain Celestial Group, Inc.* 6,481 133,963 J&J Snack Foods Corp. 1,605 78,693 American Italian Pasta Co. -- Class A+ 3,209 74,609 --------------- TOTAL FOOD PRODUCTS 875,337 --------------- FOOD & DRUG RETAILING 1.5% Performance Food Group Co.* 8,314 223,730 Longs Drug Stores Corp. 6,695 184,581 Casey's General Stores, Inc. 8,892 161,390 Nash Finch Co. 2,222 83,902 Great Atlantic & Pacific Tea Co.* 6,852 70,233 --------------- TOTAL FOOD & DRUG RETAILING 723,836 --------------- TOBACCO 0.1% DIMON, Inc. 8,021 53,901 --------------- TOTAL TOBACCO 53,901 --------------- TOTAL CONSUMER STAPLES 1,653,074 --------------- TELECOMMUNICATION SERVICES 0.3% DIVERSIFIED TELECOMMUNICATION SERVICES 0.2% General Communication -- Class A* 10,319 113,922 --------------- TOTAL DIVERSIFIED TELECOMMUNICATION SERVICES 113,922 --------------- WIRELESS TELECOMMUNICATION SERVICES 0.1% Boston Communications Group, Inc.* 3,119 28,819 --------------- TOTAL WIRELESS TELECOMMUNICATION SERVICES 28,819 --------------- TOTAL TELECOMMUNICATION SERVICES 142,741 --------------- TOTAL COMMON STOCKS (Cost $42,674,665) 46,993,539 --------------- MARKET FACE VALUE AMOUNT (NOTE 1) - ------------------------------------------------------------------------------ REPURCHASE AGREEMENT 0.6% Repurchase Agreement (Note 5) 1.55% due 01/03/05 $ 253,522 $ 253,522 --------------- TOTAL REPURCHASE AGREEMENT (Cost $253,522) 253,522 --------------- SECURITIES LENDING COLLATERAL 3.3% Investment in Securities Lending Short Term Investment Portfolio Held by U.S. Bank (Note 8) 1,563,541 1,563,541 --------------- TOTAL SECURITIES LENDING COLLATERAL (Cost $1,563,541) 1,563,541 --------------- TOTAL INVESTMENTS 103.3% (Cost $44,491,728) $ 48,810,602 =============== LIABILITIES IN EXCESS OF OTHER ASSETS - (3.3)% $ (1,537,086) =============== NET ASSETS - 100.0% $ 47,273,516 * NON-INCOME PRODUCING SECURITIES. + ALL OR A PORTION OF THIS SECURITY IS ON LOAN AT DECEMBER 31, 2004 - SEE NOTE 8. REIT - REAL ESTATE INVESTMENT TRUST. See Notes to Financial Statements. THE RYDEX VARIABLE TRUST ANNUAL REPORT | 95 SCHEDULE OF INVESTMENTS December 31, 2004 - -------------------------------------------------------------------------------- MID-CAP VALUE FUND - -------------------------------------------------------------------------------- MARKET VALUE SHARES (NOTE 1) - ------------------------------------------------------------------------------ COMMON STOCKS 99.5% FINANCIALS 24.3% INSURANCE 8.0% Fidelity National Financial, Inc. 6,235 $ 284,752 Everest Re Group Ltd. 2,008 179,837 Old Republic International Corp. 6,516 164,855 W.R. Berkley Corp. 3,013 142,123 First American Corp. 3,207 112,694 Unitrin, Inc. 2,452 111,443 Protective Life Corp. 2,482 105,957 Stancorp Financial Group, Inc. 1,020 84,150 American Financial Group, Inc./OH 2,636 82,533 HCC Insurance Holdings, Inc.+ 2,421 80,184 AmerUs Group Co. 1,400 63,420 Allmerica Financial Corp.* 1,905 62,541 Ohio Casualty Corp.* 2,215 51,410 Horace Mann Educators Corp. 1,528 29,154 --------------- TOTAL INSURANCE 1,555,053 --------------- THRIFTS & MORTGAGE FINANCE 5.1% New York Community Bancorp, Inc.+ 9,480 195,004 Radian Group, Inc. 3,284 174,840 PMI Group, Inc.+ 3,411 142,409 Independence Community Bank Corp.+ 3,025 128,805 Astoria Financial Corp. 2,665 106,520 Webster Financial Corp. 1,896 96,013 IndyMac Bancorp, Inc.+ 2,212 76,203 Washington Federal, Inc. 2,818 74,790 --------------- TOTAL THRIFTS & MORTGAGE FINANCE 994,584 --------------- BANKS 4.6% Banknorth Group, Inc. 6,293 230,324 Hibernia Corp. -- Class A 5,541 163,515 Mercantile Bankshares Corp. 2,832 147,831 City National Corp.+ 1,760 124,344 Colonial BancGroup, Inc. 4,778 101,437 FirstMerit Corp.+ 3,011 85,783 Greater Bay Bancorp+ 1,822 50,797 --------------- TOTAL BANKS 904,031 --------------- REAL ESTATE 3.2% Liberty Property Trust 3,059 132,149 AMB Property Corp.+ 2,962 119,635 Hospitality Properties Trust 2,403 110,538 Mack-Cali Realty Corp. 2,178 100,253 New Plan Excel Realty Trust 3,670 99,384 Highwoods Properties, Inc. 1,921 53,212 --------------- TOTAL REAL ESTATE 615,171 --------------- MARKET VALUE SHARES (NOTE 1) - ------------------------------------------------------------------------------ CAPITAL MARKETS 1.5% A.G. Edwards, Inc. 2,730 $ 117,963 Jefferies Group, Inc. 2,046 82,413 Raymond James Financial, Inc. 2,637 81,694 LaBranche & Co., Inc.* 2,152 19,282 --------------- TOTAL CAPITAL MARKETS 301,352 --------------- DIVERSIFIED FINANCIALS 1.2% Leucadia National Corp. 2,564 178,147 GATX Corp. 1,772 52,380 --------------- TOTAL DIVERSIFIED FINANCIALS 230,527 --------------- CONSUMER FINANCE 0.7% AmeriCredit Corp.* 5,551 135,722 --------------- TOTAL CONSUMER FINANCE 135,722 --------------- TOTAL FINANCIALS 4,736,440 --------------- CONSUMER DISCRETIONARY 16.9% HOUSEHOLD DURABLES 7.0% D.R. Horton, Inc.+ 8,342 336,266 Lennar Corp.. -- Class A+ 5,588 316,728 Mohawk Industries, Inc.*+ 2,380 217,175 Toll Brothers, Inc.*+ 2,673 183,394 Hovnanian Enterprises, Inc. -- Class A* 2,183 108,102 Ryland Group, Inc. 1,700 97,818 American Greetings Corp. -- Class A 2,451 62,133 Furniture Brands International, Inc. 1,899 47,570 --------------- TOTAL HOUSEHOLD DURABLES 1,369,186 --------------- SPECIALTY RETAIL 2.7% Foot Locker, Inc. 5,570 150,000 Barnes & Noble, Inc.* 2,509 80,966 Rent-A-Center, Inc.* 2,710 71,815 Borders Group, Inc. 2,681 68,097 Pier 1 Imports, Inc. 3,067 60,420 AnnTaylor Stores Corp.* 2,522 54,299 Payless Shoesource, Inc.* 2,441 30,024 --------------- TOTAL SPECIALTY RETAIL 515,621 --------------- MEDIA 2.0% Belo Corp. -- Class A 4,113 107,925 Lee Enterprises, Inc. 1,620 74,650 Entercom Communications Corp.* 1,781 63,920 Media General, Inc. 840 54,440 Scholastic Corp.* 1,421 52,520 Emmis Communications Corp. -- Class A* 2,010 38,572 --------------- TOTAL MEDIA 392,027 --------------- AUTO COMPONENTS 2.0% Lear Corp. 2,408 146,912 BorgWarner, Inc.+ 2,006 108,665 See Notes to Financial Statements. 96 | THE RYDEX VARIABLE TRUST ANNUAL REPORT SCHEDULE OF INVESTMENTS (CONTINUED) December 31, 2004 - -------------------------------------------------------------------------------- MID-CAP VALUE FUND - -------------------------------------------------------------------------------- MARKET VALUE SHARES (NOTE 1) - ------------------------------------------------------------------------------ ArvinMeritor, Inc. 2,482 $ 55,523 Modine Manufacturing Co. 1,239 41,841 Bandag, Inc. 688 34,269 --------------- TOTAL AUTO COMPONENTS 387,210 --------------- HOTELS, RESTAURANTS & LEISURE 1.8% Caesars Entertainment, Inc.* 11,191 225,387 CBRL Group, Inc. 1,718 71,898 Bob Evans Farms, Inc. 1,266 33,093 Krispy Kreme Doughnuts, Inc.*+ 2,210 27,846 --------------- TOTAL HOTELS, RESTAURANTS & LEISURE 358,224 --------------- MULTILINE RETAIL 1.2% Neiman-Marcus Group, Inc. -- Class A+ 1,742 124,623 Saks, Inc.*+ 4,987 72,361 99 Cents Only Stores* 2,490 40,238 --------------- TOTAL MULTILINE RETAIL 237,222 --------------- LEISURE EQUIPMENT & PRODUCTS 0.2% Callaway Golf Co. 2,731 36,869 --------------- TOTAL LEISURE EQUIPMENT & PRODUCTS 36,869 --------------- TOTAL CONSUMER DISCRETIONARY 3,296,359 --------------- INFORMATION TECHNOLOGY 13.2% SOFTWARE 3.0% Cadence Design Systems, Inc.*+ 9,661 133,418 Synopsys, Inc.* 5,440 106,733 Activision, Inc.* 4,980 100,496 Fair Isaac Corp. 2,510 92,067 Sybase, Inc.* 3,403 67,890 Mentor Graphics Corp.* 2,730 41,742 Ascential Software Corp.* 2,098 34,218 --------------- TOTAL SOFTWARE 576,564 --------------- SEMICONDUCTOR & SEMICONDUCTOR EQUIPMENT 2.9% International Rectifier Corp.*+ 2,390 106,522 Intersil Corp. -- Class A 5,379 90,045 Fairchild Semiconductor International, Inc.* 4,269 69,414 Atmel Corp.* 17,070 66,914 Cypress Semiconductor Corp.* 4,500 52,785 RF Micro Devices, Inc.*+ 6,703 45,849 Integrated Device Technology, Inc.* 3,819 44,148 Credence Systems Corp.* 3,408 31,183 Lattice Semiconductor Corp.* 4,059 23,136 Triquint Semiconductor, Inc.* 4,922 21,903 LTX Corp.* 2,190 16,841 --------------- TOTAL SEMICONDUCTOR & SEMICONDUCTOR EQUIPMENT 568,740 --------------- MARKET VALUE SHARES (NOTE 1) - ------------------------------------------------------------------------------ ELECTRONIC EQUIPMENT & INSTRUMENTS 2.2% Arrow Electronics, Inc.* 4,147 $ 100,772 Tech Data Corp.*+ 2,077 94,296 Vishay Intertechnology, Inc.* 5,936 89,159 Avnet, Inc.*+ 4,310 78,614 KEMET Corp.* 3,095 27,700 Newport Corp.* 1,539 21,700 Plexus Corp.* 1,541 20,049 --------------- TOTAL ELECTRONIC EQUIPMENT & INSTRUMENTS 432,290 --------------- IT CONSULTING & SERVICES 1.9% CheckFree Corp.*+ 3,100 118,048 Ceridian Corp.* 5,310 97,067 BISYS Group, Inc.*+ 4,299 70,719 MPS Group, Inc.* 3,666 44,945 Keane, Inc.*+ 2,222 32,663 --------------- TOTAL IT CONSULTING & SERVICES 363,442 --------------- COMPUTERS & PERIPHERALS 1.7% Sandisk Corp.* 5,830 145,575 Storage Technology Corp.*+ 3,812 120,498 Imation Corp. 1,212 38,578 McData Corp. -- Class A* 4,218 25,139 --------------- TOTAL COMPUTERS & PERIPHERALS 329,790 --------------- COMMUNICATIONS EQUIPMENT 1.5% Utstarcom, Inc.* 4,088 90,549 Polycom, Inc.* 3,508 81,806 3Com Corp.* 13,571 56,591 CommScope, Inc.* 1,944 36,742 Powerwave Technologies, Inc.* 3,735 31,673 --------------- TOTAL COMMUNICATIONS EQUIPMENT 297,361 --------------- TOTAL INFORMATION TECHNOLOGY 2,568,187 --------------- UTILITIES 11.0% ELECTRIC UTILITIES 6.4% Pepco Holdings, Inc.+ 6,716 143,185 Wisconsin Energy Corp. 4,181 140,942 Alliant Energy Corp. 4,134 118,232 NSTAR 1,901 103,186 Puget Energy, Inc.+ 3,563 88,006 Northeast Utilities 4,592 86,559 OGE Energy Corp.+ 3,178 84,249 Hawaiian Electric Industries, Inc. 2,883 84,039 Great Plains Energy, Inc.+ 2,659 80,515 Westar Energy, Inc. 3,076 70,348 WPS Resources Corp. 1,341 66,996 PNM Resources, Inc. 2,157 54,551 Duquesne Light Holdings, Inc.+ 2,745 51,743 IDACORP, Inc. 1,491 45,580 Black Hills Corp. 1,161 35,620 --------------- TOTAL ELECTRIC UTILITIES 1,253,751 --------------- See Notes to Financial Statements. THE RYDEX VARIABLE TRUST ANNUAL REPORT | 97 SCHEDULE OF INVESTMENTS (CONTINUED) December 31, 2004 - -------------------------------------------------------------------------------- MID-CAP VALUE FUND - -------------------------------------------------------------------------------- MARKET VALUE SHARES (NOTE 1) - ------------------------------------------------------------------------------ MULTI-UTILITIES 3.9% SCANA Corp. 4,012 $ 158,073 Energy East Corp. 5,255 140,203 MDU Resources Group, Inc. 4,220 112,590 Oneok, Inc. 3,701 105,182 National Fuel Gas Co. 2,948 83,546 Vectren Corp. 2,720 72,896 Sierra Pacific Resources*+ 4,203 44,132 Aquila, Inc.* 8,643 31,893 --------------- TOTAL MULTI-UTILITIES 748,515 --------------- GAS UTILITIES 0.7% AGL Resources, Inc. 2,683 89,183 WGL Holdings, Inc. 1,737 53,569 --------------- TOTAL GAS UTILITIES 142,752 --------------- TOTAL UTILITIES 2,145,018 --------------- INDUSTRIALS 8.6% COMMERCIAL SERVICES & SUPPLIES 3.1% Republic Services, Inc. 5,392 180,848 Manpower, Inc. 3,225 155,767 Laureate Education, Inc.* 1,730 76,276 Adesa, Inc. 3,276 69,517 DeVry, Inc.* 2,520 43,747 Banta Corp. 887 39,702 Kelly Services, Inc. 1,264 38,148 --------------- TOTAL COMMERCIAL SERVICES & SUPPLIES 604,005 --------------- MACHINERY 2.1% SPX Corp.+ 2,687 107,641 AGCO Corp.*+ 3,227 70,639 Kennametal, Inc. 1,356 67,488 Trinity Industries, Inc. 1,696 57,800 Flowserve Corp.* 1,974 54,364 Tecumseh Products Co. -- Class A 654 31,261 Federal Signal Corp. 1,723 30,428 --------------- TOTAL MACHINERY 419,621 --------------- CONSTRUCTION & ENGINEERING 0.9% Jacobs Engineering Group, Inc.* 2,010 96,058 Granite Construction, Inc. 1,489 39,607 Quanta Services, Inc.* 4,192 33,536 --------------- TOTAL CONSTRUCTION & ENGINEERING 169,201 --------------- ROAD & RAIL 0.6% Werner Enterprises, Inc. 2,825 63,958 Swift Transportation Co., Inc.* 2,626 56,407 --------------- TOTAL ROAD & RAIL 120,365 --------------- INDUSTRIAL CONGLOMERATES 0.4% Teleflex, Inc. 1,446 75,105 --------------- TOTAL INDUSTRIAL CONGLOMERATES 75,105 --------------- MARKET VALUE SHARES (NOTE 1) - ------------------------------------------------------------------------------ ELECTRICAL EQUIPMENT 0.3% Thomas & Betts Corp.* 2,111 $ 64,913 --------------- TOTAL ELECTRICAL EQUIPMENT 64,913 --------------- MARINE 0.3% Alexander & Baldwin, Inc. 1,526 64,733 --------------- TOTAL MARINE 64,733 --------------- TRADING COMPANIES & DISTRIBUTORS 0.3% United Rentals, Inc.* 2,786 52,655 --------------- TOTAL TRADING COMPANIES & DISTRIBUTORS 52,655 --------------- BUILDING PRODUCTS 0.3% York International Corp. 1,486 51,327 --------------- TOTAL BUILDING PRODUCTS 51,327 --------------- AIRLINES 0.2% Alaska Air Group, Inc.*+ 953 31,916 --------------- TOTAL AIRLINES 31,916 --------------- AEROSPACE & DEFENSE 0.1% Sequa Corp. -- Class A* 366 22,381 --------------- TOTAL AEROSPACE & DEFENSE 22,381 --------------- TOTAL INDUSTRIALS 1,676,222 --------------- ENERGY 7.1% ENERGY EQUIPMENT & SERVICES 4.2% Weatherford International Ltd.* 4,857 249,164 ENSCO International, Inc.+ 5,406 171,586 Cooper Cameron Corp.*+ 1,966 105,790 Pride International, Inc.*+ 4,877 100,174 Tidewater, Inc.+ 2,173 77,381 Helmerich & Payne, Inc. 1,804 61,408 Hanover Compressor Co.*+ 2,794 39,479 --------------- TOTAL ENERGY EQUIPMENT & SERVICES 804,982 --------------- OIL & GAS 2.9% Pioneer Natural Resources Co. 5,216 183,082 Newfield Exploration Co.* 2,227 131,504 Pogo Producing Co. 2,301 111,576 Overseas Shipholding Group, Inc.+ 1,410 77,832 Forest Oil Corp.*+ 2,120 67,246 --------------- TOTAL OIL & GAS 571,240 --------------- TOTAL ENERGY 1,376,222 --------------- MATERIALS 6.5% CHEMICALS 3.9% Valspar Corp.+ 1,840 92,018 Lubrizol Corp. 2,388 88,022 Scotts Co. -- Class A* 1,180 86,754 Cabot Corp. 2,202 85,173 RPM International, Inc. 4,163 81,845 Cytec Industries, Inc. 1,416 72,811 FMC Corp.* 1,320 63,756 See Notes to Financial Statements. 98 | THE RYDEX VARIABLE TRUST ANNUAL REPORT SCHEDULE OF INVESTMENTS (CONTINUED) December 31, 2004 - -------------------------------------------------------------------------------- MID-CAP VALUE FUND - -------------------------------------------------------------------------------- MARKET VALUE SHARES (NOTE 1) - ------------------------------------------------------------------------------ Albemarle Corp. 1,488 $ 57,600 Minerals Technologies, Inc. 733 48,891 Sensient Technologies Corp. 1,682 40,351 Ferro Corp. 1,496 34,692 --------------- TOTAL CHEMICALS 751,913 --------------- PAPER & FOREST PRODUCTS 0.8% Bowater, Inc.+ 1,987 87,368 Potlatch Corp.+ 1,063 53,767 Glatfelter 1,567 23,944 --------------- TOTAL PAPER & FOREST PRODUCTS 165,079 --------------- CONTAINERS & PACKAGING 0.7% Sonoco Products Co. 3,516 104,249 Longview Fibre Co. 1,826 33,124 --------------- TOTAL CONTAINERS & PACKAGING 137,373 --------------- METALS & MINING 0.6% Steel Dynamics, Inc. 1,610 60,987 Worthington Industries, Inc. 2,840 55,607 --------------- TOTAL METALS & MINING 116,594 --------------- CONSTRUCTION MATERIALS 0.5% Martin Marietta Materials, Inc. 1,714 91,973 --------------- TOTAL CONSTRUCTION MATERIALS 91,973 --------------- TOTAL MATERIALS 1,262,932 --------------- HEALTH CARE 5.7% HEALTH CARE PROVIDERS & SERVICES 3.6% Pacificare Health Systems, Inc.* 3,012 170,238 Omnicare, Inc. 3,730 129,133 Health Net, Inc.* 3,971 114,643 Triad Hospitals, Inc.*+ 2,748 102,253 Universal Health Services, Inc. -- Class B 2,088 92,916 Community Health Systems, Inc.* 3,123 87,069 --------------- TOTAL HEALTH CARE PROVIDERS & SERVICES 696,252 --------------- BIOTECHNOLOGY 1.3% Millennium Pharmaceuticals, Inc.* 10,944 132,641 Invitrogen Corp.*+ 1,831 122,915 --------------- TOTAL BIOTECHNOLOGY 255,556 --------------- HEALTH CARE EQUIPMENT & SUPPLIES 0.6% Steris Corp.* 2,467 58,517 Varian, Inc.* 1,240 50,853 --------------- TOTAL HEALTH CARE EQUIPMENT & SUPPLIES 109,370 --------------- PHARMACEUTICALS 0.2% Perrigo Co. 2,580 44,556 --------------- TOTAL PHARMACEUTICALS 44,556 --------------- TOTAL HEALTH CARE 1,105,734 --------------- MARKET VALUE SHARES (NOTE 1) - ------------------------------------------------------------------------------ CONSUMER STAPLES 5.4% FOOD PRODUCTS 3.2% Tyson Foods, Inc. -- Class A 12,621 $ 232,226 Dean Foods Co.* 5,327 175,525 Smithfield Foods, Inc.* 3,970 117,472 J.M. Smucker Co. 2,086 98,188 --------------- TOTAL FOOD PRODUCTS 623,411 --------------- BEVERAGES 1.5% Constellation Brands, Inc. -- Class A* 3,856 179,343 PepsiAmericas, Inc. 4,950 105,138 --------------- TOTAL BEVERAGES 284,481 --------------- FOOD & DRUG RETAILING 0.5% BJ's Wholesale Club, Inc.* 2,485 72,388 Ruddick Corp. 1,670 36,222 --------------- TOTAL FOOD & DRUG RETAILING 108,610 --------------- TOBACCO 0.2% Universal Corp./Richmond VA 912 43,630 --------------- TOTAL TOBACCO 43,630 --------------- TOTAL CONSUMER STAPLES 1,060,132 --------------- TELECOMMUNICATION SERVICES 0.8% WIRELESS TELECOMMUNICATION SERVICES 0.8% Telephone & Data Systems, Inc.+ 2,049 157,671 --------------- TOTAL WIRELESS TELECOMMUNICATION SERVICES 157,671 --------------- TOTAL TELECOMMUNICATION SERVICES 157,671 --------------- TOTAL COMMON STOCKS (Cost $17,923,694) 19,384,917 --------------- See Notes to Financial Statements. THE RYDEX VARIABLE TRUST ANNUAL REPORT | 99 SCHEDULE OF INVESTMENTS (CONCLUDED) December 31, 2004 - -------------------------------------------------------------------------------- MID-CAP VALUE FUND - -------------------------------------------------------------------------------- MARKET FACE VALUE AMOUNT (NOTE 1) - ------------------------------------------------------------------------------ REPURCHASE AGREEMENT 0.6% Repurchase Agreement (Note 5) 1.55% due 01/03/05 $ 113,768 $ 113,768 --------------- TOTAL REPURCHASE AGREEMENT (Cost $113,768) 113,768 --------------- SECURITIES LENDING COLLATERAL 7.3% Investment in Securities Lending Short Term Investment Portfolio Held by U.S. Bank (Note 8) 1,424,576 1,424,576 --------------- TOTAL SECURITIES LENDING COLLATERAL (Cost $1,424,576) 1,424,576 --------------- TOTAL INVESTMENTS 107.4% (Cost $19,462,038) $ 20,923,261 =============== LIABILITIES IN EXCESS OF OTHER ASSETS - (7.4)% $ (1,444,709) =============== NET ASSETS - 100.0% $ 19,478,552 * NON-INCOME PRODUCING SECURITIES. + ALL OR A PORTION OF THIS SECURITY IS ON LOAN AT DECEMBER 31, 2004 - SEE NOTE 8. See Notes to Financial Statements. 100 | THE RYDEX VARIABLE TRUST ANNUAL REPORT SCHEDULE OF INVESTMENTS December 31, 2004 - -------------------------------------------------------------------------------- LARGE-CAP VALUE FUND - -------------------------------------------------------------------------------- MARKET VALUE SHARES (NOTE 1) - ------------------------------------------------------------------------------ COMMON STOCKS 99.5% FINANCIALS 38.6% BANKS 11.9% Bank of America Corp. 7,923 $ 372,302 Wells Fargo & Co. 3,315 206,027 Wachovia Corp.+ 3,148 165,585 U.S. Bancorp 3,661 114,662 SunTrust Banks, Inc. 727 53,711 Fifth Third Bancorp 1,104 52,197 National City Corp. 1,324 49,716 BB&T Corp. 1,081 45,456 Regions Financial Corp.+ 908 32,316 PNC Financial Services Group, Inc. 551 31,649 KeyCorp 800 27,120 North Fork Bancorporation, Inc. 920 26,542 M&T Bank Corp. 225 24,264 Comerica, Inc.+ 330 20,137 Marshall & Ilsley Corp. 436 19,271 AmSouth Bancorp+ 696 18,026 Synovus Financial Corp. 608 17,377 Compass Bancshares, Inc. 240 11,681 Zions Bancorporation 168 11,429 Huntington Bancshares, Inc. 452 11,201 First Horizon National Corp.+ 245 10,562 --------------- TOTAL BANKS 1,321,231 --------------- INSURANCE 8.5% American International Group, Inc.+ 5,111 335,639 Allstate Corp. 1,347 69,667 MetLife, Inc. 1,456 58,983 Prudential Financial, Inc. 1,008 55,400 St. Paul Travelers Cos., Inc. 1,309 48,525 Hartford Financial Services Group, Inc. 580 40,200 AFLAC, Inc. 992 39,521 Marsh & McLennan Cos., Inc. 1,030 33,887 Progressive Corp. 391 33,172 Chubb Corp.+ 376 28,914 Loews Corp. 367 25,800 ACE Ltd. 562 24,026 XL Capital Ltd. 268 20,810 MBIA, Inc. 274 17,339 Ambac Financial Group, Inc. 210 17,247 Lincoln National Corp. 345 16,105 Aon Corp. 622 14,841 Cincinnati Financial Corp. 331 14,650 Jefferson-Pilot Corp. 270 14,029 MARKET VALUE SHARES (NOTE 1) - ------------------------------------------------------------------------------ SAFECO Corp.+ 240 $ 12,538 Torchmark Corp. 203 11,599 UnumProvident Corp. 584 10,477 --------------- TOTAL INSURANCE 943,369 --------------- DIVERSIFIED FINANCIALS 7.2% Citigroup, Inc. 10,175 490,231 J.P. Morgan Chase & Co. 6,991 272,719 Principal Financial Group, Inc. 606 24,810 CIT Group, Inc. 410 18,786 --------------- TOTAL DIVERSIFIED FINANCIALS 806,546 --------------- CAPITAL MARKETS 5.4% Morgan Stanley+ 2,147 119,202 Merrill Lynch & Co., Inc. 1,821 108,841 Goldman Sachs Group, Inc.+ 952 99,046 Bank of New York Co., Inc. 1,521 50,832 Lehman Brothers Holdings, Inc. 503 44,002 Franklin Resources, Inc. 492 34,268 State Street Corp. 651 31,977 Charles Schwab Corp. 2,643 31,610 Mellon Financial Corp. 833 25,915 Bear Stearns Cos., Inc. 207 21,178 Northern Trust Corp. 424 20,598 E*Trade Financial Corp.*+ 728 10,884 Janus Capital Group, Inc. 462 7,766 --------------- TOTAL CAPITAL MARKETS 606,119 --------------- THRIFTS & MORTGAGE FINANCE 3.7% Fannie Mae 1,900 135,299 Freddie Mac 1,354 99,790 Washington Mutual, Inc. 1,707 72,172 Countrywide Financial Corp. 1,138 42,117 Golden West Financial Corp. 602 36,975 Sovereign Bancorp, Inc. 677 15,266 MGIC Investment Corp. 187 12,886 --------------- TOTAL THRIFTS & MORTGAGE FINANCE 414,505 --------------- CONSUMER FINANCE 1.1% MBNA Corp. 2,502 70,531 Capital One Financial Corp.+ 472 39,747 Providian Financial Corp.* 570 9,388 --------------- TOTAL CONSUMER FINANCE 119,666 --------------- REAL ESTATE 0.8% Equity Office Properties Trust 794 23,121 Equity Residential 560 20,261 ProLogis 358 15,512 Archstone-Smith Trust 380 14,554 Plum Creek Timber (REIT) Co., Inc. 360 13,838 See Notes to Financial Statements. THE RYDEX VARIABLE TRUST ANNUAL REPORT | 101 SCHEDULE OF INVESTMENTS (CONTINUED) December 31, 2004 - -------------------------------------------------------------------------------- LARGE-CAP VALUE FUND - -------------------------------------------------------------------------------- MARKET VALUE SHARES (NOTE 1) - ------------------------------------------------------------------------------ Apartment Investment & Management Co. -- Class A 177 $ 6,822 --------------- TOTAL REAL ESTATE 94,108 --------------- TOTAL FINANCIALS 4,305,544 --------------- CONSUMER DISCRETIONARY 13.3% MEDIA 7.0% Time Warner, Inc.* 8,982 174,610 Comcast Corp. -- Class A* 4,352 144,835 Viacom, Inc. -- Class B 3,347 121,797 Walt Disney Co.+ 4,003 111,284 News Corp. -- Class A 5,120 95,539 Gannett Co., Inc. 492 40,197 Clear Channel Communications, Inc. 1,125 37,676 Tribune Co. 624 26,295 Univision Communications, Inc. -- Class A* 630 18,440 Interpublic Group of Cos., Inc.* 828 11,095 --------------- TOTAL MEDIA 781,768 --------------- HOTELS, RESTAURANTS & LEISURE 1.9% McDonald's Corp. 2,462 78,932 Carnival Corp.+ 1,242 71,576 Starwood Hotels & Resorts Worldwide, Inc.+ 402 23,477 Hilton Hotels Corp. 755 17,169 Wendy's International, Inc. 216 8,480 Darden Restaurants, Inc. 299 8,294 --------------- TOTAL HOTELS, RESTAURANTS & LEISURE 207,928 --------------- MULTILINE RETAIL 1.2% Kohl's Corp.*+ 670 32,944 JC Penney Holding Co., Inc.+ 561 23,225 Sears Roebuck and Co.+ 402 20,514 Federated Department Stores, Inc. 327 18,897 May Department Stores Co. 569 16,729 Nordstrom, Inc. 274 12,804 Dillard's, Inc./AR -- Class A+ 157 4,219 Big Lots, Inc.* 212 2,571 --------------- TOTAL MULTILINE RETAIL 131,903 --------------- AUTOMOBILES 0.9% Ford Motor Co. 3,588 52,529 General Motors Corp.+ 1,104 44,226 --------------- TOTAL AUTOMOBILES 96,755 --------------- SPECIALTY RETAIL 0.6% Limited Brands, Inc. 797 18,347 Office Depot, Inc.* 610 10,590 AutoNation, Inc.*+ 518 9,951 MARKET VALUE SHARES (NOTE 1) - ------------------------------------------------------------------------------ Tiffany & Co.+ 288 $ 9,207 Toys `R' Us, Inc.* 418 8,556 Circuit City Stores, Inc. 384 6,006 OfficeMax, Inc. 176 5,523 --------------- TOTAL SPECIALTY RETAIL 68,180 --------------- HOUSEHOLD DURABLES 0.6% Pulte Homes, Inc. 247 15,759 Centex Corp.+ 239 14,240 Leggett & Platt, Inc.+ 378 10,747 KB Home 93 9,709 Whirlpool Corp. 121 8,374 Snap-On, Inc. 104 3,573 --------------- TOTAL HOUSEHOLD DURABLES 62,402 --------------- AUTO COMPONENTS 0.4% Johnson Controls, Inc. 376 23,853 Delphi Corp.+ 1,100 9,922 Dana Corp. 298 5,164 Cooper Tire & Rubber Co. 139 2,996 Visteon Corp. 250 2,443 --------------- TOTAL AUTO COMPONENTS 44,378 --------------- TEXTILES & APPAREL 0.3% VF Corp. 222 12,294 Liz Claiborne, Inc. 213 8,991 Jones Apparel Group, Inc. 237 8,667 Reebok International Ltd.+ 106 4,664 --------------- TOTAL TEXTILES & APPAREL 34,616 --------------- LEISURE EQUIPMENT & PRODUCTS 0.3% Eastman Kodak Co.+ 565 18,221 Brunswick Corp. 188 9,306 Hasbro, Inc. 348 6,744 --------------- TOTAL LEISURE EQUIPMENT & PRODUCTS 34,271 --------------- DISTRIBUTORS 0.1% Genuine Parts Co. 342 15,069 --------------- TOTAL DISTRIBUTORS 15,069 --------------- TOTAL CONSUMER DISCRETIONARY 1,477,270 --------------- INFORMATION TECHNOLOGY 7.9% SEMICONDUCTOR & SEMICONDUCTOR EQUIPMENT 2.2% Texas Instruments, Inc.+ 3,390 83,462 Applied Materials, Inc.* 3,330 56,943 KLA-Tencor Corp.* 380 17,700 Advanced Micro Devices, Inc.* 758 16,691 Micron Technology, Inc.*+ 1,206 14,894 Freescale Semiconductor, Inc. -- Class B* 767 14,082 National Semiconductor Corp. 700 12,565 See Notes to Financial Statements. 102 | THE RYDEX VARIABLE TRUST ANNUAL REPORT SCHEDULE OF INVESTMENTS (CONTINUED) December 31, 2004 - -------------------------------------------------------------------------------- LARGE-CAP VALUE FUND - -------------------------------------------------------------------------------- MARKET VALUE SHARES (NOTE 1) - ------------------------------------------------------------------------------ Novellus Systems, Inc.* 277 $ 7,726 Nvidia Corp.* 324 7,633 Teradyne, Inc.*+ 380 6,487 LSI Logic Corp.* 754 4,132 Applied Micro Circuits Corp.* 609 2,564 --------------- TOTAL SEMICONDUCTOR & SEMICONDUCTOR EQUIPMENT 244,879 --------------- COMPUTERS & PERIPHERALS 2.2% Hewlett-Packard Co. 5,925 124,247 EMC Corp./MA* 4,698 69,859 Sun Microsystems, Inc.* 6,591 35,460 NCR Corp.* 188 13,015 --------------- TOTAL COMPUTERS & PERIPHERALS 242,581 --------------- COMMUNICATIONS EQUIPMENT 1.2% Motorola, Inc.+ 4,776 82,147 Scientific-Atlanta, Inc. 302 9,969 Comverse Technology, Inc.* 391 9,560 JDS Uniphase Corp.*+ 2,830 8,971 Tellabs, Inc.* 905 7,774 Andrew Corp.* 319 4,348 ADC Telecommunications, Inc.* 1,585 4,248 CIENA Corp.* 1,122 3,748 --------------- TOTAL COMMUNICATIONS EQUIPMENT 130,765 --------------- IT CONSULTING & SERVICES 1.0% Electronic Data Systems Corp. 1,005 23,216 Computer Sciences Corp.*+ 374 21,082 SunGard Data Systems, Inc.* 569 16,120 Fiserv, Inc.* 386 15,513 Affiliated Computer Services, Inc. -- Class A* 256 15,409 Unisys Corp.* 663 6,749 Sabre Holdings Corp. 269 5,961 Convergys Corp.* 273 4,092 --------------- TOTAL IT CONSULTING & SERVICES 108,142 --------------- ELECTRONIC EQUIPMENT & INSTRUMENTS 0.6% Agilent Technologies, Inc.* 950 22,895 Molex, Inc. 366 10,980 Jabil Circuit, Inc.* 396 10,129 Solectron Corp.*+ 1,900 10,127 Sanmina-SCI Corp.* 1,023 8,665 Tektronix, Inc. 171 5,166 --------------- TOTAL ELECTRONIC EQUIPMENT & INSTRUMENTS 67,962 --------------- SOFTWARE 0.4% Veritas Software Corp.* 829 23,668 Siebel Systems, Inc.* 1,001 10,510 BMC Software, Inc.* 436 8,110 MARKET VALUE SHARES (NOTE 1) - ------------------------------------------------------------------------------ Novell, Inc.* 740 $ 4,995 Compuware Corp.* 758 4,904 --------------- TOTAL SOFTWARE 52,187 --------------- OFFICE ELECTRONICS 0.3% Xerox Corp.* 1,867 31,758 --------------- TOTAL OFFICE ELECTRONICS 31,758 --------------- TOTAL INFORMATION TECHNOLOGY 878,274 --------------- INDUSTRIALS 7.9% AEROSPACE & DEFENSE 1.8% Honeywell International, Inc. 1,684 59,630 General Dynamics Corp. 394 41,212 Northrop Grumman Corp. 723 39,302 Raytheon Co. 885 34,365 L-3 Communications Holdings, Inc. 230 16,845 Goodrich Corp. 229 7,475 --------------- TOTAL AEROSPACE & DEFENSE 198,829 --------------- INDUSTRIAL CONGLOMERATES 1.5% Tyco International Ltd.+ 3,940 140,815 Textron, Inc. 267 19,705 --------------- TOTAL INDUSTRIAL CONGLOMERATES 160,520 --------------- MACHINERY 1.3% Deere & Co. 491 36,531 Ingersoll-Rand Co. -- Class A 341 27,382 Eaton Corp. 289 20,912 Parker Hannifin Corp. 231 17,496 Dover Corp. 393 16,483 ITT Industries, Inc. 176 14,863 Cummins, Inc. 90 7,541 Pall Corp. 236 6,832 --------------- TOTAL MACHINERY 148,040 --------------- ROAD & RAIL 1.0% Burlington Northern Santa Fe Corp. 734 34,726 Union Pacific Corp. 500 33,625 Norfolk Southern Corp. 773 27,975 CSX Corp. 419 16,793 --------------- TOTAL ROAD & RAIL 113,119 --------------- COMMERCIAL SERVICES & SUPPLIES 0.9% Cendant Corp. 2,061 48,186 Waste Management, Inc. 1,124 33,652 RR Donnelley & Sons Co. 431 15,210 Allied Waste Industries, Inc.*+ 624 5,791 --------------- TOTAL COMMERCIAL SERVICES & SUPPLIES 102,839 --------------- AIR FREIGHT & COURIERS 0.6% FedEx Corp.+ 587 57,814 Ryder System, Inc. 121 5,780 --------------- TOTAL AIR FREIGHT & COURIERS 63,594 --------------- See Notes to Financial Statements. THE RYDEX VARIABLE TRUST ANNUAL REPORT | 103 SCHEDULE OF INVESTMENTS (CONTINUED) December 31, 2004 - -------------------------------------------------------------------------------- LARGE-CAP VALUE FUND - -------------------------------------------------------------------------------- MARKET VALUE SHARES (NOTE 1) - ------------------------------------------------------------------------------ BUILDING PRODUCTS 0.3% Masco Corp.+ 876 $ 32,000 --------------- TOTAL BUILDING PRODUCTS 32,000 --------------- AIRLINES 0.2% Southwest Airlines Co. 1,528 24,876 --------------- TOTAL AIRLINES 24,876 --------------- ELECTRICAL EQUIPMENT 0.2% Cooper Industries Ltd. -- Class A 176 11,949 American Power Conversion Corp.+ 375 8,025 Power-One, Inc.* 158 1,409 --------------- TOTAL ELECTRICAL EQUIPMENT 21,383 --------------- TRADING COMPANIES & DISTRIBUTORS 0.1% W.W. Grainger, Inc. 174 11,592 --------------- TOTAL TRADING COMPANIES & DISTRIBUTORS 11,592 --------------- TOTAL INDUSTRIALS 876,792 --------------- HEALTH CARE 7.7% PHARMACEUTICALS 3.7% Pfizer, Inc. 14,770 397,165 Mylan Laboratories, Inc. 530 9,370 Watson Pharmaceuticals, Inc.* 211 6,923 King Pharmaceuticals, Inc.*+ 464 5,754 --------------- TOTAL PHARMACEUTICALS 419,212 --------------- HEALTH CARE PROVIDERS & SERVICES 3.1% WellPoint, Inc.* 582 66,930 Cardinal Health, Inc. 850 49,427 Caremark Rx, Inc.*+ 894 35,250 Aetna, Inc. 281 35,055 HCA, Inc. 830 33,167 Medco Health Solutions, Inc.*+ 531 22,089 CIGNA Corp. 261 21,290 McKesson Corp. 581 18,278 Laboratory Corporation of America Holdings* 270 13,451 AmerisourceBergen Corp. 204 11,971 Health Management Associates, Inc. -- Class A+ 475 10,792 Tenet Healthcare Corp.* 911 10,003 Humana, Inc.* 317 9,412 Manor Care, Inc. 162 5,740 --------------- TOTAL HEALTH CARE PROVIDERS & SERVICES 342,855 --------------- BIOTECHNOLOGY 0.6% Biogen Idec, Inc.*+ 649 43,230 Chiron Corp.* 371 12,366 Applera Corp. - Applied Biosystems Group 387 8,092 --------------- TOTAL BIOTECHNOLOGY 63,688 --------------- MARKET VALUE SHARES (NOTE 1) - ------------------------------------------------------------------------------ HEALTH CARE EQUIPMENT & SUPPLIES 0.3% Fisher Scientific International, Inc.*+ 221 $ 13,786 Thermo Electron Corp.* 313 9,449 Bausch & Lomb, Inc. 99 6,382 PerkinElmer, Inc. 248 5,578 --------------- TOTAL HEALTH CARE EQUIPMENT & SUPPLIES 35,195 --------------- TOTAL HEALTH CARE 860,950 --------------- ENERGY 6.8% OIL & GAS 6.3% ChevronTexaco Corp.+ 4,157 218,284 ConocoPhillips 1,356 117,742 Occidental Petroleum Corp. 772 45,054 Devon Energy Corp. 949 36,935 Burlington Resources, Inc. 767 33,365 Apache Corp. 641 32,415 Anadarko Petroleum Corp. 483 31,303 Marathon Oil Corp. 680 25,575 Valero Energy Corp. 508 23,063 Unocal Corp. 514 22,225 Williams Cos., Inc. 1,096 17,854 Kerr-McGee Corp. 299 17,279 Kinder Morgan, Inc. 235 17,186 EOG Resources, Inc.+ 228 16,270 Amerada Hess Corp.+ 173 14,252 El Paso Corp. 1,260 13,104 Sunoco, Inc. 140 11,439 Ashland, Inc. 135 7,881 --------------- TOTAL OIL & GAS 701,226 --------------- ENERGY EQUIPMENT & SERVICES 0.5% Transocean, Inc.*+ 627 26,579 Nabors Industries Ltd.*+ 298 15,284 Noble Corp.* 270 13,430 Rowan Cos., Inc.* 208 5,387 --------------- TOTAL ENERGY EQUIPMENT & SERVICES 60,680 --------------- TOTAL ENERGY 761,906 --------------- TELECOMMUNICATION SERVICES 5.8% DIVERSIFIED TELECOMMUNICATION SERVICES 5.8% Verizon Communications, Inc.+ 5,434 220,131 SBC Communications, Inc. 6,499 167,479 BellSouth Corp. 3,589 99,738 Sprint Corp. 2,880 71,568 Alltel Corp. 595 34,962 AT&T Corp.+ 1,556 29,657 CenturyTel, Inc. 269 9,542 Citizens Communications Co. 655 9,033 --------------- TOTAL DIVERSIFIED TELECOMMUNICATION SERVICES 642,110 --------------- TOTAL TELECOMMUNICATION SERVICES 642,110 --------------- See Notes to Financial Statements. 104 | THE RYDEX VARIABLE TRUST ANNUAL REPORT SCHEDULE OF INVESTMENTS (CONTINUED) December 31, 2004 - -------------------------------------------------------------------------------- LARGE-CAP VALUE FUND - -------------------------------------------------------------------------------- MARKET VALUE SHARES (NOTE 1) - ------------------------------------------------------------------------------ UTILITIES 5.3% ELECTRIC UTILITIES 3.6% Exelon Corp. 1,298 $ 57,203 Southern Co. 1,454 48,738 Entergy Corp. 443 29,942 FPL Group, Inc.+ 366 27,358 American Electric Power Co., Inc. 776 26,648 PG&E Corp.*+ 788 26,225 FirstEnergy Corp. 646 25,523 Progress Energy, Inc. 488 22,077 Consolidated Edison, Inc. 473 20,694 Edison International 642 20,563 PPL Corp. 371 19,767 Ameren Corp.+ 378 18,953 Cinergy Corp.+ 357 14,862 DTE Energy Co. 341 14,707 Xcel Energy, Inc. 790 14,378 Pinnacle West Capital Corp. 175 7,772 TECO Energy, Inc. 390 5,983 Allegheny Energy, Inc.*+ 260 5,125 --------------- TOTAL ELECTRIC UTILITIES 406,518 --------------- MULTI-UTILITIES 1.4% Duke Energy Corp. 1,873 47,443 Dominion Resources, Inc./VA+ 652 44,167 Public Service Enterprise Group, Inc. 459 23,762 Sempra Energy 453 16,616 Constellation Energy Group, Inc. 346 15,124 Calpine Corp.* 1,047 4,125 CMS Energy Corp.* 386 4,034 Dynegy, Inc. -- Class A* 741 3,423 --------------- TOTAL MULTI-UTILITIES 158,694 --------------- GAS UTILITIES 0.3% KeySpan Corp.+ 318 12,545 NiSource, Inc. 534 12,164 Nicor, Inc. 91 3,362 Peoples Energy Corp. 65 2,857 --------------- TOTAL GAS UTILITIES 30,928 --------------- TOTAL UTILITIES 596,140 --------------- MATERIALS 3.5% METALS & MINING 1.3% Alcoa, Inc. 1,711 53,759 Newmont Mining Corp.+ 870 38,637 Phelps Dodge Corp.+ 187 18,498 Nucor Corp.+ 316 16,539 United States Steel Corp. 215 11,019 --------------- TOTAL METALS & MINING 138,452 --------------- MARKET VALUE SHARES (NOTE 1) - ------------------------------------------------------------------------------ CHEMICALS 1.0% Monsanto Co. 516 $ 28,664 Air Products & Chemicals, Inc. 441 25,565 PPG Industries, Inc. 339 23,106 Rohm & Haas Co. 438 19,373 Eastman Chemical Co. 152 8,775 Engelhard Corp. 240 7,361 Great Lakes Chemical Corp. 97 2,763 --------------- TOTAL CHEMICALS 115,607 --------------- PAPER & FOREST PRODUCTS 1.0% International Paper Co. 950 39,900 Weyerhaeuser Co. 463 31,123 Georgia-Pacific Corp.+ 496 18,590 MeadWestvaco Corp. 397 13,454 Louisiana-Pacific Corp. 221 5,910 --------------- TOTAL PAPER & FOREST PRODUCTS 108,977 --------------- CONTAINERS & PACKAGING 0.1% Temple-Inland, Inc. 101 6,909 Bemis Co. 214 6,225 --------------- TOTAL CONTAINERS & PACKAGING 13,134 --------------- CONSTRUCTION MATERIALS 0.1% Vulcan Materials Co. 195 10,649 --------------- TOTAL CONSTRUCTION MATERIALS 10,649 --------------- TOTAL MATERIALS 386,819 --------------- CONSUMER STAPLES 2.7% FOOD & DRUG RETAILING 1.3% Costco Wholesale Corp.+ 920 44,537 CVS Corp. 783 35,290 Kroger Co.*+ 1,454 25,503 Safeway, Inc.* 883 17,430 Albertson's, Inc.+ 721 17,218 Supervalu, Inc. 255 8,803 --------------- TOTAL FOOD & DRUG RETAILING 148,781 --------------- FOOD PRODUCTS 0.9% General Mills, Inc.+ 713 35,443 ConAgra Foods, Inc. 1,010 29,745 Archer-Daniels-Midland Co. 1,283 28,624 --------------- TOTAL FOOD PRODUCTS 93,812 --------------- BEVERAGES 0.2% Coca-Cola Enterprises, Inc. 916 19,099 Adolph Coors Co. -- Class B 74 5,599 --------------- TOTAL BEVERAGES 24,698 --------------- TOBACCO 0.2% Reynolds American, Inc.+ 294 23,108 --------------- TOTAL TOBACCO 23,108 --------------- See Notes to Financial Statements. THE RYDEX VARIABLE TRUST ANNUAL REPORT | 105 SCHEDULE OF INVESTMENTS (CONCLUDED) December 31, 2004 - -------------------------------------------------------------------------------- LARGE-CAP VALUE FUND - -------------------------------------------------------------------------------- MARKET VALUE SHARES (NOTE 1) - ------------------------------------------------------------------------------ PERSONAL PRODUCTS 0.1% Alberto-Culver Co. -- Class B 174 $ 8,451 --------------- TOTAL PERSONAL PRODUCTS 8,451 --------------- TOTAL CONSUMER STAPLES 298,850 --------------- TOTAL COMMON STOCKS (Cost $9,863,546) 11,084,655 --------------- FACE AMOUNT ------------- REPURCHASE AGREEMENT 0.5% Repurchase Agreement (Note 5) 1.55% due 01/03/05 $ 54,448 54,448 --------------- TOTAL REPURCHASE AGREEMENT (Cost $54,448) 54,448 --------------- SECURITIES LENDING COLLATERAL 8.3% Investment in Securities Lending Short Term Investment Portfolio held by U.S. Bank (Note 8) 931,373 931,373 --------------- TOTAL SECURITIES LENDING COLLATERAL (Cost $931,373) 931,373 --------------- TOTAL INVESTMENTS 108.3% (Cost $10,849,367) $ 12,070,476 =============== LIABILITIES IN EXCESS OF OTHER ASSETS - (8.3)% $ (926,597) =============== NET ASSETS - 100.0% $ 11,143,879 * NON-INCOME PRODUCING SECURITIES. + ALL OR A PORTION OF THIS SECURITY IS ON LOAN AT DECEMBER 31, 2004 - SEE NOTE 8. REIT - REAL ESTATE INVESTMENT TRUST. See Notes to Financial Statements. 106 | THE RYDEX VARIABLE TRUST ANNUAL REPORT SCHEDULE OF INVESTMENTS December 31, 2004 - -------------------------------------------------------------------------------- SMALL-CAP GROWTH FUND - -------------------------------------------------------------------------------- MARKET VALUE SHARES (NOTE 1) - ------------------------------------------------------------------------------ COMMON STOCKS 99.5% CONSUMER DISCRETIONARY 19.8% HOTELS RESTAURANTS & LEISURE 4.9% Sonic Corp.* 6,859 $ 209,199 P.F. Chang's China Bistro, Inc.* 2,951 166,289 CEC Entertainment, Inc.* 4,145 165,676 Argosy Gaming Co.* 3,359 156,865 Panera Bread Co. -- Class A*+ 3,451 139,144 Shuffle Master, Inc.*+ 2,648 124,721 Rare Hospitality International, Inc.* 3,886 123,808 WMS Industries, Inc.*+ 3,480 116,719 IHOP Corp. 2,270 95,090 Triarc Cos. -- Class B 7,357 90,197 Papa John's International, Inc.* 2,036 70,120 Bally Total Fitness Holding Corp.* 3,890 16,494 --------------- TOTAL HOTELS RESTAURANTS & LEISURE 1,474,322 --------------- SPECIALTY RETAIL 4.6% Tractor Supply Co.* 4,363 162,347 Guitar Center, Inc.*+ 2,883 151,905 Aaron Rents, Inc. 5,675 141,875 Electronics Boutique Holdings Corp.* 2,768 118,858 Children's Place Retail Stores, Inc.* 3,074 113,830 Too, Inc.* 3,940 96,373 HOT Topic, Inc.* 5,302 91,141 Stein Mart, Inc.* 4,842 82,605 Cost Plus, Inc.* 2,495 80,164 Genesco, Inc.* 2,514 78,286 Select Comfort Corp.* 4,215 75,617 Christopher & Banks Corp.+ 4,072 75,129 Hibbett Sporting Goods, Inc.* 2,672 71,102 Cato Corp. -- Class A 2,360 68,015 --------------- TOTAL SPECIALTY RETAIL 1,407,247 --------------- HOUSEHOLD DURABLES 3.4% NVR, Inc.*+ 678 521,653 Meritage Homes Corp.* 1,560 175,812 Ethan Allen Interiors, Inc. 4,096 163,922 Champion Enterprises, Inc.* 8,174 96,617 Interface, Inc. -- Class A* 5,940 59,222 --------------- TOTAL HOUSEHOLD DURABLES 1,017,226 --------------- TEXTILES & APPAREL 2.8% Fossil, Inc.* 8,115 208,069 Quiksilver, Inc.* 6,489 193,307 Wolverine World Wide, Inc. 4,358 136,928 K-Swiss, Inc. -- Class A 3,904 113,684 Phillips-Van Heusen Corp. 3,530 95,310 MARKET VALUE SHARES (NOTE 1) - ------------------------------------------------------------------------------ Oxford Industries, Inc. 2,045 $ 84,459 OshKosh B'Gosh, Inc. -- Class A 1,257 26,900 --------------- TOTAL TEXTILES & APPAREL 858,657 --------------- LEISURE EQUIPMENT & PRODUCTS 2.2% Polaris Industries, Inc. 4,881 332,006 SCP Pool Corp. 5,950 189,805 Nautilus Group, Inc. 3,750 90,637 Arctic Cat, Inc. 2,325 61,659 --------------- TOTAL LEISURE EQUIPMENT & PRODUCTS 674,107 --------------- MEDIA 1.0% Arbitron, Inc.* 3,529 138,267 Advo, Inc. 3,488 124,347 Thomas Nelson, Inc. 1,797 40,612 --------------- TOTAL MEDIA 303,226 --------------- AUTOMOBILES 0.8% Winnebago Industries, Inc. 3,832 149,678 Fleetwood Enterprises, Inc.*+ 6,325 85,134 --------------- TOTAL AUTOMOBILES 234,812 --------------- AUTO COMPONENTS 0.1% Midas, Inc.* 1,936 38,720 --------------- TOTAL AUTO COMPONENTS 38,720 --------------- TOTAL CONSUMER DISCRETIONARY 6,008,317 --------------- INFORMATION TECHNOLOGY 17.8% SOFTWARE 6.2% Factset Research Systems, Inc.+ 3,557 207,871 Hyperion Solutions Corp.* 4,446 207,273 Kronos, Inc./MA* 3,548 181,409 Take-Two Interactive Software, Inc.* 5,150 179,169 Micros Systems, Inc.* 2,106 164,394 Internet Security Systems, Inc.* 5,230 121,598 Filenet Corp.* 4,504 116,023 Ansys, Inc.* 3,565 114,294 Altiris, Inc.* 3,070 108,770 Serena Software, Inc.*+ 4,972 107,594 Progress Software Corp.* 4,118 96,155 Manhattan Associates, Inc.*+ 3,430 81,908 Sonic Solutions, Inc.*+ 2,672 59,960 Talx Corp. 1,682 43,379 Catapult Communications Corp.* 1,784 43,101 Napster, Inc.*+ 3,970 37,318 --------------- TOTAL SOFTWARE 1,870,216 --------------- ELECTRONIC EQUIPMENT & INSTRUMENTS 4.5% Flir Systems, Inc.* 3,904 249,036 Trimble Navigation Ltd.* 5,910 195,266 Cognex Corp. 5,259 146,726 Dionex Corp.* 2,379 134,818 See Notes to Financial Statements. THE RYDEX VARIABLE TRUST ANNUAL REPORT | 107 SCHEDULE OF INVESTMENTS (CONTINUED) December 31, 2004 - -------------------------------------------------------------------------------- SMALL-CAP GROWTH FUND - -------------------------------------------------------------------------------- MARKET VALUE SHARES (NOTE 1) - ------------------------------------------------------------------------------ Global Imaging Systems, Inc.* 2,646 $ 104,517 Scansource, Inc.* 1,541 95,789 Rogers Corp.* 2,045 88,139 Littelfuse, Inc.* 2,542 86,835 MTS Systems Corp. 2,330 78,777 BEI Technologies, Inc. 1,810 55,893 Daktronics, Inc.* 2,153 53,588 Keithley Instruments, Inc. 1,975 38,908 X-Rite, Inc. 2,375 38,024 --------------- TOTAL ELECTRONIC EQUIPMENT & INSTRUMENTS 1,366,316 --------------- IT CONSULTING & SERVICES 2.6% Global Payments, Inc.+ 4,383 256,581 CACI International, Inc. -- Class A* 3,330 226,873 eFunds Corp.* 5,570 133,736 Mantech International Corp. -- Class A* 3,690 87,600 Startek, Inc. 1,775 50,499 Carreker Corp.* 2,832 24,355 --------------- TOTAL IT CONSULTING & SERVICES 779,644 --------------- SEMICONDUCTOR & SEMICONDUCTOR EQUIPMENT 1.3% Microsemi Corp.* 6,809 118,204 ATMI, Inc.* 3,582 80,703 Power Integrations, Inc.* 3,534 69,903 Helix Technology Corp. 2,980 51,822 Kulicke & Soffa Industries, Inc.* 5,818 50,151 Supertex, Inc.* 1,590 34,503 --------------- TOTAL SEMICONDUCTOR & SEMICONDUCTOR EQUIPMENT 405,286 --------------- INTERNET SOFTWARE & SERVICES 1.2% Websense, Inc.* 2,660 134,915 WebEx Communications, Inc.*+ 5,100 121,278 j2 Global Communications, Inc.* 2,679 92,425 Zix Corp.*+ 3,672 18,911 --------------- TOTAL INTERNET SOFTWARE & SERVICES 367,529 --------------- COMPUTERS & PERIPHERALS 1.1% Avid Technology, Inc.* 3,870 238,972 Synaptics, Inc.* 2,917 89,202 --------------- TOTAL COMPUTERS & PERIPHERALS 328,174 --------------- COMMUNICATIONS EQUIPMENT 0.9% Inter-Tel, Inc. 2,953 80,853 ViaSat, Inc.* 3,051 74,048 Harmonic, Inc.* 8,241 68,730 Digi International, Inc.* 2,470 42,459 --------------- TOTAL COMMUNICATIONS EQUIPMENT 266,090 --------------- TOTAL INFORMATION TECHNOLOGY 5,383,255 --------------- MARKET VALUE SHARES (NOTE 1) - ------------------------------------------------------------------------------ INDUSTRIALS 16.8% MACHINERY 4.9% Oshkosh Truck Corp. 4,080 $ 278,990 IDEX Corp. 5,777 233,969 Toro Co. 2,602 211,673 Clarcor, Inc. 2,917 159,764 Manitowoc Co., Inc. 3,361 126,542 CUNO, Inc.* 2,058 122,245 Kaydon Corp.+ 3,216 106,192 JLG Industries, Inc. 5,080 99,720 Wabash National Corp.*+ 3,464 93,286 Lindsay Manufacturing Co. 1,257 32,531 Milacron, Inc.* 5,542 18,787 --------------- TOTAL MACHINERY 1,483,699 --------------- AEROSPACE & DEFENSE 2.9% Engineered Support Systems, Inc.+ 3,038 179,910 Armor Holdings, Inc.* 3,786 178,018 Gencorp, Inc. 6,040 112,163 Teledyne Technologies, Inc.* 3,721 109,509 Ceradyne, Inc.* 1,850 105,839 EDO Corp. 2,280 72,390 Mercury Computer Systems, Inc.*+ 2,403 71,321 Applied Signal Technology, Inc. 1,277 45,014 --------------- TOTAL AEROSPACE & DEFENSE 874,164 --------------- COMMERCIAL SERVICES & SUPPLIES 2.6% Brady Corp. -- Class A 2,759 172,631 John H. Harland Co. 3,168 114,365 Watson Wyatt & Co., Holdings 3,697 99,634 Labor Ready, Inc.* 4,787 80,996 Coinstar, Inc.* 2,807 75,312 Heidrick & Struggles International, Inc.* 2,186 74,914 Pre-Paid Legal Services, Inc.+ 1,892 71,044 Vertrue, Inc.* 1,135 42,869 Administaff, Inc.* 2,903 36,607 CPI Corp. 826 11,225 --------------- TOTAL COMMERCIAL SERVICES & SUPPLIES 779,597 --------------- ROAD & RAIL 2.0% Landstar System, Inc.* 3,453 254,279 Heartland Express, Inc. 8,560 192,343 Knight Transportation, Inc. 6,452 160,010 --------------- TOTAL ROAD & RAIL 606,632 --------------- ELECTRICAL EQUIPMENT 2.0% Roper Industries, Inc. 4,811 292,365 Acuity Brands, Inc. 4,839 153,880 Baldor Electric Co. 3,760 103,513 Artesyn Technologies, Inc.* 4,480 50,624 --------------- TOTAL ELECTRICAL EQUIPMENT 600,382 --------------- See Notes to Financial Statements. 108 | THE RYDEX VARIABLE TRUST ANNUAL REPORT SCHEDULE OF INVESTMENTS (CONTINUED) December 31, 2004 - -------------------------------------------------------------------------------- SMALL-CAP GROWTH FUND - -------------------------------------------------------------------------------- MARKET VALUE SHARES (NOTE 1) - ------------------------------------------------------------------------------ AIR FREIGHT & COURIERS 0.9% EGL, Inc.*+ 5,857 $ 175,066 Forward Air Corp.* 2,449 109,470 --------------- TOTAL AIR FREIGHT & COURIERS 284,536 --------------- BUILDING PRODUCTS 0.9% Simpson Manufacturing Co., Inc. 5,438 189,786 ElkCorp 2,267 77,577 --------------- TOTAL BUILDING PRODUCTS 267,363 --------------- MARINE 0.4% Kirby Corp.* 2,830 125,595 --------------- TOTAL MARINE 125,595 --------------- TRADING COMPANIES & DISTRIBUTORS 0.2% Lawson Products, Inc. 1,060 53,456 --------------- TOTAL TRADING COMPANIES & DISTRIBUTORS 53,456 --------------- TOTAL INDUSTRIALS 5,075,424 --------------- HEALTH CARE 16.7% HEALTH CARE EQUIPMENT & SUPPLIES 9.3% Cooper Cos., Inc.+ 3,735 263,654 Respironics, Inc.* 4,013 218,147 Idexx Laboratories, Inc.* 3,843 209,789 ResMed, Inc.* 3,865 197,502 Diagnostic Products Corp. 3,322 182,876 Advanced Medical Optics, Inc.*+ 4,187 172,253 Mentor Corp. 4,885 164,820 American Medical Systems ~ Holdings, Inc.* 3,842 160,634 Sybron Dental Specialties, Inc.* 4,435 156,910 Biosite, Inc.*+ 1,980 121,849 Integra LifeSciences Holdings Corp.* 3,286 121,352 Immucor, Inc.* 5,116 120,277 PolyMedica Corp. 3,130 116,718 Haemonetics Corp./MA*+ 2,894 104,792 ArthroCare Corp.* 2,690 86,241 Intermagnetics General Corp.* 2,905 73,816 SurModics, Inc.*+ 1,998 64,955 Hologic, Inc.* 2,341 64,307 Cyberonics, Inc.*+ 2,720 56,358 Merit Medical Systems Inc.* 3,014 46,054 Kensey Nash Corp.* 1,292 44,613 BioLase Technology, Inc.+ 2,778 30,197 Possis Medical, Inc.* 2,070 27,904 --------------- TOTAL HEALTH CARE EQUIPMENT & SUPPLIES 2,806,018 --------------- MARKET VALUE SHARES (NOTE 1) - ------------------------------------------------------------------------------ HEALTH CARE PROVIDERS & SERVICES 5.4% Pharmaceutical Product Development, Inc.* 6,454 $ 266,486 Cerner Corp.*+ 4,145 220,390 AMERIGROUP Corp.* 2,850 215,631 Sierra Health Services, Inc.* 3,012 165,991 Centene Corp.* 4,680 132,678 American Healthways, Inc.* 3,757 124,131 AmSurg Corp.* 3,334 98,486 Dendrite International, Inc.* 4,762 92,383 SFBC International, Inc.* 1,800 71,100 LabOne, Inc.* 1,951 62,510 Amedisys, Inc.* 1,872 60,634 Odyssey HealthCare, Inc.* 4,185 57,251 LCA-Vision, Inc. 2,295 53,680 CryoLife, Inc.*+ 2,660 18,806 --------------- TOTAL HEALTH CARE PROVIDERS & SERVICES 1,640,157 --------------- PHARMACEUTICALS 1.6% MGI Pharma, Inc.*+ 8,093 226,685 Medicis Pharmaceutical Corp. -- Class A 6,239 219,051 Noven Pharmaceuticals, Inc.* 2,672 45,584 --------------- TOTAL PHARMACEUTICALS 491,320 --------------- BIOTECHNOLOGY 0.4% Enzo Biochem, Inc.* 3,698 72,000 Regeneron Pharmaceuticals, Inc.* 6,360 58,576 --------------- TOTAL BIOTECHNOLOGY 130,576 --------------- TOTAL HEALTH CARE 5,068,071 --------------- FINANCIALS 11.0% BANKS 6.8% First Bancorp Puerto Rico 4,598 292,019 East-West Bancorp, Inc.+ 5,975 250,711 UCBH Holdings, Inc. 5,187 237,668 Hudson United Bancorp 5,131 202,059 First Midwest Bancorp, Inc./IL 5,288 191,901 United Bankshares, Inc. 4,920 187,698 Southwest Bancorp of Texas, Inc. 7,997 186,250 Wintrust Financial Corp. 2,461 140,179 Republic Bancorp, Inc./MI 8,040 122,851 TrustCo Bank Corp./NY 8,488 117,050 PrivateBancorp, Inc. 2,317 74,677 Nara Bancorp, Inc. 2,658 56,536 --------------- TOTAL BANKS 2,059,599 --------------- REAL ESTATE 2.5% New Century Financial Corp.+ 6,237 398,607 Essex Property Trust, Inc. 2,614 219,053 Kilroy Realty Corp. 3,250 138,937 --------------- TOTAL REAL ESTATE 756,597 --------------- See Notes to Financial Statements. THE RYDEX VARIABLE TRUST ANNUAL REPORT | 109 SCHEDULE OF INVESTMENTS (CONTINUED) December 31, 2004 - -------------------------------------------------------------------------------- SMALL-CAP GROWTH FUND - -------------------------------------------------------------------------------- MARKET VALUE SHARES (NOTE 1) - ------------------------------------------------------------------------------ INSURANCE 1.0% Philadelphia Consolidated Holding Co.* 2,540 $ 167,996 Hilb Rogal & Hobbs Co. 4,100 148,584 --------------- TOTAL INSURANCE 316,580 --------------- THRIFTS & MORTGAGE FINANCE 0.5% BankAtlantic Bancorp, Inc. -- Class A 6,830 135,917 --------------- TOTAL THRIFTS & MORTGAGE FINANCE 135,917 --------------- CONSUMER FINANCE 0.2% World Acceptance Corp.* 2,140 58,871 --------------- TOTAL CONSUMER FINANCE 58,871 --------------- TOTAL FINANCIALS 3,327,564 --------------- ENERGY 7.7% OIL & GAS 4.7% Patina Oil & Gas Corp. 8,062 302,325 Southwestern Energy Co.* 4,136 209,654 Cimarex Energy Co.*+ 4,750 180,025 Vintage Petroleum, Inc. 7,497 170,107 Cabot Oil & Gas Corp. 3,772 166,911 St. Mary Land & Exploration Co. 3,265 136,281 Remington Oil & Gas Corp.* 3,160 86,110 Frontier Oil Corp. 3,074 81,953 Petroleum Development Corp.* 2,016 77,757 --------------- TOTAL OIL & GAS 1,411,123 --------------- ENERGY EQUIPMENT & SERVICES 3.0% Unit Corp.* 5,215 199,265 Cal Dive International, Inc.*+ 4,374 178,240 CARBO Ceramics, Inc. 1,941 133,929 Hydril* 2,645 120,374 Lone Star Technologies, Inc.* 3,310 110,753 Atwood Oceanics, Inc.* 1,830 95,343 Tetra Technologies, Inc.* 2,552 72,222 --------------- TOTAL ENERGY EQUIPMENT & SERVICES 910,126 --------------- TOTAL ENERGY 2,321,249 --------------- MATERIALS 4.8% METALS & MINING 1.6% Massey Energy Co.+ 8,675 303,191 Cleveland-Cliffs, Inc. 1,230 127,748 Amcol International Corp. 3,345 67,201 --------------- TOTAL METALS & MINING 498,140 --------------- CHEMICALS 1.5% Georgia Gulf Corp.+ 3,823 190,386 MacDermid, Inc. 3,453 124,653 Headwaters, Inc.* 3,831 109,184 Omnova Solutions, Inc.* 4,599 25,846 --------------- TOTAL CHEMICALS 450,069 --------------- MARKET VALUE SHARES (NOTE 1) - ------------------------------------------------------------------------------ CONSTRUCTION MATERIALS 1.0% Florida Rock Industries, Inc. 4,942 $ 294,197 --------------- TOTAL CONSTRUCTION MATERIALS 294,197 --------------- PAPER & FOREST PRODUCTS 0.7% Wausau-Mosinee Paper Corp. 5,890 105,196 Neenah Paper, Inc.* 1,830 59,658 Deltic Timber Corp. 1,294 54,930 --------------- TOTAL PAPER & FOREST PRODUCTS 219,784 --------------- TOTAL MATERIALS 1,462,190 --------------- CONSUMER STAPLES 3.2% FOOD PRODUCTS 1.4% Ralcorp Holdings, Inc. 3,340 140,046 Delta & Pine Land Co. 4,397 119,950 Sanderson Farms, Inc. 2,271 98,289 Lance, Inc. 3,380 64,321 --------------- TOTAL FOOD PRODUCTS 422,606 --------------- PERSONAL PRODUCTS 0.7% NBTY, Inc.* 7,637 183,364 Natures Sunshine Products, Inc. 1,875 38,175 --------------- TOTAL PERSONAL PRODUCTS 221,539 --------------- HOUSEHOLD PRODUCTS 0.6% Rayovac Corp.*+ 3,948 120,651 WD-40 Co. 2,017 57,303 --------------- TOTAL HOUSEHOLD PRODUCTS 177,954 --------------- FOOD & DRUG RETAILING 0.5% United Natural Foods, Inc.* 4,557 141,723 --------------- TOTAL FOOD & DRUG RETAILING 141,723 --------------- TOTAL CONSUMER STAPLES 963,822 --------------- UTILITIES 1.3% MULTI-UTILITIES 0.8% Energen Corp. 4,160 245,232 --------------- TOTAL MULTI-UTILITIES 245,232 --------------- GAS UTILITIES 0.5% New Jersey Resources Corp. 3,170 137,388 --------------- TOTAL GAS UTILITIES 137,388 --------------- TOTAL UTILITIES 382,620 --------------- TELECOMMUNICATION SERVICES 0.4% DIVERSIFIED TELECOMMUNICATION SERVICES 0.4% Commonwealth Telephone Enterprises, Inc.* 2,391 118,737 --------------- TOTAL DIVERSIFIED TELECOMMUNICATION SERVICES 118,737 --------------- TOTAL TELECOMMUNICATION SERVICES 118,737 --------------- TOTAL COMMON STOCKS (Cost $26,894,261) 30,111,249 --------------- See Notes to Financial Statements. 110 | THE RYDEX VARIABLE TRUST ANNUAL REPORT SCHEDULE OF INVESTMENTS (CONCLUDED) December 31, 2004 - -------------------------------------------------------------------------------- SMALL-CAP GROWTH FUND - -------------------------------------------------------------------------------- MARKET FACE VALUE AMOUNT (NOTE 1) - ------------------------------------------------------------------------------ REPURCHASE AGREEMENT 0.6% Repurchase Agreement (Note 5) 1.55% due 01/03/05 $ 182,100 $ 182,100 --------------- TOTAL REPURCHASE AGREEMENT (Cost $182,100) 182,100 --------------- SECURITIES LENDING COLLATERAL 5.2% Investment in Securities Lending Short Term Investment Portfolio held by U.S. Bank (Note 8) 1,572,253 1,572,253 --------------- TOTAL SECURITIES LENDING COLLATERAL (Cost $1,572,253) 1,572,253 --------------- TOTAL INVESTMENTS 105.3% (Cost $28,648,614) $ 31,865,602 =============== LIABILITIES IN EXCESS OF OTHER ASSETS - (5.3)% $ (1,596,236) =============== NET ASSETS - 100.0% $ 30,269,366 * NON-INCOME PRODUCING SECURITIES. + ALL OR A PORTION OF THIS SECURITY IS ON LOAN AT DECEMBER 31, 2004 - SEE NOTE 8. See Notes to Financial Statements. THE RYDEX VARIABLE TRUST ANNUAL REPORT | 111 SCHEDULE OF INVESTMENTS December 31, 2004 - -------------------------------------------------------------------------------- MID-CAP GROWTH FUND - -------------------------------------------------------------------------------- MARKET VALUE SHARES (NOTE 1) - ------------------------------------------------------------------------------ COMMON STOCKS 99.5% CONSUMER DISCRETIONARY 21.5% SPECIALTY RETAIL 9.2% Petsmart, Inc.+ 5,593 $ 198,719 Ross Stores, Inc.+ 5,680 163,982 Abercrombie & Fitch Co. -- Class A 3,362 157,846 Williams-Sonoma, Inc.* 4,487 157,224 Michaels Stores, Inc. 5,227 156,653 Chico's FAS, Inc.*+ 3,437 156,487 Urban Outfitters, Inc.* 3,120 138,528 American Eagle Outfitters, Inc.+ 2,844 133,952 CarMax, Inc.* 4,010 124,511 Advance Auto Parts, Inc.* 2,830 123,614 O'Reilly Automotive, Inc.* 2,124 95,686 Claire's Stores, Inc. 3,815 81,069 Regis Corp. 1,712 79,009 Pacific Sunwear of California, Inc.*+ 2,861 63,686 Aeropostale, Inc.* 2,147 63,186 --------------- TOTAL SPECIALTY RETAIL 1,894,152 --------------- HOTELS RESTAURANTS & LEISURE 5.0% Mandalay Resort Group 2,601 183,188 Boyd Gaming Corp. 3,358 139,861 Outback Steakhouse, Inc. 2,840 130,015 Brinker International, Inc.*+ 3,328 116,713 GTECH Holdings Corp. 4,462 115,789 International Speedway Corp. -- Class A 2,049 108,187 Cheesecake Factory, Inc.*+ 3,001 97,443 Applebee's International, Inc. 3,125 82,656 Ruby Tuesday, Inc. 2,506 65,357 --------------- TOTAL HOTELS RESTAURANTS & LEISURE 1,039,209 --------------- MEDIA 3.4% Washington Post Co. -- Class B 329 323,414 Westwood One, Inc.*+ 3,700 99,641 Harte-Hanks, Inc. 3,286 85,370 Valassis Communications, Inc.* 1,974 69,110 Catalina Marketing Corp. 2,015 59,704 Reader's Digest Association, Inc. 3,837 53,373 --------------- TOTAL MEDIA 690,612 --------------- HOUSEHOLD DURABLES 2.0% Harman International Industries, Inc. 2,577 327,279 Tupperware Corp.+ 2,255 46,724 Blyth, Inc. 1,572 46,468 --------------- TOTAL HOUSEHOLD DURABLES 420,471 --------------- MARKET VALUE SHARES (NOTE 1) - ------------------------------------------------------------------------------ MULTILINE RETAIL 0.6% Dollar Tree Stores, Inc.*+ 4,358 $ 124,987 --------------- TOTAL MULTILINE RETAIL 124,987 --------------- AUTO COMPONENTS 0.5% Gentex Corp.+ 2,991 110,727 --------------- TOTAL AUTO COMPONENTS 110,727 --------------- TEXTILES & APPAREL 0.4% Timberland Co. -- Class A* 1,325 83,038 --------------- TOTAL TEXTILES & APPAREL 83,038 --------------- AUTOMOBILES 0.4% Thor Industries, Inc. 2,190 81,139 --------------- TOTAL AUTOMOBILES 81,139 --------------- TOTAL CONSUMER DISCRETIONARY 4,444,335 --------------- INDUSTRIALS 16.8% COMMERCIAL SERVICES & SUPPLIES 6.4% Dun & Bradstreet Corp.* 2,680 159,862 Career Education Corp.*+ 3,945 157,800 ChoicePoint, Inc.* 3,414 157,010 Education Management Corp.* 2,828 93,352 HNI Corp. 2,161 93,031 Copart, Inc.* 3,468 91,278 Brink's Co.+ 2,189 86,509 ITT Educational Services, Inc.* 1,766 83,973 Stericycle, Inc.* 1,735 79,723 Herman Miller, Inc.+ 2,722 75,209 Deluxe Corp. 1,930 72,047 Corinthian Colleges, Inc.* 3,489 65,750 Rollins, Inc. 1,756 46,218 Sotheby's Holdings, Inc. -- Class A*+ 2,448 44,456 Korn/Ferry International, Inc.* 1,505 31,229 --------------- TOTAL COMMERCIAL SERVICES & SUPPLIES 1,337,447 --------------- MACHINERY 2.8% Pentair, Inc. 3,880 169,013 Donaldson Co., Inc. 3,207 104,484 Graco, Inc. 2,667 99,612 Harsco Corp. 1,590 88,627 Crane Co. 2,110 60,852 Nordson Corp. 1,396 55,938 --------------- TOTAL MACHINERY 578,526 --------------- AIR FREIGHT & COURIERS 2.5% Expeditors International Washington, Inc.+ 4,106 229,444 C.H. Robinson Worldwide, Inc.+ 3,285 182,383 CNF, Inc. 1,990 99,699 --------------- TOTAL AIR FREIGHT & COURIERS 511,526 --------------- See Notes to Financial Statements. 112 | THE RYDEX VARIABLE TRUST ANNUAL REPORT SCHEDULE OF INVESTMENTS (CONTINUED) December 31, 2004 - -------------------------------------------------------------------------------- MID-CAP GROWTH FUND - -------------------------------------------------------------------------------- MARKET VALUE SHARES (NOTE 1) - ------------------------------------------------------------------------------ AEROSPACE & DEFENSE 1.2% Precision Castparts Corp. 2,530 $ 166,170 Alliant Techsystems, Inc.*+ 1,452 94,932 --------------- TOTAL AEROSPACE & DEFENSE 261,102 --------------- ELECTRICAL EQUIPMENT 1.0% Hubbell, Inc. -- Class B 2,351 122,957 AMETEK, Inc.+ 2,643 94,276 --------------- TOTAL ELECTRICAL EQUIPMENT 217,233 --------------- TRADING COMPANIES & DISTRIBUTORS 0.9% Fastenal Co.+ 2,926 180,125 --------------- TOTAL TRADING COMPANIES & DISTRIBUTORS 180,125 --------------- ROAD & RAIL 0.7% J.B. Hunt Transport Services, Inc. 3,131 140,425 --------------- TOTAL ROAD & RAIL 140,425 --------------- AIRLINES 0.6% JetBlue Airways Corp.*+ 3,988 92,601 AirTran Holdings, Inc.* 3,305 35,364 --------------- TOTAL AIRLINES 127,965 --------------- INDUSTRIAL CONGLOMERATES 0.4% Carlisle Cos., Inc.+ 1,203 78,099 --------------- TOTAL INDUSTRIAL CONGLOMERATES 78,099 --------------- CONSTRUCTION & ENGINEERING 0.3% Dycom Industries, Inc.* 1,870 57,072 --------------- TOTAL CONSTRUCTION & ENGINEERING 57,072 --------------- TOTAL INDUSTRIALS 3,489,520 --------------- INFORMATION TECHNOLOGY 16.0% IT CONSULTING & SERVICES 4.1% Cognizant Technology Solutions Corp.*+ 5,122 216,814 DST Systems, Inc.* 3,230 168,348 Alliance Data Systems Corp.* 3,151 149,609 Acxiom Corp. 3,326 87,474 Certegy, Inc. 2,409 85,592 Gartner, Inc. -- Class A* 4,272 53,229 Titan Corp.* 3,261 52,828 CSG Systems International, Inc.* 1,965 36,746 --------------- TOTAL IT CONSULTING & SERVICES 850,640 --------------- SEMICONDUCTOR & SEMICONDUCTOR EQUIPMENT 3.6% Microchip Technology, Inc. 7,954 212,054 Lam Research Corp.*+ 5,249 151,749 Cree, Inc.*+ 2,849 114,188 Silicon Laboratories, Inc.* 2,004 70,761 Semtech Corp.* 2,852 62,373 Integrated Circuit Systems, Inc.* 2,706 56,609 Micrel, Inc.*+ 3,473 38,272 Cabot Microelectronics Corp.* 854 34,203 --------------- MARKET VALUE SHARES (NOTE 1) - ------------------------------------------------------------------------------ TOTAL SEMICONDUCTOR & SEMICONDUCTOR EQUIPMENT $ 740,209 --------------- SOFTWARE 2.9% McAfee, Inc.* 6,176 178,672 Macromedia, Inc.* 2,737 85,175 Jack Henry & Associates, Inc.+ 3,489 69,466 Reynolds & Reynolds Co. -- Class A 2,493 66,089 RSA Security, Inc.* 2,680 53,761 Macrovision Corp.*+ 1,917 49,305 Wind River Systems, Inc.* 3,174 43,008 Transaction Systems Architects, Inc. -- Class A* 1,442 28,624 Advent Software, Inc.* 1,260 25,805 --------------- TOTAL SOFTWARE 599,905 --------------- ELECTRONIC EQUIPMENT & INSTRUMENTS 2.0% CDW Corp.+ 3,198 212,187 Amphenol Corp. -- Class A*+ 3,412 125,357 National Instruments Corp.+ 3,055 83,249 --------------- TOTAL ELECTRONIC EQUIPMENT & INSTRUMENTS 420,793 --------------- COMMUNICATIONS EQUIPMENT 1.8% Harris Corp. 2,580 159,418 Avocent Corp.* 1,917 77,677 Plantronics, Inc. 1,863 77,259 ADTRAN, Inc. 2,947 56,405 --------------- TOTAL COMMUNICATIONS EQUIPMENT 370,759 --------------- OFFICE ELECTRONICS 0.8% Zebra Technologies Corp. -- Class A* 2,764 155,558 --------------- TOTAL OFFICE ELECTRONICS 155,558 --------------- COMPUTERS & PERIPHERALS 0.7% Diebold, Inc.+ 2,754 153,480 --------------- TOTAL COMPUTERS & PERIPHERALS 153,480 --------------- INTERNET SOFTWARE & SERVICES 0.1% Retek, Inc.* 2,157 13,266 --------------- TOTAL INTERNET SOFTWARE & SERVICES 13,266 --------------- TOTAL INFORMATION TECHNOLOGY 3,304,610 --------------- HEALTH CARE 15.8% HEALTH CARE PROVIDERS & SERVICES 5.4% Patterson Cos., Inc.* 5,288 229,446 Coventry Health Care, Inc.*+ 3,457 183,498 Lincare Holdings, Inc.* 3,868 164,970 Henry Schein, Inc.* 1,670 116,299 Renal Care Group, Inc.* 2,600 93,574 Covance, Inc.* 2,407 93,271 First Health Group Corp.* 3,543 66,289 VCA Antech, Inc.* 3,162 61,975 Apria Healthcare Group, Inc.* 1,869 61,584 See Notes to Financial Statements. THE RYDEX VARIABLE TRUST ANNUAL REPORT | 113 SCHEDULE OF INVESTMENTS (CONTINUED) December 31, 2004 - -------------------------------------------------------------------------------- MID-CAP GROWTH FUND - -------------------------------------------------------------------------------- MARKET VALUE SHARES (NOTE 1) - ------------------------------------------------------------------------------ LifePoint Hospitals, Inc.*+ 1,495 $ 52,056 --------------- TOTAL HEALTH CARE PROVIDERS & SERVICES 1,122,962 --------------- HEALTH CARE EQUIPMENT & SUPPLIES 5.0% Varian Medical Systems, Inc.*+ 5,235 226,361 DENTSPLY International, Inc. 3,110 174,782 Beckman Coulter, Inc. 2,343 156,958 Hillenbrand Industries, Inc. 2,384 132,407 Cytyc Corp.* 4,301 118,579 Edwards Lifesciences Corp.* 2,288 94,403 Inamed Corp.* 1,376 87,032 Visx, Inc.* 1,908 49,360 --------------- TOTAL HEALTH CARE EQUIPMENT & SUPPLIES 1,039,882 --------------- PHARMACEUTICALS 3.5% Sepracor, Inc.*+ 4,051 240,508 Barr Pharmaceuticals, Inc.*+ 3,952 179,974 IVAX Corp.*+ 9,666 152,916 Valeant Pharmaceuticals International 3,240 85,374 Par Pharmaceutical Cos., Inc.* 1,301 53,835 --------------- TOTAL PHARMACEUTICALS 712,607 --------------- BIOTECHNOLOGY 1.9% Charles River Laboratories International, Inc.*+ 2,502 115,117 Cephalon, Inc.*+ 2,219 112,903 Protein Design Labs, Inc.*+ 3,684 76,111 Techne Corp.* 1,590 61,851 Vertex Pharmaceuticals, Inc.* 3,098 32,746 --------------- TOTAL BIOTECHNOLOGY 398,728 --------------- TOTAL HEALTH CARE 3,274,179 --------------- FINANCIALS 12.5% BANKS 4.7% Commerce Bancorp, Inc./NJ+ 3,054 196,678 TCF Financial Corp. 5,346 171,820 Associated Banc-Corp. 4,990 165,718 Bank of Hawaii Corp. 2,037 103,357 Cullen/Frost Bankers, Inc. 2,004 97,394 Wilmington Trust Corp. 2,598 93,918 Westamerica Bancorporation 1,225 71,430 Silicon Valley Bancshares* 1,386 62,121 --------------- TOTAL BANKS 962,436 --------------- CAPITAL MARKETS 3.8% Legg Mason, Inc.+ 3,880 284,249 SEI Investments Co. 3,947 165,498 Eaton Vance Corp. 2,582 134,651 Investors Financial Services Corp.+ 2,558 127,849 Waddell & Reed Financial, Inc. -- Class A 3,186 76,113 --------------- TOTAL CAPITAL MARKETS 788,360 --------------- MARKET VALUE SHARES (NOTE 1) - ------------------------------------------------------------------------------ REAL ESTATE 2.6% Developers Diversified Realty Corp.+ 4,150 $ 184,135 Weingarten Realty Investors 3,430 137,543 United Dominion Realty Trust, Inc. 5,111 126,753 Rayonier, Inc. 1,918 93,809 --------------- TOTAL REAL ESTATE 542,240 --------------- INSURANCE 1.1% Brown & Brown, Inc. 2,665 116,061 Arthur J. Gallagher & Co.+ 3,564 115,830 --------------- TOTAL INSURANCE 231,891 --------------- CONSUMER FINANCE 0.3% MoneyGram International, Inc. 3,414 72,172 --------------- TOTAL CONSUMER FINANCE 72,172 --------------- TOTAL FINANCIALS 2,597,099 ENERGY 6.5% ENERGY EQUIPMENT & SERVICES 3.7% Smith International, Inc.* 4,042 219,925 Patterson-UTI Energy, Inc. 6,448 125,414 National-Oilwell, Inc.* 3,310 116,810 Varco International, Inc.* 3,770 109,895 Grant Prideco, Inc.* 4,756 95,358 FMC Technologies, Inc.* 2,631 84,718 --------------- TOTAL ENERGY EQUIPMENT & SERVICES 752,120 --------------- OIL & GAS 2.8% Murphy Oil Corp. 3,544 285,115 Noble Energy, Inc. 2,270 139,968 Western Gas Resources, Inc. 2,850 83,363 Plains Exploration & Production Co.* 2,970 77,220 --------------- TOTAL OIL & GAS 585,666 --------------- TOTAL ENERGY 1,337,786 --------------- MATERIALS 4.1% CHEMICALS 2.2% Lyondell Chemical Co.+ 9,312 269,303 Airgas, Inc. 2,890 76,614 Olin Corp. 2,708 59,630 Crompton Corp. 4,420 52,156 --------------- TOTAL CHEMICALS 457,703 --------------- METALS & MINING 1.4% Peabody Energy Corp. 2,490 201,466 Arch Coal, Inc.+ 2,400 85,296 --------------- TOTAL METALS & MINING 286,762 --------------- CONTAINERS & PACKAGING 0.5% Packaging Corporation of America 4,118 96,979 --------------- TOTAL CONTAINERS & PACKAGING 96,979 --------------- TOTAL MATERIALS 841,444 --------------- See Notes to Financial Statements. 114 | THE RYDEX VARIABLE TRUST ANNUAL REPORT SCHEDULE OF INVESTMENTS (CONCLUDED) December 31, 2004 - -------------------------------------------------------------------------------- MID-CAP GROWTH FUND - -------------------------------------------------------------------------------- MARKET VALUE SHARES (NOTE 1) - ------------------------------------------------------------------------------ CONSUMER STAPLES 3.6% FOOD PRODUCTS 1.4% Hormel Foods Corp. 5,344 $ 167,534 Tootsie Roll Industries, Inc. 2,016 69,814 Lancaster Colony Corp. 1,350 57,875 --------------- TOTAL FOOD PRODUCTS 295,223 --------------- FOOD & DRUG RETAILING 1.1% Whole Foods Market, Inc.+ 2,396 228,458 --------------- TOTAL FOOD & DRUG RETAILING 228,458 --------------- HOUSEHOLD PRODUCTS 1.1% Energizer Holdings, Inc.*+ 2,792 138,735 Church & Dwight Co., Inc. 2,404 80,822 --------------- TOTAL HOUSEHOLD PRODUCTS 219,557 --------------- TOTAL CONSUMER STAPLES 743,238 --------------- UTILITIES 2.5% MULTI-UTILITIES 1.5% Questar Corp. 3,250 165,620 Equitable Resources, Inc. 2,364 143,400 --------------- TOTAL MULTI-UTILITIES 309,020 --------------- ELECTRIC UTILITIES 0.6% DPL, Inc. 4,877 122,462 --------------- TOTAL ELECTRIC UTILITIES 122,462 --------------- WATER UTILITIES 0.4% Aqua America, Inc. 3,597 88,450 --------------- TOTAL WATER UTILITIES 88,450 --------------- TOTAL UTILITIES 519,932 --------------- TELECOMMUNICATION SERVICES 0.2% DIVERSIFIED TELECOMMUNICATION SERVICES 0.2% Cincinnati Bell, Inc.* 9,451 39,222 --------------- TOTAL DIVERSIFIED TELECOMMUNICATION SERVICES 39,222 --------------- TOTAL TELECOMMUNICATION SERVICES 39,222 --------------- TOTAL COMMON STOCKS (Cost $19,176,189) 20,591,365 --------------- MARKET FACE VALUE AMOUNT (NOTE 1) - ------------------------------------------------------------------------------ REPURCHASE AGREEMENT 0.4% Repurchase Agreement (Note 5) 1.55% due 01/03/05 $ 92,528 $ 92,528 --------------- TOTAL REPURCHASE AGREEMENT (Cost $92,528) 92,528 --------------- SECURITIES LENDING COLLATERAL 9.8% Investment in Securities Lending Short Term Investment Portfolio held by U.S. Bank (Note 8) 2,031,814 2,031,814 --------------- TOTAL SECURITIES LENDING COLLATERAL (Cost $2,031,814) 2,031,814 --------------- TOTAL INVESTMENTS 109.7% (Cost $21,300,531) $ 22,715,707 =============== LIABILITIES IN EXCESS OF OTHER ASSETS - (9.7)% $ (2,013,675) =============== NET ASSETS - 100.0% $ 20,702,032 * NON-INCOME PRODUCING SECURITIES. + ALL OR A PORTION OF THIS SECURITY IS ON LOAN AT DECEMBER 31, 2004 - SEE NOTE 8. See Notes to Financial Statements. THE RYDEX VARIABLE TRUST ANNUAL REPORT | 115 SCHEDULE OF INVESTMENTS December 31, 2004 - -------------------------------------------------------------------------------- LARGE-CAP GROWTH FUND - -------------------------------------------------------------------------------- MARKET VALUE SHARES (NOTE 1) - ------------------------------------------------------------------------------ COMMON STOCKS 99.5% INFORMATION TECHNOLOGY 24.2% SOFTWARE 8.1% Microsoft Corp. 39,041 $ 1,042,785 Oracle Corp.* 18,418 252,695 Computer Associates International, Inc.+ 2,100 65,226 Electronic Arts, Inc.*+ 1,033 63,715 Symantec Corp.*+ 2,276 58,630 Adobe Systems, Inc. 808 50,694 Autodesk, Inc. 780 29,601 Intuit, Inc.* 639 28,122 Citrix Systems, Inc.*+ 572 14,031 Mercury Interactive Corp.*+ 291 13,255 Parametric Technology Corp.*+ 913 5,378 --------------- TOTAL SOFTWARE 1,624,132 --------------- COMPUTERS & PERIPHERALS 5.7% International Business Machines Corp. 5,974 588,917 Dell, Inc.* 8,916 375,720 Apple Computer, Inc.* 1,360 87,584 Network Appliance, Inc.*+ 1,214 40,329 Lexmark International, Inc.* 435 36,975 QLogic Corp.*+ 320 11,754 Gateway, Inc.* 1,260 7,573 --------------- TOTAL COMPUTERS & PERIPHERALS 1,148,852 --------------- COMMUNICATIONS EQUIPMENT 4.3% Cisco Systems, Inc.* 23,642 456,291 Qualcomm, Inc. 5,882 249,397 Lucent Technologies, Inc.*+ 15,869 59,667 Corning, Inc.*+ 5,030 59,203 Avaya, Inc.*+ 1,544 26,557 --------------- TOTAL COMMUNICATIONS EQUIPMENT 851,115 --------------- SEMICONDUCTOR & SEMICONDUCTOR EQUIPMENT 3.8% Intel Corp. 22,712 531,234 Analog Devices, Inc.+ 1,275 47,073 Maxim Integrated Products, Inc. 1,097 46,502 Linear Technology Corp. 1,043 40,427 Broadcom Corp. -- Class A*+ 1,113 35,928 Xilinx, Inc. 1,182 35,046 Altera Corp.*+ 1,248 25,833 PMC - Sierra, Inc.*+ 600 6,750 --------------- TOTAL SEMICONDUCTOR & SEMICONDUCTOR EQUIPMENT 768,793 --------------- IT CONSULTING & SERVICES 1.3% First Data Corp. 2,986 127,025 Automatic Data Processing, Inc. 1,964 87,103 MARKET VALUE SHARES (NOTE 1) - ------------------------------------------------------------------------------ Paychex, Inc. 1,275 $ 43,452 --------------- TOTAL IT CONSULTING & SERVICES 257,580 --------------- INTERNET SOFTWARE & SERVICES 0.9% Yahoo!, Inc.*+ 4,933 185,875 --------------- TOTAL INTERNET SOFTWARE & SERVICES 185,875 --------------- ELECTRONIC EQUIPMENT & INSTRUMENTS 0.1% Symbol Technologies, Inc. 818 14,151 --------------- TOTAL ELECTRONIC EQUIPMENT & INSTRUMENTS 14,151 --------------- TOTAL INFORMATION TECHNOLOGY 4,850,498 --------------- CONSUMER STAPLES 18.3% FOOD & DRUG RETAILING 5.1% Wal-Mart Stores, Inc. 15,205 803,128 Walgreen Co. 3,674 140,971 Sysco Corp. 2,297 87,677 --------------- TOTAL FOOD & DRUG RETAILING 1,031,776 --------------- BEVERAGES 4.3% Coca-Cola Co. 8,689 361,723 PepsiCo, Inc. 6,046 315,601 Anheuser-Busch Cos., Inc. 2,839 144,022 Pepsi Bottling Group, Inc. 848 22,930 Brown-Forman Corp. -- Class B 410 19,959 --------------- TOTAL BEVERAGES 864,235 --------------- HOUSEHOLD PRODUCTS 3.7% Procter & Gamble Co. 9,106 501,559 Kimberly-Clark Corp. 1,651 108,652 Colgate-Palmolive Co. 1,795 91,832 Clorox Co. 514 30,290 --------------- TOTAL HOUSEHOLD PRODUCTS 732,333 --------------- TOBACCO 2.4% Altria Group, Inc.+ 7,377 450,735 UST, Inc.+ 559 26,893 --------------- TOTAL TOBACCO 477,628 --------------- FOOD PRODUCTS 1.7% Sara Lee Corp. 2,814 67,930 Kellogg Co. 1,398 62,435 WM Wrigley Jr Co. 758 52,446 Hershey Foods Corp. 833 46,265 H.J. Heinz Co. 1,186 46,242 Campbell Soup Co.+ 1,386 41,427 McCormick & Co., Inc.+ 463 17,872 --------------- TOTAL FOOD PRODUCTS 334,617 --------------- PERSONAL PRODUCTS 1.1% Gillette Co. 3,561 159,462 Avon Products, Inc.+ 1,587 61,417 --------------- TOTAL PERSONAL PRODUCTS 220,879 --------------- TOTAL CONSUMER STAPLES 3,661,468 --------------- See Notes to Financial Statements. 116 | THE RYDEX VARIABLE TRUST ANNUAL REPORT SCHEDULE OF INVESTMENTS (CONTINUED) December 31, 2004 - -------------------------------------------------------------------------------- LARGE-CAP GROWTH FUND - -------------------------------------------------------------------------------- MARKET VALUE SHARES (NOTE 1) - -------------------------------------------------------------------------------- HEALTH CARE 17.6% PHARMACEUTICALS 10.0% Johnson & Johnson, Inc. 10,652 $ 675,550 Abbott Laboratories 5,588 260,680 Merck & Co., Inc. 7,959 255,802 Eli Lilly & Co. 4,059 230,348 Wyeth 4,793 204,134 Bristol-Myers Squibb Co.+ 6,984 178,930 Schering-Plough Corp.+ 5,290 110,455 Forest Laboratories, Inc.*+ 1,249 56,030 Allergan, Inc. 447 36,239 --------------- TOTAL PHARMACEUTICALS 2,008,168 --------------- HEALTH CARE EQUIPMENT & SUPPLIES 4.1% Medtronic, Inc. 4,341 215,617 Boston Scientific Corp.* 3,034 107,859 Guidant Corp. 1,081 77,940 Baxter International, Inc. 2,214 76,472 Zimmer Holdings, Inc.* 835 66,900 Stryker Corp. 1,360 65,620 St. Jude Medical, Inc.* 1,210 50,735 Becton, Dickinson & Co. 861 48,905 Biomet, Inc. 858 37,229 C.R. Bard, Inc. 359 22,969 Waters Corp.* 408 19,090 Hospira, Inc.* 530 17,755 Millipore Corp.* 173 8,617 --------------- TOTAL HEALTH CARE EQUIPMENT & SUPPLIES 815,708 --------------- BIOTECHNOLOGY 2.1% Amgen, Inc.*+ 4,559 292,460 Gilead Sciences, Inc.* 1,459 51,051 Genzyme Corp.* 840 48,779 Medimmune, Inc.* 840 22,772 --------------- TOTAL BIOTECHNOLOGY 415,062 --------------- HEALTH CARE PROVIDERS & SERVICES 1.4% UnitedHealth Group, Inc.+ 2,347 206,606 Quest Diagnostics, Inc. 350 33,443 Express Scripts, Inc.*+ 261 19,951 IMS Health, Inc. 783 18,173 --------------- TOTAL HEALTH CARE PROVIDERS & SERVICES 278,173 --------------- TOTAL HEALTH CARE 3,517,111 --------------- INDUSTRIALS 15.5% INDUSTRIAL CONGLOMERATES 8.1% General Electric Co. 37,961 1,385,576 3M Co.+ 2,797 229,550 --------------- TOTAL INDUSTRIAL CONGLOMERATES 1,615,126 --------------- MARKET VALUE SHARES (NOTE 1) - ------------------------------------------------------------------------------ AEROSPACE & DEFENSE 2.2% United Technologies Corp. 1,716 $ 177,348 Boeing Co. 3,014 156,035 Lockheed Martin Corp. 1,500 83,325 Rockwell Collins, Inc.+ 600 23,664 --------------- TOTAL AEROSPACE & DEFENSE 440,372 --------------- AIR FREIGHT & COURIERS 1.7% United Parcel Service, Inc. -- Class B+ 4,025 343,977 --------------- TOTAL AIR FREIGHT & COURIERS 343,977 --------------- MACHINERY 1.6% Caterpillar, Inc. 1,149 112,039 Illinois Tool Works, Inc.+ 1,000 92,680 Danaher Corp.+ 1,048 60,166 Paccar, Inc. 590 47,483 Navistar International Corp.* 236 10,379 --------------- TOTAL MACHINERY 322,747 --------------- COMMERCIAL SERVICES & SUPPLIES 1.0% Apollo Group, Inc. -- Class A*+ 627 50,605 Pitney Bowes, Inc. 786 36,376 H&R Block, Inc. 559 27,391 Cintas Corp.+ 583 25,571 Avery Dennison Corp. 373 22,369 Robert Half International, Inc. 584 17,187 Monster Worldwide, Inc.* 408 13,725 Equifax, Inc. 460 12,926 --------------- TOTAL COMMERCIAL SERVICES & SUPPLIES 206,150 --------------- ELECTRICAL EQUIPMENT 0.7% Emerson Electric Co. 1,422 99,682 Rockwell Automation, Inc. 620 30,721 --------------- TOTAL ELECTRICAL EQUIPMENT 130,403 --------------- BUILDING PRODUCTS 0.1% American Standard Cos., Inc.* 731 30,205 --------------- TOTAL BUILDING PRODUCTS 30,205 --------------- CONSTRUCTION & ENGINEERING 0.1% Fluor Corp. 290 15,808 --------------- TOTAL CONSTRUCTION & ENGINEERING 15,808 --------------- AIRLINES 0.0% Delta Air Lines, Inc.*+ 443 3,314 --------------- TOTAL AIRLINES 3,314 --------------- TOTAL INDUSTRIALS 3,108,102 --------------- CONSUMER DISCRETIONARY 10.2% SPECIALTY RETAIL 4.2% Home Depot, Inc. 7,882 336,877 Lowe's Cos., Inc.+ 2,775 159,812 The Gap, Inc.+ 3,146 66,444 See Notes to Financial Statements. THE RYDEX VARIABLE TRUST ANNUAL REPORT | 117 SCHEDULE OF INVESTMENTS (CONTINUED) December 31, 2004 - -------------------------------------------------------------------------------- LARGE-CAP GROWTH FUND - -------------------------------------------------------------------------------- MARKET VALUE SHARES (NOTE 1) - ------------------------------------------------------------------------------ Best Buy Co., Inc. 1,097 $ 65,184 Staples, Inc. 1,673 56,397 TJX Cos., Inc.+ 1,618 40,660 Bed Bath & Beyond, Inc.* 1,018 40,547 AutoZone, Inc.* 275 25,110 Sherwin-Williams Co. 480 21,422 RadioShack Corp.+ 535 17,591 --------------- TOTAL SPECIALTY RETAIL 830,044 --------------- INTERNET & CATALOG RETAIL 1.4% eBay, Inc.*+ 2,384 277,212 --------------- TOTAL INTERNET & CATALOG RETAIL 277,212 --------------- HOTELS RESTAURANTS & LEISURE 1.2% Starbucks Corp.* 1,347 83,999 Marriott International, Inc. -- Class A 760 47,865 Yum! Brands, Inc.+ 989 46,661 International Game Technology, Inc. 1,162 39,949 Harrah's Entertainment, Inc. 380 25,418 --------------- TOTAL HOTELS RESTAURANTS & LEISURE 243,892 --------------- MULTILINE RETAIL 1.0% Target Corp. 3,220 167,215 Dollar General Corp. 1,110 23,055 Family Dollar Stores, Inc.+ 571 17,832 --------------- TOTAL MULTILINE RETAIL 208,102 --------------- MEDIA 0.9% McGraw-Hill Cos., Inc. 645 59,043 Omnicom Group 637 53,712 New York Times Co. -- Class A+ 497 20,278 Knight-Ridder, Inc. 261 17,471 Dow Jones & Co., Inc. 284 12,229 Meredith Corp. 173 9,377 --------------- TOTAL MEDIA 172,110 --------------- TEXTILES & APPAREL 0.6% Nike, Inc. -- Class B 887 80,442 Coach, Inc.* 644 36,322 --------------- TOTAL TEXTILES & APPAREL 116,764 --------------- HOUSEHOLD DURABLES 0.5% Fortune Brands, Inc. 485 37,432 Black & Decker Corp.+ 273 24,114 Newell Rubbermaid, Inc.+ 930 22,497 Stanley Works 280 13,717 Maytag Corp. 272 5,739 --------------- TOTAL HOUSEHOLD DURABLES 103,499 --------------- MARKET VALUE SHARES (NOTE 1) - ------------------------------------------------------------------------------ AUTOMOBILES 0.3% Harley-Davidson, Inc. 990 $ 60,142 --------------- TOTAL AUTOMOBILES 60,142 --------------- LEISURE EQUIPMENT & PRODUCTS 0.1% Mattel, Inc. 1,400 27,286 --------------- TOTAL LEISURE EQUIPMENT & PRODUCTS 27,286 --------------- AUTO COMPONENTS 0.0% Goodyear Tire & Rubber Co.*+ 600 8,796 --------------- TOTAL AUTO COMPONENTS 8,796 --------------- TOTAL CONSUMER DISCRETIONARY 2,047,847 --------------- ENERGY 7.5% OIL & GAS 6.1% Exxon Mobil Corp. 23,170 1,187,694 XTO Energy, Inc. 880 31,134 --------------- TOTAL OIL & GAS 1,218,828 --------------- ENERGY EQUIPMENT & SERVICES 1.4% Schlumberger Ltd. 2,113 141,465 Halliburton Co. 1,496 58,703 Baker Hughes, Inc. 1,130 48,217 BJ Services Co.+ 547 25,458 --------------- TOTAL ENERGY EQUIPMENT & SERVICES 273,843 --------------- TOTAL ENERGY 1,492,671 --------------- MATERIALS 2.7% CHEMICALS 2.3% EI Du Pont de Nemours & Co. 3,569 175,059 Dow Chemical Co. 3,390 167,839 Praxair, Inc. 1,097 48,433 Ecolab, Inc.+ 870 30,563 Sigma-Aldrich Corp. 236 14,269 International Flavors & Fragrances, Inc. 322 13,794 Hercules, Inc.*+ 384 5,702 --------------- TOTAL CHEMICALS 455,659 --------------- CONTAINERS & PACKAGING 0.2% Ball Corp. 384 16,888 Sealed Air Corp.*+ 285 15,182 Pactiv Corp.* 509 12,873 --------------- TOTAL CONTAINERS & PACKAGING 44,943 --------------- METALS & MINING 0.2% Freeport-McMoRan Copper & Gold, Inc. -- Class B+ 602 23,015 Allegheny Technologies, Inc.+ 323 6,999 --------------- TOTAL METALS & MINING 30,014 --------------- TOTAL MATERIALS 530,616 --------------- See Notes to Financial Statements. 118 | THE RYDEX VARIABLE TRUST ANNUAL REPORT SCHEDULE OF INVESTMENTS (CONCLUDED) December 31, 2004 - -------------------------------------------------------------------------------- LARGE-CAP GROWTH FUND - -------------------------------------------------------------------------------- MARKET VALUE SHARES (NOTE 1) - ------------------------------------------------------------------------------ FINANCIALS 2.3% CONSUMER FINANCE 1.7% American Express Co. 4,512 $ 254,341 SLM Corp. 1,443 77,042 --------------- TOTAL CONSUMER FINANCE 331,383 --------------- REAL ESTATE 0.2% Simon Property Group, Inc.+ 746 48,244 --------------- TOTAL REAL ESTATE 48,244 --------------- DIVERSIFIED FINANCIALS 0.2% Moody's Corp. 507 44,033 --------------- TOTAL DIVERSIFIED FINANCIALS 44,033 --------------- CAPITAL MARKETS 0.2% T. Rowe Price Group, Inc. 434 26,994 Federated Investors, Inc. -- Class B 362 11,005 --------------- TOTAL CAPITAL MARKETS 37,999 --------------- TOTAL FINANCIALS 461,659 --------------- TELECOMMUNICATION SERVICES 0.7% WIRELESS TELECOMMUNICATION SERVICES 0.6% Nextel Communications, Inc. -- Class A* 3,988 119,640 --------------- TOTAL WIRELESS TELECOMMUNICATION SERVICES 119,640 --------------- DIVERSIFIED TELECOMMUNICATION SERVICES 0.1% Qwest Communications International, Inc.* 6,516 28,931 --------------- TOTAL DIVERSIFIED TELECOMMUNICATION SERVICES 28,931 --------------- TOTAL TELECOMMUNICATION SERVICES 148,571 --------------- UTILITIES 0.5% ELECTRIC UTILITIES 0.3% TXU Corp. 810 52,294 CenterPoint Energy, Inc. 1,040 11,752 --------------- TOTAL ELECTRIC UTILITIES 64,046 --------------- MULTI-UTILITIES 0.2% AES Corp.* 2,332 31,878 --------------- TOTAL MULTI-UTILITIES 31,878 --------------- TOTAL UTILITIES 95,924 --------------- TOTAL COMMON STOCKS (Cost $18,887,636) 19,914,467 --------------- MARKET FACE VALUE AMOUNT (NOTE 1) - ------------------------------------------------------------------------------ REPURCHASE AGREEMENT 0.5% Repurchase Agreement (Note 5) 1.55% due 01/03/05 $ 98,342 $ 98,342 --------------- TOTAL REPURCHASE AGREEMENT (Cost $98,342) 98,342 --------------- SECURITIES LENDING COLLATERAL 7.2% Investment in Securities Lending Short Term Investment Portfolio Held by U.S. Bank (Note 8) 1,446,609 1,446,609 --------------- TOTAL SECURITIES LENDING COLLATERAL (Cost $1,446,609) 1,446,609 --------------- TOTAL INVESTMENTS 107.2% (Cost $20,432,587) $ 21,459,418 =============== LIABILITIES IN EXCESS OF OTHER ASSETS - (7.2)% $ (1,447,694) =============== NET ASSETS - 100.0% $ 20,011,724 * NON-INCOME PRODUCING SECURITIES. + ALL OR A PORTION OF THIS SECURITY IS ON LOAN AT DECEMBER 31, 2004 - SEE NOTE 8. See Notes to Financial Statements. THE RYDEX VARIABLE TRUST ANNUAL REPORT | 119 SCHEDULE OF INVESTMENTS December 31, 2004 - -------------------------------------------------------------------------------- SECTOR ROTATION FUND - -------------------------------------------------------------------------------- MARKET VALUE SHARES (NOTE 1) - ------------------------------------------------------------------------------ COMMON STOCKS 94.1% INDUSTRIALS 42.2% BUILDING PRODUCTS 7.6% Masco Corp.+ 17,200 $ 628,316 American Standard Cos., Inc.* 10,400 429,728 USG Corp.*+ 6,700 269,809 Simpson Manufacturing Co., Inc. 5,800 202,420 Lennox International, Inc. 8,201 166,890 York International Corp.+ 4,501 155,465 Griffon Corp.*+ 5,200 140,400 NCI Building Systems, Inc.* 3,300 123,750 --------------- TOTAL BUILDING PRODUCTS 2,116,778 --------------- CONSTRUCTION & ENGINEERING 7.5% Fluor Corp. 5,600 305,256 Jacobs Engineering Group, Inc.* 4,900 234,171 Chicago Bridge & Iron NV Co. 5,101 204,040 URS Corp.* 5,500 176,550 Dycom Industries, Inc.*+ 5,600 170,912 McDermott International, Inc.* 8,900 163,404 Shaw Group, Inc.*+ 8,800 157,080 Washington Group International, Inc.* 3,700 152,625 Granite Construction, Inc. 5,600 148,960 Quanta Services, Inc.* 17,300 138,400 EMCOR Group, Inc.* 2,700 121,986 Insituform Technologies, Inc. -- Class A* 4,700 106,549 --------------- TOTAL CONSTRUCTION & ENGINEERING 2,079,933 --------------- ROAD & RAIL 7.1% Canadian National Railway Co. 4,100 251,125 Burlington Northern Santa Fe Corp. 5,200 246,012 Union Pacific Corp. 3,500 235,375 Norfolk Southern Corp. 6,000 217,140 CSX Corp. 4,200 168,336 Canadian Pacific Railway Ltd. 4,000 137,640 J.B. Hunt Transport Services, Inc. 2,400 107,640 Laidlaw International, Inc.* 4,200 89,880 Yellow Roadway Corp.*+ 1,600 89,136 Werner Enterprises, Inc. 3,600 81,504 Landstar System, Inc.* 1,100 81,004 Heartland Express, Inc. 3,400 76,398 Swift Transportation Co., Inc.* 3,500 75,180 Knight Transportation, Inc. 2,600 64,480 Sirva, Inc.* 2,836 54,508 --------------- TOTAL ROAD & RAIL 1,975,358 --------------- MARKET VALUE SHARES (NOTE 1) - ------------------------------------------------------------------------------ TRADING COMPANIES & DISTRIBUTORS 6.9% W.W. Grainger, Inc. 7,600 $ 506,312 Fastenal Co.+ 6,600 406,296 MSC Industrial Direct Co. -- Class A 9,000 323,820 Hughes Supply, Inc.+ 8,300 268,505 Watsco, Inc. 5,700 200,754 Applied Industrial Technologies, Inc. 7,200 197,280 --------------- TOTAL TRADING COMPANIES & DISTRIBUTORS 1,902,967 --------------- MACHINERY 6.6% Caterpillar, Inc.+ 2,100 204,771 Illinois Tool Works, Inc. 2,000 185,360 Danaher Corp.+ 2,700 155,007 Deere & Co.+ 2,000 148,800 Volvo AB - SP ADR 3,700 146,705 Ingersoll-Rand Co. -- Class A 1,700 136,510 Paccar, Inc. 1,600 128,768 Eaton Corp.+ 1,700 123,012 Parker Hannifin Corp. 1,400 106,036 Dover Corp. 2,500 104,850 ITT Industries, Inc. 1,200 101,340 Pentair, Inc. 1,800 78,408 Pall Corp. 2,600 75,270 Cummins, Inc. 800 67,032 SPX Corp.+ 1,500 60,090 --------------- TOTAL MACHINERY 1,821,959 --------------- AIR FREIGHT & COURIERS 6.5% United Parcel Service, Inc. -- Class B+ 7,700 658,042 FedEx Corp.+ 3,800 374,262 Expeditors International Washington, Inc.+ 2,800 156,464 C.H. Robinson Worldwide, Inc.+ 2,600 144,352 Ryder System, Inc. 2,300 109,871 CNF, Inc. 2,000 100,200 UTI Worldwide, Inc. 1,200 81,624 EGL, Inc.* 2,400 71,736 Pacer International, Inc.* 2,800 59,528 Forward Air Corp.* 1,300 58,110 --------------- TOTAL AIR FREIGHT & COURIERS 1,814,189 --------------- TOTAL INDUSTRIALS 11,711,184 --------------- CONSUMER DISCRETIONARY 15.9% HOTELS RESTAURANTS & LEISURE 9.1% Starbucks Corp.*+ 4,830 301,199 Carnival Corp.+ 5,050 291,031 McDonald's Corp. 8,330 267,060 See Notes to Financial Statements. 120 | THE RYDEX VARIABLE TRUST ANNUAL REPORT SCHEDULE OF INVESTMENTS (CONTINUED) December 31, 2004 - -------------------------------------------------------------------------------- SECTOR ROTATION FUND - -------------------------------------------------------------------------------- MARKET VALUE SHARES (NOTE 1) - ------------------------------------------------------------------------------ Marriott International, Inc. -- Class A 3,050 $ 192,089 Starwood Hotels & Resorts Worldwide, Inc.+ 3,220 188,048 Royal Caribbean Cruises Ltd.+ 3,370 183,463 Yum! Brands, Inc.+ 3,720 175,509 MGM Mirage, Inc.*+ 2,210 160,755 Hilton Hotels Corp. 6,840 155,542 International Game Technology, Inc. 4,170 143,365 Harrah's Entertainment, Inc.+ 1,900 127,091 Darden Restaurants, Inc. 3,670 101,806 Wendy's International, Inc. 2,330 91,476 Outback Steakhouse, Inc. 1,600 73,248 Brinker International, Inc.*+ 1,900 66,633 --------------- TOTAL HOTELS RESTAURANTS & LEISURE 2,518,315 --------------- INTERNET & CATALOG RETAIL 6.8% eBay, Inc.*+ 6,500 755,820 InterActiveCorp*+ 14,300 394,966 Amazon.com, Inc.*+ 8,500 376,465 Coldwater Creek, Inc.* 3,300 101,871 Overstock.com, Inc.* 1,300 89,700 Insight Enterprises, Inc.* 4,300 88,236 Priceline.com, Inc.*+ 3,300 77,847 --------------- TOTAL INTERNET & CATALOG RETAIL 1,884,905 --------------- TOTAL CONSUMER DISCRETIONARY 4,403,220 --------------- ENERGY 14.1% OIL & GAS 7.1% Exxon Mobil Corp. 5,300 271,678 BP PLC - SP ADR 3,600 210,240 Total SA - SP ADR+ 1,600 175,744 Royal Dutch Petroleum Co.+ 2,800 160,664 ENI-Ente Nazionale Idrocarburi - SP ADR+ 1,200 151,008 ChevronTexaco Corp.+ 2,800 147,028 PetroChina Co. Ltd. - SP ADR 2,600 139,594 Shell Transport & Trading Co. PLC - SP ADR 2,500 128,500 ConocoPhillips 1,200 104,196 Petroleo Brasiliero SA - Petrobras 2,600 103,428 China Petroleum & Chemical Corp. - SP ADR 2,000 81,980 Repsol YPF SA - SP ADR 3,100 80,910 EnCana Corp. 1,400 79,884 Imperial Oil Ltd. 1,100 65,340 Occidental Petroleum Corp. 1,100 64,196 --------------- TOTAL OIL & GAS 1,964,390 --------------- MARKET VALUE SHARES (NOTE 1) - ------------------------------------------------------------------------------ ENERGY EQUIPMENT & SERVICES 7.0% Schlumberger Ltd.+ 4,200 $ 281,190 Halliburton Co. 5,200 204,048 Transocean, Inc.*+ 4,400 186,516 Baker Hughes, Inc.+ 4,000 170,680 GlobalSantaFe Corp.+ 3,900 129,129 Tenaris SA - SP ADR 2,500 122,250 BJ Services Co.+ 2,600 121,004 Diamond Offshore Drilling, Inc.+ 3,000 120,150 Weatherford International Ltd.*+ 2,300 117,990 Smith International, Inc.* 1,800 97,938 ENSCO International, Inc. 3,000 95,220 Precision Drilling Corp.* 1,400 87,920 Patterson-UTI Energy, Inc. 4,100 79,745 Nabors Industries Ltd.* 1,400 71,806 Noble Corp.*+ 1,400 69,636 --------------- TOTAL ENERGY EQUIPMENT & SERVICES 1,955,222 --------------- TOTAL ENERGY 3,919,612 --------------- INFORMATION TECHNOLOGY 8.7% INTERNET SOFTWARE & SERVICES 8.2% Yahoo!, Inc.*+ 31,172 1,174,561 VeriSign, Inc.*+ 11,560 387,491 WebEx Communications, Inc.*+ 6,470 153,856 EarthLink, Inc.*+ 12,250 141,120 RealNetworks, Inc.*+ 13,830 91,555 Open Text Corp.* 4,160 83,408 DoubleClick, Inc.*+ 9,570 74,455 PEC Solutions, Inc.* 4,420 62,631 Ariba, Inc.* 3,763 62,466 United Online, Inc.* 4,840 55,805 --------------- TOTAL INTERNET SOFTWARE & SERVICES 2,287,348 --------------- SOFTWARE 0.5% Internet Security Systems, Inc.* 5,640 131,130 --------------- TOTAL SOFTWARE 131,130 --------------- TOTAL INFORMATION TECHNOLOGY 2,418,478 --------------- MATERIALS 6.7% CHEMICALS 6.7% EI Du Pont de Nemours & Co. 4,900 240,345 Dow Chemical Co. 4,400 217,844 BASF AG - SP ADR+ 3,000 216,060 Monsanto Co. 2,400 133,320 Praxair, Inc. 2,700 119,205 Air Products & Chemicals, Inc. 2,000 115,940 Akzo Nobel NV - SP ADR 2,600 110,474 PPG Industries, Inc. 1,600 109,056 Syngenta AG - SP ADR* 5,000 106,750 See Notes to Financial Statements. THE RYDEX VARIABLE TRUST ANNUAL REPORT | 121 SCHEDULE OF INVESTMENTS (CONCLUDED) December 31, 2004 - -------------------------------------------------------------------------------- SECTOR ROTATION FUND - -------------------------------------------------------------------------------- MARKET VALUE SHARES (NOTE 1) - ------------------------------------------------------------------------------ Ecolab, Inc.+ 2,900 $ 101,877 Rohm & Haas Co.+ 2,200 97,306 Potash Corp. Of Saskatchewan+ 1,100 91,366 Lyondell Chemical Co.+ 2,400 69,408 Eastman Chemical Co.+ 1,100 63,503 Sigma-Aldrich Corp.+ 1,000 60,460 --------------- TOTAL CHEMICALS 1,852,914 --------------- TOTAL MATERIALS 1,852,914 --------------- UTILITIES 6.5% ELECTRIC UTILITIES 6.5% E.ON AG - SP ADR 2,600 236,600 Exelon Corp.+ 3,700 163,059 Southern Co.+ 4,400 147,488 Korea Electric Power Corp. - SP ADR+ 9,600 127,104 TXU Corp.+ 1,900 122,664 Entergy Corp.+ 1,700 114,903 FPL Group, Inc.+ 1,500 112,125 PG&E Corp.*+ 3,200 106,496 Scottish Power PLC - SP ADR 3,400 105,944 American Electric Power Co., Inc.+ 3,000 103,020 FirstEnergy Corp. 2,600 102,726 Progress Energy, Inc.+ 2,100 95,004 Edison International 2,900 92,887 PPL Corp. 1,700 90,576 Consolidated Edison, Inc. 2,000 87,500 --------------- TOTAL ELECTRIC UTILITIES 1,808,096 --------------- TOTAL UTILITIES 1,808,096 --------------- TOTAL COMMON STOCKS (Cost $22,144,698) 26,113,504 --------------- MARKET FACE VALUE AMOUNT (NOTE 1) - ------------------------------------------------------------------------------ REPURCHASE AGREEMENT 6.1% Repurchase Agreement (Note 5) 1.55% due 01/03/05 $ 1,691,604 $ 1,691,604 --------------- TOTAL REPURCHASE AGREEMENT (Cost $1,691,604) 1,691,604 --------------- SECURITIES LENDING COLLATERAL 22.0% Investment in Securities Lending Short Term Investment Portfolio Held by U.S. Bank (Note 8) 6,101,785 6,101,785 --------------- TOTAL SECURITIES LENDING COLLATERAL (Cost $6,101,785) 6,101,785 --------------- TOTAL INVESTMENTS 122.2% (Cost $29,938,087) $ 33,906,893 =============== LIABILITIES IN EXCESS OF OTHER ASSETS - (22.2)% $ (6,159,451) =============== NET ASSETS - 100.0% $ 27,747,442 * NON-INCOME PRODUCING SECURITIES. + ALL OR A PORTION OF THIS SECURITY IS ON LOAN AT DECEMBER 31, 2004 - SEE NOTE 8. ADR--AMERICAN DEPOSITORY RECEIPT. See Notes to Financial Statements. 122 | THE RYDEX VARIABLE TRUST ANNUAL REPORT SCHEDULE OF INVESTMENTS December 31, 2004 - -------------------------------------------------------------------------------- U.S. GOVERNMENT MONEY MARKET FUND - -------------------------------------------------------------------------------- MARKET FACE VALUE AMOUNT (NOTE 1) - ------------------------------------------------------------------------------ FEDERAL AGENCY DISCOUNT NOTES 63.8% Fannie Mae* 2.20% due 04/27/05 $ 25,000,000 $ 24,825,833 Farmer Mac* 2.00% due 02/28/05 12,200,000 12,162,044 2.10% due 01/11/05 10,000,000 9,995,333 Federal Farm Credit Bank* 2.12% due 01/12/05 10,000,000 9,994,700 Federal Home Loan Bank* 1.94% due 01/14/05 25,000,000 24,985,181 Freddie Mac* 1.93% due 01/04/05 25,000,000 24,998,660 --------------- TOTAL FEDERAL AGENCY DISCOUNT NOTES (Cost $106,961,751) 106,961,751 --------------- REPURCHASE AGREEMENTS 43.7% Repurchase Agreement (Note 5) 1.55% due 01/03/05 18,233,995 18,233,995 1.48% due 01/03/05 36,987,003 36,987,003 1.25% due 01/03/05 18,105,526 18,105,526 --------------- TOTAL REPURCHASE AGREEMENTS (Cost $73,326,524) 73,326,524 --------------- TOTAL INVESTMENTS 107.5% (Cost $180,288,275) $ 180,288,275 =============== LIABILITIES IN EXCESS OF OTHER ASSETS - (7.5)% $ (12,610,278) =============== NET ASSETS - 100.0% $ 167,677,997 * THE ISSUER IS A PUBLICLY TRADED COMPANY THAT OPERATES UNDER A CONGRESSIONAL CHARTER; ITS SECURITIES ARE NEITHER ISSUED NOR GUARANTEED BY THE U.S. GOVERNMENT. See Notes to Financial Statements. THE RYDEX VARIABLE TRUST ANNUAL REPORT | 123 SCHEDULE OF INVESTMENTS December 31, 2004 - -------------------------------------------------------------------------------- BANKING FUND - -------------------------------------------------------------------------------- MARKET VALUE SHARES (NOTE 1) - ------------------------------------------------------------------------------ COMMON STOCKS 99.5% J.P. Morgan Chase & Co. 26,243 $ 1,023,739 Fannie Mae+ 13,163 937,337 Bank of America Corp. 19,114 898,167 Washington Mutual, Inc. 18,241 771,230 Freddie Mac 9,999 736,926 Fifth Third Bancorp+ 14,340 677,995 National City Corp. 17,788 667,939 Regions Financial Corp. 17,231 613,251 Wells Fargo & Co. 9,443 586,882 KeyCorp 17,276 585,656 M&T Bank Corp. 5,289 570,366 Comerica, Inc. 8,781 535,817 AmSouth Bancorp+ 20,436 529,292 Sovereign Bancorp, Inc. 22,646 510,667 Zions Bancorporation 7,165 487,435 MGIC Investment Corp.+ 7,015 483,404 Banknorth Group, Inc. 12,940 473,604 Huntington Bancshares, Inc. 19,050 472,059 Wachovia Corp.+ 8,462 445,101 PMI Group, Inc.+ 10,515 439,001 People's Bank/Bridgeport CT 11,163 434,129 Associated Banc-Corp. 13,060 433,723 First Horizon National Corp.+ 9,983 430,367 Colonial BancGroup, Inc. 19,281 409,336 Webster Financial Corp. 7,985 404,360 Whitney Holding Corp. 8,578 385,924 Southwest Bancorp of Texas, Inc. 16,435 382,771 Hudson United Bancorp 9,691 381,632 Flagstar Bancorp, Inc. 16,380 370,188 Downey Financial Corp. 6,482 369,474 Provident Bankshares Corp. 10,113 367,810 U.S. Bancorp 11,737 367,603 Commercial Federal Corp. 12,084 359,016 Bankunited Financial Corp. -- Class A* 11,167 356,786 Waypoint Financial Corp.+ 12,549 355,764 MARKET VALUE SHARES (NOTE 1) - ------------------------------------------------------------------------------ Greater Bay Bancorp+ 12,747 $ 355,386 Riggs National Corp. 16,649 353,958 Brookline Bancorp, Inc. 21,572 352,055 Susquehanna Bancshares, Inc. 14,067 350,972 Anchor BanCorp Wisconsin, Inc. 11,813 344,349 FirstFed Financial Corp.* 6,620 343,379 Community Bank System, Inc. 11,800 333,350 Kookmin Bank - SP ADR* 7,370 288,020 Uniao de Bancos Brasileiros SA 8,910 282,625 BB&T Corp. 3,210 134,981 SunTrust Banks, Inc. 1,444 106,719 Golden West Financial Corp. 1,580 97,044 Countrywide Financial Corp. 2,247 83,161 UnionBanCal Corp. 1,141 73,572 PNC Financial Services Group, Inc. 915 52,558 --------------- TOTAL COMMON STOCKS (Cost $20,353,959) 21,806,880 --------------- FACE AMOUNT ------------- REPURCHASE AGREEMENT 0.4% Repurchase Agreement (Note 5) 1.55% due 01/03/05 $ 97,687 97,687 --------------- TOTAL REPURCHASE AGREEMENT (Cost $97,687) 97,687 --------------- SECURITIES LENDING COLLATERAL 6.0% Investment in Securities Lending Short Term Investment Portfolio held by U.S. Bank (Note 8) 1,309,542 1,309,542 --------------- TOTAL SECURITIES LENDING COLLATERAL (Cost $1,309,542) 1,309,542 --------------- TOTAL INVESTMENTS 105.9% (Cost $21,761,188) $ 23,214,109 =============== LIABILITIES IN EXCESS OF OTHER ASSETS - (5.9)% $ (1,294,370) =============== NET ASSETS - 100.0% $ 21,919,739 * NON-INCOME PRODUCING SECURITIES. + ALL OR A PORTION OF THIS SECURITY IS ON LOAN AT DECEMBER 31, 2004 - SEE NOTE 8. ADR--AMERICAN DEPOSITORY RECEIPT. See Notes to Financial Statements. 124 | THE RYDEX VARIABLE TRUST ANNUAL REPORT SCHEDULE OF INVESTMENTS December 31, 2004 - -------------------------------------------------------------------------------- BASIC MATERIALS FUND - -------------------------------------------------------------------------------- MARKET VALUE SHARES (NOTE 1) - ------------------------------------------------------------------------------ COMMON STOCKS 99.5% EI Du Pont de Nemours & Co. 52,405 $ 2,570,465 Monsanto Co.+ 26,090 1,449,299 Dow Chemical Co. 28,775 1,424,650 MeadWestvaco Corp. 39,688 1,345,026 Alcoa, Inc. 40,000 1,256,800 Scotts Co. -- Class A* 15,340 1,127,797 Ecolab, Inc.+ 31,428 1,104,066 Praxair, Inc. 23,967 1,058,143 Newmont Mining Corp.+ 23,512 1,044,168 Air Products & Chemicals, Inc. 17,895 1,037,373 Sealed Air Corp.*+ 18,620 991,887 Phelps Dodge Corp.+ 9,705 960,019 OM Group, Inc.*+ 29,241 947,993 Lubrizol Corp. 25,043 923,085 Potlatch Corp.+ 18,224 921,770 Arch Chemicals, Inc. 29,993 863,199 Nucor Corp.+ 15,926 833,567 Smurfit-Stone Container Corp.*+ 43,008 803,389 United States Steel Corp.+ 15,614 800,217 Packaging Corporation of America 33,768 795,236 Lyondell Chemical Co.+ 25,258 730,461 Vulcan Materials Co. 13,209 721,343 Georgia-Pacific Corp.+ 19,022 712,945 International Paper Co.+ 16,574 696,108 Inco Ltd.* 18,612 684,549 Quanex Corp.+ 9,037 619,667 Ball Corp. 13,679 601,602 Rohm & Haas Co. 13,239 585,561 International Steel Group, Inc.* 13,773 558,633 Airgas, Inc. 20,702 548,810 Peabody Energy Corp.+ 6,655 538,456 Eastman Chemical Co.+ 8,834 509,987 Lafarge North America, Inc. 9,526 488,874 Steel Dynamics, Inc.+ 12,145 460,053 Freeport-McMoRan Copper & Gold, Inc. -- Class B+ 11,961 457,269 Pactiv Corp.*+ 17,723 448,215 Silgan Holdings, Inc. 7,312 445,740 Commercial Metals Co. 8,690 439,366 Pope & Talbot, Inc. 25,565 437,417 Florida Rock Industries, Inc. 7,128 424,330 Imperial Chemical Industries PLC - SP ADR 22,290 410,805 Owens-Illinois, Inc.* 18,013 407,994 Southern Peru Copper Corp.+ 8,550 403,646 RPM International, Inc. 19,858 390,408 Mosaic Co.*+ 22,915 373,973 MARKET VALUE SHARES (NOTE 1) - ------------------------------------------------------------------------------ Consol Energy, Inc. 8,998 $ 369,368 Headwaters, Inc.* 12,893 367,451 Eagle Materials, Inc. 4,255 367,419 Lafarge SA - SP ADR 14,756 356,357 Massey Energy Co.+ 9,736 340,273 Texas Industries, Inc. 5,080 316,890 Weyerhaeuser Co. 4,700 315,934 Allegheny Technologies, Inc.+ 14,368 311,355 Cytec Industries, Inc. 6,000 308,520 Louisiana-Pacific Corp.+ 11,288 301,841 PPG Industries, Inc. 4,404 300,177 Sonoco Products Co. 10,095 299,317 Votorantim Celulose e Papel SA - SP ADR 17,235 279,207 Georgia Gulf Corp.+ 5,490 273,402 Sensient Technologies Corp. 11,388 273,198 Cleveland-Cliffs, Inc.+ 2,595 269,517 Aracruz Celulose SA 6,900 260,130 FMC Corp.* 5,140 248,262 PolyOne Corp.* 27,304 247,374 Crompton Corp. 19,745 232,991 BHP Billiton PLC - SP ADR 9,795 228,909 Wausau-Mosinee Paper Corp. 12,623 225,447 Deltic Timber Corp. 5,302 225,070 Caraustar Industries, Inc.* 12,405 208,652 Ferro Corp. 8,907 206,553 Carpenter Technology Corp. 3,445 201,395 Longview Fibre Co. 10,989 199,340 Amcol International Corp. 9,740 195,677 Great Lakes Chemical Corp. 6,245 177,920 Rock-Tenn Co. -- Class A 11,688 177,190 RTI International Metals, Inc.* 8,331 171,119 AptarGroup, Inc. 3,226 170,268 Cabot Corp. 4,209 162,804 A. Schulman, Inc. 7,539 161,410 Agrium, Inc. 9,520 160,412 NewMarket Corp.* 7,657 152,374 BASF AG - SP ADR+ 2,110 151,962 Hercules, Inc.*+ 9,380 139,293 Minerals Technologies, Inc. 1,825 121,728 A.M. Castle & Co.* 10,125 120,893 Omnova Solutions, Inc.* 20,409 114,699 Agnico-Eagle Mines Ltd. 7,603 104,541 Sinopec Beijing Yanhua Petrochemical Co. Ltd. - SP ADR 4,410 103,062 Yanzhou Coal Mining Co. Ltd. - SP ADR 1,410 100,463 Penford Corp. 6,365 100,121 Syngenta AG - SP ADR* 4,550 97,143 See Notes to Financial Statements. THE RYDEX VARIABLE TRUST ANNUAL REPORT | 125 SCHEDULE OF INVESTMENTS (CONCLUDED) December 31, 2004 - -------------------------------------------------------------------------------- BASIC MATERIALS FUND - -------------------------------------------------------------------------------- MARKET VALUE SHARES (NOTE 1) - ------------------------------------------------------------------------------ BHP Billiton Ltd. - SP ADR 3,930 $ 94,399 Braskem SA - SP ADR* 1,550 78,988 Alcan, Inc. 1,540 75,522 Bowater, Inc.+ 700 30,779 Greif, Inc. -- Class A 490 27,440 Sinopec Shanghai Petrochemical Co. Ltd. - SP ADR 690 25,737 Schweitzer-Mauduit International, Inc. 696 23,629 --------------- TOTAL COMMON STOCKS (Cost $39,658,196) 45,928,283 --------------- FACE AMOUNT ------------- REPURCHASE AGREEMENT 0.8% Repurchase Agreement (Note 5) 1.55% due 01/03/05 $ 350,862 350,862 --------------- TOTAL REPURCHASE AGREEMENT (Cost $350,862) 350,862 --------------- SECURITIES LENDING COLLATERAL 15.1% Investment in Securities Lending Short Term Investment Portfolio held by U.S. Bank (Note 8) 6,982,118 6,982,118 --------------- TOTAL SECURITIES LENDING COLLATERAL (Cost $6,982,118) 6,982,118 --------------- TOTAL INVESTMENTS 115.4% (Cost $46,991,176) $ 53,261,263 =============== LIABILITIES IN EXCESS OF OTHER ASSETS - (15.4)% $ (7,099,486) =============== NET ASSETS - 100.0% $ 46,161,777 * NON-INCOME PRODUCING SECURITIES. + ALL OR A PORTION OF THIS SECURITY IS ON LOAN AT DECEMBER 31, 2004 - SEE NOTE 8. ADR--AMERICAN DEPOSITORY RECEIPT. See Notes to Financial Statements. 126 | THE RYDEX VARIABLE TRUST ANNUAL REPORT SCHEDULE OF INVESTMENTS December 31, 2004 - -------------------------------------------------------------------------------- BIOTECHNOLOGY FUND - -------------------------------------------------------------------------------- MARKET VALUE SHARES (NOTE 1) - ------------------------------------------------------------------------------ COMMON STOCKS 99.6% Amgen, Inc.*+ 11,179 $ 717,133 Genentech, Inc.*+ 10,038 546,469 Biogen Idec, Inc.*+ 5,520 367,687 Genzyme Corp.* 5,581 324,089 Gilead Sciences, Inc.* 9,197 321,803 Chiron Corp.* 7,206 240,176 Applera Corp. - Applied Biosystems Group 9,879 206,570 Invitrogen Corp.*+ 3,064 205,686 Cephalon, Inc.*+ 3,751 190,851 Millennium Pharmaceuticals, Inc.* 14,775 179,073 Angiotech Pharmaceuticals, Inc.* 8,144 150,257 United Therapeutics Corp.* 2,995 135,224 Qiagen N.V.* 11,998 131,378 Medimmune, Inc.*+ 4,785 129,721 Nabi Biopharmeceuticals* 8,810 129,067 Vertex Pharmaceuticals, Inc.* 11,987 126,703 CV Therapeutics, Inc.* 5,481 126,063 Myriad Genetics, Inc.* 5,555 125,043 Affymetrix, Inc.*+ 3,359 122,771 Eyetech Pharmaceuticals, Inc.* 2,679 121,895 Transkaryotic Therapies, Inc.* 4,554 115,626 Charles River Laboratories International, Inc.*+ 2,403 110,562 Onyx Pharmaceuticals, Inc.*+ 3,403 110,223 Serologicals Corp.* 4,952 109,538 Ligand Pharmaceuticals, Inc. -- Class B* 9,147 106,471 Digene Corp.* 3,993 104,417 Neurocrine Biosciences, Inc.* 1,946 95,938 Celgene Corp.*+ 3,604 95,614 InterMune, Inc.* 7,076 93,828 QLT, Inc.* 5,354 86,092 Dov Pharmaceutical, Inc.*+ 4,742 85,593 Pharmion Corp.* 2,026 85,518 ImClone Systems, Inc.* 1,676 77,230 Incyte Corp.* 7,458 74,505 Enzon Pharmaceuticals, Inc.* 4,301 59,010 Medarex, Inc.*+ 4,949 53,350 MARKET VALUE SHARES (NOTE 1) - ------------------------------------------------------------------------------ Vicuron Pharmaceuticals, Inc.* 2,831 $ 49,288 ICOS Corp.* 1,650 46,662 OSI Pharmaceuticals, Inc.* 611 45,733 Abgenix, Inc.* 3,978 41,133 Amylin Pharmaceuticals, Inc.* 1,722 40,226 Gen-Probe, Inc.* 880 39,785 NPS Pharmaceuticals, Inc.*+ 1,953 35,701 Protein Design Labs, Inc.* 1,642 33,924 Alkermes, Inc.* 2,325 32,759 Martek Biosciences Corp.*+ 562 28,774 Techne Corp.* 730 28,397 Human Genome Sciences, Inc.* 2,053 24,677 ID Biomedical Corp.* 1,406 20,935 Encysive Pharmaceuticals, Inc.* 1,989 19,751 Applera Corp. - Celera Genomics Group* 539 7,411 Telik, Inc.* 334 6,393 --------------- TOTAL COMMON STOCKS (Cost $4,905,504) 6,562,723 --------------- FACE AMOUNT ------------- REPURCHASE AGREEMENT 0.9% Repurchase Agreement (Note 5) 1.55% due 01/03/05 $ 59,082 59,082 --------------- TOTAL REPURCHASE AGREEMENT (Cost $59,082) 59,082 --------------- SECURITIES LENDING COLLATERAL 9.3% Investment in Securities Lending Short Term Investment Portfolio held by U.S. Bank (Note 8) 612,142 612,142 --------------- TOTAL SECURITIES LENDING COLLATERAL (Cost $612,142) 612,142 --------------- TOTAL INVESTMENTS 109.8% (Cost $5,576,728) $ 7,233,947 =============== LIABILITIES IN EXCESS OF OTHER ASSETS - (9.8)% $ (645,616) =============== NET ASSETS - 100.0% $ 6,588,331 * NON-INCOME PRODUCING SECURITIES. + ALL OR A PORTION OF THIS SECURITY IS ON LOAN AT DECEMBER 31, 2004 - SEE NOTE 8. See Notes to Financial Statements. THE RYDEX VARIABLE TRUST ANNUAL REPORT | 127 SCHEDULE OF INVESTMENTS December 31, 2004 - -------------------------------------------------------------------------------- CONSUMER PRODUCTS FUND - -------------------------------------------------------------------------------- MARKET VALUE SHARES (NOTE 1) - ------------------------------------------------------------------------------ COMMON STOCKS 99.5% Altria Group, Inc.+ 27,572 $ 1,684,649 Procter & Gamble Co. 26,760 1,473,941 Coca-Cola Co. 33,760 1,405,429 PepsiCo, Inc. 22,443 1,171,525 Anheuser-Busch Cos., Inc.+ 18,910 959,304 Sysco Corp.+ 24,210 924,096 Kimberly-Clark Corp. 13,530 890,409 Colgate-Palmolive Co. 17,340 887,114 Archer-Daniels-Midland Co. 35,530 792,674 Sara Lee Corp. 31,020 748,823 Kraft Foods, Inc. -- Class A 19,490 694,039 Kroger Co.*+ 39,350 690,199 H.J. Heinz Co. 17,418 679,128 Estee Lauder Cos., Inc. -- Class A 13,740 628,880 Coca-Cola Enterprises, Inc. 29,780 620,913 Tyson Foods, Inc. -- Class A 30,910 568,744 Supervalu, Inc.+ 16,110 556,117 Gillette Co.+ 12,352 553,123 Dean Foods Co.* 15,782 520,017 Alberto-Culver Co. -- Class B 10,400 505,128 7-Eleven, Inc.* 17,178 411,413 Hormel Foods Corp. 12,958 406,233 J.M. Smucker Co. 7,710 362,910 Church & Dwight Co., Inc. 10,690 359,398 Smithfield Foods, Inc.* 12,056 356,737 Del Monte Foods Co.* 32,295 355,891 Pilgrim's Pride Corp. 11,400 349,752 UST, Inc.+ 7,200 346,392 Loews Corp. - Carolina Group 11,150 322,792 Adolph Coors Co. -- Class B+ 4,217 319,100 Ralcorp Holdings, Inc. 6,530 273,803 General Mills, Inc.+ 5,490 272,908 Kellogg Co. 5,950 265,727 Avon Products, Inc.+ 6,737 260,722 Safeway, Inc.*+ 12,868 254,014 Sanderson Farms, Inc. 5,600 242,368 Ruddick Corp. 11,108 240,933 WM Wrigley Jr Co. 3,230 223,484 MARKET VALUE SHARES (NOTE 1) - ------------------------------------------------------------------------------ ConAgra Foods, Inc.+ 7,530 $ 221,759 Hershey Foods Corp. 3,700 205,498 Clorox Co. 3,080 181,504 Campbell Soup Co.+ 5,760 172,166 J&J Snack Foods Corp. 3,336 163,564 Corn Products International, Inc. 2,994 160,359 NBTY, Inc.* 6,365 152,824 Albertson's, Inc.+ 4,830 115,340 McCormick & Co., Inc.+ 2,870 110,782 Pepsi Bottling Group, Inc.+ 2,880 77,875 Reynolds American, Inc.+ 730 57,378 Brown-Forman Corp. -- Class B 990 48,193 Whole Foods Market, Inc.+ 390 37,187 Constellation Brands, Inc. -- Class A* 540 25,115 --------------- TOTAL COMMON STOCKS (Cost $21,392,169) 24,308,373 --------------- FACE AMOUNT ------------- REPURCHASE AGREEMENT 0.3% Repurchase Agreement (Note 5) 1.55% due 01/03/05 $ 81,259 81,259 --------------- TOTAL REPURCHASE AGREEMENT (Cost $81,259) 81,259 --------------- SECURITIES LENDING COLLATERAL 9.9% Investment in Securities Lending Short Term Investment Portfolio held by U.S. Bank (Note 8) 2,421,449 2,421,449 --------------- TOTAL SECURITIES LENDING COLLATERAL (Cost $2,421,449) 2,421,449 --------------- TOTAL INVESTMENTS 109.7% (Cost $23,894,877) $ 26,811,081 =============== LIABILITIES IN EXCESS OF OTHER ASSETS - (9.7)% $ (2,378,149) =============== NET ASSETS - 100.0% $ 24,432,932 * NON-INCOME PRODUCING SECURITIES. + ALL OR A PORTION OF THIS SECURITY IS ON LOAN AT DECEMBER 31, 2004 - SEE NOTE 8. See Notes to Financial Statements. 128 | THE RYDEX VARIABLE TRUST ANNUAL REPORT SCHEDULE OF INVESTMENTS December 31, 2004 - -------------------------------------------------------------------------------- ELECTRONICS FUND - -------------------------------------------------------------------------------- MARKET VALUE SHARES (NOTE 1) - ------------------------------------------------------------------------------ COMMON STOCKS 99.6% Intel Corp. 61,096 $ 1,429,035 Texas Instruments, Inc.+ 29,669 730,451 Applied Materials, Inc.* 38,699 661,753 Micron Technology, Inc.*+ 30,544 377,218 Advanced Micro Devices, Inc.*+ 16,814 370,244 Broadcom Corp. -- Class A*+ 11,368 366,959 Lam Research Corp.*+ 11,992 346,689 Analog Devices, Inc. 8,642 319,063 KLA-Tencor Corp.* 6,653 309,897 Xilinx, Inc.+ 10,205 302,578 Altera Corp.* 12,928 267,610 Maxim Integrated Products, Inc. 6,206 263,072 National Semiconductor Corp.+ 13,986 251,049 Linear Technology Corp. 5,953 230,738 Varian Semiconductor Equipment Associates, Inc.* 6,246 230,165 Nvidia Corp.* 9,584 225,799 Teradyne, Inc.*+ 12,188 208,049 Microchip Technology, Inc. 7,441 198,377 Novellus Systems, Inc.* 6,947 193,752 Cree, Inc.*+ 4,808 192,705 International Rectifier Corp.*+ 3,881 172,976 Rambus, Inc.* 7,393 170,039 PMC - Sierra, Inc.* 14,316 161,055 Fairchild Semiconductor International, Inc.* 8,866 144,161 LSI Logic Corp.*+ 25,563 140,085 Amkor Technology, Inc.* 20,844 139,238 MEMC Electronic Materials, Inc.* 10,071 133,441 Atmel Corp.* 33,716 132,167 Cypress Semiconductor Corp.*+ 11,251 131,974 Agere Systems, Inc.-Class B* 96,183 129,847 Taiwan Semiconductor Manufacturing Co. Ltd. - SP ADR 15,028 127,588 Applied Micro Circuits Corp.* 29,179 122,844 Intersil Corp. -- Class A 7,186 120,294 Integrated Circuit Systems, Inc.*+ 5,387 112,696 Cymer, Inc.*+ 3,781 111,691 Integrated Device Technology, Inc.* 9,658 111,646 Silicon Laboratories, Inc.* 3,124 110,308 MARKET VALUE SHARES (NOTE 1) - ------------------------------------------------------------------------------ Semtech Corp.* 5,026 $ 109,919 RF Micro Devices, Inc.*+ 15,949 109,091 Photronics, Inc.* 6,502 107,283 Micrel, Inc.* 9,463 104,282 Dupont Photomasks, Inc.* 3,826 101,045 Cabot Microelectronics Corp.* 2,395 95,920 Skyworks Solutions, Inc.* 9,849 92,876 Brooks Automation, Inc.* 5,310 91,438 ATMI, Inc.* 4,030 90,796 Lattice Semiconductor Corp.* 15,681 89,382 Kulicke & Soffa Industries, Inc.* 10,043 86,571 Credence Systems Corp.* 9,089 83,164 Conexant Systems, Inc.* 41,024 81,638 Microsemi Corp.* 4,658 80,863 Triquint Semiconductor, Inc.* 17,780 79,121 Power Integrations, Inc.* 3,736 73,898 Helix Technology Corp. 4,077 70,899 Supertex, Inc.* 3,228 70,048 FEI Co.*+ 3,332 69,972 Ultratech, Inc.* 3,556 67,031 Actel Corp.* 3,689 64,705 Advanced Energy Industries, Inc.* 6,874 62,760 Axcelis Technologies, Inc.* 7,158 58,194 LTX Corp.* 7,484 57,552 Exar Corp.* 3,970 56,334 Cohu, Inc. 2,857 53,026 Standard Microsystems Corp.* 2,873 51,226 DSP Group, Inc.* 1,995 44,548 Rudolph Technologies, Inc.* 2,528 43,406 Kopin Corp.* 10,459 40,476 STMicroelectronics/NV 2,055 39,703 Pericom Semiconductor Corp.* 3,305 31,166 Tessera Technologies, Inc.* 773 28,763 Alliance Semiconductor Corp.* 7,767 28,738 ESS Technologies, Inc.* 3,378 24,017 Three-Five Systems, Inc.* 9,449 22,866 ASML Holding /NV* 1,267 20,158 Silicon Image, Inc.* 981 16,147 --------------- TOTAL COMMON STOCKS (Cost $11,230,966) 12,246,275 --------------- See Notes to Financial Statements. THE RYDEX VARIABLE TRUST ANNUAL REPORT | 129 SCHEDULE OF INVESTMENTS (CONCLUDED) December 31, 2004 - -------------------------------------------------------------------------------- ELECTRONICS FUND - -------------------------------------------------------------------------------- MARKET FACE VALUE AMOUNT (NOTE 1) - ------------------------------------------------------------------------------ REPURCHASE AGREEMENT 0.4% Repurchase Agreement (Note 5) 1.55% due 01/03/05 $ 44,907 $ 44,907 --------------- TOTAL REPURCHASE AGREEMENT (Cost $44,907) 44,907 --------------- SECURITIES LENDING COLLATERAL 6.7% Investment in Securities Lending Short Term Investment Portfolio held by U.S. Bank (Note 8) 824,303 824,303 --------------- TOTAL SECURITIES LENDING COLLATERAL (Cost $824,303) 824,303 --------------- TOTAL INVESTMENTS 106.7% (Cost $12,100,176) $ 13,115,485 =============== LIABILITIES IN EXCESS OF OTHER ASSETS - (6.7)% $ (826,155) =============== NET ASSETS - 100.0% $ 12,289,330 * NON-INCOME PRODUCING SECURITIES. + ALL OR A PORTION OF THIS SECURITY IS ON LOAN AT DECEMBER 31, 2004 - SEE NOTE 8. ADR--AMERICAN DEPOSITORY RECEIPT. See Notes to Financial Statements. 130 | THE RYDEX VARIABLE TRUST ANNUAL REPORT SCHEDULE OF INVESTMENTS December 31, 2004 - -------------------------------------------------------------------------------- ENERGY FUND - -------------------------------------------------------------------------------- MARKET VALUE SHARES (NOTE 1) - ------------------------------------------------------------------------------ COMMON STOCKS 99.4% Exxon Mobil Corp. 82,205 $ 4,213,828 BP PLC - SP ADR 49,650 2,899,560 ChevronTexaco Corp.+ 48,140 2,527,831 ConocoPhillips 28,519 2,476,305 Total SA - SP ADR+ 21,610 2,373,642 Royal Dutch Petroleum Co.+ 36,610 2,100,682 Occidental Petroleum Corp. 28,680 1,673,765 Shell Transport & Trading Co. PLC - SP ADR 32,425 1,666,645 Devon Energy Corp. 42,476 1,653,166 El Paso Corp.+ 123,348 1,282,819 Amerada Hess Corp.+ 15,140 1,247,233 Valero Energy Corp.+ 27,440 1,245,776 Marathon Oil Corp. 32,675 1,228,907 Weatherford International Ltd.*+ 23,746 1,218,170 Anadarko Petroleum Corp. 18,337 1,188,421 Transocean, Inc.*+ 27,312 1,157,756 Premcor, Inc. 25,560 1,077,865 Halliburton Co. 27,123 1,064,307 Pogo Producing Co. 21,200 1,027,988 Tidewater, Inc.+ 28,296 1,007,621 Grant Prideco, Inc.*+ 48,754 977,518 Burlington Resources, Inc.+ 22,100 961,350 Schlumberger Ltd. 13,830 925,918 Forest Oil Corp.*+ 28,850 915,122 Hanover Compressor Co.*+ 62,220 879,169 Stone Energy Corp.* 19,095 860,994 Repsol YPF SA - SP ADR+ 32,407 845,823 Murphy Oil Corp.+ 9,800 788,410 Diamond Offshore Drilling, Inc.+ 18,710 749,335 Apache Corp. 14,228 719,510 Atwood Oceanics, Inc.* 13,734 715,541 BJ Services Co.+ 15,200 707,408 W-H Energy Services, Inc.* 31,248 698,705 Veritas DGC, Inc.*+ 29,909 670,261 Baker Hughes, Inc.+ 15,454 659,422 Todco -- Class A* 35,471 653,376 Provident Energy Trust+ 63,800 604,824 Unit Corp.*+ 15,711 600,317 Oceaneering International, Inc.* 16,020 597,866 MARKET VALUE SHARES (NOTE 1) - ------------------------------------------------------------------------------ Universal Compression Holdings, Inc.* 16,240 $ 566,938 Petro-Canada 10,893 555,761 Grey Wolf, Inc.* 104,154 548,892 Chesapeake Energy Corp.+ 32,355 533,857 Cimarex Energy Co.*+ 12,699 481,292 Precision Drilling Corp.*+ 7,420 465,976 Vintage Petroleum, Inc. 20,423 463,398 Unocal Corp. 10,510 454,452 Cooper Cameron Corp.*+ 8,200 441,242 Magnum Hunter Resources, Inc.* 34,032 439,013 Offshore Logistics, Inc.* 13,414 435,553 Houston Exploration Co.*+ 7,400 416,694 Newfield Exploration Co.* 7,020 414,531 Spinnaker Exploration Co.* 10,400 364,728 Remington Oil & Gas Corp.*+ 13,190 359,428 National-Oilwell, Inc.*+ 9,880 348,665 Swift Energy Co.* 11,370 329,048 Overseas Shipholding Group, Inc.+ 5,924 327,005 Frontier Oil Corp. 10,845 289,128 Southwestern Energy Co.* 5,598 283,763 Sunoco, Inc.+ 3,403 278,059 Tesoro Corp.* 8,355 266,190 Frontline, Ltd. 5,660 251,078 Hydril* 5,416 246,482 Ashland, Inc. 4,198 245,079 Canadian Natural Resources Ltd. 5,000 213,850 Petrofund Energy Trust 14,300 186,472 Williams Cos., Inc.+ 11,360 185,054 Nabors Industries Ltd.* 2,860 146,689 PetroKazakhstan, Inc.-- Class A 3,491 129,516 EOG Resources, Inc.+ 1,795 128,091 Kinder Morgan, Inc. 1,720 125,784 Kerr-McGee Corp. 2,084 120,434 XTO Energy, Inc.+ 3,367 119,124 General Maritime Corp* 1,750 69,913 Ship Finance International Ltd. 2,454 50,356 Cal Dive International, Inc.* 7 285 --------------- TOTAL COMMON STOCKS (Cost $50,715,362) 60,144,976 --------------- See Notes to Financial Statements. THE RYDEX variable trust annual report | 131 SCHEDULE OF INVESTMENTS (CONCLUDED) December 31, 2004 - -------------------------------------------------------------------------------- ENERGY FUND - -------------------------------------------------------------------------------- MARKET FACE VALUE AMOUNT (NOTE 1) - ------------------------------------------------------------------------------ REPURCHASE AGREEMENT 0.5% Repurchase Agreement (Note 5) 1.55% due 01/03/05 $ 308,565 $ 308,565 --------------- TOTAL REPURCHASE AGREEMENT (Cost $308,565) 308,565 --------------- SECURITIES LENDING COLLATERAL 18.2% Investment in Securities Lending Short Term Investment Portfolio held by U.S. Bank (Note 8) 11,003,535 11,003,535 --------------- TOTAL SECURITIES LENDING COLLATERAL (Cost $11,003,535) 11,003,535 --------------- TOTAL INVESTMENTS 118.1% (Cost $62,027,462) $ 71,457,076 =============== LIABILITIES IN EXCESS OF OTHER ASSETS - (18.1)% $ (10,956,414) =============== NET ASSETS - 100.0% $ 60,500,662 * NON-INCOME PRODUCING SECURITIES. + ALL OR A PORTION OF THIS SECURITY IS ON LOAN AT DECEMBER 31, 2004 - SEE NOTE 8. ADR--AMERICAN DEPOSITORY RECEIPT. See Notes to Financial Statements. 132 | THE RYDEX VARIABLE TRUST ANNUAL REPORT SCHEDULE OF INVESTMENTS December 31, 2004 - -------------------------------------------------------------------------------- ENERGY SERVICES FUND - -------------------------------------------------------------------------------- MARKET VALUE SHARES (NOTE 1) - ------------------------------------------------------------------------------ COMMON STOCKS 99.5% Schlumberger Ltd.+ 35,696 $ 2,389,847 Halliburton Co. 48,290 1,894,900 Transocean, Inc.*+ 42,535 1,803,059 Baker Hughes, Inc.+ 36,106 1,540,643 Weatherford International Ltd.*+ 26,330 1,350,729 BJ Services Co.+ 27,274 1,269,332 Diamond Offshore Drilling, Inc.+ 27,373 1,096,289 Nabors Industries Ltd.* 20,072 1,029,493 Tidewater, Inc.+ 27,237 969,910 ENSCO International, Inc.+ 28,323 898,972 Noble Corp.*+ 16,691 830,210 Hanover Compressor Co.*+ 58,684 829,205 Grant Prideco, Inc.*+ 40,740 816,837 Smith International, Inc.* 14,719 800,861 National-Oilwell, Inc.*+ 22,445 792,084 Cooper Cameron Corp.*+ 14,504 780,460 Patterson-UTI Energy, Inc. 36,768 715,138 Unit Corp.*+ 17,349 662,905 Varco International, Inc.* 21,962 640,192 Oceaneering International, Inc.* 15,958 595,553 Rowan Cos., Inc.* 21,885 566,821 SEACOR Holdings, Inc.* 9,652 515,417 Veritas DGC, Inc.*+ 20,803 466,195 Atwood Oceanics, Inc.* 8,435 439,463 Lone Star Technologies, Inc.* 13,004 435,114 Maverick Tube Corp.*+ 14,352 434,866 Hydril* 9,217 419,466 Cal Dive International, Inc.*+ 9,985 406,889 W-H Energy Services, Inc.* 18,074 404,135 Offshore Logistics, Inc.* 12,354 401,134 Pride International, Inc.*+ 18,324 376,375 Todco -- Class A* 20,166 371,458 Input/Output, Inc.*+ 34,900 308,516 FMC Technologies, Inc.* 9,222 296,948 MARKET VALUE SHARES (NOTE 1) - ------------------------------------------------------------------------------ CARBO Ceramics, Inc. 4,279 $ 295,251 Universal Compression Holdings, Inc.* 7,532 262,942 Helmerich & Payne, Inc. 7,083 241,105 Precision Drilling Corp.*+ 3,122 196,062 Grey Wolf, Inc.* 30,141 158,843 Tetra Technologies, Inc.* 4,675 132,302 Stolt Offshore SA - SP ADR* 15,270 99,255 Global Industries, Ltd.* 10,980 91,024 NS Group, Inc.* 2,910 80,898 Dril-Quip, Inc.* 2,986 72,440 --------------- TOTAL COMMON STOCKS (Cost $24,169,512) 29,179,538 --------------- FACE AMOUNT ------------- REPURCHASE AGREEMENT 0.7% Repurchase Agreement (Note 5) 1.55% due 01/03/05 $ 200,852 200,852 --------------- TOTAL REPURCHASE AGREEMENT (Cost $200,852) 200,852 --------------- SECURITIES LENDING COLLATERAL 17.8% Investment in Securities Lending Short Term Investment Portfolio Held by U.S. Bank (Note 8) 5,212,067 5,212,067 --------------- TOTAL SECURITIES LENDING COLLATERAL (Cost $5,212,067) 5,212,067 --------------- TOTAL INVESTMENTS 118.0% (Cost $29,582,431) $ 34,592,457 =============== LIABILITIES IN EXCESS OF OTHER ASSETS - (18.0)% $ (5,275,972) =============== NET ASSETS - 100.0% $ 29,316,485 * NON-INCOME PRODUCING SECURITIES. + ALL OR A PORTION OF THIS SECURITY IS ON LOAN AT DECEMBER 31, 2004 - SEE NOTE 8. ADR--AMERICAN DEPOSITORY RECEIPT. See Notes to Financial Statements. THE RYDEX VARIABLE TRUST ANNUAL REPORT | 133 SCHEDULE OF INVESTMENTS December 31, 2004 - -------------------------------------------------------------------------------- FINANCIAL SERVICES FUND - -------------------------------------------------------------------------------- MARKET VALUE SHARES (NOTE 1) - ------------------------------------------------------------------------------ COMMON STOCKS 99.5% Citigroup, Inc. 31,850 $ 1,534,533 J.P. Morgan Chase & Co. 30,751 1,199,596 American Express Co. 15,926 897,749 National City Corp. 23,214 871,686 Fifth Third Bancorp+ 18,300 865,224 Bank of New York Co., Inc. 25,883 865,010 KeyCorp 23,914 810,685 Progressive Corp. 9,509 806,744 Chubb Corp.+ 10,370 797,453 Principal Financial Group, Inc. 19,359 792,557 Vornado Realty Trust+ 10,257 780,865 Comerica, Inc.+ 12,412 757,380 Sovereign Bancorp, Inc. 33,569 756,981 Huntington Bancshares, Inc.+ 29,398 728,482 MGIC Investment Corp.+ 10,460 720,799 Zions Bancorporation 10,581 719,825 Mills Corp. 11,222 715,515 Public Storage, Inc. 12,822 714,826 Genworth Financial, Inc. -- Class A 26,295 709,965 Old Republic International Corp. 27,926 706,528 Apartment Investment & Management Co. -- Class A 18,298 705,205 Duke Realty Corp. 20,463 698,607 W.R. Berkley Corp. 14,745 695,522 Student Loan Corp. 3,771 693,864 Health Care Property Investors, Inc. 24,898 689,426 Associated Banc-Corp. 20,674 686,584 PMI Group, Inc.+ 16,358 682,946 People's Bank/Bridgeport CT 17,535 681,936 CBL & Associates Properties, Inc. 8,729 666,459 SL Green Realty Corp. 10,954 663,265 Colonial BancGroup, Inc. 31,176 661,866 MBNA Corp. 23,408 659,871 Ventas, Inc. 24,027 658,580 Riggs National Corp. 30,886 656,636 Odyssey Re Holdings Corp.+ 25,975 654,830 Whitney Holding Corp. 14,538 654,065 American Financial Group, Inc./OH 20,777 650,528 Nationwide Financial Services, Inc. 16,862 644,634 AmerUs Group Co. 14,122 639,727 Bankunited Financial Corp. -- Class A* 19,921 636,476 Lexington Corporate Properties Trust 27,907 630,140 Webster Financial Corp. 12,400 627,936 MARKET VALUE SHARES (NOTE 1) - ------------------------------------------------------------------------------ Commercial Federal Corp. 21,029 $ 624,772 Downey Financial Corp. 10,949 624,093 Moody's Corp.+ 7,098 616,461 Selective Insurance Group, Inc. 13,920 615,821 FirstFed Financial Corp.* 11,788 611,444 Greater Bay Bancorp 21,860 609,457 Kookmin Bank - SP ADR* 15,282 597,221 Stewart Information Services Corp. 14,006 583,350 Colonial Properties Trust+ 14,748 579,154 Manulife Financial Corp. 12,402 572,972 UBS AG 6,729 564,159 Capital One Financial Corp.+ 6,503 547,618 PartnerRe Ltd. 8,824 546,559 Mellon Financial Corp. 16,232 504,978 Susquehanna Bancshares, Inc. 18,630 464,818 State Street Corp. 8,944 439,329 Hudson United Bancorp 10,689 420,933 Eaton Vance Corp. 7,708 401,972 HCC Insurance Holdings, Inc.+ 10,043 332,624 Bank of America Corp. 7,000 328,930 Presidential Life Corp. 18,082 306,671 Charles Schwab Corp.+ 25,544 305,506 Chicago Mercantile Exchange Holdings, Inc.+ 1,173 268,265 American International Group, Inc.+ 3,722 244,424 Nuveen Investments, Inc. -- Class A 5,440 214,717 Franklin Resources, Inc.+ 2,790 194,323 SLM Corp.+ 3,603 192,364 LandAmerica Financial Group, Inc. 3,513 189,456 First Marblehead Corp.* 2,612 146,925 ING Groep NV - SP ADR 3,925 118,731 Wells Fargo & Co. 1,579 98,135 MoneyGram International, Inc. 4,046 85,532 Bear Stearns Cos., Inc.+ 820 83,894 American Capital Strategies, Ltd. 2,440 81,374 Legg Mason, Inc.+ 971 71,135 Assurant, Inc.+ 2,303 70,357 Investors Financial Services Corp.+ 1,143 57,127 Loews Corp. 707 49,702 AmeriCredit Corp.* 1,992 48,704 Blackrock, Inc. 610 47,129 Piper Jaffray Cos., Inc.* 967 46,368 AMB Property Corp. 1,036 41,844 --------------- TOTAL COMMON STOCKS (Cost $42,797,957) 44,940,854 --------------- See Notes to Financial Statements. 134 | THE RYDEX VARIABLE TRUST ANNUAL REPORT SCHEDULE OF INVESTMENTS (CONCLUDED) December 31, 2004 - -------------------------------------------------------------------------------- FINANCIAL SERVICES FUND - -------------------------------------------------------------------------------- MARKET FACE VALUE AMOUNT (NOTE 1) - ------------------------------------------------------------------------------ REPURCHASE AGREEMENT 0.9% Repurchase Agreement (Note 5) 1.55% due 01/03/05 $ 423,930 $ 423,930 --------------- TOTAL REPURCHASE AGREEMENT (Cost $423,930) 423,930 --------------- SECURITIES LENDING COLLATERAL 6.6% Investment in Securities Lending Short Term Investment Portfolio held by U.S. Bank (Note 8) 2,969,265 2,969,265 --------------- TOTAL SECURITIES LENDING COLLATERAL (Cost $2,969,265) 2,969,265 --------------- TOTAL INVESTMENTS 107.0% (Cost $46,191,152) $ 48,334,049 =============== LIABILITIES IN EXCESS OF OTHER ASSETS - (7.0)% $ (3,154,350) =============== NET ASSETS - 100.0% $ 45,179,699 * NON-INCOME PRODUCING SECURITIES. + ALL OR A PORTION OF THIS SECURITY IS ON LOAN AT DECEMBER 31, 2004 - SEE NOTE 8. ADR--AMERICAN DEPOSITORY RECEIPT. See Notes to Financial Statements. THE RYDEX VARIABLE TRUST ANNUAL REPORT |135 SCHEDULE OF INVESTMENTS December 31, 2004 - -------------------------------------------------------------------------------- HEALTH CARE FUND - -------------------------------------------------------------------------------- MARKET VALUE SHARES (NOTE 1) - ------------------------------------------------------------------------------ COMMON STOCKS 99.1% Pfizer, Inc. 85,508 $ 2,299,310 Johnson & Johnson, Inc. 29,861 1,893,785 Abbott Laboratories 28,304 1,320,382 UnitedHealth Group, Inc.+ 11,267 991,834 Bristol-Myers Squibb Co.+ 36,851 944,123 Wyeth+ 20,920 890,983 Eli Lilly & Co. 15,525 881,044 Genentech, Inc.*+ 16,021 872,183 Amgen, Inc.*+ 12,995 833,629 Boston Scientific Corp.* 22,031 783,202 Caremark Rx, Inc.*+ 17,273 681,074 Medtronic, Inc. 13,651 678,045 Merck & Co., Inc. 21,065 677,029 Aetna, Inc. 5,411 675,022 Cardinal Health, Inc. 10,114 588,129 Genzyme Corp.* 9,396 545,626 Gilead Sciences, Inc.* 15,387 538,391 CIGNA Corp. 6,130 500,024 Allergan, Inc.+ 5,845 473,854 Forest Laboratories, Inc.*+ 10,155 455,553 St. Jude Medical, Inc.* 10,551 442,403 Zimmer Holdings, Inc.*+ 5,296 424,316 HCA, Inc. 10,269 410,349 Becton, Dickinson & Co. 5,841 331,769 Express Scripts, Inc.*+ 4,152 317,379 Schering AG - SP ADR 4,199 311,776 Biogen Idec, Inc.*+ 4,590 305,740 Kinetic Concepts, Inc.* 3,792 289,330 Pacificare Health Systems, Inc.* 5,110 288,817 Quest Diagnostics, Inc.+ 3,010 287,605 Patterson Cos., Inc.*+ 6,433 279,128 C.R. Bard, Inc. 4,294 274,730 IMS Health, Inc. 11,185 259,604 Fisher Scientific International, Inc.*+ 4,042 252,140 DENTSPLY International, Inc. 4,462 250,764 Biomet, Inc. 5,433 235,738 Celgene Corp.*+ 8,655 229,617 Applera Corp. - Applied Biosystems Group 10,955 229,069 Laboratory Corporation of America Holdings*+ 4,545 226,432 Elan Corp. PLC -SP ADR* 8,142 221,869 ImClone Systems, Inc.*+ 4,572 210,678 Hillenbrand Industries, Inc. 3,719 206,553 MARKET VALUE SHARES (NOTE 1) - ------------------------------------------------------------------------------ Millennium Pharmaceuticals, Inc.*+ 16,715 $ 202,586 Bausch & Lomb, Inc. 3,012 194,154 PerkinElmer, Inc. 8,261 185,790 Schering-Plough Corp.+ 8,754 182,784 Henry Schein, Inc.*+ 2,570 178,975 Invitrogen Corp.*+ 2,554 171,450 Hospira, Inc.* 5,086 170,381 Coventry Health Care, Inc.*+ 3,197 169,697 Edwards Lifesciences Corp.* 4,082 168,423 WebMD Corp.* 20,091 163,943 Varian Medical Systems, Inc.*+ 3,698 159,902 Covance, Inc.* 4,052 157,015 Dade Behring Holdings, Inc.*+ 2,720 152,320 Millipore Corp.* 3,052 152,020 Affymetrix, Inc.*+ 4,025 147,114 Humana, Inc.*+ 4,835 143,551 Amylin Pharmaceuticals, Inc.* 6,134 143,290 Altana AG - SP ADR 2,173 136,899 DaVita, Inc.* 3,430 135,588 Cerner Corp.*+ 2,550 135,584 Omnicare, Inc.+ 3,855 133,460 Beckman Coulter, Inc. 1,986 133,042 WellChoice, Inc.* 2,480 132,432 Manor Care, Inc. 3,315 117,450 Health Management Associates, Inc. -- Class A+ 5,000 113,600 Andrx Corp.* 4,936 107,753 Sierra Health Services, Inc.* 1,932 106,473 Par Pharmaceutical Cos., Inc.* 2,572 106,429 Varian, Inc.* 2,570 105,396 Pharmaceutical Product Development, Inc.* 2,466 101,821 Novo-Nordisk A/S - SP ADR 1,876 101,792 Health Net, Inc.* 3,480 100,468 Invacare Corp. 2,140 98,996 Serono SA - SP ADR+ 5,890 96,125 Centene Corp.* 3,198 90,663 Universal Health Services, Inc. -- Class B 2,010 89,445 American Healthways, Inc.* 2,649 87,523 Stryker Corp. 1,789 86,319 WellPoint, Inc.* 750 86,250 Baxter International, Inc. 2,455 84,796 Biosite, Inc.*+ 1,336 82,217 Sola International, Inc.* 2,895 79,728 See Notes to Financial Statements. 136 | THE RYDEX VARIABLE TRUST ANNUAL REPORT SCHEDULE OF INVESTMENTS (CONCLUDED) December 31, 2004 - -------------------------------------------------------------------------------- HEALTH CARE FUND - -------------------------------------------------------------------------------- MARKET VALUE SHARES (NOTE 1) - ------------------------------------------------------------------------------ Haemonetics Corp./MA*+ 2,052 $ 74,303 Chemed Corp. 1,063 71,338 Vertex Pharmaceuticals, Inc.*+ 6,555 69,286 Dendrite International, Inc.* 3,520 68,288 Community Health Systems, Inc.* 2,449 68,278 Immucor, Inc.* 2,820 66,298 Priority Healthcare Corp. -- Class B* 3,010 65,528 ArthroCare Corp.* 1,920 61,555 Analogic Corp. 1,343 60,153 Conmed Corp.* 2,108 59,909 Mentor Corp. 1,660 56,008 Pediatrix Medical Group, Inc.* 850 54,443 RehabCare Group, Inc.* 1,697 47,499 Regeneron Pharmaceuticals, Inc.* 5,145 47,385 --------------- TOTAL COMMON STOCKS (Cost $25,671,107) 30,172,943 --------------- FACE AMOUNT ------------- REPURCHASE AGREEMENT 0.5% Repurchase Agreement (Note 5) 1.55% due 01/03/05 $ 138,842 138,842 --------------- TOTAL REPURCHASE AGREEMENT (Cost $138,842) 138,842 --------------- SECURITIES LENDING COLLATERAL 12.7% Investment in Securities Lending Short Term Investment Portfolio held by U.S. Bank (Note 8) 3,854,239 3,854,239 --------------- TOTAL SECURITIES LENDING COLLATERAL (Cost $3,854,239) 3,854,239 --------------- TOTAL INVESTMENTS 112.3% (Cost $29,664,188) $ 34,166,024 =============== LIABILITIES IN EXCESS OF OTHER ASSETS - (12.3)% $ (3,730,710) =============== NET ASSETS - 100.0% $ 30,435,314 * NON-INCOME PRODUCING SECURITIES. + ALL OR A PORTION OF THIS SECURITY IS ON LOAN AT DECEMBER 31, 2004 - SEE NOTE 8. ADR--AMERICAN DEPOSITORY RECEIPT. See Notes to Financial Statements. THE RYDEX VARIABLE TRUST ANNUAL REPORT | 137 SCHEDULE OF INVESTMENTS December 31, 2004 - -------------------------------------------------------------------------------- INTERNET FUND - -------------------------------------------------------------------------------- MARKET VALUE SHARES (NOTE 1) - ------------------------------------------------------------------------------ COMMON STOCKS 99.5% Cisco Systems, Inc.* 168,958 $ 3,260,889 Qualcomm, Inc. 58,332 2,473,277 Yahoo!, Inc.*+ 64,747 2,439,667 Time Warner, Inc.*+ 125,285 2,435,540 eBay, Inc.*+ 20,285 2,358,740 Amazon.com, Inc.*+ 36,549 1,618,755 Juniper Networks, Inc.*+ 55,095 1,498,033 Research In Motion Ltd.*+ 13,433 1,107,148 Qwest Communications International, Inc.* 239,996 1,065,582 Sun Microsystems, Inc.* 182,643 982,619 TIBCO Software, Inc.*+ 73,450 979,823 InterActiveCorp*+ 32,406 895,054 E*Trade Financial Corp.*+ 58,224 870,449 Symantec Corp.*+ 33,324 858,426 F5 Networks, Inc.* 16,130 785,854 EarthLink, Inc.*+ 65,211 751,231 McAfee, Inc.*+ 25,107 726,345 Red Hat, Inc.*+ 53,871 719,178 VeriSign, Inc.*+ 20,476 686,356 Websense, Inc.* 12,740 646,173 United Online, Inc.* 55,530 640,261 DoubleClick, Inc.*+ 82,260 639,983 WebMD Corp.* 71,246 581,367 Broadcom Corp. -- Class A*+ 16,814 542,756 BEA Systems, Inc.* 61,184 542,090 Ask Jeeves, Inc.*+ 20,080 537,140 PalmOne, Inc.*+ 16,001 504,832 Check Point Software Technologies Ltd.*+ 18,573 457,453 Monster Worldwide, Inc.*+ 13,367 449,666 CheckFree Corp.*+ 11,334 431,599 Jupitermedia Corp.* 17,960 427,089 Intuit, Inc.*+ 9,423 414,706 MARKET VALUE SHARES (NOTE 1) - ------------------------------------------------------------------------------ Verity, Inc.* 30,960 $ 406,195 Akamai Technologies, Inc.* 29,400 383,082 ValueClick, Inc.* 28,500 379,905 Netflix, Inc.*+ 30,580 377,051 Siebel Systems, Inc.* 35,635 374,167 NetBank, Inc. 35,370 368,202 Digital Insight Corp.* 16,470 303,048 Macromedia, Inc.*+ 8,820 274,478 CNET Networks, Inc.*+ 17,720 198,996 Foundry Networks, Inc.* 12,380 162,921 Audible, Inc.* 3,960 103,158 CIENA Corp.* 25,420 84,903 --------------- TOTAL COMMON STOCKS (Cost $29,236,360) 36,744,187 --------------- FACE AMOUNT ------------- REPURCHASE AGREEMENT 0.7% Repurchase Agreement (Note 5) 1.55% due 01/03/05 $ 243,854 243,854 --------------- TOTAL REPURCHASE AGREEMENT (Cost $243,854) 243,854 --------------- SECURITIES LENDING COLLATERAL 24.6% Investment in Securities Lending Short Term Investment Portfolio Held by U.S. Bank (Note 8) 9,104,697 9,104,697 --------------- TOTAL SECURITIES LENDING COLLATERAL (Cost $9,104,697) 9,104,697 --------------- TOTAL INVESTMENTS 124.8% (Cost $38,584,911) $ 46,092,738 =============== LIABILITIES IN EXCESS OF OTHER ASSETS - (24.8)% $ (9,170,813) =============== NET ASSETS - 100.0% $ 36,921,925 * NON-INCOME PRODUCING SECURITIES. + ALL OR A PORTION OF THIS SECURITY IS ON LOAN AT DECEMBER 31, 2004 - SEE NOTE 8. See Notes to Financial Statements. 138 | THE RYDEX VARIABLE TRUST ANNUAL REPORT SCHEDULE OF INVESTMENTS December 31, 2004 - -------------------------------------------------------------------------------- LEISURE FUND - -------------------------------------------------------------------------------- MARKET VALUE SHARES (NOTE 1) - ------------------------------------------------------------------------------ COMMON STOCKS 99.5% Time Warner, Inc.*+ 160,502 $ 3,120,159 Viacom, Inc. -- Class B 83,030 3,021,462 McDonald's Corp. 83,089 2,663,833 Walt Disney Co.+ 81,644 2,269,703 Electronic Arts, Inc.*+ 36,470 2,249,470 Marriott International, Inc. -- Class A 30,300 1,908,294 Yum! Brands, Inc.+ 38,295 1,806,758 Fox Entertainment Group, Inc. -- Class A* 57,262 1,790,010 Hilton Hotels Corp. 71,245 1,620,111 Harrah's Entertainment, Inc.+ 23,393 1,564,758 Carnival Corp.+ 26,313 1,516,418 Starbucks Corp.*+ 23,849 1,487,224 Caesars Entertainment, Inc.* 72,126 1,452,618 Brunswick Corp. 25,650 1,269,675 Mandalay Resort Group 17,800 1,253,654 Wendy's International, Inc. 31,189 1,224,480 Hasbro, Inc.+ 59,663 1,156,269 GTECH Holdings Corp. 44,384 1,151,765 Choice Hotels International, Inc. 18,498 1,072,884 Applebee's International, Inc. 39,680 1,049,536 Sonic Corp.* 34,340 1,047,370 International Game Technology, Inc. 30,076 1,034,013 International Speedway Corp. -- Class A 19,129 1,010,011 Krispy Kreme Doughnuts, Inc.*+ 78,155 984,753 Outback Steakhouse, Inc. 21,066 964,401 CEC Entertainment, Inc.* 23,796 951,126 Activision, Inc.* 46,965 947,754 Eastman Kodak Co.+ 29,075 937,669 Nautilus Group, Inc. 37,875 915,439 Jakks Pacific, Inc.*+ 41,135 909,495 Multimedia Games, Inc.* 57,245 902,181 Mattel, Inc. 35,244 686,905 4Kids Entertainment, Inc.* 32,608 685,420 Ruby Tuesday, Inc.+ 22,927 597,936 Starwood Hotels & Resorts Worldwide, Inc.+ 9,412 549,661 MARKET VALUE SHARES (NOTE 1) - ------------------------------------------------------------------------------ Jack in the Box, Inc.*+ 14,475 $ 533,693 Brinker International, Inc.*+ 14,842 520,509 MGM Mirage, Inc.*+ 6,240 453,898 Arctic Cat, Inc. 15,013 398,145 Ryan's Restaurant Group, Inc.* 22,850 352,347 Bally Total Fitness Holding Corp.* 63,066 267,400 Marcus Corp. 9,905 249,012 Wynn Resorts Ltd.*+ 2,700 180,684 Pixar*+ 1,760 150,674 THQ, Inc.* 5,280 121,123 Darden Restaurants, Inc. 4,096 113,623 Shuffle Master, Inc.*+ 2,060 97,026 Meade Instruments Corp.* 24,405 83,709 Polaris Industries, Inc. 922 62,714 Boyd Gaming Corp. 1,490 62,058 Station Casinos, Inc. 1,020 55,774 --------------- TOTAL COMMON STOCKS (Cost $45,888,671) 51,475,604 --------------- FACE AMOUNT ------------- REPURCHASE AGREEMENT 0.5% Repurchase Agreement (Note 5) 1.55% due 01/03/05 $ 282,580 282,580 --------------- TOTAL REPURCHASE AGREEMENT (Cost $282,580) 282,580 --------------- SECURITIES LENDING COLLATERAL 16.9% Investment in Securities Lending Short Term Investment Portfolio held by U.S. Bank (Note 8) 8,723,961 8,723,961 --------------- TOTAL SECURITIES LENDING COLLATERAL (Cost $8,723,961) 8,723,961 --------------- TOTAL INVESTMENTS 116.9% (Cost $54,895,212) $ 60,482,145 =============== LIABILITIES IN EXCESS OF OTHER ASSETS - (16.9)% $ (8,727,257) =============== NET ASSETS - 100.0% $ 51,754,888 * NON-INCOME PRODUCING SECURITIES. + ALL OR A PORTION OF THIS SECURITY IS ON LOAN AT DECEMBER 31, 2004 - SEE NOTE 8. See Notes to Financial Statements. THE RYDEX VARIABLE TRUST ANNUAL REPORT | 139 SCHEDULE OF INVESTMENTS December 31, 2004 - -------------------------------------------------------------------------------- PRECIOUS METALS FUND - -------------------------------------------------------------------------------- MARKET VALUE SHARES (NOTE 1) - ------------------------------------------------------------------------------ COMMON STOCKS 99.3% Newmont Mining Corp.+ 109,886 $ 4,880,037 Freeport-McMoRan Copper & Gold, Inc. -- Class B+ 92,216 3,525,418 Barrick Gold Corp.+ 91,950 2,227,029 Placer Dome, Inc.+ 102,999 1,942,561 AngloGold Ashanti Ltd. - SP ADR+ 50,532 1,836,838 Gold Fields Ltd. - SP ADR+ 131,492 1,641,020 Goldcorp, Inc.+ 107,422 1,615,627 Harmony Gold Mining Co. Ltd. - SP ADR+ 169,243 1,568,883 Pan American Silver Corp.* 74,078 1,183,766 Meridian Gold, Inc.* 61,198 1,160,926 Coeur d'Alene Mines Corp.*+ 288,067 1,132,103 Wheaton River Minerals Ltd.*+ 327,012 1,066,059 Kinross Gold Corp.*+ 151,041 1,063,329 Glamis Gold Ltd.* 61,098 1,048,442 Bema Gold Corp.*+ 325,881 997,196 Golden Star Resources Ltd.* 240,246 963,386 Agnico-Eagle Mines Ltd. 67,288 925,210 Stillwater Mining Co.* 81,712 920,077 Silver Standard Resources, Inc.*+ 74,710 903,095 Hecla Mining Co.* 147,480 859,808 Apex Silver Mines Ltd.* 47,647 818,575 DRDGOLD Ltd. - SP ADR*+ 516,926 796,066 Randgold Resources Ltd. - SP ADR*+ 56,197 640,646 Cambior, Inc.* 210,859 562,994 Novagold Resources, Inc.* 68,072 527,558 --------------- TOTAL COMMON STOCKS (Cost $28,644,179) 34,806,649 --------------- MARKET FACE VALUE AMOUNT (NOTE 1) - ------------------------------------------------------------------------------ REPURCHASE AGREEMENT 0.6% Repurchase Agreement (Note 5) 1.55% due 01/03/05 $ 203,849 $ 203,849 --------------- TOTAL REPURCHASE AGREEMENT (Cost $203,849) 203,849 --------------- SECURITIES LENDING COLLATERAL 30.1% Investment in Securities Lending Short Term Investment Portfolio Held by U.S. Bank (Note 8) 10,550,450 10,550,450 --------------- TOTAL SECURITIES LENDING COLLATERAL (Cost $10,550,450) 10,550,450 --------------- TOTAL INVESTMENTS 130.0% (Cost $39,398,478) $ 45,560,948 =============== LIABILITIES IN EXCESS OF OTHER ASSETS - (30.0)% $ (10,517,878) =============== NET ASSETS - 100.0% $ 35,043,070 * NON-INCOME PRODUCING SECURITIES. + ALL OR A PORTION OF THIS SECURITY IS ON LOAN AT DECEMBER 31, 2004 - SEE NOTE 8. ADR--AMERICAN DEPOSITORY RECEIPT. SEE NOTES TO FINANCIAL STATEMENTS. 140 | THE RYDEX VARIABLE TRUST ANNUAL REPORT SCHEDULE OF INVESTMENTS December 31, 2004 - -------------------------------------------------------------------------------- REAL ESTATE FUND - -------------------------------------------------------------------------------- MARKET VALUE SHARES (NOTE 1) - ------------------------------------------------------------------------------ COMMON STOCKS 99.5% Simon Property Group, Inc.+ 10,433 $ 674,704 Equity Office Properties Trust 20,411 594,368 Equity Residential 16,391 593,026 Vornado Realty Trust+ 7,145 543,949 ProLogis 11,706 507,221 General Growth Properties, Inc. 13,737 496,730 Plum Creek Timber (REIT) Co., Inc. 12,095 464,932 Boston Properties, Inc. 7,156 462,779 Archstone-Smith Trust+ 11,911 456,191 Public Storage, Inc. 8,084 450,683 Host Marriott Corp.+ 25,910 448,243 AvalonBay Communities, Inc.+ 5,794 436,288 KIMCO Realty Corp. 7,495 434,635 St Joe Co.+ 6,530 419,226 iStar Financial, Inc. 8,420 381,089 Developers Diversified Realty Corp.+ 8,475 376,036 Duke Realty Corp. 10,857 370,658 Regency Centers Corp. 6,230 345,142 United Dominion Realty Trust, Inc. 13,896 344,621 Mills Corp.+ 5,370 342,391 Macerich Co. 5,383 338,052 Weingarten Realty Investors 8,355 335,035 AMB Property Corp.+ 8,143 328,896 Liberty Property Trust 7,563 326,722 Apartment Investment & Management Co. -- Class A 8,467 326,318 Health Care Property Investors, Inc. 11,684 323,530 Hospitality Properties Trust 6,632 305,072 Pan Pacific Retail Properties, Inc. 4,789 300,270 Catellus Development Corp. 9,750 298,350 Arden Realty, Inc.+ 7,461 281,429 Federal Realty Investment Trust 5,436 280,769 Trizec Properties, Inc. 14,830 280,584 Friedman Billings Ramsey Group, Inc. -- Class A+ 14,260 276,501 Reckson Associates Realty Corp. 8,394 275,407 CBL & Associates Properties, Inc. 3,581 273,409 SL Green Realty Corp. 4,490 271,869 Mack-Cali Realty Corp. 5,878 270,564 CenterPoint Properties Trust 5,640 270,100 Camden Property Trust 5,270 268,770 Realty Income Corp. 5,282 267,164 HRPT Properties Trust 20,660 265,068 New Plan Excel Realty Trust 9,768 264,517 Essex Property Trust, Inc. 3,070 257,266 Crescent Real Estate EQT Co.+ 13,954 254,800 Annaly Mortgage Management, Inc.+ 12,940 253,883 MARKET VALUE SHARES (NOTE 1) - ------------------------------------------------------------------------------ Rayonier, Inc. 5,190 $ 253,843 Ventas, Inc. 9,220 252,720 Thornburg Mortgage, Inc.+ 8,672 251,141 First Industrial Realty Trust, Inc. 5,949 242,303 Shurgard Storage Centers, Inc. -- Class A 5,490 241,615 Healthcare Realty Trust, Inc. 5,870 238,909 BRE Properties -- Class A 5,854 235,975 Forest City Enterprises, Inc. -- Class A 4,018 231,236 Health Care REIT, Inc. 6,006 229,129 Highwoods Properties, Inc. 8,049 222,957 Nationwide Health Properties, Inc. 9,303 220,946 Alexandria Real Estate Equities, Inc. 2,968 220,879 Washington Real Estate Investment Trust 6,381 216,124 Home Properties, Inc. 4,936 212,248 Prentiss Properties Trust 5,437 207,693 Capital Automotive REIT 5,792 205,761 Taubman Centers, Inc. 6,804 203,780 Brandywine Realty Trust 6,836 200,910 CarrAmerica Realty Corp. 6,053 199,749 Entertainment Properties Trust 4,436 197,624 Cousins Properties, Inc. 6,449 195,211 Pennsylvania Real Estate Investment Trust 4,534 194,055 Commercial Net Lease Realty 9,290 191,374 Lexington Corporate Properties Trust 8,339 188,295 Kilroy Realty Corp. 4,393 187,801 PS Business Parks, Inc. 4,148 187,075 Gables Residential Trust 5,133 183,710 Heritage Property Investment Trust 5,538 177,714 Summit Properties, Inc. 5,426 176,671 Meristar Hospitality Corp.* 21,072 175,951 FelCor Lodging Trust, Inc.* 11,993 175,697 Colonial Properties Trust 4,373 171,728 Post Properties, Inc. 4,901 171,045 Glimcher Realty Trust 5,980 165,706 Corporate Office Properties Trust SBI/MD 5,614 164,771 LaSalle Hotel Properties 5,166 164,434 Sun Communities, Inc. 3,944 158,746 Sovran Self Storage, Inc. 3,641 153,432 Kramont Realty Trust 6,428 150,415 Equity Lifestyle Properties, Inc. 4,185 149,614 Eastgroup Properties 3,892 149,141 National Health Investors, Inc. 5,092 148,585 Saul Centers, Inc. 3,768 144,126 See Notes to Financial Statements. THE RYDEX VARIABLE TRUST ANNUAL REPORT | 141 SCHEDULE OF INVESTMENTS (CONCLUDED) December 31, 2004 - -------------------------------------------------------------------------------- REAL ESTATE FUND - -------------------------------------------------------------------------------- MARKET VALUE SHARES (NOTE 1) - ------------------------------------------------------------------------------ Equity Inns, Inc. 12,221 $ 143,475 Mid-America Apartment Communities, Inc. 3,425 141,178 AMLI Residential Properties Trust 4,390 140,480 Tanger Factory Outlet Centers, Inc. 5,296 140,132 Parkway Properties, Inc./MD 2,672 135,604 Glenborough Realty Trust, Inc. 6,339 134,894 CRT Properties, Inc. 5,579 133,115 Ramco-Gershenson Properties 4,071 131,290 Innkeepers USA Trust 9,116 129,447 Cornerstone Realty Income Trust, Inc. 11,668 116,447 Town & Country Trust 4,170 115,217 US Restaurant Properties, Inc. 6,221 112,351 Winston Hotels, Inc. 8,901 105,121 Bedford Property Investors, Inc. 3,670 104,265 Correctional Properties Trust 3,497 100,993 Urstadt Biddle Properties, Inc. 5,170 88,149 Associated Estates Realty Corp. 6,452 65,939 --------------- TOTAL COMMON STOCKS (Cost $21,734,449) 26,786,193 --------------- FACE AMOUNT ------------- REPURCHASE AGREEMENT 0.1% Repurchase Agreement (Note 5) 1.55% due 01/03/05 $ 41,842 41,842 --------------- TOTAL REPURCHASE AGREEMENT (Cost $41,842) 41,842 --------------- SECURITIES LENDING COLLATERAL 9.1% Investment in Securities Lending Short Term Investment Portfolio held by U.S. Bank (Note 8) 2,438,689 2,438,689 --------------- TOTAL SECURITIES LENDING COLLATERAL (Cost $2,438,689) 2,438,689 --------------- TOTAL INVESTMENTS 108.7% (Cost $24,214,980) $ 29,266,724 =============== LIABILITIES IN EXCESS OF OTHER ASSETS - (8.7)% $ (2,351,533) =============== NET ASSETS - 100.0% $ 26,915,191 * NON-INCOME PRODUCING SECURITIES. + ALL OR A PORTION OF THIS SECURITY IS ON LOAN AT DECEMBER 31, 2004 - SEE NOTE 8. REIT - REAL ESTATE INVESTMENT TRUST. SEE NOTES TO FINANCIAL STATEMENTS. 142 | THE RYDEX VARIABLE TRUST ANNUAL REPORT SCHEDULE OF INVESTMENTS December 31, 2004 - -------------------------------------------------------------------------------- RETAILING FUND - -------------------------------------------------------------------------------- MARKET VALUE SHARES (NOTE 1) - ------------------------------------------------------------------------------ COMMON STOCKS 99.4% Wal-Mart Stores, Inc. 28,040 $ 1,481,073 Home Depot, Inc. 25,070 1,071,492 eBay, Inc.*+ 9,045 1,051,753 Lowe's Cos., Inc.+ 13,828 796,354 Target Corp. 13,063 678,362 Costco Wholesale Corp.+ 13,110 634,655 InterActiveCorp*+ 22,590 623,936 Amazon.com, Inc.*+ 13,535 599,465 The Gap, Inc.+ 28,015 591,677 Staples, Inc.+ 17,284 582,644 TJX Cos., Inc.+ 21,225 533,384 JC Penney Holding Co., Inc.+ 12,264 507,730 AutoZone, Inc.*+ 5,135 468,877 Nordstrom, Inc. 9,720 454,216 Chico's FAS, Inc.*+ 9,549 434,766 Abercrombie & Fitch Co. -- Class A 9,075 426,071 Office Depot, Inc.*+ 24,525 425,754 Sherwin-Williams Co. 9,320 415,952 American Eagle Outfitters, Inc. 8,288 390,365 Weight Watchers International, Inc.*+ 9,500 390,165 Walgreen Co. 9,240 354,539 OfficeMax, Inc.+ 11,009 345,462 Sears Roebuck and Co.+ 6,718 342,819 Regis Corp. 7,324 338,003 Rent-A-Center, Inc.* 12,570 333,105 Urban Outfitters, Inc.* 7,290 323,676 Aeropostale, Inc.* 10,940 321,964 Claire's Stores, Inc. 15,069 320,216 Insight Enterprises, Inc.* 14,477 297,068 Movie Gallery, Inc.+ 15,120 288,338 Building Material Holding Corp. 7,378 282,504 Select Comfort Corp.* 14,074 252,487 Kmart Holding Corp.*+ 2,465 243,912 Foot Locker, Inc. 8,600 231,598 Advanced Marketing Services, Inc. 22,122 222,547 BJ's Wholesale Club, Inc.*+ 7,549 219,902 NeighborCare, Inc.* 7,130 219,034 Pacific Sunwear of California, Inc.*+ 9,510 211,693 PETCO Animal Supplies, Inc.* 5,340 210,823 United Auto Group, Inc. 7,070 209,201 Bed Bath & Beyond, Inc.*+ 5,053 201,261 Sonic Automotive, Inc. 8,100 200,880 MARKET VALUE SHARES (NOTE 1) - ------------------------------------------------------------------------------ ShopKo Stores, Inc.* 10,434 $ 194,907 AutoNation, Inc.*+ 10,070 193,445 Best Buy Co., Inc. 3,101 184,261 Bebe Stores, Inc. 6,660 179,687 CVS Corp. 3,950 178,026 Petsmart, Inc.+ 4,551 161,697 Kohl's Corp.*+ 2,894 142,298 Too, Inc.* 5,700 139,422 Netflix, Inc.*+ 10,140 125,026 Federated Department Stores, Inc. 1,735 100,266 Limited Brands, Inc. 4,299 98,963 Talbots, Inc. 3,630 98,845 Aaron Rents, Inc. 3,580 89,500 May Department Stores Co.+ 2,152 63,269 Genuine Parts Co. 1,180 51,991 Payless Shoesource, Inc.* 2,540 31,242 Coldwater Creek, Inc.* 940 29,018 WESCO International, Inc.* 940 27,862 RadioShack Corp.+ 680 22,358 Dollar General Corp. 1,000 20,770 Christopher & Banks Corp.+ 950 17,527 --------------- TOTAL COMMON STOCKS (Cost $16,850,399) 20,680,103 --------------- FACE AMOUNT ------------- REPURCHASE AGREEMENT 0.4% Repurchase Agreement (Note 5) 1.55% due 01/03/05 $ 75,212 75,212 --------------- TOTAL REPURCHASE AGREEMENT (Cost $75,212) 75,212 --------------- SECURITIES LENDING COLLATERAL 19.0% Investment in Securities Lending Short Term Investment Portfolio Held by U.S. Bank (Note 8) 3,955,244 3,955,244 --------------- TOTAL SECURITIES LENDING COLLATERAL (Cost $3,955,244) 3,955,244 --------------- TOTAL INVESTMENTS 118.8% (Cost $20,880,855) $ 24,710,559 =============== LIABILITIES IN EXCESS OF OTHER ASSETS - (18.8)% $ (3,910,170) =============== NET ASSETS - 100.0% $ 20,800,389 * NON-INCOME PRODUCING SECURITIES. + ALL OR A PORTION OF THIS SECURITY IS ON LOAN AT DECEMBER 31, 2004 - SEE NOTE 8. See Notes to Financial Statements. THE RYDEX VARIABLE TRUST ANNUAL REPORT | 143 SCHEDULE OF INVESTMENTS December 31, 2004 - -------------------------------------------------------------------------------- TECHNOLOGY FUND - -------------------------------------------------------------------------------- MARKET VALUE SHARES (NOTE 1) - ------------------------------------------------------------------------------ COMMON STOCKS 99.5% Microsoft Corp. 62,822 $ 1,677,976 Intel Corp. 45,394 1,061,766 Cisco Systems, Inc.* 50,671 977,950 Dell, Inc.* 22,870 963,742 International Business Machines Corp. 9,246 911,471 Oracle Corp.* 59,698 819,057 Hewlett-Packard Co. 30,977 649,588 Motorola, Inc.+ 31,588 543,314 Qualcomm, Inc. 11,568 490,483 EMC Corp./MA* 29,750 442,382 Yahoo!, Inc.*+ 11,150 420,132 Applied Materials, Inc.*+ 22,622 386,836 Computer Associates International, Inc.+ 11,733 364,427 Texas Instruments, Inc.+ 14,346 353,199 First Data Corp. 8,111 345,042 Lucent Technologies, Inc.*+ 89,396 336,129 Adobe Systems, Inc. 3,595 225,550 Xerox Corp.*+ 12,706 216,129 Apple Computer, Inc.* 3,352 215,869 Broadcom Corp. -- Class A*+ 6,398 206,527 Fiserv, Inc.*+ 4,786 192,349 Agilent Technologies, Inc.* 7,817 188,390 Micron Technology, Inc.*+ 14,797 182,743 Symantec Corp.*+ 6,960 179,290 Computer Sciences Corp.*+ 3,008 169,561 Electronic Data Systems Corp. 6,681 154,331 Veritas Software Corp.* 5,361 153,057 Sun Microsystems, Inc.* 26,715 143,727 National Semiconductor Corp.+ 7,820 140,369 Comverse Technology, Inc.*+ 5,649 138,118 KLA-Tencor Corp.* 2,912 135,641 Solectron Corp.*+ 25,416 135,467 McAfee, Inc.*+ 4,636 134,119 Paychex, Inc. 3,672 125,142 Lam Research Corp.*+ 4,120 119,109 Advanced Micro Devices, Inc.*+ 5,291 116,508 Autodesk, Inc. 2,994 113,622 Alliance Data Systems Corp.* 2,379 112,955 Juniper Networks, Inc.*+ 3,990 108,488 Cadence Design Systems, Inc.*+ 7,783 107,483 CheckFree Corp.*+ 2,782 105,939 Ingram Micro, Inc. -- Class A* 4,916 102,253 BEA Systems, Inc.* 11,258 99,746 Automatic Data Processing, Inc. 2,239 99,300 Amphenol Corp. -- Class A* 2,680 98,463 MARKET VALUE SHARES (NOTE 1) - ------------------------------------------------------------------------------ TIBCO Software, Inc.*+ 7,230 $ 96,448 Molex, Inc. 3,030 90,900 Sabre Holdings Corp.+ 4,045 89,637 BMC Software, Inc.* 4,741 88,183 SunGard Data Systems, Inc.* 3,085 87,398 Sandisk Corp.* 3,420 85,397 Cognizant Technology Solutions Corp.*+ 2,016 85,337 Synopsys, Inc.* 4,188 82,169 Novell, Inc.*+ 12,093 81,628 Novellus Systems, Inc.*+ 2,825 78,789 Cree, Inc.*+ 1,940 77,755 Western Digital Corp.* 7,050 76,422 Red Hat, Inc.*+ 5,581 74,506 Microchip Technology, Inc. 2,776 74,008 Siebel Systems, Inc.* 6,772 71,106 Teradyne, Inc.*+ 4,051 69,151 Hyperion Solutions Corp.* 1,436 66,946 Iron Mountain, Inc.* 2,175 66,316 CACI International, Inc. -- Class A* 960 65,405 Jabil Circuit, Inc.* 2,521 64,487 QLogic Corp.*+ 1,749 64,241 Freescale Semiconductor, Inc. -- Class B* 3,483 63,948 Semtech Corp.* 2,689 58,808 Silicon Laboratories, Inc.* 1,660 58,615 Parametric Technology Corp.*+ 9,842 57,969 Kronos, Inc./MA* 1,130 57,777 Akamai Technologies, Inc.* 4,339 56,537 Reynolds & Reynolds Co. -- Class A 2,086 55,300 BearingPoint, Inc.* 6,830 54,845 Zebra Technologies Corp. -- Class A* 973 54,760 PMC - Sierra, Inc.*+ 4,860 54,675 Skyworks Solutions, Inc.* 5,635 53,138 Benchmark Electronics, Inc.* 1,550 52,855 Tellabs, Inc.*+ 6,147 52,803 Nvidia Corp.* 2,240 52,774 Ask Jeeves, Inc.*+ 1,946 52,055 Varian Semiconductor Equipment Associates, Inc.* 1,396 51,443 Macrovision Corp.*+ 1,880 48,354 Websense, Inc.* 903 45,800 NCR Corp.* 660 45,692 Dionex Corp.* 800 45,336 Utstarcom, Inc.* 2,042 45,230 Filenet Corp.* 1,716 44,204 Flir Systems, Inc.* 690 44,015 See Notes to Financial Statements. 144 | THE RYDEX VARIABLE TRUST ANNUAL REPORT SCHEDULE OF INVESTMENTS (CONCLUDED) December 31, 2004 - -------------------------------------------------------------------------------- TECHNOLOGY FUND - -------------------------------------------------------------------------------- MARKET VALUE SHARES (NOTE 1) - ------------------------------------------------------------------------------ Fairchild Semiconductor International, Inc.* 2,690 $ 43,739 Wind River Systems, Inc.* 3,200 43,360 Avaya, Inc.*+ 2,500 43,000 Microsemi Corp.* 2,470 42,879 Cymer, Inc.* 1,446 42,715 Plantronics, Inc. 1,014 42,051 WebEx Communications, Inc.*+ 1,754 41,710 Cypress Semiconductor Corp.*+ 3,540 41,524 Hewitt Associates, Inc. -- Class A* 1,296 41,485 DST Systems, Inc.* 780 40,654 Trimble Navigation Ltd.* 1,226 40,507 Micrel, Inc.*+ 3,675 40,498 Cabot Microelectronics Corp.* 1,010 40,450 Coherent, Inc.* 1,300 39,572 Global Imaging Systems, Inc.* 1,000 39,500 Powerwave Technologies, Inc.* 4,630 39,262 Aeroflex, Inc.* 3,130 37,936 Agere Systems, Inc.-Class B* 28,070 37,894 Andrew Corp.* 2,760 37,619 Anixter International, Inc.*+ 1,033 37,178 ADTRAN, Inc. 1,889 36,155 Mettler Toledo International, Inc.* 700 35,917 RF Micro Devices, Inc.*+ 5,227 35,753 Hutchinson Technology, Inc.* 1,030 35,607 Avocent Corp.* 860 34,847 Unisys Corp.* 3,380 34,408 Brooks Automation, Inc.* 1,980 34,096 Axcelis Technologies, Inc.* 4,185 34,024 Symbol Technologies, Inc. 1,960 33,908 Foundry Networks, Inc.* 2,529 33,282 Inter-Tel, Inc. 1,210 33,130 Littelfuse, Inc.* 960 32,794 ATMI, Inc.* 1,420 31,993 Transaction Systems Architects, Inc. -- Class A* 1,610 31,958 Integrated Device Technology, Inc.* 2,760 31,906 Xilinx, Inc. 1,072 31,785 Digital Insight Corp.* 1,710 31,464 FEI Co.*+ 1,480 31,080 Rambus, Inc.* 1,350 31,050 ViaSat, Inc.* 1,260 30,580 Lattice Semiconductor Corp.* 5,220 29,754 Harris Corp.+ 469 28,980 MARKET VALUE SHARES (NOTE 1) - ------------------------------------------------------------------------------ Harmonic, Inc.* 3,450 $ 28,773 Veeco Instruments, Inc.* 1,350 28,444 Power Integrations, Inc.* 1,380 27,296 Sonic Solutions, Inc.*+ 1,170 26,255 Agilsys, Inc. 1,496 25,641 Dupont Photomasks, Inc.* 970 25,618 Itron, Inc.* 1,060 25,345 Photronics, Inc.* 1,520 25,080 FindWhat.com*+ 1,400 24,822 Synaptics, Inc.* 800 24,464 McData Corp. -- Class A* 4,030 24,019 Quantum Corp.*+ 9,000 23,580 CTS Corp. 1,760 23,390 Daktronics, Inc.* 910 22,650 Ultratech, Inc.* 1,200 22,620 BEI Technologies, Inc. 720 22,234 Methode Electronics, Inc. -- Class A 1,730 22,230 Symmetricom, Inc.* 2,210 21,459 MapInfo Corp.* 1,129 13,525 Mercury Interactive Corp.*+ 90 4,100 --------------- TOTAL COMMON STOCKS (Cost $17,116,200) 19,806,450 --------------- FACE AMOUNT ------------- REPURCHASE AGREEMENT 0.6% Repurchase Agreement (Note 5) 1.55% due 01/03/05 $ 125,777 125,777 --------------- TOTAL REPURCHASE AGREEMENT (Cost $125,777) 125,777 --------------- SECURITIES LENDING COLLATERAL 11.1% Investment in Securities Lending Short Term Investment Portfolio Held by U.S. Bank (Note 8) 2,213,108 2,213,108 --------------- TOTAL SECURITIES LENDING COLLATERAL (Cost $2,213,108) 2,213,108 --------------- TOTAL INVESTMENTS 111.2% (Cost $19,455,085) $ 22,145,335 =============== LIABILITIES IN EXCESS OF OTHER ASSETS - (11.2)% $ (2,226,570) =============== NET ASSETS - 100.0% $ 19,918,765 * NON-INCOME PRODUCING SECURITIES. + ALL OR A PORTION OF THIS SECURITY IS ON LOAN AT DECEMBER 31, 2004 - SEE NOTE 8. See Notes to Financial Statements. THE RYDEX VARIABLE TRUST ANNUAL REPORT | 145 SCHEDULE OF INVESTMENTS December 31, 2004 - -------------------------------------------------------------------------------- TELECOMMUNICATIONS FUND - -------------------------------------------------------------------------------- MARKET VALUE SHARES (NOTE 1) - ------------------------------------------------------------------------------ COMMON STOCKS 99.5% Cisco Systems, Inc.* 112,460 $ 2,170,478 Vodafone Group PLC - SP ADR+ 71,030 1,944,802 SBC Communications, Inc. 62,740 1,616,810 Nokia OYJ - SP ADR+ 98,530 1,543,965 Verizon Communications, Inc. 35,190 1,425,547 Qualcomm, Inc. 32,050 1,358,920 Motorola, Inc.+ 70,320 1,209,504 BellSouth Corp. 42,460 1,179,963 Telefonaktiebolaget LM Ericsson - SP ADR* 35,395 1,114,589 Lucent Technologies, Inc.*+ 291,170 1,094,799 Sprint Corp.+ 37,450 930,633 CenturyTel, Inc.+ 21,120 749,126 Alcatel SA - SP ADR*+ 47,780 746,801 Comverse Technology, Inc.* 30,280 740,346 Alltel Corp. 12,030 706,883 Nextel Communications, Inc. -- Class A* 22,440 673,200 Juniper Networks, Inc.*+ 24,080 654,735 Crown Castle International Corp.* 36,508 607,493 Telephone & Data Systems, Inc.+ 5,940 457,083 AT&T Corp.+ 23,851 454,600 American Tower Corp. -- Class A*+ 22,900 421,360 Qwest Communications International, Inc.* 76,310 338,816 Spectrasite, Inc.* 5,810 336,399 Avaya, Inc.*+ 19,200 330,240 Citizens Communications Co. 23,529 324,465 Scientific-Atlanta, Inc.+ 9,640 318,216 NII Holdings, Inc. -- Class B* 6,230 295,614 U.S. Cellular Corp.* 6,480 290,045 Utstarcom, Inc.* 12,710 281,527 Harris Corp.+ 4,330 267,551 Tellabs, Inc.*+ 30,062 258,231 Andrew Corp.* 18,217 248,298 CIENA Corp.* 72,500 242,150 Foundry Networks, Inc.* 18,106 238,275 ADC Telecommunications, Inc.* 88,790 237,957 IDT Corp. -- Class B* 15,370 237,928 Level 3 Communications, Inc.*+ 68,070 230,757 MARKET VALUE SHARES (NOTE 1) - ------------------------------------------------------------------------------ General Communication -- Class A* 20,680 $ 228,307 Corning, Inc.*+ 19,000 223,630 Avocent Corp.* 5,500 222,860 JDS Uniphase Corp.*+ 63,390 200,946 Nextel Partners, Inc. -- Class A*+ 9,940 194,228 Western Wireless Corp.* 6,220 182,246 Plantronics, Inc. 4,390 182,053 Interdigital Communications Corp.* 8,140 179,894 Powerwave Technologies, Inc.* 21,120 179,098 ADTRAN, Inc. 9,320 178,385 Harmonic, Inc.* 19,500 162,630 3Com Corp.* 37,760 157,459 Freescale Semiconductor, Inc. -- Class B* 7,759 142,455 F5 Networks, Inc.* 2,770 134,954 Boston Communications Group, Inc.* 13,590 125,572 Inter-Tel, Inc. 4,490 122,936 ViaSat, Inc.* 4,342 105,380 Network Equipment Technologies, Inc.* 9,490 93,192 Digi International, Inc.* 5,290 90,935 Commonwealth Telephone Enterprises, Inc.* 1,620 80,449 C-COR, Inc.* 8,152 75,814 Black Box Corp.+ 1,370 65,787 Symmetricom, Inc.* 6,558 63,678 Brooktrout, Inc.* 4,820 57,888 SCM Microsystems, Inc.* 11,619 56,701 Tollgrade Communications, Inc.* 4,230 51,775 Tele Leste Celular Participacoes SA - SP ADR* 3,628 44,080 PC-Tel, Inc.* 5,290 41,950 Audiovox Corp. -- Class A* 2,050 32,349 Polycom, Inc.* 1,320 30,782 Tekelec* 1,370 28,003 McData Corp. -- Class A* 2,740 16,330 --------------- TOTAL COMMON STOCKS (Cost $25,171,532) 30,030,852 --------------- See Notes to Financial Statements. 146 | THE RYDEX VARIABLE TRUST ANNUAL REPORT SCHEDULE OF INVESTMENTS (CONCLUDED) December 31, 2004 - -------------------------------------------------------------------------------- TELECOMMUNICATIONS FUND - -------------------------------------------------------------------------------- MARKET FACE VALUE AMOUNT (NOTE 1) - ------------------------------------------------------------------------------ REPURCHASE AGREEMENT 0.1% Repurchase Agreement (Note 5) 1.55% due 01/03/05 $ 48,935 $ 48,935 --------------- TOTAL REPURCHASE AGREEMENT (Cost $48,935) 48,935 --------------- SECURITIES LENDING COLLATERAL 17.6% Investment in Securities Lending Short Term Investment Portfolio held by U.S. Bank (Note 8) 5,312,502 5,312,502 --------------- TOTAL SECURITIES LENDING COLLATERAL (Cost $5,312,502) 5,312,502 --------------- TOTAL INVESTMENTS 117.2% (Cost $30,532,969) $ 35,392,289 =============== LIABILITIES IN EXCESS OF OTHER ASSETS - (17.2)% $ (5,201,509) =============== NET ASSETS - 100.0% $ 30,190,780 * NON-INCOME PRODUCING SECURITIES. + ALL OR A PORTION OF THIS SECURITY IS ON LOAN AT DECEMBER 31, 2004 - SEE NOTE 8. ADR--AMERICAN DEPOSITORY RECEIPT. See Notes to Financial Statements. THE RYDEX VARIABLE TRUST ANNUAL REPORT | 147 SCHEDULE OF INVESTMENTS December 31, 2004 - -------------------------------------------------------------------------------- TRANSPORTATION FUND - -------------------------------------------------------------------------------- MARKET VALUE SHARES (NOTE 1) - ------------------------------------------------------------------------------ COMMON STOCKS 99.6% United Parcel Service, Inc. -- Class B+ 65,225 $ 5,574,128 FedEx Corp.+ 38,047 3,747,249 Norfolk Southern Corp. 84,752 3,067,175 Burlington Northern Santa Fe Corp. 60,456 2,860,173 Union Pacific Corp. 40,660 2,734,385 Southwest Airlines Co. 161,059 2,622,041 CNF, Inc. 37,686 1,888,069 CSX Corp.+ 45,600 1,827,648 J.B. Hunt Transport Services, Inc. 34,637 1,553,469 Yellow Roadway Corp.*+ 24,559 1,368,182 Arkansas Best Corp. 29,038 1,303,516 Alaska Air Group, Inc.*+ 37,311 1,249,545 Swift Transportation Co., Inc.*+ 55,420 1,190,422 Ryder System, Inc.+ 24,483 1,169,553 Expeditors International Washington, Inc.+ 19,866 1,110,112 Landstar System, Inc.* 14,912 1,098,120 Kansas City Southern*+ 59,208 1,049,758 SkyWest, Inc. 51,919 1,041,495 Delta Air Lines, Inc.*+ 119,156 891,287 EGL, Inc.*+ 28,075 839,162 C.H. Robinson Worldwide, Inc.+ 14,841 823,972 JetBlue Airways Corp.*+ 35,269 818,946 AMR Corp.*+ 73,170 801,211 Alexander & Baldwin, Inc.+ 17,428 739,296 Kirby Corp.* 15,881 704,799 AirTran Holdings, Inc.* 56,508 604,636 Heartland Express, Inc. 24,430 548,942 Genesee & Wyoming, Inc. -- Class A* 15,830 445,298 Frontier Airlines, Inc.* 37,899 432,428 Canadian Pacific Railway Ltd. 10,866 373,899 Mesa Air Group, Inc.*+ 46,495 369,170 Overnite Corp. 7,440 277,066 Forward Air Corp.* 6,137 274,324 Knight Transportation, Inc. 10,695 265,236 MARKET VALUE SHARES (NOTE 1) - ------------------------------------------------------------------------------ Werner Enterprises, Inc. 10,906 $ 246,912 U.S. Xpress Enterprises -- Class A* 7,375 216,088 SCS Transportation, Inc.* 8,376 195,747 Florida East Coast Industries, Inc. 3,390 152,889 Pinnacle Airlines Corp.* 9,110 126,993 FLYi, Inc.*+ 71,708 126,923 Pacer International, Inc.* 4,013 85,316 Lan Airlines SA-SP ADR 2,580 83,076 Gol Linhas Aereas Inteligentes SA - SP ADR* 2,088 66,565 HUB Group, Inc. -- Class A*+ 1,188 62,037 Sirva, Inc.* 2,372 45,590 CP Ships Ltd. 2,820 40,467 Ryanair Holdings PLC - SP ADR* 690 28,118 --------------- TOTAL COMMON STOCKS (Cost $38,638,583) 47,141,433 --------------- FACE AMOUNT ------------- REPURCHASE AGREEMENT 0.5% Repurchase Agreement (Note 5) 1.55% due 01/03/05 $ 226,985 226,985 --------------- TOTAL REPURCHASE AGREEMENT (Cost $226,985) 226,985 --------------- SECURITIES LENDING COLLATERAL 22.2% Investment in Securities Lending Short Term Investment Portfolio held by U.S. Bank (Note 8) 10,519,806 10,519,806 --------------- TOTAL SECURITIES LENDING COLLATERAL (Cost $10,519,806) 10,519,806 --------------- TOTAL INVESTMENTS 122.3% (Cost $49,385,374) $ 57,888,224 =============== LIABILITIES IN EXCESS OF OTHER ASSETS - (22.3)% $ (10,554,795) =============== NET ASSETS - 100.0% $ 47,333,429 * NON-INCOME PRODUCING SECURITIES. + ALL OR A PORTION OF THIS SECURITY IS ON LOAN AT DECEMBER 31, 2004 - SEE NOTE 8. ADR--AMERICAN DEPOSITORY RECEIPT. See Notes to Financial Statements. 148 | THE RYDEX VARIABLE TRUST ANNUAL REPORT SCHEDULE OF INVESTMENTS December 31, 2004 - -------------------------------------------------------------------------------- UTILITIES FUND - -------------------------------------------------------------------------------- MARKET VALUE SHARES (NOTE 1) - ------------------------------------------------------------------------------ COMMON STOCKS 99.6% Exelon Corp.+ 22,824 $ 1,005,869 FirstEnergy Corp. 18,631 736,111 Consolidated Edison, Inc. 16,714 731,237 Progress Energy, Inc.+ 15,469 699,818 Public Service Enterprise Group, Inc.+ 13,470 697,342 Constellation Energy Group, Inc. 15,097 659,890 TXU Corp.+ 10,004 645,858 DTE Energy Co.+ 14,009 604,208 Pinnacle West Capital Corp. 13,200 586,212 Energy East Corp. 21,894 584,132 Duke Energy Corp.+ 22,807 577,701 KeySpan Corp.+ 14,531 573,248 PG&E Corp.*+ 16,933 563,530 Xcel Energy, Inc.+ 30,143 548,603 OGE Energy Corp.+ 19,402 514,347 Atmos Energy Corp. 18,254 499,247 Northeast Utilities 26,127 492,494 MDU Resources Group, Inc. 17,872 476,825 Cleco Corp.+ 22,576 457,390 UGI Corp. 11,112 454,592 AES Corp.* 32,530 444,685 Pepco Holdings, Inc.+ 20,086 428,234 Entergy Corp.+ 6,094 411,893 Oneok, Inc.+ 14,162 402,484 Equitable Resources, Inc. 6,482 393,198 American States Water Co. 14,746 383,396 Great Plains Energy, Inc.+ 12,332 373,413 NRG Energy, Inc.* 9,925 357,796 Edison International 11,120 356,174 Dominion Resources, Inc./VA+ 4,994 338,294 Southern Union Co.*+ 14,026 336,331 Southern Co.+ 9,748 326,753 American Electric Power Co., Inc.+ 9,498 326,161 Reliant Resources, Inc.*+ 23,335 318,523 IDACORP, Inc. 9,923 303,346 Unisource Energy Corp. 11,412 275,143 PPL Corp. 4,716 251,268 Duquesne Light Holdings, Inc.+ 13,070 246,369 CenterPoint Energy, Inc.+ 21,197 239,526 Allegheny Energy, Inc.*+ 11,790 232,381 MARKET VALUE SHARES (NOTE 1) - ------------------------------------------------------------------------------ Sierra Pacific Resources*+ 21,605 $ 226,853 Questar Corp. 4,439 226,211 CMS Energy Corp.* 21,480 224,466 UIL Holding Corp. 4,161 213,459 FPL Group, Inc.+ 2,407 179,923 Calpine Corp.*+ 41,710 164,337 Cascade Natural Gas Corp. 6,835 144,902 AGL Resources, Inc. 4,211 139,974 Energen Corp. 2,215 130,574 Laclede Group, Inc. 3,980 123,977 TECO Energy, Inc.+ 7,907 121,293 Green Mountain Power Corp. 4,172 120,279 WPS Resources Corp. 2,385 119,155 DPL, Inc. 4,041 101,470 El Paso Electric Co.* 5,187 98,242 Aquila, Inc.* 26,612 98,198 Piedmont Natural Gas Co.+ 4,179 97,120 Sempra Energy+ 2,523 92,544 Ameren Corp.+ 1,605 80,475 PNM Resources, Inc. 2,798 70,761 Dynegy, Inc. -- Class A*+ 12,946 59,811 SCANA Corp. 1,220 48,068 Hawaiian Electric Industries, Inc. 1,306 38,070 Cinergy Corp.+ 719 29,932 NiSource, Inc. 310 7,062 --------------- TOTAL COMMON STOCKS (Cost $19,544,521) 21,811,178 --------------- FACE AMOUNT ------------- SECURITIES LENDING COLLATERAL 23.5% Investment in Securities Lending Short Term Investment Portfolio held by U.S. Bank (Note 8) $ 5,145,991 5,145,991 --------------- TOTAL SECURITIES LENDING COLLATERAL (Cost $5,145,991) 5,145,991 --------------- TOTAL INVESTMENTS 123.1% (Cost $24,690,512) $ 26,957,169 =============== LIABILITIES IN EXCESS OF OTHER ASSETS - (23.1)% $ (5,054,977) =============== NET ASSETS - 100.0% $ 21,902,192 * NON-INCOME PRODUCING SECURITIES. + ALL OR A PORTION OF THIS SECURITY IS ON LOAN AT DECEMBER 31, 2004 - SEE NOTE 8. See Notes to Financial Statements. THE RYDEX VARIABLE TRUST ANNUAL REPORT | 149 STATEMENTS OF ASSETS AND LIABILITIES - --------------------------------------------------------------------------------
NOVA URSA OTC ARKTOS FUND FUND FUND FUND - --------------------------------------------------------------------------------------------------------------------------------- ASSETS Securities at Value* (Notes 1, 2, 5 and 8) $ 138,946,566 $ 17,876,296 $ 227,235,145 $ 24,148,019 Segregated Cash with Broker 5,088,000 1,024,000 1,890,000 315,000 Receivable for Equity Index Swap Settlement (Note 1) -- -- -- 11,813 Receivable for Futures Contracts Settlement (Note 1) -- 18,290 -- 1,050 Receivable for Securities Sold (Note 1) -- -- -- -- Receivable for Shares Purchased 1,163,924 209,052 1,435,156 52,864 Investment Income Receivable (Note 1) 165,495 1,066 73,055 2,078 - --------------------------------------------------------------------------------------------------------------------------------- TOTAL ASSETS 145,363,985 19,128,704 230,633,356 24,530,824 ================================================================================================================================= LIABILITIES Short Sale at Market Value -- -- -- -- Payable to cover Short Sale -- -- -- -- Payable for Equity Index Swap Settlement (Note 1) -- -- -- -- Payable for Futures Contracts Settlement (Note 1) 95,400 -- 6,300 -- Payable upon Return of Securities Loaned (Note 8) 13,804,518 -- 37,093,297 -- Payable for Securities Purchased (Note 1) 998,735 -- 1,494,757 -- Liability for Shares Redeemed 104,100 1,258 282,772 539,094 Investment Advisory Fee Payable (Note 3) 78,768 17,694 122,089 21,789 Transfer Agent Fee Payable (Note 3) 26,256 4,915 40,696 6,052 Distribution and Service Fee Payable (Note 3) 26,256 4,915 40,696 6,052 Portfolio Accounting Fee Payable (Note 3) 10,502 1,966 16,279 2,421 Custody Fees Payable 2,556 471 3,907 581 Interest Payable -- -- -- -- Dividends Payable -- -- -- -- Other Liabilities 16,864 21,861 56,242 27,138 - --------------------------------------------------------------------------------------------------------------------------------- TOTAL LIABILITIES 15,163,955 53,080 39,157,035 603,127 ================================================================================================================================= NET ASSETS $ 130,200,030 $ 19,075,624 $ 191,476,321 $ 23,927,697 ================================================================================================================================= NET ASSETS CONSIST OF Paid-In Capital $ 231,827,113 $ 44,800,958 $ 561,351,335 $ 32,253,162 Undistributed Net Investment Income 362,006 -- -- -- Accumulated Net Realized Loss on Investments, Options, Equity Index Swaps, and Futures Contracts (113,222,302) (25,318,285) (417,090,949) (8,327,378) Net Unrealized Appreciation (Depreciation) on Investments, Options, Equity Index Swaps, and Futures Contracts 11,233,213 (407,049) 47,215,935 1,913 - --------------------------------------------------------------------------------------------------------------------------------- NET ASSETS $ 130,200,030 $ 19,075,624 $ 191,476,321 $ 23,927,697 ================================================================================================================================= Shares Outstanding 15,768,780 3,674,617 13,310,046 1,126,449 Net Asset Values $ 8.26 $ 5.19 $ 14.39 $ 21.24
* THE COST OF SECURITIES AT VALUE IS $128,803,643, $17,876,296, $180,188,400, $24,148,019, $28,599,102, $59,214,386, $37,044,741, $1,058,009, $109,143,539, $4,645,791, $45,988,230, AND $74,697,984, RESPECTIVELY. See Notes to Financial Statements. 150 | THE RYDEX VARIABLE TRUST ANNUAL REPORT December 31, 2004 - --------------------------------------------------------------------------------
INVERSE TITAN 500 VELOCITY 100 MEDIUS MID-CAP FUND FUND FUND FUND - --------------------------------------------------------------------------------------------------------------------------------- ASSETS Securities at Value* (Notes 1, 2, 5 and 8) $ 30,411,626 $ 63,761,358 $ 39,140,659 $ 1,058,009 Segregated Cash with Broker 2,047,620 1,713,000 1,660,289 316,507 Receivable for Equity Index Swap Settlement (Note 1) -- 206,934 842,494 -- Receivable for Futures Contracts Settlement (Note 1) -- -- 15,981 -- Receivable for Securities Sold (Note 1) -- -- -- -- Receivable for Shares Purchased 2,837,075 3,043,975 12,171 -- Investment Income Receivable (Note 1) 24,784 13,158 16,677 55 - --------------------------------------------------------------------------------------------------------------------------------- TOTAL ASSETS 35,321,105 68,738,425 41,688,271 1,374,571 ================================================================================================================================= LIABILITIES Short Sale at Market Value -- -- -- -- Payable to cover Short Sale -- -- -- -- Payable for Equity Index Swap Settlement (Note 1) -- -- -- 52,061 Payable for Futures Contracts Settlement (Note 1) 38,400 5,710 -- 880 Payable upon Return of Securities Loaned (Note 8) 600,365 6,533,954 4,234,054 -- Payable for Securities Purchased (Note 1) 5,581,161 3,688,920 -- -- Liability for Shares Redeemed -- 838,374 3,230,332 35 Investment Advisory Fee Payable (Note 3) 19,784 33,211 28,817 1,166 Transfer Agent Fee Payable (Note 3) 5,496 9,225 8,005 324 Distribution and Service Fee Payable (Note 3) 5,496 9,225 8,005 324 Portfolio Accounting Fee Payable (Note 3) 2,198 3,690 3,202 130 Custody Fees Payable 527 886 768 31 Interest Payable -- -- -- -- Dividends Payable -- -- -- -- Other Liabilities 15,024 16,428 13,545 773 - --------------------------------------------------------------------------------------------------------------------------------- TOTAL LIABILITIES 6,268,451 11,139,623 7,526,728 55,724 ================================================================================================================================= NET ASSETS $ 29,052,654 $ 57,598,802 $ 34,161,543 $ 1,318,847 ================================================================================================================================= NET ASSETS CONSIST OF Paid-In Capital $ 26,976,700 $ 55,882,056 $ 31,711,249 $ 1,726,733 Undistributed Net Investment Income 24,721 -- -- -- Accumulated Net Realized Loss on Investments, Options, Equity Index Swaps, and Futures Contracts (274,371) (3,097,125) (745,304) (367,573) Net Unrealized Appreciation (Depreciation) on Investments, Options, Equity Index Swaps, and Futures Contracts 2,325,604 4,813,871 3,195,598 (40,313) - --------------------------------------------------------------------------------------------------------------------------------- NET ASSETS $ 29,052,654 $ 57,598,802 $ 34,161,543 $ 1,318,847 ================================================================================================================================= Shares Outstanding 1,465,209 2,494,149 1,288,932 29,952 Net Asset Values $ 19.83 $ 23.09 $ 26.50 $ 44.03 INVERSE U.S. MEKROS SMALL-CAP GOVERNMENT JUNO FUND FUND BOND FUND FUND - --------------------------------------------------------------------------------------------------------------------------------- ASSETS Securities at Value* (Notes 1, 2, 5 and 8) $ 113,721,384 $ 4,645,791 $ 47,230,639 $ 74,696,990 Segregated Cash with Broker 5,883,107 587,171 749,000 170,417 Receivable for Equity Index Swap Settlement (Note 1) 1,520,092 -- -- -- Receivable for Futures Contracts Settlement (Note 1) -- 1,000 401,250 -- Receivable for Securities Sold (Note 1) -- -- 446,437 -- Receivable for Shares Purchased 116,517 -- -- 233,828 Investment Income Receivable (Note 1) 95,071 468 338,333 4,643 - --------------------------------------------------------------------------------------------------------------------------------- TOTAL ASSETS 121,336,171 5,234,430 49,165,659 75,105,878 ================================================================================================================================= LIABILITIES Short Sale at Market Value -- -- -- 31,937,746 Payable to cover Short Sale -- -- -- 719,343 Payable for Equity Index Swap Settlement (Note 1) -- 266,768 -- -- Payable for Futures Contracts Settlement (Note 1) 80,200 -- -- 92,250 Payable upon Return of Securities Loaned (Note 8) 5,310,738 -- -- -- Payable for Securities Purchased (Note 1) -- -- -- -- Liability for Shares Redeemed 3,136,921 610,661 379,336 532,456 Investment Advisory Fee Payable (Note 3) 75,202 4,013 19,091 46,919 Transfer Agent Fee Payable (Note 3) 20,890 1,115 7,636 13,033 Distribution and Service Fee Payable (Note 3) 20,890 1,115 9,545 13,033 Portfolio Accounting Fee Payable (Note 3) 8,356 446 3,818 5,213 Custody Fees Payable 2,005 107 1,094 1,251 Interest Payable -- -- -- 621,746 Dividends Payable -- -- 90 -- Other Liabilities 32,173 6,409 35,957 25,092 - --------------------------------------------------------------------------------------------------------------------------------- TOTAL LIABILITIES 8,687,375 890,634 456,567 34,008,082 ================================================================================================================================= NET ASSETS $ 112,648,796 $ 4,343,796 $ 48,709,092 $ 41,097,796 ================================================================================================================================= NET ASSETS CONSIST OF Paid-In Capital $ 108,697,096 $ 6,994,204 $ 53,444,097 $ 47,133,680 Undistributed Net Investment Income 1,372,293 -- -- -- Accumulated Net Realized Loss on Investments, Options, Equity Index Swaps, and Futures Contracts (4,702,292) (2,546,925) (6,461,470) (6,597,150) Net Unrealized Appreciation (Depreciation) on Investments, Options, Equity Index Swaps, and Futures Contracts 7,281,699 (103,483) 1,726,465 561,266 - --------------------------------------------------------------------------------------------------------------------------------- NET ASSETS $ 112,648,796 $ 4,343,796 $ 48,709,092 $ 41,097,796 ================================================================================================================================= Shares Outstanding 3,347,346 101,430 4,101,225 1,871,955 Net Asset Values $ 33.65 $ 42.83 $ 11.88 $ 21.95
THE RYDEX VARIABLE TRUST ANNUAL REPORT | 151 STATEMENTS OF ASSETS AND LIABILITIES (CONTINUED) - --------------------------------------------------------------------------------
LONG INVERSE LARGE-CAP LARGE-CAP DYNAMIC DYNAMIC EUROPE JAPAN DOW 30 DOW 30 FUND FUND FUND FUND - --------------------------------------------------------------------------------------------------------------------------------- ASSETS Securities at Value* (Notes 1, 2, 5 and 8) $ 52,525,407 $ 8,965,521 $ 10,437,478 $ 3,042,646 Segregated Cash with Broker -- 76,700 146,000 158,000 Cash in Custodian Bank -- -- -- -- Receivable for Equity Index Swap Settlement (Note 1) 1,110,209 1,504,957 17,978 -- Receivable for Futures Contracts Settlement (Note 1) -- 17,513 -- 4,345 Receivable for Shares Purchased 2,303,369 3,695,873 2,449,071 7,035 Investment Income Receivable (Note 1) 5,196 611 5,645 283 Other Assets -- -- -- -- - --------------------------------------------------------------------------------------------------------------------------------- TOTAL ASSETS 55,944,181 14,261,175 13,056,172 3,212,309 ================================================================================================================================= LIABILITIES Payable for Equity Index Swap Settlement (Note 1) -- -- -- 21,643 Payable for Futures Contracts Settlement (Note 1) -- -- 4,669 -- Payable upon Return of Securities Loaned (Note 8) -- -- 621,340 -- Payable for Securities Purchased (Note 1) -- -- 2,000,251 -- Liability for Shares Redeemed 879,544 40 10 125 Investment Advisory Fee Payable (Note 3) 36,509 14,856 5,600 3,019 Transfer Agent Fee Payable (Note 3) 10,141 4,127 1,556 839 Distribution and Service Fee Payable (Note 3) 10,141 4,127 1,556 839 Portfolio Accounting Fee Payable (Note 3) 4,057 1,651 622 335 Custody Fees Payable 974 769 149 80 Other Liabilities 8,566 7,514 1,076 1,131 - --------------------------------------------------------------------------------------------------------------------------------- TOTAL LIABILITIES 949,932 33,084 2,636,829 28,011 ================================================================================================================================= NET ASSETS $ 54,994,249 $ 14,228,091 $ 10,419,343 $ 3,184,298 ================================================================================================================================= NET ASSETS CONSIST OF Paid-In Capital $ 53,814,556 $ 13,659,594 $ 9,669,220 $ 3,446,177 Undistributed Net Investment Income 85,714 -- 579 -- Accumulated Net Realized Gain (Loss) on Investments, Equity Index Swaps, and Futures Contracts 104,971 (290,860) 383,532 (142,648) Net Unrealized Appreciation (Depreciation) on Investments, Equity Index Swaps, and Futures Contracts 989,008 859,357 366,012 (119,231) - --------------------------------------------------------------------------------------------------------------------------------- NET ASSETS $ 54,994,249 $ 14,228,091 $ 10,419,343 $ 3,184,298 ================================================================================================================================= Shares Outstanding 2,430,928 512,309 402,493 73,672 Net Asset Values $ 22.62 $ 27.77 $ 25.89 $ 43.22
* THE COST OF SECURITIES AT VALUE IS $52,525,407, $8,965,521, $10,134,381, $3,042,646, $44,491,728, $19,462,038, $10,849,367, $28,648,614, $21,300,531, $20,432,587, $29,938,087, AND $180,288,275, RESPECTIVELY. See Notes to Financial Statements. 152 | THE RYDEX VARIABLE TRUST ANNUAL REPORT December 31, 2004 - --------------------------------------------------------------------------------
SMALL-CAP MID-CAP LARGE-CAP SMALL-CAP VALUE VALUE VALUE GROWTH FUND FUND FUND FUND - --------------------------------------------------------------------------------------------------------------------------------- ASSETS Securities at Value* (Notes 1, 2, 5 and 8) $ 48,810,602 $ 20,923,261 $ 12,070,476 $ 31,865,602 Segregated Cash with Broker -- -- -- -- Cash in Custodian Bank -- -- -- 103 Receivable for Equity Index Swap Settlement (Note 1) -- -- -- -- Receivable for Futures Contracts Settlement (Note 1) -- -- -- -- Receivable for Shares Purchased 65,671 242,558 358,294 1,907,077 Investment Income Receivable (Note 1) 41,410 13,169 14,620 17,432 Other Assets -- -- -- -- - --------------------------------------------------------------------------------------------------------------------------------- TOTAL ASSETS 48,917,683 21,178,988 12,443,390 33,790,214 ================================================================================================================================= LIABILITIES Payable for Equity Index Swap Settlement (Note 1) -- -- -- -- Payable for Futures Contracts Settlement (Note 1) -- -- -- -- Payable upon Return of Securities Loaned (Note 8) 1,563,541 1,424,576 931,373 1,572,253 Payable for Securities Purchased (Note 1) -- 253,244 327,370 1,585,031 Liability for Shares Redeemed 17,734 145 24,010 317,600 Investment Advisory Fee Payable (Note 3) 31,212 10,165 7,954 22,325 Transfer Agent Fee Payable (Note 3) 10,404 3,388 2,651 7,442 Distribution and Service Fee Payable (Note 3) 10,404 3,388 2,651 7,442 Portfolio Accounting Fee Payable (Note 3) 4,162 1,355 1,061 2,977 Custody Fees Payable 998 326 255 714 Other Liabilities 5,712 3,849 2,186 5,064 - --------------------------------------------------------------------------------------------------------------------------------- TOTAL LIABILITIES 1,644,167 1,700,436 1,299,511 3,520,848 ================================================================================================================================= NET ASSETS $ 47,273,516 $ 19,478,552 $ 11,143,879 $ 30,269,366 ================================================================================================================================= NET ASSETS CONSIST OF Paid-In Capital $ 43,643,681 $ 18,958,831 $ 10,156,934 $ 27,961,319 Undistributed Net Investment Income -- -- 2,411 -- Accumulated Net Realized Gain (Loss) on Investments, Equity Index Swaps, and Futures Contracts (689,039) (941,502) (236,575) (908,941) Net Unrealized Appreciation (Depreciation) on Investments, Equity Index Swaps, and Futures Contracts 4,318,874 1,461,223 1,221,109 3,216,988 - --------------------------------------------------------------------------------------------------------------------------------- NET ASSETS $ 47,273,516 $ 19,478,552 $ 11,143,879 $ 30,269,366 ================================================================================================================================= Shares Outstanding 1,639,416 719,323 402,587 1,060,175 Net Asset Values $ 28.84 $ 27.08 $ 27.68 $ 28.55 U.S. MID-CAP LARGE-CAP SECTOR GOVERNMENT GROWTH GROWTH ROTATION MONEY FUND FUND FUND MARKET FUND - --------------------------------------------------------------------------------------------------------------------------------- ASSETS Securities at Value* (Notes 1, 2, 5 and 8) $ 22,715,707 $ 21,459,418 $ 33,906,893 $ 180,288,275 Segregated Cash with Broker -- -- -- -- Cash in Custodian Bank -- -- -- -- Receivable for Equity Index Swap Settlement (Note 1) -- -- -- -- Receivable for Futures Contracts Settlement (Note 1) -- -- -- -- Receivable for Shares Purchased 2,426,998 957,869 1,256 302,209 Investment Income Receivable (Note 1) 8,545 23,593 31,379 8,803 Other Assets -- -- -- 78 - --------------------------------------------------------------------------------------------------------------------------------- TOTAL ASSETS 25,151,250 22,440,880 33,939,528 180,599,365 ================================================================================================================================= LIABILITIES Payable for Equity Index Swap Settlement (Note 1) -- -- -- -- Payable for Futures Contracts Settlement (Note 1) -- -- -- -- Payable upon Return of Securities Loaned (Note 8) 2,031,814 1,446,609 6,101,785 -- Payable for Securities Purchased (Note 1) 2,241,150 961,144 -- -- Liability for Shares Redeemed 153,447 13 46,822 12,524,678 Investment Advisory Fee Payable (Note 3) 11,421 10,696 20,744 86,814 Transfer Agent Fee Payable (Note 3) 3,807 3,565 5,762 34,725 Distribution and Service Fee Payable (Note 3) 3,807 3,565 5,762 43,407 Portfolio Accounting Fee Payable (Note 3) 1,523 1,426 2,305 17,357 Custody Fees Payable 378 342 561 4,167 Other Liabilities 1,871 1,796 8,345 210,220 - --------------------------------------------------------------------------------------------------------------------------------- TOTAL LIABILITIES 4,449,218 2,429,156 6,192,086 12,921,368 ================================================================================================================================= NET ASSETS $ 20,702,032 $ 20,011,724 $ 27,747,442 $ 167,677,997 ================================================================================================================================= NET ASSETS CONSIST OF Paid-In Capital $ 20,672,776 $ 19,530,517 $ 24,733,433 $ 167,672,050 Undistributed Net Investment Income -- 4,614 -- 7,493 Accumulated Net Realized Gain (Loss) on Investments, Equity Index Swaps, and Futures Contracts (1,385,920) (550,238) (954,797) (1,546) Net Unrealized Appreciation (Depreciation) on Investments, Equity Index Swaps, and Futures Contracts 1,415,176 1,026,831 3,968,806 -- - --------------------------------------------------------------------------------------------------------------------------------- NET ASSETS $ 20,702,032 $ 20,011,724 $ 27,747,442 $ 167,677,997 ================================================================================================================================= Shares Outstanding 763,135 777,046 2,485,977 167,691,658 Net Asset Values $ 27.13 $ 25.75 $ 11.16 $ 1.00
THE RYDEX VARIABLE TRUST ANNUAL REPORT | 153 STATEMENTS OF ASSETS AND LIABILITIES (CONTINUED) - --------------------------------------------------------------------------------
BASIC BIO- CONSUMER BANKING MATERIALS TECHNOLOGY PRODUCTS FUND FUND FUND FUND - --------------------------------------------------------------------------------------------------------------------------------- ASSETS Securities at Value* (Notes 1, 2, 5 and 8) $ 23,214,109 $ 53,261,263 $ 7,233,947 $ 26,811,081 Receivable for Securities Sold (Note 1) -- -- 452,107 -- Receivable for Shares Purchased 1,088,399 173,322 620 1,296,315 Investment Income Receivable (Note 1) 53,785 38,340 349 46,731 - --------------------------------------------------------------------------------------------------------------------------------- TOTAL ASSETS 24,356,293 53,472,925 7,687,023 28,154,127 ================================================================================================================================= LIABILITIES Payable upon Return of Securities Loaned (Note 8) 1,309,542 6,982,118 612,142 2,421,449 Payable for Securities Purchased (Note 1) 1,085,496 184,792 -- 1,241,985 Liability for Shares Redeemed 99 62,687 467,450 12,610 Investment Advisory Fee Payable (Note 3) 17,088 37,440 5,957 17,288 Transfer Agent Fee Payable (Note 3) 5,026 11,012 1,752 5,085 Distribution and Service Fee Payable (Note 3) 5,026 11,012 1,752 5,085 Portfolio Accounting Fee Payable (Note 3) 2,010 4,405 701 2,034 Custody Fees Payable 483 1,070 273 488 Other Liabilities 11,784 16,612 8,665 15,171 - --------------------------------------------------------------------------------------------------------------------------------- TOTAL LIABILITIES 2,436,554 7,311,148 1,098,692 3,721,195 ================================================================================================================================= NET ASSETS $ 21,919,739 $ 46,161,777 $ 6,588,331 $ 24,432,932 ================================================================================================================================= NET ASSETS CONSIST OF Paid-In Capital $ 18,874,397 $ 37,642,330 $ 10,723,314 $ 23,619,288 Undistributed Net Investment Income 208,716 95,937 -- 98,701 Accumulated Net Realized Gain (Loss) on Investments 1,383,705 2,153,423 (5,792,202) (2,201,261) Net Unrealized Appreciation (Depreciation) on Investments 1,452,921 6,270,087 1,657,219 2,916,204 - --------------------------------------------------------------------------------------------------------------------------------- NET ASSETS $ 21,919,739 $ 46,161,777 $ 6,588,331 $ 24,432,932 ================================================================================================================================= Shares Outstanding 604,019 1,413,618 341,233 741,483 Net Asset Values $ 36.29 $ 32.66 $ 19.31 $ 32.95
* THE COST OF SECURITIES AT VALUE IS $21,761,188, $46,991,176, $5,576,728, $23,894,877, $12,100,176, $62,027,462, $29,582,431, $46,191,152, $29,664,188, $38,584,911, $54,895,212 AND $39,398,478, RESPECTIVELY See Notes to Financial Statements. 154 | THE RYDEX VARIABLE TRUST ANNUAL REPORT December 31, 2004 - --------------------------------------------------------------------------------
ENERGY FINANCIAL ELECTRONICS ENERGY SERVICES SERVICES FUND FUND FUND FUND - --------------------------------------------------------------------------------------------------------------------------------- ASSETS Securities at Value* (Notes 1, 2, 5 and 8) $ 13,115,485 $ 71,457,076 $ 34,592,457 $ 48,334,049 Receivable for Securities Sold (Note 1) -- -- 549,121 -- Receivable for Shares Purchased 4,354,841 249,702 90,405 135,827 Investment Income Receivable (Note 1) 202 44,573 7,528 73,235 - --------------------------------------------------------------------------------------------------------------------------------- TOTAL ASSETS 17,470,528 71,751,351 35,239,511 48,543,111 ================================================================================================================================= LIABILITIES Payable upon Return of Securities Loaned (Note 8) 824,303 11,003,535 5,212,067 2,969,265 Payable for Securities Purchased (Note 1) 4,343,167 90,900 -- 320,374 Liability for Shares Redeemed 5 55,345 667,373 6,571 Investment Advisory Fee Payable (Note 3) 4,903 44,899 19,838 31,066 Transfer Agent Fee Payable (Note 3) 1,442 13,205 5,835 9,137 Distribution and Service Fee Payable (Note 3) 1,442 13,205 5,835 9,137 Portfolio Accounting Fee Payable (Note 3) 577 5,282 2,334 3,655 Custody Fees Payable 138 1,268 560 878 Other Liabilities 5,221 23,050 9,184 13,329 - --------------------------------------------------------------------------------------------------------------------------------- TOTAL LIABILITIES 5,181,198 11,250,689 5,923,026 3,363,412 ================================================================================================================================= NET ASSETS $ 12,289,330 $ 60,500,662 $ 29,316,485 $ 45,179,699 ================================================================================================================================= NET ASSETS CONSIST OF Paid-In Capital $ 15,053,409 $ 47,699,450 $ 27,302,617 $ 41,611,548 Undistributed Net Investment Income -- 16,641 -- 227,270 Accumulated Net Realized Gain (Loss) on Investments (3,779,388) 3,354,957 (2,996,158) 1,197,984 Net Unrealized Appreciation (Depreciation) on Investments 1,015,309 9,429,614 5,010,026 2,142,897 - --------------------------------------------------------------------------------------------------------------------------------- NET ASSETS $ 12,289,330 $ 60,500,662 $ 29,316,485 $ 45,179,699 ================================================================================================================================= Shares Outstanding 933,264 2,038,453 1,406,084 1,487,078 Net Asset Values $ 13.17 $ 29.68 $ 20.85 $ 30.38 HEALTH PRECIOUS CARE INTERNET LEISURE METALS FUND FUND FUND FUND - --------------------------------------------------------------------------------------------------------------------------------- ASSETS Securities at Value* (Notes 1, 2, 5 and 8) $ 34,166,024 $ 46,092,738 $ 60,482,145 $ 45,560,948 Receivable for Securities Sold (Note 1) 50,927 -- 779,548 47,589 Receivable for Shares Purchased 232,515 181,638 222 74,066 Investment Income Receivable (Note 1) 11,651 3,508 34,354 26 - --------------------------------------------------------------------------------------------------------------------------------- TOTAL ASSETS 34,461,117 46,277,884 61,296,269 45,682,629 ================================================================================================================================= LIABILITIES Payable upon Return of Securities Loaned (Note 8) 3,854,239 9,104,697 8,723,961 10,550,450 Payable for Securities Purchased (Note 1) -- 190,380 -- -- Liability for Shares Redeemed 117,174 2,743 749,962 31,693 Investment Advisory Fee Payable (Note 3) 22,289 27,943 32,918 25,311 Transfer Agent Fee Payable (Note 3) 6,555 8,219 9,682 8,437 Distribution and Service Fee Payable (Note 3) 6,555 8,219 9,682 8,437 Portfolio Accounting Fee Payable (Note 3) 2,622 3,287 3,873 3,375 Custody Fees Payable 694 900 979 857 Other Liabilities 15,675 9,571 10,324 10,999 - --------------------------------------------------------------------------------------------------------------------------------- TOTAL LIABILITIES 4,025,803 9,355,959 9,541,381 10,639,559 ================================================================================================================================= NET ASSETS $ 30,435,314 $ 36,921,925 $ 51,754,888 $ 35,043,070 ================================================================================================================================= NET ASSETS CONSIST OF Paid-In Capital $ 31,649,604 $ 33,230,795 $ 45,434,586 $ 39,027,189 Undistributed Net Investment Income -- -- -- -- Accumulated Net Realized Gain (Loss) on Investments (5,716,126) (3,816,697) 733,369 (10,146,589) Net Unrealized Appreciation (Depreciation) on Investments 4,501,836 7,507,827 5,586,933 6,162,470 - --------------------------------------------------------------------------------------------------------------------------------- NET ASSETS $ 30,435,314 $ 36,921,925 $ 51,754,888 $ 35,043,070 ================================================================================================================================= Shares Outstanding 1,195,596 2,171,209 2,038,187 4,090,807 Net Asset Values $ 25.46 $ 17.01 $ 25.39 $ 8.57
THE RYDEX VARIABLE TRUST ANNUAL REPORT | 155 STATEMENTS OF ASSETS AND LIABILITIES (CONCLUDED) - --------------------------------------------------------------------------------
REAL TELECOM- ESTATE RETAILING TECHNOLOGY MUNICATIONS FUND FUND FUND FUND - --------------------------------------------------------------------------------------------------------------------------------- ASSETS Securities at Value* (Notes 1, 2, 5 and 8) $ 29,266,724 $ 24,710,559 $ 22,145,335 $ 35,392,289 Receivable for Securities Sold (Note 1) 3,221,744 -- -- -- Receivable for Shares Purchased -- 103,277 218,197 125,974 Investment Income Receivable (Note 1) 176,304 14,874 7,338 47,930 Other Assets -- -- -- -- - --------------------------------------------------------------------------------------------------------------------------------- TOTAL ASSETS 32,664,772 24,828,710 22,370,870 35,566,193 ================================================================================================================================= LIABILITIES Payable upon Return of Securities Loaned (Note 8) 2,438,689 3,955,244 2,213,108 5,312,502 Payable for Securities Purchased (Note 1) -- -- 193,820 13,452 Liability for Shares Redeemed 3,261,631 34,500 9,443 164 Investment Advisory Fee Payable (Note 3) 22,510 16,656 16,392 23,799 Transfer Agent Fee Payable (Note 3) 6,621 4,899 4,821 7,000 Distribution and Service Fee Payable (Note 3) 6,621 4,899 4,821 7,000 Portfolio Accounting Fee Payable (Note 3) 2,648 1,960 1,928 2,800 Custody Fees Payable 635 475 463 672 Cash Payable to Custodian Bank -- -- -- 14 Other Liabilities 10,226 9,688 7,309 8,010 - --------------------------------------------------------------------------------------------------------------------------------- TOTAL LIABILITIES 5,749,581 4,028,321 2,452,105 5,375,413 ================================================================================================================================= NET ASSETS $ 26,915,191 $ 20,800,389 $ 19,918,765 $ 30,190,780 ================================================================================================================================= NET ASSETS CONSIST OF Paid-In Capital $ 23,705,096 $ 18,603,255 $ 20,619,550 $ 26,747,347 Undistributed Net Investment Income 486,247 -- -- -- Accumulated Net Realized Loss on Investments (2,327,896) (1,632,570) (3,391,035) (1,415,887) Net Unrealized Appreciation (Depreciation) on Investments 5,051,744 3,829,704 2,690,250 4,859,320 - --------------------------------------------------------------------------------------------------------------------------------- NET ASSETS $ 26,915,191 $ 20,800,389 $ 19,918,765 $ 30,190,780 ================================================================================================================================= Shares Outstanding 707,970 780,454 1,475,163 1,470,766 Net Asset Values $ 38.02 $ 26.65 $ 13.50 $ 20.53
* THE COST OF SECURITIES AT VALUE IS $24,214,980, $20,880,855, $19,455,085, $30,532,969, $49,385,374, AND $24,690,512, RESPECTIVELY See Notes to Financial Statements. 156 | THE RYDEX VARIABLE TRUST ANNUAL REPORT December 31, 2004 - --------------------------------------------------------------------------------
TRANSPORTATION UTILITIES FUND FUND - --------------------------------------------------------------------------------------------- ASSETS Securities at Value* (Notes 1, 2, 5 and 8) $ 57,888,224 $ 26,957,169 Receivable for Securities Sold (Note 1) -- -- Receivable for Shares Purchased 228,663 -- Investment Income Receivable (Note 1) 49,340 47,526 Other Assets -- 259,440 - --------------------------------------------------------------------------------------------- TOTAL ASSETS 58,166,227 27,264,135 ============================================================================================= LIABILITIES Payable upon Return of Securities Loaned (Note 8) 10,519,806 5,145,991 Payable for Securities Purchased (Note 1) 174,361 55,603 Liability for Shares Redeemed 67,240 62,609 Investment Advisory Fee Payable (Note 3) 35,734 17,738 Transfer Agent Fee Payable (Note 3) 10,510 5,217 Distribution and Service Fee Payable (Note 3) 10,510 5,217 Portfolio Accounting Fee Payable (Note 3) 4,204 2,087 Custody Fees Payable 1,009 692 Cash Payable to Custodian Bank -- 60,320 Other Liabilities 9,424 6,469 - --------------------------------------------------------------------------------------------- TOTAL LIABILITIES 10,832,798 5,361,943 ============================================================================================= NET ASSETS $ 47,333,429 $ 21,902,192 ============================================================================================= NET ASSETS CONSIST OF Paid-In Capital $ 40,562,436 $ 20,589,310 Undistributed Net Investment Income -- 313,329 Accumulated Net Realized Loss on Investments (1,731,857) (1,267,104) Net Unrealized Appreciation (Depreciation) on Investments 8,502,850 2,266,657 - --------------------------------------------------------------------------------------------- NET ASSETS $ 47,333,429 $ 21,902,192 ============================================================================================= Shares Outstanding 1,505,189 1,263,441 Net Asset Values $ 31.45 $ 17.34
THE RYDEX VARIABLE TRUST ANNUAL REPORT | 157 STATEMENTS OF OPERATIONS - --------------------------------------------------------------------------------
NOVA URSA OTC ARKTOS FUND FUND FUND FUND - --------------------------------------------------------------------------------------------------------------------------------- INVESTMENT INCOME Interest (Note 1) $ 235,248 $ 625,242 $ 123,691 $ 575,389 Interest from Securities Lending, net (Note 8) 8,898 -- 21,704 -- Dividends, Net of Foreign Tax Withheld* (Note 1) 1,397,218 -- 1,579,480 -- Other Income -- -- 1,774 -- - --------------------------------------------------------------------------------------------------------------------------------- Total Income 1,641,364 625,242 1,726,649 575,389 - --------------------------------------------------------------------------------------------------------------------------------- EXPENSES Advisory Fees (Note 3) 662,738 420,805 999,272 401,261 Transfer Agent and Administrative Fees (Note 3) 220,912 116,890 333,090 111,451 Accounting Fees (Note 3) 88,365 46,756 133,236 44,580 Interest Expense -- -- -- -- Trustees' Fees 4,589 2,399 8,158 2,567 Service Fees (Note 3) 220,912 116,890 333,090 111,451 Custodian Fees 21,435 11,223 33,146 11,059 Miscellaneous 60,407 41,124 113,603 47,099 - --------------------------------------------------------------------------------------------------------------------------------- Total Expenses 1,279,358 756,087 1,953,595 729,468 - --------------------------------------------------------------------------------------------------------------------------------- Net Investment Income (Loss) 362,006 (130,845) (226,946) (154,079) ================================================================================================================================= REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS (NOTE 1) Net Realized Gain (Loss) on: Investment Securities 2,625,448 (238,680) 4,655,729 (10,905) Equity Index Swaps -- -- -- (9,479,259) Futures Contracts 5,594,663 (10,509,364) 1,419,519 (4,958,843) Securities Sold Short -- -- -- -- - --------------------------------------------------------------------------------------------------------------------------------- Total Net Realized Gain (Loss) 8,220,111 (10,748,044) 6,075,248 (14,449,007) - --------------------------------------------------------------------------------------------------------------------------------- Net Change in Unrealized Appreciation (Depreciation) on: Investment Securities 3,668,667 132,265 2,386,396 2,030 Equity Index Swaps -- -- -- 1,294,649 Futures Contracts (540,479) (161,611) (226,854) 69,959 Securities Sold Short -- -- -- -- - --------------------------------------------------------------------------------------------------------------------------------- Net Change in Unrealized Appreciation (Depreciation) 3,128,188 (29,346) 2,159,542 1,366,638 - --------------------------------------------------------------------------------------------------------------------------------- Net Gain (Loss) on Investments 11,348,299 (10,777,390) 8,234,790 (13,082,369) - --------------------------------------------------------------------------------------------------------------------------------- NET INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONS $ 11,710,305 $ (10,908,235) $ 8,007,844 $ (13,236,448) =================================================================================================================================
* Net of foreign tax withheld of $0, $0, $1,785, $0, $0, $313, $0, $0, $15, $0, $0, and $0, respectively. ** Since the commencement of operations: May 3, 2004. See Notes to Financial Statements. 158 | THE RYDEX VARIABLE TRUST ANNUAL REPORT Period Ended December 31, 2004 - --------------------------------------------------------------------------------
INVERSE TITAN 500 VELOCITY 100 MEDIUS MID-CAP FUND FUND FUND FUND** - --------------------------------------------------------------------------------------------------------------------------------- INVESTMENT INCOME Interest (Note 1) $ 71,612 $ 123,770 $ 96,233 $ 19,571 Interest from Securities Lending, net (Note 8) 584 1,753 940 -- Dividends, Net of Foreign Tax Withheld* (Note 1) 412,999 304,544 255,298 -- Other Income -- -- 579 -- - --------------------------------------------------------------------------------------------------------------------------------- Total Income 485,195 430,067 353,050 19,571 - --------------------------------------------------------------------------------------------------------------------------------- EXPENSES Advisory Fees (Note 3) 252,443 285,546 250,140 12,140 Transfer Agent and Administrative Fees (Note 3) 70,123 79,318 69,483 3,373 Accounting Fees (Note 3) 28,049 31,728 27,793 1,349 Interest Expense -- -- -- -- Trustees' Fees 1,670 1,764 1,620 33 Service Fees (Note 3) 70,123 79,318 69,483 3,373 Custodian Fees 7,759 10,466 7,155 317 Miscellaneous 30,307 31,971 28,773 1,271 - --------------------------------------------------------------------------------------------------------------------------------- Total Expenses 460,474 520,111 454,447 21,856 - --------------------------------------------------------------------------------------------------------------------------------- Net Investment Income (Loss) 24,721 (90,044) (101,397) (2,285) ================================================================================================================================= REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS (NOTE 1) Net Realized Gain (Loss) on: Investment Securities (54,193) (2,310,933) 75,900 (3,188) Equity Index Swaps -- (926,702) (578,025) (198,576) Futures Contracts 2,020,244 1,558,301 1,585,622 (165,809) Securities Sold Short -- -- -- -- - --------------------------------------------------------------------------------------------------------------------------------- Total Net Realized Gain (Loss) 1,966,051 (1,679,334) 1,083,497 (367,573) - --------------------------------------------------------------------------------------------------------------------------------- Net Change in Unrealized Appreciation (Depreciation) on: Investment Securities 530,063 2,349,939 910,615 -- Equity Index Swaps -- (1,271,768) 754,960 (15,129) Futures Contracts (426,862) (175,708) (143,866) (25,184) Securities Sold Short -- -- -- -- - --------------------------------------------------------------------------------------------------------------------------------- Net Change in Unrealized Appreciation (Depreciation) 103,201 902,463 1,521,709 (40,313) - --------------------------------------------------------------------------------------------------------------------------------- Net Gain (Loss) on Investments 2,069,252 (776,871) 2,605,206 (407,886) - --------------------------------------------------------------------------------------------------------------------------------- NET INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONS $ 2,093,973 $ (866,915) $ 2,503,809 $ (410,171) ================================================================================================================================= INVERSE U.S. MEKROS SMALL-CAP GOVERNMENT JUNO FUND FUND** BOND FUND FUND - --------------------------------------------------------------------------------------------------------------------------------- INVESTMENT INCOME Interest (Note 1) $ 282,935 $ 144,006 $ 2,520,839 $ 1,088,049 Interest from Securities Lending, net (Note 8) 7,065 -- -- -- Dividends, Net of Foreign Tax Withheld* (Note 1) 525,022 -- -- -- Other Income -- -- -- -- - --------------------------------------------------------------------------------------------------------------------------------- Total Income 815,022 144,006 2,520,839 1,088,049 - --------------------------------------------------------------------------------------------------------------------------------- EXPENSES Advisory Fees (Note 3) 555,936 95,008 276,602 455,084 Transfer Agent and Administrative Fees (Note 3) 154,427 26,391 110,641 126,412 Accounting Fees (Note 3) 61,771 10,556 55,320 50,565 Interest Expense -- -- -- 1,708,403 Trustees' Fees 3,828 327 3,042 2,205 Service Fees (Note 3) 154,427 26,391 138,301 126,412 Custodian Fees 15,656 4,400 16,167 12,092 Miscellaneous 66,836 11,245 65,878 47,260 - --------------------------------------------------------------------------------------------------------------------------------- Total Expenses 1,012,881 174,318 665,951 2,528,433 - --------------------------------------------------------------------------------------------------------------------------------- Net Investment Income (Loss) (197,859) (30,312) 1,854,888 (1,440,384) ================================================================================================================================= REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS (NOTE 1) Net Realized Gain (Loss) on: Investment Securities (4,203,788) (2,732) 930,852 (60,254) Equity Index Swaps 1,654,675 (1,752,358) -- -- Futures Contracts 1,660,148 (791,835) (4,256,476) (4,419,674) Securities Sold Short -- -- -- (2,196,461) - --------------------------------------------------------------------------------------------------------------------------------- Total Net Realized Gain (Loss) (888,965) (2,546,925) (3,325,624) (6,676,389) - --------------------------------------------------------------------------------------------------------------------------------- Net Change in Unrealized Appreciation (Depreciation) on: Investment Securities 2,285,309 -- 250,135 (994) Equity Index Swaps 1,135,416 (89,390) -- -- Futures Contracts 418,785 (14,093) 564,576 54,674 Securities Sold Short -- -- -- 586,825 - --------------------------------------------------------------------------------------------------------------------------------- Net Change in Unrealized Appreciation (Depreciation) 3,839,510 (103,483) 814,711 640,505 - --------------------------------------------------------------------------------------------------------------------------------- Net Gain (Loss) on Investments 2,950,545 (2,650,408) (2,510,913) (6,035,884) - --------------------------------------------------------------------------------------------------------------------------------- NET INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONS $ 2,752,686 $ (2,680,720) $ (656,025) $ (7,476,268) =================================================================================================================================
THE RYDEX VARIABLE TRUST ANNUAL REPORT | 159 STATEMENTS OF OPERATIONS (CONTINUED) - --------------------------------------------------------------------------------
LONG INVERSE LARGE-CAP LARGE-CAP DYNAMIC DYNAMIC EUROPE JAPAN DOW 30 DOW 30 FUND FUND FUND** FUND** - --------------------------------------------------------------------------------------------------------------------------------- INVESTMENT INCOME Interest (Note 1) $ 399,272 $ 205,672 $ 14,781 $ 30,765 Interest from Securities Lending, net (Note 8) -- -- -- -- Dividends, Net of Foreign Tax Withheld* (Note 1) -- -- 51,950 -- Other Income 4,801 -- -- -- - --------------------------------------------------------------------------------------------------------------------------------- Total Income 404,073 205,672 66,731 30,765 - --------------------------------------------------------------------------------------------------------------------------------- EXPENSES Advisory Fees (Note 3) 258,685 165,142 23,960 18,119 Transfer Agent and Administrative Fees (Note 3) 71,857 45,873 6,655 5,033 Accounting Fees (Note 3) 28,743 18,349 2,662 2,013 Trustees' Fees 948 1,239 43 39 Service Fees (Note 3) 71,857 45,873 6,655 5,033 Custodian Fees 6,963 4,922 958 473 Miscellaneous 29,283 16,794 1,876 1,811 - --------------------------------------------------------------------------------------------------------------------------------- Total Expenses 468,336 298,192 42,809 32,521 - --------------------------------------------------------------------------------------------------------------------------------- Less Expenses Waived by Distributor -- -- -- -- - --------------------------------------------------------------------------------------------------------------------------------- Total Waived Expenses -- -- -- -- - --------------------------------------------------------------------------------------------------------------------------------- Net Expenses 468,336 298,192 42,809 32,521 - --------------------------------------------------------------------------------------------------------------------------------- Net Investment Income (Loss) (64,263) (92,520) 23,922 (1,756) ================================================================================================================================= REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS (NOTE 1) Net Realized Gain (Loss) on: Investment Securities -- (224) 94,340 2 Equity Index Swaps 6,003,573 (5,897,355) 413,338 (381,865) Futures Contracts 53,900 (883,028) 325,774 (8,023) - --------------------------------------------------------------------------------------------------------------------------------- Total Net Realized Gain (Loss) 6,057,473 (6,780,607) 833,452 (389,886) - --------------------------------------------------------------------------------------------------------------------------------- Net Change in Unrealized Appreciation (Depreciation) on: Investment Securities -- -- 303,097 -- Equity Index Swaps (439,441) 375,570 9,579 (13,425) Futures Contracts (35,387) (6,551) 53,336 (105,806) - --------------------------------------------------------------------------------------------------------------------------------- Net Change in Unrealized Appreciation (Depreciation) (474,828) 369,019 366,012 (119,231) - --------------------------------------------------------------------------------------------------------------------------------- Net Gain (Loss) on Investments 5,582,645 (6,411,588) 1,199,464 (509,117) - --------------------------------------------------------------------------------------------------------------------------------- NET INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONS $ 5,518,382 $ (6,504,108) $ 1,223,386 $ (510,873) =================================================================================================================================
* Net of foreign tax withheld of $0, $0, $0, $0, $0, $0, $0, $0, $0, $0, $7,039, and $0, respectively. ** Since the commencement of operations: May 3, 2004. See Notes to Financial Statements. 160 | THE RYDEX VARIABLE TRUST ANNUAL REPORT Period Ended December 31, 2004 - --------------------------------------------------------------------------------
SMALL-CAP MID-CAP LARGE-CAP SMALL-CAP VALUE VALUE VALUE GROWTH FUND** FUND** FUND** FUND** - --------------------------------------------------------------------------------------------------------------------------------- INVESTMENT INCOME Interest (Note 1) $ 1,812 $ 1,103 $ 845 $ 1,579 Interest from Securities Lending, net (Note 8) 457 120 161 828 Dividends, Net of Foreign Tax Withheld* (Note 1) 245,544 105,933 139,704 62,921 Other Income -- -- -- -- - --------------------------------------------------------------------------------------------------------------------------------- Total Income 247,813 107,156 140,710 65,328 - --------------------------------------------------------------------------------------------------------------------------------- EXPENSES Advisory Fees (Note 3) 122,821 54,654 49,463 94,288 Transfer Agent and Administrative Fees (Note 3) 40,940 18,218 16,488 31,429 Accounting Fees (Note 3) 16,376 7,287 6,595 12,572 Trustees' Fees 266 141 116 181 Service Fees (Note 3) 40,940 18,218 16,488 31,429 Custodian Fees 3,893 1,763 1,562 2,956 Miscellaneous 10,469 6,278 4,340 8,578 - --------------------------------------------------------------------------------------------------------------------------------- Total Expenses 235,705 106,559 95,052 181,433 - --------------------------------------------------------------------------------------------------------------------------------- Less Expenses Waived by Distributor -- -- -- -- - --------------------------------------------------------------------------------------------------------------------------------- Total Waived Expenses -- -- -- -- - --------------------------------------------------------------------------------------------------------------------------------- Net Expenses 235,705 106,559 95,052 181,433 - --------------------------------------------------------------------------------------------------------------------------------- Net Investment Income (Loss) 12,108 597 45,658 (116,105) ================================================================================================================================= REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS (NOTE 1) Net Realized Gain (Loss) on: Investment Securities 642,562 66,901 (113,593) (404,399) Equity Index Swaps -- -- -- -- Futures Contracts -- 22,213 -- -- - --------------------------------------------------------------------------------------------------------------------------------- Total Net Realized Gain (Loss) 642,562 89,114 (113,593) (404,399) - --------------------------------------------------------------------------------------------------------------------------------- Net Change in Unrealized Appreciation (Depreciation) on: Investment Securities 4,318,874 1,461,223 1,221,109 3,216,988 Equity Index Swaps -- -- -- -- Futures Contracts -- -- -- -- - --------------------------------------------------------------------------------------------------------------------------------- Net Change in Unrealized Appreciation (Depreciation) 4,318,874 1,461,223 1,221,109 3,216,988 - --------------------------------------------------------------------------------------------------------------------------------- Net Gain (Loss) on Investments 4,961,436 1,550,337 1,107,516 2,812,589 - --------------------------------------------------------------------------------------------------------------------------------- NET INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONS $ 4,973,544 $ 1,550,934 $ 1,153,174 $ 2,696,484 ================================================================================================================================= U.S. MID-CAP LARGE-CAP SECTOR GOVERNMENT GROWTH GROWTH ROTATION MONEY FUND** FUND** FUND MARKET FUND - --------------------------------------------------------------------------------------------------------------------------------- INVESTMENT INCOME Interest (Note 1) $ 586 $ 436 $ 6,387 $ 3,899,901 Interest from Securities Lending, net (Note 8) 303 70 1,847 -- Dividends, Net of Foreign Tax Withheld* (Note 1) 40,377 188,182 245,898 -- Other Income -- -- -- -- - --------------------------------------------------------------------------------------------------------------------------------- Total Income 41,266 188,688 254,132 3,899,901 - --------------------------------------------------------------------------------------------------------------------------------- EXPENSES Advisory Fees (Note 3) 44,149 40,107 207,760 1,507,834 Transfer Agent and Administrative Fees (Note 3) 14,716 13,369 57,711 603,133 Accounting Fees (Note 3) 5,887 5,348 23,084 286,130 Trustees' Fees 112 85 1,228 18,599 Service Fees (Note 3) 14,716 13,369 57,711 753,917 Custodian Fees 1,412 1,404 6,763 72,491 Miscellaneous 3,669 3,337 19,636 344,781 - --------------------------------------------------------------------------------------------------------------------------------- Total Expenses 84,661 77,019 373,893 3,586,885 - --------------------------------------------------------------------------------------------------------------------------------- Less Expenses Waived by Distributor -- -- -- (286,105) - --------------------------------------------------------------------------------------------------------------------------------- Total Waived Expenses -- -- -- (286,105) - --------------------------------------------------------------------------------------------------------------------------------- Net Expenses 84,661 77,019 373,893 3,300,780 - --------------------------------------------------------------------------------------------------------------------------------- Net Investment Income (Loss) (43,395) 111,669 (119,761) 599,121 ================================================================================================================================= REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS (NOTE 1) Net Realized Gain (Loss) on: Investment Securities (1,385,920) (424,470) 456,383 -- Equity Index Swaps -- -- -- -- Futures Contracts -- -- -- -- - --------------------------------------------------------------------------------------------------------------------------------- Total Net Realized Gain (Loss) (1,385,920) (424,470) 456,383 -- - --------------------------------------------------------------------------------------------------------------------------------- Net Change in Unrealized Appreciation (Depreciation) on: Investment Securities 1,415,176 1,026,831 1,404,987 -- Equity Index Swaps -- -- -- -- Futures Contracts -- -- -- -- - --------------------------------------------------------------------------------------------------------------------------------- Net Change in Unrealized Appreciation (Depreciation) 1,415,176 1,026,831 1,404,987 -- - --------------------------------------------------------------------------------------------------------------------------------- Net Gain (Loss) on Investments 29,256 602,361 1,861,370 -- - --------------------------------------------------------------------------------------------------------------------------------- NET INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONS $ (14,139) $ 714,030 $ 1,741,609 $ 599,121 =================================================================================================================================
THE RYDEX VARIABLE TRUST ANNUAL REPORT | 161 STATEMENTS OF OPERATIONS (CONTINUED) - --------------------------------------------------------------------------------
BASIC BIO- CONSUMER BANKING MATERIALS TECHNOLOGY PRODUCTS FUND FUND FUND FUND - --------------------------------------------------------------------------------------------------------------------------------- INVESTMENT INCOME Interest (Note 1) $ 2,193 $ 3,186 $ 2,395 $ 2,650 Interest from Securities Lending, net (Note 8) 984 1,917 3,832 1,602 Dividends, Net of Foreign Tax Withheld* (Note 1) 529,755 591,426 7,477 526,887 - --------------------------------------------------------------------------------------------------------------------------------- Total Income 532,932 596,529 13,704 531,139 - --------------------------------------------------------------------------------------------------------------------------------- EXPENSES Advisory Fees (Note 3) 174,028 269,583 142,694 232,254 Transfer Agent and Administrative Fees (Note 3) 51,185 79,289 41,969 68,310 Accounting Fees (Note 3) 20,474 31,716 16,788 27,324 Trustees' Fees 916 1,443 1,031 1,159 Service Fees (Note 3) 51,185 79,289 41,969 68,310 Custodian Fees 5,082 8,031 5,158 6,773 Miscellaneous 21,346 31,241 18,119 28,308 - --------------------------------------------------------------------------------------------------------------------------------- Total Expenses 324,216 500,592 267,728 432,438 - --------------------------------------------------------------------------------------------------------------------------------- Net Investment Income (Loss) 208,716 95,937 (254,024) 98,701 ================================================================================================================================= REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS (NOTE 1) Net Realized Gain (Loss) on: Investment Securities 1,845,200 2,971,342 (2,732,481) (1,467,922) - --------------------------------------------------------------------------------------------------------------------------------- Total Net Realized Gain (Loss) 1,845,200 2,971,342 (2,732,481) (1,467,922) - --------------------------------------------------------------------------------------------------------------------------------- Net Change in Unrealized Appreciation (Depreciation) on: Investment Securities 313,551 2,699,467 (376,774) 1,868,349 - --------------------------------------------------------------------------------------------------------------------------------- Net Change in Unrealized Appreciation (Depreciation) 313,551 2,699,467 (376,774) 1,868,349 - --------------------------------------------------------------------------------------------------------------------------------- Net Gain (Loss) on Investments 2,158,751 5,670,809 (3,109,255) 400,427 - --------------------------------------------------------------------------------------------------------------------------------- NET INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONS $ 2,367,467 $ 5,766,746 $ (3,363,279) $ 499,128 =================================================================================================================================
* NET OF FOREIGN TAX WITHHELD OF $131, $617, $1,259, $0, $94, $33,603, $0, $234, $0, $0, $43, AND $11,439, RESPECTIVELY. See Notes to Financial Statements. 162 | THE RYDEX VARIABLE TRUST ANNUAL REPORT Year Ended December 31, 2004 - --------------------------------------------------------------------------------
ENERGY FINANCIAL ELECTRONICS ENERGY SERVICES SERVICES FUND FUND FUND FUND - --------------------------------------------------------------------------------------------------------------------------------- INVESTMENT INCOME Interest (Note 1) $ 1,075 $ 4,324 $ 2,418 $ 2,713 Interest from Securities Lending, net (Note 8) 1,619 4,429 1,949 1,817 Dividends, Net of Foreign Tax Withheld* (Note 1) 18,239 740,778 75,089 650,134 - --------------------------------------------------------------------------------------------------------------------------------- Total Income 20,933 749,531 79,456 654,664 - --------------------------------------------------------------------------------------------------------------------------------- EXPENSES Advisory Fees (Note 3) 71,558 395,326 172,705 230,474 Transfer Agent and Administrative Fees (Note 3) 21,047 116,272 50,795 67,786 Accounting Fees (Note 3) 8,418 46,509 20,318 27,115 Trustees' Fees 792 1,723 738 1,172 Service Fees (Note 3) 21,047 116,272 50,795 67,786 Custodian Fees 2,055 11,465 5,584 7,098 Miscellaneous 9,417 45,323 18,548 25,963 - --------------------------------------------------------------------------------------------------------------------------------- Total Expenses 134,334 732,890 319,483 427,394 - --------------------------------------------------------------------------------------------------------------------------------- Net Investment Income (Loss) (113,401) 16,641 (240,027) 227,270 ================================================================================================================================= REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS (NOTE 1) Net Realized Gain (Loss) on: Investment Securities 452,350 3,764,934 (666,151) 2,993,017 - --------------------------------------------------------------------------------------------------------------------------------- Total Net Realized Gain (Loss) 452,350 3,764,934 (666,151) 2,993,017 - --------------------------------------------------------------------------------------------------------------------------------- Net Change in Unrealized Appreciation (Depreciation) on: Investment Securities (1,990,020) 7,203,445 4,338,770 1,012,134 - --------------------------------------------------------------------------------------------------------------------------------- Net Change in Unrealized Appreciation (Depreciation) (1,990,020) 7,203,445 4,338,770 1,012,134 - --------------------------------------------------------------------------------------------------------------------------------- Net Gain (Loss) on Investments (1,537,670) 10,968,379 3,672,619 4,005,151 - --------------------------------------------------------------------------------------------------------------------------------- NET INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONS $ (1,651,071) $ 10,985,020 $ 3,432,592 $ 4,232,421 ================================================================================================================================= HEALTH PRECIOUS CARE INTERNET LEISURE METALS FUND FUND FUND FUND - --------------------------------------------------------------------------------------------------------------------------------- INVESTMENT INCOME Interest (Note 1) $ 3,160 $ 2,761 $ 2,596 $ 4,283 Interest from Securities Lending, net (Note 8) 3,114 5,301 7,026 27,968 Dividends, Net of Foreign Tax Withheld* (Note 1) 261,441 14,321 189,559 293,428 - --------------------------------------------------------------------------------------------------------------------------------- Total Income 267,715 22,383 199,181 325,679 - --------------------------------------------------------------------------------------------------------------------------------- EXPENSES Advisory Fees (Note 3) 248,170 220,936 203,292 265,661 Transfer Agent and Administrative Fees (Note 3) 72,991 64,981 59,792 88,554 Accounting Fees (Note 3) 29,196 25,992 23,917 35,421 Trustees' Fees 1,507 1,262 1,158 2,097 Service Fees (Note 3) 72,991 64,981 59,792 88,554 Custodian Fees 7,511 6,696 6,222 9,170 Miscellaneous 29,642 22,472 20,889 27,731 - --------------------------------------------------------------------------------------------------------------------------------- Total Expenses 462,008 407,320 375,062 517,188 - --------------------------------------------------------------------------------------------------------------------------------- Net Investment Income (Loss) (194,293) (384,937) (175,881) (191,509) ================================================================================================================================= REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS (NOTE 1) Net Realized Gain (Loss) on: Investment Securities (4,048,919) (1,703,305) 2,075,047 (4,346,436) - --------------------------------------------------------------------------------------------------------------------------------- Total Net Realized Gain (Loss) (4,048,919) (1,703,305) 2,075,047 (4,346,436) - --------------------------------------------------------------------------------------------------------------------------------- Net Change in Unrealized Appreciation (Depreciation) on: Investment Securities 2,251,151 3,280,437 3,561,300 (7,741,810) - --------------------------------------------------------------------------------------------------------------------------------- Net Change in Unrealized Appreciation (Depreciation) 2,251,151 3,280,437 3,561,300 (7,741,810) - --------------------------------------------------------------------------------------------------------------------------------- Net Gain (Loss) on Investments (1,797,768) 1,577,132 5,636,347 (12,088,246) - --------------------------------------------------------------------------------------------------------------------------------- NET INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONS $ (1,992,061) $ 1,192,195 $ 5,460,466 $ (12,279,755) =================================================================================================================================
THE RYDEX VARIABLE TRUST ANNUAL REPORT | 163 STATEMENTS OF OPERATIONS (CONCLUDED) - --------------------------------------------------------------------------------
REAL TELECOM- ESTATE RETAILING TECHNOLOGY MUNICATIONS FUND FUND FUND FUND - --------------------------------------------------------------------------------------------------------------------------------- INVESTMENT INCOME Interest (Note 1) $ 1,454 $ 1,913 $ 1,727 $ 1,952 Interest from Securities Lending, net (Note 8) 423 3,005 1,740 3,706 Dividends, Net of Foreign Tax Withheld* (Note 1) 910,207 128,794 210,122 292,081 - --------------------------------------------------------------------------------------------------------------------------------- Total Income 912,084 133,712 213,589 297,739 - --------------------------------------------------------------------------------------------------------------------------------- EXPENSES Advisory Fees (Note 3) 167,883 151,715 149,453 169,533 Transfer Agent and Administrative Fees (Note 3) 49,378 44,622 43,957 49,863 Accounting Fees (Note 3) 19,751 17,849 17,583 19,945 Trustees' Fees 931 955 1,200 882 Service Fees (Note 3) 49,378 44,622 43,957 49,863 Custodian Fees 5,206 4,592 4,742 5,337 Tax Expense 3,544 -- -- -- Miscellaneous 15,680 17,368 15,966 18,221 - --------------------------------------------------------------------------------------------------------------------------------- Total Expenses 311,751 281,723 276,858 313,644 - --------------------------------------------------------------------------------------------------------------------------------- Net Investment Income (Loss) 600,333 (148,011) (63,269) (15,905) ================================================================================================================================= REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS (NOTE 1) Net Realized Gain (Loss) on: Investment Securities (1,998,721) (260,600) (1,513,746) (320,328) - --------------------------------------------------------------------------------------------------------------------------------- Total Net Realized Gain (Loss) (1,998,721) (260,600) (1,513,746) (320,328) - --------------------------------------------------------------------------------------------------------------------------------- Net Change in Unrealized Appreciation (Depreciation) on: Investment Securities 3,905,052 1,158,987 236,415 2,929,686 - --------------------------------------------------------------------------------------------------------------------------------- Net Change in Unrealized Appreciation (Depreciation) 3,905,052 1,158,987 236,415 2,929,686 - --------------------------------------------------------------------------------------------------------------------------------- Net Gain (Loss) on Investments 1,906,331 898,387 (1,277,331) 2,609,358 - --------------------------------------------------------------------------------------------------------------------------------- NET INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONS $ 2,506,664 $ 750,376 $ (1,340,600) $ 2,593,453 =================================================================================================================================
* NET OF FOREIGN TAX WITHHELD OF $0, $0, $0, $18,160, $258, AND $0, RESPECTIVELY. See Notes to Financial Statements. 164 | THE RYDEX VARIABLE TRUST ANNUAL REPORT Year Ended December 31, 2004 - --------------------------------------------------------------------------------
TRANSPORTATION UTILITIES FUND FUND - --------------------------------------------------------------------------------------------- INVESTMENT INCOME Interest (Note 1) $ 2,252 $ 1,271 Interest from Securities Lending, net (Note 8) 9,813 1,872 Dividends, Net of Foreign Tax Withheld* (Note 1) 167,195 549,250 - --------------------------------------------------------------------------------------------- Total Income 179,260 552,393 - --------------------------------------------------------------------------------------------- EXPENSES Advisory Fees (Note 3) 178,915 129,965 Transfer Agent and Administrative Fees (Note 3) 52,622 38,225 Accounting Fees (Note 3) 21,049 15,290 Trustees' Fees 615 673 Service Fees (Note 3) 52,622 38,225 Custodian Fees 5,148 4,021 Tax Expense -- -- Miscellaneous 16,685 12,665 - --------------------------------------------------------------------------------------------- Total Expenses 327,656 239,064 - --------------------------------------------------------------------------------------------- Net Investment Income (Loss) (148,396) 313,329 ============================================================================================= REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS (NOTE 1) Net Realized Gain (Loss) on: Investment Securities (1,111,192) 1,405,192 - --------------------------------------------------------------------------------------------- Total Net Realized Gain (Loss) (1,111,192) 1,405,192 - --------------------------------------------------------------------------------------------- Net Change in Unrealized Appreciation (Depreciation) on: Investment Securities 7,775,218 1,370,754 - --------------------------------------------------------------------------------------------- Net Change in Unrealized Appreciation (Depreciation) 7,775,218 1,370,754 - --------------------------------------------------------------------------------------------- Net Gain (Loss) on Investments 6,664,026 2,775,946 - --------------------------------------------------------------------------------------------- NET INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONS $ 6,515,630 $ 3,089,275 =============================================================================================
THE RYDEX VARIABLE TRUST ANNUAL REPORT | 165 STATEMENTS OF CHANGES IN NET ASSETS - --------------------------------------------------------------------------------
NOVA FUND URSA FUND - --------------------------------------------------------------------------------------------------------------------------------- YEAR YEAR YEAR YEAR ENDED ENDED ENDED ENDED DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31, 2004 2003 2004 2003 - --------------------------------------------------------------------------------------------------------------------------------- FROM OPERATIONS Net Investment Income (Loss) $ 362,006 $ 41,274 $ (130,845) $ (244,634) Net Realized Gain (Loss) on Investments 8,220,111 9,623,373 (10,748,044) (11,728,008) Net Change in Unrealized Appreciation (Depreciation) on Investments 3,128,188 7,640,896 (29,346) (835,892) - --------------------------------------------------------------------------------------------------------------------------------- Net Increase (Decrease) in Net Assets from Operations 11,710,305 17,305,543 (10,908,235) (12,808,534) - --------------------------------------------------------------------------------------------------------------------------------- DISTRIBUTIONS TO SHAREHOLDERS FROM: (NOTE 1) Net Investment Income (40,441) -- -- -- Realized Gain on Investment -- -- -- -- Return of Capital -- -- -- -- - --------------------------------------------------------------------------------------------------------------------------------- Total Distributions to Shareholders (40,441) -- -- -- ================================================================================================================================= SHARE TRANSACTIONS PROCEEDS FROM SHARES PURCHASED 677,100,271 403,934,995 468,800,872 537,797,863 VALUE OF SHARES PURCHASED THROUGH DIVIDEND REINVESTMENT 40,441 -- -- -- COST OF SHARES REDEEMED (640,426,112) (373,442,213) (456,638,548) (543,363,134) ================================================================================================================================= NET INCREASE (DECREASE) IN NET ASSETS FROM SHARE TRANSACTIONS 36,714,600 30,492,782 12,162,324 (5,565,271) - --------------------------------------------------------------------------------------------------------------------------------- Net Increase (Decrease) in Net Assets 48,384,464 47,798,325 1,254,089 (18,373,805) NET ASSETS--BEGINNING OF YEAR 81,815,566 34,017,241 17,821,535 36,195,340 ================================================================================================================================= NET ASSETS--END OF YEAR $ 130,200,030 $ 81,815,566 $ 19,075,624 $ 17,821,535 ================================================================================================================================= OTC FUND - --------------------------------------------------------------------------------------------- YEAR YEAR ENDED ENDED DECEMBER 31, DECEMBER 31, 2004 2003 - --------------------------------------------------------------------------------------------- FROM OPERATIONS Net Investment Income (Loss) $ (226,946) $ (1,346,818) Net Realized Gain (Loss) on Investments 6,075,248 9,844,899 Net Change in Unrealized Appreciation (Depreciation) on Investments 2,159,542 32,550,500 - --------------------------------------------------------------------------------------------- Net Increase (Decrease) in Net Assets from Operations 8,007,844 41,048,581 - --------------------------------------------------------------------------------------------- DISTRIBUTIONS TO SHAREHOLDERS FROM: (NOTE 1) Net Investment Income -- -- Realized Gain on Investment -- -- Return of Capital -- -- - --------------------------------------------------------------------------------------------- Total Distributions to Shareholders -- -- ============================================================================================= SHARE TRANSACTIONS PROCEEDS FROM SHARES PURCHASED 839,741,462 650,650,500 VALUE OF SHARES PURCHASED THROUGH DIVIDEND REINVESTMENT -- -- COST OF SHARES REDEEMED (784,108,500) (641,498,381) ============================================================================================= NET INCREASE (DECREASE) IN NET ASSETS FROM SHARE TRANSACTIONS 55,632,962 9,152,119 - --------------------------------------------------------------------------------------------- Net Increase (Decrease) in Net Assets 63,640,806 50,200,700 NET ASSETS--BEGINNING OF YEAR 127,835,515 77,634,815 ============================================================================================= NET ASSETS--END OF YEAR $ 191,476,321 $ 127,835,515 =============================================================================================
See Notes to Financial Statements. 166 | THE RYDEX VARIABLE TRUST ANNUAL REPORT - --------------------------------------------------------------------------------
ARKTOS FUND TITAN 500 FUND - --------------------------------------------------------------------------------------------------------------------------------- YEAR YEAR YEAR YEAR ENDED ENDED ENDED ENDED DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31, 2004 2003 2004 2003 - --------------------------------------------------------------------------------------------------------------------------------- FROM OPERATIONS Net Investment Income (Loss) $ (154,079) $ (273,979) $ 24,721 $ (82,522) Net Realized Gain (Loss) on Investments (14,449,007) (18,845,261) 1,966,051 5,545,055 Net Change in Unrealized Appreciation (Depreciation) on Investments 1,366,638 (2,058,464) 103,201 2,265,688 - --------------------------------------------------------------------------------------------------------------------------------- Net Increase (Decrease) in Net Assets from Operations (13,236,448) (21,177,704) 2,093,973 7,728,221 - --------------------------------------------------------------------------------------------------------------------------------- DISTRIBUTIONS TO SHAREHOLDERS FROM: (NOTE 1) Net Investment Income -- -- -- -- Realized Gain on Investment -- (463,435) (3,242,906) (3,872,004) Return of Capital -- -- -- -- - --------------------------------------------------------------------------------------------------------------------------------- Total Distributions to Shareholders -- (463,435) (3,242,906) (3,872,004) ================================================================================================================================= SHARE TRANSACTIONS PROCEEDS FROM SHARES PURCHASED 1,086,893,530 653,818,874 320,162,911 196,423,855 VALUE OF SHARES PURCHASED THROUGH DIVIDEND REINVESTMENT -- 463,435 7,114,909 3,872,004 COST OF SHARES REDEEMED (1,084,292,470) (622,306,624) (327,504,490) (175,845,415) ================================================================================================================================= NET INCREASE (DECREASE) IN NET ASSETS FROM SHARE TRANSACTIONS 2,601,060 31,975,685 (226,670) 24,450,444 - --------------------------------------------------------------------------------------------------------------------------------- Net Increase (Decrease) in Net Assets (10,635,388) 10,334,546 (1,375,603) 28,306,661 NET ASSETS--BEGINNING OF YEAR 34,563,085 24,228,539 30,428,257 2,121,596 ================================================================================================================================= NET ASSETS--END OF YEAR $ 23,927,697 $ 34,563,085 $ 29,052,654 $ 30,428,257 ================================================================================================================================= VELOCITY 100 FUND MEDIUS FUND - --------------------------------------------------------------------------------------------------------------------------------- YEAR YEAR YEAR YEAR ENDED ENDED ENDED ENDED DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31, 2004 2003 2004 2003 - --------------------------------------------------------------------------------------------------------------------------------- FROM OPERATIONS Net Investment Income (Loss) $ (90,044) $ (156,450) $ (101,397) $ (80,616) Net Realized Gain (Loss) on Investments (1,679,334) 3,347,909 1,083,497 3,107,517 Net Change in Unrealized Appreciation (Depreciation) on Investments 902,463 4,022,533 1,521,709 1,694,894 - --------------------------------------------------------------------------------------------------------------------------------- Net Increase (Decrease) in Net Assets from Operations (866,915) 7,213,992 2,503,809 4,721,795 - --------------------------------------------------------------------------------------------------------------------------------- DISTRIBUTIONS TO SHAREHOLDERS FROM: (NOTE 1) Net Investment Income (1,275,643) -- -- -- Realized Gain on Investment (75,105) (3,604,922) (1,999,114) (1,635,558) Return of Capital (411,759) -- -- -- - --------------------------------------------------------------------------------------------------------------------------------- Total Distributions to Shareholders (1,762,507) (3,604,922) (1,999,114) (1,635,558) ================================================================================================================================= SHARE TRANSACTIONS PROCEEDS FROM SHARES PURCHASED 502,274,497 351,821,838 304,396,861 231,342,986 VALUE OF SHARES PURCHASED THROUGH DIVIDEND REINVESTMENT 1,762,507 3,604,922 1,999,115 1,635,558 COST OF SHARES REDEEMED (484,440,775) (321,750,298) (291,283,425) (224,227,677) ================================================================================================================================= NET INCREASE (DECREASE) IN NET ASSETS FROM SHARE TRANSACTIONS 19,596,229 33,676,462 15,112,551 8,750,867 - --------------------------------------------------------------------------------------------------------------------------------- Net Increase (Decrease) in Net Assets 16,966,807 37,285,532 15,617,246 11,837,104 NET ASSETS--BEGINNING OF YEAR 40,631,995 3,346,463 18,544,297 6,707,193 ================================================================================================================================= NET ASSETS--END OF YEAR $ 57,598,802 $ 40,631,995 $ 34,161,543 $ 18,544,297 =================================================================================================================================
THE RYDEX VARIABLE TRUST ANNUAL REPORT | 167 STATEMENTS OF CHANGES IN NET ASSETS (CONTINUED) - --------------------------------------------------------------------------------
INVERSE MID-CAP FUND MEKROS FUND - --------------------------------------------------------------------------------------------------------------- PERIOD YEAR YEAR ENDED ENDED ENDED DECEMBER 31, DECEMBER 31, DECEMBER 31, 2004* 2004 2003 - --------------------------------------------------------------------------------------------------------------- FROM OPERATIONS Net Investment Income (Loss) $ (2,285) $ (197,859) $ (237,169) Net Realized Gain (Loss) on Investments (367,573) (888,965) 16,438,576 Net Change in Unrealized Appreciation (Depreciation) on Investments (40,313) 3,839,510 3,618,279 - --------------------------------------------------------------------------------------------------------------- Net Increase (Decrease) in Net Assets from Operations (410,171) 2,752,686 19,819,686 - --------------------------------------------------------------------------------------------------------------- DISTRIBUTIONS TO SHAREHOLDERS FROM: (NOTE 1) Net Investment Income -- -- -- Realized Gain on Investment -- (2,733,522) (13,820,181) - --------------------------------------------------------------------------------------------------------------- Total Distributions to Shareholders -- (2,733,522) (13,820,181) =============================================================================================================== SHARE TRANSACTIONS PROCEEDS FROM SHARES PURCHASED 25,668,229 976,494,702 550,390,026 VALUE OF SHARES PURCHASED THROUGH DIVIDEND REINVESTMENT -- 2,733,522 13,820,181 COST OF SHARES REDEEMED (23,939,211) (989,593,393) (460,161,802) =============================================================================================================== NET INCREASE (DECREASE) IN NET ASSETS FROM SHARE TRANSACTIONS 1,729,018 (10,365,169) 104,048,405 - --------------------------------------------------------------------------------------------------------------- Net Increase (Decrease) in Net Assets 1,318,847 (10,346,005) 110,047,910 NET ASSETS - BEGINNING OF PERIOD -- 122,994,801 12,946,891 =============================================================================================================== NET ASSETS - END OF PERIOD $ 1,318,847 $ 112,648,796 $ 122,994,801 =============================================================================================================== INVERSE U.S. GOVERNMENT SMALL-CAP FUND BOND FUND - --------------------------------------------------------------------------------------------------------------- PERIOD YEAR YEAR ENDED ENDED ENDED DECEMBER 31, DECEMBER 31, DECEMBER 31, 2004* 2004 2003 - --------------------------------------------------------------------------------------------------------------- FROM OPERATIONS Net Investment Income (Loss) $ (30,312) $ 1,854,888 $ 1,199,536 Net Realized Gain (Loss) on Investments (2,546,925) (3,325,624) 591,756 Net Change in Unrealized Appreciation (Depreciation) on Investments (103,483) 814,711 (715,625) - --------------------------------------------------------------------------------------------------------------- Net Increase (Decrease) in Net Assets from Operations (2,680,720) (656,025) 1,075,667 - --------------------------------------------------------------------------------------------------------------- DISTRIBUTIONS TO SHAREHOLDERS FROM: (NOTE 1) Net Investment Income -- (1,854,888) (1,202,776) Realized Gain on Investment -- (2,222,111) (1,602,254) - --------------------------------------------------------------------------------------------------------------- Total Distributions to Shareholders -- (4,076,999) (2,805,030) =============================================================================================================== SHARE TRANSACTIONS PROCEEDS FROM SHARES PURCHASED 160,480,852 538,567,559 387,766,317 VALUE OF SHARES PURCHASED THROUGH DIVIDEND REINVESTMENT -- 4,076,908 2,805,030 COST OF SHARES REDEEMED (153,456,336) (554,560,732) (348,673,786) =============================================================================================================== NET INCREASE (DECREASE) IN NET ASSETS FROM SHARE TRANSACTIONS 7,024,516 (11,916,265) 41,897,561 - --------------------------------------------------------------------------------------------------------------- Net Increase (Decrease) in Net Assets 4,343,796 (16,649,289) 40,168,198 NET ASSETS - BEGINNING OF PERIOD -- 65,358,381 25,190,183 =============================================================================================================== NET ASSETS - END OF PERIOD $ 4,343,796 $ 48,709,092 $ 65,358,381 ===============================================================================================================
* SINCE THE COMMENCEMENT OF OPERATIONS: MAY 3, 2004. ** SINCE THE COMMENCEMENT OF OPERATIONS: MAY 1, 2003. See Notes to Financial Statements. 168 | THE RYDEX VARIABLE TRUST ANNUAL REPORT - --------------------------------------------------------------------------------
JUNO LARGE-CAP FUND EUROPE FUND - --------------------------------------------------------------------------------------------------------------------------------- YEAR PERIOD YEAR YEAR ENDED ENDED ENDED ENDED DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31, 2004 2003** 2004 2003 - --------------------------------------------------------------------------------------------------------------------------------- FROM OPERATIONS Net Investment Income (Loss) $ (1,440,384) $ (106,644) $ (64,263) $ (84,676) Net Realized Gain (Loss) on Investments (6,676,389) 679,493 6,057,473 5,604,710 Net Change in Unrealized Appreciation (Depreciation) on Investments 640,505 (79,239) (474,828) 1,446,579 - --------------------------------------------------------------------------------------------------------------------------------- Net Increase (Decrease) in Net Assets from Operations (7,476,268) 493,610 5,518,382 6,966,613 - --------------------------------------------------------------------------------------------------------------------------------- DISTRIBUTIONS TO SHAREHOLDERS FROM: (NOTE 1) Net Investment Income -- -- (6,158,766) -- Realized Gain on Investment (493,610) -- (146,665) (6,433,360) - --------------------------------------------------------------------------------------------------------------------------------- Total Distributions to Shareholders (493,610) -- (6,305,431) (6,433,360) ================================================================================================================================= SHARE TRANSACTIONS PROCEEDS FROM SHARES PURCHASED 340,781,200 195,649,061 233,795,199 149,850,310 VALUE OF SHARES PURCHASED THROUGH DIVIDEND REINVESTMENT 493,610 -- 6,305,431 6,433,360 COST OF SHARES REDEEMED (314,561,977) (173,787,830) (222,761,894) (121,456,209) ================================================================================================================================= NET INCREASE (DECREASE) IN NET ASSETS FROM SHARE TRANSACTIONS 26,712,833 21,861,231 17,338,736 34,827,461 - --------------------------------------------------------------------------------------------------------------------------------- Net Increase (Decrease) in Net Assets 18,742,955 22,354,841 16,551,687 35,360,714 NET ASSETS - BEGINNING OF PERIOD 22,354,841 -- 38,442,562 3,081,848 ================================================================================================================================= NET ASSETS - END OF PERIOD $ 41,097,796 $ 22,354,841 $ 54,994,249 $ 38,442,562 ================================================================================================================================= LARGE-CAP JAPAN FUND - --------------------------------------------------------------------------------------------- YEAR YEAR ENDED ENDED DECEMBER 31, DECEMBER 31, 2004 2003 - --------------------------------------------------------------------------------------------- FROM OPERATIONS Net Investment Income (Loss) $ (92,520) $ (91,270) Net Realized Gain (Loss) on Investments (6,780,607) (4,377,773) Net Change in Unrealized Appreciation (Depreciation) on Investments 369,019 398,460 - --------------------------------------------------------------------------------------------- Net Increase (Decrease) in Net Assets from Operations (6,504,108) (4,070,583) - --------------------------------------------------------------------------------------------- DISTRIBUTIONS TO SHAREHOLDERS FROM: (NOTE 1) Net Investment Income -- -- Realized Gain on Investment -- -- - --------------------------------------------------------------------------------------------- Total Distributions to Shareholders -- -- ============================================================================================= SHARE TRANSACTIONS PROCEEDS FROM SHARES PURCHASED 274,604,719 224,872,561 VALUE OF SHARES PURCHASED THROUGH DIVIDEND REINVESTMENT -- -- COST OF SHARES REDEEMED (265,414,004) (212,850,090) ============================================================================================= NET INCREASE (DECREASE) IN NET ASSETS FROM SHARE TRANSACTIONS 9,190,715 12,022,471 - --------------------------------------------------------------------------------------------- Net Increase (Decrease) in Net Assets 2,686,607 7,951,888 NET ASSETS - BEGINNING OF PERIOD 11,541,484 3,589,596 ============================================================================================= NET ASSETS - END OF PERIOD $ 14,228,091 $ 11,541,484 =============================================================================================
THE RYDEX VARIABLE TRUST ANNUAL REPORT | 169 STATEMENTS OF CHANGES IN NET ASSETS (CONTINUED) - --------------------------------------------------------------------------------
LONG DYNAMIC INVERSE DYNAMIC SMALL-CAP DOW 30 FUND DOW 30 FUND VALUE FUND - --------------------------------------------------------------------------------------------------------------- PERIOD PERIOD PERIOD ENDED ENDED ENDED DECEMBER 31, DECEMBER 31, DECEMBER 31, 2004* 2004* 2004* - --------------------------------------------------------------------------------------------------------------- FROM OPERATIONS Net Investment Income (Loss) $ 23,922 $ (1,756) $ 12,108 Net Realized Gain (Loss) on Investments 833,452 (389,886) 642,562 Net Change in Unrealized Appreciation (Depreciation) on Investments 366,012 (119,231) 4,318,874 - --------------------------------------------------------------------------------------------------------------- Net Increase (Decrease) in Net Assets from Operations 1,223,386 (510,873) 4,973,544 - --------------------------------------------------------------------------------------------------------------- DISTRIBUTIONS TO SHAREHOLDERS FROM: (NOTE 1) Net Investment Income (428,282) -- (22,072) Realized Gain on Investment (44,981) (75,845) (1,321,637) - --------------------------------------------------------------------------------------------------------------- Total Distributions to Shareholders (473,263) (75,845) (1,343,709) =============================================================================================================== SHARE TRANSACTIONS PROCEEDS FROM SHARES PURCHASED 104,259,013 28,429,636 166,808,498 VALUE OF SHARES PURCHASED THROUGH DIVIDEND REINVESTMENT 473,263 75,845 1,343,709 COST OF SHARES REDEEMED (95,063,056) (24,734,465) (124,508,526) =============================================================================================================== NET INCREASE IN NET ASSETS FROM SHARE TRANSACTIONS 9,669,220 3,771,016 43,643,681 - --------------------------------------------------------------------------------------------------------------- Net Increase in Net Assets 10,419,343 3,184,298 47,273,516 NET ASSETS - BEGINNING OF PERIOD -- -- -- =============================================================================================================== NET ASSETS - END OF PERIOD $ 10,419,343 $ 3,184,298 $ 47,273,516 ===============================================================================================================
* SINCE THE COMMENCEMENT OF OPERATIONS: MAY 3, 2004. See Notes to Financial Statements. 170 | THE RYDEX VARIABLE TRUST ANNUAL REPORT - --------------------------------------------------------------------------------
MID-CAP LARGE-CAP SMALL-CAP MID-CAP VALUE FUND VALUE FUND GROWTH FUND GROWTH FUND - --------------------------------------------------------------------------------------------------------------------------------- PERIOD PERIOD PERIOD PERIOD ENDED ENDED ENDED ENDED DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31, 2004* 2004* 2004* 2004* - --------------------------------------------------------------------------------------------------------------------------------- FROM OPERATIONS Net Investment Income (Loss) $ 597 $ 45,658 $ (116,105) $ (43,395) Net Realized Gain (Loss) on Investments 89,114 (113,593) (404,399) (1,385,920) Net Change in Unrealized Appreciation (Depreciation) on Investments 1,461,223 1,221,109 3,216,988 1,415,176 - --------------------------------------------------------------------------------------------------------------------------------- Net Increase (Decrease) in Net Assets from Operations 1,550,934 1,153,174 2,696,484 (14,139) - --------------------------------------------------------------------------------------------------------------------------------- DISTRIBUTIONS TO SHAREHOLDERS FROM: (NOTE 1) Net Investment Income (2,716) (43,247) -- -- Realized Gain on Investment (1,028,497) (122,982) (388,437) -- - --------------------------------------------------------------------------------------------------------------------------------- Total Distributions to Shareholders (1,031,213) (166,229) (388,437) -- ================================================================================================================================= SHARE TRANSACTIONS PROCEEDS FROM SHARES PURCHASED 145,080,950 112,952,676 206,473,307 112,362,627 VALUE OF SHARES PURCHASED THROUGH DIVIDEND REINVESTMENT 1,031,214 166,229 388,437 -- COST OF SHARES REDEEMED (127,153,333) (102,961,971) (178,900,425) (91,646,456) ================================================================================================================================= NET INCREASE IN NET ASSETS FROM SHARE TRANSACTIONS 18,958,831 10,156,934 27,961,319 20,716,171 - --------------------------------------------------------------------------------------------------------------------------------- Net Increase in Net Assets 19,478,552 11,143,879 30,269,366 20,702,032 NET ASSETS - BEGINNING OF PERIOD -- -- -- -- ================================================================================================================================= NET ASSETS - END OF PERIOD $ 19,478,552 $ 11,143,879 $ 30,269,366 $ 20,702,032 =================================================================================================================================
THE RYDEX VARIABLE TRUST ANNUAL REPORT | 171 STATEMENTS OF CHANGES IN NET ASSETS (CONTINUED) - --------------------------------------------------------------------------------
LARGE-CAP SECTOR ROTATION GROWTH FUND FUND - --------------------------------------------------------------------------------------------------------------- PERIOD YEAR YEAR ENDED ENDED ENDED DECEMBER 31, DECEMBER 31, DECEMBER 31, 2004* 2004 2003 - --------------------------------------------------------------------------------------------------------------- FROM OPERATIONS Net Investment Income (Loss) $ 111,669 $ (119,761) $ (86,467) Net Realized Gain (Loss) on Investments (424,470) 456,383 199,930 Net Change in Unrealized Appreciation (Depreciation) on Investments 1,026,831 1,404,987 2,671,217 - --------------------------------------------------------------------------------------------------------------- Net Increase (Decrease) in Net Assets from Operations 714,030 1,741,609 2,784,680 - --------------------------------------------------------------------------------------------------------------- DISTRIBUTIONS TO SHAREHOLDERS FROM: (NOTE 1) Net Investment Income (107,055) -- -- Realized Gain on Investment (125,768) -- -- - --------------------------------------------------------------------------------------------------------------- Total Distributions to Shareholders (232,823) -- -- =============================================================================================================== SHARE TRANSACTIONS PROCEEDS FROM SHARES PURCHASED 110,437,239 46,275,706 34,469,458 VALUE OF SHARES PURCHASED THROUGH DIVIDEND REINVESTMENT 232,823 -- -- COST OF SHARES REDEEMED (91,139,545) (40,863,604) (23,329,062) =============================================================================================================== NET INCREASE (DECREASE) IN NET ASSETS FROM SHARE TRANSACTIONS 19,530,517 5,412,102 11,140,396 - --------------------------------------------------------------------------------------------------------------- Net Increase (Decrease) in Net Assets 20,011,724 7,153,711 13,925,076 NET ASSETS - BEGINNING OF PERIOD -- 20,593,731 6,668,655 =============================================================================================================== NET ASSETS - END OF PERIOD $ 20,011,724 $ 27,747,442 $ 20,593,731 =============================================================================================================== U.S. GOVERNMENT MONEY MARKET FUND - --------------------------------------------------------------------------------------------- YEAR YEAR ENDED ENDED DECEMBER 31, DECEMBER 31, 2004 2003 - --------------------------------------------------------------------------------------------- FROM OPERATIONS Net Investment Income (Loss) $ 599,121 $ 31,665 Net Realized Gain (Loss) on Investments -- (33) Net Change in Unrealized Appreciation (Depreciation) on Investments -- -- - --------------------------------------------------------------------------------------------- Net Increase (Decrease) in Net Assets from Operations 599,121 31,632 - --------------------------------------------------------------------------------------------- DISTRIBUTIONS TO SHAREHOLDERS FROM: (NOTE 1) Net Investment Income (599,121) (31,663) Realized Gain on Investment -- -- - --------------------------------------------------------------------------------------------- Total Distributions to Shareholders (599,121) (31,663) ============================================================================================= SHARE TRANSACTIONS PROCEEDS FROM SHARES PURCHASED 1,972,975,071 2,702,076,887 VALUE OF SHARES PURCHASED THROUGH DIVIDEND REINVESTMENT 599,199 31,663 COST OF SHARES REDEEMED (2,038,389,174) (2,728,568,210) ============================================================================================= NET INCREASE (DECREASE) IN NET ASSETS FROM SHARE TRANSACTIONS (64,814,904) (26,459,660) - --------------------------------------------------------------------------------------------- Net Increase (Decrease) in Net Assets (64,814,904) (26,459,691) NET ASSETS - BEGINNING OF PERIOD 232,492,901 258,952,592 ============================================================================================= NET ASSETS - END OF PERIOD $ 167,677,997 $ 232,492,901 =============================================================================================
* SINCE THE COMMENCEMENT OF OPERATIONS: MAY 3, 2004. See Notes to Financial Statements. 172 | THE RYDEX VARIABLE TRUST ANNUAL REPORT - --------------------------------------------------------------------------------
BASIC BANKING FUND MATERIALS FUND - --------------------------------------------------------------------------------------------------------------------------------- YEAR YEAR YEAR YEAR ENDED ENDED ENDED ENDED DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31, 2004 2003 2004 2003 - --------------------------------------------------------------------------------------------------------------------------------- FROM OPERATIONS Net Investment Income (Loss) $ 208,716 $ 87,982 $ 95,937 $ 15,788 Net Realized Gain (Loss) on Investments 1,845,200 1,068,269 2,971,342 1,357,868 Net Change in Unrealized Appreciation (Depreciation) on Investments 313,551 939,638 2,699,467 3,456,467 - --------------------------------------------------------------------------------------------------------------------------------- Net Increase (Decrease) in Net Assets from Operations 2,367,467 2,095,889 5,766,746 4,830,123 - --------------------------------------------------------------------------------------------------------------------------------- DISTRIBUTIONS TO SHAREHOLDERS FROM: (NOTE 1) Net Investment Income (87,982) (48,501) (15,788) (8,471) Realized Gain on Investment (675,576) -- (896,336) -- - --------------------------------------------------------------------------------------------------------------------------------- Total Distributions to Shareholders (763,558) (48,501) (912,124) (8,471) ================================================================================================================================= SHARE TRANSACTIONS PROCEEDS FROM SHARES PURCHASED 124,491,844 100,981,465 183,981,709 138,932,693 VALUE OF SHARES PURCHASED THROUGH DIVIDEND REINVESTMENT 763,558 48,501 912,123 8,471 COST OF SHARES REDEEMED (122,054,600) (90,970,052) (188,147,370) (100,102,785) ================================================================================================================================= NET INCREASE (DECREASE) IN NET ASSETS FROM SHARE TRANSACTIONS 3,200,802 10,059,914 (3,253,538) 38,838,379 - --------------------------------------------------------------------------------------------------------------------------------- Net Increase (Decrease) in Net Assets 4,804,711 12,107,302 1,601,084 43,660,031 NET ASSETS - BEGINNING OF PERIOD 17,115,028 5,007,726 44,560,693 900,662 ================================================================================================================================= NET ASSETS - END OF PERIOD $ 21,919,739 $ 17,115,028 $ 46,161,777 $ 44,560,693 ================================================================================================================================= BIOTECHNOLOGY CONSUMER FUND PRODUCTS FUND - --------------------------------------------------------------------------------------------------------------------------------- YEAR YEAR YEAR YEAR ENDED ENDED ENDED ENDED DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31, 2004 2003 2004 2003 - --------------------------------------------------------------------------------------------------------------------------------- FROM OPERATIONS Net Investment Income (Loss) $ (254,024) $ (157,021) $ 98,701 $ 8,514 Net Realized Gain (Loss) on Investments (2,732,481) (540,830) (1,467,922) 484,691 Net Change in Unrealized Appreciation (Depreciation) on Investments (376,774) 1,733,969 1,868,349 822,685 - --------------------------------------------------------------------------------------------------------------------------------- Net Increase (Decrease) in Net Assets from Operations (3,363,279) 1,036,118 499,128 1,315,890 - --------------------------------------------------------------------------------------------------------------------------------- DISTRIBUTIONS TO SHAREHOLDERS FROM: (NOTE 1) Net Investment Income -- -- (8,514) (7,419) Realized Gain on Investment -- -- (366,859) (79,427) - --------------------------------------------------------------------------------------------------------------------------------- Total Distributions to Shareholders -- -- (375,373) (86,846) ================================================================================================================================= SHARE TRANSACTIONS PROCEEDS FROM SHARES PURCHASED 199,318,738 145,115,461 164,280,345 66,804,158 VALUE OF SHARES PURCHASED THROUGH DIVIDEND REINVESTMENT -- -- 375,373 86,846 COST OF SHARES REDEEMED (201,924,540) (137,169,386) (149,165,001) (65,454,686) ================================================================================================================================= NET INCREASE (DECREASE) IN NET ASSETS FROM SHARE TRANSACTIONS (2,605,802) 7,946,075 15,490,717 1,436,318 - --------------------------------------------------------------------------------------------------------------------------------- Net Increase (Decrease) in Net Assets (5,969,081) 8,982,193 15,614,472 2,665,362 NET ASSETS - BEGINNING OF PERIOD 12,557,412 3,575,219 8,818,460 6,153,098 ================================================================================================================================= NET ASSETS - END OF PERIOD $ 6,588,331 $ 12,557,412 $ 24,432,932 $ 8,818,460 =================================================================================================================================
THE RYDEX VARIABLE TRUST ANNUAL REPORT | 173 STATEMENTS OF CHANGES IN NET ASSETS (CONTINUED) - --------------------------------------------------------------------------------
ELECTRONICS ENERGY FUND FUND - --------------------------------------------------------------------------------------------------------------------------------- YEAR YEAR YEAR YEAR ENDED ENDED ENDED ENDED DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31, 2004 2003 2004 2003 - --------------------------------------------------------------------------------------------------------------------------------- FROM OPERATIONS Net Investment Income (Loss) $ (113,401) $ (164,309) $ 16,641 $ 2,902 Net Realized Gain (Loss) on Investments 452,350 (1,750,944) 3,764,934 328,296 Net Change in Unrealized Appreciation (Depreciation) on Investments (1,990,020) 3,018,119 7,203,445 1,861,724 - --------------------------------------------------------------------------------------------------------------------------------- Net Increase (Decrease) in Net Assets from Operations (1,651,071) 1,102,866 10,985,020 2,192,922 - --------------------------------------------------------------------------------------------------------------------------------- DISTRIBUTIONS TO SHAREHOLDERS FROM: (NOTE 1) Net Investment Income -- -- (2,902) -- Realized Gain on Investment -- -- (19,777) -- - --------------------------------------------------------------------------------------------------------------------------------- Total Distributions to Shareholders -- -- (22,679) -- ================================================================================================================================= SHARE TRANSACTIONS PROCEEDS FROM SHARES PURCHASED 127,993,084 160,585,681 211,381,026 112,136,062 VALUE OF SHARES PURCHASED THROUGH DIVIDEND REINVESTMENT -- -- 22,679 -- COST OF SHARES REDEEMED (141,970,932) (138,154,139) (193,697,442) (88,330,573) ================================================================================================================================= NET INCREASE (DECREASE) IN NET ASSETS FROM SHARE TRANSACTIONS (13,977,848) 22,431,542 17,706,263 23,805,489 - --------------------------------------------------------------------------------------------------------------------------------- Net Increase (Decrease) in Net Assets (15,628,919) 23,534,408 28,668,604 25,998,411 NET ASSETS - BEGINNING OF YEAR 27,918,249 4,383,841 31,832,058 5,833,647 ================================================================================================================================= NET ASSETS - END OF YEAR $ 12,289,330 $ 27,918,249 $ 60,500,662 $ 31,832,058 ================================================================================================================================= ENERGY SERVICES FUND - --------------------------------------------------------------------------------------------- YEAR YEAR ENDED ENDED DECEMBER 31, DECEMBER 31, 2004 2003 - --------------------------------------------------------------------------------------------- FROM OPERATIONS Net Investment Income (Loss) $ (240,027) $ (49,438) Net Realized Gain (Loss) on Investments (666,151) (634,164) Net Change in Unrealized Appreciation (Depreciation) on Investments 4,338,770 372,677 - --------------------------------------------------------------------------------------------- Net Increase (Decrease) in Net Assets from Operations 3,432,592 (310,925) - --------------------------------------------------------------------------------------------- DISTRIBUTIONS TO SHAREHOLDERS FROM: (NOTE 1) Net Investment Income -- -- Realized Gain on Investment -- -- - --------------------------------------------------------------------------------------------- Total Distributions to Shareholders -- -- ============================================================================================= SHARE TRANSACTIONS PROCEEDS FROM SHARES PURCHASED 194,518,793 129,065,660 VALUE OF SHARES PURCHASED THROUGH DIVIDEND REINVESTMENT -- -- COST OF SHARES REDEEMED (176,389,181) (125,427,736) ============================================================================================= NET INCREASE (DECREASE) IN NET ASSETS FROM SHARE TRANSACTIONS 18,129,612 3,637,924 - --------------------------------------------------------------------------------------------- Net Increase (Decrease) in Net Assets 21,562,204 3,326,999 NET ASSETS - BEGINNING OF YEAR 7,754,281 4,427,282 ============================================================================================= NET ASSETS - END OF YEAR $ 29,316,485 $ 7,754,281 =============================================================================================
See Notes to Financial Statements. 174 | THE RYDEX VARIABLE TRUST ANNUAL REPORT
FINANCIAL SERVICES HEALTH CARE FUND FUND - --------------------------------------------------------------------------------------------------------------------------------- YEAR YEAR YEAR YEAR ENDED ENDED ENDED ENDED DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31, 2004 2003 2004 2003 - --------------------------------------------------------------------------------------------------------------------------------- FROM OPERATIONS Net Investment Income (Loss) $ 227,270 $ 56,477 $ (194,293) $ (119,055) Net Realized Gain (Loss) on Investments 2,993,017 304,534 (4,048,919) 77,261 Net Change in Unrealized Appreciation (Depreciation) on Investments 1,012,134 922,451 2,251,151 1,826,299 - --------------------------------------------------------------------------------------------------------------------------------- Net Increase (Decrease) in Net Assets from Operations 4,232,421 1,283,462 (1,992,061) 1,784,505 - --------------------------------------------------------------------------------------------------------------------------------- DISTRIBUTIONS TO SHAREHOLDERS FROM: (NOTE 1) Net Investment Income (56,477) (17,051) -- -- Realized Gain on Investment -- -- (280,656) -- - --------------------------------------------------------------------------------------------------------------------------------- Total Distributions to Shareholders (56,477) (17,051) (280,656) -- ================================================================================================================================= SHARE TRANSACTIONS PROCEEDS FROM SHARES PURCHASED 135,746,956 150,394,455 187,573,599 165,734,777 VALUE OF SHARES PURCHASED THROUGH DIVIDEND REINVESTMENT 56,477 17,051 280,657 -- COST OF SHARES REDEEMED (110,380,869) (138,844,482) (183,025,743) (144,804,247) ================================================================================================================================= NET INCREASE (DECREASE) IN NET ASSETS FROM SHARE TRANSACTIONS 25,422,564 11,567,024 4,828,513 20,930,530 - --------------------------------------------------------------------------------------------------------------------------------- Net Increase (Decrease) in Net Assets 29,598,508 12,833,435 2,555,796 22,715,035 NET ASSETS - BEGINNING OF YEAR 15,581,191 2,747,756 27,879,518 5,164,483 ================================================================================================================================= NET ASSETS - END OF YEAR $ 45,179,699 $ 15,581,191 $ 30,435,314 $ 27,879,518 ================================================================================================================================= INTERNET LEISURE FUND FUND - --------------------------------------------------------------------------------------------------------------------------------- YEAR YEAR YEAR YEAR ENDED ENDED ENDED ENDED DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31, 2004 2003 2004 2003 - --------------------------------------------------------------------------------------------------------------------------------- FROM OPERATIONS Net Investment Income (Loss) $ (384,937) $ (140,230) $ (175,881) $ (38,085) Net Realized Gain (Loss) on Investments (1,703,305) (784,989) 2,075,047 544,615 Net Change in Unrealized Appreciation (Depreciation) on Investments 3,280,437 3,854,984 3,561,300 1,913,050 - --------------------------------------------------------------------------------------------------------------------------------- Net Increase (Decrease) in Net Assets from Operations 1,192,195 2,929,765 5,460,466 2,419,580 - --------------------------------------------------------------------------------------------------------------------------------- DISTRIBUTIONS TO SHAREHOLDERS FROM: (NOTE 1) Net Investment Income -- -- -- -- Realized Gain on Investment -- -- (176,049) -- - --------------------------------------------------------------------------------------------------------------------------------- Total Distributions to Shareholders -- -- (176,049) -- ================================================================================================================================= SHARE TRANSACTIONS PROCEEDS FROM SHARES PURCHASED 173,982,802 101,859,827 142,260,736 124,654,537 VALUE OF SHARES PURCHASED THROUGH DIVIDEND REINVESTMENT -- -- 176,049 -- COST OF SHARES REDEEMED (163,354,081) (83,391,529) (125,982,350) (99,072,809) ================================================================================================================================= NET INCREASE (DECREASE) IN NET ASSETS FROM SHARE TRANSACTIONS 10,628,721 18,468,298 16,454,435 25,581,728 - --------------------------------------------------------------------------------------------------------------------------------- Net Increase (Decrease) in Net Assets 11,820,916 21,398,063 21,738,852 28,001,308 NET ASSETS - BEGINNING OF YEAR 25,101,009 3,702,946 30,016,036 2,014,728 ================================================================================================================================= NET ASSETS - END OF YEAR $ 36,921,925 $ 25,101,009 $ 51,754,888 $ 30,016,036 =================================================================================================================================
THE RYDEX VARIABLE TRUST ANNUAL REPORT | 175 STATEMENTS OF CHANGES IN NET ASSETS (CONCLUDED) - --------------------------------------------------------------------------------
PRECIOUS REAL ESTATE METALS FUND FUND - --------------------------------------------------------------------------------------------------------------------------------- YEAR YEAR YEAR YEAR ENDED ENDED ENDED ENDED DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31, 2004 2003 2004 2003 - --------------------------------------------------------------------------------------------------------------------------------- FROM OPERATIONS Net Investment Income (Loss) $ (191,509) $ (99,371) $ 600,333 $ 262,380 Net Realized Gain (Loss) on Investments (4,346,436) (762,245) (1,998,721) 805,833 Net Change in Unrealized Appreciation (Depreciation) on Investments (7,741,810) 8,327,537 3,905,052 1,090,483 - --------------------------------------------------------------------------------------------------------------------------------- Net Increase (Decrease) in Net Assets from Operations (12,279,755) 7,465,921 2,506,664 2,158,696 - --------------------------------------------------------------------------------------------------------------------------------- DISTRIBUTIONS TO SHAREHOLDERS FROM: (NOTE 1) Net Investment Income -- -- (114,086) (316,642) Realized Gain on Investment -- -- (385,202) (539,225) - --------------------------------------------------------------------------------------------------------------------------------- Total Distributions to Shareholders -- -- (499,288) (855,867) ================================================================================================================================= SHARE TRANSACTIONS PROCEEDS FROM SHARES PURCHASED 227,819,060 222,563,028 250,440,684 114,889,069 VALUE OF SHARES PURCHASED THROUGH DIVIDEND REINVESTMENT -- -- 499,288 855,867 COST OF SHARES REDEEMED (225,101,989) (224,261,831) (238,214,879) (106,766,765) ================================================================================================================================= NET INCREASE (DECREASE) IN NET ASSETS FROM SHARE TRANSACTIONS 2,717,071 (1,698,803) 12,725,093 8,978,171 - --------------------------------------------------------------------------------------------------------------------------------- Net Increase (Decrease) in Net Assets (9,562,684) 5,767,118 14,732,469 10,281,000 NET ASSETS -- BEGINNING OF YEAR 44,605,754 38,838,636 12,182,722 1,901,722 ================================================================================================================================= NET ASSETS -- END OF YEAR $ 35,043,070 $ 44,605,754 $ 26,915,191 $ 12,182,722 ================================================================================================================================= RETAILING FUND - --------------------------------------------------------------------------------------------- YEAR YEAR ENDED ENDED DECEMBER 31, DECEMBER 31, 2004 2003 - --------------------------------------------------------------------------------------------- FROM OPERATIONS Net Investment Income (Loss) $ (148,011) $ (104,905) Net Realized Gain (Loss) on Investments (260,600) 156,865 Net Change in Unrealized Appreciation (Depreciation) on Investments 1,158,987 2,495,981 - --------------------------------------------------------------------------------------------- Net Increase (Decrease) in Net Assets from Operations 750,376 2,547,941 - --------------------------------------------------------------------------------------------- DISTRIBUTIONS TO SHAREHOLDERS FROM: (NOTE 1) Net Investment Income -- -- Realized Gain on Investment (865,536) (64,492) - --------------------------------------------------------------------------------------------- Total Distributions to Shareholders (865,536) (64,492) ============================================================================================= SHARE TRANSACTIONS PROCEEDS FROM SHARES PURCHASED 100,889,298 86,085,351 VALUE OF SHARES PURCHASED THROUGH DIVIDEND REINVESTMENT 865,536 64,492 COST OF SHARES REDEEMED (95,988,454) (76,585,644) ============================================================================================= NET INCREASE (DECREASE) IN NET ASSETS FROM SHARE TRANSACTIONS 5,766,380 9,564,199 - --------------------------------------------------------------------------------------------- Net Increase (Decrease) in Net Assets 5,651,220 12,047,648 NET ASSETS -- BEGINNING OF YEAR 15,149,169 3,101,521 ============================================================================================= NET ASSETS -- END OF YEAR $ 20,800,389 $ 15,149,169 =============================================================================================
See Notes to Financial Statements. 176 | THE RYDEX VARIABLE TRUST ANNUAL REPORT - --------------------------------------------------------------------------------
TECHNOLOGY TELECOMMUNICATIONS FUND FUND - --------------------------------------------------------------------------------------------------------------------------------- YEAR YEAR YEAR YEAR ENDED ENDED ENDED ENDED DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31, 2004 2003 2004 2003 - --------------------------------------------------------------------------------------------------------------------------------- FROM OPERATIONS Net Investment Income (Loss) $ (63,269) $ (200,746) $ (15,905) $ (11,378) Net Realized Gain (Loss) on Investments (1,513,746) 454,360 (320,328) (581,652) Net Change in Unrealized Appreciation (Depreciation) on Investments 236,415 2,144,236 2,929,686 1,614,830 - --------------------------------------------------------------------------------------------------------------------------------- Net Increase (Decrease) in Net Assets from Operations (1,340,600) 2,397,850 2,593,453 1,021,800 - --------------------------------------------------------------------------------------------------------------------------------- DISTRIBUTIONS TO SHAREHOLDERS FROM: (NOTE 1) Net Investment Income -- -- -- -- Realized Gain on Investment (1,130,753) (1,373,910) -- (77) - --------------------------------------------------------------------------------------------------------------------------------- Total Distributions to Shareholders (1,130,753) (1,373,910) -- (77) ================================================================================================================================= SHARE TRANSACTIONS PROCEEDS FROM SHARES PURCHASED 120,344,071 167,024,357 169,150,792 66,566,298 VALUE OF SHARES PURCHASED THROUGH DIVIDEND REINVESTMENT 1,130,753 1,373,910 -- 77 COST OF SHARES REDEEMED (119,725,789) (153,802,069) (156,096,553) (59,150,550) ================================================================================================================================= NET INCREASE (DECREASE) IN NET ASSETS FROM SHARE TRANSACTIONS 1,749,035 14,596,198 13,054,239 7,415,825 - --------------------------------------------------------------------------------------------------------------------------------- Net Increase (Decrease) in Net Assets (722,318) 15,620,138 15,647,692 8,437,548 NET ASSETS -- BEGINNING OF YEAR 20,641,083 5,020,945 14,543,088 6,105,540 ================================================================================================================================= NET ASSETS -- END OF YEAR $ 19,918,765 $ 20,641,083 $ 30,190,780 $ 14,543,088 ================================================================================================================================= TRANSPORTATION UTILITIES FUND FUND - --------------------------------------------------------------------------------------------------------------------------------- YEAR YEAR YEAR YEAR ENDED ENDED ENDED ENDED DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31, 2004 2003 2004 2003 - --------------------------------------------------------------------------------------------------------------------------------- FROM OPERATIONS Net Investment Income (Loss) $ (148,396) $ (29,296) $ 313,329 $ 265,543 Net Realized Gain (Loss) on Investments (1,111,192) 399,470 1,405,192 1,934,205 Net Change in Unrealized Appreciation (Depreciation) on Investments 7,775,218 385,698 1,370,754 (101,993) - --------------------------------------------------------------------------------------------------------------------------------- Net Increase (Decrease) in Net Assets from Operations 6,515,630 755,872 3,089,275 2,097,755 - --------------------------------------------------------------------------------------------------------------------------------- DISTRIBUTIONS TO SHAREHOLDERS FROM: (NOTE 1) Net Investment Income -- -- (265,543) (176,841) Realized Gain on Investment (315,578) -- -- -- - --------------------------------------------------------------------------------------------------------------------------------- Total Distributions to Shareholders (315,578) -- (265,543) (176,841) ================================================================================================================================= SHARE TRANSACTIONS PROCEEDS FROM SHARES PURCHASED 122,599,361 43,242,848 138,522,407 183,355,226 VALUE OF SHARES PURCHASED THROUGH DIVIDEND REINVESTMENT 315,578 -- 265,543 176,841 COST OF SHARES REDEEMED (89,813,713) (42,267,397) (133,139,508) (195,868,474) ================================================================================================================================= NET INCREASE (DECREASE) IN NET ASSETS FROM SHARE TRANSACTIONS 33,101,226 975,451 5,648,442 (12,336,407) - --------------------------------------------------------------------------------------------------------------------------------- Net Increase (Decrease) in Net Assets 39,301,278 1,731,323 8,472,174 (10,415,493) NET ASSETS -- BEGINNING OF YEAR 8,032,151 6,300,828 13,430,018 23,845,511 ================================================================================================================================= NET ASSETS -- END OF YEAR $ 47,333,429 $ 8,032,151 $ 21,902,192 $ 13,430,018 =================================================================================================================================
THE RYDEX VARIABLE TRUST ANNUAL REPORT | 177 FINANCIAL HIGHLIGHTS - -------------------------------------------------------------------------------- This table is presented to show selected data for a share outstanding throughout each period, and to assist shareholders in evaluating a Fund's performance for the periods presented.
NET REALIZED NET INCREASE NET ASSET NET AND (DECREASE) DISTRIBUTIONS DISTRIBUTIONS DISTRIBUTIONS VALUE, INVESTMENT UNREALIZED IN NET ASSET FROM NET FROM NET FROM BEGINNING INCOME GAINS (LOSSES) VALUE RESULTING INVESTMENT REALIZED RETURN OF OF PERIOD (LOSS)+ ON SECURITIES FROM OPERATIONS INCOME CAPITAL GAINS CAPITAL - ---------------------------------------------------------------------------------------------------------------------------------- NOVA FUND DECEMBER 31, 2004 $ 7.21 $ .03 $ 1.02 $ 1.05 $ (--)ss. $ -- $ -- December 31, 2003 5.18 .01 2.02 2.03 -- -- -- December 31, 2002 8.67 (.01) (3.07) (3.08) (.41) -- -- December 31, 2001 13.88 .30 (3.81) (3.51) (1.70) -- -- December 31, 2000 18.57 .74 (4.16) (3.42) (.15) (1.12) -- URSA FUND DECEMBER 31, 2004 5.77 (.02) (.56) (.58) -- -- -- December 31, 2003 7.57 (.04) (1.76) (1.80) -- -- -- December 31, 2002 6.29 (.02) 1.38 1.36 (.08) -- -- December 31, 2001 6.09 .12 .88 1.00 (.80) -- -- December 31, 2000 5.35 .22 .70 .92 (.18) -- -- OTC FUND DECEMBER 31, 2004 13.16 (.02) 1.25 1.23 -- -- -- December 31, 2003 9.05 (.13) 4.24 4.11 -- -- -- December 31, 2002 14.80 (.17) (5.58) (5.75) -- -- -- December 31, 2001 22.83 (.23) (7.80) (8.03) -- -- -- December 31, 2000 38.52 (.44) (13.50) (13.94) -- (1.75) -- ARKTOS FUND DECEMBER 31, 2004 24.09 (.08) (2.77) (2.85) -- -- -- December 31, 2003 39.04 (.22) (14.33) (14.55) -- (.40) -- December 31, 2002 29.48 (.19) 10.22 10.03 (.47) -- -- December 31, 2001* 25.00 .03 4.45 4.48 -- -- -- TITAN 500 FUND DECEMBER 31, 2004 21.59 .02 2.98 3.00 -- (4.76) -- December 31, 2003 16.09 (.11) 8.95 8.84 -- (3.34) -- December 31, 2002 29.87 (.09) (13.65) (13.74) -- (.04) -- December 31, 2001* 25.00 (.25) 5.12 4.87 -- -- -- VELOCITY 100 FUND DECEMBER 31, 2004 21.73 (.06) 2.76 2.70 (.97) (.06) (.31) December 31, 2003 11.90 (.21) 11.95 11.74 -- (1.91) -- December 31, 2002 38.97 (.13) (26.94) (27.07) -- -- -- December 31, 2001* 25.00 (.59) 14.56 13.97 -- -- -- MEDIUS FUND DECEMBER 31, 2004 24.74 (.09) 4.96 4.87 -- (3.11) -- December 31, 2003 17.77 (.12) 9.44 9.32 -- (2.35) -- December 31, 2002 31.21 (.12) (7.18) (7.30) -- (6.14) -- December 31, 2001* 25.00 (.20) 6.88 6.68 -- (.47) -- RATIOS TO AVERAGE NET ASSETS: ---------------------------------- NET INCREASE NET ASSET NET NET ASSETS, (DECREASE) IN VALUE, TOTAL INVESTMENT PORTFOLIO END OF TOTAL NET ASSET END OF INVESTMENT TOTAL INCOME TURNOVER PERIOD (000'S DISTRIBUTIONS VALUE PERIOD RETURN EXPENSES (LOSS) RATE*** OMITTED) - --------------------------------------------------------------------------------------------------------------------------------- NOVA FUND DECEMBER 31, 2004 $ (--)ss. $ 1.05 $ 8.26 14.62% 1.46% 0.41% 654% $130,200 December 31, 2003 -- 2.03 7.21 39.19% 1.54% 0.09% 729% 81,816 December 31, 2002 (.41) (3.49) 5.18 (35.72)% 1.72% (0.14)% 570% 34,017 December 31, 2001 (1.70) (5.21) 8.67 (23.58)% 1.45% 2.61% -- 60,941 December 31, 2000 (1.27) (4.69) 13.88 (20.30)% 1.42% 4.45% -- 178,118 URSA FUND DECEMBER 31, 2004 -- (.58) 5.19 (10.05)% 1.62% (0.28)% -- 19,076 December 31, 2003 -- (1.80) 5.77 (23.78)% 1.67% (0.59)% -- 17,822 December 31, 2002 (.08) 1.28 7.57 21.64% 1.79% (0.24)% -- 36,195 December 31, 2001 (.80) .20 6.29 14.99% 1.89% 1.85% -- 18,997 December 31, 2000 (.18) .74 6.09 16.05% 1.59% 4.02% -- 31,829 OTC FUND DECEMBER 31, 2004 -- 1.23 14.39 9.35% 1.47% (0.17)% 418% 191,476 December 31, 2003 -- 4.11 13.16 45.41% 1.53% (1.20)% 482% 127,836 December 31, 2002 -- (5.75) 9.05 (38.85)% 1.74% (1.58)% 183% 77,635 December 31, 2001 -- (8.03) 14.80 (35.17)% 1.45% (1.31)% 139% 164,619 December 31, 2000 (1.75) (15.69) 22.83 (38.19)% 1.46% (1.23)% 324% 420,674 ARKTOS FUND DECEMBER 31, 2004 -- (2.85) 21.24 (11.83)% 1.64% (0.35)% -- 23,928 December 31, 2003 (.40) (14.95) 24.09 (37.37)% 1.68% (0.73)% -- 34,563 December 31, 2002 (.47) 9.56 39.04 33.85% 1.77% (0.49)% -- 24,229 December 31, 2001* -- 4.48 29.48 17.92% 2.23%** 0.10%** -- 5,955 TITAN FUND DECEMBER 31, 2004 (4.76) (1.76) 19.83 16.90% 1.65% 0.09% 974% 29,053 December 31, 2003 (3.34) 5.50 21.59 54.94% 1.69% (0.55)% 1,085% 30,428 December 31, 2002 (.04) (13.78) 16.09 (46.00)% 1.74% (0.49)% -- 2,122 December 31, 2001* -- 4.87 29.87 19.48% 2.22%** (1.11)%** -- 311 VELOCITY FUND DECEMBER 31, 2004 (1.34) 1.36 23.09 14.21% 1.65% (0.29)% 662% 57,599 December 31, 2003 (1.91) 9.83 21.73 98.63% 1.71% (1.10)% 959% 40,632 December 31, 2002 -- (27.07) 11.90 (69.46)% 1.77% (0.79)% -- 3,346 December 31, 2001* -- 13.97 38.97 55.88% 2.34%** (1.77)%** -- 477 MEDIUS FUND DECEMBER 31, 2004 (3.11) 1.76 26.50 22.14% 1.64% (0.37)% 866% 34,162 December 31, 2003 (2.35) 6.97 24.74 52.43% 1.70% (0.54)% 1,665% 18,544 December 31, 2002 (6.14) (13.44) 17.77 (24.44)% 1.75% (0.49)% 4,320% 6,707 December 31, 2001* (.47) 6.21 31.21 26.67% 2.27%** (0.87)%** 3,707% 754
* SINCE THE COMMENCEMENT OF OPERATIONS: MAY 21, 2001--ARKTOS FUND;OCTOBER 1, 2001--TITAN 500 FUND, VELOCITY 100 FUND AND MEDIUS FUND. ** ANNUALIZED *** PORTFOLIO TURNOVER RATE IS CALCULATED WITHOUT REGARD TO SHORT-TERM SECURITIES HAVING A MATURITY OF LESS THAN ONE YEAR. + CALCULATED USING THE AVERAGE DAILY SHARES OUTSTANDING FOR THE YEAR. ss. LESS THAN $.01 PER SHARE. ACTUAL AMOUNT = $.003782097. See Notes to Financial Statements. 178 | THE RYDEX VARIABLE TRUST ANNUAL REPORT FINANCIAL HIGHLIGHTS (CONTINUED) - -------------------------------------------------------------------------------- This table is presented to show selected data for a share outstanding throughout each period, and to assist shareholders in evaluating a Fund's performance for the periods presented.
NET REALIZED NET INCREASE NET ASSET NET AND (DECREASE) DISTRIBUTIONS VALUE, INVESTMENT UNREALIZED IN NET ASSET FROM NET BEGINNING INCOME GAINS (LOSSES) VALUE RESULTING INVESTMENT OF PERIOD (LOSS)+ ON SECURITIES FROM OPERATIONS INCOME - ----------------------------------------------------------------------------------------------------------- INVERSE MID-CAP FUND DECEMBER 31, 2004* $50.00 $(.06) $ (5.91) $ (5.97) $ -- MEKROS FUND DECEMBER 31, 2004 29.75 (.10) 6.95 6.85 -- December 31, 2003 20.11 (.18) 13.11 12.93 -- December 31, 2002 31.91 (.17) (11.08) (11.25) -- December 31, 2001* 25.00 (.31) 7.56 7.25 -- INVERSE SMALL-CAP FUND DECEMBER 31, 2004* 50.00 (.10) (7.07) (7.17) -- U.S. GOVERNMENT BOND FUND DECEMBER 31, 2004 11.67 .40 .54 .94 (.40) December 31, 2003 13.08 .41 (.52) (.11) (.41) December 31, 2002 11.44 .44 1.64 2.08 (.44) December 31, 2001 11.80 .37 (.36) .01 (.37) December 31, 2000 10.17 .38 1.63 2.01 (.38) JUNO FUND DECEMBER 31, 2004 24.82 (.66) (1.98) (2.64) -- December 31, 2003* 25.00 (.13) (.05) (.18) -- LARGE-CAP EUROPE FUND DECEMBER 31, 2004 22.87 (.05) 3.71 3.66 (3.82) December 31, 2003 19.52 (.17) 8.58 8.41 -- December 31, 2002 28.01 (.09) (7.84) (7.93) (.01) December 31, 2001* 25.00 (.16) 3.17 3.01 -- LARGE-CAP JAPAN FUND DECEMBER 31, 2004 25.17 (.14) 2.74 2.60 -- December 31, 2003 18.29 (.16) 7.04 6.88 -- December 31, 2002 21.91 (.08) (3.46) (3.54) -- December 31, 2001* 25.00 (.16) (2.93) (3.09) -- LONG DYNAMIC DOW 30 FUND DECEMBER 31, 2004* 25.00 .14 2.03 2.17 (1.16) INVERSE DYNAMIC DOW 30 FUND DECEMBER 31, 2004* 50.00 (.03) (5.71) (5.74) -- SMALL-CAP VALUE FUND DECEMBER 31, 2004* 25.00 .01 4.50 4.51 (.01) MID-CAP VALUE FUND DECEMBER 31, 2004* 25.00 -- 3.80 3.80 (--)ss. LARGE-CAP VALUE FUND DECEMBER 31, 2004* 25.00 .12 3.00 3.12 (.11) DISTRIBUTIONS NET INCREASE NET ASSET FROM NET (DECREASE) IN VALUE, REALIZED TOTAL NET ASSET END OF CAPITAL GAINS DISTRIBUTIONS VALUE PERIOD - -------------------------------------------------------------------------------------------- INVERSE MID-CAP FUND DECEMBER 31, 2004* $ -- $ -- $ (5.97) $ 44.03 MEKROS FUND DECEMBER 31, 2004 (2.95) (2.95) 3.90 33.65 December 31, 2003 (3.29) (3.29) 9.64 29.75 December 31, 2002 (.55) (.55) (11.80) 20.11 December 31, 2001* (.34) (.34) 6.91 31.91 INVERSE SMALL-CAP FUND DECEMBER 31, 2004* -- -- (7.17) 42.83 U.S. GOVERNMENT BOND FUND DECEMBER 31, 2004 (.33) (.73) .21 11.88 December 31, 2003 (.89) (1.30) (1.41) 11.67 December 31, 2002 -- (.44) 1.64 13.08 December 31, 2001 -- (.37) (.36) 11.44 December 31, 2000 -- (.38) 1.63 11.80 JUNO FUND DECEMBER 31, 2004 (.23) (.23) (2.87) 21.95 December 31, 2003* -- -- (.18) 24.82 LARGE-CAP EUROPE FUND DECEMBER 31, 2004 (.09) (3.91) (.25) 22.62 December 31, 2003 (5.06) (5.06) 3.35 22.87 December 31, 2002 (.55) (.56) (8.49) 19.52 December 31, 2001* -- -- 3.01 28.01 LARGE-CAP JAPAN FUND DECEMBER 31, 2004 -- -- 2.60 27.77 December 31, 2003 -- -- 6.88 25.17 December 31, 2002 (.08) (.08) (3.62) 18.29 December 31, 2001* -- -- (3.09) 21.91 LONG DYNAMIC DOW 30 FUND DECEMBER 31, 2004* (.12) (1.28) .89 25.89 INVERSE DYNAMIC DOW 30 FUND DECEMBER 31, 2004* (1.04) (1.04) (6.78) 43.22 SMALL-CAP VALUE FUND DECEMBER 31, 2004* (.66) (.67) 3.84 28.84 MID-CAP VALUE FUND DECEMBER 31, 2004* (1.72) (1.72) 2.08 27.08 LARGE-CAP VALUE FUND DECEMBER 31, 2004* (.33) (.44) 2.68 27.68 RATIOS TO AVERAGE NET ASSETS: ---------------------------------- NET NET ASSETS, TOTAL INVESTMENT PORTFOLIO END OF INVESTMENT GROSS NET OPERATING INCOME TURNOVER PERIOD (000's RETURN EXPENSES EXPENSES EXPENSES++ (LOSS) RATE*** OMITTED) ---------- -------- -------- ----------- ---------- ---------- ------------- INVERSE MID-CAP FUND DECEMBER 31, 2004* (11.94)% 1.62%** 1.62%** 1.62%** (0.17)%** -- $ 1,319 MEKROS FUND DECEMBER 31, 2004 25.20% 1.65% 1.65% 1.65% (0.32)% 1171% 112,649 December 31, 2003 64.28% 1.70% 1.70% 1.70% (0.66)% 1135% 122,995 December 31, 2002 (35.45)% 1.74% 1.74% 1.74% (0.70)% 1940% 12,947 December 31, 2001* 28.97% 2.26%** 2.26%** 2.26%** (0.96)%** 848% 8,524 INVERSE SMALL-CAP FUND DECEMBER 31, 2004* (14.34)% 1.65%** 1.65%** 1.65%** (0.29)%** -- 4,344 U.S. GOVERNMENT BOND FUND DECEMBER 31, 2004 8.42% 1.21% 1.21% 1.21% 3.36% 1318% 48,709 December 31, 2003 (0.64)% 1.23% 1.23% 1.23% 3.26% 1272% 65,358 December 31, 2002 18.62% 1.24% 1.24% 1.24% 3.65% 1239% 25,190 December 31, 2001 0.08% 2.37% 2.01% 2.01% 3.22% 1247% 4,521 December 31, 2000 20.16% 1.89% 1.89% 1.89% 3.47% 1505% 5,011 JUNO FUND DECEMBER 31, 2004 (10.67)% 5.02% 5.02% 1.63% (2.86)% -- 41,098 December 31, 2003* (0.72)% 1.69%** 1.69%** 1.69%** (0.74)%** -- 22,355 LARGE-CAP EUROPE FUND DECEMBER 31, 2004 16.15% 1.64% 1.64% 1.64% (0.23)% -- 54,994 December 31, 2003 43.08% 1.70% 1.70% 1.70% (0.75)% -- 38,443 December 31, 2002 (28.35)% 1.78% 1.78% 1.78% (0.41)% -- 3,082 December 31, 2001* 12.04% 2.17%** 2.17%** 2.17%** (0.55)%** -- 1,322 LARGE-CAP JAPAN FUND DECEMBER 31, 2004 10.33% 1.63% 1.63% 1.63% (0.50)% -- 14,228 December 31, 2003 37.62% 1.69% 1.69% 1.69% (0.75)% -- 11,541 December 31, 2002 (16.20)% 1.80% 1.80% 1.80% (0.38)% -- 3,590 December 31, 2001* (12.36)% 2.23%** 2.23%** 2.23%** (0.62)%** -- 643 LONG DYNAMIC DOW 30 FUND DECEMBER 31, 2004* 8.65% 1.63%** 1.63%** 1.63%** 0.91%** 907% 10,419 INVERSE DYNAMIC DOW 30 FUND DECEMBER 31, 2004* (11.47)% 1.62%** 1.62%** 1.62%** (0.09)%** -- 3,184 SMALL-CAP VALUE FUND DECEMBER 31, 2004* 18.03% 1.46%** 1.46%** 1.46%** 0.07%** 507% 47,274 MID-CAP VALUE FUND DECEMBER 31, 2004* 15.20% 1.48%** 1.48%** 1.48%** 0.01%** 1173% 19,479 LARGE-CAP VALUE FUND DECEMBER 31, 2004* 12.49% 1.45%** 1.45%** 1.45%** 0.69%** 983% 11,144
* SINCE THE COMMENCEMENT OF OPERATIONS: OCTOBER 1, 2001 -- MEKROS FUND, LARGE-CAP EUROPE FUND AND LARGE-CAP JAPAN FUND; MAY 1, 2003 -- JUNO FUND; MAY 3, 2004 -- INVERSE MID-CAP FUND, INVERSE SMALL-CAP FUND, LONG DYNAMIC DOW 30 FUND, INVERSE DYNAMIC DOW 30 FUND, SMALL-CAP VALUE FUND, MID-CAP VALUE FUND AND LARGE-CAP VALUE FUND. ** ANNUALIZED *** PORTFOLIO TURNOVER RATE IS CALCULATED WITHOUT REGARD TO SHORT-TERM SECURITIES HAVING A MATURITY OF LESS THAN ONE YEAR. + CALCULATED USING THE AVERAGE DAILY SHARES OUTSTANDING FOR THE YEAR. ++ OPERATING EXPENSES EXCLUDE INTEREST EXPENSE FROM SECURITIES SOLD SHORT. ss. LESS THAN $.01 PER SHARE. ACTUAL AMOUNT = $.00454. THE RYDEX VARIABLE TRUST ANNUAL REPORT | 179 FINANCIAL HIGHLIGHTS (CONTINUED) - -------------------------------------------------------------------------------- This table is presented to show selected data for a share outstanding throughout each period, and to assist shareholders in evaluating a Fund's performance for the periods presented.
NET REALIZED NET INCREASE NET ASSET NET AND (DECREASE) DISTRIBUTIONS VALUE, INVESTMENT UNREALIZED IN NET ASSET FROM NET BEGINNING INCOME GAINS (LOSSES) VALUE RESULTING INVESTMENT OF PERIOD (LOSS)+ ON SECURITIES FROM OPERATIONS INCOME - ------------------------------------------------------------------------------------------------------------------ SMALL-CAP GROWTH FUND DECEMBER 31, 2004* $ 25.00 $(.17) $ 4.12 $ 3.95 $ -- MID-CAP GROWTH FUND DECEMBER 31, 2004* 25.00 (.13) 2.26 2.13 -- LARGE-CAP GROWTH FUND DECEMBER 31, 2004* 25.00 .36 .71 1.07 (.15) SECTOR ROTATION FUND DECEMBER 31, 2004 10.08 (.05) 1.13 1.08 -- December 31, 2003 7.76 (.07) 2.39 2.32 -- December 31, 2002* 10.00 (.01) (2.23) (2.24) -- U.S. GOVERNMENT MONEY MARKET FUND DECEMBER 31, 2004 1.00 --ss.ss.ss. -- -- (--)ss.ss.ss. December 31, 2003 1.00 --ss.ss. -- -- (--)ss.ss. December 31, 2002 1.00 --ss. -- -- (--)ss. December 31, 2001 1.00 .03 -- .03 (.03) December 31, 2000 1.00 .05 -- .05 (.05) BANKING FUND DECEMBER 31, 2004 32.50 .35 4.38 4.73 (.11) December 31, 2003 24.95 .36 7.52 7.88 (.33) December 31, 2002 25.21 .28 (.47) (.19) (.07) December 31, 2001* 25.00 .45 (.24) .21 -- BASIC MATERIALS FUND DECEMBER 31, 2004 27.69 .09 5.58 5.67 (.01) December 31, 2003 21.07 .04 6.59 6.63 (.01) December 31, 2002 24.21 .09 (3.17) (3.08) (.06) December 31, 2001* 25.00 .22 (1.01) (.79) -- BIOTECHNOLOGY FUND DECEMBER 31, 2004 19.10 (.29) .50 .21 -- December 31, 2003 13.44 (.28) 5.94 5.66 -- December 31, 2002 24.67 (.28) (10.91) (11.19) -- December 31, 2001* 25.00 (.55) .22 (.33) -- CONSUMER PRODUCTS FUND DECEMBER 31, 2004 29.39 .11 3.78 3.89 (.01) December 31, 2003 24.36 .01 5.29 5.30 (.02) December 31, 2002 25.32 .04 (.95) (.91) (.01) December 31, 2001* 25.00 .05 .27 .32 -- DISTRIBUTIONS NET INCREASE NET ASSET FROM NET (DECREASE) IN VALUE, TOTAL REALIZED TOTAL NET ASSET END OF INVESTMENT CAPITAL GAINS DISTRIBUTIONS VALUE PERIOD RETURN - ------------------------------------------------------------------------------------------------------------ SMALL-CAP GROWTH FUND DECEMBER 31, 2004* $ (.40) $ (.40) $ 3.55 $ 28.55 15.82% MID-CAP GROWTH FUND DECEMBER 31, 2004* -- -- 2.13 27.13 8.52% LARGE-CAP GROWTH FUND DECEMBER 31, 2004* (.17) (.32) .75 25.75 4.26% SECTOR ROTATION FUND DECEMBER 31, 2004 -- -- 1.08 11.16 10.71% December 31, 2003 -- -- 2.32 10.08 29.97% December 31, 2002* -- -- (2.24) 7.76 (22.40)% U.S. GOVERNMENT MONEY MARKET FUND DECEMBER 31, 2004 -- (--)ss.ss.ss. -- 1.00 0.23% December 31, 2003 -- (--)ss.ss. -- 1.00 0.01% December 31, 2002 -- (--)ss. -- 1.00 0.47% December 31, 2001 -- (.03) -- 1.00 2.77% December 31, 2000 -- (.05) -- 1.00 5.20% BANKING FUND DECEMBER 31, 2004 (.83) (.94) 3.79 36.29 14.74% December 31, 2003 -- (.33) 7.55 32.50 31.74% December 31, 2002 -- (.07) (.26) 24.95 (0.78)% December 31, 2001* -- -- .21 25.21 0.84% BASIC MATERIALS FUND DECEMBER 31, 2004 (.69) (.70) 4.97 32.66 20.83% December 31, 2003 -- (.01) 6.62 27.69 31.46% December 31, 2002 -- (.06) (3.14) 21.07 (12.75)% December 31, 2001* -- -- (.79) 24.21 (3.16)% BIOTECHNOLOGY FUND DECEMBER 31, 2004 -- -- .21 19.31 1.10% December 31, 2003 -- -- 5.66 19.10 42.11% December 31, 2002 (.04) (.04) (11.23) 13.44 (45.35)% December 31, 2001* -- -- (.33) 24.67 (1.32)% CONSUMER PRODUCTS FUND DECEMBER 31, 2004 (.32) (.33) 3.56 32.95 13.30% December 31, 2003 (.25) (.27) 5.03 29.39 21.86% December 31, 2002 (.04) (.05) (.96) 24.36 (3.61)% December 31, 2001* -- -- .32 25.32 1.28% RATIOS TO AVERAGE NET ASSETS: -------------------------------- NET NET ASSETS, INVESTMENT PORTFOLIO END OF GROSS NET INCOME TURNOVER PERIOD (000's EXPENSES EXPENSES (LOSS) RATE*** OMITTED) - -------------------------------------------------------------------------------------------------- SMALL-CAP GROWTH FUND DECEMBER 31, 2004* 1.46%** 1.46%** (0.93)%** 733% $ 30,269 MID-CAP GROWTH FUND DECEMBER 31, 2004* 1.46%** 1.46%** (0.75)%** 875% 20,702 LARGE-CAP GROWTH FUND DECEMBER 31, 2004* 1.46%** 1.46%** 2.12%** 1,087% 20,012 SECTOR ROTATION FUND DECEMBER 31, 2004 1.63% 1.63% (0.52)% 333% 27,747 December 31, 2003 1.70% 1.70% (0.78)% 401% 20,594 December 31, 2002* 1.69%** 1.69%** (0.16)%** 357% 6,669 U.S. GOVERNMENT MONEY MARKET FUND DECEMBER 31, 2004 1.19% 1.10% 0.20% -- 167,678 December 31, 2003 1.22% 1.11% 0.01% -- 232,493 December 31, 2002 1.23% 1.23% 0.44% -- 258,953 December 31, 2001 1.19% 1.19% 2.48% -- 96,515 December 31, 2000 1.14% 1.14% 4.99% -- 39,492 BANKING FUND DECEMBER 31, 2004 1.59% 1.59% 1.02% 884% 21,920 December 31, 2003 1.65% 1.65% 1.24% 1,268% 17,115 December 31, 2002 1.67% 1.67% 1.10% 1,813% 5,008 December 31, 2001* 1.99%** 1.99%** 1.80%** 605% 630 BASIC MATERIALS FUND DECEMBER 31, 2004 1.59% 1.59% 0.30% 725% 46,162 December 31, 2003 1.67% 1.67% 0.17% 1,175% 44,561 December 31, 2002 1.75% 1.75% 0.38% 1,848% 901 December 31, 2001* 1.95%** 1.95%** 0.85%** 929% 929 BIOTECHNOLOGY FUND DECEMBER 31, 2004 1.59% 1.59% (1.51)% 1,169% 6,588 December 31, 2003 1.64% 1.64% (1.61)% 1,475% 12,557 December 31, 2002 1.79% 1.79% (1.76)% 3,483% 3,575 December 31, 2001* 2.27%** 2.27%** (2.24)%** 720% 1,959 CONSUMER PRODUCTS FUND DECEMBER 31, 2004 1.59% 1.59% 0.36% 730% 24,433 December 31, 2003 1.63% 1.63% 0.12% 936% 8,818 December 31, 2002 1.72% 1.72% 0.18% 985% 6,153 December 31, 2001* 2.07%** 2.07%** 0.19%** 285% 1,305
* SINCE THE COMMENCEMENT OF OPERATIONS: MAY 2, 2001--BANKING FUND, BASIC MATERIALS FUND AND BIOTECHNOLOGY FUND; MAY 29, 2001--CONSUMER PRODUCTS FUND; MAY 1, 2002--SECTOR ROTATION FUND; MAY 3, 2004--SMALL-CAP GROWTH FUND, MID-CAP GROWTH FUND AND LARGE-CAP GROWTH FUND. ** ANNUALIZED *** PORTFOLIO TURNOVER RATE IS CALCULATED WITHOUT REGARD TO SHORT-TERM SECURITIES HAVING A MATURITY OF LESS THAN ONE YEAR. + CALCULATED USING THE AVERAGE DAILY SHARES OUTSTANDING FOR THE YEAR. ss. LESS THAN $.01 PER SHARE. ACTUAL AMOUNT = $.00471. ss.ss. LESS THAN $.01 PER SHARE. ACTUAL AMOUNT = $.00011. ss.ss.ss. LESS THAN $.01 PER SHARE. ACTUAL AMOUNT = $.00199. See Notes to Financial Statements. 180 | THE RYDEX VARIABLE TRUST ANNUAL REPORT FINANCIAL HIGHLIGHTS (CONTINUED) - -------------------------------------------------------------------------------- This table is presented to show selected data for a share outstanding throughout each period, and to assist shareholders in evaluating a Fund's performance for the periods presented.
NET REALIZED NET INCREASE NET ASSET NET AND (DECREASE) DISTRIBUTIONS VALUE, INVESTMENT UNREALIZED IN NET ASSET FROM NET BEGINNING INCOME GAINS (LOSSES) VALUE RESULTING INVESTMENT OF PERIOD (LOSS)+ ON SECURITIES FROM OPERATIONS INCOME - ------------------------------------------------------------------------------------------------------ ELECTRONICS FUND DECEMBER 31, 2004 $16.88 $(.20) $(3.51) $(3.71) $ -- December 31, 2003 9.94 (.21) 7.15 6.94 -- December 31, 2002 20.64 (.24) (9.67) (9.91) -- December 31, 2001* 25.00 (.43) (3.93) (4.36) -- ENERGY FUND DECEMBER 31, 2004 22.45 .01 7.23 7.24 (--)ss. December 31, 2003 18.25 .01 4.19 4.20 -- December 31, 2002 21.10 (.02) (2.83) (2.85) -- December 31, 2001* 25.00 (.11) (3.79) (3.90) -- ENERGY SERVICES FUND DECEMBER 31, 2004 15.59 (.22) 5.48 5.26 -- December 31, 2003 14.38 (.16) 1.37 1.21 -- December 31, 2002 17.74 (.17) (2.08) (2.25) -- December 31, 2001* 25.00 (.24) (7.02) (7.26) -- FINANCIAL SERVICES FUND DECEMBER 31, 2004 26.00 .23 4.21 4.44 (.06) December 31, 2003 20.19 .14 5.70 5.84 (.03) December 31, 2002 23.90 .09 (3.69) (3.60) -- December 31, 2001* 25.00 (.02) (1.08) (1.10) -- HEALTH CARE FUND DECEMBER 31, 2004 24.28 (.16) 1.65 1.49 -- December 31, 2003 18.71 (.19) 5.76 5.57 -- December 31, 2002 23.82 (.09) (4.98) (5.07) -- December 31, 2001* 25.00 (.30) (.88) (1.18) -- INTERNET FUND DECEMBER 31, 2004 14.68 (.23) 2.56 2.33 -- December 31, 2003 8.93 (.20) 5.95 5.75 -- December 31, 2002 15.76 (.17) (6.66) (6.83) -- December 31, 2001* 25.00 (.37) (8.87) (9.24) -- LEISURE FUND DECEMBER 31, 2004 20.80 (.17) 5.07 4.90 -- December 31, 2003 15.42 (.08) 5.46 5.38 -- December 31, 2002 18.09 (.18) (2.49) (2.67) -- December 31, 2001* 25.00 (.30) (6.61) (6.91) -- DISTRIBUTIONS NET INCREASE NET ASSET FROM NET (DECREASE) IN VALUE, TOTAL REALIZED TOTAL NET ASSET END OF INVESTMENT CAPITAL GAINS DISTRIBUTIONS VALUE PERIOD RETURN - --------------------------------------------------------------------------------------------------- ELECTRONICS FUND DECEMBER 31, 2004 $ -- $ -- $(3.71) $13.17 (21.98)% December 31, 2003 -- -- 6.94 16.88 69.82% December 31, 2002 (.79) (.79) (10.70) 9.94 (48.21)% December 31, 2001* -- -- (4.36) 20.64 (17.44)% ENERGY FUND DECEMBER 31, 2004 (.01) (.01) 7.23 29.68 32.27% December 31, 2003 -- -- 4.20 22.45 23.01% December 31, 2002 -- -- (2.85) 18.25 (13.51)% December 31, 2001* -- -- (3.90) 21.10 (15.60)% ENERGY SERVICES FUND DECEMBER 31, 2004 -- -- 5.26 20.85 33.74% December 31, 2003 -- -- 1.21 15.59 8.41% December 31, 2002 (1.11) (1.11) (3.36) 14.38 (12.07)% December 31, 2001* -- -- (7.26) 17.74 (29.04)% FINANCIAL SERVICES FUND DECEMBER 31, 2004 -- (.06) 4.38 30.38 17.12% December 31, 2003 -- (.03) 5.81 26.00 28.92% December 31, 2002 (.11) (.11) (3.71) 20.19 (15.10)% December 31, 2001* -- -- (1.10) 23.90 (4.40)% HEALTH CARE FUND DECEMBER 31, 2004 (.31) (.31) 1.18 25.46 6.22% December 31, 2003 -- -- 5.57 24.28 29.77% December 31, 2002 (.04) (.04) (5.11) 18.71 (21.31)% December 31, 2001* -- -- (1.18) 23.82 (4.72)% INTERNET FUND DECEMBER 31, 2004 -- -- 2.33 17.01 15.87% December 31, 2003 -- -- 5.75 14.68 64.39% December 31, 2002 -- -- (6.83) 8.93 43.34)% December 31, 2001* -- -- (9.24) 15.76 (36.96)% LEISURE FUND DECEMBER 31, 2004 (.31) (.31) 4.59 25.39 23.86% December 31, 2003 -- -- 5.38 20.80 34.89% December 31, 2002 -- -- (2.67) 15.42 (14.76)% December 31, 2001* -- -- (6.91) 18.09 (27.64)% RATIOS TO AVERAGE NET ASSETS: --------------------- NET NET ASSETS, INVESTMENT PORTFOLIO END OF TOTAL INCOME TURNOVER PERIOD (000'S EXPENSES (LOSS) RATE*** OMITTED) - ------------------------------------------------------------------------------ ELECTRONICS FUND DECEMBER 31, 2004 1.59% (1.34)% 1,325% $12,289 December 31, 2003 1.65% (1.51)% 1,264% 27,918 December 31, 2002 1.84% (1.63)% 2,685% 4,384 December 31, 2001* 2.36%** (2.13)%** 466% 1,423 ENERGY FUND DECEMBER 31, 2004 1.58% 0.04% 542% 60,501 December 31, 2003 1.66% 0.04% 1,225% 31,832 December 31, 2002 1.72% (0.13)% 1,341% 5,834 December 31, 2001* 2.05%** (0.50)%** 478% 2,177 ENERGY SERVICES FUND DECEMBER 31, 2004 1.58% (1.19)% 808% 29,316 December 31, 2003 1.65% (1.13)% 2,691% 7,754 December 31, 2002 1.71% (1.00)% 2,159% 4,427 December 31, 2001* 2.06%** (1.26)%** 3,182% 1,551 FINANCIAL SERVICES FUND DECEMBER 31, 2004 1.59% 0.84% 762% 45,180 December 31, 2003 1.64% 0.61% 2,039% 15,581 December 31, 2002 1.85% 0.41% 1,727% 2,748 December 31, 2001* 2.19%** (0.11)%** 315% 2,607 HEALTH CARE FUND DECEMBER 31, 2004 1.59% (0.67)% 629% 30,435 December 31, 2003 1.64% (0.88)% 1,222% 27,880 December 31, 2002 1.70% (0.45)% 1,617% 5,164 December 31, 2001* 2.23%** (1.33)%** 757% 951 INTERNET FUND DECEMBER 31, 2004 1.58% (1.49)% 693% 36,922 December 31, 2003 1.65% (1.59)% 957% 25,101 December 31, 2002 1.75% (1.69)% 3,041% 3,703 December 31, 2001* 2.33%** (2.29)%** 2,341% 891 LEISURE FUND DECEMBER 31, 2004 1.58% (0.74)% 663% 51,755 December 31, 2003 1.65% (0.41)% 1,353% 30,016 December 31, 2002 1.74% (0.98)% 1,976% 2,015 December 31, 2001* 1.98%** (1.49)%** 269% 804
* SINCE THE COMMENCEMENT OF OPERATIONS: MAY 2, 2001--ENERGY SERVICES FUND; MAY 22, 2001--LEISURE FUND; MAY 24, 2001--INTERNET FUND; MAY 29, 2001--ENERGY FUND; JUNE 19, 2001--HEALTH CARE FUND; JULY 20, 2001--FINANCIAL SERVICES FUND; AUGUST 3, 2001--ELECTRONICS FUND. ** ANNUALIZED *** PORTFOLIO TURNOVER RATE IS CALCULATED WITHOUT REGARD TO SHORT-TERM SECURITIES HAVING A MATURITY OF LESS THAN ONE YEAR. + CALCULATED USING THE AVERAGE DAILY SHARES OUTSTANDING FOR THE YEAR. ss. LESS THAN $.01 PER SHARE. ACTUAL AMOUNT = $.00170. THE RYDEX VARIABLE TRUST ANNUAL REPORT | 181 FINANCIAL HIGHLIGHTS (CONCLUDED) - -------------------------------------------------------------------------------- This table is presented to show selected data for a share outstanding throughout each period, and to assist shareholders in evaluating a Fund's performance for the periods presented.
NET REALIZED NET INCREASE NET ASSET NET AND (DECREASE) DISTRIBUTIONS VALUE, INVESTMENT UNREALIZED IN NET ASSET FROM NET BEGINNING INCOME GAINS (LOSSES) VALUE RESULTING INVESTMENT OF PERIOD (LOSS)+ ON SECURITIES FROM OPERATIONS INCOME - ---------------------------------------------------------------------------------------------------- PRECIOUS METALS FUND DECEMBER 31, 2004 $9.99 $ (.05) $(1.37) $(1.42) $ -- December 31, 2003 7.09 (.03) 2.93 2.90 -- December 31, 2002 4.87 (.02) 2.24 2.22 -- December 31, 2001 4.31 (.04) .60 .56 -- December 31, 2000 5.43 (.07) (1.05) (1.12) -- REAL ESTATE FUND DECEMBER 31, 2004 30.25 1.02 7.79 8.81 (.14) December 31, 2003 24.96 .94 6.62 7.56 (.85) December 31, 2002 25.77 1.97 (2.26) (.29) (.48) December 31, 2001* 25.00 1.44 (.42) 1.02 (.25) RETAILING FUND DECEMBER 31, 2004 25.99 (.22) 2.62 2.40 -- December 31, 2003 19.29 (.25) 7.05 6.80 -- December 31, 2002 25.65 (.27) (5.30) (5.57) -- December 31, 2001* 25.00 (.38) 1.03 .65 -- TECHNOLOGY FUND DECEMBER 31, 2004 14.88 (.05) .03 (.02) -- December 31, 2003 9.92 (.18) 6.21 6.03 -- December 31, 2002 18.61 (.18) (7.15) (7.33) -- December 31, 2001* 25.00 (.39) (6.00) (6.39) -- TELECOMMUNICATIONS FUND DECEMBER 31, 2004 18.22 (.02) 2.33 2.31 -- December 31, 2003 13.63 (.03) 4.62 4.59 -- December 31, 2002 22.56 (.05) (8.88) (8.93) -- December 31, 2001* 25.00 (.36) (2.08) (2.44) -- TRANSPORTATION FUND DECEMBER 31, 2004 25.97 (.20) 6.09 5.89 -- December 31, 2003 21.55 (.15) 4.57 4.42 -- December 31, 2002 24.40 (.14) (2.71) (2.85) -- December 31, 2001* 25.00 (.20) (.40) (.60) -- UTILITIES FUND DECEMBER 31, 2004 14.96 .33 2.24 2.57 (.19) December 31, 2003 12.24 .31 2.77 3.08 (.36) December 31, 2002 18.23 .33 (6.31) (5.98) (.01) December 31, 2001* 25.00 .33 (7.10) (6.77) -- DISTRIBUTIONS NET INCREASE NET ASSET FROM NET (DECREASE) IN VALUE, TOTAL REALIZED TOTAL NET ASSET END OF INVESTMENT CAPITAL GAINS DISTRIBUTIONS VALUE PERIOD RETURN - ------------------------------------------------------------------------------------------------- PRECIOUS METALS FUND DECEMBER 31, 2004 $ -- $ -- $(1.42) $ 8.57 (14.21)% December 31, 2003 -- -- 2.90 9.99 40.90% December 31, 2002 -- -- 2.22 7.09 45.59% December 31, 2001 -- -- .56 4.87 12.99% December 31, 2000 -- -- (1.12) 4.31 (20.63)% REAL ESTATE FUND DECEMBER 31, 2004 (.90) (1.04) 7.77 38.02 29.54% December 31, 2003 (1.42) (2.27) 5.29 30.25 30.31% December 31, 2002 (.04) (.52) (.81) 24.96 (1.12)% December 31, 2001* -- (.25) .77 25.77 4.09% RETAILING FUND DECEMBER 31, 2004 (1.74) (1.74) .66 26.65 10.06% December 31, 2003 (.10) (.10) 6.70 25.99 35.27% December 31, 2002 (.79) (.79) (6.36) 19.29 (21.91)% December 31, 2001* -- -- .65 25.65 2.60% TECHNOLOGY FUND DECEMBER 31, 2004 (1.36) (1.36) (1.38) 13.50 1.15% December 31, 2003 (1.07) (1.07) 4.96 14.88 61.32% December 31, 2002 (1.36) (1.36) (8.69) 9.92 (39.11)% December 31, 2001* -- -- (6.39) 18.61 (25.56)% TELECOMMUNICATIONS FUND DECEMBER 31, 2004 -- -- 2.31 20.53 12.68% December 31, 2003 (--)ss. (--)ss. 4.59 18.22 33.68% December 31, 2002 -- -- (8.93) 13.63 (39.58)% December 31, 2001* -- -- (2.44) 22.56 (9.76)% TRANSPORTATION FUND DECEMBER 31, 2004 (.41) (.41) 5.48 31.45 22.99% December 31, 2003 -- -- 4.42 25.97 20.51% December 31, 2002 -- -- (2.85) 21.55 (11.68)% December 31, 2001* -- -- (.60) 24.40 (2.40)% UTILITIES FUND DECEMBER 31, 2004 -- (.19) 2.38 17.34 17.31% December 31, 2003 -- (.36) 2.72 14.96 25.40% December 31, 2002 -- (.01) (5.99) 12.24 (32.83)% December 31, 2001* -- -- (6.77) 18.23 (27.08)% RATIOS TO AVERAGE NET ASSETS: --------------------- NET NET ASSETS, INVESTMENT PORTFOLIO END OF TOTAL INCOME TURNOVER PERIOD (000'S EXPENSES (LOSS) RATE*** OMITTED) - ---------------------------------------------------------------------------- PRECIOUS METALS FUND DECEMBER 31, 2004 1.46% (0.54)% 519% $ 35,043 December 31, 2003 1.54% (0.38)% 658% 44,606 December 31, 2002 1.67% (0.29)% 1,001% 38,839 December 31, 2001 2.18% (0.79)% 957% 875 December 31, 2000 2.04% (1.45)% 965% 3,400 REAL ESTATE FUND DECEMBER 31, 2004 1.59% 3.06% 1,139% 26,915 December 31, 2003 1.64% 3.26% 1,478% 12,183 December 31, 2002 1.68% 7.60% 1,927% 1,902 December 31, 2001* 2.31%** 5.75%** 17% 162 RETAILING FUND DECEMBER 31, 2004 1.58% (0.83)% 609% 20,800 December 31, 2003 1.64% (1.04)% 785% 15,149 December 31, 2002 1.81% (1.23)% 1,668% 3,102 December 31, 2001* 2.24%** (1.65)%** 740% 1,994 TECHNOLOGY FUND DECEMBER 31, 2004 1.58% (0.36)% 767% 19,919 December 31, 2003 1.64% (1.39)% 1,302% 20,641 December 31, 2002 1.71% (1.52)% 1,098% 5,021 December 31, 2001* 2.34%** (2.08)%** 490% 1,216 TELECOMMUNICATIONS FUND DECEMBER 31, 2004 1.58% (0.08)% 809% 30,191 December 31, 2003 1.64% (0.19)% 974% 14,543 December 31, 2002 1.69% (0.39)% 855% 6,106 December 31, 2001* 2.25%** (1.61)%** 1,316% 407 TRANSPORTATION FUND DECEMBER 31, 2004 1.57% (0.71)% 473% 47,333 December 31, 2003 1.64% (0.65)% 1,045% 8,032 December 31, 2002 1.69% (0.63)% 1,435% 6,301 December 31, 2001* 2.16%** (0.89)%** 609% 522 UTILITIES FUND DECEMBER 31, 2004 1.57% 2.06% 904% 21,902 December 31, 2003 1.62% 2.29% 1,491% 13,430 December 31, 2002 1.67% 2.54% 829% 23,846 December 31, 2001* 2.08%** 1.59%** 1,040% 908
* SINCE THE COMMENCEMENT OF OPERATIONS: MAY 2, 2001--TECHNOLOGY FUND AND UTILITIES FUND; JUNE 11, 2001--TRANSPORTATION FUND; JULY 23, 2001--RETAILING FUND; JULY 27, 2001--TELECOMMUNICATIONS FUND; OCTOBER 1, 2001--REAL ESTATE FUND. ** ANNUALIZED *** PORTFOLIO TURNOVER RATE IS CALCULATED WITHOUT REGARD TO SHORT-TERM SECURITIES HAVING A MATURITY OF LESS THAN ONE YEAR. + CALCULATED USING THE AVERAGE DAILY SHARES OUTSTANDING FOR THE YEAR. ss. LESS THAN $.01 PER SHARE. ACTUAL AMOUNT = $.00019538. See Notes to Financial Statements. 182 | THE RYDEX VARIABLE TRUST ANNUAL REPORT NOTES TO FINANCIAL STATEMENTS - -------------------------------------------------------------------------------- 1. SIGNIFICANT ACCOUNTING POLICIES The Rydex Variable Trust (the "Trust") is registered with the Securities and Exchange Commission under the Investment Company Act of 1940 as a non-diversified, open-ended investment company and is authorized to issue an unlimited number of no par value shares. As of December 31, 2004, the Trust consisted of forty-four operating Funds: twenty-two Benchmark funds, one Strategic fund, one Money Market fund, eighteen Sector funds, and two CLS AdvisorOne Funds. This report covers the Benchmark, Strategic, Money Market, and Sector Funds (the "Funds"), while the CLS AdvisorOne Funds are contained in a separate report. Rydex Global Advisors (the "Advisor") serves as investment advisor to the Funds. Rydex Distributors, Inc. acts as principal underwriter for the Trust. The Trust was organized on June 11, 1998 as a Delaware business trust. Effective November 2, 1998, the fund assets and liabilities of the Rydex Advisor Variable Annuity Account (the "Separate Account"), a segregated investment account of Conseco Variable Insurance Company (formerly Great American Reserve Insurance Company), were transferred to the Trust in exchange for shares of the Funds of the Trust (the "Separate Account Restructuring"). Shares of the Funds (full and fractional) were issued to corresponding subaccounts of the Separate Account. The value per share of each Fund was equivalent in value to the value of outstanding accumulation units of the corresponding subaccount. The Trust offers shares of the Funds to insurance companies for their variable annuity and variable life insurance contracts. The following significant accounting policies are in conformity with accounting principles generally accepted in the United States of America and are consistently followed by the Trust. A. Equity securities listed on an exchange (New York Stock Exchange ("NYSE") or American Stock Exchange) are valued at the last quoted sales price as of close of business on the "NYSE", usually 4:00 p.m., Eastern Time, on the valuation date. Equity securities listed on the Nasdaq market system are valued at the Nasdaq Official Closing Price, usually as of 4:00 p.m., Eastern Time, on the valuation date. 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. Financial futures contracts are valued at the last quoted sales price, usually as of 4:00 p.m., Eastern Time, on the valuation date. The value of domestic equity index swap agreements entered into by the Funds is accounted for using the unrealized gain or loss on the agreements that is determined by marking the agreements to the last quoted value of the index that the swap pertains to at the close of the NYSE, usually 4:00 p.m., Eastern Time. The swap's market value is then adjusted to include dividends accrued, financing charges and/or interest associated with the swap agreements. The value of foreign equity index swap agreements entered into by the Funds is accounted for using the unrealized gain or loss on the agreements that is determined by marking the agreements to the average price at which orders are being filled (the "average fill price"), which includes the gain/loss on foreign futures, at the close of the NYSE, usually 4:00 p.m., Eastern Time. The swap's market value is then adjusted to include dividends accrued, financing charges and/or interest associated with the swap agreements. Short-term securities, if any, are valued at amortized cost, which approximates market value. Securities and assets, including index options, 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. These methods include, but are not limited to: (i) general information as to how these securities and assets trade; (ii) in connection with futures contracts and options thereupon, and other derivative investments, information as to how (a) these contracts and other derivative investments trade in the futures or other derivative markets, respectively, and (b) the securities underlying these contracts and other derivative investments trade in the cash market; and (iii) other information and considerations, including current values in related-markets. B. Securities transactions are recorded on the trade date for financial reporting purposes. Realized gains and losses from securities transactions are recorded using the identified cost basis. Dividend income is recorded on the ex-dividend date, net of applicable taxes withheld by foreign countries. Interest income, including amortization of premiums and accretion of discount, is accrued on a daily basis. C. Distributions to shareholders are recorded on the ex-dividend date. Distributions from net investment income and net realized capital gains are determined in accordance with income tax regulations which may differ from accounting principles generally accepted in the United States of America. These differences are primarily due to differing treatments for items such as deferral of wash sales and post-October losses and regulated futures contracts and options. Net investment income and loss, net realized gains and losses, and net assets were not affected by these differences. D. When a Fund engages in a short sale, an amount equal to the proceeds 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 Fund maintains a segregated account of securities as collateral for short sales. The Fund is exposed to market risk based on the amount, if any, that the market value of the security exceeds the market value of the securities in the segregated account. Dividend and interest expenses and fees paid to brokers to borrow securities in connection with short sales are considered part of the cost of short sale transactions. THE RYDEX VARIABLE TRUST ANNUAL REPORT | 183 NOTES TO FINANCIAL STATEMENTS (CONTINUED) - -------------------------------------------------------------------------------- E. Upon the purchase of an option by a Fund, the premium paid is recorded as an investment, the value of which is marked-to-market daily. When a purchased option expires, the Fund will realize a loss in the amount of the cost of the option. When a Fund enters into a closing sale transaction, the Fund will realize a gain or loss depending on whether the proceeds from the closing sale transaction are greater or less than the cost of the option. When a Fund exercises a put option, it will realize a gain or loss from the sale of the underlying security and the proceeds from such sale will be decreased by the premium originally paid. When a Fund exercises a call option, the cost of the security that the Fund purchases upon exercise will be increased by the premium originally paid. When a Fund 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 a written option expires, or if the Fund enters into a closing purchase transaction, the Fund 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 and bond 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 Fund deposits and maintains as collateral such initial margin as required by the exchange on which the transaction is effected. Pursuant to the contract, the Fund 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 Fund as unrealized gains or losses. When a contract is closed, the Fund 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. The Trust may enter into equity index swap agreements, which are over-the-counter contracts in which one party agrees to make periodic payments based on the change in market value of a specified equity security, basket of equity securities, or equity index in return for periodic payments based on a fixed or variable interest rate or the change in market value of a different equity security, basket of equity securities, or equity index. Swap agreements are used to obtain exposure to an equity or market without owning or taking physical custody of securities. H. Investment securities and other assets and liabilities denominated in foreign currencies are translated into U.S. dollar amounts at the date of valuation. Purchases and sales of investment securities and income and expense items denominated in foreign currencies are translated into U.S. dollar amounts on the respective dates of such transactions. The Trust does not isolate that portion of the results of operations resulting from changes in foreign exchange rates on investments from the fluctuations arising from changes in market prices of securities held. Such fluctuations are included with the net realized and unrealized gain and loss from investments. Reported net realized foreign exchange gains or losses arise from sales of foreign currencies and currency gains or losses realized between the trade and settlement dates on investment transactions. Net unrealized exchange gains and losses arise from changes in the fair values of assets and liabilities other than investments in securities at the fiscal period end, resulting from changes in exchange rates. I. The Trust may enter into forward currency contracts primarily to hedge against foreign currency exchange rate risks on its non-U.S. dollar denominated investment securities. When entering into a forward currency contract, the fund agrees to receive or deliver a fixed quantity of foreign currency for an agreed-upon price on an agreed future date. These contracts are valued daily and the corresponding unrealized gain or loss on the contracts, as measured by the difference between the forward foreign exchange rates at the dates of entry into the contracts and the forward rates at the reporting date, is included in the statement of assets and liabilities. Realized and unrealized gains and losses are included in the statement of operations. J. The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America 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 these estimates. 2. FINANCIAL INSTRUMENTS As part of its investment strategy, the Trust may utilize a variety of derivative instruments, including options, futures, and swap agreements. These investments involve, to varying degrees, elements of market risk and risks in excess of the amounts recognized in the Statements of Assets and Liabilities. The risk associated with purchasing options is limited to the premium originally paid. Options written by a fund involve, to varying degrees, risk of loss in excess of the option value reflected in the Statements of Assets and Liabilities. The risk in writing a covered call option is that a fund may forego the opportunity for profit if the market price of the underlying security increases and the option is exercised. The risk in writing a covered put option is that a fund may incur a loss if the market price of the underlying security decreases and the option is exercised. In addition, there is the risk that a fund may not be able to enter into a closing transaction because of an illiquid secondary market or, for over-the-counter options, because of the counterparty's inability to perform. The Trust has established strict counterparty credit guidelines and enters into transactions only with financial institutions of investment grade or better. 184 | THE RYDEX VARIABLE TRUST ANNUAL REPORT NOTES TO FINANCIAL STATEMENTS (CONTINUED) - -------------------------------------------------------------------------------- There are several risks in connection with the use of futures contracts. Futures contracts involve, to varying degrees, risk of loss in excess of amounts reflected in the financial statements. Risks may be caused by an imperfect correlation between movements in the price of the instruments and the price of the underlying securities. In addition, there is the risk that a fund may not be able to enter into a closing transaction because of an illiquid secondary market. The use of equity swaps involves risks that are different from those associated with ordinary portfolio securities transactions. Swap agreements may be considered to be illiquid. Although a fund will not enter into any swap agreement unless the Advisor believes that the other party to the transaction is creditworthy, a fund does bear the risk of loss of the amount expected to be received under a swap agreement in the event of the default or bankruptcy of the agreement counterparty. The Trust has established strict counterparty credit guidelines and enters into transactions only with financial institutions of investment grade or better. In conjunction with the use of options, futures, options on futures and swap agreements, as well as short sales of securities, the Funds are required to maintain collateral in various forms. The Funds use, where appropriate, depending on the financial instrument utilized and the broker involved, margin deposits at the broker, cash segregated at the custodian bank, discount notes, or the repurchase agreements allocated to each Fund. Short sales are transactions in which the Fund sells a security it does not own. If the security the Fund sold short goes down in price between the time the Fund sells the security and closes its short position, the Fund will realize a gain on the transaction. Conversely, if the security goes up in price during the period, the Fund will realize a loss on the transaction. The risk of such price increases is the principal risk of engaging in short sales. The risks inherent in the use of options, futures contracts, options on futures contracts, and swap agreements include 1) adverse changes in the value of such instruments; 2) imperfect correlation between the price of the instruments and movements in the price of the underlying securities, indices, or futures contracts; 3) the possible absence of a liquid secondary market for any particular instrument at any time; and 4) the potential of counterparty default. 3. FEES AND OTHER TRANSACTIONS WITH AFFILIATES Under the terms of an investment advisory contract, the Trust pays the Advisor, an affiliated entity, investment advisory fees calculated at an annualized rate of 0.50% of the average daily net assets of the U.S. Government Bond Fund and the U.S. Government Money Market Fund; 0.75% of the average daily net assets of the Nova Fund, the OTC Fund, the Small-Cap Value Fund, the Mid-Cap Value Fund, the Large-Cap Value Fund, the Small-Cap Growth Fund, the Mid-Cap Growth Fund, the Large-Cap Growth Fund, and the Precious Metals Fund; 0.85% of the average daily net assets of the Banking Fund, the Basic Materials Fund, the Biotechnology Fund, the Consumer Products Fund, the Electronics Fund, the Energy Fund, the Energy Services Fund, the Financial Services Fund, the Health Care Fund, the Internet Fund, the Leisure Fund, the Real Estate Fund, the Retailing Fund, the Technology Fund, the Telecommunications Fund, the Transportation Fund, and the Utilities Fund; and 0.90% of the average daily net assets of the Ursa Fund, the Arktos Fund, the Titan 500 Fund, the Velocity 100 Fund, the Medius Fund, the Inverse Mid-Cap Fund, the Mekros Fund, the Inverse Small-Cap Fund, the Juno Fund, the Large-Cap Europe Fund, the Large-Cap Japan Fund, the Long Dynamic Dow 30 Fund, the Inverse Dynamic Dow 30 Fund, and the Sector Rotation Fund. Certain officers and trustees of the Trust are also officers of the Advisor. Rydex Fund Services, Inc. (the "Servicer"), an affiliated entity, provides transfer agent and administrative services to the Trust calculated at an annual percentage rate of 0.20% of the average daily net assets of the U.S. Government Bond Fund and the U.S. Government Money Market Fund; and 0.25% of the average daily net assets of the Nova Fund, the Ursa Fund, the OTC Fund, the Arktos Fund, the Titan 500 Fund, the Velocity 100 Fund, the Medius Fund, the Inverse Mid-Cap Fund, the Mekros Fund, the Inverse Small-Cap Fund, the Juno Fund, the Large-Cap Europe Fund, the Large-Cap Japan Fund, the Long Dynamic Dow 30 Fund, the Inverse Dynamic Dow 30 Fund, the Small-Cap Value Fund, the Mid-Cap Value Fund, the Large-Cap Value Fund, the Small-Cap Growth Fund, the Mid-Cap Growth Fund, the Large-Cap Growth Fund, the Sector Rotation Fund, the Banking Fund, the Basic Materials Fund, the Biotechnology Fund, the Consumer Products Fund, the Electronics Fund, the Energy Fund, the Energy Services Fund, the Financial Services, the Health Care Fund, the Internet Fund, the Leisure Fund, the Precious Metals Fund, the Real Estate Fund, the Retailing Fund, the Technology Fund, the Telecommunications Fund, the Transportation Fund, and the Utilities Fund. The Servicer also provides accounting services to the Trust calculated at an annualized rate of 0.10% on the first $250 million of the average daily net assets, 0.075% on the next $250 million of the average daily net assets, 0.05% on the next $250 million of the average daily net assets, and 0.03% on the average daily net assets over $750 million of each of the funds. Certain officers and trustees of the trust are also officers of the Servicer. THE RYDEX VARIABLE TRUST ANNUAL REPORT | 185 NOTES TO FINANCIAL STATEMENTS (CONTINUED) - -------------------------------------------------------------------------------- The Servicer also provides other necessary services to the Trust, such as accounting and auditing services, legal services, printing and mailing, etc., on a pass-through basis. Such expenses vary from Fund to Fund and are allocated to the Funds based on relative net assets. The Trust has adopted an Investor Services Plan for which Rydex Distributors, Inc. (the "Distributor"), an affiliated entity, and other firms that provide shareholder services ("Service Providers") may receive compensation. The Trust will pay fees to the Distributor at an annual rate not to exceed 0.25% of average daily net assets. The Distributor, in turn, will compensate Service Providers for providing such services, while retaining a portion of such payments to compensate it for shareholder services it performs. For the period ending December 31, 2004, Rydex Distributors, Inc. voluntarily waived service fees in the amount of $286,105 in the U.S. Government Money Market Fund. 4. FEDERAL INCOME TAX INFORMATION The Funds 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. Income and capital gain distributions are determined in accordance with federal income tax regulations, which may differ from accounting principles generally accepted in the United States. These differences are primarily due to differing treatments for futures and options transactions, foreign currency transactions, losses deferred due to wash sales, losses deferred due to post-October losses, and excise tax regulations. Permanent book and tax basis differences, if any, relating to shareholder distributions will result in reclassifications to paid-in capital. This includes net operating losses not utilized during the current year, distribution reclassification, and return of capital differences in the treatment of certain notional principal contracts. These reclassifications have no effect on net assets or net asset values per share. Any taxable gain remaining at fiscal year end is distributed in the following year. The Funds' tax basis capital gains and losses are determined only at the end of each fiscal year. Tax basis capital losses in excess of capital gains are carried forward to offset future net capital gains. For the year ended December 31, 2004, the following Funds offset net realized capital gains with capital losses from previous years: FUND AMOUNT - ------ ---------- Nova Fund $8,357,670 Large-Cap Japan Fund 45,228 Sector Rotation Fund 422,580 Energy Services Fund 743,247 Financial Services Fund 1,188,026 Internet Fund 128,371 Telecommunications Fund 71,603 Utilities Fund 1,108,242 186 | THE RYDEX VARIABLE TRUST ANNUAL REPORT NOTES TO FINANCIAL STATEMENTS (CONTINUED) - -------------------------------------------------------------------------------- The tax character of distributions paid during 2004 was as follows:
ORDINARY LONG-TERM RETURN TOTAL FUND INCOME CAPITAL GAIN OF CAPITAL DISTRIBUTIONS - --------------------------------- ------------ ------------- ----------- --------------- Nova Fund $ 40,441 $ -- $ -- $ 40,441 Ursa Fund -- -- -- -- OTC Fund -- -- -- -- Arktos Fund -- -- -- -- Titan 500 Fund 2,253,612 989,294 -- 3,242,906 Velocity 100 Fund 771,099 579,649 411,759 1,762,507 Medius Fund 1,589,650 409,464 -- 1,999,114 Inverse Mid-Cap Fund -- -- -- -- Mekros Fund 1,944,101 789,421 -- 2,733,522 Inverse Small-Cap Fund -- -- -- -- U.S. Government Bond Fund 3,573,944 503,055 -- 4,076,999 Juno Fund 133,449 360,161 -- 493,610 Large-Cap Europe Fund 6,201,653 103,778 -- 6,305,431 Large-Cap Japan Fund -- -- -- -- Long Dynamic Dow 30 Fund 473,263 -- -- 473,263 Inverse Dynamic Dow 30 Fund -- 75,845 -- 75,845 Small-Cap Value Fund 1,342,874 835 -- 1,343,709 Mid-Cap Value Fund 1,017,073 14,140 -- 1,031,213 Large-Cap Value Fund 165,471 758 -- 166,229 Small-Cap Growth Fund 388,437 -- -- 388,437 Mid-Cap Growth Fund -- -- -- -- Large-Cap Growth Fund 232,823 -- -- 232,823 Sector Rotation Fund -- -- -- -- U.S. Government Money Market Fund 599,121 -- -- 599,121 Banking Fund 762,000 1,558 -- 763,558 Basic Materials Fund 912,124 -- -- 912,124 Biotechnology Fund -- -- -- -- Consumer Products Fund 375,373 -- -- 375,373 Electronics Fund -- -- -- -- Energy Fund 22,679 -- -- 22,679 Energy Services Fund -- -- -- -- Financial Services Fund 56,477 -- -- 56,477 Health Care Fund 272,867 7,789 -- 280,656 Internet Fund -- -- -- -- Leisure Fund 176,049 -- -- 176,049 Precious Metals Fund -- -- -- -- Real Estate Fund 469,611 29,677 -- 499,288 Retailing Fund 859,770 5,766 -- 865,536 Technology Fund 1,130,753 -- -- 1,130,753 Telecommunications Fund -- -- -- -- Transportation Fund 315,578 -- -- 315,578 Utilities Fund 265,543 -- -- 265,543
THE RYDEX VARIABLE TRUST ANNUAL REPORT | 187 NOTES TO FINANCIAL STATEMENTS (CONTINUED) - -------------------------------------------------------------------------------- The tax character of distributions paid during 2003 was as follows:
ORDINARY LONG-TERM TOTAL FUND INCOME CAPITAL GAIN DISTRIBUTIONS - --------------------------------- ------------ ------------ ------------- Nova Fund $ -- $ -- $ -- Ursa Fund -- -- -- OTC Fund -- -- -- Arktos Fund 463,435 -- 463,435 Titan 500 Fund 1,364,324 2,507,680 3,872,004 Velocity 100 Fund 3,604,922 -- 3,604,922 Medius Fund 741,236 894,322 1,635,558 Mekros Fund 11,106,539 2,713,642 13,820,181 U.S. Government Bond Fund 2,371,394 433,636 2,805,030 Juno Fund -- -- -- Large-Cap Europe Fund 6,433,360 -- 6,433,360 Large-Cap Japan Fund -- -- -- Sector Rotation Fund -- -- -- U.S. Government Money Market Fund 31,663 -- 31,663 Banking Fund 48,501 -- 48,501 Basic Materials Fund 8,471 -- 8,471 Biotechnology Fund -- -- -- Consumer Products Fund 85,897 949 86,846 Electronics Fund -- -- -- Energy Fund -- -- -- Energy Services Fund -- -- -- Financial Services Fund 17,051 -- 17,051 Health Care Fund -- -- -- Internet Fund -- -- -- Leisure Fund -- -- -- Precious Metals Fund -- -- -- Real Estate Fund 797,747 58,120 855,867 Retailing Fund 63,856 636 64,492 Technology Fund 1,373,910 -- 1,373,910 Telecommunications Fund 77 -- 77 Transportation Fund -- -- -- Utilities Fund 176,841 -- 176,841
188 | THE RYDEX VARIABLE TRUST ANNUAL REPORT NOTES TO FINANCIAL STATEMENTS (CONTINUED) - -------------------------------------------------------------------------------- The tax character of distributable earnings/(accumulated losses) at December 31, 2004 was as follows:
UNDISTRIBUTED UNDISTRIBUTED NET UNREALIZED ORDINARY REALIZED APPRECIATION/ CAPITAL LOSS FUND INCOME GAIN (DEPRECIATION) CARRYFORWARD - --------------------------------- ------------- ------------- -------------- ------------- Nova Fund $ 362,006 $ -- $ 4,241,004 $ 106,230,093(4) Ursa Fund -- -- (174,504) 25,550,830(4) OTC Fund -- -- (240,335) 369,634,679(4) Arktos Fund -- -- 23,245 8,348,709(4) Titan 500 Fund 1,127,573 1,043,681 (95,300) -- Velocity 100 Fund -- -- 1,716,746 -- Medius Fund -- 113,493 2,336,801 -- Inverse Mid-Cap Fund -- -- (15,129) 392,757(1) Mekros Fund 1,372,293 -- 4,749,787 2,170,380(1) Inverse Small-Cap Fund -- -- (89,390) 2,561,018(1) U.S. Government Bond Fund 2,400 702 (1,915,564) 2,822,543(1) Juno Fund -- -- (1,030,808) 5,005,075(1) Large-Cap Europe Fund 210,675 -- 969,018* -- Large-Cap Japan Fund -- -- 568,497* -- Long Dynamic Dow 30 Fund 361,989 227,465 160,669 -- Inverse Dynamic Dow 30 Fund -- -- (261,879)* -- Small-Cap Value Fund 1,196,199 1,809 2,431,827 -- Mid-Cap Value Fund 135,888 270 383,562 -- Large-Cap Value Fund 243,909 -- 743,036 -- Small-Cap Growth Fund 875,160 2,678 1,430,208 -- Mid-Cap Growth Fund -- -- 541,947 512,691(1) Large-Cap Growth Fund 29,081 15 452,111 -- Sector Rotation Fund -- -- 3,811,115 797,106(3) U.S. Government Money Market Fund 7,493 -- -- 1,546(4) Banking Fund 2,276,609 73,581 695,152 -- Basic Materials Fund 4,000,873 66,436 4,452,138 -- Biotechnology Fund -- -- (1,645,518) 2,489,465(4) Consumer Products Fund 357,566 336,698 119,380 -- Electronics Fund -- -- (1,890,696) 873,383(4) Energy Fund 4,642,281 151,918 8,007,013 -- Energy Services Fund -- -- 2,025,758 11,891(2) Financial Services Fund 1,758,219 304,631 1,505,301 -- Health Care Fund -- -- 91,512 1,305,802(1) Internet Fund 479,497 106,533 3,105,101 -- Leisure Fund 1,799,873 302,370 4,218,059 -- Precious Metals Fund -- -- (1,586,607) 2,397,512(4) Real Estate Fund 486,247 -- 3,350,924 627,076(1) Retailing Fund 35,989 337,404 1,823,741 -- Technology Fund -- -- 305,352 1,006,137(1) Telecommunications Fund 1,299,417 260,890 1,883,126 -- Transportation Fund 645,383 -- 6,125,610 -- Utilities Fund 313,329 -- 1,429,007 429,454(2)
(1) EXPIRES IN 2012 (2) EXPIRES IN 2011 (3) EXPIRES IN 2010 (4) NOVA FUND: $49,297,393 EXPIRES IN 2008, $40,390,472 EXPIRES IN 2009 AND $16,542,228 EXPIRES IN 2010. URSA FUND: $2,209,540 EXPIRES IN 2007, $12,563,901 EXPIRES IN 2011 AND $10,777,389 EXPIRES IN 2012. OTC FUND: $79,883,109 EXPIRES IN 2008,$180,736,125 EXPIRES IN 2009, $98,591,246 EXPIRES IN 2010, $10,118,266 EXPIRES IN 2011 AND $305,933 EXPIRES IN 2012. ARKTOS FUND: $1,648,984 EXPIRES IN 2009, $1,790,535 EXPIRES IN 2011 AND $4,909,190 EXPIRES IN 2012. U.S. GOVERNMENT MONEY MARKET FUND: $1,127 EXPIRES IN 2008, $386 EXPIRES IN 2010, AND $33 EXPIRES IN 2011. BIOTECHNOLOGY FUND: $608,485 EXPIRES IN 2010 AND $1,880,980 EXPIRES IN 2012. ELECTRONICS FUND: $324,070 EXPIRES IN 2010 AND $549,313 EXPIRES IN 2012. PRECIOUS METALS FUND: $87,863 EXPIRES IN 2009 AND $2,309,649 EXPIRES IN 2012. (*) INCLUDES POST-OCTOBER DEFERRED LOSS. SEE DISCLOSURE ON FOLLOWING PAGE. THE RYDEX VARIABLE TRUST ANNUAL REPORT | 189 NOTES TO FINANCIAL STATEMENTS (CONTINUED) - -------------------------------------------------------------------------------- TAX BASIS UNREALIZED GAIN (LOSS) ON INVESTMENTS AND DISTRIBUTIONS At December 31, 2004, the cost of securities for federal income tax purposes, the aggregate gross unrealized gain for all securities for which there was an excess of value over tax cost and the aggregate gross unrealized loss for all securities for which there was an excess of tax cost over value were as follows:
TAX TAX NET TAX UNREALIZED UNREALIZED UNREALIZED FUND COST GAIN LOSS GAIN/(LOSS) - --------------------------------- ------------- ------------ ------------- --------------- Nova Fund $ 135,795,852 $ 4,577,337 $ (336,333) $ 4,241,004 Ursa Fund 17,643,751 -- (174,504) (174,504) OTC Fund 227,644,670 -- (240,335) (240,335) Arktos Fund 24,126,687 23,245 -- 23,245 Titan 500 Fund 31,020,006 -- (95,300) (95,300) Velocity 100 Fund 62,311,511 1,796,578 (79,832) 1,716,746 Medius Fund 37,903,538 2,422,686 (85,885) 2,336,801 Inverse Mid-Cap Fund 1,032,825 -- (15,129) (15,129) Mekros Fund 111,675,451 5,103,205 (353,418) 4,749,787 Inverse Small-Cap Fund 4,631,698 -- (89,390) (89,390) U.S. Government Bond Fund 49,630,259 -- (1,915,564) (1,915,564) Juno Fund 76,290,059 562,261 (1,593,069) (1,030,808) Large-Cap Europe Fund 52,525,407 989,008 -- 989,008 Large-Cap Japan Fund 8,997,281 827,597 -- 827,597 Long Dynamic Dow 30 Fund 10,339,724 165,819 (5,150) 160,669 Inverse Dynamic Dow 30 Fund 2,936,840 -- (13,425) (13,425) Small-Cap Value Fund 46,378,775 2,498,378 (66,551) 2,431,827 Mid-Cap Value Fund 20,539,699 387,772 (4,210) 383,562 Large-Cap Value Fund 11,327,440 745,341 (2,305) 743,036 Small-Cap Growth Fund 30,435,394 1,457,930 (27,722) 1,430,208 Mid-Cap Growth Fund 22,173,760 597,867 (55,920) 541,947 Large-Cap Growth Fund 21,007,307 494,506 (42,395) 452,111 Sector Rotation Fund 30,095,778 3,915,066 (103,951) 3,811,115 U.S.Government Money Market Fund 180,288,275 -- -- -- Banking Fund 22,518,957 751,277 (56,125) 695,152 Basic Materials Fund 48,809,125 4,541,713 (89,575) 4,452,138 Biotechnology Fund 8,879,465 -- (1,645,518) (1,645,518) Consumer Products Fund 26,691,701 121,550 (2,170) 119,380 Electronics Fund 15,006,181 -- (1,890,696) (1,890,696) Energy Fund 63,450,063 8,076,697 (69,684) 8,007,013 Energy Services Fund 32,566,699 2,025,758 -- 2,025,758 Financial Services Fund 46,828,748 1,693,754 (188,453) 1,505,301 Health Care Fund 34,074,512 201,361 (109,849) 91,512 Internet Fund 42,987,637 3,115,290 (10,189) 3,105,101 Leisure Fund 56,264,086 4,218,059 -- 4,218,059 Precious Metals Fund 47,147,555 -- (1,586,607) (1,586,607) Real Estate Fund 25,915,800 3,350,924 -- 3,350,924 Retailing Fund 22,886,818 1,867,584 (43,843) 1,823,741 Technology Fund 21,839,983 391,416 (86,064) 305,352 Telecommunications Fund 33,509,163 1,918,743 (35,617) 1,883,126 Transportation Fund 51,762,614 6,125,610 -- 6,125,610 Utilities Fund 25,528,162 1,454,256 (25,249) 1,429,007
POST-OCTOBER LOSSES DEFERRED Pursuant to federal income tax regulations applicable to investment companies, the funds have elected to treat net capital losses realized between November 1 and December 31 of each year as occurring on the first day of the following tax year. For the year ended December 31, 2004, $19,990, $259,100, and $248,454 of realized capital losses reflected in the accompanying financial statements will not be recognized for federal income tax purposes until 2005 for Large-Cap Europe Fund, Large-Cap Japan Fund, and Inverse Dynamic Dow 30 Fund, respectively. 5. 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 obligations of the U. S. Treasury. The collateral is in the possession of the Trusts' custodian and is evaluated daily to ensure that its market value exceeds by, at a minimum, 102% the delivery value of the repurchase agreements at maturity. 190 | THE RYDEX VARIABLE TRUST ANNUAL REPORT NOTES TO FINANCIAL STATEMENTS (CONTINUED) - -------------------------------------------------------------------------------- The repurchase agreements that were executed by the joint account and outstanding as of December 31, 2004 are as follows:
COUNTERPARTY TERMS OF AGREEMENT FACE VALUE MARKET VALUE MATURITY VALUE - --------------------------- ------------------ ------------ ------------- -------------- Lehman Brothers, Inc. 1.55% due 01/03/05 $ 96,147,012 $ 96,147,012 $ 96,159,431 Morgan Stanley, Inc. 1.48% due 01/03/05 73,000,000 73,000,000 73,009,003 UBS Financial Services, Inc. 1.48% due 01/03/05 70,000,000 70,000,000 70,008,633 Citigroup, Inc. 1.25% due 01/03/05 70,000,000 70,000,000 70,007,292 ============= ============== $ 309,147,012 $ 309,184,359 ============= ==============
As of December 31, 2004, the collateral for the repurchase agreements in the joint account was as follows:
SECURITY TYPE RANGE OF RATES PAR VALUE MARKET VALUE - --------------------------- ----------------- ------------ ------------- U. S. Treasury Bonds 5.500% - 11.250% $ 69,656,000 $ 91,461,993 U. S. Treasury Notes 2.000% - 3.375% 221,612,563 223,969,137 ------------ ------------- $ 315,431,130 =============
In the event of counterparty default, the Trust has the right to sell the collateral to offset losses incurred. There is potential loss to the Trust in the event the Trust is delayed or prevented from exercising its rights to dispose of the collateral securities, including the risk of a possible decline in the value of the underlying securities during the period while the Trust seeks to assert its rights. The Trust's investment advisor, acting under the supervision of the Board of Trustees, reviews the value of the collateral and the credit worthiness of those banks and dealers with which the Trust enters into repurchase agreements to evaluate potential risks. 6. SECURITIES TRANSACTIONS During the year ended December 31, 2004, cost of purchases and proceeds from sales of investment securities, excluding short-term and temporary cash investments, were:
TITAN 500 VELOCITY INVERSE NOVA FUND URSA FUND OTC FUND ARKTOS FUND FUND 100 FUND MEDIUS FUND MID-CAP FUND ------------ -------------- ------------- ------------ ------------ ------------ ------------- --------------- Purchases $514,514,630 $ -- $ 619,009,684 $ -- $222,320,953 $162,133,737 $185,300,925 $ -- Sales $494,236,865 $ -- $ 572,379,779 $ -- $227,164,020 $143,597,239 $171,277,600 $ -- INVERSE U.S. INVERSE MEKROS SMALL-CAP GOVERNMENT JUNO LARGE-CAP LARGE-CAP LONG DYNAMIC DYNAMIC FUND FUND BOND FUND FUND EUROPE FUND JAPAN FUND DOW 30 FUND DOW 30 FUND ------------ -------------- ------------- ------------ ------------ ------------ ------------- --------------- Purchases $556,364,817 $ -- $ 494,025,273 $ -- $ -- $ -- $ 34,353,838 $ -- Sales $564,819,839 $ -- $ 513,157,762 $ -- $ -- $ -- $ 27,849,070 $ -- U.S. GOVERNMENT SMALL-CAP MID-CAP LARGE-CAP SMALL-CAP MID-CAP LARGE-CAP SECTOR MONEY MARKET VALUE FUND VALUE FUND VALUE FUND GROWTH FUND GROWTH FUND GROWTH FUND ROTATION FUND FUND ------------ -------------- ------------- ------------ ------------ ------------ ------------- --------------- Purchases $169,797,585 $ 142,129,946 $ 107,120,598 $206,078,579 $109,066,676 $106,715,540 $ 79,827,829 $ -- Sales $127,754,192 $ 124,269,870 $ 97,164,718 $178,776,719 $ 88,505,849 $ 87,400,723 $ 75,369,887 $ -- BASIC CONSUMER BANKING MATERIALS BIOTECHNOLOGY PRODUCTS ELECTRONICS ENERGY FINANCIAL FUND FUND FUND FUND FUND ENERGY FUND SERVICES FUND SERVICES FUND ------------ -------------- ------------- ------------ ------------ ------------ ------------- --------------- Purchases $177,608,937 $ 240,512,239 $ 189,632,409 $206,384,753 $117,354,642 $262,521,341 $185,178,681 $ 228,390,549 Sales $174,792,374 $ 244,175,508 $ 192,423,752 $191,476,859 $131,255,953 $244,976,461 $167,306,714 $ 202,792,444 HEALTH INTERNET LEISURE PRECIOUS REAL ESTATE RETAILING TECHNOLOGY TELECOMMUNI- CARE FUND FUND FUND METALS FUND FUND FUND FUND CATIONS FUND ------------ -------------- ------------- ------------ ------------ ------------ ------------- --------------- Purchases $193,719,199 $ 188,801,563 $ 176,913,181 $191,107,314 $236,441,658 $113,730,309 $132,198,633 $ 171,856,483 Sales $189,934,247 $ 178,524,209 $ 160,766,408 $188,183,770 $223,460,209 $108,557,625 $131,597,006 $ 159,018,836 TRANSPORTA- TION FUND UTILITIES FUND ------------ -------------- Purchases $134,828,132 $ 147,384,817 Sales $102,174,607 $ 141,648,918
THE RYDEX VARIABLE TRUST ANNUAL REPORT | 191 NOTES TO FINANCIAL STATEMENTS (CONTINUED) - -------------------------------------------------------------------------------- 7. SHARE TRANSACTIONS The Trust is authorized to distibute an unlimited number of no par value shares.
PURCHASED THROUGH SHARES PURCHASED DIVIDEND REINVESTMENT - --------------------------------------------------------------------------------------------- Period Ended Period Ended Period Ended Period Ended December 31, December 31, December 31, December 31, 2004 2003 2004 2003 - --------------------------------------------------------------------------------------------- Nova Fund 90,616,423 70,190,590 5,509 -- Ursa Fund 82,042,906 78,165,149 -- -- OTC Fund 63,676,586 59,664,726 -- -- Arktos Fund 44,660,602 21,595,420 -- 17,541 Titan 500 Fund 15,431,805 10,698,005 358,177 179,342 Velocity 100 Fund 24,569,991 20,238,606 98,519 165,896 Medius Fund 12,074,008 10,727,657 90,131 66,110 Inverse Mid-Cap Fund* 513,351 -- -- -- Mekros Fund 31,242,771 20,715,509 99,077 464,544 Inverse Small-Cap Fund* 3,226,890 -- -- -- U.S. Government Bond Fund 45,444,606 31,159,927 348,904 236,360 Juno Fund** 14,299,702 7,680,164 21,754 -- Large-Cap Europe Fund 10,082,773 6,843,913 277,971 281,301 Large-Cap Japan Fund 10,263,349 10,951,913 -- -- Long Dynamic Dow 30 Fund* 4,274,233 -- 18,209 -- Inverse Dynamic Dow 30 Fund* 563,094 -- 1,763 -- Small-Cap Value Fund* 6,233,134 -- 46,592 -- Mid-Cap Value Fund* 5,683,108 -- 38,010 -- Large-Cap Value Fund* 4,401,160 -- 5,999 -- Small-Cap Growth Fund* 7,927,790 -- 13,586 -- Mid-Cap Growth Fund* 4,476,551 -- -- -- Large-Cap Growth Fund* 4,453,786 -- 9,024 -- Sector Rotation Fund 4,500,722 3,842,582 -- -- U.S. Government Money Market Fund 1,972,975,071 2,702,076,887 599,199 31,663 Banking Fund 3,683,273 3,574,744 22,451 1,683 Basic Materials Fund 6,449,206 5,809,129 31,848 360 Biotechnology Fund 10,521,809 8,662,456 -- -- Consumer Products Fund 5,283,129 2,543,918 12,332 3,223 Electronics Fund 9,292,973 12,048,385 -- -- Energy Fund 8,102,044 5,733,444 851 -- Energy Services Fund 10,663,226 8,824,839 -- -- Financial Services 4,944,363 6,631,185 2,047 725 Health Care Fund 7,516,391 7,584,082 11,670 -- Internet Fund 11,387,357 8,715,820 -- -- Leisure Fund 6,284,802 7,051,556 8,285 -- Precious Metals Fund 25,690,194 30,086,397 -- -- Real Estate Fund 7,575,845 4,137,376 14,517 28,299 Retailing Fund 3,884,919 3,760,584 36,444 2,582 Technology Fund 8,534,083 13,347,902 95,745 96,482 Telecommunications Fund 8,754,908 4,230,010 -- 4 Transportation Fund 4,554,584 1,924,295 11,895 -- Utilities Fund 8,779,497 13,587,884 16,775 12,768 NET SHARES PURCHASED SHARES REDEEMED (REDEEMED) - ------------------------------------------------------------------------------------------------- Period Ended Period Ended Period Ended Period Ended December 31, December 31, December 31, December 31, 2004 2003 2004 2003 - ------------------------------------------------------------------------------------------------- Nova Fund (86,199,014) (65,407,027) 4,422,918 4,783,563 Ursa Fund (81,455,066) (79,859,968) 587,840 (1,694,819) OTC Fund (60,083,217) (58,522,050) 3,593,369 1,142,676 Arktos Fund (44,969,096) (20,798,627) (308,494) 814,334 Titan 500 Fund (15,733,937) (9,600,028) 56,045 1,277,319 Velocity 100 Fund (24,044,387) (18,815,756) 624,123 1,588,746 Medius Fund (11,624,803) (10,421,602) 539,336 372,165 Inverse Mid-Cap Fund* (483,399) -- 29,952 -- Mekros Fund (32,129,037) (17,689,286) (787,189) 3,490,767 Inverse Small-Cap Fund* (3,125,460) -- 101,430 -- U.S. Government Bond Fund (47,295,141) (27,718,749) (1,501,631) 3,677,538 Juno Fund** (13,350,258) (6,779,407) 971,198 900,757 Large-Cap Europe Fund (9,610,609) (5,602,282) 750,135 1,522,932 Large-Cap Japan Fund (10,209,517) (10,689,717) 53,832 262,196 Long Dynamic Dow 30 Fund* (3,889,949) -- 402,493 -- Inverse Dynamic Dow 30 Fund* (491,185) -- 73,672 -- Small-Cap Value Fund* (4,640,310) -- 1,639,416 -- Mid-Cap Value Fund* (5,001,795) -- 719,323 -- Large-Cap Value Fund* (4,004,572) -- 402,587 -- Small-Cap Growth Fund* (6,881,201) -- 1,060,175 -- Mid-Cap Growth Fund* (3,713,416) -- 763,135 -- Large-Cap Growth Fund* (3,685,764) -- 777,046 -- Sector Rotation Fund (4,057,096) (2,660,088) 443,626 1,182,494 U.S. Government Money Market Fund (2,038,389,174) (2,728,568,211) (64,814,904) (26,459,661) Banking Fund (3,628,353) (3,250,459) 77,371 325,968 Basic Materials Fund (6,676,726) (4,242,939) (195,672) 1,566,550 Biotechnology Fund (10,837,968) (8,270,998) (316,159) 391,458 Consumer Products Fund (4,854,051) (2,499,621) 441,410 47,520 Electronics Fund (10,013,806) (10,835,485) (720,833) 1,212,900 Energy Fund (7,482,312) (4,635,225) 620,583 1,098,219 Energy Services Fund (9,754,684) (8,635,159) 908,542 189,680 Financial Services (4,058,517) (6,168,839) 887,893 463,071 Health Care Fund (7,480,537) (6,712,061) 47,524 872,021 Internet Fund (10,926,035) (7,420,644) 461,322 1,295,176 Leisure Fund (5,697,860) (5,739,289) 595,227 1,312,267 Precious Metals Fund (26,062,658) (31,099,542) (372,464) (1,013,145) Real Estate Fund (7,285,153) (3,839,111) 305,209 326,564 Retailing Fund (3,723,686) (3,341,193) 197,677 421,973 Technology Fund (8,542,253) (12,562,742) 87,575 881,642 Telecommunications Fund (8,082,480) (3,879,691) 672,428 350,323 Transportation Fund (3,370,608) (1,907,370) 1,195,871 16,925 Utilities Fund (8,430,853) (14,650,041) 365,419 (1,049,389)
* SINCE THE COMMENCEMENT OF OPERATIONS: MAY 3, 2004. ** SINCE THE COMMENCEMENT OF OPERATIONS: MAY 1, 2003. 192 | THE RYDEX VARIABLE TRUST ANNUAL REPORT NOTES TO FINANCIAL STATEMENTS (CONCLUDED) - -------------------------------------------------------------------------------- 8. PORTFOLIO SECURITIES LOANED The Trust lends its securities to approved brokers to earn additional income. Within this arrangement, the Trust acts as the lender, U.S. Bank acts as the agent, and other approved registered broker dealers act as the borrowers. The Trust receives cash collateral, valued at 102% of the value of the securities on loan, which is initially held in a segregated account at U.S. Bank. As agent, U.S. Bank may, for investment purposes, pool the Trust's collateral in joint accounts with cash collateral from one or more other securities lending customers of U.S. Bank. Under the terms of the Trust's securities lending agreement with U.S. Bank, cash collateral may be invested by U.S. Bank in certain high quality, liquid investments. At December 31, 2004, the pooled cash collateral investments consisted of repurchase agreements (46.40%), commercial paper (32.90%), fixed income notes (20.69%), and money market mutual funds (0.01%). Collateral is maintained over the life of the loan in an amount not less than the value of loaned securities, as determined at the close of fund business each day; any additional collateral required due to changes in security values is delivered to the fund the next business day. Although the collateral mitigates risk, the Trust could experience a delay in recovering its securities and a possible loss of income or value if the borrower fails to return the securities. The Trust has the right under the securities lending agreement to recover the securities from the borrower on demand. At December 31, 2004 the following funds participated in securities lending and received cash collateral: VALUE OF CASH SECURITIES FUND COLLATERAL LOANED - ----------------------- -------------- ------------- Nova Fund $ 13,804,518 $ 13,321,933 OTC Fund 37,093,297 35,844,856 Titan 500 Fund 600,365 580,209 Velocity 100 Fund 6,533,954 6,287,531 Medius Fund 4,234,054 4,088,362 Mekros Fund 5,310,738 5,054,909 Long Dynamic Dow 30 Fund 621,340 603,718 Small-Cap Value Fund 1,563,541 1,502,895 Mid-Cap Value Fund 1,424,576 1,370,793 Large-Cap Value Fund 931,373 900,105 Small-Cap Growth Fund 1,572,253 1,518,636 Mid-Cap Growth Fund 2,031,814 1,959,509 Large-Cap Growth Fund 1,446,609 1,395,188 Sector Rotation Fund 6,101,785 5,890,554 Banking Fund 1,309,542 1,274,177 Basic Materials Fund 6,982,118 6,788,054 Biotechnology Fund 612,142 591,785 Consumer Products Fund 2,421,449 2,351,130 Electronics Fund 824,303 793,540 Energy Fund 11,003,535 10,649,843 Energy Services Fund 5,212,067 5,044,998 Financial Services Fund 2,969,265 2,878,565 Health Care Fund 3,854,239 3,723,428 Internet Fund 9,104,697 8,732,465 Leisure Fund 8,723,961 8,388,607 Precious Metals Fund 10,550,450 9,898,897 Real Estate Fund 2,438,689 2,353,229 Retailing Fund 3,955,244 3,808,993 Technology Fund 2,213,108 2,110,607 Telecommunications Fund 5,312,502 5,024,242 Transportation Fund 10,519,806 10,089,804 Utilities Fund 5,145,991 4,921,423 THE RYDEX VARIABLE TRUST ANNUAL REPORT | 193 REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM - -------------------------------------------------------------------------------- To the Board of Trustees and Shareholders of Rydex Variable Trust: In our opinion, the accompanying statements of assets and liabilities, including the schedules of investments, and the related statements of operations and of changes in net assets and the financial highlights present fairly, in all material respects, the financial position of Nova Fund, Ursa Fund, OTC Fund, Arktos Fund, Titan 500 Fund, Velocity 100 Fund, Medius Fund, Inverse Mid-Cap Fund, Mekros Fund, Inverse Small-Cap Fund, U.S. Government Bond Fund, Juno Fund, Large-Cap Europe Fund, Large-Cap Japan Fund, Long Dynamic Dow 30 Fund, Inverse Dynamic Dow 30 Fund, Small-Cap Value Fund, Mid-Cap Value Fund, Large-Cap Value Fund, Small-Cap Growth Fund, Mid-Cap Growth Fund, Large-Cap Growth Fund, Sector Rotation Fund, U.S. Government Money Market Fund, Banking Fund, Basic Materials Fund, Biotechnology Fund, Consumer Products Fund, Electronics Fund, Energy Fund, Energy Services Fund, Financial Services Fund, Health Care Fund, Internet Fund, Leisure Fund, Precious Metals Fund, Real Estate Fund, Retailing Fund, Technology Fund, Telecommunications Fund, Transportation Fund, and Utilities Fund (forty-two of the funds of the Rydex Variable Trust, hereafter referred to as the "Funds") at December 31, 2004, the results of each of their operations, the changes in each of their net assets and the financial highlights for the periods presented, in conformity with accounting principles generally accepted in the United States of America. These financial statements and financial highlights (hereafter referred to as "financial statements") are the responsibility of the Funds' management; our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these financial statements in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits, which included confirmation of securities at December 31, 2004 by correspondence with the custodian and brokers, provide a reasonable basis for our opinion. PricewaterhouseCoopers LLP Baltimore, Maryland February 22, 2005 194 | THE RYDEX VARIABLE TRUST ANNUAL REPORT OTHER INFORMATION - -------------------------------------------------------------------------------- UNAUDITED TAX INFORMATION This information is being provided as required by the Internal Revenue Code. Amounts shown may differ from those elsewhere in the report because of difference in tax and financial reporting practice. Of the ordinary income distributions paid during the year for Velocity 100 Fund, Long Dynamic Dow 30 Fund, Small-Cap Value Fund, Mid-Cap Value Fund, Large-Cap Value Fund, Large-Cap Growth Fund, and Real Estate Fund, 0%, 5.22%, 100%, 100%, 100%, 64.10%, and 75.85%, respectively, qualifies for the dividends received deductions for corporations. The Funds distributions to shareholders included:
U.S. GOVERNMENT TITAN 500 VELOCITY 100 MEDIUS MEKROS BOND JUNO FUND FUND FUND FUND FUND FUND ---------- ------------ ----------- ----------- ------------ -------------- From short-term capital gains: $2,253,612 $ -- $ 1,589,650 $ 1,944,101 $ 1,719,056 $ 133,449 From long-term capital gains, subject to the 20% rate gains category: $ 989,294 $ 579,649 $ 409,464 $ 789,421 $ 503,055 $ 360,161 LONG INVERSE LARGE-CAP DYNAMIC DYNAMIC SMALL-CAP MID-CAP LARGE-CAP EUROPE DOW 30 DOW 30 VALUE VALUE VALUE FUND FUND FUND FUND FUND FUND ---------- ------------ ----------- ----------- ------------ -------------- From short-term capital gains: $ 46,532 $ 44,981 $ -- $ 1,330,766 $ 1,016,475 $ 122,224 From long-term capital gains, subject to the 20% rate gains category: $ 100,133 $ -- $ 75,845 $ 835 $ 14,141 $ 758 SMALL-CAP LARGE-CAP BASIC CONSUMER GROWTH GROWTH BANKING MATERIALS PRODUCTS ENERGY FUND FUND FUND FUND FUND FUND ---------- ------------ ----------- ----------- ------------ -------------- From short-term capital gains: $ 388,437 $ 125,768 $ 674,018 $ 896,336 $ 366,859 $ 19,777 From long-term capital gains, subject to the 20% rate gains category: $ -- $ -- $ 1,558 $ -- $ -- $ -- HEALTH REAL CARE LEISURE ESTATE RETAILING TECHNOLOGY TRANSPORTATION FUND FUND FUND FUND FUND FUND ---------- ------------ ----------- ----------- ------------ -------------- From short-term capital gains: $ 272,867 $ 176,049 $ 355,526 $ 859,770 $ 1,130,753 $ 315,578 From long-term capital gains, subject to the 20% rate gains category: $ 7,789 $ -- $ 29,677 $ 5,766 $ -- $ --
PROXY VOTING INFORMATION A description of the policies and procedures that the Trust uses to determine how to vote proxies relating to securities held in the Funds' portfolios is available, without charge and upon request, by calling 1-800-820-0888. This information is also available from the EDGAR database on the SEC's site at http://www.sec.gov. QUARTERLY PORTFOLIO SCHEDULES INFORMATION The Trust files its complete schedule of portfolio holdings with the SEC for the first and third quarters of each fiscal year on Form N-Q, which are available on the SEC's website at http://www.sec.gov. The Fund's Forms N-Q may be reviewed and copied at the SEC's Public Reference Room in Washington, DC, and that information on the operation of the Public Reference Room may be obtained by calling 1-800-SEC-0330. Copies of the portfolio holdings are also available to shareholders, without charge and upon request by calling 1-800-820-0888. THE RYDEX VARIABLE TRUST ANNUAL REPORT | 195 UNAUDITED INFORMATION ON BOARD OF TRUSTEES AND OFFICERS - -------------------------------------------------------------------------------- Each Trust is served by a separate Board of Trustees with no stated term of service, and Trustees continue to serve after election until resignation. The Statement of Additional Information includes further information about Fund Trustees and Officers, and can be obtained without charge by calling (800) 820-0888. All Trustees and Officers may be reached c/o Rydex Investments, 9601 Blackwell Rd., Suite 500, Rockville, MD 20850. TRUSTEE AND OFFICER LENGTH OF SERVICE NAME, POSITION AND AS TRUSTEE NUMBER OF YEAR OF BIRTH (YEAR BEGAN) FUNDS OVERSEEN - ------------------------ --------------------------- -------------- CARL G. VERBONCOEUR* Rydex Series Funds - 2004 100 Trustee, President (1952) Rydex Variable Trust - 2004 Rydex Dynamic Funds - 2004 Rydex ETF Trust - 2004 PRINCIPAL OCCUPATIONS DURING PAST FIVE YEARS: Chief Executive Officer of Rydex Fund Services, Inc., PADCO Advisors, Inc., PADCO Advisors II, Inc., and Rydex Distributors, Inc. (2003 to present); Executive Vice President of Rydex Fund Services, Inc. (2000 to 2003); Vice President of Rydex Fund Services, Inc. and Rydex Distributors, Inc., (1997 to 2000) - -------------------------------------------------------------------------------- INDEPENDENT TRUSTEES LENGTH OF SERVICE NAME, POSITION AND AS TRUSTEE NUMBER OF YEAR OF BIRTH (YEAR BEGAN) FUNDS OVERSEEN - ------------------------ --------------------------- -------------- COREY A. COLEHOUR Rydex Series Funds - 1993 100 Trustee (1945) Rydex Variable Trust - 1998 Rydex Dynamic Funds - 1999 Rydex ETF Trust - 2003 PRINCIPAL OCCUPATIONS DURING PAST FIVE YEARS: Senior Vice President of Marketing/Co-Owner, Schield Management Company --------------------------- J. KENNETH DALTON Rydex Series Funds - 1995 100 Trustee (1941) Rydex Variable Trust - 1998 Rydex Dynamic Funds - 1999 Rydex ETF Trust - 2003 PRINCIPAL OCCUPATIONS DURING PAST FIVE YEARS: Mortgage Banking Consultant and Investor, The Dalton Group ---------------------------- JOHN O. DEMARET Rydex Series Funds - 1997 101 Trustee (1940) Rydex Variable Trust - 1998 Rydex Dynamic Funds - 1999 Rydex ETF Trust - 2003 Rydex Capital Partners SPhinX Fund - 2003 PRINCIPAL OCCUPATIONS DURING PAST FIVE YEARS: Retired --------------------------- PATRICK T. MCCARVILLE Rydex Series Funds - 1997 100 Trustee (1942) Rydex Variable Trust - 1998 Rydex Dynamic Funds - 1999 Rydex ETF Trust - 2003 PRINCIPAL OCCUPATIONS DURING PAST FIVE YEARS: Founder and Chief Executive Officer, Par Industries, Inc. --------------------------- 196 | THE RYDEX VARIABLE TRUST ANNUAL REPORT UNAUDITED INFORMATION ON BOARD OF TRUSTEES AND OFFICERS (CONCLUDED) - -------------------------------------------------------------------------------- LENGTH OF SERVICE NAME, POSITION AND AS TRUSTEE NUMBER OF YEAR OF BIRTH (YEAR BEGAN) FUNDS OVERSEEN - ------------------------ --------------------------- -------------- ROGER SOMERS Rydex Series Funds - 1993 100 Trustee (1944) Rydex Variable Trust - 1998 Rydex Dynamic Funds - 1999 Rydex ETF Trust - 2003 PRINCIPAL OCCUPATIONS DURING PAST FIVE YEARS: Owner, Arrow Limousine - --------------------------------------------------------------------------------
EXECUTIVE OFFICERS NAME, POSITION AND PRINCIPAL OCCUPATIONS YEAR OF BIRTH DURING PAST FIVE YEARS - ------------------ ---------------------- NICK BONOS* Vice President and Treasurer of Rydex Series Funds, Rydex Variable Trust, Rydex Vice President and Treasurer (1963) Dynamic Funds, Rydex ETF Trust, and Rydex Capital Partners SPhinX Fund, 2003 to present; Senior Vice President of Rydex Fund Services, Inc., 2003 to present; Vice President of Accounting of Rydex Fund Services, Inc., 2000 to 2003;Vice President of Mutual Fund Services, State Street Corp., 1997 to 1999. MICHAEL P. BYRUM* Secretary of Rydex Series Funds, Rydex Variable Trust, and Rydex Dynamic Funds, Vice President and Secretary (1970) 2004 to present; Vice President of Rydex Series Funds, 1997 to present; Vice President of Rydex Variable Trust, 1998 to present; Vice President of Rydex Dynamic Funds, 1999 to present; Vice President of Rydex ETF Trust, 2002 to present; President and Trustee of Rydex Capital Partners SPhinX Fund, 2003 to present; President of Rydex Global Advisors, 2004 to present; Chief Operating Officer of Rydex Global Advisors and Rydex Distributors, Inc., 2003 to 2004. JOANNA M. HAIGNEY* Chief Compliance Officer Rydex Series Funds, Rydex Variable Trust, and Rydex Chief Compliance Officer and Assistant Dynamic Funds, 2004 to present; Assistant Secretary of Rydex Series Funds, Rydex Secretary (1967) Variable Trust, and Rydex Dynamic Funds, 2000 to present; Assistant Secretary of Rydex ETF Trust, 2002 to present; Secretary of Rydex Capital Partners SPhinX Fund, 2003 to present; Vice President of Compliance of Rydex Fund Services, Inc., 2000 to present; Vice President Fund Administration, Chase Global Funds Services Co., a division of Chase Manhattan Bank NA, 1994 to 1999.
* OFFICERS OF THE FUND ARE DEEMED TO BE "INTERESTED PERSONS" OF THE TRUST, WITHIN THE MEANING OF SECTION 2(A)(19) OF THE 1940 ACT, INASMUCH AS THIS PERSON IS AFFILIATED WITH THE ADVISOR. THE RYDEX VARIABLE TRUST ANNUAL REPORT | 197 [LOGO] RYDEXINVESTMENTS ESSENTIAL FOR MODERN MARKETS(TM) 9601 Blackwell Road Suite 500 Rockville, MD 20850 800.820.0888 www.rydexinvestments.com ITEM 2. CODE OF ETHICS. The Board of Trustees of the Trust has adopted a Combined Code of Ethics (the "Code") pursuant to Rule 17j-1 under the 1940 Act. The Advisor and Distributor are also covered by the Code. The Code applies to the personal investing activities of trustees, directors, officers, and certain employees ("access persons"). Rule 17j-1 and the Code are designed to prevent unlawful practices in connection with the purchase or sale of securities by access persons. Under the Code, access persons are permitted to engage in personal securities transactions, but are required to report their personal securities transactions for monitoring purposes. In addition, certain access persons are required to obtain approval before investing in initial public offerings or private placements. No substantive amendments were approved or waivers were granted to the Code during the period covered by this report. The Code is filed as an exhibit to this Form N-CSR. ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT. While the members of the audit committee have many years of experience in business and finance, including working with fund financial statements and auditors, they do not feel that the background and experience of any single member would meet the qualifications necessary to be a "financial expert" as that term is defined by the Securities and Exchange Commission. Nonetheless, the committee has determined that, together, its collective financial experience and expertise makes an individual financial expert unnecessary at this time. ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES. (a)-(d) The aggregate Audit Fees billed by PricewaterhouseCoopers LLP ("PWC"), the Trust's principal accountant, for the audit of the annual financial statements in connection with statutory and regulatory filings for the fiscal years ended December 31, 2004 and December 31, 2003 were $444,500 and $338,000, respectively. The aggregate Tax Fees billed by PWC for professional services rendered for tax compliance, tax advice, and tax planning, including preparation of tax returns and distribution assistance, for the fiscal years ended December 31, 2004 and December 31, 2003 were $174,370 and $126,100, respectively. (e) The audit committee has adopted a policy whereby audit and non-audit services performed by the registrant's principal accountant for the registrant, its investment advisor, and any entity controlling, controlled by, or under common control with the investment advisor that provides ongoing services to the registrant require pre-approval in advance at regularly scheduled audit committee meetings. If such service is required between regularly scheduled audit committee meetings, the chairman of the audit committee, J. Kenneth Dalton, is authorized to pre-approve the service with full committee approval at the next scheduled meeting. There shall be no waivers of the pre-approval process. No services described in (b)-(d) above were approved pursuant to paragraph (c)(7)(i)(C) of Rule 2-01 of Regulation S-X. (f) Not applicable. (g) The aggregate non-audit fees billed by the registrant's accountant for the most recent fiscal year and the preceding fiscal year for services rendered to the registrant, the investment advisor, and any entity controlling, controlled by, or under common control with the advisor that provides ongoing services to the registrant were $18,000 and $16,000, respectively. These aggregate fees were less than the aggregate fees billed for the same periods by the registrant's principal accountant for audit services rendered to the registrant, the investment advisor, and any entity controlling, controlled by, or under common control with the advisor that provides ongoing services to the registrant. (h) All non-audit services rendered in (g) above were pre-approved by the registrant's audit committee. As such, the audit committee has considered these services in maintaining the principal accountant's independence. ITEM 5. AUDIT COMMITTEE OF LISTED REGISTRANTS. Not applicable. ITEM 6. SCHEDULE OF INVESTMENTS Schedule of Investments is included as part of the report to shareholders filed under Item 1 of this form. ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END MANAGEMENT INVESTMENT COMPANIES. Not applicable. ITEM 8. PORTFOLIO MANAGERS OF CLOSED-END MANAGEMENT INVESTMENT COMPANIES. Not applicable. ITEM 9. PURCHASES OF EQUITY SECURITIES BY CLOSED-END MANAGEMENT INVESTMENT COMPANY AND AFFILIATED PURCHASERS. Not applicable. ITEM 10. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS. Not applicable. ITEM 11. CONTROLS AND PROCEDURES. (a) Based on their evaluation on March 8, 2005, the President (principal executive officer) and the Treasurer (principal financial officer) of the Rydex Variable Trust (the "Trust") believe that there were no significant deficiencies in the design or operation of the internal controls of the Trust or Rydex Global Advisors ("RGA"), the investment advisor and manager of the Trust, or Rydex Distributors, Inc. ("RD"), which acts as distributor for the Trust, including disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940) which would have adversely affected the ability of the Trust or RGA on behalf of the Trust, to record, process, summarize, and report the subject matter contained in this Report, and the President and Treasurer of the Trust have identified no material weaknesses in such internal controls on behalf of the Trust. There was no fraud, whether or not material, involving officers or employees of RGA, RD or the Trust who have a significant role in the Trust's internal controls, including disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940) that has come to the attention of the Advisor or the officers of the Trust, including its President and Treasurer. (b) There were no significant changes in the Trust's and RGA's internal controls over financial reporting, including disclosure controls and procedures (as defined in Rule 30a-3(d) under the Investment Company Act of 1940) that occurred during the second fiscal quarter of the period covered by this report that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting. ITEM 12. EXHIBITS. (a)(1) The registrant's code of ethics pursuant to Item 2 of Form N-CSR is attached. (a)(2) Separate certifications by the President (principal executive officer) and Treasurer (principal financial officer) of the registrant as required by Rule 30a-2(a) under the Act (17 CFR 270.30a-2(a)) are attached. (b) A certification by the registrant's President (principal executive officer) and Treasurer (principal financial officer) as required by Rule 30a-2(b) under the Act (17 CFR 270.30a-2(b)) is attached. SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. (Registrant) Rydex Variable Trust -------------------- By (Signature and Title)* /S/ CARL G. VERBONCOEUR ------------------------ Carl G. Verboncoeur, President Date March 8, 2005 --------------------------------------------------------------------------- Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated. By (Signature and Title)* /S/ CARL G. VERBONCOEUR ----------------------- Carl G. Verboncoeur, President Date March 8, 2005 ------------- By (Signature and Title)* /S/ NICK BONOS -------------- Nick Bonos, Vice President and Treasurer Date March 8, 2005 ------------- * Print the name and title of each signing officer under his or her signature. EX-99.CODE ETH 2 codeofethics12-04.txt VARIABLE TRUST AR 12-31-04 Code of Ethics 1204 (2) Procedure Number: IC02.2.2 - -------------------------------------------------------------------------------- CODE OF ETHICS ------------------------------ -------------------------------------- PROCEDURE CREATION DATE: Adopted by the Board, February 11, 2005 Adopted by the Advisors, February 1, 2005 Adopted December 11, 1998 Effective January 1, 1999 PROCEDURE REVIEWED AS OF: September 2004 PROCEDURE REVISED AS OF: February 1, 2002 January 30, 2003 August 25, 2003 February 11, 2005 REGULATORY RULE: Rule 17j-1 of the Investment Company Act of 1940 and Rule 204A-1 under the Investment Advisers Act of 1940 ------------------------------ -------------------------------------- BUSINESS UNIT: Compliance Department RESPONSIBILITY: Compliance Administrator MANAGER RESPONSIBLE: Compliance Manager COVERED ENTITIES: This Combined Code of Ethics adopted under Rule 17j-1under the Investment Company Act of 1940 (the "1940 Act") and Rule 204A-1 under the Investment Advisers Act of 1940 (the "Advisers Act") covers the following companies: |X| RYDEX DYNAMIC FUNDS |X| RYDEX SERIES FUNDS |X| RYDEX VARIABLE TRUST |X| RYDEX ETF TRUST |X| PADCO ADVISORS, INC. |X| PADCO ADVISORS II, INC. |X| RYDEX FUND SERVICES, INC. |X| RYDEX DISTRIBUTORS, INC. PROCEDURE: Rydex Dynamic Funds, Rydex Series Funds, Rydex Variable Trust, and Rydex ETF Trust (each a "Trust" and jointly the "Trusts"), and PADCO Advisors, Inc., PADCO Advisors II, Inc., Rydex Fund Services, Inc. and Rydex Distributors, Inc. (each a "Company, jointly the "Companies," and together with the Trusts, "Rydex") are confident that their officers, trustees, directors and employees act with integrity and good faith. Rydex recognizes, however, that personal interests may conflict with a Trust's or Company's interests where trustees, directors, officers or employees: |X| Know about present or future portfolio transactions or |X| Have the power to influence portfolio transactions; and |X| Engage in personal transactions in securities. In an effort to prevent these conflicts from arising and in accordance with Rule 17j-1(b)(1) under the 1940 Act and Rule 204A-1 under the Advisers Act, Rydex has adopted this Code of Ethics and all amendments thereto (together, the "Code") to prohibit transactions that create, may create, or appear to create conflicts of interest, and to establish reporting requirements and enforcement procedures. Each trustee, director, officer and employee of the Companies should carefully read and review this Code. 1. About Rydex Rydex Dynamic Funds, Rydex Series Funds, Rydex Variable Trust, and Rydex ETF Trust are separately registered open-end management investment companies. Each Trust may consist of multiple investment portfolios (the "Rydex Funds"). The Rydex Funds may be grouped primarily into three broad categories: (1) Benchmark Funds (one of which is exchange-traded), (2) Sector Funds, and (3) Strategic Funds. In addition, there is a Money Market Fund. - -------------------------------------------------------------------------------- Page 1 of 10 Code of Ethics 1204 (2) Procedure Number: IC02.2.2 - -------------------------------------------------------------------------------- PADCO Advisors, Inc. and PADCO Advisors II, Inc. (the "Advisors") are each investment advisers. PADCO Advisors, Inc. is the investment adviser for Rydex Dynamic Funds and Rydex Series Funds and PADCO Advisors II, Inc. is the investment adviser for Rydex Variable Trust and Rydex ETF Trust. Rydex Distributors, Inc. serves as the distributor to the Rydex Funds. Rydex Financial Services, Inc. provides general administrative services and serves as the transfer agent to the Rydex Dynamic Funds, Rydex Series Funds and Rydex Variable Trust. 2. About this Code of Ethics 2.1. Transaction-Related and Reporting Provisions This Code sets forth specific prohibitions relating to SECURITIES transactions and also sets out certain reporting requirements. They cover the persons identified below: |X| All Company officers and directors; |X| Employees who have access to nonpublic information regarding the portfolio holdings of any reportable fund, E.G. portfolio management and fund accounting personnel, are involved in making securities recommendations to clients, or have access to such recommendations that are nonpublic; |X| All Trustees of the Trusts, both INTERESTED and INDEPENDENT; and |X| Natural persons in a CONTROL relationship with a Company who obtain information concerning recommendations made to a Fund about the PURCHASE OR SALE of a SECURITY AND ARE NOT SPECIFICALLY COVERED BY ANY OTHER SECTION OF THE CODE. For the prohibitions and reporting requirements that apply to you, please refer to Parts A-D, as indicated below. (Definitions of UNDERLINED terms are included in Appendix A.) |X| Independent Trustees of the Trusts Part A |X| Interested Trustees of the Trusts Part B |X| ACCESS PERSONS Part C |X| Natural CONTROL Persons Part D 2.2. Other Provisions The remainder of this Code sets forth general principles, required course of conduct, reporting obligations, the Companies' review, enforcement and recordkeeping responsibilities and miscellaneous information. 3. Statement of General Principles In recognition of the trust and confidence placed in Rydex by shareholders of the Trusts, and because Rydex believes that their operations should benefit shareholders, Rydex has adopted the following universally applicable principles. 1. Shareholders' interests are paramount. You must place shareholder interests before your own. 2. You must accomplish all personal SECURITIES transactions in a manner that avoids even the appearance of a conflict of your personal interests with those of a Trust and its shareholders. 3. You must avoid actions or activities that allow (or appear to allow) you or your family to profit or benefit from your position with a Company, or that bring into question your independence or judgment. 4. You must comply with all applicable federal securities laws, including the prohibitions against the misuse of material nonpublic information, in conducting yourself and the operations of the Companies. 4. Required COURSES OF CONDUCT 4.1. Prohibition Against Fraud, Deceit and Manipulation You cannot, in connection with the PURCHASE OR SALE, directly or indirectly, of a SECURITY HELD OR TO BE ACQUIRED by any Fund: a. employ any device, scheme or artifice to defraud the Fund; b. make to the Fund any untrue statement of a material fact or omit to state to the Fund a material fact necessary in order to make the statements made, in light of the circumstances under which they are made, not misleading; c. engage in any act, practice or course of business which would operate as a fraud or deceit upon the Fund; or d. engage in any manipulative practice with respect to the Fund. - -------------------------------------------------------------------------------- Page 2 of 10 Code of Ethics 1204 (2) Procedure Number: IC02.2.2 - -------------------------------------------------------------------------------- Two of the most common risks associated with personal SECURITIES transactions are front-running and trading opposite a fund. For example, front-running would include the purchase of a SECURITY any time within seven days ahead of when a fund purchases the same SECURITY or the sale of a SECURITY any time within seven days ahead of when a fund sells the same SECURITY. An example of trading opposite a fund would include the sale of a SECURITY any time within seven days after a fund purchases the same SECURITY or the purchase of a security any time within seven days after a fund sells the same SECURITY. 4.2. Limits on Accepting or Receiving Gifts - Access Persons cannot accept or receive any gift of more than DE MINIMIS value from any person or entity that does business with or on behalf of a Company. THIS PROVISION DOES NOT INCLUDE: |X| occasional meals, tickets to a sporting event or the theater, or normal business entertainment; and |X| any payment or reimbursement for professional training or educational meetings. 5. Confidentiality. All personal SECURITIES transactions reports and any other information filed with Rydex under this Code will be treated as confidential, provided that such reports and related information may be produced to the Securities and Exchange Commission (the "SEC") and other regulatory agencies. 6. Interpretation of Provisions - The Board of Trustees of the Trusts may from time to time adopt such interpretations of this Code as it deems appropriate. 7. Acknowledgment of Receipt and Annual Certification - Each interested Trustee,director, officer, employee and affiliated agent of Rydex will receive a copy of the Code and any subsequent amendments to the Code, and each such person must acknowledge receipt of the Code in writing. In addition, each such person is required to certify annually that he/she (i) has read and understands the Code, (ii) is aware that he/she is subject to the provisions of this Code, (iii) has complied with the Code at all times during the previous calendar year, and (iv) has, during the previous calendar year, reported all holdings and transactions that he/she is required to report pursuant to the Code. The acknowledgement of receipt and certification may be made electronically via the rydex.starcompliance.com website. EXCEPTION HANDLING: The Compliance Officer, in his or her discretion, may exempt any person from any specific provision of the Code, if the Compliance Officer determines that (a) the services of the person are valuable to Rydex; (b) the failure to grant this exemption will result in an undue burden on the person or prevent the person from being able to render services to Rydex; and (c) granting the exemption does not detrimentally affect the shareholders of the Rydex Funds. The Compliance Officer will prepare a report documenting the nature of any exemption granted, the persons involved and the reasons for granting such exemption. Any person granted an exemption with respect to a particular transaction must furnish the Compliance Officer with a written report concerning that transaction within three (3) days of the transaction. REPORTING REQUIREMENTS: 1. Individual Reporting Obligations - See Parts A, B, C or D as appropriate, for your specific reporting obligations. 1.1. Obligation to Report Violations of the Code - In addition to the individual reporting requirements referenced above, any violation of the Code must be promptly reported to the Compliance Officer. 2. Annual Written Report to the Board - At least once a year, the Compliance Officer, on behalf of Rydex, will provide the Board of Trustees of each Trust a WRITTEN report that includes: 2.1. Issues Arising Under the Code - The Report will describe any issue(s) that arose during the previous year under the Code, including any material Code violations, and any resulting sanctions. 2.2. Certification - The Report will certify to the Board of Trustees that each Company has adopted measures reasonably necessary to prevent its personnel from violating the Code currently and in the future. 3. Periodic Review and Reporting - The Compliance Officer (or his or her designee) will report to the Board of Trustees of the Trusts at least annually as to the operation of this Code and will address in any such report the need (if any) for further changes or modifications to this Code. TESTING AND REVIEW: Each Trust and Company shall appoint the Compliance Officer. - -------------------------------------------------------------------------------- Page 3 of 10 Code of Ethics 1204 (2) Procedure Number: IC02.2.2 - -------------------------------------------------------------------------------- 1. The Compliance Officer will perform the following duties: a. The Compliance Officer will, on a quarterly basis, compare all reported personal SECURITIES transactions with the Trusts' completed portfolio transactions and a list of securities being considered for purchase or sale by the Advisors to determine whether a Code violation may have occurred. The Compliance Officer may request additional information or take any other appropriate measure that the Compliance Officer decides is necessary to aid in this determination. Before determining that a person has violated the Code, the Compliance Officer must give the person an opportunity to supply explanatory material. b. If the Compliance Officer determines that a Code violation may have occurred, the Compliance Officer must submit the determination, together with the confidential quarterly report and any explanatory material provided by the person, to the President of the Trust or Company and legal counsel ("Counsel"). The President of the Trust or Company and Counsel will independently determine whether the person violated the Code. c. No person is required to participate in a determination of whether he or she has committed a Code violation or of the imposition of any sanction against himself or herself. If a securities transaction of the President is under consideration, a Vice President will act for the President for purposes of this Section. 2. Sanctions - If the President and Fund Counsel find that the person violated the Code, the President will impose upon the person sanctions that the President deems appropriate and will report the violation and the sanction imposed to the Board of Trustees of the Rydex Funds at the next regularly scheduled board meeting unless, in the sole discretion of the Trusts' President, circumstances warrant an earlier report. RECORDKEEPING: The Companies will maintain records as set forth below. These records will be maintained in accordance with Rule 31a-2 under the 1940 Act and Rule 204-2(a)(12) under the Advisers Act and will be available for examination by representatives of the SEC. 1. A copy of this Code and any other code which is, or at any time within the past five years has been, in effect will be preserved in an easily accessible place; 2. A list of all persons who are, or within the past five years have been, required to submit reports under this Code will be maintained in an easily accessible place; 3. A copy of each report made by a person under this Code will be preserved for a period of not less than five years from the end of the fiscal year in which it is made, the first two years in an easily accessible place; 4. A record of any Code violation and of any sanctions taken will be preserved in an easily accessible place for a period of not less than five years following the end of the fiscal year in which the violation occurred; 5. A copy of each annual report to the Board of Trustees will be maintained for at least five years from the end of the fiscal year in which it is made, the first two years in an easily accessible place; 6. A copy of all Acknowledgements of Receipt and Annual Certifications as required by this Code for each person who is currently, or within the past five years was required to provide such Acknowledgement of Receipt or Annual Certification; and 7. The Companies will maintain a record of any decision, and the reasons supporting the decision, to approve the acquisition of SECURITIES in an INITIAL PUBLIC OFFERING ("IPO") or a PRIVATE PLACEMENT, for at least five years after the end of the fiscal year in which the approval is granted. DISCLOSURE: The Code of Ethics will be disclosed in accordance with the requirements of Form ADV and N1-A. REVISIONS: These procedures shall remain in effect until amended, modified or terminated. The Board must approve any material amendments to the Code within six months of the amendment. - -------------------------------------------------------------------------------- Page 4 of 10 Code of Ethics 1204 (2) Procedure Number: IC02.2.2 - -------------------------------------------------------------------------------- PART A PROCEDURES FOR INDEPENDENT TRUSTEES GENERAL OBLIGATIONS. 1. Required Transaction Reports 1.1. On a quarterly basis you must report any SECURITIES transactions, as well as any SECURITIES accounts established. You must submit your report to the Compliance Officer no later than 10 calendar days after the end of the calendar quarter in which the transaction to which the report relates was effected. Quarterly Personal Securities Transactions Reports will be made electronically, via the RYDEX.STARCOMPLIANCE.COM website. You will receive notification via email when the Quarterly Transaction Report is due, including instructions on how to access the information and complete the report. 1.2. If you had no reportable transactions or did not open any SECURITIES accounts during the quarter, you are not required to submit a report. 1.3. Reports of individual SECURITIES transactions are required only if you KNEW at the time of the transaction or, in the ordinary course of fulfilling your official duties as a Trustee, SHOULD HAVE KNOWN, that during the 15-calendar day period immediately preceding or following the date of your transaction, the same SECURITY was PURCHASED OR SOLD, or was BEING CONSIDERED FOR PURCHASE OR SALE, by a Fund. NOTE: The "SHOULD HAVE KNOWN" standard does not: o imply a duty of inquiry; o presume you should have deduced or extrapolated from discussions or memoranda dealing with the Fund's investment strategies; or o impute knowledge from your prior knowledge of the Fund's portfolio holdings, market considerations, or investment policies, objectives and restrictions. 2. What Securities are Covered Under Your Quarterly Reporting Obligation? If the transaction is reportable because it came within paragraph (1), above, you must report all transactions in SECURITIES that: (i) you directly or indirectly BENEFICIALLY OWN or (ii) because of the transaction, you acquire direct or indirect BENEFICIAL OWNERSHIP. The report must also contain any account you established in which any SECURITIES were held during the quarter. 3. What Securities and Transactions May Be Excluded from Your Report? You are not required to detail or list the following SECURITIES or transactions on your quarterly report: a. PURCHASES OR SALES effected for any account over which you have no direct or indirect influence or CONTROL. b. Purchases you made solely with the dividend proceeds received in a dividend reinvestment plan or that are part of an automatic payroll deduction plan or other similar type of plan, where you purchase SECURITIES issued by your employer. c. Purchases arising from the exercise of rights issued by an issuer PRO RATA to all holders of a class of its SECURITIES, as long as you acquired these rights from the issuer, and sales of such rights so acquired. d. Purchases of SECURITIES issued by the U.S. Government or its agencies, bankers' acceptances, bank certificates of deposit, commercial paper, high quality short-term debt instruments, including repurchase agreements, and registered open-end mutual funds, other than REPORTABLE funds. e. PURCHASES OR SALES which are non-volitional on your part, including PURCHASES OR SALES upon exercise of puts or calls written by you and sales from a margin account to a BONA FIDE margin call. You may include a statement in your report that the report shall not be construed as your admission that you have any direct or indirect BENEFICIAL OWNERSHIP in the SECURITY included in the report. - -------------------------------------------------------------------------------- Page 5 of 10 Code of Ethics 1204 (2) Procedure Number: IC02.2.2 - -------------------------------------------------------------------------------- PART B INTERESTED TRUSTEES GENERAL OBLIGATIONS. 1. Providing a List of Securities You must provide the Compliance Officer with a complete listing of all securities you BENEFICIALLY OWN as of December 31 of the previous year. Each following year, you must submit a revised list to the Compliance Officer showing the SECURITIES you BENEFICIALLY OWN as of December 31. You must submit the initial listing within 10 calendar days of the date you first become a Trustee, and each update no later than 30 calendar days after the start of the year. The Initial Holdings Report and Annual Holdings Report, as applicable, will be delivered electronically, via the RYDEX.STARCOMPLIANCE.COM website. You will receive notification via email when the applicable report is due, including instructions on how to access the information and complete the report. You are NOT required to provide this list of securities if you are not currently affiliated with or employed by a Trust's investment adviser(s) or distributor. 2. Required Transaction Reports On a quarterly basis you must report any SECURITIES transactions, as well as any SECURITIES accounts established. You must submit your report to the Compliance Officer no later than 10 calendar days after the end of the calendar quarter in which the transaction to which the report relates was effected. Quarterly Personal Securities Transactions Reports will be made electronically, via the RYDEX.STARCOMPLIANCE.COM website. You will receive notification via email when the Quarterly Transaction Report is due, including instructions on how to access the information and complete the report. If you had no reportable transactions or did not open any SECURITIES accounts during the quarter, you are still required to submit a report. Please sign in the space provided and submit the report with no transactions listed. 3. What Securities are Covered Under Your Quarterly Reporting Obligation? You must report all transactions in SECURITIES that: (i) you directly or indirectly BENEFICIALLY OWN or (ii) because of the transaction, you acquire direct or indirect BENEFICIAL OWNERSHIP. The report must also contain any account you established in which any SECURITIES were held during the quarter. 4. Pre-Approval of IPOs and Private Placements You must obtain approval from the Compliance Officer before acquiring BENEFICIAL OWNERSHIP of any SECURITIES offered in connection with an IPO or a PRIVATE PLACEMENT. 5. What Securities and Transactions May Be Excluded from Your Report? You are not required to detail or list the following SECURITIES or transactions on your report: a. PURCHASES OR SALES effected for any account over which you have no direct or indirect influence or CONTROL. b. Purchases you made solely with the dividend proceeds received in a dividend reinvestment plan or that are part of an automatic payroll deduction plan or other similar type of plan, where you purchase SECURITIES issued by your employer. c. Purchases arising from the exercise of rights issued by an issuer PRO RATA to all holders of a class of its SECURITIES, as long as you acquired these rights from the issuer, and sales of such rights so acquired. d. Purchases of SECURITIES issued by the U.S. Government or its agencies, bankers' acceptances, bank certificates of deposit, commercial paper, high quality short-term debt instruments, including repurchase agreements, and registered open-end mutual funds, other than REPORTABLE funds. e. PURCHASES OR SALES which are non-volitional on your part, including PURCHASES OR SALES upon exercise of puts or calls written by you and sales from a margin account to a BONA FIDE margin call. You may include a statement in your report that the report shall not be construed as your admission that you have any direct or indirect BENEFICIAL OWNERSHIP in the SECURITY included in the report. - -------------------------------------------------------------------------------- Page 6 of 10 Code of Ethics 1204 (2) Procedure Number: IC02.2.2 - -------------------------------------------------------------------------------- PART C ACCESS PERSONS GENERAL OBLIGATIONS 1. Thirty-Day Prohibition on Selling Securities - You cannot sell a SECURITY within 30 calendar days of acquiring that SECURITY. 2. Providing a List of Securities - You must provide the Compliance Officer with a complete listing of all securities you BENEFICIALLY OWN as of December 31 of the previous year. Each following year, you must submit a revised list to the Compliance Officer showing the SECURITIES you BENEFICIALLY OWN as of December 31. You must submit the initial listing within 10 calendar days of the date you first become an ACCESS PERSON, and each update no later than 30 calendar days after the start of the year. The Initial Holdings Report and Annual Holdings Report, as applicable, will be delivered electronically, via the RYDEX.STARCOMPLIANCE.COM website. You will receive notification via email when the applicable report is due, including instructions on how to access the information and complete the report. You are NOT required to provide this list of securities if you are not currently affiliated with or employed by a Trust's investment adviser(s) or distributor. 3. Required Transaction Reports - On a quarterly basis you must report transactions in SECURITIES, as well as any SECURITIES accounts established. You must submit your report to the Compliance Officer no later than 10 calendar days after the end of the calendar quarter in which the transaction to which the report relates was effected. Quarterly Personal Securities Transactions Reports will be made electronically, via the RYDEX.STARCOMPLIANCE.COM website. You will receive notification via email when the Quarterly Transaction Report is due, including instructions on how to access the information and complete the report. If you had no reportable transactions or did not open any SECURITIES accounts during the quarter, you are still required to submit a report. Please sign in the space provided and submit the report with no transactions listed. 4. What Securities are Covered Under Your Quarterly Reporting Obligation? - You must report all transactions in SECURITIES that: (i) you directly or indirectly BENEFICIALLY OWN or (ii) because of the transaction, you acquire direct or indirect BENEFICIAL OWNERSHIP. The report must contain any account you established in which any SECURITIES were held during the quarter. 5. Pre-Approval of IPOs and Private Placements - You must obtain approval from the Compliance Officer before acquiring BENEFICIAL OWNERSHIP of any SECURITIES offered in connection with an IPO or a PRIVATE PLACEMENT. 6. What Securities and Transactions May Be Excluded from Your Report? - You are not required to detail or list the following SECURITIES or transactions on your report. a. PURCHASES OR SALES effected for any account over which you have no direct or indirect influence or CONTROL. b. Purchases you made solely with the dividend proceeds received in a dividend reinvestment plan or that are part of an automatic payroll deduction plan or other similar type of plan, where you purchase SECURITIES issued by your employer. c. Purchases arising from the exercise of rights issued by an issuer PRO RATA to all holders of a class of its SECURITIES, as long as you acquired these rights from the issuer, and sales of such rights so acquired. d. Purchases of SECURITIES issued by the U.S. Government or its agencies, bankers' acceptances, bank certificates of deposit, commercial paper, high quality short-term debt instruments, including repurchase agreements, and registered open-end mutual funds, other than REPORTABLE funds. e. PURCHASES OR SALES which are non-volitional on your part, including PURCHASES OR SALES upon exercise of puts or calls written by you and sales from a margin account to a BONA FIDE margin call. You may include a statement in your report that the report shall not be construed as your admission that you have any direct or indirect BENEFICIAL OWNERSHIP in the SECURITY included in the report. 7. Seven-Day Blackout Period on Personal Securities Transactions - You cannot PURCHASE OR SELL, directly or indirectly, any SECURITY in which you had (or by reason of such transaction acquire) any BENEFICIAL OWNERSHIP at any time within seven calendar days before or after the time that the same (or a related) SECURITY IS BEING PURCHASED OR SOLD by any Rydex Fund. This provision will only apply if you obtain specific information regarding the PURCHASE OR SALE of a SECURITY by a Rydex Fund. 7.1. Exception to Blackout Period - The seven-day blackout period does not apply to the PURCHASE OR SALE of any SECURITY (i) of a company with a market capitalization in excess of $500 million, (ii) included in either the S&P 500 Composite Index or the NASDAQ 100 Index, and (iii) made in dollar amounts less than $25,000. - -------------------------------------------------------------------------------- Page 7of 10 Code of Ethics 1204 (2) Procedure Number: IC02.2.2 - -------------------------------------------------------------------------------- PART D NATURAL CONTROL PERSONS GENERAL OBLIGATIONS. 1. Providing a List of Securities - You must provide the Compliance Officer with a complete listing of all SECURITIES you BENEFICIALLY OWN as of December 31 of the previous year. Each following year, you must submit a revised list to the Compliance Officer showing the SECURITIES you BENEFICIALLY OWN as of December 31. You must submit the initial listing within 10 calendar days of the date you first become a natural CONTROL person, and each update no later than 30 calendar days after the start of the year. The Initial Holdings Report and Annual Holdings Report, as applicable, will be delivered electronically, via the RYDEX.STARCOMPLIANCE.COM website. You will receive notification via email when the applicable report is due, including instructions on how to access the information and complete the report. You are NOT required to provide this list of securities if you are not currently affiliated with or employed by the Trusts' investment adviser(s) or distributor. 2. Required Transaction Reports - On a quarterly basis you must report any SECURITIES transactions, as well as any SECURITIES accounts established. You must submit your report to the Compliance Officer no later than 10 calendar days after the end of the calendar quarter in which the transaction to which the report relates was effected. Quarterly Personal Securities Transactions Reports will be made electronically, via the RYDEX.STARCOMPLIANCE.COM website. You will receive notification via email when the Quarterly Transaction Report is due, including instructions on how to access the information and complete the report. If you had no reportable transactions or did not open any SECURITIES accounts during the quarter, you are still required to submit a report. Please sign in the space provided and submit the report with no transactions listed. 3. What Securities are Covered Under Your Quarterly Obligation? - You must report all transactions in SECURITIES that: (i) you directly or indirectly BENEFICIALLY OWN or (ii) because of the transaction, you acquire direct or indirect BENEFICIAL OWNERSHIP. The report must also include any account you established in which SECURITIES were held during the quarter. 4. Pre-Approval of IPOs and Private Placements - You must obtain approval from the Compliance Officer before acquiring BENEFICIAL OWNERSHIP of any SECURITIES offered in connection with an IPO or a PRIVATE PLACEMENT. 5. What Securities and Transactions are Excluded from Your Reporting Obligation? - - You are not required to detail or list the following SECURITIES or transactions on your report: |X| PURCHASES OR SALES effected for any account over which you have no direct or indirect influence or CONTROL. |X| Purchases you made solely with the dividend proceeds received in a dividend reinvestment plan or that are part of an automatic payroll deduction plan, where you purchase SECURITIES issued by your employer. |X| Purchases arising from the exercise of rights issued by an issuer PRO RATA to all holders of a class of its SECURITIES, as long as you acquired these rights from the issuer, and sales of such rights so acquired. |X| Purchases of SECURITIES issued by the U.S. Government or its agencies, bankers' acceptances, bank certificates of deposit, commercial paper, high quality short-term debt instruments, including repurchase agreements, and registered open-end mutual funds, other than REPORTABLE funds. |X| PURCHASES OR SALES which are non-volitional on your part, including PURCHASES OR SALES upon exercise of puts or calls written by you and sales from a margin account to a BONA FIDE margin call. You may include a statement in your report that the report shall not be construed as your admission that you have any direct or indirect BENEFICIAL OWNERSHIP in the SECURITY included in the report. - -------------------------------------------------------------------------------- Page 8 of 10 Code of Ethics 1204 (2) Procedure Number: IC02.2.2 - -------------------------------------------------------------------------------- APPENDIX A DEFINITIONS ACCESS PERSON includes: (a) any trustee, director or officer and (b) any supervised person who has access to nonpublic information regarding any clients' purchase or sale of securities or the portfolio holdings of any reportable fund, E.G. portfolio management and fund accounting personnel, is involved in making securities recommendations to clients, or has access to such recommendations that are nonpublic. BENEFICIAL OWNERSHIP means the same as under Section 16 of the Securities Exchange Act of 1934 and Rule 16a-1(a)(2) thereunder. You should generally consider yourself the beneficial owner of any SECURITIES in which you have a direct or indirect pecuniary interest. In addition, you should consider yourself the beneficial owner of SECURITIES held by your spouse, your minor children, a relative who shares your home, or other persons by reason of any contract, arrangement, understanding or relationship that provides you with sole or shared voting or investment power. CONTROL means the same as that under Section 2(a)(9) of the 1940 Act. Section 2(a)(9) provides that "control" means the power to exercise a controlling influence over the management or policies of a company, unless such power is solely the result of an official position with such company. Ownership of 25% or more of a company's outstanding voting SECURITIES is presumed to give the holder of such SECURITIES control over the company. This presumption may be countered by the facts and circumstances of a given situation. INDEPENDENT TRUSTEE means a trustee of a Trust who is not an "interested person" of the Trust within the meaning of Section 2(a)(19) of the 1940 Act. As of February 1, 2005, the Trusts' INDEPENDENT TRUSTEES are: Corey A. Colehour J. Kenneth Dalton Roger Somers John O. Demaret Patrick T. McCarville INITIAL PUBLIC OFFERING ("IPO") means an offering of SECURITIES registered under the Securities Act of 1933, the issuer of which, immediately before registration, was not subject to the reporting requirements of Section 13 or Section 15(d) of the Securities Exchange Act of 1934. INTERESTED TRUSTEE means a trustee of a Trust who is an "interested person" of the Trust within the meaning of Section 2(a)(19) of the 1940 Act. As of February 1, 2005, the Trusts' only INTERESTED trustee is: Carl Verboncoeur PRIVATE PLACEMENT means an offering that is exempt from registration under the Securities Act of 1933 pursuant to Section 4(2) or Section 4(6) in the Securities Act of 1933. PURCHASE OR SALE OF A SECURITY includes, among other things, the writing of an option to purchase or sell a SECURITY. REPORTABLE FUND means any fund for which you serve as investment adviser, any fund whose investment adviser or principal underwriter controls you, is controlled by you, or is under common control with you, or any closed-end fund regardless of affiliation. For purposes of this Code definition, control has the same meaning as it does above. SECURITY means the same as that set forth in Section 2(a)(36) of the 1940 Act, except that it does not include securities issued by the U.S. Government or its agencies, bankers' acceptances, bank certificates of deposit, commercial paper, shares of registered open-end mutual funds other than REPORTABLE FUNDS, and high quality short-term debt instruments, including repurchase agreements. A SECURITY does not include index futures or other commodities.For purposes of this Code, a security does include futures, options, options on futures, and other types of derivatives. A SECURITY HELD OR TO BE ACQUIRED by the Trust (or any Fund) means any SECURITY which, within the most recent 15 days, (i) is or has been held by the Trust (or any Fund) or (ii) is being or has been considered by the Trust's adviser or sub-adviser for purchase by the Trust (or any Fund), and any option to purchase or sell, and any SECURITY convertible into or exchangeable for any SECURITY. A SECURITY is BEING PURCHASED OR SOLD by the Trust from the time a PURCHASE OR SALE program has been communicated to the person who places buy and sell orders for the Trust until the program has been fully completed or terminated. COMPLIANCE OFFICER means the chief compliance officer of Rydex Dynamic Funds, Rydex Series Funds, Rydex Variable Trust, and Rydex ETF Trust pursuant to Rule 38a-1 under the 1940 Act and the chief compliance officer of PADCO Advisors, Inc. and PADCO Advisors II, Inc. pursuant to Rule 206(4)-7 under the Advisers Act, or any person designated - -------------------------------------------------------------------------------- Page 9 of 10 Code of Ethics 1204 (2) Procedure Number: IC02.2.2 - -------------------------------------------------------------------------------- by such chief compliance officer to act in the chief compliance officer's absence. As of February 1, 2005, the Compliance Officer is: Joanna M. Haigney - -------------------------------------------------------------------------------- Page 10 of 10 EX-99.CERT 3 ex99certcv.txt VARIABLE TRUST AR 12-31-04 EX.-12(a)(2)(i) CERTIFICATIONS I, Carl G. Verboncoeur, certify that: 1. I have reviewed this report on Form N-CSR of Rydex Variable Trust; 2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; 3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations, changes in net assets, and cash flows (if the financial statements are required to include a statement of cash flows) of the registrant as of, and for, the periods presented in this report; 4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940) and internal control over financial reporting (as defined in Rule 30a-3(d) under the Investment Company Act of 1940) for the registrant and have: a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure and procedures, as of a date within 90 days prior to the filing date of this report based on such evaluation; and d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the second fiscal quarter of the period covered by this report that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and 5. The registrant's other certifying officer and I have disclosed to the registrant's auditors and the audit committee of the registrant's board of trustees: a) All significant deficiencies and material weaknesses in the design or operation of internal controls over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize, and report financial information; and b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting Date: March 8, 2005 S/ CARL G. VERBONCOEUR ---------------------- Carl G. Verboncoeur, President EX-99.CERT 4 ex99certnb.txt VARIABLE TRUST AR 12-31-04 EX.-12(a)(2)(ii) CERTIFICATIONS I, Nick Bonos, certify that: 1. I have reviewed this report on Form N-CSR of Rydex Variable Trust; 2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; 3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations, changes in net assets, and cash flows (if the financial statements are required to include a statement of cash flows) of the registrant as of, and for, the periods presented in this report; 4. The registrant's other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940) and internal control over financial reporting (as defined in Rule 30a-3(d) under the Investment Company Act of 1940) for the registrant and have: a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure and procedures, as of a date within 90 days prior to the filing date of this report based on such evaluation; and d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the second fiscal quarter of the period covered by this report that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and 5. The registrant's other certifying officer and I have disclosed to the registrant's auditors and the audit committee of the registrant's board of trustees: a) All significant deficiencies and material weaknesses in the design or operation of internal controls over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize, and report financial information; and b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting Date: March 8, 2005 /S/ NICK BONOS -------------- Nick Bonos, Vice President and Treasurer EX-99.906 5 ex99certcvb.txt VARIABLE TRUST AR 12-31-04 EX. 12(b)(i) CERTIFICATIONS I, Carl G. Verboncoeur, President of Rydex Variable Trust (the "Trust"), certify that: 1. The Form N-CSR of the Trust (the "Report") fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and 2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Trust. A signed original of this written statement required by Section 906 has been provided to the Trust and will be retained by the Trust and furnished to the Securities and Exchange Commission or its staff upon request. Dated: March 8, 2005 /S/CARL G. VERBONCOEUR ---------------------- Carl G. Verboncoeur, President EX-99.906 6 ex99certnbb.txt VARIABLE TRUST AR 12-31-04 EX. 12(b)(ii) CERTIFICATIONS I, Nick Bonos, Treasurer of Rydex Variable Trust (the "Trust"), certify that: 1. The Form N-CSR of the Trust (the "Report") fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and 2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Trust. A signed original of this written statement required by Section 906 has been provided to the Trust and will be retained by the Trust and furnished to the Securities and Exchange Commission or its staff upon request. Dated: March 8, 2005 /S/ NICK BONOS -------------- Nick Bonos, Vice President and Treasurer -----END PRIVACY-ENHANCED MESSAGE-----