N-CSR 1 b63113a1nvcsr.txt RYDEX ETF TRUST ================================================================================ 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 811-21261 ------------ Rydex ETF 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 ETF 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: October 31, 2006 ------------------ Date of reporting period: October 31, 2006 ------------------ 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. Section 3507. ================================================================================ ITEM 1. REPORTS TO STOCKHOLDERS. [Insert a copy of the report transmitted to stockholders pursuant to Rule 30e-1 under the Act (17 CFR 270.30e-1).] October 31, 2006 RYDEX ETF TRUST ANNUAL REPORT RYDEX S&P EQUAL WEIGHT ETF RYDEX RUSSELL TOP 50 ETF RYDEX S&P 500 PURE VALUE ETF RYDEX S&P 500 PURE GROWTH ETF RYDEX S&P MIDCAP 400 PURE VALUE ETF RYDEX S&P MIDCAP 400 PURE GROWTH ETF RYDEX S&P SMALLCAP 600 PURE VALUE ETF RYDEX S&P SMALLCAP 600 PURE GROWTH ETF [RYDEX INVESTMENTS LOGO] ANNUAL REPORT 1 TABLE OF CONTENTS -------------------------------------------------------------------------------- LETTER TO OUR SHAREHOLDERS.................................. 2 MANAGER'S ANALYSIS.......................................... 4 FEES & EXPENSES............................................. 20 PORTFOLIO SUMMARY........................................... 22 SCHEDULE OF INVESTMENTS..................................... 30 STATEMENTS OF ASSETS AND LIABILITIES........................ 72 STATEMENTS OF OPERATIONS.................................... 74 STATEMENTS OF CHANGES IN NET ASSETS......................... 76 FINANCIAL HIGHLIGHTS........................................ 81 NOTES TO FINANCIAL STATEMENTS............................... 85 INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM'S REPORT...... 93 SUPPLEMENTAL INFORMATION.................................... 94
ANNUAL REPORT 2 -------------------------------------------------------------------------------- DEAR SHAREHOLDER, Stocks rallied strongly for the 12-month period ended October 31, 2006. All of the major market averages with the exception of the Nasdaq 100 turned in strong double digit gains, with the benchmark S&P 500 Index(R) rising +14.6% and its counterpart the S&P Equal Weight Index rising 17.9% during the period. Overall, the market was characterized by three distinct phases and a number of rotational trends. In the first phase, many of the performance trends that had been evident for a number of years remained in place. While the major market averages actually treaded water for much of this period, investors showed a healthy appetite for risk as shown by the continued strong gains in small-cap. Although interest rates rose throughout the period, they seemed to pose little threat to stock prices. Phase two was ushered in by an inflation scare characterized by high and rising inflation, soaring energy prices and the prospect of additional interest rate hikes by the Federal Reserve (Fed). The price of oil soared from $57.67/barrel in mid-February to a peak of $77.03/barrel in mid-July. During this mini-cycle, investors pulled back from risk in all of its various forms. Small-cap, growth, and technology stocks fell in a rapid and dramatic sell-off. From early May through mid-June alone, the small-cap Russell 2000(R) Index fell nearly 14%. Interest rates rose as well, with the yield on the benchmark 10-year U.S. Treasury Note rising from a low of 4.32% in January to 5.24% by late June. Almost as quickly as it began, the inflation scare that characterized phase two evaporated as energy prices retreated from their speculative highs. Phase three began as economic growth showed unmistakable signs of slowing, relieving pressure on the Federal Reserve (Fed) to continue raising rates. Indeed, during the summer, the Fed paused in its two-year string of consecutive rate increases. Despite the seemingly safer risk environment, the May to June sell-off left investors with a diminished appetite for risk as large-cap stocks continued to outperform small-caps and value outperformed growth Clearly the equity markets continue to key off interest rates and, as of this writing, stocks have continued to rally with the expectation that interest rates are headed lower. As long as a benign interest rate outlook remains in place, the pressure on stock prices will likely be to the upside. ANNUAL REPORT 3 -------------------------------------------------------------------------------- Rydex Investments is extremely pleased with the asset growth and fund additions over the past fiscal year ended October 31, 2006. Complementing the Rydex S&P Equal Weight ETF and the Rydex Russell Top 50 ETF, the Rydex ETF Trust now offers six style-box funds based on the S&P Pure Style methodology. These are innovative benchmarks that offer an alternative to the traditional cap-weighted benchmark. We appreciate the trust you have placed in our firm by investing with us. Sincerely, /s/ DAVID C. REILLY, CFA David C. Reilly, CFA Director of Investment Strategy -- Rydex Investments ANNUAL REPORT 4 RYDEX S&P EQUAL WEIGHT ETF MANAGER'S ANALYSIS -------------------------------------------------------------------------------- For the year ended October 31, 2006, the Rydex S&P Equal Weight ETF, benchmarked to the S&P Equal Weight Total Return Index, returned 17.42%, outperforming the S&P 500 Total Return by 1.08%. Since inception in April 2003, the Rydex S&P Equal Weight ETF, has outperformed the S&P 500 Total Return by 5.36%, returning 19.84%. CUMULATIVE FUND PERFORMANCE: APRIL 24, 2003 - OCTOBER 31, 2006 (TO COME)
RYDEX S&P EQUAL WEIGHT S&P EQUAL WEIGHT TOTAL ETF S&P 500 TOTAL RETURN INDEX RETURN INDEX ---------------------- -------------------------- ---------------------- 4/24/2003 10000 10000 10000 9845 9862 9845 10041 10039 10041 10113 10072 10113 10113 10063 10114 10091 10058 10092 10280 10210 10282 10300 10171 10303 10397 10257 10399 10341 10206 10343 10240 10104 10242 10405 10251 10408 10566 10380 10569 10566 10350 10569 10565 10320 10568 10687 10402 10691 10723 10377 10727 10417 10119 10421 10402 10108 10406 10457 10149 10461 10582 10242 10586 10646 10257 10651 10878 10458 10884 10899 10478 10905 10882 10440 10888 11089 10594 11096 11146 10631 11152 11141 10682 11148 11363 10846 11371 11455 10890 11462 11410 10864 11418 11217 10734 11225 11309 10832 11317 11492 10975 11501 11522 10987 11531 11359 10878 11368 11593 11122 11602 11588 11132 11597 11576 11116 11586 11409 10946 11418 11390 10957 11399 11185 10803 11195 11199 10823 11209 11137 10733 11146 11260 10853 11269 11176 10748 11186 11168 10729 11179 11229 10817 11239 11374 10943 11384 11287 10854 11298 11504 11060 11515 11601 11102 11613 11573 11041 11585 11386 10892 11398 11474 10997 11486 11544 11060 11555 11471 11022 11496 11389 10952 11399 11232 10817 11241 11367 10945 11377 11218 10785 11228 11358 10888 11368 11361 10893 11372 7/24/2003 11313 10816 11323 11498 11004 11509 11503 10981 11515 11427 10902 11438 11387 10884 11398 11456 10918 11468 11368 10806 11380 11363 10835 11375 11163 10645 11174 11158 10664 11169 11225 10742 11236 11261 10781 11273 11311 10816 11323 11440 10924 11452 11422 10859 11434 11518 10930 11530 11517 10934 11531 11656 11034 11671 11737 11063 11751 11749 11042 11765 11843 11075 11859 11714 10962 11730 11692 10969 11708 11728 11003 11743 11767 11005 11784 11873 11073 11890 11959 11130 11976 12124 11285 12143 12153 11336 12174 12158 11355 12178 12086 11283 12105 12215 11397 12235 12100 11303 12119 11893 11169 11909 11969 11233 11988 12009 11257 12028 11966 11215 11986 12145 11376 12166 12113 11339 12133 12263 11490 12285 12250 11454 12272 12090 11305 12112 12170 11373 12193 11948 11156 11970 11834 11091 11857 11731 11022 11754 11847 11130 11871 11751 11013 11773 11988 11260 12012 12035 11283 12059 12191 11390 12215 12257 11439 12281 12312 11494 12341 12277 11438 12301 12356 11493 12381 12352 11486 12377 12463 11567 12488 12512 11613 12538 12466 11585 12491 12503 11622 12529 12352 11503 12378 12403 11577 12429 12418 11577 12444 12240 11405 12266 12247 11443 12273 10/24/2003 12208 11389 12235 12288 11413 12315 12469 11587 12496 12527 11604 12555 12541 11594 12570 12576 11636 12605 12697 11728 12725 12643 11664 12672 12645 11650 12673 12722 11720 12752 12708 11669 12737 12590 11602 12620 12577 11596 12607 12748 11734 12779 12770 11732 12801 12648 11645 12678 12525 11570 12556 12399 11466 12429 12472 11559 12502 12384 11462 12415 12442 11480 12473 12676 11667 12708 12748 11688 12781 12827 11740 12860 12842 11738 12875 13000 11871 13035 12950 11832 12984 12928 11814 12962 12953 11870 12988 12843 11779 12877 12933 11867 12969 12811 11765 12846 12747 11755 12782 12941 11891 12977 12987 11924 13023 12883 11857 12918 12937 11935 12974 12972 11952 13009 13168 12094 13206 13166 12089 13205 13247 12137 13286 13307 12171 13346 13285 12149 13324 13314 12169 13354 13483 12325 13524 13494 12328 13535 13502 12353 13543 13449 12316 13491 13618 12469 13660 13642 12486 13684 13665 12518 13707 13766 12581 13809 13684 12469 13727 13753 12529 13796 13685 12463 13729 13816 12567 13859 13846 12584 13891 13977 12670 14022 14011 12659 14057 14085 12758 14131 14012 12717 14058 1/23/2004 13978 12691 14024 14106 12844 14148 13987 12719 14033 13801 12548 13847 13812 12613 13858 13825 12580 13872 13852 12626 13900 13854 12635 13902 13694 12531 13741 13737 12555 13784 13955 12713 14004 13952 12682 14001 14032 12746 14081 14198 12887 14248 14147 12825 14197 14047 12756 14097 14210 12887 14260 14159 12825 14210 14084 12773 14135 14013 12740 14064 13918 12706 13969 13886 12684 13938 13972 12737 14024 14035 12755 14087 14099 12755 14151 14269 12878 14323 14200 12802 14253 14218 12827 14271 14276 12870 14330 14312 12893 14368 14175 12786 14228 14052 12712 14106 13821 12527 13873 13617 12340 13668 13825 12494 13877 13599 12315 13651 13659 12385 13711 13869 12531 13923 13843 12515 13897 13722 12376 13777 13525 12215 13580 13515 12199 13570 13478 12170 13534 13722 12369 13779 13720 12357 13777 13904 12520 13961 13980 12570 14038 14003 12563 14061 14078 12629 14137 14225 12738 14285 14320 12835 14381 14295 12812 14355 14218 12728 14278 14200 12714 14261 14255 12780 14316 14029 12605 14090 13986 12591 14046 13975 12599 14036 14060 12663 14122 14067 12677 14129 13857 12480 13918 13950 12547 14034 14202 12724 14265 4/23/2004 14178 12732 14241 14095 12675 14158 14118 12704 14181 13906 12531 13968 13733 12439 13795 13646 12365 13707 13759 12479 13821 13792 12502 13855 13835 12526 13925 13705 12443 13773 13466 12273 13528 13282 12144 13342 13417 12239 13478 13422 12264 13484 13447 12255 13509 13439 12248 13502 13264 12120 13329 13386 12203 13449 13375 12173 13437 13351 12179 13414 13433 12228 13496 13509 12249 13573 13752 12446 13818 13796 12469 13862 13869 12542 13936 13896 12535 13963 13899 12541 13967 13942 12587 14010 13804 12494 13872 13891 12560 13959 14134 12761 14204 14155 12782 14226 13992 12661 14062 14055 12719 14126 13887 12598 13957 14012 12673 14083 14034 12691 14105 14020 12674 14091 14056 12707 14127 14015 12654 14087 14113 12701 14185 14269 12809 14342 14231 12773 14303 14248 12704 14322 14193 12694 14266 14232 12726 14306 14320 12779 14395 14126 12647 14207 14079 12608 14153 13921 12505 13993 13952 12532 14025 13790 12429 13862 13846 12471 13919 13843 12489 13916 13847 12498 13921 13807 12458 13880 13803 12404 13876 13717 12345 13791 13717 12339 13791 13835 12426 13909 13616 12262 13689 13609 12295 13682 7/23/2004 13481 12176 13554 13404 12152 13477 13531 12273 13605 13532 12282 13605 13655 12341 13729 13686 12356 13761 13723 12411 13799 13592 12333 13667 13562 12324 13637 13337 12123 13411 13104 11936 13172 13134 11950 13199 13333 12105 13401 13272 12076 13338 13111 11935 13173 13110 11954 13172 13323 12118 13390 13366 12145 13435 13554 12299 13630 13494 12255 13570 13607 12335 13684 13564 12306 13640 13565 12312 13640 13679 12411 13756 13682 12412 13758 13713 12444 13788 13602 12348 13671 13665 12406 13732 13708 12429 13777 13821 12568 13945 13821 12516 13890 13924 12602 13998 13827 12548 13903 13885 12572 13959 13966 12634 14041 14024 12659 14099 14035 12688 14111 13931 12598 14006 14006 12634 14082 14062 12691 14139 14009 12619 14086 14115 12699 14193 13934 12523 14012 13882 12467 13959 13899 12486 13976 13792 12412 13868 13875 12488 13953 13937 12543 14016 14021 12540 14099 14242 12731 14323 14307 12773 14389 14277 12766 14358 14381 12855 14462 14236 12728 14317 14109 12632 14190 14118 12657 14200 14068 12629 14149 13958 12538 14037 13852 12421 13932 13923 12476 14004 13975 12542 14055 13830 12420 13910 13853 12426 13933 13962 12459 14043 10/22/2004 13851 12338 13932 13866 12327 13947 14075 12511 14158 14271 12674 14356 14292 12701 14377 14352 12732 14437 14373 12735 14459 14358 12736 14444 14521 12881 14609 14772 13090 14861 14858 13141 14949 14839 13127 14930 14846 13123 14937 14854 13113 14947 15006 13232 15098 15145 13354 15238 15154 13351 15253 15059 13258 15153 15168 13333 15262 15197 13351 15292 15018 13202 15112 15137 13280 15231 15145 13277 15239 15249 13332 15345 15282 13344 15379 15237 13300 15334 15180 13247 15277 15396 13449 15495 15350 13438 15449 15378 13447 15477 15368 13437 15468 15174 13289 15273 15217 13357 15316 15293 13430 15393 15304 13416 15405 15439 13538 15541 15525 13591 15628 15591 13619 15695 15520 13591 15623 15453 13490 15557 15441 13495 15545 15581 13617 15687 15633 13668 15738 15637 13675 15743 15560 13616 15666 15692 13713 15800 15717 13714 15824 15741 13716 15848 15731 13697 15839 15538 13587 15645 15302 13430 15407 15191 13382 15295 15232 13432 15337 15204 13413 15310 15250 13459 15356 15147 13378 15252 15217 13433 15322 15128 13317 15233 15246 13397 15353 15399 13526 15507 15261 13399 15368 15145 13295 15251 15048 13210 15154 1/24/2005 14966 13163 15071 14996 13216 15103 15100 13280 15207 15144 13287 15252 15090 13252 15198 15257 13364 15367 15364 13456 15475 15424 13501 15536 15394 13467 15505 15578 13616 15691 15550 13602 15663 15565 13611 15679 15398 13498 15509 15450 13555 15562 15607 13652 15719 15601 13663 15714 15662 13709 15776 15669 13713 15783 15534 13605 15647 15531 13615 15645 15292 13418 15404 15375 13494 15488 15516 13605 15630 15674 13733 15791 15578 13645 15694 15690 13722 15807 15674 13723 15791 15693 13728 15810 15852 13860 15971 15917 13897 16037 15820 13832 15940 15659 13692 15776 15668 13718 15786 15578 13618 15696 15697 13695 15817 15575 13592 15694 15424 13483 15541 15468 13508 15585 15442 13501 15559 15402 13435 15520 15265 13298 15382 15258 13308 15374 15268 13295 15385 15269 13327 15387 15127 13229 15239 15341 13413 15459 15373 13404 15491 15299 13316 15412 15321 13354 15435 15376 13414 15491 15413 13448 15529 15509 13529 15625 15377 13416 15493 15370 13416 15486 15452 13491 15568 15236 13334 15350 15033 13201 15145 14727 12980 14837 14789 13018 14900 14926 13096 15039 14718 12923 14829 15011 13178 15125 4/22/2005 14880 13090 14993 15024 13203 15139 14873 13085 14986 14915 13140 15030 14734 12994 14845 14898 13149 15012 14968 13210 15083 14964 13198 15079 15183 13366 15301 15129 13332 15246 15143 13318 15260 15256 13403 15374 15100 13260 15218 15159 13323 15278 14990 13190 15107 14911 13132 15028 15082 13265 15201 15204 13359 15325 15408 13496 15530 15477 13559 15600 15488 13538 15612 15544 13591 15669 15536 13593 15660 15472 13548 15596 15589 13636 15715 15615 13651 15742 15568 13568 15694 15706 13695 15834 15751 13718 15879 15658 13624 15786 15682 13641 15811 15682 13640 15811 15659 13612 15784 15746 13684 15872 15717 13652 15847 15784 13687 15915 15851 13722 15983 15883 13753 16015 15956 13803 16089 16031 13871 16166 16010 13862 16145 15989 13833 16124 15998 13837 16134 15844 13690 15978 15709 13585 15842 15685 13575 15818 15875 13702 16010 15858 13684 15993 15786 13587 15921 15839 13624 15975 15984 13744 16122 15880 13633 16016 15925 13667 16062 16120 13827 16260 16245 13914 16387 16271 13946 16413 16283 13960 16413 16316 13997 16459 16333 14013 16476 16294 13935 16437 16426 14029 16571 16542 14097 16688 16400 14004 16545 7/22/2005 16513 14080 16660 16438 14027 16584 16500 14052 16647 16566 14118 16714 16678 14201 16827 16580 14092 16728 16587 14106 16736 16690 14206 16840 16695 14219 16845 16552 14115 16701 16389 14007 16536 16342 13970 16489 16427 14065 16575 16419 14045 16568 16534 14146 16684 16452 14061 16601 16522 14103 16672 16302 13937 16450 16321 13951 16469 16280 13938 16428 16315 13947 16464 16334 13970 16484 16289 13923 16453 16221 13832 16370 16275 13865 16425 16171 13781 16320 16265 13865 16415 16208 13823 16357 16399 13964 16550 16417 13978 16569 16359 13938 16511 16552 14114 16706 16607 14150 16763 16527 14097 16682 16679 14209 16836 16700 14199 16858 16590 14096 16746 16528 14050 16684 16510 14057 16666 16616 14174 16774 16485 14095 16640 16338 13984 16493 16153 13857 16305 16213 13911 16367 16272 13919 16427 16274 13922 16429 16286 13923 16441 16318 13940 16473 16453 14064 16611 16532 14077 16690 16538 14053 16697 16375 13914 16532 16085 13712 16239 15976 13656 16129 16037 13707 16192 15854 13608 16007 15776 13581 15927 15645 13500 15795 15633 13491 15782 15781 13602 15933 15851 13643 16004 15684 13506 15835 15886 13709 16040 15696 13504 15847 15748 13524 15901 10/24/2005 16020 13751 16175 15957 13719 16113 15886 13660 16041 15672 13519 15825 15933 13744 16090 16114 13842 16272 16080 13793 16238 16275 13933 16436 16334 13997 16495 16340 13999 16502 16382 14031 16545 16291 13989 16453 16330 14013 16493 16481 14134 16646 16519 14177 16685 16504 14167 16670 16434 14114 16599 16465 14143 16631 16674 14276 16842 16734 14341 16971 16821 14416 16992 16907 14490 17080 16965 14542 17138 16994 14572 17169 16841 14450 17014 16866 14453 17040 16813 14366 16986 17060 14540 17236 17078 14545 17255 17013 14511 17190 17048 14530 17225 16969 14460 17145 16970 14444 17180 17046 14485 17225 17065 14497 17245 17150 14579 17330 17150 14641 17406 17224 14621 17363 17241 14580 17334 16997 14495 17177 17004 14491 17185 17075 14528 17258 17163 14593 17346 17199 14601 17363 17025 14462 17207 17063 14483 17246 17025 14441 17207 16934 14371 17115 17186 14607 17371 17295 14663 17482 17305 14664 17492 17479 14805 17669 17576 14859 17768 17585 14855 17777 17625 14908 17818 17514 14815 17705 17532 14833 17725 17452 14779 17644 17432 14723 17624 17568 14805 17762 17289 14534 17481 17339 14561 17532 1/24/2006 17454 14596 17648 17420 14571 17614 17560 14677 17755 17685 14792 17883 17689 14810 17888 17623 14751 17821 17658 14780 17856 17504 14650 17699 17405 14573 17599 17466 14584 17662 17310 14467 17503 17434 14598 17629 17401 14577 17595 17425 14615 17620 17366 14569 17561 17539 14717 17736 17605 14772 17802 17754 14882 17954 17730 14857 17930 17670 14808 17869 17825 14921 18026 17774 14869 17974 17789 14890 17990 17853 14946 18055 17657 14791 17856 17823 14917 18025 17797 14893 18000 17758 14872 17960 17601 14768 17801 17525 14742 17723 17556 14776 17752 17486 14704 17685 17628 14812 17829 17671 14846 17874 17876 15000 18082 17992 15065 18200 18026 15092 18235 18075 15115 18285 18018 15090 18227 17902 14999 18111 18003 15090 18212 17983 15051 18193 18022 15066 18233 18005 15050 18216 17927 14953 18138 18094 15068 18305 18039 15038 18250 17974 14975 18184 17993 15010 18204 18085 15105 18298 18186 15172 18400 18168 15146 18382 17980 14990 18192 17973 15003 18186 17804 14890 18015 17834 14908 18045 17856 14919 18068 17818 14875 18030 18145 15134 18361 18208 15162 18425 18242 15180 18459 18212 15178 18430 4/24/2006 18163 15141 18380 18087 15068 18304 18138 15112 18356 18151 15166 18369 18159 15176 18378 18087 15114 18305 18193 15206 18416 18158 15147 18378 18237 15199 18457 18418 15356 18641 18434 15344 18657 18413 15350 18638 18407 15330 18632 18165 15137 18386 17942 14967 18161 17946 15006 18165 17876 14978 18095 17584 14730 17799 17475 14632 17687 17572 14693 17785 17473 14635 17686 17386 14572 17598 17394 14595 17605 17591 14763 17806 17710 14850 17927 17446 14615 17659 17629 14740 17846 17854 14921 18073 17861 14950 18081 17522 14685 17738 17471 14669 17686 17376 14582 17590 17382 14604 17596 17333 14539 17547 17066 14354 17276 16871 14211 17078 16950 14285 17159 17363 14589 17579 17238 14535 17505 17114 14402 17329 17092 14403 17307 17291 14543 17508 17199 14470 17415 17208 14457 17424 17282 14528 17500 17088 14396 17303 17163 14478 17379 17562 14790 17783 17585 14760 17807 17687 14877 17910 17507 14771 17729 17530 14812 17752 17391 14712 17612 17398 14734 17619 17466 14795 17688 17276 14635 17496 17029 14445 17245 16913 14374 17129 16887 14355 17103 16885 14382 17101 17204 14651 17425 17004 14527 17222 16826 14424 17043 7/24/2006 17119 14664 17339 17252 14757 17474 17234 14751 17455 17113 14693 17333 17332 14872 17556 17322 14851 17546 17221 14784 17441 17338 14875 17561 17417 14899 17641 17399 14889 17624 17343 14848 17567 17263 14799 17486 17162 14739 17384 17271 14810 17495 17173 14753 17397 17203 14771 17428 17482 14974 17711 17690 15093 17923 17727 15117 17960 17755 15174 17989 17655 15118 17887 17673 15133 17906 17569 15066 17800 17586 15102 17818 17571 15093 17804 17688 15171 17923 17761 15202 17997 17781 15209 18018 17808 15204 18045 17889 15288 18128 17928 15315 18168 17732 15166 17969 17643 15094 17878 17745 15151 17983 17766 15159 18005 18011 15317 18254 18101 15380 18345 18069 15360 18314 18124 15401 18370 18127 15417 18374 18072 15383 18319 18171 15464 18419 18057 15384 18304 17987 15346 18233 18172 15481 18422 18285 15598 18536 18293 15604 18544 18324 15634 18576 18258 15596 18509 18201 15543 18453 18206 15576 18460 18441 15767 18698 18525 15807 18782 18459 15764 18717 18504 15777 18762 18554 15810 18812 18514 15771 18773 18710 15921 18972 18744 15954 19006 18846 15994 19111 18749 15936 19012 18749 15960 19012 18753 15972 19016 18719 15991 18982 18831 16090 19096 18860 16094 19125 18920 16151 19186 19036 16231 19304 18877 16096 19143 18930 16104 19198 10/31/2006 18924 16104 19192
AVERAGE ANNUAL TOTAL RETURNS FOR THE PERIOD ENDED OCTOBER 31, 2006 ---------------------------------------------------------------------------- SINCE INCEPTION ONE YEAR THREE YEAR (04/24/03) -------- ---------- --------------- RYDEX S&P EQUAL WEIGHT ETF........ 17.42% 14.58% 19.84% S&P EQUAL WEIGHT TOTAL RETURN INDEX.................... 17.94% 15.04% 20.33% S&P 500 TOTAL RETURN INDEX........ 16.34% 11.44% 14.48%
The returns presented above do not reflect the effect of taxes. Index returns represent total returns. Past performance is no guarantee of future results. The S&P Equal Weight Total Return Index and the S&P 500 Total Return Index are unmanaged stock indices and, unlike the Fund, have no management fees or other operating expense to reduce its reported returns. Returns are historical and include changes in principal and reinvested dividends and capital gains. ANNUAL REPORT 5 -------------------------------------------------------------------------------- Rydex S&P Equal Weight ETF --------------------------------------------------------------------------------
TOP 10 HOLDINGS* ------------------------------------------------------------------------------ DESCRIPTION % OF NET ASSETS ------------------------------------------------------------------------------ AMERICAN POWER CONVERSION CORP. 0.28% ALLEGHENY TECHNOLOGIES, INC. 0.25% NUCOR CORP. 0.24% HARMAN INTERNATIONAL INDUSTRIES, INC. 0.24% REALOGY CORP. 0.23% ALLIED WASTE INDUSTRIES, INC. 0.23% NORFOLK SOUTHERN CORP. 0.23% NVIDIA CORP. 0.23% PHELPS DODGE CORP. 0.23% AMAZON.COM, INC. 0.23% ------------------------------------------------------------------------------
SECTOR ALLOCATIONS* (PIE CHART) Financials 17.47 Consumer Discretionary 17.53 Information Technology 15.40 Health Care 10.73 Industrials 10.60 Consumer Staples 7.61 Utilities 6.32 Energy 6.18 Materials 6.19 Telecommunication Services 1.97
* The Fund's Top 10 Holdings are expressed as a percentage of net assets and the Sector Allocation is expressed as a percentage of the Fund's investments market value. These percentages may change over time. ANNUAL REPORT 6 RYDEX RUSSELL TOP 50 ETF MANAGER'S ANALYSIS -------------------------------------------------------------------------------- For the period ended October 31, 2006, the Rydex Russell Top 50 ETF returned 16.18%. Since inception in May 2005 the Rydex Russell Top 50 ETF has returned 10.85%. CUMULATIVE FUND PERFORMANCE: MAY 4, 2005 - OCTOBER 31, 2006 (TOCOME
RUSSELL TOP 50 TOTAL S&P 100 TOTAL RETURN RYDEX RUSSELL TOP 50 ETF RETURN INDEX INDEX ------------------------ -------------------- -------------------- 5/4/2005 10000 10000 10000 9976 9976 9972 9952 9953 9958 10010 10010 10014 9905 9905 9905 9954 9954 9941 9870 9870 9853 9846 9846 9824 9933 9934 9911 9990 9991 9968 10078 10079 10067 10132 10133 10117 10115 10117 10107 10151 10152 10138 10163 10165 10141 10145 10146 10113 10200 10202 10167 10204 10206 10165 10117 10118 10088 10213 10215 10179 10222 10224 10186 10130 10132 10105 10133 10135 10110 10130 10132 10118 10107 10109 10099 10152 10155 10137 10127 10129 10125 10142 10144 10143 10151 10153 10156 10222 10176 10180 10253 10207 10202 10297 10251 10237 10291 10246 10229 10272 10226 10213 10260 10214 10213 10140 10095 10101 10062 10017 10018 10056 10012 10010 10136 10091 10093 10126 10081 10092 10011 9966 9989 10032 9987 10006 10112 10067 10086 10026 9982 10005 10039 9995 10014 10163 10118 10146 10206 10161 10202 10231 10186 10222 10252 10208 10245 10300 10255 10299 10308 10264 10309 10221 10176 10228 10272 10228 10287 10310 10266 10327 10251 10207 10255 10273 10228 10291 10235 10191 10250 10243 10199 10258 10288 10244 10303 10332 10288 10351 7/29/2005 10233 10189 10263 10252 10207 10271 10330 10286 10342 10339 10295 10353 10274 10230 10281 10221 10177 10226 10195 10151 10199 10266 10222 10277 10234 10190 10248 10305 10261 10324 10239 10195 10240 10258 10214 10267 10162 10118 10164 10174 10129 10184 10175 10131 10179 10168 10124 10174 10181 10137 10190 10139 10096 10152 10059 10016 10072 10025 10036 10089 10023 9980 10033 10093 10050 10096 10066 10023 10059 10157 10114 10142 10168 10125 10141 10140 10097 10119 10267 10225 10254 10296 10254 10282 10274 10231 10249 10343 10301 10317 10327 10285 10307 10247 10205 10239 10214 10172 10201 10230 10188 10217 10280 10288 10308 10234 10241 10249 10167 10175 10177 10097 10105 10082 10126 10133 10123 10096 10104 10113 10090 10098 10109 10078 10085 10101 10087 10095 10121 10181 10190 10196 10163 10171 10196 10120 10128 10163 10035 10042 10073 9923 9930 9948 9905 9912 9924 9926 9933 9954 9883 9890 9902 9884 9891 9889 9850 9857 9856 9856 9863 9856 9911 9918 9912 9922 9929 9931 9839 9845 9843 9981 9987 9977 9816 9822 9817 9815 9822 9806 9963 9970 9964 9959 9967 9954 9924 9932 9912 9840 9847 9820 9997 10005 9986 10/31/2005 10035 10043 10027 9951 9997 9985 10064 10073 10072 10112 10121 10118 10123 10132 10129 10154 10162 10153 10138 10147 10130 10156 10165 10153 10242 10250 10233 10281 10290 10266 10266 10275 10262 10240 10249 10229 10241 10251 10233 10298 10308 10309 10362 10372 10374 10419 10430 10419 10461 10472 10468 10509 10520 10507 10534 10546 10530 10457 10469 10456 10436 10447 10453 10364 10375 10381 10454 10466 10483 10453 10465 10472 10442 10454 10453 10441 10453 10455 10389 10401 10406 10359 10371 10372 10367 10379 10385 10370 10382 10392 10431 10443 10451 10476 10489 10505 10480 10493 10499 10452 10465 10467 10435 10447 10432 10413 10425 10415 10421 10433 10429 10462 10474 10476 10465 10478 10480 10363 10376 10382 10364 10377 10388 10333 10345 10363 10284 10297 10312 10467 10480 10480 10497 10510 10509 10507 10520 10510 10603 10616 10591 10629 10641 10622 10622 10635 10611 10669 10682 10653 10599 10613 10578 10614 10627 10585 10573 10586 10534 10507 10521 10491 10543 10556 10549 10309 10323 10350 10319 10334 10369 10323 10338 10369 10322 10336 10369 10369 10383 10433 10461 10476 10519 10475 10490 10535 1/31/2006 10423 10439 10482 10449 10464 10518 10363 10378 10424 10297 10312 10372 10282 10297 10378 10217 10232 10309 10345 10360 10430 10341 10356 10428 10368 10384 10460 10329 10344 10429 10430 10445 10529 10464 10479 10570 10530 10545 10632 10516 10532 10618 10470 10487 10580 10532 10548 10633 10497 10513 10590 10510 10527 10602 10561 10578 10647 10456 10472 10550 10534 10551 10635 10502 10519 10612 10488 10505 10611 10434 10450 10555 10448 10464 10552 10482 10499 10584 10419 10435 10536 10490 10507 10620 10505 10522 10635 10589 10607 10724 10620 10638 10761 10638 10656 10779 10656 10674 10793 10663 10681 10792 10612 10631 10746 10674 10693 10817 10628 10647 10776 10636 10655 10781 10621 10640 10769 10528 10548 10681 10596 10616 10748 10581 10601 10737 10535 10555 10691 10564 10585 10721 10625 10647 10785 10653 10674 10819 10612 10633 10785 10505 10527 10672 10522 10543 10690 10461 10483 10616 10464 10486 10623 10470 10492 10632 10419 10441 10595 10576 10598 10772 10562 10585 10775 10571 10593 10794 10578 10601 10789 10557 10580 10771 10530 10552 10737 10570 10592 10783 10660 10682 10845 4/28/2006 10666 10689 10839 10609 10633 10795 10650 10674 10861 10595 10619 10811 10630 10653 10853 10734 10758 10970 10712 10736 10967 10719 10743 10984 10695 10719 10950 10571 10595 10818 10487 10511 10709 10554 10578 10753 10555 10579 10746 10392 10415 10560 10329 10352 10501 10350 10373 10530 10336 10360 10508 10303 10326 10472 10341 10365 10505 10444 10468 10608 10496 10521 10668 10332 10355 10500 10392 10417 10572 10510 10535 10682 10536 10561 10704 10369 10393 10524 10377 10401 10522 10328 10352 10459 10352 10376 10477 10289 10313 10419 10202 10225 10313 10109 10132 10199 10157 10180 10258 10317 10341 10444 10289 10314 10419 10221 10245 10342 10232 10256 10345 10307 10332 10436 10258 10282 10383 10221 10245 10359 10275 10299 10410 10205 10230 10329 10279 10304 10385 10472 10497 10590 10408 10434 10542 10507 10534 10639 10462 10488 10587 10525 10552 10634 10468 10495 10569 10478 10505 10587 10510 10537 10625 10387 10414 10504 10269 10295 10379 10217 10242 10329 10210 10236 10316 10258 10285 10348 10449 10476 10543 10379 10406 10470 10344 10370 10425 10512 10540 10592 10564 10592 10641 10585 10613 10644 10583 10611 10627 10707 10736 10748 7/31/2006 10677 10706 10722 10641 10670 10678 10699 10728 10739 10699 10728 10745 10710 10739 10736 10681 10711 10714 10665 10694 10684 10649 10678 10658 10679 10708 10708 10659 10688 10683 10674 10703 10704 10792 10822 10828 10852 10882 10900 10870 10901 10917 10934 10965 10979 10913 10944 10950 10920 10951 10956 10895 10926 10924 10939 10971 10947 10932 10963 10943 10988 11020 10993 10997 11029 11012 11003 11035 11013 10978 11010 10999 11041 11074 11064 11044 11077 11073 10957 10990 10985 10907 10939 10936 10932 10965 10972 10942 10974 10978 11038 11071 11078 11070 11103 11117 11075 11108 11111 11094 11128 11133 11107 11142 11154 11103 11137 11142 11174 11209 11212 11130 11165 11160 11110 11145 11144 11195 11230 11239 11280 11316 11335 11279 11315 11347 11291 11327 11369 11271 11307 11341 11244 11280 11327 11291 11328 11367 11424 11461 11493 11425 11461 11498 11418 11454 11478 11418 11455 11476 11439 11476 11500 11414 11451 11470 11511 11548 11568 11527 11565 11589 11522 11560 11607 11497 11535 11574 11535 11573 11602 11550 11588 11601 11618 11656 11633 11689 11728 11705 11668 11707 11703 11717 11757 11753 11764 11805 11805 11679 11719 11717 11663 11703 11711 10/31/2006 11662 11702 11717
AVERAGE ANNUAL TOTAL RETURNS FOR THE PERIOD ENDED OCTOBER 31, 2006 ----------------------------------------------------------------------------- SINCE INCEPTION ONE YEAR (05/04/05) -------- --------------- RYDEX RUSSELL TOP 50 ETF........................ 16.18% 10.85% RUSSELL TOP 50 TOTAL RETURN INDEX............... 16.52% 11.10% S&P 100 TOTAL RETURN INDEX...................... 16.85% 11.19%
The returns presented above do not reflect the effect of taxes. Index returns represent total returns. Past performance is no guarantee of future results. The Russell Top 50 Total Return Index and the S&P 100 Total Return Index are unmanaged stock indices and, unlike the Fund, have no management fees or other operating expense to reduce its reported returns. Returns are historical and include changes in principal and reinvested dividends and capital gains. ANNUAL REPORT 7 -------------------------------------------------------------------------------- Rydex Russell Top 50 ETF --------------------------------------------------------------------------------
TOP 10 HOLDINGS* ------------------------------------------------------------------------------ DESCRIPTION % OF NET ASSETS ------------------------------------------------------------------------------ EXXON MOBIL CORP. 7.20% GENERAL ELECTRIC CO. 6.08% MICROSOFT CORP. 4.24% CITIGROUP, INC. 4.15% BANK OF AMERICA CORP. 4.09% PROCTER & GAMBLE CO. 3.46% JOHNSON & JOHNSON 3.32% PFIZER, INC. 3.25% ALTRIA GROUP, INC. 2.83% JPMORGAN CHASE & CO. 2.75% ------------------------------------------------------------------------------
SECTOR ALLOCATIONS* (PIE CHART) Financials 22.13 Information Technology 17.81 Health Care 14.80 Consumer Staples 11.65 Energy 11.34 Industrials 10.06 Telecommunication Services 6.28 Consumer Discretionary 5.93
* The Fund's Top 10 Holdings are expressed as a percentage of net assets and the Sector Allocation is expressed as a percentage of the Fund's investments market value. These percentages may change over time. ANNUAL REPORT 8 RYDEX S&P 500 PURE VALUE ETF MANAGER'S ANALYSIS -------------------------------------------------------------------------------- Since inception in March 2006, the Rydex S&P 500 Pure Value ETF has returned 10.27% as large cap value began to outperform. Its benchmark, S&P 500/Citigroup Pure Value Total Return Index, outperformed its counterpart index, the S&P 500 Value Total Return Index by .24% returning 10.53%. CUMULATIVE FUND PERFORMANCE: MARCH 1, 2006 - OCTOBER 31, 2006 (TOCOME)
RYDEX S&P 500 PURE VALUE S&P 500/CITIGROUP PURE S&P 500 VALUE TOTAL RETURN ETF VALUE TOTAL RETURN INDEX INDEX ------------------------ ------------------------ -------------------------- 3/1/2006 10000 10000 10000 9956 9956 9985 9937 9937 9965 9870 9870 9897 9836 9837 9877 9852 9852 9887 9821 9822 9847 3/10/2006 9921 9922 9928 9949 9950 9956 10066 10068 10070 10121 10123 10123 10173 10175 10149 10194 10196 10160 10152 10154 10133 10099 10101 10064 10162 10164 10137 10149 10151 10111 3/24/2006 10166 10169 10127 10168 10171 10128 10107 10109 10057 10184 10184 10142 10110 10110 10111 10070 10070 10076 10108 10109 10113 10181 10183 10190 10241 10243 10248 10207 10208 10231 4/7/2006 10099 10101 10125 10088 10089 10131 10006 10008 10054 10050 10052 10076 10049 10051 10082 10041 10043 10066 10241 10244 10263 10277 10280 10280 10309 10312 10298 4/21/2006 10308 10311 10305 10289 10293 10282 10228 10232 10222 10307 10311 10259 10344 10348 10308 10378 10382 10357 10350 10355 10313 10437 10442 10398 10399 10403 10373 10430 10435 10415 5/5/2006 10542 10547 10534 10565 10571 10522 10568 10574 10537 10605 10611 10535 10463 10468 10403 10322 10328 10272 10323 10329 10279 10278 10283 10266 10094 10098 10077 10032 10035 10001 5/19/2006 10105 10107 10055 10076 10078 10014 10020 10023 9971 10019 10021 9966 10169 10172 10082 10265 10268 10160 10091 10094 10002 10215 10218 10104 10360 10363 10238 6/2/2006 10366 10369 10269 10182 10186 10083 10148 10151 10061 10089 10093 9998 10113 10117 10005 10101 10106 9966 9980 9984 9838 9852 9854 9711 9877 9879 9742 10120 10125 9975 6/16/2006 10070 10075 9937 9978 9982 9845 9978 9982 9851 10075 10080 9948 10054 10060 9906 10063 10069 9895 10128 10135 9957 10024 10029 9866 10082 10088 9929 10284 10293 10148 6/30/2006 10314 10323 10138 10366 10377 10227 10272 10281 10158 10284 10293 10180 10146 10256 10118 10293 10303 10136 10317 10328 10186 10218 10227 10080 10056 10063 9929 7/14/2006 9998 10006 9882 9975 9984 9861 9989 9997 9885 10152 10162 10090 10063 10072 10002 9993 10002 9923 10147 10157 10084 10239 10250 10155 10245 10256 10157 10157 10167 10122 7/28/2006 10268 10279 10249 10262 10273 10240 10193 10204 10198 10254 10265 10261 10312 10323 10285 10297 10309 10277 10268 10279 10240 10236 10247 10197 10165 10176 10130 10202 10214 10175 8/11/2006 10161 10173 10135 10189 10201 10140 10328 10341 10288 10415 10429 10364 10416 10430 10375 10429 10443 10403 10374 10388 10368 10394 10408 10378 10331 10344 10335 10325 10339 10347 8/25/2006 10320 10334 10334 10384 10399 10384 10413 10428 10394 10393 10408 10388 10435 10450 10396 10484 10500 10453 10503 10519 10477 10423 10438 10381 10382 10397 10328 9/8/2006 10441 10458 10365 10425 10442 10351 10547 10564 10450 10603 10620 10510 10564 10581 10495 10548 10566 10510 10536 10554 10524 10516 10534 10510 10568 10586 10562 10481 10499 10506 9/22/2006 10453 10472 10494 10561 10579 10593 10642 10660 10675 10656 10675 10669 10672 10691 10691 10621 10640 10673 10626 10645 10652 10654 10673 10683 10762 10781 10795 10761 10781 10819 10/6/2006 10694 10714 10786 10733 10752 10805 10785 10805 10833 10803 10823 10814 10910 10930 10919 10951 10971 10956 10995 11015 10977 10955 10976 10937 10967 10988 10940 10966 10987 10946 10/20/2006 10958 10979 10944 11032 11053 11012 11072 11093 11029 11085 11106 11062 11135 11157 11118 11043 11064 11030 11070 11092 11033 10/31/2006 11032 11053 11029
TOTAL RETURNS FOR THE PERIOD ENDED OCTOBER 31, 2006 ----------------------------------------------------------------------------- SINCE INCEPTION (03/01/2006) --------------- RYDEX S&P 500 PURE VALUE ETF............................... 10.27% S&P 500/CITIGROUP PURE VALUE TOTAL RETURN INDEX............ 10.53% S&P 500 VALUE TOTAL RETURN INDEX........................... 10.29%
The returns presented above do not reflect the effect of taxes. Index returns represent total returns. Past performance is no guarantee of future results. The S&P 500 Pure Value Total Return Index and the S&P 500 Value Total Return Index are unmanaged stock indices and, unlike the Fund, have no management fees or other operating expense to reduce its reported returns. Returns are historical and include changes in principal and reinvested dividends and capital gains. ANNUAL REPORT 9 -------------------------------------------------------------------------------- Rydex S&P 500 Pure Value ETF --------------------------------------------------------------------------------
TOP 10 HOLDINGS* ------------------------------------------------------------------------------ DESCRIPTION % OF NET ASSETS ------------------------------------------------------------------------------ DILLARD'S, INC. -- CLASS A 1.84% RYDER SYSTEM, INC. 1.81% GENERAL MOTORS CORP. 1.71% UNITED STATES STEEL CORP. 1.71% OFFICEMAX, INC. 1.61% BIG LOTS, INC. 1.47% ALLIED WASTE INDUSTRIES, INC. 1.37% FORD MOTOR CO. 1.33% CONOCOPHILLIPS 1.18% SUPERVALU, INC. 1.16% ------------------------------------------------------------------------------
SECTOR ALLOCATIONS* (PIE CHART) Financials 20.65 Utilities 18.40 Consumer Discretionary 16.68 Industrials 10.14 Materials 10.10 Consumer Staples 8.63 Telecommunication Services 6.25 Information Technology 4.91 Energy 3.13 Health Care 1.11
* The Fund's Top 10 Holdings are expressed as a percentage of net assets and the Sector Allocation is expressed as a percentage of the Fund's investments market value. These percentages may change over time. ANNUAL REPORT 10 RYDEX S&P 500 PURE GROWTH ETF MANAGER'S ANALYSIS -------------------------------------------------------------------------------- Since inception in March 2006, the Rydex S&P 500 Pure Growth ETF has returned 2.77% as large caps outperformed small caps and value outperformed growth. For the same time period, the S&P 500 Growth Total Return Index returned 5.67%. CUMULATIVE RETURNS: MARCH 1, 2006 - OCTOBER 31, 2006 (TOCOME)
RYDEX S&P 500 PURE S&P 500/CITIGROUP PURE S&P 500 GROWTH TOTAL GROWTH ETF GROWTH TOTAL RETURN INDEX RETURN INDEX ------------------ ------------------------- -------------------- 3/1/2006 10000 10000 10000 9992 9992 9983 9966 9966 9974 9888 9889 9903 9850 9850 9887 9876 9877 9923 9825 9826 9866 3/10/2006 9883 9884 9931 9902 9903 9948 10018 10019 10042 10053 10055 10076 10073 10074 10086 10085 10087 10105 10058 10060 10099 9999 10001 10045 10037 10038 10095 10035 10037 10068 3/24/2006 10059 10061 10072 10045 10048 10050 10028 10031 9992 10119 10121 10061 10104 10107 10052 10059 10062 10002 10046 10049 10012 10111 10114 10064 10131 10134 10095 10128 10131 10078 4/7/2006 10038 10042 9974 10037 10040 9985 9945 9949 9910 9955 9959 9913 9957 9961 9922 9944 9948 9880 10072 10077 10030 10108 10112 10050 10144 10149 10056 4/21/2006 10096 10100 10047 10079 10083 10022 10012 10017 9982 10019 10023 10004 9980 9984 10028 9973 9977 9994 9925 9929 9954 9947 9952 9994 9909 9913 9940 9925 9929 9967 5/5/2006 10022 10027 10059 10025 10030 10056 9997 10002 10048 9989 9994 10025 9849 9854 9897 9728 9733 9799 9746 9752 9846 9724 9729 9821 9593 9598 9677 9538 9543 9621 5/19/2006 9574 9579 9649 9525 9530 9613 9470 9475 9571 9488 9493 9607 9589 9595 9715 9629 9635 9754 9486 9492 9598 9566 9572 9663 9681 9688 9773 6/2/2006 9659 9666 9781 9481 9487 9611 9451 9458 9611 9430 9437 9558 9437 9444 9580 9403 9410 9531 9265 9273 9412 9195 9203 9346 9257 9265 9413 9468 9475 9589 6/16/2006 9432 9440 9554 9322 9330 9469 9297 9305 9463 9413 9421 9555 9359 9368 9499 9375 9383 9492 9388 9397 9526 9287 9297 9439 9328 9338 9486 9544 9554 9687 6/30/2006 9552 9563 9656 9584 9595 9725 9482 9493 9652 9495 9506 9685 9423 9434 9612 9414 9425 9623 9452 9463 9656 9337 9348 9547 9230 9241 9443 7/14/2006 9160 9171 9396 9163 9173 9390 9143 9154 9404 9312 9324 9559 9198 9209 9480 9100 9111 9422 9287 9299 9583 9377 9389 9636 9344 9356 9627 9280 9292 9584 7/28/2006 9407 9420 9697 9406 9419 9677 9360 9372 9630 9437 9450 9689 9481 9494 9698 9471 9484 9692 9436 9450 9673 9416 9430 9651 9342 9355 9637 9397 9410 9687 8/11/2006 9340 9356 9650 9330 9345 9669 9488 9505 9794 9603 9620 9876 9643 9660 9899 9659 9676 9946 9589 9607 9906 9606 9624 9916 9548 9565 9870 9566 9583 9907 8/25/2006 9557 9574 9906 9623 9642 9961 9672 9690 9992 9699 9717 10007 9701 9720 9993 9752 9772 10049 9781 9801 10061 9660 9679 9957 9614 9633 9913 9/8/2006 9671 9691 9953 9702 9721 9977 9869 9890 10090 9908 9929 10115 9885 9906 10102 9950 9972 10143 9941 9962 10150 9902 9924 10119 9960 9982 10175 9893 9914 10124 9/22/2006 9840 9862 10086 9940 9963 10168 9993 10015 10242 9984 10006 10257 9995 10018 10274 9964 9987 10242 9909 9932 10192 9895 9919 10205 10084 10107 10350 10136 10160 10378 10/6/2006 10094 10119 10354 10133 10157 10352 10140 10164 10369 10093 10118 10335 10203 10228 10433 10192 10217 10440 10233 10259 10473 10175 10200 10434 10173 10198 10462 10172 10197 10473 10/20/2006 10159 10185 10501 10220 10246 10566 10262 10288 10554 10280 10306 10598 10349 10375 10649 10244 10271 10556 10264 10291 10563 10/31/2006 10278 10304 10567
TOTAL RETURNS FOR THE PERIOD ENDED OCTOBER 31, 2006 ----------------------------------------------------------------------------- SINCE INCEPTION (03/01/2006) --------------- RYDEX S&P 500 PURE GROWTH ETF.............................. 2.77% S&P 500/CITIGROUP PURE GROWTH TOTAL RETURN................. 3.04% S&P 500 GROWTH TOTAL RETURN................................ 5.67%
The returns presented above do not reflect the effect of taxes. Index returns represent total returns. Past performance is no guarantee of future results. The S&P 500 Pure Growth Total Return Index and the S&P 500 Growth Total Return Index are unmanaged stock indices and, unlike the Fund, have no management fees or other operating expense to reduce its reported returns. Returns are historical and include changes in principal and reinvested dividends and capital gains. ANNUAL REPORT 11 -------------------------------------------------------------------------------- Rydex S&P 500 Pure Growth ETF --------------------------------------------------------------------------------
TOP 10 HOLDINGS* ------------------------------------------------------------------------------ DESCRIPTION % OF NET ASSETS ------------------------------------------------------------------------------ NVIDIA CORP. 2.58% INTERNATIONAL GAME TECHNOLOGY, INC. 2.12% GOOGLE, INC. 1.89% XTO ENERGY, INC. 1.75% FISHER SCIENTIFIC INTERNATIONAL, INC. 1.49% AUTOZONE, INC. 1.47% FOREST LABORATORIES, INC. 1.43% COACH, INC. 1.39% CHICAGO MERCANTILE EXCHANGE HOLDINGS, INC. 1.39% TJX COS., INC. 1.35% ------------------------------------------------------------------------------
SECTOR ALLOCATIONS* (PIE CHART) Consumer Discretionary 27.51 Health Care 24.26 Information Technology 17.62 Financials 9.64 Consumer Staples 8.56 Energy 7.61 Industrials 2.69 Materials 2.11
* The Fund's Top 10 Holdings are expressed as a percentage of net assets and the Sector Allocation is expressed as a percentage of the Fund's investments market value. These percentages may change over time. ANNUAL REPORT 12 RYDEX S&P MIDCAP 400 PURE VALUE ETF MANAGER'S ANALYSIS -------------------------------------------------------------------------------- Since inception in March 2006, the Rydex S&P MidCap 400 Pure Value ETF returned 6.48%, outperforming the S&P MidCap 400 Value Total Return Index by 3.37%. CUMULATIVE RETURN: MARCH 1, 2006 - OCTOBER 31, 2006 [LINE GRAPH]
S&P MIDCAP 400/CITIGROUP RYDEX S&P MIDCAP 400 PURE VALUE TOTAL RETURN S&P MIDCAP 400 VALUE PURE VALUE ETF INDEX TOTAL RETURN INDEX -------------------- ------------------------ -------------------- 3/1/2006 10000 10000 10000 9903 9903 9971 9863 9864 9944 9780 9781 9866 9701 9703 9762 9709 9710 9775 9715 9716 9750 3/10/2006 9795 9797 9820 9813 9814 9847 9897 9899 9946 9964 9966 10028 9951 9954 10037 9970 9973 10064 9953 9956 10027 9864 9866 9940 9952 9955 10017 9911 9913 10014 3/24/2006 9958 9961 10057 9977 9980 10056 9903 9907 10016 10033 10037 10130 10006 10010 10119 9999 10003 10127 10030 10034 10137 10060 10064 10165 10119 10123 10235 10096 10100 10238 4/7/2006 9985 9989 10136 9942 9947 10100 9824 9829 9992 9879 9884 10033 9862 9866 10030 9851 9856 10029 10079 10085 10263 10146 10152 10358 10208 10214 10362 4/21/2006 10200 10207 10362 10164 10171 10334 10182 10189 10312 10187 10194 10296 10184 10191 10315 10180 10187 10339 10149 10157 10324 10198 10206 10371 10223 10231 10365 10310 10318 10437 5/5/2006 10406 10415 10531 10423 10432 10548 10403 10412 10530 10365 10374 10508 10205 10213 10361 10003 10011 10186 10012 10020 10138 9977 9985 10104 9798 9804 9928 9741 9747 9833 5/19/2006 9791 9797 9860 9779 9785 9789 9685 9691 9738 9748 9755 9745 9882 9890 9879 9942 9950 9944 9751 9758 9785 9886 9894 9926 10052 10062 10077 6/2/2006 10071 10081 10114 9855 9863 9880 9861 9869 9828 9793 9801 9744 9759 9768 9700 9774 9783 9687 9610 9618 9491 9474 9482 9342 9501 9510 9367 9769 9778 9660 6/16/2006 9714 9724 9609 9591 9600 9466 9592 9602 9440 9739 9749 9600 9665 9674 9539 9720 9730 9585 9801 9812 9654 9694 9704 9560 9731 9742 9587 10008 10019 9863 6/30/2006 10068 10080 9922 10122 10134 9990 10023 10035 9853 10025 10037 9876 9982 9994 9800 10016 10028 9808 10089 10102 9852 9967 9979 9736 9787 9798 9566 7/14/2006 9726 9737 9500 9695 9707 9439 9724 9736 9450 9749 9916 9667 9749 9761 9465 9665 9677 9335 9852 9865 9517 9914 9928 9618 9895 9909 9619 9802 9815 9539 7/28/2006 9935 9949 9692 9912 9926 9701 9860 9874 9643 9905 9919 9691 9970 9984 9749 9948 9963 9732 9901 9916 9664 9855 9870 9594 9747 9760 9529 9784 9798 9571 8/11/2006 9695 9709 9497 9749 9763 9512 9897 9912 9679 10010 10026 9802 10008 10024 9796 10017 10034 9814 9925 9941 9735 9948 9964 9753 9849 9864 9658 9837 9852 9646 8/25/2006 9814 9830 9636 9914 9930 9710 10000 10017 9766 10025 10042 9796 10089 10107 9845 10110 10129 9877 10153 10171 9924 10015 10033 9760 9967 9984 9696 9/8/2006 9996 10015 9710 10014 10032 9688 10171 10191 9832 10225 10245 9916 10178 10198 9861 10166 10186 9855 10119 10140 9839 10093 10114 9806 10193 10214 9875 10081 10101 9792 9/22/2006 10021 10042 9727 10117 10138 9814 10186 10207 9881 10206 10227 9911 10193 10214 9917 10124 10145 9866 10127 10148 9834 10136 10158 9816 10290 10311 9951 10368 10389 10061 10/6/2006 10305 10326 10005 10351 10372 10070 10382 10403 10100 10384 10405 10091 10523 10543 10227 10565 10586 10275 10633 10654 10343 10584 10605 10276 10582 10603 10263 10638 10659 10308 10/20/2006 10598 10620 10236 10641 10662 10282 10637 10659 10312 10690 10712 10371 10778 10800 10440 10647 10669 10322 10680 10702 10351 10/31/2006 10652 10674 10311
TOTAL RETURNS FOR THE PERIOD ENDED OCTOBER 31, 2006 ----------------------------------------------------------------------------- SINCE INCEPTION (03/01/2006) --------------- RYDEX S&P MIDCAP 400 PURE VALUE ETF........................ 6.48% S&P MIDCAP 400/CITIGROUP PURE VALUE TOTAL RETURN........... 6.74% S&P MIDCAP 400 VALUE TOTAL RETURN.......................... 3.11%
The returns presented above do not reflect the effect of taxes. Index returns represent total returns. Past performance is no guarantee of future results. The S&P MidCap 400 Pure Value Total Return Index and the S&P MidCap 400 Value Total Return Index are unmanaged stock indices and, unlike the Fund, have no management fees or other operating expense to reduce its reported returns. Returns are historical and include changes in principal and reinvested dividends and capital gains. ANNUAL REPORT 13 -------------------------------------------------------------------------------- Rydex S&P Midcap 400 Pure Value ETF --------------------------------------------------------------------------------
TOP 10 HOLDINGS* ------------------------------------------------------------------------------ DESCRIPTION % OF NET ASSETS ------------------------------------------------------------------------------ ATMEL CORP. 3.14% NORTHEAST UTILITIES 2.49% NSTAR 2.16% PEPCO HOLDINGS, INC. 1.90% AMERICAN FINANCIAL GROUP, INC. 1.82% SEQUA CORP. 1.79% LEAR CORP. 1.74% ALASKA AIR GROUP, INC. 1.71% ARVINMERITOR, INC. 1.65% OGE ENERGY CORP. 1.61% ------------------------------------------------------------------------------
SECTOR ALLOCATIONS* (PIE CHART) Utilities 26.71 Financials 17.05 Industrials 14.87 Consumer Discretionary 13.88 Materials 12.18 Information Technology 8.44 Consumer Staples 4.42 Telecommunication Services 1.56 Health Care 0.59 Energy 0.30
* The Fund's Top 10 Holdings are expressed as a percentage of net assets and the Sector Allocation is expressed as a percentage of the Fund's investments market value. These percentages may change over time. ANNUAL REPORT 14 RYDEX S&P MIDCAP 400 PURE GROWTH ETF MANAGER'S ANALYSIS -------------------------------------------------------------------------------- For the period ending October 31, 2006 the Rydex S&P MidCap 400 Pure Growth ETF returned a -4.76% as value outperformed growth. For the same time period, the S&P MidCap 400 Growth Total Return Index returned -1.78%. CUMULATIVE RETURNS: MARCH 1, 2006 - OCTOBER 31, 2006 (TOCOME)
S&P MIDCAP 400/CITIGROUP RYDEX S&P MIDCAP 400 PURE GROWTH TOTAL RETURN S&P MIDCAP 400 GROWTH PURE GROWTH ETF INDEX TOTAL RETURN INDEX -------------------- ------------------------ --------------------- 3/1/2006 10000 10000 10000 9918 9918 9957 9883 9884 9922 9802 9802 9808 9678 9679 9683 9684 9685 9689 9618 9619 9622 3/10/2006 9690 9691 9677 9736 9737 9739 9835 9836 9849 9871 9872 9904 9850 9851 9905 9883 9885 9932 9874 9876 9903 9804 9806 9820 9886 9888 9898 9905 9907 9926 3/24/2006 9933 9936 9986 9907 9910 9979 9898 9901 9957 10023 10025 10053 10029 10032 10071 10045 10048 10069 9982 9986 10033 10037 10040 10071 10123 10126 10152 10134 10137 10161 4/7/2006 10042 10046 10062 9990 9994 10027 9890 9894 9938 9894 9898 9956 9904 9908 9976 9888 9893 9970 10098 10102 10182 10180 10185 10287 10178 10183 10291 4/21/2006 10086 10092 10255 10020 10026 10204 9990 9996 10149 9961 9967 10090 9918 9924 10078 9962 9968 10135 9898 9904 10110 9930 9936 10163 9924 9930 10143 9913 9919 10188 5/5/2006 10010 10017 10304 10008 10015 10321 9974 9981 10293 9943 9950 10277 9811 9818 10156 9647 9654 9970 9594 9602 9887 9584 9591 9874 9430 9437 9697 9381 9388 9609 5/19/2006 9430 9437 9623 9336 9344 9542 9272 9279 9498 9244 9252 9460 9335 9343 9558 9399 9408 9622 9228 9236 9470 9362 9371 9620 9507 9516 9766 6/2/2006 9520 9529 9803 9272 9280 9550 9251 9259 9494 9202 9210 9420 9176 9183 9373 9143 9150 9349 8912 8915 9115 8765 8767 8960 8833 8835 9032 9125 9132 9331 6/16/2006 9077 9083 9306 8943 8948 9143 8906 8910 9097 9072 9079 9276 9015 9021 9228 9169 9177 9359 9194 9203 9392 9091 9098 9309 9068 9075 9306 9336 9347 9588 6/30/2006 9379 9391 9629 9428 9440 9705 9277 9288 9537 9300 9311 9566 9208 9218 9459 9152 9161 9414 9186 9196 9443 9061 9069 9329 8892 8897 9170 7/14/2006 8817 8823 9100 8780 8787 9030 8782 8789 9024 8811 9031 9255 8811 8818 9028 8695 8701 8885 8928 8935 9104 9021 9029 9230 8963 8971 9218 8851 8858 9106 7/28/2006 8995 9003 9253 8994 9003 9285 8872 8880 9186 8935 8943 9264 9003 9012 9338 8918 8926 9271 8870 8878 9225 8759 8767 9132 8664 8672 9059 8733 8741 9136 8/11/2006 8642 8650 9053 8633 8641 9045 8813 8821 9224 8967 8977 9372 8977 8987 9377 9014 9024 9398 8904 8914 9306 8904 8914 9308 8836 8845 9226 8748 8757 9190 8/25/2006 8747 8756 9190 8843 8854 9264 8894 8905 9303 8925 8935 9318 8936 8946 9354 8989 9000 9418 9014 9026 9448 8864 8875 9281 8824 8835 9227 9/8/2006 8827 8839 9223 8853 8865 9222 9081 9093 9400 9136 9148 9490 9085 9097 9412 9066 9079 9402 9080 9093 9415 9067 9080 9382 9132 9145 9428 9088 9101 9382 9/22/2006 9025 9038 9304 9130 9144 9404 9213 9227 9498 9221 9235 9523 9226 9240 9534 9131 9145 9469 9092 9106 9394 9085 9100 9358 9263 9278 9532 9379 9394 9654 10/6/2006 9313 9328 9585 9376 9391 9628 9419 9435 9675 9385 9401 9640 9559 9576 9801 9600 9617 9847 9672 9690 9928 9576 9594 9822 9532 9549 9791 9549 9567 9841 10/20/2006 9504 9522 9773 9556 9574 9826 9543 9560 9846 9551 9569 9875 9668 9686 9988 9542 9560 9868 9575 9594 9879 10/31/2006 9524 9542 9822
TOTAL RETURNS FOR THE PERIOD ENDED OCTOBER 31, 2006 ----------------------------------------------------------------------------- SINCE INCEPTION (03/01/06) --------------- RYDEX S&P MIDCAP 400 PURE GROWTH ETF....................... -4.76% S&P MIDCAP 400/CITIGROUP PURE GROWTH TOTAL RETURN INDEX.... -4.58% S&P MIDCAP 400 GROWTH TOTAL RETURN INDEX................... -1.78%
The returns presented above do not reflect the effect of taxes. Index returns represent total returns. Past performance is no guarantee of future results. The S&P MidCap 400 Pure Growth Total Return Index and the S&P MidCap 400 Growth Total Return Index are unmanaged stock indices and, unlike the Fund, have no management fees or other operating expense to reduce its reported returns. Returns are historical and include changes in principal and reinvested dividends and capital gains. ANNUAL REPORT 15 -------------------------------------------------------------------------------- RYDEX S&P MIDCAP 400 PURE GROWTH ETF --------------------------------------------------------------------------------
TOP 10 HOLDINGS* ------------------------------------------------------------------------------ DESCRIPTION % OF NET ASSETS ------------------------------------------------------------------------------ COGNIZANT TECHNOLOGY SOLUTIONS CORP. 2.99% AEROPOSTALE, INC. 2.45% GAMESTOP CORP. -- CLASS A 2.38% CORPORATE EXECUTIVE BOARD CO. 1.96% ITT EDUCATIONAL SERVICES, INC. 1.95% ABERCROMBIE & FITCH CO. -- CLASS A 1.92% CEPHALON, INC. 1.87% SEPRACOR, INC. 1.84% WESTERN DIGITAL CORP. 1.83% SEI INVESTMENTS CO. 1.78% ------------------------------------------------------------------------------
SECTOR ALLOCATIONS* (PIE CHART) Consumer Discretionary 30.22 Information Technology 19.31 Health Care 17.47 Industrials 14.92 Financials 8.22 Energy 7.75 Consumer Staples 2.11
* The Fund's Top 10 Holdings are expressed as a percentage of net assets and the Sector Allocation is expressed as a percentage of the Fund's investments market value. These percentages may change over time. ANNUAL REPORT 16 RYDEX S&P SMALLCAP 600 PURE VALUE ETF MANAGER'S ANALYSIS -------------------------------------------------------------------------------- For the majority of the fiscal year ending October 31, 2006 small caps stocks continued to rally. In the 4(th) quarter of the fiscal year, Rydex S&P SmallCap 600 Pure Value ETF returned 8.28%. Since inception in March 2006, the Rydex S&P SmallCap 600 Pure Value ETF has returned 5.19%. CUMULATIVE RETURNS: MARCH 1, 2006 - OCTOBER 31, 2006 (TOCOME)
S&P SMALLCAP RYDEX S&P SMALLCAP 600 600/CITIGROUP PURE VALUE S&P SMALLCAP 600 VALUE PURE VALUE ETF TOTAL RETURN INDEX TOTAL RETURN INDEX ---------------------- ------------------------ ---------------------- 3/1/2006 10000 10000 10000 9938 9938 9980 9905 9905 9941 9855 9856 9847 9716 9717 9722 9735 9736 9727 9692 9692 9684 3/10/2006 9838 9839 9817 9846 9847 9832 9932 9933 9948 9983 9984 10026 10020 10022 10048 10077 10079 10085 10107 10109 10090 9963 9965 9981 10134 10136 10115 10169 10171 10144 3/24/2006 10235 10238 10204 10238 10241 10200 10176 10179 10154 10350 10353 10317 10319 10323 10296 10339 10343 10336 10296 10300 10288 10355 10360 10337 10373 10377 10391 10369 10373 10386 4/7/2006 10249 10253 10259 10185 10190 10214 10064 10068 10085 10120 10124 10134 10127 10132 10154 10110 10115 10154 10338 10344 10424 10451 10457 10535 10434 10440 10500 4/21/2006 10395 10401 10477 10340 10346 10407 10330 10336 10379 10348 10354 10374 10309 10316 10303 10361 10368 10351 10331 10338 10347 10451 10458 10427 10458 10465 10448 10490 10498 10566 5/5/2006 10585 10594 10651 10598 10606 10666 10590 10598 10664 10487 10496 10608 10184 10192 10358 9981 9988 10159 9951 9958 10095 9957 9964 10090 9816 9823 9937 9741 9748 9860 5/19/2006 9825 9832 9926 9788 9795 9855 9704 9711 9791 9775 9782 9824 9924 9932 9985 9889 9897 10005 9650 9657 9756 9769 9777 9880 9948 9958 10066 6/2/2006 9962 9973 10085 9690 9699 9801 9623 9631 9730 9603 9610 9688 9664 9673 9689 9586 9594 9625 9376 9380 9385 9238 9240 9272 9235 9236 9310 9526 9533 9615 6/16/2006 9440 9446 9525 9297 9300 9379 9252 9254 9334 9402 9407 9504 9439 9445 9488 9449 9455 9499 9577 9585 9626 9437 9444 9475 9486 9493 9506 9821 9835 9847 6/30/2006 9919 9935 9918 9956 9972 9986 9860 9875 9858 9914 9930 9897 9762 9775 9745 9805 9819 9771 9871 9886 9830 9679 9691 9651 9478 9486 9462 7/14/2006 9393 9403 9373 9325 9335 9293 9397 9408 9354 9446 9693 9642 9446 9457 9383 9306 9317 9221 9563 9574 9456 9671 9683 9554 9602 9614 9499 9492 9503 9388 7/28/2006 9703 9716 9588 9715 9728 9593 9562 9574 9467 9584 9596 9548 9693 9706 9676 9627 9640 9646 9576 9589 9574 9449 9462 9480 9377 9389 9398 9434 9446 9464 8/11/2006 9320 9332 9376 9372 9385 9413 9543 9557 9621 9652 9666 9770 9680 9694 9781 9713 9727 9795 9673 9688 9714 9737 9752 9744 9620 9635 9605 9581 9596 9582 8/25/2006 9594 9609 9591 9689 9704 9686 9804 9821 9796 9833 9849 9842 9839 9855 9850 9876 9893 9884 9983 10000 9985 9791 9807 9789 9690 9706 9719 9/8/2006 9718 9734 9752 9676 9692 9725 9879 9897 9942 9986 10004 10036 9928 9947 9981 9983 10002 10017 9966 9985 10015 9922 9942 9972 10025 10044 10092 9938 9958 9990 9/22/2006 9905 9925 9904 10009 10029 10015 10025 10044 10062 10096 10116 10112 10074 10094 10092 9941 9961 9977 9860 9880 9893 9914 9933 9907 10067 10078 10090 10157 10170 10211 10/6/2006 10084 10097 10155 10177 10190 10225 10206 10219 10248 10162 10174 10216 10378 10391 10416 10441 10455 10483 10525 10539 10588 10498 10511 10523 10476 10490 10474 10530 10544 10520 10/20/2006 10477 10491 10438 10500 10514 10465 10552 10566 10494 10620 10635 10573 10724 10738 10659 10580 10595 10524 10628 10643 10578 10/31/2006 10524 10538 10519
TOTAL RETURNS FOR THE PERIOD ENDED OCTOBER 31, 2006 ----------------------------------------------------------------------------- SINCE INCEPTION (03/01/06) --------------- RYDEX S&P SMALLCAP 600 PURE VALUE ETF...................... 5.19% S&P SMALLCAP 600/CITIGROUP PURE VALUE TOTAL RETURN INDEX... 5.38% S&P SMALLCAP 600 VALUE TOTAL RETURN INDEX.................. 5.19%
The returns presented above do not reflect the effect of taxes. Index returns represent total returns. Past performance is no guarantee of future results. The S&P SmallCap 600 Pure Value Total Return Index and the S&P SmallCap 600 Value Total Return Index are unmanaged stock indices and, unlike the Fund, have no management fees or other operating expense to reduce its reported returns. Returns are historical and include changes in principal and reinvested dividends and capital gains. ANNUAL REPORT 17 -------------------------------------------------------------------------------- Rydex S&P Smallcap 600 Pure Value ETF --------------------------------------------------------------------------------
TOP 10 HOLDINGS* ------------------------------------------------------------------------------ DESCRIPTION % OF NET ASSETS ------------------------------------------------------------------------------ ALLIANCE ONE INTERNATIONAL, INC. 1.50% VOLT INFORMATION SCIENCES, INC. 1.47% GROUP 1 AUTOMOTIVE, INC. 1.42% CHAPARRAL STEEL CO. 1.37% CENTRAL VERMONT PUBLIC SERVICE CORP. 1.34% KELLWOOD CO. 1.30% ROCK-TENN CO. 1.28% SCHULMAN A, INC. 1.17% STANDARD MOTOR PRODUCTS, INC. 1.17% MYERS INDUSTRIES, INC. 1.13% ------------------------------------------------------------------------------
SECTOR ALLOCATIONS* (PIE CHART) Consumer Discretionary 21.45 Materials 19.05 Industrials 17.91 Utilities 12.66 Financials 12.44 Information Technology 8.17 Consumer Staples 5.20 Health Care 2.91 Energy 0.21
* The Fund's Top 10 Holdings are expressed as a percentage of net assets and the Sector Allocation is expressed as a percentage of the Fund's investments market value. These percentages may change over time. ANNUAL REPORT 18 RYDEX S&P SMALLCAP 600 PURE GROWTH ETF MANAGER'S ANALYSIS -------------------------------------------------------------------------------- Since inception in March 2006 the Rydex S&P SmallCap 600 Pure Growth ETF has returned -.55%, tracking its benchmark the S&P SmallCap 600/Citigroup Pure Growth Index. The S&P SmallCap 600 Pure Growth Index counterpart, the S&P 600 Growth Index, returned .07% for the same time period as large caps and value stocks outperformed. CUMULATIVE RETURNS: MARCH 1, 2006 - OCTOBER 31, 2006 (TO COME)
S&P SMALLCAP RYDEX S&P SMALLCAP 600 600/CITIGROUP PURE GROWTH S&P SMALLCAP 600 GROWTH PURE GROWTH ETF TOTAL RETURN INDEX TOTAL RETURN INDEX ---------------------- ------------------------- ----------------------- 3/1/2006 10000 10000 10000 9970 9970 9995 9964 9964 9968 9845 9846 9842 9747 9748 9726 9776 9777 9741 9737 9737 9699 3/10/2006 9853 9854 9804 9876 9877 9838 9917 9918 9941 10014 10016 10018 10048 10050 10064 10084 10086 10079 10071 10073 10080 10046 10048 10028 10144 10146 10131 10193 10196 10170 3/24/2006 10243 10246 10218 10228 10231 10212 10178 10181 10187 10320 10323 10322 10311 10314 10308 10357 10360 10354 10252 10255 10269 10313 10316 10336 10328 10332 10370 10327 10331 10353 4/7/2006 10206 10210 10230 10172 10176 10205 10053 10057 10079 10110 10115 10128 10142 10147 10159 10145 10150 10170 10365 10370 10402 10444 10449 10507 10442 10447 10488 4/21/2006 10373 10378 10438 10365 10370 10383 10342 10348 10330 10403 10409 10338 10346 10352 10287 10395 10401 10336 10336 10342 10309 10405 10412 10362 10396 10402 10347 10473 10480 10421 5/5/2006 10605 10612 10553 10607 10615 10561 10584 10591 10554 10498 10505 10533 10253 10261 10309 10089 10097 10118 10094 10101 10094 10152 10160 10127 10012 10019 9974 9877 9883 9861 5/19/2006 9901 9908 9881 9846 9852 9808 9791 9797 9760 9790 9796 9742 9956 9963 9910 10030 10038 9959 9779 9786 9723 9904 9912 9861 10055 10064 10023 6/2/2006 10051 10061 10030 9790 9798 9754 9739 9745 9696 9705 9711 9647 9682 9688 9620 9635 9641 9590 9405 9409 9358 9264 9267 9241 9333 9337 9290 9588 9594 9565 6/16/2006 9530 9536 9510 9362 9366 9343 9320 9324 9301 9491 9496 9466 9461 9465 9428 9527 9533 9488 9598 9605 9563 9438 9443 9411 9456 9461 9436 9756 9766 9742 6/30/2006 9814 9824 9825 9907 9918 9908 9790 9801 9790 9831 9843 9804 9694 9705 9675 9648 9660 9657 9714 9725 9715 9537 9548 9563 9352 9363 9383 7/14/2006 9267 9278 9302 9195 9206 9221 9180 9191 9233 9167 9422 9478 9167 9177 9219 9060 9071 9093 9333 9345 9322 9435 9447 9419 9367 9379 9369 9242 9254 9248 7/28/2006 9420 9434 9416 9496 9510 9471 9362 9375 9356 9414 9427 9420 9477 9490 9508 9438 9452 9469 9311 9324 9388 9232 9244 9315 9148 9160 9229 9170 9182 9276 8/11/2006 9113 9125 9204 9128 9140 9214 9305 9318 9407 9408 9422 9537 9446 9460 9562 9456 9470 9571 9351 9365 9475 9392 9406 9498 9272 9285 9366 9264 9278 9356 8/25/2006 9263 9277 9360 9340 9354 9436 9408 9423 9511 9438 9453 9542 9395 9409 9536 9394 9410 9556 9413 9428 9607 9180 9194 9408 9165 9179 9376 9/8/2006 9192 9207 9391 9174 9189 9371 9402 9418 9577 9500 9516 9670 9470 9486 9616 9497 9513 9644 9513 9530 9660 9460 9477 9611 9566 9583 9683 9517 9534 9615 9/22/2006 9413 9430 9504 9513 9530 9605 9551 9569 9660 9572 9590 9677 9563 9580 9667 9463 9481 9584 9362 9379 9476 9334 9351 9452 9543 9562 9639 9643 9663 9748 10/6/2006 9596 9616 9700 9699 9720 9758 9709 9729 9780 9657 9677 9736 9830 9852 9919 9886 9908 9974 9962 9985 10082 9867 9889 9990 9865 9887 9972 9896 9919 10012 10/20/2006 9878 9901 9959 9928 9951 9980 9931 9954 9991 9978 10002 10061 10097 10122 10151 9976 10001 10034 9993 10017 10059 10/31/2006 9945 9970 10007
TOTAL RETURNS FOR THE PERIOD ENDED OCTOBER 31, 2006 ----------------------------------------------------------------------------- SINCE INCEPTION (03/01/2006) --------------- RYDEX S&P SMALLCAP 600 PURE GROWTH ETF..................... -.55% S&P SMALLCAP 600/CITIGROUP PURE GROWTH TOTAL RETURN INDEX.................................................... -.30% S&P SMALLCAP 600 GROWTH TOTAL RETURN INDEX................. .07%
The returns presented above do not reflect the effect of taxes. Index returns represent total returns. Past performance is no guarantee of future results. The S&P SmallCap 600/ Citigroup Pure Growth Total Return Index and the S&P SmallCap 600 Growth Total Return Index are unmanaged stock indices and, unlike the Fund, have no management fees or other operating expense to reduce its reported returns. Returns are historical and include changes in principal and reinvested dividends and capital gains. ANNUAL REPORT 19 -------------------------------------------------------------------------------- Rydex S&P Smallcap 600 Pure Growth ETF --------------------------------------------------------------------------------
TOP 10 HOLDINGS* ------------------------------------------------------------------------------ DESCRIPTION % OF NET ASSETS ------------------------------------------------------------------------------ COINSTAR, INC. 2.02% CHRISTOPHER & BANKS CORP. 1.84% j2 GLOBAL COMMUNICATIONS, INC. 1.80% FRONTIER OIL CORP. 1.71% CNS, INC. 1.66% BIOLASE TECHNOLOGY, INC. 1.42% FACTSET RESEARCH SYSTEMS, INC. 1.31% PORTFOLIO RECOVERY ASSOCIATES, INC. 1.30% CONNETICS CORP. 1.23% WEBSENSE, INC. 1.23% ------------------------------------------------------------------------------
SECTOR ALLOCATIONS* (PIE CHART) Consumer Discretionary 26.15 Health Care 25.85 Information Technology 19.61 Financials 9.87 Energy 9.36 Industrials 5.88 Consumer Staples 2.39 Materials 0.89
* The Fund's Top 10 Holdings are expressed as a percentage of net assets and the Sector Allocation is expressed as a percentage of the Fund's investments market value. These percentages may change over time. ANNUAL REPORT 20 -------------------------------------------------------------------------------- SHAREHOLDER EXPENSE EXAMPLE (UNAUDITED) As a shareholder of the Rydex ETF Trust, you incur transaction costs such as creation and redemption fees or brokerage charges, and ongoing costs including advisory fees and, if applicable, distribution fees. All other Trust expenses are paid by the advisor. This Example is intended to help you understand your ongoing costs (in dollars) of investing in a Fund and to compare these costs with the ongoing costs of investing in other mutual funds. The example in the table is based on an investment of $1,000 invested on May 1, 2006 and held for the six month period ended October 31, 2006. ACTUAL EXPENSES The first table below provides information about actual account values and actual expenses. You may use the information in this table, together with the amount you invested, to estimate the expenses that you incurred 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 in the first table under the heading entitled "Expenses Paid During the Six-Month Period" to estimate the expenses attributable to your investment during this period. HYPOTHETICAL EXAMPLE FOR COMPARISON PURPOSES The second table below provides information about hypothetical account values and hypothetical expenses based on a Fund's actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not a Fund's actual return. Thus, you should not use the hypothetical account values and expenses to estimate the actual ending account balance or your expenses for the period. Rather, these figures are provided to enable you to compare the ongoing costs of investing in a Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of other funds. Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transaction costs, such as creation and redemption fees, or brokerage charges. Therefore, the second table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transaction costs were included, your costs would have been higher. ANNUAL REPORT 21 --------------------------------------------------------------------------------
BEGINNING ENDING EXPENSES PAID ACCOUNT ACCOUNT DURING THE VALUE VALUE SIX-MONTH PERIOD* 5/1/2006 10/31/2006 5/1/06 TO 10/31/06 --------- ---------- ------------------ ACTUAL Rydex S&P Equal Weight ETF............. $1,000.00 $1,042.00 $2.06 Rydex Russell Top 50 ETF............... $1,000.00 $1,093.00 $1.06 Rydex S&P 500 Pure Value ETF........... $1,000.00 $1,062.60 $1.82 Rydex S&P 500 Pure Growth ETF.......... $1,000.00 $1,030.50 $1.79 Rydex S&P MidCap 400 Pure Value ETF.... $1,000.00 $1,046.00 $1.80 Rydex S&P MidCap 400 Pure Growth ETF... $1,000.00 $ 956.00 $1.73 Rydex S&P SmallCap 600 Pure Value ETF.................................. $1,000.00 $1,015.30 $1.78 Rydex S&P SmallCap 600 Pure Growth ETF.................................. $1,000.00 $ 956.80 $1.73 HYPOTHETICAL (ASSUMING A 5% RETURN BEFORE EXPENSES) Rydex S&P Equal Weight ETF............. $1,000.00 $1,023.19 $2.04 Rydex Russell Top 50 ETF............... $1,000.00 $1,024.20 $1.02 Rydex S&P 500 Pure Value ETF........... $1,000.00 $1,023.44 $1.79 Rydex S&P 500 Pure Growth ETF.......... $1,000.00 $1,023.44 $1.79 Rydex S&P MidCap 400 Pure Value ETF.... $1,000.00 $1,023.44 $1.79 Rydex S&P MidCap 400 Pure Growth ETF... $1,000.00 $1,023.44 $1.79 Rydex S&P SmallCap 600 Pure Value ETF.................................. $1,000.00 $1,023.44 $1.79 Rydex S&P SmallCap 600 Pure Growth ETF.................................. $1,000.00 $1,023.44 $1.79
--------------- * Expenses are equal to the Fund's annualized expense ratio of 0.40%, 0.20%, 0.35%, 0.35%, 0.35%, 0.35%, 0.35%, and 0.35% respectively, multiplied by the average account value of the period, multiplied by days in the period, divided by 365. ANNUAL REPORT 22 Rydex S&P Equal Weight ETF PORTFOLIO SUMMARY October 31, 2006 --------------------------------------------------------------------------------
INCEPTION DATE PORTFOLIO STATISTICS -------------- -------------------- 4/24/2003 Net Assets ($million): $1,759.8
INDUSTRY BREAKDOWN (AS A PERCENTAGE OF NET ASSETS) ------------------ 2.0% Aerospace & Defense 0.4% Air Freight & Logistics 0.2% Airlines 0.4% Auto Components 0.6% Automobiles 1.5% Beverages 1.0% Biotechnology 0.4% Building Products 3.4% Capital Markets 2.6% Chemicals 4.1% Commercial Banks 1.9% Commercial Services & Supplies 2.2% Communications Equipment 2.2% Computers & Peripherals 0.2% Construction & Engineering 0.2% Construction Materials 0.6% Consumer Finance 1.0% Containers & Packaging 0.2% Distributors 0.3% Diversified Consumer Services 1.2% Diversified Financial Services 1.6% Diversified Telecommunication Services 2.3% Electric Utilities 0.9% Electrical Equipment 1.4% Electronic Equipment & Instruments 2.5% Energy Equipment & Services 1.7% Food & Staples Retailing 2.4% Food Products 0.4% Gas Utilities 2.2% Health Care Equipment & Supplies 3.4% Health Care Providers & Services 0.2% Health Care Technology 2.5% Hotels Restaurants & Leisure 2.5% Household Durables 0.8% Household Products 0.8% Independent Power Producers & Energy Traders 0.8% Industrial Conglomerates 4.5% Insurance 0.2% Internet & Catalog Retail 0.8% Internet Software & Services 2.3% IT Services 0.9% Leisure Equipment & Products 1.3% Life Sciences Tools & Services 2.6% Machinery 3.5% Media 1.6% Metals & Mining 2.6% Multi-Utilities 2.0% Multiline Retail 0.2% Office Electronics 3.9% Oil, Gas & Consumable Fuels 0.8% Paper & Forest Products 0.6% Personal Products 2.7% Pharmaceuticals 2.3% Real Estate Investment Trusts (REITs) 0.2% Real Estate Management & Development 1.1% Road & Rail 3.6% Semiconductors & Semiconductor Equipment 2.6% Software 3.2% Specialty Retail 1.0% Textiles, Apparel & Luxury Goods 1.2% Thrifts & Mortgage Finance 0.6% Tobacco 0.2% Trading Companies & Distributors 0.4% Wireless Telecommunication Services 0.1% Short-Term Investments 0.0% Other Assets & Liabilities(a)
(a) Amount represents less than 0.05% of net assets. ANNUAL REPORT 23 Rydex Russell Top 50 ETF PORTFOLIO SUMMARY October 31, 2006 --------------------------------------------------------------------------------
INCEPTION DATE PORTFOLIO STATISTICS -------------- -------------------- 5/4/2005 Net Assets ($million): $364.5
INDUSTRY BREAKDOWN (AS A PERCENTAGE OF NET ASSETS) ------------------ 2.2% Aerospace & Defense 0.8% Air Freight & Logistics 3.3% Beverages 2.1% Biotechnology 3.8% Capital Markets 3.8% Commercial Banks 3.5% Communications Equipment 5.1% Computers & Peripherals 1.0% Consumer Finance 11.0% Diversified Financial Services 5.4% Diversified Telecommunication Services 2.0% Food & Staples Retailing 1.0% Health Care Equipment & Supplies 1.1% Health Care Providers & Services 3.5% Household Products 7.1% Industrial Conglomerates 2.5% Insurance 1.6% Internet Software & Services 4.6% Media 11.3% Oil, Gas & Consumable Fuels 10.6% Pharmaceuticals 2.1% Semiconductors & Semiconductor Equipment 5.5% Software 1.3% Specialty Retail 2.8% Tobacco 0.9% Wireless Telecommunication Services 0.1% Short-Term Investments 0.0% Other Assets & Liabilities(a)
(a) Amount represents less than 0.05% of net assets. ANNUAL REPORT 24 Rydex S&P 500 Pure Value ETF PORTFOLIO SUMMARY October 31, 2006 --------------------------------------------------------------------------------
INCEPTION DATE PORTFOLIO STATISTICS -------------- -------------------- 3/1/2006 Net Assets ($million): $21.2
INDUSTRY BREAKDOWN (AS A PERCENTAGE OF NET ASSETS) ------------------ 1.9% Aerospace & Defense 0.9% Auto Components 3.0% Automobiles 2.1% Beverages 0.2% Building Products 0.7% Capital Markets 2.9% Chemicals 5.9% Commercial Banks 2.2% Commercial Services & Supplies 1.0% Containers & Packaging 1.9% Diversified Financial Services 6.2% Diversified Telecommunication Services 5.5% Electric Utilities 1.3% Electronic Equipment & Instruments 0.9% Energy Equipment & Services 3.1% Food & Staples Retailing 2.5% Food Products 1.9% Gas Utilities 1.1% Health Care Providers & Services 2.7% Household Durables 1.6% Independent Power Producers & Energy Traders 0.3% Industrial Conglomerates 8.7% Insurance 3.1% IT Services 0.8% Leisure Equipment & Products 2.6% Machinery 3.1% Metals & Mining 8.5% Multi-Utilities 4.2% Multiline Retail 3.1% Oil, Gas & Consumable Fuels 3.1% Paper & Forest Products 2.7% Real Estate Investment Trusts (REITs) 3.0% Road & Rail 0.5% Semiconductors & Semiconductor Equipment 4.1% Specialty Retail 0.9% Textiles, Apparel & Luxury Goods 0.7% Thrifts & Mortgage Finance 0.8% Tobacco 0.0% Short-Term Investments(a) 0.3% Other Assets & Liabilities
(a) Amount represents less than 0.05% of net assets. ANNUAL REPORT 25 Rydex S&P 500 Pure Growth ETF PORTFOLIO SUMMARY October 31, 2006 --------------------------------------------------------------------------------
INCEPTION DATE PORTFOLIO STATISTICS -------------- -------------------- 3/1/2006 Net Assets ($million): $17.6
INDUSTRY BREAKDOWN (AS A PERCENTAGE OF NET ASSETS) ------------------ 1.2% Aerospace & Defense 0.8% Auto Components 1.2% Automobiles 1.1% Beverages 1.2% Biotechnology 1.6% Capital Markets 1.1% Chemicals 0.5% Commercial Banks 0.6% Commercial Services & Supplies 0.3% Communications Equipment 4.1% Computers & Peripherals 2.1% Consumer Finance 1.0% Containers & Packaging 1.5% Diversified Consumer Services 1.4% Diversified Financial Services 0.2% Electronic Equipment & Instruments 0.6% Energy Equipment & Services 1.9% Food & Staples Retailing 2.8% Food Products 5.1% Health Care Equipment & Supplies 9.1% Health Care Providers & Services 0.7% Health Care Technology 5.4% Hotels Restaurants & Leisure 4.5% Household Durables 1.9% Household Products 1.4% Insurance 1.2% Internet & Catalog Retail 3.8% Internet Software & Services 2.0% IT Services 2.6% Life Sciences Tools & Services 0.9% Machinery 2.2% Media 1.9% Multiline Retail 7.0% Oil, Gas & Consumable Fuels 5.5% Pharmaceuticals 3.0% Semiconductors & Semiconductor Equipment 4.2% Software 6.6% Specialty Retail 2.2% Textiles, Apparel & Luxury Goods 2.8% Thrifts & Mortgage Finance 0.7% Tobacco 0.1% Short-Term Investments 0.0% Other Assets & Liabilities(a)
(a) Amount represents less than 0.05% of net assets. ANNUAL REPORT 26 Rydex S&P Midcap 400 Pure Value ETF PORTFOLIO SUMMARY October 31, 2006 --------------------------------------------------------------------------------
INCEPTION DATE PORTFOLIO STATISTICS -------------- -------------------- 3/1/2006 Net Assets ($million): $15.0
INDUSTRY BREAKDOWN (AS A PERCENTAGE OF NET ASSETS) ------------------ 1.7% Airlines 4.8% Auto Components 5.5% Chemicals 0.2% Commercial Banks 2.9% Commercial Services & Supplies 0.4% Communications Equipment 1.5% Containers & Packaging 10.5% Electric Utilities 4.3% Electronic Equipment & Instruments 2.0% Food & Staples Retailing 1.0% Food Products 3.7% Gas Utilities 0.6% Health Care Providers & Services 1.9% Hotels Restaurants & Leisure 2.7% Household Durables 0.5% Independent Power Producers & Energy Traders 1.8% Industrial Conglomerates 9.9% Insurance 0.3% Leisure Equipment & Products 4.1% Machinery 0.6% Media 3.8% Metals & Mining 11.9% Multi-Utilities 0.9% Multiline Retail 0.3% Oil, Gas & Consumable Fuels 2.2% Paper & Forest Products 4.6% Real Estate Investment Trusts (REITs) 4.0% Road & Rail 3.1% Semiconductors & Semiconductor Equipment 0.6% Software 2.7% Specialty Retail 1.5% Thrifts & Mortgage Finance 1.4% Tobacco 0.3% Trading Companies & Distributors 1.6% Wireless Telecommunication Services 0.0% Short-Term Investments(a) 0.2% Other Assets & Liabilities
(a) Amount represents less than 0.05% of net assets. ANNUAL REPORT 27 Rydex S&P Midcap 400 Pure Growth ETF PORTFOLIO SUMMARY October 31, 2006 --------------------------------------------------------------------------------
INCEPTION DATE PORTFOLIO STATISTICS -------------- -------------------- 3/1/2006 Net Assets ($million): $22.5
INDUSTRY BREAKDOWN (AS A PERCENTAGE OF NET ASSETS) ------------------ 1.4% Aerospace & Defense 2.5% Air Freight & Logistics 2.8% Airlines 1.0% Automobiles 0.9% Beverages 2.2% Biotechnology 5.8% Capital Markets 5.1% Commercial Services & Supplies 1.6% Communications Equipment 1.8% Computers & Peripherals 0.7% Construction & Engineering 6.0% Diversified Consumer Services 2.3% Electronic Equipment & Instruments 1.0% Energy Equipment & Services 6.6% Health Care Equipment & Supplies 3.0% Health Care Providers & Services 3.1% Hotels Restaurants & Leisure 3.3% Household Durables 1.2% Household Products 1.7% Insurance 7.8% IT Services 1.8% Life Sciences Tools & Services 1.7% Machinery 0.6% Media 0.3% Office Electronics 6.8% Oil, Gas & Consumable Fuels 3.9% Pharmaceuticals 2.4% Semiconductors & Semiconductor Equipment 2.9% Software 15.3% Specialty Retail 1.0% Textiles, Apparel & Luxury Goods 0.7% Thrifts & Mortgage Finance 0.8% Trading Companies & Distributors 0.2% Short-Term Investments (0.2)% Other Assets & Liabilities
ANNUAL REPORT 28 Rydex S&P Smallcap 600 Pure Value ETF PORTFOLIO SUMMARY October 31, 2006 --------------------------------------------------------------------------------
INCEPTION DATE PORTFOLIO STATISTICS -------------- -------------------- 3/1/2006 Net Assets ($million): $6.0
INDUSTRY BREAKDOWN (AS A PERCENTAGE OF NET ASSETS) ------------------ 0.6% Aerospace & Defense 0.8% Air Freight & Logistics 0.2% Airlines 1.8% Auto Components 1.3% Automobiles 0.7% Building Products 2.0% Capital Markets 6.2% Chemicals 2.6% Commercial Banks 6.1% Commercial Services & Supplies 0.4% Communications Equipment 0.7% Computers & Peripherals 1.0% Construction & Engineering 0.3% Construction Materials 3.8% Containers & Packaging 0.1% Distributors 4.4% Electric Utilities 3.0% Electrical Equipment 5.1% Electronic Equipment & Instruments 0.2% Energy Equipment & Services 1.7% Food & Staples Retailing 2.0% Food Products 6.4% Gas Utilities 0.8% Health Care Equipment & Supplies 1.8% Health Care Providers & Services 2.4% Hotels Restaurants & Leisure 3.0% Household Durables 1.6% Industrial Conglomerates 3.9% Insurance 1.4% IT Services 1.4% Leisure Equipment & Products 0.3% Life Sciences Tools & Services 2.6% Machinery 5.4% Metals & Mining 1.6% Multi-Utilities 0.5% Multiline Retail 3.3% Paper & Forest Products 3.7% Real Estate Investment Trusts (REITs) 0.7% Road & Rail 0.3% Semiconductors & Semiconductor Equipment 0.4% Software 7.4% Specialty Retail 3.4% Textiles, Apparel & Luxury Goods 0.2% Thrifts & Mortgage Finance 1.5% Tobacco 0.6% Trading Companies & Distributors 0.2% Water Utilities 0.0% Short-Term Investments(a) 0.2% Other Assets & Liabilities
(a) Amount represents less than 0.05% of net assets. ANNUAL REPORT 29 Rydex S&P Smallcap 600 Pure Growth ETF PORTFOLIO SUMMARY October 31, 2006 --------------------------------------------------------------------------------
INCEPTION DATE PORTFOLIO STATISTICS -------------- -------------------- 3/1/2006 Net Assets ($million): $7.8
INDUSTRY BREAKDOWN (AS A PERCENTAGE OF NET ASSETS) ------------------ 1.9% Aerospace & Defense 0.4% Air Freight & Logistics 0.7% Automobiles 0.3% Building Products 0.8% Capital Markets 3.4% Commercial Banks 0.6% Commercial Services & Supplies 0.4% Communications Equipment 2.2% Computers & Peripherals 0.9% Construction Materials 1.1% Consumer Finance 4.6% Diversified Consumer Services 1.3% Diversified Financial Services 3.7% Electronic Equipment & Instruments 1.8% Energy Equipment & Services 0.7% Food Products 10.7% Health Care Equipment & Supplies 7.9% Health Care Providers & Services 1.2% Health Care Technology 5.9% Hotels Restaurants & Leisure 1.5% Household Durables 1.5% Insurance 1.2% Internet & Catalog Retail 5.6% Internet Software & Services 2.5% IT Services 2.4% Leisure Equipment & Products 1.0% Life Sciences Tools & Services 0.7% Machinery 1.2% Media 7.6% Oil, Gas & Consumable Fuels 1.6% Personal Products 5.0% Pharmaceuticals 2.0% Road & Rail 0.7% Semiconductors & Semiconductor Equipment 4.5% Software 6.9% Specialty Retail 1.7% Textiles, Apparel & Luxury Goods 1.8% Thrifts & Mortgage Finance 0.1% Short-Term Investments 0.0% Other Assets & Liabilities(a)
(a) Amount represents less than 0.05% of net assets. ANNUAL REPORT 30 RYDEX S&P EQUAL WEIGHT ETF SCHEDULE OF INVESTMENTS October 31, 2006 --------------------------------------------------------------------------------
MARKET SHARES VALUE ------------------------------------------------------------------------------ COMMON STOCKS 99.9% AEROSPACE & DEFENSE 2.0% Boeing Co. ..................................... 44,711 $3,570,621 General Dynamics Corp. ......................... 47,481 3,375,899 Goodrich Corp. ................................. 88,206 3,889,003 Honeywell International, Inc. .................. 85,145 3,586,307 L-3 Communications Holdings, Inc. .............. 43,964 3,539,981 Lockheed Martin Corp. .......................... 40,631 3,532,053 Northrop Grumman Corp. ......................... 49,029 3,255,035 Raytheon Co. ................................... 71,644 3,578,618 Rockwell Collins, Inc. ......................... 62,931 3,655,033 United Technologies Corp. ...................... 53,152 3,493,149 -------------- TOTAL AEROSPACE & DEFENSE 35,475,699 -------------- AIR FREIGHT & LOGISTICS 0.4% FedEx Corp. .................................... 31,940 3,658,408 United Parcel Service, Inc. -- Class B.......... 46,730 3,521,105 -------------- TOTAL AIR FREIGHT & LOGISTICS 7,179,513 -------------- AIRLINES 0.2% Southwest Airlines Co. ......................... 202,746 3,047,272 -------------- TOTAL AIRLINES 3,047,272 -------------- AUTO COMPONENTS 0.4% Goodyear Tire & Rubber Co.*..................... 225,244 3,452,991 Johnson Controls, Inc. ......................... 46,463 3,788,593 -------------- TOTAL AUTO COMPONENTS 7,241,584 --------------
MARKET SHARES VALUE ------------------------------------------------------------------------------ AUTOMOBILES 0.6% Ford Motor Co. ................................. 402,435 $3,332,162 General Motors Corp. ........................... 103,832 3,625,813 Harley-Davidson, Inc. .......................... 54,987 3,773,758 -------------- TOTAL AUTOMOBILES 10,731,733 -------------- BEVERAGES 1.5% Anheuser-Busch Cos., Inc. ...................... 72,116 3,419,741 Brown-Forman Corp. -- Class B................... 44,364 3,202,637 Coca-Cola Co. (The)............................. 75,707 3,537,031 Coca-Cola Enterprises, Inc. .................... 163,144 3,267,774 Constellation Brands, Inc. -- Class A*.......... 122,310 3,362,302 Molson Coors Brewing Co. -- Class B............. 49,726 3,539,497 Pepsi Bottling Group, Inc. ..................... 98,378 3,110,712 PepsiCo, Inc. .................................. 52,138 3,307,635 -------------- TOTAL BEVERAGES 26,747,329 -------------- BIOTECHNOLOGY 1.0% Amgen, Inc.*.................................... 48,460 3,678,598 Biogen Idec, Inc.*.............................. 77,072 3,668,627 Genzyme Corp.*.................................. 49,315 3,329,256 Gilead Sciences, Inc.*.......................... 52,728 3,632,959 Medimmune, Inc.*................................ 113,615 3,640,225 -------------- TOTAL BIOTECHNOLOGY 17,949,665 -------------- BUILDING PRODUCTS 0.4% American Standard Cos., Inc. ................... 77,470 3,431,147 Masco Corp. .................................... 119,028 3,291,124 -------------- TOTAL BUILDING PRODUCTS 6,722,271 --------------
See Notes to Financial Statements. ANNUAL REPORT 31 RYDEX S&P EQUAL WEIGHT ETF SCHEDULE OF INVESTMENTS (continued) October 31, 2006 --------------------------------------------------------------------------------
MARKET SHARES VALUE ------------------------------------------------------------------------------ COMMON STOCKS (CONTINUED) CAPITAL MARKETS 3.4% Ameriprise Financial, Inc. ..................... 72,681 $3,743,072 Bank of New York Co., Inc....................... 96,666 3,322,410 Bear Stearns Cos., Inc. ........................ 24,307 3,678,864 Charles Schwab Corp. ........................... 197,200 3,592,984 E*Trade Financial Corp.*........................ 139,414 3,245,558 Lehman Brothers Holdings, Inc. ................. 46,819 3,644,391 Federated Investors, Inc. -- Class B............ 98,295 3,370,536 Franklin Resources, Inc. ....................... 32,247 3,674,868 Goldman Sachs Group, Inc. ...................... 20,824 3,952,187 Janus Capital Group, Inc. ...................... 171,284 3,439,383 Legg Mason, Inc. ............................... 33,301 2,997,756 Mellon Financial Corp. ......................... 87,413 3,391,624 Merrill Lynch & Co., Inc. ...................... 43,888 3,836,689 Morgan Stanley.................................. 47,895 3,660,615 Northern Trust Corp. ........................... 59,053 3,467,592 State Street Corp. ............................. 52,817 3,392,436 T. Rowe Price Group, Inc. ...................... 71,077 3,362,653 -------------- TOTAL CAPITAL MARKETS 59,773,618 -------------- CHEMICALS 2.6% Air Products & Chemicals, Inc. ................. 50,783 3,538,052 Ashland, Inc. .................................. 52,560 3,106,296 Dow Chemical Co. (The).......................... 86,657 3,534,739 Du Pont (E.I.) de Nemours & Co. ................ 80,530 3,688,274
MARKET SHARES VALUE ------------------------------------------------------------------------------ Eastman Chemical Co. ........................... 62,823 $3,827,177 Ecolab, Inc. ................................... 80,149 3,634,757 Hercules, Inc.*................................. 210,795 3,836,469 International Flavors & Fragrances, Inc. ....... 85,227 3,620,443 Monsanto Co. ................................... 75,982 3,359,924 PPG Industries, Inc. ........................... 50,817 3,475,883 Praxair, Inc. .................................. 58,831 3,544,568 Rohm & Haas Co. ................................ 74,464 3,858,724 Sigma-Aldrich Corp. ............................ 45,993 3,454,534 -------------- TOTAL CHEMICALS 46,479,840 -------------- COMMERCIAL BANKS 4.1% AmSouth Bancorporation.......................... 114,958 3,474,031 BB&T Corp. ..................................... 77,678 3,380,547 Comerica, Inc. ................................. 59,066 3,437,051 Commerce Bancorp, Inc. ......................... 98,214 3,429,633 Compass Bancshares, Inc. ....................... 58,270 3,278,270 Fifth Third Bancorp............................. 87,176 3,473,964 First Horizon National Corp. ................... 86,695 3,408,847 Huntington Bancshares, Inc. .................... 139,662 3,409,149 KeyCorp......................................... 90,224 3,350,919 M&T Bank Corp. ................................. 28,119 3,425,175 Marshall & Ilsley Corp. ........................ 69,888 3,350,431 National City Corp. ............................ 93,562 3,485,185 North Fork Bancorporation, Inc. ................ 120,737 3,450,663 PNC Financial Services Group, Inc. ............. 46,757 3,274,393 Regions Financial Corp. ........................ 91,574 3,475,233
See Notes to Financial Statements. ANNUAL REPORT 32 RYDEX S&P EQUAL WEIGHT ETF SCHEDULE OF INVESTMENTS (continued) October 31, 2006 --------------------------------------------------------------------------------
MARKET SHARES VALUE ------------------------------------------------------------------------------ COMMON STOCKS (CONTINUED) SunTrust Banks, Inc. ........................... 43,871 $3,465,370 Synovus Financial Corp. ........................ 114,106 3,352,434 U.S. Bancorp.................................... 101,741 3,442,915 Wachovia Corp. ................................. 61,815 3,430,733 Wells Fargo & Co. .............................. 94,244 3,420,115 Zions Bancorp................................... 43,702 3,513,641 -------------- TOTAL COMMERCIAL BANKS 71,728,699 -------------- COMMERCIAL SERVICES & SUPPLIES 1.9% Allied Waste Industries, Inc.*.................. 333,230 4,048,745 Avery Dennison Corp. ........................... 56,551 3,570,630 Cintas Corp. ................................... 88,126 3,648,416 Equifax, Inc. .................................. 91,772 3,490,089 Monster Worldwide, Inc.*........................ 84,040 3,404,460 Pitney-Bowes, Inc. ............................. 76,203 3,559,442 R.R. Donnelley & Sons Co. ...................... 102,662 3,476,135 Robert Half International, Inc. ................ 104,672 3,825,762 Waste Management, Inc. ......................... 96,801 3,628,102 -------------- TOTAL COMMERCIAL SERVICES & SUPPLIES 32,651,781 -------------- COMMUNICATIONS EQUIPMENT 2.2% Avaya, Inc.*.................................... 297,350 3,809,053 ADC Telecommunications, Inc.*................... 235,094 3,364,195 Ciena Corp.*.................................... 112,007 2,633,285 Cisco Systems, Inc.*............................ 148,390 3,580,651 Comverse Technology, Inc.*...................... 153,859 3,349,510
MARKET SHARES VALUE ------------------------------------------------------------------------------ Corning, Inc.*.................................. 145,597 $2,974,547 JDS Uniphase Corp.*............................. 189,540 2,754,016 Juniper Networks, Inc.*......................... 215,660 3,713,665 Lucent Technologies, Inc.*...................... 1,457,002 3,540,515 Motorola, Inc. ................................. 136,545 3,148,728 QUALCOMM, Inc. ................................. 90,816 3,304,794 Tellabs, Inc.*.................................. 314,557 3,315,431 -------------- TOTAL COMMUNICATIONS EQUIPMENT 39,488,390 -------------- COMPUTERS & PERIPHERALS 2.2% Apple Computer, Inc.*........................... 45,383 3,679,654 Dell, Inc.*..................................... 156,146 3,799,032 EMC Corp.*...................................... 295,016 3,613,946 Hewlett-Packard Co. ............................ 92,450 3,581,513 International Business Machines Corp. .......... 40,562 3,745,089 Lexmark International, Inc. -- Class A*......... 59,076 3,756,643 NCR Corp.*...................................... 92,894 3,856,959 Network Appliance, Inc.*........................ 98,293 3,587,694 QLogic Corp.*................................... 175,539 3,612,593 SanDisk Corp.*.................................. 56,956 2,739,584 Sun Microsystems, Inc.*......................... 643,482 3,494,107 -------------- TOTAL COMPUTERS & PERIPHERALS 39,466,814 -------------- CONSTRUCTION & ENGINEERING 0.2% Fluor Corp. .................................... 43,350 3,399,941 -------------- TOTAL CONSTRUCTION & ENGINEERING 3,399,941 --------------
See Notes to Financial Statements. ANNUAL REPORT 33 RYDEX S&P EQUAL WEIGHT ETF SCHEDULE OF INVESTMENTS (continued) October 31, 2006 --------------------------------------------------------------------------------
MARKET SHARES VALUE ------------------------------------------------------------------------------ COMMON STOCKS (CONTINUED) CONSTRUCTION MATERIALS 0.2% Vulcan Materials Co. ........................... 42,799 $3,487,263 -------------- TOTAL CONSTRUCTION MATERIALS 3,487,263 -------------- CONSUMER FINANCE 0.6% American Express Co. ........................... 62,777 3,629,138 Capital One Financial Corp. .................... 44,756 3,550,494 SLM Corp. ...................................... 64,824 3,155,632 -------------- TOTAL CONSUMER FINANCE 10,335,264 -------------- CONTAINERS & PACKAGING 1.0% Ball Corp. ..................................... 81,034 3,370,204 Bemis Co. ...................................... 103,875 3,492,277 Pactiv Corp.*................................... 120,977 3,730,931 Sealed Air Corp. ............................... 63,398 3,773,449 Temple-Inland, Inc. ............................ 81,432 3,211,678 -------------- TOTAL CONTAINERS & PACKAGING 17,578,539 -------------- DISTRIBUTORS 0.2% Genuine Parts Co. .............................. 78,452 3,571,135 -------------- TOTAL DISTRIBUTORS 3,571,135 -------------- DIVERSIFIED CONSUMER SERVICES 0.3% Apollo Group, Inc. -- Class A*.................. 68,146 2,518,676 H&R Block, Inc. ................................ 155,693 3,403,449 -------------- TOTAL DIVERSIFIED CONSUMER SERVICES 5,922,125 -------------- DIVERSIFIED FINANCIAL SERVICES 1.2% Bank of America Corp. .......................... 65,056 3,504,567 Chicago Mercantile Exchange Holdings, Inc. ..... 7,163 3,588,663
MARKET SHARES VALUE ------------------------------------------------------------------------------ CIT Group, Inc. ................................ 72,775 $3,787,939 Citigroup, Inc. ................................ 68,319 3,426,881 JPMorgan Chase & Co. ........................... 72,039 3,417,530 Moody's Corp. .................................. 53,047 3,517,016 -------------- TOTAL DIVERSIFIED FINANCIAL SERVICES 21,242,596 -------------- DIVERSIFIED TELECOMMUNICATION SERVICES 1.6% AT&T Corp. ..................................... 104,894 3,592,619 BellSouth Corp. ................................ 79,986 3,607,369 CenturyTel, Inc. ............................... 84,638 3,405,833 Citizens Communications Co. .................... 246,548 3,614,394 Embarq Corp. ................................... 67,949 3,285,334 Qwest Communications International, Inc.*....... 380,390 3,282,766 Verizon Communications, Inc. ................... 93,840 3,472,080 Windstream Corp. ............................... 256,333 3,516,889 -------------- TOTAL DIVERSIFIED TELECOMMUNICATION SERVICES 27,777,284 -------------- ELECTRIC UTILITIES 2.3% Allegheny Energy, Inc.*......................... 85,110 3,662,283 American Electric Power Co., Inc. .............. 92,965 3,851,540 Edison International............................ 82,049 3,646,258 Entergy Corp. .................................. 43,199 3,707,770 Exelon Corp. ................................... 57,017 3,533,914 FirstEnergy Corp. .............................. 60,310 3,549,243 FPL Group, Inc. ................................ 75,890 3,870,390 Pinnacle West Capital Corp. .................... 75,368 3,603,344 PPL Corp. ...................................... 102,627 3,542,684
See Notes to Financial Statements. ANNUAL REPORT 34 RYDEX S&P EQUAL WEIGHT ETF SCHEDULE OF INVESTMENTS (continued) October 31, 2006 --------------------------------------------------------------------------------
MARKET SHARES VALUE ------------------------------------------------------------------------------ COMMON STOCKS (CONTINUED) Progress Energy, Inc. .......................... 77,930 $3,584,780 Southern Co. ................................... 98,020 3,567,928 -------------- TOTAL ELECTRIC UTILITIES 40,120,134 -------------- ELECTRICAL EQUIPMENT 0.9% American Power Conversion Corp. ................ 161,665 4,887,133 Cooper Industries Ltd., -- Class A.............. 41,049 3,671,833 Emerson Electric Co. ........................... 40,826 3,445,714 Rockwell Automation, Inc. ...................... 58,000 3,596,000 -------------- TOTAL ELECTRICAL EQUIPMENT 15,600,680 -------------- ELECTRONIC EQUIPMENT & INSTRUMENTS 1.4% Agilent Technologies, Inc.*..................... 109,452 3,896,491 Jabil Circuit, Inc. ............................ 123,451 3,544,278 Molex, Inc. .................................... 87,638 3,058,566 Sanmina-SCI Corp.*.............................. 960,149 3,792,589 Solectron Corp.*................................ 985,341 3,291,039 Symbol Technologies, Inc. ...................... 261,854 3,909,480 Tektronix, Inc. ................................ 119,513 3,629,610 -------------- TOTAL ELECTRONIC EQUIPMENT & INSTRUMENTS 25,122,053 -------------- ENERGY EQUIPMENT & SERVICES 2.5% Baker Hughes, Inc. ............................. 55,048 3,801,064 BJ Services Co. ................................ 111,351 3,358,346 Duke Energy Corp. .............................. 111,407 3,524,918 Halliburton Co. ................................ 116,348 3,763,858
MARKET SHARES VALUE ------------------------------------------------------------------------------ Nabors Industries Ltd.*......................... 112,657 $3,478,848 National Oilwell Varco, Inc.*................... 57,859 3,494,684 Noble Corp. .................................... 53,004 3,715,580 Rowan Cos., Inc. ............................... 106,035 3,539,448 Schlumberger Ltd. .............................. 61,242 3,863,145 Smith International, Inc. ...................... 89,506 3,533,697 Transocean, Inc.*............................... 48,629 3,527,548 Weatherford International Ltd.*................. 84,910 3,488,103 -------------- TOTAL ENERGY EQUIPMENT & SERVICES 43,089,239 -------------- FOOD & STAPLES RETAILING 1.7% Costco Wholesale Corp. ......................... 66,910 3,571,656 CVS Corp. ...................................... 95,222 2,988,066 Kroger Co. ..................................... 147,945 3,327,283 Safeway, Inc. .................................. 114,061 3,348,831 SUPERVALU, Inc. ................................ 111,868 3,736,391 Sysco Corp. .................................... 100,692 3,522,206 Wal-Mart Stores, Inc. .......................... 69,462 3,423,088 Walgreen Co. ................................... 67,307 2,939,970 Whole Foods Market, Inc. ....................... 59,393 3,791,649 -------------- TOTAL FOOD & STAPLES RETAILING 30,649,140 -------------- FOOD PRODUCTS 2.4% Archer-Daniels-Midland Co. ..................... 87,555 3,370,868 Campbell Soup Co. .............................. 90,387 3,378,666 ConAgra Foods, Inc. ............................ 143,750 3,759,062 Dean Foods Co.*................................. 80,770 3,383,455 General Mills, Inc. ............................ 64,985 3,692,448 H.J. Heinz Co. ................................. 81,814 3,449,278 Hershey Co. (The)............................... 65,750 3,478,833
See Notes to Financial Statements. ANNUAL REPORT 35 RYDEX S&P EQUAL WEIGHT ETF SCHEDULE OF INVESTMENTS (continued) October 31, 2006 --------------------------------------------------------------------------------
MARKET SHARES VALUE ------------------------------------------------------------------------------ COMMON STOCKS (CONTINUED) Kellogg Co. .................................... 67,259 $3,383,800 McCormick & Co, Inc. ........................... 91,963 3,439,416 Sara Lee Corp. ................................. 226,409 3,871,594 Tyson Foods, Inc. -- Class A.................... 214,965 3,106,244 Wm. Wrigley Jr. Co. ............................ 74,104 3,849,703 -------------- TOTAL FOOD PRODUCTS 42,163,367 -------------- GAS UTILITIES 0.4% Nicor, Inc. .................................... 77,957 3,582,904 Peoples Energy Corp. ........................... 81,011 3,539,370 -------------- TOTAL GAS UTILITIES 7,122,274 -------------- HEALTH CARE EQUIPMENT & SUPPLIES 2.2% Bausch & Lomb, Inc. ............................ 64,428 3,449,475 Baxter International, Inc. ..................... 74,734 3,435,522 Becton Dickinson & Co. ......................... 48,963 3,428,879 Biomet, Inc. ................................... 100,291 3,795,011 Boston Scientific Corp.*........................ 205,615 3,271,335 C.R. Bard, Inc. ................................ 44,400 3,639,024 Hospira, Inc.*.................................. 91,789 3,336,530 Medtronic, Inc. ................................ 72,729 3,540,448 St Jude Medical, Inc.*.......................... 89,742 3,082,638 Stryker Corp. .................................. 66,781 3,491,979 Zimmer Holdings, Inc.*.......................... 50,046 3,603,812 -------------- TOTAL HEALTH CARE EQUIPMENT & SUPPLIES 38,074,653 -------------- HEALTH CARE PROVIDERS & SERVICES 3.4% Aetna, Inc. .................................... 84,580 3,486,388 AmerisourceBergen Corp. ........................ 73,719 3,479,537
MARKET SHARES VALUE ------------------------------------------------------------------------------ Cardinal Health, Inc. .......................... 48,743 $3,190,229 Caremark Rx, Inc. .............................. 57,429 2,827,230 Cigna Corp. .................................... 28,990 3,391,250 Coventry Health Care, Inc.*..................... 60,398 2,835,686 Express Scripts, Inc.*.......................... 40,641 2,589,644 HCA, Inc. ...................................... 68,133 3,442,079 Health Management Associates, Inc. -- Class A... 162,388 3,199,044 Humana, Inc.*................................... 51,078 3,064,680 Laboratory Corp. of America Holdings*........... 50,076 3,429,705 Manor Care, Inc. ............................... 64,018 3,072,224 McKesson Corp. ................................. 62,141 3,112,643 Medco Health Solutions, Inc.*................... 54,791 2,931,318 Patterson Cos., Inc.*........................... 105,952 3,480,523 Quest Diagnostics, Inc. ........................ 53,861 2,679,046 Tenet Healthcare Corp.*......................... 404,716 2,857,295 UnitedHealth Group, Inc. ....................... 65,052 3,173,237 WellPoint, Inc.*................................ 42,847 3,270,083 -------------- TOTAL HEALTH CARE PROVIDERS & SERVICES 59,511,841 -------------- HEALTH CARE TECHNOLOGY 0.2% IMS Health, Inc. ............................... 124,267 3,460,836 -------------- TOTAL HEALTH CARE TECHNOLOGY 3,460,836 -------------- HOTELS RESTAURANTS & LEISURE 2.5% Carnival Corp. ................................. 77,421 3,779,693 Darden Restaurants, Inc. ....................... 86,722 3,633,652
See Notes to Financial Statements. ANNUAL REPORT 36 RYDEX S&P EQUAL WEIGHT ETF SCHEDULE OF INVESTMENTS (continued) October 31, 2006 --------------------------------------------------------------------------------
MARKET SHARES VALUE ------------------------------------------------------------------------------ COMMON STOCKS (CONTINUED) Harrah's Entertainment, Inc. ................... 52,959 $3,936,442 Hilton Hotels Corp. ............................ 120,447 3,483,327 International Game Technology, Inc. ............ 85,490 3,634,180 Marriott International, Inc. -- Class A......... 87,176 3,641,342 McDonald's Corp. ............................... 90,128 3,778,166 Starbucks Corp.*................................ 101,190 3,819,922 Starwood Hotels & Resorts Worldwide, Inc. ...... 56,782 3,392,157 Yum! Brands, Inc. .............................. 63,248 3,760,726 Wendy's International, Inc. .................... 111,408 3,854,717 Wyndham Worldwide Corp.*........................ 115,814 3,416,513 -------------- TOTAL HOTELS RESTAURANTS & LEISURE 44,130,837 -------------- HOUSEHOLD DURABLES 2.5% Black & Decker Corp. ........................... 41,777 3,504,255 Centex Corp. ................................... 63,476 3,319,795 D.R. Horton, Inc. .............................. 138,312 3,240,650 Fortune Brands, Inc. ........................... 44,687 3,438,665 Harman International Industries, Inc. .......... 40,922 4,188,367 KB Home......................................... 74,894 3,365,736 Leggett & Platt, Inc. .......................... 135,792 3,170,743 Lennar Corp. -- Class A......................... 73,318 3,481,138
MARKET SHARES VALUE ------------------------------------------------------------------------------ Newell Rubbermaid, Inc. ........................ 117,799 $3,390,255 Pulte Homes, Inc. .............................. 106,133 3,289,062 Snap-On, Inc. .................................. 75,157 3,534,634 Stanley Works................................... 67,220 3,203,033 Whirlpool Corp. ................................ 37,893 3,294,038 -------------- TOTAL HOUSEHOLD DURABLES 44,420,371 -------------- HOUSEHOLD PRODUCTS 0.8% Clorox Co. ..................................... 55,528 3,584,888 Colgate-Palmolive Co. .......................... 54,533 3,488,476 Kimberly-Clark Corp. ........................... 52,285 3,477,998 Procter & Gamble Co. ........................... 55,310 3,506,101 -------------- TOTAL HOUSEHOLD PRODUCTS 14,057,463 -------------- INDEPENDENT POWER PRODUCERS & ENERGY TRADERS 0.8% AES Corp.*...................................... 164,106 3,608,691 Constellation Energy Group, Inc. ............... 56,296 3,512,870 Dynegy, Inc. -- Class A*........................ 556,631 3,384,317 TXU Corp. ...................................... 54,603 3,447,087 -------------- TOTAL INDEPENDENT POWER PRODUCERS & ENERGY TRADERS 13,952,965 -------------- INDUSTRIAL CONGLOMERATES 0.8% 3M Co. ......................................... 45,527 3,589,349 General Electric Co. ........................... 96,614 3,392,117 Textron, Inc. .................................. 39,787 3,617,832 Tyco International Ltd. ........................ 127,903 3,764,185 -------------- TOTAL INDUSTRIAL CONGLOMERATES 14,363,483 -------------- INSURANCE 4.5% ACE Ltd. ....................................... 60,891 3,486,010 AFLAC, Inc. .................................... 75,048 3,371,156 Allstate Corp................................... 56,188 3,447,696
See Notes to Financial Statements. ANNUAL REPORT 37 RYDEX S&P EQUAL WEIGHT ETF SCHEDULE OF INVESTMENTS (continued) October 31, 2006 --------------------------------------------------------------------------------
MARKET SHARES VALUE ------------------------------------------------------------------------------ COMMON STOCKS (CONTINUED) Ambac Financial Group, Inc. .................... 39,864 $3,328,245 American International Group, Inc. ............. 51,544 3,462,211 Aon Corp. ...................................... 98,877 3,439,931 Chubb Corp. .................................... 65,029 3,456,291 Cincinnati Financial Corp. ..................... 70,084 3,199,335 Genworth Financial, Inc. -- Class A............. 95,299 3,186,799 Hartford Financial Services Group, Inc. ........ 39,192 3,416,367 Lincoln National Corp. ......................... 54,782 3,468,248 Loews Corp. .................................... 87,463 3,404,060 MBIA, Inc. ..................................... 52,981 3,285,882 Marsh & McLennan Cos, Inc. ..................... 122,792 3,614,997 MetLife, Inc. .................................. 60,134 3,435,455 Principal Financial Group, Inc. ................ 62,960 3,556,610 Progressive Corp. .............................. 140,079 3,385,709 Prudential Financial, Inc. ..................... 45,801 3,523,471 SAFECO Corp. ................................... 57,565 3,349,707 St. Paul Travelers Cos., Inc. .................. 73,025 3,733,768 Torchmark Corp. ................................ 54,220 3,344,290 UnumProvident Corp. ............................ 176,663 3,494,394 XL Capital Ltd. -- Class A...................... 49,746 3,509,580 -------------- TOTAL INSURANCE 78,900,212 -------------- INTERNET & CATALOG RETAIL 0.2% Amazon.Com, Inc.*............................... 105,743 4,027,751 -------------- TOTAL INTERNET & CATALOG RETAIL 4,027,751 --------------
MARKET SHARES VALUE ------------------------------------------------------------------------------ INTERNET SOFTWARE & SERVICES 0.8% eBay, Inc.*..................................... 119,936 $3,853,544 Google, Inc.* -- Class A........................ 8,299 3,953,560 Yahoo!, Inc.*................................... 114,733 3,022,067 VeriSign, Inc.*................................. 156,554 3,237,537 -------------- TOTAL INTERNET SOFTWARE & SERVICES 14,066,708 -------------- IT SERVICES 2.3% Affiliated Computer Services, Inc. -- Class A*............................................ 63,689 3,406,088 Automatic Data Processing, Inc. ................ 71,135 3,516,914 Computer Sciences Corp.*........................ 69,748 3,686,182 Convergys Corp.*................................ 161,440 3,424,142 Electronic Data Systems Corp. .................. 139,245 3,527,076 First Data Corp. ............................... 138,115 3,349,289 Fiserv, Inc.*................................... 71,641 3,539,066 Paychex, Inc. .................................. 94,498 3,730,781 Sabre Holdings Corp. -- Class A................. 149,203 3,792,740 Unisys Corp.*................................... 609,082 3,983,396 Western Union Co. (The)*........................ 169,564 3,738,886 -------------- TOTAL IT SERVICES 39,694,560 -------------- LEISURE EQUIPMENT & PRODUCTS 0.9% Brunswick Corp. ................................ 112,379 3,539,939 Eastman Kodak Co. .............................. 152,071 3,710,532 Hasbro, Inc. ................................... 153,201 3,970,970 Mattel, Inc. ................................... 174,873 3,957,376 -------------- TOTAL LEISURE EQUIPMENT & PRODUCTS 15,178,817 --------------
See Notes to Financial Statements. ANNUAL REPORT 38 RYDEX S&P EQUAL WEIGHT ETF SCHEDULE OF INVESTMENTS (continued) October 31, 2006 --------------------------------------------------------------------------------
MARKET SHARES VALUE ------------------------------------------------------------------------------ COMMON STOCKS (CONTINUED) LIFE SCIENCES TOOLS & SERVICES 1.3% Applera Corp. -- Applied Biosystems Group....... 101,328 $3,779,534 Fisher Scientific International, Inc.*.......... 42,367 3,627,463 Millipore Corp.*................................ 53,197 3,432,802 PerkinElmer, Inc. .............................. 178,450 3,811,692 Thermo Electron Corp.*.......................... 84,316 3,614,627 Waters Corp.*................................... 75,157 3,742,819 -------------- TOTAL LIFE SCIENCES TOOLS & SERVICES 22,008,937 -------------- MACHINERY 2.6% Caterpillar, Inc. .............................. 51,254 3,111,630 Cummins, Inc. .................................. 29,865 3,792,258 Danaher Corp. .................................. 50,731 3,640,964 Deere & Co. .................................... 42,204 3,592,826 Dover Corp. .................................... 70,496 3,348,560 Eaton Corp. .................................... 48,154 3,487,794 Illinois Tool Works, Inc. ...................... 76,074 3,646,227 Ingersoll-Rand Co., Ltd. -- Class A............. 86,807 3,186,685 ITT Industries, Inc. ........................... 68,081 3,702,925 Navistar International Corp.*................... 129,974 3,604,179 PACCAR, Inc. ................................... 61,694 3,652,902 Pall Corp. ..................................... 109,803 3,502,716 Parker Hannifin Corp. .......................... 44,557 3,726,302 -------------- TOTAL MACHINERY 45,995,968 -------------- MEDIA 3.5% CBS Corp. -- Class B............................ 117,377 3,396,890 Clear Channel Communications, Inc. ............. 114,022 3,973,667
MARKET SHARES VALUE ------------------------------------------------------------------------------ Comcast Corp. -- Class A*....................... 98,212 $3,994,282 EW Scripps Co. -- Class A....................... 72,920 3,606,623 Dow Jones & Co., Inc. .......................... 100,262 3,518,194 Gannett Co, Inc. ............................... 61,393 3,630,782 Interpublic Group of Cos., Inc.*................ 342,993 3,742,054 McGraw-Hill Cos., Inc. ......................... 59,543 3,820,874 Meredith Corp. ................................. 67,817 3,560,392 New York Times Co. -- Class A................... 146,354 3,537,376 News Corp. -- Class A........................... 177,083 3,692,181 Omnicom Group, Inc. ............................ 36,542 3,707,186 Time Warner, Inc. .............................. 199,074 3,983,471 Tribune Co. .................................... 106,400 3,546,312 Univision Communications, Inc. -- Class A*...... 97,096 3,404,186 Viacom, Inc. -- Class B*........................ 93,962 3,657,001 Walt Disney Co. ................................ 111,131 3,496,181 -------------- TOTAL MEDIA 62,267,652 -------------- METALS & MINING 1.6% Alcoa, Inc. .................................... 121,069 3,500,105 Allegheny Technologies, Inc. ................... 54,979 4,328,497 Freeport-McMoRan Copper & Gold, Inc. -- Class B............................................. 65,270 3,947,529 Newmont Mining Corp. ........................... 77,394 3,503,626 Nucor Corp. .................................... 72,593 4,240,157
See Notes to Financial Statements. ANNUAL REPORT 39 RYDEX S&P EQUAL WEIGHT ETF SCHEDULE OF INVESTMENTS (continued) October 31, 2006 --------------------------------------------------------------------------------
MARKET SHARES VALUE ------------------------------------------------------------------------------ COMMON STOCKS (CONTINUED) Phelps Dodge Corp. ............................. 40,152 $4,030,458 United States Steel Corp. ...................... 58,260 3,938,376 -------------- TOTAL METALS & MINING 27,488,748 -------------- MULTI-UTILITIES 2.6% Ameren Corp. ................................... 64,353 3,481,497 CenterPoint Energy, Inc. ....................... 240,422 3,721,733 CMS Energy Corp.*............................... 234,442 3,490,841 Consolidated Edison, Inc. ...................... 73,980 3,576,933 Dominion Resources, Inc. ....................... 43,878 3,553,679 DTE Energy Co. ................................. 82,351 3,741,206 KeySpan Corp. .................................. 82,237 3,337,177 NiSource, Inc. ................................. 159,398 3,709,192 PG&E Corp. ..................................... 81,774 3,527,730 Public Service Enterprise Group, Inc. .......... 54,406 3,321,486 Sempra Energy................................... 68,667 3,642,098 TECO Energy, Inc. .............................. 218,699 3,606,347 Xcel Energy, Inc. .............................. 165,903 3,661,479 -------------- TOTAL MULTI-UTILITIES 46,371,398 -------------- MULTILINE RETAIL 2.0% Big Lots, Inc.*................................. 170,287 3,589,650 Dillard's, Inc. -- Class A...................... 101,235 3,054,260 Dollar General Corp. ........................... 235,886 3,309,481 Family Dollar Stores, Inc. ..................... 115,762 3,409,191 Federated Department Stores, Inc. .............. 80,058 3,515,347 J.C. Penney Holding Co., Inc. .................. 51,418 3,868,176 Kohl's Corp.*................................... 49,952 3,526,611 Nordstrom, Inc. ................................ 79,883 3,782,460
MARKET SHARES VALUE ------------------------------------------------------------------------------ Sears Holdings Corp.*........................... 21,236 $3,705,045 Target Corp. ................................... 63,129 3,735,974 -------------- TOTAL MULTILINE RETAIL 35,496,195 -------------- OFFICE ELECTRONICS 0.2% Xerox Corp.*.................................... 225,760 3,837,920 -------------- TOTAL OFFICE ELECTRONICS 3,837,920 -------------- OIL, GAS & CONSUMABLE FUELS 3.9% Anadarko Petroleum Corp. ....................... 77,232 3,585,109 Apache Corp. ................................... 53,597 3,500,956 Chesapeake Energy Corp. ........................ 116,583 3,781,952 Chevron Corp. .................................. 54,703 3,676,042 ConocoPhillips.................................. 58,088 3,499,221 Consol Energy, Inc. ............................ 110,412 3,907,481 Devon Energy Corp. ............................. 52,297 3,495,531 El Paso Corp. .................................. 254,493 3,486,554 EOG Resources, Inc. ............................ 57,320 3,813,500 Exxon Mobil Corp. .............................. 52,262 3,732,552 Hess Corp. ..................................... 84,114 3,566,434 Kinder Morgan, Inc. ............................ 32,296 3,394,310 Marathon Oil Corp. ............................. 46,143 3,986,755 Murphy Oil Corp. ............................... 72,202 3,405,046 Occidental Petroleum Corp. ..................... 76,230 3,578,236 Sunoco, Inc. ................................... 54,289 3,590,132 Valero Energy Corp. ............................ 67,242 3,518,774 Williams Cos., Inc. ............................ 147,938 3,614,125 XTO Energy, Inc. ............................... 83,426 3,892,657 -------------- TOTAL OIL, GAS & CONSUMABLE FUELS 69,025,367 --------------
See Notes to Financial Statements. ANNUAL REPORT 40 RYDEX S&P EQUAL WEIGHT ETF SCHEDULE OF INVESTMENTS (continued) October 31, 2006 --------------------------------------------------------------------------------
MARKET SHARES VALUE ------------------------------------------------------------------------------ COMMON STOCKS (CONTINUED) PAPER & FOREST PRODUCTS 0.8% International Paper Co. ........................ 97,367 $3,247,190 Louisiana-Pacific Corp. ........................ 175,681 3,474,970 MeadWestvaco Corp. ............................. 131,404 3,616,238 Weyerhaeuser Co. ............................... 54,305 3,453,255 -------------- TOTAL PAPER & FOREST PRODUCTS 13,791,653 -------------- PERSONAL PRODUCTS 0.6% Alberto-Culver Co. -- Class B................... 67,633 3,436,433 Avon Products, Inc. ............................ 113,699 3,457,586 Estee Lauder Cos., Inc.......................... 84,323 3,405,806 -------------- TOTAL PERSONAL PRODUCTS 10,299,825 -------------- PHARMACEUTICALS 2.7% Abbott Laboratories............................. 68,348 3,247,214 Allergan, Inc. ................................. 30,054 3,471,237 Barr Pharmaceuticals, Inc.*..................... 62,399 3,267,836 Bristol-Myers Squibb Co. ....................... 135,688 3,358,278 Eli Lilly & Co. ................................ 61,225 3,429,212 Forest Laboratories, Inc.*...................... 67,843 3,320,236 Johnson & Johnson............................... 52,833 3,560,944 King Pharmaceuticals, Inc.*..................... 206,479 3,454,394 Merck & Co., Inc. .............................. 81,947 3,722,033 Mylan Laboratories, Inc. ....................... 159,153 3,262,637 Pfizer, Inc. ................................... 119,785 3,192,270 Schering-Plough Corp. .......................... 159,272 3,526,282
MARKET SHARES VALUE ------------------------------------------------------------------------------ Watson Pharmaceuticals, Inc.*................... 126,619 $3,407,317 Wyeth........................................... 67,477 3,443,351 -------------- TOTAL PHARMACEUTICALS 47,663,241 -------------- REAL ESTATE INVESTMENT TRUSTS (REITS) 2.3% Apartment Investment & Management Co. -- Class A............................................. 62,914 3,606,230 Archstone-Smith Trust........................... 61,446 3,699,664 Boston Properties, Inc. ........................ 32,129 3,432,341 Equity Office Properties Trust.................. 86,930 3,694,525 Equity Residential Properties Trust............. 66,540 3,633,749 Kimco Realty Corp. ............................. 80,391 3,571,772 Plum Creek Timber Co., Inc. .................... 99,890 3,590,047 Prologis........................................ 57,705 3,650,995 Public Storage, Inc. ........................... 38,154 3,422,795 Simon Property Group, Inc. ..................... 36,917 3,584,641 Vornado Realty Trust............................ 30,775 3,669,919 -------------- TOTAL REAL ESTATE INVESTMENT TRUSTS (REITS) 39,556,678 -------------- REAL ESTATE MANAGEMENT & DEVELOPMENT 0.2% Realogy Corp.*.................................. 161,039 4,151,585 -------------- TOTAL REAL ESTATE MANAGEMENT & DEVELOPMENT 4,151,585 -------------- ROAD & RAIL 1.1% Burlington Northern Santa Fe Corp. ............. 47,753 3,702,290 CSX Corp. ...................................... 104,603 3,731,189
See Notes to Financial Statements. ANNUAL REPORT 41 RYDEX S&P EQUAL WEIGHT ETF SCHEDULE OF INVESTMENTS (continued) October 31, 2006 --------------------------------------------------------------------------------
MARKET SHARES VALUE ------------------------------------------------------------------------------ COMMON STOCKS (CONTINUED) Norfolk Southern Corp. ......................... 76,786 $4,036,640 Ryder System, Inc. ............................. 63,761 3,357,017 Union Pacific Corp. ............................ 39,568 3,586,048 -------------- TOTAL ROAD & RAIL 18,413,184 -------------- SEMICONDUCTORS & SEMICONDUCTOR EQUIPMENT 3.6% Advanced Micro Devices, Inc.*................... 123,444 2,625,654 Altera Corp.*................................... 170,314 3,140,590 Analog Devices, Inc. ........................... 106,732 3,396,212 Applied Materials, Inc. ........................ 193,391 3,363,070 Broadcom Corp. -- Class A*...................... 119,242 3,609,455 Freescale Semiconductor, Inc. -- Class A*....... 90,042 3,541,352 Intel Corp. .................................... 170,229 3,632,687 KLA-Tencor Corp. ............................... 73,248 3,601,604 Linear Technology Corp. ........................ 99,381 3,092,737 LSI Logic Corp.*................................ 394,826 3,968,001 Maxim Integrated Products, Inc. ................ 105,023 3,151,740 Micron Technology, Inc.*........................ 188,180 2,719,201 National Semiconductor Corp. ................... 134,751 3,273,102 Novellus Systems, Inc.*......................... 118,651 3,280,700 NVIDIA Corp.*................................... 115,615 4,031,495 PMC -- Sierra, Inc.*............................ 497,150 3,296,105 Teradyne, Inc.*................................. 237,919 3,335,624
MARKET SHARES VALUE ------------------------------------------------------------------------------ Texas Instruments, Inc. ........................ 106,325 $3,208,889 Xilinx, Inc. ................................... 150,188 3,831,296 -------------- TOTAL SEMICONDUCTORS & SEMICONDUCTOR EQUIPMENT 64,099,514 -------------- SOFTWARE 2.6% Adobe Systems, Inc.*............................ 89,693 3,430,757 Autodesk, Inc.*................................. 94,730 3,481,328 BMC Software, Inc.*............................. 123,467 3,742,285 CA, Inc. ....................................... 139,326 3,449,712 Citrix Systems, Inc.*........................... 94,253 2,783,291 Compuware Corp.*................................ 428,830 3,447,793 Electronic Arts, Inc.*.......................... 62,307 3,295,417 Intuit, Inc.*................................... 102,423 3,615,532 Microsoft Corp. ................................ 126,555 3,633,394 Novell, Inc.*................................... 526,516 3,159,096 Oracle Corp.*................................... 205,682 3,798,947 Parametric Technology Corp.*.................... 199,380 3,895,885 Symantec Corp.*................................. 169,737 3,367,582 -------------- TOTAL SOFTWARE 45,101,019 -------------- SPECIALTY RETAIL 3.2% AutoNation, Inc.*............................... 162,013 3,248,361 AutoZone, Inc.*................................. 35,064 3,927,168 Bed Bath & Beyond, Inc.*........................ 90,458 3,644,553 Best Buy Co., Inc. ............................. 63,693 3,519,038 Circuit City Stores, Inc. ...................... 128,033 3,454,330 Gap, Inc. ...................................... 189,049 3,973,810 Home Depot, Inc. ............................... 90,153 3,365,411 Limited Brands, Inc. ........................... 122,933 3,622,835 Lowe's Cos., Inc. .............................. 114,394 3,447,835 Office Depot, Inc.*............................. 84,999 3,569,108
See Notes to Financial Statements. ANNUAL REPORT 42 RYDEX S&P EQUAL WEIGHT ETF SCHEDULE OF INVESTMENTS (continued) October 31, 2006 --------------------------------------------------------------------------------
MARKET SHARES VALUE ------------------------------------------------------------------------------ COMMON STOCKS (CONTINUED) OfficeMax, Inc. ................................ 82,279 $3,914,835 RadioShack Corp. ............................... 173,514 3,095,490 Sherwin-Williams Co. ........................... 61,495 3,642,349 Staples, Inc. .................................. 135,635 3,498,027 Tiffany & Co. .................................. 99,019 3,536,959 TJX Cos., Inc. ................................. 120,571 3,490,530 -------------- TOTAL SPECIALTY RETAIL 56,950,639 -------------- TEXTILES, APPAREL & LUXURY GOODS 1.0% Coach, Inc.*.................................... 100,118 3,968,677 Jones Apparel Group, Inc. ...................... 103,509 3,457,201 Liz Claiborne, Inc. ............................ 86,438 3,645,090 Nike, Inc. -- Class B........................... 40,660 3,735,841 VF Corp. ....................................... 45,680 3,472,137 -------------- TOTAL TEXTILES, APPAREL & LUXURY GOODS 18,278,946 -------------- THRIFTS & MORTGAGE FINANCE 1.2% Countrywide Financial Corp. .................... 96,748 3,688,034 Federal Home Loan Mortgage Corp. ............... 53,042 3,659,368 Federal National Mortgage Association........... 63,175 3,743,750 MGIC Investment Corp. .......................... 54,507 3,202,831 Sovereign Bancorp, Inc. ........................ 158,443 3,780,450 Washington Mutual, Inc. ........................ 79,730 3,372,579 -------------- TOTAL THRIFTS & MORTGAGE FINANCE 21,447,012 --------------
MARKET SHARES VALUE ------------------------------------------------------------------------------ TOBACCO 0.6% Altria Group, Inc. ............................. 40,618 $3,303,462 Reynolds American, Inc. ........................ 51,257 3,237,392 UST, Inc. ...................................... 62,846 3,366,032 -------------- TOTAL TOBACCO 9,906,886 -------------- TRADING COMPANIES & DISTRIBUTORS 0.2% W.W. Grainger, Inc. ............................ 50,091 3,645,623 -------------- TOTAL TRADING COMPANIES & DISTRIBUTORS 3,645,623 -------------- WIRELESS TELECOMMUNICATION SERVICES 0.4% ALLTEL Corp. ................................... 59,376 3,165,335 Sprint Nextel Corp. ............................ 197,590 3,692,957 -------------- TOTAL WIRELESS TELECOMMUNICATION SERVICES 6,858,292 -------------- TOTAL COMMON STOCKS (Cost $1,624,584,477) 1,758,362,021 -------------- SHORT TERM INVESTMENTS 0.1% SSgA Prime Money Market Fund.................... 739,839 739,839 -------------- TOTAL SHORT TERM INVESTMENTS (Cost $739,839) 739,839 -------------- TOTAL INVESTMENTS 100.0% (Cost $1,625,324,316) 1,759,101,860 -------------- OTHER ASSETS IN EXCESS OF LIABILITIES--0.0%(A) 695,248 -------------- NET ASSETS--100.0% $1,759,797,108 ------------------------------------------------------------------------------
* Non-Income Producing Security. (a) Amount represents less than 0.05% of net assets. See Notes to Financial Statements. ANNUAL REPORT 43 RYDEX RUSSELL TOP 50 ETF SCHEDULE OF INVESTMENTS October 31, 2006 --------------------------------------------------------------------------------
MARKET SHARES VALUE -------------------------------------------------------------------------- COMMON STOCKS 99.9% AEROSPACE & DEFENSE 2.2% Boeing Co. ..................................... 48,530 $3,875,606 United Technologies Corp. ...................... 61,360 4,032,579 ------------ TOTAL AEROSPACE & DEFENSE 7,908,185 ------------ AIR FREIGHT & LOGISTICS 0.8% United Parcel Service, Inc. -- Class B.......... 39,108 2,946,788 ------------ TOTAL AIR FREIGHT & LOGISTICS 2,946,788 ------------ BEVERAGES 3.3% Coca-Cola Co (The).............................. 123,685 5,778,563 PepsiCo, Inc. .................................. 100,302 6,363,159 ------------ TOTAL BEVERAGES 12,141,722 ------------ BIOTECHNOLOGY 2.1% Amgen, Inc.*.................................... 71,577 5,433,410 Genentech, Inc.*................................ 28,325 2,359,473 ------------ TOTAL BIOTECHNOLOGY 7,792,883 ------------ CAPITAL MARKETS 3.8% Goldman Sachs Group, Inc. ...................... 21,583 4,096,237 Merrill Lynch & Co., Inc. ...................... 55,914 4,888,002 Morgan Stanley.................................. 65,007 4,968,485 ------------ TOTAL CAPITAL MARKETS 13,952,724 ------------ COMMERCIAL BANKS 3.8% Wachovia Corp. ................................. 114,484 6,353,862 Wells Fargo & Co. .............................. 203,939 7,400,946 ------------ TOTAL COMMERCIAL BANKS 13,754,808 ------------ COMMUNICATIONS EQUIPMENT 3.5% Cisco Systems, Inc.*............................ 370,519 8,940,624 QUALCOMM, Inc. ................................. 101,734 3,702,100 ------------ TOTAL COMMUNICATIONS EQUIPMENT 12,642,724 ------------
MARKET SHARES VALUE -------------------------------------------------------------------------- COMPUTERS & PERIPHERALS 5.1% Dell, Inc.*..................................... 140,028 $3,406,881 Hewlett-Packard Co. ............................ 170,089 6,589,248 International Business Machines Corp. .......... 94,098 8,688,068 ------------ TOTAL COMPUTERS & PERIPHERALS 18,684,197 ------------ CONSUMER FINANCE 1.0% American Express Co. ........................... 65,678 3,796,845 ------------ TOTAL CONSUMER FINANCE 3,796,845 ------------ DIVERSIFIED FINANCIAL SERVICES 11.0% Bank of America Corp. .......................... 276,990 14,921,451 Citigroup, Inc. ................................ 301,730 15,134,777 JPMorgan Chase & Co. ........................... 210,877 10,004,005 ------------ TOTAL DIVERSIFIED FINANCIAL SERVICES 40,060,233 ------------ DIVERSIFIED TELECOMMUNICATION SERVICES 5.4% AT&T Corp. ..................................... 235,984 8,082,452 BellSouth Corp. ................................ 109,784 4,951,258 Verizon Communications, Inc. ................... 177,057 6,551,109 ------------ TOTAL DIVERSIFIED TELECOMMUNICATION SERVICES 19,584,819 ------------ FOOD & STAPLES RETAILING 2.0% Wal-Mart Stores, Inc. .......................... 149,231 7,354,104 ------------ TOTAL FOOD & STAPLES RETAILING 7,354,104 ------------ HEALTH CARE EQUIPMENT & SUPPLIES 1.0% Medtronic, Inc. ................................ 73,263 3,566,443 ------------ TOTAL HEALTH CARE EQUIPMENT & SUPPLIES 3,566,443 ------------
See Notes to Financial Statements. ANNUAL REPORT 44 RYDEX RUSSELL TOP 50 ETF SCHEDULE OF INVESTMENTS (continued) October 31, 2006 --------------------------------------------------------------------------------
MARKET SHARES VALUE -------------------------------------------------------------------------- COMMON STOCKS (CONTINUED) HEALTH CARE PROVIDERS & SERVICES 1.1% UnitedHealth Group, Inc. ....................... 81,757 $3,988,106 ------------ TOTAL HEALTH CARE PROVIDERS & SERVICES 3,988,106 ------------ HOUSEHOLD PRODUCTS 3.5% Procter & Gamble Co. ........................... 199,171 12,625,450 ------------ TOTAL HOUSEHOLD PRODUCTS 12,625,450 ------------ INDUSTRIAL CONGLOMERATES 7.1% 3M Co. ......................................... 45,760 3,607,718 General Electric Co. ........................... 631,131 22,159,010 ------------ TOTAL INDUSTRIAL CONGLOMERATES 25,766,728 ------------ INSURANCE 2.5% American International Group, Inc. ............. 133,678 8,979,151 ------------ TOTAL INSURANCE 8,979,151 ------------ INTERNET SOFTWARE & SERVICES 1.6% Google, Inc. -- Class A*........................ 12,672 6,036,814 ------------ TOTAL INTERNET SOFTWARE & SERVICES 6,036,814 ------------ MEDIA 4.6% Comcast Corp. -- Class A*....................... 118,238 4,808,739 News Corp. -- Class A........................... 139,750 2,913,788 Time Warner, Inc. .............................. 243,065 4,863,731 Walt Disney Co. ................................ 133,218 4,191,038 ------------ TOTAL MEDIA 16,777,296 ------------
MARKET SHARES VALUE -------------------------------------------------------------------------- OIL, GAS & CONSUMABLE FUELS 11.3% Chevron Corp. .................................. 134,521 $9,039,811 ConocoPhillips.................................. 100,180 6,034,843 Exxon Mobil Corp. .............................. 367,227 26,227,353 ------------ TOTAL OIL, GAS & CONSUMABLE FUELS 41,302,007 ------------ PHARMACEUTICALS 10.6% Abbott Laboratories............................. 92,629 4,400,804 Johnson & Johnson............................... 179,714 12,112,724 Merck & Co., Inc. .............................. 132,470 6,016,787 Pfizer, Inc. ................................... 444,727 11,851,974 Wyeth........................................... 81,692 4,168,743 ------------ TOTAL PHARMACEUTICALS 38,551,032 ------------ SEMICONDUCTORS & SEMICONDUCTOR EQUIPMENT 2.1% Intel Corp. .................................... 353,068 7,534,471 ------------ TOTAL SEMICONDUCTORS & SEMICONDUCTOR EQUIPMENT 7,534,471 ------------ SOFTWARE 5.5% Microsoft Corp. ................................ 538,671 15,465,245 Oracle Corp.*................................... 241,220 4,455,333 ------------ TOTAL SOFTWARE 19,920,578 ------------ SPECIALTY RETAIL 1.3% Home Depot, Inc. ............................... 128,544 4,798,548 ------------ TOTAL SPECIALTY RETAIL 4,798,548 ------------ TOBACCO 2.8% Altria Group, Inc. ............................. 126,739 10,307,683 ------------ TOTAL TOBACCO 10,307,683 ------------ WIRELESS TELECOMMUNICATION SERVICES 0.9% Sprint Nextel Corp. ............................ 175,923 3,288,001 ------------ TOTAL WIRELESS TELECOMMUNICATION SERVICES 3,288,001 ------------ TOTAL COMMON STOCKS (Cost $343,381,777) 364,062,340 --------------------------------------------------------------------------
See Notes to Financial Statements. ANNUAL REPORT 45 RYDEX RUSSELL TOP 50 ETF SCHEDULE OF INVESTMENTS (continued) October 31, 2006 --------------------------------------------------------------------------------
MARKET SHARES VALUE -------------------------------------------------------------------------- SHORT TERM INVESTMENTS 0.1% SSgA Prime Money Market Fund.................... 426,120 $426,120 ------------ TOTAL SHORT TERM INVESTMENTS (Cost $426,121) 426,120 ------------ TOTAL INVESTMENTS 100.0% (Cost $343,807,897) 364,488,460 ------------ OTHER ASSETS IN EXCESS OF LIABILITIES--0.0%(A) 52,955 ------------ NET ASSETS--100.0% $364,541,415 --------------------------------------------------------------------------
* Non-Income Producing Security. (a) Amount represents less than 0.05% of net assets. See Notes to Financial Statements. ANNUAL REPORT 46 RYDEX S&P 500 PURE VALUE ETF SCHEDULE OF INVESTMENTS October 31, 2006 --------------------------------------------------------------------------------
MARKET SHARES VALUE ------------------------------------------------------------------------ COMMON STOCKS 99.7% AEROSPACE & DEFENSE 1.9% Northrop Grumman Corp. ......................... 2,257 $149,842 Raytheon Co. ................................... 1,873 93,556 United Technologies Corp. ...................... 2,440 160,357 ----------- TOTAL AEROSPACE & DEFENSE 403,755 ----------- AUTO COMPONENTS 0.9% Johnson Controls, Inc. ......................... 2,251 183,546 ----------- TOTAL AUTO COMPONENTS 183,546 ----------- AUTOMOBILES 3.0% Ford Motor Co. ................................. 34,073 282,124 General Motors Corp. ........................... 10,417 363,762 ----------- TOTAL AUTOMOBILES 645,886 ----------- BEVERAGES 2.1% Coca-Cola Enterprises, Inc. .................... 7,758 155,393 Constellation Brands, Inc. -- Class A*.......... 3,230 88,793 Molson Coors Brewing Co. -- Class B............. 2,869 204,215 ----------- TOTAL BEVERAGES 448,401 ----------- BUILDING PRODUCTS 0.2% Masco Corp. .................................... 1,900 52,535 ----------- TOTAL BUILDING PRODUCTS 52,535 ----------- CAPITAL MARKETS 0.7% Bear Stearns Cos., Inc. ........................ 468 70,832 Morgan Stanley.................................. 1,126 86,060 ----------- TOTAL CAPITAL MARKETS 156,892 ----------- CHEMICALS 2.9% Ashland, Inc. .................................. 2,948 174,227 Dow Chemical Co. (The).......................... 1,301 53,068 Du Pont (E.I.) de Nemours & Co. ................ 1,682 77,035
MARKET SHARES VALUE ------------------------------------------------------------------------ Eastman Chemical Co. ........................... 2,786 $169,723 PPG Industries, Inc. ........................... 921 62,996 Rohm & Haas Co. ................................ 1,429 74,051 ----------- TOTAL CHEMICALS 611,100 ----------- COMMERCIAL BANKS 5.9% AmSouth Bancorporation.......................... 2,652 80,143 BB&T Corp. ..................................... 1,783 77,596 Comerica, Inc. ................................. 909 52,895 First Horizon National Corp. ................... 3,460 136,047 Huntington Bancshares, Inc. .................... 4,338 105,891 KeyCorp......................................... 2,927 108,709 National City Corp. ............................ 2,913 108,509 North Fork Bancorporation, Inc. ................ 3,401 97,201 PNC Financial Services Group, Inc. ............. 1,166 81,655 Regions Financial Corp. ........................ 2,965 112,522 SunTrust Banks, Inc. ........................... 1,275 100,712 U.S. Bancorp.................................... 1,716 58,069 Wachovia Corp. ................................. 1,054 58,497 Wells Fargo & Co. .............................. 1,914 69,459 ----------- TOTAL COMMERCIAL BANKS 1,247,905 ----------- COMMERCIAL SERVICES & SUPPLIES 2.2% Allied Waste Industries, Inc.*.................. 23,871 290,032 Avery Dennison Corp. ........................... 1,021 64,466 R.R. Donnelley & Sons Co. ...................... 3,116 105,508 ----------- TOTAL COMMERCIAL SERVICES & SUPPLIES 460,006 ----------- CONTAINERS & PACKAGING 1.0% Bemis Co. ...................................... 3,796 127,621 Temple-Inland, Inc. ............................ 2,390 94,262 ----------- TOTAL CONTAINERS & PACKAGING 221,883 -----------
See Notes to Financial Statements. ANNUAL REPORT 47 RYDEX S&P 500 PURE VALUE ETF SCHEDULE OF INVESTMENTS (continued) October 31, 2006 --------------------------------------------------------------------------------
MARKET SHARES VALUE ------------------------------------------------------------------------ COMMON STOCKS (CONTINUED) DIVERSIFIED FINANCIAL SERVICES 1.9% CIT Group, Inc. ................................ 1,703 $88,641 Citigroup, Inc. ................................ 2,307 115,719 JPMorgan Chase & Co. ........................... 4,310 204,467 ----------- TOTAL DIVERSIFIED FINANCIAL SERVICES 408,827 ----------- DIVERSIFIED TELECOMMUNICATION SERVICES 6.2% AT&T Corp. ..................................... 6,420 219,885 BellSouth Corp. ................................ 4,829 217,788 CenturyTel, Inc. ............................... 2,531 101,847 Citizens Communications Co. .................... 10,192 149,415 Embarq Corp. ................................... 2,443 118,119 Qwest Communications International, Inc.*....... 18,997 163,944 Verizon Communications, Inc. ................... 6,055 224,035 Windstream Corp. ............................... 9,432 129,407 ----------- TOTAL DIVERSIFIED TELECOMMUNICATION SERVICES 1,324,440 ----------- ELECTRIC UTILITIES 5.5% American Electric Power Co., Inc. .............. 3,752 155,445 Entergy Corp. .................................. 1,384 118,789 FirstEnergy Corp. .............................. 1,638 96,396 FPL Group, Inc. ................................ 1,820 92,820 Pinnacle West Capital Corp. .................... 3,412 163,128 PPL Corp. ...................................... 6,368 219,823 Progress Energy, Inc. .......................... 5,047 232,162 Southern Co. ................................... 2,526 91,947 ----------- TOTAL ELECTRIC UTILITIES 1,170,510 ----------- ELECTRONIC EQUIPMENT & INSTRUMENTS 1.3% Sanmina-SCI Corp.*.............................. 39,102 154,453 Solectron Corp.*................................ 34,117 113,951 ----------- TOTAL ELECTRONIC EQUIPMENT & INSTRUMENTS 268,404 -----------
MARKET SHARES VALUE ------------------------------------------------------------------------ ENERGY EQUIPMENT & SERVICES 0.9% Duke Energy Corp. .............................. 5,716 $180,854 ----------- TOTAL ENERGY EQUIPMENT & SERVICES 180,854 ----------- FOOD & STAPLES RETAILING 3.1% Costco Wholesale Corp. ......................... 1,931 103,077 CVS Corp. ...................................... 4,389 137,727 Safeway, Inc. .................................. 6,165 181,004 SUPERVALU, Inc. ................................ 7,373 246,258 ----------- TOTAL FOOD & STAPLES RETAILING 668,066 ----------- FOOD PRODUCTS 2.5% Archer-Daniels-Midland Co. ..................... 5,664 218,064 ConAgra Foods, Inc. ............................ 5,600 146,440 Tyson Foods, Inc. -- Class A.................... 11,683 168,819 ----------- TOTAL FOOD PRODUCTS 533,323 ----------- GAS UTILITIES 1.9% Nicor, Inc. .................................... 4,005 184,070 Peoples Energy Corp. ........................... 5,107 223,125 ----------- TOTAL GAS UTILITIES 407,195 ----------- HEALTH CARE PROVIDERS & SERVICES 1.1% McKesson Corp. ................................. 1,147 57,453 Tenet Healthcare Corp.*......................... 7,891 55,710 WellPoint, Inc.*................................ 1,596 121,807 ----------- TOTAL HEALTH CARE PROVIDERS & SERVICES 234,970 ----------- HOUSEHOLD DURABLES 2.7% Leggett & Platt, Inc. .......................... 3,507 81,889 Newell Rubbermaid, Inc. ........................ 3,530 101,593 Pulte Homes, Inc. .............................. 3,841 119,033 Snap-On, Inc. .................................. 2,309 108,592 Whirlpool Corp. ................................ 1,954 169,861 ----------- TOTAL HOUSEHOLD DURABLES 580,968 -----------
See Notes to Financial Statements. ANNUAL REPORT 48 RYDEX S&P 500 PURE VALUE ETF SCHEDULE OF INVESTMENTS (continued) October 31, 2006 --------------------------------------------------------------------------------
MARKET SHARES VALUE ------------------------------------------------------------------------ COMMON STOCKS (CONTINUED) INDEPENDENT POWER PRODUCERS & ENERGY TRADERS 1.6% Constellation Energy Group, Inc. ............... 1,580 $98,592 Dynegy, Inc. -- Class A*........................ 38,909 236,567 ----------- TOTAL INDEPENDENT POWER PRODUCERS & ENERGY TRADERS 335,159 ----------- INDUSTRIAL CONGLOMERATES 0.3% Textron, Inc. .................................. 605 55,013 ----------- TOTAL INDUSTRIAL CONGLOMERATES 55,013 ----------- INSURANCE 8.7% ACE Ltd. ....................................... 3,971 227,340 Allstate Corp................................... 1,811 111,123 Aon Corp. ...................................... 2,301 80,052 Chubb Corp. .................................... 3,186 169,336 Genworth Financial, Inc. -- Class A............. 4,050 135,432 Hartford Financial Services Group, Inc. ........ 947 82,550 Lincoln National Corp. ......................... 1,895 119,973 Loews Corp. .................................... 2,524 98,234 MetLife, Inc. .................................. 2,287 130,656 SAFECO Corp. ................................... 1,752 101,949 St. Paul Travelers Cos., Inc. .................. 3,339 170,723 UnumProvident Corp. ............................ 9,730 192,459 XL Capital Ltd. -- Class A...................... 3,111 219,481 ----------- TOTAL INSURANCE 1,839,308 ----------- IT SERVICES 3.1% Computer Sciences Corp.*........................ 3,512 185,609 Electronic Data Systems Corp. .................. 6,778 171,687 Sabre Holdings Corp. ........................... 4,454 113,221 Unisys Corp.*................................... 28,343 185,363 ----------- TOTAL IT SERVICES 655,880 -----------
MARKET SHARES VALUE ------------------------------------------------------------------------ LEISURE EQUIPMENT & PRODUCTS 0.8% Brunswick Corp. ................................ 1,137 $35,816 Eastman Kodak Co. .............................. 5,888 143,667 ----------- TOTAL LEISURE EQUIPMENT & PRODUCTS 179,483 ----------- MACHINERY 2.6% Caterpillar, Inc. .............................. 1,674 101,628 Cummins, Inc. .................................. 1,014 128,758 Deere & Co. .................................... 1,593 135,612 Ingersoll-Rand Co., Ltd. -- Class A............. 3,607 132,413 Navistar International Corp.*................... 1,660 46,032 ----------- TOTAL MACHINERY 544,443 ----------- METALS & MINING 3.1% Alcoa, Inc. .................................... 3,437 99,364 Nucor Corp. .................................... 1,597 93,281 Phelps Dodge Corp. ............................. 993 99,677 United States Steel Corp. ...................... 5,364 362,606 ----------- TOTAL METALS & MINING 654,928 ----------- MULTI-UTILITIES 8.5% Ameren Corp. ................................... 2,324 125,728 CenterPoint Energy, Inc. ....................... 8,615 133,360 CMS Energy Corp.*............................... 10,679 159,010 Consolidated Edison, Inc. ...................... 3,577 172,948 Dominion Resources, Inc. ....................... 900 72,891 DTE Energy Co. ................................. 3,757 170,681 KeySpan Corp. .................................. 5,566 225,868 NiSource, Inc. ................................. 8,148 189,604 PG&E Corp. ..................................... 3,268 140,982 Public Service Enterprise Group, Inc. .......... 970 59,218 Sempra Energy................................... 2,115 112,180 TECO Energy, Inc. .............................. 2,566 42,313 Xcel Energy, Inc. .............................. 8,965 197,858 ----------- TOTAL MULTI-UTILITIES 1,802,641 -----------
See Notes to Financial Statements. ANNUAL REPORT 49 RYDEX S&P 500 PURE VALUE ETF SCHEDULE OF INVESTMENTS (continued) October 31, 2006 --------------------------------------------------------------------------------
MARKET SHARES VALUE ------------------------------------------------------------------------ COMMON STOCKS (CONTINUED) MULTILINE RETAIL 4.2% Big Lots, Inc.*................................. 14,862 $313,291 Dillard's, Inc. -- Class A...................... 12,934 390,219 Federated Department Stores, Inc. .............. 2,708 118,908 Nordstrom, Inc. ................................ 1,379 65,296 ----------- TOTAL MULTILINE RETAIL 887,714 ----------- OIL, GAS & CONSUMABLE FUELS 3.1% El Paso Corp. .................................. 8,005 109,669 ConocoPhillips.................................. 4,152 250,117 Marathon Oil Corp. ............................. 1,733 149,731 Sunoco, Inc. ................................... 2,303 152,297 ----------- TOTAL OIL, GAS & CONSUMABLE FUELS 661,814 ----------- PAPER & FOREST PRODUCTS 3.1% International Paper Co. ........................ 5,912 197,165 Louisiana-Pacific Corp. ........................ 5,949 117,671 MeadWestvaco Corp. ............................. 6,136 168,863 Weyerhaeuser Co. ............................... 2,618 166,479 ----------- TOTAL PAPER & FOREST PRODUCTS 650,178 ----------- REAL ESTATE INVESTMENT TRUSTS (REITS) 2.7% Apartment Investment & Management Co. -- Class A............................................. 3,114 178,494 Archstone-Smith Trust........................... 1,084 65,268 Equity Office Properties Trust.................. 3,896 165,580 Equity Residential Properties Trust............. 1,125 61,436 Kimco Realty Corp. ............................. 2,476 110,009 ----------- TOTAL REAL ESTATE INVESTMENT TRUSTS (REITS) 580,787 ----------- ROAD & RAIL 3.0% CSX Corp. ...................................... 3,341 119,173 Ryder System, Inc. ............................. 7,320 385,398 Union Pacific Corp. ............................ 1,389 125,885 ----------- TOTAL ROAD & RAIL 630,456 -----------
MARKET SHARES VALUE ------------------------------------------------------------------------ SEMICONDUCTORS & SEMICONDUCTOR EQUIPMENT 0.5% Micron Technology, Inc.*........................ 8,029 $116,019 ----------- TOTAL SEMICONDUCTORS & SEMICONDUCTOR EQUIPMENT 116,019 ----------- SPECIALTY RETAIL 4.1% AutoNation, Inc.*............................... 8,037 161,142 Circuit City Stores, Inc. ...................... 8,615 232,433 Limited Brands, Inc. ........................... 4,584 135,090 OfficeMax, Inc. ................................ 7,190 342,100 ----------- TOTAL SPECIALTY RETAIL 870,765 ----------- TEXTILES, APPAREL & LUXURY GOODS 0.9% Jones Apparel Group, Inc. ...................... 5,505 183,867 ----------- TOTAL TEXTILES, APPAREL & LUXURY GOODS 183,867 ----------- THRIFTS & MORTGAGE FINANCE 0.7% Washington Mutual, Inc. ........................ 3,282 138,829 ----------- TOTAL THRIFTS & MORTGAGE FINANCE 138,829 ----------- TOBACCO 0.8% Reynolds American, Inc. ........................ 2,805 177,164 ----------- TOTAL TOBACCO 177,164 ----------- TOTAL COMMON STOCKS (Cost $20,162,938) 21,173,914 ----------- SHORT TERM INVESTMENTS 0.0%(a) SSgA Prime Money Market Fund.................... 100 100 ----------- TOTAL SHORT TERM INVESTMENTS (Cost $100) 100 ----------- TOTAL INVESTMENTS 99.7% (Cost $20,163,038) 21,174,014 ----------- OTHER ASSETS IN EXCESS OF LIABILITIES--0.3% 58,175 ----------- NET ASSETS--100.0% $21,232,189 ------------------------------------------------------------------------
* Non-Income Producing Security. (a) Amount represents less than 0.05% of net assets. See Notes to Financial Statements. ANNUAL REPORT 50 RYDEX S&P 500 PURE GROWTH ETF SCHEDULE OF INVESTMENTS October 31, 2006 --------------------------------------------------------------------------------
MARKET SHARES VALUE -------------------------------------------------------------------------- COMMON STOCKS 99.9% AEROSPACE & DEFENSE 1.2% General Dynamics Corp. ......................... 1,510 $107,361 L-3 Communications Holdings, Inc. .............. 1,370 110,312 ------------ TOTAL AEROSPACE & DEFENSE 217,673 ------------ AUTO COMPONENTS 0.8% Goodyear Tire & Rubber Co.*..................... 8,928 136,866 ------------ TOTAL AUTO COMPONENTS 136,866 ------------ AUTOMOBILES 1.2% Harley-Davidson, Inc. .......................... 3,199 219,547 ------------ TOTAL AUTOMOBILES 219,547 ------------ BEVERAGES 1.1% Anheuser-Busch Cos., Inc. ...................... 3,049 144,583 PepsiCo, Inc. .................................. 820 52,021 ------------ TOTAL BEVERAGES 196,604 ------------ BIOTECHNOLOGY 1.2% Amgen, Inc.*.................................... 720 54,655 Gilead Sciences, Inc.*.......................... 1,520 104,728 Medimmune, Inc.*................................ 1,610 51,585 ------------ TOTAL BIOTECHNOLOGY 210,968 ------------ CAPITAL MARKETS 1.6% Federated Investors, Inc. -- Class B............ 4,739 162,500 Janus Capital Group, Inc. ...................... 3,819 76,686 Legg Mason, Inc. ............................... 400 36,008 ------------ TOTAL CAPITAL MARKETS 275,194 ------------ CHEMICALS 1.1% Ecolab, Inc. ................................... 2,709 122,853 Sigma-Aldrich Corp. ............................ 1,040 78,115 ------------ TOTAL CHEMICALS 200,968 ------------
MARKET SHARES VALUE -------------------------------------------------------------------------- COMMERCIAL BANKS 0.5% Commerce Bancorp, Inc. ......................... 2,449 $85,519 ------------ TOTAL COMMERCIAL BANKS 85,519 ------------ COMMERCIAL SERVICES & SUPPLIES 0.6% Cintas Corp. ................................... 1,150 47,610 Equifax, Inc. .................................. 1,350 51,341 ------------ TOTAL COMMERCIAL SERVICES & SUPPLIES 98,951 ------------ COMMUNICATIONS EQUIPMENT 0.3% Cisco Systems, Inc.*............................ 2,010 48,501 ------------ TOTAL COMMUNICATIONS EQUIPMENT 48,501 ------------ COMPUTERS & PERIPHERALS 4.1% Dell, Inc.*..................................... 4,979 121,139 International Business Machines Corp. .......... 690 63,708 Lexmark International, Inc. -- Class A*......... 2,260 143,713 Network Appliance, Inc.*........................ 3,719 135,743 QLogic Corp.*................................... 7,808 160,689 SanDisk Corp.*.................................. 2,050 98,605 ------------ TOTAL COMPUTERS & PERIPHERALS 723,597 ------------ CONSUMER FINANCE 2.1% American Express Co. ........................... 760 43,936 Capital One Financial Corp. .................... 2,240 177,699 SLM Corp. ...................................... 3,019 146,965 ------------ TOTAL CONSUMER FINANCE 368,600 ------------ CONTAINERS & PACKAGING 1.0% Ball Corp. ..................................... 4,109 170,893 ------------ TOTAL CONTAINERS & PACKAGING 170,893 ------------
See Notes to Financial Statements. ANNUAL REPORT 51 RYDEX S&P 500 PURE GROWTH ETF SCHEDULE OF INVESTMENTS (continued) October 31, 2006 --------------------------------------------------------------------------------
MARKET SHARES VALUE -------------------------------------------------------------------------- COMMON STOCKS (CONTINUED) DIVERSIFIED CONSUMER SERVICES 1.5% Apollo Group, Inc. -- Class A*.................. 3,369 $124,518 H&R Block, Inc. ................................ 6,819 149,064 ------------ TOTAL DIVERSIFIED CONSUMER SERVICES 273,582 ------------ DIVERSIFIED FINANCIAL SERVICES 1.4% Chicago Mercantile Exchange Holdings, Inc. ..... 488 244,488 ------------ TOTAL DIVERSIFIED FINANCIAL SERVICES 244,488 ------------ ELECTRONIC EQUIPMENT & INSTRUMENTS 0.2% Jabil Circuit, Inc. ............................ 1,480 42,491 ------------ TOTAL ELECTRONIC EQUIPMENT & INSTRUMENTS 42,491 ------------ ENERGY EQUIPMENT & SERVICES 0.6% BJ Services Co. ................................ 2,240 67,558 Nabors Industries Ltd.*......................... 1,070 33,042 ------------ TOTAL ENERGY EQUIPMENT & SERVICES 100,600 ------------ FOOD & STAPLES RETAILING 1.9% Sysco Corp. .................................... 2,989 104,555 Wal-Mart Stores, Inc. .......................... 1,890 93,139 Walgreen Co. ................................... 1,920 83,866 Whole Foods Market, Inc. ....................... 960 61,286 ------------ TOTAL FOOD & STAPLES RETAILING 342,846 ------------ FOOD PRODUCTS 2.8% Campbell Soup Co. .............................. 3,269 122,195 General Mills, Inc. ............................ 2,809 159,607 Kellogg Co. .................................... 1,850 93,074 McCormick & Co, Inc. ........................... 2,030 75,922 Wm. Wrigley Jr. Co. ............................ 970 50,392 ------------ TOTAL FOOD PRODUCTS 501,190 ------------
MARKET SHARES VALUE -------------------------------------------------------------------------- HEALTH CARE EQUIPMENT & SUPPLIES 5.1% Becton Dickinson & Co. ......................... 810 $56,724 Biomet, Inc. ................................... 2,989 113,104 Boston Scientific Corp.*........................ 3,339 53,123 Hospira, Inc.*.................................. 3,899 141,729 Medtronic, Inc. ................................ 1,680 81,782 St Jude Medical, Inc.*.......................... 2,150 73,853 Stryker Corp. .................................. 3,629 189,760 Zimmer Holdings, Inc.*.......................... 2,699 194,355 ------------ TOTAL HEALTH CARE EQUIPMENT & SUPPLIES 904,430 ------------ HEALTH CARE PROVIDERS & SERVICES 9.1% AmerisourceBergen Corp. ........................ 4,439 209,521 Cardinal Health, Inc. .......................... 1,680 109,956 Caremark Rx, Inc. .............................. 2,749 135,333 Coventry Health Care, Inc.*..................... 3,139 147,376 Express Scripts, Inc.*.......................... 2,699 171,980 Health Management Associates, Inc. -- Class A... 4,419 87,054 Humana, Inc.*................................... 2,599 155,940 Laboratory Corp. of America Holdings*........... 750 51,368 Manor Care, Inc. ............................... 3,499 167,917 Patterson Cos., Inc.*........................... 2,939 96,546 Quest Diagnostics, Inc. ........................ 2,100 104,454 UnitedHealth Group, Inc. ....................... 3,379 164,828 ------------ TOTAL HEALTH CARE PROVIDERS & SERVICES 1,602,273 ------------ HEALTH CARE TECHNOLOGY 0.7% IMS Health, Inc. ............................... 4,609 128,361 ------------ TOTAL HEALTH CARE TECHNOLOGY 128,361 ------------
See Notes to Financial Statements. ANNUAL REPORT 52 RYDEX S&P 500 PURE GROWTH ETF SCHEDULE OF INVESTMENTS (continued) October 31, 2006 --------------------------------------------------------------------------------
MARKET SHARES VALUE -------------------------------------------------------------------------- COMMON STOCKS (CONTINUED) HOTELS RESTAURANTS & LEISURE 5.4% Darden Restaurants, Inc. ....................... 2,679 $112,250 International Game Technology, Inc. ............ 8,818 374,853 Starbucks Corp.*................................ 5,239 197,772 Starwood Hotels & Resorts Worldwide, Inc. ...... 1,030 61,532 Wendy's International, Inc. .................... 2,676 92,590 Yum! Brands, Inc. .............................. 1,860 110,596 ------------ TOTAL HOTELS RESTAURANTS & LEISURE 949,593 ------------ HOUSEHOLD DURABLES 4.5% Black & Decker Corp. ........................... 2,360 197,957 Centex Corp. ................................... 2,220 116,106 D.R. Horton, Inc. .............................. 4,949 115,955 Fortune Brands, Inc. ........................... 1,610 123,889 Harman International Industries, Inc. .......... 890 91,092 Lennar Corp. -- Class A......................... 3,169 150,464 ------------ TOTAL HOUSEHOLD DURABLES 795,463 ------------ HOUSEHOLD PRODUCTS 1.9% Clorox Co. ..................................... 2,130 137,513 Colgate-Palmolive Co. .......................... 2,230 142,653 Procter & Gamble Co. ........................... 1,000 63,390 ------------ TOTAL HOUSEHOLD PRODUCTS 343,556 ------------ INSURANCE 1.4% Ambac Financial Group, Inc. .................... 1,310 109,372 Progressive Corp. .............................. 5,439 131,461 ------------ TOTAL INSURANCE 240,833 ------------ INTERNET & CATALOG RETAIL 1.2% Amazon.Com, Inc.*............................... 5,469 208,314 ------------ TOTAL INTERNET & CATALOG RETAIL 208,314 ------------
MARKET SHARES VALUE -------------------------------------------------------------------------- INTERNET SOFTWARE & SERVICES 3.8% eBay, Inc.*..................................... 5,079 $163,188 Google, Inc.* -- Class A........................ 700 333,473 VeriSign, Inc.*................................. 2,889 59,745 Yahoo!, Inc.*................................... 4,459 117,450 ------------ TOTAL INTERNET SOFTWARE & SERVICES 673,856 ------------ IT SERVICES 2.0% Affiliated Computer Services, Inc. -- Class A*............................................ 1,930 103,216 First Data Corp. ............................... 5,519 133,836 Fiserv, Inc.*................................... 2,220 109,668 ------------ TOTAL IT SERVICES 346,720 ------------ LIFE SCIENCES TOOLS & SERVICES 2.6% Fisher Scientific International, Inc.*.......... 3,079 263,624 Millipore Corp.*................................ 769 49,624 Waters Corp.*................................... 2,819 140,386 ------------ TOTAL LIFE SCIENCES TOOLS & SERVICES 453,634 ------------ MACHINERY 0.9% Danaher Corp. .................................. 1,070 76,794 ITT Industries, Inc. ........................... 1,490 81,041 ------------ TOTAL MACHINERY 157,835 ------------ MEDIA 2.2% Clear Channel Communications, Inc. ............. 3,249 113,228 Dow Jones & Co., Inc. .......................... 2,320 81,409 Omnicom Group, Inc. ............................ 1,170 118,696 Univision Communications, Inc. -- Class A*...... 1,940 68,016 ------------ TOTAL MEDIA 381,349 ------------
See Notes to Financial Statements. ANNUAL REPORT 53 RYDEX S&P 500 PURE GROWTH ETF SCHEDULE OF INVESTMENTS (continued) October 31, 2006 --------------------------------------------------------------------------------
MARKET SHARES VALUE -------------------------------------------------------------------------- COMMON STOCKS (CONTINUED) MULTILINE RETAIL 1.9% Kohl's Corp.*................................... 2,529 $178,547 Sears Holdings Corp.*........................... 530 92,469 Target Corp. ................................... 1,000 59,180 ------------ TOTAL MULTILINE RETAIL 330,196 ------------ OIL, GAS & CONSUMABLE FUELS 7.0% Anadarko Petroleum Corp. ....................... 3,299 153,140 Apache Corp. ................................... 2,300 150,236 Chesapeake Energy Corp. ........................ 4,269 138,486 Devon Energy Corp. ............................. 3,409 227,857 EOG Resources, Inc. ............................ 1,820 121,085 Valero Energy Corp. ............................ 2,729 142,809 XTO Energy, Inc. ............................... 6,609 308,376 ------------ TOTAL OIL, GAS & CONSUMABLE FUELS 1,241,989 ------------ PHARMACEUTICALS 5.5% Barr Pharmaceuticals, Inc.*..................... 2,519 131,920 Forest Laboratories, Inc.*...................... 5,159 252,481 Eli Lilly & Co. ................................ 830 46,488 Johnson & Johnson............................... 1,020 68,748 King Pharmaceuticals, Inc.*..................... 7,758 129,791 Mylan Laboratories, Inc. ....................... 4,339 88,950 Pfizer, Inc. ................................... 2,969 79,124 Schering-Plough Corp. .......................... 4,019 88,981 Watson Pharmaceuticals, Inc.*................... 1,460 39,289 Wyeth........................................... 1,060 54,092 ------------ TOTAL PHARMACEUTICALS 979,864 ------------
MARKET SHARES VALUE -------------------------------------------------------------------------- SEMICONDUCTORS & SEMICONDUCTOR EQUIPMENT 3.0% Broadcom Corp. -- Class A*...................... 1,110 $33,599 Maxim Integrated Products, Inc. ................ 1,480 44,415 NVIDIA Corp.*................................... 13,047 454,949 ------------ TOTAL SEMICONDUCTORS & SEMICONDUCTOR EQUIPMENT 532,963 ------------ SOFTWARE 4.2% Adobe Systems, Inc.*............................ 4,649 177,824 Citrix Systems, Inc.*........................... 3,579 105,688 Electronic Arts, Inc.*.......................... 1,910 101,020 Intuit, Inc.*................................... 1,910 67,423 Microsoft Corp. ................................ 2,240 64,310 Oracle Corp.*................................... 7,808 144,214 Symantec Corp.*................................. 3,959 78,547 ------------ TOTAL SOFTWARE 739,026 ------------ SPECIALTY RETAIL 6.6% AutoZone, Inc.*................................. 2,310 258,720 Bed Bath & Beyond, Inc.*........................ 4,569 184,085 Best Buy Co., Inc. ............................. 3,009 166,247 Home Depot, Inc. ............................... 2,410 89,965 Lowe's Cos., Inc. .............................. 3,469 104,556 RadioShack Corp. ............................... 3,969 70,807 TJX Cos., Inc. ................................. 8,258 239,069 Tiffany & Co. .................................. 1,490 53,223 ------------ TOTAL SPECIALTY RETAIL 1,166,672 ------------ TEXTILES, APPAREL & LUXURY GOODS 2.2% Coach, Inc.*.................................... 6,199 245,728 Liz Claiborne, Inc. ............................ 2,150 90,666 Nike, Inc. -- Class B........................... 590 54,209 ------------ TOTAL TEXTILES, APPAREL & LUXURY GOODS 390,603 ------------
See Notes to Financial Statements. ANNUAL REPORT 54 RYDEX S&P 500 PURE GROWTH ETF SCHEDULE OF INVESTMENTS (continued) October 31, 2006 --------------------------------------------------------------------------------
MARKET SHARES VALUE -------------------------------------------------------------------------- COMMON STOCKS (CONTINUED) THRIFTS & MORTGAGE FINANCE 2.8% Countrywide Financial Corp. .................... 5,419 $206,572 Federal Home Loan Mortgage Corp. ............... 2,669 184,134 MGIC Investment Corp. .......................... 1,630 95,779 ------------ TOTAL THRIFTS & MORTGAGE FINANCE 486,485 ------------ TOBACCO 0.7% UST, Inc. ...................................... 2,350 125,866 ------------ TOTAL TOBACCO 125,866 ------------ TOTAL COMMON STOCKS (Cost $17,072,500) 17,638,959 ------------
MARKET SHARES VALUE -------------------------------------------------------------------------- SHORT TERM INVESTMENTS 0.1% SSgA Prime Money Market Fund.................... 9,109 $9,109 ------------ TOTAL SHORT TERM INVESTMENTS (Cost $9,109) 9,109 ------------ TOTAL INVESTMENTS 100.0% (Cost $17,081,609) 17,648,068 ------------ OTHER ASSETS IN EXCESS OF LIABILITIES--0.0%(A) 1,260 ------------ NET ASSETS--100.0% $17,649,328 --------------------------------------------------------------------------
* Non-Income Producing Security. (a) Amount represents less than 0.05% of net assets. See Notes to Financial Statements. ANNUAL REPORT 55 RYDEX S&P MIDCAP 400 PURE VALUE ETF SCHEDULE OF INVESTMENTS October 31, 2006 --------------------------------------------------------------------------------
MARKET SHARES VALUE ------------------------------------------------------------------------ COMMON STOCKS 99.8% AIRLINES 1.7% Alaska Air Group, Inc.*......................... 6,383 $256,277 ----------- TOTAL AIRLINES 256,277 ----------- AUTO COMPONENTS 4.8% ArvinMeritor, Inc. ............................. 16,472 247,409 Bandag, Inc. ................................... 2,628 115,343 BorgWarner, Inc. ............................... 934 53,705 Lear Corp. ..................................... 8,604 259,927 Modine Manufacturing Co. ....................... 1,912 45,525 ----------- TOTAL AUTO COMPONENTS 721,909 ----------- CHEMICALS 5.5% Albemarle Corp. ................................ 1,408 91,562 Cabot Corp. .................................... 2,578 101,960 Chemtura Corp. ................................. 3,879 33,282 Ferro Corp. .................................... 7,486 147,624 Lubrizol Corp. ................................. 2,661 119,745 Lyondell Chemical Co. .......................... 2,122 54,471 RPM International, Inc. ........................ 4,380 83,877 Sensient Technologies Corp. .................... 8,036 185,230 ----------- TOTAL CHEMICALS 817,751 ----------- COMMERCIAL BANKS 0.2% FirstMerit Corp. ............................... 1,521 35,318 ----------- TOTAL COMMERCIAL BANKS 35,318 ----------- COMMERCIAL SERVICES & SUPPLIES 2.9% Banta Corp. .................................... 1,090 48,265 Brink's Co. (The)............................... 1,459 76,583 Kelly Services, Inc. ........................... 4,589 132,072 Manpower, Inc. ................................. 2,530 171,458 ----------- TOTAL COMMERCIAL SERVICES & SUPPLIES 428,378 -----------
MARKET SHARES VALUE ------------------------------------------------------------------------ COMMUNICATIONS EQUIPMENT 0.4% Andrew Corp.*................................... 5,944 $55,041 ----------- TOTAL COMMUNICATIONS EQUIPMENT 55,041 ----------- CONTAINERS & PACKAGING 1.5% Packaging Corp. of America...................... 4,825 110,830 Sonoco Products Co. ............................ 3,179 112,791 ----------- TOTAL CONTAINERS & PACKAGING 223,621 ----------- ELECTRIC UTILITIES 10.5% Duquesne Light Holdings, Inc. .................. 7,015 139,107 Great Plains Energy, Inc........................ 5,552 180,662 Hawaiian Electric Industries, Inc. ............. 4,573 128,136 Idacorp, Inc. .................................. 4,998 197,071 Northeast Utilities............................. 14,916 373,049 Pepco Holdings, Inc. ........................... 11,162 283,738 Sierra Pacific Resources*....................... 8,591 130,240 Westar Energy, Inc. ............................ 5,742 145,387 ----------- TOTAL ELECTRIC UTILITIES 1,577,390 -----------
See Notes to Financial Statements. ANNUAL REPORT 56 RYDEX S&P MIDCAP 400 PURE VALUE ETF SCHEDULE OF INVESTMENTS (continued) October 31, 2006 --------------------------------------------------------------------------------
MARKET SHARES VALUE ------------------------------------------------------------------------ COMMON STOCKS (CONTINUED) ELECTRONIC EQUIPMENT & INSTRUMENTS 4.3% Arrow Electronics, Inc.*........................ 3,368 $100,535 Avnet, Inc.*.................................... 4,778 113,143 Ingram Micro, Inc. -- Class A*.................. 7,046 145,218 Tech Data Corp.*................................ 4,538 178,570 Vishay Intertechnology, Inc.*................... 7,812 105,384 ----------- TOTAL ELECTRONIC EQUIPMENT & INSTRUMENTS 642,850 FOOD & STAPLES RETAILING 2.0% BJ's Wholesale Club, Inc.*...................... 3,939 112,852 Ruddick Corp. .................................. 6,632 187,023 ----------- TOTAL FOOD & STAPLES RETAILING 299,875 ----------- FOOD PRODUCTS 1.0% Smithfield Foods, Inc.*......................... 5,396 145,045 ----------- TOTAL FOOD PRODUCTS 145,045 ----------- GAS UTILITIES 3.7% AGL Resources, Inc. ............................ 2,195 82,313 National Fuel Gas Co. .......................... 3,926 146,832 Oneok, Inc. .................................... 4,200 174,846 WGL Holdings, Inc. ............................. 4,496 145,895 ----------- TOTAL GAS UTILITIES 549,886 ----------- HEALTH CARE PROVIDERS & SERVICES 0.6% Triad Hospitals, Inc.*.......................... 2,378 88,057 ----------- TOTAL HEALTH CARE PROVIDERS & SERVICES 88,057 ----------- HOTELS RESTAURANTS & LEISURE 1.9% Bob Evans Farms, Inc. .......................... 6,170 209,225 CBRL Group, Inc. ............................... 1,715 75,305 ----------- TOTAL HOTELS RESTAURANTS & LEISURE 284,530 ----------- HOUSEHOLD DURABLES 2.7% American Greetings Corp. -- Class A............. 1,991 47,605
MARKET SHARES VALUE ------------------------------------------------------------------------ Blyth, Inc. .................................... 4,276 $102,282 Furniture Brands International, Inc. ........... 11,980 222,828 Tupperware Brands Corp. ........................ 1,765 37,471 ----------- TOTAL HOUSEHOLD DURABLES 410,186 ----------- INDEPENDENT POWER PRODUCERS & ENERGY TRADERS 0.5% Black Hills Corp. .............................. 2,251 77,682 ----------- TOTAL INDEPENDENT POWER PRODUCERS & ENERGY TRADERS 77,682 ----------- INDUSTRIAL CONGLOMERATES 1.8% Sequa Corp.*.................................... 2,530 268,458 ----------- TOTAL INDUSTRIAL CONGLOMERATES 268,458 ----------- INSURANCE 9.9% American Financial Group, Inc. ................. 5,706 273,089 AmerUs Group Co. ............................... 1,363 93,338 First American Corp. ........................... 3,056 124,777 Hanover Insurance Group, Inc. (The)............. 1,867 84,668 HCC Insurance Holdings, Inc. ................... 4,544 152,951 Horace Mann Educators Corp. .................... 5,322 107,185 Mercury General Corp. .......................... 1,431 74,083 Old Republic International Corp. ............... 6,986 157,395 Ohio Casualty Corp. ............................ 3,802 104,289 Protective Life Corp. .......................... 3,150 139,388 Stancorp Financial Group, Inc. ................. 1,854 84,709 Unitrin, Inc. .................................. 1,986 85,259 ----------- TOTAL INSURANCE 1,481,131 ----------- LEISURE EQUIPMENT & PRODUCTS 0.3% Callaway Golf Co. .............................. 2,908 39,054 ----------- TOTAL LEISURE EQUIPMENT & PRODUCTS 39,054 -----------
See Notes to Financial Statements. ANNUAL REPORT 57 RYDEX S&P MIDCAP 400 PURE VALUE ETF SCHEDULE OF INVESTMENTS (continued) October 31, 2006 --------------------------------------------------------------------------------
MARKET SHARES VALUE ------------------------------------------------------------------------ COMMON STOCKS (CONTINUED) MACHINERY 4.1% AGCO Corp.*..................................... 8,446 $225,931 Harsco Corp. ................................... 696 56,814 Kennametal, Inc. ............................... 1,495 92,256 SPX Corp. ...................................... 2,132 122,633 Timken Co. ..................................... 4,096 123,085 ----------- TOTAL MACHINERY 620,719 ----------- MEDIA 0.6% Media General, Inc. -- Class A.................. 1,075 39,882 Scholastic Corp.*............................... 1,709 53,697 ----------- TOTAL MEDIA 93,579 ------------------------------------------------------------------------ ----------- METALS & MINING 3.8% Commercial Metals Co. .......................... 4,403 117,164 Reliance Steel & Aluminum Co. .................. 2,441 83,848 Steel Dynamics, Inc. ........................... 3,548 213,270 Worthington Industries.......................... 8,835 152,669 ----------- TOTAL METALS & MINING 566,951 ----------- MULTI-UTILITIES 11.9% Alliant Energy Corp. ........................... 5,720 219,362 Energy East Corp. .............................. 7,096 172,504 MDU Resources Group, Inc. ...................... 1,839 47,226 NSTAR........................................... 9,293 323,303 OGE Energy Corp. ............................... 6,234 240,508 PNM Resources, Inc. ............................ 3,897 109,739 Puget Energy, Inc. ............................. 8,650 206,562 SCANA Corp. .................................... 2,607 104,176 Vectren Corp. .................................. 4,040 117,402 Wisconsin Energy Corp. ......................... 1,982 91,053 WPS Resources Corp. ............................ 2,938 156,331 ----------- TOTAL MULTI-UTILITIES 1,788,166 ----------- MULTILINE RETAIL 0.9% Saks, Inc. ..................................... 6,556 126,793 ----------- TOTAL MULTILINE RETAIL 126,793 -----------
MARKET SHARES VALUE ------------------------------------------------------------------------ OIL, GAS & CONSUMABLE FUELS 0.3% Forest Oil Corp.*............................... 1,353 $44,162 ----------- TOTAL OIL, GAS & CONSUMABLE FUELS 44,162 ----------- PAPER & FOREST PRODUCTS 2.2% Bowater, Inc. .................................. 5,652 118,183 Glatfelter...................................... 6,461 94,589 Potlatch Corp. ................................. 1,543 62,646 Rayonier, Inc. ................................. 1,466 60,092 ----------- TOTAL PAPER & FOREST PRODUCTS 335,510 ----------- REAL ESTATE INVESTMENT TRUSTS (REITS) 4.6% AMB Property Corp. ............................. 837 48,889 Highwoods Properties, Inc. ..................... 3,793 144,893 Hospitality Properties Trust 2,000 96,920 Liberty Property Trust.......................... 1,681 81,024 Mack-Cali Realty Corp. ......................... 2,115 111,883 New Plan Excel Realty Trust..................... 4,711 135,677 United Dominion Realty Trust, Inc. ............. 1,929 62,442 ----------- TOTAL REAL ESTATE INVESTMENT TRUSTS (REITS) 681,728 ----------- ROAD & RAIL 4.0% JB Hunt Transport Services, Inc. ............... 8,706 188,398 Swift Transportation Co, Inc.*.................. 6,596 165,889 Werner Enterprises, Inc. ....................... 5,166 94,796 YRC Worldwide, Inc.*............................ 3,925 152,055 ----------- TOTAL ROAD & RAIL 601,138 ----------- SEMICONDUCTORS & SEMICONDUCTOR EQUIPMENT 3.1% Atmel Corp.*.................................... 81,798 470,339 ----------- TOTAL SEMICONDUCTORS & SEMICONDUCTOR EQUIPMENT 470,339 -----------
See Notes to Financial Statements. ANNUAL REPORT 58 RYDEX S&P MIDCAP 400 PURE VALUE ETF SCHEDULE OF INVESTMENTS (continued) October 31, 2006 --------------------------------------------------------------------------------
MARKET SHARES VALUE ------------------------------------------------------------------------ COMMON STOCKS (CONTINUED) SOFTWARE 0.6% Mentor Graphics Corp.*.......................... 5,641 $95,164 ----------- TOTAL SOFTWARE 95,164 ----------- SPECIALTY RETAIL 2.7% Borders Group, Inc.............................. 7,035 144,851 Foot Locker, Inc................................ 4,687 108,691 Payless Shoesource, Inc.*....................... 2,498 66,821 Pier 1 Imports, Inc............................. 12,064 78,899 ----------- TOTAL SPECIALTY RETAIL 399,262 ----------- THRIFTS & MORTGAGE FINANCE 1.5% New York Community Bancorp, Inc................. 8,156 133,351 Washington Federal, Inc......................... 1,942 45,132 Webster Financial Corp.......................... 1,012 48,900 ----------- TOTAL THRIFTS & MORTGAGE FINANCE 227,383 ----------- TOBACCO 1.4% Universal Corp.................................. 5,839 214,992 ----------- TOTAL TOBACCO 214,992 ----------- TRADING COMPANIES & DISTRIBUTORS 0.3% GATX Corp....................................... 1,091 47,535 ----------- TOTAL TRADING COMPANIES & DISTRIBUTORS 47,535 -----------
MARKET SHARES VALUE ------------------------------------------------------------------------ WIRELESS TELECOMMUNICATION SERVICES 1.6% Telephone & Data Systems, Inc................... 4,785 $233,747 ----------- TOTAL WIRELESS TELECOMMUNICATION SERVICES 233,747 ----------- TOTAL COMMON STOCKS (Cost $14,297,550) 14,949,607 ----------- SHORT TERM INVESTMENTS 0.0%(A) SSgA Prime Money Market Fund.................... 100 100 TOTAL SHORT TERM INVESTMENTS (Cost $100) 100 ----------- TOTAL INVESTMENTS 99.8% (Cost $14,297,650) 14,949,707 ----------- OTHER ASSETS IN EXCESS OF LIABILITIES--0.2% 22,829 ----------- NET ASSETS--100.0% $14,972,536 ------------------------------------------------------------------------
* Non-Income Producing Security. (a) Amount represents less than 0.05% of net assets. See Notes to Financial Statements. ANNUAL REPORT 59 RYDEX S&P MIDCAP 400 PURE GROWTH ETF SCHEDULE OF INVESTMENTS October 31, 2006 --------------------------------------------------------------------------------
MARKET SHARES VALUE ------------------------------------------------------------------------ COMMON STOCKS 100.0% AEROSPACE & DEFENSE 1.4% Alliant Techsystems, Inc.*...................... 4,035 $311,542 ----------- TOTAL AEROSPACE & DEFENSE 311,542 ----------- AIR FREIGHT & LOGISTICS 2.5% CH Robinson Worldwide, Inc. .................... 4,800 200,352 Expeditors International Washington, Inc. ...... 7,547 357,803 ----------- TOTAL AIR FREIGHT & LOGISTICS 558,155 ----------- AIRLINES 2.8% Airtran Holdings, Inc.*......................... 27,400 273,178 JetBlue Airways Corp.*.......................... 28,994 364,165 ----------- TOTAL AIRLINES 637,343 ----------- AUTOMOBILES 1.0% Thor Industries, Inc. .......................... 4,943 216,602 ----------- TOTAL AUTOMOBILES 216,602 ----------- BEVERAGES 0.9% Hansen Natural Corp.*........................... 6,194 196,660 ----------- TOTAL BEVERAGES 196,660 ----------- BIOTECHNOLOGY 2.2% Cephalon, Inc.*................................. 6,005 421,431 Martek Biosciences Corp.*....................... 2,695 63,925 ----------- TOTAL BIOTECHNOLOGY 485,356 ----------- CAPITAL MARKETS 5.8% Eaton Vance Corp. .............................. 10,563 327,876 Investors Financial Services Corp. ............. 7,358 289,317 SEI Investments Co. ............................ 7,116 400,488 Waddell & Reed Financial, Inc. -- Class A....... 11,084 282,642 ----------- TOTAL CAPITAL MARKETS 1,300,323 -----------
MARKET SHARES VALUE ------------------------------------------------------------------------ COMMERCIAL SERVICES & SUPPLIES 5.1% ChoicePoint, Inc.*.............................. 1,860 $67,685 Copart, Inc.*................................... 8,441 244,198 Corporate Executive Board Co. .................. 4,934 443,172 Rollins, Inc. .................................. 6,455 139,686 Stericycle, Inc.*............................... 3,742 264,597 ----------- TOTAL COMMERCIAL SERVICES & SUPPLIES 1,159,338 ----------- COMMUNICATIONS EQUIPMENT 1.6% F5 Networks, Inc.*.............................. 3,094 204,792 Plantronics, Inc. .............................. 7,482 157,945 ----------- TOTAL COMMUNICATIONS EQUIPMENT 362,737 ----------- COMPUTERS & PERIPHERALS 1.8% Western Digital Corp.*.......................... 22,558 412,360 ----------- TOTAL COMPUTERS & PERIPHERALS 412,360 ----------- CONSTRUCTION & ENGINEERING 0.7% Jacobs Engineering Group, Inc.*................. 2,058 155,461 ----------- TOTAL CONSTRUCTION & ENGINEERING 155,461 ----------- DIVERSIFIED CONSUMER SERVICES 6.0% Career Education Corp.*......................... 8,850 197,178 Corinthian Colleges, Inc.*...................... 29,516 361,571 ITT Educational Services, Inc.*................. 6,378 439,763 Strayer Education, Inc. ........................ 3,153 356,668 ----------- TOTAL DIVERSIFIED CONSUMER SERVICES 1,355,180 ----------- ELECTRONIC EQUIPMENT & INSTRUMENTS 2.3% Amphenol Corp. ................................. 4,011 272,347 CDW Corp. ...................................... 3,893 255,653 ----------- TOTAL ELECTRONIC EQUIPMENT & INSTRUMENTS 528,000 -----------
See Notes to Financial Statements. ANNUAL REPORT 60 RYDEX S&P MIDCAP 400 PURE GROWTH ETF SCHEDULE OF INVESTMENTS(continued) October 31, 2006 --------------------------------------------------------------------------------
MARKET SHARES VALUE ------------------------------------------------------------------------ COMMON STOCKS (CONTINUED) ENERGY EQUIPMENT & SERVICES 1.0% Grant Prideco, Inc.*............................ 2,932 $110,742 Patterson-UTI Energy, Inc. ..................... 4,511 104,655 ----------- TOTAL ENERGY EQUIPMENT & SERVICES 215,397 ----------- HEALTH CARE EQUIPMENT & SUPPLIES 6.6% Beckman Coulter, Inc. .......................... 2,758 158,778 Cytyc Corp.*.................................... 14,561 384,702 Dentsply International, Inc. ................... 7,025 219,742 Gen-Probe, Inc.*................................ 4,698 224,893 Intuitive Surgical, Inc.*....................... 1,567 155,415 ResMed, Inc.*................................... 7,786 342,506 ----------- TOTAL HEALTH CARE EQUIPMENT & SUPPLIES 1,486,036 ----------- HEALTH CARE PROVIDERS & SERVICES 3.0% Apria Healthcare Group, Inc.*................... 9,722 226,425 Community Health Systems, Inc.*................. 3,949 128,145 LifePoint Hospitals, Inc.*...................... 3,647 129,469 Lincare Holdings, Inc.*......................... 6,016 201,897 ----------- TOTAL HEALTH CARE PROVIDERS & SERVICES 685,936 ----------- HOTELS RESTAURANTS & LEISURE 3.1% Applebees International, Inc. .................. 7,829 178,658 Cheesecake Factory (The)*....................... 5,754 162,551 Scientific Games Corp. -- Class A*.............. 12,376 346,899 ----------- TOTAL HOTELS RESTAURANTS & LEISURE 688,108 ----------- HOUSEHOLD DURABLES 3.3% Hovnanian Enterprises, Inc. -- Class A*......... 6,359 196,175 MDC Holdings, Inc. ............................. 4,079 203,379
MARKET SHARES VALUE ------------------------------------------------------------------------ Ryland Group, Inc. ............................. 4,173 $191,666 Toll Brothers, Inc.*............................ 5,307 153,425 ----------- TOTAL HOUSEHOLD DURABLES 744,645 ----------- HOUSEHOLD PRODUCTS 1.2% Church & Dwight Co., Inc. ...................... 2,445 99,194 Energizer Holdings, Inc.*....................... 2,300 179,745 ----------- TOTAL HOUSEHOLD PRODUCTS 278,939 ----------- INSURANCE 1.7% Brown & Brown, Inc. ............................ 13,394 391,909 ----------- TOTAL INSURANCE 391,909 ----------- IT SERVICES 7.8% Alliance Data Systems Corp.*.................... 3,666 222,600 BISYS Group, Inc. (The)*........................ 12,848 141,842 Cognizant Technology Solutions Corp. -- Class A*............................................ 8,955 674,132 CSG Systems International*...................... 9,432 254,475 DST Systems, Inc.*.............................. 3,253 201,003 Fidelity National Information Services, Inc. ... 6,472 269,041 ----------- TOTAL IT SERVICES 1,763,093 ----------- LIFE SCIENCES TOOLS & SERVICES 1.8% Invitrogen Corp.*............................... 1,439 83,476 Pharmaceutical Product Development, Inc. ....... 5,133 162,460 Techne Corp.*................................... 2,691 150,373 ----------- TOTAL LIFE SCIENCES TOOLS & SERVICES 396,309 ----------- MACHINERY 1.7% Donaldson Co., Inc. ............................ 3,704 139,085 Graco, Inc. .................................... 5,701 232,373 ----------- TOTAL MACHINERY 371,458 -----------
See Notes to Financial Statements. ANNUAL REPORT 61 RYDEX S&P MIDCAP 400 PURE GROWTH ETF SCHEDULE OF INVESTMENTS(continued) October 31, 2006 --------------------------------------------------------------------------------
MARKET SHARES VALUE ------------------------------------------------------------------------ COMMON STOCKS (CONTINUED) MEDIA 0.6% Catalina Marketing Corp. ....................... 5,174 $131,161 ----------- TOTAL MEDIA 131,161 ----------- OFFICE ELECTRONICS 0.3% Zebra Technologies Corp. -- Class A*............ 2,096 78,118 ----------- TOTAL OFFICE ELECTRONICS 78,118 ----------- OIL, GAS & CONSUMABLE FUELS 6.8% Denbury Resources, Inc.*........................ 12,816 368,332 Newfield Exploration Co.*....................... 6,530 266,359 Noble Energy, Inc. ............................. 2,706 131,593 Pioneer Natural Resources Co. .................. 3,074 125,204 Plains Exploration & Production Co.*............ 4,129 174,615 Pogo Producing Co. ............................. 6,695 299,601 Southwestern Energy Co.*........................ 4,686 166,728 ----------- TOTAL OIL, GAS & CONSUMABLE FUELS 1,532,432 ----------- PHARMACEUTICALS 3.9% Medicis Pharmaceutical Corp. -- Class A......... 4,219 147,834 Par Pharmaceutical Cos., Inc.*.................. 16,505 321,682 Sepracor, Inc.*................................. 8,029 415,581 ----------- TOTAL PHARMACEUTICALS 885,097 ----------- SEMICONDUCTORS & SEMICONDUCTOR EQUIPMENT 2.4% Cree, Inc.*..................................... 13,245 291,258 Silicon Laboratories, Inc.*..................... 7,961 259,767 ----------- TOTAL SEMICONDUCTORS & SEMICONDUCTOR EQUIPMENT 551,025 -----------
MARKET SHARES VALUE ------------------------------------------------------------------------ SOFTWARE 2.9% Activision, Inc.*............................... 5,971 $92,073 Fair Isaac Corp. ............................... 1,880 68,864 Jack Henry & Associates, Inc. .................. 7,374 160,679 Macrovision Corp.*.............................. 8,754 232,944 McAfee, Inc.*................................... 3,546 102,586 ----------- TOTAL SOFTWARE 657,146 ----------- SPECIALTY RETAIL 15.3% Abercrombie & Fitch Co. -- Class A.............. 5,640 432,306 Advance Auto Parts, Inc. ....................... 6,241 218,560 Aeropostale, Inc.*.............................. 18,843 552,288 American Eagle Outfitters....................... 7,795 357,011 Chico's FAS, Inc.*.............................. 13,069 312,741 GameStop Corp. -- Class A*...................... 10,493 535,773 Pacific Sunwear Of California*.................. 10,650 187,653 Petsmart, Inc. ................................. 9,171 263,941 Ross Stores, Inc. .............................. 10,198 300,127 Urban Outfitters, Inc.*......................... 6,440 112,700 Williams-Sonoma, Inc. .......................... 5,166 175,696 ----------- TOTAL SPECIALTY RETAIL 3,448,796 ----------- TEXTILES, APPAREL & LUXURY GOODS 1.0% Timberland Co. -- Class A*...................... 7,933 228,867 ----------- TOTAL TEXTILES, APPAREL & LUXURY GOODS 228,867 ----------- THRIFTS & MORTGAGE FINANCE 0.7% Radian Group, Inc. ............................. 3,008 160,326 ----------- TOTAL THRIFTS & MORTGAGE FINANCE 160,326 -----------
See Notes to Financial Statements. ANNUAL REPORT 62 RYDEX S&P MIDCAP 400 PURE GROWTH ETF SCHEDULE OF INVESTMENTS(continued) October 31, 2006 --------------------------------------------------------------------------------
MARKET SHARES VALUE ------------------------------------------------------------------------ COMMON STOCKS (CONTINUED) TRADING COMPANIES & DISTRIBUTORS 0.8% Fastenal Co. ................................... 4,212 $169,491 ----------- TOTAL TRADING COMPANIES & DISTRIBUTORS 169,491 ----------- TOTAL COMMON STOCKS (Cost $23,535,994) 22,543,346 ----------- SHORT TERM INVESTMENTS 0.2% SSgA Prime Money Market Fund.................... 44,630 44,630 ----------- TOTAL SHORT TERM INVESTMENTS (Cost $44,630) 44,630 ----------- TOTAL INVESTMENTS 100.2% (Cost $23,580,624) 22,587,976 ----------- LIABILITIES IN EXCESS OF OTHER ASSETS--(0.2)% (41,258) ----------- NET ASSETS--100.0% $22,546,718 ------------------------------------------------------------------------
* Non-Income Producing Security. See Notes to Financial Statements. ANNUAL REPORT 63 RYDEX S&P SMALLCAP 600 PURE VALUE ETF SCHEDULE OF INVESTMENTS October 31, 2006 --------------------------------------------------------------------------------
MARKET SHARES VALUE ----------------------------------------------------------------------- COMMON STOCKS 99.8% AEROSPACE & DEFENSE 0.6% Cubic Corp. .................................... 978 $20,450 Triumph Group, Inc. ............................ 370 17,815 ---------- TOTAL AEROSPACE & DEFENSE 38,265 ---------- AIR FREIGHT & LOGISTICS 0.8% HUB Group, Inc. -- Class A*..................... 1,873 50,871 ---------- TOTAL AIR FREIGHT & LOGISTICS 50,871 ---------- AIRLINES 0.2% Frontier Airlines Holdings, Inc.*............... 1,438 11,562 ---------- TOTAL AIRLINES 11,562 ---------- AUTO COMPONENTS 1.8% Standard Motor Products, Inc. .................. 6,348 70,336 Superior Industries International............... 2,285 38,616 ---------- TOTAL AUTO COMPONENTS 108,952 ---------- AUTOMOBILES 1.3% Coachmen Industries, Inc. ...................... 4,317 48,264 Monaco Coach Corp. ............................. 2,704 32,286 ---------- TOTAL AUTOMOBILES 80,550 ---------- BUILDING PRODUCTS 0.7% Griffon Corp.*.................................. 340 8,361 Lennox International, Inc. ..................... 694 18,710 NCI Building Systems, Inc.*..................... 285 17,057 ---------- TOTAL BUILDING PRODUCTS 44,128 ---------- CAPITAL MARKETS 2.0% Piper Jaffray Cos.*............................. 920 63,618 SWS Group, Inc. ................................ 2,088 58,026 ---------- TOTAL CAPITAL MARKETS 121,644 ----------
MARKET SHARES VALUE ----------------------------------------------------------------------- CHEMICALS 6.2% Arch Chemicals, Inc. ........................... 1,450 $48,517 Georgia Gulf Corp. ............................. 1,101 23,550 HB Fuller Co. .................................. 1,461 36,218 Penford Corp. .................................. 2,707 43,989 PolyOne Corp.*.................................. 4,181 34,284 Quaker Chemical Corp. .......................... 3,067 58,365 Schulman A, Inc. ............................... 2,919 70,669 Tronox, Inc. ................................... 1,576 20,614 Wellman, Inc. .................................. 10,346 39,005 ---------- TOTAL CHEMICALS 375,211 ---------- COMMERCIAL BANKS 2.6% Community Bank System, Inc. .................... 840 20,874 First Bancorp................................... 2,333 23,097 First Commonwealth Financial Corp. ............. 1,319 17,635 Provident Bankshares Corp. ..................... 412 14,890 South Financial Group, Inc. (The)............... 554 14,697 Sterling Financial Corp. ....................... 628 20,887 Susquehanna Bancshares, Inc. ................... 707 17,668 Whitney Holding Corp. .......................... 892 29,133 ---------- TOTAL COMMERCIAL BANKS 158,881 ---------- COMMERCIAL SERVICES & SUPPLIES 6.1% Angelica Corp. ................................. 1,938 40,582 ABM Industries, Inc. ........................... 814 16,166 Bowne & Co, Inc. ............................... 2,092 32,698 Central Parking Corp. .......................... 853 14,629 CDI Corp. ...................................... 426 10,070 Consolidated Graphics, Inc.*.................... 269 16,724 NCO Group, Inc.*................................ 1,479 39,874 Spherion Corp.*................................. 4,974 36,061 Standard Register Co. (The)..................... 3,098 41,916 United Stationers, Inc.*........................ 360 17,190
See Notes to Financial Statements. ANNUAL REPORT 64 RYDEX S&P SMALLCAP 600 PURE VALUE ETF SCHEDULE OF INVESTMENTS(continued) October 31, 2006 --------------------------------------------------------------------------------
MARKET SHARES VALUE ----------------------------------------------------------------------- COMMON STOCKS (CONTINUED) Viad Corp. ..................................... 317 $11,713 Volt Information Sciences, Inc.*................ 2,232 88,164 ---------- TOTAL COMMERCIAL SERVICES & SUPPLIES 365,787 ---------- COMMUNICATIONS EQUIPMENT 0.4% Ditech Networks, Inc.*.......................... 3,050 24,065 ---------- TOTAL COMMUNICATIONS EQUIPMENT 24,065 ---------- COMPUTERS & PERIPHERALS 0.7% Adaptec, Inc.*.................................. 8,585 38,890 ---------- TOTAL COMPUTERS & PERIPHERALS 38,890 ---------- CONSTRUCTION & ENGINEERING 1.0% EMCOR Group, Inc.*.............................. 1,016 60,096 ---------- TOTAL CONSTRUCTION & ENGINEERING 60,096 ---------- CONSTRUCTION MATERIALS 0.3% Texas Industries, Inc. ......................... 297 18,444 ---------- TOTAL CONSTRUCTION MATERIALS 18,444 ---------- CONTAINERS & PACKAGING 3.8% Caraustar Industries, Inc.*..................... 2,323 25,158 Chesapeake Corp. ............................... 3,619 56,131 Myers Industries, Inc. ......................... 3,751 67,968 Rock-Tenn Co. .................................. 3,743 77,255 ---------- TOTAL CONTAINERS & PACKAGING 226,512 ---------- DISTRIBUTORS 0.1% Audiovox Corp. -- Class A*...................... 632 8,292 ---------- TOTAL DISTRIBUTORS 8,292 ---------- ELECTRIC UTILITIES 4.4% Allete, Inc. ................................... 477 21,513 Central Vermont Public Service Corp. ........... 3,565 80,462 Cleco Corp. .................................... 909 23,361 Green Mountain Power Corp. ..................... 1,336 44,930
MARKET SHARES VALUE ----------------------------------------------------------------------- UIL Holdings Corp. ............................. 1,593 $63,322 Unisource Energy Corp. ......................... 828 29,460 ---------- TOTAL ELECTRIC UTILITIES 263,048 ---------- ELECTRICAL EQUIPMENT 3.0% Acuity Brands, Inc. ............................ 483 23,928 AO Smith Corp. ................................. 1,384 48,662 Belden CDT, Inc. ............................... 897 32,471 C&D Technologies, Inc. ......................... 3,039 15,073 Magnetek, Inc.*................................. 12,102 57,606 ---------- TOTAL ELECTRICAL EQUIPMENT 177,740 ---------- ELECTRONIC EQUIPMENT & INSTRUMENTS 5.1% Agilysys, Inc. ................................. 1,252 18,567 Anixter International, Inc.*.................... 344 20,557 Bell Microproducts, Inc.*....................... 4,093 27,587 Benchmark Electronics, Inc.*.................... 547 14,523 Brightpoint, Inc.*.............................. 801 9,692 CTS Corp. ...................................... 1,016 14,346 Gerber Scientific, Inc.*........................ 3,991 58,309 Insight Enterprises, Inc.*...................... 1,493 32,085 Methode Electronics, Inc. ...................... 1,200 13,284 Planar Systems, Inc.*........................... 4,626 55,743 Technitrol, Inc. ............................... 1,586 39,999 ---------- TOTAL ELECTRONIC EQUIPMENT & INSTRUMENTS 304,692 ---------- ENERGY EQUIPMENT & SERVICES 0.2% Lufkin Industries, Inc. ........................ 205 12,370 ---------- TOTAL ENERGY EQUIPMENT & SERVICES 12,370 ---------- FOOD & STAPLES RETAILING 1.7% Casey's General Stores, Inc. ................... 823 19,974 Longs Drug Stores Corp. ........................ 615 26,470 Nash Finch Co. ................................. 1,094 28,389 Performance Food Group Co.*..................... 934 27,151 ---------- TOTAL FOOD & STAPLES RETAILING 101,984 ----------
See Notes to Financial Statements. ANNUAL REPORT 65 RYDEX S&P SMALLCAP 600 PURE VALUE ETF SCHEDULE OF INVESTMENTS(continued) October 31, 2006 --------------------------------------------------------------------------------
MARKET SHARES VALUE ----------------------------------------------------------------------- COMMON STOCKS (CONTINUED) FOOD PRODUCTS 2.0% American Italian Pasta Co. -- Class A*.......... 5,379 $40,289 Corn Products International, Inc. .............. 939 33,982 Flowers Foods, Inc. ............................ 709 19,264 Lance, Inc. .................................... 1,360 26,547 ---------- TOTAL FOOD PRODUCTS 120,082 ---------- GAS UTILITIES 6.4% Atmos Energy Corp. ............................. 1,630 50,090 Cascade Natural Gas Corp. ...................... 1,855 47,748 Energen Corp. .................................. 508 21,753 Laclede Group, Inc. (The)....................... 1,194 42,542 Northwest Natural Gas Co. ...................... 624 25,815 Piedmont Natural Gas Co. ....................... 805 21,735 South Jersey Industries, Inc. .................. 1,983 61,334 Southwest Gas Corp. ............................ 1,763 63,256 UGI Corp. ...................................... 1,979 52,443 ---------- TOTAL GAS UTILITIES 386,716 ---------- HEALTH CARE EQUIPMENT & SUPPLIES 0.8% Datascope Corp. ................................ 986 35,368 Osteotech, Inc.*................................ 2,165 11,301 ---------- TOTAL HEALTH CARE EQUIPMENT & SUPPLIES 46,669 ---------- HEALTH CARE PROVIDERS & SERVICES 1.8% Chemed Corp. ................................... 431 15,296 Genesis HealthCare Corp.*....................... 731 35,402 Gentiva Health Services, Inc.*.................. 531 9,850 Hooper Holmes, Inc. ............................ 5,470 19,692 Owens & Minor, Inc. ............................ 907 28,580 ---------- TOTAL HEALTH CARE PROVIDERS & SERVICES 108,820 ----------
MARKET SHARES VALUE ----------------------------------------------------------------------- HOTELS RESTAURANTS & LEISURE 2.4% Lone Star Steakhouse & Saloon, Inc. ............ 883 $24,106 Marcus Corp. ................................... 889 22,216 O'Charleys, Inc.*............................... 3,251 64,662 Ryan's Restaurant Group, Inc.*.................. 2,095 33,960 ---------- TOTAL HOTELS RESTAURANTS & LEISURE 144,944 ---------- HOUSEHOLD DURABLES 3.0% Bassett Furniture Industries, Inc. ............. 2,270 37,500 La-Z-Boy, Inc. ................................. 2,546 31,189 Lenox Group, Inc.*.............................. 1,894 11,383 Libbey, Inc. ................................... 2,915 33,522 National Presto Industries, Inc. ............... 465 28,472 Russ Berrie & Co, Inc.*......................... 810 12,280 Standard-Pacific Corp. ......................... 1,110 26,895 ---------- TOTAL HOUSEHOLD DURABLES 181,241 ---------- INDUSTRIAL CONGLOMERATES 1.6% Standex International Corp. .................... 1,314 38,263 Tredegar Corp. ................................. 3,188 55,599 ---------- TOTAL INDUSTRIAL CONGLOMERATES 93,862 ---------- INSURANCE 3.9% Delphi Financial Group.......................... 461 18,094 Infinity Property & Casualty Corp. ............. 502 21,596 LandAmerica Financial Group, Inc. .............. 1,018 64,226 Presidential Life Corp. ........................ 1,087 25,653 Safety Insurance Group, Inc. ................... 696 34,807 Selective Insurance Group....................... 588 32,487 Stewart Information Services Corp. ............. 956 35,429 ---------- TOTAL INSURANCE 232,292 ----------
See Notes to Financial Statements. ANNUAL REPORT 66 RYDEX S&P SMALLCAP 600 PURE VALUE ETF SCHEDULE OF INVESTMENTS(continued) October 31, 2006 --------------------------------------------------------------------------------
MARKET SHARES VALUE ----------------------------------------------------------------------- COMMON STOCKS (CONTINUED) IT SERVICES 1.4% Ciber, Inc.*.................................... 2,172 $14,878 Keane, Inc.*.................................... 1,055 12,227 Startek, Inc. .................................. 4,145 56,538 ---------- TOTAL IT SERVICES 83,643 ---------- LEISURE EQUIPMENT & PRODUCTS 1.4% Jakks Pacific, Inc.*............................ 1,503 32,600 K2, Inc.*....................................... 2,847 38,890 Sturm Ruger & Co, Inc.*......................... 1,500 12,495 ---------- TOTAL LEISURE EQUIPMENT & PRODUCTS 83,985 ---------- LIFE SCIENCES TOOLS & SERVICES 0.3% Cambrex Corp. .................................. 831 19,445 ---------- TOTAL LIFE SCIENCES TOOLS & SERVICES 19,445 ---------- MACHINERY 2.6% Barnes Group, Inc. ............................. 603 12,090 Briggs & Stratton Corp. ........................ 613 15,625 Lydall, Inc.*................................... 3,563 32,316 Mueller Industries, Inc. ....................... 540 19,802 Robbins & Myers, Inc. .......................... 1,532 58,967 Wolverine Tube, Inc.*........................... 6,194 17,777 ---------- TOTAL MACHINERY 156,577 ---------- METALS & MINING 5.4% Aleris International, Inc.*..................... 484 24,931 AM Castle & Co. ................................ 1,706 57,048 Brush Engineered Materials, Inc.*............... 1,311 44,128 Century Aluminum Co.*........................... 617 24,014 Chaparral Steel Co. ............................ 1,986 82,598 Quanex Corp. ................................... 380 12,734 Ryerson, Inc. .................................. 1,833 44,175 Steel Technologies, Inc. ....................... 1,864 35,770 ---------- TOTAL METALS & MINING 325,398 ---------- MULTI-UTILITIES 1.6% Avista Corp. ................................... 2,254 58,018 CH Energy Group, Inc. .......................... 766 39,847 ---------- TOTAL MULTI-UTILITIES 97,865 ----------
MARKET SHARES VALUE ----------------------------------------------------------------------- MULTILINE RETAIL 0.5% Fred's, Inc. -- Class A......................... 2,482 $32,465 ---------- TOTAL MULTILINE RETAIL 32,465 ---------- PAPER & FOREST PRODUCTS 3.3% Buckeye Technologies, Inc.*..................... 3,486 36,220 Neenah Paper, Inc. ............................. 907 33,405 Pope & Talbot, Inc.*............................ 6,881 37,501 Schweitzer-Mauduit International, Inc. ......... 2,520 58,111 Wausau Paper Corp. ............................. 2,464 33,412 ---------- TOTAL PAPER & FOREST PRODUCTS 198,649 ---------- REAL ESTATE INVESTMENT TRUSTS (REITS) 3.7% Colonial Properties Trust....................... 480 24,187 Entertainment Properties Trust.................. 360 19,800 Glenborough Realty Trust, Inc. ................. 1,624 42,191 Lexington Corporate Properties Trust............ 836 17,807 Mid-America Apartment Communities, Inc. ........ 155 9,866 Parkway Properties, Inc. ....................... 582 28,716 Senior Housing Properties Trust................. 1,263 28,961 Sovran Self Storage, Inc. ...................... 340 20,053 National Retail Properties, Inc. ............... 1,365 30,672 ---------- TOTAL REAL ESTATE INVESTMENT TRUSTS (REITS) 222,253 ---------- ROAD & RAIL 0.7% Arkansas Best Corp. ............................ 968 39,669 ---------- TOTAL ROAD & RAIL 39,669 ---------- SEMICONDUCTORS & SEMICONDUCTOR EQUIPMENT 0.3% Axcelis Technologies, Inc.*..................... 1,786 12,323 Photronics, Inc.*............................... 444 6,212 ---------- TOTAL SEMICONDUCTORS & SEMICONDUCTOR EQUIPMENT 18,535 ----------
See Notes to Financial Statements. ANNUAL REPORT 67 RYDEX S&P SMALLCAP 600 PURE VALUE ETF SCHEDULE OF INVESTMENTS(continued) October 31, 2006 --------------------------------------------------------------------------------
MARKET SHARES VALUE ----------------------------------------------------------------------- COMMON STOCKS (CONTINUED) SOFTWARE 0.4% THQ, Inc.*...................................... 697 $20,959 ---------- TOTAL SOFTWARE 20,959 ---------- SPECIALTY RETAIL 7.4% Cato Corp. (The) -- Class A..................... 1,631 37,334 Group 1 Automotive, Inc. ....................... 1,491 85,449 Hancock Fabrics, Inc.*.......................... 9,857 32,725 Haverty Furniture Cos., Inc. ................... 3,797 59,993 Jo-Ann Stores, Inc.*............................ 2,645 48,139 PEP Boys-Manny Moe & Jack....................... 4,191 59,428 Sonic Automotive, Inc. -- Class A............... 2,221 58,412 Stage Stores, Inc. ............................. 1,473 47,740 Zale Corp.*..................................... 525 15,141 ---------- TOTAL SPECIALTY RETAIL 444,361 ---------- TEXTILES, APPAREL & LUXURY GOODS 3.4% Ashworth, Inc.*................................. 5,320 37,347 Brown Shoe Co., Inc.*........................... 1,594 62,102 Kellwood Co. ................................... 2,552 78,091 Oxford Industries, Inc. ........................ 209 11,031 Stride Rite Corp. .............................. 1,043 15,384 ---------- TOTAL TEXTILES, APPAREL & LUXURY GOODS 203,955 ---------- THRIFTS & MORTGAGE FINANCE 0.2% Brookline Bancorp, Inc. ........................ 931 12,410 ---------- TOTAL THRIFTS & MORTGAGE FINANCE 12,410 ----------
MARKET SHARES VALUE ----------------------------------------------------------------------- TOBACCO 1.5% Alliance One International, Inc.*............... 18,728 $90,269 ---------- TOTAL TOBACCO 90,269 ---------- TRADING COMPANIES & DISTRIBUTORS 0.6% Kaman Corp. .................................... 738 15,048 Lawson Products................................. 453 21,930 ---------- TOTAL TRADING COMPANIES & DISTRIBUTORS 36,978 ---------- WATER UTILITIES 0.2% American States Water Co. ...................... 308 12,937 ---------- TOTAL WATER UTILITIES 12,937 ---------- TOTAL COMMON STOCKS (Cost $5,737,681) 6,006,962 ---------- SHORT TERM INVESTMENTS 0.0%(A) SSgA Prime Money Market Fund.................... 100 100 ---------- TOTAL SHORT TERM INVESTMENTS (Cost $100) 100 ---------- TOTAL INVESTMENTS 99.8% (Cost $5,737,781) 6,007,063 ---------- OTHER ASSETS IN EXCESS OF LIABILITIES--0.2% 12,032 ---------- NET ASSETS--100.0% $6,019,095 -----------------------------------------------------------------------
* Non-Income Producing Security. (a)Amount represents less than 0.05% of net assets. See Notes to Financial Statements. ANNUAL REPORT 68 RYDEX S&P SMALLCAP 600 PURE GROWTH ETF SCHEDULE OF INVESTMENTS October 31, 2006 --------------------------------------------------------------------------------
MARKET SHARES VALUE ------------------------------------------------------------------------ COMMON STOCKS 99.9% AEROSPACE & DEFENSE 1.9% Ceradyne, Inc.*................................. 2,099 $86,584 Curtiss-Wright Corp. ........................... 1,376 46,564 GenCorp, Inc.*.................................. 991 12,982 ---------- TOTAL AEROSPACE & DEFENSE 146,130 ---------- AIR FREIGHT & LOGISTICS 0.4% Forward Air Corp. .............................. 1,081 35,100 ---------- TOTAL AIR FREIGHT & LOGISTICS 35,100 ---------- AUTOMOBILES 0.7% Winnebago Industries............................ 1,555 51,766 ---------- TOTAL AUTOMOBILES 51,766 ---------- BUILDING PRODUCTS 0.3% Simpson Manufacturing Co., Inc. ................ 780 22,144 ---------- TOTAL BUILDING PRODUCTS 22,144 ---------- CAPITAL MARKETS 0.8% Investment Technology Group, Inc.*.............. 1,276 59,589 ---------- TOTAL CAPITAL MARKETS 59,589 ---------- COMMERCIAL BANKS 3.4% East West Bancorp, Inc. ........................ 621 22,673 Nara Bancorp, Inc. ............................. 3,962 75,278 PrivateBancorp, Inc. ........................... 1,178 48,380 UCBH Holdings, Inc. ............................ 1,794 30,749 Wilshire Bancorp, Inc. ......................... 2,992 59,182 Wintrust Financial Corp. ....................... 584 28,184 ---------- TOTAL COMMERCIAL BANKS 264,446 ---------- COMMERCIAL SERVICES & SUPPLIES 0.6% Waste Connections, Inc.*........................ 1,109 45,125 ---------- TOTAL COMMERCIAL SERVICES & SUPPLIES 45,125 ----------
MARKET SHARES VALUE ------------------------------------------------------------------------ COMMUNICATIONS EQUIPMENT 0.4% Comtech Telecommunications Corp.*............... 849 $30,267 ---------- TOTAL COMMUNICATIONS EQUIPMENT 30,267 ---------- COMPUTERS & PERIPHERALS 2.2% Komag, Inc.*.................................... 1,819 69,577 Neoware, Inc.*.................................. 1,572 18,817 Synaptics, Inc.*................................ 2,834 80,372 ---------- TOTAL COMPUTERS & PERIPHERALS 168,766 ---------- CONSTRUCTION MATERIALS 0.9% Headwaters, Inc.*............................... 2,805 69,424 ---------- TOTAL CONSTRUCTION MATERIALS 69,424 ---------- CONSUMER FINANCE 1.1% World Acceptance Corp.*......................... 1,696 84,783 ---------- TOTAL CONSUMER FINANCE 84,783 ---------- DIVERSIFIED CONSUMER SERVICES 4.6% Bright Horizons Family Solutions, Inc.*......... 972 37,344 Coinstar, Inc.*................................. 5,184 157,490 Pre-Paid Legal Services, Inc. .................. 2,237 94,961 Vertrue, Inc.*.................................. 1,636 73,571 ---------- TOTAL DIVERSIFIED CONSUMER SERVICES 363,366 ---------- DIVERSIFIED FINANCIAL SERVICES 1.3% Portfolio Recovery Associates, Inc.*............ 2,185 101,865 ---------- TOTAL DIVERSIFIED FINANCIAL SERVICES 101,865 ---------- ELECTRONIC EQUIPMENT & INSTRUMENTS 3.7% Daktronics, Inc. ............................... 3,224 76,441 Flir Systems, Inc.*............................. 2,644 84,449 LoJack Corp.*................................... 2,087 41,656
See Notes to Financial Statements. ANNUAL REPORT 69 RYDEX S&P SMALLCAP 600 PURE GROWTH ETF SCHEDULE OF INVESTMENTS(continued) October 31, 2006 --------------------------------------------------------------------------------
MARKET SHARES VALUE ------------------------------------------------------------------------ COMMON STOCKS (CONTINUED) Mercury Computer Systems, Inc.*................. 711 $8,760 Scansource, Inc.*............................... 2,558 80,296 ---------- TOTAL ELECTRONIC EQUIPMENT & INSTRUMENTS 291,602 ---------- ENERGY EQUIPMENT & SERVICES 1.8% CARBO Ceramics, Inc. ........................... 484 16,311 Hydril*......................................... 492 29,545 Unit Corp.*..................................... 727 33,725 W-H Energy Services, Inc.*...................... 1,295 60,645 ---------- TOTAL ENERGY EQUIPMENT & SERVICES 140,226 ---------- FOOD PRODUCTS 0.7% Delta & Pine Land Co. .......................... 1,064 43,102 Peet's Coffee & Tea, Inc.*...................... 589 15,756 ---------- TOTAL FOOD PRODUCTS 58,858 ---------- HEALTH CARE EQUIPMENT & SUPPLIES 10.7% American Medical Systems Holdings, Inc.*........ 1,758 31,310 Arthrocare Corp.*............................... 560 22,630 Biolase Technology, Inc.*....................... 17,047 110,805 Biosite, Inc.*.................................. 1,364 62,649 Cooper Cos., Inc. (The)......................... 613 35,327 Greatbatch, Inc.*............................... 1,211 27,235 ICU Medical, Inc.*.............................. 1,239 52,348 Idexx Laboratories, Inc.*....................... 443 36,862 Immucor, Inc.*.................................. 2,095 57,675 Integra LifeSciences Holdings Corp.*............ 2,274 83,979 Kensey Nash Corp.*.............................. 1,223 37,191 Mentor Corp. ................................... 707 33,088 Merit Medical Systems, Inc.*.................... 1,945 30,750 PolyMedica Corp. ............................... 1,190 49,445 Possis Medical, Inc.*........................... 7,767 84,816
MARKET SHARES VALUE ------------------------------------------------------------------------ Respironics, Inc.*.............................. 885 $31,258 SurModics, Inc.*................................ 1,369 47,778 ---------- TOTAL HEALTH CARE EQUIPMENT & SUPPLIES 835,146 ---------- HEALTH CARE PROVIDERS & SERVICES 7.9% Amedisys, Inc.*................................. 698 28,318 AMERIGROUP Corp.*............................... 2,347 70,316 AMN Healthcare Services, Inc.*.................. 3,752 94,888 Amsurg Corp.*................................... 1,604 33,716 Centene Corp.*.................................. 3,419 80,654 Healthways, Inc.*............................... 1,486 62,932 Odyssey HealthCare, Inc.*....................... 6,074 80,481 Pediatrix Medical Group, Inc.*.................. 585 26,284 Sierra Health Services, Inc.*................... 1,564 53,551 Sunrise Senior Living, Inc.*.................... 1,572 49,062 United Surgical Partners International, Inc.*... 1,696 42,095 ---------- TOTAL HEALTH CARE PROVIDERS & SERVICES 622,297 ---------- HEALTH CARE TECHNOLOGY 1.2% Cerner Corp.*................................... 710 34,300 Dendrite International, Inc.*................... 1,137 11,882 Per-Se Technologies, Inc.*...................... 1,867 45,704 ---------- TOTAL HEALTH CARE TECHNOLOGY 91,886 ---------- HOTELS RESTAURANTS & LEISURE 5.9% CEC Entertainment, Inc.*........................ 1,093 37,676 Panera Bread Co. -- Class A*.................... 1,166 72,059 Papa John's International, Inc.*................ 1,937 71,088 PF Chang's China Bistro, Inc.*.................. 975 40,775 Multimedia Games, Inc.*......................... 9,857 92,557
See Notes to Financial Statements. ANNUAL REPORT 70 RYDEX S&P SMALLCAP 600 PURE GROWTH ETF SCHEDULE OF INVESTMENTS(continued) October 31, 2006 --------------------------------------------------------------------------------
MARKET SHARES VALUE ------------------------------------------------------------------------ COMMON STOCKS (CONTINUED) Shuffle Master, Inc.*........................... 3,337 $93,369 Sonic Corp.*.................................... 2,526 57,466 ---------- TOTAL HOTELS RESTAURANTS & LEISURE 464,990 ---------- HOUSEHOLD DURABLES 1.5% Meritage Homes Corp.*........................... 1,227 56,172 NVR, Inc.*...................................... 114 64,011 ---------- TOTAL HOUSEHOLD DURABLES 120,183 ---------- INSURANCE 1.5% Hilb Rogal & Hobbs Co. ......................... 1,519 60,639 Philadelphia Consolidated Holding Co.*.......... 1,486 58,132 ---------- TOTAL INSURANCE 118,771 ---------- INTERNET & CATALOG RETAIL 1.2% PetMed Express, Inc.*........................... 7,531 94,137 ---------- TOTAL INTERNET & CATALOG RETAIL 94,137 ---------- INTERNET SOFTWARE & SERVICES 5.6% Bankrate, Inc.*................................. 2,379 76,009 Digital Insight Corp.*.......................... 1,028 31,642 j2 Global Communications, Inc.*................. 5,127 140,685 MIVA, Inc.*..................................... 17,571 56,052 WebEx Communications, Inc.*..................... 1,056 40,603 Websense, Inc.*................................. 3,517 96,260 ---------- TOTAL INTERNET SOFTWARE & SERVICES 441,251 ---------- IT SERVICES 2.5% CACI International, Inc. -- Class A*............ 552 31,762 eFunds Corp.*................................... 2,408 59,718 Mantech International Corp. -- Class A*......... 1,580 53,815 Talx Corp. ..................................... 2,192 53,310 ---------- TOTAL IT SERVICES 198,605 ----------
MARKET SHARES VALUE ------------------------------------------------------------------------ LEISURE EQUIPMENT & PRODUCTS 2.4% Nautilus, Inc. ................................. 3,962 $55,983 Polaris Industries, Inc. ....................... 983 42,092 Pool Corp. ..................................... 2,148 88,025 ---------- TOTAL LEISURE EQUIPMENT & PRODUCTS 186,100 ---------- LIFE SCIENCES TOOLS & SERVICES 1.0% Dionex Corp.*................................... 902 49,069 PharmaNet Development Group, Inc.*.............. 1,523 28,480 ---------- TOTAL LIFE SCIENCES TOOLS & SERVICES 77,549 ---------- MACHINERY 0.7% ASV, Inc.*...................................... 1,076 15,720 EnPro Industries, Inc.*......................... 1,190 38,080 ---------- TOTAL MACHINERY 53,800 ---------- MEDIA 1.2% Advo, Inc. ..................................... 1,425 41,838 Arbitron, Inc. ................................. 1,223 51,366 ---------- TOTAL MEDIA 93,204 ---------- OIL, GAS & CONSUMABLE FUELS 7.6% Cabot Oil & Gas Corp. .......................... 629 33,280 Cimarex Energy Co. ............................. 1,028 37,029 Frontier Oil Corp. ............................. 4,551 133,799 Helix Energy Solutions Group, Inc.*............. 897 28,973 Penn Virginia Corp. ............................ 792 56,668 Petroleum Development Corp.*.................... 1,150 53,072 St Mary Land & Exploration Co. ................. 2,152 80,248 Stone Energy Corp.*............................. 1,352 52,687 Swift Energy Co.*............................... 1,141 53,308 World Fuel Services Corp. ...................... 1,450 62,379 ---------- TOTAL OIL, GAS & CONSUMABLE FUELS 591,443 ----------
See Notes to Financial Statements. ANNUAL REPORT 71 RYDEX S&P SMALLCAP 600 PURE GROWTH ETF SCHEDULE OF INVESTMENTS(continued) October 31, 2006 --------------------------------------------------------------------------------
MARKET SHARES VALUE ------------------------------------------------------------------------ COMMON STOCKS (CONTINUED) PERSONAL PRODUCTS 1.6% NBTY, Inc.*..................................... 2,290 $63,708 USANA Health Sciences, Inc.*.................... 1,437 64,550 ---------- TOTAL PERSONAL PRODUCTS 128,258 ---------- PHARMACEUTICALS 5.0% Sciele Pharma, Inc.*............................ 1,668 36,379 Bradley Pharmaceuticals, Inc.*.................. 4,616 80,319 CNS, Inc. ...................................... 3,512 130,120 Connetics Corp.*................................ 5,656 96,378 Noven Pharmaceuticals, Inc.*.................... 2,249 49,950 ---------- TOTAL PHARMACEUTICALS 393,146 ---------- ROAD & RAIL 2.0% Heartland Express, Inc. ........................ 2,343 38,261 Knight Transportation, Inc. .................... 2,765 50,378 Landstar System, Inc. .......................... 1,478 68,639 ---------- TOTAL ROAD & RAIL 157,278 ---------- SEMICONDUCTORS & SEMICONDUCTOR EQUIPMENT 0.7% Cabot Microelectronics Corp.*................... 1,868 53,331 ---------- TOTAL SEMICONDUCTORS & SEMICONDUCTOR EQUIPMENT 53,331 ---------- SOFTWARE 4.5% Ansys, Inc.*.................................... 1,238 56,948 EPIQ Systems, Inc.*............................. 2,197 33,570 Factset Research Systems, Inc. ................. 2,014 102,512 Kronos, Inc.*................................... 702 23,798 Manhattan Associates, Inc.*..................... 1,936 57,170 Quality Systems, Inc. .......................... 1,064 45,156 Take-Two Interactive Software, Inc.*............ 2,132 29,827 ---------- TOTAL SOFTWARE 348,981 ----------
MARKET SHARES VALUE ------------------------------------------------------------------------ SPECIALTY RETAIL 6.9% Childrens Place Retail Stores Inc (The)*........ 857 $60,153 Christopher & Banks Corp. ...................... 5,335 143,992 Genesco, Inc.*.................................. 1,064 39,975 Guitar Center, Inc.*............................ 816 35,390 Hibbett Sporting Goods, Inc.*................... 1,729 50,556 HOT Topic, Inc.*................................ 5,574 56,353 Select Comfort Corp.*........................... 2,343 50,093 Tractor Supply Co.*............................. 889 43,045 Tween Brands, Inc.*............................. 1,389 58,088 ---------- TOTAL SPECIALTY RETAIL 537,645 ---------- TEXTILES, APPAREL & LUXURY GOODS 1.7% Fossil, Inc.*................................... 2,388 52,154 K-Swiss, Inc. -- Class A........................ 2,265 80,000 ---------- TOTAL TEXTILES, APPAREL & LUXURY GOODS 132,154 ---------- THRIFTS & MORTGAGE FINANCE 1.8% Flagstar Bancorp, Inc. ......................... 5,359 80,545 Fremont General Corp. .......................... 4,194 60,939 ---------- TOTAL THRIFTS & MORTGAGE FINANCE 141,484 ---------- TOTAL COMMON STOCKS (Cost $7,761,485) 7,815,096 ---------- SHORT TERM INVESTMENTS 0.1% SSgA Prime Money Market Fund.................... 6,267 6,267 ---------- TOTAL SHORT TERM INVESTMENTS (Cost $6,267) 6,267 ---------- TOTAL INVESTMENTS 100.0% (Cost $7,767,752) 7,821,363 ---------- LIABILITIES IN EXCESS OF OTHER ASSETS--0.0%(A) (1,678) ---------- NET ASSETS--100.0% $7,819,685 ------------------------------------------------------------------------
* Non-Income Producing Security. (a) Amount represents less than 0.05% of net assets. See Notes to Financial Statements. ANNUAL REPORT 72 STATEMENTS OF ASSETS AND LIABILITIES October 31, 2006 --------------------------------------------------------------------------------
RYDEX RYDEX RYDEX S&P RYDEX S&P S&P EQUAL RUSSELL TOP 500 PURE 500 PURE WEIGHT ETF 50 ETF VALUE ETF GROWTH ETF -------------- ------------ ----------- ----------- ASSETS Investments at Market Value*.............. $1,759,101,860 $364,488,460 $21,174,014 $17,648,068 Cash.................. -- -- -- -- Receivables: Investments Sold.... -- -- 39,794 -- Dividends........... 1,278,368 304,752 29,521 6,448 -------------- ------------ ----------- ----------- TOTAL ASSETS...... 1,760,380,228 364,793,212 21,243,329 17,654,516 -------------- ------------ ----------- ----------- LIABILITIES Payables: Investments Purchased......... -- 195,106 -- -- Income Dividend..... 68 159 -- -- Due to Custodian.... -- -- 5,427 -- Accrued Management Fees.............. 583,052 56,532 5,713 5,188 -------------- ------------ ----------- ----------- TOTAL LIABILITIES..... 583,120 251,797 11,140 5,188 -------------- ------------ ----------- ----------- NET ASSETS............ $1,759,797,108 $364,541,415 $21,232,189 $17,649,328 ============== ============ =========== =========== NET ASSETS CONSIST OF: Paid-in Capital....... $1,642,112,784 $344,233,601 $20,211,486 $17,128,091 Undistributed Net Investment Income... 1,095,730 430,201 62,368 6,529 Accumulated Net Realized Loss on Investments......... (17,188,950) (802,950) (52,641) (51,751) Net Unrealized Appreciation on Investments......... 133,777,544 20,680,563 1,010,976 566,459 -------------- ------------ ----------- ----------- NET ASSETS............ $1,759,797,108 $364,541,415 $21,232,189 $17,649,328 ============== ============ =========== =========== Shares Outstanding (Unlimited Shares Authorized), No Par Value............... 38,206,589 3,500,005 650,000 500,000 ============== ============ =========== =========== Net Asset Value, Offering Price and Repurchase Price Per Share............... $ 46.06 $ 104.15 $ 32.66 $ 35.30 ============== ============ =========== =========== *Total Cost of Investments......... $1,625,324,316 $343,807,897 $20,163,038 $17,081,609 ============== ============ =========== ===========
See Notes to Financial Statements. ANNUAL REPORT 73 STATEMENTS OF ASSETS AND LIABILITIES October 31, 2006 --------------------------------------------------------------------------------
RYDEX S&P RYDEX S&P RYDEX S&P RYDEX S&P MIDCAP 400 MIDCAP 400 SMALLCAP 600 SMALLCAP 600 PURE PURE PURE PURE VALUE ETF GROWTH ETF VALUE ETF GROWTH ETF ----------- ----------- ------------ ------------ ASSETS Investments at Market Value*................ $14,949,707 $22,587,976 $6,007,063 $7,821,363 Cash.................... -- -- -- 2,006 Receivables: Investments Sold...... 98,996 357,412 10,389 -- Dividends............. 19,286 4,187 6,090 610 ----------- ----------- ---------- ---------- TOTAL ASSETS........ 15,067,989 22,949,575 6,023,542 7,823,979 ----------- ----------- ---------- ---------- LIABILITIES Payables: Investments Purchased........... -- 396,199 -- 2,006 Dividend Payable...... -- -- -- -- Due to Custodian...... 91,067 -- 2,686 -- Accrued Management Fees................ 4,386 6,658 1,761 2,288 ----------- ----------- ---------- ---------- TOTAL LIABILITIES... 95,453 402,857 4,447 4,294 ----------- ----------- ---------- ---------- NET ASSETS.............. $14,972,536 $22,546,718 $6,019,095 $7,819,685 =========== =========== ========== ========== NET ASSETS CONSIST OF: Paid-in Capital......... $14,398,483 $23,560,420 $5,766,825 $7,823,705 Undistributed Net Investment Income..... 21,957 2,363 7,703 -- Accumulated Net Realized Loss on Investments... (99,961) (23,417) (24,715) (57,631) Net Unrealized Appreciation/ (Depreciation) on Investments........... 652,057 (992,648) 269,282 53,611 ----------- ----------- ---------- ---------- NET ASSETS.............. $14,972,536 $22,546,718 $6,019,095 $7,819,685 =========== =========== ========== ========== Shares Outstanding (Unlimited Shares Authorized), No Par Value................. 450,000 450,000 150,000 200,000 =========== =========== ========== ========== Net Asset Value, Offering Price and Repurchase Price Per Share................. $ 33.27 $ 50.10 $ 40.13 $ 39.10 =========== =========== ========== ========== *Total Cost of Investments........... $14,297,650 $23,580,624 $5,737,781 $7,767,752 =========== =========== ========== ==========
See Notes to Financial Statements. ANNUAL REPORT 74 STATEMENTS OF OPERATIONS For the Year Ended October 31, 2006 --------------------------------------------------------------------------------
RYDEX S&P RYDEX S&P RYDEX S&P EQUAL RYDEX RUSSELL 500 PURE 500 PURE WEIGHT ETF TOP 50 ETF VALUE ETF* GROWTH ETF* ------------- ------------- ------------- ----------- INVESTMENT INCOME Dividends........... $ 24,355,871 $ 3,564,454 $ 219,473 $ 75,707 Foreign Taxes Withheld.......... -- -- -- -- ------------ ----------- ---------- -------- Total Income...... 24,355,871 3,564,454 219,473 75,707 ------------ ----------- ---------- -------- EXPENSES Management Fee...... 6,067,717 326,403 28,282 32,115 ------------ ----------- ---------- -------- Net Investment Income.............. 18,288,154 3,238,051 191,191 43,592 ------------ ----------- ---------- -------- REALIZED AND UNREALIZED GAIN/(LOSS) ON INVESTMENTS Net Realized Gain/(Loss) From: Investments......... (11,744,562) (716,563) (56,285) (51,751) In-kind Redemptions....... 110,674,899 7,329,670 -- -- ------------ ----------- ---------- -------- Net Realized Gain/(Loss)..... 98,930,337 6,613,107 (56,285) (51,751) Net Change in Unrealized Appreciation on Investments......... 112,521,932 22,742,988 1,010,976 566,459 ------------ ----------- ---------- -------- Net Realized and Unrealized Gain on Investments......... 211,452,269 29,356,095 954,691 514,708 ------------ ----------- ---------- -------- NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS...... $229,740,423 $32,594,146 $1,145,882 $558,300 ============ =========== ========== ========
* The Fund commenced operations on March 1, 2006. See Notes to Financial Statements. ANNUAL REPORT 75 STATEMENTS OF OPERATIONS For the Year Ended October 31, 2006 --------------------------------------------------------------------------------
RYDEX S&P RYDEX S&P RYDEX S&P RYDEX S&P MIDCAP 400 MIDCAP 400 SMALLCAP 600 SMALLCAP 600 PURE PURE PURE PURE VALUE ETF* GROWTH ETF* VALUE ETF* GROWTH ETF* ---------- ----------- ------------ ------------ INVESTMENT INCOME Dividends............. $ 189,189 $ 50,353 $ 69,178 $ 14,651 Foreign Taxes Withheld............ -- -- (48) -- --------- ----------- -------- --------- Total Income........ 189,189 50,353 69,130 14,651 --------- ----------- -------- --------- EXPENSES Management Fee........ 27,406 42,331 13,382 16,689 --------- ----------- -------- --------- Net Investment Income/(Loss)......... 161,783 8,022 55,748 (2,038) --------- ----------- -------- --------- REALIZED AND UNREALIZED GAIN/(LOSS) ON INVESTMENTS Net Realized Gain/(Loss) From: Investments........... (106,316) (23,417) (25,510) (61,118) In-kind Redemptions... -- -- -- (178,101) --------- ----------- -------- --------- Net Realized Loss... (106,316) (23,417) (25,510) (239,219) Net Change in Unrealized Appreciation/(Depreciation) on Investments........ 652,057 (992,648) 269,282 53,611 --------- ----------- -------- --------- Net Realized and Unrealized Gain/(Loss) on Investments........ 545,741 (1,016,065) 243,772 (185,608) --------- ----------- -------- --------- NET INCREASE/(DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS........ $ 707,524 $(1,008,043) $299,520 $(187,646) ========= =========== ======== =========
* The Fund commenced operations on March 1, 2006. See Notes to Financial Statements. ANNUAL REPORT 76 STATEMENTS OF CHANGES IN NET ASSETS --------------------------------------------------------------------------------
RYDEX S&P EQUAL WEIGHT ETF ----------------------------------- YEAR ENDED YEAR ENDED OCTOBER 31, 2006 OCTOBER 31, 2005 ---------------- ---------------- OPERATIONS Net Investment Income.................. $ 18,288,154 $ 9,400,925 Net Realized Gain...................... 98,930,337 64,487,720 Net Change in Unrealized Appreciation on Investments....................... 112,521,932 319,080 -------------- -------------- Net Increase in Net Assets Resulting From Operations...................... 229,740,423 74,207,725 -------------- -------------- DISTRIBUTIONS TO SHAREHOLDERS FROM Net Investment Income.................. (17,292,008) (8,884,060) -------------- -------------- SHAREHOLDER TRANSACTIONS Proceeds From Shares Sold.............. 1,072,339,911 673,529,856 Value of Shares Reinvested............. 114,370 -- Value of Shares Repurchased............ (596,515,156) (153,080,243) -------------- -------------- Net Increase in Net Assets Resulting From Share Transactions.............. 475,939,125 520,449,613 -------------- -------------- Increase in Net Assets............... 688,387,540 585,773,278 NET ASSETS--BEGINNING OF PERIOD.......... 1,071,409,568 485,636,290 -------------- -------------- NET ASSETS--END OF PERIOD(1)............. $1,759,797,108 $1,071,409,568 ============== ============== (1) Including Undistributed Net Investment Income.................... $ 1,095,730 $ 569,892 ============== ============== CHANGES IN SHARES OUTSTANDING: Shares Sold............................ 14,253,000 4,350,000 Shares Issued in Connection with Stock Split................................ 27,150,006 -- Shares Reinvested...................... 2,583 -- Shares Repurchased..................... (9,950,000) (1,000,000) Shares Outstanding, Beginning of Year................................. 6,751,000 3,401,000 -------------- -------------- Shares Outstanding, End of Year........ 38,206,589 6,751,000 ============== ==============
See Notes to Financial Statements. ANNUAL REPORT 77 STATEMENTS OF CHANGES IN NET ASSETS --------------------------------------------------------------------------------
RYDEX RUSSELL TOP 50 ETF ----------------------------------- FOR THE PERIOD MAY 4, 2005* YEAR ENDED THROUGH OCTOBER 31, 2006 OCTOBER 31, 2005 ---------------- ---------------- OPERATIONS Net Investment Income................... $ 3,238,051 $ 872,067 Net Realized Gain/(Loss)................ 6,613,107 (98,847) Net Change in Unrealized Appreciation/ (Depreciation) on Investments......... 22,742,988 (2,062,425) ------------ ------------ Net Increase/(Decrease) in Net Assets Resulting From Operations............. 32,594,146 (1,289,205) ------------ ------------ DISTRIBUTIONS TO SHAREHOLDERS FROM Net Investment Income................... (3,010,095) (669,822) ------------ ------------ SHAREHOLDER TRANSACTIONS Proceeds From Shares Sold............... 275,530,048 143,626,041 Value of Shares Reinvested.............. 512 -- Value of Shares Repurchased............. (77,658,417) (4,581,793) ------------ ------------ Net Increase in Net Assets Resulting From Share Transactions............... 197,872,143 139,044,248 ------------ ------------ Increase in Net Assets................ 227,456,194 137,085,221 NET ASSETS--BEGINNING OF PERIOD........... 137,085,221 -- ------------ ------------ NET ASSETS--END OF PERIOD(1).............. $364,541,415 $137,085,221 ============ ============ (1) Including Undistributed Net Investment Income................................ $ 430,201 $ 202,245 ============ ============ CHANGES IN SHARES OUTSTANDING: Shares Sold............................. 2,800,000 1,550,000 Shares Reinvested....................... 5 -- Shares Repurchased...................... (800,000) (50,000) Shares Outstanding, Beginning of Period................................ 1,500,000 -- ------------ ------------ Shares Outstanding, End of Period....... 3,500,005 1,500,000 ============ ============
* The Fund commenced operations on May 4, 2005. See Notes to Financial Statements. ANNUAL REPORT 78 STATEMENTS OF CHANGES IN NET ASSETS --------------------------------------------------------------------------------
RYDEX RYDEX S&P 500 PURE S&P 500 PURE VALUE ETF GROWTH ETF ---------------- ---------------- FOR THE PERIOD FOR THE PERIOD MARCH 1, 2006* MARCH 1, 2006* THROUGH THROUGH OCTOBER 31, 2006 OCTOBER 31, 2006 ---------------- ---------------- OPERATIONS Net Investment Income................... $ 191,191 $ 43,592 Net Realized Loss....................... (56,285) (51,751) Net Change in Unrealized Appreciation on Investments........................... 1,010,976 566,459 ----------- ----------- Net Increase in Net Assets Resulting From Operations....................... 1,145,882 558,300 ----------- ----------- DISTRIBUTIONS TO SHAREHOLDERS FROM Net Investment Income................... (125,179) (37,063) ----------- ----------- SHAREHOLDER TRANSACTIONS Proceeds From Shares Sold............... 20,211,486 17,128,091 Value of Shares Reinvested.............. -- -- Value of Shares Repurchased............. -- -- ----------- ----------- Net Increase in Net Assets Resulting From Share Transactions............... 20,211,486 17,128,091 ----------- ----------- Increase in Net Assets................ 21,232,189 17,649,328 NET ASSETS--BEGINNING OF PERIOD........... -- -- ----------- ----------- NET ASSETS--END OF PERIOD(1).............. $21,232,189 $17,649,328 =========== =========== (1) Including Undistributed Net Investment Income.................................. $ 62,368 $ 6,529 =========== =========== CHANGES IN SHARES OUTSTANDING: Shares Sold............................. 650,000 500,000 Shares Reinvested....................... -- -- Shares Repurchased...................... -- -- Shares Outstanding, Beginning of Period................................ -- -- ----------- ----------- Shares Outstanding, End of Period....... 650,000 500,000 =========== ===========
* The Fund commenced operations on March 1, 2006. See Notes to Financial Statements. ANNUAL REPORT 79 STATEMENTS OF CHANGES IN NET ASSETS --------------------------------------------------------------------------------
RYDEX RYDEX S&P MIDCAP S&P MIDCAP 400 PURE 400 PURE VALUE ETF GROWTH ETF ---------------- ---------------- FOR THE PERIOD FOR THE PERIOD MARCH 1, 2006* MARCH 1, 2006* THROUGH THROUGH OCTOBER 31, 2006 OCTOBER 31, 2006 ---------------- ---------------- OPERATIONS Net Investment Income................... $ 161,783 $ 8,022 Net Realized Loss....................... (106,316) (23,417) Net Change in Unrealized Appreciation/ (Depreciation) on Investments......... 652,057 (992,648) ----------- ----------- Net Increase/(Decrease) in Net Assets Resulting From Operations............. 707,524 (1,008,043) ----------- ----------- DISTRIBUTIONS TO SHAREHOLDERS FROM Net Investment Income................... (133,471) (5,659) ----------- ----------- SHAREHOLDER TRANSACTIONS Proceeds From Shares Sold............... 14,398,483 23,560,420 Value of Shares Reinvested.............. -- -- Value of Shares Repurchased............. -- -- ----------- ----------- Net Increase in Net Assets Resulting From Share Transactions............... 14,398,483 23,560,420 ----------- ----------- Increase in Net Assets................ 14,972,536 22,546,718 NET ASSETS--BEGINNING OF PERIOD........... -- -- ----------- ----------- NET ASSETS--END OF PERIOD(1).............. $14,972,536 $22,546,718 =========== =========== (1) Including Undistributed Net Investment Income................................ $ 21,957 $ 2,363 =========== =========== CHANGES IN SHARES OUTSTANDING: Shares Sold............................. 450,000 450,000 Shares Reinvested....................... -- -- Shares Repurchased...................... -- -- Shares Outstanding, Beginning of Period................................ -- -- ----------- ----------- Shares Outstanding, End of Period....... 450,000 450,000 =========== ===========
* The Fund commenced operations on March 1, 2006. See Notes to Financial Statements. ANNUAL REPORT 80 STATEMENT OF CHANGES IN NET ASSETS --------------------------------------------------------------------------------
RYDEX RYDEX S&P SMALLCAP S&P SMALLCAP 600 PURE 600 PURE VALUE ETF GROWTH ETF ---------------- ---------------- FOR THE PERIOD FOR THE PERIOD MARCH 1, 2006* MARCH 1, 2006* THROUGH THROUGH OCTOBER 31, 2006 OCTOBER 31, 2006 ---------------- ---------------- OPERATIONS Net Investment Income/(Loss)........ $ 55,748 $ (2,038) Net Realized Loss................... (25,510) (239,219) Net Change in Unrealized Appreciation on Investments....... 269,282 53,611 ---------- ----------- Net Increase/(Decrease) in Net Assets Resulting From Operations........................ 299,520 (187,646) ---------- ----------- DISTRIBUTIONS TO SHAREHOLDERS FROM Net Investment Income............... (47,250) -- ---------- ----------- SHAREHOLDER TRANSACTIONS Proceeds From Shares Sold........... 5,766,825 15,469,445 Value of Shares Reinvested.......... -- -- Value of Shares Repurchased......... -- (7,462,114) ---------- ----------- Net Increase in Net Assets Resulting From Share Transactions............. 5,766,825 8,007,331 ---------- ----------- Increase in Net Assets.............. 6,019,095 7,819,685 NET ASSETS--BEGINNING OF PERIOD....... -- -- ---------- ----------- NET ASSETS--END OF PERIOD(1).......... $6,019,095 $ 7,819,685 ========== =========== (1) Including Undistributed Net Investment Income................. $ 7,703 $ -- ========== =========== CHANGES IN SHARES OUTSTANDING: Shares Sold......................... 150,000 400,000 Shares Reinvested................... -- -- Shares Repurchased.................. -- (200,000) Shares Outstanding, Beginning of Period............................ -- -- ---------- ----------- Shares Outstanding, End of Period... 150,000 200,000 ========== ===========
* The Fund commenced operations on March 1, 2006. See Notes to Financial Statements. ANNUAL REPORT 81 FINANCIAL HIGHLIGHTS --------------------------------------------------------------------------------
RYDEX S&P EQUAL WEIGHT ETF ---------------------------------------------------------------------------------------- FOR THE PERIOD APRIL 24, 2003* YEAR ENDED YEAR ENDED YEAR ENDED THROUGH OCTOBER 31, 2006(1) OCTOBER 31, 2005(1) OCTOBER 31, 2004(1) OCTOBER 31, 2003(1) ------------------- ------------------- ------------------- ------------------- PER SHARE OPERATING PERFORMANCE: NET ASSET VALUE AT BEGINNING OF PERIOD............. $39.68 $35.70 $31.61 $25.26 ------------------- ------------------- ------------------- ------------------- Net Investment Income**........... 0.52 0.43 0.37 0.18 Net Realized and Unrealized Gain on Investments........ 6.36 3.95 4.08 6.33 ------------------- ------------------- ------------------- ------------------- TOTAL FROM INVESTMENT OPERATIONS......... 6.88 4.38 4.45 6.51 ------------------- ------------------- ------------------- ------------------- DISTRIBUTIONS TO SHAREHOLDERS FROM: Net Investment Income............. (0.50) (0.40) (0.36) (0.16) ------------------- ------------------- ------------------- ------------------- NET ASSET VALUE AT END OF PERIOD...... $46.06 $39.68 $35.70 $31.61 =================== =================== =================== =================== TOTAL RETURN***...... 17.42% 12.29% 14.11% 25.77% RATIOS/SUPPLEMENTAL DATA: Net Assets at End of Period (000's omitted)........... $1,759,797 $1,071,410 $485,636 $177,135 RATIO TO AVERAGE NET ASSETS OF: Expenses............. 0.40% 0.40% 0.40% 0.40%**** Net Investment Income............. 1.21% 1.11% 1.09% 1.13%**** Portfolio Turnover Rate+.............. 16% 22% 55% 42%
* The Fund commenced operations on April 24, 2003. ** Based on average shares outstanding. *** Total investment return is calculated assuming an initial investment made at the net asset value at the beginning of the period, reinvestment of all dividends and distributions at net asset value during the period, and redemption on the last day of the period. Transaction fees are not reflected in the calculation of total investment return. Total investment return calculated for a period of less than one year is not annualized. **** Annualized. (1) All per share information representing data prior to April 26, 2006 has been adjusted for the effect of a 4 for 1 stock split which occurred on April 26, 2006. + Portfolio turnover is not annualized and does not include securities received or delivered from processing creations or redemptions. See Notes to Financial Statements. ANNUAL REPORT 82 FINANCIAL HIGHLIGHTS --------------------------------------------------------------------------------
RYDEX RUSSELL TOP 50 ETF ----------------------------------- FOR THE PERIOD MAY 4, 2005* YEAR ENDED THROUGH OCTOBER 31, 2006 OCTOBER 31, 2005 ---------------- ---------------- PER SHARE OPERATING PERFORMANCE: NET ASSET VALUE AT BEGINNING OF PERIOD............................. $91.39 $91.51 ---------------- ---------------- Net Investment Income**.............. 1.92 0.79 Net Realized and Unrealized Gain/(Loss) on Investments......... 12.71 (0.46) ---------------- ---------------- TOTAL FROM INVESTMENT OPERATIONS..... 14.63 0.33 ---------------- ---------------- DISTRIBUTIONS TO SHAREHOLDERS FROM: Net Investment Income................ (1.87) (0.45) ---------------- ---------------- NET ASSET VALUE AT END OF PERIOD..... $104.15 $91.39 ================ ================ TOTAL RETURN***...................... 16.18% 0.36% RATIOS/SUPPLEMENTAL DATA: Net Assets at End of Period (000's omitted)........................... $364,541 $137,085 RATIO TO AVERAGE NET ASSETS OF: Expenses............................. 0.20% 0.20%**** Net Investment Income................ 1.98% 1.74%**** Portfolio Turnover Rate+............. 7% 1%
* The Fund commenced operations on May 4, 2005. ** Based on average shares outstanding. *** Total investment return is calculated assuming an initial investment made at the net asset value at the beginning of the period, reinvestment of all dividends and distributions at net asset value during the period, and redemption on the last day of the period. Transaction fees are not reflected in the calculation of total investment return. Total investment return calculated for a period of less than one year is not annualized. **** Annualized. + Portfolio turnover is not annualized and does not include securities received or delivered from processing creations or redemptions. See Notes to Financial Statements. ANNUAL REPORT 83 FINANCIAL HIGHLIGHTS --------------------------------------------------------------------------------
RYDEX S&P RYDEX S&P 500 RYDEX S&P 500 MIDCAP 400 PURE VALUE ETF PURE GROWTH ETF PURE VALUE ETF ---------------- ---------------- ---------------- FOR THE PERIOD FOR THE PERIOD FOR THE PERIOD MARCH 1, 2006* MARCH 1, 2006* MARCH 1, 2006* THROUGH THROUGH THROUGH OCTOBER 31, 2006 OCTOBER 31, 2006 OCTOBER 31, 2006 ---------------- ---------------- ---------------- PER SHARE OPERATING PERFORMANCE: NET ASSET VALUE AT BEGINNING OF PERIOD...... $29.87 $34.42 $31.53 ---------------- --------------- ---------------- Net Investment Income**.... 0.49 0.11 0.44 Net Realized and Unrealized Gain on Investments...... 2.58 0.84 1.60 ---------------- --------------- ---------------- TOTAL FROM INVESTMENT OPERATIONS............... 3.07 0.95 2.04 ---------------- --------------- ---------------- DISTRIBUTIONS TO SHAREHOLDERS FROM: Net Investment Income...... (0.28) (0.07) (0.30) ---------------- --------------- ---------------- NET ASSET VALUE AT END OF PERIOD................... $32.66 $35.30 $33.27 ================ =============== ================ TOTAL RETURN***............ 10.27% 2.77% 6.48% RATIOS/SUPPLEMENTAL DATA: Net Assets at End of Period (000's omitted).......... $21,232 $17,649 $14,973 RATIO TO AVERAGE NET ASSETS OF: Expenses................... 0.35%**** 0.35%**** 0.35%**** Net Investment Income...... 2.37%**** 0.48%**** 2.07%**** Portfolio Turnover Rate+... 4% 7% 4%
* The Fund commenced operations on March 1, 2006. ** Based on average shares outstanding. *** Total investment return is calculated assuming an initial investment made at the net asset value at the beginning of the period, reinvestment of all dividends and distributions at net asset value during the period, and redemption on the last day of the period. Transaction fees are not reflected in the calculation of total investment return. Total investment return calculated for a period of less than one year is not annualized. **** Annualized. + Portfolio turnover is not annualized and does not include securities received or delivered from processing creations or redemptions. See Notes to Financial Statements. ANNUAL REPORT 84 FINANCIAL HIGHLIGHTS --------------------------------------------------------------------------------
RYDEX S&P RYDEX S&P RYDEX S&P MIDCAP 400 SMALLCAP 600 SMALLCAP 600 PURE GROWTH ETF PURE VALUE ETF PURE GROWTH ETF ---------------- ---------------- ---------------- FOR THE PERIOD FOR THE PERIOD FOR THE PERIOD MARCH 1, 2006* MARCH 1, 2006* MARCH 1, 2006* THROUGH THROUGH THROUGH OCTOBER 31, 2006 OCTOBER 31, 2006 OCTOBER 31, 2006 ---------------- ---------------- ---------------- PER SHARE OPERATING PERFORMANCE: NET ASSET VALUE AT BEGINNING OF PERIOD..... $52.62 $38.45 $39.31 ----------- ----------- ---------- Net Investment Income (Loss)**................ 0.02 0.37 (0.01) Net Realized and Unrealized Gain/(Loss) on Investments.......... (2.53) 1.62 (0.20) ----------- ----------- ---------- TOTAL FROM INVESTMENT OPERATIONS.............. (2.51) 1.99 (0.21) ----------- ----------- ---------- DISTRIBUTIONS TO SHAREHOLDERS FROM: Net Investment Income..... (0.01) (0.31) -- ----------- ----------- ---------- NET ASSET VALUE AT END OF PERIOD.................. $50.10 $40.13 $39.10 =========== =========== ========== TOTAL RETURN***........... (4.76)% 5.19% (0.55)% RATIOS/SUPPLEMENTAL DATA: Net Assets at End of Period (000's omitted)................ $22,547 $6,019 $7,820 RATIO TO AVERAGE NET ASSETS OF: Expenses.................. 0.35%**** 0.35%**** 0.35%**** Net Investment Income (Loss).................. 0.07%**** 1.46%**** -0.04%**** Portfolio Turnover Rate+................... 14% 7% 14%
* The Fund commenced operations on March 1, 2006. ** Based on average shares outstanding. *** Total investment return is calculated assuming an initial investment made at the net asset value at the beginning of the period, reinvestment of all dividends and distributions at net asset value during the period, and redemption on the last day of the period. Transaction fees are not reflected in the calculation of total investment return. Total investment return calculated for a period of less than one year is not annualized. **** Annualized. + Portfolio turnover is not annualized and does not include securities received or delivered from processing creations or redemptions. See Notes to Financial Statements. ANNUAL REPORT 85 NOTES TO FINANCIAL STATEMENTS October 31, 2006 -------------------------------------------------------------------------------- 1. ORGANIZATION Rydex ETF Trust (the "Trust") is an open-end, management investment company registered under the Investment Company Act of 1940, as amended (the "1940 Act"). The Trust was organized as a Delaware statutory trust on November 22, 2002. The Trust currently consists of eight series: Rydex S&P Equal Weight ETF, Rydex Russell Top 50 ETF, Rydex S&P 500 Pure Value ETF, Rydex S&P 500 Pure Growth ETF, Rydex S&P MidCap 400 Pure Value ETF, Rydex S&P MidCap 400 Pure Growth ETF, Rydex S&P SmallCap 600 Pure Value ETF and Rydex S&P SmallCap 600 Pure Growth ETF, (the "Funds"). Rydex S&P Equal Weight ETF commenced operations on April 24, 2003 and Rydex Russell Top 50 ETF commenced operations on May 4, 2005. Rydex S&P 500 Pure Value ETF, Rydex S&P 500 Pure Growth ETF, Rydex S&P MidCap 400 Pure Value ETF, Rydex S&P MidCap 400 Pure Growth ETF, Rydex S&P SmallCap 600 Pure Value ETF and Rydex S&P SmallCap 600 Pure Growth ETF commenced operations on March 1, 2006. The Funds' investment objective is to provide investment results that correspond generally to the performance, before fees and expenses, of an index representing publicly traded equity securities (the "Underlying Index"). The Rydex S&P Equal Weight ETF tracks the S&P 500 Equal Weight Total Return Index, the Rydex Russell Top 50 ETF tracks the Russell Top 50(TM) Index, the Rydex S&P 500 Pure Value ETF tracks the S&P 500/Citigroup Pure Value Index, the Rydex S&P 500 Pure Growth ETF tracks the S&P 500/Citigroup Pure Growth Index, the Rydex S&P MidCap 400 Pure Value ETF tracks the S&P MidCap 400/Citigroup Pure Value Index, the Rydex S&P MidCap 400 Pure Growth ETF tracks the S&P MidCap 400/Citigroup Pure Growth Index, the Rydex S&P SmallCap 600 Pure Value ETF tracks the S&P SmallCap 600/Citigroup Pure Value Index and the Rydex S&P SmallCap 600 Pure Growth ETF tracks the S&P SmallCap 600/Citigroup Pure Growth Index. The Funds seek to achieve their objective by investing in common stocks that comprise the Underlying Index. The Funds use a "replication" strategy to track the Underlying Index. "Replication" refers to investing in substantially all of the securities in the Underlying Index in approximately the same proportions as the Underlying Index. The Funds operate as index funds and are not actively managed. Adverse performance of a security in the Funds' portfolio will ordinarily not result in the elimination of the security from the Funds' portfolio. The Funds issue and redeem shares on a continuous basis, at net asset value, only in aggregations of 50,000 shares called a "Creation Unit". Creation Units are issued and redeemed principally in-kind for securities included in the Underlying Index. 2. SIGNIFICANT ACCOUNTING POLICIES 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 amounts of assets, liabilities and ANNUAL REPORT 86 NOTES TO FINANCIAL STATEMENTS (continued) -------------------------------------------------------------------------------- disclosures at the date of the financial statements and accompanying notes and the reported amounts of increases and decreases in net assets from operations during the reporting period. Management believes that the estimates utilized in preparing the Funds' financial statements are reasonable and prudent; however, actual results could differ from these estimates. A. SECURITY VALUATION Securities listed on a domestic securities exchange are valued based on the last sale price as of the close of regular trading hours on the New York Stock Exchange or, in the absence of recorded sales, are valued at the most recent bid price. Securities for which the primary market is the National Association of Securities Dealers Automated Quotations National Market System ("NASDAQ") are valued at the NASDAQ Official Closing Price. The Funds invest in Money Market mutual funds, which are valued at NAV. Securities for which market quotations are not readily available, including investments that are subject to limitations as to their sale, are valued at fair value as determined in good faith by the Advisor in accordance with procedures adopted by the Board of Trustees. In determining fair value, consideration is given to market conditions, relative benchmarks and other financial data. In September 2006, the Financial Accounting Standards Board (FASB) issued Statement of Financial Accounting Standards No. 157, Fair Value Measurement ("SFAS 157"). SFAS 157, which is effective for fiscal years beginning after November 15, 2007, defines fair value, establishes a framework for measuring fair value and expands disclosures about fair value measurements. Management is currently evaluating the impact, if any, the adoption of SFAS 157 will have on the Funds' financial statements. B. SECURITY TRANSACTIONS AND INCOME RECOGNITION Security transactions are recorded on the trade date. Realized gains and losses from portfolio fund transactions are calculated on the identified cost basis. Dividend income is recorded on the ex-dividend date, net of foreign tax withholdings. Interest income is recorded on the accrual basis. C. REPURCHASE AGREEMENTS The Funds may enter into repurchase agreements with financial institutions. The Funds follows certain procedures designed to minimize the risks inherent in such agreements. These procedures include effecting repurchase transactions only with large, well-capitalized and well-established financial institutions whose condition will be continually monitored by Rydex Global Advisors, which acts as the Funds' investment advisor (the "Advisor"). In addition, the value of the collateral underlying the repurchase agreement will always be at least equal to the repurchase price, including any accrued interest earned on the repurchase agreement. In the event of a default or bankruptcy by a selling financial institution, the Funds will seek to liquidate such collateral. However, the exercising of the Funds right to liquidate such collateral could involve certain costs or ANNUAL REPORT 87 NOTES TO FINANCIAL STATEMENTS (continued) -------------------------------------------------------------------------------- delays and, to the extent that proceeds from any sale upon a default of the obligation to repurchase were less than the repurchase price, the Funds could suffer a loss. It is the current policy of the Funds not to invest in repurchase agreements that do not mature within seven days if any such investment, together with any other illiquid assets held by the Funds, amounts to more than 15% of the Funds net assets. The investments of the Funds in repurchase agreements, at times, may be substantial when, in the view of the Advisor, liquidity or other considerations so warrant. For the year ended October 31, 2006, the Funds had not engaged in repurchase transactions. D. FEDERAL INCOME TAXES The Funds policy is to comply with the requirements of the Internal Revenue Code applicable to regulated investment companies and to distribute all of the taxable income to the shareholders within the allowable time limits. Therefore, no provision for Federal income taxes 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 of America. These differences are primarily due to differing treatments for in-kind redemptions, income reclassifications from real estate investment trusts ("REITs") and losses deferred due to wash sales. In order to present the tax character of paid-in-capital, undistributed net investment income and accumulated realized gains and losses on investments on the statement of assets and liabilities, certain adjustments have been made to these accounts. These adjustments have no effect on net assets or net asset value per share. The most significant of these adjustments is for net capital gains resulting from in-kind redemptions which, because they are not taxable to the Funds, and therefore are not distributed to existing Fund shareholders, are reclassified to paid-in-capital. The in-kind net capital gains for the year ended October 31, 2006 are disclosed in the Funds' Statement of Operations. For the year ended October 31, 2006, the adjustments for the Funds were as follows:
UNDISTRIBUTED ACCUMULATED PAID-IN NET INVESTMENT NET REALIZED CAPITAL INCOME GAIN/(LOSS) ------------ -------------- ------------- Rydex S&P Equal Weight ETF.......... $110,479,931 $(470,308) $(110,009,623) Rydex Russell Top 50 ETF............ 7,327,589 -- (7,327,589) Rydex S&P 500 Pure Value ETF........ -- (3,644) 3,644 Rydex S&P 500 Pure Growth ETF....... -- -- -- Rydex S&P MidCap 400 Pure Value ETF............................... -- (6,355) 6,355 Rydex S&P MidCap 400 Pure Growth ETF............................... -- -- -- Rydex S&P SmallCap 600 Pure Value ETF............................... -- (795) 795 Rydex S&P SmallCap 600 Pure Growth ETF............................... (183,626) 2,038 181,588
For the year ended October 31, 2006, there were no significant differences between the book basis and tax basis of net unrealized appreciation (depreciation) in value of ANNUAL REPORT 88 NOTES TO FINANCIAL STATEMENTS (continued) -------------------------------------------------------------------------------- investments other than tax deferral of losses on wash sales and the cumulative return of capital payments on REITs. At October 31, 2006, the Funds had capital loss carryforwards which may be utilized to offset any net realized capital gains expiring October 31:
2010 2013 2014 -------- ---------- ----------- Rydex S&P Equal Weight ETF.................. $272,282 $5,596,230 $10,726,815 Rydex Russell Top 50 ETF.................... -- 88,468 675,404 Rydex S&P 500 Pure Value ETF................ -- -- 44,302 Rydex S&P 500 Pure Growth ETF............... -- -- 28,988 Rydex S&P MidCap 400 Pure Value ETF......... -- -- 94,708 Rydex S&P MidCap 400 Pure Growth ETF........ -- -- -- Rydex S&P SmallCap 600 Pure Value ETF....... -- -- 16,696 Rydex S&P SmallCap 600 Pure Growth ETF...... -- -- 27,599
The tax character of distributable earnings (accumulated losses) at October 31, 2006 were as follows:
UNDISTRIBUTED UNREALIZED UNDISTRIBUTED LONG-TERM CAPITAL LOSS APPRECIATION/ ORDINARY INCOME CAPITAL GAIN CARRYFORWARD (DEPRECIATION) --------------- ------------- ------------- -------------- Rydex S&P Equal Weight ETF.................. $1,036,695 -- $(16,595,327) $133,243,024 Rydex Russell Top 50 ETF.................. 430,360 -- (763,872) 20,641,485 Rydex S&P 500 Pure Value ETF............ 62,368 -- (44,302) 1,002,636 Rydex S&P 500 Pure Growth ETF........... 6,529 -- (28,988) 543,696 Rydex S&P MidCap 400 Pure Value ETF....... 21,479 -- (94,708) 647,282 Rydex S&P MidCap 400 Pure Growth ETF...... 66,570 -- -- (1,080,272) Rydex S&P SmallCap 600 Pure Value ETF....... 6,129 -- (16,696) 262,841 Rydex S&P SmallCap 600 Pure Growth ETF...... -- -- (27,599) 23,578
The tax character of distributions paid during 2006 were as follows:
ORDINARY LONG-TERM INCOME CAPITAL GAIN ----------- ------------ Rydex S&P Equal Weight ETF........................... $17,292,008 $ -- Rydex Russell Top 50 ETF............................. 3,010,095 -- Rydex S&P 500 Pure Value ETF......................... 125,179 -- Rydex S&P 500 Pure Growth ETF........................ 37,063 -- Rydex S&P MidCap 400 Pure Value ETF.................. 133,471 -- Rydex S&P MidCap 400 Pure Growth ETF................. 5,659 -- Rydex S&P SmallCap 600 Pure Value ETF................ 47,250 -- Rydex S&P SmallCap 600 Pure Growth ETF............... -- --
The tax character of distributions paid during 2005 were as follows:
ORDINARY LONG-TERM INCOME CAPITAL GAIN ---------- ------------ Rydex S&P Equal Weight ETF............................ $8,884,060 $ -- Rydex Russell Top 50 ETF.............................. 669,822 --
ANNUAL REPORT 89 NOTES TO FINANCIAL STATEMENTS (continued) -------------------------------------------------------------------------------- In June 2006, FASB released FASB Interpretation No. 48 "Accounting for Uncertainty in Income Taxes" (FIN 48). FIN 48 provides guidance for how uncertain tax positions should be recognized, measured, presented and disclosed in the financial statements. FIN 48, an interpretation of Statement of Financial Accounting Standard 109, Accounting for Income Losses, requires the evaluation of tax positions taken or expected to be taken in the course of preparing a fund's tax returns to determine whether the tax positions are "more-likely-than-not" of being sustained by the applicable tax authority. Tax positions not deemed to meet the more-likely-than-not threshold would be recorded as a tax benefit or expense in the current year. Adoption of FIN 48 is required for fiscal years beginning after December 15, 2006 and is to be applied to all open tax years as of the effective date. At this time, management is evaluating the implications of FIN 48 and its impact on the Funds' financial statements has not yet been determined. E. DIVIDENDS AND DISTRIBUTIONS The Funds declare and pay dividends from net investment income and distributions from net realized capital gains at least annually. F. RISK AND UNCERTAINTIES The Trust invests in various investments which are exposed to risk, such as market risk. Due to the level of risk associated with certain investments it is at least reasonably possible that changes in the values of investment securities will occur in the near term and that such changes could materially affect amounts reported in the financial statements. The Rydex Russell Top 50 ETF is a non-diversified fund, subjecting it to a greater risk than funds that are diversified. 3. ADVISORY, ADMINISTRATION AND OTHER TRANSACTIONS WITH AFFILIATES The Advisor determines the composition of the portfolio of securities that must be delivered in exchange for the issuance of Creation Units and periodically adjusts the composition of the portfolio of the Funds to conform to changes in the composition of the relevant index. For these services, the Advisor receives an advisory fee at the annual rate shown as follows of the average daily net assets of the Funds.
ADVISORY FEE ------------- Rydex S&P Equal Weight ETF.................................. 0.40% Rydex Russell Top 50 ETF.................................... 0.20% Rydex S&P 500 Pure Value ETF................................ 0.35% Rydex S&P 500 Pure Growth ETF............................... 0.35% Rydex S&P MidCap 400 Pure Value ETF......................... 0.35% Rydex S&P MidCap 400 Pure Growth ETF........................ 0.35% Rydex S&P SmallCap 600 Pure Value ETF....................... 0.35% Rydex S&P SmallCap 600 Pure Growth ETF...................... 0.35%
ANNUAL REPORT 90 NOTES TO FINANCIAL STATEMENTS (continued) -------------------------------------------------------------------------------- The Advisor pays all expenses of the Funds, including the cost of transfer agency, custody, fund administration, legal, audit and other services, except: interest, taxes, distribution fees and extraordinary expenses. Under an Administration Agreement, State Street Bank and Trust Company (the "Administrator") provides various administrative and accounting services for the maintenance and operations of the Funds. Under a Custodian Agreement with the Trust, the Administrator maintains cash, securities and other assets of the Trust and the Funds in separate accounts for each fund, keeps all necessary accounts and records, and provides other services. The Administrator is required, upon the order of the Trust, to deliver securities held by the Custodian and to make payments for securities purchased by the Trust for the Funds. Pursuant to a Transfer Agency and Service Agreement with the Trust, the Administrator acts as a transfer agent for the Trust's authorized and issued shares of beneficial interest, and as dividend disbursing agent of the Trust. The Advisor compensates the Administrator directly for the foregoing services. The Funds have adopted a Distribution Plan (the "Plan") that allows the Funds to pay distribution fees to Rydex Distributors, Inc. (the "Distributor") and other firms that provide distribution services ("Service Providers"). If a Service Provider provides distribution services, the Funds will pay distribution fees to the Distributor at an annual rate not to exceed 0.25% of average daily net assets, pursuant to Rule 12b-1 of the 1940 Act. The Distributor will, in turn, pay the Service Provider out of its fees. No such fee is currently charged to the Funds. 4. CAPITAL At October 31, 2006, there were an unlimited number of no par value shares of beneficial interest authorized. There is a minimum transaction fee per transaction to those persons purchasing or redeeming Creation Units. An additional charge of up to three times the standard transaction fee may be imposed for purchases and redemptions effected outside the National Securities Clearing Corporation's usual clearing process or for cash. Such transactions are generally permitted on an in-kind basis, with a balancing cash component to equate the transaction to the net asset value per unit of the Fund on the transaction date. The minimum transaction fees are:
MINIMUM TRANSACTION FEE --------------- Rydex S&P Equal Weight ETF.................................. $2,000 Rydex Russell Top 50 ETF.................................... 500 Rydex S&P 500 Pure Value ETF................................ 1,000 Rydex S&P 500 Pure Growth ETF............................... 1,000 Rydex S&P MidCap 400 Pure Value ETF......................... 750 Rydex S&P MidCap 400 Pure Growth ETF........................ 750 Rydex S&P SmallCap 600 Pure Value ETF....................... 1,000 Rydex S&P SmallCap 600 Pure Growth ETF...................... 1,000
ANNUAL REPORT 91 NOTES TO FINANCIAL STATEMENTS (continued) -------------------------------------------------------------------------------- 5. INVESTMENT TRANSACTIONS For the year ended October 31, 2006 the Funds had in-kind contributions and in-kind redemptions as follows:
SUBSCRIPTIONS REDEMPTIONS -------------- ------------ Rydex S&P Equal Weight ETF........................ $1,063,830,687 $582,388,976 Rydex Russell Top 50 ETF.......................... 273,511,180 77,498,876 Rydex S&P 500 Pure Value ETF...................... 20,174,624 -- Rydex S&P 500 Pure Growth ETF..................... 17,114,107 -- Rydex S&P MidCap 400 Pure Value ETF............... 14,349,050 -- Rydex S&P MidCap 400 Pure Growth ETF.............. 23,562,685 -- Rydex S&P SmallCap 600 Pure Value ETF............. 5,766,345 -- Rydex S&P SmallCap 600 Pure Growth ETF............ 15,474,075 7,462,925
Purchases and sales of investment securities (excluding short-term investments, U.S. government and government agency obligations) for the Funds were as follows:
PURCHASES SALES ------------ ------------ Rydex S&P Equal Weight ETF......................... $250,385,193 $252,611,056 Rydex Russell Top 50 ETF........................... 13,500,106 11,784,036 Rydex S&P 500 Pure Value ETF....................... 537,955 468,622 Rydex S&P 500 Pure Growth ETF...................... 969,250 955,863 Rydex S&P MidCap 400 Pure Value ETF................ 409,467 389,798 Rydex S&P MidCap 400 Pure Growth ETF............... 2,571,375 2,374,199 Rydex S&P SmallCap 600 Pure Value ETF.............. 395,221 375,249 Rydex S&P SmallCap 600 Pure Growth ETF............. 1,065,994 972,622
There were no purchases or sales of U.S. government or government agency obligations for the year ended October 31, 2006. At October 31, 2006, the identified cost of investments in securities owned by each Fund for federal income tax purposes and the gross unrealized appreciation and depreciation were as follows:
GROSS GROSS NET UNREALIZED IDENTIFIED UNREALIZED UNREALIZED APPRECIATION COST APPRECIATION DEPRECIATION (DEPRECIATION) -------------- ------------ ------------ -------------- Rydex S&P Equal Weight ETF..................... $1,625,858,836 $181,267,356 $48,024,332 $133,243,024 Rydex Russell Top 50 ETF..................... 343,846,975 22,687,037 2,045,552 20,641,485 Rydex S&P 500 Pure Value ETF..................... 20,171,378 1,358,298 355,662 1,002,636 Rydex S&P 500 Pure Growth ETF..................... 17,104,372 1,243,330 699,634 543,696 Rydex S&P MidCap 400 Pure Value ETF............... 14,302,425 1,182,408 535,126 647,282 Rydex S&P MidCap 400 Pure Growth ETF.............. 23,668,248 1,196,373 2,276,645 (1,080,272) Rydex S&P SmallCap 600 Pure Value ETF.......... 5,744,222 645,793 382,952 262,841 Rydex S&P SmallCap 600 Pure Growth ETF......... 7,797,785 430,005 406,427 23,578
ANNUAL REPORT 92 NOTES TO FINANCIAL STATEMENTS (continued) -------------------------------------------------------------------------------- 6. STOCK SPLIT Effective April 26, 2006, the Rydex S&P Equal Weight ETF underwent a 4-for-1 stock split. The effect of this transaction was to multiply the number of outstanding shares in the Rydex S&P Equal Weight ETF by four, while dividing the net asset value by four. 7. CHANGE IN INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM The Board of Trustees has selected Ernst & Young LLP (E&Y) to serve as the Funds' independent registered public accounting firm for the fiscal year ended October 31, 2006. The decision to select E&Y was recommended by the Audit Committee and was approved by the Board on September 25, 2006. During the Funds' fiscal years ended October 31, 2005 and October 31, 2004, none of the Funds, their portfolios nor anyone on their behalf consulted with E&Y on items which (i) concerned the application of accounting principles to a specified transaction, either completed or proposed, or the type of audit opinion that might be rendered on the Funds' financial statements; or (ii) concerned the subject of a disagreement (as defined in paragraph (a)(1)(iv) of Item 304 of Regulation S-K) or reportable events (as described in paragraph (a)(1)(iv) of said Item 304). The selection of E&Y does not reflect any disagreements with or dissatisfaction by the Funds or the Board with the performance of the Funds' prior auditor, PricewaterhouseCoopers LLP (PwC). The decision to dismiss PwC effective upon its completion of its audits for the fiscal year ended October 31, 2005 and to select E&Y was recommended by the Funds' Audit Committee and approved by the Funds' Board of Trustees. PwC's report on the Funds' financial statements for the fiscal years ended October 31, 2005 and 2004 contained no adverse opinion or disclaimer of opinion nor were they qualified or modified as to uncertainty, audit scope or accounting principles. During the Funds' fiscal year ended October 31, 2005 and October 31, 2004, (i) there were no disagreements with PwC on any matter of accounting principles or practices, financial statement disclosure or auditing scope or procedure, which disagreements, if not resolved to the satisfaction of PwC, would have caused it to make reference to the subject matter of the disagreements in connection with its report on the Funds' financial statements for such years, and (ii) there were no "reportable events" of the kind described in Item 304(a)(1)(v) of Regulation S-K under the Securities and Exchange Act of 1934, as amended. ANNUAL REPORT 93 REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM -------------------------------------------------------------------------------- THE BOARD OF TRUSTEES AND SHAREHOLDERS OF RYDEX ETF TRUST We have audited the accompanying statements of assets and liabilities, including the schedules of investments, of Rydex ETF Trust (the "Trust"), comprising, respectively, Rydex S&P Equal Weight ETF, Rydex Russell Top 50 ETF, Rydex S&P 500 Pure Value ETF, Rydex S&P 500 Pure Growth ETF, Rydex S&P MidCap 400 Pure Value ETF, Rydex S&P MidCap 400 Pure Growth ETF, Rydex S&P SmallCap 600 Pure Value ETF and Rydex S&P SmallCap 600 Pure Growth ETF (the "Funds"), as of October 31, 20006, and the related statements of operations and changes in net assets, and the financial highlights for the periods indicated therein in the year then ended. These financial statements and financial highlights are the responsibility of the Trust's management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audit. The statements of changes in net assets for the year ended October 31, 2005 and the financial highlights for each of the periods presented through October 31, 2005 of the Rydex S&P Equal Weight ETF and the Rydex Russell Top 50 ETF were audited by other auditors whose report dated December 20, 2005, expressed an unqualified opinion on those statements and financial highlights. We conducted our audit 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 and financial highlights are free of material misstatement. We were not engaged to perform an audit of the Trust's internal control over financial reporting. Our audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Trust's internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements and financial highlights, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. Our procedures included confirmation of securities owned as of October 31, 20006, by correspondence with the custodian and brokers or by other appropriate auditing procedures where replies from brokers were not received. We believe that our audit provides a reasonable basis for our opinion. In our opinion, the financial statements and financial highlights referred to above present fairly, in all material respects, the financial position of each of the respective Funds constituting the Rydex ETF Trust at October 31, 2006, the results of their operations, the changes in their net assets, and the financial highlights for the periods indicated therein in the year then ended, in conformity with U.S. generally accepted accounting principles. Ernst & Young LLP Boston, Massachusetts December 15, 2006 ANNUAL REPORT 94 SUPPLEMENTAL INFORMATION -------------------------------------------------------------------------------- FEDERAL INCOME TAX INFORMATION Percentage of ordinary distributions (net investment income plus short-term gains) which qualify for the corporate dividends received deduction for the fiscal year ended October 31, 2006:
PERCENTAGE ---------- Rydex S&P Equal Weight ETF.................................. 100% Rydex Russell Top 50 ETF.................................... 100% Rydex S&P 500 Pure Value ETF................................ 100% Rydex S&P 500 Pure Growth ETF............................... 100% Rydex S&P MidCap 400 Pure Value ETF......................... 100% Rydex S&P MidCap 400 Pure Growth ETF........................ 66.42% Rydex S&P SmallCap 600 Pure Value ETF....................... 100% Rydex S&P SmallCap 600 Pure Growth ETF...................... 0%
For the fiscal year ended October 31, 2006, the Funds designate approximately the following amounts pursuant to the Internal Revenue Code as qualified dividend income eligible for reduced tax rates: Rydex S&P Equal Weight ETF.................................. 17,292,008 Rydex Russell Top 50 ETF.................................... 3,010,095 Rydex S&P 500 Pure Value ETF................................ 125,179 Rydex S&P 500 Pure Growth ETF............................... 37,063 Rydex S&P MidCap 400 Pure Value ETF......................... 133,471 Rydex S&P MidCap 400 Pure Growth ETF........................ 5,659 Rydex S&P SmallCap 600 Pure Value ETF....................... 47,250 Rydex S&P SmallCap 600 Pure Growth ETF...................... 0
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 website at http://www.sec.gov. Information regarding how the Funds voted proxies for portfolio securities, if applicable, during the most recent 12-month period ended June 30, 2006, is also available, without charge and upon request, by (i) calling (800) 820-0888; or accessing the Trust's Form N-PX on the SEC's website at 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 Trust'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. ANNUAL REPORT 95 SUPPLEMENTAL INFORMATION (continued) -------------------------------------------------------------------------------- RYDEX INVESTMENTS BOARD REVIEW AND APPROVAL OF THE INVESTMENT ADVISORY AGREEMENT The Investment Company Act of 1940 (the "1940 Act") requires that the initial approval of, as well as the continuation of, a fund's investment advisory agreement be specifically approved (1) by the vote of the trustees or by a vote of the shareholders of the fund, and (2) by the vote of a majority of the trustees who are not parties to the investment advisory agreement or "interested persons" of any party (the "Independent Trustees"), cast in person at a meeting called for the purpose of voting on such approval. In connection with such approvals, the fund's trustees must request and evaluate, and the investment adviser is required to furnish, such information as may be reasonably necessary to evaluate the terms of the advisory agreement. In addition, the Securities and Exchange Commission (the "SEC") takes the position that, as part of their fiduciary duties with respect to fund fees, fund boards are required to evaluate the material factors applicable to a decision to approve an investment advisory agreement. Consistent with these responsibilities, the Rydex ETF Trust Board of Trustees (the "Board") calls and holds one meeting each year that is dedicated to considering whether to renew the investment advisory agreement between Rydex ETF Trust (the "Trust") and PADCO Advisors II, Inc., which does business under the name Rydex Investments ("Rydex Investments"), (the "Advisory Agreement") with respect to existing funds in the Trust, including the funds discussed in this Annual Report (each a "Fund" and collectively, the "Funds"), and to reviewing certain other agreements pursuant to which Rydex Investments provides investment advisory services to certain other registered investment companies. In preparation for the meeting, the Board requests and reviews a wide variety of materials provided by Rydex Investments, including information about Rydex Investments' affiliates, personnel and operations. This information is in addition to the detailed information about the Funds that the Board reviews during the course of each year, including information that relates to Fund operations and performance. The Board also receives a memorandum from Fund counsel regarding the responsibilities of the Board for the approval of investment advisory agreements. In addition, the Independent Trustees receive advice from independent counsel to the Independent Trustees, meet in executive session outside the presence of fund management, and participate in question and answer sessions with representatives of Rydex Investments. At a meeting held on August 27 and 28, 2006, the Board approved the selection of Rydex Investments and the continuance of the Advisory Agreement for an additional one-year period, based on its review of qualitative and quantitative information provided by Rydex Investments. The Board's approval of the Advisory Agreement was based on ANNUAL REPORT 96 SUPPLEMENTAL INFORMATION (continued) -------------------------------------------------------------------------------- consideration and evaluation of a variety of specific factors discussed at that meeting and at prior meetings, including: NATURE, EXTENT AND QUALITY OF SERVICES PROVIDED BY RYDEX INVESTMENTS The Board reviewed the scope of services to be provided by Rydex Investments under the Advisory Agreement and noted that there would be no significant differences between the scope of services required to be provided by Rydex Investments for the past year and the scope of services required to be provided by Rydex Investments for the upcoming year. In reviewing the scope of services provided to the Funds by Rydex Investments, the Board reviewed and discussed Rydex Investments' investment experience, noting that Rydex Investments and its affiliates have committed significant resources over time to the support of the Funds. The Board also considered Rydex Investments' compliance program and its compliance record with respect to the Funds. In that regard, the Board noted that Rydex Investments provides information regarding the portfolio management and compliance to the Board on a periodic basis in connection with regularly scheduled meetings of the Board. In addition to the above considerations, the Board reviewed and considered Rydex Investments' investment processes and strategies, and matters related to Rydex Investments' portfolio transaction policies and procedures. The Board further noted that the Funds have met their investment objectives consistently since their relevant inception dates. Based on this review, the Board concluded that the nature, extent and quality of services to be provided by Rydex Investments to the Funds under the Advisory Agreement were appropriate and continued to support the Board's original selection of Rydex Investments as investment adviser to the Funds. FUND EXPENSES AND PERFORMANCE OF THE FUNDS AND RYDEX INVESTMENTS The Board reviewed statistical information prepared by Rydex Investments regarding the expense ratio components, including actual advisory fees, waivers/reimbursements, and gross and net total expenses of each Fund. The Board also reviewed comparable information for other exchange-traded funds, noting that there were no other exchange-traded funds that pursued the same investment objectives and strategies pursued by the Funds. In addition, the Board reviewed statistical information prepared by Rydex Investments relating to the performance of each Fund, as well as each Fund's ability to successfully track its benchmark over time, and a comparison of each Fund's performance to appropriate indices/benchmarks, in light of total return, yield and market trends. Based on this review, the Board concluded that the investment advisory fees and expense levels and the historical performance of the Funds, as managed by Rydex Investments, were competitive and otherwise satisfactory for the purposes of approving the continuance of the Advisory Agreement. ANNUAL REPORT 97 SUPPLEMENTAL INFORMATION (continued) -------------------------------------------------------------------------------- COSTS OF SERVICES PROVIDED TO THE FUNDS AND PROFITS REALIZED BY RYDEX INVESTMENTS AND ITS AFFILIATES The Board reviewed information about the profitability of the Funds to Rydex Investments based on the advisory fees payable under the Advisory Agreement for the last calendar year. Rydex Investments also presented the Board with material discussing its methodology for determining the level of advisory fees assessable to the Funds. The Board analyzed the Funds' expenses, including the investment advisory fees paid to Rydex Investments. The Board also reviewed information regarding direct revenue received by Rydex Investments and ancillary revenue received by Rydex Investments and/or its affiliates in connection with the services provided to the Funds by Rydex Investments (as discussed below) and/or its affiliates. The Board also discussed Rydex Investments' profit margin as reflected in Rydex Investments' profitability analysis and reviewed information regarding economies of scale (as discussed below). Based on this review, the Board concluded that the profits to be realized by Rydex Investments and its affiliates under the Advisory Agreement and from other relationships between the Funds and Rydex Investments and/or its affiliates, if any, were within the range the Board considered reasonable and appropriate. ECONOMIES OF SCALE In connection with its review of the Funds' profitability analysis, the Board reviewed information regarding economies of scale or other efficiencies that may result from increases in the Funds' asset levels. The Board noted that the Advisory Agreement for the Funds did not provide for any breakpoints in the investment advisory fee rates as a result of increases in the asset levels of such Funds. However, the Board further noted that possible future economies of scale had been taken into consideration by fixing the investment advisory fees at rates at the lower end of the marketplace, effectively giving Fund shareholders, from inception, the benefits of the lower average fee shareholders would have received from a fee structure with declining breakpoints where the initial fee was higher. The Board also reviewed Rydex Investments' historic profitability as investment adviser to the Funds and determined that reductions in fee rates or additions of breakpoints were not warranted at this juncture. Based on this review, the Board, recognizing its responsibility to consider this issue at least annually, concluded that there are limited economies of scale to share with the Funds' shareholders. OTHER BENEFITS TO RYDEX INVESTMENTS AND/OR ITS AFFILIATES In addition to evaluating the services provided by Rydex Investments, the Board also considered the nature, extent, quality and cost of the administrative, distribution, and shareholder services performed by Rydex Investments' affiliates under separate agreements. The Board noted that Rydex Investments reports its use of soft dollars to the Board on a quarterly basis, as well as any portfolio transactions on behalf of the Funds placed through an affiliate of the Funds or Rydex Investments pursuant to Rule 17e-1 ANNUAL REPORT 98 SUPPLEMENTAL INFORMATION (continued) -------------------------------------------------------------------------------- under the 1940 Act. Based on its review, the Board concluded that the nature and quality of the services provided by Rydex Investments' affiliates to the Trust will benefit the Funds' shareholders, and that any ancillary benefits would not be disadvantageous to the Funds' shareholders, particularly in light of the Board's view that the Funds' shareholders benefit from investing in a fund that is part of a large family of funds offering a variety of investment strategies and services. Based on the above analysis, the Board determined that the Advisory Agreement, including the investment advisory fee rates thereunder, are fair and reasonable in light of all relevant circumstances and concluded that it is in the best interest of the Funds and their shareholders to continue the Advisory Agreement. ANNUAL REPORT 99 INFORMATION ON BOARD OF TRUSTEES AND OFFICERS -------------------------------------------------------------------------------- A Board of Trustees oversees all Rydex Investments, in which its members have no stated term of service, and 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 1-800-820-0888. All Trustees and Officers may be reached c/o Rydex Investments, 9601 Blackwell Rd., Suite 500, Rockville, MD 20850. TRUSTEES AND OFFICERS
LENGTH OF SERVICE NAME, POSITION AND AS TRUSTEE NUMBER OF FUNDS YEAR OF BIRTH (YEAR BEGAN) OVERSEEN ------------------------ ---------------------------------- --------------- CARL G. VERBONCOEUR* Rydex Series Funds - 2004 132 Trustee, President Rydex Variable Trust - 2004 (1952) Rydex Dynamic Funds - 2004 Rydex ETF Trust - 2004
PRINCIPAL OCCUPATIONS DURING PAST FIVE YEARS: Chief Executive Officer and Treasurer of Rydex Specialized Products, LLC (2005 to present); 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) --------------- MICHAEL P. BYRUM* Rydex Series Funds - 2005 132 Trustee, Vice President Rydex Variable Trust - 2005 and Secretary (1970) Rydex Dynamic Funds - 2005 Rydex ETF Trust - 2005
PRINCIPAL OCCUPATIONS DURING PAST FIVE YEARS: Secretary of Rydex Specialized Products, LLC (2005 to present); Secretary of Rydex Series Funds, Rydex Variable Trust, and Rydex Dynamic Funds (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 2006); President of Rydex Global Advisors (2004 to present); Chief Operating Officer of Rydex Global Advisors and Rydex Distributors, Inc. (2003 to 2004) -------------------------------------------------------------------------------- INDEPENDENT TRUSTEES
LENGTH OF SERVICE NAME, POSITION AND AS TRUSTEE NUMBER OF YEAR OF BIRTH (YEAR BEGAN) FUNDS OVERSEEN ------------------------ ---------------------------------- --------------- JOHN O. DEMARET Rydex Series Funds - 1997 125 Trustee, Chairman of the Rydex Variable Trust - 1998 Board (1940) Rydex Dynamic Funds - 1999 Rydex ETF Trust - 2003
PRINCIPAL OCCUPATIONS DURING PAST FIVE YEARS: Retired --------------- COREY A. COLEHOUR Rydex Series Funds - 1993 125 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 --------------- ANNUAL REPORT 100 INFORMATION ON BOARD OF TRUSTEES AND OFFICERS -------------------------------------------------------------------------------- INDEPENDENT TRUSTEES (CONT.) LENGTH OF SERVICE NAME, POSITION AND AS TRUSTEE NUMBER OF FUNDS YEAR OF BIRTH (YEAR BEGAN) OVERSEEN ------------------------ ---------------------------------- --------------- J. KENNETH DALTON Rydex Series Funds - 1995 125 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 --------------- WERNER E. KELLER Rydex Series Funds - 2005 125 Trustee (1940) Rydex Variable Trust - 2005 Rydex Dynamic Funds - 2005 Rydex ETF Trust - 2005
PRINCIPAL OCCUPATIONS DURING PAST FIVE YEARS: Retired (2001 to present); Chairman, Centurion Capital Management (1991 to 2001) --------------- THOMAS F. LYDON, JR. Rydex Series Funds - 2005 125 Trustee (1960) Rydex Variable Trust - 2005 Rydex Dynamic Funds - 2005 Rydex ETF Trust - 2005
PRINCIPAL OCCUPATIONS DURING PAST FIVE YEARS: President, Global Trends Investments --------------- PATRICK T. MCCARVILLE Rydex Series Funds - 1997 125 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. --------------- ROGER SOMERS Rydex Series Funds - 1993 125 Trustee (1944) Rydex Variable Trust - 1998 Rydex Dynamic Funds - 1999 Rydex ETF Trust - 2003
PRINCIPAL OCCUPATIONS DURING PAST FIVE YEARS: Owner, Arrow Limousine -------------------------------------------------------------------------------- ANNUAL REPORT 101 INFORMATION ON BOARD OF TRUSTEES AND OFFICERS -------------------------------------------------------------------------------- INDEPENDENT TRUSTEES (CONT.) EXECUTIVE OFFICERS
NAME, POSITION AND PRINCIPAL OCCUPATIONS YEAR OF BIRTH DURING PAST FIVE YEARS ------------------------- -------------------------------------------------- NICK BONOS* Chief Financial Officer of Rydex Specialized Vice President and Products, LLC (2005 to present); Vice President Treasurer (1963) and Treasurer of Rydex Series Funds, Rydex Variable Trust, Rydex Dynamic Funds, and Rydex ETF Trust (2003 to present); Senior Vice President of Rydex Fund Services, Inc. (2003 to present); Vice President and Treasurer of Rydex Capital Partners SPhinX Fund (2003 to 2006); Vice President of Accounting of Rydex Fund Services, Inc. (2000 to 2003) JOANNA M. HAIGNEY* Chief Compliance Officer Rydex Series Funds, Rydex Chief Compliance Officer Assistant Variable Trust, and Rydex Dynamic Funds and Secretary (1966) (2004 to present); Assistant Secretary of Rydex Series Funds, Rydex Variable Trust, and Rydex Dynamic Funds (2000 to present); Assistant Secretary of Rydex ETF Trust (2002 to present); Vice President of Compliance of Rydex Fund Services, Inc. (2000 to present); Secretary of Rydex Capital Partners SPhinX Fund (2003 to 2006) JOSEPH ARRUDA* Assistant Treasurer of Rydex Series Funds, Rydex Assistant Treasurer Variable Trust, Rydex Dynamic Funds, Rydex ETF (1966) Trust (2006); Vice President of Rydex Fund Services, Inc. (2004 to present); Director of Accounting of Rydex Fund Services, Inc. (2003 to 2004); Vice President of Mutual Funds, State Street Bank & Trust (2000 to 2003) PAULA BILLOS* Controller of Rydex Series Funds, Rydex Variable Controller (1974) Trust, Rydex Dynamic Funds, Rydex ETF Trust (2006); Director of Fund Administration of Rydex Fund Services, Inc. (2001 to present)
* Trustees and Officers of the Funds 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. [RYDEX INVESTMENTS LOGO] 9601 Blackwell Road o Suite 500 o Rockville, MD 20850 www.rydexinvestments.com o 800.820.0888 ETF-ANN 1206 X1207 ITEM 2. CODE OF ETHICS. The Registrant has adopted a code of ethics that applies to the Registrant's principal executive officer and principal financial officer. A copy of the code of ethics is filed as an exhibit to this form N-CSR. ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT. The registrant's Board of Trustees has determined that Werner Keller, an "independent" Trustee serving on the registrant's audit committee, is an "audit committee financial expert," as defined in Item 3 of Form N-CSR. Under applicable securities laws, a person who is determined to be an audit committee financial expert will not be deemed an "expert" for any purpose, including without limitation for the purposes of Section 11 of the Securities Act of 1933, as a result of being designated or identified as an audit committee financial expert. The designation or identification of a person as an audit committee financial expert does not impose on such person any duties, obligations, or liabilities that are greater than the duties, obligations, and liabilities imposed on such person as a member of the audit committee and Board of Trustees in the absence of such designation or identification. ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES. (a)-(d) The aggregate Audit Fees billed by 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 October 31, 2006 and October 31, 2005 were $128,000 and $32,400, respectively. The aggregate Tax Fees billed by the Trust's principal accountant 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 October 31, 2006 and October 31, 2005 were $0 and $30,000, 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) Not applicable. (h) Not applicable. 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 January 5, 2007, the President (principal executive officer) and the Treasurer (principal financial officer) of the Rydex ETF 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, and State Street Bank and Trust Company (the "Administrator"), the administrator 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, the Administrator 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, the Administrator, 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 ETF Trust -------------------------------------------------------------------- By (Signature and Title)* /s/ Carl G. Verboncoeur ------------------------------------------------------ Carl G. Verboncoeur, President Date January 5, 2007 ------------------------------------------------------------------------- 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 January 5, 2007 -------------------------------------------------------------------------- By (Signature and Title)* /s/ Nick Bonos ------------------------------------------------------ Nick Bonos, Vice President and Treasurer Date January 5, 2007 -------------------------------------------------------------------------- * Print the name and title of each signing officer under his or her signature.