-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, SOc0cxP60UNBEbuxNYzV75ZXY5qeLkZzJAoUmMV0kjoOLrE4hsQP0Nke27vWTIKX SD3gfjC5RzkjANR6QIozaQ== 0001047469-04-022772.txt : 20040708 0001047469-04-022772.hdr.sgml : 20040708 20040708134525 ACCESSION NUMBER: 0001047469-04-022772 CONFORMED SUBMISSION TYPE: N-CSRS PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 20040430 FILED AS OF DATE: 20040708 EFFECTIVENESS DATE: 20040708 FILER: COMPANY DATA: COMPANY CONFORMED NAME: RYDEX ETF TRUST CENTRAL INDEX KEY: 0001208211 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: N-CSRS SEC ACT: 1940 Act SEC FILE NUMBER: 811-21261 FILM NUMBER: 04905760 MAIL ADDRESS: STREET 1: 9601 BLACKWELL RD STREET 2: STE 500 CITY: ROCKVILLE STATE: MD ZIP: 20850 N-CSRS 1 a2139371zn-csrs.txt N-CSRS 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 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, 2003 ----------------- Date of reporting period: April 30, 2004 --------------- Form N-CSR is to be used by management investment companies to file reports with the Commission not later than 10 days after the transmission to stockholders of any report that is required to be transmitted to stockholders under Rule 30e-1 under the Investment Company Act of 1940 (17 CFR 270.30e-1). The Commission may use the information provided on Form N-CSR in its regulatory, disclosure review, inspection, and policymaking roles. A registrant is required to disclose the information specified by Form N-CSR, and the Commission will make this information public. A registrant is not required to respond to the collection of information contained in Form N-CSR unless the Form displays a currently valid Office of Management and Budget ("OMB") control number. Please direct comments concerning the accuracy of the information collection burden estimate and any suggestions for reducing the burden to Secretary, Securities and Exchange Commission, 450 Fifth Street, NW, Washington, DC 20549-0609. The OMB has reviewed this collection of information under the clearance requirements of 44 U.S.C. Section 3507. ITEM 1. REPORT(S) TO STOCKHOLDERS. The Fund's annual report transmitted to shareholders pursuant to Rule 30e-1 under the Investment Company Act of 1940 is as follows: - -------------------------------------------------------------------------------- THE RYDEX ETF TRUST - -------------------------------------------------------------------------------- RYDEX S&P EQUAL WEIGHT ETF SEMI-ANNUAL REPORT APRIL 30, 2004 THIS REPORT AND THE FINANCIAL STATEMENTS CONTAINED HEREIN ARE SUBMITTED FOR THE GENERAL INFORMATION OF OUR SHAREHOLDERS. THE REPORT IS NOT AUTHORIZED FOR DISTRIBUTION TO PROSPECTIVE INVESTORS UNLESS PRECEDED OR ACCOMPANIED BY AN EFFECTIVE PROSPECTUS. DISTRIBUTED BY RYDEX DISTRIBUTORS, INC. [RYDEX INVESTMENTS LOGO] ESSENTIAL FOR MODERN MARKETS(TM) ETF-SEMI-ANN 0404 1 TABLE OF CONTENTS - -------------------------------------------------------------------------------- LETTER FROM THE CEO ........................................ 2 SCHEDULE OF INVESTMENTS .................................... 3 STATEMENT OF ASSETS AND LIABILITIES ....................... 13 STATEMENT OF OPERATIONS ................................... 14 STATEMENT OF CHANGES IN NET ASSETS ........................ 15 FINANCIAL HIGHLIGHTS ...................................... 16 NOTES TO FINANCIAL STATEMENTS ............................. 17
2 - -------------------------------------------------------------------------------- DEAR SHAREHOLDER: For the period November 1, 2003 through April 30, 2004 markets continued to gain as Rydex S&P Equal Weight ETF (RSP) finished the six-month period up 8.5% and is up 35.8% since inception. RSP outperformed the cap-weighted S&P 500, which returned 6.30% for the period. The consumer discretionary, technology and materials sectors provided for much of RSP's out-performance versus the cap-weighted index. Small-cap stocks continued to lead the way during the reporting period. Investors in RSP were able to take advantage of the small-cap premium provided in the equal weight strategy. In order to properly track the S&P Equal Weight Index, RSP rebalances on a quarterly basis. During the period there were two successful rebalances. Sincerely, /s/ Carl G. Verboncoeur Carl G. Verboncoeur Chief Executive Officer 3 RYDEX S&P EQUAL WEIGHT ETF SCHEDULE OF INVESTMENTS April 30, 2004 (Unaudited) - --------------------------------------------------------------------------------
MARKET SHARES VALUE - -------------------------------------------------------------------------------- COMMON STOCKS 99.9% ADVERTISING AND MARKETING SERVICES 0.6% Monster Worldwide, Inc.* ........................................... 23,325 $597,353 Omnicom Group, Inc. ............................... 7,081 563,010 The Interpublic Group of Cos., Inc. ...................................... 36,339 570,159 -------------- TOTAL ADVERTISING AND MARKETING SERVICES 1,730,522 -------------- AEROSPACE AND DEFENSE 1.7% General Dynamics Corp. ........................................... 6,364 595,797 Goodrich Corp. .................................... 19,966 574,821 Lockheed Martin Corp. ............................. 12,451 593,913 Northrop Grumman Corp. ........................................... 5,694 565,130 Raytheon Co. ...................................... 18,321 591,035 Rockwell Collins, Inc. ............................ 18,068 582,693 The Boeing Co. .................................... 13,926 594,501 United Technologies Corp. ........................................... 6,429 554,566 -------------- TOTAL AEROSPACE AND DEFENSE 4,652,456 -------------- AGRICULTURAL 0.2% Monsanto Co. ...................................... 16,031 554,512 -------------- TOTAL AGRICULTURE 554,512 -------------- AIRLINES 0.4% Delta Air Lines, Inc. ............................. 73,604 457,817 Southwest Airlines Co. ............................ 40,583 579,525 -------------- TOTAL AIRLINES 1,037,342 -------------- ALUMINUM, STEEL AND OTHER METALS 1.0% Alcoa, Inc. ....................................... 15,751 484,343 Allegheny Technologies, Inc. ............................................ 47,212 482,507 Freeport-McMoRan Copper & Gold, Inc., Class B ......................................... 13,089 399,215 Nucor Corp. ....................................... 8,819 523,848 Phelps Dodge Corp.* ............................... 6,588 433,688 United States Steel Corp. ......................... 15,076 431,626 -------------- TOTAL ALUMINUM, STEEL AND OTHER METALS 2,755,227 -------------- AUTOMOTIVE 2.3% AutoNation, Inc.* ................................. 33,057 $562,630 AutoZone, Inc.* ................................... 6,562 574,634 Dana Corp. ........................................ 28,778 580,164 Delphi Corp. ...................................... 54,473 555,625 Ford Motor Co. .................................... 42,042 645,765 General Motors Corp. .............................. 12,175 577,339 Harley-Davidson, Inc. ............................. 10,515 592,205 Johnson Controls, Inc. ............................ 9,552 524,023 Navistar International Corp.* .......................................... 12,181 549,972 PACCAR, Inc. ...................................... 10,121 571,432 Visteon Corp. ..................................... 59,683 648,157 -------------- TOTAL AUTOMOTIVE 6,381,946 -------------- BANKING AND FINANCE 5.5% AmSouth Bancorp. .................................. 23,217 511,238 Bank of America Corp. ............................. 6,876 553,450 Bank One Corp. .................................... 10,250 506,043 BB&T Corp. ........................................ 15,546 536,182 Charter One Financial, Inc. ............................................ 15,320 511,228 Comerica, Inc. .................................... 10,252 529,311 Fifth Third Bancorp ............................... 9,803 526,029 First Horizon National Corp. ........................................... 11,916 523,827 Golden West Financial Corp. ........................................... 4,855 510,309 Huntington Bancshares, Inc. ............................................ 25,083 536,776 J.P. Morgan Chase & Co. ........................... 13,285 499,516 KeyCorp ........................................... 17,914 532,046 M&T Bank Corp. .................................... 6,069 515,865 Marshall & Ilsley Corp. ........................... 14,526 534,121 Mellon Financial Corp. ............................ 17,387 515,351 National City Corp. ............................... 15,385 533,398 North Fork Bancorp., Inc. ............................................ 13,295 493,510 Northern Trust Corp. ............................. 11,715 495,310 Regions Financial Corp. ........................... 15,185 527,071 SouthTrust Corp. .................................. 16,614 516,363 State Street Corp. ................................ 10,503 512,546 SunTrust Banks, Inc. .............................. 7,958 541,542
See Notes to Financial Statements. 4 RYDEX S&P EQUAL WEIGHT ETF SCHEDULE OF INVESTMENTS (CONTINUED) April 30, 2004 (Unaudited) - --------------------------------------------------------------------------------
MARKET SHARES VALUE - -------------------------------------------------------------------------------- COMMON STOCKS (CONTINUED) The Bank of New York Co., Inc. ....................................... 16,791 $489,290 U.S. Bancorp ...................................... 19,851 508,980 Union Planters Corp. .............................. 18,620 517,636 Wachovia Corp. .................................... 11,695 535,046 Washington Mutual, Inc. ........................... 12,678 499,386 Wells Fargo & Co. ................................. 9,538 538,515 Zions Bancorp ..................................... 9,557 540,162 -------------- TOTAL BANKING AND FINANCE 15,090,047 -------------- BEVERAGES, FOOD AND TOBACCO 4.4% Adolph Coors Co. .................................. 8,104 532,514 Altria Group, Inc. ................................ 10,043 556,181 Anheuser-Busch Cos., Inc. ............................................ 10,589 542,580 Archer-Daniels-Midland Co. ............................................. 32,490 570,524 Brown-Forman Corp., Class B ......................................... 11,765 551,308 Campbell Soup Co. ................................. 20,344 562,105 Coca-Cola Enterprises, Inc. ............................................ 23,236 627,372 ConAgra Foods, Inc. ............................... 20,934 604,783 General Mills, Inc. ............................... 11,937 581,929 H.J. Heinz Co. .................................... 14,673 560,362 Hershey Foods Corp. ............................... 6,576 584,541 Kellogg Co. ....................................... 14,126 606,005 McCormick & Co., Inc. ............................. 17,498 597,732 McDonald's Corp. .................................. 19,540 532,074 PepsiCo, Inc. ..................................... 10,782 587,511 R.J. Reynolds Tobacco Holdings, Inc. .................................. 9,321 603,721 SUPER VALU, INC. .................................. 19,226 591,969 The Coca-Cola Co. ................................. 11,256 569,216 The Pepsi Bottling Group, Inc. ..................................... 18,734 548,344 UST, Inc. ......................................... 15,147 563,620 Wm. Wrigley Jr. Co. ............................... 9,334 575,908 -------------- TOTAL BEVERAGES, FOOD AND TOBACCO 12,050,299 -------------- BIOSCIENCES 0.6% Amgen, Inc.* ...................................... 9,009 506,936 Biogen Idec, Inc.* ................................ 10,415 $614,485 Chiron Corp.* ..................................... 11,962 555,037 -------------- TOTAL BIOSCIENCES 1,676,458 -------------- BUILDING AND BUILDING PRODUCTS 1.5% Ecolab, Inc. ...................................... 20,143 600,261 Georgia-Pacific Group ............................. 17,454 612,636 Louisiana-Pacific Corp.* .......................... 23,415 552,360 Masco Corp. ....................................... 18,413 515,748 The Home Depot, Inc. .............................. 14,970 526,794 The Sherwin-Williams Co. ............................................. 15,948 606,821 Vulcan Materials Co. .............................. 11,890 549,794 -------------- TOTAL BUILDING AND BUILDING PRODUCTS 3,964,414 -------------- BUSINESS EQUIPMENT AND SERVICES 0.8% Convergys Corp.* .................................. 35,220 511,394 Lexmark International, Inc.* ........................................... 6,190 559,947 Pitney Bowes, Inc. ................................ 13,184 576,801 Xerox Corp.* ...................................... 38,998 523,743 -------------- TOTAL BUSINESS EQUIPMENT AND SERVICES 2,171,885 -------------- CHEMICALS 2.3% Air Products and Chemicals, Inc. ............................................ 11,513 573,463 Ashland, Inc. ..................................... 11,284 540,504 duPont (E.I.) de Nemours & Co. ................................... 13,215 567,584 Eastman Chemical Co. .............................. 13,894 591,467 Great Lakes Chemical Corp. ........................................... 23,217 583,210 Hercules, Inc.* ................................... 50,099 556,600 PPG Industries, Inc. .............................. 9,776 579,815 Praxair, Inc. ..................................... 15,436 564,186 Rohm and Haas Co. ................................. 14,355 556,687 Sigma-Aldrich Corp. ............................... 10,038 568,552 The Dow Chemical Co. .............................. 14,026 556,692 -------------- TOTAL CHEMICALS 6,238,760 --------------
See Notes to Financial Statements. 5 RYDEX S&P EQUAL WEIGHT ETF SCHEDULE OF INVESTMENTS (CONTINUED) April 30, 2004 (Unaudited) - --------------------------------------------------------------------------------
MARKET SHARES VALUE - -------------------------------------------------------------------------------- COMMON STOCKS (CONTINUED) COMMUNICATIONS, MEDIA AND ENTERTAINMENT 1.6% Clear Channel Communications, Inc. ............................ 13,158 $545,925 Comcast Corp., Class A* ........................................ 19,158 578,764 Gannett Co., Inc. ................................. 6,222 539,323 Meredith Corp. .................................... 10,986 559,627 The McGraw-Hill Cos., Inc. ...................................... 7,149 563,770 Time Warner, Inc.* ................................ 32,395 544,884 Univision Communications, Inc.* ........................... 16,013 542,040 Viacom, Inc., Class B ............................. 14,188 548,366 -------------- TOTAL COMMUNICATIONS, MEDIA AND ENTERTAINMENT 4,422,699 -------------- COMPUTER SERVICES 2.0% Affiliated Computer Services, Inc., Class A* ........................................ 10,549 511,627 Computer Sciences Corp.* .......................... 13,295 543,898 Compuware Corp.* .................................. 74,705 567,758 eBay, Inc.* ....................................... 8,038 641,593 Electronic Data Systems Corp. ................................... 28,173 515,284 Intuit, Inc.* ..................................... 12,956 550,241 Network Appliance, Inc.* .......................... 27,551 513,000 SunGard Data Systems, Inc.* ........................................... 20,039 522,417 Unisys Corp.* ..................................... 40,138 522,998 Yahoo!, Inc.* ..................................... 12,023 608,965 -------------- TOTAL COMPUTER SERVICES 5,497,781 -------------- COMPUTERS - MICRO 1.2% Apple Computer, Inc.* ............................. 21,233 546,325 Dell Inc.* ........................................ 16,709 579,969 Gateway, Inc.* .................................... 103,796 500,297 Hewlett-Packard Co. ............................... 25,385 500,085 International Business Machines Corp. (IBM) ............................ 5,993 528,403 Sun Microsystems, Inc.* ........................... 134,909 526,145 -------------- TOTAL COMPUTERS - MICRO 3,181,224 -------------- COMPUTERS - SOFTWARE AND PERIPHERALS 3.7% Adobe Systems, Inc. ............................... 13,765 $569,045 Autodesk, Inc. .................................... 19,205 643,367 BMC Software, Inc.* ............................... 29,505 510,437 Cisco Systems, Inc.* .............................. 24,403 509,291 Citrix Systems, Inc.* ............................. 26,424 503,377 Computer Associates International, Inc. ............................. 21,111 565,986 Electronic Arts, Inc.* ............................ 11,252 569,576 EMC Corp.* ........................................ 42,998 479,858 Mercury Interactive Corp.* .......................................... 12,728 541,576 Microsoft Corp. ................................... 22,312 579,443 NCR Corp.* ........................................ 13,263 592,723 NVIDIA Corp.* ..................................... 24,767 509,457 Oracle Corp.* ..................................... 41,913 476,132 Parametric Technology Corp.* .......................................... 122,837 562,593 PeopleSoft, Inc.* ................................. 29,890 504,543 Siebel Systems, Inc.* ............................. 49,289 507,184 Symantec Corp.* ................................... 12,832 578,082 VERITAS Software Corp.* .......................................... 19,561 521,692 Xilinx, Inc.* ..................................... 15,206 511,378 -------------- TOTAL COMPUTERS - SOFTWARE AND PERIPHERALS 10,235,740 -------------- CONGLOMERATES 0.4% General Electric Co. .............................. 18,218 545,629 Textron, Inc. ..................................... 10,339 570,506 -------------- TOTAL CONGLOMERATES 1,116,135 -------------- CONSUMER GOODS AND SERVICES 1.6% Avery Dennison Corp. .............................. 8,855 568,757 Brunswick Corp. ................................... 13,915 572,046 Cendant Corp.* .................................... 23,596 558,753 Eastman Kodak Co. ................................. 21,373 551,210 Fortune Brands, Inc. .............................. 7,280 555,100 Hasbro, Inc. ...................................... 24,722 466,999 Mattel, Inc. ...................................... 29,777 505,018 Sara Lee Corp. .................................... 25,362 585,354 -------------- TOTAL CONSUMER GOODS AND SERVICES 4,363,237 --------------
See Notes to Financial Statements. 6 RYDEX S&P EQUAL WEIGHT ETF SCHEDULE OF INVESTMENTS (CONTINUED) April 30, 2004 (Unaudited) - --------------------------------------------------------------------------------
MARKET SHARES VALUE - -------------------------------------------------------------------------------- COMMON STOCKS (CONTINUED) CONTAINERS AND PACKAGING 0.8% Ball Corp. ........................................ 8,407 $554,862 Bemis Co., Inc. ................................... 21,850 590,169 Pactiv Corp.* ..................................... 25,468 584,491 Sealed Air Corp.* ................................. 11,380 558,530 -------------- TOTAL CONTAINERS AND PACKAGING 2,288,052 -------------- DATA PROCESSING SYSTEMS 0.9% Automatic Data Processing, Inc. ............................................ 13,295 582,454 First Data Corp. .................................. 13,168 597,696 Fiserv, Inc.* ..................................... 15,113 552,531 Paychex, Inc. ..................................... 16,154 602,221 -------------- TOTAL DATA PROCESSING SYSTEMS 2,334,902 -------------- EDUCATION 0.2% Apollo Group, Inc., Class A* ........................................ 6,530 593,446 -------------- TOTAL EDUCATION 593,446 -------------- ELECTRONIC EQUIPMENT AND COMPONENTS 5.7% Advanced Micro Devices, Inc.* ........................................... 36,005 511,991 Agilent Technologies, Inc.* ........................................... 17,973 485,451 Altera Corp.* ..................................... 27,675 554,884 American Power Conversion Corp. ................................ 25,314 472,359 Analog Devices, Inc.* ............................. 12,172 518,527 Applied Materials, Inc.* .......................... 26,929 490,916 Applied Micro Circuits Corp.* .......................................... 96,840 427,064 Cooper Industries, Inc., Class A ......................................... 9,866 541,742 Emerson Electric Co. .............................. 9,092 547,520 Intel Corp. ....................................... 20,775 534,541 International Game Technology ...................................... 13,263 500,546 Jabil Circuit, Inc.* .............................. 19,715 520,279 KLA-Tencor Corp.* ................................. 11,074 461,454 Linear Technology Corp. ........................... 15,299 545,103 LSI Logic Corp.* .................................. 61,556 $457,977 Maxim Integrated Products, Inc. .................................. 12,213 561,675 Micron Technology, Inc.* .......................... 34,996 476,646 Molex, Inc. ....................................... 18,333 545,957 National Semiconductor Corp.* .......................................... 14,026 572,120 Novellus Systems, Inc.* ........................... 18,357 531,619 PMC - Sierra, Inc.* ............................... 33,097 402,129 Power-One, Inc.* .................................. 48,420 416,412 QLogic Corp.* ..................................... 13,547 365,634 Rockwell Automation, Inc. ................................ 17,052 557,429 Sanmina-SCI Corp.* ................................ 51,557 516,601 Solectron Corp.* .................................. 97,011 475,354 Symbol Technologies, Inc. ............................................ 41,819 501,828 Tektronix, Inc. ................................... 17,684 523,446 Teradyne, Inc.* ................................... 26,023 530,349 Texas Instruments, Inc. ........................... 19,758 495,926 Thomas & Betts Corp. .............................. 25,397 610,543 -------------- TOTAL ELECTRONIC EQUIPMENT AND COMPONENTS 15,654,022 -------------- FINANCIAL SERVICES 5.5% Ambac Financial Group, Inc. ............................................ 7,353 507,357 American Express Co. .............................. 10,749 526,164 Capital One Financial Corp. ........................................... 7,584 496,980 Citigroup, Inc. ................................... 10,907 524,518 Countrywide Financial Corp. ........................................... 9,015 534,590 Deluxe Corp. ...................................... 13,848 572,060 Equifax, Inc. ..................................... 21,054 516,034 Fannie Mae ........................................ 7,316 502,756 Federated Investors, Inc., Class B ................................... 16,890 496,566 Franklin Resources, Inc. ............................................ 9,729 533,441 Freddie Mac ....................................... 9,281 542,010 H&R Block, Inc. ................................... 10,678 481,685 Janus Capital Group, Inc. ............................................ 33,727 512,650
See Notes to Financial Statements. 7 RYDEX S&P EQUAL WEIGHT ETF SCHEDULE OF INVESTMENTS (CONTINUED) April 30, 2004 (Unaudited) - --------------------------------------------------------------------------------
MARKET SHARES VALUE - -------------------------------------------------------------------------------- COMMON STOCKS (CONTINUED) Lehman Brothers Holdings, Inc. .................................. 6,445 $473,063 Marsh & McLennan Cos., Inc. ...................................... 11,824 533,262 MBIA, Inc. ........................................ 8,722 513,639 MBNA Corp. ........................................ 20,262 493,988 Merrill Lynch & Co., Inc. ............................................ 9,061 491,378 MGIC Investment Corp. ........................................... 8,673 638,505 Moody's Corp. ..................................... 7,879 508,274 Morgan Stanley .................................... 9,211 473,353 PNC Financial Services Group ........................................... 9,818 521,336 Providian Financial Corp.* .......................................... 46,064 558,756 SLM Corp. ......................................... 13,438 514,810 Synovus Financial Corp. ........................................... 24,073 574,622 T. Rowe Price Group, Inc. ............................................ 10,356 531,056 The Bear Stearns Cos., Inc. ............................................ 6,322 506,645 The Charles Schwab Corp. ........................................... 48,549 499,569 The Goldman Sachs Group, Inc. ............................................ 5,348 516,082 -------------- TOTAL FINANCIAL SERVICES 15,095,149 -------------- FOREST AND PAPER PRODUCTS 1.0% Boise Cascade Corp. ............................... 17,078 576,041 International Paper Co. ........................... 13,240 533,837 MeadWestvaco Corp. ................................ 20,172 527,498 Temple-Inland, Inc. ............................... 8,864 547,529 Weyerhaeuser Co. .................................. 8,559 506,693 -------------- TOTAL FOREST AND PAPER PRODUCTS 2,691,598 -------------- HEALTH AND MEDICAL FACILITIES 0.2% Quest Diagnostics, Inc.* .......................... 6,667 562,361 -------------- TOTAL HEALTH AND MEDICAL FACILITIES 562,361 -------------- HEALTH CARE PRODUCTS AND SERVICES 5.8% Abbott Laboratories ............................... 13,656 $601,137 Allergan, Inc. .................................... 6,425 565,721 Anthem, Inc.* ..................................... 6,135 543,438 Applera Corp. - Applied Biosystems Group ................................ 26,969 500,814 Bausch & Lomb, Inc. ............................... 9,454 593,995 Baxter International, Inc. ............................................ 18,212 576,410 Becton, Dickinson & Co. ............................................. 11,482 580,415 Biomet, Inc. ...................................... 14,366 567,457 Boston Scientific Corp.* .......................... 13,734 565,703 C. R. Bard, Inc. .................................. 5,814 617,854 Cardinal Health, Inc. ............................. 8,421 616,838 Genzyme Corp.* .................................... 11,682 508,167 Guidant Corp. ..................................... 8,786 553,606 HCA, Inc. ......................................... 13,356 542,654 Health Management Associates, Inc. Class A ......................................... 24,414 564,696 Humana, Inc.* ..................................... 26,110 425,332 IMS Health, Inc. .................................. 24,458 617,565 Johnson & Johnson ................................. 10,971 592,763 Manor Care, Inc. .................................. 15,126 490,687 McKesson Corp. .................................... 19,780 649,971 Medtronic, Inc. ................................... 11,584 584,529 St. Jude Medical, Inc.* ........................... 7,449 568,061 Stryker Corp. ..................................... 6,145 607,925 Tenet Healthcare Corp.* .......................................... 51,316 603,476 UnitedHealth Group, Inc. .......................... 8,651 531,863 WellPoint Health Networks, Inc.* ................................. 4,911 548,510 Wyeth ............................................. 14,760 561,913 Zimmer Holdings, Inc.* ............................ 7,335 585,700 -------------- TOTAL HEALTH CARE PRODUCTS AND SERVICES 15,867,200 -------------- HOMEBUILDERS 0.5% Centex Corp. ...................................... 10,105 484,535 KB HOME ........................................... 7,105 489,748 Pulte Homes, Inc. ................................. 10,026 492,978 -------------- TOTAL HOMEBUILDERS 1,467,261 --------------
See Notes to Financial Statements. 8 RYDEX S&P EQUAL WEIGHT ETF SCHEDULE OF INVESTMENTS (CONTINUED) April 30, 2004 (Unaudited) - --------------------------------------------------------------------------------
MARKET SHARES VALUE - -------------------------------------------------------------------------------- COMMON STOCKS (CONTINUED) HOTELS AND GAMING 0.9% Harrah's Entertainment, Inc. ............................................ 10,384 $552,221 Hilton Hotels Corp. ............................... 35,288 617,187 Marriott International, Inc., Class A ................................... 13,257 625,201 Starwood Hotels & Resorts Worldwide, Inc. ......................... 14,389 572,538 -------------- TOTAL HOTELS AND GAMING 2,367,147 -------------- HOUSEHOLD AND PERSONAL CARE PRODUCTS 2.3% Alberto-Culver Co., Class B ......................................... 12,107 570,966 Avon Products, Inc. ............................... 7,589 637,475 Colgate-Palmolive Co. ............................. 10,029 580,479 International Flavors & Fragrances, Inc. ................................ 14,901 540,161 Kimberly-Clark Corp. .............................. 8,939 585,058 Leggett & Platt, Inc. ............................. 23,988 542,129 Maytag Corp. ...................................... 18,500 516,150 The Clorox Co. .................................... 11,316 585,942 The Gillette Co. .................................. 14,276 584,174 The Procter & Gamble Co. ............................................. 5,278 558,149 Whirlpool Corp. ................................... 8,062 528,142 -------------- TOTAL HOUSEHOLD AND PERSONAL CARE PRODUCTS 6,228,825 -------------- HUMAN RESOURCES 0.3% Robert Half International, Inc.* ........................................... 25,153 685,922 -------------- TOTAL HUMAN RESOURCES 685,922 -------------- INSURANCE 4.4% ACE Ltd. .......................................... 12,932 566,939 Aetna, Inc. ....................................... 6,280 519,670 AFLAC, Inc. ....................................... 13,772 581,592 American International Group, Inc. ..................................... 7,616 545,686 Aon Corp. ......................................... 20,450 532,927 CIGNA Corp. ....................................... 9,604 619,555 Cincinnati Financial Corp. ........................................... 13,321 $546,028 Jefferson-Pilot Corp. ............................. 10,155 503,586 Lincoln National Corp. ............................ 11,869 532,681 Loews Corp. ....................................... 9,167 531,778 MetLife, Inc. ..................................... 15,662 540,339 Principal Financial Group, Inc. ..................................... 15,702 554,281 Prudential Financial, Inc. ........................ 12,002 527,368 SAFECO Corp. ...................................... 12,565 550,221 The Allstate Corp. ................................ 12,267 563,055 The Chubb Corp. ................................... 8,025 553,725 The Hartford Financial Services Group, Inc. ............................ 8,588 524,555 The Progressive Corp. ............................. 6,250 547,000 The St. Paul Cos., Inc. ........................... 13,744 558,968 Torchmark Corp. ................................... 10,395 540,956 UnumProvident Corp. ............................... 38,586 600,012 XL Capital Ltd., Class A .......................... 7,281 555,904 -------------- TOTAL INSURANCE 12,096,826 -------------- MACHINERY AND ENGINEERING 1.2% Caterpillar, Inc. ................................. 7,196 559,345 Cummins, Inc. ..................................... 9,875 590,623 Deere & Co. ....................................... 8,296 564,460 Eaton Corp. ....................................... 9,761 579,608 Fluor Corp. ....................................... 14,419 550,229 Ingersoll-Rand Co., Class A ......................................... 8,370 540,284 -------------- TOTAL MACHINERY AND ENGINEERING 3,384,549 -------------- MANUFACTURING 3.1% 3M Co. ............................................ 6,884 595,328 American Standard Cos., Inc.* ........................................... 4,937 519,323 Cintas Corp. ...................................... 13,237 595,136 Crane Co. ......................................... 17,175 529,162 Danaher Corp. ..................................... 5,997 554,842 Dover Corp. ....................................... 14,262 570,908 Honeywell International, Inc. ............................................ 16,823 581,739 Illinois Tool Works, Inc. ......................... 7,119 613,728 ITT Industries, Inc. .............................. 7,439 589,838
See Notes to Financial Statements. 9 RYDEX S&P EQUAL WEIGHT ETF SCHEDULE OF INVESTMENTS (CONTINUED) April 30, 2004 (Unaudited) - --------------------------------------------------------------------------------
MARKET SHARES VALUE - -------------------------------------------------------------------------------- COMMON STOCKS (CONTINUED) Newell Rubbermaid, Inc. ............................................ 24,136 $570,575 Pall Corp. ........................................ 24,019 571,172 Parker-Hannifin Corp. ............................. 9,675 534,931 Tyco International Ltd. ........................... 19,645 539,255 Waters Corp.* ..................................... 14,130 609,710 Worthington Industries, Inc. ............................................ 29,890 539,515 -------------- TOTAL MANUFACTURING 8,515,162 -------------- MINING 0.2% Newmont Mining Corp. .............................. 12,372 462,713 -------------- TOTAL MINING 462,713 -------------- NETWORKING PRODUCTS 0.6% CIENA Corp.* ...................................... 108,515 448,167 Novell, Inc.* ..................................... 55,407 534,123 Oracle Corp.* ..................................... 47,705 535,251 -------------- TOTAL NETWORKING PRODUCTS 1,517,541 -------------- OIL AND GAS 6.1% Amerada Hess Corp. ................................ 8,344 593,509 Anadarko Petroleum Corp. ........................................... 10,437 559,214 Apache Corp. ...................................... 13,039 545,943 Baker Hughes, Inc. ................................ 15,089 553,465 BJ Services Co.* .................................. 12,420 552,690 Burlington Resources, Inc. ........................ 9,031 607,514 ChevronTexaco Corp. ............................... 6,225 569,588 ConocoPhillips .................................... 7,924 564,981 Devon Energy Corp. ................................ 9,603 587,704 Dynegy, Inc., Class A* ............................ 151,262 598,998 El Paso Corp. ..................................... 78,665 551,442 Engelhard Corp. ................................... 18,992 551,528 EOG Resources, Inc. ............................... 12,275 604,544 Exxon Mobil Corp. ................................. 13,231 562,979 Halliburton Co. ................................... 18,626 555,055 Kerr-McGee Corp. .................................. 10,982 537,349 Marathon Oil Corp. ................................ 16,163 542,430 Nabors Industries, Ltd.* .......................... 12,121 537,688 NICOR, Inc. ....................................... 15,113 513,691 Noble Corp.* ...................................... 14,028 521,280 Occidental Petroleum Corp. ........................................... 11,860 $559,792 Peoples Energy Corp. .............................. 12,303 514,265 Rowan Cos., Inc.* ................................. 23,780 530,294 Schlumberger Ltd. ................................. 8,625 504,821 Sempra Energy ..................................... 17,349 550,831 Sunoco, Inc. ...................................... 9,009 566,666 The Williams Cos., Inc. ............................................ 56,899 586,060 Transocean, Inc. .................................. 18,856 523,631 Unocal Corp. ...................................... 14,745 531,410 Valero Energy Corp. ............................... 9,047 576,837 -------------- TOTAL OIL AND GAS 16,656,199 -------------- PHARMACEUTICALS 3.0% AmerisourceBergen Corp. ........................................... 10,206 590,825 Bristol-Myers Squibb Co. .......................... 21,789 546,904 Caremark Rx, Inc.* ................................ 16,993 575,213 Eli Lilly & Co. ................................... 8,001 590,554 Express Scripts, Inc., Class A* ........................................ 7,426 574,327 Forest Laboratories, Inc.* ........................................... 7,728 498,301 Hospira, Inc.* .................................... 15,867 451,575 King Pharmaceuticals, Inc.* ........................................... 34,190 589,778 Medco Health Solutions, Inc,* ........................................... 16,921 599,003 MedImmune, Inc.* .................................. 22,458 544,382 Merck & Co., Inc. ................................. 12,545 589,615 Mylan Laboratories, Inc. ............................................ 24,461 560,402 Pfizer, Inc. ...................................... 16,173 578,346 Schering-Plough Corp. ........................................... 33,158 554,733 Watson Pharmaceuticals, Inc.* ........................................... 12,339 439,392 -------------- TOTAL PHARMACEUTICALS 8,283,350 -------------- PUBLISHING 1.0% Dow Jones & Co., Inc. ............................. 11,720 540,175 Knight-Ridder, Inc. ............................... 7,439 576,076
See Notes to Financial Statements. 10 RYDEX S&P EQUAL WEIGHT ETF SCHEDULE OF INVESTMENTS (CONTINUED) April 30, 2004 (Unaudited) - --------------------------------------------------------------------------------
MARKET SHARES VALUE - -------------------------------------------------------------------------------- COMMON STOCKS (CONTINUED) R. R. Donnelley & Sons Co. ............................................. 18,817 $553,596 The New York Times Co., Class A ......................................... 12,169 557,462 Tribune Co. ....................................... 10,927 523,185 -------------- TOTAL PUBLISHING 2,750,494 -------------- REAL ESTATE INVESTMENT TRUSTS 1.1% Apartment Investment & Management Co., Class A ......................................... 17,588 495,454 Equity Office Properties Trust ........................................... 18,664 469,773 Equity Residential ................................ 18,188 499,442 Plum Creek Timber Co., Inc. ............................................ 17,047 503,910 ProLogis .......................................... 15,411 453,392 Simon Property Group, Inc. ............................................ 9,645 464,985 -------------- TOTAL REAL ESTATE INVESTMENT TRUSTS 2,886,956 -------------- RESORTS AND ENTERTAINMENT 0.2% The Walt Disney Co. ............................... 21,626 498,047 -------------- TOTAL RESORTS AND ENTERTAINMENT 498,047 -------------- RETAIL - APPAREL AND SHOES 1.6% Jones Apparel Group, Inc. ............................................ 15,210 556,686 Limited Brands .................................... 28,275 583,596 Liz Claiborne, Inc. ............................... 15,320 537,732 NIKE, Inc., Class B ............................... 7,143 513,939 Nordstrom, Inc. ................................... 14,708 524,046 Reebok International Ltd. ............................................ 13,734 499,643 The GAP, Inc. ..................................... 26,616 585,818 V.F. Corp. ........................................ 12,646 583,739 -------------- TOTAL RETAIL - APPAREL AND SHOES 4,385,199 -------------- RETAIL - DEPARTMENT STORES 1.1% Dillard's, Inc., Class A .......................... 31,358 527,755 Federated Department Stores, Inc. .................................... 11,037 $540,813 J. C. Penney Co., Inc. (Holding Co.) ................................... 16,351 553,645 Kohl's Corp.* ..................................... 11,289 471,767 Sears, Roebuck & Co. .............................. 12,652 506,713 The May Department Stores Co. ...................................... 16,832 518,426 -------------- TOTAL RETAIL - DEPARTMENT STORES 3,119,119 -------------- RETAIL - DISCOUNT STORES 1.4% Big Lots, Inc.* ................................... 40,021 566,698 Costco Wholesale Corp.* ........................... 14,748 553,492 Dollar General Corp. .............................. 28,945 543,008 Family Dollar Stores, Inc. ........................ 16,513 530,728 Target Corp. ...................................... 12,275 532,367 The TJX Cos., Inc. ................................ 22,916 563,046 Wal-Mart Stores, Inc. ............................. 9,370 534,090 -------------- TOTAL RETAIL - DISCOUNT STORES 3,823,429 -------------- RETAIL - FOOD STORES 0.9% Albertson's, Inc. ................................. 24,199 565,289 Safeway, Inc.* .................................... 26,474 607,577 The Kroger Co.* ................................... 32,644 571,270 Winn-Dixie Stores, Inc. ........................... 78,217 596,014 -------------- TOTAL RETAIL - FOOD STORES 2,340,150 -------------- RETAIL - RESTAURANTS 0.8% Darden Restaurants, Inc. .......................... 22,596 512,025 Starbucks Corp.* .................................. 14,925 580,881 Wendy's International, Inc. ............................................ 13,441 524,199 Yum! Brands, Inc.* ................................ 14,800 574,092 -------------- TOTAL RETAIL - RESTAURANTS 2,191,197 -------------- RETAIL - SPECIALTY STORES 2.3% Bed Bath & Beyond, Inc.* .......................... 14,317 531,447 Best Buy Co., Inc. ................................ 11,626 630,710 Circuit City Stores-Circuit City Group ...................................... 49,467 577,775 CVS Corp. ......................................... 15,888 613,753 Lowe's Cos., Inc. ................................. 10,108 526,222 Office Depot, Inc.* ............................... 31,358 549,079
See Notes to Financial Statements. 11 RYDEX S&P EQUAL WEIGHT ETF SCHEDULE OF INVESTMENTS (CONTINUED) April 30, 2004 (Unaudited) - --------------------------------------------------------------------------------
MARKET SHARES VALUE - -------------------------------------------------------------------------------- COMMON STOCKS (CONTINUED) RadioShack Corp. .................................. 17,089 $525,658 Staples, Inc.* .................................... 22,070 570,289 Tiffany & Co. ..................................... 14,355 559,845 Toys "R" Us, Inc.* ................................ 34,360 530,862 Walgreen Co. ...................................... 16,386 564,989 -------------- TOTAL RETAIL - SPECIALTY STORES 6,180,629 -------------- RETAIL AND WHOLESALE DISTRIBUTION 0.6% Genuine Parts Co. ................................. 16,558 592,776 SYSCO Corp. ....................................... 14,026 536,495 W.W. Grainger, Inc. ............................... 11,795 618,058 -------------- TOTAL RETAIL AND WHOLESALE DISTRIBUTION 1,747,329 -------------- TELECOMMUNICATIONS 4.5% ADC Telecommunications, Inc.* ........................................... 207,201 518,003 ALLTEL Corp. ...................................... 10,877 547,548 Andrew Corp.* ..................................... 32,242 546,502 AT&T Corp. ........................................ 27,943 479,222 AT&T Wireless Services, Inc.* ........................................... 40,493 559,208 Avaya, Inc.* ...................................... 35,887 490,934 BellSouth Corp. ................................... 20,172 520,639 Broadcom Corp., Class A* ........................................ 14,446 545,481 CenturyTel, Inc. .................................. 19,354 558,944 Citizens Communications Co.* ............................................ 43,167 562,898 Comverse Technology, Inc.* ........................................... 31,376 513,311 Corning, Inc.* .................................... 51,947 572,975 JDS Uniphase Corp.* ............................... 137,271 417,304 Lucent Technologies, Inc.* ........................................... 137,961 464,929 Motorola, Inc. .................................... 32,413 591,537 Nextel Communications, Inc.* ........................................... 22,176 529,119 QUALCOMM, Inc. .................................... 8,530 532,784 Qwest Communications International, Inc.* ............................ 128,892 518,146 SBC Communications, Inc. ............................................ 22,303 555,345 Scientific-Atlanta, Inc. .......................... 17,582 $569,481 Sprint Corp. (FON Group) ..................................... 31,092 556,236 Tellabs, Inc.* .................................... 64,295 561,295 Verizon Communications, Inc. ............................................ 14,654 553,042 -------------- TOTAL TELECOMMUNICATIONS 12,264,883 -------------- TIRE AND RUBBER 0.5% Cooper Tire & Rubber Co. .......................... 29,098 622,406 The Goodyear Tire & Rubber Co.* ..................................... 72,153 628,453 -------------- TOTAL TIRE AND RUBBER 1,250,859 -------------- TOOLS AND INSTRUMENTS 1.3% Millipore Corp.* .................................. 10,742 563,203 PerkinElmer, Inc. ................................. 28,376 546,238 Snap-on, Inc. ..................................... 17,316 584,934 The Black & Decker Corp. ........................................... 10,090 583,707 The Stanley Works ................................. 13,848 588,679 Thermo Electron Corp.* ............................ 20,091 586,657 -------------- TOTAL TOOLS AND INSTRUMENTS 3,453,418 -------------- TRANSPORTATION 1.5% Burlington Northern Santa Fe Corp. .................................. 17,903 585,428 CSX Corp. ......................................... 18,303 563,000 FedEx Corp. ....................................... 7,704 553,995 Norfolk Southern Corp. ........................................... 26,386 628,514 Ryder System, Inc. ................................ 15,023 552,696 Union Pacific Corp. ............................... 8,978 529,074 United Parcel Service, Inc., Class B ................................... 7,967 558,885 -------------- TOTAL TRANSPORTATION 3,971,592 -------------- TRAVEL SERVICES 0.4% Carnival Corp. .................................... 12,916 551,126 Sabre Holdings Corp. .............................. 25,539 602,465 -------------- TOTAL TRAVEL SERVICES 1,153,591 --------------
See Notes to Financial Statements. 12 RYDEX S&P EQUAL WEIGHT ETF SCHEDULE OF INVESTMENTS (CONTINUED) April 30, 2004 (Unaudited) - --------------------------------------------------------------------------------
MARKET SHARES VALUE - -------------------------------------------------------------------------------- COMMON STOCKS (CONTINUED) UTILITIES - GAS AND ELECTRIC 5.8% Allegheny Energy, Inc. ............................ 44,641 $615,153 Ameren Corp. ...................................... 11,760 514,147 American Electric Power Co., Inc. ....................................... 16,390 498,912 Calpine Corp.* .................................... 106,826 463,625 CenterPoint Energy, Inc. .......................... 50,514 545,046 Cinergy Corp. ..................................... 13,524 513,101 CMS Energy Corp.* ................................. 61,903 514,414 Consolidated Edison, Inc. ............................................ 12,445 512,858 Constellation Energy Group, Inc. ..................................... 13,608 523,636 Dominion Resources, Inc. ............................................ 8,597 548,575 DTE Energy Co. .................................... 13,428 523,961 Duke Energy Corp. ................................. 24,924 524,899 Edison International* ............................. 23,236 543,722 Entergy Corp. ..................................... 9,449 515,915 Exelon Corp. ...................................... 8,195 548,573 FirstEnergy Corp. ................................. 14,206 555,455 FPL Group, Inc. ................................... 8,150 518,503 KeySpan Corp. ..................................... 14,476 523,307 Kinder Morgan, Inc. ............................... 8,540 514,193 NiSource, Inc. .................................... 25,444 512,951 PG&E Corp.* ....................................... 19,132 526,513 Pinnacle West Capital Corp. ........................................... 14,147 552,582 PPL Corp. ......................................... 11,984 513,514 Progress Energy, Inc. ............................. 11,596 495,961 Public Service Enterprise Group, Inc. ..................................... 11,788 505,705 TECO Energy, Inc. ................................. 37,251 474,205 The AES Corp.* .................................... 63,847 553,553 The Southern Co. .................................. 18,206 523,605 TXU Corp. ......................................... 18,431 629,235 Xcel Energy, Inc. ................................. 30,103 503,623 -------------- TOTAL UTILITIES - GAS AND ELECTRIC 15,809,442 -------------- WASTE MANAGEMENT 0.4% Allied Waste Industries, Inc.* ........................................... 43,997 $553,922 Waste Management, Inc. ............................................ 18,620 528,808 -------------- TOTAL WASTE MANAGEMENT 1,082,730 -------------- TOTAL INVESTMENTS (Cost $255,116,087)--99.9% 272,781,973 Other assets less liabilities--0.1% ............................... 272,418 -------------- NET ASSETS 100.0% .................................... $273,054,391 ==============
* NON-INCOME PRODUCING SECURITY See Notes to Financial Statements. 13 STATEMENT OF ASSETS AND LIABILITIES April 30, 2004 (Unaudited) - -------------------------------------------------------------------------------- ASSETS Investments at Market Value, (Cost $255,116,087) ...................... $272,781,973 Cash .................................................................. 74,016 Receivables: Investments Sold .................................................... 7,456,549 Capital Stock Sold .................................................. 6,952,910 Dividends ........................................................... 264,308 ------------ TOTAL ASSETS ....................................................... 287,529,756 ------------ LIABILITIES Payables: Investments Purchased ............................................... 7,413,315 Capital Stock Repurchased ........................................... 6,952,910 Accrued Management Fees ............................................. 109,140 ------------ TOTAL LIABILITIES .................................................. 14,475,365 ------------ NET ASSETS ............................................................ $273,054,391 ============ NET ASSETS CONSIST OF Paid-in Capital ....................................................... $241,052,464 Undistributed Net Investment Income ................................... 218,994 Accumulated Net Realized Gain on Investments .......................... 14,117,047 Net Unrealized Appreciation on Investments ............................ 17,665,886 ------------ NET ASSETS ............................................................ $273,054,391 ============ Shares Outstanding (Unlimited Shares Authorized) ...................... 2,001,000 ============ Net Asset Value, Offering Price and Repurchase Price Per Share......... $ 136.46 ============
See Notes to Financial Statements. 14 STATEMENT OF OPERATIONS - --------------------------------------------------------------------------------
SIX MONTHS ENDED APRIL 30, 2004 (UNAUDITED) -------------- INVESTMENT INCOME Dividends ............................................................. $ 1,824,715 Interest .............................................................. 75 -------------- Total Income ......................................................... 1,824,790 -------------- EXPENSES Management Fee ........................................................ 484,822 -------------- Net Investment Income ................................................... 1,339,968 -------------- REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS Net Realized Gain From: Investments ........................................................... 862,520 In-kind Redemptions ................................................... 13,601,773 -------------- Net Realized Gain .................................................... 14,464,293 Net Change in Unrealized Appreciation/Depreciation on Investments ....... (534,112) -------------- Net Realized and Unrealized Gain on Investments ......................... 13,930,181 -------------- NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS .................... $15,270,149 ==============
See Notes to Financial Statements. 15 STATEMENT OF CHANGES IN NET ASSETS - --------------------------------------------------------------------------------
SIX MONTHS FOR THE PERIOD ENDED APRIL 24, 2003* APRIL 30, 2004 THROUGH (UNAUDITED) OCTOBER 31, 2003 -------------- ---------------- OPERATIONS Net Investment Income .................................................... $ 1,339,968 $ 846,403 Net Realized Gain ........................................................ 14,464,293 10,854,018 Net Change in Unrealized Appreciation/ Depreciation on Investments ............................................. (534,112) 18,199,998 -------------- ---------------- Net Increase in Net Assets Resulting From Operations ..................... 15,270,149 29,900,419 -------------- ---------------- DISTRIBUTIONS TO SHAREHOLDERS FROM Net Investment Income .................................................... (1,274,238) (679,052) -------------- ---------------- SHAREHOLDER TRANSACTIONS Proceeds From Shares Sold ................................................ 158,155,835 202,657,673 Value of Shares Repurchased .............................................. (76,232,653) (54,743,742) -------------- ---------------- Net Increase in Net Assets Resulting From Share Transactions ............. ........................................ 81,923,182 147,913,931 -------------- ---------------- Increase in Net Assets .................................................. 95,919,093 177,135,298 NET ASSETS--BEGINNING OF PERIOD ............................................ 177,135,298 -- -------------- ---------------- NET ASSETS--END OF PERIOD .................................................. $273,054,391 $177,135,298 ============== ================ CHANGES IN SHARES OUTSTANDING: Shares Sold .............................................................. 1,150,000 1,851,000 Shares Repurchased ....................................................... (550,000) (450,000) Shares Outstanding, Beginning of Period .................................. 1,401,000 -- -------------- ---------------- Shares Outstanding, End of Period ........................................ 2,001,000 1,401,000 ============== ================
* COMMENCEMENT OF INVESTMENT OPERATIONS. See Notes to Financial Statements. 16 FINANCIAL HIGHLIGHTS - --------------------------------------------------------------------------------
SIX MONTHS FOR THE PERIOD ENDED APRIL 24, 2003* APRIL 30, 2004 THROUGH (UNAUDITED) OCTOBER 31, 2003 -------------- ---------------- PER SHARE OPERATING PERFORMANCE: NET ASSET VALUE AT BEGINNING OF PERIOD ........................ $126.43 $101.03 -------------- ---------------- Net Investment Income** ....................................... 0.76 0.70 Net Realized and Unrealized Gain on Investments ............... 9.98 25.32 -------------- ---------------- Total From Investment Operations .............................. 10.74 26.02 -------------- ---------------- Distributions to Shareholders from: Net Investment Income ......................................... (0.71) (0.62) -------------- ---------------- NET ASSET VALUE AT END OF PERIOD .............................. $136.46 $126.43 ============== ================ TOTAL RETURN .................................................. 8.50%*** 25.77%*** RATIOS/SUPPLEMENTAL DATA: Net Assets at End of Period (000's omitted) ................... $273,054 $177,135 RATIO TO AVERAGE NET ASSETS OF: Expenses ...................................................... 0.40%**** 0.40%**** Net Investment Income ......................................... 1.11%**** 1.13%**** Portfolio Turnover Rate+ ...................................... 41% 42%
* COMMENCEMENT OF INVESTMENT OPERATIONS. ** 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. 17 NOTES TO FINANCIAL STATEMENTS (Unaudited) - -------------------------------------------------------------------------------- 1. ORGANIZATION Rydex ETF Trust (the "Trust") is an open-end, non-diversified, 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 and commenced operations on April 24, 2003. The Trust currently consists of one series, Rydex S&P Equal Weight ETF (the "Fund"). The Fund's investment objective is to provide investment results that correspond generally to the price and yield performance, before fees and expenses, of the S&P Equal Weight Index (the "Underlying Index"), an index representing publicly traded equity securities. The Fund seeks to achieve its objective by investing in common stocks that comprise the Underlying Index. The Fund uses 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 in the Underlying Index. The Fund operates as an index fund and is not actively managed. Adverse performance of a security in the Fund's portfolio will ordinarily not result in the elimination of the security from the Fund's portfolio. The Fund issues and redeems 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 disclosures at the date of the financial statements and accompanying notes. Management believes that the estimates utilized in preparing the Fund's financial statements are reasonable and prudent; however, actual results could differ from these estimates. Under the Fund's organizational documents, its officers and trustees are indemnified against certain liabilities that may arise out of the performance of their duties to the Fund. Additionally, in the normal course of business, the Fund enters into contracts with service providers that contain general indemnification clauses. The Fund's maximum exposure under these arrangements is unknown, as this would involve future claims that may be made against the Fund that have not yet occurred. However, based on experience, the Fund expects the risk of loss to be remote. 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, at the average of readily available closing bid and asked prices on such 18 NOTES TO FINANCIAL STATEMENTS (Unaudited) (CONTINUED) - -------------------------------------------------------------------------------- exchange. 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. 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 Board of Trustees. In determining fair value, consideration is given to cost, operating and other financial data. B. SECURITY TRANSACTIONS AND INVESTMENT INCOME 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. Interest income is recorded on the accrual basis. C. FUTURES AND PURCHASED OPTIONS The Fund may buy and sell stock index futures contracts with respect to any stock index traded on a recognized stock exchange or board of trade. A stock index futures contract is a contract to buy or sell units of an index at a specified future date at a price agreed upon when the contract is made. The stock index futures contract specifies that no delivery of the actual stocks making up the index will take place. Instead, settlement in cash must occur up on the termination of the contract, with the settlement being the difference between the contract price and the actual level of the stock index at the expiration of the contract. The Fund may enter into futures and option contracts for the purpose of either hedging its exposure to the market fluctuations of the portfolio or an individual security position. As of April 30, 2004, the Fund had not entered into any futures or options transactions. The risk associated with purchasing option is limited to the premium originally paid. Options written by a fund involve, to varying degrees, risk of loss in excess of the option value reflected in the Statement of Assets and Liabilities. The risk in writing a covered call option is that fund may forego the opportunity for profit if the market price of the underlying security increases and the option is exercised. The risk in writing a covered put option is that may incur a loss if the market price of the underlying security decreases and the option is exercised. In addition, there is the risk that a fund may not be able to enter into a closing transaction because of an illiquid secondary market or, for over-the-counter options, because of the counterparty's inability to perform. The Fund has established counterparty credit guidelines and enters into transactions only with financial institutions of investment grade or better. There are several risks in connection with the use of futures contracts. Futures contracts involve, in varying degrees, risk of loss in excess of amounts reflected in the financial statements. Risks may be caused by an imperfect correlation between movements in the price of the instruments and the price of the underlying securities. In addition, there is the 19 NOTES TO FINANCIAL STATEMENTS (Unaudited) (CONTINUED) - -------------------------------------------------------------------------------- risk that a fund may not be able to enter into a closing transaction because of an illiquid secondary market. D. REPURCHASE AGREEMENTS The Fund may enter into repurchase agreements with financial institutions. The Fund 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 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 Fund will seek to liquidate such collateral. However, the exercising of the Fund's right to liquidate such collateral could involve certain costs or 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 Fund could suffer a loss. It is the current policy of the Fund 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 Fund, amounts to more than 15% of the Fund's net assets. The investments of the Fund in repurchase agreements, at times, may be substantial when, in the view of the Advisor, liquidity or other considerations so warrant. For the period ending April 30, 2004, the Fund had not engaged in repurchase transactions. E. FEDERAL INCOME TAXES The Fund's policy is to comply with the requirements of the Internal Revenue Code applicable to regulated investment companies and 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. These differences are primarily due to differing treatments for in-kind redemptions and losses deferred due to wash sales. For the period ended April 30, 2004, the Fund realized net capital gains resulting from in-kind redemptions and other transactions. Because gains from in-kind redemptions are not taxable to the Fund, and are not distributed to existing Fund shareholders, the gains are reclassified from accumulated net realized gains to paid-in-capital at the end of the Fund's tax year. These reclassifications have no effect on net assets or net asset value per share. The in-kind gains for the period ended April 30, 2004 are disclosed in the Fund's Statement of Operations. 20 NOTES TO FINANCIAL STATEMENTS (Unaudited) (CONTINUED) - -------------------------------------------------------------------------------- F. DIVIDENDS AND DISTRIBUTIONS The Fund declares and pays dividends from net investment income and distributions from net realized capital gains at least annually. 3. ADVISORY, ADMINISTRATION AND OTHER TRANSACTIONS WITH AFFILIATES Rydex Investments acts as the Fund's investment adviser (the "Advisor"). 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 Trust to conform to changes in the composition of the relevant index. For these services, the Advisor receives an advisory fee at the annual rate of 0.40% of the average daily net assets of the Fund. The Bank of New York (the "Administrator") provides various administrative and accounting services for the maintenance and operations of the Fund. Under a Custodian Agreement with the Trust, the Administrator maintains in separate accounts cash, securities and other assets of the Trust and the 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 Fund. 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 Advisor pays all expenses of the Fund, including the cost of transfer agency, custody, fund administration, legal, audit and other services except interest, taxes, brokerage commissions, and other expenses connected with the execution of portfolio transactions, any future distribution fees or expenses and extraordinary expenses. The Fund has adopted a Distribution Plan (the "Plan") that allows the Fund 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 Fund 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 Fund. 4. CAPITAL At April 30, 2004, there were an unlimited number of no par value shares of beneficial interest authorized. There is a minimum transaction fee of $2,000 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 21 NOTES TO FINANCIAL STATEMENTS (Unaudited) (CONTINUED) - -------------------------------------------------------------------------------- outside the National Securities Clearing Corporation 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. 5. INVESTMENT TRANSACTIONS Purchases and sales of investment securities (excluding short-term investments, U.S government and government agency obligations) aggregated $181,741,348 and $99,932,137, respectively, for the six months ended April 30, 2004. There were no purchases or sales of U.S. government or government agency obligations for the six months ended April 30, 2004. At April 30, 2004, gross unrealized appreciation of investments was $23,511,619 and gross unrealized depreciation of investments was $5,845,733, resulting in net unrealized appreciation of $17,665,886 based on cost for U.S. Federal income tax purposes. 22 - -------------------------------------------------------------------------------- The Fund's Statement of Additional Information contains additional information about the Trustees and Officers and is available, without charge, upon request, by calling (800) 207-3390. INVESTMENT ADVISOR Rydex Investments ADMINISTRATOR The Bank of New York CUSTODIAN The Bank of New York TRANSFER AGENT The Bank of New York DISTRIBUTOR Rydex Distributors, Inc. INDEPENDENT AUDITORS PricewaterhouseCoopers LLP 23 - -------------------------------------------------------------------------------- PROXY VOTING INFORMATION A description of the policies and procedures that the Fund uses to determine how to vote proxies relating to securities held in the Funds' portfolios is available, without charge and upon request, by calling 800-820-0888. This information is also be available from the EDGAR database on the SEC's website at http://www.sec.gov. - -------------------------------------------------------------------------------- This page intentionally left blank. [RYDEX INVESTMENTS LOGO] ESSENTIAL FOR MODERN MARKETS(TM) 9601 BLACKWELL ROAD SUITE 500 ROCKVILLE, MD 20850 800.820.0888 www.rydexfunds.com ITEM 2. CODE OF ETHICS. Not applicable at this time. ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT. Not applicable at this time. ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES. Not applicable at this time. ITEMS 5. AUDIT COMMITTEE OF LISTED REGISTRANTS. Not applicable at this time. Item 6. SCHEDULE OF INVESTMENTS. The schedule is included as a 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. PURCHASES OF EQUITY SECURITIES BY CLOSED-END MANAGEMENT INVESTMENT COMPANY AND AFFILIATED PURCHASERS. Not applicable. ITEM 9. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS. Not applicable. ITEM 10. CONTROLS AND PROCEDURES. a) Based on their evaluation on June 28, 2004, the President (principal executive officer) and the Treasurer (principal financial officer) of the Rydex S&P Equal Weight ETF (the "Fund") believe that there were no significant deficiencies in the design or operation of the internal controls of the Fund or Rydex Investments ("RI"), the investment adviser, and The Bank of New York ("BNY"), administrator of the Fund, or Rydex Distributors, Inc. ("RD"), which acts as distributor for the Fund, including disclosure controls and procedures (as defined in Rule 30a-2(c) under the Investment Company Act of 1940) that adversely affected the ability of the Fund, or RI, or BNY, on behalf of the Fund, to record, process, summarize, and report the subject matter contained in this Report, and the President and Treasurer of the Fund have identified no material weaknesses in such internal controls on behalf of the Fund. There was no fraud, whether or not material, involving officers or employees of RI, or BNY, or RD, or the Fund who have a significant role in the Fund's internal controls, including disclosure controls and procedures (as defined in Rule 30a-2(c) under the Investment Company Act of 1940) that has come to the attention of the Adviser or the officers of the Fund, including its President and Treasurer. b) There were no significant changes in the Fund and the RI's internal controls, including disclosure controls and procedures (as defined in Rule 30a-2(c) under the Investment Company Act of 1940) that apply to the Fund or in other factors with respect to the Fund that could have significantly affected the Fund's or the RI's internal controls during the period covered by this Form N-CSR, and no corrective actions with regard to significant deficiencies or material weaknesses were taken by the Fund or the RI during such period. ITEM 11. EXHIBITS. (a)(2) Certification of chief executive officer and chief financial officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 are attached as Exhibit 99.CERT. (b) Certification of chief executive officer and chief financial officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 is attached as Exhibit 99.906CERT. 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: /s/ Carl Verboncoeur ------------------------------------- Name: Carl Verboncoeur Title: President Date: June 28, 2004 Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed by the following persons on behalf of the registrant and in the capacities and on the dates indicated. By: /s/ Carl Verboncoeur ------------------------------------- Name: Carl Verboncoeur Title: President Date: June 28, 2004 By: /s/ Nick Bonos ------------------------------------- Name: Nick Bonos Title: Treasurer Date: June 28, 2004 EX-99.CERT 2 a2139371zex-99_cert.txt EX 99.CERT EXHIBIT 99.CERT Rule 30a-2(a) CERTIFICATIONS I, Carl Verboncoeur, certify that: 1. I have reviewed this report on Form N-CSR of Rydex ETF Trust; 2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; 3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations, changes in net assets, and cash flows (if the financial statements are required to include a statement of cash flows) of the registrant as of, and for, the periods presented in this report; 4. The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940) for the registrant and have: (a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; (b) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of a date within 90 days prior to the filing date of this report based on such evaluation; and (c) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal half-year (the registrant's second fiscal half-year in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and 5. The registrant's other certifying officer(s) and I have disclosed to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions): (a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize, and report financial information; and (b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. Date: June 28, 2004 ------------------- /s/ Carl Verboncoeur ------------------------- Carl Verboncoeur, President Rule 30a-2(a) CERTIFICATIONS I, Nick Bonos, certify that: 1. I have reviewed this report on Form N-CSR of Rydex ETF Trust; 2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; 3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations, changes in net assets, and cash flows (if the financial statements are required to include a statement of cash flows) of the registrant as of, and for, the periods presented in this report; 4. The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940) for the registrant and have: (a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; (b) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of a date within 90 days prior to the filing date of this report based on such evaluation; and (c) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal half-year (the registrant's second fiscal half-year in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and 5. The registrant's other certifying officer(s) and I have disclosed to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions): (a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize, and report financial information; and (b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. Date: June 28, 2004 ------------------- /s/ Nick Bonos ------------------------- Nick Bonos, Treasurer EX-99.906.CERT(I) 3 a2139371zex-99_906certi.txt EX 99.906.CERT(I) EXHIBIT (b) Rule 30a-2(b) CERTIFICATIONS Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (subsections (a) and (b) of section 1350, chapter 63 of title 18, United States Code), each of the undersigned officers of Rydex ETF Trust (the Registrant), do hereby certify, to such officer's knowledge, that: (1) The Rydex ETF Trust on Form N-CSR of the Registrant for the period ended December 31, 2003 (the "Form N-CSR") fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and (2) the information contained in the Form N-CSR fairly presents, in all material respects, the financial condition and results of operations of the Registrant. Dated: June 28, 2004 ------------------------ /s/ Carl Verboncoeur - ------------------------------ Name: Carl Verboncoeur Title: President Dated: June 28, 2004 ------------------------ /s/ Nick Bonos - ------------------------------ Name: Nick Bonos Title: Treasurer This certification is being furnished solely pursuant to 18 U.S.C. ss. 1350 and is not being filed as part of the Report or as a separate disclosure document. -----END PRIVACY-ENHANCED MESSAGE-----