-----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, LXsInX1t+VnQal5W93hGj+vjKW+Fn0VEbOwbUMFCR+W91JwfjS5lwrDNUVvH83zP JWQPN8CjfPraOmAQnveM3g== 0000950137-04-004567.txt : 20040601 0000950137-04-004567.hdr.sgml : 20040601 20040601171205 ACCESSION NUMBER: 0000950137-04-004567 CONFORMED SUBMISSION TYPE: N-CSRS PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 20040331 FILED AS OF DATE: 20040601 EFFECTIVENESS DATE: 20040601 FILER: COMPANY DATA: COMPANY CONFORMED NAME: SECURITY EQUITY FUND CENTRAL INDEX KEY: 0000088525 IRS NUMBER: 486104426 STATE OF INCORPORATION: KS FISCAL YEAR END: 0930 FILING VALUES: FORM TYPE: N-CSRS SEC ACT: 1940 Act SEC FILE NUMBER: 811-01136 FILM NUMBER: 04842084 BUSINESS ADDRESS: STREET 1: SECURITY MANAGEMENT COMPANY, LLC STREET 2: ONE SECURITY BENEFIT PLACE CITY: TOPEKA STATE: KS ZIP: 66636-0001 BUSINESS PHONE: 7854383127 MAIL ADDRESS: STREET 1: SECURITY MANAGEMENT COMPANY, LLC STREET 2: ONE SECURITY BENEFIT PLACE CITY: TOPEKA STATE: KS ZIP: 66636-0001 N-CSRS 1 c85752anvcsrs.txt CERTIFIED SHAREHOLDER REPORT 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 811-01136 SECURITY EQUITY FUND (Exact name of registrant as specified in charter) ONE SECURITY BENEFIT PLACE, TOPEKA, KANSAS 66636-0001 (Address of principal executive offices) (Zip code) MICHAEL G. ODLUM, PRESIDENT SECURITY EQUITY FUND ONE SECURITY BENEFIT PLACE TOPEKA, KANSAS 66636-0001 (Name and address of agent for service) Registrant's telephone number, including area code: (785) 438-3000 Date of fiscal year end: September 30 Date of reporting period: March 31, 2004 Form N-CSR is to be used by management investment companies to file reports with the Commission not later than 10 days after the transmission to stockholders of any report that is required to be transmitted to stockholders under Rule 30e-1 under the Investment Company Act of 1940 (17 CFR 270.30e-1). The Commission may use the information provided on Form N-CSR in its regulatory, disclosure review, inspection, and policymaking roles. A registrant is required to disclose the information specified by Form N-CSR, and the Commission will make this information public. A registrant is not required to respond to the collection of information contained in Form N-CSR unless the Form displays a currently valid Office of Management and Budget ("OMB") control number. Please direct comments concerning the accuracy of the information collection burden estimate and any suggestions for reducing the burden to Secretary, Securities and Exchange Commission, 450 Fifth Street, NW, Washington, DC 20549-0609. The OMB has reviewed this collection of information under the clearance requirements of 44 U.S.C. Section 3507. ITEM 1. REPORTS TO STOCKHOLDERS. [IMAGE] SECURITY FUNDS(SM) SEMI-ANNUAL REPORT MARCH 31, 2004 - SECURITY EQUITY FUND - ALPHA OPPORTUNITY SERIES - ENHANCED INDEX SERIES - EQUITY SERIES - GLOBAL SERIES - LARGE CAP GROWTH SERIES - MID CAP VALUE SERIES - SELECT 25(R) SERIES - SMALL CAP GROWTH SERIES - SOCIAL AWARENESS SERIES - SECURITY LARGE CAP VALUE FUND - SECURITY MID CAP GROWTH FUND [SECURITY DISTRIBUTORS, INC. LOGO] A Member of The Security Benefit Group of Companies SECURITY EQUITY FUND MARCH 31, 2004 SEMI-ANNUAL REPORT TABLE OF CONTENTS Chairman's Letter.................................................... 2 Security Equity Fund Alpha Opportunity Series .................................... 5 Enhanced Index Series ....................................... 9 Equity Series ............................................... 17 Global Series ............................................... 21 Large Cap Growth Series ..................................... 27 Mid Cap Value Series ........................................ 31 Select 25(R) Series ......................................... 35 Small Cap Growth Series ..................................... 39 Social Awareness Series ..................................... 43 Security Large Cap Value Fund ....................................... 47 Security Mid Cap Growth Fund ........................................ 51 Statements of Assets and Liabilities ................................ 55 Statements of Operations ............................................ 58 Statements of Changes in Net Assets ................................. 61 Financial Highlights ................................................ 67 Notes to Financial Statements ....................................... 90 Director Disclosure ................................................. 101
1 CHAIRMAN'S LETTER May 15, 2004 [PHOTO OF JOHN CLELAND] John Cleland Chairman of the Board TO OUR CONTRACTHOLDERS: The markets over the past six months have provided a positive backdrop for the Security Funds, and the funds overall have performed well on a relative basis. While both stock funds and bond funds on average benefited from positive market trends over the six month period ended March 31, 2004, most of the returns for equity funds came in the fourth quarter of 2003, and for bond funds in the first quarter of 2004. The market returns are illustrated in the following table, which shows the performance of the major indexes in each quarter and for the six-month period as a whole.
RETURN % -------------------------- SIX MONTHS 4TH Q 1ST Q 9/30/03- INDEX 2003 2004 3/31/04 - --------------------- ----- ----- ---------- S&P 500 12.17 1.56 13.92 S&P MIDCAP 400 13.18 4.90 18.73 RUSSELL 2000 14.53 7.42 23.03 MSCI EAFE ($US) 17.08 4.34 22.16 LEHMAN AGGREGATE BOND .32 2.93 3.26
Interest rates generally declined, although were volatile over certain periods of time during each quarter. Interest rates on US Treasury Securities of varying maturities are summarized below.
% RATES -------------------------- US TREASURY MATURITY 9/30/03 12/31/03 3/31/04 - -------------------- ------- -------- ------- 3 MONTH .95 .95 .95 1 YEAR 1.15 1.26 1.20 10 YEAR 3.96 4.27 3.86 LONG TERM (25+ YEARS) 4.97 5.15 4.83
The major trends influencing the markets during this six-month period centered on an unusual confluence of a strengthening economy, corporate profit growth and a weak labor market. The latter factor was key to keeping up investor expectations that the Federal Reserve's accommodative monetary policy would remain in place for some time. While stock prices were up only modestly in the first quarter after a good run up in the previous quarter, the interest rate environment remained positive. As we look ahead to see how these and other factors may play out, some of the current developments suggest a strengthening in the labor markets, some evidence of increasing, though still modest, inflation, as well as continued positive corporate earnings scenario. The risks of a rising rate environment and negative global political events are concerns that weigh on investors' minds and can impact the markets, at least over the short run. While cognizant of these and other investment risks, investors need to remain focused on their investment plans over the long run. I am pleased to announce several recent changes in both the directors and officers of the Security Funds. First, Harry W. Craig, Jr. was elected to the Board as an independent director in February, 2004, and Michael G. Odlum was elected as an internal director to the Board in May 2004. Mike was also named President of the Security Funds and replaces James R. Schmank, who served ably in both positions over the past several years. Jim has taken on new responsibilities at Security Benefit, and we wish him the best in his new role. 2 CHAIRMAN'S LETTER (CONTINUED) May 15, 2004 Harry W. Craig Jr. is Chairman and Chief Executive Officer of Martin Tractor Company, Inc. and is very active as a leader in community, educational, religious and charitable activities in Kansas. He holds degrees in Arts and in Law from the University of Kansas, and brings to the Board a wealth of business and management experience, as well as independent perspective. Mike Odlum, CFA, joined Security Benefit Group in February as the new Senior Vice President and Chief Investment Officer. Mike is a graduate of Princeton University and the Wharton Graduate School of Finance at the University of Pennsylvania. During his career, he has worked for a variety of well-regarded companies including The Vanguard Group and Chase Investors Management Corporation. Most recently, he was President and Chief Operating Officer of Allied Investment Advisors, Inc., an investment management firm in Baltimore, MD. I would also like to note that one of Security Fund's portfolio managers, Terry A. Milberger, recently retired. Terry's role as manager of the Security Equity Fund-Equity Series has been assumed by Mark Mitchell, who manages our Large Cap Growth and Social Awareness Series. The Security Benefit Equity Team, directed by Cindy Shields, Head of Equity Asset Management, has assumed fund management responsibilities for the Select 25 Series Fund. In addition to Cindy, the team includes Mark Mitchell and Jim Schier who manages the Security Fund-Mid Cap Series. We wish Terry well in his retirement and welcome the experienced team of managers in their new roles. Overall, through the use of disciplined and professional management, the Security Funds are designed to provide shareholders over the long run the benefits of well-defined and diversified investment strategies. We appreciate your investment in the Funds and welcome any comments or questions you may have. Sincerely, /s/ John Cleland John Cleland Chairman, the Security Funds 3 This page left intentionally blank. 4 SECURITY EQUITY FUND ALPHA OPPORTUNITY SERIES ADVISED BY: [SECURITY FUNDS LOGO] AND [MAINSTREAM LOGO] MAINSTREAM INVESTMENT ADVISERS SUBADVISOR, MAINSTREAM INVESTMENT ADVISERS 5 SCHEDULE OF INVESTMENTS MARCH 31, 2004 (UNAUDITED) SECURITY EQUITY FUND - ALPHA OPPORTUNITY SERIES
NUMBER MARKET COMMON STOCKS OF SHARES VALUE - --------------------------------------------------- --------- --------- AGRICULTURAL PRODUCTS - 1.1% Archer-Daniels-Midland Company 2,000 $ 33,740 Delta & Pine Land Company ......................... 2,800 69,860 --------- 103,600 ALUMINUM - 1.9% Alcan, Inc......................................... 3,000 134,370 Alcoa, Inc......................................... 1,400 48,566 Imco Recycling, Inc.*.............................. 300 2,826 --------- 185,762 AUTO PARTS & EQUIPMENT - 0.1% Sauer-Danfoss, Inc................................. 900 12,303 COMMODITY CHEMICALS - 1.7% Georgia Gulf Corporation........................... 2,480 74,772 Kronos Worldwide, Inc.............................. 100 3,029 Millennium Chemicals, Inc.......................... 3,700 55,278 NL Industires, Inc................................. 200 2,780 Nova Chemicals Corporation......................... 800 20,072 Spartech Corporation............................... 200 4,980 Wellman, Inc....................................... 800 6,680 --------- 167,591 CONSTRUCTION, ENGINEERING - 0.8% Fluor Corporation.................................. 2,100 81,249 CONSTRUCTION, FARM MACHINERY & HEAVY TRUCKS - 4.7% CNH Global N.V..................................... 8,900 166,608 Cummins, Inc....................................... 1,100 64,295 Deere & Company ................................... 2,500 173,275 Lindsay Manufacturing Company 2,100 50,568 --------- 454,746 CONSTRUCTION MATERIALS - 0.1% Amcol International Corporation.................... 300 5,235 DIVERSIFIED CHEMICALS - 2.8% Cabot Corporation ................................. 700 22,960 Dow Chemical Company............................... 1,100 44,308 E.I. du Pont de Nemours & Company 1,900 80,218 Eastman Chemical Company........................... 1,200 51,216 Engelhard Corporation ............................. 2,500 74,725 --------- 273,427 DIVERSIFIED METALS & MINING - 9.0% Alumina, Ltd. ADR ................................. 3,300 54,351 Anglo American plc ADR ............................ 1,700 41,344 Arch Coal, Inc. ................................... 800 25,112 BHP Billiton, Ltd. ADR ............................ 3,500 65,730 Brush Engineered Materials, Inc.* ................. 500 10,135 Cameco Corporation ................................ 200 9,952 Consol Energy, Inc. ............................... 3,300 88,440 Fording Canadian Coal Trust ....................... 1,100 44,385 Freeport-McMoran Copper & Gold, Inc. (Cl.B) .................................... 5,900 230,631 Massey Energy Company ............................. 1,500 33,105 Noranda, Inc. ..................................... 3,200 57,472 Penn Virginia Resource Partners, L.P. ............. 800 28,240 Phelps Dodge Corporation* ......................... 300 24,498 RTI International Metals, Inc.* ................... 2,800 44,324 Rio Tinto plc ADR ................................. 600 60,348 Southern Peru Copper Corporation .................. 1,200 48,540 ------- 866,607 ELECTRICAL COMPONENTS & EQUIPMENT - 0.5% Regal-Beloit Corporation .......................... 800 15,984 Thomas & Betts Corporation* ....................... 1,400 30,548 ------- 46,532 ENVIRONMENTAL SERVICES - 1.2% Waste Management, Inc. ............................ 3,700 111,666 FERTILIZERS & AGRICULTURAL CHEMICALS - 1.4% IMC Global, Inc. .................................. 2,200 31,460 Potash Corporation of Saskatchewan, Inc. .......... 1,200 99,804 Sociedad Quimica y Minera de Chile S.A. ADR ................................. 200 8,190 ------- 139,454 FOREST PRODUCTS - 1.3% Louisiana-Pacific Corporation ..................... 1,200 30,960 Weyerhaeuser Company .............................. 1,500 98,250 ------- 129,210 GOLD - 0.5% Coeur d' Alene Mines Corporation* ................. 3,500 24,500 Placer Dome, Inc. ................................. 1,200 21,564 ------- 46,064 HOME FURNISHINGS - 1.4% Kimball International, Inc. (Cl.B) ................ 7,400 115,958 Mohawk Industries, Inc. ........................... 200 16,470 ------- 132,428 HOTELS, RESORTS & CRUISE LINES - 0.1% Prime Hospitality Corporation* .................... 800 9,104
6 See accompanying notes. SCHEDULE OF INVESTMENTS (CONTINUED) MARCH 31, 2004 (UNAUDITED) SECURITY EQUITY FUND - ALPHA OPPORTUNITY SERIES (CONTINUED)
NUMBER MARKET COMMON STOCKS (CONTINUED) OF SHARES VALUE - -------------------------------------------------- --------- -------- INDUSTRIAL MACHINERY - 4.9% Ampco-Pittsburgh Corporation ..................... 800 $ 10,328 Flowserve Corporation* ........................... 800 16,760 Gardner Denver, Inc. ............................. 1,100 29,788 Idex Corporation ................................. 1,500 65,220 Joy Global, Inc. ................................. 3,300 92,631 Kennametal, Inc. ................................. 3,300 136,191 Lincoln Electric Holdings, Inc. .................. 3,000 84,450 Metso Corporation ADR ............................ 1,100 14,597 Valmont Industries, Inc. ......................... 900 17,982 --------- 467,947 INTEGRATED OIL & GAS - 0.7% Marathon Oil Corporation ......................... 1,400 47,138 Norsk Hydro ASA ADR .............................. 300 21,141 --------- 68,279 MARINE - 2.0% Alexander & Baldwin, Inc. ........................ 4,356 144,097 Kirby Corporation* ............................... 1,500 50,685 --------- 194,782 METAL & GLASS CONTAINERS - 0.2% Crown Holdings, Inc.* ............................ 2,000 18,640 OIL & GAS DRILLING - 2.9% Ensco International, Inc. ........................ 3,200 90,144 Rowan Companies, Inc.* ........................... 7,570 159,651 Transocean, Inc.* ................................ 1,000 27,890 --------- 277,685 OIL & GAS EQUIPMENT & SERVICES - 1.8% Compagnie Generale de Geophysique S.A. ADR* .................................... 1,300 11,570 Hydril* .......................................... 2,353 61,649 Schlumberger, Ltd. ............................... 500 31,925 Technip S.A. ADR ................................. 200 6,920 Tetra Technologies, Inc.* ........................ 2,200 57,486 --------- 169,550 PACKAGED FOODS & MEATS - 0.9% Cal-Maine Foods, Inc. ............................ 700 24,920 Cresud S.A. ADR .................................. 1,000 12,400 Hormel Foods Corporation ......................... 800 23,464 Pilgrim's Pride Corporation ...................... 700 15,701 Tyson Foods, Inc. ................................ 300 5,415 --------- 81,900 PAPER PACKAGING - 1.0% Longview Fibre Company ........................... 4,200 46,872 Smurfit-Stone Container Corporation* ............. 900 15,831 Temple-Inland, Inc. .............................. 500 31,670 --------- 94,373 PAPER PRODUCTS - 5.3% Aracruz Celulose S.A. ADR ........................ 2,400 91,800 Bowater, Inc. .................................... 2,500 109,075 International Paper Company ...................... 4,500 190,170 Pope & Talbot, Inc. .............................. 3,400 58,446 Potlatch Corporation ............................. 1,500 61,125 --------- 510,616 PRECIOUS METALS & MINERALS - 0.1% Lionore Mining International, Ltd.* .............. 2,700 12,819 REAL ESTATE INVESTMENT TRUSTS - 0.7% Plum Creek Timber Company, Inc. .................. 800 25,984 Rayonier, Inc. ................................... 1,000 43,710 --------- 69,694 SEMICONDUCTOR EQUIPMENT - 0.1% Mykrolis Corporation* ............................ 1,000 14,260 SEMICONDUCTORS - 0.2% Transmeta Corporation* ........................... 5,100 20,196 SPECIALTY CHEMICALS - 2.6% Ferro Corporation ................................ 1,420 37,133 Minerals Technologies, Inc. ...................... 800 45,680 OM Group, Inc.* .................................. 1,800 54,720 Rohm & Haas Company .............................. 400 15,936 Valspar Corporation .............................. 1,900 93,537 --------- 247,006 STEEL - 3.0% AK Steel Holding Corporation* .................... 4,160 24,419 Gibraltar Steel Corporation ...................... 2,400 58,992 Grupo Imsa S.A. de C.V. ADR ...................... 500 8,730 International Steel Group, Inc.* ................. 700 27,090 NN, Inc. ......................................... 7,013 81,842 United States Steel Corporation .................. 1,670 62,241 Wheeling-Pittsburgh Corporation* ................. 1,200 26,364 --------- 289,678 TRUCKING - 0.9% Quality Distribution, Inc.* ...................... 6,400 90,240 --------- Total common stocks (cost $5,394,902) - 55.9% ................. 5,392,643
7 See accompanying notes. SCHEDULE OF INVESTMENTS (CONTINUED) MARCH 31, 2004 (UNAUDITED) SECURITY EQUITY FUND - ALPHA OPPORTUNITY SERIES (CONTINUED)
PRINCIPAL AMOUNT OR NUMBER MARKET U.S. GOVERNMENT AGENCIES OF SHARES VALUE - ---------------------------------------------------- --------- ---------- Federal Farm Credit Bank: 1.081%, 04-01-04................................ $ 250,000 $ 250,000 1.00%, 04-08-04................................. $ 300,000 299,943 Federal Home Loan Bank, 1.00%, 05-26-04 ....................................... $ 300,000 299,546 Federal Home Loan Mortgage Corporation, 0.99%, 05-04-04.................... $ 100,000 99,909 Federal National Mortgage Association: 1.019%, 04-13-04................................ $ 250,000 249,918 1.01%, 04-21-04................................. $ 200,000 199,891 1.04%, 04-28-04(2).............................. $ 250,000 249,816 0.98%, 05-10-04................................. $ 150,000 149,841 1.014%, 05-19-04................................ $ 450,000 449,403 1.05%, 06-02-04................................. $ 600,000 598,967 ---------- Total U.S. government agencies (cost $2,847,227) - 29.5%................... 2,847,234 ASSET BACKED SECURITIES AUTO - 4.2% Ford Credit Auto Owner Trust, 1.21% - 2006(1)................................. $ 400,000 400,557 CREDIT CARDS - 4.1% First USA Credit Card Master Trust, 1.23% - 2007(1)................................. $ 400,000 400,216 ---------- Total asset backed securities (cost $801,049) - 8.3%................... 800,773 REPURCHASE AGREEMENT State Street, 0.25%, 4-01-04 (Collateralized by FHLMC bond, 08-26-05 with a value of $362,150 and a repurchase amount of $353,699) $ 353,697 353,697 ---------- Total repurchase agreement (cost $353,697) -3.6%.................... 353,697 ---------- Total long positions (cost $9,496,875) - 97.3%.. 9,394,347 SHORT POSITIONS EXCHANGE TRADED FUNDS - (0.7%) iShares Lehman 20+ Year Treasury Bond Fund ...................................... (700) (62,650) MANAGED HEALTH CARE - (0.4%) Anthem, Inc.*....................................... (300) (27,192) Oxford Health Plans, Inc............................ (300) (14,655) ---------- (41,847) REAL ESTATE INVESTMENT TRUSTS - (0.1%) Novastar Financial, Inc............................. (200) (13,190) ---------- Total short positions (proceeds $114,693) - (1.2%) ............ (117,687) ---------- Total investments (cost $9,282,182) - 96.1%................ 9,276,660 Cash & other assets, less liabilities - 3.9%... 372,963 ---------- Total net assets - 100.0%....................... $9,649,623 ==========
The identified cost of investments owned at March 31, 2004 was the same for federal income tax and financial statement purposes. *Non income producing security ADR (American Depositary Receipt) L.P. (Limited Partnership) plc (public limited company) (1) Variable rate security. Rate indicated is rate effective at March 31, 2004. (2)Security is segregated as collateral for open futures contracts. The Alpha Opportunity Fund's hybrid structure combines an actively managed long/short component with a passively managed Standard & Poor's 500 Index component. Approximately 50 percent of the portfolio is invested in a long/short strategy managed by Mainstream Investment Advisers, LLC; the remainder is invested in an index strategy managed by Security Management Company, LLC. PERFORMANCE AVERAGE ANNUAL RETURNS AS OF MARCH 31, 2004
SINCE INCEPTION --------------- A Shares 20.76% (7-07-03) A Shares with sales charge 13.81% (7-07-03) B Shares 20.15% (7-07-03) B Shares with CDSC 15.15% (7-07-03) C Shares 20.15% (7-07-03) C Shares with CDSC 19.15% (7-07-03)
The performance data above represents past performance that is not predictive of future results. The investment return and principal value of an investment in the fund will fluctuate so that an investor's shares, when redeemed, may be worth more or less than their original cost. The figures above do not reflect deduction of the maximum front-end sales charge of 5.75% for Class A shares or the contingent deferred sales charge of 5% for Class B shares and 1% for Class C shares, as applicable, except where noted. The figures do not reflect the deduction of taxes that a shareholder would pay on distributions or redemption of fund shares. Such figures would be lower if the maximum sales charge and any applicable taxes were deducted. Fee waivers reduced expenses of the Fund and in the absence of such waiver, the performance quoted would be reduced. 8 See accompanying notes. SECURITY EQUITY FUND ENHANCED INDEX SERIES [NORTHERN TRUST LOGO] SUBADVISOR, NORTHERN TRUST 9 SCHEDULE OF INVESTMENTS MARCH 31, 2004 (UNAUDITED) SECURITY EQUITY FUND - ENHANCED INDEX SERIES
NUMBER MARKET COMMON STOCKS OF SHARES VALUE - ----------------------------------------------- --------- -------- ADVERTISING - 0.2% Interpublic Group of Companies, Inc.* ......... 781 $ 12,012 Omnicom Group, Inc. ........................... 188 15,087 -------- 27,099 AEROSPACE & DEFENSE - 1.5% Boeing Company ................................ 947 38,893 General Dynamics Corporation .................. 591 52,794 Goodrich Corporation .......................... 1,043 29,277 Honeywell International, Inc. ................. 585 19,802 Lockheed Martin Corporation ................... 988 45,092 Northrop Grumman Corporation .................. 90 8,858 United Technologies Corporation ............... 740 63,862 -------- 258,578 AGRICULTURAL PRODUCTS - 0.1% Archer-Daniels-Midland Company ................ 1,066 17,983 AIR FREIGHT & LOGISTICS - 1.1% FedEx Corporation ............................. 858 64,487 United Parcel Service, Inc. ................... 1,658 115,795 -------- 180,282 AIRLINES - 0.2% Southwest Airlines Company .................... 2,333 33,152 ALUMINUM - 0.2% Alcoa, Inc. ................................... 774 26,850 APPAREL RETAIL - 0.4% Gap, Inc. ..................................... 786 17,229 Limited Brands ................................ 1,345 26,900 TJX Companies, Inc. ........................... 659 16,185 -------- 60,314 APPAREL, ACCESSORIES & LUXURY GOODS - 0.3% Jones Apparel Group, Inc. ..................... 143 5,169 Liz Claiborne, Inc. ........................... 174 6,384 V.F. Corporation .............................. 701 32,737 -------- 44,290 APPLICATION SOFTWARE - 0.5% Citrix Systems, Inc.* ......................... 1,553 33,576 Compuware Corporation* ........................ 2,075 15,459 Parametric Technology Corporation* ............ 5,993 27,088 Siebel Systems, Inc.* ......................... 556 6,400 -------- 82,523 ASSET MANAGEMENT & CUSTODY BANKS - 0.4% Bank of New York Company, Inc. ................ 436 13,734 Federated Investors, Inc. (Cl.B) .............. 71 2,232 Mellon Financial Corporation .................. 1,311 41,021 State Street Corporation ...................... 58 3,024 -------- 60,011 AUTO PARTS & EQUIPMENT - 0.0% Visteon Corporation ........................... 649 6,211 AUTOMOBILE MANUFACTURERS - 0.5% Ford Motor Company ............................ 2,607 35,377 General Motors Corporation .................... 859 40,459 -------- 75,836 BIOTECHNOLOGY - 1.1% Amgen, Inc.* .................................. 1,864 108,429 Biogen, Inc.* ................................. 100 5,560 Chiron Corporation* ........................... 542 23,853 Genzyme Corporation* .......................... 816 38,385 Medimmune, Inc.* .............................. 401 9,255 -------- 185,482 BREWERS - 0.6% Adolph Coors Company .......................... 466 32,364 Anheuser-Busch Companies, Inc. ................ 1,324 67,524 -------- 99,888 BROADCASTING & CABLE TV - 0.8% Clear Channel Communications, Inc. ............ 636 26,935 Comcast Corporation* .......................... 3,779 108,608 -------- 135,543 BUILDING PRODUCTS - 0.3% Masco Corporation ............................. 1,604 48,810 CASINOS & GAMING - 0.1% Harrah's Entertainment, Inc. .................. 361 19,815 COMMERCIAL PRINTING - 0.2% R. R. Donnelley & Sons Company ................ 969 29,312 COMMUNICATIONS EQUIPMENT - 2.6% Avaya, Inc.* .................................. 275 4,367 Cisco Systems, Inc.* .......................... 10,702 251,711 Comverse Technology, Inc.* .................... 1,000 18,140 Corning, Inc.* ................................ 100 1,118 JDS Uniphase Corporation* ..................... 3,445 14,021 Lucent Technologies, Inc.* .................... 5,871 24,130 Motorola, Inc. ................................ 2,253 39,653 Qlogic Corporation* ........................... 120 3,961 Qualcomm, Inc. ................................ 929 61,704 Scientific-Atlanta, Inc. ...................... 643 20,795 -------- 439,600 COMPUTER & ELECTRONICS RETAIL - 0.3% Best Buy Company, Inc. ........................ 689 35,635 RadioShack Corporation ........................ 662 21,952 -------- 57,587
10 See accompanying notes. SCHEDULE OF INVESTMENTS (CONTINUED) MARCH 31, 2004 (UNAUDITED) SECURITY EQUITY FUND - ENHANCED INDEX SERIES (CONTINUED)
NUMBER MARKET COMMON STOCKS (CONTINUED) OF SHARES VALUE - ---------------------------------------------- --------- -------- COMPUTER HARDWARE - 3.4% Apple Computer, Inc.* ........................ 550 $ 14,878 Dell Computer Corporation* ................... 3,984 133,942 Gateway, Inc.* ............................... 800 4,224 Hewlett-Packard Company ...................... 4,708 107,531 International Business Machines Corporation .............................. 2,963 272,122 NCR Corporation* ............................. 435 19,166 Sun Microsystems, Inc.* ...................... 3,665 15,246 -------- 567,109 COMPUTER STORAGE & PERIPHERALS - 0.5% EMC Corporation* ............................. 3,510 47,771 Lexmark International, Inc.* ................. 101 9,292 Network Appliance, Inc.* ..................... 981 21,042 -------- 78,105 CONSTRUCTION & ENGINEERING - 0.0% Fluor Corporation ............................ 54 2,089 CONSTRUCTION & FARM MACHINERY - 0.7% Caterpillar, Inc. ............................ 593 46,889 Cummins, Inc. ................................ 500 29,225 Paccar, Inc. ................................. 698 39,256 -------- 115,370 CONSTRUCTION MATERIALS - 0.2% Vulcan Materials Company ..................... 643 30,504 CONSUMER FINANCE - 1.4% American Express Company ..................... 1,723 89,338 Capital One Financial Corporation ............ 238 17,952 MBNA Corporation ............................. 2,748 75,927 Providian Financial Corporation* ............. 500 6,550 SLM Corporation .............................. 913 38,209 -------- 227,976 DATA PROCESSING & OUTSOURCED SERVICES - 1.2% Automatic Data Processing, Inc. .............. 917 38,514 Computer Sciences Corporation* ............... 882 35,571 Convergys Corporation* ....................... 1,694 25,749 First Data Corporation ....................... 1,249 52,658 Sabre Holdings Corporation ................... 805 19,972 Sungard Data Systems, Inc.* .................. 1,056 28,934 -------- 201,398 DEPARTMENT STORES - 0.6% Federated Department Stores, Inc. ............ 582 31,457 Kohl's Corporation* .......................... 19 918 May Department Stores Company ................ 875 30,257 Nordstrom, Inc. .............................. 100 3,990 Sears, Roebuck & Company ..................... 892 38,320 -------- 104,942 DISTRIBUTORS - 0.1% Genuine Parts Company ........................ 462 15,117 DIVERSIFIED BANKS - 4.3% Bank of America Corporation .................. 2,240 181,395 Bank One Corporation ......................... 1,778 96,937 Comerica, Inc. ............................... 259 14,069 Fleetboston Financial Corporation ............ 1,633 73,322 U.S. Bancorp ................................. 2,134 59,005 Wachovia Corporation ......................... 2,597 122,059 Wells Fargo & Company ........................ 3,106 176,017 -------- 722,804 DIVERSIFIED CAPITAL MARKETS - 0.9% J.P. Morgan Chase & Company .................. 3,789 158,949 DIVERSIFIED CHEMICALS - 1.0% Dow Chemical Company ......................... 841 33,875 E.I. du Pont de Nemours & Company ................................... 1,574 66,454 Engelhard Corporation ........................ 1,059 31,654 Hercules, Inc.* .............................. 220 2,526 PPG Industries, Inc. ......................... 439 25,594 -------- 160,103 DIVERSIFIED COMMERCIAL SERVICES - 0.6% Cendant Corporation .......................... 2,617 63,829 Cintas Corporation ........................... 200 8,698 Deluxe Corporation ........................... 624 25,022 Equifax, Inc. ................................ 225 5,810 -------- 103,359 DIVERSIFIED METALS & MINING - 0.1% Freeport-McMoran Copper & Gold, Inc. (Cl.B) .................................... 449 17,551 Phelps Dodge Corporation* .................... 100 8,166 -------- 25,717 DRUG RETAIL - 0.3% CVS Corporation .............................. 298 10,519 Walgreen Company ............................. 1,355 44,647 -------- 55,166 ELECTRIC UTILITIES - 2.0% Centerpoint Energy, Inc. ..................... 2,678 30,610 Consolidated Edison, Inc. .................... 341 15,038 Dominion Resources, Inc. ..................... 870 55,941 Edison International ......................... 994 24,144 Entergy Corporation .......................... 346 20,587 Exelon Corporation ........................... 847 58,333 FPL Group, Inc. .............................. 682 45,592 PG&E Corporation* ............................ 632 18,309 PPL Corporation .............................. 162 7,387 Progress Energy, Inc. ........................ 870 40,960 Progress Energy, Inc. - Contingent Value Obligation* ......................... 400 116 Southern Company ............................. 361 11,010 Teco Energy, Inc. ............................ 900 13,167 -------- 341,194
11 See accompanying notes. SCHEDULE OF INVESTMENTS (CONTINUED) MARCH 31, 2004 (UNAUDITED) SECURITY EQUITY FUND - ENHANCED INDEX SERIES (CONTINUED)
NUMBER MARKET COMMON STOCKS (CONTINUED) OF SHARES VALUE - ----------------------------------------------- --------- -------- ELECTRICAL COMPONENTS & EQUIPMENT - 0.3% Cooper Industries, Inc. ....................... 200 $ 11,436 Emerson Electric Company ...................... 238 14,261 Power-One, Inc.* .............................. 1,634 18,072 -------- 43,769 ELECTRONIC EQUIPMENT MANUFACTURERS - 0.7% Agilent Technologies, Inc.* ................... 994 31,440 Perkinelmer, Inc. ............................. 123 2,545 Tektronix, Inc. ............................... 1,000 32,710 Thermo Electron Corporation* .................. 1,099 31,080 Waters Corporation* ........................... 592 24,177 -------- 121,952 ELECTRONIC MANUFACTURING SERVICES - 0.5% Jabil Circuit, Inc.* .......................... 857 25,222 Molex, Inc. ................................... 1,000 30,390 Sanmina-Sci Corporation* ...................... 632 6,958 Solectron Corporation* ........................ 3,128 17,298 -------- 79,868 EMPLOYMENT SERVICES - 0.2% Monster Worldwide, Inc.* ...................... 171 4,480 Robert Half International, Inc.* .............. 1,444 34,107 -------- 38,587 ENVIRONMENTAL SERVICES - 0.2% Waste Management, Inc. ........................ 873 26,347 FOOD DISTRIBUTORS - 0.1% Sysco Corporation ............................. 381 14,878 FOOD RETAIL - 0.5% Kroger Company* ............................... 1,920 31,949 Safeway, Inc.* ................................ 1,098 22,597 Supervalu, Inc. ............................... 1,069 32,647 -------- 87,193 FOOTWEAR - 0.2% Nike, Inc. (Cl.B) ............................. 412 32,082 Reebok International, Ltd. .................... 100 4,135 -------- 36,217 FOREST PRODUCTS - 0.2% Louisiana-Pacific Corporation ................. 1,013 26,135 Weyerhaeuser Company .......................... 160 10,480 -------- 36,615 GAS UTILITIES - 0.2% Nicor, Inc. ................................... 554 19,517 Nisource, Inc. ................................ 401 8,521 Peoples Energy Corporation .................... 75 3,349 -------- 31,387 GENERAL MERCHANDISE STORES - 0.5% Big Lots, Inc.* ............................... 158 2,291 Dollar General Corporation .................... 1,200 23,040 Family Dollar Stores, Inc. .................... 600 21,570 Target Corporation ............................ 806 36,302 -------- 83,203 GOLD - 0.0% Newmont Mining Corporation Holding Company .................................... 114 5,316 HEALTH CARE DISTRIBUTORS - 0.4% Amerisourcebergen Corporation ................. 180 9,842 Cardinal Health, Inc. ......................... 282 19,430 McKesson Corporation .......................... 1,342 40,381 -------- 69,653 HEALTH CARE EQUIPMENT - 1.5% Applera Corporation - Applied Biosystems Group ........................... 500 9,890 Baxter International, Inc. .................... 112 3,460 Becton, Dickinson & Company ................... 299 14,496 Biomet, Inc. .................................. 1,000 38,360 Boston Scientific Corporation* ................ 899 38,100 Guidant Corporation ........................... 484 30,671 Medtronic, Inc. ............................... 1,893 90,391 St. Jude Medical, Inc.* ....................... 70 5,047 Stryker Corporation ........................... 36 3,187 Zimmer Holdings, Inc.* ........................ 204 15,051 -------- 248,653 HEALTH CARE FACILITIES - 0.5% HCA, Inc. ..................................... 223 9,058 Health Management Association, Inc. ........... 1,127 26,158 Manor Care, Inc. .............................. 848 29,926 Tenet Healthcare Corporation* ................. 2,057 22,956 -------- 88,098 HEALTH CARE SERVICES - 0.5% Express Scripts, Inc.* ........................ 22 1,641 IMS Health, Inc. .............................. 1,389 32,308 Medco Health Solutions, Inc.* ................. 1,219 41,446 Quest Diagnostics, Inc. ....................... 115 9,525 -------- 84,920 HEALTH CARE SUPPLIES - 0.3% Bausch & Lomb, Inc. ........................... 500 29,985 Caremark Rx, Inc. ............................. 581 19,302 -------- 49,287 HOME IMPROVEMENT RETAIL - 1.6% Home Depot, Inc. .............................. 4,308 160,947 Lowe's Companies, Inc. ........................ 1,372 77,010 Sherwin-Williams Company ...................... 700 26,901 -------- 264,858
12 See accompanying notes. SCHEDULE OF INVESTMENTS (CONTINUED) MARCH 31, 2004 (UNAUDITED) SECURITY EQUITY FUND - ENHANCED INDEX SERIES (CONTINUED)
NUMBER MARKET COMMON STOCKS (CONTINUED) OF SHARES VALUE - --------------------------------------------- --------- -------- HOTELS, RESORTS & CRUISE LINES - 0.3% Carnival Corporation ........................ 428 $ 19,221 Marriott International, Inc. ................ 351 14,935 Starwood Hotels & Resorts Worldwide, Inc. ......................... 512 20,736 -------- 54,892 HOUSEHOLD APPLIANCES - 0.3% Black & Decker Corporation .................. 600 34,164 Snap-On, Inc. ............................... 89 2,878 Whirlpool Corporation ....................... 108 7,438 -------- 44,480 HOUSEHOLD PRODUCTS - 2.2% Clorox Company .............................. 349 17,070 Colgate-Palmolive Company ................... 943 51,959 Kimberly-Clark Corporation .................. 1,196 75,468 Procter & Gamble Company .................... 2,062 216,263 -------- 360,760 HOUSEWARES & SPECIALTIES - 0.1% Fortune Brands, Inc. ........................ 216 16,552 HYPERMARKETS & SUPERCENTERS - 2.6% Costco Wholesale Corporation* ............... 1,353 50,819 Wal-Mart Stores, Inc. ....................... 6,483 386,970 -------- 437,789 INDUSTRIAL CONGLOMERATES - 4.1% 3M Company .................................. 1,227 100,454 General Electric Company .................... 16,541 504,831 Textron, Inc. ............................... 209 11,108 Tyco International, Ltd. .................... 2,279 65,293 -------- 681,686 INDUSTRIAL GASES - 0.3% Air Products & Chemicals, Inc. .............. 870 43,604 INDUSTRIAL MACHINERY - 0.5% Crane Company ............................... 673 22,209 Dover Corporation ........................... 400 15,508 Illinois Tool Works, Inc. ................... 192 15,212 Pall Corporation ............................ 1,156 26,230 -------- 79,159 INSURANCE BROKERS - 0.3% Marsh & McLennan Companies, Inc. ............ 1,125 52,088 INTEGRATED OIL & GAS - 4.3% ChevronTexaco Corporation ................... 1,882 165,202 ConocoPhillips .............................. 749 52,288 Exxon Mobil Corporation ..................... 11,015 458,114 Marathon Oil Corporation .................... 1,153 38,822 Occidental Petroleum Corporation ............ 219 10,085 -------- 724,511 INTEGRATED TELECOMMUNICATION SERVICES - 2.7% AT&T Corporation ........................... 1,855 36,302 Alltel Corporation ......................... 505 25,194 Bellsouth Corporation ...................... 3,821 105,803 Citizens Communications Company* ........... 344 4,451 Qwest Communications International, Inc.* .................... 6,238 26,886 SBC Communications, Inc. ................... 4,644 113,964 Sprint Corporation (FON Group) ............. 300 5,529 Verizon Communications, Inc. ............... 3,730 136,294 -------- 454,423 INTERNET RETAIL - 0.4% Ebay, Inc.* ................................ 1,036 71,826 INTERNET SOFTWARE & SERVICES - 0.2% Yahoo!, Inc.* .............................. 592 28,765 INVESTMENT BANKING & BROKERAGE - 2.4% Bear Stearns Companies, Inc. ............... 393 34,458 Charles Schwab Corporation ................. 4,234 49,157 Goldman Sachs Group, Inc. .................. 938 97,880 Lehman Brothers Holdings, Inc. ............. 153 12,679 Merrill Lynch & Company, Inc. .............. 1,925 114,653 Morgan Stanley ............................. 1,482 84,919 -------- 393,746 LEISURE PRODUCTS - 0.2% Hasbro, Inc. ............................... 1,300 28,275 Mattel, Inc. ............................... 48 885 -------- 29,160 LIFE & HEALTH INSURANCE - 1.1% Aflac, Inc. ................................ 171 6,864 Jefferson-Pilot Corporation ................ 732 40,267 John Hancock Financial Services, Inc. .......................... 465 20,316 Lincoln National Corporation ............... 826 39,086 Metlife, Inc. .............................. 1,913 68,256 Prudential Financial, Inc. ................. 267 11,956 Unumprovident Corporation .................. 129 1,887 -------- 188,632 MANAGED HEALTH CARE - 0.8% Aetna, Inc. ................................ 300 26,916 Anthem, Inc.* .............................. 19 1,722 Cigna Corporation .......................... 700 41,314 Humana, Inc.* .............................. 1,393 26,495 Unitedhealth Group, Inc. ................... 616 39,695 Wellpoint Health Networks, Inc.* ........... 19 2,161 -------- 138,303
13 See accompanying notes. SCHEDULE OF INVESTMENTS (CONTINUED) MARCH 31, 2004 (UNAUDITED) SECURITY EQUITY FUND - ENHANCED INDEX SERIES (CONTINUED)
NUMBER MARKET COMMON STOCKS (CONTINUED) OF SHARES VALUE - ------------------------- ---------- ----------- METAL & GLASS CONTAINERS - 0.2% Pactiv Corporation* ................................ 1,270 $ 28,257 MOTORCYCLE MANUFACTURERS - 0.3% Harley-Davidson, Inc. .............................. 847 45,179 MOVIES & ENTERTAINMENT - 2.1% Time Warner, Inc.* ................................. 8,413 141,843 Viacom, Inc. (Cl.B)................................. 3,113 122,061 Walt Disney Company................................. 3,233 80,793 ----------- 344,697 MULTI-LINE INSURANCE - 1.7% American International Group, Inc. ................. 3,819 272,486 Hartford Financial Group, Inc. ..................... 73 4,650 Loews Corporation................................... 100 5,906 ----------- 283,042 MULTI-UTILITIES & UNREGULATED POWER - 0.6% AES Corporation* ................................... 2,500 21,325 Calpine Corporation* ............................... 237 1,107 Constellation Energy Group, Inc. ................... 813 32,479 Duke Energy Corporation............................. 290 6,554 Public Service Enterprise Group, Inc. .............. 389 18,275 Williams Companies, Inc. ........................... 1,343 12,853 ----------- 92,593 OFFICE ELECTRONICS - 0.0% Xerox Corporation* ................................. 294 4,284 OFFICE SERVICES & SUPPLIES - 0.2% Pitney Bowes, Inc. ................................. 943 40,181 OIL & GAS DRILLING - 0.2% Noble Corporation* ................................. 240 9,221 Rowan Companies, Inc.* ............................. 1,200 25,308 ----------- 34,529 OIL & GAS EQUIPMENT & SERVICES - 0.6% BJ Services Company* ............................... 473 20,467 Baker Hughes, Inc. ................................. 555 20,246 Schlumberger, Ltd. ................................. 883 56,380 ----------- 97,093 OIL & GAS EXPLORATION & PRODUCTION - 0.8% Apache Corporation.................................. 534 23,053 Burlington Resources, Inc. ......................... 331 21,062 EOG Resources, Inc. ................................ 723 33,178 Kerr-McGee Group.................................... 659 33,939 Unocal Corporation.................................. 670 24,978 ----------- 136,210 OIL & GAS REFINING,MARKETING & TRANSPORTATION - 0.0% Ashland, Inc. ...................................... 44 2,046 Sunoco, Inc. ....................................... 44 2,745 ----------- 4,791 OTHER DIVERSIFIED FINANCIAL SERVICES - 2.9% Citigroup, Inc. .................................... 8,627 446,016 Principal Financial Group, Inc. .................... 1,192 42,471 ----------- 488,487 PACKAGED FOODS & MEATS - 1.0% Campbell Soup Company............................... 911 24,843 General Mills, Inc. ................................ 581 27,121 Hershey Foods Corporation........................... 500 41,425 Kellogg Company..................................... 4 157 McCormick & Company, Inc. .......................... 1,000 33,520 Sara Lee Corporation................................ 119 2,601 Wm. Wrigley Jr. Company............................. 751 44,399 ----------- 174,066 PAPER PACKAGING - 0.1% Sealed Air Corporation* ............................ 361 17,953 PAPER PRODUCTS - 0.2% Georgia-Pacific Corporation......................... 739 24,897 International Paper Company......................... 240 10,142 ----------- 35,039 PERSONAL PRODUCTS - 0.3% Avon Products, Inc. ................................ 123 9,332 Gillette Company.................................... 967 37,810 ----------- 47,142 PHARMACEUTICALS - 7.9% Abbott Laboratories................................. 3,003 123,423 Bristol-Myers Squibb Company........................ 2,987 72,375 Eli Lilly & Company................................. 1,643 109,917 Forest Laboratories, Inc.* ......................... 238 17,046 Johnson & Johnson................................... 5,147 261,056 Merck & Company, Inc. .............................. 3,576 158,023 Pfizer, Inc. ....................................... 12,680 444,434 Schering-Plough Corporation......................... 927 15,036 Watson Pharmaceuticals, Inc.* ...................... 674 28,841 Wyeth............................................... 2,460 92,373 ----------- 1,322,524 PROPERTY & CASUALTY INSURANCE - 1.4% Ace, Ltd. .......................................... 234 9,982 Allstate Corporation................................ 1,110 50,461 Ambac Financial Group, Inc. ........................ 177 13,059 Chubb Financial Corporation......................... 607 42,211 MBIA, Inc. ......................................... 635 39,814 Progressive Corporation............................. 29 2,540 St. Paul Companies, Inc. ........................... 366 14,644 Travelers Property Casualty Corporation (Cl.B)................................ 2,578 44,522 XL Capital, Ltd. ................................... 303 23,040 ----------- 240,273
14 See accompanying notes. SCHEDULE OF INVESTMENTS (CONTINUED) MARCH 31, 2004 (UNAUDITED) SECURITY EQUITY FUND - ENHANCED INDEX SERIES (CONTINUED)
NUMBER MARKET COMMON STOCKS (CONTINUED) OF SHARES VALUE - ------------------------- ---------- ----------- PUBLISHING - 0.5% Dow Jones & Company, Inc. ...................... 600 $ 28,746 Gannett Company, Inc. .......................... 420 37,019 Knight-Ridder, Inc. ............................ 130 9,522 New York Times Company.......................... 100 4,420 ----------- 79,707 RAILROADS - 0.5% Burlington Northern Santa Fe Corporation................................... 1,424 44,856 CSX Corporation................................. 73 2,211 Union Pacific Corporation....................... 563 33,679 ----------- 80,746 REAL ESTATE INVESTMENT TRUSTS - 0.3% Apartment Investment & Management Company............................ 884 27,484 Equity Office Properties Trust.................. 904 26,117 ----------- 53,601 REGIONAL BANKS - 1.9% BB&T Corporation................................ 860 30,358 Fifth Third Bancorp............................. 589 32,613 First Tennessee National Corporation............ 707 33,724 M&T Bank Corporation............................ 200 17,970 National City Corporation....................... 962 34,228 PNC Financial Services.......................... 426 23,609 Regions Financial Corporation................... 1,059 38,675 Southtrust Corporation.......................... 547 18,139 Suntrust Banks, Inc. ........................... 107 7,459 Synovus Financial Corporation................... 450 11,002 Union Planters Corporation...................... 1,125 33,581 Zions Bancorporation............................ 530 30,316 ----------- 311,674 RESTAURANTS - 0.6% McDonald's Corporation.......................... 2,887 82,482 Wendy's International, Inc. .................... 28 1,139 Yum! Brands, Inc.* ............................. 286 10,865 ----------- 94,486 SEMICONDUCTOR EQUIPMENT - 0.4% Applied Materials, Inc.* ....................... 2,543 54,369 Teradyne, Inc.* ................................ 685 16,324 ----------- 70,693 SEMICONDUCTORS - 3.4% Altera Corporation* ............................ 579 11,841 Analog Devices, Inc. ........................... 458 21,989 Applied Micro Circuits Corporation* ............ 2,620 15,065 Broadcom Corporation* .......................... 682 26,714 Intel Corporation............................... 11,223 305,266 LSI Logic Corporation* ......................... 2,905 27,133 Maxim Integrated Products, Inc. ................ 94 4,426 Micron Technology, Inc.* ....................... 2,589 43,262 National Semiconductor Corporation* ............ 610 27,102 Texas Instruments, Inc. ........................ 2,525 73,780 Xilinx, Inc.* .................................. 120 4,560 ----------- 561,138 SOFT DRINKS - 2.2% Coca-Cola Company .............................. 3,515 176,804 Coca-Cola Enterprises, Inc. .................... 530 12,810 Pepsico, Inc. .................................. 3,236 174,259 ----------- 363,873 SPECIALTY CHEMICALS - 0.3% Ecolab, Inc. ................................... 423 12,068 International Flavors & Fragrances, Inc. ....... 100 3,550 Rohm & Haas Company............................. 161 6,414 Sigma-Aldrich Corporation....................... 517 28,611 ----------- 643 SPECIALTY STORES - 0.6% Autonation, Inc.* .............................. 1,809 30,843 Autozone, Inc.* ................................ 343 29,488 Staples, Inc.* ................................. 1,136 28,843 Toys 'R' Us, Inc.* ............................. 322 5,410 ----------- 94,584 STEEL - 0.1% Nucor Corporation............................... 300 18,444 SYSTEMS SOFTWARE - 3.6% Adobe Systems, Inc. ............................ 300 11,829 Computer Associates International, Inc. .......................... 1,183 31,775 Microsoft Corporation........................... 17,705 442,094 Oracle Corporation* ............................ 7,006 84,142 Symantec Corporation* .......................... 293 13,566 Veritas Software Corporation* .................. 717 19,294 ----------- 602,700 THRIFTS & MORTGAGE FINANCE - 1.6% Fannie Mae...................................... 1,821 135,391 Freddie Mac..................................... 655 38,684 Golden West Financial Corporation............... 15 1,679 MGIC Investment Corporation..................... 400 25,692 Washington Mututal, Inc. ....................... 1,625 69,404 ----------- 270,850
15 See accompanying notes. SCHEDULE OF INVESTMENTS (CONTINUED) MARCH 31, 2004 (UNAUDITED) SECURITY EQUITY FUND - ENHANCED INDEX SERIES (CONTINUED)
PRINCIPAL AMOUNT OR NUMBER MARKET COMMON STOCKS (CONTINUED) OF SHARES VALUE - ------------------------- ---------- ----------- TIRES & RUBBER - 0.0% Cooper Tire & Rubber Company.......................... 95 $ 1,914 TOBACCO - 1.2% Alteria Group, Inc. .................................. 3,381 184,095 R.J. Reynolds Tobacco Holdings, Inc. ................. 200 12,100 ----------- 196,195 TRADING COMPANIES & DISTRIBUTORS - 0.2% W.W. Grainger, Inc. .................................. 646 31,008 WIRELESS TELECOMMUNICATION SERVICES - 0.7% AT&T Wireless Services* .............................. 3,902 53,106 Nextel Communications, Inc.* ......................... 962 23,790 Sprint Corporation (PCS Group)* ...................... 3,578 32,918 ----------- 109,814 ----------- Total common stocks (cost $15,001,586) - 98.5%...................... 16,438,655 U.S. GOVERNMENT SECURITIES U.S. Treasury Bill, 0.875%, 04-22-04(1)............... $ 50,000 49,973 ----------- Total U.S. government securities (cost $49,975) - 0.3%........................ 49,973 REPURCHASE AGREEMENT United Missouri Bank, 0.65%, 04-01-04 (Collateralized by FNMA bond, 04-01-04 with a value of $351,000 and a repurchase amount of $347,006)............. $ 347,000 347,000 ----------- Total repurchase agreement (cost $347,000) - 2.1%....................... 347,000 ----------- Total investments (cost $15,398,561) - 100.9%.... 16,835,628 Liabilities, less cash & other assets - (0.9%)... (149,336) ----------- Total net assets - 100.0%........................ $16,686,292 ===========
The identified cost of investments owned at March 31, 2004 was the same for federal income tax and financial statement purposes. * Non-income producing security (1) Security is segregated as collateral for futures contracts. PERFORMANCE AVERAGE ANNUAL RETURNS AS OF MARCH 31, 2004
1 YEAR 5 YEARS SINCE INCEPTION ------ ------- --------------- A Shares 33.59% (2.30%) (2.19%) (1-29-99) A Shares with sales charge 25.90% (3.45%) (3.30%) (1-29-99) B Shares 32.39% (3.10%) (3.00%) (1-29-99) B Shares with CDSC 27.39% (3.49%) (3.00%) (1-29-99) C Shares 32.65% (3.07%) (2.93%) (1-29-99) C Shares with CDSC 31.65% (3.07%) (2.93%) (1-29-99)
The performance data above represents past performance that is not predictive of future results. The investment return and principal value of an investment in the fund will fluctuate so that an investor's shares, when redeemed, may be worth more or less than their original cost. The figures above do not reflect deduction of the maximum front-end sales charge of 5.75% for Class A shares or the contingent deferred sales charge of 5% for Class B shares and 1% for Class C shares, as applicable, except where noted. The figures do not reflect the deduction of taxes that a shareholder would pay on distributions or redemption of fund shares. Such figures would be lower if the maximum sales charge and any applicable taxes were deducted. Fee waivers reduced expenses of the Fund and in the absence of such waiver, the performance quoted would be reduced. 16 See accompanying notes. SECURITY EQUITY FUND EQUITY SERIES [SECURITY FUNDS LOGO] ADVISOR, SECURITY MANAGEMENT COMPANY, LLC 17 SCHEDULE OF INVESTMENTS MARCH 31, 2004 (UNAUDITED) SECURITY EQUITY FUND - EQUITY SERIES
NUMBER MARKET COMMON STOCKS OF SHARES VALUE - ----------------------------------------------------------------------------- ADVERTISING - 1.3% Omnicom Group, Inc. ............................ 79,100 $ 6,347,775 AEROSPACE & DEFENSE - 3.2% General Dynamics Corporation ................... 88,400 7,896,772 L-3 Communications Holdings, Inc. 50,000 2,974,000 United Technologies Corporation 54,200 4,677,460 ----------- 15,548,232 AIR FREIGHT & LOGISTICS - 1.9% FedEx Corporation .............................. 125,000 9,395,000 AIRLINES - 0.5% Southwest Airlines Company ..................... 179,500 2,550,695 ALUMINUM - 1.0% Alcoa, Inc. .................................... 145,000 5,030,050 APPLICATIONS SOFTWARE - 0.5% Intuit, Inc.* .................................. 51,800 2,324,784 ASSET MANAGEMENT & CUSTODY BANKS - 1.3% Bank of New York Company, Inc. 200,000 6,300,000 BIOTECHNOLOGY - 2.2% Amgen, Inc.* ................................... 185,000 10,761,450 BREWERS - 1.5% Anheuser-Busch Companies, Inc. 140,000 7,140,000 BROADCASTING & CABLE TV- 0.9% Comcast Corporation* ........................... 150,000 4,311,000 COMMUNICATIONS EQUIPMENT - 3.3% ADC Telecommunications, Inc.* .................. 1,500,000 4,350,000 Cisco Systems, Inc.* ........................... 500,000 11,760,000 ----------- 16,110,000 COMPUTER HARDWARE - 2.8% Dell, Inc.* .................................... 200,900 6,754,258 International Business Machines Corporation ......................... 77,000 7,071,680 ----------- 13,825,938 CONSUMER FINANCE - 1.3% MBNA Corporation ............................... 230,000 6,354,900 DATA PROCESSING & OUTSOURCED SERVICE - 2.4% Computer Sciences Corporation* 55,000 2,218,150 First Data Corporation ......................... 230,000 9,696,800 ----------- 11,914,950 DEPARTMENT STORES - 1.9% Kohl's Corporation* ............................ 190,300 9,197,199 DIVERSIFIED BANKS - 2.8% Bank of America Corporation .................... 60,000 4,858,800 Wells Fargo & Company .......................... 160,000 9,067,200 ----------- 13,926,000 DIVERSIFIED CHEMICALS - 0.6% E.I. du Pont de Nemours & Company 75,000 3,166,500 DRUG RETAIL - 1.0% CVS Corporation ................................ 145,000 5,118,500 ELECTRONIC MANUFACTURING SERVICES - 0.5% Molex, Inc. .................................... 85,000 2,583,150 GENERAL MERCHANDISE STORES - 1.0% Target Corporation ............................. 107,500 4,841,800 HEALTH CARE DISTRIBUTORS - 2.2% Cardinal Health, Inc. .......................... 160,000 11,024,000 HEALTH CARE EQUIPMENT - 1.4% Medtronic, Inc. ................................ 146,200 6,981,050 HOME IMPROVEMENT RETAIL - 1.8% Home Depot, Inc. ............................... 240,000 8,966,400 HOTELS, RESORTS & CRUISE LINES - 1.4% Carnival Corporation ........................... 155,000 6,961,050 HOUSEHOLD PRODUCTS - 3.5% Colgate-Palmolive Company ...................... 100,000 5,510,000 Procter & Gamble Company ....................... 110,000 11,536,800 ----------- 17,046,800 HYPERMARKETS & SUPERCENTERS - 2.7% Wal-Mart Store, Inc. ........................... 220,000 13,131,800 INDUSTRIAL CONGLOMERATES - 5.1% 3M Company ..................................... 64,000 5,239,680 General Electric Company ....................... 550,000 16,786,000 Tyco International, Inc. ....................... 100,000 2,865,000 ----------- 24,890,680 INDUSTRIAL GASES - 1.2% Praxair, Inc. .................................. 160,000 5,939,200 INTEGRATED OIL & GAS - 3.4% Chevrontexaco Corporation ...................... 60,000 5,266,800 Exxon Mobil Corporation ........................ 275,000 11,437,250 ----------- 16,704,050 INTEGRATED TELECOMMUNICATIONS SERVICES - 1.6% SBC Communications, Inc. ....................... 170,000 4,171,800 Verizon Communications, Inc. ................... 100,000 3,654,000 ----------- 7,825,800 INVESTMENT BANKING & BROKERAGE - 3.2% Goldman Sachs Group, Inc. ...................... 50,000 5,217,500 Merrill Lynch & Company, Inc. .................. 90,500 5,390,180 Morgan Stanley ................................. 90,000 5,157,000 ----------- 15,764,680 LIFE & HEALTH INSURANCE - 1.3% Aflac, Inc. .................................... 160,000 6,422,400
18 See accompanying notes. SCHEDULE OF INVESTMENTS (CONTINUED) MARCH 31, 2004 (UNAUDITED) SECURITY EQUITY FUND - EQUITY SERIES (CONTINUED)
NUMBER MARKET COMMON STOCKS (CONTINUED) OF SHARES VALUE - ---------------------------------------------------------------------------- MANAGED HEALTH CARE - 1.9% Anthem, Inc.* ................................ 55,000 $ 4,985,200 Unitedhealth Group, Inc. ..................... 70,000 4,510,800 ------------ 9,496,000 MOTORCYCLE MANUFACTURERS - 2.1% Harley-Davidson, Inc. ........................ 198,000 10,561,320 MOVIES & ENTERTAINMENT - 3.4% Time Warner, Inc* ............................ 460,000 7,755,600 Viacom, Inc. (Cl.B) .......................... 233,400 9,151,614 ------------ 16,907,214 MULTI-LINE INSURANCE - 3.2% American International Group, Inc. ........... 220,000 15,697,000 OIL & GAS EQUIPMENT & SERVICES - 0.6% BJ Services Company* ......................... 54,000 2,336,580 Haliburton Company ........................... 17,000 516,630 ------------ 2,853,210 OIL & GAS EXPLORATION & PRODUCTION - 1.5% Anadarko Petroleum Corporation ............... 50,000 2,593,000 Devon Energy Corporation ..................... 80,000 4,652,000 ------------ 7,245,000 OTHER DIVERSIFIED FINANCIAL SERVICES - 3.7% Citigroup, Inc. .............................. 350,000 18,095,000 PACKAGED FOODS & MEATS - 0.7% General Mills, Inc. .......................... 70,000 3,267,600 PHARMACEUTICALS - 8.3% Abbott Laboratories .......................... 130,000 5,343,000 Eli Lilly & Company .......................... 50,000 3,345,000 Johnson & Johnson ............................ 200,000 10,144,000 Pfizer, Inc .................................. 560,000 19,628,000 Wyeth ........................................ 60,000 2,253,000 ------------ 40,713,000 PROPERTY & CASUALTY INSURANCE - 1.7% Chubb Corporation ............................ 80,000 5,563,200 Safeco Corporation ........................... 60,000 2,590,200 ------------ 8,153,400 PUBLISHING - 1.1% Belo Corporation ............................. 190,000 5,274,400 SEMICONDUCTOR EQUIPMENT - 0.9% Applied Materials, Inc.* ..................... 203,500 4,350,830 SEMICONDUCTORS - 3.3% Analog Devices, Inc. ......................... 80,000 3,840,800 Intel Corporation ............................ 350,000 9,520,000 Texas Instruments, Inc. ...................... 100,000 2,922,000 ------------ 16,282,800 SOFT DRINKS - 2.2% Pepsico, Inc. ................................ 200,000 10,770,000 SYSTEMS SOFTWARE - 3.0% Microsoft Corporation ........................ 600,900 15,004,473 THRIFTS & MORTGAGE FINANCE - 0.9% Fannie Mae ................................... 58,900 4,379,215 ------------ Total common stocks (cost $402,245,794) - 99.2% ............... 487,456,295 U. S. GOVERNMENT AGENCIES Federal Home Loan Bank, 0.98%, 04-02-04 ............................. $2,800,000 2,799,924 Federal National Mortgage Association, 1.00%, 04-07-04 ............................. $1,500,000 1,499,750 ------------ Total U. S. government agencies (cost $4,299,674) - 0.9% .................. 4,299,674 REPURCHASE AGREEMENT United Missouri Bank, 0.65%, 04-01-04 (Collateralized by FNMA bond, 04-01-04 with a value of $1,030,000 and a repurchase amount of $1,009,010) ................................ $1,009,000 1,009,000 ------------ Total repurchase agreement (cost $1,009,000) - 0.2% .................. 1,009,000 ------------ Total investments (cost $407,554,468) - 100.3% .............. 492,764,969 Liabilities, less cash & other assets - (0.3%) ........................... (1,317,006) ------------ Total net assets - 100.0% .................. $491,447,963 ============
The identified cost of investments owned at March 31, 2004 was the same for federal income tax and financial statement purposes. *Non-income producing security 19 See accompanying notes. SCHEDULE OF INVESTMENTS (CONTINUED) MARCH 31, 2004 (UNAUDITED) SECURITY EQUITY FUND - EQUITY SERIES (CONTINUED) PERFORMANCE AVERAGE ANNUAL RETURNS AS OF MARCH 31, 2004
SINCE 1 YEAR 5 YEARS 10 YEARS INCEPTION ------ ------- -------- --------- A Shares 25.72% (4.58%) 8.43% N/A A Shares with sales charge 18.50% (5.69%) 7.79% N/A B Shares 24.74% (5.46%) 7.56% N/A B Shares with CDSC 19.74% (5.84%) 7.56% N/A C Shares 24.95% (5.47%) N/A (5.42%) (1-29-99) C Shares with CDSC 23.95% (5.47%) N/A (5.42%) (1-29-99)
The performance data above represents past performance that is not predictive of future results. The investment return and principal value of an investment in the fund will fluctuate so that an investor's shares, when redeemed, may be worth more or less than their original cost. The figures above do not reflect deduction of the maximum front-end sales charge of 5.75% for Class A shares or the contingent deferred sales charge of 5% for Class B shares and 1% for Class C shares, as applicable, except where noted. The figures do not reflect the deduction of taxes that a shareholder would pay on distributions or redemption of fund shares. Such figures would be lower if the maximum sales charge and any applicable taxes were deducted. 20 See accompanying notes. SECURITY EQUITY FUND GLOBAL SERIES [OPPENHEIMERFUNDS LOGO] SUBADVISOR, OPPENHEIMERFUNDS, INC. 21 SCHEDULE OF INVESTMENTS MARCH 31, 2004 (UNAUDITED) SECURITY EQUITY FUND - GLOBAL SERIES
PRINCIPAL AMOUNT OR NUMBER MARKET CONVERTIBLE BOND OF SHARES VALUE - --------------------------------------------------- ----------- ----------- Nektar Therapeutics, 3.00% - 2010 ................. $ 10,308 $ 177,964 ----------- Total convertible bond (cost $117,000) - 0.2% ... 177,964 FOREIGN BOND INDIA - 0.0% Hindustan Lever, Ltd., 9.00% - 2005(1) ............ 1,036,800 1,574 ----------- Total foreign bond (cost $9,180) - 0.0% ......... 1,574 COMMON STOCKS AUSTRALIA - 0.5% Australia & New Zealand Banking Group, Ltd. ............................. 35,781 517,923 Leighton Holdings, Ltd. ........................... 9,935 78,883 ----------- 596,806 BERMUDA - 0.8% Ace, Ltd. ......................................... 21,340 910,364 BRAZIL - 1.3% Companhia de Bebidas das Americas ADR .................................... 23,757 475,140 Empresa Brasileira de Aeronautica S.A. ADR ........................................ 33,968 1,090,373 ----------- 1,565,513 CANADA - 2.3% Alcan, Inc. ....................................... 687 30,470 Bombardier, Inc. (Cl.B) ........................... 64,500 288,084 EnCana Corporation ................................ 13,908 599,920 Husky Energy, Inc. ................................ 58,180 1,159,837 Manulife Financial Corporation .................... 15,773 582,794 ----------- 2,661,105 FINLAND - 0.1% Stora Enso Oyj (Cl.R) ............................. 11,180 140,688 FRANCE - 7.4% Alcatel S.A.* ..................................... 45,080 711,321 Aventis S.A. ...................................... 7,350 564,977 Axa ............................................... 6,750 140,850 Carrefour S.A. .................................... 7,860 387,718 Essilor International S.A. ........................ 7,500 456,137 France Telecom S.A.* .............................. 39,485 1,010,251 JC Decaux S.A.* ................................... 20,730 463,392 Sanofi-Synthelabo S.A. ............................ 24,094 1,573,724 Societe BIC S.A. .................................. 5,230 221,737 Societe Generale .................................. 12,350 1,054,795 Societe Television Francaise1 ..................... 14,950 474,734 Technip S.A. ...................................... 7,740 1,046,285 Total S.A. ........................................ 2,455 450,732 ----------- 8,556,653 GERMANY - 1.5% Allianz AG* ....................................... 9,597 1,045,044 BASF AG ........................................... 2,885 146,530 Deutsche Post AG .................................. 10,396 232,517 MLP AG* ........................................... 14,734 269,788 Muenchener Rueckversicherungs- Gesellschaft AG ................................. 771 85,624 ----------- 1,779,503 HONG KONG - 1.7% Hong Kong & China Gas Company, Ltd. ............................................ 340,400 587,642 Hutchison Whampoa, Ltd. ........................... 61,082 439,038 Television Broadcasts, Ltd. ....................... 206,991 977,688 ----------- 2,004,368 INDIA - 2.8% Gail India, Ltd. .................................. 14,490 71,115 Hindustan Lever, Ltd. ............................. 186,000 660,767 Icici Bank, Ltd. ADR .............................. 52,350 834,983 Infosys Technologies, Ltd. ........................ 8,008 910,749 Oil & Natural Gas Corporation, Ltd. ............... 8,520 164,916 Zee Telefilms, Ltd. ............................... 207,000 639,784 ----------- 3,282,314 IRELAND - 0.5% Anglo Irish Bank Corporation plc .................. 33,300 524,625 ISRAEL - 0.4% Teva Pharmaceutical Industries, Ltd. ADR ........................................ 7,470 473,673 ITALY - 0.4% Eni SpA ........................................... 22,789 458,168 JAPAN - 9.6% Canon, Inc. ....................................... 9,000 466,285 Chugai Pharmaceutical Company, Ltd. ................................... 31,200 496,633 Credit Saison Company, Ltd. ....................... 20,600 619,772 JGC Corporation ................................... 20,000 220,503 KDDI Corporation .................................. 381 2,149,728 Keyence Corporation ............................... 2,100 511,905 Murata Manufacturing Company, Ltd. ................................... 9,500 603,595 NEC Corporation ................................... 16,750 137,819 NTT Docomo, Inc. .................................. 545 1,204,883 Nippon Telegraph & Telephone Corporation ..................................... 28 158,793 Resona Holdings, Inc.* ............................ 255,000 426,491 Seven-Eleven Japan Company, Ltd. .................. 14,000 511,366 Sharp Corporation ................................. 54,000 964,925 Shionogi & Company, Ltd. .......................... 54,000 954,025 Shiseido Company, Ltd. ............................ 30,000 391,022 Sony Corporation .................................. 3,200 134,109 Trend Micro, Inc. ................................. 23,000 795,886 Yahoo Japan Corporation* .......................... 34 415,053 ----------- 11,162,793 KOREA - 2.1% Hyundai Heavy Industries Company, Ltd. ................................... 15,100 416,207 SK Telecom Company, Ltd. .......................... 2,040 381,683 SK Telecom Company, Ltd. ADR ...................... 14,700 313,110 Samsung Electronics Company, Ltd. ................. 2,752 1,373,059 ----------- 2,484,059
22 See accompanying notes. SCHEDULE OF INVESTMENTS (CONTINUED) MARCH 31, 2004 (UNAUDITED) SECURITY EQUITY FUND - GLOBAL SERIES (CONTINUED)
NUMBER MARKET COMMON STOCKS (CONTINUED) OF SHARES VALUE - ----------------------------------------------- ----------- ----------- MEXICO - 1.8% Fomento Economico Mexicano S.A. de C.V ................................. 120,300 $ 591,269 Grupo Modelo, S.A. de C.V. (Cl.C) ............. 162,000 440,895 Grupo Televisa S.A. ADR ....................... 17,964 850,416 Telefonos de Mexico S.A de C.V. ADR ................................. 4,850 169,314 ----------- 2,051,894 NETHERLANDS - 3.1% ABN Amro Holding N.V. ......................... 49,000 1,092,922 Aegon N.V. .................................... 71,273 910,909 Ing Group N.V ................................. 7,142 156,929 Koninklijke (Royal) Philips Electronics N.V. ............................ 7,680 222,075 Qiagen N.V.* .................................. 35,761 468,032 Unilever N.V. ................................. 3,140 216,669 Wolters Kluwer N.V. ........................... 31,328 535,521 ----------- 3,603,057 NORWAY - 0.9% Tandberg ASA* ................................. 113,700 1,088,835 SINGAPORE - 0.6% Singapore Press Holdings, Ltd. ................ 59,729 673,455 SPAIN - 0.8% Amadeus Global Travel Distribution S.A. ........................... 62,172 352,219 Antena 3 Television S.A.* ..................... 62 2,857 Endesa S.A. ................................... 6,380 116,038 Iberdrola S.A. ................................ 7,380 152,364 Telefonica S.A. ............................... 18,503 279,909 ----------- 903,387 SWEDEN - 3.4% Hennes & Mauritz AB (Cl.B) .................... 86,400 2,325,753 Telefonaktiebolaget LM Ericsson (Cl.B)* ..................................... 565,700 1,567,784 ----------- 3,893,537 SWITZERLAND - 2.1% Nestle S.A. ................................... 851 216,974 Novartis AG ................................... 17,339 736,345 Roche Holding AG .............................. 13,610 1,329,469 Swiss Re ...................................... 2,061 142,026 ----------- 2,424,814 TAIWAN - 1.1% Taiwan Semiconductor Manufacturing Company, Ltd. ADR* .......................... 121,300 1,266,372 UNITED KINGDOM - 11.0% 3i Group plc** ................................ 39,584 457,594 Astrazeneca plc ............................... 11,470 531,852 BAE Systems plc ............................... 52,255 193,274 BP plc ADR .................................... 17,567 899,430 Boots Group plc ............................... 42,122 479,966 Cable & Wireless plc .......................... 40,260 96,004 Cadbury Schweppes plc ......................... 143,030 1,127,702 Diageo plc .................................... 17,400 226,728 Dixons Group plc .............................. 388,313 1,097,254 Lloyds TSB Group plc .......................... 14,880 113,081 Pearson plc ................................... 84,670 962,453 Reckitt Benckiser plc ......................... 81,740 2,025,045 Reed Elsevier plc ............................. 63,765 564,272 Rentokil Initial plc .......................... 126,737 425,086 Royal Bank of Scotland Group plc .............. 39,799 1,214,932 Shell Transport & Trading Company plc ................................. 21,262 138,916 Smith & Nephew plc ............................ 57,360 564,519 Vodafone Group plc ............................ 472,100 1,119,267 WPP Group plc ................................. 47,330 479,290 ----------- 12,716,665 UNITED STATES - 40.2% Advanced Micro Devices, Inc.* ................. 83,100 1,348,713 Affymetrix, Inc.* ............................. 18,000 607,500 Amazon.com, Inc.* ............................. 12,000 519,360 Amdocs, Ltd.* ................................. 17,700 491,883 American Express Company* ..................... 18,200 943,670 Amgen, Inc.* .................................. 11,700 680,589 Applera Corporation - Applied Biosystems Group ............................ 21,000 415,380 BEA Systems, Inc.* ............................ 36,600 467,016 Bank One Corporation .......................... 40,659 2,216,729 Berkshire Hathaway, Inc. (Cl.B)* .............. 310 964,413 Boeing Company ................................ 12,200 501,054 Burlington Resources, Inc. .................... 7,100 451,773 Cadence Design Systems, Inc.* ................. 118,464 1,746,159 Charles Schwab Corporation .................... 38,600 448,146 ChevronTexaco Corporation ..................... 10,083 885,086 Circuit City Stores, Inc. ..................... 55,071 622,302 Cisco Systems, Inc.* .......................... 40,000 940,800 Citigroup, Inc. ............................... 8,666 448,032 Coach, Inc.* .................................. 7,000 286,930 Commerce Bancorp, Inc. ........................ 3,800 250,344 Electronic Arts, Inc.* ........................ 3,328 179,579 Eli Lilly & Company ........................... 6,900 461,610 Everest Re Group, Ltd. ........................ 5,400 461,376 Express Scripts, Inc.* ........................ 7,100 529,589 Gap, Inc. ..................................... 22,800 499,776 Genentech, Inc.* .............................. 5,600 592,592 Genzyme Corporation ........................... 10,600 498,624
23 See accompanying notes. SCHEDULE OF INVESTMENTS (CONTINUED) MARCH 31, 2004 (UNAUDITED) SECURITY EQUITY FUND - GLOBAL SERIES (CONTINUED)
NUMBER MARKET COMMON STOCKS (CONTINUED) OF SHARES VALUE - ----------------------------------------------- ----------- ------------ UNITED STATES (CONTINUED) Gilead Sciences, Inc.* ........................ 15,200 $ 847,704 Gillette Company .............................. 22,400 875,840 Global Santa Fe Corporation ................... 39,000 1,083,030 Human Genome Sciences, Inc.* .................. 13,300 166,649 IMS Health, Inc. .............................. 23,000 534,980 International Business Machines Corporation ................................. 4,667 428,617 International Flavors & Fragrances, Inc. ............................ 13,702 486,421 International Game Technology ................. 18,200 818,272 JDS Uniphase Corporation* ..................... 196,400 799,348 Juniper Networks, Inc.* ....................... 18,100 470,781 Lockheed Martin Corporation ................... 10,200 465,528 MBNA Corporation .............................. 42,000 1,160,460 Millennium Pharmaceuticals, Inc.* ............. 12,600 212,940 Mylan Laboratories, Inc. ...................... 18,850 428,461 National Semiconductor Corporation* ........... 22,600 1,004,118 Northern Trust Corporation .................... 8,400 391,356 Northrop Gruman Corporation ................... 5,400 531,468 Novell, Inc.* ................................. 58,800 669,144 Panera Bread Company* ......................... 4,800 186,816 Pfizer, Inc. .................................. 28,738 1,007,267 Qualcomm, Inc. ................................ 45,620 3,030,080 Quest Diagnostics, Inc. ....................... 12,000 993,960 RadioShack Corporation ........................ 13,600 450,976 Raytheon Company .............................. 25,200 789,768 Red Hat, Inc.* ................................ 26,700 610,362 Schering-Plough Corporation ................... 33,500 543,370 Scientific-Atlanta, Inc. ...................... 13,700 443,058 Sirius Satellite Radio, Inc.* ................. 1,116,796 3,797,106 Starbucks Corporation* ........................ 14,600 551,150 Sun Microsystems, Inc.* ....................... 129,400 538,304 Sybase, Inc.* ................................. 24,762 519,754 Symantec Corporation* ......................... 13,600 629,680 Transocean, Inc.* ............................. 39,700 1,107,233 Veritas Software Corporation* ................. 13,500 363,285 Wachovia Corporation .......................... 26,008 1,222,376 ------------ 46,618,687 ------------ Total common stocks (cost $89,733,878) - 96.4% ................. 111,841,335 PREFERRED STOCKS BRAZIL - 0.7% Tele Norte Leste Participacoes S.A ............ 60,974,067 772,567 GERMANY - 1.3% Fresenius AG .................................. 6,581 460,900 Porsche AG .................................... 1,784 1,076,491 ------------ 1,537,391 ------------ Total preferred stocks (cost $2,271,011) - 2.0% ................... 2,309,958 State Street, 0.25%, 04-01-04 (Collateralized by FHLMC bond, 2.00%, 2-23-06 with a value of $2,645,904 and a repurchase amount of $2,593,336) ....................... 2,593,318 2,593,318 ------------ Total repurchase agreement (cost $2,593,318) - 2.2% ................... 2,593,318 ------------ Total investments (cost $94,724,387) - 100.8% ................ 116,924,149 Liabilities, less cash & other assets - (0.8%) ........................... (897,368) ------------ Total net assets - 100.0% ................... $116,026,781 ============
24 See accompanying notes. SCHEDULE OF INVESTMENTS (CONTINUED) MARCH 31, 2004 (UNAUDITED) SECURITY EQUITY FUND - GLOBAL SERIES (CONTINUED) INVESTMENT CONCENTRATION AT MARCH 31, 2004, GLOBAL SERIES' INVESTMENT CONCENTRATION BY INDUSTRY WAS AS FOLLOWS: Aerospace/Defense ............................................ 0.4% Air Freight & Logistics ...................................... 3.1% Automobiles .................................................. 0.9% Beverages .................................................... 2.5% Biotechnology ................................................ 3.5% Capital Markets .............................................. 1.1% Chemicals .................................................... 0.8% Commercial Banks ............................................. 2.1% Commercial Services & Supplies ............................... 0.6% Communications Equipment ..................................... 7.9% Computers & Peripherals ...................................... 0.8% Construction & Engineering ................................... 0.3% Consumer Finance ............................................. 2.4% Diversified Financial Services ............................... 7.3% Diversified Telecommunications ............................... 3.9% Electric Utilities ........................................... 0.2% Electronic Equipment & Instruments ........................... 1.1% Energy Equipment & Services .................................. 0.9% Food & Staples Retailing ..................................... 1.2% Food Products ................................................ 0.4% Gas Utilities ................................................ 0.5% Health Care Equipment & Services ............................. 1.2% Health Care Providers & Services ............................. 1.8% Hotels, Restaurants & Leisure Products ....................... 1.6% Household Durables ........................................... 3.3% Household Products ........................................... 2.3% IT Services .................................................. 0.8% Insurance .................................................... 4.5% Internet & Catalog Retail .................................... 0.5% Internet Software & Services ................................. 1.6% Machinery .................................................... 0.4% Media ........................................................ 9.0% Metals & Mining .............................................. 0.0% Oil & Gas .................................................... 5.5% Paper & Forest Products ...................................... 1.1% Personal Products ............................................ 1.1% Pharmaceuticals .............................................. 8.4% Semiconductors & Semiconductor Equipment ..................... 3.1% Software ..................................................... 4.3% Specialty Retail ............................................. 0.9% Textiles, Apparel & Luxury Goods ............................. 2.7% Wireless Telecommunications .................................. 2.6% Repurchase Agreement ......................................... 2.2% Liabilities, less cash & other assets ........................ (0.8%) ----- 100.0% =====
The identified cost of investments owned at March 31, 2004 was the same for federal income tax and financial statement purposes. *Non-income producing security **Passive Foreign Investment Company ADR (American Depositary Receipt) plc (public limited company) (1)Principal amount on foreign bond is reflected in local currency (e.g. Indian Rupee) while market value is reflected in U.S. dollars. PERFORMANCE AVERAGE ANNUAL RETURNS AS OF MARCH 31, 2004
SINCE 1 YEAR 5 YEARS 10 YEARS INCEPTION ------ ------- -------- --------- A Shares 60.84% 8.73% 9.91% N/A A Shares with sales charge 51.60% 7.45% 9.27% N/A B Shares 59.93% 8.28% 9.17% N/A B Shares with CDSC 54.93% 7.98% 9.17% N/A C Shares 59.76% 7.82% N/A 7.48% (1-29-99) C Shares with CDSC 58.76% 7.82% N/A 7.48% (1-29-99)
The performance data above represents past performance that is not predictive of future results. The investment return and principal value of an investment in the fund will fluctuate so that an investor's shares, when redeemed, may be worth more or less than their original cost. The figures above do not reflect deduction of the maximum front-end sales charge of 5.75% for Class A shares or the contingent deferred sales charge of 5% for Class B shares and 1% for Class C shares, as applicable, except where noted. The figures do not reflect the deduction of taxes that a shareholder would pay on distributions or redemption of fund shares. Such figures would be lower if the maximum sales charge and any applicable taxes were deducted. 25 See accompanying notes. This page left intentionally blank. 26 SECURITY EQUITY FUND LARGE CAP GROWTH SERIES [SECURITY FUNDS LOGO] ADVISOR, SECURITY MANAGEMENT COMPANY, LLC 27 SCHEDULE OF INVESTMENTS MARCH 31, 2004 (UNAUDITED) SECURITY EQUITY FUND - LARGE CAP GROWTH SERIES
NUMBER MARKET COMMON STOCKS OF SHARES VALUE - ----------------------------------------------- --------- ------------ ADVERTISING - 1.6% Omnicom Group, Inc. ............................. 5,800 $ 465,450 AEROSPACE & DEFENSE - 2.8% General Dynamics Corporation .................... 5,000 446,650 United Technologies Corporation ................. 4,200 362,460 ------------ 809,110 AIR FREIGHT & LOGISTICS - 1.9% FedEx Corporation ............................... 7,600 571,216 AIRLINES - 0.7% Southwest Airlines Company ...................... 14,800 210,308 APPLICATION SOFTWARE - 0.8% Intuit, Inc.* ................................... 5,500 246,840 BIOTECHNOLOGY - 3.3% Amgen, Inc.* .................................... 16,900 983,073 BREWERS - 1.5% Anheuser-Busch Companies, Inc. .................. 8,700 443,700 BROADCASTING & CABLE TV- 1.2% Comcast Corporation* ............................ 12,000 344,880 COMMUNICATIONS EQUIPMENT - 6.2% ADC Telecommunications, Inc.* ................... 112,500 326,250 Cisco Systems, Inc.* ............................ 50,800 1,194,816 Emulex Corporation* ............................. 5,700 121,353 Finisar Corporation* ............................ 22,100 48,178 Qualcomm, Inc. .................................. 1,800 119,556 ------------ 1,810,153 COMPUTER HARDWARE - 2.5% Dell, Inc.* ..................................... 16,700 561,454 International Business Machines Corporation ................................... 1,800 165,312 ------------ 726,766 CONSUMER FINANCE - 0.8% MBNA Corporation ................................ 8,100 223,803 DATA PROCESSING & OUTSOURCED SERVICE - 2.9% First Data Corporation .......................... 19,900 838,984 DEPARTMENT STORES - 1.2% Kohl's Corporation* ............................. 7,050 340,727 DRUG RETAIL - 1.0% CVS Corporation ................................. 8,300 292,990 ELECTRONIC MANUFACTURING SERVICES - 0.7% Molex, Inc. ..................................... 6,800 206,652 EXCHANGE TRADED FUNDS - 1.5% iShares Russell 1000 Growth Index Fund .................................... 9,300 436,821 GENERAL MERCHANDISE STORES - 1.2% Target Corporation .............................. 7,600 342,304 HEALTH CARE DISTRIBUTORS - 3.1% Cardinal Health, Inc. ........................... 13,100 902,590 HEALTH CARE EQUIPMENT - 1.8% Medtronic, Inc. ................................. 11,100 530,025 HOME IMPROVEMENT RETAIL - 3.3% Home Depot, Inc. ................................ 20,800 777,088 Lowe's Companies, Inc. .......................... 3,200 179,616 ------------ 956,704 HOTELS, RESORTS & CRUISE LINES - 1.2% Carnival Corporation ............................ 8,100 363,771 HOUSEHOLD PRODUCTS - 1.4% Colgate-Palmolive Company ....................... 3,900 214,890 Procter & Gamble Company ........................ 2,000 209,760 ------------ 424,650 HYPERMARKETS & SUPERCENTERS - 2.9% Wal-Mart Stores, Inc. ........................... 14,200 847,598 INDUSTRIAL CONGLOMERATES - 6.8% 3M Company ...................................... 2,900 237,423 General Electric Company ........................ 57,900 1,767,108 ------------ 2,004,531 INSURANCE BROKERS - 0.6% Marsh & McLennan Companies, Inc. ................ 4,000 185,200 INVESTMENT BANKING & BROKERAGE - 1.0% Goldman Sachs Group, Inc. ....................... 2,800 292,180 LIFE & HEALTH INSURANCE - 1.3% Aflac, Inc. ..................................... 9,500 381,330 MOTORCYCLE MANUFACTURERS - 1.8% Harley-Davidson, Inc. ........................... 10,200 544,068 MOVIES & ENTERTAINMENT - 2.9% AOL Time Warner, Inc.* .......................... 7,700 129,822 Viacom, Inc. (Cl. B) ............................ 18,700 733,227 ------------ 863,049 MULTI-LINE INSURANCE - 2.5% American International Group, Inc. .............. 10,200 727,770 OIL & GAS EQUIPMENT & SERVICES - 1.1% BJ Services Company* ............................ 7,200 311,544 OIL & GAS EXPLORATION & PRODUCTION - 0.7% Devon Energy Corporation ........................ 3,300 191,895 OTHER DIVERSIFIED FINANCIAL SERVICES - 1.0% Citigroup, Inc. ................................. 5,800 299,860 PERSONAL PRODUCTS - 0.8% Avon Products, Inc. ............................. 3,300 250,371 PHARMACEUTICALS - 13.7% Abbott Laboratories ............................. 10,500 431,550 Eli Lilly & Company ............................. 4,500 301,050 Johnson & Johnson ............................... 17,600 892,672 Pfizer, Inc. .................................... 61,000 2,138,050 Wyeth ........................................... 6,700 251,585 ------------ 4,014,907
28 See accompanying notes. SCHEDULE OF INVESTMENTS (CONTINUED) MARCH 31, 2004 (UNAUDITED) SECURITY EQUITY FUND - LARGE CAP GROWTH SERIES (CONTINUED)
PRINCIPAL AMOUNT OR NUMBER MARKET COMMON STOCKS (CONTINUED) OF SHARES VALUE - ----------------------------------------------- ----------- ------------ PROPERTY & CASUALTY INSURANCE - 0.9% Chubb Corporation ............................. 3,700 $ 257,298 SEMICONDUCTOR EQUIPMENT - 1.2% Applied Materials, Inc.* ...................... 15,900 339,942 SEMICONDUCTORS - 5.0% Analog Devices, Inc. .......................... 10,300 494,503 Intel Corporation ............................. 22,100 601,120 Texas Instruments, Inc. ....................... 13,200 385,704 ------------ 1,481,327 SOFT DRINKS - 4.1% Coca-Cola Company ............................. 7,300 367,190 Pepsico, Inc. ................................. 15,600 840,060 ------------ 1,207,250 SYSTEMS SOFTWARE - 5.2% Microsoft Corporation ......................... 50,100 1,250,997 Oracle Corporation* ........................... 11,500 138,115 Veritas Software Corporation* ................. 4,800 129,168 ------------ 1,518,280 THRIFTS & MORTGAGE FINANCE - 0.9% Fannie Mae .................................... 3,400 252,790 ------------ Total common stocks (cost $25,982,836) - 97.0% ................. 28,442,707 REPURCHASE AGREEMENT State Street, 0.25%, 04-01-04 (Collateralized by FFCB bond 2.00%, 11-19-04 with a value of $1,179,771 and a repurchase amount of $1,156,328) ....................... $ 1,156,320 1,156,320 ------------ Total repurchase agreement (cost $1,156,320) - 4.0% ................... 1,156,320 ------------ Total investments (cost $27,139,156) - 101.0% ................ 29,599,027 Liabilities, less cash & other assets - (1.0%) ............................ (285,804) ------------ Total net assets - 100.0% ................... $ 29,313,223 ============
The identified cost of investments owned at March 31, 2004 was the same for federal income tax and financial statement purposes. *Non-income producing security PERFORMANCE AVERAGE ANNUAL RETURNS AS OF MARCH 31, 2004
1 YEAR SINCE INCEPTION ------ ----------------- A Shares 24.29% (11.88%) (5-1-00) A Shares with sales charge 17.12% (13.20%) (5-1-00) B Shares 23.48% (12.63%) (5-1-00) B Shares with CDSC 18.48% (13.31%) (5-1-00) C Shares 23.59% (12.52%) (5-1-00) C Shares with CDSC 22.59% (12.52%) (5-1-00)
The performance data above represents past performance that is not predictive of future results. The investment return and principal value of an investment in the fund will fluctuate so that an investor's shares, when redeemed, may be worth more or less than their original cost. The figures above do not reflect deduction of the maximum front-end sales charge of 5.75% for Class A shares or the contingent deferred sales charge of 5% for Class B shares and 1% for Class C shares, as applicable, except where noted. The figures do not reflect the deduction of taxes that a shareholder would pay on distributions or redemption of fund shares. Such figures would be lower if the maximum sales charge and any applicable taxes were deducted. Fee waivers reduced expenses of the Fund and in the absence of such waiver, the performance quoted would be reduced. 29 See accompanying notes. This page left intentionally blank. 30 SECURITY EQUITY FUND MID CAP VALUE SERIES [SECURITY FUNDS LOGO] ADVISOR, SECURITY MANAGEMENT COMPANY, LLC 31 SCHEDULE OF INVESTMENTS MARCH 31, 2004 (UNAUDITED) SECURITY EQUITY FUND - MID CAP VALUE SERIES
PRINCIPAL AMOUNT OR NUMBER MARKET CONVERTIBLE BONDS OF SHARES VALUE - ----------------------------------------------- ----------- ----------- PHARMACEUTICALS - 1.3% Ligand Pharmaceuticals, 6.00% - 20072 ............................... $ 1,250,000 $ 4,167,188 TELECOMMUNICATIONS - 0.6% Ciena Corporation, 3.75% - 2008 ............... $ 2,250,000 2,081,250 ----------- Total convertible bonds (cost $2,885,930) - 1.9% ................... 6,248,438 PREFERRED STOCK DIVERSIFIED METALS & MINING - 0.1% Arch Coal, Inc., 5.00% - 2049 ................. 4,600 395,462 ----------- Total preferred stock (cost $230,000) - 0.1% ..................... 395,462 COMMON STOCKS AEROSPACE & DEFENSE - 0.6% Curtiss-Wright Corporation .................... 40,000 1,874,800 AGRICULTURAL PRODUCTS - 3.6% Archer-Daniels-Midland Company ................ 420,000 7,085,400 Corn Products International, Inc. ............. 116,000 4,640,000 ----------- 11,725,400 AIR FREIGHT & LOGISTICS - 0.8% Airnet Systems, Inc.* ......................... 168,000 829,920 Stonepath Group, Inc.* ........................ 480,000 1,862,400 ----------- 2,692,320 APPAREL RETAIL - 0.4% Wet Seal, Inc.* ............................... 154,000 1,270,500 APPLICATION SOFTWARE - 0.4% Plato Learning, Inc.* ......................... 30,200 304,718 Ulticom, Inc.* ................................ 97,000 995,220 ----------- 1,299,938 BIOTECHNOLOGY - 0.1% Serologicals Corporation* ..................... 21,300 434,520 BUILDING PRODUCTS - 0.0% Griffon Corporation* .......................... 7,500 162,000 CATALOG RETAIL - 2.9% Coldwater Creek, Inc.* ........................ 438,000 9,338,160 COMMUNICATIONS EQUIPMENT - 4.2% Adaptec, Inc.*(1) ............................. 312,600 2,738,376 Advanced Fibre Communications, Inc.* ....................... 222,000 4,890,660 Avanex Corporation* ........................... 1,112,400 4,805,568 Ciena Corporation*(1) ......................... 250,000 1,242,500 ----------- 13,677,104 CONSTRUCTION & ENGINEERING - 5.4% Chicago Bridge & Iron Company N.V. ............ 137,200 3,818,276 Dycom Industries, Inc.* ....................... 100,000 2,652,000 Quanta Services, Inc.* ........................ 413,800 2,929,704 Shaw Group, Inc.* ............................. 742,000 8,043,280 ----------- 17,443,260 DATA PROCESSING & OUTSOURCED SERVICES - 2.3% Computer Sciences Corporation* ................ 182,000 7,340,060 DIVERSIFIED COMMERCIAL SERVICES - 1.1% Angelica Corporation .......................... 99,300 2,267,019 FTI Consulting, Inc.* ......................... 80,000 1,332,800 ----------- ................................................ 3,599,819 DIVERSIFIED METALS & MINING - 4.6% Arch Coal, Inc. ............................... 185,100 5,810,289 Phelps Dodge Corporation* ..................... 50,000 4,083,000 Usec, Inc. .................................... 580,000 4,901,000 ----------- 14,794,289 ELECTRIC UTILITES - 3.8% Black Hills Corporation ....................... 91,400 2,912,918 KFX, Inc.* .................................... 910,500 9,460,095 ----------- 12,373,013 ELECTRICAL EQUIPMENT MANUFACTURERS - 2.2% Maxwell Technologies, Inc.* ................... 392,500 5,102,500 Powell Industries, Inc.* ...................... 105,300 1,870,128 ----------- 6,972,628 ELECTRONIC COMPONENTS & EQUIPMENT - 1.5% Electric City Corporation PIPE*(3,4) .......... 1,518,000 2,519,880 Preformed Line Products Company ............... 1,900 48,431 Thomas & Betts Corporation* ................... 100,000 2,182,000 ----------- 4,750,311 EMPLOYMENT SERVICES - 0.9% Labor Ready, Inc.* ............................ 226,000 3,055,520 ENVIRONMENTAL SERVICES - 1.2% Republic Services, Inc ........................ 59,000 1,597,130 TRC Companies, Inc.* .......................... 120,000 2,245,200 ----------- 3,842,330 EXCHANGE TRADED FUNDS - 5.7% iShares Russell 2000 Index Fund ............... 35,000 4,110,050 iShares Russell 2000 Value Index Fund ......... 28,500 4,879,200 iShares S&P MidCap 400/Barra Value Index Fund ............................ 42,000 4,851,000 iShares S&P MidCap 400 Index Fund ............. 39,000 4,703,400 ----------- 18,543,650
32 See accompanying notes. SCHEDULE OF INVESTMENTS (CONTINUED) MARCH 31, 2004 (UNAUDITED) SECURITY EQUITY FUND - MID CAP VALUE SERIES (CONTINUED)
NUMBER MARKET COMMON STOCKS (CONTINUED) OF SHARES VALUE - ----------------------------------------------- --------- ------------ FERTILIZERS & AGRICULTURAL CHEMICALS - 1.2% Potash Corporation of Saskatchewan, Inc ......................................... 45,000 $ 3,742,650 FOOTWEAR - 1.3% Brown Shoe Company, Inc. ...................... 115,000 4,189,450 HEALTH CARE FACILITIES - 1.1% Triad Hospitals, Inc.* ........................ 112,000 3,451,840 HEALTH CARE SERVICES - 0.5% NDCHealth Corporation ......................... 62,600 1,699,590 HOME FURNISHINGS - 1.9% La-Z-Boy, Inc. ................................ 100,000 2,176,000 Mohawk Industries, Inc.* ...................... 18,000 1,482,300 Stanley Furniture Company, Inc. ............... 63,000 2,446,290 ------------ 6,104,590 INDUSTRIAL CONGLOMERATES - 0.9% Alleghany Corporation* ........................ 11,526 2,850,380 INDUSTRIAL MACHINERY - 2.4% Capstone Turbine Corporation* ................. 1,350,000 3,334,500 Quixote Corporation ........................... 65,100 1,369,053 SPX Corporation ............................... 62,000 2,819,760 Valmont Industries, Inc. ...................... 12,900 257,742 ------------ 7,781,055 INSURANCE BROKERS - 1.5% Aon Corporation ............................... 154,300 4,306,513 Hub International, Ltd. ....................... 21,400 392,690 ------------ 4,699,203 INTEGRATED OIL & GAS - 2.3% Murphy Oil Corporation ........................ 116,000 7,304,520 INTERNET SOFTWARE & SERVICES - 0.0% S1 Corporation* ............................... 11,550 87,780 INVESTMENT BANKING & BROKERAGE - 1.1% American Capital Strategies, Ltd. ............. 106,600 3,543,384 IT CONSULTING & OTHER SERVICES - 2.6% Acxiom Corporation(1) ......................... 300,000 6,588,000 Keane, Inc.* .................................. 125,000 1,967,500 ------------ 8,555,500 MARINE - 0.5% Frontline, Ltd. ............................... 53,000 1,529,050 MULTI-LINE INSURANCE - 1.4% American Financial Group, Inc. ................ 155,000 4,623,650 MULTI-UTILITIES & UNREGULATED POWER - 1.9% Williams Companies, Inc. ...................... 630,000 6,029,100 OIL & GAS DRILLING - 3.7% Nabors Industries, Ltd.* ...................... 53,000 2,424,750 Pride International, Inc.* .................... 175,000 2,985,500 Transocean, Inc.* ............................. 235,000 6,554,150 ------------ 11,964,400 OIL & GAS EQUIPMENT & SERVICES - 1.5% Key Energy Services, Inc.* .................... 438,000 4,818,000 OIL & GAS EXPLORATION & PRODUCTION - 6.6% Burlington Resources, Inc. .................... 48,000 3,054,240 Denbury Resources, Inc.* ...................... 264,600 4,461,156 Devon Energy Corporation ...................... 70,770 4,115,275 Evergreen Resources, Inc.* .................... 130,000 4,465,500 Pioneer Natural Resources Company ............. 80,000 2,584,000 Unocal Corporation ............................ 75,000 2,796,000 ------------ 21,476,171 OTHER DIVERSIFIED FINANCIAL SERVICES - 1.8% Principal Financial Group, Inc. ............... 160,000 5,700,800 PACKAGED FOODS - 2.7% Hain Celestial Group, Inc.* ................... 110,000 2,429,900 Hormel Foods Corporation ...................... 220,000 6,452,600 ------------ 8,882,500 PAPER PACKAGING - 2.0% Bemis Company, Inc. ........................... 116,000 3,016,000 Sonoco Products Company ....................... 145,000 3,520,600 ------------ 6,536,600 PHARMACEUTICALS - 2.0% Hollis-Eden Pharmaceuticals, Inc.* ............ 192,403 1,856,689 Ligand Pharmaceuticals, Inc. (Cl.B)* ..................................... 226,800 4,558,680 ------------ 6,415,369 PROPERTY & CASUALTY INSURANCE - 2.2% W.R. Berkley Corporation ...................... 180,000 7,178,400 REGIONAL BANKS - 4.6% Corus Bankshares, Inc. ........................ 13,600 547,944 Iberiabank Corporation ........................ 20,100 1,182,885 M&T Bank Corporation .......................... 70,000 6,289,500 Mercantile Bankshares Corporation ............. 67,000 2,878,990 Wilmington Trust Corporation .................. 48,200 1,801,234 Zions Bankcorporation ......................... 38,000 2,173,600 ------------ 14,874,153 SEMICONDUCTORS - 1.1% IXYS Corporation* ............................. 282,000 2,650,800 MIPS Technologies, Inc.* ...................... 6,300 36,162 Monolithic System Technology, Inc.* ........................... 74,900 1,002,911 ------------ 3,689,873 SPECIALTY CHEMICALS - 1.4% H.B. Fuller Company ........................... 100,000 2,844,000 Material Sciences Corporation* ................ 85,700 942,700 Minerals Technologies, Inc. ................... 15,000 856,500 ------------ 4,643,200 SPECIALTY STORES - 1.2% Linens 'n Things, Inc.* ....................... 110,000 3,895,100
33 See accompanying notes. SCHEDULE OF INVESTMENTS (CONTINUED) MARCH 31, 2004 (UNAUDITED) SECURITY EQUITY FUND - MID CAP VALUE SERIES (CONTINUED)
PRINCIPAL AMOUNT OR NUMBER MARKET COMMON STOCKS (CONTINUED) OF SHARES VALUE - ----------------------------------------------- ----------- ------------ TIRES & RUBBER - 0.0% Bandag, Inc. .................................. 1,400 $ 69,678 TRUCKING - 1.0% SCS Transportation, Inc.* ..................... 11,000 239,800 Werner Enterprises, Inc. ...................... 150,000 2,842,500 ------------ 3,082,300 ------------ Total common stocks (cost $231,778,751) - 94.1% ................ 304,607,908 WARRANTS Electric City Corporation ..................... 442,750 426,366 KFX, Inc. ..................................... 152,000 1,197,384 ------------ Total warrants (cost $578,150) - 0.5% ....... 1,623,750 U.S. GOVERNMENT AGENCIES Federal Home Loan Bank, 0.97%, 04-07-04 ............................. $ 2,000,000 1,999,677 Federal Home Loan Mortgage Corporation, 0.98%, 04-27-04 . .............. $ 1,500,000 1,498,938 Federal National Mortgage Corporation, 1.00%, 04-07-04 . .............. $ 2,000,000 1,999,667 ------------ Total U.S. government agencies (cost $5,498,282) - 1.7% ................... 5,498,282 ------------ Total investments (cost $240,971,113) - 98.3% ................ 318,373,840 Cash & other assets, less liabilities - 1.7%. 5,497,327 ------------ Total net assets - 100.0% ................... $323,871,167 ============
The identified cost of investments owned at March 31, 2004 was the same for federal income tax and financial statement purposes. *Non-income producing security (1)Security is segregated as collateral for written option contracts. (2)Security is a 144A Series. The total market value of 144A securities is $4,167,188 (cost $1,250,000), or 1.3% of total net assets. (3)PIPE (Private Investment in Public Equity) - Stock issued by a company in the secondary market as a means of raising capital more quickly and less expensively than through registration in a secondary public offering. (4)Security is a restricted security. The total market value of restricted securities is $2,519,880 (cost $2,621,436), or 0.78% of total net assets. PERFORMANCE AVERAGE ANNUAL RETURNS AS OF MARCH 31, 2004
1 YEAR 5 YEARS SINCE INCEPTION ------ ------- --------------- A Shares 67.41% 19.38% 20.30% (5-1-97) A Shares with sales charge 57.80% 17.97% 19.27% (5-1-97) B Shares 66.15% 18.29% 19.18% (5-1-97) B Shares with CDSC 61.15% 18.08% 19.18% (5-1-97) C Shares 66.12% 18.27% 17.34% (1-29-99) C Shares with CDSC 65.12% 18.27% 17.34% (1-29-99)
The performance data above represents past performance that is not predictive of future results. The investment return and principal value of an investment in the fund will fluctuate so that an investor's shares, when redeemed, may be worth more or less than their original cost. The figures above do not reflect deduction of the maximum front-end sales charge of 5.75% for Class A shares or the contingent deferred sales charge of 5% for Class B shares and 1% for Class C shares, as applicable, except where noted. The figures do not reflect the deduction of taxes that a shareholder would pay on distributions or redemption of fund shares. Such figures would be lower if the maximum sales charge and any applicable taxes were deducted. 34 See accompanying notes. SECURITY EQUITY FUND SELECT 25(R) SERIES [SECURITY FUNDS LOGO] ADVISOR, SECURITY MANAGEMENT COMPANY, LLC 35 SCHEDULE OF INVESTMENTS MARCH 31, 2004 (UNAUDITED) SECURITY EQUITY FUND - SELECT 25(R) SERIES
NUMBER MARKET COMMON STOCKS OF SHARES VALUE - --------------------------------------------- --------- ----------- ADVERTISING - 3.7% Omnicom Group, Inc. .............................. 12,000 $ 963,000 AEROSPACE & DEFENSE - 3.6% L-3 Communications Holdings, Inc. ................ 16,000 951,680 AIR FREIGHT & LOGISTICS - 4.0% FedEx Corporation ................................ 13,900 1,044,724 BIOTECHNOLOGY - 3.6% Amgen, Inc.* ..................................... 16,100 936,537 BREWERS - 3.5% Anheuser-Busch Companies, Inc. ................... 18,000 918,000 COMMUNICATIONS EQUIPMENT - 6.8% ADC Telecommunications, Inc.* .................... 292,800 849,120 Cisco Systems, Inc.* ............................. 40,000 940,800 ----------- 1,789,920 CONSTRUCTION & ENGINEERING - 2.8% Shaw Group, Inc.* ................................ 68,000 737,120 DATA PROCESSING & OUTSOURCED SERVICES - 3.2% First Data Corporation ........................... 20,000 843,200 DEPARTMENT STORES - 3.3% Kohl's Corporation* .............................. 18,000 869,940 ELECTRIC UTILITIES - 2.3% KFX, Inc.* ....................................... 57,000 592,230 HEALTH CARE DISTRIBUTORS - 3.9% Cardinal Health, Inc. ............................ 15,000 1,033,500 HEALTH CARE EQUIPMENT - 3.3% Medtronic, Inc. .................................. 18,000 859,500 HOME IMPROVEMENT RETAIL - 2.1% Home Depot, Inc. ................................. 15,000 560,400 HOTELS, RESORTS & CRUISE LINES - 3.2% Carnival Corporation ............................. 19,000 853,290 HYPERMARKETS & SUPERCENTERS - 3.6% Wal-Mart Stores, Inc. ............................ 16,000 955,040 INDUSTRIAL CONGLOMERATES - 2.2% 3M Company ....................................... 7,000 573,090 INDUSTRIAL GASES - 2.8% Praxair, Inc. .................................... 20,000 742,400 LIFE & HEALTH INSURANCE - 3.8% Aflac, Inc. ...................................... 25,000 1,003,500 MOTORCYCLE MANUFACTURERS - 3.3% Harley-Davidson, Inc. ............................ 16,000 853,440 MOVIES & ENTERTAINMENT - 5.9% Time Warner, Inc.* ............................... 30,600 515,916 Viacom, Inc. (Cl.B) .............................. 26,100 1,023,381 ----------- 1,539,297 MULTI-LINE INSURANCE - 3.8% American International Group, Inc. ............... 14,000 998,900 MULTI-UTILITIES & UNREGULATED POWER - 3.0% Williams Companies, Inc. ......................... 82,000 784,740 OIL & GAS EQUIPMENT & SERVICES - 4.0% BJ Services Company* ............................. 24,000 1,038,480 OTHER DIVERSIFIED FINANCIAL SERVICES - 4.2% Citigroup, Inc. .................................. 21,300 1,101,210 PHARMACEUTICALS - 6.2% Johnson & Johnson ................................ 15,000 760,800 Pfizer, Inc. ..................................... 25,000 876,250 ----------- 1,637,050 SEMICONDUCTORS - 3.7% Analog Devices, Inc. ............................. 20,000 960,200 SOFT DRINKS - 4.1% Pepsico, Inc. .................................... 20,000 1,077,000 ----------- Total common stocks (cost $23,999,050) - 99.9% ..................... 26,217,388 REPURCHASE AGREEMENT United Missouri Bank, 0.65%, 04-01-04 (Collateralized by FNMA bond, 04-01-04 with a value of $34,000 and a repurchase amount of $33,001) .................. $ 33,000 33,000 ----------- Total repurchase agreement (cost $33,000) - 0.1% ......................... 33,000 ----------- Total investments (cost $24,032,050) - 100.0% .. 26,250,388 Liabilities, less cash & other assets - 0.0% ... (13,274) ----------- Total net assets - 100.0% ...................... $26,237,114 ===========
The identified cost of investments owned at March 31, 2004 was the same for federal income tax and financial statement purposes. *Non-income producing security 36 See accompanying notes. SCHEDULE OF INVESTMENTS (CONTINUED) MARCH 31, 2004 (UNAUDITED) SECURITY EQUITY FUND - SELECT 25(R) SERIES (CONTINUED) PERFORMANCE AVERAGE ANNUAL RETURNS AS OF MARCH 31, 2004 1 YEAR 5 YEARS SINCE INCEPTION ------ ------- ----------------- A Shares 25.04% (4.67%) (3.79%) (1-29-99) A Shares with sales charge 17.84% (5.78%) (4.88%) (1-29-99) B Shares 24.21% (5.33%) (4.45%) (1-29-99) B Shares with CDSC 19.21% (5.71%) (4.45%) (1-29-99) C Shares 24.14% (5.30%) (4.41%) (1-29-99) C Shares with CDSC 23.14% (5.30%) (4.41%) (1-29-99)
The performance data above represents past performance that is not predictive of future results. The investment return and principal value of an investment in the fund will fluctuate so that an investor's shares, when redeemed, may be worth more or less than their original cost. The figures above do not reflect deduction of the maximum front-end sales charge of 5.75% for Class A shares or the contingent deferred sales charge of 5% for Class B shares and 1% for Class C shares, as applicable, except where noted. The figures do not reflect the deduction of taxes that a shareholder would pay on distributions or redemption of fund shares. Such figures would be lower if the maximum sales charge and any applicable taxes were deducted. 37 See accompanying notes. This page left intentionally blank. 38 SECURITY EQUITY FUND SMALL CAP GROWTH SERIES RS INVESTMENTS SUBADVISOR, RS INVESTMENTS 39 SCHEDULE OF INVESTMENTS MARCH 31, 2004 (UNAUDITED) SECURITY EQUITY FUND - SMALL CAP GROWTH SERIES
NUMBER MARKET COMMON STOCKS OF SHARES VALUE - -------------------------------------------- --------- ---------- AEROSPACE & DEFENSE - 1.6% Applied Signal Technologies, Inc. .......... 8,600 $ 234,952 EDO Corporation ............................ 11,300 272,104 ---------- 507,056 AIR FREIGHT & LOGISTICS - 1.9% Dynamex, Inc.* ............................. 24,800 349,184 Stonepath Group, Inc.* ..................... 57,700 223,876 ---------- 573,060 AIRLINES - 0.8% Pinnacle Airlines Corporation* ............. 19,150 254,695 APPAREL RETAIL - 2.7% Casual Male Retail Group, Inc.* ............ 27,600 285,384 Charlotte Russe Holding, Inc.* ............. 15,900 290,970 Hot Topic, Inc.* ........................... 10,350 273,757 ---------- 850,111 APPAREL, ACCESSORIES & LUXURY GOODS - 4.0% Ashworth, Inc.* ............................ 33,650 292,755 Guess?, Inc.* .............................. 15,600 281,268 Oxford Industries, Inc. .................... 6,500 300,235 Warnaco Group, Inc.* ....................... 17,800 357,602 ---------- 1,231,860 APPLICATION SOFTWARE - 0.7% Synplicity, Inc.* .......................... 31,200 224,640 BIOTECHNOLOGY - 1.6% Alexion Pharmaceuticals, Inc.* ............. 13,050 310,068 Genome Therapeutics Corporation* ........... 34,000 191,420 ---------- 501,488 CASINOS & GAMING - 2.6% Multimedia Games, Inc.* .................... 9,960 246,410 Scientific Games Corporation* .............. 29,800 557,856 ---------- 804,266 COMMUNICATIONS EQUIPMENT - 1.9% Ixia* ...................................... 23,100 249,942 Netsolve, Inc.* ............................ 21,000 217,350 Telular Corporation* ....................... 8,800 127,160 ---------- 594,452 COMPUTER STORAGE & PERIPHERALS - 1.6% M-Systems Flash Dick Pioneers Ltd.* ........ 15,750 320,985 Synaptics, Inc.* ........................... 9,900 173,646 ---------- 494,631 CONSUMER FINANCE - 2.6% Ezcorp, Inc.* .............................. 26,200 269,336 Saxon Capital, Inc.* ....................... 10,900 309,669 World Acceptance Corporation* .............. 11,450 223,390 ---------- 802,395 DATA PROCESSING & OUTSOURCED SERVICE - 0.7% Per-Se Technologies, Inc.* ................. 18,300 204,960 DIVERSIFIED COMMERCIAL SERVICES - 2.2% Marlin Business Services, Inc.* ............ 17,050 286,951 Sylvan Learning Systems, Inc.* ............. 11,550 405,521 ---------- 692,472 ELECTRONIC EQUIPMENT MANUFACTURERS - 0.6% Sypris Solutions, Inc. ..................... 11,450 194,650 EMPLOYMENT SERVICES - 0.9% Kforce, Inc.* .............................. 29,200 277,400 FOOD RETAIL - 0.5% Wild Oats Market, Inc.* .................... 12,100 143,143 HEALTH CARE EQUIPMENT - 3.5% Dade Behring Hldgs, Inc.* .................. 5,600 249,032 I-Flow Corporation* ........................ 14,050 197,824 Intuitive Surgical, Inc.* .................. 17,300 294,100 North American Scientific, Inc.* ........... 22,700 227,000 Thermogenesis Corporation* ................. 30,400 120,080 ---------- 1,088,036 HEALTH CARE FACILITIES - 2.3% Kindred Healthcare, Inc.* .................. 7,100 357,130 Labone, Inc.* .............................. 12,050 366,320 ---------- 723,450 HEALTH CARE SERVICES - 5.3% Allscripts Healthcare Solutions, Inc.* ..... 33,700 326,890 America Service Group, Inc.* ............... 9,100 312,130 Inveresk Research Group, Inc.* ............. 8,800 250,096 Matria Healthcare, Inc.* ................... 3,600 91,152 Merge Technologies, Inc.* .................. 19,700 288,211 Providence Service Corporation* ............ 21,450 382,239 ---------- 1,650,718 HEALTH CARE SUPPLIES - 1.0% Tripath Imaging, Inc.* ..................... 32,600 298,616 HOME FURNISHINGS - 1.1% Kirkland's, Inc.* .......................... 20,900 341,297 INTERNET SOFTWARE & SERVICES - 9.8% Cnet Networks, Inc.* ....................... 32,300 333,659 Digitas, Inc.* ............................. 31,050 319,504 Embarcadero Technologies, Inc.* ............ 19,700 252,948 Equinix, Inc.* ............................. 9,400 340,383 Infospace, Inc.* ........................... 9,450 367,322 Keynote Systems, Inc.* ..................... 24,500 315,315 Radware Ltd.* .............................. 11,100 294,816 Tumbleweed Communications Corporation* ..... 28,850 202,238 United Online, Inc.* ....................... 17,000 283,220 Valueclick, Inc.* .......................... 32,100 346,680 ---------- 3,056,085
40 See accompanying notes. SCHEDULE OF INVESTMENTS (CONTINUED) MARCH 31, 2004 (UNAUDITED) SECURITY EQUITY FUND - SMALL CAP GROWTH SERIES (CONTINUED)
NUMBER MARKET COMMON STOCKS (CONTINUED) OF SHARES VALUE - -------------------------------------------- --------- ---------- IT CONSULTING & OTHER SERVICES - 2.0% Lionbridge Technologies, Inc.* ............. 34,200 $ 332,766 Sapient Corporation* ....................... 45,500 274,365 ---------- 607,131 LEISURE PRODUCTS - 1.1% K2, Inc.* .................................. 20,650 331,020 MANAGED HEALTH CARE - 1.6% American Medical Security Group, Inc.* ..... 18,900 504,819 MOVIES & ENTERTAINMENT - 1.4% Image Entertainment, Inc.* ................. 65,300 215,490 NTN Communications, Inc.* .................. 72,750 210,975 ---------- 426,465 OIL & GAS DRILLING - 2.0% Grey Wolf, Inc.* ........................... 74,150 306,981 Unit Corporation* .......................... 11,900 326,298 ---------- 633,279 OIL & GAS EQUIPMENT & SERVICES - 3.2% Cal Dive International, Inc.* .............. 12,700 328,041 Oil States International, Inc.* ............ 22,750 305,760 Superior Energy Services, Inc.* ............ 34,600 348,768 ---------- 982,569 PACKAGED FOODS & MEATS - 1.0% Peets Coffee & Tea, Inc.* .................. 15,000 319,500 PHARMACEUTICALS - 5.9% Atherogenics, Inc.* ........................ 10,450 238,991 Bradley Pharmaceuticals, Inc.* ............. 11,000 276,980 Corgentech, Inc.* .......................... 10,200 191,760 Discovery Labratories, Inc.* ............... 18,200 221,858 Durect Corporation* ........................ 62,600 212,840 Penwest Pharmaceuticals, Company* .......... 12,250 178,973 Pozen, Inc.* ............................... 16,850 232,867 Salix Pharmaceuticals, Ltd.* ............... 9,920 287,878 ---------- 1,842,147 PROPERTY & CASUALTY INSURANCE - 2.4% Infinity Property & Casualty Corporation ... 13,350 419,591 Proassurance Corporation* .................. 8,850 309,750 ---------- 729,341 REGIONAL BANKS - 1.3% First Community Bancorp .................... 1,250 46,737 Nara Bancorp, Inc. ......................... 7,550 223,631 Privatebancorp, Inc. ....................... 2,830 145,971 ---------- 416,339 REINSURANCE - 1.0% Scottish Reinsurance Group, Ltd. ........... 13,350 322,937 RESTAURANTS - 1.9% Buffalo Wild Wings, Inc.* .................. 10,300 294,889 Rare Hospitality International, Inc.* ...... 10,800 299,700 ---------- 594,589 SEMICONDUCTOR EQUIPMENT - 2.8% Genus, Inc.* ............................... 57,450 217,161 Logicvision, Inc.* ......................... 49,500 207,405 Mykrolis Corporation* ...................... 16,300 232,438 Ultratech, Inc.* ........................... 9,250 215,617 ---------- 872,621 SEMICONDUCTORS - 7.5% Artisan Components, Inc.* .................. 11,400 254,106 Chippac, Inc.* ............................. 34,800 275,268 Exar Corporation* .......................... 15,150 280,275 O2Micro International Ltd.* ................ 20,800 358,384 PLX Technology, Inc.* ...................... 32,850 353,795 Power Integrations, Inc.* .................. 8,100 237,573 SRS Labs, Inc.* ............................ 28,500 173,280 Semtech Corporation* ....................... 3,100 70,773 Trident Microsystems, Inc.* ................ 5,800 92,510 Zoran Corporation* ......................... 13,600 236,096 ---------- 2,332,060 SPECIALTY STORES - 4.8% Aaron Rents, Inc. .......................... 16,050 399,484 Cost Plus, Inc.* ........................... 6,250 260,938 Guitar Center, Inc.* ....................... 13,100 486,534 TBC Corporation* ........................... 11,950 350,972 ---------- 1,497,928 STEEL - 1.0% Graftech International, Ltd.* .............. 20,200 301,990 SYSTEMS SOFTWARE - 1.7% Citadel Security Software, Inc.* ........... 51,100 244,769 Clicksoftware Company* ..................... 68,100 271,038 ---------- 515,807 THRIFTS & MORTGAGE FINANCE - 1.0% Franklin Bank Corporation* ................. 15,950 296,511 TRUCKING - 2.0% Old Dominion Freight Line, Inc.* ........... 9,900 333,630 Vitran Corporation, Inc.* .................. 20,150 292,175 ---------- 625,805 ---------- Total common stocks (cost $22,999,676) - 95.5% 29,662,339
41 See accompanying notes. SCHEDULE OF INVESTMENTS (CONTINUED) MARCH 31, 2004 (UNAUDITED) SECURITY EQUITY FUND - SMALL CAP GROWTH SERIES (CONTINUED)
PRINCIPAL MARKET REPURCHASE AGREEMENT AMOUNT VALUE - -------------------------------------------------- ---------- ----------- United Missouri Bank, 0.65%, 04-01-04 (Collateralized by FNMA bond, 04-01-04 with a value of $1,481,000 and a repurchase amount of $1,451,025)............ $1,451,000 $ 1,451,000 ----------- Total repurchase agreement (cost $1,451,000) - 4.7%......................... 1,451,000 ----------- Total investments (cost $24,450,676) - 100.2%...................... 31,113,339 Liabilities, less cash & other assets - (0.2%).... (42,274) ----------- Total net assets - 100.0%......................... $31,071,065 ===========
The identified cost of investments owned at March 31, 2004 was the same for federal income tax and financial statement purposes. *Non-income producing security PERFORMANCE AVERAGE ANNUAL RETURNS AS OF MARCH 31, 2004
1 YEAR 5 YEARS SINCE INCEPTION ------ ------- ----------------- A Shares 75.22% 7.61% 6.84% (10-15-97) A Shares with sales charge 65.15% 6.34% 5.86% (10-15-97) B Shares 74.02% 6.66% 5.83% (10-15-97) B Shares with CDSC 69.02% 6.34% 5.83% (10-15-97) C Shares 73.98% 6.68% 5.42% (1-29-99) C Shares with CDSC 72.98% 6.68% 5.42% (1-29-99)
The performance data above represents past performance that is not predictive of future results. The investment return and principal value of an investment in the fund will fluctuate so that an investor's shares, when redeemed, may be worth more or less than their original cost. The figures above do not reflect deduction of the maximum front-end sales charge of 5.75% for Class A shares or the contingent deferred sales charge of 5% for Class B shares and 1% for Class C shares, as applicable, except where noted. The figures do not reflect the deduction of taxes that a shareholder would pay on distributions or redemption of fund shares. Such figures would be lower if the maximum sales charge and any applicable taxes were deducted. Fee waivers reduced expenses for the Fund and in the absence of such waiver, the performance quoted would be reduced. 42 See accompanying notes. SECURITY EQUITY FUND SOCIAL AWARENESS SERIES [SECURITY FUNDS LOGO] ADVISOR, SECURITY MANAGEMENT COMPANY, LLC 43 SCHEDULE OF INVESTMENTS MARCH 31, 2004 (UNAUDITED) SECURITY EQUITY FUND - SOCIAL AWARENESS SERIES
NUMBER MARKET COMMON STOCKS OF SHARES VALUE - -------------------------------------------- --------- ---------- ADVERTISING - 1.9% Omnicom Group, Inc. ........................ 4,400 $ 353,100 AIR FREIGHT & LOGISTICS - 2.1% FedEx Corporation .......................... 5,200 390,832 AIRLINES - 0.6% Southwest Airlines Company ................. 7,300 103,733 APPLICATION SOFTWARE - 0.7% Intuit, Inc.* .............................. 2,900 130,152 ASSET MANAGEMENT & CUSTODY BANKS - 0.8% Bank of New York Company, Inc. ............. 4,700 148,050 BIOTECHNOLOGY - 3.0% Amgen, Inc.* ............................... 9,500 552,615 BROADCASTING & CABLE TV - 2.0% Comcast Corporation* ....................... 12,737 366,061 COMMUNICATIONS EQUIPMENT - 6.2% ADC Telecommunications, Inc.* .............. 77,500 224,750 Cisco Systems, Inc.* ....................... 33,300 783,216 Qualcomm, Inc. ............................. 1,900 126,198 ---------- 1,134,164 COMPUTER HARDWARE - 2.2% Dell Computer Corporation* ................. 11,700 393,354 CONSUMER FINANCE - 3.5% American Express Company ................... 6,200 321,470 MBNA Corporation ........................... 11,900 328,797 ---------- 650,267 DEPARTMENT STORES - 1.3% Kohl's Corporation* ........................ 4,800 231,984 DIVERSIFIED BANKS - 4.7% Bank of America Corporation ................ 5,000 404,900 Wells Fargo & Company ...................... 8,200 464,694 ---------- 869,594 DIVERSIFIED CAPITAL MARKETS - 1.2% J.P. Morgan Chase & Company ................ 5,300 222,335 DRUG RETAIL - 1.1% CVS Corporation ............................ 5,900 208,270 ELECTRONIC MANUFACTURING SERVICES - 1.0% Molex, Inc. ................................ 6,100 185,379 GENERAL MERCHANDISE STORES - 1.9% Target Corporation ......................... 7,900 355,816 HEALTH CARE DISTRIBUTORS - 2.5% Cardinal Health, Inc. ...................... 6,612 455,567 HEALTH CARE EQUIPMENT - 2.3% Medtronic, Inc. ............................ 9,000 429,750 HOME IMPROVEMENT RETAIL - 3.3% Home Depot, Inc. ........................... 12,600 470,736 Lowe's Companies, Inc. ..................... 2,300 129,099 ---------- 599,835 HOUSEHOLD PRODUCTS - 4.9% Colgate-Palmolive Company .................. 5,300 292,030 Procter & Gamble Company ................... 5,700 597,816 ---------- 889,846 INDUSTRIAL CONGLOMERATES - 1.4% 3M Company ................................. 3,200 261,984 INDUSTRIAL GASES - 1.5% Praxair, Inc. .............................. 7,400 274,688 INSURANCE BROKERS - 0.8% Marsh & McLennan Companies, Inc. ........... 3,000 138,900 INTEGRATED TELECOMMUNICATION SERVICES - 3.8% SBC Communications, Inc. ................... 10,948 268,664 Verizon Communications, Inc. ............... 11,500 420,210 ---------- 688,874 INVESTMENT BANKING & BROKERAGE - 1.8% Goldman Sachs Group, Inc. .................. 1,800 187,830 Merrill Lynch & Company, Inc. .............. 2,500 148,900 ---------- 336,730 LIFE & HEALTH INSURANCE - 1.5% Aflac, Inc. ................................ 6,700 268,938 MOTORCYCLE MANUFACTURERS - 2.0% Harley-Davidson, Inc. ...................... 6,700 357,378 MOVIES & ENTERTAINMENT - 3.9% Time Warner, Inc.* ......................... 18,500 311,910 Viacom, Inc. (Cl.B) ........................ 10,300 403,863 ---------- 715,773 MULTI-LINE INSURANCE - 4.9% American International Group, Inc. ......... 12,654 902,863 OIL & GAS EQUIPMENT & SERVICES - 1.2% BJ Services Company* ....................... 5,100 220,677 OIL & GAS EXPLORATION & PRODUCTION - 0.8% Devon Energy Corporation ................... 2,400 139,560 PERSONAL PRODUCTS - 0.6% Avon Products, Inc. ........................ 1,400 106,218 PHARMACEUTICALS - 5.5% Johnson & Johnson .......................... 13,204 669,707 Merck & Company, Inc. ...................... 7,600 335,844 ---------- 1,005,551
44 See accompanying notes. SCHEDULE OF INVESTMENTS (CONTINUED) MARCH 31, 2004 (UNAUDITED) SECURITY EQUITY FUND - SOCIAL AWARENESS SERIES (CONTINUED)
PRINCIPAL AMOUNT OR NUMBER MARKET COMMON STOCKS (CONTINUED) OF SHARES VALUE - -------------------------------------------- --------- ----------- PROPERTY & CASUALTY INSURANCE - 2.4% Chubb Corporation .......................... 6,400 $ 445,056 SEMICONDUCTOR EQUIPMENT - 0.7% Applied Materials, Inc.* ................... 6,200 132,556 SEMICONDUCTORS - 4.6% Analog Devices, Inc. ....................... 4,500 216,045 Intel Corporation .......................... 15,800 429,760 Texas Instruments, Inc. .................... 6,900 201,618 ----------- 847,423 SOFT DRINKS - 5.6% Coca-Cola Company .......................... 9,300 467,790 Pepsico, Inc. .............................. 10,300 554,655 ----------- 1,022,445 SYSTEMS SOFTWARE - 5.7% Microsoft Corporation ...................... 38,900 971,333 Veritas Software Corporation* .............. 3,000 80,730 ----------- 1,052,063 THRIFTS & MORTGAGE FINANCE -0.8% Fannie Mae ................................. 2,000 148,700 ----------- Total common stocks (cost $18,054,419) - 96.7% ............... 17,737,081 REPURCHASE AGREEMENT United Missouri Bank, 0.65%, 04-01-04 (Collateralized by FNMA bond, 04-01-04, with a value of $624,000 and a repurchase amount of $611,009) ....................... $ 611,000 611,000 ----------- Total repurchase agreement (cost $611,000) - 3.4% ................... 611,000 ----------- Total investments (cost $18,665,419) - 100.1% .............. 18,348,081 Liabilities, less cash & other assets - (0.1%) (12,678) ----------- Total net assets - 100.0% $18,335,403 ===========
The identified cost of investments owned at March 31, 2004 was the same fo federal income tax and financial statement purposes. *Non-income producing security PERFORMANCE AVERAGE ANNUAL RETURNS AS OF MARCH 31, 2004
1 YEAR 5 YEARS SINCE INCEPTION ------ ------- ------------------ A Shares 26.49% (3.59%) 4.31% (11-1-96) A Shares with sales charge 19.22% (4.73%) 3.48% (11-1-96) B Shares 25.54% (4.52%) 3.27% (11-1-96) B Shares with CDSC 20.54% (4.90%) 3.27% (11-1-96) C Shares 25.58% (4.53%) (4.61%) (1-29-99) C Shares with CDSC 24.58% (4.53%) (4.61%) (1-29-99)
The performance data above represents past performance that is not predictive of future results. The investment return and principal value of an investment in the fund will fluctuate so that an investor's shares, when redeemed, may be worth more or less than their original cost. The figures above do not reflect deduction of the maximum front-end sales charge of 5.75% for Class A shares or the contingent deferred sales charge of 5% for Class B shares and 1% for Class C shares, as applicable, except where noted. The figures do not reflect the deduction of taxes that a shareholder would pay on distributions or redemption of fund shares. Such figures would be lower if the maximum sales charge and any applicable taxes were deducted. Fee waivers reduced expenses of the Fund and in the absence of such waiver, the performance quoted would be reduced. 45 See accompanying notes. This page left intentionally blank. 46 SECURITY LARGE CAP VALUE FUND YOU, YOUR ADVISOR AND [DREYFUS LOGO] SUBADVISOR, THE DREYFUS CORPORATION 47 SCHEDULE OF INVESTMENTS MARCH 31, 2004 (UNAUDITED) SECURITY LARGE CAP VALUE FUND
PRINCIPAL AMOUNT OR NUMBER MARKET CORPORATE BONDS OF SHARES VALUE - --------------- --------- ----- HEALTH CARE - 0.0% Alderwoods Group, Inc., 12.25% - 2009 ................................... $ 10,200 $ 11,424 Multicare Companies, Inc., 0.00% - 2007*(2) ................................ $ 200,000 - ------------ 11,424 REFINING - 0.2% Crown Central Petroleum, 10.875% - 2005 .................................. $ 200,000 138,000 SERVICES - 0.0% American Eco Corporation, 9.625% - 2008*(1) ............................... $ 125,000 12 ------------ Total corporate bonds (cost $424,918) - 0.2% ......................... 149,436 PREFERRED STOCK MOVIES & ENTERTAINMENT - 1.7% News Corporation, Ltd. ADR ........................ 36,700 1,163,757 ------------ Total preferred stock (cost $882,830) - 1.7% ......................... 1,163,757 COMMON STOCKS ADVERTISING - 1.5% Interpublic Group of Companies, Inc.* ........................................... 22,000 338,360 Omnicom Group, Inc. ............................... 8,700 698,175 ------------ 1,036,535 AEROSPACE & DEFENSE - 4.7% Boeing Corporation ................................ 16,100 661,227 Rockwell Collins, Inc. ............................ 16,100 508,921 United Technologies Corporation 23,900 2,062,570 ------------ 3,232,718 ALUMINUM - 1.2% Alcoa, Inc. ....................................... 23,200 804,808 APPAREL RETAIL - 2.5% Abercrombie & Fitch Company ....................... 28,700 971,208 Limited Brands .................................... 38,400 768,000 ------------ 1,739,208 APPAREL, ACCESSORIES & LUXURY GOODS - 1.1% Jones Apparel Group, Inc. ......................... 20,300 733,845 BROADCASTING & CABLE TV- 2.7% Clear Channel Communications, Inc.* ........................................... 16,800 711,480 Liberty Media Corporation* ........................ 109,500 1,199,025 ------------ 1,910,505 COMMUNICATIONS EQUIPMENT - 5.5% Comverse Technology, Inc.* ........................ 50,100 908,814 Nokia Oyj ADR ..................................... 90,600 1,837,368 Telefonaktiebolaget LM Ericsson ADR* ................................... 24,600 682,650 Tellabs, Inc.* .................................... 41,300 356,419 ------------ 3,785,251 COMPUTER HARDWARE - 2.0% International Business Machines Corporation ..................................... 8,900 817,376 NCR Corporation* .................................. 12,400 546,344 ------------ 1,363,720 CONSTRUCTION & FARM MACHINERY - 0.7% Deer & Company .................................... 6,700 464,377 CONSUMER ELECTRONICS - 1.9% Koninklijke (Royal) Philips Electronics N.V. ADR ........................................ 44,500 1,289,610 CONSUMER FINANCE - 0.9% American Express Company .......................... 12,600 653,310 DATA PROCESSING & OUTSOURCED SERVICE - 3.4% Automatic Data Processing, Inc. ................... 25,700 1,079,400 DST Systems, Inc.* ................................ 13,200 598,620 Sungard Data Systems, Inc.* ....................... 23,600 646,640 ------------ 2,324,660 DIVERSIFIED BANKS - 6.5% Bank of America Corporation ....................... 12,300 996,054 Comerica, Inc. .................................... 6,800 369,376 Fleetboston Financial Corporation 32,100 1,441,290 U.S. Bancorp ...................................... 37,300 1,031,345 Wachovia Corporation .............................. 14,800 695,600 ------------ 4,533,665 DIVERSIFIED CAPITAL MARKETS - 3.2% J.P. Morgan Chase & Company ....................... 52,900 2,219,155 ELECTRICAL COMPONENTS & EQUIPMENT - 1.0% Emerson Electric Company .......................... 11,800 707,056 FOOD RETAIL - 1.2% Kroger Company* ................................... 17,900 297,856 Safeway, Inc* ..................................... 27,500 565,950 ------------ 863,806 HEALTH CARE EQUIPMENT - 0.8% Boston Scientific Corporation* .................... 12,500 529,750 HEALTH CARE FACILITIES - 0.0% Genesis Healthcare Corporation* 113 2,752
48 See accompanying notes. SCHEDULE OF INVESTMENTS (CONTINUED) MARCH 31, 2004 (UNAUDITED) SECURITY LARGE CAP VALUE FUND (CONTINUED)
NUMBER MARKET COMMON STOCKS (CONTINUED) OF SHARES VALUE - ------------------------- --------- ----- HEALTH CARE SERVICES - 0.0% Neighborcare, Inc. ................................ 227 $ 5,505 HOUSEHOLD APPLIANCES - 0.6% Black & Decker Corporation ........................ 7,300 415,662 INDUSTRIAL MACHINERY - 1.3% Eaton Corporation ................................. 15,500 870,945 INSURANCE BROKERS - 0.8% Marsh & McLennan Companies, Inc. ............................................ 12,300 569,490 INTEGRATED OIL & GAS - 4.9% BP plc ADR ........................................ 19,700 1,008,640 Exxon Mobil Corporation ........................... 32,200 1,339,198 Total S.A. ........................................ 11,500 1,058,000 ------------ 3,405,838 INTEGRATED TELECOMMUNICATION SERVICES - 3.6% Alltel Corporation ................................ 13,900 693,471 Sprint Corporation (FON Group) .................... 44,800 825,664 Verizon Communications, Inc. ...................... 26,200 957,348 ------------ 2,476,483 INVESTMENT BANKING & BROKERAGE - 10.3% Goldman Sachs Group, Inc. ......................... 22,700 2,368,745 Lehman Brothers Holdings, Inc. .................... 10,100 836,987 Merrill Lynch & Company, Inc. ..................... 28,700 1,709,372 Morgan Stanley .................................... 38,500 2,206,050 ------------ 7,121,154 MANAGED HEALTH CARE - 0.1% Pacificare Health Systems, Inc. ................... 2,200 87,010 MOVIES & ENTERTAINMENT - 3.0% Viacom, Inc. (Cl.B) ............................... 36,000 1,411,560 Walt Disney Company ............................... 27,200 679,728 ------------ 2,091,288 MULTI-LINE INSURANCE - 2.1% American International Group, Inc. ..................................... 15,000 1,070,250 Hartford Financial Services Group, Inc. ..................................... 6,000 382,200 ------------ 1,452,450 OFFICE ELECTRONICS - 1.3% Xerox Corporation* ................................ 61,500 896,055 OIL & GAS EQUIPMENT & SERVICES - 1.6% Schlumberger, Ltd. ................................ 17,300 1,104,605 OIL & GAS EXPLORATION & PRODUCTION - 1.0% Anadarko Petroleum Corporation 13,800 715,668 OTHER DIVERSIFIED FINANACIAL SERVICES - 5.5% Citigroup, Inc. ................................... 60,666 3,136,432 Principal Financial Group, Inc. ................... 19,400 691,222 ------------ 3,827,654 PAPER PRODUCTS - 0.5% International Paper Company ....................... 7,500 316,950 PHARMACEUTICALS - 3.4% Novartis AG - ADR ................................. 16,100 677,166 Pfizer, Inc. ...................................... 23,860 836,293 Wyeth ............................................. 22,800 856,140 ------------ 2,369,599 PROPERTY & CASUALTY INSURANCE - 2.9% Allstate Corporation .............................. 30,000 1,363,800 Travelers Property Casualty Corporation ..................................... 36,000 617,400 ------------ 1,981,200 PUBLISHING - 1.5% Gannett Company, Inc .............................. 12,000 1,057,680 RAILROADS - 1.0% Union Pacific Corporation ......................... 11,100 664,002 RESTAURANTS - 1.7% Brinker International, Inc.* ...................... 10,000 379,300 McDonald's Corporation ............................ 27,200 777,104 ------------ 1,156,404 SEMICONDUCTORS - 2.8% Agere Systems, Inc.* .............................. 142,500 457,425 Intel Corporation ................................. 33,600 913,920 Stmicroelectronics N.V.* .......................... 23,200 547,520 ------------ 1,918,865 SYSTEMS SOFTWARE - 3.3% BMC Software, Inc.* ............................... 16,500 322,575 Microsoft Corporation ............................. 78,600 1,962,642 ------------ 2,285,217 THRIFTS & MORTGAGE FINANCE - 1.1% Fannie Mae ........................................ 10,700 795,545 WIRELESS TELECOMMUNICATION SERVICES - 1.2% Sprint Corporation (PCS Group)* ................... 89,400 822,480 ------------ Total common stocks (cost $58,636,654) - 96.3% ..................... 66,602,480 less liabilities - 1.8% ........................ 1,259,789 Total investments (cost $59,944,402) - 98.2% ..................... 67,915,673 Cash & other assets, less liabilities - 1.8% ........................ 1,259,789 ------------ Total net assets - 100.0% ....................... $ 69,175,462 ============
49 See accompanying notes. SCHEDULE OF INVESTMENTS (CONTINUED) MARCH 31, 2004 (UNAUDITED) SECURITY LARGE CAP VALUE FUND (CONTINUED) The identified cost of investments owned at March 31, 2004 was the same for federal income tax and financial statement purposes. *Non-income producing security ADR (American Depositary Receipt) plc (public limited company) (1)Security is in default due to bankruptcy. (2)Security is fair valued by the Board of Directors. The total market value of fair valued securities amounts to $0 or 0.0% of total assets. PERFORMANCE AVERAGE ANNUAL RETURNS AS OF MARCH 31, 2004
SINCE 1 YEAR 5 YEARS 10 YEARS INCEPTION ------ ------- -------- --------- A Shares 38.29% (2.22%) 5.38% N/A A Shares with sales charge 30.39% (3.36%) 4.76% N/A B Shares 37.23% (3.13%) 4.51% N/A B Shares with CDSC 32.23% (3.52%) 4.51% N/A C Shares 37.32% (3.16%) N/A (2.79%) (1-29-99) C Shares with CDSC 36.32% (3.16%) N/A (2.79%) (1-29-99)
The performance data above represents past performance that is not predictive of future results. The investment return and principal value of an investment in the fund will fluctuate so that an investor's shares, when redeemed, may be worth more or less than their original cost. The figures above do not reflect deduction of the maximum front-end sales charge of 5.75% for Class A shares or the contingent deferred sales charge of 5% for Class B shares and 1% for Class C shares, as applicable, except where noted. The figures do not reflect the deduction of taxes that a shareholder would pay on distributions or redemption of fund shares. Such figures would be lower if the maximum sales charge and any applicable taxes were deducted. 50 SECURITY MID CAP GROWTH FUND [SECURITY FUNDS LOGO] ADVISOR, SECURITY MANAGEMENT COMPANY, LLC 51 SCHEDULE OF INVESTMENTS MARCH 31, 2004 (UNAUDITED) SECURITY MID CAP GROWTH FUND
NUMBER MARKET COMMON STOCKS OF SHARES VALUE - ------------- --------- ----- APPLICATION SOFTWARE - 2.3% Cognos, Inc.* ................................ 4,100 $ 127,346 Hyperion Solutions Corporation* .............. 50,000 2,072,500 Intelidata Technologies Corporation* ......... 393,250 487,630 Tibco Software, Inc.* ........................ 289,600 2,366,032 ----------- 5,053,508 ASSET MANAGEMENT & CUSTODY BANKS - 1.8% Northern Trust Corporation ................... 49,000 2,282,910 Waddell & Reed Financial, Inc. ............... 70,000 1,716,400 ----------- 3,999,310 BIOTECHNOLOGY - 4.4% Cell Genesys, Inc.* .......................... 54,000 650,160 Charles River Laboratories International, Inc.* ....................... 34,000 1,456,900 Exact Sciences Corporation* .................. 168,100 1,306,137 Kosan Biosciences, Inc. ...................... 169,100 1,787,387 Novavax, Inc.* ............................... 126,000 738,360 Sciclone Pharmaceuticals, Inc.* .............. 339,367 1,832,582 Strategic Diagnostics, Inc.* ................. 206,300 814,885 Vical, Inc.* ................................. 156,000 951,600 ----------- 9,538,011 CASINOS & GAMING - 0.8% Gtech Holdings Corporation ................... 30,000 1,774,200 COMMUNICATIONS EQUIPMENT - 10.9% ADC Telecommunications, Inc.* ................ 1,035,000 3,001,500 Adaptec, Inc.* ............................... 213,500 1,870,260 Advanced Fibre Communications, Inc.* ...................... 51,500 1,134,545 Avici Systems, Inc.* ......................... 68,000 926,160 Ciena Corporation* ........................... 280,000 1,391,600 Cisco Systems, Inc.* ......................... 39,700 933,744 Commscope, Inc.* ............................. 160,000 2,664,000 EFJ, Inc.* ................................... 255,650 1,188,772 Extreme Networks, Inc.* ...................... 250,000 1,802,500 Finisar Corporation* ......................... 1,000,000 2,180,000 Harmonic, Inc.* .............................. 98,800 953,420 Harris Corporation ........................... 53,700 2,599,617 Symmetricom, Inc.* ........................... 126,000 1,130,220 Terayon Communication Systems, Inc.* ............................. 580,000 1,983,600 ----------- 23,759,938 COMPUTER STORAGE & PERIPHERALS - 1.2% Maxtor Corporation* .......................... 38,867 316,766 Storage Technology Corporation* .............. 80,000 2,226,400 ----------- 2,543,166 CONSTRUCTION & ENGINEERING - 1.3% Shaw Group, Inc.* ............................ 253,700 2,750,108 DATA PROCESSING & OUTSOURCED SERVICE - 1.3% Computer Sciences Corporation* ............... 64,500 2,601,285 Sabre Holdings Corporation ................... 6,700 166,227 ----------- 2,767,512 DIVERSIFIED COMMERCIAL SERVICES - 1.6% Cendant Corporation .......................... 20,000 487,800 Choicepoint, Inc.* ........................... 47,000 1,787,410 Navigant Consulting, Inc.* ................... 64,800 1,310,904 ----------- 3,586,114 ELECTRIC UTILITIES - 3.7% KFX, Inc.* ................................... 780,000 8,104,200 ELECTRICAL COMPONENTS & EQUIPMENT - 5.0% American Power Conversion Corporation ................................ 2,600 59,826 Electric City Corporation*(2,3) .............. 1,068,000 1,772,880 Plug Power, Inc.* ............................ 504,000 3,890,880 Power-One, Inc.* ............................. 470,000 5,198,200 ----------- 10,921,786 ELECTRONIC EQUIPMENT MANUFACTURERS - 3.6% Aeroflex, Inc.* .............................. 180,000 2,422,800 Identix, Inc.* ............................... 59,400 343,273 Maxwell Technologies, Inc.* .................. 310,000 4,030,000 Universal Display Corporation* ............... 92,900 1,191,907 ----------- 7,987,980 EXCHANGE TRADED FUNDS - 5.7% iShares Russell 2000 Growth Index Fund ................................. 34,900 2,177,760 iShares Russell 2000 Index Fund .............. 19,000 2,231,170 iShares S&P MidCap 400/BARRA Growth Index Fund .......................... 30,000 3,721,200 iShares S&P MidCap 400 Index Fund ................................. 18,200 2,194,920 Midcap SPDR Trust, Series 1 .................. 20,000 2,205,200 ----------- 12,530,250 HEALTH CARE EQUIPMENT - 0.4% Bioject Medical Technologies, Inc.* .......... 300,000 909,000 HEALTH CARE FACILITIES - 3.3% Amsurg Corporation* .......................... 82,950 1,883,794 Lifepoint Hospitals, Inc.* ................... 72,000 2,328,480 U.S. Physical Therapy, Inc.* ................. 97,000 1,338,600 United Surgical Partners International, Inc.* ....................... 50,000 1,697,000 ----------- 7,247,874 HEALTH CARE SERVICES - 3.0% Hooper Holmes, Inc. .......................... 568,000 3,544,320 NDCHealth Corporation ........................ 59,400 1,612,710 Providence Service Corporation* .............. 78,900 1,405,998 ----------- 6,563,028 HEALTH CARE SUPPLIES - 1.2% Orthovita, Inc* .............................. 375,000 1,507,500 Staar Surgical Company* ...................... 128,700 1,154,439 ----------- 2,661,939
52 See accompanying notes. SCHEDULE OF INVESTMENTS (CONTINUED) MARCH 31, 2004 (UNAUDITED) SECURITY MID CAP GROWTH FUND (CONTINUED)
NUMBER MARKET COMMON STOCKS (CONTINUED) OF SHARES VALUE - ----------------------------------------------------- --------- ------------ INDUSTRIAL MACHINERY - 1.9% Flowserve Corporation*............................... 72,000 $ 1,508,400 Pall Corporation..................................... 88,000 1,996,720 Tennant Company...................................... 17,100 678,357 ------------ 4,183,477 INSURANCE BROKERS - 0.7% Arthur J. Gallagher & Company........................ 50,000 1,628,500 INTERNET SOFTWARE & SERVICES - 0.5% At Road, Inc.* ...................................... 81,200 996,324 IT CONSULTING & OTHER SERVICES - 5.3% Accenture, Ltd.* .................................... 10,300 255,440 Acxiom Corporation................................... 383,800 8,428,248 Keane, Inc.* ........................................ 182,000 2,864,680 ------------ 11,548,368 LEISURE PRODUCTS - 1.0% Mattel, Inc.......................................... 115,000 2,120,600 METAL & GLASS CONTAINERS - 1.2% Pactiv Corporation*.................................. 114,400 2,545,400 MOVIES & ENTERTAINMENT - 1.7% Lions Gate Entertainment Corporation*...................................... 608,300 3,801,875 MULTI-UTILITIES & UNREGULATED POWER - 0.8% Williams Companies, Inc.............................. 190,000 1,818,300 OIL & GAS DRILLING - 2.6% Ensco International, Inc............................. 82,300 2,318,391 Rowan Companies, Inc.* .............................. 160,000 3,374,400 ------------ 5,692,791 OIL & GAS EQUIPMENT & SERVICES - 1.7% BJ Services Company*................................. 86,000 3,721,220 OIL & GAS EXPLORATION & PRODUCTION - 4.5% EOG Resources, Inc. ................................. 66,000 3,028,740 Evergreen Resources, Inc.*........................... 162,000 5,564,700 Rentech, Inc.*....................................... 1,139,300 1,036,763 Syntroleum Corporation*.............................. 35,350 252,753 ------------ 9,882,956 OIL & GAS REFINING, MARKETING & TRANSPORTATION - 0.9% Western Gas Resources, Inc. ........................ 40,000 2,034,000 PHARMACEUTICALS - 5.8% Hollis Eden Pharmaceuticals, Inc.* 257,744 2,487,230 Ligand Pharmaceuticals, Inc. (Cl.B)* 512,200 10,295,220 ------------ 12,782,450 PUBLISHING - 2.0% E.W. Scripps Company(1) ............................. 43,000 4,347,730 REGIONAL BANKS - 2.3% Boston Private Financial Holdings, Inc. ................................... 65,000 1,820,000 Southwest Bancorporation of Texas, Inc. ...................................... 84,800 3,199,504 ------------ 5,019,504 RESTAURANTS - 0.8% Rare Hospitality International, Inc.* ............... 60,000 1,665,000 SEMICONDUCTOR EQUIPMENT - 0.1% Ultratech, Inc.*..................................... 12,200 284,382 SEMICONDUCTORS - 7.9% Applied Micro Circuits Corporation* 500,000 2,875,000 Fairchild Semiconductor International, Inc.* .............................. 16,600 398,898 Hi/fn,Inc.* ......................................... 152,800 1,764,840 Ixys Corporation*.................................... 298,900 2,809,660 LSI Logic Corporation*.............................. 173,300 1,618,622 Microsemi Corporation*............................... 320,000 4,377,600 Omnivision Technologies, Inc.* ...................... 50,000 1,365,500 Xicor, Inc.*......................................... 132,800 2,021,216 ------------ 17,231,336 SPECIALTY STORES - 1.7% Cost Plus, Inc.*(1).................................. 27,450 1,146,037 Hibbett Sporting Goods, Inc.*...................... 69,000 2,631,660 ------------ 3,777,697 SYSTEMS SOFTWARE - 2.5% Microsoft Corporation................................ 40,400 1,008,788 Network Associates, Inc.*........................... 8,100 145,800 Radvision, Ltd.* .................................... 151,500 1,931,625 Red Hat, Inc.*...................................... 17,000 388,620 Wind River Systems, Inc.*........................... 186,000 2,059,020 ------------ 5,533,853 TRADING COMPANIES & DISTRIBUTORS - 1.8% MSC Industrial Direct Company, Inc. 130,000 3,893,500 ------------ Total common stocks (cost $164,255,065) - 99.2%................... 217,207,187 WARRANTS Bioject Medical Technology,Inc. ..................... 5,625 1,370 Electric City Corporation............................ 311,500 299,973 Hollis Eden Pharmaceuticals.......................... 8,143 28,593 KFX, Inc............................................. 144,000 1,134,364 Orthovita, Inc. ..................................... 75,000 141,576 ------------ Total warrants (cost $633,959) - 0.7%.............. 1,605,876 REPURCHASE AGREEMENT United Missouri Bank, 0.65%, 04-01-04 (Collateralized by FNMA bond, 04-01-04 with a value of $ 685,000 and a repurchase amount of $671,008).......................................... $ 671,000 671,000 ------------ Total repurchase agreement (cost $671,000) - 0.3%......................... 671,000 ------------ Total investments (cost $165,560,024) - 100.2%................... 219,484,063 Liabilities, less cash & other assets - (0.2%)..... (562,948) ------------ Total net assets - 100.0%......................... $218,921,115 ============
53 See accompanying notes. SCHEDULE OF INVESTMENTS (CONTINUED) MARCH 31, 2004 (UNAUDITED) SECURITY MID CAP GROWTH FUND (CONTINUED) The identified cost of investments owned at March 31, 2004 was the same for federal income tax and financial statement purposes. *Non-income producing security (1) Security is segregated as collateral for written option contracts. (2) PIPE (Private Investment in Public Equity) - Stock issued by a company in the secondary market as a means of raising capital more quickly and less expensively than through registration in a secondary public offering. (3) Security is a restricted security. The total market value of restricted securities is $1,772,880 (cost $1,844,330), or 0.81% of total net assets. PERFORMANCE AVERAGE ANNUAL RETURNS AS OF MARCH 31, 2004
SINCE 1 YEAR 5 YEARS 10 YEARS INCEPTION ------ ------- -------- --------- A Shares 66.70% 13.68% 13.74% N/A A Shares with sales charge 57.11% 12.34% 13.07% N/A B Shares 65.61% 12.65% 12.84% N/A B Shares with CDSC 60.61% 12.40% 12.84% N/A C Shares 65.73% 12.65% N/A 11.29% (1-29-99) C Shares with CDSC 64.73% 12.65% N/A 11.29% (1-29-99)
The performance data above represents past performance that is not predictive of future results. The investment return and principal value of an investment in the fund will fluctuate so that an investor's shares, when redeemed, may be worth more or less than their original cost. The figures above do not reflect deduction of the maximum front-end sales charge of 5.75% for Class A shares or the contingent deferred sales charge of 5% for Class B shares and 1% for Class C shares, as applicable, except where noted. The figures do not reflect the deduction of taxes that a shareholder would pay on distributions or redemption of fund shares. Such figures would be lower if the maximum sales charge and any applicable taxes were deducted. 54 See accompanying notes. STATEMENTS OF ASSETS AND LIABILITIES MARCH 31, 2004 (UNAUDITED)
SECURITY EQUITY FUND ------------------------------------------ SECURITY SOCIAL LARGE CAP EQUITY GLOBAL AWARENESS VALUE FUND SERIES SERIES SERIES ----------- ------------ ------------ ----------- ASSETS Investments, at value(1).................................... $67,915,673 $492,764,969 $116,924,149 $18,348,081 Cash........................................................ 1,088,836 549 - 27,429 Cash denominated in a foreign currency, at value(2)......... - - 29,679 - Receivables: Fund shares sold......................................... 13,750 1,842 6,342 168 Securities sold.......................................... 825,492 804,808 506,468 25,483 Interest................................................. 3,642 - 1,287 - Dividends................................................ 104,179 268,797 167,077 12,572 Foreign taxes recoverable................................... - - 9,875 - Prepaid expenses............................................ 29,201 42,614 25,904 20,613 ----------- ------------ ------------ ----------- Total assets........................................... 69,980,773 493,883,579 117,670,781 18,434,346 ----------- ------------ ------------ ----------- LIABILITIES Cash overdraft.............................................. - - 119,985 - Payable for: Securities purchased..................................... 689,974 1,737,088 1,203,790 56,561 Fund shares redeemed..................................... 200 57,166 12,800 339 Management fees.......................................... 44,146 313,908 97,071 11,629 Custodian fees........................................... 202 2,097 7,753 530 Transfer and administration fees......................... 22,202 100,472 34,166 5,687 Professional fees........................................ 2,933 19,819 3,940 3,474 12b-1 distribution plan fees............................. 41,856 165,477 163,051 19,521 Other.................................................... 3,798 39,589 1,444 1,202 ----------- ------------ ------------ ----------- Total liabilities...................................... 805,311 2,435,616 1,644,000 98,943 ----------- ------------ ------------ ----------- NET ASSETS.................................................. $69,175,462 $491,447,963 $116,026,781 $18,335,403 =========== ============ ============ =========== NET ASSETS CONSIST OF: Paid in capital............................................. $78,548,513 $400,142,799 $114,052,231 $20,728,869 Accumulated undistributed net investment income (loss)...... 66,750 (21,301) (840,811) (76,957) Accumulated undistributed net realized gain (loss) on sale of investments, futures, options and foreign currency transactions.................................... (17,411,072) 6,115,964 (19,371,536) (1,999,171) Net unrealized appreciation (depreciation) in value of investments, futures, options and translation of assets and liabilities in foreign currency............ 7,971,271 85,210,501 22,186,897 (317,338) ----------- ------------ ------------ ----------- Total net assets............................................ $69,175,462 $491,447,963 $116,026,781 $18,335,403 =========== ============ ============ =========== CLASS "A" SHARES Capital shares outstanding.................................. 8,714,664 64,782,675 5,844,967 535,431 Net assets.................................................. $51,616,623 $426,673,130 $ 83,314,190 $10,428,382 Net asset value per share................................... $ 5.92 $ 6.59 $ 14.25 $ 19.48 =========== ============ ============ =========== Offering price per share (net asset value divided by 94.25%)....................................... $ 6.28 $ 6.99 $ 15.12 $ 20.67 =========== ============ ============ =========== CLASS "B" SHARES Capital shares outstanding.................................. 2,549,306 9,760,039 1,859,945 342,185 Net assets.................................................. $14,374,330 $ 58,045,831 $ 24,711,185 $ 6,190,465 Net asset value per share .................................. $ 5.64 $ 5.95 $ 13.29 $ 18.09 =========== ============ ============ =========== CLASS "C" SHARES Capital shares outstanding.................................. 554,904 1,075,386 589,161 92,754 Net assets.................................................. $ 3,184,509 $ 6,729,002 $ 8,001,406 $ 1,716,556 Net asset value per share................................... $ 5.74 $ 6.26 $ 13.58 $ 18.51 =========== ============ ============ =========== (1) Investments, including repurchase agreements, at cost... $59,944,402 $407,554,468 $ 94,724,387 $18,665,419 (2) Cash denominated in a foreign currency, at cost......... - - 29,555 -
55 See accompanying notes. STATEMENTS OF ASSETS AND LIABILITIES (CONTINUED) MARCH 31, 2004 (UNAUDITED)
SECURITY EQUITY FUND ---------------------------------------------------------------- MID CAP SMALL CAP ENHANCED VALUE GROWTH INDEX SELECT 25 (R) SERIES SERIES SERIES SERIES ------------- ------------- ------------- ------------- ASSETS Investments, at value(1) ..................................... $ 318,373,840 $ 31,113,339 $ 16,835,628 $ 26,250,388 Cash ......................................................... 1,067,719 963 - 523 Receivables: Fund shares sold .......................................... 3,750,119 141 - - Securities sold ........................................... 1,744,829 467,455 - - Interest .................................................. 42,136 - - - Dividends ................................................. 138,031 1,030 20,736 9,029 Prepaid expenses ............................................. 29,505 20,565 23,079 23,542 ------------- ------------- ------------- ------------- Total assets ............................................ 325,146,179 31,603,493 16,879,443 26,283,482 ------------- ------------- ------------- ------------- LIABILITIES Cash overdraft ............................................... - - 17,961 - Payable for: Securities purchased ...................................... - 447,276 - Fund shares redeemed ...................................... 334,683 - 7,886 1,450 Written options, at value ................................. 377,355 - - - Variation margin .......................................... - - 220 - Management fees ........................................... 241,598 26,206 7,050 16,605 Custodian fees ............................................ 823 1,401 3,028 331 Transfer and administration fees .......................... 66,102 16,412 6,921 7,354 Professional fees ......................................... 6,837 3,473 3,454 3,533 12b-1 distribution plan fees .............................. 238,353 36,801 145,410 15,253 Other ..................................................... 9,261 859 1,221 1,842 ------------- ------------- ------------- ------------- Total liabilities ....................................... 1,275,012 532,428 193,151 46,368 ------------- ------------- ------------- ------------- NET ASSETS ................................................... $ 323,871,167 $ 31,071,065 $ 16,686,292 $ 26,237,114 ============= ============= ============= ============= NET ASSETS CONSIST OF: Paid in capital .............................................. $ 236,489,494 $ 34,743,255 $ 21,587,421 $ 36,056,272 Accumulated undistributed net investment income (loss) ....... (615,550) (314,746) (20,073) (142,604) Accumulated undistributed net realized gain (loss) on sale of investments, futures, options and foreign currency transactions ..................................... 10,278,696 (10,020,107) (6,319,733) (11,894,892) Net unrealized appreciation (depreciation) in value of investments, futures, options and translation of assets and liabilities in foreign currency ............. 77,718,527 6,662,663 1,438,677 2,218,338 ------------- ------------- ------------- ------------- Total net assets ............................................. $ 323,871,167 $ 31,071,065 $ 16,686,292 $ 26,237,114 ============= ============= ============= ============= CLASS "A" SHARES Capital shares outstanding ................................... 6,753,877 1,324,771 843,714 1,329,938 Net assets ................................................... $ 200,472,305 $ 18,274,366 $ 7,378,553 $ 10,897,968 Net asset value per share .................................... $ 29.68 $ 13.79 $ 8.75 $ 8.19 ============= ============= ============= ============= Offering price per share (net asset value divided by 94.25%) ........................................ $ 31.49 $ 14.63 $ 9.28 $ 8.69 ============= ============= ============= ============= CLASS "B" SHARES Capital shares outstanding ................................... 2,673,041 649,029 672,601 1,078,773 Net assets ................................................... $ 74,195,778 $ 8,390,017 $ 5,638,133 $ 8,518,305 Net asset value per share .................................... $ 27.76 $ 12.93 $ 8.38 $ 7.90 ============= ============= ============= ============= CLASS "C" SHARES Capital shares outstanding ................................... 1,743,255 334,579 436,574 861,253 Net assets ................................................... $ 49,203,084 $ 4,406,682 $ 3,669,606 $ 6,820,841 Net asset value per share .................................... $ 28.22 $ 13.17 $ 8.41 $ 7.92 ============= ============= ============= ============= (1) Investments, including repurchase agreements, at cost .... $ 240,971,113 $ 24,450,676 $ 15,398,561 $ 24,032,050
56 See accompanying notes. STATEMENTS OF ASSETS AND LIABILITIES (CONTINUED) MARCH 31, 2004 (UNAUDITED)
SECURITY EQUITY FUND ---------------------------- LARGE CAP ALPHA SECURITY GROWTH OPPORTUNITY MID CAP GROWTH SERIES SERIES FUND ----------- ----------- -------------- ASSETS Investments, at value(1)............................................ $29,599,027 $ 9,394,347 $ 219,484,063 Cash................................................................ 289,982 217,084 342 Restricted cash..................................................... - 15,002 - Receivables: Fund shares sold................................................. 3,206 - 135,206 Securities sold.................................................. 44,595 463,740 173,774 Deposit for short sales.......................................... - 134,186 - Interest......................................................... - 406 - Dividends........................................................ 24,296 6,848 42,924 Security Management Company...................................... - 7,248 - Prepaid expenses.................................................... 13,038 35,080 46,906 ----------- ----------- -------------- Total assets.................................................. 29,974,144 10,273,941 219,883,215 ----------- ----------- -------------- LIABILITIES Securities sold short, at value(2).................................. - 117,687 - Payable for: Securities purchased............................................. 549,242 467,700 317,808 Fund shares redeemed............................................. - - 46,417 Written options, at value........................................ - - 216,170 Variation margin................................................. - 4,500 - Management fees.................................................. 18,604 16,048 139,551 Custodian fees................................................... 1,097 170 270 Transfer and administration fees................................. 15,146 3,693 53,220 Professional fees................................................ 3,460 1,109 4,884 12b-1 distribution plan fees..................................... 72,827 12,967 176,081 Other............................................................ 545 444 7,699 ----------- ----------- -------------- Total liabilities............................................. 660,921 624,318 962,100 ----------- ----------- -------------- NET ASSETS.......................................................... $29,313,223 $ 9,649,623 $ 218,921,115 =========== =========== ============== NET ASSETS CONSIST OF: Paid in capital..................................................... $30,616,413 $ 8,717,983 $ 162,808,611 Accumulated undistributed net investment income (loss).............. (138,265) (82,975) (1,297,805) Accumulated undistributed net realized gain (loss) on sale of investments, futures, options and foreign currency transactions............................................ (3,624,796) 1,066,584 3,410,764 Net unrealized appreciation (depreciation) in value of investments, short positions, futures, options and translation of assets and liabilities in foreign currency.... 2,459,871 (51,969) 53,999,545 ----------- ----------- -------------- Total net assets.................................................... $29,313,223 $ 9,649,623 $ 218,921,115 =========== =========== ============== CLASS "A" SHARES Capital shares outstanding.......................................... 2,990,900 420,788 13,698,535 Net assets.......................................................... $18,229,313 $ 4,821,449 $ 169,856,931 Net asset value per share........................................... $ 6.09 $ 11.46 $ 12.40 =========== =========== ============== Offering price per share (net asset value divided by 94.25%)............................................... $ 6.46 $ 12.16 $ 13.16 =========== =========== ============== CLASS "B" SHARES Capital shares outstanding.......................................... 1,285,762 187,813 2,926,614 Net assets.......................................................... $ 7,577,950 $ 2,140,228 $ 31,787,002 Net asset value per share........................................... $ 5.89 $ 11.40 $ 10.86 =========== =========== ============== CLASS "C" SHARES Capital shares outstanding.......................................... 591,921 235,863 1,466,154 Net assets.......................................................... $ 3,505,960 $ 2,687,946 $ 17,277,182 Net asset value per share........................................... $ 5.92 $ 11.40 $ 11.78 =========== =========== ============== (1) Investments, including repurchase agreements, at cost........... $27,139,156 $ 9,396,875 $ 165,560,024 (2) Securities sold short, at proceeds.............................. - $ 114,693 -
57 See accompanying notes. STATEMENTS OF OPERATIONS FOR THE SIX MONTHS ENDED MARCH 31, 2004 (UNAUDITED)
SECURITY EQUITY FUND -------------------------------------------- SECURITY SOCIAL LARGE CAP EQUITY GLOBAL AWARENESS VALUE FUND SERIES SERIES SERIES ------------ ------------ ------------ ------------ INVESTMENT INCOME: Dividends ................................... $ 566,224 $ 3,467,211 $ 548,281 $ 112,259 Interest .................................... 17,695 34,663 3,095 1,652 ------------ ------------ ------------ ------------ 583,919 3,501,874 551,376 113,911 Less: Foreign tax expense ................... - - (32,533) - ------------ ------------ ------------ ------------ Total investment income .................. 583,919 3,501,874 518,843 113,911 EXPENSES: Management fees ............................. 254,547 1,897,057 530,033 90,570 Custodian fees .............................. 3,281 9,969 53,342 2,379 Transfer/maintenance fees ................... 80,724 323,248 116,080 23,675 Administration fees ......................... 32,270 228,911 83,145 9,992 Directors' fees ............................. 12,822 6,223 962 213 Professional fees ........................... 4,817 24,167 15,689 3,433 Reports to shareholders ..................... 3,461 31,589 4,942 1,066 Registration fees ........................... 19,837 24,856 28,447 14,451 Other expenses .............................. 2,405 9,327 1,590 630 12b-1 distribution plan fees - Class A ...... 64,511 546,062 92,790 12,547 12b-1 distribution plan fees - Class B ...... 67,991 309,496 119,169 31,876 12b-1 distribution plan fees - Class C ...... 13,358 35,665 39,703 8,503 ------------ ------------ ------------ ------------ Total expenses ........................... 560,024 3,446,570 1,085,892 199,335 Less: Expenses waived .................... - - - (7,568) Earnings credits ................... (826) (826) (833) (899) ------------ ------------ ------------ ------------ Net expenses ............................. 559,198 3,445,744 1,085,059 190,868 ------------ ------------ ------------ ------------ Net investment income (loss) ............. 24,721 56,130 (566,216) (76,957) NET REALIZED AND UNREALIZED GAIN (LOSS): Net realized gain (loss) during the period on: Investments ................................. 3,144,370 30,972,555 3,033,826 261,093 Foreign currency transactions ............... - - (53,259) - ------------ ------------ ------------ ------------ Net realized gain (loss) ................. 3,144,370 30,972,555 2,980,567 261,093 Net change in unrealized appreciation (depreciation) during the period on: Investments ................................. 6,686,925 18,695,082 16,540,682 1,339,651 Translation of assets and liabilities in foreign currencies .................... - - (19,183) - ------------ ------------ ------------ ------------ Net unrealized appreciation (depreciation) ....................... 6,686,925 18,695,082 16,521,499 1,339,651 ------------ ------------ ------------ ------------ Net gain (loss) .......................... 9,831,295 49,667,637 19,502,066 1,600,744 ------------ ------------ ------------ ------------ Net increase (decrease) in net assets resulting from operations .......... $ 9,856,016 $ 49,723,767 $ 18,935,850 $ 1,523,787 ============ ============ ============ ============
58 See accompanying notes. STATEMENTS OF OPERATIONS (CONTINUED) FOR THE SIX MONTHS ENDED MARCH 31, 2004 (UNAUDITED)
SECURITY EQUITY FUND ----------------------------------------------------------- MID CAP SMALL CAP ENHANCED VALUE GROWTH INDEX SELECT 25(R) SERIES SERIES SERIES SERIES ----------- ---------- ---------- ------------- INVESTMENT INCOME: Dividends............................................. $ 1,472,112 $ 12,276 $ 135,293 $ 104,516 Interest.............................................. 178,208 8,398 1,567 4,027 ----------- ---------- ---------- ------------- Total investment income............................. 1,650,320 20,674 136,860 108,543 EXPENSES: Management fees....................................... 1,287,383 145,831 59,870 97,287 Custodian fees........................................ 6,467 11,353 14,089 1,742 Transfer/maintenance fees............................. 218,910 63,289 15,573 31,291 Administration fees................................... 121,375 15,378 16,659 12,555 Directors' fees....................................... 3,277 371 180 340 Professional fees..................................... 7,695 3,457 3,396 3,538 Reports to shareholders............................... 11,883 1,447 732 1,368 Registration fees..................................... 23,142 13,572 13,563 13,693 Other expenses........................................ 3,741 644 504 780 12b-1 distribution plan fees - Class A................ 200,060 21,235 8,889 13,446 12b-1 distribution plan fees - Class B................ 322,780 39,673 27,073 42,916 12b-1 distribution plan fees - Class C................ 207,087 21,219 17,197 33,017 ----------- ---------- ---------- ------------- Total expenses...................................... 2,413,800 337,469 177,725 251,973 Less: Expenses waived............................... - - (19,956) - Earnings credits.............................. (970) (2,049) (836) (826) ----------- ---------- ---------- ------------- Net expenses ....................................... 2,412,830 335,420 156,933 251,147 ----------- ---------- ---------- ------------- Net investment income (loss)........................ (762,510) (314,746) (20,073) (142,604) NET REALIZED AND UNREALIZED GAIN (LOSS): Net realized gain (loss) during the period on: Investments........................................... 10,347,943 3,089,209 621,976 477,740 Futures............................................... - - 21,895 - Options written and purchased......................... 294,816 - - - ----------- ---------- ---------- ------------- Net realized gain (loss)............................ 10,642,759 3,089,209 643,871 477,740 Net change in unrealized appreciation (depreciation) during the period on: Investments........................................... 40,600,996 1,878,317 1,297,844 2,672,539 Futures............................................... - - 9,763 - Options written and purchased......................... 211,973 - - - ----------- ---------- ---------- ------------- Net unrealized appreciation (depreciation).......... 40,812,969 1,878,317 1,307,607 2,672,539 ----------- ---------- ---------- ------------- Net gain (loss)..................................... 51,455,728 4,967,526 1,951,478 3,150,279 ----------- ---------- ---------- ------------- Net increase (decrease) in net assets resulting from operations....................... $50,693,218 $4,652,780 $1,931,405 $ 3,007,675 =========== ========== ========== =============
59 See accompanying notes. STATEMENTS OF OPERATIONS (CONTINUED) FOR THE SIX MONTHS ENDED MARCH 31, 2004 (UNAUDITED)
SECURITY EQUITY FUND ------------------------------ LARGE CAP ALPHA SECURITY GROWTH OPPORTUNITY MID CAP GROWTH SERIES SERIES FUND -------------- ----------- -------------- INVESTMENT INCOME: Dividends............................................. $ 151,548 $ 27,512 $ 324,586 Interest.............................................. 917 19,745 29,292 -------------- ----------- -------------- Total investment income............................ 152,465 47,257 353,878 EXPENSES: Management fees....................................... 138,916 83,148 796,470 Custodian fees........................................ 4,289 - 7,698 Transfer/maintenance fees............................. 52,038 3,288 230,519 Administration fees................................... 13,857 8,843 97,520 Directors' fees....................................... 390 140 12,292 Professional fees..................................... 3,474 7,576 9,487 Reports to shareholders............................... 1,087 368 11,198 Registration fees..................................... 13,246 24,297 36,033 Other expenses........................................ 668 332 4,676 12b-1 distribution plan fees - Class A................ 21,088 5,032 206,346 12b-1 distribution plan fees - Class B................ 36,693 9,845 156,223 12b-1 distribution plan fees - Class C................ 17,871 11,602 80,353 -------------- ----------- -------------- Total expenses..................................... 303,617 154,471 1,648,815 Less: Reimbursement of expenses - Class A.......... - (11,343) - Reimbursement of expenses - Class B.......... - (5,586) - Reimbursement of expenses - Class C.......... - (6,562) - Expenses waived.............................. (12,059) - - Earnings credits............................. (828) (826) (826) -------------- ----------- -------------- Net expenses ...................................... 290,730 130,154 1,647,989 -------------- ----------- -------------- Net investment income (loss)....................... (138,265) (82,897) (1,294,111) NET REALIZED AND UNREALIZED GAIN (LOSS): Net realized gain (loss) during the period on: Investments........................................... 395,270 832,763 12,368,465 Securities sold short................................. - (20,238) - Futures............................................... - 394,147 - Options written and purchased......................... - - 101,632 -------------- ----------- -------------- Net realized gain (loss)........................... 395,270 1,206,672 12,470,097 Net change in unrealized appreciation (depreciation) during the period on: Investments........................................... 1,874,986 74,715 24,143,704 Securities sold short................................. - (4,517) - Futures............................................... - 43,631 - Options written and purchased......................... - - 75,506 -------------- ----------- -------------- Net unrealized appreciation (depreciation)......... 1,874,986 113,829 24,219,210 -------------- ----------- -------------- Net gain (loss).................................... 2,270,256 1,320,501 36,689,307 -------------- ----------- -------------- Net increase (decrease) in net assets resulting from operations................... $ 2,131,991 $ 1,237,604 $ 35,395,196 ============== =========== ==============
60 See accompanying notes. STATEMENTS OF CHANGES IN NET ASSETS FOR THE SIX MONTHS ENDED MARCH 31, 2004 (UNAUDITED)
SECURITY EQUITY FUND ------------------------------------------- SECURITY SOCIAL LARGE CAP EQUITY GLOBAL AWARENESS VALUE FUND SERIES SERIES SERIES ------------- ------------ ------------ ------------ INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONS: Net investment income (loss)............................... $ 24,721 $ 56,130 $ (566,216) $ (76,957) Net realized gain (loss) during the period on investments, futures, options written and purchased and foreign currency transactions............. 3,144,370 30,972,555 2,980,567 261,093 Net change in unrealized appreciation (depreciation) during the period on investments, futures, options written and purchased and translation of assets and liabilities in foreign currencies...................................... 6,686,925 18,695,082 16,521,499 1,339,651 ------------- ------------ ------------ ------------ Net increase (decrease) in net assets resulting from operations............................ 9,856,016 49,723,767 18,935,850 1,523,787 DISTRIBUTIONS TO SHAREHOLDERS FROM: Net investment income Class A................................................. (112,367) (684,512) - - Class B................................................. - - - - Class C................................................. - - - - ------------- ------------ ------------ ------------ Total distributions to shareholders.................. (112,367) (684,512) - - INTERNATIONAL SERIES MERGER (NOTE 9).......................... - - 9,345,535 - NET INCREASE (DECREASE) FROM CAPITAL SHARE TRANSACTIONS (NOTE 6)...................................... (242,953) (56,136,242) 23,247,993 (133,372) ------------- ------------ ------------ ------------ Total increase (decrease) in net assets.............. 9,500,696 (7,096,987) 51,529,378 1,390,415 ------------- ------------ ------------ ------------ NET ASSETS: Beginning of period........................................ 59,674,766 498,544,950 64,497,403 16,944,988 ------------- ------------ ------------ ------------ End of period.............................................. $ 69,175,462 $491,447,963 $116,026,781 $ 18,335,403 ============= ============ ============ ============ Undistributed net investment income (loss) at end of period........................................ $ 66,750 $ (21,301) $ (840,811) $ (76,957) ============= ============ ============ ============
61 See accompanying notes. STATEMENTS OF CHANGES IN NET ASSETS (CONTINUED) FOR THE SIX MONTHS ENDED MARCH 31, 2004 (UNAUDITED)
SECURITY EQUITY FUND ---------------------------------------------------------------- MID CAP SMALL CAP ENHANCED VALUE GROWTH INDEX SELECT 25(R) SERIES SERIES SERIES SERIES ------------- ------------- ------------- ------------- INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONS: Net investment income (loss) ...................... $ (762,510) $ (314,746) $ (20,073) $ (142,604) Net realized gain (loss) during the period on investments, futures, options written and purchased and foreign currency transactions .... 10,642,759 3,089,209 643,871 477,740 Net change in unrealized appreciation (depreciation) during the period on investments, futures, options written and purchased and translation of assets and liabilities in foreign currencies ............................. 40,812,969 1,878,317 1,307,607 2,672,539 ------------- ------------- ------------- ------------- Net increase (decrease) in net assets resulting from operations .................... 50,693,218 4,652,780 1,931,405 3,007,675 DISTRIBUTIONS TO SHAREHOLDERS FROM: Net realized gain Class A ........................................ (1,472,634) - - - Class B ........................................ (633,165) - - - Class C ........................................ (407,446) - - - ------------- ------------- ------------- ------------- Total distributions to shareholders .......... (2,513,245) - - - NET INCREASE (DECREASE) FROM CAPITAL SHARE TRANSACTIONS (NOTE 6) ............................. 74,923,438 1,641,238 457,508 (1,594,223) ------------- ------------- ------------- ------------- Total increase (decrease) in net assets ...... 123,103,411 6,294,018 2,388,913 1,413,452 ------------- ------------- ------------- ------------- NET ASSETS: Beginning of period ............................... 200,767,756 24,777,047 14,297,379 24,823,662 ------------- ------------- ------------- ------------- End of period ..................................... $ 323,871,167 $ 31,071,065 $ 16,686,292 $ 26,237,114 ============= ============= ============= ============= Undistributed net investment income (loss) at end of period ............................. $ (615,550) $ (314,746) $ (20,073) $ (142,604) ============= ============= ============= =============
62 See accompanying notes. STATEMENTS OF CHANGES IN NET ASSETS (CONTINUED) FOR THE SIX MONTHS ENDED MARCH 31, 2004 (UNAUDITED)
SECURITY EQUITY FUND ------------------------------ LARGE CAP ALPHA SECURITY GROWTH OPPORTUNITY MID CAP GROWTH SERIES SERIES FUND INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONS: Net investment income (loss) ..................................... $ (138,265) $ (82,897) $ (1,294,111) Net realized gain (loss) during the period on investments, futures, options written and purchased and foreign currency transactions .................... 395,270 1,206,672 12,470,097 Net change in unrealized appreciation (depreciation) during the period on investments, futures, options written and purchased and translation of assets and liabilities in foreign currencies ............................................. 1,874,986 113,829 24,219,210 ------------- ------------- ------------- Net increase (decrease) in net assets resulting from operations ................................. 2,131,991 1,237,604 35,395,196 DISTRIBUTIONS TO SHAREHOLDERS FROM: Net realized gain Class A ........................................................ - (199,700) (5,436,468) Class B ........................................................ - (101,286) (1,171,731) Class C ........................................................ - (121,452) (553,046) ------------- ------------- ------------- Total distributions to shareholders ....................... - (422,438) (7,161,245) TECHNOLOGY SERIES MERGER (NOTE 10) ................................. - - 11,962,769 NET INCREASE (DECREASE) FROM CAPITAL SHARE TRANSACTIONS (NOTE 6) ............................................ 1,014,077 2,445,246 6,777,231 ------------- ------------- ------------- Total increase (decrease) in net assets ................... 3,146,068 3,260,412 46,973,951 ------------- ------------- ------------- Net assets: Beginning of period .............................................. 26,167,155 6,389,211 171,947,164 ------------- ------------- ------------- End of period .................................................... $ 29,313,223 $ 9,649,623 $ 218,921,115 ============= ============= ============= Undistributed net investment income (loss) at end of period ............................................... $ (138,265) $ (82,975) $ (1,297,805) ============= ============= =============
63 See accompanying notes. STATEMENTS OF CHANGES IN NET ASSETS FOR THE YEAR ENDED SEPTEMBER 30, 2003
SECURITY EQUITY FUND --------------------------------------------------------- SECURITY SOCIAL MID CAP LARGE CAP EQUITY GLOBAL AWARENESS VALUE VALUE FUND SERIES SERIES SERIES SERIES INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONS: Net investment income (loss) ......................... $ 117,302 $ 607,081 $ (219,964) $ (179,491) $ (994,030) Net realized gain (loss) during the period on investments, futures, options written and purchased and foreign currency transactions ......... (4,625,189) (8,071,790) (8,868,831) (902,119) 2,854,877 Net change in unrealized appreciation (depreciation) during the period on investments, options written and purchased and translation of assets and liabilities in foreign currencies .................................. 12,145,945 89,930,127 22,337,055 3,990,064 53,000,947 ----------- ------------ ------------ ------------ ------------- Net increase (decrease) in net assets resulting from operations ................................... 7,638,058 82,465,418 13,248,260 2,908,454 54,861,794 NET INCREASE (DECREASE) FROM CAPITAL SHARE TRANSACTIONS (NOTE 6) ........................... 12,624,901 (67,957,739) (22,741,341) (440,061) 21,441,016 ----------- ------------ ------------ ------------ ------------- Total increase (decrease) in net assets ............. 20,262,959 14,507,679 (9,493,081) 2,468,393 76,302,810 ----------- ------------ ------------ ------------ ------------- NET ASSETS: Beginning of period .................................. 39,411,807 484,037,271 73,990,484 14,476,595 124,464,946 ----------- ------------ ------------ ------------ ------------- End of period ........................................ $59,674,766 $498,544,950 $ 64,497,403 $ 16,944,988 $ 200,767,756 =========== ============ ============ ============ ============= Undistributed net investment income (loss) at end of period .................................... $ 154,396 $ 607,081 $ (277,637) $ - $ 146,960 =========== ============ ============ ============ =============
64 See accompanying notes. STATEMENTS OF CHANGES IN NET ASSETS (CONTINUED) FOR THE YEAR ENDED SEPTEMBER 30, 2003
SECURITY EQUITY FUND -------------------------------------------------------- SMALL CAP ENHANCED LARGE CAP GROWTH INDEX SELECT 25(R) GROWTH SERIES SERIES SERIES SERIES INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONS: Net investment income (loss) ........................... $ (414,114) $ (56,631) $ (281,129) $ (183,113) Net realized gain (loss) during the period on investments, futures, and foreign currency transactions .......................................... 2,366,986 (2,930,280) (3,750,965) (2,266,684) Net change in unrealized appreciation (depreciation) during the period on investments, futures, and translation of assets and liabilities in foreign currencies .................................... 5,227,406 6,120,571 6,658,939 5,276,183 ------------ ------------ ----------- ----------- Net increase (decrease) in net assets resulting from operations ...................................... 7,180,278 3,133,660 2,626,845 2,826,386 NET INCREASE (DECREASE) FROM CAPITAL SHARE TRANSACTIONS (NOTE 6) ............................ 2,791,333 (6,261,504) (2,256,498) 9,601,678 ------------ ------------ ----------- ----------- Total increase (decrease) in net assets ............... 9,971,611 (3,127,844) 370,347 12,428,064 ------------ ------------ ----------- ----------- NET ASSETS: Beginning of period .................................... 14,805,436 17,425,223 24,453,315 13,739,091 ------------ ------------ ----------- ----------- End of period .......................................... $ 24,777,047 $ 14,297,379 $24,823,662 $26,167,155 ============ ============ =========== =========== Undistributed net investment income (loss) at end of period ...................................... $ - $ - $ - $ - ============ ============ =========== ===========
65 See accompanying notes. STATEMENTS OF CHANGES IN NET ASSETS (CONTINUED) FOR THE YEAR ENDED SEPTEMBER 30, 2003 (EXCEPT AS NOTED)
SECURITY EQUITY FUND ------------- ALPHA SECURITY OPPORTUNITY MID CAP SERIES* GROWTH FUND INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONS: Net investment income (loss) ............................... $ (24,944) $ (1,782,165) Net realized gain (loss) during the period on investments, futures, options written and purchased and foreign currency transactions ............... 307,216 7,985,872 Net change in unrealized appreciation (depreciation) during the period on investments, securities sold short, futures, options written and purchased and translation of assets and liabilities in foreign currencies ..................................... (165,798) 52,286,497 ------------- ------------- Net increase (decrease) in net assets resulting from operations .......................................... 116,474 58,490,204 NET INCREASE (DECREASE) FROM CAPITAL SHARE TRANSACTIONS (NOTE 6) ................................. 6,272,737 (876,048) ------------- ------------- Total increase (decrease) in net assets ................... 6,389,211 57,614,156 ------------- ------------- NET ASSETS: Beginning of period ........................................ - 114,333,008 ------------- ------------- End of period .............................................. $ 6,389,211 $ 171,947,164 ============= ============= Undistributed net investment income (loss) at end of period .......................................... $ (78) $ - ============= =============
*For the period beginning July 7, 2003 (commencement of operations) to September 30, 2003. 66 See accompanying notes. FINANCIAL HIGHLIGHTS SELECTED DATA FOR EACH SHARE OF CAPITAL STOCK OUTSTANDING THROUGHOUT EACH PERIOD SECURITY LARGE CAP VALUE FUND (CLASS A)
FISCAL PERIOD ENDED SEPTEMBER 30 ------------------------------------------------------------------------- 2004(c)(r) 2003(c) 2002(c)(i)(m) 2001(c)(h) 2000(c) 1999(c) ---------- ------- ------------- ---------- ------- ------- PER SHARE DATA NET ASSET VALUE BEGINNING OF PERIOD ............ $ 5.11 $ 4.25 $ 5.37 $ 6.42 $ 7.17 $ 7.68 INCOME FROM INVESTMENT OPERATIONS: Net Investment Income (Loss) ................... 0.01 0.02 0.01 0.03 0.07 0.12 Net Gain (Loss) on Securities (realized and unrealized) ..................... 0.81 0.84 (1.10) (1.03) (0.58) 0.75 ------- ------- ------- ------- ------- ------- Total from Investment Operations ............ 0.82 0.86 (1.09) (1.00) (0.51) 0.87 LESS DISTRIBUTIONS: Dividends (from Net Investment Income) ......... (0.01) -- (0.03) (0.05) (0.13) (0.04) Distributions (from Realized Gains) ............ -- -- -- -- (0.11) (1.34) ------- ------- ------- ------- ------- ------- Total Distributions ......................... (0.01) -- (0.03) (0.05) (0.24) (1.38) ------- ------- ------- ------- ------- ------- NET ASSET VALUE END OF PERIOD .................. $ 5.92 $ 5.11 $ 4.25 $ 5.37 $ 6.42 $ 7.17 ======= ======= ======= ======= ======= ======= TOTAL RETURN (a) ............................... 16.10% 20.24% (20.51%) (15.68%) (7.28%) 12.00% RATIOS/SUPPLEMENTAL DATA Net Assets End of Period (thousands) ........... $51,617 $45,858 $32,997 $45,006 $60,448 $74,796 Ratio of Expenses to Average Net Assets ........ 1.47% 1.45% 1.37% 1.32% 1.27% 1.22% Ratio of Net Investment Income (Loss) to Average Net Assets .......................... 0.25% 0.41% 0.20% 0.49% 0.99% 1.63% Portfolio Turnover Rate ........................ 58% 76% 68% 180% 144% 98%
SECURITY LARGE CAP VALUE FUND (CLASS B)
FISCAL PERIOD ENDED SEPTEMBER 30 ------------------------------------------------------------------------- 2004(c)(r) 2003(c) 2002(c)(i)(m) 2001(c)(h) 2000(c) 1999(c) ---------- ------- ------------- ---------- ------- -------- PER SHARE DATA NET ASSET VALUE BEGINNING OF PERIOD ............ $ 4.87 $ 4.08 $ 5.18 $ 6.21 $ 6.95 $ 7.54 INCOME FROM INVESTMENT OPERATIONS: Net Investment Income (Loss) ................... (0.01) (0.02) (0.04) (0.03) -- 0.05 Net Gain (Loss) on Securities (realized and unrealized) ..................... 0.78 0.81 (1.06) (1.00) (0.58) 0.73 ------- ------- ------- ------- ------- ------- Total from Investment Operations ............ 0.77 0.79 (1.10) (1.03) (0.58) 0.78 LESS DISTRIBUTIONS: Dividends (from Net Investment Income) ......... -- -- -- -- (0.05) (0.03) Distributions (from Realized Gains) ............ -- -- -- -- (0.11) (1.34) ------- ------- ------- ------- ------- ------- Total Distributions ......................... -- -- -- -- (0.16) (1.37) ------- ------- ------- ------- ------- ------- NET ASSET VALUE END OF PERIOD .................. $ 5.64 $ 4.87 $ 4.08 $ 5.18 $ 6.21 $ 6.95 ======= ======= ======= ======= ======= ======= TOTAL RETURN (a) ............................... 15.81% 19.36% (21.24%) (16.59%) (8.36%) 10.93% RATIOS/SUPPLEMENTAL DATA Net Assets End of Period (thousands) ........... $14,374 $11,687 $ 4,905 $ 5,657 $ 7,152 $ 9,829 Ratio of Expenses to Average Net Assets ........ 2.23% 2.20% 2.27% 2.32% 2.27% 2.22% Ratio of Net Investment Income (Loss) to Average Net Assets .......................... (0.50%) (0.42%) (0.71%) (0.51%) 0.01% 0.63% Portfolio Turnover Rate ........................ 58% 76% 68% 180% 144% 98%
67 See accompanying notes. FINANCIAL HIGHLIGHTS (CONTINUED) SELECTED DATA FOR EACH SHARE OF CAPITAL STOCK OUTSTANDING THROUGHOUT EACH PERIOD SECURITY LARGE CAP VALUE FUND (CLASS C)
FISCAL PERIOD ENDED SEPTEMBER 30 -------------------------------------------------------------------------------- 2004(c)(r) 2003(c) 2002(c)(i)(k)(m) 2001(c)(h) 2000(c) 1999(c)(e) ---------- ------- ---------------- ---------- ------- ---------- PER SHARE DATA NET ASSET VALUE BEGINNING OF PERIOD ...... $ 4.96 $ 4.16 $ 5.28 $ 6.32 $ 7.11 $6.87 INCOME FROM INVESTMENT OPERATIONS: Net Investment Income (Loss) ............. (0.01) (0.02) (0.04) (0.03) (0.01) 0.03 Net Gain (Loss) on Securities (realized and unrealized) ............... 0.79 0.82 (1.08) (1.01) (0.56) 0.21 ------- ------- ------- ------- ------ ----- Total from Investment Operations ....... 0.78 0.80 (1.12) (1.04) (0.57) 0.24 LESS DISTRIBUTIONS: Dividends (from Net Investment Income) ... -- -- -- -- (0.11) -- Distributions (from Realized Gains) ...... -- -- -- -- (0.11) -- ------- ------- ------- ------- ------ ----- Total Distributions .................... -- -- -- -- (0.22) -- ------- ------- ------- ------- ------ ----- NET ASSET VALUE END OF PERIOD ............ $ 5.74 $ 4.96 $ 4.16 $ 5.28 $ 6.32 $7.11 ======= ======= ======= ======= ====== ===== TOTAL RETURN (a) ......................... 15.73% 19.23% (21.21%) (16.46%) (8.10%) 3.49% RATIOS/SUPPLEMENTAL DATA Net Assets End of Period (thousands) ..... $ 3,184 $ 2,130 $ 1,510 $ 904 $ 483 $ 297 Ratio of Expenses to Average Net Assets .. 2.23% 2.20% 2.25% 2.33% 2.28% 2.22% Ratio of Net Investment Income (Loss) to Average Net Assets ..................... (0.50%) (0.33%) (0.72%) (0.55%) (0.10%) 0.62% Portfolio Turnover Rate .................. 58% 76% 68% 180% 144% 90%
68 See accompanying notes. FINANCIAL HIGHLIGHTS (CONTINUED) SELECTED DATA FOR EACH SHARE OF CAPITAL STOCK OUTSTANDING THROUGHOUT EACH PERIOD SECURITY EQUITY FUND - EQUITY SERIES (CLASS A)
FISCAL PERIOD ENDED SEPTEMBER 30 ------------------------------------------------------------------------------- 2004(c)(r) 2003(c) 2002(c)(j)(m) 2001(c) 2000(c) 1999(c) ---------- -------- ------------- -------- -------- -------- PER SHARE DATA NET ASSET VALUE BEGINNING OF PERIOD ...... $ 5.98 $ 5.09 $ 6.36 $ 10.26 $ 9.96 $ 8.86 INCOME FROM INVESTMENT OPERATIONS: Net Investment Income (Loss) ............. -- 0.01 0.01 -- -- 0.02 Net Gain (Loss) on Securities (realized and unrealized) ............... 0.62 0.88 (1.28) (2.49) 0.66 1.80 -------- -------- -------- -------- -------- -------- Total from Investment Operations ....... 0.62 0.89 (1.27) (2.49) 0.66 1.82 LESS DISTRIBUTIONS: Dividends (from Net Investment Income) ... (0.01) -- -- -- -- (0.04) Distributions (from Realized Gains) ...... -- -- -- (1.40) (0.36) (0.68) Return of Capital ........................ -- -- -- (0.01) -- -- -------- -------- -------- -------- -------- -------- Total Distributions .................... (0.01) -- -- (1.41) (0.36) (0.72) -------- -------- -------- -------- -------- -------- NET ASSET VALUE END OF PERIOD ............ $ 6.59 $ 5.98 $ 5.09 $ 6.36 $ 10.26 $ 9.96 ======== ======== ======== ======== ======== ======== TOTAL RETURN (a) ......................... 10.37% 17.49% (19.97%) (27.66%) 6.64% 20.66% RATIOS/SUPPLEMENTAL DATA Net Assets End of Period (thousands) ..... $426,673 $430,161 $412,791 $563,553 $853,126 $917,179 Ratio of Expenses to Average Net Assets .. 1.27% 1.25% 1.11% 1.02% 1.02% 1.02% Ratio of Net Investment Income (Loss) to Average Net Assets ..................... 0.12% 0.23% 0.13% 0.03% 0.03% 0.19% Portfolio Turnover Rate .................. 37% 54% 30% 23% 54% 36%
SECURITY EQUITY FUND - EQUITY SERIES (CLASS B)
FISCAL PERIOD ENDED SEPTEMBER 30 ------------------------------------------------------------------------------- 2004(c)(r) 2003(c) 2002(c)(j)(m) 2001(c) 2000(c) 1999(c) ---------- ------- ------------- ------- -------- -------- PER SHARE DATA NET ASSET VALUE BEGINNING OF PERIOD ...... $ 5.41 $ 4.64 $ 5.86 $ 9.65 $ 9.47 $ 8.52 INCOME FROM INVESTMENT OPERATIONS: Net Investment Income (Loss) ............. (0.02) (0.03) (0.05) (0.07) (0.10) (0.08) Net Gain (Loss) on Securities (realized and unrealized) ............... 0.56 0.80 (1.17) (2.31) 0.64 1.71 -------- ------- -------- ------- -------- -------- Total from Investment Operations ....... 0.54 0.77 (1.22) (2.38) 0.54 1.63 LESS DISTRIBUTIONS: Dividends (from Net Investment Income) ... -- -- -- -- -- -- Distributions (from Realized Gains) ...... -- -- -- (1.40) (0.36) (0.68) Return of Capital ........................ -- -- -- (0.01) -- -- -------- ------- -------- ------- -------- -------- Total Distributions .................... -- -- -- (1.41) (0.36) (0.68) -------- ------- -------- ------- -------- -------- NET ASSET VALUE END OF PERIOD ............ $ 5.95 $ 5.41 $ 4.64 $ 5.86 $ 9.65 $ 9.47 ======== ======= ======== ======= ======== ======== TOTAL RETURN (a) ......................... 9.98% 16.59% (20.82%) (28.34%) 5.69% 19.23% RATIOS/SUPPLEMENTAL DATA Net Assets End of Period (thousands) ..... $ 58,046 $61,733 $ 66,267 $96,067 $156,633 $159,872 Ratio of Expenses to Average Net Assets .. 2.02% 2.00% 2.02% 2.02% 2.02% 2.02% Ratio of Net Investment Income (Loss) to Average Net Assets ..................... (0.63%) (0.52%) (0.78%) (0.97%) (0.97%) (0.82%) Portfolio Turnover Rate .................. 37% 54% 30% 23% 54% 36%
69 See accompanying notes. FINANCIAL HIGHLIGHTS (CONTINUED) SELECTED DATA FOR EACH SHARE OF CAPITAL STOCK OUTSTANDING THROUGHOUT EACH PERIOD SECURITY EQUITY FUND - EQUITY SERIES (CLASS C)
FISCAL PERIOD ENDED SEPTEMBER 30 -------------------------------------------------------------------------------- 2004(c)(r) 2003(c) 2002(c)(j)(k)(m) 2001(c) 2000(c) 1999(c)(e) ---------- ------- ---------------- ------- ------- ---------- PER SHARE DATA NET ASSET VALUE BEGINNING OF PERIOD ...... $ 5.69 $ 4.88 $ 6.16 $ 10.07 $ 9.89 $10.13 INCOME FROM INVESTMENT OPERATIONS: Net Investment Income (Loss) ............. (0.02) (0.03) (0.05) (0.07) (0.10) (0.05) Net Gain (Loss) on Securities (realized and unrealized) ............... 0.59 0.84 (1.23) (2.43) 0.64 (0.19) ------- ------- ------- ------- ------ ------ Total from Investment Operations ....... 0.57 0.81 (1.28) (2.50) 0.54 (0.24) LESS DISTRIBUTIONS: Dividends (from Net Investment Income) ... -- -- -- -- -- -- Distributions (from Realized Gains) ...... -- -- -- (1.40) (0.36) -- Return of Capital ........................ -- -- -- (0.01) -- -- ------- ------- ------- ------- ------ ------ Total Distributions .................... -- -- -- (1.41) (0.36) -- ------- ------- ------- ------- ------ ------ NET ASSET VALUE END OF PERIOD ............ $ 6.26 $ 5.69 $ 4.88 $ 6.16 $10.07 $ 9.89 ======= ======= ======= ======= ====== ====== TOTAL RETURN (a) ......................... 10.02% 16.60% (20.78%) (28.35%) 5.55% (2.37%) RATIOS/SUPPLEMENTAL DATA Net Assets End of Period (thousands) ..... $ 6,729 $ 6,651 $ 4,979 $ 4,230 $5,426 $4,507 Ratio of Expenses to Average Net Assets .. 2.02% 2.00% 2.02% 2.02% 2.02% 2.02% Ratio of Net Investment Income (Loss) to Average Net Assets ..................... (0.63%) (0.52%) (0.76%) (0.97%) (0.96%) (0.89%) Portfolio Turnover Rate .................. 37% 54% 30% 23% 54% 45%
70 See accompanying notes. FINANCIAL HIGHLIGHTS (CONTINUED) SELECTED DATA FOR EACH SHARE OF CAPITAL STOCK OUTSTANDING THROUGHOUT EACH PERIOD SECURITY EQUITY FUND - GLOBAL SERIES (CLASS A)
FISCAL PERIOD ENDED SEPTEMBER 30 ------------------------------------------------------------------------------- 2004(c)(p)(r) 2003(c) 2002(c)(i)(m) 2001(c) 2000(c) 1999(c) ------------- ------- ------------- ------- ------- ------- PER SHARE DATA NET ASSET VALUE BEGINNING OF PERIOD ...... $ 11.68 $ 9.49 $ 11.04 $ 18.86 $ 13.99 $ 11.23 INCOME FROM INVESTMENT OPERATIONS: Net Investment Income (Loss) ............. (0.05) (0.03) (0.05) (0.08) (0.11) 0.01 Net Gain (Loss) on Securities (realized and unrealized) ............... 2.62 2.22 (1.50) (4.33) 6.47 3.71 ------- ------- ------- ------- ------- ------- Total from Investment Operations ....... 2.57 2.19 (1.55) (4.41) 6.36 3.72 LESS DISTRIBUTIONS: Dividends (from Net Investment Income) ... -- -- -- -- -- (0.01) Distributions (from Realized Gains) ...... -- -- -- (3.41) (1.49) (0.91) In Excess of Net Investment Income ....... -- -- -- -- -- (0.04) ------- ------- ------- ------- ------- ------- Total Distributions .................... -- -- -- (3.41) (1.49) (0.96) ------- ------- ------- ------- ------- ------- NET ASSET VALUE END OF PERIOD ............ $ 14.25 $ 11.68 $ 9.49 $ 11.04 $ 18.86 $ 13.99 ======= ======= ======= ======= ======= ======= TOTAL RETURN (a) ......................... 22.00% 23.08% (14.04%) (27.60%) 47.04% 34.39% RATIOS/SUPPLEMENTAL DATA Net Assets End of Period (thousands) ..... $83,314 $42,711 $50,893 $48,089 $60,909 $28,292 Ratio of Expenses to Average Net Assets .. 1.83% 2.00% 1.85% 1.90% 1.92% 2.00% Ratio of Net Investment Income (Loss) to Average Net Assets ..................... (0.84%) (0.26%) (0.46%) (0.57%) (0.62%) 0.11% Portfolio Turnover Rate .................. 33% 62% 36% 38% 92% 141%
SECURITY EQUITY FUND - GLOBAL SERIES (CLASS B)
FISCAL PERIOD ENDED SEPTEMBER 30 ------------------------------------------------------------------------------- 2004(c)(p)(r) 2003(c) 2002(c)(i)(m) 2001(c) 2000(c) 1999(c) ------------- ------- ------------- ------- ------- ------- PER SHARE DATA NET ASSET VALUE BEGINNING OF PERIOD ...... $ 10.93 $ 8.89 $ 10.38 $ 18.00 $ 13.45 $ 10.89 INCOME FROM INVESTMENT OPERATIONS: Net Investment Income (Loss) ............. (0.10) (0.04) (0.10) (0.14) (0.17) (0.11) Net Gain (Loss) on Securities (realized and unrealized) ............... 2.46 2.08 (1.39) (4.07) 6.21 3.58 ------- ------- ------- ------- ------- ------- Total from Investment Operations ....... 2.36 2.04 (1.49) (4.21) 6.04 3.47 LESS DISTRIBUTIONS: Dividends (from Net Investment Income) ... -- -- -- -- -- -- Distributions (from Realized Gains) ...... -- -- -- (3.41) (1.49) (0.91) ------- ------- ------- ------- ------- ------- Total Distributions .................... -- -- -- (3.41) (1.49) (0.91) ------- ------- ------- ------- ------- ------- NET ASSET VALUE END OF PERIOD ............ $ 13.29 $ 10.93 $ 8.89 $ 10.38 $ 18.00 $ 13.45 ======= ======= ======= ======= ======= ======= TOTAL RETURN (a) ......................... 21.59% 22.95% (14.35%) (27.86%) 46.53% 33.04% RATIOS/SUPPLEMENTAL DATA Net Assets End of Period (thousands) ..... $24,711 $16,461 $19,021 $23,533 $30,951 $20,591 Ratio of Expenses to Average Net Assets .. 2.58% 2.18% 2.28% 2.39% 2.29% 3.00% Ratio of Net Investment Income (Loss) to Average Net Assets ..................... (1.61%) (0.42%) (0.89%) (1.07%) (0.96%) (0.87%) Portfolio Turnover Rate .................. 33% 62% 36% 38% 92% 141%
71 See accompanying notes. FINANCIAL HIGHLIGHTS (CONTINUED) SELECTED DATA FOR EACH SHARE OF CAPITAL STOCK OUTSTANDING THROUGHOUT EACH PERIOD SECURITY EQUITY FUND - GLOBAL SERIES (CLASS C)
FISCAL PERIOD ENDED SEPTEMBER 30 --------------------------------------------------------------------------------- 2004(c)(p)(r) 2003(c) 2002(c)(i)(k)(m) 2001(c) 2000(c) 1999(c)(e) ------------- ------- ---------------- ------- ------- ---------- PER SHARE DATA NET ASSET VALUE BEGINNING OF PERIOD ...... $ 11.17 $ 9.14 $ 10.72 $ 18.55 $13.90 $ 12.68 INCOME FROM INVESTMENT OPERATIONS: Net Investment Income (Loss) ............. (0.10) (0.09) (0.15) (0.21) (0.26) (0.03) Net Gain (Loss) on Securities (realized and unrealized) ............... 2.51 2.12 (1.43) (4.21) 6.40 1.25 ------- ------- ------- ------- ------ ------- Total from Investment Operations ....... 2.41 2.03 (1.58) (4.42) 6.14 1.22 LESS DISTRIBUTIONS: Dividends (from Net Investment Income) ... -- -- -- -- -- -- Distributions (from Realized Gains) ...... -- -- -- (3.41) (1.49) -- ------- ------- ------- ------- ------ ------- Total Distributions .................... -- -- -- (3.41) (1.49) -- ------- ------- ------- ------- ------ ------- NET ASSET VALUE END OF PERIOD ............ $ 13.58 $ 11.17 $ 9.14 $ 10.72 $18.55 $ 13.90 ======= ======= ======= ======= ====== ======= TOTAL RETURN (a) ......................... 21.58% 22.21% (14.74%) (28.20%) 45.67% 9.62% RATIOS/SUPPLEMENTAL DATA Net Assets End of Period (thousands) ..... $ 8,001 $ 5,326 $ 4,076 $ 3,569 $2,691 $ 202 Ratio of Expenses to Average Net Assets .. 2.58% 2.77% 2.74% 2.91% 2.92% 3.00% Ratio of Net Investment Income (Loss) to Average Net Assets ..................... (1.62%) (0.96%) (1.33%) (1.57%) (1.53%) (0.49%) Portfolio Turnover Rate .................. 33% 62% 36% 38% 92% 90%
72 See accompanying notes. FINANCIAL HIGHLIGHTS (CONTINUED) SELECTED DATA FOR EACH SHARE OF CAPITAL STOCK OUTSTANDING THROUGHOUT EACH PERIOD SECURITY EQUITY FUND - SOCIAL AWARENESS SERIES (CLASS A)
FISCAL PERIOD ENDED SEPTEMBER 30 ----------------------------------------------------------------------- 2004 (b)(c)(g)(r) 2003(c) 2002(c) 2001(c) 2000(c) 1999(c) ----------------- -------- ------- -------- -------- -------- PER SHARE DATA NET ASSET VALUE BEGINNING OF PERIOD..... $ 17.84 $ 14.75 $ 17.95 $ 26.04 $ 24.05 $ 19.37 INCOME FROM INVESTMENT OPERATIONS: Net Investment Income (Loss)............ (0.05) (0.13) (0.11) (0.07) (0.13) (0.05) Net Gain (Loss) on Securities (realized and unrealized)............ 1.69 3.22 (3.09) (7.55) 2.50 5.09 ----------------- -------- ------- -------- -------- -------- Total from Investment Operations..... 1.64 3.09 (3.20) (7.62) 2.37 5.04 LESS DISTRIBUTIONS: Dividends (from Net Investment Income).. -- -- -- -- -- -- Distributions (from Realized Gains)..... -- -- -- (0.47) (0.38) (0.36) ----------------- -------- ------- -------- -------- -------- Total Distributions.................. -- -- -- (0.47) (0.38) (0.36) ----------------- -------- ------- -------- -------- -------- NET ASSET VALUE END OF PERIOD........... $ 19.48 $ 17.84 $ 14.75 $ 17.95 $ 26.04 $ 24.05 ================= ======== ======= ======== ======== ======== TOTAL RETURN (a)........................ 9.19% 20.95% (17.83%) (29.71%) 9.88% 26.12% RATIOS/SUPPLEMENTAL DATA Net Assets End of Period (thousands).... $ 10,428 $ 9,243 $ 7,355 $ 10,909 $ 17,702 $ 13,403 Ratio of Expenses to Average Net Assets. 1.79% 2.05% 1.66% 1.43% 1.42% 1.42% Ratio of Net Investment Income (Loss) to Average Net Assets.................... (0.52%) (0.76%) (0.58%) (0.30%) (0.51%) (0.22%) Portfolio Turnover Rate................. 26% 26% 3% 17% 26% 26%
SECURITY EQUITY FUND - SOCIAL AWARENESS SERIES (CLASS B)
FISCAL PERIOD ENDED SEPTEMBER 30 ------------------------------------------------------------------------ 2004(b)(c)(g)(r) 2003(c) 2002(c) 2001(c) 2000(c) 1999(c) ---------------- -------- ------- -------- -------- -------- PER SHARE DATA NET ASSET VALUE BEGINNING OF PERIOD..... $ 16.63 $ 13.85 $ 17.01 $ 24.96 $ 23.35 $ 19.01 INCOME FROM INVESTMENT OPERATIONS: Net Investment Income (Loss)............ (0.11) (0.24) (0.26) (0.28) (0.38) (0.30) Net Gain (Loss) on Securities (realized and unrealized).............. 1.57 3.02 (2.90) (7.20) 2.37 5.00 ---------------- -------- -------- -------- -------- -------- Total from Investment Operations..... 1.46 2.78 (3.16) (7.48) 1.99 4.70 LESS DISTRIBUTIONS: Dividends (from Net Investment Income).. -- -- -- -- -- -- Distributions (from Realized Gains)..... -- -- -- (0.47) (0.38) (0.36) ---------------- -------- -------- -------- -------- -------- Total Distributions.................. -- -- -- (0.47) (0.38) (0.36) ---------------- -------- -------- -------- -------- -------- NET ASSET VALUE END OF PERIOD........... $ 18.09 $ 16.63 $ 13.85 $ 17.01 $ 24.96 $ 23.35 ================ ======== ======== ======== ======== ======== TOTAL RETURN (a)....................... 8.78% 20.07% (18.58%) (30.44%) 8.53% 24.81% RATIOS/SUPPLEMENTAL DATA Net Assets End of Period (thousands).... $ 6,190 $ 6,153 $ 5,999 $ 8,969 $ 12,633 $ 9,136 Ratio of Expenses to Average Net Assets. 2.54% 2.80% 2.57% 2.43% 2.43% 2.51% Ratio of Net Investment Income (Loss) to Average Net Assets.................... (1.27%) (1.51%) (1.49%) (1.31%) (1.52%) (1.30%) Portfolio Turnover Rate................. 26% 26% 3% 17% 26% 26%
73 See accompanying notes. FINANCIAL HIGHLIGHTS (CONTINUED) SELECTED DATA FOR EACH SHARE OF CAPITAL STOCK OUTSTANDING THROUGHOUT EACH PERIOD SECURITY EQUITY FUND - SOCIAL AWARENESS SERIES (CLASS C)
FISCAL PERIOD ENDED SEPTEMBER 30 -------------------------------------------------------------------------- 2004(b)(c)(g)(r) 2003(c) 2002(c)(k) 2001(c) 2000(c) 1999(c)(e) ---------------- -------- ---------- ------- ------- ---------- PER SHARE DATA NET ASSET VALUE BEGINNING OF PERIOD..... $ 17.01 $ 14.17 $ 17.40 $ 25.50 $ 23.87 $ 24.47 INCOME FROM INVESTMENT OPERATIONS: Net Investment Income (Loss)............ (0.12) (0.24) (0.26) (0.28) (0.41) (0.22) Net Gain (Loss) on Securities (realized and unrealized).............. 1.62 3.08 (2.97) (7.35) 2.42 (0.38) ---------------- -------- ---------- ------- ------- ---------- Total from Investment Operations..... 1.50 2.84 (3.23) (7.63) 2.01 (0.60) LESS DISTRIBUTIONS: Dividends (from Net Investment Income).. -- -- -- -- -- -- Distributions (from Realized Gains)..... -- -- -- (0.47) (0.38) -- ---------------- -------- ---------- ------- ------- ---------- Total Distributions.................. -- -- -- (0.47) (0.38) -- ---------------- -------- ---------- ------- ------- ---------- NET ASSET VALUE END OF PERIOD........... $ 18.51 $ 17.01 $ 14.17 $ 17.40 $ 25.50 $ 23.87 ================ ======== ========== ======= ======= ========== TOTAL RETURN (a)....................... 8.82% 20.04% (18.56%) (30.39%) 8.43% (2.45%) RATIOS/SUPPLEMENTAL DATA Net Assets End of Period (thousands).... $ 1,717 $ 1,548 $ 1,123 $ 1,126 $ 918 $ 405 Ratio of Expenses to Average Net Assets. 2.54% 2.80% 2.57% 2.45% 2.55% 2.66% Ratio of Net Investment Income (Loss) to Average Net Assets.................... (1.27%) (1.51%) (1.48%) (1.33%) (1.64%) (1.46%) Portfolio Turnover Rate................. 26% 26% 3% 17% 26% 33%
74 See accompanying notes. FINANCIAL HIGHLIGHTS (CONTINUED) SELECTED DATA FOR EACH SHARE OF CAPITAL STOCK OUTSTANDING THROUGHOUT EACH PERIOD SECURITY EQUITY FUND - MID CAP VALUE SERIES (CLASS A)
FISCAL PERIOD ENDED SEPTEMBER 30 ------------------------------------------------------------------ 2004(c)(r) 2003(c) 2002(c) 2001(c) 2000(c) 1999(c) ---------- --------- -------- -------- -------- -------- PER SHARE DATA NET ASSET VALUE BEGINNING OF PERIOD..... $ 24.48 $ 16.90 $ 18.04 $ 20.75 $ 16.60 $ 12.07 INCOME FROM INVESTMENT OPERATIONS: Net Investment Income (Loss)............ (0.04) (0.07) (0.04) -- (0.04) (0.07) Net Gain (Loss) on Securities (realized and unrealized).............. 5.50 7.65 (0.78) (0.90) 4.89 4.65 ---------- --------- -------- -------- -------- -------- Total from Investment Operations..... 5.46 7.58 (0.82) (0.90) 4.85 4.58 LESS DISTRIBUTIONS: Dividends (from Net Investment Income).. -- -- -- -- -- -- Distributions (from Realized Gains)..... (0.26) -- (0.21) (1.81) (0.70) (0.05) Return of Capital....................... -- -- (0.11) -- -- -- ---------- --------- -------- -------- -------- -------- Total Distributions.................. (0.26) -- (0.32) (1.81) (0.70) (0.05) ---------- --------- -------- -------- -------- -------- NET ASSET VALUE END OF PERIOD........... $ 29.68 $ 24.48 $ 16.90 $ 18.04 $ 20.75 $ 16.60 ========== ========= ======== ======== ======== ======== TOTAL RETURN (a)........................ 22.41% 44.85% (4.89%) (4.54%) 30.46% 38.06% RATIOS/SUPPLEMENTAL DATA Net Assets End of Period (thousands).... $ 200,472 $ 113,822 $ 68,544 $ 50,541 $ 34,458 $ 22,804 Ratio of Expenses to Average Net Assets. 1.52% 1.65% 1.45% 1.30% 1.29% 1.33% Ratio of Net Investment Income (Loss) to Average Net Assets.................... (0.27%) (0.33%) (0.20%) 0.01% (0.25%) (0.44%) Portfolio Turnover Rate................. 31% 52% 51% 55% 69% 79%
SECURITY EQUITY FUND - MID CAP VALUE SERIES (CLASS B)
FISCAL PERIOD ENDED SEPTEMBER 30 ------------------------------------------------------------------ 2004(c)(r) 2003(c) 2002(c) 2001(c) 2000(c) 1999(c) ---------- --------- -------- -------- -------- -------- PER SHARE DATA NET ASSET VALUE BEGINNING OF PERIOD..... $ 22.99 $ 15.99 $ 17.26 $ 20.11 $ 16.26 $ 11.94 INCOME FROM INVESTMENT OPERATIONS: Net Investment Income (Loss)............ (0.13) (0.20) (0.21) (0.19) (0.22) (0.22) Net Gain (Loss) on Securities (realized and unrealized).............. 5.16 7.20 (0.74) (0.85) 4.77 4.59 ---------- --------- -------- -------- -------- -------- Total from Investment Operations..... 5.03 7.00 (0.95) (1.04) 4.55 4.37 LESS DISTRIBUTIONS: Dividends (from Net Investment Income).. -- -- -- -- -- -- Distributions (from Realized Gains)..... (0.26) -- (0.21) (1.81) (0.70) (0.05) Return of Capital -- -- (0.11) -- -- -- ---------- --------- -------- -------- -------- -------- Total Distributions.................. (0.26) -- (0.32) (1.81) (0.70) (0.05) ---------- --------- -------- -------- -------- -------- NET ASSET VALUE END OF PERIOD........... $ 27.76 $ 22.99 $ 15.99 $ 17.26 $ 20.11 $ 16.26 ========== ========= ======== ======== ======== ======== TOTAL RETURN (a)........................ 21.99% 43.78% (5.88%) (5.45%) 29.21% 36.71% RATIOS/SUPPLEMENTAL DATA Net Assets End of Period (thousands).... $ 74,196 $ 53,947 $ 37,136 $ 26,967 $ 14,041 $ 9,682 Ratio of Expenses to Average Net Assets. 2.27% 2.40% 2.34% 2.30% 2.32% 2.37% Ratio of Net Investment Income (Loss) to Average Net Assets.................... (1.04%) (1.08%) (1.09%) (0.98%) (1.27%) (1.50%) Portfolio Turnover Rate................. 31% 52% 51% 55% 69% 79%
75 See accompanying notes. FINANCIAL HIGHLIGHTS (CONTINUED) SELECTED DATA FOR EACH SHARE OF CAPITAL STOCK OUTSTANDING THROUGHOUT EACH PERIOD SECURITY EQUITY FUND - MID CAP VALUE SERIES (CLASS C)
FISCAL PERIOD ENDED SEPTEMBER 30 -------------------------------------------------------------------- 2004(c)(r) 2003(c) 2002(c)(k) 2001(c) 2000(c) 1999(c)(e) ---------- --------- ---------- ------- ------- ---------- PER SHARE DATA NET ASSET VALUE BEGINNING OF PERIOD..... $ 23.37 $ 16.26 $ 17.53 $ 20.39 $ 16.51 $ 14.54 INCOME FROM INVESTMENT OPERATIONS: Net Investment Income (Loss)............ (0.13) (0.21) (0.21) (0.19) (0.22) (0.13) Net Gain (Loss) on Securities (realized and unrealized).............. 5.24 7.32 (0.74) (0.86) 4.80 2.10 ---------- --------- ---------- ------- ------- ---------- Total from Investment Operations..... 5.11 7.11 (0.95) (1.05) 4.58 1.97 LESS DISTRIBUTIONS: Dividends (from Net Investment Income).. -- -- -- -- -- -- Distributions (from Realized Gains)..... (0.26) -- (0.21) (1.81) (0.70) -- Return of Capital....................... -- -- (0.11) -- -- -- ---------- --------- ---------- ------- ------- ---------- Total Distributions.................. (0.26) -- (0.32) (1.81) (0.70) -- ---------- --------- ---------- ------- ------- ---------- NET ASSET VALUE END OF PERIOD........... $ 28.22 $ 23.37 $ 16.26 $ 17.53 $ 20.39 $ 16.51 ========== ========= ========== ======= ======= ========== TOTAL RETURN (a)........................ 21.98% 43.73% (5.79%) (5.42%) 28.93% 13.55% RATIOS/SUPPLEMENTAL DATA Net Assets End of Period (thousands).... $ 49,203 $ 32,999 $ 18,785 $ 6,976 $ 3,069 $ 1,138 Ratio of Expenses to Average Net Assets. 2.27% 2.40% 2.35% 2.30% 2.36% 2.38% Ratio of Net Investment Income (Loss) to Average Net Assets.................... (1.04%) (1.08%) (1.06%) (0.98%) (1.28%) (1.36%) Portfolio Turnover Rate................. 31% 52% 51% 55% 69% 92%
76 See accompanying notes. FINANCIAL HIGHLIGHTS (CONTINUED) SELECTED DATA FOR EACH SHARE OF CAPITAL STOCK OUTSTANDING THROUGHOUT EACH PERIOD SECURITY EQUITY FUND - SMALL CAP GROWTH SERIES (CLASS A)
FISCAL PERIOD ENDED SEPTEMBER 30 ----------------------------------------------------------------------------- 2004(c)(g)(r) 2003(b)(c) 2002(c)(l) 2001(c) 2000(b)(c) 1999(b)(c) ------------- ---------- ---------- -------- ---------- ---------- PER SHARE DATA NET ASSET VALUE BEGINNING OF PERIOD..... $ 11.63 $ 7.88 $ 9.80 $ 22.08 $ 12.98 $ 8.70 INCOME FROM INVESTMENT OPERATIONS: Net Investment Income (Loss)............ (0.12) (0.18) (0.20) (0.18) (0.19) -- Net Gain (Loss) on Securities (realized and unrealized).............. 2.28 3.93 (1.72) (10.78) 9.75 4.28 ------------- ---------- ---------- -------- ---------- ---------- Total from Investment Operations..... 2.16 3.75 (1.92) (10.96) 9.56 4.28 LESS DISTRIBUTIONS: Dividends (from Net Investment Income).. -- -- -- -- -- -- Distributions (from Realized Gains)..... -- -- -- (1.32) (0.46) -- ------------- ---------- ---------- -------- ---------- ---------- Total Distributions.................. -- -- -- (1.32) (0.46) -- ------------- ---------- ---------- -------- ---------- ---------- NET ASSET VALUE END OF PERIOD........... $ 13.79 $ 11.63 $ 7.88 $ 9.80 $ 22.08 $ 12.98 ============= ========== ========== ======== ========== ========== TOTAL RETURN (a)....................... 18.57% 47.59% (19.59%) (51.94%) 74.58% 49.20% RATIOS/SUPPLEMENTAL DATA Net Assets End of Period (thousands).... $ 18,274 $ 14,406 $ 8,350 $ 17,235 $ 38,172 $ 16,877 Ratio of Expenses to Average Net Assets. 2.01% 2.25% 2.14% 1.91% 1.55% 0.49% Ratio of Net Investment Income (Loss) to Average Net Assets.................... (1.85%) (2.01%) (1.93%) (1.32%) (0.97%) 0.03% Portfolio Turnover Rate................. 167% 206% 302% 394% 318% 361%
SECURITY EQUITY FUND - SMALL CAP GROWTH SERIES (CLASS B)
FISCAL PERIOD ENDED SEPTEMBER 30 ----------------------------------------------------------------------------- 2004(c)(g)(r) 2003(b)(c) 2002(c)(l) 2001(c) 2000(b)(c) 1999(b)(c) ------------- ---------- ---------- -------- ---------- ---------- PER SHARE DATA NET ASSET VALUE BEGINNING OF PERIOD..... $ 10.94 $ 7.47 $ 9.37 $ 21.34 $ 12.69 $ 8.63 INCOME FROM INVESTMENT OPERATIONS: Net Investment Income (Loss)............ (0.16) (0.24) (0.26) (0.28) (0.31) (0.14) Net Gain (Loss) on Securities (realized and unrealized).............. 2.15 3.71 (1.64) (10.37) 9.42 4.20 ------------- ---------- ---------- -------- ---------- ---------- Total from Investment Operations..... 1.99 3.47 (1.90) (10.65) 9.11 4.06 LESS DISTRIBUTIONS: Dividends (from Net Investment Income).. -- -- -- -- -- -- Distributions (from Realized Gains)..... -- -- -- (1.32) (0.46) -- ------------- ---------- ---------- -------- ---------- ---------- Total Distributions.................. -- -- -- (1.32) (0.46) -- ------------- ---------- ---------- -------- ---------- ---------- NET ASSET VALUE END OF PERIOD........... $ 12.93 $ 10.94 $ 7.47 $ 9.37 $ 21.34 $ 12.69 ============= ========== ========== ======== ========== ========== TOTAL RETURN (a)....................... 18.19% 46.45% (20.28%) (52.31%) 72.70% 47.05% RATIOS/SUPPLEMENTAL DATA Net Assets End of Period (thousands).... $ 8,390 $ 6,838 $ 4,292 $ 6,173 $ 11,688 $ 2,430 Ratio of Expenses to Average Net Assets. 2.76% 3.00% 2.90% 2.67% 2.44% 1.94% Ratio of Net Investment Income (Loss) to Average Net Assets.................... (2.60%) (2.76%) (2.69%) (2.07%) (1.81%) (1.41%) Portfolio Turnover Rate................. 167% 206% 302% 394% 318% 361%
77 See accompanying notes. FINANCIAL HIGHLIGHTS (CONTINUED) SELECTED DATA FOR EACH SHARE OF CAPITAL STOCK OUTSTANDING THROUGHOUT EACH PERIOD SECURITY EQUITY FUND - SMALL CAP GROWTH SERIES (CLASS C)
FISCAL PERIOD ENDED SEPTEMBER 30 --------------------------------------------------------------------------------- 2004(c)(g)(r) 2003(b)(c) 2002(c)(k)(l) 2001(c) 2000(b)(c) 1999(b)(c)(e) ------------- ---------- -------------- ------- ---------- ------------- PER SHARE DATA NET ASSET VALUE BEGINNING OF PERIOD..... $ 11.15 $ 7.61 $ 9.53 $ 21.74 $ 12.86 $ 11.16 INCOME FROM INVESTMENT OPERATIONS: Net Investment Income (Loss)............ (0.16) (0.24) (0.26) (0.28) (0.35) (0.07) Net Gain (Loss) on Securities (realized and unrealized).............. 2.18 3.78 (1.66) (10.61) 9.69 1.77 ------------- ---------- ------------- ------- ---------- ------------- Total from Investment Operations..... 2.02 3.54 (1.92) (10.89) 9.34 1.70 LESS DISTRIBUTIONS: Dividends (from Net Investment Income).. -- -- -- -- -- -- Distributions (from Realized Gains)..... -- -- -- (1.32) (0.46) -- ------------- ---------- ------------- ------- ---------- ------------- Total Distributions.................. -- -- -- (1.32) (0.46) -- ------------- ---------- ------------- ------- ---------- ------------- NET ASSET VALUE END OF PERIOD........... $ 13.17 $ 11.15 $ 7.61 $ 9.53 $ 21.74 $ 12.86 ============= ========== ============= ======= ========== ============= TOTAL RETURN (a)....................... 18.22% 46.52% (20.15%) (52.46%) 73.54% 15.23% RATIOS/SUPPLEMENTAL DATA Net Assets End of Period (thousands).... $ 4,407 $ 3,533 $ 2,164 $ 2,339 $ 3,741 $ 890 Ratio of Expenses to Average Net Assets. 2.76% 3.00% 2.91% 2.68% 2.39% 1.47% Ratio of Net Investment Income (Loss) to Average Net Assets.................... (2.60%) (2.76%) (2.69%) (2.09%) (1.81%) (0.95%) Portfolio Turnover Rate................. 167% 206% 302% 394% 318% 374%
78 See accompanying notes. FINANCIAL HIGHLIGHTS (CONTINUED) SELECTED DATA FOR EACH SHARE OF CAPITAL STOCK OUTSTANDING THROUGHOUT EACH PERIOD SECURITY EQUITY FUND - ENHANCED INDEX SERIES (CLASS A)
FISCAL PERIOD ENDED SEPTEMBER 30 ------------------------------------------------------------------------------ 2004 (b)(c)(g)(r) 2003(b)(c)(o) 2002(c) 2001(c) 2000(c) 1999(c)(d) ----------------- ------------- -------- -------- ------- ---------- PER SHARE DATA NET ASSET VALUE BEGINNING OF PERIOD ......... $ 7.69 $ 6.30 $ 8.03 $ 11.29 $10.04 $ 10.00 INCOME FROM INVESTMENT OPERATIONS: Net Investment Income (Loss) ................ 0.01 -- (0.01) -- -- 0.03 Net Gain (Loss) on Securities (realized and unrealized) ................ 1.05 1.39 (1.72) (3.17) 1.37 0.01 ------ ---------- ------- -------- ------ --------- Total from Investment Operations ..... 1.06 1.39 (1.73) (3.17) 1.37 0.04 LESS DISTRIBUTIONS: Dividends (from Net Investment Income) ...... -- -- -- -- -- -- Distributions (from Realized Gains) ......... -- -- -- (0.09) (0.12) -- ------ ---------- ------- -------- ------ --------- Total Distributions .................. -- -- -- (0.09) (0.12) -- ------ ---------- ------- -------- ------ --------- NET ASSET VALUE END OF PERIOD ............... $ 8.75 $ 7.69 $ 6.30 $ 8.03 $11.29 $ 10.04 ====== ========== ======= ======== ====== ========= TOTAL RETURN (a) ............................ 13.78% 22.06% (21.54%) (28.27%) 13.65% 0.40% RATIOS/SUPPLEMENTAL DATA Net Assets End of Period (thousands) ........ $7,379 $ 6,377 $ 7,171 $ 6,699 $8,219 $ 7,589 Ratio of Expenses to Average Net Assets ..... 1.57% 1.73% 1.61% 1.42% 1.44% 1.48% Ratio of Net Investment Income (Loss) to Average Net Assets ....................... 0.16% 0.00% (0.10%) 0.02% (0.05%) 0.39% Portfolio Turnover Rate ..................... 66% 60% 62% 40% 73% 68%
SECURITY EQUITY FUND - ENHANCED INDEX SERIES (CLASS B)
FISCAL PERIOD ENDED SEPTEMBER 30 ------------------------------------------------------------------------------- 2004 (b)(c)(g)(r) 2003(b)(c)(o) 2002(c) 2001(c) 2000(c) 1999(c)(d) ----------------- ------------- -------- -------- ------- ---------- PER SHARE DATA NET ASSET VALUE BEGINNING OF PERIOD ......... $ 7.40 $ 6.11 $ 7.87 $ 11.15 $ 9.99 $ 10.00 INCOME FROM INVESTMENT OPERATIONS: Net Investment Income (Loss) ................ (0.02) (0.05) (0.07) (0.08) (0.09) (0.02) Net Gain (Loss) on Securities (realized and unrealized) ................ 1.00 1.34 (1.69) (3.11) 1.37 0.01 ------ ---------- ------- -------- ------- --------- Total from Investment Operations ..... 0.98 1.29 (1.76) (3.19) 1.28 (0.01) LESS DISTRIBUTIONS: Dividends (from Net Investment Income) ...... -- -- -- -- -- -- Distributions (from Realized Gains) ......... -- -- -- (0.09) (0.12) -- ------ ---------- ------- -------- ------- --------- Total Distributions .................. -- -- -- (0.09) (0.12) -- ------ ---------- ------- -------- ------- --------- NET ASSET VALUE END OF PERIOD ............... $ 8.38 $ 7.40 $ 6.11 $ 7.87 $ 11.15 $ 9.99 ====== ========== ======= ======== ======= ========= TOTAL RETURN (a) ............................ 13.24% 21.11% (22.36%) (28.81%) 12.82% (0.10%) RATIOS/SUPPLEMENTAL DATA Net Assets End of Period (thousands) ........ $5,638 $ 4,929 $ 6,125 $ 7,360 $10,960 $ 9,591 Ratio of Expenses to Average Net Assets ..... 2.32% 2.48% 2.35% 2.17% 2.18% 2.20% Ratio of Net Investment Income (Loss) to Average Net Assets ....................... (0.59%) (0.75%) (0.84%) (0.74%) (0.79%) (0.33%) Portfolio Turnover Rate ..................... 66% 60% 62% 40% 73% 68%
79 See accompanying notes. FINANCIAL HIGHLIGHTS (CONTINUED) SELECTED DATA FOR EACH SHARE OF CAPITAL STOCK OUTSTANDING THROUGHOUT EACH PERIOD SECURITY EQUITY FUND - ENHANCED INDEX SERIES (CLASS C)
FISCAL PERIOD ENDED SEPTEMBER 30 ----------------------------------------------------------------------------- 2004(b)(c)(g)(r) 2003(b)(c)(o) 2002(c)(k) 2001(c) 2000(c) 1999(c)(d) ---------------- ------------- ---------- ------- -------- ---------- PER SHARE DATA NET ASSET VALUE BEGINNING OF PERIOD ......... $ 7.42 $ 6.12 $ 7.88 $ 11.16 $ 10.00 $ 10.00 INCOME FROM INVESTMENT OPERATIONS: Net Investment Income (Loss) ................ (0.02) (0.05) (0.07) (0.08) (0.09) (0.01) Net Gain (Loss) on Securities (realized and unrealized) ................ 1.01 1.35 (1.69) (3.11) 1.37 0.01 ------ ---------- -------- ------- ------- -------- Total from Investment Operations ..... 0.99 1.30 (1.76) (3.19) 1.28 -- LESS DISTRIBUTIONS: Dividends (from Net Investment Income) ...... -- -- -- -- -- -- Distributions (from Realized Gains) ......... -- -- -- (0.09) (0.12) -- ------ ---------- -------- ------- ------- -------- Total Distributions .................. -- -- -- (0.09) (0.12) -- ------ ---------- -------- ------- ------- -------- NET ASSET VALUE END OF PERIOD ............... $ 8.41 $ 7.42 $ 6.12 $ 7.88 $ 11.16 $ 10.00 ====== ========== ======== ======= ======= ======== TOTAL RETURN (a) ............................ 13.34% 21.24% (22.34%) (28.78%) 12.69% 0.00% RATIOS/SUPPLEMENTAL DATA Net Assets End of Period (thousands) ........ $3,670 $ 2,991 $ 4,129 $ 4,840 $ 7,092 $ 5,205 Ratio of Expenses to Average Net Assets ..... 2.32% 2.47% 2.35% 2.17% 2.15% 2.05% Ratio of Net Investment Income (Loss) to Average Net Assets .................... (0.59%) (0.74%) (0.85%) (0.74%) (0.77%) (0.18%) Portfolio Turnover Rate ..................... 66% 60% 62% 40% 73% 68%
80 See accompanying notes. FINANCIAL HIGHLIGHTS (CONTINUED) SELECTED DATA FOR EACH SHARE OF CAPITAL STOCK OUTSTANDING THROUGHOUT EACH PERIOD SECURITY EQUITY FUND - SELECT 25(R) SERIES (CLASS A)
FISCAL PERIOD ENDED SEPTEMBER 30 ----------------------------------------------------------------------- 2004(c)(r) 2003(c) 2002(c) 2001(c) 2000(c) 1999(c)(d) ---------- ------- ------- ------- ------- ---------- PER SHARE DATA NET ASSET VALUE BEGINNING OF PERIOD ......... $ 7.27 $ 6.52 $ 7.58 $ 11.34 $ 10.53 $ 10.00 INCOME FROM INVESTMENT OPERATIONS: Net Investment Income (Loss) ................ (0.03) (0.05) (0.07) (0.06) (0.09) (0.05) Net Gain (Loss) on Securities (realized and unrealized) ................ 0.95 0.80 (0.99) (3.70) 0.90 0.58 ------- ------- ------- ------- ------- -------- Total from Investment Operations ..... 0.92 0.75 (1.06) (3.76) 0.81 0.53 LESS DISTRIBUTIONS: Dividends (from Net Investment Income) ...... -- -- -- -- -- -- Distributions (from Realized Gains) ......... -- -- -- -- -- -- ------- ------- ------- ------- ------- -------- Total Distributions .................. -- -- -- -- -- -- ------- ------- ------- ------- ------- -------- NET ASSET VALUE END OF PERIOD ............... $ 8.19 $ 7.27 $ 6.52 $ 7.58 $ 11.34 $ 10.53 ======= ======= ======= ======= ======= ======== TOTAL RETURN (a) ............................ 12.66% 11.50% (13.98%) (33.16%) 7.69% 5.30% RATIOS/SUPPLEMENTAL DATA Net Assets End of Period (thousands) ........ $10,898 $10,396 $11,933 $14,347 $22,006 $ 13,975 Ratio of Expenses to Average Net Assets ..... 1.50% 1.63% 1.46% 1.39% 1.35% 1.48% Ratio of Net Investment Income (Loss) to Average Net Assets ....................... (0.66%) (0.70%) (0.81%) (0.60%) (0.74%) (0.75%) Portfolio Turnover Rate ..................... 69% 54% 33% 44% 89% 14%
SECURITY EQUITY FUND - SELECT 25(R) SERIES (CLASS B)
FISCAL PERIOD ENDED SEPTEMBER 30 ----------------------------------------------------------------------- 2004(c)(r) 2003(c) 2002(c) 2001(c) 2000(c) 1999(c)(d) ---------- ------- ------- ------- ------- ---------- PER SHARE DATA NET ASSET VALUE BEGINNING OF PERIOD ......... $ 7.04 $ 6.36 $ 7.44 $ 11.22 $ 10.52 $ 10.00 INCOME FROM INVESTMENT OPERATIONS: Net Investment Income (Loss) ................ (0.05) (0.10) (0.13) (0.13) (0.17) (0.09) Net Gain (Loss) on Securities (realized and unrealized) ................ 0.91 0.78 (0.95) (3.65) 0.87 0.61 ------- ------- ------- ------- ------- -------- Total from Investment Operations ..... 0.86 0.68 (1.08) (3.78) 0.70 0.52 LESS DISTRIBUTIONS: Dividends (from Net Investment Income) ...... -- -- -- -- -- -- Distributions (from Realized Gains) ......... -- -- -- -- -- -- ------- ------- ------- ------- ------- -------- Total Distributions .................. -- -- -- -- -- -- ------- ------- ------- ------- ------- -------- NET ASSET VALUE END OF PERIOD ............... $ 7.90 $ 7.04 $ 6.36 $ 7.44 $ 11.22 $ 10.52 ======= ======= ======= ======= ======= ======== TOTAL RETURN (a) ............................ 12.22% 10.69% (14.52%) (33.69%) 6.65% 5.20% RATIOS/SUPPLEMENTAL DATA Net Assets End of Period (thousands) ........ $ 8,518 $ 8,203 $ 8,566 $11,519 $18,199 $ 12,938 Ratio of Expenses to Average Net Assets ..... 2.26% 2.38% 2.21% 2.14% 2.11% 2.19% Ratio of Net Investment Income (Loss) to Average Net Assets .................... (1.42%) (1.45%) (1.56%) (1.35%) (1.49%) (1.47%) Portfolio Turnover Rate ..................... 69% 54% 33% 44% 89% 14%
81 See accompanying notes. FINANCIAL HIGHLIGHTS (CONTINUED) SELECTED DATA FOR EACH SHARE OF CAPITAL STOCK OUTSTANDING THROUGHOUT EACH PERIOD SECURITY EQUITY FUND - SELECT 25(R) SERIES (CLASS C)
FISCAL PERIOD ENDED SEPTEMBER 30 ----------------------------------------------------------------------- 2004(c)(r) 2003(c) 2002(c)(k) 2001(c) 2000(c) 1999(c)(d) ---------- ------- ---------- ------- ------- ---------- PER SHARE DATA NET ASSET VALUE BEGINNING OF PERIOD ......... $ 7.06 $ 6.38 $ 7.47 $ 11.26 $ 10.55 $ 10.00 INCOME FROM INVESTMENT OPERATIONS: Net Investment Income (Loss) ................ (0.05) (0.10) (0.13) (0.13) (0.17) (0.09) Net Gain (Loss) on Securities (realized and unrealized) ................. 0.91 0.78 (0.96) (3.66) 0.88 0.64 ------- ------- -------- ------- ------- -------- Total from Investment Operations ..... 0.86 0.68 (1.09) (3.79) 0.71 0.55 LESS DISTRIBUTIONS: Dividends (from Net Investment Income) ...... -- -- -- -- -- -- Distributions (from Realized Gains) ......... -- -- -- -- -- -- ------- ------- -------- ------- ------- -------- Total Distributions .................. -- -- -- -- -- -- ------- ------- -------- ------- ------- -------- NET ASSET VALUE END OF PERIOD ............... $ 7.92 $ 7.06 $ 6.38 $ 7.47 $ 11.26 $ 10.55 ======= ======= ======== ======= ======= ======== TOTAL RETURN (a) ............................ 12.18% 10.66% (14.59%) (33.66%) 6.73% 5.50% RATIOS/SUPPLEMENTAL DATA Net Assets End of Period (thousands) ........ $ 6,821 $ 6,225 $ 3,954 $ 4,531 $ 7,294 $ 4,442 Ratio of Expenses to Average Net Assets ..... 2.26% 2.37% 2.21% 2.14% 2.10% 2.07% Ratio of Net Investment Income (Loss) to Average Net Assets ....................... (1.42%) (1.44%) (1.56%) (1.35%) (1.49%) (1.34%) Portfolio Turnover Rate ..................... 69% 54% 33% 44% 89% 14%
82 See accompanying notes. FINANCIAL HIGHLIGHTS (CONTINUED) SELECTED DATA FOR EACH SHARE OF CAPITAL STOCK OUTSTANDING THROUGHOUT EACH PERIOD SECURITY EQUITY FUND - LARGE CAP GROWTH SERIES (CLASS A)
FISCAL PERIOD ENDED SEPTEMBER 30 ------------------------------------------------------------------------- 2004(b)(c)(g)(r) 2003(c) 2002(c) 2001(b)(c)(g) 2000(c)(f)(g) ---------------- ---------- --------- ------------- ------------- PER SHARE DATA NET ASSET VALUE BEGINNING OF PERIOD ............ $ 5.62 $ 4.60 $ 6.00 $ 9.71 $ 10.00 INCOME FROM INVESTMENT OPERATIONS: Net Investment Income (Loss) ................... (0.02) (0.04) (0.05) (0.08) (0.05) Net Gain (Loss) on Securities (realized and unrealized) .................... 0.49 1.06 (1.35) (3.63) (0.24) ---------- -------- ------- --------- --------- Total from Investment Operations ......... 0.47 1.02 (1.40) (3.71) (0.29) LESS DISTRIBUTIONS: Dividends (from Net Investment Income) ......... -- -- -- -- -- Distributions (from Realized Gains) ............ -- -- -- -- -- ---------- -------- ------- --------- --------- Total Distributions ...................... -- -- -- -- -- ---------- -------- ------- --------- --------- NET ASSET VALUE END OF PERIOD .................. $ 6.09 $ 5.62 $ 4.60 $ 6.00 $ 9.71 ========== ======== ======= ========= ========= TOTAL RETURN (a) ............................... 8.36% 22.17% (23.33%) (38.21%) (2.90%) RATIOS/SUPPLEMENTAL DATA Net Assets End of Period (thousands) ........... $ 18,229 $ 16,179 $ 9,243 $ 2,436 $ 2,405 Ratio of Expenses to Average Net Assets ........ 1.81% 1.83% 1.99% 2.00% 1.92% Ratio of Net Investment Income (Loss) to Average Net Assets .......................... (0.70%) (0.71%) (1.00%) (1.10%) (1.25%) Portfolio Turnover Rate ........................ 42% 39% 12% 6% 5%
SECURITY EQUITY FUND - LARGE CAP GROWTH SERIES (CLASS B)
FISCAL PERIOD ENDED SEPTEMBER 30 ------------------------------------------------------------------------- 2004(b)(c)(g)(r) 2003(c) 2002(c) 2001(b)(c) 2000(c)(f)(g) ---------------- ---------- --------- ------------- ------------- PER SHARE DATA NET ASSET VALUE BEGINNING OF PERIOD ............ $ 5.45 $ 4.50 $ 5.92 $ 9.65 $ 10.00 INCOME FROM INVESTMENT OPERATIONS: Net Investment Income (Loss) ................... (0.04) (0.07) (0.11) (0.14) (0.08) Net Gain (Loss) on Securities (realized and unrealized) .................... 0.48 1.02 (1.31) (3.59) (0.27) ----------- -------- ------- ----------- ----------- Total from Investment Operations ......... 0.44 0.95 (1.42) (3.73) (0.35) LESS DISTRIBUTIONS: Dividends (from Net Investment Income) ......... -- -- -- -- -- Distributions (from Realized Gains) ............ -- -- -- -- -- ----------- -------- ------- ----------- ----------- Total Distributions ...................... -- -- -- -- -- ----------- -------- ------- ----------- ----------- NET ASSET VALUE END OF PERIOD .................. $ 5.89 $ 5.45 $ 4.50 $ 5.92 $ 9.65 =========== ======== ======= =========== =========== TOTAL RETURN (a) ............................... 8.07% 21.11% (23.99%) (38.65%) (3.50%) RATIOS/SUPPLEMENTAL DATA Net Assets End of Period (thousands) ........... $ 7,578 $ 6,557 $ 1,949 $ 1,955 $ 2,039 Ratio of Expenses to Average Net Assets ........ 2.57% 2.59% 2.82% 2.75% 2.68% Ratio of Net Investment Income (Loss) to Average Net Assets .......................... (1.46%) (1.49%) (1.88%) (1.85%) (2.02%) Portfolio Turnover Rate ........................ 42% 39% 12% 6% 5%
83 See accompanying notes. FINANCIAL HIGHLIGHTS (CONTINUED) SELECTED DATA FOR EACH SHARE OF CAPITAL STOCK OUTSTANDING THROUGHOUT EACH PERIOD SECURITY EQUITY FUND - LARGE CAP GROWTH SERIES (CLASS C)
FISCAL PERIOD ENDED SEPTEMBER 30 ------------------------------------------------------------------------- 2004(b)(c)(g)(r) 2003(c) 2002(c)(k) 2001(b)(c) 2000(c)(f)(g) ---------------- ------- ---------- ---------- ------------- PER SHARE DATA NET ASSET VALUE BEGINNING OF PERIOD............. $ 5.48 $ 4.52 $ 5.93 $ 9.65 $ 10.00 INCOME FROM INVESTMENT OPERATIONS: Net Investment Income (Loss).................... (0.04) (0.07) (0.11) (0.13) (0.08) Net Gain (Loss) on Securities (realized and unrealized)..................... 0.48 1.03 (1.30) (3.59) (0.27) ----------- ------ -------- ----------- ----------- Total from Investment Operations.......... 0.44 0.96 (1.41) (3.72) (0.35) LESS DISTRIBUTIONS: Dividends (from Net Investment Income).......... -- -- -- -- -- Distributions (from Realized Gains)............. -- -- -- -- -- ----------- ------ -------- ----------- ----------- Total Distributions....................... -- -- -- -- -- ----------- ------ -------- ----------- ----------- NET ASSET VALUE END OF PERIOD................... $ 5.92 $ 5.48 $ 4.52 $ 5.93 $ 9.65 =========== ====== ======== =========== =========== TOTAL RETURN (a)................................ 8.03% 21.24% (23.78%) (38.55%) (3.50%) RATIOS/SUPPLEMENTAL DATA Net Assets End of Period (thousands)............ $ 3,506 $3,432 $ 2,547 $ 2,577 $ 2,102 Ratio of Expenses to Average Net Assets......... 2.57% 2.58% 2.82% 2.75% 2.66% Ratio of Net Investment Income (Loss) to Average Net Assets.................................. (1.46%) (1.44%) (1.88%) (1.85%) (2.00%) Portfolio Turnover Rate......................... 42% 39% 12% 6% 5%
84 See accompanying notes. FINANCIAL HIGHLIGHTS (CONTINUED) SELECTED DATA FOR EACH SHARE OF CAPITAL STOCK OUTSTANDING THROUGHOUT EACH PERIOD SECURITY EQUITY FUND - ALPHA OPPORTUNITY SERIES (CLASS A)
FISCAL PERIOD ENDED SEPTEMBER 30 -------------------------------- 2004(b)(c)(g)(r) 2003(b)(c)(n) ---------------- ------------- PER SHARE DATA NET ASSET VALUE BEGINNING OF PERIOD ........... $ 10.21 $ 10.00 INCOME FROM INVESTMENT OPERATIONS: Net Investment Income (Loss) .................. (0.09) (0.03) Net Gain (Loss) on Securities (realized and unrealized) ................... 1.93 0.24 ------------ ------------ Total from Investment Operations ....... 1.84 0.21 LESS DISTRIBUTIONS: Dividends (from Net Investment Income) ........ -- -- Distributions (from Realized Gains) ........... (0.59) -- ------------ ------------ Total Distributions .................... (0.59) -- ------------ ------------ NET ASSET VALUE END OF PERIOD ................. $ 11.46 $ 10.21 ============ ============ TOTAL RETURN (a) .............................. 18.16% 2.10% RATIOS/SUPPLEMENTAL DATA Net Assets End of Period (thousands) .......... $ 4,821 $ 2,935 Ratio of Expenses to Average Net Assets ....... 2.77% 2.75% Ratio of Net Investment Income (Loss) to Average Net Assets ........................ (1.61%) (1.35%) Portfolio Turnover Rate ....................... 904% 867%
SECURITY EQUITY FUND - ALPHA OPPORTUNITY SERIES (CLASS B)
FISCAL PERIOD ENDED SEPTEMBER 30 -------------------------------- 2004(b)(c)(g)(r) 2003(b)(c)(n) ---------------- ------------- PER SHARE DATA NET ASSET VALUE BEGINNING OF PERIOD .......... $ 10.20 $ 10.00 INCOME FROM INVESTMENT OPERATIONS: Net Investment Income (Loss) ................. (0.13) (0.05) Net Gain (Loss) on Securities (realized and unrealized) ................. 1.92 0.25 ------------ ----------- Total from Investment Operations .... 1.79 0.20 LESS DISTRIBUTIONS: Dividends (from Net Investment Income) ....... -- -- Distributions (from Realized Gains) .......... (0.59) -- ------------ ----------- Total Distributions ................. (0.59) -- ------------ ----------- NET ASSET VALUE END OF PERIOD ................ $ 11.40 $ 10.20 ============ =========== TOTAL RETURN (a) ............................. 17.79% 2.00% RATIOS/SUPPLEMENTAL DATA Net Assets End of Period (thousands) ......... $ 2,140 $ 1,731 Ratio of Expenses to Average Net Assets ...... 3.52% 3.50% Ratio of Net Investment Income (Loss) to Average Net Assets ..................... (2.37%) (2.11%) Portfolio Turnover Rate ...................... 904% 867%
85 See accompanying notes. FINANCIAL HIGHLIGHTS (CONTINUED) SELECTED DATA FOR EACH SHARE OF CAPITAL STOCK OUTSTANDING THROUGHOUT EACH PERIOD SECURITY EQUITY FUND - ALPHA OPPORTUNITY SERIES (CLASS C)
FISCAL PERIOD ENDED SEPTEMBER 30 -------------------------------- 2004(b)(c)(g)(r) 2003(b)(c)(n) ---------------- ------------- PER SHARE DATA NET ASSET VALUE BEGINNING OF PERIOD ............ $ 10.20 $ 10.00 INCOME FROM INVESTMENT OPERATIONS: Net Investment Income (Loss) ................... (0.13) (0.05) Net Gain (Loss) on Securities (realized and unrealized) ................... 1.92 0.25 ------------ ------------ Total from Investment Operations ...... 1.79 0.20 LESS DISTRIBUTIONS: Dividends (from Net Investment Income) ......... -- -- Distributions (from Realized Gains) ............ (0.59) -- ------------ ------------ Total Distributions ................... (0.59) -- ------------ ------------ NET ASSET VALUE END OF PERIOD .................. $ 11.40 $ 10.20 ============ ============ TOTAL RETURN (a) ............................... 17.79% 2.00% RATIOS/SUPPLEMENTAL DATA Net Assets End of Period (thousands) ........... $ 2,688 $ 1,723 Ratio of Expenses to Average Net Assets ........ 3.52% 3.50% Ratio of Net Investment Income (Loss) to Average Net Assets ............................... (2.36%) (2.11%) Portfolio Turnover Rate ........................ 904% 867%
86 See accompanying notes. FINANCIAL HIGHLIGHTS (CONTINUED) SELECTED DATA FOR EACH SHARE OF CAPITAL STOCK OUTSTANDING THROUGHOUT EACH PERIOD SECURITY MID CAP GROWTH FUND (CLASS A)
FISCAL PERIOD ENDED SEPTEMBER 30 -------------------------------------------------------------------------------- 2004(c)(q)(r) 2003(c) 2002(c)(m) 2001(c) 2000(c) 1999(c) ------------- ----------- ----------- ---------- ---------- ----------- PER SHARE DATA NET ASSET VALUE BEGINNING OF PERIOD ............ $ 10.84 $ 7.03 $ 8.48 $ 15.28 $ 9.19 $ 7.65 INCOME FROM INVESTMENT OPERATIONS: Net Investment Income (Loss) ................... (0.06) (0.10) (0.09) (0.07) (0.08) (0.06) Net Gain (Loss) on Securities (realized and unrealized) ................... 2.02 3.91 (1.30) (5.38) 6.60 3.51 ----------- --------- --------- -------- -------- --------- Total from Investment Operations ...... 1.96 3.81 (1.39) (5.45) 6.52 3.45 LESS DISTRIBUTIONS: Dividends (from Net Investment Income) ......... -- -- -- -- -- -- Distributions (from Realized Gains) ............ (0.40) -- (0.06) (1.35) (0.43) (1.91) ----------- --------- --------- -------- -------- --------- Total Distributions ................... (0.40) -- (0.06) (1.35) (0.43) (1.91) ----------- --------- --------- -------- -------- --------- NET ASSET VALUE END OF PERIOD .................. $ 12.40 $ 10.84 $ 7.03 $ 8.48 $ 15.28 $ 9.19 =========== ========= ========= ======== ======== ========= TOTAL RETURN (a) ............................... 18.41% 54.20% (16.64%) (38.19%) 72.82% 50.91% RATIOS/SUPPLEMENTAL DATA Net Assets End of Period (thousands) ........... $ 169,857 $ 134,208 $ 90,948 $131,498 $204,787 $ 96,238 Ratio of Expenses to Average Net Assets ........ 1.39% 1.41% 1.20% 1.09% 1.11% 1.21% Ratio of Net Investment Income (Loss) to Average Net Assets ....................... (1.05%) (1.14%) (0.92%) (0.64%) (0.62%) (0.77%) Portfolio Turnover Rate ........................ 55% 57% 47% 48% 35% 54%
SECURITY MID CAP GROWTH FUND (CLASS B)
FISCAL PERIOD ENDED SEPTEMBER 30 -------------------------------------------------------------------------------- 2004(c)(q)(r) 2003(c) 2002(c)(m) 2001(c) 2000(c) 1999(c) ------------- ----------- ---------- ---------- ---------- ----------- PER SHARE DATA NET ASSET VALUE BEGINNING OF PERIOD ............ $ 9.57 $ 6.26 $ 7.62 $ 14.02 $ 8.54 $ 7.28 INCOME FROM INVESTMENT OPERATIONS: Net Investment Income (Loss) ................... (0.09) (0.15) (0.16) (0.17) (0.19) (0.14) Net Gain (Loss) on Securities (realized and unrealized) ................... 1.78 3.46 (1.14) (4.88) 6.10 3.31 ----------- --------- -------- -------- -------- -------- Total from Investment Operations ...... 1.69 3.31 (1.30) (5.05) 5.91 3.17 LESS DISTRIBUTIONS: Dividends (from Net Investment Income) ......... -- -- -- -- -- -- Distributions (from Realized Gains) ............ (0.40) -- (0.06) (1.35) (0.43) (1.91) ----------- --------- -------- -------- -------- -------- Total Distributions ................... (0.40) -- (0.06) (1.35) (0.43) (1.91) ----------- --------- -------- -------- -------- -------- NET ASSET VALUE END OF PERIOD .................. $ 10.86 $ 9.57 $ 6.26 $ 7.62 $ 14.02 $ 8.54 =========== ========= ======== ======== ======== ======== TOTAL RETURN (a) ............................... 18.02% 52.88% (17.35%) (38.83%) 71.17% 49.39% RATIOS/SUPPLEMENTAL DATA Net Assets End of Period (thousands) ........... $ 31,787 $ 26,459 $ 17,502 $ 28,580 $ 38,812 $ 7,818 Ratio of Expenses to Average Net Assets ........ 2.14% 2.16% 2.11% 2.09% 2.11% 2.21% Ratio of Net Investment Income (Loss) to Average Net Assets ....................... (1.81%) (1.89%) (1.84%) (1.64%) (1.61%) (1.77%) Portfolio Turnover Rate ........................ 55% 57% 47% 48% 35% 54%
87 See accompanying notes. FINANCIAL HIGHLIGHTS (CONTINUED) SELECTED DATA FOR EACH SHARE OF CAPITAL STOCK OUTSTANDING THROUGHOUT EACH PERIOD SECURITY MID CAP GROWTH FUND (CLASS C)
FISCAL PERIOD ENDED SEPTEMBER 30 --------------------------------------------------------------------------------- 2004(c)(q)(r) 2003(c) 2002(c)(k)(m) 2001(c) 2000(c) 1999(c)(e) ------------- ------- ------------- ------- ------- ---------- PER SHARE DATA NET ASSET VALUE BEGINNING OF PERIOD ............ $ 10.34 $ 6.76 $ 8.22 $ 14.99 $ 9.11 $ 8.20 INCOME FROM INVESTMENT OPERATIONS: Net Investment Income (Loss) ................... (0.10) (0.16) (0.16) (0.18) (0.20) (0.07) Net Gain (Loss) on Securities (realized and unrealized) ................... 1.94 3.74 (1.24) (5.24) 6.51 0.98 ---------- --------- ----------- ------- ------- ---------- Total from Investment Operations ...... 1.84 3.58 (1.40) (5.42) 6.31 0.91 LESS DISTRIBUTIONS: Dividends (from Net Investment Income) ......... -- -- -- -- -- -- Distributions (from Realized Gains) ............ (0.40) -- (0.06) (1.35) (0.43) -- ---------- --------- ----------- ------- ------- ---------- Total Distributions ................... (0.40) -- (0.06) (1.35) (0.43) -- ---------- --------- ----------- ------- ------- ---------- NET ASSET VALUE END OF PERIOD .................. $ 11.78 $ 10.34 $ 6.76 $ 8.22 $ 14.99 $ 9.11 ========== ========= =========== ======= ======= ========== TOTAL RETURN (a) ............................... 18.13% 52.96% (17.30%) (38.78%) 71.10% 11.10% RATIOS/SUPPLEMENTAL DATA Net Assets End of Period (thousands) ........... $ 17,277 $ 11,279 $ 5,883 $ 4,194 $ 3,017 $ 95 Ratio of Expenses to Average Net Assets ........ 2.14% 2.16% 2.12% 2.09% 2.11% 2.21% Ratio of Net Investment Income (Loss) to Average Net Assets ....................... (1.81%) (1.89%) (1.85%) (1.66%) (1.61%) (1.75%) Portfolio Turnover Rate ........................ 55% 57% 47% 48% 35% 54%
88 See accompanying notes. FINANCIAL HIGHLIGHTS (CONTINUED) SELECTED DATA FOR EACH SHARE OF CAPITAL STOCK OUTSTANDING THROUGHOUT EACH PERIOD (a) Total return information does not reflect deduction of any sales charges imposed at the time of purchase for Class A shares or upon redemption for Class B and C. (b) Fund expenses were reduced by the Invest Management during the period and expense ratios absent such reimbursement would have been as follows:
2004 2003 2002 2001 2000 1999 ---- ---- ---- ---- ---- ---- Social Awareness Series Class A 1.87% * * * * * Class B 2.63% * * * * * Class C 2.63% * * * * * Small Cap Growth Series Class A * 2.51% * * 1.64% 1.49% Class B * 3.23% * * 2.48% 2.94% Class C * 3.23% * * 2.47% 2.96% Enhanced Index Series Class A 1.82% 1.83% * * * * Class B 2.57% 2.58% * * * * Class C 2.57% 2.57% * * * * Large Cap Growth Series Class A 1.90% * * 2.15% * - Class B 2.65% * * 2.92% * - Class C 2.65% * * 2.92% * - Alpha Opportunity Series Class A 3.34% 3.25% - - - - Class B 4.09% 4.01% - - - - Class C 4.09% 4.01% - - - -
*Ratio is as reported in the accompanying financial highlights. (c) Net investment income (loss) was computed using average shares outstanding throughout the period. (d) Security Enhanced Index Series and Security Select 25(R) Series were initially capitalized on January 29, 1999, with a net asset value of $10 per share. Percentage amounts for the period, except for total return, have been annualized. (e) Class "C" Shares were initially offered for sale January 29, 1999. on Percentage amounts for the period, except total return, have been annualized. (f) Security Large Cap Growth Series initially capitalized on May 1, was 2000, with a net asset value of $10 per share. Percentage amounts for the period, except total return, have been annualized. (g) Expense ratios, including reimbursements, were calculated without the reduction for custodian fees earnings credits. Expense ratios with such reductions would have been as follows:
2004 2003 2002 2001 2000 1999 ---- ---- ---- ---- ---- ---- Security Large Cap Value Fund Class A * * * * * * Class B * * * * * * Class C * * * * * * Equity Series Class A * * * * * * Class B * * * * * * Class C * * * * * * Global Series Class A * * * * * * Class B * * * * * * Class C * * * * * * Social Awareness Series Class A 1.78% * * * * * Class B 2.53% * * * * * Class C 2.53% * * * * * Mid Cap Value Series Class A * * * * * * Class B * * * * * * Class C * * * * * * Small Cap Growth Series Class A 1.99% * * * * * Class B 2.75% * * * * * Class C 2.75% * * * * * Enhanced Index Series Class A 1.56% * * * * * Class B 2.31% * * * * * Class C 2.31% * * * * * Select 25(R) Series Class A * * * * * * Class B * * * * * * Class C * * * * * * Large Cap Growth Series Class A 1.80% * * 1.99% 1.85% - Class B 2.56% * * * 2.61% - Class C 2.56% * * * 2.60% - Alpha Opportunity Series Class A 2.75% * - - - - Class B 3.50% * - - - - Class C 3.50% * - - - - Seccurity Mid Cap Growth Fund Class A * * * * * * Class B * * * * * * Class C * * * * * *
*Ratio is as reported in the accompanying financial highlights. (h) The Dreyfus Corporation became sub-advisor of Security Large Cap Value Fund effective January 1, 2001. Prior to January 1, 2001, advisory services were provided by the Investment Manager. (i) As required, effective October 1, 2001, the Funds adopted the provisions of the AICPA Audit and Accounting Guide for Investment Companies and began amortizing premiums on fixed income securities. The effect of this change for the period ended September 30, 2002, was to increase net investment income per share by less than 1/2 of a cent, decrease net realized and unrealized gains and losses per share by less than 1/2 of a cent and increase the ratio of net investment income to average net assets from 0.06% to 0.07%. Per share, ratios and supplemental data for periods prior to October 1, 2001 have not been restated to reflect this change in presentation. (j) The financial highlights for the Equity Series as set forth herein exclude the historical financial highlights of the Total Return Series Class A, B and C shares. The assets of the Total Return Series were acquired by the Equity Series on August 27, 2002. (k) The financial highlights for the Class C shares exclude the historical financial highlights of the Class S shares. Class S shares were exchanged for Class C shares on June 3, 2002. (l) RS Investments, Inc., became the sub-advisor of Small Cap Growth Series effective September 3, 2002. Prior to September 3, 2002, Security Management Company, LLC (SMC) paid Strong Capital Management, Inc., for sub-advisory services. (m) Effective May 1, 2002 the fee structure for Security Large Cap Value Fund, Equity, Global Series and Security Mid Cap Growth Fund changed. Per share information reflects this change. (n) Security Alpha Opportunity Series was initially capitalized on July 7, 2003, with a net asset value of $10 per share. Percentage amounts for the period, except for total return, have been annualized. (o) Northern Trust became the subadvisor of Enhanced Index effective May 1, 2003. Prior to May 1, 2003 Security Management Company, LLC (SMC) paid Deutsche Asset Management, Inc. for subadvisory services. (p) The financial highlights for the Global Series as set forth herein exclude the historical financial highlights of the International Series Class A, B and C shares. The assets of the International Series were acquired by the Global Series on October 3, 2003. (q) The financial highlights for the Security Mid Cap Growth Fund as set forth herein exclude the historical financial highlights of the Technology Series Class A, B and C shares. The assets of the Technology Series were acquired by the Security Mid Cap Growth Fund on October 3, 2003. (r) Unaudited figures for the six months ended March 31, 2004. Percentage amounts for the period, except total return, have been annualized. 89 See accompanying notes. NOTES TO FINANCIAL STATEMENTS MARCH 31, 2004 1. SIGNIFICANT ACCOUNTING POLICIES Security Large Cap Value, Equity and Mid Cap Growth Funds (the Funds) are registered under the Investment Company Act of 1940, as amended, as open-end management investment companies. The shares of Security Equity Fund are currently issued in multiple Series, with each Series, in effect, representing a separate fund. The Fund is required to account for the assets of each Series separately and to allocate general liabilities of the Fund to each Series based on the relative net assets of each Series. Class "A" shares are generally sold with a sales charge at the time of purchase. Class "A" shares are not subject to a sales charge when they are redeemed, except that purchases of Class "A" shares of $1 million or more sold without a front-end sales charge are subject to a contingent deferred sales charge if redeemed within one year of purchase. Class "B" shares are offered without a front-end sales charge but incur additional class-specific expenses. Class B shares may be subject to a contingent deferred sales charge for six years and automatically convert to Class A shares after eight years. Redemptions of the shares within five years of acquisition incur a contingent deferred sales charge. Class "C" shares are offered without a front-end sales charge but incur additional class-specific expenses. Redemptions of the shares within one year of acquisition incur a contingent deferred sales charge. The following is a summary of the significant accounting policies followed by the Funds in the preparation of their financial statements. A. SECURITY VALUATION - Valuations of the Fund's securities are supplied by pricing services approved by the Board of Directors. The Fund's officers, under the general supervision of the Board of Directors, regularly review procedures used by, and valuations provided by, the pricing services. Each security owned by a Fund that is listed on a securities exchange is valued at its last sale price on that exchange on the date as of which assets are valued. Where the security is listed on more than one exchange, the Fund will use the price of that exchange that it generally considers to be the principal exchange on which the stock is traded. Fund securities listed on the Nasdaq Stock Market, Inc. ("Nasdaq") will be valued at the Nasdaq Official Closing Price, which may not necessarily represent the last sale price. If there has been no sale on such exchange or Nasdaq on such day, the security is valued at the closing bid price on such day. Securities for which market quotations are not readily available are valued by a pricing service considering securities with similar yields, quality, type of issue, coupon, duration and rating. If there is no bid price or if the bid price is deemed to be unsatisfactory by the Board of Directors or by the Fund's investment manager, then the securities are valued in good faith by such method as the Board of Directors determines will reflect the fair value. If events occur that will affect the value of a fund's portfolio securities before the NAV has been calculated (a "significant event"), the security will generally be priced using a fair value procedure. If the Valuation Committee determines a significant event has occurred, it will evaluate the impact of that event on an affected security or securities, to determine whether a fair value adjustment would materially affect the fund's NAV per share. Some of the factors which may be considered by the Board of Directors in determining fair value are fundamental analytical data relating to the investment; the nature and duration of any restrictions on disposition; trading in similar securities of the same issuer or comparable companies; information from broker-dealers; and an evaluation of the forces that influence the market in which the securities are purchased and sold. The Fund generally will value short-term debt securities at prices based on market quotations for such securities or securities of similar type, yield, quality and duration, except those securities purchased with 60 days or less to maturity are valued on the basis of amortized cost which approximates market value. Generally, trading in foreign securities markets is substantially completed each day at various times prior to the close of the New York Stock Exchange. The values of foreign securities are determined as of the close of such foreign markets or the close of the New York Stock Exchange, if earlier. All investments quoted in foreign currency are valued in U.S. dollars on the basis of the foreign currency exchange rates prevailing at the close of business. Investments in foreign securities may involve risks not present in domestic investments. Since foreign securities may be denominated in a foreign currency and involve settlement and pay interest or dividends in foreign currencies, changes in the relationship of these foreign currencies to the U.S. dollar can significantly affect the value of the investments and earnings of the Funds. Foreign investments may also subject the these Series to foreign government exchange restrictions, expropriation, taxation or other political, social or economic developments, all of which could affect the market and/or credit risk of the investments. B. REPURCHASE AGREEMENTS - In connection with transactions in repurchase agreements, it is the Funds' policy that its custodian take possession of the underlying collateral securities, the fair value of which exceeds the principal amount of the repurchase transaction, including accrued interest, at all times. If the seller defaults, and the fair value of the collateral declines, realization of the collateral by the Funds may be delayed or limited. C. FOREIGN CURRENCY TRANSACTIONS - The accounting records of the Funds are maintained in U.S. dollars. All assets and liabilities initially expressed in foreign currencies are converted into U.S. dollars at prevailing exchange rates. Purchases and sales of investment securities, dividend and interest income, and certain expenses are translated at the rates of exchange prevailing on the respective dates of such transactions. The Funds do not isolate that portion of the results of operations resulting from changes in the foreign exchange rates on investments from the fluctuations arising from changes in the market prices of securities held. Such fluctuations are included with the net realized and unrealized gain or loss on investments. Net realized foreign exchange gains or losses arise from sales of portfolio securities, sales of foreign currencies, and the difference between asset and liability amounts initially stated in foreign currencies and the U.S. dollar value of the amounts actually received or paid. Net unrealized foreign exchange gains or losses arise from changes in the value of portfolio securities and other assets and liabilities at the end of the reporting period, resulting from changes in the exchange rates. D. FORWARD FOREIGN CURRENCY EXCHANGE CONTRACTS - Global Series may enter into forward foreign exchange contracts in order to manage foreign currency risk from purchase or sale of securities denominated in foreign currency. The Series may also enter into such contracts to manage changes in foreign currency exchange rates on portfolio positions. These contracts are marked to market daily, by recognizing the difference between the contract exchange rate and the current market rate as unrealized gains or losses. Realized gains or losses are recognized when contracts are settled and are reflected in the Statement of Operations. These contracts involve market risk in 90 NOTES TO FINANCIAL STATEMENTS (CONTINUED) MARCH 31, 2004 excess of the amount reflected in the Statement of Assets and Liabilities. The face or contract amount in U.S. dollars reflects the total exposure these funds have in that particular currency contract. Losses may arise due to changes in the value of the foreign currency or if the counterparty does not perform under the contract. E. FUTURES - Large Cap Value Fund, Equity Series, Social Awareness Series, Small Cap Growth Series, Enhanced Index Series, Alpha Opportunity Series and Mid Cap Growth Fund utilize futures contracts to a limited extent, with the objectives of maintaining full exposure to the underlying stock market, enhancing returns, maintaining liquidity, and minimizing transaction costs. These Funds or Series, as applicable, may purchase futures contracts to immediately position incoming cash in the market, thereby simulating a fully invested position in the underlying index while maintaining a cash balance for liquidity. In the event of redemptions, the Funds or Series, as applicable, may pay departing shareholders from its cash balances and reduce their futures positions accordingly. Returns may be enhanced by purchasing futures contracts instead of the underlying securities when futures are believed to be priced more attractively than the underlying securities. The primary risks associated with the use of futures contracts are imperfect correlation between changes in market values of stocks contained in the indexes and the prices of futures contracts, and the possibility of an illiquid market. Futures contracts are valued based upon their quoted daily settlement prices. Upon entering into a futures contract, the Funds are required to deposit and maintain as collateral either cash or securities, representing the initial margin, equal to a certain percentage of the contract value. Cash deposits are shown as restricted cash on the Statement of Assets and Liabilities; securities are noted in the Schedule of Investments. Subsequent changes in the value of the contract, or variation margin, are recorded as unrealized gains or losses. The variation margin is paid or received in cash daily by the Funds. The Funds realize a gain or loss when the contract is closed or expires. F. OPTIONS WRITTEN - The Fund may purchase put and call options and write such options on a covered basis on securities that are traded on recognized securities exchanges and over-the-counter markets. Call and put options on securities give the holder the right to purchase or sell, respectively, (and the writer the obligation to sell or purchase) a security at a specified price, until a certain date. Options may be used to hedge the Fund's portfolio, to increase returns or to maintain exposure to the equity markets. The primary risks associated with the use of options are an imperfect correlation between the change in market value of the securities held by the series and the price of the option, the possibility of an illiquid market, and the inability of the counterparty to meet the terms of the contract. The premium received for a written option is recorded as an asset with an equal liability which is marked to market based on the option's quoted daily settlement price. Fluctuations in the value of such instruments are recorded as unrealized appreciation (depreciation) until terminated, at which time realized gains and losses are recognized. G. SECURITY TRANSACTIONS AND INVESTMENT INCOME - Security transactions are accounted for on the date the securities are purchased or sold (trade date). Realized gains and losses are reported on an identified cost basis. Dividend income less foreign taxes withheld (if any) plus foreign taxes recoverable (if any) are recorded on the ex-dividend date. Interest income is recognized on the accrual basis including the amortization of premiums and accretion of discounts on debt securiities. H. EXPENSES - Expenses that are directly related to one of the Funds are charged directly to that Fund. Other operating expenses are allocated to the Funds on the basis of relative net assets. Class specific expenses, such as 12b-1 fees, are borne by that class. Income, other expenses and realized and unrealized gains and losses of a Fund are allocated to each respective class in proportion to the relative net assets of each class. I. DISTRIBUTIONS TO SHAREHOLDERS - Distributions to shareholders are recorded on the ex-dividend date. The character of distributions made during the year from net investment income or net realized gains may differ from their ultimate characterization for federal income tax purposes. J. TAXES - The Funds complied with the requirements of the Internal Revenue Code applicable to regulated investment companies and distributed all of their taxable net income and net realized gains sufficient to relieve them from all, or substantially all, federal income, excise and state income taxes. Therefore, no provision for federal or state income tax is required. K. USE OF ESTIMATES - The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of increases and decreases in net assets from operations during the reporting period. Actual results could differ from those estimates. L. SHORT SALES - Certain Funds may make short sales "against the box," in which the Fund enters into a short sale of a security it owns. At no time will more than 15% of the value of the Funds' net assets be in deposits on short sales against the box. In a short sale that is not "against the box," a Fund sells a security which it does not own, in anticipation of a decline in the market value of the security. To complete the sale, the Fund must borrow the security generally from the broker through which the short sale is made in order to make delivery to the buyer. The Fund must replace the security borrowed by purchasing it at the market price at the time of replacement. The Fund is said to have a "short position" in securities sold until it delivers them to the broker. For financial statement purposes, an amount equal to the settlement amount is included in the Statement of Assets and Liabilities as an asset and an equivalent liability. The amount of the liability is subsequently marked-to-market to reflect the current value of the short position. Subsequent fluctuations in the market prices of securities sold, but not yet purchased, may require purchasing the securities at prices which differ from the market value reflected on the Statement of Assets and Liabilities. The Funds are liable for any dividends or interest payable on securities while those securities are in a short position. As collateral for its short positions, the Funds are required under the Investment Company Act of 1940 to maintain segregated assets consisting of cash, cash equivalents or liquid securities. These segregated assets are valued consistent with Note 1a above. These segregated assets are required to be adjusted daily to reflect changes in the market value of the securities sold short. 91 NOTES TO FINANCIAL STATEMENTS (CONTINUED) MARCH 31, 2004 2. MANAGEMENT FEES AND OTHER TRANSACTIONS WITH AFFILIATES Management fees are payable to Security Management Company, LLC (SMC) at an annual rate of 0.75% of the average daily net assets for Security Large Cap Value Fund, Equity, Enhanced Index, Select 25 Series and Security Mid Cap Growth Fund, 1.00% for Global, Social Awareness, Small Cap Growth and Large Cap Growth Series. Prior to February 1, 2004 management fees were payable to SMC at an annual rate of 0.75% of the average daily net assets for the Mid Cap Value Series. Effective February 1, 2004, the Mid Cap Value Series began paying SMC an annual fee equal to 1% on an annual basis, of the average daily net assets of the Series of $200 million or less, plus an annual rate of 0.75% of the average daily net assets of the Series in excess of $200 million. Effective February 1, 2004, SMC has voluntarily agreed to waive .25% of the management fees for the Large Cap Growth Series and the Social Awareness Series. SMC receives a management fee from Alpha Opportunity Fund that is composed of two components. The first component is an annual base fee equal to 2.00% of Alpha Opportunity Fund's average daily net assets. The second component is a performance adjustment that either increases or decreases the base fee, depending on how Alpha Opportunity Fund performed relative to the S&P 500 Index. The illustration below demonstrates how the performance adjustment may affect the Investment Manager's fee. The Investment Manager will receive the 2.00% annual base fee for the first year of the Fund's investment operations, and thereafter if the Fund's investment performance matches the investment record of the S&P 500 Index over the prior 12 month period. If the investment performance of the Fund's Class A shares exceeds the investment record of the S&P 500 Index, the performance adjustment increases the fee paid to the Investment Manager proportionately, reaching a maximum annual fee of 2.75% if the Fund outperforms the investment record of the S&P 500 Index by 15 percentage points over the measuring period. If the investment performance of the Fund's Class A shares trails the investment record of the S&P 500 Index, the performance adjustment decreases the fee paid to the Investment Manager proportionately, reaching a minimum annual fee of 1.25% if the Fund underperforms the investment record of the S&P 500 Index by 15 percentage points over the measuring period. The performance adjustment is calculated on the basis of a "rolling" 12 month measuring period, so that a fee rate calculated on the basis of investment performance over a 12 month period will apply only for the next succeeding month, and then will be subject to recalculation for the following month on the basis of the Fund's investment performance over the prior 12 month period. Performance adjustments will begin on August 1, 2004 based upon Alpha Opportunity Fund's performance during the 12 months ended July 1, 2004. SMC also acts as the administrative agent and transfer agent for the Funds, and as such performs administrative functions, transfer agency and dividend disbursing services, and the bookkeeping, accounting and pricing functions for each fund. For these services, the Investment Manager receives, from the Global Series an administrative fee equal to .045% of the average daily net assets of the series plus the greater of .10% of the average net assets or $60,000. For administrative services provided to the Security Large Cap Value Fund, the Equity, Social Awareness, Mid Cap Value, Small Cap Growth, Enhanced Index, Select 25, Large Cap Growth Series and the Security Mid Cap Growth Fund, SMC receives an administrative fee equal to .09% of the average daily net assets of each series. For Alpha Opportunity Series, SMC receives an administrative fee equal to .145% of the average daily net assets of the Alpha Opportunity Fund. Effective February 1, 2004, there is a minimum annual charge of $25,000 for the administrative fees. Effective February 1, 2004 SMC is paid the following for providing transfer agent services to the Funds: Per account charge: $5.00 to $8.00 Transactions fees: $0.60 to $1.10 Minimum charge: $25,000 Plus certain out-of-pocket charges Prior to February 1, 2004, SMC was paid the following for providing transfer agent services to the Funds: Per account charge: $8.00 Transactions fees: $1.00 SMC pays the Dreyfus Corporation an annual fee equal to .25% of the average daily closing value of the combined net assets of Large Cap Value Fund and another fund managed by SMC, SBL Series B, computed on a daily basis. Beginning January 1, 2002, the Dreyfus Corporation agreed to waive .10% of the average daily closing value of the combined net assets of these funds, computed on a daily basis until December 31, 2006. SMC pays OppenheimerFunds, Inc. an annual fee equal to a percentage of the average daily closing value of the combined average daily net assets of Global Series and another fund managed by SMC, SBL Series D, computed on a daily basis as follows:
Combined Average Daily Net Assets Annual Fees - --------------------------------- ----------- $0 to $300 Million.................... .35% $300 Million to $750 Million.......... .30% $750 Million or more.................. .25%
SMC pays RS Investments, an annual fee equal to a percentage of the average daily closing value of the combined net assets of Small Cap Growth Series and another fund managed by SMC, SBL Series X, computed on a daily basis as follows:
Combined Average Daily Net Assets Annual Fees - --------------------------------- ----------- $0 to $100 Million................... 0.55% $100 Million to $400 Million......... 0.50% Over $400 Million.................... 0.45%
92 NOTES TO FINANCIAL STATEMENTS (CONTINUED) MARCH 31, 2004 SMC pays Northern Trust an annual fee equal to a percentage of the average daily closing value of the combined net assets of Security Equity Fund Enhanced Index Series and SBL Series H, computed on a daily basis as follows:
Combined Average Daily Net Assets Annual Fees - --------------------------------- ----------- $0 to $100 Million............ .20% $100 Million to $300 Million.. .15% $300 Million or more.......... .13%
In addition, SMC has voluntarily agreed to waive .25% of the management fees for Enhanced Index Series. SMC pays Mainstream Investment Advisers, LLC an annual fee equal to 2.50% of that portion of the Alpha Opportunity Fund's assets managed by Mainstream. The sub-advisory fee will be adjusted upward or downward, depending on how that portion of Alpha Opportunity Fund's assets performed relative to the S&P 500 Index. The pro rata adjustment upward or downward will be determined based upon the investment performance of that portion of Alpha Opportunity Fund's assets managed by Mainstream relative to the investment record of the S&P 500 Index. The amount of any upward adjustment in the Base Fee will be equal to 1.50% multiplied by the ratio of the number of percentage points by which the investment performance of the Alpha Opportunity Fund assets managed by Mainstream exceeds the investment record of the S&P 500 Index as compared to 30 percentage points. The maximum performance adjustment upward or downward is 1.50% annually. Depending on the performance of that portion of the Fund's assets managed by Mainstream, the Investment Manager may pay Mainstream a maximum of 4.00% or a minimum of 1.00% in annual sub-advisory fees. During its first 12 months of operations, the Investment Manager will pay Mainstream the base fee of 2.50% without any adjustment for performance. Performance adjustments will being on August 1, 2004 based upon the performance during the 12 months ended July 1, 2004 of that portion of Alpha Opportunity Fund's assets managed by Mainstream. Thereafter, the Investment Manager will calculate the performance adjustment at the end of each calendar month based upon the investment performance of the assets managed by Mainstream during the twelve-month period ending on the last day of the prior month compared to the investment record of the S&P 500 Index during the same period. The Alpha Opportunity Fund's assets are reallocated between Mainstream and the Investment Manager on a monthly basis to an approximately equal allocation. This procedure ensures that the Investment Manager cannot make allocation decisions that favor the Investment Manager over Mainstream. SMC has agreed to limit the total expenses of the Enhanced Index and Select 25 Series to 1.75%, Social Awareness, Mid Cap Value, Small Cap Growth and Large Cap Growth Series to 2.00% in each case exclusive of interest, taxes, extraordinary expenses, brokerage fees and commissions and 12b-1 fees. SMC has agreed to limit the total other expenses for Alpha Opportunity to 0.50%. The expense limits other than those for Enhanced Index, and Select 25 Series are voluntary limits which may be terminated at any time without notice to shareholders. The Funds have adopted Distribution Plans related to the offering of Class A, Class B and Class C shares pursuant to Rule 12b-1 under the Investment Company Act of 1940. The plans provide for payments at an annual rate of 1.00% of the average daily net assets of each Fund's Class B, Class C, and 0.25% of the average daily net assets of each Fund's Class A shares. Security Distributors, Inc. (SDI), a wholly-owned subsidiary of Security Benefit Group, Inc. and the national distributor of the Funds, received net underwriting commissions on sales of shares after allowances to brokers and dealers. The net underwriting commissions received are presented in the following table: SDI UNDERWRITING COMMISSIONS Security Large Cap Value Fund................. $ 2,294 Security Equity Fund: Equity Series........................... 16,999 Global Series........................... 4,984 Social Awareness Series................. 1,674 Mid Cap Value Series.................... 35,510 Small Cap Growth Series................. 3,528 Enhanced Index Series................... 1,143 Select 25(R) Series..................... 2,302 Large Cap Growth Series................. 737 Alpha Opportunity Series................ 780 Security Mid Cap Growth Fund.................. 25,604
Certain officers and directors of the Funds are also officers and/or directors of Security Benefit Life Insurance Company and its subsidiaries, which include SMC and SDI. 93 NOTES TO FINANCIAL STATEMENTS (CONTINUED) MARCH 31, 2004 3. UNREALIZED APPRECIATION/DEPRECIATION FOR FEDERAL INCOME TAX PURPOSES For federal income tax purposes, the amounts of unrealized appreciation (depreciation) for each Series' investments as of March 31, 2004 were as follows:
GROSS GROSS NET UNREALIZED UNREALIZED UNREALIZED APPRECIATION APPRECIATION DEPRECIATION (DEPRECIATION) ------------ ------------ -------------- Security Large Cap Value Fund.... $ 8,957,141 $ (985,869) $ 7,971,272 Security Equity Fund: Equity Series.............. 102,464,586 (17,254,085) 85,210,501 Global Series.............. 24,672,450 (2,472,688) 22,199,762 Social Awareness Series.... 2,277,632 (2,594,970) (317,338) Mid Cap Value Series....... 82,295,290 (4,892,563) 77,402,727 Small Cap Growth Series.... 7,116,965 (454,302) 6,662,663 Enhanced Index Series...... 1,998,628 (561,561) 1,437,067 Select 25(R) Series........ 3,017,345 (799,007) 2,218,338 Large Cap Growth Series.... 2,894,867 (434,996) 2,459,871 Alpha Opportunity Series... 142,618 (148,140) (5,522) Security Mid Cap Growth Fund..... 66,516,328 (12,592,289) 53,924,039
4. INVESTMENT TRANSACTIONS Investment transactions for the six months ended March 31, 2004, (excluding overnight investments and short-term commercial paper) were as follows:
PROCEEDS PURCHASES FROM SALES --------- ---------- Security Large Cap Value Fund.... $ 19,677,352 $ 19,102,429 Security Equity Fund: Equity Series.............. 91,291,152 138,633,134 Global Series.............. 46,040,273 16,592,186 Social Awareness Series.... 2,297,428 2,550,516 Mid Cap Value Series....... 109,414,599 39,850,795 Small Cap Growth Series.... 23,616,601 21,882,919 Enhanced Index Series...... 5,740,831 5,105,409 Select 25(R) Series........ 8,489,919 9,183,069 Large Cap Growth Series.... 5,971,023 5,700,571 Alpha Opportunity Series... 21,405,325 20,386,946 Security Mid Cap Growth Fund..... 66,635,048 55,697,425
5. OPEN FUTURES CONTRACTS
NUMBER OF CONTRACT MARKET UNREALIZED POSITION CONTRACTS EXPIRATION DATE AMOUNT VALUE GAIN/(LOSS) -------- --------- --------------- ------ ----- ----------- ALPHA OPPORTUNITY SERIES S&P 500 Index Future....... Long 15 6/18/2004 $4,264,822 $4,218,375 $(46,447) ENHANCED INDEX SERIES S&P 500 E-Mini Future...... Long 4 6/18/2004 $ 223,390 $ 225,000 $ 1,610
94 NOTES TO FINANCIAL STATEMENTS (CONTINUED) MARCH 31, 2004 6. CAPITAL SHARE TRANSACTIONS The Funds are authorized to issue an unlimited number of shares in an unlimited number of classes. Transactions in the capital shares of the Funds for the period ended March 31, 2004 and for the year ended September 30, 2003 (except as noted), respectively, were as follows:
2004 2004 2004 2004 Shares Amount Shares Amount Sold Sold Reinvested Reinvested --------- ----------- ------- ---------- Security Large Cap Value Fund: Class A shares............... 1,050,793 $ 5,982,806 18,840 $ 105,691 Class B shares............... 576,208 3,150,846 - - Class C shares............... 203,503 1,145,130 - - --------- ----------- ------- ---------- Total..................... 1,830,504 $10,278,782 18,840 $ 105,691 ========= =========== ======= ========== Security Equity Fund: Equity Series Class A shares............... 3,699,286 $23,442,299 97,974 $ 627,027 Class B shares............... 882,829 5,128,343 - - Class C shares............... 201,247 1,223,370 - - --------- ----------- ------- ---------- Total..................... 4,783,362 $29,794,012 97,974 $ 627,027 ========= =========== ======= ========== Global Series Class A shares............... 2,801,761 $35,791,072 - $ - Class B shares............... 538,113 6,449,773 - - Class C shares............... 91,388 1,077,812 - - --------- ----------- ------- ---------- Total..................... 3,431,262 $43,318,657 - $ - ========= =========== ======= ========== Social Awareness Series Class A shares............... 54,653 $ 1,050,006 - $ - Class B shares............... 13,861 246,531 - - Class C shares............... 9,064 163,805 - - --------- ----------- ------- ---------- Total..................... 77,578 $ 1,460,342 - $ - ========= =========== ======= ========== Mid Cap Value Series Class A shares............... 2,587,331 $71,310,794 50,055 $1,355,987 Class B shares............... 497,046 12,872,259 24,065 610,763 Class C shares............... 475,336 12,533,253 14,771 381,240 --------- ----------- ------- ---------- Total..................... 3,559,713 $96,716,306 88,891 $2,347,990 ========= =========== ======= ========== Small Cap Growth Series Class A shares............... 371,178 $ 4,871,770 - $ - Class B shares............... 140,658 1,736,517 - - Class C shares............... 95,402 1,200,370 - - --------- ----------- ------- ---------- Total..................... 607,236 $ 7,808,657 - $ - ========= =========== ======= ========== Enhanced Index Series Class A shares............... 101,536 $ 857,981 - $ - Class B shares............... 68,995 569,800 - - Class C shares............... 81,427 658,932 - - --------- ----------- ------- ---------- Total..................... 251,958 $ 2,086,713 - $ - ========= =========== ======= ========== Select 25(R) Series Class A shares............... 67,973 $ 532,141 - $ - Class B shares............... 51,412 385,679 - - Class C shares............... 81,782 624,429 - - --------- ----------- ------- ---------- Total..................... 201,167 $ 1,542,249 - $ - ========= =========== ======= ========== Large Cap Growth Series Class A shares............... 1,551,891 $ 9,205,304 - $ - Class B shares............... 257,096 1,507,475 - - Class C shares............... 74,153 437,823 - - --------- ----------- ------- ---------- Total..................... 1,883,140 $11,150,602 - $ - ========= =========== ======= ========== Alpha Opportunity Series Class A shares............... 139,266 $ 1,570,833 18,034 $ 199,093 Class B shares............... 8,833 99,304 9,208 101,286 Class C shares............... 55,960 621,884 10,984 120,826 --------- ----------- ------- ---------- Total..................... 204,059 $ 2,292,021 38,226 $ 421,205 ========= =========== ======= ========== Security Mid Cap Growth Fund: Class A shares............... 2,986,278 $34,093,857 458,007 $5,189,217 Class B shares............... 438,014 4,421,736 115,713 1,150,192 Class C shares............... 378,141 3,910,203 48,173 519,780 --------- ----------- ------- ---------- Total..................... 3,802,433 $42,425,796 621,893 $6,859,189 ========= =========== ======= ========== 2004 Total 2004 2004 Increase/ Increase/ Shares Amount (Decrease) (Decrease) Redeemed Redeemed Shares Amount ---------- ------------ ---------- ------------ Security Large Cap Value Fund: Class A shares............... (1,336,403) $ (7,839,021) (266,770) $ (1,750,524) Class B shares............... (427,622) (2,347,191) 148,586 803,655 Class C shares............... (78,427) (441,214) 125,076 703,916 ---------- ------------ ---------- ------------ Total..................... (1,842,452) $(10,627,426) 6,892 $ (242,953) ========== ============ ========== ============ Security Equity Fund: Equity Series Class A shares............... (10,954,626) $(70,022,594) (7,157,366) $(45,953,268) Class B shares............... (2,531,220) (14,742,699) (1,648,391) (9,614,356) Class C shares............... (294,006) (1,791,988) (92,759) (568,618) ---------- ------------ ---------- ------------ Total..................... (13,779,852) $(86,557,281) (8,898,516) $(56,136,242) ========== ============ ========== ============ Global Series Class A shares............... (980,254) $(12,719,425) 1,821,507 $ 23,071,647 Class B shares............... (382,507) (4,758,435) 155,606 1,691,338 Class C shares............... (207,280) (2,592,804) (115,892) (1,514,992) ---------- ------------ ---------- ------------ Total..................... (1,570,041) $(20,070,664) 1,861,221 $ 23,247,993 ========== ============ ========== ============ Social Awareness Series Class A shares............... (37,476) $ (716,310) 17,177 $ 333,696 Class B shares............... (41,705) (741,578) (27,844) (495,047) Class C shares............... (7,338) (135,826) 1,726 27,979 ---------- ------------ ---------- ------------ Total..................... (86,519) $ (1,593,714) (8,941) $ (133,372) ========== ============ ========== ============ Mid Cap Value Series Class A shares............... (533,997) $(14,901,679) 2,103,389 $ 57,765,102 Class B shares............... (194,894) (5,024,601) 326,217 8,458,421 Class C shares............... (158,769) (4,214,578) 331,338 8,699,915 ---------- ------------ ---------- ------------ Total..................... (887,660) $(24,140,858) 2,760,944 $ 74,923,438 ========== ============ ========== ============ Small Cap Growth Series Class A shares............... (284,953) $ (3,740,571) 86,225 $ 1,131,199 Class B shares............... (116,492) (1,442,132) 24,166 294,385 Class C shares............... (77,730) (984,716) 17,672 215,654 ---------- ------------ ---------- ------------ Total..................... (479,175) $ (6,167,419) 128,063 $ 1,641,238 ========== ============ ========== ============ Enhanced Index Series Class A shares............... (87,144) $ (735,185) 14,392 $ 122,796 Class B shares............... (62,529) (507,592) 6,466 62,208 Class C shares............... (48,013) (386,428) 33,414 272,504 ---------- ------------ ---------- ------------ Total..................... (197,686) $ (1,629,205) 54,272 $ 457,508 ========== ============ ========== ============ Select 25(R) Series Class A shares............... (167,351) $ (1,300,580) (99,378) $ (768,439) Class B shares............... (138,610) (1,055,451) (87,198) (669,772) Class C shares............... (102,678) (780,441) (20,896) (156,012) ---------- ------------ ---------- ------------ Total..................... (408,639) $ (3,136,472) (207,472) $ (1,594,223) ========== ============ ========== ============ Large Cap Growth Series Class A shares............... (1,440,217) $ (8,477,110) 111,674 $ 728,194 Class B shares............... (173,716) (1,023,621) 83,380 483,854 Class C shares............... (108,476) (635,794) (34,323) (197,971) ---------- ------------ ---------- ------------ Total..................... (1,722,409) $(10,136,525) 160,731 $ 1,014,077 ========== ============ ========== ============ Alpha Opportunity Series Class A shares............... (23,917) $ (267,184) 133,383 $ 1,502,742 Class B shares............... - - 18,041 200,590 Class C shares............... (70) (796) 66,874 741,914 ---------- ------------ ---------- ------------ Total..................... (23,987) $ (267,980) 218,298 $ 2,445,246 ========== ============ ========== ============ Security Mid Cap Growth Fund: Class A shares............... (2,818,485) $(33,419,781) 625,800 $ 5,863,293 Class B shares............... (568,773) (5,959,248) (15,046) (387,320) Class C shares............... (275,650) (3,128,725) 150,664 1,301,258 ---------- ------------ ---------- ------------ Total..................... (3,662,908) $(42,507,754) 761,418 $ 6,777,231 ========== ============ ========== ============
95 NOTES TO FINANCIAL STATEMENTS (CONTINUED) MARCH 31, 2004 6. CAPITAL SHARE TRANSACTIONS (CONTINUED)
2003 Total 2003 Total 2003 2003 2003 2003 Increase/ Increase/ Shares Amount Shares Amount (Decrease) (Decrease) Sold Sold Redeemed Redeemed Shares Amount ---------- ------------ ----------- ------------- ----------- ------------ Security Large Cap Value Fund: Class A shares.............. 3,275,684 $ 15,980,582 (2,059,730) $ (9,542,638) 1,215,954 $ 6,437,944 Class B shares.............. 1,770,126 8,414,192 (571,007) (2,539,716) 1,199,119 5,874,476 Class C shares.............. 207,972 955,668 (141,469) (643,187) 66,503 312,481 ---------- ------------ ----------- ------------- ----------- ------------ Total...................... 5,253,782 $ 25,350,442 (2,772,206) $ (12,725,541) 2,481,576 $ 12,624,901 ========== ============ =========== ============= =========== ============ Security Equity Fund: Equity Series Class A shares.............. 9,525,481 $ 52,599,625 (18,674,422) $(105,856,454) (9,148,941) $(53,256,829) Class B shares.............. 3,963,505 19,942,502 (6,830,650) (35,443,343) (2,867,145) (15,500,841) Class C shares.............. 647,916 3,455,973 (499,324) (2,656,042) 148,592 799,931 ---------- ------------ ----------- ------------- ----------- ------------ Total...................... 14,136,902 $ 75,998,100 (26,004,396) $(143,955,839) (11,867,494) $(67,957,739) ========== ============ =========== ============= =========== ============ Global Series Class A shares.............. 17,102,956 $170,505,008 (18,807,897) $(187,958,287) (1,704,941) $(17,453,279) Class B shares.............. 259,359 2,446,819 (891,673) (8,037,983) (632,314) (5,591,164) Class C shares.............. 135,732 1,296,276 (104,715) (993,174) 31,017 303,102 ---------- ------------ ----------- ------------- ----------- ------------ Total...................... 17,498,047 $174,248,103 (19,804,285) $(196,989,444) (2,306,238) $(22,741,341) ========== ============ =========== ============= =========== ============ Social Awareness Series Class A shares.............. 169,124 $ 2,824,966 (149,561) $ (2,475,626) 19,563 $ 349,340 Class B shares.............. 44,117 681,521 (107,048) (1,664,723) (62,931) (983,202) Class C shares.............. 30,846 489,488 (19,076) (295,687) 11,770 193,801 ---------- ------------ ----------- ------------- ----------- ------------ Total...................... 244,087 $ 3,995,975 (275,685) $ (4,436,036) (31,598) $ (440,061) ========== ============ =========== ============= =========== ============ Mid Cap Value Series Class A shares.............. 3,192,088 $ 65,771,619 (2,597,504) $ (51,319,933) 594,584 $ 14,451,686 Class B shares.............. 756,268 14,474,911 (731,230) (13,136,730) 25,038 1,338,181 Class C shares.............. 540,730 10,825,157 (284,240) (5,174,008) 256,490 5,651,149 ---------- ------------ ----------- ------------- ----------- ------------ Total...................... 4,489,086 $ 91,071,687 (3,612,974) $ (69,630,671) 876,112 $ 21,441,016 ========== ============ =========== ============= =========== ============ Small Cap Growth Series Class A shares.............. 655,128 $ 6,184,996 (476,304) $ (4,215,103) 178,824 $ 1,969,893 Class B shares.............. 304,029 2,757,770 (253,852) (2,226,918) 50,177 530,852 Class C shares.............. 130,394 1,133,518 (97,903) (842,930) 32,491 290,588 ---------- ------------ ----------- ------------- ----------- ------------ Total...................... 1,089,551 $ 10,076,284 (828,059) $ (7,284,951) 261,492 $ 2,791,333 ========== ============ =========== ============= =========== ============ Enhanced Index Series Class A shares.............. 333,447 $ 2,367,320 (642,114) $ (4,508,312) (308,667) $ (2,140,992) Class B shares.............. 177,203 1,206,524 (513,292) (3,498,690) (336,089) (2,292,166) Class C shares.............. 159,884 1,120,893 (430,959) (2,949,239) (271,075) (1,828,346) ---------- ------------ ----------- ------------- ----------- ------------ Total...................... 670,534 $ 4,694,737 (1,586,365) $ (10,956,241) (915,831) $ (6,261,504) ========== ============ =========== ============= =========== ============ Select 25(R) Series Class A shares.............. 308,267 $ 2,124,128 (707,984) $ (4,949,490) (399,717) $ (2,825,362) Class B shares.............. 129,196 870,627 (310,636) (2,109,351) (181,440) (1,238,724) Class C shares.............. 368,021 2,518,754 (105,802) (711,166) 262,219 1,807,588 ---------- ------------ ----------- ------------- ----------- ------------ Total...................... 805,484 $ 5,513,509 (1,124,422) $ (7,770,007) (318,938) $ (2,256,498) ========== ============ =========== ============= =========== ============ Large Cap Growth Series Class A shares.............. 1,662,989 $ 9,276,514 (793,945) $ (4,326,342) 869,044 $ 4,950,172 Class B shares.............. 1,088,511 5,959,453 (319,346) (1,646,003) 769,165 4,313,450 Class C shares.............. 152,477 790,028 (89,726) (451,972) 62,751 338,056 ---------- ------------ ----------- ------------- ----------- ------------ Total...................... 2,903,977 $ 16,025,995 (1,203,017) (6,424,317) 1,700,960 $ 9,601,678 ========== ============ =========== ============= =========== ============ Alpha Opportunity Series* Class A shares.............. 318,546 $ 3,210,618 (31,141) $ (327,957) 287,405 $ 2,882,661 Class B shares.............. 169,772 1,699,668 - - 169,772 1,699,668 Class C shares.............. 168,989 1,690,408 - - 168,989 1,690,408 ---------- ------------ ----------- ------------- ----------- ------------ Total...................... 657,307 $ 6,600,694 (31,141) $ (327,957) 626,166 $ 6,272,737 ========== ============ =========== ============= =========== ============ Security Mid Cap Growth Fund Class A shares.............. 4,578,400 $ 40,656,683 (5,138,315) $ (44,459,945) (559,915) $ (3,803,262) Class B shares.............. 1,135,067 9,427,357 (1,168,642) (8,552,708) (33,575) 874,649 Class C shares.............. 497,073 4,322,997 (277,157) (2,270,432) 219,916 2,052,565 ---------- ------------ ----------- ------------- ----------- ------------ Total...................... 6,210,540 $ 54,407,037 (6,584,114) $ (55,283,085) (373,574) $ (876,048) ========== ============ =========== ============= =========== ============
*For the period beginning July 7, 2003 (commencement of operations) to September 30, 2003. 96 NOTES TO FINANCIAL STATEMENTS (CONTINUED) MARCH 31, 2004 7. OPTIONS WRITTEN The following options written were outstanding for Mid Cap Value Series as of March 31, 2004: MID CAP VALUE SERIES - CALL OPTIONS WRITTEN OUTSTANDING
EXPIRATION EXERCISE NUMBER OF MARKET COMMON STOCK DATE PRICE CONTRACTS VALUE - ------------ ---------- -------- --------- ------- Adaptec, Inc. .............................................. 07/16/04 $10.00 1,430 $42,900 Ciena Corporation........................................... 07/16/04 7.50 855 12,825 ----- ------- Total call options outstanding (premiums received, $253,033) 2,285 $55,725 ===== =======
MID CAP VALUE SERIES - PUT OPTIONS WRITTEN OUTSTANDING
EXPIRATION EXERCISE NUMBER OF MARKET COMMON STOCK DATE PRICE CONTRACTS VALUE - ------------ ---------- -------- --------- -------- Computer Sciences Corporation................................. 06/18/04 $40.00 340 $ 69,700 IXYS Corporation.............................................. 07/16/04 7.50 793 15,860 Murphy Oil Corporation........................................ 07/16/04 60.00 107 22,470 Power One, Inc. .............................................. 07/16/04 10.00 1,500 97,500 Pride International, Inc. .................................... 07/16/04 17.50 860 116,100 ----- -------- Total put options outstanding (premiums received, $440,122) 3,600 $321,630 ===== ========
Transactions in options written for Mid Cap Value Series for the period ended March 31, 2004 were as follows: MID CAP VALUE SERIES - CALL OPTIONS WRITTEN
NUMBER OF PREMIUM CONTRACTS AMOUNT --------- --------- Balance at September 30, 2003.. 810 $ 124,078 Opened......................... 2,733 356,587 Bought Back.................... (810) (124,078) Expired........................ (150) (37,701) Exercised...................... (298) (65,853) ------ --------- Balance at March 31, 2004...... 2,285 $ 253,033 ====== =========
MID CAP VALUE SERIES - PUT OPTIONS WRITTEN
NUMBER OF PREMIUM CONTRACTS AMOUNT --------- --------- Balance at September 30, 2003.. - $ - Opened......................... 5,800 609,014 Bought Back.................... - - Expired........................ (1,462) (137,897) Exercised...................... (738) (30,995) ------ --------- Balance at March 31, 2004...... 3,600 $ 440,122 ====== =========
The following options written were outstanding for Security Mid Cap Growth Fund as of March 31, 2004: MID CAP GROWTH FUND - PUT OPTIONS WRITTEN OUTSTANDING
EXPIRATION EXERCISE NUMBER OF MARKET COMMON STOCK DATE PRICE CONTRACTS VALUE - ------------ ---------- -------- --------- -------- Avici Systems Inc. ........................................ 06/18/2004 $12.50 535 $ 69,550 Finisar Corporation........................................ 04/16/2004 2.50 2,559 89,565 Ligand Pharmaceuticals..................................... 04/16/2004 17.50 620 3,100 Netopia, Inc. ............................................. 06/18/2004 7.50 30 150 Ultratech, Inc. ........................................... 05/21/2004 25.00 211 53,805 ----- -------- Total put options outstanding (premiums received, $291,676) 3,955 $216,170 ===== ========
97 NOTES TO FINANCIAL STATEMENTS (CONTINUED) MARCH 31, 2004 7. OPTIONS WRITTEN (CONTINUED) Transactions in options written for Security Mid Cap Growth Fund for the period ended March 31, 2004 were as follows: MID CAP GROWTH FUND - PUT OPTIONS WRITTEN
NUMBER OF PREMIUM CONTRACTS AMOUNT --------- --------- Balance at September 30, 2003.. - $ - Opened......................... 5,630 471,011 Bought Back.................... - - Expired........................ (460) (61,944) Exercised...................... (1,215) (117,391) ------ --------- Balance at March 31, 2004...... 3,955 $ 291,676 ====== =========
MID CAP GROWTH FUND - CALL OPTIONS WRITTEN
NUMBER OF PREMIUM CONTRACTS AMOUNT --------- --------- Balance at September 30, 2003.. - $ - Opened......................... 520 70,187 Bought Back.................... - - Expired........................ (270) (39,688) Exercised...................... (250) (30,499) ---- -------- Balance at March 31, 2004...... - $ - ==== ========
8. FEDERAL TAX MATTERS As of September 30, 2003 the components of accumulated earnings/(deficit) on a tax basis were the same as those reported in the Statement of Assets and Liabilities, except as follows:
UNDISTRIBUTED UNDISTRIBUTED ACCUMULATED UNREALIZED TOTAL ORDINARY LONG-TERM ACCUMULATED CAPITAL AND APPRECIATION ACCUMULATED INCOME GAIN EARNINGS OTHER LOSSES* (DEPRECIATION)** EARNINGS/(DEFICIT) ------ ---- -------- ------------- ---------------- ------------------ Security Large Cap Value Fund $108,075 $ - $ 108,075 $(20,225,427) $ 1,000,652 $(19,116,700) Security Equity Fund: Global Series - - - (18,343,725) 4,392,418 (13,951,307) Social Awareness Series - - - (2,242,893) (1,674,360) (3,917,253) Mid Cap Value Series - 2,149,183 2,149,183 - 37,052,517 39,201,700 Small Cap Growth Series - - - (13,086,413) 4,761,443 (8,324,970) Enhanced Index Series - - - (5,774,426) (1,058,107) (6,832,533) Large Cap Growth Series - - - (3,659,331) 224,150 (3,435,181) Alpha Opportunity Series 219,240 - 219,240 (20,248) (84,042) 114,950 Security Mid Cap Growth Fund - 6,427,140 6,427,140 - 28,897,463 35,324,603
*Certain Funds had net capital loss carryovers and deferred post October losses as identified elsewhere in the Notes. **The differences between book-basis and tax-basis unrealized appreciation (depreciation) is attributable primarily to the tax deferral of wash sale losses and the differences between book and tax basis passive foreign investment companies and bond discount accretion. In accordance with the provisions of the Internal Revenue Code, the percentage of ordinary dividends (including short-term capital gains) attributable to the fiscal year ended September 30, 2003, which qualify for the dividends received deduction for corporate shareholders is 100% for the Security Large Cap Value Fund and 5% for the Alpha Opportunity Series. 98 NOTES TO FINANCIAL STATEMENTS (CONTINUED) MARCH 31, 2004 10. FEDERAL TAX MATTERS (CONTINUED) As of September 30, 2003, the accumulated net realized loss on sales of investments for federal income tax purposes which are available to offset future taxable gains and post-October capital losses that are deferred to the first day of the next fiscal year are as follows:
CAPITAL LOSS DEFERRED POST- CARRYOVERS EXPIRES IN OCTOBER LOSSES ---------- ---------- -------------- Security Large Cap Value Fund $ 727,563 2008 $ 3,023,584 7,265,289 2009 56,003 2010 9,152,988 2011 ------------- 17,201,843 Security Equity Fund: Equity Series 1,653,201 2009 8,324,394 14,878,996 2010 ------------- 16,532,197 Global Series 315,044 2009 6,638,758 6,677,469 2010 7,597,912 2011 ------------- 14,590,425 Social Awareness Series 817,736 2009 274,407 132,011 2010 1,018,739 2011 ------------- 1,968,486 Small Cap Growth Series 13,086,413 2010 - Enhanced Index Series 138,713 2009 3,067,270 976,489 2010 1,591,954 2011 ------------- 2,707,156 Select 25(R) Series 368,467 2008 3,420,733 2,259,072 2009 3,363,943 2010 2,960,418 2011 ------------- 8,951,900 Large Cap Growth Series 58,405 2009 1,568,317 296,393 2010 1,736,216 2011 ------------- 2,091,014 Alpha Opportunity Series - N/A 20,248 Security Mid Cap Growth Fund 78,037 2009 24,110 4,005,352 2010 3,092,993 2011 ------------- 7,176,382
The Security Equity Fund - Global Series inherited approximately $2,885,458 of capital losses (included above) from its merger with Security Equity Fund - International Series (see Note 9), which may be applied against any realized net taxable capital gains in future years or until September 30, 2011, the respective date, whichever occurs first, subject to certain limitation imposed by Section 382 of the Internal Revenue Code. Security Mid Cap Growth fund inherited approximately $7,176,382 of capital losses (included above) from its merger with Security Equity Fund - Technology Series (see Note 10), which may be applied against any realized net taxable capital gains in future years or until September 30, 2011, the respective date, whichever occurs first, subject to certain limitation imposed by Section 382 of the Internal Revenue Code. 99 NOTES TO FINANCIAL STATEMENTS (CONTINUED) MARCH 31, 2004 9. ACQUISITION OF SECURITY EQUITY FUND - INTERNATIONAL SERIES Pursuant to a plan of reorganization approved by Security Equity Fund International Series shareholders, Security Equity Fund Global Series acquired all the net assets of International Series, which totalled $9,345,535 on the closing date of the reorganization, October 3, 2003. A total of 366,909 Class A shares, 198,022 Class B shares and 228,231 Class C shares were issued in exchange for International Series' Class A, B and C shares. In exchange for the assets of International Series 793,162 shares of Global Series were distributed to International shareholders of record as of immediately after the closing date. A total of $4,450,969 in assets for Class A shares, $2,248,383 in assets for Class B shares and $2,646,183 in assets for Class C shares were received in exchange for International Series' assets. This exchange qualified as a tax-free reorganization under Section 368(a)(1)(C) of the Internal Revenue Code. International net assets included $432,828 of unrealized appreciation, $3,042 of accumulated net investment income and $3,019,816 of accumulated realized loss on sale of investments. The aggregate net assets of Global Series immediately before the acquisition totalled $68,353,149. Following the acquisition, the combined net assets of Global Series totalled $77,698,684. 10. ACQUISITION OF SECURITY EQUITY FUND-TECHNOLOGY SERIES Pursuant to a plan of reorganization approved by Security Equity Fund Technology Series shareholders, Security Mid Cap Growth Fund acquired all the net assets of Technology Series, which totalled $11,962,769 on the closing date of the reorganization October 3, 2003. A total of 694,178 Class A shares, 177,910 Class B shares and 225,079 Class C shares were issued in exchange for Technology Series' Class A, B and C shares. In exchange for the assets of Technology Series 1,097,167 shares of Mid Cap Growth Fund were distributed to Technology shareholders of record as of immediately after the closing date. A total of $7,786,451 in assets for Class A shares, $1,764,789 in assets for Class B shares and $2,411,529 in assets for Class C shares were received in exchange for Technology Series' assets. This exchange qualified as a tax-free reorganization under Section 368(a)(i)(c) of the Internal Revenue Code. Technology's net assets included $1,703,882 of unrealized appreciation, $3,694 of accumulated net investment loss and $7,442,356 of accumulated realized loss on sale of investments. The aggregate net assets of Mid Cap Growth Fund immediately before the acquisition totalled $178,458,228. Following the acquisition, the combined net assets of Mid Cap Growth Fund totalled $190,420,997. 100 DIRECTOR DISCLOSURE MARCH 31, 2004
NUMBER OF PRINCIPAL PORTFOLIOS IN NAME, POSITION(S) TERM OF OCCUPATION(S) FUND COMPLEX ADDRESS AND HELD WITH OFFICE AND LENGTH DURING THE PAST OVERSEEN BY DATE OF BIRTH THE FUND OF TIME SERVED 5 YEARS THE DIRECTOR - ----------------------------------------------------------------------------------------------------------------------- Donald A. Chubb, Jr. Director** 1994 to present*** Business broker, 35 One Security Benefit Place Griffith & Blair Realtors Topeka, KS 66636-0001 Manager, Star Sign,Inc. 12/14/46 Harry W. Craig, Jr. Director 2004 to present*** Chairman, CEO, Secretary & Director, 35 One Security Benefit Place Martin Tractor Company, Inc. Topeka, KS66636-0001 President & Director, 05/11/39 The Martin Tractor Company, Inc. Penny A. Lumpkin Director** 1993 to present*** President, Vivian's Gift Shop 35 One Security Benefit Place Vice President, Palmer Companies, Inc. Topeka, KS 66636-0001 Vice President, Bellairre Shopping 08/20/39 Center Partner, Goodwin Ent. Partner, PLB Partner, Town Crier Vice President and Treasurer, Palmer News, Inc. Vice President, M/S News, Inc. Secretary, Kansas City Periodicals Mark L. Morris, Jr., D.V.M. Director** 1991 to present*** Independent Investor, Morris Co. 35 One Security Benefit Place Partner, Mark Morris Associates Topeka, KS 66636-0001 02/03/34 Maynard F. Oliverius Director** 1998 to present*** President & CEO, Stormont Vail 35 One Security Benefit Place HealthCare Topeka, KS 66636-0001 12/18/43 John D. Cleland Chairman of February 2000 to Sr. Vice President and Managing Member 35 One Security Benefit Place the Board present 1991 to Representative, Security Management Topeka, KS 66636-0001 Director* present*** Company, LLC 05/01/36 Sr. Vice President, Security Benefit Group, Inc. Sr. Vice President, Security Benefit Life Insurance Co. Director & Vice President, Security Distributors, Inc. James R. Schmank President February 2000 to President and Managing Member 35 One Security Benefit Place Director* present 1997 to Representative, Security Management Topeka, KS 66636-0001 present*** Company, LLC 02/21/53 Sr. Vice President, Security Benefit Group, Inc. Sr. Vice President, Security Benefit Life Insurance Co. Director, Security Distributors, Inc.
*These directors are deemed to be "interested persons" of the Funds under the Investment Company Act of 1940, as amended, by reason of their positions with the Funds' Investment Manager and/or the parent of the Investment Manager. **These directors serve on the Funds' joint audit committee, the purpose of which is to meet with the independent auditors, to review the work of the auditors, and to oversee the handling by Security Management Company, LLC of the accounting function for the Funds. ***Term is until the next annual meeting, or until their successors shall have been duly elected and qualified. The statement of additional information ("SAI") includes additional information about the Fund Directors and is available upon request without charge by calling 1-800-888-2461. 101 THE SECURITY GROUP OF MUTUAL FUNDS Security Large Cap Value Fund Security Equity Fund - Equity Series - Global Series - Social Awareness Series - Mid Cap Value Series - Small Cap Growth Series - Enhanced Index Series - Select 25(R) Series - Large Cap Growth Series - Alpha Opportunity Series Security Mid Cap Growth Fund Security Income Fund - Diversified Income Series - High Yield Series - Income Opportunity Series - Capital Preservation Series Security Municipal Bond Fund Security Cash Fund SECURITY FUNDS OFFICERS AND DIRECTORS DIRECTORS Donald A. Chubb, Jr. John D. Cleland Harry W. Craig, Jr. Penny A. Lumpkin Mark L. Morris, Jr., D.V.M. Michael G. Odlum Maynard F. Oliverius OFFICERS John D. Cleland, Chairman of the Board Michael G. Odlum, President Steve M. Bowser, Vice President,Equity Fund Mark Lamb,Vice President,Equity Fund Mark Mitchell, Vice President, Equity Fund James P. Schier, Vice President,Equity and Mid Cap Growth Fund Cindy L. Shields, Vice President,Equity Fund Amy J. Lee, Secretary Christopher D. Swickard, Assistant Secretary Brenda M. Harwood, Treasurer This report is submitted for the general information of the shareholders of the Funds. The report is not authorized for distribution to prospective investors in the Funds unless preceded or accompanied by an effective prospectus which contains details concerning the sales charges and other pertinent information. [SECURITY DISTRIBUTORS, INC. LOGO] One Security Benefit Place Topeka, KS 66636-0001 PRESORTED STANDARD US POSTAGE PAID PERMIT #3602 BERWYN, IL 60402 ITEM 2. CODE OF ETHICS. Not required at this time. ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT. Not required at this time. ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES. Not required at this time. ITEM 5. AUDIT COMMITTEE OF LISTED REGISTRANTS. Not applicable. ITEM 6. RESERVED. ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END MANAGEMENT INVESTMENT COMPANIES. Not applicable. ITEM 8. RESERVED. ITEM 9. CONTROLS AND PROCEDURES. (a) The registrant's President and Treasurer have concluded that the registrant's disclosure controls and procedures (as defined in rule 30a-3(c) under the Investment Company Act of 1940) are effective based on their evaluation of these disclosure controls and procedures within 90 days of the filing date of this report on Form N-CSR. (b) There were no significant changes in the registrant's internal controls, or in other factors that could significantly affect these controls subsequent to the date of their evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses. ITEM 10. EXHIBITS. (a) (1) Not required at this time. (2) Certifications pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 and required by Rule 30a-2(a) under the Investment Company Act of 1940, are attached hereto. (b) Certifications pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 and required by Rule 30a-2(a) under the Investment Company Act of 1940, are attached hereto. 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. SECURITY EQUITY FUND By: MICHAEL G. ODLUM ------------------------------- Michael G. Odlum, President Date: June 1, 2004 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: MICHAEL G. ODLUM ------------------------------- Michael G. Odlum, President Date: June 1, 2004 By: BRENDA M. HARWOOD ------------------------------- Brenda M. Harwood, Treasurer Date: June 1, 2004 EX-99.CERT 2 c85752aexv99wcert.txt CERTIFICATION EX-99.CERT Item 10(a)(2) CERTIFICATIONS I, Michael G. Odlum, certify that: 1. I have reviewed this report on Form N-CSR of Security Equity Fund; 2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; 3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations, changes in net assets, and cash flows (if the financial statements are required to include a statement of cash flows) of the registrant as of, and for, the periods presented in this report; 4. The registrant's other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Rule 30a-2(c) under the Investment Company Act of 1940) for the registrant and have: a. designed such disclosure controls and procedures 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 as of a date within 90 days prior to the filing date of this report (the "Evaluation Date"); and c. presented in this report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation Date; 5. The registrant's other certifying officers and I have disclosed, based on our most recent evaluation, 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 in the design or operation of internal controls which could adversely affect the registrant's ability to record, process, summarize, and report financial data and have identified for the registrant's auditors any material weaknesses in internal controls; and b. any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal controls; and 6. The registrant's other certifying officers and I have indicated in this report whether or not there were significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses. June 1, 2004 MICHAEL G. ODLUM - ------------------------- ---------------------------------- Date Michael G. Odlum, President CERTIFICATIONS I, Brenda M. Harwood, certify that: 1. I have reviewed this report on Form N-CSR of Security Equity Fund; 2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; 3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations, changes in net assets, and cash flows (if the financial statements are required to include a statement of cash flows) of the registrant as of, and for, the periods presented in this report; 4. The registrant's other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Rule 30a-2(c) under the Investment Company Act of 1940) for the registrant and have: a. designed such disclosure controls and procedures 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 as of a date within 90 days prior to the filing date of this report (the "Evaluation Date"); and c. presented in this report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation Date; 5. The registrant's other certifying officers and I have disclosed, based on our most recent evaluation, 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 in the design or operation of internal controls which could adversely affect the registrant's ability to record, process, summarize, and report financial data and have identified for the registrant's auditors any material weaknesses in internal controls; and b. any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal controls; and 6. The registrant's other certifying officers and I have indicated in this report whether or not there were significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses. June 1, 2004 BRENDA M. HARWOOD - ------------------------ ------------------------------- Date Brenda M. Harwood, Treasurer EX-99.906CERT 3 c85752aexv99w906cert.txt 906 CERTIFICATION EX-99.906 CERT Item 10(b) CERTIFICATION 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) In connection with the attached Report of Security Equity Fund (the "Fund") on Form N-CSR to be filed with the Securities and Exchange Commission (the "Report"), each of the undersigned officers of the Fund does hereby certify that, to the best of such officer's knowledge: 1. The Report fully complies with the requirements of 13(a) or 15(d) of the Securities Exchange Act of 1934 (the "1934 Act"); and 2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Fund as of, and for, the periods presented in the Report. By: MICHAEL G. ODLUM ------------------------------- Michael G. Odlum, President Date: June 1, 2004 By: BRENDA M. HARWOOD ------------------------------- Brenda M. Harwood, Treasurer Date: June 1, 2004 A signed original of this written statement required by Section 906 has been provided to the Fund and will be retained by the Fund and furnished to the Securities and Exchange Commission (the "Commission") or its staff upon request. -----END PRIVACY-ENHANCED MESSAGE-----