The Fund pursues its objective by investing,
under normal market conditions, at least 80% of its net assets (plus borrowings
for investment purposes) in a diversified portfolio of equity securities, which
include common stocks, rights, options, warrants, convertible debt securities,
and American Depositary Receipts ("ADRs"), that, when purchased, have market
capitalizations that are usually within the range of companies in the Russell
Midcap Growth Index. Although a universal definition of mid-capitalization
companies does not exist, for purposes of this fund, the Fund generally defines
mid-capitalization companies as those whose market capitalization is similar to
the market capitalization of companies in the Russell Mid Cap Growth Index,
which is an unmanaged index measuring the performance of the mid cap growth
segment of the U.S. equity universe and which includes companies with higher
price-to-book ratios and higher forecasted growth values.

Security Investors, LLC (the "Investment Manager") uses a combination of a
qualitative top-down approach in reviewing growth trends that is based upon
several fixed income factors, such as bond spreads and interest rates, along
with a quantitative fundamental bottom-up approach in selecting growth stocks.
The Investment Manager chooses portfolio securities that it believes are
attractively valued with the greatest potential for appreciation and may invest
in a limited number of industries or industry sectors. The Investment Manager
identifies the securities of companies that it believes are in the early to
middle stages of growth and are valued at a reasonable price. Equity securities
considered to have appreciation potential may include securities of smaller and
less mature companies which have unique proprietary products or profitable
market niches and the potential to grow very rapidly. Certain investment
vehicles' securities in which the Fund may invest may be illiquid.

The Fund also may invest a portion of its assets in derivatives, including
options and futures contracts. These instruments may be used to hedge the Fund's
portfolio, to increase returns or to maintain exposure to the equity markets.

The Fund actively trades its investments without regard to the length of time
they have been owned by the Fund, which results in higher portfolio turnover.

The Fund may, from time to time, invest a portion of its assets in technology
stocks.

The Fund may invest in a variety of investment vehicles, including those that
seek to track the composition and performance of a specific index, such as
exchange traded funds ("ETFs") and other mutual funds. The Fund may use these
index-based investments as a way of managing its cash position, to gain exposure
to the equity markets, or a particular sector of the equity market, while
maintaining liquidity. Certain investment vehicles' securities and other
securities in which the Fund may invest are restricted securities, which may be
illiquid.

The Fund typically sells a stock if its growth prospects diminish or if better
opportunities become available.

Under adverse or unstable market conditions, the Fund could invest some or all
of its assets in cash, fixed-income securities, government bonds, money market
securities, or repurchase agreements. Although the Fund would do this only in
seeking to avoid losses, the Fund may be unable to pursue its investment
objective during that time, and it could reduce the benefit from any upswing in
the market.

An investment in the Fund is not a deposit of a bank and is
not insured or guaranteed by the Federal Deposit Insurance Corporation or any
other government agency. The value of an investment in the Fund will fluctuate
and is subject to investment risks, which means investors could lose money. The
principal risks of investing in the Fund are listed below.

Active Trading Risk. Active trading, also called "high turnover," may have a
negative impact on performance. Active trading may result in higher brokerage
costs or mark-up charges, which are ultimately passed on to share­holders of the
Fund. It may also result in short-term capital gains, which have a negative tax
effect, and could also result in greater taxable distributions to shareholders
of the Fund.

Equity Derivatives Risk. Equity derivatives may pose risks in addition to those
associated with investing directly in securities or other investments, including
illiquidity of the equity derivative, imperfect correlations with underlying
investments or the Fund's other portfolio holdings, lack of availability and
counterparty risk.

Equity Securities Risk. Equity securities include common stocks and other equity
securities (and securities convertible into stocks), and the prices of equity
securities fluctuate in value more than other investments. They reflect changes
in the issuing company's financial condition and changes in the overall market.
Common stocks generally represent the riskiest investment in a company. The Fund
may lose a substantial part, or even all, of its investment in a company's
stock. Growth stocks may be more volatile than value stocks.

Foreign Securities Risk. Foreign securities, including investments in foreign
securities through ADRs, carry additional risks when compared to U.S.
securities, including currency fluctuations, adverse political and economic
developments, unreliable or untimely information, less liquidity, limited legal
recourse and higher transactional costs.

Growth Stocks Risk. Growth stocks typically invest a high portion of their
earnings back into their business and may lack the dividend yield that could
cushion their decline in a market downturn. Growth stocks may be more volatile
than other stocks because they are more sensitive to investor perceptions
regarding the growth potential of the issuing company.

Index Risk. Investments intended to track a benchmark index may not have
performance that corresponds with the performance of the benchmark index for any
period of time and may underperform the overall stock market.

Investment in Investment Vehicles Risk. Investing in other investment vehicles,
including ETFs and other mutual funds, subjects the Fund to those risks
affecting the investment vehicle, including the possibility that the value of
the underlying securities held by the investment vehicle could decrease.
Moreover, the Fund and its share­holders will incur its pro rata share of the
underlying vehicles' expenses.

Leverage Risk. The Fund's use of leverage through derivatives may cause the Fund
to be more volatile than if it had not been leveraged. Leverage can arise
through the use of derivatives.

Liquidity Risk. Investments are subject to liquidity risk when they are
difficult to purchase or sell.

Management Risk. The Fund is actively managed. There is no guarantee that the
investment strategies will be successful.

Market Risk. The market value of the securities held by the Fund may fluctuate
resulting from factors affecting the individual company or other factors such as
changing economic, political or financial market conditions.

Overweighting Risk. Overweighting investments in certain sectors or industries
of the stock market increases the risk that the Fund will suffer a loss because
of general declines in the prices of stocks in those sectors or industries.

Restricted Securities Risk. Restricted securities generally cannot be sold to
the public and may involve a high degree of business and financial risk which
may result in substantial losses to the Fund.

Smaller Companies Risk. The securities of smaller companies are subject to
greater volatility, especially during periods of economic uncertainty. These
risks are likely to be greater for micro-cap companies.

Technology Stocks Risk. Stocks of companies involved in the technology sector
may be very volatile.

The following chart and table provide some indication
of the risks of investing in the Fund by showing changes in the Fund's Class A
share performance from year to year and by showing how the Fund's average annual
returns for one, five, and ten years have compared to those of a broad measure
of market performance. As with all mutual funds, past performance (before and
after taxes) is not necessarily an indication of how the Fund will perform in
the future. Updated performance information is available on the Fund's website
at www.rydex-sgi.com or by calling 1-800-820-0888.

Highest Quarter Return
   2Q 2003   28.83%

 Lowest Quarter Return
   3Q 2001   -27.27%

After-tax returns shown in the table are calculated using the historical highest
individual federal marginal income tax rates and do not reflect the impact of
any state or local taxes. Actual after-tax returns depend on an investor's tax
situation and may differ from those shown. After-tax returns shown are not
relevant to investors who hold their Fund shares through tax-deferred
arrangements, such as 401(k) plans or individual retirement accounts ("IRAs").
After-tax returns are shown for Class A only. After-tax returns for Class B and
C will vary.