Guggenheim Transaction
On September 20, 2011, Guggenheim Capital, LLC agreed to purchase the indirect
holding company of Security Investors, LLC, the Funds investment manager
(the Investment Manager) (the Transaction). Guggenheim Capital, LLCs
subsidiary, Guggenheim Partners, LLC (Guggenheim), is a global, independent,
privately-held, diversified financial services firm with more than 1,500
dedicated professionals. The Transaction closed on February 29, 2012.
The Transaction should not result in material changes to the day-to-day
management and operation of the Fund or any increase in fees.
In anticipation of the Transaction, the Board of Trustees of the Funds
(the Board) called a special meeting of shareholders (the Meeting), at
which shareholders of the Funds of record as of October 3, 2011 were asked to
consider the approval of a new investment management agreement between the
Funds and the Investment Manager (the New Agreement). This approval was
necessary because, under the Investment Company Act of 1940 (the 1940 Act),
the Transaction could result in the termination of the Funds current
investment management agreement with the Investment Manager
(the Current Agreement). The Funds shareholders approved the
New Agreement, the terms of which are substantially identical to the
corresponding Current Agreement, except with respect to the date of execution.
