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 811-02753

SBL FUND

(Exact name of registrant as specified in charter)

ONE SECURITY BENEFIT PLACE, TOPEKA, KANSAS 66636-0001

(Address of principal executive offices) (Zip code)

RICHARD M. GOLDMAN, PRESIDENT

SBL 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: December 31

Date of reporting period: June 30, 2010

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. §3507.

Item 1. Reports to Stockholders.

SBL Fund

Semi-Annual Report

June 30, 2010

•     Series A (Large Cap Core Series)

   (formerly Equity Series)

•     Series B (Large Cap Value Series)

•     Series C (Money Market Series)

•     Series D (Global Series)

•     Series E (U.S. Intermediate Bond Series)

•     Series J (Mid Cap Growth Series)

•     Series N (Managed Asset Allocation Series)

•     Series O (All Cap Value Series)

•     Series P (High Yield Series)

•     Series Q (Small Cap Value Series)

•     Series V (Mid Cap Value Series)

•     Series X (Small Cap Growth Series)

•     Series Y (Large Cap Concentrated Growth

   Series) (formerly Select 25 Series)

•     Series Z (Alpha Opportunity Series)

SBL Fund

June 30, 2010

Semi-Annual Report

Table of Contents

Chairman’s Letter	2
Information About Your Series Expenses	3
Series A (Large Cap Core Series)	4
Series B (Large Cap Value Series)	10
Series C (Money Market Series)	16
Series D (Global Series)	22
Series E (U.S. Intermediate Bond Series)	29
Series J (Mid Cap Growth Series)	36
Series N (Managed Asset Allocation Series)	42
Series O (All Cap Value Series)	67
Series P (High Yield Series)	74
Series Q (Small Cap Value Series)	82
Series V (Mid Cap Value Series)	88
Series X (Small Cap Growth Series)	95
Series Y (Large Cap Concentrated Growth Series)	101
Series Z (Alpha Opportunity Series)	106
Notes to Financial Statements	117
Directors and Officers	137
Rydex|SGI Privacy Policies	139

1

Chairman’s Letter

June 30, 2010

To Our Shareholders:

The equity markets experienced a roller coaster ride during the first half of 2010. For the 6-month period ending June 30, 2010, the S&P 500* lost 6.65% while the NASDAQ* and Dow Jones* indexes declined 6.63% and 5.50%, respectively.

The market was fixated on an economic recovery during the first quarter. This represented a continuation of the stock market movement from 2009. However, in the second quarter, investors around the world became more macro-focused and concerned about U.S. policies regarding the deficit, debt, and budget.

From early February through the end of April, the equity market continued its upward trajectory from the March 2009 bottom, gaining approximately 15% in the three-month period. The beginning of May marked an immediate reversal that sent the indexes down into correction territory, giving up all of the gains by the end of the second quarter.

Many of our SBL Funds performed well over the period compared to the indexes and peers. In the value equity space, the MidCap Value, Large Cap Value, and All Cap Value portfolios beat their competitors. The Small Cap Growth and Large Cap Concentrated Growth strategies beat the majority of their peer group. The High Yield portfolio continues to impress, especially over the longer-term periods of three and five years where it is in the top decile. The Global strategy also beat the majority of its competitors over the 6-month period ending June 30.

Investors have reduced their cyclical company exposures as job growth appears to have stalled. May’s employment report painted a discouraging picture for the U.S. economy. Although the economy added 431,000 jobs, only 41,000 of those jobs were added to private payrolls; the balance added was due to the government’s hiring of census workers. Recovery in the labor markets disappointed investors and the unemployed again in June.

Additionally, the unemployment rate declined to 9.5% because more Americans left the work force, and therefore, were not included in the pool of available labor. The unemployment rate hasn’t been below its current level for a year. These factors highlight the fragility of the recovery and increase worries about the potential for a double-dip recession given the trending decline in GDP.

In reaction, the Federal Reserve has kept interest rates at record lows, near 0% as it has since December 2008, and kept its outlook consistent over that 17-month period while continuing to purchase U.S. Treasury securities. Congress continues to debate the need for, and benefit of, additional fiscal stimulus.

Due to current economic concerns regarding employment, the size of debt at the federal and state levels, and a precarious risk / reward perspective on equity valuations, markets are likely to remain volatile. As the federal government continues to bring its need for large levels of debt to the fixed income markets interest rates could climb, which would limit the P/E expansion in the equity markets.

Volatility, which picked up in the second quarter, will likely continue. Earnings announcements, and accompanying forward-looking statements, for the second quarter may very well determine the direction of markets for the remainder of the year. We will continue to monitor corporate earnings and expectations of future earnings along with signs of a potential double-dip recession and adjust investment risk accordingly.

Thank you for the trust you have placed in us and investing in the SBL Funds.

Sincerely,

Richard M. Goldman

President and Chairman, SBL Fund

* Indices are defined as follows:

Standard & Poor’s 500 Index (S&P 500) – a capitalization-weighted index covering 500 industrial, utility, transportation and financial companies of the U.S. markets (mostly NYSE Euronext issues).

NASDAQ Composite – a capitalization-weighted index of more than 3,000 companies listed on the NASDAQ Stock Market.

The Dow Jones Industrial Average (DJIA) – a price-weighted average of 30 significant stocks traded on the New York Stock Exchange and the NASDAQ.

Performance displayed represents past performance which is no guarantee of future results. Of course, fund performance is subject to daily market volatility and may be better or worse since the end of the last quarter. For up-to-date fund performance, call us at 800.820.0888 or visit www.rydex-sgi.com.

Read each fund’s prospectus and summary prospectus (if available) carefully before investing. It contains the fund’s investment objectives, risks, charges, expenses and other information, which should be considered carefully before investing. Obtain a prospectus and summary prospectus (if available) at www.rydex-sgi.com or call 800.820.0888

The Funds are distributed by Rydex Distributors, LLC (RDL). Security Global Investors^SM is the investment advisory arm of Security Benefit Corporation (Security Benefit). Security Global Investors consists of Security Global Investors, LLC, Security Investors, LLC and Rydex Investments. Rydex Investments is the primary business name for Rydex Advisors, LLC and Rydex Advisors II, LLC. Security Global Investors and Rydex Investments are affiliates and subsidiaries of Security Benefit, which is wholly owned by Guggenheim SBC Holdings, LLC, a special purpose entity managed by Guggenheim Partners, LLC, a diversified financial services firm with more than $100 billion in assets under supervision.

2

Information About Your Series Expenses

June 30, 2010 (Unaudited)

Calculating your ongoing Series expenses

As a shareholder of the Series, you incur ongoing costs, including management fees and other series expenses. Performance figures and expense ratios do not reflect fees and expenses associated with an investment in variable insurance products. Shares of a Series of SBL Fund are available only through the purchase of such products. This example is intended to help you understand your ongoing costs (in dollars) of investing in the Series and to compare these costs with ongoing costs of investing in other mutual funds. The example is based on an investment of $1,000 invested at the beginning of the period and held for the entire period, December 31, 2009 through June 30, 2010.

Actual Expenses

The first table provides information about actual account values and actual expenses. You may use the information in this table, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the table under the heading entitled “Expenses Paid During the Period” to estimate the expenses you paid on your account during this period.

Hypothetical Example for Comparison Purposes

The second table provides information about hypothetical account values and hypothetical expenses based on the Series actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Series actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Series and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other mutual funds.

Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any fees and expenses associated with an investment in variable insurance products. Therefore, the second table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these fees and expenses associated with an investment in variable insurance products were included, your costs would have been higher.

	Expense Ratio2		Fund Return		Beginning Account  Value December 31, 2009		Ending Account  Value June 30, 2010		Expenses Paid During  Period3
Table 1. Based on actual Series return1
Series A (Large Cap Core Series)	0.90	%	(7.01	%)	$	1,000.00	$	929.90	$	4.31
Series B (Large Cap Value Series)	0.80	%	(6.31	%)		1,000.00		936.90		3.84
Series C (Money Market Series)	0.69	%	(0.15	%)		1,000.00		998.50		3.42
Series D (Global Series)	1.25	%	(8.35	%)		1,000.00		916.50		5.94
Series E (U.S. Intermediate Bond Series)	0.77	%	4.49	%		1,000.00		1,044.90		3.90
Series J (Mid Cap Growth Series)	0.91	%	(5.00	%)		1,000.00		950.00		4.40
Series N (Managed Asset Allocation Series)	1.43	%	(4.00	%)		1,000.00		960.00		6.95
Series O (All Cap Value Series)	0.90	%	(5.22	%)		1,000.00		947.80		4.35
Series P (High Yield Series)	0.91	%	4.44	%		1,000.00		1,044.40		4.61
Series Q (Small Cap Value Series)	1.11	%	(2.68	%)		1,000.00		973.20		5.43
Series V (Mid Cap Value Series)	0.89	%	(2.94	%)		1,000.00		970.60		4.35
Series X (Small Cap Growth Series)	1.10	%	(1.86	%)		1,000.00		981.40		4.40
Series Y (Large Cap Concentrated Growth Series)	0.96	%	(7.50	%)		1,000.00		925.00		4.58
Series Z (Alpha Opportunity Series)	1.91	%	(6.99	%)		1,000.00		930.10		9.14
Table 2. Based on hypothetical 5% return (before expenses)
Series A (Large Cap Core Series)	0.90	%	5.00	%		1,000.00		1,020.33		4.51
Series B (Large Cap Value Series)	0.80	%	5.00	%		1,000.00		1,020.83		4.01
Series C (Money Market Series)	0.69	%	5.00	%		1,000.00		1,021.37		3.46
Series D (Global Series)	1.25	%	5.00	%		1,000.00		1,018.60		6.26
Series E (U.S. Intermediate Bond Series)	0.77	%	5.00	%		1,000.00		1,020.98		3.86
Series J (Mid Cap Growth Series)	0.91	%	5.00	%		1,000.00		1,020.28		4.56
Series N (Managed Asset Allocation Series)	1.43	%	5.00	%		1,000.00		1,017.70		7.15
Series O (All Cap Value Series)	0.90	%	5.00	%		1,000.00		1,020.33		4.51
Series P (High Yield Series)	0.91	%	5.00	%		1,000.00		1,020.28		4.56
Series Q (Small Cap Value Series)	1.11	%	5.00	%		1,000.00		1,019.29		5.56
Series V (Mid Cap Value Series)	0.89	%	5.00	%		1,000.00		1,020.38		4.46
Series X (Small Cap Growth Series)	1.10	%	5.00	%		1,000.00		1,019.34		5.51
Series Y (Large Cap Concentrated Growth Series)	0.96	%	5.00	%		1,000.00		1,020.03		4.81
Series Z (Alpha opportunity Series)	1.91	%	5.00	%		1,000.00		1,015.32		9.54

¹ Actual cumulative return at net asset value for the period December 31, 2009 to June 30, 2010.

² Annualized

³ Expenses are equal to the Series annualized expense ratio, net of any applicable fee waivers, multiplied by the average account value over the period, multiplied by 181/365 (to reflect the one-half year period).

3

	Series A
Performance Summary	(Large Cap Core Series	)
June 30, 2010	(unaudited	)

PERFORMANCE

$10,000 Over 10 Years

The chart above assumes a hypothetical $10,000 investment in Series A (Large Cap Core Series) on June 30, 2000 and reflects the fees and expenses of Series A. The S&P 500 Index is a capitalization-weighted index composed of 500 selected common stocks that represent the broad domestic economy and is a widely recognized unmanaged index of market performance.

Average Annual Returns

Periods Ended 6-30-101	1 Year		5 Years		10 Years
Series A	14.21	%	(2.84	%)	(4.03	%)

¹ Performance figures do not reflect fees and expenses associated with an investment in variable insurance products offered by Security Benefit Life Insurance Company. If returns had taken into account these fees and expenses, performance would have been lower. Shares of a Series of SBL Fund are available only through the purchase of such products.

The performance data quoted above represents past performance. Past performance is not predictive of future performance. The investment return and principal value of an investment will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than their original cost.

Portfolio Composition by Sector

Consumer Discretionary	14.56	%
Consumer Staples	7.57
Energy	9.40
Financials	10.57
Health Care	11.11
Industrials	17.25
Information Technology	19.60
Materials	2.83
Telecommunication Services	0.61
Utilities	2.14
Exchange Traded Funds	1.37
Cash & Other Assets, Less Liabilities	2.99
Total Net Assets	100.00	%

The accompanying notes are an integral part of the financial statements

4

Schedule of Investments	Series A
June 30, 2010 (Unaudited)	(Large Cap Core Series	)

	Shares	Value
COMMON STOCKS - 97.0%
Aerospace & Defense - 2.9%
Boeing Co.	55,100	$	3,457,525
United Technologies Corp.	39,300		2,550,963
			6,008,488
Air Freight & Logistics - 1.3%
FedEx Corp.	39,300		2,755,323
Application Software - 0.6%
Synopsys, Inc.*	59,100		1,233,417
Asset Management & Custody Banks - 0.8%
Bank of New York Mellon Corp.	69,400		1,713,486
Auto Parts & Equipment - 1.5%
Johnson Controls, Inc.	118,900		3,194,843
Biotechnology - 3.5%
Amgen, Inc.*	66,900		3,518,940
Celgene Corp.*	63,700		3,237,234
Genzyme Corp.*	10,700		543,239
			7,299,413
Building Products - 1.2%
USG Corp.*	203,500		2,458,280
Communications Equipment - 1.8%
Motorola, Inc.*	575,625		3,753,075
Computer Hardware - 5.7%
Apple, Inc.*	23,460		5,900,894
Hewlett-Packard Co.	148,450		6,424,916
			12,325,810
Computer Storage & Peripherals - 2.3%
EMC Corp.*	266,060		4,868,898
Construction & Farm Machinery & Heavy Trucks - 1.7%
Cummins, Inc.	56,500		3,679,845
Consumer Finance - 0.1%
First Marblehead Corp.*	128,952		303,037
Data Processing & Outsourced Services - 2.9%
Computer Sciences Corp.	32,700		1,479,675
Visa, Inc.	4,088		289,226
Western Union Co.	288,100		4,295,571
			6,064,472
Department Stores - 2.4%
JC Penney Company, Inc.	76,600		1,645,368
Kohl’s Corp.*	72,450		3,441,375
			5,086,743
Diversified Banks - 5.4%
U.S. Bancorp	256,448		5,731,614
Wells Fargo & Co.	209,704		5,368,422
			11,100,036
Diversified Chemicals - 2.2%
Dow Chemical Co.	194,895		4,622,909
			4,622,909
Drug Retail - 1.0%
CVS Caremark Corp.	72,300		2,119,836
Electric Utilities - 1.6%
Edison International	107,600		3,413,072
Electrical Components & Equipment - 1.7%
Cooper Industries plc	83,780		3,686,320
Electronic Manufacturing Services - 1.1%
Tyco Electronics, Ltd.	93,400		2,370,492
Exchange Traded Funds - 1.4%
iShares Russell 1000 Value Index Fund	25,600		1,387,776
iShares S&P 500 Value Index Fund	30,400		1,509,664
			2,897,440
Food Distributors - 1.6%
Sysco Corp.	120,300		3,436,971
Health Care Distributors - 1.7%
McKesson Corp.1	52,650		3,535,974
Health Care Equipment - 2.3%
Covidien plc	44,800		1,800,064
Hospira, Inc.*	54,600		3,136,770
			4,936,834
Health Care Services - 0.5%
Medco Health Solutions, Inc.*	18,400		1,013,472
Home Improvement Retail - 3.1%
Home Depot, Inc.	127,115		3,568,118
Lowe’s Companies, Inc.	146,500		2,991,530
			6,559,648
Hotels, Resorts & Cruise Lines - 1.3%
Royal Caribbean Cruises Ltd.*	116,000		2,641,320
Hypermarkets & Super Centers - 2.4%
Costco Wholesale Corp.	46,800		2,566,044
Wal-Mart Stores, Inc.1	51,000		2,451,570
			5,017,614
Independent Power Producers & Energy Traders - 0.5%
NRG Energy, Inc.*	51,900		1,100,799
Industrial Conglomerates - 3.4%
3M Co.	47,900		3,783,621
McDermott International, Inc.*	145,900		3,160,194
			6,943,815
Industrial Machinery - 0.8%
Parker Hannifin Corp.	30,300		1,680,438
Insurance Brokers - 1.1%
AON Corporation	63,800		2,368,256
Integrated Oil & Gas - 5.0%
Chevron Corp.	39,500		2,680,470

The accompanying notes are an integral part of the financial statements

5

Schedule of Investments	Series A
June 30, 2010 (Unaudited)	(Large Cap Core Series	)

	Shares	Value
COMMON STOCKS - 97.0% (continued)
Integrated Oil & Gas - 5.0% (continued)
ConocoPhillips	19,000	$	932,710
Exxon Mobil Corp.	60,300		3,441,321
Occidental Petroleum Corp.	47,200		3,641,480
			10,695,981
Integrated Telecommunication Services - 0.6%
Windstream Corp.	122,400		1,292,544
Internet Retail - 1.9%
Amazon.com, Inc.*	35,950		3,927,897
Managed Health Care - 1.0%
Aetna, Inc.	80,200		2,115,676
Movies & Entertainment - 2.8%
Time Warner, Inc.	81,500		2,356,165
Walt Disney Co.	110,500		3,480,750
			5,836,915
Oil & Gas Equipment & Services - 2.5%
Halliburton Co.	92,500		2,270,875
Schlumberger Ltd.	52,500		2,905,350
			5,176,225
Oil & Gas Exploration & Production - 0.8%
Chesapeake Energy Corp.	80,000		1,676,000
Oil & Gas Storage & Transportation - 1.1%
Williams Companies, Inc.	124,100		2,268,548
Other Diversified Financial Services - 0.7%
JPMorgan Chase & Co.	41,036		1,502,328
Paper Packaging - 0.6%
Bemis Company, Inc.	49,800		1,344,600
Pharmaceuticals - 2.1%
Merck & Company, Inc.	21,658		757,380
Teva Pharmaceutical Industries Ltd. ADR	72,390		3,763,556
			4,520,936
Property & Casualty Insurance - 1.5%
Berkshire Hathaway, Inc.1, *	27		3,240,000
Railroads - 2.8%
CSX Corp.	69,100		3,429,433
Union Pacific Corp.	36,400		2,530,164
			5,959,597
Regional Banks - 1.0%
BB&T Corp.	43,417		1,142,301
Regions Financial Corp.	141,300		929,754
			2,072,055
Research & Consulting Services - 1.5%
Equifax, Inc.	114,600		3,215,676
Restaurants - 1.6%
McDonald’s Corp.	52,600		3,464,762
Semiconductor Equipment - 1.6%
Lam Research Corp.*	86,250		3,282,675
Semiconductors - 1.4%
Marvell Technology Group Ltd.*	189,200		2,981,792
Soft Drinks - 1.7%
PepsiCo, Inc.	57,210		3,486,950
Systems Software - 2.1%
Oracle Corp.	207,700		4,457,242
Tobacco - 0.9%
Altria Group, Inc.	40,400		809,616
Philip Morris International, Inc.	23,900		1,095,576
			1,905,192
TOTAL COMMON STOCKS (cost $223,659,631)		$	204,613,967
Total Investments - 97.0%2 (cost $223,659,631)		$	204,613,967
Cash & Other Assets, Less Liabilities - 3.0%			6,326,242
Total Net Assets - 100.0%		$	210,940,209

For federal income tax purposes the identified cost of investments owned at June 30, 2010 was $224,014,034.

ADR American Depository Receipt

plc Public limited Company

* Non-income producing security

¹ Security is segregated as collateral for open written option contracts.

² Unless otherwise indicated, the values of the securities of the Portfolio are determined based on Level 1 inputs.

The accompanying notes are an integral part of the financial statements

6

Series A

(Large Cap Core Series)

Statement of Assets and Liabilities

June 30, 2010 (Unaudited)

Assets:
Investments, at value*	$	204,613,967
Cash		6,325,658
Receivables:
Fund shares sold		638,856
Securities sold		4,053,986
Dividends		293,385
Prepaid expenses		14,704
Total assets		215,940,556
Liabilities:
Payable for:
Fund shares redeemed		97,642
Securities purchased		4,537,288
Written options, at value (premiums received $148,716)		126,620
Management fees		128,968
Administration fees		18,081
Transfer agent/maintenance fees		4,188
Custodian fees		50
Professional fees		23,337
Other fees		64,173
Total liabilities		5,000,347
Net assets	$	210,940,209
Net assets consist of:
Paid in capital	$	275,966,171
Undistributed net investment income		580,707
Accumulated net realized loss on sale of investments		(46,583,102	)
Net unrealized depreciation in value of investments		(19,023,567	)
Net assets	$	210,940,209
Capital shares outstanding		11,356,306
Net asset value per share (net assets divided by shares outstanding)	$	18.57
*Investments,at cost	$	223,659,631

Statement of Operations

For Six Months Ended June 30, 2010 (Unaudited)

Investment Income:
Dividends (net of foreign withholding tax $404)	$	1,499,742
Interest		1,310
Total investment income		1,501,052
Expenses:
Management fees		764,190
Administration fees		96,920
Transfer agent/maintenance fees		14,919
Custodian fees		3,657
Directors’ fees		7,046
Professional fees		15,239
Reports to shareholders		15,015
Other		3,359
Total expenses		920,345
Net investment income		580,707
Net Realized and Unrealized Gain (Loss):
Net realized gain (loss) during the period on:
Investments		9,914,651
Net realized gain		9,914,651
Net change in unrealized appreciation (depreciation) during the period on:
Investments		(30,744,655	)
Options written		22,096
Net change in unrealized appreciation (depreciation)		(30,722,559	)
Net realized and unrealized loss		(20,807,908	)
Net decrease in net assets resulting from operations	$	(20,227,201	)

The accompanying notes are an integral part of the financial statements

7

Statements of Changes in Net Assets	Series A
	(Large Cap Core Series)

	Six Months Ended June 30, 2010 (unaudited)			Year Ended December 31, 2009
Increase (decrease) in net assets from operations:
Net investment income	$	580,707		$	1,140,095
Net realized gain (loss) during the period on investments		9,914,651			(27,012,581	)
Net change in unrealized appreciation (depreciation) during the period on investments		(30,722,559	)		69,815,569
Net increase (decrease) in net assets resulting from operations		(20,227,201	)		43,943,083
Capital share transactions:
Proceeds from sale of shares		17,110,798			17,506,604
Issuance of shares in connection with the acquisition of SBL Fund Series H (Note 12)		47,882,828			—
Cost of shares redeemed		(19,833,661	)		(40,551,126	)
Net increase (decrease) from capital share transactions		45,159,965			(23,044,522	)
Net increase in net assets		24,932,764			20,898,561
Net assets:
Beginning of period		186,007,445			165,108,884
End of period	$	210,940,209		$	186,007,445
Undistributed net investment income at end of period	$	580,707		$	1,140,095
Capital share activity:
Shares sold		821,790			1,102,467
Issuance of shares in connection with the acquisition of SBL Fund Series H (Note 12)		2,188,429			—
Shares redeemed		(967,925	)		(2,524,592	)
Total capital share activity		2,042,294			(1,422,125	)

The accompanying notes are an integral part of the financial statements

8

Financial Highlights	Series A
Selected data for each share of capital stock outstanding throughout each period	(Large Cap Core Series	)

	Six Months Ended June 30, 2010a,g,h			2009			2008			2007			2006			Year Ended December 31, 2005
Per Share Data
Net asset value, beginning of period	$	19.97		$	15.38		$	24.57		$	25.83		$	22.88		$	21.93
Income (loss) from investment operations:
Net investment incomeb		0.06			0.11			0.14			0.14			0.11			0.16
Net gain (loss) on investments (realized and unrealized)		(1.46	)		4.48			(9.33	)		(1.40	)		2.84			0.79
Total from investment operations		(1.40	)		4.59			(9.19	)		(1.26	)		2.95			0.95
Net asset value, end of period	$	18.57		$	19.97		$	15.38		$	24.57		$	25.83		$	22.88
Total Returnc		(7.01	%)		29.84	%		(37.40	%)		(4.88	%)		12.89	%		4.33	%
Ratios/Supplemental Data
Net assets, end of period (in thousands)	$	210,940		$	186,007		$	165,109		$	328,995		$	441,788		$	466,931
Ratios to average net assets:
Net investment income		0.57	%		0.68	%		0.66	%		0.52	%		0.33	%		0.55	%
Total expensesd		0.90	%		0.92	%		0.90	%		0.89	%		0.90	%		0.89	%
Net expensese		0.90	%		0.92	%		0.90	%		0.89	%		0.90	%		0.89	%
Portfolio turnover rate		107	%		78	%		142	%f		14	%		26	%		37	%

^a Unaudited figures for the six months ended June 30, 2010. Percentage amounts, except total return, have been annualized.

^b Net investment income (loss) was computed using average shares outstanding throughout the period.

^c Total return does not take into account any of the expenses associated with an investment in variable insurance products offered by Security Benefit Life Insurance Company. If total return had taken into account these expenses, performance would have been lower. Shares of a series of SBL Fund are available only through the purchase of such products.

^d Total expense information reflects the expense ratios absent expense reductions by the Investment Manager and custodian earnings credits, as applicable.

^e Net expense information reflects the expense ratios after voluntary expense waivers, reimbursements and custodian earnings credits, as applicable.

^f Significant variation in the portfolio turnover rate is due to Investment Manager’s appointment of new portfolio manager for the Series.

^g The financial highlights for the Series A exclude the historical highlights of the Series H. The assets of the Series H were acquired by the Series A on April 30, 2010.

^h Effective May 1, 2010, the Series name became Large Cap Core Series. Prior to May 1, 2010, the Series was known as the Equity Series.

The accompanying notes are an integral part of the financial statements

9

	Series B
Performance Summary	(Large Cap Value Series	)
June 30, 2010	(unaudited	)

PERFORMANCE

$10,000 Over 10 Years

The chart above assumes a hypothetical $10,000 investment in Series B (Large Cap Value Series) on June 30, 2000 and reflects the fees and expenses of Series B. The Russell 1000 Value Index is an unmanaged index representing the performance of those Russell 1000 Index companies with lower price-to-book ratios and lower forecasted growth values.

Average Annual Returns

Periods Ended 6-30-101	1 Year		5 Years		10 Years
Series B	13.91	%	1.33	%	1.25	%

¹ Performance figures do not reflect fees and expenses associated with an investment in variable insurance products offered by Security Benefit Life Insurance Company. If returns had taken into account these fees and expenses, performance would have been lower. Shares of a Series of SBL Fund are available only through the purchase of such products.

The performance data quoted above represents past performance. Past performance is not predictive of future performance. The investment return and principal value of an investment will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than their original cost.

Portfolio Composition by Sector

Consumer Discretionary	6.98	%
Consumer Staples	8.97
Energy	12.55
Financials	16.03
Health Care	9.06
Industrials	18.27
Information Technology	11.85
Materials	2.93
Telecommunication Services	1.35
Utilities	4.53
Exchange Traded Funds	1.03
Repurchase Agreement	4.63
Cash & Other Assets, Less Liabilities	1.82
Total Net Assets	100.00	%

The accompanying notes are an integral part of the financial statements

10

Schedule of Investments	Series B
June 30, 2010 (Unaudited)	(Large Cap Value Series)

	Shares	Value
COMMON STOCKS - 93.6%
Aerospace & Defense - 2.5%
United Technologies Corp.	102,000	$	6,620,820
Air Freight & Logistics - 2.7%
FedEx Corp.	101,643		7,126,191
Application Software - 1.2%
Synopsys, Inc.*	151,200		3,155,544
Asset Management & Custody Banks - 1.7%
Bank of New York Mellon Corp.	177,600		4,384,944
Biotechnology - 0.5%
Genzyme Corp.*	27,200		1,380,944
Building Products - 2.5%
USG Corp.*	528,000		6,378,240
Computer Hardware - 2.1%
Hewlett-Packard Co.	125,000		5,410,000
Consumer Finance - 0.3%
First Marblehead Corp.*	317,112		745,213
Data Processing & Outsourced Services - 6.2%
Computer Sciences Corp	97,900		4,429,975
Visa, Inc.	10,370		733,678
Western Union Co.	737,500		10,996,125
			16,159,778
Department Stores - 1.6%
JC Penney Company, Inc.	198,800		4,270,224
Diversified Banks - 5.0%
U.S. Bancorp	285,846		6,388,658
Wells Fargo & Co.	249,025		6,375,040
			12,763,698
Diversified Chemicals - 1.6%
Dow Chemical Co.	176,400		4,184,208
Drug Retail - 2.1%
CVS Caremark Corp.	186,200		5,459,384
Electric Utilities - 3.4%
Edison International	282,400		8,957,728
Electronic Manufacturing Services - 2.3%
Tyco Electronics, Ltd.	238,850		6,062,013
Exchange Traded Funds - 1.0%
iShares Russell 1000 Value Index Fund	49,500		2,683,395
Health Care Equipment - 4.7%
Covidien plc	101,650		4,084,297
Hospira, Inc.*	139,600		8,020,020
			12,104,317
Health Care Services - 1.0%
Medco Health Solutions, Inc.1, *	47,000		2,588,760
Home Improvement Retail - 2.8%
Lowe’s Companies, Inc.	343,500		7,014,270
Hypermarkets & Super Centers - 5.0%
Costco Wholesale Corp.	119,500		6,552,185
Wal-Mart Stores, Inc.1,2	132,200		6,354,854
			12,907,039
Independent Power Producers & Energy Traders - 1.1%
NRG Energy, Inc.*	133,500		2,831,535
Industrial Conglomerates - 3.2%
McDermott International, Inc.*	379,900		8,228,634
Industrial Machinery - 1.7%
Parker Hannifin Corp.	77,500		4,298,150
Insurance Brokers - 2.4%
AON Corporation	166,100		6,165,632
Integrated Oil & Gas - 6.7%
Chevron Corp.	98,600		6,690,996
ConocoPhillips	41,200		2,022,508
Exxon Mobil Corp.	151,700		8,657,519
			17,371,023
Integrated Telecommunication Services - 1.3%
Windstream Corp.	331,932		3,505,202
Managed Health Care - 2.1%
Aetna, Inc.	208,500		5,500,230
Movies & Entertainment - 2.6%
Time Warner, Inc.	237,533		6,867,079
Oil & Gas Equipment & Services - 2.3%
Halliburton Co.	244,000		5,990,200
Oil & Gas Exploration & Production - 1.4%
Chesapeake Energy Corp.	179,200		3,754,240
Oil & Gas Storage & Transportation - 2.1%
Williams Companies, Inc.	300,700		5,496,796
Other Diversified Financial Services - 1.5%
JPMorgan Chase & Co.	106,769		3,908,813
Paper Packaging - 1.3%
Bemis Company, Inc.	126,900		3,426,300
Pharmaceuticals - 0.8%
Merck & Company, Inc.	56,170		1,964,265

The accompanying notes are an integral part of the financial statements

11

Schedule of Investments	Series B
June 30, 2010 (Unaudited)	(Large Cap Value Series)

	Shares		Value
COMMON STOCKS - 93.6% (continued)
Property & Casualty Insurance - 3.2%
Berkshire Hathaway, Inc.2,*		70	$	8,400,000
Railroads - 2.5%
Union Pacific Corp.		94,000		6,533,940
Regional Banks - 2.0%
BB&T Corp.		112,263		2,953,640
Regions Financial Corp.		356,700		2,347,086
				5,300,726
Research & Consulting Services - 3.3%
Equifax, Inc.		295,500		8,291,729
Tobacco - 1.9%
Altria Group, Inc.		108,000		2,164,320
Philip Morris International, Inc.		60,800		2,787,072
				4,951,392
TOTAL COMMON STOCKS (cost $260,280,510)			$	243,142,596
	Principal Amount		Value
REPURCHASE AGREEMENT - 4.6%
UMB Financial Corp, 0.05%, dated 06/30/10, matures 07/01/10; repurchase amount $12,029,017 (Collateralized by Fannie Mae Discount Note, 4.375%, 07/17/13 with a value of $6,553,830 and U.S. Treasury Note, 0.875%, 04/30/11 with a value of $5,715,807)2	$	12,029,000	$	12,029,000
TOTAL REPURCHASE AGREEMENT (cost $12,029,000)			$	12,029,000
Total Investments - 98.2%3 (cost $272,309,510)			$	255,171,596
Cash & Other Assets, Less Liabilities - 1.8%				4,740,997
Total Net Assets - 100.0%			$	259,912,593

For federal income tax purposes the identified cost of investments owned at June 30, 2010 was $272,521,564.

plc Public Limited Company

* Non-income producing security

¹ Value determined based on Level 2 inputs.

² Security is segregated as collateral for open written option contracts.

³ Unless otherwise indicated, the values of the securities of the Portfolio are determined based on Level 1 inputs.

The accompanying notes are an integral part of the financial statements

12

Series B

(Large Cap Value Series)

Statement of Assets and Liabilities

June 30, 2010 (Unaudited)

Assets:
Investments, at value*	$	255,171,596
Cash		12,021,608
Receivables:
Fund shares sold		6,257,263
Dividends		398,414
Prepaid expenses		4,003
Total assets		273,852,884
Liabilities:
Payable for:
Fund shares redeemed		368,900
Securities purchased		13,050,500
Written options, at value (premiums received $337,313)		279,190
Management fees		144,884
Administration fees		21,277
Transfer agent/maintenance fees		2,105
Custodian fees		990
Professional fees		25,776
Other fees		46,669
Total liabilities		13,940,291
Net assets	$	259,912,593
Net assets consist of:
Paid in capital	$	440,448,323
Undistributed net investment income		1,064,594
Accumulated net realized loss on sale of investments		(164,520,532	)
Net unrealized depreciation in value of investments		(17,079,792	)
Net assets	$	259,912,593
Capital shares outstanding		12,494,609
Net asset value per share (net assets divided by shares outstanding)	$	20.80
*  Investments, at cost	$	272,309,510

Statement of Operations

For Six Months Ended June 30, 2010 (Unaudited)

Investment Income:
Dividends	$	2,194,557
Interest		4,848
Total investment income		2,199,405
Expenses:
Management fees		922,630
Administration fees		134,993
Transfer agent/maintenance fees		12,851
Custodian fees		6,080
Directors’ fees		12,504
Professional fees		19,046
Reports to shareholders		21,636
Other		5,071
Total expenses		1,134,811
Net investment income		1,064,594
Net Realized and Unrealized Gain (Loss):
Net realized gain (loss) during the period on:
Investments		9,034,738
Net realized gain		9,034,738
Net change in unrealized appreciation (depreciation) during the period on:
Investments		(27,235,457	)
Options written		58,122
Net change in unrealized appreciation (depreciation)		(27,177,335	)
Net realized and unrealized loss		(18,142,597	)
Net decrease in net assets resulting from operations	$	(17,078,003	)

The accompanying notes are an integral part of the financial statements

13

Statements of Changes in Net Assets	Series B
	(Large Cap Value Series)

	Six Months Ended June 30, 2010 (unaudited)			Year Ended December 31, 2009
Increase (decrease) in net assets from operations:
Net investment income	$	1,064,594		$	2,616,829
Net realized gain (loss) during the period on investments		9,034,738			(21,722,829	)
Net change in unrealized appreciation (depreciation) during the period on investments		(27,177,335	)		77,753,258
Net increase (decrease) in net assets resulting from operations		(17,078,003	)		58,647,258
Capital share transactions:
Proceeds from sale of shares		29,792,320			40,712,808
Cost of shares redeemed		(33,275,110	)		(69,858,540	)
Net decrease from capital share transactions		(3,482,790	)		(29,145,732	)
Net increase (decrease) in net assets		(20,560,793	)		29,501,526
Net assets:
Beginning of period		280,473,386			250,971,860
End of period	$	259,912,593		$	280,473,386
Undistributed net investment income at end of period	$	1,064,594		$	2,616,829
Capital share activity:
Shares sold		1,312,188			2,258,834
Shares redeemed		(1,453,154	)		(3,921,822	)
Total capital share activity		(140,966	)		(1,662,988	)

The accompanying notes are an integral part of the financial statements

14

Financial Highlights	Series B
Selected data for each share of capital stock outstanding throughout each period	(Large Cap Value Series	)

	Six Months Ended June  30, 2010a			2009			2008			2007			2006			Year Ended December  31, 2005b
Per Share Data
Net asset value, beginning of period	$	22.20		$	17.55		$	27.94		$	26.40		$	21.64		$	19.58
Income (loss) from investment operations:
Net investment incomec		0.09			0.19			0.29			0.25			0.20			0.24
Net gain (loss) on investments (realized and unrealized)		(1.49	)		4.46			(10.68	)		1.29			4.56			1.82
Total from investment operations		(1.40	)		4.65			(10.39	)		1.54			4.76			2.06
Net asset value, end of period	$	20.80		$	22.20		$	17.55		$	27.94		$	26.40		$	21.64
Total Returnd		(6.31	%)		26.50	%		(37.19	%)		5.83	%		22.00	%		10.52	%
Ratios/Supplemental Data
Net assets, end of period (in thousands)	$	259,913		$	280,473		$	250,972		$	479,972		$	480,683		$	410,692
Ratios to average net assets:
Net investment income		0.75	%		1.03	%		1.21	%		0.90	%		0.80	%		0.98	%
Total expensese		0.80	%		0.81	%		0.80	%		0.79	%		0.79	%		0.84	%
Net expensesf		0.80	%		0.81	%		0.80	%		0.79	%		0.79	%		0.84	%
Net expenses prior to custodian earnings credits and net of expense waivers		0.80	%		0.81	%		0.80	%		0.79	%		0.79	%		0.84	%
Portfolio turnover rate		13	%		16	%		32	%		29	%		20	%		99	%

^a Unaudited figures for the six months ended June 30, 2010. Percentage amounts, except total return, have been annualized.

^b Security Global Investors (SGI), formerly Security Management Company, LLC, became the advisor of Series B effective June 30, 2005. Prior to June 30, 2005, SGI paid Dreyfus Corporation for sub-advisory services.

^c Net investment income (loss) was computed using average shares outstanding throughout the period.

^d Total return does not take into account any of the expenses associated with an investment in variable insurance products offered by Security Benefit Life Insurance Company. If total return had taken into account these expenses, performance would have been lower. Shares of a series of SBL Fund are available only through the purchase of such products.

^e Total expense information reflects the expense ratios absent expense reductions by the Investment Manager and custodian earnings credits, as applicable.

^f Net expense information reflects the expense ratios after voluntary expense waivers, reimbursements and custodian earnings credits, as applicable.

The accompanying notes are an integral part of the financial statements

15

	Series C
Performance Summary	(Money Market Series	)
June 30, 2010	(unaudited	)

PERFORMANCE

Portfolio Composition by Quality Ratings

Tier 1 Investments	100.17	%
Liabilities, Less Cash & Other Assets	(0.17	%)
Total Net Assets	100.00	%

Average Annual Returns

Periods Ended 6-30-101	1 Year		5 Years		10 Years
Series C	(0.44	%)	2.44	%	2.26	%

¹ Performance figures do not reflect fees and expenses associated with an investment in variable insurance products offered by Security Benefit Life Insurance Company. If returns had taken into account these fees and expenses, performance would have been lower. Shares of a Series of SBL Fund are available only through the purchase of such products.

The performance data quoted above represents past performance. Past performance is not predictive of future performance. The investment return and principal value of an investment will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than their original cost.

The accompanying notes are an integral part of the financial statements

16

Schedule of Investments	Series C
June 30, 2010 (Unaudited)	(Money Market Series	)

	Principal Amount		Value
MORTGAGE BACKED SECURITIES - 8.8%
Federal Farm Credit Bank - 7.0%
U.S. Agency Bonds & Notes - 7.0%
Federal Farm Credit Bank
0.40%, 10/1/20101	$	3,000,000	$	3,001,347
0.39%, 12/1/20101		2,500,000		2,500,073
0.38%, 12/1/20101		3,000,000		3,000,081
0.40%, 2/3/20111		2,000,000		2,000,016
				10,501,517
				10,501,517
Federal Home Loan Mortgage Corporation - 1.8%
U.S. Agency Bonds & Notes - 1.8%
Federal Home Loan Mortgage Corporation
0.19%, 7/12/20121,2		2,695,000		2,694,884
				2,694,884
TOTAL MORTGAGE BACKED SECURITIES (cost $13,194,988)			$	13,196,401
	Principal Amount		Value
ASSET BACKED SECURITIES - 0.2%
Other Non-Agency - 0.2%
Small Business Administration Pools
#502353, 1.00%, 20181,2,5	$	29,710	$	29,710
#503295, 0.75%, 20211,2,5		65,071		64,629
#503303, 0.75%, 20211,2,5		118,352		117,548
#503343, 0.88%, 20211,2,5		89,074		89,074
			$	300,961
TOTAL ASSET BACKED SECURITIES (cost $302,322)			$	300,961
	Principal Amount		Value
U.S. GOVERNMENT SPONSORED AGENCY BONDS & NOTES - 24.3%
Federal Farm Credit Discount Note
0.22%, 7/9/20101	$	2,000,000	$	1,999,986
0.20%, 8/3/20101		3,120,000		3,119,828
Federal Home Loan Bank
0.40%, 12/27/20101		2,000,000		2,000,046
0.45%, 12/29/20101		2,000,000		2,001,690
0.28%, 1/14/20111,2		2,000,000		2,000,006
0.50%, 3/14/20111		2,000,000		2,000,430
0.57%, 4/13/20111		2,000,000		2,001,004
Federal Home Loan Mortgage
0.23%, 8/10/20101		1,575,000		1,574,894
Federal National Mortgage Association
0.19%, 7/13/20101 ,2		1,800,000		1,799,996
0.20%, 8/2/20101		2,000,000		1,999,894
0.19%, 8/19/20101		5,000,000		4,999,590
0.30%, 9/13/20101		2,000,000		1,999,588
0.31%, 10/1/20101		1,100,000		1,099,579
0.32%, 11/1/20101		3,500,000		3,497,610
0.30%, 11/15/20101		2,500,000		2,498,098
0.39%, 1/18/20111		2,000,000		1,997,096
TOTAL U.S GOVERNMENT SPONSORED AGENCY BONDS & NOTES (cost $36,578,817)			$	36,589,335
	Principal Amount		Value
COMMERCIAL PAPER - 29.6%
Automotive - 1.0%
American Honda Finance Corp.
0.25%, 07/19//20101	$	1,450,000	$	1,449,819
Banking - 4.7%
Bank of America Corp.
0.18%, 07/15/20101		4,000,000		3,999,720
UBS Finance LLC
0.29%, 07/02/20101		3,000,000		2,999,976
				6,999,696
Brokerage - 1.9%
ING Funding LLC
0.30%, 07/12/20101		1,000,000		999,908
ING U.S. Funding LLC
0.33%, 07/13/20101		2,000,000		1,999,839
				2,999,747
Consumer Products - 2.0%
Procter & Gamble Co.
0.22%, 07/08/20101,3		3,000,000		2,999,872
Financial Companies - Captive - 0.7%
Caterpillar Financial Services Corp.
0.25%, 07/20/20101		1,000,000		999,868
Food & Beverage - 4.0%
Nestle Capital Corp.
0.23%, 07/13/20101,3		4,000,000		3,999,693
0.25%, 07/20/20101,3		2,000,000		1,999,736
				5,999,429
Life Insurance - 3.3%
General Reinsurance Corp.
0.21%, 07/02/20101		5,000,000		4,999,970
Non U.S. Banking - 10.0%
Barclays Funding LLC
0.15%, 07/02/20101		2,000,000		1,999,992
0.18%, 07/30/20101		3,000,000		2,999,564
Danske Corp.
0.30%, 07/14/20101,3		1,000,000		999,892
0.35%, 07/16/20101,3		3,000,000		2,999,563
0.29%, 07/20/20101,3		1,000,000		999,847
Societe Generale
0.35%, 07/08/20101		2,000,000		1,999,864
0.35%, 07/20/20101		3,000,000		2,999,446
				14,998,168
Trade Receivables - 2.0%
Sheffield Receivables Corp.
0.32%, 07/01/20101,3		2,000,000		2,000,000
0.36%, 07/16/20101,3		1,000,000		999,850
				2,999,850
TOTAL COMMERCIAL PAPER (cost $44,446,361)			$	44,446,419

The accompanying notes are an integral part of the financial statements

17

Schedule of Investments	Series C
June 30, 2010 (Unaudited)	(Money Market Series	)

	Principal Amount		Value
REPURCHASE AGREEMENT - 37.3%
UMB Financial Corp., 0.05%, dated 06/30/10, matures 07/01/10; repurchase amount $55,989,078 (Collateralized by U.S. Treasury Note, 1.5%, 07/15/12 with a value of $41,212,777 and U.S. Treasury Note, 1.375%, 04/15/12 with a value of $15,896,078)1	$	55,989,000	$	55,989,000
TOTAL REPURCHASE AGREEMENT (cost $55,989,000)			$	55,989,000
Total Investments - 100.2%4
(cost $150,511,488)			$	150,522,116
Liabilities, Less Cash & Other Assets - (0.2)%				(248,056	)
Total Net Assets - 100.0%			$	150,274,060

For federal income tax purposes the indentified cost of investments owned at June 30, 2010 was $150,511,488.

¹ Value determined based on Level 2 inputs.

² Variable rate security. Rate indicated is rate effective at June 30, 2010.

³ Security is a 144A or Section 4(2) security. The total market value of 144A or Section 4(2) securities is $16,998,453 (cost $16,998,453) or 11.3% of total net assets.

⁴ Unless otherwise indicated, the values of the securities of the Portfolio are determined based on Level 1 inputs.

⁵ Maturity date indicated is next interest reset date.

The accompanying notes are an integral part of the financial statements

18

Series C

(Money Market Series)

Statement of Assets and Liabilities

June 30, 2010 (Unaudited)

Assets:
Investments, at value*	$	94,533,116
Repurchase agreement, at value*		55,989,000
Receivables:
Fund shares sold		217,730
Securities sold		72,596
Interest		17,604
Prepaid expenses		1,812
Total assets		150,831,858
Liabilities:
Cash overdraft		3,408
Payable for:
Fund shares redeemed		440,775
Management fees		63,373
Administration fees		15,313
Transfer agent/maintenance fees		2,105
Custodian fees		403
Directors’ fees		1,094
Professional fees		9,896
Other fees		21,431
Total liabilities		557,798
Net Assets	$	150,274,060
Net assets consist of:
Paid in capital	$	150,589,914
Accumulated net investment loss		(330,683	)
Undistributed net realized gain on sale of investments		4,201
Net unrealized appreciation in value of investments		10,628
Net assets	$	150,274,060
Capital shares outstanding		11,101,051
Net asset value per share (net assets divided by shares outstanding)	$	13.54
*  Investments, at cost	$	150,511,488

Statement of Operations

For Six Months Ended June 30, 2010 (Unaudited)

Investment income:
Interest	$	171,781
Total investment income		171,781
Expenses:
Management fees		366,154
Administration fees		72,186
Transfer agent/maintenance fees		12,845
Custodian fees		6,270
Director’s fees		7,816
Professional fees		12,678
Reports to shareholders		20,106
Other		4,409
Total expenses		502,464
Net investment loss		(330,683	)
Net Realized and Unrealized Gain (Loss):
Net realized gain (loss) during the period on:
Investments		4,201
Net realized gain		4,201
Net change in unrealized appreciation (depreciation) during the period on:
Investments		37,137
Net change in unrealized appreciation (depreciation)		37,137
Net realized and unrealized gain		41,338
Net decrease in net assets resulting from operations	$	(289,345	)

The accompanying notes are an integral part of the financial statements.

19

Statements of Changes in Net Assets	Series C
	(Money Market Series	)

	Six Months Ended June  30, 2010 (unaudited)			Year Ended December 31, 2009
Increase (decrease) in net assets from operations:
Net investment loss	$	(330,683	)	$	(479,970	)
Net realized gain during the period on investments		4,201			—
Net change in unrealized appreciation (depreciation) during the period on investments		37,137			(209,951	)
Net decrease in net assets resulting from operations		(289,345	)		(689,921	)
Capital share transactions:
Proceeds from sale of shares		118,977,588			191,606,637
Cost of shares redeemed		(121,675,819	)		(305,973,233	)
Net decrease from capital share transactions		(2,698,231	)		(114,366,596	)
Net decrease in net assets		(2,987,576	)		(115,056,517	)
Net assets:
Beginning of period		153,261,636			268,318,153
End of period	$	150,274,060		$	153,261,636
Accumulated net investment loss at end of period	$	(330,683	)	$	—
Capital share activity:
Shares sold		8,782,733			14,085,993
Shares redeemed		(8,980,479	)		(22,496,450	)
Total capital share activity		(197,746	)		(8,410,457	)

The accompanying notes are an integral part of the financial statements

20

Financial Highlights	Series C
Selected data for each share of capital stock outstanding throughout each period	(Money Market Series	)

	Six Months Ended June  30, 2010a			2009			2008			2007			2006			Year Ended December 31, 2005
Per Share Data
Net asset value, beginning of period	$	13.56		$	13.61		$	13.33		$	12.73		$	12.19		$	11.87
Income (loss) from investment operations:
Net investment income (loss)b		(0.03	)		(0.03	)		0.26			0.60			0.45			0.33
Net gain (loss) on investments (realized and unrealized)		0.01			(0.02	)		0.02			—			0.09			(0.01	)
Total from investment operations		(0.02	)		(0.05	)		0.28			0.60			0.54			0.32
Net asset value, end of period	$	13.54		$	13.56		$	13.61		$	13.33		$	12.73		$	12.19
Total Returnc		(0.15	%)		(0.37	%)		2.10	%		4.71	%		4.43	%		2.70	%
Ratios/Supplemental Data
Net assets, end of period (in thousands)	$	150,274		$	153,262		$	268,318		$	168,661		$	99,044		$	71,655
Ratios to average net assets:
Net investment income (loss)		(0.45	%)		(0.23	%)		1.94	%		4.59	%		4.43	%		2.63	%
Total expensesd		0.69	%		0.67	%		0.65	%		0.66	%		0.68	%		0.69	%
Net expensese		0.69	%		0.67	%		0.65	%		0.66	%		0.68	%		0.69	%
Net expenses prior to custodian earnings credits and net of expense waivers		0.69	%		0.67	%		0.65	%		0.66	%		0.68	%		0.69	%

^a Unaudited figures for the six months ended June 30, 2010. Percentage amounts, except total return, have been annualized.

^b Net investment income (loss) was computed using average shares outstanding throughout the period.

^c Total return does not take into account any of the expenses associated with an investment in variable insurance products offered by Security Benefit Life Insurance Company. If total return had taken into account these expenses, performance would have been lower. Shares of a series of SBL Fund are available only through the purchase of such products.

^d Total expense information reflects the expense ratios absent expense reductions by the Investment Manager and custodian earnings credits, as applicable.

^e Net expense information reflects the expense ratios after voluntary expense waivers, reimbursements and custodian earnings credits, as applicable.

The accompanying notes are an integral part of the financial statements

21

	Series D
Performance Summary	(Global Series	)
June 30, 2010	(unaudited	)

PERFORMANCE

$10,000 Over Ten Years

The chart above assumes a hypothetical $10,000 investment in Series D (Global Series) on June 30, 2000 and reflects the fees and expenses of Series D. The MSCI World Index is an unmanaged capitalization-weighted index that is designed to measure global developed market equity performance.

Average Annual Returns

Periods Ended 6-30-101	1 Year		5 Years		10 Years
Series D	6.98	%	(0.27	%)	0.67	%

¹ Performance figures do not reflect fees and expenses associated with an investment in variable insurance products offered by Security Benefit Life Insurance Company. If returns had taken into account these fees and expenses, performance would have been lower. Shares of a Series of SBL Fund are available only through the purchase of such products.

The performance data quoted above represents past performance. Past performance is not predictive of future performance. The investment return and principal value of an investment will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than their original cost.

Portfolio Composition by Sector

Consumer Discretionary	11.50	%
Consumer Staples	9.75
Energy	9.26
Financials	17.78
Health Care	13.01
Industrials	8.47
Information Technology	15.52
Materials	6.72
Utilities	6.06
Short Term Investments	1.92
Cash & Other Assets, Less Liabilities	0.01
Total Net Assets	100.00	%

The accompanying notes are an integral part of the financial statements.

22

Schedule of Investments	Series D
June 30, 2010 (Unaudited)	(Global Series	)

	Shares	Value
COMMON STOCKS - 45.7%
Aerospace & Defense - 0.6%
Alliant Techsystems, Inc.*	22,100	$	1,371,526
Agricultural Products - 0.6%
Archer-Daniels-Midland Co.	55,400		1,430,428
Airlines - 2.5%
Alaska Air Group, Inc.*	30,600		1,375,470
Delta Air Lines, Inc.*	95,200		1,118,600
UAL Corp.*	78,900		1,622,184
US Airways Groups, Inc.*	171,900		1,480,059
			5,596,313
Auto Parts & Equipment - 1.0%
Tenneco, Inc.*	105,765		2,227,411
Biotechnology - 1.4%
Cephalon, Inc.*	30,700		1,742,225
PDL BioPharma, Inc.	275,100		1,546,062
			3,288,287
Computer Hardware - 3.5%
Apple, Inc.*	31,296		7,871,883
Diversified Chemicals - 0.7%
Huntsman Corp.	195,300		1,693,251
Diversified Commercial & Professional Services - 0.6%
Avis Budget Group, Inc.*	144,569		1,419,668
Education Services - 0.8%
Apollo Group, Inc.*	22,400		951,328
Corinthian Colleges, Inc.*	81,800		805,730
			1,757,058
Electric Utilities - 0.7%
NextEra Energy, Inc.	33,900		1,652,964
Gas Utilities - 3.4%
UGI Corp.	311,000		7,911,840
Health Care Equipment - 1.3%
CR Bard, Inc.	23,400		1,814,202
Kinetic Concepts, Inc.*	33,300		1,215,783
			3,029,985
Health Care Services - 4.6%
Express Scripts, Inc.*	128,610		6,047,242
Medco Health Solutions, Inc.*	82,350		4,535,838
			10,583,080
Homebuilding - 0.8%
DR Horton, Inc.	109,800		1,079,334
Pulte Group, Inc.*	86,000		712,080
			1,791,414
Integrated Oil & Gas - 3.6%
Occidental Petroleum Corp.	61,360		4,733,924
Petroleo Brasileiro S.A. ADR	97,100		3,332,472
			8,066,396
Internet Software & Services - 3.0%
Yahoo!, Inc.*	486,900		6,733,827
Office Electronics - 2.0%
Xerox Corp.	572,100		4,599,684
Office Services & Supplies - 0.4%
Pitney Bowes, Inc.	43,900		964,044
Oil & Gas Exploration & Production - 1.5%
Forest Oil Corp.*	124,614		3,409,439
Oil & Gas Refining & Marketing - 1.4%
Sunoco, Inc.	47,400		1,648,098
World Fuel Services Corp.	57,300		1,486,362
			3,134,460
Pharmaceuticals - 0.6%
Endo Pharmaceuticals Holdings, Inc.*	61,570		1,343,457
Property & Casualty Insurance - 2.6%
ACE Ltd.	113,465		5,841,178
Reinsurance - 0.8%
PartnerRe Ltd.	25,000		1,753,500
Semiconductor Equipment - 0.5%
Amkor Technology, Inc.	201,900		1,112,469
Semiconductors - 0.5%
Micron Technology, Inc.*	124,200		1,054,458
Speciality Stores - 1.2%
Jo-Ann Stores, Inc.*	43,300		1,624,183
Tractor Supply Co.	17,300		1,054,781
			2,678,964
Systems Software - 2.5%
Microsoft Corp.	244,800		5,632,848
Tobacco - 2.6%
Altria Group, Inc.	294,642		5,904,626
TOTAL COMMON STOCKS (cost $103,564,492)		$	103,854,458
	Shares	Value
FOREIGN STOCKS - 52.4%
Aerospace & Defense - 2.4%
BAE Systems plc2,3	1,183,549	$	5,509,836
Asset Management & Custody Banks - 2.3%
Julius Baer Group Ltd.2,3	179,655		5,122,666
Automobile Manufacturers - 1.3%
Commonwealth Bank of Australia ADR2,3 *	70,695		2,857,665
Commodity Chemicals - 0.8%
Mitsui Chemicals, Inc.2,3	619,000		1,730,332

The accompanying notes are an integral part of the financial statements

23

Schedule of Investments	Series D
June 30, 2010 (Unaudited)	(Global Series	)

	Shares		Value
FOREIGN STOCKS - 52.4%(continued)
Diversified Banks - 7.7%
Banco Santander S.A.1,2		389,358	$	4,083,439
DBS Group Holdings Ltd.1,2		396,000		3,843,136
Standard Chartered plc1,2		163,059		3,971,463
Toronto-Dominion Bank		85,975		5,571,212
				17,469,250
Diversified Metals & Mining - 1.6%
Exxaro Resources Ltd.1,2		261,407		3,742,581
Electronic Equipment & Instruments - 3.2%
Hitachi Ltd.1,2		2,023,000		7,349,819
Food Retail - 4.0%
Delhaize Group S.A.1,2		23,016		1,670,397
Empire Company Ltd.		29,804		1,474,381
Koninklijke Ahold N.V.		367,353		4,566,921
Metro, Inc.		37,543		1,474,564
				9,186,263
Gold - 1.7%
Osisko Mining Corp.		362,400		3,908,269
Health Care Services - 2.1%
Fresenius Medical Care AG & Company KGaA1,2		90,147		4,864,506
Home Improvement Retail - 2.0%
Kingfisher plc1,2		1,444,326		4,524,101
Homebuilding - 0.6%
Sekisui Chemical Company Ltd.1,2		211,000		1,316,480
Internet Retail - 1.8%
Dena Company Ltd.1,2		158,000		4,172,816
Life & Health Insurance - 3.2%
Sony Financial Holdings, Inc.1,2		2,214		7,387,040
Marine - 1.9%
Neptune Orient Lines Ltd.1,2		3,114,000		4,398,371
Multi-Utilities - 1.9%
Veolia Environment1,2		179,625		4,220,501
Oil & Gas Exploration & Production - 2.1%
CNOOC Ltd.1,2		2,795,322		4,751,087
Oil & Gas Refining & Marketing - 0.7%
Cosmo Oil Company Ltd.1,2		708,000		1,690,942
Packaged Foods & Meals - 2.5%
Marine Harvest ASA2 ,3		6,931,260		4,577,151
Nippon Meat Packers, Inc.1,2		88,000		1,086,495
				5,663,646
Pharmaceuticals - 3.0%
AstraZeneca plc1,2		32,727		1,543,069
Shire plc2 ,3		240,713		4,941,265
				6,484,334
Restaurants - 1.8%
Compass Group plc1,2		550,893		4,194,685
Semiconductors - 0.4%
Siliconware Precision Industries Co.1,2		883,000		947,197
Steel - 1.9%
Voestalpine AG1,2		154,798		4,216,459
Tires & Rubber - 1.5%
Bridgestone Corp.1,2		112,600		1,780,854
Sumitomo Rubber Industries Ltd.2 ,3		194,900		1,719,398
				3,500,252
TOTAL FOREIGN STOCKS (cost $127,776,774)			$	119,209,098
	Principal Amount		Value
SHORT TERM INVESTMENTS - 1.9%
State Street General Account U.S. Government Fund1	$	4,358,407	$	4,358,407
TOTAL SHORT TERM INVESTMENTS (cost $4,358,407)			$	4,358,407
Total Investments - 100.0%3 (cost $235,699,673)			$	227,421,963
Cash & Other Assets, Less Liabilities - 0.0%				16,681
Total Net Assets - 100.0%			$	227,438,644

INVESTMENT CONCENTRATION

At June 30, 2010, the investment diversification of the Series was as follows:

Country	% of Net Assets		Value
United States	43.1	%	$	99,039,215
Japan	12.3			28,234,176
United Kingdom	10.9			24,684,419
Canada	5.5			12,428,426
Switzerland	4.9			10,963,844
Singapore	3.6			8,241,507
Germany	2.1			4,864,506
Hong Kong	2.1			4,751,087
Norway	2.0			4,577,151
Netherlands	2.0			4,566,921
France	1.9			4,220,501
Austria	1.9			4,216,459
Spain	1.8			4,083,439
South Africa	1.6			3,742,581
Brazil	1.5			3,332,472
Australia	1.3			2,857,665
Belgium	0.7			1,670,397
Taiwan, Province of China	0.4			947,197
Total Investments	100.0		$	227,421,963

For federal income tax purposes the identified cost of investments owned at June 30, 2010 was $237,089,321.

ADR American Depositary Receipt

plc Public Limited Company

The accompanying notes are an integral part of the financial statements

24

Schedule of Investments	Series D
June 30, 2010 (Unaudited)	(Global Series	)

* Non-income producing security

¹ Value determined base on Level 2 inputs.

² Security was subject to the fair value trigger at June 30, 2010. The total market value of fair valued securities amounts to $ 102,213,751. (cost $111,116,926) or 44.9% of total net assets.

³ Unless otherwise indicated, the values of the securities of the Portfolio are determined base on Level 1 inputs.

The accompanying notes are an integral part of the financial statements

25

Series D

(Global Series)

Statement of Assets and Liabilities

June 30, 2010 (Unaudited)

Assets:
Investments, at value*	$	227,421,963
Cash		21
Cash denominated in a foreign currency, at value**		177,928
Receivables:
Fund shares sold		86,688
Securities sold		5,351,498
Dividends		391,218
Foreign taxes recoverable		254,050
Prepaid expenses		2,280
Total assets		233,685,646
Liabilities:
Payable for:
Fund shares redeemed		127,300
Securities purchased		5,790,914
Management fees		197,357
Administration fees		29,603
Transfer agent/maintenance fees		2,105
Custodian fees		10,608
Directors’ fees		478
Professional fees		32,065
Other fees		56,572
Total liabilities		6,247,002
Net assets	$	227,438,644
Net assets consist of:
Paid in capital	$	330,765,447
Undistributed net investment income		1,083,862
Accumulated net realized loss on sale of investments and foreign currency transactions		(96,131,260	)
Net unrealized depreciation in value of investments and translation of assets and liabilities in foreign currencies		(8,279,405	)
Net assets	$	227,438,644
Capital shares outstanding		28,005,719
Net asset value per share (net assets divided by shares outstanding)	$	8.12
*       Investments, at cost	$	235,699,673
**     Cash denominated in a foreign currency, at cost		177,078

Statement of Operations

For Six Months Ended June 30, 2010 (Unaudited)

Investment Income:
Dividends (net of foreign withholding tax $274,957)	$	2,690,707
Total investment income		2,690,707
Expenses:
Management fees		1,286,730
Administration fees		193,226
Transfer agent/maintenance fees		12,845
Custodian fees		44,698
Directors’ fees		12,995
Professional fees		37,401
Reports to shareholders		17,361
Other		1,589
Total expenses		1,606,845
Net investment income		1,083,862
Net Realized and Unrealized Gain (Loss):
Net realized gain (loss) during the period on:
Investments		15,724,760
Foreign currency transactions		(493,223	)
Net realized gain		15,231,537
Net change in unrealized appreciation (depreciation) during the period on:
Investments		(37,253,396	)
Translation of assets and liabilities in foreign currencies		10,100
Net change in unrealized appreciation (depreciation)		(37,243,296	)
Net realized and unrealized loss		(22,011,759	)
Net decrease in net assets resulting from operations	$	(20,927,897	)

The accompanying notes are an integral part of the financial statements

26

Statements of Changes in Net Assets	Series D
	(Global Series	)

	Six Months Ended June 30, 2010 (unaudited)			Year Ended December 31, 2009
Increase (decrease) in net assets from operations:
Net investment income	$	1,083,862		$	2,881,655
Net realized gain during the period on investments and foreign currency transactions		15,231,537			63,091
Net change in unrealized appreciation (depreciation) during the period on investments and translation of assets and liabilities in foreign currencies		(37,243,296	)		42,166,178
Net increase (decrease) in net assets resulting from operations		(20,927,897	)		45,110,924
Capital share transactions:
Proceeds from sale of shares		16,447,163			26,124,600
Cost of shares redeemed		(38,162,065	)		(77,119,578	)
Net decrease from capital share transactions		(21,714,902	)		(50,994,978	)
Net decrease in net assets		(42,642,799	)		(5,884,054	)
Net assets:
Beginning of period		270,081,443			275,965,497
End of period	$	227,438,644		$	270,081,443
Undistributed net investment income at end of period	$	1,083,862		$	1,919,749
Capital share activity:
Shares sold		1,854,093			3,505,475
Shares redeemed		(4,322,945	)		(10,300,582	)
Total capital share activity		(2,468,852	)		(6,795,107	)

The accompanying notes are an integral part of the financial statements

27

Financial Highlights	Series D
Selected data for each share of capital stock outstanding throughout each period	(Global Series	)

	Six Months Ended June  30, 2010a			2009			2008b			2007c			2006			Year Ended December 31, 2005
Per Share Data
Net asset value, beginning of period	$	8.86		$	7.40		$	12.01		$	11.03		$	9.40		$	8.28
Income (loss) from investment operations:
Net investment incomed		0.04			0.09			0.11			0.08			0.03			0.03
Net gain (loss) on investments (realized and unrealized)		(0.78	)		1.37			(4.72	)		0.90			1.60			1.09
Total from investment operations		(0.74	)		1.46			(4.61	)		0.98			1.63			1.12
Net asset value, end of period	$	8.12		$	8.86		$	7.40		$	12.01		$	11.03		$	9.40
Total Returne		(8.35	%)		19.73	%		(38.38	%)		8.88	%		17.34	%		13.53	%
Ratios/Supplemental Data
Net assets, end of period (in thousands)	$	227,439		$	270,081		$	275,965		$	550,177		$	571,006		$	516,213
Ratios to average net assets:
Net investment income		0.84	%		1.12	%		1.09	%		0.67	%		0.32	%		0.30	%
Total expensesf		1.25	%		1.27	%		1.26	%		1.26	%		1.24	%		1.24	%
Net expensesg		1.25	%		1.27	%		1.25	%		1.26	%		1.24	%		1.24	%
Net expenses prior to custodian earnings credits and net of expense waivers		1.25	%		1.27	%		1.26	%		1.26	%		1.24	%		1.24	%
Portfolio turnover rate		346	%		317	%		302	%h		115	%		23	%		33	%

^a Unaudited figures for the six months ended June 30, 2010. Percentage amounts, except total return, have been annualized.

^b SGI became the sub-advisor of Series D effective May 1, 2008. Prior to May 1, 2008, Security Investors (SI) paid Oppenheimer Funds for sub-advising 50% of Series D. SGI sub-advised the remaining 50%.

^c Security Global Investors, LLC (SGI) became sub-advisor of 50% of Series D effective August 1, 2007. OppenheimerFunds sub-advises the remaining 50%. Prior to August 1, 2007, OppenheimerFunds sub-advised the entire Series.

^d Net investment income (loss) was computed using average shares outstanding throughout the period.

^e Total return does not take into account any of the expenses associated with an investment in variable insurance products offered by Security Benefit Life Insurance Company. If total return had taken into account these expenses, performance would have been lower. Shares of a series of SBL Fund are available only through the purchase of such products.

^f Total expense information reflects the expense ratios absent expense reductions by the Investment Manager and custodian earnings credits, as applicable.

^g Net expense information reflects the expense ratios after voluntary expense waivers, reimbursements and custodian earnings credits, as applicable.

^h Significant variation in the portfolio turnover rate is due to the re-alignment of the Series portfolio following the appointment of SGI as sub-advisor.

The accompanying notes are an integral part of the financial statements

28

	Series E
Performance Summary	(U.S. Intermediate Bond Series	)
June 30, 2010	(unaudited	)

PERFORMANCE

$10,000 Over 10 Years

The chart above assumes a hypothetical $10,000 investment in Series E (U.S. Intermediate Bond Series) on June 30, 2000 and reflects the fees and expenses of Series E. The Barclays Capital Intermediate U.S. Government/Credit Index is an unmanaged Index that tracks U.S. dollar denominated U.S. treasuries, government-related and investment grade U.S. corporate securities that have a remaining maturing of greater than or equal to 1 year and less than 10 years.

Average Annual Returns

Periods Ended 6-30-101	1 Year		5 Years		10 Years
Series E	8.48	%	1.97	%	4.20	%

¹ Performance figures do not reflect fees and expenses associated with an investment in variable insurance products offered by Security Benefit Life Insurance Company. If returns had taken into account these fees and expenses, performance would have been lower. Shares of a Series of SBL Fund are available only through the purchase of such products.

The performance data quoted above represents past performance. Past performance is not predictive of future performance. The investment return and principal value of an investment will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than their original cost.

Portfolio Composition by Quality Ratings

(Based on Standard and Poor’s Ratings)

AAA	39.97	%
AA	11.55
A	24.74
BBB	19.45
B	0.37
CCC	0.46
Preferred Stock	1.61
Cash & Other Assets, Less Liabilities	1.85
Total Net Assets	100.00	%

The accompanying notes are an integral part of the financial statements

29

Schedule of Investments	Series E
June 30, 2010 (Unaudited)	(U.S. Intermediate Bond Series	)

	Principal Amount		Value
CORPORATE BONDS - 59.4%
Banking - 8.4%
Citigroup, Inc.
6.38%, 20141	$	500,000	$	531,077
6.01%, 20151		2,000,000		2,097,766
4.75%, 20151		500,000		499,735
8.50%, 20191		1,000,000		1,192,124
JPMorgan Chase & Company
4.65%, 20141		2,000,000		2,132,551
6.30%, 20191		1,000,000		1,129,495
Standard Chartered plc
6.41%, 20491,2,3,4		1,750,000		1,528,709
Wells Fargo & Company
4.38%, 20131		2,000,000		2,114,344
				11,225,801
Brokerage - 3.1%
BlackRock, Inc.
6.25%, 20171		1,500,000		1,719,420
Raymond James Financial, Inc.
8.60%, 20191		2,000,000		2,355,541
				4,074,961
Building Materials - 0.5%
CRH America, Inc.
6.95%, 20121		600,000		649,783
Chemicals - 4.2%
Airgas, Inc.
4.50%, 20141		1,000,000		1,039,815
PPG Industries, Inc.
7.40%, 20191		650,000		778,782
Praxair, Inc.
4.38%, 20141		1,000,000		1,082,723
4.63%, 20151		1,500,000		1,644,572
5.20%, 20171		1,000,000		1,112,525
				5,658,417
Consumer Noncyclical - Other - 2.5%
Rensselaer Polytechnic Institute
5.60%, 20201		3,000,000		3,251,160
Diversified Manufacturing - 2.8%
Amphenol Corporation
4.75%, 20141		2,000,000		2,119,252
ITT Corporation
4.90%, 20141		1,500,000		1,634,534
				3,753,786
Electric - 6.0%
American Water Capital Corporation
6.09%, 20171		3,000,000		3,308,022
Arizona Public Service Company
6.38%, 20111		600,000		635,046
Duke Energy Ohio, Inc.
5.70%, 20121		600,000		649,090
East Coast Power LLC
7.07%, 20121		70,307		71,080
Oncor Electric Delivery Company LLC
6.38%, 20151		600,000		679,788
Sherwin-Williams Company
3.13%, 20141		2,500,000		2,587,255
				7,930,281
Entertainment - 0.6%
Walt Disney Company
4.50%, 20131		700,000		770,953
Financial - Other - 0.4%
Ford Motor Credit Company LLC
7.00%, 20151		500,000		494,585
Financial Companies - Noncaptive Consumer - 0.5%
Residential Capital LLC
6.50%, 20121		650,000		611,000
Financial Companies - Noncaptive Diversified - 1.6%
General Electrical Capital Corporation
6.00%, 20121		2,000,000		2,152,246
Food & Beverage - 3.5%
Brown-Forman Corporation
5.00%, 20141		2,000,000		2,199,974
General Mills, Inc.
5.25%, 20131		1,000,000		1,102,994
5.70%, 20171		1,200,000		1,393,708
				4,696,676
Health Care - 0.4%
Medtronic, Inc.
3.00%, 20151		500,000		517,955
Independent Energy - 1.3%
Devon Financing Corporation ULC
6.88%, 20111		1,600,000		1,708,264
Industrial - Other - 1.3%
Johns Hopkins University
5.25%, 20191		1,500,000		1,681,290
Insurance - 0.4%
Hartford Financial Services Group, Inc.
4.00%, 20151		500,000		490,892
Insurance - Life - 1.2%
New York Life Global Funding
3.00%, 20151,3,4		500,000		503,891
RenaissanceRe Holdings, Ltd.
5.88%, 20131		1,000,000		1,074,496
				1,578,387
Insurance - Property & Casualty - 1.4%
Berkshire Hathaway Finance Corporation
4.75%, 20121		1,800,000		1,910,970
Integrated Energy - 2.6%
BP Capital Markets plc
5.25%, 20131		2,000,000		1,838,512
Statoil ASA
2.90%, 20141		1,500,000		1,533,645
				3,372,157

The accompanying notes are an integral part of the financial statements

30

Schedule of Investments	Series E
June 30, 2010 (Unaudited)	(U.S. Intermediate Bond Series	)

	Principal Amount		Value
CORPORATE BONDS - 59.4% (continued)
Media - Cable - 3.9%
Omnicom Group, Inc.
6.25%, 20191	$	4,500,000	$	5,121,715
Media - Non Cable - 3.1%
DIRECTV Holdings LLC
3.55%, 20151		4,000,000		4,026,539
Natural Gas Pipelines - 0.1%
Express Pipeline, LP
6.47%, 20131,3,4		136,000		137,768
Pharmaceuticals - 4.4%
AstraZeneca plc
5.90%, 20171		1,750,000		2,047,262
GlaxoSmithKline Capital, Inc.
4.85%, 20131		500,000		546,650
Novartis Securities Investment, Ltd.
5.13%, 20191		1,000,000		1,119,446
Wyeth
5.25%, 20131		2,000,000		2,212,150
				5,925,508
Restaurants - 1.7%
Starbucks Corporation
6.25%, 20171		2,000,000		2,252,288
Technology - 0.8%
Microsoft Corporation
2.95%, 20141		1,000,000		1,046,369
Telecommunications - Wireless - 1.1%
AT&T, Inc.
4.85%, 20141		1,300,000		1,423,817
U.S. Banking - 1.6%
American Express Bank FSB
3.15%, 20111		2,000,000		2,071,122
TOTAL CORPORATE BONDS (cost $73,558,879)			$	78,534,690
	Shares		Value
PREFERRED STOCKS - 1.6%
Financial Companies - 1.4%
JPMorgan Chase Capital XXIX
6.70%, 20401		80,000	$	1,896,800
Insurance Brokers - 0.2%
Woodbourne Capital Trust I
0.00%, 20492,3,5,6		300,000		51,699
Woodbourne Capital Trust II
0.00%, 20492,3,5,6		300,000		51,699
Woodbourne Capital Trust III
0.00%, 20492,3,5,6		300,000		51,699
Woodbourne Capital Trust IV
0.00%, 20492,3,5,6		300,000		51,699
				206,796
TOTAL PREFERRED STOCKS (cost $3,205,796)			$	2,103,596
	Principal Amount		Value
MORTGAGE BACKED SECURITIES - 1.2%
Federal Home Loan Mortgage Corporation - 0.0%
C.M.O.’s - 0.0%
Federal Home Loan Mortgage Corporation
FHR 188 H, 7.00%, 20211	$	925	$	1,028
Other Non-Agency - 1.2%
C.M.O.’s - 1.2%
Chase Mortgage Finance Corporation
2005-A1 2A2, 5.23%, 20351,2		739,966		684,939
Homebanc Mortgage Trust
2006-1, 2.64%, 20371,2		1,119,185		734,601
JP Morgan Mortgage Trust
2006-A3, 3.50%, 20361,2		207,724		179,395
				1,598,935
U.S. Government Sponsored Agencies - 0.0%
C.M.O.’s - 0.0%
Federal National Mortgage Association
FNR 1990-68 J, 6.95%, 20201		2,250		2,508
FNR 1990-103 K, 7.50%, 20201		767		841
				3,349
U.S. Government Sponsored Securities - 0.0%
Pass Through’s - 0.0%
Government National Mortgage Association
#518436, 7.25%, 20291		18,166		20,588
TOTAL MORTGAGE BACKED SECURITIES (cost $2,087,135)			$	1,623,900
	Principal Amount		Value
ASSET BACKED SECURITIES - 0.2%
Home Equity Loans - 0.2%
Credit-Based Asset Servicing and Securitization LLC
2005-CB5, 0.61%, 20351,2	$	328,807	$	300,854
TOTAL ASSET BACKED SECURITIES (cost $328,807)			$	300,854
	Principal Amount		Value
U.S. GOVERNMENT SPONSORED AGENCY BONDS & NOTES - 5.5%
Federal Home Loan Bank
1.63%, 3/16/20111	$	5,000,000	$	5,045,585
U.S. Treasury Notes
0.88%, 5/31/2011		2,250,000		2,260,724
TOTAL U.S. GOVERNMENT SPONSORED AGENCY BONDS & NOTES (cost $7,253,853)			$	7,306,309

The accompanying notes are an integral part of the financial statements

31

Schedule of Investments	Series E
June 30, 2010 (Unaudited)	(U.S. Intermediate Bond Series	)

	Principal Amount		Value
U.S. GOVERNMENT SECURITIES - 30.3%
U.S. Treasury Notes
0.88%, 1/31/2011	$	3,000,000	$	3,010,782
1.38%, 4/15/2012		4,500,000		4,567,676
1.50%, 7/15/2012		2,000,000		2,036,406
3.63%, 12/31/2012		2,000,000		2,144,844
2.50%, 3/31/2013		7,000,000		7,317,183
2.25%, 5/31/2014		1,750,000		1,805,645
2.13%, 5/31/2015		6,500,000		6,611,735
3.25%, 6/30/2016		2,000,000		2,121,094
2.75%, 5/31/2017		2,000,000		2,042,188
2.75%, 2/15/2019		3,250,000		3,237,813
3.13%, 5/15/2019		3,000,000		3,062,577
3.50%, 5/15/2020		2,000,000		2,093,120
TOTAL U.S. GOVERNMENT SECURITIES (cost $39,184,725)			$	40,051,063
Total Investments - 98.2%7 (cost $125,619,195)			$	129,920,412
Cash & Other Assets, Less Liabilities - 1.8%				2,443,843
Total Net Assets - 100.0%			$	132,364,255

For federal income tax purposes the identified cost of investments owned at June 30, 2010 was $126,854,152.

plc Public Limited Company

¹ Value determined based on Level 2 inputs.

² Variable rate security. Rate indicated is rate effective at June 30, 2010.

³ Security was acquired through a private placement.

⁴ Security is a 144A or Section 4(2) security. The total market value of 144A or Section 4(2) securities is $2,170,368 (cost $2,374,511), or 1.6% of total net assets.

⁵ Value determined based on Level 3 inputs.

⁶ Security was fair valued by the Valuation Committee at June 30, 2010. The total market value of fair valued securities amounts to $206,796, (cost $1,205,796) or 0.2% of total net assets.

⁷ Unless otherwise indicated, the values of the securities of the Portfolio are determined based on Level 1 inputs.

The accompanying notes are an integral part of the financial statements

32

Series E

(U.S. Intermediate Bond Series)

Statement of Assets and Liabilities

June 30, 2010 (Unaudited)

Assets:
Investments, at value*	$	129,920,412
Cash		391,307
Receivables:
Fund shares sold		31,764
Securities sold		1,770,688
Interest		1,210,435
Security Investors		21,488
Prepaid expenses		2,117
Total assets		133,348,211
Liabilities:
Payable for:
Fund shares redeemed		868,739
Management fees		81,510
Administration fees		11,461
Transfer agent/maintenance fees		2,102
Custodian fees		349
Professional fees		9,176
Other fees		10,619
Total liabilities		983,956
Net assets	$	132,364,255
Net assets consist of:
Paid in capital	$	146,430,659
Undistributed net investment income		560,999
Accumulated net realized loss on sale of investments		(18,928,621	)
Net unrealized appreciation in value of investments		4,301,218
Net assets	$	132,364,255
Capital shares outstanding		10,349,290
Net asset value per share (net assets divided by shares outstanding)	$	12.79
*  Investments, at cost	$	125,619,195

Statement of Operations

For Six Months Ended June 30, 2010 (Unaudited)

Investment Income:
Dividends	$	18,008
Interest		2,293,595
Total investment income		2,311,603
Expenses:
Management fees		499,810
Administration fees		65,137
Transfer agent/maintenance fees		12,799
Custodian fees		2,050
Director’s fees		6,273
Professional fees		7,805
Reports to shareholders		7,093
Other		2,633
Total expenses		603,600
Reimbursement of Expenses		(21,487	)
Expenses waived		(66,467	)
Net expenses		515,646
Net investment income		1,795,957
Net Realized and Unrealized Gain (Loss):
Net realized gain (loss) during the period on:
Investments		(988,862	)
Net realized loss		(988,862	)
Net change in unrealized appreciation (depreciation) during the period on: Investments		5,118,078
Net change in unrealized appreciation (depreciation)		5,118,078
Net realized and unrealized gain		4,129,216
Net increase in net assets resulting from operations	$	5,925,173

The accompanying notes are an integral part of the financial statements

33

Statements of Changes in Net Assets	Series E
	(U.S. Intermediate Bond Series	)

	Six Months Ended June 30, 2010 (Unaudited)			Year Ended December 31, 2009
Increase (decrease) in net assets from operations:
Net investment income	$	1,795,957		$	3,491,194
Net realized loss during the period on investments		(988,862	)		(9,761,362	)
Net unrealized appreciation during the period on investments		5,118,078			15,320,180
Net increase in net assets resulting from operations		5,925,173			9,050,012
Capital share transactions:
Proceeds from sale of shares		31,813,396			71,807,375
Cost of shares redeemed		(35,942,949	)		(49,358,471	)
Net increase (decrease) from capital share transactions		(4,129,553	)		22,448,904
Net increase in net assets		1,795,620			31,498,916
Net assets:
Beginning of period		130,568,635			99,069,719
End of period	$	132,364,255		$	130,568,635
Undistributed net investment income at end of period	$	560,999		$	2,568,703
Capital share activity:
Shares sold		2,541,423			6,109,866
Shares redeemed		(2,863,681	)		(4,215,010	)
Total capital share activity		(322,258	)		1,894,856

The accompanying notes are an integral part of the financial statements

34

Financial Highlights	Series E
Selected data for each share of capital stock outstanding throughout each period	(U.S. Intermediate Bond Series	)

	Six Months Ended June  30, 2010a			2009			2008			2007			2006			Year Ended December 31, 2005
Per Share Data
Net asset value, beginning of period	$	12.24		$	11.29		$	12.36		$	12.01		$	11.57		$	11.36
Income (loss) from investment operations:
Net investment incomeb		0.17			0.37			0.58			0.60			0.63			0.49
Net gain (loss) on investments (realized and unrealized)		0.38			0.58			(1.65	)		(0.25	)		(0.19	)		(0.28	)
Total from investment operations		0.55			0.95			(1.07	)		0.35			0.44			0.21
Net asset value, end of period	$	12.79		$	12.24		$	11.29		$	12.36		$	12.01		$	11.57
Total Returnc		4.49	%		8.41	%		(8.66	%)		2.91	%		3.80	%		1.85	%
Ratios/Supplemental Data
Net assets, end of period (in thousands)	$	132,364		$	130,569		$	99,070		$	121,652		$	151,311		$	159,386
Ratios to average net assets:
Net investment income		2.69	%		3.08	%		4.80	%		4.90	%		4.67	%		4.23	%
Total expensesd		0.91	%		0.92	%		0.93	%		0.91	%		0.93	%		0.92	%
Net expensese		0.77	%		0.77	%		0.78	%		0.76	%		0.78	%		0.77	%
Net expense prior to custodian earnings credits and net of expense waivers		0.77	%		0.77	%		0.78	%		0.76	%		0.78	%		0.77	%
Portfolio turnover rate		53	%		76	%f		34	%		31	%		64	%		60	%

^a Unaudited figures for the six months ended June 30, 2010. Percentage amounts, except total return, have been annualized.

^b Net investment income (loss) was computed using average shares outstanding throughout the period.

^c Total return does not take into account any of the expenses associated with an investment in variable insurance products offered by Security Benefit Life Insurance Company. If total return had taken into account these expenses, performance would have been lower. Shares of a series of SBL Fund are available only through the purchase of such products.

^d Total expense information reflects the expense ratios absent expense reduction by the Investment Manager and custodian earnings credits, as applicable.

^e Net expense information reflects the expense ratios voluntary expense waivers, reimbursements and custodian earnings credits, as applicable.

^f Significant variation in the portfolio turnover rate is due to Investment Manager’s appointment of new portfolio manager for the Series.

^g Effective November 24, 2008, the Series’ name became U.S. Intermediate Bond Series. Prior to November 24, 2008, the Series was known as the Diversified Income Series.

The accompanying notes are an integral part of the financial statements

35

Performance Summary	Series J
June 30, 2010	(Mid Cap Growth Series	)
	(unaudited	)

PERFORMANCE

$10,000 Over 10 Years

The chart above assumes a hypothetical $10,000 investment in Series J (Mid Cap Growth Series) on June 30, 2000 and reflects the fees and expenses of Series J. The Russell MidCap Growth Index is an unmanaged capitalization-weighted Index that is designed to measure the performance of the 800 smallest companies in the Russell 1000 Index with higher price-to-book ratios and higher forecasted growth values.

Average Annual Returns

Periods Ended 6-30-101	1 Year		5 Years		10 Years
Series J	14.61	%	(3.03	%)	(1.18	%)

¹ Performance figures do not reflect fees and expenses associated with an investment in variable insurance products offered by Security Benefit Life Insurance Company. If returns had taken into account these fees and expenses, performance would have been lower. Shares of a Series of SBL Fund are available only through the purchase of such products.

The performance data quoted above represents past performance. Past performance is not predictive of future performance. The investment return and principal value of an investment will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than their original cost.

Portfolio Composition by Sector

Consumer Discretionary	19.87	%
Consumer Staples	1.98
Energy	5.50
Financials	7.24
Health Care	12.61
Industrials	17.74
Information Technology	22.73
Materials	7.36
Exchange Traded Funds	1.41
Cash & Other Assets, Less Liabilities	3.56
Total Net Assets	100.00	%

The accompanying notes are an integral part of the financial statements

36

Schedule of Investments	Series J
June 30, 2010 (Unaudited)	(Mid Cap Growth Series)

	Shares	Value
COMMON STOCKS - 96.4%
Aerospace & Defense - 3.2%
Goodrich Corp.	66,680	$	4,417,550
Apparel Retail - 1.0%
The Gap, Inc.	70,280		1,367,649
Apparel, Accessories & Luxury Goods - 1.8%
Phillips-Van Heusen Corp.	54,050		2,500,894
Application Software - 3.7%
Cadence Design Systems, Inc.*	386,520		2,237,951
Nuance Communications, Inc.*	200,070		2,991,046
			5,228,997
Asset Management & Custody Banks - 2.3%
T. Rowe Price Group, Inc.	70,600		3,133,934
Auto Parts & Equipment - 2.6%
Johnson Controls, Inc.	130,700		3,511,909
Casinos & Gaming - 2.8%
Penn National Gaming, Inc.*	97,040		2,241,623
WMS Industries, Inc.*	39,345		1,544,291
			3,785,914
Coal & Consumable Fuels - 2.1%
Peabody Energy Corp.	72,700		2,844,751
Communications Equipment - 1.6%
CommScope, Inc.*	90,250		2,145,243
Computer Storage & Peripherals - 3.2%
NetApp, Inc.*	38,200		1,425,242
QLogic Corp.*	174,620		2,902,184
			4,327,426
Construction & Farm Machinery & Heavy Trucks - 2.5%
Navistar International Corp.*	68,200		3,355,440
Consumer Finance - 1.8%
Discover Financial Services	181,000		2,530,380
Data Processing & Outsourced Services - 1.0%
Alliance Data Systems Corp.*	22,810		1,357,651
Department Stores - 1.6%
Kohl’s Corp.*	44,800		2,128,000
Diversified Banks - 1.5%
Comerica, Inc.	55,500		2,044,065
Diversified Chemicals - 1.1%
Solutia, Inc.*	117,800		1,543,180
Electrical Components & Equipment - 6.0%
Cooper Industries plc	106,000		4,664,001
Roper Industries, Inc.	65,170		3,646,913
			8,310,914
Electronic Equipment & Instruments - 1.8%
Agilent Technologies, Inc.*	84,400		2,399,492
Exchange Traded Funds - 1.4%
iShares Russell Midcap Growth Index Fund	44,315		1,936,566
Health Care Equipment - 5.4%
Hill-Rom Holdings, Inc.	28,600		870,298
Hospira, Inc.*	56,700		3,257,415
Zimmer Holdings, Inc.*	60,950		3,294,347
			7,422,060
Health Care Facilities - 1.0%
Community Health Systems, Inc.*	39,450		1,333,805
Homefurnishing Retail - 1.5%
Bed Bath & Beyond, Inc.*	54,000		2,002,320
Hotels, Resorts & Cruise Lines - 1.6%
Royal Caribbean Cruises Ltd.*	96,750		2,202,998
Household Products - 2.0%
Clorox Co.	43,600		2,710,176
Housewares & Specialties - 4.2%
Fortune Brands, Inc.	58,600		2,295,948
Jarden Corp.	133,325		3,582,442
			5,878,390
Industrial Gases - 1.9%
Praxair, Inc.	33,430		2,540,346
Industrial Machinery - 3.7%
Dover Corp.	120,200		5,023,158
Internet Software & Services - 1.6%
Equinix, Inc.*	26,500		2,152,330
IT Consulting & Other Services - 2.6%
Cognizant Technology Solutions Corp.*	70,800		3,544,248
Leisure Facilities - 1.0%
Life Time Fitness, Inc.*	41,800		1,328,822
Life Sciences Tools & Services - 3.2%
Thermo Fisher Scientific, Inc.*	90,485		4,438,289
Metal & Glass Containers - 2.8%
Ball Corp.	72,226		3,815,699
Multi-Line Insurance - 1.6%
HCC Insurance Holdings, Inc.	88,775		2,198,069

The accompanying notes are an integral part of the financial statements

37

Schedule of Investments	Series J
June 30, 2010 (Unaudited)	(Mid Cap Growth Series)

	Shares	Value
COMMON STOCKS - 96.4% (continued)
Oil & Gas Equipment & Services -1.7%
FMC Technologies, Inc.*	45,300	$	2,385,498
Oil & Gas Exploration & Production - 1.7%
Newfield Exploration Co.*	46,950		2,293,977
Pharmaceuticals - 3.0%
Teva Pharmaceutical Industries Ltd. ADR	78,005		4,055,480
Railroads - 2.3%
Union Pacific Corp.	45,440		3,158,534
Restaurants - 1.8%
Darden Restaurants, Inc.	63,750		2,476,688
Semiconductor Equipment - 4.1%
Lam Research Corp.*	93,675		3,565,271
Veeco Instruments, Inc.*	61,800		2,118,504
			5,683,775
Specialty Chemicals - 1.6%
International Flavors & Fragrances, Inc.	51,050		2,165,541
Systems Software - 3.1%
Check Point Software Technologies Ltd.*	59,765		1,761,872
Rovi Corp.*	65,600		2,486,896
			4,248,768
TOTAL COMMON STOCKS (cost $129,825,919)		$	131,928,926
	Shares	Value
WARRANT - 0.0%
Nova Biosource Fuels, Inc.
$2.40, 7/5/20111	358,100	$	947
TOTAL WARRANT (cost $369,900)		$	947
Total Investments - 96.4%2 (cost $130,195,819)		$	131,929,873
Cash & Other Assets, Less Liabilities - 3.6%			4,866,430
Total Net Assets - 100.0%		$	136,796,303

For federal income tax purposes the identified cost of investments owned at June 30, 2010 was $131,393,474.

ADR American Depositary Receipt

plc Public Limited Company

* Non-income producing security

¹ Value determined based on Level 2 inputs.

² Unless otherwise indicated, the values of the securities of the Portfolio are determined based on Level 1 inputs.

The accompanying notes are an integral part of the financial statements

38

Series J

(Mid Cap Growth Series)

Statement of Assets and Liabilities

June 30, 2010 (Unaudited)

Assets:
Investments, at value*	$	131,929,873
Cash		4,919,567
Receivables:
Fund shares sold		98,107
Securities sold		2,188,196
Dividends		111,349
Prepaid expenses		2,361
Total assets		139,249,453
Liabilities:
Payable for:
Fund shares redeemed		82,567
Securities purchased		2,228,509
Management fees		89,558
Administration fees		11,344
Transfer agent/maintenance fees		2,101
Custodian fees		997
Directors’ fees		148
Professional fees		14,421
Other fees		23,505
Total liabilities		2,453,150
Net assets	$	136,796,303
Net assets consist of:
Paid in capital	$	201,694,901
Accumulated net investment loss		(71,971	)
Accumulated net realized loss on sale of investments		(66,560,681	)
Net unrealized appreciation in value of investments		1,734,054
Net assets	$	136,796,303
Capital shares outstanding		5,950,944
Net asset value per share (net assets divided by shares outstanding)	$	22.99
*  Investments, at cost	$	130,195,819

Statement of Operations

For Six Months Ended June 30, 2010 (Unaudited)

Investment Income:
Dividends	$	624,848
Interest		982
Total investment income		625,830
Expenses:
Management fees		576,183
Administration fees		72,569
Transfer agent/maintenance fees		12,786
Custodian fees		3,358
Directors’ fees		7,549
Professional fees		12,490
Reports to shareholders		9,573
Other		3,293
Total expenses		697,801
Net investment loss		(71,971	)
Net Realized and Unrealized Gain (Loss):
Net realized gain (loss) during the period on:
Investments		14,172,976
Net realized gain		14,172,976
Net change in unrealized appreciation (depreciation) during the period on:
Investments		(20,982,584	)
Net change in unrealized appreciation (depreciation)		(20,982,584	)
Net realized and unrealized loss		(6,809,608	)
Net decrease in net assets resulting from operations	$	(6,881,579	)

The accompanying notes are an integral part of the financial statements

39

Statements of Changes in Net Assets Series J
(Mid Cap Growth Series
) 

	Six Months Ended June  30, 2010 (unaudited)			Year Ended December 31, 2009
Increase (decrease) in net assets from operations:
Net investment loss	$	(71,971	)	$	(184,141	)
Net realized gain (loss) during the period on investments		14,172,976			(10,016,613	)
Net change in unrealized appreciation (depreciation) during the period on investments		(20,982,584	)		59,381,654
Net increase (decrease) in net assets resulting from operations		(6,881,579	)		49,180,900
Capital share transactions:
Proceeds from sale of shares		9,740,143			25,347,942
Cost of shares redeemed		(20,335,530	)		(42,285,359	)
Net decrease from capital share transactions		(10,595,387	)		(16,937,417	)
Net increase (decrease) in net assets		(17,476,966	)		32,243,483
Net assets:
Beginning of period		154,273,269			122,029,786
End of period	$	136,796,303		$	154,273,269
Accumulated net investment loss at end of period	$	(71,971	)	$	—
Capital share activity:
Shares sold		387,892			1,288,966
Shares redeemed		(811,358	)		(2,174,470	)
Total capital share activity		(423,466	)		(885,504	)

The accompanying notes are an integral part of the financial statements

40

Financial Highlights	Series J
Selected data for each share of capital stock outstanding throughout each period	(Mid Cap Growth Series	)

	Six Months Ended June  30, 2010a			2009			2008			2007			2006			Year Ended December 31, 2005
Per Share Data
Net asset value, beginning of period	$	24.20		$	16.81		$	28.00		$	31.26		$	29.79		$	27.63
Income (loss) from investment operations:
Net investment lossb		(0.01	)		(0.03	)		(0.01	)		(0.04	)		(0.16	)		(0.13	)
Net gain (loss) on investments (realized and unrealized)		(1.20	)		7.42			(11.18	)		(3.22	)		1.63			2.29
Total from investment operations		(1.21	)		7.39			(11.19	)		(3.26	)		1.47			2.16
Net asset value, end of period	$	22.99		$	24.20		$	16.81		$	28.00		$	31.26		$	29.79
Total Returnc		(5.00	%)		43.96	%		(39.96	%)		(10.43	%)		4.93	%		7.82	%
Ratios/Supplemental Data
Net assets, end of period (in thousands)	$	136,796		$	154,273		$	122,030		$	252,066		$	380,664		$	420,798
Ratios to average net assets:
Net investment loss		(0.09	%)		(0.13	%)		(0.06	%)		(0.14	%)		(0.48	%)		(0.47	%)
Total expensesd		0.91	%		0.92	%		0.91	%		0.90	%		0.90	%		0.90	%
Net expensese		0.91	%		0.92	%		0.91	%		0.90	%		0.90	%		0.90	%
Net expenses prior to custodian earnings credits and net of expense waivers		0.91	%		0.92	%		0.91	%		0.90	%		0.90	%		0.90	%
Portfolio turnover rate		137	%		136	%		203	%f		34	%		29	%		29	%

^a Unaudited figures for the six months ended June 30, 2010. Percentage amounts, except total return, have been annualized.

^b Net investment income (loss) was computed using average shares outstanding throughout the period.

^c Total return does not take into account any of the expenses associated with an investment in variable insurance products offered by Security Benefit Life Insurance Company. If total return had taken into account these expenses, performance would have been lower. Shares of a series of SBL Fund are available only through the purchase of such products.

^d Total expense information reflects the expense ratios absent expense reductions by the Investment Manager and custodian earnings credits, as applicable.

^e Net expense information reflects the expense ratios after voluntary expense waivers, reimbursements and custodian earnings credits, as applicable.

^f Significant variation in the portfolio turnover rate is due to Investment Manager’s appointment of new portfolio manager for the Series.

The accompanying notes are an integral part of the financial statements

41

	Series N
Performance Summary	(Managed Asset Allocation Series	)
June 30, 2010	(unaudited	)

PERFORMANCE

$10,000 Over 10 Years

The chart above assumes a hypothetical $10,000 investment in Series N (Managed Asset Allocation Series) on June 30, 2000 and reflects the fees and expenses of Series N. The blended index is 60% S&P 500 Index and 40% Barclays Capital U.S. Aggregate Bond Index. The S&P 500 Index is a capitalization-weighted index composed of 500 selected common stocks that represent the broad domestic economy and is a widely recognized unmanaged index of market performance. The Barclays Capital U.S. Aggregate Bond Index is an unmanaged index that tracks investment grade bonds including U.S. Treasury and agency issues, corporate bond issues, asset-backed, commercial mortgage-backed and mortgage-backed securities and Yankee issues.

Average Annual Returns

Periods Ended 6-30-101	1 Year		5 Years		10 Years
Series N	11.71	%	1.68	%	2.28	%

¹ Performance figures do not reflect fees and expenses associated with an investment in variable insurance products offered by Security Benefit Life Insurance Company. If returns had taken into account these fees and expenses, performance would have been lower. Shares of a Series of SBL Fund are available only through the purchase of such products.

The performance data quoted above represents past performance. Past performance is not predictive of future performance. The investment return and principal value of an investment will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than their original cost.

Portfolio Composition by Sector for Equity Holdings & Quality Ratings (Based on Standard and Poor’s Ratings) for Fixed Income Holdings

Consumer Discretionary	7.63	%
Consumer Staples	6.42
Energy	6.14
Financials	10.60
Health Care	7.22
Industrials	6.92
Information Technology	9.92
Materials	2.53
Telecommunication Services	2.14
Utilities	1.89
AAA	20.49
AA	0.65
A	4.55
BBB	5.84
BB	2.27
B	0.65
CCC	0.38
C	0.03
Not Rated	0.32
Short Term Investments	3.26
Cash & Other Assets, Less Liabilities	0.15
Total Net Assets	100.00	%

The accompanying notes are an integral part of the financial statements

42

Schedule of Investments June 30, 2010 (Unaudited) Series N
(Managed Asset Allocation Series
) 

	Shares	Value
COMMON STOCKS - 49.7%
Advertising - 0.1%
Lamar Advertising Co.*	910	$	22,313
Omnicom Group, Inc.	1,600		54,880
			77,193
Aerospace & Defense - 1.4%
American Science & Engineering, Inc.	270		20,577
Boeing Co.	1,790		112,323
General Dynamics Corp.	800		46,848
Goodrich Corp.	300		19,875
Honeywell International, Inc.	3,800		148,314
Lockheed Martin Corp.	1,700		126,650
Northrop Grumman Corp.	900		48,996
Precision Castparts Corp.	1,000		102,920
Raytheon Co.	1,100		53,229
Teledyne Technologies, Inc.*	360		13,889
Triumph Group, Inc.	360		23,987
United Technologies Corp.	3,910		253,797
			971,405
Agricultural Products - 0.1%
Archer-Daniels-Midland Co.	1,400		36,148
Bunge Ltd.	360		17,708
			53,856
Air Freight & Logistics - 0.4%
CH Robinson Worldwide, Inc.	700		38,962
Expeditors International of Washington, Inc.	800		27,608
FedEx Corp.	1,000		70,110
United Parcel Service, Inc.	3,100		176,359
UTI Worldwide, Inc.	1,080		13,370
			326,409
Airlines - 0.1%
AirTran Holdings, Inc.*	1,170		5,675
AMR Corp.*	1,440		9,763
Delta Air Lines, Inc.*	540		6,345
Skywest, Inc.	450		5,499
Southwest Airlines Co.	4,800		53,328
			80,610
Apparel Retail - 0.2%
American Eagle Outfitters, Inc.	810		9,518
Dress Barn, Inc.*	168		4,000
J Crew Group, Inc.*	360		13,252
The Gap, Inc.	4,600		89,515
			116,285
Apparel, Accessories & Luxury Goods - 0.2%
Anvil Holdings, Inc.*4	30		90
Coach, Inc.	2,500		91,375
Fossil, Inc.*	540		18,738
			110,203
Application Software - 0.3%
Autodesk, Inc.*	1,900		46,284
Cadence Design Systems, Inc.*	2,070		11,985
Factset Research Systems, Inc.	290		19,427
Intuit, Inc.*	1,800		62,587
Jack Henry & Associates, Inc.	900		21,492
Salary.com, Inc.*	2,160		5,486
Symyx Technologies, Inc.*	1,440		7,214
Taleo Corp.*	540		13,117
			187,592
Asset Management & Custody
Banks - 0.6%
Bank of New York Mellon Corp.	2,900		71,602
BlackRock, Inc.	40		5,736
Eaton Vance Corp.	540		14,909
Franklin Resources, Inc.	800		68,952
Invesco Ltd.	3,500		58,906
Janus Capital Group, Inc.	1,700		15,096
Legg Mason, Inc.	600		16,818
Northern Trust Corp.	1,300		60,710
State Street Corp.	2,100		71,022
Waddell & Reed Financial, Inc.	540		11,815
			395,566
Auto Parts & Equipment - 0.1%
BorgWarner, Inc.*	180		6,721
Gentex Corp.	1,350		24,273
Johnson Controls, Inc.	2,700		72,549
			103,543
Automobile Manufacturers - 0.1%
Ford Motor Co.*	6,800		68,543
Thor Industries, Inc.	270		6,413
Winnebago Industries, Inc.*	540		5,368
			80,324
Automotive Retail - 0.1%
Advance Auto Parts, Inc.	180		9,032
AutoZone, Inc.*	400		77,288
CarMax, Inc.*	900		17,910
			104,230
Biotechnology - 0.9%
Acorda Therapeutics, Inc.*	100		3,111
Alexion Pharmaceuticals, Inc.*	130		6,655
Alkermes, Inc.*	900		11,205
Amgen, Inc.*	3,710		195,145
Biogen Idec, Inc.*	1,100		52,195
BioMarin Pharmaceutical, Inc.*	540		10,238
Celgene Corp.*	2,300		116,886
Cephalon, Inc.*	400		22,700
Gilead Sciences, Inc.*	3,300		113,124
Human Genome Sciences. Inc.*	1,350		30,591
Incyte Corporation Ltd.*	630		6,974
Martek Biosciences Corp.*	360		8,536
Maxygen, Inc.*	1,350		7,466
Vertex Pharmaceuticals, Inc.*	640		21,056
			605,882
Brewers - 0.0%
Boston Beer Company, Inc.*	450		30,353
Cia Cervecerias Unidas S.A. ADR	700		30,163
			60,516
Broadcasting - 0.1%
Discovery Communications, Inc.*	2,713		83,913
Building Products - 0.1%
AO Smith Corp.	540		26,022
Masco Corp.	2,300		24,748
Universal Forest Products, Inc.	450		13,640
USG Corp.*	450		5,436
			69,846
Cable & Satellite - 0.5%
Cablevision Systems Corp.	3,230		77,552
Comcast Corp.	6,800		118,116
DISH Network Corp.	630		11,435

The accompanying notes are an integral part of the financial statements

43

Schedule of Investments June 30, 2010 (Unaudited) Series N
(Managed Asset Allocation Series
) 

	Shares	Value
COMMON STOCKS - 49.7% (continued)
Cable & Satellite - 0.5% (continued)
Liberty Global, Inc.*	875	$	22,741
Time Warner Cable, Inc.	2,139		111,399
			341,243
Casinos & Gaming - 0.2%
International Game Technology	1,200		18,840
Las Vegas Sands Corp.*	50		1,107
MGM Resorts International*	7,771		74,912
Wynn Resorts Ltd.	300		22,881
			117,740
Catalog Retail - 0.1%
Liberty Media Corp - Interactive*	4,500		47,250
Coal & Consumable Fuels - 0.2%
Alpha Natural Resources, Inc.*	310		10,500
Arch Coal, Inc.	630		12,480
Consol Energy, Inc.	1,000		33,760
Peabody Energy Corp.	1,900		74,347
Westmoreland Coal Company*	810		6,577
			137,664
Commodity Chemicals - 0.0%
Koppers Holdings, Inc.	630		14,162
Communications Equipment - 1.1%
Blue Coat Systems, Inc.*	450		9,194
Cisco Systems, Inc.*	18,100		385,711
F5 Networks, Inc.*	60		4,114
Finisar Corp.*	553		8,232
Ixia*	1,710		14,689
JDS Uniphase Corp.*	3,800		37,392
Juniper Networks, Inc.*	3,000		68,460
Palm, Inc.*	1,530		8,706
QUALCOMM, Inc.	7,100		233,164
Riverbed Technology, Inc.*	220		6,076
			775,738
Computer & Electronics Retail - 0.0%
Rent-A-Center, Inc.*	900		18,234
Computer Hardware - 2.6%
Apple, Inc.*	3,200		804,895
Avid Technology, Inc.*	630		8,020
Dell, Inc.*	5,300		63,918
Hewlett-Packard Co.	8,500		367,880
International Business Machines Corp.	4,520		558,130
			1,802,843
Computer Storage & Peripherals - 0.3%
EMC Corp.*	6,200		113,460
Isilon Systems, Inc.*	1,710		21,956
NetApp, Inc.*	1,200		44,772
			180,188
Construction & Engineering - 0.1%
Fluor Corp.	1,100		46,750
Foster Wheeler AG*	800		16,848
Insituform Technologies, Inc.*	810		16,589
Quanta Services, Inc.*	600		12,390
			92,577
Construction & Farm Machinery & Heavy Trucks - 0.2%
Bucyrus International, Inc.	100		4,745
Greenbrier Companies, Inc.*	700		7,840
Joy Global, Inc.	1,050		52,595
Oshkosh Corp.*	400		12,464
PACCAR, Inc.	2,300		91,701
			169,345
Construction Materials - 0.1%
Martin Marietta Materials, Inc.	120		10,177
Vulcan Materials Co.	1,400		61,362
			71,539
Consumer Electronics - 0.1%
Harman International Industries, Inc.*	1,400		41,846
Consumer Finance - 0.2%
American Express Co.	3,700		146,890
SLM Corp.*	1,500		15,585
			162,475
Data Processing & Outsourced Services - 0.7%
Automatic Data Processing, Inc.	1,800		72,468
Computer Sciences Corp.	800		36,200
Fidelity National Information Services, Inc.	1,000		26,820
Fiserv, Inc.*	800		36,528
Global Payments, Inc.	450		16,443
Heartland Payment Systems, Inc.	900		13,356
Mastercard, Inc.	400		79,812
Paychex, Inc.	900		23,373
Visa, Inc.	2,210		156,358
Western Union Co.	3,000		44,730
			506,088
Department Stores - 0.3%
Kohl’s Corp.*	2,670		126,825
Macy’s, Inc.	3,600		64,440
			191,265
Distributors - 0.0%
Genuine Parts Co.	400		15,780
Diversified Banks - 1.1%
Barclays plc ADR	5,600		88,984
New York Community Bancorp. Inc.	40		611
U.S. Bancorp	8,100		181,035
Wells Fargo & Co.	19,291		493,849
			764,479
Diversified Chemicals - 0.2%
Cabot Corp.	660		15,913
Dow Chemical Co.	2,700		64,044
E. I. du Pont de Nemours & Co.	2,051		70,944
			150,901
Diversified Metals & Mining - 0.2%
Freeport-McMoRan Copper & Gold, Inc.	2,069		122,340
Diversified Real Estate Activities - 0.0%
St. Joe Co.*	540		12,506

The accompanying notes are an integral part of the financial statements

44

Schedule of Investments June 30, 2010 (Unaudited) Series N
(Managed Asset Allocation Series
) 

	Shares	Value
COMMON STOCKS - 49.7% (continued)
Diversified Support Services - 0.0%
Cintas Corp.	1,200	$	28,764
Drug Retail - 0.3%
CVS Caremark Corp.	4,168		122,206
Walgreen Co.	2,900		77,430
			199,636
Education Services - 0.1%
Apollo Group, Inc.*	1,000		42,470
Corinthian Colleges, Inc.*	1,080		10,638
Education Management Corporation*	270		4,118
			57,226
Electric Utilities - 0.7%
Allegheny Energy, Inc.	3,600		74,448
Duke Energy Corp.	600		9,600
Entergy Corp.	1,200		85,944
Exelon Corp.	2,700		102,519
FirstEnergy Corp.	800		28,184
Great Plains Energy, Inc.	1,260		21,445
NextEra Energy, Inc.	700		34,132
Pepco Holdings, Inc.	900		14,112
PPL Corp.	3,000		74,850
Progress Energy, Inc.	400		15,688
			460,922
Electrical Components & Equipment - 0.5%
A123 Systems, Inc.*	200		1,886
Baldor Electric Co.	450		16,236
Belden, Inc.	250		5,500
Cooper Industries plc	1,400		61,600
Emerson Electric Co.	5,000		218,450
First Solar, Inc.*	100		11,383
General Cable Corp.*	360		9,594
Rockwell Automation, Inc.	1,700		83,453
			408,102
Electronic Components - 0.1%
AVX Corporation	1,170		14,999
Corning, Inc.	5,500		88,825
			103,824
Electronic Equipment & Instruments - 0.1%
Agilent Technologies, Inc.*	1,500		42,645
Electronic Manufacturing Services - 0.1%
Plexus Corp.*	450		12,033
Tyco Electronics, Ltd.	2,275		57,740
			69,773
Environmental & Facilities Services - 0.3%
Covanta Holding Corporation*	900		14,931
Republic Services, Inc.	5,100		151,623
Waste Connections, Inc.*	450		15,701
			182,255
Fertilizers & Agricultural Chemicals - 0.2%
American Vanguard Corp.	1,260		9,992
Monsanto Co.	2,600		120,172
Mosaic Co.	400		15,592
Potash Corporation of Saskatchewan, Inc.	200		17,248
			163,004
Food Distributors - 0.1%
Sysco Corp.	2,500		71,425
Food Retail - 0.2%
Casey’s General Stores, Inc.	270		9,423
Kroger Co.	3,700		72,853
Pantry, Inc.*	360		5,080
Whole Foods Market, Inc.*	900		32,418
			119,774
Footwear - 0.1%
NIKE, Inc.	1,080		72,954
Forest Products - 0.1%
Weyerhaeuser Co.	1,400		49,280
Gas Utilities - 0.1%
National Fuel Gas Co.	270		12,388
Southwest Gas Corp.	810		23,895
			36,283
General Merchandise Stores - 0.0%
Dollar Tree, Inc.*	540		22,480
Gold - 0.2%
Agnico-Eagle Mines Ltd.	700		42,546
Allied Nevada Gold Corp.*	1,260		24,797
Barrick Gold Corp.	1,100		49,951
			117,294
Health Care Distributors - 0.2%
Cardinal Health, Inc.	600		20,166
Henry Schein, Inc.*	450		24,705
McKesson Corp.	1,600		107,456
			152,327
Health Care Equipment - 1.1%
Baxter International, Inc.	2,100		85,344
Boston Scientific Corp.*	3,500		20,300
CareFusion Corp.*	1,300		29,510
Covidien plc	1,075		43,194
CR Bard, Inc.	500		38,765
Edwards Lifesciences Corp.*	640		35,853
Gen-Probe, Inc.*	310		14,080
Hologic, Inc.*	838		11,673
Hospira, Inc.*	500		28,725
Intuitive Surgical, Inc.*	100		31,562
Medtronic, Inc.	2,500		90,676
Micrus Endovascular Corp.*	900		18,711
St. Jude Medical, Inc.*	1,900		68,571
STERIS Corp.	450		13,986
Stryker Corp.	1,700		85,102
Thoratec Corp.*	540		23,074
Zimmer Holdings, Inc.*	1,500		81,075
			720,201
Health Care Facilities - 0.1%
Community Health Systems, Inc.*	450		15,215
Health Management Associates, Inc.*	450		3,497

The accompanying notes are an integral part of the financial statements

45

Schedule of Investments June 30, 2010 (Unaudited) Series N
(Managed Asset Allocation Series
) 

	Shares	Value
COMMON STOCKS - 49.7% (continued)
Health Care Facilities - 0.1% (continued)
LifePoint Hospitals, Inc.*	630	$	19,782
Tenet Healthcare Corp.*	7,700		33,417
			71,911
Health Care Services - 0.4%
DaVita, Inc.*	700		43,708
Express Scripts, Inc.*	2,800		131,656
Healthways, Inc.*	270		3,218
Medco Health Solutions, Inc.*	1,400		77,112
Omnicare, Inc.	550		13,035
			268,729
Health Care Supplies - 0.0%
DENTSPLY International, Inc.	1,000		29,910
Health Care Technology - 0.0%
Computer Programs & Systems, Inc.	450		18,414
Home Entertainment Software - 0.1%
Activision Blizzard, Inc.	2,126		22,302
Electronic Arts, Inc.*	1,600		23,040
			45,342
Home Furnishings - 0.0%
Mohawk Industries, Inc.*	230		10,525
Home Improvement Retail - 0.5%
Home Depot, Inc.	5,850		164,210
Lowe’s Companies, Inc.	9,800		200,116
			364,326
Homebuilding - 0.1%
DR Horton, Inc.	2,300		22,609
Lennar Corp.	1,200		16,692
Toll Brothers, Inc.*	900		14,724
			54,025
Homefurnishing Retail - 0.2%
Bed Bath & Beyond, Inc.*	2,900		107,532
Williams-Sonoma, Inc.	630		15,637
			123,169
Hotels, Resorts & Cruise Lines - 0.2%
Carnival Corp.	1,900		57,456
Choice Hotels International, Inc.	450		13,595
Gaylord Entertainment Co.*	360		7,952
Marriott International, Inc.	2,438		72,994
Starwood Hotels & Resorts Worldwide, Inc.	700		29,001
			180,998
Household Appliances - 0.0%
Stanley Black & Decker, Inc.	500		25,260
Household Products - 1.4%
Church & Dwight Company, Inc.	40		2,508
Clorox Co.	1,600		99,456
Colgate-Palmolive Co.	800		63,008
Energizer Holdings, Inc.*	270		13,576
Kimberly-Clark Co.	2,600		157,638
Procter & Gamble Co.	11,273		676,154
			1,012,340
Housewares & Specialties - 0.1%
Fortune Brands, Inc.	1,500		58,770
Human Resources & Employment Services - 0.0%
Manpower, Inc.	450		19,431
Robert Half International, Inc.	500		11,775
			31,206
Hypermarkets & Super Centers - 0.6%
BJ’s Wholesale Club, Inc.*	450		16,655
Wal-Mart Stores, Inc.	8,300		398,981
			415,636
Independent Power Producers & Energy Traders - 0.3%
AES Corp.*	7,300		67,453
Calpine Corp.*	3,300		41,976
Constellation Energy Group, Inc.	2,000		64,500
Mirant Corp.*	920		9,715
RRI Energy, Inc.*	2,070		7,845
			191,489
Industrial Conglomerates - 1.4%
3M Co.	3,200		252,768
General Electric Co.	35,900		517,678
McDermott International, Inc.*	2,110		45,703
Textron, Inc.	2,800		47,516
Tyco International, Ltd.	1,500		52,845
			916,510
Industrial Gases - 0.1%
Praxair, Inc.	1,200		91,188
Industrial Machinery - 0.3%
Actuant Corp.	610		11,486
CLARCOR, Inc.	90		3,197
Danaher Corp.	2,800		103,935
Harsco Corp.	500		11,750
Ingersoll-Rand plc	1,400		48,286
John Bean Technologies Corp.	278		4,240
Nordson Corp.	270		15,142
			198,036
Industrial REIT’s - 0.0%
AMB Property Corp.	630		14,937
EastGroup Properties, Inc.	450		16,011
			30,948
Insurance Brokers - 0.2%
AON Corporation	2,600		96,512
Marsh & McLennan Companies, Inc.	2,000		45,100
			141,612
Integrated Oil & Gas - 3.6%
BP plc ADR	3,900		112,632
Chevron Corp.	7,450		505,557
ConocoPhillips	3,100		152,179
Exxon Mobil Corp.	18,208		1,039,114
Hess Corp.	1,400		70,476
Murphy Oil Corp.	2,200		109,010
Occidental Petroleum Corp.	2,300		177,445
Royal Dutch Shell plc (Cl.B) ADR	4,000		193,120
Suncor Energy, Inc.	2,300		67,712
			2,427,245

The accompanying notes are an integral part of the financial statements

46

Schedule of Investments June 30, 2010 (Unaudited) Series N
(Managed Asset Allocation Series
) 

	Shares	Value
COMMON STOCKS - 49.7% (continued)
Integrated Telecommunication Services - 0.8%
AT&T, Inc.	24,092	$	582,785
Internet Retail - 0.5%
Amazon.com, Inc.*	1,900		207,594
Drugstore.com, Inc.*	4,580		14,106
Expedia, Inc.	5,000		93,900
Priceline.com, Inc.*	200		35,308
			350,908
Internet Software & Services - 0.8%
Akamai Technologies, Inc.*	1,300		52,741
Art Technology Group, Inc.*	2,960		10,123
Digital River, Inc.*	270		6,456
eBay, Inc.*	1,900		37,259
Google, Inc.*	1,000		444,950
VeriSign, Inc.*	1,500		39,825
			591,354
Investment Banking & Brokerage - 0.7%
Charles Schwab Corp.	1,900		26,942
Goldman Sachs Group, Inc.	1,800		236,286
Morgan Stanley	6,800		157,828
Raymond James Financial, Inc.	810		19,999
Stifel Financial Corp.*	395		17,139
TD Ameritrade Holding Corp.*	2,300		35,190
			493,384
IT Consulting & Other Services - 0.1%
Accenture plc	1,300		50,245
RightNow Technologies, Inc.*	450		7,061
			57,306
Leisure Products - 0.1%
Hasbro, Inc.	800		32,880
Mattel, Inc.	1,900		40,204
Pool Corp.	822		18,018
			91,102
Life & Health Insurance - 0.4%
Aflac, Inc.	700		29,869
MetLife, Inc.	3,800		143,488
Prudential Financial, Inc.1	2,200		118,052
StanCorp Financial Group, Inc.	450		18,243
			309,652
Life Sciences Tools & Services - 0.3%
Charles River Laboratories International, Inc.*	140		4,789
Covance, Inc.*	450		23,094
Illumina, Inc.*	700		30,471
Life Technologies Corp.*	1,000		47,250
Techne Corp.	330		18,959
Thermo Fisher Scientific, Inc.*	1,100		53,955
Waters Corp.*	400		25,880
			204,398
Managed Health Care - 0.5%
AMERIGROUP Corp.*	450		14,616
CIGNA Corp.	2,000		62,120
Humana, Inc.*	200		9,134
UnitedHealth Group, Inc.	5,100		144,840
WellPoint, Inc.*	2,200		107,646
			338,356
Metal & Glass Containers - 0.0%
Myers Industries, Inc.	900		7,281
Motorcycle Manufacturers - 0.1%
Harley-Davidson, Inc.	1,900		42,237
Movies & Entertainment - 0.6%
Ascent Media Corp.*	43		1,086
Madison Square Garden, Inc.*	335		6,589
Time Warner, Inc.	5,900		170,569
Walt Disney Co.	6,900		217,351
			395,595
Multi-Line Insurance - 0.1%
Hartford Financial Services Group, Inc.	1,000		22,130
Loews Corp.	1,500		49,965
			72,095
Multi-Utilities - 0.4%
Alliant Energy Corp.	810		25,709
CenterPoint Energy, Inc.	9,300		122,388
NiSource, Inc.	1,200		17,400
OGE Energy Corp.	630		23,033
Public Service Enterprise Group, Inc.	800		25,064
Sempra Energy	1,000		46,790
TECO Energy, Inc.	2,500		37,675
			298,059
Office REIT’s - 0.1%
Boston Properties, Inc.	700		49,937
Duke Realty Corp.	2,070		23,495
SL Green Realty Corp.	491		27,025
			100,457
Office Services & Supplies - 0.0%
American Reprographics Co.*	1,440		12,571
Herman Miller, Inc.	450		8,492
			21,063
Oil & Gas Drilling - 0.0%
Diamond Offshore Drilling, Inc.	300		18,657
Oil & Gas Equipment & Services -0.8%
Baker Hughes, Inc.	2,640		109,745
Complete Production Services, Inc.*	1,170		16,731
FMC Technologies, Inc.*	1,742		91,734
Halliburton Co.	1,400		34,370
Schlumberger Ltd.	5,700		315,438
Smith International, Inc.	1,600		60,240
			628,258
Oil & Gas Exploration & Production - 0.8%
Anadarko Petroleum Corp.	600		21,654
Concho Resources, Inc.*	540		29,878
Devon Energy Corp.	900		54,828
EOG Resources, Inc.	1,400		137,718
Forest Oil Corp.*	360		9,850
GeoMet, Inc.*	3,300		3,762

The accompanying notes are an integral part of the financial statements

47

Schedule of Investments	Series N
June 30, 2010 (Unaudited)	(Managed Asset Allocation Series	)

	Shares	Value
COMMON STOCKS - 49.7% (continued)
Oil & Gas Exploration & Production - 0.8% (continued)
Mariner Energy, Inc.*	450	$	9,666
Newfield Exploration Co.*	2,460		120,196
Petrohawk Energy Corp.*	100		1,697
Range Resources Corp.	1,200		48,180
Southwestern Energy Co.*	2,400		92,736
Ultra Petroleum Corp.*	540		23,895
Whiting Petroleum Corp.*	360		28,231
			582,291
Oil & Gas Refining & Marketing - 0.1%
Holly Corp.	540		14,353
Valero Energy Corp.	2,500		44,950
			59,303
Oil & Gas Storage & Transportation - 0.2%
Spectra Energy Corp.	4,100		82,287
Williams Companies, Inc.	3,700		67,636
			149,923
Other Diversified Financial Services - 1.8%
Bank of America Corp.	35,278		506,945
Citigroup, Inc.*	69,700		262,072
JPMorgan Chase & Co.	14,636		535,823
			1,304,840
Packaged Foods & Meats - 0.4%
Campbell Soup Co.	1,800		64,494
Dean Foods Co.*	1,200		12,084
Kellogg Co.	1,500		75,450
Kraft Foods, Inc.	4,325		121,100
Tootsie Roll Industries, Inc.	659		15,585
			288,713
Paper Products - 0.1%
Clearwater Paper Corp.*	480		26,285
Domtar Corp.	213		10,469
International Paper Co.	2,800		63,364
			100,118
Personal Products - 0.2%
Avon Products, Inc.	4,500		119,250
Pharmaceuticals - 3.1%
Abbott Laboratories	4,100		191,798
Allergan, Inc.	1,200		69,912
Bristol-Myers Squibb Co.	4,900		122,206
Eli Lilly & Co.	2,840		95,140
Forest Laboratories, Inc.*	400		10,972
GlaxoSmithKline plc ADR	5,500		187,055
Johnson & Johnson	9,358		552,682
Medicines Co.*	540		4,109
Medicis Pharmaceutical Corp.	450		9,846
Merck & Company, Inc.	11,136		389,426
Pfizer, Inc.	27,472		391,751
Valeant Pharmaceuticals International*	540		28,237
			2,053,134
Property & Casualty Insurance - 0.9%
Allstate Corp.	1,600		45,968
Berkshire Hathaway, Inc.*	4,400		350,636
Chubb Corp.	1,900		95,019
Employers Holdings, Inc.	540		7,954
Infinity Property & Casualty Corp.	370		17,087
Markel Corp.*	50		17,000
ProAssurance Corp.*	360		20,434
SeaBright Holdings, Inc.	900		8,532
Selective Insurance Group, Inc.	540		8,024
Travelers Companies, Inc.	1,514		74,565
W.R. Berkley Corp.	270		7,144
White Mountains Insurance Group Ltd.	10		3,242
			655,605
Publishing - 0.1%
McGraw-Hill Companies, Inc.	1,400		39,396
Scholastic Corp.	450		10,854
			50,250
Railroads - 0.3%
CSX Corp.	1,600		79,408
Union Pacific Corp.	2,100		145,971
			225,379
Regional Banks - 0.7%
BB&T Corp	1,000		26,310
CIT Group, Inc.*	600		20,316
Citizens Republic Bancorp, Inc.*	1,200		1,020
City National Corp.	360		18,443
Commerce Bancshares, Inc.	554		19,938
East West Bancorp, Inc.	540		8,235
Fifth Third Bancorp	5,100		62,679
Glacier Bancorp, Inc.	900		13,203
Home Bancshares, Inc.	644		14,690
KeyCorp	1,800		13,842
Marshall & llsley Corp.	5,399		38,765
Pinnacle Financial Partners, Inc.*	450		5,783
PNC Financial Services Group, Inc.	2,000		113,000
Popular, Inc.*	1,890		5,065
Regions Financial Corp.	6,500		42,770
Sandy Spring Bancorp, Inc.	630		8,826
Signature Bank *	540		20,525
SunTrust Banks, Inc.	500		11,650
Synovus Financial Corp.	500		1,270
TCF Financial Corp.	360		5,980
Texas Capital Bancshares, Inc.*	90		1,476
Westamerica Bancorp	360		18,907
Western Alliance Bancorp*	700		5,019
Wilmington Trust Corp.	720		7,985
Zions Bancorp	1,100		23,727
			509,424
Reinsurance - 0.0%
Everest Re Group Ltd.	270		19,094
Research & Consulting Services - 0.1%
Advisory Board Co.*	540		23,198
Corporate Executive Board Co.	330		8,669
FTI Consulting, Inc.*	360		15,692
Huron Consulting Group, Inc.*	270		5,241
Navigant Consulting, Inc.*	810		8,408
Verisk Analytics, Inc.*	180		5,382
			66,590

The accompanying notes are an integral part of the financial statements

48

Schedule of Investments	Series N
June 30, 2010 (Unaudited)	(Managed Asset Allocation Series	)

	Shares	Value
COMMON STOCKS - 49.7% (continued)
Residential REIT’s - 0.1%
AvalonBay Communities, Inc.	700	$	65,359
Camden Property Trust	540		22,059
			87,418
Restaurants - 0.6%
McDonald’s Corp.	3,900		256,893
Sonic Corp.*	630		4,883
Starbucks Corp.	4,300		104,490
Yum! Brands, Inc.	800		31,232
			397,498
Retail REIT’s - 0.2%
Kimco Realty Corp.	1,300		17,472
Regency Centers Corp.	450		15,480
Simon Property Group, Inc.	1,498		120,964
Weingarten Realty Investors	1,080		20,574
			174,490
Semiconductor Equipment - 0.3%
Advanced Energy Industries, Inc.*	1,170		14,379
Applied Materials, Inc.	10,100		121,401
BTU International, Inc.*	1,080		6,275
Cyberoptics Corporation*	1,170		11,314
Cymer, Inc.*	540		16,222
KLA-Tencor Corp.	600		16,728
Lam Research Corp.*	180		6,851
MEMC Electronic Materials, Inc.*	1,100		10,868
Varian Semiconductor Equipment Associates, Inc.*	760		21,782
			225,820
Semiconductors - 1.0%
Advanced Micro Devices, Inc.*	8,100		59,292
Analog Devices, Inc.	1,400		39,004
Cree, Inc.*	90		5,403
Intel Corp.	7,900		153,654
Intersil Corp.	810		9,809
Maxim Integrated Products, Inc.	1,350		22,586
Micron Technology, Inc.*	17,400		147,726
National Semiconductor Corp.	7,800		104,988
NVIDIA Corp.*	12,200		124,562
Semtech Corp.*	1,170		19,153
Texas Instruments, Inc.	700		16,296
Zoran Corp.*	1,069		10,198
			712,671
Soft Drinks - 1.2%
Coca-Cola Co.	7,700		385,924
PepsiCo, Inc.	7,197		438,657
Reed’s, Inc.*	1,800		3,798
			823,379
Specialized Consumer Services - 0.1%
H&R Block, Inc.	2,500		39,225
Jackson Hewitt Tax Service, Inc.*	600		678
			39,903
Specialized Finance - 0.2%
CME Group, Inc.	100		28,155
Interactive Brokers Group, Inc.*	360		5,976
IntercontinentalExchange, Inc.*	300		33,909
Moody’s Corp.	2,600		51,792
NYSE Euronext	1,500		41,445
			161,277
Specialized REIT’s - 0.1%
LaSalle Hotel Properties	990		20,364
Potlatch Corp.	585		20,902
			41,266
Specialty Chemicals - 0.2%
Albemarle Corp.	540		21,443
Arch Chemicals, Inc.	630		19,366
Senomyx, Inc.*	2,250		8,528
Sherwin-Williams Co.	900		62,271
Sigma-Aldrich Corp.	300		14,949
			126,557
Specialty Stores - 0.0%
AC Moore Arts & Crafts, Inc.*	1,620		3,677
Dick’s Sporting Goods, Inc.*	590		14,685
Hibbett Sports, Inc.*	360		8,626
			26,988
Steel - 0.2%
Carpenter Technology Corp.	360		11,819
Cliffs Natural Resources, Inc.	600		28,296
Haynes International, Inc.	270		8,324
Nucor Corp.	1,400		53,592
Steel Dynamics, Inc.	1,170		15,432
United States Steel Co.	1,100		42,405
			159,868
Systems Software - 1.6%
Ariba, Inc.*	900		14,337
CA, Inc.	6,700		123,280
CommVault Systems, Inc.*	180		4,050
McAfee, Inc.*	3,800		116,736
Microsoft Corp.	32,400		745,523
Red Hat, Inc.*	3,820		110,551
Websense, Inc.*	810		15,309
			1,129,786
Technology Distributors - 0.0%
SYNNEX Corp.*	630		16,141
Tech Data Corp.*	270		9,617
			25,758
Textiles - 0.0%
Culp, Inc.*	720		7,891
Thrifts & Mortgage Finance - 0.0%
BankAtlantic Bancorp, Inc.*	1,976		2,766
Brooklyn Federal Bancorp, Inc.	100		441
ESSA Bancorp, Inc.	270		3,324
First Defiance Financial Corporation	300		2,682
Kentucky First Federal Bancorp	270		2,427
Louisiana Bancorp, Inc.*	200		2,802
MutualFirst Financial, Inc.	100		670
			15,112
Tires & Rubber - 0.0%
Goodyear Tire & Rubber Co.*	1,200		11,928
Tobacco - 0.7%
Alliance One International, Inc.*	2,160		7,690
Altria Group, Inc.	5,000		100,200
Philip Morris International, Inc.	8,430		386,431
			494,321

The accompanying notes are an integral part of the financial statements

49

Schedule of Investments	Series N
June 30, 2010 (Unaudited)	(Managed Asset Allocation Series	)

	Shares	Value
COMMON STOCKS - 49.7%(continued)
Trading Companies & Distributors - 0.1%
Applied Industrial Technologies, Inc.	810	$	20,509
Fastenal Co.	1,000		50,191
H&E Equipment Services, Inc.*	360		2,696
			73,396
Trucking - 0.1%
Knight Transportation, Inc.	1,170		23,.681
Ryder System, Inc.	600		24,138
			47,819
Wireless Telecommunication Services - 0.8%
America Movil SAB de CV ADR	1,700		80,750
American Tower Corp.*	2,130		94,785
Crown Castle International Corp.*	2,440		90,914
Leap Wireless International, Inc.*	270		3,505
NII Holdings, Inc.*	1,140		37,073
NTELOS Holdings Corp.	810		13,932
SBA Communications Corp.*	270		9,183
Sprint Nextel Corp.*	24,100		102,184
Vodafone Group plc - SP ADR	8,100		167,427
			599,753
TOTAL COMMON STOCKS (cost $35,862,773)		$	35,124,094
	Shares	Value
FOREIGN STOCKS - 11.7%
Advertising - 0.1%
Aegis Group plc1,2	12,112	$	19,215
WPP plc 1,2	4,086		38,489
			57,704
Aerospace & Defense - 0.2%
Finmeccanica SpA1,2	4,026		41,741
QinetiQ Group plc1,2	15,866		27,671
Rolls-Royce Group plc1,2	5,654		47,231
			116,643
Apparel Retail - 0.2%
Esprit Holdings, Ltd.1,2	7,355		39,506
Inditex S.A. 1,2	734		41,859
			81,365
Apparel, Accessories & Luxury Goods - 0.1%
Cie Financiere Richemont S.A.1,2	2,733		95,420
Application Software - 0.1%
Autonomy Corporation plc1,2*	1,351		36,823
Auto Parts & Equipment - 0.3%
Aisin Seiki Company, Ltd.1,2	1,400		37,700
Autoliv, Inc.1,2*	751		36,122
GKN plc1,2	27,857		47,885
Koito Manufacturing Company, Ltd.1,2	1,000		14,729
			136,436
Automobile Manufacturers - 0.6%
Bayerische Motoren Werke AG1,2	1,083		52,616
Honda Motor Company, Ltd.	2,100		61,697
Toyota Motor Corporation1,2	4,200		144,338
Volkswagen AG1,2	652		57,220
			315,871
Biotechnology - 0.1%
CSL, Ltd.1,2	2,112		57,658
Brewers - 0.1%
Kirin Holdings Company, Ltd.1,2	3,000		37,777
Broadcasting - 0.0%
Television Broadcasts, Ltd.1,2	4,000		18,548
Cable & Satellite - 0.2%
British Sky Broadcasting Group plc ADR1,2	5,441		56,850
Jupiter Telecommunications Company, Ltd.1,2	59		56,500
			113,350
Catalog Retail - 0.0%
N Brown Group plc1,2	6,873		25,515
Commodity Chemicals - 0.1%
Asahi Kasei Corporation1,2	8,000		41,804
Tosoh Corporation1,2	6,000		15,536
			57,340
Communications Equipment - 0.0%
Alcatel-Lucent1,2	11,218		28,572
Construction & Engineering - 0.3%
Bouygues S.A.1,2	1,817		70,149
Carillion plc1,2	8,199		37,650
China Railway Construction Corporation, Ltd.1,2	42,500		53,392
			161,191
Construction Materials - 0.0%
Cemex S.A. de CV *	36,445		35,336
Data Processing & Outsourced Services - 0.0%
Cielo S.A.	4,600		39,115
Department Stores - 0.2%
Parkson Retail Group, Ltd.1,2	27,500		46,353
PPR 1,2	629		78,147
			124,500
Distillers & Vintners - 0.1%
Pernod-Ricard S.A.1,2	1,160		89,988
Distributors - 0.1%
Jardine Cycle & Carriage, Ltd1,2	2,000		42,561
Diversified Banks - 1.3%
Allied Irish Banks plc1,2	6,868		7,248
Australia & New Zealand Banking Group, Ltd.1,2	5,393		96,854
Banco Santander S.A.1,2	5,415		56,790
Banka Intesa Sanpaolo SpA1,2	20,644		54,377
BNP Paribas1,2	2,021		108,745
China Citic Bank Corporation, Ltd.1,2	98,000		61,975
DBS Group Holdings Ltd.1,2	5,000		48,524
DnB NOR ASA1,2,*	10,395		99,984
Erste Group Bank AG1,2	919		29,162

The accompanying notes are an integral part of the financial statements

50

Schedule of Investments	Series N
June 30, 2010 (Unaudited)	(Managed Asset Allocation Series	)

	Shares	Value
FOREIGN STOCKS - 11.7% (continued)
Diversified Banks - 1.3% (continued)
Mitsubishi UFJ Financial Group, Inc.1,2	8,400	$	38,151
Nordea Bank AB1,2	7,707		63,555
Societe Generale1,2	1,013		41,690
Standard Chartered plc1,2	4,982		121,342
Sumitomo Trust & Banking Company, Ltd.1,2	8,000		40,738
Swedbank AB1,2	6,560		60,202
			929,337
Diversified Capital Markets - 0.2%
Close Brothers Group plc1,2	3,173		32,614
Credit Suisse Group AG1,2	1,679		63,129
Deutsche Bank AG1,2	1,040		58,424
			154,167
Diversified Chemicals - 0.1%
BASF SE1,2	1,489		81,371
Diversified Metals & Mining - 0.3%
BHP Billiton plc1,2	2,314		59,977
BHP Billiton Ltd. 1,2	2,425		75,431
Rio Tinto, Ltd.1,2	1,934		106,346
			241,754
Diversified Real Estate Activities - 0.1%
Hang Lung Properties, Ltd.1,2	11,000		42,074
Mitsui Fudosan Company, Ltd.1,2	2,000		27,843
			69,917
Diversified REIT’s - 0.1%
Mirvac Group1,2	49,157		53,678
Education Services - 0.1%
Benesse Holdings, Inc.1,2	1,200		54,640
Electric Utilities - 0.2%
E.ON AG1,2	3,776		101,544
EDP - Energias do Brasil S.A.	1,100		21,616
Scottish & Southern Energy plc1,2	5,438		90,558
			213,718
Electrical Components & Equipment - 0.0%
Legrand S.A.1,2	550		16,305
Prysmian SpA1,2	2,462		35,340
			51,645
Electronic Components - 0.2%
Hamamatsu Photonics KK1,2	1,800		50,015
Hosiden Corporation1,2	2,100		22,212
LG Display Company, Ltd.1,2	1,310		43,037
Nippon Electric Glass Company, Ltd.1,2	6,000		68,743
			184,007
Electronic Manufacturing Services - 0.0%
Venture Corporation, Ltd.1,2	4,000		25,385
Fertilizers & Agricultural Chemicals - 0.0%
Syngenta AG1,2	145		33,499
Food Retail - 0.2%
FamilyMart Company, Ltd.1,2	1,400		46,243
Tesco plc1,2	27,234		153,688
			199,931
Gas Utilities - 0.1%
Hong Kong & China Gas Company, Ltd.1,2	14,500		35,854
Health Care Equipment - 0.2%
Elekta AB1,2	2,813		71,188
Fresenius SE1,2	1,078		71,214
Terumo Corporation1,2	700		33,530
			175,932
Heavy Electrical Equipment - 0.1%
ABB, Ltd.1,2	1,792		31,201
Mitsubishi Electric Corporation1,2	11,000		85,874
			117,075
Home Entertainment Software - 0.0%
Nintendo Company, Ltd.1,2	100		29,368
Home Improvement Retail - 0.1%
Kingfisher plc1,2	18,246		57,152
Homebuilding - 0.1%
Persimmon plc1,2	7,868		40,846
Independent Power Producers & Energy Traders - 0.1%
EDF Energies Nouvelles S.A.1,2	421		14,244
Iberdrola Renovables S.A.1,2	13,961		43,820
			58,064
Industrial Conglomerates - 0.2%
DCC plc1,2	2,812		63,662
Hutchison Whampoa, Ltd.1,2	5,700		35,078
Koninklijke Philips Electronics N.V.1,2	2,921		87,239
SembCorp Industries, Ltd.1,2	26,900		77,792
			263,771
Industrial Gases - 0.0%
Air Water, Inc.1,2	2000		21,841
Industrial Machinery - 0.2%
Cargotec Oyj1,2	871		22,728
Charter International plc1,2	3,968		37,147
Fanuc, Ltd.1,2	300		33,884
Makita Corporation1,2	700		18,736
Toshiba Machine Company, Ltd.1,2	3000		12,105
			124,600
Integrated Oil & Gas - 0.3%
BG Group plc1,2	2,429		36,159
Statoil ASA1,2	5,362		103,300
			139,459
Integrated Telecommunication Services - 0.3%
France Telecom S.A.1,2	3,028		52,528
Hutchison Telecommunications Hong Kong Holdings, Ltd.1,2	88,000		18,575
Singapore Telecommunications, Ltd.1,2	21,000		45,400

The accompanying notes are an integral part of the financial statements

51

Schedule of Investments	Series N
June 30, 2010 (Unaudited)	(Managed Asset Allocation Series	)

	Shares	Value
FOREIGN STOCKS - 11.7% (continued)
Integrated Telecommunication Services - 0.3% (continued)
Telefonica S.A.1,2	6,727	$	124,634
Telstra Corporation, Ltd.1,2	12,768		34,798
			275,935
Internet Software & Services - 0.1%
Kakaku.com, Inc.1,2	9		37,189
Investment Banking & Brokerage - 0.1%
Macquaire Group, Ltd.1,2	1,244		38,231
IT Consulting & Other Services - 0.0%
Logica plc1,2	13,045		21,195
NS Solutions Corporation1,2	900		17,618
			38,813
Life & Health Insurance - 0.4%
Prudential plc1,2	4,949		37,362
Sony Financial Holdings, Inc.1,2	25		83,413
Sun Life Financial, Inc.	3,400		89,304
Swiss Life Holding AG1,2	757		72,352
			282,431
Marine - 0.0%
Nippon Yusen KK1,2	5,000		18,225
Multi-Line Insurance - 0.1%
AXA S.A.1,2	5,946		90,850
Multi-Utilities - 0.1%
GDF Suez1,2	1,519		43,222
Office Electronics - 0.2%
Canon, Inc.1,2	1,700		63,373
Konica Minolta Holdings, Inc.1,2	5,000		48,112
			111,485
Oil & Gas Drilling - 0.0%
China Oilfield Services, Ltd.1,2	30,000		34,911
Oil & Gas Equipment & Services - 0.2%
Fugro N.V.1,2	427		19,729
Modec, Inc.1,2	1,000		13,755
Saipem SpA1,2	1,595		48,588
Subsea 7, Inc.1,2 ,*	3,234		48,487
			130,559
Oil & Gas Exploration & Production - 0.1%
Beach Energy, Ltd.1,2	64,200		36,817
Other Diversified Financial Services - 0.0%
ING Groep N.V.1,2	2,521		18,659
Packaged Foods & Meats - 0.5%
Dairy Crest Group plc1,2	5,274		29,050
House Foods Corporation1,2	1,500		22,013
Nestle S.A.1,2	5,235		252,437
Unilever plc1,2	2,613		69,884
			373,384
Personal Products - 0.1%
Kobayashi Pharmaceutical Company, Ltd.1,2	700		29,761
L’Oreal S.A.1,2	657		64,336
			94,097
Pharmaceuticals - 0.6%
Astellas Pharma, Inc.1,2	800		26,811
Chugai Pharmaceutical Company, Ltd.1,2	1,200		21,364
Roche Holding AG1,2	1,306		179,768
Rohto Pharmaceutical Company, Ltd.1,2	2,000		24,471
Sanofi-Aventis S.A.1,2	2,098		126,374
			378,788
Photographic Products - 0.1%
Nikon Corporation1,2	2,400		41,371
Property & Casualty Insurance - 0.1%
QBE Insurance Group, Ltd.1,2	3,438		52,162
Suncorp-Metway, Ltd.1,2	3,724		24,911
			77,073
Publishing - 0.1%
Informa plc1,2	3,427		18,084
Sanoma Oyj1,2	1,501		25,919
			44,003
Railroads - 0.1%
Central Japan Railway Company1,2	8		66,070
Real Estate Development - 0.0%
Goldcrest Co., Ltd.1,2	820		14,175
Soho China, Ltd.1,2	57,000		32,984
			47,159
Regional Banks - 0.0%
Bank of Yokohama, Ltd.1,2	7,000		32,029
Reinsurance - 0.1%
Muenchener Rueckversicherungs AG1,2	581		72,962
Restaurants - 0.1%
Compass Group plc1,2	6,000		45,686
Mitchells & Butlers plc 1,2	10,376		42,173
			87,859
Retail REIT’s - 0.1%
Unibail-Rodamco SE1,2	493		80,361
Semiconductor Equipment - 0.2%
ASML Holding N.V.1,2	1,705		46,928
Sumco Corporation1,2	3,200		53,049
			99,977
Semiconductors - 0.2%
Samsung Electronics Company, Ltd.1,2	63		39,470
Taiwan Semiconductor Manufacturing Company, Ltd.1,2	33,129		61,640
			101,110
Specialized Finance - 0.1%
BM&FBovespa S.A.	5,700		36,968

The accompanying notes are an integral part of the financial statements

52

Schedule of Investments	Series N
June 30, 2010 (Unaudited)	(Managed Asset Allocation Series	)

	Shares		Value
FOREIGN STOCKS - 11.7% (Continued)
Specialized Finance - 01% (continued)
Deutsche Boerse AG1,2		441	$	26,796
				63,764
Specialty Chemicals - 0.2%
Hitachi Chemical Company, Ltd.1,2		1,500		27,874
Umicore1,2		2,461		71,013
Wacker Chemie AG1,2		466		67,511
				166,398
Steel - 0.1%
Kobe Steel, Ltd.1,2		19,000		36,200
SSABAB1,2		2,536		34,050
				70,250
Trading Companies & Distributors - 0.3%
Mitsubishi Corporation1,2		3,800		78,634
Mitsui & Company, Ltd.1,2		7,600		88,680
				167,314
Wireless Telecommunication Services - 0.1%
KDDI Corporation1,2		11		52,445
TOTAL FOREIGN STOCKS (cost $8,935,893)			$	8,302,465
		Shares		Value
PREFERRED STOCKS - 0.0%
Auto Parts & Equipment - 0.0%
Dana Holding Corporation
4.00%,1,3,4,5		50	$	4,500
Thrifts & Mortgage Finance - 0.0%
Federal National Mortgage Association
8.25%, 12/31/2010*		1,050		357
TOTAL PREFERRED STOCKS (cost $31,915)			$	4,857
		Shares		Value
RIGHTS - 0.0%
BankAtlantic Bancorp., Inc.
7/20/20101		646	$	—
TOTAL RIGHTS (cost $0)			$	—
		Shares		Value
WARRANTS - 0.0%
Anvil (Cl. A)
$1.00, 2/28/20124		333	$	6
Anvil (Cl. B)
$1.00, 2/28/20124		370		4
TOTAL WARRANTS (cost $3,850)			$	10
	Principal Amount		Value
CORPORATE BONDS - 13.6%
Aerospace & Defense - 0.1%
Delta Air Lines, Inc.
12.25%, 20151,3,4	$	25,000	$	26,688
Spirit Aerosystems, Inc.
7.50%, 20171		25,000		24,500
United Technologies Corporation
5.70%, 20401		30,000		33,490
				84,678
Airlines - 0.0%
Continental Airlines, Inc.
7.25%, 20191		10,000		10,650
Delta Air Lines, Inc.
7.75%, 20191		9,836		10,623
				21,273
Automotive - 0.2%
American Axle & Manufacturing, Inc.
7.88%, 20171		25,000		21,688
Daimler Finance North America LLC
6.50%, 20131		30,000		33,576
Ford Motor Credit Company LLC
12.00%, 20151		25,000		28,939
Hertz Corporation
10.50%, 20161		25,000		25,938
Johnson Controls, Inc.
5.00%, 20201		15,000		15,766
Motors Liquidation Company
8.25%, 20231,5		25,000		7,563
				133,470
Banking- 1.7%
Bank of America Corp.		155,000		158,846
5.65%, 20181
5.63%, 20201		55,000		55,437
BB&T Capital Trust II
6.75%, 20361		20,000		19,974
Citigroup, Inc.
6.50%, 20131		120,000		127,821
Discover Financial Services
10.25%, 20191		25,000		29,754
E*Trade Financial Corporation		32,000		34,000
12.50%, 20171
Fifth Third Bancorp
6.25%, 20131		20,000		21,759
Goldman Sachs Group, Inc.		40,000		44,711
7.50%, 20191
6.00%, 20201		15,000		15,467
JP Morgan Chase Capital XXII		35,000		33,037
6.45%, 20371
JPMorgan Chase & Company		55,000		58,674
4.75%, 20131
3.70%, 20151		5,000		5,114
6.00%, 20181		205,000		226,367
Morgan Stanley
4.20%, 20141		10,000		9,874
4.10%, 20151		110,000		107,204
7.30%, 20191		100,000		107,542
Northern Trust Company
4.60%, 20131		25,000		26,676
Northern Trust Corporation
5.50%, 20131		10,000		11,127
PNC Funding Corporation
5.63%, 20171		35,000		37,236

The accompanying notes are an integral part of the financial statements

53

Schedule of Investments	Series N
June 30, 2010 (Unaudited)	(Managed Asset Allocation Series	)

	Principal Amount		Value
CORPORATE BONDS - 13.6% (continued)
Banking - 1.7% (continued)
Regions Financial Corporation
5.75%, 20151	$	10,000	$	9,937
Svensk Exportkredit AB
5.13%, 20171		70,000		78,094
Westpac Banking Corporation
4.88%, 20191		25,000		25,819
				1,244,470
Basic Industry - 0.0%
Potash Corporation of Saskatchewan, Inc.
4.88%, 20201		20,000		21,277
Rio Tinto Finance USA, Ltd.
8.95%, 20141		15,000		18,194
				39,471
Brokerage - 1.0%
Citigroup, Inc.
5.50%, 20121		37,000		38,568
5.50%, 20131		45,000		46,778
Goldman Sachs Capital I
6.35%, 20341		30,000		26,918
Goldman Sachs Group, Inc.
6.15%, 20181		250,000		261,879
Jefferies Group, Inc.
6.25%, 20361		35,000		31,327
Merrill Lynch & Company, Inc.
5.45%, 20131		35,000		36,716
6.88%, 20181		85,000		90,676
7.75%, 20381		35,000		37,434
Morgan Stanley
6.00%, 20151		100,000		104,508
Nuveen Investments, Inc.
10.50%, 20151		25,000		21,750
				696,554
Building Materials - 0.1%
CRH America, Inc.
6.00%, 20161		25,000		27,870
Freeport-McMoRan Copper & Gold, Inc.
8.38%, 20171		70,000		77,000
Holcim US Finance Sarl & Cie SCS
6.00%, 20191,3,4		20,000		21,335
Lafarge S.A.
6.15%, 20111		20,000		20,497
				146,702
Capital Goods - 0.1%
Ball Corporation
7.13%, 20161		25,000		26,156
Roper Industries, Inc.
6.25%, 20191		20,000		22,173
				48,329
Chemicals - 0.1%
Dow Chemical Company
8.55%, 20191		30,000		36,723
Solutia, Inc.
8.75%, 20171		25,000		26,000
				62,723
Communications - 0.4%
American Tower Corporation
4.63%, 20151		15,000		15,604
7.25%, 20191		28,000		31,920
Crown Castle Towers LLC		38,000		41,706
6.11%, 20201,3, 4
Discovery Communications LLC		20,000		20,505
3.70%, 20151
Grupo Televisa S.A.		15,000		15,629
6.63%, 20401
Intelsat Jackson Holdings S.A.		50,000		50,500
8.50%, 20191,3,4
QVC, Inc.
7.50%, 20191,3,4		25,000		24,563
Telecom Italia Capital S.A.
6.18%, 20141		30,000		31,363
Telefonica Emisiones SAU
5.88%, 20191		15,000		15,999
				247,789
Communications - Other - 0.2%
AT&T, Inc.
5.63%, 20161		50,000		56,671
Dun & Bradstreet Corporation
5.50%, 20111		25,000		25,760
Hughes Network Systems LLC
9.50%, 20141		25,000		25,313
XM Satellite Radio, Inc.
11.25%, 20131,3,4		25,000		26,688
				134,432
Construction Machinery - 0.1%
Commercial Vehicle Group, Inc.
13.00%, 20131,3,4		21,379		21,593
Esco Corporation
8.63%, 20131,3,4		50,000		49,625
				71,218
Consumer Noncyclical - 0.1%
AmerisourceBergen Corporation
4.88%, 20191		25,000		25,901
Kroger Company
3.90%, 20151		20,000		21,098
				46,999
Consumer Noncyclical - Other - 0.1%
Bunge North America Finance, LP
5.90%, 20171		55,000		58,691
Diversified Manufacturing - 0.1%
Bombardier, Inc.
8.00%, 20141,3,4		25,000		25,938
Case New Holland, Inc.
7.75%, 20131		25,000		25,563
Hawk Corporation
8.75%, 20141		25,000		25,031
				76,532
Electric - 1.2%
AES Corporation
7.75%, 20141		25,000		25,438
Allegheny Energy Supply Company LLC
6.75%, 20391,3,4		30,000		29,381

The accompanying notes are an integral part of the financial statements

54

Schedule of Investments June 30, 2010 (unaudited) Series N (Managed Asset Allocation Series)

	Principal Amount		Value
CORPORATE BONDS - 13.6% (continued)
Electric - 1.2% (continued)
Appalachian Power Company
6.38%, 20361	$	25,000	$	27,033
Baltimore Gas & Electric Company
5.90%, 20161		50,000		57,590
Black Hills Corporation
6.50%, 20131		30,000		32,607
CenterPoint Energy, Inc.
7.25%, 20101		25,000		25,201
Consumers Energy Company
6.00%, 20141		25,000		27,959
EI Paso Electric Company
6.00%, 20351		45,000		43,785
Exelon Generation Company LLC
6.25%, 20391		15,000		16,023
Express Scripts, Inc.
6.25%, 20141		15,000		16,983
FirstEnergy Solutions Corporation
4.80%, 20151		25,000		26,160
Massachusetts Electric Company
5.90%, 20391,3,4		25,000		27,362
Nevada Power Company
7.13%, 20191		25,000		29,571
Northern States Power Company
5.35%, 20391		14,000		14,717
Pacific Gas & Electric Company
6.35%, 20381		20,000		23,304
PacifiCorp
6.25%, 20371		40,000		46,969
Pinnacle Foods Finance LLC
9.25%, 20151		25,000		25,500
Public Service Company of Oklahoma
5.15%, 20191		15,000		15,795
Public Service Electric & Gas Company
5.70%, 20361		50,000		55,775
Southern California Edison Company
5.50%, 20401		50,000		54,548
Tampa Electric Company
6.15%, 20371		40,000		44,139
Teck Resources, Ltd.
9.75%, 20141		25,000		29,545
10.75%, 20191		5,000		6,127
Teco Finance, Inc.
5.15%, 20101		20,000		20,846
Virginia Electric and Power Company
4.50%, 20101		35,000		35,552
Westar Energy, Inc.
5.10%, 20101		25,000		26,608
				784,518
Energy - 0.1%
Hess Corporation
6.00%, 20401		15,000		15,508
North American Energy Alliance LLC
10.88%, 20161,3,4		25,000		25,750
				41,258
Cie Generale de Gelphysique-Veritas
9.50%, 20161		25,000		25,375
Entertainment - 0.1%
Historic TW, Inc.
6.88%, 20181		50,000		58,829
Ticketmaster Entertainment LLC
10.75%, 20161		25,000		26,938
				85,767
Environmental - 0.1%
Teck Resources, Ltd.
10.25%, 20161		15,000		17,700
Waste Management, Inc.
6.10%, 20181		55,000		62,687
				80,387
Financial - Other - 0.2%
AvalonBay Communities, Inc.
6.13%, 20121		16,000		17,317
Duke Realty, LP
6.25%, 20131		20,000		21,316
ERAC USA Finance LLC
5.25%, 20201,3,4		20,000		20,210
First Data Corporation
9.88%, 20151		25,000		18,750
Kinder Morgan Finance Company ULC
5.70%, 20161		45,000		42,975
Nuveen Investments, Inc.
5.50%, 20151		25,000		18,000
				138,568
Financial Companies - 0.1%
GMAC, Inc.
8.00%, 20201,3,4		25,000		24,438
WEA Finance LLC
7.50%, 20141,3,4		20,000		22,665
				47,103
Financial Companies - Noncaptive Consumer - 0.2%
American Express Credit Corporation
5.88%, 20131		35,000		38,295
7.30%, 20131		15,000		16,983
Capital One Capital IV
6.75%, 20371,6		50,000		41,750
SLM Corporation
5.13%, 20121		15,000		14,777
8.45%, 20181		50,000		46,140
				157,945
Financial Companies - Noncaptive Diversified - 0.1%
International Lease Finance Corporation
6.63%, 20131		25,000		23,188
Wachovia Corporation
5.75%, 20181		55,000		60,255
				83,443

The accompanying notes are an integral part of the financial statements

55

Schedule of Investments June 30, 2010 (unaudited) Series N (Managed Asset Allocation Series)

	Principal Amount		Value
CORPORATE BONDS - 13.6%(continued)
Financial Institiutions - 0.1%
Citigroup, Inc.
5.50%,20141	$	20,000	$	20,562
JPMorgan Chase Capital XXVII
7.00%,20391		30,000		30,508
SLM Corporation
5,38%,20141		25,000		22,859
				73,929
Food & Beverage - 0.2%
Anheuser- Busch InBev Worldwide, Inc.
5.38%,20141,3,4		60,000		65,600
ARAMARK Corporation
3.85%,20151,6		25,000		23,000
Coca-Cola Amatil, Ltd.
3.25%,20141,3,4		20,000		20,314
Kraft Foods, Inc.
6.50%,20401		25,000		27,958
Mead Johnson Nutrition Company
4.90%, 20191,3,4		10,000		10,574
Pantry, Inc.
7.75%, 20141		25,000		24,125
				171,571
Gaming - 0.0%
MGM Resort International
10.38%,20141		25,000		27,188
Health Care - 0.2%
HCA Inc.
9.25%,20161		50,000		53,000
Talecris Biotherapeutics Holdings Corporation
7.75%, 20161,3,4		25,000		26,625
WellPoint, Inc.
5.00%, 20111		30,000		30,586
				110,211
Home Construction - 0.1%
MDC Holdings, Inc.
5.50%, 20131		55,000		57,005
Independent Energy - 0.3%
Canadian Natural Resources, Ltd.
6.25%, 20381		35,000		38,262
Connacher Oil and Gas, Ltd.
10.25%, 20151,3,4		25,000		24,688
Forest Oil Corporation
8.00%, 20111		25,000		26,000
Hilcorp Energy I, LP
7.75%, 20151,3,4		75,000		73,875
NRG Energy, Inc.
7.25%, 20141		25,000		25,344
				188,169
Insurance - 0.2%
Aflac, Inc.
6.90%, 20391		20,000		20,790
Allstate Corporation
7.45%, 20191		20,000		23,571
American International Group, Inc.
8.25%, 20181		25,000		25,313
8.18%, 20581,6		25,000		19,750
Genworth Financial, Inc.
8.63%, 20161		15,000		15,996
7.70%, 20201		5,000		4,995
PartnerRe Finance B LLC
5.50%, 20201		30,000		28,991
Reinsurance Group of America, Inc.
6.45%, 20191		15,000		16,032
				155,438
Insurance - Life - 0.5%
Aflac, Inc.
8.50%, 20191		20,000		24,064
Lincoln National Corporation
4.30%, 20151		5,000		5,086
MetLife, Inc.
6.13%, 20111		50,000		52,900
NLV Financial Corporation
7.50%, 20331,3,4		30,000		26,265
Pacific LifeCorp
6.00%, 20201,3,4		30,000		31,836
Principal Financial Group, Inc.
6.05%, 20361		30,000		28,092
Principal Life Global Funding I
5.13%, 20131,3,4		45,000		47,285
Provident Companies, Inc.
7.00%, 20181		15,000		15,941
Prudential Financial, Inc.
6.20%, 20151		10,000		11,005
4.75%, 20151		35,000		36,135
5.38%, 20201		15,000		15,192
Sun Life Financial Global Funding, LP
0.54%, 20131,3,4,6		45,000		43,651
UnumProvident Finance Company plc
6.85%, 20151,3,4		5,000		5,310
				342,762
Insurance - Property & Casualty - 0.1%
ACE INA Holdings, Inc.
5.70%, 20171		30,000		32,848
HUB International Holdings, Inc.
10.25%, 20151,3,4		25,000		22,938
				55,786
Integrated Energy - 0.2%
Hess Corporation
7.88%, 20291		20,000		24,610
Petrobras International Finance Company
5.88%, 20181		35,000		36,021
Petro-Canada
6.80%, 20381		10,000		11,473
West Penn Power Company
5.95%, 20171,3,4		25,000		26,938
				99,042
Lodging - 0.0%
Host Hotels & Resorts, LP
6.75%, 20161		25,000		24,719

The accompanying notes are an integral part of the financial statements

56

Schedule of Investments	Series N
June 30, 2010 (Unaudited)	(Managed Asset Allocation Series)

	Principal Amount		Value
CORPORATE BONDS - 13.6% (continued)
Media - Cable - 0.5%
British Sky Broadcasting Group plc
6.10%, 20181,3,4	$	25,000	$	28,060
CBS Corporation
5.75%, 20201		15,000		16,100
Comcast Cable Communications Holdings, Inc.
8.38%, 20131		11,000		12,738
Comcast Corporation
5.70%, 20181		40,000		43,970
COX Communications, Inc.
7.13%, 20121		20,000		22,222
6.25%, 20181,3,4		10,000		11,151
8.38%, 20391,3,4		10,000		13,593
CSC Holdings LLC
8.50%, 20141		25,000		26,063
DirecTV Holdings LLC
7.63%, 20161		25,000		27,156
5.88%, 20191		45,000		49,157
NBC Universal, Inc.
5.15%, 20201 ,3,4		60,000		62,578
News America, Inc.
6.15%, 20371		5,000		5,215
TCM Sub LLC
3.55%, 20151,3,4		25,000		25,562
Time Warner Cable, Inc.
5.40%, 20121		55,000		58,750
Videotron Ltee
9.13%, 20181		25,000		27,125
				429,440
Media - Non Cable - 0.2%
Affinity Group, Inc.
9.00%, 20121		25,000		18,656
DIRECTV Holdings LLC
3.55%, 20151		25,000		25,166
News America, Inc.
6.40%, 20351		45,000		48,975
Thomson Reuters Corporation
6.50%, 20181		25,000		29,531
Time Warner, Inc.
7.70%, 20321		20,000		24,121
Univision Communications, Inc.
9.75%, 20151,3,4		27,693		23,054
				169,503
Metals & Mining - 0.4%
AngloGold Ashanti Holdings plc
5.38%, 20201		10,000		10,153
Cliffs Natural Resources, Inc.
5.90%, 20201		5,000		5,362
Novelis, Inc.
11.50%, 20151		25,000		26,125

Placer Dome, Inc.
6.45%, 20351		35,000	38,518
Rio Tinto Finance USA, Ltd.
5.88%, 20131		35,000	38,349
Russel Metals, Inc.
6.38%, 20141		25,000	24,063
Southern Copper Corporation
5.38%, 20201		5,000	5,012
Steel Dynamics, Inc.
7.38%, 20121		25,000	25,874
Tube City IMS Corporation
9.75%, 20151	$	25,000	24,188
			197,644
Natural Gas - 0.2%
AGL Capital Corporation
5.25%, 20191		5,000	5,288
Buckeye Partners, LP
5.50%, 20191		25,000	25,904
Enogex LLC
6.25%, 20201,3,4		10,000	10,710
Enterprise Products Operating LLC
5.25%, 20201		5,000	5,148
7.55%, 20381		15,000	17,465
Magellan Midstream Partners, LP
6.55%, 20191		20,000	22,461
Plains All American Pipeline, LP
5.75%, 20201		20,000	20,666
Spectra Energy Capital LLC
5.65%, 20201		20,000	21,015
			128,657
Natural Gas Pipelines - 0.2%
Boardwalk Pipelines, LP
5.50%, 20171		20,000	20,680
Buckeye Partners, LP
6.05%, 20181		15,000	16,585
Dynegy Holdings, Inc.
7.50%, 20151		25,000	19,781
El Paso Corporation
12.00%, 20131		25,000	28,813
Plains All American Pipeline, LP
6.50%, 20181		15,000	16,509
Texas Gas Transmission LLC
5.50%, 20131,3,4		50,000	53,875
			156,243
Non U.S. Banking - 0.2%
Credit Su isse AG
5.40%, 20201		40,000	39,771
Lloyds TSB Bank plc
4.38%, 20151,3,4		35,000	33,721
			73,492
Oil Field Services - 0.4%
Devon Financing Corporation ULC
7.88%, 20311		25,000	31,753
Diamond Offshore Drilling, Inc.
5.15%, 20141		25,000	25,953
El Paso Natural Gas Company
5.95%, 20171		13,000	13,814
EnCana Corporation
5.90%, 20171		35,000	39,335
6.50%, 20341		35,000	38,525

EOG Resources, Inc.
5.88%, 20171	25,000	28,147
Nabors Industries, Inc.
6.15%, 20181	10,000	10,722
Pemex Project Funding Master Trust
5.75%, 20181	80,000	83,807

The accompanying notes are an integral part of the financial statements

57

Schedule of Investments	Series N
June 30, 2010 (Unaudited)	(Managed Asset Allocation Series)

	Principal Amount		Value
CORPORATE BONDS - 13.6% (continued)
Oil Field Services - 0.4% (continued)
Petrobras International Finance Company
7.88%, 20191	$	15,000	$	17,163
5.75%, 20201		10,000		10,070
Shell International Finance BV
6.38%, 20381		25,000		29,868
Southern Natural Gas Company
5.90%, 20171,3,4		13,000		13,773
Woodside Finance, Ltd.
4.50%, 20141,3,4		10,000		10,199
				353,129
Paper - 0.1%
Boise Cascade LLC
7.13%, 20141		15,000		14,119
Georgia-Pacific LLC
7.13%, 20171,3,4		25,000		25,500
Nielsen Finance LLC
11.63%, 20141		25,000		27,312
				66,931
Pharmaceuticals - 0.0%
Life Technologies Corporation
4.40%, 20151		15,000		15,516
Pipelines - 0.1%
Enbridge Energy Partners, LP
5.20%, 20201		10,000		10,304
Kinder Morgan, Inc.
6.50%, 20121		25,000		25,812
Williams Partners, LP
6.30%, 20401,3,4		25,000		25,118
				61,234
Refining - 0.2%
Enterprise Products Operating LLC
6.30%, 20171		20,000		22,372
Marathon Oil Corporation
6.00%, 20171		35,000		39,107
6.60%, 20371		15,000		16,391
Motiva Enterprises LLC
6.85%, 20401,3,4		10,000		11,429
Valero Energy Corporation
6.13%, 20171		55,000		58,410
				147,709
REIT’s - 0.4%
AMB Property, LP
6.63%, 20191		20,000		21,552
ERP Operating, LP
5.25%, 20141		25,000		26,748
Federal Realty Investment Trust
6.00%, 20121		20,000		21,415
Hospitality Properties Trust
5.63%, 20171		30,000		28,724
Kilroy Realty, LP
6.63%, 20201,3,4		25,000		25,479
Mack-Cali Realty, LP
7.75%, 20191		20,000		23,502
Reckson Operating Partnership, LP
6.00%, 20161		30,000		29,072
Regency Centers, LP
5.88%, 20171		15,000		15,812
6.00%, 20201		10,000		10,325
Simon Property Group, LP
5.75%, 20151		55,000		60,465
				263,094
Restaurants - 0.0%
Macy’s Retail Holdings, Inc.
5.35%, 20121		20,000		20,450
Retailers - 0.4%
AmeriGas Partners, LP
7.13%, 20161		100,000		99,499
GameStop Corporation
8.00%, 20121		25,000		25,688
Home Depot, Inc.
5.40%, 20161		35,000		38,954
JC Penney Company, Inc.
5.65%, 20201		5,000		4,888
JC Penney Corporation, Inc.
9.00%, 20121		30,000		33,038
Neiman Marcus Group, Inc.
10.38%, 20151		25,000		25,438
Nordstrom, Inc.
4.75%, 20201		10,000		10,357
Rite Aid Corporation
10.25%, 20191		25,000		24,906
				262,768
Sovereigns - 0.1%
Brazilian Government International Bond
11.00%, 20401		35,000		46,865
Supermarkets - 0.0%
Kroger Company
7.50%, 20141		5,000		5,843
Technology - 0.4%
Seagate Technology HDD Holdings
6.80%, 20161		25,000		24,250
SunGard Data Systems, Inc.
9.13%, 20131		100,000		101,625
Xerox Corporation
5.50%, 20121		15,000		15,989
6.75%, 20171		100,000		112,531
6.35%, 20181		25,000		27,886
				282,281
Telecommunications - Wireless - 0.6%
America Movil S.A. de CV
6.38%, 20351		45,000		48,157
CC Holdings GS V LLC
7.75%, 20171,3,4		25,000		26,438
Clearwire Communications LLC
12.00%, 20151,3,4		25,000		24,781
Cricket Communications, Inc.
7.75%, 20161		25,000		25,500
Digicel, Ltd.
12.00%, 20141,3,4		25,000		27,938

The accompanying notes are an integral part of the financial statements

58

Schedule of Investments	Series N
June 30, 2010 (Unaudited)	(Managed Asset Allocation Series)

	Principal Amount		Value
CORPORATE BONDS - 13.6% (continued)
Telecommunications - Wireless - 0.6% (continued)
iPCS, Inc.
3.59%, 20141,6	$	25,556	$	23,384
MetroPCS Wireless, Inc.
9.25%, 20141		25,000		25,750
New Cingular Wireless Services, Inc.
7.88%, 20111		30,000		31,370
NII Capital Corp.
10.00%, 20161		25,000		26,313
SBA Telecommunications, Inc.
8.00%, 20161,3,4		25,000		25,875
Sprint Capital Corporation
8.38%, 20121		25,000		26,219
Sprint Nextel Corporation
8.38%, 20171		50,000		49,999
Verizon Global Funding Corporation
7.75%, 20301		35,000		43,615
Verizon Virginia, Inc.
4.63%, 20131		45,000		47,487
Wind Acquisition Finance S.A.
12.00%, 20151,3,4		25,000		25,875
				478,701
Telecommunications - Wirelines - 0.4%
AT&T, Inc.
6.45%, 20341		50,000		54,421
Cellco Partnership
8.50%, 20181		40,000		52,006
Nordic Telephone Company Holdings ApS
8.88%, 20161,3,4		100,000		102,750
Telecom Italia Capital S.A.
5.25%, 20131		30,000		30,987
Telefonica Emisiones SAU
6.22%, 20171		35,000		38,069
Windstream Corporation
8.63%, 20161		25,000		25,188
				303,421
Textile - 0.1%
Invista
9.25%, 20121,3,4		48,000		48,720
Tobacco - 0.2%
Altria Group, Inc.
8.50%, 20131		25,000		29,184
4.13%, 20151		45,000		45,849
9.25%, 20191		20,000		24,962
BAT International Finance plc
8.13%, 20131,3,4		25,000		29,512
Reynolds American, Inc.
7.25%, 20131		30,000		33,003
				162,510
Transportation - 0.0%
Southwest Airlines Company
5.13%, 20171		20,000		20,296

U.S. Banking - 0.1%
Bank of America Corp.
6.50%, 20161		20,000		21,644
Fifth Third Bancorp
8.25%, 20381		25,000		28,028
GMAC, Inc.
8.00%, 20311		25,000		23,063
USB Capital XIII Trust
6.63%, 20391		15,000		15,815
				88,550
TOTAL CORPORATE BONDS (cost $9,127,018)			$	9,646,512
	Principal Amount		Value
FOREIGN BONDS - 0.3%
Chile - 0.1%
Celulosa Arauco y Constitucion S.A.
5.13%, 20131	$	40,000	$	42,096
Mexico - 0.1%
Mexico Government International Bond
6.38%, 20131		45,000		49,343
South Africa - 0.1%
South Africa Government International Bond
6.50%, 20141		65,000		72,150
United Kingdom - 0.0%
HBOS plc
6.00%, 20331,3,4		40,000		29,241
TOTAL FOREIGN BONDS
(cost $190,992)			$	192,830
	Principal Amount		Value
MUNICIPAL BONDS - 0.5%
California - 0.2%
Bay Area Toll Authority Revenue Bonds
6.26%, 20491	$	25,000	$	26,284
Los Angeles Department of Airports Revenue Bonds
6.58%, 20391		20,000		21,720
San Diego County Water Authority Revenue Bonds
6.14%, 20491		15,000		16,252
State of California General Obligation Unlimited
7.63%, 20401		30,000		32,414
				96,670
District Of Columbia - 0.0%
District of Columbia Revenue Bonds
5.59%, 20341		10,000		10,463
Illinois - 0.2%
Chicago Transit Authority Revenue Bonds

The accompanying notes are an integral part of the financial statements

59

Schedule of Investments	Series N
June 30, 2010 (Unaudited)	(Managed Asset Allocation Series)

	Principal Amount		Value
MUNICIPAL BONDS - 0.5% (continued)
Illinois - 0.2% (continued)
6.90%, 20401	$	30,000	$	33,332
City of Chicago Illinois Revenue Bonds
6.40%, 20401		20,000		21,338
Greater Chicago Metropolitan Water Reclamation District General Obligation Limited
5.72%, 20381		25,000		27,126
				81,796
Kansas - 0.0%
Kansas Development Finance Authority Revenue Bonds
5.50%, 20341		30,000		29,935
Maryland - 0.0%
Maryland State Transportation Authority Revenue Bonds
5.89%, 20431		20,000		21,639
New York - 0.1%
City of New York NY
5.85%, 20401		10,000		10,135
Metropolitan Transportation Authority Revenue Bonds
7.34%, 20391		10,000		12,211
New York City Housing Development Corporation Revenue Bonds
6.42%, 20271		25,000		24,223
				46,569
Oregon - 0.0%
State of Oregon General Obligation Unlimited
5.89%, 20271		15,000		16,486
Utah - 0.0%
Utah Transit Authority Revenue Bonds
5.94%, 20391		15,000		16,433
West Virginia - 0.0%
Tobacco Settlement Finance Authority Revenue Bonds
7.47%, 20471		45,000		33,472
TOTAL MUNICIPAL BONDS (cost $347,442)			$	353,463
	Principal Amount		Value
MORTGAGE BACKED SECURITIES - 12.2%
Federal Home Loan Mortgage Corporation - 0.3%
Pass Through’s - 0.3%
Federal Home Loan Mortgage Corporation
#A90052, 4.50%, 20391	$	34,104	$	35,379
#A91160, 4.50%, 20401		85,845		89,053
Federal National Mortgage Association
#932633, 4.50%, 20401		105,898		109,955
				234,387
				234,387
Freddie Mac - 0.1%
Freddie Mac - 0.1%
Federal National Mortgage Association
#A91703, 4.50%, 20401		58,617		60,808
				60,808
Home Equity Loans - 0.1%
Commercial Mortgage Backed Securities - 0.1%
JP Morgan Chase Commercial Mortgage Securities Corp.
5.55%, 20451		80,000		83,864
				83,864
Other Non-Agency - 2.1%
C.M.O.’s - 0.4%
Bank of America Mortgage Securities, Inc.
2004-A, 3.52%, 20341,6		19,860		18,181
2004-D, 2.96%, 20341,6		1,997		1,843
2004-H, 3.72%, 20341,6		11,953		10,932
2004-I, 4.85%, 20341,6		9,846		9,664
2005-J, 5.24%, 20351,6		29,003		22,205
Commercial Mortgage Loan Trust
2008-LS1, 6.02%, 20171,6		175,000		189,179
Credit Suisse Mortgage Capital Certificates
2006-C4, 5.47%, 20391		100,000		98,277
				350,281
Commercial Mortgage Backed Securities - 1.7%
American Tower Trust
2007-lA, 5.96%, 20371.3,4		45,000		47,336
Bank of America Commercial Mortgage, Inc.
2003-1, 4.65%, 20361		75,000		78,650
2005-3, 4.50%, 20431		172,385		174,210
Bear Stearns Commercial Mortgage Securities
2005-PW10, 5.09%, 20401		21,282		21,367
2006-PW13, 5.54%, 20411		61,000		63,635
2005-PWR9, 4.87%, 20421		43,000		44,493
Citigroup
2005-CD1, 5.22%, 20441,6		175,000		185,988
GMAC Commercial Mortgage Securities, Inc.
2001-C2, 6.70%, 20341		115,817		119,514
JP Morgan Chase Commercial Mortgage Securities Corp.
2001-CIBC, 6.26%, 20331		78,274		79,338
2004-LDP4, 4.82%, 20421,6		73,986		77,266

The accompanying notes are an integral part of the financial statements

60

Schedule of Investments	Series N
June 30, 2010 (Unaudited)	(Managed Asset Allocation Series)

	Principal Amount		Value
MORTGAGE BACKED SECURITIES - 12.2% (continued)
Other Non-Agency - 2.1% (continued)
Commercial Mortgage Backed Securities - 1.7%(continued)
Morgan Stanley Dean Witter Capital I
2002-Top7, 5.98%, 20391	$	200,00	$	210,914
				1,102,711
				1,452,992
U.S. Government Sponsored
Agencies - 8.6%
C.M.O’s - 0.1%
Federal Home Loan Mortgage Corporation
FHR 2614 IH, 4.50%, 20161,7		24,730		526
Federal National Mortgage Association
FNS 319 2, 6.50%, 2032 1,7		7,295		1,723
FNR 2006-35 GK, 6.00%, 20321		55,735		57,042
				59,291
Pass Through’s - 8.5%
Federal Home Loan Mortgage Corporation
#E01341, 5.50%, 20181		3,916		4,235
#E99966, 5.00%, 20181		13,235		14,222
#E99933, 5.00%, 20181		2,511		2,698
#B10343, 5.00%, 20181		3,459		3,717
#B19214, 5.50%, 20201		14,106		15,295
#J02272, 5.50%, 20201		49,155		53,299
#J02554, 5.50%, 20201		38,542		41,791
#J03203, 6.00%, 20211		26,447		28,818
#J03254, 6.00%, 20211		8,184		8,917
#J03640, 6.00%, 20211		47,042		51,259
#J03615, 6.00%, 20211		59,665		65,014
#J03672, 6.00%, 20211		17,946		19,555
#933890, 5.00%, 20231		159,379		170,274
#AA0774, 4.50%, 20241		149,292		157,799
#C68205, 7.00%, 20321		2,786		3,144
#1B0527, 3.35%, 20321,6		1,065		1,108
#A12118, 5.00%, 20331		29,147		30,984
#D86309, 5.00%, 20331		20,673		21,976
#A15852, 5.00%, 20331		14,507		15,421
#A15907, 5.00%, 20331		18,395		19,554
#A21263, 4.50%, 20341		101,192		105,860
#G01805, 4.50%, 20351		211,640		220,777
#833174, 5.18%, 20351,6		116,862		124,121
#1G1762, 5.07%, 20351,6		22,163		23,571
#1G0661, 5.31%, 20361,6		9,218		9,812
#745336, 5.00%, 20361		147,700		156,776
#1G1353, 5.95%, 20361,6		49,738		53,690
#AA5588, 4.50%, 20391		205,515		213,388
Federal National Mortgage Association
#254140, 5.50%, 20171		2,407		2,606
#625931, 5.50%, 20171		2,042		2,211
#254234, 5.50%, 20171		2,560		2,771
#357 280, 6.50%, 20171		12,145		13,255
#555345, 5.50%, 20181		2,395		2,593

#685202, 5.50%, 20181	35,503	38,557
#725098, 5.50%, 20181	8,834	9,594
#725528, 5.50%, 20191	6,443	6,997
#789885, 5.50%, 20191	8,633	9,376
#745406, 6.00%, 20211	45,975	50,131
#981614, 5.00%, 20231	5,566	5,947
#545759, 6.50%, 20321	64,443	70,660
#650075, 6.50%, 20321	8,387	9,364
#254514, 5.50%, 20321	1,569	1,694
#254550, 6.50%, 20321	12,948	14,456
#974321, 6.00%, 20331	55,070	59,797
#555417, 6.00%, 20331	31,898	35,215
#254767, 5.50%, 20331	92,806	100,092
#744692, 5.50%, 20331	26,175	28,229
#747387, 5.50%, 20331	19,306	20,822
#750362, 5.50%, 20331	17,725	19,116
#744750, 5.50%, 20331	8,692	9,374
#747571, 5.50%, 20331	13,316	14,362
#747549, 5.50%, 20331	4,729	5,100
#254983, 5.50%, 20331	42,799	46,159
#756190, 5.50%, 20331	25,276	27,260
#762076, 5.50%, 20341	23,719	25,581
#255028, 5.50%, 20341	10,619	11,413
#725424, 5.50%, 20341	202,062	217,923
#763700, 5.00%, 20341	52,992	56,528
#789293, 5.50%, 20341	84,224	90,888
#791574, 6.00%, 20341	22,579	24,771
#790217, 6.00%, 20341	9,003	9,877
#725704, 6.00%, 20341	194,842	214,612
#790237, 6.00%, 20341	23,177	25,427
#923129, 5.50%, 20341	10,521	11,330
#790044, 6.00%, 20341	19,659	21,568
#790629, 6.00%, 20341	20,953	22,988
#790788, 6.00%, 20341	26,372	28,932
#796104, 5.50%, 20341	24,801	26,710
#725946, 5.50%, 20341	285,036	306,964
#255459, 6.00%, 20341	24,908	27,326
#804395, 5.50%, 20341	55,207	59,454
#808951, 6.00%, 20351	242,532	264,412
#735502, 6.00%, 20351	23,218	25,472
#735403, 5.00%, 20351	17,771	18,830
#889829, 5.00%, 20351	338,517	360,005
#745216, 3.03%, 20351,6	30,394	31,730
#745412, 5.50%, 20351	39,069	42,075
#850863, 5.29%, 20351,6	18,679	19,891
#888884, 5.50%, 20351	119,504	128,885
#848522, 5.59%, 20351,6	6,549	6,976
#845354, 5.50%, 20361	40,594	43,679
#745554, 6.50%, 20361	251,183	276,669
#868728, 6.50%, 20361	7,332	8,039
#745418, 5.50%, 20361	21,594	23,235
#888010, 5.96%, 20361,6	22,540	24,278
#900362, 6.00%, 20361	35,387	38,513
#896329, 6.50%, 20361	25,702	28,230
#893353, 6.00%, 20361	30,399	33,085
#745946, 5.50%, 20361	12,017	12,919
#905196, 5.92%, 20361,6	22,865	24,319
#1B3203, 5.86%, 20371,6	13,163	14,014
#938883, 5.00%, 20371	69,413	73,555

The accompanying notes are an integral part of the financial statements

61

Schedule of Investments	Series N
June 30, 2010 (Unaudited)	(Managed Asset Allocation Series)

	Principal Amount		Value
MORTGAGE BACKED SECURITIES - 12.2% (continued)
U.S. Government Sponsored Agencies - 8.6% (continued)
Pass Through’s - 8.5% (continued)
Federal National Mortgage Association (continued)
#938089, 5.00%, 20371	$	18,088	$	19,168
#995024, 5.50%, 20371		104,309		112,334
#889543, 5.50%, 20371		67,323		72,356
#972155, 6.00%, 20381		46,685		50,693
#983288, 6.00%, 20381		56,573		61,429
#964926, 6.00%, 20381		35,923		39,006
#257407, 6.00%, 20381		14,971		16,257
#AA7985, 4.50%, 20391		62,948		65,360
#AA9346, 4.50%, 20391		32,046		33,274
#931837, 4.50%, 20391		159,207		165,306
#AC4810, 4.50%, 20391		24,881		25,834
#AD0441, 6.00%, 20391		58,817		63,903
#AC9564, 4.50%, 20401		122,177		126,858
#AD1655, 4.50%, 20401		65,509		68,009
#AD3685, 4.50%, 20401		114,799		119,179
#AD5661, 5.00%, 20401		3,987		4,225
#AD6437, 5.00%, 20401		64,000		67,813
				6,034,920
				6,094,211
U.S. Government Sponsored Securities - 1.0%
Pass Through’s - 1.0%
Government National Mortgage Association
#780766, 7.00%, 20131		26		26
#781312, 7.00%, 20131		6,484		6,879
G2 2102, 8.00%, 20251		675		776
G2 3295, 5.50%, 20321		6,813		7,425
#615278, 5.00%, 20331		60,756		65,305
#612919, 5.00%, 20331		27,534		29,595
#604639, 5.00%, 20331		46,146		49,602
G2 3442, 5.00%, 20331		111,337		119,671
G2 3458, 5.00%, 20331		31,087		33,396
G2 3490, 6.50%, 20331		5,235		5,819
G2 3513, 5.00%, 20341		38,444		41,250
G2 3517, 6.00%, 20341		19,527		21,512
G2 3529, 5.00%, 20341		9,083		9,746
G2 3530, 5.50%, 2034 1		15,208		16,543
#605561, 5.50%, 20341		33,977		36,926
G2 4558, 4.50%, 2039 1		237,692		247,581
				692,052
				692,052
TOTAL MORTGAGE BACKED SECURITIES
(cost $8,186,798)			$	8,618,314

	Principal Amount		Value
ASSET BACKED SECURITIES - 1.3%
Auto - 0.5%
Ally Auto Receivables Trust
2009-B, 4.06%, 20161,3,4	$	60,000	$	60,844
AmeriCredit Automobile Receivables Trust
2006-RM, 5.53%, 20141		55,000		56,512
2010-2, 2.73%, 20151		34,000		34,288
CarMax Auto Owner Trust
2010-2, 1.00%, 20161		25,000		24,993
Toyota Auto Receivables Owner Trust
2010-A, 1.86%, 20161		120,000		120,314
Triad Auto Receivables Owner Trust
2006-B, 5.52%, 20121		80,864		82,184
USAA Auto Owner Trust
2008-1, 4.16%, 20121		13,281		13,378
			$	392,513
Credit Cards - 0.4%
Capital One Multi-Asset Execution Trust
2005-A7, 4.70%, 20151		70,000		74,815
GE Capital Credit Card Master Note Trust
2009-2, 3.69%, 20151		114,000		118,480
MBNA Credit Card Master Note Trust
2006-C3, 0.64%, 20131,6		35,000		34,565
Navistar Financial Corporation Owner Trust
2010-A, 4.17%, 20141,3,4		50,000		50,369
				278,229
Home Equity Loans - 0.0%
Chase Funding Mortgage Loan Asset-Backed Certificates
2002-2, 5.60%, 20311		5,846		3,221
Morgan Stanley Structured Trust
2007-1, 0.43%, 20371,6		10,716		9,824
				13,045
Other - 0.3%
CNH Equipment Trust
2007-A, 5.09%, 20141		50,000		50,551
CNH Wholesale Master Note Trust
2009-lA, 2.05%, 20151,3,4,6		100,000		100,707
Marriott Vacation Club Owner Trust
2006-lA, 5.74%, 20281,3,4		39,308		40,275
2006-2A, 5.36%, 20281,3,4		12,596		12,803
				204,336
Student Loans - 0.1%
SLM Student Loan Trust
2008-4, 1.37%, 20121,6		60,000		61,031
TOTAL ASSET BACKED SECURITIES
(cost $934,954)			$	949,154
	Principal Amount		Value
U.S. GOVERNMENT SPONSORED AGENCY BONDS & NOTES - 0.0%
Federal Home Loan Bank
5.60%, 6/28/20111	$	10,000	$	10,493
TOTAL U.S GOVERNMENT SPONSORED AGENCY BONDS & NOTES
(cost $10,000)			$	10,493

The accompanying notes are an integral part of the financial statements

62

Schedule of Investments June 30, 2010 (Unaudited) Series N (Managed Asset Allocation Series)

	Principal Amount		Value
U.S. GOVERNMENT SECURITIES - 7.2%
U.S. Treasury Bond
4.63%, 2/15/2040*	$	335,000	$	376,561
U.S. Treasury Note
2.63%, 4/30/2016		1,300,000		1,335,750
U.S. Treasury Notes
2.38%, 8/31/2010		250,000		250,908
1.00%, 8/31/2011		70,000		70,454
1.75%, 8/15/2012		1,625,000		1,662,705
3.13%, 9/30/2013		340,000		361,994
2.25%, 5/31/2014		890,000		918,299
2.63%, 7/31/2014		40,000		41,797
4.00%, 8/15/2018		85,000		93,493
TOTAL U.S. GOVERNMENT SECURITIES (cost $4,959,375)			$	5,111,961
	Principal Amount		Value
SHORT TERM INVESTMENTS - 3.3%
State Street GA Money Market Fund1	$	150,292	$	150,292
T. Rowe Price Reserve Investment Fund1		2,156,933		2,156,933
TOTAL SHORT TERM INVESTMENTS (cost $2,307,225)			$	2,307,225
Total Investments - 99.8%8 (cost $70,898,235)			$	70,621,378
Cash & Other Assets, Less Liabilities - 0.2%				106,940
Total Net Assets - 100.0%			$	70,728,318

INVESTMENT CONCENTRATION

At June 30, 2010, the investment diversification of the Fund was as follows:

Country	% of Net Assets		Value
United States	83.2	%	$	58,820,796
United Kingdom	3.0			2,105,308
Japan	2.8			1,890,636
France	1.4			951,383
Switzerland	1.3			895,010
Canada	1.0			745,916
Australia	1.0			689,761
Germany	0.8			589,658
Sweden	0.5			343,211
Spain	0.5			321,171
Netherlands Antilles	0.4			315,438
Ireland	0.4			274,235
Singapore	0.3			239,662
China	0.3			229,615
Mexico	0.3			229,215
Norway	0.3			203,284
Netherlands	0.2			202,423
Italy	0.3			180,046
Bermuda	0.2			166,394
Luxembourg	0.2			160,060
Hong Kong	0.2			150,129
Brazil	0.2			144,564
Cayman Islands	0.2			111,741
Panama	0.1			103,159
Denmark	0.1			102,750
Republic of Korea	0.1			82,507
Chile	0.1			72,259
South Africa	0.1			72,150
Belgium	0.1			71,013
Taiwan, Province of China	0.1			61,640
Finland	0.1			48,647
Austria	0.0			29,162
Virgin Islands (UK)	0.0			13,370
Puerto Rico	0.0			5,065
Total Investments	99.8	%	$	70,621,378

For federal income tax purposes the identified cost of investments owned at June 30, 2010 was $72,798,021.

ADR American Depositary Receipt

plc Public Limited Company

* Non-income producing security

¹ Value determined based on Level 2 inputs.

² Security was subject to the fair value trigger at June 30, 2010. The total market value of fair valued securities amounts to $8,018,429, (cost $8,658,644) or 11.3% of total net assets.

³ Security was acquired through a private placement.

⁴ Security is a 144A or Section 4(2) security. The total market value of 144A or Section 4(2) securities is $1,946,527 (cost $1,868,217), or 2.8% of total net assets.

⁵ Security is in default of interest and/or principal obligations.

⁶ Variable rate security. Rate indicated is rate effective at June 30,2010.

⁷ Security is an interest-only strip. Rate indicated is effective yield at June 30, 2010.

⁸ Unless otherwise indicated, the values of the securities of the Portfolio are based on level 1 input.

The accompanying notes are an integral part of the financial statements

63

Series N

(Managed Asset Allocation Series)

Statement of Assets and Liabilities

June 30, 2010 (Unaudited)

Assets:
Investments, at value*	$	70,621,378
Cash denominated in a foreign currency, at value**		15,122
Receivables:
Fund shares sold		25,897
Securities sold		135,813
Interest		216,838
Dividends		65,885
Foreign taxes recoverable		20,449
Prepaid expenses		551
Total assets		71,101,933
Liabilities:
Cash overdraft		823
Payable for:
Fund shares redeemed		56,338
Securities purchased		165,871
Management fees		60,088
Administration fees		15,285
Transfer agent/maintenance fees		2,100
Custodian fees		44,741
Director’s fees		60
Professional fees		16,737
Other fees		11,572
Total liabilities		373,615
Net assets	$	70,728,318
Net assets consist of:
Paid in capital	$	83,335,077
Undistributed net investment income		234,856
Accumulated net realized loss on sale of investments and foreign currency		(12,562,463	)
Net unrealized depreciation in value of investments and foreign currency		(279,152	)
Net assets	$	70,728,318
Capital shares outstanding		4,095,716
Net asset value per share (net assets divided by shares outstanding)	$	17.27
*     Investments, at cost	$	70,898,235
**   Cash denominated in a foreign currency, at cost		15,095
Statements of Operations For Six Months Ended June 30, 2010 (Unaudited)
Investment Income:
Dividends (net foreign withholding tax $21,488)	$	531,040
Interest		634,487
Total investment income		1,165,527
Expenses:
Management fees		390,273
Administration fees		85,532
Transfer agent/maintenance fees		12,766
Custodian fees		50,010
Directors’ fees		3,844
Professional fees		4,613
Reports to shareholders		6,071
Other		3,354
Total Expenses		556,463
Net investment income		609,064
Net Realized and Unrealized Gain (Loss):
Net realized gain (loss) during the period on:
Investments		802,568
Foreign currency transactions		(12,981	)
Net realized gain		789,587
Net change in unrealized appreciation (depreciation) during the period on:
Investments		(4,202,083	)
Translation of assets and liabilities in foreign currencies		(1,215	)
Net change in unrealized appreciation (depreciation)		(4,203,298	)
Net realized and unrealized loss		(3,413,711	)
Net decrease in net assets resulting from operations	$	(2,804,647	)

The accompanying notes are an integral part of the financial statements

64

Statements of Changes in Net Assets Series N (Managed Asset Allocation Series)

	Six Months Ended June  30, 2010 (unaudited)			Year Ended December 31, 2009
Increase (decrease) in net assets from operations:
Net investment income	$	609,064		$	1,274,392
Net realized gain (loss) during the period on investments and foreign currency		789,587			(6,695,196	)
Net change in unrealized appreciation (depreciation) during the period on investments and foreign currency		(4,203,298	)		22,082,468
Net increase (decrease) in net assets resulting from operations		(2,804,647	)		16,661,664
Capital share transactions:
Proceeds from sale of shares		6,989,462			9,550,796
Cost of shares redeemed		(12,888,106	)		(23,202,268	)
Net decrease from capital share transactions		(5,898,644	)		(13,651,472	)
Net increase (decrease) in net assets		(8,703,291	)		3,010,192
Net assets:
Beginning of period		79,431,609			76,421,417
End of period	$	70,728,318		$	79,431,609
Undistributed net investment at end of period	$	234,856		$	976,274
Capital share activity:
Shares sold		386,429			629,934
Shares redeemed		(706,090	)		(1,553,545	)
Total capital share activity		(319,661	)		(923,611	)

The accompanying notes are an integral part of the financial statements

65

Financial Highlights	Series N
Selected data for each share of capital stock outstanding throughout each period	(Managed Asset Allocation Series)

	Six Months Ended June  30, 2010a			2009			2008			2007			2006			Year Ended December 31, 2005
Per Share Data
Net asset value, beginning of period	$	17.99		$	14.31		$	19.67		$	18.55		$	16.55		$	15.86
Income (loss) from investment operations:
Net investment incomeb		0.14			0.27			0.34			0.32			0.30			0.23
Net gain (loss) on investments (realized and unrealized) and foreign currency		(0.86	)		3.41			(5.70	)		0.80			1.70			0.46
Total from investment operations		(0.72	)		3.68			(5.36	)		1.12			2.00			0.69
Net asset value, end of period	$	17.27		$	17.99		$	14.31		$	19.67		$	18.55		$	16.55
Total Returnc		(4.00	%)		25.72	%		(27.25	%)		6.04	%		12.08	%		4.35	%
Ratios/Supplemental Data
Net assets, end of period (in thousands)	$	70,728		$	79,432		$	76,421		$	117,423		$	105,300		$	97,690
Ratios to average net assets:
Net investment income		1.56	%		1.71	%		1.94	%		1.63	%		1.63	%		1.44	%
Total expensesd		1.43	%		1.66	%		1.52	%		1.41	%		1.41	%		1.41	%
Net expensese		1.43	%		1.66	%		1.52	%		1.41	%		1.40	%		1.41	%
Net expenses prior to custodian earnings credits and net of expense waivers		1.43	%		1.66	%		1.52	%		1.41	%		1.41	%		1.41	%
Portfolio turnover rate		45	%		46	%		82	%		75	%		63	%		67	%

^a Unaudited figures for the six months ended June 30, 2010 Percentage amounts, except total return, have been annualized.

^b Net investment income (loss) was computed using average shares outstanding throughout the period.

^C Total return does not take into account any of the expenses associated with an investment in variable insurance products offered by Security Benefit Life Insurance Company. If total return had taken into account these expenses, performance would have been lower. Shares of a series of SBL Fund are available only through the purchase of such products.

^d Total expense information reflects the expense ratios absent expense reductions by the investment Manager and custodian earnings credits, as applicable.

^e Net expense information reflects the expense ratios after voluntary expense waivers, reimbursements and custodian earnings credits, as applicable.

The accompanying notes are an integral part of the financial statements

66

	Series O
Performance Summary	(All Cap Value Series	)
June 30, 2010	(unaudited	)

PERFORMANCE

$10,000 Over 10 Years

The chart above assumes a hypothetical $10,000 investment in Series 0 (All Cap Value Series) on June 30, 2000, and reflects the fees and expenses of Series 0. The Russell 3000 Value Index measures the performance of the broad value segment of the U.S equity universe. It includes those Russell 3000 companies with lower price-to-book ratios and lower forcasted growth values.

Average Annual Returns

Periods Ended 630101	1 Year		5 Years		10 Years
Series O	16.21	%	(0.23	%)	3.70	%

¹ Performance figures do not reflect fees and expenses associated with an investment in variable insurance products offered by Security Benefit Life Insurance Company. If returns had taken into account these fees and expenses, performance would have been lower. Shares of a Series of SBL Fund are available only through the purchase of such products.

The performance data quoted above represents past performance. Past performance is not predictive of future performance. The investment return and principal value of an investment will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than their original cost.

Portfolio Composition by Sector

Consumer Discretionary	10.58	%
Consumer Staples	6.76
Energy	13.01
Financials	17.34
Health Care	6.37
Industrials	22.15
Information Technology	12.76
Materials	3.83
Telecommunication Services	1.14
Utilities	5.67
Cash & Other Assets, Less Liabilities	0.39
Total Net Assets	100.00	%

The accompanying notes are an integral part of the financial statements

67

Schedule of Investments	Series O
June 30, 2010 (Unaudited)	(All Cap Value Series	)

	Shares	Value
COMMON STOCKS - 99.6%
Aerospace & Defense - 3.1%
GeoEye, Inc.*	33,900	$	1,055,646
Orbital Sciences Corp.*	48,821		769,907
United Technologies Corp.	40,400		2,622,364
			4,447,917
Air Freight & Logistics - 2.0%
FedEx Corp.	41,500		2,909,565
Apparel Retail - 1.3%
Brown Shoe Company, Inc.	74,900		1,136,982
Chico’s FAS, Inc.	70,000		691,600
			1,828,582
Apparel, Accessories & Luxury Goods - 0.5%
Columbia Sportswear Co.	325		15,168
Maidenform Brands, Inc.*	37,600		765,536
			780,704
Application Software - 0.8%
Synopsys, Inc.*	57,600		1,202,112
Asset Management & Custody Banks - 1.3%
Bank of New York Mellon Corp.	75,600		1,866,564
Biotechnology - 0.3%
Genzyme Corp.*	9,300		472,161
Building Products - 2.1%
Trex Company, Inc.*	34,800		699,132
USG Corp.*	192,200		2,321,776
			3,020,908
Casinos & Gaming - 0.4%
Penn National Gaming, Inc.*	23,500		542,850
Coal & Consumable Fuels - 0.4%
USEC, Inc.*	124,070		590,573
Communications Equipment - 0.5%
Symmetricom, Inc.1,*	129,300		658,137
Computer Hardware - 1.6%
Hewlett-Packard Co.	54,400		2,354,432
Construction & Engineering - 2.2%
Insituform Technologies, Inc.*	37,300		763,904
Quanta Services, Inc.*	73,000		1,507,450
URS Corp.*	23,200		912,920
			3,184,274
Construction & Farm Machinery & Heavy Trucks - 0.3%
Force Protection, Inc.*	103,589		424,715
Consumer Finance - 0.2%
First Marblehead Corp.*	153,005		359,562
Data Processing & Outsourced Services - 4.6%
Computer Sciences Corp.	55,400		2,506,850
Western Union Co.	278,100		4,146,471
			6,653,321
Department Stores - 1.4%
JC Penney Company, Inc.	91,400		1,963,272
Diversified Banks - 2.9%
U.S. Bancorp	70,017		1,564,880
Wells Fargo & Co.	102,633		2,627,405
			4,192,285
Diversified Chemicals - 1.1%
Dow Chemical Co.	67,900		1,610,588
Drug Retail - 1.3%
CVS Caremark Corp.	65,300		1,914,596
Electric Utilities - 3.9%
Allete, Inc.	15,618		534,760
Edison International	112,700		3,574,844
Great Plains Energy, Inc.	47,192		803,208
Northeast Utilities	27,064		689,591
			5,602,403
Electrical Components & Equipment - 0.5%
General Cable Corp.*	28,000		746,200
Electronic Components - 0.8%
Power-One, Inc.*	172,800		1,166,400
Electronic Manufacturing Services - 2.6%
Maxwell Technologies, Inc.1,*	68,700		783,180
Tyco Electronics, Ltd.	115,600		2,933,928
			3,717,108
Environmental & Facilities Services - 0.8%
Covanta Holding Corporation*	67,000		1,111,530
Forest Products - 0.8%
Louisiana-Pacific Corp.2,*	164,000		1,097,160
General Merchandise Stores - 0.1%
Fred’s, Inc.	12,550		138,803
Health Care Equipment - 3.6%
Covidien plc	49,500		1,988,910
Hologic, Inc.*	24,443		340,491
Hospira, Inc.*	46,600		2,677,170
			5,006,571
Health Care Services - 1.2%
Medco Health Solutions, Inc.*	7,200		396,576
Mednax, Inc. 2,*	17,500		973,175
RehabCare Group, Inc.*	18,370		400,099
			1,769,850
Home Furnishings - 0.3%
Leggett & Platt, Inc. 2	25,100		503,506
Home Improvement Retail - 2.6%
Lowe’s Companies, Inc.	188,000		3,838,960
Housewares & Specialties - 0.2%
Fortune Brands, Inc.	6,000		235,080

The accompanying notes are an integral part of the financial statements

68

Schedule of Investments	Series O
June 30, 2010 (Unaudited)	(All Cap Value Series)

	Shares	Value
COMMON STOCKS - 99.6% (continued)
Human Resources & Employment Services - 0.5%
Administaff, Inc.	29,500	$	712,720
Hypermarkets & Super Centers - 2.3%
Wal-Mart Stores, Inc.	68,300		3,283,181
Independent Power Producers & Energy Traders - 0.8%
NRG Energy, Inc.*	53,800		1,141,098
Industrial Conglomerates - 2.2%
McDermott International, Inc.*	145,800		3,158,028
Industrial Machinery - 2.4%
Dover Corp.	30,100		1,257,879
Harsco Corp.	8,278		194,533
Parker Hannifin Corp.	35,400		1,963,284
			3,415,696
Insurance Brokers - 1.6%
AON Corporation	55,300		2,052,736
Arthur J Gallagher & Co.	7,700		187,726
			2,240,462
Integrated Oil & Gas - 5.1%
Chevron Corp.	41,200		2,795,832
ConocoPhillips	45,900		2,253,231
Exxon Mobil Corp.	39,700		2,265,679
			7,314,742
Integrated Telecommunication Services - 1.1%
Windstream Corp.	155,800		1,645,248
IT Consulting & Other Services - 0.6%
Satyam Computer Services, Ltd. ADR	164,036		843,145
Managed Health Care - 0.7%
Aetna, Inc.	39,900		1,052,562
Movies & Entertainment - 2.0%
Time Warner, Inc.	98,466		2,846,652
Multi-Line Insurance - 0.9%
American Financial Group, Inc. 2	47,800		1,305,896
Multi-Utilities - 0.8%
Alliant Energy Corp.	15,752		499,968
Black Hills Corp.	22,000		626,340
			1,126,308
Office Services & Supplies - 0.1%
United Stationers, Inc.*	2,495		135,903
Oil & Gas Equipment & Services - 2.4%
Complete Production Services, Inc.*	16,200		231,660
Global Industries Ltd.*	203,002		911,479
Halliburton Co.	94,800		2,327,340
			3,470,479
Oil & Gas Exploration & Production - 2.3%
Chesapeake Energy Corp.	85,700		1,795,415
Goodrich Petroleum Corp.*	25,626		307,512
Gulfport Energy Corp.*	31,900		378,334
Petrohawk Energy Corp. 2,*	47,800		811,166
			3,292,427
Oil & Gas Refining & Marketing - 0.5%
Valero Energy Corp.	43,800		787,524
Oil & Gas Storage & Transportation - 2.3%
Southern Union Co.3	50,900		1,112,674
Williams Companies, Inc.	121,300		2,217,364
			3,330,038
Other Diversified Financial Services - 1.1%
JPMorgan Chase & Co.	42,800		1,566,908
Packaged Foods & Meats - 2.4%
Hormel Foods Corp. 2	42,100		1,704,208
JM Smucker Co.	23,300		1,403,126
Ralcorp Holdings, Inc.*	6,300		345,240
			3,452,574
Paper Packaging - 1.5%
Bemis Company, Inc.	52,000		1,404,000
Sonoco Products Co.	29,900		911,352
			2,315,352
Pharmaceuticals - 0.6%
Forest Laboratories, Inc.*	11,800		323,674
Merck & Company, Inc.	16,493		576,760
			900,434
Property & Casualty Insurance - 6.2%
Alleghany Corporation*	3,641		1,067,905
Berkshire Hathaway, Inc.*	54,800		4,367,011
Employers Holdings, Inc.	33,000		486,090
Hanover Insurance Group, Inc.	37,700		1,639,950
W.R. Berkley Corp.	58,300		1,542,618
			9,103,574
Publishing - 0.2%
Scholastic Corp.	12,700		306,324
Railroads - 2.0%
Union Pacific Corp.	42,200		2,933,322
Regional Banks - 2.7%
Associated Banc-Corp.	56,976		698,526
BB&T Corp.	62,400		1,641,744
Old National Bancorp	19,545		202,486
Regions Financial Corp.	203,000		1,335,740
			3,878,496
Reinsurance - 0.4%
Reinsurance Group of America, Inc.	11,370		519,723
Research & Consulting Services - 3.5%
Equifax, Inc.	153,600		4,310,017
ICF International, Inc.*	11,100		265,623

The accompanying notes are an integral part of the financial statements

69

Schedule of Investments	Series O
June 30, 2010 (Unaudited)	(All Cap Value Series)

	Shares	Value
COMMON STOCKS - 99.6% (continued)
Research & Consulting Services - 3.5% (continued)
Navigant Consulting, Inc.*	58,500	$	607,230
			5,182,870
Restaurants - 0.8%
Burger King Holdings, Inc.	46,466		782,487
Jack in the Box, lnc.*	20,000		389,000
			1,171,487
Semiconductor Equipment - 0.2%
FEI Co.*	13,300		262,143
Semiconductors - 1.1%
IXYS Corp.1,*	176,300		1,558,492
Specialty Chemicals - 0.4%
HB Fuller Co.	13,200		250,668
Zoltek Companies, lnc.*	30,900		261,723
			512,391
Specialty Stores - 0.8%
Cabela’s, lnc.*	79,237		1,120,411
Tobacco - 0.8%
Philip Morris International, Inc.	24,100		1,104,744
Trucking - 0.4%
Saia, lnc.*	39,000		585,000
Water Utilities - 0.2%
American Water Works Company, Inc.	15,000		309,000
TOTAL COMMON STOCKS (cost $162,031,342)		$	143,796,043
Total Investments - 99.6%3 (cost $162,031,342)		$	143,796,043
Cash & Other Assets, Less Liabilities - 0.4%			566,159
Total Net Assets - 100.0%		$	144,362,202

For federal income tax purposes the identified cost of investments owned at June 30, 2010 was $162,054.993.

ADR American Depositary Receipt

plc Public Limited Company

^* Non-income producing security

¹ Security is deemed illiquid. The total market value of illiquid securities is $2,999,809 (cost $3,649,444), or 2.1% of total net assets.

² Security is segregated as collateral for open written option contracts.

³ Unless otherwise indicated, the values of the securities of the Portfolio are determined based on Level 1 inputs.

The accompanying notes are an integral part of the financial statements

70

Series O

(All Cap Value Series)

Statement of Assets and Liabilities

June 30, 2010 (unaudited)

Assets:
Investments, at value*	$	143,796,043
Cash		754,028
Receivables:
Fund shares sold		43,798
Dividends		176,666
Prepaid expenses		1,002
Total assets		144,771,537
Liabilities:
Payable for:
Fund shares redeemed		138,138
Written options, at value (premiums received $382,468)		103,760
Management fees		88,339
Administration fees		12,176
Transfer agent/maintenance fees		2,100
Custodian fees		1,519
Directors’ fees		3,430
Professional fees		18,837
Security Investors		18,577
Other fees		22,459
Total liabilities		409,335
Net assets	$	144,362,202
Net assets consist of:
Paid in capital	$	191,092,991
Undistributed net investment income		471,232
Accumulated net realized loss on sale of investments		(29,245,430	)
Net unrealized depreciation in value of investments		(17,956,591	)
Net assets	$	144,362,202
Capital shares outstanding		7,959,521
Net asset value per share (net assets divided by shares outstanding)	$	18.14
*  Investments, at cost	$	162,031,342
Statement of Operations For Six Months Ended June 30, 2010 (Unaudited)
Investment Income:
Dividends (net of foreign withholding tax $-71)	$	1,198,953
Interest		528
Total investment income		1,199,481
Expenses:
Management fees		567,056
Administration fees		77,225
Transfer agent/maintenance fees		12,776
Custodian fees		5,386
Directors’ fees		7,159
Professional fees		11,321
Reports to shareholders		14,134
Other		33,192
Total expenses		728,249
Net investment income		471,232
Net Realized and Unrealized Gain (Loss):
Net realized gain (loss) during the period on:
Investments		1,308,649
Options written		86,014
Net realized gain		1,394,663
Net change in unrealized appreciation (depreciation) during the period on:
Investments		(9,786,234	)
Options written		310,986
Net change in unrealized appreciation (depreciation)		(9,475,248	)
Net realized and unrealized loss		(8,080,585	)
Net decrease in net assets resulting from operations	$	(7,609,353	)

The accompanying notes are an integral part of the financial statements

71

Statements of Changes in Net Assets	Series O
	(All Cap Value Series)

	Six Months Ended June  30, 2010 (unaudited)			Year Ended December 31, 2009
Increase (decrease) in net assets from operations:
Net investment income	$	471,232		$	1,474,436
Net realized gain (loss) during the period on investments		1,394,663			(12,222,667	)
Net change in unrealized appreciation (depreciation) during the period on investments		(9,475,248	)		51,461,750
Net increase (decrease) in net assets resulting from operations		(7,609,353	)		40,713,519
Capital share transactions:
Proceeds from sale of shares		18,679,582			18,436,280
Cost of shares redeemed		(28,625,840	)		(53,865,932	)
Net decrease from capital share transactions		(9,946,258	)		(35,429,652	)
Net increase (decrease) in net assets		(17,555,611	)		5,283,867
Net assets:
Beginning of period		161,917,813			156,633,946
End of period	$	144,362,202		$	161,917,813
Undistributed net investment income at end of period	$	471,232		$	1,474,436
Capital share activity:
Shares sold		947,187			1,210,470
Shares redeemed		(1,449,179	)		(3,632,455	)
Total capital share activity		(501,992	)		(2,421,985	)

The accompanying notes are an integral part of the financial statements

72

Financial Highlights	Series O
Selected data for each share of capital stock outstanding throughout each period	(All Cap Value Series	)

	Six Months Ended June  30, 2010a			2009			2008b,c			2007			2006			Year Ended December 31, 2005
Per Share Data
Net asset value, beginning of period	$	19.14		$	14.39		$	23.37		$	22.73		$	19.13		$	18.44
Income (loss) from investment operations:
Net investment incomed		0.06			0.16			0.34			0.34			0.31			0.23
Net gain (loss) on investments (realized and unrealized)		(1.06	)		4.59			(9.32	)		0.30			3.29			0.46
Total from investment operations		(1.00	)		4.75			(8.98	)		0.64			3.60			0.69
Net asset value, end of period	$	18.14		$	19.14		$	14.39		$	23.37		$	22.73		$	19.13
Total Returne		(5.22	%)		33.01	%		(38.43	%)		2.82	%		18.82	%		3.74	%
Ratios/Supplemental Data
Net assets, end of period (in thousands)	$	144,362		$	161,918		$	156,634		$	288,233		$	295,049		$	259,728
Ratios to average net assets:
Net investment income		0.58	%		1.00	%		1.72	%		1.42	%		1.41	%		1.29	%
Total expensesf		0.90	%		0.87	%		1.09	%		1.14	%		1.15	%		1.15	%
Net expensesg		0.90	%		0.85	%		1.07	%		1.14	%		1.15	%		1.15	%
Net expenses prior to custodian earnings credits and net of expense waivers		0.90	%		0.85	%		1.07	%		1.14	%		1.15	%		1.15	%
Portfolio turnover rate		12	%		19	%		124	%h		25	%		18	%		20	%

^a Unaudited figures for the six months ended June 30, 2010. Percentage amounts, except total return, have been annualized.

^b Security Global Investors, LLC (SGI) became the advisor of Series O effective August 15, 2008. Prior to August 15, 2008, SGI paid T.Rowe Price for sub-advisory services.

^c Effective August 15, 2008, the Series name became All Cap Value Series. Prior to August 15, 2008, the Series was known as the Equity Income Series.

^d Net investment income (loss) was computed using average shares outstanding throughout the period.

^e Total return does not take into account any of the expenses associated with an investment in variable insurance products offered by Security Benefit Life Insurance Company. If total return had taken into account these expenses, performance would have been lower. Shares of a series of SBL Fund are available only through the purchase of such products.

^f Total expense information reflects the expense ratios absent expense reductions by the Investment Manager and custodian earnings credits, as applicable.

^g Net expense information reflects the expense ratios after voluntary expense waivers, reimbursements and custodian earnings credits, as applicable.

^h Significant variation in the portfolio turnover rate is due to Investment Manager’s appointment of new portfolio manager for the Series.

The accompanying notes are an integral part of the financial statements

73

	Series P
Performance Summary	(High Yield Series)
June 30, 2010	(unaudited)

PERFORMANCE

$10,000 Over 10 Years

The chart above assumes a hypothetical $10,000 investment in Series P (High Yield Series) on June 30, 2000 and reflects the fees and expenses of Series P. The Barclays Capital U.S. Corporate High Yield Bond Index is an unmanaged index that tracks below investment grade bonds.

Average Annual Returns

Periods Ended 6-30-101	1 Year		5 Years		10 Years
Series P	29.16	%	8.16	%	7.85	%

¹ Performance figures do not reflect fees and expenses associated with an investment in variable insurance products offered by Security Benefit Life Insurance Company. If returns had taken into account these fees and expenses, performance would have been lower. Shares of a Series of SBL Fund are available only through the purchase of such products.

The performance data quoted above represents past performance. Past performance is not predictive of future performance. The investment return and principal value of an investment will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than their original cost.

Portfolio Comparison by Quality Ratings (Based on Standard & Poor’s Ratings)

AA	1.09	%
A	0.85
BBB	4.53
BB	23.80
B	36.87
CCC	19.32
CC	0.75
NR	5.79
Common Stocks	0.58
Preferred Stocks	0.42
Warrants	0.02
Cash & Other Assets, Less Liabilities	5.98
Total Net Assets	100.00	%

The accompanying notes are an integral part of the financial statements

74

Schedule of Investments	Series P
June 30, 2010 (Unaudited)	(High Yield Series	)

	Shares	Value
COMMON STOCKS - 0.6%
Air Freight & Logistics - 0.0%
Atlas Air Worldwide Holdings, Inc.*	57	$	2,708
Airlines - 0.0%
Delta Air Lines, Inc.*	2,225		26,143
Broadcasting - 0.0%
Adelphia Recovery Trust*	5,270		448
Cable & Satellite - 0.0%
Time Warner Cable, Inc.	101		5,260
Electronic Manufacturing Services - 0.0%
Viasystems Group, Inc.*	100		1,477
Health Care Equipment - 0.0%
MEDIQ, Inc.*	92		1
Mortgage REIT’s - 0.0%
Bimini Capital Management, Inc.1	10,740		10,096
Oil & Gas Equipment & Services - 0.1%
SemGroup Corporation2,3,*	4,398		105,552
Publishing - 0.2%
Dex One Corp.*	13,067		248,273
SuperMedia, Inc.*	513		9,383
			257,656
Regional Banks - 0.3%
CIT Group, Inc.*	7,613		257,776
TOTAL COMMON STOCKS (cost $1,263,609)		$	667,117
	Shares	Value
PREFERRED STOCKS - 0.4%
Department Stores - 0.3%
Sears Holdings Corporation
7.00%, 7/15/2042*	6,510	$	99,888
7.40%, 2/1/2043*	18,320		295,410
			395,298
Marine Ports & Services - 0.1%
U.S. Shipping Corporation2,3 ,*	24,529		61,323
Thrifts & Mortgage Finance - 0.0%
Federal Home Loan Mortgage Corporation
8.38%, 12/31/2012*	28,000		9,520
Federal National Mortgage Association
8.25%, 12/31/2010*	28,000		9,520
4.38%, 5/13/2011	7,000		3,640
			22,680
TOTAL PREFERRED STOCKS (cost $2,970,479)		$	479,301
	Shares		Value
WARRANT - 0.0%
SemGroup Corporation2,3	4,630	$	26,623
TOTAL WARRANT
(cost $23,150)		$	26,623

	Principal Amount		Value
CONVERTIBLE BONDS - 5.2%
Automobiles (including Replacement Parts) - 0.7%
Sonic Automotive, Inc.
5.00%, 20294	$	800,000	$	783,000
Brokerage - 0.7%
E*Trade Financial Corporation
0.00%, 20194		750,000		856,875
Financial Services - 1.0%
Forest City Enterprises, Inc.
5.00%, 20164,5,6		1,000,000		1,070,000
Health Care Services - 2.1%
Hologic, Inc.
2.00%, 20374,7		2,450,000		2,085,562
Invacare Corporation
4.13%, 20274		350,000		374,062
				2,459,624
Metals & Minerals - 0.7%
USEC, Inc.
3.00%, 20144		1,100,000		792,000
TOTAL CONVERTIBLE BONDS (cost $5,789,309)			$	5,961,499
		Principal Amount		Value
CORPORATE BONDS - 87.4%
Aerospace & Defense - 0.1%
Triumph Group, Inc.
8.00%, 20174		100,000		95,500
Airlines - 3.0%
Continental Airlines
7.03%, 20114		1,378,071		1,374,626
Continental Airlines
7.34%, 20142,3		531,044		507,147
Delta Air Lines, Inc.
7.90%, 20254,6,8		75,000		1,594
UAL
12.00%, 20164,5,6		1,500,000		1,567,499
				3,450,866
Automotive - 3.0%
Ford Motor Credit Company LLC
8.00%, 20164		1,000,000		1,022,591
8.13%, 20204		400,000		408,277
Metaldyne Corporation
11.00%, 20122,3,8		1,000,000		—
Motors Liquidation Company
8.38%, 20334,8		1,150,000		368,000
Penske Automotive Group, Inc.
7.75%, 20164		1,750,000		1,645,000
				3,443,868
Banking - 1.8%
FCB Capital Trust I
8.05%, 20284		75,000		72,108

The accompanying notes are an integral part of the financial statements

75

Schedule of Investments June 30, 2010 (Unaudited) Series P (High Yield Series)

	Principal Amount		Value
CORPORATE BONDS - 87.4% (continued)
Banking - 1.8% (continued)
Progress Capital Trust I
10.50%, 20274	$	700,000	$	720,768
Rabobank Capital Funding Trust II
5.26%, 20494,5,6,9		1,400,000		1,242,352
				2,035,228
Brokerage - 2.6%
E*Trade Financial Corporation
7.88%, 20154		2,150,000		1,924,250
Nuveen Investments, Inc.
10.50%, 20154		1,200,000		1,044,000
				2,968,250
Chemicals - 1.9%
Ineos Group Holdings plc
8.50%, 20164,5,6		2,000,000		1,560,000
Methanex Corporation
8.75%, 20124		5,000		5,175
PolyOne Corporation
6.58%, 20114		625,000		625,000
				2,190,175
Consumer Products - 0.8%
Hanesbrands, Inc.
4.12%, 20144,6,9		150,000		141,938
8.00%, 20164		750,000		760,312
Icon Health & Fitness
11.25%, 20122,3		25,000		17,500
				919,750
Electric - 2.8%
AES Red Oak LLC
8.54%, 20194		1,919,777		1,895,780
East Coast Power LLC
7.07%, 20124		37,807		38,223
NRG Energy, Inc.
8.50%, 20194		1,250,000		1,270,313
				3,204,316
Entertainment - 1.1%
Marquee Holdings, Inc.
9.51%, 20144		1,500,000		1,233,750
Environmental - 0.3%
Casella Waste Systems, Inc.
9.75%, 20134		400,000		400,000
Financial - Other - 4.7%
Ford Motor Credit Company LLC
7.00%, 20154		1,000,000		989,170
Harland Clarke Holdings Corporation
9.50%, 20154		1,500,000		1,365,000
Icahn Enterprises, LP
8.00%, 20184,5,6		250,000		242,500
International Lease Finance Corporation
5.65%, 20144		2,100,000		1,863,750
8.75%, 20174,5,6		1,000,000		947,500
				5,407,920
Financial Companies - Noncaptive Consumer - 5.0%
General Motors Acceptance Corporation
6.75%, 20144		650,000		628,410
8.00%, 20314		1,600,000		1,470,264
Nelnet, Inc.
7.40%, 20364,9		4,250,000		3,566,327
				5,665,001
Financial Companies - Noncaptive Diversified - 2.5%
CIT Group, Inc.
7.00%, 20134		88,448		84,689
7.00%, 20144		132,672		125,043
7.00%, 20154		132,672		122,390
7.00%, 20164		221,119		201,771
7.00%, 20174		2,559,568		2,303,612
				2,837,505
Food & Beverage - 2.2%
Bumble Bee Foods LLC
7.75%, 20154,5,6		200,000		201,250
Constellation Brands, Inc.
7.25%, 20174		1,000,000		1,013,750
Harry & David Operations Corporation
9.00%, 20134		900,000		589,500
Pinnacle Foods Finance LLC
9.25%, 20154,5,6		650,000		663,000
				2,467,500
Gaming - 4.3%
Boyd Gaming Corporation
7.13%, 20164		800,000		658,000
MGM Resorts International
8.50%, 20104		15,000		15,000
8.38%, 20114		55,000		55,550
6.75%, 20134,6		250,000		223,125
7.63%, 20174		500,000		391,250
11.13%, 20174		300,000		330,750
Mohegan Tribal Gaming Authority
7.13%, 20144		1,750,000		1,264,375
Pinnacle Entertainment, Inc.
7.50%, 20154		1,980,000		1,856,250
8.75%, 20204,5,6		200,000		185,250
				4,979,550
Health Care - 7.6%
Apria Healthcare Group, Inc.
11.25%, 20144,5,6		600,000		639,000
HCA, Inc.
9.25%, 20164		1,750,000		1,854,999
Healthsouth Corporation
8.13%, 20204		1,100,000		1,080,750
Invacare Corporation
9.75%, 20154,6		150,000		161,250
Psychiatric Solutions, Inc.
7.75%, 20154		1,250,000		1,281,250
Radnet Management, Inc.
10.38%, 20184,5,6		1,600,000		1,440,000
US Oncology, Inc.
10.75%, 20144		675,000		691,875
9.13%, 20174		1,100,000		1,130,250

The accompanying notes are an integral part of the financial statements

76

Schedule of Investments	Series P
June 30, 2010 (Unaudited)	(High Yield Series)

	Principal Amount		Value
CORPORATE BONDS - 87.4% (continued)
Health Care - 7.6% (continued)
Vanguard Health Holdings Company II LLC
8.00%, 20184	$	500,000	$	480,000
				8,759,374
Independent Energy - 3.3%
Energy XXI Gulf Coast, Inc.
10.00%, 20134		2,750,000		2,715,625
Hilcorp Energy I, LP
7.75%, 20154,5,6		250,000		246,250
Plains Exploration & Production Company
7.00%, 20174		500,000		477,500
Range Resources Corporation
7.38%, 20134		75,000		75,750
Southwestern Energy Company
7.50%, 20184		150,000		159,375
				3,674,500
Industrial - Other - 0.4%
Anixter, Inc.
5.95%, 20154		250,000		238,438
Mobile Services Group, Inc.
9.75%, 20144		200,000		204,500
				442,938
Insurance - Life - 0.1%
USI Holdings Corporation
9.75%, 20154,5,6		100,000		91,750
Insurance - Property & Casualty - 1.0%
HUB International Holdings, Inc.
10.25%, 20154,5,6		265,000		243,138
Nationwide Mutual Insurance Company
8.25%, 20314,5,6		900,000		952,395
				1,195,533
Media - Cable - 0.0%
CSC Holdings LLC
6.75%, 20124		42,000		43,470
Media - Non cable - 7.6%
Block Communications, Inc.
8.25%, 20154,5,6		1,125,000		1,094,062
Bonten Media Acquisition Company
9.00%, 20154,5,6		115,349		67,479
CMP Susquehanna Corporation
9.88%, 20144		1,200,000		411,000
Fisher Communications, Inc.
8.63%, 20144		250,000		245,625
GeoEye, Inc.
9.63%, 20154,5,6		1,900,000		1,938,000
Historic TW, Inc.
9.13%, 20134		30,000		34,916
ldearc, Inc.
8.00%, 20164,8		43,550		10,888
Intelsat S.A.
7.63%, 20124		1,000,000		1,008,750
Morris Publishing Group LLC
10.00%, 20144		548,593		518,420

Radio One, Inc.
6.38%, 20134	650,000	552,500
Reader’s Digest Association, Inc.
9.00%, 20174,8	150,000	1,500
Satelites Mexicanos S.A. de CV
9.28%, 20114 ,9	3,054,175	2,809,840
		8,692,980
Metals & Mining - 1.5%
Griffin Coal Mining Company Pty, Ltd.
9.50%, 20164,5,6,8	1,900,000	1,161,375
Noble Group, Ltd.
6.63%, 20154,5,6	550,000	562,375
		1,723,750
Natural Gas Pipelines - 0.2%
El Paso Corporation
8.25%, 20164	250,000	261,875
		261,875
Oil Field Services - 1.5%
Key Energy Services, Inc.
8.38%, 20144	1,250,000	1,242,188
Pemex Project Funding Master Trust
9.13%, 20104	10,000	10,113
Stallion Oilfield Services
9.75%, 20154,5,6,8	700,000	399,000
		1,651,301
Packaging - 0.8%
Reynolds Group Issuer, Inc.
7.75%, 20164,5,6	200,000	195,500
8.50%, 20184,5,6	750,000	735,938
		931,438
Paper - 3.2%
Appleton Papers, Inc.
10.50%, 20154,5,6	1,250,000	1,181,250
Sino-Forest Corporation
10.25%, 20144,5,6	2,275,000	2,417,188
		3,598,438
Pharmaceuticals - 2.3%
Catalent Pharma Solutions, Inc.
10.25%, 20154	2,805,985	2,672,701
Railroads - 0.5%
Kansas City Southern Railway
13.00%, 20134	500,000	600,000
Refining - 2.1%
Tesoro Corporation
6.50%, 20174	1,900,000	1,738,500
9.75%, 20194	200,000	207,500
Western Refining, Inc.
11.25%, 20174 ,5,6	500,000	455,000
		2,401,000
REIT’s - 4.7%
CommonWealth REIT
1.14%, 20114,9	1,624,000	1,614,592

The accompanying notes are an integral part of the financial statements

77

Schedule of Investments	Series P
June 30, 2010 (Unaudited)	(High Yield Series)

	Principal Amount		Value
CORPORATE BONDS - 87.4% (continued)
REIT’s - 4.7% (continued)
Forest City Enterprises, Inc.
7.63%, 20154	$	1,750,000	$	1,601,250
Hospitality Properties Trust
6.70%, 20184		2,150,000		2,185,193
				5,401,035
Retailers - 1.7%
Michaels Stores, Inc.
11.38%, 20164		200,000		208,000
Neiman Marcus Group, Inc.
10.38%, 20154		1,750,000		1,780,625
				1,988,625
Services - 5.8%
KAR Auction Services, Inc.
8.75%, 20144		2,300,000		2,311,500
Travelport LLC
9.88%, 20144		1,850,000		1,854,624
11.88%, 20164		150,000		151,500
West Corporation
9.50%, 20144		1,050,000		1,055,250
11.00%, 20164		1,250,000		1,271,875
				6,644,749
Technology - 4.2%
Amkor Technology, Inc.
9.25%, 20164		2,225,000		2,330,688
Seagate HDD Cayman
6.88%, 20204,5,6		500,000		475,000
Seagate Technology HDD Holdings
6.80%, 20164		1,400,000		1,358,000
SunGard Data Systems, Inc.
10.63%, 20154		600,000		641,250
				4,804,938
Telecommunications - Wireless - 2.7%
Clearwire Communications LLC
12.00%, 20154,5,6		500,000		495,625
Sprint Capital Corporation
6.90%, 20194		2,850,000		2,579,250
				3,074,875
Telecommunications - Wirelines - 0.1%
Qwest Corporation
7.88%, 20114		150,000		156,000
TOTAL CORPORATE BOND
(cost $95,747,875)			$	100,110,449
FOREIGN BONDS - 0.4%
Chile - 0.0%
Chile Government International Bond
7.13%, 20124		25,000		27,070
Mexico - 0.2%
Mexico Government International Bond
8.38%, 20114		85,000		88,485
7.50%, 20124		116,000		126,440
				214,925
Russia - 0.1%
Russian Ministry of Finance
3.00%, 20114		80,000		80,248
South Africa - 0.0%
South Africa Government International Bond
7.38%, 20124		35,000		38,171
Tunisia - 0.1%
Banque Centrale de Tunisie S.A.
7.38%, 20124		80,000		86,904
TOTAL FOREIGN BONDS
(cost $415,844)			$	447,318
Total Investments - 94.0%10
(cost $106,210,266)			$	107,692,307
Cash & Other Assets, Less Liabilities - 6.0%				6,844,323
Total Net Assets - 100.0%			$	114,536,630

For federal income tax purposes the identified cost of investments owned at June 30, 2010 was $104,220,874.

REIT Real Estate Investment Trust

plc Public Limited Company

* Non-income producing security

¹ Security is deemed illiquid. The total market value of illiquid securities is $10,096 (cost $468,845), or 0.0% of total net assets.

² Value determined based on Level 3 inputs.

³ Security was fair valued by the Valuation Committee at June 30, 2010. The total market value of fair valued securities amounts to $718,143, (cost $2,190,643) or 0.63% of total net assets.

⁴ Value determined based on Level 2 inputs.

⁵ Security was acquired through a private placement.

⁶ Security is a 144A or Section 4(2) security. The total market value of 144A or Section 4(2) securities is $22,997,583 (cost $23,145,577), or 20.1% of total net assets.

⁷ Security is a step up/step down bond. The coupon increases or decreases at regular intervals until the bond reaches full maturity.

⁸ Security is in default of interest and/or principal obligations.

⁹ Variable rate security. Rate indicated is rate effective at June 30, 2010.

¹⁰ Unless otherwise indicated, the values of the securities of the Portfolio are determined based on Level 1 inputs.

The accompanying notes are an integral part of the financial statements

78

	Series P (High Yield Series	)
Statement of Assets and Liabilities June 30, 2010 (Unaudited)

Assets:
Investments, at value*	$	107,692,307
Cash		5,897,525
Receivables:
Fund shares sold		10,246
Securities sold		10,596
Interest		1,757,208
Prepaid expenses		5,676
Total assets		115,373,558
Liabilities:
Payable for:
Fund shares redeemed		133,946
Securities purchased		603,750
Management fees		69,404
Administration fees		10,762
Transfer agent/maintenance fees		2,096
Professional fees		12,433
Other fees		4,537
Total liabilities		836,928
Net assets	$	114,536,630
Net assets consist of:
Paid in capital	$	105,437,289
Undistributed net investment income		7,784,387
Accumulated net realized loss on sale of investments		(167,087	)
Net unrealized appreciation in value of investments		1,482,041
Net assets	$	114,536,630
Capital shares outstanding		4,727,068
Net asset value per share (net assets divided by shares outstanding)	$	24.23
*       lnvestments, at cost	$	106,210,266
Statement of Operations For Six Months Ended June 30, 2010 (Unaudited)
Investment Income:
Dividends	$	23,045
Interest		6,060,978
Total investment income		6,084,023
Expenses:
Management fees		479,309
Administration fees		64,481
Transfer agent/maintenance fees		12,655
Custodian fees		3,978
Directors’ fees		6,329
Professional fees		7,116
Reports to shareholders		7,494
Other		2,615
Total expenses		583,977
Net investment income		5,500,046
Net Realized and Unrealized Gain (Loss):
Net realized gain (loss) during the period on:
Investments		2,478,299
Net realized gain		2,478,299
Net change in unrealized appreciation (depreciation) during the period on:
Investments		(2,217,534	)
Net change in unrealized appreciation (depreciation)		(2,217,534	)
Net realized and unrealized gain		260,765
Net increase in net assets resulting from operations	$	5,760,811

The accompanying notes are an integral part of the financial statements

79

Statements of Changes in Net Assets	Series P
	(High Yield Series)

	Six Months Ended June  30, 2010 (unaudited)			Year Ended December 31, 2009
Increase (decrease) in net assets from operations:
Net investment income	$	5,500,046		$	11,320,259
Net realized gain (loss) during the period on investments		2,478,299			(1,184,089	)
Net change in unrealized appreciation (depreciation) during the period on investments		(2,217,534	)		48,718,757
Net increase in net assets resulting from operations		5,760,811			58,854,927
Capital share transactions:
Proceeds from sale of shares		37,115,177			63,655,395
Cost of shares redeemed		(67,471,597	)		(66,597,004	)
Net decrease from capital share transactions		(30,356,420	)		(2,941,609	)
Net increase (decrease) in net assets		(24,595,609	)		55,913,318
Net assets:
Beginning of period		139,132,239			83,218,921
End of period	$	114,536,630		$	139,132,239
Undistributed net investment income at end of period	$	7,784,387		$	12,054,279
Capital share activity:
Shares sold		1,517,818			3,753,671
Shares redeemed		(2,788,283	)		(3,982,293	)
Total capital share activity		(1,270,465	)		(228,622	)

The accompanying notes are an integral part of the financial statements

80

Financial Highlights	Series P
Selected data for each share of capital stock outstanding throughout each period	(High Yield Series	)

	Six Months Ended June  30, 2010a			2009			2008			2007			2006			Year Ended December 31, 2005
Per Share Data Net asset value, beginning of period	$	23.20		$	13.37		$	19.18		$	18.79		$	16.90		$	16.28
Income (loss) from investment operations:
Net investment incomeb		1.03			1.89			1.57			1.38			0.90			1.09
Net gain (loss) on investments (realized and unrealized)		—	f		7.94			(7.38	)		(0.99	)		0.99			(0.47	)
Total from investment operations		1.03			9.83			(5.81	)		0.39			1.89			0.62
Net asset value, end of period	$	24.23		$	23.20		$	13.37		$	19.18		$	18.79		$	16.90
Total Returnc		4.44	%		72.75	%		(30.29	%)		2.08	%		11.18	%		3.81	%
Ratios/Supplemental Data
Net assets, end of period (in thousands)	$	114,537		$	139,131		$	83,219		$	115,301		$	106,144		$	77,971
Ratios to average net assets:
Net investment income		8.61	%		10.24	%		9.02	%		7.19	%		7.24	%		7.13	%
Total expensesd		0.91	%		0.94	%		0.94	%		0.92	%		0.93	%		0.97	%
Net expensese		0.91	%		0.94	%		0.94	%		0.92	%		0.93	%		0.97	%
Net expenses prior to custodian earnings credits and net of expense waivers		0.91	%		0.94	%		0.94	%		0.92	%		0.93	%		0.97	%
Portfolio turnover rate		49	%		46	%		33	%		50	%		52	%		64	%

^a Unaudited figures for the six months ended June 30, 2010. Percentage amounts, except total return, have been annualized.

^b Net investment income (loss) was computed using average shares outstanding throughout the period.

^c Total return does not take into account any of the expenses associated with an investment in variable insurance products offered by Security Benefit Life Insurance Company. If total return had taken into account these expenses, performance would have been lower. Shares of a series of SBL Fund are available only through the purchase of such products.

^d Total expense information reflects the expense ratios absent expense reductions by the Investment Manager and custodian earnings credits, as applicable.

^e Net expense information reflects the expense ratios after voluntary expense waivers, reimbursements and custodian earnings credits, as applicable.

^f Less than $.01 per share.

The accompanying notes are an integral part of the financial statements

81

	Series Q
Performance Summary	(Small Cap Value Series	)
June 30, 2010	(unaudited	)

PERFORMANCE

$10,000 Over 10 Years

The chart above assumes a hypothetical $10,000 investment in Series Q (Small Cap Value Series) on June 30, 2000 and reflects the fees and expenses of Series Q. The Russell 2000 Index is a capitalization-weighted index that measures the performance of the 2000 smallest companies in the Russell 3000 Index, which represents approximately 10% of the total market capitalization of the Russell 3000 Index.

Average Annual Returns

Periods Ended 6-30-101	1 Year		5 Years		10 Years
Series Q	22.20	%	5.85	%	11.64	%

¹ Performance figures do not reflect fees and expenses associated with an investment in variable insurance products offered by Security Benefit Life Insurance Company. If returns had taken into account these fees and expenses, performance would have been lower. Shares of a Series of SBL Fund are available only through the purchase of such products.

The performance data quoted above represents past performance. Past performance is not predictive of future performance. The investment return and principal value of an investment will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than their original cost.

Portfolio Composition by Sector

Consumer Discretionary	13.57	%
Consumer Staples	5.30
Energy	13.66
Financials	16.57
Health Care	1.94
Industrials	20.69
Information Technology	17.27
Materials	9.39
Utilities	1.28
Cash & Other Assets, Less Liabilities	0.33
Total Net Assets	100.00	%

The accompanying notes are an integral part of the financial statements

82

Schedule of Investments	Series Q
June 30, 2010 (Unaudited)	(Small Cap Value Series)

	Shares	Value
COMMON STOCKS - 99.7%
Aerospace & Defense - 6.6%
Ceradyne, Inc.*	28,000	$	598,360
DynCorp International, Inc.*	145,280		2,545,306
GeoEye, Inc.*	94,800		2,952,073
Orbital Sciences Corp.*	98,821		1,558,407
			7,654,146
Apparel Retail - 3.9%
Brown Shoe Company, Inc.	148,800		2,258,783
Chico’s FAS, Inc.	209,700		2,071,836
			4,330,619
Apparel, Accessories & Luxury Goods - 1.8%
Columbia Sportswear Co.	762		35,563
Maidenform Brands, Inc.*	100,500		2,046,180
			2,081,743
Asset Management & Custody Banks - 1.7%
Fifth Street Finance Corp.	177,000		1,952,310
Building Products - 1.0%
Trex Company, Inc.*	57,100		1,147,139
Casinos & Gaming - 1.1%
Penn National Gaming, Inc.*	53,700		1,240,470
Coal & Consumable Fuels - 1.2%
USEC, Inc.*	290,930		1,384,827
Communications Equipment - 1.5%
Harmonic, Inc.*	159,400		867,136
Symmetricom, Inc.1, *	159,189		810,272
			1,677,408
Computer & Electronics Retail - 0.7%
Conn’s, Inc.*	138,700		815,556
Computer Hardware - 1.1%
Silicon Graphics International Corp.*	180,416		1,277,345
Construction & Engineering - 1.6%
Insituform Technologies, Inc.*	88,000		1,802,240
Construction & Farm Machinery & Heavy Trucks - 1.5%
Force Protection, Inc.*	427,600		1,753,160
Consumer Finance - 0.2%
First Marblehead Corp.*	99,086		232,852
Data Processing & Outsourced Services - 0.5%
Euronet Worldwide, Inc.*	45,900		587,061
Diversified Chemicals - 0.8%
LSB Industries, Inc.*	69,300		922,383
Diversified REIT’s - 1.7%
Investors Real Estate Trust	214,089		1,890,406
Electrical Components & Equipment - 2.3%
General Cable Corp.*	51,000		1,359,150
LaBarge, Inc.*	89,300		1,018,913
UQM Technologies, Inc.*	55,342		187,609
			2,565,672
Electronic Components - 2.9%
Power-One, Inc.*	485,705		3,278,509
Electronic Manufacturing Services - 2.6%
Maxwell Technologies, Inc.1, *	159,274		1,815,724
Methode Electronics, Inc.	121,626		1,184,637
			3,000,361
Food Retail - 1.4%
Winn-Dixie Stores, Inc.*	168,400		1,623,376
Forest Products - 2.7%
Louisiana-Pacific Corp.2,*	453,700		3,035,253
General Merchandise Stores - 0.2%
Fred’s, Inc.	24,700		273,182
Health Care Services - 1.9%
Mednax, Inc.2,*	21,400		1,190,054
RehabCare Group, Inc.*	46,700		1,017,126
			2,207,180
Household Products - 1.0%
Orchids Paper Products Company*	82,974		1,078,662
Human Resources & Employment Services - 1.4%
Administaff, Inc.	66,300		1,601,808
Industrial Machinery - 0.9%
Flow International Corp.*	414,278		977,696
Industrial REIT’s - 0.6%
First Potomac Realty Trust	51,000		732,870
IT Consulting & Other Services - 3.2%
CACI International, Inc.*	38,400		1,631,232
Satyam Computer Services, Ltd.ADR	385,152		1,979,681
			3,610,913
Leisure Products - 1.8%
Smith & Wesson Holding Corp.*	490,500		2,006,145
Metal & Glass Containers - 1.5%
Myers Industries, Inc.	210,400		1,702,136
Mortgage REIT’s - 0.4%
Redwood Trust, Inc.	29,100		426,024
Multi-Line Insurance - 2.0%
Horace Mann Educators Corp.	148,600		2,273,580

The accompanying notes are an integral part of the financial statements

83

Schedule of Investments June 30, 2010 (Unaudited) Series Q (Small Cap Value Series)

	Shares	Value
COMMON STOCKS - 99.7% (continued)
Multi-Utilities - 1.3%
NorthWestern Corp.2	55,600	$	1,456,720
Office REIT’s - 0.6%
Lexington Realty Trust	108,000		649,080
Office Services & Supplies - 0.5%
United Stationers, Inc.*	9,591		522,422
Oil & Gas Drilling - 1.1%
Vantage Drilling Co.*	928,208		1,253,081
Oil & Gas Equipment & Services - 5.0%
Global Industries Ltd.*	464,200		2,084,258
Superior Well Services, lnc.*	64,500		1,078,440
Tesco Corp.*	203,900		2,503,892
			5,666,590
Oil & Gas Exploration & Production - 2.1%
Goodrich Petroleum Corp.*	70,826		849,912
Gulfport Energy Corp.*	86,535		1,026,305
Petrohawk Energy Corp.2,*	27,700		470,069
			2,346,286
Oil & Gas Refining & Marketing - 1.8%
Frontier Oil Corp.	150,900		2,029,605
Oil & Gas Storage & Transportation - 2.5%
Southern Union Co.2	128,900		2,817,754
Packaged Foods & Meats - 1.1%
Smart Balance, Inc.*	293,600		1,200,824
Paper Packaging - 0.8%
Bemis Company, Inc.	33,600		907,200
Paper Products - 0.5%
Clearwater Paper Corp.2,*	10,878		595,679
Personal Products - 1.8%
Elizabeth Arden, Inc.*	145,300		2,109,756
Property & Casualty Insurance - 3.7%
Employers Holdings, Inc.	76,000		1,119,480
Hanover Insurance Group, Inc.	69,800		3,036,300
			4,155,780
Publishing - 0.5%
Scholastic Corp.	25,200		607,824
Regional Banks - 4.6%
1st Source Corp.	81,900		1,385,748
Associated Banc-Corp.	127,487		1,562,990
Bancfirst Corp.	13,600		496,264
Heritage Financial Corp.*	46,800		700,596
Old National Bancorp	104,657		1,084,247
			5,229,845
Reinsurance - 1.1%
Reinsurance Group of America, Inc.	27,430		1,253,825
Research & Consulting Services - 3.3%
ICF International, lnc.*	85,700		2,050,801
Navigant Consulting, lnc.*	123,900		1,286,082
School Specialty, Inc.*	24,800		448,136
			3,785,019
Restaurants - 1.5%
Burger King Holdings, Inc.	101,900		1,715,996
Semiconductor Equipment - 0.5%
FEI Co.*	29,600		583,416
Semiconductors - 3.6%
IXYS Corp.l.*	219,179		1,937,542
Standard Microsystems Corp.*	87,269		2,031,623
			3,969,165
Specialty Chemicals - 3.1%
HB Fuller Co.	28,100		533,619
Landec Corp.1,*	292,900		1,725,181
Zoltek Companies, lnc.*	146,000		1,236,620
			3,495,420
Specialty Stores - 2.1%
Cabela’s, lnc.*	164,327		2,323,584
Technology Distributors - 1.4%
Insight Enterprises, lnc.*	122,300		1,609,468
Trucking - 1.5%
Saia, lnc.*	111,200		1,668,000
TOTAL COMMON STOCKS (cost $97,210,928)		$	113,095,371
Total Investments - 99.7%3 (cost $97,210,928)		$	113,095,371
Cash & Other Assets, Less Liabilities - 0.3%			374,416
Total Net Assets - 100.0%		$	113,469,787

For federal income tax purposes the identified cost of investments owned at June 30, 2010 was $97,264,140.

ADR American Depositary Receipt

* Non-income producing security

¹ Security is deemed illiquid. The total market value of illiquid securities is $6,288,719 (cost $4,873,208), or 5.5% of total net assets.

² Security is segregated as collateral for open written option contracts.

³ Unless otherwise indicated, the values of the securities of the Portfolio are determined based on Level 1 inputs.

The accompanying notes are an integral part of the financial statements

84

	Series Q (Small Cap Value Series)
Statement of Assets and Liabilities June 30, 2010 (Unaudited)

Assets:
Investments, at value*	$	113,095,371
Cash		1,202,416
Receivables:
Fund shares sold		75,606
Dividends		101,346
Prepaid expenses		1,739
Total assets		114,476,478
Liabilities:
Payable for:
Fund shares redeemed		520,287
Securities purchased		304,100
Written options, at value (premiums received $312,000)		52,453
Management fees		93,685
Administration fees		9,378
Transfer agent/maintenance fees		2,097
Custodian fees		960
Directors’ fees		74
Professional fees		9,444
Other fees		14,213
Total liabilities		1,006,691
Net assets	$	113,469,787
Net assets consist of:
Paid in capital	$	110,405,762
Accumulated net investment loss		(45,746	)
Accumulated net realized loss on sale of investments		(13,034,219	)
Net unrealized appreciation in value of investments		16,143,990
Net assets	$	113,469,787
Capital shares outstanding		4,223,867
Net asset value per share (net assets divided by shares outstanding)	$	26.86
*  Investments, at cost	$	97,210,928
Statement of Operations
For Six Months Ended June 30, 2010 (Unaudited)
Investment Income:
Dividends	$	649,175
Interest		315
Total investment income		649,490
Expenses:
Management fees		594,008
Administration fees		59,424
Transfer agent/maintenance fees		12,721
Custodian fees		4,531
Directors’ fees		5,985
Professional fees		8,916
Reports to shareholders		7,230
Other		2,421
Total expenses		695,236
Net investment loss		(45,746	)
Net Realized and Unrealized Gain (Loss):
Net realized gain (loss) during the period on:
Investments		8,568,005
Options written		99,872
Net realized gain		8,667,877
Net change in unrealized appreciation (depreciation) during the period on:
Investments		(11,555,123	)
Options written		263,875
Net change in unrealized appreciation (depreciation)		(11,291,248	)
Net realized and unrealized loss		(2,623,371	)
Net decrease in net assets resulting from operations	$	(2,669,117	)

The accompanying notes are an integral part of the financial statements

85

Statements of Changes in Net Assets Series Q (Small Cap Value Series)

	Six Months Ended June  30, 2010 (unaudited)			Year Ended December 31, 2009
Increase (decrease) in net assets from operations:
Net investment loss	$	(45,746	)	$	(23,794	)
Net realized gain (loss) during the period on investments		8,667,877			(21,084,587	)
Net change in unrealized appreciation (depreciation) during the period on investments		(11,291,248	)		65,219,440
Net increase (decrease) in net assets resulting from operations		(2,669,117	)		44,111,059
Capital share transactions:
Proceeds from sale of shares		21,360,726			39,411,373
Cost of shares redeemed		(30,681,745	)		(44,006,948	)
Net decrease from capital share transactions		(9,321,019	)		(4,595,575	)
Net increase (decrease) in net assets		(11,990,136	)		39,515,484
Net assets:
Beginning of period		125,459,923			85,944,439
End of period	$	113,469,787		$	125,459,923
Accumulated net investment loss at end of period	$	(45,746	)	$	—
Capital share activity:
Shares sold		738,459			1,768,681
Shares redeemed		(1,060,908	)		(2,079,337	)
Total capital share activity		(322,449	)		(310,656	)

The accompanying notes are an integral part of the financial statements

86

Financial Highlights Selected data for each share of capital stock outstanding throughout each period Series Q (Small Cap Value Series)

	Six Months Ended June  30, 2010a			2009b			2008			2007			2006			Year Ended December 31, 2005
Per Share Data
Net asset value, beginning of period	$	27.60		$	17.70		$	28.82		$	26.14		$	23.05		$	20.13
Income (loss) from investment operations:
Net investment income (loss)c		(0.01	)		(0.01	)		0.06			(0.12	)		(0.09	)		(0.11	)
Net gain (loss) on investments (realized and unrealized)		(0.73	)		9.91			(11.18	)		2.80			3.18			3.03
Total from investment operations		(0.74	)		9.90			(11.12	)		2.68			3.09			2.92
Net asset value, end of period	$	26.86		$	27.60		$	17.70		$	28.82		$	26.14		$	23.05
Total Returnd		(2.68	%)		55.93	%		(38.58	%)		10.25	%		13.41	%		14.51	%
Ratios/Supplemental Data
Net assets, end of period (in thousands)	$	113,470		$	125,460		$	85,944		$	166,871		$	159,852		$	144,166
Ratios to average net assets:
Net investment income (loss)		(0.07	%)		(0.02	%)		0.24	%		(0.42	%)		(0.36	%)		(0.58	%)
Total expensese		1.11	%		1.14	%		1.19	%		1.18	%		1.25	%		1.22	%
Net expensesf		1.11	%		1.14	%		1.18	%		1.18	%		1.24	%		1.22	%
Net expenses prior to custodian earnings credits and net of expense waivers		1.11	%		1.14	%		1.19	%		1.18	%		1.25	%		1.22	%
Portfolio turnover rate		44	%		126	%g		25	%		42	%		46	%		37	%

^a Unaudited figures for the six months ended June 30, 2010. Percentage amounts, except total return, have been annualized.

^b Security Global Investors. LLC (SGI) became the advisor of Series Q effective February 9, 2009. Prior to February 9, 2009, SGI paid Wells Capital Management, Inc. for sub-advisory services.

^c Net investment income (loss) was computed using average shares outstanding throughout the period.

^d Total return does not take into account any of the expenses associated with an investment in variable insurance products offered by Security Benefit Life Insurance Company. If total return had taken into account these expenses, performance would have been lower. Shares of a series of SBL Fund are available only through the purchase of such products.

^e Total expense information reflects the expense ratios absent expense reductions by the Investment Manager and custodian earnings credits, as applicable.

^f Net expense information reflects the expense ratios after voluntary expense waivers, reimbursements and custodian earnings credits, as applicable.

^g Significant variation in the portfolio turnover rate is due to Investment Manager’s appointment of new portfolio manager for the Series.

The accompanying notes are an integral part of the financial statements

87

Performance Summary	Series V
June 30, 2010	(Mid Cap Value Series	)
	(unaudited	)

PERFORMANCE

$10,000 Over 10 Years

The chart above assumes a hypothetical $10,000 investment in Series V (Mid Cap Value Series) on June 30, 2000 and reflects the fees and expenses of Series V. The Russell 2500 Value Index is an unmanaged index that measures the performance of securities of small-to-mid cap U.S. companies with greater-than-average value orientation.

Average Annual Returns
Periods Ended 6-30-101	1 Year		5 Years		10 Years
Series V	19.74	%	5.78	%	11.40	%

¹ Performance figures do not reflect fees and expenses associated with an investment in variable insurance products offered by Security Benefit Life Insurance Company. If returns had taken into account these fees and expenses, performance would have been lower. Shares of a Series of SBL Fund are available only through the purchase of such products.

The performance data quoted above represents past performance. Past performance is not predictive of future performance. The investment return and principal value of an investment will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than their original cost.

Portfolio Composition by Sector

Consumer Discretionary	11.55	%
Consumer Staples	4.87
Energy	9.53
Financials	16.04
Health Care	2.91
Industrials	21.09
Information Technology	13.83
Materials	6.97
Utilities	12.13
Convertible Bonds	0.89
Cash & Other Assets, Less Liabilities	0.19
Total Net Assets	100.00	%

The accompanying notes are an integral part of the financial statements

88

Schedule of Investments	Series V
June 30, 2010 (Unaudited)	(Mid Cap Value Series)

	Shares	Value
COMMON STOCKS - 98.9%
Aerospace & Defense - 4.1%
GeoEye, Inc.*	222,190	$	6,918,997
Orbital Sciences Corp.*	275,012		4,336,939
			11,255,936
Apparel Retail - 3.3%
Brown Shoe Company, Inc.	294,226		4,466,351
Chico’s FAS, Inc.	503,500		4,974,581
			9,440,932
Apparel, Accessories & Luxury Goods - 1.3%
Columbia Sportswear Co.	1,836		85,686
Maidenform Brands, Inc.*	180,000		3,664,800
			3,750,486
Asset Management & Custody Banks - 1.2%
Fifth Street Finance Corp.	319,014		3,518,724
Auto Parts & Equipment - 0.0%
HydroGen Corporation1, 2*	672,346		3,496
Building Products - 0.6%
Trex Company, Inc.*	91,300		1,834,217
Casinos & Gaming - 1.1%
Penn National Gaming, Inc.*	130,000		3,003,000
Coal & Consumable Fuels - 1.2%
USEC, Inc.*	698,070		3,322,813
Communications Equipment -1.0%
Symmetricom, Inc.1,*	546,680		2,782,601
Construction & Engineering - 4.8%
Insituform Technologies, Inc.*	212,000		4,341,760
Quanta Services, Inc.*	279,000		5,761,350
URS Corp.*	84,820		3,337,667
			13,440,777
Construction & Farm Machinery & Heavy Trucks - 0.8%
Force Protection, Inc.*	565,000		2,316,500
Consumer Finance - 0.3%
First Marblehead Corp.*	303,741		713,791
Data Processing & Outsourced Services - 3.8%
Computer Sciences Corp	206,600		9,348,650
Euronet Worldwide, Inc.*	114,100		1,459,339
			10,807,989
Diversified REIT’s - 1.0%
Investors Real Estate Trust	309,000		2,728,470
Electric Utilities - 6.0%
Allete, Inc.	105,251		3,603,794
Great Plains Energy, Inc.	238,305		4,055,951
Northeast Utilities	144,981		3,694,116
Pepco Holdings, Inc.	95,300		1,494,304
Westar Energy, Inc.	192,100		4,151,281
			16,999,446
Electrical Components & Equipment - 1.6%
General Cable Corp.*	155,000		4,130,750
UQM Technologies, Inc.*	141,588		479,983
			4,610,733
Electronic Components - 2.8%
Power-One, Inc.*	1,159,160		7,824,330

Electronic Manufacturing Services - 1.6%
Maxwell Technologies, Inc.1,*	408,700	4,659,180
Environmental & Facilities Services - 2.3%
Covanta Holding Corporation*	380,200	6,307,518
Forest Products - 1.4%
Louisiana-Pacific Corp.3,*	573,100	3,834,039
Gas Utilities - 2.0%
Atmos Energy Corp.	113,200	3,060,928
UGI Corp.	106,529	2,710,098
		5,771,026
General Merchandise Stores - 0.2%
Fred’s, Inc.	59,350	656,411
Health Care Equipment - 1.0%
Hologic, Inc.*	203,344	2,832,582
Health Care Services - 1.3%
Mednax, Inc.3,*	37,500	2,085,376
RehabCare Group, Inc.*	80,930	1,762,655
		3,848,031
Home Furnishings - 0.5%
Leggett & Plan, Inc.3	72,500	1,454,350
Housewares & Specialties - 0.5%
Fortune Brands, Inc.	32,700	1,281,186
Human Resources & Employment Services - 1.4%
Administaff, Inc.	161,000	3,889,760
Industrial Conglomerates - 2.0%
McDermott International, Inc.*	266,900	5,781,054
Industrial Machinery - 0.4%
Harsco Corp.	34,859	819,187
Thermoenergy Corporation1,*	905,961	415,836
		1,235,023
Insurance Brokers - 0.6%
Arthur J Gallagher & Co.	64,100	1,562,758
lT Consulting & Other Services - 1.7%
Satyam Computer Services, Ltd. ADR	928,594	4,772,973
Mortgage REIT’s - 0.6%
Bimini Capital Management, Inc.1	246,603	231,807

The accompanying notes are an integral part of the financial statements

89

Schedule of Investments June 30, 2010 (Unaudited) Series V (Mid Cap Value Series)

	Shares		Value
COMMON STOCKS - 98.9%(continued)
Mortgage REIT’s - 0.6%(continued)
Redwood Trust, Inc.		94,571	$	1,384,519
Multi-Line Insurance - 1.5%				1,616,326
American Financial Group, Inc.3		162,800		4,447,696
Multi-Utilities - 3.6%
Alliant Energy Corp.		73,976		2,347,998
Black Hills Corp.		120,000		3,416,400
NorthWestern Corp.3		167,000		4,375,400
				10,139,798
Office REIT’s - 0.6%
Lexington Realty Trust		262,000		1,574,620
Office Services & Supplies - 0.5%
United Stationers, Inc.*		24,940		1,358,482
Oil & Gas Drilling - 0.5%
Helmerich & Payne, Inc.		41,050		1,499,146
Oil & Gas Equipment & Services - 2.2%
Complete Production Services, Inc.*		73,860		1,056,198
Global Industries Ltd.*		1,172,749		5,265,643
				6,321,841
Oil & Gas Exploration & Production - 2.3%
Goodrich Petroleum Corp.*		144,487		1,733,844
Gulfport Energy Corp.*		211,927		2,513,454
Petrohawk Energy Corp.3 ,*		130,400		2,212,888
				6,460,186
Oil & Gas Refining & Marketing - 1.6%
Valero Energy Corp.		254,000		4,566,920
Oil & Gas Storage & Transportation - 1.7%
Southern Union Co.3		222,400		4,861,664
Packaged Foods & Meats - 4.9%
Del Monte Foods Co.		169,893		2,444,760
Hormel Foods Corp.3		98,900		4,003,472
JM Smucker Co.		95,700		5,763,054
Ralcorp Holdings, Inc.*		29,000		1,589,200
				13,800,486
Paper Packaging - 4.1%
Bemis Company, Inc.		268,400		7,246,800
Sonoco Products Co.		146,950		4,479,036
				11,725,836
Pharmaceuticals - 0.6%
Forest Laboratories, Inc.*		56,980		1,562,961
Property & Casualty Insurance - 6.6%
Alleghany Corporation*		14,749		4,325,882
Employers Holdings, Inc.		127,800		1,882,494
Hanover Insurance Group, Inc.		164,300		7,147,051
W.R. Berkley Corp.		213,800		5,657,148
				19,012,575
Publishing - 0.5%
Scholastic Corp.		60,800		1,466,496
Regional Banks - 2.5%
Associated Banc-Corp.		308,495		3,782,149
First Horizon National Corp.*		53,858		616,674
Old National Bancorp		280,114		2,901,981
				7,300,804
Reinsurance - 1.1%
Reinsurance Group of America, Inc.*		65,830		3,009,089
Research & Consulting Services - 2.0%
ICF International, Inc.*		114,400		2,737,592
Navigant Consulting, Inc.*		291,200		3,022,656
				5,760,248
Restaurants - 2.1%
Burger King Holdings, Inc.		219,035		3,688,549
Jack in the Box, Inc.*		112,700		2,192,015
				5,880,564
Semiconductor Equipment - 1.1%
FEI Co.*		72,400		1,427,004
Ultratech, Inc.*		105,800		1,721,366
				3,148,370
Semiconductors - 1.8%
IXYS Corp.1,*		590,800		5,222,672
Specialty Chemicals - 1.5%
HB Fuller Co.		68,100		1,293,219
Landec Corp.1,*		251,145		1,479,244
Zoltek Companies, Inc.*		170,000		1,439,900
				4,212,363
Specialty Stores - 2.0%
Cabela’s, Inc.*		410,431		5,803,494
Trucking - 0.7%
Saia, Inc.*		133,690		2,005,350
Water Utilities - 0.5%
American Water Works Company, Inc.		72,900		1,501,740
TOTAL COMMON STOCKS (cost $276,327,980)			$	280,499,859
	Shares		Value
WARRANT - 0.0%
Nova Biosource Fuels, Inc. $2.40, 7/5/20114		369,350	$	977
TOTAL WARRANT (cost $381,521)			$	977
	Principal Amount		Value
CONVERTIBLE BOND - 0.9%
Metals & Minerals - 0.9%
USEC, Inc. 3.00%, 20144	$	3,500,000	$	2,520,000
TOTAL CONVERTIBLE BOND (cost $3,500,000)			$	2,520,000

The accompanying notes are an integral part of the financial statements

90

Schedule of Investments June 30, 2010 (Unaudited) Series V (Mid Cap Value Series)

	Value
Total Investments - 99.8%5 (cost $280,209,501)	$	283,020,836
Cash & Other Assets, Less Liabilities - 0.2%		557,169
Total Net Assets - 100.0%	$	283,578,005

For federal income tax purposes the identified cost of investments owned at June 30, 2010 was $280,872,466.

ADR American Depositary Receipt

^* Non-income producing security

¹ Security is deemed illiquid. The total market value of illiquid Securities is $14,794,836 (cost $24,001,298), or 5.2% of total net assets.

² Investment in an affiliated issuer. See Note 6 in the Notes to Financial Statements.

³ Security is segregated as collateral for open written option contracts.

⁴ Value determined based on Level 2 inputs.

⁵ Unless otherwise indicated, the values of the securities of the Portfolio are determined based on Level 1 inputs.

The accompanying notes are an integral part of the financial statements

91

	Series V
	(Mid Cap Value Series)
Statement of Assets and Liabilities
June 30, 2010 (Unaudited)

Assets:
Investments in unaffiliated issues, at value*	$	283,017,340
Investments in affiliated issues, at value**		3,496
Total investments	$	283,020,836
Cash		950,071
Receivables:
Fund shares sold		439,735
Interest		26,107
Dividends		328,293
Prepaid expenses		3,725
Total assets		284,768,767
Liabilities:
Payable for:
Fund shares redeemed		207,843
Securities purchased		200,602
Written options, at value (premiums received $846,577)		314,662
Management fees		183,927
Administration fees		23,511
Transfer agent/maintenance fees		2,098
Custodian fees		1,975
Directors’ fees		732
Professional fees		21,924
Other liabilities		233,488
Total liabilities		1,190,762
Net assets	$	283,578,005
Net assets consist of:
Paid in capital	$	309,659,282
Undistributed net investment income		1,012,297
Accumulated net realized loss on sale of investments		(30,436,824	)
Net unrealized appreciation in value of investments		3,343,250
Net assets	$	283,578,005
Capital shares outstanding		5,956,871
Net asset value per share (net assets divided by shares outstanding)	$	47.61
*       lnvestments in unaffiliated issues, at cost	$	277,637,926
**     lnvestments in affiliated issues, at cost		2,571,575
Total cost	$	280,209,501
Statement of Operations
For Six Months Ended June 30, 2010 (Unaudited)
Investment Income:
Dividends	$	2,327,964
Interest		54,431
Total investment income		2,382,395
Expenses:
Management fees		1,149,042
Administration fees		145,800
Transfer agent/maintenance fees		12,800
Custodian fees		7,917
Directors’ fees		13,504
Professional fees		15,224
Reports to shareholders		20,184
Other		5,627
Total expenses		1,370,098
Net investment income		1,012,297
Net Realized and Unrealized Gain (Loss):
Net realized gain (loss) during the period on:
Investments		(2,348,334	)
Options written		356,388
Net realized loss		(1,991,946	)
Net change in unrealized appreciation (depreciation) during the period on:
Investments		(7,682,464	)
Options written		460,816
Net change in unrealized appreciation (depreciation)		(7,221,648	)
Net realized and unrealized loss		(9,213,594	)
Net decrease in net assets resulting from operations	$	(8,201,297	)

The accompanying notes are an integral part of the financial statements

92

Statements of Changes in Net Assets	Series V
	(Mid Cap Value Series	)

	Six Months  Ended June 30, 2010 (unaudited)			Year Ended December 31, 2009
Increase (decrease) in net assets from operations:
Net investment income	$	1,012,297		$	2,528,388
Net realized loss during the period on investments		(1,991,946	)		(28,031,935	)
Net change in unrealized appreciation (depreciation) during the period on investments		(7,221,648	)		121,414,946
Net increase (decrease) in net assets resulting from operations		(8,201,297	)		95,911,399
Capital share transactions:
Proceeds from sale of shares		32,939,468			45,841,863
Cost of shares redeemed		(45,890,408	)		(81,907,191	)
Net decrease from capital share transactions		(12,950,940	)		(36,065,328	)
Net increase (decrease) in net assets		(21,152,237	)		59,846,071
Net assets:		304,730,242			244,884,171
Beginning of period	$	283,578,005		$	304,730,242
End of period
Undistributed net investment income at end of period	$	1,012,297		$	2,528,388
Capital share activity:
Shares sold		657,016			1,210,944
Shares redeemed		(913,153	)		(2,183,072	)
Total capital share activity		(256,137	)		(972,128	)

The accompanying notes are an integral part of the financial statements

93

Financial Highlights	Series V
Selected data for each share of capital stock outstanding throughout each period	(Mid Cap Value Series	)

	Six Months Ended June  30, 2010a			2009			2008			2007			2006			Year Ended December 31, 2005
Per Share Data
Net asset value, beginning of period	$	49.05		$	34.08		$	47.64		$	46.78		$	40.79		$	35.10
Income (loss) from investment operations:
Net investment incomeb		0.17			0.38			0.49			0.36			0.44			0.14
Net gain (loss) on investments (realized and unrealized)		(1.61	)		14.59			(14.05	)		0.50			5.55			5.55
Total from investment operations		(1.44	)		14.97			(13.56	)		0.86			5.99			5.69
Net asset value, end of period	$	47.61		$	49.05		$	34.08		$	47.64		$	46.78		$	40.79
Total Returnc		(2.94	%)		43.93	%		(28.46	%)		1.84	%		14.66	%		16.2 1	%
Ratios/Supplemental Data
Net assets, end of period (in thousands)	$	283,578		$	304,730		$	244,884		$	409,211		$	447,271		$	384,494
Ratios to average net assets:
Net investment income		0.66	%		0.97	%		1.15	%		0.73	%		1.01	%		0.44	%
Total expensesd		0.89	%		0.91	%		0.91	%		0.89	%		0.89	%		0.90	%
Net expensese		0.89	%		0.91	%		0.9 1	%		0.89	%		0.89	%		0.90	%
Net expenses prior to custodian earnings credits and net of expense waivers		0.89	%		0.91	%		0.91	%		0.89	%		0.89	%		0.90	%
Portfolio turnover rate		30	%		29	%		56	%		45	%		42	%		29	%

^a Unaudited figures for the six months ended June 30, 2010. Percentage amounts, except total return, have been annualized.

^b Net investment income (loss) was computed using average shares outstanding throughout the period.

^c Total return does not take into account any of the expenses associated with an investment in variable insurance products offered by Security Benefit Life Insurance Company. If total return had taken into account these expenses, performance would have been lower. Shares of a series of SBL Fund are available only through the purchase of such products.

^d Total expense information reflects the expense ratios absent expense reductions by the Investment Manager and custodian earnings credits, as applicable.

^e Net expense information reflects the expense ratios after voluntary expense waivers, reimbursements and custodian earnings credits, as applicable.

The accompanying notes are an integral part of the financial statements

94

Performance Summary	Series X
June 30, 2010	(Small Cap Growth Series	)
	(unaudited	)

PERFORMANCE

$10,000 Over 10 Years

The chart above assumes a hypothetical $10,000 investment in Series X (Small Cap Growth Series) on June 30, 2000 and reflects the fees and expenses of Series X. The Russell 2000 Growth Index measures the performance of those Russell 2000 companies with higher price-to-book ratios and higher forecasted growth values.

Average Annual Returns

Periods Ended 6-30-101	1 year		5 years		10 years
Series X	23.91	%	(3.46	%)	(4.15	%)

¹ Performance figures do not reflect fees and expenses associated with an investment in variable insurance products offered by Security Benefit Life Insurance Company. If returns had taken into account these fees and expenses, performance would have been lower. Shares of a Series of SBL Fund are available only through the purchase of such products.

The performance data quoted above represents past performance. Past performance is not predictive of future performance. The investment return and principal value of an investment will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than their original cost.

Portfolio Composition by Sector

Consumer Discretionary	16.76	%
Consumer Staples	2.61
Energy	4.43
Financials	7.04
Health Care	18.40
Industrials	16.01
Information Technology	24.51
Materials	3.90
Utilities	2.23
Exchange Traded Funds	1.24
Cash & Other Assets, Less Liabilities	2.87
Total Net Assets	100.00	%

The accompanying notes are an integral part of the financial statements

95

Schedule of Investments	Series X
June 30, 2010 (Unaudited)	(Small Cap Growth Series)

	Shares	Value
COMMON STOCKS - 97.1%
Advertising - 0.8%
Lamar Advertising Co.*	10,350	$	253,782
Aerospace & Defense - 2.3%
BE Aerospace, Inc.*	21,730		552,594
DigitalGlobe, Inc.*	8,180		215,134
			767,728
Aluminum - 0.9%
Kaiser Aluminum Corp.	8,920		309,256
Apparel, Accessories & Luxury Goods - 2.8%
Hanesbrands, Inc.*	19,000		457,139
Lululenon Athletica, Inc.*	6,420		238,952
Oxford Industries, Inc.	11,850		248,021
			944,112
Application Software - 8.5%
Cadence Design Systems, Inc.*	88,050		509,810
Informatica Corp.*	18,630		444,884
Nuance Communications, Inc.*	29,350		438,783
Smith Micro Software, Inc.*	34,050		323,816
SolarWinds, Inc.*	15,000		240,600
Solera Holdings, Inc.	17,900		647,979
VanceInfo Technologies, Inc. ADR*	7,250		168,780
			2,774,652
Auto Parts & Equipment - 0.6%
Gentex Corp.	11,870		213,423
Automotive Retail - 0.8%
Monro Muffler Brake, Inc.	6,250		247,063
Biotechnology - 3.2%
Halozyme Therapeutics, Inc.*	29,310		206,342
Human Genome Sciences, Inc.*	6,700		151,822
Martek Biosciences Corp.*	28,550		676,921
			1,035,085
Casinos & Gaming - 2.7%
Penn National Gaming, Inc.*	22,715		524,716
WMS Industries, Inc.*	8,850		347,362
			872,078
Coal & Consumable Fuels - 1.4%
Alpha Natural Resources, Inc.*	13,200		447,084
Communications Equipment - 3.7%
CommScope, Inc.*	14,770		351,083
InterDigital, Inc.*	19,930		492,072
Riverbed Technology, Inc.*	12,750		352,155
			1,195,310
Computer Storage & Peripherals - 1.7%
QLogic Corp.*	33,505		556,853
Construction & Engineering - 1.4%
Aecom Technology Corp.*	19,540		450,592
Construction & Farm Machinery & Heavy Trucks - 2.2%
Bucyrus International, Inc.	7,920		375,804
Wabtec Corp.	8,650		345,049
			720,853
Consumer Electronics - 0.9%
Harman International Industries, Inc.*	9,650		288,439
Consumer Finance - 0.8%
Cardtronics, Inc.*	20,700		268,272
Data Processing & Outsourced Services - 1.0%
Alliance Data Systems Corp.*	5,740		341,645
Diversified Chemicals - 1.1%
Solutia, Inc.*	26,800		351,080
Electric Utilities - 1.1%
ITC Holdings Corp.	6,950		367,725
Electrical Components & Equipment - 3.2%
Regal-Beloit Corp.	10,100		563,377
Roper Industries, Inc.	8,880		496,925
			1,060,302
Electronic Equipment & Instruments - 1.8%
FLIR Systems, Inc.*	11,750		341,808
Rofin-Sinar Technologies, Inc.*	11,900		247,758
			589,566
Exchange Traded Funds - 1.2%
iShares Russell 2000 Growth Index Fund	6,100		406,138
Health Care Equipment - 6.1%
Angiodynamics, Inc.*	9,400		138,650
Hill-Rom Holdings, Inc.	24,000		730,319
Integra LifeSciences Holdings Corp.*	11,230		415,510
Natus Medical Group, Inc.*	24,550		399,920
Wright Medical Group, Inc.*	20,350		338,014
			2,022,413
Health Care Facilities - 0.9%
Health Management Associates, Inc.*	36,500		283,605
Health Care Services - 2.4%
CardioNet, Inc.*	30,915		169,414
Clarient, Inc.*	67,050		206,514
Mednax, Inc.*	7,450		414,295
			790,223
Health Care Supplies - 1.5%
Haemonetics Corp.*	9,035		483,553
Home Furnishings - 1.2%
Tempur-Pedic International, Inc.*	13,100		402,825
Homefurnishing Retail - 0.9%
Select Comfort Corp.*	32,200		281,750
Hotels, Resorts & Cruise Lines - 0.7%
Gaylord Entertainment Co.*	10,550		233,050

The accompanying notes are an integral part of the financial statements

96

Schedule of Investments	Series X
June 30, 2010 (Unaudited)	(Small Cap Growth Series)

	Shares	Value
COMMON STOCKS - 97.1% (continued)
Housewares & Specialties - 2.1%
Jarden Corp.	25,830	$	694,052
Human Resources & Employment Services - 0.8%
Towers Watson & Co.	6,550		254,468
Industrial Machinery - 4.0%
IDEX Corp.	17,930		512,260
Pall Corp.	8,185		281,318
Pentair, Inc.	16,300		524,860
			1,318,438
Investment Banking & Brokerage - 2.4%
Knight Capital Group, Inc.*	30,350		418,526
Stifel Financial Corp.*	9,150		397,019
			815,545
Leisure Facilities - 2.5%
Life Time Fitness, Inc.*	13,805		438,861
Vail Resorts, lnc.*	11,085		386,977
			825,838
Life Sciences Tools & Services - 1.3%
Parexel International Corp.*	19,750		428,180
Metal & Glass Containers - 1.3%
Silgan Holdings, Inc.	15,200		431,376
Multi-Line Insurance - 1.7%
HCC Insurance Holdings, Inc.	21,950		543,482
Multi-Utilities - 1.1%
NorthWestern Corp.	13,920		364,704
Office Services & Supplies - 0.7%
Interface, Inc.	21,700		233,058
Oil & Gas Equipment & Services - 2.2%
Oil States International, Inc.*	11,600		459,128
Superior Energy Services, Inc.*	15,590		291,065
			750,193
Oil & Gas Exploration & Production - 0.8%
Bill Barrett Corp.*	8,400		258,468
Packaged Foods & Meats - 2.6%
Flowers Foods, Inc.	11,930		291,450
J&J Snack Foods Corp.	5,100		214,710
TreeHouse Foods, Inc.*	7,700		351,582
			857,742
Pharmaceuticals - 3.0%
Endo Pharmaceuticals Holdings, Inc.*	16,950		369,849
Obagi Medical Products, Inc.*	16,100		190,302
Perrigo Co.	7,430		438,890
			999,041
Railroads - 1.1%
Kansas City Southern*	10,005		363,682
Regional Banks - 2.1%
Commerce Bancshares, Inc.	9,250		332,908
TCF Financial Corp.	21,180		351,799
			684,707
Research & Consulting Services - 0.3%
ICF International, Inc.*	3,700		88,541
Restaurants - 0.8%
Einstein Noah Restaurant Group, Inc.*	14,200		153,218
McCormick & Schmick’s Seafood Restaurants, Inc.*	12,750		95,115
			248,333
Semiconductor Equipment - 3.6%
Lam Research Corp.*	9,950		378,697
Nanometrics, Inc.*	32,300		325,907
Veeco Instruments, Inc.*	13,900		476,492
			1,181,096
Semiconductors - 1.0%
ON Semiconductor Corp.*	52,965		337,917
Steel - 0.6%
Cliffs Natural Resources, Inc.	4,000		188,640
Systems Software - 1.7%
Rovi Corp.*	14,600		553,486
Technology Distributors - 1.6%
SYNNEX Corp.*	20,250		518,805
TOTAL COMMON STOCKS (cost $29,460,210)		$	31,898,249
Total Investments - 97.1%1 (cost $29,460,210)		$	31,898,249
Cash & Other Assets, Less Liabilities - 2.9%			943,385
Total Net Assets - 100.0%		$	32,841,634

For federal income tax purposes the identified cost of investments owned at June 30, 2010 was $29,550,406.

ADR American Depositary Receipt

* Non-income producing security

¹ Unless otherwise indicated, the values of the securities of the Portfolio are determined based on Level 1 inputs.

The accompanying notes are an integral part of the financial statements

97

	Series X
	(Small Cap Growth Series	)
Statement of Assets and Liabilities
June 30, 2010 (Unaudited)

Assets:
Investments, at value*	$	31,898,249
Cash		956,175
Receivables:
Fund shares sold		31,365
Dividends		10,236
Prepaid expenses		395
Total assets		32,896,420
Liabilities:
Payable for:
Fund shares redeemed		8,067
Management fees		23,763
Administration fees		2,711
Transfer agent/maintenance fees		2,097
Custodian fees		1,673
Directors’ fees		52
Professional fees		8,103
Other fees		8,320
Total liabilities		54,786
Net assets	$	32,841,634
Net assets consist of:
Paid in capital	$	56,614,334
Accumulated net investment loss		(113,117	)
Accumulated net realized loss on sale of investments		(26,097,622	)
Net unrealized appreciation in value of investments		2,438,039
Net assets	$	32,841,634
Capital shares outstanding		2,304,504
Net asset value per share (net assets divided by shares outstanding)	$	14.25
*  Investments, at cost	$	29,460,210

Statement of Operations For Six Months Ended June 30, 2010 (Unaudited)
Investment Income:
Dividends	$	79,125
Interest		1,123
Total investment income		80,248
Expenses:
Management fees		149,569
Administration fees		16,936
Transfer agent/maintenance fees		12,728
Custodian fees		3,186
Directors’ fees		1,695
Professional fees		5,112
Reports to shareholders		3,419
Other		720
Total expenses		193,365
Net investment loss		(113,117	)
Net Realized and Unrealized Gain (Loss):
Net realized gain (loss) during the period on:
Investments		4,163,816
Net realized gain		4,163,816
Net change in unrealized appreciation (depreciation) during the period on:
Investments		(4,595,832	)
Net change in unrealized appreciation (depreciation)		(4,595,832	)
Net realized and unrealized loss		(432,016	)
Net decrease in net assets resulting from operations	$	(545,133	)

The accompanying notes are an integral part of the financial statements

98

Statements of Changes in Net Assets	Series X
	(Small Cap Growth Series	)

	Six Months Ended June  30, 2010 (unaudited)			Year Ended December 31, 2009
Increase (decrease) in net assets from operations:
Net investment loss	$	(113,117	)	$	(94,092	)
Net realized gain during the period on investments		4,163,816			3,898,637
Net change in unrealized appreciation (depreciation) during the period on investments		(4,595,832	)		5,705,272
Net increase (decrease) in net assets resulting from operations		(545,133	)		9,509,817
Capital share transactions:
Proceeds from sale of shares		3,748,490			6,072,551
Cost of shares redeemed		(5,757,645	)		(10,470,581	)
Net decrease from capital share transactions		(2,009,155	)		(4,398,030	)
Net increase (decrease) in net assets		(2,554,288	)		5,111,787
Net assets:
Beginning of period		35,395,922			30,284,135
End of period	$	32,841,634		$	35,395,922
Accumulated net investment loss at end of period	$	(113,117	)	$	—
Capital share activity:
Shares sold		246,865			541,403
Shares redeemed		(380,580	)		(924,076	)
Total capital share activity		(133,715	)		(382,673	)

The accompanying notes are an integral part of the financial statements

99

Financial Highlights Selected data for each share of capital stock outstanding throughout each period Series X (Small Cap Growth Series)

	Six Months Ended  June 30, 2010a			2009			2008b			2007			2006			Year Ended December 31, 2005
Per Share Data
Net asset value, beginning of period	$	14.52		$	10.74		$	20.35		$	19.27		$	18.33		$	17.05
Income (loss) from investment operations:
Net investment lossc		(0.05	)		(0.04	)		(0.12	)		(0.17	)		(0.13	)		(0.15	)
Net gain (loss) on investments (realized and unrealized)		(0.22	)		3.82			(9.49	)		1.25			1.07			1.43
Total from investment operations		(0.27	)		3.78			(9.61	)		1.08			0.94			1.28
Net asset value, end of period	$	14.25		$	14.52		$	10.74		$	20.35		$	19.27		$	18.33
Total Returnd		(1.86	%)		35.20	%		(47.22	%)		5.60	%		5.13	%		7.51	%
Ratios/Supplemental Data
Net assets, end of period (in thousands)	$	32,842		$	35,396		$	30,284		$	81,833		$	92,789		$	90,671
Ratios to average net assets:
Net investment loss		(0.64	%)		(0.30	%)		(0.80	%)		(0.82	%)		(0.66	%)		(0.85	%)
Total expensese		1.10	%		1.10	%		1.24	%		1.20	%		1.20	%		1.19	%
Net expensesf		1.10	%		1.10	%		1.24	%		1.20	%		1.19	%		1.18	%
Net expenses prior to custodian earnings credits and net of expense waivers		1.10	%		1.10	%		1.24	%		1.20	%		1.20	%		1.19	%
Portfolio turnover rate		92	%		100	%		209	%g		137	%		149	%		116	%

^a Unaudited figures for the six months ended June 30, 2010. Percentage amounts, except total return, have been annualized.

^b Security Global Investors, LLC (SGI) became the advisor of Series X effective December 1, 2008. Prior to December 1, 2008, SGI paid RS Investments, Inc. for sub-advisory services.

^c Net investment income (loss) was computed using average share outstanding throughout the period.

^d Total return does not take into account any of the expenses associated with an investment in variable insurance products offered by Security Benefit Life Insurance Company. If total return had taken into account these expenses, performance would have been lower. Shares of a series of SBL Fund are available only through the purchase of such products.

^e Total expense information reflects the expense ratios absent expense reductions by the Investment Manager and custodian earnings credits, as applicable.

^f Net expense information reflects the expense ratios after voluntary expense waivers, reimbursements and custodian earnings credits, as applicable.

^g Significant variation in the portfolio turnover rate is due to Investment Manager’s appointment of new portfolio manager for the Series.

The accompanying notes are an integral part of the financial statements

100

	Series Y
Performance Summary	(Large Cap Concentrated Growth Series	)
June 30, 2010	(Unaudited	)

PERFORMANCE

$10,000 Over 10 Years

The chart above assumes a hypothetical $10,000 investment in Series Y (Large Cap Concentrated Growth Series) on June 30, 2000 and reflects the fees and expenses of Series Y. The Russell 1000 Growth Index is an unmanaged capitalization–weighted index which includes stocks incorporated in the United States and its territories and measures the performance of the Russell 1000 companies with higher price-to-book ratios and higher forecasted growth values.

Average Annual Returns

Periods Ended 6-30-101	1 Year		5 Years		10 Years
Series Y	14.51	%	(2.23	%)	(4.00	%)

¹ Performance figures do not reflect fees and expenses associated with an investment in variable insurance products offered by Security Benefit Life Insurance Company. If returns had taken into account these fees and expenses, performance would have been lower. Shares of a Series of SBL Fund are available only through the purchase of such products.

The performance data quoted above represents past performance. Past performance is not predictive of future performance. The investment return and principal value of an investment will fluctuate so that an investor’s shares, when redeemed, may be wroth more or less than their original cost.

Portfolio Composition by Sector

Consumer Discretionary	21.14	%
Consumer Staples	6.20
Energy	5.95
Financials	5.76
Health Care	12.67
Industrials	16.16
Information Technology	26.50
Materials	2.85
Cash & Other Assets, Less Liabilities	2.77
Total Net Assets	100.00	%

The accompanying notes are an integral part of the financial statements

101

Schedule of Investments	Series Y
June 30, 2010 (Unaudited)	(Large Cap Concentrated Growth Series	)

	Shares	Value
COMMON STOCKS - 97.2%
Aerospace & Defense - 3.1%
Boeing Co.	18,350	$	1,151,463
Auto Parts & Equipment - 3.0%
Johnson Controls, Inc.	42,200		1,133,914
Biotechnology - 6.1%
Amgen, Inc.*	22,140		1,164,564
Celgene Corp.*	21,450		1,090,089
			2,254,653
Communications Equipment - 3.4%
Motorola, Inc.*	194,180		1,266,054
Computer Hardware - 9.1%
Apple, Inc.*	7,815		1,965,706
Hewlett-Packard Co.	33,550		1,452,044
			3,417,750
Computer Storage & Peripherals - 4.4%
EMC Corp.*	89,830		1,643,889
Construction & Farm Machinery & Heavy Trucks - 3.4%
Cummins, Inc.	19,250		1,253,752
Department Stores - 3.0%
Kohl’s Corp.*	23,840		1,132,400
Diversified Banks - 5.8%
U.S. Bancorp	49,000		1,095,150
Wells Fargo & Co.	41,100		1,052,160
			2,147,310
Diversified Chemicals - 2.9%
Dow Chemical Co.	44,765		1,061,826
Electrical Components & Equipment - 3.3%
Cooper Industries plc	28,140		1,238,160
Food Distributors - 3.1%
Sysco Corp.	40,250		1,149,943
Health Care Distributors - 3.2%
McKesson Corp.	17,700		1,188,732
Home Improvement Retail - 3.1%
Home Depot, Inc.	41,750		1,171,923
Hotels, Resorts & Cruise Lines - 2.4%
Royal Caribbean Cruises Ltd.*	39,750		905,108
Industrial Congiomerates - 3.3%
3M Co.	15,550		1,228,295
Integrated Oil & Gas - 3.3%
Occidental Petroleum Corp.	16,120		1,243,658
Internet Retail - 3.4%
Amazon.com, Inc.*	11,250		1,229,174
Movies & Entertainment - 3.1%
Walt Disney Co.	36,250		1,141,875
Oil & Gas Equipment & Services - 2.6%
Schlumberger Ltd.	17,550		971,217
Pharmaceuticals - 3.4%
Teva Pharmaceutical Industries Ltd. ADR	24,520		1,274,795
Railroads - 3.1%
CSX Corp.	23,100		1,146,453
Restaurants - 3.1%
McDonald’s Corp.	17,600		1,159,312
Semiconductor Equipment - 2.9%
Lam Research Corp.*	28,850		1,098,031
Semiconductors - 2.7%
Marvell Technology Group Ltd.*	63,400		999,184
Soft Drinks - 3.1%
PepsiCo, Inc.	19,050		1,161,097
Systems Software - 3.9%
Oracle Corp.	67,500		1,448,550
TOTAL COMMON STOCKS (cost $37,940,977)		$	36,218,518
Total Investments - 97.2%1 (cost $37,940,977)			$36,218,518
Cash & Other Assets, Less Liabilities - 2.8%			1,030,825
Total Net Assets - 100.0%			$37,249,343

For federal income tax purposes the identified cost of investments owned at June 30, 2010 was $38,452,136.

ADR American Depositary Receipt

Plc Public Limited Company

* Non-income producing security

¹ Unless otherwise indicated, the values of the securities of the Portfolio are determined based on Level 1 inputs.

The accompanying notes are an integral part of the financial statements

102

Series Y

(Large Cap Concentrated Growth Series)

Statement of Assets and Liabilities

June 30, 2010 (Unaudited)

Assets:
Investments, at value*	$	36,218,518
Cash		1,099,303
Receivables:
Fund shares sold		41,215
Securities sold		1,366,845
Dividends		47,982
Prepaid expenses		308
Total assets		38,774,171
Liabilities:
Payable for:
Fund shares redeemed		13,261
Securities purchased		1,467,000
Management fees		24,538
Administration fees		3,162
Transfer agent/maintenance fees		2,097
Custodian fees		126
Directors’ fees		653
Professional fees		8,533
Other fees		5,458
Total liabilities		1,524,828
Net assets	$	37,249,343
Net assets consist of:
Paid in capital	$	67,687,026
Undistributed net investment income		77,455
Accumulated net realized loss on sale of investments		(28,792,679	)
Net unrealized depreciation in value of investments		(1,722,459	)
Net assets	$	37,249,343
Capital shares outstanding		4,719,609
Net asset value per share (net assets divided by shares outstanding)	$	7.89
*  Investments, at cost	$	37,940,977
Statement of Operations For Six Months Ended June 30, 2010 (Unaudited)
Investment Income:
Dividends (net of foreign withholding tax $165)	$	276,108
Interest		163
Total investment income		276,271
Expenses:
Management fees		155,122
Administration fees		19,725
Transfer agent/maintenance fees		12,721
Custodian fees		1,389
Directors’ fees		1,516
Professional fees		4,481
Reports to shareholders		3,149
Other		713
Total expenses		198,816
Net investment income		77,455
Net Realized and Unrealized Gain (Loss):
Net realized gain (loss) during the period on:
Investments		3,641,696
Net realized gain		3,641,696
Net change in unrealized appreciation (depreciation) during the period on:
Investments		(6,783,000	)
Net change in unrealized appreciation (depreciation)		(6,783,000	)
Net realized and unrealized loss		(3,141,304	)
Net decrease in net assets resulting from operations	$	(3,063,849	)

The accompanying notes are an integral part of the financial statements

103

Statements of Changes in Net Assets Series Y (Large Cap Concentrate Growth Series)

	Six Months Ended June  30, 2010 (unaudited)			Year Ended December 31, 2009
Increase (decrease) in net assets from operations:
Net investment income	$	77,455		$	126,624
Net realized gain (loss) during the period of investments		3,641,696			(6,912,143	)
Net change in unrealized appreciation (depreciation) during the period on investments		(6,783,000	)		16,699,320
Net increase (decrease) in net assets resulting from operations		(3,063,849	)		9,913,801
Capital share transactions:
Proceeds from sale of shares		5,812,849			12,453,173
Cost of shares redeemed		(6,837,993	)		(14,612,634	)
Net decrease from capital share transactions		(1,025,144	)		(2,159,461	)
Net increase (decrease) in net assets		(4,088,993	)		7,754,340
Net assets:
Beginning of period		41,338,336			33,583,996
End of period	$	37,249,343		$	41,338,336
Undistributed net investment income at end of period	$	77,455		$	126,624
Capital share activity:
Shares sold		651,213			1,729,313
Shares redeemed		(779,636	)		(2,125,671	)
Total capital share activity		(128,423	)		(396,358	)

The accompanying notes are an integral part of the financial statements

104

Financial Highlights Selected data for each share of capital stock outstanding throughout each period Series Y (Large Cap Concentrated Growth Series)

	Six Months Ended June  30, 2010a,h			2009			2008			2007			2006b			Year Ended December 31, 2005
Per Share Data
Net asset value, beginning of period	$	8.53		$	6.40		$	10.17		$	10.84		$	10.08		$	9.02
Income (loss) from investment operations:
Net investment incomec		0.02			0.03			0.01			0.06			0.02			—
Net gain (loss) on investments (realized and unrealized)		(0.66	)		2.10			(3.78	)		(0.73	)		0.74			1.06
Total from investment operations		(0.64	)		2.13			(3.77	)		(0.67	)		0.76			1.06
Net asset value, end of period	$	7.89		$	8.53		$	6.40		$	10.17		$	10.84		$	10.08
Total Returnd		(7.50	%)		33.28	%		(37.07	%)		(6.18	%)		7.54	%		11.75	%
Ratios/Supplemental Data
Net assets, end of period (in thousands)	$	37,249		$	41,338		$	33,584		$	66,323		$	85,695		$	37,018
Ratios to average net assets:
Net investment income (loss)		0.37	%		0.37	%		0.14	%		0.51	%		0.21	%		(0.04	%)
Total expensese		0.96	%		1.00	%		0.97	%		0.93	%		0.95	%		0.99	%
Net expensesf		0.96	%		1.00	%		0.97	%		0.93	%		0.95	%		0.99	%
Net expenses prior to custodian earnings credits and net of expense waivers		0.96	%		1.00	%		0.97	%		0.93	%		0.95	%		0.99	%
Portfolio turnover rate		176	%		151	%		214	%g		16	%		40	%		28	%

^a Unaudited figures for the six months ended June 30, 2010. Percentage amounts, except total return, have been annualized.

^b The financial highlights for Series Y exclude the historical financial highlights of Series G. The assets of Series G were acquired by Series Y on June 16, 2006. A total of $40,543,215 was excluded from purchases in the portfolio turnover calculation, which represents the cost of the securities Series Y received as a result of the merger.

^c Net investment income (loss) was computed using average shares outstanding throughout the period.

^d Total return does not take into account any of the expenses associated with an investment in variable insurance products offered by Security Benefit Life Insurance Company. If total return had taken into account these expenses, performance would have been lower. Shares of a series of SBL Fund are available only through the purchase of such products.

^e Total expense information reflects the expense ratios absent expense reductions by the Investment Manager and custodian earnings credits, as applicable.

^f Net expense information reflects the expense ratios after voluntary expense waivers, reimbursements and custodian earnings credits, as applicable.

^g Significant variation in the portfolio turnover rate is due to Investment Manager’s appointment of new portfolio manager for the Series.

^h Effective May 1, 2010, the Series name became Large Cap Concentrated Growth Series. Prior to May 1, 2010, the Series was known as the Select 25 Series.

The accompanying notes are an integral part of the financial statements

105

Performance Summary June 30, 2010 Series Z (Alpha Opportunity Series) (unaudited)

PERFORMANCE

$10,000 Since Inception

The chart above assumes a hypothetical $10,000 investment in Series Z (Alpha Opportunity Series) on July 7, 2003 (date of inception), and reflects the fees and expenses of Series Z. The S&P 500 Index is a capitalization weighted index composed of 500 selected common stocks that represent the broad domestic economy and is a widely recognized unmanaged index of market performance.

Average Annual Returns

Periods Ended 6-30-101	1 Year		5 Years		Since Inception (7-7-03)
Series Z	16.73	%	2.79	%	6.00	%

¹ Performance figures do not reflect fees and expenses associated with an investment in variable insurance products offered by Security Benefit Life Insurance Company. If returns had taken into account these fees and expenses, performance would have been lower. Shares of a Series of SBL Fund are available only through the purchase of such products.

The performance data quoted above represents past performance. Past performance is not predictive of future performance. The investment return and principal value of an investment will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than their original cost.

Portfolio Composition by Sector*

Consumer Discretionary	(1.09	)%
Consumer Staples	8.56
Energy	4.08
Financials	3.51
Health Care	11.58
Industrials	6.30
Information Technology	9.04
Materials	1.13
Telecommunications	0.20
Utilities	(0.48	)
Exchange Traded Funds	0.58
U.S. Government Sponsored Agencies	10.72
Short Term Investments	4.32
Repurchase Agreement	14.79
Cash & Other Assets, Less Liabilities	26.76
Total Net Assets	100.00	%

* Securities sold short are netted with long positions in common stocks in the appropriate sectors.

The accompanying notes are an integral part of the financial statements

106

Schedule of Investments June 30, 2010 (Unaudited) Series Z (Alpha Opportunity Series)

	Shares	Value
COMMON STOCKS - 86.6%
Aerospace & Defense - 1.9%
Lockheed Martin Corp.1,9	3,993	$	297,479
Northrop Grumman Corp.1,9	1,100		59,884
			357,363
Air Freight & Logistics - 0.1%
Pacer International, lnc.*	2,859		19,984
Airlines - 1.2%
Allegiant Travel Co.	888		37,909
Delta Air Lines, lnc.2, *	15,968		187,624
			225,533
Apparel Retail - 3.5%
Gymboree Corp.1,9,*	3,200		136,672
Limited Brands, Inc.1,9	5,400		119,178
Ross Stores, Inc.1,9 ,	2,300		122,567
The Gap, Inc.1,9	6,300		122,598
TJX Companies, Inc.1,9	3,800		159,410
			660,425
Apparel, Accessories & Luxury Goods - 1.3%
Carter’s, Inc.2,*	7,466		195,983
Phillips-Van Heusen Corp.1,9	900		41,643
			237,626
Biotechnology - 0.5%
Amgen, Inc.1,9.*	1,900		99,940
Building Products - 0.8%
AO Smith Corp.1,9	3,000		144,570
Cable & Satelite - 0.1%
Comcast Corp.	1,271		22,077
Communications Equipment - 0.8%
Cisco Systmes, Inc.*	550		11,721
DG Fastchannel, Inc.*	1,300		42,354
Harmonic, Inc.1,9,*	11,700		63,647
Polycom, Inc.*	749		22,313
			140,035
Computer & Electronics Retail - 0.6%
RadioShack Corp.1,9	5,500		107,305
Computer Hardware 1.7%
Apple, Inc.*	187		47,036
International Business Machines Corp.2	2,136		263,753
			310,789
Computer Storage & Peripherals - 0.6%
EMC Corp.*	1,309		23,955
Hypercom Corp.*	3,309		15,354
Seagate Technology*	3,469		45,235
Western Digital Corp.*	744		22,439
			106,983
Construction & Engineering - 0.2%
KBR, Inc.	1,571		31,954
Construction & Farm Machinery & Heavy Trucks - 5.1%
Cummins, Inc.	2,093		136,317
Joy Global, Inc.1,9	9,500		475,855
Kubota Corporation ADR	1,105		42,454
PACCAR, Inc.	2,599		103,622
Trinity Industries, Inc.1,9	10,800		191,376
			949,624
Data Processing & Outsourced Services - 0.2%
Alliance Data Systems Corp.*	524		31,188
Diversified Metals & Mining - 0.5%
General Moly, Inc.*	8,565		26,380
RTI International Metals, Inc.*	2,788		67,219
			93,599
Education Services - 0.1%
Bridgepoint Education, Inc.*	1,277		20,189
Electrical Components & Equipment - 0.5%
GrafTech International Ltd.*	6,020		88,012
Electronic Equipment & Instruments - 0.0%
Daktronics, Inc.	999		7,493
Exchange Traded Funds - 1.4%
Health Care Select Sector SPDR Fund	804		22,649
iPATH S&P 500 VIX Short-Term Futures ETN	4,999		156,068
iShares MSCI Japan Index Fund	1,874		17,241
Market Vectors Junior Gold Miners ETF	1,047		28,541
PowerShares DB US Dollar Index Bullish Fund	1,777		44,532
			269,031
Food Retail - 0.4%
Safeway, Inc.1,9	4,200		82,572
General Merchandise Stores - 0.8%
Family Dollar Stores, Inc.1,9	3,900		146,991
Gold - 3.0%
IAMGOLD Corp.	1,335		23,603
Randgold Resources Ltd. ADR2 ,*	4,207		398,613
Royal Gold, Inc.	2,879		138,192
			560,408
Health Care Distributors - 1.9%
McKesson Corp.2	3,641		244,530
Owens & Minor, Inc.1,9	4,200		119,196
			363,726
Health Care Equipment - 1.4%
Baxter international, Inc.1 ,9	3,712		150,856
DexCom, Inc.*	541		6,254
Medtronic, Inc.	2,619		94,991
			252,101
Health Care Facilities - 2.9%
Community Health Systems, Inc.*	3,916		132,400
Health Management Associates, Inc.*	18,243		141,748

The accompanying notes are an integral part of the financial statements.

107

Schedule of Investments June 30, 2010 (Unaudited) Series Z (Alpha Opportunity Series)

	Shares	Value
COMMON STOCKS - 86.6% (continued)
Health Care Facilities - 2.9% (continued)
Healthsouth Corp.*	4,675	$	87,469
Kindred Healthcare, Inc.1,9,*	4,100		52,644
Tenet Healthcare Corp.*	14,228		61,750
Universal Health Services, Inc.	1,533		58,484
			534,495
Health Care Services - 3.6%
Express Scripts, Inc.*	2,056		96,673
HMS Holdings Corp.*	2,337		126,712
Lincare Holdings, Inc.1,9	6,150		199,936
Medco Health Solutions, Inc.*	2,515		138,526
Mednax, lnc.*	767		42,653
RehabCare Group, Inc.*	3,375		73,508
			678,008
Health Care Technology - 0.3%
MedAssets, Inc.	2,027		46,783
Home Entertainment Software - 3.4%
Shanda Interactive Entertainment Ltd. ADR1,9,*	16,000		634,720
Homebuilding - 0.1%
Hovnanian Enterprises, Inc.*	3,414		12,564
Household Products - 0.2%
Procter & Gamble Co.	765		45,885
Human Resources & Employment Services - 0.5%
Towers Watson & Co.1,9	2,400		93,240
Hypermarkets & Super Centers - 1.0%
Costco Wholesale Corp.	1,517		83,177
Wal-Mart Stores, Inc.1,9	2,300		110,561
Independent Power Producers & Energy Traders - 0.9%			193,738
Constellation Energy Group, Inc.1,9	5,400		174,150
Industrial Conglomerates - 0.3%
General Electric Co.1,9	4,500		64,890
Industrial Machinery - 0.7%
Blount International, Inc.*	3,760		38,615
Watts Water Technologies, Inc.1,9	3,000		85,980
			124,595
Integrated Oil & Gas - 2.2%
ConocoPhillips1,9	1,500		73,635
Marathon Oil Corp.	785		24,406
Occidental Petroleum Corp.2,*	4,059		313,152
			411,193
Integrated Telecommunication Services - 1.5%
AT&T, Inc.1,9	11,300		273,347
Internet Software & Services - 1.0%
Art Technology Group, Inc.*	1,356		4,638
Baidu, Inc. ADR*	2,319	$	157,877
eBay, Inc.*	439		8,609
Internet Capital Group, Inc.*	1,308		9,941
			181,065
Leisure Products - 0.4%
Mattel, Inc.	3,883		82,164
Life Sciences Tools & Services - 3.0%
Charles River Laboratories International, Inc.1,9,*	2,100		71,841
Life Technologies Corp.1,9,*	3,000		141,750
Millipore Corp.1.9,*	1,900		202,635
Waters Corp.*	2,337		151,204
			567,430
Managed Health Care - 0.9%
Aetna, Inc.	785		20,708
CIGNA Corp.	3,123		97,001
WeIlCare Health Plans, Inc.1,9,*	2,400		56,976
			174,685
Movies & Entertainment - 0.8%
LodgeNet Interactive Corp.*	2,549		9,457
Walt Disney Co.	4,322		136,143
			145,600
Multi-Line Insurance - 0.3%
Genworth Financial, Inc.1,9,*	4,200		54,894
Oil & Gas Equipment & Services - 0.2%
Key Energy Services, Inc.*	3,127		28,706
Oil & Gas Exploration & Production - 3.3%
Anadarko Petroleum Corp.1,9	2,930		105,744
Brigham Exploration Co.*	9,855		151,569
Denbury Resources, Inc.*	5,499		80,505
EnCana Corp.	935		28,368
Gran Tierra Energy, Inc.*	1,667		8,268
Ultra Petroleum Corp.*	3,142		139,034
Whiting Petroleum Corp.*	1,309		102,652
			616,140
Oil & Gas Refining & Marketing - 0.9%
Clean Energy Fuels Corp.*	2,788		41,653
World Fuel Services Corp.	4,800		124,512
			166,165
Packaged Foods & Meats - 2.2%
Cal-Maine Foods, Inc.	3,100		98,983
KeIIogg Co.2	3,726		187,418
Kraft Foods, Inc.	4,557		127,596
			413,997
Paper Products - 0.1%
Fibria Celulose S.A. ADR*	1,426		21,105
Personal Products - 0.6%
Herbalife Ltd.1,9	2,600		119,730
Pharmaceuticals - 3.9%
Abbott Laboratories	2,076		97,115

The accompanying notes are an integral part of the financial statements

108

Schedule of Investments June 30, 2010 (Unaudited) Series Z (Alpha Opportunity Series)

	Shares		Value
COMMON STOCKS - 86.6% (continued)
Pharmaceuticals - 3.9% (continued)
Forest Laboratories, Inc.9,*		3,600	$	98,748
Johnson & Johnson1		5,300		313,018
Mylan, Inc.*		5,452		92,902
Viropharma, Inc.1,9*		10,500		117,705
				719,488
Precious Metals & Minerals - 0.2%
Harry Winston Diamond Corporation*		969		11,890
Hecla Mining Co.*		3,538		18,468
				30,358
Property & Casualty Insurance - 0.4%
Amtrust Financial Services, Inc.1,9		6,300		75,852
Regional Banks - 0.1%
Huntington Bancshares, Inc.		3,397		18,819
Reinsurance - 0.6%
Endurance Specialty Holdings Ltd.1,9		3,200		120,096
Restaurants - 1.5%
Jack in the Box, Inc.1,9,*		4,200		81,690
Tim Hortons, Inc.		522		16,704
Yum! Brands, Inc.2		4,579		178,764
				277,158
Retail REIT’s - 8.1%
General Growth Properties, Inc.2		113,758		1,508,431
Semiconductor Equipment - 0.7%
Amkor Technology, Inc.1,9,*		9,800		53,997
Lam Research Corp.*		1,310		49,859
LTX-Credence Corp.*		1,831		5,182
Mattson Technology, Inc.*		1,502		5,693
Teradyne, Inc.*		1,047		10,208
				124,939
Semiconductor Equipment - 0.1%
Entegris, Inc.*		3,142		12,474
Semiconductors - 1.9%
Altera Corp.		1,656		41,085
Anadigics, Inc.*		1,631		7,111
Analog Devices, Inc.		3,537		98,540
Atmel Corp.*		3,003		14,414
Intel Corp.		2,810		54,655
National Semiconductor Corp.		1,058		14,241
ON Semiconductor Corp.*		6,379		40,698
Texas Instruments, Inc.		2,202		51,263
TriQuint Semiconductor, Inc.*		4,469		27,306
				349,313
Specialty Chemicals - 0.2%
Cytec Industries, Inc.		788		31,512
Specialty Stores - 0.0%
Perfumania Holdings, Inc.*		875		8,243
Steel - 0.0%
Carpenter Technology Corp.		262		8,601
Systems Software - 2.5%
CA, Inc.1,9		20,235		372,324
Symantec Corp.1,9,*		6,300		87,444
				459,768
Technology Distributors - 0.7%
Arrow Electronics, Inc.1,9.*		2,800		62,580
Avnet, Inc,1,9.*		3,200		77,152
				139,732
Tobacco - 4.5%
Altria Group, Inc.1,9		17,800		356,712
Philip Morris International, Inc.1,9		10,500		481,320
				838,032
Trading Companies & Distributors - 0.5%
H&E Equipment Services, Inc.*		1,872		14,021
United Rentals, Inc.*		9,351		87,152
				101,173
Trucking - 0.7%
Con-way, Inc.1,9		1,800		54,036
Werner Enterprises, Inc.		3,366		73,682
				127,718
Wireless Telecommunication Services - 0.1%
Rogers Communications, Inc.		661		21,654
TOTAL COMMON STOCKS (cost $16,519,514)			$	16,162,168
	Shares		Value
FOREIGN STOCKS - 1.8%
Diversified Banks - 0.0%
Anglo Irish Bank Corporation, Ltd.*		16,638	$	—
Multi-Line Insurance - 0.5%
Ageas3,4		45,503		101,273
Pharmaceuticals - 1.3%
AstraZeneca plc1,3,4,9		2,800		132,018
GlaxoSmithKline PLC, ADR1,3,4,9		5,500		93,429
				225,447
TOTAL FOREIGN STOCKS (cost $435,290)			$	326,720
	Shares		Value
RIGHTS - 0.0%
Gol - Linhas Aereas Inteligentes S.A. 7/1/2010 6,10		25	$	—
TOTAL RIGHTS (cost $0)			$	—
	Principal Amount		Value
U.S. GOVERNMENT SPONSORED AGENCY BONDS & NOTES - 10.7%
Federal Home Loan Mortgage Corporation 0.20%, 8/16/2010 1,3	$	2,000,000	$	1,999,846
TOTAL U.S. GOVERNMENT SPONSORED AGENCY BONDS & NOTES (cost $1,999,502)			$	1,999,846

The accompanying notes are an integral part of the financial statements

109

Schedule of Investments June 30, 2010 (Unaudited) Series Z
(Alpha Opportunity Series
) 

	Principal Amount		Value
SHORT TERM INVESTMENTS - 4.3%
State Street General Account U.S. Government Fund3	$	804,902	$	804,902
TOTAL SHORT TERM INVESTMENTS (cost $804,902)			$	804,902
	Principal Amount		Value
REPURCHASE AGREEMENT - 14.8%
State Street, 0.01%, dated 06/30/10, matures 07/01/10; repurchase amount $2,785,082 (Collateralized by U.S. Treasury Note, 04/30/12 with a value of $2,815,668)3	$	2,758,081	$	2,758,081
TOTAL REPURCHASE AGREEMENT (cost $2,758,081)			$	2,758,081
Total Investments - 118.2%5 (cost $22,517,289)			$	22,051,717
Liabilities, Less Cash & Other Assets - (18.2)%				(3,396,729	)
Total Net Assets - 100.0%			$	18,654,988

Schedule of Securities Sold Short

	Shares		Value
COMMON STOCKS - (24.3)%
Advertising - (0.4)%
Focus Media Holding, Ltd. ADR 6,10,*	(2,500	)	$	(75,000	)
Alternative Carriers - (0.2)%
Global Crossing Ltd. 6,10,*	(2,520	)		(40,244	)
Aluminum - (0.2)%
Kaiser Aluminum Corp.	(999	)		(34,635	)
Application Software - (0.2)%
MicroStrategy, Inc.	(601	)		(45,129	)
Auto Parts & Equipment - (0.2)%
Fuel Systems Solutions, Inc. *	(1,146	)		(29,739	)
Biotechnology - (3.5)%
Acorda Therapeutics, Inc. 6,10,*	(2,900	)		(77,575	)
Alnylam Pharmaceuticals, Inc. 6,10,*	(3,000	)		(88,230	)
AMAG Pharmaceuticals, Inc. 6,10,*	(1,900	)		(82,954	)
Cepheid, Inc. 6,10,*	(5,500	)		(84,700	)
Exelixis, Inc. 6,10 ,*	(4,700	)		(30,127	)
Regeneron Pharmaceuticals, Inc. 6,10,*	(3,810	)		(82,715	)
Rigel Pharmaceuticals, Inc. 6,10,*	(3,070	)		(78,838	)
Savient Pharmaceuticals, Inc. 6,10,*	(3,240	)		(64,282	)
Vertex Pharmaceuticals, Inc. 6,10,*	(2,700	)		(74,709	)
				(664,130	)
Building Products - (0.9)%
USG Corp. 6,10,*	(5,580	)		(160,258	)
Communications Equipment - (0.3)%
Riverbed Technology, Inc. 6,10,*	(4,100	)		(54,530	)
Computer Storage & Peripherals - (0.3)%
Intermec, Inc. 6,10,*	(2,570	)	$	(50,937	)
Construction & Engineering - 0.0%
Layne Christensen Co. *	(239	)		(5,801	)
Construction & Farm Machinery & Heavy Trucks - (0.2)%
Bucyrus International, Inc.	(621	)		(29,466	)
Diversified Banks - (3.0)%
Wells Fargo & Co. 6,10 ,*	(12,937	)		(565,623	)
Diversified Metals & Mining(0.5)%
iPath Dow Jones-UBS Copper Subindex Total Return ETN	(207	)		(8,087	)
Ivanhoe Mines Ltd. 6,10,*	(4,780	)		(39,865	)
Southern Copper Co.	(1,411	)		(37,448	)
Titanium Metals Corp. *	(403	)		(7,089	)
				(92,489	)
Electric Utilities - (1.4)%
Korea Electric Power Corporation ADR 6,10 ,*	(19,460	)		(263,294	)
Exchange Traded Funds - (0.9)%
iShares Barclays 20+ Year Treasury Bond Fund	(1,577	)		(160,460	)
Health Care Equipment-(0.4)%
Intuitive Surgical, Inc. 6,10,*	(258	)		(74,406	)
				(74,406	)
Health Care Services - (0.1)%
Res-Care, Inc.	(1,221	)		(11,795	)
Health Care Supplies - (0.4)%
Align Technology, Inc. 6,10, *	(6,300	)		(76,860	)
Health Care Technology - (0.5)%
athenahealth, Inc. 6,10,*	(2,700	)		(96,795	)
Home Entertainment Software - (0.2)%
Electronic Arts, Inc. 6,10, *	(900	)		(36,720	)
Industrial Machinery - (0.2)%
Dynamic Materials Corp.	(2,337	)		(37,485	)
Internet Retail - (0.2)%
Blue Nile, Inc. *	(620	)		(29,190	)
Internet Software & Services - (1.4)%
Baidu, Inc. ADR 6,l0,*	(200	)		(53,726	)
Equinix, Inc. 6,10,*	(1,000	)		(79,940	)
SAVVIS, Inc. 6,10,*	(5,900	)		(86,966	)
VeriSign, Inc. 6,10, *	(1,300	)		(33,319	)
				(253,951	)
Leisure Products - (1.6)%
Pool Corp. 6,10 ,*	(12,350	)		(305,663	)

The accompanying notes are an integral part of the financial statements

110

Schedule of Investments	Series Z
June 30, 2010 (Unaudited)	(Alpha Opportunity Series)

	Shares		Values
COMMON STOCKS - (24.3)% (continued)
Life Sciences Tools & Services - (0.7)%
Luminex Corp.6,10,*	(2,700	)	$	(68,823	)
Sequenom, Inc.6,10,*	(3,140	)		(64,715	)
				(133,538	)
Oil & Gas Exploration & Production - (0.6)%
BPZ Resources, Inc.6,10,*	(6,000	)		(112,800	)
Oil & Gas Refining & Marketing - (0.1)%
Valero Energy Corp.	(828	)		(14,887	)
Pharmaceuticals - (1.2)%
Auxilium Pharmaceuticals, Inc.6,10,*	(1,960	)		(72,167	)
Eli Lilly & Co.	(201	)		(6,734	)
Forest Laboratories, Inc.9,*	(1,451	)		(39,801	)
Sepracor, Inc.6,10,*	(1,350	)		(23,625	)
XenoPort, Inc.6,10,*	(1,790	)		(82,036	)
				(224,363	)
Publishing - (0.1)%
New York Times Co.	(2,760	)		(23,874	)
Regional Banks - (0.6)%
PrivateBancorp, Inc.6,10	(2,400	)		(103,200	)
Research & Consulting Services - 0.0%
FTI Consulting, Inc.*	(201	)		(8,762	)
Semiconductor Equipment - (0.2)%
Varian Semiconductor Equipment Associates, Inc.6,10,*	(1,270	)		(33,299	)
Semiconductors - (0.9)%
Cree, Inc.6,10,*	(4,200	)		(115,332	)
Rambus, Inc.6.10,*	(3,680	)		(56,451	)
				(171,783	)
Soft Drinks - (0.5)%
Hansen Natural Corp.6,10,*	(3,270	)		(96,825	)
Specialized Finance - 0.0%
NASDAQ OMX Group, Inc.*	(208	)		(3,698	)
Specialty Chemicals - (0.3)%
Landec Corp. 7, *	(414	)		(2,438	)
Zoltek Companies, Inc.6,10,*	(2,900	)		(52,867	)
				(55,305	)
Specialty Stores - 0.0%
Books-A-Million, Inc.	(922	)		(5,550	)
Systems Software - (0.7)%
Red Hat, Inc.6,10,*	(3,300	)		(58,905	)
VMware, Inc.6,10,*	(2,500	)		(71,450	)
				(130,355	)
Wireless Telecommunication Services - (1.2)%
Clearwire Corp.6,10,*	(2,660	)		(30,138	)
Leap Wireless International, Inc.6,10,*	(1,600	)		(69,440	)
SBA Communications Corp.6,10,*	(2,600	)		(74,854	)
Telephone & Data Systems, Inc.	(1,390	)		(42,242	)
				(216,674	)
TOTAL COMMON STOCKS SOLD SHORT (proceeds $4,530,181)			$	(4,529,512	)
	Shares		Value
FOREIGN STOCKS - (20.7)%
Airlines - (0.2)%
Ryanair Holdings plc6,10,*	(10,200	)	$	(38,219	)
Airport Services - (1.1)%
Beijing Capital International Airport Company, Ltd.6,10	(232,000	)		(200,659	)
Automobile Manufacturers - (2.8)%
Volkswagen AG6,10	(1,300	)		(539,373	)
Biotechnology - (1.2)%
Basilea Pharmaceutica6,10,*	(500	)		(83,365	)
Intercell AG6,10,*	(2,000	)		(78,778	)
Zeltia S.A.6,10	(8,500	)		(57,969	)
				(220,112	)
Broadcasting - (0.1)%
Tokyo Broadcasting System Holdings, Inc.6,10	(1,300	)		(21,837	)
Cable & Satellite - (0.4)%
Sky Deutschland AG6,10*	(4,200	)		(68,951	)
Casinos & Gaming - (0.8)%	(1,700	)		(48,431	)
bwin Interactive Entertainment AG6,10
Genting Singapore plc6,10,*	(132,800	)		(43,724	)
PartyGaming plc6,10,*	(16,200	)		(60,974	)
				(153,129	)
Coal & Consumable Fuels - (0.4)%
Aquila Resources, Ltd.6,10,*	(2,860	)		(22,783	)
Riversdale Mining, Ltd.6,10,*	(7,100	)		(54,029	)
				(76,812	)
Construction & Engineering (0.2)%
Ausenco, Ltd.6,10	(2,300	)		(24,817	)
China Communications Construction Company, Ltd.6,10	(16,000	)		(16,571	)
				(41,388	)
Construction & Farm Machinery & Heavy Trucks - (0.1)%
China National Materials Company, Ltd.6,10	(37,600	)		(19,168	)
Construction Materials - (0.3)%
Anhui Conch Cement Company, Ltd.6,10	(5,500	)		(24,761	)
China National Building Material Company, Ltd.6,10	(17,300	)		(23,432	)
				(48,193	)
Department Stores - (1.3)%
Marui Group Company, Ltd. 6,10	(31,000	)		(233,860	)

The accompanying notes are an integral part of the financial statements

111

Schedule of Investments	Series Z
June 30, 2010 (Unaudited)	(Alpha Opportunity Series	)

	Shares		Value
FOREIGN STOCKS - (20.7)% (continued)
Diversified Banks - (2.4)%
Aozora Bank, Ltd.6,10	(17,300	)	$	(27,861	)
Erste Group Bank AG6,10	(5,500	)		(337,971	)
Mizuho Financial Group, Inc.6,10	(12	)		(49,594	)
Mizuho Trust & Banking Company, Ltd.6,10	(18,800	)		(26,215	)
				(441,641	)
Diversified Metals & Mining - (0.4)%
Fushan International Energy Group, Ltd.6,10	(70,000	)		(25,165	)
Western Areas NL6,10	(6,600	)		(47,325	)
				(72,490	)
Diversified Real Estate Activities - (0.1)%
Franshion Properties China, Ltd.6,10	(84,600	)		(23,552	)
Electrical Components & Equipment - (0.2)%
Toyo Tanso Company Ltd.6,10	(600	)		(32,408	)
Electronic Manufacturing Services - (0.4)%
Imperial Energy Corporation plc6,10,*	(4,200	)		(83,657	)
Gold - (0.9)%
Agnico-Eagle Mines, Ltd.6,8,10	(1,900	)		(125,612	)
Sino Gold Mining, Ltd.6,10,*	(9,100	)		(37,425	)
				(163,037	)
Highways & Railtracks - (2.5)%
Brisa Auto-Estradas de Portugal S.A.6,10	(47,200	)		(490,927	)
Household Appliances - (2.3)%
Electrolux AB6,10	(32,100	)		(422,058	)
Industrial Machinery - (0.4)%
Japan Steel Works Ltd.6,10	(1,600	)		(22,196	)
Meyer Burger TechnologyAG 6,10, *	(200	)		(49,878	)
				(72,074	)
Internet Software & Services - (0.2)%
Access Company, Ltd.6,10	(18	)		(34,682	)
Investment Banking & Brokerage - (0.2)%
Monex Group, Inc.6,10	(83	)		(29,139	)
Marine Ports & Services - (0.1)%
China Merchants Holdings International Company, Ltd.6,10	(4,900	)		(17,461	)
Oil & Gas Equipment & Services - (0.5)%
Modec, Inc.6,10	(1,000	)		(25,773	)
Sevan Marine ASA6,10*	(6,300	)		(33,049	)
Trican Well Service, Ltd.6,10	(2,200	)		(37,448	)
				(96,270	)
Oil & Gas Exploration & Production - (0.4)%
Arrow Energy Ltd. 6,10,*	(9,500	)		(24,514	)
Queensland Gas Company, Ltd.6.10,*	(13,600	)		(52,898	)
				(77,412	)
Precious Metals & Minerals - (0.4)%
Silver Wheaton Corporation6.10,*	(6,500	)		(68,246	)
Real Estate Development - (0.1)%
C C Land Holdings, Ltd.6,10	(53,000	)		(14,782	)
Real Estate Operating Companies - (0.3)%
Aeon Mall Company, Ltd.6,10	(1,900	)		(58,221	)
TOTAL FOREIGN STOCKS SOLD SHORT (proceeds $3,700,747)			$	(3,859,758	)
TOTAL SECURITIES SOLD SHORT - (40.9%) (proceeds $8,230,928)			$	(8,389,270	)

INVESTMENT CONCENTRATION

At June 30, 2010, the investment diversification of the Series was as follows:

Country	% of Net Assets		Value
United States	110.5	%	$	15,886,531
Cayman Islands	4.5			828,836
Jersey	2.2			398,613
United Kingdom	0.9			141,790
Belgium	0.5			101,273
Bermuda	0.3			65,070
Brazil	0.1			21,105
Canada	(0.3	)		(29,918	)
Norway	(0.2	)		(33,049	)
Ireland	(0.2	)		(38,219	)
Isle Of Man	(0.2	)		(43,724	)
Spain	(0.3	)		(57,969	)
Gibraltar	(0.3	)		(60,974	)
Hong Kong	(0.3	)		(66,178	)
Switzerland	(0.8	)		(133,243	)
Republic of Korea	(1.4	)		(263,294	)
Australia	(1.4	)		(263,791	)
China	(1.6	)		(284,591	)
Sweden	(2.3	)		(422,058	)
Austria	(2.6	)		(465,180	)
Portugal	(2.5	)		(490,927	)
Japan	(2.8	)		(519,332	)
Germany	(3.2	)		(608,324	)
Total Investments	98.6		$	13,662,447

For federal income tax purposes the identified cost of investments owned at June 30, 2010 was $22,577,329.

ADR American Depositary Receipt

plc Public Limited Company

The accompanying notes are an integral part of the financial statements

112

Schedule of Investments	Series Z
June 30, 2010 (Unaudited)	(Alpha Opportunity Series	)

* Non-income producing security

¹ Security is segregated as collateral for open short positions.

² Security is segregated as collateral for open futures contracts.

³ Value determined based on Level 2 inputs.

⁴ Security was subject to the fair value trigger at June 30, 2010. The total market value of fair valued securities amounts to $326,720 (cost $334,029) or 1.8% of total net assets.

⁵ Unless otherwise indicated, the values of the securities of the Portfolio are determined based on Level 1 inputs.

⁶ Security sold short was fair valued by the Valuation Committee at June 30,2010. The total market value of fair valued securities amounts to $(7,786,655) (proceeds $7,622,318), or (41.7%) of total net assets.

⁷ Security is deemed illiquid. The total market value of illiquid securities is $(2,438) (proceeds $2,496), or 0.0% of total net assets.

⁸ Security was acquired through a private placement.

⁹ All or portion of security is deemed illiquid. The total market value of illiquid securities is $7,329,308 (cost $8,714,945), or 39.3% of total net assets. The securities were liquid at time of purchase. This security is deemed illiquid due to the Series exposure to Lehman Brothers International Europe (“LBIE”) prime brokerage services. See Note 11 in the Notes to Financial Statements for additional information.

¹⁰ Value determined based on Level 3 inputs.

The accompanying notes are an integral part of the financial statements

113

Series Z

(Alpha Opportunity Series)

Statement of Assets and Liabilities

June 30, 2010 (Unaudited)

Assets:
Investments, at value*	$	22,051,717
Cash		600,694
Restricted cash		1,483,418
Restricted cash denominated in a foreign currency, at value**		3,477,579
Receivables:
Fund shares sold		6,905
Securities sold		67,012
Dividends		22,807
Foreign taxes recoverable		852
Prepaid expenses		2,046
Total assets		27,713,030
Liabilities:
Securities sold short, at value**		8,389,270
Payable for:
Fund shares redeemed		25,318
Securities purchased		536,043
Variation margin on futures		33,495
Dividends on short sales		94
Management fees		20,360
Administration fees		2,443
Transfer agent/maintenance fees		2,090
Custodian fees		22,631
Directors’ fees		292
Professional fees		5,435
Security Investors		12,142
Other fees		8,429
Total liabilities		9,058,042
Net assets	$	18,654,988
Net assets consist of:
Paid in capital	$	32,401,784
Accumulated net investment loss		(95,299	)
Accumulated net realized loss on sale of investments and foreign currency transactions		(12,818,416	)
Net unrealized depreciation in value of investments and translation of assets and liabilities in foreign currencies		(833,081	)
Net assets	$	18,654,988
Capital shares outstanding		1,429,245
Net asset value per share (net assets divided by shares outstanding)	$	13.05
*  Investments, at cost	$	22,517,289
** Securities sold short, proceeds		8,230,928
** Restricted Cash denominated in a foreign currency, at cost		3,620,699

Statement of Operations

For Six Months Ended June 30, 2010 (Unaudited)

Investment Income:
Dividends (net of foreign withholding tax $944)	$	116,209
Total Investment income		116,209
Expenses:
Management fees		133,483
Administration fees		16,352
Transfer agent/maintenance fees		12,611
Custodian fees		30,183
Directors’ fees		904
Professional fees		23,095
Reports to shareholders		3,009
Other		2,291
Dividends on short sales		7,871
Total expenses		229,799
Reimbursement of expenses		(18,291	)
Net expenses		211,508
Net investment loss		(95,299	)
Net Realized and Unrealized Gain (Loss):
Net realized gain (loss) during the period on:
Investments		408,059
Futures		(236,255	)
Foreign currency transactions		(6,281	)
Net realized gain		165,523
Net change in unrealized appreciation (depreciation) during the period on:
Investments		(1,338,242	)
Securities sold short		243,004
Futures		(85,971	)
Translation of assets and liabilities in foreign currencies		(241,906	)
Net change in unrealized appreciation (depreciation)		(1.423.115	)
Net realized and unrealized loss		(1,257,592	)
Net decrease in net assets resulting from operations	$	(1,352,891	)

The accompanying notes are an integral part of the financial statements

114

Statements of Changes in Net Assets	Series Z
	(Alpha Opportunity Series)

	Six Months Ended June  30, 2010 (unaudited)			Year Ended December 31, 2009
Increase (decrease) in net assets from operations:
Net investment loss	$	(95,299	)	$	(114,332	)
Net realized gain during the period on investments and foreign currency transactions		165,523			541,737
Net change in unrealized appreciation (depreciation) during the period on investments and translation of assets and liabilities in foreign currencies		(1,423,115	)		4,883,743
Net increase (decrease) in net assets resulting from operations		(1,352,891	)		5,311,148
Capital share transactions:
Proceeds from sale of shares		379,025			441,669
Cost of shares redeemed		(3,004,461	)		(10,096,392	)
Net decrease from capital share transactions		(2,625,436	)		(9,654,723	)
Net decrease in net assets		(3,978,327	)		(4,343,575	)
Net assets:
Beginning of period		22,633,315			26,976,890
End of period	$	18,654,988		$	22,633,315
Accumulated net investment loss at end of period	$	(95,299	)	$	—
Capital share activity:
Shares sold		25,032			44,054
Shares redeemed		(209,329	)		(936,532	)
Total capital share activity		(184,297	)		(892,478	)

The accompanying notes are an integral part of the financial statements

115

Financial Highlights Selected data for each share of capital stock outstanding throughout the year Series Z (Alpha Opportunity Series)

	Six Months Ended June  30, 2010a			2009			2008b			2007			2006			Year Ended December 31, 2005
Per Share Data
Net asset value, beginning of period	$	14.03		$	10.76		$	16.50		$	13.96		$	12.34		$	11.57
Income (loss) from investment operations:
Net investment income (loss)c		(0.06	)		(0.06	)		(0.16	)		0.01			—			(0.02	)
Net gain (loss) on investments (realized and unrealized)		(0.92	)		3.33			(5.58	)		2.53			1.62			0.79
Total from investment operations		(0.98	)		3.27			(5.74	)		2.54			1.62			0.77
Net asset value, end of period	$	13.05		$	14.03		$	10.76		$	16.50		$	13.96		$	12.34
Total Returnd		(6.99	%)		29.91	%		(34.79	%)		18.19	%		13.13	%		6.66	%
Ratios/Supplemental Data
Net assets, end of period (in thousands)	$	18,655		$	22,633		$	26,977		$	48,869		$	36,442		$	25,660
Ratios to average net assets:
Net investment income (loss)		(0.81	%)		(0.52	%)		(1.09	%)		0.10	%		(0.03	%)		(0.21	%)
Total expensese		2.16	%		2.85	%		2.79	%		2.50	%		2.78	%		2.50	%
Net expensesf		1.91	%		1.68	%		2.64	%		2.39	%		2.62	%		2.50	%
Net expenses prior to custodian earnings credits and net of expense waivers		1.91	%		1.69	%		2.79	%		2.50	%		2.78	%		2.50	%
Portfolio turnover rate		944	%		555	%		990	%		1,770	%		1,285	%		1,509	%

^a Unaudited figures for the six months ended June 30, 2010. Percentage amounts, except total return, have been annualized.

^b Security Global Investors, LLC (SGI) became the sub-advisor of 37.5% of the assets of Series Z effective August 18, 2008. Also effective August 18, 2008, Mainstream lnvestment Advisers, LLC (Mainstream) sub-advises 37.5% of the assets and Security Investors, LLC (SI) manages 25% of the assets. Prior to August 18, 2008, SI paid Mainstream sub-advisory fees for 60% of the assets. SI managed the remaining 40% of the assets.

^c Net investment income (loss) was computed using average shares outstanding throughout the period.

^d Total return does not take into account any of the expenses associated with an investment in variable insurance products offered by Security Benefit Life Insurance Company. If total return had taken into account these expenses, performance would have been lower. Shares of a series of SBL Fund are available only through the purchase of such products.

^e Total expense information reflects the expense ratios absent expense reductions by the Investment Manager and custodian earnings credits, as applicable.

^f Net expense information reflects the expense ratios after voluntary expense waivers, reimbursements and custodian earnings credits, as applicable.

The accompanying notes are an integral part of the financial statements

116

Notes to Financial Statements

June 30, 2010 (unaudited)

1. Significant Accounting Policies

SBL Fund (The Fund) is registered under the Investment Company Act of 1940 (the “1940 Act”), as amended, as an open-end management investment company of the series type. Each series, in effect, represents 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 net asset value of each series. Security Benefit Life Insurance Company (“SBL”) and SBL’s affiliated life insurance company as well as unaffiliated life insurance companies purchase shares of the Series for their variable annuity and variable life insurance separate accounts. The following is a summary of the significant accounting policies followed by the Fund in the preparation of its 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 Series 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 Series will use the price of that exchange that it generally considers to be the principal exchange on which the stock is traded. 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 after the close of a foreign exchange that will affect the value of a series portfolio securities before the time as of which the NAV is 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 Series net asset value 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. The Valuation Committee will determine the current value of such foreign securities by taking into consideration certain factors which may include those discussed above, as well as the following factors, among others: the value of the securities traded on other foreign markets, ADR trading, closed-end fund trading, foreign currency exchange activity, and the trading prices of financial products that are tied to foreign securities such as WEBS^®. In addition, the Board of Directors has authorized the Valuation Committee and Administrator to use prices and other information supplied by a third party pricing vendor in valuing foreign securities.

The senior floating rate interests (loans) in which Series P invests are not listed on any securities exchange or board of trade. Accordingly, determinations of the value of loans may be based on infrequent and dated trades. Typically loans are valued using information provided by an independent third party pricing service. If the pricing service cannot or does not provide a valuation for a particular loan or such valuation is deemed unreliable, such loan is fair valued. In determining fair value, consideration is given to several factors, which may include, among others, one or more of the following: the fundamental business data relating to the issuer or borrower; an evaluation of the forces which influence the market in which these loans are purchased and sold; type of holding; financial statements of the borrower; cost at date of purchase; size of holding; credit worthiness and cash flow of issuer; information as to any transactions in, or offers for, the holding; price and extent of public trading in similar securities (or equity securities) of the issuer/borrower, or comparable companies; coupon payments; quality, value and saleability of collateral securing the loan; business prospects of the issuer/borrower, including any ability to obtain money or resources from a parent or affiliate; the portfolio manager’s and/or the market’s assessment of the borrower’s management; prospects for the borrower’s industry, and multiples (of earnings and/or cash flow) being paid for similar businesses in that industry; borrower’s competitive position within the industry; borrower’s ability to access additional liquidity through public and/or private markets; and other relevant factors.

B. Repurchase Agreements – In connection with transactions in repurchase agreements, it is the Fund’s policy that its custodian take possession of the underlying collateral and that the fair value of the collateral exceed 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 Series may be delayed or limited.

C. Foreign Currency Transactions – The accounting records of the Fund are maintained in U.S. dollars. All assets and liabilities

117

Notes to Financial Statements

June 30, 2010 (unaudited)

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. 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 Series. Foreign investments may also subject the 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.

The Fund does 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 and 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 other assets and liabilities at the end of the reporting period, resulting from changes in the exchange rates.

D. Forward Foreign Currency Exchange Contracts – The Fund may enter into forward foreign exchange contracts in order to manage foreign currency risk from purchase or sale of securities denominated in foreign currency. A series may also enter into such contracts to manage the effect of 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 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. There were no forward foreign currency exchange contracts outstanding for the period ended June 30, 2010.

E. Futures – The Fund may utilize futures contracts to a limited extent, with the objectives of maintaining full exposure to the underlying stock market, enhancing returns, maintaining liquidity, minimizing transaction costs and economically hedging possible variations in foreign exchange values. The Fund may purchase or sell financial and foreign currency 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 series may pay from its cash balances and reduce its future 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 series 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 held as collateral are noted in the Schedule of Investments. Subsequent changes in the value of the contract are recorded as unrealized gains or losses. The variation margin is paid or received in cash daily by the series. The series realizes a gain or loss when the contract is closed or expires.

F. Options Purchased and 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 (and the writer the obligation to sell or purchase), respectively, a security at a specified price, until a certain date. Options may be used to economically hedge the series 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. Securities Sold Short – Certain of the Series may make short sales “against the box,” in which the Series enters into a short sale of a security it owns. At no time will more than 15% of the value of the Series’ net assets be in deposits on short sales against the box. If a Series makes a short sale, the Series does not immediately deliver from its own account the securities sold and does not receive the proceeds from the sale. To complete the sale, the Series must borrow the security (generally from the broker through which the short sale is made) in order to make delivery to the buyer. The Series must replace the security borrowed by purchasing it at the market price at the time of replacement or delivering the security from its own portfolio. The Series is said to have a “short position” in securities sold until it delivers them to the broker, at which time it receives the proceeds of the sale. Certain Series may make short sales that are not “against the box,” which create opportunities to increase the Series’ return but, at the same time, involve specific risk considerations and may be considered a speculative technique. Such short sales theoretically involve unlimited loss potential, as the market price of securities sold short may continually increase, although a Series may mitigate such losses by replacing the securities sold short before the market price has increased significantly. For financial statement purposes, an amount equal to the settlement amount is included in the Statement

118

Notes to Financial Statements

June 30, 2010 (unaudited)

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 Series 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 Series is 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.

H. Senior Loans – Senior loans in which certain of the Series invests generally pay interest rates which are periodically adjusted by reference to short-term, floating rate plus a premium. These base lending rates are generally (i) the lending rate offered by one or more major European banks, such as the London Inter-Bank Offered Rate (LIBOR), (ii) the prime rate offered by one or more major United States banks, or (iii) the bank’s certificate of deposit rate. Senior floating rate interests often require prepayments from excess cash flows or permit the borrower to repay at its election. The rate at which the borrower repays cannot be predicted with accuracy. As a result, the actual remaining maturity may be substantially less than the stated maturities shown. The interest rate indicated is the rate in effect at June 30, 2010.

I. 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 is accrued as of ex-dividend date, except that certain dividends for foreign securities where the ex-dividend date may have passed are recorded as soon as the Series is informed of the dividend in the exercise of reasonable diligence. Interest income is recognized on the accrual basis including the amortization of premiums and accretion of discounts on debt securities.

J. Securities Purchased on a When-Issued or Delayed Delivery Basis – The Series may purchase and sell interests in securities on a when-issued and delayed delivery basis, with payment and delivery scheduled for a future date. No income accrues to the Fund on such interests or securities in connection with such transactions prior to the date the Fund actually takes delivery of such interests or securities. These transactions are subject to market fluctuations and are subject to the risk that the value at delivery may be more or less than the trade date purchase price. Although the Fund will generally purchase these securities with the intention of acquiring such securities, they may sell such securities before the settlement date.

K. Expenses – Expenses that are directly related to one of the Series are charged directly to that Series. Other operating expenses are allocated to the Series on the basis of relative net assets within the Fund.

L. Distributions to Shareholders – Each Series is required by the Internal Revenue Code to distribute substantially all of its income and capital gains to its shareholders. Each year, the Fund determines whether to declare and pay actual dividends or whether to secure consent of its shareholders to report and deduct a consent dividend. A consent dividend is treated for tax purposes as a distribution to shareholders occurring on the last day of the Fund’s taxable year and a shareholder contribution to capital occurring on the same day. It is the Fund’s current practice to utilize the consent dividend procedures. The character of any distributions made from net investment income and net realized gains may differ from their ultimate characterization for income tax purposes.

M. Taxes – The Series intend to comply with the requirements of the Internal Revenue Code applicable to regulated investment companies and distribute 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. Distributions may be made via consent dividends, as described in the paragraph above. Therefore, no provision for federal or state income tax is required.

The evaluation of tax positions taken or expected to be taken in the course of preparing the Series’ tax returns is required to determine whether the tax positions are “more-likely-than-not” of being sustained by the applicable tax authority. For all open tax years (December 31, 2006 – December 31, 2009) and all major taxing jurisdictions through the end of the reporting period, the Series’ management has completed a review and evaluation and has determined that no tax liability is required and no additional disclosures are needed as of June 30, 2010.

N. Earnings Credits – Under the fee agreement with the custodian, the Series’ may earn credits based on overnight custody cash balances. These credits are utilized to reduce related custodial expenses. The custodian fees disclosed in the Statement of Operations are before the reduction in expense from the related earnings credits, if any.

O. Use of Estimates – The preparation of financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent 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.

P. Indemnifications – Under the Fund’s organizational documents, its Officers and Directors are indemnified against certain liabilities arising out of the performance of their duties to the Fund. In addition, in the normal course of business, the Fund enters into contracts that provide general indemnification to other parties. The Fund’s maximum exposure under these arrangements is unknown as this would involve future claims that may be made against the Fund that have not yet occurred, and may not occur. However, the Fund has not had prior claims or losses pursuant to these contracts and expects the risk of loss to be remote.

119

Notes to Financial Statements

June 30, 2010 (unaudited)

Q. Recent Accounting Pronouncement – On January 21, 2010, the FASB issued an ASU, Fair Value Measurements and Disclosures (Topic 820): Improving Disclosures about Fair Value Measurements which provides guidance on how investment assets and liabilities are to be valued and disclosed. Specifically, the amendment requires reporting entities to disclose: i) the input and valuation techniques used to measure fair value for both recurring and nonrecurring fair value measurements, for Level 2 or Level 3 positions, ii) transfers between all levels (including Level 1 and Level 2) will be required to be disclosed on a gross basis (i.e. transfers out must be disclosed separately from transfers in) as well as the reason(s) for the transfer, and iii) purchases, sales, issuances and settlements must be shown on a gross basis in the Level 3 rollforward rather than as one net number. The effective date of the amendment is for interim and annual periods beginning after December 15, 2009, however, the requirement to provide the Level 3 activity for purchases, sales, issuances and settlements on a gross basis will be effective for interim and annual periods beginning after December 15, 2010.

2. Management fees and other transactions with affiliates

Management fees are paid monthly to Security Investors (SI), based on the following annual rates:

	Management Fees (as a % of net assets)		Fee Waivers (as a % of net assets)
Series A (Large Cap Core Series)	0.75	%	N/A
Series B (Large Cap Value Series)	0.65		N/A
Series C (Money Market Series)	0.50		N/A
Series D (Global Series)	1.00		N/A
Series E (U.S. Intermediate Bond Series)	0.75		N/A	1
Series J (Mid Cap Growth Series)	0.75		N/A
Series N (Managed Asset Allocation Series)	1.00		N/A
Series O (All Cap Value Series)	0.70		N/A
Series P (High Yield Series)	0.75		N/A
Series Q (Small Cap Value Series)	0.95		N/A
Series V (Mid Cap Value Series)	0.75		N/A
Series X (Small Cap Growth Series)	0.85		N/A
Series Y (Large Cap Concentrated Growth Series)	0.75		N/A
Series Z (Alpha Opportunity Series)	1.25		N/A

¹ Effective May 1, 2010, Series E no longer waives 0.15% of management fees.

SI also acts as the administrative agent and transfer agent for the Fund, and as such performs administrative functions, transfer agency and dividend disbursing services, and the bookkeeping, accounting and pricing functions for each series. For these services, the Investment Manager receives the following:

	Administrative Fees (as a % of net  assets)*
Series A (Large Cap Core Series)	0.095	%
Series B (Large Cap Value Series)	0.095
Series C (Money Market Series)	0.095
Series D (Global Series)	0.150
Series E (U.S. Intermediate Bond Series)	0.095
Series J (Mid Cap Growth Series)	0.095
Series N (Managed Asset Allocation Series)	0.150
Series O (All Cap Value Series)	0.095
Series P (High Yield Series)	0.095
Series Q (Small Cap Value Series)	0.095
Series V (Mid Cap Value Series)	0.095
Series X (Small Cap Growth Series)	0.095
Series Y (Large Cap Concentrated Growth Series)	0.095
Series Z (Alpha Opportunity Series)	0.150

* The minimum annual charge for administrative fees is $25,000 for Series A, B, C, E, J, O, P, Q, V, X, Y and Z and $60,000 for Series D and N.

SI is paid the following for providing transfer agent services to the Fund:

Annual charge per account	$5.00 - $8.00
Transaction fee	$0.60 -$1.10
Minimum annual charge per series	$25,000
Certain out-of-pocket charges	Varies

Effective May 1, 2010, the investment advisory contract for Series E and Series Z provides that the total expenses be limited to 0.81% and 2.35%, respectively, of average daily net assets, exclusive of brokerage costs, dividends on securities sold short, expenses of other investment companies in which a fund invests, interest, taxes, litigation, indemnification, and extraordinary expenses (as determined under generally accepted accounting principles). These contracts are in effect through April 30, 2011. The Investment Manager is entitled to reimbursement by the Series E and Series Z of fees waived or expenses reimbursed during any of the previous 36 months, beginning on the date of the expense limitation agreement, if on any day the estimated operating expenses are less than the indicated percentages. As of June 30, 2010, the amount of fees waived or reimbursed in the Series E and Series Z were $87,954 and $18,291, respectively. As of June 30, 2010, no amounts were recouped by the Investment Manager. Prior to May 1, 2010, there was no expense limit for Series E and the expense limit for Series Z was 1.70%.

At June 30, 2010, Security Benefit Life Insurance Company, through their insurance company separate accounts, owned 100% of the outstanding shares of each Series of the Fund, except for Series B, Series D, Series J and Series N, in which it owns 99% of each Series, Series O, Series P, Series Q, Series V, and Series X in which it owns 98% of each Series and Series E and Series Y in which it owns 95%.

120

Notes to Financial Statements

June 30, 2010 (unaudited)

3. Unrealized Appreciation/Depreciation

For federal income tax purposes, the amounts of unrealized appreciation (depreciation) for each Series’ investments at June 30, 2010, were as follows:

	Gross unrealized appreciation		Gross unrealized depreciation			Net unrealized appreciation (depreciation)
Series A
(Large Cap Core)	$	9,497,230	$	(28,897,297	)	$	(19,400,067	)
Series B
(Large Cap Value)		23,620,449		(40,970,417	)		(17,349,968	)
Series C
(Money Market)		12,093		(1,465	)		10,628
Series D
(Global)		9,192,907		(18,860,265	)		(9,667,358	)
Series E
(U.S. Intermediate Bond)		5,105,520		(2,039,260	)		3,066,260
Series J
(Mid Cap Growth)		7,521,330		(6,984,931	)		536,399
Series N
(Managed Asset Allocation)		3,098,950		(5,275,593	)		(2,176,643	)
Series O
(All Cap Value)		7,373,019		(25,631,969	)		(18,258,950	)
Series P
(High Yield)		12,025,499		(8,554,066	)		3,471,433
Series Q
(Small Cap Value)		21,485,439		(5,654,208	)		15,831,231
Series V
(Mid Cap Value)		33,457,197		(31,308,827	)		2,148,370
Series X
(Small Cap Growth)		4,384,457		(2,036,614	)		2,347,843
Series Y
(Large Cap Concentrated Growth)		1,043,574		(3,277,192	)		(2,233,618	)
Series Z
(Alpha Opportunity)		2,327,082		(2,852,694	)		(525,612	)

4. Investment Transactions

Investment transactions for the six months ended June 30, 2010, (excluding overnight investments, short–term commercial paper and U.S. government securities) were as follows:

	Purchases		Proceeds from Sales
Series A
(Large Cap Core)	$	144,644,660	$	103,632,633
Series B
(Large Cap Value)		17,540,977		28,422,291
Series C
(Money Market)		—		—
Series D
(Global)		434,303,097		457,041,167
Series E
(U.S. Intermediate Bond)		34,629,136		31,761,494
Series J
(Mid Cap Growth)		99,867,833		110,437,983
Series N
(Managed Asset Allocation)		16,568,800		20,502,953
Series O
(All Cap Value)		9,363,789		19,313,183
Series P
(High Yield)		29,389,467		58,099,458
Series Q
(Small Cap Value)		26,695,073		34,563,442
Series V
(Mid Cap Value)		47,219,834		43,950,669
Series X
(Small Cap Growth)		15,514,473		17,569,829
Series Y
(Large Cap Concentrated Growth)		34,880,063		35,281,015
Series Z
(Alpha Opportunity)		44,309,706		44,651,546

121

Notes to Financial Statements

June 30, 2010 (unaudited)

5. Open Futures Contracts

Open futures contracts for Series Z as of June 30, 2010, was as follows:

	Position	Number of Contracts	Expiration Date	Contract Amount		Market Value		Unrealized Gain/(Loss)
Series Z
S&P 500 Index Future	Long	77	09/17/2010	$	4,018,457	$	3,952,410	$	(66,047	)

6. Affiliated Issuers

Investments representing 5% or more of the outstanding voting securities of a portfolio company of a fund result in that portfolio company being considered an affiliated company of such fund, as defined in the 1940 Act. The aggregate market value of all securities of affiliated companies held in Series V as of June 30, 2010 amounted to $16,136, which represents 0.0% of net assets. There were no affiliated companies held in any other Series. Transactions in Series V during the six months ended June 30, 2010 in which the portfolio company is an “affiliated person” are as follows:

	Balance 12/31/09		Gross Additions		Gross Reductions		Balance 6/30/10		Realized Gain/(Loss)		Investment Income
Hydrogen Corporation (Shares)		672,346		—		—		672,346		—		—
Hydrogen Corporation (Cost)	$	2,571,575	$	—	$	—	$	2,571,575	$	—	$	—

* As a result of Series V’s beneficial ownership of the common stock of this portfolio company, applicable regulations require that the Series state that it may be deemed an affiliate of the respective portfolio company. The Series disclaims that the “affiliated persons” are affiliates of the Distributor, Advisor, Series or any other client of the Advisor.

122

Notes to Financial Statements

June 30, 2010 (unaudited)

7. Options Written

Information as to options written by the Series during the period ended June 30, 2010 and options outstanding at period end is provided below.

Series A Written Put Options Outstanding

Common Stock	Expiration Date	Exercise Price		Number of Contracts	Market Value
Forest Laboratories, Inc.	07-16-10	$	27.50	166	$	18,260
U.S. Bancorp	09-17-10		22.00	227		34,050
Visa, Inc.	09-17-10		65.00	38		11,780
Wells Fargo & Company	10-15-10		27.00	149		46,190
Western Union Company	08-20-10		15.00	172		16,340
Total call options outstanding (premiums received, $148,716)				752	$	126,620

Series A Written Put Options	Number of Contracts	Premium Amount
Balance at December 31, 2009	—	$	—
Opened	752		148,716
Exercised	—		—
Expired	—		—
Balance at June 30, 2010	752	$	148,716
Series B Written Put Options Outstanding

Common Stock	Expiration Date	Exercise Price		Number of Contracts	Market Value
Forest Laboratories, Inc.	07-16-10	$	27.50	429	$	47,190
U.S. Bancorp	09-17-10		22.00	579		86,850
Visa, Inc.	09-17-10		65.00	96		29,760
Wells Fargo & Company	10-15-10		27.00	238		73,780
Western Union Company	08-20-10		15.00	438		41,610
Total call options outstanding (premiums received, $337,313)				1,780	$	279,190
Series B Written Put options				Number of Contracts	Premium Amount
Balance at December 31, 2009				—	$	—
Opened				1,780		337,313
Exercised				—		—
Expired				—		—
Balance at June 30, 2010				1,780	$	337,313

Series O Written Call Options Outstanding

Common Stock	Expiration Date	Exercise Price		Number of Contracts		Market Value
Leggett & Platt, Inc.	09-17-10	$	25.00	251		$	1,255
Louisiana-Pacific Corp.	08-20-10		12.50	820			8,200
Mednax, Inc.	08-20-10		60.00	175			28,875
Petrohawk Energy Corp.	09-17-10		23.00	390			7,410
Total call options outstanding (premiums received, $280,954)				1,636		$	45,740
Series O Written Call Options				Number of Contracts		Premium Amount
Balance at December 31, 2009				503		$	90,964
Opened				1,728			309,289
Exercised				(117	)		(33,285	)
Expired				(478	)		(86,014	)
Balance at June 30, 2010				1,636		$	280,954
Series O Written Put Options Outstanding
Common Stock	Expiration Date	Exercise Price		Number of Contracts		Market Value
Bunge, Ltd.	07-16-10	$	50.00	172		$	30,960
Forest Laboratories, Inc.	07-16-10		27.50	246			27,060
Total put options outstanding (premiums received, $101,514)				418		$	58,020
Series O Written Put Options				Number of Contracts		Premium Amount
Balance at December 31, 2009				331		$	53,951
Opened				418			101,514
Exercised				(331	)		(53,951	)
Expired				—			—
Balance at June 30, 2010				418		$	101,514

123

Notes to Financial Statements

June 30, 2010 (unaudited)

Series Q Written Call Options Outstanding

Common Stock	Expiration Date	Exercise Price		Number of Contracts		Market Value
Clearwater Paper Corp.	07-16-10		65.00	108		$	540
Louisiana-Pacific Corp.	08-20-10		12.50	1,134			11,340
Mednax, Inc.	08-20-10		60.00	214			35,310
Petrohawk Energy Corp.	09-17-10	$	23.00	277			5,263
Total call options outstanding (premiums received, $312,000)				1,733		$	52,453
Series Q Written Call Options				Number of Contracts		Premium Amount
Balance at December 31, 2009				935		$	243,492
Opened				1,955			377,913
Exercised				(376	)		(66,155	)
Expired				(781	)		(243,250	)
Balance at June 30, 2010				1,733		$	312,000
Series Q Written Put Options				Number of Contracts		Premium Amount
Balance at December 31, 2009				—		$	—
Opened				233			33,717
Exercised				(233	)		(33,717	)
Expired				—			—
Balance at June 30, 2010				—		$	—
Series V Written Call Options Outstanding
Common Stock	Expiration Date	Exercise Price		Number of Contracts		Market Value
Leggett & Platt, Inc.	09-17-10		25.00	725		$	3,625
Louisiana-Pacific Corp.	08-20-10		12.50	1,430			14,300
Mednax, Inc.	08-20-10		60.00	375			61,875
Petrohawk Energy Corp.	09-17-10	$	23.00	738			14,022
Total call options outstanding (premiums received, $561,196)				3,268		$	93,822
Series V Written Call Options				Number of Contracts		Premium Amount
Balance at December 31, 2009				1,796		$	309,842
Opened				3,818			724,029
Exercised				(925	)		(233,955	)
Expired				(1,421	)		(238,720	)
Balance at June 30, 2010				3,268		$	561,196
Series V Written Put Options Outstanding
Common Stock	Expiration Date	Exercise Price		Number of Contracts		Market Value
American Water Works, Inc.	12-17-10	$	20.00	750		$	108,750
Bunge, Ltd.	07-16-10		50.00	330			59,400
Forest Laboratories, Inc.	07-16-10		27.50	479			52,690
Total put options outstanding (premiums received, $285,381)				1,559		$	220,840
Series V Written Put Options				Number of Contracts		Premium Amount
Balance at December 31, 2009				841		$	131,046
Opened				2,139			369,312
Exercised				(597	)		(97,308	)
Expired				(824	)		(117,669	)
Balance at June 30, 2010				1,559		$	285,381

124

Notes to Financial Statements

June 30, 2010 (unaudited)

8. Derivative Investment Holdings Categorized by Risk Exposure

The following disclosures are intended to enable investors to better understand how and why the Fund uses derivative instruments, how these derivative instruments are accounted for and their effects on the Funds’ financial position and results of operations. None of the derivatives currently held by the Fund are being used as hedging instruments.

The Fund seeks to gain exposure to its respective benchmark by investing in financial-linked derivative instruments, including futures and options on equity securities. The following table represents the notional amount of derivative instruments outstanding, as an approximate percentage of the Fund’s net assets on a daily basis, while the risk to the Fund is limited to the profit earned on such derivatives:

Fund	Approximate percentage of Fund’s net assets on a daily basis
Series Z	21.19%

The following is a summary of the location of derivative investments on the Fund’s Statements of Assets and Liabilities as of June 30, 2010:

Location on the Statements of Assets and Liabilities

Derivative Investments Type	Asset Derivatives	Liability Derivatives
Futures - equity contracts	Receivable: Variation margin	Payable: Variation margin
Options - equity contracts	Investments, at value	Outstanding options written, at value

The following table sets forth the fair value of the Fund’s derivatives contracts by primary risk exposure as of June 30, 2010:

Liability Derivative Investments Value

Fund	Futures Equity Contracts*		Options Equity Contracts		Total Value at June 30, 2010
Series A (Large Cap Core Series)	$	—	$	126,620	$	126,620
Series B (Large Cap Value Series)		—		279,190		279,190
Series O (All Cap Value Series)		—		103,760		103,760
Series Q (Small Cap Value Series)		—		52,453		52,453
Series V (Mid Cap Value Series)		—		314,662		314,662
Series Z (Alpha Opportunity Series)		66,047		—		66,047

* Includes cumulative appreciation (depreciation) of futures contracts as reported in the Notes to Financial Statements. Only current day’s variation margin is reported within the Statement of Assets and Liabilities.

The following is a summary of the location of derivative investments on the Fund’s Statements of Operations as of June 30, 2010:

Location on the Statements of Operations

Derivative Investments Type	Location of Gain (Loss) on Derivatives
Futures - equity contracts	Net realized gain (loss) on futures contracts and change in net unrealized appreciation (depreciation) on futures contracts
Options - equity contracts	Net realized gain (loss) on options written and change in net unrealized appreciation (depreciation) on options written

125

Notes to Financial Statements

June 30, 2010 (unaudited)

The following is a summary of the Fund’s realized gain (loss) and change in unrealized appreciation (depreciation) on derivative investments recognized in the Statements of Operations categorized by primary risk exposure as of June 30, 2010:

Realized Gain (Loss) on Derivative Investments Recognized in the Statement of Operations

Fund	Futures Equity Contracts			Options Equity Contracts		Total Value at June 30, 2010
Series O (All Cap Value Series)	$	—		$	86,014	$	86,014
Series Q (Small Cap Value Series)		—			99,872		99,872
Series V (Mid Cap Value Series)		—			356,388		356,388
Series Z (Alpha Opportunity Series)		(236,255	)		—		(236,255	)

Change in Unrealized Appreciation (Depreciation) on Derivative Investments

Recognized in the Statement of Operations

Fund	Futures Equity Contracts			Options Equity Contracts		Total Value at June 30, 2010
Series A (Large Cap Core Series)	$	—		$	22,096	$	22,096
Series B (Large Cap Value Series)		—			58,122		58,122
Series O (All Cap Value Series)		—			310,986		310,986
Series Q (Small Cap Value Series)		—			263,875		263,875
Series V (Mid Cap Value Series)		—			460,816		460,816
Series Z (Alpha Opportunity Series)		(85,971	)		—		(85,971	)

126

Notes to Financial Statements

June 30, 2010 (unaudited)

9. Fair Value of Financial Instruments

In accordance with FASB ASC 820, Fair Value Measurements and Disclosure (ASC 820), fair value is defined as the price that the Fund would receive to sell an investment or pay to transfer a liability in an orderly transaction with an independent buyer in the principal market, or in the absence of a principal market the most advantageous market for the investment or liability. ASC 820 establishes a three-tier hierarchy to distinguish between (1) inputs that reflect the assumptions market participants would use in pricing an asset or liability developed based on market data obtained from sources independent of the reporting entity (observable inputs) and (2) inputs that reflect the reporting entity’s own assumptions about the assumptions market participants would use in pricing an asset or liability developed based on the best information available in the circumstances (unobservable inputs) and to establish classification of fair value measurements for disclosure purposes. Various inputs are used in determining the value of the Fund’s investments. The inputs are summarized in the three broad levels listed below:

Level 1	-	quoted prices in active markets for identical securities. The types of assets and liabilities carried at Level 1 fair value generally are government and agency securities, equities listed in active markets, certain futures and certain options.
Level 2	-	other significant observable inputs (including quoted prices for similar securities, interest rates, prepayment speeds, credit risk, etc.). The types of assets and liabilities carried at Level 2 fair value generally are municipal bonds, certain mortgage and asset-backed securities, certain corporate debt, commercial paper and repurchase agreements.
Level 3	-	significant unobservable inputs (including the Fund’s own assumptions in determining the fair value of investments). The types of assets and liabilities carried at Level 3 fair value generally are certain mortgage and asset-backed securities, certain corporate debt and certain derivatives.

Observable inputs are those based on market data obtained from sources independent of the Fund, and unobservable inputs reflect the Fund’s own assumptions based on the best information available.

The inputs or methodology used for valuing securities are not necessarily an indication of the risk association with investing in those securities.

127

Notes to Financial Statements

June 30, 2010 (unaudited)

Description	Total		LEVEL 1 Quoted prices in active markets for  identical assets		LEVEL 2 Significant other observable inputs		LEVEL 3 Significant observable inputs
SBL Fund:
Series A (Large Cap Core Series)
ASSETS:
Common Stocks	$	204,613,967	$	204,613,967	$	—	$	—
LIABILITIES:
Written Options		126,620		126,620		—		—
Series B (Large Cap Value Series)
Common Stocks		243,142,596		243,142,596		—		—
Repurchase Agreement		12,029,000		—		12,029,000		—
Total		255,171,596		243,142,596		12,029,000		—
Written Options		279,190		279,190		—		—
Series C (Money Market Series)
Mortgage Backed Securities		13,196,401		—		13,196,401		—
Asset Backed Securities		300,961		—		300,961		—
U.S. Government Sponsored Agency Bonds & Notes		36,589,335		—		36,589,335		—
Commercial Paper		44,446,419		—		44,446,419		—
Repurchase Agreement		55,989,000		—		55,989,000		—
Total		150,522,116		—		150,522,116		—
Series D (Global Series)
Common Stocks		103,854,458		103,854,458		—		—
Foreign Stocks		119,209,098		16,995,347		102,213,751		—
Short Term Investments		4,358,407		—		4,358,407		—
Total		227,421,963		120,849,805		106,572,158		—
Series E (U.S. Intermediate Bond Series)
Corporate Bonds		78,534,691		—		78,534,691		—
Preferred Stocks		2,103,596		—		1,896,800		206,796
Mortgage Backed Securities		1,623,900		—		1,623,900		—
Asset Backed Securities		300,854		—		300,854		—
U.S. Government Sponsored Agency Bonds & Notes		5,045,585		—		5,045,585		—
U.S. Government Securities		42,311,786		42,311,786		—		—
Total		129,920,412		42,311,786		87,401,830		206,796
Series J (Mid Cap Growth Series)
Common Stocks		131,928,926		131,928,926		—		—
Warrants		947		—		947		—
Total		131,929,873		131,928,926		947		—

128

Notes to Financial Statements

June 30, 2010 (unaudited)

Description	Total		LEVEL 1 Quoted prices in active markets for  identical assets		LEVEL 2 Significant other observable inputs		LEVEL 3 Significant observable inputs
Series N (Managed Asset Allocation Series)
Common Stocks	$	35,124,094	$	35,124,094	$	—	$	—
Foreign Stocks		8,302,465		284,036		8,018,429		—
Preferred Stocks		4,857		357		4,500		—
Warrants		10		10		—		—
Corporate Bonds		9,646,512		—		9,646,512		—
Foreign Bonds		192,830		—		192,830		—
Municipal Bonds		353,463		—		353,463		—
Mortgage Backed Securities		8,618,314		—		8,618,314		—
Asset Backed Securities		949,154		—		949,154		—
U.S. Government Sponsored Agency Bonds & Notes		10,493		—		10,493		—
U.S. Government Securities		5,111,961		5,111,961		—		—
Short Term Investments		2,307,225		—		2,307,225		—
Total		70,621,378		40,520,458		30,100,920		—
Series O (All Cap Value Series)
ASSETS:
Common Stocks		143,796,043		143,796,043		—		—
LIABILITIES:
Written Options		103,760		103,760		—		—
Series P (High Yield series)
Common Stocks		667,117		561,565		—		105,552
Preferred Stocks		479,301		417,978		—		61,323
Warrant		26,623		—		—		26,623
Convertible Bonds		5,961,499		—		5,961,499		—
Corporate Bond		100,110,449		—		99,585,802		524,647
Foreign Bond		447,318		—		447,318		—
Total		107,692,307		979,543		105,994,619		718,145
Series Q (Small Cap Value Series)
Common Stocks		113,095,371		113,095,371		—		—
LIABILITIES:
Written Options		52,453		52,453		—		—
Series V (Mid Cap Value Series)
ASSETS:
Common Stocks		280,499,859		280,499,859		—		—
Warrants		977		—		997		—
Convertible Bonds		2,520,000		—		2,520,000		—
Total		283,020,836		280,499,859		2,520,977		—
LIABILITIES:
Options		314,662		314,662		—		—
Series X (Small Cap Growth Series)
Common Stocks		31,898,249		31,898,249		—		—
Series Y (Large Cap Concentrated Growth Series)
Common Stocks		36,218,518		36,218,518		—		—

129

Notes to Financial Statements

June 30, 2010 (unaudited)

Description	Total		LEVEL 1 Quoted prices in active markets for identical assets		LEVEL 2 Significant other observable inputs		LEVEL 3 Significant observable inputs
Series Z (Alpha Opportunity Series)
ASSETS:
Common Stocks	$	16,162,168	$	16,162,168	$	—	$	—
Foreign Stocks		326,720		—		326,720		—
U.S. Government Sponsored Agency Bonds & Notes		1,999,846		—		1,999,846		—
Short Term Investments		804,902		—		804,902		—
Repurchase Agreement		2,758,081		—		2,758,081		—
Total		22,051,717	$	16,162,168		5,889,549		—
LIABILITIES:
Futures Contracts		66,047		—		66,047		—
Common Stocks (sold short)		4,529,512		602,615		—		3,926,897
Foreign Stocks (sold short)		3,859,758		—		—		3,859,758
Total		8,455,319		602,615		66,047		7,786,655

130

Notes to Financial Statements

June 30, 2010 (unaudited)

Following is a reconciliation of Level 3 assets for which significant unobservable inputs were used to determine fair value for the six months ended June 30, 2010:

	LEVEL 3 - Fair value measurement using  significant unobservable inputs
	Securities			Total
Series E (U.S. Intermediate Bond Series)
ASSETS:
Beginning Balance	$	224,706		$	224,706
Total realized gains or losses included in earnings		—			—
Total unrealized gains or losses included in earnings		(17,910	)		(17,910	)
Purchases, sales, issuances, and settlements (net)		—			—
Transfers in and/or out of Level 3		—			—
Ending Balance	$	206,796		$	206,796
Series P (High Yield Series)
ASSETS:
Beginning Balance	$	781,517		$	781,517
Total realized gains or losses included in earnings		—			—
Total unrealized gains or losses included in earnings		235,139			235,139
Purchases, sales, issuances, and settlements (net)		(5,102	)		(5,102	)
Transfers in and/or out of Level 3		(293,409	)		(293,409	)
Ending Balance	$	718,145		$	718,145
Series Z (Alpha Opportunity Series)
LIABILITIES:
Beginning Balance	$	7,786,655		$	7,786,655
Total realized gains or losses included in earnings		—			—
Total unrealized gains or losses included in earnings		—			—
Purchases, sales, issuances, and settlements (net)		—			—
Transfers in and/or out of Level 3		—			—
Ending Balance	$	7,786,655		$	7,786,655

131

Notes to Financial Statements

June 30, 2010 (unaudited)

The Funds adopted updated provisions surrounding fair value measurements and disclosures effective March 31, 2010. This update applies to the Funds’ disclosures about transfers in and out of Level 1 and Level 2 of the fair value hierarchy and the reasons for the transfers as well as to disclosures about the valuation techniques and inputs used to measure fair value for investments that fall in either Level 2 or Level 3 fair value hierarchy.

Transfers between investment Levels may occur as the markets fluctuate and/or the availability of data used in an investment’s valuation changes. The Funds recognized transfers between the Levels as of the end of the period.

As of June 30, 2010, the following Funds had securities transfer from Level 1 to Level 2:

Fund	Long Market Value		Short Market Value
Series D (Global Fund)	$	102,213,748	$	—
Series N (Managed Asset Allocation Fund)		8,018,429		—
Series Z (Alpha Opportunity Fund)		326,721		(3,335,642	)

The fair market value of these securities were adjusted due to developments which occurred between the time of the close of the foreign markets in which they trade and the close of business on the NYSE which resulted in their Level 2 classification. There were no securities that transferred from Level 2 to Level 1.

132

Notes to Financial Statements

June 30, 2010 (unaudited)

10. Federal Tax Matters

At December 31, 2009, the following Series had capital loss carryovers and deferred post-October losses to offset future realized capital gains as follows:

	Capital  Loss Carryover Utilized in 2009		Capital  Loss Carryovers Expired in 2009		Capital Loss Carryovers		Expires In	Deferred Post-October Losses
Series A	$	—	$	—	$	23,906,984	2016	$	3,148,561
		—		—		29,087,804	2017
	$	—	$	—	$	52,994,788
Series B	$	—	$	5,057,813	$	—	2009		2,174,233
		—		—		87,172,720	2010
		—		—		26,620,854	2011
		—		—		29,474,335	2016
		—		—		27,901,075	2017
	$	—	$	5,057,813	$	171,168,984
Series D	$	—	$	—	$	57,035,385	2016		6,160
		—		—		52,931,604	2017
	$	—	$	—	$	109,966,989
Series E	$	—	$	—	$	719,015	2010		—
		—		—		350,320	2012
		—		—		2,731,334	2014
		—		—		838,194	2015
		—		—		937,378	2016
		—		—		12,363,518	2017
	$	—	$	—	$	17,939,759
Series J	$	—	$	—	$	48,891,509	2016		781,987
		—		—		29,862,503	2017
	$	—	$	—	$	78,754,012
Series N	$	—	$	—	$	2,648,702	2016		110,779
		—		—		9,066,990	2017
	$	—	$	—	$	11,715,692
Series O	$	—	$	—	$	17,818,296	2016		—
		—		—		12,798,147	2017
	$	—	$	—	$	30,616,443
Series P	$	52,155	$	—	$	1,117,474	2016		1,155,379
Series Q	$	—	$	—	$	21,648,883	2017		—
Series V	$	—	$	—	$	27,781,912	2017		—
Series X	$	—	$	—	$	7,184,628	2010		—
		—		—		11,654,235	2016
		—		—		11,332,381	2017
	$	—	$	—	$	30,171,244
Series Y	$	—	$	9,340,921	$	—	2009		825,101
		—		—		9,284,391	2010
		—		—		6,092,310	2011
		—		—		338,147	2012
		—		—		9,012,784	2016
		—		—		6,370,486	2017
	$	—	$	9,340,921	$	31,098,118
Series Z	$	—	$	—	$	10,774,584	2016		—
		—		—		2,129,392	2017
	$	—	$	—	$	12,903,976

133

Notes to Financial Statements

June 30, 2010 (unaudited)

10. Federal Tax Matters (continued)

The Fund declared ordinary and long-term capital gain consent dividends for the year ended December 31, 2009, as shown below.

	Ordinary Consent Dividends
Series A	$	1,140,095
Series B		2,616,829
Series D		1,919,749
Series E		3,803,661
Series N		1,350,482
Series O		1,474,436
Series P		9,769,938
Series V		2,528,388
Series Y		126,624

Short term distributions are treated as ordinary distributions for federal income tax purposes.

As of December 31, 2009, the components of distributable earnings/(deficit) on a tax basis were as follows:

	Undistributed Ordinary Income		Undistributed Long-term Gain		Accumulated Capital and Other Losses			Unrealized Appreciation (Depreciation)*			Distributable Earnings (Deficit)**
Series A	$	1,140,095	$	—	$	(56,143,349	)	$	10,246,911		$	(44,756,343	)
Series B		2,616,829		—		(173,343,216	)		9,885,489			(160,840,898	)
Series C		—		—		—			(26,509	)		(26,509	)
Series D		1,919,749		—		(109,973,149	)		27,574,243			(80,479,157	)
Series E		3,803,661		—		(17,939,759	)		(2,051,817	)		(16,187,915	)
Series J		—		—		(79,535,999	)		21,518,980			(58,017,019	)
Series N		1,350,482		—		(11,826,471	)		2,024,359			(8,451,630	)
Series O		1,474,436		—		(30,616,443	)		(8,504,993	)		(37,647,000	)
Series P		9,769,938		—		(2,272,853	)		5,688,966			13,186,051
Series Q		—		—		(21,648,883	)		27,382,025			5,733,142
Series V		2,528,388		—		(27,781,912	)		9,901,932			(15,351,592	)
Series X		—		—		(30,171,244	)		6,943,676			(23,227,568	)
Series Y		126,624		—		(31,923,219	)		4,549,384			(27,247,211	)
Series Z		—		—		(12,903,976	)		510,071			(12,393,905	)

* The difference between book basis and tax basis unrealized appreciation (depreciation) is attributable primarily to the tax deferral of losses on wash sales, the realization of unrealized gains for tax purposes on futures contracts, differing book and tax methods for bond discount/premium amortization, and passive foreign investment companies.

** The difference between total distributable earnings/(deficit) for book and tax purposes is related to the interest accrued on defaulted bonds for tax purposes.

134

Notes to Financial Statements

June 30, 2010 (unaudited)

11. Series Z

Series Z - Alpha Opportunity Series (“Series Z”) contracted with Lehman Brothers International Europe (“LBIE”) to provide prime brokerage services related to Series Z’s short selling. On September 15, 2008, LBIE was placed into administration and a third party administrator has been named (the “Administrator”). Series Z’s exposure to LBIE consists of short sale proceeds held by LBIE, and restricted long positions held at Series Z’s custodian, as collateral for said short sales. Series Z has delivered a Notice of Termination of Loans to LBIE and the Administrator. Series Z is working to resolve these issues with LBIE and the Administrator. As of June 30, 2010, included in the statement of net assets are the value of restricted long positions of $7,329,308, restricted cash representing the value of short sale proceeds of $4,187,441 and liabilities for short sales of $7,786,655 representing the value of securities sold short at the date of termination. Until such time as the liability for short sales is settled and all restrictions are removed, Series Z cannot sell such restricted long positions and/or utilize the restricted cash balances to achieve Series Z’s investment objectives and/or meet Series Z’s redemption or other obligations. The liability for short sales recorded at June 30, 2010 may differ from the amounts ultimately due at settlement due to the inherent uncertainties in any such estimation process, including various challenges which could be made in the bankruptcy proceedings. Such differences, if any, will be reported in future periods when additional information is provided by the Administrator and the differences may be material.

12. Other Liabilities

Series A – Equity Series (“Series A”) and Series V – Mid Cap Value Series (“Series V”) each wrote put option contracts through Lehman Brothers, Inc., (“Lehman”) that were exercised prior to the option contracts expiration and prior to the bankruptcy filing by Lehman, during September 2008. However, these transactions have not settled and the securities have not been delivered to Series A or Series V as of June 30, 2010.

Although the ultimate resolution of these transactions is uncertain, Series A and Series V have recorded a liability on their respective books equal to the difference between the strike price on the put options and the market prices of the underlying security on the exercise date. The amount of liability recorded by Series A and Series V as of June 30, 2010 was $18,615 for Series A and $205,716 for Series V. Any differences will be reported in future periods when transactions have settled.

13. Fund Merger

On April 30, 2010, Series A (Large Cap Core Series) acquired all of the net assets of Series H (Enhanced Index Series), a separate series of the Fund, in exchange for shares of the Series A (Large Cap Core Series), pursuant to an agreement and plan of reorganization approved by the Board of Directors and approved by the shareholders of the Series H (Enhanced Index Series). The acquisition was accomplished through a combination of a tax-free exchange of the outstanding shares of the Series H (Enhanced Index Series) 5,066,966 valued at $47,882,828 for respective shares of the Series A (Large Cap Core Series) 2,188,429, with the remainder coming from capital transactions. For financial reporting purposes, the net assets received and shares issued by Series A (Large Cap Core Series) were recorded at fair value; however, the Series H (Enhanced Index Series)’s cost of the investments was carried forward to align ongoing reporting of Series A (Large Cap Core Series) realized and unrealized gains and losses with amounts distributable to shareholders for tax purposes.

Series H (Enhanced Index Series)’s net assets on April 30, 2010 were $47,882,828, including $1,097,678 of unrealized appreciation. Series H (Enhanced Index Series)’s net assets were primarily comprised of investments with a fair value of $45,146,242. The aggregate net assets of Series A (Large Cap Core Series) immediately before and after the acquisition were $204,742,194 and $252,625,022, respectively.

The financial statements reflect the operations of the Series A (Large Cap Core Series) for the period prior to the acquisition and the combined fund for the period subsequent to the fund merger. Because the combined investment portfolios have been managed as a single integrated portfolio since the acquisition was completed, it is not practicable to separate the amounts of revenue and earnings of the Series H (Enhanced Index Series) that have been included in the combined fund’s Statement of Operations since the acquisition was completed. Assuming the acquisition had been completed January 1, 2010, Series A (Large Cap Core Series) pro-forma net investment income, net gain on investments and net increase in net assets from operations for the period January 1, 2010 to June 30, 2010 would have been $46,821, $1,527,434 and $22,176,749, respectively. Security Investors, LLC and Series H (Enhanced Index Series) bore one-half of the expenses related to the reorganization.

14. Subsequent Events

Management has evaluated events or transactions that may have occurred since June 30, 2010, that would merit recognition or disclosure in the financial statements.

Guggenheim SBC Holdings, LLC (“Guggenheim SBC Holdings”), an investor group managed by Guggenheim Partners, LLC (“Guggenheim”), acquired control of Security Benefit Corporation (“SBC”), the parent company of Security Investors, LLC, the Funds’ investment adviser (the “Investment Adviser”) and Security Global Investors, LLC, the sub-adviser to certain of the Funds, pursuant to an agreement between SBC and Guggenheim SBC Holdings. Under the agreement, Guggenheim SBC Holdings received a 100% ownership stake in SBC and consequently acquired control of the Investment Adviser (the “Purchase Transaction”). Guggenheim is a global, independent, privately held, diversified financial services firm with more than $100 billion in assets under supervision. The Purchase Transaction closed on July 30, 2010.

135

Notes to Financial Statements

June 30, 2010 (unaudited)

Under the Investment Company Act of 1940, the closing of the Purchase Transaction had the effect of terminating the Funds’ investment advisory agreements with the Investment Adviser and any investment sub-advisory agreements entered on behalf of a Fund (together, the “Previous Agreements”). New investment advisory (“New Investment Advisory Agreements”) and sub-advisory agreements (“New Sub-Advisory Agreements”) were approved by the Board of Directors of the Funds. The New Investment Advisory Agreements were approved by Fund shareholders in a series of special meetings of shareholders. The terms of the New Investment Advisory Agreements and New Sub-Advisory Agreements are substantially identical to the corresponding Previous Agreements, except with respect to the date of execution.

Effective July 30, 2010, the Funds’ distributor, Rydex Distributors, Inc., a Maryland corporation, became Rydex Distributors, LLC, a Kansas limited liability company.

Proxy Results

A special meeting of the shareholders of the SBL Fund, Series H (Enhanced Index) was held on April 23, 2010. Each matter voted upon at the meeting, as well as the number of votes cast for, against, withheld or abstentions with respect to such matters are set forth below:

(1) The approval of a plan of reorganization for SBL Fund, Series H (Enhanced Index) into SBL Fund Series A (Large Cap Core)

Votes for	Votes Against/Abstentions
4,716,929	504,509

At a special meeting of shareholders held on May 21, 2010, the shareholders of the Funds voted on whether to approve a new investment advisory agreement between SBL Fund and Security Investors, LLC. A description of the number of shares voted is as follows:

Fund	Shares For	Shares Against	Shares Abstained
Series A (Large Cap Core Series)	8,171,629	298,863	692,760
Series B (Large Cap Value Series)	11,195,868	286,083	943,099
Series C (Money Market Series)	9,715,035	102,525	1,263,997
Series D (Global Series)	27,069,580	614,707	1,954,266
Series E (U.S. Intermediate Bond Series)	9,396,785	209,312	933,852
Series J (Mid Cap Growth Series)	5,465,784	307,032	497,421
Series N (Managed Asset Allocation Series)	3,637,114	102,721	744,083
Series O (All Cap Value Series)	7,257,458	223,657	797,221
Series P (High Yield Series)	4,763,954	97,697	461,192
Series Q (Small Cap Value Series)	3,954,882	129,166	295,844
Series V (Mid Cap Value Series)	5,483,563	168,454	473,996
Series X (Small Cap Growth Series)	2,133,138	62,042	176,958
Series Y (Large Cap Concentrated Growth Series)	4,208,404	96,991	450,168
Series Z (Alpha Opportunity Series)	1,374,790	13,256	140,949

At a special meeting of shareholders held on May 21, 2010, the shareholders of the Funds also voted on whether to approve a new investment sub-advisory agreement between Security Investors, LLC and Security Global Investors, LLC. A description of the number of shares voted is as follows:

Fund	Shares For	Shares Against	Shares Abstained
Series D (Global Series)	27,045,179	598,699	1,994,674
Series Z (Alpha Opportunity Series)	1,370,206	22,471	136,317

136

Directors (unaudited)

The business address of each director and officer is One Security Benefit Place, Topeka, KS 66636-0001

Name (Date of Birth) Year Elected***	Principal Occupation(s) During Past 5 Years
Donald A. Chubb, Jr.** (12-14-46) 1994	Business Broker - Griffith & Blair Realtors
Harry W. Craig, Jr.** (05-11-39) 2004	Chairman, CEO, Secretary & Director - The Martin Tractor Company, Inc.
Jerry B. Farley** (09-20-46) 2005	President - Washburn University
Penny A. Lumpkin** (08-20-39) 1993	Partner - Vivian’s Gift Shop (Corporate Retail) Vice President - Palmer Companies, Inc. (Small Business and Shopping Center Development) Vice President - PLB (Real Estate Equipment Leasing)
Maynard F. Oliverius** (12-18-43) 1998	President & Chief Executive Officer - Stormont-Vail HealthCare
Richard M. Goldman* (03-04-61) 2008 (President, Director & Chairman of the Board)	Senior Vice President - Security Benefit Corporation Director, First Security Benefit Life Insurance and Annuity Company of New York President – Security Investors, LLC President & Director, Security Global Investors, LLC CEO, President & Director, Rydex Distributors, Inc. President & CEO, Rydex Holdings, LLC CEO & Director, Padco Advisors, Inc. CEO & Director, Padco Advisors II, Inc. Director, Rydex Fund Services, Inc. Director – Security Distributors, Inc. (2007 – 2009) Managing Member – RM Goldman Partners, LLC (2006 – 2007) President & CEO – ForstmannLeff (2003 – 2005)

* This director is deemed to be an “interested person” of the Funds under the Investment Company Act of 1940, as amended, by reason of his position with the Fund’s Investment Manager and/or the parent of the Investment Manager.

** These directors serve on the Fund’s joint audit committee, the purpose of which is to meet with the independent registered public accounting firm, to review the work of the independent registered public accounting firm, and to oversee the handling by Security Investors of the accounting function for the Funds.

*** Each director oversees 29 Rydex | SGI Funds portfolios and serves until the next annual meeting, or until a successor has been duly elected and qualified.

137

Officers (unaudited)

The business address of each director and officer is One Security Benefit Place, Topeka, KS 66636-0001

Name (Date of Birth) Title - Year Elected	Principal Occupation(s) During Past 5 Years
Mark P. Bronzo (11-01-60) Vice President - 2008	Portfolio Manager, Security Investors, LLC Managing Director & Chief Compliance Officer, Nationwide Separate Accounts LLC (2003 - 2008)
Brenda M. Harwood (11-03-63) Chief Compliance Officer - 2004 Treasurer - 1988	Vice President, Chief Compliance Officer - Security Investors, LLC Chief Compliance Officer - Security Global Investors, LLC Assistant Vice President - Security Benefit Life Insurance Company (2004-2009) Vice President, Assistant Treasurer (2006-2009) & Director - Security Distributors, Inc. (2004-2009)
Amy J. Lee (06-05-61) Secretary - 1987 Vice President - 2007	Secretary - Security Investors, LLC Secretary & Chief Compliance Officer - Security Distributors, Inc. Vice President, Associate General Counsel & Assistant Secretary -Security Benefit Life Insurance Company & Security Benefit Corporation Secretary, Security Global Investors, LLC Associate General Counsel, First Security Benefit Life Insurance and Annuity of New York Secretary, Security Financial Resources, Inc. Vice President & Assistant Secretary, Rydex Series Funds, Rydex EFT Trust, Rydex Dynamic Funds, and Rydex Variable Trust Secretary, Rydex Holdings, LLC Vice President and Secretary, Rydex Advisory Services, LLC President and Secretary, Advisor Research Center, Inc. Director, Brecek & Young Advisors, Inc. (2004-2008)
Mark Mitchell (08-24-64) Vice President - 2003	Vice President & Portfolio Manager - Security Investors, LLC Vice President & Portfolio Manager - Security Benefit Life Insurance Company
Joseph C. O’Connor (07-15-60) Vice President - 2008	Portfolio Manager, Security Investors, LLC Managing Director, Nationwide Separate Accounts LLC
Keith Fletcher (2-18-58) Vice President - 2009	Vice President of Rydex Series Funds, Rydex Variable Trust, Rydex Dynamic Funds and Rydex ETF Trust Vice President of Rydex Investments Vice President and Director of Rydex Distributors, Inc. Vice President of Security Global Investors, LLC
Daniel W. Portanova (10-02-60) Vice President - 2008	Portfolio Manager, Security Investors, LLC Managing Director, Nationwide Separate Accounts LLC
James P. Schier (12-28-57) Vice President - 1998	Vice President & Senior Portfolio Manager - Security Investors, LLC Vice President & Senior Portfolio Manager - Security Benefit Life Insurance Company
Christopher D. Swickard (10-09-65) Assistant Secretary - 1996	Assistant Secretary - Security Investors, LLC and Security Distributors, Inc. Second Vice President & Assistant General Counsel - Security Benefit Corporation and Security Benefit Life Insurance Company Assistant General Counsel, first Security Benefit Life Insurance and Annuity Company of New York
David G. Toussaint (10-10-66) Vice President - 2001	Vice President & Portfolio Manager - Security Investors, LLC Assistant Vice President & Portfolio Manager - Security Benefit Life Insurance Company (2005 - 2009)

* Officers serve until the next annual meeting or until a successor has been duly elected and qualified.

138

Rydex | SGI Privacy Policies

Rydex Funds, Rydex | SGI Funds, Rydex Investments, Rydex Distributors, LLC, Security Investors, LLC, Security Global Investors, LLC, Security Distributors, Inc. and Rydex Advisory Services (Collectively “Rydex”)

Our Commitment to You

When you become a Rydex | SGI investor, you entrust us with not only your hard-earned money but also with personal and financial information about you. We recognize that your relationship with us is based on trust and that you expect us to act responsibly and in your best interests. Because we have access to this private information about you, we hold ourselves to the highest standards in its safekeeping and use. This means, most importantly, that we do not sell client information to anyone—whether it is your personal information or if you are a current or former Rydex | SGI client.

The Information We Collect About You

In the course of doing business with shareholders and investors, we collect nonpublic personal information about you. You typically provide personal information when you complete a Rydex | SGI account application or when you request a transaction that involves Rydex and Rydex | SGI funds or one of the Rydex | SGI affiliated companies. “Nonpublic personal information” is personally identifiable private information about you. For example, it includes information regarding your name and address, Social Security or taxpayer identification number, assets, income, account balance, bank account information and investment activity (e.g., purchase and redemption history).

How We Handle Your Personal Information

As emphasized above, we do not sell information about current or former clients or their accounts to third parties. Nor do we share such information, except when necessary to complete transactions at your request or to make you aware of related investment products and services that we offer. Additional details about how we handle your personal information are provided below. To complete certain transactions or account changes that you direct, it may be necessary to provide identifying information to companies, individuals or groups that are not affiliated with Rydex | SGI. For example, if you ask to transfer assets from another financial institution to Rydex | SGI, we will need to provide certain information about you to that company to complete the transaction. To alert you to other Rydex | SGI investment products and services, we may share your information within the Rydex | SGI family of affiliated companies. This would include, for example, sharing your information within Rydex | SGI so we can make you aware of new Rydex and Rydex | SGI funds or the services offered through another Rydex | SGI affiliated company. In certain instances, we may contract with nonaffiliated companies to perform services for us. Where necessary, we will disclose information we have about you to these third parties. In all such cases, we provide the third party with only the information necessary to carry out its assigned responsibilities and only for that purpose. And we require these third parties to treat your private information with the same high degree of confidentiality that we do. In certain instances, we may share information with other financial institutions regarding individuals and entities in response to the U.S.A. Patriot Act. Finally, we will release information about you if you direct us to do so, if we are compelled by law to do so or in other circumstances permitted by law.

Opt Out Provisions

We do not sell your personal information to anyone. The law allows you to “opt out” of only certain kinds of information sharing with third parties. The firm does not share personal information about you with any third parties that triggers this opt-out right. This means YOU ARE ALREADY OPTED OUT.

How We Protect Privacy Online

Our concern for the privacy of our shareholders also extends to those who use our web site, www.rydex-sgi.com. Our web site uses some of the most secure forms of online communication available, including encryption technology, Secure Socket Layer (SSL) protocol, firewalls and user names and passwords. These technologies provide a high level of security and privacy when you access your account information or initiate online transactions. The Rydex | SGI web site offers customized features that require our use of “http cookies”—tiny pieces of information that we ask your browser to store. However, we make very limited use of these cookies. We only use cookies for session management and security features on the Rydex | SGI web site. We do not use them to pull data from your hard drive, to learn your

139

Rydex | SGI Privacy Policies (concluded)

email address, or to view data in cookies created by other web sites. We will not share the information in our cookies or give others access to it. See the legal information area on our web site for more details about web site security and privacy features.

How We Safeguard Your Personal Information

We restrict access to nonpublic personal information about shareholders to our employees and in some cases to third parties (for example, the service providers described above) as permitted by law. We maintain strict physical, electronic and procedural safeguards that comply with federal standards to guard your nonpublic personal information.

We’ll Keep You Informed

As required by federal law, we will notify shareholders of our privacy policy annually. We reserve the right to modify this policy at any time, but rest assured that if we do change it, we will tell you promptly. You will also be able to access our privacy policy from our web site at www.rydex-sgi.com. Should you have any questions regarding our privacy policy, contact us at 800.820.0888 or 301.296.5100.

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Other Information

The Fund files a complete schedule of portfolio holdings with the U.S. Securities and Exchange Commission for the first and third quarters of each fiscal year on Form N-Q. The Forms N-Q of each such Fund are available on the Commission’s website at www.sec.gov. The Forms N-Q may be reviewed and copied at the Commission’s Public Reference Room in Washington, DC. Information on the operation of the Public Reference Room may be obtained by calling 1-800-SEC-0330. The portfolio holdings of the Fund are available on their website, www.securitybenefit.com and www.rydex-sgi.com or by calling 1-800-888-2461.

A description of the policies and procedures that the Fund uses to determine how to vote proxies relating to portfolio securities is available upon request, free of charge by calling 1-800-888-2461, or accessing the U.S. Securities and Exchange Commission website at www.sec.gov. Information regarding how the Funds voted proxies relating to portfolio securities during the 12 month period ended June 30, 2010 is available upon request, free of charge by calling 1-800-888-2461, or accessing the U.S. Securities and Exchange Commission website at www.sec.gov.

The statement of additional information (“SAI”) includes additional information about the Funds’ Directors and is available upon request without charge by calling 1-800-888-2461.

141

	BULK RATE U.S. POSTAGE PAID LANCASTER, PA PERMIT NO. 485
One Security Benefit Place • Topeka, Kansas 66636-0001 • securitybenefit.com
Security Distributors, Inc.

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. Schedule of Investments.

The Schedule of Investments is included under Item 1 of this form.

Item 7. Disclosure of Proxy Voting Policies and Procedures for Closed-End Management Investment Companies.

Not applicable.

Item 8. Portfolio Mangers of Closed-end Management Investment Companies

Not applicable

Item 9. Purchases of Equity Securities by Closed-End Management Investment Company and Affiliated Purchasers.

Not applicable.

Item 10. Submission of Matters to a Vote of Security Holders.

The registrant does not currently have in place procedures by which shareholders may recommend nominees to the registrant’s board.

There have been no changes to the procedures by which shareholders may recommend nominees to the registrant’s board.

Item 11. 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.

There was no fraud, whether or not material, involving officers or employees of the Registrant who have a significant role in the Registrant’s internal controls, including disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940) that has come to the attention of the Registrant, including its President and Treasurer.

(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 12. Exhibits.

(a) (2 )  Separate certifications by the President (principal executive officer) and Treasurer (principal financial officer) of the registrant as required by Rule 30a-2(a) under the Act (17 CFR 270.30a-2(a)) are attached.

(b) A certification by the registrant’s President (principal executive officer) and Treasurer (principal financial officer) as required by Rule 30a-2(b) under the Act (17 CFR 270.30a-2(b)) is attached.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

(Registrant)	SBL Fund
By (Signature and Title)*	/s/ Richard M. Goldman
	Richard M. Goldman, President
Date	September 3, 2010

Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

By (Signature and Title)*	/s/ Richard M. Goldman
	Richard M. Goldman, President
Date	September 3, 2010
By (Signature and Title)*	/s/ Brenda M. Harwood
	Brenda M. Harwood, Treasurer
Date	September 3, 2010

^* Print the name and title of each signing officer under his or her signature.