Guggenheim Select Quality Municipal Portfolio Series 1

Under normal circumstances, the Trust will invest at least 80% of the value of its assets in a portfolio of municipal bonds. The Sponsor will select bonds that it believes have the best chance to meet the Trust’s investment objective over its life. As a result of the strategy, the Trust invests significantly in municipal bonds of issuers located in California and Illinois.

Municipal bonds are debt instruments issued by state and local governments to raise money for various public works projects such as highways, airports and schools. The most distinct characteristic of municipal bonds is that generally these bonds provide interest income exempt from normal federal income taxes. However, such income may be subject to the federal alternative minimum tax. In addition to offering the potential for federally tax-exempt interest income, at least 90% of the municipal bonds held in the Trust will be rated investment-grade quality, as of the Trust’s initial date of deposit (the “Inception Date”), by at least one of the following ratings agencies: Standard & Poor’s, a division of The McGraw-Hill Companies, Inc. (“Standard & Poor’s”) or Moody’s Investors Service (“Moody’s”). Such rating relates to the underlying bonds and not the Trust. Investment-grade bonds are bonds that are rated at least in the category of BBB by Standard & Poor’s or Baa by Moody’s. A rating in the category of BBB or Baa is the lowest possible investment-grade rating. See “Description of Bond Ratings” for details.

No more than 10% of the Trust’s portfolio, as of the Inception Date, may consist of: (i) securities rated in the BBB category or lower by one of the rating agencies at time of purchase; (ii) securities that may be deemed to be unsecured obligations of the borrower; or (iii) municipal bonds exposed to annual appropriation risk. Bonds that are rated below investment-grade as determined by at least one or more nationally recognized statistical rating organizations and are considered high-yield or “junk” bonds. Obligations rated below investment-grade should be considered speculative as these ratings indicate a quality of less than investment-grade. Because high-yield bonds are generally subordinated obligations and are perceived by investors to be riskier than higher rated securities, their prices tend to fluctuate more than higher rated securities and are affected by short-term credit developments to a greater degree than investment-grade bonds. See “Description of Bond Ratings” for additional information.

The Trust may invest in municipal bonds with any maturity term.

Certain bonds in the Trust may be covered by insurance policies obtained from municipal bond insurers identified in “Trust Portfolio,” which guarantee payment of principal and interest on the bonds when due. As a result of such insurance, the insured bonds have received ratings that may reflect the creditworthiness of the bond issuer. Please note that the insurance relates only to the insured bonds in the Trust and not to the units or the market value of the bonds or of the units.

The Trust intends to pay interest distributions each month and expects to prorate the interest distributed on an annual basis; see “Distributions.” The record dates and distribution dates for principal and interest distributions are the 15th and 25th of each month, respectively. Furthermore, investors may receive principal distributions from bonds being called or sold prior to their maturity or as bonds mature.

The Sponsor has selected Guggenheim Partners Investment Management, LLC (“GPIM”), a subsidiary of Guggenheim Partners, LLC, to assist the Sponsor with the selection of the Trust’s portfolio.

The Sponsor considered the following factors, among others, in selecting the bonds:

• The price of the bonds relative to other bonds with comparable characteristics;

• Attractiveness of the interest payments relative to bonds with similar characteristics;

• The potential for early return of principal or any event risk which could have a negative impact on the price of the bonds;

• Showing a preference for non-AMT (alternative minimum tax) bonds; and

• A preference for tax-exempt bonds that are secured by a dedicated revenue stream or supported by a full faith and credit pledge of state and local governments, respectively. In addition, project bonds secured by mortgages are preferred to those that do not include collateral in the security package.

Guggenheim Partners Investment Management, LLC (GPIM)

Guggenheim Partners Investment Management, LLC is a subsidiary of Guggenheim Partners, LLC and an affiliate of the Sponsor, which offers financial services expertise within its asset management, investment advisory, capital markets, institutional finance and merchant banking business lines. Clients consist of a mix of individuals, family offices, endowments, foundations, insurance companies, pension plans and other institutions that together have entrusted the firm with supervision of more than $100 billion in assets. A global diversified financial services firm, Guggenheim Partners, LLC office locations include New York, Chicago, Los Angeles, Miami, Boston, Philadelphia, St. Louis, Houston, London, Dublin, Geneva, Hong Kong, Singapore, Mumbai and Dubai.

The Sponsor is also a subsidiary of Guggenheim Partners, LLC. See “General Information” for additional information.

As with all investments, you may lose some or all of your investment in the Trust. Units of the Trust are not deposits of any bank and are not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. No assurance can be given that the Trust’s investment objective will be achieved. The Trust also might not perform as well as you expect. This can happen for reasons such as these:

• Because the Trust holds long-term bonds, it is exposed to higher interest rate risk than a Trust that holds short-term bonds. Interest rate risk is the risk that bond prices will decline because of rising interest rates. The prices of long-term bonds are more sensitive to interest rate changes than the prices of short-term bonds. As a result, the value of the Trust will have greater price sensitivity than if the Trust had held short-term bonds.

• The Sponsor does not actively manage the portfolio. Because the portfolio is fixed and not managed, in general, the Sponsor only sells bonds at the Trust’s termination or in order to meet redemptions, for tax purposes or to pay sales charges and expenses. As a result, the price at which a bond is sold may not be the highest price the Trust could have received during the life of the Trust.

• No assurance can be given that the Trust’s investment objective will be achieved. This objective is subject to the continuing ability of the respective issuers of the bonds to meet their obligations.

• An issuer or an insurer of the bonds may be unwilling or unable to make principal payments and/or distributions in the future, may call a security before its stated maturity, or may reduce the level of distributions. This may result in a reduction in the value of your units.

• The financial condition of an issuer or an insurer of the bonds may worsen or its credit ratings may drop, resulting in a reduction in the value of your units. This may occur at any point in time, including during the primary offering period.

• Municipal bonds are fixed rate debt obligations that generally decline in value with increases in interest rates, an issuer’s or an insurer’s worsening financial condition, a drop in bond ratings or when there is a decrease in federal income tax rates. Typically, bonds with longer periods before maturity are more sensitive to interest rate changes.

• The Trust may invest in securities that are rated below investment-grade and are considered to be “junk” securities. Below investment-grade obligations are considered to be speculative and are subject to greater market and credit risks, and accordingly, the risk of nonpayment or default is higher than with investment-grade securities. In addition, such securities may be more sensitive to interest rate changes and more likely to receive early returns of principal.

• Certain municipal bonds may be rated as investment-grade by only one rating agency. As a result, such split-rated securities may have more speculative characteristics and are subject to a greater risk of default than securities rated as investment-grade by any two of Standard & Poor’s or Moody’s.

• Income from the municipal bonds may be subject to the federal alternative minimum tax. All or portions of the Trust’s interest dividends, which are otherwise tax-exempt, may be taxable to investors subject to the federal alternative minimum tax.

• Changes in the tax treatment of bonds either due to future legislation or due to the failure of a public issuer of a bond (or private guarantor) to meet certain conditions imposed by various tax laws may have an adverse impact on the value of the units and the bonds held in the Trust.

• If a decrease in net asset value occurs and units of the Trust are tendered for redemption, the Trust may be forced to liquidate some of its bonds which may be at a loss. If such redemptions are substantial enough, provisions of the Trust’s indenture could cause a complete and unexpected liquidation of the Trust before its scheduled maturity, resulting in unanticipated losses for investors.

• Municipal bonds are subject to credit risk in that an issuer of a bond may be unable to make interest and principal payments when due. In general, lower rated bonds carry greater credit risk.

• There is no assurance that the Trust portfolio will retain for any length of time its present size and diversity. As indicated in the “Trust Portfolio,” a number of the bonds in the Trust may be called prior to their stated maturity date and will remain callable throughout the life of the Trust. A call provision is more likely to be exercised by the issuer when the offering price valuation of a bond is higher than its call price. Such price valuation is likely to be higher in periods of declining interest rates. In such cases, the proceeds from such redemptions will be distributed to unit holders. The Estimated Current Return and Estimated Long-Term Return of the units may be adversely affected by such sales or redemptions. As stated below, the size and diversity of the Trust may also be affected by the Trust’s sale of bonds to meet redemptions, for credit issues and in other circumstances.

• Certain of the bonds in the portfolio are general obligations of a governmental entity that are secured by the taxing power of the entity. General obligation bonds are backed by the issuer’s pledge of its full faith, credit and taxing power for the payment of principal and interest. The taxing power of any governmental entity may be limited, however, by provisions of state constitutions or laws. An entity’s credit will depend on many factors: tax base, reliance on federal or state aid, and factors which are beyond the entity’s control.

• The Trust invests significantly in California municipal bonds. Because the Trust invests significantly in bonds of issuers located in California, there may be more risk than if the bonds were issued by issuers located in several states.

• The Trust invests significantly in Illinois municipal bonds. Because the Trust invests significantly in bonds of issuers located in Illinois, there may be more risk than if the bonds were issued by issuers located in several states.

• The Trust is subject to market risk. Market value fluctuates in response to various factors. These can include changes in interest rates, inflation, the financial condition of a bond’s issuer, perceptions of the issuer, ratings on a bond, or political or economic events affecting the issuer.

• The income generated by the Trust may be reduced over time in response to bond sales, changes in distributions paid by issuers, unit redemptions and expenses.

• Certain bonds in the Trust may have been purchased by the Sponsor on a “when issued” basis. Bonds purchased on a “when issued” basis have not yet been issued by the issuer on the Inception Date (although such issuer has committed to issue such bonds). The effect of the Trust holding a “when issued” bond is that unitholders who purchase their units prior to the delivery date of such bond may have to make a downward adjustment in the tax basis of their units. Such downward adjustment may be necessary to account for interest accruing on such “when issued” bond during the time between their purchase of units and delivery of such bonds to the Trust.

• The Trust may sell bonds to meet redemptions, to pay expenses, for credit issues and in other circumstances. Accordingly, the size, diversity, composition, returns and income generated by the Trust may be adversely affected. In addition, such sales of bonds may be at a loss. If such sales are substantial enough, provisions of the Trust’s indenture could cause a complete and unexpected liquidation of the Trust before its scheduled maturity, resulting in unanticipated losses for investors.

• Certain bonds included in the Trust are original issue discount bonds or “zero coupon” bonds, as noted in “Trust Portfolio.” These bonds may be subject to greater price fluctuations with changing interest rates and contain additional risks.

• Certain bonds in the Trust may be subject to liquidity risk. The principal trading market for the bonds in the Trust will generally be in the over-the-counter market. As a result, the existence of a liquid trading market for the bonds may depend on whether dealers will make a market in the bonds. There can be no assurance that a market will be made for any of the bonds, that any market for the bonds will be maintained or of the liquidity of the bonds in any markets made. The price at which the bonds may be sold to meet redemptions and the value of the Trust will be adversely affected if trading markets for the bonds are limited or absent.

• Inflation may lead to a decrease in the value of assets or income from investments.

See “Investment Risks” for additional information.