<PAGE>
RYDEX SERIES TRUST
THE RYDEX HIGH YIELD FUND
Supplement dated July 31, 1998, to the
Prospectus dated August 1, 1997.
THIS SUPPLEMENT PROVIDES NEW AND ADDITIONAL INFORMATION BEYOND THAT CONTAINED IN
THE PROSPECTUS. IT SHOULD BE RETAINED AND READ IN CONJUNCTION WITH SUCH
PROSPECTUS.
PADCO Advisors, Inc. (the "Advisor") has terminated its Sub-Advisory Agreement
with Loomis, Sayles & Company, LP ("Loomis") relating to The Rydex High Yield
Fund (the "Fund"). At a meeting held on July 16, 1998, the Advisor explained to
the Board of Trustees of the Rydex Series Trust that such termination was in the
best interest of shareholders. Notice of the termination will be sent to Loomis
on August 3, 1998 and termination is expected to be effective August 4, 1998.
Effective immediately, the Fund will no longer accept purchase orders for new
shares, and Fund shares are no longer available through the Trust's exchange
privilege. Fund shareholders may continue to exchange their shares for shares
of other Rydex Funds in accordance with the terms of the Trust's exchange
privilege.
The Advisor immediately intends to invest the assets of the Fund in cash, cash
instruments and other cash equivalents. The Advisor currently believes that
investing in such cash instruments is in the best interest of shareholders
because the Fund cannot be operated efficiently as a diversified fund at its
current low asset level.
PLEASE RETAIN THIS SUPPLEMENT FOR FUTURE REFERENCE.
