INDEPENDENT AUDITORS' REPORT
To the Trustees and Shareholders of Rydex Series Funds:
In planning and performing our audit of the financial statements of Rydex
Series Funds (the "Trust"), including the Arktos, Banking, Basic Materials,
Biotechnology, Consumer Products, Electronics, Energy, Energy Services,
Financial Services, Health Care, Juno, Leisure, Nova, OTC, Precious
Metals, Retailing, Technology, Telecommunications, Transportation, Ursa,
U.S. Government Bond, and U.S. Government Money Market Funds, for the
year ended March 31, 2000 (on which we have issued our report dated May 22,
2000), we considered its internal control, including control activities for
safeguarding securities, in order to determine our auditing procedures
for the purpose of expressing our opinion on the financial statements and
to comply with the requirements of Form N-SAR, and not to provide
assurance on the Trust's internal control.
The management of the Trust is responsible for establishing and maintaining
internal control. In fulfilling this responsibility, estimates and judgments
by management are required to assess the expected benefits and related
costs of controls. Generally, controls that are relevant to an audit pertain
to the entity's objective of preparing financial statements for external
purposes that are fairly presented in conformity with generally accepted
accounting principles. Those controls include the safeguarding of assets
against unauthorized acquisition, use, or disposition.
Because of inherent limitations in any internal control, misstatements due to
error or fraud may occur and not be detected. Also, projections of any
evaluation of internal control to future periods are subject to the risk that
the internal control may become inadequate because of changes in conditions
or that the degree of compliance with policies or procedures deteriorate.
Our consideration of the Trust's internal control would not necessarily
disclose all matters in internal control that might be material weaknesses
under standards established by the American Institute of Certified Public
Accountants. A material weakness is a condition in which the design or
operation of one or more of the internal control components does not reduce
to a relatively low level the risk that misstatements error or fraud in
amounts that would be material in relation to the financial statements
being audited may occur and not be detected within a timely period by
employees in the normal course of performing their assigned functions.
However, we noted no matters involving the Trust's internal control and
its operation, including controls for safeguarding securities, that we
consider to be material weaknesses as defined above as of March 31, 2000.
This report is intended solely for the information and use of management,
the Trustees and Shareholders of Rydex Series Funds, and the Securities and
Exchange Commission and is not intended to be and should not be used
by anyone other than these specified parties.
DELOITTE & TOUCHE LLP
Princeton, New Jersey
May 22, 2000
