<PAGE>
RYDEX SERIES FUNDS
U.S. GOVERNMENT MONEY MARKET FUND
SUPPLEMENT DATED AUGUST 1, 2000
TO THE RYDEX DYNAMIC FUNDS PROSPECTUS
DATED MARCH 1, 2000
This supplement provides new and additional information beyond that contained in
the Prospectus and should be read in conjunction with the Prospectus.
--------------------------------------------------------------------------------
The bar chart located on page 10 and all of the information on page 11 is
revised as follows:
U.S. GOVERNMENT MONEY MARKET FUND
[CHART]
<TABLE>
<CAPTION>
1999 1998 1997 1996 1995 1994
<S> <C> <C> <C> <C> <C>
4.25% 4.72% 4.59% 4.49% 4.93% 3.23%
</TABLE>
-----------------------------------------
HIGHEST QUARTER RETURN:
<TABLE>
<S> <C>
Investor Class 1.27%
(quarter ended 6/30/95)
LOWEST QUARTER RETURN:
Investor Class 0.50%
(quarter ended 3/31/94)
</TABLE>
------------------------------------------
*The year-to-date return for the period from January 1, 2000 through June
30, 2000 is 2.51%
AVERAGE ANNUAL TOTAL RETURN (FOR PERIODS ENDED DECEMBER 31, 1999)(1)
<TABLE>
<CAPTION>
----------------------------------- -------------- --------------- --------------------------
1 YEAR 5 YEAR SINCE INCEPTION
(12/03/93)(3)
----------------------------------- -------------- --------------- --------------------------
<S> <C> <C> <C>
INVESTOR CLASS SHARES 4.25% 4.60% 4.31%
----------------------------------- -------------- --------------- --------------------------
ADVISOR CLASS SHARES 3.73% 4.41% 4.21%
----------------------------------- -------------- --------------- --------------------------
90-DAY TREASURY COMPOSITE(2) 4.64% 5.00% 4.84%
----------------------------------- -------------- --------------- --------------------------
</TABLE>
(1) These figures assume the reinvestment of dividends and capital gains
distributions.
(2) The 90-Day Treasury Composite Index is an unmanaged index that is a widely
recognized indicator of general money market performance.
(3) Inception date reflects commencement of Fund operations. Advisor Class
Shares were offered beginning April 1, 1998.
YIELD - Call (800) 820-0888 or visit www.rydexfunds.com for the Fund's current
yield.
<PAGE>
FEES AND EXPENSES
This table describes the fees and expenses that you may pay if you buy and hold
either Investor Class or Advisor Class Shares of the Fund.
<TABLE>
<CAPTION>
INVESTOR CLASS ADVISOR CLASS
--------------------------------------------------------------------------------
<S> <C> <C>
SHAREHOLDER FEES NONE NONE
ANNUAL FUND OPERATING EXPENSES
(expenses that are deducted from
Fund assets)
MANAGEMENT FEES .50% .50%
DISTRIBUTION (12b-1) FEES NONE .25%
OTHER EXPENSES .38% .65%
TOTAL ANNUAL
FUND OPERATING EXPENSES .88% 1.40%
</TABLE>
* The Fund may impose a wire transfer charge of $15 on certain redemptions under
$5,000.
EXAMPLE
This example is intended to help you compare the cost of investing in either the
Investor Class or Advisor Class Shares of the Fund with the cost of investing in
other mutual funds.
The example assumes that you invest $10,000 in the Fund for the time period
indicated and then redeem all of your shares at the end of those periods. The
example also assumes that your investment has a 5% return each year and that the
Fund's operating expenses remain the same. Although your actual costs may be
higher or lower, based on these assumptions your cost would be:
<TABLE>
<CAPTION>
1 YEAR 3 YEARS 5 YEARS 10 YEARS
-------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
INVESTOR CLASS $90 $281 $488 $1,084
ADVISOR CLASS $143 $443 $766 $1,680
</TABLE>
In addition, the U.S. Government Money Market Fund Financial Highlights located
on page 32 and 33 have been updated to include the following columns:
<TABLE>
<CAPTION>
INVESTOR CLASS ADVISOR CLASS
YEAR YEAR
ENDED ENDED
3/31/00 3/31/00
--------------------------------------------------------------------------------------
<S> <C> <C>
NET ASSET VALUE -
BEGINNING OF PERIOD $1.00 $1.00
------- --------
Net Investment Income (Loss) .04 .04
------- --------
Net Increase in Net Asset Value
Resulting from Operations .04 .04
------- --------
<PAGE>
Distributions to Shareholders
from Net Investment Income (.04) (.04)
------- --------
Net Increase in Net Asset Value .00 .00
------- --------
NET ASSET VALUE - END OF PERIOD $1.00 $1.00
======= ========
TOTAL INVESTMENT RETURN (%) 4.48% 3.94%
RATIOS TO AVERAGE NET ASSETS:
Gross Expenses (%) 0.89% 1.41%
Net Expenses (%) 0.88% 1.40%
Net Investment Income (Loss)(%) 4.36% 3.85%
SUPPLEMENTARY DATA
Net Assets, End of Period
(000's omitted) $686,198 $212,181
</TABLE>
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PLEASE RETAIN THIS SUPPLEMENT
FOR FUTURE REFERENCE
