SecProbe.io

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DRAFT
Morgan, Lewis & Bockius LLP
1111 Pennsylvania Ave., NW
Washington, DC 20004

LAURA E. FLORES*
202.739.5684
lflores@morganlewis.com
* Admitted in Florida only

April XX, 2005

VIA EDGAR CORRESPONDENCE

Mr. Christian T. Sandoe
U.S. Securities and Exchange Commission
Judiciary Plaza
450 Fifth Street, N.W.
Washington, DC  20549

Re:      Rydex Series Funds (The "Trust") - Post Effective Amendment No. 55
         -------------------------------------------------------------------
         (File Nos. 333-59692 and 811-07584)
         -----------------------------------

Dear Mr. Sandoe:

This letter responds to your comments to the Trust's Post-Effective Amendment
No. 55, filed on February 11, 2005 for the purpose of introducing the Rydex S&P
Diversified Trends Fund (the "Fund") into the Trust and incorporating
disclosures regarding (i) the Trust's policies and procedures with respect to
frequent purchases and redemptions of fund shares, (ii) the circumstances under
which the Trust may use fair value pricing and the effects of using fair value
pricing, and (iii) the Trust's policies and procedures with respect to the
disclosure of portfolio holdings information. The following summarizes your
comments, and our response to those comments. Unless otherwise noted,
capitalized terms have the same meaning as contained in the Fund's Prospectus
and/or Statement of Additional Information (SAI).

1.       COMMENT. If Rule 35d-1(2) of the Investment Company Act of 1940 (the
         "1940 Act") is applicable to this Fund, please include disclosure to
         the effect that (i) the Fund has adopted a policy to invest at least
         80% of the value of its assets in the particular type of investments,
         or in investments in the particular industry or industries, suggested
         by the Fund's name, and (ii) that the Fund has either adopted such
         policy as a fundamental policy or has adopted a policy to provide the
         Fund's shareholders with at least 60 days prior notice of any change in
         the policy.

         RESPONSE. We are of the opinion that Rule 35d-1 is not applicable to
         the Fund as the Fund's name suggests an investment objective or
         strategy rather than a type of investment. In addition, the name is not
         likely to lead a reasonable investor to conclude that the Fund invests
         in a manner that is inconsistent with the Fund's intended investments
         or the risk of those investments.

2.       COMMENT. Please explain the meaning of "components" as referenced in
         the Fund's "Portfolio Investment Strategy" section on page 4 of the
         Prospectus.

         RESPONSE. We have included the following sentence in the first
         paragraph under "Principal Investment Strategy" to explain what is
         meant by "components."

         "The components of the underlying benchmark consist of 24 futures
         contracts, allocated 50% to financial futures, E.G., interest rates and
         foreign currencies, and 50% to physical commodities, E.G., energy and
         metals."

3.       COMMENT. Please revise the "Portfolio Investment Strategy" and "Risk
         Considerations" headings on page 4 of the Prospectus to indicate that
         they are the principal investment strategies and risks.
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Mr. Christian T. Sandoe
April XX, 2005
Page 2

         RESPONSE. We have revised the headings as follows: "Principal
         Investment Strategy" and "Principal Risks."

4.       COMMENT. Please include additional explanation with respect to the
         long/short investment strategy referenced in "Market Risk" on page 4 of
         the Prospectus in the "Portfolio Investment Strategy" section.

         RESPONSE. We have revised the "Principal Investment Strategy" section
         as follows (new language appears in bold for purposes of correspondence
         only):

         "The Fund will invest its assets in the components of the underlying
         benchmark and/or derivatives and other instruments whose performance is
         expected to correspond to that of the underlying benchmark. The
         components of the underlying benchmark consist of 24 futures contracts,
         allocated 50% to financial futures, E.G., interest rates and
         currencies, and 50% to physical commodities, E.G., energy and metals.
         THE 24 FUTURES CONTRACTS ARE GROUPED INTO 14 SECTORS, WHICH ARE THEN
         POSITIONED EITHER LONG OR SHORT BASED ON THEIR PRICES RELATIVE TO THEIR
         MOVING AVERAGES. The Fund intends to enter into short sales, futures,
         options, swaps and other similar transactions to track the Fund's
         underlying benchmark.

         To collateralize Fund transactions on a day-to-day basis, the Fund will
         hold U.S. Government securities, short-term, high quality fixed-income
         securities, money market instruments, overnight and fixed-term
         repurchase agreements, cash, and other cash equivalents with maturities
         of one year or less.

         On certain occasions the Fund may employ leveraging techniques to match
         the corresponding benchmark."

 5.      COMMENT. With respect to "Tracking Error Risk," please clarify whether
         the Fund seeks to track its benchmark on an aggregate basis.

         RESPONSE. The Fund does not seek to track its benchmark on an aggregate
         basis.

6.       COMMENT. Please clarify that the Fund will invest in foreign currencies
         in the "Portfolio Investment Strategy" section.

         RESPONSE. We have included the following sentence in the first
         paragraph under "Principal Investment Strategy" to clarify that the
         Fund will invest in financial futures, including foreign currency
         futures.

         "The components of the underlying benchmark consist of 24 futures
         contracts, allocated 50% to financial futures, E.G., interest rates and
         foreign currencies, and 50% to physical commodities, E.G., energy and
         metals."

7.       COMMENT. Please clarify whether the Fund will satisfy its obligations
         under Release No. IC-10666.

         RESPONSE. We have confirmed with the Advisor that the Fund will comply
         with the asset coverage requirements set forth in Section 18(f)(1) and
         the applicable SEC Staff interpretations thereof.

8.       COMMENT. Please revise the "Master Feeder Investment Structure" section
         on page 7 of the Prospectus to include language in the future tense.

         RESPONSE. We have revised the "Master Feeder Investment Structure"
         section accordingly.

9.       COMMENT. Please revise the "Trading Halt Risk" section on page 8 of the
         Prospectus to reflect the risk's applicability to the Fund.

         RESPONSE. We have revised the "Trading Halt Risk" section, as follows,
         by deleting the fifth sentence, which referenced the impact of a
         trading halt on the use of leverage.

         "The Fund typically will hold short- term options and futures
         contracts. The major exchanges on which these contracts are traded,
         such as the Chicago Mercantile Exchange ("CME"), have established
         limits on how much an option or futures contract may decline over
         various time periods within a day. If an option or futures contract's
         price declines more than the established limits, trading on the
         exchange is halted on that instrument. If a trading halt occurs, the
         Fund

                                       2
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Mr. Christian T. Sandoe
April XX, 2005
Page 3

         may temporarily be unable to purchase or sell options or futures
         contracts. In such an event, the Fund also may be required to use a
         "fair-value" method to price its outstanding contracts."

10.      COMMENT. Please reference the fact that portfolio turnover risk may
         lower the Fund's performance in the "Portfolio Turnover Risk" section
         on page 9 of the Prospectus.

         RESPONSE. We have revised the "Portfolio Turnover Risk" section
         accordingly.

11.      COMMENT. Please incorporate "negative cost of carry" risk disclosure
         into the "Short Sale Risk" section on page 10 of the Prospectus.

         RESPONSE. We have revised the "Short Sales Risk" section by including
         the following paragraph at the end of the existing disclosure:

         "For example, when a Fund short sells an interest-bearing security,
         such as a bond, it is obligated to pay the interest on the security it
         has sold. This cost is partially offset by the interest earned by the
         Fund on the cash generated by the short sale. To the extent that the
         interest rate that the Fund is obligated to pay is greater than the
         interest earned by the Fund on investments, the performance of the Fund
         will be negatively impacted. This type of short sales expense is
         sometimes referred to as the "negative cost of carry," and will tend to
         cause a Fund to lose money on a short sale even in instances where the
         price of the underlying security sold short does not change over the
         duration of the short sale."

12.      COMMENT. Please clarify whether there are specific market timing risks
         associated with the Fund's investment strategy. If the Fund is subject
         to specific market timing risks, please disclose these risks in the
         "Active Investors and Market Timing" section on page 12 of the
         Prospectus.

         RESPONSE. The Rydex portfolio management department does not believe
         that the Fund's investment strategy makes it susceptible to any
         specific market timing risks.

13.      COMMENT. The Fund's market timing policies and procedures appear to
         permit a great deal of discretion. Please disclose whether these
         policies and procedures will be applied uniformly. In the event that
         the policies and procedures will not be uniformly applied, disclose the
         circumstances under which restrictions will not be imposed and the
         risks of market timing.

         RESPONSE. We have revised the "Active Investors and Market Timing"
         section as follows (new language appears in bold for purposes of
         correspondence only):

         "Unlike most other Rydex Funds, the Rydex S&P Diversified Trends Fund
         is not suitable for purchase by active investors. The Fund is intended
         for long-term investment purposes only and discourages shareholders
         from engaging in "market timing" or other types of excessive short-term
         trading. This frequent trading into and out of the Fund may present
         risks to the Fund's long-term shareholders, all of which could
         adversely affect shareholder returns. The risks posed by frequent
         trading include interfering with the efficient implementation of the
         Fund's investment strategies, triggering the recognition of taxable
         gains and losses on the sale of Fund investments, requiring the Fund to
         maintain higher cash balances to meet redemption requests, and
         experiencing increased transaction costs. Consequently, the Board of
         Trustees has adopted policies and procedures designed to prevent
         frequent purchases and redemptions of shares of the Rydex S&P
         Diversified Trends Fund.

         Rydex will take steps reasonably designed to detect and deter frequent
         trading by shareholders pursuant to the Fund's policies and procedures
         described in this prospectus and approved by the Fund's Board of
         Trustees. CURRENTLY, THE FUND RESTRICTS SHAREHOLDERS TO NO MORE THAN
         ONE SUBSTANTIVE REDEMPTION OUT OF THE FUND (BY ANY MEANS, INCLUDING
         EXCHANGES) FOLLOWED BY A PURCHASE OF THE FUND (BY ANY MEANS, INCLUDING
         EXCHANGES) WITHIN ANY NINETY-DAY PERIOD. "SUBSTANTIVE" MEANS A DOLLAR
         AMOUNT THAT THE ADVISOR DETERMINES, IN IT SOLE DISCRETION, COULD
         ADVERSELY AFFECT MANAGEMENT OF THE FUND. THIS RESTRICTION WILL NOT
         APPLY TO SYSTEMATIC TRANSACTIONS, INCLUDING REBALANCING PROGRAMS,
         AUTOMATIC INVESTMENT PROGRAMS, AND DIVIDEND REINVESTMENT PROGRAMS
         BECAUSE THE TRUST REASONABLY DETERMINED THAT THESE CATEGORIES OF
         TRANSACTIONS DO NOT RAISE FREQUENT TRADING OR MARKET TIMING CONCERNS.
         The Board of Trustees have approved a redemption fee, however, to date
         the Fund has not implemented this

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Mr. Christian T. Sandoe
April XX, 2005
Page 4

         option nor has it chosen to impose costs or administrative fees on
         shareholders. IN THE EVENT THE FUND DECIDES TO IMPLEMENT THE REDEMPTION
         FEE, SUCH FEE WILL BE IMPOSED UNIFORMLY BY THE FUND SUBJECT TO THE
         LIMITATIONS DISCUSSED BELOW. For purposes of applying the Fund's
         policies, Rydex may consider the trading history of accounts under
         common ownership or control. In addition, the Fund reserves the right
         to reject any purchase request by any investor or group of investors
         for any reason without prior notice, including, in particular, if Rydex
         reasonably believes that the trading activity would be harmful or
         disruptive to the Fund.

         Although these policies are designed to deter frequent trading, none of
         these measures alone nor all of them taken together eliminate the
         possibility that frequent trading in the Fund will occur, particularly
         with respect to trades placed by shareholders that invest in the Fund
         through omnibus accounts maintained by brokers, retirement plan
         accounts and other financial intermediaries. The Fund's access to
         information about individual shareholder transactions made through such
         omnibus arrangements is often unavailable or severely limited. As a
         result, the Fund cannot assure that its policies will be enforced with
         regard to those Fund shares held through such omnibus arrangements
         (which may represent a majority of Fund shares), and as a result
         frequent trading could adversely affect the Fund and its long-term
         shareholders as discussed above."

14.      COMMENT. Please disclose the calculation of NAV with respect to the
         NYSE schedule in accordance with Section 22 (e) and Rule 22c-1 in the
         "Calculating NAV" section on page 13 of the Prospectus.

         RESPONSE. The Rydex portfolio management department has confirmed that
         this Fund will not be impacted by the early closings of markets other
         than the NYSE; therefore, we have revised the "Calculating NAV" section
         by deleting the second sentence as follows:

         "The Fund calculates NAV once each Business Day as of the regularly
         scheduled close of normal trading on the NYSE (normally, 4:00 p.m.,
         Easter Time)."

15.      COMMENT. The disclosure included in the "Involuntary Redemptions"
         section on page 18 of the Prospectus appears to be inconsistent with
         the Staff's position concerning the requirement that shareholders must
         be given 30 days' notice prior to an involuntary redemption and Section
         2(a)(32).

         RESPONSE. We believe that the Fund's disclosure under "Involuntary
         Redemptions" is consistent with applicable regulatory standards for two
         reasons. First, the policy that an investor redemption request may be
         treated, under the circumstances set forth in the Prospectus, as a
         complete redemption of an investor's account is fully disclosed in the
         Fund's Prospectus providing Fund sharehold