KAP Kcap Financial 7.375% Senior Notes Due 2019 (delisted)

RYDEX SERIES FUNDS

U.S. Long Short Momentum Fund (the “Fund”)

Supplement dated May 7, 2013

to the currently effective Statutory and Summary Prospectuses

dated August 1, 2012, as supplemented from time to time

This supplement provides new and additional information beyond that contained in the Statutory and Summary Prospectuses (together, the “Prospectuses”) listed above and should be read in conjunction with the Prospectuses.

Effective immediately, the current description of the Fund’s principal investment strategies under the heading “Principal Investment Strategies” will be replaced in its entirety as set forth below. The Fund’s principal investment strategies have been revised to clarify the Fund’s investment methodology takes into consideration particular styles demonstrating positive momentum as well as industries demonstrating positive momentum. The changes to the Fund’s principal investment strategies will have no impact on the Fund’s investment objective, investment policies, or fees and expenses.

PRINCIPAL INVESTMENT STRATEGIES – The Fund seeks to respond to the dynamically changing economy by moving its investments among different industries and styles. The Advisor allocates investments to industries and styles according to several measures of momentum. Companies associated with industries and/or styles demonstrating positive momentum are favored while those experiencing negative momentum are disfavored. The Fund may hold both long and short positions. Equity positions are determined based on their associated industry and style momentum, risk characteristics, and liquidity. The Fund invests in equity securities, including small, mid, and large-capitalization securities, such as U.S. traded common stocks and American Depositary Receipts (“ADRs”), but also may invest in derivative instruments which primarily consist of equity index swaps, futures contracts, and options on securities, futures contracts, and stock indices. Equity index swaps and futures and options contracts enable the Fund to pursue its investment objective without investing directly in the securities of companies included in the different sectors or industries to which the Fund is seeking exposure. The Fund may invest in derivatives to hedge or gain leveraged exposure to a particular sector, industry or company depending on market conditions. Certain of the Fund’s derivative investments may be traded in the over-the-counter (“OTC”) market, which generally provides for less transparency than exchange-traded derivative instruments. The Fund also may enter into short sales of broad-based stock indices for hedging purposes in an effort to reduce portfolio risk or volatility. While the Fund anticipates investing in these instruments to seek to achieve its investment objective, the extent of the Fund’s investment in these instruments may vary from day to day depending on a number of different factors, including price, availability, and general market conditions. On a day-to-day basis, the Fund may hold U.S. government securities, short-term, high quality (rated AA or higher) fixed income securities, money market instruments, overnight and fixed-term repurchase agreements, cash and other cash equivalents with maturities of one year or less to collateralize its derivative positions or for defensive purposes to seek to avoid losses during adverse market conditions. The Fund also may enter into repurchase agreements with counterparties that are deemed to present acceptable credit risks. In an effort to ensure that the Fund is fully invested on a day-to-day basis, the Fund may conduct significant trading activity at or just prior to the close of the U.S. financial markets. The Fund is non-diversified and, therefore, may invest a greater percentage of its assets in a particular issuer in comparison to a diversified fund.

PLEASE RETAIN THIS SUPPLEMENT FOR FUTURE REFERENCE.

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Grafico Azioni Kcap Financial 7.375% Senior Notes Due 2019 (delisted) (NYSE:KAP)
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Grafico Azioni Kcap Financial 7.375% Senior Notes Due 2019 (delisted) (NYSE:KAP)
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