Investment Sub-Advisory Agreement (2007)Full Document 

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AGREEMENT made as of this 29th day of August 2007 by and between PADCO Advisors,
Inc.,  a Maryland  corporation  and a federally  registered  investment  adviser
("Advisor"),  and Valu-Trac  Investment  Management Limited, a limited liability
company  incorporated in England and a federally  registered  investment adviser

WHEREAS,  Rydex Series  Funds,  a Delaware  statutory  trust (the "Trust") is an
open-end  management  investment company registered under the Investment Company
Act of 1940, as amended (the "1940 Act");

WHEREAS,  Advisor serves as the investment adviser to the International Rotation
Fund, a series of the Trust (the  "Fund"),  pursuant to an  Investment  Advisory
Agreement  between Advisor and the Trust (as such agreement may be modified from
time to time, the "Advisory Agreement"); and

WHEREAS,  Advisor desires to retain Sub-Advisor to furnish  investment  advisory
services to the Advisor in connection  with the management of the Fund, upon the
terms and  conditions  hereafter set forth,  and the  Sub-Advisor  is willing to
render such investment advisory services;

NOW, THEREFORE,  in consideration of the mutual covenants herein contained,  the
parties hereto agree as follows:

1. APPOINTMENT.   Advisor  hereby   appoints   Sub-Advisor  to  provide  certain
sub-investment advisory services to the Fund for the period and on the terms set
forth in this  Agreement.  Sub-Advisor  accepts such  appointment  and agrees to
furnish the services herein set forth for the compensation herein provided.

2. SERVICES TO BE PERFORMED.  Subject  always to the  supervision of the Trust's
Board  of  Trustees  and  Advisor,  Sub-Advisor  will  be  responsible  for  the
development  and on-going  maintenance  of the  investment  management  strategy
utilized by the Fund as described in the Fund's initial  registration  statement
on  Form  N-1A  as  declared  effective  by the U. S.  Securities  and  Exchange
Commission  (the  "SEC"),   consistent   with  the  investment   objectives  and
restrictions  of the Fund  described  therein  and as they may  subsequently  be
changed  by  the  Fund's  Board  of  Trustees  and  publicly  described  and  as
Sub-Advisor is notified of such changes.  Sub-Advisor  will furnish such service
by constructing and providing  Advisor with a model  investment  portfolio which
shall consist of percentage  allocations to country equity markets together with
currency hedge allocations,  according to Guidelines provided by Advisor ("Model

Sub-Advisor  will inform Advisor of the Model Portfolio in a report  ("Portfolio
Report").  Sub-Advisor will monitor the composition and performance of the Model
Portfolio  on a continuous  basis and will advise  Advisor of any changes to the
Model Portfolio that  Sub-Advisor  believes are advisable in light of changes in
market conditions or other developments that have occurred since the date of the
most recent Portfolio Report. Sub-Advisor will immediately deliver to Advisor an
updated/revised  Portfolio  Report  that  reflects  all  changes  in  the  Model
Portfolio that are  recommended by  Sub-Advisor.  It is understood and agreed by
the parties  hereto that  Sub-Advisor  is only  providing  the Model  Portfolio.
Advisor  understands and accepts that it will

implement the Model Portfolio on a best endeavor's basis.  While Advisor intends
to  implement  the Model  Portfolio  as  provided  by  Sub-Advisor,  Sub-Advisor
understands that Advisor will review all Model Portfolio recommendations and may
deviate from a recommendation if, in the discretion of Advisor, the deviation is
necessary  to  comply  with  investment  policies  and/or  restrictions  and any
applicable  regulatory  requirements.  In such  circumstances  the Advisor  will
promptly  notify the  Sub-Advisor of any deviations from the Model Portfolio and
the reasons therof.

All Portfolio  Reports and updates  thereto will be  transmitted  to Advisor via
electronic  mail or such other form of  communication  as the  parties  mutually
agree.  Sub-Advisor shall maintain policies and procedures to monitor for signal
errors  and  shall  promptly  report  any such  errors  to the  daily  Portfolio
Department Contact and the Fund's Chief Compliance Officer ("CCO").

Sub-Advisor  shall  inform  Advisor of any  material  changes  to  Sub-Advisor's
investment process as it relates to the Fund prior to implementing such material

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