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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

SCHEDULE 14A
(Rule 14a-101)
INFORMATION REQUIRED IN A PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934 (Amendment No. )

Filed by the Registrant /X/
Filed by a party other than the Registrant / /

Check the appropriate box:
/X/ Preliminary Proxy Statement
/ / CONFIDENTIAL, FOR USE OF THE COMMISSION ONLY (AS PERMITTED BY RULE
14a-6(e)(2))
/ / Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to Section 240.14a-12

RYDEX VARIABLE TRUST
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)

- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

Payment of Filing Fee (Check the appropriate box):

/X/ No fee required.

/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(4)
and 0-11.

(1) Title of each class of securities to which transaction applies:

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(2) Aggregate number of securities to which transaction applies:

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(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):

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(4) Proposed maximum aggregate value of transaction:

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(5) Total fee paid:

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/ / Fee paid previously with preliminary materials.

/ / Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.

(1) Amount Previously Paid:

------------------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:

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(3) Filing Party:

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(4) Date Filed:

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RYDEX VARIABLE TRUST

Dear Shareholder:

As most of you are already aware, Albert P. "Skip" Viragh, Jr. died of cancer in
December, 2003. Mr. Viragh was the founder and controlling shareholder of Rydex
Investments (the "Advisor"), the investment adviser to the Rydex family of
mutual funds. Upon Mr. Viragh's death, ownership of Mr. Viragh's interest in the
Advisor transferred to certain beneficiaries of his estate. This transaction
resulted in a change of control at the Advisor, which in turn caused the
termination of each of the investment advisory agreements between Advisor and
each of the Rydex funds.

As a result, a Special Meeting of Shareholders (the "Meeting") of each of the
Rydex mutual funds, including the Rydex Variable Trust (the "Trust"), has been
scheduled for Friday, April 30, 2004. The Trust includes the Nova, Ursa, OTC,
Arktos, Medius, Mekros, Titan 500, Tempest 500, Velocity 100, Venture 100, U.S.
Government Bond, Juno, Large-Cap Europe, Large-Cap Japan, Banking, Basic
Materials, Biotechnology, Consumer Products, Electronics, Energy, Energy
Services, Financial Services, Health Care, Internet, Leisure, Precious Metals,
Real Estate, Retailing, Technology, Telecommunications, Transportation,
Utilities, Sector Rotation, Core Equity, CLS AdvisorOne Amerigo VT, CLS
AdvisorOne Clermont VT and U.S. Government Money Market Funds (each a "Fund" or
"Variable Fund," and collectively, the "Variable Funds"). If you are a
shareholder of record of any of the Variable Funds as of the close of business
on March 2, 2004 you are entitled to vote at the Meeting and any adjournment of
the Meeting.

At the Meeting, you are being asked to approve a new advisory agreement between
the Advisor and the Trust. Shareholders of the CLS AdvisorOne Amerigo VT and CLS
AdvisorOne Clermont VT Funds (the "Sub-Advised Funds") are also being asked to
approve a new sub-advisory agreement between the Advisor and Clarke Lanzen
Skalla Investment Firm, LLC ("CLS"), the sub-advisor to the Sub-Advised Funds.
Each of these new advisory agreements have substantially the same terms as the
previous advisory agreements. NO FEE INCREASE WILL RESULT FROM APPROVING THE NEW
ADVISORY AGREEMENTS. In addition, you are being asked to approve the election of
trustees to the Board of Trustees of the Trust, as well as other items of
business to certain Variable Funds as further described in the attached proxy
statement.

I'm sure that you, like most people, lead a busy life and are tempted to put
this proxy aside for another day. Please don't. When shareholders do not return
their proxies, additional expenses are incurred to pay for follow-up mailings
and telephone calls. YOUR VOTE IS IMPORTANT TO US. PLEASE TAKE A FEW MINUTES TO
REVIEW THIS PROXY STATEMENT AND VOTE YOUR SHARES TODAY. THE CURRENT BOARD OF
TRUSTEES HAS UNANIMOUSLY APPROVED EACH OF THE PROPOSAL AND RECOMMENDS A VOTE
"FOR" EACH.

While you are, of course, welcome to join us at the meeting, most shareholders
cast their votes by filling out and signing the enclosed proxy card. Whether or
not you plan to attend the meeting, we need your vote. Please mark, sign, and
date the enclosed proxy card and return it promptly in the enclosed postage-paid
envelope so that the maximum number of shares may be voted. Please do not
hesitate to call 1-800-___-____ if you have any questions about the proposals
under consideration. Thank you for taking the time to consider these important
proposals and for your investment in the Variable Funds.

Sincerely,

Carl G. Verboncoeur
President, Rydex Variable Trust

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VERY IMPORTANT NEWS FOR SHAREHOLDERS

We recommend that you read the complete Proxy Statement. For your convenience,
we have provided a brief overview of the proposals to be voted on at the
Meeting.

QUESTIONS AND ANSWERS

Q. WHY AM I RECEIVING THIS PROXY STATEMENT?

A. You are receiving these proxy materials - a booklet that includes the
Proxy Statement and a proxy card - because you have the right to vote on
these important proposals concerning your investment in the Variable
Funds. The majority of these proposals relate to actions that need to be
taken in response to the recent death of Albert P. "Skip" Viragh, Jr., the
founder and controlling shareholder of Rydex Investments (the "Advisor")
the investment adviser to the Variable Funds.

Q. WHY AM I BEING ASKED TO VOTE ON NEW ADVISORY AGREEMENTS?

A. The Investment Company Act of 1940 (the "1940 Act"), the law that
regulates mutual funds, requires an investment advisory agreement between
an investment adviser and a fund to terminate whenever there is a change
in control of the investment adviser. After an investment advisory
agreement terminates, shareholders are required to approve a new agreement
between an investment adviser and the fund.

The Advisor is owned entirely by the 2003 Dynamic Irrevocable Trust (the
"Viragh Family Trust"). Prior to his death on December 11, 2003, Mr.
Viragh controlled the Viragh Family Trust. Upon Mr. Viragh's death, there
was a change of control of the Viragh Family Trust. This change of control
of the Viragh Family Trust resulted in a change of control of the Advisor,
which in turn resulted in the termination of each of the investment
advisory agreements between the Advisor and the Trust, as well as the
sub-advisory agreement between the Advisor and Clarke Lanzen Skalla
Investment Firm, LLC ("CLS"), the sub-advisor to the CLS AdvisorOne
Amerigo VT and CLS AdvisorOne Clermont VT Funds (the "Sub-Advised Funds")
of the Trust (each, an "Old Agreement").

On February 13, 2004, the Board approved a new advisory agreement for the
Trust, and a new sub-advisory agreement between the Advisor and CLS for
the Sub-Advised Funds, (each, a "New Agreement") under which, subject to
its approval by each Fund's shareholders, the Advisor will continue serve
as investment adviser to each Variable Fund, and CLS will continue serve
as investment sub-adviser to the Sub-Advised Funds. The Advisor's fee
rates for its services to the Variable Funds under the New Agreement is
the same as its fee rates under the corresponding Old Agreement (the
Advisor is responsible for the payment of fees to CLS for services it
performs for the Sub-Advised Funds). The other terms of the New Agreements
are similar to those of the Old Agreements.

Q. HOW DOES THE CHANGE IN CONTROL OF THE ADVISOR AFFECT ME?

A. Other than the change in the ownership, the operations of the Advisor, the
fees payable to the Advisor and the persons responsible for the day-to-day
investment management of the Variable Funds remain unchanged. The current
management of the Advisor has assured the Board that there will be no
reduction or other significant change in the nature or quality of the
investment advisory services to each Variable Fund as a result of the
change in ownership.

Q. WHO HAS BEEN MANAGING THE VARIABLE FUNDS SINCE THE TERMINATION OF THE OLD
AGREEMENTS?

A. During the period between the termination of the Old Agreements and the
approval of the New Agreements by shareholders (the "Interim Period"), the
Advisor has continued to provide investment

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advisory services to the Variable Funds pursuant to interim agreements
between the Advisor and the Trust that were approved by the Board at a
special meeting it held shortly after Mr. Viragh's death (each an "Interim
Agreement" and collectively, the "Interim Agreements"). The Interim
Agreement is identical in all respects - including fees to be paid to the
Advisor - to its corresponding Old Agreement, except for the time periods
covered by the agreements. With respect to each Variable Fund, the New
Agreement will replace the Interim Agreement upon approval by
shareholders.

Q. WHAT HAPPENS IF THE NEW AGREEMENTS ARE NOT APPROVED?

A. If the shareholders of one or more Variable Funds do not approve the New
Agreement with the Advisor, or the new sub-advisory agreement between the
Advisor and CLS, the Board will take such further action as it deems in
the best interests of the shareholders of the Variable Fund.

Q. WHAT IS HAPPENING TO THE TRUST'S BOARD OF TRUSTEES?

A. The Trust is seeking to add Carl G. Verboncoeur, Mr. Viragh's successor as
Chief Executive Officer of the Advisor, to the Board of Trustees (the
"Board") of the Trust to fill the vacancy created by Mr. Viragh's death.
Similar to Mr. Viragh's former status, Mr. Verboncoeur is considered an
"interested person" (as that term is defined in the 1940 Act) of the Trust
because of his employment by the Advisor. In addition to Mr. Verboncoeur,
the current members of the Board additionally have been proposed for
reelection to the Board (together with Mr. Verboncoeur, the "Proposed
Trustees"). With the exception of Mr. Verboncoeur, each of the Proposed
Trustees would be considered an "Independent Trustee" of the Trust.

Q. WHY AM I BEING ASKED TO VOTE ON THE ELECTION OF THE PROPOSED TRUSTEES?

A. Appointments to the Board generally are made by existing Trustees.
However, the 1940 Act provides that trustees may not fill vacancies unless
thereafter at least two-thirds of the trustees have been elected by
shareholders. Because two of the five current members of the Board have
not been elected by shareholders, the Board could not appoint Mr.
Verboncoeur to the Board. Since a shareholder vote is required to elect
Mr. Verboncoeur, the Board has proposed that shareholders elect all of the
Proposed Trustees. The Board believes that it is in shareholders' best
interests to provide the Board with the flexibility to appoint additional
trustees in the future, without the costs and delays associated with
holding a special shareholders' meeting to so.

Q. WHAT ARE THE OTHER PROPOSALS?

A. The Board is recommending that shareholders approve proposals to change
the investment objective of certain of the Variable Funds from a
fundamental policy to a non-fundamental policy. Under the 1940 Act,
"fundamental" investment restrictions may be changed or eliminated only if
shareholders approve such action. Non-fundamental policies may be changed
by a vote of a majority of the Board, and do not require shareholder
approval. Currently, the investment objective of each of the Trust's Nova
Fund, Ursa Fund, OTC Fund, Bond Fund, and Juno Fund, including the
benchmarks of the Nova Fund and Ursa Fund, are fundamental. The Board
believes that it is in shareholders' best interests to provide the Board
with the flexibility to change these Variable Funds' investment objectives
(or benchmarks) in the future, without the costs and delays associated
with holding a special shareholders' meeting to do so.

Q. HOW WILL THIS CHANGE REGARDING THE INVESTMENT OBJECTIVE AFFECT THESE
VARIABLE FUNDS?

A. There is no current intention by the Board to change the investment
objective or benchmark of any of these Variable Funds. Each Fund will
continue to be managed in accordance with the Trust's prospectus as filed
with the Securities and Exchange Commission and as amended from time to
time.

Q. HOW DO THE CURRENT TRUSTEES SUGGEST THAT I VOTE?

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A. After careful consideration, the Trustees unanimously recommended that you
vote "FOR" all of the proposals contained in the Proxy Statement. Please
see "Board Recommendations" with respect to each proposal for a discussion
of the Board's considerations in making such recommendations.

Q. WILL MY VOTE MAKE A DIFFERENCE?

A. Yes. Your vote is needed to ensure that the proposals can be acted upon.
We encourage all shareholders to participate in the governance of their
Fund(s). Additionally, your immediate response on the enclosed proxy card
will help save the costs of any further solicitations.

Q. I'M A SMALL INVESTOR. WHY SHOULD I BOTHER TO VOTE?

A. Every vote is important. If numerous shareholders just like you fail to
vote, the Funds may not receive enough votes to go forward with the
meeting. If this happens, the Funds will need to solicit votes again.

Q. HOW DO I PLACE MY VOTE?

A. You may provide the Trust with your vote via mail, by Internet, by
telephone, or in person. You may use the enclosed postage-paid envelope to
mail your proxy card. Please follow the enclosed instructions to utilize
any of these voting methods. If you need more information on how to vote,
or if you have any questions, please call the Funds.

Q. WHOM DO I CALL IF I HAVE QUESTIONS?

A. We will be happy to answer your questions about this proxy solicitation.
Please call the Funds at 1-800-___-___ between 8:30 a.m. and 5:00 p.m.,
Eastern Time, Monday through Friday.

PROMPT EXECUTION AND RETURN OF THE ENCLOSED PROXY CARD IS REQUESTED. A
SELF-ADDRESSED, POSTAGE-PAID ENVELOPE IS ENCLOSED FOR YOUR CONVENIENCE,
ALONG WITH INSTRUCTIONS ON HOW TO VOTE OVER THE INTERNET OR BY TELEPHONE
SHOULD YOU PREFER TO VOTE BY ONE OF THOSE METHODS.

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RYDEX VARIABLE TRUST

9601 Blackwell Road, Suite 500
Rockville, MD 20850

NOTICE OF SPECIAL MEETING OF SHAREHOLDERS

TO BE HELD ON FRIDAY, APRIL 30, 2004

Notice is hereby given that a Special Meeting of Shareholders (the "Meeting") of
the Rydex Variable Trust's (the "Trust") Nova, Ursa, OTC, Arktos, Medius,
Mekros, Titan 500, Tempest 500, Velocity 100, Venture 100, U.S. Government Bond,
Juno, Large-Cap Europe, Large-Cap Japan, Banking, Basic Materials,
Biotechnology, Consumer Products, Electronics, Energy, Energy Services,
Financial Services, Health Care, Internet, Leisure, Precious Metals, Real
Estate, Retailing, Technology, Telecommunications, Transportation, Utilities,
Sector Rotation, Core Equity, CLS AdvisorOne Amerigo VT, CLS AdvisorOne Clermont
VT and U.S. Government Money Market Funds (each a "Fund" or "Variable Fund," and
collectively, the "Funds") will be held at the offices of Rydex Investments,
9601 Blackwell Road, Suite 500, Rockville, MD 20850 on Friday, April 30, 2004 at
4:30 p.m. Eastern Time.

At the Meeting, shareholders of record (the "Shareholders") will be asked to
consider and act on the following proposals:

<Table>
<Caption>
DESCRIPTION OF PROPOSAL: VARIABLE FUNDS SOLICITED:
- ------------------------------------------------------------------------------------------------------------

1. TO CONSIDER AND VOTE ON THE ELECTION OF COREY A. COLEHOUR, All Funds
J. KENNETH DALTON, JOHN O. DEMARET, PATRICK T. MCCARVILLE,
ROGER SOMERS AND CARL G. VERBONCOEUR AS TRUSTEES OF THE
TRUST.

2. THE APPROVAL OF A NEW INVESTMENT ADVISORY AGREEMENT BETWEEN All Funds
RYDEX VARIABLE TRUST AND PADCO ADVISORS II, INC.

3 THE APPROVAL OF A NEW INVESTMENT SUB-ADVISORY AGREEMENT CLS AdvisorOne Amerigo VT Fund
BETWEEN PADCO ADVISORS II, INC. AND CLARKE LANZEN SKALLA CLS AdvisorOne Clermont VT Fund
INVESTMENT FIRM, LLC.

4. THE APPROVAL OF THE CHANGE OF INVESTMENT OBJECTIVE FROM A Nova Fund, Ursa Fund, OTC Fund, Bond
FUNDAMENTAL TO A NON-FUNDAMENTAL POLICY (INCLUDES SEPARATE Fund, and Juno Fund
SUB-PROPOSALS 4(a) - 4(e) RELATING TO THE INVESTMENT
OBJECTIVE OF EACH OF THE FUNDS IN THE OPPOSITE COLUMN).

5. ANY OTHER BUSINESS PROPERLY BROUGHT BEFORE THE MEETING.
</Table>

All Shareholders are cordially invited to attend the Meeting. However, if you
are unable to attend the Meeting, you are requested to mark, sign and date the
enclosed Proxy Card and return it promptly in the enclosed, postage-paid
envelope so that the Meeting may be held and a maximum number of shares may be
voted. In addition, you can vote easily and quickly by mail, by Internet, by
telephone or in person. Your vote is important no matter how many shares you
own. You may change your vote even though a proxy has already been returned by
written notice to the Trust, by submitting a subsequent proxy using the mail, by
Internet, by telephone or by voting in person at the Meeting.

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Shareholders of record at the close of business on March 2, 2004 are entitled to
notice of and to vote at the Meeting or any adjournment thereof.

By Order of the Board of Trustees

Carl G. Verboncoeur
President, Rydex Variable Trust

March [__], 2004

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RYDEX VARIABLE TRUST

9601 Blackwell Road, Suite 500
Rockville, MD 20850

PROXY STATEMENT
SPECIAL MEETING OF SHAREHOLDERS

TO BE HELD ON FRIDAY, APRIL 30, 2004

This Proxy Statement is furnished in connection with the solicitation of proxies
by the Board of Trustees of Rydex Variable Trust (the "Trust") for use at the
Special Meeting of Shareholders to be held on April 30, 2004 at 4:30 p.m.
Eastern Time at the offices of Rydex Investments, 9601 Blackwell Road, Suite
500, Rockville, MD 20850, and at any adjourned session thereof (such Special
Meeting and any adjournment thereof are hereinafter referred to as the
"Meeting"). Shareholders of each of the Trust's Nova, Ursa, OTC, Arktos, Medius,
Mekros, Titan 500, Tempest 500, Velocity 100, Venture 100, U.S. Government Bond,
Juno, Large-Cap Europe, Large-Cap Japan, Banking, Basic Materials,
Biotechnology, Consumer Products, Electronics, Energy, Energy Services,
Financial Services, Health Care, Internet, Leisure, Precious Metals, Real
Estate, Retailing, Technology, Telecommunications, Transportation, Utilities,
Sector Rotation, Core Equity, CLS AdvisorOne Amerigo VT, CLS AdvisorOne Clermont
VT and U.S. Government Money Market Funds (each a "Fund" or "Variable Fund," and
collectively, the "Funds") of record at the close of business on March 2, 2004
("Shareholders") are entitled to vote at the Meeting.

As of March 2, 2004, the Funds had the following units of beneficial interest
("shares") issued and outstanding:

<Table>
<Caption>
VARIABLE FUND SHARES ISSUED AND OUTSTANDING
----------------------------------------------------------------

Nova
Ursa
OTC
Arktos
Medius
Mekros
U.S. Government Bond
Juno
Large-Cap Europe
Large-Cap Japan
Banking
Basic Materials
Biotechnology
Consumer Products
Electronics
Energy
Energy Services
Financial Services
Health Care
Internet
Leisure
Precious Metals
Real Estate
Retailing
Technology
</Table>

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<Table>

Telecommunications
Transportation
Utilities
U.S. Government Money Market
Titan 500
Tempest 500
Velocity 100
Venture 100
AGGREGATE SHARES
</Table>

INTRODUCTION AND GENERAL INFORMATION

GENERAL INFORMATION. As used in this proxy statement, the Trust's Board of
Trustees is referred to as the "Board," and the term "Trustee" includes each
trustee of the Trust. A Trustee that is an interested person of the Trust is
referred to in this proxy statement as an "Interested Trustee." A Trustee may be
an interested person of the Trust because he or she is affiliated with the
Trust's investment adviser, PADCO Advisors II, Inc., the Trust's principal
underwriter or any of their affiliates. PADCO Advisors II, Inc., together with
its affiliate, PADCO Advisors, Inc., operates as Rydex Investments (the
"Advisor"). Trustees that are not interested persons of the Trust are referred
to in this proxy statement as "Independent Trustees."

The Trust is organized as a Delaware statutory trust and, as such, is not
required to hold annual meetings of Shareholders. The Board has called the
Meeting in order to permit the Shareholders to consider and vote on the
Proposals set forth in the foregoing notice. If you wish to participate in the
Meeting you may submit the proxy card included with this proxy statement or
attend in person. Your vote is important no matter how many shares you own. You
can vote easily and quickly by mail, by Internet, by telephone or in person. At
any time before the Meeting, you may change your vote, even though a proxy has
already been returned, by written notice to the Trust at 9601 Blackwell Road,
Suite 500, Rockville, MD 20850 or by submitting a subsequent proxy, by mail, by
Internet, by telephone or by voting in person at the meeting. Should
Shareholders require additional information regarding any of the proposals
contained in the Proxy Statement, or replacement proxy cards, they may contact
the Funds at 1-800-[___-____].

In addition to the solicitation of proxies by mail, the Board and officers of
the Trust, as well as employees of any proxy soliciting firm engaged by the
Trust, may solicit proxies in person or by telephone. Persons holding shares as
nominees will, upon request, be reimbursed for their reasonable expenses
incurred in sending soliciting materials to their principals. The Trust will
bear the costs of the Shareholders' Meeting and proxy materials. The proxy card
and this Proxy Statement are being mailed to Shareholders on or about March
[__], 2004.

Shares represented by duly executed proxies will be voted in accordance with the
instructions given. All proxy cards solicited that are properly executed and
received in time to be voted at the Meeting will be voted at the Meeting or any
adjournment thereof according to the instructions on the proxy card. If no
specification is made on a proxy card, it will be voted FOR the matters
specified on the proxy card.

QUORUM AND MEETING ADJOURNMENTS. Each whole share is entitled to one vote,
and each fractional share is entitled to a proportionate fractional vote on
each matter as to which such shares are to be voted at the Meeting. One-third
(33 1/3%) of the Trust's (or Fund's, as applicable) shares entitled to vote
on a proposal constitutes a quorum. For purposes of determining the presence
of a quorum, abstentions or broker non-votes will be counted as present;
however, they will have the effect of a vote against the proposal.

If a quorum is not present at the Meeting, or if a quorum is present at the
Meeting but sufficient votes to approve one or more Proposals are not received,
or if other matters arise requiring shareholder attention, the persons named as
proxy agents may propose one or more adjournments of the Meeting to permit
further solicitation of proxies. Any such adjournment will require the
affirmative vote of a majority of those shares present at the

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Meeting or represented by proxy. The persons named as proxies will vote those
proxies that they are entitled to vote FOR such proposal in favor of such an
adjournment, and will vote those proxies required to be voted AGAINST such
proposal, against such an adjournment.

VOTE REQUIRED TO APPROVE PROPOSALS. If a quorum is present at the Meeting, the
following represents the votes required for the approval of the Proposals. With
respect to Proposal 1, a plurality of the Trust's shares voted shall elect a
Trustee. With respect to Proposals 2, 3 and Sub-Proposals 4(a) - 4(e), the
approval of such Proposal requires the affirmative vote of a "majority of the
outstanding voting securities" of each Fund to approve the Proposal with respect
to that Fund. Under the Investment Company Act of 1940, as amended, (the "1940
Act"), the vote of a "majority of the outstanding voting securities" of a Fund
means the affirmative vote of the lesser of (a) 67% or more of the voting
securities present at the meeting or represented by proxy if the holders of more
than 50% of the outstanding voting securities are present or represented by
proxy or (b) more than 50% of the outstanding voting securities.

DISCUSSION OF PROPOSAL 1: ELECTION OF BOARD OF TRUSTEES

PROPOSAL 1. TO CONSIDER AND VOTE ON THE ELECTION OF COREY A. COLEHOUR,
J. KENNETH DALTON, JOHN O. DEMARET, PATRICK T. MCCARVILLE, ROGER
SOMERS AND CARL G. VERBONCOEUR AS TRUSTEES OF THE TRUST.

FUNDS VOTING ON PROPOSAL 1: All Variable Funds

It is proposed that Corey A. Colehour, J. Kenneth Dalton, John O. Demaret,
Patrick T. McCarville, Roger Somers and Carl G. Verboncoeur (the "Proposed
Trustees") be elected at the Meeting to serve as Trustees of the Trust. With the
exception of Mr. Verboncoeur, each of the Proposed Trustees is currently on the
Board of the Trust. Each Trust is seeking to add Mr. Verboncoeur, Mr. Viragh's
successor as Chief Executive Officer of the Advisor, to its Board to fill the
vacancy created by Mr. Viragh's death.

Similar to Mr. Viragh's former status, Mr. Verboncoeur is considered an
"interested person" (as that term is defined in the 1940 Act) of the Trust
because of his employment with the Advisor. With the exception of Mr.
Verboncoeur, each of the other Proposed Trustees would be considered an
"Independent Trustee" of the Trust. Together, the Proposed Trustees will
comprise the entire Board of the Trust and serve until their successors have
been duly elected and qualified or until their earlier resignation or removal.
The names and ages of the Proposed Trustees, their principal occupations during
the past five years and certain of their other affiliations are provided below.
Mr. Verboncoeur currently serves as President of the Trust, and would continue
to serve in such capacity if elected at the Meeting. No other Proposed Trustee
will serve as an officer of the Trust. Each of the Proposed Trustees has agreed
to serve if elected at the Meeting. It is the intention of the persons
designated as proxies, unless otherwise directed therein, to vote at the Meeting
for the election of the Proposed Trustees named below. If any Proposed Trustee
is unable or unavailable to serve, the persons named as proxies will vote for
such other person(s) as the Board may recommend.

The Board has overall responsibility to manage and control the business affairs
of the Trust, including the complete and exclusive authority to oversee and to
establish policies regarding the management, conduct and operation of the
Trust's business. The Trustees serve on the Board for terms of indefinite
duration. A Trustee's position in that capacity will terminate if he or she is
removed, resigns or is subject to various disabling events such as death or
incapacity. In the event of any vacancy in the position of a Trustee, the
remaining Trustees may appoint an individual to serve as a Trustee, subject to
the provisions of the 1940 Act. A Trustee may be removed either by (a) the vote
or written consent of at least two-thirds of the Trustees not subject to the
removal vote or (b) the vote or written consent of Shareholders holding not less
than two-thirds of the Trust's outstanding shares.

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The Board held four regular meetings, and one special meeting, during the
Trust's most recent fiscal year. Each Trustee then in office attended at least
75% of the aggregate of the total number of meetings of the Board and the total
number of meetings held by all committees of the Board on which the Trustee
served.

INFORMATION ABOUT THE PROPOSED TRUSTEES

Listed below, for each Proposed Trustee, are their names and ages, as well as
their positions and length of service with the Trust, principal occupations
during the past five years, the number of portfolios in the Rydex fund complex
that they oversee, and any other directorships held by the Proposed Trustee. The
business address of each Proposed Trustee is 9601 Blackwell Road, Suite 500,
Rockville, Maryland 20850.

INDEPENDENT PROPOSED TRUSTEES:

<Table>
<Caption>
NUMBER OF
FUNDS IN RYDEX
NAME AND LENGTH OF PRINCIPAL OCCUPATION(S) FUND COMPLEX
AGE POSITION TIME SERVED DURING PAST 5 YEARS OVERSEEN* OTHER DIRECTORSHIPS
- --------------------------------------------------------------------------------------------------------------------------

Corey A. Trustee Rydex Variable Senior Vice President of [80] Trustee of Rydex Series
Colehour Trust (1998 to Marketing of Schield Funds (1993 to
(58) present)(+) Management Company, a present); Rydex Dynamic
registered investment Funds, (1999 to
advisor (1985 to present). present); and Rydex ETF
Trust (2003 to present)

J. Kenneth Trustee Rydex Variable Mortgage Banking [80] Trustee of Rydex Series
Dalton Trust (1998 to Consultant and Investor, Funds (1995 to
(63) present)(+) The Dalton Group, a real present); Rydex Dynamic
estate company (1995 to Funds, (1999 to
present). present); and Rydex ETF
Trust (2003 to present)

John O. Trustee Rydex Variable Founder and Chief [81] Trustee of Rydex Series
Demaret Trust (1998 to Executive Officer, Health Funds (1997 to
(64) present)(+) Cost Controls America, present); Rydex
Chicago, Illinois (1987 to Variable Trust (1998 to
1996) sole practitioner, present)(+); Rydex
Chicago, Illinois (1984 to Dynamic Funds, (1999 to
1987); General Counsel for present); Rydex ETF
the Chicago Transit Trust (2003 to
Authority (1981 to 1984); present); and Rydex
Senior Partner, Capital Partners Sphinx
O'Halloran, LaVarre & Fund (2003 to present)
Demaret, Northbrook,
Illinois (1978 to 1981).

Patrick T. Trustee Rydex Variable Founder and Chief [80] Trustee of Rydex Series
McCarville Trust (1998 to Executive Officer, Par Funds (1997 to
(61) present)(+) Industries, Inc., present); Rydex Dynamic
Northbrook, Illinois (1977 Funds, (1999 to
to present). present); and Rydex ETF
Trust (2003 to present)

Roger Trustee Rydex Variable President, Arrow Limousine [80] Trustee of Rydex Series
Somers (59) Trust (1998 to (1963 to present). Funds (1997 to
present)(+) present); Rydex Dynamic
Funds, (1999 to
present); and Rydex ETF
Trust (2003 to present)
</Table>

4
<Page>

INTERESTED PROPOSED TRUSTEE:

<Table>
<Caption>
NUMBER OF
FUNDS IN
RYDEX FUND
NAME AND LENGTH OF TIME PRINCIPAL OCCUPATION(S) COMPLEX OTHER
AGE POSITION SERVED DURING PAST 5 YEARS OVERSEEN* DIRECTORSHIPS
- --------------------------------------------------------------------------------------------------------------------------

Carl G. President Rydex Variable Trust Chief Executive Officer of [80] Proposed
Verboncoeur and (2003 to present) Rydex Fund Services, Inc., Trustee of
(51)** Proposed PADCO Advisors, Inc., Rydex Series
Trustee PADCO Advisors II, Inc., Funds; Rydex
Rydex Distributors, Inc. Dynamic Funds;
(2003 to present); and Rydex ETF
Executive Vice President Trust
of Rydex Fund Services,
Inc. (2000 to 2003); Vice
President of Rydex Fund
Services, Inc. and Rydex
Distributors, Inc., (1997
to 2003).
</Table>

+ Each Trustee had previously served on the board of the Rydex Advisor
Variable Annuity Account, the predecessor to the Rydex Variable Trust.

* The number of Funds is based on each currently operating series of the
registered investment companies within the Rydex fund complex that a
Trustee currently oversees, or that a Proposed Trustee would oversee if
elected. These funds are all advised by the Advisor, and also share a
common principal underwriter.

** Mr. Verboncoeur would be considered an "interested person" (as that term
is defined in the 1940 Act) of the Trust because of his employment as
Chief Executive Officer of the Advisor and principal underwriter.

FUND SHARES OWNED BY PROPOSED TRUSTEES. The following table shows the dollar
amount range of each Trustee's "beneficial ownership" of shares by Fund and in
the aggregate across all Funds as of December 31, 2003. Dollar amount ranges
disclosed are set forth as established by the Commission. "Beneficial ownership"
is determined in accordance with Rule 16a-1(a)(2) under the Securities Exchange
Act of 1934 ("1934 Act").

INDEPENDENT PROPOSED TRUSTEES:

<Table>
<Caption>
AGGREGATE DOLLAR RANGE FOR ALL FUNDS
NAME DOLLAR RANGE BY FUND OVERSEEN BY PROPOSED TRUSTEE
- ------------------------------------------------------------------------------------------------------------

Corey A. Colehour
J. Kenneth Dalton
John O. Demaret
Patrick T. McCarville
Roger Somers
</Table>

INTERESTED PROPOSED TRUSTEES:

Carl G. Verboncoeur
</Table>

BOARD COMPENSATION. The aggregate compensation paid by the Trust to each of its
Trustees serving during the most recently completed Trust fiscal year, is set
forth in the table below. No pension or retirement benefits are accrued as part
of Fund expenses. Interested Trustees receive no compensation from the Trust for
service as a Trustee.

5
<Page>

INDEPENDENT PROPOSED TRUSTEES:

<Table>
<Caption>
AGGREGATE COMPENSATION RYDEX TOTAL COMPENSATION FROM FUND COMPLEX++
NAME VARIABLE TRUST*
- ------------------------------------------------------------------------------------------------------------

Corey A. Colehour
J. Kenneth Dalton
Roger Somers
John O. Demaret
Patrick T. McCarville
</Table>

* Represents compensation for fiscal year ended December 31, 2003.

++ Represents total compensation for service as Trustee of the Rydex Series
Funds, Rydex Dynamic Funds, Rydex Variable Trust and Rydex ETF Trust and,
with respect to Mr. Demaret, compensation for service as Trustee of the
Rydex Capital Partners Sphinx Fund.

BOARD STANDING COMMITTEES

AUDIT COMMITTEE. The Board of the Trust has a standing Audit Committee that is
composed of each of the Independent Trustees of the Trust. Mr. Dalton currently
serves as chairman of the Audit Committee and Messrs. Colehour, Demaret,
McCarville, and Somers currently serve as members of the Audit Committee. The
Audit Committee operates under a written charter approved by the Board. The
Audit Committee is responsible for the selection of the Trust's independent
auditors, including evaluating their independence and meeting with such auditors
to consider and review matters relating to the Trust's financial reports and
internal accounting. The Audit Committee meets periodically, as necessary, and
met four times during the Trust's most recently completed fiscal year.

NOMINATING COMMITTEE. The Board currently does not have a standing nominating
committee. The Board is generally responsible for the nomination of persons for
election to the Board, with the selection and nomination of the Trustees who are
not "interested persons" of the Trust committed to the discretion of the
Independent Trustees. The Board does not believe that is necessary to have a
separate nominating committee at this time, given the fact that all of the
current members of the Board are Independent Trustees. The Board will, however,
consider establishing a nominating committee in the future. If the Board
establishes a nominating committee, it would determine whether to, among other
things, prepare a written charter for the committee, identify the process to be
followed by the committee in identifying and evaluating nominees (including
those recommended by Shareholders), and specify minimum qualifications for any
committee-recommended nominees.

COMMUNICATIONS WITH THE BOARD

Shareholders wishing to submit written communications to the Board should send
their communications c/o Rydex Investments, 9601 Blackwell Road, Suite 500,
Rockville, MD 20850. Any such communications received will be reviewed by the
Board at its next regularly scheduled meeting.

BOARD RECOMMENDATION ON PROPOSAL 1

Each of the Proposed Trustees have had distinguished careers in accounting,
finance, marketing and other areas and have during their current tenure as
Trustees brought, and expect to continue to bring, a wide range of expertise to
the Board and the oversight of the Trust. In its deliberations regarding the
nomination of Mr. Verboncoeur, the Board considered various matters related to
the management and long-term welfare of the Trust. The Board considered, among
other factors, the benefits that a Board member who understand the operations of
the Trust and is exposed to the wide variety of issues that arise from
overseeing the Funds on a day-to-day basis would bring to the Board. The Board
gave considerable weight to its expectation that the Trust will benefit from Mr.
Verboncoeur's experience. At its meeting on December 16, 2003, based on its
deliberations on and evaluation of the Proposed Trustees, the Board, including
all of the independent Trustees, unanimously agreed to nominate Corey A.
Colehour, J. Kenneth Dalton, John O. Demaret, Patrick T.

6
<Page>

McCarville, Roger Somers and Carl G. Verboncoeur to serve as Trustees of the
Trust and to recommend the approval of each of the Proposed Trustees to
shareholders.

THE TRUSTEES UNANIMOUSLY RECOMMEND THAT SHAREHOLDERS VOTE "FOR" EACH OF THE
PROPOSED TRUSTEES SET FORTH IN PROPOSAL 1.

INTRODUCTION TO PROPOSALS 2 AND 3: APPROVAL OF NEW INVESTMENT AGREEMENTS

Proposals 2 and 3 relate to the approval by Shareholders of new investment
advisory agreements for the Trust. The 1940 Act, which regulates investment
companies such as the Trust, requires an investment advisory agreement
between an investment adviser and an investment company to terminate whenever
there is a change in control of the investment company's investment adviser.
After an investment advisory agreement terminates, shareholders are required
to approve a new agreement between an investment adviser and the investment
company. FOR THE REASONS DISCUSSED BELOW, THE BOARD RECOMMENDS THAT
SHAREHOLDERS VOTE "FOR" THE APPROVAL OF EACH OF THE NEW AGREEMENTS.

INFORMATION REGARDING THE CHANGE IN CONTROL OF THE ADVISOR

The Advisor is owned entirely by the 2003 Dynamic Irrevocable Trust (the "Viragh
Family Trust"). Prior to his death on December 11, 2003, Mr. Viragh controlled
the Viragh Family Trust. Upon Mr. Viragh's death, control of the Viragh Family
Trust transferred to its trustees, Mark S. Viragh, Katherine A. Viragh and Roger
E. Young. This change in control of the Viragh Family Trust resulted in a change
in control of the Advisor, which in turn resulted in the termination of each of
the investment advisory agreements between the Advisor and the Trust, as well as
the sub-advisory agreement between the Advisor and Clarke Lanzen Skalla
Investment Firm, LLC ("CLS"), the sub-advisor to the CLS AdvisorOne Amerigo VT
and CLS AdvisorOne Clermont VT Funds (the "Sub-Advised Funds") of the Trust
(each, an "Old Agreement").

THE INTERIM ADVISORY AGREEMENTS

During the period between the termination of the Old Agreements and the approval
of the New Agreements by shareholders (the "Interim Period"), the Advisor has
continued to provide investment advisory services to the Funds pursuant to
interim agreements between the Advisor and the Trust that were approved by the
Board at a special meeting it held shortly after Mr. Viragh's death (each an
"Interim Agreement" and collectively, the "Interim Agreements"). Each Interim
Agreement is identical in all respects - including fees to be paid to the
Advisor - to its corresponding Old Agreement, except for the time periods
covered by the agreements. Each interim agreement provides for a termination
date no greater that 150 days from the date of the termination of the Old
Agreement, or upon approval of a new advisory agreement by shareholders,
whichever is shorter.

THE NEW ADVISORY AGREEMENTS

On February 13, 2004, the Board approved a new advisory agreement for the Trust,
and a new sub-advisory agreement between the Advisor and CLS for the Sub-Advised
Funds (each, a "New Agreement"), under which, subject to its approval by each
Fund's shareholders, the Advisor will continue serve as investment adviser to
each Fund, and CLS will continue serve as investment sub-adviser to the
Sub-Advised Funds. The Advisor's fee rates for its services to the Funds under
each New Agreement is the same as its fee rates under the corresponding Old
Agreement (the Advisor is responsible for the payment of fees to CLS for
services it performs for the Sub-Advised Funds). More detailed information
regarding fee rates under each New Agreement is contained in the discussion
below with respect to each Proposal.

BOARD CONSIDERATIONS IN APPROVING THE ADVISORY AGREEMENTS. The Old Agreement
between the Advisor and the Trust had been in place since the time of the
Trust's original creation and organization. The Old Agreement had an initial
term of two years, after which the continuance of the Old Agreement must be
specifically approved at least annually: (i) by the vote of the Trustees or by a
vote of the shareholders; and (ii)

7
<Page>

by the vote of a majority of the Independent Trustees, cast in person at a
meeting called for the purpose of voting on such approval. Since the expiration
of the initial term, each year the Board has called and held a meeting to decide
whether to renew the Old Agreement for an additional year. In preparation for
its most recent renewal meeting on August 25, 2003, the Board requested and
received written materials from the Advisor about: (a) the quality of the
Advisor's investment management and other services; (b) the Advisor's investment
management personnel; (c) the Advisor's operations and financial condition; (d)
the Advisor's brokerage practices (including any soft dollar arrangements) and
investment strategies; (e) the level of the advisory fees that the Advisor
charges the Funds compared with the fees it charges to comparable mutual funds
or accounts (if any); (f) each Fund's overall fees and operating expenses
compared with similar mutual funds; (g) the level of the Advisor's profitability
from its Fund-related operations; (h) the Advisor's compliance systems; (i) the
Advisor's policies on and compliance procedures for personal securities
transactions; (j) the Advisor's reputation, expertise and resources in domestic
financial markets; and (k) Fund performance compared with similar mutual funds.

At the meeting, representatives from the Advisor presented additional oral and
written information to the Board to help the Board evaluate the Advisor's fee
and other aspects of the Old Agreements. In addition, Mr. Viragh discussed in
executive session the plans for the continuation of the Advisors' business and
operations following his death, including (i) the planned transfer of his
interest in the Viragh Family Trust and the impact of the resulting change in
control; (ii) information regarding the individuals who would be named as
trustees of the Viragh Family Trust and who would subsequently control the
Advisor; (iii) his intention to appoint Mr. Verboncoeur to succeed him as Chief
Executive Officer of the Advisor and its affiliates; and (iv) other related
matters of interest to the Board. Other Fund service providers also provided the
Board with additional information at the meeting. The Trustees then discussed
the written materials that the Board received before the meeting and the
Advisor's oral presentation and any other information that the Board received at
the meeting, and deliberated on the renewal of each Old Agreement in light of
this information. In its deliberations, the Board did not identify any single
piece of information that was all-important or controlling. Based on the Board's
deliberations and its evaluation of the information described above, the Board,
including all of the independent Trustees, unanimously: (a) concluded that terms
of the Old Agreements were fair and reasonable; (b) concluded that the Advisor's
fees were reasonable in light of the services that the Advisor provides to the
Fund; and (c) agreed to renew each Old Agreement for an additional one-year
term.

At its meeting on February 13, 2004, the Advisor affirmed that there were no
material changes to the information that was provided to the Board at its last
advisory contract renewal meeting, and provided updated additional information
regarding the Advisor's operations and services provided to the Funds. The Board
also requested and received information regarding the terms of the New
Agreements, and were satisfied that the terms of the New Agreements set forth
materially similar rights, duties and obligations on the Advisor with regard to
its services to the Trust and provided at least the same level of protection to
the Trust and its shareholders as the Old Agreement. The Board also considered
the fact that the Advisor's fee rates for its services to the Funds under each
New Agreement would be the same as its fee rates under the corresponding Old
Agreement. Based on the Board's deliberations and its evaluation of the
information described above, the Board, including all of the independent
Trustees, unanimously: (a) concluded that terms of the New Agreements are fair
and reasonable; (b) concluded that the Advisor's fees are reasonable in light of
the services that the Advisor provides to the Fund; and (c) agreed to approve
the New Agreements for an initial term of two years, subject to the approval of
the New Agreements by shareholders, and to recommend the approval of the New
Agreements to shareholders.

DESCRIPTION OF THE TERMS OF THE NEW AGREEMENTS. A form of the New Agreement
between the Trust and the Advisor is attached to this proxy statement as Exhibit
A, and a form of the New Sub-Advisory Agreement between the Advisor and CLS is
attached to this proxy as Exhibit B. Each New Agreement provides that the
Advisor's fee rate with respect to each Fund will remain unchanged from the fee
rate contained in its corresponding Old Agreement. With respect to duration of
each New Agreement, the New Agreement provides that unless terminated as
provided therein, the New Agreement shall continue for an initial term of two
years. Thereafter, the New Agreement shall continue in effect for successive
annual periods provided such continuance

8
<Page>

is specifically approved at least annually (i) by the vote of the Trustees or by
a vote of the shareholders; and (ii) by the vote of a majority of the
Independent Trustees, cast in person at a meeting called for the purpose of
voting on such approval. Each New Agreement provides for automatic termination,
without the payment of any penalty, in the event of its assignment (as defined
by the 1940 Act).

Pursuant to the New Agreement between the Trust and the Advisor, the Advisor
will act as investment adviser to each Fund. The New Agreement requires the
Advisor to:

- - provide the Funds with investment research, advice and supervision and
shall furnish continuously an investment program for the Funds,
consistent with the respective investment objectives and policies of each
Fund;

- - determine, in its discretion and without prior consultation, what
securities shall be purchased for the Funds, what securities shall be
held or sold by the Funds and what portion of the Funds' assets shall be
held uninvested in cash, subject always to the provisions of the Trust's
Agreement and Declaration of Trust, By-Laws and its registration
statement on file with the Commission;

- - discharge its responsibilities subject to the control of the officers and
the Board, and in compliance with the objectives, policies and
limitations set forth in the Funds' prospectus and applicable laws and
regulations;

- - vote any proxies for Fund securities;

- - provide the Trust, and any other agent designated by the Trust, with
records concerning the Advisor's activities which each Fund is required
to maintain; and

- - provide other reports reasonably requested by the Trust's officers and
Board concerning the Advisor's discharge of the foregoing
responsibilities.

The New Agreement also authorizes the Advisor to select the brokers or dealers
that will execute the purchases and sales of securities of each Fund and directs
the Advisor to use its best efforts to obtain the best available price and most
favorable execution. Subject to policies established by the Board, the Advisor
also may effect individual securities transactions at commission rates in excess
of the minimum commission rates available, if the Advisor determines in good
faith that such amount of commission is reasonable in relation to the value of
the brokerage or research services provided by such broker or dealer, viewed in
terms of either that particular transaction or the Advisor's overall
responsibilities with respect to each Fund.

Under the terms of the New Agreement, the Advisor agrees to render its services
and to provide, at its own expense, the office space, furnishings, equipment and
personnel required by it to perform the services on the terms and for the
compensation provided therein, as discussed in further detail below. The New
Agreement provides that the Adviser shall indemnify and hold harmless the Trust
against losses by reason of or arising out of the Advisor being in material
violation of any applicable federal or state law, rule or regulation or any
investment policy or restriction set forth in the Funds' Registration Statement
or any written guidelines or instruction provided in writing by the Board, or
the Advisor's willful misfeasance, bad faith or gross negligence generally in
the performance of its duties under or its reckless disregard of its obligations
and duties.

DIFFERENCES BETWEEN THE OLD AGREEMENT AND THE NEW AGREEMENT. The original form
for the Old Agreement between the Trust and the Advisor was created in 1993, at
the time of the organization of the Rydex Series Funds. The Old Agreement for
each of the subsequent Rydex trusts that were created - including the Rydex
Variable Trust in 1998 - were each identical in all material respects to that of
the 1993 form of agreement. The primary rationale for using the 1993 form of
agreement was to have a consistent agreement, with materially equivalent
contractual obligations, across all of the trusts within the Rydex family of
funds.

9
<Page>

Since 1993, industry best practices and regulatory requirements have evolved, as
has the course of dealing between the Board, on behalf of the Trust, and the
Advisor. The New Agreement between the Trust and the Advisor is designed to
memorialize these practices and regulatory requirements. The following bullet
points summarize the material differences between the New Agreement and the Old
Agreement:

- - Incorporation of a single comprehensive schedule that sets forth each
Fund covered by the agreement and the advisory fees payable for each
under the agreement.

- - Restatement and expansion of the Advisor's duties as investment adviser
to the Trust, including specific requirements with respect to compliance,
proxy voting, recordkeeping and Board reporting.

- - Restatement and expansion of the Advisor's duties and obligations with
respect to fund portfolio transactions, best execution and affiliated
brokerage transactions.

- - Inclusion of specific representations and warranties made by the Advisor
to the Trust, designed to contractually obligate the Advisor to do the
things it is required to do by law (however, none of these
representations or warranties represent a change in conduct or create
additional duties on the Adviser);

- - Inclusion of a license to the Trust to use the name "Rydex" in any fund
name. The name "Rydex" is a protected mark registered to PADCO Advisors,
Inc.

- - Change in jurisdiction of governing law from Maryland to Delaware.
Because the Trust is organized as a Delaware statutory trust,
interpreting the agreement under Delaware law ensures that the key
protections of the Delaware statutory trust law (i.e., limitations on
liability for the Board and shareholders, treatment of each Fund as a
separate entity with respect to assets and liabilities) would be enforced
in the event of litigation.

The Board, on behalf of the Trust, determined after reasonable consideration
that the differences between the New Agreement and the Old Agreement do not
materially change the current arrangements between the Advisor and the Trust.
Furthermore, the Board believes that the differences, particularly the change in
jurisdiction, may provide the Trust and its shareholders with additional
protections.

INFORMATION ABOUT THE ADVISOR. PADCO Advisors II, Inc. serves as the investment
adviser to the Trust. PADCO Advisors II, Inc., together with its affiliate PADCO
Advisors, Inc. operates as Rydex Investments. PADCO Advisors II, Inc. is
organized as a Maryland corporation with its principal place of business at 9601
Blackwell Road, Suite 500, Rockville, Maryland 20850. The Viragh Family Trust
owns a controlling interest as the sole shareholder of PADCO Advisors, Inc. and
PADCO Advisors II, Inc.

The name, address and principal occupation of the principal executive officers
of PADCO Advisors II, Inc. are listed below:

<Table>
<Caption>
NAME TITLE PRINCIPAL OCCUPATION
- --------------------------------------------------------------------------------------------------------------------

Carl G. Verboncoeur Chief Executive Officer Chief Executive Officer, PADCO Advisors, Inc.; PADCO Advisors II,
and Treasurer Inc.; Rydex Fund Services, Inc.; and Rydex Distributors, Inc.

Michael P. Byrum Chief Operating Officer Chief Operating Officer, PADCO Advisors, Inc.; PADCO Advisors II,
Inc.; Rydex Fund Services, Inc.; and Rydex Distributors, Inc.

Robert M. Steele Executive Vice President Executive Vice President, PADCO Advisors, Inc.; PADCO Advisors
II, Inc.; and Rydex Distributors, Inc.

Joanna M. Haigney Secretary and Assistant Chief Compliance Officer, PADCO Advisors, Inc.; PADCO Advisors
Treasurer II, Inc.; Rydex Fund Services, Inc.; and Rydex Distributors, Inc.
</Table>

10
<Page>

The address for each of the above individuals is c/o Rydex Investments, 9601
Blackwell Road, Suite 500, Rockville, Maryland 20850.

PROPOSAL 2. THE APPROVAL OF A NEW INVESTMENT ADVISORY AGREEMENT BETWEEN RYDEX
VARIABLE TRUST AND PADCO ADVISORS II, INC.

FUNDS VOTING ON PROPOSAL 2: All Funds

The Old Agreement between the Advisor and the Trust was dated August 11, 1998
and was approved by the sole shareholder of the Trust in conjunction with the
Trust's original creation and organization. The Old Agreement had been in effect
from that date through its termination upon the change in control of the Advisor
on December 11, 2003, subject to its annual renewal by the Board as discussed
above. The terms of the New Agreement, other than compensation, which is
discussed below, are described in the section above entitled "Description of the
Terms of the New Agreements." A form of the New Agreement between the Trust and
the Advisor is included as Exhibit B to this Proxy Statement.

The table below provides, with respect to each of the Trust's Funds, (i) the
Advisor's annual rate of compensation under the New Agreement, stated as a
percentage of the Fund's assets; (ii) the amount of advisory fees paid to the
Advisor pursuant to the Old Agreement (and the Interim Agreement) for the
Trust's most recently completed fiscal year ended December 31, 2003; (iii)
amounts paid by the Funds to the Servicer for administration services for the
Trust's most recently completed fiscal year ended December 31, 2003; (iv)
amounts paid by the Funds to the Servicer for accounting services for the
Trust's most recently completed fiscal year ended December 31, 2003; and (v)
amounts paid by the Funds to the Distributor for services provided pursuant to
the Trust's investor services plan for the Trust's most recently completed
fiscal year ended December 31, 2003. There were no brokerage commissions paid to
the Distributor (or any other affiliate of the Advisor) during the Trust's most
recently completed fiscal year ended December 31, 2003. The Advisor also serves
as advisor to the Rydex Series Funds' Funds, certain of which are substantially
similar to the Funds below. The Advisor's compensation for the Rydex Series
Funds is described in this Proxy Statement under Proposal 2.

<Table>
<Caption>
FEES PAID TO FEES PAID TO
ADVISORY FEES PAID TO SERVICER SERVICER FEES PAID TO
FUND FEE RATE ADVISER (ADMINISTRATION) (ACCOUNTING) DISTRIBUTOR
- ------------------------------------------------------------------------------------------------------------------------

Nova 0.75%
Ursa 0.90%
OTC 0.75%
Arktos 0.90%
Medius 0.90%
Mekros 0.90%
U.S. Government Bond 0.50%
Juno 0.90%
Large-Cap Europe 0.90%
Large-Cap Japan 0.90%
Titan 500 0.90%
Tempest 500 0.90%
Velocity 100 0.90%
Venture 100 0.90%
Banking 0.85%
Basic Materials 0.85%
Biotechnology 0.85%
Consumer Products 0.85%
Electronics 0.85%
Energy 0.85%
</Table>

11
<Page>

Energy Services 0.85%
Financial Services 0.85%
Health Care 0.85%
Internet 0.85%
Leisure 0.85%
Precious Metals 0.75%
Real Estate 0.85%
Retailing 0.85%
Technology 0.85%
Telecommunications 0.85%
Transportation 0.85%
Utilities 0.85%
Sector Rotation 0.90%
Core Equity 0.70%*
CLS AdvisorOne Amerigo 0.90%
CLS AdvisorOne Clermont 0.90%
U.S. Government Money Market 0.50%
</Table>

* The Agreement provides that the Core Equity Fund pays the Advisor a
management fee that is comprised of two components: the first component
is an annual basic fee (the "basic fee") equal to 0.70% of the Core
Equity Fund's average daily net assets, and the second component is a
performance fee adjustment. The Core Equity Fund's basic fee is subject
to upward or downward adjustment depending on whether, and to what
extent, the investment performance of the Fund for the relevant
performance period exceeds, or is exceeded by, the investment record (the
"record") of the index determined by the Fund to be appropriate over the
same period. The Trustees have designated the Russell 3000(R) Index (the
"Index") for this purpose. The Index measures the performance of the
3,000 largest U.S. companies based on total market capitalization, which
represents approximately 98% of the investable U.S. equity market. The
performance period consists of a rolling 12-month period, and will be
calculated and applied at the end of each month. Each 0.0375% of
difference will result in a performance rate adjustment of 0.01%. The
maximum annualized performance rate adjustment is +/- 0.20%. A percentage
of this rate (based on the number of days in the current month) is then
multiplied by the average daily net assets of the Core Equity Fund over
the entire performance period, giving the dollar amount that will be
added to (or subtracted from) the basic fee. The monthly performance
adjustment will be further adjusted to the extent necessary to insure
that the total of such adjustments to the basic fee does not exceed
+/-0.20% of average daily net assets for that year.

BOARD RECOMMENDATION ON PROPOSAL 2

At its meeting on February 13, 2004, based on its deliberations on and
evaluation of the information described above, the Board, including all of the
independent Trustees, unanimously: (a) concluded that terms of the New Agreement
are fair and reasonable; (b) concluded that the Advisor's fees are reasonable in
light of the services that the Advisor provides to the Funds; and (c) agreed to
approve the New Agreement for an initial term of two years and to recommend the
approval of the New Agreement to shareholders.

THE TRUSTEES UNANIMOUSLY RECOMMEND THAT SHAREHOLDERS OF EACH FUND VOTE "FOR"
PROPOSAL 2.

12
<Page>

PROPOSAL 3. THE APPROVAL OF A NEW INVESTMENT SUB-ADVISORY AGREEMENT BETWEEN
PADCO ADVISORS II, INC. AND CLARKE LANZEN SKALLA INVESTMENT FIRM,
LLC.

FUNDS VOTING ON PROPOSAL 3: CLS AdvisorOne Amerigo VT Fund
CLS AdvisorOne Clermont VT Fund

THE APPROVAL OF PROPOSAL 3 IS CONTINGENT ON THE APPROVAL OF PROPOSAL 3 BY
SHAREHOLDERS OF THE CLS ADVISORONE AMERIGO VT FUND AND THE CLS ADVISORONE
CLERMONT VT FUND.

The Old Agreement between the Advisor and CLS was dated June 20, 2003 and was
approved by the sole shareholder of each Sub-Advised Fund in conjunction with
the Fund's original creation and organization. The Old Agreement had been in
effect from that date through its termination upon the change in control of the
Advisor on December 11, 2003. The terms of the New Agreement with respect to the
Sub-Advised Funds, including fee rates, are identical, with the exception of the
date and term, to the terms of the Old Agreement with respect to the Sub-Advised
Funds. The other terms of the New Agreement with respect to the Sub-Advised
Funds are substantially similar in all material respects to those of the other
New Agreements, as described in the section above entitled "Description of the
Terms of the New Agreements." A form of the New Agreement between the Advisor
and CLS is included as Exhibit C to this Proxy Statement.

COMPENSATION. Pursuant to the terms of the New Agreement, the Advisor is
responsible for compensating CLS and pays CLS a sub-advisory fee with respect to
each of the Sub-Advised Funds at an annual rate of 0.40%, stated as a percentage
of Fund assets. The compensation terms provide that the Advisor will have no
obligation to compensate CLS for its services with respect to a Sub-Advised Fund
for any quarter in which such Fund's assets average less than $10,000,000 during
that quarter. The Advisor paid CLS $__________ for the CLS AdvisorOne Amerigo VT
Fund and $__________ for the CLS AdvisorOne Clermont VT Fund pursuant to the Old
Agreement (and the Interim Agreement) for the Trust's most recently completed
fiscal year ended December 31, 2003.

INFORMATION ABOUT CLS. CLS is organized as a Nebraska limited liability
corporation with its principal place of business at 4020 S. 147th Street, Omaha,
Nebraska 68137. [___________] owns a controlling interest CLS.

The name, address and principal occupation of the principal executive officers
of CLS are listed below:

<Table>
<Caption>
NAME TITLE PRINCIPAL OCCUPATION
- ------------------------------------------------------------------------------------------

W. Patrick Clarke Chief Executive Officer Chief Executive Officer and Manager, CLS
and Manager

Robert M. Jergovic Chief Investment Officer Chief Investment Officer, CLS

Scott R. Kubie President and Director President and Director of Research, CLS
</Table>

The address for each of the above individuals is c/o Clarke Lanzen Skalla
Investment Firm, LLC, 4020 S. 147th Street, Omaha, Nebraska 68137.

BOARD RECOMMENDATION ON PROPOSAL 3

At its meeting on February 13, 2004, based on its deliberations on and
evaluation of the information described above, the Board, including all of the
independent Trustees, unanimously: (a) concluded that terms of the New Agreement
are fair and reasonable; (b) concluded that CLS' fees are reasonable in light of
the services that the CLS provides to the Sub-Advised Funds; and (c) agreed to
approve the New Agreement for an initial term of two years and to recommend the
approval of the New Agreement to shareholders.

THE TRUSTEES UNANIMOUSLY RECOMMEND THAT SHAREHOLDERS OF EACH FUND VOTE "FOR"
PROPOSAL 3.

13
<Page>

DISCUSSION OF PROPOSAL 4: CHANGE IN FUNDAMENTAL POLICIES

PROPOSAL 4. THE APPROVAL OF THE CHANGE OF INVESTMENT OBJECTIVE FROM A
FUNDAMENTAL TO A NON-FUNDAMENTAL POLICY (THIS PROPOSAL INVOLVES
SEPARATE VOTES ON SUB-PROPOSALS 4(a) - 4(e)).

The Board is recommending that shareholders approve proposals to change the
investment objective of certain of the Funds from a fundamental policy to a
non-fundamental policy. Under the 1940 Act, "fundamental" investment
restrictions may be changed or eliminated only if shareholders approve such
action. Non-fundamental policies may be changed by a vote of a majority of the
Board, and do not require shareholder approval.

Currently, the investment objective of each of the Trust's Nova Fund, Ursa Fund,
OTC Fund, U.S. Government Bond Fund, and Juno Fund, including the benchmarks of
the Nova Fund and Ursa Fund, are fundamental. With the exception of the
aforementioned Funds included in this Proposal, the remainder of the Funds'
investment objectives are non-fundamental policies. The Board believes that it
is in shareholders' best interests to provide the Board with the flexibility to
change these Funds' investment objectives (or benchmarks) in the future, without
the costs and delays associated with holding a special shareholders' meeting to
do so. However, there is no current intention by the Board to change the
investment objective or benchmark of any of the Funds included in this Proposal.
Each Fund will continue to be managed in accordance with the Trust's prospectus
as filed with the Commission and as amended from time to time.

Shareholders are requested to vote separately, as applicable, on each
Sub-Proposal in Proposal 4. Any Sub-Proposal that is approved by shareholders of
the Fund(s) will be effective for that Fund as of the date of the supplement to
the Fund's registration statement reflecting such shareholder approval to change
certain of the Fund's fundamental policy, which is anticipated to be shortly
after the date of shareholder approval. THE BOARD OF DIRECTORS UNANIMOUSLY
RECOMMENDS A VOTE "FOR" EACH SUB-PROPOSAL.

SUB-PROPOSAL 4(a). THE APPROVAL OF THE CHANGE OF RYDEX VARIABLE
TRUST'S NOVA FUND INVESTMENT OBJECTIVE FROM A
FUNDAMENTAL TO A NON-FUNDAMENTAL POLICY.

The current investment objective of the Nova Fund is to seek to provide
investment results that match the performance of a specific benchmark
on a daily basis. The Fund's current benchmark is 150% of the
performance of the S&P 500 Index. This investment objective and the
benchmark are fundamental policies of the Fund. The Board and the
Advisor believe that the Advisor's ability to manage Fund assets in a
changing investment environment will be enhanced because the Fund will
have greater investment management flexibility to respond to market,
industry, regulatory or technical changes by seeking Board approval
only when necessary to revise its investment objective or benchmark,
without the costs and delays associated with holding a special
shareholders' meeting to do so. If approved by Shareholders, the Fund's
investment objective and benchmark will be non-fundamental policies.

THE TRUSTEES UNANIMOUSLY RECOMMEND THAT FUND SHAREHOLDERS VOTE "FOR"
SUB-PROPOSAL 4(a).

SUB-PROPOSAL 4(b). THE APPROVAL OF THE CHANGE OF RYDEX VARIABLE
TRUST'S URSA FUND INVESTMENT OBJECTIVE FROM A
FUNDAMENTAL TO A NON-FUNDAMENTAL POLICY.

The current investment objective of the Ursa Fund is to seek to provide
investment results that will inversely correlate to the performance of
the S&P 500 Index. This investment objective and the benchmark are
fundamental policies of the Fund. The Board and the Advisor believe
that the Advisor's ability to manage Fund assets in a changing
investment environment will be enhanced because the Fund will have
greater investment management flexibility to respond to market,
industry, regulatory or

14
<Page>

technical changes by seeking Board approval only when necessary to
revise its investment objective or benchmark, without the costs and
delays associated with holding a special shareholders' meeting to do
so. If approved by Shareholders, the Fund's investment objective and
benchmark will be non-fundamental policies.

THE TRUSTEES UNANIMOUSLY RECOMMEND THAT FUND SHAREHOLDERS VOTE "FOR"
SUB-PROPOSAL 4(b).

SUB-PROPOSAL 4(c). THE APPROVAL OF THE CHANGE OF RYDEX VARIABLE
TRUST'S OTC FUND INVESTMENT OBJECTIVE FROM A
FUNDAMENTAL TO A NON-FUNDAMENTAL POLICY.

The current investment objective of the OTC Fund is to seek to provide
investment results that correspond to a benchmark for over-the-counter
securities. The Fund's current benchmark is the Nasdaq 100 Index. This
investment objective is a fundamental policy of the Fund. The Board and
the Advisor believe that the Advisor's ability to manage Fund assets in
a changing investment environment will be enhanced because the Fund
will have greater investment management flexibility to respond to
market, industry, regulatory or technical changes by seeking Board
approval only when necessary to revise its investment objective or
benchmark, without the costs and delays associated with holding a
special shareholders' meeting to do so. If approved by Shareholders,
the Fund's investment objective will be a non-fundamental policy.

THE TRUSTEES UNANIMOUSLY RECOMMEND THAT FUND SHAREHOLDERS VOTE "FOR"
SUB-PROPOSAL 4(c).

SUB-PROPOSAL 4(d). THE APPROVAL OF THE CHANGE OF RYDEX VARIABLE
TRUST'S U.S. GOVERNMENT BOND FUND INVESTMENT
OBJECTIVE FROM A FUNDAMENTAL TO A NON-FUNDAMENTAL
POLICY.

The current investment objective of the U.S. Government Bond Fund is to
seek to provide investment results that correspond to a benchmark for
U.S. Government securities. The Fund's current benchmark is 120% of the
price movement of the Long Treasury Bond. This investment objective is
a fundamental policy of the Fund. The Board and the Advisor believe
that the Advisor's ability to manage Fund assets in a changing
investment environment will be enhanced because the Fund will have
greater investment management flexibility to respond to market,
industry, regulatory or technical changes by seeking Board approval
only when necessary to revise its investment objective or benchmark,
without the costs and delays associated with holding a special
shareholders' meeting to do so. If approved by Shareholders, the Fund's
investment objective will be a non-fundamental policy.

THE TRUSTEES UNANIMOUSLY RECOMMEND THAT FUND SHAREHOLDERS VOTE "FOR"
SUB-PROPOSAL 4(d).

SUB-PROPOSAL 4(e). THE APPROVAL OF THE CHANGE OF RYDEX VARIABLE
TRUST'S JUNO FUND INVESTMENT OBJECTIVE FROM A
FUNDAMENTAL TO A NON-FUNDAMENTAL POLICY.

The current investment objective of the Juno Fund is to seek to provide
total returns that will inversely correlate to the price movements of a
benchmark for U.S. Treasury debt instruments or futures contract on a
debt instrument. The Fund's current benchmark is the inverse of the
daily price movement of the Long Treasury Bond. This investment
objective is a fundamental policy of the Fund. The Board and the
Advisor believe that the Advisor's ability to manage Fund assets in a
changing investment environment will be enhanced because the Fund will
have greater investment management flexibility to respond to market,
industry, regulatory or technical changes by seeking Board approval
only when necessary to revise its investment objective or benchmark,
without the costs and delays associated with holding a

15
<Page>

special shareholders' meeting to do so. If approved by Shareholders,
the Fund's investment objective and benchmark will be non-fundamental
policies.

THE TRUSTEES UNANIMOUSLY RECOMMEND THAT FUND SHAREHOLDERS VOTE "FOR"
SUB-PROPOSAL 4(e).

GENERAL INFORMATION ABOUT THE TRUST AND OTHER MATTERS

INFORMATION ABOUT TRUST OFFICERS AND SERVICE PROVIDERS

PRINCIPAL UNDERWRITER. Rydex Distributors, Inc., 9601 Blackwell Road, Suite 500,
Rockville, MD 20850, serves as distributor and principal underwriter to the
Trust.

ADMINISTRATOR. Rydex Fund Services, Inc., 9601 Blackwell Road, Suite 500,
Rockville, MD 20850, serves as administrator to the Trust.

TRUST OFFICERS. Set forth below are the names, ages, position with the Trust,
length of term of office, and the principal occupations for a minimum of the
last five years of each of the persons currently serving as officers of the
Trust. The business address of each officer is 9601 Blackwell Road, Suite 500,
Rockville, Maryland 20850. None of the officers receive compensation from the
Trust for their services.

<Table>
<Caption>
PRINCIPAL OCCUPATION(S)
NAME AND AGE POSITION LENGTH OF TIME SERVED DURING PAST 5 YEARS
- ------------------------------------------------------------------------------------------------------------------------

Carl G. President Rydex Variable Trust (2003 to Chief Executive Officer of Rydex Fund Services,
Verboncoeur present) Inc., PADCO Advisors, Inc., PADCO Advisors II, Inc.
(51) and Rydex Distributors, Inc. (2003 to present);
Executive Vice President of Rydex Fund Services,
Inc. (2000 to 2003); Vice President of Rydex Fund
Services, Inc. and Rydex Distributors, Inc., (1997
to 2003).

Nick Bonos Vice Rydex Variable Trust (2003 to Controller, Rydex Fund Services, Inc. (____ to
(__) President and present) present); [additional information to be provided]
Treasurer

Robert M. Vice Rydex Variable Trust (1998 to Executive Vice President of PADCO Advisors, Inc. and
Steele (45) President and present) PADCO Advisors II, Inc., (2000 to present); Vice
Secretary President of Rydex Distributors, Inc. (1996 to
present); Vice President of The Boston Company,
Inc., an institutional money management firm (1987
to 1994).

Michael P. Vice President Rydex Variable Trust (1998 to Chief Operating Officer and Chief Investment Officer
Byrum (33) present) of PADCO Advisors, Inc. and PADCO Advisors II, Inc.
(2003 to present); Executive Vice President and
Senior Portfolio Manager of PADCO Advisors, Inc. and
PADCO Advisors II, Inc. (1993 to 2003); Secretary of
Rydex Distributors, Inc. (1996 to present).

Joanna M. Assistant Rydex Variable Trust (2000 to Vice President of Compliance of Rydex Fund Services,
Haigney (37) Secretary present) Inc. (2000 to present); Vice President Fund
Administration, Chase Global Funds Services Co., a
division of Chase Manhattan Bank N.A. (1994 to 1999).
</Table>

16
<Page>

INFORMATION ABOUT THE AUDIT COMMITTEE

AUDIT COMMITTEE RESPONSIBILITIES. The principal responsibilities of the Audit
Committee include: recommending which firm to engage as the Trust's
independent auditor and whether to terminate this relationship; reviewing the
independent auditors' compensation, the proposed scope and terms of its
engagement, and the firm's independence; serving as a channel of
communication between the independent auditor and the Trustees; reviewing the
results of each external audit, including any qualifications in the
independent auditors' opinion, any related` management letter, management's
responses to recommendations made by the independent auditors in connection
with the audit, reports submitted to the Audit Committee by the internal
auditing department of the Trust's service providers that are material to the
Trust as a whole, if any, and management's responses to any such reports;
reviewing the Trust's audited financial statements and considering any
significant disputes between the Trust's management and the independent
auditor that arose in connection with the preparation of those financial
statements; considering, in consultation with the independent auditors and
the Trust's senior internal accounting executive, if any, the independent
auditors' report on the adequacy of the Trust's internal financial controls;
reviewing, in consultation with the Trust's independent auditors, major
changes regarding auditing and accounting principles and practices to be
followed when preparing the Trust's financial statements; and other audit
related matters.

SELECTION OF INDEPENDENT AUDITORS. The Audit Committee and the Board selected
the firm of PricewaterhouseCoopers LLP ("PwC") as independent auditors of the
Trust for the current fiscal year. Representatives of PwC are not expected to be
present at the Meeting, but will have the opportunity to make a statement if
they wish, and will be available should any matter arise requiring their
presence.

AUDIT FEES. The aggregate fees paid to PwC for professional services rendered by
PwC for the audit of the Trust's annual financial statements or for services
that are normally provided by PwC in connection with statutory and regulatory
filings or engagements were $[__________] and $[__________] for the Trust's
fiscal years ended December 31, 2003 and 2002, respectively.

AUDIT-RELATED FEES. The aggregate fees paid to PwC for assurance and related
services by PwC that are reasonably related to the performance of the audit or
review of Trust financial statements and are not reported under "Audit Fees"
above were $[__________] and $[__________] for the Trust's fiscal years ended
December 31, 2003 and 2002, respectively. The services for which these fees were
paid included [the review of semi-annual reports to shareholders, internal
control testing and evaluation and services in connection with
___________________]. In addition, the Audit Committee pre-approves PwC's
engagement for audit-related services with the Advisor and certain entities
controlled by, or under common control with the Advisor that provide ongoing
services to the Trust, which engagements relate directly to the operations and
financial reporting of the Funds. The fees for these services were $[__________]
and $[__________] for the fiscal years ended December 31, 2003 and 2002,
respectively.

TAX FEES. [PwC did not render any tax compliance, tax advice or tax planning
services to the Trust for the two most recently completed fiscal years. PwC did
not render any such tax services to the Advisor and certain entities controlled
by, or under common control with the Advisor that provide ongoing services to
the Trust, which engagements relate directly to the operations and financial
reporting of the Funds for the two most recently completed fiscal years.]

ALL OTHER FEES. [PwC did not bill for other products and services, other than
the services reported above, for the two most recently completed fiscal years.
PwC did not render other services to the Advisor and certain entities controlled
by, or under common control with the Advisor that provide ongoing services to
the Trust, which engagements relate directly to the operations and financial
reporting of the Funds for the two most recently completed fiscal years.]

17
<Page>

AUDIT COMMITTEE PRE-APPROVAL POLICIES AND PROCEDURES. As of the date of this
proxy statement, the Audit Committee has not adopted pre-approval policies and
procedures. As a result, all services provided by PwC must be directly
pre-approved by the Audit Committee.

AGGREGATE NON-AUDIT FEES. [The aggregate non-audit fees paid to PwC for
professional services rendered by PwC to the Trust were $[__________] and
$[__________] for the fiscal years ended December 31, 2003 and 2002,
respectively.

SHAREHOLDERS SHARING THE SAME ADDRESS.

If two or more Shareholders share the same address, only one copy of this proxy
statement is being delivered to that address, unless the Trust has received
contrary instructions from one or more of the Shareholders at that shared
address. Upon written or oral request, the Trust will deliver promptly a
separate copy of this proxy statement to a shareholder at a shared address.
Please call 1-800-820-0888 or forward a written request to the Trust at 9601
Blackwell Road, Suite 500, Rockville, MD 20850 if you would like to (1) receive
a separate copy of this proxy statement; (2) receive your annual reports or
proxy statements separately in the future; or (3) request delivery of a single
copy of annual reports or proxy statements if you are currently receiving
multiple copies at a shared address.

BENEFICIAL OWNERSHIP INFORMATION

As of March 2, 2004, the following persons were the only persons who were record
owners or, to the knowledge of the Trust, were beneficial owners of 5% or more
of the shares of a Fund.

<Table>
<Caption>
NAME AND ADDRESS NUMBER OF PERCENTAGE OF
FUND OF BENEFICIAL OWNER SHARES FUND SHARES
- ------------------------------------------------------------------------------------------------------------

[to be completed]
</Table>

SHAREHOLDER PROPOSALS

The Trust is not required to hold annual shareholder meetings. Shareholders
wishing to submit proposals for inclusion or presentation in a proxy statement
for a subsequent meeting should send their written proposals to the Secretary of
the Trust c/o Rydex Investments, 9601 Blackwell Road, Suite 500, Rockville, MD
20850.

OTHER MATTERS

The Trustees know of no other business to be brought before the Meeting.
However, if any other matters properly come before the Meeting, it is their
intention that proxies which do not contain specific restrictions to the
contrary will be voted on such matters in accordance with the judgment of the
persons named in the enclosed proxy.

ANNUAL AND SEMI-ANNUAL REPORTS TO SHAREHOLDERS

For a free copy of the Trust's most recent annual report (and most recent
semi-annual report succeeding the annual report, if any), Shareholders may call
1-800-820-0888 or write to the Funds at 9601 Blackwell Road, Suite 500,
Rockville, MD 20850.

OTHER BUSINESS

18
<Page>

The Board does not intend to present any other business at the Meeting. If any
other matter may properly come before the Meeting, or any adjournment thereof,
the persons named in the accompanying proxy card(s) intend to vote, act, or
consent thereunder in accordance with their best judgment at that time on such
matters. No annual or other special meeting is currently scheduled for the
Trust. Mere submission of a shareholder proposal does not guarantee the
inclusion of the proposal in the proxy statement or presentation of the proposal
at the Meeting because inclusion and presentation are subject to compliance with
certain federal regulations.

PROMPT EXECUTION AND RETURN OF THE ENCLOSED PROXY CARD IS REQUESTED. A
SELF-ADDRESSED, POSTAGE-PAID ENVELOPE IS ENCLOSED FOR YOUR CONVENIENCE, ALONG
WITH INSTRUCTIONS ON HOW TO VOTE OVER THE INTERNET OR BY TELEPHONE SHOULD YOU
PREFER TO VOTE BY ONE OF THOSE METHODS.

19
<Page>

RYDEX VARIABLE TRUST

[NAME OF FUNDS]

SPECIAL MEETING OF THE SHAREHOLDERS

PROXY SOLICITED BY THE BOARD OF TRUSTEES FOR
THE SPECIAL MEETING OF SHAREHOLDERS, TO BE HELD ON

APRIL 30, 2004

The undersigned hereby appoints Joanna Haigney, Nick Bonos and Mike Byrum,
and each of them individually, with power to act without the other and with
the right of substitution in each, the proxies of the undersigned to vote all
shares of the above-referenced Funds (the "Funds") held by the undersigned on
March 2, 2004, at the Meeting, to be held at the offices of Rydex
Investments, 9601 Blackwell Road, Suite 500, Rockville, MD 20850 at 4:30 p.m.
Eastern Time and at any adjournment(s) or postponement(s) thereof, with all
powers the undersigned would possess if present in person. All previous
proxies given with respect to the Meeting are revoked. The undersigned
acknowledges receipt of the Notice of Special Meeting and Proxy Statement
dated __________, 2004.

Please refer to the Proxy Statement for a discussion of each of these
matters. IF NO SPECIFICATION IS MADE, THE PROXY SHALL BE VOTED FOR THE
PROPOSALS. As to any other matter, the Proxies shall vote in accordance with
their best judgment. THE BOARD OF TRUSTEES RECOMMENDS A VOTE FOR EACH OF THE
FOLLOWING PROPOSALS:

1. Consider and vote on the following as Trustees of the Trust:
(1) Corey A. Colehour; (2) J. Kenneth Dalton; (3) John O. Demaret;
(4) Roger Somers; and (5) Carl G. Verboncoeur:

____FOR ALL NOMINEES LISTED (EXCEPT AS MARKED TO THE CONTRARY BELOW)

____WITHHOLD AUTHORITY TO VOTE FOR ALL NOMINEES

WITHHOLD AUTHORITY TO VOTE FOR THE FOLLOWING NOMINEES:
_____________________________________________

2. Approve a new investment advisory agreement between Rydex Variable Trust
and PADCO Advisors II, Inc. (All Funds):

____FOR ____AGAINST ____ABSTAIN

20
<Page>

3. Approve a new investment sub-advisory agreement between PADCO Advisors
II, Inc. and Clarke Lanzen Skalla Investment Firm, LLC (CLS AdvisorOne
Amerigo VT Fund CLS AdvisorOne Clermont VT Fund Dynamic Funds Only):

____FOR ____AGAINST ____ABSTAIN

4. Approve the change of investment objective from a fundamental to a
non-fundamental policy for each of the following Funds:

4(A) RYDEX NOVA FUND ____FOR ____AGAINST ____ABSTAIN

4(B) RYDEX URSA FUND ____FOR ____AGAINST ____ABSTAIN

4(C) RYDEX OTC FUND ____FOR ____AGAINST ____ABSTAIN

4(D) RYDEX U.S. GOVERNMENT
BOND FUND ____FOR ____AGAINST ____ABSTAIN

4(E) RYDEX JUNO FUND ____FOR ____AGAINST ____ABSTAIN

5. Any other business properly brought before the Meeting:

____FOR ____AGAINST ____ABSTAIN

THIS PROXY WILL, WHEN PROPERLY EXECUTED, BE VOTED AS DIRECTED HEREIN BY THE
SIGNING SHAREHOLDER. IF NO DIRECTION IS GIVEN WHEN THE DULY EXECUTED PROXY
IS RETURNED, THIS PROXY WILL BE VOTED FOR THE FOREGOING PROPOSALS AND WILL BE
VOTED IN THE APPOINTED PROXIES' DISCRETION UPON SUCH OTHER BUSINESS AS MAY
PROPERLY COME BEFORE THE MEETING.

The undersigned acknowledges receipt with this proxy of a copy of the Notice
of Special Meeting and the proxy statement. Your signature(s) on this proxy
should be exactly as your name(s) appear on this proxy. If the shares are
held jointly, each holder should sign this proxy. Attorneys-in-fact,
executors, administrators, trustees or guardians should indicate the full
title and capacity in which they are signing.

Dated:_________________ , 2004
________________________________
Signature of Shareholder

________________________________
Signature (Joint owners)

21
<Page>

EXHIBIT A

ADVISORY AGREEMENT

ADVISORY AGREEMENT made as of this ____th day of ____________, 2004 by and
between RYDEX VARIABLE TRUST (the "Trust"), a Delaware statutory trust
registered as an investment company under the Investment Company Act of 1940, as
amended (the "1940 Act"), and PADCO ADVISORS II, INC., a Maryland corporation
with its principal place of business at 9601 Blackwell Road, Suite 500,
Rockville, Maryland 20850 (the "Adviser").

W I T N E S S E T H

WHEREAS, the Board of Trustees (the "Board") of the Trust has selected the
Adviser to act as investment adviser to the Trust on behalf of the series set
forth on Schedule A to this Agreement (each a "Fund" and, collectively, the
"Funds"), as such Schedule may be amended from time to time upon mutual
agreement of the parties, and to provide certain related services, as more fully
set forth below, and to perform such services under the terms and conditions
hereinafter set forth;

NOW, THEREFORE, in consideration of the mutual covenants and benefits set forth
herein, the Trust and the Adviser do hereby agree as follows:

1. THE ADVISER'S SERVICES.

(a) DISCRETIONARY INVESTMENT MANAGEMENT SERVICES. The Adviser
shall act as investment adviser with respect to the Funds. In such
capacity, the Adviser shall, subject to the supervision of the Board,
regularly provide the Funds with investment research, advice and
supervision and shall furnish continuously an investment program for
the Funds, consistent with the respective investment objectives and
policies of each Fund. The Adviser shall determine, from time to time,
what securities shall be purchased for the Funds, what securities shall
be held or sold by the Funds and what portion of the Funds' assets
shall be held uninvested in cash, subject always to the provisions of
the Trust's Agreement and Declaration of Trust, By-Laws and its
registration statement on Form N-1A (the "Registration Statement")
under the 1940 Act, and under the Securities Act of 1933, as amended
(the "1933 Act"), covering Fund shares, as filed with the Securities
and Exchange Commission (the "Commission"), and to the investment
objectives, policies and restrictions of the Funds, as each of the same
shall be from time to time in effect. To carry out such obligations,
the Adviser shall exercise full discretion and act for the Funds in the
same manner and with the same force and effect as the Funds themselves
might or could do with respect to purchases, sales or other
transactions, as well as with respect to all other such things
necessary or incidental to the furtherance or conduct of such
purchases, sales or other transactions. No reference in this Agreement
to the Adviser having full discretionary authority over each Fund's
investments shall in any way limit the right of the Board, in its sole
discretion, to establish or revise policies in connection with the
management of a Fund's assets or to otherwise exercise its right to
control the overall management of a Fund.

(b) COMPLIANCE. The Adviser agrees to comply with the
requirements of the 1940 Act, the Investment Advisers Act of 1940 (the
"Advisers Act"), the 1933 Act, the Securities Exchange Act of 1934, as
amended (the "1934 Act"), the Commodity Exchange Act and the respective
rules and regulations thereunder, as applicable, as well as with all
other applicable federal and state laws, rules, regulations and case
law that relate to the services and relationships described hereunder
and to the conduct of its business as a registered investment adviser.
The

A-1
<Page>

Adviser also agrees to comply with the objectives, policies and
restrictions set forth in the Registration Statement, as amended or
supplemented, of the Funds, and with any policies, guidelines,
instructions and procedures approved by the Board and provided to the
Adviser. In selecting each Fund's portfolio securities and performing
the Adviser's obligations hereunder, the Adviser shall cause the Fund
to comply with the diversification and source of income requirements of
Subchapter M and Section 817(h) of the Internal Revenue Code of 1986,
as amended (the "Code"), for qualification as a regulated investment
company. The Adviser shall maintain compliance procedures that it
reasonably believes are adequate to ensure the its compliance with the
foregoing. No supervisory activity undertaken by the Board shall limit
the Adviser's full responsibility for any of the foregoing.

(c) PROXY VOTING. The Board has the authority to determine how
proxies with respect to securities that are held by the Funds shall be
voted, and the Board has initially determined to delegate the authority
and responsibility to vote proxies for the Fund's securities to the
Adviser. So long as proxy voting authority for the Fund has been
delegated to the Adviser, the Adviser shall exercise its proxy voting
responsibilities Adviser shall carry out such responsibility in
accordance with any instructions that the Board shall provide from time
to time, and at all times in a manner consistent with Rule 206(4)-6
under the Advisers Act and its fiduciary responsibilities to the Trust.
The Adviser shall provide periodic reports and keep records relating to
proxy voting as the Board may reasonably request or as may be necessary
for the Funds to comply with the 1940 Act and other applicable law. Any
such delegation of proxy voting responsibility to the Adviser may be
revoked or modified by the Board at any time.

(d) RECORDKEEPING. The Adviser shall not be responsible for
the provision of administrative, bookkeeping or accounting services to
the Fund, except as otherwise provided herein or as may be necessary
for the Adviser to supply to the Trust or its Board the information
required to be supplied under this Agreement.

The Adviser shall maintain separate books and detailed records
of all matters pertaining to Fund assets advised by the Adviser
required by Rule 31a-1 under the 1940 Act (other than those records
being maintained by any administrator, custodian or transfer agent
appointed by the Funds) relating to its responsibilities provided
hereunder with respect to the Funds, and shall preserve such records
for the periods and in a manner prescribed therefore by Rule 31a-2
under the 1940 Act (the "Fund Books and Records"). The Fund Books and
Records shall be available to the Board at any time upon request, shall
be delivered to the Trust upon the termination of this Agreement and
shall be available without delay during any day the Trust is open for
business.

(e) HOLDINGS INFORMATION AND PRICING. The Adviser shall
provide regular reports regarding Fund holdings, and shall, on its own
initiative, furnish the Trust and its Board from time to time with
whatever information the Adviser believes is appropriate for this
purpose. The Adviser agrees to immediately notify the Trust if the
Adviser reasonably believes that the value of any security held by a
Fund may not reflect fair value. The Adviser agrees to provide any
pricing information of which the Adviser is aware to the Trust, its
Board and/or any Fund pricing agent to assist in the determination of
the fair value of any Fund holdings for which market quotations are not
readily available or as otherwise required in accordance with the 1940
Act or the Trust's valuation procedures for the purpose of calculating
the Fund net asset value in accordance with procedures and methods
established by the Board.

A-2
<Page>

(f) COOPERATION WITH AGENTS OF THE TRUST. The Adviser agrees
to cooperate with and provide reasonable assistance to the Trust, any
Trust custodian or foreign sub-custodians, any Trust pricing agents and
all other agents and representatives of the Trust, such information
with respect to the Funds as they may reasonably request from time to
time in the performance of their obligations, provide prompt responses
to reasonable requests made by such persons and establish appropriate
interfaces with each so as to promote the efficient exchange of
information and compliance with applicable laws and regulations.

2. CODE OF ETHICS. The Adviser has adopted a written code of ethics
that it reasonably believes complies with the requirements of Rule 17j-1 under
the 1940 Act, which it will provide to the Trust. The Adviser shall ensure that
its Access Persons (as defined in the Adviser's Code of Ethics) comply in all
material respects with the Adviser's Code of Ethics, as in effect from time to
time. Upon request, the Adviser shall provide the Trust with a (i) a copy of the
Adviser's current Code of Ethics, as in effect from time to time, and (ii)
certification that it has adopted procedures reasonably necessary to prevent
Access Persons from engaging in any conduct prohibited by the Adviser's Code of
Ethics. Annually, the Adviser shall furnish a written report, which complies
with the requirements of Rule 17j-1, concerning the Adviser's Code of Ethics to
the Trust. The Adviser shall respond to requests for information from the Trust
as to violations of the Code by Access Persons and the sanctions imposed by the
Adviser. The Adviser shall immediately notify the Trust of any material
violation of the Code, whether or not such violation relates to an security held
by any Fund.

3. INFORMATION AND REPORTING. The Adviser shall provide the Trust and
its respective officers with such periodic reports concerning the obligations
the Adviser has assumed under this Agreement as the Trust may from time to time
reasonably request.

(a) NOTIFICATION OF BREACH / COMPLIANCE REPORTS. The Adviser
shall notify the Trust immediately upon detection of (i) any material
failure to manage any Fund in accordance with its investment objectives
and policies or any applicable law; or (ii) any material breach of any
of the Funds' or the Adviser's policies, guidelines or procedures. In
addition, the Adviser shall provide a quarterly report regarding each
Fund's compliance with its investment objectives and policies,
applicable law, including, but not limited to the 1940 Act and
Subchapter M and Section 817(h) of the Code, and the Fund's policies,
guidelines or procedures as applicable to the Adviser's obligations
under this Agreement. The Adviser agrees to correct any such failure
promptly and to take any action that the Board may reasonably request
in connection with any such breach. Upon request, the Adviser shall
also provide the officers of the Trust with supporting certifications
in connection with such certifications of Fund financial statements and
disclosure controls pursuant to the Sarbanes-Oxley Act. The Adviser
will promptly notify the Trust in the event (i) the Adviser is served
or otherwise receives notice of any action, suit, proceeding, inquiry
or investigation, at law or in equity, before or by any court, public
board, or body, involving the affairs of the Trust (excluding class
action suits in which a Fund is a member of the plaintiff class by
reason of the Fund's ownership of shares in the defendant) or the
compliance by the Adviser with the federal or state securities laws or
(ii) an actual change in control of the Adviser resulting in an
"assignment" (as defined in the 1940 Act) has occurred or is otherwise
proposed to occur.

(b) BOARD AND FILINGS INFORMATION. The Adviser will also
provide the Trust with any information reasonably requested regarding
its management of the Funds required for any meeting of the Board, or
for any shareholder report, amended registration statement, proxy
statement, or prospectus supplement to be filed by the Trust with the
Commission. The Adviser

A-3
<Page>

will make its officers and employees available to meet with the Board
from time to time on due notice to review its investment management
services to the Funds in light of current and prospective economic and
market conditions and shall furnish to the Board such information as
may reasonably be necessary in order for the Board to evaluate this
Agreement or any proposed amendments thereto.

(c) TRANSACTION INFORMATION. The Adviser shall furnish to the
Trust such information concerning portfolio transactions as may be
necessary to enable the Trust or its designated agent to perform such
compliance testing on the Funds and the Adviser's services as the Trust
may, in its sole discretion, determine to be appropriate. The provision
of such information by the Adviser to the Trust or its designated agent
in no way relieves the Adviser of its own responsibilities under this
Agreement.

4. BROKERAGE.

(a) PRINCIPAL TRANSACTIONS. In connection with purchases or
sales of securities for the account of a Fund, neither the Adviser nor
any of its directors, officers or employees will act as a principal or
agent or receive any commission except as permitted by the 1940 Act.

(b) PLACEMENT OF ORDERS. The Adviser shall arrange for the
placing of all orders for the purchase and sale of securities for a
Fund's account with brokers or dealers selected by the Adviser. In the
selection of such brokers or dealers and the placing of such orders,
the Adviser is directed at all times to seek for the Fund the most
favorable execution and net price available under the circumstances. It
is also understood that it is desirable for the Fund that the Adviser
have access to brokerage and research services provided by brokers who
may execute brokerage transactions at a higher cost to the Fund than
may result when allocating brokerage to other brokers, consistent with
section 28(e) of the 1934 Act and any Commission staff interpretations
thereof. Therefore, the Adviser is authorized to place orders for the
purchase and sale of securities for a Fund with such brokers, subject
to review by the Board from time to time with respect to the extent and
continuation of this practice. It is understood that the services
provided by such brokers may be useful to the Adviser in connection
with its or its affiliates' services to other clients.

(c) AGGREGATED TRANSACTIONS. On occasions when the Adviser
deems the purchase or sale of a security to be in the best interest of
a Fund as well as other clients of the Adviser, the Adviser may, to the
extent permitted by applicable law and regulations, aggregate the order
for securities to be sold or purchased. In such event, the Adviser will
allocate securities or futures contracts so purchased or sold, as well
as the expenses incurred in the transaction, in the manner the Adviser
reasonably considers to be equitable and consistent with its fiduciary
obligations to the Fund and to such other clients under the
circumstances.

(d) AFFILIATED BROKERS. The Adviser or any of its affiliates
may act as broker in connection with the purchase or sale of securities
or other investments for a Fund, subject to: (a) the requirement that
the Adviser seek to obtain best execution and price within the policy
guidelines determined by the Board and set forth in the Fund's current
prospectus and SAI; (b) the provisions of the 1940 Act; (c) the
provisions of the Advisers Act; (d) the provisions of the 1934 Act; and
(e) other provisions of applicable law. These brokerage services are
not within the scope of the duties of the Adviser under this Agreement.
Subject to the requirements of

A-4
<Page>

applicable law and any procedures adopted by the Board, the Adviser or
its affiliates may receive brokerage commissions, fees or other
remuneration from a Fund for these services in addition to the
Adviser's fees for services under this Agreement.

5. CUSTODY. Nothing in this Agreement shall permit the Adviser to
take or receive physical possession of cash, securities or other investments of
a Fund.

6. ALLOCATION OF CHARGES AND EXPENSES. The Adviser will bear its own
costs of providing services hereunder. Other than as herein specifically
indicated, the Adviser shall not be responsible for a Fund's expenses, including
brokerage and other expenses incurred in placing orders for the purchase and
sale of securities and other investment instruments.

7. REPRESENTATIONS, WARRANTIES AND COVENANTS.

(a) PROPERLY REGISTERED. The Adviser is registered as an
investment adviser under the Advisers Act, and will remain so
registered for the duration of this Agreement. The Adviser is not
prohibited by the Advisers Act or the 1940 Act from performing the
services contemplated by this Agreement, and to the best knowledge of
the Adviser, there is no proceeding or investigation that is reasonably
likely to result in the Adviser being prohibited from performing the
services contemplated by this Agreement. The Adviser agrees to promptly
notify the Trust of the occurrence of any event that would disqualify
the Adviser from serving as an investment adviser to an investment
company. The Adviser is in compliance in all material respects with all
applicable federal and state law in connection with its investment
management operations.

(b) ADV DISCLOSURE. The Adviser has provided the Trust with a
copy of its Form ADV as most recently filed with the SEC and will,
promptly after filing any amendment to its Form ADV with the SEC,
furnish a copy of such amendments to the Trust. The information
contained in the Adviser's Form ADV is accurate and complete in all
material respects and does not omit to state any material fact
necessary in order to make the statements made, in light of the
circumstances under which they were made, not misleading.

(c) FUND DISCLOSURE DOCUMENTS. The Adviser has reviewed and
will in the future review, the Registration Statement, and any
amendments or supplements thereto, the annual or semi-annual reports to
shareholders, other reports filed with the Commission and any marketing
material of a Fund (collectively the "Disclosure Documents") and
represents and warrants that with respect to disclosure about the
Adviser, the manner in which the Adviser manages the Fund or
information relating directly or indirectly to the Adviser, such
Disclosure Documents contain or will contain, as of the date thereof,
no untrue statement of any material fact and does not omit any
statement of material fact which was required to be stated therein or
necessary to make the statements contained therein not misleading.

(d) USE OF THE NAME "RYDEX". The Adviser has the right to use
the name "Rydex" in connection with its services to the Trust and that,
subject to the terms set forth in Section 8 of this Agreement, the
Trust shall have the right to use the name "Rydex" in connection with
the management and operation of the Funds. The Adviser is not aware of
any threatened or existing actions, claims, litigation or proceedings
that would adversely effect or prejudice the rights of the Adviser or
the Trust to use the name "Rydex".

A-5
<Page>

(e) INSURANCE. The Adviser maintains errors and omissions
insurance coverage in an appropriate amount and shall provide prior
written notice to the Trust (i) of any material changes in its
insurance policies or insurance coverage; or (ii) if any material
claims will be made on its insurance policies. Furthermore, the Adviser
shall upon reasonable request provide the Trust with any information it
may reasonably require concerning the amount of or scope of such
insurance.

(f) NO DETRIMENTAL AGREEMENT. The Adviser represents and
warrants that it has no arrangement or understanding with any party,
other than the Trust, that would influence the decision of the Adviser
with respect to its selection of securities for a Fund, and that all
selections shall be done in accordance with what is in the best
interest of the Fund.

(g) CONFLICTS. The Adviser shall act honestly, in good faith
and in the best interests of the Trust including requiring any of its
personnel with knowledge of Fund activities to place the interest of
the Fund first, ahead of their own interests, in all personal trading
scenarios that may involve a conflict of interest with the Funds,
consistent with its fiduciary duties under applicable law.

(h) REPRESENTATIONS. The representations and warranties in
this Section 7 shall be deemed to be made on the date this Agreement is
executed and at the time of delivery of the quarterly compliance report
required by Section 3(a), whether or not specifically referenced in
such report.

8. THE NAME "RYDEX". The Adviser grants to the Trust a sublicense to
use the name "Rydex" (the "Name") as part of the name of any Fund. The foregoing
authorization by the Adviser to the Trust to use the Name as part of the name of
any Fund is not exclusive of the right of the Adviser itself to use, or to
authorize others to use, the Name; the Trust acknowledges and agrees that, as
between the Trust and the Adviser, the Adviser has the right to use, or
authorize others to use, the Name. The Trust shall (1) only use the Name in a
manner consistent with uses approved by the Adviser; (2) use its best efforts to
maintain the quality of the services offered using the Name; (3) adhere to such
other specific quality control standards as the Adviser may from time to time
promulgate. At the request of the Adviser, the Trust will (a) submit to Adviser
representative samples of any promotional materials using the Name; and (b)
change the name of any Fund within three months of its receipt of the Adviser's
request, or such other shorter time period as may be required under the terms of
a settlement agreement or court order, so as to eliminate all reference to the
Name and will not thereafter transact any business using the Name in the name of
any Fund; provided, however, that the Trust may continue to use beyond such date
any supplies of prospectuses, marketing materials and similar documents that the
Trust had on had at the date of such name change in quantities not exceeding
those historically produced and used in connection with such Fund.

9. ADVISER'S COMPENSATION. The Funds shall pay to the Adviser, as
compensation for the Adviser's services hereunder, a fee, determined as
described in Schedule A that is attached hereto and made a part hereof. Such fee
shall be computed daily and paid not less than monthly in arrears by the Funds.

The method for determining net assets of a Fund for purposes hereof
shall be the same as the method for determining net assets for purposes of
establishing the offering and redemption prices of Fund shares as described in
the Fund's prospectus. In the event of termination of this Agreement, the fee
provided in this Section shall be computed on the basis of the period ending on
the last business day on

A-6
<Page>

which this Agreement is in effect subject to a pro rata adjustment based on the
number of days elapsed in the current month as a percentage of the total number
of days in such month.

10. INDEPENDENT CONTRACTOR. In the performance of its duties
hereunder, the Adviser is and shall be an independent contractor and, unless
otherwise expressly provided herein or otherwise authorized in writing, shall
have no authority to act for or represent the Trust or any Fund in any way or
otherwise be deemed to be an agent of the Trust or any Fund. If any occasion
should arise in which the Adviser gives any advice to its clients concerning the
shares of a Fund, the Adviser will act solely as investment counsel for such
clients and not in any way on behalf of the Fund.

11. ASSIGNMENT AND AMENDMENTS. This Agreement shall automatically
terminate, without the payment of any penalty, in the event of its assignment
(as defined in section 2(a)(4) of the 1940 Act); provided that such termination
shall not relieve the Adviser of any liability incurred hereunder.

This Agreement may not be added to or changed orally and may not be
modified or rescinded except by a writing signed by the parties hereto and in
accordance with the 1940 Act, when applicable.

12. DURATION AND TERMINATION.

(a) This Agreement shall become effective as of the date
executed and shall remain in full force and effect continually
thereafter, subject to renewal as provided in Section 12(d) and unless
terminated automatically as set forth in Section 11 hereof or until
terminated as follows:

(b) The Trust may cause this Agreement to terminate either (i)
by vote of its Board or (ii) with respect to any Fund, upon the
affirmative vote of a majority of the outstanding voting securities of
the Fund; or

(c) The Adviser may at any time terminate this Agreement by
not more than sixty (60) days' nor less than thirty (30) days' written
notice delivered or mailed by registered mail, postage prepaid, to the
Trust; or

(d) This Agreement shall automatically terminate two years from
the date of its execution unless its renewal is specifically approved at least
annually thereafter by (i) a majority vote of the Trustees, including a majority
vote of such Trustees who are not interested persons of the Trust or the
Adviser, at a meeting called for the purpose of voting on such approval; or (ii)
the vote of a majority of the outstanding voting securities of each Fund;
provided, however, that if the continuance of this Agreement is submitted to the
shareholders of the Funds for their approval and such shareholders fail to
approve such continuance of this Agreement as provided herein, the Adviser may
continue to serve hereunder as to the Funds in a manner consistent with the 1940
Act and the rules and regulations thereunder; and

Termination of this Agreement pursuant to this Section shall be without
payment of any penalty.

In the event of termination of this Agreement for any reason, the
Adviser shall, immediately upon notice of termination or on such later date as
may be specified in such notice, cease all activity on behalf of the Fund and
with respect to any of its assets, except as otherwise required by any fiduciary
duties of the Adviser under applicable law. In addition, the Adviser shall
deliver the Fund Books and Records to the Trust by such means and in accordance
with such schedule as the Trust shall direct and shall

A-7
<Page>

otherwise cooperate, as reasonably directed by the Trust, in the transition of
portfolio asset management to any successor of the Adviser.

13. CERTAIN DEFINITIONS. For the purposes of this Agreement:

(a) "Affirmative vote of a majority of the outstanding voting
securities of the Fund" shall have the meaning as set forth in the 1940
Act, subject, however, to such exemptions as may be granted by the
Commission under the 1940 Act or any interpretations of the Commission
staff.

(b) "Interested persons" and "Assignment" shall have their
respective meanings as set forth in the 1940 Act, subject, however, to
such exemptions as may be granted by the Commission under the 1940 Act
or any interpretations of the Commission staff.

14. LIABILITY OF THE ADVISER. The Adviser shall indemnify and hold
harmless the Trust and all affiliated persons thereof (within the meaning of
Section 2(a)(3) of the 1940 Act) and all controlling persons (as described in
Section 15 of the 1933 Act) (collectively, the "Adviser Indemnitees") against
any and all losses, claims, damages, liabilities or litigation (including
reasonable legal and other expenses) by reason of or arising out of: (a) the
Adviser being in material violation of any applicable federal or state law, rule
or regulation or any investment policy or restriction set forth in the Funds'
Registration Statement or any written guidelines or instruction provided in
writing by the Board, (b) a Fund's failure to satisfy the diversification or
source of income requirements of Subchapter M of the Code, or (c) the Adviser's
willful misfeasance, bad faith or gross negligence generally in the performance
of its duties hereunder or its reckless disregard of its obligations and duties
under this Agreement.

15. ENFORCEABILITY. Any term or provision of this Agreement which is
invalid or unenforceable in any jurisdiction shall, as to such jurisdiction be
ineffective to the extent of such invalidity or unenforceability without
rendering invalid or unenforceable the remaining terms or provisions of this
Agreement or affecting the validity or enforceability of any of the terms or
provisions of this Agreement in any other jurisdiction.

16. LIMITATION OF LIABILITY. The parties to this Agreement acknowledge
and agree that all litigation arising hereunder, whether direct or indirect, and
of any and every nature whatsoever shall be satisfied solely out of the assets
of the affected Fund and that no Trustee, officer or holder of shares of
beneficial interest of the Fund shall be personally liable for any of the
foregoing liabilities. The Trust's Certificate of Trust, as amended from time to
time, is on file in the Office of the Secretary of State of the State of
Delaware. Such Certificate of Trust and the Trust's Agreement and Declaration of
Trust describe in detail the respective responsibilities and limitations on
liability of the Trustees, officers, and holders of shares of beneficial
interest.

17. JURISDICTION. This Agreement shall be governed by and construed in
accordance with the substantive laws of state of Delaware and the Adviser
consents to the jurisdiction of courts, both state or federal, in Delaware, with
respect to any dispute under this Agreement.

18. PARAGRAPH HEADINGS. The headings of paragraphs contained in this
Agreement are provided for convenience only, form no part of this Agreement and
shall not affect its construction.

A-8
<Page>

19. COUNTERPARTS. This Agreement may be executed simultaneously in two
or more counterparts, each of which shall be deemed an original, but all of
which together shall constitute one and the same instrument.

IN WITNESS WHEREOF, the parties hereto have caused this instrument to be signed
on their behalf by their duly authorized officers as of the date first above
written.

RYDEX VARIABLE TRUST, on behalf of each Fund
listed on Schedule A

By:
---------------------------------------
Name: Carl G. Verboncoeur
Title: President

PADCO ADVISORS II, INC.

By:
---------------------------------------
Name: Carl G. Verboncoeur
Title: Chief Executive Officer

A-9
<Page>

SCHEDULE A
TO THE
ADVISORY AGREEMENT
DATED ___________ __, 2004 BETWEEN
RYDEX VARIABLE TRUST
AND
PADCO ADVISORS II, INC.

The Fund will pay to the Adviser as compensation for the Adviser's services
rendered, a fee, computed daily at an annual rate based on the average daily net
assets of the respective Fund in accordance the following fee schedule:

<Table>
<Caption>
FUND RATE
- ---- ----

Nova 0.75%
Ursa 0.90%
OTC 0.75%
Arktos 0.90%
Medius 0.90%
Mekros 0.90%
Titan 500 0.90%
Tempest 500 0.90%
Velocity 100 0.90%
Venture 100 0.90%
U.S. Government Bond 0.50%
Juno 0.90%
Long Dynamic Dow 30 0.90%
Inverse Dynamic Dow 30 0.90%
Large-Cap Value 0.75%
Large-Cap Growth 0.75%
Mid-Cap Value 0.75%
Mid-Cap Growth 0.75%
Inverse Mid-Cap 0.90%
Small-Cap Value 0.75%
Small-Cap Growth 0.75%
Inverse Small-Cap 0.90%
Large-Cap Europe 0.90%
Large-Cap Japan 0.90%

U.S. Government Money Market 0.50%

Banking 0.85%
Basic Materials 0.85%
Biotechnology 0.85%
Consumer Products 0.85%
Electronics 0.85%
Energy 0.85%
Energy Services 0.85%
Financial Services 0.85%
Health Care 0.85%
Internet 0.85%
Leisure 0.85%
Precious Metals 0.75%
Real Estate 0.85%
Retailing 0.85%
Technology 0.85%
Telecommunications 0.85%
Transportation 0.85%
Utilities 0.85%

Sector Rotation 0.90%
Core Equity* 0.70%
CLS AdvisorOne Amerigo VT 0.90%
CLS AdvisorOne Clermont VT 0.90%
</Table>

A-i
<Page>

* The management fee with respect to the Core Equity Fund (the "Fund") is
comprised of a basic fee (the "Basic Fee") at the annual rate of 0.70% of the
Fund's average daily net assets and a performance adjustment (the "Performance
Adjustment") as discussed below.

A. CALCULATING THE PERFORMANCE ADJUSTMENT. The performance
adjustment shall be calculated monthly by:

(i) Determining the difference in performance (the "Performance
Difference") between the Fund and the Russell 3000 Index
(the "Index"), as described in paragraph C;

(ii) Using the Performance Difference calculated under paragraph
B(ii) to determine the performance adjustment ( the
"Performance Adjustment"), as illustrated in paragraph D;
and

(iii) Adding the Performance Adjustment to the Basic Fee to
determine the management fee for the applicable month.

B. COMPUTING THE PERFORMANCE DIFFERENCE. The Performance Difference
is calculated monthly, and is determined by measuring the percentage difference
between the performance of one Share of the Fund and the performance of the
Index over the most recent 12-month period. The performance of one Share of the
Fund shall be measured by computing the percentage difference, carried to five
decimal places, between the net asset value as of the last business day of the
period selected for comparison and the net asset value of such share as of the
last business day of the prior period, adjusted for dividends or capital gain
distributions treated as reinvested immediately. The performance of the Index
will be established by measuring the percentage difference, carried to five
decimal places, between the beginning and ending values of the Index for the
comparison period, with dividends or capital gain distributions on the
securities that comprise the Index being treated as reinvested immediately.

C. DETERMINING THE PERFORMANCE ADJUSTMENT. For every 0.0375% in
Performance Difference, the Adviser's fee will be adjusted upwards or downwards
by 0.01%. The maximum adjustment rate is 0.20% per year, resulting in a minimum
possible annual fee of 0.50% and a maximum possible annual fee of 0.90%.

D. PERFORMANCE ADJUSTMENT EXAMPLE. The following example illustrates
the application of the Performance Adjustment:

<Table>
<Caption>
FOR THE ROLLING 12-MONTH FUND'S INVESTMENT INDEX'S FUND'S PERFORMANCE
PERFORMANCE PERIOD PERFORMANCE CUMULATIVE CHANGE RELATIVE TO THE INDEX
------------------------- ----------------- ----------------- ---------------------

January 1 $ 50.00 100.00
December 31 $ 55.25 110.20
Absolute change + $ 5.25 + $ 10.20
Actual change + 10.50% + 10.20% +0.30%
</Table>

Based on these assumptions, the Fund calculates the Adviser's management fee
rate for the month-ended December 31 as follows:

- - The portion of the annual basic fee rate of 0.70% applicable to that
month is multiplied by the Fund's average daily net assets for the month.
This results in the dollar amount of the basic fee.

- - The +0.30% difference between the performance of the Fund and the record
of the Index is divided by 3.75, producing a rate of 0.08%.

- - The 0.08% rate (adjusted for the number of days in the month) is
multiplied by the Fund's average daily net assets for the performance
period. This results in the dollar amount of the performance adjustment.

A-ii
<Page>

- - The dollar amount of the performance adjustment is added to the dollar
amount of the basic fee, producing the adjusted management fee.

PERFORMANCE PERIODS. For the period from July 1, 2003 through May 31, 2004, the
Adviser will be paid at the Base Rate, without regard to any Performance
Adjustment. For the month ending June 30, 2004, the Adviser will begin applying
the Performance Adjustment as described herein, based upon the performance of
the Fund relative to the performance of the Index during the 12-month period
from July 1, 2003 through June 30, 2004. The 12-month comparison period will
roll over with each succeeding month, so that it will always equal 12 months,
ending with the month for which the performance incentive adjustment is being
computed.

CHANGES TO THE "INDEX". The Trustees have initially designated the Russell 3000
Index as the index to be used for purposes of determining the Performance
Adjustment (referred to herein as the "Index"). From time to time, to the extent
permitted by the 1940 Act, the Trustees may, by a vote of the Trustees of the
Trust voting in person, including a majority of the Trustees who are not parties
to this Agreement or "interested persons" (as defined in the 1940 Act) of any
such parties, determine that another securities index is a more appropriate
benchmark than the Index for purposes of evaluating the performance of the Fund
in calculating the Performance Adjustment. After ten days' written notice to the
Adviser, a different index (the "Successor Index") may be substituted for the
Index in prospectively calculating the Performance Adjustment. However, the
calculation of that portion of the Performance Adjustment attributable to any
portion of the performance period prior to the adoption of the Successor Index
will still be based upon the Fund's performance compared to the Index.

A-iii
<Page>

EXHIBIT B

INVESTMENT SUB-ADVISORY AGREEMENT

AGREEMENT made this __th day of ________, 200_, by and between PADCO
Advisors II, Inc., d/b/a Rydex Investments, a Maryland corporation (the
"Advisor"), and Clarke Lanzen Skalla Investment Firm, LLC, a Nebraska limited
liability company (the "Sub-Advisor").

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

WHEREAS, the Advisor has entered into an Investment Advisory Agreement
dated _________ __, 200_, as amended (the "Advisory Agreement") with the Trust,
pursuant to which the Advisor will act as the investment adviser to the separate
series of the Trust set forth therein; and

WHEREAS, the Advisor, with the approval of the Trust, desires to retain
the Sub-Advisor as its agent to furnish sub-investment advisory services to the
Advisor in connection with the management of the separate series of the Trust
set forth on SCHEDULE A of this Investment Sub-Advisory Agreement (each a
"Fund"), 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. The Advisor hereby appoints the Sub-Advisor to
provide certain sub-investment advisory services to each Fund for the period and
on the terms set forth in this Agreement. The Sub-Advisor hereby accepts such
appointment and agrees to furnish the services herein set forth for the
compensation herein provided.

2. DELIVERY OF DOCUMENTS. The Sub-Advisor hereby acknowledges
receipt of properly certified or authenticated copies of each of the following:

(a) The Trust's Agreement and Declaration of Trust, as filed
with the Secretary of State of the State of Delaware, and
all amendments thereto or restatements thereof (such
Declaration, as presently in effect and as it shall from
time to time be amended or restated, is herein called the
"Declaration of Trust");

(b) The Trust's By-Laws and amendments thereto;

(c) Resolutions of the Trust's Board of Trustees authorizing
the appointment of the Sub-Advisor and approving this
Agreement;

(d) The Trust's Notification of Registration on Form N-8A
under the 1940 Act as filed with the Securities and
Exchange Commission (the "SEC") and all amendments
thereto;

(e) The Trust's Registration Statement on Form N-1A under the
Securities Act of 1933, as amended (the "1933 Act") and
under the 1940 Act as filed with the SEC and all
amendments thereto insofar as such Registration Statement
and such amendments relate to each Fund; and

B-1
<Page>

(f) The Trust's most recent prospectus and Statement of
Additional Information for each Fund (such prospectus and
Statement of Additional Information, as presently in
effect, and all amendments and supplements thereto are
herein collectively called the "Prospectus").

The Advisor will furnish the Sub-Advisor from time to time with
copies of all amendments of or supplements to the foregoing.

3. MANAGEMENT. Subject always to the supervision of the Trust's
Board of Trustees and the Advisor, the Sub-Advisor will furnish, direct, and
administer an investment program in respect of, and make investment and
reinvestment decisions for, all assets of each Fund and place all orders for the
purchase and sale of securities, all on behalf of each Fund. In the performance
of its duties, the Sub-Advisor will satisfy its fiduciary duties to each Fund,
and will monitor each Fund's investments, and will comply with the provisions of
the Trust's Declaration of Trust and By-Laws, as amended from time to time, any
policies or restrictions imposed by the Advisor and/or the Trust, and the stated
investment objectives, policies and restrictions of each Fund as provided in
each Fund's prospectus and statement of additional information, as amended from
time to time. The Sub-Advisor and the Advisor will each make its officers and
employees available to the other from time to time at reasonable times to review
investment policies of each Fund and to consult with each other regarding the
investment affairs of each Fund. The Sub-Advisor shall also make itself
reasonably available to the Board of Trustees at such times as the Board of
Trustees shall request.

The Sub-Advisor represents and warrants that it is in compliance with all
applicable rules and regulations of the SEC pertaining to its investment
advisory activities and agrees that it:

(a) will use the same skill and care in providing such
services as it uses in providing services to fiduciary
accounts for which it has investment responsibilities;

(b) will conform with all applicable rules and regulations of
the SEC pertaining to its investment advisory activities;

(c) will place orders pursuant to its investment
determinations for each Fund either directly with the
issuer or with any broker or dealer. In placing orders
with brokers or dealers, the Sub-Advisor will attempt to
obtain the best combination of prompt execution of orders
in an effective manner and at the most favorable price
consistent with its "best execution" obligation.
Consistent with this obligation, when the execution and
price offered by two or more brokers or dealers are
comparable, the Sub-Advisor may, in its discretion,
purchase and sell portfolio securities to and from
brokers and dealers who provide the Sub-Advisor with
research advice and other services (as those terms are
defined in Section 28(e) of the Securities Act of 1934).
In no instance will portfolio securities be purchased
from or sold to the Advisor, the Sub-Advisor, Rydex
Distributors, Inc. or any affiliated person of either the
Trust, the Advisor, the Sub-Advisor or Rydex
Distributors, Inc., except as may be permitted under the
1940 Act;

(d) will report regularly to the Advisor and will make
appropriate persons available for the purpose of
reviewing at reasonable times with representatives of the
Advisor and the Board of Trustees the management of each
Fund, including,

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<Page>

without limitation, review of the general investment
strategy of each Fund, the performance of each Fund in
relation to standard industry indices, interest rate
considerations and general conditions affecting the
marketplace and will provide various other reports from
time to time as reasonably requested by the Advisor;

(e) will maintain books and records required to be maintained
by Rule 31a-3 under the 1940 Act with respect to the
Trust's securities transactions and will furnish the
Advisor and the Trust's Board of Trustees such periodic
and special reports as the Board of Trustees or the
Advisor may request;

(f) will act upon instructions from the Advisor not
inconsistent with the fiduciary duties hereunder; and

(g) will treat confidentially and as proprietary information
of the Trust all such records and other information
relative to the Trust maintained by the Sub-Advisor, and
will not use such records and information for any purpose
other than performance of its responsibilities and duties
hereunder, except after prior notification to and
approval in writing by the Trust, which approval shall
not be unreasonably withheld and may not be withheld
where the Sub-Advisor may be exposed to civil or criminal
contempt proceedings for failure to comply, when
requested to divulge such information by duly constituted
authorities, or when so requested by the Trust.

4. PROXY VOTING; CORPORATE ACTIONS. The Sub-Advisor shall execute
and deliver, or cause its nominee to execute and deliver, all proxy votes,
notices of meetings and other notices affecting or relating to the securities of
each Fund during the term of this Agreement. The Sub-Advisor shall maintain and
preserve written proxy voting procedures, and shall provide a copy of such
voting procedures, along with a record of its actual proxy votes relating to the
securities of each Fund, to the Advisor or the Trust upon request. The Advisor
and Sub-Advisor understand that the Funds may pursue their investment objectives
by investing in other investment companies that are not affiliated "underlying
funds" and specific proxy rules are applicable under the 1940 Act to this type
of relationship. In particular the Sub-Advisor will vote all proxies received
from the underlying funds in the same proportion that all shares of the
underlying funds are voted, or in accordance with instructions received from
fund shareholders, pursuant to Section 12(d)(1)(F) of the 1940 Act. Beginning
July 1, 2003, the Sub-Adviser shall maintain records regarding proxy voting on
behalf of the Portfolio in order that the Portfolio may complete the annual Form
N-PX filing.

5. BOOKS AND RECORDS. In compliance with the requirements of
Rule 31a-3 under the 1940 Act, the Sub-Advisor hereby agrees that all records
which it maintains for each Fund, on behalf of the Trust are the property of the
Trust and further agrees to surrender promptly to the Trust any of such records
upon the Trust's request. The Sub-Advisor further agrees to preserve for the
periods prescribed by Rule 31a-2 under the 1940 Act the records required to be
maintained by Rule 31a-1 under the 1940 Act.

6. EXPENSES. During the term of this Agreement, the Sub-Advisor will
pay all expenses incurred by it in connection with its activities under this
Agreement.

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<Page>

7. COMPENSATION. For the services to be provided by the Sub-Advisor
pursuant to this Agreement, the Advisor will pay the Sub-Advisor, and the
Sub-Advisor agrees to accept as full compensation therefor, a sub-advisory fee
paid at the rate specified on SCHEDULE A, which is attached hereto and made part
of this Agreement. The fee will be calculated based on the average daily net
asset value of the Assets under the Sub-Advisor's management. This fee will be
paid at least quarterly. Except as may otherwise be prohibited by law or
regulation (including any then current SEC staff interpretation), the
Sub-Advisor may, in its discretion and from time to time, waive a portion of its
fee. Sub-Advisor shall not be responsible for expenses and costs of a Fund's
operations payable by a Fund or the Advisor.

8. SERVICES TO OTHERS. The Advisor understands, and has advised the
Trust's Board of Trustees, that the Sub-Advisor now acts, and may in the future
act, as an investment adviser and fiduciary to other managed accounts, and as
investment adviser, sub-investment adviser, and/or administrator to other
investment companies. The Advisor has no objection to the Sub-Advisor's acting
in such capacities, provided that the Sub-Advisor furnishes adequate disclosure
of such possible conflicts of interest and implements procedures designed to
mitigate or eliminate such conflicts. For example, whenever a Fund and one or
more other investment companies advised by the Sub-Advisor have available funds
for investment, investments suitable and appropriate for each will be allocated
in accordance with a formula believed by the Sub-Advisor to be equitable to each
company. The Advisor recognizes, and has advised the Trust's Board of Trustees,
that in some cases the Sub-Advisor's procedures may adversely affect the size of
the position that each Fund may obtain in a particular security. In addition,
the Advisor understands, and has advised the Trust's Board of Trustees, that the
persons employed by the Sub-Advisor to assist in the Sub-Advisor's duties under
this Agreement will not devote their full time to such service and nothing
contained in this Agreement will be deemed to limit or restrict the right of the
Sub-Advisor or any of its affiliates to engage in and devote time and attention
to other businesses or to render services of whatever kind or nature.

9. STANDARD OF CARE. Each of the Advisor and Sub-Advisor shall
discharge its duties under this Agreement with the care, skill, prudence and
diligence under the circumstances then prevailing that a prudent person acting
in a like capacity and familiar with such matters would use in the conduct of an
enterprise of a like character and with like aims. The parties recognize that
the opinions, recommendations and actions of Sub-Advisor will be based on advice
and information deemed to be reliable but not guaranteed by or to Sub-Advisor.

10. INDEMNIFICATION. Each of the Advisor and Sub-Advisor agrees to
indemnify each other against any claim, loss or liability (including reasonable
attorney's fees) arising as a result of the failure to meet the standard of care
set forth in the first sentence of Paragraph 9 hereof. Notwithstanding the
generality of the foregoing, the Advisor and Sub-Advisor each further agrees to
indemnify each other against any claim, loss or liability (including reasonable
attorney's fees) arising or as a result of willful misfeasance, bad faith or
gross negligence in the performance of its duties, or by reason of reckless
disregard of its obligation and duties hereunder. The federal securities laws
impose liabilities under certain circumstances on persons who act in good faith,
and therefore nothing herein shall in any way constitute a waiver or limitation
of any rights which each party may have against the other under any federal
securities laws based on negligence and which cannot be modified in advance by
contract.

11. DURATION AND TERMINATION. This Agreement will become effective as
of the date hereof provided that it has been approved by vote of a majority of
the outstanding voting securities of each Fund in accordance with the
requirements under the 1940 Act, and, unless sooner terminated as provided
herein, will continue in effect for two years.

B-4
<Page>

Thereafter, if not terminated, this Agreement will continue in effect for
each Fund for successive periods of 12 months, each ending on the day preceding
the anniversary of the Agreement's effective date of each year, provided that
such continuation is specifically approved at least annually (a) by the vote of
a majority of those members of the Trust's Board of Trustees who are not
interested persons of the Trust, the Sub-Advisor, or the Advisor, cast in person
at a meeting called for the purpose of voting on such approval, and (b) by the
vote of a majority of the Trust's Board of Trustees or by the vote of a majority
of all votes attributable to the outstanding shares of each Fund.
Notwithstanding the foregoing, this Agreement may be terminated as to each Fund
at any time, without the payment of any penalty, on sixty (60) days' written
notice by the Advisor or by the Sub-Advisor. This Agreement will immediately
terminate in the event of its assignment. (As used in this Agreement, the terms
"majority of the outstanding voting securities," "interested persons" and
"assignment" have the same meaning of such terms ascribed in the 1940 Act.)

This Agreement will terminate automatically if the investment advisory
agreement between the Trust and the Advisor is terminated.

12. AMENDMENT OF THIS AGREEMENT. No provision of this Agreement may
be changed, waived, discharged or terminated orally, but only by an instrument
in writing signed by the party against which enforcement of the change, waiver,
discharge or termination is sought.

13. MULTIPLE ORIGINALS. This Agreement may be executed in two or more
counterparts, each of which when so executed shall be deemed to be an original,
but such counterparts shall together constitute but one and the same document.

14. CUSTODY. All securities and other assets of each Fund shall be
maintained with a custodian designated by the Advisor. The Sub-Advisor shall
have no responsibility or liability with respect to any custodial function.

15. MISCELLANEOUS. The captions in this Agreement are included for
convenience of reference only and in no way define or delimit any of the
provisions hereof or otherwise affect their construction or effect. If any
provision of this Agreement is held or made invalid by a court decision,
statute, rule or otherwise, the remainder of this Agreement will not be affected
thereby. This Agreement will be binding upon and shall inure to the benefit of
the parties hereto and will be governed by the internal laws of the state of
Delaware. The Sub-Advisor shall notify the Advisor of any changes in its
officers and directors within a reasonable time.

16. LIMITATION OF LIABILITY. The names "Rydex Variable Trust" and
"Trustees of the Rydex Variable Trust" refer respectively to the Trust created
by, and the Trustees, as trustees but not individually or personally, acting
from time to time under, the Declaration of Trust, to which reference is hereby
made and a copy of which is on file at the office of the Secretary of State of
the State of Delaware and elsewhere as required by law, and to any and all
amendments thereto so filed or hereafter filed. The obligations of the Trust
entered in the name or on behalf thereof by any of the Trustees, representatives
or agents are made not individually but only in such capacities and are not
binding upon any of the Trustees, shareholders or representatives of the Trust
personally, but bind only the assets of the Trust. Persons dealing with each
Fund must look solely to the assets of the Trust belonging to each Fund for the
enforcement of any claims against the Trust.

B-5
<Page>

IN WITNESS WHEREOF, the parties hereto have caused this instrument to
be executed by their officers designated below as of the day and year first
above written.

PADCO ADVISORS II, INC.

By:
--------------------------------

Name:
------------------------------

Title:
-----------------------------

CLARKE LANZEN SKALLA INVESTMENT FIRM, LLC

By:
--------------------------------

Name:
------------------------------

Title:
-----------------------------

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<Page>

SCHEDULE A
TO THE
INVESTMENT SUB-ADVISORY AGREEMENT
BETWEEN
PADCO ADVISORS II, INC.
AND
CLARKE LANZEN SKALLA INVESTMENT FIRM, LLC

Pursuant to Section 7 of this Investment Sub-Advisory Agreement, the Advisor
shall pay the Sub-Advisor compensation at an annual rate as follows:

Amerigo Fund: 0.40%

Clermont Fund: 0.40%

Should either of the aforementioned Funds not average $10,000,000 in assets over
a quarter, the Sub-Advisor will not receive compensation for assets in that Fund
for that specific quarter.

B-7