<PAGE>
December 31, 1999
annual report
ProFunds No-Load Mutual Funds
Bull ProFund
UltraBull ProFund
UltraOTC ProFund
UltraEurope ProFund
Bear ProFund
UltraBear ProFund
UltraShort OTC ProFund
UltraShort Europe ProFund
Money Market ProFund
[LOGO OF PROFUNDS]
<PAGE>
Table of Contents
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
Letter from the Chairman........................................... 1
Letter from the Investment Advisor................................. 3
Schedules of Portfolio Investments and Financial Statements
Bull ProFund...................................................... 5
UltraBull ProFund................................................. 14
UltraOTC ProFund.................................................. 24
UltraEurope ProFund............................................... 30
Bear ProFund...................................................... 35
UltraBear ProFund................................................. 40
UltraShort OTC ProFund............................................ 45
UltraShort Europe ProFund......................................... 50
Money Market ProFund.............................................. 55
Notes to Financial Statements...................................... 59
Cash Management Portfolio
Schedule of Portfolio Investments................................. 69
Statement of Assets and Liabilities............................... 73
Statement of Operations........................................... 73
Statements of Changes in Net Assets............................... 74
Financial Highlights.............................................. 75
Notes to Financial Statements..................................... 76
</TABLE>
<PAGE>
PROFUNDS
Message from the Chairman
Dear Shareholders:
I am very pleased to present the Annual Report to the Shareholders of
ProFunds for the twelve months ended December 31, 1999.
Like our first year in operation, our second was one of tremendous success.
Over the course of the past twelve months, net assets under management
increased 328% and, at the end of the year, topped $2 billion.
We view our success in attracting assets as a reflection for the need for
the innovative indexed products we offer. Needless to say, we are extremely
gratified that you and all our other shareholders have chosen to place
confidence in us.
The century concluded with unprecedented volatility and performance in the
stock market. With ProFunds that thrive in bull markets, ProFunds that thrive
in bear markets and ProFunds that seek to enhance the performance of specified
market segments, many investors turned to ProFunds to take advantage of these
market conditions.
And ProFunds continued to deliver the opportunities by providing consistent
performance. In 1999 each ProFund tracked its target benchmark with a
statistical correlation of .97 or better.
ProFunds Now Cover the Spectrum . . .
As I let you know in a recent letter, we have responded to our shareholders
desire for more Ultra-style investment opportunities. On February 8 of this
year, we introduced three new ProFunds:
. UltraSmall-Cap ProFund--seeks daily investment results that correspond to
twice (200%) the performance of the Russell 2000(R) Index.
. UltraMid-Cap ProFund--seeks daily investment results that correspond to
twice (200%) the performance of the S&P MidCap 400 Index.
. UltraJapan ProFund--seeks daily investment results that correspond to
twice (200%) the performance of the Nikkei 225 Stock Average.
As with the rest of the ProFunds, these new ProFunds charge no transaction
fees. Nor are there any restrictions on moving between these ProFunds or any
of the other ProFunds.
Other Developments . . .
As we moved into the New Year, our website, http://www.profunds.com was
enhanced to offer you the ability to obtain information about your ProFunds
account and to execute exchanges between your ProFunds(/1/). This allows you
to access your ProFunds investments at any hour of the day or night.
UltraOTC ProFund (Investor Class) persisted to be an industry leader in
performance with 185.34% average annual return for 1998 and 233.25% average
annual return for 1999. These past two years have boosted the ProFund's
cumulative return since its inception (December 2, 1997) to 694.88%(/2/).
- -----
(/1/)Exchanges involving UltraEurope ProFund currently not available on the
Internet.
(/2/Past)performance is not predictive of future results. The investment
return and NAV will fluctuate so that the investor's shares when redeemed
may be worth more or less than the original cost.
1
<PAGE>
American Skandia, one of the top-selling providers of variable annuities in
the nation, chose to offer ProFunds investment options within their products.
We are pleased to report that these ProFunds have performed in line with
expectations in their first few months in operation.
Based on the recommendation of ProFund Advisors LLC, the investment advisor
to ProFunds, the Trustees of ProFunds approved the closing of the UltraShort
Europe ProFund. The Trustees felt that this ProFund had not attracted
sufficient interest among prospective investors and was unlikely to do so in
the future. The Trustees were also concerned that the ProFund would be unable
to continue operating at a competitive expense ratio.
Check our web site frequently for future news on new services and investment
options we plan to offer.
In closing . . .
Finally, in the pages that follow, you'll find a detailed discussion of the
performance of the ProFunds and its performance over the past year. You will
also find a letter from ProFund Advisors LLC which discusses many of the
factors that affected the performance of different market indices over the past
year. We urge you to read this material closely.
Once again, we deeply appreciate your confidence and support. As always, if
you have any questions or require any assistance, please don't hesitate to call
us at 1-800-PRO-FUNDS, or visit http://www.profunds.com.
Sincerely,
/s/ Michael L. Sapir
Michael L. Sapir
Chairman, ProFunds
2
<PAGE>
PROFUNDS
Message from the Investment Advisor
Dear Shareholders:
1999 was another year of solid returns for U.S. stocks--over the course of
the twelve months, the S&P 500 gained 19.53% and the NASDAQ 100 Index was up a
record 101.95%. What's more, both indices capped off the year by hitting new
highs on December 31, 1999.
The increase in the broad market indices was due in large part to the
outstanding performance of technology stocks. The companies of the "new
economy" lead the way pulling along the more traditional manufacturing types of
companies. Clearly investors view the internet and its related e-commerce
companies as the wave of the future for everything from communication, to
research, to retailing.
The Fed tries to apply the brakes
Throughout the period, several factors played a role in creating this
situation. Early in 1999, in an effort to increase the stability of global
markets and increase the pace of their recovery, the Federal Reserve lowered
interest rates. While this did have its intended impact, it also pleased
investors in the U.S. In late March, the Dow Jones Industrial Average broke the
10,000 barrier for the first time, and in the following months, continued its
climb to over 11,000. However by the middle of the second quarter, the strength
of the recovery overseas and the possibility that the U.S. economy might be
overheating became real concerns to the Fed.
Fear of inflation once again gripped the markets and valuations moved lower.
Gains were further eroded as the Fed raised interest rates in June and again in
August. Throughout the third quarter, markets sold off in anticipation that
these two increases would not be the last. With each increase, however,
investor enthusiasm for technology issues was dampened only momentarily.
Out with the Old, In with the New
For what only seemed to be seconds after each rate increase, market prices
acknowledged the Fed's actions and concerns. Turning conventional wisdom on its
head, investors ignored time-honored yardsticks of corporate value like
earnings and cash flow as they moved to the technology issues. The P/E ratios
of the year's top-performing stocks--where earnings could be measured--were in
the triple digits, compared to a ratio of approximately 25 for the market as a
whole.
Even the much-anticipated Y2K effect failed to curb the market's appetite for
technology issues--and few could argue that the enthusiasm was entirely
misplaced. Advancements in telecommunications, the internet and information
transfer are rapidly transforming our lives and the way business is conducted.
U.S. companies are at the forefront of this revolution, which is now spreading
worldwide. The potential that they represent to investors may be
unprecedented--both in domestic markets, and markets abroad.
Nonetheless, throughout much of 1999, the result was that the U.S. stock
markets were clearly split into two different markets--technology and
everything else. Moreover, throughout the year, as the valuations of technology
stocks rose, market indices grew more and more reflective of their performance.
3
<PAGE>
Going Forward
The variety of market indices now available make it possible to track the
progress of these "other" issues very closely, particularly those in the small
and mid-cap sectors--two arenas long overlooked in the
technology stampede of the past several years. Overseas equity markets,
particularly Japan, are also rebounding strongly. As a result, as we go to
press, we just launched three new ProFunds, which will track the progress of
the mid-cap and small-cap sectors, and the Japanese equity market.
Sincerely,
/s/ William E. Seale
Dr. William Seale
Director of Portfolio
4
<PAGE>
The Bull ProFund
The Bull ProFund seeks to provide daily investment returns that correspond
to the performance of the S&P 500 Index. Over the course of the year ended
December 31, 1999, the S&P 500 gained 240.02 points, which the Fund's
performance tracked with a statistical correlation of over .99. As a result,
for the twelve months, the Fund (Investor Shares) produced a total return of
17.18%* versus a return of 19.53% for the S&P 500.
[GRAPH]
* Past performance is not predictive of future results. The investment return
and NAV will fluctuate so that the investor's shares, when redeemed, may be
worth more or less than the original cost.
The performance of the Bull ProFund is measured against the S&P 500 Index,
an unmanaged index generally representative of the performance of the U.S.
stock market as a whole. The index does not reflect the reinvestment of
dividends or the deduction of expenses associated with a mutual fund, such as
investment management and accounting fees. The Fund's performance reflects the
deduction of these value-added services.
The above information is not covered by the Report of Independent Accountants.
5
<PAGE>
PROFUNDS Schedule of Portfolio Investments
Bull ProFund December 31, 1999
<TABLE>
<CAPTION>
Common Stocks (89.2%)
Market
Shares Value
----------- ------------
<S> <C> <C>
3COM Corp.*........................................... 3,075 $ 144,525
Abbott Laboratories................................... 16,250 590,078
Adaptec, Inc.*........................................ 1,075 53,616
ADC Telecommunications, Inc.*......................... 1,575 114,286
Adobe Systems, Inc. .................................. 1,275 85,744
Advanced Micro Devices, Inc.*......................... 1,550 44,853
AES Corp.*............................................ 2,200 164,450
Aetna, Inc. .......................................... 1,600 89,300
AFLAC, Inc. .......................................... 2,825 133,305
Air Products & Chemicals, Inc. ....................... 2,475 83,067
Alberto-Culver Co. ................................... 600 15,488
Albertson's, Inc. .................................... 4,475 144,319
Alcan Aluminium Ltd. ................................. 2,325 95,761
Alcoa, Inc. .......................................... 3,950 327,849
Allegheny Technologies, Inc. ......................... 1,008 22,606
Allergan, Inc. ....................................... 1,400 69,650
Allied Waste Industries, Inc.*........................ 1,950 17,184
Allstate Corp. ....................................... 8,475 203,400
Alltel Corp. ......................................... 3,325 274,936
Alza Corp.--Class A*.................................. 1,075 37,222
Amerada Hess Corp. ................................... 1,075 61,006
Ameren Corp. ......................................... 1,450 47,488
America Online, Inc.*................................. 23,375 1,763,352
American Electric Power, Inc. ........................ 2,050 65,856
American Express Co. ................................. 4,725 785,531
American General Corp. ............................... 2,600 197,275
American Greetings Corp.--Class A..................... 675 15,947
American Home Products Corp. ......................... 13,875 547,195
American International Group, Inc. ................... 16,450 1,778,656
Amgen, Inc.*.......................................... 10,950 657,684
AMR Corp.*............................................ 1,575 105,525
AmSouth Bancorp....................................... 4,125 79,664
Anadarko Petroleum Corp. ............................. 1,350 46,069
Analog Devices*....................................... 1,825 169,725
Andrew Corp.*......................................... 900 17,044
Anheuser-Busch Cos., Inc. ............................ 4,975 352,603
AON Corp. ............................................ 2,700 108,000
Apache Corp. ......................................... 1,200 44,325
Apple Computer, Inc.*................................. 1,725 177,352
Applied Materials, Inc.*.............................. 3,950 500,415
Archer-Daniels-Midland Co. ........................... 6,550 79,828
Armstrong World Industries, Inc. ..................... 425 14,184
Ashland, Inc. ........................................ 775 25,527
Associates First Capital Corp. ....................... 7,625 209,211
AT&T Corp. ........................................... 33,725 1,711,544
Atlantic Richfield Co. ............................... 3,425 296,263
Autodesk, Inc. ....................................... 650 21,938
Automatic Data Processing, Inc. ...................... 6,600 355,574
AutoZone, Inc.*....................................... 1,550 50,084
Avery Dennison Corp. ................................. 1,200 87,450
Avon Products, Inc. .................................. 2,550 84,150
Baker Hughes, Inc. ................................... 3,550 74,772
Ball Corp. ........................................... 325 12,797
Bank of America Corp. ................................ 18,325 919,685
Bank of New York Co., Inc. ........................... 7,825 313,000
Bank One Corp. ....................................... 12,250 392,766
Bard (C.R.) Inc. ..................................... 550 29,150
Barrick Gold Corp. ................................... 4,125 72,961
Bausch & Lomb, Inc. .................................. 625 42,773
</TABLE>
<TABLE>
<CAPTION>
Common Stocks, continued
Market
Shares Value
----------- ------------
<S> <C> <C>
Baxter International, Inc. ........................... 3,125 $ 196,289
BB&T Corp. ........................................... 3,500 95,813
Bear Stearns Cos., Inc. .............................. 1,250 53,438
Becton, Dickinson & Co. .............................. 2,650 70,888
Bed Bath & Beyond, Inc.*.............................. 1,475 51,256
Bell Atlantic Corp. .................................. 16,850 1,037,328
BellSouth Corp. ...................................... 20,075 939,761
Bemis Co., Inc. ...................................... 550 19,181
Best Buy Co., Inc.*................................... 2,150 107,903
Bestfoods............................................. 2,975 156,373
Bethlehem Steel Corp.*................................ 1,400 11,725
Biomet, Inc. ......................................... 1,200 48,000
Black & Decker Corp. ................................. 925 48,331
Block H & R Inc. ..................................... 1,025 44,844
BMC Software, Inc.*................................... 2,575 205,839
Boeing Co. ........................................... 10,150 421,859
Boise Cascade Corp. .................................. 600 24,300
Boston Scientific Corp.*.............................. 4,400 96,250
Briggs & Stratton Corp. .............................. 250 13,406
Bristol-Myers Squibb Co. ............................. 21,275 1,365,589
Brown-Forman Corp. ................................... 725 41,506
Brunswick Corp. ...................................... 975 21,694
Burlington Northern Santa Fe Corp. ................... 4,925 119,431
Burlington Resources, Inc. ........................... 2,250 74,391
Cabletron Systems*.................................... 1,950 50,700
Campbell Soup Co. .................................... 4,550 176,028
Capital One Financial Corp. .......................... 2,075 99,989
Cardinal Health, Inc. ................................ 2,950 141,231
Carnival Corp.--Class A............................... 6,550 313,172
Carolina Power & Light Co. ........................... 1,700 51,744
Caterpillar, Inc. .................................... 3,750 176,484
CBS Corp.*............................................ 8,100 517,894
Cendant Corp.*........................................ 7,525 199,883
Centex Corp. ......................................... 625 15,430
Central & South West Corp. ........................... 2,250 45,000
CenturyTel, Inc. ..................................... 1,475 69,878
Ceridian Corp.*....................................... 1,525 32,883
Champion International Corp. ......................... 1,000 61,938
Chase Manhattan Corp. ................................ 8,750 679,765
Chevron Corp. ........................................ 6,975 604,209
Chubb Corp. .......................................... 1,875 105,586
CIGNA Corp. .......................................... 1,975 159,111
Cincinnati Financial Corp. ........................... 1,750 54,578
Cinergy Corp. ........................................ 1,675 40,409
Circuit City Stores, Inc. ............................ 2,150 96,884
Cisco Systems, Inc.*.................................. 34,900 3,738,662
Citigroup, Inc. ...................................... 35,800 1,989,137
Citrix Systems, Inc.*................................. 950 116,850
Clear Channel Communications, Inc.*................... 3,625 323,531
Clorox Co. ........................................... 2,500 125,938
CMS Energy Corp. ..................................... 1,225 38,205
Coastal Corp. ........................................ 2,300 81,506
Coca-Cola Co. ........................................ 27,050 1,575,662
Coca-Cola Enterprises, Inc. .......................... 4,575 92,072
Colgate-Palmolive Co. ................................ 6,300 409,499
Columbia Energy Group ................................ 875 55,344
Columbia HCA Healthcare Corp. ........................ 6,000 175,875
Comcast Corp.--Special Class A........................ 7,725 388,181
Comerica, Inc. ....................................... 1,675 78,202
</TABLE>
See accompanying notes to the financial statements.
6
<PAGE>
PROFUNDS Schedule of Portfolio Investments
Bull ProFund December 31, 1999
<TABLE>
<CAPTION>
Common Stocks, continued
Market
Shares Value
----------- ------------
<S> <C> <C>
Compaq Computer Corp. ................................ 18,425 $ 498,627
Computer Associates International, Inc. .............. 5,775 403,889
Computer Sciences Corp.*.............................. 1,775 167,959
Compuware Corp.*...................................... 3,800 141,550
Comverse Technology, Inc.*............................ 750 108,563
ConAgra, Inc. ........................................ 5,325 120,145
Conoco, Inc.--Class B................................. 6,625 164,797
Conseco, Inc. ........................................ 3,500 62,563
Consolidated Edison, Inc. ............................ 2,325 80,213
Consolidated Natural Gas Co. ......................... 1,025 66,561
Consolidated Stores Corp.*............................ 1,175 19,094
Constellation Energy Group, Inc. ..................... 1,550 44,950
Cooper Industries, Inc. .............................. 1,000 40,438
Cooper Tire & Rubber Co. ............................. 825 12,839
Coors (Adolph) Co.--Class B........................... 400 21,000
Corning, Inc. ........................................ 2,650 341,684
Costco Wholesale Corp.*............................... 2,350 214,438
Countrywide Credit Industries, Inc. .................. 1,200 30,300
Crane Co. ............................................ 700 13,913
Crown Cork & Seal Co., Inc. .......................... 1,300 29,088
CSX Corp. ............................................ 2,325 72,947
Cummins Engine Co. ................................... 450 21,741
CVS Corp. ............................................ 4,175 166,739
Dana Corp. ........................................... 1,750 52,391
Danaher Corp. ........................................ 1,525 73,581
Darden Restaurants, Inc. ............................. 1,400 25,375
Dayton-Hudson Corp. .................................. 4,725 346,992
Deere & Co. .......................................... 2,475 107,353
Dell Computer Corp.*.................................. 26,800 1,366,799
Delphi Automotive Systems Corp. ...................... 5,950 93,713
Delta Air Lines, Inc. ................................ 1,425 70,983
Deluxe Corp. ......................................... 775 21,264
Dillards, Inc.--Class A............................... 1,125 22,711
Dollar General Corp. ................................. 2,800 63,700
Dominion Resources, Inc. ............................. 2,025 79,481
Donnelley (R.R.) & Sons Co. .......................... 1,350 33,497
Dover Corp. .......................................... 2,150 97,556
Dow Chemical Co. ..................................... 2,325 310,678
Dow Jones & Co., Inc. ................................ 950 64,600
DTE Energy Co. ....................................... 1,550 48,631
Du Pont (E.I.) de Nemours............................. 11,000 724,626
Duke Energy Corp. .................................... 3,875 194,234
Dun & Bradstreet Corp. ............................... 1,725 50,888
Eastern Enterprises................................... 275 15,795
Eastman Chemical Co. ................................. 825 39,342
Eastman Kodak Co. .................................... 3,450 228,563
Eaton Corp. .......................................... 775 56,284
Ecolab, Inc. ......................................... 1,375 53,797
Edison International.................................. 3,675 96,239
El Paso Energy Corp. ................................. 2,425 94,120
Electronic Data Systems Corp. ........................ 5,075 339,708
Eli Lilly & Co. ...................................... 11,525 766,413
EMC Corp.*............................................ 10,800 1,179,900
Emerson Electric Co. ................................. 4,625 265,359
Engelhard Corp. ...................................... 1,350 25,481
Enron Corp. .......................................... 7,650 339,469
Entergy Corp. ........................................ 2,625 67,594
Equifax, Inc. ........................................ 1,500 35,344
</TABLE>
<TABLE>
<CAPTION>
Common Stocks, continued
Market
Shares Value
----------- ------------
<S> <C> <C>
Exxon Mobil Corp. .................................... 36,590 $ 2,947,746
Fannie Mae............................................ 10,975 685,252
FDX Corp.*............................................ 3,200 131,000
Federated Department Stores, Inc.*.................... 2,250 113,766
Fifth Third Bancorp................................... 3,275 240,303
First Data Corp. ..................................... 4,525 223,138
First Union Corp. .................................... 10,450 342,891
Firstar Corp. ........................................ 10,475 221,284
FirstEnergy Corp. .................................... 2,450 55,584
Fleet Boston Financial Corp. ......................... 9,850 342,903
Fleetwood Enterprises, Inc. .......................... 350 7,219
Florida Progress Corp. ............................... 1,050 44,428
Fluor Corp. .......................................... 800 36,700
FMC Corp.*............................................ 325 18,627
Ford Motor Co. ....................................... 12,850 686,671
Fort James Corp. ..................................... 2,300 62,963
Fortune Brands, Inc. ................................. 1,775 58,686
Foster Wheeler Corp. ................................. 400 3,550
FPL Group, Inc. ...................................... 1,925 82,414
Franklin Resources, Inc. ............................. 2,650 84,966
Freddie Mac........................................... 7,375 347,086
Freeport-McMoran Copper & Gold, Inc.--Class B*........ 1,850 39,081
Gannett Co., Inc. .................................... 2,975 242,648
Gap, Inc. ............................................ 9,050 416,300
Gateway, Inc.*........................................ 3,375 243,211
General Dynamics Corp. ............................... 2,125 112,094
General Electric Co. ................................. 35,025 5,420,118
General Instruments Corp.*............................ 1,875 159,375
General Mills, Inc. .................................. 3,175 113,506
General Motors Corp. ................................. 6,800 494,275
Genuine Parts Co. .................................... 1,875 46,523
Georgia Pacific Corp. ................................ 1,800 91,350
Gillette Co. ......................................... 11,400 469,537
Global Crossing Ltd.*................................. 8,125 406,250
Golden West Financial Corp. .......................... 1,399 46,867
Goodrich (B.F.) Co. .................................. 1,175 32,313
Goodyear Tire & Rubber Co. ........................... 1,675 47,214
GPU, Inc. ............................................ 1,300 38,919
Grainger (W.W.) Inc. ................................. 975 46,617
Great Atlantic & Pacific Tea Co. ..................... 425 11,847
Great Lakes Chemical Corp. ........................... 600 22,913
GTE Corp. ............................................ 10,525 742,670
Guidant Corp.*........................................ 3,275 153,925
Halliburton Co. ...................................... 4,725 190,181
Harcourt General, Inc. ............................... 750 30,188
Harrah's Entertainment, Inc.*......................... 1,375 36,352
Hartford Financial Services Group, Inc. .............. 2,375 112,516
Hasbro, Inc. ......................................... 2,000 38,125
Healthsouth Corp.*.................................... 4,000 21,500
Heinz (H.J.) Co. ..................................... 3,800 151,288
Helmerich & Payne, Inc. .............................. 20 436
Hercules, Inc. ....................................... 1,125 31,359
Hershey Foods Corp. .................................. 1,450 68,875
Hewlett-Packard Co. .................................. 10,750 1,224,828
Hilton Hotels Corp. .................................. 3,975 38,259
Home Depot, Inc. ..................................... 24,675 1,691,779
Homestake Mining Co. ................................. 2,700 21,094
</TABLE>
See accompanying notes to the financial statements.
7
<PAGE>
PROFUNDS Schedule of Portfolio Investments
Bull ProFund December 31, 1999
<TABLE>
<CAPTION>
Common Stocks, continued
Market
Shares Value
----------- ------------
<S> <C> <C>
Honeywell International, Inc. ....................... 8,327 $ 480,356
Household International, Inc. ....................... 5,050 188,113
Humana, Inc.* ....................................... 1,750 14,328
Huntington Bancshares, Inc. ......................... 2,450 58,494
IKON Office Solutions, Inc. ......................... 1,550 10,559
Illinois Tool Works, Inc. ........................... 3,150 212,822
IMS Health, Inc. .................................... 3,200 87,000
Inco Ltd.*........................................... 2,025 47,588
Ingersoll-Rand Co. .................................. 1,725 94,983
Intel Corp. ......................................... 35,650 2,934,440
International Business Machines Corp. ............... 19,100 2,062,799
International Flavors & Fragrances, Inc. ............ 1,125 42,469
International Paper Co. ............................. 4,375 246,913
Interpublic Group Cos., Inc. ........................ 2,975 171,620
ITT Industries, Inc. ................................ 950 31,766
J.P. Morgan & Co. ................................... 1,850 234,256
Jefferson-Pilot Corp. ............................... 1,125 76,781
Johnson & Johnson.................................... 14,850 1,382,907
Johnson Controls, Inc. .............................. 900 51,188
Jostens, Inc. ....................................... 350 8,509
K Mart Corp.*........................................ 5,200 52,325
Kansas City Southern Industries, Inc. ............... 1,175 87,684
Kaufman & Broad Home Corp. .......................... 500 12,094
Kellogg Co. ......................................... 4,275 131,723
Kerr-McGee Corp. .................................... 900 55,800
KeyCorp.............................................. 4,800 106,200
Kimberly-Clark Corp. ................................ 5,775 376,819
KLA-Tencor Corp.*.................................... 950 105,806
Knight Ridder, Inc. ................................. 900 53,550
Kohls Corp.*......................................... 1,750 126,328
Kroger Co.*.......................................... 8,825 166,572
Leggett & Platt, Inc. ............................... 2,100 45,019
Lexmark International Group, Inc.*................... 1,350 122,175
Limited, Inc. ....................................... 2,275 98,536
Lincoln National Corp. .............................. 2,100 84,000
Liz Claiborne, Inc. ................................. 625 23,516
Lockheed Martin Corp. ............................... 4,200 91,875
Loews Corp. ......................................... 1,125 68,273
Longs Drug Stores, Inc. ............................. 425 10,970
Louisiana-Pacific Corp. ............................. 1,125 16,031
Lowe's Cos., Inc. ................................... 4,050 241,988
LSI Logic Corp.*..................................... 1,600 108,000
Lucent Technologies, Inc. ........................... 33,325 2,493,126
Mallinckrodt, Inc. .................................. 750 23,859
Manor Care, Inc.*.................................... 1,100 17,600
Marriott International, Inc.--Class A................ 2,625 82,852
Marsh & McLennan Cos., Inc. ......................... 2,825 270,317
Masco Corp. ......................................... 4,775 121,165
Mattel, Inc. ........................................ 4,425 58,078
May Department Stores Co. ........................... 3,550 114,488
Maytag Corp. ........................................ 900 43,200
MBIA, Inc. .......................................... 1,075 56,773
MBNA Corp. .......................................... 8,525 232,306
McDermott International, Inc. ....................... 625 5,664
McDonald's Corp. .................................... 14,350 578,484
McGraw-Hill Cos., Inc. .............................. 2,100 129,413
MCI Worldcom, Inc.*.................................. 30,112 1,597,845
McKesson HBOC, Inc. ................................. 3,000 67,688
</TABLE>
<TABLE>
<CAPTION>
Common Stocks, continued
Market
Shares Value
----------- ------------
<S> <C> <C>
Mead Corp. ........................................... 1,075 $ 46,695
MediaOne Group, Inc.*................................. 6,525 501,202
Medtronic, Inc. ...................................... 12,650 460,934
Mellon Financial Corp. ............................... 5,425 184,789
Merck & Co., Inc. .................................... 25,000 1,676,563
Meredith Corp. ....................................... 550 22,928
Merrill Lynch & Co., Inc. ............................ 3,950 329,825
MGIC Investment Corp. ................................ 1,125 67,711
Micron Technology, Inc.*.............................. 2,850 221,588
Microsoft Corp.*...................................... 55,275 6,453,356
Milacron, Inc. ....................................... 400 6,150
Millipore Corp. ...................................... 475 18,347
Minnesota Mining & Mfg. Co. .......................... 4,275 418,416
Mirage Resorts, Inc.*................................. 2,075 31,773
Molex, Inc. .......................................... 1,675 94,952
Monsanto Co. ......................................... 6,800 242,250
Morgan Stanley, Dean Witter & Co. .................... 5,950 849,362
Motorola, Inc. ....................................... 6,525 960,806
Nabisco Group Holdings Corp. ......................... 3,475 36,922
NACCO Industries, Inc.--Class A....................... 75 4,167
National City Corp. .................................. 6,575 155,745
National Semiconductor Corp.*......................... 1,825 78,133
National Service Industries, Inc. .................... 425 12,538
Navistar International Corp.*......................... 675 31,978
Network Appliance, Inc.*.............................. 1,625 134,977
New Century Energies, Inc. ........................... 1,225 37,209
New York Times Co.--Class A........................... 1,800 88,425
Newell Rubbermaid, Inc. .............................. 3,025 87,725
Newmont Mining Corp. ................................. 1,775 43,488
Nextel Communications, Inc.--Class A*................. 4,050 417,656
Niagara Mohawk Holdings, Inc.*........................ 2,025 28,223
Nicor, Inc. .......................................... 500 16,250
Nike, Inc.--Class B................................... 3,025 149,926
Nordstrom, Inc. ...................................... 1,475 38,627
Norfolk Southern Corp. ............................... 4,000 82,000
Nortel Networks Corp. ................................ 14,525 1,467,025
Northern States Power Co. ............................ 1,650 32,175
Northern Trust Corp. ................................. 2,350 124,550
Northrop Grumman Corp. ............................... 750 40,547
Novell, Inc.*......................................... 3,575 142,330
Nucor Corp. .......................................... 925 50,702
Occidental Petroleum Corp. ........................... 3,950 85,419
Office Depot, Inc.*................................... 3,500 38,281
Old Kent Financial Corp. ............................. 1,250 44,219
Omnicom Group......................................... 1,900 190,000
Oneok, Inc. .......................................... 325 8,166
Oracle Corp.*......................................... 15,650 1,753,778
Owens-Corning Fiberglass Corp. ....................... 600 11,588
Owens-Illinois, Inc.*................................. 1,600 40,100
PACCAR, Inc. ......................................... 825 36,558
Pactiv Corp.*......................................... 1,800 19,125
Paine Webber Group, Inc. ............................. 1,525 59,189
Pall Corp. ........................................... 1,325 28,570
Parametric Technology Corp.*.......................... 2,900 78,481
Parker Hannifin Corp. ................................ 1,200 61,575
Paychex, Inc. ........................................ 2,675 107,000
PE Corp.-PE Biosystems Group.......................... 1,125 135,352
PECO Energy Co. ...................................... 1,975 68,631
</TABLE>
See accompanying notes to the financial statements.
8
<PAGE>
PROFUNDS Schedule of Portfolio Investments
Bull ProFund December 31, 1999
<TABLE>
<CAPTION>
Common Stocks, continued
Market
Shares Value
----------- ------------
<S> <C> <C>
Penney (J.C.) Co. .................................... 2,750 $ 54,828
Peoples Energy Corp. ................................. 375 12,563
Peoplesoft, Inc.*..................................... 2,650 56,478
PEP Boys-Manny, Moe & Jack............................ 550 5,019
PepsiCo, Inc. ........................................ 15,575 549,018
PerkinElmer, Inc. .................................... 500 20,844
Pfizer, Inc. ......................................... 41,100 1,333,181
PG&E Corp. ........................................... 4,025 82,513
Pharmacia & Upjohn, Inc. ............................. 5,500 247,500
Phelps Dodge Corp. ................................... 850 57,056
Philip Morris Cos., Inc. ............................. 25,050 580,847
Phillips Petroleum Co. ............................... 2,675 125,725
Pinnacle West Capital Corp. .......................... 900 27,506
Pitney Bowes, Inc. ................................... 2,825 136,483
Placer Dome, Inc. .................................... 3,400 36,550
PNC Bank Corp. ....................................... 3,125 139,063
Polaroid Corp. ....................................... 475 8,936
Potlatch Corp. ....................................... 300 13,388
PP&L Resources, Inc. ................................. 1,525 34,884
PPG Industries, Inc. ................................. 1,850 115,741
Praxair, Inc. ........................................ 1,700 85,531
Price (T. Rowe) Associates, Inc. ..................... 1,275 47,095
Procter & Gamble Co. ................................. 14,000 1,533,874
Progressive Corp. .................................... 775 56,672
Providian Financial Corp. ............................ 1,525 138,870
Public Service Enterprise Group, Inc. ................ 2,350 81,809
Pulte Corp. .......................................... 450 10,125
Quaker Oats Co. ...................................... 1,425 93,516
Qualcomm, Inc.*....................................... 7,200 1,269,000
Quintiles Transnational Corp.*........................ 1,225 22,892
Ralston-Ralston Purina Group.......................... 3,425 95,472
Raytheon Co.--Class B................................. 3,600 95,625
Reebok International Ltd.*............................ 600 4,913
Regions Financial Corp. .............................. 2,325 58,416
Reliant Energy, Inc. ................................. 3,150 72,056
Republic New York Corp. .............................. 1,125 81,000
Reynolds Metals Co. .................................. 675 51,722
Rite Aid Corp. ....................................... 2,725 30,486
Rockwell International Corp. ......................... 2,025 96,947
Rohm & Haas Co. ...................................... 2,300 93,581
Rowan Cos., Inc.*..................................... 900 19,519
Royal Dutch Petroleum Co.--ADR........................ 22,700 1,371,931
Russell Corp. ........................................ 350 5,863
Ryder System, Inc. ................................... 675 16,495
Safeco Corp. ......................................... 1,375 34,203
Safeway, Inc.*........................................ 5,450 193,816
Sara Lee Corp. ....................................... 9,725 214,558
SBC Communications, Inc. ............................. 36,500 1,779,374
Schering-Plough Corp. ................................ 15,725 663,398
Schlumberger Ltd. .................................... 5,925 333,281
Schwab (Charles) Corp. ............................... 8,675 332,903
Scientific-Atlanta, Inc. ............................. 825 45,891
Seagate Technology, Inc.*............................. 2,225 103,602
Seagram Co., Ltd. .................................... 4,600 206,713
Sealed Air Corp.*..................................... 900 46,631
Sears, Roebuck & Co. ................................. 4,025 122,511
Sempra Energy......................................... 2,550 44,306
Service Corp. International........................... 2,850 19,772
Shared Medical Systems Corp. ......................... 275 14,008
</TABLE>
<TABLE>
<CAPTION>
Common Stocks, continued
Market
Shares Value
----------- ------------
<S> <C> <C>
Sherwin-Williams Co. ................................. 1,750 $ 36,750
Sigma-Aldrich Corp. .................................. 1,075 32,317
Silicon Graphics, Inc.*............................... 1,925 18,889
SLM Holding Corp. .................................... 1,700 71,825
Snap-On, Inc. ........................................ 625 16,602
Solectron Corp.*...................................... 3,125 297,266
Southern Co. ......................................... 7,225 169,788
SouthTrust Corp. ..................................... 1,775 67,117
Southwest Airlines Co. ............................... 5,350 86,603
Springs Industries, Inc.--Class A..................... 200 7,988
Sprint Corp. (FON Group).............................. 9,225 620,958
Sprint Corp. (PCS Group)*............................. 4,600 471,500
St. Jude Medical, Inc.*............................... 900 27,619
St. Paul Companies, Inc. ............................. 2,425 81,692
Stanley Works......................................... 950 28,619
Staples, Inc.*........................................ 5,000 103,750
State Street Corp. ................................... 1,675 122,380
Summit Bancorp........................................ 1,850 56,656
Sun Microsystems, Inc.*............................... 16,675 1,291,270
Sunoco, Inc. ......................................... 950 22,325
SunTrust Banks, Inc. ................................. 3,400 233,963
SuperValu, Inc. ...................................... 1,475 29,500
Synovus Financial Corp. .............................. 2,950 58,631
Sysco Corp. .......................................... 3,500 138,469
Tandy Corp. .......................................... 2,025 99,605
Tektronix, Inc. ...................................... 500 19,438
Tellabs, Inc.*........................................ 4,300 276,006
Temple-Inland, Inc. .................................. 600 39,563
Tenet Healthcare Corp.*............................... 3,400 79,900
Teradyne, Inc.*....................................... 1,800 118,800
Texaco, Inc. ......................................... 5,875 319,086
Texas Instruments, Inc. .............................. 8,575 830,702
Texas Utilities Co. .................................. 2,925 104,020
Textron, Inc. ........................................ 1,575 120,783
Thermo Electron Corp.*................................ 1,675 25,125
Thomas & Betts Corp. ................................. 600 19,125
Time Warner, Inc. .................................... 13,700 992,394
Times Mirror Co.--Class A............................. 625 41,875
Timken Co. ........................................... 650 13,284
TJX Cos., Inc. ....................................... 3,275 66,933
Torchmark Corp. ...................................... 1,400 40,688
Tosco Corp. .......................................... 1,525 41,461
Toys R US, Inc.*...................................... 2,550 36,497
Transocean Sedco Forex, Inc. ......................... 2,218 74,721
Tribune Co. .......................................... 2,500 137,656
Tricon Global Restaurants, Inc.*...................... 1,625 62,766
TRW, Inc. ............................................ 1,300 67,519
Tupperware Corp. ..................................... 600 10,163
Tyco International Ltd. .............................. 18,350 713,355
U.S. Bancorp.......................................... 7,825 186,333
Unicom Corp. ......................................... 2,325 77,888
Unilever N.V. ........................................ 6,125 333,430
Union Carbide Corp. .................................. 1,400 93,450
Union Pacific Corp. .................................. 2,625 114,516
Union Pacific Resources Group......................... 2,700 34,425
Union Planters Corp. ................................. 1,500 59,156
Unisys Corp.*......................................... 3,300 105,394
United Healthcare Corp. .............................. 1,800 95,625
United Technologies Corp. ............................ 5,125 333,125
</TABLE>
See accompanying notes to the financial statements.
9
<PAGE>
PROFUNDS Schedule of Portfolio Investments
Bull ProFund December 31, 1999
<TABLE>
<CAPTION>
Common Stocks, continued
Market
Shares Value
----------- ------------
<S> <C> <C>
Unocal Corp. ......................................... 2,575 $ 86,423
UnumProvident Corp. .................................. 2,700 86,569
US Airways Group, Inc.*............................... 750 24,047
US West, Inc. ........................................ 5,375 387,000
UST, Inc. ............................................ 1,825 45,967
USX-Marathon Group, Inc. ............................. 3,325 82,086
USX-U.S. Steel Group, Inc. ........................... 925 30,525
VF Corp. ............................................. 1,250 37,499
Viacom, Inc.--Class B*................................ 7,400 447,238
Vulcan Materials Co. ................................. 1,075 42,933
W.R. Grace & Co.*..................................... 775 10,753
Wachovia Corp. ....................................... 2,150 146,200
Wal-Mart Stores, Inc. ................................ 47,300 3,269,612
Walgreen Co. ......................................... 10,600 310,050
Walt Disney Co. ...................................... 21,900 640,575
Warner-Lambert Co. ................................... 9,100 745,631
Washington Mutual, Inc. .............................. 6,075 157,950
Waste Management, Inc. ............................... 6,475 111,289
Watson Pharmaceuticals, Inc.*......................... 1,025 36,708
Wellpoint Health Networks, Inc.*...................... 675 44,508
Wells Fargo Co. ...................................... 17,550 709,677
Wendy's International, Inc. .......................... 1,275 26,297
Westvaco Corp. ....................................... 1,050 34,256
Weyerhaeuser Co. ..................................... 2,500 179,531
Whirlpool Corp. ...................................... 800 52,050
Willamette Industries, Inc. .......................... 1,200 55,725
Williams Cos., Inc. .................................. 4,675 142,880
Winn-Dixie Stores, Inc. .............................. 1,575 37,702
Worthington Industries, Inc. ......................... 975 16,148
Wrigley (WM.) JR Co. ................................. 1,225 101,598
Xerox Corp. .......................................... 7,125 161,649
Xilinx, Inc.*......................................... 3,400 154,594
Yahoo!, Inc.*......................................... 2,825 1,222,342
------------
TOTAL COMMON STOCKS
(Cost $127,496,835).................................. 131,173,698
------------
U.S. Treasury Bills (9.1%)
<CAPTION>
Principal
Amount
-----------
<S> <C> <C>
U.S. Treasury Bill, 4.91%, 03/23/00................... $ 2,954,000 2,920,915
U.S. Treasury Bill, 4.86%, 03/30/00................... 10,639,000 10,506,843
------------
TOTAL U.S. TREASURY BILLS
(Cost $13,432,557)................................... 13,427,758
------------
TOTAL INVESTMENTS
(Cost $140,929,392)(a) (98.3%)....................... 144,601,456
Other assets in excess of liabilities (1.7%).......... 2,486,193
------------
TOTAL NET ASSETS (100.0%)............................. $147,087,649
============
</TABLE>
- -----
Percentages indicated are based on net assets of $147,087,649.
<TABLE>
<CAPTION>
Futures Contracts Purchased
Unrealized
Contracts Gain
---------- ------------
<S> <C> <C>
S&P 500 Future Contract expiring March 2000
(Underlying face amount at value $23,395,050)........ 63 $ 246,310
</TABLE>
- -----
*Non-income producing
(a) Represents cost for financial reporting purposes and differs from cost
basis for federal income tax purposes due to differences in the timing of
recognition of certain gains and losses by $2,014,764. Cost for federal
income tax purposes differs from market value by net unrealized
appreciation of securities as follows:
<TABLE>
<S> <C>
Unrealized appreciation... $2,969,704
Unrealized depreciation... (1,312,404)
----------
Net unrealized
appreciation............. $1,657,300
==========
</TABLE>
ADR--American Depositary Receipt
The Bull ProFund's investment concentration based on net assets, by industry,
as of December 31, 1999, was as follows:
<TABLE>
<S> <C>
Aerospace & Defense....................................................... 1.1%
Airlines.................................................................. 0.2%
Automotive................................................................ 1.0%
Banking................................................................... 4.6%
Biotechnology............................................................. 0.6%
Building & Construction................................................... 0.2%
Business Services......................................................... 0.9%
Chemicals................................................................. 1.1%
Computer Software......................................................... 8.5%
Computers................................................................. 8.8%
Consumer Products......................................................... 2.4%
Containers & Packaging.................................................... 0.1%
Diversified............................................................... 0.1%
Electrical & Electronic................................................... 4.3%
Energy & Utilities........................................................ 6.9%
Environmental Services.................................................... 0.1%
Financial Services........................................................ 4.4%
Food & Beverage........................................................... 3.6%
Health Care............................................................... 2.1%
Home Furnishings.......................................................... 0.1%
Insurance................................................................. 2.7%
Machinery & Equipment..................................................... 5.7%
Media..................................................................... 3.4%
Metals & Mining........................................................... 0.6%
Office Equipment & Supplies............................................... 0.3%
Paper & Forest Products................................................... 0.6%
Pharmaceuticals........................................................... 5.4%
Retail & Wholesale........................................................ 6.2%
Telecommunications........................................................ 11.7%
Textiles & Apparel........................................................ 0.2%
Tobacco................................................................... 0.4%
Toys...................................................................... 0.1%
Transportation............................................................ 0.4%
Travel & Entertainment.................................................... 0.4%
Other..................................................................... 10.8%
</TABLE>
See accompanying notes to the financial statements.
10
<PAGE>
PROFUNDS
Bull ProFund
Statement of Assets and Liabilities
December 31, 1999
<TABLE>
<S> <C>
Assets:
Investments, at value (cost $140,929,392)....................... $144,601,456
Cash............................................................ 2,671,193
Dividends and interest receivable............................... 84,685
Receivable for investments sold................................. 10,163
Receivable for capital shares issued............................ 26,262
Variation margin on futures contracts........................... 106,615
Prepaid expenses................................................ 14,105
Deferred organization costs..................................... 503
------------
Total Assets.................................................... 147,514,982
Liabilities:
Payable for investments purchased............................... 35,086
Payable for capital shares redeemed............................. 191,495
Advisory fees payable........................................... 72,058
Administration fees payable..................................... 4,280
Shareholder servicing fees payable--Service Class............... 29,735
Other accrued expenses.......................................... 94,679
------------
Total Liabilities............................................... 427,333
------------
Net Assets....................................................... $147,087,649
============
Net Assets consist of:
Capital......................................................... $145,033,016
Accumulated undistributed net investment income................. 24,486
Accumulated distributions in excess of net realized gains on
investments and futures contracts.............................. (1,888,227)
Net unrealized appreciation on investments and futures
contracts...................................................... 3,918,374
------------
Total Net Assets................................................. $147,087,649
============
Investor Shares:
Net Assets...................................................... $116,208,049
Shares of Beneficial Interest Outstanding....................... 1,587,457
Net Asset Value (offering and redemption price per share)....... $ 73.20
============
Service Shares:
Net Assets...................................................... $ 30,879,600
Shares of Beneficial Interest Outstanding....................... 428,822
Net Asset Value (offering and redemption price per share)....... $ 72.01
============
</TABLE>
Statement of Operations
For the year ended December 31, 1999
<TABLE>
<S> <C>
Investment Income:
Interest......................................................... $ 1,012,353
Dividends........................................................ 119,941
-----------
Total Income..................................................... 1,132,294
Expenses:
Advisory fees.................................................... 256,852
Management servicing fees........................................ 51,512
Administration fees.............................................. 42,221
Shareholder servicing fees--Service Class........................ 67,494
Fund accounting fees............................................. 12,423
Registration and filing fees..................................... 73,724
Transfer agent fees.............................................. 52,360
Custody fees..................................................... 8,465
Other fees....................................................... 23,959
-----------
Total expenses before waivers.................................... 589,010
Less expenses waived............................................. (44,512)
-----------
Net expenses..................................................... 544,498
-----------
Net Investment Income............................................. 587,796
-----------
Realized and Unrealized Gains on Investments:
Net realized gains on investments and futures contracts.......... 6,369,071
Net change in unrealized appreciation on investments and futures
contracts....................................................... 3,648,135
-----------
Net realized and unrealized gains on investments and futures
contracts....................................................... 10,017,206
-----------
Increase In Net Assets Resulting from Operations.................. $10,605,002
===========
</TABLE>
See accompanying notes to the financial statements.
11
<PAGE>
PROFUNDS
Bull ProFund
Statements of Changes in Net Assets
<TABLE>
<CAPTION>
For the For the
year ended year ended
December 31, 1999 December 31, 1998
----------------- -----------------
<S> <C> <C>
Change in Net Assets:
Operations:
Net investment income..................... $ 587,796 $ 79,042
Net realized gains on investments and
futures contracts........................ 6,369,071 456,309
Net change in unrealized appreciation on
investments and futures contracts........ 3,648,135 269,984
-------------- -------------
Net increase in net assets resulting from
operations............................... 10,605,002 805,335
Distributions to Shareholders from:
Net investment income
Investor shares........................... (38,777) (5,082)
Service shares............................ -- (4)
Net realized gains on investments and
futures contracts
Investor shares........................... (16,650) (6,056)
Service shares............................ (4,521) (568)
-------------- -------------
Net decrease in net assets resulting from
distributions............................ (59,948) (11,710)
Capital Share Transactions:
Proceeds from shares issued............... 1,102,913,666 113,734,720
Dividends reinvested...................... 57,733 11,264
Cost of shares redeemed................... (974,562,273) (106,452,431)
-------------- -------------
Net increase in net assets resulting from
capital share transactions............... 128,409,126 7,293,553
-------------- -------------
Total increase in net assets.............. 138,954,180 8,087,178
Net Assets:
Beginning of year......................... 8,133,469 46,291
-------------- -------------
End of year............................... $ 147,087,649 $ 8,133,469
============== =============
</TABLE>
See accompanying notes to the financial statements.
12
<PAGE>
PROFUNDS
Bull ProFund
Financial Highlights
For a share of beneficial interest outstanding
<TABLE>
<CAPTION>
Investor Class Service Class
--------------------------------------------- --------------------------------------------
For the For the
period from period from
For the year For the year December 2, For the year For the year December 2,
ended ended 1997(a) ended ended 1997(a)
December 31, December 31, to December 31, December 31, December 31, to December 31,
1999 1998 1997 1999 1998 1997
------------ ------------ --------------- ------------ ------------ ---------------
<S> <C> <C> <C> <C> <C> <C> <C>
Net Asset Value,
Beginning of Period.... $ 62.48 $ 49.45 $ 50.00 $ 62.12 $ 49.45 $50.00
------------ ---------- ------- ----------- -------- ------
Net investment income.. 0.34 1.63 (b) 0.10 0.11 1.08 (b) --
Net realized and
unrealized gain/(loss)
on investments and
futures contracts..... 10.41 11.49 (0.65) 9.79 11.64 (0.55)
------------ ---------- ------- ----------- -------- ------
Total income/(loss)
from investment
operations............ 10.75 13.12 (0.55) 9.90 12.72 (0.55)
------------ ---------- ------- ----------- -------- ------
Distribution to
Shareholders from:
Net investment income.. (0.02) (0.04) -- -- -- (c) --
Net realized gains on
investments and
futures contracts..... (0.01) (0.05) -- (0.01) (0.05) --
------------ ---------- ------- ----------- -------- ------
Total distributions.... (0.03) (0.09) -- (0.01) (0.05) --
------------ ---------- ------- ----------- -------- ------
Net Asset Value, End of
Period................. $ 73.20 $ 62.48 $ 49.45 $ 72.01 $ 62.12 $49.45
============ ========== ======= =========== ======== ======
Total Return............ 17.18% 26.57% (1.10)%(d) 15.97% 25.68% (1.10)%(d)
Ratios/Supplemental
Data:
Net assets, end of
year................... $116,208,049 $7,543,922 $46,281 $30,879,600 $589,547 $ 10
Ratio of expenses to
average net assets..... 1.40% 1.63% 1.33%(e) 2.35% 2.67% 1.33%(e)
Ratio of net investment
income to average net
assets................. 1.96% 2.84% 2.97%(e) 0.70% 1.89% 0.00%(e)
Ratio of expenses to
average net assets*.... 1.53% 2.40% 423.48%(e) 2.48% 3.30% 424.48%(e)
Portfolio turnover(f)... 1288% -- -- 1288% -- --
</TABLE>
- -----
* During the period, certain fees were voluntarily reduced. If such voluntary
fee reductions had not occurred, the ratio would have been as indicated.
(a) Commencement of operations.
(b) Per share net investment income has been calculated using the daily average
shares method.
(c) Distribution per share was less than $0.005.
(d) Not annualized.
(e) Annualized.
(f) Portfolio turnover is calculated on the basis of the fund as a whole
without distinguishing between the classes of shares issued.
13
<PAGE>
The UltraBull ProFund
The UltraBull ProFund's investment objective is to provide daily investment
returns that correspond to 200% of the performance of the S&P 500 Index. For
the year ended December 31, 1999, this benchmark gained 240.02 points, which
the Fund's performance tracked with a statistical correlation of over .99. As
a result, for the twelve months, the Fund (Investor Shares) produced a total
return of 29.56%* versus a return of 19.53% for the S&P 500.
[GRAPH]
* Past performance is not predictive of future results. The investment return
and NAV will fluctuate so that the investor's shares, when redeemed, may be
worth more or less than the original cost.
The performance of the UltraBull ProFund is measured against the S&P 500
Index, an unmanaged index generally representative of the performance of the
U.S. stock market as a whole. The index does not reflect the reinvestment of
dividends or the deduction of expenses associated with a mutual fund, such as
investment management and accounting fees. The Fund's performance reflects the
deduction of these value-added services.
The above information is not covered by the Report of Independent Accountants.
14
<PAGE>
PROFUNDS Schedule of Portfolio Investments
UltraBull ProFund December 31, 1999
<TABLE>
<CAPTION>
Common Stocks (83.6%)
Market
Shares Value
------ ------------
<S> <C> <C>
3COM Corp.*................................................ 4,428 $ 208,116
Abbott Laboratories........................................ 23,400 849,713
Adaptec, Inc.*............................................. 1,548 77,207
ADC Telecommunications, Inc.*.............................. 2,268 164,572
Adobe Systems, Inc......................................... 1,836 123,471
Advanced Micro Devices, Inc.*.............................. 2,232 64,589
AES Corp.*................................................. 3,168 236,808
Aetna, Inc................................................. 2,304 128,592
AFLAC, Inc................................................. 4,068 191,959
Air Products & Chemicals, Inc. ............................ 3,564 119,617
Alberto-Culver Co.......................................... 864 22,302
Albertson's, Inc. ......................................... 6,444 207,819
Alcan Aluminium Ltd. ...................................... 3,348 137,896
Alcoa, Inc. ............................................... 5,688 472,103
Allegheny Technologies, Inc. .............................. 1,459 32,736
Allergan, Inc.............................................. 2,016 100,296
Allied Waste Industries, Inc.*............................. 2,808 24,746
Allstate Corp. ............................................ 12,204 292,895
Alltel Corp................................................ 4,788 395,908
Alza Corp.--Class A*....................................... 1,548 53,600
Amerada Hess Corp. ........................................ 1,548 87,849
Ameren Corp................................................ 2,088 68,382
America Online, Inc.* ..................................... 33,660 2,539,226
American Electric Power, Inc. ............................. 2,952 94,833
American Express Co. ...................................... 6,804 1,131,165
American General Corp. .................................... 3,744 284,075
American Greetings Corp.--Class A.......................... 972 22,964
American Home Products Corp. .............................. 19,980 787,961
American International Group, Inc.......................... 23,688 2,561,264
Amgen, Inc.*............................................... 15,768 947,066
AMR Corp.*................................................. 2,268 151,955
AmSouth Bancorp............................................ 5,940 114,716
Anadarko Petroleum Corp. .................................. 1,944 66,339
Analog Devices*............................................ 2,628 244,404
Andrew Corp.*.............................................. 1,296 24,543
Anheuser-Busch Cos., Inc................................... 7,164 507,748
AON Corp................................................... 3,888 155,520
Apache Corp. .............................................. 1,728 63,828
Apple Computer, Inc.*...................................... 2,484 255,386
Applied Materials, Inc.*................................... 5,688 720,598
Archer-Daniels-Midland Co. ................................ 9,520 116,025
Armstrong World Industries, Inc............................ 612 20,426
Ashland, Inc............................................... 1,116 36,758
Associates First Capital Corp. ............................ 10,980 301,264
AT&T Corp.................................................. 48,564 2,464,622
Atlantic Richfield Co. .................................... 4,932 426,617
Autodesk, Inc.............................................. 936 31,590
Automatic Data Processing, Inc............................. 9,504 512,027
AutoZone, Inc.*............................................ 2,232 72,122
Avery Dennison Corp. ...................................... 1,728 125,928
Avon Products, Inc......................................... 3,672 121,176
Baker Hughes, Inc. ........................................ 5,112 107,672
Ball Corp.................................................. 468 18,428
Bank of America Corp....................................... 26,388 1,324,347
Bank of New York Co., Inc. ................................ 11,268 450,720
Bank One Corp.............................................. 17,640 565,583
Bard (C.R.) Inc. .......................................... 792 41,976
Barrick Gold Corp.......................................... 5,940 105,064
Bausch & Lomb, Inc. ....................................... 900 61,594
</TABLE>
<TABLE>
<CAPTION>
Common Stocks, continued
Market
Shares Value
------ ------------
<S> <C> <C>
Baxter International, Inc. ................................ 4,500 $ 282,656
BB&T Corp.................................................. 5,040 137,970
Bear Stearns Cos., Inc. ................................... 1,802 77,036
Becton, Dickinson & Co. ................................... 3,816 102,078
Bed Bath & Beyond, Inc.*................................... 2,124 73,809
Bell Atlantic Corp. ....................................... 24,264 1,493,753
BellSouth Corp. ........................................... 28,908 1,353,256
Bemis Co., Inc............................................. 792 27,621
Best Buy Co., Inc.*........................................ 3,096 155,381
Bestfoods.................................................. 4,284 225,178
Bethlehem Steel Corp.*..................................... 2,016 16,884
Biomet, Inc................................................ 1,728 69,120
Black & Decker Corp........................................ 1,332 69,597
Block H & R Inc. .......................................... 1,476 64,575
BMC Software, Inc.*........................................ 3,708 296,408
Boeing Co.................................................. 14,616 607,478
Boise Cascade Corp. ....................................... 864 34,992
Boston Scientific Corp.*................................... 6,336 138,600
Briggs & Stratton Corp. ................................... 360 19,305
Bristol-Myers Squibb Co. .................................. 30,636 1,966,448
Brown-Forman Corp. ........................................ 1,044 59,769
Brunswick Corp. ........................................... 1,404 31,239
Burlington Northern Santa Fe Corp.......................... 7,092 171,981
Burlington Resources, Inc.................................. 3,240 107,123
Cabletron Systems*......................................... 2,808 73,008
Campbell Soup Co........................................... 6,552 253,481
Capital One Financial Corp. ............................... 2,988 143,984
Cardinal Health, Inc....................................... 4,248 203,373
Carnival Corp.--Class A.................................... 9,432 450,967
Carolina Power & Light Co. ................................ 2,448 74,511
Caterpillar, Inc........................................... 5,400 254,138
CBS Corp.*................................................. 11,665 745,831
Cendant Corp.*............................................. 10,836 287,831
Centex Corp................................................ 900 22,219
Central & South West Corp.................................. 3,240 64,800
CenturyTel, Inc. .......................................... 2,124 100,625
Ceridian Corp.*............................................ 2,196 47,351
Champion International Corp. .............................. 1,440 89,190
Chase Manhattan Corp. ..................................... 12,600 978,862
Chevron Corp. ............................................. 10,044 870,061
Chubb Corp. ............................................... 2,700 152,044
CIGNA Corp. ............................................... 2,844 229,120
Cincinnati Financial Corp.................................. 2,520 78,593
Cinergy Corp. ............................................. 2,412 58,190
Circuit City Stores, Inc. ................................. 3,096 139,514
Cisco Systems, Inc.*....................................... 50,256 5,383,673
Citigroup, Inc. ........................................... 51,552 2,864,357
Citrix Systems, Inc.*...................................... 1,368 168,264
Clear Channel Communications, Inc.*........................ 5,220 465,885
Clorox Co. ................................................ 3,600 181,350
CMS Energy Corp. .......................................... 1,764 55,015
Coastal Corp. ............................................. 3,312 117,369
Coca-Cola Co. ............................................. 38,952 2,268,953
Coca-Cola Enterprises, Inc. ............................... 6,588 132,584
Colgate-Palmolive Co. ..................................... 9,072 589,680
Columbia Energy Group...................................... 1,260 79,695
Columbia HCA Healthcare Corp. ............................. 8,640 253,260
Comcast Corp.--Special Class A............................. 11,124 558,981
Comerica, Inc. ............................................ 2,412 112,610
</TABLE>
See accompanying notes to the financial statements.
15
<PAGE>
PROFUNDS Schedule of Portfolio Investments
UltraBull ProFund December 31, 1999
<TABLE>
<CAPTION>
Common Stocks, continued
Market
Shares Value
------ ------------
<S> <C> <C>
Compaq Computer Corp....................................... 26,532 $ 718,022
Computer Associates International, Inc..................... 8,316 581,600
Computer Sciences Corp.*................................... 2,556 241,862
Compuware Corp.*........................................... 5,472 203,832
Comverse Technology, Inc.*................................. 1,080 156,330
ConAgra, Inc. ............................................. 7,668 173,009
Conoco, Inc.--Class B...................................... 9,540 237,308
Conseco, Inc. ............................................. 5,040 90,090
Consolidated Edison, Inc. ................................. 3,348 115,506
Consolidated Natural Gas Co. .............................. 1,476 95,848
Consolidated Stores Corp.*................................. 1,692 27,495
Constellation Energy Group, Inc. .......................... 2,232 64,728
Cooper Industries, Inc. ................................... 1,440 58,230
Cooper Tire & Rubber Co. .................................. 1,188 18,488
Coors (Adolph) Co.--Class B................................ 576 30,240
Corning, Inc .............................................. 3,816 492,025
Costco Wholesale Corp.*.................................... 3,384 308,790
Countrywide Credit Industries, Inc. ....................... 1,728 43,632
Crane Co. ................................................. 1,008 20,034
Crown Cork & Seal Co., Inc. ............................... 1,872 41,886
CSX Corp. ................................................. 3,348 105,044
Cummins Engine Co. ........................................ 648 31,307
CVS Corp. ................................................. 6,012 240,104
Dana Corp. ................................................ 2,520 75,443
Danaher Corp. ............................................. 2,196 105,957
Darden Restaurants, Inc. .................................. 2,016 36,540
Dayton-Hudson Corp. ....................................... 6,804 499,668
Deere & Co. ............................................... 3,564 154,589
Dell Computer Corp.*....................................... 38,592 1,968,192
Delphi Automotive Systems Corp. ........................... 8,568 134,946
Delta Air Lines, Inc. ..................................... 2,052 102,215
Deluxe Corp. .............................................. 1,116 30,620
Dillards, Inc.--Class A.................................... 1,620 32,704
Dollar General Corp. ...................................... 4,032 91,728
Dominion Resources, Inc. .................................. 2,916 114,453
Donnelley (R.R.) & Sons Co. ............................... 1,944 48,236
Dover Corp. ............................................... 3,096 140,481
Dow Chemical Co. .......................................... 3,348 447,376
Dow Jones & Co., Inc. ..................................... 1,368 93,024
DTE Energy Co. ............................................ 2,232 70,029
Du Pont (E.I.) de Nemours.................................. 15,840 1,043,459
Duke Energy Corp. ......................................... 5,580 279,698
Dun & Bradstreet Corp. .................................... 2,484 73,278
Eastern Enterprises........................................ 396 22,745
Eastman Chemical Co. ...................................... 1,188 56,653
Eastman Kodak Co. ......................................... 4,968 329,130
Eaton Corp. ............................................... 1,116 81,050
Ecolab, Inc. .............................................. 1,980 77,468
Edison International....................................... 5,292 138,584
El Paso Energy Corp. ...................................... 3,492 135,533
Electronic Data Systems Corp. ............................. 7,308 489,179
Eli Lilly & Co. ........................................... 16,596 1,103,634
EMC Corp.*................................................. 15,554 1,699,275
Emerson Electric Co. ...................................... 6,660 382,118
Engelhard Corp. ........................................... 1,944 36,693
Enron Corp. ............................................... 11,016 488,834
Entergy Corp. ............................................. 3,780 97,335
Equifax, Inc. ............................................. 2,160 50,895
Exxon Mobil Corp. ......................................... 52,699 4,245,562
</TABLE>
<TABLE>
<CAPTION>
Common Stocks, continued
Market
Shares Value
------ ------------
<S> <C> <C>
Fannie Mae................................................. 15,804 $ 986,762
FDX Corp.*................................................. 4,608 188,639
Federated Department Stores, Inc.*......................... 3,240 163,823
Fifth Third Bancorp........................................ 4,716 346,037
First Data Corp. .......................................... 6,516 321,320
First Union Corp. ......................................... 15,048 493,763
Firstar Corp. ............................................. 15,084 318,650
FirstEnergy Corp........................................... 3,528 80,042
Fleet Boston Financial Corp. .............................. 14,186 493,850
Fleetwood Enterprises, Inc. ............................... 504 10,395
Florida Progress Corp. .................................... 1,512 63,977
Fluor Corp. ............................................... 1,152 52,848
FMC Corp.*................................................. 468 26,822
Ford Motor Co. ............................................ 18,504 988,807
Fort James Corp. .......................................... 3,312 90,666
Fortune Brands, Inc. ...................................... 2,556 84,508
Foster Wheeler Corp. ...................................... 576 5,112
FPL Group, Inc. ........................................... 2,772 118,676
Franklin Resources, Inc. .................................. 3,816 122,351
Freddie Mac................................................ 10,620 499,804
Freeport-McMoran Copper & Gold, Inc.--Class B*............. 2,664 56,277
Gannett Co., Inc. ......................................... 4,284 349,414
Gap, Inc. ................................................. 13,032 599,471
Gateway, Inc.*............................................. 4,860 350,224
General Dynamics Corp. .................................... 3,060 161,415
General Electric Co. ...................................... 50,436 7,804,970
General Instruments Corp.*................................. 2,700 229,500
General Mills, Inc. ....................................... 4,572 163,449
General Motors Corp. ...................................... 9,792 711,756
Genuine Parts Co. ......................................... 2,700 66,994
Georgia Pacific Corp. ..................................... 2,592 131,544
Gillette Co. .............................................. 16,416 676,134
Global Crossing Ltd.*...................................... 11,700 585,000
Golden West Financial Corp. ............................... 2,810 94,135
Goodrich (B.F.) Co. ....................................... 1,692 46,530
Goodyear Tire & Rubber Co. ................................ 2,412 67,988
GPU, Inc. ................................................. 1,872 56,043
Grainger (W.W.) Inc. ...................................... 1,404 67,129
Great Atlantic & Pacific Tea Co. .......................... 612 17,060
Great Lakes Chemical Corp. ................................ 864 32,994
GTE Corp. ................................................. 15,156 1,069,445
Guidant Corp.*............................................. 4,716 221,652
Halliburton Co. ........................................... 6,804 273,861
Harcourt General, Inc. .................................... 1,080 43,470
Harrah's Entertainment, Inc.*.............................. 1,980 52,346
Hartford Financial Services Group, Inc. ................... 3,420 162,023
Hasbro, Inc. .............................................. 2,880 54,900
Healthsouth Corp.*......................................... 5,760 30,960
Heinz (H.J.) Co. .......................................... 5,472 217,854
Hercules, Inc. ............................................ 1,620 45,158
Hershey Foods Corp. ....................................... 2,088 99,180
Hewlett-Packard Co. ....................................... 15,480 1,763,753
Hilton Hotels Corp. ....................................... 5,724 55,094
Home Depot, Inc. .......................................... 36,519 2,503,833
Homestake Mining Co. ...................................... 3,888 30,375
Honeywell International, Inc. ............................. 11,992 691,795
Household International, Inc. ............................. 7,272 270,882
Humana, Inc.*.............................................. 2,520 20,633
</TABLE>
See accompanying notes to the financial statements.
16
<PAGE>
PROFUNDS Schedule of Portfolio Investments
UltraBull ProFund December 31, 1999
<TABLE>
<CAPTION>
Common Stocks, continued
Market
Shares Value
------ ------------
<S> <C> <C>
Huntington Bancshares, Inc. ............................... 3,528 $ 84,231
IKON Office Solutions, Inc. ............................... 2,232 15,206
Illinois Tool Works, Inc. ................................. 4,536 306,464
IMS Health, Inc. .......................................... 4,608 125,280
Inco Ltd.*................................................. 2,916 68,526
Ingersoll-Rand Co. ........................................ 2,484 136,775
Intel Corp. ............................................... 51,336 4,225,594
International Business Machines Corp. ..................... 27,504 2,970,432
International Flavors & Fragrances, Inc. .................. 1,620 61,155
International Paper Co. ................................... 6,300 355,557
Interpublic Group Cos., Inc. .............................. 4,284 247,133
ITT Industries, Inc. ...................................... 1,368 45,743
J.P. Morgan & Co. ......................................... 2,664 337,329
Jefferson-Pilot Corp. ..................................... 1,620 110,565
Johnson & Johnson.......................................... 21,384 1,991,384
Johnson Controls, Inc. .................................... 1,296 73,710
Jostens, Inc. ............................................. 504 12,254
K Mart Corp.*.............................................. 7,488 75,348
Kansas City Southern Industries, Inc. ..................... 1,692 126,266
Kaufman & Broad Home Corp. ................................ 720 17,415
Kellogg Co. ............................................... 6,156 189,682
Kerr-McGee Corp. .......................................... 1,296 80,352
KeyCorp ................................................... 6,912 152,928
Kimberly-Clark Corp. ...................................... 8,316 542,619
KLA-Tencor Corp.*.......................................... 1,368 152,361
Knight Ridder, Inc. ....................................... 1,296 77,112
Kohls Corp.*............................................... 2,520 181,913
Kroger Co.*................................................ 12,708 239,864
Leggett & Platt, Inc. ..................................... 3,024 64,827
Lexmark International Group, Inc.*......................... 1,944 175,932
Limited, Inc. ............................................. 3,276 141,892
Lincoln National Corp. .................................... 3,024 120,960
Liz Claiborne, Inc. ....................................... 900 33,863
Lockheed Martin Corp. ..................................... 6,048 132,300
Loews Corp. ............................................... 1,620 98,314
Longs Drug Stores, Inc. ................................... 612 15,797
Louisiana-Pacific Corp. ................................... 1,620 23,085
Lowe's Cos., Inc. ......................................... 5,832 348,462
LSI Logic Corp.*........................................... 2,304 155,520
Lucent Technologies, Inc. ................................. 47,988 3,590,101
Mallinckrodt, Inc. ........................................ 1,080 34,358
Manor Care, Inc.*.......................................... 1,584 25,344
Marriott International, Inc.--Class A...................... 3,780 119,306
Marsh & McLennan Cos., Inc. ............................... 4,068 389,256
Masco Corp. ............................................... 6,876 174,478
Mattel, Inc. .............................................. 6,372 83,633
May Department Stores Co. ................................. 5,112 164,862
Maytag Corp. .............................................. 1,296 62,208
MBIA, Inc. ................................................ 1,548 81,754
MBNA Corp. ................................................ 12,276 334,521
McDermott International, Inc. ............................. 900 8,156
McDonald's Corp. .......................................... 20,664 833,017
McGraw-Hill Cos., Inc. .................................... 3,024 186,354
MCI Worldcom, Inc.*........................................ 43,364 2,300,976
McKesson HBOC, Inc. ....................................... 4,320 97,470
Mead Corp. ................................................ 1,548 67,241
MediaOne Group, Inc.*...................................... 9,396 721,730
Medtronic, Inc. ........................................... 19,968 727,584
Mellon Financial Corp. .................................... 7,812 266,096
</TABLE>
<TABLE>
<CAPTION>
Common Stocks, continued
Market
Shares Value
------ ------------
<S> <C> <C>
Merck & Co., Inc. ......................................... 36,000 $ 2,414,250
Meredith Corp. ............................................ 792 33,017
Merrill Lynch & Co., Inc. ................................. 5,688 474,948
MGIC Investment Corp. ..................................... 1,620 97,504
Micron Technology, Inc.*................................... 4,104 319,086
Microsoft Corp.*........................................... 79,596 9,292,832
Milacron, Inc. ............................................ 576 8,856
Millipore Corp. ........................................... 684 26,420
Minnesota Mining & Mfg. Co. ............................... 6,156 602,518
Mirage Resorts, Inc.*...................................... 2,988 45,754
Molex, Inc. ............................................... 2,412 136,730
Monsanto Co. .............................................. 9,792 348,840
Morgan Stanley, Dean Witter & Co. ......................... 8,568 1,223,082
Motorola, Inc. ............................................ 9,396 1,383,561
Nabisco Group Holdings Corp. .............................. 5,004 53,168
NACCO Industries, Inc.--Class A............................ 108 6,001
National City Corp. ....................................... 9,468 224,273
National Semiconductor Corp.*.............................. 2,628 112,511
National Service Industries, Inc. ......................... 612 18,054
Navistar International Corp.*.............................. 972 46,049
Network Appliance, Inc.*................................... 2,340 194,366
New Century Energies, Inc. ................................ 1,764 53,582
New York Times Co.--Class A................................ 2,592 127,332
Newell Rubbermaid, Inc. ................................... 4,356 126,324
Newmont Mining Corp. ...................................... 2,556 62,622
Nextel Communications, Inc.--Class A*...................... 5,832 601,425
Niagara Mohawk Holdings, Inc.*............................. 2,916 40,642
Nicor, Inc. ............................................... 720 23,400
Nike, Inc.--Class B........................................ 4,356 215,894
Nordstrom, Inc. ........................................... 2,124 55,622
Norfolk Southern Corp. .................................... 5,760 118,080
Nortel Networks Corp. ..................................... 20,916 2,112,516
Northern States Power Co. ................................. 2,376 46,332
Northern Trust Corp. ...................................... 3,384 179,352
Northrop Grumman Corp. .................................... 1,080 58,388
Novell, Inc.*.............................................. 5,148 204,955
Nucor Corp. ............................................... 1,332 73,010
Occidental Petroleum Corp. ................................ 5,688 123,003
Office Depot, Inc.*........................................ 5,040 55,125
Old Kent Financial Corp. .................................. 1,800 63,675
Omnicom Group ............................................. 2,736 273,600
Oneok, Inc. ............................................... 468 11,759
Oracle Corp.*.............................................. 22,536 2,525,441
Owens-Corning Fiberglass Corp. ............................ 864 16,686
Owens-Illinois, Inc.*...................................... 2,304 57,744
PACCAR, Inc. .............................................. 1,188 52,643
Pactiv Corp.*.............................................. 2,592 27,540
Paine Webber Group, Inc. .................................. 2,196 85,232
Pall Corp. ................................................ 1,908 41,141
Parametric Technology Corp.*............................... 4,176 113,013
Parker Hannifin Corp. ..................................... 1,728 88,668
Paychex, Inc. ............................................. 3,852 154,080
PE Corp.-PE Biosystems Group............................... 1,620 194,906
PECO Energy Co. ........................................... 2,844 98,829
Penney (J.C.) Co. ......................................... 3,960 78,953
Peoples Energy Corp. ...................................... 540 18,090
Peoplesoft, Inc.*.......................................... 3,816 81,329
PEP Boys-Manny, Moe & Jack................................. 792 7,227
PepsiCo, Inc. ............................................. 22,428 790,586
</TABLE>
See accompanying notes to the financial statements.
17
<PAGE>
PROFUNDS Schedule of Portfolio Investments
UltraBull ProFund December 31, 1999
<TABLE>
<CAPTION>
Common Stocks, continued
Market
Shares Value
------ ------------
<S> <C> <C>
PerkinElmer, Inc. ......................................... 720 $ 30,015
Pfizer, Inc. .............................................. 59,184 1,919,781
PG&E Corp. ................................................ 5,796 118,818
Pharmacia & Upjohn, Inc. .................................. 7,920 356,400
Phelps Dodge Corp. ........................................ 1,199 80,483
Philip Morris Cos., Inc. .................................. 36,072 836,419
Phillips Petroleum Co. .................................... 3,852 181,044
Pinnacle West Capital Corp. ............................... 1,296 39,609
Pitney Bowes, Inc. ........................................ 4,068 196,535
Placer Dome, Inc. ......................................... 4,896 52,632
PNC Bank Corp. ............................................ 4,500 200,250
Polaroid Corp. ............................................ 684 12,868
Potlatch Corp. ............................................ 432 19,278
PP&L Resources, Inc. ...................................... 2,196 50,234
PPG Industries, Inc. ...................................... 2,664 166,667
Praxair, Inc. ............................................. 2,448 123,165
Price (T. Rowe) Associates, Inc. .......................... 1,836 67,817
Procter & Gamble Co. ...................................... 20,160 2,208,779
Progressive Corp. ......................................... 1,116 81,608
Providian Financial Corp. ................................. 2,196 199,973
Public Service Enterprise Group, Inc. ..................... 3,384 117,806
Pulte Corp. ............................................... 648 14,580
Quaker Oats Co. ........................................... 2,052 134,663
Qualcomm, Inc.*............................................ 10,368 1,827,360
Quintiles Transnational Corp.*............................. 1,764 32,965
Ralston-Ralston Purina Group............................... 4,932 137,480
Raytheon Co.--Class B...................................... 5,184 137,700
Reebok International Ltd.*................................. 864 7,074
Regions Financial Corp. ................................... 3,348 84,119
Reliant Energy, Inc. ...................................... 4,536 103,761
Republic New York Corp .................................... 1,755 126,360
Reynolds Metals Co. ....................................... 972 74,480
Rite Aid Corp. ............................................ 3,924 43,900
Rockwell International Corp. .............................. 2,916 139,604
Rohm & Haas Co. ........................................... 3,312 134,757
Rowan Cos., Inc.*.......................................... 1,296 28,107
Royal Dutch Petroleum Co.--ADR............................. 32,688 1,975,580
Russell Corp. ............................................. 504 8,442
Ryder System, Inc. ........................................ 972 23,753
Safeco Corp. .............................................. 1,980 49,253
Safeway, Inc.*............................................. 7,848 279,095
Sara Lee Corp. ............................................ 14,004 308,962
SBC Communications, Inc. .................................. 52,562 2,562,397
Schering-Plough Corp. ..................................... 22,644 955,294
Schlumberger Ltd. ......................................... 8,532 479,924
Schwab (Charles) Corp. .................................... 12,492 479,381
Scientific-Atlanta, Inc. .................................. 1,188 66,083
Seagate Technology, Inc.*.................................. 3,204 149,186
Seagram Co., Ltd. ......................................... 6,624 297,666
Sealed Air Corp.*.......................................... 1,296 67,149
Sears, Roebuck & Co. ...................................... 5,796 176,416
Sempra Energy.............................................. 3,672 63,801
Service Corp. International................................ 4,104 28,472
Shared Medical Systems Corp. .............................. 396 20,171
Sherwin-Williams Co. ...................................... 2,520 52,920
Sigma-Aldrich Corp. ....................................... 1,548 46,537
Silicon Graphics, Inc.*.................................... 2,772 27,200
SLM Holding Corp. ......................................... 2,448 103,428
Snap-On, Inc. ............................................. 900 23,906
</TABLE>
<TABLE>
<CAPTION>
Common Stocks, continued
Market
Shares Value
------ ------------
<S> <C> <C>
Solectron Corp.*........................................... 4,500 $ 428,063
Southern Co. .............................................. 10,404 244,494
SouthTrust Corp. .......................................... 2,556 96,649
Southwest Airlines Co. .................................... 7,704 124,709
Springs Industries, Inc.--Class A.......................... 288 11,502
Sprint Corp. (FON Group)................................... 13,284 894,179
Sprint Corp. (PCS Group)*.................................. 6,624 678,960
St. Jude Medical, Inc.*.................................... 1,296 39,771
St. Paul Companies, Inc. .................................. 3,492 117,637
Stanley Works.............................................. 1,368 41,211
Staples, Inc.*............................................. 7,200 149,400
State Street Corp. ........................................ 2,412 176,227
Summit Bancorp............................................. 2,664 81,585
Sun Microsystems, Inc.*.................................... 24,012 1,859,429
Sunoco, Inc. .............................................. 1,368 32,148
SunTrust Banks, Inc. ...................................... 4,896 336,906
SuperValu, Inc. ........................................... 2,124 42,480
Synovus Financial Corp. ................................... 4,248 84,429
Sysco Corp. ............................................... 5,040 199,395
Tandy Corp. ............................................... 2,916 143,431
Tektronix, Inc. ........................................... 720 27,990
Tellabs, Inc.*............................................. 6,192 397,449
Temple-Inland, Inc. ....................................... 864 56,970
Tenet Healthcare Corp.*.................................... 4,896 115,056
Teradyne, Inc.*............................................ 2,592 171,072
Texaco, Inc. .............................................. 8,460 459,483
Texas Instruments, Inc. ................................... 12,348 1,196,212
Texas Utilities Co. ....................................... 4,212 149,789
Textron, Inc. ............................................. 2,268 173,927
Thermo Electron Corp.*..................................... 2,412 36,180
Thomas & Betts Corp. ...................................... 864 27,540
Time Warner, Inc. ......................................... 19,728 1,429,047
Times Mirror Co.--Class A.................................. 900 60,300
Timken Co. ................................................ 936 19,130
TJX Cos., Inc. ............................................ 4,716 96,383
Torchmark Corp. ........................................... 2,016 58,590
Tosco Corp. ............................................... 2,196 59,704
Toys R US, Inc.*........................................... 3,672 52,556
Transocean Sedco Forex, Inc. .............................. 3,297 111,082
Tribune Co. ............................................... 3,600 198,225
Tricon Global Restaurants, Inc.*........................... 2,340 90,383
TRW, Inc. ................................................. 1,872 97,227
Tupperware Corp. .......................................... 864 14,634
Tyco International Ltd. ................................... 26,424 1,027,232
U.S. Bancorp............................................... 11,268 268,319
Unicom Corp. .............................................. 3,348 112,158
Unilever N.V. ............................................. 8,820 480,138
Union Carbide Corp. ....................................... 2,016 134,568
Union Pacific Corp. ....................................... 3,780 164,903
Union Pacific Resources Group.............................. 3,888 49,572
Union Planters Corp. ...................................... 2,160 85,185
Unisys Corp.*.............................................. 4,752 151,767
United Healthcare Corp. ................................... 2,592 137,700
United Technologies Corp. ................................. 7,380 479,700
Unocal Corp. .............................................. 3,708 124,450
UnumProvident Corp. ....................................... 3,888 124,659
US Airways Group, Inc.*.................................... 1,080 34,628
US West, Inc. ............................................. 7,740 557,280
UST, Inc. ................................................. 2,628 66,193
</TABLE>
See accompanying notes to the financial statements.
18
<PAGE>
PROFUNDS Schedule of Portfolio Investments
UltraBull ProFund December 31, 1999
<TABLE>
<CAPTION>
Common Stocks, continued
Market
Shares Value
--------- ------------
<S> <C> <C>
USX-Marathon Group, Inc. ............................... 4,788 $ 118,204
USX-U.S. Steel Group, Inc. ............................. 1,332 43,956
VF Corp. ............................................... 1,800 54,000
Viacom, Inc.--Class B*.................................. 10,656 644,022
Vulcan Materials Co. ................................... 1,548 61,823
W.R. Grace & Co.*....................................... 1,116 15,485
Wachovia Corp. ......................................... 3,096 210,528
Wal-Mart Stores, Inc. .................................. 68,112 4,708,241
Walgreen Co. ........................................... 15,264 446,471
Walt Disney Co. ........................................ 31,536 922,428
Warner-Lambert Co. ..................................... 13,104 1,073,709
Washington Mutual, Inc. ................................ 8,748 227,448
Waste Management, Inc. ................................. 9,324 160,256
Watson Pharmaceuticals, Inc.*........................... 1,476 52,859
Wellpoint Health Networks, Inc.*........................ 972 64,091
Wells Fargo Co. ........................................ 25,272 1,021,936
Wendy's International, Inc. ............................ 1,836 37,868
Westvaco Corp. ......................................... 1,512 49,329
Weyerhaeuser Co. ....................................... 3,600 258,525
Whirlpool Corp. ........................................ 1,152 74,952
Willamette Industries, Inc. ............................ 1,728 80,244
Williams Cos., Inc. .................................... 6,732 205,747
Winn-Dixie Stores, Inc. ................................ 2,268 54,290
Worthington Industries, Inc. ........................... 1,404 23,254
Wrigley (WM.) JR Co. ................................... 1,764 146,302
Xerox Corp. ............................................ 10,260 232,774
Xilinx, Inc.*........................................... 4,896 222,615
Yahoo!, Inc.*........................................... 4,068 1,760,173
------------
TOTAL COMMON STOCKS
(Cost $182,380,794).................................... 189,061,943
------------
Options Purchased (9.5%)
<CAPTION>
Contracts
---------
<S> <C> <C>
S&P 500 Put Option expiring January 2000 @ 800.......... 1,000 7,500
S&P 500 Call Option expiring January 2000 @ 800......... 125 21,418,750
------------
TOTAL OPTIONS PURCHASED
(Cost $19,862,188)..................................... 21,426,250
------------
</TABLE>
<TABLE>
<CAPTION>
U.S. Treasury Bills (11.0%)
Principal Market
Amount Value
----------- ------------
<S> <C> <C>
U.S. Treasury Bill, 3.87%, 01/13/00................. $ 1,116,000 $ 1,114,441
U.S. Treasury Bill, 4.91%, 03/09/00................. 14,850,000 14,711,420
U.S. Treasury Bill, 4.91%, 03/23/00................. 7,063,000 6,983,894
U.S. Treasury Bill, 4.86%, 03/30/00................. 2,111,000 2,084,760
------------
TOTAL U.S. TREASURY BILLS
(Cost $24,885,425)................................. 24,894,515
------------
TOTAL INVESTMENTS
(Cost $227,128,407)(a) (104.1%).................... 235,382,708
Liabilities in excess of other
assets (-4.1%)..................................... (9,175,978)
------------
TOTAL NET ASSETS (100.0%)........................... $226,206,730
============
</TABLE>
- -----
Percentages indicated are based on net assets of $226,206,730.
Futures Contracts Purchased
<TABLE>
<CAPTION>
Unrealized
Contracts Gain
----------- ------------
<S> <C> <C>
S&P 500 Future Contract expiring March 2000
(Underlying face amount at value $213,526,250)..... 575 $ 5,999,375
</TABLE>
- -----
* Non-income producing
(a) Represents cost for financial reporting purposes and differs from cost
basis for federal income tax purposes due to differences in the timing of
recognition of certain gains and losses by $1,560,047 for wash sales and
$1,564,062 for options. Cost for federal income tax purposes differs from
market value by net unrealized appreciation of securities as follows:
<TABLE>
<S> <C>
Unrealized appreciation.. $ 9,934,403
Unrealized depreciation.. (4,804,211)
-----------
Net unrealized apprecia-
tion.................... $ 5,130,192
===========
</TABLE>
ADR--American Depositary Receipt
See accompanying notes to the financial statements.
19
<PAGE>
PROFUNDS Schedule of Portfolio Investments
UltraBull ProFund December 31, 1999
The UltraBull ProFund's investment concentration based on net assets, by
industry, as of December 31, 1999, was as follows:
<TABLE>
<S> <C>
Aerospace & Defense....................................................... 1.0%
Airlines.................................................................. 0.2%
Automotive................................................................ 1.0%
Banking................................................................... 4.3%
Biotechnology............................................................. 0.6%
Building & Construction................................................... 0.2%
Business Services......................................................... 0.9%
Chemicals................................................................. 1.0%
Computer Software......................................................... 7.9%
Computers................................................................. 8.2%
Consumer Products......................................................... 2.2%
Containers & Packaging.................................................... 0.1%
Diversified............................................................... 0.1%
Electrical & Electronic................................................... 4.0%
Energy & Utilities........................................................ 6.5%
Environmental Services.................................................... 0.1%
Financial Services........................................................ 4.2%
Food & Beverage........................................................... 3.3%
Health Care............................................................... 2.0%
Home Furnishings.......................................................... 0.1%
Insurance................................................................. 2.5%
Machinery & Equipment..................................................... 5.3%
Media..................................................................... 3.2%
Metals & Mining........................................................... 0.6%
Office Equipment & Supplies............................................... 0.3%
Paper & Forest Products................................................... 0.6%
Pharmaceuticals........................................................... 5.1%
Retail & Wholesale........................................................ 5.8%
Telecommunications........................................................ 11.0%
Textiles & Apparel........................................................ 0.1%
Tobacco................................................................... 0.4%
Toys...................................................................... 0.1%
Transportation............................................................ 0.4%
Travel & Entertainment.................................................... 0.3%
Other..................................................................... 16.4%
</TABLE>
See accompanying notes to the financial statements.
20
<PAGE>
PROFUNDS
UltraBull ProFund
Statement of Assets and Liabilities
December 31, 1999
<TABLE>
<S> <C>
Assets:
Investments, at value (cost $227,128,407)....................... $235,382,708
Dividends and interest receivable............................... 167,316
Receivable for investments sold................................. 15,678,138
Receivable for capital shares issued............................ 1,977
Variation margin on futures contracts........................... 1,083,975
Prepaid expenses................................................ 73,220
Deferred organization costs..................................... 7,715
------------
Total Assets.................................................... 252,395,049
Liabilities:
Payable to custodian............................................ 1,493,942
Payable for investments purchased............................... 58,444
Payable for capital shares redeemed............................. 24,260,205
Advisory fees payable........................................... 153,075
Management servicing fees payable............................... 30,615
Administration fees payable..................................... 15,385
Shareholder servicing fees payable--Service Class............... 86,807
Other accrued expenses.......................................... 89,846
------------
Total Liabilities............................................... 26,188,319
------------
Net Assets....................................................... $226,206,730
============
Net Assets consist of:
Capital......................................................... $220,365,254
Accumulated undistributed net investment income................. 173,076
Accumulated distributions in excess of net realized gains on
investments and futures contracts.............................. (8,585,276)
Net unrealized appreciation on investments and futures
contracts...................................................... 14,253,676
------------
Total Net Assets................................................. $226,206,730
============
Investor Shares:
Net Assets...................................................... $155,987,050
Shares of Beneficial Interest Outstanding....................... 6,590,182
Net Asset Value (offering and redemption price per share)....... $ 23.67
============
Service Shares:
Net Assets...................................................... $ 70,219,680
Shares of Beneficial Interest Outstanding....................... 3,017,394
Net Asset Value (offering and redemption price per share)....... $ 23.27
============
</TABLE>
Statement of Operations
For the year ended December 31, 1999
<TABLE>
<S> <C>
Investment Income:
Interest......................................................... $ 4,597,614
Dividends........................................................ 348,775
-----------
Total Income..................................................... 4,946,389
Expenses:
Advisory fees.................................................... 1,126,462
Management servicing fees........................................ 225,294
Administration fees.............................................. 218,932
Shareholder servicing fees--Service Class........................ 320,281
Transfer agent fees.............................................. 196,544
Registration and filing fees..................................... 128,704
Fund accounting fees............................................. 52,435
Custody fees..................................................... 23,554
Other fees....................................................... 70,745
-----------
Total expenses before waivers.................................... 2,362,951
Less expenses waived............................................. (23,756)
-----------
Net expenses..................................................... 2,339,195
-----------
Net Investment Income............................................. 2,607,194
-----------
Realized and Unrealized Gains on Investments:
Net realized gains on investments and futures contracts.......... 6,669,872
Net change in unrealized appreciation on investments and futures
contracts....................................................... 5,931,016
-----------
Net realized and unrealized gains on investments and futures
contracts....................................................... 12,600,888
-----------
Increase In Net Assets Resulting from Operations.................. $15,208,082
===========
</TABLE>
See accompanying notes to the financial statements.
21
<PAGE>
PROFUNDS
UltraBull ProFund
Statements of Changes in Net Assets
<TABLE>
<CAPTION>
For the For the
year ended year ended
December 31, 1999 December 31, 1998
----------------- -----------------
<S> <C> <C>
Change in Net Assets:
Operations:
Net investment income..................... $ 2,607,194 $ 766,107
Net realized gains on investments and
futures contracts........................ 6,669,872 3,734,412
Net change in unrealized appreciation on
investments and futures contracts........ 5,931,016 8,276,070
--------------- -------------
Net increase in net assets resulting from
operations............................... 15,208,082 12,776,589
Distributions to Shareholders from:
Net investment income
Investor shares........................... (204,707) (73,735)
Service shares............................ -- (191)
Net realized gains on investments and
futures contracts
Investor shares........................... -- (18,756)
Service shares............................ -- (2,100)
In excess of net realized gains on
investments and futures contracts
Investor shares........................... (647,991) --
Service shares............................ (303,424) --
--------------- -------------
Net decrease in net assets resulting from
distributions............................ (1,156,122) (94,782)
Capital Share Transactions:
Proceeds from shares issued............... 2,661,938,799 625,192,237
Dividends reinvested...................... 1,112,789 68,468
Cost of shares redeemed................... (2,552,742,699) (544,534,668)
--------------- -------------
Net increase in net assets resulting from
capital share transactions............... 110,308,889 80,726,037
--------------- -------------
Total increase in net assets.............. 124,360,849 93,407,844
Net Assets:
Beginning of year......................... 101,845,881 8,438,037
--------------- -------------
End of year............................... $ 226,206,730 $ 101,845,881
=============== =============
</TABLE>
See accompanying notes to the financial statements.
22
<PAGE>
PROFUNDS
UltraBull ProFund
Financial Highlights
For a share of beneficial interest outstanding
<TABLE>
<CAPTION>
Investor Class Service Class
------------------------------------------ -------------------------------------------
For the For the
period from period from
For the year For the year November 28, For the year For the year November 28,
ended ended 1997(a) to ended ended 1997(a) to
December 31, December 31, December 31, December 31, December 31, December 31,
1999 1998 1997 1999 1998 1997
------------ ------------ ------------ ------------ ------------ -------------
<S> <C> <C> <C> <C> <C> <C>
Net Asset Value,
Beginning of Period**.. $ 18.36 $ 12.86 $ 12.50 $ 18.19 $ 12.86 $ 12.50
------------ ----------- ---------- ----------- ----------- ----------
Net investment income.. 0.35 0.39(b) 0.01 0.08 0.24(b) 0.01
Net realized and
unrealized gain/(loss)
on investments and
futures contracts..... 5.08 5.13 0.35 5.09 5.10 0.35
------------ ----------- ---------- ----------- ----------- ----------
Total income/(loss)
from investment
operations............ 5.43 5.52 0.36 5.17 5.34 0.36
------------ ----------- ---------- ----------- ----------- ----------
Distribution to
Shareholders from:
Net investment income.. (0.03) (0.01) -- -- --(c) --
Net realized gains on
investments and
futures contracts..... -- (0.01) -- -- (0.01) --
In excess of net
realized gains on
investments and
futures contracts..... (0.09) -- -- (0.09) -- --
------------ ----------- ---------- ----------- ----------- ----------
Total distributions.... (0.12) (0.02) -- (0.09) (0.01) --
------------ ----------- ---------- ----------- ----------- ----------
Net Asset Value, End of
Period................. $ 23.67 $ 18.36 $ 12.86 $ 23.27 $ 18.19 $ 12.86
============ =========== ========== =========== =========== ==========
Total Return............ 29.56% 42.95% 2.90%(d) 28.42% 41.48% 2.90%(d)
Ratios/Supplemental
Data:
Net assets, end of
year.................. $155,987,050 $90,854,397 $6,043,740 $70,219,680 $10,991,484 $2,394,297
Ratio of expenses to
average net assets.... 1.34% 1.50% 1.33%(e) 2.34% 2.39% 1.33%(e)
Ratio of net investment
income to average net
assets................ 1.99% 2.43% 2.26%(e) 0.79% 1.53% 1.69%(e)
Ratio of expenses to
average net assets*... 1.36% 1.70% 12.69%(e) 2.36% 2.84% 13.69%(e)
Portfolio turnover(f).. 764% -- -- 764% -- --
</TABLE>
- -----
* During the period, certain fees were voluntarily reduced. If such voluntary
fee reductions had not occurred, the ratio would have been as indicated.
** Adjusted for 4:1 stock split on July 16, 1999.
(a) Commencement of operations.
(b) Per share net investment income has been calculated using the daily
average shares method.
(c) Distribution per share was less than $0.005.
(d) Not annualized.
(e) Annualized.
(f) Portfolio turnover is calculated on the basis of the fund as a whole
without distinguishing between the classes of shares issued.
23
<PAGE>
The UltraOTC ProFund
The investment objective of the UltraOTC ProFund is to provide daily
investment results that correspond to 200% of the performance of the NASDAQ
100 Index. The NASDAQ 100 includes 100 of the largest non-financial domestic
companies listed on the NASDAQ National Market tier of the NASDAQ Stock
Market. For the year ended December 31, 1999, this benchmark gained 1,871.82
points, which the Fund's performance tracked with a statistical correlation of
over .99. As a result, for the twelve months, the Fund (Investor Shares)
produced a total return of 233.25%* versus a return of 101.95% for its
benchmark.
[GRAPH]
* Past performance is not predictive of future results. The investment return
and NAV will fluctuate so that the investor's shares, when redeemed, may be
worth more or less than the original cost.
The performance of the UltraOTC ProFund is measured against the NASDAQ 100
Index, is an unmanaged index generally representative of the performance of
the NASDAQ Stock Market as a whole. The index does not reflect the
reinvestment of dividends or the deduction of expenses associated with a
mutual fund, such as investment management and accounting fees. The Fund's
performance reflects the deduction of these value-added services.
The above information is not covered by the Report of Independent Accountants.
24
<PAGE>
PROFUNDS Schedule of Portfolio Investments
UltraOTC ProFund December 31, 1999
<TABLE>
<CAPTION>
Common Stocks (86.5%)
Market
Shares Value
------- -----------
<S> <C> <C>
3COM Corp.*................................................ 105,148 $ 4,941,956
Adaptec, Inc.*............................................. 50,828 2,535,047
ADC Telecommunications, Inc.*.............................. 113,490 8,235,118
Adelphia Communications Corp.--Class A*.................... 73,720 4,837,875
Adobe Systems, Inc......................................... 71,198 4,788,066
Altera Corp.*.............................................. 171,108 8,480,540
Amazon.Com, Inc.*.......................................... 137,352 10,455,920
American Power Conversion Corp.*........................... 152,484 4,021,766
Amgen, Inc.*............................................... 290,418 17,443,231
Apollo Group, Inc.--Class A*............................... 41,322 829,023
Apple Computer, Inc.*...................................... 136,576 14,041,720
Applied Materials, Inc.*................................... 119,504 15,139,662
Applied Micro Circuits Corp.*.............................. 37,442 4,764,495
At Home Corp.--Class A*.................................... 167,228 7,169,901
Atmel Corp.*............................................... 89,822 2,655,363
Bed Bath & Beyond, Inc.*................................... 113,296 3,937,036
Biogen, Inc.*.............................................. 112,520 9,507,940
Biomet, Inc................................................ 90,016 3,600,640
BMC Software, Inc.*........................................ 111,744 8,932,536
BroadVision, Inc.*......................................... 51,216 8,709,921
Chiron Corp.*.............................................. 155,200 6,576,600
Ciena Corp.*............................................... 99,134 5,700,205
Cintas Corp................................................ 79,928 4,246,175
Cisco Systems, Inc.*....................................... 720,322 77,164,493
Citrix Systems, Inc.*...................................... 64,796 7,969,908
CMGI, Inc.*................................................ 79,152 21,915,210
CNET, Inc.*................................................ 50,052 2,840,451
Comcast Corp.--Special Class A............................. 213,594 10,733,098
Compuware Corp.*........................................... 133,860 4,986,285
Comverse Technology, Inc.*................................. 44,426 6,430,664
Concord EFS, Inc.*......................................... 140,456 3,616,742
Conexant Systems, Inc.*.................................... 131,726 8,743,313
Costco Wholesale Corp.*.................................... 70,616 6,443,710
Dell Computer Corp.*....................................... 573,658 29,256,558
Dollar Tree Stores, Inc.*.................................. 34,144 1,653,850
eBay, Inc.*................................................ 58,976 7,383,058
Echostar Communications Corp.--Class A*.................... 68,094 6,639,165
Electronic Arts, Inc.*..................................... 38,024 3,194,016
Ericsson (LM) Telephone--ADR............................... 150,350 9,876,116
Fiserv, Inc.*.............................................. 90,986 3,485,901
Gemstar International Group Ltd.*.......................... 116,400 8,293,500
Genzyme Corp.*............................................. 63,826 2,872,170
Global Crossing Ltd.*...................................... 510,996 25,549,800
I2 Technologies, Inc.*..................................... 50,440 9,835,800
Immunex Corp.*............................................. 137,158 14,993,084
Intel Corp................................................. 715,084 58,860,351
Intuit, Inc.*.............................................. 151,320 9,069,743
JDS Uniphase Corp.*........................................ 171,108 27,601,859
KLA-Tencor Corp.*.......................................... 66,348 7,389,509
Legato Systems, Inc.*...................................... 56,648 3,898,091
Level 3 Communications, Inc.*.............................. 144,724 11,849,278
Linear Technology Corp..................................... 124,936 8,940,733
Lycos, Inc.*............................................... 72,556 5,772,737
Maxim Integrated Products, Inc.*........................... 233,576 11,021,868
MCI Worldcom, Inc.*........................................ 623,610 33,090,279
McLeodUSA, Inc.--Class A*.................................. 75,854 4,465,904
</TABLE>
<TABLE>
<CAPTION>
Common Stocks, continued
Market
Shares Value
--------- --------------
<S> <C> <C>
Medimmune, Inc.*...................................... 41,322 $ 6,854,287
Metromedia Fiber Network, Inc.*....................... 130,756 6,268,116
Microchip Technology, Inc.*........................... 25,802 1,765,824
Microsoft Corp.*...................................... 1,085,042 126,678,653
Miller Herman, Inc.................................... 35,308 812,084
Molex, Inc............................................ 46,172 2,617,375
Network Appliance, Inc.*.............................. 94,284 7,831,465
Network Associates, Inc.*............................. 84,972 2,267,690
Network Solutions, Inc.*.............................. 22,310 4,853,819
Nextel Communications, Inc.--Class A*................. 273,734 28,228,819
NEXTLINK Communications, Inc.--Class A*............... 50,440 4,189,673
Northwest Airlines Corp.--Class A*.................... 38,606 858,984
Novell, Inc.*......................................... 242,694 9,662,255
NTL, Inc.*............................................ 66,735 8,325,191
Oracle Corp.*......................................... 362,392 40,610,553
PACCAR, Inc........................................... 53,738 2,381,265
PacifiCare Health Systems, Inc.*...................... 22,116 1,172,148
PanAmSat Corp.*....................................... 121,444 7,210,738
Parametric Technology Corp.*.......................... 220,384 5,964,142
Paychex, Inc.......................................... 141,232 5,649,280
Peoplesoft, Inc.*..................................... 207,774 4,428,183
PMC--Sierra, Inc.*.................................... 45,784 7,339,748
QLogic Corp.*......................................... 21,922 3,504,780
Qualcomm, Inc.*....................................... 485,776 85,618,019
Quintiles Transnational Corp.*........................ 96,806 1,809,062
RealNetworks, Inc.*................................... 42,486 5,148,772
RF Micro Devices, Inc.*............................... 53,738 3,677,694
Sanmina Corp.*........................................ 37,830 3,778,271
SDL, Inc.*............................................ 21,922 4,778,996
Siebel Systems, Inc.*................................. 134,636 11,309,424
Sigma-Aldrich Corp.................................... 63,826 1,918,769
Smurfit-Stone Container Corp.*........................ 130,174 3,189,263
Staples, Inc.*........................................ 186,822 3,876,557
Starbucks Corp.*...................................... 151,126 3,664,806
Sun Microsystems, Inc.*............................... 417,488 32,329,227
Synopsys, Inc.*....................................... 50,246 3,353,921
Tellabs, Inc.*........................................ 140,068 8,990,615
USA Networks, Inc.*................................... 93,702 5,177,036
Veritas Software Corp.*............................... 160,826 23,018,221
VISX, Inc.*........................................... 44,620 2,309,085
Vitesse Semiconductor Corp.*.......................... 101,462 5,320,414
Voicestream Wireless Corp.*........................... 61,886 8,807,151
Xilinx, Inc.*......................................... 258,408 11,749,488
Yahoo!, Inc.*......................................... 77,212 33,408,667
--------------
TOTAL COMMON STOCKS
(Cost $933,199,559).................................. 1,170,096,510
--------------
Options Purchased (7.5%)
<CAPTION>
Contracts
---------
<S> <C> <C>
NASDAQ Call Option expiring January 2000 @ 1500....... 450 100,890,000
NASDAQ Put Option expiring January 2000 @ 1500........ 700 10,500
--------------
TOTAL OPTIONS PURCHASED
(Cost $79,100,000)................................... 100,900,500
--------------
</TABLE>
See accompanying notes to the financial statements.
25
<PAGE>
PROFUNDS Schedule of Portfolio Investments
UltraOTC ProFund December 31, 1999
<TABLE>
<CAPTION>
U.S. Treasury Bills (5.9%)
Principal Market
Amount Value
----------- --------------
<S> <C> <C>
U.S. Treasury Bill, 4.91%, 03/23/00................. $14,297,000 $ 14,136,874
U.S. Treasury Bill, 4.86%, 03/30/00................. 28,719,000 28,362,253
U.S. Treasury Bill, 5.13%, 04/13/00................. 3,439,000 3,388,732
U.S. Treasury Bill, 5.30%, 05/11/00................. 34,000,000 33,351,857
--------------
TOTAL U.S. TREASURY BILLS
(Cost $79,235,105)................................. 79,239,716
--------------
TOTAL INVESTMENTS
(Cost $1,091,534,664)(a) (99.9%)................... 1,350,236,726
Other assets in excess of liabilities (0.1%)........ 821,140
--------------
TOTAL NET ASSETS (100.0%)........................... $1,351,057,866
==============
</TABLE>
- -----
Percentages indicated are based on net assets of $1,351,057,866.
<TABLE>
<CAPTION>
Futures Contracts Purchased
Unrealized
Contracts Gain
----------- --------------
<S> <C> <C>
NASDAQ Future Contract expiring March 2000
(Underlying face amount at value $1,335,145,600).. 3,568 $ 135,365,060
</TABLE>
- -----
* Non-income producing
(a) Represents cost for financial reporting purposes and differs from cost
basis for federal income tax purposes due to differences in the timing of
recognition of certain gains and losses by $30,291,445 for wash sales and
$21,800,500 for options. Cost for federal income tax purposes differs from
market value by net unrealized appreciation of securities as follows:
<TABLE>
<S> <C>
Unrealized appreciation.. $214,805,234
Unrealized depreciation.. (8,195,117)
------------
Net unrealized apprecia-
tion.................... $206,610,117
============
</TABLE>
ADR--American Depositary Receipt
The UltraOTC ProFund's investment concentration based on net assets, by
industry, as of December 31, 1999, was as follows:
<TABLE>
<S> <C>
Airlines.................................................................. 0.1%
Automotive................................................................ 0.2%
Biotechnology............................................................. 3.8%
Business Services......................................................... 1.1%
Chemicals................................................................. 0.1%
Computer Software......................................................... 25.4%
Computers................................................................. 14.4%
Containers & Packaging.................................................... 0.2%
Electrical & Electronic................................................... 12.6%
Health Care............................................................... 0.5%
Home Furnishings.......................................................... 0.6%
Media..................................................................... 1.5%
Office Equipment & Services............................................... 0.1%
Pharmaceuticals........................................................... 0.5%
Retail & Wholesale........................................................ 2.8%
Telecommunications........................................................ 22.3%
Textiles & Apparel........................................................ 0.3%
Other..................................................................... 13.5%
</TABLE>
See accompanying notes to the financial statements.
26
<PAGE>
PROFUNDS
UltraOTC ProFund
Statement of Assets and Liabilities
December 31, 1999
<TABLE>
<S> <C>
Assets:
Investments, at value (cost $1,091,534,664)................... $1,350,236,726
Cash.......................................................... 11,081,737
Receivable for capital shares issued.......................... 29,461,196
Variation margin on futures contracts......................... 3,546,480
Dividends and interest receivable............................. 80,942
Prepaid expenses.............................................. 115,049
Deferred organization costs................................... 23,789
--------------
Total Assets.................................................. 1,394,545,919
Liabilities:
Payable for investments purchased............................. 42,222,893
Payable for capital shares redeemed........................... 1,800
Advisory fees payable......................................... 662,634
Management servicing fees payable............................. 132,527
Administration fees payable................................... 53,391
Shareholder servicing fees payable--Service Class............. 170,515
Other accrued expenses........................................ 244,293
--------------
Total Liabilities............................................. 43,488,053
--------------
Net Assets..................................................... $1,351,057,866
==============
Net Assets consist of:
Capital....................................................... $1,074,100,592
Accumulated distributions in excess of net realized gains on
investments and futures contracts............................ (117,109,848)
Net unrealized appreciation on investments and futures
contracts.................................................... 394,067,122
--------------
Total Net Assets............................................... $1,351,057,866
==============
Investor Shares:
Net Assets.................................................... $1,216,220,142
Shares of Beneficial Interest Outstanding..................... 12,300,570
Net Asset Value (offering and redemption price per share)..... $ 98.88
==============
Service Shares:
Net Assets.................................................... $ 134,837,724
Shares of Beneficial Interest Outstanding..................... 1,384,301
Net Asset Value (offering and redemption price per share)..... $ 97.40
==============
</TABLE>
Statement of Operations
For the year ended December 31, 1999
<TABLE>
<S> <C>
Investment Income:
Interest........................................................ $ 3,494,665
Dividends....................................................... 240,248
------------
Total Income.................................................... 3,734,913
Expenses:
Advisory fees................................................... 3,446,266
Management servicing fees....................................... 689,257
Administration fees............................................. 691,106
Shareholder servicing fees--Service Class....................... 596,659
Transfer agent fees............................................. 592,050
Registration and filing fees.................................... 244,736
Custody fees.................................................... 134,935
Fund accounting fees............................................ 123,686
Other fees...................................................... 205,459
------------
Total expenses before waivers................................... 6,724,154
Less expenses waived............................................ (105,031)
------------
Net expenses.................................................... 6,619,123
------------
Net Investment Loss.............................................. (2,884,210)
------------
Realized and Unrealized Gains on Investments:
Net realized gains on investments and futures contracts......... 389,559,533
Net change in unrealized appreciation on investments and futures
contracts...................................................... 325,343,217
------------
Net realized and unrealized gains on investments and futures
contracts...................................................... 714,902,750
------------
Increase in Net Assets Resulting from Operations................. $712,018,540
============
</TABLE>
See accompanying notes to the financial statements.
27
<PAGE>
PROFUNDS
UltraOTC ProFund
Statements of Changes in Net Assets
<TABLE>
<CAPTION>
For the For the
year ended year ended
December 31, 1999 December 31, 1998
----------------- -----------------
<S> <C> <C>
Change in Net Assets:
Operations:
Net investment income (loss).............. $ (2,884,210) $ 520,125
Net realized gains on investments and
futures contracts........................ 389,559,533 14,500,678
Net change in unrealized appreciation on
investments and futures contracts........ 325,343,217 68,743,665
-------------- --------------
Net increase in net assets resulting from
operations............................... 712,018,540 83,764,468
Distributions to shareholders from:
Net investment income
Investor shares........................... (1,514) (37,904)
Service shares............................ -- (158)
Net realized gains on investments and
futures contracts
Investor shares........................... (5,470,542) --
Service shares............................ (630,297) --
-------------- --------------
Net decrease in net assets resulting from
distributions............................ (6,102,353) (38,062)
Capital Share Transactions:
Proceeds from shares issued............... 4,414,789,699 1,198,375,948
Dividends reinvested...................... 5,769,144 26,453
Cost of shares redeemed................... (4,046,826,304) (1,011,639,835)
-------------- --------------
Net increase in net assets resulting from
capital share transactions............... 373,732,539 186,762,566
-------------- --------------
Total increase in net assets.............. 1,079,648,726 270,488,972
Net Assets:
Beginning of year......................... 271,409,140 920,168
-------------- --------------
End of year............................... $1,351,057,866 $ 271,409,140
============== ==============
</TABLE>
See accompanying notes to the financial statements.
28
<PAGE>
PROFUNDS
UltraOTC ProFund
Financial Highlights
For a share of beneficial interest outstanding
<TABLE>
<CAPTION>
Investor Class
-----------------------------------------------------------
For the year For the year For the period from
ended ended December 2, 1997(a)
December 31, 1999 December 31, 1998 to December 31, 1997
----------------- ----------------- --------------------
<S> <C> <C> <C>
Net Asset Value,
Beginning of
Period**........ $ 29.82 $ 10.45 $ 12.50
-------------- ------------ --------
Net investment
income/(loss).. (0.16) 0.20(b) 0.08
Net realized and
unrealized
gain/(loss) on
investments and
futures
contracts...... 69.68 19.17 (2.13)
-------------- ------------ --------
Total
income/(loss)
from investment
operations..... 69.52 19.37 (2.05)
-------------- ------------ --------
Distribution to
Shareholders
from:
Net investment
income......... --(c) --(c) --
Net realized
gains on
investments and
futures
contracts...... (0.46) -- --
-------------- ------------ --------
Total
distributions.. (0.46) -- --
-------------- ------------ --------
Net Asset Value,
End of Period... $ 98.88 $ 29.82 $ 10.45
============== ============ ========
Total Return..... 233.25% 185.34% (16.40)%(d)
Ratios/Supplemental
Data:
Net assets, end
of year......... $1,216,220,142 $239,017,203 $256,184
Ratio of expenses
to average net
assets.......... 1.31% 1.47% 1.07%(e)
Ratio of net
investment
income to
average net
assets.......... (0.50)% 1.05% 2.73%(e)
Ratio of expenses
to average net
assets*......... 1.33% 1.67% 21.74%(e)
Portfolio
Turnover(f)..... 670% 156% --
</TABLE>
For a share of beneficial interest outstanding
<TABLE>
<CAPTION>
Service Class
--------------------------------------------------------
For the year For the year For the period from
ended ended December 2, 1997(a)
December 31, 1999 December 31, 1998 to December 31, 1997
----------------- ----------------- --------------------
<S> <C> <C> <C>
Net Asset Value,
Beginning of
Period**........ $ 29.68 $ 10.45 $ 12.50
----------------- ----------------- --------------------
Net investment
income/(loss).. (0.64) 0.10(b) --
Net realized and
unrealized
gain/(loss) on
investments and
futures
contracts...... 68.82 19.13 (2.05)
----------------- ----------------- --------------------
Total
income/(loss)
from investment
operations..... 68.18 19.23 (2.05)
----------------- ----------------- --------------------
Distribution to
Shareholders
from:
Net investment
income......... -- --(c) --
Net realized
gains on
investments and
futures
contracts...... (0.46) -- --
----------------- ----------------- --------------------
Total
distributions.. (0.46) -- --
----------------- ----------------- --------------------
Net Asset Value,
End of Period... $ 97.40 $ 29.68 $ 10.45
================= ================= ====================
Total Return..... 229.73% 183.98% (16.40)%(d)
Ratios/Supplemental
Data:
Net assets, end
of year......... $134,837,724 $32,391,937 $663,984
Ratio of expenses
to average net
assets.......... 2.30% 2.38% 1.75%(e)
Ratio of net
investment
income to
average net
assets.......... (1.49)% 0.07% (0.06)%(e)
Ratio of expenses
to average net
assets*......... 2.32% 2.61% 23.42%(e)
Portfolio
Turnover(f)..... 670% 156% --
</TABLE>
- -----
* During the period, certain fees were voluntarily reduced and/or reimbursed.
If such voluntary fee reductions and/or reimbursements had not occurred, the
ratio would have been as indicated.
** Adjusted for 4:1 stock split on July 16, 1999.
(a) Commencement of operations.
(b) Per share net investment income has been calculated using the daily
average shares method.
(c) Distribution per share was less than $0.005.
(d) Not annualized.
(e) Annualized.
(f) Portfolio turnover is calculated on the basis of the fund as a whole
without distinguishing between the classes of shares issued.
29
<PAGE>
The UltraEurope ProFund
Introduced on March 15, 1999, the investment objective of the UltraEurope
ProFund is to provide daily investment results that correspond to 200% of the
performance of the ProFunds European Index (PEI). Since its launch, the Fund's
results tracked the performance of the PEI, which produced a return of 22.88%
with a statistical correlation of .99. As a result, over the course of the
period, the Fund (Investor Shares) generated a total return of 36.63%* for the
period.
[GRAFT]
* Past performance is not predictive of future results. The investment return
and NAV will fluctuate so that the investor's shares, when redeemed, may be
worth more or less than the original cost.
The performance of the UltraEurope ProFund is measured against the ProFunds
European Index (PEI). The PEI was created by the Advisor and is equal to a
blended average of the performance of three European equity indices: the
Financial Times Stock Exchange 100 (FTSE-100), the Deutsche Aktienindex (DAX)
and the CAC-40. This index is unmanaged and does not reflect the reinvestment
of dividends or the deduction of expenses associated with a mutual fund, such
as investment management and accounting fees. The Fund's performance reflects
the deduction of these value-added services.
The above information is not covered by the Report of Independent Accountants.
30
<PAGE>
PROFUNDS Schedule of Portfolio Investments
UltraEurope ProFund December 31, 1999
<TABLE>
<CAPTION>
Common Stocks (53.5%)
Market
Shares Value
--------- ------------
<S> <C> <C>
Adidas-Salomon AG....................................... 564 $ 42,017
Allianz AG.............................................. 3,060 1,024,493
BASF AG................................................. 7,860 403,398
Bayer AG................................................ 9,144 431,716
Bayerische Motoren Werke AG............................. 8,388 260,652
Commerzbank AG.......................................... 6,552 241,036
DaimlerChrysler AG...................................... 13,044 1,006,799
Degussa-Huels AG........................................ 1,956 78,428
Deutsche Bank AG........................................ 7,680 644,666
Deutsche Lufthansa AG................................... 4,980 118,309
Deutsche Telekom AG..................................... 30,948 2,202,582
Dresdner Bank AG........................................ 6,840 377,103
Fresenius Medical Care AG............................... 1,008 87,805
Henkel KGaA............................................. 1,812 120,242
HypoVereinsbank......................................... 4,980 339,453
Karstadt Quelle AG...................................... 1,092 43,719
Linde AG................................................ 1,500 82,548
MAN AG.................................................. 1,932 71,365
Mannesmann AG........................................... 6,300 1,528,259
Metro AG................................................ 4,152 222,249
Muenchener Rueckversicherungs-Gesellschaft AG........... 2,220 566,346
Preussag AG............................................. 2,424 137,503
RWE AG.................................................. 6,936 269,763
SAP AG.................................................. 1,320 792,578
Schering AG............................................. 864 104,665
Siemens AG.............................................. 7,512 956,314
Thyssen Krupp AG........................................ 6,252 188,950
Veba AG................................................. 6,444 312,961
Viag AG................................................. 8,952 163,317
Volkswagen AG........................................... 5,352 299,197
------------
TOTAL COMMON STOCKS (Cost $11,794,575).................. 13,118,433
------------
Options Purchased (3.6%)
<CAPTION>
Contracts
---------
<S> <C> <C>
CAC 40 Put Option expiring January 2000 @ 3700.......... 2,500 3,057
DAX Put Option expiring January 2000 @ 4000............. 200 611
FTSE 100 Call Option expiring February 2000 @ 4300...... 20 850,713
FTSE 100 Put Option expiring February 2000 @ 4300....... 200 20,215
------------
TOTAL OPTIONS PURCHASED (Cost $817,473)................. 874,596
------------
</TABLE>
<TABLE>
<CAPTION>
U.S. Treasury Bills (37.3%)
Principal Market
Amount Value
---------- -----------
<S> <C> <C>
U.S. Treasury Bill, 4.51%, 01/13/00..................... $3,500,000 $ 3,494,311
U.S. Treasury Bill, 5.10%, 03/09/00..................... 3,600,000 3,565,139
U.S. Treasury Bill, 4.86%, 03/30/00..................... 316,000 312,166
U.S. Treasury Bill, 5.13%, 04/13/00..................... 1,800,000 1,773,383
-----------
TOTAL U.S. TREASURY BILLS
(Cost $9,144,301)...................................... 9,144,999
-----------
TOTAL INVESTMENTS
(Cost $21,756,349)(a) (94.4%).......................... 23,138,028
Other assets in excess of liabilities (5.6%)............ 1,382,323
-----------
TOTAL NET ASSETS (100.0%)............................... $24,520,351
===========
</TABLE>
- -----
Percentages indicated are based on net assets of $24,520,351.
<TABLE>
<CAPTION>
Futures Contracts Purchased
Unrealized
Contracts Gain
--------- ----------
<S> <C> <C>
CAC 40 Future Contract expiring January 2000 (Underlying
face amount at value $15,816,554)....................... 263 $378,304
DAX 30 Future Contract expiring March 2000 (Underlying
face amount at value $3,336,313)........................ 19 $250,537
FTSE 100 Future Contract expiring March 2000 (Underlying
face amount at value $13,765,509)....................... 122 $458,472
</TABLE>
- -----
(a) Represents cost for financial reporting purposes and differs from cost
basis for federal income tax purposes due to differences in the timing of
recognition of certain gains and losses by $112,695 for wash sales and
$57,123 for options. Cost for federal income tax purposes differs from
market value by net unrealized appreciation of securities as follows:
<TABLE>
<S> <C>
Unrealized appreciation....................................... $1,213,125
Unrealized depreciation....................................... (1,264)
----------
Net unrealized appreciation................................... $1,211,861
==========
</TABLE>
The UltraEurope ProFund's investment concentration based on net assets, by
industry, as of December 31, 1999, was as follows:
<TABLE>
<S> <C>
Airlines.................................................................. 0.5%
Automotive................................................................ 6.4%
Banking................................................................... 6.5%
Building & Construction................................................... 0.3%
Chemicals................................................................. 4.2%
Computer Software......................................................... 3.2%
Diversified............................................................... 0.6%
Energy & Utilities........................................................ 1.1%
Health Care............................................................... 0.4%
Insurance................................................................. 6.5%
Machinery & Equipment..................................................... 13.1%
Pharmaceuticals........................................................... 0.4%
Retail & Wholesale........................................................ 1.3%
Telecommunications........................................................ 9.0%
Other..................................................................... 46.5%
</TABLE>
See accompanying notes to the financial statements.
31
<PAGE>
PROFUNDS
UltraEurope ProFund
Statement of Assets and Liabilities
December 31, 1999
<TABLE>
<S> <C>
Assets:
Investments, at value (cost $21,756,349).......................... $23,138,028
Foreign currency, at value (cost $2,636,217)...................... 2,605,224
Variation margin on futures contracts............................. 607,787
Prepaid expenses.................................................. 15,247
-----------
Total Assets...................................................... 26,366,286
Liabilities:
Payable to custodian.............................................. 1,813,604
Administration fees payable....................................... 6,370
Shareholder servicing fees payable--Service Class................. 19,465
Other accrued expenses............................................ 6,496
-----------
Total Liabilities................................................. 1,845,935
-----------
Net Assets......................................................... $24,520,351
===========
Net Assets consist of:
Capital........................................................... $21,797,634
Accumulated undistributed net investment income................... 1,771
Accumulated net realized gains on investments, futures contracts
and foreign currency transactions................................ 282,947
Net unrealized appreciation on investments, futures contracts and
foreign currency transactions.................................... 2,437,999
-----------
Total Net Assets................................................... $24,520,351
===========
Investor Shares:
Net Assets........................................................ $ 5,560,299
Shares of Beneficial Interest Outstanding......................... 135,641
Net Asset Value (offering and redemption price per share)......... $ 40.99
===========
Service Shares:
Net Assets........................................................ $18,960,052
Shares of Beneficial Interest Outstanding......................... 465,618
Net Asset Value (offering and redemption price per share)......... $ 40.72
===========
</TABLE>
Statement of Operations
For the period March 15, 1999(a) through December 31, 1999
<TABLE>
<S> <C>
Investment Income:
Interest.......................................................... $ 137,416
Dividends......................................................... 3,896
----------
Total Income...................................................... 141,312
Expenses:
Advisory fees..................................................... 41,329
Management servicing fees......................................... 6,888
Administration fees............................................... 40,685
Shareholder servicing fees--Service Class......................... 31,660
Registration and filing fees...................................... 16,205
Custody fees...................................................... 4,580
Other fees........................................................ 8,122
----------
Total expenses before waivers..................................... 149,469
Less expenses waived.............................................. (48,217)
----------
Net expenses...................................................... 101,252
----------
Net Investment Income.............................................. 40,060
----------
Realized and Unrealized Gains on Investments:
Net realized gains on investments, futures contracts and foreign
currency transactions............................................ 2,976,651
Net change in unrealized appreciation on investments, futures
contracts and foreign currency transactions...................... 2,437,999
----------
Net realized and unrealized gains on investments, futures
contracts and foreign currency transactions...................... 5,414,650
----------
Increase In Net Assets Resulting from Operations................... $5,454,710
==========
</TABLE>
- -----
(a) Commencement of operations.
See accompanying notes to the financial statements.
32
<PAGE>
PROFUNDS
UltraEurope ProFund
Statement of Changes in Net Assets
<TABLE>
<CAPTION>
For the period
March 15, 1999(a)
through
December 31, 1999
-----------------
<S> <C>
Change in Net Assets:
Operations:
Net investment income....................................... $ 40,060
Net realized gains on investments, futures contracts and
foreign currency transactions.............................. 2,976,651
Net change in unrealized appreciation on investments,
futures contracts and foreign currency transactions........ 2,437,999
-----------
Net increase in net assets resulting from operations........ 5,454,710
Capital Share Transactions:
Proceeds from shares issued................................. 71,625,925
Cost of shares redeemed..................................... (52,560,284)
-----------
Net increase in net assets resulting from capital share
transactions............................................... 19,065,641
-----------
Total increase in net assets................................ 24,520,351
Net Assets:
Beginning of period......................................... --
-----------
End of period............................................... $24,520,351
===========
</TABLE>
- -----
(a) Commencement of operations.
See accompanying notes to the financial statements.
33
<PAGE>
PROFUNDS
UltraEurope ProFund
Financial Highlights
<TABLE>
<CAPTION>
Investor Class Service Class
------------------- -------------------
For a share of beneficial interest For the period from For the period from
outstanding March 15, 1999(a) March 15, 1999(a)
through through
December 31, 1999 December 31, 1999
------------------- -------------------
<S> <C> <C>
Net Asset Value, Beginning of Period.... $ 30.00 $ 30.00
---------- -----------
Net investment income.................. 0.19 0.03
Net realized and unrealized gain on
investments, futures contracts and
foreign currency transactions......... 10.80 10.69
---------- -----------
Total income from investment
operations............................ 10.99 10.72
---------- -----------
Net Asset Value, End of Period.......... $ 40.99 $ 40.72
========== ===========
Total Return............................ 36.63%(b) 35.73%(b)
Ratios/Supplemental Data:
Net assets, end of year................ $5,560,299 $18,960,052
Ratio of expenses to average net
assets................................ 1.53%(c) 2.50%(c)
Ratio of net investment income to
average net assets.................... 1.79%(c) 0.46%(c)
Ratio of expenses to average net
assets*............................... 2.53%(c) 3.58%(c)
Portfolio turnover(d).................. 514% 514%
</TABLE>
- -----
* During the period, certain fees were voluntarily reduced. If such voluntary
fee reduction had not occurred, the ratio would have been as indicated.
(a) Commencement of operations.
(b) Not annualized.
(c) Annualized.
(d) Portfolio turnover is calculated on the basis of the fund as a whole
without distinguishing between the classes of shares issued.
34
<PAGE>
The Bear ProFund
The Bear ProFund's investment objective is to provide daily investment
results that inversely correlate to the performance of the S&P 500 Index. Over
the twelve months ended December 31, 1999, the Fund's performance tracked this
benchmark with a statistical correlation of .99. Over the same period, the S&P
500 Index generated a return of 19.53%. The Fund (Investor Shares), as
anticipated, posted a total return of -12.32%* for the same period.
[GRAPH]
* Past performance is not predictive of future results. The investment return
and NAV will fluctuate so that the investor's shares, when redeemed, may be
worth more or less than the original cost.
The performance of the Bear ProFund is measured against the S&P 500 Index,
an unmanaged index generally representative of the performance of the U.S.
stock market as a whole. The index does not reflect the reinvestment of
dividends or the deduction of expenses associated with a mutual fund, such as
investment management and accounting fees. The Fund's performance reflects the
deduction of these value-added services.
The above information is not covered by the Report of Independent Accountants.
35
<PAGE>
PROFUNDS Schedule of Portfolio Investments
Bear ProFund December 31, 1999
<TABLE>
<CAPTION>
Options Purchased (22.4%)
Contracts
or
Principal Market
Amount Value
---------- ----------
<S> <C> <C>
S&P 500 Put Option expiring
January 2000 @ 2100.................................... 5 $ 768,250
----------
TOTAL OPTIONS PURCHASED
(Cost $831,213)........................................ 768,250
----------
U.S. Treasury Bills (78.7%)
U.S. Treasury Bill, 3.87%, 01/13/00..................... $1,113,000 1,111,444
U.S. Treasury Bill, 4.91%, 03/23/00..................... 237,000 234,346
U.S. Treasury Bill, 5.03%, 03/30/00..................... 643,000 635,013
U.S. Treasury Bill, 5.04%, 04/13/00..................... 725,000 714,604
----------
TOTAL U.S. TREASURY BILLS
(Cost $2,694,860)...................................... 2,695,407
----------
TOTAL INVESTMENTS
(Cost $3,526,073)(a) (101.1%).......................... 3,463,657
Liabilities in excess of other
assets (-1.1%)......................................... (37,758)
----------
TOTAL NET ASSETS (100.0%)............................... $3,425,899
==========
</TABLE>
- -----
Percentages indicated are based on net assets of $3,425,899.
<TABLE>
<CAPTION>
Futures Contracts Sold
Unrealized
Contracts Loss
---------- ----------
<S> <C> <C>
S&P 500 Future Contract expiring March 2000 (Underlying
face amount at value $1,485,400)...................... 4 $ (4,870)
</TABLE>
- -----
(a) Represents cost for financial reporting purposes and differs from cost
basis for federal income tax purposes due to differences in the timing of
recognition of certain losses by $(62,963) for options. Cost for federal
income tax purposes differs from market value by net unrealized
appreciation of securities as follows:
<TABLE>
<S> <C>
Unrealized appreciation............................................. $586
Unrealized depreciation............................................. (39)
----
Net unrealized appreciation......................................... $547
====
</TABLE>
See accompanying notes to the financial statements.
36
<PAGE>
PROFUNDS
Bear ProFund
Statement of Assets and Liabilities
December 31, 1999
<TABLE>
<S> <C>
Assets:
Investments, at value (cost $3,526,073).......................... $ 3,463,657
Receivable for capital shares issued............................. 26
Prepaid expenses................................................. 25,948
Other assets..................................................... 3,941
Deferred organization costs...................................... 57
-----------
Total Assets..................................................... 3,493,629
Liabilities:
Payable to custodian............................................. 23,318
Payable for capital shares redeemed.............................. 19,034
Variation margin on futures contracts............................ 7,840
Advisory fees payable............................................ 13,120
Management servicing fees payable................................ 430
Administration fees payable...................................... 1,075
Shareholder servicing fees payable--
Service Class................................................... 2,913
-----------
Total Liabilities................................................ 67,730
-----------
Net Assets........................................................ $ 3,425,899
===========
Net Assets consist of:
Capital.......................................................... $ 6,362,758
Accumulated undistributed net investment income.................. 4,120
Accumulated net realized losses on investments and futures
contracts....................................................... (2,873,693)
Net unrealized depreciation on investments and futures
contracts....................................................... (67,286)
-----------
Total Net Assets.................................................. $ 3,425,899
===========
Investor Shares:
Net Assets....................................................... $ 2,330,573
Shares of Beneficial Interest Outstanding........................ 77,215
Net Asset Value (offering and redemption price per share)........ $ 30.18
===========
Service Shares:
Net Assets....................................................... $ 1,095,326
Shares of Beneficial Interest Outstanding........................ 36,688
Net Asset Value (offering and redemption price per share)........ $ 29.86
===========
</TABLE>
Statement of Operations
For the year ended December 31, 1999
<TABLE>
<S> <C>
Investment Income:
Interest......................................................... $ 591,224
Expenses:
Advisory fees.................................................... 104,541
Management servicing fees........................................ 20,908
Administration fees.............................................. 19,034
Shareholder servicing fees--Service Class........................ 6,925
Registration and filing fees..................................... 40,055
Transfer agent fees.............................................. 28,914
Custody fees..................................................... 7,037
Fund accounting fees............................................. 4,182
Other fees....................................................... 11,166
-----------
Total expenses before waivers.................................... 242,762
Less expenses waived............................................. (41,680)
-----------
Net expenses..................................................... 201,082
-----------
Net Investment Income............................................. 390,142
-----------
Realized and Unrealized Losses on Investments:
Net realized losses on investments and futures contracts......... (2,103,989)
Net change in unrealized depreciation on investments and futures
contracts....................................................... (70,043)
-----------
Net realized and unrealized losses on investments and futures
contracts....................................................... (2,174,032)
-----------
Decrease in Net Assets Resulting from Operations.................. $(1,783,890)
===========
</TABLE>
See accompanying notes to the financial statements.
37
<PAGE>
PROFUNDS
Bear ProFund
Statements of Changes in Net Assets
<TABLE>
<CAPTION>
For the For the
year ended year ended
December 31, 1999 December 31, 1998
----------------- -----------------
<S> <C> <C>
Change in Net Assets:
Operations:
Net investment income..................... $ 390,142 $ 41,992
Net realized losses on investments and
futures contracts........................ (2,103,989) (769,283)
Net change in unrealized
appreciation/(depreciation) on
investments and futures contracts........ (70,043) 2,324
------------- ------------
Net decrease in net assets resulting from
operations............................... (1,783,890) (724,967)
Distributions to Shareholders from:
Net investment income
Investor shares........................... (237,255) (38,388)
Service shares............................ (150,057) (2,314)
Net realized gains on investments and
futures contracts
Investor shares........................... -- (481)
Service shares............................ -- (87)
------------- ------------
Net decrease in net assets resulting from
distributions............................ (387,312) (41,270)
Capital Share Transactions:
Proceeds from shares issued............... 313,003,794 53,489,566
Dividends reinvested...................... 355,358 39,914
Cost of shares redeemed................... (312,308,508) (50,733,208)
------------- ------------
Net increase in net assets resulting from
capital share transactions............... 1,050,644 2,796,272
------------- ------------
Total increase/(decrease) in net assets... (1,120,558) 2,030,035
Net Assets:
Beginning of year......................... 4,546,457 2,516,422
------------- ------------
End of year............................... $ 3,425,899 $ 4,546,457
============= ============
</TABLE>
See accompanying notes to the financial statements.
38
<PAGE>
PROFUNDS
Bear ProFund
Financial Highlights
<TABLE>
<CAPTION>
For a share of beneficial Investor Class Service Class
interest outstanding --------------------------------------------- --------------------------------------------
For the For the
period from period from
For the For the December 31, For the For the December 31,
year ended year ended 1997(a) year ended year ended 1997(a)
December 31, December 31, to December 31, December 31, December 31, to December 31,
1999 1998 1997 1999 1998 1997
------------ ------------ --------------- ------------ ------------ ---------------
<S> <C> <C> <C> <C> <C> <C>
Net Asset Value,
Beginning of Period..... $ 39.88 $ 50.00 $ 50.00 $ 39.76 $ 50.00 $ 50.00
---------- ---------- ---------- ---------- -------- -------
Net investment income... 1.10(b) 1.47(b) -- 0.63(b) 0.87(b) --
Net realized and
unrealized loss on
investments and futures
contracts.............. (5.97) (11.22) -- (5.92) (10.88) --
---------- ---------- ---------- ---------- -------- -------
Total income/loss from
investment operations.. (4.87) (9.75) -- (5.29) (10.01) --
---------- ---------- ---------- ---------- -------- -------
Distribution to
Shareholders from:
Net investment income... (4.83) (0.37) -- (4.61) (0.23) --
Net realized gains on
investments and futures
contracts.............. -- --(c) -- -- --(c) --
---------- ---------- ---------- ---------- -------- -------
Total Distributions..... (4.83) (0.37) -- (4.61) (0.23) --
---------- ---------- ---------- ---------- -------- -------
Net Asset Value, End of
Period.................. $ 30.18 $ 39.88 $ 50.00 $ 29.86 $ 39.76 $ 50.00
========== ========== ========== ========== ======== =======
Total Return............. (12.32)% (19.46)% --(d) (13.32)% (20.04)% --(d)
Ratios/Supplemental Data:
Net assets at end of
period.................. $2,330,573 $4,166,787 $2,516,412 $1,095,326 $379,670 $ 10
Ratio of expenses to
average net assets...... 1.40% 1.54% --(e) 2.23% 2.49% --(e)
Ratio of net investment
income to average net
assets.................. 2.86% 3.12% --(e) 1.69% 1.90% --(e)
Ratio of expenses to
average net assets*..... 1.68% 3.26% 325.97%(e) 2.91% 4.09% 326.97%(e)
Portfolio turnover(f).... 1215% -- -- 1215% -- --
</TABLE>
- -----
* During the period, certain fees were voluntarily reduced and/or reimbursed.
If such voluntary fee reductions and/or reimbursements had not occurred, the
ratios would have been as indicated.
(a) Commencement of operations.
(b) Per share net investment income has been calculated using the daily
average shares method.
(c) Distribution per share was less than $0.005.
(d) Not annualized.
(e) Annualized.
(f) Portfolio turnover is calculated on the basis of the fund as a whole
without distinguishing between the classes of shares issued.
39
<PAGE>
The UltraBear ProFund
The UltraBear ProFund's investment objective is to provide daily investment
results that inversely correlate to 200% of the performance of the S&P 500
Index. Over the twelve months ended December 31, 1999, the Fund performed as
anticipated, tracking its benchmark with a statistical correlation of .99.
Over the same period, the S&P 500 Index produced a return of 19.53%. As a
result, the Fund (Investor Shares) posted a total return of -30.54%* for the
same period.
[GRAPH]
* Past performance is not predictive of future results. The investment return
and NAV will fluctuate so that the investor's shares, when redeemed, may be
worth more or less than the original cost.
The performance of the UltraBear ProFund is measured against the S&P 500
Index, an unmanaged index generally representative of the performance of the
U.S. stock market as a whole. The index does not reflect the reinvestment of
dividends or the deduction of expenses associated with a mutual fund, such as
investment management and accounting fees. The Fund's performance reflects the
deduction of these value-added services.
The above information is not covered by the Report of Independent Accountants.
40
<PAGE>
PROFUNDS Schedule of Portfolio Investments
UltraBear ProFund December 31, 1999
<TABLE>
<CAPTION>
Options Purchased (33.4%)
Contracts
or
Principal Market
Amount Value
---------- -----------
<S> <C> <C>
S&P 500 Call Option expiring January 2000 @ 1800........ 700 $ 5,250
S&P 500 Put Option expiring January 2000 @ 2100......... 80 12,292,000
-----------
TOTAL OPTIONS PURCHASED (Cost $13,311,650).............. 12,297,250
-----------
U.S. Treasury Bills (69.3%)
U.S. Treasury Bill, 3.87%, 01/13/00..................... $1,540,000 1,537,849
U.S. Treasury Bill, 4.91%, 03/09/00..................... 9,000,000 8,916,012
U.S. Treasury Bill, 4.91%, 03/23/00..................... 2,428,000 2,400,806
U.S. Treasury Bill, 5.03%, 03/30/00..................... 3,066,000 3,027,914
U.S. Treasury Bill, 5.04%, 04/13/00..................... 1,919,000 1,891,482
U.S. Treasury Bill, 5.30%, 05/11/00..................... 7,900,000 7,749,402
-----------
TOTAL U.S. TREASURY BILLS (Cost $25,513,308)............ 25,523,465
-----------
TOTAL INVESTMENTS (Cost $38,824,958)(a)(102.7%)......... 37,820,715
Liabilities in excess of other assets (-2.7%)........... (997,410)
-----------
TOTAL NET ASSETS (100.0%)............................... $36,823,305
===========
</TABLE>
- -----
Percentages indicated are based on net assets of $36,823,305.
<TABLE>
<CAPTION>
Futures Contracts Sold
Unrealized
Contracts Loss
--------- -----------
<S> <C> <C>
S&P 500 Future Contract expiring March 2000 (Underlying
face amount at value $44,190,650)..................... 119 $(1,210,945)
</TABLE>
- -----
(a) Represents cost for financial reporting purposes and differs from cost
basis for federal income tax purposes due to differences in the timing of
recognition of certain losses by $(1,014,400) for options. Cost for
federal income tax purposes differs from market value by net unrealized
appreciation of securities as follows:
<TABLE>
<S> <C>
Unrealized appreciation....... $10,343
Unrealized depreciation....... (186)
-------
Net unrealized appreciation... $10,157
=======
</TABLE>
See accompanying notes to the financial statements.
41
<PAGE>
PROFUNDS
UltraBear ProFund
Statement of Assets and Liabilities
December 31, 1999
<TABLE>
<S> <C>
Assets:
Investments, at value (cost $38,824,958)......................... $37,820,715
Cash............................................................. 22,826
Receivable for capital shares issued............................. 1,850
Prepaid expenses................................................. 44,090
Deferred organization costs...................................... 4,739
-----------
Total Assets..................................................... 37,894,220
Liabilities:
Payable for capital shares redeemed.............................. 771,741
Variation margin on futures contracts............................ 212,750
Advisory fees payable............................................ 28,634
Management servicing fees payable................................ 5,727
Administration fees payable...................................... 5,883
Shareholder servicing fees payable--Service Class................ 18,925
Other accrued expenses........................................... 27,255
-----------
Total Liabilities................................................ 1,070,915
-----------
Net Assets........................................................ $36,823,305
===========
Net Assets consist of:
Capital.......................................................... $79,721,985
Accumulated undistributed net investment income.................. 2,860
Accumulated net realized losses on investments and futures
contracts....................................................... (40,686,352)
Net unrealized depreciation on investments and futures
contracts....................................................... (2,215,188)
-----------
Total Net Assets.................................................. $36,823,305
===========
Investor Shares:
Net Assets....................................................... $32,534,046
Shares of Beneficial Interest Outstanding........................ 1,527,049
Net Asset Value (offering and redemption price per share)........ $ 21.31
===========
Service Shares:
Net Assets....................................................... $ 4,289,259
Shares of Beneficial Interest Outstanding........................ 199,453
Net Asset Value (offering and redemption price per share)........ $ 21.51
===========
</TABLE>
Statement of Operations
For the year ended December 31, 1999
<TABLE>
<S> <C>
Investment Income:
Interest........................................................ $ 2,204,122
Expenses:
Advisory fees................................................... 458,760
Management servicing fees....................................... 91,752
Administration fees............................................. 96,949
Shareholder servicing fees--Service Class....................... 85,433
Transfer agent fees............................................. 87,311
Registration and filing fees.................................... 71,312
Fund accounting fees............................................ 18,350
Custody fees.................................................... 10,703
Other fees...................................................... 38,100
------------
Total expenses before waivers................................... 958,670
Less expenses waived............................................ (13,992)
------------
Net expenses.................................................... 944,678
------------
Net Investment Income............................................ 1,259,444
------------
Realized and Unrealized Losses on Investments:
Net realized losses on investments and futures contracts........ (33,526,973)
Net change in unrealized depreciation on investments and futures
contracts...................................................... (566,202)
------------
Net realized and unrealized losses on investments and futures
contracts...................................................... (34,093,175)
------------
Decrease in Net Assets Resulting from Operations................. $(32,833,731)
============
</TABLE>
See accompanying notes to the financial statements.
42
<PAGE>
PROFUNDS
UltraBear ProFund
Statements of Changes in Net Assets
<TABLE>
<CAPTION>
For the For the
year ended year ended
December 31, 1999 December 31, 1998
----------------- -----------------
<S> <C> <C>
Change in Net Assets:
Operations:
Net investment income..................... $ 1,259,444 $ 432,129
Net realized losses on investments and
futures contracts........................ (33,526,973) (7,159,379)
Net change in unrealized depreciation on
investments and futures contracts........ (566,202) (1,648,986)
--------------- -------------
Net decrease in net assets resulting from
operations............................... (32,833,731) (8,376,236)
Distributions to Shareholders from:
Net investment income
Investor shares........................... (1,179,951) (21,742)
Service shares............................ (76,633) --
--------------- -------------
Net decrease in net assets resulting from
distributions............................ (1,256,584) (21,742)
Capital Share Transactions:
Proceeds from shares issued............... 1,098,659,676 457,690,222
Dividends reinvested...................... 1,125,603 11,707
Cost of shares redeemed................... (1,059,823,863) (418,351,778)
--------------- -------------
Net increase in net assets resulting from
capital share transactions............... 39,961,416 39,350,151
--------------- -------------
Total increase in net assets.............. 5,871,101 30,952,173
Net Assets:
Beginning of year......................... 30,952,204 31
--------------- -------------
End of year............................... $ 36,823,305 $ 30,952,204
=============== =============
</TABLE>
See accompanying notes to the financial statements.
43
<PAGE>
PROFUNDS
UltraBear ProFund
Financial Highlights
<TABLE>
<CAPTION>
For a share of beneficial
interest outstanding
Investor Class Service Class
------------------------------------------- --------------------------------------------
For the
period from For the
December 23, period from
For the For the 1997(a) For the For the December 23,
year ended year ended to year ended year ended 1997(a)
December 31, December 31, December 31, December 31, December 31, to December 31,
1999 1998 1997 1999 1998 1997
------------ ------------ ------------ ------------ ------------ ---------------
<S> <C> <C> <C> <C> <C> <C>
Net Asset Value,
Beginning of Period.... $ 31.88 $ 51.80 $ 50.00 $ 31.83 $ 51.75 $50.00
----------- ----------- --------- ---------- ---------- ------
Net investment income.. 0.84 1.16(b) 6,082.50(c) 0.54 0.75(b) --
Net realized and
unrealized gain/(loss)
on investments and
futures contracts..... (10.55) (21.04) (6,080.70)(c) (10.45) (20.67) 1.75
----------- ----------- --------- ---------- ---------- ------
Total income/(loss)
from investment
operations............ (9.71) (19.88) 1.80 (9.91) (19.92) 1.75
----------- ----------- --------- ---------- ---------- ------
Distribution to
Shareholders from:
Net investment income.. (0.86) (0.04) -- (0.41) -- --
----------- ----------- --------- ---------- ---------- ------
Total distributions.... (0.86) (0.04) -- (0.41) -- --
----------- ----------- --------- ---------- ---------- ------
Net Asset Value, End of
Period................. $ 21.31 $ 31.88 $ 51.80 $ 21.51 $ 31.83 $51.75
=========== =========== ========= ========== ========== ======
Total Return............ (30.54)% (38.34)% 3.60%(d) (31.20)% (38.45)% 3.50%(d)
Ratios/Supplemental
Data:
Net assets, end of
year................... $32,534,046 $27,939,876 $ 21 $4,289,259 $3,012,328 $ 10
Ratio of expenses to
average net assets..... 1.41% 1.57% 1.33%(e) 2.41% 2.45% 1.33%(e)
Ratio of net investment
income to average net
assets................. 2.20% 2.73% 2.97%(e) 1.21% 1.74% --
Ratio of expenses to
average net assets*.... 1.43% 1.78% 32.39%(e) 2.42% 2.74% 33.39%(e)
Portfolio turnover(f)... 1137% -- -- 1137% -- --
</TABLE>
- -----
* During the period, certain fees were voluntarily reduced and/or reimbursed.
If such voluntary fee reductions and/or reimbursements had not occurred,
the ratio would have been as indicated.
(a) Commencement of operations.
(b) Per share net investment income has been calculated using the daily
average shares method.
(c) The amount shown for a share outstanding throughout the period does not
accord with the earned income or the change in aggregate gains and losses
in the portfolio of securities during the period because of the timing of
sales and purchases of fund shares in relation to fluctuating market
values during the period.
(d) Not annualized.
(e) Annualized.
(f) Portfolio turnover is calculated on the basis of the fund as a whole
without distinguishing between the classes of shares issued.
44
<PAGE>
The UltraShort OTC ProFund
The investment objective of the UltraShort OTC ProFund is to provide daily
investment results that correspond to twice of the inverse (opposite) of the
performance of the NASDAQ 100 Index. The NASDAQ 100 includes 100 of the
largest non-financial domestic companies listed on the NASDAQ National Market
tier of the NASDAQ Stock Market. Over the twelve months ended December 31,
1999, the Fund's performance tracked this benchmark with a statistical
correlation of .99. Over the course of the same period, the Index generated a
return of 101.95%. The Fund (Investor Shares), as anticipated, posted a total
return of -80.36%* for the twelve months.
[GRAPH]
* Past performance is not predictive of future results. The investment return
and NAV will fluctuate so that the investor's shares, when redeemed, may be
worth more or less than the original cost.
The performance of the UltraShort OTC ProFund is measured against the NASDAQ
100 Index, an unmanaged index generally representative of the performance of
the NASDAQ Stock Market as a whole. The index does not reflect the
reinvestment of dividends or the deduction of expenses associated with a
mutual fund, such as investment management and accounting fees. The Fund's
performance reflects the deduction of these value-added services.
The above information is not covered by the Report of Independent Accountants.
45
<PAGE>
PROFUNDS Schedule of Portfolio Investments
UltraShort OTC ProFund December 31, 1999
<TABLE>
<CAPTION>
Options Purchased (19.3%)
Contracts
or
Principal Market
Amount Value
---------- -----------
<S> <C> <C>
NASDAQ Call Option expiring January 2000 @ 4500......... 700 $ 10,500
NASDAQ Put Option expiring January 2000 @ 4500.......... 100 7,580,000
-----------
TOTAL OPTIONS PURCHASED
(Cost $12,574,500)..................................... 7,590,500
-----------
U.S. Treasury Bills (80.6%)
U.S. Treasury Bill, 3.87%, 01/13/00..................... $4,876,000 4,869,188
U.S. Treasury Bill, 4.91%, 03/09/00..................... 10,000,000 9,906,680
U.S. Treasury Bill, 4.91%, 03/23/00..................... 2,497,000 2,469,034
U.S. Treasury Bill, 5.03%, 03/30/00..................... 1,580,000 1,560,373
U.S. Treasury Bill, 5.04%, 04/13/00..................... 579,000 570,697
U.S. Treasury Bill, 5.30%, 05/11/00..................... 12,500,000 12,261,713
-----------
TOTAL U.S. TREASURY BILLS
(Cost $31,623,657)..................................... 31,637,685
-----------
TOTAL INVESTMENTS
(Cost $44,198,157)(a) (99.9%).......................... 39,228,185
Other assets in excess of liabilities (0.1%)............ 36,175
-----------
TOTAL NET ASSETS (100.0%)............................... $39,264,360
===========
</TABLE>
- -----
Percentages indicated are based on net assets of $39,264,360.
<TABLE>
<CAPTION>
Futures Contracts Sold
Unrealized
Contracts Loss
--------- -----------
<S> <C> <C>
NASDAQ Future Contract expiring March 2000 (Underlying
face amount at value $40,413,600)..................... 108 $(3,976,740)
</TABLE>
- -----
(a) Represents cost for financial reporting purposes and differs from cost
basis for federal income tax purposes due to differences in the timing of
recognition of certain losses by $(4,984,000) for options. Cost for
federal income tax purposes differs from market value by net unrealized
appreciation of securities as follows:
<TABLE>
<S> <C>
Unrealized appreciation.......................................... $14,124
Unrealized depreciation.......................................... (96)
-------
Net unrealized appreciation...................................... $14,028
=======
</TABLE>
See accompanying notes to the financial statements.
46
<PAGE>
PROFUNDS
UltraShort OTC ProFund
Statement of Assets and Liabilities
December 31, 1999
<TABLE>
<S> <C>
Assets:
Investments, at value (cost $44,198,157)........................ $ 39,228,185
Receivable for capital shares issued............................ 281,782
Prepaid expenses................................................ 34,994
------------
Total Assets.................................................... 39,544,961
Liabilities:
Payable to custodian............................................ 57,258
Variation margin on futures contracts........................... 121,240
Advisory fees payable........................................... 32,438
Management servicing fees payable............................... 6,488
Administration fees payable..................................... 6,137
Shareholder servicing fees payable--Service Class............... 5,325
Other accrued expenses.......................................... 51,715
------------
Total Liabilities............................................... 280,601
------------
Net Assets....................................................... $ 39,264,360
============
Net Assets consist of:
Capital......................................................... $169,305,027
Accumulated net realized losses on investments and futures
contracts...................................................... (121,093,955)
Net unrealized depreciation on investments and futures
contracts...................................................... (8,946,712)
------------
Total Net Assets................................................. $ 39,264,360
============
Investor Shares:
Net Assets...................................................... $ 38,254,638
Shares of Beneficial Interest Outstanding*...................... 832,042
Net Asset Value (offering and redemption price per share)*...... $ 45.98
============
Service Shares:
Net Assets...................................................... $ 1,009,722
Shares of Beneficial Interest Outstanding*...................... 21,776
Net Asset Value (offering and redemption price per share)*...... $ 46.37
============
</TABLE>
- -----
* Reflects 15 for 1 reverse split that occurred on February 11, 2000.
Statement of Operations
For the year ended December 31, 1999
<TABLE>
<S> <C>
Investment Income:
Interest....................................................... $ 2,401,591
Expenses:
Advisory fees.................................................. 499,786
Management servicing fees...................................... 99,958
Administration fees............................................ 100,112
Shareholder servicing fees--Service Class...................... 18,370
Registration and filing fees................................... 110,709
Transfer agent fees............................................ 89,747
Custody fees................................................... 9,876
Fund accounting fees........................................... 17,982
Other fees..................................................... 36,254
-------------
Total expenses before waivers.................................. 982,794
Less expenses waived........................................... (10,042)
-------------
Net expenses................................................... 972,752
-------------
Net Investment Income........................................... 1,428,839
-------------
Realized and Unrealized Losses on Investments:
Net realized losses on investments and futures contracts....... (107,443,268)
Net change in unrealized depreciation on investments and
futures contracts............................................. (8,249,251)
-------------
Net realized and unrealized losses on investments and futures
contracts..................................................... (115,692,519)
-------------
Decrease in Net Assets Resulting from Operations................ $(114,263,680)
=============
</TABLE>
See accompanying notes to the financial statements.
47
<PAGE>
PROFUNDS
UltraShort OTC ProFund
Statements of Changes in Net Assets
<TABLE>
<CAPTION>
For the period
For the June 2, 1998(a)
year ended through
December 31, 1999 December 31, 1998
----------------- -----------------
<S> <C> <C>
Change in Net Assets:
Operations:
Net investment income..................... $ 1,428,839 $ 72,078
Net realized losses on investments and
futures contracts........................ (107,443,268) (13,650,687)
Net change in unrealized depreciation on
investments and futures contracts........ (8,249,251) (697,461)
-------------- -------------
Net decrease in net assets resulting from
operations............................... (114,263,680) (14,276,070)
Distributions to Shareholders from:
Net investment income
Investor shares........................... (1,414,182) (4,476)
Service shares............................ (17,198) --
-------------- -------------
Net decrease in net assets resulting from
distributions............................ (1,431,380) (4,476)
Capital Share Transactions:
Proceeds from shares issued............... 1,131,536,860 227,068,217
Dividends reinvested...................... 1,293,644 2,745
Cost of shares redeemed................... (998,191,848) (192,469,652)
-------------- -------------
Net increase in net assets resulting from
capital share transactions............... 134,638,656 34,601,310
-------------- -------------
Total increase in net assets.............. 18,943,596 20,320,764
Net Assets:
Beginning of period....................... 20,320,764 --
-------------- -------------
End of period............................. $ 39,264,360 $ 20,320,764
============== =============
</TABLE>
- -----
(a) Commencement of operations.
See accompanying notes to the financial statements.
48
<PAGE>
PROFUNDS
UltraShort OTC ProFund
Financial Highlights
<TABLE>
<CAPTION>
For a share of beneficial
interest outstanding Adjusted for 15:1 reverse stock split on February 11, 2000
Investor Class Service Class
-------------------------------------- --------------------------------------
For the period For the period
For the year from June 2, 1998(a) For the year from June 2, 1998(a)
ended through ended through
December 31, 1999 December 31, 1998 December 31, 1999 December 31, 1998
----------------- -------------------- ----------------- --------------------
<S> <C> <C> <C> <C> <C>
Net Asset Value,
Beginning of Period..... $ 243.60 $ 750.00 $ 243.60 $ 750.00
----------- ----------- ---------- -------- ---
Net investment income... 1.82 3.90(b) 1.11 1.50(b)
Net realized and
unrealized (loss) on
investments and futures
contracts.............. (197.61) (510.30) (197.45) (507.90)
----------- ----------- ---------- --------
Total (loss) from
investment operations.. (195.79) (506.40) (196.34) (506.40)
----------- ----------- ---------- --------
Distribution to
Shareholders from:
Net investment income... (1.83) --(c) (0.89) --
----------- ----------- ---------- --------
Total distributions..... (1.83) -- (0.89) --
----------- ----------- ---------- --------
Net Asset Value, End of
Period.................. $ 45.98 $ 243.60 $ 46.37 $ 243.60
=========== =========== ========== ========
Total Return............. (80.36)% (67.48)%(d) (80.62)% (67.50)%(d)
Ratios/Supplemental Data:
Net assets, end of year.. $38,254,638 $19,465,372 $1,009,722 $855,392
Ratio of expenses to
average net assets...... 1.44% 1.83%(e) 2.45% 2.92%(e)
Ratio of net investment
income to average net
assets.................. 2.18% 1.55%(e) 1.21% 0.54%(e)
Ratio of expenses to
average net assets*..... 1.45% 1.98%(e) 2.46% 3.06%(e)
Portfolio turnover(f).... 1185% -- 1185% --
</TABLE>
- -----
* During the period, certain fees were voluntarily reduced and/or reimbursed.
If such voluntary fee reductions and/or reimbursements had not occurred, the
ratio would have been as indicated.
(a) Commencement of operations.
(b) Per share net investment income has been calculated using the daily
average shares method.
(c) Distribution per share was less than $0.005.
(d) Not annualized.
(e) Annualized.
(f) Portfolio turnover is calculated on the basis of the fund as a whole
without distinguishing between the classes of shares issued.
49
<PAGE>
The UltraShort Europe ProFund
Launched on March 15, 1999, the investment objective of the UltraShort
Europe ProFund is to provide daily investment results that are twice the
inverse (opposite) of the performance of the ProFunds European Index (PEI).
Since its launch, the Fund's results tracked the performance of the PEI with a
statistical correlation of .97. As a result, over the course of the period,
the Fund (Investor Shares) generated a total return of -21.38%* for the
period.
[GRAPH]
* Past performance is not predictive of future results. The investment return
and NAV will fluctuate so that the investor's shares, when redeemed, may be
worth more or less than the original cost.
The performance of the UltraShort Europe ProFund is measured against the
ProFunds European Index (PEI). The PEI was created by the Advisor and is equal
to a blended average of the performance of three European equity indices: the
Financial Times Stock Exchange 100 (FTSE-100), the Deutsche Aktienindex (DAX)
and the CAC-40. This index is unmanaged and does not reflect the reinvestment
of dividends or the deduction of expenses associated with a mutual fund, such
as investment management and accounting fees. The Fund's performance reflects
the deduction of these value-added services.
The above information is not covered by the Report of Independent Accountants.
50
<PAGE>
PROFUNDS Schedule of Portfolio Investments
UltraShort Europe ProFund December 31, 1999
<TABLE>
<CAPTION>
Options Purchased (14.3%)
Contracts
or
Principal Market
Amount Value
--------- --------
<S> <C> <C>
CAC 40 Call Option expiring January 2000 @ 6200............. 100 $ 1,089
DAX Call Option expiring February 2000 @ 7000............... 20 1,249
DAX Put Option expiring January 2000 @ 6800................. 6 0
FTSE 100 Call Option expiring February 2000 @ 4300.......... 1 42,535
FTSE 100 Call Option expiring January 2000 @ 7600........... 5 104
FTSE 100 Put Option expiring February 2000 @ 7600........... 1 10,832
--------
TOTAL OPTIONS PURCHASED
(Cost $71,569)............................................. 55,809
--------
U.S. Treasury Bills (78.3%)
U.S. Treasury Bill, 4.51%, 01/13/00......................... $140,000 139,772
U.S. Treasury Bill, 5.13%, 04/13/00......................... 168,000 165,516
--------
TOTAL U.S. TREASURY BILLS
(Cost $305,323)............................................ 305,288
--------
TOTAL INVESTMENTS
(Cost $376,892)(a) (92.6%)................................. 361,097
Other assets in excess of liabilities (7.4%)................ 28,927
--------
TOTAL NET ASSETS (100.0%)................................... $390,024
========
</TABLE>
- -----
Percentages indicated are based on net assets of $390,024.
<TABLE>
<CAPTION>
Futures Contracts Sold
Unrealized
Contracts Loss
--------- ----------
<S> <C> <C>
CAC 40 Future Contract expiring January 2000 (Underlying
face amount at value $240,556).......................... 4 $(6,778)
FTSE 100 Future Contract expiring March 2000 (Underlying
face amount at value $225,664).......................... 2 $(8,660)
</TABLE>
- -----
(a) Represents cost for financial reporting purposes and differs from cost
basis for federal income tax purposes due to differences in the timing of
recognition of certain losses by $(15,760) for options. Cost for federal
income tax purposes differs from market value by net unrealized
depreciation of securities as follows:
<TABLE>
<S> <C>
Unrealized appreciation......... $ 22
Unrealized depreciation......... (57)
----
Net unrealized depreciation..... $(35)
====
</TABLE>
See accompanying notes to the financial statements.
51
<PAGE>
PROFUNDS
UltraShort Europe ProFund
Statement of Assets and Liabilities
December 31, 1999
<TABLE>
<S> <C>
Assets:
Investments, at value (cost $376,892).............................. $ 361,097
Cash............................................................... 252,514
Receivable from Investment Advisor................................. 43,795
Prepaid expenses................................................... 1,618
---------
Total Assets....................................................... 659,024
Liabilities:
Foreign currency payable to the custodian, at value (cost
$213,994)......................................................... 213,994
Payable for capital shares redeemed................................ 4,021
Variation margin on futures contracts.............................. 8,817
Administration fees payable........................................ 40,654
Shareholder servicing fees payable--Service Class.................. 1,002
Other accrued expenses............................................. 512
---------
Total Liabilities.................................................. 269,000
---------
Net Assets.......................................................... $ 390,024
=========
Net Assets consist of:
Capital............................................................ $ 557,017
Accumulated undistributed net investment income.................... 11,705
Accumulated net realized losses on investments and futures
contracts......................................................... (147,465)
Net unrealized depreciation on investments and futures contracts... (31,233)
---------
Total Net Assets.................................................... $ 390,024
=========
Investor Shares:
Net Assets......................................................... $ 389,945
Shares of Beneficial Interest Outstanding.......................... 16,596
Net Asset Value (offering and redemption price per share).......... $ 23.50
=========
Service Shares:
Net Assets......................................................... $ 79
Shares of Beneficial Interest Outstanding.......................... 3
Net Asset Value (offering and redemption price per share).......... $ 23.82
=========
</TABLE>
Statement of Operations
For the period March 15, 1999(a) through December 31, 1999
<TABLE>
<S> <C>
Investment Income:
Interest.......................................................... $ 7,500
Expenses:
Advisory fees..................................................... 1,548
Management servicing fees......................................... 258
Administration fees............................................... 40,654
Shareholder servicing fees--Service Class......................... 1,005
Audit fees........................................................ 3,595
Custody fees...................................................... 1,553
Other fees........................................................ 521
---------
Total expenses before waivers/reimbursements...................... 49,134
Less expenses waived/reimbursed................................... (45,601)
---------
Net expenses...................................................... 3,533
---------
Net Investment Income.............................................. 3,967
---------
Realized and Unrealized Losses on Investments:
Net realized losses on investments and futures contracts.......... (138,283)
Net change in unrealized depreciation on investments and futures
contracts........................................................ (31,233)
---------
Net realized and unrealized losses on investments and futures
contracts........................................................ (169,516)
---------
Decrease In Net Assets Resulting from Operations................... $(165,549)
=========
</TABLE>
- -----
(a)Commencement of operations.
See accompanying notes to the financial statements.
52
<PAGE>
PROFUNDS
UltraShort Europe ProFund
Statement of Changes in Net Assets
<TABLE>
<CAPTION>
For the period
March 15, 1999(a)
through
December 31, 1999
-----------------
<S> <C>
Change in Net Assets:
Operations:
Net investment income....................................... $ 3,967
Net realized losses on investments and futures contracts.... (138,283)
Net change in unrealized depreciation on investments and
futures contracts.......................................... (31,233)
-----------
Net decrease in net assets resulting from operations........ (165,549)
Distributions to Shareholders from:
Net investment income
Investor shares............................................. (1,444)
-----------
Net decrease in net assets resulting from distributions..... (1,444)
Capital Share Transactions:
Proceeds from shares issued................................. 5,618,099
Dividends reinvested........................................ 1,399
Cost of shares redeemed..................................... (5,062,481)
-----------
Net increase in net assets resulting from capital share
transactions............................................... 557,017
-----------
Total increase in net assets................................ 390,024
Net Assets:
Beginning of period......................................... --
-----------
End of period............................................... $ 390,024
===========
</TABLE>
- -----
(a) Commencement of operations.
See accompanying notes to the financial statements.
53
<PAGE>
PROFUNDS
UltraShort Europe ProFund
Financial Highlights
For a share of beneficial interest outstanding
<TABLE>
<CAPTION>
Investor Class Service Class
----------------- -----------------
For the For the
period from period from
March 15, 1999(a) March 15, 1999(a)
through through
December 31, 1999 December 31, 1999
----------------- -----------------
<S> <C> <C>
Net Asset Value, Beginning of Period....... $ 30.00 $30.00
-------- ------
Net investment income..................... 0.57(b) 0.46(b)
Net realized and unrealized loss on
investments and futures contracts........ (6.98) (6.64)
-------- ------
Total loss from investment operations..... (6.41) (6.18)
-------- ------
Distribution to Shareholders from:
Net investment income..................... (0.09) --
-------- ------
Total distributions....................... (0.09) --
-------- ------
Net Asset Value, End of Period............. $ 23.50 $23.82
======== ======
Total Return............................... (21.38)%(c) (20.60)%(c)
Ratios/Supplemental Data:
Net assets, end of year.................... $389,945 $ 79
Ratio of expenses to average net assets.... 1.46%(d) 2.48%(d)
Ratio of net investment income to average
net assets................................ 2.87%(d) 1.92%(d)
Ratio of expenses to average net assets*... 28.05%(d) 29.07%(d)
Portfolio turnover(e)...................... 641% 641%
</TABLE>
- -----
* During the period, certain fees were voluntarily reduced/reimbursed. If such
voluntary fee reduction/reimbursement had not occurred, the ratio would have
been as indicated.
(a) Commencement of operations.
(b) Per share net investment income has been calculated using the daily
average shares method.
(c) Not annualized.
(d) Annualized.
(e) Portfolio turnover is calculated on the basis of the fund as a whole
without distinguishing between the classes of shares issued.
54
<PAGE>
The Money Market ProFund
The Money Market ProFund seeks, as its investment objective, a high level of
current income consistent with liquidity and preservation of capital. For the
year ended December 31, 1999, the Fund (Investor Class) returned 4.48%*.
The assets of this fund are part of a $6.1 billion portfolio managed by
Bankers Trust Company. Its managers seek to maintain a stable net asset value
of $1.00, there is no assurance that they will be able to do so. An investment
in this Fund is neither guaranteed nor insured by the FDIC or any other
government agency. Although the Fund strives to maintain the value of your
investment at $1.00 per share, it is possible to lose money by investing in
this Fund.
* Past performance is not predictive of future results. The investment return
will fluctuate so that the investor's shares, when redeemed, may be worth
more or less than the original cost.
The above information is not covered by the Report of Independent Accountants.
55
<PAGE>
PROFUNDS
Money Market ProFund
Statement of Assets and Liabilities
December 31, 1999
<TABLE>
<S> <C>
Assets:
Investment in Cash Management Portfolio, at value (cost
$307,287,676)................................................... $307,287,676
Prepaid expenses................................................. 81,855
Deferred organization costs...................................... 10,623
Other assets..................................................... 253,297
------------
Total Assets..................................................... 307,633,451
Liabilities:
Dividends payable................................................ 855,501
Management servicing fees payable................................ 87,848
Administration fees payable...................................... 7,629
Shareholder servicing fees payable--Service Class................ 85,385
Other accrued expenses........................................... 97,770
------------
Total Liabilities................................................ 1,134,133
------------
Net Assets........................................................ $306,499,318
============
Net Assets consist of:
Capital.......................................................... $306,487,544
Accumulated undistributed net investment income.................. 2,395
Accumulated undistributed net realized gains on investments...... 9,379
------------
Total Net Assets.................................................. $306,499,318
============
Investor Shares:
Net Assets....................................................... $198,555,252
Shares of Beneficial Interest Outstanding........................ 198,546,197
Net Asset Value (offering and redemption price per share)........ $ 1.00
============
Service Shares:
Net Assets....................................................... $107,944,066
Shares of Beneficial Interest Outstanding........................ 107,941,347
Net Asset Value (offering and redemption price per share)........ $ 1.00
============
</TABLE>
Statement of Operations
For the year ended December 31, 1999
<TABLE>
<S> <C>
Investment Income:
Investment income allocated from Cash Management Fund............ $11,217,664
Expenses allocated from Cash Management Fund..................... (215,987)
-----------
11,001,677
Expenses:
Management servicing fees........................................ 744,520
Administration fees.............................................. 189,248
Shareholder servicing fees--Service Class........................ 620,680
Transfer agent fees.............................................. 265,592
Registration and filing fees..................................... 247,507
Custody fees..................................................... 2,665
Other fees....................................................... 93,660
-----------
Net expenses..................................................... 2,163,872
-----------
Net Investment Income............................................. 8,837,805
-----------
Realized and Unrealized Gains on Investments:
Net realized gains on investments................................ 9,379
-----------
Increase In Net Assets Resulting from Operations.................. $ 8,847,184
===========
</TABLE>
See accompanying notes to the financial statements.
56
<PAGE>
PROFUNDS
Money Market ProFund
Statements of Changes in Net Assets
<TABLE>
<CAPTION>
For the For the
year ended year ended
December 31, 1999 December 31, 1998
----------------- -----------------
<S> <C> <C>
Change in Net Assets:
Operations:
Net investment income..................... $ 8,837,805 $ 1,465,933
Net realized gains on investments......... 9,379 2,398
--------------- ---------------
Net increase in net assets resulting from
operations............................... 8,847,184 1,468,331
Distributions to Shareholders from:
Net investment income
Investor shares........................... (6,697,778) (1,251,407)
Service shares............................ (2,140,027) (214,526)
--------------- ---------------
Net decrease in net assets resulting from
distributions............................ (8,837,805) (1,465,933)
Capital Share Transactions:
Proceeds from shares issued............... 5,898,123,847 1,182,465,274
Dividends reinvested...................... 7,933,592 1,242,690
Cost of shares redeemed................... (5,676,999,915) (1,106,567,419)
--------------- ---------------
Net increase in net assets resulting from
capital share transactions............... 229,057,524 77,140,545
--------------- ---------------
Total increase in net assets.............. 229,066,903 77,142,943
Net Assets:
Beginning of year......................... 77,432,415 289,472
--------------- ---------------
End of year............................... $ 306,499,318 $ 77,432,415
=============== ===============
</TABLE>
See accompanying notes to the financial statements.
57
<PAGE>
PROFUNDS
Money Market ProFund
Financial Highlights
<TABLE>
<CAPTION>
For a share of beneficial
interest outstanding
Investor Class Service Class
------------------------------------------------- ---------------------------------
For the
period from
For the For the November 17, For the For the
year ended year ended 1997(a) year ended year ended
December 31, December 31, to December 31, December 31, December 31,
1999 1998 1997 1999 1998
------------ ------------ --------------- ------------ ------------
<S> <C> <C> <C> <C> <C>
Net Asset Value,
Beginning of Period..... $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
------------ ----------- -------- ------------ -----------
Net investment income... 0.044 0.047(b) 0.006 0.034 0.037(b)
------------ ----------- -------- ------------ -----------
Distribution to
Shareholders from:
Net investment income... (0.044) (0.047) (0.006) (0.034) (0.037)
------------ ----------- -------- ------------ -----------
Net Asset Value, End of
Period.................. $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
============ =========== ======== ============ ===========
Total Return............. 4.48% 4.84% 0.61%(c) 3.44% 3.81%
Ratios/Supplemental Data:
Net assets, end of year.. $198,555,252 $62,026,228 $286,962 $107,944,066 $15,406,187
Ratio of expenses to
average net assets...... 0.83%(e) 0.85%(e) 0.83%(d),(e) 1.83%(e) 1.87%(e)
Ratio of net investment
income to average net
assets.................. 4.46% 4.81% 4.92%(d) 3.45% 3.43%
Ratio of expenses to
average net assets*..... 0.83%(e) 1.18%(e) 9.52%(d),(e) 1.83%(e) 2.18%(e)
<CAPTION>
For a share of beneficial
interest outstanding
For the
period from
November 17,
1997(a)
to December 31,
1997
-------------------
<S> <C>
Net Asset Value,
Beginning of Period..... $1.000
-------------------
Net investment income... --
-------------------
Distribution to
Shareholders from:
Net investment income... --
-------------------
Net Asset Value, End of
Period.................. $1.000
===================
Total Return............. 0.21%(c)
Ratios/Supplemental Data:
Net assets, end of year.. $2,510
Ratio of expenses to
average net assets...... 1.83%(d),(e)
Ratio of net investment
income to average net
assets.................. 2.53%(d)
Ratio of expenses to
average net assets*..... 10.52%(d),(e)
</TABLE>
- -----
* During the period, certain fees were voluntarily reduced. If such voluntary
fee reductions had not occurred, the ratio would have been as indicated.
(a) Commencement of operations.
(b) Per share net investment income has been calculated using the daily average
shares method.
(c) Not annualized.
(d) Annualized.
(e) The Money Market ProFund expense ratio includes the expense allocation of
the Cash Management Portfolio Master Fund.
58
<PAGE>
PROFUNDS
Notes to Financial Statements
December 31, 1999
1.Organization
ProFunds (the "Trust") is a registered open-end investment company under the
Investment Company Act of 1940 (the "1940 Act"). The Trust was organized as
a Delaware business trust on April 17, 1997 and has authorized capital of
unlimited shares of beneficial interest of no par value which may be issued
in more than one class or series. ProFund Advisors LLC (the "Advisor")
serves as the investment advisor for each of the ProFunds except the Money
Market ProFund. BISYS Fund Services Limited Partnership ("BISYS"), a wholly
owned subsidiary of The BISYS Group, Inc., acts as the Trust's
administrator. Currently, the Trust consists of nine separately managed
series: Bull ProFund, UltraBull ProFund, UltraOTC ProFund, UltraEurope
ProFund, Bear ProFund, UltraBear ProFund, UltraShort OTC ProFund, UltraShort
Europe ProFund and Money Market ProFund (collectively, the "ProFunds" and
individually, a "ProFund"). The ProFunds, excluding the Money Market
ProFund, are referred to as the "non-money market ProFunds". Each ProFund
offers two classes of shares: the Service Shares and the Investor Shares.
The investment objectives of the ProFunds are as follows:
The Bull ProFund and the UltraBull ProFund. The Bull ProFund's investment
-------------------------------------------
objective is to provide investment returns that correspond to the
performance of the Standard and Poor's (S&P) 500 Index. The UltraBull
ProFund's investment objective is to provide investment returns that
correspond to 200% of the performance of the S&P 500 Index. The UltraBull
ProFund should gain more than the Bull ProFund when the prices of the
securities in the S&P 500 Index rise and lose more when such prices decline.
The Bear ProFund and the UltraBear ProFund. The Bear ProFund's investment
-------------------------------------------
objective is to provide investment results that will inversely correlate to
the performance of the S&P 500 Index. The UltraBear ProFund's investment
objective is to provide investment results that will inversely correlate to
200% of the performance of the S&P 500 Index.
If the Bear ProFund is successful in meeting its objective, the net asset
value of Bear ProFund shares will increase in direct proportion to any
decrease in the level of the S&P 500 Index. Conversely, the net asset value
of Bear ProFund shares will decrease in direct proportion to any increases
in the level of the S&P 500 Index. The percentage change of net asset value
of shares of the UltraBear ProFund should increase or decrease approximately
twice as much as does that of the Bear ProFund on any given day.
The UltraOTC ProFund and the UltraShort OTC ProFund. The investment
----------------------------------------------------
objective of the UltraOTC ProFund is to provide investment results that
correspond to 200% of the performance of the NASDAQ 100 Index. The NASDAQ
100 Index includes 100 of the largest non-financial domestic companies
listed on the NASDAQ National Market tier of The NASDAQ Stock Market. The
UltraShort OTC ProFund seeks investment results that correspond each day to
twice of the inverse (opposite) of the performance of the NASDAQ 100 Index.
It is the policy of the UltraShort OTC ProFund to pursue its investment
objective of correlating with its benchmark regardless of market conditions,
to remain fully invested and to not take defensive positions.
If the UltraShort OTC ProFund achieved a perfect inverse correlation for any
single trading day, the net asset value of the shares of this ProFund would
increase for that day proportional to twice any decrease in the level of the
NASDAQ 100 Index. Conversely, the net asset value of the shares of the
ProFund would decrease for that day proportional to twice any increase in
the level of the NASDAQ 100 Index for that day. The percentage change of net
asset value of shares of the UltraOTC ProFund should increase or decrease
approximately twice as much as does that of the UltraShort OTC ProFund on
any given day.
The UltraEurope ProFund and the UltraShort Europe ProFund. The investment
----------------------------------------------------------
objective of the UltraEurope ProFund is to provide investment returns that
correspond to 200% of the performance of the ProFunds Europe Index ("PEI").
The PEI was created by the Advisor and is equal to a blended average of the
performance of three European equity indices: the Financial Times Stock
Exchange 100 (FTSE-100), the Deutsche Aktienindex (DAX) and the CAC-40. The
UltraEurope ProFund should produce greater gains to investors when the PEI
rises and greater losses when the PEI declines over the corresponding gain
or loss of the PEI itself.
The UltraShort Europe ProFund is designed to allow investors to seek to
profit from anticipated decreases in the PEI or to hedge an existing
portfolio of securities or mutual fund shares. The UltraShort Europe
ProFund's investment objective is to provide investment results that will
inversely correlate to 200% of the performance of the PEI. The UltraShort
Europe ProFund seeks to achieve this inverse correlation on each business
day.
The Money Market ProFund. The Money Market ProFund seeks, as its investment
-------------------------
objective, a high level of current income consistent with liquidity and
preservation of capital. To achieve its objective, the Money Market ProFund
invests all of its investable assets in the Cash Management Portfolio
("Portfolio"), which has the same investment objective as the Money Market
ProFund.
Continued
59
<PAGE>
PROFUNDS
Notes to Financial Statements (continued)
December 31, 1999
The performance of the Money Market ProFund is directly affected by the
performance of the Portfolio. The financial statements of the Portfolio,
including its schedule of investments, are included elsewhere within this
report and should be read in conjunction with the Money Market ProFund's
financial statements.
2.Significant Accounting Policies
The following is a summary of significant accounting policies consistently
followed by each ProFund in preparation of its financial statements. These
policies are in conformity with generally accepted accounting principles.
The preparation of financial statements in accordance with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amount of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of income and expense during the
reporting period. The actual results could differ from those estimates.
a)Investment Valuation
Securities, except as otherwise noted, in the portfolio of a non-money
market ProFund that are listed or traded on a stock exchange, are valued on
the basis of the last sale on that day or, lacking any sales, at a price
that is the mean between the closing bid and asked prices. Other securities
that are traded on the OTC markets are priced using NASDAQ, which provides
information on bid and asked prices quoted by major dealers in such stocks.
Bonds are valued using a third-party pricing system. Short-term debt
securities are valued at amortized cost, which approximates market value.
For the non-money market ProFunds other than the UltraEurope ProFund and the
UltraShort Europe ProFund, futures contracts and options on indexes and
exchanged-traded securities held are valued at the last traded sale price
prior to the close of the securities or commodities exchange on which they
are traded (generally 4:00 p.m. Eastern time). Options on securities traded
in the OTC market are valued at the average of the last bid price as
obtained from two or more dealers unless there is only one dealer, in which
case that dealer's price is used. Futures contracts are valued with
reference to established futures exchanges as described herein or, when
price quotes are not readily available, the value of a futures contract
purchased will be the bid price, and the value of a futures contract sold
will be the asked price. The value of options on futures contracts is
determined based upon the current settlement price for a like option
acquired on the day on which the option is being valued. For the UltraEurope
ProFund and the UltraShort Europe ProFund, futures contracts are valued at
the last transaction price for the respective contracts that occur
immediately prior to the close of the underlying stock markets (the London
Stock Exchange, the Frankfurt Stock Exchange and the Paris Bourse)
(collectively, the "PEI exchanges"). For purposes of determining the net
asset value per share of the UltraEurope ProFund and the UltraShort Europe
ProFund, the foreign exchange rates used will be the mean of the bid price
and asked price for the respective foreign currency occurring immediately
before the last underlying PEI exchange closes (normally, 11:30 a.m. Eastern
time), on each day that all three PEI exchanges and the New York Stock
Exchange are open. When market quotations are not readily available,
securities and other assets held by the non-money market ProFunds are valued
at fair value as determined in good faith under procedures established by
and under general supervision and responsibility of the ProFund's Board of
Trustees.
Valuation of securities held by the Portfolio is discussed in Note 1 of the
notes to financial statements of the Portfolio, which are included elsewhere
in this report.
b) Repurchase Agreements
Under a repurchase agreement, a ProFund purchases a debt security and
simultaneously agrees to sell the security back to the seller at a mutually
agreed-upon future price and date, normally one day or a few days later. The
resale price is greater than the purchase price, reflecting an agreed-upon
market interest rate during the purchaser's holding period. While the
maturities of the underlying securities in repurchase transactions may be
more than one year, the term of each repurchase agreement will always be
less than one year. A ProFund will enter into repurchase agreements only
with member banks of the Federal Reserve System or primary dealers of U.S.
government securities. The Advisor and, with respect to the Portfolio,
Bankers Trust, will monitor the creditworthiness of each of the firms which
is a party to a repurchase agreement with any of the ProFunds.
The ProFunds require that the securities purchased in a repurchase agreement
transaction be transferred to the custodian in a manner sufficient to enable
the ProFund to obtain those securities in the event of a counterparty
default. The seller, under the repurchase agreement, is required to maintain
the value of the securities held at not less than the repurchase price,
including accrued interest. Repurchase agreements are considered to be loans
under the 1940 Act.
Continued
60
<PAGE>
PROFUNDS
Notes to Financial Statements (continued)
December 31, 1999
c) Short Sales
When a ProFund engages in a short sale, the ProFund records a liability for
securities sold short and records an asset equal to the proceeds received.
The amount of the liability is subsequently marked to market to reflect the
market value of the short sale. The ProFund maintains a segregated account
of securities as collateral for outstanding short sales, when required. The
ProFund is exposed to market risk based on the amount, if any, that the
market value of the securities sold short exceeds the proceeds received.
d) Futures Contracts
The ProFunds may purchase or sell stock index futures contracts and options
on such futures contracts. Futures contracts are contracts for delayed
delivery of securities at a specified future delivery date and at a specific
price. Upon entering into a contract, the ProFund may be required to deposit
and maintain as collateral such initial margin as required by the exchange
on which the transaction is effected. Pursuant to the contract, the ProFund
agrees to receive from or pay to the broker an amount of cash equal to the
daily fluctuation in value of the contract. Such receipts or payments are
known as variation margin and are recorded by the ProFund as unrealized
gains or losses. Unrealized gains and losses for futures traded on domestic
exchanges are realized for tax purposes. When the contract is closed or
offset, the ProFund records a realized gain or loss equal to the difference
between the value of the contract at the time it was opened and the value at
the time it was closed.
e) Risks of Futures Contracts
Futures contracts involve, to varying degrees, elements of market risk and
exposure to loss in excess of the amount recognized in the Statements of
Assets and Liabilities. The face or contract amounts reflect the extent of
the total exposure each ProFund has in the particular classes of
instruments. Risks may result from an imperfect correlation between
movements in the price of the instruments and the price of the underlying
securities.
f) Foreign Currency Transactions
The accounting records of the ProFunds are maintained in U.S. dollars.
Financial instruments and other assets and liabilities of the UltraEurope
ProFund and the UltraShort Europe ProFund denominated in a foreign currency
are translated into U.S. dollars at current exchange rates. Purchases and
sales of financial instruments, income receipts and expense payments are
translated into U.S. dollars at the exchange rate on the date of the
transaction. The ProFunds isolate that portion of the results of operations
resulting from changes in foreign exchange rates from those resulting from
changes in market values of financial instruments. Realized foreign exchange
gains or losses arise from transactions in financial instruments and foreign
currencies, currency exchange fluctuations between the trade and settlement
date of such transactions, and the difference between the amount of assets
and liabilities recorded and the U.S. dollar equivalent of the amounts
actually received or paid. Net unrealized foreign exchange gains and losses
arise from changes in the value of assets and liabilities, including
financial instruments, resulting from changes in currency exchange rates.
g) Securities Transactions and Related Income
Securities transactions are accounted for on the date the security is
purchased or sold (trade date). Interest income is recognized on the accrual
basis and includes, where applicable, the pro rata amortization of premium
or discount. Dividend income is recorded on the ex-dividend date. Gains or
losses realized on sales of securities are determined by comparing the
identified cost of the security lot sold with the net sales proceeds.
h) Expenses
Expenses directly attributable to a ProFund are charged to the ProFund,
while expenses which are attributable to more than one ProFund are allocated
among the respective ProFunds based upon relative net assets or another
appropriate basis. In addition, investors in Investor Shares will pay the
expenses directly attributable to the Investor Shares as a class, and
investors in Service Shares will pay the expenses directly attributable to
the Service Shares as a class.
The investment income and expenses of a ProFund (other than class specific
expenses) and realized and unrealized gains and losses on investments of a
ProFund, are allocated to each class of shares based upon relative net
assets on the date income is earned or expenses are realized and unrealized
gains and losses are incurred.
i) Distributions to Shareholders
The non-money market ProFunds will distribute net investment income and net
realized gains, if any, at least once a year. The Money Market ProFund
ordinarily (i) declares dividends of net investment income (and net short-
term capital gains, if any) for
Continued
61
<PAGE>
PROFUNDS
Notes to Financial Statements (continued)
December 31, 1999
shares of the Money Market ProFund on a daily basis and (ii) distributes
such dividends to shareholders of the Money Market ProFund on a monthly
basis. Net realized capital gains, if any, will be distributed annually.
The amount of distributions from net investment income and net realized
gains are determined in accordance with federal income tax regulations which
may differ from generally accepted accounting principles. These "book/tax"
differences are either considered temporary or permanent in nature. To the
extent these differences are permanent in nature, such amounts are
reclassified within the composition of net assets based on their federal
tax-basis treatment; temporary differences do not require a
reclassification. Distributions which exceed net investment income and net
realized capital gains for financial reporting purposes but not for tax
purposes are reported as distributions in excess of net investment income or
net realized gains. To the extent they exceed net investment income and net
realized capital gains for tax purposes, they are reported as distribution
of capital. The non-money market ProFunds utilize equalization accounting
for tax purposes and designate earnings and profits, including net realized
gains distributed to shareholders on redemption of shares, as a part of the
dividends paid deduction for income tax purposes.
As of December 31, 1999, the following reclassifications have been made to
increase (decrease) such accounts with offsetting adjustments made to paid-
in-capital:
<TABLE>
<CAPTION>
Accumulated
Accumulated Net Realized
Undistributed Net Gain/(Loss) on
Investment Income Investments
----------------- --------------
<S> <C> <C>
Bull ProFund............................... $ (524,533) $ (7,986,960)
UltraBull ProFund.......................... $(2,229,411) $ (6,932,717)
UltraOTC ProFund........................... $ 2,884,211 $(438,681,359)
UltraEurope ProFund........................ $ (38,289) $ (2,693,704)
Bear ProFund............................... $ -- $ 10
UltraBear ProFund.......................... $ -- $ --
UltraShort OTC ProFund..................... $ 2,541 $ --
UltraShort Europe ProFund.................. $ 9,182 $ (9,182)
Money Market ProFund....................... $ -- $ --
</TABLE>
j) Federal Income Tax
Each of the ProFunds intends to qualify each year as a regulated investment
company (a "RIC") under Subchapter M of the Internal Revenue Code of 1986,
as amended. A RIC generally is not subject to federal income tax on income
and gains distributed in a timely manner to its shareholders; the ProFunds
intend to make timely distributions in order to avoid tax liability.
k) Organization Costs
Costs incurred by the Trust (excluding UltraEurope ProFund and UltraShort
Europe ProFund) in connection with its organization and registration under
the 1940 Act and the Securities Act of 1933 have been deferred and are being
amortized on the straight-line method over a five-year period beginning on
the date on which each ProFund commenced its investment activities.
3.Shares of Beneficial Interest
Transactions in shares of beneficial interest were as follows for the
periods ended December 31, 1999 and December 31, 1998. The UltraBull ProFund
and the UltraOTC ProFund shares have been adjusted to reflect the 4 for 1
stock split that occurred on July 16, 1999. The UltraShort OTC ProFund
shares have been adjusted to reflect the 15 for 1 reverse stock split that
occurred on February 11, 2000.
Continued
62
<PAGE>
PROFUNDS
Notes to Financial Statements (continued)
December 31, 1999
<TABLE>
<CAPTION>
Bull ProFund
----------------------------------------------------------
Year ended Year ended
December 31, 1999 December 31, 1998
----------------------------- ---------------------------
Shares Amount Shares Amount
------------ --------------- ------------ -------------
<S> <C> <C> <C> <C>
Investor Shares Sold.... 16,563,296 $ 1,050,728,948 1,819,504 $ 101,357,875
Investor Shares
Reinvested............. 677 53,238 174 10,906
Investor Shares
Redeemed............... (15,097,252) (950,378,703) (1,699,878) (94,711,215)
------------ --------------- ------------ -------------
Net Increase........... 1,466,721 $ 100,403,483 119,800 $ 6,657,566
============ =============== ============ =============
Service Shares Sold..... 809,336 $ 52,184,718 217,707 $ 12,376,845
Service Shares
Reinvested............. 63 4,495 6 358
Service Shares
Redeemed............... (390,067) (24,183,570) (208,223) (11,741,216)
------------ --------------- ------------ -------------
Net Increase........... 419,332 $ 28,005,643 9,490 $ 635,987
============ =============== ============ =============
<CAPTION>
UltraBull ProFund
----------------------------------------------------------
Year ended Year ended
December 31, 1999 December 31, 1998
----------------------------- ---------------------------
Shares Amount Shares Amount
------------ --------------- ------------ -------------
<S> <C> <C> <C> <C>
Investor Shares Sold.... 84,010,898 $ 2,246,915,014 9,228,361 $ 570,135,640
Investor Shares
Reinvested............. 34,857 818,420 988 67,254
Investor Shares
Redeemed............... (78,692,708) (2,192,537,404) (8,109,673) (497,376,316)
------------ --------------- ------------ -------------
Net Increase........... 5,353,047 $ 55,196,030 1,119,676 $ 72,826,578
============ =============== ============ =============
Service Shares Sold..... 16,613,958 $ 415,023,785 889,665 $ 55,056,597
Service Shares
Reinvested............. 12,756 294,369 23 1,214
Service Shares
Redeemed............... (13,760,378) (360,205,295) (785,151) (47,158,352)
------------ --------------- ------------ -------------
Net Increase........... 2,866,336 $ 55,112,859 104,537 $ 7,899,459
============ =============== ============ =============
<CAPTION>
UltraOTC ProFund
----------------------------------------------------------
Year ended Year ended
December 31, 1999 December 31, 1998
----------------------------- ---------------------------
Shares Amount Shares Amount
------------ --------------- ------------ -------------
<S> <C> <C> <C> <C>
Investor Shares Sold.... 56,874,804 $ 3,525,601,899 12,827,450 $ 961,145,454
Investor Shares
Reinvested............. 53,319 5,226,051 228 26,353
Investor Shares
Redeemed............... (46,631,576) (3,172,429,452) (10,829,785) (797,142,403)
------------ --------------- ------------ -------------
Net Increase........... 10,296,547 $ 358,398,498 1,997,893 $ 164,029,404
============ =============== ============ =============
Service Shares Sold..... 14,142,636 $ 889,187,800 3,349,477 $ 237,230,494
Service Shares
Reinvested............. 5,620 543,093 2 100
Service Shares
Redeemed............... (13,036,834) (874,396,852) (3,092,485) (214,497,432)
------------ --------------- ------------ -------------
Net Increase........... 1,111,422 $ 15,334,041 256,994 $ 22,733,162
============ =============== ============ =============
</TABLE>
<TABLE>
<CAPTION>
UltraEurope ProFund
------------------------
March 15, 1999 through
December 31, 1999
------------------------
Shares Amount
---------- ------------
<S> <C> <C>
Investor Shares Sold............................... 644,337 $ 20,016,054
Investor Shares Redeemed........................... (508,696) (15,168,170)
---------- ------------
Net Increase...................................... 135,641 $ 4,847,884
========== ============
Service Shares Sold................................ 1,683,534 $ 51,609,871
Service Shares Redeemed............................ (1,217,916) (37,392,114)
---------- ------------
Net Increase...................................... 465,618 $ 14,217,757
========== ============
</TABLE>
Continued
63
<PAGE>
PROFUNDS
Notes to Financial Statements (continued)
December 31, 1999
<TABLE>
<CAPTION>
Bear ProFund
------------------------------------------------------
Year ended Year ended
December 31, 1999 December 31, 1998
--------------------------- -------------------------
Shares Amount Shares Amount
----------- -------------- ---------- -------------
<S> <C> <C> <C> <C>
Investor Shares Sold.... 8,754,132 $ 302,799,527 1,002,423 $ 45,923,856
Investor Shares
Reinvested............. 7,282 220,780 946 37,746
Investor Shares
Redeemed............... (8,788,673) (303,042,177) (949,212) (43,589,058)
----------- -------------- ---------- -------------
Net
Increase/(Decrease)... (27,259) $ (21,870) 54,157 $ 2,372,544
=========== ============== ========== =============
Service Shares Sold..... 376,703 $ 10,204,267 167,814 $ 7,565,710
Service Shares
Reinvested............. 4,482 134,578 54 2,168
Service Shares
Redeemed............... (354,046) (9,266,331) (158,319) (7,144,150)
----------- -------------- ---------- -------------
Net Increase........... 27,139 $ 1,072,514 9,549 $ 423,728
=========== ============== ========== =============
<CAPTION>
UltraBear ProFund
------------------------------------------------------
Year ended Year ended
December 31, 1999 December 31, 1998
--------------------------- -------------------------
Shares Amount Shares Amount
----------- -------------- ---------- -------------
<S> <C> <C> <C> <C>
Investor Shares Sold.... 40,503,312 $ 932,204,256 9,428,709 $ 398,355,782
Investor Shares
Reinvested............. 49,333 1,060,664 370 11,707
Investor Shares
Redeemed............... (39,902,138) (899,455,063) (8,552,538) (364,196,957)
----------- -------------- ---------- -------------
Net Increase........... 650,507 $ 33,809,857 876,541 $ 34,170,532
=========== ============== ========== =============
Service Shares Sold..... 7,464,854 $ 166,455,420 1,330,039 $ 59,334,440
Service Shares
Reinvested............. 2,993 64,939 -- --
Service Shares
Redeemed............... (7,363,033) (160,368,800) (1,235,400) (54,154,821)
----------- -------------- ---------- -------------
Net Increase........... 104,814 $ 6,151,559 94,639 $ 5,179,619
=========== ============== ========== =============
<CAPTION>
UltraShort OTC ProFund
------------------------------------------------------
Year ended June 2, 1998 through
December 31, 1999 December 31, 1998
--------------------------- -------------------------
Shares Amount Shares Amount
----------- -------------- ---------- -------------
<S> <C> <C> <C> <C>
Investor Shares Sold.... 9,472,966 $1,075,314,031 418,732 $ 185,715,842
Investor Shares
Reinvested............. 27,596 1,277,016 11 2,745
Investor Shares
Redeemed............... (8,748,419) (945,055,249) (338,844) (153,765,286)
----------- -------------- ---------- -------------
Net Increase........... 752,143 $ 131,535,798 79,899 $ 31,953,301
=========== ============== ========== =============
Service Shares Sold..... 500,066 $ 56,222,829 93,266 $ 41,352,375
Service Shares
Reinvested............. 356 16,628 -- --
Service Shares
Redeemed............... (482,157) (53,136,599) (89,755) (38,704,366)
----------- -------------- ---------- -------------
Net Increase........... 18,265 $ 3,102,858 3,511 $ 2,648,009
=========== ============== ========== =============
</TABLE>
<TABLE>
<CAPTION>
UltraShort Europe
ProFund
---------------------
March 15, 1999
through
December 31, 1999
---------------------
Shares Amount
-------- -----------
<S> <C> <C>
Investor Shares Sold.................................. 89,189 $ 2,566,458
Investor Shares Reinvested............................ 60 1,399
Investor Shares Redeemed.............................. (72,653) (2,079,942)
-------- -----------
Net Increase......................................... 16,596 $ 487,915
======== ===========
Service Shares Sold................................... 101,124 $ 3,051,641
Service Shares Reinvested............................. -- --
Service Shares Redeemed............................... (101,121) (2,982,539)
-------- -----------
Net Increase......................................... 3 $ 69,102
======== ===========
</TABLE>
Continued
64
<PAGE>
PROFUNDS
Notes to Financial Statements (continued)
December 31, 1999
<TABLE>
<CAPTION>
Money Market ProFund
------------------------------------------------------------
Year ended Year ended
December 31, 1999 December 31, 1998
------------------------------- ---------------------------
Shares Amount Shares Amount
-------------- --------------- ------------ -------------
<S> <C> <C> <C> <C>
Investor Shares Sold.... 4,694,847,550 $ 4,694,847,550 946,042,462 $ 946,042,462
Investor Shares
Reinvested............. 6,026,684 6,026,684 1,061,891 1,061,891
Investor Shares
Redeemed............... (4,564,352,288) (4,564,352,288) (885,367,066) (885,367,066)
-------------- --------------- ------------ -------------
Net Increase........... 136,521,946 $ 136,521,946 61,737,287 $ 61,737,287
============== =============== ============ =============
Service Shares Sold..... 1,203,276,297 $ 1,203,276,297 236,422,812 $ 236,422,812
Service Shares
Reinvested............. 1,906,908 1,906,908 180,799 180,799
Service Shares
Redeemed............... (1,112,647,627) (1,112,647,627) (221,200,353) (221,200,353)
-------------- --------------- ------------ -------------
Net Increase........... 92,535,578 $ 92,535,578 15,403,258 $ 15,403,258
============== =============== ============ =============
</TABLE>
4.Investment Advisory Fees, Administration Fees and Other Related Party
Transactions
The non-money market ProFunds have entered into an Investment Advisory
Agreement with the Advisor. Under this agreement, dated October 28, 1997,
the non-money market ProFunds (excluding UltraEurope ProFund and UltraShort
Europe ProFund) each pay the Advisor a fee at an annualized rate, based on
the average daily net assets of each respective ProFund, of 0.75%. The
UltraEurope and UltraShort Europe ProFunds each pay the Advisor a fee at an
annualized rate, based on the average daily net assets of 0.90%.
For its services as Administrator, each ProFund pays BISYS an annual fee
ranging from 0.15% of average daily net assets of $0 to $300 million to
0.05% of average daily net assets of $1 billion and over. Concord Financial
Group, Inc., an affiliate of BISYS, serves as the Trust's distributor and
principal underwriter and receives no compensation from the ProFunds for
such services. BISYS Fund Services, Inc. ("BFSI"), also an affiliate of
BISYS, acts as transfer agent and fund accounting agent for the ProFunds,
for which it receives additional fees. Additionally, ProFunds, BISYS and
BFSI have entered into an Omnibus Fee Agreement in which the amount of
compensation due and payable to BISYS shall be the greater of (i) the
aggregate fee amount due and payable for services pursuant to the
Administration, Fund Accounting and Transfer Agency Agreements and (ii) the
minimum relationship fee described as specific dollar amounts payable over a
period of ten calendar quarters.
ProFund Advisors LLC, pursuant to a separate Management Services Agreement,
performs certain client support services and other administrative services
on behalf of the ProFunds. For these services, each non-money market ProFund
will pay to ProFund Advisors LLC a fee at the annual rate of 0.15% of its
average daily net assets. Under this agreement, ProFund Advisors LLC may
receive up to 0.35% of the Money Market ProFund's average daily net assets
for providing feeder fund management and administrative services to the
Money Market ProFund.
Each ProFund has adopted a Shareholder Services Plan (the "Plan") and
related agreement ("Shareholder Services Agreement"). The Plan provides that
each ProFund will make payments to Authorized Firms in amount up to 1.00%
(on an annual basis) of the average net assets of such ProFund's Service
class of shares attributable to or held in the name of an Authorized Firm
for its clients. The Plan provides that the fee will be paid to registered
investment advisors, banks, trust companies and other financial
organizations for providing account administration and other services to
their clients who are beneficial owners of such shares.
Certain Trustees of the Trust are Officers of ProFund Advisors LLC and are
compensated for such services.
Waivers and reimbursements are detailed as follows:
<TABLE>
<CAPTION>
Investment Management Fund
Advisor Administration Servicing Accounting Expense
Waiver Waiver Waiver Waiver Reimbursement
---------- -------------- ---------- ---------- -------------
<S> <C> <C> <C> <C> <C>
Bull ProFund............ 19,821 1,621 22,746 324 --
UltraBull ProFund....... -- 19,797 -- 3,959 --
UltraOTC ProFund........ -- 87,526 -- 17,505 --
UltraEurope ProFund..... 41,329 -- 6,888 -- --
Bear ProFund............ 23,324 429 17,841 86 --
UltraBear ProFund....... -- 11,660 -- 2,332 --
UltraShort OTC ProFund.. -- 10,042 -- -- --
UltraShort Europe
ProFund................ 1,548 -- 258 -- 43,795
Money Market ProFund.... -- -- -- -- --
</TABLE>
Continued
65
<PAGE>
PROFUNDS
Notes to Financial Statements (continued)
December 31, 1999
The advisor and/or the administrator have voluntarily agreed to reimburse
the ProFunds for expenses incurred to maintain a competitive expense ratio
for the ProFunds.
5.Securities Transactions
The cost of security purchases and the proceeds from the sale of securities
(excluding short-term securities) during the year ended December 31, 1999
were as follows:
<TABLE>
<CAPTION>
Purchases Sales
-------------- --------------
<S> <C> <C>
Bull ProFund.................................. $ 370,758,044 $ 248,766,546
UltraBull ProFund............................. $ 574,514,704 $ 477,838,446
UltraOTC ProFund.............................. $3,261,209,397 $2,437,802,925
UltraEurope ProFund........................... $ 25,213,943 $ 13,881,729
Bear ProFund.................................. $ 56,148,060 $ 60,054,207
UltraBear ProFund............................. $ 185,579,918 $ 212,095,116
UltraShort OTC ProFund........................ $ 180,014,597 $ 197,415,743
UltraShort Europe ProFund..................... $ 20,887 $ 20,877
</TABLE>
6.Federal Income Tax Information (Unaudited)
At December 31, 1999, the following funds had net capital loss carryforwards
to offset future net capital gains, if any, to the extent provided by the
Treasury regulations. To the extent that these carryovers are used to offset
future capital gains, it is probable that the gains so offset will not be
distributed to shareholders:
<TABLE>
<S> <C> <C>
Bear ProFund........................................ $ 629,925 Expires 2006
2,116,621 Expires 2007
-----------
$ 2,746,546
===========
UltraBear ProFund................................... $ 3,665,791 Expires 2006
31,970,456 Expires 2007
-----------
$35,636,247
===========
UltraShort OTC ProFund.............................. $ 7,192,872 Expires 2006
76,376,497 Expires 2007
-----------
$83,569,369
===========
UltraShort Europe ProFund........................... $ 101,454 Expires 2007
</TABLE>
During the year ended December 31, 1999, the following funds declared long-
term capital gain distributions as follows:
<TABLE>
<S> <C>
Bull ProFund...................................................... $ 13,740
UltraBull ProFund................................................. $ 576,840
UltraOTC ProFund.................................................. $3,175,431
</TABLE>
In addition, the following funds have long-term capital gain deemed
distributions from equalization as follows:
<TABLE>
<S> <C>
Bull ProFund.................................................... $ 4,274,883
UltraBull ProFund............................................... $ 1,716,765
UltraOTC ProFund................................................ $221,235,036
</TABLE>
Under current tax law, capital losses realized after October 31 may be
deferred and treated as occurring on the first business day of the following
fiscal year. The following funds had deferred losses, which will be treated
as arising on the first day of the fiscal year ending December 31, 2000:
<TABLE>
<CAPTION>
Fund Capital Loss Deferred
---- ---------------------
<S> <C>
Bear ProFund........................................... $ 194,980
UltraBear ProFund...................................... $ 7,275,450
UltraShort OTC ProFund................................. $46,485,326
UltraShort Europe ProFund.............................. $ 61,882
</TABLE>
Continued
66
<PAGE>
PROFUNDS
Notes to Financial Statements (concluded)
December 31, 1999
7.Special Meeting of Shareholders (Unaudited)
On September 29, 1999, there was a Special Meeting of Shareholders of the
Money Market ProFund. The meeting addressed the issues that arose due to the
merger of Bankers Trust Bank and Deutsche Bank A.G. There were three
proposals put forth for vote by the shareholders of the Money Market
ProFund. The description of each proposal and number of shares voted are as
follows:
a) To approve or disapprove a new investment advisory agreement between the
Fund's corresponding master fund portfolio, the Portfolio and Bankers
Trust Company.
<TABLE>
<CAPTION>
For Against Abstain
----------- --------- ----------
<S> <C> <C> <C>
316,540,790 5,849,977 10,110,517
</TABLE>
b) To elect Trustees of the Portfolio to hold office until their respective
successors have been duly elected and qualified or until their earlier
resignation or removal.
<TABLE>
<CAPTION>
For Against Abstain
----------- --------- ----------
<S> <C> <C> <C>
Mr. Charles P. Biggar............. 327,112,282 0 5,389,003
Mr. S. Leland Dill................ 327,112,282 0 5,389,003
Mr. Richard T. Hale............... 327,112,282 0 5,389,003
Mr. Bruce E. Langton.............. 327,112,282 0 5,389,003
Mr. Philip Saunders, Jr........... 327,112,282 0 5,389,003
Mr. Harry Van Benschoten.......... 327,050,924 0 5,450,361
Dr. Martin J. Gruber.............. 327,112,282 0 5,389,003
Dr. Richard J. Herring............ 327,112,282 0 5,389,003
</TABLE>
c) To ratify or reject the selection of PricewaterhouseCoopers LLP as the
independent accountants for the Portfolio for the fiscal year.
<TABLE>
<CAPTION>
For Against Abstain
----------- --------- ----------
<S> <C> <C> <C>
321,664,721 2,928,903 7,881,170
</TABLE>
67
<PAGE>
PROFUNDS
Report of Independent Accountants
To the Trustees and the Shareholders of
ProFunds
In our opinion, the accompanying statements of assets and liabilities,
including the schedules of portfolio investments, and the related statements
of operations and of changes in net assets and the financial highlights
present fairly, in all material respects, the financial position of the Bull
ProFund, the UltraBull ProFund, the UltraOTC ProFund, the UltraEurope ProFund,
the Bear ProFund, the UltraBear ProFund, the UltraShort OTC ProFund, the
UltraShort Europe ProFund and the Money Market ProFund, (nine separate
portfolios constituting the ProFunds and hereafter referred to as the "Fund")
at December 31, 1999, the results of each of their operations for the period
then ended, the changes in each of their net assets and the financial
highlights for each of the periods presented, in conformity with accounting
principles generally accepted in the United States. These financial statements
and financial highlights (hereafter referred to as "financial statements") are
the responsibility of the Fund's management; our responsibility is to express
an opinion on these financial statements based on our audits. We conducted our
audits of these financial statements in accordance with auditing standards
generally accepted in the United States, which require that we plan and
perform the audits to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on
a test basis, evidence supporting the amounts and disclosures in the financial
statements, assessing the accounting principles used and significant estimates
made by management, and evaluating the overall financial statement
presentation. We believe that our audits, which included confirmation of
securities at December 31, 1999 by correspondence with the custodian and
brokers, provide a reasonable basis for the opinion expressed above. Our
audits were conducted for the purpose of forming an opinion on the financial
statement taken as a whole. The performance discussions presented on pages 5,
14, 24, 30, 35, 40, 45, 50 and 55 are presented for purposes of additional
analysis and are not a required part of the financial statements. Such
information has not been subjected to the auditing procedures applied in the
audit of the financial statements, and, accordingly, we express no opinion on
them.
PricewaterhouseCoopers LLP
February 25, 2000
68
<PAGE>
Cash Management Portfolio Schedule of Portfolio Investments
December 31, 1999
<TABLE>
<CAPTION>
Eurodollar Certificates of Deposit (15.1%)
Principal
Amount Value
------------ --------------
<S> <C> <C>
Abbey National Treasury Services PLC:
5.44%, 3/13/00..................................... $ 22,000,000 $ 22,000,000
6.14%, 3/21/00..................................... 50,000,000 50,026,326
Bank of Austria,
5.93%, 2/14/00..................................... 65,000,000 64,986,881
Bank of Nova Scotia,
6.39%, 1/06/00..................................... 100,000,000 100,000,138
Bank of Scotland,
6.025%, 4/06/00.................................... 35,000,000 35,000,457
Banque Bruxelles Lambert:
6.30%, 1/18/00..................................... 50,000,000 50,000,234
6.10%, 2/07/00..................................... 60,000,000 60,000,610
Bayerische Hypotheka Vereinsbank:
5.57%, 1/20/00..................................... 30,000,000 30,000,282
5.58%, 1/21/00..................................... 10,000,000 9,997,985
Bayerische Landesbank,
6.02%, 6/05/00..................................... 30,000,000 30,001,261
Cariplo Bank,
6.39%, 1/06/00..................................... 50,000,000 50,000,069
Commerzbank:
6.10%, 1/18/00..................................... 26,000,000 25,984,503
5.21%, 2/18/00..................................... 10,000,000 9,996,816
Halifax PLC,
5.50%, 1/10/00..................................... 55,000,000 55,000,000
International Nederlander Bank:
5.155%, 2/22/00.................................... 20,000,000 19,990,139
5.95%, 2/23/00..................................... 30,000,000 29,994,986
Landesbank Baden Wurttemberg:
5.95%, 2/17/00..................................... 60,000,000 60,000,000
5.97%, 2/22/00..................................... 35,000,000 35,000,498
5.92%, 2/23/00..................................... 40,000,000 40,000,000
6.01%, 2/29/00..................................... 35,000,000 34,998,813
6.05%, 3/09/00..................................... 50,000,000 50,000,930
Landesbank Hessen Thuringen,
5.06%, 2/11/00..................................... 10,000,000 9,985,375
Norddeutsche Landesbank,
6.30%, 1/18/00..................................... 50,000,000 50,000,000
--------------
Total Eurodollar Certificates of Deposit
(Amortized Cost $922,966,303) 922,966,303
--------------
Yankee Certificates of Deposit (14.2%)
Bayerische Hypotheka Vereinsbank:
5.10%, 4/12/00..................................... 60,000,000 59,835,823
5.15%, 4/20/00..................................... 12,000,000 11,999,743
Cariplo Bank,
5.96%, 2/24/00..................................... 30,000,000 30,001,554
Commerzbank:
5.01%, 1/10/00..................................... 5,000,000 4,999,457
4.99%, 2/02/00..................................... 20,000,000 19,998,839
5.16%, 2/25/00..................................... 20,000,000 19,996,567
5.20%, 3/15/00..................................... 25,000,000 24,999,475
5.185%, 3/30/00.................................... 20,000,000 19,997,653
Credit Suisse First Boston, Inc.:
5.56%, 1/18/00..................................... 10,000,000 9,999,756
5.575%, 1/19/00.................................... 25,000,000 25,000,061
</TABLE>
<TABLE>
<CAPTION>
Yankee Certificates of Deposit, continued
Principal
Amount Value
------------ --------------
<S> <C> <C>
Credit Agricole Indosuez,
5.285%, 3/01/00.................................... $ 20,000,000 $ 20,002,604
Credit Communal De Belgique,
5.88%, 2/15/00..................................... 50,000,000 50,000,000
Dresdner Bank:
5.56%, 1/07/00..................................... 10,000,000 9,999,347
5.56%, 1/18/00..................................... 40,000,000 40,000,000
Landesbank Hessen Thuringer,
5.215%, 2/29/00.................................... 3,000,000 2,999,787
National Westminster Bank,
5.50%, 1/14/00..................................... 40,000,000 40,000,000
Norddeutsche Landesbank,
5.35%, 5/24/00..................................... 10,000,000 9,997,726
Paribas SA:
6.03%, 2/08/00..................................... 65,000,000 65,000,000
5.95%, 2/14/00..................................... 40,000,000 39,991,483
Rabobank Nederland NV:
5.02%, 1/12/00..................................... 20,000,000 19,997,302
5.14%, 3/20/00..................................... 14,000,000 13,992,523
Royal Bank of Canada:
5.035%, 2/08/00.................................... 13,000,000 12,993,679
5.235%, 3/09/00.................................... 15,000,000 14,999,821
5.70%, 7/03/00..................................... 5,000,000 4,998,793
Svenska Handelsbanken,
6.30%, 1/10/00..................................... 60,000,000 60,000,000
Toronto Dominion Bank:
5.10%, 2/22/00..................................... 20,000,000 19,998,764
5.14%, 4/26/00..................................... 25,000,000 24,995,410
Union Bank of Switzerland,
5.155%, 2/25/00.................................... 15,000,000 14,999,130
Westdeutsche Landesbank Girozentrale:
6.04%, 1/24/00..................................... 50,000,000 50,000,000
6.08%, 2/07/00..................................... 60,000,000 60,000,000
6.04%, 3/10/00..................................... 35,000,000 35,000,000
6.04%, 6/02/00..................................... 30,000,000 30,000,000
--------------
Total Yankee Certificates of Deposit
(Amortized Cost $866,795,297) 866,795,297
--------------
Certificates of Deposit (1.7%)
American Express Centurion Bank,
6.00%, 3/07/00..................................... 35,000,000 35,000,000
Bank One,
5.91%, 3/15/00..................................... 50,000,000 50,000,000
NationsBank,
4.99%, 1/11/00..................................... 7,000,000 6,999,114
Wachovia Corp.,
4.90%, 1/10/00..................................... 10,000,000 9,999,676
--------------
Total Certificates of Deposit
(Amortized Cost $101,998,790) 101,998,790
--------------
Eurodollar Time Deposits (11.8%)
ABN Amro,
5.969%, 3/24/00.................................... 30,000,000 30,000,000
Bank of Austria,
6.188%, 1/19/00.................................... 60,000,000 60,000,000
</TABLE>
See accompanying notes to the financial statements.
69
<PAGE>
Cash Management Portfolio Schedule of Portfolio Investments
December 31, 1999
<TABLE>
<CAPTION>
Eurodollar Time Deposits, continued
Principal
Amount Value
------------ --------------
<S> <C> <C>
Caisse Nationale de Credit Agricole,
6.188%, 1/18/00.................................... $ 30,000,000 $ 30,000,000
Chase Manhattan Bank,
5.50%, 1/03/00..................................... 200,000,000 200,000,000
Den Danske Bank,
6.125%, 2/25/00.................................... 30,000,000 30,000,000
International Nederlander Bank,
5.59%, 1/12/00..................................... 30,000,000 30,000,000
KBC Bank:
6.135%, 1/10/00.................................... 31,000,000 31,000,000
5.969%, 5/22/00.................................... 10,000,000 10,000,000
Landesbank Baden Wurttemberg,
6.08%, 6/05/00..................................... 25,000,000 25,000,000
National Australia Bank,
5.00%, 1/03/00..................................... 50,000,000 50,000,000
Norddeutsche Landesbank:
5.95%, 3/23/00..................................... 40,000,000 40,000,000
6.00%, 4/10/00..................................... 50,000,000 50,000,000
Union Bank of Switzerland,
5.00%, 1/03/00..................................... 137,372,154 137,372,154
--------------
Total Eurodollar Time Deposits
(Amortized Cost $723,372,154) 723,372,154
--------------
Floating Rate Notes (19.9%)
American Express Centurion Bank,
Monthly Variable Rate:
6.423%, 3/15/00.................................... 20,000,000 20,000,000
6.439%, 4/03/00.................................... 25,000,000 25,000,090
Asset Securitization Cooperative Corp.,
Quarterly Variable Rate:
6.163%, 3/06/00.................................... 40,000,000 40,000,000
6.121%, 3/10/00.................................... 30,000,000 29,999,440
AT & T Corp.,
Quarterly Variable Rate,
6.163%, 8/07/00.................................... 17,000,000 17,001,993
Bank of Austria,
Monthly Variable Rate,
6.363%, 3/15/00.................................... 50,000,000 49,992,999
Bank of Scotland,
Monthly Variable Rate:
6.373%, 3/15/00.................................... 25,000,000 24,997,005
6.379%, 5/10/00.................................... 25,000,000 24,993,868
Bayerische Hypotheka Vereinsbank,
Monthly Variable Rate:
6.383%, 4/13/00.................................... 100,000,000 99,980,301
6.401%, 4/25/00.................................... 25,000,000 24,996,125
6.383%, 5/15/00.................................... 35,000,000 34,991,207
Bayerische Landesbank,
Monthly Variable Rate,
6.359%, 4/10/00.................................... 100,000,000 99,980,926
Chase Manhattan Bank,
Quarterly Variable Rate:
6.176%, 1/12/00.................................... 10,000,000 10,000,163
6.306%, 2/28/00.................................... 6,000,000 6,002,149
6.398%, 4/20/00.................................... 15,000,000 15,010,800
</TABLE>
<TABLE>
<CAPTION>
Floating Rate Notes, continued
Principal
Amount Value
------------ --------------
<S> <C> <C>
Citigroup, Inc.,
Quarterly Variable Rate,
6.261%, 2/03/00.................................... $ 10,000,000 $ 10,000,879
Corporate Receivable Corp.,
Quarterly Variable Rate,
6.031%, 2/16/00.................................... 30,000,000 30,000,000
Credit Agricole Indosuez,
Monthly Variable Rate:
6.361%, 3/16/00.................................... 30,000,000 29,995,743
6.459%, 11/08/00................................... 45,000,000 44,976,984
First Union Bank,
Daily Variable Rate,
4.85%, 10/27/00.................................... 35,000,000 35,000,000
Ford Motor Credit Corp.,
Quarterly Variable Rate:
6.174%, 10/02/00................................... 15,000,000 14,993,017
5.566%, 11/27/00................................... 10,000,000 10,006,001
General Electric Capital Corp.,
Quarterly Variable Rate:
6.126%, 4/12/00.................................... 50,000,000 50,000,000
6.014%, 5/12/00.................................... 25,000,000 25,000,000
General Motors Acceptance Corp.,
Quarterly Variable Rate:
6.072%, 2/24/00.................................... 7,500,000 7,499,998
6.061%, 2/25/00.................................... 20,000,000 20,000,301
J.P. Morgan, Inc.,
Quarterly Variable Rate:
6.051%, 2/23/00.................................... 14,000,000 13,999,887
6.065%, 3/02/00.................................... 20,000,000 20,000,191
6.074%, 4/06/00.................................... 7,820,000 7,819,998
5.10%, 6/23/00..................................... 35,000,000 35,000,000
Key Bank NA,
Monthly Variable Rate:
6.49%, 4/18/00..................................... 40,000,000 40,000,000
6.421%, 6/26/00.................................... 25,000,000 24,992,851
Quarterly Variable Rate,
6.166%, 4/17/00.................................... 30,000,000 30,000,000
National Rural Utility Corp.,
Quarterly Variable Rate,
6.141%, 6/26/00.................................... 12,000,000 11,999,421
NationsBank,
Daily Variable Rate,
5.02%, 2/04/00..................................... 25,000,000 24,998,998
Norwest Corp.,
Monthly Variable Rate,
6.499%, 9/07/00.................................... 25,000,000 24,989,921
PNC Bank,
Monthly Variable Rate:
6.411%, 1/31/00.................................... 25,000,000 24,994,791
6.411%, 7/12/00.................................... 25,000,000 24,999,189
Societe Generale,
Monthly Variable Rate,
6.393%, 5/15/00.................................... 60,000,000 59,988,224
Toyota Motor Credit Corp.,
Quarterly Variable Rate,
6.373%, 10/25/00................................... 17,000,000 17,019,412
US Bank NA,
Monthly Variable Rate:
6.513%, 4/18/00.................................... 10,000,000 10,002,337
6.531%, 4/26/00.................................... 8,000,000 8,000,457
</TABLE>
See accompanying notes to the financial statements.
70
<PAGE>
Cash Management Portfolio Schedule of Portfolio Investments
December 31, 1999
<TABLE>
<CAPTION>
Floating Rate Notes, continued
Principal
Amount Value
------------ --------------
<S> <C> <C>
Wells Fargo Bank,
Quarterly Variable Rate,
6.064%, 4/26/00.................................... $ 23,000,000 $ 22,994,375
Westpac Capital Corp.,
Quarterly Variable Rate,
6.076%, 4/17/00.................................... 10,000,000 9,998,251
--------------
Total Floating Rate Notes
(Amortized Cost $1,212,218,292) 1,212,218,292
--------------
Commercial Paper--35.6%
Aegon Funding Corp.:
5.39%, 2/15/00..................................... 60,000,000 59,585,250
5.92%, 3/06/00..................................... 10,500,000 10,387,767
5.81%, 3/17/00..................................... 28,000,000 27,656,564
5.75%, 3/22/00..................................... 35,000,000 34,547,188
Albertson's, Inc.,
5.85%, 1/24/00..................................... 50,000,000 49,813,125
Alcatel Alsthom, Inc.:
5.84%, 3/06/00..................................... 15,000,000 14,841,833
5.82%, 3/15/00..................................... 11,000,000 10,868,403
AlliedSignal, Inc.:
5.30%, 2/01/00..................................... 15,000,000 14,931,542
5.90%, 2/15/00..................................... 22,000,000 21,837,750
Asset Securitization
Cooperative Corp.,
6.00%, 1/18/00..................................... 30,000,000 29,915,000
BankAmerica Corp.,
5.85%, 2/18/00..................................... 28,000,000 27,781,600
Barclays Bank PLC,
5.75%, 1/10/00..................................... 100,000,000 99,888,194
BBL North America, Inc.:
5.932%, 1/21/00.................................... 15,000,000 14,950,571
5.765%, 1/31/00.................................... 40,000,000 39,807,833
BellSouth Corp.,
5.62%, 2/07/00..................................... 12,000,000 11,930,687
British Gas Capital Corp.,
5.67%, 2/25/00..................................... 20,000,000 19,826,750
British Telecommunications PLC:
5.92%, 3/02/00..................................... 55,000,000 54,448,289
5.87%, 3/13/00..................................... 50,000,000 49,413,000
Corporate Asset Funding Co., Inc.:
5.93%, 1/18/00..................................... 50,000,000 49,859,986
5.95%, 2/18/00..................................... 65,000,000 64,484,333
Coca Cola Co.,......................................
5.27%, 1/20/00..................................... 15,000,000 14,958,279
Corporate Receivables Corp.:
5.89%, 1/27/00..................................... 15,000,000 14,936,192
6.07%, 2/08/00..................................... 25,000,000 24,839,819
5.87%, 2/10/00..................................... 20,000,000 19,869,556
5.945%, 3/15/00.................................... 50,000,000 49,388,986
Credit Suisse First Boston, Inc.:
5.79%, 2/07/00..................................... 35,000,000 34,791,721
5.79%, 2/14/00..................................... 25,000,000 24,823,083
Cregem North American,
5.92%, 2/02/00..................................... 65,000,000 64,657,956
Delaware Funding Corp.,
5.83%, 2/22/00..................................... 30,000,000 29,747,367
Diageo Capital PLC,
5.39%, 1/28/00..................................... 40,000,000 39,838,300
</TABLE>
<TABLE>
<CAPTION>
Commercial Paper, continued
Principal
Amount Value
------------ --------------
<S> <C> <C>
Elf Aquitaine Finance,
5.95%, 3/02/00..................................... $ 45,000,000 $ 44,546,313
Emerson Electric Co.,
5.27%, 1/31/00..................................... 25,000,000 24,890,208
Fortis Bank:
5.893%, 3/14/00.................................... 50,000,000 49,402,561
5.91%, 3/15/00..................................... 25,000,000 24,696,292
5.89%, 4/03/00..................................... 25,000,000 24,619,604
5.735%, 5/09/00.................................... 30,000,000 29,383,488
Gannett Co., Inc.,
5.97%, 1/28/00..................................... 30,000,000 29,865,675
General Electric Capital Corp.:
5.20%, 2/02/00..................................... 23,000,000 22,893,689
4.95%, 2/07/00..................................... 22,000,000 21,888,075
5.36%, 2/11/00..................................... 30,000,000 29,816,867
5.78%, 2/18/00..................................... 18,000,000 17,861,280
General Electric Capital Corp.
International Funding:
5.31%, 2/15/00..................................... 40,000,000 39,734,500
5.77%, 2/22/00..................................... 25,000,000 24,791,639
5.77%, 3/08/00..................................... 20,000,000 19,785,228
General Motors Acceptance Corp.,
5.22%, 1/31/00..................................... 15,000,000 14,934,750
Glaxo Wellcome PLC,
5.90%, 2/25/00..................................... 46,000,000 45,585,361
Invensys PLC:
5.92%, 1/14/00..................................... 25,000,000 24,946,556
5.60%, 2/07/00..................................... 13,000,000 12,929,222
J. P. Morgan, Inc.:
6.60%, 1/18/00..................................... 10,000,000 9,968,833
5.78%, 3/14/00..................................... 20,000,000 19,765,589
National Rural Utility Corp.,
5.88%, 3/13/00..................................... 32,000,000 31,623,680
Quincy Capital Corp.:
6.04%, 1/21/00..................................... 49,867,000 49,699,669
6.10%, 1/27/00..................................... 40,000,000 39,823,778
6.09%, 1/31/00..................................... 35,470,000 35,289,990
Receivables Capital Corp.:
5.85%, 1/14/00..................................... 11,480,000 11,455,749
5.88%, 2/15/00..................................... 30,000,000 29,779,500
5.88%, 2/25/00..................................... 40,000,000 39,640,667
Rio Tinto America, Inc.,
5.91%, 3/03/00..................................... 20,678,000 20,467,532
Riverwoods Funding Corp.,
6.03%, 1/26/00..................................... 15,000,000 14,937,188
Salomon Smith Barney, Inc.:
5.43%, 1/28/00..................................... 6,000,000 5,975,565
5.76%, 2/09/00..................................... 50,000,000 49,688,000
Santander Finance BV,
5.97%, 2/15/00..................................... 30,000,000 29,776,125
SBC Communications, Inc.:
5.84%, 2/10/00..................................... 12,500,000 12,418,889
5.70%, 2/22/00..................................... 10,000,000 9,917,667
Unifunding, Inc.,
5.98%, 2/17/00..................................... 50,000,000 49,609,639
Wachovia Corp.:
4.93%, 2/07/00..................................... 8,000,000 7,959,464
5.18%, 2/15/00..................................... 25,000,000 24,838,125
</TABLE>
See accompanying notes to the financial statements.
71
<PAGE>
Cash Management Portfolio Schedule of Portfolio Investments
December 31, 1999
<TABLE>
<CAPTION>
Commercial Paper, continued
Principal
Amount Value
------------ --------------
<S> <C> <C>
Windmill Funding Corp.:
5.98%, 1/13/00................................. $ 25,000,000 $ 24,950,167
5.44%, 1/18/00................................. 20,000,000 19,948,622
5.44%, 1/21/00................................. 57,000,000 56,818,133
5.87%, 1/25/00................................. 25,000,000 24,902,166
5.88%, 2/15/00................................. 25,000,000 24,816,250
--------------
Total Commercial Paper
(Amortized Cost $2,171,269,219) 2,171,269,219
--------------
Funding Agreements--3.3%
First Allmerica Financial
Life Insurance Co.,
Monthly Variable Rate,
4.956%, 4/17/00/1.........................../.. 55,000,000 55,000,000
GE Life and Annuity Assurance Co.,
Monthly Variable Rate,
5.289%, 9/01/00/1.........................../.. 40,000,000 40,000,000
Transamerica Life,
Monthly Variable Rate,
4.951%, 6/13/00/2.........................../.. 35,000,000 35,000,000
Travelers Insurance Co,
Monthly Variable Rate:
4.978%, 2/23/00/1.........................../.. 40,000,000 40,000,000
4.967%, 4/03/00/1.........................../.. 30,000,000 30,000,000
--------------
Total Funding Agreements
(Amortized Cost $200,000,000) 200,000,000
--------------
Deposit Note--0.3%
Bayerische Landesbank,
5.80%, 5/22/00................................. 20,000,000 19,974,166
--------------
Total Deposit Note (Amortized Cost
$19,974,166)................................... 19,974,166
--------------
Total Investments (Amortized Cost
$6,218,594,221)................................ 101.9% $6,218,594,221
Liabilities in Excess of Other Assets........... (1.9) (117,876,855)
------------ --------------
Net Assets...................................... 100.0% $6,100,717,366
============ ==============
</TABLE>
- -----
/1/Illiquid Security.
/2/Funding agreement subject to a seven day demand feature.
See accompanying notes to the financial statements.
72
<PAGE>
Cash Management Portolio
Statement of Assets and Liabilities
December 31, 1999
<TABLE>
<S> <C>
Assets
Investments, at Value (Amortized Cost of $6,218,594,221)....... $6,218,594,221
Interest Receivable............................................ 43,756,797
Cash........................................................... 2,473,605
--------------
Total Assets................................................... 6,264,824,623
Liabilities
Payable for Securities Purchased............................... 163,014,298
Due to Bankers Trust........................................... 1,062,715
Accrued Expenses and Other..................................... 30,244
--------------
Total Liabilities.............................................. 164,107,257
--------------
Net Assets...................................................... $6,100,717,366
==============
Composition of Net Assets
Paid-in Capital................................................ 6,100,717,366
--------------
Net Assets...................................................... $6,100,717,366
==============
</TABLE>
Statement of Operations
For the year ended December 31, 1999
<TABLE>
<S> <C>
Investment Income
Interest........................................................ $369,010,216
------------
Expenses
Advisory Fees................................................... 10,613,250
Administration and Services Fees................................ 3,539,131
Professional Fees............................................... 22,160
Trustees Fees................................................... 5,190
Miscellaneous................................................... 1,625
------------
Total Expenses.................................................. 14,181,356
Less: Fee Waivers or Expense Reimbursements..................... (1,445,608)
------------
Net Expenses.................................................... 12,735,748
------------
Net Investment Income............................................ 356,274,468
------------
Net Realized Gain from Investment Transactions................... 441,562
------------
Net Increase in Net Assets from Operations....................... $356,716,030
============
</TABLE>
See accompanying notes to the financial statements.
73
<PAGE>
Cash Management Portfolio
Statements of Changes in Net Assets
<TABLE>
<CAPTION>
For the For the
year ended year ended
December 31, 1999 December 31, 1998
----------------- -----------------
<S> <C> <C>
Increase in Net Assets from:
Operations
Net Investment Income..................... $ 356,274,468 $ 286,987,238
Net Realized Gain from Investment
Transactions............................. 441,562 320,470
---------------- ----------------
Net Increase in Net Assets from
Operations............................... 356,716,030 287,307,708
---------------- ----------------
Capital Transactions
Proceeds from Capital Invested............ 39,802,568,271 85,829,057,272
Value of Capital Withdrawn................ (39,522,819,924) (84,691,836,966)
---------------- ----------------
Net Increase in Net Assets from Capital
Transactions............................. 279,748,347 1,137,220,306
---------------- ----------------
Total Increase in Net Assets.............. 636,464,377 1,424,528,014
Net Assets
Beginning of Year......................... 5,464,252,989 4,039,724,975
---------------- ----------------
End of Year............................... $ 6,100,717,366 $ 5,464,252,989
================ ================
</TABLE>
See accompanying notes to the financial statements.
74
<PAGE>
Cash Management Portfolio
Financial Highlights
Contained below are selected ratios to average net assets and other
supplemental data for each of the years indicated for the Cash Management
Portfolio.
<TABLE>
<CAPTION>
For the years ended December 31,
----------------------------------------------------------
1999 1998 1997 1996 1995
---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C>
Supplemental Data and
Ratios:
Net Assets, End of Year
(000s omitted)......... $6,100,717 $5,464,253 $4,039,725 $3,261,910 $2,615,932
Ratios to Average Net
Assets:
Net Investment Income.. 5.04% 5.37% 5.43% 5.27% 5.77%
Expenses After
Waivers............... 0.18% 0.18% 0.18% 0.18% 0.18%
Expenses Before
Waivers............... 0.20% 0.20% 0.20% 0.20% 0.20%
Decrease Reflected in
Above Expense
Ratios Due to Fee
Waivers or Expense
Reimbursements........ 0.02% 0.02% 0.02% 0.02% 0.02%
</TABLE>
75
<PAGE>
Cash Management Portfolio
Notes to Financial Statements
December 31, 1999
Note 1--Organization and Significant Accounting Policies.
A.Organization
The Cash Management Portfolio (the "Portfolio") is registered under the
Investment Company Act of 1940 (the "Act"), as amended, as an open-end
management investment company. The Portfolio was organized on March 26,
1990, as an unincorporated trust under the laws of New York, and began
operations on July 23, 1990. The Declaration of Trust permits the Board of
Trustees (the "Trustees") to issue beneficial interests in the Portfolio.
B.Security Valuation
Investments are valued at amortized cost, which is in accordance with Rule
2a-7 of the Investment Company Act of 1940 and represents the fair value of
the Portfolio's investments.
C.Security Transactions and Interest Income
Security transactions are accounted for on a trade date basis. Interest
income is recorded on the accrual basis and includes amortization of premium
and accretion of discount on investments. Realized gains and losses from
securities transactions are recorded on the identified cost basis.
All of the net investment income and realized and unrealized gains and
losses from the security transactions of the Portfolio are allocated pro
rata among the investors in the Portfolio at the time of such determination.
D.Repurchase Agreements
The Portfolio may enter into repurchase agreements with financial
institutions deemed to be creditworthy by the Portfolio's Investment
Advisor, subject to the seller's agreement to repurchase such securities at
a mutually agreed upon price. Securities purchased subject to repurchase
agreements are deposited with the Portfolio's custodian, and pursuant to the
terms of the repurchase agreement must have an aggregate market value
greater than or equal to the repurchase price plus accrued interest at all
times. If the value of the underlying securities falls below the value of
the repurchase price plus accrued interest, the Portfolio requires the
seller to deposit additional collateral by the next business day. If the
request for additional collateral is not met, or the seller defaults on its
repurchase obligation, the Portfolio maintains the right to sell the
underlying securities at market value and may claim any resulting loss
against the seller. However, in the event of a default or bankruptcy by the
seller, realization and/or retention of the collateral may be subject to
legal proceedings.
E.Federal Income Taxes
The Portfolio is considered a Partnership under the Internal Revenue Code.
Therefore, no federal income tax provision is required.
F.Other
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts in the financial statements.
Actual results could differ from those estimates.
Note 2--Fees and Transactions with Affiliates
The Portfolio has entered into an Administration and Services Agreement with
Bankers Trust Company ("Bankers Trust"), an indirect wholly owned subsidiary
of Deutsche Bank AG. Under this agreement, Bankers Trust provides
administrative, custody, transfer agency and shareholder services to the
Portfolio in return for a fee computed daily and paid monthly at an annual
rate of .05% of the Portfolio's average daily net assets.
The Portfolio has entered into an Advisory Agreement with Bankers Trust.
Under this agreement, the Portfolio pays Bankers Trust a fee computed daily
and paid monthly at an annual rate of .15% of the Portfolio's average daily
net assets.
Bankers Trust has contractually agreed through April, 30, 2000 to waive its
fees and reimburse expenses of the Portfolio, to the extent necessary, to
limit all expenses to .18% of the average daily net assets of the Portfolio.
In 1996, Bankers Trust contributed capital in the amount of $1,113,488 to
reimburse the Cash Management Portfolio for capital losses incurred in prior
years.
At December 31, 1999, the Portfolio was a participant with other affiliated
entities in a revolving credit facility in the amount of $150,000,000, which
expires April 29, 2000. A commitment fee of .10% per annum on the average
daily amount of the available commitment is payable on a quarterly basis and
apportioned equally among all participants. No amounts were drawn down or
outstanding for this fund under the credit facility for the year ended
December 31, 1999.
76
<PAGE>
Cash Management Portfolio
Report of Independent Accountants
To the Trustees and Holders of Beneficial Interest of
Cash Management Portfolio
In our opinion, the accompanying statement of assets and liabilities,
including the portfolio of investments, and the related statements of
operations and of changes in net assets and the financial highlights present
fairly, in all material respects, the financial position of the Cash
Management Portfolio (hereafter referred to as the "Portfolio") at December
31, 1999, and the results of its operations, the changes in its net assets and
the financial highlights for each of the fiscal periods presented, in
conformity with accounting principles generally accepted in the United States.
These financial statements and financial highlights (hereafter referred to as
"financial statements") are the responsibility of the Portfolio's management;
our responsibility is to express an opinion on these financial statements
based on our audits. We conducted our audits of these financial statements in
accordance with auditing standards generally accepted in the United States,
which require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements, assessing
the accounting principles used and significant estimates made by management,
and evaluating the overall financial statement presentation. We believe that
our audits, which included confirmation of securities at December 31, 1999 by
correspondence with the custodian and brokers, provide a reasonable basis for
the opinion expressed above.
PricewaterhouseCoopers LLP
Baltimore, Maryland
February 11, 2000
77
<PAGE>
[This Page Intentionally Left Blank]
<PAGE>
ProFunds(sm)
Post Office Mailing Address For Investments:
P.O. Box 182800
Columbus, OH 43218-2800
Phone Numbers:
For Financial Professionals: (888) PRO-5717 (888) 776-5717
For All Others: (888) PRO-FNDS (888) 776-3637
or (614) 470-8122
FAX Number: (800) 782-4797
Website Address: www.profunds.com
This report is submitted for the general information of the shareholders of
the ProFunds. It is not authorized for distribution to prospective investors
unless preceded or accompanied by an effective prospectus.
[LOGO OF PROFUNDS]
12/99
