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June 19, 2000
Prospectus
[PICTURE APPEARS HERE]
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The UltraSector ProFunds
Basic Materials UltraSector ProFund Pharmaceuticals UltraSector ProFund
Biotechnology UltraSector ProFund Precious Metals UltraSector ProFund
Consumer Cyclical UltraSector ProFund Real Estate UltraSector ProFund
Consumer Non-Cyclical UltraSector ProFund Semiconductor UltraSector ProFund
Energy UltraSector ProFund Technology UltraSector ProFund
Financial UltraSector ProFund Telecommunications UltraSector ProFund
Healthcare UltraSector ProFund Utilities UltraSector ProFund
Industrial UltraSector ProFund Wireless Communications UltraSector ProFund
Internet UltraSector ProFund
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[ProFunds Logo]
Like shares of all mutual funds, these securities have not been approved or
disapproved by the Securities and Exchange Commission nor has the Securities and
Exchange Commission passed upon the accuracy or adequacy of this prospectus. Any
representation to the contrary is a criminal offense.
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Table of Contents
1 Overview
4 Fund Information
38 UltraSector ProFunds Strategy
40 Share Prices, Classes and Tax Information
44 Shareholder Services Guide
50 ProFunds Management
<PAGE>
Overview
The UltraSector ProFunds' Investment Objectives
Each UltraSector ProFund seeks to provide daily investment results, before
fees and expenses, that correspond to 150% of the performance of a
specified Dow Jones sector index.
Principal Investment Strategies
ProFund Advisors LLC (the "Advisor"), the investment advisor of each
UltraSector ProFund, uses a "passive" approach to investing, employing
quantitative analysis. On the basis of this analysis, the Advisor
determines the type, quantity and mix of investment positions that an
UltraSector ProFund should hold to approximate the performance of its
benchmark (150% of a specified Dow Jones sector index). The Advisor does
not make judgements about the investment merit of a particular stock, nor
does it attempt to apply any economic, financial or market analysis. The
UltraSector ProFunds do not take temporary defensive positions.
Under normal market conditions, each UltraSector ProFund will invest
primarily in equity securities of companies principally engaged in the
business activities of an indicated economic sector, or in instruments that
provide exposure to those companies. An UltraSector ProFund will invest in
securities and other instruments that the Advisor believes should have a
similar investment profile as, and simulate the movement of, the underlying
index. The UltraSector ProFunds may invest in securities that are not
included in their underlying indices if the Advisor decides it is
appropriate in view of the UltraSector ProFunds' investment objectives.
Each UltraSector ProFund may invest in the following instruments as a
substitute for investing directly in stocks, as a means of achieving
leverage, or as a way of pursuing its investment objective:
. Financial instruments such as equity caps, collars and floors, swaps,
American Depository Receipts, and options on securities and securities
indices; and
. Futures contracts on stock indexes, and options on future contracts.
Each UltraSector ProFund generally invests in order to produce "leveraged"
investment results. Leverage is a way to change small market movements into
larger changes in the value of an UltraSector ProFund's investment. An
UltraSector ProFund also may borrow money for investment purposes in order
to achieve leveraged investment results.
Each UltraSector ProFund may also invest in U.S. Government securities and
enter into repurchase agreements.
Overview 1
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Principal Risks of Investing in the UltraSector ProFunds
Like all investments, the UltraSector ProFunds entail risk. The Advisor
cannot guarantee that any UltraSector ProFund will achieve its investment
objective. As with any mutual fund, the UltraSector ProFunds could lose
money, or their performance could trail that of other investment
alternatives. Some of the risks that are common to each of the UltraSector
ProFunds are:
. Market Risk -- The UltraSector ProFunds are subject to market risks
that will affect the value of their shares, including general economic
and market conditions, as well as developments that impact specific
economic sectors, industries or companies. Shareholders should lose
money when the index underlying their benchmark declines.
. Equity Risk -- The equity markets are volatile, and the value of an
UltraSector ProFund's investments may fluctuate dramatically from day-
to-day. This volatility may cause the value of your investment in an
UltraSector ProFund to decrease. The risk of equity investing may be
particularly acute when an UltraSector ProFund invests in the
securities of issuers with small market capitalization. Small
capitalization companies may lack the financial and personnel resources
to handle economic setbacks, and their securities typically are less
liquid than larger companies' stock.
. Concentration Risk -- Since each UltraSector ProFund invests in the
securities of a limited number of issuers conducting business in a
specific market sector, it is subject to the risk that those issuers
(or that market sector) will perform poorly, and the UltraSector
ProFund will be negatively impacted by that poor performance.
. Leverage Risk -- The UltraSector ProFunds employ leveraged investment
techniques and may borrow money for investment purposes. Leverage is
the ability to get a return on a capital base that is larger than an
UltraSector ProFund's investment. Use of leverage can magnify the
effects of changes in the value of the UltraSector ProFunds and makes
them more volatile. The leveraged investment techniques that the
UltraSector ProFunds employ should subject investors in the UltraSector
ProFunds to approximately one and one-half times the potential risk of
loss of a conventional index fund that seeks to track the performance
of an underlying index.
. Correlation Risk -- The Advisor expects that each of the UltraSector
ProFunds will track its benchmark with a high level of correlation.
There can be, however, no guarantee that the UltraSector ProFunds will
be able to achieve a high level of correlation. An UltraSector ProFund
may invest in securities or in other financial instruments not included
in its underlying index. An UltraSector ProFund may not have investment
exposure to all securities in its underlying index or its weighting of
investment exposure to such stocks may be different from that of the
index. These factors may adversely affect an UltraSector ProFund's
correlation with its benchmark. A failure to achieve a high degree of
correlation may prevent an UltraSector ProFund from achieving its
investment goal.
2 Overview
<PAGE>
. Risks of Aggressive Investment Techniques -- The UltraSector ProFunds
use investment techniques that may be considered aggressive. Risks
associated with the use of options, swaps, futures contracts and other
similar instruments include potentially dramatic price changes (losses)
in the value of the instruments and imperfect correlations between the
price of the contract and the underlying security or index.
. Liquidity Risk -- In certain circumstances, such as the disruption of
the orderly markets for financial instruments in which the UltraSector
ProFunds invest, the UltraSector ProFunds might not be able to dispose
of certain holdings quickly or at prices that represent true market
value in the judgment of the Advisor. This may prevent the UltraSector
ProFunds from limiting losses or realizing gains.
. Non-Diversification Risk -- The UltraSector ProFunds are classified as
"non-diversified" under the federal securities laws. They have the
ability to concentrate a relatively high percentage of their
investments in the securities of a small number of companies, if the
Advisor determines that doing so is the most efficient means of
tracking the relevant benchmark. This would make the performance of an
UltraSector ProFund more susceptible to a single economic, political or
regulatory event than a more diversified mutual fund might be.
. New Fund Risk -- There can be no assurances that an UltraSector ProFund
will grow to an economically viable size, in which case management may
determine to liquidate the UltraSector ProFund at a time that may not
be opportune for shareholders.
The investment objective of each UltraSector ProFund is non-fundamental and
may be changed without shareholder approval. There can be no assurance that
an UltraSector ProFund will achieve its investment objective.
The UltraSector ProFunds:
. Are not federally insured
. Are not guaranteed by any government agency
. Are not bank deposits
. Are not guaranteed to achieve their objectives
Overview 3
<PAGE>
Fund Information
Basic Materials UltraSector ProFund
Fund Strategy
The Basic Materials UltraSector ProFund seeks daily investment results,
before fees and expenses, that correspond to 150% of the performance of the
Dow Jones U.S. Basic Materials Sector Index.
The Index measures the performance of the basic materials economic sector
of the U.S. equity market. Component companies are involved in the
production of aluminum, chemicals, commodities, chemical specialty
products, forest products, non-ferrous mining products, paper products,
precious metals and steel. The Basic Materials UltraSector ProFund
primarily invests in basic material companies or in instruments that
provide exposure to these companies.
As of March 31, 2000, the Index consisted of 87 stocks. Its three largest
stocks were E.I. DuPont de Nemours and Company; Alcoa, Inc. and The Dow
Chemical Company (which comprised 19.44%, 9.07% and 8.73%, respectively, of
its market capitalization). The Basic Materials UltraSector ProFund will
concentrate its investments in a particular industry or group of industries
to approximately the same extent the Index is so concentrated. As of March
31, 2000, the Index was concentrated in chemicals, which comprised 57.63%
of its market capitalization (based on the composition of the Index).
Risk Considerations
In addition to the risks discussed in the Overview for all UltraSector
ProFunds, the Basic Materials UltraSector ProFund is subject to the
following risks:
. Companies in this sector could be adversely affected by commodity price
volatility, exchange rates, import controls and increased competition.
. Production of industrial materials often exceeds demand as a result of
overbuilding or economic downturns, leading to poor investment returns.
. Companies in this sector are at risk for environmental damage and
product liability claims.
. Companies in this sector may be adversely affected by depletion of
resources, technical progress, labor relations, and government
regulations.
. The stocks in the Index may underperform fixed income investments and
stock market indices that track other markets, segments and sectors.
4 Basic Materials UltraSector ProFund
<PAGE>
Fund Performance
Because the Basic Materials UltraSector ProFund is newly formed and has no
investment track record, it has no performance to compare against other
mutual funds or broad measures of securities market performance, such as
indexes.
Fees and Expenses of the Fund
The table below describes the estimated fees and expenses you may pay if
you buy and hold shares of the Basic Materials UltraSector ProFund during
its first year of operations. The Basic Materials UltraSector ProFund is a
"no-load" mutual fund./1/ You pay no sales charge when you buy or sell
shares, or when you reinvest dividends.
Shareholder Fees - Investor Class Shares and Service Class Shares
(paid directly from your investment)
Wire Redemption Fee* $15
*This charge may be waived at the discretion of the ProFunds.
Annual Operating Expenses
(as a percentage of average daily net assets)
Investor Service
Class Class
-------- -------
Management Fees 0.75% 0.75%
Service Fees None 1.00%/1/
Other Expenses 0.60% 0.60%
----- -----
Total Annual ProFund Operating Expenses 1.35% 2.35%
/1/ProFunds has adopted a Shareholder Services Plan pursuant to which each
UltraSector ProFund may pay fees of up to 1.00% of the net asset value of
its Service Class shares to financial intermediaries that agree to provide
services to customers holding Service Class shares. For additional
information concerning the terms of the Shareholder Services Plan and
related service agreements with financial intermediaries, see "Share
Prices, Classes and Tax Information -- Classes of Shares."
Example
The following example illustrates the expenses you would have incurred on a
$10,000 investment in the Basic Materials UltraSector ProFund, and is
intended to help you compare the cost of investing in the Basic Materials
UltraSector ProFund compared to other mutual funds. The example assumes
that you invest for the time periods shown and redeem all of your shares at
the end of each period, that the Basic Materials UltraSector ProFund earns
an annual return of 5% over the periods shown, that you reinvest all
dividends and distributions, and that gross operating expenses remain
constant. Because this example is hypothetical and for comparison only,
your actual costs will be different.
1 YEAR 3 YEARS
------ -------
Investor Class $137 $428
Service Class $238 $733
Basic Materials UltraSector ProFund 5
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Fund Information
Biotechnology UltraSector ProFund
Fund Strategy
The Biotechnology UltraSector ProFund seeks daily investment results,
before fees and expenses, that correspond to 150% of the performance of the
Dow Jones U.S. Biotechnology Index.
The Index measures the performance of the biotechnology sector of the U.S.
equity market. Component companies include those engaged in genetic
research, and/or the marketing and development of recombinant DNA products.
Makers of artificial blood and contract biotechnology researchers are also
included in the Index. The Biotechnology UltraSector ProFund primarily
invests in biotechnology companies or in instruments that provide exposure
to these companies. Companies represented in this sector in which the
Biotechnology UltraSector ProFund may invest include companies that may be
newly-formed and that have relatively small market capitalizations.
As of March 31, 2000, the Index consisted of 47 stocks. Its three largest
stocks were Amgen, Inc., Monsanto Co., and Immunex Corp. (which comprised
26.95%, 14.05%, and 13.44%, respectively, of its market capitalization).
The Biotechnology UltraSector Profund will concentrate its investments in a
particular industry or group of industries to approximately the same extent
the Index is so concentrated.
Risk Considerations
In addition to risks discussed in the Overview for all UltraSector
ProFunds, the Biotechnology UltraSector ProFund is subject to the following
risks:
. Biotechnology companies are heavily dependent on patents and
intellectual property rights. The loss or impairment of such rights may
adversely affect the profitability of these companies.
. Companies in this sector are subject to risks of new technologies and
competitive pressures.
. Companies in this sector spend heavily on research and development and
their products or services may not prove commercially successful or may
become obsolete quickly.
. Biotechnology companies are subject to regulations by, and restrictions
of, the Food and Drug Administration, the Environmental Protection
Agency, state and local governments, and foreign regulatory
authorities.
. Companies in this sector may be thinly capitalized, and may have
limited product lines, markets, financial resources or personnel.
. The stocks in the Index may underperform fixed income investments and
stock market indices that track other markets, segments and sectors.
6 Biotechnology UltraSector ProFund
<PAGE>
Fund Performance
Because the Biotechnology UltraSector ProFund is newly formed and has no
investment track record, it has no performance to compare against other
mutual funds or broad measures of securities market performance, such as
indexes.
Fees and Expenses of the Fund
The table below describes the estimated fees and expenses you may pay if
you buy and hold shares of the Biotechnology UltraSector ProFund during its
first year of operations. The Biotechnology UltraSector ProFund is a "no-
load" mutual fund./1/ You pay no sales charge when you buy or sell shares,
or when you reinvest dividends.
Shareholder Fees - Investor Class Shares and Service Class Shares
(paid directly from your investment)
Wire Redemption Fee* $15
*This charge may be waived at the discretion of the ProFunds.
Annual Operating Expenses
(as a percentage of average daily net assets)
Investor Service
Class Class
-------- -------
Management Fees 0.75% 0.75%
Service Fees None 1.00%/1/
Other Expenses 0.60% 0.60%
----- -----
Total Annual ProFund Operating Expenses 1.35% 2.35%
/1/ProFunds has adopted a Shareholder Services Plan pursuant to which each
UltraSector ProFund may pay fees of up to 1.00% of the net asset value of
its Service Class shares to financial intermediaries that agree to provide
services to customers holding Service Class shares. For additional
information concerning the terms of the Shareholder Services Plan and
related service agreements with financial intermediaries, see "Share
Prices, Classes and Tax Information -- Classes of Shares."
Example
The following example illustrates the expenses you would have incurred on a
$10,000 investment in the Biotechnology UltraSector ProFund, and is
intended to help you compare the cost of investing in the Biotechnology
UltraSector ProFund compared to other mutual funds. The example assumes
that you invest for the time periods shown and redeem all of your shares at
the end of each period, that the Biotechnology UltraSector ProFund earns an
annual return of 5% over the periods shown, that you reinvest all dividends
and distributions, and that gross operating expenses remain constant.
Because this example is hypothetical and for comparison only, your actual
costs will be different.
1 YEAR 3 YEARS
------ -------
Investor Class $137 $428
Service Class $238 $733
Biotechnology UltraSector ProFund 7
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Fund Information
Consumer Cyclical UltraSector ProFund
Fund Strategy
The Consumer Cyclical UltraSector ProFund seeks daily investment results,
before fees and expenses, that correspond to 150% of the performance of the
Dow Jones U.S. Consumer Cyclical Sector Index.
The Index measures the performance of the consumer cyclical economic sector
of the U.S. equity market. Component companies include airlines, auto
manufacturers, tire and rubber manufacturers, auto parts suppliers,
casinos, toy manufacturers, restaurant chains, home construction companies,
lodging chains, broadline retailers, specialty retailers, footwear and
clothing/fabric manufacturers, and media companies, such as advertising
companies, entertainment and leisure companies, consumer electronic
companies, broadcasters and publishers. The Consumer Cyclical UltraSector
ProFund primarily invests in consumer cyclical companies or in instruments
that provide exposure to these companies.
As of March 31, 2000, the Index consisted of 343 stocks. Its three largest
stocks were Wal-Mart Stores, Inc., The Home Depot, Inc. and Time Warner,
Inc. (which comprised 12.65%, 7.60% and 6.00%, respectively, of its market
capitalization).
Risk Considerations
In addition to the risks discussed in the Overview for all the UltraSector
ProFunds, the Consumer Cyclical UltraSector ProFund is subject to the
following risks:
. The success of consumer product manufacturers and retailers is tied
closely to the performance of the domestic and international economy,
interest rates, competition and consumer confidence.
. The success of companies in this sector depends heavily on disposable
household income and consumer spending.
. Companies in this sector are subject to severe competition.
. Changes in demographics and consumer tastes can affect the success of
consumer products.
. The stocks in the Index may underperform fixed income investments and
stock market indices that track other markets, segments and sectors.
8 Consumer Cyclical UltraSector ProFund
<PAGE>
Fund Performance
Because the Consumer Cyclical UltraSector ProFund is newly formed and has
no investment track record, it has no performance to compare against other
mutual funds or broad measures of securities market performance, such as
indexes.
Fees and Expenses of the Fund
The table below describes the estimated fees and expenses you may
pay if you buy and hold shares of the Consumer Cyclical UltraSector
ProFund during its first year of operations. The Consumer Cyclical
UltraSector ProFund is a "no-load" mutual fund./1/ You pay no sales charge
when you buy or sell shares, or when you reinvest dividends.
Shareholder Fees - Investor Class Shares and Service Class Shares
(paid directly from your investment)
Wire Redemption Fee* $15
*This charge may be waived at the discretion of the ProFunds.
Annual Operating Expenses
(as a percentage of average daily net assets)
Investor Service
Class Class
-------- -------
Management Fees 0.75% 0.75%
Service Fees None 1.00%/1/
Other Expenses 0.60% 0.60%
----- -----
Total Annual ProFund Operating Expenses 1.35% 2.35%
/1/ProFunds has adopted a Shareholder Services Plan pursuant to which each
UltraSector ProFund may pay fees of up to 1.00% of the net asset value of
its Service Class shares to financial intermediaries that agree to provide
services to customers holding Service Class shares. For additional
information concerning the terms of the Shareholder Services Plan and
related service agreements with financial intermediaries, see "Share
Prices, Classes and Tax Information -- Classes of Shares."
Example
The following example illustrates the expenses you would have incurred on a
$10,000 investment in the Consumer Cyclical UltraSector ProFund, and is
intended to help you compare the cost of investing in the Consumer Cyclical
UltraSector ProFund compared to other mutual funds. The example assumes
that you invest for the time periods shown and redeem all of your shares at
the end of each period, that the Consumer Cyclical UltraSector ProFund
earns an annual return of 5% over the periods shown, that you reinvest all
dividends and distributions, and that gross operating expenses remain
constant. Because this example is hypothetical and for comparison only,
your actual costs will be different.
1 YEAR 3 YEARS
------ -------
Investor Class $137 $428
Service Class $238 $733
Consumer Cyclical UltraSector ProFund 9
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Fund Information
Consumer Non-Cyclical UltraSector ProFund
Fund Strategy
The Consumer Non-Cyclical UltraSector ProFund seeks daily investment
results, before fees and expenses, that correspond to 150% of the
performance of the Dow Jones U.S. Consumer Non-Cyclical Sector Index.
The Index measures the performance of the consumer non-cyclical economic
sector of the U.S. equity market. Component companies include distillers
and brewers, producers of soft drinks, consumer service companies, durable
and non-durable household product manufacturers, cosmetic companies, food
retailers, other food companies, tobacco and agricultural companies. The
Consumer Non-Cyclical UltraSector ProFund primarily invests in consumer
non-cyclical companies or in instruments that provide exposure to these
companies.
As of March 31, 2000, the Index consisted of 148 stocks. Its three largest
stocks were America Online, Inc., The Coca-Cola Company and Yahoo Inc.
(which comprised 13.77%, 10.40% and 8.10%, respectively, of its market
capitalization). The Consumer Non-Cyclical UltraSector ProFund will
concentrate its investments in a particular industry or group of industries
to approximately the extent the Index is so concentrated. As of March 31,
2000, the Index was concentrated in food and beverage, and consumer
services, which comprised 34.44% and 31.29%, respectively, of its market
capitalization (based on the composition of the Index).
Risk Considerations
In addition to the risks discussed in the Overview for all the UltraSector
ProFunds, the Consumer Non-Cyclical UltraSector ProFund is subject to the
following risks:
. Governmental regulation affecting the permissibility of using various
food additives and production methods could affect the profitability of
companies in this sector.
. Tobacco companies may be adversely affected by new laws and/or by
litigation.
. The success of food, soft drink and fashion related products might be
strongly affected by fads, marketing campaigns and other factors
affecting supply and demand.
. The products of internet-related and software companies may face
product obsolescence due to rapid technological developments and
frequent new product introduction.
. Software and computer companies are heavily dependent on patents and
intellectual property rights. The loss or impairment of such rights may
adversely affect the profitability of these companies.
. The stocks in the Index may underperform fixed income investments and
stock market indices that track other markets, segments and sectors.
10 Consumer Non-Cyclical UltraSector ProFund
<PAGE>
Fund Performance
Because the Consumer Non-Cyclical UltraSector ProFund is newly formed and
has no investment track record, it has no performance to compare against
other mutual funds or broad measures of securities market performance, such
as indexes.
Fees and Expenses of the Fund
The table below describes the estimated fees and expenses you may pay if
you buy and hold shares of the Consumer Non-Cyclical UltraSector ProFund
during its first year of operations. The Consumer Non-Cyclical UltraSector
ProFund is a "no-load" mutual fund./1/ You pay no sales charge when you buy
or sell shares, or when you reinvest dividends.
Shareholder Fees - Investor Class Shares and Service Class Shares
(paid directly from your investment)
Wire Redemption Fee* $15
*This charge may be waived at the discretion of the ProFunds.
Annual Operating Expenses
(as a percentage of average daily net assets)
Investor Service
Class Class
-------- -------
Management Fees 0.75% 0.75%
Service Fees None 1.00%/1/
Other Expenses 0.60% 0.60%
----- -----
Total Annual ProFund Operating Expenses 1.35% 2.35%
/1/ProFunds has adopted a Shareholder Services Plan pursuant to which each
UltraSector ProFund may pay fees of up to 1.00% of the net asset value of
its Service Class shares to financial intermediaries that agree to provide
services to customers holding Service Class shares. For additional
information concerning the terms of the Shareholder Services Plan and
related service agreements with financial intermediaries, see "Share
Prices, Classes and Tax Information -- Classes of Shares."
Example
The following example illustrates the expenses you would have incurred on a
$10,000 investment in the Consumer Non-Cyclical UltraSector ProFund, and is
intended to help you compare the cost of investing in the Consumer Non-
Cyclical UltraSector ProFund compared to other mutual funds. The example
assumes that you invest for the time periods shown and redeem all of your
shares at the end of each period, that the Consumer Non-Cyclical
UltraSector ProFund earns an annual return of 5% over the periods shown,
that you reinvest all dividends and distributions, and that gross operating
expenses remain constant. Because this example is hypothetical and for
comparison only, your actual costs will be different.
1 YEAR 3 YEARS
------ -------
Investor Class $137 $428
Service Class $238 $733
Consumer Non-Cyclical UltraSector ProFund 11
<PAGE>
Fund Information
Energy UltraSector ProFund
Fund Strategy
The Energy UltraSector ProFund seeks daily investment results, before fees
and expenses, that correspond to 150% of the performance of the Dow Jones
U.S. Energy Sector Index.
The Index measures the performance of the energy sector of the U.S. equity
market. Component companies include oil equipment and services, oil-major,
oil-secondary and pipelines. The Energy UltraSector ProFund primarily
invests in energy companies or in instruments that provide exposure to
these companies.
As of March 31, 2000, the Index consisted of 88 stocks. Its three largest
stocks were Exxon Mobil Corporation, Chevron Corporation and Schlumberger
Limited (which comprised 37.95%, 8.55% and 5.93%, respectively, of its
market capitalization). The Energy UltraSector ProFund will concentrate its
investments in a particular industry or group of industries to
approximately the same extent the Index is so concentrated. As of March 31,
2000, the Index was concentrated in oil and gas, which comprised 99.88% of
its market capitalization (based on the composition of the Index).
Risk Considerations
In addition to the risks discussed in the Overview for all UltraSector
ProFunds, the Energy UltraSector ProFund is subject to the following risks:
. The profitability of companies in this sector is related to worldwide
energy prices and exploration, and production spending.
. Companies in this sector could be adversely affected by changes in
exchange rates.
. Companies in this sector are affected by government regulation, world
events and economic conditions, and are subject to market, economic and
political risks of the countries where energy companies are located or
do business.
. Companies in this sector are at risk for environmental damage claims.
. The stocks in the Index may underperform fixed income investments and
stock market indices that track other markets, segments and sectors.
12 Energy UltraSector ProFund
<PAGE>
Fund Performance
Because the Energy UltraSector ProFund is newly formed and has no investment
track record, it has no performance to compare against other mutual funds or
broad measures of securities market performance, such as indexes.
Fees and Expenses of the Fund
The table below describes the estimated fees and expenses you may pay if
you buy and hold shares of the Energy UltraSector ProFund during its first
year of operations. The Energy UltraSector ProFund is a "no-load" mutual
fund./1/ You pay no sales charge when you buy or sell shares, or when you
reinvest dividends.
Shareholder Fees - Investor Class Shares and Service Class Shares
(paid directly from your investment)
Wire Redemption Fee* $15
*This charge may be waived at the discretion of the ProFunds.
Annual Operating Expenses
(as a percentage of average daily net assets)
Investor Service
Class Class
-------- -------
Management Fees 0.75% 0.75%
Service Fees None 1.00%/1/
Other Expenses 0.60% 0.60%
----- -----
Total Annual ProFund Operating Expenses 1.35% 2.35%
/1/ProFunds has adopted a Shareholder Services Plan pursuant to which each
UltraSector ProFund may pay fees of up to 1.00% of the net asset value of
its Service Class shares to financial intermediaries that agree to provide
services to customers holding Service Class shares. For additional
information concerning the terms of the Shareholder Services Plan and
related service agreements with financial intermediaries, see "Share
Prices, Classes and Tax Information -- Classes of Shares."
Example
The following example illustrates the expenses you would have incurred on a
$10,000 investment in the Energy UltraSector ProFund, and is intended to
help you compare the cost of investing in the Energy UltraSector ProFund
compared to other mutual funds. The example assumes that you invest for the
time periods shown and redeem all of your shares at the end of each period,
that the Energy UltraSector ProFund earns an annual return of 5% over the
periods shown, that you reinvest all dividends and distributions, and that
gross operating expenses remain constant. Because this example is
hypothetical and for comparison only, your actual costs will be different.
1 YEAR 3 YEARS
------ -------
Investor Class $137 $428
Service Class $238 $733
Energy UltraSector ProFund 13
<PAGE>
Fund Information
Financial UltraSector ProFund
Fund Strategy
The Financial UltraSector ProFund seeks daily investment results, before
fees and expenses, that correspond to 150% of the performance of the Dow
Jones U.S. Financial Sector Index.
The Index measures the performance of the financial economic sector of the
U.S. equity market. Component companies include regional banks, major
international banks, insurance companies, companies that invest, directly
or indirectly, in real estate, Fannie Mae, credit card insurers, check
cashing companies, mortgage lenders, investment advisors, savings and
loans, savings banks, thrifts, building associations and societies, credit
unions, securities broker-dealers, including investment banks and merchant
banks, online brokers, publicly traded stock exchanges, and specialty
finance companies. The Financial UltraSector ProFund primarily invests in
financial services companies or in instruments that provide exposure to
these companies.
As of March 31, 2000, the Index consisted of 344 stocks. Its three largest
stocks were Citigroup, Inc., American International Group, Inc. (AIG) and
Morgan Stanley Dean Witter Discover & Company (which comprised 10.10%,
8.56% and 4.68%, respectively, of its market capitalization). The Financial
UltraSector Profund will concentrate its investments in a particular
industry or group of industries to approximately the same extent the Index
is so concentrated. As of March 31, 2000, the Index was concentrated in
specialty finance and banks, which comprised 41.75% and 35.08%,
respectively, of its market capitalization (based on the composition of the
Index).
Risk Considerations
In addition to the risks discussed in the Overview for all UltraSector
ProFunds, the Financial UltraSector ProFund is subject to the following
risks:
. Companies in this sector are subject to extensive governmental
regulation that affects the scope of their activities, the prices they
can charge and the amount of capital they must maintain.
. The profitability of companies in this sector is adversely affected by
increases in interest rates.
. The profitability of companies in this sector is adversely affected by
loan losses, which usually increase in economic downturns.
. Insurance companies may be subject to severe price competition.
. Newly enacted laws are expected to result in increased inter-industry
consolidation and competition in the financial sector.
. The stocks in the Index may underperform fixed income investments and
stock market indices that track other markets, segments and sectors.
14 Financial UltraSector ProFund
<PAGE>
Fund Performance
Because the Financial UltraSector ProFund is newly formed and has no
investment track record, it has no performance to compare against other
mutual funds or broad measures of securities market performance, such as
indexes.
Fees and Expenses of the Fund
The table below describes the estimated fees and expenses you may pay if
you buy and hold shares of the Financial UltraSector ProFund during its
first year of operations. The Financial UltraSector ProFund is a "no-load"
mutual fund./1/ You pay no sales charge when you buy or sell shares, or
when you reinvest dividends.
Shareholder Fees - Investor Class Shares and Service Class Shares
(paid directly from your investment)
Wire Redemption Fee* $15
*This charge may be waived at the discretion of the ProFunds.
Annual Operating Expenses
(as a percentage of average daily net assets)
Investor Service
Class Class
-------- -------
Management Fees 0.75% 0.75%
Service Fees None 1.00%/1/
Other Expenses 0.60% 0.60%
----- -----
Total Annual ProFund Operating Expenses 1.35% 2.35%
/1/ProFunds has adopted a Shareholder Services Plan pursuant to which each
UltraSector ProFund may pay fees of up to 1.00% of the net asset value of
its Service Class shares to financial intermediaries that agree to provide
services to customers holding Service Class shares. For additional
information concerning the terms of the Shareholder Services Plan and
related service agreements with financial intermediaries, see "Share
Prices, Classes and Tax Information -- Classes of Shares."
Example
The following example illustrates the expenses you would have incurred on a
$10,000 investment in the Financial UltraSector ProFund, and is intended to
help you compare the cost of investing in the Financial UltraSector ProFund
compared to other mutual funds. The example assumes that you invest for the
time periods shown and redeem all of your shares at the end of each period,
that the Financial UltraSector ProFund earns an annual return of 5% over
the periods shown, that you reinvest all dividends and distributions, and
that gross operating expenses remain constant. Because this example is
hypothetical and for comparison only, your actual costs will be different.
1 YEAR 3 YEARS
------ -------
Investor Class $137 $428
Service Class $238 $733
Financial UltraSector ProFund 15
<PAGE>
Fund Information
Healthcare UltraSector ProFund
Fund Strategy
The Healthcare UltraSector ProFund seeks daily investment results, before
fees and expenses, that correspond to 150% of the performance of the Dow
Jones U.S. Healthcare Sector Index.
The Index measures the performance of the healthcare sector of the U.S.
equity market. Component companies include health care providers,
biotechnology companies and manufacturers of medical supplies, advanced
medical devices and pharmaceuticals. The Healthcare UltraSector ProFund
primarily invests in healthcare companies or in instruments that provide
exposure to these companies.
As of March 31, 2000, the Index consisted of 171 stocks. Its three largest
stocks were Merck & Company, Inc., Pfizer Inc. and Bristol-Myers Squibb
Company (which comprised 10.42%, 10.15% and 8.22%, respectively, of its
market capitalization). The Healthcare UltraSector Profund will concentrate
its investments in a particular industry or group of industries to
approximately the same extent the Index is so concentrated. As of March 31,
2000, the Index was concentrated in pharmaceuticals and biotechnology,
which comprised 78.29% of its market capitalization (based on the
composition of the Index).
Risk Considerations
In addition to the risks discussed in the Overview for all UltraSector
ProFunds, the Healthcare UltraSector ProFund is subject to the following
risks:
. Many companies in this sector are heavily dependent on patent
protection. The expiration of patents may adversely affect the
profitability of these companies.
. Companies in this sector are subject to extensive litigation based on
product liability and similar claims.
. Companies in this sector are subject to competitive forces that may
make it difficult to raise prices and, in fact, may result in price
discounting.
. Many new products in this sector are subject to the approval of the
Food and Drug Administration. The process of obtaining such approval
can be long and costly.
. Companies in this sector may be susceptible to product obsolescence.
. The stocks in the Index may underperform fixed income investments and
stock market indices that track other markets, segments and sectors.
. Companies in this sector may be thinly capitalized.
16 Healthcare UltraSector ProFund
<PAGE>
Fund Performance
Because the Healthcare UltraSector ProFund is newly formed and has no
investment track record, it has no performance to compare against other
mutual funds or broad measures of securities market performance, such as
indexes.
Fees and Expenses of the Fund
The table below describes the estimated fees and expenses you may pay if
you buy and hold shares of the Healthcare UltraSector ProFund during its
first year of operations. The Healthcare UltraSector ProFund is a "no-load"
mutual fund./1/ You pay no sales charge when you buy or sell shares, or
when you reinvest dividends.
Shareholder Fees - Investor Class Shares and Service Class Shares
(paid directly from your investment)
Wire Redemption Fee* $15
*This charge may be waived at the discretion of the ProFunds.
Annual Operating Expenses
(as a percentage of average daily net assets)
Investor Service
Class Class
-------- -------
Management Fees 0.75% 0.75%
Service Fees None 1.00%/1/
Other Expenses 0.60% 0.60%
----- -----
Total Annual ProFund Operating Expenses 1.35% 2.35%
/1/ProFunds has adopted a Shareholder Services Plan pursuant to which each
UltraSector ProFund may pay fees of up to 1.00% of the net asset value of
its Service Class shares to financial intermediaries that agree to provide
services to customers holding Service Class shares. For additional
information concerning the terms of the Shareholder Services Plan and
related service agreements with financial intermediaries, see "Share
Prices, Classes and Tax Information -- Classes of Shares."
Example
The following example illustrates the expenses you would have incurred on a
$10,000 investment in the Healthcare UltraSector ProFund, and is intended
to help you compare the cost of investing in the Healthcare UltraSector
ProFund compared to other mutual funds. The example assumes that you invest
for the time periods shown and redeem all of your shares at the end of each
period, that the Healthcare UltraSector ProFund earns an annual return of
5% over the periods shown, that you reinvest all dividends and
distributions, and that gross operating expenses remain constant. Because
this example is hypothetical and for comparison only, your actual costs
will be different.
1 YEAR 3 YEARS
------ -------
Investor Class $137 $428
Service Class $238 $733
Healthcare UltraSector ProFund 17
<PAGE>
Fund Information
Industrial UltraSector ProFund
Fund Strategy
The Industrial UltraSector ProFund seeks daily investment results, before
fees and expenses, that correspond to 150% of the performance of the Dow
Jones U.S. Industrial Sector Index.
The Index measures the performance of the industrial sector of the U.S.
equity market. Component companies include aerospace and defense companies,
advanced industrial companies, equipment manufacturers, air freight
companies, building material manufacturers, packaging companies,
manufacturers of electrical components and equipment, heavy construction
companies, manufacturers of heavy machinery, industrial services companies,
industrial companies, marine transportation companies, railroads,
shipbuilders, and trucking companies. The Industrial UltraSector ProFund
primarily invests in industrial companies or in instruments that provide
exposure to these companies.
As of March 31, 2000, the Index consisted of 382 stocks. Its three largest
stocks were General Electric Company, Tyco International Ltd. and JDS
Uniphase Corporation (which comprised 27.57%, 4.66% and 4.10%,
respectively, of its market capitalization). The Industrial UltraSector
Profund will concentrate its investments in a particular industry or group
of industries to approximately the same extent the Index is so
concentrated. As of March 31, 2000, the Index was concentrated in
industrial diversified, which comprised 46.74% of its market capitalization
(based on the composition of the Index).
Risk Considerations
In addition to the risks discussed in the Overview for all UltraSector
ProFunds, the Industrial UltraSector ProFund is subject to the following
risks:
. The stock prices of companies in this sector are affected by supply and
demand both for their specific product or service and for industrial
sector products in general.
. The products of manufacturing companies may face product obsolescence
due to rapid technological developments and frequent new product
introduction.
. Government regulation, world events and economic conditions affect the
performance of companies in this sector.
. Companies in this sector are at risk for environmental damage and
product liability claims.
. The stocks in the Index may underperform fixed income investments and
stock market indices that track other markets, segments and sectors.
18 Industrial UltraSector ProFund
<PAGE>
Fund Performance
Because the Industrial UltraSector ProFund is newly formed and has no
investment track record, it has no performance to compare against other
mutual funds or broad measures of securities market performance, such as
indexes.
Fees and Expenses of the Fund
The table below describes the estimated fees and expenses you may pay if
you buy and hold shares of the Industrial UltraSector ProFund during its
first year of operations. The Industrial UltraSector ProFund is a "no-load"
mutual fund./1/ You pay no sales charge when you buy or sell shares, or
when you reinvest dividends.
Shareholder Fees - Investor Class Shares and Service Class Shares
(paid directly from your investment)
Wire Redemption Fee* $15
*This charge may be waived at the discretion of the ProFunds.
Annual Operating Expenses
(as a percentage of average daily net assets)
Investor Service
Class Class
-------- -------
Management Fees 0.75% 0.75%
Service Fees None 1.00%/1/
Other Expenses 0.60% 0.60%
----- -----
Total Annual ProFund Operating Expenses 1.35% 2.35%
/1/ProFunds has adopted a Shareholder Services Plan pursuant to which each
UltraSector ProFund may pay fees of up to 1.00% of the net asset value of
its Service Class shares to financial intermediaries that agree to provide
services to customers holding Service Class shares. For additional
information concerning the terms of the Shareholder Services Plan and
related service agreements with financial intermediaries, see "Share
Prices, Classes and Tax Information -- Classes of Shares."
Example
The following example illustrates the expenses you would have incurred on a
$10,000 investment in the Industrial UltraSector ProFund, and is intended
to help you compare the cost of investing in the Industrial UltraSector
ProFund compared to other mutual funds. The example assumes that you invest
for the time periods shown and redeem all of your shares at the end of each
period, that the Industrial UltraSector ProFund earns an annual return of
5% over the periods shown, that you reinvest all dividends and
distributions, and that gross operating expenses remain constant. Because
this example is hypothetical and for comparison only, your actual costs
will be different.
1 YEAR 3 YEARS
------ -------
Investor Class $137 $428
Service Class $238 $733
Industrial UltraSector ProFund 19
<PAGE>
Fund Information
Internet UltraSector ProFund
Fund Strategy
The Internet UltraSector ProFund seeks daily investment results, before
fees and expenses, that correspond to 150% of the performance of the Dow
Jones U.S. Internet Index.
The Index measures the performance of stocks in the U.S. equity markets
that generate the majority of their revenues from the Internet. The Index
is comprised of two sub-groups:
. Internet Commerce: companies that derive the majority of their revenues
from providing goods and/or services through an open network, such as a
web site.
. Internet Services: companies that derive the majority of their revenues
from providing access to the Internet or providing enabling services to
people using the Internet.
The Internet UltraSector ProFund primarily invests in internet companies or
in instruments that provide exposure to these companies.
As of March 31, 2000, the Index consisted of 40 stocks. Its three largest
stocks were America Online, Inc., CMGI, Inc. and Exodus Communications,
Inc. (which comprised 10.59%, 7.29% and 5.92%, respectively, of its market
capitalization). The Fund will concentrate its investments in a particular
industry or group of industries to approximately the same extent the Index
is so concentrated. As of March 31, 2000, the Index was concentrated in
general industrial services and consumer services, which comprised 32.06%
and 29.65% of its market capitalization (based on the composition of the
Index).
Risk Considerations
In addition to the risks discussed in the Overview for all UltraSector
ProFunds, the Internet UltraSector ProFund is subject to the following
risks:
. Companies in this sector spend heavily on research and development and
their products or services may not prove commercially successful or may
become obsolete quickly.
. The Internet sector may be subject to greater governmental regulation
than other sectors and changes in governmental policies and the need
for regulatory approvals may have a material adverse effect on this
sector.
. Companies in this sector are subject to risks of new technologies and
competitive pressures.
. Companies in this sector are heavily dependent on patents and
intellectual property rights. The loss or impairment of these rights
may adversely affect the profitability of these companies.
. The stocks in the Index may underperform fixed income investments and
stock market indices that track other markets, segments and sectors.
20 Internet UltraSector ProFund
<PAGE>
Fund Performance
Because the Internet UltraSector ProFund is newly formed and has no
investment track record, it has no performance to compare against other
mutual funds or broad measures of securities market performance, such as
indexes.
Fees and Expenses of the Fund
The table below describes the estimated fees and expenses you may pay if
you buy and hold shares of the Internet UltraSector ProFund during its
first year of operations. The Internet UltraSector ProFund is a "no-load"
mutual fund./1/ You pay no sales charge when you buy or sell shares, or
when you reinvest dividends.
Shareholder Fees - Investor Class Shares and Service Class Shares
(paid directly from your investment)
Wire Redemption Fee* $15
*This charge may be waived at the discretion of the ProFunds.
Annual Operating Expenses
(as a percentage of average daily net assets)
Investor Service
Class Class
-------- -------
Management Fees 0.75% 0.75%
Service Fees None 1.00%/1/
Other Expenses 0.60% 0.60%
----- -----
Total Annual ProFund Operating Expenses 1.35% 2.35%
/1/ProFunds has adopted a Shareholder Services Plan pursuant to which each
UltraSector ProFund may pay fees of up to 1.00% of the net asset value of
its Service Class shares to financial intermediaries that agree to provide
services to customers holding Service Class shares. For additional
information concerning the terms of the Shareholder Services Plan and
related service agreements with financial intermediaries, see "Share
Prices, Classes and Tax Information -- Classes of Shares."
Example
The following example illustrates the expenses you would have incurred on a
$10,000 investment in the Internet UltraSector ProFund, and is intended to
help you compare the cost of investing in the Internet UltraSector ProFund
compared to other mutual funds. The example assumes that you invest for the
time periods shown and redeem all of your shares at the end of each period,
that the Internet UltraSector ProFund earns an annual return of 5% over the
periods shown, that you reinvest all dividends and distributions, and that
gross operating expenses remain constant. Because this example is
hypothetical and for comparison only, your actual costs will be different.
1 YEAR 3 YEARS
------ -------
Investor Class $137 $428
Service Class $238 $733
Internet UltraSector ProFund 21
<PAGE>
Fund Information
Pharmaceuticals UltraSector ProFund
Fund Strategy
The Pharmaceuticals UltraSector ProFund seeks daily investment results,
before fees and expenses, that correspond to 150% of the performance of the
Dow Jones U.S. Pharmaceuticals Index.
The Index measures the performance of the pharmaceuticals sector of the
U.S. equity market. Component companies include the makers of prescription
and over-the-counter drugs, such as aspirin, cold remedies, birth control
pills, and vaccines, as well as companies engaged in contract drug
research. The Pharmaceuticals UltraSector ProFund primarily invests in
pharmaceutical companies or in instruments that provide exposure to these
companies.
As of March 31, 2000, the Index consisted of 42 stocks. Its three largest
stocks were Merck & Co., Inc., Pfizer, Inc., and Bristol-Myers Squibb
(which comprised 16.79%, 16.37%, and 13.25%, respectively, of its market
capitalization). The Pharmaceuticals UltraSector Profund will concentrate
its investments in a particular industry or group of industries to
approximately the same extent the Index is so concentrated.
Risk Considerations
In addition to the risks discussed in the Overview for all the UltraSector
ProFunds, the Pharmaceuticals UltraSector ProFund is subject to the
following risks:
. The prices of the securities of pharmaceuticals companies may fluctuate
widely due to government regulation and approval of their products and
services, which can have a significant effect on their price and
availability.
. Companies in this sector spend heavily on research and development and
their products and services may not prove commercially successful or
may become obsolete quickly.
. Liability for products that are later alleged to be harmful or unsafe
may be substantial, and may have a significant impact on a
pharmaceutical company's market value and/or share price.
. Companies in this sector are affected by government regulation, world
events and economic conditions, and are subject to market, economic and
political risks of the countries where pharmaceutical companies are
located or do business.
. The stocks in the Index may underperform fixed income investments and
stock market indices that track other markets, segments and sectors.
22 Pharmaceuticals UltraSector ProFund
<PAGE>
Fund Performance
Because the Pharmaceuticals UltraSector ProFund is newly formed and has no
investment track record, it has no performance to compare against other
mutual funds or broad measures of securities market performance, such as
indexes.
Fees and Expenses of the Fund
The table below describes the estimated fees and expenses you may pay if
you buy and hold shares of the Pharmaceuticals UltraSector ProFund during
its first year of operations. The Pharmaceuticals UltraSector ProFund is a
"no-load" mutual fund./1/ You pay no sales charge when you buy or sell
shares, or when you reinvest dividends.
Shareholder Fees - Investor Class Shares and Service Class Shares
(paid directly from your investment)
Wire Redemption Fee* $15
*This charge may be waived at the discretion of the ProFunds.
Annual Operating Expenses
(as a percentage of average daily net assets)
Investor Service
Class Class
-------- -------
Management Fees 0.75% 0.75%
Service Fees None 1.00%/1/
Other Expenses 0.60% 0.60%
----- -----
Total Annual ProFund Operating Expenses 1.35% 2.35%
/1/ProFunds has adopted a Shareholder Services Plan pursuant to which each
UltraSector ProFund may pay fees of up to 1.00% of the net asset value of
its Service Class shares to financial intermediaries that agree to provide
services to customers holding Service Class shares. For additional
information concerning the terms of the Shareholder Services Plan and
related service agreements with financial intermediaries, see "Share
Prices, Classes and Tax Information -- Classes of Shares."
Example
The following example illustrates the expenses you would have incurred on a
$10,000 investment in the Pharmaceuticals UltraSector ProFund, and is
intended to help you compare the cost of investing in the Pharmaceuticals
UltraSector ProFund compared to other mutual funds. The example assumes
that you invest for the time periods shown and redeem all of your shares at
the end of each period, that the Pharmaceuticals UltraSector ProFund earns
an annual return of 5% over the periods shown, that you reinvest all
dividends and distributions, and that gross operating expenses remain
constant. Because this example is hypothetical and for comparison only,
your actual costs will be different.
1 YEAR 3 YEARS
------ -------
Investor Class $137 $428
Service Class $238 $733
Pharmaceuticals UltraSector ProFund 23
<PAGE>
Fund Information
Precious Metals UltraSector ProFund
Fund Strategy
The Precious Metals UltraSector ProFund seeks daily investment results,
before fees and expenses, that correspond to 150% of the performance of the
Dow Jones U.S. Precious Metals Index.
The Index measures the performance of the precious metals economic sector
of the U.S. equity market. Component companies include companies involved
in the mining and production of gold, silver, and other precious metals.
This also includes companies involved in the mining and production of
precious stones, such as diamonds, or the harvesting and production of
pearls. This does not include, however, producers of commemorative medals
and coins that are made of these metals or stones. The Precious Metals
UltraSector ProFund primarily invests in precious metal companies or in
instruments that provide exposure to these companies.
As of March 31, 2000, the Index consisted of 5 stocks. Its three largest
stocks were Newmont Mining Corp., Homestake Mining Co., and Freeport-
McMoRan Copper & Gold, Inc., Class B (which comprised 51.18%, 20.71%, and
16.21%, respectively, of its market capitalization). The Precious Metals
UltraSector ProFund will concentrate its investments in a particular
industry or group of industries to approximately the same extent the Index
is so concentrated.
Risk Considerations
In addition to the risks discussed in the Overview for all UltraSector
ProFunds, the Precious Metals UltraSector ProFund is subject to the
following of risks:
. The prices of precious metals may fluctuate widely due to changes in
inflation or inflation expectations or currency fluctuations.
. Speculation, worldwide demand.
. Companies in this sector are affected by government regulation, world
events and economic conditions, and are subject to market, economic and
political risks of the countries where precious metals companies are
located or do business.
. Companies in this sector may be thinly capitalized, and may have
limited product lines, markets, financial resources or personnel.
. The stocks in the Index may underperform fixed income investments and
stock market indices that track other markets, segments and sectors.
24 Precious Metals UltraSector ProFund
<PAGE>
Fund Performance
Because the Precious Metals UltraSector ProFund is newly formed and has no
investment track record, it has no performance to compare against other
mutual funds or broad measures of securities market performance, such as
indexes.
Fees and Expenses of the Fund
The table below describes the estimated fees and expenses you may pay if
you buy and hold shares of the Precious Metals UltraSector ProFund during
its first year of operations. The Precious Metals UltraSector ProFund is a
"no-load" mutual fund./1/ You pay no sales charge when you buy or sell
shares, or when you reinvest dividends.
Shareholder Fees - Investor Class Shares and Service Class Shares
(paid directly from your investment)
Wire Redemption Fee* $15
*This charge may be waived at the discretion of the ProFunds.
Annual Operating Expenses
(as a percentage of average daily net assets)
Investor Service
Class Class
-------- -------
Management Fees 0.75% 0.75%
Service Fees None 1.00%/1/
Other Expenses 0.60% 0.60%
----- -----
Total Annual ProFund Operating Expenses 1.35% 2.35%
/1/ProFunds has adopted a Shareholder Services Plan pursuant to which each
UltraSector ProFund may pay fees of up to 1.00% of the net asset value of
its Service Class shares to financial intermediaries that agree to provide
services to customers holding Service Class shares. For additional
information concerning the terms of the Shareholder Services Plan and
related service agreements with financial intermediaries, see "Share
Prices, Classes and Tax Information -- Classes of Shares."
Example
The following example illustrates the expenses you would have incurred on a
$10,000 investment in the Precious Metals UltraSector ProFund, and is
intended to help you compare the cost of investing in the Precious Metals
UltraSector ProFund compared to other mutual funds. The example assumes
that you invest for the time periods shown and redeem all of your shares at
the end of each period, that the Precious Metals UltraSector ProFund earns
an annual return of 5% over the periods shown, that you reinvest all
dividends and distributions, and that gross operating expenses remain
constant. Because this example is hypothetical and for comparison only,
your actual costs will be different.
1 YEAR 3 YEARS
------ -------
Investor Class $137 $428
Service Class $238 $733
Precious Metals UltraSector ProFund 25
<PAGE>
Fund Information
Real Estate UltraSector ProFund
Fund Strategy
The Real Estate UltraSector ProFund seeks daily investment results, before
fees and expenses, that correspond to 150% of the performance of the Dow
Jones U.S. Real Estate Index.
The Index measures the performance of the real estate industry sector of
the U.S. equity market. Component companies include hotel and resort
companies and real estate investment trusts ("REITs") that invest in
apartments, office and retail properties. REITs are parked investment
vehicles that invest primarily in income-producing real estate or real
estate related loans or interests. The Real Estate UltraSector ProFund
primarily invests in real estate companies or in instruments that provide
exposure to these companies.
As of March 31, 2000, the Index consisted of 78 stocks. Its three largest
stocks were Equity Office Properties Trust, Equity Residential Properties
Trust and Starwood Hotels & Resorts Worldwide, Inc. (which comprised 6.08%,
4.87% and 4.76%, respectively, of its market capitalization). The Real
Estate UltraSector ProFund will concentrate its investments in a particular
industry or group of industries to approximately the same extent the Index
is so concentrated. As of March 31, 2000, the Index was concentrated in
real estate, which comprised 100% of its market capitalization (based on
the composition of the Index).
Risk Considerations
In addition to the risks discussed in the Overview for all the UltraSector
ProFunds, the Real Estate UltraSector ProFund is subject to the following
of risks:
. Investment in this sector is subject to many of the same risks
associated with the direct ownership of real estate such as:
. Adverse changes in national, state or local real estate conditions
(such as oversupply of or reduced demand for space and changes in
market rental rates);
. Obsolescence of properties;
. Changes in the availability, cost and terms of mortgage funds; and
. The impact of environmental laws.
. A REIT that fails to comply with federal tax requirements affecting
REITs would be subject to federal income taxation.
. The federal tax requirement that a REIT distribute substantially all of
its net income to its shareholders could result in a REIT having
insufficient capital for future expenditures.
. Transactions between REITs and their affiliates may be subject to
conflicts of interest, which may adversely affect shareholders.
. The stocks in the Index may underperform fixed income investments and
stock market indices that track other markets, segments and sectors.
26 Real Estate UltraSector ProFund
<PAGE>
Fund Performance
Because the Real Estate UltraSector ProFund is newly formed and has no
investment track record, it has no performance to compare against other
mutual funds or broad measures of securities market performance, such as
indexes.
Fees and Expenses of the Fund
The table below describes the estimated fees and expenses you may pay if
you buy and hold shares of the Real Estate UltraSector ProFund during its
first year of operations. The Real Estate UltraSector ProFund is a "no-
load" mutual fund./1/ You pay no sales charge when you buy or sell shares,
or when you reinvest dividends.
Shareholder Fees - Investor Class Shares and Service Class Shares
(paid directly from your investment)
Wire Redemption Fee* $15
*This charge may be waived at the discretion of the ProFunds.
Annual Operating Expenses
(as a percentage of average daily net assets)
Investor Service
Class Class
-------- -------
Management Fees 0.75% 0.75%
Service Fees None 1.00%/1/
Other Expenses 0.60% 0.60%
----- -----
Total Annual ProFund Operating Expenses 1.35% 2.35%
/1/ProFunds has adopted a Shareholder Services Plan pursuant to which each
UltraSector ProFund may pay fees of up to 1.00% of the net asset value of
its Service Class shares to financial intermediaries that agree to provide
services to customers holding Service Class shares. For additional
information concerning the terms of the Shareholder Services Plan and
related service agreements with financial intermediaries, see "Share
Prices, Classes and Tax Information -- Classes of Shares."
Example
The following example illustrates the expenses you would have incurred on a
$10,000 investment in the Real Estate UltraSector ProFund, and is intended
to help you compare the cost of investing in the Real Estate UltraSector
ProFund compared to other mutual funds. The example assumes that you invest
for the time periods shown and redeem all of your shares at the end of each
period, that the Real Estate UltraSector ProFund earns an annual return of
5% over the periods shown, that you reinvest all dividends and
distributions, and that gross operating expenses remain constant. Because
this example is hypothetical and for comparison only, your actual costs
will be different.
1 YEAR 3 YEARS
------ -------
Investor Class $137 $428
Service Class $238 $733
Real Estate UltraSector ProFund 27
<PAGE>
Fund Information
Semiconductor UltraSector ProFund
Fund Strategy
The Semiconductor UltraSector ProFund seeks daily investment results,
before fees and expenses, that correspond to 150% of the performance of the
Dow Jones U.S. Semiconductor Index.
The Index measures the performance of the semiconductor sector of the U.S.
equity market. Component companies are engaged in the production of
semiconductors and other integrated chips, as well as other related
products such as circuit boards and motherboards. Companies represented in
this sector in which the Semiconductor UltraSector Profund may invest
include companies that may be newly-formed and that have relatively small
market capitalizations.
As of March 31, 2000, the Index consisted of 68 stocks. Its three largest
stocks were Intel Corp., Texas Instruments, Inc., and Applied Materials,
Inc. (which comprised 38.28%, 11.35%, and 6.56%, respectively, of its
market capitalization). The Semiconductor UltraSector ProFund will
concentrate its investments in a particular industry or group of industries
to approximately the same extent the Index is so concentrated.
Risk Considerations
In addition to the risks discussed in the Overview for all UltraSector
ProFunds, the Semiconductor UltraSector ProFund is subject to the following
risks:
. The prices of the securities of semiconductor companies may fluctuate
widely due to risks of rapid obsolescence of products.
. Intense competition, and may face competition from subsidized foreign
competitors with lower production costs.
. The economic performance of their customers.
. High technology and research costs (especially in light of decreased
defense spending by the U.S. Government), and their products may not
prove commercially successful.
. The stocks in the Index may underperform fixed income investments and
stock market indices that track other markets, segments and sectors.
28 Semiconductor UltraSector Profund
<PAGE>
Fund Performance
Because the Semiconductor UltraSector ProFund is newly formed and has no
investment track record, it has no performance to compare against other
mutual funds or broad measures of securities market performance, such as
indexes.
Fees and Expenses of the Fund
The table below describes the estimated fees and expenses you may pay if
you buy and hold shares of the Semiconductor UltraSector ProFund during its
first year of operations. The Semiconductor UltraSector ProFund is a "no-
load" mutual fund./1/ You pay no sales charge when you buy or sell shares,
or when you reinvest dividends.
Shareholder Fees - Investor Class Shares and Service Class Shares
(paid directly from your investment)
Wire Redemption Fee* $15
*This charge may be waived at the discretion of the ProFunds.
Annual Operating Expenses
(as a percentage of average daily net assets)
Investor Service
Class Class
-------- -------
Management Fees 0.75% 0.75%
Service Fees None 1.00%/1/
Other Expenses 0.60% 0.60%
---- ----
Total Annual ProFund Operating Expenses 1.35% 2.35%
/1/ ProFunds has adopted a Shareholder Services Plan pursuant to which each
UltraSector ProFund may pay fees of up to 1.00% of the net asset value of
its Service Class shares to financial intermediaries that agree to provide
services to customers holding Service Class shares. For additional
information concerning the terms of the Shareholder Services Plan and
related service agreements with financial intermediaries, see "Share
Prices, Classes and Tax Information -- Classes of Shares."
Example
The following example illustrates the expenses you would have incurred on a
$10,000 investment in the Semiconductor UltraSector ProFund, and is
intended to help you compare the cost of investing in the Semiconductor
UltraSector ProFund compared to other mutual funds. The example assumes
that you invest for the time periods shown and redeem all of your shares at
the end of each period, that the Semiconductor UltraSector ProFund earns an
annual return of 5% over the periods shown, that you reinvest all dividends
and distributions, and that gross operating expenses remain constant.
Because this example is hypothetical and for comparison only, your actual
costs will be different.
1 YEAR 3 YEARS
------ -------
Investor Class $137 $428
Service Class $238 $733
Semiconductor UltraSector ProFund 29
<PAGE>
Fund Information
Technology UltraSector ProFund
Fund Strategy
The Technology UltraSector ProFund seeks daily investment results, before
fees and expenses, that correspond to 150% of the performance of the Dow
Jones U.S. Technology Sector Index.
The Index measures the performance of the technology sector of the U.S.
equity market. Component companies include those involved in the
development and production of technology products, including computer
hardware and software, telecommunications equipment, microcomputer
components, integrated computer circuits and office equipment utilizing
technology. The Technology UltraSector ProFund primarily invests in
technology companies or in instruments that provide exposure to these
companies.
As of March 31, 2000, the Index consisted of 319 stocks. Its three largest
stocks were Microsoft Corporation, Cisco Systems Inc. and Intel Corporation
(which comprised 11.56%, 11.05% and 9.21%, respectively, of its market
capitalization). The Technology UltraSector ProFund will concentrate its
investments in a particular industry or group of industries to
approximately the same extent the Index is so concentrated. As of March 31,
2000, the Index was concentrated in hardware and equipment, and software,
which comprised 69.54% and 30.46%, respectively, of its market
capitalization (based on the composition of the Index).
Risk Considerations
In addition to the risks described in the Overview for all UltraSector
ProFunds, the Technology UltraSector ProFund is subject to the following
risks:
. Technology companies face intense competition, both domestically and
internationally.
. Technology companies may have limited product lines, markets,
financial resources or personnel.
. The products of technology companies may face product obsolescence due
to rapid technological developments and frequent new product
introduction.
. Technology companies may face dramatic and often unpredictable changes
in growth rates and competition for the services of qualified
personnel.
. Companies in this sector are heavily dependent on patent and
intellectual property rights. The loss or impairment of these rights
may adversely affect the profitability of these companies.
. The stocks in the Index may underperform fixed income investments and
stock market indices that track other markets, segments and sectors.
30 Technology UltraSector ProFund
<PAGE>
Fund Performance
Because the Technology UltraSector ProFund is newly formed and has no
investment track record, it has no performance to compare against other
mutual funds or broad measures of securities market performance, such as
indexes.
Fees and Expenses of the Fund
The table below describes the estimated fees and expenses you may pay if
you buy and hold shares of the Technology UltraSector ProFund during its
first year of operations. The Technology UltraSector ProFund is a "no-load"
mutual fund./1/ You pay no sales charge when you buy or sell shares, or
when you reinvest dividends.
Shareholder Fees - Investor Class Shares and Service Class Shares
(paid directly from your investment)
Wire Redemption Fee* $15
*This charge may be waived at the discretion of the ProFunds.
Annual Operating Expenses
(as a percentage of average daily net assets)
Investor Service
Class Class
-------- -------
Management Fees 0.75% 0.75%
Service Fees None 1.00%/1/
Other Expenses 0.60% 0.60%
---- ----
Total Annual ProFund Operating Expenses 1.35% 2.35%
/1/ ProFunds has adopted a Shareholder Services Plan pursuant to which each
UltraSector ProFund may pay fees of up to 1.00% of the net asset value of
its Service Class shares to financial intermediaries that agree to provide
services to customers holding Service Class shares. For additional
information concerning the terms of the Shareholder Services Plan and
related service agreements with financial intermediaries, see "Share
Prices, Classes and Tax Information -- Classes of Shares."
Example
The following example illustrates the expenses you would have incurred on a
$10,000 investment in the Technology UltraSector ProFund, and is intended
to help you compare the cost of investing in the Technology UltraSector
ProFund compared to other mutual funds. The example assumes that you invest
for the time periods shown and redeem all of your shares at the end of each
period, that the Technology UltraSector ProFund earns an annual return of
5% over the periods shown, that you reinvest all dividends and
distributions, and that gross operating expenses remain constant. Because
this example is hypothetical and for comparison only, your actual costs
will be different.
1 YEAR 3 YEARS
------ -------
Investor Class $137 $428
Service Class $238 $733
Technology UltraSector ProFund 31
<PAGE>
Fund Information
Telecommunications UltraSector ProFund
Fund Strategy
The Telecommunications UltraSector ProFund seeks daily investment results,
before fees and expenses, that correspond to 150% of the performance of the
Dow Jones U.S. Telecommunications Sector Index.
The Index measures the performance of the telecommunications sector of the
U.S. equity market. Component companies include fixed line communications
and wireless communications companies. The Telecommunications UltraSector
ProFund primarily invests in telecommunications companies or in instruments
that provide exposure to these companies.
As of March 31, 2000, the Index consisted of 54 stocks. Its three largest
stocks were AT&T Corporation, SBC Communications Inc. and MCI Worldcom,
Inc. (which comprised 15.83%, 12.62% and 11.33%, respectively, of its
market capitalization). The Telecommunications UltraSector ProFund will
concentrate its investments in a particular industry or group of industries
to approximately the same extent the Index is so concentrated. As of March
31, 2000, the Index was concentrated in fixed line communications, which
comprised 86.07% of its market capitalization (based on the composition of
the Index).
Risk Considerations
In addition to the risks discussed in the Overview for all UltraSector
ProFunds, the Telecommunications UltraSector ProFund is subject to the
following risks:
. The domestic telecommunications market is characterized by increasing
competition and regulation by the Federal Communications Commission
and various state regulatory authorities.
. Companies in this sector need to commit substantial capital to meet
increasing competition, particularly in formulating new products and
services using new technology.
. Technological innovations may make the products and services of
telecommunications companies obsolete.
. The stocks in the Index may underperform fixed income investments and
stock market indices that track other markets, segments and sectors.
32 Telecommunications UltraSector ProFund
<PAGE>
Fund Performance
Because the Telecommunications UltraSector ProFund is newly formed and has
no investment track record, it has no performance to compare against other
mutual funds or broad measures of securities market performance, such as
indexes.
Fees and Expenses of the Fund
The table below describes the estimated fees and expenses you may pay if
you buy and hold shares of the Telecommunications UltraSector ProFund
during its first year of operations. The Telecommunications UltraSector
ProFund is a "no-load" mutual fund./1/ You pay no sales charge when you buy
or sell shares, or when you reinvest dividends.
Shareholder Fees - Investor Class Shares and Service Class Shares
(paid directly from your investment)
Wire Redemption Fee* $15
*This charge may be waived at the discretion of the ProFunds.
Annual Operating Expenses
(as a percentage of average daily net assets)
Investor Service
Class Class
-------- -------
Management Fees 0.75% 0.75%
Service Fees None 1.00%/1/
Other Expenses 0.60% 0.60%
---- ----
Total Annual ProFund Operating Expenses 1.35% 2.35%
/1/ ProFunds has adopted a Shareholder Services Plan pursuant to which each
UltraSector ProFund may pay fees of up to 1.00% of the net asset value of
its Service Class shares to financial intermediaries that agree to provide
services to customers holding Service Class shares. For additional
information concerning the terms of the Shareholder Services Plan and
related service agreements with financial intermediaries, see "Share
Prices, Classes and Tax Information -- Classes of Shares."
Example
The following example illustrates the expenses you would have incurred on a
$10,000 investment in the Telecommunications UltraSector ProFund, and is
intended to help you compare the cost of investing in the
Telecommunications UltraSector ProFund compared to other mutual funds. The
example assumes that you invest for the time periods shown and redeem all
of your shares at the end of each period, that the Telecommunications
UltraSector ProFund earns an annual return of 5% over the periods shown,
that you reinvest all dividends and distributions, and that gross operating
expenses remain constant. Because this example is hypothetical and for
comparison only, your actual costs will be different.
1 YEAR 3 YEARS
------ -------
Investor Class $137 $428
Service Class $238 $733
Telecommunications UltraSector ProFund 33
<PAGE>
Fund Information
Utilities UltraSector ProFund
Fund Strategy
The Utilities UltraSector ProFund seeks daily investment results, before
fees and expenses, that correspond to 150% of the performance of the Dow
Jones U.S. Utilities Sector Index.
The Index measures the performance of the utilities sector of the U.S.
equity market. Component companies include electric utilities, gas
utilities and water utilities. The Utilities UltraSector ProFund primarily
invests in utility companies or in instruments that provide exposure to
these companies.
As of March 31, 2000, the Index consisted of 88 stocks. Its three largest
stocks were Enron Corporation, Duke Energy Corporation and AES Corporation
(which comprised 15.07%, 5.40% and 4.57%, respectively, of its market
capitalization). The Utilities UltraSector ProFund will concentrate its
investments in a particular industry or group of industries to
approximately the same extent the Index is so concentrated. As of March 31,
2000, the Index was concentrated in electric utilities, which comprised
92.18% of its market capitalization (based on the composition of the
Index).
Risk Considerations
In addition to the risks discussed in the Overview for all UltraSector
ProFunds, the Utilities UltraSector ProFund is subject to the following
risks:
. The rates of regulated utility companies are subject to review and
limitation by governmental regulatory commissions.
. The value of regulated utility debt securities (and, to a lesser
extent, equity securities) tends to have an inverse relationship to
the movement of interest rates.
. As deregulation allows utilities to diversify outside of their
original geographic regions and their traditional lines of business,
utilities may engage in riskier ventures where they have no
experience.
. Deregulation is subjecting utility companies to greater competition
and may adversely affect profitability.
. The stocks in the Index may underperform fixed income investments and
stock market indices that track other markets, segments and sectors.
34 Utilities UltraSector ProFund
<PAGE>
Fund Performance
Because the Utilities UltraSector ProFund is newly formed and has no
investment track record, it has no performance to compare against other
mutual funds or broad measures of securities market performance, such as
indexes.
Fees and Expenses of the Fund
The table below describes the estimated fees and expenses you may pay if
you buy and hold shares of the Utilities UltraSector ProFund during its
first year of operations. The Utilities UltraSector ProFund is a "no-load"
mutual fund./1/ You pay no sales charge when you buy or sell shares, or
when you reinvest dividends.
Shareholder Fees - Investor Class Shares and Service Class Shares
(paid directly from your investment)
Wire Redemption Fee* $15
*This charge may be waived at the discretion of the ProFunds.
Annual Operating Expenses
(as a percentage of average daily net assets)
Investor Service
Class Class
-------- -------
Management Fees 0.75% 0.75%
Service Fees None 1.00%/1/
Other Expenses 0.60% 0.60%
---- ----
Total Annual ProFund Operating Expenses 1.35% 2.35%
/1/ ProFunds has adopted a Shareholder Services Plan pursuant to which each
UltraSector ProFund may pay fees of up to 1.00% of the net asset value of
its Service Class shares to financial intermediaries that agree to provide
services to customers holding Service Class shares. For additional
information concerning the terms of the Shareholder Services Plan and
related service agreements with financial intermediaries, see "Share
Prices, Classes and Tax Information -- Classes of Shares."
Example
The following example illustrates the expenses you would have incurred on a
$10,000 investment in the Utililties UltraSector ProFund, and is intended
to help you compare the cost of investing in the Utilities UltraSector
ProFund compared to other mutual funds. The example assumes that you invest
for the time periods shown and redeem all of your shares at the end of each
period, that the Utilities UltraSector ProFund earns an annual return of 5%
over the periods shown, that you reinvest all dividends and distributions,
and that gross operating expenses remain constant. Because this example is
hypothetical and for comparison only, your actual costs will be different.
1 YEAR 3 YEARS
------ -------
Investor Class $137 $428
Service Class $238 $733
Utilities UltraSector ProFund 35
<PAGE>
Fund Information
Wireless Communications UltraSector ProFund
Fund Strategy
The Wireless Communications UltraSector ProFund seeks daily investment
results, before fees and expenses, that correspond to 150% of the
performance of the Dow Jones U.S. Wireless Communications Index.
The Index measures the performance of the wireless communications sector of
the U.S. equity market. Component companies include the providers of mobile
telephone services, including cellular telephone systems, and paging and
wireless services. The Wireless Communications UltraSector ProFund
primarily invests in wireless communication companies or in instruments
that provide exposure to these companies. Companies represented in this
sector in which the Wireless Communications UltraSector ProFund may invest
include companies that may be newly-formed and that have relatively small
market capitalizations.
As of March 31, 2000, the Index consisted of 16 stocks. Its three largest
stocks were Sprint Corp. (PCS Group), Nextel Communications Inc. Class A,
and Voicestream Wireless Corp. (which comprised 37.03%, 33.65%, and 12.03%,
respectively, of its market capitalization). The Wireless Communications
UltraSector Profund will concentrate its investments in a particular
industry or group of industries to approximately the same extent the Index
is so concentrated.
Risk Considerations
In addition to the risks discussed in the Overview for all the UltraSector
ProFunds, the Wireless Communications UltraSector ProFund is subject to the
following risks:
. The prices of the securities of wireless communications companies may
fluctuate widely due to both federal and state regulations governing
rates of return and services that may be offered.
. Fierce competition for market share, and competitive challenges in the
U.S. from foreign competitors engaged in strategic joint ventures with
U.S. companies, and in foreign markets from both U.S. and foreign
competitors.
. Recent industry consolidation trends may lead to increased regulation
of wireless communications companies in their primary markets.
. Companies in this sector may be thinly capitalized, and may have
limited product lines, markets, financial resources or personnel.
. The stocks in the Index may underperform fixed income investments and
stock market indices that track other markets, segments and sectors.
36 Wireless Communications UltraSector ProFund
<PAGE>
Fund Performance
Because the Wireless Communications UltraSector ProFund is newly formed and
has no investment track record, it has no performance to compare against
other mutual funds or broad measures of securities market performance, such
as indexes.
Fees and Expenses of the Fund
The table below describes the estimated fees and expenses you may pay if
you buy and hold shares of the Wireless Communications UltraSector ProFund
during its first year of operations. The Wireless Communications
UltraSector ProFund is a "no-load" mutual fund./1/ You pay no sales charge
when you buy or sell shares, or when you reinvest dividends.
Shareholder Fees - Investor Class Shares and Service Class Shares
(paid directly from your investment)
Wire Redemption Fee* $15
*This charge may be waived at the discretion of the ProFunds.
Annual Operating Expenses
(as a percentage of average daily net assets)
Investor Service
Class Class
-------- -------
Management Fees 0.75% 0.75%
Service Fees None 1.00%/1/
Other Expenses 0.60% 0.60%
---- ----
Total Annual ProFund Operating Expenses 1.35% 2.35%
/1/ ProFunds has adopted a Shareholder Services Plan pursuant to which each
UltraSector ProFund may pay fees of up to 1.00% of the net asset value of
its Service Class shares to financial intermediaries that agree to provide
services to customers holding Service Class shares. For additional
information concerning the terms of the Shareholder Services Plan and
related service agreements with financial intermediaries, see "Share
Prices, Classes and Tax Information -- Classes of Shares."
Example
The following example illustrates the expenses you would have incurred on a
$10,000 investment in the Wireless Communications UltraSector ProFund, and
is intended to help you compare the cost of investing in the Wireless
Communications UltraSector ProFund compared to other mutual funds. The
example assumes that you invest for the time periods shown and redeem all
of your shares at the end of each period, that the Wireless Communications
UltraSector ProFund earns an annual return of 5% over the periods shown,
that you reinvest all dividends and distributions, and that gross operating
expenses remain constant. Because this example is hypothetical and for
comparison only, your actual costs will be different.
1 YEAR 3 YEARS
------ -------
Investor Class $137 $428
Service Class $238 $733
Wireless Communications UltraSector ProFund 37
<PAGE>
UltraSector
ProFunds Strategy
What the UltraSector ProFunds Do
Each UltraSector ProFund:
. Seeks to provide its shareholders with predictable investment returns
approximating its benchmark by investing in securities and other
financial instruments, such as futures and options on futures.
. Uses a mathematical and quantitative approach.
. Pursues its objective regardless of market conditions, trends or
direction.
. Seeks to provide correlation with its benchmark on a daily basis.
What the UltraSector ProFunds Do Not Do
The Advisor does not:
. Conduct conventional stock research or analysis or forecast stock
market movement in managing the UltraSector ProFunds' assets.
. Invest the UltraSector ProFunds' assets in stocks or instruments based
on the Advisor's view of the fundamental prospects of particular
companies.
. Adopt defensive positions by investing in cash or other instruments
in anticipation of an adverse climate for their benchmark indexes.
. Seek to invest to realize dividend income from the UltraSector
ProFunds' investments.
. Seek to provide correlation with the UltraSector ProFunds' benchmarks
over a period of time other than daily, such as monthly or annually,
since mathematical compounding prevents the UltraSector ProFunds from
achieving such results.
Important Concepts
. Leverage offers a means of magnifying small market movements, up or
down, into large changes in an investment's value.
. Futures, or futures contracts, are contracts to pay a fixed price for
an agreed-upon amount of commodities or securities, or the cash value
of the commodity or securities, on an agreed-upon date.
. Option contracts grant one party a right, for a price, either to buy
or sell a security or futures contract at a fixed sum during a
specified period or on a specified day, or to receive cash upon
exercise of the option (in the case of an index option).
38 UltraSector ProFunds Strategy
<PAGE>
. American Depository Receipts represent the right to receive securities
of foreign issuers deposited in a bank or trust company. ADRs are an
alternative to purchasing the underlying securities in their national
markets and currencies. Investment in ADRs has certain advantages over
direct investment in the underlying foreign securities since: (i) ADRs
are U.S. dollar-denominated investments that are easily transferable
and for which market quotations are readily available, and (ii)
issuers whose securities are represented by ADRs are generally subject
to auditing, accounting and financial reporting standards similar to
those applied to domestic issuers.
Portfolio Turnover
The Advisor expects a significant portion of the UltraSector ProFunds'
assets to come from professional money managers and investors who use the
UltraSector ProFunds as part of "market timing" investment strategies.
These strategies often call for frequent trading of UltraSector ProFund
shares to take advantage of anticipated changes in market conditions.
Although the UltraSector ProFund Advisor believes its accounting
methodology should minimize the effect on the UltraSector ProFunds of such
trading, market timing trading could increase the rate of UltraSector
ProFunds' portfolio turnover, forcing realization of substantial capital
gains and losses and increasing transaction expenses. In addition, while
the UltraSector ProFunds do not expect it, large movements of assets into
and out of the UltraSector ProFunds may negatively impact their abilities
to achieve their investment objectives or their level of operating
expenses.
UltraSector ProFunds Strategy 39
<PAGE>
Share Prices, Classes
and Tax Information
Calculating the UltraSector ProFunds' Share Prices
Each UltraSector ProFund calculates daily share prices on the basis of the
net asset value of each class of shares at the close of regular trading on
the New York Stock Exchange ("NYSE") (normally, 4:00 p.m., Eastern time)
every day the NYSE and the Chicago Mercantile Exchange are open for
business.
Purchases and redemptions of shares are effected at the net asset value per
share next determined after receipt and acceptance of an order. If
portfolio investments of an UltraSector ProFund are traded in markets on
days when the UltraSector ProFund's principal trading markets are closed,
the UltraSector ProFund's net asset value may vary on days when investors
cannot purchase or redeem shares.
The UltraSector ProFunds value shares of each class of shares by dividing
the market value of the assets attributable to each class, less the
liabilities attributable to the class, by the number of the class's
outstanding shares. The UltraSector ProFunds use the following methods for
arriving at the current market price of investments held by the UltraSector
ProFunds:
. securities listed and traded on exchanges--the last price the stock
traded at on a given day, or if there were no sales, the mean between
the closing bid and asked prices.
. securities traded over-the-counter--NASDAQ-supplied information on the
prevailing bid and asked prices.
. futures contracts and options on indexes and securities--the last sale
price prior to the close of regular trading on the NYSE.
. options on futures contracts--priced at fair value determined with
reference to established future exchanges.
. bonds and convertible bonds generally are valued using a third-party
pricing system.
. short-term debt securities are valued at amortized cost, which
approximates market value.
. foreign exchange values used to calculate net asset values will be the
mean of the bid price and the asked price for the respective foreign
currency occurring immediately before the NYSE closes.
When price quotes are not readily available, securities and other assets
are valued at fair value in good faith under procedures established by, and
under the general supervision and responsibility of, the Board of Trustees.
This procedure incurs the unavoidable risk that the valuation may be higher
or lower than the securities might actually command if the UltraSector
ProFunds sold them. In the event that a trading halt closes the NYSE or a
futures exchange early, portfolio investments may be valued at fair value,
or in a manner that is different from the discussion above. See the
Statement of Additional Information for more details.
40 Share Prices, Classes and Tax Information
<PAGE>
The New York Stock Exchange and the Chicago Mercantile Exchange, a leading
market for futures and options, are open every week, Monday through Friday,
except when the following holidays are celebrated: New Year's Day, Martin
Luther King, Jr. Day (the third Monday in January), Presidents Day (the
third Monday in February), Good Friday, Memorial Day (the last Monday in
May), July 4th, Labor Day (the first Monday in September), Thanksgiving Day
(the fourth Thursday in November) and Christmas Day. Either or both of
these Exchanges may close early on the business day before each of these
holidays. Either or both of these Exchanges also may close early on the day
after Thanksgiving Day and the day before the Christmas holiday.
Dividends and Distributions
Each of the UltraSector ProFunds intends to distribute to its shareholders
every year all of the year's net investment income and net capital gains.
Each UltraSector ProFund will reinvest these distributions in additional
shares unless a shareholder has written to request a direct cash
distribution.
Tax Consequences
An UltraSector ProFund does not ordinarily pay income tax on its net
investment income (which includes short-term capital gains) and net capital
gains that it distributes to shareholders, but individual shareholders pay
tax on the dividends and distributions they receive. Shareholders will
generally be taxed regardless of how long they have held UltraSector
ProFund shares and regardless of whether distributions and dividends are
reinvested or they choose to receive cash. Distributions and dividends
generally will be taxable as either ordinary income or long-term capital
gains. For example, if an UltraSector ProFund designates a particular
distribution as a long-term capital gain distribution, it will be taxable
to shareholders at their long-term capital gains rate. Dividends and
distributions may also be subject to state and local taxes.
Every year, the UltraSector ProFunds will send shareholders tax information
on the dividends and distributions for the previous year.
If shareholders sell or redeem their UltraSector ProFund shares, they may
have a capital gain or loss, which will be long-term or short-term,
generally depending upon how long they have held the shares. An exchange of
UltraSector ProFund shares may be treated as a sale.
The tax consequences for tax deferred retirement accounts or non-taxable
shareholders will be different.
Please keep in mind:
. Whether a distribution by an UltraSector ProFund is taxable to
shareholders as ordinary income or at the lower capital gains rate
depends on whether it is a long-term capital gain of the ProFund, not
on how long an investor has owned shares of the UltraSector ProFund.
Share Prices, Classes and Tax Information 41
<PAGE>
. Dividends and distributions declared by an UltraSector ProFund in
October, November or December of one year and paid in January of the
next year may be taxable in the year the UltraSector ProFund declared
them.
. As with all mutual funds, an UltraSector ProFund may be required to
withhold U.S. federal income tax at the rate of 31% of all taxable
distributions and redemption proceeds, payable to shareholders who
fail to provide the UltraSector ProFund with correct taxpayer
identification numbers or to make required certifications, or who have
been notified by the IRS that they are subject to backup withholding.
Backup withholding is not an additional tax; rather, it is a way in
which the IRS ensures it will collect taxes otherwise due. Any amounts
withheld may be credited against the shareholder's U.S. federal income
tax liability. You also may be subject to a $50 fee to reimburse the
UltraSector ProFunds for any penalty that the IRS may impose.
Please see the Statement of Additional Information for more information.
Because each investor's tax circumstances are unique and because the tax
laws are subject to change, the Advisor recommends that shareholders
consult their tax advisors about federal, state, local and foreign tax
consequences of investment in the UltraSector ProFunds.
Classes of Shares
Investors in any of the UltraSector ProFunds can purchase either Investor
Class shares directly, or Service Class shares through an authorized firm,
such as a registered investment advisor, a bank or a trust company. Under a
shareholder services plan for Service Class shares, each UltraSector
ProFund may pay an authorized firm up to 1.00% on an annualized basis of
average daily net assets attributable to its customers who are Service
Class shareholders.
For this fee, the authorized firms may provide a variety of services,
such as:
. receiving and processing shareholder orders,
. performing the accounting for the shareholder's account,
. maintaining retirement plan accounts,
. answering questions and handling correspondence for individual
accounts,
. acting as the sole shareholder of record for individual shareholders,
. issuing shareholder reports and transaction confirmations,
. executing daily investment "sweep" functions, and
. furnishing investment advisory services.
Service Class shareholders pay all fees and expenses applicable to Service
Class shares.
42 Share Prices, Classes and Tax Information
<PAGE>
Because ProFunds adopted the shareholder services plan to compensate
authorized firms for providing the types of services described above,
ProFunds believes the shareholder services plan is not covered by Rule 12b-
1 under the Investment Company Act of 1940, which relates to payment of
distribution fees. ProFunds does, however, follow the procedural
requirements of Rule 12b-1 in connection with the implementation and
administration of the shareholder services plan.
An authorized firm generally represents in a service agreement used in
connection with the shareholder services plan that all compensation payable
to the authorized firm from its customers in connection with the investment
of their assets in the UltraSector ProFunds will be disclosed by the
authorized firm to its customers. It also generally provides that all such
compensation will be authorized by the authorized firm's customers.
ProFunds does not monitor the actual services being performed by an
authorized firm under the plan and related service agreement. ProFunds also
does not monitor the reasonableness of the total compensation that an
authorized firm may receive, including any service fee that an authorized
firm may receive from the UltraSector ProFunds and any compensation the
authorized firm may receive directly from its clients.
Share Prices, Classes and Tax Information 43
<PAGE>
Shareholder
Services Guide
Contacting the UltraSector ProFunds
By telephone: (888) 776-3637 or (614) 470-8122--
for investors
(888) 776-5717--a phone line dedicated
for use by financial professionals only
By mail: ProFunds
P.O. Box 182800
Columbus, OH 43218-2800
By overnight mail: ProFunds
c/o BISYS Fund Services
3435 Stelzer Road
Columbus, OH 43219
Minimum Initial Investments
. $5,000 for discretionary accounts controlled by a financial
professional.
. $15,000 for self-directed accounts controlled directly by investors.
These minimums apply to all accounts, including retirement plans, and apply
to the total value of an investor's initial UltraSector ProFund investment.
The UltraSector ProFunds reserve the right to reject or refuse, at their
discretion, any order for the purchase of an UltraSector ProFund's shares
in whole or in part.
Opening Your UltraSector ProFunds Account
By mail: Send a completed application, along with a check payable to
"ProFunds," to the aforementioned address. Cash, credit cards and credit
card checks are not accepted. Please contact the UltraSector ProFunds in
advance if you wish to send third party checks. All purchases must be made
in US dollars through a US bank.
By wire transfer: First, complete an application and fax it to the
UltraSector ProFunds at (800) 782-4797 (toll-free) or (614) 470-8718. Next,
call the UltraSector ProFunds at (888) 776-3637 (toll-free) or (614) 470-
8122 to: a) confirm receipt of the faxed application, b) request your new
account number, c) inform the UltraSector ProFunds of the amount to be
wired and d) receive a confirmation number for your purchase order. After
receiving your confirmation number, instruct your bank to transfer money by
wire to:
UMB Bank, N.A.
Kansas City, MO
Routing/ABA #:101000695
ProFunds DDA #9870857952
44 Shareholder Services Guide
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For further credit to: Your name, the name of the UltraSector ProFund(s),
and your UltraSector ProFunds account number.
Confirmation number: The confirmation number given to you by the ProFunds
representative.
After faxing a copy of the completed application, send the original to the
UltraSector ProFunds via mail or overnight delivery. The addresses are
shown above under "Contacting the UltraSector ProFunds by mail."
Instructions, written or telephonic, given to the UltraSector ProFunds for
wire transfer requests do not constitute a purchase order until the wire
transfer has been received and accepted by the UltraSector ProFunds. The
UltraSector ProFunds are not liable for any loss incurred due to a wire
transfer not having been received.
Please note that your bank may charge a fee to send or receive wires.
Establishing Accounts For Tax-Sheltered Retirement Plans
The UltraSector ProFunds sponsor Individual Retirement Accounts ("IRAs")
that enable individual investors to set up their own retirement savings
programs. The ProFund Advisor charges an annual fee of $15 per social
security number for all types of IRAs to pay for the extra maintenance and
tax reporting that these plans require. Investors in other types of
retirement plans also may invest in the UltraSector ProFunds. For
additional information and an application, contact the UltraSector ProFunds
directly by phone or at the above address.
Purchasing Additional UltraSector ProFunds Shares
By mail: Send a check payable to "ProFunds", noting the UltraSector ProFund
and account number, to the aforementioned address. Cash, credit cards, and
credit card checks are not accepted. Please contact the UltraSector
ProFunds in advance if you wish to send third party checks. All purchases
need to be made in US dollars through a US bank.
By wire transfer: Call the UltraSector ProFunds to inform us of the amount
you will be wiring and to receive a confirmation number.
You can then instruct your bank to transfer your funds to:
UMB Bank, N.A.
Kansas City, MO
Routing/ABA #:101000695
ProFunds DDA #9870857952
For further credit to: Your name, the name of the UltraSector ProFund(s),
and your UltraSector ProFunds account number.
Confirmation number: The confirmation number given to you by the ProFunds
representative.
Instructions, written or telephonic, given to the UltraSector ProFunds for
wire transfer requests do not constitute a purchase order until the wire
transfer has been received and accepted by the UltraSector ProFunds. The
UltraSector ProFunds are not liable for any loss incurred due to a wire
transfer not having been received. Please note that your bank may charge a
fee to send or receive wires.
Shareholder Services Guide 45
<PAGE>
Please keep in mind when purchasing shares:
. The minimum subsequent purchase amount is $100.
. The UltraSector ProFunds price shares you purchase at the price per
share next computed after we receive and accept your purchase order in
good order. To be in good order, a purchase order must include a
properly completed application and wire, check or other form of
payment.
. A wire order is considered in good order only if (i) you have called
ProFunds under the procedures described above and (ii) the ProFunds
receive and accept your wire. The UltraSector ProFunds can only accept
wires during the times they process wires: between 8:00 a.m. and 3:10
p.m., Eastern time for all the UltraSector ProFunds. Wires received
after the UltraSector ProFunds' wire processing times will be
processed the next business day and will receive that day's share
price. If the primary exchange or market on which an UltraSector
ProFund transacts business closes early, the above cut-off time will
be 25 minutes prior to the close of such exchange or market.
. If your purchase is cancelled, you will be responsible for any losses
that may result from any decline in the value of the cancelled
purchase. The UltraSector ProFunds (or their agents) have the
authority to redeem shares in your account(s) to cover any losses due
to fluctuations in share price. Any profit on a cancelled transaction
will accrue to the UltraSector ProFunds.
. Securities brokers and dealers have the responsibility of transmitting
your orders promptly. Brokers and dealers may charge transaction fees
on the purchase and/or sale of a ProFund share.
Exchanges
Shareholders can exchange shares of either class of any UltraSector ProFund
for shares of either class of another ProFund, including ProFunds that are
not described in this prospectus, free of charge. The ProFunds can only
honor exchanges between accounts registered in the same name, and having
the same address and taxpayer identification number.
The ProFunds accept exchange orders either by phone, in writing, or from
the Internet. You will need to specify the number of shares, or the
percentage or dollar value of the shares you wish to exchange, and the
ProFunds (and classes of shares) involved in the transaction. The ProFunds
can only accept exchange orders involving an UltraSector ProFund by phone
between 8:00 a.m. and 3:30 p.m. and between 4:00 p.m. and 9:00 p.m. Eastern
time. The ProFunds may not receive or accept orders at any other time by
phone. If the primary exchange or market (generally, the CME) on which a
ProFund transacts business closes early, the above cut-off time for phone
exchanges will be 25 minutes prior to the close of such exchange or market.
Shareholders may use their personal computer to transact on-line exchanges
of the ProFunds' shares at ProFunds' website (www.profunds.com). The
ProFunds can only accept exchange orders involving an UltraSector ProFund
by Internet between 8:00 a.m. and 3:35 p.m. and between 4:30 p.m. and 9:00
p.m. Eastern Time. The ProFunds may not receive or accept orders at any
other time by Internet. To access this service through the
46 Shareholder Services Guide
<PAGE>
website, you click on the "Trade/Access Account" icon and you will be
prompted to enter your Social Security Number. You should then follow the
instructions to establish your Personal Identification Number (PIN), which
will allow you to execute exchanges between ProFunds and to access ProFunds
account information.
Internet exchange transactions are extremely convenient, but are not risk
free. To ensure that all Internet transactions are safe, secure and as
risk-free as possible, ProFunds has instituted certain safeguards and
procedures for determining the identity of website users. As a result,
neither ProFunds nor its transfer agent will be responsible for any loss,
liability, cost or expense for following Internet instructions they
reasonably believe to be genuine. If you or your intermediary make exchange
requests by Internet, you will generally bear the risk of any loss.
The ProFunds' Prospectus is readily available for viewing on the website.
The ProFunds may terminate the ability to exchange ProFund shares on its
website at any time, in which case you may continue to exchange shares as
otherwise provided in this Prospectus.
Please keep in mind when exchanging shares:
. An exchange is actually a redemption (sale) of shares of one ProFund
and purchase of shares of another ProFund.
. The minimum exchange for self-directed accounts is $1,000 or, if less,
for the account's entire current value.
. You may exchange, on a regular basis, shares of the Money Market
ProFund (described in another prospectus) for shares of other ProFunds
through an Automatic Exchange Plan. For more information on this
option, please call the ProFunds at (888) 776-3637.
. Before executing an exchange between the UltraSector ProFunds
described in this prospectus for shares of another ProFund, a
shareholder must first review the prospectus related to the other
ProFund. Such prospectus may be obtained by contacting the ProFunds by
letter or telephone at the address or telephone number noted on the
back cover of this prospectus.
Redeeming UltraSector ProFund Shares
You can redeem all or part of your shares at the price next determined
after we receive and accept your request. The ProFunds can only accept
redemption orders involving an UltraSector ProFund by phone between 8:00
a.m. and 3:30 p.m. and between 4:00 p.m. and 9:00 p.m. Eastern time. The
UltraSector ProFunds may not receive or accept orders at any other time. If
the primary exchange or market on which an UltraSector ProFund transacts
business closes early, the above cut-off time will be 25 minutes prior to
the close of such exchange or market.
Written Redemptions
To redeem all or part of your shares in writing, your request needs to
include the following information to the aforementioned address:
. the name of the UltraSector ProFund(s),
. the account number(s),
Shareholder Services Guide 47
<PAGE>
. the amount of money or number of shares being redeemed,
. the name(s) of the account owners,
. the signature(s) of all registered account owners, and
. your daytime telephone number.
Wire Redemptions
If your account is authorized for wire redemption, your proceeds will be
wired directly into the bank account you have designated. The UltraSector
ProFunds charge a $15 service fee for a wire transfer of redemption
proceeds, and your bank may charge an additional fee to receive the wire.
If you would like to establish this option on an existing account, please
call the UltraSector ProFunds to request the appropriate form. Wire
redemptions are not available for retirement accounts.
Signature Guarantee
Certain redemption requests must include a signature guarantee. Your
request needs to be in writing and include a signature guarantee if any of
the following situations apply:
. Your account registration or address has changed within the last 30
calendar days.
. The check is being mailed to a different address than the one on your
account.
. The check or wire is being made payable to someone other than the
account owner.
. The redemption proceeds are being transferred to an account with a
different registration.
. You wish to redeem more than $100,000.
. You are adding or changing wire instructions on your account.
. Other unusual situations as determined by the UltraSector ProFunds'
transfer agent.
Signature guarantees may be provided by an eligible guarantor institution
such as a commercial bank, an NASD member firm such as a stock broker, a
savings association or a national securities exchange.
Please keep in mind when redeeming shares:
. Redemptions from self-directed accounts must be for at least $1,000
or, if less, for the account's entire current value. The remaining
balance needs to be above the applicable minimum investment.
. The ProFunds normally remit redemption proceeds within seven days of
completing your liquidation out of the relevant UltraSector ProFund.
For redemption of shares purchased by check or Automatic Investment,
the UltraSector ProFunds may wait up to 15 days before sending
redemption proceeds to assure that the transfer agent has collected
the purchase payment.
48 Shareholder Services Guide
<PAGE>
. The UltraSector ProFunds will remit payment of telephone redemptions
only to the address or bank of record on the account application. You
must submit, in writing, a request for payment to any other address,
along with a signature guarantee from a financial service
organization.
. To redeem shares in a retirement account, your request needs to be in
writing, except for exchanges to other ProFunds, which can be
requested by phone or in writing. Call the UltraSector ProFunds to
request a retirement distribution form.
. Involuntary Redemptions: The UltraSector ProFunds reserve the right to
redeem involuntarily an investor's account, including a retirement
account, which falls below the applicable minimum investment in total
value in the UltraSector ProFunds due to redemption. In addition, both
a request for a partial redemption by an investor whose account
balance is below the minimum investment and a request for partial
redemption by an investor that would bring the account below the
minimum investment will be treated as a request by the investor for
a complete redemption of the account.
Suspension of Redemptions
Your right of redemption may be suspended, or the date of payment
postponed: (i) for any period during which the NYSE or the Federal Reserve
Bank of New York, as appropriate, is closed (other than customary weekend
or holiday closings) or trading on the NYSE, as appropriate, is restricted,
as determined by the Securities and Exchange Commission; (ii) for any
period during which an emergency exists, as determined by the Securities
and Exchange Commission, so that disposal of a ProFund's investments or the
determination of its net asset value is not reasonably practicable; or
(iii) for such other periods as the Securities and Exchange Commission, by
order, may permit for protection of the UltraSector ProFunds' investors.
Automatic Investment and Redemption Plans
Shareholders may buy and redeem shares automatically on a monthly,
bimonthly, quarterly or annual basis. The minimum automatic purchase is
$100 and the minimum automatic redemption is $500. These minimums are
waived for IRA shareholders 70-1/2 years of age or older.
If you would like to establish such an option on an existing account,
please call the UltraSector ProFunds.
About Telephone Transactions
. It may be difficult to reach the UltraSector ProFunds by telephone
during periods of heavy market activity or other times. If you are
unable to reach us by telephone, consider sending written
instructions.
. You may initiate numerous transactions by telephone. Please note,
however, that the ProFunds and their agents will not be responsible
for losses resulting from unauthorized transactions when procedures
designed to verify the identity of the caller are followed.
Shareholder Services Guide 49
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ProFunds
Management
Board of Trustees and Officers
The UltraSector ProFunds' Board of Trustees is responsible for the general
supervision of the UltraSector ProFunds. The UltraSector ProFunds' officers
are responsible for day-to-day operations of the UltraSector ProFunds.
ProFund Advisors LLC
ProFund Advisors LLC, located at 7900 Wisconsin Avenue, Suite 300,
Bethesda, Maryland 20814, serves as the investment advisor to all of the
UltraSector ProFunds. Founded in 1997, ProFund Advisors provides investment
advisory and/or management services to 10 other mutual funds not included
in this prospectus, totaling approximately $2.4 billion in assets, as of
March 31, 2000. ProFund Advisors oversees the investment and reinvestment
of the assets in each UltraSector ProFund and the ProFund family of funds.
It receives fees equal to 0.75% of the average daily net assets of each of
the UltraSector ProFunds. ProFund Advisors bears the costs of advisory
services.
Michael L. Sapir, Chairman and Chief Executive Officer of ProFund Advisors
LLC, served as senior vice president of Padco Advisors, Inc., which advised
Rydex(R) Funds. In addition, Mr. Sapir practiced law for over 13 years,
most recently as a partner in a Washington-based law firm. As an attorney,
Mr. Sapir advised and represented mutual funds and other financial
institutions. He holds degrees from Georgetown University Law Center (J.D.)
and University of Miami (M.B.A. and B.A.).
Louis M. Mayberg, President of ProFund Advisors LLC, co-founded National
Capital Companies, L.L.C., an investment bank in 1986, and manages its
hedge fund. He holds a Bachelor of Business Administration degree with a
major in Finance from George Washington University.
William E. Seale, Ph.D., Director of Portfolio for ProFund Advisors LLC,
has more than 29 years of experience in the commodity futures markets. His
background includes a five-year presidential appointment as a commissioner
of the U.S. Commodity Futures Trading Commission. He earned his degrees at
University of Kentucky. Dr. Seale also holds an appointment as Professor of
Finance at George Washington University.
Each UltraSector ProFund is managed by an investment team chaired by Dr.
Seale.
50 ProFunds Management
<PAGE>
Other Service Providers
BISYS Fund Services, located at 3435 Stelzer Road, Suite 1000, Columbus,
Ohio 43219, acts as the administrator to the UltraSector ProFunds,
providing operations, compliance and administrative services. Each
UltraSector ProFund pays BISYS a fee, on a sliding scale, for its
administrative services. For average daily net assets up to $300 million,
the fee is 0.15% of the assets, and it declines to 0.05% for average daily
net assets of $1 billion or more.
ProFund Advisors also performs client support and administrative services
for the UltraSector ProFunds. Each UltraSector ProFund pays a fee of 0.15%
of its average daily net assets for these services.
Index Providers
"Dow Jones" and the name of each Dow Jones sector index are service marks
of Dow Jones & Company, Inc.
Dow Jones does not:
. Sponsor, endorse, sell or promote the UltraSector ProFunds.
. Recommend that any person invest in the UltraSector ProFunds or any
other securities.
. Have any responsibility or liability for or make any decisions about
timing, amount or pricing of the UltraSector ProFunds.
. Have any responsibility or liability for the administration,
management or marketing of the UltraSector ProFunds.
. Consider the needs of the UltraSector ProFunds or the owners of the
UltraSector ProFunds in determining, composing or calculating the Dow
Jones sector indices or have any obligation to do so.
--------------------------------------------------------------------------------
Dow Jones will not have any liability in connection with the UltraSector
ProFunds. Specifically,
. Dow Jones does not make any warranty, express or implied, and Dow Jones
disclaims any warranty about:
. The results to be obtained by the UltraSector ProFunds, the owner of the
UltraSector ProFunds or any other person in connection with the use of
the Dow Jones sector indices and the data included in the Dow Jones
sector indices;
. The accuracy or completeness of the Dow Jones sector indices and its
data;
. The merchantability and the fitness for a particular purpose or use of the
Dow Jones sector indices and its data:
. Dow Jones will have no liability for any errors, omission or
interruptions in the Dow Jones sector indices or its data;
. Under no circumstances will Dow Jones be liable for any lost profits or
indirect, punitive, special or consequential damages or losses, even if
Dow Jones knows that they might occur.
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ProFunds Management 51
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You can find more detailed information about ProFunds in its current
Statement of Additional Information, dated June 19, 2000, which we
have filed electronically with the Securities and Exchange Commission
(SEC) and which is incorporated by reference into, and is legally a
part of, this prospectus. To receive your free copy of a Statement of
Additional Information or if you have questions about investing in
ProFunds, write us at:
ProFunds
P.O. Box 182800
Columbus, OH 43218-2800
or call our toll-free numbers:
(888) PRO-FNDS (888) 776-3637 For Investors
(888) PRO-5717 (888) 776-5717 Financial Professionals Only
or visit our website www.profunds.com
You can find other information about ProFunds on the SEC's website
(http://www.sec.gov), or you can get copies of this information, after
payment of a duplicating fee, by writing to the Public Reference Section
of the SEC, Washington, D.C. 20549-6009. Information about the
ProFunds, including their Statement of Additional Information, can be
reviewed and copied at the SEC's Public Reference Room in
Washington, D.C. For information on the Public Reference Room, call
the SEC at (800) SEC-0330.
ProFunds Executive Offices
Bethesda, MD
[LOGO]
ProFunds
Innovations in Indexing
811-08239
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