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AUGUST 14, 2000
PROSPECTUS
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OTC PROFUND
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PROFUNDS
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 Strategy
6 Share Prices, Classes & Tax Information
9 Shareholder Services Guide
16 ProFunds Management
[GRAPHIC OMITTED] PROFUND ADVISORS LLC
PROFUNDS INVESTMENT ADVISORS
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OTC PROFUND
OVERVIEW
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OBJECTIVE
The OTC ProFund seeks daily investment results that correspond to the
performance of the NASDAQ 100 Index(TM).
PRINCIPAL STRATEGY
ProFund Advisors, the investment advisor of the Fund, uses a "passive"
approach to investing, employing quantitative analysis. On basis of
this analysis, ProFund Advisors determines the type, quantity and mix
of investment positions that the Fund should hold to approximate the
performance of the NASDAQ 100 Index(TM). ProFuNd Advisors does not make
judgments about the investment merit of a particular stock, nor does it
attempt to apply any economic, financial or market analysis. The Fund
does not take temporary defensive positions.
The ProFund principally invests in the equity securities included in
the Nasdaq 100(TM) Index. The ProFund may invest in financial
instruments such as futures contracts on stock indexes, options on
futures contracts, swaps and options on securities indexes as a
substitute for investing directly in the stocks of the index.
The NASDAQ 100 Index(TM) contains 100 of the largest and most active
non-financial domestic and international issues listed on the NASDAQ
Stock Market based on market capitalization. Eligibility criteria for
the NASDAQ 100 Index(TM) includes a minimum average daily trading
volume of 100,000 shares. If the security is a foreign security, the
company must have a world wide market value of at least $10 billion, a
U.S. market value of at least $4 billion, and average trading volume of
at least 200,000 shares per day.
PRINCIPAL RISKS
Like all investments, the Fund entails risk. ProFund Advisors cannot
guarantee that the Fund will achieve its objective. As with any mutual
fund, the Fund could lose money, or its performance could trail that of
other investment alternatives. An investment in the Fund:
o is not federally insured
o is not guaranteed by any government agency
o is not a bank deposit
Overview 1
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In addition, the Fund presents some risks not traditionally associated
with most mutual funds. It is important that investors closely review
and understand the Fund's risks before making an investment in the
Fund. These risks are described below.
o MARKET RISK. The Fund is subject to market risks that will
affect the value of its shares, including general economic and
market conditions, as well as developments that impact specific
industries or companies. Shareholders of the Fund should lose
money when the NASDAQ 100 IndexTM declines.
o LIQUIDITY RISK. In certain circumstances, such as a disruption
of the orderly markets for the financial instruments in which
the Fund invests, the Fund might not be able to dispose of
certain holdings quickly or at prices that represent true market
value in the judgment of ProFund Advisors. This may prevent the
Fund from limiting losses or realizing gains.
o CORRELATION RISK. While ProFund Advisors expects that the Fund
will track the NASDAQ 100 IndexTM with a high level of
correlation, there can be no guarantee that the Fund will be
able to achieve a high level of correlation. A failure to
achieve a high degree of correlation may prevent the Fund from
achieving its investment goal.
o RISKS OF AGGRESSIVE INVESTMENT TECHNIQUES. The Fund uses
investment techniques that may be considered aggressive. Risks
associated with the use of options, futures contracts, and
options on futures contracts 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.
WHO MAY WANT TO CONSIDER INVESTING IN THE FUND
The Fund may be appropriate for investors who are seeking investment
results approximating the performance of the NASDAQ 100 IndexTM.
The Fund may also be appropriate for investors who are executing a
strategy that relies on frequent buying, selling or exchanging among
stock mutual funds, since the ProFunds do not limit how often an
investor may exchange among the ProFunds and do not impose any
transaction fee when investors buy, sell or exchange shares, other than
a $15 wire redemption fee.
PERFORMANCE
Because the Fund 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
The tables below describe the estimated fees and expenses you may pay
if you buy and hold shares of the Fund during its first year of
operations. THE FUND IS A "NO-LOAD" MUTUAL FUND. YOU PAY NO SALES
CHARGE WHEN YOU BUY OR SELL SHARES, OR WHEN YOU REINVEST DIVIDENDS.
2 Overview
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SHAREHOLDER FEES - INVESTOR CLASS SHARES AND SERVICE CLASS SHARES (paid
directly from your investment)
Wire Redemption Fee* $15
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* This charge may be waived at the discretion of the ProFunds.
ANNUAL OPERATING EXPENSES-INVESTOR CLASS SHARES (percentage of average
daily net assets)
Management fees 0.70%
Other expenses 0.63%
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Total annual operating expenses 1.33%
ANNUAL OPERATING EXPENSES-SERVICE CLASS SHARES (percentage of average
daily net assets)
Management fees 0.70%
Service fee(1) 1.00%
Other expenses 0.63%
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Total annual operating expenses 2.33%
EXPENSE EXAMPLES
The following examples illustrate the expenses you would have incurred
on a $10,000 investment in the Fund, and are intended to help you
compare the cost of investing in the Fund compared to other mutual
funds. The examples assume that you invested for the time periods shown
and redeemed all of your shares at the end of each period, that the
Fund earned an annual return of 5% over the periods shown, that you
reinvested all dividends and distributions, and that gross operating
expenses remained constant. Because these examples are hypothetical and
for comparison only, your actual costs will be different.
INVESTOR CLASS EXPENSE EXAMPLES
1 YEAR 3 YEARS
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OTC ProFund $135 $421
SERVICE CLASS EXPENSE EXAMPLES
1 YEAR 3 YEARS
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OTC ProFund $236 $727
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(1) ProFunds has adopted a Shareholder Services Plan pursuant to which the Fund
may pay fees of up to 1.00% of the net asset value of the Fund's 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".
Overview 3
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OTC PROFUND
STRATEGY
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WHAT THE FUND DOES
The Fund:
o 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.
o Uses a mathematical and quantitative approach designed to track
the performance of the NASDAQ 100 IndexTM.
o Pursues its objectives regardless of market conditions, trends
or direction.
o Seeks to provide correlation with its benchmark on a daily
basis.
ProFunds' Board of Trustees may change the Fund's investment objective
without shareholder approval if, for example, it believes another
benchmark might better suit shareholders needs.
WHAT THE FUND DOES NOT DO
ProFund Advisors does not:
o Conduct conventional stock research or analysis or forecast
stock market movement in managing the Fund's assets.
o Invest the Fund's assets in stocks or instruments based on
ProFund Advisors' view of the fundamental prospects of
particular companies.
o Adopt defensive positions by investing in cash or other
instruments in anticipation of an adverse climate for the Fund's
benchmark index.
o Seek to invest to realize dividend income from its investments.
o Seek to provide correlation with the Fund's benchmark over a
period of time other than daily, such as monthly or annually,
since mathematical compounding prevents the Fund from achieving
such results.
IMPORTANT CONCEPTS
o 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.
o 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.
4 Strategy
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o DIVERSIFICATION. The Fund is classified as "non-diversified"
under the federal securities laws. It has the ability to
concentrate a relatively high percentage of its investments in
the securities of a small number of companies. This would make
the performance of the Fund more susceptible to a single
economic, political or regulatory event than a more diversified
mutual fund might be. Nevertheless, the Fund intends to invest
on a diversified basis under normal market conditions.
PORTFOLIO TURNOVER
ProFund Advisors expects a significant portion of the Fund's assets to
come from professional money managers and investors who use the Fund as
part of "market timing" investment strategies. These strategies often
call for frequent trading of Fund's shares to take advantage of
anticipated changes in market conditions. Although ProFund Advisors
believes its accounting methodology should minimize the effect on the
Fund of such trading, market timing trading could increase the rate of
the Fund's portfolio turnover, forcing realization of substantial
capital gains and losses and increasing transaction expenses. In
addition, while the Fund does not expect it, large movements of assets
into and out of the Fund may negatively impact its abilities to achieve
its investment objective or its level of operating expenses.
Strategy 5
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SHARE PRICES, CLASSES
AND TAX INFORMATION
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CALCULATING THE FUND'S SHARE PRICES
The Fund 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 the Fund are traded in markets on days when
the Fund's principal trading market(s) is closed, the Fund's net asset
value may vary on days when investors cannot purchase or redeem shares.
The Fund 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' outstanding
shares. The Fund uses the following methods for arriving at the current
market price of investments held by the Fund:
o 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.
o securities traded over-the-counter-NASDAQ-supplied information
on the prevailing bid and asked prices.
o futures contracts and options on indexes and securities-the last
sale price prior to the close of regular trading on the NYSE.
o options on futures contracts-priced at fair value determined
with reference to established future exchanges.
o bonds and convertible bonds generally are valued using a
third-party pricing system.
o short-term debt securities are valued at amortized cost, which
approximates market value.
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, ProFunds' 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 Fund 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 ("SAI") for more details.
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),
6 Share Prices, Classes and Tax Information
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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 Christmas holiday.
DIVIDENDS AND DISTRIBUTIONS
The Fund intends to distribute to its shareholders every year all of
the year's net investment income and net capital gains. The Fund will
reinvest these distributions in additional shares unless a shareholder
has written to request a direct cash distribution.
TAX CONSEQUENCES
The Fund does not ordinarily pay income tax on its net investment
income (which includes short-term capital gains) and net capital gain
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 Fund shares
and regardless of whether they receive cash or choose to have
distributions and dividends reinvested.
Distributions and dividends generally will be taxable as either
ordinary income or long-term capital gains. For example, if the Fund
designates a particular distribution as a long-term capital gain
distribution, it will be taxable to shareholders at their long-term
capital gain rate. Dividends and distributions may also be subject to
state and local taxes.
Every year the Fund will send shareholders tax information on the
dividends and distributions for the previous year.
If shareholders sell or redeem their Fund 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 Fund 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:
o Whether a distribution by the Fund is taxable to shareholders as
ordinary income or at the lower capital gains rate depends on
whether it is long-term capital gains of the Fund, not on how
long an investor has owned shares of the Fund.
o Dividends and distributions declared by the Fund in October,
November or December of one year and paid in January of the next
year may be taxable in the year the Fund declared them.
o As with all mutual funds, the Fund 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 Fund 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 Fund for any
penalty that the IRS may impose.
Share Prices, Classes and Tax Information 7
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PLEASE SEE THE SAI FOR MORE INFORMATION. BECAUSE EACH INVESTOR'S TAX
CIRCUMSTANCES ARE UNIQUE AND BECAUSE THE TAX LAWS ARE SUBJECT TO
CHANGE, PROFUND ADVISORS RECOMMENDS THAT SHAREHOLDERS CONSULT THEIR TAX
ADVISORS ABOUT FEDERAL, STATE, LOCAL AND FOREIGN TAX CONSEQUENCES OF
INVESTMENT IN THE FUND.
CLASSES OF SHARES
Investors in the Fund 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, the Fund 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:
o receiving and processing shareholder orders,
o performing the accounting for the shareholder's account,
o maintaining retirement plan accounts,
o answering questions and handling correspondence for individual
accounts,
o acting as the sole shareholder of record for individual
shareholders,
o issuing shareholder reports and transaction confirmations,
o executing daily investment "sweep" functions, and
o furnishing investment advisory services.
Service Class shareholders pay all fees and expenses applicable to
Service Class shares.
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 shareholder services plan that all compensation payable
to the authorized firm from its customers in connection with the
investment of their assets in the Fund 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 Fund and any compensation the
authorized firm may receive directly from its clients.
8 Share Prices, Classes and Tax Information
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SHAREHOLDER
SERVICES GUIDE
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CONTACTING 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 INVESTMENTS
o $5,000 for discretionary accounts controlled by a financial
professional.
o $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 ProFunds investment.
ProFunds reserves the right to reject or refuse, at its discretion, any
order for the purchase of the Fund's shares in whole or in part.
OPENING YOUR 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 ProFunds in advance
if you wish to send third party checks. All purchases must be made in
U.S. dollars through a U.S. bank.
BY WIRE TRANSFER: First, complete an application and fax it to ProFunds
at (800) 782-4797 (toll-free) or (614) 470-8718. Next, call 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
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
FOR FURTHER CREDIT TO: Your name, the name of the Fund, and your
ProFunds account number.
CONFIRMATION NUMBER: The confirmation number given to you by the
ProFunds representative.
Shareholder Services Guide 9
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After faxing a copy of the completed application, send the original to
ProFunds via mail or overnight delivery. The addresses are shown on
page 13 under "Contacting ProFunds - By mail".
Instructions, written or telephonic, given to ProFunds for wire
transfer requests do not constitute a purchase order until the wire
transfer has been received by ProFunds. ProFunds is 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
ProFunds sponsors Individual Retirement Accounts ("IRAs") that enable
individual investors to set up their own retirement savings programs.
ProFunds 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 Fund. For additional information and an
application, contact ProFunds directly by phone or at the above
address.
PURCHASING ADDITIONAL PROFUNDS SHARES
BY MAIL: Send a check payable to "ProFunds", noting the Fund and
account number, to the aforementioned address. Cash, credit cards, and
credit card checks are not accepted.
Please contact ProFunds in advance if you wish to send third party
checks. All purchases need to be made in U.S. dollars through a U.S.
bank.
BY WIRE TRANSFER: Call ProFunds to inform us of the amount you will be
wiring and 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 Fund, and your
ProFunds account number.
CONFIRMATION NUMBER: The confirmation number given to you by the
ProFunds representative.
Instructions, written or telephonic, given to ProFunds for wire
transfer requests do not constitute a purchase order until the wire
transfer has been received by ProFunds. ProFunds is 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.
PLEASE KEEP IN MIND WHEN PURCHASING SHARES:
o The minimum subsequent purchase amount is $100.
o ProFunds prices shares you purchase at the price per share next
computed after we receive and accept your purchase order in good
order. In order to be in good order, a purchase order must
include a properly completed application and wire, check or
other form of payment.
o A wire order is considered in good order only if (i) you have
called ProFunds under the procedures described above and (ii)
PROFUNDS RECEIVES AND ACCEPTS YOUR WIRE. PROFUNDS ONLY ACCEPTS
WIRES DURING THE TIMES IT PROCESSES WIRES: BETWEEN
10 Shareholder Services Guide
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8:00 A.M. AND 3:30 P.M. EASTERN TIME. Wires received after
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 (generally, the CME), on which the
Fund transacts business closes early, the above cut-off time
will be 25 minutes prior to the close of such exchange or
market. ProFunds may resume receiving and accepting wires
following the early close.
o 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. ProFunds (or its 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 Fund.
o 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 Fund
shares.
EXCHANGES
Shareholders can exchange shares of either class of the Fund for shares
of either class of another ProFund not described in this prospectus,
free of charge. ProFunds can only honor exchanges between accounts
registered in the same name, and having the same address and taxpayer
identification number.
ProFunds accepts exchange orders by phone, in writing or through 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.
BY TELEPHONE: PROFUNDS CAN ONLY ACCEPT EXCHANGE ORDERS INVOLVING THE
FUND BY PHONE BETWEEN 8:00 A.M. AND 3:50 P.M. AND BETWEEN 4:00 P.M. AND
9:00 P.M., EASTERN TIME. PROFUNDS MAY NOT RECEIVE OR ACCEPT ORDERS AT
ANY OTHER TIME BY PHONE. If the primary exchange or market on which the
Fund transacts business closes early, the above cut-off time will be 25
minutes prior to the close of such exchange or market. ProFunds may
resume receiving and accepting orders following the early close.
BY INTERNET: Shareholders may use their personal computers to transact
on-line exchanges of the Fund's shares at ProFunds' website
(www.profunds.com). PROFUNDS CAN ONLY ACCEPT EXCHANGE ORDERS INVOLVING
THE FUND BETWEEN 8:00 A.M. AND 3:55 P.M. AND BETWEEN 4:30 P.M. AND 9:00
P.M., EASTERN TIME. PROFUNDS MAY NOT RECEIVE OR ACCEPT ORDERS AT ANY
OTHER TIME BY INTERNET. To access this service through the website,
click on the "Trade/Access Account" Icon and you will be prompted to
enter your Social Security Number. Follow the instructions to establish
your Personal Identification Number (PIN) which will allow you to
execute exchanges between ProFunds and access ProFunds account
information. If the primary exchange or market on which the Fund
transacts business closes early, the above cut off time will be 25
minutes prior to the close of such exchange or market. The ProFunds may
resume receiving and accepting orders following the early close.
Internet exchange transactions are extremely convenient, but are not
free from risk. 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
Shareholder Services Guide 11
<PAGE>
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 the Internet, you will generally
bear the risk of loss.
ProFunds' prospectuses are readily available for viewing on the
website.
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:
o An exchange actually is a redemption (sale) of shares of one
ProFund and a purchase of shares of another ProFund.
o The minimum exchange for self-directed accounts is $1,000 or, if
less, for the account's current value.
o 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 ProFunds at
888-776-3637.
o BEFORE EXECUTING AN EXCHANGE BETWEEN THE FUND 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, OR
BY VISITING THE PROFUNDS' WEBSITE (WWW.PROFUNDS.COM).
REDEEMING PROFUNDS SHARES
YOU CAN REDEEM ALL OR PART OF YOUR SHARES AT THE PRICE NEXT DETERMINED
AFTER WE RECEIVE AND ACCEPT YOUR REQUEST. PROFUNDS CAN ONLY ACCEPT
REDEMPTION ORDERS INVOLVING THE FUND BY PHONE BETWEEN 8:00 A.M. AND
3:50 P.M. AND BETWEEN 4:00 P.M. AND 9:00 P.M., EASTERN TIME. ProFunds
may not receive or accept orders at any time. If the primary exchange
or market on which the Fund transacts business closes early, the above
cut-off time will be 25 minutes prior to the close of such exchange or
market. ProFunds may resume receiving and accepting orders following
the early close.
WRITTEN REDEMPTIONS
To redeem all or part of your shares in writing, your request needs to
include the following information and be sent to the aforementioned
address:
o name of the Fund,
o the account number(s),
o the amount of money or number of shares being redeemed,
o the name(s) of the account owners,
o the signature(s) of all registered account owners, and
o your daytime telephone number.
WIRE PAYMENT OF REDEMPTIONS
If your account is authorized for wire redemption, your proceeds will
be wired directly into the bank account you have designated. ProFunds
charges 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
12 Shareholder Services Guide
<PAGE>
would like to establish this option on an existing account, please call
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:
o Your account registration or address has changed within the last
30 calendar days.
o The check is being mailed to a different address than the one on
your account.
o The check or wire is being made payable to someone other than
the account owner.
o The redemption proceeds are being transferred to an account with
a different registration.
o You wish to redeem more than $100,000.
o You are adding or changing wire instructions on your account.
o Other unusual situations as determined by ProFund's 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:
o 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.
o ProFunds normally remits redemption proceeds within seven days
of redemption. For redemption of shares purchased by check or
Automatic Investment, ProFunds may wait up to 15 days before
sending redemption proceeds to assure that its transfer agent
has collected the purchase payment.
o 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.
o 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 ProFunds to request a
retirement distribution form.
o Involuntary Redemptions: ProFunds reserves the right to redeem
involuntarily an investor's account, including a retirement
account, which falls below the applicable minimum investment in
total value in 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.
Shareholder Services Guide 13
<PAGE>
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 is
restricted, as determined by the Securities and Exchange Commission
("SEC"); (ii) for any period during which an emergency exists, as
determined by the SEC, 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 SEC, by order, may permit for
protection of 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 fi years of age or older.
ABOUT TELEPHONE TRANSACTIONS
o IT MAY BE DIFFICULT TO REACH 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.
o You may initiate numerous transactions by telephone. Please
note, however, that ProFunds and its agents will not be
responsible for losses resulting from unauthorized transactions
when procedures designed to verify the identity of the caller
are followed.
14 Shareholder Services Guide
<PAGE>
-----------------------------------
PROFUNDS
MANAGEMENT
-----------------------------------
BOARD OF TRUSTEES AND OFFICERS
The ProFunds' Board of Trustees is responsible for the general
supervision of the Fund. The ProFunds' officers are responsible for
day-to-day operations of the Fund.
INVESTMENT ADVISORS
PROFUND ADVISORS LLC, located at 7900 Wisconsin Avenue, Suite 300,
Bethesda, Maryland 20814, serves as the investment advisor to the Fund.
Founded in 1997, ProFund Advisors provides investment advisory and/or
management services to 29 mutual fund portfolios, totaling
approximately $1.8 billion in assets, as of June 30, 2000. ProFund
Advisors oversees the investment and reinvestment of the assets of the
Fund, for which it is entitled to receive fees equal to 0.70% of the
average daily net assets of the Fund. ProFund Advisors bears the costs
of advisory services.
MICHAEL L. SAPIR, Chairman and Chief Executive Officer of ProFund
Advisors LLC, formerly served as senior vice president of Padco
Advisors, Inc., which advised Rydex(R)Funds. In addition, Mr. Sapir
practiced law primarily representing financial institutions for over 13
years, most recently as a partner in a Washington-based law firm. 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 specializing in
financial service companies mergers and acquisitions and equity
underwritings 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 30 years of experience in the financial markets. His
background includes a five-year presidential appointment as a
commissioner of the U.S. Commodity Futures Trading Commission and
Chairman of the Finance Department at George Washington University. He
earned his degrees at University of Kentucky.
Each Benchmark ProFund is managed by an investment team chaired by Dr.
Seale.
ProFunds Management 15
<PAGE>
OTHER SERVICE PROVIDERS
BISYS Fund Services ("BISYS"), located at 3435 Stelzer Road, Suite
1000, Columbus, Ohio 43219, acts as the administrator to the Fund,
providing operations, compliance and administrative services. ProFunds
pays BISYS a fee, on a sliding scale, for its administrative services
ranging from 0.15% of daily net assets of $0 to $300 million to 0.05%
of average daily net assets of $1 billion and over.
ProFund Advisors also performs client support and administrative
services for the Fund. The Fund pays a fee of 0.15% of its average
daily net assets for these services.
OTHER INFORMATION
"NASDAQ 100 IndexTM" is a trademark of the NASDAQ Stock Markets, Inc.
("NASDAQ"). The Fund is not sponsored, endorsed, sold or promoted by
NASDAQ and NASDAQ makes no representation regarding the advisability of
investing in the Fund.
IF THE FUND DOES NOT GROW TO A SIZE TO PERMIT IT TO BE ECONOMICALLY
VIABLE, THE FUND MAY CEASE OPERATIONS. IN SUCH AN EVENT, INVESTORS MAY
BE REQUIRED TO LIQUIDATE OR TRANSFER THEIR INVESTMENTS AT AN
INOPPORTUNE TIME.
16 ProFunds Management
<PAGE>
--------------------------------------------------------------------------------
You can find more detailed information about the OTC ProFund in its
current Statement of Additional Information, dated August 7, 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 dated August 7, 2000. To receive
your free copy of a Statement of Additional Information, or if you have
questions about investing in the OTC ProFund, 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 the OTC ProFund 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. 20549-0102.
Information about the OTC ProFund, including its 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 1-202-942-8090.
PROFUNDS EXECUTIVE OFFICES
BETHESDA, MD
[GRAPHIC OMITTED]
INNOVATIONS IN INDEXING
811-08239
PROBK
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