Sector ProFunds allow you to invest in mutual funds that concentrate in securities that represent a particular part of the economy, such as energy, financial services or semiconductors. Economic sectors can behave much differently than the market as a whole—and from each other. For instance, when the S&P 500® is down, the energy sector may be up—but the semiconductor sector could be doing even worse than the S&P 500.
UltraSector ProFunds
So what's the difference between "actively managed" sector funds and UltraSector ProFunds?
First, UltraSector ProFunds are closely aligned with the sector index. Each UltraSector ProFund is benchmarked against a specific Dow Jones sector or industry index, so you know what you're getting. Managers of actively managed funds may decide to leave companies within the sector out of their funds or include companies that aren't in the sector.
Second, using leverage, each UltraSector ProFund's goal is to produce daily returns that are 150% of the performance of its index.
This means that on a day when an index goes up by 1%, the value of the corresponding UltraSector ProFund should increase by 1.5%. Likewise, on a day when the index declines by 1%, the corresponding UltraSector ProFund should decrease by 1.5%.
Investing in these ProFunds involves certain risks, including in all or some cases, leverage, liquidity, concentration, non-diversification and repurchase agreement risks. These risks can increase volatility and decrease performance. Please see the
prospectus
for a more complete description of these risks.
In addition, because sector funds are concentrated in a single area of the market, they can be more volatile and riskier than more diversified mutual funds, and therefore in themselves, don't constitute a complete investment program. All ProFunds permit active investment strategies that can decrease performance and increase expenses.
Notes:
There is no guarantee that any ProFund will achieve its investment objective. See the
prospectus
for more information.
These ProFunds routinely employ leveraged investment techniques that magnify gains and losses and result in greater volatility in value. These ProFunds invest in a single industry. Their shares do not represent a complete investment program. As non-diversified and single industry funds, the value of their shares may fluctuate more than shares invested in a broader range of industries and companies.
There are no restrictions on the size and frequency of trades and no transaction fees. The frequent exchanges our policies permit can decrease performance, increase expenses and incur tax consequences. All ProFunds permit active investment strategies can decrease performance and increase expenses. In addition, it is important to note that some ProFunds are not suitable for all investors, because of aggressive investment techniques many of the funds employ.
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