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Money Pours Into Inverse Bond ProFunds as Interest Rates Jump Assets Increase by $285 Million So Far This Year

Bethesda, MD — August 14, 2003 — ProFunds today announced that its Rising Rates Opportunity funds reached $303 million in invested assets - an increase of $285 million since Jan. 1, 2003.

"With the recent increase in long-term interest rates, some investors and financial advisors are starting to react to the possibility of a rising interest rate environment," said Michael L. Sapir, Chairman and CEO of ProFund Advisors LLC, investment advisor to the Bethesda-based ProFunds mutual fund family.

"The Rising Rates Opportunity funds can be used in two ways," Sapir said. "One strategy is to seek profit in anticipation of rising interest rates. The other is a defensive strategy, in which the funds are used to hedge long-term bond portfolios, which generally suffer losses when interest rates rise."

"Many financial analysts and investors1 have expected interest rates to increase. And recently, as rates have begun to move upward, the fund's success has prompted heavy flows into the Rising Rates strategy."

The Rising Rates strategy includes Rising Rates Opportunity ProFund® and an insurance product version, ProFund VP Rising Rates Opportunity®. These ProFunds seek 125%, before fees and expenses, of the inverse of the daily price movement of the most recently issued 30-year U.S. Treasury Bond (the long bond).

A survey conducted by Harris InteractiveSM commissioned by ProFund Advisors finds that most U.S. investors (57%) believe interest rates will rise in the next two years, but that nearly two-thirds (65%) are unaware that rising rates generally have a negative impact on the value of bond investments1.

The Rising Rates Opportunity funds are subject to interest rate risk and should decrease in value when long-term interest rates fall. They employ leveraged investment techniques that magnify gains and losses and result in greater volatility in value. More complete information on ProFunds, including a prospectus, is available at www.profunds.com.

About ProFunds

With 77 public and insurance product funds, ProFunds is the nation's largest lineup of indexed mutual funds. Many of the innovations at ProFunds are designed to overcome the limitations of conventional index mutual funds. ProFunds does not restrict investors' abilities to react to financial or economic changes and exchange their investments from one ProFund to another. Interested investors may call 1-888-PRO-FNDS, and financial professionals should call 1-888-PRO-5717.

The ProFunds present certain risks to investors, some that are not usually associated with mutual funds. There is no guarantee that this ProFunds will achieve its investment objective. This ProFunds routinely employs leveraged investment techniques that magnify gains and losses and result in greater volatility in value. This ProFund invests in a variety of financial instruments and may be exposed to risks not commonly associated with bond investments. Investments in this ProFunds are subject to market risks, including movements in prevailing interest rates. The investment return and principal value will fluctuate so that an investor's shares, when redeemed, may be worth more or less than their original cost.

For more complete information including charges, expenses and ongoing fees, interested please call 888-PRO-FNDS to receive a prospectus. Read the prospectus carefully before investing or sending money. ProFunds are distributed by ProFunds Distributors, Inc.


Notes:

1Methodology
Harris InteractiveSM, via its QuickQuerySM online omnibus, fielded this survey between May 1-5, 2003, interviewing 2,378 U.S. adults (18+). The margin of error is +/-3.2 percentage points with a 95% level of confidence, and the data were propensity weighted to be representative of the total U.S. adult population.

Media Contact:

Tucker Hewes, Hewes Communications, Inc., 212-207-9451, tucker@hewescomm.com