Most investors no longer need to be sold on the merits of including international—and more recently, even emerging market equities—in their portfolios. After all, emerging markets have sharply outperformed their international counterparts in recent years.

But lately, it's the emerging markets of Latin America that have begun to capture investors' interest. Indeed, the Bank of New York Latin America ADR 35 Index,* a measure of the region's performance, gained nearly five times as much as the S&P 500 Index this year through September 30, 2007.

Latin America's Streak: Shaky or Sustainable?
So, can Latin American equities continue to rumba? It depends on whom you ask.

Many observers say these markets are finally coming into their own and think the positive momentum will continue. They note the resource-rich region has benefited from soaring commodity prices, thriving exports and financial market reforms, accompanied by an expanding roster of publicly listed companies. At the same time, the rising ranks of the middle class and burgeoning consumerism have boosted domestic consumption. Enthusiasts add that despite the run-up in Latin American equities, shares in regional companies remain cheap compared with some emerging markets, since the stocks had been stagnant for the past several years.

Other market watchers are skeptical about the continued outperformance for the region. They cite a pronounced pullback in foreign corporate investment since 2000 and worry that a global economic slowdown could cripple Latin America's exports. Moreover, a mix of economic and political factors, including possible currency devaluations and populist governments in Venezuela and Bolivia, are giving some investors pause.

Introducing New ProFunds for Either View
Now, there's a ProFund for either perspective on Latin America, including the industry's first short Latin America equity fund.

ProFund	Index	Daily Objective (before fees and expenses)
UltraLatin America	BNY Latin America 35 ADR	Double
UltraShort Latin America	BNY Latin America 35 ADR	Double the inverse

Tap into the Heat
If you like the prospects for Latin American equities, consider  UltraLatin America ProFund. The ProFund is designed to double the daily performance of its benchmark, the Bank of New York Latin America ADR 35. That means on days when the index rises by 1%, UltraLatin America ProFund seeks to increase by 2%, before fees and expenses. Note that the fund's magnified exposure applies to losses as well as gains. 

Conversely, its net asset value should lose approximately the same amount, on a percentage basis, as any increase in the daily performance of the index when the index rises on a given day.

Or, Hedge Against the Hype…
If you think these markets are overheated and likely to retrench, you can seek profit from a market downturn or seek to hedge existing positions with UltraShort Latin America ProFund—the first short Latin America equity fund. The ProFund seeks to double the daily inverse performance of its benchmark, the Bank of New York Latin America ADR 35. So on days when the index goes down by 1%, the fund should increase by 2%, before fees and expenses.

Investing in UltraLatin America ProFund and UltraShort Latin America ProFund involves certain risks, specifically, market, correlation, credit, exchange rate, foreign currency, foreign money markets, liquidity, aggressive investment technique, non-diversification, repurchase agreement, and inverse correlation risk in the UltraShort Latin America ProFund. These funds do not constitute a complete investment program and they may not be suitable for all investors.

These are new funds that currently have no reportable performance. When fund performance is available, it can be found in the fund profiles for UltraLatin America ProFund and UltraShort Latin America ProFund.

Most Latin American countries have experienced severe and persistent levels of inflation (and, in some cases, hyperinflation), which has led to high interest rates, extreme governmental measures to keep inflation in check, and a generally negative effect on economic growth. Additionally, many Latin American countries have experienced political instability. Mid-capitalization stocks typically carry additional risk, since smaller companies have a higher risk of failure and, historically, their stocks have experienced a greater degree of volatility.