Changes to Cost Basis Reporting Effective January 1, 2012

| November 01, 2011
Important Information:

The Emergency Economic Stabilization Act of 2008 [HR 1424] includes new tax reporting rules that will change the information ProFunds reports on Form 1099-B for mutual fund shares purchased and subsequently sold on/after January 1, 2012. The law expands the information reported to the IRS and to shareholders to include the adjusted cost basis and whether the gain or loss is short-or long-term.

Generally, the new rules apply to those accounts that currently receive Form 1099-B tax reporting such as individual, joint, partnership and UGMA/UTMA registrations. S Corporations are also covered by the new rules. Retirement accounts and C Corporations are not subject to the new reporting requirements.

For shares purchased on or after January 1, 2012, investors will have the opportunity to choose which method ProFunds uses to calculate cost basis or to use the ProFunds default method—Average Cost. Investors should consult a qualified tax advisor to determine the method most suitable for their situation.

Please see FAQs regarding cost basis reporting (pdf) for additional information.