New Mutual Funds Offer Short and Magnified Exposure to Chinese Stocks
ProFunds Gives Investors Chance to Benefit from China's Ups and Downs
(Bethesda, MD, February 5, 2008) ProFunds Group, the largest provider of short and leveraged funds,1 today launched two new mutual funds that offer investors easy ways to get exposure to Chinese stocks. For investors who believe Chinese stocks still have room to climb, the new UltraChina ProFund offers the chance to get magnified exposure. For investors who believe that they are due for a fall, UltraShort China ProFund is designed to go up when Chinese stocks go down.
|ProFund||Index||Daily Objective (before fees and expenses)|
|UltraChina||BNY China Select||Double daily index performance|
|UltraShort China||BNY China Select||Double the inverse of daily index performance|
"After several years of incredible performance in Chinese stocks, many experts are making the case for continued strong growth in China. Others have been talking of a 'bubble'—and believe recent volatility may be a harbinger of worse to come. ProFunds is giving mutual fund investors tools that make it easy to act on either point of view," said Michael Sapir, chairman and CEO of ProFund Advisors LLC. "And because we don't restrict how often investors can trade ProFunds, it's also easy to adjust your exposure if that point of view changes."
UltraChina ProFund for magnified market exposure
For investors with a strong conviction that Chinese stocks are headed higher, UltraChina ProFund is designed to provide twice the market exposure of an ordinary China mutual fund for the same investment. The ProFund's objective is to double the daily performance of its benchmark, The Bank of New York China Select Index. That means on days when the index rises by 1%, UltraChina ProFund should rise by 2%, before fees and expenses. Conversely, its net asset value should lose approximately 2% if the index falls 1% on a given day.
UltraShort China ProFund to hedge or profit from downturns
When Chinese markets dip, investors can seek profit or seek to hedge existing positions in Chinese equities with UltraShort China ProFund. The ProFund is designed to double the daily inverse performance of its benchmark, The Bank of New York China Select Index. So on days when the index goes down by 1%, the fund should increase by 2%, before fees and expenses. And on days when the index rises by 1%, the fund should decrease by 2%.
The Bank of New York China Select Index®The Bank of New York China Select Index is a free-float adjusted/modified capitalization-weighted index, designed to track the performance of a basket of Chinese companies that have Depositary Receipts that trade on a U.S. exchange or on the NASDAQ. As of January 11, 2008, the index included companies with capitalizations between $257 million and $6 billion. The average capitalization of the companies constituting the index was approximately $1.3 billion.
About ProFunds Group
ProFunds Group, located in Bethesda, Md., includes both ProFunds mutual funds, with more than $6 billion in assets under management, and ProShares ETFs, with $11.5 billion. ProFunds offers more than 100 mutual fund choices. Since 1997, ProFunds has provided mutual fund investors with easier access to sophisticated investment strategies, with offerings that include mutual funds that seek to magnify daily index performance and funds that seek to increase in value when markets decline. ProShares, launched in 2006, offers ETFs that provide short or magnified exposure to a variety of well-known indexes. ProFunds Group describes the portfolio managers common to ProFund Advisors LLC, advisor to ProFunds mutual funds, and ProShare Advisors LLC, advisor to ProShares ETFs. More information on ProFunds is available at www.ProFunds.com and on ProShares at www.ProShares.com.
Investing in UltraChina ProFund and UltraShort China ProFund involves certain risks, specifically market, correlation, credit, exchange rate, foreign currency, foreign markets, liquidity, aggressive investment technique, non-diversification, repurchase agreement, and inverse correlation risk in the UltraShort China ProFund. These funds do not constitute a complete investment program and they may not be suitable for all investors.
1 Based on an analysis by FRC of the largest providers of funds in these categories. The analysis covered ETFs and mutual funds by the number of funds and assets.
Tucker Hewes, Hewes Communications, Inc., (212) 207-9451, email@example.com