Fund Description: The ProShares Ultra Oil & Gas Fund is an exchange-traded index fund that is a separate investment portfolio of the ProShares Trust, an exchange-traded fund that consists of separate investment portfolios (each, an index Fund). INVESTMENT OBJECTIVE: The Fund seeks daily investment results, before fees and expenses, that correspond to twice (200%) the daily performance of the Dow Jones U.S. Oil & Gas Index. If the Fund is successful in meeting its objective, its net asset value should gain approximately twice as much, on a percentage basis, as the Index when the Index rises on a given day. Conversely, its net asset value should lose approximately twice as much, on a percentage basis, as the Index when the Index declines on a given day. The Fund seeks investment results for a single day only, not for longer periods. This means that the return of the Fund for a period longer than a single trading day will be the result of each day’s returns compounded over the period, which will very likely differ from the inverse of the return of the Index for that period. INDEX DESCRIPTION: The Dow Jones U.S. Oil & Gas Index measures the performance of the oil and gas industry of the U.S. equity market. Component companies include oil drilling equipment and services, oil companies-major, oil companies-secondary, pipelines, liquid, solid or gaseous fossil fuel producers and service companies. As of September 30, 2006, the Dow Jones U.S. Oil & Gas Index included companies with capitalizations between $476.4 million and $398.9 billion. The average capitalization of the companies comprising the Index was approximately $14.3 billion. FUND STRATEGY: The Fund invests in equity securities and derivatives that ProShare Advisors believes, in combination, should have similar daily performance characteristics as twice (200%) the daily return of the Index. The Fund invests in financial instruments whose value is derived from the value of an underlying asset, interest rate or index. The Fund invests in derivatives as a substitute for investing in stocks in order to gain leveraged exposure to the Index. ProShare Advisors uses a mathematical approach to investing. Using this approach, the Advisor determines the type, quantity and mix of investment positions that the Fund should hold to approximate the performance of its benchmark. The Fund may gain exposure to only a representative sample of the securities in the underlying index, which is intended to have aggregate characteristics similar to those of the Index. FUND MANAGEMENT: ProShare Advisors serves as the investment advisor to the Fund and provides investment advice and management services to the Fund.