Fund Description: The ProShares Ultra Industrials 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). <p> 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. Industrials 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. <p> INDEX DESCRIPTION: The Dow Jones U.S. Industrials Index measures the performance of the industrial industry of the U.S. equity market. Component companies include building materials, heavy construction, factory equipment, heavy machinery, industrial services, pollution control, containers and packaging, industrial diversified, air freight, marine transportation, railroads, trucking, land-transportation equipment, shipbuilding, transportation services, advanced industrial equipment, electric components and equipment, and aerospace. As of September 30, 2006, the Dow Jones U.S. Industrials Index included companies with capitalizations between $180.1 million and $367.1 billion. The average capitalization of the companies comprising the Index was approximately $6.6 billion. <p> FUND STRATEGY: The ProShares Ultra Industrials Fund’s principal investment strategies include: investing in equity securities and/or financial instruments (including derivatives) that ProShare Advisors believes, in combination, should have similar daily price return characteristics as twice (200%) the daily return of the Dow Jones U.S. Industrials Index; employing leveraged investment techniques and/or sampling techniques in seeking its investment objective; and investing assets not invested in equity securities or financial instruments, in debt securities and/or money market instruments. The Fund employs leveraged investment techniques to achieve its investment objective. Over time, the use of leverage, combined with the effect of compounding, will have a more significant impact on the Fund’s performance compared to the index underlying its benchmark than a fund that does not employ leverage. Therefore, the return of the index over a period of time greater than one day multiplied by a fund’s specified multiple or inverse multiple (e.g., 200% or -200%) will not generally equal a fund’s performance over that same period. <p> FUND MANAGEMENT: Principal Investment Strategy ProShare Advisors LLC serves as the investment advisor to the Fund.