ProShares Launches First True Merger Arbitrage ETF

ProShares, a premier provider of alternative exchange traded funds (ETFs), today announced the launch of the ProShares Merger ETF (Ticker: MRGR), the first ETF based on a true merger arbitrage strategy. MRGR aims to produce the risk/return characteristics of a merger arbitrage strategy by tracking the performance of the S&P Merger Arbitrage Index (before fees and expenses). The ETF lists on BATS Exchange today.

Merger arbitrage strategies, frequently used by institutions and high-net-worth investors, seek to capture the spread between a target company’s stock price after a proposed merger or acquisition is announced and the deal price that the acquiring company will pay for the target company.

“The goal of MRGR is to produce consistent, positive returns under virtually any market conditions," said Michael L. Sapir, Chairman and CEO of ProShare Advisors LLC, ProShares' investment advisor. "We are pleased to offer access to a true merger arbitrage strategy delivered for the first time with the cost efficiency, transparency and liquidity of an ETF."

Since the key drivers of merger arbitrage returns are different from the key drivers of equity market returns, the performance of a merger arbitrage strategy is not expected to be correlated to equity markets over time. This potentially makes merger arbitrage a valuable diversification tool.

About Merger Arbitrage

A true merger arbitrage strategy aims to capture the spread between a target company’s stock price after a proposed merger or acquisition is announced and the price that the acquiring company will pay for the target company. It does this by obtaining long exposure to the stock of a target firm once the merger or acquisition is announced and seeking appreciation as it nears completion. Additionally, short exposure to the stock1 of the acquiring company is required to lock in the spread in deals where the acquirer’s stock is used for all or part of the purchase.

About the Index

S&P Merger Arbitrage Index seeks to provide a merger arbitrage strategy that exploits commonly observed price changes associated with a global selection of publicly announced mergers, acquisitions and other corporate reorganizations.

The Index provides exposure to up to 40 publicly announced mergers or acquisitions (“deals”) within developed market countries through a combination of long and, in certain cases, short security positions. When deals enter the Index, the weight in long positions of target companies is initiated at three percent (3%) and the initial weight in short positions of the acquiring company ranges between zero and three percent (0% and 3%), depending on terms of the deal.

For more information about MRGR’s index, visit: http://us.spindices.com/indices/strategy/sp-merger-arbitrage-index.

About ProShares

Offering the nation's largest lineup of alternative ETFs,2 ProShares helps investors to go beyond the limitations of conventional investing and face today’s market challenges. Each ProShares ETF provides access to an alternative investment strategy delivered with the liquidity, transparency and cost effectiveness of an ETF. ProShares' lineup of 139 ETFs includes Global Fixed Income, Hedge Strategies, Geared (leveraged and inverse), and Inflation and Volatility ETFs.

1 Rather than shorting broad market indexes, as other merger arbitrage ETFs do

2 Source: Financial Research Corporation, based on an analysis of all known alternative ETF providers (as defined by FRC) by their number of funds and assets (as of 3/31/2012).

Investing involves risk, including the possible loss of principal. ProShares are non-diversified and entail certain costs and risks, including the risk associated with the use of derivatives (swap agreements, futures contracts and similar instruments), imperfect benchmark correlation and market price variance. Short positions lose value as security prices increase. International investments may also involve risk from unfavorable fluctuations in currency values, differences in generally accepted accounting principles, and from economic or political instability. These risks can increase volatility and decrease performance. Please see the summary and full prospectuses for a more complete description of risks. There is no guarantee any ProShares ETF will achieve its investment objective.

The fund targets the same mergers, acquisitions or other corporate reorganizations ("deals") as the S&P Merger Arbitrage Index (the "index") and is exposed to similar risks. There is no assurance that any targeted deal will be completed, and most or all of the deals could fail under certain market conditions. If a targeted deal fails, spreads in that deal should be expected to widen, typically resulting in losses well in excess of the spread the index and funds were attempting to capture. In addition, deals may be terminated, renegotiated, or subject to a longer time frame than initially contemplated. The index may also delete transactions, thus precluding potential future gains. These events may negatively impact the performance of the index and fund. Foreign companies involved in targeted deals may present risks distinct from comparable transactions completed solely within the United States.

International investments may involve risk from unfavorable fluctuations in currency values, differences in generally accepted accounting principles, and from economic or political instability.

Carefully consider the investment objectives, risks, charges and expenses of ProShares before investing. This and other information can be found in their summary and full prospectuses. Read them carefully before investing. Obtain them from your financial advisor or broker/dealer representative or by visiting ProShares.com.

The "S&P Merger Arbitrage Index" is a product of S&P Dow Jones Indices LLC and its affiliates and has been licensed for use by ProShares. "S&P" is registered trademark of Standard & Poor’s Financial Services LLC ("S&P") and "Dow Jones®" is a registered trademark of Dow Jones Trademark Holdings LLC ("Dow Jones") and have been licensed for use by S&P Dow Jones Indices LLC and its affiliates. ProShares have not been passed on by S&P Dow Jones Indices LLC and its affiliates as to their legality or suitability. ProShares based on the S&P Merger Arbitrage Index are not sponsored, endorsed, sold or promoted by S&P Dow Jones Indices LLC, Dow Jones, S&P or their respective affiliates, and they make no representation regarding the advisability of investing in ProShares. THESE ENTITIES AND THEIR AFFILIATES MAKE NO WARRANTIES AND BEAR NO LIABILITY WITH RESPECT TO PROSHARES.

ProShares are distributed by SEI Investments Distribution Co., which is not affiliated with the fund’s advisor.

Contacts:

Media:
Hewes Communications, Inc.
Tucker Hewes, 212-207-9451
tucker@hewescomm.com
or
Investor:
ProShares
866-776-5125
proshares.com

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