Beleaguered online grocer

Webvan

(WBVN)

tried to resuscitate its nearly worthless shares by raising their price with a reverse share split yesterday. Today, a humbling reverse split will happen in the supposedly tamer mutual fund world, too.

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A fund's share price -- no matter how high or low -- has no bearing on its future prospects, so mutual fund share splits are typically

pointless, punchless marketing ploys that are barely worth mention. But today's underscores just how lousy things have been over the past year and how stock-like some mutual funds can be.

At the close of trading tonight,

ProFunds

will execute a reverse 1-for-10 share split for the struggling

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Internet UltraSector ProFund,

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Technology UltraSector ProFund,

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Semiconductor UltraSector ProFund and

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Wireless Communications UltraSector ProFund funds -- four funds that use derivatives to seek 150% of a sector index's returns.

Here's how it works: At the end of the day on Friday, each fund's share price will be multiplied by 10 and each shareholder's share balance will be divided by 10. For example, a shareholder with 1,000 shares worth $3 each will have 100 shares worth $30 each. As you can see, the split doesn't have any effect on the value of a shareholder's account.

Though the funds were only launched last June their losses are already so big that their initial $10 net asset value (NAV) or share prices are already around or below $5. The losses are so steep and sudden that they warrant a reverse share split to assuage traditional investors to whom a meager share price might be a red flag, and madcap types whose brokerage might not let them buy a security on margin if its share price is below $5.

Fund marketers usually split a fund's shares after it's made gains to make it seem cheaper. Here the move is being made to raise these funds' share prices and mask their vast losses.

"Fund splits are an impressive waste of effort, but it's a sign of the times when we're having a reverse split," says Russ Kinnel,

Morningstar's

director of fund research. "Though NAV

net asset value or share price is meaningless, for a fund launched in '99 or 2000 it does give you some idea of what its inception returns are. When you're down to a $3 or $4 dollar NAV, it's pretty embarrassing. One of their motivations is to take attention away from the fact that the funds lost a lot."

The problem with fund splits is that a fund's share price is irrelevant. A fund's NAV is based on the underlying value of the stocks held in the fund's portfolio. The bottom line: A buck invested in a fund will get the same return if the fund's shares are selling for $10 or $10,000.

This doesn't escape fund marketers. In fact, it seems that most fund investors get it, too. The

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Vanguard 500 Index fund, the largest fund currently open to new investors, closed at $114 per share on Thursday. And the

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Vanguard Health Care fund, the nation's biggest sector fund with more than $16 billion in its coffers, closed at over $116 per share on Thursday.

Why do funds bother splitting shares? Well, the thinking here is that some investors are confused and will steer clear of funds with high or low share prices. Dropping a fund's share price gives you the opportunity to drum up misplaced urgency, and raising a fund's share price helps you mask big losses since its inception. There's also the idea that some investors think of splits as positive news when it comes to stock investing.

The ProFunds press release announcing the split doesn't mention the margin issue -- a call to the firm wasn't immediately returned. Instead it sticks with usual and circular rationale that they've "received numerous calls from shareholders" who want the funds' share prices within a more traditional range.

"Trying to get the NAV in the magic $10 to $20 area is amusing," says Kinnel. "Obviously some funds do this, even more respected fund shops do it and don't call people's attention to it. If you do call people's attention to a split, you're telling them to buy something for a meaningless reason."

Of course, ProFunds are hardly the only fund shop out there splitting shares.

Rydex Funds

, which also offers high-octane leveraged index funds, executed two reverse splits a week ago. Last year

John Hancock Funds

and

Monument Funds

split shares, which is interesting since those firms sell their funds through brokers who should know that a fund's share price isn't a material concern.

The bottom line is that in most cases splits tell you nothing other than the fact that some fund companies factor in their customers' ignorance. The only twist with today's splits is that they also tell you about investors' losses too.