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| Active ETFs are investment vehicles that combine the benefits of active management with one of the most benefit-rich investment vehicles available in the marketplace today — the exchange-traded fund. |
| Until recently, all ETFs were designed to track rules-based indexes. For example, an S&P 500® ETF would invest primarily in the holdings of the S&P 500® Index. Active ETFs, on the other hand, may be managed by investment teams who rely on research, expertise and proprietary processes to choose their portfolio's holdings. |
| PowerShares Active U.S. Real Estate Fund (PSR) |
| On Nov. 20, 2008, Invesco PowerShares listed the first actively managed U.S. Real Estate ETF — PowerShares Active U.S. Real Estate Fund (PSR). The Fund seeks high total return through growth of capital and current income by investing in securities of companies that are principally engaged in the U.S. real estate industry and included within the FTSE NAREIT Equity REITs Index. |
| Invesco Institutional, the Fund's portfolio manager, has been managing real estate securities since 1988. Each potential investment will be analyzed using quantitative metrics to identify attractively priced securities. These metrics are used within an optimization framework to construct a portfolio designed to capture alpha through superior stock selection. |
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| Why PowerShares Active ETFs? |
With any active management strategy, the expertise of the investment teams and the quality of
their investment process is of the utmost importance. PowerShares is uniquely positioned in the
ETF industry by being part of Invesco, a global independent investment management firm. |
PowerShares' initial active ETFs draw on two of these Invesco investment centers in U.S.
equities and fixed income, as well as an independent partner — AER Advisors, Inc, a private financial services firm with its sole focus on sub-advisement and product development of actively managed ETFs. These investment
management capabilities complement the extensive ETF know-how of Invesco PowerShares — a leading
ETF innovator.
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1Source: FT.com, "SEC approval to renew debate on active ETFs," March 3, 2008. |
| The S&P 500® Index is an unmanaged index considered representative of the U.S. stock market. |
| Alpha is a measure of performance on a risk-adjusted basis. |
| Important Risk Information |
| There are risks involved with investing in ETFs, including possible loss of money. Unlike conventional ETFs, the Funds are not index funds. Therefore, the Funds do not necessarily seek to replicate the performance of a specified index. The Funds are subject to risk similar to stocks, including those related to short selling and margin maintenance. Ordinary brokerage commissions apply. Actively managed ETFs have a limited trading history and, therefore, there can be no assurance as to whether and/or the extent to which the shares will trade at premiums or discounts to NAV, which is the market value of a fund share. |
| Shares are not FDIC insured, may lose value and have no bank guarantee. |
| The Funds are subject to management risk because they are actively managed portfolios. There can be no guarantee that the investment techniques and risk analyses used by the Sub-Adviser or portfolio managers will produce the desired results. |
| The prices of and income generated by securities held by the Funds may decline in response to certain events, including those directly involving the companies whose securities are owned by the Fund, general economic and market conditions, and currency and interest rate fluctuations. |
| Additional PowerShares Active U.S. Real Estate Fund Risk Information |
| The risks associated with the real estate industry in general include fluctuations in the value of underlying properties; defaults by borrowers or tenants; market saturation; changes in general and local economic conditions; decreases in market rates for rents; increases in competition, property taxes, capital expenditures, or operating expenses; and other economic, political or regulatory occurrences affecting the real estate industry. The REITs are subject to risks inherent in the direct ownership of real estate. These risks include, but are not limited to, the risk of a possible lack of mortgage funds and associated interest rate risks, overbuilding, property vacancies, increases in property taxes and operating expenses, changes in zoning laws, losses due to environmental damages and changes in neighborhood values and appeal to purchases. REITs are also subject to the risk that the real estate market may experience an economic downturn generally, which may have a material effect on the real estate in which the REITs invest and their underlying portfolio securities. |
| The Fund is subject to equity risk, which is the risk that the value of the securities held by the Fund will fall due to general market and economic conditions, perceptions regarding the industries in which the issuers of securities held by the Fund participate or factors relating to specific companies in which the Fund invests. |
| Investing in securities of small and medium-capitalization companies involves greater risk than is customarily associated with investing in larger, more established companies. |
| The Fund is non-diversified, which increases the risk that the value of the fund's shares may vary more widely, and the fund may be subject to greater investment and credit risk than if it invested more broadly. |
| Because the Fund concentrates its investments in companies that are principally engaged in the real estate industry, the value of the Fund's shares may rise and fall more than the value of shares of a fund that invests in a broader range of companies. |
| Investments in REITs and real estate companies are generally subject to greater risks such as legal and other restrictions on resale and are otherwise less liquid than publicly traded securities. |
| The FTSE NAREIT Equity REITs Index is an unmanaged index considered representative of U.S. REITs. |
| PowerShares® is a registered trademark of Invesco PowerShares Capital Management LLC. Invesco PowerShares Capital Management LLC, Invesco Distributors, Inc. and Invesco Institutional (N.A.), Inc. are indirect, wholly owned subsidiaries of Invesco Ltd. |
| Invesco Distributors, Inc. is the distributor of the PowerShares Actively Managed Exchange-Traded Fund Trust. |
Shares are not individually redeemable and owners of the shares may acquire those shares from the Funds and tender those shares for redemption to the Funds in Creation Unit aggregations only, typically consisting of 50,000 shares. |
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| Active ETFs combine the benefits of active management with those of ETFs. |
| Active Management seeks to provide: |
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Higher returns than benchmark indexes |
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Consistent returns |
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Managed risk |
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Reduced volatility |
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| The ETF structure provides: |
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Low expenses1 |
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Tax efficiency2 |
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Transparency |
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Near instant liquidity3 |
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Trading at or near NAV |
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Ability to purchase on margin |
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Flexibility: market/stop/limit orders |
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| 1In comparison to other actively managed investment products. Ordinary brokerage commissions apply. |
| 2Relative to mutual funds. PowerShares does not offer tax advice. Please consult your tax advisor for information regarding your own personal tax situation. |
| 3Shares are not individually redeemable and owners of the Shares may acquire those shares from the Fund and tender those shares for redemption to the Fund in Creation Units only, typically consisting of aggregations of 50,000 shares. |
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