On July 9, 2008, Invesco PowerShares listed the PowerShares MENA Frontier Countries Portfolio (NASDAQ: PMNA) — which offers investors exposure to the securities of companies that are domiciled in or principally traded in frontier countries in the Middle East or North Africa (MENA). The ETF is based on the NASDAQ OMX Middle East North Africa Index^sm.

Why PowerShares MENA Frontier Countries Portfolio?

The MENA frontier countries included in the Index, as of June 24, 2008, included Egypt, Morocco, Oman, Lebanon, Jordan, Kuwait, Bahrain, Qatar and United Arab Emirates (Index currently includes the emirates of Dubai and Abu Dhabi). The countries included in the Index have reported strong GDP growth for the fifth consecutive year — posting an estimated 5.35% average growth rate in 2007.¹

¹Source: CIA World Factbook, 2008. The MENA universe includes all countries currently represented in the underlying index. While the underlying index currently has exposure to only two emirates within the United Arab Emirates (Dubai and Abu Dhabi), CIA World Factbook does not provide data for each individual emirate. Therefore, all emirates are accounted for in this illustration.

There are risks involved with investing in ETFs including the possible loss of money. Shares are not actively managed and are subject to risks similar to stocks, including those related to short selling and margin maintenance.

Small and Medium Capitalization Risk Information

An investment in securities of small and medium-sized capitalization companies involves greater risk than is customarily associated with investing in larger, more established companies.

Foreign Investment Risks

An investment in the securities of non-U.S. issuers involves risks beyond those associated with investments in U.S. securities, including, but not limited to: greater market volatility, the availability of less reliable financial information, higher transactional and custody costs, taxation by foreign governments, decreased market liquidity, political instability, negative impact of changes in currency exchange rates or foreign governmental regulation, currency risk, fluctuation due to changes in interest rates, effects of monetary policies issued by the United States, foreign governments, central banks or supranational entities and currency controls or other national or global political economic developments, among others.

Frontier Market Risk Information

An investment in securities of frontier countries involves risks not associated with investments in securities of developed countries, including, but not limited to: generally smaller economies or less developed capital markets than traditional emerging markets, economies that are less correlated to global economic cycles than those of their more developed counterparts, low trading volumes, potential for extreme price volatility and illiquidity, which may be further heightened by the actions of a few major investors, governments of many frontier countries in which the Fund invests may exercise substantial influence over many aspects of the private sector (in some cases, the governments of such frontier countries may own or control certain companies), government action, heavy dependency upon international trade which has been and may continue to be, adversely affected by trade barriers, exchange controls, managed adjustments in relative currency values and other protectionist measures imposed or negotiated by the countries with which they trade, and risks associated with certain foreign governments in countries in which the Fund invests levying withholding or other taxes on dividend and interest income, sanctions or embargoes imposed by the U.S. government and the United Nations and/or countries identified by the U.S. government as state sponsors of terrorism and foreign investment holdings limitations, among others.

Micro-Capitalization Company Risk Information

Investments in securities of micro-capitalization companies involve substantially greater risks of loss and price fluctuations because their earnings and revenues tend to be less predictable (and some companies may be experiencing significant losses), and their share prices tend to be more volatile and their markets less liquid than companies with larger market capitalizations.

Non-Diversified Fund & Industry Risk Information

The Fund is considered non-diversified and can invest a greater portion of assets in securities of individual issuers than a diversified fund. As a result, changes in the market value of a single investment could cause greater fluctuations in share price than would occur in a diversified fund. The economies of frontier country markets are less developed and can be overly reliant on particular industries. It is likely that a substantial number of stocks included in the Underlying Index for certain of the MENA frontier countries will be securities of banks and other financial institutions. When a Fund is focused in a specific industry or sector, it presents greater risks than if it were broadly diversified over numerous industries and sectors of the economy. Please read the prospectus for a summary of these risks pertaining to each industry or sector.

Investments in the Fund may be Less Tax-Efficient Than Investment in Other Exchange-Traded Funds

Unlike most exchange-traded funds, the Fund currently intends to effect redemptions primarily for cash, rather than primarily in-kind redemptions. As such, investments in Shares may be less tax-efficient than investments in conventional exchange-traded funds. Exchange-traded funds generally are able to make in-kind redemptions and avoid being taxed on gain on the distributed portfolio securities at the fund level. Because the Fund currently intends to effect redemptions primarily for cash, rather than in-kind distributions, it may be required to sell portfolio securities in order to obtain the cash needed to distribute redemption proceeds. If the Fund recognizes gain on these sales, this generally will cause the Fund to recognize gain it might not otherwise have recognized, or to recognize such gain sooner than would otherwise be required if it were able to distribute portfolio securities in-kind. The Fund generally intends to distribute these gains to shareholders to avoid being taxed on this gain at the Fund level and otherwise comply with the special tax rules that apply to it. This strategy may cause shareholders to be subject to tax on gains they would not otherwise be subject to, or at an earlier date than, if they had made an investment in a different exchange-traded fund.

Trademarks and License Agreement Information

Power Shares® is a registered trademark of Invesco PowerShares Capital Management LLC. Invesco PowerShares Capital Management LLC and Invesco Aim Distributors, Inc. are indirect, wholly owned subsidiaries of Invesco Ltd.

NASDAQ®, OMX™ and NASDAQ OMX Middle East North Africa Indexsm are trade/service marks of The NASDAQ OMX Group, Inc. (which with its affiliates is referred to as the "Corporations") and are licensed for use by Invesco PowerShares. The Fund has not been passed on by the Corporations as to their legality or suitability. The Fund is not issued, endorsed, sold or promoted by the Corporations. The Corporations make no warranties and bear no liability with respect to the Fund.

Participation Notes ("P-notes") and their Risks

The Fund initially expects to invest up to 20% of its net assets in P-notes in seeking to track the performance of Kuwaiti securities included in the Underlying Index.

P-notes generally are issued by banks or broker-dealers and are promissory notes that are designed to offer a return linked to the performance of a particular underlying equity security or market. The return on a P-note that is linked to a particular underlying security generally is increased to the extent of any dividends paid in connection with the underlying security. However, the holder of a P-note typically does not receive voting rights as it would if it directly owned the underlying security. P-notes constitute direct, general and unsecured contractual obligations of the banks or broker-dealers that issue them, which therefore subjects the Fund to counterparty risk, as discussed below.

Investments in P-notes involve certain risks in addition to those associated with a direct investment in the underlying foreign companies or foreign securities markets whose return they seek to replicate. For instance, there can be no assurance that there will be a trading market for a P-note or that the trading price of a P-note will equal the underlying value of the foreign company or foreign securities market that it seeks to replicate. As the purchaser of a P-note, the Fund is relying on the creditworthiness of the counterparty issuing the P-note and has no rights under a P-note against the issuer of the underlying security. Therefore, if such counterparty were to become insolvent, the Fund would lose its investment. The risk that the Fund may lose its investments due to the insolvency of a counterparty may be amplified because the Fund intends to purchase P-notes issued by as few as one issuer. In seeking to limit its counterparty risk, the Fund will limit its investment in P-notes of any one issuer to $5 million at the time of purchase and to counterparties who meet the creditworthiness standard required of issuers whose securities are eligible for investment by money market funds. P-notes also include transaction costs in addition to those applicable to a direct investment in Kuwaiti securities. In addition, the Fund's use of P-notes may cause the Fund's performance to deviate from the performance of the portion of the Underlying Index to which the Fund is gaining exposure through the use of P-notes.

Due to liquidity and transfer restrictions, the secondary markets on which the P-notes are traded may be less liquid than the markets for other securities, or may be completely illiquid, which may lead to the absence of readily available market quotations for securities in the Fund's portfolio and which may also lead to delays in the redemption of Fund Shares. In addition, the ability of the Fund to value its securities becomes more difficult and the judgment in the application of fair value procedures (through fair value procedures adopted by the Trustees) may play a greater role in the valuation of the Fund's securities due to reduced availability of reliable objective pricing data. Consequently, while such determinations will be made in good faith, it may nevertheless be more difficult for the Fund to accurately assign a daily value to such securities.

Tax Consequences of Redemption Proceeds Being Limited Primarily to Cash

Unlike most exchange-traded funds, the Fund does not and will not generally make primarily in-kind redemptions. As such the Fund may be required to sell portfolio securities in order to obtain the cash needed to distribute redemption proceeds. Generally, this will cause the Fund to recognize gain it might not otherwise have recognized, or to recognize such gain sooner than would otherwise be required, if it were able to distribute the shares primarily in-kind. Based on the U.S. federal income tax rules applicable to the ETF and an investment in the ETF, this may cause particular shareholders to be subject to tax on gains they would not otherwise be subject to, or at an earlier date than, if they had made an investment in a different exchange-traded fund.