The PowerShares VRDO Tax-Free Weekly Portfolio (Fund) is based on the Thomson Municipal Market Data VRDO Index (Index). The Fund will normally invest at least 90% of its total assets in securities that comprise the Index. The Index is designed to track the performance of a pool of tax-exempt Variable Rate Demand Obligations (VRDOs) issued by municipalities in the United States on which the yields generally reset on a weekly basis. VRDOs are high-quality, floating-rate bonds that provide investors with tax-exempt income. VRDOs are generally purchased at par. When they are put back to an investment dealer, the investor generally receives par plus accrued interest. |
 |
Date |
|
11/19/2009 |
|
|
Price |
|
24.99 |
|
|
Bid/Ask Midpoint |
|
25.00 |
|
| |
|
NAV |
|
24.99 |
|
|
Bid/Ask Prem/Disc  |
|
0.00 |
|
|
Bid/Ask Prem/Disc |
|
0.01% |
|
|
|
|
|
|
| As of 9/30/2009 |
| Index History (%) | 1 Year | 3 Year | 5 Year | 10 Year | Fund Inceptiona |
| Thomson Municipal Market Data VRDO Index | 1.37 | | | | 2.07 |
| S&P 500 Index | -6.91 | | | | -16.05 |
|
| Fund History (%) | 1 Year | 3 Year | 5 Year | 10 Year | Fund Inceptiona |
| NAV | 1.96 | | | | 2.57 |
| After Tax Held | 1.22 | | | | 1.64 |
| After Tax Sold | 1.27 | | | | 1.65 |
| Market Price | 2.16 | | | | 2.59 |
| aFund and underlying Index returns are based on the inception date of the Fund. Returns for the benchmark indexes are based on the closest month end to the Fund's inception date. |
Total returns are based on the closing market price. Market returns are based on the midpoint of the bid/ask spread at 4 p.m. ET and do not represent the returns an investor would receive if shares were traded at other times. Performance data quoted represents past performance, which is not a guarantee of future results. Investment returns and principal value will fluctuate, and shares, when redeemed, may be worth more or less than their original cost. Current performance may be higher or lower than performance data quoted. After-tax returns reflect the highest federal income tax rate but exclude state and local taxes. Fund performance reflects fee waivers, absent which, performance data quoted would have been lower. After Tax Held and After Tax Sold are based on NAV.
|
 |
| As of 9/30/2009 |
 |
| Data beginning 11/30/2007, the month end following Fund inception |
| An investor cannot invest directly in an index. The results assume that no cash was added to or assets withdrawn from the Index. Index returns do not represent Fund returns. The Index does not charge management fees or brokerage expenses, nor does the Index lend securities, and no revenues from securities lending were added to the performance shown. |
 |
| |
Bid/Ask MidPoint Above NAV |
Bid/Ask Midpoint Below NAV |
| Quarter |
Days |
50-99
Basis Points |
100-199
Basis Points |
H200
Basis Points |
50-99
Basis Points |
100-199
Basis Points |
H200
Basis Points |
| 12/31/2009 |
22 |
0 |
0 |
0 |
0 |
0 |
0 |
| 9/30/2009 |
63 |
0 |
0 |
0 |
0 |
0 |
0 |
| 6/30/2009 |
63 |
0 |
0 |
0 |
0 |
0 |
0 |
| 3/31/2009 |
61 |
0 |
0 |
0 |
0 |
0 |
0 |
| Fund Inception: 11/15/2007 |
|
Fund Holdings subject to change |
|
| | Coupon Rate | Maturity Date | Rating† | Weight |
| HALL CNTY GAINESVILLE GA HOSP AUTH VAR 05/01/2036 | 1.25% | 5/1/2036 | AAA/Baa1 | 3.38% |
| SAN BERNARDINO CNTY CALIF CTFS PARTN 08/01/26 | 4.50% | 8/1/2026 | AA-/Baa1 | 3.11% |
| CHICAGO ILL BRD ED Floater 3/1/2032 | 0.35% | 3/1/2032 | AAA/AA3 | 2.93% |
| CHARLOTTE-MECKLENBURG HOSP AUT VAR | 0.33% | 1/15/2037 | A-1+/VMG1 | 2.46% |
| SPRINGFIELD TENN HEALTH EDL FLT 08/01/2033 | 1.50% | 8/1/2033 | NONR/VMG2 | 2.22% |
| NEW YORK ST FLTR 3/13/2020 | 0.43% | 3/13/2020 | A-1/VMG1 | 2.16% |
| WHITE CNTY IND HOSP ASSN LEASE/RENT REV 10/01/38 | 3.25% | 10/1/2038 | NR/Baa1 | 2.10% |
| MARYLAND ST HEATLH & HIGHER ED FLT 10/01/2037 | 1.25% | 10/1/2037 | AA+/Aaa | 2.09% |
| AUSTIN TEX WTR & WASTEWATER FLOATER 5/15/2024 | 0.60% | 5/15/2024 | AAA/Aa3 | 2.06% |
| USF FING CORP FLA CTFS PARTN VAR 07/01/2037 | 1.00% | 7/1/2037 | A+/A2 | 2.02% |
| | % of Fund |
| 0 - 1 years | 0.00 |
| 1 - 5 | 0.89 |
| 5 - 10 | 3.88 |
| 10 - 15 | 17.42 |
| 15 - 20 | 12.30 |
| 20 - 25 | 28.82 |
| 25 and Over | 36.70 |
| |
| | % of Fund:
(S&P) | % of Fund:
(Moody's) |
| AAA/Aaa | 42.40 | 10.41 |
| AA/Aa | 18.11 | 50.84 |
| A/A | 6.74 | 12.04 |
| BBB/Baa | 3.45 | 15.40 |
| BB/Ba | 0.00 | 0.22 |
| B/B | 0.00 | 0.00 |
| Other | 29.30 | 11.10 |
|
†The credit quality of the Fund's holdings represents the weighted average quality rating of the securities in the portfolio as assigned by Nationally Recognized Statistical Rating Organizations based on assessment of the credit worthiness of the underlying securities. The ratings range from AAA (highest) to D (lowest).
Performance data quoted represents past performance. Past performance is no guarantee of future results. PowerShares Exchange-Traded Fund Trust II portfolios are not actively
managed and are subject to risk similar to stocks, including those related to short selling and margin maintenance. The PowerShares VRDO Tax-Free Weekly Portfolio's return may not match the return of the Thomson Municipal Market Data VRDO Index, as outlined in the prospectus. For actual Fund performance, please contact your financial advisor. Index performance does not reflect charges and expenses associated with the Fund or brokerage commissions associated with buying and selling Fund shares.
The value of the securities in the Thomson Municipal Market Data VRDO Index is likely to be more volatile than securities of other issues. An investor in the Fund should anticipate that the value of their shares will increase or decease in value more or less in correlation with increases and decreases in the value of the Index. There are risks involved with investing in ETFs including the possible loss of money. The investment return and principal value of an investment in PowerShares VRDO Tax-Free Weekly Portfolio will fluctuate so that shares, when sold, may be worth more or less than their original cost.
The Fund's return may not match the return of the Thomson Municipal Market Data VRDO Index for a number of reasons. For example, the Fund incurs a number of operating expenses not applicable to the Thomson Municipal Market Data VRDO Index, and incurs costs in buying and selling securities, especially when rebalancing the Fund's securities holdings to reflect changes in composition of the Index.
The Fund's use of a representative sampling approach will result in its holding a smaller number of bonds than are in the Fund's underlying Index. As a result, an adverse development respecting an issuer of bonds held by the Fund could result in a greater decline in NAV than would be the case if the Fund held all of the bonds in the Fund's underlying Index. To the extent the assets in the Fund are smaller, these risks will be greater.
The Fund may not be fully invested at times, either as a result of cash flows into the fund or reserves of cash held by the Fund to meet redemptions and expenses.
The Fund, using an "indexing" investment approach, attempts to replicate,
before fees and expenses, the performance of the Underlying Index. The Adviser
seeks correlation over time of 0.95% or better between the Fund’s performance
and the performance of the Underlying Index. The Adviser will use a "sampling"
methodology in seeking to achieve the Fund’s investment objective. Sampling
involves the use of quantitative analysis to select securities from the Underlying
Index to obtain a representative sample of municipal securities that have in the
aggregate investment characteristics similar to the Underlying Index based on
such factors as duration, maturity, credit quality, yield and coupon. The Adviser
generally expects the Fund to hold less than the total number of securities in the
Underlying Index but reserves the right to hold as many securities as it believes
necessary to achieve the Fund's investment objective.
Variable Rate Debt Obligations Risk: There may not be an active secondary market with respect to particular variable rate instruments in which the Fund invests, which could make it difficult for the Fund to dispose of a variable rate instrument if the issuer and/or the Remarketing Agent defaulted on its payment obligation or during periods that the Fund is not entitled to exercise its demand rights, and the Fund could, for these or other reasons, suffer a loss with respect to such instruments. Municipal securities are subject to the risk that litigation, legislation or other political events, local business or economic conditions or the bankruptcy of the issuer could have a significant effect on an issuer's ability to make payments of principal and/or interest.
Municipal securities can be significantly affected by political changes as well as uncertainties in the municipal market related to taxation, legislative changes or the rights of municipal security holders. Because many securities are issued to finance similar projects, especially those relating to education, health care, transportation and utilities, conditions in those sectors can affect the overall municipal market. In addition, changes in the financial condition of an individual municipal insurer can affect the overall municipal market.
Please see the prospectus for more complete information regarding VRDOs and municipal securities.
There is no guarantee that the Funds' income will be exempt from federal or state income taxes.
A substantial portion of the municipal securities held by the PowerShares VRDO Tax-Free Weekly Portfolio will be covered by insurance that guarantees the bond's scheduled payment of interest
and repayment of principal. Municipal security insurance does not insure against market fluctuations or
fluctuations in the Fund's share price. In addition, a municipal security insurance policy will not cover:
(i) repayment of a municipal security before maturity (redemption), (ii) prepayment or payment of an
acceleration premium (except for a mandatory sinking fund redemption) or any other provision of a bond
indenture that advances the maturity of the bond or (iii) nonpayment of principal or interest caused by
negligence or bankruptcy of the paying agent.
Please review a copy of the prospectus carefully prior to investing. The prospectus provides a detailed explanation of the costs of investing, including the Total Annual Fund Operating Expenses. You may purchase or sell PowerShares VRDO Tax-Free Weekly Portfolio shares throughout the day through any brokerage account, which will result in typical brokerage commissions. However, only Authorized Participants may create or redeem PowerShares VRDO Tax-Free Weekly Portfolio shares directly from the Trust in large block creation/redemption units. The PowerShares VRDO Tax-Free Weekly Portfolio is obligated to distribute portfolio gains to shareholders, and trading Fund shares may generate tax consequences.
Shares 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 100,000 shares.
The Fund is not sponsored, endorsed, sold or promoted by Thomson Financial or its affiliates and Thomson Financial makes no representation regarding the advisability of investing in the Fund.
The Fund is not sponsored or endorsed by the American Stock Exchange (AMEX), and the AMEX makes no warranty or representation as to the accuracy and/or
completeness of the Indexes or the results to be obtained by any person from the use of the Indexes or the trading of the Fund shares.
The S&P 500® Index is
an unmanaged index considered representative of
the U.S. stock market.
Except where indicated otherwise, all information is as of date noted, and Invesco PowerShares Capital Management LLC is either the source of such data or has obtained it from third-party financial reporting sources.
Shares of the PowerShares VRDO Tax-Free Weekly Portfolio are subject to risks similar to those of stocks, including those regarding short selling and margin account maintenance. Usual brokerage commissions apply.
For more information regarding PowerShares VRDO Tax-Free Weekly Portfolio or any of the Invesco PowerShares products, please call 800.983.0903.
