Unlike market-cap weighted indexes, PowerShares FTSE RAFI Portfolios incorporate the Fundamental Index® investment criteria of cash flow, book value, sales and dividends to determine a stock's weight. Assigning weights based on the size of a stock's financial footprint can help to reduce the impact of price-distorting factors and provide a more objective representation of the market. Source: Invesco PowerShares, as of Dec. 31, 2011 Cap-Weighted Strategy Fundamental Index Strategy Chart ETF Russell 1000 FTSE RAFI 1000 PRF MSCI EAFE Index FTSE RAFI Developed Markets ex-U.S. PXF MSCI AC Asia Pacific ex-Japan FTSE RAFI Asia Pacific ex-Japan PAF MSCI Emerging Markets FTSE RAFI Emerging Markets PXH MSCI EAFE Small Cap FTSE RAFI Developed ex-U.S. Small-Mid PDN Russell 2000 FTSE RAFI U.S. 1500 Small-Mid PRFZ Past performance is not indicative of future results. You cannot invest directly in an index. Incorporate analysts' optimistic growth projections Use outdated research technology Overweight overpriced stocks Underweight underpriced stocks Fully participate in market speculation Are distorted measures of the economy Display substantial growth bias Are designed to identify the fair value of each company Use fundamental variables that don't depend on the fluctuations of market valuation May be less influenced by market bubbles Seek to avoid overweighting overvalued stocks — a potential with market-cap-weighted indexes Provide an alternative to traditional market-cap-weighted indexes Recent News Leaving Bogle Behind Read Full Article Fundamental Index® Strategy Outperforms Broad Market-Cap Weighted Indexes over Five-Year Period Read Full Release Market Bubblesa The RAFI® approach is based on the premise that traditional indexes are flawed in the way they handle mispricing. During the years leading up to the inverse financial bubble, financial companies like Wells Fargo and American Express traded on average at about 2.2x book value. As the market bottomed in March 2009, financials traded at less than 0.5x book value before climbing back to pre-2009 levels. The bursting of these bubbles offers evidence of the existence of mispricing and provides incentive to consider index-based investments that may be less vulnerable to the impact of that mispricing. Financial Bubble Visualized Fundamental Factors In an effort to mitigate the effects of mispricing, the Fundamental Index methodology assigns weights to stocks based on four fundamental factors: Book value Trailing five-year average cash flow Trailing five-year average sales Trailing five-year average gross dividends These are objective factors that exist independently of a stock's price and seek to provide metrics of size that are not swayed by the whims of the market.

a Source: Bloomberg L.P.

General Risk Information

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

Past performance is not indicative of future results.

The Funds may invest in small- and/or medium-sized companies. Investing in securities of small- and medium-sized companies involves greater risk than is customarily associated with investing in more established, larger sized companies.

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.

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.

Trademarks & Other Information

PowerShares® is a registered trademark of Invesco PowerShares Capital Management LLC ("Invesco PowerShares"). Shares of the Funds are not in any way sponsored, endorsed, sold or promoted by FTSE International Limited ("FTSE") or by the London Stock Exchange Plc ("Exchange") or by The Financial Times Limited ("FT") or by Research Affiliates LLC ("RA"), and neither FTSE nor Exchange nor FT nor RA makes any warranty or representation whatsoever, expressly or implicitly, either as to the results to be obtained from the use of the Indexes and/or the figure at which the said Indexes stand at any particular time on any particular day or otherwise. The Indexes are compiled and calculated by FTSE in conjunction with RA. However, neither FTSE nor Exchange nor FT nor RA shall be liable (whether in negligence or otherwise) to any person for any error in the Indexes, and neither FTSE nor the Exchange nor FT nor RA shall be under any obligation to advise any person of any error therein. "FTSE" is a trademark of the London Stock Exchange Plc and The Financial Times Limited and is used by FTSE International Limited under license. Fundamental Index®, Fundamentals Weighted® and RAFI® are trade names and patent-pending concept are the exclusive property of Research Affiliates® LLC.

The Russell 1000, Russell 1000 Value and Russell 2000 Indexes are unmanaged indexes considered representative of large-cap, large-cap value and small-cap stocks, respectively. The Russell Indexes are trademark/service marks of the Frank Russell Co. Russell® is a trademark of the Frank Russell Co.

FTSE RAFI Indexes are designed to track the performance of equities, selected based on the following four fundamental measures of firm size: book value, cash flow, sales and dividends.

The MSCI EAFE, MSCI AC Asia Pacific ex-Japan, MSCI Emerging Markets and MSCI EAFE Small Cap Indexes are unmanaged indexes considered representative of stocks of Europe, Australasia and the Far East; Pacific region, excluding Japan; developing countries; and small-cap stocks of Europe, Australasia and the Far East, respectively.

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 Unit aggregations only, typically consisting of 50,000 Shares.

©2012 Invesco PowerShares Capital Management LLC PowerShares® is a registered trademark of Invesco PowerShares Capital Management LLC (Invesco PowerShares). Invesco PowerShares Capital Management LLC and Invesco Distributors, Inc. are indirect, wholly owned subsidiaries of Invesco Ltd. Invesco Distributors, Inc. is the distributor of the PowerShares Exchange-Traded Fund Trust, the PowerShares Exchange-Traded Fund Trust II, the PowerShares India Exchange-Traded Fund Trust and the PowerShares Actively Managed Exchange-Traded Fund Trust. Investment products offered are: Not FDIC Insured  • No Bank Guarantee  • May Lose Value View the Legal Notice