InvescoPowerShares.com - Tax-Loss Harvesting Strategies

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Negative returns on investment can create an opportunity to lock in significant capital losses for tax purposes. Capital losses can be used to offset taxation on capital gains. Similarly, capital losses can also be used as a tax write off to deduct up to $3,000 from an individual's personal income.

In some cases it may be beneficial to realize a security's capital loss while still maintaining the investment's intended exposure. Internal Revenue Service "wash-sale" laws disallow capital losses if a security is sold at a loss and repurchased within a 61-day period. However, exchange-traded funds (ETFs) are not considered "substantially identical" to individual stocks or bonds. Consequently, an investor may sell a security (realizing capital loss) and purchase an ETF that correlates strongly to the same security in the same day.

There are two strategies to consider: ETF holdings-based tax-loss harvesting and ETF correlation-based tax-loss harvesting.

Correlation is the similarity of performance.

The Shares are subject to market fluctuations caused by such factors as economic, political, regulatory or market developments, changes in interest rates and perceived trends in securities prices.

There are risks involved with investing in ETFs including possible loss of money. Index-based ETFs are not actively managed. Actively managed ETFs do not necessarily seek to replicate the performance of a specified index. Both index-based and actively managed ETFs are subject to risk similar to stocks, including those related to short selling and margin maintenance. Ordinary brokerage commissions apply.

While it is not Invesco PowerShares intention, there is no guarantee that the Funds will not distribute capital gains to its shareholders.

Investors should consider their entire financial situation when contemplating selling one security in exchange for another and not just one facet, such as taxes.

The benefits of tax-loss harvesting will vary depending on each investor's income tax situation. ETFs may have additional risks that may not be associated with an investor’s original investment. Please read the fund's prospectus carefully before investing. Invesco PowerShares does not offer tax advice. Investors should consult their own tax advisor for information regarding their own tax situations.

There is no guarantee that the Funds’ income will be exempt from federal or state income taxes.

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 100,000 shares.

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ETFs: Tax Advantages for Shareholders

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

Invesco Aim 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

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