S&P /
Moody’s
Average Tax
Index ETF # credit Effective equivalent Yield to
name/Provider sponsor holdings rating duration yield % Worst%
--------- -------- ------ -------- ---------- ----------
Merrill Lynch
National
Insured
Long-Term Core
Municipal
Securities
Index PowerShares 868 AAA 12.03 7.32* 4.76
S&P National
Municipal Bond
Index BGI 3,069 AA+/Aa1 7.65 6.63 4.31
Lehman Municipal
Managed Money
Index SSgA 22,748 AA+/Aa1 8.42 6.6 4.29
Index Performance %
(total return annualized) 1-yr 3-yr 5-yr 10-yr
------------------------- ---- ---- ---- -----
Merrill Lynch National
Insured Long-Term Core
Municipal Securities Index 1.09 4.54 5.34 5.99
S&P National Municipal Bond
Index 2.44 3.79 N/A N/A
Lehman Municipal Managed Money
Index 2.03 3.35 4.19 5.47
Sources: Merrill Lynch; S&P National Municipal Bond Index fact sheet, Aug.
31, 2007; SPDR Lehman Municipal Bond ETF fact sheet, Aug. 31, 2007. Index
inception dates are as follows: Merrill Lynch National Insured Long-Term
Core Municipal Securities Index - 12/31/1996, S&P National Municipal Bond
Index - 9/11/07 and Lehman Municipal Managed Money Index - 07/01/1993.
Performance data quoted represents past performance. Past performance is
not a guarantee of future results, current performance may be higher or
lower than performance quoted.
The Index performance results for the Merrill Lynch National Insured Long-Term Core Municipal Securities Index are hypothetical. Returns do not
represent Fund returns. The PowerShares Insured National Municipal Bond
Portfolio, on which the Index is based, is a new fund and therefore has no
performance information to report. An investor cannot invest directly in an
index. The index does not charge management fees or brokerage expenses, and
no such fees or expenses were deducted from the hypothetical performance
shown nor does the index lend securities, and no revenues from securities
lending were added to the performance shown. In addition, the results
actual investors might have achieved would have differed from those shown
because of differences in the timing, amounts of their investments, and
fees and expenses associated with an investment in the Fund.
* PowerShares does not offer tax advice. Only interest paid by the bonds
and income dividends collected by the ETF and passed through to investors
is tax exempt and may be subject to state and local taxes. Please contact
your tax advisor for information regarding your own tax situation.
Federally tax-exempt yields shown are for illustrative purposes only and do
not represent or predict the tax-exempt yield of this portfolio. Tax rates
represent the three highest federal tax rates as of 2007. Taxable
Equivalent Yields do not take into account the potential effects of capital
gains taxes, state and/or local taxes, or the federal alternative minimum
tax.
Effective duration is a calculation for bonds with embedded options and
accounts for expected cash flow fluctuation as interest rates change. Yield
to worst is the yield to maturity if the worst possible bond repayment
takes place.
The PowerShares Insured National Municipal Bond Portfolio (Symbol: PZA) is
based on the Merrill Lynch National Insured Long-Term Core Municipal
Securities Index(SM). The PowerShares Insured California Municipal Bond
Portfolio (Symbol PWZ) is based on the Merrill Lynch California Insured
Long-Term Core Municipal Securities Index(SM). And the PowerShares Insured
New York Municipal Bond Portfolio (Symbol PZT) is based on the Merrill
Lynch New York Insured Long-Term Core Municipal Securities Index(SM).
PowerShares Capital Management LLC is leading the intelligent ETF
revolution through its family of more than 90 domestic and international
exchange-traded funds, which seek to outperform traditional benchmark
indexes while providing advisors and investors access to an innovative
array of focused investment opportunities. With franchise assets of nearly
$35 billion, PowerShares ETFs trade on all three U.S. stock exchanges and
the PowerShares QQQ™, which tracks 100 of the NASDAQ's fastest-growing
companies, is the most actively traded equity security in the world. For
more information, please visit us at www.powershares.com.
PowerShares is a part of INVESCO PLC, a leading independent global
investment manager dedicated to helping people worldwide build their
financial security. Operating under the AIM, AIM Trimark, Atlantic Trust,
Invesco Perpetual, PowerShares and WL Ross & Co. brands, INVESCO PLC
strives to deliver outstanding products and services through a
comprehensive array of enduring investment solutions for its retail,
institutional and private wealth management clients around the world. The
company, which had approximately $507 billion in assets under management as
of Sept. 30, 2007, is listed on the London, New York and Toronto stock
exchanges with the symbol "IVZ." Additional information is available at
www.invesco.com.
Risks of Owning Exchange-Traded Funds
Exchange-traded funds are made up of publicly traded securities that can
and will move higher and lower with market movements. You should anticipate
that the value of the shares of each fund will advance or decline more or
less in correlation with the advance or decline in value of the applicable
index. The Funds are not actively managed, and shares of the Funds may
trade at or below the Funds' NAV. Exchange-traded funds are subject to
risks similar to those of stocks, including risks associated with short-selling and margin account maintenance. Ordinary brokerage commissions
apply.
An investor should consider the Fund's investment objectives, risks,
charges and expenses carefully before investing. For this and more complete
information about the Fund, call 800.983.0903. Please read the prospectus
carefully before investing.
The Merrill Lynch National Insured Long-Term Core Municipal Securities, S&P
National Municipal Bond and Lehman Municipal Managed Money Indexes are
unmanaged indexes used as a measurement of change in municipal bond market
conditions based on the average performance of approximately 868, 3,069 and
22,748 municipal securities, respectively.
Only interest paid by the bonds and income dividends collected by the ETF
and passed through to investors is tax exempt and may be subject to state
and local taxes. Please contact your tax advisor for information regarding
your own tax situation.
Federally tax-exempt yields and tax rates shown are for illustrative
purposes only and do not represent or predict the tax-exempt yield of this
portfolio or any actual investment. Tax rates represent the three highest
federal tax rates as of 2007. Taxable Equivalents Yields do not take into
account the potential effects of capital gains taxes, state and/or local
taxes, or the federal alternative minimum tax.
Municipal securities are subject to risks including, but not limited to
risks associated with litigation, legislation, changes in taxation, or
other political events, local business or economic conditions, bankruptcy
of the issuer or other circumstances that could have a significant effect
on an issuer's ability to make payments of principal and/or interest. In
addition, changes in the financial condition of an individual municipal
insurer or conditions of the market in which the project was financed can
affect the overall municipal market. There is no guarantee that the Fund's
income will be exempt from federal or state income taxes.
A substantial portion of the municipal securities held by the PowerShares
Insured National Municipal Bond Fund 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.
"Merrill Lynch" and "Merrill Lynch National Insured Long-Term Core
Municipal Securities Index(SM)," "Merrill Lynch California Insured Long-Term
Core Municipal Securities Index(SM)," and "Merrill Lynch New York Insured
Long-Term Core Municipal Securities Index(SM)" are reprinted with
permission. © Copyright 2007 Merrill Lynch, Pierce, Fenner & Smith
Incorporated. All rights reserved. "Merrill Lynch" and "Merrill Lynch
National Insured Long-Term Core Municipal Securities Index(SM)," "Merrill
Lynch California Insured Long-Term Core Municipal Securities Index(SM)," and
"Merrill Lynch New York Insured Long-Term Core Municipal Securities
Index(SM)" are service marks of Merrill Lynch and have been licensed for
use for certain purposes by PowerShares Capital Management LLC. The
PowerShares Insured National Municipal Bond Portfolio, PowerShares Insured
California Municipal Bond Portfolio , and PowerShares Insured New York
Municipal Bond Portfolio are based on the Merrill Lynch National Insured
Long-Term Core Municipal Securities Index(SM), Merrill Lynch California
Insured Long-Term Core Municipal Securities Index(SM), and Merrill Lynch
New York Insured Long-Term Core Municipal Securities Index(SM), respectively,
and are not sponsored, endorsed, sold or promoted by Merrill Lynch. Merrill
Lynch, as Index Provider, makes no representation, express or implied,
regarding the advisability of investing in this product or the Index and
does not guarantee the quality, accuracy or completeness of the Index or
any Index related data included herein or derived there from and assumes no
liability in connection with their use. As the Index Provider, Merrill
Lynch is licensing certain trademarks, the underlying Index and trade names
which are composed by Merrill Lynch without regard to PowerShares, the
Issuer, this product or any investor.
PowerShares® and Leading the Intelligent ETF Revolution® are registered
marks of PowerShares Capital Management LLC. A I M Distributors, Inc. is
the distributor of the PowerShares Exchange-Traded Fund Trust and the
PowerShares Global Exchange-Traded Fund Trust. ALPS Distributors, Inc. is
the distributor of PowerShares QQQ. PowerShares QQQ is a unit investment
trust. PowerShares Capital Management LLC and A I M Distributors, Inc. are
not affiliated with ALPS Distributors, Inc.
Contact Information: Media Contacts: Kristin Sadlon Porter Novelli 212-601-8192 Bill Conboy 303-415-2290