-- PVI - PowerShares VRDO Tax-Free Weekly Portfolio
-- PGX - PowerShares Preferred Portfolio
-- PHB - PowerShares High Yield Corporate Bond Portfolio
PowerShares VRDO Tax-Free Weekly Portfolio will provide investors new
access to an area of fixed-income where large trading denominations had
previously created a barrier, said Bruce Bond, president and CEO of
PowerShares.
"High-quality VRDOs can provide attractive tax-exempt yields, but the
typical $100,000 trading increment precludes many investors from
participating in this asset class. The PowerShares VRDO Tax-Free Weekly
portfolio will truly open this market for investors," Bond said. "We also
believe the PowerShares Preferred and PowerShares High Yield Corporate Bond
Portfolios will provide investors better access to these types of fixed
income-securities, with the additional benefits from the ETF format."
Product information on PowerShares' three new fixed-income ETF portfolios
are as follows:
The PowerShares VRDO Tax-Free Weekly Portfolio (PVI) seeks to replicate the
Thomson Municipal Market Data VRDO Index. This index is designed to track
the performance of a pool of short-term, tax-exempt variable rate demand
obligations issued by municipalities in the United States. The rules-based
index is rebalanced quarterly, and excludes issues subject to alternative
minimum tax (AMT).
The PowerShares Preferred Portfolio seeks to replicate the Merrill Lynch
Fixed Rate Preferred Securities Index. This index is designed to replicate
the total return of a diversified group of high-quality preferred
securities. The rules-based index is rebalanced monthly and selects U.S.
dollar-dominated, investment-grade preferred securities, with fixed
dividend rates.
The PowerShares High Yield Corporate Bond Portfolio seeks to replicate the
Wachovia High Yield Bond Index. This index measures potential returns of
high-yield corporate bonds rated below investment grade by Moody's, S&P or
Fitch, issued by U.S. or foreign private issuers that are payable in U.S.
dollars. The index methodology evaluates securities quarterly using an
equal-weighting methodology, and requires the securities have a minimum of
five years to maturity, minimum par values and fixed interest rates.
PowerShares fixed-income ETFs provide investors the option to elect for
monthly income distribution.
PowerShares Capital Management LLC is leading the intelligent ETF
revolution through its family of over 100 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
approximately $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
There are risks involved with investing in ETFs including possible loss of
money. Shares are subject to risks similar to those of investing in any
fund of variable rate demand obligations, high yield bonds or preferred
securities, including credit, interest rate and general market risks, as
well as those risks related to short selling and margin maintenance.
Generally, the prices of income securities tend to fall as interest rates
rise. 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. Please see the
prospectus for more complete information regarding an investment in the
Funds.
Shares are not FDIC insured, and may lose value and have no bank guarantee.
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.
Municipal Market data, a unit of Thomson Financial services ("Thomson
Financial"), serves as index Provider for the Powershares VRDO Tax-Free
Weekly Portfolio and owns intellectual property rights in the Underlying
index. The Thomson Municipal Market data VRDO index is a trademark of
Thomson Financial and has been licensed for use by the Adviser. 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 Powershares VRDO Tax-Free Weekly
Portfolio is entitled to use the Underlying indices pursuant to a
sub-licensing agreement with the Adviser. The Thomson Municipal Market data
VRDO index is a trademark of Thomson Financial and has been licensed for
use for certain purposes by the Adviser. Powershares VRDO Tax-Free Weekly
Portfolio is not sponsored, endorsed, sold or promoted by Thomson
Financial. Thomson Financial makes no representation or warranty, express
or implied, to Fund investors or any member of the public regarding the
advisability of investing in securities generally or in the Fund
particularly or the ability of any data supplied by Thomson Financial to
track VRDO performance. Thomson Financial's only relationship to the
distributor, the Adviser or the Trust is the licensing of certain
trademarks and trade names of Thomson Financial and of the data supplied by
Thomson Financial that is determined, composed and calculated by Thomson
Financial without regard to the Fund or the shares. Thomson Financial has
no obligation to take the needs of the Fund into consideration when
determining, composing or calculating the data. Thomson Financial has no
obligation or liability in connection with the administration, marketing or
trading of the Fund.
There are special risks associated with investing in high yield bonds
including, but not limited to: high yield securities generally offer a
higher current yield than that available from higher grade issues, but
typically involve greater risk. Securities rated below investment grade are
commonly referred to as "junk bonds." The ability of issuers of high yield
securities to make timely payments of interest and principal may be
adversely impacted by adverse changes in general economic conditions,
changes in the financial condition of their issuers and price fluctuation
in response to changes in interest. Periods of economic downturn or rising
interest rates may cause the issuers of high yield securities to experience
financial distress, which could adversely impact their ability to make
timely payments of principal and interest and increase the possibility of
default. The market value and liquidity of high yield securities may be
negatively impacted by adverse publicity and investor perceptions, whether
or not based on fundamental analysis, especially in markets characterized
by a low volume of trading. Global bonds are subject to the same risks as
other debt issues, notably credit risk, market risk and liquidity risk. To
a limited extent, they may also subject to certain sovereign risks.
Generally, investments in the securities of non-U.S. issuers involve risks
beyond those associated with investments in U.S. securities. Please see the
prospectus for more complete risk information.
Wachovia and Wachovia Cap Markets (collectively, "Wachovia") serve as Index
Provider for the PowerShares High Yield Corporate Bond Portfolio and own
intellectual property rights in the underlying index. The Wachovia High
Yield Bond Index is a trademark of Wachovia and has been licensed for use
by the Adviser. The Fund is not sponsored, endorsed, sold or promoted by
Wachovia or its affiliates and Wachovia makes no representation regarding
the advisability of investing in the Fund. The PowerShares High Yield
Corporate Bond Portfolio is entitled to use its respective Underlying Index
pursuant to a sub-licensing agreement with the Adviser.
There are special risks associated with investing in preferred securities
including, but not limited to: provisions that permit the issuer, in its
discretion, to defer or omit distributions for a certain period of time; if
the Fund owns a security that is deferring or omitting its distributions,
the Fund may be required to report the distribution on its tax returns,
even though it may not have received this income; preferred securities may
lose substantial value due to the omission or deferment of dividend
payments; preferred securities may be less liquid than many other
securities, such as common stocks, and generally offer no voting rights
with respect to the issuer; preferred securities may also be subordinated
to bonds or other debt instruments in an issuer's capital structure,
subjecting them to a greater risk of non-payment than more senior
securities. In certain circumstances, an issuer of preferred securities may
redeem the securities prior to a specified date, and this may negatively
impact the return of the security. Investments in financial institutions
may be subject to certain risks, including, but not limited to, the risk of
regulatory actions, changes in interest rates and concentration of loan
portfolios in an industry or sector. Financial institutions are highly
regulated and may suffer setbacks should regulatory rules under which they
operate change. Likewise, there is a high level of competition among
financial institutions which could adversely affect the viability of an
institution. The Fund's investments in non-U.S. issuers, although limited
to Adrs, may involve unique risks compared to investing in securities of
U.S. issuers, including, among others, greater market volatility, the
availability of less reliable financial information, higher transactional
costs, taxation by foreign governments, decreased market liquidity and
political instability. Please see the prospectus for more complete risk
information.
"Merrill Lynch" and "Merrill Lynch Fixed Rate Preferred Securities
Index(SM)" are reprinted with permission. © Copyright 2007 Merrill Lynch,
Pierce, Fenner & Smith Incorporated. All rights reserved. "Merrill Lynch"
and "Merrill Lynch Fixed Rate Preferred 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 Preferred Portfolio
is based on the Merrill Lynch Fixed Rate Preferred Securities Index(SM),
and is 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 therefrom 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.
A I M Distributors, Inc. is the distributor of the PowerShares
Exchange-Traded Fund Trust II.
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 information in this prospectus is not complete and may be changed. The
portfolio may not sell its shares until the registration statement filed
with the Securities and Exchange Commission is effective. The prospectus is
not an offer to sell the portfolio shares, nor is the portfolio soliciting
an offer to buy its shares in any jurisdiction where the offer or sale is
not permitted.
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