As filed with
the Securities and Exchange Commission on July 1, 2008
No. 333-102228
No. 811-21265
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM N-1A
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REGISTRATION
STATEMENT
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UNDER
THE SECURITIES ACT OF 1933
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x
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Pre-Effective Amendment No.
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o
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Post-Effective Amendment
No. 196
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x
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and/or
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REGISTRATION
STATEMENT UNDER THE INVESTMENT COMPANY
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ACT OF
1940
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x
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(Check appropriate box or boxes)
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PowerShares Exchange-Traded Fund
Trust
(Exact Name of Registrant as Specified in Charter)
301 West Roosevelt Road
Wheaton, IL 60187
(Address of Principal Executive Office)
Registrants Telephone Number, including Area Code:
(800) 983-0903
H. Bruce Bond
301 West Roosevelt Road
Wheaton, IL 60187
(Name and Address of Agent for Service)
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With a copy to:
Stuart M. Strauss
Clifford Chance US LLP
31 West 52
nd
Street
New York, NY 10019
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APPROXIMATE
DATE OF PROPOSED PUBLIC OFFERING:
It is
proposed that this filing will become effective (check appropriate box)
x
immediately upon filing
pursuant to paragraph (b) of Rule 485.
o
on June 30, 2008
pursuant to paragraph (b) of Rule 485.
o
60 days after
filing pursuant to paragraph (a)(1) of Rule 485.
o
on [date] pursuant to
paragraph (a) of Rule 485.
o
75 days after
filing pursuant to paragraph (a)(2) of Rule 485.
o
on [date] pursuant to
paragraph (a) of Rule 485.
PowerShares Exchange-Traded Fund Trust
PowerShares Cleantech
TM
Portfolio PZD
PowerShares Exchange-Traded Fund Trust (the "Trust") is a registered investment company consisting of 75 separate exchange-traded index funds. Additional funds may be offered in the future. This Prospectus relates to the PowerShares Cleantech
TM
Portfolio (the "Fund").
The shares of the Fund (the "Shares") are listed on the American Stock Exchange ("AMEX") at market prices that may be different from their net asset value ("NAV"). The Fund issues and redeems Shares only in large blocks consisting of 100,000 Shares ("Creation Units"). Creation Units are issued and redeemed principally in-kind for securities included in a specified index.
Except when aggregated in Creation Units, the Shares are not redeemable securities of the Fund.
The Securities and Exchange Commission ("SEC") has not approved or disapproved these securities or passed upon the adequacy or accuracy of this Prospectus. Any representation to the contrary is a criminal offense.
Prospectus Dated June 30, 2008
NOT FDIC INSURED. MAY LOSE VALUE.
NO BANK GUARANTEE.
TABLE OF CONTENTS
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4
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Introduction PowerShares Exchange-Traded Fund Trust
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4
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Who Should Invest in the Fund
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4
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Tax Advantaged Product Structure
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5
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PowerShares Cleantech
TM
Portfolio
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14
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Additional Investment Strategies
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14
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Additional Risks
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15
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Portfolio Holdings
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16
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Management of the Fund
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18
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How to Buy and Sell Shares
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20
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Creations, Redemptions and Transaction Fees
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23
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Dividends, Distributions and Taxes
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25
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Distribution Plan
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26
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Net Asset Value
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27
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Fund Service Providers
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27
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Financial Highlights
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29
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Index Provider
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29
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Disclaimers
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31
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Premium/Discount Information
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32
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Total Return Information
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33
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Other Information
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3
INTRODUCTION POWERSHARES EXCHANGE-TRADED FUND TRUST
The Trust is an investment company consisting of 75 separate exchange-traded "index funds." The investment objective of the Fund is to replicate as closely as possible, before fees and expenses, the price and yield of a specified market index. This Prospectus relates to the PowerShares Cleantech
TM
Portfolio. Invesco PowerShares Capital Management LLC (the "Adviser") is the investment adviser for the Fund.
The Fund's Shares are listed and traded on the AMEX at market prices that may differ to some degree from the NAV of the Shares. Unlike conventional mutual funds, the Fund issues and redeems Shares on a continuous basis, at NAV, only in large specified blocks, each called a "Creation Unit." Creation Units are issued and redeemed principally in-kind for securities included in the Fund's underlying index. Except when aggregated in Creation Units, Shares are not redeemable securities of the Fund.
WHO SHOULD INVEST IN THE FUND
The Fund is designed for investors who seek a relatively low-cost approach for investing in a portfolio of equity securities of companies in a specified index. The Fund may be suitable for long-term investment in the market represented in the underlying index and may also be used as an asset allocation tool or as a speculative trading instrument.
TAX ADVANTAGED PRODUCT STRUCTURE
Unlike interests in conventional mutual funds, the Shares are traded throughout the day on a national securities exchange, whereas mutual fund interests are typically only bought and sold at closing NAVs. The Shares have been designed to be tradable in the secondary market on a national securities exchange on an intra-day basis, and to be created and redeemed principally in-kind in Creation Units at each day's next calculated NAV. These arrangements are designed to protect ongoing shareholders from adverse effects on the portfolio of the Fund that could arise from frequent cash creation and redemption transactions. In a conventional mutual fund, redemptions can have an adverse tax impact on taxable shareholders because of the mutual fund's need to sell portfolio securities to obtain cash to meet Fund redemptions. These sales may generate taxable gains for the shareholders of the mutual fund, whereas the shares' in-kind redemption mechanism generally will not lead to a tax event for the Fund or its ongoing shareholders.
The Fund may invest in derivatives, the use of which will generally result in the realization of short-term capital gains that will be classified as ordinary income for tax purposes when distributed to investors.
4
PowerShares Cleantech
TM
Portfolio
Ticker: PZD
Intraday NAV Ticker: PZD.IV
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CUSIP: 739535X278
Underlying Index: The Cleantech Index
TM
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(Ticker: CTIUS)
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Investment Objective, Strategies and Risks
Investment Objective
The Fund seeks investment results that correspond generally to the price and yield (before the Fund's fees and expenses) of an equity index called The Cleantech Index
TM
(the "Underlying Index").
Principal Investment Strategies
The Fund will normally invest at least 80% of its total assets in common stocks of cleantech companies. The Fund will normally invest at least 90% of its total assets in the securities that comprise the Underlying Index and American Depository Receipts ("ADRs") based on the stocks in the Underlying Index. The Fund anticipates that the majority of its investment will be in the securities that comprise the Underlying Index. The Adviser will seek to match the performance of the Underlying Index. The Cleantech Index
TM
is a modified equally weighted index currently comprised of stocks of publicly-traded cleantech companies and ADRs based on such stocks. Cleantech Indices LLC ("Cleantech" or the "Index Provider") considers a company to be a cleantech company if it derives at least 50% of its revenues or operating profits from cleantech businesses. Cleantech businesses are defined as those that provide knowledge-based products (or services) that add economic value by reducing cost and raising productivity and/or product performance,
while
reducing the consumption of resources and the negative impact on the environment and public health. The Underlying Index focuses on companies which are leaders in the innovation and commercial deployment of cleantech products across a broad range of industries including, but not limited to, alternative energy, energy efficiency and transmission, air and water purification, advanced materials, eco-friendly agriculture, transportation, manufacturing efficiency, recycling and pollution prevention. Securities comprising the Underlying Index will be selected by the Index Provider. As of June 30, 2008, it is anticipated that the Underlying Index will include the securities of approximately 75 companies with a market capitalization range of between $200 million and $100 billion and that the Underlying Index will allocate approximately 45% of its weight to companies domiciled in Canada, the Philippines, Singapore, China, Japan, India, France, Germany, Spain, Switzerland, Denmark, the United Kingdom, Norway, Finland, Austria, the Netherlands, Portugal, Hong Kong, Israel, and Belgium. In tracking the Underlying Index, it is anticipated that a significant portion of the securities in the Fund's portfolio will be small and medium capitalization securities. The 90% investment policy noted above is non-fundamental and requires 60 days' prior written notice to shareholders before it can be changed. The Fund's investment objective and 80% investment policy noted above are non-fundamental and require 60 days' prior written notice to shareholders before they can be changed.
5
The Fund, using an "indexing" investment approach, attempts to replicate, before 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; a figure of 1.00 would represent perfect correlation. The Fund generally will invest in the securities comprising the Underlying Index in proportion to their weightings in the Underlying Index. However, under various circumstances, it may not be possible or practicable to purchase all of those securities in those weightings. In those circumstances, the Fund may purchase a sample of securities in the Underlying Index. There may also be instances in which the Adviser may choose to overweight another security in the Underlying Index, purchase securities not in the Underlying Index which the Adviser believes are appropriate to substitute for certain securities in the Underlying Index or utilize various combinations of other available investment techniques, in seeking to track the Underlying Index. The Fund may sell securities that are represented in the Underlying Index in anticipation of their removal from the Underlying Index or purchase securities not represented in the Underlying Index in anticipation of their addition to the Underlying Index.
Index Construction
To be eligible to join the Underlying Index, companies must meet the following criteria:
1. Derive at least 50% of revenue or operating profits from cleantech businesses;
2. Maintain a 3-month average market capitalization of at least USD $200 million;
3. Maintain a 1-month average floated market capitalization of at least USD $150 million;
4. Maintain a listing on a stock exchange (stocks traded on the bulletin board or over-the-counter are excluded from the Underlying Index); and
5. Have a minimum average trading value of at least USD $200,000 per trading day for the trailing three-month period. Aggregated trading volume may be counted for securities that trade on multiple exchanges.
Securities that meet the selection criteria are then further screened by the Index Provider pursuant to a proprietary methodology. These screens include, but are not limited to, profitability, earnings growth and quality, business strategy, industry leadership and position, sector redundancy, intellectual property, impact on the environment, management quality, solvency, existing litigation and governance issues.
6
To Maintain Inclusion in the Underlying Index, as of the calculation date for each quarterly rebalance, companies must:
a) Have a ten-day average floated market capitalization of at least USD $150 million;
b) For U.S. domiciled companies, be quoted on a major stock exchange; and
c) Meet the proprietary screening criteria discussed above.
In general, the securities included in the Underlying Index are equally weighted within several bands based upon their market capitalization. Below a certain threshold, the bands are determined based upon floated market capitalization. In computing the Underlying Index, pursuant to its proprietary rules based methodology, the Index Provider will reduce the weightings of securities with lower market liquidity, securities of issuers that have yet to achieve positive annual earnings and securities of issuers that have had two or more years without profitability. In determining the weighting of securities in the Underlying Index, the Index Provider will consider several key variables, including: market capitalization, dollar-weighted trading volume and relative liquidity, floated capitalization, types of shares, current and past profitability, consensus analyst estimates of expected time to annual profitability and maximum Underlying Index weight constraints. Upon rebalancing, securities of issuers that have yet to achieve positive annual earnings may not, in the aggregate, account for more than 8% of the weight of the Underlying Index and no individual stock may account for more than 6% of the weight of the Underlying Index.
The Index Provider may at any time, and from time to time, change the number of components comprising the Underlying Index by adding or deleting one or more components, or replacing one or more issues contained in the Underlying Index with one or more substitute securities of its choice if, in the Index Provider's discretion, such addition, deletion or substitution is necessary or appropriate to maintain the quality and/or character of the industry groups to which the Underlying Index relates.
Index Methodology
Quarterly updates to the Underlying Index's composition typically take effect after the close of trading on the AMEX on the next to last business day of each calendar quarter month ("Rebalance Date"). The components and weights are determined and announced at the close of trading two days prior to the Rebalance Date.
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Principal Risks of Investing in the Fund
The following specific risk factors have been identified for the Fund. See also the section on Additional Risks for other risk factors.
Market Trading Risk
Risk is inherent in all investing. An investment in the Fund involves risks similar to those of investing in any fund of equity securities traded on an exchange. You should anticipate that the value of the Shares will decline, more or less, in correlation with any decline in value of the Underlying Index.
Market Risk
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 stock prices. Overall stock values could decline generally or could underperform other investments.
Foreign Investment Risk
Investments in the securities of non-U.S. issuers involve risks beyond those associated with investments in U.S. securities. These additional risks include greater market volatility, the availability of less reliable financial information, higher transactional costs, taxation by foreign governments, decreased market liquidity and political instability. As the Fund may invest in securities denominated in foreign currencies, changes in currency exchange rates may negatively impact the Fund's returns. The values of the currencies of the countries in which the Fund may invest may be subject to a high degree of fluctuation due to changes in interest rates, the effects of monetary policies issued by the United States, foreign governments, central banks or supranational entities, the imposition of currency controls or other national or global political or economic developments. Therefore, the Fund's exposure to foreign currencies may result in reduced returns to the Fund. Foreign issuers are often subject to less stringent requirements regarding accounting, auditing, financial reporting and record keeping than are U.S. securities, and therefore, not all material information regarding these issuers will be available. Securities exchanges or foreign governments may adopt rules or regulations that may negatively impact the Fund's ability to invest in foreign securities or may prevent the Fund from repatriating its investments. In addition, the Fund may not receive shareholder communications or be permitted to vote the securities that it holds, as the issuers may be under no legal obligation to distribute them.
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Non-Correlation Risk
The Fund's return may not match the return of the Underlying Index for a number of reasons. For example, the Fund incurs a number of operating expenses not applicable to the Underlying Index, and incurs costs in buying and selling securities, especially when rebalancing the Fund's securities holdings to reflect changes in the composition of the Underlying Index.
Due to legal and regulatory rules and limitations imposed by certain countries in which securities in the Underlying Index trade, the Fund may not be able to invest in all securities included in the Underlying Index. The Fund may exclude securities included in the Underlying Index that are traded in certain countries due to issues such as trading restrictions, cost or liquidity constraints. Since the Underlying Index is not subject to the diversification requirements to which the Fund must adhere, the Fund may be required to deviate its investments from the securities and relative weightings of the Underlying Index. The Fund may not invest in certain securities included in the Underlying Index due to liquidity constraints. Liquidity constraints may delay the Fund's purchase or sale of securities included in the Underlying Index. For tax efficiency purposes, the Fund may sell certain securities to realize losses, causing it to deviate from the Underlying Index.
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. If the Fund utilizes a sampling approach or futures or other derivative positions, its return may not correlate as well with the return on the Underlying Index, as would be the case if it purchased all of the stocks in the Underlying Index with the same weightings as the Underlying Index.
Replication Management Risk
Unlike many investment companies, the Fund is not "actively" managed. That is, the Fund does not utilize an investing strategy that seeks returns in excess of the Underlying Index. Therefore, it would not necessarily sell a stock because the stock's issuer was in financial trouble unless that stock is removed from the Underlying Index.
Cleantech Sector Risk
There are risks in investing in the cleantech sector, including the risks of focusing investments in the water, energy and environmental sectors. Adverse developments in the water sector may significantly affect the value of the Shares of the Fund. Companies involved in the water sector are subject to tax and price
9
fluctuations and competition. Securities of companies in the energy sector are subject to swift price and supply fluctuations caused by events relating to international politics, the success of project development and tax and other governmental regulatory policies. Weak demand for the companies' products or services or for energy products and services in general, as well as negative developments in these other areas, may adversely affect the Fund's performance.
Small and Medium Capitalization Company Risk
Investing in securities of small and medium capitalization companies involves greater risk than is customarily associated with investing in more established companies. These companies' stocks may be more volatile and less liquid than those of more established companies. These stocks may have returns that vary, sometimes significantly, from the overall stock market. Often small and medium capitalization companies and the industries in which they are focused are still evolving and this may make them more sensitive to changing market conditions.
Non-Diversified Fund Risk
In addition, the Fund is considered non-diversified and can invest a greater portion of assets in securities of individual issuers than a diversified fund. As a result, changes in the market value of a single investment could cause greater fluctuations in share price than would occur in a diversified fund.
Issuer-Specific Changes
The value of an individual security or particular type of security can be more volatile than the market as a whole and can perform differently from the value of the market as a whole. The value of securities of smaller issuers can be more volatile than that of larger issuers.
The Fund's Shares will change in value, and you could lose money by investing in the Fund. The Fund may not achieve its objective. An investment in the Fund is not a deposit with a bank and is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency.
Performance Information
The bar chart that follows shows how the Fund performed. The table below the bar chart shows the Fund's average annual returns (before and after taxes). The bar chart and table provide an indication of the risks of investing in the Fund by comparing the Fund's performance from year to year and by showing how the Fund's average annual returns for one year compared with broad measures of market performance. All returns assume reinvestment of dividends and
10
distributions. Of course, the Fund's past performance (before and after income taxes) is not necessarily indicative of how the Fund will perform in the future.
Best Quarter
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Worst Quarter
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15.24
% 2nd Quarter 2007
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3.94
% 1st Quarter 2007
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* The bar chart above includes only complete calendar years following inception. The best and worst quarters above include numbers from complete calendar years only.
Average Annual Total Returns for the Periods Ended December 31, 2007
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Past One Year
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Since Inception*
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PowerShares Cleantech
TM
Portfolio
(return before taxes)
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42.04
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%
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36.35
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%
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PowerShares Cleantech
TM
Portfolio
(return after taxes on distributions)
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42.04
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%
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36.35
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%
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PowerShares Cleantech
TM
Portfolio
(return after taxes on distributions and
sale of Fund Shares)
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27.33
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%
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31.02
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%
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NASDAQ Composite Index
(reflects no deduction for fees, expenses or taxes)
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10.59
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%
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11.14
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%
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S&P 500
®
Index
(reflects no deduction for fees, expenses or taxes)
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5.46
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%
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7.67
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%
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The Cleantech Index
TM
(reflects no deduction for fees, expenses or taxes)
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43.41
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%
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38.79
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%
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* The Fund commenced operations on October 24, 2006.
The Fund's investment objective, risks and expenses should also be considered when comparing investment returns. The index performance results are hypothetical. The NASDAQ Composite Index and S&P 500
®
Index are unmanaged indexes based on the average performance of 3,087 and 500 common stocks, respectively.
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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. Investment returns and principal value will fluctuate and shares, when redeemed, may be worth more or less than their original cost. The Fund's performance reflects fee waivers, absent which, performance would have been lower.
After-tax returns in the table above are calculated using the historical highest individual federal marginal income tax rates and do not reflect the impact of state and local taxes. Actual after-tax returns depend on an investor's tax situation and may differ from those shown, and after-tax returns shown are not relevant to investors who hold Shares through tax-deferred arrangements, such as 401(k) plans or individual retirement accounts.
What are the Costs of investing?
This table describes the fees and expenses that you may pay if you buy and hold Shares of the Fund.
Shareholder Transaction Expenses(1)(2)
(fees paid directly from your investments)
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None*
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Annual Fund Operating Expenses(2) (expenses that are deducted from the Fund's assets)
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Management Fees
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0.50
%
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Distribution and Service (12b-1) Fees
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%
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Other Expenses
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0.27
%
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Total Gross Annual Fund Operating Expenses
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0.77
%
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Fee Waivers and Expense Assumption(3)
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0.08
%
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Total Net Annual Fund Operating Expenses
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0.69%
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Example
This example is intended to help you compare the cost of investing in the Fund with the cost of investing in other funds. This example does not take into account brokerage commissions that you pay when purchasing or selling Shares of the Fund.
The example assumes that you invest $10,000 in the Fund for the time periods indicated and then sell all of your Shares at the end of those periods. The example also assumes that your investment has a 5% return each year and that the Fund's gross operating expenses remain the same. Although your actual costs may be higher or lower, your costs
, based on these assumptions, would be:
1 YEAR
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3 YEARS
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5 YEARS
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10 YEARS
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$
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73
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$
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241
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$
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423
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$
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949
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(1) When buying or selling Shares through a broker, you will incur customary brokerage commissions and charges.
(2) Expressed as a percentage of average net assets.
(3) Pursuant to an excess expense agreement with the Trust (the "Expense Agreement"), the Adviser has agreed to waive fees and/or pay Fund expenses to the extent necessary to prevent the operating expenses of the Fund (excluding interest expense, brokerage commissions, sub-licensing fees, offering costs and other trading expenses, taxes and extraordinary expenses) from exceeding 0.60% of average net assets per year, at least until August 30, 2009 (the "Expense Cap"). The offering costs excluded from the 0.60% expense cap are: (a) legal fees pertaining to the Fund's Shares offered for sale; (b) SEC and state registration fees; and (c) initial fees paid to be listed on an exchange. Expenses borne by the Adviser are subject to reimbursement by the Fund up to three years from the date the fee or expense was incurred, but no reimbursement payment will be made by the Fund if it would result in the Fund exceeding its Expense Cap.
* See "Creation Transaction Fees and Redemption Transaction Fees" below.
The cost under the one-year example reflects the Adviser's agreement with the Fund to waive fees and/or reimburse expenses to the level specified in the fee table. The costs under the three-, five- and ten-year examples do not reflect this agreement after the first year.
Creation Transaction Fees and Redemption Transaction Fees
The Fund issues and redeems Shares at NAV only in large blocks of 100,000 Shares (each block of 100,000 Shares called a "Creation Unit") or multiples thereof. As a practical matter, only broker-dealers or large institutional investors with creation and redemption agreements and called Authorized Participants ("APs") can purchase or redeem these Creation Units. APs that purchase of Creation Units at NAV must pay a standard creation transaction fee of $1,000 (the "Creation Transaction Fee") per transaction (regardless of the number of Creation Units involved). An AP who holds Creation Units and wishes to redeem at NAV would also pay a standard redemption transaction fee of $1,000 (the "Redemption Transaction Fee") for each redemption transaction (regardless of the number of Creation Units involved).* APs who hold Creation Units in inventory will also pay the Annual Fund Operating Expenses described in the table above. Assuming an investment in a Creation Unit of $2,500,000 and a 5% return each year, and assuming that the Fund's gross operating expenses remain the same, the total costs would be $19,302 , $61,172 , $106,660 and $238,323 if the Creation Unit is redeemed after one, three, five and ten years, respectively.
If a Creation Unit is purchased or redeemed by an AP outside the usual process through the National Securities Clearing Corporation (the "NSCC"), if any, or for cash, a variable fee of up to four times the standard Creation or Redemption Transaction Fee may be charged to the AP making the transaction.
The Creation Transaction Fee, Redemption Transaction Fee and variable fee are not expenses of the Fund and do not impact the Fund's expense ratio. The maximum Creation or Redemption Transaction Fee is $4,000.
* See "Creations, Redemptions and Transaction Fees" later in this Prospectus.
13
Additional Investment Strategies
The Fund will normally invest at least 90% of its total assets in the securities that comprise its Underlying Index and ADRs based on stocks in the Underlying Index. The Fund may invest its remaining assets in money market instruments, including repurchase agreements or other funds which invest exclusively in money market instruments (subject to applicable limitations under the 1940 Act, or exemptions therefrom), convertible securities, structured notes (notes on which the amount of principal repayment and interest payments are based on the movement of one or more specified factors, such as the movement of a particular stock or stock index and in swaps, options and futures contracts. Swaps, options, futures contracts, convertible securities and structured notes) may be used by the Fund in seeking performance that corresponds to its Underlying Index and in managing cash flows. The Fund will not invest in money market instruments as part of a temporary defensive strategy to protect against potential stock market declines. The Adviser anticipates that it may take approximately three business days (i.e., each day the NYSE is open) for additions and deletions to the Fund's Underlying Index to be reflected in the portfolio composition of the Fund.
The policies described herein, including the investment objective of the Fund, constitute non-fundamental policies that may be changed by the Board of Trustees without shareholder approval. Certain fundamental policies of the Fund are set forth in the Statement of Additional Information ("SAI") under "Investment Restrictions."
Borrowing Money
The Fund may borrow money from a bank up to a limit of 10% of the value of its assets, but only for temporary or emergency purposes.
Securities Lending
The Fund may lend its portfolio securities. In connection with such loans, the Fund receives liquid collateral equal to at least 102% of the value of the portfolio securities being lent. This collateral is marked to market on a daily basis.
Additional Risks
Trading Issues
Trading in Shares on the AMEX may be halted due to market conditions or for reasons that, in the view of the AMEX, makes trading in Shares inadvisable. In
14
addition, trading in Shares on the AMEX is subject to trading halts caused by extraordinary market volatility pursuant to the AMEX "circuit breaker" rules. There can be no assurance that the requirements of the AMEX necessary to maintain the listing of the Fund will continue to be met or will remain unchanged.
Fluctuation of Net Asset Value
The NAV of the Fund's Shares generally fluctuates with changes in the market value of the Fund's holdings. The market prices of the Shares will generally fluctuate in accordance with changes in NAV as well as the relative supply of and demand for the Shares on the AMEX. The Adviser cannot predict whether the Shares will trade below, at or above NAV. Price differences may be due, in large part, to the fact that supply and demand forces at work in the secondary trading market for the Shares will be closely related to, but not identical to, the same forces influencing the prices of the stocks of the Fund's Underlying Index trading individually or in the aggregate at any point in time. However, given that the Shares can be purchased and redeemed in Creation Units (unlike shares of closed-end funds, which frequently trade at appreciable discounts from, and sometimes at premiums to, their NAV), the Adviser believes that large discounts or premiums to the NAV of the Shares should not be sustained.
Securities Lending
Although the Fund will receive collateral in connection with all loans of its securities holdings, the Fund would be exposed to a risk of loss should a borrower default on its obligation to return the borrowed securities (e.g., the loaned securities may have appreciated beyond the value of the collateral held by the Fund). In addition, the Fund will bear the risk of loss of any cash collateral that it invests.
Portfolio Holdings
A description of the Trust's policies and procedures with respect to the disclosure of the Fund's portfolio holdings is available in the Fund's SAI.
15
Management of the Fund
Invesco PowerShares Capital Management LLC is a registered investment adviser with its offices at 301 West Roosevelt Road, Wheaton, Illinois 60187. Invesco PowerShares Capital Management LLC serves as the investment adviser to the Trust, the PowerShares India Exchange-Traded Fund Trust, the PowerShares Actively Managed Exchange-Traded Fund Trust and the PowerShares Exchange-Traded Fund Trust II, a family of exchange-traded funds with combined assets under management in excess of $14.4 billion as of May 31, 2008. The Trust is currently comprised of 75 exchange-traded funds.
Invesco PowerShares Capital Management LLC has overall responsibility as the Fund's investment adviser for the selection and ongoing monitoring of the Fund's investments, managing the Fund's business affairs and providing certain clerical, bookkeeping and other administrative services.
The Adviser uses a team of portfolio managers, investment strategists and other investment specialists. This team approach brings together many disciplines and leveraging the Adviser's resources.
John W. Southard Jr., CFA, MBA, oversees all research, portfolio management and trading operations of the Fund. In this capacity, Mr. Southard oversees a team of portfolio managers (with Mr. Southard, the "Portfolio Managers") who are responsible for the day-to-day management of the Fund. Travis Trampe, who reports to Mr. Southard, is the member of the portfolio management team who is currently primarily responsible for the Fund's day-to-day management. Mr. Trampe receives management assistance from Peter Hubbard, Jason Stoneberg and Rudolf Reitmann, who perform various functions related to portfolio management, including investing cash flows, coordinating with other team members to focus on certain asset classes, implementing investment strategy and researching and reviewing investment strategy. Each member of the portfolio management team has appropriate limitations on his authority for risk management and compliance purposes.
Portfolio Managers
John Southard is a Managing Director at the Adviser and has been with the Adviser since its inception in February 2003. Mr. Southard has managed the Fund since inception. Prior to his current position, he was a Senior Equity Analyst at Charles Schwab & Company from May 2001 to August 2002. Prior to this, Mr. Southard was a Vice President, Portfolio Manager and Equity Analyst at First Trust Portfolios LP (formerly, Nike Securities LP) from October 1992 to May 2001.
16
Peter Hubbard is a Vice President of Portfolio Management of the Adviser and has been one of the Portfolio Managers primarily responsible for the day-to-day management of the Fund since June 1, 2007. Mr. Hubbard was a Research Analyst for the Adviser from May 2005 to June 2007. Prior to joining the Adviser, Mr. Hubbard was employed by Ritchie Capital, a hedge fund operator, where he was a Research Analyst and Trader from September 2003 to May 2005, after receiving a bachelor of science degree in Business and Economics from Wheaton College.
Jason Stoneberg is a Portfolio Manager of the Adviser and has been one of the Portfolio Managers primarily responsible for the day-to-day management of the Fund since June 1, 2007. Mr. Stoneberg joined the Adviser as a Research Analyst in January 2006, after receiving a bachelor of science degree in Business and Economics from Wheaton College.
Rudolf Reitmann is the Vice President of Operations Management of the Adviser and has been one of the Portfolio Managers primarily responsible for the day-to-day management of the Fund since June 1, 2007. Mr. Reitmann has been the Vice President of Operations Management of the Adviser since October 2006. Prior to joining the Adviser, Mr. Reitmann worked as Assistant Vice President of ETF Services for The Bank of New York from July 1996 to September 2006.
Travis Trampe is a Portfolio Manager of the Adviser and has been one of the Portfolio Managers primarily responsible for the day-to-day management of the Fund since June 1, 2007. Mr. Trampe has been an employee of the Adviser since June 2007. Prior to joining the Adviser, Mr. Trampe was an Analyst for Principal Global Investors from December 1994 to September 2006 and Research Analyst for Quantitative Services Group LLC from October 2006 to May 2007.
The Fund's SAI provides additional information about the Portfolio Managers' compensation structure, other accounts managed by the Portfolio Managers and the Portfolio Managers' ownership of securities in the Trust.
The Adviser will receive fees from the Fund equal to 0.50% of the Fund's average daily net assets. Pursuant to the Expense Agreement with respect to the Fund, until at least August 30, 2009, the Adviser has agreed to waive fees and/or pay Fund expenses to the extent necessary to prevent the operating expenses of the Fund (excluding interest expense, brokerage commissions, offering costs, sub-licensing fees and other trading expenses, taxes and extraordinary expenses) from exceeding 0.60% of average daily net assets per year. The offering costs excluded from the 0.60% Expense Cap are: (a) legal fees pertaining to the Fund's
17
Shares offered for sale; (b) SEC and state registration fees; and (c) initial fees paid to be listed on an exchange. The Trust and the Adviser have also entered into the Expense Agreement, applicable to the Fund, in which the Adviser has agreed to waive its management fees and/or pay certain other operating expenses of the Fund in order to maintain the Expense Cap. Expenses borne by the Adviser are subject to reimbursement by the Fund up to three years from the date the fee or expense was incurred, but no reimbursement payment will be made by the Fund if it would result in the Fund exceeding its Expense Cap.
A discussion regarding the basis for the Board's approval of the Fund's Investment Advisory Agreement is available in the Fund's Semi-Annual Report to Shareholders for the fiscal year ended October 31, 2007.
The Fund is responsible for all of its expenses, including the investment advisory fees, costs of transfer agency, custody, fund administration, legal, audit and other services, interest, taxes, brokerage commissions and other expenses connected with executions of portfolio transactions, sub-licensing fees for use of the Underlying Indexes, any distribution fees or expenses, offering fees or expenses and extraordinary expenses.
How to Buy and Sell Shares
The Shares are issued or redeemed by the Fund at NAV per Share only in Creation Units. See "Creations, Redemptions and Transaction Fees."
Most investors will buy and sell Shares of the Fund in secondary market transactions through brokers. Shares of the Fund are listed for trading on the secondary market on the AMEX. Shares can be bought and sold throughout the trading day like other publicly traded shares. There is no minimum investment. Although Shares are generally purchased and sold in "round lots" of 100 Shares, brokerage firms typically permit investors to purchase or sell Shares in smaller "oddlots," at no per-share price differential. When buying or selling Shares through a broker, you will incur customary brokerage commissions and charges, and you may pay some or all of the spread between the bid and the offered price in the secondary market on each leg of a round trip (purchase and sale) transaction. The Shares of the Fund trade under the AMEX symbol "PZD."
Share prices are reported in dollars and cents per Share.
APs may acquire Shares directly from the Fund and shareholders may tender their Shares for redemption directly to the Fund through an AP, only in Creation
18
Units of 100,000 Shares, as discussed in the "Creations, Redemptions and Transaction Fees" section below.
Book Entry
Shares are held in book-entry form, which means that no stock certificates are issued. The Depository Trust Company ("DTC") or its nominee is the record owner of all outstanding Shares of the Fund and is recognized as the owner of all Shares for all purposes.
Investors owning Shares are beneficial owners as shown on the records of DTC or its participants. DTC serves as the securities depository for all Shares. Participants in DTC include securities brokers and dealers, banks, trust companies, clearing corporations and other institutions that directly or indirectly maintain a custodial relationship with DTC. As a beneficial owner of Shares, you are not entitled to receive physical delivery of stock certificates or to have Shares registered in your name, and you are not considered a registered owner of Shares. Therefore, to exercise any right as an owner of Shares, you must rely upon the procedures of DTC and its participants. These procedures are the same as those that apply to any other stocks that you hold in book entry or "street name" form.
Fund Share Trading Prices
The trading prices of Shares of the Fund on the AMEX may differ from the Fund's daily NAV and can be affected by market forces of supply and demand, economic conditions and other factors.
The AMEX disseminates the approximate value of Shares of the Fund every fifteen seconds. This approximate value should not be viewed as a "real-time" update of the NAV per Share of the Fund because the approximate value may not be calculated in the same manner as the NAV, which is computed once a day, generally at the end of the business day. The Fund is not involved in, or responsible for, the calculation or dissemination of the approximate value and the Fund does not make any warranty as to its accuracy.
Frequent Purchases and Redemptions of Fund Shares
The Trust's Board of Trustees has adopted a policy of not monitoring for frequent purchases and redemptions of Fund Shares ("market timing"). In establishing this policy, the Board evaluated the risks of market timing activities by the Trust's shareholders. The Board noted that the Fund's Shares can only be purchased and redeemed directly from the Fund in Creation Units by Authorized
19
Participants and that the vast majority of trading in the Fund's Shares occurs on the secondary market. Because the secondary market trades do not involve the Fund directly, it is unlikely those trades would cause many of the harmful effects of market timing, including dilution, disruption of portfolio management, increases in the Fund's trading costs and the realization of capital gains. In addition, the Board considered that because trades directly with the Fund are mainly effected in-kind (i.e., for securities), they do not cause any of the harmful effects (as previously noted) that may result from frequent cash trades. Moreover, the Fund imposes transaction fees on in-kind purchases and redemptions of Fund Shares to cover the custodial and other costs incurred by the Fund in effecting in-kind trades. These fees increase if an investor substitutes cash in part or in whole for securities, reflecting the fact that the Fund's trading costs increase in those circumstances. Given this structure, the Board determined that it is not necessary to adopt policies and procedures to detect and deter market timing of the Fund's Shares.
Creations, Redemptions and Transaction Fees
Creation Units
Investors such as market makers, large investors and institutions who wish to deal in Creation Units directly with the Fund must have entered into an authorized participant agreement with the Distributor (as defined below) and the transfer agent, or purchase through a dealer that has entered into such an agreement. Set forth below is a brief description of the procedures applicable to the purchase and redemption of Creation Units. For more detailed information, see "Creation and Redemption of Creation Unit Aggregations" in the SAI.
Purchase
In order to purchase Creation Units of the Fund, an AP must generally deposit a designated portfolio of equity securities constituting a substantial replication, or a representation, of the stocks included in the Fund's Underlying Index (the "Deposit Securities") and generally make a small cash payment referred to as the "Cash Component." The list of the names and the numbers of shares of the Deposit Securities is made available by the Fund's custodian through the facilities of the NSCC immediately prior to the opening of business each day of the AMEX. The Cash Component represents the difference between the NAV of a Creation Unit and the market value of the Deposit Securities.
20
Orders must be placed in proper form by or through either (i) a "Participating Party," i.e., a broker-dealer or other participant in the Clearing Process of the Continuous Net Settlement System of the NSCC (the "Clearing Process") or (ii) a participant of DTC ("DTC Participant") that has entered into an agreement with the Distributor and the transfer agent, with respect to purchases and redemptions of Creation Units. All orders must be placed for one or more whole Creation Units of Shares of the Fund and must be received by the Distributor in proper form no later than the close of regular trading on the NYSE (ordinarily 4:00 p.m., Eastern time) ("Closing Time") in order to receive that day's closing NAV per Share. In the case of custom orders, as further described in the SAI, the order must be received by the Distributor no later than 3:00 p.m., Eastern time. A custom order may be placed by an Authorized Participant in the event that the Trust permits or requires the substitution of an amount of cash to be added to the Cash Component to replace any Deposit Security which may not be available in sufficient quantity for delivery or which may not be eligible for trading by such Authorized Participant or the investor for which it is acting or any other relevant reason. See "Creation and Redemption of Creation Unit Aggregations" in the SAI.
A fixed creation transaction fee of $1,000 is applicable to each transaction regardless of the number of Creation Units purchased by an AP in the transaction. An additional charge of up to four times the Creation Transaction Fee may be imposed with respect to transactions effected by an AP outside of the Clearing Process (through a DTC Participant), if any, or to the extent that cash is used in lieu of securities to purchase Creation Units. See "Creation and Redemption of Creation Unit Aggregations" in the SAI. The price for each Creation Unit will equal the daily NAV per Share times the number of Shares in a Creation Unit plus the fees described above and, if applicable, any transfer taxes.
Shares of the Fund may be issued in advance of receipt of all Deposit Securities subject to various conditions, including a requirement to maintain on deposit with the Fund cash at least equal to 115% of the market value of the missing Deposit Securities. See "Creation and Redemption of Creation Unit Aggregations" in the SAI.
Legal Restrictions on Transactions in Certain Stocks
An AP subject to a legal restriction with respect to a particular stock required to be deposited in connection with the purchase of a Creation Unit may, at the Fund's discretion, be permitted to deposit an equivalent amount of cash in
21
substitution for any stock which would otherwise be included in the Deposit Securities applicable to the purchase of a Creation Unit. For more details, see "Creation and Redemption of Creation Unit Aggregations" in the SAI.
Redemption
The Fund's custodian makes available immediately prior to the opening of business each day of the AMEX, through the facilities of the NSCC, the list of the names and the numbers of shares of the Fund's portfolio securities that will be applicable that day to redemption requests in proper form ("Fund Securities"). Fund Securities received on redemption may not be identical to Deposit Securities which are applicable to purchases of Creation Units. Unless cash redemptions are available or specified for the Fund, the redemption proceeds consist of the Fund Securities, plus cash in an amount equal to the difference between the NAV of the Shares being redeemed as next determined after receipt by the transfer agent of a redemption request in proper form, and the value of the Fund Securities (the "Cash Redemption Amount"), less the applicable Redemption Transaction Fee and, if applicable, any transfer taxes. Should the Fund Securities have a value greater than the NAV of Shares being redeemed, a compensating cash payment to the Trust equal to the differential, plus the applicable Redemption Transaction Fee and, if applicable, any transfer taxes will be required to be arranged for by or on behalf of the redeeming shareholder. For more details, see "Creation and Redemption of Creation Unit Aggregations" in the SAI.
An order to redeem Creation Units of the Fund may only be effected by or through an Authorized Participant. An order to redeem must be placed for one or more whole Creation Units and must be received by the transfer agent in proper form no later than the close of regular trading on the NYSE (ordinarily 4:00 p.m., Eastern time) in order to receive that day's closing NAV per Share. In the case of custom orders, as further described in the SAI, the order must be received by the transfer agent no later than 3:00 p.m., Eastern time.
A fixed redemption transaction fee of $1,000 is applicable to each redemption transaction regardless of the number of Creation Units redeemed by an AP in the transaction. An additional charge of up to four times the Redemption Transaction Fee may be charged to approximate additional expenses incurred by the Trust with respect to redemptions effected by an AP outside of the Clearing Process, if any, or to the extent that redemptions are for cash. The Fund reserves the right to effect redemptions in cash. A shareholder may request a cash redemption in lieu of securities, however, the Fund may, in its discretion, reject
22
Dividends, Distributions and Taxes
any such request. See "Creation and Redemption of Creation Unit Aggregations" in the SAI.
Ordinarily, dividends from net investment income, if any, are declared and paid quarterly. The Fund distributes its net realized capital gains, if any, to shareholders annually.
Distributions in cash may be reinvested automatically in additional whole Shares only if the broker through whom you purchased Shares makes such option available.
Taxes
As with any investment, you should consider how your investment in Shares will be taxed. The tax information in this Prospectus is provided as general information. You should consult your own tax professional about the tax consequences of an investment in Shares.
Unless your investment in Shares is made through a tax-exempt entity or tax-deferred retirement account, such as an IRA plan, you need to be aware of the possible tax consequences when:
Your Fund makes distributions,
You sell your Shares listed on the AMEX, and
You purchase or redeem Creation Units through an AP.
Taxes on Distributions
Ordinarily, dividends from net investment income, if any, are declared and paid quarterly. The Fund may also pay a special distribution at the end of the calendar year to comply with federal tax requirements. In general, your distributions are subject to federal income tax when they are paid, whether you take them in cash or reinvest them in the Fund. Dividends paid out of the Fund's income and net short-term gains, if any, are taxable as ordinary income. Distributions of net long-term capital gains, if any, in excess of net short-term capital losses are taxable as long-term capital gains, regardless of how long you have held the Shares.
Long-term capital gains of non-corporate taxpayers are generally taxed at a maximum rate of 15% for taxable years beginning before January 1, 2011. In addition, for these taxable years, some ordinary dividends declared and paid by the Fund to non-corporate shareholders may qualify for taxation at the lower
23
reduced tax rates applicable to long-term capital gains, provided that holding period and other requirements are met by the Fund and the shareholder. Without future congressional action, the maximum rate of long-term capital gains will return to 20% in 2011, and all dividends will be taxed at ordinary income rates.
Distributions in excess of the Fund's current and accumulated earnings and profits are treated as a tax-free return of capital to the extent of your basis in the Shares, and as capital gain thereafter. A distribution will reduce the Fund's NAV per Share and may be taxable to you as ordinary income or capital gain even though, from an investment standpoint, the distribution may constitute a return of capital.
By law, the Fund must withhold a percentage of your distributions and proceeds if you have not provided a taxpayer identification number or social security number.
Foreign Income Taxes
The Fund intends to elect to pass its credits for foreign income taxes through to its shareholders for a taxable year if more than 50% of its assets at the close of the year, by value, consists of stock and securities of foreign corporations. If the Fund makes this election, each shareholder will be treated as having paid a proportionate share of the Fund's foreign income taxes, but the shareholder must include an equal amount in gross income. See the SAI section "Taxes."
Taxes on Exchange-Listed Share Sales
Currently, any capital gain or loss realized upon a sale of Shares is generally treated as long-term capital gain or loss if the Shares have been held by an investor for more than one year and as short-term capital gain or loss if the Shares have been held by an investor for one year or less. The ability to deduct capital losses may be limited.
Taxes on Purchase and Redemption of Creation Units
An AP who exchanges equity securities for Creation Units generally will recognize a gain or a loss. The gain or loss will be equal to the difference between the market value of the Creation Units at the time and the exchanger's aggregate basis in the securities surrendered and the Cash Component paid. A person who exchanges Creation Units for equity securities will generally recognize a gain or loss equal to the difference between the exchanger's basis in the Creation Units and the aggregate market value of the securities received and the Cash Redemption Amount. The Internal Revenue Service, however, may
24
assert that a loss realized upon an exchange of securities for Creation Units cannot be deducted currently under the rules governing "wash sales," or on the basis that there has been no significant change in economic position. Persons exchanging securities should consult their own tax advisor with respect to whether wash sale rules apply and when a loss might be deductible.
Under current federal tax laws, any capital gain or loss realized upon redemption of Creation Units is generally treated as long-term capital gain or loss if the Shares have been held for more than one year and as a short-term capital gain or loss if the Shares have been held for one year or less.
If you purchase or redeem Creation Units through on AP, you will be sent a confirmation statement showing how many Shares you purchased or sold and at what price.
The foregoing discussion summarizes some of the possible consequences under current federal tax law of an investment in the Fund. It is not a substitute for personal tax advice. You may also be subject to state and local tax on Fund distributions and sales of Fund Shares. Consult your personal tax advisor about the potential tax consequences of an investment in Fund Shares under all applicable tax laws. For more information, please see the SAI section "Taxes."
Distribution Plan
Invesco Aim Distributors, Inc. serves as the distributor (the "Distributor") of Creation Units for the Fund on an agency basis. The Distributor does not maintain a secondary market in Shares.
The Board of Trustees of the Trust has adopted a Distribution and Service Plan pursuant to Rule 12b-1 under the 1940 Act. In accordance with its Rule 12b-1 plan, the Fund is authorized to pay an amount up to 0.25% of its average daily net assets each year for certain distribution-related activities. No 12b-1 fees are currently paid by the Fund, and there are no plans to impose these fees. However, in the event 12b-1 fees are charged in the future, because these fees are paid out of the Fund's assets, over time these fees will increase the cost of your investment and may cost you more than certain other types of sales charges.
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Net Asset Value
The Bank of New York ("BONY") calculates the Fund's NAV at the close of regular trading (normally 4:00 p.m., Eastern time) every day the NYSE is open. NAV is calculated by deducting all of the Fund's liabilities from the total value of its assets and dividing the result by the number of Shares outstanding, rounding to the nearest cent. All valuations are subject to review by the Trust's Board of Trustees or its delegate.
In determining NAV, expenses are accrued and applied daily and securities and other assets for which market quotations are available are valued at market value. Stocks and other equity securities are valued at the last sales price that day based on the official closing price of the exchange where the security is primarily traded. The NAV for the Fund will be calculated and disseminated daily.
The AMEX will disseminate every 15 seconds throughout the trading day through the facilities of the Consolidated Tape Association the approximate value of Shares of the Fund, an amount representing on a per share basis the sum of the current value of the Deposit Securities based on their then current market price and the estimated Cash Component. As the respective international local markets close, the market value of the Deposit Securities will continue to be updated for foreign exchange rates for the remainder of the U.S. trading day at the prescribed 15 second interval. The value of the Underlying Index will not be calculated and disseminated intra day. The value and return of the Underlying Index is calculated once each trading day by the Index Provider based on prices received from the respective international local markets.
The value of the Fund's portfolio securities is based on the securities' closing price on local markets when available. If a security's market price is not readily available or does not otherwise accurately reflect the fair value of the security, the security will be valued by another method that the Adviser believes will better reflect fair value in accordance with the Trust's valuation policies and procedures approved by the Board of Trustees. Money market securities maturing in 60 days or less will be valued at amortized cost. The Fund may use fair value pricing in a variety of circumstances, including but not limited to, situations when the value of a security in the Fund's portfolio has been materially affected by events occurring after the close of the market on which the security is principally traded (such as a corporate action or other news that may materially affect the price of a security) or trading in a security has been suspended or halted. Fair value pricing involves subjective judgments and it is possible that a fair value determination for a security is materially different than the value that could be realized upon the sale of the security. In addition, fair
26
value pricing could result in a difference between the prices used to calculate the Fund's NAV and the prices used by the Fund's Underlying Index. This may adversely affect the Fund's ability to track its Underlying Index. With respect to securities that are primarily listed on foreign exchanges, the value of the Fund's portfolio securities may change on days when you will not be able to purchase or sell your Shares.
Fund Service Providers
BONY, 101 Barclay Street, New York, New York 10286, is the administrator, custodian and fund accounting and transfer agent for the Fund. Clifford Chance US LLP, 31 West 52nd Street, New York, New York 10019, serves as legal counsel to the Fund.
PricewaterhouseCoopers LLP, 300 Madison Avenue, New York, New York 10017, serves as the Fund's independent registered public accounting firm. The independent registered public accounting firm is responsible for auditing the annual financial statements of the Fund.
Financial Highlights
The financial highlights table is intended to help you understand the Fund's financial performance since its inception. Certain information reflects financial results for a single Fund share. The total returns in the table represent the rate that an investor would have earned (or lost) on an investment in the Fund (assuming reinvestment of all dividends and distributions). The information for the year ended April 30, 2008 has been derived from the Fund's financial statements which have been audited by PricewaterhouseCoopers LLP, whose report, along with the Fund's financial statements, are included in the Fund's Annual Report, which is attached to the Statement of Additional Information as Appendix B.
27
PowerShares Cleantech
TM
Portfolio
FINANCIAL HIGHLIGHTS
|
|
Year Ended
April 30, 2008
|
|
For the Period
October 24, 2006*
Through
April 30, 2007
|
|
PER SHARE OPERATING
PERFORMANCE:
|
|
|
|
|
|
Net asset value at
beginning of period
|
|
$
|
27.08
|
|
|
$
|
24.70
|
|
|
Net investment loss**
|
|
|
(0.10
|
)
|
|
|
(0.04
|
)
|
|
Net realized and unrealized
gain on investments
|
|
|
6.65
|
|
|
|
2.42
|
|
|
Total from operations
|
|
|
6.55
|
|
|
|
2.38
|
|
|
Net asset value at end of period
|
|
$
|
33.63
|
|
|
$
|
27.08
|
|
|
TOTAL RETURN***
|
|
|
24.19
|
%
|
|
|
9.64
|
%
|
|
RATIOS/SUPPLEMENTAL DATA:
|
|
Net assets at end of period
(000
's omitted)
|
|
$
|
114,336
|
|
|
$
|
21,663
|
|
|
Ratio to average net assets of:
|
|
Expenses, after Waivers
and/or Recapture
|
|
|
0.69
|
%
|
|
|
0.71
|
%
|
|
Expenses, prior to Waivers
and/or Recapture
|
|
|
0.77
|
%
|
|
|
1.06
|
%
|
|
Net investment loss, after Waivers
and/or Recapture
|
|
|
(0.31
|
)%
|
|
|
(0.29
|
)%
|
|
Portfolio turnover rate
|
|
|
23
|
%
|
|
|
22
|
%
|
|
Undistributed net investment income
(loss) included in price of units
issued and redeemed**#
|
|
$
|
(0.09
|
)
|
|
$
|
0.01
|
|
|
* Commencement of Investment Operations.
** Based on average shares outstanding.
*** Total investment return is calculated assuming an initial investment made at the net asset value at the beginning of the period, reinvestment of all dividends and distributions at net asset value during the period and redemption on the last day of the period. Total investment return calculated for a period of less than one year is not annualized.
Annualized.
Portfolio turnover is not annualized and does not include securities received or delivered from processing creations or redemptions.
# The per share amount of equalization is presented to show the impact of equalization on distributable earnings per share. In prior periods, this amount has been included in the "Per Share Operating Performance" below the "Total from operations," with an offsetting amount included in "Net realized and unrealized gain (loss) on investments." The Fund's use of equalization does not affect net asset value per share, total return or the ratio of average net assets and the presentation has been revised accordingly.
The historical performance of the Underlying Index and the Fund reflect the performance of the Fund prior to the inclusion of global securities in the Underlying Index. Effective June 30, 2008, the Underlying Index will include global securities. Therefore, the performance history above does not reflect how the Underlying Index and the Fund would have performed after the inclusion of global securities.
28
Index Provider
Cleantech is the Index Provider for the PowerShares Cleantech
TM
Portfolio. There is no relationship between Cleantech Indices LLC and the Distributor, the Adviser or the Trust other than a license by Cleantech to the Adviser of certain Cleantech trademarks and trade names, and The Cleantech Index
TM
, for use by the Distributor, the Adviser and the Trust. Such trademarks, tradenames and The Cleantech Index
TM
have been created and developed by Cleantech without regard to the Distributor, the Adviser, the Trust, their businesses, the Fund and/or any prospective investor.
Disclaimers
The PowerShares Cleantech
TM
Portfolio's Underlying Index is The Cleantech Index
TM
. The Cleantech Index
TM
is a trademark of Cleantech and has been licensed for use for certain purposes by the Adviser. The Fund is not sponsored, endorsed, sold, promoted or managed in any way by Cleantech and Cleantech makes no representation regarding the advisability of investing in Shares of the Fund.
Cleantech makes no representation or warranty, express or implied, to the owners of Fund Shares or any member of the public regarding the advisability of investing in securities generally or in Shares particularly. Cleantech's only relationship to the Distributor, the Adviser or the Trust is the licensing of certain Cleantech trademarks and trade names of Cleantech and The Cleantech Index
TM
, which are composed by Cleantech without regard to the Distributor, the Adviser or the Trust.
The Underlying Index is selected and calculated without regard to the Distributor, the Adviser, the Trust or any holders of Shares. Cleantech has no obligation to take the needs of the Distributor, the Adviser, the Trust or the owners of Shares into consideration in determining, composing or calculating the Underlying Index. Cleantech is not responsible for and has not participated in the determination of the prices and amount of Shares or the timing of the issuance or sale of Shares or in the determination of any financial calculations relating thereto. Cleantech has no obligation or liability in connection with the administration of the Trust, or marketing of the Shares. Cleantech does not guarantee the accuracy and/or the completeness of the Underlying Index or any data included therein, and Cleantech shall have no liability for any errors, omissions, or interruptions therein. Cleantech makes no warranty, express or implied, as to results to be obtained by the Distributor, the Adviser, the Trust or owners of Shares, or any other person or entity, from the use of the Underlying Index or any data included therein. Cleantech makes no express or implied
29
warranties, and expressly disclaims all warranties of merchantability or fitness for a particular purpose or use with respect to the Indices or any data included therein, the Fund, the Trust or the Shares. Without limiting any of the foregoing, in no event shall Cleantech have any liability for any special, punitive, indirect, or consequential damages (including lost profits) resulting from the use of the Underlying Index or any data included therein, the Fund, the Trust or the Shares, even if notified of the possibility of such damages. The Adviser does not guarantee the accuracy and/or the completeness of the Underlying Index or any data included therein, and the Adviser shall have no liability for any errors, omissions, or interruptions therein. The Adviser makes no warranty, express or implied, as to results to be obtained by the Fund, owners of the Shares of the Fund or any other person or entity from the use of the Underlying Index or any data included therein. The Adviser makes no express or implied warranties, and expressly disclaims all warranties of merchantability or fitness for a particular purpose or use with respect to the Underlying Index or any data included therein. Without limiting any of the foregoing, in no event shall the Adviser have any liability for any special, punitive, direct, indirect or consequential damages (including lost profits) arising out of matters relating to the use of the Underlying Index even if notified of the possibility of such damages.
The Adviser does not guarantee the accuracy and/or the completeness of the Underlying Index or any data included therein, and the Adviser shall have no liability for any crrors, omissions, or interruptions therein. The Adviser makes no warranty, express or implied, as to results to be obtained by the Fund, owners of the Shares of the Fund or any other person or entity from the use of the Underlying Index or any data included therein. The Adviser makes no express or implied warranties, and expressly disclaims all warranties of merchantability, title or fitness for a particular purpose or use with respect to the Underlying Index or any data included therein. Without limiting any of the foregoing, in no event shall the Adviser have any liability for any special, exemplary, punitive, direct, indirect or consequential damages (including lost profits), however caused and on any theory of liability, whether in contract, strict liability or tort (including negligence or otherwise), resulting from the use of the Underlying Index or any data included therein, even if notified of the possibility of such damages.
30
Premium/Discount Information
The table that follows presents information about the differences between the daily market price on secondary markets for Shares and the NAV of the Fund. NAV is the price per share at which the Fund issues and redeems Shares. It is calculated in accordance with the standard formula for valuing mutual fund shares. The "Market Price" of the Fund generally is determined using the midpoint between the highest bid and the lowest offer on the exchange on which the Fund is listed for trading, as of the time the Fund's NAV is calculated. The Fund's Market Price may be at, above or below its NAV. The NAV of the Fund will fluctuate with changes in the market value of its portfolio holdings. The Market Price of the Fund will fluctuate in accordance with changes in its NAV, as well as market supply and demand.
Premiums or discounts are the differences (generally expressed as a percentage) between the NAV and Market Price of the Fund on a given day, generally at the time NAV is calculated. A premium is the amount that the Fund is trading above the reported NAV, expressed as a percentage of the NAV. A discount is the amount that the Fund is trading below the reported NAV, expressed as a percentage of the NAV.
The following information shows the frequency of distributions of premiums and discounts for the Fund. The information shown for the Fund is for each of the last four completed quarters.
Each line in the table shows the number of trading days in which the Fund traded within the premium/discount range indicated. The number of trading days in each premium/discount range is also shown as a percentage of the total number of trading days in the period covered by the table. All data presented here represents past performance, which cannot be used to predict future results.
31
PowerShares Cleantech
TM
Portfolio
Premium/
Discount Range
|
|
Number
of Days/
Percentage
of Total Days
(Quarter
Ended
3/31/08)
|
|
Number
of Days/
Percentage
of Total Days
(Quarter
Ended
12/31/07)
|
|
Number
of Days/
Percentage
of Total Days
(Quarter
Ended
9/30/07)
|
|
Number
of Days/
Percentage
of Total Days
(Quarter
Ended
6/30/07)
|
|
Greater than 0.5%
|
|
|
0
|
%
|
|
|
0
|
%
|
|
|
3
|
%
|
|
|
10
|
%
|
|
Between 0.25% and 0.5%
|
|
|
0
|
%
|
|
|
6
|
%
|
|
|
9
|
%
|
|
|
0
|
%
|
|
Between 0.0% and 0.25%
|
|
|
43
|
%
|
|
|
51
|
%
|
|
|
29
|
%
|
|
|
24
|
%
|
|
Between -0.25% and 0.0%
|
|
|
57
|
%
|
|
|
41
|
%
|
|
|
57
|
%
|
|
|
66
|
%
|
|
Between -0.25% and -0.5%
|
|
|
0
|
%
|
|
|
2
|
%
|
|
|
2
|
%
|
|
|
0
|
%
|
|
Greater than -0.5%
|
|
|
0
|
%
|
|
|
0
|
%
|
|
|
0
|
%
|
|
|
0
|
%
|
|
Total
|
|
|
100
|
%
|
|
|
100
|
%
|
|
|
100
|
%
|
|
|
100
|
%
|
|
Total Return Information
The table below presents information about the total return of the Underlying Index in comparison to the total return of the Fund. The information presented is for the fiscal year ended April 30, 2008.
"Average annual total returns" represent the average annual change in value of an investment over the period indicated. "Cumulative total returns" represent the total change in value of an investment over the period indicated. The Fund's per Share NAV is the value of one Share of the Fund as calculated in accordance with the standard formula for valuing mutual fund shares. The NAV return is based on the NAV of the Fund, and the market return is based on the market price per Share of the Fund. The price used to calculate market return ("Market Price") is determined by using the midpoint between the highest bid and the lowest offer on the exchange on which the Fund is listed for trading, as of the time that the Fund's NAV is calculated. Since the Fund's Shares typically do not trade in the secondary market until several days after the Fund's inception, for the period from inception to the first day of secondary market trading in Fund shares, the NAV of the Fund is used as a proxy for secondary market trading price to calculate market returns. Market and NAV returns assume that dividends and capital gain distributions have been reinvested in the Fund at Market Price and NAV, respectively. An index is a statistical composite that tracks a specified financial market or sector. Unlike the Fund, an index does not actually hold a portfolio of securities and therefore does not incur the expenses incurred by the Fund. These expenses negatively impact the performance of the
32
Fund. Also, market returns do not include brokerage commissions that may be payable on secondary market transactions. If brokerage commissions were included, market returns would be lower. The returns shown in the table below do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption or sale of Shares of the PowerShares Cleantech
TM
Portfolio. The investment return and principal value of Shares of the Fund will vary with changes in market conditions. Shares of the Fund may be worth more or less than their original cost when they are redeemed or sold in the market. The Fund's past performance is no guarantee of future results.
|
|
Average Annual
Total Returns Since
Inception through
April 30, 2008
|
|
Cumulative Annual
Total Returns Since
Inception through
April 30, 2008
|
|
PowerShares Cleantech
TM
Portfolio (At NAV)
|
|
|
22.59
|
%
|
|
|
36.15
|
%
|
|
PowerShares Cleantech
TM
Portfolio (At Market)
|
|
|
22.57
|
%
|
|
|
36.11
|
%
|
|
The Cleantech Index
TM
|
|
|
21.97
|
%
|
|
|
36.84
|
%
|
|
S&P 500
®
Index
|
|
|
2.35
|
%
|
|
|
3.58
|
%
|
|
NASDAQ Composite Index
|
|
|
2.70
|
%
|
|
|
4.13
|
%
|
|
Other Information
Section 12(d)(1) of the 1940 Act restricts investments by investment companies in the securities of other investment companies, including shares of the Fund. Registered investment companies are permitted to invest in the Fund beyond the limits set forth in Section 12(d)(1) subject to certain terms and conditions set forth in an SEC exemptive order issued to the Trust, including that such investment companies enter into an agreement with the Fund.
Continuous Offering
The method by which Creation Unit Aggregations of Fund Shares are created and traded may raise certain issues under applicable securities laws. Because new Creation Unit Aggregations of Shares are issued and sold by the Fund on an ongoing basis, a "distribution," as such term is used in the Securities Act of 1933, as amended (the "Securities Act"), may occur at any point. Broker-dealers and other persons are cautioned that some activities on their part may, depending on the circumstances, result in their being deemed participants in a distribution in a manner which could render them statutory underwriters and subject them to the prospectus-delivery requirement and liability provisions of the Securities Act.
For example, a broker-dealer firm or its client may be deemed a statutory underwriter if it takes Creation Unit Aggregations after placing an order with the
33
Distributor, breaks them down into constituent Shares and sells such Shares directly to customers, or if it chooses to couple the creation of a supply of new Shares with an active selling effort involving solicitation of secondary market demand for Shares. A determination of whether one is an underwriter for purposes of the Securities Act must take into account all the facts and circumstances pertaining to the activities of the broker-dealer or its client in the particular case, and the examples mentioned above should not be considered a complete description of all the activities that could lead to a characterization as an underwriter.
Broker-dealer firms should also note that dealers who are not "underwriters" but are effecting transactions in Shares, whether or not participating in the distribution of Shares, are generally required to deliver a prospectus. This is because the prospectus delivery exemption in Section 4(3) of the Securities Act is not available with respect to such transactions as a result of Section 24(d) of the 1940 Act. As a result, broker-dealer firms should note that dealers who are not underwriters but are participating in a distribution (as contrasted with ordinary secondary market transactions) and thus dealing with the Shares that are part of an overallotment within the meaning of Section 4(3)(a) of the Securities Act would be unable to take advantage of the prospectus delivery exemption provided by Section 4(3) of the Securities Act. The Trust, however, has received from the SEC an exemption from the prospectus delivery obligation in ordinary secondary market transactions under certain circumstances, on the condition that purchasers are provided with a product description of the Shares. Firms that incur a prospectus delivery obligation with respect to Shares are reminded that, under the Securities Act Rule 153, a prospectus delivery obligation under Section 5(b)(2) of the Securities Act owed to an exchange member in connection with a sale on the AMEX is satisfied by the fact that the prospectus is available at the AMEX upon request. The prospectus delivery mechanism provided in Rule 153 is only available with respect to transactions on an exchange.
34
For More Information
For more detailed information on the Trust, the Fund and the Shares, you may request a copy of the Fund's SAI. The SAI provides detailed information about the Fund, and is incorporated by reference into this Prospectus. This means that the SAI, for legal purposes, is a part of this Prospectus. Additional information about the Fund's investments is also available in the Fund's Annual and Semi-Annual Reports to Shareholders. In the Fund's Annual Report, you will find a discussion of the market conditions and investment strategies that significantly affected the Fund's performance during the last fiscal year. If you have questions about the Fund or Shares or you wish to obtain the SAI, Annual Report or Semi-Annual Report free of charge, or to make shareholder inquiries, please:
Call: Invesco Aim Distributors, Inc. at 1-800-337-4246
Monday through Friday
8:00 a.m. to 5:00 p.m. Central Time
Write: PowerShares Exchange-Traded Fund Trust
c/o Invesco Aim Distributors, Inc.
11 Greenway Plaza, Suite 100
Houston, Texas 77046 - 1173
Visit: www.InvescoPowerShares.com
Information about the Fund (including the SAI) can be reviewed and copied at the SEC's Public Reference Room in Washington, D.C., and information on the operation of the Public Reference Room may be obtained by calling the SEC at 1-202-942-8090. Reports and other information about the Fund are available on the EDGAR Database on the SEC's Internet site at www.sec.gov, and copies of this information may be obtained, after paying a duplicating fee, by electronic request at the following e-mail address:
publicinfo@sec.gov
or by writing the SEC's Public Reference Section, Washington, D.C. 20549-0102.
No person is authorized to give any information or to make any representations about the Fund and its Shares not contained in this Prospectus and you should not rely on any other information. Read and keep the Prospectus for future reference.
Dealers effecting transactions in the Fund's Shares, whether or not participating in this distribution, are generally required to deliver a Prospectus. This is in addition to any obligation of dealers to deliver a Prospectus when acting as underwriters.
The Trust's registration number under the 1940 Act is 811-21265.
35
PowerShares Exchange-Traded Fund Trust
301 West Roosevelt Road
Wheaton, IL 60187
800.983.0903
www.InvescoPowerShares.com
P-PZD-PRO-1
Investment Company Act File No. 811-21265
PowerShares Exchange-Traded Fund Trust
STATEMENT OF ADDITIONAL INFORMATION
Dated June 30, 2008
This Statement of Additional Information is not a prospectus. It should be read in conjunction with the Prospectus dated June 30, 2008 for the PowerShares Cleantech
TM
Portfolio, a series of the PowerShares Exchange-Traded Fund Trust (the "Trust"), as it may be revised from time to time. Capitalized terms used herein that are not defined have the same meaning as in the Prospectus, unless otherwise noted. A copy of any Prospectus may be obtained without charge by writing to the Trust's Distributor, Invesco Aim Distributors Inc., 11 Greenway Plaza, Suite 100, Houston, Texas 77046-1173, or by calling toll free (800) 843-2639.
TABLE OF CONTENTS
|
|
Page
|
|
General Description of the Trust and the Fund
|
|
|
1
|
|
|
|
Exchange Listing and Trading
|
|
|
1
|
|
|
|
Investment Restrictions and Policies
|
|
|
1
|
|
|
|
Investment Policies and Risks
|
|
|
3
|
|
|
|
General Considerations and Risks
|
|
|
6
|
|
|
|
Management
|
|
|
8
|
|
|
|
Brokerage Transactions
|
|
|
16
|
|
|
|
Additional Information Concerning the Trust
|
|
|
16
|
|
|
|
Creation and Redemption of Creation Unit Aggregations
|
|
|
20
|
|
|
|
Taxes
|
|
|
32
|
|
|
|
Federal Tax Treatment of Futures and Options Contracts
|
|
|
34
|
|
|
|
Determination of NAV
|
|
|
34
|
|
|
|
Dividends and Distributions
|
|
|
35
|
|
|
|
Miscellaneous Information
|
|
|
36
|
|
|
|
Financial Statements
|
|
|
36
|
|
|
|
Appendix AProxy and Corporate Action Voting Policies and Procedures
|
|
|
A-1
|
|
|
|
Appendix BAnnual Report to Shareholders
|
|
|
|
|
|
|
GENERAL DESCRIPTION OF THE TRUST AND THE FUND
The Trust was organized as a Massachusetts business trust on June 9, 2000 and is authorized to have multiple series or portfolios. The Trust is an open-end management investment company, registered under the Investment Company Act of 1940, as amended (the "1940 Act"). The Trust currently offers shares of 75 investment portfolios. This Statement of Additional Information relates to the PowerShares Cleantech
TM
Portfolio (the "Fund"). The Cleantech
TM
Portfolio is "diversified." The shares of the Fund are referred to herein as "Shares" or "Fund Shares."
The Fund is managed by Invesco PowerShares Capital Management LLC (the "Adviser").
The Fund offers and issues Shares at net asset value ("NAV") only in aggregations of a specified number of Shares (each a "Creation Unit" or a "Creation Unit Aggregation"), generally in exchange for a basket of equity securities included in the Underlying Index (the "Deposit Securities"), together with the deposit of a specified cash payment (the "Cash Component"). The Shares of the Fund are listed on the American Stock Exchange (the "AMEX" or the "Exchange"). Fund Shares trade on the Exchange at market prices that may be below, at or above NAV. Shares are redeemable only in Creation Unit Aggregations and, generally, in exchange for portfolio securities and a specified cash payment. Creation Units are aggregations of 100,000 Shares. In the event of the liquidation of the Fund, the Trust may lower the number of Shares in a Creation Unit.
The Trust reserves the right to offer a "cash" option for creations and redemptions of Fund Shares, although it has no current intention of doing so. Fund Shares may be issued in advance of receipt of Deposit Securities subject to various conditions including a requirement to maintain on deposit with the Trust cash at least equal to 115% of the market value of the missing Deposit Securities. See the "Creation and Redemption of Creation Unit Aggregations" section. In each instance of such cash creations or redemptions, transaction fees may be imposed that will be higher than the transaction fees associated with in-kind creations or redemptions. In all cases, such fees will be limited in accordance with the requirements of the Securities and Exchange Commission (the "SEC") applicable to management investment companies offering redeemable securities.
EXCHANGE LISTING AND TRADING
There can be no assurance that the requirements of the AMEX necessary to maintain the listing of Shares of the Fund will continue to be met. The AMEX may, but is not required to, remove the Shares of the Fund from listing if: (i) following the initial 12-month period beginning at the commencement of trading of the Fund, there are fewer than 50 beneficial owners of the Shares of the Fund for 30 or more consecutive trading days; (ii) the value of the Underlying Index is no longer calculated or available; or (iii) such other event shall occur or condition exist that, in the opinion of the AMEX, makes further dealings on the AMEX inadvisable. The AMEX will remove the Shares of the Fund from listing and trading upon termination of the Fund.
As in the case of other stocks traded on the AMEX, brokers' commissions on transactions will be based on negotiated commission rates at customary levels.
The Trust reserves the right to adjust the price levels of the Shares in the future to help maintain convenient trading ranges for investors. Any adjustments would be accomplished through stock splits or reverse stock splits, which would have no effect on the net assets of the Fund.
INVESTMENT RESTRICTIONS AND POLICIES
Investment Objective
The investment objective of the PowerShares Cleantech
TM
Portfolio is to provide investment results that correspond generally to the price and yield (before the Fund's fees and expenses) of an equity index called "The Cleantech Index
TM
" (the "Underlying Index").
1
Investment Restrictions
The Board of Trustees of the Trust (the "Board" or the "Trustees") has adopted as fundamental policies the Fund's investment restrictions numbered (1) through (9) below. The Fund, as a fundamental policy, may not:
(1) As to 75% of its total assets, invest more than 5% of the value of its total assets in the securities of any one issuer (other than obligations issued, or guaranteed, by the U.S. Government, its agencies or instrumentalities).
(2) As to 75% of its total assets, purchase more than 10% of all outstanding voting securities or any class of securities of any one issuer.
(3) Invest 25% or more of the value of its total assets in securities of issuers in any one industry or group of industries, except to the extent that the respective Underlying Index that the Fund replicates, concentrates in an industry or group of industries. This restriction does not apply to obligations issued or guaranteed by the U.S. Government, its agencies or instrumentalities.
(4) Borrow money, except that the Fund may (i) borrow money from banks for temporary or emergency purposes (but not for leverage or the purchase of investments) up to 10% of its assets and (ii) make other investments or engage in other transactions permissible under the 1940 Act that may involve a borrowing, provided that the combination of (i) and (ii) shall not exceed 33
1
/
3
% of the value of the Fund's total assets (including the amount borrowed), less the Fund's liabilities (other than borrowings).
(5) Act as an underwriter of another issuer's securities, except to the extent that the Fund may be deemed to be an underwriter within the meaning of the Securities Act of 1933 in connection with the purchase and sale of portfolio securities.
(6) Make loans to other persons, except through (i) the purchase of debt securities permissible under the Fund's investment policies, (ii) repurchase agreements or (iii) the lending of portfolio securities, provided that no such loan of portfolio securities may be made by the Fund if, as a result, the aggregate of such loans would exceed 33
1
/
3
% of the value of the Fund's total assets.
(7) Purchase or sell physical commodities unless acquired as a result of ownership of securities or other instruments (but this shall not prevent the Fund (i) from purchasing or selling options, futures contracts or other derivative instruments, or (ii) from investing in securities or other instruments backed by physical commodities).
(8) Purchase or sell real estate unless acquired as a result of ownership of securities or other instruments (but this shall not prohibit the Fund from purchasing or selling securities or other instruments backed by real estate or of issuers engaged in real estate activities).
(9) Issue senior securities, except as permitted under the 1940 Act.
Except for restriction (4), if a percentage restriction is adhered to at the time of investment, a later increase in percentage resulting from a change in market value of the investment or the total assets, or the sale of a security out of the portfolio, will not constitute a violation of that restriction.
The foregoing fundamental investment policies cannot be changed as to the Fund without approval by holders of a "majority of the Fund's outstanding voting securities." As defined in the 1940 Act, this means the vote of (i) 67% or more of the Fund's shares present at a meeting, if the holders of more than 50% of the Fund's shares are present or represented by proxy, or (ii) more than 50% of the Fund's shares, whichever is less.
In addition to the foregoing fundamental investment policies, the Fund is also subject to the following non-fundamental restrictions and policies, which may be changed by the Board of Trustees. The Fund may not:
(1) Sell securities short, unless the Fund owns or has the right to obtain securities equivalent in kind and amount to the securities sold short at no added cost, and provided that transactions in options, futures
2
contracts, options on futures contracts or other derivative instruments are not deemed to constitute selling securities short.
(2) Purchase securities on margin, except that the Fund may obtain such short-term credits as are necessary for the clearance of transactions; and provided that margin deposits in connection with futures contracts, options on futures contracts or other derivative instruments shall not constitute purchasing securities on margin.
(3) Purchase securities of open-end or closed-end investment companies except in compliance with the 1940 Act, although the Fund may not acquire any securities of registered open-end investment companies or registered unit investment trusts in reliance on Sections 12(d)(1)(F) or 12(d)(1)(G) of the 1940 Act.
(4) Invest in direct interests in oil, gas or other mineral exploration programs or leases; however, the Fund may invest in the securities of issuers that engage in these activities.
(5) Invest in illiquid securities if, as a result of such investment, more than 15% of the Fund's net assets would be invested in illiquid securities.
The investment objective of the Fund is a non-fundamental policy that can be changed by the Board of Trustees without approval by shareholders.
INVESTMENT POLICIES AND RISKS
Correlation and Tracking Error.
Correlation measures the degree of association between the returns of the Fund and its Underlying Index. The Fund seeks a correlation over time of 0.95 or better between the Fund's performance and the performance of the Underlying Index; a figure of 1.00 would indicate perfect correlation. Correlation is calculated at the Fund's fiscal year end by comparing the Fund's average monthly total returns, before fees and expenses, to the Underlying Index's average monthly total returns over the prior one-year period. Another means of evaluating the degree of correlation between the returns of the Fund and its Underlying Index is to assess the "tracking error" between the two. Tracking error means the variation between the Fund's annual return and the return of its Underlying Index expressed in terms of standard deviation. The Fund seeks to have a tracking error of less than 5%, measured on a monthly basis over a one year period by taking the standard deviation of the difference in the Fund's returns versus the Underlying Index's returns.
Loans of Portfolio Securities.
The Fund may lend its investment securities to approved borrowers. Any gain or loss on the market price of the securities loaned that might occur during the term of the loan would be for the account of the Fund. These loans cannot exceed 33
1
/
3
% of the Fund's total assets.
Approved borrowers are brokers, dealers, domestic and foreign banks, or other financial institutions that meet certain credit or other requirements as established by, and subject to the review of, the Trust's Board, so long as the terms, the structure and the aggregate amount of such loans are not inconsistent with the 1940 Act and the rules and regulations thereunder or interpretations of the SEC, which require that (a) the borrowers pledge and maintain with the Fund collateral consisting of cash, an irrevocable letter of credit issued by a bank, or securities issued or guaranteed by the U.S. Government having a value at all times of not less than 102% of the value of the securities loaned (on a "mark-to-market" basis); (b) the loan be made subject to termination by the Fund at any time; and (c) the Fund receives reasonable interest on the loan. From time to time, the Fund may return a part of the interest earned from the investment of collateral received from securities loaned to the borrower and/or a third party that is unaffiliated with the Fund and that is acting as a finder.
Repurchase Agreements.
The Fund may enter into repurchase agreements, which are agreements pursuant to which securities are acquired by the Fund from a third party with the understanding that they will be repurchased by the seller at a fixed price on an agreed date. These agreements may be made with respect to any of the portfolio securities in which the Fund is authorized to invest. Repurchase agreements may be characterized as loans secured by the underlying securities. The Fund may enter into repurchase agreements with (i) member banks of the Federal Reserve System having total assets in excess of $500 million and (ii) securities dealers ("Qualified Institutions"). The Adviser will monitor the continued creditworthiness of Qualified Institutions.
3
The use of repurchase agreements involves certain risks. For example, if the seller of securities under a repurchase agreement defaults on its obligation to repurchase the underlying securities, as a result of its bankruptcy or otherwise, the Fund will seek to dispose of such securities, which action could involve costs or delays. If the seller becomes insolvent and subject to liquidation or reorganization under applicable bankruptcy or other laws, the Fund's ability to dispose of the underlying securities may be restricted. Finally, it is possible that the Fund may not be able to substantiate its interest in the underlying securities. To minimize this risk, the securities underlying the repurchase agreement will be held by the custodian at all times in an amount at least equal to the repurchase price, including accrued interest. If the seller fails to repurchase the securities, the Fund may suffer a loss to the extent proceeds from the sale of the underlying securities are less than the repurchase price.
The resale price reflects the purchase price plus an agreed upon market rate of interest. The collateral is marked to market daily.
Reverse Repurchase Agreements.
The Fund may enter into reverse repurchase agreements, which involve the sale of securities with an agreement to repurchase the securities at an agreed-upon price, date and interest payment and have the characteristics of borrowing. The securities purchased with the funds obtained from the agreement and securities collateralizing the agreement will have maturity dates no later than the repayment date. Generally the effect of such transactions is that the Fund can recover all or most of the cash invested in the portfolio securities involved during the term of the reverse repurchase agreement, while in many cases the Fund is able to keep some of the interest income associated with those securities. Such transactions are only advantageous if the Fund has an opportunity to earn a greater rate of return on the cash derived from these transactions than the interest cost of obtaining the same amount of cash. Opportunities to realize earnings from the use of the proceeds equal to or greater than the interest required to be paid may not always be available and the Fund intends to use the reverse repurchase technique only when the Adviser believes it will be advantageous to the Fund. The use of reverse repurchase agreements may exaggerate any interim increase or decrease in the value of the Fund's assets. The custodian bank will maintain a separate account for the Fund with securities having a value equal to or greater than such commitments. Under the 1940 Act, reverse repurchase agreements are considered loans.
Money Market Instruments.
The Fund may invest a portion of its assets in high-quality money market instruments on an ongoing basis to provide liquidity. The instruments in which the Fund may invest include: (i) short-term obligations issued by the U.S. Government; (ii) negotiable certificates of deposit ("CDs"), fixed time deposits and bankers' acceptances of U.S. and foreign banks and similar institutions; (iii) commercial paper rated at the date of purchase "Prime-1" by Moody's Investors Service, Inc. or "A-1+" or "A-1" by Standard & Poor's or, if unrated, of comparable quality as determined by the Adviser; (iv) repurchase agreements; and (v) money market mutual funds. CDs are short-term negotiable obligations of commercial banks. Time deposits are non-negotiable deposits maintained in banking institutions for specified periods of time at stated interest rates. Banker's acceptances are time drafts drawn on commercial banks by borrowers, usually in connection with international transactions.
Investment Companies.
The Fund may invest in the securities of other investment companies (including money market funds). Under the 1940 Act, the Fund's investment in investment companies is limited to, subject to certain exceptions, (i) 3% of the total outstanding voting stock of any one investment company, (ii) 5% of the Fund's total assets with respect to any one investment company and (iii) 10% of the Fund's total assets of investment companies in the aggregate.
Real Estate Investment Trusts.
The Fund may invest in the securities of real estate investment trusts ("REITs") to the extent allowed by law, which pool investors' funds for investments primarily in real estate properties. Investment in REITs is a practical way for the Fund to invest in the real estate industry. As a shareholder in a REIT, the Fund would bear its ratable share of the REIT's expenses, including its advisory and administration fees. At the same time, the Fund would continue to pay its own investment advisory fees and other expenses, consequently, the Fund and its shareholders will effectively absorb duplicate levels of fees with respect to investments in REITs.
4
Illiquid Securities.
In the aggregate, the Fund may invest up to 15% of its net assets in illiquid securities. Illiquid securities include securities subject to contractual or other restrictions on resale and other instruments that lack readily available markets.
Futures and Options.
The Fund may enter into futures contracts, options and options on futures contracts. These futures contracts and options will be used to simulate full investment in the Underlying Index, to facilitate trading or to reduce transaction costs. The Fund will not use futures or options for speculative purposes.
A call option gives a holder the right to purchase a specific security or an index at a specified price ("exercise price") within a specified period of time. A put option gives a holder the right to sell a specific security or an index at a specified price within a specified period of time. The initial purchaser of a call option pays the "writer," i.e., the party selling the option, a premium which is paid at the time of purchase and is retained by the writer whether or not such option is exercised. The Fund may purchase put options to hedge its portfolio against the risk of a decline in the market value of securities held and may purchase call options to hedge against an increase in the price of securities it is committed to purchase. The Fund may write put and call options along with a long position in options to increase its ability to hedge against a change in the market value of the securities it holds or is committed to purchase.
Futures contracts provide for the future sale by one party and purchase by another party of a specified amount of a specific instrument or index at a specified future time and at a specified price. Stock index contracts are based on indices that reflect the market value of common stock of the firms included in the indexes. The Fund may enter into futures contracts to purchase security indexes when the Adviser anticipates purchasing the underlying securities and believes prices will rise before the purchase will be made. Assets committed to futures contracts will be segregated by the custodian to the extent required by law.
An option on a futures contract, as contrasted with the direct investment in such a contract, gives the purchaser the right, in return for the premium paid, to assume a position in the underlying futures contract at a specified exercise price at any time prior to the expiration date of the option. Upon exercise of an option, the delivery of the futures position by the writer of the option to the holder of the option will be accompanied by delivery of the accumulated balance in the writer's futures margin account that represents the amount by which the market price of the futures contract exceeds (in the case of a call) or is less than (in the case of a put) the exercise price of the option on the futures contract. The potential for loss related to the purchase of an option on a futures contract is limited to the premium paid for the option plus transaction costs. Because the value of the option is fixed at the point of purchase, there are no daily cash payments by the purchaser to reflect changes in the value of the underlying contract; however, the value of the option changes daily and that change would be reflected in the NAV of the Fund. The potential for loss related to writing call options on equity securities or indexes is unlimited. The potential for loss related to writing put options is limited only by the aggregate strike price of the put option less the premium received.
The Fund may purchase and write put and call options on futures contracts that are traded on a U.S. exchange as a hedge against changes in value of its portfolio securities, or in anticipation of the purchase of securities, and may enter into closing transactions with respect to such options to terminate existing positions. There is no guarantee that such closing transactions can be effected.
Restrictions on the Use of Futures Contracts and Options on Futures Contracts.
The Commodity Futures Trading Commission has eliminated limitations on futures trading by certain regulated entities, including registered investment companies. Consequently, registered investment companies may engage in unlimited futures transactions and options thereon provided that they claim an exclusion from regulation as a commodity pool operator. The Trust has claimed such an exclusion from registration as a commodity pool operator under the Commodity Exchange Act (the "CEA"). Therefore, it is not subject to the registration and regulatory requirements of the CEA. There are no limitations on the extent to which the Fund may engage in non-hedging transactions involving futures and options thereon, except as set forth in the Fund's Prospectus and this SAI.
Upon entering into a futures contract, the Fund will be required to deposit with the broker an amount of cash or cash equivalents in the range of approximately 5% to 7% of the contract amount (this amount is subject to change by
5
the exchange on which the contract is traded). This amount, known as "initial margin," is in the nature of a performance bond or good faith deposit on the contract and is returned to the Fund upon termination of the futures contract, assuming all contractual obligations have been satisfied. Subsequent payments, known as "variation margin," to and from the broker will be made daily as the price of the index underlying the futures contract fluctuates, making the long and short positions in the futures contract more or less valuable, a process known as "marking-to-market." At any time prior to expiration of a futures contract, the Fund may elect to close the position by taking an opposite position, which will operate to terminate the Fund's existing position in the contract.
Swap Agreements.
Swap agreements are contracts between parties in which one party agrees to make periodic payments to the other party (the "Counterparty") based on the change in market value or level of a specified rate, index or asset. In return, the Counterparty agrees to make periodic payments to the first party based on the return of a different specified rate, index or asset. Swap agreements will usually be done on a net basis, the Fund receiving or paying only the net amount of the two payments. The net amount of the excess, if any, of the Fund's obligations over its entitlements with respect to each swap is accrued on a daily basis and an amount of cash or highly liquid securities having an aggregate value at least equal to the accrued excess is maintained in an account at the Trust's custodian bank.
In addition, the Fund may enter into credit default swap contracts for hedging purposes or to add leverage to the Fund. In a credit default swap, two parties enter into an agreement whereby one party pays the other a fixed periodic coupon for the specified life of the agreement. The selling party makes no payments unless a specified credit event occurs. Credit events are typically defined to include a material default, bankruptcy or debt restructuring for a specified reference asset. If such a credit event occurs, the party makes a payment to the first party, and the swap then terminates.
GENERAL CONSIDERATIONS AND RISKS
A discussion of the risks associated with an investment in the Fund is contained in the Fund's Prospectus in the "Principal Risks of Investing in the Fund" and "Additional Risks" sections. The discussion below supplements, and should be read in conjunction with, these sections of the Fund's Prospectus.
An investment in the Fund should be made with an understanding that the value of the Fund's portfolio securities may fluctuate in accordance with changes in the financial condition of the issuers of the portfolio securities, the value of common stocks in general and other factors that affect the market.
An investment in the Fund should also be made with an understanding of the risks inherent in an investment in equity securities, including the risk that the financial condition of issuers may become impaired or that the general condition of the stock market may deteriorate (either of which may cause a decrease in the value of the portfolio securities and thus in the value of Fund Shares). Common stocks are susceptible to general stock market fluctuations and to volatile increases and decreases in value as market confidence and perceptions of their issuers' change. These investor perceptions are based on various and unpredictable factors, including expectations regarding government, economic, monetary and fiscal policies, inflation and interest rates, economic expansion or contraction, and global or regional political, economic or banking crises.
Holders of common stocks incur more risk than holders of preferred stocks and debt obligations because common stockholders, as owners of the issuer, have generally inferior rights to receive payments from the issuer in comparison with the rights of creditors, or holders of debt obligations or preferred stocks. Further, unlike debt securities which typically have a stated principal amount payable at maturity (whose value, however, is subject to market fluctuations prior thereto), or preferred stocks, which typically have a liquidation preference and which may have stated optional or mandatory redemption provisions, common stocks have neither a fixed principal amount nor a maturity.
The existence of a liquid trading market for certain securities may depend on whether dealers will make a market in such securities. There can be no assurance that a market will be made or maintained or that any such market will be or remain liquid. The price at which securities may be sold and the value of the Fund's Shares will be adversely affected if trading markets for the Fund's portfolio securities are limited or absent, or if bid/ask spreads are wide.
6
Risks of Futures and Options Transactions.
There are several risks accompanying the utilization of futures contracts and options on futures contracts. First, while the Fund plans to utilize futures contracts only if an active market exists for such contracts, there is no guarantee that a liquid market will exist for the contract at a specified time.
Furthermore, because, by definition, futures contracts project price levels in the future and not current levels of valuation, market circumstances may result in a discrepancy between the price of the stock index future and the movement in the Underlying Index. In the event of adverse price movements, the Fund would continue to be required to make daily cash payments to maintain its required margin. In such situations, if the Fund has insufficient cash, it may have to sell portfolio securities to meet daily margin requirements at a time when it may be disadvantageous to do so. In addition, the Fund may be required to deliver the instruments underlying futures contracts it has sold.
The risk of loss in trading futures contracts or uncovered call options in some strategies (e.g., selling uncovered stock index futures contracts) is potentially unlimited. The Fund does not plan to use futures and options contracts in this way. The risk of a futures position may still be large as traditionally measured due to the low margin deposits required. In many cases, a relatively small price movement in a futures contract may result in immediate and substantial loss or gain to the investor relative to the size of a required margin deposit. The Fund, however, intends to utilize futures and options contracts in a manner designed to limit their risk exposure to levels comparable to direct investment in stocks.
Utilization of futures and options on futures by the Fund involves the risk of imperfect or even negative correlation to the Underlying Index if the index underlying the futures contract differs from the Underlying Index. There is also the risk of loss by the Fund of margin deposits in the event of bankruptcy of a broker with whom the Fund has an open position in the futures contract or option; however, this risk is substantially minimized because (a) of the regulatory requirement that the broker has to "segregate" customer funds from its corporate funds, and (b) in the case of regulated exchanges in the United States, the clearing corporation stands behind the broker to make good losses in such a situation. The purchase of put or call options could be based upon predictions by the Adviser as to anticipated trends, which predictions could prove to be incorrect and a part or all of the premium paid therefore could be lost.
Because the futures market imposes less burdensome margin requirements than the securities market, an increased amount of participation by speculators in the futures market could result in price fluctuations. Certain financial futures exchanges limit the amount of fluctuation permitted in futures contract prices during a single trading day. The daily limit establishes the maximum amount by which the price of a futures contract may vary either up or down from the previous day's settlement price at the end of a trading session. Once the daily limit has been reached in a particular type of contract, no trades may be made on that day at a price beyond that limit. It is possible that futures contract prices could move to the daily limit for several consecutive trading days with little or no trading, thereby preventing prompt liquidation of futures positions and subjecting the Fund to substantial losses. In the event of adverse price movements, the Fund would be required to make daily cash payments of variation margin.
Although the Fund intends to enter into futures contracts only if there is an active market for such contracts, there is no assurance that an active market will exist for the contracts at any particular time.
Risks of Swap Agreements.
The risk of loss with respect to swaps generally is limited to the net amount of payments that the Fund is contractually obligated to make. Swap agreements are also subject to the risk that the swap Counterparty will default on its obligations. If such a default were to occur, the Fund will have contractual remedies pursuant to the agreements related to the transaction. However, such remedies may be subject to bankruptcy and insolvency laws, which could affect the Fund's rights as a creditor (e.g., the Fund may not receive the net amount of payments that it contractually is entitled to receive). The Fund, however, intends to utilize swaps in a manner designed to limit its risk exposure to levels comparable to direct investments in stocks. The Fund will be subject to counterparty risk with respect to the amount it expects to receive from counterparties to swap transactions. If a counterparty becomes bankrupt or otherwise fails to perform its obligations due to financial difficulties, the Fund could suffer losses. Due to the current credit crises, there is an increased possibility that a counterparty may become bankrupt or otherwise fail to perform its obligations due to financial difficulties. Swaps are not traded on exchanges, do not have uniform terms and in general are not transferable without the consent of the counterparty.
7
MANAGEMENT
The general supervision of the duties performed by the Adviser for the Fund under the Investment Advisory Agreement is the responsibility of the Board of Trustees. The Trust currently has six Trustees. Five Trustees have no affiliation or business connection with the Adviser or any of its affiliated persons and do not own any stock or other securities issued by the Adviser. These are the "non-interested" or "independent" Trustees ("Independent Trustees"). The other Management Trustee (the "Management Trustee") is affiliated with the Adviser.
The Independent Trustees of the Trust, their term of office and length of time served, their principal business occupations during the past five years, the number of portfolios in the Fund Family (defined below) overseen by each Independent Trustee, and other directorships, if any, held by the Trustee are shown below. The Fund Family includes all open and closed-end funds (including all of their portfolios) advised by the Adviser and any funds that have an investment adviser that is an affiliated person of the Adviser. As of the date of this SAI, the Fund Family consists of the Trust's 75 portfolios and three other exchange-traded funds with 35 portfolios advised by the Adviser (the "Fund Family") and 228 other portfolios advised by an affiliated person of the Adviser.
Name, Address and Age
of Independent Trustee
|
|
Position(s) Held
with Trust
|
|
Term of
Office and
Length of
Time Served*
|
|
Principal Occupation(s)
During Past 5 Years
|
|
Number of
Portfolios in
Fund
Family
Overseen by
Independent
Trustee
|
|
Other Directorships
Held by Independent Trustee
|
|
Ronn R. Bagge (49)
YQA Capital
Management LLC
1755
S. Naperville Rd.
Suite 100
Wheaton, IL 60187
|
|
Trustee
|
|
Since 2003
|
|
YQA Capital Management LLC (July 1998-Present); formerly Owner/CEO of Electronic Dynamic Balancing Co., Inc. (high-speed rotating equipment service provider)
|
|
|
111
|
|
|
None
|
|
|
Marc M. Kole (47)
c/o Invesco PowerShares Capital Management LLC
301 West Roosevelt Road
Wheaton, IL 60187
|
|
Trustee
|
|
Since 2006
|
|
Assistant Vice President and Controller, Priority Health (September 2005-April 2008); formerly, Interim CFO, Priority Health (July 2006-April 2007); Senior Vice President of Finance, United Healthcare (health insurance) (July 2004-July 2005); Senior Vice President of Finance, Oxford Health Plans (June 2000-July 2004)
|
|
|
111
|
|
|
None
|
|
|
D. Mark McMillan (45)
c/o Invesco PowerShares
Capital Management LLC
301 West Roosevelt Road
Wheaton, IL 60187
|
|
Trustee
|
|
Since 2003
|
|
Partner, Bell, Boyd & Lloyd LLP (1989-Present)
|
|
|
111
|
|
|
None
|
|
|
Philip M. Nussbaum (45)
c/o Invesco PowerShares Capital Management LLC
301 West Roosevelt Road
Wheaton, IL 60187
|
|
Trustee
|
|
Since 2003
|
|
Chairman, Performance Trust Capital Partners (formerly Betzold, Berg, Nussbaum & Heitman, Inc.) (November 2004-Present); formerly Managing Director, Communication Institute (May 2002-August 2003); Executive Vice President of Finance, Betzold, Berg, Nussbaum & Heitman, Inc. (March 1994-July 1999)
|
|
|
111
|
|
|
None
|
|
|
8
Name, Address and Age
of Independent Trustee
|
|
Position(s) Held
with Trust
|
|
Term of
Office and
Length of
Time Served*
|
|
Principal Occupation(s)
During Past 5 Years
|
|
Number of
Portfolios in
Fund
Family
Overseen by
Independent
Trustee
|
|
Other Directorships
Held by Independent Trustee
|
|
Donald H. Wilson (47)
c/o Invesco PowerShares Capital Management LLC
301 West Roosevelt Road
Wheaton, IL 60187
|
|
Trustee
|
|
Since 2006
|
|
President and Chief Operating Officer and Chief Financial Officer, AMCORE Financial, Inc. (August 2007-Present); Executive Vice President and Chief Financial Officer, AMCORE Financial, Inc. (bank holding company) (February 2006-August 2007); formerly, Senior Vice President and Treasurer, Marshall & Ilsley Corp. (bank holding company) (May 1995-February 2006)
|
|
|
111
|
|
|
None
|
|
|
* This is the period for which the Trustee began serving the Trust. Each Trustee serves an indefinite term, until his successor is elected.
The Trustee who is affiliated with the Adviser or affiliates of the Adviser and executive officers of the Trust, their term of office and length of time served, their principal business occupations during the past five years, the number of portfolios in the Fund Complex overseen by the Management Trustee and the other directorships, if any, held by the Trustee, are shown below.
Name, Address and Age
of Management Trustee
|
|
Position(s) Held
with Trust
|
|
Term of
Office and
Length of
Time Served*
|
|
Principal Occupation(s)
During Past 5 Years
|
|
Number of
Portfolios in
Fund
Family
Overseen by
Management
Trustee
|
|
Other Directorships
Held by Management Trustee
|
|
H. Bruce Bond (44)
Invesco PowerShares
Capital Management LLC
301 West Roosevelt Road
Wheaton, IL 60187
|
|
Chairman, Trustee and Chief Executive Officer
|
|
Since 2003
|
|
Managing Director, Invesco PowerShares Capital Management LLC
(August 2002-Present); Manager, Nuveen Investments (April 1998-August 2002)
|
|
|
111
|
|
|
None
|
|
|
Name, Address and Age
of Executive Officer
|
|
Position(s) Held
with Trust
|
|
Length of
Time Served*
|
|
Principal Occupation(s) During Past 5 Years
|
|
Bruce T. Duncan (53)
Invesco PowerShares
Capital Management LLC
301 West Roosevelt Road
Wheaton, IL 60187
|
|
Chief Financial Officer, Treasurer and Secretary
|
|
Chief Financial Officer Since 2006 and Secretary Since 2008
|
|
Senior Vice President of Finance, Invesco PowerShares Capital Management LLC (September 2005-Present); Private Practice Attorney (2000-2005); Vice President of Investor Relations, The ServiceMaster Company (1994-2000); Vice President of Taxes, The ServiceMaster Company (1990-2000)
|
|
|
Kevin R. Gustafson (42)
Invesco PowerShares
Capital Management LLC
301 West Roosevelt Road
Wheaton, IL 60187
|
|
Chief Compliance Officer
|
|
Since 2004
|
|
General Counsel, Chief Compliance Officer, Invesco PowerShares (September 2005-April 2008); Invesco PowerShares Capital Management LLC (September 2004-Present); Attorney, Nyberg & Gustafson (2001-2004); Attorney, Burke, Warren, McKay & Serritella, P.C. (1997-2000)
|
|
|
* This is the period for which the Trustee/Officer began serving the Trust. Each Officer serves an indefinite term, until his successor is elected.
9
For each Trustee, the dollar range of equity securities beneficially owned by the Trustee in the Trust and in all registered investment companies overseen by the Trustee as of December 31, 2007 is shown below.
Name of Trustee
|
|
Dollar Range of Equity
Securities in the PowerShares
Cleantech
TM
Portfolio
|
|
Aggregate Dollar Range of
Equity Securities in All
Registered Investment
Companies Overseen by
Trustee in Fund Family
|
|
Ronn R. Bagge
|
|
None
|
|
Over $100,000
|
|
Marc M. Kole
|
|
None
|
|
Over $100,000
|
|
D. Mark McMillan
|
|
None
|
|
$
10,001-$50,000
|
|
Philip M. Nussbaum
|
|
None
|
|
Over $100,000
|
|
Donald H. Wilson
|
|
None
|
|
Over $100,000
|
|
H. Bruce Bond
|
|
None
|
|
Over $100,000
|
|
As to each Independent Trustee and his immediate family members, no person owned beneficially or of record securities in an investment adviser or principal underwriter of the Fund, or a person (other than a registered investment company) directly or indirectly controlling, controlled by or under common control with an investment adviser or principal underwriter of the Fund.
As of April 1, 2008, the trusts of the Fund Family pay each Independent Trustee an annual retainer of $195,000 for their service as Trustee (the "Retainer"). The Trust and the PowerShares Exchange-Traded Fund Trust II ( "Trust II") pay $155,000 of the Retainer, half of which is allocated pro rata between the funds of the Trust and Trust II, and the other half of which is allocated between the funds of the Trust and the funds of Trust II based on average net assets. The other trusts in the Fund Family pay the remaining $40,000 of the Retainer. Each committee chair receives an additional fee of $10,000 per year, allocated in the same manner as the Retainer. The Trust also reimburses each Trustee for travel and other out-of-pocket expenses incurred in attending Board and committee meetings.
The Fund has a deferred compensation plan (the "DC Plan"), which allows each Independent Trustee to defer payment of all, or a portion, of the fees the Trustee receives for serving on the Board of Trustees throughout the year. Each eligible Trustee generally may elect to have the deferred amounts credited with a return equal to the total return on one to five of the funds of the Trust or Trust II that are offered as investment options under the DC Plan. At the Trustee's election, distributions are either in one lump sum payment, or in the form of equal annual installments over a period years designated by the Trustee. The rights of an eligible Trustee and the beneficiaries to the amounts held under the DC Plan are unsecured and such amounts are subject to the claims of the creditors of the Fund. The Independent Trustees are not eligible for any pension or profit sharing plan.
The Board of Trustees met 5 times during the fiscal year ended April 30, 2008.
The Board has an Audit Committee, consisting of five Trustees who are not "interested persons" (as defined in the 1940 Act) of the Trust. Messrs. Bagge, Kole, McMillan, Nussbaum and Wilson currently serve as members of the Audit Committee. The Audit Committee has the responsibility, among other things, to: (i) approve and recommend to the Board the selection of the Trust's independent registered public accounting firm, (ii) review the scope of the independent registered public accounting firm's audit activity, (iii) review the audited financial statements and (iv) review with such independent registered public accounting firm the adequacy and the effectiveness of the Trust's internal controls. During the fiscal year ended April 30, 2008, the Audit Committee held 3 meetings.
The Board also has a Nominating and Governance Committee consisting of five Trustees who are not "interested persons" (as defined in the 1940 Act) of the Trust. Messrs. Bagge, Kole, McMillan, Nussbaum and Wilson currently serve as members of the Nominating and Governance Committee. The Nominating and Governance Committee has the responsibility, among other things, to identify and recommend individuals for Board membership, and evaluate candidates for Board membership. The Board will consider recommendations for trustees from shareholders. Nominations from shareholders should be in writing and sent to the Secretary of
10
the Trust to the attention of the Chairman of the Nominating and Governance Committee as described below under the caption "Shareholder Communications." During the fiscal year ended April 30, 2008, the Nominating and Governance Committee held 3 meetings.
The following sets forth the fees paid to each Trustee for the fiscal year ended April 30, 2008:
Name of Trustee
|
|
Aggregate
Compensation From
Trust*
|
|
Pension or Retirement
Benefits accrued as part of
Fund Expenses
|
|
Total Compensation Paid
From Fund Complex*
|
|
Ronn R. Bagge
|
|
$
|
141,141
|
|
|
N/A
|
|
$
|
145,417
|
|
|
Marc M. Kole
|
|
$
|
131,765
|
|
|
N/A
|
|
$
|
136,250
|
|
|
D. Mark McMillan
|
|
$
|
129,775
|
|
|
N/A
|
|
$
|
135,415
|
|
|
Philip M. Nussbaum
|
|
$
|
142,038
|
|
|
N/A
|
|
$
|
144,582
|
|
|
Donald H. Wilson
|
|
$
|
131,220
|
|
|
N/A
|
|
$
|
135,415
|
|
|
H. Bruce Bond
|
|
|
N/A
|
|
|
N/A
|
|
|
N/A
|
|
|
(1) The amounts shown in this column represent the aggregate compensation paid by all of the series of the Fund Family as of April 30, 2008 before deferral by the Trustees under the DC Plan. As of April 30, 2008, the values of the deferral accounts for Messrs. Bagge, McMillan and Nussbaum pursuant to the DC Plan were $11,736, $108,231 and $112,144, respectively.
As of the date of this Statement of Additional Information, the officers and Trustees of the Trust, in the aggregate, own less than 1% of the shares of the Fund.
Shareholder Communications.
Shareholders may send communications to the Trust's Board of Trustees by addressing the communications directly to the Board (or individual Board members) and/or otherwise clearly indicating in the salutation that the communication is for the Board (or individual Board members). The shareholder may send the communication to either the Trust's office or directly to such Board members at the address specified for each Trustee. Other shareholder communications received by the Trust not directly addressed and sent to the Board will be reviewed and generally responded to by management. Such communications will be forwarded to the Board at management's discretion based on the matters contained therein.
Investment Adviser.
The Adviser provides investment tools and portfolios for advisers and investors. The Adviser is committed to theoretically sound portfolio construction and empirically verifiable investment management approaches. Its asset management philosophy and investment discipline is deeply rooted in the application of intuitive factor analysis and model implementation to enhance investment decisions.
The Adviser acts as investment adviser for and manages the investment and reinvestment of the assets of the Fund. The Adviser also administers the Trust's business affairs, provides office facilities and equipment and certain clerical, bookkeeping and administrative services, and permits any of its officers or employees to serve without compensation as Trustees or officers of the Trust if elected to such positions.
Portfolio Managers.
The Adviser uses a team of portfolio managers (the "Portfolio Managers"), investment strategists and other investment specialists. This team approach brings together many disciplines and leverages the Adviser's resources. John W. Southard Jr., CFA, MBA, oversees all research, portfolio management and trading operations of the Adviser. In this capacity, he oversees the team of the Portfolio Managers responsible for the day-to-day management of the Fund. Travis Trampe, who reports to Mr. Southard, is the member of the portfolio management team who is currently primarily responsible for the Fund's day-to-day management. Mr. Trampe receives management assistance from Peter Hubbard, Jason Stoneberg and Rudolf Reitmann, who perform various functions related to portfolio management, including investing cash flows, coordinating with other team members to focus on certain asset classes, implementing investment strategy and reserching and reviewing investment strategy. Each member of the portfolio management team has appropriate limitations on his authority for risk management and compliance purposes.
11
As of April 30, 2008, in addition to the 73 funds of the Trust, Mr. Southard managed the 103 portfolios of Trust II with a total of approximately $13.3 billion in assets, no other pooled investment vehicles and 15 exchange-traded funds traded in Europe with a total of approximately $511.9 million in assets.
As of April 30, 2008, in addition to 73 funds of the Trust, Mr. Hubbard managed the 103 portfolios of Trust II with a total of approximately $13.3 billion in assets, no other pooled investment vehicles and 15 exchange-traded funds traded in Europe with a total of approximately $511.9 million in assets.
As of April 30, 2008, in addition to 73 funds of the Trust, Mr. Reitmann managed the 15 portfolios of Trust II with a total of approximately $13.3 billion in assets, no other pooled investment vehicles and 15 exchange-traded funds traded in Europe with a total of approximately $511.9 million in assets.
As of April 30, 2008, in addition to 73 funds of the Trust, Mr. Stoneberg managed the 15 portfolios of Trust II with a total of approximately $13.3 billion in assets, no other pooled investment vehicles and 15 exchange-traded funds traded in Europe with a total of approximately $511.9 million in assets.
As of April 30, 2008, in addition to 73 funds of the Trust, Mr. Trampe managed the 15 portfolios of Trust II with a total of approximately $13.3 billion in assets, no other pooled investment vehicles and 15 exchange-traded funds traded in Europe with a total of approximately $511.9 million in assets.
Although the funds that are managed by the Portfolio Managers may have different investment strategies, each has an investment objective of replicating its Underlying Index. The Adviser does not believe that management of the different funds presents a material conflict of interest for the Portfolio Managers or the Adviser.
The Portfolio Managers are compensated with a fixed salary amount by the Adviser. The Portfolio Managers are eligible, along with other senior employees of the Adviser, to participate in a year-end discretionary bonus pool. The Compensation Committee of the Adviser will review management bonuses and, depending upon the size, the bonuses may be approved in advance by the Committee. There is no policy regarding, or agreement with, the Portfolio Managers or any other senior executive of the Adviser to receive bonuses or any other compensation in connection with the performance of any of the accounts managed by the Portfolio Managers. As of April 30, 2008, the dollar range of securities beneficially owned by Mr. Southard in the Trust was over $100,000. As of April 30, 2008, the dollar ranges of securities beneficially owned by Messrs. Hubbard, Reitmann, Trampe and Stoneberg were $0, $0, $10,000-$50,000 and $0, respectively. The portfolio holdings of Mr. Southard and Mr. Stoneberg as of April 30, 2008 are shown below.
|
|
Dollar Range
|
|
Fund
|
|
$1 to
$10,000
|
|
$10,001 to
$50,000
|
|
$50,001 to
$100,000
|
|
$100,001 to
$500,000
|
|
$500,001 to
$1,000,000
|
|
over
$1,000,000
|
|
PowerShares Dynamic MagniQuant Portfolio
|
|
|
|
|
|
|
|
|
|
X
|
|
|
|
PowerShares Dynamic Market Portfolio
|
|
|
|
|
|
|
|
|
|
|
|
X
|
|
PowerShares Dynamic OTC Portfolio
|
|
|
|
|
|
|
|
X
|
|
|
|
|
|
PowerShares WilderHill Progressive Energy Portfolio
|
|
|
|
|
|
|
|
X
|
|
|
|
|
|
PowerShares Listed Private Equity Portfolio
|
|
|
|
|
|
|
|
X
|
|
|
|
|
|
PowerShares Dynamic Deep Value Portfolio
|
|
|
|
|
|
|
|
X
|
|
|
|
|
|
PowerShares Dynamic Health Care Sector Portfolio
|
|
|
|
|
|
|
|
X
|
|
|
|
|
|
PowerShares Golden Dragon Halter USX China Portfolio
|
|
|
|
|
|
|
|
X
|
|
|
|
|
|
PowerShares Dynamic Utilities Portfolio
|
|
|
|
X
|
|
|
|
|
|
|
|
|
|
PowerShares International Dividend Achievers
TM
Portfolio
|
|
|
|
|
|
|
|
X
|
|
|
|
|
|
PowerShares Zacks Micro Cap Portfolio
|
|
|
|
|
|
|
|
X
|
|
|
|
|
|
PowerShares Dynamic Semiconductors Portfolio
|
|
|
|
|
|
X
|
|
|
|
|
|
|
|
PowerShares Dynamic Food & Beverage Portfolio
|
|
|
|
|
|
X
|
|
|
|
|
|
|
|
PowerShares Dynamic Small Cap Value Portfolio
|
|
|
|
|
|
|
|
X
|
|
|
|
|
|
12
|
|
Dollar Range
|
|
Fund
|
|
$1 to
$10,000
|
|
$10,001 to
$50,000
|
|
$50,001 to
$100,000
|
|
$100,001 to
$500,000
|
|
$500,001 to
$1,000,000
|
|
over
$1,000,000
|
|
PowerShares Dynamic Market Portfolio
|
|
X
|
|
|
|
|
|
|
|
|
|
|
|
PowerShares WilderHill Clean Energy Portfolio
|
|
X
|
|
|
|
|
|
|
|
|
|
|
|
PowerShares Dynamic Small Cap Growth Portfolio
|
|
|
|
|
|
X
|
|
|
|
|
|
|
|
Investment Advisory Agreement.
Pursuant to an Investment Advisory Agreement between the Adviser and the Trust, the Fund has agreed to pay an annual advisory fee equal to a percentage of its average daily net assets set forth in the chart below.
Fund
|
|
Fee
|
|
PowerShares Cleantech
TM
Portfolio
|
|
0.50% of average daily net assets
|
|
The Fund is responsible for all its expenses, including the investment advisory fees, costs of transfer agency, custody, fund administration, legal, audit and other services, interest, taxes, brokerage commissions and other expenses connected with executions of portfolio transactions, any distribution fees or expenses and extraordinary expenses. Pursuant to the Expense Agreement, at least until August 30, 2009, the Adviser has agreed to waive fees and/or reimburse Fund expenses to the extent necessary to prevent the operating expenses of the Fund (excluding interest expenses, brokerage commissions and other trading expenses, sub-licensing fees, offering costs, taxes and extraordinary expenses) from exceeding the percentage of its average net assets set forth in the chart below. The offering costs excluded from the expense cap set forth below for the Fund are: (a) legal fees pertaining to the Fund's Shares offered for sale; (b) SEC and state registration fees; and (c) initial fees paid to be listed on an exchange (the "Expense Cap"). Expenses borne by the Adviser are subject to reimbursement by the Fund up to three years from the date the fee or expense was incurred, but no reimbursement payment will be made by the Fund if it would result in the Fund exceeding its Expense Cap.
Fund
|
|
Expense Cap
|
|
PowerShares Cleantech
TM
Portfolio
|
|
0.60% of average net assets
|
|
The aggregate amount of the advisory fee paid by the Fund to the Adviser during the Fund's fiscal years since its commencement of operations, and the aggregate amount of fees waived by the Adviser (net of expenses reimbursed to the Adviser under the Expense Agreement) during those periods are set forth in the chart below with respect to the Fund.
|
|
Advisory Fees Paid for the
Fiscal Year Ended
|
|
Net Advisory Fees Waived for the
Fiscal Year Ended
|
|
|
|
|
|
April 30,
2006
|
|
April 30,
2007
|
|
April 30,
2008
|
|
April 30,
2006
|
|
April 30,
2007
|
|
April 30,
2008
|
|
Date of
Commencement
of Operations
|
|
PowerShares Cleantech
TM
Portfolio
|
|
N/A
|
|
$
|
68,193
|
|
|
$
|
365,806
|
|
|
N/A
|
|
$
|
48,163
|
|
|
$
|
57,076
|
|
|
|
10
/24/06
|
|
|
Under the Investment Advisory Agreement, the Adviser will not be liable for any error of judgment or mistake of law or for any loss suffered by the Fund in connection with the performance of the Investment Advisory Agreement, except a loss resulting from willful misfeasance, bad faith or gross negligence on the part of the Adviser in the performance of its duties or from reckless disregard of its duties and obligations thereunder. The Investment Advisory Agreement continues until April 30, 2009, and thereafter only if approved annually by the Board, including a majority of the Independent Trustees. The Agreement terminates automatically upon assignment and is terminable at any time without penalty as to the Fund by the Board, including a majority of the Independent Trustees, or by vote of the holders of a majority of that Fund's outstanding voting securities on 60 days' written notice to the Adviser, or by the Adviser on 60 days' written notice to the Fund.
Invesco PowerShares Capital Management LLC, organized February 7, 2003, is located at 301 West Roosevelt Road, Wheaton, Illinois 60187.
Administrator.
The Bank of New York ("BONY") serves as Administrator for the Fund. Its principal address is 101 Barclay St., New York, New York 10286.
13
BONY serves as Administrator for the Trust pursuant to an Administrative Services Agreement. Under the Administrative Services Agreement, BONY is obligated on a continuous basis, to provide such administrative services as the Board reasonably deems necessary for the proper administration of the Trust and the Fund. BONY will generally assist in all aspects of the Trust's and the Fund's operations; supply and maintain office facilities (which may be in BONY's own offices), statistical and research data, data processing services, clerical, accounting, bookkeeping and record keeping services (including, without limitation, the maintenance of such books and records as are required under the 1940 Act and the rules thereunder, except as maintained by other agency agents), internal auditing, executive and administrative services, and stationery and office supplies; prepare reports to shareholders or investors; prepare and file tax returns; supply financial information and supporting data for reports to and filings with the SEC; supply supporting documentation for meetings of the Board; provide monitoring reports and assistance regarding compliance with the Declaration of Trust, by-laws, investment objectives and policies and with federal and state securities laws; and negotiate arrangements with, and supervise and coordinate the activities of, agents and others to supply services.
Pursuant to the Administrative Services Agreement, the Trust has agreed to indemnify the Administrator for certain liabilities, including certain liabilities arising under the federal securities laws, unless such loss or liability results from negligence or willful misconduct in the performance of its duties.
Prior to April 1, 2007, pursuant to the Administrative Services Agreement between BONY and the Trust, the Fund has agreed to pay an annual administrative services fee of 0.03% of its average daily net assets or the minimum annual fee of $60,000, whichever is higher. The aggregate amount of the administrative fee paid by the Fund to BONY during the Fund's fiscal years ended since the commencement of operations of the Fund, are set forth in the chart below. Effective April 1, 2007, the Fund has agreed to pay the higher of: (1) an annual accounting and administrative services fee of up to 0.05% of the Trust's average daily net assets which will be allocated among the funds of the Trust based on the fund's average daily net assets; and (2) the minimum annual fee of up to $115,000.
|
|
Administrative Fees Paid for the Fiscal Year Ended
|
|
Fund
|
|
April 30, 2006
|
|
April 30, 2007
|
|
April 30, 2008
|
|
PowerShares Cleantech
TM
Portfolio
|
|
N/A
|
|
$
|
3,133
|
|
|
$
|
78,681
|
|
|
Custodian, Transfer Agent and Fund Accounting Agent.
BONY, located at 101 Barclay St., New York, New York 10286, also serves as custodian for the Fund pursuant to a Custodian Agreement. As custodian, BONY holds the Fund's assets, calculates the NAV of Shares and calculates net income and realized capital gains or losses. BONY also serves as transfer agent of the Fund pursuant to a Transfer Agency Agreement. Further, BONY serves as Fund Accounting Agent pursuant to the Fund Accounting Agreement. BONY may be reimbursed by the Fund for its out-of-pocket expenses.
Prior to April 1, 2007, pursuant to the Custodian Agreement between BONY and the Trust, the Fund has agreed to pay an annual custody fee of 0.0075% of its average daily net assets or the minimum annual fee of $3,600, whichever is higher. Effective April 1, 2007, each Fund has agreed to pay the higher of: (1) an annual custody fee of up to 0.00675% of the Trust's average daily net assets which will be allocated among the Fund based on the Fund's average daily net assets; and (2) the minimum annual fee of $3,600.
Pursuant to the Transfer Agency Agreement between BONY and the Trust, the Fund has agreed to an annual minimum transfer agency fee of $2,400.
Prior to April 1, 2007, pursuant to the Fund Accounting Agreement between BONY and the Trust, the Fund has agreed to pay an annual fund accounting fee of 0.02% of its average daily net assets or the minimum annual fee of $55,000, whichever is higher. Effective April 1, 2007, the Fund has agreed to pay a combined annual accounting and administrative services fee, as discussed under the "Administrator" section.
Distributor.
Invesco Aim Distributors, Inc. is the Distributor of the Fund's Shares. Its principal address is 11 Greenway Plaza, Suite 100, Houston, Texas 77046-1173. The Distributor has entered into a Distribution Agreement with the Trust pursuant to which it distributes Fund Shares. Shares are continuously offered for sale by the Fund through the Distributor only in Creation Unit Aggregations, as described in the Prospectus and below under the heading "Creation and Redemption of Creation Unit Aggregations."
14
12b-1 Plan
. The Trust has adopted a Distribution and Service Plan pursuant to Rule 12b-1 under the 1940 Act (the "Plan") pursuant to which the Fund may reimburse the Distributor up to a maximum annual rate of 0.25% of its average daily net assets. Under the Plan and as required by Rule 12b-1, the Trustees will receive and review after the end of each calendar quarter a written report provided by the Distributor of the amounts expended under the Plan and the purpose for which such expenditures were made.
The Plan was adopted in order to permit the implementation of the Fund's method of distribution. However, no such fee is currently charged to the Fund, and there are no plans in place to impose such a fee.
Aggregations.
Fund Shares in less than Creation Unit Aggregations are not distributed by the Distributor. The Distributor will deliver the Prospectus and, upon request, this SAI to persons purchasing Creation Unit Aggregations and will maintain records of both orders placed with it and confirmations of acceptance furnished by it. The Distributor is a broker-dealer registered under the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and a member of Financial Industry Regulatory Authority ("FINRA").
The Distribution Agreement for the Fund provides that it may be terminated as to the Fund at any time, without the payment of any penalty, on at least 60 days' written notice by the Trust to the Distributor (i) by vote of a majority of the Independent Trustees or (ii) by vote of a majority of the outstanding voting securities (as defined in the 1940 Act) of the Fund. The Distribution Agreement will terminate automatically in the event of its assignment (as defined in the 1940 Act).
The Distributor may also enter into agreements with securities dealers ("Soliciting Dealers") who will solicit purchases of Creation Unit Aggregations of Fund Shares. Such Soliciting Dealers may also be Participating Parties (as defined in "Procedures for Creation of Creation Unit Aggregations" below) and DTC Participants (as defined in "DTC Acts as Securities Depository" below).
Index Provider.
The Cleantech Index
TM
is the Underlying Index of the PowerShares Cleantech
TM
Portfolio.
Cleantech is the Index Provider for the PowerShares Cleantech
TM
Portfolio. There is no relationship between Cleantech and the Distributor, the Adviser or the Trust other than a license by Cleantech to the Adviser of certain Cleantech trademarks and trade names, and The Cleantech Index
TM
, for use by the Distributor, the Adviser and the Trust. Such trademarks, tradenames and The Cleantech Index
TM
have been created and developed by Cleantech without regard to the Distributor, the Adviser, the Trust, their businesses, the Fund and/or any prospective investor.
Cleantech makes no representation or warranty, express or implied, to the owners of fund shares or any member of the public regarding the advisability of investing in securities generally or in shares particularly. Cleantech's only relationship to the Distributor, the Adviser or the Trust is the licensing of certain Cleantech trademarks and trade names of Cleantech and The Cleantech Index
TM
, which are composed by Cleantech without regard to the Distributor, the Adviser or the Trust.
The Underlying Index is selected and calculated without regard to the Distributor, the Adviser, the Trust or any holders of shares. Cleantech has no obligation to take the needs of the Distributor, the Adviser, the Trust or the owners of shares into consideration in determining, composing or calculating the Underlying Index. Cleantech is not responsible for and have not participated in the determination of the prices and amount of shares or the timing of the issuance or sale of shares or in the determination of any financial calculations relating thereto. Cleantech has no obligation or liability in connection with the administration of the Trust, or marketing of the shares. Cleantech does not guarantee the accuracy and/or the completeness of the Underlying Index or any data included therein, and Cleantech shall have no liability for any errors, omissions, or interruptions therein. Cleantech makes no warranty, express or implied, as to results to be obtained by the Distributor, the Adviser, the Trust or owners of shares, or any other person or entity, from the use of the Underlying Index or any data included therein. Cleantech makes no express or implied warranties, and expressly disclaims all warranties of merchantability or fitness for a particular purpose or use with respect to the indices or any data included therein, the Fund, the Trust or the Shares. Without limiting any of the foregoing, in no event shall Cleantech have any liability for any special, punitive, indirect, or consequential damages (including lost profits) resulting from the use of the Underlying Index or any data included therein, the Fund, the Trust or the Shares, even if notified of the possibility of such damages. The Adviser does not guarantee the accuracy and/or the completeness of the
15
Underlying Index or any data included therein, and the Adviser shall have no liability for any errors, omissions, or interruptions therein. The Adviser makes no warranty, express or implied, as to results to be obtained by the Fund, owners of the Shares of the Fund or any other person or entity from the use of the Underlying Index or any data included therein. The Adviser makes no express or implied warranties, and expressly disclaims all warranties of merchantability or fitness for a particular purpose or use with respect to the Underlying Index or any data included therein. Without limiting any of the foregoing, in no event shall the Adviser have any liability for any special, punitive, direct, indirect or consequential damages (including lost profits) arising out of matters relating to the use of the Underlying Index even if notified of the possibility of such damages.
The Adviser does not guarantee the accuracy and/or the completeness of the Underlying Index or any data included therein, and the Adviser shall have no liability for any errors, omissions, or interruptions therein. The Adviser makes no warranty, express or implied, as to results to be obtained by the Fund, owners of the Shares of the Fund or any other person or entity from the use of the Underlying Index or any data included therein. The Adviser makes no express or implied warranties, and expressly disclaims all warranties of merchantability, title or fitness for a particular purpose or use with respect to the Underlying Index or any data included therein, Without limiting any of the foregoing, in no event shall the Adviser have any liability for any special, exemplary, punitive, direct, indirect or consequential damages (including lost profits), however caused and on any theory of liability, whether in contract, strict liability or tort (including negligence or otherwise), resulting from the use of the Underlying Index or any data included therein, even if notified of the possibility of such damages.
BROKERAGE TRANSACTIONS
The policy of the Trust regarding purchases and sales of securities is that primary consideration will be given to obtaining the most favorable prices and efficient executions of transactions. Consistent with this policy, when securities transactions are effected on a stock exchange, the Trust's policy is to pay commissions that are considered fair and reasonable without necessarily determining that the lowest possible commissions are paid in all circumstances. In seeking to determine the reasonableness of brokerage commissions paid in any transaction, the Adviser relies upon its experience and knowledge regarding commissions generally charged by various brokers. The sale of Fund Shares by a broker-dealer is not a factor in the selection of broker-dealers.
In seeking to implement the Trust's policies, the Adviser effects transactions with those brokers and dealers that the Adviser believes provide the most favorable prices and are capable of providing efficient executions. The Adviser does not currently participate in soft dollar transactions.
The Adviser assumes general supervision over placing orders on behalf of the Fund for the purchase or sale of portfolio securities. If purchases or sales of portfolio securities by the Fund and one or more other investment companies or clients supervised by the Adviser are considered at or about the same time, transactions in such securities are allocated among the Fund, the several investment companies and clients in a manner deemed equitable to all by the Adviser. In some cases, this procedure could have a detrimental effect on the price or volume of the security as far as the Fund is concerned. However, in other cases, it is possible that the ability to participate in volume transactions and to negotiate lower brokerage commissions will be beneficial to the Fund. The primary consideration is prompt execution of orders at the most favorable net price.
The aggregate brokerage commissions paid by the Fund during the Fund's fiscal years ended April 30, 2006, 2007 and 2008 are set forth in the chart below.
|
|
Brokerage Commissions
Paid for the Fiscal Year Ended
|
|
Fund
|
|
April 30, 2006
|
|
April 30, 2007
|
|
April 30, 2008
|
|
PowerShares Cleantech
TM
Portfolio
|
|
N/A
|
|
$
|
16,337
|
|
|
$
|
13,801
|
|
|
ADDITIONAL INFORMATION CONCERNING THE TRUST
The Trust is an open-end management investment company registered under the 1940 Act. The Trust was organized as a Massachusetts business trust on June 9, 2000.
16
The Trust is authorized to issue an unlimited number of shares in one or more series or "funds." The Trust currently offers shares of 75 funds. The Board of Trustees of the Trust has the right to establish additional series in the future, to determine the preferences, voting powers, rights and privileges thereof and to modify such preferences, voting powers, rights and privileges without shareholder approval.
Each Share issued by the Fund has a pro rata interest in the assets of the Fund. Fund Shares have no preemptive, exchange, subscription or conversion rights and are freely transferable. Each Share is entitled to participate equally in dividends and distributions declared by the Board with respect to the Fund, and in the net distributable assets of the Fund on liquidation.
Each Share has one vote with respect to matters upon which a shareholder vote is required consistent with the requirements of the 1940 Act and the rules promulgated thereunder. Shares of all funds, including the Fund, of the Trust vote together as a single class except as otherwise required by the 1940 Act, or if the matter being voted on affects only a particular fund, and, if a matter affects a particular fund differently from other funds, the shares of that fund will vote separately on such matter.
The Trust's Declaration of Trust provides that by becoming a shareholder of the Fund, each shareholder shall be expressly held to have agreed to be bound by the provisions of the Declaration. The Declaration may, except in limited circumstances, be amended or supplemented by the Trustees without shareholder vote. The holders of Fund shares are required to disclose information on direct or indirect ownership of Fund shares as may be required to comply with various laws applicable to the Fund, and ownership of Fund shares may be disclosed by the Fund if so required by law or regulation. The Trust's Declaration also provides that shareholders may not bring suit on behalf of the Fund without first requesting that the Trustees bring such suit unless there would be irreparable injury to the Fund, or if a majority of the Trustees have a personal financial interest in the action. Trustees are not considered to have a personal financial interest by virtue of being compensated for their services as Trustees.
The Trust is not required and does not intend to hold annual meetings of shareholders. Shareholders owning more than 10% of the outstanding shares of the Trust have the right to call a special meeting to remove one or more Trustees or for any other purpose.
Under Massachusetts law applicable to Massachusetts business trusts, shareholders of such a trust may, under certain circumstances, be held personally liable as partners for its obligations. However, the Declaration of Trust of the Trust contains an express disclaimer of shareholder liability for acts or obligations of the Trust and requires that notice of this disclaimer be given in each agreement, obligation or instrument entered into or executed by the Trust or the Trustees. The Trust's Declaration of Trust further provides for indemnification out of the assets and property of the Trust for all losses and expenses of any shareholder held personally liable for the obligations of the Trust. Thus, the risk of a shareholder incurring financial loss on account of shareholder liability is limited to circumstances in which both inadequate insurance existed and the Trust or Fund itself was unable to meet its obligations. The Trust believes the likelihood of the occurrence of these circumstances is remote.
The Trust does not have information concerning the beneficial ownership of Shares held by DTC Participants (as defined below).
Shareholders may make inquiries by writing to the Trust, c/o the Distributor, Invesco Aim Distributors, Inc., 11 Greenway Plaza, Suite 100, Houston, Texas 77046-1173.
Control Persons.
The following table sets forth the name, address and percentage of ownership of each person who is known by the Trust to own, of record or beneficially, 5% or more of the Fund's outstanding equity securities as of June 1, 2008:
Name & Address
|
|
% Owned
|
|
Charles Schwab & Co., Inc.
211
Main Street
San Francisco, CA 94105
|
|
|
14.80
%
|
|
|
National Financial Services LLC
200
Liberty Street
New York, NY 10281
|
|
|
11.51
%
|
|
|
17
Name & Address
|
|
% Owned
|
|
Merrill Lynch Professional
4
Corporate Place
Piscataway, NJ 08854
|
|
9.65
%
|
|
Citigroup Global Markets Inc.
333
W. 34th Street
New York, NY 10001
|
|
8.02
%
|
|
Pershing LLC
1
Pershing Plaza
Jersey City, NJ 07399
|
|
5.73
%
|
|
First Clearing, LLC
901
E. Byrd Street
Richmond, VA 23219
|
|
5.53
%
|
|
Book Entry Only System.
The following information supplements and should be read in conjunction with the section in the Prospectus entitled "Book Entry."
DTC acts as Securities Depository for Fund Shares. Shares of the Fund are represented by securities registered in the name of DTC or its nominee and deposited with, or on behalf of, DTC.
DTC, a limited-purpose trust company, was created to hold securities of its participants (the "DTC Participants") and to facilitate the clearance and settlement of securities transactions among the DTC Participants in such securities through electronic book-entry changes in accounts of the DTC Participants, thereby eliminating the need for physical movement of securities certificates. DTC Participants include securities brokers and dealers, banks, trust companies, clearing corporations and certain other organizations, some of whom (and/or their representatives) own DTC. More specifically, DTC is owned by a number of its DTC Participants and by the NYSE, the AMEX and FINRA. Access to the DTC system is also available to others such as banks, brokers, dealers and trust companies that clear through or maintain a custodial relationship with a DTC Participant, either directly or indirectly (the "Indirect Participants").
Beneficial ownership of Shares is limited to DTC Participants, Indirect Participants and persons holding interests through DTC Participants and Indirect Participants. Ownership of beneficial interests in Shares (owners of such beneficial interests are referred to herein as "Beneficial Owners") is shown on, and the transfer of ownership is effected only through, records maintained by DTC (with respect to DTC Participants) and on the records of DTC Participants (with respect to Indirect Participants and Beneficial Owners that are not DTC Participants). Beneficial Owners will receive from or through the DTC Participant a written confirmation relating to their purchase and sale of Shares.
Conveyance of all notices, statements and other communications to Beneficial Owners is effected as follows. Pursuant to the Depositary Agreement between the Trust and DTC, DTC is required to make available to the Trust upon request and for a fee to be charged to the Trust a listing of the Shares of the Fund held by each DTC Participant. The Trust shall inquire of each such DTC Participant as to the number of Beneficial Owners holding Shares, directly or indirectly, through such DTC Participant. The Trust shall provide each such DTC Participant with copies of such notice, statement or other communication, in such form, number and at such place as such DTC Participant may reasonably request, in order that such notice, statement or communication may be transmitted by such DTC Participant, directly or indirectly, to such Beneficial Owners. In addition, the Trust shall pay to each such DTC Participant a fair and reasonable amount as reimbursement for the expenses attendant to such transmittal, all subject to applicable statutory and regulatory requirements.
Fund distributions shall be made to DTC or its nominee, Cede & Co., as the registered holder of all Fund Shares. DTC or its nominee, upon receipt of any such distributions, shall immediately credit DTC Participants' accounts with payments in amounts proportionate to their respective beneficial interests in Shares of the Fund as shown on the records of DTC or its nominee. Payments by DTC Participants to Indirect Participants and Beneficial Owners of Shares held through such DTC Participants will be governed by standing instructions and
18
customary practices, as is now the case with securities held for the accounts of customers in bearer form or registered in a "street name," and will be the responsibility of such DTC Participants.
The Trust has no responsibility or liability for any aspect of the records relating to or notices to Beneficial Owners, or payments made on account of beneficial ownership interests in such Shares, or for maintaining, supervising or reviewing any records relating to such beneficial ownership interests, or for any other aspect of the relationship between DTC and the DTC Participants or the relationship between such DTC Participants and the Indirect Participants and Beneficial Owners owning through such DTC Participants.
DTC may decide to discontinue providing its service with respect to Shares at any time by giving reasonable notice to the Trust and discharging its responsibilities with respect thereto under applicable law. Under such circumstances, the Trust shall take action to find a replacement for DTC to perform its functions at a comparable cost.
Proxy Voting.
The Board of Trustees of the Trust has delegated responsibility for decisions regarding proxy voting for securities held by the Fund to the Adviser. The Adviser will vote such proxies in accordance with its proxy policies and procedures, which are included in Appendix A to this SAI. The Board of Trustees will periodically review the Fund's proxy voting record.
The Trust is required to disclose annually the Fund's complete proxy voting record on Form N-PX covering the period July 1 through June 30 and file it with the SEC no later than August 31. The Form N-PX for the Fund is available at no charge upon request by calling 800.983.0903 or by writing to PowerShares Exchange-Traded Fund Trust at 301 West Roosevelt Road, Wheaton, Illinois 60187. The Fund's Form N-PX is also available on the SEC's website at www.sec.gov.
Quarterly Portfolio Schedule.
The Trust is required to disclose, after its first and third fiscal quarters, the complete schedule of the Fund's portfolio holdings with the SEC on Form N-Q. The Trust also discloses a complete schedule of the Fund's portfolio holdings with the SEC on Form N-CSR after its second and fourth quarters. The Form N-Q for the Fund is available on the SEC's website at http://www.sec.gov. The Fund's Form N-Q may also be reviewed and copied at the SEC's Public Reference Room in Washington, D.C. and information on the operation of the Public Reference Room may be obtained by calling 202.942.8090. The Fund's Form N-Q is available without charge, upon request, by calling 630.933.9600 or 800.983.0903 or by writing to PowerShares Exchange-Traded Fund Trust at 301 West Roosevelt Road, Wheaton, Illinois 60187.
Portfolio Holdings Policy.
The Trust has adopted a policy regarding the disclosure of information about the Trust's portfolio holdings. The Board of Trustees of the Trust must approve all material amendments to this policy. The Fund's portfolio holdings are publicly disseminated each day the Fund is open for business through financial reporting and news services, including publicly accessible Internet web sites. In addition, a basket composition file, which includes the security names and share quantities to deliver in exchange for Fund shares, together with estimates and actual cash components, is publicly disseminated daily prior to the opening of the AMEX or NYSE, as applicable, via the National Securities Clearing Corporation ("NSCC"). The basket represents one Creation Unit of the Fund. The Trust, the Adviser and BONY will not disseminate non-public information concerning the Trust.
Codes of Ethics.
Pursuant to Rule 17j-1 under the 1940 Act, the Board of Trustees has adopted a Code of Ethics for the Trust and approved Codes of Ethics adopted by the Adviser and the Distributor (collectively the "Codes"). The Codes are intended to ensure that the interests of shareholders and other clients are placed ahead of any personal interest, that no undue personal benefit is obtained from the person's employment activities and that actual and potential conflicts of interest are avoided.
The Codes apply to the personal investing activities of Trustees and officers of the Trust, the Adviser and the Distributor ("Access Persons"). Rule 17j-1 and the Codes are designed to prevent unlawful practices in connection with the purchase or sale of securities by Access Persons. Under the Codes, Access Persons are permitted to engage in personal securities transactions, but are required to report their personal securities transactions for monitoring purposes. The Codes permit personnel subject to the Codes to invest in securities subject to certain limitations, including securities that may be purchased or held by the Fund. In addition, certain
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Access Persons are required to obtain approval before investing in initial public offerings or private placements. The Codes are on file with the SEC and are available to the public.
CREATION AND REDEMPTION OF CREATION UNIT AGGREGATIONS
Creation.
The Trust issues and sells Shares of the Fund only in Creation Unit Aggregations on a continuous basis through the Distributor, without a sales load, at their NAVs next determined after receipt, on any Business Day (as defined below), of an order in proper form.
A "Business Day" is any day on which the NYSE is open for business. As of the date of this SAI, the NYSE observes the following holidays: New Year's Day, Martin Luther King, Jr. Day, Washington's Birthday, Good Friday, Memorial Day, Independence Day, Labor Day, Thanksgiving Day and Christmas Day.
Deposit of Securities and Deposit or Delivery of Cash.
The consideration for purchase of Creation Unit Aggregations of the Fund generally consists of the in-kind deposit of a designated portfolio of equity securities, known as the "Deposit Securities," per each Creation Unit Aggregation constituting a substantial replication of the securities included in the Underlying Index ("Fund Securities") and an amount of cash, known as the "Cash Component," computed as described below. Together, the Deposit Securities and the Cash Component constitute the "Fund Deposit," which represents the minimum initial and subsequent investment amount for a Creation Unit Aggregation of the Fund.
The Cash Component is sometimes also referred to as the "Balancing Amount." The Cash Component serves the function of compensating for any differences between the NAV per Creation Unit Aggregation and the Deposit Amount (as defined below). The Cash Component is an amount equal to the difference between the NAV of the Fund Shares (per Creation Unit Aggregation) and the "Deposit Amount"an amount equal to the market value of the Deposit Securities. If the Cash Component is a positive number (i.e., the NAV per Creation Unit Aggregation exceeds the Deposit Amount), the creator will deliver the Cash Component. If the Cash Component is a negative number (i.e., the NAV per Creation Unit Aggregation is less than the Deposit Amount), the creator will receive the Cash Component.
The Custodian, through the NSCC (discussed below), makes available on each Business Day, prior to the opening of business on the AMEX (currently 9:30 a.m., Eastern time), the list of the names and the required number of shares of each Deposit Security to be included in the current Fund Deposit (based on information at the end of the previous Business Day) for the Fund.
Such Fund Deposit is applicable, subject to any adjustments as described below, in order to effect creations of Creation Unit Aggregations of the Fund until such time as the next announced composition of the Deposit Securities is made available.
The identity and number of shares of the Deposit Securities required for the Fund Deposit for the Fund changes as rebalancing adjustments and corporate action events are reflected within the Fund from time to time by the Adviser, with a view to the investment objective of the Fund. The composition of the Deposit Securities may also change in response to adjustments to the weighting or composition of the securities of the Underlying Index. In addition, the Trust reserves the right to permit or require the substitution of an amount of cashi.e., a "cash in lieu" amountto be added to the Cash Component to replace any Deposit Security that may not be available in sufficient quantity for delivery or that may not be eligible for transfer through the systems of DTC or the Clearing Process (discussed below), if any, or which might not be eligible for trading by an Authorized Participant (as defined below) or the investor for which it is acting or other relevant reason. Brokerage commissions incurred in connection with the acquisition of Deposit Securities not eligible for transfer through the systems of DTC, and hence not eligible for transfer through the Clearing Process (discussed below), if any, will be at the expense of the Fund and will affect the value of all Shares; but the Adviser, subject to the approval of the Board of Trustees, may adjust the transaction fee within the parameters described above to protect ongoing shareholders. The adjustments described above will reflect changes known to the Adviser on the date of announcement to be in effect by the time of delivery of the Fund Deposit, in the composition of the Underlying Index or resulting from certain corporate actions.
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In addition to the list of names and numbers of securities constituting the current Deposit Securities of the Fund Deposit, the Custodian, through the NSCC, also makes available on each Business Day, the estimated Cash Component, effective through and including the previous Business Day, per outstanding Creation Unit Aggregation of the Fund.
Procedures for Creation of Creation Unit Aggregations.
To be eligible to place orders with the Distributor and to create a Creation Unit Aggregation of the Fund, an entity must be (i) a "Participating Party," i.e., a broker dealer or other participant in the clearing process through the Continuous Net Settlement System of the NSCC (the "Clearing Process"), a clearing agency that is registered with the SEC; or (ii) a DTC Participant (see the Book Entry Only System section), and, in each case, must have executed an agreement with the Distributor, with respect to creations and redemptions of Creation Unit Aggregations ("Participant Agreement") (discussed below). A Participating Party and DTC Participant are collectively referred to as an "Authorized Participant." Investors should contact the Distributor for the names of Authorized Participants that have signed a Participant Agreement. All Fund Shares, however created, will be entered on the records of DTC in the name of Cede & Co. for the account of a DTC Participant.
All orders to create Creation Unit Aggregations must be received by the Distributor no later than the closing time of the regular trading session on the NYSE ("Closing Time") (ordinarily 4:00 p.m., Eastern time) in each case on the date such order is placed in order for creation of Creation Unit Aggregations to be effected based on the NAV of Shares of the Fund as next determined on such date after receipt of the order in proper form. In the case of custom orders, the order must be received by the Distributor no later than 3:00 p.m., Eastern time on the trade date. A custom order may be placed by an Authorized Participant in the event that the Trust permits or requires the substitution of an amount of cash to be added to the Cash Component to replace any Deposit Security which may not be available in sufficient quantity for delivery or which may not be eligible for trading by such Authorized Participant or the investor for which it is acting or other relevant reason. The date on which an order to create Creation Unit Aggregations (or an order to redeem Creation Unit Aggregations, as discussed below) is placed is referred to as the "Transmittal Date." Orders must be transmitted by an Authorized Participant by telephone or other transmission method acceptable to the Distributor pursuant to procedures set forth in the Participant Agreement, as described below (see the "Placement of Creation Orders Using Clearing Process" and the "Placement of Creation Orders Outside Clearing Process" sections). Severe economic or market disruptions or changes, or telephone or other communication failure may impede the ability to reach the Distributor or an Authorized Participant.
All orders from investors who are not Authorized Participants to create Creation Unit Aggregations shall be placed with an Authorized Participant, as applicable, in the form required by such Authorized Participant. In addition, the Authorized Participant may request the investor to make certain representations or enter into agreements with respect to the order, e.g., to provide for payments of cash, when required. Investors should be aware that their particular broker may not have executed a Participant Agreement and that, therefore, orders to create Creation Unit Aggregations of the Fund have to be placed by the investor's broker through an Authorized Participant that has executed a Participant Agreement. In such cases there may be additional charges to such investor. At any given time, there may be only a limited number of broker dealers that have executed a Participant Agreement. Those placing orders for Creation Unit Aggregations through the Clearing Process should afford sufficient time to permit proper submission of the order to the Distributor prior to the Closing Time on the Transmittal Date. Orders for Creation Unit Aggregations that are effected outside the Clearing Process are likely to require transmittal by the DTC Participant earlier on the Transmittal Date than orders effected using the Clearing Process. Those persons placing orders outside the Clearing Process should ascertain the deadlines applicable to DTC and the Federal Reserve Bank wire system by contacting the operations department of the broker or depository institution effectuating such transfer of Deposit Securities and Cash Component.
For domestic securities, orders to create Creation Units of the Fund may be placed through the Clearing Process utilizing procedures applicable to domestic funds ("Domestic Funds") (see "Placement of Creation Orders Using Clearing Process") or outside the Clearing Process utilizing the procedures applicable to domestic funds. For foreign securities orders, most will be placed outside of the clearing process utilizing the procedures
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applicable for foreign funds (see "Placement of Creation Orders Outside Clearing ProcessDomestic Funds" and "Placement of Creation Orders Outside Clearing ProcessForeign Funds").
Placement of Creation Orders Using Clearing Process.
The Clearing Process is the process of creating or redeeming Creation Unit Aggregations through the Continuous Net Settlement System of the NSCC. Fund Deposits made through the Clearing Process must be delivered through a Participating Party that has executed a Participant Agreement. The Participant Agreement authorizes the Distributor to transmit through the Custodian to NSCC, on behalf of the Participating Party, such trade instructions as are necessary to effect the Participating Party's creation order. Pursuant to such trade instructions to NSCC, the Participating Party agrees to deliver the requisite Deposit Securities and the Cash Component to the Trust, together with such additional information as may be required by the Distributor. An order to create Creation Unit Aggregations through the Clearing Process is deemed received by the Distributor on the Transmittal Date if (i) such order is received by the Distributor not later than the Closing Time on such Transmittal Date and (ii) all other procedures set forth in the Participant Agreement are properly followed.
Placement of Creation Orders Outside Clearing ProcessDomestic Funds.
Fund Deposits made outside the Clearing Process must be delivered through a DTC Participant that has executed a Participant Agreement pre-approved by the Adviser and the Distributor. A DTC Participant who wishes to place an order creating Creation Unit Aggregations to be effected outside the Clearing Process does not need to be a Participating Party, but such orders must state that the DTC Participant is not using the Clearing Process and that the creation of Creation Unit Aggregations will instead be effected through a transfer of securities and cash directly through DTC. The Fund Deposit transfer must be ordered by the DTC Participant on the Transmittal Date in a timely fashion so as to ensure the delivery of the requisite number of Deposit Securities through DTC to the account of the Fund by no later than 11:00 a.m., Eastern time, of the next Business Day immediately following the Transmittal Date.
All questions as to the number of Deposit Securities to be delivered, and the validity, form and eligibility (including time of receipt) for the deposit of any tendered securities, will be determined by the Trust, whose determination shall be final and binding. The amount of cash equal to the Cash Component must be transferred directly to the Custodian through the Federal Reserve Bank wire transfer system in a timely manner so as to be received by the Custodian no later than 2:00 p.m., Eastern time, on the next Business Day immediately following such Transmittal Date. An order to create Creation Unit Aggregations outside the Clearing Process is deemed received by the Distributor on the Transmittal Date if (i) such order is received by the Distributor not later than the Closing Time on such Transmittal Date; and (ii) all other procedures set forth in the Participant Agreement are properly followed. However, if the Custodian does not receive both the required Deposit Securities and the Cash Component by 11:00 a.m. and 2:00 p.m., Eastern time, respectively, on the next Business Day immediately following the Transmittal Date, such order will be canceled. Upon written notice to the Distributor, such canceled order may be resubmitted the following Business Day using the Fund Deposit as newly constituted to reflect the then current Deposit Securities and Cash Component. The delivery of Creation Unit Aggregations so created will occur no later than the third (3rd) Business Day following the day on which the purchase order is deemed received by the Distributor.
Additional transaction fees may be imposed with respect to transactions effected outside the Clearing Process (through a DTC participant) and in the limited circumstances in which any cash can be used in lieu of Deposit Securities to create Creation Units. (See "Creation Transaction Fee" section below.)
Placement of Creation Orders Outside Clearing ProcessForeign Funds.
A standard creation order must be placed by 4:00 p.m., Eastern time, for purchases of Shares. In the case of custom orders, the order must be received by the Distributor no later than 3:00 p.m., Eastern time. The Distributor will inform the Transfer Agent, the Adviser and the Custodian upon receipt of a creation order. The Custodian will then provide such information to the appropriate sub-custodian.
The Custodian shall cause the sub-custodian for the Fund to maintain an account into which the Authorized Participant shall deliver, on behalf of itself or the party on whose behalf it is acting, the securities included in the Fund Deposit (or the cash value of all or part of such of such securities, in the case of a permitted or required
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cash purchase or "cash in lieu" amount), with any appropriate adjustments as advised by the Trust. Deposit Securities must be delivered to an account maintained at the applicable local sub-custodian(s). Orders to purchase Creation Unit Aggregations must be received by the Distributor from an Authorized Participant on its behalf or another investor's behalf by the closing time of the regular trading session on the Exchange on the relevant Business Day. However, when a relevant local market is closed due to local market holidays, the local market settlement process will not commence until the end of the local holiday period. Settlement must occur by 2:00 p.m., Eastern time, on the contractual settlement date.
The Authorized Participant must also make available no later than 2:00 p.m., Eastern time, on the contractual settlement date, by means approved by the Trust, immediately available or same day funds sufficient to the Trust to pay the Cash Component next determined after acceptance of the purchase order, together with the applicable purchase transaction fee. Any excess funds will be returned following settlement of the issue of the Creation Unit Aggregation.
In accordance with the Fund's Participant Agreement, Creation Unit Aggregations will be issued to an Authorized Participant, notwithstanding the fact that the corresponding Fund Deposits have not been received in part or in whole, in reliance on the undertaking of the Authorized Participant to deliver the missing Deposit Securities as soon as possible, which undertaking shall be secured by the Authorized Participant's delivery and maintenance of collateral consisting of cash in the form of U.S. dollars in immediately available funds having a value (marked-to-market daily) at least equal to 115%, which the Investment Adviser may change from time to time of the value of the missing Deposit Securities. Such cash collateral must be delivered no later than 2:00 p.m., Eastern time, on the contractual settlement date. The Participant Agreement will allow the Fund to purchase the missing Deposit Securities at any time and will subject the Authorized Participant to liability for any shortfall between the cost to the Trust of purchasing such securities and the value of the collateral.
Acceptance of Orders for Creation Unit Aggregations.
The Trust reserves the absolute right to reject a creation order transmitted to it by the Distributor in respect of the Fund if: (i) the order is not in proper form; (ii) the investor(s), upon obtaining the Fund Shares ordered, would own 80% or more of the currently outstanding shares of the Fund; (iii) the Deposit Securities delivered are not as disseminated for that date by the Custodian, as described above; (iv) acceptance of the Deposit Securities would have certain adverse tax consequences to the Fund; (v) acceptance of the Fund Deposit would, in the opinion of counsel, be unlawful; (vi) acceptance of the Fund Deposit would otherwise, in the discretion of the Trust or the Adviser, have an adverse effect on the Trust or the rights of beneficial owners; or (vii) in the event that circumstances outside the control of the Trust, the Custodian, the Distributor and the Adviser make it for all practical purposes impossible to process creation orders. Examples of such circumstances include acts of God; public service or utility problems such as fires, floods, extreme weather conditions and power outages resulting in telephone, telecopy and computer failures; market conditions or activities causing trading halts; systems failures involving computer or other information systems affecting the Trust, the Adviser, the Distributor, DTC, NSCC, the Custodian or sub-custodian or any other participant in the creation process, and similar extraordinary events. The Distributor shall notify a prospective creator of a Creation Unit and/or the Authorized Participant acting on behalf of such prospective creator of its rejection of the order of such person. The Trust, the Custodian, any sub-custodian and the Distributor are under no duty, however, to give notification of any defects or irregularities in the delivery of Fund Deposits nor shall any of them incur any liability for the failure to give any such notification.
All questions as to the number of shares of each security in the Deposit Securities and the validity, form, eligibility, and acceptance for deposit of any securities to be delivered shall be determined by the Trust, and the Trust's determination shall be final and binding.
Creation Transaction Fee.
Investors placing orders through Authorized Participants will be required to pay a fixed creation transaction fee, described below, payable to BONY regardless of the number of creations made each day. An additional charge of up to four times the fixed transaction fee (expressed as a percentage of the value of the Deposit Securities) may be imposed for cash creations (to offset the Trust's brokerage and other transaction costs associated with using cash to purchase the requisite Deposit Securities). Authorized Participants are responsible for the costs of transferring the securities constituting the Deposit Securities to the account of the Trust.
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The Standard Creation/Redemption Transaction Fee for the Fund is $1,000. The Maximum Creation/Redemption Transaction Fee the Fund is $4,000.
Redemption of Fund Shares in Creation Units Aggregations.
Fund Shares may be redeemed only in Creation Unit Aggregations at their NAV next determined after receipt of a redemption request in proper form by the Fund through the Transfer Agent and only on a Business Day. The Fund will not redeem Shares in amounts less than Creation Unit Aggregations. Beneficial owners must accumulate enough Shares in the secondary market to constitute a Creation Unit Aggregation in order to have such Shares redeemed by the Trust. There can be no assurance, however, that there will be sufficient liquidity in the public trading market at any time to permit assembly of a Creation Unit Aggregation. Investors placing orders through Authorized Participants should expect to incur brokerage and other costs in connection with assembling a sufficient number of Fund Shares to constitute a redeemable Creation Unit Aggregation.
With respect to the Fund, the Custodian, through the NSCC, makes available prior to the opening of business on the Exchange (currently 9:30 a.m., Eastern time) on each Business Day, the identity of the Fund Securities that will be applicable (subject to possible amendment or correction) to redemption requests received in proper form (as described below) on that day. Fund Securities received on redemption may not be identical to Deposit Securities that are applicable to creations of Creation Unit Aggregations.
Unless cash redemptions are available or specified for the Fund, the redemption proceeds for a Creation Unit Aggregation generally consist of Fund Securitiesas announced on the Business Day of the request for redemption received in proper formplus or minus cash in an amount equal to the difference between the NAV of the Fund Shares being redeemed, as next determined after a receipt of a request in proper form, and the value of the Fund Securities (the "Cash Redemption Amount"), less a redemption transaction fee as listed above. In the event that the Fund Securities have a value greater than the NAV of the Fund Shares, a compensating cash payment equal to the difference is required to be made by or through an Authorized Participant by the redeeming shareholder.
The right of redemption may be suspended or the date of payment postponed (i) for any period during which the Exchange is closed (other than customary weekend and holiday closings); (ii) for any period during which trading on the Exchange is suspended or restricted; (iii) for any period during which an emergency exists as a result of which disposal of the Shares of the Fund or determination of the Fund's NAV is not reasonably practicable; or (iv) in such other circumstances as is permitted by the SEC.
Redemption Transaction Fee.
A redemption transaction fee is imposed on investors placing orders through Authorized Participants to offset transfer and other transaction costs that may be incurred by the Fund. An additional variable charge for cash redemptions (when cash redemptions are available or specified) for the Fund may be imposed. Authorized Participants will also bear the costs of transferring the Fund Securities from the Trust to their account or on their order. Investors who use the services of a broker or other such intermediary in addition to an Authorized Participant to effect a redemption of a Creation Unit Aggregation may be charged an additional fee of up to four times the fixed transaction fee for such services. The Redemption Transaction Fee for the Fund is the same as the Creation Transaction Fee set forth above.
Placement of Redemption Orders Using Clearing Process.
Orders to redeem Creation Unit Aggregations must be delivered through an Authorized Participant that has executed a Participant Agreement. Investors other than Authorized Participants are responsible for making arrangements for an order to redeem to be made through an Authorized Participant. An order to redeem Creation Unit Aggregations is deemed received by the Trust on the Transmittal Date if: (i) such order is received by the Custodian not later than the Closing Time on the Transmittal Date; and (ii) all other procedures set forth in the Participant Agreement are properly followed.
An order to redeem Creation Unit Aggregations using the Clearing Process made in proper form but received by the Trust after 4:00 p.m., Eastern time, will be deemed received on the next Business Day immediately following the Transmittal Date and will be effected at the NAV next determined on such next Business Day. The requisite Fund Securities and the Cash Redemption Amount will be transferred by the third NSCC Business Day following the date on which such request for redemption is deemed received.
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Placement of Redemption Orders Outside Clearing ProcessDomestic Funds.
Orders to redeem Creation Unit Aggregations outside the Clearing Process must be delivered through a DTC Participant that has executed the Participant Agreement. A DTC Participant who wishes to place an order for redemption of Creation Unit Aggregations to be effected outside the Clearing Process does not need to be a Participating Party, but such orders must state that the DTC Participant is not using the Clearing Process and that redemption of Creation Unit Aggregations will instead be effected through transfer of Fund Shares directly through DTC. An order to redeem Creation Unit Aggregations outside the Clearing Process is deemed received by the Trust on the Transmittal Date if (i) such order is received by the Transfer Agent not later than 4:00 p.m., Eastern time on such Transmittal Date; (ii) such order is accompanied or followed by the requisite number of Shares of the Fund, which delivery must be made through DTC to the Custodian no later than 11:00 a.m., Eastern time (for the Fund Shares), on the next Business Day immediately following such Transmittal Date (the "DTC Cut-Off-Time") and 2:00 p.m., Eastern time, for any Cash Component, if any owed to the Fund; and (iii) all other procedures set forth in the Participant Agreement are properly followed. After the Trust has deemed an order for redemption outside the Clearing Process received, the Trust will initiate procedures to transfer the requisite Fund Securities which are expected to be delivered within three Business Days and the Cash Redemption Amount, if any owed to the redeeming Beneficial Owner to the Authorized Participant on behalf of the redeeming Beneficial Owner by the third Business Day following the Transmittal Date on which such redemption order is deemed received by the Trust.
Placement of Redemption Orders Outside Clearing ProcessForeign Funds.
A standard order for redemption must be received by 4:00 p.m., Eastern time, for redemptions of Shares. In the case of custom redemptions, the order must be received by the Distributor no later than 3:00 p.m., Eastern time. Arrangements satisfactory to the Trust must be in place for the Participating Party to transfer the Creation Units through DTC on or before the settlement date. Redemptions of Shares for Fund Securities will be subject to compliance with applicable U.S. federal and state securities laws and the Fund (whether or not it otherwise permits cash redemptions) reserves the right to redeem Creation Units for cash to the extent that the Fund could not lawfully deliver specific Fund Securities upon redemptions or could not do so without first registering the Deposit Securities under such laws.
The delivery of Fund Securities to redeeming Authorized Participants generally will be made within three Business Days. However, due to the schedule of holidays in certain countries, the delivery of in-kind redemption proceeds may take longer than three Business Days after the day on which the redemption request is received in proper form. In such cases, the local market settlement procedures will not commence until the end of the local holiday periods. See "Regular Holidays" for a list of the local holidays in the foreign countries relevant to the Fund.
A redeeming Beneficial Owner, or Authorized Participant action on behalf of such Beneficial Owner, when taking delivery of shares of Fund Securities upon redemption of shares of the Fund must maintain appropriate security arrangements with a qualified broker-dealer, bank or other custody provider in each jurisdiction in which any of the Fund Securities are customarily traded, to which account the Fund Securities will be delivered.
In accordance with the relevant Authorized Participant's agreement, in the event that the Authorized Participant has submitted a redemption request in proper form but is unable to transfer all or part of the Creation Unit Aggregation to be redeemed to the Fund's Transfer Agent, the Distributor will nonetheless accept the redemption request in reliance on the undertaking by the Authorized Participant to deliver the missing shares as soon as possible. Such undertaking shall be secured by the Authorized Participant to deliver the missing shares as soon as possible. Such understanding shall be secured by the Authorized Participant's delivery and maintenance of collateral consisting of cash having a value (marked-to-market daily) at least equal to 115% of the value of the missing shares, which the Investment Adviser may change from time to time.
The current procedures for collateralization of missing shares require, among other things, that any cash collateral shall be in the form of U.S. dollars in immediately-available funds and shall be held by the Custodian and marked-to-market daily, and that the fees of the Custodian and any relevant sub-custodians in respect of the delivery, maintenance and redelivery of the cash collateral shall be payable by the Authorized Participant. The Authorized Participant's agreement will permit the Trust, on behalf of the relevant Fund, to purchase the missing shares or acquire the Deposit Securities and the Cash Component underlying such shares at any time and will
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subject the Authorized Participant to liability for any shortfall between the cost to the Trust of purchasing such shares, Deposit Securities or Cash Component, and the value of the collateral.
The calculation of the value of the Fund Securities and the Cash Redemption Amount to be delivered/received upon redemption will be made by the Custodian according to the procedures set forth under Determination of NAV computed on the Business Day on which a redemption order is deemed received by the Trust. Therefore, if a redemption order in proper form is submitted to the Transfer Agent by a DTC Participant not later than Closing Time on the Transmittal Date, and the requisite number of Shares of the Fund are delivered to the Custodian prior to the DTC Cut-Off-Time, then the value of the Fund Securities and the Cash Redemption Amount to be delivered/received will be determined by the Custodian on such Transmittal Date. If, however, a redemption order is submitted to the Custodian by a DTC Participant not later than the Closing Time on the Transmittal Date, but either (i) the requisite number of Shares of the relevant Fund are not delivered by the DTC Cut-Off-Time, as described above, on the Transmittal Date, or (ii) the redemption order is not submitted in proper form, then the redemption order will not be deemed received as of the Transmittal Date. In such case, the value of the Fund Securities and the Cash Redemption Amount to be delivered/received will be computed on the Business Day that the order is deemed received by the Trust, i.e., the Business Day on which the Fund Shares of the relevant Fund are delivered through DTC to the Custodian by the DTC Cut-Off-Time on such Business Day pursuant to a properly submitted redemption order.
If it is not possible to effect deliveries of the Fund Securities, the Trust may in its discretion exercise its option to redeem such Fund Shares in cash, and the redeeming Beneficial Owner will be required to receive its redemption proceeds in cash. In addition, an Authorized Participant may request a redemption in cash that the Fund may, in its sole discretion, permit. In either case, the Authorized Participant will receive a cash payment equal to the NAV of its Fund Shares based on the NAV of Shares of the relevant Fund next determined after the redemption request is received in proper form (minus a redemption transaction fee and additional charge for requested cash redemptions specified above, to offset the Fund's brokerage and other transaction costs associated with the disposition of Fund Securities). The Fund may also, in its sole discretion, upon request of a shareholder, provide such redeeming shareholder a portfolio of securities that differs from the exact composition of the Fund Securities, or cash-in-lieu of some securities added to the Cash Component, but in no event will the total value of the securities delivered and the cash transmitted differ from the NAV. Redemptions of Fund Shares for Fund Securities will be subject to compliance with applicable federal and state securities laws and the Fund (whether or not it otherwise permits cash redemptions) reserves the right to redeem Creation Unit Aggregations for cash to the extent that the Trust could not lawfully deliver specific Fund Securities upon redemptions or could not do so without first registering the Fund Securities under such laws. An Authorized Participant or an investor for which it is acting subject to a legal restriction with respect to a particular security included in the Fund Securities applicable to the redemption of a Creation Unit Aggregation may be paid an equivalent amount of cash. The Authorized Participant may request the redeeming Beneficial Owner of the Fund Shares to complete an order form or to enter into agreements with respect to such matters as compensating cash payment, beneficial ownership of shares or delivery instructions.
Regular Holidays.
The Fund generally intends to effect deliveries of Creation Units and Portfolio Securities on a basis of "T" plus three Business Days (i.e., days on which the national securities exchange is open). The Fund may effect deliveries of Creation Units and Portfolio Securities on a basis other than T plus three in order to accommodate local holiday schedules, to account for different treatment among foreign and U.S. markets of dividend record dates and ex-dividend dates or under certain other circumstances. The ability of the Trust to effect in-kind creations and redemptions within three Business Days of receipt of an order in good form is subject, among other things, to the condition that, within the time period from the date of the order to the date of delivery of the securities, there are no days that are holidays in the applicable foreign market. For every occurrence of one or more intervening holidays in the applicable foreign market that are not holidays observed in the U.S. equity market, the redemption settlement cycle will be extended by the number of such intervening holidays. In addition to holidays, other unforeseeable closings in a foreign market due to emergencies may also prevent the Trust from delivering securities within normal settlement period.
26
The securities delivery cycles currently practicable for transferring portfolio securities to redeeming Authorized Participants, coupled with foreign market holiday schedules, will require a delivery process longer than seven calendar days for the Fund, in certain circumstances. The holidays applicable to the Fund during such periods are listed below, as are instances where more than seven days will be needed to deliver redemption proceeds. Although certain holidays may occur on different dates in subsequent years, the number of days required to deliver redemption proceeds in any given year is not expected to exceed the maximum number of days listed below for the Fund. The proclamation of new holidays, the treatment by market participants of certain days as "informal holidays" (e.g., days on which no or limited securities transactions occur, as a result of substantially shortened trading hours), the elimination of existing holidays or changes in local securities delivery practices, could affect the information set forth herein at some time in the future.
The dates in calendar year 2008 in which the regular holidays affecting the relevant securities markets of the below listed countries are as follows:
ARGENTINA
|
|
Jan.1
|
|
May 1
|
|
Nov. 6
|
|
|
|
|
March 20
|
|
June 6
|
|
Dec. 24
|
|
|
|
|
March 21
|
|
July 9
|
|
Dec. 25
|
|
|
|
|
March 31
|
|
August 18
|
|
Dec. 31
|
|
|
|
|
AUSTRALIA
|
|
Jan.1
|
|
March 21
|
|
May 19
|
|
August 13
|
|
|
Jan.28
|
|
March 24
|
|
June 2
|
|
October 6
|
|
|
March 3
|
|
April 25
|
|
June 9
|
|
Nov. 4
|
|
|
March 10
|
|
May 5
|
|
August 4
|
|
Dec. 25
|
|
|
|
|
|
|
|
|
Dec. 26
|
|
|
AUSTRIA
|
|
Jan.1
|
|
May 12
|
|
Dec. 24
|
|
|
|
|
March 21
|
|
May 22
|
|
Dec. 25
|
|
|
|
|
March 24
|
|
August 15
|
|
Dec. 26
|
|
|
|
|
May 1
|
|
Dec. 8
|
|
Dec. 31
|
|
|
|
|
BELGIUM
|
|
Jan.1
|
|
May 2
|
|
Nov. 11
|
|
|
|
|
March 21
|
|
May 17
|
|
Dec. 25
|
|
|
|
|
March 24
|
|
July 21
|
|
Dec. 26
|
|
|
|
|
May 1
|
|
August 15
|
|
|
|
|
|
|
BRAZIL
|
|
Jan.1
|
|
March 21
|
|
July 9
|
|
Dec. 31
|
|
|
Jan.25
|
|
April 21
|
|
Nov. 20
|
|
|
|
|
Feb. 4
|
|
May 1
|
|
Dec. 24
|
|
|
|
|
Feb. 5
|
|
May 22
|
|
Dec. 25
|
|
|
|
|
CANADA
|
|
Jan.1
|
|
May 21
|
|
Sept. 3
|
|
Dec. 26
|
|
|
Jan.2
|
|
June 25
|
|
October 8
|
|
|
|
|
Feb. 19
|
|
July 2
|
|
Nov. 12
|
|
|
|
|
April 6
|
|
August 6
|
|
Dec. 25
|
|
|
|
|
CHILE
|
|
Jan.1
|
|
August 15
|
|
Dec. 25
|
|
|
|
|
March 21
|
|
Sept. 18
|
|
Dec. 31
|
|
|
|
|
May 1
|
|
Sept. 19
|
|
|
|
|
|
|
May 21
|
|
Dec. 8
|
|
|
|
|
|
|
27
CHINA
|
|
Jan.1
|
|
Feb. 11
|
|
May 7
|
|
October 6
|
|
|
Jan.21
|
|
Feb. 12
|
|
May 26
|
|
October 7
|
|
|
Feb. 4
|
|
Feb. 13
|
|
July 4
|
|
October 13
|
|
|
Feb. 5
|
|
May 1
|
|
Sept. 1
|
|
Nov. 11
|
|
|
Feb. 6
|
|
May 2
|
|
October 1
|
|
Nov. 27
|
|
|
Feb. 7
|
|
May 5
|
|
October 2
|
|
Dec. 25
|
|
|
Feb. 8
|
|
May 6
|
|
October 3
|
|
|
|
|
DENMARK
|
|
Jan.1
|
|
April 18
|
|
Dec. 24
|
|
|
|
|
March 20
|
|
May 1
|
|
Dec. 25
|
|
|
|
|
March 21
|
|
May 12
|
|
Dec. 26
|
|
|
|
|
March 24
|
|
June 5
|
|
Dec. 31
|
|
|
|
|
FINLAND
|
|
Jan.1
|
|
June 20
|
|
Dec. 31
|
|
|
|
|
March 21
|
|
Dec. 24
|
|
|
|
|
|
|
March 24
|
|
Dec. 25
|
|
|
|
|
|
|
May 1
|
|
Dec. 26
|
|
|
|
|
|
|
FRANCE
|
|
Jan.1
|
|
May 8
|
|
Dec. 25
|
|
|
|
|
March 21
|
|
June 14
|
|
Dec. 26
|
|
|
|
|
March 24
|
|
August 15
|
|
|
|
|
|
|
May 1
|
|
Nov. 11
|
|
|
|
|
|
|
GERMANY
|
|
Jan.1
|
|
May 1
|
|
October 3
|
|
Dec. 31
|
|
|
Feb. 4
|
|
May 12
|
|
Dec. 24
|
|
|
|
|
March 21
|
|
May 22
|
|
Dec. 25
|
|
|
|
|
March 24
|
|
August 15
|
|
Dec. 26
|
|
|
|
|
GREECE
|
|
Jan.1
|
|
March 25
|
|
June 16
|
|
Dec. 26
|
|
|
March 10
|
|
April 25
|
|
August 15
|
|
|
|
|
March 21
|
|
April 28
|
|
October 28
|
|
|
|
|
March 24
|
|
May 1
|
|
Dec. 25
|
|
|
|
|
HONG KONG
|
|
Jan.1
|
|
March 24
|
|
July 1
|
|
Dec. 25
|
|
|
Feb. 6
|
|
April 4
|
|
Sept. 15
|
|
Dec. 26
|
|
|
Feb. 7
|
|
May 1
|
|
October 1
|
|
Dec. 31
|
|
|
Feb. 8
|
|
May 12
|
|
October 7
|
|
|
|
|
March 21
|
|
June 9
|
|
Dec. 24
|
|
|
|
|
INDONESIA
|
|
Jan.1
|
|
April 7
|
|
Sept. 29
|
|
Dec. 25
|
|
|
Jan.10
|
|
May 1
|
|
October 1
|
|
Dec. 26
|
|
|
Jan.11
|
|
May 20
|
|
October 2
|
|
Dec. 29
|
|
|
Feb. 7
|
|
July 28
|
|
October 3
|
|
Dec. 31
|
|
|
March 20
|
|
July 30
|
|
Dec. 8
|
|
|
|
|
March 21
|
|
August 18
|
|
Dec. 24
|
|
|
|
|
IRELAND
|
|
Jan.1
|
|
May 1
|
|
October 27
|
|
Dec. 29
|
|
|
March 17
|
|
May 5
|
|
Dec. 24
|
|
|
|
|
March 21
|
|
June 2
|
|
Dec. 25
|
|
|
|
|
March 24
|
|
August 4
|
|
Dec. 26
|
|
|
|
|
28
ITALY
|
|
Jan.1
|
|
June 2
|
|
Dec. 25
|
|
|
|
|
March 21
|
|
August 15
|
|
Dec. 26
|
|
|
|
|
April 25
|
|
Dec. 8
|
|
Dec. 31
|
|
|
|
|
May 1
|
|
Dec. 24
|
|
|
|
|
|
|
JAPAN
|
|
Jan.1
|
|
Feb. 11
|
|
July 21
|
|
Nov. 3
|
|
|
Jan.2
|
|
March 20
|
|
Sept. 15
|
|
Nov. 24
|
|
|
Jan.3
|
|
April 29
|
|
Sept. 23
|
|
Dec. 23
|
|
|
Jan.14
|
|
May 5
|
|
October 13
|
|
Dec. 31
|
|
|
MALAYSIA
|
|
Jan.1
|
|
March 20
|
|
Sept. 1
|
|
Dec. 8
|
|
|
Jan.10
|
|
May 1
|
|
October 1
|
|
Dec. 25
|
|
|
Feb. 1
|
|
May 19
|
|
October 2
|
|
Dec. 29
|
|
|
Feb. 6
|
|
May 20
|
|
October 3
|
|
|
|
|
Feb. 7
|
|
May 30
|
|
October 27
|
|
|
|
|
Feb. 8
|
|
June 7
|
|
October 28
|
|
|
|
|
MEXICO
|
|
Jan.1
|
|
March 21
|
|
Nov. 20
|
|
|
|
|
Feb. 4
|
|
May 1
|
|
Dec. 12
|
|
|
|
|
March 17
|
|
Sept. 16
|
|
Dec. 25
|
|
|
|
|
March 20
|
|
Nov. 17
|
|
|
|
|
|
|
NETHERLANDS
|
|
Jan.1
|
|
May 1
|
|
|
|
|
|
|
March 21
|
|
May 12
|
|
|
|
|
|
|
March 24
|
|
Dec. 25
|
|
|
|
|
|
|
April 30
|
|
Dec. 26
|
|
|
|
|
|
|
NEW ZEALAND
|
|
Jan.1
|
|
Feb. 6
|
|
June 2
|
|
|
|
|
Jan.2
|
|
March 21
|
|
October 27
|
|
|
|
|
Jan.21
|
|
March 24
|
|
Dec. 25
|
|
|
|
|
Jan.28
|
|
April 25
|
|
Dec. 26
|
|
|
|
|
NORWAY
|
|
Jan.1
|
|
May 1
|
|
Dec. 26
|
|
|
|
|
March 20
|
|
May 12
|
|
Dec. 31
|
|
|
|
|
March 21
|
|
Dec. 24
|
|
|
|
|
|
|
March 24
|
|
Dec. 25
|
|
|
|
|
|
|
PHILIPPINES
|
|
Jan.1
|
|
June 12
|
|
Dec. 25
|
|
|
|
|
Feb. 25
|
|
August 21
|
|
Dec. 30
|
|
|
|
|
March 20
|
|
October 1
|
|
Dec. 31
|
|
|
|
|
March 21
|
|
Dec. 24
|
|
|
|
|
|
|
PORTUGAL
|
|
Jan.1
|
|
April 25
|
|
June 13
|
|
Dec. 25
|
|
|
Feb. 5
|
|
May 1
|
|
Dec. 1
|
|
Dec. 26
|
|
|
March 21
|
|
May 22
|
|
Dec. 8
|
|
|
|
|
March 24
|
|
June 10
|
|
Dec. 24
|
|
|
|
|
SINGAPORE
|
|
Jan.1
|
|
May 1
|
|
October 1
|
|
Dec. 17
|
|
|
Feb. 7
|
|
May 19
|
|
October 27
|
|
Dec. 25
|
|
|
Feb. 8
|
|
May 20
|
|
October 28
|
|
|
|
|
March 21
|
|
August 9
|
|
Dec. 8
|
|
|
|
|
29
SOUTH AFRICA
|
|
Jan.1
|
|
May 1
|
|
Dec. 25
|
|
|
|
|
March 21
|
|
June 16
|
|
Dec. 26
|
|
|
|
|
March 24
|
|
Sept. 24
|
|
|
|
|
|
|
April 28
|
|
Dec. 16
|
|
|
|
|
|
|
SOUTH KOREA
|
|
Jan.1
|
|
April 10
|
|
July 17
|
|
Dec. 31
|
|
|
Feb. 6
|
|
May 1
|
|
August 15
|
|
|
|
|
Feb. 7
|
|
May 5
|
|
Sept. 5
|
|
|
|
|
Feb. 8
|
|
May 12
|
|
October 3
|
|
|
|
|
April 9
|
|
June 6
|
|
Dec. 25
|
|
|
|
|
SPAIN
|
|
Jan.1
|
|
March 24
|
|
July 25
|
|
Dec. 26
|
|
|
Jan.7
|
|
May 1
|
|
August 15
|
|
|
|
|
March 20
|
|
May 2
|
|
Dec. 8
|
|
|
|
|
March 21
|
|
May 15
|
|
Dec. 25
|
|
|
|
|
SWEDEN
|
|
Jan.1
|
|
June 6
|
|
Dec. 26
|
|
|
|
|
March 21
|
|
June 20
|
|
Dec. 31
|
|
|
|
|
March 24
|
|
Dec. 24
|
|
|
|
|
|
|
May 1
|
|
Dec. 25
|
|
|
|
|
|
|
SWITZERLAND
|
|
Jan.1
|
|
May 1
|
|
Sept. 11
|
|
Dec. 31
|
|
|
Jan.2
|
|
May 12
|
|
Dec. 8
|
|
|
|
|
March 19
|
|
May 22
|
|
Dec. 24
|
|
|
|
|
March 21
|
|
August 1
|
|
Dec. 25
|
|
|
|
|
March 24
|
|
August 15
|
|
Dec. 26
|
|
|
|
|
TAIWAN
|
|
Jan.1
|
|
Feb. 7
|
|
April 4
|
|
|
|
|
Feb. 4
|
|
Feb. 8
|
|
May 1
|
|
|
|
|
Feb. 5
|
|
Feb. 11
|
|
June 9
|
|
|
|
|
Feb. 6
|
|
Feb. 28
|
|
October 10
|
|
|
|
|
THAILAND
|
|
Jan.1
|
|
April 15
|
|
July 1
|
|
Dec. 5
|
|
|
Feb. 20
|
|
May 1
|
|
July 18
|
|
Dec. 10
|
|
|
April 7
|
|
May 5
|
|
August 12
|
|
|
|
|
April 14
|
|
May 20
|
|
October 23
|
|
|
|
|
UNITED KINGDOM
|
|
Jan.1
|
|
May 26
|
|
|
|
|
|
|
March 21
|
|
August 25
|
|
|
|
|
|
|
March 24
|
|
Dec. 25
|
|
|
|
|
|
|
May 5
|
|
Dec. 26
|
|
|
|
|
|
|
UNITED STATES
|
|
Jan.1
|
|
May 26
|
|
Nov. 11
|
|
|
|
|
Jan.21
|
|
July 4
|
|
Nov. 27
|
|
|
|
|
Feb. 18
|
|
Sept. 1
|
|
Dec. 25
|
|
|
|
|
March 21
|
|
October 13
|
|
|
|
|
|
|
VENEZUELA
|
|
Jan.1
|
|
May 1
|
|
August 18
|
|
|
|
|
Feb. 4
|
|
May 5
|
|
Dec. 8
|
|
|
|
|
Feb. 5
|
|
May 26
|
|
Dec. 25
|
|
|
|
|
March 19
|
|
June 24
|
|
|
|
|
|
|
March 20
|
|
July 24
|
|
|
|
|
|
|
30
SETTLEMENT PERIODS GREATER THAN SEVEN DAYS FOR YEAR 2008
|
|
Beginning of
Settlement Period
|
|
End of
Settlement Period
|
|
Days in
Settlement Period
|
|
Argentina
|
|
03
/17/08
|
|
03
/25/08
|
|
|
8
|
|
|
|
|
03
/18/08
|
|
03
/26/08
|
|
|
8
|
|
|
|
|
03
/19/08
|
|
03
/27/08
|
|
|
8
|
|
|
China
|
|
02
/04/08
|
|
02
/14/08
|
|
|
10
|
|
|
|
|
02
/05/08
|
|
02
/15/08
|
|
|
10
|
|
|
|
|
02
/06/08
|
|
02
/18/08
|
|
|
12
|
|
|
|
|
04
/28/08
|
|
05
/08/08
|
|
|
10
|
|
|
|
|
04
/29/08
|
|
05
/09/08
|
|
|
10
|
|
|
|
|
04
/30/08
|
|
05
/12/08
|
|
|
12
|
|
|
|
|
09
/26/08
|
|
10
/08/08
|
|
|
12
|
|
|
|
|
09
/29/08
|
|
10
/09/08
|
|
|
10
|
|
|
|
|
09
/30/08
|
|
10
/10/08
|
|
|
10
|
|
|
Croatia
|
|
12
/19/08
|
|
12
/29/08
|
|
|
10
|
|
|
|
|
12
/22/08
|
|
12
/30/08
|
|
|
8
|
|
|
|
|
12
/23/08
|
|
01
/02/09
|
|
|
10
|
|
|
Czech Republic
|
|
12
/19/08
|
|
12
/29/08
|
|
|
10
|
|
|
|
|
12
/22/08
|
|
12
/30/08
|
|
|
8
|
|
|
|
|
12
/23/08
|
|
12
/31/08
|
|
|
8
|
|
|
Denmark
|
|
03
/17/08
|
|
03
/25/08
|
|
|
8
|
|
|
|
|
03
/18/08
|
|
03
/26/08
|
|
|
8
|
|
|
|
|
03
/19/08
|
|
03
/27/08
|
|
|
8
|
|
|
Finland
|
|
03
/17/08
|
|
03
/25/08
|
|
|
8
|
|
|
|
|
03
/18/08
|
|
03
/26/08
|
|
|
8
|
|
|
|
|
03
/19/08
|
|
03
/27/08
|
|
|
8
|
|
|
Indonesia
|
|
09
/26/08
|
|
10
/06/08
|
|
|
10
|
|
|
|
|
09
/29/08
|
|
10
/07/08
|
|
|
8
|
|
|
|
|
09
/30/08
|
|
10
/08/07
|
|
|
8
|
|
|
Japan
|
|
12
/26/08
|
|
01
/05/09
|
|
|
10
|
|
|
|
|
12
/29/08
|
|
01
/06/09
|
|
|
8
|
|
|
|
|
12
/30/08
|
|
01
/07/09
|
|
|
8
|
|
|
Mexico
|
|
03
/14/08
|
|
03
/24/08
|
|
|
10
|
|
|
Norway
|
|
03
/17/08
|
|
03
/25/08
|
|
|
8
|
|
|
|
|
03
/18/08
|
|
03
/26/08
|
|
|
8
|
|
|
|
|
03
/19/08
|
|
03
/27/08
|
|
|
8
|
|
|
Philippines
|
|
12
/24/08
|
|
01
/02/09
|
|
|
9
|
|
|
Russia*
|
|
12
/26/07
|
|
01
/08/08
|
|
|
13
|
|
|
|
|
12
/27/07
|
|
01
/09/08
|
|
|
13
|
|
|
|
|
12
/28/07
|
|
01
/10/08
|
|
|
13
|
|
|
Sweden
|
|
03
/17/08
|
|
03
/25/08
|
|
|
8
|
|
|
|
|
03
/18/08
|
|
03
/26/08
|
|
|
8
|
|
|
|
|
03
/19/08
|
|
03
/27/08
|
|
|
8
|
|
|
Turkey
|
|
12
/04/08
|
|
12
/12/08
|
|
|
8
|
|
|
|
|
12
/05/08
|
|
12
/15/08
|
|
|
10
|
|
|
Venezuela
|
|
03
/14/08
|
|
03
/24/08
|
|
|
10
|
|
|
|
|
03
/17/08
|
|
03
/25/08
|
|
|
8
|
|
|
|
|
03
/18/08
|
|
03
/26/08
|
|
|
8
|
|
|
* Settlement cycle in Russia is negotiated on a deal by deal basis. Above data reflects a hypothetical T + 3 Cycle Covers market closings that have been confirmed as of 11/1/07. Holidays are subject to change without notice.
31
TAXES
The Fund intends to continue to qualify for and to elect to be treated as a separate regulated investment company (a "RIC") under Subchapter M of the Internal Revenue Code. To qualify for treatment as a RIC, a company must annually distribute at least 90% of its net investment company taxable income (which includes dividends, interest and net capital gains) and meet several other requirements relating to the nature of its income and the diversification of its assets.
The Fund is treated as a separate corporation for federal income tax purposes. The Fund, therefore, is considered to be a separate entity in determining its treatment under the rules for RICs described herein and in the Prospectus. Losses in one fund do not offset gains in another fund and the requirements (other than certain organizational requirements) for qualifying for RIC status are determined at the fund level rather than the Trust level.
The Fund will be subject to a 4% excise tax on certain undistributed income if it does not distribute to its shareholders in each calendar year at least 98% of its ordinary income for the calendar year plus 98% of its net capital gains for twelve months ended October 31 of such year. The Fund intends to declare and distribute dividends and distributions in the amounts and at the times necessary to avoid the application of this 4% excise tax.
As a result of tax requirements, the Trust on behalf of the Fund has the right to reject an order to purchase Shares if the purchaser (or group of purchasers) would, upon obtaining the Shares so ordered, own 80% or more of the outstanding Shares of the Fund and if, pursuant to section 351 of the Internal Revenue Code, the Fund would have a basis in the Deposit Securities different from the market value of such securities on the date of deposit. The Trust also has the right to require information necessary to determine beneficial Share ownership for purposes of the 80% determination.
The Fund may make investments that are subject to special federal income tax rules, such as investments in structured notes, swaps, options, futures contracts and non-U.S. corporations classified as "passive foreign investment companies." Those special tax rules can, among other things, affect the timing of income or gain, the treatment of income as capital or ordinary and the treatment of capital gain or loss as long-term or short-term. The application of these special rules would therefore also affect the character of distributions made by the Fund. The Fund may need to borrow money or dispose of some of its investments earlier than anticipated in order to meet their distribution requirements.
Distributions from the Fund's net investment income, including any net short-term capital gains, if any, and distributions of income from securities lending, are taxable as ordinary income. Distributions reinvested in additional Shares of the Fund through the means of a dividend reinvestment service will be taxable dividends to Shareholders acquiring such additional Shares to the same extent as if such dividends had been received in cash. Distributions of net long-term capital gains, if any, in excess of net short-term capital losses are taxable as long-term capital gains, regardless of how long Shareholders have held the Shares.
Long-term capital gains of noncorporate taxpayers are generally taxed at a maximum of 15% for taxable years beginning before January 1, 2011. In addition, for these tax years some ordinary dividends declared and paid by the Fund to noncorporate shareholders may qualify for taxation at the lower reduced tax rates applicable to long-term capital gains, provided that holding period and other requirements are met by the Fund and the shareholder. The Fund will report to shareholders annually the amounts of dividends received from ordinary income, the amount of distributions received from capital gains and the portion of dividends which may qualify for the dividends received deduction. In addition, the Fund will report the amount of dividends to individual shareholders eligible for taxation at the lower reduced tax rates applicable to long-term capital gains.
If, for any calendar year, the total distributions made exceed the Trust's current and accumulated earnings and profit, the excess will, for U.S. federal income tax purposes, be treated as a tax free return of capital to each shareholder up to the amount of the shareholder's basis in his or her shares, and thereafter as gain from the sale of shares. The amount treated as a tax free return of capital will reduce the shareholder's adjusted basis in his or her shares, thereby increasing his or her potential gain or reducing his or her potential loss on the subsequent sale of his or her shares.
32
The sale, exchange or redemption of Shares may give rise to a gain or loss. In general, any gain or loss realized upon a taxable disposition of Shares will be treated as long-term capital gain or loss if the Shares have been held for more than one year. Otherwise, the gain or loss on the taxable disposition of Shares will be treated as short-term capital gain or loss. A loss realized on a sale or exchange of Shares of the Fund may be disallowed if other substantially identical Shares are acquired (whether through the automatic reinvestment of dividends or otherwise) within a sixty-one (61) day period beginning thirty (30) days before and ending thirty (30) days after the date that the Shares are disposed of. In such a case, the basis of the Shares acquired must be adjusted to reflect the disallowed loss. Any loss upon the sale or exchange of Shares held for six (6) months or less is treated as long-term capital loss to the extent of any capital gain dividends received by the shareholders. Distribution of ordinary income and capital gains may also be subject to state and local taxes.
Distributions of ordinary income paid to shareholders who are nonresident aliens or foreign entities that are not effectively connected to the conduct of a trade or business within the United States will generally be subject to a 30% United States withholding tax unless a reduced rate of withholding or a withholding exemption is provided under applicable treaty law. However, shareholders who are nonresident aliens or foreign entities will generally not be subject to United States withholding or income tax on gains realized on the sale of Shares or on dividends from capital gains unless (i) such gain or capital gain dividend is effectively connected with the conduct of a trade or business within the United States or (ii) in the case of an individual shareholder, the shareholder is present in the United States for a period or periods aggregating 183 days or more during the year of the sale or capital gain dividend and certain other conditions are met. Gains on the sale of Share and dividends that are effectively connected with the conduct of a trade or business within the United States will generally be subject to United States federal net income taxation at regular income tax rates. Dividends paid by the Fund to shareholders who are nonresident aliens or foreign entities that are derived from short-term capital gains and qualifying net interest income (including income from original issue discount and market discount), and that are properly designated by the Fund as "short-term capital gain dividends" or "interest-related dividends," will generally not be subject to United States withholding tax, provided that the income would not be subject to federal income tax if earned directly by the foreign shareholder. These provisions relating to distributions to shareholders who are nonresident aliens or foreign entities generally would apply to distributions with respect to taxable years of the Fund beginning before January 1, 2008. Unless the provisions discussed above are extended or made permanent by Congress, distributions made by the Fund of investment income and short term capital gains in taxable years beginning on or after January 1, 2008 will be treated like other distributions and may be subject to U.S. tax and withholding like regular distributions. In addition, capital gains distributions attributable to gains from U.S. real property interests (including certain U.S. real property holding corporations and which may include certain REITs and certain REIT capital gain dividends) will generally be subject to United States withholding tax and will give rise to an obligation on the part of the foreign shareholder to file a United States tax return. Nonresident shareholders are urged to consult their own tax advisors concerning the applicability of the United States withholding tax.
Some shareholders may be subject to a withholding tax on distributions of ordinary income, capital gains and any cash received on redemption of Creation Units ("backup withholding"). Generally, shareholders subject to backup withholding will be those for whom no certified taxpayer identification number is on file with the Fund or who, to the Fund's knowledge, have furnished an incorrect number. When establishing an account, an investor must certify under penalty of perjury that such number is correct and that such investor is not otherwise subject to backup withholding.
Dividends and interest received by the Fund may give rise to withholding and other taxes imposed by foreign countries. Tax conventions between certain countries and the United States may reduce or eliminate such taxes.
The Fund may be subject to certain taxes imposed by the foreign country or countries in which it invests with respect to dividends, capital gains and interest income. Under the Internal Revenue Code, if more than 50% of the value of the Fund's total assets at the close of any taxable year consists of stocks or securities of foreign corporations, the Fund may elect, for U.S. federal tax purposes, to treat any foreign country's income or withholding taxes paid by the Fund that can be treated as income taxes under U.S. income tax principles as paid by its shareholders. For any year that the Fund makes such an election, each shareholder will be required to
33
include in its income an amount equal to its allocable share of such taxes paid by the Fund to the foreign government and the shareholder will be entitled, subject to certain limitations, to either deduct its allocable share of such foreign income taxes in computing their taxable income or to use it as a foreign tax credit against U.S. income taxes, if any. Generally, foreign investors will be subject to an increased U.S. tax on their income resulting from the Fund's election to "pass through" amounts of foreign taxes paid by the Fund, and will not be able to claim a credit or deduction with respect to the foreign taxes paid by the Fund treated as having been paid by them.
Each shareholder will be notified within 60 days after the close of the Fund's taxable year whether, pursuant to the election described above, any foreign taxes paid by the Fund will be treated as paid by its shareholders for that year and, if so, such notification will designate (i) such shareholder's portion of the foreign taxes paid to such country and (ii) the portion of the Fund's dividends and distributions that represents income derived from sources within such country. The amount of foreign taxes that may be credited against a shareholder's U.S. federal income tax liability generally will be limited, however, to an amount equal to the shareholder's U.S. federal income tax rate multiplied by its foreign source taxable income. For this purpose, the Fund's gains and losses from the sale of securities, and currency gains and losses, will generally be treated as derived from U.S. sources. In addition, this limitation must be applied separately to certain categories of foreign source income. As a consequence, certain shareholders may not be able to claim a foreign tax credit for the full amount of their proportionate share of foreign taxes paid by the Fund. A shareholder's ability to claim a credit for foreign taxes paid by the Fund may also be limited by applicable holding period requirements.
The foregoing discussion is a summary only and is not intended as a substitute for careful tax planning. Purchasers of Shares should consult their own tax advisors as to the tax consequences of investing in such Shares, including under federal, state, local and other tax laws. Finally, the foregoing discussion is based on applicable provisions of the Internal Revenue Code, regulations, judicial authority and administrative interpretations in effect on the date hereof. Changes in applicable authority could materially affect the conclusions discussed above, and such changes often occur.
FEDERAL TAX TREATMENT OF FUTURES AND OPTIONS CONTRACTS
The Fund is required for federal income tax purposes to mark-to-market and recognize as income for each taxable year its net unrealized gains and losses on certain futures contracts as of the end of the year as well as those actually realized during the year. Gain or loss from futures and options contracts on broad-based indexes required to be marked to market will be 60% long-term and 40% short-term capital gain or loss. Application of this rule may alter the timing and character of distributions to shareholders. The Fund may be required to defer the recognition of losses on futures contracts, options contracts and swaps to the extent of any unrecognized gains on offsetting positions held by the Fund.
In order for the Fund to continue to qualify for federal income tax treatment as a RIC, at least 90% of its gross income for a taxable year must be derived from qualifying income, i.e., dividends, interest, income derived from loans or securities, gains from the sale of securities or of foreign currencies or other income derived with respect to the Fund's business of investing in securities (including net income derived from an interest in certain "qualified publicly traded partnerships"). It is anticipated that any net gain realized from the closing out of futures or options contracts will be considered gain from the sale of securities or derived with respect to the Fund's business of investing in securities and therefore will be qualifying income for purposes of the 90% gross income requirement.
The Fund distributes to shareholders at least annually any net capital gains which have been recognized for federal income tax purposes, including unrealized gains at the end of the Fund's fiscal year on futures or options transactions. Such distributions are combined with distributions of capital gains realized on the Fund's other investments and shareholders are advised on the nature of the distributions.
DETERMINATION OF NAV
The following information should be read in conjunction with the section in the Prospectus entitled "Net Asset Value."
34
BONY calculates the Fund's NAV at the close of regular trading (normally 4:00 p.m., Eastern time) every day the NYSE is open. NAV is calculated by deducting all of the Fund's liabilities from the total value of its assets and dividing the result by the number of Shares outstanding, rounding to the nearest cent. All valuations are subject to review by the Trust's Board of Trustees or its delegate.
In determining NAV, expenses are accrued and applied daily and securities and other assets for which market quotations are available are valued at market value. Stocks and other equity securities are valued at the last sales price that day based on the official closing price of the exchange where the security is primarily traded. The NAV for the Fund will be calculated and disseminated daily.
The AMEX will disseminate every 15 seconds throughout the trading day through the facilities of the Consolidated Tape Association the approximate value of Shares of the Fund, an amount representing on a per share basis the sum of the current value of the Deposit Securities based on their then current market price and the estimated Cash Component. As the respective international local markets close, the market value of the Deposit Securities will continue to be updated for foreign exchange rates for the remainder of the U.S. trading day at the prescribed 15 second interval. The value of the Underlying Index will not be calculated and disseminated intra day. The value and return of the Underlying Index is calculated once each trading day by the Index Provider based on prices received from the respective international local markets.
The value of the Fund's portfolio securities is based on the securities' closing price on local markets when available. If a security's market price is not readily available or does not otherwise accurately reflect the fair value of the security, the security will be valued by another method that the Adviser believes will better reflect fair value in accordance with the Trust's valuation policies and procedures approved by the Board of Trustees. Money market securities maturing in 60 days or less will be valued at amortized cost. The Fund may use fair value pricing in a variety of circumstances, including but not limited to, situations when the value of a security in the Fund's portfolio has been materially affected by events occurring after the close of the market on which the security is principally traded (such as a corporate action or other news that may materially affect the price of a security) or trading in a security has been suspended or halted. Fair value pricing involves subjective judgments and it is possible that a fair value determination for a security is materially different than the value that could be realized upon the sale of the security. In addition, fair value pricing could result in a difference between the prices used to calculate the Fund's NAV and the prices used by the Fund's Underlying Index. This may adversely affect the Fund's ability to track its Underlying Index. With respect to securities that are primarily listed on foreign exchanges, the value of the Fund's portfolio securities may change on days when you will not be able to purchase or sell your Shares.
DIVIDENDS AND DISTRIBUTIONS
The following information supplements and should be read in conjunction with the section in the Prospectus entitled "Dividends, Distributions and Taxes."
General Policies.
Ordinarily, dividends from net investment income, if any, are declared and paid quarterly. Distributions of net realized securities gains, if any, generally are declared and paid once a year, but the Trust may make distributions on a more frequent basis. The Trust reserves the right to declare special distributions if, in its reasonable discretion, such action is necessary or advisable to preserve the status of the Fund as a RIC or to avoid imposition of income or excise taxes on undistributed income.
Ordinarly, dividends and other distributions on Fund Shares are distributed, as described below, on a pro rata basis to Beneficial Owners of such Shares. Dividend payments are made through DTC Participants and Indirect Participants to Beneficial Owners then of record with proceeds received from the Fund.
Dividend Reinvestment Service.
No reinvestment service is provided by the Trust. Broker-dealers may make available the DTC book-entry Dividend Reinvestment Service for use by Beneficial Owners of the Fund for reinvestment of their dividend distributions. Beneficial Owners should contact their broker to determine the availability and costs of the service and the details of participation therein. Brokers may require Beneficial Owners to adhere to specific procedures and timetables.
35
MISCELLANEOUS INFORMATION
Counsel.
Clifford Chance US LLP, 31 West 52nd Street, New York, New York 10019, is counsel to the Trust.
Independent Registered Public Accounting Firm.
PricewaterhouseCoopers LLP, 300 Madison Avenue, New York, New York 10017, serves as the Fund's independent registered public accounting firm. They audit the Fund's financial statements and perform other related audit services.
FINANCIAL STATEMENTS
The audited financial statements, and the unaudited financial statements including the financial highlights appearing in the Trust's Annual Report to shareholders for the fiscal year ended April 30, 2008 attached hereto as Appendix B are incorporated by reference and made part of this SAI. You may request a copy of the Trust's Annual Reports and Semi-Annual Reports at no charge by calling 800.983.0903 during normal business hours.
36
APPENDIX A
INVESCO POWERSHARES CAPITAL MANAGEMENT LLC
2008 PROXY VOTING POLICY - OVERVIEW
Invesco PowerShares Capital Management LLC ("Invesco PowerShares") has adopted proxy voting policies with respect to securities owned by the exchange-traded funds ("ETFs") for which it serves as investment adviser and has the authority to vote proxies. Invesco PowerShares's proxy voting policies are designed to ensure that proxies are voted in the best interests of an ETF. With respect to implementation of its proxy voting policies, Invesco PowerShares:
1) applies its proxy voting policies consistently;
2) documents the reasons for voting;
3) maintains records of voting activities; and
4) monitors to ensure voting recommendations of an independent service provider are in the best interests of shareholders.
Proxy Voting
Invesco PowerShares has retained Glass Lewis & Co. to provide in-depth proxy research and has retained Broadridge to provide vote execution and the recordkeeping services necessary for tracking proxy voting for the ETFs. Invesco PowerShares intends to vote according to Glass Lewis & Co.'s voting recommendations unless Invesco PowerShares determines that such recommendations are not in the best interests of the ETFs. Glass Lewis & Co. specializes in providing a variety of fiduciary-level services related to proxy voting. Please see Exhibit A, Glass Lewis & Co. Proxy Paper Policy Guidelines-An Overview of the Glass Lewis Approach to Proxy Advice 2008 Proxy Season.
Share Blocking
Invesco PowerShares may choose not to vote proxies in certain situations or for certain accounts either where it deems the cost of doing so to be prohibitive or where the exercise of voting rights could restrict the ability of an ETF's portfolio manager to freely trade the security in question. For example, in accordance with local law or business practices, many foreign companies prevent the sale of shares that have been voted for a certain period beginning prior to the shareholder meeting and ending on the day following the meeting ("share blocking"). Due to these restrictions, Invesco PowerShares must balance the benefits of voting proxies against the potentially serious portfolio management consequences of a reduced flexibility to sell the underlying shares at the most advantageous time. For companies in countries with share blocking periods, the disadvantage of being unable to sell the stock regardless of changing conditions generally outweighs the advantages of voting at the shareholder meeting for routine items. Accordingly Invesco PowerShares will not vote those proxies in the absence of an unusual or significant vote.
Special Policy
With respect to the PowerShares International Listed Private Equity Portfolio, PowerShares Autonomic Growth NFA Global Asset Portfolio, PowerShares Autonomic Balanced Growth NFA Global Asset Portfolio, PowerShares Autonomic Balanced NFA Global Asset Portfolio and PowerShares Lux Nanotech Portfolio, the Adviser will vote proxies in accordance with Section 12(d)(1)(E), which requires that the Adviser vote the shares in the portfolio of the PowerShares International Listed Private Equity Portfolio, PowerShares Autonomic Growth NFA Global Asset Portfolio, PowerShares Autonomic Balanced Growth NFA Global Asset Portfolio, PowerShares Autonomic Balanced NFA Global Asset Portfolio and PowerShares Lux Nanotech Portfolio in the same proportion as the vote of all other holders of such security.
A-1
Appendix B
2008 Annual Report to Shareholders
30 April 2008
PowerShares Aerospace & Defense Portfolio
PowerShares Cleantech
TM
Portfolio
PowerShares DWA Technical Leaders
TM
Portfolio
PowerShares Golden Dragon Halter USX China Portfolio
PowerShares Listed Private Equity Portfolio
PowerShares Lux Nanotech Portfolio
PowerShares S&P 500 BuyWrite Portfolio
PowerShares Value Line Industry Rotation Portfolio
PowerShares Value Line Timeliness
TM
Select Portfolio
PowerShares Water Resources Portfolio
PowerShares WilderHill Clean Energy Portfolio
PowerShares WilderHill Progressive Energy Portfolio
Table of Contents
Shareholder Letter
|
|
|
2
|
|
|
|
The Market Environment
|
|
|
3
|
|
|
|
Manager's Analysis
|
|
|
4
|
|
|
|
Funds' Distribution History
|
|
|
32
|
|
|
|
Frequency Distribution of Discounts & Premiums
|
|
|
34
|
|
|
|
Fees and Expenses
|
|
|
36
|
|
|
|
Specialty Portfolios
|
|
|
Schedules of Investments
|
|
|
PowerShares Aerospace & Defense Portfolio
|
|
|
38
|
|
|
|
PowerShares Cleantech
TM
Portfolio
|
|
|
39
|
|
|
|
PowerShares DWA Technical Leaders
TM
Portfolio
|
|
|
40
|
|
|
|
PowerShares Golden Dragon Halter USX China Portfolio
|
|
|
42
|
|
|
|
PowerShares Listed Private Equity Portfolio
|
|
|
44
|
|
|
|
PowerShares Lux Nanotech Portfolio
|
|
|
45
|
|
|
|
PowerShares S&P 500 BuyWrite Portfolio
|
|
|
46
|
|
|
|
PowerShares Value Line Industry Rotation Portfolio
|
|
|
52
|
|
|
|
PowerShares Value Line Timeliness
TM
Select Portfolio
|
|
|
54
|
|
|
|
PowerShares Water Resources Portfolio
|
|
|
55
|
|
|
|
PowerShares WilderHill Clean Energy Portfolio
|
|
|
56
|
|
|
|
PowerShares WilderHill Progressive Energy Portfolio
|
|
|
57
|
|
|
|
Statements of Assets and Liabilities
|
|
|
58
|
|
|
|
Statements of Operations
|
|
|
60
|
|
|
|
Statements of Changes in Net Assets
|
|
|
62
|
|
|
|
Financial Highlights
|
|
|
66
|
|
|
|
Notes to Financial Statements
|
|
|
72
|
|
|
|
Report of Independent Registered Public Accounting Firm
|
|
|
87
|
|
|
|
Supplemental Information
|
|
|
88
|
|
|
|
Information about Advisory Agreements
|
|
|
94
|
|
|
|
To My Fellow Investors,
It gives me great pleasure to report on the state of your investment in PowerShares Exchange-Traded Funds and to thank you for your continued confidence in Invesco PowerShares Capital Management LLC.
Invesco PowerShares has accomplished a number of corporate and industry achievements in 2007. Some of the most notable successes over the past 12 months are that PowerShares:
Was the first to receive approval from the SEC to operate actively managed equity and fixed-income ETFs.
Launched our initial group of international ETFs, which invest directly in securities listed on foreign exchanges. As of April 30, 2008, we had 17 ETFs allowing investors to invest across a wide geographic range.
Brought out the markets only ETFs investing in insured municipal bonds. These three ETF's were part of our initial entry into the Fixed Income portion of the investment spectrum.
Further enhanced our reputation as one of the leading innovators in the ETF marketplace when the PowerShares S&P Buy-Write Portfolio was awarded the most innovative new ETF for 2007.
Expanded our global footprint with the introduction of 14 PowerShares ETFs listed on four major stock exchanges across Europe (London, Milan, Frankfurt and Paris).
Launched the PowerShares India Portfolio, one of the first ETFs to provide U.S. investors with direct access to securities listed on the India stock exchange.
Another milestone of the past year was the adoption of our new name, Invesco PowerShares in short, we have a new corporate name. Invesco PowerShares represents the strength of global diversification you get through the combination of Invesco's worldwide resources and PowerShares' market leading ETF capabilities. As one of the world's largest and most diversified global investment organizations, Invesco has more than 500 investment professionals operating in investment centers in 25 cities, a presence in 12 countries and $500 billion in assets under management globally at the end of 2007.
While our name has changed and we have a new corporate logo, our goal of delivering the highest quality investment management available in the ETF structure has not changed and all of the names of your funds and their trading symbols remain the same as do all of our telephone contact numbers. All of us at Invesco PowerShares will continue to strive to provide you with compelling investment solutions and high-quality customer service. Regardless of market conditions, Invesco PowerShares will hold true to its mission: seeking to build financial security for investors.
Best regards,
H. Bruce Bond
President and Chairman of the Board of Trustees
PowerShares Exchange-Traded Fund Trust
2
The Market Environment
Although the benchmark S&P 500 index hit an all-time high in October, 2007, it capitulated as the subprime mortgage crisis began to negatively affect the balance sheets of major U.S. financial institutions. As a result, volatility (as measured by the CBOE "VIX" index) increased by 46.2% during the April 30, 2007 to April 30, 2008 reporting period. Another dramatic rise over the same timeframe was the price of crude oil, which rallied 72.7%. U.S. economic growth began to slow significantly in Q1 2008, leading to recession concerns addressed by the Federal Reserve Bank through aggressive monetary policy easing (the Fed Fund target rate was cut by 2.25% in 2008). The combination of lower short-term U.S. interest rates and the recycling of petrodollars into European banks caused the U.S. dollar to weaken versus all G7 currencies for the year ended April 30, 2008.
By March, 2008, even the AAA-rated monoline bond insurers succumbed to the U.S. credit crunch. Bond insurer ratings downgrades led to huge displacements within the municipal bond market. An impending liquidity crisis was quelled in mid-March by the Fed via the creation of a $200bn lending facility and the approval of Bear Stearns' sale to JP Morgan. Along with the restoration of confidence in the U.S. financial system came a respectable April rally in the U.S. equity market, leaving the S&P 500 with a yearly total return of -4.68% over the reporting period while the DJIA was 0.47% and the NASDAQ-100 was +3.18%. For the same period, the Lehman Brothers U.S. Aggregate Total Return bond index was 6.87%.
3
Manager's Analysis
PowerShares Aerospace & Defense Portfolio (ticker: PPA)
The PowerShares Aerospace & Defense Portfolio continues to provide investors with a means to participate in a sector that has now beaten the S&P 500
®
for eight consecutive years.
During the period of this report, the fund gained 3.86%. This compares to a decline of 4.68% in the S&P 500
®
.
The period began with a steady progression of month-end highs that began in April 2007 and extended through October 2007. The Fund remained relatively flat through late December, declining roughly 3.00% as the broader markets began a sharp revaluation while investors fled the broader markets as problems in the financial and housing sectors worsened. The first quarter of 2008 saw investors divest many of their best performing sectors to raise cash, and combined with the announcement of a significant delay by Boeing for its new aircraft, the fund declined in concert with the markets.
Performance in the sector continues to be driven by several factors including government support for defense and homeland security activities along with an expanding marketplace for manufacturing commercial aircraft. With a portfolio defined by the underlying SPADE
TM
Defense Index (AMEX: DXS), constituents represent a diversified offering of large cap, mid- and small-cap companies enabling the fund to capture current and future spending in areas related to defense system manufacturing, armor for vehicles and soldiers, night vision systems, border security, defense IT and network centric systems, commercial aerospace, and secure communications.
With the core defense budget forecast to grow by an additional $30 billion through 2013 and additional appropriations anticipated to fund overseas military operations, replenish and repair military systems, and develop new border security initiatives; and combined with the anticipated delivery of more than $2 trillion worth of commercial aircraft and parts over the next decade, the sector continues to feature a number of positive trends. The primary risk to the sector continues to be politics and the perception of changes in advance of any action.
4
Manager's Analysis (Continued)
PowerShares Aerospace & Defense Portfolio (ticker: PPA)
Sector Breakdown (% of the Fund's
Net Assets) as of 30 April 2008
Aerospace/Defense
|
|
|
55.9
|
|
|
Miscellaneous Manufacturing
|
|
|
16.3
|
|
|
Electronics
|
|
|
7.1
|
|
|
Metal Fabricate/Hardware
|
|
|
4.6
|
|
|
Computers
|
|
|
4.0
|
|
|
Commercial Services
|
|
|
3.4
|
|
|
Telecommunications
|
|
|
3.3
|
|
|
Packaging & Containers
|
|
|
2.0
|
|
|
Engineering & Construction
|
|
|
1.5
|
|
|
Auto Manufacturers
|
|
|
1.1
|
|
|
Software
|
|
|
0.6
|
|
|
Money Market Fund
|
|
|
0.1
|
|
|
Other
|
|
|
0.1
|
|
|
Style Allocation (% of the Fund's Total
Investments) as of 30 April 2008
Large-Cap Growth
|
|
|
29.8
|
|
|
Large-Cap Value
|
|
|
29.8
|
|
|
Mid-Cap Growth
|
|
|
22.3
|
|
|
Mid-Cap Value
|
|
|
8.7
|
|
|
Small-Cap Growth
|
|
|
6.8
|
|
|
Small-Cap Value
|
|
|
2.6
|
|
|
Top Ten Fund Holdings (% of the Fund's
Net Assets) as of 30 April 2008
Security
|
|
Boeing Co.
|
|
|
7.6
|
|
|
Honeywell International, Inc.
|
|
|
7.3
|
|
|
Lockheed Martin Corp.
|
|
|
7.2
|
|
|
United Technologies Corp.
|
|
|
7.2
|
|
|
General Dynamics Corp.
|
|
|
6.2
|
|
|
Raytheon Co.
|
|
|
4.7
|
|
|
ITT Corp.
|
|
|
4.4
|
|
|
Precision Castparts Corp.
|
|
|
4.4
|
|
|
Northrop Grumman Corp.
|
|
|
4.3
|
|
|
Textron, Inc.
|
|
|
4.2
|
|
|
Total
|
|
|
57.5
|
|
|
5
Manager's Analysis (Continued)
PowerShares Aerospace & Defense Portfolio (ticker: PPA)
Growth of a $10,000 Investment Since Inception
Fund Performance History (%)
As of 30 April 2008
Index
|
|
Avg. Ann.
|
|
Fund Inception
|
|
|
|
1 Year
|
|
Avg. Ann.
|
|
Cumulative
|
|
SPADE
TM
Defense Index
|
|
|
3.65
|
|
|
|
14.40
|
|
|
|
40.35
|
|
|
S&P 500
®
Index
|
|
|
-4.68
|
|
|
|
8.23
|
|
|
|
22.04
|
|
|
Russell 3000
®
Index
|
|
|
-5.16
|
|
|
|
8.14
|
|
|
|
21.80
|
|
|
Fund
NAV Return
|
|
|
3.86
|
|
|
|
14.79
|
|
|
|
41.36
|
|
|
Share Price Return
|
|
|
3.87
|
|
|
|
14.78
|
|
|
|
41.39
|
|
|
Fund Inception: 26 October 2005
Performance may be higher or lower than the performance quoted. Investment returns and principal value will fluctuate and shares, when redeemed, may be worth more or less than their original cost. The Adviser has waived fees and reimbursed other expenses during previous fiscal periods, absent which, performance during those fiscal periods would have been lower. While the Adviser has contractually agreed to waive and/or pay certain Fund expenses through August 30, 2009, the Fund is currently subject to recapture, which may result in an increased expense ratio. According to the Fund's current prospectus, the total gross annual operating expense ratio was indicated as 0.75%. In the Financial Highlights section of this Shareholder Report, the Fund's net total operating expense ratio was determined to be 0.66% while the Fund's gross total operating expense ratio was 0.64%. NAV and Share Price returns assume that dividends and capital gain distributions have been reinvested in the Fund at NAV and Share Price, respectively. The returns shown in the table above do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption or sale of Fund Shares. See invescopowershares.com to find the most recent month-end performance numbers.
The Index performance results are based upon a hypothetical investment in its constituent securities. Index returns do not represent Fund returns. 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. 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.
The S&P 500
®
Index and Russell 3000
®
Index are unmanaged indices used as a measurement of change in stock market conditions based on the average performance of approximately 500 and 2,918 common stocks, respectively.
Average annualized.
6
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Manager's Analysis
PowerShares Cleantech
TM
Portfolio (ticker: PZD)
The PowerShares Cleantech Portfolio is based on the Cleantech
TM
Index and seeks investment results that correspond generally to the price and yield (prior to Fund fees and expenses) of the Index.
The Cleantech
TM
Index enables investors to profit from the surging global demand for clean technology products & services as reflected by the investment returns of the leading US-traded, cleantech companies. Cleantech businesses are found across a broad range of industry sectors from energy, water, and new materials to agriculture and transportation. As a result, the Index is far more diversified than more narrowly focused sector indices.
The Index focuses on the leading companies most representative of the growth of cleantech. Index companies must meet 18 stringent criteria for inclusion including quality, profitability, growth, strategy, sector leadership, and have strong technology/knowledge-based businesses. As such, producers of commodity products, regulated utilities, and dubious products such as grain-based fuels are excluded.
In the year ending April 30, 2008, the Fund dramatically outperformed nearly all major market indices and even many "renewable energy" indices. The Fund rose 24.19% compared to -4.68% for S&P 500
®
and 3.67% for the NASDAQ Composite.
Alternative energy stocks were torrid performers in 2007 and many solar energy companies advancing 100-200% or more. However, last winter's broad market decline saw many of these stocks fall far faster that the broad market. As a result, the Cleantech
TM
Index (CTIUS) also outperformed most 'alternative energy' indices and mutual funds over the last 12 months.
Sector Breakdown (% of the Fund's
Net Assets) as of 30 April 2008
Miscellaneous Manufacturing
|
|
|
21.2
|
|
|
Energy-Alternate Sources
|
|
|
14.1
|
|
|
Electronics
|
|
|
12.6
|
|
|
Environmental Control
|
|
|
8.8
|
|
|
Semiconductors
|
|
|
6.6
|
|
|
Machinery-Diversified
|
|
|
6.3
|
|
|
Engineering & Construction
|
|
|
5.1
|
|
|
Electrical Components & Equipment
|
|
|
4.0
|
|
|
Telecommunications
|
|
|
3.4
|
|
|
Water
|
|
|
3.2
|
|
|
Software
|
|
|
2.9
|
|
|
Biotechnology
|
|
|
2.4
|
|
|
Chemicals
|
|
|
2.4
|
|
|
Hand/Machine Tools
|
|
|
2.3
|
|
|
Electric
|
|
|
2.0
|
|
|
Office Furnishings
|
|
|
1.4
|
|
|
Computers
|
|
|
1.3
|
|
|
Other
|
|
|
(0.0
|
)
|
|
Top Ten Fund Holdings (% of the Fund's
Net Assets) as of 30 April 2008
Security
|
|
First Solar, Inc.
|
|
|
4.1
|
|
|
ABB Ltd. ADR (Switzerland)
|
|
|
3.6
|
|
|
SunPower Corp., Class A
|
|
|
3.5
|
|
|
Suntech Power Holdings Co. Ltd. ADR
(China)
|
|
|
3.5
|
|
|
Corning, Inc.
|
|
|
3.4
|
|
|
Siemens AG ADR (Germany)
|
|
|
3.4
|
|
|
SPX Corp.
|
|
|
3.3
|
|
|
Veolia Environment ADR (France)
|
|
|
3.2
|
|
|
Trimble Navigation Ltd.
|
|
|
3.1
|
|
|
Donaldson Co., Inc.
|
|
|
3.0
|
|
|
Total
|
|
|
34.1
|
|
|
Style Allocation (% of the Fund's Total
Investments) as of 30 April 2008
Mid-Cap Growth
|
|
|
34.6
|
|
|
Small-Cap Growth
|
|
|
32.4
|
|
|
Large-Cap Growth
|
|
|
25.3
|
|
|
Small-Cap Value
|
|
|
7.7
|
|
|
8
Manager's Analysis (Continued)
PowerShares Cleantech
TM
Portfolio (ticker: PZD)
Growth of a $10,000 Investment Since Inception
Fund Performance History (%)
As of 30 April 2008
Index
|
|
Avg. Ann.
|
|
Fund Inception
|
|
|
|
1 Year
|
|
Avg. Ann.
|
|
Cumulative
|
|
Cleantech
TM
Index
|
|
|
24.63
|
|
|
|
22.87
|
|
|
|
36.84
|
|
|
NASDAQ Composite Index
|
|
|
-4.45
|
|
|
|
1.89
|
|
|
|
2.90
|
|
|
S&P 500
®
Index
|
|
|
-4.68
|
|
|
|
2.34
|
|
|
|
3.58
|
|
|
Fund
NAV Return
|
|
|
24.19
|
|
|
|
22.59
|
|
|
|
36.15
|
|
|
Share Price Return
|
|
|
24.13
|
|
|
|
22.54
|
|
|
|
36.14
|
|
|
Fund Inception: 24 October 2006
Performance may be higher or lower than the performance quoted. Investment returns and principal value will fluctuate and shares, when redeemed, may be worth more or less than their original cost. The Adviser has waived fees and reimbursed other expenses, absent which, performance would have been lower. The Adviser has contractually agreed to waive fees and/or pay certain Fund expenses through August 30, 2009. According to the Fund's current prospectus, the total gross annual operating expense ratio was indicated as 1.32%. In the Financial Highlights section of this Shareholder Report, the Fund's net (subsidized) total operating expense ratio was determined to be 0.69% while the Fund's gross total operating expense ratio was 0.77%. NAV and Share Price returns assume that dividends and capital gain distributions have been reinvested in the Fund at NAV and Share Price, respectively. The returns shown in the table above do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption or sale of Fund Shares. See invescopowershares.com to find the most recent month-end performance numbers.
The Index performance results are based upon a hypothetical investment in its constituent securities. Index returns do not represent Fund returns. 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. 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.
The NASDAQ Composite Index and S&P 500
®
Index are unmanaged indices used as a measurement of change in stock market conditions based on the average performance of approximately 3,087 and 500 common stocks, respectively.
Average annualized.
9
Manager's Analysis
PowerShares DWA Technical Leaders
TM
Portfolio (ticker: PDP)
The PowerShares DWA Technical Leaders
TM
Portfolio is based on the Dorsey Wright Technical Leaders
TM
Index which includes approximately 100 U.S.-listed companies that demonstrate strong relative strength characteristics. The Index is constructed pursuant to Dorsey Wright proprietary methodology, which takes into account, among other factors, the performance of each of the 3,000 largest U.S.-listed companies as compared to a benchmark index, and the relative performance of industry sectors and sub-sectors. Stocks that are selected receive a modified equal weighting.
For the year ended April 30, 2008 PowerShares DWA Technical Leaders
TM
Portfolio returned 1.62% outperforming the Dow Jones Industrial Average Index and the S&P 500
®
Index which returned 0.47% and -4.68%, respectively, over the same period.
For the year ended April 30, 2008 seven of the ten sectors represented in the Fund generated positive returns. Overallocation in the industrial and material sectors and stock selection in the health care and telecommunication service sectors made the largest positive contributions to the performance of the Fund, relative to the broader US equity market. Conversely, stock selection within the consumer staples and consumer discretionary sectors and overexposure in the energy sector partially offset the positive performance of the Fund. Lastly, overallocation within mid cap growth companies was the largest contributor to the Fund's positive performance. Conversely, stock selection in small cap value companies such as Landstar System Inc. and Eagle Materials Inc. partially offset the positive performance of the portfolio.
Sector Breakdown (% of the Fund's
Net Assets) as of 30 April 2008
Industrials
|
|
|
27.0
|
|
|
Materials
|
|
|
12.5
|
|
|
Energy
|
|
|
12.0
|
|
|
Financials
|
|
|
11.6
|
|
|
Health Care
|
|
|
9.9
|
|
|
Consumer Discretionary
|
|
|
7.1
|
|
|
Telecommunication Services
|
|
|
7.0
|
|
|
Utilities
|
|
|
5.2
|
|
|
Consumer Staples
|
|
|
4.4
|
|
|
Information Technology
|
|
|
3.3
|
|
|
Other
|
|
|
(0.0
|
)
|
|
Style Allocation (% of the Fund's Total
Investments) as of 30 April 2008
Mid-Cap Growth
|
|
|
45.7
|
|
|
Large-Cap Growth
|
|
|
25.1
|
|
|
Large-Cap Value
|
|
|
14.3
|
|
|
Mid-Cap Value
|
|
|
14.1
|
|
|
Small-Cap Value
|
|
|
0.8
|
|
|
Top Ten Fund Holdings (% of the Fund's
Net Assets) as of 30 April 2008
Security
|
|
American Tower Corp., Class A
|
|
|
4.2
|
|
|
McDermott International, Inc.
|
|
|
3.0
|
|
|
Crown Castle International Corp.
|
|
|
2.8
|
|
|
Williams (The) Cos., Inc.
|
|
|
2.6
|
|
|
Covanta Holding Corp.
|
|
|
2.6
|
|
|
Pediatrix Medical Group, Inc.
|
|
|
2.4
|
|
|
Energizer Holdings, Inc.
|
|
|
2.0
|
|
|
Ventas, Inc.
|
|
|
2.0
|
|
|
Allegheny Technologies, Inc.
|
|
|
1.9
|
|
|
BlackRock, Inc.
|
|
|
1.6
|
|
|
Total
|
|
|
25.1
|
|
|
10
Manager's Analysis (Continued)
PowerShares DWA Technical Leaders
TM
Portfolio (ticker: PDP)
Growth of a $10,000 Investment Since Inception
Fund Performance History (%)
As of 30 April 2008
Index
|
|
Avg. Ann.
|
|
Fund Inception
|
|
|
|
1 Year
|
|
Avg. Ann.
|
|
Cumulative
|
|
Dorsey Wright Technical Leaders
TM
Index
|
|
|
2.26
|
|
|
|
7.81
|
|
|
|
7.82
|
|
|
S&P 500
®
Index
|
|
|
-4.68
|
|
|
|
0.79
|
|
|
|
0.92
|
|
|
Fund
NAV
|
|
|
1.62
|
|
|
|
7.29
|
|
|
|
8.54
|
|
|
Share Price Return
|
|
|
1.44
|
|
|
|
7.15
|
|
|
|
8.39
|
|
|
Fund Inception: 1 March 2007
Performance may be higher or lower than the performance quoted. Investment returns and principal value will fluctuate and shares, when redeemed, may be worth more or less than their original cost. The Adviser has waived fees and reimbursed other expenses during previous fiscal periods, absent which, performance during those fiscal periods would have been lower. While the Adviser has contractually agreed to waive and/or pay certain Fund expenses through August 30, 2009, the Fund is currently subject to recapture, which may result in an increased expense ratio. According to the Fund's current prospectus, the total gross annual operating expense ratio was indicated as 1.96%. In the Financial Highlights section of this Shareholder Report, the Fund's net total operating expense ratio was determined to be 0.71% while the Fund's gross total operating expense ratio was 0.68%. NAV and Share Price returns assume that dividends and capital gain distributions have been reinvested in the Fund at NAV and Share Price, respectively. The returns shown in the table above do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption or sale of Fund Shares. See invescopowershares.com to find the most recent month-end performance numbers.
The Index performance results are based upon a hypothetical investment in its constituent securities. Index returns do not represent Fund returns. 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. 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.
The S&P 500
®
Index is an unmanaged index used as a measurement of change in stock market conditions based on the average performance of approximately 500 common stocks.
Average annualized.
11
Manager's Analysis
PowerShares Golden Dragon Halter USX China Portfolio (ticker: PGJ)
The PowerShares Golden Dragon Halter USX China Portfolio is based on the Halter USX China Index
SM
. The Halter USX China Index
SM
is comprised of companies whose common stock is publicly traded in the United States and the majority of whose business is conducted within the People's Republic of China. It was created by the Halter Financial Group in response to the unique economic opportunities taking place in China, as well as the current dynamics in the United States capital markets. While there is strong demand for Chinese equity, U.S. investors still seek and prefer the transparency offered with a U.S. listing. The listing of Chinese companies in the U.S. is a growing trend and this Index is intended to provide a valuable tracking and information tool for the investment community.
For the year ended April 30, 2008 the PowerShares Golden Dragon Halter USX China Portfolio returned 35.87%.
The positive performance of the Fund was largely attributable to the following securities: Baidu.com Inc., China Mobile Ltd., CNOOC Ltd., Aluminum Corp. of China Ltd., Yanzhou Coal Mining Co. Ltd., China Life Insurance Co. Ltd. Together, these securities provided 53.5% of the Fund's positive performance. Conversely, the following securities offset the positive performance of the Fund: Semiconductor Manufacturing International Corp., Yingli Green Energy Holding Co. Ltd., LDK Solar Co. Ltd., WuXi PharmaTech (Cayman) Inc. Lastly, the positive performance of the Fund was mostly attributable to stock selection within large cap growth companies such as China Mobile Ltd. and CNOOC Ltd. Furthermore, the positive performance of the Fund was also attributable to stock selection within mid cap growth companies such as Baidu.com Inc. and Yanzhou Coal Mining Co. Ltd. Conversely, part of positive performance of the Fund was offset by overallocation to small cap growth companies.
Sector Breakdown (% of the Fund's
Net Assets) as of 30 April 2008
Energy
|
|
|
21.0
|
|
|
Information Technology
|
|
|
19.4
|
|
|
Telecommunications Services
|
|
|
18.2
|
|
|
Industrials
|
|
|
12.8
|
|
|
Consumer Discretionary
|
|
|
7.5
|
|
|
Materials
|
|
|
5.9
|
|
|
Financials
|
|
|
5.8
|
|
|
Utilities
|
|
|
4.6
|
|
|
Health Care
|
|
|
3.6
|
|
|
Consumer Staples
|
|
|
0.9
|
|
|
Other
|
|
|
0.3
|
|
|
Style Allocation (% of the Fund's Total
Investments) as of 30 April 2008
Large-Cap Value
|
|
|
34.7
|
|
|
Large-Cap Growth
|
|
|
28.3
|
|
|
Mid-Cap Growth
|
|
|
14.4
|
|
|
Mid-Cap Value
|
|
|
14.0
|
|
|
Small-Cap Growth
|
|
|
7.6
|
|
|
Small-Cap Value
|
|
|
1.0
|
|
|
Top Ten Fund Holdings (% of the Fund's
Net Assets) as of 30 April 2008
Security
|
|
PetroChina Co. Ltd. ADR
|
|
|
6.2
|
|
|
China Mobile Ltd. ADR
|
|
|
6.1
|
|
|
Baidu.com ADR
|
|
|
5.8
|
|
|
China Petroleum and Chemical
Corp. ADR
|
|
|
4.8
|
|
|
China Life Insurance Co. Ltd. ADR
|
|
|
4.8
|
|
|
CNOOC Ltd. ADR
|
|
|
4.7
|
|
|
Huaneng Power International, Inc. ADR
|
|
|
4.6
|
|
|
Yanzhou Coal Mining Co. Ltd. ADR
|
|
|
4.4
|
|
|
China Netcom Group Corp. Ltd. ADR
|
|
|
4.3
|
|
|
Aluminum Corp. of China Ltd. ADR
|
|
|
4.2
|
|
|
Total
|
|
|
49.9
|
|
|
12
Manager's Analysis (Continued)
PowerShares Golden Dragon Halter USX China Portfolio (ticker: PGJ)
Growth of a $10,000 Investment Since Inception
Fund Performance History (%)
As of 30 April 2008
Index
|
|
Avg. Ann.
|
|
Fund Inception
|
|
|
|
1 Year
|
|
3 Year
|
|
Avg. Ann.
|
|
Cumulative
|
|
Halter USX China Index
SM
|
|
|
37.08
|
|
|
|
33.30
|
|
|
|
24.50
|
|
|
|
110.67
|
|
|
MSCI EAFE Index
|
|
|
-1.78
|
|
|
|
16.25
|
|
|
|
15.09
|
|
|
|
61.25
|
|
|
S&P 500
®
Index
|
|
|
-4.68
|
|
|
|
8.23
|
|
|
|
6.56
|
|
|
|
24.13
|
|
|
Fund
NAV Return
|
|
|
35.87
|
|
|
|
31.94
|
|
|
|
23.63
|
|
|
|
105.21
|
|
|
Share Price Return
|
|
|
35.60
|
|
|
|
31.91
|
|
|
|
23.44
|
|
|
|
104.29
|
|
|
Fund Inception: 9 December 2004
Performance may be higher or lower than the performance quoted. Investment returns and principal value will fluctuate and shares, when redeemed, may be worth more or less than their original cost. The Adviser has waived fees and reimbursed other expenses during previous fiscal periods, absent which, performance during those fiscal periods would have been lower. While the Adviser has contractually agreed to waive and/or pay certain Fund expenses through August 30, 2009, the Fund is currently subject to recapture, which may result in an increased expense ratio. According to the Fund's current prospectus, the total gross annual operating expense ratio was indicated as 0.73%. In the Financial Highlights section of this Shareholder Report, the Fund's net total operating expense ratio was determined to be 0.69% while the Fund's gross total operating expense ratio was 0.66%. NAV and Share Price returns assume that dividends and capital gain distributions have been reinvested in the Fund at NAV and Share Price, respectively. The returns shown in the table above do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption or sale of Fund Shares. See invescopowershares.com to find the most recent month-end performance numbers.
The Index performance results are based upon a hypothetical investment in its constituent securities. Index returns do not represent Fund returns. 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. 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.
The MSCI EAFE Index and S&P 500
®
Index are unmanaged indices used as a measurement of change in stock market conditions based on the average performance of approximately 1,137 and 500 common stocks, respectively.
Average annualized.
13
Manager's Analysis
PowerShares Listed Private Equity Portfolio (ticker: PSP)
The PowerShares Listed Private Equity Portfolio seeks investment results that generally correspond to the Red Rocks Listed Private Equity Index. The Index provides investors with a means of diversified exposure to private equity firms and their underlying portfolio investments. The private equity asset class has historically provided strong, non-correlated performance to other traditional asset classes.
Over the year ended April 30, 2008 the Fund lost 23.50% while the S&P 500 was down 4.68%. After four years of strong global economic growth, the U.S. sub-prime mortgage crisis emerged in the summer of 2007. Debt and equity markets around the world have experienced weakness and volatility over the past year as major flaws in global financial markets became evident.
The primary impact to the private equity industry has been felt in the large leveraged buyout ("LBO") market in Europe and the United States. Global deleveraging has also led to fewer exit opportunities for private equity firms. The overriding opinion of private equity is currently negative when in fact the industry is actually quite strong. According to Private Equity Intelligence, global private equity fundraising increased in 2007 from 2006 to over $850 billion.
The outlook for listed private equity companies remains favorable where the majority of investments are in the middle market where transactions are still thriving, pricing multiples are steady and financing is still available. Also, many companies in the listed private equity universe took advantage of the strong exit markets over the past couple years. The cash raised is currently being deployed under better terms which will likely lead to continued strong realizations in the future.
Sector Breakdown (% of the Fund's
Net Assets) as of 30 April 2008
Investment Companies
|
|
|
48.7
|
|
|
Diversified Financial Services
|
|
|
14.5
|
|
|
Holding Companies-Diversified
|
|
|
13.3
|
|
|
REITS
|
|
|
6.2
|
|
|
Internet
|
|
|
5.6
|
|
|
Banks
|
|
|
5.0
|
|
|
Commercial Services
|
|
|
4.6
|
|
|
Closed-end Funds
|
|
|
1.2
|
|
|
Money Market Fund
|
|
|
0.3
|
|
|
Other
|
|
|
0.6
|
|
|
Style Allocation (% of the Fund's Total
Investments) as of 30 April 2008
Small-Cap Value
|
|
|
40.4
|
|
|
Mid-Cap Growth
|
|
|
27.5
|
|
|
Mid-Cap Value
|
|
|
23.1
|
|
|
Small-Cap Growth
|
|
|
9.0
|
|
|
Top Ten Fund Holdings (% of the Fund's
Net Assets) as of 30 April 2008
Security
|
|
Leucadia National Corp.
|
|
|
11.5
|
|
|
Fortress Investment Group LLC, Class A
|
|
|
10.2
|
|
|
American Capital Strategies Ltd.
|
|
|
8.3
|
|
|
Allied Capital Corp.
|
|
|
6.4
|
|
|
CapitalSource, Inc.
|
|
|
6.2
|
|
|
SV
B Financial Group
|
|
|
5.1
|
|
|
Apollo Investment Corp.
|
|
|
4.6
|
|
|
Macquarie Infrastructure Co. LLC
|
|
|
4.6
|
|
|
KKR Financial Holdings LLC
|
|
|
4.5
|
|
|
Ares Capital Corp.
|
|
|
3.7
|
|
|
Total
|
|
|
65.1
|
|
|
14
Manager's Analysis (Continued)
PowerShares Listed Private Equity Portfolio (ticker: PSP)
Growth of a $10,000 Investment Since Inception
Fund Performance History (%)
As of 30 April 2008
Index
|
|
Avg. Ann.
|
|
Fund Inception
|
|
|
|
1 Year
|
|
Avg. Ann.
|
|
Cumulative
|
|
Red Rocks Listed Private Equity Index
|
|
|
-23.50
|
|
|
|
-9.62
|
|
|
|
-14.27
|
|
|
S&P 500 Pure Growth Index
|
|
|
-3.17
|
|
|
|
3.38
|
|
|
|
5.19
|
|
|
Russell 2000
®
Index
|
|
|
-10.96
|
|
|
|
-2.82
|
|
|
|
-4.27
|
|
|
Fund
NAV Return
|
|
|
-23.50
|
|
|
|
-9.60
|
|
|
|
-14.17
|
|
|
Share Price Return
|
|
|
-24.43
|
|
|
|
-10.33
|
|
|
|
-15.25
|
|
|
Fund Inception: 24 October 2006
Performance may be higher or lower than the performance quoted. Investment returns and principal value will fluctuate and shares, when redeemed, may be worth more or less than their original cost. The Adviser has waived fees and reimbursed other expenses, absent which, performance would have been lower. The Adviser has contractually agreed to waive fees and/or pay certain Fund expenses through August 30, 2009. According to the Fund's current prospectus, the total gross annual operating expense ratio was indicated as 0.91%. In the Financial Highlights section of this Shareholder Report, the Fund's net (subsidized) total operating expense ratio was determined to be 0.71% while the Fund's gross total operating expense ratio was 0.72%. NAV and Share Price returns assume that dividends and capital gain distributions have been reinvested in the Fund at NAV and Share Price, respectively. The returns shown in the table above do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption or sale of Fund Shares. See invescopowershares.com to find the most recent month-end performance numbers.
The Index performance results are based upon a hypothetical investment in its constituent securities. Index returns do not represent Fund returns. 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. 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.
The S&P 500 Pure Growth Index and Russell 2000
®
Index are unmanaged indices used as a measurement of change in stock market conditions based on the average performance of approximately 154 and 2,000 common stocks, respectively.
Average annualized.
15
Manager's Analysis
PowerShares Lux Nanotech Portfolio (ticker: PXN)
The PowerShares Lux Nanotech Portfolio seeks to replicate, before fees and expenses, the Lux Nanotech Index
TM
which is designed to identify a group of companies involved in developing, manufacturing and funding nanotechnology applications. Companies may be involved in one or more stages of Lux's Nanotechnology Value Chain frameworks: Nanomaterials, Nanointermediates, Nano-enabled Products and Nanotools.
For the year ended April 30, 2008 the PowerShares Lux Nanotech Portfolio returned -19.51% underperforming the S&P 500
®
Index, which returned -4.68%.
The negative performance of the Fund was largely attributable to the poor performance of the following securities: Arrowhead Research Corp., Flamel Technologies S.A., Nanosphere Inc., Immunicon Corp., Nanophase Technologies Corp. and FEI Co. Together, these securities provided 61.00% of the Funds negative performance, relative to the broader US equity market. Conversely, the following securities contributed positively to the Fund: Cambridge Display Tech Inc., Elan Corp. PLC, Abraxis BioScience Inc. and NVE Corp. Lastly, the negative performance of the Fund was mostly attributable to overallocation in small-cap growth companies such as Flamel Technologies S.A. Conversely, most of the positive performance of the fund was attributable to stock selection within mid-cap growth companies such as Elan Corp. PLC.
Sector Breakdown (% of the Fund's
Net Assets) as of 30 April 2008
Commercial Services
|
|
|
12.2
|
|
|
Chemicals
|
|
|
11.9
|
|
|
Pharmaceuticals
|
|
|
11.8
|
|
|
Electronics
|
|
|
11.6
|
|
|
Miscellaneous Manufacturing
|
|
|
10.6
|
|
|
Semiconductors
|
|
|
8.9
|
|
|
Biotechnology
|
|
|
8.6
|
|
|
Computers
|
|
|
6.5
|
|
|
Software
|
|
|
5.3
|
|
|
Investment Companies
|
|
|
4.6
|
|
|
Energy-Alternate Sources
|
|
|
4.3
|
|
|
Auto Manufacturers
|
|
|
3.2
|
|
|
Other
|
|
|
0.5
|
|
|
Style Allocation (% of the Fund's Total
Investments) as of 30 April 2008
Small-Cap Growth
|
|
|
63.2
|
|
|
Large-Cap Value
|
|
|
16.0
|
|
|
Large-Cap Growth
|
|
|
9.9
|
|
|
Mid-Cap Growth
|
|
|
6.5
|
|
|
Small-Cap Value
|
|
|
4.4
|
|
|
Top Ten Fund Holdings (% of the Fund's
Net Assets) as of 30 April 2008
Security
|
|
Elan Corp. PLC ADR (Ireland)
|
|
|
6.4
|
|
|
NVE Corp.
|
|
|
6.3
|
|
|
Veeco Instruments, Inc.
|
|
|
5.6
|
|
|
Flamel Technologies ADR (France)
|
|
|
5.3
|
|
|
Accelrys, Inc.
|
|
|
5.3
|
|
|
FEI Co.
|
|
|
5.3
|
|
|
Biosante Pharmaceuticals, Inc.
|
|
|
5.3
|
|
|
Symyx Technologies, Inc.
|
|
|
5.1
|
|
|
Harris & Harris Group, Inc.
|
|
|
4.6
|
|
|
Nanophase Technologies Corp.
|
|
|
4.6
|
|
|
Total
|
|
|
53.8
|
|
|
16
Manager's Analysis (Continued)
PowerShares Lux Nanotech Portfolio (ticker: PXN)
Growth of a $10,000 Investment Since Inception
Fund Performance History (%)
As of 30 April 2008
Index
|
|
Avg. Ann.
|
|
Fund Inception
|
|
|
|
1 Year
|
|
Avg. Ann.
|
|
Cumulative
|
|
Lux Nanotech Index
TM
|
|
|
-19.06
|
|
|
|
-3.89
|
|
|
|
-9.52
|
|
|
S&P 500
®
Index
|
|
|
-4.68
|
|
|
|
8.23
|
|
|
|
22.04
|
|
|
Fund
NAV Return
|
|
|
-19.51
|
|
|
|
-3.15
|
|
|
|
-7.72
|
|
|
Share Price Return
|
|
|
-20.16
|
|
|
|
-3.30
|
|
|
|
-8.08
|
|
|
Fund Inception: 26 October 2005
Performance may be higher or lower than the performance quoted. Investment returns and principal value will fluctuate and shares, when redeemed, may be worth more or less than their original cost. The Adviser has waived fees and reimbursed other expenses, absent which, performance would have been lower. The Adviser has contractually agreed to waive fees and/or pay certain Fund expenses through August 30, 2009. According to the Fund's current prospectus, the total gross annual operating expense ratio was indicated as 0.77%. In the Financial Highlights section of this Shareholder Report, the Fund's net (subsidized) total operating expense ratio was determined to be 0.70% while the Fund's gross total operating expense ratio was 0.73%. NAV and Share Price returns assume that dividends and capital gain distributions have been reinvested in the Fund at NAV and Share Price, respectively. The returns shown in the table above do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption or sale of Fund Shares. See invescopowershares.com to find the most recent month-end performance numbers.
The Index performance results are based upon a hypothetical investment in its constituent securities. Index returns do not represent Fund returns. 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. 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.
The S&P 500
®
Index is an unmanaged index used as a measurement of change in stock market conditions based on the average performance of approximately 500 common stocks.
Average annualized.
17
Manager's Analysis
PowerShares S&P 500 BuyWrite Portfolio (ticker: PBP)
The PowerShares S&P 500 BuyWrite Portfolio is based on the CBOE S&P 500 BuyWrite Index and seeks investment results that correspond generally to the price and yield (before the Fund's fees and expenses) of that Index. The Index measures the total returns of a theoretical portfolio of S&P 500
®
Index stocks combined with S&P 500
®
Index call options which are systematically written (sold) against the portfolio through a "buy-write" strategy. The Index also reinvests the dividends and options premium received by the portfolio back into the component stocks as part of its total return strategy.
For the December 20, 2007 (PBP launch date) through April 30, 2008 period, the Fund was -0.19% on a total return basis. The CBOE S&P 500 BuyWrite Index was -0.73% while the S&P 500
®
Index was -4.45% over this same timeframe. A majority of the fund's outperformance versus the BuyWrite Index can be attributed to the one-day deferral (due to expiration) of the initial options sold against the portfolio.
U.S. large-cap stocks fared poorly during the reporting period based on a variety of factors including the U.S. credit crunch, a plunging dollar, a sharp rise in commodity prices, and the decelerating growth of the U.S. economy. At the same time, S&P 500
®
volatility, as measured by the CBOE "VIX" index, was significantly higher than historical averages. Although the equity market selloff was detrimental to the S&P 500
®
stock portfolio of PBP, higher volatility resulted in greater options premium generated for the Fund which helped mitigate the overall negative Fund return.
Sector Breakdown (% of the Fund's
Net Assets) as of 30 April 2008
Financials
|
|
|
17.4
|
|
|
Information Technology
|
|
|
16.3
|
|
|
Energy
|
|
|
14.3
|
|
|
Industrials
|
|
|
12.0
|
|
|
Health Care
|
|
|
11.5
|
|
|
Consumer Staples
|
|
|
10.7
|
|
|
Consumer Discretionary
|
|
|
8.7
|
|
|
Utilities
|
|
|
3.7
|
|
|
Materials
|
|
|
3.6
|
|
|
Telecommunication Services
|
|
|
3.5
|
|
|
Money Market Fund
|
|
|
0.1
|
|
|
Other
|
|
|
(1.8
|
)
|
|
Style Allocation (% of the Fund's Total
Investments) as of 30 April 2008
Large-Cap Value
|
|
|
50.4
|
|
|
Large-Cap Growth
|
|
|
37.7
|
|
|
Mid-Cap Value
|
|
|
6.5
|
|
|
Mid-Cap Growth
|
|
|
5.2
|
|
|
Small-Cap Growth
|
|
|
0.1
|
|
|
Small-Cap Value
|
|
|
0.1
|
|
|
Top Ten Fund Holdings (% of the Fund's
Net Assets) as of 30 April 2008
Security
|
|
Exxon Mobil Corp.
|
|
|
4.2
|
|
|
General Electric Co.
|
|
|
2.7
|
|
|
AT&T, Inc.
|
|
|
2.0
|
|
|
Microsoft Corp.
|
|
|
1.9
|
|
|
Procter & Gamble (The) Co.
|
|
|
1.7
|
|
|
Chevron Corp.
|
|
|
1.7
|
|
|
Johnson & Johnson
|
|
|
1.6
|
|
|
International Business Machines Corp.
|
|
|
1.4
|
|
|
Bank of America Corp.
|
|
|
1.4
|
|
|
JPMorgan Chase & Co.
|
|
|
1.4
|
|
|
Total
|
|
|
20.0
|
|
|
18
Manager's Analysis (Continued)
PowerShares S&P 500 BuyWrite Portfolio (ticker: PBP)
Fund Performance History (%)
As of 30 April 2008
Index
|
|
Fund Inception
Cumulative
|
|
CBOE S&P 500 BuyWrite Index
|
|
|
-0.73
|
|
|
S&P 500
®
Index
|
|
|
-4.45
|
|
|
Fund
NAV Return
|
|
|
-0.19
|
|
|
Share Price Return
|
|
|
-1.94
|
|
|
Fund Inception: 20 December 2007
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. Investment returns and principal value will fluctuate and shares, when redeemed, may be worth more or less than their original cost. According to the Fund's current prospectus, the expense ratio of 0.75% is expressed as a unitary fee to cover operating expenses and expenses incurred in connection with managing the portfolio. NAV and Share Price returns assume that dividends and capital gain distributions have been reinvested in the Fund at NAV and Share Price, respectively. The returns shown in the table above do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption or sale of Fund Shares. See invescopowershares.com to find the most recent month-end performance numbers.
The index performance results are hypothetical. Index returns do not represent Fund returns. 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. 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.
The S&P 500
®
Index is an unmanaged index used as a measurement of change in stock market conditions based on the average performance of approximately 500 common stocks.
19
Manager's Analysis
PowerShares Value Line Industry Rotation Portfolio (ticker: PYH)
The PowerShares Value Line Industry Rotation Portfolio is based on the Value Line Industry Rotation Index. The Index is comprised of 75 stocks chosen based on both their Timeliness
TM
rank and their industry Timeliness
TM
rank. The Index is designed to first rank all industries represented in the Value Line universe by their industry Timeliness
TM
. The Index then selects the highest ranked stock for Timeliness
TM
from each of the 50 highest Timeliness
TM
-rated industries, as well as the second highest Timeliness
TM
-ranked stock from each of the 25 highest rated industries. The Index is reconstituted and rebalanced quarterly using the same methodology as described above.
For the year ended April 30, 2008 the PowerShares Value Line Industry Rotation Portfolio returned -0.45%, outperforming the S&P 500
®
Index, which returned -4.68%.
For the year ended April 30, 2008, five of the ten sectors represented in the Fund generated positive returns. Stock selection in the financials, industrials and consumer discretionary sectors made the largest positive contributions to the performance of the Fund relative to the broader US equity market. Conversely, stock selection within the information technology and consumer staples sectors and overexposure in the energy sector partially offset the positive performance of the Fund. Overallocation within mid-cap growth companies was the largest positive contributor to the Fund's performance. Conversely, overallocation in small-cap value companies partially offset the positive performance of the Fund.
20
Manager's Analysis (Continued)
PowerShares Value Line Industry Rotation Portfolio (ticker: PYH)
Sector Breakdown (% of the Fund's
Net Assets) as of 30 April 2008
Oil & Gas
|
|
|
7.2
|
|
|
Pharmaceuticals
|
|
|
5.6
|
|
|
Chemicals
|
|
|
5.2
|
|
|
Software
|
|
|
5.1
|
|
|
Internet
|
|
|
4.3
|
|
|
Electronics
|
|
|
4.2
|
|
|
Commercial Services
|
|
|
4.1
|
|
|
Metal Fabricate/Hardware
|
|
|
3.9
|
|
|
Computers
|
|
|
3.8
|
|
|
Insurance
|
|
|
3.8
|
|
|
Beverages
|
|
|
3.7
|
|
|
Machinery-Diversified
|
|
|
3.0
|
|
|
Transportation
|
|
|
3.0
|
|
|
Engineering & Construction
|
|
|
2.8
|
|
|
Gas
|
|
|
2.8
|
|
|
Food
|
|
|
2.7
|
|
|
Oil & Gas Services
|
|
|
2.7
|
|
|
Environmental Control
|
|
|
2.6
|
|
|
Home Furnishings
|
|
|
2.6
|
|
|
Telecommunications
|
|
|
2.5
|
|
|
Healthcare-Products
|
|
|
2.4
|
|
|
Healthcare-Services
|
|
|
2.3
|
|
|
Semiconductors
|
|
|
2.3
|
|
|
Biotechnology
|
|
|
2.2
|
|
|
Mining
|
|
|
2.1
|
|
|
Distribution/Wholesale
|
|
|
1.5
|
|
|
Machinery-Construction & Mining
|
|
|
1.5
|
|
|
Agriculture
|
|
|
1.4
|
|
|
Coal
|
|
|
1.4
|
|
|
Aerospace/Defense
|
|
|
1.3
|
|
|
Closed-end Funds
|
|
|
1.3
|
|
|
Electric
|
|
|
1.3
|
|
|
Diversified Financial Services
|
|
|
1.2
|
|
|
Packaging & Containers
|
|
|
1.2
|
|
|
Media
|
|
|
1.0
|
|
|
Money Market Fund
|
|
|
0.1
|
|
|
Other
|
|
|
(0.1
|
)
|
|
Top Ten Fund Holdings (% of the Fund's
Net Assets) as of 30 April 2008
Security
|
|
Millennium Pharmaceuticals, Inc.
|
|
|
2.2
|
|
|
Lindsay Corp.
|
|
|
1.8
|
|
|
Southwestern Energy Co.
|
|
|
1.6
|
|
|
DeVry, Inc.
|
|
|
1.6
|
|
|
eResearch Technology, Inc.
|
|
|
1.6
|
|
|
CSX Corp.
|
|
|
1.6
|
|
|
Bucyrus International, Inc. Class A
|
|
|
1.6
|
|
|
LKQ Corp.
|
|
|
1.5
|
|
|
Valmont Industries, Inc.
|
|
|
1.5
|
|
|
Apache Corp.
|
|
|
1.5
|
|
|
Total
|
|
|
16.5
|
|
|
Style Allocation (% of the Fund's Total
Investments) as of 30 April 2008
Mid-Cap Growth
|
|
|
34.7
|
|
|
Large-Cap Growth
|
|
|
29.9
|
|
|
Small-Cap Growth
|
|
|
14.8
|
|
|
Mid-Cap Value
|
|
|
7.6
|
|
|
Large-Cap Value
|
|
|
6.5
|
|
|
Small-Cap Value
|
|
|
6.5
|
|
|
21
Manager's Analysis (Continued)
PowerShares Value Line Industry Rotation Portfolio (ticker: PYH)
Growth of a $10,000 Investment Since Inception
Fund Performance History (%)
As of 30 April 2008
Index
|
|
Avg. Ann.
|
|
Fund Inception
|
|
|
|
1 Year
|
|
Avg. Ann.
|
|
Cumulative
|
|
Value Line Industry Rotation Index
|
|
|
-0.46
|
|
|
|
7.53
|
|
|
|
10.82
|
|
|
S&P 500
®
Index
|
|
|
-4.68
|
|
|
|
1.32
|
|
|
|
1.87
|
|
|
Russell 2000
®
Index
|
|
|
-10.96
|
|
|
|
-4.78
|
|
|
|
-6.70
|
|
|
Fund
NAV Return
|
|
|
-0.45
|
|
|
|
7.58
|
|
|
|
10.86
|
|
|
Share Price Return
|
|
|
-0.52
|
|
|
|
7.51
|
|
|
|
10.78
|
|
|
Fund Inception: 1 December 2006
Performance may be higher or lower than the performance quoted. Investment returns and principal value will fluctuate and shares, when redeemed, may be worth more or less than their original cost. The Adviser has waived fees and reimbursed other expenses, absent which, performance would have been lower. The Adviser has contractually agreed to waive fees and/or pay certain Fund expenses through August 30, 2009. According to the Fund's current prospectus, the total gross annual operating expense ratio was indicated as 1.58%. In the Financial Highlights section of this Shareholder Report, the Fund's net (subsidized) total operating expense ratio was determined to be 0.73% while the Fund's gross total operating expense ratio was 0.95%. NAV and Share Price returns assume that dividends and capital gain distributions have been reinvested in the Fund at NAV and Share Price, respectively. The returns shown in the table above do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption or sale of Fund Shares. See invescopowershares.com to find the most recent month-end performance numbers.
The Index performance results are based upon a hypothetical investment in its constituent securities. Index returns do not represent Fund returns. 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. 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.
The S&P 500
®
Index and Russell 2000
®
Index are unmanaged indices used as a measurement of change in stock market conditions based on the average performance of approximately 500 and 2,000 common stocks, respectively.
Average annualized.
22
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Manager's Analysis
PowerShares Value Line Timeliness
TM
Select Portfolio (ticker: PIV)
The PowerShares Value Line Timeliness
TM
Select Portfolio seeks investment results that correspond generally to the price and yield (before the Fund's fees and expenses) of an equity index called the Value Line Timeliness
TM
Select Index. The Value Line Index is comprised of the 50 domestic stocks with the greatest capital appreciation potential as identified by the Value Line Timeliness Select Methodology. The Value Line Index seeks to provide market out-performance and reduce risk by incorporating Value Line's Safety Ranking into the investment process.
The objective of the Value Line Index is to represent a group of U.S. common stocks that have the potential to outperform the U.S. equity market. Stocks are selected using a proprietary rules-based discipline, which selects stocks with the greatest potential for capital appreciation based on the three core Value Line Ranking Systems.
The Value Line Index contains the 50 highest cumulative ranked stocks for Safety
TM
and Technicals
TM
chosen from the 100 number one ranked stocks for Timeliness
TM
. The Value Line Index removes stocks from the Value Line Index if they are no longer ranked number one for Timeliness
TM
and replaces removed stocks using the same methodology as described above.
For the year ended April 30, 2008 the PowerShares Value Line Timeliness
TM
Select Portfolio returned -4.72%, slightly underperforming the S&P 500
®
Index, which returned -4.68%.
For the year ended April 30, 2008 six of the ten sectors represented in the Fund generated positive returns. Stock selection in the financials and consumer discretionary sectors and overallocation in materials made the largest positive contributions to the performance of the Fund relative to the broader US equity market. Conversely, stock selection within the information technology, consumer staples and industrial sectors partially offset the positive performance of the Fund. Lastly, underallocation within large-cap growth companies was the largest contributor to the Fund's positive performance. Conversely, overallocation in small-cap growth companies partially offset the positive returns of the Fund, relative to the broader US equity market.
Sector Breakdown (% of the Fund's
Net Assets) as of 30 April 2008
Information Technology
|
|
|
32.0
|
|
|
Industrials
|
|
|
13.8
|
|
|
Materials
|
|
|
11.8
|
|
|
Energy
|
|
|
10.9
|
|
|
Consumer Discretionary
|
|
|
10.6
|
|
|
Health Care
|
|
|
7.6
|
|
|
Financials
|
|
|
5.8
|
|
|
Consumer Staples
|
|
|
3.7
|
|
|
Utilities
|
|
|
2.0
|
|
|
Telecommunication Services
|
|
|
1.9
|
|
|
Other
|
|
|
(0.1
|
)
|
|
Style Allocation (% of the Fund's Total
Investments) as of 30 April 2008
Large-Cap Growth
|
|
|
41.0
|
|
|
Mid-Cap Growth
|
|
|
34.4
|
|
|
Small-Cap Growth
|
|
|
15.5
|
|
|
Large-Cap Value
|
|
|
6.0
|
|
|
Mid-Cap Value
|
|
|
1.7
|
|
|
Small-Cap Value
|
|
|
1.4
|
|
|
Top Ten Fund Holdings (% of the Fund's
Net Assets) as of 30 April 2008
Security
|
|
Lindsay Corp.
|
|
|
2.9
|
|
|
Apple, Inc.
|
|
|
2.8
|
|
|
Southwestern Energy Co.
|
|
|
2.4
|
|
|
Amphenol Corp., Class A
|
|
|
2.3
|
|
|
GameStop Corp., Class A
|
|
|
2.3
|
|
|
Google, Inc., Class A
|
|
|
2.3
|
|
|
Weatherford International Ltd.
|
|
|
2.3
|
|
|
Perrigo Co.
|
|
|
2.2
|
|
|
Murphy Oil Corp.
|
|
|
2.2
|
|
|
Potash Corp. of Saskatchewan (Canada)
|
|
|
2.2
|
|
|
Total
|
|
|
23.9
|
|
|
24
Manager's Analysis (Continued)
PowerShares Value Line Timeliness
TM
Select Portfolio (ticker: PIV)
Growth of a $10,000 Investment Since Inception
Fund Performance History (%)
As of 30 April 2008
Index
|
|
Avg. Ann.
|
|
Fund Inception
|
|
|
|
1 Year
|
|
Avg. Ann.
|
|
Cumulative
|
|
Value Line Timeliness
TM
Select Index
|
|
|
-4.57
|
|
|
|
3.15
|
|
|
|
7.76
|
|
|
S&P 500
®
Index
|
|
|
-4.68
|
|
|
|
5.87
|
|
|
|
14.73
|
|
|
Russell 2000
®
Index
|
|
|
-10.96
|
|
|
|
2.95
|
|
|
|
7.24
|
|
|
Fund
NAV Return
|
|
|
-4.72
|
|
|
|
3.26
|
|
|
|
7.99
|
|
|
Share Price Return
|
|
|
-4.75
|
|
|
|
3.04
|
|
|
|
7.44
|
|
|
Fund Inception: 6 December 2005
Performance may be higher or lower than the performance quoted. Investment returns and principal value will fluctuate and shares, when redeemed, may be worth more or less than their original cost. The Adviser has waived fees and reimbursed other expenses during previous fiscal periods, absent which, performance during those fiscal periods would have been lower. While the Adviser has contractually agreed to waive and/or pay certain Fund expenses through August 30, 2009, the Fund is currently subject to recapture, which may result in an increased expense ratio. According to the Fund's current prospectus, the total gross annual operating expense ratio was indicated as 0.73%. In the Financial Highlights section of this Shareholder Report, the Fund's net total operating expense ratio was determined to be 0.70% while the Fund's gross total operating expense ratio was 0.70%. NAV and Share Price returns assume that dividends and capital gain distributions have been reinvested in the Fund at NAV and Share Price, respectively. The returns shown in the table above do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption or sale of Fund Shares. See invescopowershares.com to find the most recent month-end performance numbers.
The Index performance results are based upon a hypothetical investment in its constituent securities. Index returns do not represent Fund returns. 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. 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.
The S&P 500
®
Index and Russell 2000
®
Index are unmanaged indices used as a measurement of change in stock market conditions based on the average performance of approximately 500 and 2,000 common stocks, respectively.
Average annualized.
25
Manager's Analysis
PowerShares Water Resources Portfolio (ticker: PHO)
The Fund seeks investment results that correspond generally to the price and yield (before the Fund's fees and expenses) of the equity index, the Palisades Water Index. The Palisades Water Index includes U.S. exchange traded companies drawn from the following water sectors: water utilities, treatment, analytical, infrastructure, water resource management, and multi-business. The underlying strength is derived from the burgeoning demands on the global water industry, including population growth and urbanization, advanced treatment of contaminants, regulatory mandates, needed water infrastructure and institutional constraints.
In a particularly turbulent year, the PowerShares Water Resources Portfolio achieved relative out-performance over the period April 30, 2007 to April 30, 2008. PHO gained 8.02% while the major U.S. averages were negative. The NASDAQ Composite fell -3.67% and the S&P 500
®
lost -4.68%.
The positive performance of PHO relative to the U.S. market averages is a confluence of factors over the period. Early in the period while the U.S. economy was perceived to be slowing, many portfolio components benefited from the contribution from foreign revenues. The mid term dynamics focused on the global spread of economic weakness as international indexes were hard hit. Since PHO is focused on U.S. securities, this proved to be an asset class advantage. The last several months have seen a broad-based improvement. Over the reporting period, Lindsay Corp, Valmont Industries, and Badger Meter were the top contributors to the Fund's performance. Watts Water and Mueller Water were the greatest drags on Fund performance.
In the long term, the positive fundamentals of the water industry remain strong. The increasing value of water derives from the adjustment of a growing global population to the links between human health, economic development and resource sustainability. This is a theme that is increasingly recognized within the investment community.
This Fund has experienced some performance variation from the Index due to rebalance trading that occurred over several days and ownership issues which do not allow the Fund to fully replicate the Index.
Sector Breakdown (% of the Fund's
Net Assets) as of 30 April 2008
Miscellaneous Manufacturing
|
|
|
21.8
|
|
|
Engineering & Construction
|
|
|
15.0
|
|
|
Electronics
|
|
|
13.4
|
|
|
Machinery-Diversified
|
|
|
12.6
|
|
|
Water
|
|
|
11.1
|
|
|
Environmental Control
|
|
|
9.8
|
|
|
Metal Fabricate/Hardware
|
|
|
7.3
|
|
|
Electrical Components & Equipment
|
|
|
3.0
|
|
|
Hand/Machine Tools
|
|
|
2.9
|
|
|
Biotechnology
|
|
|
2.8
|
|
|
Money Market Fund
|
|
|
0.0
|
|
|
Other
|
|
|
0.3
|
|
|
Style Allocation (% of the Fund's Total
Investments) as of 30 April 2008
Mid-Cap Growth
|
|
|
37.1
|
|
|
Small-Cap Growth
|
|
|
20.9
|
|
|
Large-Cap Growth
|
|
|
18.4
|
|
|
Small-Cap Value
|
|
|
16.7
|
|
|
Mid-Cap Value
|
|
|
4.3
|
|
|
Large-Cap Value
|
|
|
2.6
|
|
|
Top Ten Fund Holdings (% of the Fund's
Net Assets) as of 30 April 2008
Security
|
|
URS Corp.
|
|
|
5.1
|
|
|
Valmont Industries, Inc.
|
|
|
4.8
|
|
|
Aecom Technology Corp.
|
|
|
4.7
|
|
|
Tetra Tech, Inc.
|
|
|
4.6
|
|
|
Veolia Environnement ADR (France)
|
|
|
4.3
|
|
|
Lindsay Corp.
|
|
|
4.1
|
|
|
Danaher Corp.
|
|
|
4.0
|
|
|
Agilent Technologies, Inc.
|
|
|
3.9
|
|
|
Itron, Inc.
|
|
|
3.9
|
|
|
ITT Corp.
|
|
|
3.3
|
|
|
Total
|
|
|
42.7
|
|
|
26
Manager's Analysis (Continued)
PowerShares Water Resources Portfolio (ticker: PHO)
Growth of a $10,000 Investment Since Inception
Fund Performance History (%)
As of 30 April 2008
Index
|
|
Avg. Ann.
|
|
Fund Inception
|
|
|
|
1 Year
|
|
Avg. Ann.
|
|
Cumulative
|
|
Palisades Water Index
|
|
|
12.57
|
|
|
|
16.29
|
|
|
|
43.80
|
|
|
S&P 500
®
Index
|
|
|
-4.68
|
|
|
|
5.87
|
|
|
|
14.73
|
|
|
Dow Jones Utility Index
|
|
|
-1.68
|
|
|
|
10.20
|
|
|
|
26.35
|
|
|
Fund
NAV Return
|
|
|
8.02
|
|
|
|
14.04
|
|
|
|
37.02
|
|
|
Share Price Return
|
|
|
7.55
|
|
|
|
13.31
|
|
|
|
34.98
|
|
|
Fund Inception: 6 December 2005
Performance may be higher or lower than the performance quoted. Investment returns and principal value will fluctuate and shares, when redeemed, may be worth more or less than their original cost. The Adviser has waived fees and reimbursed other expenses during previous fiscal periods, absent which, performance during those fiscal periods would have been lower. While the Adviser has contractually agreed to waive and/or pay certain Fund expenses through August 30, 2009, the Fund is currently subject to recapture, which may result in an increased expense ratio. According to the Fund's current prospectus, the total gross annual operating expense ratio was indicated as 0.68%. In the Financial Highlights section of this Shareholder Report, the Fund's net total operating expense ratio was determined to be 0.64% while the Fund's gross total operating expense ratio was 0.63%. NAV and Share Price returns assume that dividends and capital gain distributions have been reinvested in the Fund at NAV and Share Price, respectively. The returns shown in the table above do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption or sale of Fund Shares. See invescopowershares.com to find the most recent month-end performance numbers.
The Index performance results are based upon a hypothetical investment in its constituent securities. Index returns do not represent Fund returns. 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. 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.
The S&P 500
®
Index and Dow Jones Utility Index are unmanaged indices used as a measurement of change in stock market conditions based on the average performance of approximately 500 and 15 common stocks, respectively.
Average annualized.
27
Manager's Analysis
PowerShares WilderHill Clean Energy Portfolio (ticker: PBW)
The PowerShares WilderHill Clean Energy Portfolio is based on the WilderHill Clean Energy Index and it seeks investment results that correspond generally to the price and yield (before the Fund's fees and expenses) of that equity index.
Over the past twelve months the Fund returned 8.55%, although with significantly greater volatility than the small change implies. This period commenced in Spring 2007 and initially it saw a continuation of an upward trend. For the first eight months there was sizeable upward movement broken twice by significant, albeit brief downturns; each of those two downturns, however were soon followed by new highs. The third downturn was by far the largest beginning at the start of 2008, and has persisted though the end of this period.
The solar sector in particular contributed to that initial upward movement; similarly its robust downturn in 2008 was a key driver for strong downward performance. Solar having run up high P/E ratios and rich valuations regressed to the mean. Biofuels remained out of favor over much of this period and hence were not able to offset the downturn in solar. Energy efficiency and wind power however have seen some strengthening.
This Fund has experienced some performance variation from the Index due to rebalance trading that occurred over several days and ownership issues which do not allow the Fund to fully replicate the Index.
Sector Breakdown (% of the Fund's
Net Assets) as of 30 April 2008
Energy-Alternate Sources
|
|
|
40.5
|
|
|
Semiconductors
|
|
|
15.1
|
|
|
Electrical Components & Equipment
|
|
|
12.4
|
|
|
Electric
|
|
|
11.1
|
|
|
Chemicals
|
|
|
7.6
|
|
|
Computers
|
|
|
3.7
|
|
|
Auto Parts & Equipment
|
|
|
3.2
|
|
|
Electronics
|
|
|
2.6
|
|
|
Food
|
|
|
2.4
|
|
|
Machinery-Diversified
|
|
|
1.2
|
|
|
Other
|
|
|
0.2
|
|
|
Style Allocation (% of the Fund's Total
Investments) as of 30 April 2008
Small-Cap Growth
|
|
|
52.4
|
|
|
Large-Cap Growth
|
|
|
15.9
|
|
|
Mid-Cap Growth
|
|
|
14.9
|
|
|
Small-Cap Value
|
|
|
9.8
|
|
|
Large-Cap Value
|
|
|
4.1
|
|
|
Mid-Cap Value
|
|
|
2.9
|
|
|
Top Ten Fund Holdings (% of the Fund's
Net Assets) as of 30 April 2008
Security
|
|
Trina Solar Ltd. ADR (Cayman Islands)
|
|
|
4.0
|
|
|
JA Solar Holdings Co. Ltd. ADR
(China)
|
|
|
4.0
|
|
|
First Solar, Inc.
|
|
|
3.9
|
|
|
Yingli Green Energy Holding Co. Ltd.
ADR (China)
|
|
|
3.7
|
|
|
SunPower Corp., Class A
|
|
|
3.5
|
|
|
Suntech Power Holdings Co. Ltd. ADR
(China)
|
|
|
3.5
|
|
|
Ormat Technologies, Inc.
|
|
|
3.5
|
|
|
Evergreen Solar, Inc.
|
|
|
3.0
|
|
|
Zoltek Cos., Inc.
|
|
|
3.0
|
|
|
Energy Conversion Devices, Inc.
|
|
|
2.8
|
|
|
Total
|
|
|
34.9
|
|
|
28
Manager's Analysis (Continued)
PowerShares WilderHill Clean Energy Portfolio (ticker: PBW)
Growth of a $10,000 Investment Since Inception
Fund Performance History (%)
As of 30 April 2008
Index
|
|
Avg. Ann.
|
|
Fund Inception
|
|
|
|
1 Year
|
|
Avg. Ann.
|
|
Cumulative
|
|
WilderHill Clean Energy Index
|
|
|
7.39
|
|
|
|
8.77
|
|
|
|
30.52
|
|
|
NASDAQ Composite Index
|
|
|
-4.45
|
|
|
|
5.14
|
|
|
|
17.22
|
|
|
S&P 500
®
Index
|
|
|
-4.68
|
|
|
|
6.32
|
|
|
|
21.44
|
|
|
Fund
NAV Return
|
|
|
8.55
|
|
|
|
9.84
|
|
|
|
34.50
|
|
|
Share Price Return
|
|
|
8.44
|
|
|
|
9.86
|
|
|
|
34.62
|
|
|
Fund Inception: 3 March 2005
Performance may be higher or lower than the performance quoted. Investment returns and principal value will fluctuate and shares, when redeemed, may be worth more or less than their original cost. The Adviser has waived fees and reimbursed other expenses, absent which, performance would have been lower. The Adviser has contractually agreed to waive fees and/or pay certain Fund expenses through August 30, 2009. According to the Fund's current prospectus, the total gross annual operating expense ratio was indicated as 0.70%. In the Financial Highlights section of this Shareholder Report, the Fund's net (subsidized) total operating expense ratio was determined to be 0.67% while the Fund's gross total operating expense ratio was 0.67%. NAV and Share Price returns assume that dividends and capital gain distributions have been reinvested in the Fund at NAV and Share Price, respectively. The returns shown in the table above do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption or sale of Fund Shares. See invescopowershares.com to find the most recent month-end performance numbers.
The Index performance results are based upon a hypothetical investment in its constituent securities. Index returns do not represent Fund returns. 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. 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.
The NASDAQ Composite Index and S&P 500
®
Index are unmanaged indices used as a measurement of change in stock market conditions based on the average performance of approximately 3,087 and 500 common stocks, respectively.
Average annualized.
29
Manager's Analysis
PowerShares WilderHill Progressive Energy Portfolio (ticker: PUW)
The PowerShares WilderHill Progressive Energy Portfolio is based on the WilderHill Progressive Energy Index and it seeks investment results that correspond generally to the price and yield (before the Fund's fees and expenses) of that equity index.
Over the past twelve months ended April 30, 2008, the Fund declined 0.96%, although there has been significantly more volatility over the period than this change implies. Prior to this reporting period a run-up in valuations had begun, and it continued, reaching a peak in Summer 2007. The latter half of 2007 then saw mainly sideways movement with the inflection point a strong downturn that commenced almost exactly at the start of 2008. After reaching a bottom in the first quarter of 2008, the Fund moved to a rebound and ended the period almost where it was 12 months prior.
In contrast to a prior period when greater attention was paid to possible carbon regulations and climate risk, that outlook was changed somewhat early in this latest period. Likewise there were moderate declines in uranium stocks, in 'clean-coal', some natural gas utilization, energy efficiency, and pollution control technologies.
Sector Breakdown (% of the Fund's
Net Assets) as of 30 April 2008
Oil & Gas
|
|
|
16.8
|
|
|
Electric
|
|
|
10.5
|
|
|
Chemicals
|
|
|
8.5
|
|
|
Energy-Alternate Sources
|
|
|
8.4
|
|
|
Electrical Components & Equipment
|
|
|
8.0
|
|
|
Auto Parts & Equipment
|
|
|
7.6
|
|
|
Miscellaneous Manufacturing
|
|
|
7.6
|
|
|
Mining
|
|
|
7.3
|
|
|
Environmental Control
|
|
|
6.6
|
|
|
Electronics
|
|
|
6.2
|
|
|
Agriculture
|
|
|
3.2
|
|
|
Hand/Machine Tools
|
|
|
3.0
|
|
|
Telecommunications
|
|
|
3.0
|
|
|
Aerospace/Defense
|
|
|
2.4
|
|
|
Investment Companies
|
|
|
0.5
|
|
|
Semiconductors
|
|
|
0.4
|
|
|
Money Market Fund
|
|
|
0.1
|
|
|
Other
|
|
|
(0.1
|
)
|
|
Top Ten Fund Holdings (% of the Fund's
Net Assets) as of 30 April 2008
Security
|
|
Southwestern Energy Co.
|
|
|
3.9
|
|
|
USEC, Inc.
|
|
|
3.7
|
|
|
Fuel Tech, Inc.
|
|
|
3.4
|
|
|
Chesapeake Energy Corp.
|
|
|
3.4
|
|
|
Questar Corp.
|
|
|
3.4
|
|
|
CPFL Energia S.A. ADR (Brazil)
|
|
|
3.3
|
|
|
Range Resources Corp.
|
|
|
3.2
|
|
|
Anderson (The), Inc.
|
|
|
3.2
|
|
|
Cameco Corp. (Canada)
|
|
|
3.2
|
|
|
Sociedad Quimica y Minera de
Chile S.A. ADR (Chile)
|
|
|
3.2
|
|
|
Total
|
|
|
33.9
|
|
|
Style Allocation (% of the Fund's Total
Investments) as of 30 April 2008
Large-Cap Growth
|
|
|
23.1
|
|
|
Small-Cap Value
|
|
|
20.3
|
|
|
Mid-Cap Growth
|
|
|
19.9
|
|
|
Small-Cap Growth
|
|
|
16.1
|
|
|
Large-Cap Value
|
|
|
14.6
|
|
|
Mid-Cap Value
|
|
|
6.0
|
|
|
30
Manager's Analysis (Continued)
PowerShares WilderHill Progressive Energy Portfolio (ticker: PUW)
Growth of a $10,000 Investment Since Inception
Fund Performance History (%)
As of 30 April 2008
Index
|
|
Avg. Ann.
|
|
Fund Inception
|
|
|
|
1 Year
|
|
Avg. Ann.
|
|
Cumulative
|
|
WilderHill Progressive Energy Index
|
|
|
-1.26
|
|
|
|
9.13
|
|
|
|
14.23
|
|
|
NASDAQ Composite Index
|
|
|
-4.45
|
|
|
|
1.89
|
|
|
|
2.90
|
|
|
S&P 500
®
Index
|
|
|
-4.68
|
|
|
|
2.34
|
|
|
|
3.58
|
|
|
Fund
NAV Return
|
|
|
-0.96
|
|
|
|
8.98
|
|
|
|
13.91
|
|
|
Share Price Return
|
|
|
-1.14
|
|
|
|
8.89
|
|
|
|
13.80
|
|
|
Fund Inception: 24 October 2006
Performance may be higher or lower than the performance quoted. Investment returns and principal value will fluctuate and shares, when redeemed, may be worth more or less than their original cost. The Adviser has waived fees and reimbursed other expenses, absent which, performance would have been lower. The Adviser has contractually agreed to waive fees and/or pay certain Fund expenses through August 30, 2009. According to the Fund's current prospectus, the total gross annual operating expense ratio was indicated as 1.35%. In the Financial Highlights section of this Shareholder Report, the Fund's net (subsidized) total operating expense ratio was determined to be 0.73% while the Fund's gross total operating expense ratio was 0.88%. NAV and Share Price returns assume that dividends and capital gain distributions have been reinvested in the Fund at NAV and Share Price, respectively. The returns shown in the table above do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption or sale of Fund Shares. See invescopowershares.com to find the most recent month-end performance numbers.
The Index performance results are based upon a hypothetical investment in its constituent securities. Index returns do not represent Fund returns. 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. 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.
The NASDAQ Composite Index and S&P 500
®
Index are unmanaged indices used as a measurement of change in stock market conditions based on the average performance of approximately 3,087 and 500 common stocks, respectively.
Average annualized.
31
Funds' Distribution History
|
|
Ex-Dividend
|
|
3/25/08
|
|
3/20/08
|
|
12/21/07
|
|
9/21/07
|
|
6/15/07
|
|
3/16/07
|
|
|
|
Record
|
|
3/27/08
|
|
3/25/08
|
|
12/26/07
|
|
9/25/07
|
|
6/19/07
|
|
3/20/07
|
|
|
|
Payable
|
|
3/31/08
|
|
3/31/08
|
|
12/31/07
|
|
9/28/07
|
|
6/29/07
|
|
3/30/07
|
|
Fund
|
|
Ticker
|
|
|
|
|
|
|
|
|
|
|
|
|
|
PowerShares Aerospace & Defense Portfolio
|
|
PPA
|
|
|
|
|
|
|
|
|
|
|
0.01399
|
|
|
|
0.01038
|
|
|
|
0.01862
|
|
|
|
0.01223
|
|
|
PowerShares Cleantech
TM
Portfolio
|
|
PZ
D
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
PowerShares DWA Technical Leaders
TM
Portfolio
|
|
PDP
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
0.02466
|
|
|
|
|
|
|
|
|
|
|
PowerShares Golden Dragon Halter USX China Portfolio
|
|
PGJ
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
0.04904
|
|
|
|
0.16303
|
|
|
|
|
|
|
PowerShares Listed Private Equity Portfolio
|
|
PSP
|
|
|
|
|
|
|
0.23844
|
|
|
|
0.54101
|
|
|
|
0.11266
|
|
|
|
0.21792
|
|
|
|
0.07235
|
|
|
PowerShares Lux Nanotech Portfolio
|
|
PXN
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
PowerShares S&P 500 BuyWrite Portfolio
|
|
PBP
|
|
|
0.05250
|
|
|
|
|
|
|
|
|
|
|
|
NA
|
|
|
|
NA
|
|
|
|
NA
|
|
|
PowerShares Value Line Industry Rotation Portfolio
|
|
PYH
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
0.01475
|
|
|
|
|
|
|
|
|
|
|
PowerShares Value Line Timeliness
TM
Select Portfolio
|
|
PIV
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
PowerShares Water Resources Portfolio
|
|
PHO
|
|
|
|
|
|
|
0.01822
|
|
|
|
0.01763
|
|
|
|
0.01328
|
|
|
|
0.03052
|
|
|
|
0.02358
|
|
|
PowerShares WilderHill Clean Energy Portfolio
|
|
PBW
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
PowerShares WilderHill Progressive Energy Portfolio
|
|
PUW
|
|
|
|
|
|
|
0.01258
|
|
|
|
0.03609
|
|
|
|
0.02001
|
|
|
|
0.06309
|
|
|
|
0.01250
|
|
|
32
|
|
12/15/06
|
|
9/15/06
|
|
6/16/06
|
|
12/30/05
|
|
12/16/05
|
|
9/16/05
|
|
6/17/05
|
|
|
|
12/19/06
|
|
9/16/06
|
|
6/20/06
|
|
1/4/06
|
|
12/20/05
|
|
9/20/05
|
|
6/21/05
|
|
|
|
12/29/06
|
|
9/29/06
|
|
6/30/06
|
|
1/31/06
|
|
12/30/05
|
|
9/30/05
|
|
6/30/05
|
|
Fund
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
PowerShares Aerospace & Defense Portfolio
|
|
|
0.00968
|
|
|
|
0.02002
|
|
|
|
0.02120
|
|
|
|
|
|
|
|
0.02191
|
|
|
NA
|
|
NA
|
|
PowerShares Cleantech
TM
Portfolio
|
|
|
|
|
|
|
NA
|
|
|
|
NA
|
|
|
|
NA
|
|
|
|
NA
|
|
|
NA
|
|
NA
|
|
PowerShares DWA Technical Leaders
TM
Portfolio
|
|
|
NA
|
|
|
|
NA
|
|
|
|
NA
|
|
|
|
NA
|
|
|
|
NA
|
|
|
NA
|
|
NA
|
|
PowerShares Golden Dragon Halter USX China Portfolio
|
|
|
0.00598
|
|
|
|
0.08011
|
|
|
|
0.12430
|
|
|
|
|
|
|
|
0.00132
|
|
|
|
0.11161
|
|
|
|
0.04962
|
|
|
PowerShares Listed Private Equity Portfolio
|
|
|
0.26528
|
|
|
|
NA
|
|
|
|
NA
|
|
|
|
NA
|
|
|
|
NA
|
|
|
NA
|
|
NA
|
|
PowerShares Lux Nanotech Portfolio
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
0.06725
|
|
|
|
0.01063
|
|
|
NA
|
|
NA
|
|
PowerShares S&P 500 BuyWrite Portfolio
|
|
|
NA
|
|
|
|
NA
|
|
|
|
NA
|
|
|
|
NA
|
|
|
|
NA
|
|
|
NA
|
|
NA
|
|
PowerShares Value Line Industry Rotation Portfolio
|
|
|
0.01016
|
|
|
|
NA
|
|
|
|
NA
|
|
|
|
NA
|
|
|
|
NA
|
|
|
NA
|
|
NA
|
|
PowerShares Value Line Timeliness
TM
Select Portfolio
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NA
|
|
NA
|
|
PowerShares Water Resources Portfolio
|
|
|
0.07779
|
|
|
|
0.03621
|
|
|
|
0.03737
|
|
|
|
0.02682
|
|
|
|
0.00627
|
|
|
NA
|
|
NA
|
|
PowerShares WilderHill Clean Energy Portfolio
|
|
|
0.03675
|
|
|
|
|
|
|
|
0.01037
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
PowerShares WilderHill Progressive Energy Portfolio
|
|
|
0.00451
|
|
|
|
NA
|
|
|
|
NA
|
|
|
|
NA
|
|
|
|
NA
|
|
|
NA
|
|
NA
|
|
33
Frequency Distribution of Discounts & Premiums
Since Inception through April 30, 2008
|
|
|
|
Closing Price Above NAV (bps)
|
|
Ticker
|
|
Fund Name
|
|
Inception
|
|
Days
|
|
0-24
|
|
25-49
|
|
50-99
|
|
100-149
|
|
150-199
|
|
200+
|
|
PPA
|
|
PowerShares Aerospace & Defense
Portfolio
|
|
10
/26/05
|
|
|
631
|
|
|
|
304
|
|
|
|
10
|
|
|
|
2
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
PZ
D
|
|
PowerShares Cleantech
TM
Portfolio
|
|
10
/24/06
|
|
|
381
|
|
|
|
128
|
|
|
|
12
|
|
|
|
8
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
PDP
|
|
PowerShares DWA Technical Leaders
TM
Portfolio
|
|
3
/1/07
|
|
|
295
|
|
|
|
148
|
|
|
|
5
|
|
|
|
3
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
PGJ
|
|
PowerShares Golden Dragon Halter
USX China Portfolio
|
|
12
/9/04
|
|
|
853
|
|
|
|
413
|
|
|
|
101
|
|
|
|
19
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
PSP
|
|
PowerShares Listed Private Equity
Portfolio
|
|
10
/24/06
|
|
|
381
|
|
|
|
180
|
|
|
|
8
|
|
|
|
0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
PXN
|
|
PowerShares Lux Nanotech Portfolio
|
|
10
/26/05
|
|
|
631
|
|
|
|
259
|
|
|
|
41
|
|
|
|
14
|
|
|
|
5
|
|
|
|
1
|
|
|
|
|
|
|
PBP
|
|
PowerShares S&P 500 BuyWrite
Portfolio
|
|
12
/20/07
|
|
|
89
|
|
|
|
38
|
|
|
|
11
|
|
|
|
10
|
|
|
|
|
|
|
|
1
|
|
|
|
|
|
|
PYH
|
|
PowerShares Value Line Industry
Rotation Portfolio
|
|
12
/1/06
|
|
|
354
|
|
|
|
149
|
|
|
|
4
|
|
|
|
1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
PIV
|
|
PowerShares Value Line Timeliness
TM
Select Portfolio
|
|
12
/6/05
|
|
|
603
|
|
|
|
278
|
|
|
|
20
|
|
|
|
3
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
PHO
|
|
PowerShares Water Resources Portfolio
|
|
12
/6/05
|
|
|
603
|
|
|
|
305
|
|
|
|
83
|
|
|
|
14
|
|
|
|
1
|
|
|
|
|
|
|
|
|
|
|
PBW
|
|
PowerShares WilderHill Clean
Energy Portfolio
|
|
3
/3/05
|
|
|
796
|
|
|
|
383
|
|
|
|
87
|
|
|
|
11
|
|
|
|
2
|
|
|
|
|
|
|
|
|
|
|
PUW
|
|
PowerShares WilderHill Progressive
Energy Portfolio
|
|
10
/24/06
|
|
|
381
|
|
|
|
142
|
|
|
|
13
|
|
|
|
4
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
34
|
|
Closing Price Below NAV (bps)
|
|
Ticker
|
|
-0-24
|
|
-25-49
|
|
-50-99
|
|
-100-149
|
|
-150-199
|
|
-200+
|
|
PPA
|
|
|
312
|
|
|
|
3
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
PZ
D
|
|
|
227
|
|
|
|
6
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
PDP
|
|
|
138
|
|
|
|
|
|
|
|
1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
PGJ
|
|
|
290
|
|
|
|
25
|
|
|
|
5
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
PSP
|
|
|
185
|
|
|
|
7
|
|
|
|
1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
PXN
|
|
|
281
|
|
|
|
25
|
|
|
|
3
|
|
|
|
|
|
|
|
1
|
|
|
|
1
|
|
|
PBP
|
|
|
22
|
|
|
|
5
|
|
|
|
2
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
PYH
|
|
|
197
|
|
|
|
3
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
PIV
|
|
|
299
|
|
|
|
3
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
PHO
|
|
|
190
|
|
|
|
8
|
|
|
|
1
|
|
|
|
1
|
|
|
|
|
|
|
|
|
|
|
PBW
|
|
|
282
|
|
|
|
30
|
|
|
|
1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
PUW
|
|
|
218
|
|
|
|
4
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
35
Fees and Expenses
As a shareholder of a Fund of the PowerShares Exchange-Traded Fund Trust, you incur Fund expenses. The expense examples below are intended to help you understand your ongoing costs (in dollars) of investing in the Funds and to compare these costs with the ongoing costs of investing in other funds.
The example is based on an investment of $1,000 invested at the beginning of the period and held through the six-month period (or shorter) ended April 30, 2008.
Actual Expenses
The first line in the following tables provides information about actual account values and actual expenses. You may use the information in this line, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the first line under the heading "Expenses Paid During the Six-Month Period" to estimate the expenses you paid on your account during this period.
Hypothetical Example for Comparison Purposes
The second line in the following tables provides information about hypothetical account values and hypothetical expenses based on the Funds' actual expense ratio and an assumed annualized rate of return of 5% per year before expenses, which is not the Funds' actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Funds and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds.
Please note that the expenses shown in the tables are meant to highlight your ongoing costs only, and do not reflect any transactional costs such as sales charges (loads). Therefore the second line in the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.
|
|
Beginning
Account
Value
November 1, 2007
|
|
Ending
Account
Value
April 30, 2008
|
|
Annualized
Expense Ratio
Based on the
Six-Month Period
|
|
Expenses Paid
During the
Six-Month Period (1)
|
|
PowerShares Aerospace & Defense Portfolio
Actual
|
|
$
|
1,000.00
|
|
|
$
|
875.90
|
|
|
|
0.66
|
%
|
|
$
|
3.08
|
|
|
Hypothetical (5% return before expenses)
|
|
$
|
1,000.00
|
|
|
$
|
1,021.58
|
|
|
|
0.66
|
%
|
|
$
|
3.32
|
|
|
PowerShares Cleantech
TM
Portfolio
Actual
|
|
$
|
1,000.00
|
|
|
$
|
977.32
|
|
|
|
0.67
|
%
|
|
$
|
3.29
|
|
|
Hypothetical (5% return before expenses)
|
|
$
|
1,000.00
|
|
|
$
|
1,021.53
|
|
|
|
0.67
|
%
|
|
$
|
3.37
|
|
|
PowerShares DWA Technical Leaders
TM
Portfolio
Actual
|
|
$
|
1,000.00
|
|
|
$
|
935.18
|
|
|
|
0.71
|
%
|
|
$
|
3.42
|
|
|
Hypothetical (5% return before expenses)
|
|
$
|
1,000.00
|
|
|
$
|
1,021.33
|
|
|
|
0.71
|
%
|
|
$
|
3.57
|
|
|
PowerShares Golden Dragon Halter
USX China Portfolio
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Actual
|
|
$
|
1,000.00
|
|
|
$
|
745.85
|
|
|
|
0.68
|
%
|
|
$
|
2.95
|
|
|
Hypothetical (5% return before expenses)
|
|
$
|
1,000.00
|
|
|
$
|
1,021.48
|
|
|
|
0.68
|
%
|
|
$
|
3.42
|
|
|
PowerShares Listed Private Equity Portfolio
Actual
|
|
$
|
1,000.00
|
|
|
$
|
813.78
|
|
|
|
0.70
|
%
|
|
$
|
3.16
|
|
|
Hypothetical (5% return before expenses)
|
|
$
|
1,000.00
|
|
|
$
|
1,021.38
|
|
|
|
0.70
|
%
|
|
$
|
3.52
|
|
|
36
Fees and Expenses (Continued)
|
|
Beginning
Account
Value
November 1, 2007
|
|
Ending
Account
Value
April 30, 2008
|
|
Annualized
Expense Ratio
Based on the
Six-Month Period
|
|
Expenses Paid
During the
Six-Month Period (1)
|
|
PowerShares Lux Nanotech Portfolio
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Actual
|
|
$
|
1,000.00
|
|
|
$
|
802.17
|
|
|
|
0.70
|
%
|
|
$
|
3.14
|
|
|
Hypothetical (5% return before expenses)
|
|
$
|
1,000.00
|
|
|
$
|
1,021.38
|
|
|
|
0.70
|
%
|
|
$
|
3.52
|
|
|
|
|
Beginning
Account
Value
December 20, 2007
(Fund Inception)
|
|
Ending
Account
Value
April 30, 2008
|
|
Annualized
Expense Ratio
Based on the
Number of Days
in the Period
|
|
Expenses Paid
During Period (2)
December 20, 2007
(Fund
Inception) to
April 30, 2008
|
|
PowerShares S&P 500 BuyWrite Portfolio
Actual
|
|
$
|
1,000.00
|
|
|
$
|
998.15
|
|
|
|
0.75
|
%
|
|
$
|
2.70
|
|
|
Hypothetical (5% return before expenses)
|
|
$
|
1,000.00
|
|
|
$
|
1,021.13
|
|
|
|
0.75
|
%
|
|
$
|
3.77
|
|
|
|
|
Beginning
Account
Value
November 1, 2007
|
|
Ending
Account
Value
April 30, 2008
|
|
Annualized
Expense Ratio
Based on the
Six-Month Period
|
|
Expenses Paid
During the
Six-Month Period (1)
|
|
PowerShares Value Line Industry Rotation Portfolio
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Actual
|
|
$
|
1,000.00
|
|
|
$
|
901.76
|
|
|
|
0.71
|
%
|
|
$
|
3.36
|
|
|
Hypothetical (5% return before expenses)
|
|
$
|
1,000.00
|
|
|
$
|
1,021.33
|
|
|
|
0.71
|
%
|
|
$
|
3.57
|
|
|
PowerShares Value Line Timeliness
TM
Select Portfolio
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Actual
|
|
$
|
1,000.00
|
|
|
$
|
868.84
|
|
|
|
0.70
|
%
|
|
$
|
3.25
|
|
|
Hypothetical (5% return before expenses)
|
|
$
|
1,000.00
|
|
|
$
|
1,021.38
|
|
|
|
0.70
|
%
|
|
$
|
3.52
|
|
|
PowerShares Water Resource Portfolio
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Actual
|
|
$
|
1,000.00
|
|
|
$
|
928.50
|
|
|
|
0.62
|
%
|
|
$
|
2.97
|
|
|
Hypothetical (5% return before expenses)
|
|
$
|
1,000.00
|
|
|
$
|
1,021.78
|
|
|
|
0.62
|
%
|
|
$
|
3.12
|
|
|
PowerShares WilderHill Clean Energy Portfolio
Actual
|
|
$
|
1,000.00
|
|
|
$
|
826.69
|
|
|
|
0.66
|
%
|
|
$
|
3.00
|
|
|
Hypothetical (5% return before expenses)
|
|
$
|
1,000.00
|
|
|
$
|
1,021.58
|
|
|
|
0.66
|
%
|
|
$
|
3.32
|
|
|
PowerShares WilderHill Progressive Energy Portfolio
Actual
|
|
$
|
1,000.00
|
|
|
$
|
900.00
|
|
|
|
0.70
|
%
|
|
$
|
3.31
|
|
|
Hypothetical (5% return before expenses)
|
|
$
|
1,000.00
|
|
|
$
|
1,021.38
|
|
|
|
0.70
|
%
|
|
$
|
3.52
|
|
|
(1) Expenses are calculated using the annualized expense ratio, which represents the ongoing expenses as a percentage of net assets for the six months ended April 30, 2008. Expenses are calculated by multiplying the Fund's annualized expense ratio by the average account value for the period; then multiplying the result by 182 and then dividing the result by 366. Expense ratios for the most recent half-year may differ from expense ratios based on the one year data in the financial highlights.
(2) Expenses are calculated using the annualized expense ratio, which represents the ongoing expenses as a percentage of net assets for the period ended April 30, 2008. Expense are calculated by multiplying the Fund's annualized expense ratio by the average account value for the period; then multiplying the result by 133 and then dividing the result by 366. Hypothetical expenses are calculated by multiplying the Fund's annualized expense ratio by the average account value for the period; then multiplying the result by 182 and then dividing the result by 366.
37
Schedule of Investments
PowerShares Aerospace and Defense Portfolio
April 30, 2008
Number
of Shares
|
|
|
|
Value
|
|
|
|
Common Stocks99.8%
|
|
|
|
Aerospace/Defense55.9%
|
|
|
37,864
|
|
|
AAR Corp.*
|
|
$
|
886,018
|
|
|
|
19,719
|
|
|
Aerovironment, Inc.*
|
|
|
471,481
|
|
|
|
32,053
|
|
|
Alliant Techsystems, Inc.*
|
|
|
3,525,189
|
|
|
|
21,397
|
|
|
Argon ST, Inc.*
|
|
|
393,919
|
|
|
|
231,881
|
|
|
Boeing Co.
|
|
|
19,677,422
|
|
|
|
26,116
|
|
|
Cubic Corp.
|
|
|
708,005
|
|
|
|
40,422
|
|
|
DRS Technologies, Inc.
|
|
|
2,523,950
|
|
|
|
10,309
|
|
|
Ducommun, Inc.*
|
|
|
335,867
|
|
|
|
41,133
|
|
|
Elbit Systems Ltd. (Israel)
|
|
|
2,251,209
|
|
|
|
28,738
|
|
|
Esterline Technologies Corp.*
|
|
|
1,599,557
|
|
|
|
55,708
|
|
|
GenCorp, Inc.*
|
|
|
477,418
|
|
|
|
176,799
|
|
|
General Dynamics Corp.
|
|
|
15,986,166
|
|
|
|
122,232
|
|
|
Goodrich Corp.
|
|
|
8,330,111
|
|
|
|
90,731
|
|
|
L-3 Communications Holdings, Inc.
|
|
|
10,111,970
|
|
|
|
174,704
|
|
|
Lockheed Martin Corp.
|
|
|
18,525,612
|
|
|
|
41,628
|
|
|
Moog, Inc., Class A*
|
|
|
1,794,583
|
|
|
|
14,825
|
|
|
MTC Technologies, Inc.*
|
|
|
353,725
|
|
|
|
149,885
|
|
|
Northrop Grumman Corp.
|
|
|
11,027,039
|
|
|
|
57,096
|
|
|
Orbital Sciences Corp.*
|
|
|
1,536,453
|
|
|
|
189,087
|
|
|
Raytheon Co.
|
|
|
12,095,895
|
|
|
|
158,824
|
|
|
Rockwell Collins, Inc.
|
|
|
10,023,383
|
|
|
|
34,515
|
|
|
Teledyne Technologies, Inc.*
|
|
|
2,027,066
|
|
|
|
16,328
|
|
|
Triumph Group, Inc.
|
|
|
961,229
|
|
|
|
254,064
|
|
|
United Technologies Corp.
|
|
|
18,412,018
|
|
|
|
|
|
144,035,285
|
|
|
|
|
Auto Manufacturers1.1%
|
|
|
72,526
|
|
|
Oshkosh Truck Corp.
|
|
|
2,944,556
|
|
|
|
|
Commercial Services3.4%
|
|
|
55,704
|
|
|
DynCorp International, Inc., Class A*
|
|
|
999,887
|
|
|
|
403,937
|
|
|
SAIC, Inc.*
|
|
|
7,674,803
|
|
|
|
|
|
8,674,690
|
|
|
|
|
Computers4.0%
|
|
|
29,401
|
|
|
CACI International, Inc., Class A*
|
|
|
1,473,578
|
|
|
|
159,828
|
|
|
Computer Sciences Corp.*
|
|
|
6,966,902
|
|
|
|
22,290
|
|
|
Mercury Computer Systems, Inc.*
|
|
|
178,766
|
|
|
|
12,902
|
|
|
SI International, Inc.*
|
|
|
295,972
|
|
|
|
56,722
|
|
|
SRA International, Inc., Class A*
|
|
|
1,490,087
|
|
|
|
|
|
10,405,305
|
|
|
|
|
Electronics7.1%
|
|
|
8,873
|
|
|
American Science & Engineering, Inc.
|
|
|
432,381
|
|
|
|
92,872
|
|
|
Cogent, Inc.*
|
|
|
866,496
|
|
|
|
134,375
|
|
|
FLIR Systems, Inc.*
|
|
|
4,613,094
|
|
|
|
160,272
|
|
|
Garmin Ltd.
|
|
|
6,555,125
|
|
|
|
73,530
|
|
|
L-1 Identity Solutions, Inc.*
|
|
|
1,059,567
|
|
|
|
17,267
|
|
|
OSI Systems, Inc.*
|
|
|
422,178
|
|
|
|
61,883
|
|
|
Taser International, Inc.*
|
|
|
461,647
|
|
|
|
118,406
|
|
|
Trimble Navigation Ltd.*
|
|
|
3,882,533
|
|
|
|
|
|
18,293,021
|
|
|
Number
of Shares
|
|
|
|
Value
|
|
|
|
Common Stocks (Continued)
|
|
|
|
Engineering & Construction1.5%
|
|
|
21,910
|
|
|
Stanley, Inc.*
|
|
$
|
552,789
|
|
|
|
81,568
|
|
|
URS Corp.*
|
|
|
3,290,453
|
|
|
|
|
|
3,843,242
|
|
|
|
|
Metal Fabricate/Hardware4.6%
|
|
|
14,203
|
|
|
Ladish Co., Inc.*
|
|
|
426,942
|
|
|
|
95,902
|
|
|
Precision Castparts Corp.
|
|
|
11,274,239
|
|
|
|
|
|
11,701,181
|
|
|
|
|
Miscellaneous Manufacturing16.3%
|
|
|
26,706
|
|
|
Ceradyne, Inc.*
|
|
|
1,040,466
|
|
|
|
317,926
|
|
|
Honeywell International, Inc.
|
|
|
18,884,804
|
|
|
|
177,587
|
|
|
ITT Corp.
|
|
|
11,365,568
|
|
|
|
175,130
|
|
|
Textron, Inc.
|
|
|
10,684,681
|
|
|
|
|
|
41,975,519
|
|
|
|
|
Packaging & Containers2.0%
|
|
|
95,367
|
|
|
Ball Corp.
|
|
|
5,128,837
|
|
|
|
|
Software0.6%
|
|
|
33,763
|
|
|
ManTech International Corp., Class A*
|
|
|
1,612,859
|
|
|
|
|
Telecommunications3.3%
|
|
|
12,305
|
|
|
Applied Signal Technology, Inc.
|
|
|
140,769
|
|
|
|
18,094
|
|
|
GeoEye, Inc.*
|
|
|
416,705
|
|
|
|
133,391
|
|
|
Harris Corp.
|
|
|
7,207,116
|
|
|
|
29,773
|
|
|
Viasat, Inc.*
|
|
|
657,983
|
|
|
|
|
|
8,422,573
|
|
|
|
|
|
|
Total Common Stocks
(Cost $273,794,496)
|
|
|
257,037,068
|
|
|
|
|
Money Market Fund0.1%
|
|
|
153,456
|
|
|
Goldman Sachs Financial Square Prime
Obligations Institutional Share Class
(Cost $153,456)
|
|
|
153,456
|
|
|
|
|
|
|
Total Investments
(Cost $273,947,952)99.9%
|
|
|
257,190,524
|
|
|
|
|
|
|
Other assets less liabilities0.1%
|
|
|
304,941
|
|
|
|
|
|
|
Net Assets100.0%
|
|
$
|
257,495,465
|
|
|
* Non-income producing security.
See Notes to Financial Statements.
38
Schedule of Investments
PowerShares Cleantech
TM
Portfolio
April 30, 2008
Number
of Shares
|
|
|
|
Value
|
|
|
|
Common Stocks100.0%
|
|
|
|
Biotechnology2.4%
|
|
|
77,321
|
|
|
Martek Biosciences Corp.*
|
|
$
|
2,726,338
|
|
|
|
|
Chemicals2.4%
|
|
|
91,664
|
|
|
Landec Corp.*
|
|
|
743,395
|
|
|
|
73,438
|
|
|
Zoltek Cos., Inc.*
|
|
|
1,958,592
|
|
|
|
|
|
2,701,987
|
|
|
|
|
Computers1.3%
|
|
|
54,373
|
|
|
Echelon Corp.*
|
|
|
612,240
|
|
|
|
31,518
|
|
|
Telvent GIT SA (Spain)
|
|
|
868,006
|
|
|
|
|
|
1,480,246
|
|
|
|
|
Electric2.0%
|
|
|
46,804
|
|
|
Ormat Technologies, Inc.
|
|
|
2,307,437
|
|
|
|
|
Electrical Components & Equipment4.0%
|
|
|
26,580
|
|
|
American Superconductor Corp.*
|
|
|
671,942
|
|
|
|
54,937
|
|
|
Energy Conversion Devices, Inc.*
|
|
|
1,790,397
|
|
|
|
67,397
|
|
|
EnerSys*
|
|
|
1,577,090
|
|
|
|
41,106
|
|
|
PowerSecure International, Inc.*
|
|
|
499,849
|
|
|
|
|
|
4,539,278
|
|
|
|
|
Electronics12.6%
|
|
|
36,816
|
|
|
Badger Meter, Inc.
|
|
|
1,917,009
|
|
|
|
30,999
|
|
|
Dionex Corp.*
|
|
|
2,424,742
|
|
|
|
34,481
|
|
|
Itron, Inc.*
|
|
|
3,209,491
|
|
|
|
109,219
|
|
|
Trimble Navigation Ltd.*
|
|
|
3,581,292
|
|
|
|
94,771
|
|
|
Woodward Governor Co.
|
|
|
3,329,305
|
|
|
|
|
|
14,461,839
|
|
|
|
|
Energy - Alternate Sources14.1%
|
|
|
21,354
|
|
|
Comverge, Inc.*
|
|
|
280,164
|
|
|
|
16,210
|
|
|
First Solar, Inc.*
|
|
|
4,733,159
|
|
|
|
117,993
|
|
|
Headwaters, Inc.*
|
|
|
1,348,660
|
|
|
|
58,614
|
|
|
LDK Solar Co., Ltd. ADR (China)*
|
|
|
1,860,408
|
|
|
|
45,568
|
|
|
SunPower Corp., Class A*
|
|
|
3,976,719
|
|
|
|
88,721
|
|
|
Suntech Power Holdings Co. Ltd. ADR
(China)*
|
|
|
3,968,490
|
|
|
|
|
|
16,167,600
|
|
|
|
|
Engineering & Construction5.1%
|
|
|
135,089
|
|
|
ABB Ltd. ADR (Switzerland)
|
|
|
4,143,179
|
|
|
|
100,230
|
|
|
Insituform Technologies, Inc., Class A*
|
|
|
1,695,892
|
|
|
|
|
|
5,839,071
|
|
|
|
|
Environmental Control8.8%
|
|
|
35,331
|
|
|
Clean Harbors, Inc.*
|
|
|
2,330,786
|
|
|
|
68,767
|
|
|
Fuel Tech, Inc.*
|
|
|
1,767,312
|
|
|
|
146,555
|
|
|
Nalco Holding Co.
|
|
|
3,369,299
|
|
|
|
121,361
|
|
|
Tetra Tech, Inc.*
|
|
|
2,564,358
|
|
|
|
|
|
10,031,755
|
|
|
|
|
Hand/Machine Tools2.3%
|
|
|
81,694
|
|
|
Baldor Electric Co.
|
|
|
2,646,886
|
|
|
Number
of Shares
|
|
|
|
Value
|
|
|
|
Common Stocks (Continued)
|
|
|
|
Machinery - Diversified6.3%
|
|
|
53,690
|
|
|
Kadant, Inc.*
|
|
$
|
1,400,235
|
|
|
|
22,573
|
|
|
Lindsay Corp.
|
|
|
2,350,301
|
|
|
|
54,784
|
|
|
Roper Industries, Inc.
|
|
|
3,403,182
|
|
|
|
|
|
7,153,718
|
|
|
|
|
Miscellaneous Manufacturing21.2%
|
|
|
73,731
|
|
|
Clarcor, Inc.
|
|
|
3,093,753
|
|
|
|
79,386
|
|
|
Donaldson Co., Inc.
|
|
|
3,456,466
|
|
|
|
57,091
|
|
|
ESCO Technologies, Inc.*
|
|
|
2,658,157
|
|
|
|
132,615
|
|
|
Hexcel Corp.*
|
|
|
2,967,924
|
|
|
|
84,390
|
|
|
Pall Corp.
|
|
|
2,934,240
|
|
|
|
63,897
|
|
|
Polypore International, Inc.*
|
|
|
1,495,829
|
|
|
|
32,906
|
|
|
Siemens AG ADR (Germany)
|
|
|
3,897,716
|
|
|
|
30,399
|
|
|
SPX Corp.
|
|
|
3,739,077
|
|
|
|
|
|
24,243,162
|
|
|
|
|
Office Furnishings1.4%
|
|
|
127,860
|
|
|
Interface, Inc., Class A
|
|
|
1,641,722
|
|
|
|
|
Semiconductors6.6%
|
|
|
106,477
|
|
|
Cree, Inc.*
|
|
|
2,768,402
|
|
|
|
44,012
|
|
|
MEMC Electronic Materials, Inc.*
|
|
|
2,771,436
|
|
|
|
65,849
|
|
|
Power Integrations, Inc.*
|
|
|
2,052,513
|
|
|
|
|
|
7,592,351
|
|
|
|
|
Software2.9%
|
|
|
81,914
|
|
|
Ansys, Inc.*
|
|
|
3,295,400
|
|
|
|
|
Telecommunications3.4%
|
|
|
147,126
|
|
|
Corning, Inc.
|
|
|
3,929,735
|
|
|
|
|
Water3.2%
|
|
|
49,837
|
|
|
Veolia Environnement ADR (France)
|
|
|
3,610,691
|
|
|
|
|
|
|
Total Investments
(Cost: $112,939,741)100.0%
|
|
|
114,369,216
|
|
|
|
|
|
|
Liabilities in excess of other assets(0.0%)
|
|
|
(32,909
|
)
|
|
|
|
|
|
Net Assets100.0%
|
|
$
|
114,336,307
|
|
|
ADR American Depositary Receipt.
* Non-income producing security.
See Notes to Financial Statements.
39
Schedule of Investments
PowerShares DWA Technical Leaders
TM
Portfolio
April 30, 2008
Number
of Shares
|
|
|
|
Value
|
|
|
|
Common Stocks and Other
Equity Interests100.0%
|
|
|
|
Consumer Discretionary7.1%
|
|
|
53,512
|
|
|
BorgWarner, Inc.
|
|
$
|
2,630,115
|
|
|
|
66,155
|
|
|
GameStop Corp., Class A*
|
|
|
3,641,171
|
|
|
|
60,927
|
|
|
Guess?, Inc.
|
|
|
2,332,286
|
|
|
|
121,135
|
|
|
International Game Technology
|
|
|
4,208,229
|
|
|
|
55,514
|
|
|
Johnson Controls, Inc.
|
|
|
1,957,424
|
|
|
|
30,104
|
|
|
NIKE, Inc., Class B
|
|
|
2,010,947
|
|
|
|
34,355
|
|
|
Polo Ralph Lauren Corp.
|
|
|
2,133,789
|
|
|
|
116,955
|
|
|
Urban Outfitters, Inc.*
|
|
|
4,005,709
|
|
|
|
74,044
|
|
|
Yum! Brands, Inc.
|
|
|
3,012,110
|
|
|
|
|
|
25,931,780
|
|
|
|
|
Consumer Staples4.4%
|
|
|
54,719
|
|
|
Archer-Daniels-Midland Co.
|
|
|
2,410,919
|
|
|
|
43,497
|
|
|
Church & Dwight Co., Inc.
|
|
|
2,471,500
|
|
|
|
93,676
|
|
|
Energizer Holdings, Inc.*
|
|
|
7,406,024
|
|
|
|
54,062
|
|
|
Pepsi Bottling Group (The), Inc.
|
|
|
1,822,430
|
|
|
|
32,673
|
|
|
UST, Inc.
|
|
|
1,701,283
|
|
|
|
|
|
15,812,156
|
|
|
|
|
Energy12.0%
|
|
|
16,925
|
|
|
Apache Corp.
|
|
|
2,279,459
|
|
|
|
50,974
|
|
|
Cabot Oil & Gas Corp.
|
|
|
2,903,989
|
|
|
|
63,923
|
|
|
Chesapeake Energy Corp.
|
|
|
3,304,819
|
|
|
|
18,256
|
|
|
Diamond Offshore Drilling, Inc.
|
|
|
2,289,485
|
|
|
|
51,692
|
|
|
FMC Technologies, Inc.*
|
|
|
3,473,702
|
|
|
|
64,535
|
|
|
Halliburton Co.
|
|
|
2,962,802
|
|
|
|
20,870
|
|
|
Hess Corp.
|
|
|
2,216,394
|
|
|
|
44,215
|
|
|
Noble Energy, Inc.
|
|
|
3,846,705
|
|
|
|
48,404
|
|
|
Occidental Petroleum Corp.
|
|
|
4,027,697
|
|
|
|
14,617
|
|
|
Transocean, Inc.*
|
|
|
2,155,423
|
|
|
|
266,823
|
|
|
Williams (The) Cos, Inc.
|
|
|
9,472,217
|
|
|
|
75,420
|
|
|
XTO Energy, Inc.
|
|
|
4,665,481
|
|
|
|
|
|
43,598,173
|
|
|
|
|
Financials11.6%
|
|
|
35,837
|
|
|
Arch Capital Group Ltd.*
|
|
|
2,531,884
|
|
|
|
29,141
|
|
|
BlackRock, Inc.
|
|
|
5,880,362
|
|
|
|
53,237
|
|
|
General Growth Properties, Inc.
|
|
|
2,180,588
|
|
|
|
45,041
|
|
|
Jones Lang LaSalle, Inc.
|
|
|
3,495,632
|
|
|
|
60,896
|
|
|
Leucadia National Corp.
|
|
|
3,119,093
|
|
|
|
83,891
|
|
|
Marshall & Ilsley Corp.
|
|
|
2,095,597
|
|
|
|
101,809
|
|
|
New York Community Bancorp, Inc.
|
|
|
1,900,774
|
|
|
|
117,740
|
|
|
People's United Financial, Inc.
|
|
|
1,998,048
|
|
|
|
20,900
|
|
|
Public Storage
|
|
|
1,895,630
|
|
|
|
38,757
|
|
|
RenaissanceRe Holdings Ltd. (Bermuda)
|
|
|
1,993,660
|
|
|
|
19,807
|
|
|
Simon Property Group, Inc.
|
|
|
1,977,927
|
|
|
|
43,634
|
|
|
Taubman Centers, Inc.
|
|
|
2,472,739
|
|
|
|
149,296
|
|
|
Ventas, Inc.
|
|
|
7,249,814
|
|
|
|
136,790
|
|
|
W.R. Berkley Corp.
|
|
|
3,514,135
|
|
|
|
|
|
42,305,883
|
|
|
Number
of Shares
|
|
|
|
Value
|
|
|
|
Common Stocks and Other
Equity Interests (Continued)
|
|
|
|
Health Care9.9%
|
|
|
92,544
|
|
|
Celgene Corp.*
|
|
$
|
5,750,684
|
|
|
|
60,421
|
|
|
Covance, Inc.*
|
|
|
5,062,676
|
|
|
|
23,927
|
|
|
C.R. Bard, Inc.
|
|
|
2,253,206
|
|
|
|
51,830
|
|
|
DENTSPLY International, Inc.
|
|
|
2,014,632
|
|
|
|
110,600
|
|
|
Gilead Sciences, Inc.*
|
|
|
5,724,656
|
|
|
|
63,602
|
|
|
Henry Schein, Inc.*
|
|
|
3,521,643
|
|
|
|
57,470
|
|
|
IDEXX Laboratories, Inc.*
|
|
|
3,057,404
|
|
|
|
128,550
|
|
|
Pediatrix Medical Group, Inc.*
|
|
|
8,743,970
|
|
|
|
|
|
36,128,871
|
|
|
|
|
Industrials27.0%
|
|
|
26,190
|
|
|
Alliant Techsystems, Inc.*
|
|
|
2,880,376
|
|
|
|
76,964
|
|
|
AMETEK, Inc.
|
|
|
3,734,293
|
|
|
|
38,482
|
|
|
Brink's (The) Co.
|
|
|
2,799,565
|
|
|
|
21,220
|
|
|
Burlington Northern Santa Fe Corp.
|
|
|
2,176,111
|
|
|
|
80,359
|
|
|
C.H. Robinson Worldwide, Inc.
|
|
|
5,036,902
|
|
|
|
25,853
|
|
|
Caterpillar, Inc.
|
|
|
2,116,844
|
|
|
|
174,898
|
|
|
Corrections Corp. of America*
|
|
|
4,459,899
|
|
|
|
354,872
|
|
|
Covanta Holding Corp.*
|
|
|
9,450,241
|
|
|
|
44,690
|
|
|
CSX Corp.
|
|
|
2,813,236
|
|
|
|
26,985
|
|
|
Deere & Co.
|
|
|
2,268,629
|
|
|
|
46,035
|
|
|
Donaldson Co., Inc.
|
|
|
2,004,364
|
|
|
|
24,340
|
|
|
Dun & Bradstreet (The) Corp.
|
|
|
2,051,862
|
|
|
|
94,164
|
|
|
Expeditors International of Washington, Inc.
|
|
|
4,387,101
|
|
|
|
15,105
|
|
|
First Solar, Inc.*
|
|
|
4,410,509
|
|
|
|
30,899
|
|
|
Flowserve Corp.
|
|
|
3,834,257
|
|
|
|
47,091
|
|
|
Harsco Corp.
|
|
|
2,793,909
|
|
|
|
35,731
|
|
|
ITT Corp.
|
|
|
2,286,784
|
|
|
|
149,327
|
|
|
J.B. Hunt Transport Services, Inc.
|
|
|
5,072,638
|
|
|
|
68,892
|
|
|
Joy Global, Inc.
|
|
|
5,115,231
|
|
|
|
69,518
|
|
|
Kansas City Southern*
|
|
|
3,133,871
|
|
|
|
49,185
|
|
|
Kirby Corp.*
|
|
|
2,697,305
|
|
|
|
27,046
|
|
|
Lockheed Martin Corp.
|
|
|
2,867,958
|
|
|
|
200,713
|
|
|
McDermott International, Inc.*
|
|
|
10,754,203
|
|
|
|
35,225
|
|
|
Norfolk Southern Corp.
|
|
|
2,098,706
|
|
|
|
54,719
|
|
|
Terex Corp.*
|
|
|
3,812,820
|
|
|
|
79,059
|
|
|
WESCO International, Inc.*
|
|
|
2,941,785
|
|
|
|
|
|
97,999,399
|
|
|
|
|
Information Technology3.3%
|
|
|
63,541
|
|
|
Cognizant Technology Solutions Corp.,
Class A*
|
|
|
2,049,197
|
|
|
|
50,224
|
|
|
Global Payments, Inc.
|
|
|
2,222,914
|
|
|
|
8,072
|
|
|
Mastercard, Inc., Class A
|
|
|
2,245,308
|
|
|
|
50,592
|
|
|
MEMC Electronic Materials, Inc.*
|
|
|
3,185,778
|
|
|
|
33,605
|
|
|
Salesforce.com, Inc.*
|
|
|
2,242,462
|
|
|
|
|
|
11,945,659
|
|
|
|
|
Materials12.5%
|
|
|
94,945
|
|
|
Airgas, Inc.
|
|
|
4,569,703
|
|
|
|
82,209
|
|
|
AK Steel Holding Corp.
|
|
|
5,161,080
|
|
|
See Notes to Financial Statements.
40
Schedule of Investments (Continued)
PowerShares DWA Technical Leaders
TM
Portfolio
April 30, 2008
Number
of Shares
|
|
|
|
Value
|
|
|
|
Common Stocks and Other
Equity Interests (Continued)
|
|
|
98,828
|
|
|
Allegheny Technologies, Inc.
|
|
$
|
6,802,330
|
|
|
|
60,315
|
|
|
Ball Corp.
|
|
|
3,243,741
|
|
|
|
31,235
|
|
|
Cleveland-Cliffs, Inc.
|
|
|
5,010,094
|
|
|
|
35,363
|
|
|
FMC Corp.
|
|
|
2,220,089
|
|
|
|
37,000
|
|
|
Monsanto Co.
|
|
|
4,218,740
|
|
|
|
26,909
|
|
|
Mosaic (The) Co.*
|
|
|
3,296,622
|
|
|
|
25,028
|
|
|
Praxair, Inc.
|
|
|
2,285,307
|
|
|
|
46,647
|
|
|
Reliance Steel & Aluminum Co.
|
|
|
2,835,205
|
|
|
|
38,375
|
|
|
Sigma-Aldrich Corp.
|
|
|
2,188,143
|
|
|
|
24,264
|
|
|
United States Steel Corp.
|
|
|
3,735,443
|
|
|
|
|
|
45,566,497
|
|
|
|
|
Telecommunication Services7.0%
|
|
|
353,159
|
|
|
American Tower Corp., Class A*
|
|
|
15,334,164
|
|
|
|
258,551
|
|
|
Crown Castle International Corp.*
|
|
|
10,044,706
|
|
|
|
|
|
25,378,870
|
|
|
|
|
Utilities5.2%
|
|
|
45,760
|
|
|
Edison International
|
|
|
2,387,299
|
|
|
|
54,887
|
|
|
Energen Corp.
|
|
|
3,745,489
|
|
|
|
23,820
|
|
|
Entergy Corp.
|
|
|
2,735,965
|
|
|
|
67,867
|
|
|
Equitable Resources, Inc.
|
|
|
4,504,333
|
|
|
|
44,460
|
|
|
PPL Corp.
|
|
|
2,134,969
|
|
|
|
54,994
|
|
|
Questar Corp.
|
|
|
3,411,278
|
|
|
|
|
|
18,919,333
|
|
|
|
|
|
|
Total Investments
(Cost $347,641,723)100.0%
|
|
|
363,586,621
|
|
|
|
|
|
|
Liabilities in excess of other assets(0.0%)
|
|
|
(72,817
|
)
|
|
|
|
|
|
Net Assets100.0%
|
|
$
|
363,513,804
|
|
|
* Non-income producing security.
See Notes to Financial Statements.
41
Schedule of Investments
PowerShares Golden Dragon Halter USX China Portfolio
April 30, 2008
Number
of Shares
|
|
|
|
Value
|
|
|
|
Common Stocks99.7%
|
|
|
|
Bermuda0.5%
|
|
|
94,711
|
|
|
China Yuchai International Ltd.
|
|
$
|
888,389
|
|
|
|
118,350
|
|
|
Global Sources Ltd.*
|
|
|
1,643,882
|
|
|
|
|
|
2,532,271
|
|
|
|
|
British Virgin Islands0.1%
|
|
|
58,385
|
|
|
Origin Agritech Ltd.*
|
|
|
372,496
|
|
|
|
|
Cayman Islands6.5%
|
|
|
55,213
|
|
|
3
SBio, Inc. ADR*
|
|
|
576,976
|
|
|
|
215,921
|
|
|
Actions Semiconductor Co. Ltd. ADR*
|
|
|
833,455
|
|
|
|
141,030
|
|
|
China Digital TV Holding Co. Ltd. ADR*
|
|
|
2,376,356
|
|
|
|
69,631
|
|
|
China Medical Technologies, Inc. ADR
|
|
|
2,604,199
|
|
|
|
262,070
|
|
|
China Nepstar Chain Drugstore Ltd. ADR
|
|
|
3,095,047
|
|
|
|
110,096
|
|
|
China Techfaith Wireless Communication
Technology Ltd. ADR*
|
|
|
598,922
|
|
|
|
209,596
|
|
|
E-House China Holdings Ltd. ADR*
|
|
|
3,504,445
|
|
|
|
125,233
|
|
|
Longtop Financial Technologies Ltd. ADR*
|
|
|
2,498,398
|
|
|
|
89,651
|
|
|
New Oriental Education & Technology
Group. ADR*
|
|
|
6,729,204
|
|
|
|
93,317
|
|
|
Noah Education Holdings Ltd. ADR*
|
|
|
574,833
|
|
|
|
28,389
|
|
|
Perfect World Co. Ltd. ADR*
|
|
|
815,332
|
|
|
|
944,387
|
|
|
Semiconductor Manufacturing
International Corp. ADR*
|
|
|
3,598,114
|
|
|
|
105,320
|
|
|
Spreadtrum Communications, Inc. ADR*
|
|
|
915,231
|
|
|
|
63,366
|
|
|
Trina Solar Ltd. ADR*
|
|
|
2,672,778
|
|
|
|
156,362
|
|
|
WuXi PharmaTech Cayman, Inc. ADR*
|
|
|
2,883,316
|
|
|
|
|
|
34,276,606
|
|
|
|
|
China70.0%
|
|
|
72,420
|
|
|
51
job, Inc. ADR*
|
|
|
1,332,528
|
|
|
|
76,882
|
|
|
Acorn International, Inc. ADR*
|
|
|
530,486
|
|
|
|
160,609
|
|
|
Agria Corp. ADR*
|
|
|
695,437
|
|
|
|
521,705
|
|
|
Aluminum Corp. of China Ltd. ADR
|
|
|
22,339,408
|
|
|
|
83,345
|
|
|
Baidu.com ADR*
|
|
|
30,470,931
|
|
|
|
69,302
|
|
|
Canadian Solar, Inc.*
|
|
|
1,896,796
|
|
|
|
123,680
|
|
|
China Eastern Airlines Corp. Ltd. ADR*
|
|
|
5,354,107
|
|
|
|
53,057
|
|
|
China Finance Online Co. Ltd. ADR*
|
|
|
978,902
|
|
|
|
387,066
|
|
|
China Life Insurance Co. Ltd. ADR
|
|
|
25,391,530
|
|
|
|
237,633
|
|
|
China Petroleum and Chemical Corp. ADR
|
|
|
25,547,924
|
|
|
|
108,978
|
|
|
China Security & Surveillance
Technology, Inc.*
|
|
|
2,119,622
|
|
|
|
222,322
|
|
|
China Southern Airlines Co. Ltd. ADR*
|
|
|
7,301,055
|
|
|
|
100,524
|
|
|
China Sunergy Co. Ltd. ADR*
|
|
|
826,307
|
|
|
|
320,142
|
|
|
China Telecom Corp. Ltd. ADR
|
|
|
21,638,398
|
|
|
|
49,500
|
|
|
ChinaEdu Corp. ADR*
|
|
|
346,500
|
|
|
|
165,526
|
|
|
Ctrip.com International Ltd. ADR
|
|
|
10,272,543
|
|
|
|
63,844
|
|
|
eLong, Inc. ADR*
|
|
|
597,580
|
|
|
|
326,885
|
|
|
Focus Media Holding Ltd. ADR*
|
|
|
12,058,787
|
|
|
|
33,201
|
|
|
Fuwei Films Holdings Co. Ltd.*
|
|
|
100,599
|
|
|
|
653,732
|
|
|
Giant Interactive Group, Inc. ADR*
|
|
|
10,655,832
|
|
|
|
360,031
|
|
|
Guangshen Railway Co. Ltd. ADR
|
|
|
10,397,695
|
|
|
|
211,987
|
|
|
Gushan Environmental Energy Ltd. ADR
|
|
|
2,649,838
|
|
|
Number
of Shares
|
|
|
|
Value
|
|
|
|
Common Stocks (Continued)
|
|
|
88,472
|
|
|
Home Inns & Hotels
Management, Inc. ADR*
|
|
$
|
1,982,658
|
|
|
|
718,836
|
|
|
Huaneng Power International, Inc. ADR
|
|
|
24,188,831
|
|
|
|
56,663
|
|
|
Hurray! Holding Co. Ltd. ADR*
|
|
|
156,957
|
|
|
|
399,644
|
|
|
JA Solar Holdings Co. Ltd. ADR*
|
|
|
9,595,452
|
|
|
|
90,418
|
|
|
KongZhong Corp. ADR*
|
|
|
382,468
|
|
|
|
265,795
|
|
|
LDK Solar Co. Ltd. ADR*
|
|
|
8,436,333
|
|
|
|
60,794
|
|
|
Linktone Ltd. ADR*
|
|
|
130,707
|
|
|
|
263,608
|
|
|
Mindray Medical International Ltd. ADR
|
|
|
8,962,672
|
|
|
|
324,156
|
|
|
Netease.com, Inc. ADR*
|
|
|
7,235,162
|
|
|
|
88,924
|
|
|
Ninetowns Internet Technology
Group Co. Ltd. ADR*
|
|
|
198,301
|
|
|
|
216,266
|
|
|
PetroChina Co. Ltd. ADR
|
|
|
32,686,442
|
|
|
|
133,420
|
|
|
Qiao Xing Mobile Communication Co. Ltd.*
|
|
|
857,890
|
|
|
|
75,347
|
|
|
Qiao Xing Universal Telephone, Inc.*
|
|
|
479,207
|
|
|
|
181,971
|
|
|
Shanda Interactive Entertainment Ltd. ADR*
|
|
|
6,239,786
|
|
|
|
158,831
|
|
|
Simcere Pharmaceutical Group ADR*
|
|
|
1,999,682
|
|
|
|
138,929
|
|
|
SINA Corp.*
|
|
|
6,418,520
|
|
|
|
182,972
|
|
|
Sinopec Shanghai Petrochemical Co.
Ltd. ADR
|
|
|
7,236,543
|
|
|
|
102,333
|
|
|
Sinovac Biotech Ltd.*
|
|
|
393,982
|
|
|
|
145,901
|
|
|
Solarfun Power Holdings Co. Ltd. ADR*
|
|
|
1,959,450
|
|
|
|
382,365
|
|
|
Suntech Power Holdings Co. Ltd. ADR*
|
|
|
17,103,185
|
|
|
|
73,097
|
|
|
The9 Ltd. ADR*
|
|
|
1,569,393
|
|
|
|
84,937
|
|
|
Tongjitang Chinese Medicines Co. ADR*
|
|
|
696,483
|
|
|
|
173,697
|
|
|
VisionChina Media, Inc. ADR*
|
|
|
2,562,031
|
|
|
|
254,130
|
|
|
WSP Holdings Ltd. ADR*
|
|
|
1,682,341
|
|
|
|
175,439
|
|
|
Xinhua Finance Media Ltd. ADR*
|
|
|
729,826
|
|
|
|
182,911
|
|
|
Xinyuan Real Estate Co. Ltd. ADR*
|
|
|
1,651,686
|
|
|
|
249,981
|
|
|
Yanzhou Coal Mining Co. Ltd. ADR
|
|
|
23,168,239
|
|
|
|
322,555
|
|
|
Yingli Green Energy Holding Co. Ltd. ADR*
|
|
|
7,105,887
|
|
|
|
42,185
|
|
|
Yucheng Technologies Ltd.*
|
|
|
635,728
|
|
|
|
|
|
369,948,647
|
|
|
|
|
Hong Kong19.3%
|
|
|
270,398
|
|
|
CDC Corp., Class A*
|
|
|
932,873
|
|
|
|
372,576
|
|
|
China Mobile Ltd. ADR
|
|
|
32,160,761
|
|
|
|
371,561
|
|
|
China Netcom Group Corp. Ltd. ADR
|
|
|
22,683,799
|
|
|
|
898,946
|
|
|
China Unicom Ltd. ADR
|
|
|
19,390,265
|
|
|
|
142,244
|
|
|
CNOOC Ltd. ADR
|
|
|
25,255,422
|
|
|
|
40,133
|
|
|
Deswell Industries, Inc.
|
|
|
258,858
|
|
|
|
113,864
|
|
|
Nam Tai Electronics, Inc.
|
|
|
1,173,938
|
|
|
|
|
|
101,855,916
|
|
|
|
|
South Korea0.0%
|
|
|
109,902
|
|
|
Webzen, Inc. ADR
|
|
|
294,537
|
|
|
|
|
United States3.3%
|
|
|
43,083
|
|
|
American Dairy, Inc.*
|
|
|
499,763
|
|
|
|
114,750
|
|
|
AsiaInfo Holdings, Inc.*
|
|
|
1,396,508
|
|
|
|
60,888
|
|
|
China Automotive Systems, Inc.*
|
|
|
314,182
|
|
|
|
135,260
|
|
|
China BAK Battery, Inc.*
|
|
|
503,167
|
|
|
See Notes to Financial Statements.
42
Schedule of Investments (Continued)
PowerShares Golden Dragon Halter USX China Portfolio
April 30, 2008
Number
of Shares
|
|
|
|
Value
|
|
|
|
Common Stocks (Continued)
|
|
|
50,013
|
|
|
China Shenghuo Pharmaceutical
Holdings, Inc.*
|
|
$
|
171,044
|
|
|
|
31,641
|
|
|
Chindex International, Inc.*
|
|
|
775,205
|
|
|
|
97,835
|
|
|
Comtech Group, Inc.*
|
|
|
1,273,812
|
|
|
|
53,172
|
|
|
Fuqi International, Inc.*
|
|
|
439,732
|
|
|
|
69,769
|
|
|
Fushi Copperweld, Inc.*
|
|
|
1,128,165
|
|
|
|
136,152
|
|
|
HSW International, Inc.*
|
|
|
545,970
|
|
|
|
137,739
|
|
|
ShengdaTech, Inc.*
|
|
|
1,063,345
|
|
|
|
95,918
|
|
|
Sohu.com, Inc.*
|
|
|
6,630,811
|
|
|
|
46,449
|
|
|
SORL Auto Parts, Inc.*
|
|
|
230,387
|
|
|
|
96,457
|
|
|
Sutor Technology Group Ltd*.
|
|
|
581,636
|
|
|
|
26,445
|
|
|
Telestone Technologies Corp.*
|
|
|
122,176
|
|
|
|
181,280
|
|
|
Tiens Biotech Group USA, Inc.*
|
|
|
351,683
|
|
|
|
313,770
|
|
|
UTStarcom, Inc.*
|
|
|
1,019,753
|
|
|
|
60,888
|
|
|
Wonder Auto Technology, Inc.*
|
|
|
463,358
|
|
|
|
|
|
17,510,697
|
|
|
|
|
|
|
Total Investments
(Cost $594,935,801)99.7%
|
|
|
526,791,170
|
|
|
|
|
|
|
Other assets less liabilities0.3%
|
|
|
1,691,831
|
|
|
|
|
|
|
Net Assets100.0%
|
|
$
|
528,483,001
|
|
|
ADR American Depositary Receipt.
* Non-income producing security.
See Notes to Financial Statements.
43
Schedule of Investments
PowerShares Listed Private Equity Portfolio
April 30, 2008
Number
of Shares
|
|
|
|
Value
|
|
|
|
Common Stocks and Other
Equity Interests99.1%
|
|
|
|
Banks5.0%
|
|
|
107,046
|
|
|
SVB Financial Group*
|
|
$
|
5,208,858
|
|
|
|
|
Closed-end Funds1.2%
|
|
|
53,438
|
|
|
Kayne Anderson Energy Development Co.
|
|
|
1,185,255
|
|
|
|
|
Commercial Services4.6%
|
|
|
160,694
|
|
|
Macquarie Infrastructure Co. LLC
|
|
|
4,756,542
|
|
|
|
|
Diversified Financial Services14.5%
|
|
|
34,515
|
|
|
Affiliated Managers Group, Inc.*
|
|
|
3,428,720
|
|
|
|
58,017
|
|
|
Evercore Partners, Inc., Class A
|
|
|
978,167
|
|
|
|
723,013
|
|
|
Fortress Investment Group LLC, Class A
|
|
|
10,555,990
|
|
|
|
|
|
14,962,877
|
|
|
|
|
Holding Companies - Diversified13.3%
|
|
|
152,017
|
|
|
Compass Diversified Holdings
|
|
|
1,863,728
|
|
|
|
231,861
|
|
|
Leucadia National Corp.
|
|
|
11,875,921
|
|
|
|
|
|
13,739,649
|
|
|
|
|
Internet5.6%
|
|
|
221,895
|
|
|
CMGI, Inc.*
|
|
|
3,068,808
|
|
|
|
168,238
|
|
|
Internet Capital Group, Inc.*
|
|
|
1,690,792
|
|
|
|
667,644
|
|
|
Safeguard Scientifics, Inc.*
|
|
|
1,068,230
|
|
|
|
|
|
5,827,830
|
|
|
|
|
Investment Companies48.7%
|
|
|
330,285
|
|
|
Allied Capital Corp.
|
|
|
6,638,728
|
|
|
|
271,322
|
|
|
American Capital Strategies Ltd.
|
|
|
8,614,473
|
|
|
|
294,711
|
|
|
Apollo Investment Corp.
|
|
|
4,768,424
|
|
|
|
340,481
|
|
|
Ares Capital Corp.
|
|
|
3,833,816
|
|
|
|
230,984
|
|
|
BlackRock Kelso Capital Corp.
|
|
|
2,843,413
|
|
|
|
18,745
|
|
|
Capital Southwest Corp.
|
|
|
2,229,530
|
|
|
|
90,855
|
|
|
Gladstone Capital Corp.
|
|
|
1,706,257
|
|
|
|
83,811
|
|
|
Gladstone Investment Corp.
|
|
|
743,404
|
|
|
|
115,776
|
|
|
Harris & Harris Group, Inc.*
|
|
|
920,419
|
|
|
|
141,501
|
|
|
Hercules Technology Growth Capital, Inc.
|
|
|
1,436,235
|
|
|
|
365,091
|
|
|
KKR Financial Holdings LLC
|
|
|
4,636,656
|
|
|
|
100,941
|
|
|
Kohlberg Capital Corp.
|
|
|
1,013,448
|
|
|
|
304,674
|
|
|
MCG Capital Corp.
|
|
|
2,333,803
|
|
|
|
102,022
|
|
|
MVC Capital, Inc.
|
|
|
1,587,462
|
|
|
|
94,461
|
|
|
NGP Capital Resources Co.
|
|
|
1,523,656
|
|
|
|
96,209
|
|
|
Patriot Capital Funding, Inc.
|
|
|
979,408
|
|
|
|
124,195
|
|
|
PennantPark Investment Corp.
|
|
|
920,285
|
|
|
|
117,644
|
|
|
Prospect Capital Corp.
|
|
|
1,745,837
|
|
|
|
108,199
|
|
|
TICC Capital Corp.
|
|
|
787,689
|
|
|
|
42,216
|
|
|
Tortoise Capital Resources Corp.
|
|
|
506,592
|
|
|
|
53,427
|
|
|
UTEK Corp.*
|
|
|
566,860
|
|
|
|
|
|
50,336,395
|
|
|
Number
of Shares
|
|
|
|
Value
|
|
|
|
Common Stocks and Other
Equity Interests (Continued)
|
|
|
|
REIT6.2%
|
|
|
455,836
|
|
|
CapitalSource, Inc.
|
|
$
|
6,404,496
|
|
|
|
|
Total Common Stocks and Other
Equity Interests
(Cost $138,101,240)
|
|
|
102,421,902
|
|
|
|
|
Money Market Fund0.3%
|
|
|
318,356
|
|
|
Goldman Sachs Financial Square Prime
Obligations Institutional Share Class
(Cost $318,356)
|
|
|
318,356
|
|
|
|
|
Total Investments
(Cost $138,419,596)99.4%
|
|
|
102,740,258
|
|
|
|
|
Other assets less liabilities0.6%
|
|
|
638,925
|
|
|
|
|
Net Assets100.0%
|
|
$
|
103,379,183
|
|
|
REIT Real Estate Investment Trust.
* Non-income producing security.
See Notes to Financial Statements.
44
Schedule of Investments
PowerShares Lux Nanotech Portfolio
April 30, 2008
Number
of Shares
|
|
|
|
Value
|
|
|
|
Common Stocks99.5%
|
|
|
|
Auto Manufacturers3.2%
|
|
|
26,404
|
|
|
Toyota Motor Corp. ADR (Japan)
|
|
$
|
2,680,006
|
|
|
|
|
Biotechnology8.6%
|
|
|
1,126,887
|
|
|
Biosante Pharmaceuticals, Inc.*(a)
|
|
|
4,439,935
|
|
|
|
420,870
|
|
|
Nanosphere, Inc.*
|
|
|
2,802,994
|
|
|
|
|
|
7,242,929
|
|
|
|
|
Chemicals11.9%
|
|
|
29,286
|
|
|
Air Products & Chemicals, Inc.
|
|
|
2,882,621
|
|
|
|
58,758
|
|
|
E.I. du Pont de Nemours & Co.
|
|
|
2,873,854
|
|
|
|
570,711
|
|
|
Symyx Technologies, Inc.*
|
|
|
4,286,039
|
|
|
|
|
|
10,042,514
|
|
|
|
|
Commercial Services12.2%
|
|
|
1,613,334
|
|
|
Altair Nanotechnologies, Inc.*
|
|
|
3,710,668
|
|
|
|
1,188,711
|
|
|
Arrowhead Research Corp.*
|
|
|
3,185,745
|
|
|
|
493,013
|
|
|
Luna Innovations, Inc.*(a)
|
|
|
3,406,720
|
|
|
|
|
|
10,303,133
|
|
|
|
|
Computers6.5%
|
|
|
57,942
|
|
|
Hewlett-Packard Co.
|
|
|
2,685,612
|
|
|
|
23,462
|
|
|
International Business Machines Corp.
|
|
|
2,831,863
|
|
|
|
|
|
5,517,475
|
|
|
|
|
Electronics11.6%
|
|
|
204,034
|
|
|
FEI Co.*
|
|
|
4,462,224
|
|
|
|
166,766
|
|
|
NVE Corp.*(a)
|
|
|
5,311,497
|
|
|
|
|
|
9,773,721
|
|
|
|
|
Energy - Alternate Sources4.3%
|
|
|
319,958
|
|
|
Headwaters, Inc.*
|
|
|
3,657,120
|
|
|
|
|
Investment Companies4.6%
|
|
|
489,469
|
|
|
Harris & Harris Group, Inc.*
|
|
|
3,891,279
|
|
|
|
|
Miscellaneous Manufacturing10.6%
|
|
|
34,871
|
|
|
3
M Co.
|
|
|
2,681,580
|
|
|
|
74,108
|
|
|
General Electric Co.
|
|
|
2,423,332
|
|
|
|
1,192,464
|
|
|
Nanophase Technologies Corp.*(a)
|
|
|
3,863,583
|
|
|
|
|
|
8,968,495
|
|
|
|
|
Pharmaceuticals11.8%
|
|
|
206,239
|
|
|
Elan Corp. PLC ADR (Ireland)*
|
|
|
5,422,023
|
|
|
|
486,560
|
|
|
Flamel Technologies ADR (France)*
|
|
|
4,515,277
|
|
|
|
|
|
9,937,300
|
|
|
|
|
Semiconductors8.9%
|
|
|
125,423
|
|
|
Intel Corp.
|
|
|
2,791,916
|
|
|
|
252,299
|
|
|
Veeco Instruments, Inc.*
|
|
|
4,750,790
|
|
|
|
|
|
7,542,706
|
|
|
Number
of Shares
|
|
|
|
Value
|
|
|
|
Common Stocks (Continued)
|
|
|
|
Software5.3%
|
|
|
795,068
|
|
|
Accelrys, Inc.*
|
|
$
|
4,476,233
|
|
|
|
|
Total Investments
(Cost $108,828,022)99.5%
|
|
|
84,032,911
|
|
|
|
|
Other assets less liabilities0.5%
|
|
|
395,304
|
|
|
|
|
Net Assets100.0%
|
|
$
|
84,428,215
|
|
|
ADR American Depositary Receipt
* Non-income producing security.
(a) Affiliated Investment. See Note 4.
See Notes to Financial Statements.
45
Schedule of Investments
PowerShares S&P 500 BuyWrite Portfolio
April 30, 2008
Number
of Shares
|
|
|
|
Value
|
|
|
|
Common Stocks and Other
Equity Interests(a)101.7%
|
|
|
|
Consumer Discretionary8.7%
|
|
|
54
|
|
|
Abercrombie & Fitch Co., Class A
|
|
$
|
4,013
|
|
|
|
195
|
|
|
Amazon.com, Inc.*
|
|
|
15,333
|
|
|
|
89
|
|
|
Apollo Group, Inc., Class A*
|
|
|
4,530
|
|
|
|
85
|
|
|
AutoNation, Inc.*
|
|
|
1,361
|
|
|
|
28
|
|
|
AutoZone, Inc.*
|
|
|
3,381
|
|
|
|
167
|
|
|
Bed Bath & Beyond, Inc.*
|
|
|
5,428
|
|
|
|
223
|
|
|
Best Buy Co., Inc.
|
|
|
9,593
|
|
|
|
54
|
|
|
Big Lots, Inc.*
|
|
|
1,460
|
|
|
|
39
|
|
|
Black & Decker (The) Corp.
|
|
|
2,560
|
|
|
|
53
|
|
|
Brunswick Corp.
|
|
|
884
|
|
|
|
276
|
|
|
Carnival Corp.
|
|
|
11,087
|
|
|
|
430
|
|
|
CBS Corp., Class B
|
|
|
9,920
|
|
|
|
80
|
|
|
Centex Corp.
|
|
|
1,666
|
|
|
|
315
|
|
|
Clear Channel Communications, Inc.
|
|
|
9,497
|
|
|
|
222
|
|
|
Coach, Inc.*
|
|
|
7,897
|
|
|
|
1,901
|
|
|
Comcast Corp., Class A
|
|
|
39,065
|
|
|
|
178
|
|
|
D.R. Horton, Inc.
|
|
|
2,757
|
|
|
|
92
|
|
|
Darden Restaurants, Inc.
|
|
|
3,273
|
|
|
|
35
|
|
|
Dillard's, Inc., Class A
|
|
|
714
|
|
|
|
450
|
|
|
DIRECTV Group (The), Inc.*
|
|
|
11,088
|
|
|
|
56
|
|
|
E.W. Scripps Co., Class A
|
|
|
2,515
|
|
|
|
182
|
|
|
Eastman Kodak Co.
|
|
|
3,256
|
|
|
|
132
|
|
|
Expedia, Inc.*
|
|
|
3,334
|
|
|
|
89
|
|
|
Family Dollar Stores, Inc.
|
|
|
1,905
|
|
|
|
1,393
|
|
|
Ford Motor Co.*
|
|
|
11,506
|
|
|
|
97
|
|
|
Fortune Brands, Inc.
|
|
|
6,559
|
|
|
|
104
|
|
|
GameStop Corp., Class A*
|
|
|
5,724
|
|
|
|
146
|
|
|
Gannett Co., Inc.
|
|
|
4,179
|
|
|
|
287
|
|
|
Gap (The), Inc.
|
|
|
5,344
|
|
|
|
358
|
|
|
General Motors Corp.
|
|
|
8,306
|
|
|
|
108
|
|
|
Genuine Parts Co.
|
|
|
4,586
|
|
|
|
154
|
|
|
Goodyear Tire & Rubber (The) Co.*
|
|
|
4,124
|
|
|
|
210
|
|
|
H&R Block, Inc.
|
|
|
4,593
|
|
|
|
151
|
|
|
Harley-Davidson, Inc.
|
|
|
5,776
|
|
|
|
38
|
|
|
Harman International Industries, Inc.
|
|
|
1,553
|
|
|
|
91
|
|
|
Hasbro, Inc.
|
|
|
3,236
|
|
|
|
1,065
|
|
|
Home Depot (The), Inc.
|
|
|
30,671
|
|
|
|
114
|
|
|
IAC/InterActiveCorp*
|
|
|
2,372
|
|
|
|
198
|
|
|
International Game Technology
|
|
|
6,879
|
|
|
|
304
|
|
|
Interpublic Group of Cos., Inc.*
|
|
|
2,751
|
|
|
|
143
|
|
|
J. C. Penney Co., Inc.
|
|
|
6,078
|
|
|
|
375
|
|
|
Johnson Controls, Inc.
|
|
|
13,223
|
|
|
|
53
|
|
|
Jones Apparel Group, Inc.
|
|
|
839
|
|
|
|
47
|
|
|
KB Home
|
|
|
1,058
|
|
|
|
198
|
|
|
Kohl's Corp.*
|
|
|
9,672
|
|
|
|
105
|
|
|
Leggett & Platt, Inc.
|
|
|
1,743
|
|
|
|
86
|
|
|
Lennar Corp., Class A
|
|
|
1,584
|
|
|
|
201
|
|
|
Limited Brands, Inc.
|
|
|
3,723
|
|
|
|
62
|
|
|
Liz Claiborne, Inc.
|
|
|
1,097
|
|
|
|
924
|
|
|
Lowe's Cos., Inc.
|
|
|
23,276
|
|
|
Number
of Shares
|
|
|
|
Value
|
|
|
|
Common Stocks and Other
Equity Interests (Continued)
|
|
|
279
|
|
|
Macy's, Inc.
|
|
$
|
7,056
|
|
|
|
190
|
|
|
Marriott International, Inc., Class A
|
|
|
6,517
|
|
|
|
230
|
|
|
Mattel, Inc.
|
|
|
4,313
|
|
|
|
727
|
|
|
McDonald's Corp.
|
|
|
43,314
|
|
|
|
204
|
|
|
McGraw-Hill (The) Cos., Inc.
|
|
|
8,362
|
|
|
|
23
|
|
|
Meredith Corp.
|
|
|
745
|
|
|
|
89
|
|
|
New York Times (The) Co., Class A
|
|
|
1,736
|
|
|
|
176
|
|
|
Newell Rubbermaid, Inc.
|
|
|
3,613
|
|
|
|
1,453
|
|
|
News Corp., Class A
|
|
|
26,009
|
|
|
|
241
|
|
|
NIKE, Inc., Class B
|
|
|
16,099
|
|
|
|
116
|
|
|
Nordstrom, Inc.
|
|
|
4,090
|
|
|
|
169
|
|
|
Office Depot, Inc.*
|
|
|
2,143
|
|
|
|
47
|
|
|
OfficeMax, Inc.
|
|
|
859
|
|
|
|
205
|
|
|
Omnicom Group, Inc.
|
|
|
9,787
|
|
|
|
38
|
|
|
Polo Ralph Lauren Corp.
|
|
|
2,360
|
|
|
|
133
|
|
|
Pulte Homes, Inc.
|
|
|
1,734
|
|
|
|
83
|
|
|
RadioShack Corp.
|
|
|
1,154
|
|
|
|
47
|
|
|
Sears Holdings Corp.*
|
|
|
4,635
|
|
|
|
65
|
|
|
Sherwin-Williams (The) Co.
|
|
|
3,596
|
|
|
|
36
|
|
|
Snap-On, Inc.
|
|
|
2,135
|
|
|
|
49
|
|
|
Stanley Works (The)
|
|
|
2,364
|
|
|
|
442
|
|
|
Staples, Inc.
|
|
|
9,591
|
|
|
|
461
|
|
|
Starbucks Corp.*
|
|
|
7,482
|
|
|
|
119
|
|
|
Starwood Hotels & Resorts Worldwide, Inc.
|
|
|
6,213
|
|
|
|
517
|
|
|
Target Corp.
|
|
|
27,467
|
|
|
|
82
|
|
|
Tiffany & Co.
|
|
|
3,570
|
|
|
|
2,258
|
|
|
Time Warner, Inc.
|
|
|
33,530
|
|
|
|
276
|
|
|
TJX Cos., Inc.
|
|
|
8,893
|
|
|
|
56
|
|
|
VF Corp.
|
|
|
4,165
|
|
|
|
405
|
|
|
Viacom, Inc., Class B*
|
|
|
15,568
|
|
|
|
1,189
|
|
|
Walt Disney (The) Co.
|
|
|
38,558
|
|
|
|
3
|
|
|
Washington Post (The) Co., Class B
|
|
|
1,967
|
|
|
|
53
|
|
|
Wendy's International, Inc.
|
|
|
1,537
|
|
|
|
48
|
|
|
Whirlpool Corp.
|
|
|
3,493
|
|
|
|
110
|
|
|
Wyndham Worldwide Corp.
|
|
|
2,363
|
|
|
|
300
|
|
|
Yum! Brands, Inc.
|
|
|
12,204
|
|
|
|
|
|
656,191
|
|
|
|
|
Consumer Staples10.7%
|
|
|
1,332
|
|
|
Altria Group, Inc.
|
|
|
26,640
|
|
|
|
451
|
|
|
Anheuser-Busch Cos., Inc.
|
|
|
22,189
|
|
|
|
406
|
|
|
Archer-Daniels-Midland Co.
|
|
|
17,888
|
|
|
|
270
|
|
|
Avon Products, Inc.
|
|
|
10,535
|
|
|
|
54
|
|
|
Brown-Forman Corp., Class B
|
|
|
3,673
|
|
|
|
140
|
|
|
Campbell Soup Co.
|
|
|
4,872
|
|
|
|
89
|
|
|
Clorox (The) Co.
|
|
|
4,717
|
|
|
|
1,262
|
|
|
Coca-Cola (The) Co.
|
|
|
74,294
|
|
|
|
185
|
|
|
Coca-Cola Enterprises, Inc.
|
|
|
4,163
|
|
|
|
322
|
|
|
Colgate-Palmolive Co.
|
|
|
22,765
|
|
|
|
308
|
|
|
ConAgra Foods, Inc.
|
|
|
7,256
|
|
|
|
121
|
|
|
Constellation Brands, Inc., Class A*
|
|
|
2,222
|
|
|
See Notes to Financial Statements.
46
Schedule of Investments (Continued)
PowerShares S&P 500 BuyWrite Portfolio
April 30, 2008
Number
of Shares
|
|
|
|
Value
|
|
|
|
Common Stocks and Other
Equity Interests (Continued)
|
|
|
274
|
|
|
Costco Wholesale Corp.
|
|
$
|
19,523
|
|
|
|
905
|
|
|
CVS Caremark Corp.
|
|
|
36,535
|
|
|
|
96
|
|
|
Dean Foods Co.*
|
|
|
2,231
|
|
|
|
72
|
|
|
Estee Lauder (The) Cos., Inc., Class A
|
|
|
3,284
|
|
|
|
213
|
|
|
General Mills, Inc.
|
|
|
12,865
|
|
|
|
199
|
|
|
H.J. Heinz Co.
|
|
|
9,359
|
|
|
|
108
|
|
|
Hershey (The) Co.
|
|
|
4,037
|
|
|
|
165
|
|
|
Kellogg Co.
|
|
|
8,443
|
|
|
|
265
|
|
|
Kimberly-Clark Corp.
|
|
|
16,957
|
|
|
|
968
|
|
|
Kraft Foods, Inc., Class A
|
|
|
30,618
|
|
|
|
425
|
|
|
Kroger (The) Co.
|
|
|
11,581
|
|
|
|
83
|
|
|
McCormick & Co., Inc.
|
|
|
3,137
|
|
|
|
89
|
|
|
Molson Coors Brewing Co., Class B
|
|
|
4,881
|
|
|
|
89
|
|
|
Pepsi Bottling Group (The), Inc.
|
|
|
3,000
|
|
|
|
1,011
|
|
|
PepsiCo, Inc.
|
|
|
69,284
|
|
|
|
1,332
|
|
|
Philip Morris International, Inc.*
|
|
|
67,972
|
|
|
|
1,943
|
|
|
Procter & Gamble (The) Co.
|
|
|
130,277
|
|
|
|
110
|
|
|
Reynolds American, Inc.
|
|
|
5,924
|
|
|
|
278
|
|
|
Safeway, Inc.
|
|
|
8,785
|
|
|
|
460
|
|
|
Sara Lee Corp.
|
|
|
6,675
|
|
|
|
136
|
|
|
SUPERVALU, Inc.
|
|
|
4,502
|
|
|
|
381
|
|
|
Sysco Corp.
|
|
|
11,647
|
|
|
|
176
|
|
|
Tyson Foods, Inc., Class A
|
|
|
3,133
|
|
|
|
96
|
|
|
UST, Inc.
|
|
|
4,999
|
|
|
|
626
|
|
|
Walgreen Co.
|
|
|
21,816
|
|
|
|
1,492
|
|
|
Wal-Mart Stores, Inc.
|
|
|
86,505
|
|
|
|
90
|
|
|
Whole Foods Market, Inc.
|
|
|
2,938
|
|
|
|
136
|
|
|
Wm. Wrigley Jr. Co.
|
|
|
10,358
|
|
|
|
|
|
802,480
|
|
|
|
|
Energy14.3%
|
|
|
295
|
|
|
Anadarko Petroleum Corp.
|
|
|
19,635
|
|
|
|
210
|
|
|
Apache Corp.
|
|
|
28,283
|
|
|
|
195
|
|
|
Baker Hughes, Inc.
|
|
|
15,772
|
|
|
|
185
|
|
|
BJ Services Co.
|
|
|
5,230
|
|
|
|
138
|
|
|
Cameron International Corp.*
|
|
|
6,794
|
|
|
|
289
|
|
|
Chesapeake Energy Corp.
|
|
|
14,941
|
|
|
|
1,311
|
|
|
Chevron Corp.(b)
|
|
|
126,054
|
|
|
|
986
|
|
|
ConocoPhillips
|
|
|
84,944
|
|
|
|
115
|
|
|
CONSOL Energy, Inc.
|
|
|
9,310
|
|
|
|
280
|
|
|
Devon Energy Corp.
|
|
|
31,752
|
|
|
|
442
|
|
|
El Paso Corp.
|
|
|
7,576
|
|
|
|
93
|
|
|
ENSCO International, Inc.
|
|
|
5,927
|
|
|
|
156
|
|
|
EOG Resources, Inc.
|
|
|
20,355
|
|
|
|
3,378
|
|
|
Exxon Mobil Corp.
|
|
|
314,391
|
|
|
|
556
|
|
|
Halliburton Co.
|
|
|
25,526
|
|
|
|
177
|
|
|
Hess Corp.
|
|
|
18,797
|
|
|
|
448
|
|
|
Marathon Oil Corp.
|
|
|
20,415
|
|
|
|
120
|
|
|
Murphy Oil Corp.
|
|
|
10,841
|
|
|
|
179
|
|
|
Nabors Industries Ltd. (Bermuda)*
|
|
|
6,720
|
|
|
|
261
|
|
|
National Oilwell Varco, Inc.*
|
|
|
17,865
|
|
|
Number
of Shares
|
|
|
|
Value
|
|
|
|
Common Stocks and Other
Equity Interests (Continued)
|
|
|
169
|
|
|
Noble Corp.
|
|
$
|
9,511
|
|
|
|
108
|
|
|
Noble Energy, Inc.
|
|
|
9,396
|
|
|
|
520
|
|
|
Occidental Petroleum Corp.
|
|
|
43,269
|
|
|
|
171
|
|
|
Peabody Energy Corp.
|
|
|
10,453
|
|
|
|
94
|
|
|
Range Resources Corp.
|
|
|
6,240
|
|
|
|
71
|
|
|
Rowan Cos., Inc.
|
|
|
2,768
|
|
|
|
756
|
|
|
Schlumberger Ltd.
|
|
|
76,016
|
|
|
|
127
|
|
|
Smith International, Inc.
|
|
|
9,717
|
|
|
|
400
|
|
|
Spectra Energy Corp.
|
|
|
9,880
|
|
|
|
75
|
|
|
Sunoco, Inc.
|
|
|
3,481
|
|
|
|
86
|
|
|
Tesoro Corp.
|
|
|
2,162
|
|
|
|
201
|
|
|
Transocean, Inc.*
|
|
|
29,639
|
|
|
|
337
|
|
|
Valero Energy Corp.
|
|
|
16,462
|
|
|
|
214
|
|
|
Weatherford International Ltd.*
|
|
|
17,263
|
|
|
|
370
|
|
|
Williams (The) Cos., Inc.
|
|
|
13,135
|
|
|
|
322
|
|
|
XTO Energy, Inc.
|
|
|
19,919
|
|
|
|
|
|
1,070,439
|
|
|
|
|
Financials17.4%
|
|
|
208
|
|
|
ACE Ltd.
|
|
|
12,540
|
|
|
|
300
|
|
|
Aflac, Inc.
|
|
|
20,001
|
|
|
|
354
|
|
|
Allstate (The) Corp.
|
|
|
17,827
|
|
|
|
185
|
|
|
AMBAC Financial Group, Inc.
|
|
|
857
|
|
|
|
124
|
|
|
American Capital Strategies Ltd.
|
|
|
3,937
|
|
|
|
730
|
|
|
American Express Co.
|
|
|
35,055
|
|
|
|
1,593
|
|
|
American International Group, Inc.
|
|
|
73,597
|
|
|
|
146
|
|
|
Ameriprise Financial, Inc.
|
|
|
6,934
|
|
|
|
193
|
|
|
Aon Corp.
|
|
|
8,760
|
|
|
|
58
|
|
|
Apartment Investment & Management Co.,
Class A
|
|
|
2,145
|
|
|
|
62
|
|
|
Assurant, Inc.
|
|
|
4,030
|
|
|
|
48
|
|
|
AvalonBay Communities, Inc.
|
|
|
4,788
|
|
|
|
2,805
|
|
|
Bank of America Corp.
|
|
|
105,299
|
|
|
|
721
|
|
|
Bank of New York Mellon (The) Corp.
|
|
|
31,385
|
|
|
|
345
|
|
|
BB&T Corp.
|
|
|
11,830
|
|
|
|
76
|
|
|
Bear Stearns (The) Cos., Inc.
|
|
|
815
|
|
|
|
75
|
|
|
Boston Properties, Inc.
|
|
|
7,537
|
|
|
|
235
|
|
|
Capital One Financial Corp.
|
|
|
12,455
|
|
|
|
112
|
|
|
CB Richard Ellis Group, Inc., Class A*
|
|
|
2,589
|
|
|
|
593
|
|
|
Charles Schwab (The) Corp.
|
|
|
12,809
|
|
|
|
234
|
|
|
Chubb (The) Corp.
|
|
|
12,395
|
|
|
|
107
|
|
|
Cincinnati Financial Corp.
|
|
|
3,841
|
|
|
|
178
|
|
|
CIT Group, Inc.(b)
|
|
|
1,938
|
|
|
|
3,288
|
|
|
Citigroup, Inc.
|
|
|
83,087
|
|
|
|
33
|
|
|
CME Group, Inc.
|
|
|
15,096
|
|
|
|
98
|
|
|
Comerica, Inc.
|
|
|
3,404
|
|
|
|
376
|
|
|
Countrywide Financial Corp.
|
|
|
2,173
|
|
|
|
77
|
|
|
Developers Diversified Realty Corp.
|
|
|
3,307
|
|
|
|
309
|
|
|
Discover Financial Services
|
|
|
5,627
|
|
|
|
291
|
|
|
E*TRADE Financial Corp.*
|
|
|
1,158
|
|
|
|
171
|
|
|
Equity Residential
|
|
|
7,100
|
|
|
See Notes to Financial Statements.
47
Schedule of Investments (Continued)
PowerShares S&P 500 BuyWrite Portfolio
April 30, 2008
Number
of Shares
|
|
|
|
Value
|
|
|
|
Common Stocks and Other
Equity Interests (Continued)
|
|
|
617
|
|
|
Fannie Mae
|
|
$
|
17,461
|
|
|
|
56
|
|
|
Federated Investors, Inc., Class B
|
|
|
1,875
|
|
|
|
337
|
|
|
Fifth Third Bancorp
|
|
|
7,222
|
|
|
|
80
|
|
|
First Horizon National Corp.
|
|
|
864
|
|
|
|
99
|
|
|
Franklin Resources, Inc.
|
|
|
9,420
|
|
|
|
408
|
|
|
Freddie Mac
|
|
|
10,163
|
|
|
|
168
|
|
|
General Growth Properties, Inc.
|
|
|
6,881
|
|
|
|
273
|
|
|
Genworth Financial, Inc., Class A
|
|
|
6,295
|
|
|
|
250
|
|
|
Goldman Sachs Group (The), Inc.
|
|
|
47,843
|
|
|
|
198
|
|
|
Hartford Financial Services Group (The), Inc.
|
|
|
14,111
|
|
|
|
148
|
|
|
HCP, Inc.
|
|
|
5,284
|
|
|
|
338
|
|
|
Host Hotels & Resorts, Inc.
|
|
|
5,814
|
|
|
|
335
|
|
|
Hudson City Bancorp, Inc.
|
|
|
6,409
|
|
|
|
231
|
|
|
Huntington Bancshares, Inc.
|
|
|
2,169
|
|
|
|
45
|
|
|
IntercontinentalExchange, Inc.*
|
|
|
6,982
|
|
|
|
94
|
|
|
Janus Capital Group, Inc.
|
|
|
2,638
|
|
|
|
2,145
|
|
|
JPMorgan Chase & Co.
|
|
|
102,208
|
|
|
|
252
|
|
|
Keycorp
|
|
|
6,081
|
|
|
|
163
|
|
|
Kimco Realty Corp.
|
|
|
6,505
|
|
|
|
86
|
|
|
Legg Mason, Inc.
|
|
|
5,184
|
|
|
|
335
|
|
|
Lehman Brothers Holdings, Inc.
|
|
|
14,820
|
|
|
|
108
|
|
|
Leucadia National Corp.
|
|
|
5,532
|
|
|
|
168
|
|
|
Lincoln National Corp.
|
|
|
9,032
|
|
|
|
277
|
|
|
Loews Corp.
|
|
|
11,664
|
|
|
|
48
|
|
|
M&T Bank Corp.
|
|
|
4,475
|
|
|
|
329
|
|
|
Marsh & McLennan Cos., Inc.
|
|
|
9,077
|
|
|
|
169
|
|
|
Marshall & Ilsley Corp.
|
|
|
4,222
|
|
|
|
136
|
|
|
MBIA, Inc.
|
|
|
1,414
|
|
|
|
614
|
|
|
Merrill Lynch & Co., Inc.
|
|
|
30,596
|
|
|
|
448
|
|
|
MetLife, Inc.
|
|
|
27,261
|
|
|
|
75
|
|
|
MGIC Investment Corp.
|
|
|
977
|
|
|
|
133
|
|
|
Moody's Corp.
|
|
|
4,916
|
|
|
|
698
|
|
|
Morgan Stanley
|
|
|
33,923
|
|
|
|
409
|
|
|
National City Corp.
|
|
|
2,577
|
|
|
|
121
|
|
|
Northern Trust Corp.
|
|
|
8,967
|
|
|
|
168
|
|
|
NYSE Euronext
|
|
|
11,105
|
|
|
|
111
|
|
|
Plum Creek Timber Co., Inc.
|
|
|
4,533
|
|
|
|
216
|
|
|
PNC Financial Services Group, Inc.
|
|
|
14,980
|
|
|
|
163
|
|
|
Principal Financial Group, Inc.
|
|
|
8,747
|
|
|
|
428
|
|
|
Progressive (The) Corp.
|
|
|
7,785
|
|
|
|
163
|
|
|
ProLogis
|
|
|
10,205
|
|
|
|
282
|
|
|
Prudential Financial, Inc.
|
|
|
21,350
|
|
|
|
78
|
|
|
Public Storage
|
|
|
7,075
|
|
|
|
438
|
|
|
Regions Financial Corp.
|
|
|
9,601
|
|
|
|
58
|
|
|
Safeco Corp.
|
|
|
3,871
|
|
|
|
141
|
|
|
Simon Property Group, Inc.
|
|
|
14,080
|
|
|
|
301
|
|
|
SLM Corp.*
|
|
|
5,578
|
|
|
|
234
|
|
|
Sovereign Bancorp, Inc.
|
|
|
1,748
|
|
|
|
244
|
|
|
State Street Corp.
|
|
|
17,602
|
|
|
|
222
|
|
|
SunTrust Banks, Inc.
|
|
|
12,377
|
|
|
|
166
|
|
|
T. Rowe Price Group, Inc.
|
|
|
9,721
|
|
|
Number
of Shares
|
|
|
|
Value
|
|
|
|
Common Stocks and Other
Equity Interests (Continued)
|
|
|
59
|
|
|
Torchmark Corp.
|
|
$
|
3,820
|
|
|
|
391
|
|
|
Travelers (The) Cos., Inc.
|
|
|
19,706
|
|
|
|
1,092
|
|
|
U.S. Bancorp
|
|
|
37,008
|
|
|
|
219
|
|
|
Unum Group
|
|
|
5,083
|
|
|
|
85
|
|
|
Vornado Realty Trust
|
|
|
7,913
|
|
|
|
1,344
|
|
|
Wachovia Corp.
|
|
|
39,178
|
|
|
|
668
|
|
|
Washington Mutual, Inc.
|
|
|
8,210
|
|
|
|
2,082
|
|
|
Wells Fargo & Co.
|
|
|
61,940
|
|
|
|
114
|
|
|
XL Capital Ltd., Class A
|
|
|
3,977
|
|
|
|
68
|
|
|
Zions Bancorporation
|
|
|
3,152
|
|
|
|
|
|
1,305,523
|
|
|
|
|
Health Care11.5%
|
|
|
977
|
|
|
Abbott Laboratories
|
|
|
51,537
|
|
|
|
313
|
|
|
Aetna, Inc.
|
|
|
13,647
|
|
|
|
193
|
|
|
Allergan, Inc.
|
|
|
10,879
|
|
|
|
103
|
|
|
AmerisourceBergen Corp.
|
|
|
4,177
|
|
|
|
686
|
|
|
Amgen, Inc.*
|
|
|
28,723
|
|
|
|
108
|
|
|
Applera Corp. - Applied Biosystems Group
|
|
|
3,446
|
|
|
|
68
|
|
|
Barr Pharmaceuticals, Inc.*
|
|
|
3,416
|
|
|
|
400
|
|
|
Baxter International, Inc.
|
|
|
24,928
|
|
|
|
154
|
|
|
Becton, Dickinson & Co.
|
|
|
13,768
|
|
|
|
189
|
|
|
Biogen Idec, Inc.*
|
|
|
11,470
|
|
|
|
848
|
|
|
Boston Scientific Corp.*
|
|
|
11,304
|
|
|
|
1,250
|
|
|
Bristol-Myers Squibb Co.
|
|
|
27,463
|
|
|
|
63
|
|
|
C.R. Bard, Inc.
|
|
|
5,933
|
|
|
|
225
|
|
|
Cardinal Health, Inc.
|
|
|
11,716
|
|
|
|
274
|
|
|
Celgene Corp.*
|
|
|
17,026
|
|
|
|
177
|
|
|
CIGNA Corp.
|
|
|
7,560
|
|
|
|
98
|
|
|
Coventry Health Care, Inc.*
|
|
|
4,384
|
|
|
|
315
|
|
|
Covidien Ltd.
|
|
|
14,707
|
|
|
|
625
|
|
|
Eli Lilly & Co.
|
|
|
30,088
|
|
|
|
160
|
|
|
Express Scripts, Inc.*
|
|
|
11,203
|
|
|
|
196
|
|
|
Forest Laboratories, Inc.*
|
|
|
6,803
|
|
|
|
169
|
|
|
Genzyme Corp.*
|
|
|
11,889
|
|
|
|
587
|
|
|
Gilead Sciences, Inc.*
|
|
|
30,383
|
|
|
|
102
|
|
|
Hospira, Inc.*
|
|
|
4,197
|
|
|
|
108
|
|
|
Humana, Inc.*
|
|
|
5,161
|
|
|
|
118
|
|
|
IMS Health, Inc.
|
|
|
2,921
|
|
|
|
1,789
|
|
|
Johnson & Johnson
|
|
|
120,023
|
|
|
|
152
|
|
|
King Pharmaceuticals, Inc.*
|
|
|
1,427
|
|
|
|
71
|
|
|
Laboratory Corp. of America Holdings*
|
|
|
5,369
|
|
|
|
183
|
|
|
McKesson Corp.
|
|
|
9,538
|
|
|
|
331
|
|
|
Medco Health Solutions, Inc.*
|
|
|
16,398
|
|
|
|
709
|
|
|
Medtronic, Inc.
|
|
|
34,514
|
|
|
|
1,368
|
|
|
Merck & Co., Inc.
|
|
|
52,038
|
|
|
|
36
|
|
|
Millipore Corp.*
|
|
|
2,524
|
|
|
|
192
|
|
|
Mylan, Inc.
|
|
|
2,529
|
|
|
|
84
|
|
|
Patterson Cos., Inc.*
|
|
|
2,873
|
|
|
|
75
|
|
|
PerkinElmer, Inc.
|
|
|
1,992
|
|
|
|
4,269
|
|
|
Pfizer, Inc.
|
|
|
85,849
|
|
|
See Notes to Financial Statements.
48
Schedule of Investments (Continued)
PowerShares S&P 500 BuyWrite Portfolio
April 30, 2008
Number
of Shares
|
|
|
|
Value
|
|
|
|
Common Stocks and Other
Equity Interests (Continued)
|
|
|
102
|
|
|
Quest Diagnostics, Inc.
|
|
$
|
5,118
|
|
|
|
1,023
|
|
|
Schering-Plough Corp.
|
|
|
18,833
|
|
|
|
217
|
|
|
St. Jude Medical, Inc.*
|
|
|
9,500
|
|
|
|
151
|
|
|
Stryker Corp.
|
|
|
9,789
|
|
|
|
295
|
|
|
Tenet Healthcare Corp.*
|
|
|
1,888
|
|
|
|
264
|
|
|
Thermo Fisher Scientific, Inc.*
|
|
|
15,278
|
|
|
|
790
|
|
|
UnitedHealth Group, Inc.
|
|
|
25,778
|
|
|
|
81
|
|
|
Varian Medical Systems, Inc.*
|
|
|
3,797
|
|
|
|
65
|
|
|
Waters Corp.*
|
|
|
3,995
|
|
|
|
66
|
|
|
Watson Pharmaceuticals, Inc.*
|
|
|
2,049
|
|
|
|
342
|
|
|
WellPoint, Inc.*
|
|
|
17,015
|
|
|
|
845
|
|
|
Wyeth
|
|
|
37,577
|
|
|
|
147
|
|
|
Zimmer Holdings, Inc. *
|
|
|
10,902
|
|
|
|
|
|
865,322
|
|
|
|
|
Industrials12.0%
|
|
|
447
|
|
|
3
M Co.
|
|
|
34,374
|
|
|
|
213
|
|
|
Allied Waste Industries, Inc.*
|
|
|
2,633
|
|
|
|
69
|
|
|
Avery Dennison Corp.
|
|
|
3,325
|
|
|
|
483
|
|
|
Boeing Co.
|
|
|
40,987
|
|
|
|
187
|
|
|
Burlington Northern Santa Fe Corp.
|
|
|
19,177
|
|
|
|
110
|
|
|
C.H. Robinson Worldwide, Inc.
|
|
|
6,895
|
|
|
|
394
|
|
|
Caterpillar, Inc.
|
|
|
32,261
|
|
|
|
82
|
|
|
Cintas Corp.
|
|
|
2,428
|
|
|
|
113
|
|
|
Cooper Industries Ltd., Class A
|
|
|
4,790
|
|
|
|
255
|
|
|
CSX Corp.
|
|
|
16,052
|
|
|
|
127
|
|
|
Cummins, Inc.
|
|
|
7,957
|
|
|
|
160
|
|
|
Danaher Corp.
|
|
|
12,483
|
|
|
|
276
|
|
|
Deere & Co.
|
|
|
23,203
|
|
|
|
121
|
|
|
Dover Corp.
|
|
|
5,986
|
|
|
|
103
|
|
|
Eaton Corp.
|
|
|
9,048
|
|
|
|
497
|
|
|
Emerson Electric Co.
|
|
|
25,973
|
|
|
|
82
|
|
|
Equifax, Inc.
|
|
|
3,138
|
|
|
|
135
|
|
|
Expeditors International of Washington, Inc.
|
|
|
6,290
|
|
|
|
195
|
|
|
FedEx Corp.
|
|
|
18,695
|
|
|
|
56
|
|
|
Fluor Corp.(b)
|
|
|
8,561
|
|
|
|
254
|
|
|
General Dynamics Corp.
|
|
|
22,967
|
|
|
|
6,305
|
|
|
General Electric Co.
|
|
|
206,173
|
|
|
|
80
|
|
|
Goodrich Corp.
|
|
|
5,452
|
|
|
|
470
|
|
|
Honeywell International, Inc.
|
|
|
27,918
|
|
|
|
253
|
|
|
Illinois Tool Works, Inc.
|
|
|
13,229
|
|
|
|
172
|
|
|
Ingersoll-Rand Co. Ltd., Class A
|
|
|
7,633
|
|
|
|
117
|
|
|
ITT Corp.
|
|
|
7,488
|
|
|
|
76
|
|
|
Jacobs Engineering Group, Inc.*
|
|
|
6,561
|
|
|
|
78
|
|
|
L-3 Communications Holdings, Inc.
|
|
|
8,693
|
|
|
|
217
|
|
|
Lockheed Martin Corp.
|
|
|
23,011
|
|
|
|
83
|
|
|
Manitowoc (The) Co., Inc.
|
|
|
3,139
|
|
|
|
236
|
|
|
Masco Corp.
|
|
|
4,298
|
|
|
|
79
|
|
|
Monster Worldwide, Inc.*
|
|
|
1,922
|
|
|
|
238
|
|
|
Norfolk Southern Corp.
|
|
|
14,180
|
|
|
|
213
|
|
|
Northrop Grumman Corp.
|
|
|
15,670
|
|
|
Number
of Shares
|
|
|
|
Value
|
|
|
|
Common Stocks and Other
Equity Interests (Continued)
|
|
|
232
|
|
|
PACCAR, Inc.
|
|
$
|
10,978
|
|
|
|
78
|
|
|
Pall Corp.
|
|
|
2,712
|
|
|
|
106
|
|
|
Parker Hannifin Corp.
|
|
|
8,464
|
|
|
|
136
|
|
|
Pitney Bowes, Inc.
|
|
|
4,911
|
|
|
|
89
|
|
|
Precision Castparts Corp.
|
|
|
10,463
|
|
|
|
139
|
|
|
R.R. Donnelley & Sons Co.
|
|
|
4,259
|
|
|
|
270
|
|
|
Raytheon Co.
|
|
|
17,272
|
|
|
|
100
|
|
|
Robert Half International, Inc.
|
|
|
2,370
|
|
|
|
96
|
|
|
Rockwell Automation, Inc.
|
|
|
5,206
|
|
|
|
102
|
|
|
Rockwell Collins, Inc.
|
|
|
6,437
|
|
|
|
36
|
|
|
Ryder System, Inc.
|
|
|
2,465
|
|
|
|
473
|
|
|
Southwest Airlines Co.
|
|
|
6,263
|
|
|
|
65
|
|
|
Terex Corp.*
|
|
|
4,529
|
|
|
|
157
|
|
|
Textron, Inc.
|
|
|
9,579
|
|
|
|
109
|
|
|
Trane, Inc.
|
|
|
5,070
|
|
|
|
306
|
|
|
Tyco International Ltd. (Bermuda)
|
|
|
14,318
|
|
|
|
165
|
|
|
Union Pacific Corp.
|
|
|
23,956
|
|
|
|
653
|
|
|
United Parcel Service, Inc., Class B
|
|
|
47,283
|
|
|
|
620
|
|
|
United Technologies Corp.
|
|
|
44,931
|
|
|
|
42
|
|
|
W.W. Grainger, Inc.
|
|
|
3,642
|
|
|
|
313
|
|
|
Waste Management, Inc.
|
|
|
11,299
|
|
|
|
|
|
898,997
|
|
|
|
|
Information Technology16.3%
|
|
|
336
|
|
|
Adobe Systems, Inc. *
|
|
|
12,529
|
|
|
|
391
|
|
|
Advanced Micro Devices, Inc.*
|
|
|
2,330
|
|
|
|
62
|
|
|
Affiliated Computer Services, Inc., Class A*
|
|
|
3,284
|
|
|
|
231
|
|
|
Agilent Technologies, Inc.*
|
|
|
6,979
|
|
|
|
108
|
|
|
Akamai Technologies, Inc.*
|
|
|
3,863
|
|
|
|
199
|
|
|
Altera Corp.
|
|
|
4,235
|
|
|
|
186
|
|
|
Analog Devices, Inc.
|
|
|
5,991
|
|
|
|
555
|
|
|
Apple, Inc.*
|
|
|
96,542
|
|
|
|
855
|
|
|
Applied Materials, Inc.
|
|
|
15,954
|
|
|
|
149
|
|
|
Autodesk, Inc.*
|
|
|
5,662
|
|
|
|
330
|
|
|
Automatic Data Processing, Inc.
|
|
|
14,586
|
|
|
|
122
|
|
|
BMC Software, Inc.*
|
|
|
4,241
|
|
|
|
301
|
|
|
Broadcom Corp., Class A*
|
|
|
7,814
|
|
|
|
246
|
|
|
CA, Inc.
|
|
|
5,446
|
|
|
|
53
|
|
|
Ciena Corp.*
|
|
|
1,792
|
|
|
|
3,764
|
|
|
Cisco Systems, Inc.*
|
|
|
96,509
|
|
|
|
119
|
|
|
Citrix Systems, Inc.*
|
|
|
3,897
|
|
|
|
186
|
|
|
Cognizant Technology Solutions Corp.,
Class A*
|
|
|
5,999
|
|
|
|
106
|
|
|
Computer Sciences Corp.*
|
|
|
4,621
|
|
|
|
175
|
|
|
Compuware Corp.*
|
|
|
1,320
|
|
|
|
81
|
|
|
Convergys Corp.*
|
|
|
1,273
|
|
|
|
995
|
|
|
Corning, Inc.
|
|
|
26,576
|
|
|
|
1,290
|
|
|
Dell, Inc.*
|
|
|
24,033
|
|
|
|
704
|
|
|
eBay, Inc.*
|
|
|
22,028
|
|
|
|
201
|
|
|
Electronic Arts, Inc.*
|
|
|
10,345
|
|
|
|
322
|
|
|
Electronic Data Systems Corp.
|
|
|
5,976
|
|
|
See Notes to Financial Statements.
49
Schedule of Investments (Continued)
PowerShares S&P 500 BuyWrite Portfolio
April 30, 2008
Number
of Shares
|
|
|
|
Value
|
|
|
|
Common Stocks and Other
Equity Interests (Continued)
|
|
|
1,326
|
|
|
EMC Corp.*
|
|
$
|
20,420
|
|
|
|
111
|
|
|
Fidelity National Information Services, Inc.
|
|
|
4,003
|
|
|
|
105
|
|
|
Fiserv, Inc.*
|
|
|
5,308
|
|
|
|
147
|
|
|
Google, Inc., Class A*
|
|
|
84,421
|
|
|
|
1,557
|
|
|
Hewlett-Packard Co.
|
|
|
72,167
|
|
|
|
3,655
|
|
|
Intel Corp.
|
|
|
81,360
|
|
|
|
875
|
|
|
International Business Machines Corp.
|
|
|
105,613
|
|
|
|
207
|
|
|
Intuit, Inc.*
|
|
|
5,583
|
|
|
|
130
|
|
|
Jabil Circuit, Inc.
|
|
|
1,414
|
|
|
|
145
|
|
|
JDS Uniphase Corp.*
|
|
|
2,075
|
|
|
|
331
|
|
|
Juniper Networks, Inc.*
|
|
|
9,142
|
|
|
|
116
|
|
|
KLA-Tencor Corp.
|
|
|
5,067
|
|
|
|
59
|
|
|
Lexmark International, Inc., Class A*
|
|
|
1,852
|
|
|
|
140
|
|
|
Linear Technology Corp.
|
|
|
4,894
|
|
|
|
428
|
|
|
LSI Corp.*
|
|
|
2,654
|
|
|
|
144
|
|
|
MEMC Electronic Materials, Inc.*
|
|
|
9,068
|
|
|
|
123
|
|
|
Microchip Technology, Inc.
|
|
|
4,520
|
|
|
|
480
|
|
|
Micron Technology, Inc.*
|
|
|
3,706
|
|
|
|
5,054
|
|
|
Microsoft Corp.
|
|
|
144,141
|
|
|
|
89
|
|
|
Molex, Inc.
|
|
|
2,526
|
|
|
|
1,423
|
|
|
Motorola, Inc.
|
|
|
14,173
|
|
|
|
144
|
|
|
National Semiconductor Corp.
|
|
|
2,936
|
|
|
|
222
|
|
|
NetApp, Inc.*
|
|
|
5,372
|
|
|
|
217
|
|
|
Novell, Inc.*
|
|
|
1,363
|
|
|
|
68
|
|
|
Novellus Systems, Inc.*
|
|
|
1,486
|
|
|
|
351
|
|
|
Nvidia Corp.*
|
|
|
7,213
|
|
|
|
2,497
|
|
|
Oracle Corp.*
|
|
|
52,062
|
|
|
|
204
|
|
|
Paychex, Inc.
|
|
|
7,419
|
|
|
|
85
|
|
|
QLogic Corp.*
|
|
|
1,357
|
|
|
|
1,018
|
|
|
QUALCOMM, Inc.
|
|
|
43,967
|
|
|
|
144
|
|
|
SanDisk Corp.*
|
|
|
3,901
|
|
|
|
500
|
|
|
Sun Microsystems, Inc.*
|
|
|
7,830
|
|
|
|
535
|
|
|
Symantec Corp.*
|
|
|
9,213
|
|
|
|
267
|
|
|
Tellabs, Inc.*
|
|
|
1,378
|
|
|
|
117
|
|
|
Teradata Corp.*
|
|
|
2,491
|
|
|
|
108
|
|
|
Teradyne, Inc.*
|
|
|
1,435
|
|
|
|
837
|
|
|
Texas Instruments, Inc.
|
|
|
24,407
|
|
|
|
129
|
|
|
Total System Services, Inc.
|
|
|
3,070
|
|
|
|
307
|
|
|
Tyco Electronics Ltd.
|
|
|
11,485
|
|
|
|
216
|
|
|
Unisys Corp.*
|
|
|
899
|
|
|
|
137
|
|
|
VeriSign, Inc.*
|
|
|
4,939
|
|
|
|
473
|
|
|
Western Union (The) Co.
|
|
|
10,879
|
|
|
|
580
|
|
|
Xerox Corp.
|
|
|
8,103
|
|
|
|
184
|
|
|
Xilinx, Inc.
|
|
|
4,558
|
|
|
|
845
|
|
|
Yahoo!, Inc.*
|
|
|
23,161
|
|
|
|
|
|
1,218,856
|
|
|
|
|
Materials3.6%
|
|
|
135
|
|
|
Air Products & Chemicals, Inc.
|
|
|
13,288
|
|
|
|
514
|
|
|
Alcoa, Inc.
|
|
|
17,877
|
|
|
|
65
|
|
|
Allegheny Technologies, Inc.
|
|
|
4,474
|
|
|
Number
of Shares
|
|
|
|
Value
|
|
|
|
Common Stocks and Other
Equity Interests (Continued)
|
|
|
35
|
|
|
Ashland, Inc.
|
|
$
|
1,856
|
|
|
|
61
|
|
|
Ball Corp.
|
|
|
3,281
|
|
|
|
62
|
|
|
Bemis Co., Inc.
|
|
|
1,631
|
|
|
|
593
|
|
|
Dow Chemical (The) Co.
|
|
|
23,809
|
|
|
|
568
|
|
|
E.I. du Pont de Nemours & Co.
|
|
|
27,780
|
|
|
|
51
|
|
|
Eastman Chemical Co.
|
|
|
3,749
|
|
|
|
111
|
|
|
Ecolab, Inc.
|
|
|
5,102
|
|
|
|
241
|
|
|
Freeport-McMoRan Copper & Gold, Inc.,
Class B
|
|
|
27,413
|
|
|
|
71
|
|
|
Hercules, Inc.
|
|
|
1,335
|
|
|
|
50
|
|
|
International Flavors & Fragrances, Inc.
|
|
|
2,281
|
|
|
|
270
|
|
|
International Paper Co.
|
|
|
7,066
|
|
|
|
109
|
|
|
MeadWestvaco Corp.
|
|
|
2,867
|
|
|
|
346
|
|
|
Monsanto Co.
|
|
|
39,450
|
|
|
|
286
|
|
|
Newmont Mining Corp.
|
|
|
12,644
|
|
|
|
181
|
|
|
Nucor Corp.
|
|
|
13,666
|
|
|
|
81
|
|
|
Pactiv Corp.*
|
|
|
1,927
|
|
|
|
105
|
|
|
PPG Industries, Inc.
|
|
|
6,444
|
|
|
|
198
|
|
|
Praxair, Inc.
|
|
|
18,079
|
|
|
|
81
|
|
|
Rohm & Haas Co.
|
|
|
4,329
|
|
|
|
105
|
|
|
Sealed Air Corp.
|
|
|
2,655
|
|
|
|
83
|
|
|
Sigma-Aldrich Corp.
|
|
|
4,733
|
|
|
|
64
|
|
|
Titanium Metals Corp.
|
|
|
975
|
|
|
|
75
|
|
|
United States Steel Corp.
|
|
|
11,546
|
|
|
|
69
|
|
|
Vulcan Materials Co.
|
|
|
4,749
|
|
|
|
132
|
|
|
Weyerhaeuser Co.
|
|
|
8,432
|
|
|
|
|
|
273,438
|
|
|
|
|
Telecommunication Services3.5%
|
|
|
256
|
|
|
American Tower Corp., Class A*
|
|
|
11,116
|
|
|
|
3,811
|
|
|
AT&T, Inc.
|
|
|
147,525
|
|
|
|
67
|
|
|
CenturyTel, Inc.
|
|
|
2,174
|
|
|
|
203
|
|
|
Citizens Communications Co.
|
|
|
2,176
|
|
|
|
99
|
|
|
Embarq Corp.
|
|
|
4,115
|
|
|
|
23
|
|
|
Fairpoint Communications, Inc.
|
|
|
212
|
|
|
|
971
|
|
|
Qwest Communications International, Inc.
|
|
|
5,010
|
|
|
|
1,799
|
|
|
Sprint Nextel Corp.
|
|
|
14,374
|
|
|
|
1,813
|
|
|
Verizon Communications, Inc.
|
|
|
69,764
|
|
|
|
291
|
|
|
Windstream Corp.
|
|
|
3,416
|
|
|
|
|
|
259,882
|
|
|
|
|
Utilities3.7%
|
|
|
423
|
|
|
AES (The) Corp.*
|
|
|
7,343
|
|
|
|
105
|
|
|
Allegheny Energy, Inc.
|
|
|
5,649
|
|
|
|
135
|
|
|
Ameren Corp.
|
|
|
6,124
|
|
|
|
253
|
|
|
American Electric Power Co., Inc.
|
|
|
11,291
|
|
|
|
212
|
|
|
CenterPoint Energy, Inc.
|
|
|
3,227
|
|
|
|
139
|
|
|
CMS Energy Corp.
|
|
|
2,027
|
|
|
|
175
|
|
|
Consolidated Edison, Inc.
|
|
|
7,280
|
|
|
|
112
|
|
|
Constellation Energy Group, Inc.
|
|
|
9,481
|
|
|
|
363
|
|
|
Dominion Resources, Inc.
|
|
|
15,751
|
|
|
|
105
|
|
|
DTE Energy Co.
|
|
|
4,233
|
|
|
See Notes to Financial Statements.
50
Schedule of Investments (Continued)
PowerShares S&P 500 BuyWrite Portfolio
April 30, 2008
Number
of Shares
|
|
|
|
Value
|
|
|
|
Common Stocks and Other
Equity Interests (Continued)
|
|
|
797
|
|
|
Duke Energy Corp.
|
|
$
|
14,593
|
|
|
|
320
|
|
|
Dynegy, Inc., Class A*
|
|
|
2,758
|
|
|
|
205
|
|
|
Edison International
|
|
|
10,695
|
|
|
|
121
|
|
|
Entergy Corp.
|
|
|
13,898
|
|
|
|
418
|
|
|
Exelon Corp.
|
|
|
35,730
|
|
|
|
192
|
|
|
FirstEnergy Corp.
|
|
|
14,523
|
|
|
|
258
|
|
|
FPL Group, Inc.
|
|
|
17,102
|
|
|
|
48
|
|
|
Integrys Energy Group, Inc.
|
|
|
2,299
|
|
|
|
27
|
|
|
Nicor, Inc.
|
|
|
948
|
|
|
|
174
|
|
|
NiSource, Inc.
|
|
|
3,115
|
|
|
|
126
|
|
|
Pepco Holdings, Inc.
|
|
|
3,139
|
|
|
|
225
|
|
|
PG&E Corp.
|
|
|
9,000
|
|
|
|
65
|
|
|
Pinnacle West Capital Corp.
|
|
|
2,206
|
|
|
|
235
|
|
|
PPL Corp.
|
|
|
11,285
|
|
|
|
168
|
|
|
Progress Energy, Inc.
|
|
|
7,054
|
|
|
|
321
|
|
|
Public Service Enterprise Group, Inc.
|
|
|
14,095
|
|
|
|
111
|
|
|
Questar Corp.
|
|
|
6,885
|
|
|
|
165
|
|
|
Sempra Energy
|
|
|
9,351
|
|
|
|
483
|
|
|
Southern Co.
|
|
|
17,981
|
|
|
|
130
|
|
|
TECO Energy, Inc.
|
|
|
2,081
|
|
|
|
277
|
|
|
Xcel Energy, Inc.
|
|
|
5,762
|
|
|
|
|
|
276,906
|
|
|
|
|
|
|
Total Common Stocks and Other
Equity Interests
(Cost $7,613,211)
|
|
|
7,628,034
|
|
|
|
|
Money Market Fund0.1%
|
|
|
5,958
|
|
|
Goldman Sachs Financial Square Prime
Obligations Institutional Share Class
(Cost $5,958)
|
|
|
5,958
|
|
|
|
|
|
|
Total Investments
(Cost $7,619,169)101.8%
|
|
|
7,633,992
|
|
|
|
|
|
|
Liabilities in excess of other assets(1.8%)
|
|
|
(133,249
|
)
|
|
|
|
|
|
Net Assets100.0%
|
|
$
|
7,500,743
|
|
|
* Non-income producing security.
(a) Except as otherwise noted, a portion of all securities in the portfolio are subject to call options written. See Note 2H.
(b) Security not subject to call options written.
See Notes to Financial Statements.
51
Schedule of Investments
PowerShares Value Line Industry Rotation Portfolio
April 30, 2008
Number
of Shares
|
|
|
|
Value
|
|
|
|
Common Stocks100.0%
|
|
|
|
Aerospace/Defense1.3%
|
|
|
8,179
|
|
|
Raytheon Co.
|
|
$
|
523,211
|
|
|
|
|
Agriculture1.4%
|
|
|
9,320
|
|
|
Universal Corp.
|
|
|
598,251
|
|
|
|
|
Beverages3.7%
|
|
|
9,141
|
|
|
Coca-Cola (The) Co.
|
|
|
538,130
|
|
|
|
21,694
|
|
|
Coca-Cola Enterprises, Inc.
|
|
|
488,115
|
|
|
|
15,909
|
|
|
Green Mountain Coffee Roasters, Inc.*
|
|
|
512,270
|
|
|
|
|
|
1,538,515
|
|
|
|
|
Biotechnology2.2%
|
|
|
37,678
|
|
|
Millennium Pharmaceuticals, Inc.*
|
|
|
937,052
|
|
|
|
|
Chemicals5.2%
|
|
|
7,345
|
|
|
Agrium Inc (Canada)
|
|
|
580,254
|
|
|
|
4,505
|
|
|
Monsanto Co.
|
|
|
513,660
|
|
|
|
4,705
|
|
|
Mosaic (The) Co.*
|
|
|
576,409
|
|
|
|
8,078
|
|
|
NewMarket Corp.
|
|
|
524,505
|
|
|
|
|
|
2,194,828
|
|
|
|
|
Closed-end Funds1.3%
|
|
|
49,282
|
|
|
DNP Select Income Fund, Inc.**
|
|
|
539,638
|
|
|
|
|
Coal1.4%
|
|
|
9,992
|
|
|
Arch Coal, Inc.
|
|
|
573,141
|
|
|
|
|
Commercial Services4.1%
|
|
|
8,306
|
|
|
Apollo Group, Inc., Class A*
|
|
|
422,775
|
|
|
|
11,598
|
|
|
DeVry, Inc.
|
|
|
661,086
|
|
|
|
9,695
|
|
|
FTI Consulting, Inc.*
|
|
|
620,480
|
|
|
|
|
|
1,704,341
|
|
|
|
|
Computers3.8%
|
|
|
8,424
|
|
|
IHS, Inc., Class A*
|
|
|
556,405
|
|
|
|
15,853
|
|
|
Micros Systems, Inc.*
|
|
|
565,160
|
|
|
|
16,007
|
|
|
Western Digital Corp.*
|
|
|
464,043
|
|
|
|
|
|
1,585,608
|
|
|
|
|
Distribution/Wholesale1.5%
|
|
|
29,586
|
|
|
LKQ Corp.*
|
|
|
643,791
|
|
|
|
|
Diversified Financial Services1.2%
|
|
|
13,238
|
|
|
Nasdaq Stock Market (The), Inc.*
|
|
|
482,525
|
|
|
|
|
Electric1.3%
|
|
|
9,950
|
|
|
ITC Holdings, Corp.
|
|
|
555,011
|
|
|
|
|
Electronics4.2%
|
|
|
11,481
|
|
|
Axsys Technologies, Inc.*
|
|
|
626,289
|
|
|
|
50,565
|
|
|
Flextronics International Ltd. (Singapore)*
|
|
|
525,370
|
|
|
|
17,716
|
|
|
FLIR Systems, Inc.*
|
|
|
608,190
|
|
|
|
|
|
1,759,849
|
|
|
Number
of Shares
|
|
|
|
Value
|
|
|
|
Common Stocks (Continued)
|
|
|
|
Engineering & Construction2.8%
|
|
|
4,044
|
|
|
Fluor Corp.
|
|
$
|
618,206
|
|
|
|
6,539
|
|
|
Jacobs Engineering Group, Inc.*
|
|
|
564,512
|
|
|
|
|
|
1,182,718
|
|
|
|
|
Environmental Control2.6%
|
|
|
21,815
|
|
|
American Ecology Corp.
|
|
|
579,842
|
|
|
|
9,633
|
|
|
Stericycle, Inc.*
|
|
|
514,210
|
|
|
|
|
|
1,094,052
|
|
|
|
|
Food2.7%
|
|
|
17,962
|
|
|
Safeway, Inc.
|
|
|
567,599
|
|
|
|
18,136
|
|
|
Sysco Corp.
|
|
|
554,418
|
|
|
|
|
|
1,122,017
|
|
|
|
|
Gas2.8%
|
|
|
8,547
|
|
|
Energen Corp.
|
|
|
583,248
|
|
|
|
20,219
|
|
|
Vectren Corp.
|
|
|
571,793
|
|
|
|
|
|
1,155,041
|
|
|
|
|
Healthcare - Products2.4%
|
|
|
1,837
|
|
|
Intuitive Surgical, Inc.*
|
|
|
531,371
|
|
|
|
10,133
|
|
|
Varian Medical Systems, Inc.*
|
|
|
475,035
|
|
|
|
|
|
1,006,406
|
|
|
|
|
Healthcare - Services2.3%
|
|
|
11,488
|
|
|
Amedisys, Inc.*
|
|
|
595,079
|
|
|
|
7,731
|
|
|
Humana, Inc.*
|
|
|
369,464
|
|
|
|
|
|
964,543
|
|
|
|
|
Home Furnishings2.6%
|
|
|
25,142
|
|
|
Matsushita Electric Industrial Company Ltd.
ADR (Japan)
|
|
|
587,569
|
|
|
|
11,124
|
|
|
Sony Corp. ADR (Japan)
|
|
|
509,368
|
|
|
|
|
|
1,096,937
|
|
|
|
|
Insurance3.8%
|
|
|
8,460
|
|
|
AFLAC, Inc.
|
|
|
564,029
|
|
|
|
6,949
|
|
|
PartnerRe Ltd.
|
|
|
514,087
|
|
|
|
7,737
|
|
|
Transatlantic Holdings, Inc.
|
|
|
501,744
|
|
|
|
|
|
1,579,860
|
|
|
|
|
Internet4.3%
|
|
|
7,589
|
|
|
Amazon.com, Inc.*
|
|
|
596,723
|
|
|
|
53,341
|
|
|
eResearch Technology, Inc.*
|
|
|
649,693
|
|
|
|
4,300
|
|
|
Priceline.com, Inc.*
|
|
|
548,852
|
|
|
|
|
|
1,795,268
|
|
|
|
|
Machinery - Construction & Mining1.5%
|
|
|
5,118
|
|
|
Bucyrus International, Inc., Class A
|
|
|
644,510
|
|
|
|
|
Machinery - Diversified3.0%
|
|
|
30,378
|
|
|
iRobot Corp.*
|
|
|
487,263
|
|
|
|
7,338
|
|
|
Lindsay Corp.
|
|
|
764,033
|
|
|
|
|
|
1,251,296
|
|
|
See Notes to Financial Statements.
52
Schedule of Investments (Continued)
PowerShares Value Line Industry Rotation Portfolio
April 30, 2008
Number
of Shares
|
|
|
|
Value
|
|
|
|
Common Stocks (Continued)
|
|
|
|
Media1.0%
|
|
|
14,737
|
|
|
Scholastic Corp.*
|
|
$
|
414,847
|
|
|
|
|
Metal Fabricate/Hardware3.9%
|
|
|
9,225
|
|
|
Dynamic Materials Corp.
|
|
|
433,852
|
|
|
|
17,774
|
|
|
Mueller Industries, Inc.
|
|
|
575,344
|
|
|
|
6,499
|
|
|
Valmont Industries, Inc.
|
|
|
639,892
|
|
|
|
|
|
1,649,088
|
|
|
|
|
Mining2.1%
|
|
|
10,763
|
|
|
Barrick Gold Corp. (Canada)
|
|
|
415,667
|
|
|
|
13,883
|
|
|
PAN American Silver Corp. (Canada)*
|
|
|
465,081
|
|
|
|
|
|
880,748
|
|
|
|
|
Oil & Gas7.2%
|
|
|
4,746
|
|
|
Apache Corp.
|
|
|
639,191
|
|
|
|
9,621
|
|
|
Imperial Oil Ltd. (Canada)
|
|
|
563,213
|
|
|
|
6,732
|
|
|
Murphy Oil Corp.
|
|
|
608,169
|
|
|
|
8,350
|
|
|
Range Resources Corp.
|
|
|
554,273
|
|
|
|
15,972
|
|
|
Southwestern Energy Co.*
|
|
|
675,775
|
|
|
|
|
|
3,040,621
|
|
|
|
|
Oil & Gas Services2.7%
|
|
|
8,131
|
|
|
National Oilwell Varco, Inc.*
|
|
|
556,567
|
|
|
|
3,785
|
|
|
Transocean, Inc.*
|
|
|
558,136
|
|
|
|
|
|
1,114,703
|
|
|
|
|
Packaging & Containers1.2%
|
|
|
9,439
|
|
|
Owens-Illinois, Inc.*
|
|
|
520,561
|
|
|
|
|
Pharmaceuticals5.6%
|
|
|
8,523
|
|
|
Express Scripts, Inc.*
|
|
|
596,779
|
|
|
|
11,579
|
|
|
Medco Health Solutions, Inc.*
|
|
|
573,624
|
|
|
|
15,030
|
|
|
OSI Pharmaceuticals, Inc.*
|
|
|
520,790
|
|
|
|
15,541
|
|
|
Perrigo Co.
|
|
|
637,025
|
|
|
|
|
|
2,328,218
|
|
|
|
|
Semiconductors2.3%
|
|
|
19,037
|
|
|
ATMI, Inc.*
|
|
|
560,450
|
|
|
|
6,652
|
|
|
MEMC Electronic Materials, Inc.*
|
|
|
418,876
|
|
|
|
|
|
979,326
|
|
|
|
|
Software5.1%
|
|
|
14,001
|
|
|
Ansys, Inc.*
|
|
|
563,260
|
|
|
|
16,492
|
|
|
BMC Software, Inc.*
|
|
|
573,262
|
|
|
|
24,708
|
|
|
Eclipsys Corp.*
|
|
|
513,185
|
|
|
|
30,260
|
|
|
Informatica Corp.*
|
|
|
482,950
|
|
|
|
|
|
2,132,657
|
|
|
|
|
Telecommunications2.5%
|
|
|
22,464
|
|
|
Corning, Inc.
|
|
|
600,014
|
|
|
|
14,288
|
|
|
Nokia Oyj ADR (Finland)
|
|
|
429,640
|
|
|
|
|
|
1,029,654
|
|
|
Number
of Shares
|
|
|
|
Value
|
|
|
|
Common Stocks (Continued)
|
|
|
|
Transportation3.0%
|
|
|
10,320
|
|
|
CSX Corp.
|
|
$
|
649,644
|
|
|
|
16,639
|
|
|
Genesee & Wyoming, Inc., Class A*
|
|
|
593,680
|
|
|
|
|
|
1,243,324
|
|
|
|
|
|
|
Total Common Stocks
(Cost $40,134,369)
|
|
|
41,862,156
|
|
|
|
|
Money Market Fund0.1%
|
|
|
50,107
|
|
|
Goldman Sachs Financial Square Prime
Obligations Institutional Share Class
(Cost $50,107)
|
|
|
50,107
|
|
|
|
|
|
|
Total Investments
(Cost $40,184,476)100.1%
|
|
|
41,912,263
|
|
|
|
|
|
|
Liabilities in excess of other assets(0.1%)
|
|
|
(62,085
|
)
|
|
|
|
|
|
Net Assets100.0%
|
|
$
|
41,850,178
|
|
|
ADR American Depository Receipt.
* Non-income producing security
** Closed-end management investment company.
See Notes to Financial Statements.
53
Schedule of Investments
PowerShares Value Line Timeliness
TM
Select Portfolio
April 30, 2008
Number
of Shares
|
|
|
|
Value
|
|
|
|
Common Stocks100.1%
|
|
|
|
Consumer Discretionary10.6%
|
|
|
27,865
|
|
|
Deckers Outdoor Corp.*
|
|
$
|
3,847,321
|
|
|
|
101,043
|
|
|
Fossil, Inc.*
|
|
|
3,616,329
|
|
|
|
74,719
|
|
|
GameStop Corp., Class A*
|
|
|
4,112,533
|
|
|
|
160,593
|
|
|
Matsushita Electric Industrial Co.
Ltd. ADR (Japan)
|
|
|
3,753,058
|
|
|
|
27,862
|
|
|
priceline.com, Inc.*
|
|
|
3,556,306
|
|
|
|
|
|
18,885,547
|
|
|
|
|
Consumer Staples3.7%
|
|
|
44,129
|
|
|
Chattem, Inc.*
|
|
|
3,083,735
|
|
|
|
58,562
|
|
|
Coca-Cola (The) Co.
|
|
|
3,447,544
|
|
|
|
|
|
6,531,279
|
|
|
|
|
Energy10.9%
|
|
|
43,383
|
|
|
Murphy Oil Corp.
|
|
|
3,919,220
|
|
|
|
53,183
|
|
|
Range Resources Corp.
|
|
|
3,530,288
|
|
|
|
101,808
|
|
|
Southwestern Energy Co.*
|
|
|
4,307,497
|
|
|
|
24,466
|
|
|
Transocean, Inc.*
|
|
|
3,607,756
|
|
|
|
49,881
|
|
|
Weatherford International Ltd.*
|
|
|
4,023,900
|
|
|
|
|
|
19,388,661
|
|
|
|
|
Financials5.8%
|
|
|
53,738
|
|
|
AFLAC, Inc.
|
|
|
3,582,712
|
|
|
|
167,472
|
|
|
Charles Schwab (The) Corp.
|
|
|
3,617,395
|
|
|
|
84,788
|
|
|
Nasdaq OMX (The) Group*
|
|
|
3,090,523
|
|
|
|
|
|
10,290,630
|
|
|
|
|
Health Care7.6%
|
|
|
72,138
|
|
|
Amedisys, Inc.*
|
|
|
3,736,748
|
|
|
|
100,956
|
|
|
Meridian Bioscience, Inc.
|
|
|
2,718,745
|
|
|
|
97,190
|
|
|
Perrigo Co.
|
|
|
3,983,819
|
|
|
|
63,759
|
|
|
Varian Medical Systems, Inc.*
|
|
|
2,989,022
|
|
|
|
|
|
13,428,334
|
|
|
|
|
Industrials13.8%
|
|
|
51,074
|
|
|
AGCO Corp.*
|
|
|
3,071,080
|
|
|
|
87,018
|
|
|
Copart, Inc.*
|
|
|
3,556,426
|
|
|
|
38,671
|
|
|
Deere & Co.
|
|
|
3,251,071
|
|
|
|
108,326
|
|
|
Herman Miller, Inc.
|
|
|
2,527,246
|
|
|
|
40,592
|
|
|
Jacobs Engineering Group, Inc.*
|
|
|
3,504,307
|
|
|
|
49,125
|
|
|
Lindsay Corp.
|
|
|
5,114,894
|
|
|
|
65,783
|
|
|
McDermott International, Inc.*
|
|
|
3,524,653
|
|
|
|
|
|
24,549,677
|
|
|
|
|
Information Technology32.0%
|
|
|
89,903
|
|
|
Amphenol Corp., Class A
|
|
|
4,151,720
|
|
|
|
93,396
|
|
|
Ansys, Inc.*
|
|
|
3,757,321
|
|
|
|
28,743
|
|
|
Apple, Inc.*
|
|
|
4,999,844
|
|
|
|
105,408
|
|
|
BMC Software, Inc.*
|
|
|
3,663,982
|
|
|
|
7,072
|
|
|
Google, Inc., Class A*
|
|
|
4,061,379
|
|
|
|
31,262
|
|
|
International Business Machines Corp.
|
|
|
3,773,323
|
|
|
|
79,008
|
|
|
Mantech International Corp., Class A*
|
|
|
3,774,212
|
|
|
|
42,272
|
|
|
MEMC Electronic Materials, Inc. *
|
|
|
2,661,868
|
|
|
|
101,972
|
|
|
Micros Systems, Inc.*
|
|
|
3,635,302
|
|
|
Number
of Shares
|
|
|
|
Value
|
|
|
|
Common Stocks (Continued)
|
|
|
123,621
|
|
|
Microsoft Corp.
|
|
$
|
3,525,671
|
|
|
|
92,640
|
|
|
Nokia Oyj ADR (Finland)
|
|
|
2,785,685
|
|
|
|
181,423
|
|
|
Oracle Corp.*
|
|
|
3,782,670
|
|
|
|
31,658
|
|
|
Research In Motion Ltd. (Canada)*
|
|
|
3,850,563
|
|
|
|
100,718
|
|
|
Sigma Designs, Inc.*
|
|
|
1,800,838
|
|
|
|
136,032
|
|
|
SRA International, Inc., Class A*
|
|
|
3,573,561
|
|
|
|
103,726
|
|
|
Western Digital Corp.*
|
|
|
3,007,017
|
|
|
|
|
|
56,804,956
|
|
|
|
|
Materials11.8%
|
|
|
46,325
|
|
|
Agrium, Inc. (Canada)
|
|
|
3,659,675
|
|
|
|
73,397
|
|
|
E.I. du Pont de Nemours & Co.
|
|
|
3,589,847
|
|
|
|
28,229
|
|
|
Monsanto Co.
|
|
|
3,218,671
|
|
|
|
29,402
|
|
|
Mosaic (The) Co.*
|
|
|
3,602,039
|
|
|
|
90,354
|
|
|
Pan American Silver Corp. (Canada)*
|
|
|
3,026,859
|
|
|
|
20,947
|
|
|
Potash Corp. of Saskatchewan (Canada)
|
|
|
3,853,201
|
|
|
|
|
|
20,950,292
|
|
|
|
|
Telecommunications Services1.9%
|
|
|
39,834
|
|
|
Telefonica SA ADR (Spain)
|
|
|
3,440,861
|
|
|
|
|
Utilities2.0%
|
|
|
63,379
|
|
|
ITC Holdings Corp.
|
|
|
3,535,281
|
|
|
|
|
|
|
Total Investments
(Cost $174,544,342)100.1%
|
|
|
177,805,518
|
|
|
|
|
|
|
Liabilities in excess of other assets(0.1%)
|
|
|
(136,932
|
)
|
|
|
|
|
|
Net Assets100.0%
|
|
$
|
177,668,586
|
|
|
ADR American Depositary Receipt.
* Non-income producing security.
See Notes to Financial Statements.
54
Schedule of Investments
PowerShares Water Resources Portfolio
April 30, 2008
Number
of Shares
|
|
|
|
Value
|
|
|
|
Common Stocks99.7%
|
|
|
|
Biotechnology2.8%
|
|
|
882,817
|
|
|
Millipore Corp.*
|
|
$
|
61,885,472
|
|
|
|
|
Electrical Components &
Equipment3.0%
|
|
|
1,249,953
|
|
|
Emerson Electric Co.
|
|
|
65,322,544
|
|
|
|
|
Electronics13.4%
|
|
|
2,865,625
|
|
|
Agilent Technologies, Inc.*
|
|
|
86,570,532
|
|
|
|
1,303,518
|
|
|
Badger Meter, Inc.(a)
|
|
|
67,874,182
|
|
|
|
906,862
|
|
|
Itron, Inc.*
|
|
|
84,410,715
|
|
|
|
2,018,344
|
|
|
Watts Water Technologies, Inc.,
Class A(a)
|
|
|
54,232,903
|
|
|
|
|
|
293,088,332
|
|
|
|
|
Engineering & Construction15.0%
|
|
|
3,771,250
|
|
|
Aecom Technology Corp.*
|
|
|
103,558,525
|
|
|
|
2,469,676
|
|
|
Insituform Technologies, Inc.,
Class A*(a)
|
|
|
41,786,918
|
|
|
|
1,652,447
|
|
|
Layne Christensen Co.*(a)
|
|
|
70,509,913
|
|
|
|
2,800,775
|
|
|
URS Corp.*
|
|
|
112,983,264
|
|
|
|
|
|
328,838,620
|
|
|
|
|
Environmental Control9.8%
|
|
|
3,594,994
|
|
|
Calgon Carbon Corp.*(a)
|
|
|
51,228,665
|
|
|
|
2,728,689
|
|
|
Nalco Holding Co.
|
|
|
62,732,560
|
|
|
|
4,799,496
|
|
|
Tetra Tech, Inc.*(a)
|
|
|
101,413,350
|
|
|
|
|
|
215,374,575
|
|
|
|
|
Hand/Machine Tools2.9%
|
|
|
1,624,345
|
|
|
Franklin Electric Co., Inc.(a)
|
|
|
62,894,638
|
|
|
|
|
Machinery - Diversified12.6%
|
|
|
1,545,240
|
|
|
Gorman-Rupp (The) Co.(a)
|
|
|
54,129,757
|
|
|
|
1,946,394
|
|
|
IDEX Corp.
|
|
|
71,413,196
|
|
|
|
869,685
|
|
|
Lindsay Corp.(a)
|
|
|
90,551,603
|
|
|
|
990,403
|
|
|
Roper Industries, Inc.
|
|
|
61,523,834
|
|
|
|
|
|
277,618,390
|
|
|
|
|
Metal Fabricate/Hardware7.3%
|
|
|
6,925,148
|
|
|
Mueller Water Products, Inc., Class B(a)
|
|
|
54,985,675
|
|
|
|
1,068,774
|
|
|
Valmont Industries, Inc.
|
|
|
105,231,488
|
|
|
|
|
|
160,217,163
|
|
|
|
|
Miscellaneous Manufacturing21.8%
|
|
|
704,244
|
|
|
Ameron International Corp.(a)
|
|
|
69,579,307
|
|
|
|
1,112,768
|
|
|
Danaher Corp.
|
|
|
86,818,160
|
|
|
|
1,735,016
|
|
|
General Electric Co.
|
|
|
56,735,023
|
|
|
|
1,128,140
|
|
|
ITT Corp.
|
|
|
72,200,960
|
|
|
|
1,571,291
|
|
|
Pall Corp.
|
|
|
54,633,788
|
|
|
|
1,870,490
|
|
|
Pentair, Inc.
|
|
|
68,890,147
|
|
|
|
594,805
|
|
|
Siemens AG ADR (Germany)
|
|
|
70,454,652
|
|
|
|
|
|
479,312,037
|
|
|
Number
of Shares
|
|
|
|
Value
|
|
|
|
Common Stocks (Continued)
|
|
|
|
Water11.1%
|
|
|
573,634
|
|
|
American States Water Co.
|
|
$
|
20,088,663
|
|
|
|
1,144,962
|
|
|
Aqua America, Inc.
|
|
|
21,101,650
|
|
|
|
539,846
|
|
|
California Water Service Group
|
|
|
20,892,040
|
|
|
|
478,489
|
|
|
Companhia de Saneamento Basico do
Estado de Sao Paulo ADR (Brazil)
|
|
|
24,225,898
|
|
|
|
911,139
|
|
|
Consolidated Water Co., Inc.
(Cayman Islands)(a)
|
|
|
21,593,994
|
|
|
|
676,119
|
|
|
SJW Corp.
|
|
|
20,330,898
|
|
|
|
1,939,749
|
|
|
Southwest Water Co.(a)
|
|
|
21,608,804
|
|
|
|
1,301,342
|
|
|
Veolia Environnement ADR (France)
|
|
|
94,282,228
|
|
|
|
|
|
244,124,175
|
|
|
|
|
|
|
Total Common Stocks
(Cost $2,064,927,588)
|
|
|
2,188,675,946
|
|
|
|
|
Money Market Fund0.0%
|
|
|
678,721
|
|
|
Goldman Sachs Financial Square Prime
Obligations Institutional Share Class
(Cost $678,721)
|
|
|
678,721
|
|
|
|
|
|
|
Total Investments
(Cost $2,065,606,309)99.7%
|
|
|
2,189,354,667
|
|
|
|
|
|
|
Other assets less liabilities0.3%
|
|
|
7,297,507
|
|
|
|
|
|
|
Net Assets100.0%
|
|
$
|
2,196,652,174
|
|
|
ADR American Depositary Receipt.
* Non-income producing security.
(a) Affiliated Investment. See Note 4.
See Notes to Financial Statements.
55
Schedule of Investments
PowerShares WilderHill Clean Energy Portfolio
April 30, 2008
Number
of Shares
|
|
|
|
Value
|
|
|
|
Common Stocks99.8%
|
|
|
|
Auto Parts & Equipment3.2%
|
|
|
1,614,579
|
|
|
Amerigon, Inc.*(a)
|
|
$
|
23,702,020
|
|
|
|
1,298,370
|
|
|
Fuel Systems Solutions, Inc.*(a)
|
|
|
24,240,568
|
|
|
|
|
|
47,942,588
|
|
|
|
|
Chemicals7.6%
|
|
|
359,063
|
|
|
Air Products & Chemicals, Inc.
|
|
|
35,342,571
|
|
|
|
603,251
|
|
|
OM Group, Inc.*
|
|
|
33,034,025
|
|
|
|
1,636,289
|
|
|
Zoltek Cos., Inc.*(a)
|
|
|
43,639,827
|
|
|
|
|
|
112,016,423
|
|
|
|
|
Computers3.7%
|
|
|
3,162,972
|
|
|
Echelon Corp.*(a)
|
|
|
35,615,065
|
|
|
|
1,743,354
|
|
|
Maxwell Technologies, Inc.*(a)
|
|
|
18,601,587
|
|
|
|
|
|
54,216,652
|
|
|
|
|
Electric11.1%
|
|
|
1,927,458
|
|
|
Calpine Corp.*
|
|
|
37,970,923
|
|
|
|
1,139,223
|
|
|
IDACORP, Inc.
|
|
|
36,956,394
|
|
|
|
1,044,164
|
|
|
Ormat Technologies, Inc.
|
|
|
51,477,285
|
|
|
|
1,543,390
|
|
|
Portland General Electric Co.
|
|
|
37,041,360
|
|
|
|
|
|
163,445,962
|
|
|
|
|
Electrical Components &
Equipment12.4%
|
|
|
4,538,982
|
|
|
Active Power, Inc.*(a)
|
|
|
6,173,016
|
|
|
|
1,595,042
|
|
|
American Superconductor Corp.*
|
|
|
40,322,662
|
|
|
|
4,711,871
|
|
|
China BAK Battery, Inc.*(a)
|
|
|
17,528,160
|
|
|
|
1,283,282
|
|
|
Energy Conversion Devices, Inc.*
|
|
|
41,822,160
|
|
|
|
2,876,020
|
|
|
Medis Technologies Ltd.*(a)
|
|
|
24,129,808
|
|
|
|
1,358,261
|
|
|
Ultralife Batteries, Inc.*(a)
|
|
|
13,990,088
|
|
|
|
2,631,249
|
|
|
Universal Display Corp.*(a)
|
|
|
38,916,173
|
|
|
|
|
|
182,882,067
|
|
|
|
|
Electronics2.6%
|
|
|
404,710
|
|
|
Itron, Inc.*
|
|
|
37,670,407
|
|
|
|
|
Energy - Alternate Sources40.5%
|
|
|
637,281
|
|
|
Ascent Solar Technologies, Inc.*
|
|
|
10,228,360
|
|
|
|
6,348,323
|
|
|
Ballard Power Systems, Inc. (Canada)*(a)
|
|
|
26,726,440
|
|
|
|
1,632,807
|
|
|
Comverge, Inc.*(a)
|
|
|
21,422,428
|
|
|
|
5,081,391
|
|
|
Evergreen Solar, Inc.*
|
|
|
43,649,149
|
|
|
|
195,874
|
|
|
First Solar, Inc.*
|
|
|
57,193,249
|
|
|
|
4,120,503
|
|
|
FuelCell Energy, Inc.*(a)
|
|
|
36,384,041
|
|
|
|
2,752,219
|
|
|
Gushan Environmental Energy Ltd.
ADR (China)
|
|
|
34,402,738
|
|
|
|
2,436,986
|
|
|
JA Solar Holdings Co. Ltd. ADR (China)*
|
|
|
58,512,033
|
|
|
|
4,433,704
|
|
|
Nova Biosource Fuels, Inc.*
|
|
|
5,054,423
|
|
|
|
407,112
|
|
|
Ocean Power Technologies, Inc.*
|
|
|
3,961,200
|
|
|
|
3,615,474
|
|
|
Pacific Ethanol, Inc.*(a)
|
|
|
12,401,076
|
|
|
|
7,812,425
|
|
|
Plug Power, Inc.*(a)
|
|
|
25,234,133
|
|
|
|
599,305
|
|
|
SunPower Corp., Class A*
|
|
|
52,301,347
|
|
|
Number
of Shares
|
|
|
|
Value
|
|
|
|
Common Stocks (Continued)
|
|
|
1,165,729
|
|
|
Suntech Power Holdings Co. Ltd.
ADR (China)*
|
|
$
|
52,143,058
|
|
|
|
1,400,946
|
|
|
Trina Solar Ltd. ADR (Cayman Islands)*
|
|
|
59,091,902
|
|
|
|
4,310,807
|
|
|
VeraSun Energy Corp.*
|
|
|
26,899,436
|
|
|
|
5,616,251
|
|
|
Verenium Corp.*(a)
|
|
|
16,848,753
|
|
|
|
2,488,236
|
|
|
Yingli Green Energy Holding Co. Ltd.
ADR (China)*
|
|
|
54,815,839
|
|
|
|
|
|
597,269,605
|
|
|
|
|
Food2.4%
|
|
|
2,728,711
|
|
|
Cosan Ltd., Class A (Brazil)*
|
|
|
36,182,708
|
|
|
|
|
Machinery - Diversified1.2%
|
|
|
1,588,661
|
|
|
Raser Technologies, Inc.*
|
|
|
17,252,858
|
|
|
|
|
Semiconductors15.1%
|
|
|
1,888,834
|
|
|
Applied Materials, Inc.
|
|
|
35,245,642
|
|
|
|
1,252,581
|
|
|
Cree, Inc.*
|
|
|
32,567,106
|
|
|
|
4,643,967
|
|
|
Emcore Corp.*(a)
|
|
|
28,699,716
|
|
|
|
1,716,859
|
|
|
International Rectifier Corp.*
|
|
|
39,075,711
|
|
|
|
532,511
|
|
|
MEMC Electronic Materials, Inc.*
|
|
|
33,532,217
|
|
|
|
1,984,093
|
|
|
Renesola Ltd. ADR (British Virgin
Islands)*
|
|
|
33,233,558
|
|
|
|
763,166
|
|
|
Rubicon Technology, Inc.*
|
|
|
16,835,442
|
|
|
|
238,228
|
|
|
Spire Corp.*
|
|
|
3,180,344
|
|
|
|
|
|
222,369,736
|
|
|
|
|
|
|
Total Investments
(Cost $1,656,552,305)99.8%
|
|
|
1,471,249,006
|
|
|
|
|
|
|
Other assets less liabilities0.2%
|
|
|
2,643,816
|
|
|
|
|
|
|
Net Assets100.0%
|
|
$
|
1,473,892,822
|
|
|
ADR American Depositary Receipt.
* Non-income producing security.
(a) Affiliated Investment. See Note 4.
The fund has holdings greater than 10% of net assets in the following country:
See Notes to Financial Statements.
56
Schedule of Investments
PowerShares WilderHill Progressive Energy Portfolio
April 30, 2008
Number
of Shares
|
|
|
|
Value
|
|
|
|
Common Stocks100.0%
|
|
|
|
Aerospace/Defense2.4%
|
|
|
20,798
|
|
|
United Technologies Corp.
|
|
$
|
1,507,231
|
|
|
|
|
Agriculture3.2%
|
|
|
43,632
|
|
|
Andersons (The), Inc.
|
|
|
1,983,074
|
|
|
|
|
Auto Parts & Equipment7.6%
|
|
|
116,951
|
|
|
Exide Technologies*
|
|
|
1,706,315
|
|
|
|
41,866
|
|
|
Johnson Controls, Inc.
|
|
|
1,476,195
|
|
|
|
59,248
|
|
|
Tenneco, Inc.*
|
|
|
1,515,564
|
|
|
|
|
|
4,698,074
|
|
|
|
|
Chemicals8.5%
|
|
|
69,137
|
|
|
Methanex Corp. (Canada)
|
|
|
1,621,954
|
|
|
|
18,604
|
|
|
Praxair, Inc.
|
|
|
1,698,731
|
|
|
|
68,456
|
|
|
Sociedad Quimica y Minera de Chile S.A.
ADR (Chile)
|
|
|
1,951,681
|
|
|
|
|
|
5,272,366
|
|
|
|
|
Electric10.5%
|
|
|
19,631
|
|
|
A-Power Energy Generation Systems Ltd.*
|
|
|
309,581
|
|
|
|
27,686
|
|
|
CPFL Energia S.A. ADR (Brazil)
|
|
|
2,051,533
|
|
|
|
25,876
|
|
|
EnerNOC, Inc.*
|
|
|
399,008
|
|
|
|
103,286
|
|
|
Enersis S.A. ADR (Chile)
|
|
|
1,950,040
|
|
|
|
27,712
|
|
|
FPL Group, Inc.
|
|
|
1,837,028
|
|
|
|
|
|
6,547,190
|
|
|
|
|
Electrical Components &
Equipment8.0%
|
|
|
17,147
|
|
|
Energizer Holdings, Inc.*
|
|
|
1,355,642
|
|
|
|
65,247
|
|
|
EnerSys*
|
|
|
1,526,780
|
|
|
|
90,483
|
|
|
GrafTech International Ltd.*
|
|
|
1,777,990
|
|
|
|
24,029
|
|
|
PowerSecure International, Inc.*
|
|
|
292,193
|
|
|
|
|
|
4,952,605
|
|
|
|
|
Electronics6.2%
|
|
|
96,289
|
|
|
AU Optronics Corp. ADR (Taiwan,
Republic of China)
|
|
|
1,879,561
|
|
|
|
37,206
|
|
|
Badger Meter, Inc.
|
|
|
1,937,317
|
|
|
|
|
|
3,816,878
|
|
|
|
|
Energy-Alternate Sources8.4%
|
|
|
55,046
|
|
|
Aventine Renewable Energy Holdings, Inc.*
|
|
|
241,652
|
|
|
|
146,235
|
|
|
Clean Energy Fuels Corp.*
|
|
|
1,903,980
|
|
|
|
52,378
|
|
|
Covanta Holding Corp.*
|
|
|
1,394,826
|
|
|
|
194,325
|
|
|
Evergreen Energy, Inc.*
|
|
|
285,658
|
|
|
|
120,994
|
|
|
Headwaters, Inc.*
|
|
|
1,382,961
|
|
|
|
|
|
5,209,077
|
|
|
|
|
Environmental Control6.6%
|
|
|
72,335
|
|
|
EnergySolutions, Inc.
|
|
|
1,580,520
|
|
|
|
82,953
|
|
|
Fuel Tech, Inc.*
|
|
|
2,131,892
|
|
|
|
325,332
|
|
|
Rentech, Inc.*
|
|
|
409,918
|
|
|
|
|
|
4,122,330
|
|
|
Number
of Shares
|
|
|
|
Value
|
|
|
|
Common Stocks (Continued)
|
|
|
|
Hand/Machine Tools3.0%
|
|
|
56,931
|
|
|
Baldor Electric Co.
|
|
$
|
1,844,564
|
|
|
|
|
Investment Companies0.5%
|
|
|
41,661
|
|
|
Harris & Harris Group, Inc.*
|
|
|
331,205
|
|
|
|
|
Mining7.3%
|
|
|
56,359
|
|
|
Cameco Corp. (Canada)
|
|
|
1,972,001
|
|
|
|
43,541
|
|
|
Uranium Resources, Inc.*
|
|
|
259,504
|
|
|
|
500,078
|
|
|
USEC, Inc.*
|
|
|
2,320,363
|
|
|
|
|
|
4,551,868
|
|
|
|
|
Miscellaneous Manufacturing7.6%
|
|
|
17,612
|
|
|
Eaton Corp.
|
|
|
1,547,038
|
|
|
|
70,586
|
|
|
Hexcel Corp.*
|
|
|
1,579,715
|
|
|
|
13,358
|
|
|
Siemens AG ADR (Germany)
|
|
|
1,582,255
|
|
|
|
|
|
4,709,008
|
|
|
|
|
Oil & Gas16.8%
|
|
|
40,758
|
|
|
Chesapeake Energy Corp.
|
|
|
2,107,189
|
|
|
|
33,765
|
|
|
Questar Corp.
|
|
|
2,094,443
|
|
|
|
30,016
|
|
|
Range Resources Corp.
|
|
|
1,992,462
|
|
|
|
32,039
|
|
|
Sasol Ltd. ADR (South Africa)
|
|
|
1,815,009
|
|
|
|
57,587
|
|
|
Southwestern Energy Co.*
|
|
|
2,436,506
|
|
|
|
|
|
10,445,609
|
|
|
|
|
Semiconductors0.4%
|
|
|
33,358
|
|
|
O2Micro International Ltd. ADR
(Cayman Islands)*
|
|
|
253,187
|
|
|
|
|
Telecommunications3.0%
|
|
|
68,684
|
|
|
Corning, Inc.
|
|
|
1,834,550
|
|
|
|
|
|
|
Total Common Stocks
(Cost $60,096,938)
|
|
|
62,078,816
|
|
|
|
|
Money Market Fund0.1%
|
|
|
90,692
|
|
|
Goldman Sachs Financial Square Prime
Obligations Institutional Share Class
(Cost $90,692)
|
|
|
90,692
|
|
|
|
|
|
|
Total Investments
(Cost $60,187,630)100.1%
|
|
|
62,169,508
|
|
|
|
|
|
|
Liabilities in excess of other assets(0.1%)
|
|
|
(72,070
|
)
|
|
|
|
|
|
Net Assets100.0%
|
|
$
|
62,097,438
|
|
|
ADR American Depositary Receipt.
* Non-income producing security.
See Notes to Financial Statements.
57
Statements of Assets and Liabilities
April 30, 2008
|
|
PowerShares
Aerospace &
Defense
Portfolio
|
|
PowerShares
Cleantech
TM
Portfolio
|
|
PowerShares
DWA
Technical Leaders
Portfolio
|
|
PowerShares
Golden Dragon
Halter USX China
Portfolio
|
|
PowerShares
Listed
Private Equity
Portfolio
|
|
PowerShares
Lux Nanotech
Portfolio
|
|
AS
SETS:
|
|
Unaffiliated investments at value
|
|
$
|
257,190,524
|
|
|
$
|
114,369,216
|
|
|
$
|
363,586,621
|
|
|
$
|
526,791,170
|
|
|
$
|
102,740,258
|
|
|
$
|
67,011,176
|
|
|
Affiliated investments at value
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
17,021,735
|
|
|
Cash
|
|
|
412,866
|
|
|
|
64,679
|
|
|
|
144,034
|
|
|
|
54,903
|
|
|
|
375,654
|
|
|
|
460,964
|
|
|
Receivables:
|
|
Dividends
|
|
|
63,887
|
|
|
|
10,971
|
|
|
|
98,166
|
|
|
|
1,945,039
|
|
|
|
23,097
|
|
|
|
13,334
|
|
|
Shares sold
|
|
|
|
|
|
|
|
|
|
|
10,545,416
|
|
|
|
2,850,777
|
|
|
|
2,041,332
|
|
|
|
|
|
|
Expense waivers due from Adviser
|
|
|
8,120
|
|
|
|
21
|
|
|
|
|
|
|
|
26,408
|
|
|
|
|
|
|
|
7,241
|
|
|
Investments sold
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
5,753,048
|
|
|
|
323,822
|
|
|
|
|
|
|
Total Assets
|
|
|
257,675,397
|
|
|
|
114,444,887
|
|
|
|
374,374,237
|
|
|
|
537,421,345
|
|
|
|
105,504,163
|
|
|
|
84,514,450
|
|
|
LIABILITIES:
|
|
Due to custodian
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Payables:
|
|
Investments purchased
|
|
|
|
|
|
|
|
|
|
|
10,549,749
|
|
|
|
2,850,888
|
|
|
|
2,015,447
|
|
|
|
|
|
|
Shares repurchased
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
5,754,200
|
|
|
|
|
|
|
|
|
|
|
Expense recapture due to Adviser
|
|
|
|
|
|
|
|
|
|
|
61,429
|
|
|
|
|
|
|
|
13,878
|
|
|
|
|
|
|
Open written options, at value (premium
received $144,450)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accrued advisory fees
|
|
|
102,262
|
|
|
|
45,649
|
|
|
|
138,429
|
|
|
|
196,887
|
|
|
|
40,372
|
|
|
|
35,439
|
|
|
Accrued expenses
|
|
|
77,670
|
|
|
|
62,931
|
|
|
|
110,826
|
|
|
|
136,369
|
|
|
|
55,283
|
|
|
|
50,796
|
|
|
Total Liabilities
|
|
|
179,932
|
|
|
|
108,580
|
|
|
|
10,860,433
|
|
|
|
8,938,344
|
|
|
|
2,124,980
|
|
|
|
86,235
|
|
|
NET ASSETS
|
|
$
|
257,495,465
|
|
|
$
|
114,336,307
|
|
|
$
|
363,513,804
|
|
|
$
|
528,483,001
|
|
|
$
|
103,379,183
|
|
|
$
|
84,428,215
|
|
|
NET ASSETS CONSIST OF:
|
|
Shares of beneficial interest
|
|
$
|
283,744,451
|
|
|
$
|
118,767,623
|
|
|
$
|
378,936,539
|
|
|
$
|
624,025,253
|
|
|
$
|
148,479,279
|
|
|
$
|
127,448,108
|
|
|
Undistributed net investment income (loss)
|
|
|
215,472
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,142,260
|
|
|
|
|
|
|
Accumulated net realized gain (loss) on investments
|
|
|
(9,707,030
|
)
|
|
|
(5,860,791
|
)
|
|
|
(31,367,633
|
)
|
|
|
(27,397,621
|
)
|
|
|
(10,563,018
|
)
|
|
|
(18,224,782
|
)
|
|
Net unrealized appreciation (depreciation) on investments
|
|
|
(16,757,428
|
)
|
|
|
1,429,475
|
|
|
|
15,944,898
|
|
|
|
(68,144,631
|
)
|
|
|
(35,679,338
|
)
|
|
|
(24,795,111
|
)
|
|
Net Assets
|
|
$
|
257,495,465
|
|
|
$
|
114,336,307
|
|
|
$
|
363,513,804
|
|
|
$
|
528,483,001
|
|
|
$
|
103,379,183
|
|
|
$
|
84,428,215
|
|
|
Shares outstanding (unlimited amount authorized,
$
0.01
par value)
|
|
|
12,300,000
|
|
|
|
3,400,000
|
|
|
|
14,000,000
|
|
|
|
18,300,000
|
|
|
|
5,100,000
|
|
|
|
6,000,000
|
|
|
Net asset value
|
|
$
|
20.93
|
|
|
$
|
33.63
|
|
|
$
|
25.97
|
|
|
$
|
28.88
|
|
|
$
|
20.27
|
|
|
$
|
14.07
|
|
|
Unaffiliated investments at cost
|
|
$
|
273,947,952
|
|
|
$
|
112,939,741
|
|
|
$
|
347,641,723
|
|
|
$
|
594,935,801
|
|
|
$
|
138,419,596
|
|
|
$
|
88,303,766
|
|
|
Affiliated investments at cost
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
20,524,256
|
|
|
See Notes to Financial Statements.
58
|
|
PowerShares
S&P 500
BuyWrite
Portfolio
|
|
PowerShares
Value Line
Industry Rotation
Portfolio
|
|
PowerShares
Value Line
Timeliness
TM
Select
Portfolio
|
|
PowerShares
Water
Resources
Portfolio
|
|
PowerShares
WilderHill
Clean Energy
Portfolio
|
|
PowerShares
WilderHill
Progressive
Energy
Portfolio
|
|
AS
SETS:
|
|
Unaffiliated investments at value
|
|
$
|
7,633,992
|
|
|
$
|
41,912,263
|
|
|
$
|
177,805,518
|
|
|
$
|
1,426,964,958
|
|
|
$
|
1,056,996,107
|
|
|
$
|
62,169,508
|
|
|
Affiliated investments at value
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
762,389,709
|
|
|
|
414,252,899
|
|
|
|
|
|
|
Cash
|
|
|
6,928
|
|
|
|
|
|
|
|
|
|
|
|
5,082,046
|
|
|
|
1,632,155
|
|
|
|
|
|
|
Receivables:
|
|
Dividends
|
|
|
4,967
|
|
|
|
12,520
|
|
|
|
55,286
|
|
|
|
1,673,966
|
|
|
|
473,356
|
|
|
|
87,055
|
|
|
Shares sold
|
|
|
2,502,380
|
|
|
|
|
|
|
|
|
|
|
|
14,551,366
|
|
|
|
10,547,681
|
|
|
|
|
|
|
Expense waivers due from Adviser
|
|
|
|
|
|
|
|
|
|
|
11,596
|
|
|
|
75,183
|
|
|
|
90,756
|
|
|
|
|
|
|
Investments sold
|
|
|
|
|
|
|
|
|
|
|
3,377,193
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Assets
|
|
|
10,148,267
|
|
|
|
41,924,783
|
|
|
|
181,249,593
|
|
|
|
2,210,737,228
|
|
|
|
1,483,992,954
|
|
|
|
62,256,563
|
|
|
LIABILITIES:
|
|
Due to custodian
|
|
|
|
|
|
|
12,736
|
|
|
|
50,739
|
|
|
|
|
|
|
|
|
|
|
|
75,025
|
|
|
Payables:
|
|
Investments purchased
|
|
|
2,542,598
|
|
|
|
|
|
|
|
|
|
|
|
12,751,648
|
|
|
|
9,105,295
|
|
|
|
|
|
|
Shares repurchased
|
|
|
|
|
|
|
|
|
|
|
3,376,604
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Expense recapture due to Adviser
|
|
|
|
|
|
|
1,872
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
5,162
|
|
|
Open written options, at value (premium
received $144,450)
|
|
|
101,871
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accrued advisory fees
|
|
|
3,055
|
|
|
|
16,911
|
|
|
|
74,380
|
|
|
|
867,308
|
|
|
|
606,500
|
|
|
|
24,502
|
|
|
Accrued expenses
|
|
|
|
|
|
|
43,086
|
|
|
|
79,284
|
|
|
|
466,098
|
|
|
|
388,337
|
|
|
|
54,436
|
|
|
Total Liabilities
|
|
|
2,647,524
|
|
|
|
74,605
|
|
|
|
3,581,007
|
|
|
|
14,085,054
|
|
|
|
10,100,132
|
|
|
|
159,125
|
|
|
NET ASSETS
|
|
$
|
7,500,743
|
|
|
$
|
41,850,178
|
|
|
$
|
177,668,586
|
|
|
$
|
2,196,652,174
|
|
|
$
|
1,473,892,822
|
|
|
$
|
62,097,438
|
|
|
NET ASSETS CONSIST OF:
|
|
Shares of beneficial interest
|
|
$
|
7,419,561
|
|
|
$
|
47,203,780
|
|
|
$
|
244,397,040
|
|
|
$
|
2,154,848,340
|
|
|
$
|
1,860,605,397
|
|
|
$
|
65,085,798
|
|
|
Undistributed net investment income (loss)
|
|
|
3,126
|
|
|
|
|
|
|
|
|
|
|
|
229,824
|
|
|
|
|
|
|
|
|
|
|
Accumulated net realized gain (loss) on investments
|
|
|
20,654
|
|
|
|
(7,081,389
|
)
|
|
|
(69,989,630
|
)
|
|
|
(82,174,348
|
)
|
|
|
(201,409,276
|
)
|
|
|
(4,970,238
|
)
|
|
Net unrealized appreciation (depreciation) on investments
|
|
|
57,402
|
|
|
|
1,727,787
|
|
|
|
3,261,176
|
|
|
|
123,748,358
|
|
|
|
(185,303,299
|
)
|
|
|
1,981,878
|
|
|
Net Assets
|
|
$
|
7,500,743
|
|
|
$
|
41,850,178
|
|
|
$
|
177,668,586
|
|
|
$
|
2,196,652,174
|
|
|
$
|
1,473,892,822
|
|
|
$
|
62,097,438
|
|
|
Shares outstanding (unlimited amount authorized,
$
0.01
par value)
|
|
|
300,000
|
|
|
|
1,500,000
|
|
|
|
10,600,000
|
|
|
|
106,300,000
|
|
|
|
70,400,000
|
|
|
|
2,200,000
|
|
|
Net asset value
|
|
$
|
25.00
|
|
|
$
|
27.90
|
|
|
$
|
16.76
|
|
|
$
|
20.66
|
|
|
$
|
20.94
|
|
|
$
|
28.23
|
|
|
Unaffiliated investments at cost
|
|
$
|
7,619,169
|
|
|
$
|
40,184,476
|
|
|
$
|
174,544,342
|
|
|
$
|
1,394,286,337
|
|
|
$
|
1,047,393,824
|
|
|
$
|
60,187,630
|
|
|
Affiliated investments at cost
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
671,319,972
|
|
|
$
|
609,158,481
|
|
|
|
|
|
|
59
Statements of Operations
|
|
PowerShares
Aerospace &
Defense
Portfolio
|
|
PowerShares
Cleantech
TM
Portfolio
|
|
PowerShares
DWA
Technical Leaders
Portfolio
|
|
PowerShares
Golden Dragon
Halter USX China
Portfolio
|
|
PowerShares
Listed
Private Equity
Portfolio
|
|
PowerShares
Lux Nanotech
Portfolio
|
|
|
|
Year Ended
April 30, 2008
|
|
Year Ended
April 30, 2008
|
|
Year Ended
April 30, 2008
|
|
Year Ended
April 30, 2008
|
|
Year Ended
April 30, 2008
|
|
Year Ended
April 30, 2008
|
|
INVESTMENT INCOME:
|
|
Unaffiliated dividend income
|
|
$
|
2,818,995
|
|
|
$
|
296,231
|
|
|
$
|
1,376,077
|
|
|
$
|
6,740,425
|
|
|
$
|
7,757,917
|
|
|
$
|
670,904
|
|
|
Affiliated dividend income
|
|
|
3,210
|
|
|
|
19
|
|
|
|
202
|
|
|
|
3,211
|
|
|
|
23,157
|
|
|
|
|
|
|
Foreign withholding taxes
|
|
|
(1,311
|
)
|
|
|
(14,940
|
)
|
|
|
|
|
|
|
(7,889
|
)
|
|
|
|
|
|
|
(473
|
)
|
|
Total Income
|
|
|
2,820,894
|
|
|
|
281,310
|
|
|
|
1,376,279
|
|
|
|
6,735,747
|
|
|
|
7,781,074
|
|
|
|
670,431
|
|
|
EXPENSES:
|
|
Advisory fees
|
|
|
1,520,817
|
|
|
|
365,806
|
|
|
|
1,080,236
|
|
|
|
3,029,609
|
|
|
|
676,065
|
|
|
|
629,641
|
|
|
Sub-licensing
|
|
|
182,497
|
|
|
|
54,871
|
|
|
|
216,047
|
|
|
|
557,983
|
|
|
|
135,213
|
|
|
|
125,928
|
|
|
Administration & Accounting fees
|
|
|
91,203
|
|
|
|
78,681
|
|
|
|
84,570
|
|
|
|
170,963
|
|
|
|
76,692
|
|
|
|
80,738
|
|
|
Printing
|
|
|
52,133
|
|
|
|
12,798
|
|
|
|
5,711
|
|
|
|
94,895
|
|
|
|
18,500
|
|
|
|
17,405
|
|
|
Custodian & transfer agent fees
|
|
|
19,218
|
|
|
|
7,182
|
|
|
|
13,750
|
|
|
|
34,367
|
|
|
|
9,532
|
|
|
|
9,449
|
|
|
Audit
|
|
|
15,848
|
|
|
|
15,848
|
|
|
|
16,006
|
|
|
|
15,848
|
|
|
|
15,848
|
|
|
|
15,848
|
|
|
Trustees
|
|
|
12,864
|
|
|
|
6,176
|
|
|
|
9,498
|
|
|
|
21,897
|
|
|
|
8,402
|
|
|
|
7,874
|
|
|
Legal
|
|
|
11,672
|
|
|
|
|
|
|
|
12,379
|
|
|
|
19,568
|
|
|
|
|
|
|
|
5,136
|
|
|
Listing fee and expenses
|
|
|
8,743
|
|
|
|
45
|
|
|
|
2,500
|
|
|
|
8,470
|
|
|
|
243
|
|
|
|
8,652
|
|
|
Registration & filings
|
|
|
632
|
|
|
|
1,805
|
|
|
|
7,287
|
|
|
|
|
|
|
|
494
|
|
|
|
|
|
|
Offering costs
|
|
|
|
|
|
|
13,432
|
|
|
|
17,758
|
|
|
|
|
|
|
|
18,126
|
|
|
|
|
|
|
Other expenses
|
|
|
23,080
|
|
|
|
7,702
|
|
|
|
11,409
|
|
|
|
35,536
|
|
|
|
13,604
|
|
|
|
20,528
|
|
|
Total Expenses
|
|
|
1,938,707
|
|
|
|
564,346
|
|
|
|
1,477,151
|
|
|
|
3,989,136
|
|
|
|
972,719
|
|
|
|
921,199
|
|
|
(Waivers) and/or Recapture
|
|
|
68,771
|
|
|
|
(57,076
|
)
|
|
|
52,829
|
|
|
|
204,381
|
|
|
|
(8,102
|
)
|
|
|
(39,701
|
)
|
|
Net Expenses
|
|
|
2,007,478
|
|
|
|
507,270
|
|
|
|
1,529,980
|
|
|
|
4,193,517
|
|
|
|
964,617
|
|
|
|
881,498
|
|
|
Net Investment Income (Loss)
|
|
|
813,416
|
|
|
|
(225,960
|
)
|
|
|
(153,701
|
)
|
|
|
2,542,230
|
|
|
|
6,816,457
|
|
|
|
(211,067
|
)
|
|
REALIZED AND UNREALIZED GAIN (LOSS)
ON INVESTMENTS:
|
|
Net realized gain (loss) from:
|
|
Investments
|
|
|
(6,746,467
|
)
|
|
|
(4,816,213
|
)
|
|
|
(31,306,112
|
)
|
|
|
(21,250,942
|
)
|
|
|
(10,463,110
|
)
|
|
|
(11,561,780
|
)
|
|
Written options
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
In-kind redemptions
|
|
|
38,035,868
|
|
|
|
12,021,651
|
|
|
|
11,599,036
|
|
|
|
246,564,038
|
|
|
|
4,669,362
|
|
|
|
6,523,699
|
|
|
Net realized gain (loss)
|
|
|
31,289,401
|
|
|
|
7,205,438
|
|
|
|
(19,707,076
|
)
|
|
|
225,313,096
|
|
|
|
(5,793,748
|
)
|
|
|
(5,038,081
|
)
|
|
Net change in unrealized appreciation (depreciation)
Investments
|
|
|
(37,436,934
|
)
|
|
|
423,812
|
|
|
|
13,955,713
|
|
|
|
(101,212,578
|
)
|
|
|
(40,433,048
|
)
|
|
|
(20,211,100
|
)
|
|
Written options
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net change in unrealized appreciation (depreciation)
|
|
|
(37,436,934
|
)
|
|
|
423,812
|
|
|
|
13,955,713
|
|
|
|
(101,212,578
|
)
|
|
|
(40,433,048
|
)
|
|
|
(20,211,100
|
)
|
|
Net realized and unrealized gain (loss)
|
|
|
(6,147,533
|
)
|
|
|
7,629,250
|
|
|
|
(5,751,363
|
)
|
|
|
124,100,518
|
|
|
|
(46,226,796
|
)
|
|
|
(25,249,181
|
)
|
|
Net increase (decrease) in net assets resulting from operations
|
|
$
|
(5,334,117
|
)
|
|
$
|
7,403,290
|
|
|
$
|
(5,905,064
|
)
|
|
$
|
126,642,748
|
|
|
$
|
(39,410,339
|
)
|
|
$
|
(25,460,248
|
)
|
|
* Commencement of Investment Operations.
See Notes to Financial Statements.
60
|
|
PowerShares
S&P 500
BuyWrite
Portfolio
|
|
PowerShares
Value Line
Industry Rotation
Portfolio
|
|
PowerShares
Value Line
Timeliness
TM
Select
Portfolio
|
|
PowerShares
Water
Resources
Portfolio
|
|
PowerShares
WilderHill
Clean Energy
Portfolio
|
|
PowerShares
WilderHill
Progressive
Energy
Portfolio
|
|
|
|
For the Period
December 19,
2007* Through
April 30, 2008
|
|
Year Ended
April 30, 2008
|
|
Year Ended
April 30, 2008
|
|
Year Ended
April 30, 2008
|
|
Year Ended
April 30, 2008
|
|
Year Ended
April 30, 2008
|
|
INVESTMENT INCOME:
|
|
Unaffiliated dividend income
|
|
$
|
22,744
|
|
|
$
|
297,012
|
|
|
$
|
1,217,901
|
|
|
$
|
16,657,954
|
|
|
$
|
4,395,702
|
|
|
$
|
513,967
|
|
|
Affiliated dividend income
|
|
|
2
|
|
|
|
2,173
|
|
|
|
|
|
|
|
4,376,434
|
|
|
|
|
|
|
|
1,757
|
|
|
Foreign withholding taxes
|
|
|
|
|
|
|
(2,298
|
)
|
|
|
(14,935
|
)
|
|
|
(832,462
|
)
|
|
|
(8,456
|
)
|
|
|
(12,816
|
)
|
|
Total Income
|
|
|
22,746
|
|
|
|
296,887
|
|
|
|
1,202,966
|
|
|
|
20,201,926
|
|
|
|
4,387,246
|
|
|
|
502,908
|
|
|
EXPENSES:
|
|
Advisory fees
|
|
|
9,120
|
|
|
|
196,061
|
|
|
|
1,031,063
|
|
|
|
9,835,346
|
|
|
|
6,231,276
|
|
|
|
243,806
|
|
|
Sub-licensing
|
|
|
|
|
|
|
39,212
|
|
|
|
206,213
|
|
|
|
1,475,303
|
|
|
|
1,252,086
|
|
|
|
48,761
|
|
|
Administration & Accounting fees
|
|
|
|
|
|
|
80,541
|
|
|
|
80,738
|
|
|
|
561,440
|
|
|
|
354,333
|
|
|
|
78,771
|
|
|
Printing
|
|
|
|
|
|
|
6,674
|
|
|
|
17,593
|
|
|
|
261,493
|
|
|
|
251,199
|
|
|
|
4,908
|
|
|
Custodian & transfer agent fees
|
|
|
|
|
|
|
6,415
|
|
|
|
13,933
|
|
|
|
104,262
|
|
|
|
67,493
|
|
|
|
6,321
|
|
|
Audit
|
|
|
|
|
|
|
16,006
|
|
|
|
15,848
|
|
|
|
15,848
|
|
|
|
15,848
|
|
|
|
15,848
|
|
|
Trustees
|
|
|
|
|
|
|
5,455
|
|
|
|
10,479
|
|
|
|
55,020
|
|
|
|
36,361
|
|
|
|
5,693
|
|
|
Legal
|
|
|
|
|
|
|
|
|
|
|
8,002
|
|
|
|
71,333
|
|
|
|
39,952
|
|
|
|
|
|
|
Listing fee and expenses
|
|
|
|
|
|
|
1,907
|
|
|
|
28,247
|
|
|
|
10,605
|
|
|
|
11,628
|
|
|
|
46
|
|
|
Registration & filings
|
|
|
|
|
|
|
455
|
|
|
|
|
|
|
|
2,115
|
|
|
|
12,483
|
|
|
|
641
|
|
|
Offering costs
|
|
|
|
|
|
|
11,145
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
14,563
|
|
|
Other expenses
|
|
|
|
|
|
|
8,253
|
|
|
|
26,384
|
|
|
|
93,203
|
|
|
|
63,229
|
|
|
|
7,758
|
|
|
Total Expenses
|
|
|
9,120
|
|
|
|
372,124
|
|
|
|
1,438,500
|
|
|
|
12,485,968
|
|
|
|
8,335,888
|
|
|
|
427,116
|
|
|
(Waivers) and/or Recapture
|
|
|
|
|
|
|
(86,494
|
)
|
|
|
4,989
|
|
|
|
139,671
|
|
|
|
(7,102
|
)
|
|
|
(71,221
|
)
|
|
Net Expenses
|
|
|
9,120
|
|
|
|
285,630
|
|
|
|
1,443,489
|
|
|
|
12,625,639
|
|
|
|
8,328,786
|
|
|
|
355,895
|
|
|
Net Investment Income (Loss)
|
|
|
13,626
|
|
|
|
11,257
|
|
|
|
(240,523
|
)
|
|
|
7,576,287
|
|
|
|
(3,941,540
|
)
|
|
|
147,013
|
|
|
REALIZED AND UNREALIZED GAIN (LOSS)
ON INVESTMENTS:
|
|
Net realized gain (loss) from:
|
|
Investments
|
|
|
(10,604
|
)
|
|
|
(6,701,862
|
)
|
|
|
(34,836,406
|
)
|
|
|
(50,593,133
|
)
|
|
|
(73,344,816
|
)
|
|
|
(4,847,974
|
)
|
|
Written options
|
|
|
31,258
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
In-kind redemptions
|
|
|
|
|
|
|
6,145,696
|
|
|
|
44,586,258
|
|
|
|
163,299,854
|
|
|
|
294,335,763
|
|
|
|
2,781,985
|
|
|
Net realized gain (loss)
|
|
|
20,654
|
|
|
|
(556,166
|
)
|
|
|
9,749,852
|
|
|
|
112,706,721
|
|
|
|
220,990,947
|
|
|
|
(2,065,989
|
)
|
|
Net change in unrealized appreciation (depreciation)
Investments
|
|
|
14,823
|
|
|
|
(11,149
|
)
|
|
|
(20,623,471
|
)
|
|
|
(5,048
|
)
|
|
|
(213,773,816
|
)
|
|
|
144,615
|
|
|
Written options
|
|
|
42,579
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net change in unrealized appreciation (depreciation)
|
|
|
57,402
|
|
|
|
(11,149
|
)
|
|
|
(20,623,471
|
)
|
|
|
(5,048
|
)
|
|
|
(213,773,816
|
)
|
|
|
144,615
|
|
|
Net realized and unrealized gain (loss)
|
|
|
78,056
|
|
|
|
(567,315
|
)
|
|
|
(10,873,619
|
)
|
|
|
112,701,673
|
|
|
|
7,217,131
|
|
|
|
(1,921,374
|
)
|
|
Net increase (decrease) in net assets resulting from operations
|
|
$
|
91,682
|
|
|
$
|
(556,058
|
)
|
|
$
|
(11,114,142
|
)
|
|
$
|
120,277,960
|
|
|
$
|
3,275,591
|
|
|
$
|
(1,774,361
|
)
|
|
61
Statements of Changes in Net Assets
|
|
PowerShares
Aerospace &
Defense
Portfolio
|
|
PowerShares
Cleantech
TM
Portfolio
|
|
PowerShares
DWA
Technical Leaders
Portfolio
|
|
|
|
Year Ended
April 30, 2008
|
|
Year Ended
April 30, 2007
|
|
Year Ended
April 30, 2008
|
|
For the Period
October 24,
2006* Through
April 30, 2007
|
|
Year Ended
April 30, 2008
|
|
For the Period
March 1,
2007* Through
April 30, 2007
|
|
OPERATIONS:
|
|
Net investment income (loss)
|
|
$
|
813,416
|
|
|
$
|
329,993
|
|
|
$
|
(225,960
|
)
|
|
$
|
(39,832
|
)
|
|
$
|
(153,701
|
)
|
|
$
|
105,514
|
|
|
Net realized gain (loss) on investments
|
|
|
31,289,401
|
|
|
|
8,592,051
|
|
|
|
7,205,438
|
|
|
|
1,087,661
|
|
|
|
(19,707,076
|
)
|
|
|
66,278
|
|
|
Net change in unrealized appreciation (depreciation) of
investments
|
|
|
(37,436,934
|
)
|
|
|
12,375,809
|
|
|
|
423,812
|
|
|
|
1,005,663
|
|
|
|
13,955,713
|
|
|
|
1,989,185
|
|
|
Net increase (decrease) in net assets resulting from operations
|
|
|
(5,334,117
|
)
|
|
|
21,297,853
|
|
|
|
7,403,290
|
|
|
|
2,053,492
|
|
|
|
(5,905,064
|
)
|
|
|
2,160,977
|
|
|
Undistributed net investment income (loss) included in the
price of units issued and redeemed
|
|
|
15,071
|
|
|
|
13,857
|
|
|
|
(192,676
|
)
|
|
|
6,280
|
|
|
|
610,622
|
|
|
|
177,364
|
|
|
DISTRIBUTIONS TO SHAREHOLDERS FROM:
|
|
Net investment income
|
|
|
(597,944
|
)
|
|
|
(362,663
|
)
|
|
|
|
|
|
|
|
|
|
|
(105,514
|
)
|
|
|
|
|
|
Return of capital
|
|
|
|
|
|
|
(25,620
|
)
|
|
|
|
|
|
|
|
|
|
|
(57,242
|
)
|
|
|
|
|
|
Total distributions to shareholders
|
|
|
(597,944
|
)
|
|
|
(388,283
|
)
|
|
|
|
|
|
|
|
|
|
|
(162,756
|
)
|
|
|
|
|
|
SHAREHOLDER TRANSACTIONS:
|
|
Proceeds from shares sold
|
|
|
306,615,261
|
|
|
|
149,636,041
|
|
|
|
121,607,209
|
|
|
|
48,140,438
|
|
|
|
469,242,076
|
|
|
|
92,402,327
|
|
|
Value of shares repurchased
|
|
|
(245,073,856
|
)
|
|
|
(53,795,021
|
)
|
|
|
(36,337,012
|
)
|
|
|
(28,531,110
|
)
|
|
|
(191,750,748
|
)
|
|
|
(2,473,008
|
)
|
|
Net income equalization
|
|
|
(15,071
|
)
|
|
|
(13,857
|
)
|
|
|
192,676
|
|
|
|
(6,280
|
)
|
|
|
(610,622
|
)
|
|
|
(177,364
|
)
|
|
Net increase (decrease) in net assets resulting
from shares transactions
|
|
|
61,526,334
|
|
|
|
95,827,163
|
|
|
|
85,462,873
|
|
|
|
19,603,048
|
|
|
|
276,880,706
|
|
|
|
89,751,955
|
|
|
Increase (Decrease) in Net Assets
|
|
|
55,609,344
|
|
|
|
116,750,590
|
|
|
|
92,673,487
|
|
|
|
21,662,820
|
|
|
|
271,423,508
|
|
|
|
92,090,296
|
|
|
NET ASSETS:
|
|
Beginning of period
|
|
|
201,886,121
|
|
|
|
85,135,531
|
|
|
|
21,662,820
|
|
|
|
|
|
|
|
92,090,296
|
|
|
|
|
|
|
End of period
|
|
$
|
257,495,465
|
|
|
$
|
201,886,121
|
|
|
$
|
114,336,307
|
|
|
$
|
21,662,820
|
|
|
$
|
363,513,804
|
|
|
$
|
92,090,296
|
|
|
Undistributed net investment income at end of period
|
|
$
|
215,472
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
105,514
|
|
|
CHANGES IN SHARES OUTSTANDING:
|
|
Shares sold
|
|
|
13,600,000
|
|
|
|
8,100,000
|
|
|
|
3,700,000
|
|
|
|
1,900,000
|
|
|
|
17,900,000
|
|
|
|
3,700,000
|
|
|
Shares repurchased
|
|
|
(11,300,000
|
)
|
|
|
(3,000,000
|
)
|
|
|
(1,100,000
|
)
|
|
|
(1,100,000
|
)
|
|
|
(7,500,000
|
)
|
|
|
(100,000
|
)
|
|
Shares outstanding, beginning of period
|
|
|
10,000,000
|
|
|
|
4,900,000
|
|
|
|
800,000
|
|
|
|
|
|
|
|
3,600,000
|
|
|
|
|
|
|
Shares outstanding, end of period
|
|
|
12,300,000
|
|
|
|
10,000,000
|
|
|
|
3,400,000
|
|
|
|
800,000
|
|
|
|
14,000,000
|
|
|
|
3,600,000
|
|
|
* Commencement of Investment Operations.
See Notes to Financial Statements.
62
|
|
PowerShares
Golden Dragon
Halter USX China
Portfolio
|
|
PowerShares
Listed
Private Equity
Portfolio
|
|
PowerShares
Lux Nanotech
Portfolio
|
|
|
|
Year Ended
April 30, 2008
|
|
Year Ended
April 30, 2007
|
|
Year Ended
April 30, 2008
|
|
For the Period
October 24,
2006* Through
April 30, 2007
|
|
Year Ended
April 30, 2008
|
|
Year Ended
April 30, 2007
|
|
OPERATIONS:
|
|
Net investment income (loss)
|
|
$
|
2,542,230
|
|
|
$
|
3,172,560
|
|
|
$
|
6,816,457
|
|
|
$
|
1,314,594
|
|
|
$
|
(211,067
|
)
|
|
$
|
(119,784
|
)
|
|
Net realized gain (loss) on investments
|
|
|
225,313,096
|
|
|
|
48,676,384
|
|
|
|
(5,793,748
|
)
|
|
|
1,140,822
|
|
|
|
(5,038,081
|
)
|
|
|
2,437,702
|
|
|
Net change in unrealized appreciation (depreciation) of
investments
|
|
|
(101,212,578
|
)
|
|
|
13,246,066
|
|
|
|
(40,433,048
|
)
|
|
|
4,753,710
|
|
|
|
(20,211,100
|
)
|
|
|
(12,992,856
|
)
|
|
Net increase (decrease) in net assets resulting from operations
|
|
|
126,642,748
|
|
|
|
65,095,010
|
|
|
|
(39,410,339
|
)
|
|
|
7,209,126
|
|
|
|
(25,460,248
|
)
|
|
|
(10,674,938
|
)
|
|
Undistributed net investment income (loss) included in the
price of units issued and redeemed
|
|
|
619,099
|
|
|
|
111,037
|
|
|
|
(182,741
|
)
|
|
|
242,577
|
|
|
|
73,183
|
|
|
|
(40,198
|
)
|
|
DISTRIBUTIONS TO SHAREHOLDERS FROM:
|
|
Net investment income
|
|
|
(3,881,852
|
)
|
|
|
(3,191,113
|
)
|
|
|
(6,147,694
|
)
|
|
|
(689,732
|
)
|
|
|
|
|
|
|
|
|
|
Return of capital
|
|
|
(198,502
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total distributions to shareholders
|
|
|
(4,080,354
|
)
|
|
|
(3,191,113
|
)
|
|
|
(6,147,694
|
)
|
|
|
(689,732
|
)
|
|
|
|
|
|
|
|
|
|
SHAREHOLDER TRANSACTIONS:
|
|
Proceeds from shares sold
|
|
|
831,380,876
|
|
|
|
286,475,511
|
|
|
|
76,913,561
|
|
|
|
162,455,219
|
|
|
|
24,034,571
|
|
|
|
91,815,890
|
|
|
Value of shares repurchased
|
|
|
(819,780,640
|
)
|
|
|
(192,389,311
|
)
|
|
|
(78,054,703
|
)
|
|
|
(18,896,255
|
)
|
|
|
(73,198,428
|
)
|
|
|
(34,505,044
|
)
|
|
Net income equalization
|
|
|
(619,099
|
)
|
|
|
(111,037
|
)
|
|
|
182,741
|
|
|
|
(242,577
|
)
|
|
|
(73,183
|
)
|
|
|
40,198
|
|
|
Net increase (decrease) in net assets resulting
from shares transactions
|
|
|
10,981,137
|
|
|
|
93,975,163
|
|
|
|
(958,401
|
)
|
|
|
143,316,387
|
|
|
|
(49,237,040
|
)
|
|
|
57,351,044
|
|
|
Increase (Decrease) in Net Assets
|
|
|
134,162,630
|
|
|
|
155,990,097
|
|
|
|
(46,699,175
|
)
|
|
|
150,078,358
|
|
|
|
(74,624,105
|
)
|
|
|
46,635,908
|
|
|
NET ASSETS:
|
|
Beginning of period
|
|
|
394,320,371
|
|
|
|
238,330,274
|
|
|
|
150,078,358
|
|
|
|
|
|
|
|
159,052,320
|
|
|
|
112,416,412
|
|
|
End of period
|
|
$
|
528,483,001
|
|
|
$
|
394,320,371
|
|
|
$
|
103,379,183
|
|
|
$
|
150,078,358
|
|
|
$
|
84,428,215
|
|
|
$
|
159,052,320
|
|
|
Undistributed net investment income at end of period
|
|
$
|
|
|
|
$
|
588,109
|
|
|
$
|
1,142,260
|
|
|
$
|
624,862
|
|
|
$
|
|
|
|
$
|
|
|
|
CHANGES IN SHARES OUTSTANDING:
|
|
Shares sold
|
|
|
27,200,000
|
|
|
|
14,400,000
|
|
|
|
2,900,000
|
|
|
|
6,100,000
|
|
|
|
1,400,000
|
|
|
|
5,200,000
|
|
|
Shares repurchased
|
|
|
(27,300,000
|
)
|
|
|
(10,100,000
|
)
|
|
|
(3,200,000
|
)
|
|
|
(700,000
|
)
|
|
|
(4,500,000
|
)
|
|
|
(2,000,000
|
)
|
|
Shares outstanding, beginning of period
|
|
|
18,400,000
|
|
|
|
14,100,000
|
|
|
|
5,400,000
|
|
|
|
|
|
|
|
9,100,000
|
|
|
|
5,900,000
|
|
|
Shares outstanding, end of period
|
|
|
18,300,000
|
|
|
|
18,400,000
|
|
|
|
5,100,000
|
|
|
|
5,400,000
|
|
|
|
6,000,000
|
|
|
|
9,100,000
|
|
|
63
Statements of Changes in Net Assets (Continued)
|
|
PowerShares
S&P 500
BuyWrite
Portfolio
|
|
PowerShares
Value Line
Industry Rotation
Portfolio
|
|
PowerShares
Value Line
Timeliness
TM
Select
Portfolio
|
|
|
|
For the Period
December 19, 2007*
Through
April 30, 2008
|
|
Year Ended
April 30, 2008
|
|
For the Period
December 1, 2006*
Through
April 30, 2007
|
|
Year Ended
April 30, 2008
|
|
Year Ended
April 30, 2007
|
|
OPERATIONS:
|
|
Net investment income (loss)
|
|
$
|
13,626
|
|
|
$
|
11,257
|
|
|
$
|
2,617
|
|
|
$
|
(240,523
|
)
|
|
$
|
(115,400
|
)
|
|
Net realized gain (loss) on investments and written options
|
|
|
20,654
|
|
|
|
(556,166
|
)
|
|
|
337,461
|
|
|
|
9,749,852
|
|
|
|
(6,066,601
|
)
|
|
Net change in unrealized appreciation (depreciation) of
investments and written options
|
|
|
57,402
|
|
|
|
(11,149
|
)
|
|
|
1,738,936
|
|
|
|
(20,623,471
|
)
|
|
|
13,228,112
|
|
|
Net increase (decrease) in net assets resulting from operations
|
|
|
91,682
|
|
|
|
(556,058
|
)
|
|
|
2,079,014
|
|
|
|
(11,114,142
|
)
|
|
|
7,046,111
|
|
|
Undistributed net investment income (loss) included in the
price of units issued and redeemed
|
|
|
14,403
|
|
|
|
1,411
|
|
|
|
2,011
|
|
|
|
56,801
|
|
|
|
(29,370
|
)
|
|
DISTRIBUTIONS TO SHAREHOLDERS FROM:
|
|
Net investment income
|
|
|
(10,500
|
)
|
|
|
(19,266
|
)
|
|
|
(2,669
|
)
|
|
|
|
|
|
|
|
|
|
Return of capital
|
|
|
|
|
|
|
(1,384
|
)
|
|
|
(4,445
|
)
|
|
|
|
|
|
|
|
|
|
Total distributions to shareholders
|
|
|
(10,500
|
)
|
|
|
(20,650
|
)
|
|
|
(7,114
|
)
|
|
|
|
|
|
|
|
|
|
SHAREHOLDER TRANSACTIONS:
|
|
Proceeds from shares sold
|
|
|
7,419,561
|
|
|
|
90,728,154
|
|
|
|
39,530,660
|
|
|
|
410,338,472
|
|
|
|
461,154,401
|
|
|
Value of shares repurchased
|
|
|
|
|
|
|
(81,951,087
|
)
|
|
|
(7,952,741
|
)
|
|
|
(494,163,323
|
)
|
|
|
(378,402,470
|
)
|
|
Net income equalization
|
|
|
(14,403
|
)
|
|
|
(1,411
|
)
|
|
|
(2,011
|
)
|
|
|
(56,801
|
)
|
|
|
29,370
|
|
|
Net increase (decrease) in net assets resulting
from shares transactions
|
|
|
7,405,158
|
|
|
|
8,775,656
|
|
|
|
31,575,908
|
|
|
|
(83,881,652
|
)
|
|
|
82,781,301
|
|
|
Increase (Decrease) in Net Assets
|
|
|
7,500,743
|
|
|
|
8,200,359
|
|
|
|
33,649,819
|
|
|
|
(94,938,993
|
)
|
|
|
89,798,042
|
|
|
NET ASSETS:
|
|
Beginning of period
|
|
|
|
|
|
|
33,649,819
|
|
|
|
|
|
|
|
272,607,579
|
|
|
|
182,809,537
|
|
|
End of period
|
|
$
|
7,500,743
|
|
|
$
|
41,850,178
|
|
|
$
|
33,649,819
|
|
|
$
|
177,668,586
|
|
|
$
|
272,607,579
|
|
|
Undistributed net investment income at end of period
|
|
$
|
3,126
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
CHANGES IN SHARES OUTSTANDING:
|
|
Shares sold
|
|
|
300,000
|
|
|
|
3,200,000
|
|
|
|
1,500,000
|
|
|
|
23,600,000
|
|
|
|
29,200,000
|
|
|
Shares repurchased
|
|
|
|
|
|
|
(2,900,000
|
)
|
|
|
(300,000
|
)
|
|
|
(28,500,000
|
)
|
|
|
(24,400,000
|
)
|
|
Shares outstanding, beginning of period
|
|
|
|
|
|
|
1,200,000
|
|
|
|
|
|
|
|
15,500,000
|
|
|
|
10,700,000
|
|
|
Shares outstanding, end of period
|
|
|
300,000
|
|
|
|
1,500,000
|
|
|
|
1,200,000
|
|
|
|
10,600,000
|
|
|
|
15,500,000
|
|
|
* Commencement of Investment Operations.
See Notes to Financial Statements.
64
|
|
PowerShares
Water
Resources
Portfolio
|
|
PowerShares
WilderHill
Clean Energy
Portfolio
|
|
PowerShares
WilderHill
Progressive Energy
Portfolio
|
|
|
|
Year Ended
April 30, 2008
|
|
Year Ended
April 30, 2007
|
|
Year Ended
April 30, 2008
|
|
Year Ended
April 30, 2007
|
|
Year Ended
April 30, 2008
|
|
For the Period
October 24, 2006*
Through
April 30, 2007
|
|
OPERATIONS:
|
|
Net investment income (loss)
|
|
$
|
7,576,287
|
|
|
$
|
11,614,106
|
|
|
$
|
(3,941,540
|
)
|
|
$
|
1,691,001
|
|
|
$
|
147,013
|
|
|
$
|
60,408
|
|
|
Net realized gain (loss) on investments and written options
|
|
|
112,706,721
|
|
|
|
17,395,002
|
|
|
|
220,990,947
|
|
|
|
(57,640,921
|
)
|
|
|
(2,065,989
|
)
|
|
|
1,647,951
|
|
|
Net change in unrealized appreciation (depreciation) of
investments and written options
|
|
|
(5,048
|
)
|
|
|
62,772,486
|
|
|
|
(213,773,816
|
)
|
|
|
(51,974,247
|
)
|
|
|
144,615
|
|
|
|
1,837,263
|
|
|
Net increase (decrease) in net assets resulting from operations
|
|
|
120,277,960
|
|
|
|
91,781,594
|
|
|
|
3,275,591
|
|
|
|
(107,924,167
|
)
|
|
|
(1,774,361
|
)
|
|
|
3,545,622
|
|
|
Undistributed net investment income (loss) included in the
price of units issued and redeemed
|
|
|
434,907
|
|
|
|
1,052,528
|
|
|
|
(912,742
|
)
|
|
|
188,257
|
|
|
|
22,365
|
|
|
|
(2,980
|
)
|
|
DISTRIBUTIONS TO SHAREHOLDERS FROM:
|
|
Net investment income
|
|
|
(7,498,823
|
)
|
|
|
(11,901,149
|
)
|
|
|
|
|
|
|
(1,691,001
|
)
|
|
|
(193,423
|
)
|
|
|
(14,162
|
)
|
|
Return of capital
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(160,324
|
)
|
|
|
(9,290
|
)
|
|
|
|
|
|
Total distributions to shareholders
|
|
|
(7,498,823
|
)
|
|
|
(11,901,149
|
)
|
|
|
|
|
|
|
(1,851,325
|
)
|
|
|
(202,713
|
)
|
|
|
(14,162
|
)
|
|
SHAREHOLDER TRANSACTIONS:
|
|
Proceeds from shares sold
|
|
|
1,059,031,268
|
|
|
|
875,926,807
|
|
|
|
1,424,637,475
|
|
|
|
602,781,817
|
|
|
|
66,870,104
|
|
|
|
40,867,799
|
|
|
Value of shares repurchased
|
|
|
(581,939,914
|
)
|
|
|
(340,233,615
|
)
|
|
|
(868,365,037
|
)
|
|
|
(301,601,160
|
)
|
|
|
(25,700,249
|
)
|
|
|
(21,494,602
|
)
|
|
Net income equalization
|
|
|
(434,907
|
)
|
|
|
(1,052,528
|
)
|
|
|
912,742
|
|
|
|
(188,257
|
)
|
|
|
(22,365
|
)
|
|
|
2,980
|
|
|
Net increase (decrease) in net assets resulting
from shares transactions
|
|
|
476,656,447
|
|
|
|
534,640,664
|
|
|
|
557,185,180
|
|
|
|
300,992,400
|
|
|
|
41,147,490
|
|
|
|
19,376,177
|
|
|
Increase (Decrease) in Net Assets
|
|
|
589,870,491
|
|
|
|
615,573,637
|
|
|
|
559,548,029
|
|
|
|
191,405,165
|
|
|
|
39,192,781
|
|
|
|
22,904,657
|
|
|
NET ASSETS:
|
|
Beginning of period
|
|
|
1,606,781,683
|
|
|
|
991,208,046
|
|
|
|
914,344,793
|
|
|
|
722,939,628
|
|
|
|
22,904,657
|
|
|
|
|
|
|
End of period
|
|
$
|
2,196,652,174
|
|
|
$
|
1,606,781,683
|
|
|
$
|
1,473,892,822
|
|
|
$
|
914,344,793
|
|
|
$
|
62,097,438
|
|
|
$
|
22,904,657
|
|
|
Undistributed net investment income at end of period
|
|
$
|
229,824
|
|
|
$
|
152,360
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
46,410
|
|
|
CHANGES IN SHARES OUTSTANDING:
|
|
Shares sold
|
|
|
50,300,000
|
|
|
|
48,400,000
|
|
|
|
61,200,000
|
|
|
|
31,600,000
|
|
|
|
2,300,000
|
|
|
|
1,600,000
|
|
|
Shares repurchased
|
|
|
(27,700,000
|
)
|
|
|
(19,000,000
|
)
|
|
|
(38,200,000
|
)
|
|
|
(16,500,000
|
)
|
|
|
(900,000
|
)
|
|
|
(800,000
|
)
|
|
Shares outstanding, beginning of period
|
|
|
83,700,000
|
|
|
|
54,300,000
|
|
|
|
47,400,000
|
|
|
|
32,300,000
|
|
|
|
800,000
|
|
|
|
|
|
|
Shares outstanding, end of period
|
|
|
106,300,000
|
|
|
|
83,700,000
|
|
|
|
70,400,000
|
|
|
|
47,400,000
|
|
|
|
2,200,000
|
|
|
|
800,000
|
|
|
65
Financial Highlights
PowerShares Aerospace & Defense Portfolio
|
|
Year Ended April 30,
|
|
For the Period
October 26, 2005*
Through
|
|
|
|
2008
|
|
2007
|
|
April 30, 2006
|
|
PER SHARE OPERATING PERFORMANCE:
|
|
Net asset value at beginning of period
|
|
$
|
20.19
|
|
|
$
|
17.37
|
|
|
$
|
14.91
|
|
|
Net investment income**
|
|
|
0.06
|
|
|
|
0.05
|
|
|
|
0.03
|
|
|
Net realized and unrealized gain on investments
|
|
|
0.72
|
|
|
|
2.83
|
|
|
|
2.45
|
|
|
Total from operations
|
|
|
0.78
|
|
|
|
2.88
|
|
|
|
2.48
|
|
|
Distributions to shareholders from:
|
|
Net investment income
|
|
|
(0.04
|
)
|
|
|
(0.06
|
)
|
|
|
(0.02
|
)
|
|
Return of capital
|
|
|
|
|
|
|
|
(a)
|
|
|
|
|
|
Total distributions
|
|
|
(0.04
|
)
|
|
|
(0.06
|
)
|
|
|
(0.02
|
)
|
|
Net asset value at end of period
|
|
$
|
20.93
|
|
|
$
|
20.19
|
|
|
$
|
17.37
|
|
|
TOTAL RETURN***
|
|
|
3.86
|
%
|
|
|
16.66
|
%
|
|
|
16.66
|
%
|
|
RATIOS/SUPPLEMENTAL DATA:
|
|
Net assets at end of period (000's omitted)
|
|
$
|
257,495
|
|
|
$
|
201,886
|
|
|
$
|
85,136
|
|
|
Ratio to average net assets of:
|
|
Expenses, after Waivers and/or Recapture
|
|
|
0.66
|
%
|
|
|
0.66
|
%
|
|
|
0.68
|
%
|
|
Expenses, prior to Waivers and/or Recapture
|
|
|
0.64
|
%
|
|
|
0.77
|
%
|
|
|
0.80
|
%
|
|
Net investment income, after Waivers and/or Recapture
|
|
|
0.27
|
%
|
|
|
0.28
|
%
|
|
|
0.31
|
%
|
|
Portfolio turnover rate
|
|
|
13
|
%
|
|
|
16
|
%
|
|
|
1
|
%
|
|
Undistributed net investment income included in price of units
issued and redeemed**#
|
|
$
|
|
(a)
|
|
$
|
|
(a)
|
|
|
|
|
|
PowerShares Cleantech
TM
Portfolio
|
|
Year
Ended
April 30, 2008
|
|
For the Period
October 24, 2006*
Through
April 30, 2007
|
|
PER SHARE OPERATING PERFORMANCE:
|
|
Net asset value at beginning of period
|
|
$
|
27.08
|
|
|
$
|
24.70
|
|
|
Net investment loss**
|
|
|
(0.10
|
)
|
|
|
(0.04
|
)
|
|
Net realized and unrealized gain on investments
|
|
|
6.65
|
|
|
|
2.42
|
|
|
Total from operations
|
|
|
6.55
|
|
|
|
2.38
|
|
|
Net asset value at end of period
|
|
$
|
33.63
|
|
|
$
|
27.08
|
|
|
TOTAL RETURN***
|
|
|
24.19
|
%
|
|
|
9.64
|
%
|
|
RATIOS/SUPPLEMENTAL DATA:
|
|
Net assets at end of period (000's omitted)
|
|
$
|
114,336
|
|
|
$
|
21,663
|
|
|
Ratio to average net assets of:
|
|
Expenses, after Waivers and/or Recapture
|
|
|
0.69
|
%
|
|
|
0.71
|
%
|
|
Expenses, prior to Waivers and/or Recapture
|
|
|
0.77
|
%
|
|
|
1.06
|
%
|
|
Net investment loss, after Waivers and/or Recapture
|
|
|
(0.31
|
)%
|
|
|
(0.29
|
)%
|
|
Portfolio turnover rate
|
|
|
23
|
%
|
|
|
22
|
%
|
|
Undistributed net investment income (loss) included in price of units issued and redeemed**#
|
|
$
|
(0.09
|
)
|
|
$
|
0.01
|
|
|
* Commencement of Investment Operations.
** Based on average shares outstanding.
*** Total investment return is calculated assuming an initial investment made at the net asset value at the beginning of the period, reinvestment of all dividends and distributions at net asset value during the period, and redemption on the last day of the period. Total investment return calculated for a period of less than one year is not annualized.
Annualized.
Portfolio turnover is not annualized and does not include securities received or delivered from processing creations or redemptions.
# The per share amount of equalization is presented to show the impact of equalization on distributable earnings per share. In prior periods, this amount has been included in the "Per Share Operating Performance" below the "Total from operations," with an offsetting amount included in "Net realized and unrealized gain (loss) on investments". The Fund's use of equalization does not affect net asset value per share, total return or the ratio of average net assets and the presentation has been revised accordingly.
(a) Amount represents less than $0.005.
See Notes to Financial Statements.
66
Financial Highlights (Continued)
PowerShares DWA Technical Leaders
TM
Portfolio
|
|
Year
Ended
April 30, 2008
|
|
For the Period
March 1, 2007*
Through
April 30, 2007
|
|
PER SHARE OPERATING PERFORMANCE:
|
|
Net asset value at beginning of period
|
|
$
|
25.58
|
|
|
$
|
23.95
|
|
|
Net investment income (loss)**
|
|
|
(0.02
|
)
|
|
|
0.04
|
|
|
Net realized and unrealized gain on investments
|
|
|
0.43
|
|
|
|
1.59
|
|
|
Total from operations
|
|
|
0.41
|
|
|
|
1.63
|
|
|
Distributions to shareholders from:
|
|
Net investment income
|
|
|
(0.01
|
)
|
|
|
|
|
|
Return of capital
|
|
|
(0.01
|
)
|
|
|
|
|
|
Total distributions
|
|
|
(0.02
|
)
|
|
|
|
|
|
Net asset value at end of period
|
|
$
|
25.97
|
|
|
$
|
25.58
|
|
|
TOTAL RETURN***
|
|
|
1.62
|
%
|
|
|
6.81
|
%
|
|
RATIOS/SUPPLEMENTAL DATA:
|
|
Net assets at end of period (000's omitted)
|
|
$
|
363,514
|
|
|
$
|
92,090
|
|
|
Ratio to average net assets of:
|
|
Expenses, after Waivers and/or Recapture
|
|
|
0.71
|
%
|
|
|
0.72
|
%
|
|
Expenses, prior to Waivers and/or Recapture
|
|
|
0.68
|
%
|
|
|
1.78
|
%
|
|
Net investment income (loss), after Waivers and/or Recapture
|
|
|
(0.07
|
)%
|
|
|
1.50
|
%(a)
|
|
Portfolio turnover rate
|
|
|
83
|
%
|
|
|
9
|
%
|
|
Undistributed net investment income included in price of units issued and redeemed**#
|
|
$
|
0.07
|
|
|
$
|
0.07
|
|
|
PowerShares Golden Dragon Halter USX China Portfolio
|
|
Year Ended April 30,
|
|
For the Period
December 9, 2004*
Through
|
|
|
|
2008
|
|
2007
|
|
2006
|
|
April 30, 2005
|
|
PER SHARE OPERATING PERFORMANCE:
|
|
Net asset value at beginning of period
|
|
$
|
21.43
|
|
|
$
|
16.90
|
|
|
$
|
13.00
|
|
|
$
|
14.55
|
|
|
Net investment income**
|
|
|
0.12
|
|
|
|
0.20
|
|
|
|
0.17
|
|
|
|
0.06
|
|
|
Net realized and unrealized gain (loss) on investments
|
|
|
7.54
|
|
|
|
4.54
|
|
|
|
3.89
|
|
|
|
(1.61
|
)
|
|
Total from operations
|
|
|
7.66
|
|
|
|
4.74
|
|
|
|
4.06
|
|
|
|
(1.55
|
)
|
|
Distributions to shareholders from:
|
|
Net investment income
|
|
|
(0.20
|
)
|
|
|
(0.21
|
)
|
|
|
(0.16
|
)
|
|
|
|
|
|
Return of capital
|
|
|
(0.01
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total distributions
|
|
|
(0.21
|
)
|
|
|
(0.21
|
)
|
|
|
(0.16
|
)
|
|
|
|
|
|
Net asset value at end of period
|
|
$
|
28.88
|
|
|
$
|
21.43
|
|
|
$
|
16.90
|
|
|
$
|
13.00
|
|
|
TOTAL RETURN***
|
|
|
35.87
|
%
|
|
|
28.53
|
%
|
|
|
31.52
|
%
|
|
|
(10.68
|
)%
|
|
RATIOS/SUPPLEMENTAL DATA:
|
|
Net assets at end of period (000's omitted)
|
|
$
|
528,483
|
|
|
$
|
394,320
|
|
|
$
|
238,330
|
|
|
$
|
49,384
|
|
|
Ratio to average net assets of:
|
|
Expenses, after Waivers and/or Recapture
|
|
|
0.69
|
%
|
|
|
0.70
|
%
|
|
|
0.71
|
%
|
|
|
0.70
|
%
|
|
Expenses, prior to Waivers and/or Recapture
|
|
|
0.66
|
%
|
|
|
0.72
|
%
|
|
|
0.88
|
%
|
|
|
0.97
|
%
|
|
Net investment income, after Waivers and/or Recapture
|
|
|
0.42
|
%
|
|
|
1.06
|
%
|
|
|
1.18
|
%
|
|
|
1.24
|
%
|
|
Portfolio turnover rate
|
|
|
15
|
%
|
|
|
17
|
%
|
|
|
21
|
%
|
|
|
9
|
%
|
|
Undistributed net investment income included in price of units
issued and redeemed**#
|
|
$
|
0.03
|
|
|
$
|
0.01
|
|
|
|
|
|
|
|
|
|
|
* Commencement of Investment Operations.
** Based on average shares outstanding.
*** Total investment return is calculated assuming an initial investment made at the net asset value at the beginning of the period, reinvestment of all dividends and distributions at net asset value during the period, and redemption on the last day of the period. Total investment return calculated for a period of less than one year is not annualized.
Annualized.
Portfolio turnover is not annualized and does not include securities received or delivered from processing creations or redemptions.
# The per share amount of equalization is presented to show the impact of equalization on distributable earnings per share. In prior periods, this amount has been included in the "Per Share Operating Performance" below the "Total from operations," with an offsetting amount included in "Net realized and unrealized gain (loss) on investments". The Fund's use of equalization does not affect net asset value per share, total return or the ratio of average net assets and the presentation has been revised accordingly.
(a) Net investment income per share and the ratio of net investment income to average net assets include a special cash dividend received of $15.00 per share owned of Dean Foods Co. on April 2, 2007. Net investment loss per share and the ratio of net investment loss to average net assets excluding the special dividend were less than $0.005 and (0.11)%, respectively, for the year ended April 30, 2007.
See Notes to Financial Statements.
67
Financial Highlights (Continued)
PowerShares Listed Private Equity Portfolio
|
|
Year
Ended
April 30, 2008
|
|
For the Period
October 24, 2006*
Through
April 30, 2007
|
|
PER SHARE OPERATING PERFORMANCE:
|
|
Net asset value at beginning of period
|
|
$
|
27.79
|
|
|
$
|
25.09
|
|
|
Net investment income**
|
|
|
1.22
|
|
|
|
0.44
|
|
|
Net realized and unrealized gain (loss) on investments
|
|
|
(7.63
|
)
|
|
|
2.60
|
|
|
Total from operations
|
|
|
(6.41
|
)
|
|
|
3.04
|
|
|
Distributions to shareholders from:
|
|
Net investment income
|
|
|
(1.11
|
)
|
|
|
(0.34
|
)
|
|
Net asset value at end of period
|
|
$
|
20.27
|
|
|
$
|
27.79
|
|
|
TOTAL RETURN***
|
|
|
(23.50
|
)%
|
|
|
12.18
|
%
|
|
RATIOS/SUPPLEMENTAL DATA:
|
|
Net assets at end of period (000's omitted)
|
|
$
|
103,379
|
|
|
$
|
150,078
|
|
|
Ratio to average net assets of:
|
|
Expenses, after Waivers and/or Recapture
|
|
|
0.71
|
%
|
|
|
0.71
|
%
|
|
Expenses, prior to Waivers and/or Recapture
|
|
|
0.72
|
%
|
|
|
0.82
|
%
|
|
Net investment income, after Waivers and/or Recapture
|
|
|
5.04
|
%
|
|
|
3.38
|
%
|
|
Portfolio turnover rate
|
|
|
30
|
%
|
|
|
19
|
%
|
|
Undistributed net investment income (loss) included in price of units issued and redeemed**#
|
|
$
|
(0.03
|
)
|
|
$
|
0.08
|
|
|
PowerShares Lux Nanotech Portfolio
|
|
Year Ended April 30,
|
|
For the Period
October 26, 2005*
Through
|
|
|
|
2008
|
|
2007
|
|
April 30, 2006
|
|
PER SHARE OPERATING PERFORMANCE:
|
|
Net asset value at beginning of period
|
|
$
|
17.48
|
|
|
$
|
19.05
|
|
|
$
|
15.32
|
|
|
Net investment income (loss)**
|
|
|
(0.03
|
)
|
|
|
(0.02
|
)
|
|
|
0.02
|
|
|
Net realized and unrealized gain (loss) on investments
|
|
|
(3.38
|
)
|
|
|
(1.55
|
)
|
|
|
3.79
|
|
|
Total from operations
|
|
|
(3.41
|
)
|
|
|
(1.57
|
)
|
|
|
3.81
|
|
|
Distributions to shareholders from:
|
|
Net investment income
|
|
|
|
|
|
|
|
|
|
|
(0.01
|
)
|
|
Return of capital
|
|
|
|
|
|
|
|
|
|
|
(0.07
|
)
|
|
Total distributions
|
|
|
|
|
|
|
|
|
|
|
(0.08
|
)
|
|
Net asset value at end of period
|
|
$
|
14.07
|
|
|
$
|
17.48
|
|
|
$
|
19.05
|
|
|
TOTAL RETURN***
|
|
|
(19.51
|
)%
|
|
|
(8.24
|
)%
|
|
|
24.94
|
%
|
|
RATIOS/SUPPLEMENTAL DATA:
|
|
Net assets at end of period (000's omitted)
|
|
$
|
84,428
|
|
|
$
|
159,052
|
|
|
$
|
112,416
|
|
|
Ratio to average net assets of:
|
|
Expenses, after Waivers and/or Recapture
|
|
|
0.70
|
%
|
|
|
0.71
|
%
|
|
|
0.73
|
%
|
|
Expenses, prior to Waivers and/or Recapture
|
|
|
0.73
|
%
|
|
|
0.79
|
%
|
|
|
0.83
|
%
|
|
Net investment income (loss), after Waivers and/or Recapture
|
|
|
(0.17
|
)%
|
|
|
(0.09
|
)%
|
|
|
0.17
|
%
|
|
Portfolio turnover rate
|
|
|
42
|
%
|
|
|
16
|
%
|
|
|
6
|
%
|
|
Undistributed net investment income (loss) included in price of units
issued and redeemed**#
|
|
$
|
0.01
|
|
|
$
|
(0.01
|
)
|
|
|
|
|
|
* Commencement of Investment Operations.
** Based on average shares outstanding.
*** Total investment return is calculated assuming an initial investment made at the net asset value at the beginning of the period, reinvestment of all dividends and distributions at net asset value during the period, and redemption on the last day of the period. Total investment return calculated for a period of less than one year is not annualized.
Annualized.
Portfolio turnover is not annualized and does not include securities received or delivered from processing creations or redemptions.
# The per share amount of equalization is presented to show the impact of equalization on distributable earnings per share. In prior periods, this amount has been included in the "Per Share Operating Performance" below the "Total from operations," with an offsetting amount included in "Net realized and unrealized gain (loss) on investments". The Fund's use of equalization does not affect net asset value per share, total return or the ratio of average net assets and the presentation has been revised accordingly.
See Notes to Financial Statements.
68
Financial Highlights (Continued)
PowerShares S&P 500 BuyWrite Portfolio
|
|
For the Period
December 19, 2007*
Through
April 30, 2008
|
|
PER SHARE OPERATING PERFORMANCE:
|
|
Net asset value at beginning of period
|
|
$
|
24.97
|
|
|
Net investment income**
|
|
|
0.09
|
|
|
Net realized and unrealized loss on investments
|
|
|
(0.01
|
)
|
|
Total from operations
|
|
|
0.08
|
|
|
Distributions to shareholders from:
|
|
Net investment income
|
|
|
(0.05
|
)
|
|
Net asset value at end of period
|
|
$
|
25.00
|
|
|
TOTAL RETURN***
|
|
|
0.33
|
%
|
|
RATIOS/SUPPLEMENTAL DATA:
|
|
Net assets at end of period (000's omitted)
|
|
$
|
7,500
|
|
|
Ratio to average net assets of:
|
|
Expenses
|
|
|
0.75
|
%
|
|
Net investment income
|
|
|
1.12
|
%
|
|
Portfolio turnover rate
|
|
|
10
|
%
|
|
Undistributed net investment income included in price of units issued and redeemed**#
|
|
$
|
0.09
|
|
|
PowerShares Value Line Industry Rotation Portfolio
|
|
Year
Ended
April 30, 2008
|
|
For the Period
December 1, 2006*
Through
April 30, 2007
|
|
PER SHARE OPERATING PERFORMANCE:
|
|
Net asset value at beginning of period
|
|
$
|
28.04
|
|
|
$
|
25.19
|
|
|
Net investment income**
|
|
|
0.01
|
|
|
|
|
(a)
|
|
Net realized and unrealized gain (loss) on investments
|
|
|
(0.14
|
)
|
|
|
2.86
|
|
|
Total from operations
|
|
|
(0.13
|
)
|
|
|
2.86
|
|
|
Distributions to shareholders from:
|
|
Net investment income
|
|
|
(0.01
|
)
|
|
|
|
(a)
|
|
Return of capital
|
|
|
|
(a)
|
|
|
(0.01
|
)
|
|
Total distributions
|
|
|
(0.01
|
)
|
|
|
(0.01
|
)
|
|
Net asset value at end of period
|
|
$
|
27.90
|
|
|
$
|
28.04
|
|
|
TOTAL RETURN***
|
|
|
(0.45
|
)%
|
|
|
11.36
|
%
|
|
RATIOS/SUPPLEMENTAL DATA:
|
|
Net assets at end of period (000's omitted)
|
|
$
|
41,850
|
|
|
$
|
33,650
|
|
|
Ratio to average net assets of:
|
|
Expenses, after Waivers and/or Recapture
|
|
|
0.73
|
%
|
|
|
0.75
|
%
|
|
Expenses, prior to Waivers and/or Recapture
|
|
|
0.95
|
%
|
|
|
1.21
|
%
|
|
Net investment income, after Waivers and/or Recapture
|
|
|
0.03
|
%
|
|
|
0.03
|
%
|
|
Portfolio turnover rate
|
|
|
77
|
%
|
|
|
13
|
%
|
|
Undistributed net investment income included in price of units issued and redeemed**#
|
|
$
|
|
(a)
|
|
$
|
|
(a)
|
|
* Commencement of Investment Operations.
** Based on average shares outstanding.
*** Total investment return is calculated assuming an initial investment made at the net asset value at the beginning of the period, reinvestment of all dividends and distributions at net asset value during the period, and redemption on the last day of the period. Total investment return calculated for a period of less than one year is not annualized.
Annualized.
Portfolio turnover is not annualized and does not include securities received or delivered from processing creations or redemptions.
# The per share amount of equalization is presented to show the impact of equalization on distributable earnings per share. In prior periods, this amount has been included in the "Per Share Operating Performance" below the "Total from operations," with an offsetting amount included in "Net realized and unrealized gain (loss) on investments". The Fund's use of equalization does not affect net asset value per share, total return or the ratio of average net assets and the presentation has been revised accordingly.
(a) Amount represents less than $0.005.
The total return from Fund Inception (first day of trading on the Exchange) to April 30, 2008 was (0.19)%.
See Notes to Financial Statements.
69
Financial Highlights (Continued)
PowerShares Value Line Timeliness
TM
Select Portfolio
|
|
Year Ended April 30,
|
|
For the Period
December 6, 2005*
Through
|
|
|
|
2008
|
|
2007
|
|
April 30, 2006
|
|
PER SHARE OPERATING PERFORMANCE:
|
|
Net asset value at beginning of period
|
|
$
|
17.59
|
|
|
$
|
17.09
|
|
|
$
|
15.52
|
|
|
Net investment loss**
|
|
|
(0.02
|
)
|
|
|
(0.01
|
)
|
|
|
(0.02
|
)
|
|
Net realized and unrealized gain (loss) on investments
|
|
|
(0.81
|
)
|
|
|
0.51
|
|
|
|
1.59
|
|
|
Total from operations
|
|
|
(0.83
|
)
|
|
|
0.50
|
|
|
|
1.57
|
|
|
Net asset value at end of period
|
|
$
|
16.76
|
|
|
$
|
17.59
|
|
|
$
|
17.09
|
|
|
TOTAL RETURN***
|
|
|
(4.72
|
)%
|
|
|
2.93
|
%
|
|
|
10.12
|
%
|
|
RATIOS/SUPPLEMENTAL DATA:
|
|
Net assets at end of period (000's omitted)
|
|
$
|
177,669
|
|
|
$
|
272,608
|
|
|
$
|
182,810
|
|
|
Ratio to average net assets of:
|
|
Expenses, after Waivers and/or Recapture
|
|
|
0.70
|
%
|
|
|
0.70
|
%
|
|
|
0.71
|
%
|
|
Expenses, prior to Waivers and/or Recapture
|
|
|
0.70
|
%
|
|
|
0.75
|
%
|
|
|
0.78
|
%
|
|
Net investment loss, after Waivers and/or Recapture
|
|
|
(0.12
|
)%
|
|
|
(0.06
|
)%
|
|
|
(0.30
|
)%
|
|
Portfolio turnover rate
|
|
|
101
|
%
|
|
|
113
|
%
|
|
|
39
|
%
|
|
Undistributed net investment income included in price of units
issued and redeemed**#
|
|
$
|
0.01
|
|
|
$
|
|
(a)
|
|
|
|
|
|
PowerShares Water Resources Portfolio
|
|
Year Ended April 30,
|
|
For the Period
December 6, 2005*
Through
|
|
|
|
2008
|
|
2007
|
|
April 30, 2006
|
|
PER SHARE OPERATING PERFORMANCE:
|
|
Net asset value at beginning of period
|
|
$
|
19.20
|
|
|
$
|
18.25
|
|
|
$
|
15.32
|
|
|
Net investment income**
|
|
|
0.08
|
|
|
|
0.17
|
|
|
|
0.02
|
|
|
Net realized and unrealized gain on investments
|
|
|
1.46
|
|
|
|
0.95
|
|
|
|
2.94
|
|
|
Total from operations
|
|
|
1.54
|
|
|
|
1.12
|
|
|
|
2.96
|
|
|
Distributions to shareholders from:
|
|
Net investment income
|
|
|
(0.08
|
)
|
|
|
(0.17
|
)
|
|
|
(0.03
|
)
|
|
Net asset value at end of period
|
|
$
|
20.66
|
|
|
$
|
19.20
|
|
|
$
|
18.25
|
|
|
TOTAL RETURN***
|
|
|
8.02
|
%
|
|
|
6.26
|
%
|
|
|
19.38
|
%
|
|
RATIOS/SUPPLEMENTAL DATA:
|
|
Net assets at end of period (000's omitted)
|
|
$
|
2,196,652
|
|
|
$
|
1,606,782
|
|
|
$
|
991,208
|
|
|
Ratio to average net assets of:
|
|
Expenses, after Waivers and/or Recapture
|
|
|
0.64
|
%
|
|
|
0.66
|
%
|
|
|
0.67
|
%
|
|
Expenses, prior to Waivers and/or Recapture
|
|
|
0.63
|
%
|
|
|
0.67
|
%
|
|
|
0.70
|
%
|
|
Net investment income, after Waivers and/or Recapture
|
|
|
0.39
|
%
|
|
|
0.96
|
%
|
|
|
0.40
|
%
|
|
Portfolio turnover rate
|
|
|
23
|
%
|
|
|
27
|
%
|
|
|
2
|
%
|
|
Undistributed net investment income included in price of units
issued and redeemed**#
|
|
$
|
0.01
|
|
|
$
|
0.02
|
|
|
|
|
|
|
* Commencement of Investment Operations.
** Based on average shares outstanding.
*** Total investment return is calculated assuming an initial investment made at the net asset value at the beginning of the period, reinvestment of all dividends and distributions at net asset value during the period, and redemption on the last day of the period. Total investment return calculated for a period of less than one year is not annualized.
Annualized.
Portfolio turnover is not annualized and does not include securities received or delivered from processing creations or redemptions.
# The per share amount of equalization is presented to show the impact of equalization on distributable earnings per share. In prior periods, this amount has been included in the "Per Share Operating Performance" below the "Total from operations," with an offsetting amount included in "Net realized and unrealized gain (loss) on investments". The Fund's use of equalization does not affect net asset value per share, total return or the ratio of average net assets and the presentation has been revised accordingly.
(a) Amount represents less than $0.005.
See Notes to Financial Statements.
70
Financial Highlights (Continued)
PowerShares WilderHill Clean Energy Portfolio
|
|
Year Ended April 30,
|
|
For the Period
March 3, 2005*
Through
|
|
|
|
2008
|
|
2007
|
|
2006
|
|
April 30, 2005
|
|
PER SHARE OPERATING PERFORMANCE:
|
|
Net asset value at beginning of period
|
|
$
|
19.29
|
|
|
$
|
22.38
|
|
|
$
|
12.86
|
|
|
$
|
15.61
|
|
|
Net investment income (loss)**
|
|
|
(0.07
|
)
|
|
|
0.04
|
|
|
|
(0.07
|
)
|
|
|
(0.01
|
)
|
|
Net realized and unrealized gain (loss) on investments
|
|
|
1.72
|
|
|
|
(3.08
|
)
|
|
|
9.59
|
|
|
|
(2.74
|
)
|
|
Total from operations
|
|
|
1.65
|
|
|
|
(3.04
|
)
|
|
|
9.52
|
|
|
|
(2.75
|
)
|
|
Distributions to shareholders from:
|
|
Net investment income
|
|
|
|
|
|
|
(0.05
|
)
|
|
|
|
|
|
|
|
|
|
Return of capital
|
|
|
|
|
|
|
|
(a)
|
|
|
|
|
|
|
|
|
|
Total distributions
|
|
|
|
|
|
|
(0.05
|
)
|
|
|
|
|
|
|
|
|
|
Net asset value at end of period
|
|
$
|
20.94
|
|
|
$
|
19.29
|
|
|
$
|
22.38
|
|
|
$
|
12.86
|
|
|
TOTAL RETURN***
|
|
|
8.55
|
%
|
|
|
(13.58
|
)%
|
|
|
74.03
|
%
|
|
|
(17.59
|
)%
|
|
RATIOS/SUPPLEMENTAL DATA:
|
|
Net assets at end of period (000's omitted)
|
|
$
|
1,473,893
|
|
|
$
|
914,345
|
|
|
$
|
722,940
|
|
|
$
|
27,012
|
|
|
Ratio to average net assets of:
|
|
Expenses, after Waivers and/or Recapture
|
|
|
0.67
|
%
|
|
|
0.70
|
%
|
|
|
0.71
|
%
|
|
|
0.70
|
%
|
|
Expenses, prior to Waivers and/or Recapture
|
|
|
0.67
|
%
|
|
|
0.69
|
%
|
|
|
0.75
|
%
|
|
|
1.35
|
%
|
|
Net investment income (loss), after Waivers and/or Recapture
|
|
|
(0.32
|
)%
|
|
|
0.24
|
%
|
|
|
(0.39
|
)%
|
|
|
(0.31
|
)%
|
|
Portfolio turnover rate
|
|
|
20
|
%
|
|
|
41
|
%
|
|
|
6
|
%
|
|
|
9
|
%
|
|
Undistributed net investment income (loss) included in price of units
issued and redeemed**#
|
|
$
|
(0.02
|
)
|
|
$
|
0.01
|
|
|
|
|
|
|
|
|
|
|
PowerShares WilderHill Progressive Energy Portfolio
|
|
Year
Ended
April 30, 2008
|
|
For the Period
October 24, 2006*
Through
April 30, 2007
|
|
PER SHARE OPERATING PERFORMANCE:
|
|
Net asset value at beginning of period
|
|
$
|
28.63
|
|
|
$
|
24.91
|
|
|
Net investment income**
|
|
|
0.09
|
|
|
|
0.06
|
|
|
Net realized and unrealized gain (loss) on investments
|
|
|
(0.36
|
)
|
|
|
3.68
|
|
|
Total from operations
|
|
|
(0.27
|
)
|
|
|
3.74
|
|
|
Distributions to shareholders from:
|
|
Net investment income
|
|
|
(0.12
|
)
|
|
|
(0.02
|
)
|
|
Return of capital
|
|
|
(0.01
|
)
|
|
|
|
|
|
Total distributions
|
|
|
(0.13
|
)
|
|
|
(0.02
|
)
|
|
Net asset value at end of period
|
|
$
|
28.23
|
|
|
$
|
28.63
|
|
|
TOTAL RETURN***
|
|
|
(0.96
|
)%
|
|
|
15.01
|
%
|
|
RATIOS/SUPPLEMENTAL DATA:
|
|
Net assets at end of period (000's omitted)
|
|
$
|
62,097
|
|
|
$
|
22,905
|
|
|
Ratio to average net assets of:
|
|
Expenses, after Waivers and/or Recapture
|
|
|
0.73
|
%
|
|
|
0.74
|
%
|
|
Expenses, prior to Waivers and/or Recapture
|
|
|
0.88
|
%
|
|
|
1.09
|
%
|
|
Net investment income, after Waivers and/or Recapture
|
|
|
0.30
|
%
|
|
|
0.45
|
%
|
|
Portfolio turnover rate
|
|
|
31
|
%
|
|
|
12
|
%
|
|
Undistributed net investment income included in price of units issued and redeemed**#
|
|
$
|
0.01
|
|
|
$
|
|
(a)
|
|
* Commencement of Investment Operations.
** Based on average shares outstanding.
*** Total investment return is calculated assuming an initial investment made at the net asset value at the beginning of the period, reinvestment of all dividends and distributions at net asset value during the period, and redemption on the last day of the period. Total investment return calculated for a period of less than one year is not annualized.
Annualized.
Portfolio turnover is not annualized and does not include securities received or delivered from processing creations or redemptions.
Net investment income per share and the ratio of net investment income to average net assets include a special cash dividend received of $6.72 per share owned of Scottish Power PLC ADR on May 18, 2006. Net investment loss per share and the ratio of net investment loss to average net assets excluding the special dividend were $(0.04) and (0.23)%, respectively, for the year ended April 30, 2007.
# The per share amount of equalization is presented to show the impact of equalization on distributable earnings per share. In prior periods, this amount has been included in the "Per Share Operating Performance" below the "Total from operations," with an offsetting amount included in "Net realized and unrealized gain (loss) on investments". The Fund's use of equalization does not affect net asset value per share, total return or the ratio of average net assets and the presentation has been revised accordingly.
(a) Amount represents less than $0.005.
See Notes to Financial Statements.
71
Notes to Financial Statements
PowerShares Exchange-Traded Fund Trust
April 30, 2008
Note 1. Organization
PowerShares Exchange-Traded Fund Trust (the "Trust") was organized as a Massachusetts business trust on June 9, 2000 and is authorized to have multiple series of portfolios. The Trust is an open-end management investment company, registered under the Investment Company Act of 1940, as amended (the "1940 Act"). As of period end, the Trust offers seventy-three portfolios. This report includes the following portfolios:
PowerShares Aerospace & Defense Portfolio
|
|
"Aerospace & Defense Portfolio"
|
|
|
PowerShares Cleantech
TM
Portfolio
|
|
"Cleantech
TM
Portfolio"
|
|
|
PowerShares DWA Technical Leaders
TM
Portfolio
|
|
"DWA Technical Leaders
TM
Portfolio"
|
|
|
PowerShares Golden Dragon Halter USX
China Portfolio
|
|
"Golden Dragon Halter USX China
Porfolio"
|
|
|
PowerShares Listed Private Equity Portfolio
|
|
"Listed Private Equity Portfolio"
|
|
|
PowerShares Lux Nanotech Portfolio
|
|
"Lux Nanotech Portfolio"
|
|
|
PowerShares S&P 500 BuyWrite Portfolio
|
|
"S&P 500 BuyWrite Portfolio"
|
|
|
PowerShares Value Line Industry
Rotation Portfolio
|
|
"Value Line Industry Rotation
Portfolio"
|
|
|
PowerShares Value Line Timeliness
TM
Select Portfolio
|
|
"Value Line Timeliness
TM
Select
Portfolio"
|
|
|
PowerShares Water Resources Portfolio
|
|
"Water Resources Portfolio"
|
|
|
PowerShares WilderHill Clean Energy Portfolio
|
|
"WilderHill Clean Energy Portfolio"
|
|
|
PowerShares WilderHill Progressive
Energy Portfolio
|
|
"WilderHill Progressive Energy
Portfolio"
|
|
|
Each portfolio (the "Fund" or collectively the "Funds") represents a separate series of the Trust. Each Fund's shares are listed and traded on the American Stock Exchange except for shares of the S&P 500 BuyWrite Portfolio and DWA Technical Leaders
TM
Portfolio. The shares of S&P 500 BuyWrite Portfolio and DWA Technical Leaders
TM
Portfolio are traded on the New York Stock Exchange Arca, Inc. ("NYSE Arca").
The Funds' market prices may differ to some degree from the net asset value of the shares of each Fund. Unlike conventional mutual funds, each Fund issues and redeems shares on a continuous basis, at net asset value, only in a large specified number of shares, each called a "Creation Unit." Creation Units are issued and redeemed generally in-kind for securities included in the relevant index. Except when aggregated in Creation Units, shares are not individually redeemable securities of the Funds. The investment objective of each Fund is to seek investment results that correspond generally to the price and yield (before the Fund's fees and expenses) of the following equity indices:
Fund
|
|
Index
|
|
Aerospace & Defense Portfolio
|
|
SPADE
TM
Defense Index
|
|
|
Cleantech
TM
Portfolio
|
|
Cleantech
TM
Index
|
|
|
DWA Technical Leaders
TM
Portfolio
|
|
Dorsey Wright Technical Leaders
TM
Index
|
|
|
Golden Dragon Halter USX China Portfolio
|
|
Halter USX China Index
SM
|
|
|
Listed Private Equity Portfolio
|
|
Red Rocks Listed Private Equity Index
|
|
|
Lux Nanotech Portfolio
|
|
Lux Nanotech Index
TM
|
|
|
S&P 500 BuyWrite Portfolio
|
|
CBOE S&P 500 BuyWrite Index
|
|
|
72
Notes to Financial Statements (Continued)
PowerShares Exchange-Traded Fund Trust
April 30, 2008
Fund
|
|
Index
|
|
Value Line Industry Rotation Portfolio
|
|
Value Line Industry Rotation Index
|
|
|
Value Line Timeliness
TM
Select Portfolio
|
|
Value Line Timeliness
TM
Select Index
|
|
|
Water Resources Portfolio
|
|
Palisades Water Index
|
|
|
WilderHill Clean Energy Portfolio
|
|
WilderHill Clean Energy Index
|
|
|
WilderHill Progressive Energy Portfolio
|
|
WilderHill Progressive Energy Index
|
|
|
Note 2. Significant Accounting Policies
The preparation of the financial statements in accordance with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts and disclosures in the financial statements, including estimates and assumptions related to taxation. Actual results could differ from these estimates.
A. Security Valuation
Securities, including restricted securities, are valued according to the following policy.
A security listed or traded on an exchange (except convertible bonds) is valued at its last sales price or official closing price as of the close of the customary trading session on the exchange where the security is principally traded, or lacking any sales or official closing price on a particular day, the security may be valued at the closing bid price on that day. Securities traded in the over-the-counter market are valued based on prices furnished by independent pricing services or market makers. Listed options if no closing price is available are valued at the mean between the last bid and the ask prices from the exchange on which they are principally traded. Options not listed on an exchange are valued by an independent source at the mean between the last bid and ask prices.
Investments in open-end registered investment companies are valued at the end of day net asset value per share.
Debt obligations (including convertible bonds) and unlisted equities are fair valued using an evaluated quote provided by an independent pricing service. Evaluated quotes provided by the pricing service may be determined without exclusive reliance on quoted prices, and may reflect appropriate factors such as institution-size trading in similar groups of securities, developments related to specific securities, dividend rate, yield, quality, type of issue, coupon rate, maturity, individual trading characteristics and other market data. Short-term obligations, including commercial paper, having 60 days or less to maturity are recorded at amortized cost which approximates value. Debt securities are subject to interest rate and credit risks. In addition, all debt securities involve some risk of default with respect to interest and/or principal payments.
Foreign securities (including foreign exchange contracts) are converted into U.S. dollar amounts using the applicable exchange rates as of the close of the London world markets. If market quotations are available and reliable for foreign exchange traded equity securities, the securities will be valued at the market quotations. Because trading hours for certain foreign securities end before the close of the NYSE, closing market quotations may become unreliable. If between the time trading ends on a particular security and the close of the customary trading session on the NYSE, events occur that are significant and may make the closing price unreliable, the Fund may fair value the security. If the event is likely to have affected the closing price of the security, the security will be valued at fair value in good faith using procedures
73
Notes to Financial Statements (Continued)
PowerShares Exchange-Traded Fund Trust
April 30, 2008
approved by the Board of Trustees. Adjustments to closing prices to reflect fair value may also be based on a screening process of an independent pricing service to indicate the degree of certainty, based on historical data, that the closing price in the principal market where a foreign security trades is not the current value as of the close of the NYSE. Foreign securities meeting the approved degree of certainty that the price is not reflective of current value will be priced at the indication of fair value from the independent pricing service. Multiple factors may be considered by the independent pricing service in determining adjustments to reflect fair value and may include information relating to sector indices, ADRs and domestic and foreign index futures. Foreign securities may have additional risks including exchange rate changes, potential for sharply devalued currencies and high inflation, political and economic upheaval, the relative lack of issuer information, relatively low market liquidity and the potential lack of strict financial and accounting controls and standards.
Securities for which market prices are not provided by any of the above methods may be valued based upon quotes furnished by independent sources.
Securities for which market quotations are not readily available or are unreliable are valued at fair value as determined in good faith by or under the supervision of the Trust's officers following procedures approved by the Board of Trustees. Issuer specific events, market trends, bid/ask quotes of brokers and information providers and other market data may be reviewed in the course of making a good faith determination of a security's fair value.
Valuations change in response to many factors including the historical and prospective earnings of the issuer, the value of the issuer's assets, general economic conditions, interest rates, investor perceptions and market liquidity.
B. Other Risks
The Funds may concentrate investments in a comparatively narrow segment of the economy. Consequently, such Fund may tend to be more volatile than other funds, and the value of investments may tend to rise and fall more rapidly.
Investments in the securities of non-U.S. issuers may have greater risk than those investments in U.S. securities. Investments in securities denominated in foreign currencies are subject to risk of adverse changes in currency exchange rates which may negatively impact returns. The risk can also be associated with the level of development of the economies of the countries in a specific region.
There are certain risks inherent in investing in listed private equity companies, which encompass financial institutions or vehicles whose principal business is to invest in and lend capital to privately-held companies. Generally, little public information exists for private and thinly traded companies and there is a risk that investors may not be able to make a fully informed investment decision. Investments made by listed private equity companies are generally subject to legal and other restrictions on resale and are otherwise less liquid than publicly-traded securities. The illiquidity of these investments may make it difficult to sell such investments if the need arises, and if there is a need for a listed private equity company in which the Fund invests to liquidate its portfolio quickly, it may realize a loss on its investments. Since many of the assets of listed private equity companies do not have readily ascertainable market values, such assets are most often recorded at fair value, in good faith, in accordance with valuation procedures adopted by such companies.
74
Notes to Financial Statements (Continued)
PowerShares Exchange-Traded Fund Trust
April 30, 2008
When investing in securities of a limited number of companies, each investment has a greater effect on the Fund's overall performance, and any change in the value of those securities could significantly affect the value of your investment in the Fund.
C. Federal Income Taxes
Each Fund intends to comply with the provisions of the Internal Revenue Code applicable to regulated investment companies and will distribute substantially all of the Fund's taxable earnings to its shareholders. As such, the Funds will not be subject to Federal income taxes on otherwise taxable income (including net realized gains) that is distributed to the shareholders. Therefore, no provision for Federal income taxes is included.
Income and capital gain distributions are determined in accordance with Federal income tax regulations, which may differ from accounting principles generally accepted in the United States. These differences are primarily due to differing book and tax treatments for in-kind transactions, losses deferred due to wash sales, and Passive Foreign Investment Company adjustments, if any.
The Funds file tax returns in the U.S. Federal jurisdiction and certain other jurisdictions. Generally a Fund is subject to examinations by such taxing authorities for up to three years after the filing of the return for the tax period.
D. Investment Income and Investment Transactions
Dividend income is recorded on the ex-dividend date net of foreign taxes withheld, if any. Interest income is recorded on the accrual basis. Investment transactions are recorded on the trade date. Realized gains and losses from the sale or disposition of securities are calculated on the specific identified cost basis. Dividends and interest received by a Fund may give rise to withholding and other taxes imposed by foreign countries. Corporate actions (including cash dividends) are recorded net of non-reclaimable foreign tax withholdings on the ex-dividend date. Tax conventions between certain countries and the United States may reduce or eliminate such taxes.
E. Expenses
Expenses of the Trust, which are directly identifiable to a specific Fund, are applied to that Fund. Expenses which are not readily identifiable to a specific Fund are allocated in such a manner as deemed equitable, taking into consideration the nature and type of expense and the relative net assets of each Fund.
Each Fund (except for S&P 500 BuyWrite Portfolio) is responsible for all of its expenses, including the investment advisory fees, costs of transfer agency, custody, fund administration, legal, audit and other services, interest, taxes, brokerage commissions and other expenses connected with executions of portfolio transactions, any distribution fees or expenses and extraordinary expenses.
The S&P 500 BuyWrite Portfolio has agreed to pay an annual unitary management fee to the Invesco PowerShares Capital Management LLC ("the Adviser") (formerly PowerShares Capital Management LLC). Whereby, the Adviser has agreed to pay substantially all expenses of the S&P 500 BuyWrite Portfolio, including the cost of transfer agency, custody, fund administration, legal, audit and other services, except for advisory fees and distribution fees, brokerage expenses, taxes, interest and other extraordinary expenses, if any.
75
Notes to Financial Statements (Continued)
PowerShares Exchange-Traded Fund Trust
April 30, 2008
F. Dividends and Distributions to Shareholders
Each Fund declares and pays dividends from net investment income, if any, to its shareholders quarterly and distributes net realized taxable capital gains, if any, annually in cash. Such distributions on a tax basis are determined in conformity with income tax regulations which may differ from accounting principles generally accepted in the United States of America. Distributions in excess of tax basis earnings and profits, if any, are reported in such Fund's financial statements as a tax return of capital at fiscal period end.
G. Equalization
All Funds use the accounting practice of equalization. This accounting method is used to keep the continuing shareholder's per share equity in undistributed net investment income from being affected by the continuous sales and redemptions of capital shares. Equalization is calculated on a per share basis whereby a portion of the proceeds from the sales and cost of repurchases of capital shares is applied to undistributed net investment income. The amount of equalization is disclosed in the Statements of Changes in Net Assets as undistributed net investment income included in the price of capital shares issued or redeemed. The distributions to shareholders of amounts so applied may be deemed to be a return of capital for tax purposes to the extent that such distributions exceed taxable income.
H. Option Contracts Written
The S&P 500 BuyWrite Portfolio may write (sell) call options against the portfolio through a "buy-write" strategy. A "buy-write," also called a covered call, generally is considered to be an investment strategy in which an investor buys a stock or basket of stocks, and also sells call options that correspond to the stock or basket of stocks. When the Fund writes (sells) call options, the amount of the premium received is recorded as a liability and is subsequently adjusted to the current fair value of the option written, the Fund gives the right to the purchaser of the option written by the Fund to receive a cash payment equal to the difference between the value of the S&P 500 Index and the exercise price, if the value on the expiration date is above the exercise price. By writing written options, in return for the receipt of premiums, the Fund gives up the opportunity during the term of the option to profit from any price increase in the S&P 500 Index above the option exercise price. In addition, covered call options partially hedge against a decline in the price of the securities on which they are written to the extent of the premium received by the Fund. Therefore, the Fund, by writing covered call options, will give up the opportunity to benefit from potential increases in the value of the S&P 500 Index above the exercise prices of the written options, but will continue to bear the risk of declines in the value of the S&P 500 Index. The premiums received from the options may not be sufficient to offset any losses sustained from the volatility of the underlying stocks over time. In addition, the Fund's ability to sell the underlying securities will be limited while the option is in effect unless the Fund extinguishes the option position, through the purchase of an offsetting identical option prior to the expiration of the written option.
76
Notes to Financial Statements (Continued)
PowerShares Exchange-Traded Fund Trust
April 30, 2008
|
|
Transactions During the Period
|
|
|
|
Call Option Contracts
|
|
|
|
Number of
Contracts
|
|
Premiums
Received
|
|
Beginning of period
|
|
|
|
|
|
$
|
|
|
|
Written
|
|
|
185
|
|
|
|
477,925
|
|
|
Closed
|
|
|
(56
|
)
|
|
|
(194,483
|
)
|
|
Exercised
|
|
|
|
|
|
|
|
|
|
Expired
|
|
|
(66
|
)
|
|
|
(138,992
|
)
|
|
End of period
|
|
|
63
|
|
|
$
|
144,450
|
|
|
|
|
Open Options Written at Period End
|
|
|
|
Contract
Month
|
|
Strike
Price
|
|
Number of
Contracts
|
|
Premiums
Received
|
|
Value
|
|
Unrealized
Appreciation
(Depreciation)
|
|
Call Option S&P 500 Index
|
|
May-08
|
|
$
|
1,390
|
|
|
|
54
|
|
|
$
|
142,154
|
|
|
$
|
(100,170
|
)
|
|
$
|
41,984
|
|
|
Call Option S&P 500 Mini Index
|
|
May-08
|
|
|
139
|
|
|
|
9
|
|
|
|
2,296
|
|
|
|
(1,701
|
)
|
|
|
595
|
|
|
|
|
|
|
|
|
|
63
|
|
|
$
|
144,450
|
|
|
$
|
(101,871
|
)
|
|
$
|
42,579
|
|
|
Note 3. Investment Advisory Agreement and Other Agreements
The Trust has entered into an Investment Advisory Agreement with the Adviser under which the Adviser has overall responsibility as the Funds' investment adviser for the selection and ongoing monitoring of the Funds' investments, managing the Funds' business affairs and providing certain clerical, bookkeeping and other administrative services. Each Fund (other than the S&P 500 BuyWrite Portfolio) has agreed to pay an annual fee of 0.50% of the Fund's average daily net assets. The S&P 500 BuyWrite Portfolio has agreed to pay an annual unitary management fee of 0.75% of its average daily net assets and the Adviser has agreed to pay substantially all expenses of the S&P 500 BuyWrite Portfolio, including the cost of transfer agency, custody, fund administration, legal, audit and other services, except for advisory fees and distribution fees, brokerage expenses, taxes, interest and other extraordinary expenses, if any.
The Adviser has entered into an Amended and Restated Excess Expense Agreement ("Excess Expense Agreement") with the Trust, under which the Adviser has agreed to waive fees and/or pay Fund expenses to the extent necessary to prevent the operating expenses of the Funds (other than the S&P 500 BuyWrite Portfolio) (excluding interest expense, brokerage commissions and other trading expenses, sub-licensing fees, offering costs, taxes and extraordinary expenses) from exceeding 0.60% of average daily net assets per year (the "Expense Cap"), at least until August 30, 2009. Offering costs excluded from the Expense Cap are: (a) legal fees pertaining to the Funds' shares offered for sale; (b) Securities and Exchange Commission and state registration fees; and (c) initial fees paid to be listed on an exchange.
For each Fund other than the S&P 500 BuyWrite Portfolio, the Excess Expense Agreement provides that the expenses borne by the Adviser are subject to recapture by the Adviser for up to three years from the date the fee or expense was borne by the Adviser, but no recapture payment will be made by a Fund if it would result in the Fund exceeding its Expense Cap as specified above. The Excess Expense Agreement
77
Notes to Financial Statements (Continued)
PowerShares Exchange-Traded Fund Trust
April 30, 2008
does not apply to the S&P 500 BuyWrite Portfolio. Accordingly, expenses of this Fund borne by the Adviser are not subject to recapture.
The net amount of fees waived and other expenses assumed by the Adviser and the amount of recapture paid to the Adviser pursuant to the Excess Expense Agreement are collectively referred to as 'Waivers and/or Recapture'.
During the period ended April 30, 2008, the amount of 'Waivers and/or Recapture' was as follows:
|
|
(Waivers) and/or
Recapture
|
|
Aerospace & Defense Portfolio
|
|
$
|
68,771
|
|
|
CleantechTM Portfolio
|
|
|
(57,076
|
)
|
|
DWA Technical Leaders
TM
Portfolio
|
|
|
52,829
|
|
|
Golden Dragon Halter USX China Portfolio
|
|
|
204,381
|
|
|
Listed Private Equity Portfolio
|
|
|
(8,102
|
)
|
|
Lux Nanotech Portfolio
|
|
|
(39,701
|
)
|
|
Value Line Industry Rotation Portfolio
|
|
|
(86,494
|
)
|
|
Value Line Timeliness
TM
Select Portfolio
|
|
|
4,989
|
|
|
Water Resources Portfolio
|
|
|
139,671
|
|
|
WilderHill Clean Energy Portfolio
|
|
|
(7,102
|
)
|
|
WilderHill Progressive Energy Portfolio
|
|
|
(71,221
|
)
|
|
The net amounts of (Waivers) and/or Recapture are also shown on the Statements of Operations.
The amounts available for potential future recapture by the Adviser under the Excess Expense Agreement and the expiration schedule at April 30, 2008 are as follows:
|
|
Total Potential
|
|
Potential Recapture Amounts Expiring
|
|
|
|
Recapture Amount
|
|
04/30/09
|
|
04/30/10
|
|
04/30/11
|
|
Aerospace & Defense Portfolio
|
|
$
|
84,727
|
|
|
$
|
|
|
|
$
|
72,874
|
|
|
$
|
11,853
|
|
|
CleantechTM Portfolio
|
|
|
105,241
|
|
|
|
|
|
|
|
47,553
|
|
|
|
57,688
|
|
|
DWA Technical Leaders
TM
Portfolio
|
|
|
21,651
|
|
|
|
|
|
|
|
|
|
|
|
21,651
|
|
|
Golden Dragon Halter USX China Portfolio
|
|
|
41,317
|
|
|
|
|
|
|
|
4,806
|
|
|
|
36,511
|
|
|
Listed Private Equity Portfolio
|
|
|
50,724
|
|
|
|
|
|
|
|
26,323
|
|
|
|
24,401
|
|
|
Lux Nanotech Portfolio
|
|
|
178,818
|
|
|
|
31,393
|
|
|
|
106,036
|
|
|
|
41,389
|
|
|
Value Line Industry Rotation Portfolio
|
|
|
|
|
|
|
126,596
|
|
|
|
34,558
|
|
|
|
92,038
|
|
|
Value Line Timeliness
TM
Select Portfolio
|
|
|
110,515
|
|
|
|
|
|
|
|
86,184
|
|
|
|
24,331
|
|
|
Water Resources Portfolio
|
|
|
75,183
|
|
|
|
|
|
|
|
|
|
|
|
75,183
|
|
|
WilderHill Clean Energy Portfolio
|
|
|
90,755
|
|
|
|
|
|
|
|
|
|
|
|
90,755
|
|
|
WilderHill Progressive Energy Portfolio
|
|
|
118,588
|
|
|
|
|
|
|
|
39,456
|
|
|
|
79,132
|
|
|
Distribution Agreement
The Trust has entered into a Distribution Agreement with Invesco Aim Distributors, Inc. (formerly A I M Distributors, Inc.) (the "Distributor") which serves as the Distributor of Creation Units for each Fund. The Distributor does not maintain a secondary market in Shares.
78
Notes to Financial Statements (Continued)
PowerShares Exchange-Traded Fund Trust
April 30, 2008
Licensing Fee Agreements
The Adviser has entered into licensing agreements for each Fund with the following Licensor:
Fund
|
|
Licensor
|
|
Aerospace & Defense Portfolio
|
|
International Space Business Council
|
|
|
Cleantech
TM
Portfolio
|
|
Cleantech Capital Indices, LLC
|
|
|
DWA Technical Leaders
TM
Portfolio
|
|
Dorsey, Wright & Associates, Inc.
|
|
|
Golden Dragon Halter USX China Portfolio
|
|
Halter Financial Group
|
|
|
Listed Private Equity Portfolio
|
|
Red Rocks Capital Partners, LLC
|
|
|
Lux Nanotech Portfolio
|
|
Lux Research, Inc.
|
|
|
S&P 500 BuyWrite Portfolio
|
|
Standard & Poor's ("S&P"), a division of
The McGraw-Hill Companies, Inc.
|
|
|
Value Line Industry Rotation Portfolio
|
|
Value Line Publishing, Inc.
|
|
|
Value Line Timeliness
TM
Select Portfolio
|
|
Value Line Publishing, Inc.
|
|
|
Water Resources Portfolio
|
|
Palisades Water Index Associates, LLC
|
|
|
WilderHill Clean Energy Portfolio
|
|
WilderShares, LLC
|
|
|
WilderHill Progressive Energy Portfolio
|
|
WilderShares, LLC
|
|
|
The above trademarks are owned by the respective Licensors. These trademarks have been licensed to the Adviser for use with the Funds. The Funds are not sponsored, endorsed, sold or promoted by the Licensors and the Licensors make no representation regarding the advisability of investing in any of these Funds. The Funds are required to pay the sub-licensing fees which are shown on the Statements of Operations.
The Bank of New York, a wholly-owned subsidiary of The Bank of New York Mellon Corporation, serves as the administrator, custodian and fund accounting and transfer agent for each Fund.
The custodian has agreed to provide overdraft protection to the Funds according to the terms of the service agreement.
Note 4. Investments in Affiliates
The 1940 Act defines "affiliate" to include issuers of which a fund holds 5% or more of the outstanding voting securities. The following is a summary of the transactions with affiliates for the year ended April 30, 2008.
79
Notes to Financial Statements (Continued)
PowerShares Exchange-Traded Fund Trust
April 30, 2008
Lux Nanotech Portfolio
|
|
Value
4/30/07
|
|
Purchases at
Cost
|
|
Proceeds from
Sales
|
|
Change in
Unrealized
Appreciation
(Depreciation)
|
|
Value
04/30/08
|
|
Dividend
Income
|
|
Realized
Gain (Loss)
|
|
Biosante
Pharmaceuticals,
Inc.
|
|
$
|
|
|
|
$
|
5,086,786
|
|
|
$
|
(81,622
|
)
|
|
$
|
(565,228
|
)
|
|
$
|
4,439,935
|
|
|
$
|
|
|
|
$
|
20,930
|
|
|
Luna Innovations,
Inc.
|
|
|
|
|
|
|
3,727,745
|
|
|
|
(66,647
|
)
|
|
|
(254,378
|
)
|
|
|
3,406,720
|
|
|
|
|
|
|
|
21,081
|
|
|
Nanophase
Technologies
Corp.
|
|
|
8,793,107
|
|
|
|
3,304,412
|
|
|
|
(4,025,580
|
)
|
|
|
(4,208,356
|
)
|
|
|
3,863,583
|
|
|
|
|
|
|
|
(131,310
|
)
|
|
NVE Corp.
|
|
|
7,239,341
|
|
|
|
2,202,099
|
|
|
|
(5,241,918
|
)
|
|
|
1,111,975
|
|
|
|
5,311,497
|
|
|
|
|
|
|
|
1,216,524
|
|
|
Total Investments
in Affiliates
|
|
|
16,032,448
|
|
|
|
14,321,042
|
|
|
|
(9,415,767
|
)
|
|
|
(3,915,987
|
)
|
|
|
17,021,735
|
|
|
|
|
|
|
|
1,127,225
|
|
|
Water Resources Portfolio
Ameron
International
Corp.
|
|
|
26,644,689
|
|
|
|
40,757,130
|
|
|
|
(8,465,816
|
)
|
|
|
10,643,303
|
|
|
|
69,579,307
|
|
|
|
666,051
|
|
|
|
890,517
|
|
|
Badger Meter, Inc.
|
|
|
32,146,128
|
|
|
|
2,781,508
|
|
|
|
(3,415,539
|
)
|
|
|
36,362,085
|
|
|
|
67,874,182
|
|
|
|
456,138
|
|
|
|
(308,917
|
)
|
|
Calgon
Carbon Corp.
|
|
|
30,459,259
|
|
|
|
2,434,044
|
|
|
|
(5,106,901
|
)
|
|
|
23,442,263
|
|
|
|
51,228,665
|
|
|
|
|
|
|
|
1,629,026
|
|
|
Consolidated Water
Co., Inc.
(Cayman
Islands)
|
|
|
29,548,749
|
|
|
|
7,654,569
|
|
|
|
(11,943,150
|
)
|
|
|
(3,666,174
|
)
|
|
|
21,593,994
|
|
|
|
307,701
|
|
|
|
(1,715,212
|
)
|
|
Franklin Electric
Co., Inc.
|
|
|
43,535,711
|
|
|
|
35,199,130
|
|
|
|
(8,579,605
|
)
|
|
|
(7,260,598
|
)
|
|
|
62,894,638
|
|
|
|
656,872
|
|
|
|
(1,980,960
|
)
|
|
Gorman-Rupp
(The) Co.
|
|
|
22,030,775
|
|
|
|
23,519,195
|
|
|
|
(2,757,290
|
)
|
|
|
11,337,077
|
|
|
|
54,129,757
|
|
|
|
428,575
|
|
|
|
362,133
|
|
|
Insituform
Technologies,
Inc., Class A
|
|
|
40,080,492
|
|
|
|
17,725,120
|
|
|
|
(6,668,816
|
)
|
|
|
(9,349,878
|
)
|
|
|
41,786,918
|
|
|
|
|
|
|
|
(3,676,217
|
)
|
|
Layne
Christensen Co.
|
|
|
54,785,317
|
|
|
|
21,130,264
|
|
|
|
(14,395,831
|
)
|
|
|
8,990,163
|
|
|
|
70,509,913
|
|
|
|
|
|
|
|
5,342,098
|
|
|
Lindsay Corp.
|
|
|
33,398,054
|
|
|
|
3,546,632
|
|
|
|
(24,064,172
|
)
|
|
|
77,671,089
|
|
|
|
90,551,603
|
|
|
|
292,127
|
|
|
|
15,964,318
|
|
|
Mueller Water
Products, Inc.,
Class B
|
|
|
49,627,513
|
|
|
|
49,223,051
|
|
|
|
(14,004,778
|
)
|
|
|
(29,860,111
|
)
|
|
|
54,985,675
|
|
|
|
319,940
|
|
|
|
(445,855
|
)
|
|
Southwest
Water Co.
|
|
|
31,191,279
|
|
|
|
1,579,842
|
|
|
|
(5,686,362
|
)
|
|
|
(5,475,955
|
)
|
|
|
21,608,804
|
|
|
|
518,417
|
|
|
|
(2,024,552
|
)
|
|
Tetra Tech, Inc.
|
|
|
71,993,291
|
|
|
|
53,450,572
|
|
|
|
(24,920,205
|
)
|
|
|
889,691
|
|
|
|
101,413,350
|
|
|
|
|
|
|
|
1,041,216
|
|
|
Watts Water
Technologies,
Inc., Class A
|
|
|
51,171,183
|
|
|
|
36,993,102
|
|
|
|
(10,635,802
|
)
|
|
|
(23,295,580
|
)
|
|
|
54,232,903
|
|
|
|
719,956
|
|
|
|
(2,630,681
|
)
|
|
Total Investments
in Affiliates
|
|
|
516,612,440
|
|
|
|
295,994,159
|
|
|
|
(140,644,267
|
)
|
|
|
90,427,375
|
|
|
|
762,389,709
|
|
|
|
4,365,777
|
|
|
|
12,446,914
|
|
|
80
Notes to Financial Statements (Continued)
PowerShares Exchange-Traded Fund Trust
April 30, 2008
WilderHill Clean Energy Portfolio
|
|
Value
4/30/07
|
|
Purchases at
Cost
|
|
Proceeds from
Sales
|
|
Change in
Unrealized
Appreciation
(Depreciation)
|
|
Value
04/30/08
|
|
Dividend
Income
|
|
Realized
Gain (Loss)
|
|
Active Power, Inc.
|
|
$
|
4,446,875
|
|
|
$
|
7,628,758
|
|
|
$
|
(3,813,674
|
)
|
|
$
|
(2,088,943
|
)
|
|
$
|
6,173,016
|
|
|
$
|
|
|
|
$
|
(1,285,519
|
)
|
|
Amerigon, Inc.
|
|
|
|
|
|
|
45,468,980
|
|
|
|
(11,897,196
|
)
|
|
|
(9,869,764
|
)
|
|
|
23,702,020
|
|
|
|
|
|
|
|
(2,428,210
|
)
|
|
Ballard Power
Systems, Inc.
|
|
|
16,550,775
|
|
|
|
33,323,648
|
|
|
|
(15,163,405
|
)
|
|
|
(7,984,578
|
)
|
|
|
26,726,440
|
|
|
|
|
|
|
|
(4,642,586
|
)
|
|
China BAK
Battery, Inc.
|
|
|
|
|
|
|
28,190,268
|
|
|
|
(1,063,887
|
)
|
|
|
(9,598,221
|
)
|
|
|
17,528,160
|
|
|
|
|
|
|
|
41,983
|
|
|
Comverge, Inc.
|
|
|
|
|
|
|
57,577,351
|
|
|
|
(5,128,913
|
)
|
|
|
(31,026,010
|
)
|
|
|
21,422,428
|
|
|
|
|
|
|
|
(267,167
|
)
|
|
Echelon Corp.
|
|
|
34,761,426
|
|
|
|
49,865,285
|
|
|
|
(40,983,252
|
)
|
|
|
(8,028,394
|
)
|
|
|
35,615,065
|
|
|
|
|
|
|
|
20,112,781
|
|
|
Emcore Corp.
|
|
|
23,887,042
|
|
|
|
543,393
|
|
|
|
(2,394,452
|
)
|
|
|
6,663,733
|
|
|
|
28,699,716
|
|
|
|
|
|
|
|
(756,021
|
)
|
|
Fuel Systems
Solutions, Inc.
|
|
|
24,616,050
|
|
|
|
1,214,185
|
|
|
|
(3,675,048
|
)
|
|
|
2,085,381
|
|
|
|
24,240,568
|
|
|
|
|
|
|
|
(1,675,365
|
)
|
|
FuelCell
Energy, Inc.
|
|
|
15,741,912
|
|
|
|
30,306,275
|
|
|
|
(12,518,371
|
)
|
|
|
2,854,225
|
|
|
|
36,384,041
|
|
|
|
|
|
|
|
1,162,899
|
|
|
Maxwell
Technologies,
Inc.
|
|
|
19,578,194
|
|
|
|
5,648,010
|
|
|
|
(3,817,533
|
)
|
|
|
(2,807,084
|
)
|
|
|
18,601,587
|
|
|
|
|
|
|
|
(3,009,815
|
)
|
|
Medis
Technologies,
Ltd.
|
|
|
16,788,999
|
|
|
|
24,978,887
|
|
|
|
(1,488,174
|
)
|
|
|
(16,149,904
|
)
|
|
|
24,129,808
|
|
|
|
|
|
|
|
(671,845
|
)
|
|
Pacific Ethanol,
Inc.
|
|
|
20,482,001
|
|
|
|
24,985,410
|
|
|
|
(3,316,959
|
)
|
|
|
(29,749,376
|
)
|
|
|
12,401,076
|
|
|
|
|
|
|
|
(3,378,370
|
)
|
|
Plug Power, Inc.
|
|
|
19,171,094
|
|
|
|
13,673,093
|
|
|
|
(7,634,332
|
)
|
|
|
24,278
|
|
|
|
25,234,133
|
|
|
|
|
|
|
|
(2,082,445
|
)
|
|
Ultralife
Batteries, Inc.
|
|
|
4,185,225
|
|
|
|
18,735,010
|
|
|
|
(1,146,949
|
)
|
|
|
(7,783,198
|
)
|
|
|
13,990,088
|
|
|
|
|
|
|
|
2,250
|
|
|
Universal Display
Corp.
|
|
|
28,813,854
|
|
|
|
32,057,902
|
|
|
|
(16,752,435
|
)
|
|
|
(5,203,148
|
)
|
|
|
38,916,173
|
|
|
|
|
|
|
|
(870,154
|
)
|
|
Verenium Corp.*
|
|
|
24,328,146
|
|
|
|
16,719,104
|
|
|
|
(4,543,953
|
)
|
|
|
(19,654,544
|
)
|
|
|
16,848,753
|
|
|
|
|
|
|
|
(1,371,732
|
)
|
|
Zoltek Cos., Inc.
|
|
|
25,143,623
|
|
|
|
46,119,586
|
|
|
|
(13,145,046
|
)
|
|
|
(14,478,336
|
)
|
|
|
43,639,827
|
|
|
|
|
|
|
|
4,132,109
|
|
|
Total Investments
in Affiliates
|
|
|
278,495,216
|
|
|
|
437,035,145
|
|
|
|
(148,483,579
|
)
|
|
|
(152,793,883
|
)
|
|
|
414,252,899
|
|
|
|
|
|
|
|
3,012,793
|
|
|
* Security formerly known as Diversa Corp.
Note 5. Federal Income Tax
At April 30, 2008, costs of investments on a tax basis including the adjustments for financial reporting purposes as of the most recently completed Federal income tax reporting period were as follows:
Aerospace & Defense Portfolio
|
|
$
|
274,612,642
|
|
|
Cleantech
TM
Portfolio
|
|
|
113,462,422
|
|
|
DWA Technical Leaders
TM
Portfolio
|
|
|
348,014,179
|
|
|
Golden Dragon Halter USX China Portfolio
|
|
|
604,619,842
|
|
|
Listed Private Equity Portfolio
|
|
|
140,991,323
|
|
|
Lux Nanotech Portfolio
|
|
|
109,529,797
|
|
|
S&P 500 BuyWrite Portfolio
|
|
|
7,676,571
|
|
|
Value Line Industry Rotation Portfolio
|
|
|
40,187,983
|
|
|
Value Line Timeliness
TM
Select Portfolio
|
|
|
174,636,325
|
|
|
81
Notes to Financial Statements (Continued)
PowerShares Exchange-Traded Fund Trust
April 30, 2008
Water Resources Portfolio
|
|
$
|
2,097,102,943
|
|
|
WilderHill Clean Energy Portfolio
|
|
|
1,689,691,038
|
|
|
WilderHill Progressive Energy Portfolio
|
|
|
60,586,308
|
|
|
At April 30, 2008, the components of accumulated earnings/loss on a tax basis were as follows:
|
|
Accumulated
Earnings
|
|
Net Accumulated
Capital and other
Gains/Losses
|
|
Unrealized
Appreciation/
Depreciation
|
|
Gross Unrealized
Appreciation
|
|
Gross Unrealized
Depreciation
|
|
Total Accumulated
Earnings/Loss
|
|
Aerospace & Defense Portfolio
|
|
$
|
215,472
|
|
|
$
|
(2,478,965
|
)
|
|
$
|
(17,422,118
|
)
|
|
$
|
7,607,242
|
|
|
$
|
(25,029,360
|
)
|
|
$
|
(19,685,611
|
)
|
|
Cleantech
TM
Portfolio
|
|
|
|
|
|
|
(1,171,839
|
)
|
|
|
906,794
|
|
|
|
8,949,455
|
|
|
|
(8,042,661
|
)
|
|
|
(265,045
|
)
|
|
DWA Technical
Leaders
TM
Portfolio
|
|
|
|
|
|
|
(5,046,566
|
)
|
|
|
15,572,442
|
|
|
|
23,582,651
|
|
|
|
(8,010,209
|
)
|
|
|
10,525,876
|
|
|
Golden Dragon Halter USX
China Portfolio
|
|
|
|
|
|
|
(5,382,727
|
)
|
|
|
(77,828,672
|
)
|
|
|
26,987,746
|
|
|
|
(104,816,418
|
)
|
|
|
(83,211,399
|
)
|
|
Listed Private Equity Portfolio
|
|
|
469,435
|
|
|
|
(4,388,498
|
)
|
|
|
(38,251,065
|
)
|
|
|
4,574,130
|
|
|
|
(42,825,195
|
)
|
|
|
(42,170,128
|
)
|
|
Lux Nanotech Portfolio
|
|
|
|
|
|
|
(4,779,985
|
)
|
|
|
(25,496,886
|
)
|
|
|
4,617,295
|
|
|
|
(30,114,181
|
)
|
|
|
(30,276,871
|
)
|
|
S&P 500 BuyWrite Portfolio
|
|
|
127,888
|
|
|
|
|
|
|
|
(42,579
|
)
|
|
|
213,967
|
|
|
|
(256,546
|
)
|
|
|
85,309
|
|
|
Value Line Industry
Rotation Portfolio
|
|
|
|
|
|
|
(3,798,072
|
)
|
|
|
1,724,280
|
|
|
|
3,646,520
|
|
|
|
(1,922,240
|
)
|
|
|
(2,073,792
|
)
|
|
Value Line Timeliness
TM
Select Portfolio
|
|
|
|
|
|
|
(49,767,441
|
)
|
|
|
3,169,193
|
|
|
|
14,534,028
|
|
|
|
(11,364,835
|
)
|
|
|
(46,598,248
|
)
|
|
Water Resources Portfolio
|
|
|
229,824
|
|
|
|
(15,429,970
|
)
|
|
|
92,251,724
|
|
|
|
249,963,898
|
|
|
|
(157,712,174
|
)
|
|
|
77,051,578
|
|
|
WilderHill Clean
Energy Portfolio
|
|
|
|
|
|
|
(136,339,647
|
)
|
|
|
(218,442,032
|
)
|
|
|
111,888,371
|
|
|
|
(330,330,403
|
)
|
|
|
(354,781,679
|
)
|
|
WilderHill Progressive
Energy Portfolio
|
|
|
|
|
|
|
(179,432
|
)
|
|
|
1,583,200
|
|
|
|
6,252,166
|
|
|
|
(4,668,966
|
)
|
|
|
1,403,768
|
|
|
Distributions to Shareholders:
The tax character of distributions paid during the period ended April 30, 2008 was as follows:
|
|
Period ended
April 30, 2008
|
|
Period ended
April 30, 2007
|
|
|
|
Distributions
paid from
Ordinary Income
|
|
Distributions
paid from
Ordinary Income
|
|
Aerospace & Defense Portfolio
|
|
$
|
597,944
|
|
|
$
|
362,663
|
|
|
DWA Technical Leaders(TM) Portfolio
|
|
|
105,514
|
|
|
|
|
|
|
Golden Dragon Halter USX China Portfolio
|
|
|
3,881,852
|
|
|
|
3,191,113
|
|
|
Listed Private Equity Portfolio
(1)
|
|
|
6,147,694
|
|
|
|
689,732
|
|
|
S&P 500 BuyWrite Portfolio
|
|
|
10,500
|
|
|
|
|
|
|
Value Line Industry Rotation Portfolio
|
|
|
19,266
|
|
|
|
2,669
|
|
|
Water Resources Portfolio
|
|
|
7,498,823
|
|
|
|
11,901,149
|
|
|
WilderHill Clean Energy Portfolio
|
|
|
|
|
|
|
1,691,001
|
|
|
WilderHill Progressive Energy Portfolio
|
|
|
193,423
|
|
|
|
14,162
|
|
|
82
Notes to Financial Statements (Continued)
PowerShares Exchange-Traded Fund Trust
April 30, 2008
|
|
Period ended
April 30, 2008
|
|
Period ended
April 30, 2007
|
|
|
|
Distributions
paid from Return
of Capital
|
|
Distributions
paid from Return
of Capital
|
|
Aerospace & Defense Portfolio
|
|
$
|
|
|
|
$
|
25,620
|
|
|
DWA Techical Leaders
TM
Portfolio
|
|
|
57,242
|
|
|
|
|
|
|
Golden Dragon Halter USX China Portfolio
|
|
|
198,502
|
|
|
|
|
|
|
Value Line Industry Rotation Portfolio
|
|
|
1,384
|
|
|
|
4,445
|
|
|
WilderHill Clean Energy Portfolio
|
|
|
|
|
|
|
160,324
|
|
|
WilderHill Progressive Energy Portfolio
|
|
|
9,290
|
|
|
|
|
|
|
At April 30, 2008, for Federal income tax purposes, the Funds have capital loss carryforwards available as shown in the table below, to the extent provided by the regulations, to offset future capital gains through the years indicated. To the extent that these loss carryforwards are used to offset future capital gains, it is probable that the capital gains so offset will not be distributed to shareholders. The use of some portion of the capital loss carryforward by any one fund may be limited by federal tax rules. These rules limit the use of the carryforward when there has been a greater than fifty percent change in ownership of a fund.
|
|
Year of Expiration
|
|
Total
|
|
|
|
2014
|
|
2015
|
|
2016
|
|
Amount
|
|
Aerospace & Defense
Portfolio
|
|
$
|
|
|
|
$
|
104,662
|
|
|
$
|
2,374,303
|
|
|
$
|
2,478,965
|
|
|
Cleantech
TM
Portfolio
|
|
|
|
|
|
|
|
|
|
|
1,171,839
|
|
|
|
1,171,839
|
|
|
DWA Technical Leaders
TM
Portfolio
|
|
|
|
|
|
|
|
|
|
|
5,046,566
|
|
|
|
5,046,566
|
|
|
Golden Dragon Halter USX China Portfolio
|
|
|
1,018,146
|
|
|
|
3,128,677
|
|
|
|
1,235,904
|
|
|
|
5,382,727
|
|
|
Listed Private Equity Portfolio
|
|
|
|
|
|
|
|
|
|
|
4,388,498
|
|
|
|
4,388,498
|
|
|
Lux Nanotech Portfolio
|
|
|
|
|
|
|
3,986,980
|
|
|
|
793,005
|
|
|
|
4,779,985
|
|
|
S&P 500 BuyWrite Portfolio
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Value Line Industry Rotation Portfolio
|
|
|
|
|
|
|
|
|
|
|
3,798,072
|
|
|
|
3,798,072
|
|
|
Value Line Timeliness
TM
Select Portfolio
|
|
|
|
|
|
|
28,753,751
|
|
|
|
21,013,690
|
|
|
|
49,767,441
|
|
|
Water Resources Portfolio
|
|
|
|
|
|
|
11,876,489
|
|
|
|
3,553,481
|
|
|
|
15,429,970
|
|
|
WilderHill Clean Energy Portfolio
|
|
|
2,098,368
|
|
|
|
89,533,576
|
|
|
|
44,707,703
|
|
|
|
136,339,647
|
|
|
WilderHill Progressive Energy Portfolio
|
|
|
|
|
|
|
|
|
|
|
179,432
|
|
|
|
179,432
|
|
|
Capital losses incurred after October 31 ("post-October losses") within the taxable year deemed to arise on the first business day of each Fund's next taxable year.
83
Notes to Financial Statements (Continued)
PowerShares Exchange-Traded Fund Trust
April 30, 2008
During the period ended April 30, 2008, the Funds incurred and will elect to defer net capital losses as follows:
|
|
Post-October
Losses
|
|
Aerospace & Defense Portfolio
|
|
$
|
6,563,375
|
|
|
Cleantech
TM
Portfolio
|
|
|
4,166,271
|
|
|
DWA Technical Leaders
TM
Portfolio
|
|
|
25,948,611
|
|
|
Golden Dragon Halter USX China Portfolio
|
|
|
12,330,853
|
|
|
Listed Private Equity Portfolio
|
|
|
2,929,968
|
|
|
Lux Nanotech Portfolio
|
|
|
12,743,022
|
|
|
S&P 500 BuyWrite Portfolio
|
|
|
46,706
|
|
|
Value Line Industry Rotation Portfolio
|
|
|
3,279,810
|
|
|
Value Line Timeliness
TM
Select Portfolio
|
|
|
20,130,206
|
|
|
Water Resources Portfolio
|
|
|
35,247,744
|
|
|
WilderHill Clean Energy Portfolio
|
|
|
31,930,896
|
|
|
WilderHill Progressive Energy Portfolio
|
|
|
4,392,128
|
|
|
In order to present shares of beneficial interest and accumulated net realized gains or losses on the Statements of Assets and Liabilities that more closely represent their tax character, certain adjustments have been made to shares of beneficial interest, undistributed net investment income or loss and net realized gains or losses on investments. The differences are primarily due to redemptions in-kind, investments in partnerships, wash sales, book equalization and net operating loss, if any. These adjustments have no effect on net assets. For the period ended April 30, 2008, the adjustments were as follows:
|
|
Undistributed
Net Investment
Income (Loss)
|
|
Undistributed
Capital Gains/
(Accumulated
Losses)
|
|
Shares of
Beneficial
Interest
|
|
Aerospace & Defense Portfolio
|
|
$
|
(15,071
|
)
|
|
$
|
(37,559,935
|
)
|
|
|
37,575,006
|
|
|
Cleantech
TM
Portfolio
|
|
|
418,636
|
|
|
|
(11,913,636
|
)
|
|
|
11,495,000
|
|
|
DWA Technical Leaders
TM
Portfolio
|
|
|
(399,679
|
)
|
|
|
(11,541,314
|
)
|
|
|
11,940,993
|
|
|
Golden Dragon Halter USX China Portfolio
|
|
|
330,916
|
|
|
|
(242,082,169
|
)
|
|
|
241,751,253
|
|
|
Listed Private Equity Portfolio
|
|
|
31,376
|
|
|
|
(3,788,532
|
)
|
|
|
3,757,156
|
|
|
Lux Nanotech Portfolio
|
|
|
137,884
|
|
|
|
(5,295,288
|
)
|
|
|
5,157,404
|
|
|
S&P 500 BuyWrite Portfolio
|
|
|
(14,403
|
)
|
|
|
|
|
|
|
14,403
|
|
|
Value Line Industry Rotation Portfolio
|
|
|
7,982
|
|
|
|
(6,141,994
|
)
|
|
|
6,134,012
|
|
|
Value Line Timeliness
TM
Select Portfolio
|
|
|
183,722
|
|
|
|
(44,539,750
|
)
|
|
|
44,356,028
|
|
|
Water Resources Portfolio
|
|
|
(434,907
|
)
|
|
|
(161,583,206
|
)
|
|
|
162,018,113
|
|
|
WilderHill Clean Energy Portfolio
|
|
|
4,854,282
|
|
|
|
(288,477,657
|
)
|
|
|
283,623,375
|
|
|
WilderHill Progressive Energy Portfolio
|
|
|
(13,075
|
)
|
|
|
(2,624,361
|
)
|
|
|
2,637,436
|
|
|
84
Notes to Financial Statements (Continued)
PowerShares Exchange-Traded Fund Trust
April 30, 2008
Note 6. Investment Transactions
For the period ended April 30, 2008, the cost of securities purchased and proceeds from sales of securities, excluding short-term securities, money market funds and in-kind transactions, were as follows:
|
|
Purchases
|
|
Sales
|
|
Aerospace & Defense Portfolio
|
|
$
|
43,633,599
|
|
|
$
|
39,946,318
|
|
|
Cleantech
TM
Portfolio
|
|
|
16,506,636
|
|
|
|
16,895,785
|
|
|
DWA Technical Leaders
TM
Portfolio
|
|
|
180,548,609
|
|
|
|
182,809,292
|
|
|
Golden Dragon Halter USX China Portfolio
|
|
|
95,915,007
|
|
|
|
91,806,915
|
|
|
Listed Private Equity Portfolio
|
|
|
43,450,499
|
|
|
|
40,755,871
|
|
|
Lux Nanotech Portfolio
|
|
|
55,692,308
|
|
|
|
52,820,795
|
|
|
S&P 500 BuyWrite Portfolio
|
|
|
571,234
|
|
|
|
384,318
|
|
|
Value Line Industry Rotation Portfolio
|
|
|
30,137,857
|
|
|
|
30,293,422
|
|
|
Value Line Timeliness
TM
Select Portfolio
|
|
|
210,068,941
|
|
|
|
214,500,712
|
|
|
Water Resources Portfolio
|
|
|
521,881,659
|
|
|
|
444,506,991
|
|
|
WilderHill Clean Energy Portfolio
|
|
|
345,040,776
|
|
|
|
246,935,329
|
|
|
WilderHill Progressive Energy Portfolio
|
|
|
14,784,625
|
|
|
|
16,430,570
|
|
|
For the period ended April 30, 2008, in-kind transactions were as follows:
|
|
Securities Received
|
|
Securities Delivered
|
|
Aerospace & Defense Portfolio
|
|
$
|
302,660,948
|
|
|
$
|
245,119,284
|
|
|
Cleantech
TM
Portfolio
|
|
|
121,565,415
|
|
|
|
36,251,197
|
|
|
DWA Technical Leaders
TM
Portfolio
|
|
|
469,363,922
|
|
|
|
189,587,575
|
|
|
Golden Dragon Halter USX China Portfolio
|
|
|
816,843,690
|
|
|
|
811,440,862
|
|
|
Listed Private Equity Portfolio
|
|
|
74,082,165
|
|
|
|
77,835,487
|
|
|
Lux Nanotech Portfolio
|
|
|
20,657,073
|
|
|
|
73,233,499
|
|
|
S&P 500 BuyWrite Portfolio
|
|
|
7,436,900
|
|
|
|
|
|
|
Value Line Industry Rotation Portfolio
|
|
|
98,688,142
|
|
|
|
89,711,506
|
|
|
Value Line Timeliness
TM
Select Portfolio
|
|
|
410,264,990
|
|
|
|
489,883,361
|
|
|
Water Resources Portfolio
|
|
|
948,783,572
|
|
|
|
553,526,670
|
|
|
WilderHill Clean Energy Portfolio
|
|
|
1,276,335,800
|
|
|
|
823,754,193
|
|
|
WilderHill Progressive Energy Portfolio
|
|
|
65,524,342
|
|
|
|
22,834,966
|
|
|
Gains on in-kind transactions are not considered taxable gains for Federal income tax purposes.
Note 7. Trustees' Fees
The Funds (except for S&P 500 BuyWrite Portfolio) compensate each Trustee on behalf of the Trust who is not an employee of the Trust or its affiliates. With respect to S&P 500 BuyWrite Portfolio, the Adviser, as a result of the unitary management fee, compensates each Trustee on behalf of the Fund. Interested Trustees and Officers of the Trust do not receive any Trustees' fees.
The Trust (has adopted a deferred compensation plan (the "Plan"). Under the Plan, a trustee who is not an "interested person" (as defined in the 1940 Act) and has elected to participate in the Plan (a "participating trustee") may defer receipt of all or a portion of his compensation ("Deferral Fees"). Such Deferred Fees
85
Notes to Financial Statements (Continued)
PowerShares Exchange-Traded Fund Trust
April 30, 2008
are deemed to be invested in selected PowerShares Funds. The Deferral Fees payable to the participating trustee is valued as of the first business dates of each calendar quarter such Fees would have been paid to the participating trustee. The value increases with contributions or with increases in the value of the shares selected, and the value decreases with withdrawals or with declines in the value of the shares selected.
Note 8. Capital
Shares are created and redeemed by the Trust only in Creation Unit size aggregations of 100,000. Only authorized participants are permitted to create or redeem from the Funds. Such transactions are generally permitted on an in-kind basis, with a balancing cash component to equate the transaction to the net asset value per unit of each Fund of the Trust on the transaction date. Cash may be substituted equivalent to the value of certain securities generally when they are not available in sufficient quantity for delivery, not be eligible for trading by the Authorized Participant or as a result of other market circumstances.
Note 9. Indemnifications
Under the Trust's organizational documents, its Officers and Trustees are indemnified against certain liabilities arising out of the performance of their duties to the Trust. Additionally, in the normal course of business, the Trust enters into contracts with service providers that contain general indemnification clauses. The Trust's maximum exposure under these arrangements is unknown, as this would involve future claims that may be made against the Trust that have not yet occurred. However, based on experience, the Trust believes the risk of loss to be remote.
Note 10. New Accounting Pronouncement
On September 20, 2006, the FASB released Statement of Financial Accounting Standards No. 157 "Fair Value Measurement" ("FAS 157"). FAS 157 establishes an authoritative definition of fair value, sets out a framework for measuring fair value, and requires additional disclosures about fair-value measurement. The application of FAS 157 is required for fiscal years beginning after November 15, 2007 and interim periods within those fiscal years. Management has assessed the application of FAS 157 to the Funds and has determined that the adoption of FAS 157 is not expected to have a material impact on the Funds. Management intends for the Funds to adopt FAS 157 provisions during the fiscal year ending April 30, 2009.
In March 2008, the Financial Accounting Standards Board (FASB) issued FASB Statement No. 161,
Disclosures about
Derivative Instruments and Hedging Activities.
The standard is intended to improve financial reporting about derivative instruments and hedging activities by requiring enhanced disclosures to enable investors to better understand their effects on an entity's financial position and financial performance. It is effective for financial statements issued for fiscal years beginning after November 15, 2008. Management is currently in the process of determining the impact of the standard on the S&P 500 BuyWrite Portfolio financial statements.
86
Report of Independent Registered Public Accounting Firm
To the Board of Trustees and Shareholders of PowerShares Exchange-Traded Fund Trust:
In our opinion, the accompanying statements of assets and liabilities, including the schedules of investments, and the related statements of operations and of changes in net assets and the financial highlights present fairly, in all material respects, the financial position of each of the portfolios indicated in Note 1 of the financial statements (each a portfolio of PowerShares Exchange-Traded Fund Trust, hereafter referred to as the "Trust") at April 30, 2008, and the results of each of their operations, the changes in each of their net assets, and the financial highlights for each of the periods presented, in conformity with accounting principles generally accepted in the United States of America. These financial statements and financial highlights (hereafter referred to as "financial statements") are the responsibility of the Trust's management; our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these financial statements in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits, which included confirmation of securities at April 30, 2008 by correspondence with the custodian and brokers, provide a reasonable basis for our opinion.
PricewaterhouseCoopers LLP
New York, New York
June 30, 2008
87
Supplemental Information
Federal Income Tax Information
The percentages of investment income (dividend income plus short-term gains, if any) qualify as follows:
|
|
Qualified dividend
income
|
|
Dividends-received
deduction
|
|
Aerospace & Defense Portfolio
|
|
|
100
|
%
|
|
|
100
|
%
|
|
Cleantech(TM) Portfolio
|
|
|
0
|
%
|
|
|
0
|
%
|
|
DWA Technical Leaders(TM) Portfolio
|
|
|
0
|
%
|
|
|
0
|
%
|
|
Golden Dragon Halter USX China Portfolio
|
|
|
100
|
%
|
|
|
0
|
%
|
|
Listed Private Equity Portfolio
|
|
|
100
|
%
|
|
|
100
|
%
|
|
Lux Nanotech Portfolio
|
|
|
0
|
%
|
|
|
0
|
%
|
|
S&P 500 BuyWrite Portfolio
|
|
|
100
|
%
|
|
|
100
|
%
|
|
Value Line Industry Rotation Portfolio
|
|
|
100
|
%
|
|
|
100
|
%
|
|
Value Line Timeliness(TM) Select Portfolio
|
|
|
0
|
%
|
|
|
0
|
%
|
|
Water Resources Portfolio
|
|
|
100
|
%
|
|
|
100
|
%
|
|
WilderHill Clean Energy Portfolio
|
|
|
100
|
%
|
|
|
100
|
%
|
|
WilderHill Progressive Energy Portfolio
|
|
|
100
|
%
|
|
|
100
|
%
|
|
88
Supplemental Information (Continued)
Trustees and Officers
The Trustees who are not affiliated with the Adviser or affiliates of the Adviser ("Independent Trustees") and the Trustee who is affiliated with the Adviser ("Management Trustee") and the executive officers of the Trust, their term of office and length of time served, their principal business occupations during at least the past five years, the number of portfolios in the Fund Complex overseen by each Trustee and the other directorships, if any, held by the Trustee, are shown below.
Name, Address and Age of
Independent Trustees
|
|
Position(s)
with Trust
|
|
Length of
Time
Served*
|
|
Principal
Occupation(s) During
Past 5 Years
|
|
Number of
Portfolios
in Fund
Complex **
Overseen
by Trustees
|
|
Other Directorships
Held by Trustees
|
|
Ronn R. Bagge
(b. 1958)
YQA Capital
Management, LLC
1755 S. Naperville Rd.,
Suite 100
Wheaton, IL 60187
|
|
Trustee
|
|
Since 2003
|
|
YQA Capital Management LLC (July 1998-Present); formerly Owner/CEO of Electronic Dynamic Balancing Co., Inc. (high-speed rotating equipment service provider)
|
|
|
104
|
|
|
None
|
|
|
Marc M. Kole
(b. 1960)
c/o Invesco
PowerShares Capital Management LLC
301
W. Roosevelt Road
Wheaton, IL 60187
|
|
Trustee
|
|
Since 2006
|
|
Assistant Vice President and Controller, Priority Health (September 2005- April 2008); formerly, Interim CFO, Priority Health (July 2006-April 2007);
formerly Senior Vice President of Finance,
United Healthcare (health insurance) (July 2004-July 2005); formerly Senior Vice President of Finance, Oxford Health Plans (June 2000-July 2004)
|
|
|
104
|
|
|
None
|
|
|
* This is the date the Trustee began serving the Trust.
** Fund Complex includes all open-end funds (including all of their Portfolios) advised by the Adviser. At April 30, 2008, the Fund Complex consists of the Trust's 73 Portfolios and three other exchange-traded fund trusts with 31 Portfolios advised by the Adviser.
89
Supplemental Information (Continued)
Trustees and Officers (Continued)
Name, Address and Age of
Independent Trustees
|
|
Position(s)
with Trust
|
|
Length of
Time
Served*
|
|
Principal
Occupation(s) During
Past 5 Years
|
|
Number of
Portfolios
in Fund
Complex **
Overseen
by Trustees
|
|
Other Directorships
Held by Trustees
|
|
D. Mark McMillan (b. 1963)
c/o Invesco
PowerShares Capital Management LLC
301
W. Roosevelt Road
Wheaton, IL 60187
|
|
Trustee
|
|
Since 2003
|
|
Partner, Bell, Boyd & Lloyd LLP (1989 Present)
|
|
|
104
|
|
|
None
|
|
|
Philip M. Nussbaum (b. 1961)
c/o Invesco
PowerShares Capital Management LLC
301 W. Roosevelt Road Wheaton, IL 60187
|
|
Trustee
|
|
Since 2003
|
|
Chairman, Performance Trust Capital Partners (formerly Betzold, Berg, Nussbaum & Heitman, Inc.) (November 2004-Present); formerly Managing Director, Communication Institute (May 2002 August 2003); formerly Executive Vice President of Finance, Betzold, Berg, Nussbaum & Heitman, Inc. (March 1994-1999)
|
|
|
104
|
|
|
None
|
|
|
* This is the date the Trustee began serving the Trust.
** Fund Complex includes all open-end funds (including all of their Portfolios) advised by the Adviser. At April 30, 2008, the Fund Complex consists of the Trust's 73 Portfolios and three other exchange-traded fund trusts with 31 Portfolios advised by the Adviser.
90
Supplemental Information (Continued)
Trustees and Officers (Continued)
Name, Address and Age of
Independent Trustees
|
|
Position(s)
with Trust
|
|
Length of
Time
Served*
|
|
Principal
Occupation(s) During
Past 5 Years
|
|
Number of
Portfolios
in Fund
Complex **
Overseen
by Trustees
|
|
Other Directorships
Held by Trustees
|
|
Donald H. Wilson
(b. 1960)
c/o Invesco
PowerShares Capital Management LLC
301 W. Roosevelt Road Wheaton, IL 60187
|
|
Trustee
|
|
Since 2006
|
|
President, Chief Operating Officer, and Chief Financial Officer, AMCORE Financial, Inc. (bank holding company) (August 2007- Present), formerly, Executive Vice President and Chief Financial Officer, AMCORE Financial, Inc. (February 2006- August 2007); Senior Vice President and Treasurer, Marshall & Ilsley Corp. (bank holding company) (May 1995- February 2006)
|
|
|
104
|
|
|
None
|
|
|
* This is the date the Trustee began serving the Trust.
** Fund Complex includes all open-end funds (including all of their Portfolios) advised by the Adviser. At April 30, 2008, the Fund Complex consists of the Trust's 73 Portfolios and three other exchange-traded fund trusts with 31 Portfolios advised by the Adviser.
91
Supplemental Information (Continued)
Trustees and Officers (Continued)
Name, Address and Age of
Independent Trustees
|
|
Position(s)
with Trust
|
|
Length of
Time
Served*
|
|
Principal
Occupation(s) During
Past 5 Years
|
|
Number of
Portfolios
in Fund
Complex ***
Overseen
by Trustees
|
|
Other Directorships
Held by Trustee
|
|
H. Bruce Bond
(b.1963)**
Invesco PowerShares Capital Management LLC
301 W. Roosevelt Road Wheaton, IL 60187
|
|
Chairman of the Board, Trustee and Chief Executive Officer
|
|
Since 2003
|
|
Managing Director, Invesco
PowerShares Capital Management LLC (August 2002- Present); formerly Manager, Nuveen Investments (April 1998- August 2002)
|
|
|
104
|
|
|
None
|
|
|
Availability of Additional Information About Funds' Trustees
The Statement of Additional Information includes additional information about the Funds' Trustees and is available, without charge, upon request at 800.337.4246.
* This is the date the Management Trustee began serving the Trust.
** Interested person as defined in Section 2(a)(19) of the 1940 Act.
*** Fund Complex includes all open-end funds (including all of their Portfolios) advised by the Adviser. At April 30, 2008, the Fund Complex consists of the Trust's 73 Portfolios and three other exchange-traded fund trusts with 31 Portfolios advised by the Adviser.
92
Supplemental Information (Continued)
Trustees and Officers (Continued)
Name, Address and
Age of Officers
|
|
Position(s)
with Trust
|
|
Length of
Time
Served*
|
|
Principal Occupation(s) During Past 5 Years
|
|
Bruce T. Duncan
(b.
1954)
Invesco
PowerShares Capital Management LLC
301 W. Roosevelt Road Wheaton, IL 60187
|
|
Chief Financial Officer, Treasurer and Secretary
|
|
Chief Financial Officer and Treasurer Since 2006
Secretary Since 2008
|
|
Senior Vice President of Finance, Invesco PowerShares Capital Management LLC (September 2005-Present); Private Practice Attorney (2000-2005); Vice President of Investor Relations, The ServiceMaster Company (1994-2000); Vice President of Taxes, The ServiceMaster Company (1990-2000)
|
|
|
Kevin R. Gustafson
(b.
1965)
Invesco
PowerShares Capital Management LLC
301 W. Roosevelt Road Wheaton, IL 60187
|
|
Chief Compliance Officer
|
|
Since 2004
|
|
General Counsel, Invesco PowerShares Capital Management LLC (September 2004-Present); Chief Compliance Officer, Invesco PowerShares Capital Management LLC (September 2004-April 2008); Attorney, Nyberg & Gustafson (2001-2004); Attorney, Burke, Warren, McKay & Serritella, P.C. (1997-2000)
|
|
|
* This is the period for which the Officers began serving the Trust. Each Officer serves a one year term, until his successor is
elected.
93
Board Considerations Regarding Continuation of Investment
Advisory Agreement
At a meeting held on April 18, 2008, the Board of Trustees of the PowerShares Exchange-Traded Fund Trust (the "Trust"), including the Independent Trustees, unanimously approved the continuation of the Investment Advisory Agreement between Invesco PowerShares Capital Management LLC (the "Adviser") and the Trust for the following 70 series (the "Funds"):
PowerShares Dynamic Market Portfolio
PowerShares Dynamic OTC Portfolio
PowerShares Golden Dragon Halter USX China Portfolio
PowerShares High Yield Equity Dividend Achievers
TM
Portfolio
PowerShares WilderHill Clean Energy Portfolio
PowerShares Dynamic Large Cap Growth Portfolio
PowerShares Dynamic Large Cap Value Portfolio
PowerShares Dynamic Mid Cap Growth Portfolio
PowerShares Dynamic Mid Cap Value Portfolio
PowerShares Dynamic Small Cap Growth Portfolio
PowerShares Dynamic Small Cap Value Portfolio
PowerShares Dynamic Biotechnology & Genome Portfolio
PowerShares Dynamic Food & Beverage Portfolio
PowerShares Dynamic Leisure and Entertainment Portfolio
PowerShares Dynamic Media Portfolio
PowerShares Dynamic Networking Portfolio
PowerShares Dynamic Pharmaceuticals Portfolio
PowerShares Dynamic Semiconductors Portfolio
PowerShares Dynamic Software Portfolio
PowerShares Zacks Micro Cap Portfolio
PowerShares Aerospace & Defense Portfolio
PowerShares Dynamic Hardware & Consumer Electronics Portfolio
PowerShares Dynamic Telecommunications & Wireless Portfolio
PowerShares Value Line Timeliness Select Portfolio
PowerShares Dividend Achievers
TM
Portfolio
PowerShares International Dividend Achievers
TM
Portfolio
PowerShares High Growth Rate Dividend Achievers
TM
Portfolio
PowerShares Zacks Small Cap Portfolio
PowerShares Dynamic Building and Construction Portfolio
PowerShares Dynamic Energy Exploration and Production Portfolio
PowerShares Dynamic Insurance Portfolio
PowerShares Dynamic Oil and Gas Services Portfolio
PowerShares Dynamic Retail Portfolio
PowerShares Dynamic Utilities Portfolio
PowerShares Lux Nanotech Portfolio
PowerShares FTSE RAFI US 1000 Portfolio
PowerShares Water Resources Portfolio
PowerShares Dynamic Energy Sector Portfolio
PowerShares Dynamic Financial Sector Portfolio
PowerShares Dynamic Healthcare Sector Portfolio
PowerShares Dynamic Industrials Sector Portfolio
PowerShares Dynamic Large Cap Portfolio
PowerShares Dynamic MagniQuant Portfolio
PowerShares Dynamic Mid Cap Portfolio
PowerShares Dynamic Small Cap Portfolio
PowerShares Dynamic Technology Sector Portfolio
PowerShares Buyback Achievers
TM
Portfolio
PowerShares FTSE RAFI Basic Materials Sector Portfolio
PowerShares FTSE RAFI Consumer Goods Sector Portfolio
PowerShares FTSE RAFI Consumer Services Sector Portfolio
PowerShares FTSE RAFI Energy Sector Portfolio
PowerShares FTSE RAFI Financials Sector Portfolio
PowerShares FTSE RAFI Health Care Sector Portfolio
PowerShares FTSE RAFI Industrials Sector Portfolio
PowerShares FTSE RAFI Telecommunications & Technology Sector Portfolio
PowerShares FTSE RAFI US 1500 Small-Mid Portfolio
94
Board Considerations Regarding Continuation of Investment
Advisory Agreement (Continued)
PowerShares FTSE RAFI Utilities Sector Portfolio
PowerShares Cleantech Portfolio
PowerShares Dynamic Aggressive Growth Portfolio
PowerShares Dynamic Banking Portfolio
PowerShares Dynamic Basic Materials Sector Portfolio
PowerShares Dynamic Consumer Discretionary Sector Portfolio
PowerShares Dynamic Consumer Staples Sector Portfolio
PowerShares Dynamic Healthcare Services Portfolio
PowerShares Dynamic Deep Value Portfolio
PowerShares Financial Preferred Portfolio
PowerShares Listed Private Equity Portfolio
PowerShares DWA Technical Leaders Portfolio
PowerShares Value Line Industry Rotation Portfolio
PowerShares WilderHill Progressive Energy Portfolio
The Trustees reviewed information from the Adviser describing: (i) the nature, extent and quality of services provided, (ii) the investment performance of the Funds and the Adviser, (iii) the costs of services provided and estimated profits realized by the Adviser, (iv) the extent to which economies of scale are realized as the Funds grow, (v) whether fee levels reflect any possible economies of scale for the benefit of Fund shareholders, (vi) comparisons of services rendered and amounts paid to other registered investment companies and (vii) any benefits realized by the Adviser from its relationship with each Fund. Based on all of the information considered and the conclusions reached, the Board, including the Independent Trustees, determined to approve the continuation of the Investment Advisory Agreement for each Fund listed above. No single factor was determinative in the Board's analysis.
Nature, Extent and Quality of Services.
In evaluating the nature, extent and quality of the Adviser's services, the Trustees reviewed information concerning the functions performed by the Adviser for the Funds, information describing the Adviser's current organization, including operations assistance provided by the Adviser's parent organization, Invesco Ltd., and the background and experience of the persons responsible for the day-to-day management of the Funds. The Trustees reviewed matters related to the Adviser's portfolio transaction policies and procedures. The Trustees reviewed information on the performance of the Funds and the performance of their benchmark indices. The Trustees also reviewed reports on the correlation and tracking error between the underlying index and each Fund's performance and reviewed a report of Ibbotson Associates, a consultant to the Independent Trustees, that analyzed the reasons for any tracking error for certain of the Funds, which the Adviser then applied to its analysis of the tracking error between the underlying index and the performance of each Fund. The Trustees noted that, in each case, the correlation and tracking error was within the range set forth in the registration statement. The Trustees also concluded that each of the Funds is correlated to its underlying index and that the tracking error for each Fund was within a reasonable range in that Fund's particular circumstances.
The Trustees also considered the services provided by the Adviser in its oversight of the Funds' administrator, custodian and transfer agent. They noted the significant amount of time and effort that had been devoted to this oversight function.
Based on their review, the Trustees found that the nature and extent of services provided to the Funds under the Investment Advisory Agreement are appropriate and that the quality is good.
Fees, Expenses and Profitability.
The Trustees reviewed and discussed the information provided by the Adviser on each Fund's expense ratio and the advisory fee, as compared to three categories of comparable
95
Board Considerations Regarding Continuation of Investment
Advisory Agreement (Continued)
funds selected by Lipper Inc., an independent source: exchange-traded index funds ("ETFs"), open-end (non-ETF) index funds and open-end actively-managed funds. The Adviser supplemented the information prepared by Lipper Inc. with data it compiled on expense ratios and advisory fees of newer ETFs that recently commenced operations. The Trustees noted that the annual advisory fee charged to the Funds was identical (0.50% of average net assets), except for the advisory fee for the PowerShares High Yield Equity Dividend Achievers
TM
Portfolio, the PowerShares Dividend Achievers
TM
Portfolio, the PowerShares High Growth Rate Dividend Achievers
TM
Portfolio and the PowerShares International Dividend Achievers
TM
Portfolio (for each of which the annual advisory fee was 0.40% of average net assets), and that the Adviser had agreed to waive the fee and/or pay expenses to the extent necessary to prevent the annual operating expenses of each Fund (excluding interest expenses, licensing fees and offering costs (for all Funds other than the initial two Funds, the PowerShares Dynamic OTC Portfolio and the PowerShares Dynamic Market Portfolio), brokerage commissions and other trading expenses, taxes and extraordinary expenses) from exceeding 0.60% of average net assets (0.50% of average net assets for the PowerShares High Yield Equity Dividend Achievers
TM
Portfolio, the PowerShares Dividend Achievers
TM
Portfolio, the PowerShares High Growth Rate Dividend Achievers
TM
Portfolio and the PowerShares International Dividend Achievers
TM
Portfolio) at least until April 30, 2009. The Trustees noted that the Adviser represented that it does not provide investment management services to clients other than the Trust and other exchange-traded funds overseen by the Board. The Trustees noted that the advisory fees were at the higher end of the ETF peer funds, but were lower than the median of the open-end actively-managed peer funds. The Trustees determined that the advisory fees were reasonable because of the complexity of the indices, which generally require more frequent rebalancing of the portfolios, the distinguishing factors of the Funds, and the higher administrative, operational and management oversight costs for the Adviser. With respect to the Funds' expense ratios, the Trustees noted that the net expense ratios were at the higher end of the ETF peer funds, but were generally lower than the median of the expense ratios of the open-end (non-ETF) index peer funds and the median of the open-end actively-managed peer funds. The Trustees noted that a significant component of the non-advisory fee expenses was the license fees paid by the Funds. The Board concluded that the advisory fee and expense ratio of each Fund are competitive and that the advisory fee for each Fund is reasonable and appropriate in amount in light of the quality of services provided and the expense cap in place.
In conjunction with their review of fees, the Trustees also considered information provided by the Adviser on the revenues received by the Adviser under the Investment Advisory Agreement for each Fund, as well as the fees waived and expenses reimbursed by the Adviser for the Funds. The Trustees reviewed information provided by the Adviser on its profitability as well as any profits realized by the Adviser from its relationship to each Fund. The Trustees concluded that the profitability to the Adviser of the advisory services provided to the Funds is not unreasonable.
Economies of Scale and Whether Fee Levels Reflect These Economies of Scale.
The Trustees reviewed the information provided by the Adviser as to the extent to which economies of scale are realized as each Fund grows and whether fee levels reflect economies of scale for the benefit of shareholders. The Trustees reviewed each Fund's asset size, expense ratio, expense limitation agreed to by the Adviser and whether the investment process produced economies of scale. The Trustees noted that certain fixed costs associated with the management of the Funds are being reduced on a per-Fund basis as additional Funds are added, and that the gradual reduction of the per-Fund cost enabled the Adviser to operate some of the Funds under the expense cap, which potentially would lower the costs to shareholders. The Trustees noted that
96
Board Considerations Regarding Continuation of Investment
Advisory Agreement (Continued)
the Excess Expense Agreement with the Trust provided that the Adviser was entitled to be reimbursed by each Fund for fees waived or expenses absorbed pursuant to the expense cap for a period of three years from the date the fee or expense was incurred, provided that no reimbursement would be made that would result in a Fund exceeding its expense cap.
The Trustees noted that the Adviser had not identified any further benefits that it derived from its relationship with the Funds, and had noted that it does not have any soft-dollar arrangements.
Based on all of the information considered and the conclusions reached, the Board, including the Independent Trustees, determined to approve the continuation of the Investment Advisory Agreement for each Fund listed above. No single factor was determinative in the Board's analysis.
97
Board Considerations Regarding Approval of Investment Advisory Agreement (PowerShares S&P 500 BuyWrite Portfolio)
At a meeting held on December 18, 2007, the Board of Trustees of the PowerShares Exchange-Traded Fund Trust (the "Trust"), including the Independent Trustees, approved the Investment Advisory Agreement between PowerShares Capital Management LLC (the "Adviser") and the Trust for the PowerShares S&P 500 BuyWrite Portfolio (the "Fund").
The Trustees reviewed information from the Adviser describing: (i) the nature, extent and quality of services to be provided, (ii) since Fund performance was not available, the correlation and tracking error between the indices tracked by other exchange-traded funds ("ETFs") for which the Adviser serves as such and those funds' performance, (iii) the costs of services to be provided and estimated profits to be realized by the Adviser, (iv) the extent to which economies of scale may be realized as the Fund grows, (v) whether fee levels reflect any possible economies of scale for the benefit of Fund shareholders, (vi) comparisons of services rendered and amounts paid to other registered investment companies and (vii) any benefits to be realized by the Adviser from its relationship with the Fund. Based on all of the information considered and the conclusions reached, the Board, including the Independent Trustees, determined to approve the Investment Advisory Agreement for the Fund. No single factor was determinative in the Board's analysis.
Nature, Extent and Quality of Services.
In evaluating the nature, extent and quality of the Adviser's services, the Trustees reviewed information concerning the functions to be performed by the Adviser, information describing the Adviser's current organization and projected staffing, and the background and experience of the persons responsible for the day-to-day management of the Fund, and considered the quality of services provided by the Adviser to other ETFs. The Trustees reviewed matters related to the Adviser's portfolio transaction policies and procedures. The Trustees reviewed reports on the correlation and tracking error between the underlying indices and the performance of other ETFs for which the Adviser serves as investment adviser.
The Trustees also considered the services to be provided by the Adviser in its oversight of the Fund's administrator, custodian and transfer agent. They noted the significant amount of time and effort that had been devoted to this oversight function for the other ETFs and that was expected to be provided for the Fund.
Based on their review, the Trustees concluded that the nature and extent of services to be provided by the Adviser to the Fund were appropriate and that the quality was expected to be good.
Fees, Expenses and Profitability.
The Trustees reviewed and discussed the information provided by the Adviser on the Fund's expected total expense ratio and proposed advisory fee, as compared to information prepared by Lipper Inc., an independent source, on expense ratios and advisory fees of a broad universe of ETFs and other index funds. The Adviser supplemented the information prepared by Lipper Inc. with data it compiled on expense ratios and advisory fees of newer ETFs that recently commenced operations. The Trustees also considered data from an August 2007 report by Morgan Stanley, Inc. showing average expense ratios for various types of ETFs and open-end funds, including index funds. The Trustees noted that the annual advisory fee to be charged to the Fund was a unitary fee, and that the Adviser agreed to pay all expenses of the Fund except brokerage commissions and other trading expenses, taxes and extraordinary expenses. The Trustees noted that the advisory fee was at the higher end of the ETF universe, but generally was lower than fees for open-end (non-ETF) funds and closed-end funds, and was reasonable because of the complexity of the index, which requires continuous rebalancing and a monthly option overlay, other distinguishing factors of the Fund, and the higher administrative, operational and management oversight costs for the Adviser. The Trustees also noted that a portion of the higher advisory
98
Board Considerations Regarding Approval of Investment Advisory Agreement (PowerShares S&P 500 BuyWrite Portfolio) (Continued)
fee was attributable to a higher license fee payable out of the unitary fee to be charged to the Fund. The Board noted that the Adviser represented that the advisory fee was competitive with those of its ETF peers, and that it was consistent with the fee to be paid by two other series of the Trust that are to track the performance of other equity indices with associated option writing. The Board concluded that the advisory fee and expected total expense ratio of the Fund are reasonable and appropriate in amount in light of the quality of services expected to be provided.
In conjunction with their review of fees, the Trustees also considered information provided by the Adviser on the revenues received by the Adviser as investment adviser to the other ETFs, as well as the fees waived and expenses reimbursed by the Adviser for those ETFs. The Trustees reviewed information provided by the Adviser on its profitability as well as any profits realized by the Adviser from its relationship to those ETFs. The Trustees noted the Adviser's statement that its costs of managing those ETFs generally exceeded the amount payable as management fees under the investment advisory agreement for those funds. The Trustees concluded that the estimated profits to be realized by the Adviser with respect to the Fund appeared to be reasonable in comparison with the costs of providing investment advisory services to the Fund.
Economies of Scale and Whether Fee Levels Reflect These Economies of Scale.
The Trustees reviewed the information provided by the Adviser as to the extent to which economies of scale are realized as the Fund grows and whether fee levels reflect economies of scale for the benefit of shareholders. The Trustees noted that certain fixed costs associated with the management of the Fund can be reduced on a per-Fund basis, and that although such economies would be enjoyed by the Adviser, a unitary fee provides certainty in expenses for the Fund. The Trustees considered whether the advisory fee rate for the Fund is reasonable in relation to the projected asset size of the Fund, and concluded that the flat advisory fee was reasonable and appropriate.
The Trustees noted that the Adviser had not identified any further benefits that it derived from its relationship with the Fund, and had noted that it does not have any soft-dollar arrangements.
Based on all of the information considered and the conclusions reached, the Board, including the Independent Trustees, determined to approve the Investment Advisory Agreement for the Fund. No single factor was determinative in the Board's analysis.
99
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PROXY VOTING POLICIES AND PROCEDURES
A description of the Funds' proxy voting policies and procedures that the Funds use to determine how to vote proxies relating to portfolio securities is available, without charge and upon request, by calling (800) 337-4246. This information is also available on the Securities and Exchange Commission's ("Commission") website at
www.sec.gov
.
Information regarding how the Funds voted proxies for portfolio securities, if applicable, during the most recent 12-month period ended June 30, is also available, without charge and upon request, by (i) calling (800) 337-4246; or (ii) accessing the Funds' Form N-PX on the Commission's website at
www.sec.gov
.
QUARTERLY PORTFOLIOS
The Funds file their complete schedules of portfolio holdings with the Commission for the first and third quarters of each fiscal year on Form N-Q. The Funds' Forms N-Q are available on the Commission's website at
www.sec.gov
. The Funds' Forms N-Q may also be reviewed and copied at the Commission's Public Reference Room in Washington, DC; information on the operation of the Public Reference Room may be obtained by calling (800) SEC-0330.
There are risks involved in investing in ETFs, including possible loss of money. Investing in securities of small and medium sized companies involves greater risk than is customarily associated with investing in more established companies, and investments in concentrated industry sectors involve greater risks than investments that are more diversified. PowerShares ETFs are not actively managed and are subject to risks similar to stocks, including those related to short selling and margin maintenance. PowerShares ETFs are not FDIC insured, may lose value and have no bank guarantee. PowerShares is a registered trademark of Invesco PowerShares Capital Management LLC. Past performance is not a guarantee of future results.
Invesco Aim Distributors, Inc. is the distributor of the PowerShares Exchange-Traded Fund Trust.
An investor should consider each Fund's investment objective, risks, charges and expenses carefully before investing. For more complete information about PowerShares ETFs call Invesco Aim Distributors, Inc. at (800) 337-4246 or visit our website invescopowershares.com for a prospectus. Please read the prospectus carefully before investing.
301 West Roosevelt Road
Wheaton, IL 60187
800.983.0903
www.invescopowershares.com
© 2008 Invesco PowerShares Capital Management LLC P-PS-AR-4
POWERSHARES
EXCHANGE-TRADED FUND TRUST
PART C.
OTHER INFORMATION
Item
23. Exhibits.
(a)
Amended and Restated Declaration of Trust of
the Registrant dated April 7, 2003, is incorporated by reference to Exhibit (a)(1) of
the Initial Registration Statement, filed on April 16, 2003.
(b)
Amended and Restated By-laws of the
Registrant, is incorporated by reference to Exhibit (b) of
Post-Effective Amendment No. 73, filed on June 6, 2006.
(c)
Not applicable.
(d)
(1)
Investment Advisory
Agreement between the Registrant and Invesco PowerShares Capital Management
LLC, for Funds launched prior to June 30, 2007, is incorporated by reference to
Exhibit (d)(1) of Post-Effective Amendment No. 184, filed on May
23, 2008.
(2)
Investment
Advisory Agreement between the Registrant and Invesco PowerShares Capital
Management LLC, for Funds launched after June 30, 2007, is incorporated by
reference to Exhibit (d)(2) of Post-Effective Amendment No, 184, filed on May
23, 2008.
(3)
Excess Expense Agreement
between the Registrant and Invesco PowerShares Capital Management LLC, is
incorporated by reference to Exhibit (d)(3) of Post-Effective Amendment No.
184, filed on May 23, 2008.
(e)
Not applicable.
(f)
Not applicable.
(g)
(i)
Form of Custody Agreement between
Registrant and The Bank of New York, is incorporated by reference to Exhibit (g)(1) of
the Initial Registration Statement, filed on April 16, 2003.
(g) (ii)
Form
of Foreign Custody Manager Agreement between PowerShares Exchange-Traded Fund
Trust II and The Bank of New York, is incorporated herein by reference to exhibit (g)(ii)
to Pre-Effective Amendment No. 1 to the Registration Statement on Form N-1A of PowerShares
Exchange-Traded Fund Trust II, filed on June 6, 2007.
(h)
1.
Form of Fund
Administration and Accounting Agreement between Registrant and The Bank of New
York, is incorporated by reference to Exhibit (h)(1) of the Initial
Registration Statement filed on April 16, 2003.
2.
Form of Transfer
Agency and Service Agreement between Registrant and The Bank of New York, is
incorporated by reference to Exhibit (h)(2) of the Initial
Registration Statement, filed on April 16, 2003.
3.
Form of
Participant Agreement between ALPS Distributors, Inc., The Bank of New
York and the Participant, is incorporated by reference to Exhibit (h)(3) of
the Initial Registration Statement, filed on April 16, 2003.
4.
Form of
Participant Agreement between Invesco Aim Distributors, Inc., the Bank of
New York and PowerShares Exchange-Traded Fund Trust II, is incorporated herein by
reference to Exhibit (h)(c) to Pre-Effective Amendment No. 1 to the
Registration Statement on Form N-1A of PowerShares Exchange-Traded Fund Trust
II, filed on June 6, 2007.
5.
Form of
Sublicensing Agreement between the Registrant and the Adviser, is incorporated
by reference to Exhibit (h)(d) of Post-Effective Amendment No. 14,
filed on November 24, 2004.
(i)
1.
Opinion and Consent of Clifford Chance US
LLP (with respect to the PowerShares Dynamic Brand Name Products and
PowerShares NASDAQ Internet Portfolios), to be filed by amendment.*
C-1
2.
Opinion and Consent of Bingham McCutchen,
LLP (with respect to the PowerShares Dynamic Brand Name Products and
PowerShares NASDAQ Internet Portfolios), to be filed by amendment.*
3.
Opinion and Consent of Clifford Chance US
LLP (with respect to the PowerShares Dynamic MagniQuant Portfolio, PowerShares
Dynamic Basic Materials Sector Portfolio, PowerShares Dynamic Consumer
Discretionary Sector Portfolio, PowerShares Dynamic Consumer Staples Sector
Portfolio, PowerShares Dynamic Energy Sector Portfolio, PowerShares Dynamic
Financial Sector Portfolio, PowerShares Dynamic Industrials Sector Portfolio,
PowerShares Dynamic Healthcare Sector Portfolio, PowerShares Dynamic Technology
Sector Portfolio, PowerShares Dynamic Banking Portfolio and PowerShares Dynamic
Healthcare Services Portfolio), is incorporated herein by reference to Exhibit (i)(c) of
Post-Effective Amendment No. 88, filed on October 10, 2006.
4.
Opinion and Consent of Bingham McCutchen,
LLP (with respect to the PowerShares Dynamic MagniQuant Portfolio, PowerShares
Dynamic Basic Materials Sector Portfolio, PowerShares Dynamic Consumer
Discretionary Sector Portfolio, PowerShares Dynamic Consumer Staples Sector
Portfolio, PowerShares Dynamic Energy Sector Portfolio, PowerShares Dynamic
Financial Sector Portfolio, PowerShares Dynamic Industrials Sector Portfolio,
PowerShares Dynamic Healthcare Sector Portfolio, PowerShares Dynamic Technology
Sector Portfolio, PowerShares Dynamic Banking Portfolio and PowerShares Dynamic
Healthcare Services Portfolio), incorporated herein by reference to Exhibit (i)(d) of
Post-Effective Amendment No. 88, filed on October 10, 2006.
5.
Opinion and Consent of Clifford Chance US
LLP (with respect to the PowerShares REIT Preferred Portfolio and PowerShares
Value Line 400 Portfolio), to be filed by amendment.*
6.
Opinion and Consent of Bingham McCutchen,
LLP (with respect to the PowerShares REIT Preferred Portfolio and PowerShares
Value Line 400 Portfolio), to be filed by amendment.*
7.
Opinion and Consent of Clifford Chance US LLP
(with respect to the PowerShares Dynamic Market Portfolio, PowerShares Dynamic
OTC Portfolio, PowerShares Dynamic Large Cap Growth Portfolio, PowerShares
Dynamic Large Cap Value Portfolio, PowerShares Dynamic Mid Cap Growth
Portfolio, PowerShares Dynamic Mid Cap Value Portfolio, PowerShares Dynamic
Small Cap Growth Portfolio, PowerShares Dynamic Small Cap Value Portfolio,
PowerShares Golden Dragon Halter USX China Portfolio, PowerShares High Yield
Equity Dividend Achievers
TM
Portfolio, PowerShares WilderHill Clean
Energy Portfolio, PowerShares Dynamic Biotechnology & Genome
Portfolio, PowerShares Dynamic Food & Beverage Portfolio, PowerShares
Dynamic Leisure and Entertainment Portfolio, PowerShares Dynamic Media
Portfolio, PowerShares Dynamic Networking Portfolio, PowerShares Dynamic
Pharmaceuticals Portfolio, PowerShares Dynamic Semiconductors Portfolio,
PowerShares Dynamic Software Portfolio, PowerShares Dividend Achievers
TM
Portfolio, PowerShares High Growth Rate Dividend Achievers
TM
Portfolio, PowerShares International Dividend Achievers
TM
Portfolio,
PowerShares Zacks Micro Cap Portfolio, PowerShares Dynamic Building &
Construction Portfolio, PowerShares Dynamic Energy Exploration &
Production Portfolio, PowerShares Dynamic Insurance Portfolio, PowerShares Lux
Nanotech Portfolio, PowerShares Dynamic Oil & Gas Services Portfolio,
PowerShares Dynamic Retail Portfolio, PowerShares Dynamic Utilities Portfolio,
PowerShares Aerospace & Defense Portfolio, PowerShares FTSE RAFI US
1000 Portfolio, PowerShares Water Resources Portfolio, PowerShares Value Line
Timeliness
TM
Select Portfolio,
TM
PowerShares Dynamic
Hardware & Consumer Electronics Portfolio, PowerShares Dynamic
Telecommunications & Wireless Portfolio and PowerShares Zacks Small
Cap Portfolio), is incorporated by reference to Exhibit (i)(l) of
Post-Effective Amendment No. 9, filed on August 27, 2004, Exhibit (i)(a) of
Post-Effective Amendment No. 14, filed on November 24, 2004, Exhibit (i)(e) of
Post-Effective Amendment No. 20, filed on February 25, 2005, Exhibit (i)(g) of
Post-Effective Amendment No. 26, filed on May 13, 2005, Exhibit (i)(i) of
Post-Effective Amendment No. 45, filed on September 12, 2005, Exhibit (i)(k) of
Post-Effective Amendment
C-2
No. 38,
filed on August 17, 2005, Exhibit (i)(m) of Post-Effective
Amendment No. 55, filed on October 25, 2005, Exhibit (i)(k) of
Post-Effective Amendment No. 61, filed on December 2, 2005, Exhibit (i)(m) of
Post-Effective Amendment No. 62, filed on December 2, 2005 and Exhibit (i)(o) of
Post-Effective Amendment No. 68, filed on February 10, 2006.
8.
Opinion and Consent of Bingham McCutchen,
LLP (with respect to the PowerShares Dynamic Market Portfolio, PowerShares
Dynamic OTC Portfolio, PowerShares Dynamic Large Cap Growth Portfolio,
PowerShares Dynamic Large Cap Value Portfolio, PowerShares Dynamic Mid Cap
Growth Portfolio, PowerShares Dynamic Mid Cap Value Portfolio, PowerShares
Dynamic Small Cap Growth Portfolio, PowerShares Dynamic Small Cap Value Portfolio,
PowerShares Golden Dragon Halter USX China Portfolio, PowerShares High Yield
Equity Dividend Achievers
TM
Portfolio, PowerShares WilderHill Clean
Energy Portfolio, PowerShares Dynamic Biotechnology & Genome
Portfolio, PowerShares Dynamic Food & Beverage Portfolio, PowerShares
Dynamic Leisure and Entertainment Portfolio, PowerShares Dynamic Media
Portfolio, PowerShares Dynamic Networking Portfolio, PowerShares Dynamic
Pharmaceuticals Portfolio, PowerShares Dynamic Semiconductors Portfolio,
PowerShares Dynamic Software Portfolio, PowerShares Dividend Achievers
TM
Portfolio, PowerShares High Growth Rate Dividend Achievers
TM
Portfolio, PowerShares International Dividend Achievers
TM
Portfolio,
PowerShares Zacks Micro Cap Portfolio, PowerShares Dynamic Building &
Construction Portfolio, PowerShares Dynamic Energy Exploration &
Production Portfolio, PowerShares Dynamic Insurance Portfolio, PowerShares Lux
Nanotech Portfolio, PowerShares Dynamic Oil & Gas Services Portfolio,
PowerShares Dynamic Retail Portfolio, PowerShares Dynamic Utilities Portfolio,
PowerShares Aerospace & Defense Portfolio, PowerShares FTSE RAFI US
1000 Portfolio, PowerShares Water Resources Portfolio, PowerShares Value Line
Timeliness
TM
Select Portfolio, PowerShares Dynamic Hardware &
Consumer Electronics Portfolio, PowerShares Dynamic Telecommunications &
Wireless Portfolio and PowerShares Zacks Small Cap Portfolio), is incorporated
by reference to Exhibit (i)(2) of Post-Effective Amendment No. 9,
filed on August 27, 2004, Exhibit (i)(b) of Post-Effective
Amendment No. 14, filed on November 24, 2004, Exhibit (i)(f) of
Post-Effective Amendment No. 20, filed on February 25, 2005, Exhibit (i)(h) of
Post-Effective Amendment No. 26, filed on May 13, 2005, Exhibit (i)(j) of
Post-Effective Amendment No. 45, filed on September 12, 2005, Exhibit (i)(l) of
Post-Effective Amendment No. 38, filed on August 17, 2005, Exhibit (i)(n) of
Post-Effective Amendment No. 55, filed on October 25, 2005, Exhibit (i)(l) of
Post-Effective Amendment No. 61, filed on December 2, 2005, Exhibit (i)(m) of
Post-Effective Amendment No. 62, filed on December 2, 2005, and Exhibit (i)(p) of
Post-Effective Amendment No. 68, filed on February 10, 2006.
9.
Consent of Clifford Chance US LLP (with
respect to the PowerShares Dynamic Market Portfolio, PowerShares Dynamic OTC
Portfolio, PowerShares Dynamic Large Cap Growth Portfolio, PowerShares Dynamic
Large Cap Value Portfolio, PowerShares Dynamic Mid Cap Growth Portfolio,
PowerShares Dynamic Mid Cap Value Portfolio, PowerShares Dynamic Small Cap
Growth Portfolio, PowerShares Dynamic Small Cap Value Portfolio, PowerShares
Golden Dragon Halter USX China Portfolio, PowerShares High Yield Equity
Dividend Achievers
TM
Portfolio, PowerShares WilderHill Clean Energy
Portfolio, PowerShares Dynamic Biotechnology & Genome Portfolio,
PowerShares Dynamic Food & Beverage Portfolio, PowerShares Dynamic
Leisure and Entertainment Portfolio, PowerShares Dynamic Media Portfolio,
PowerShares Dynamic Networking Portfolio, PowerShares Dynamic Pharmaceuticals Portfolio,
PowerShares Dynamic Semiconductors Portfolio, PowerShares Dynamic Software
Portfolio, PowerShares Dividend Achievers
TM
Portfolio, PowerShares
High Growth Rate Dividend Achievers
TM
Portfolio, PowerShares
International Dividend Achievers
TM
Portfolio, PowerShares Zacks
Micro Cap Portfolio, PowerShares Dynamic Building & Construction
Portfolio, PowerShares Dynamic Energy Exploration & Production
Portfolio, PowerShares Dynamic Insurance Portfolio, PowerShares Lux Nanotech
Portfolio, PowerShares Dynamic Oil & Gas Services Portfolio,
PowerShares Dynamic Retail Portfolio, PowerShares Dynamic Utilities Portfolio,
PowerShares Aerospace & Defense Portfolio, PowerShares FTSE RAFI US
1000 Portfolio, PowerShares Water Resources Portfolio, PowerShares Value Line Timeliness
TM
Select Portfolio,
TM
PowerShares Dynamic Hardware & Consumer
Electronics Portfolio, PowerShares Dynamic
C-3
Telecommunications &
Wireless Portfolio and PowerShares Zacks Small Cap Portfolio), is incorporated
by reference to Exhibit (i)(i) of Post-Effective Amendment No. 83,
filed on August 29, 2006.
10.
Opinion and Consent of Clifford Chance US
LLP (with respect to PowerShares FTSE RAFI US 1500 Small-Mid Portfolio,
PowerShares FTSE RAFI Energy Sector Portfolio, PowerShares FTSE RAFI Basic
Materials Sector Portfolio, PowerShares FTSE RAFI Industrials Sector Portfolio,
PowerShares FTSE RAFI Consumer Goods Sector Portfolio, PowerShares FTSE RAFI
Health Care Sector Portfolio, PowerShares FTSE RAFI Consumer Services Sector
Portfolio, PowerShares FTSE RAFI Telecommunications & Technology
Sector Portfolio, PowerShares FTSE RAFI Utilities Sector Portfolio and
PowerShares FTSE RAFI Sector Financials Portfolio), is incorporated by
reference to Exhibit (i)(j) of Post-Effective Amendment No. 85,
filed on September 19, 2006.
11.
Opinion and Consent of Bingham McCutchen,
LLP (with respect to PowerShares FTSE RAFI US 1500 Small-Mid Portfolio,
PowerShares FTSE RAFI Energy Sector Portfolio, PowerShares FTSE RAFI Basic
Materials Sector Portfolio, PowerShares FTSE RAFI Industrials Sector Portfolio,
PowerShares FTSE RAFI Consumer Goods Sector Portfolio, PowerShares FTSE RAFI
Health Care Sector Portfolio, PowerShares FTSE RAFI Consumer Services Sector
Portfolio, PowerShares FTSE RAFI Telecommunications & Technology
Sector Portfolio, PowerShares FTSE RAFI Utilities Sector Portfolio and
PowerShares FTSE RAFI Sector Financials Portfolio), is incorporated by
reference to Exhibit (i)(k) of Post-Effective Amendment No. 85,
filed on September 19, 2006.
12.
Opinion and Consent of Clifford Chance US
LLP (with respect to the PowerShares Dynamic Large Cap Portfolio, PowerShares
Dynamic Mid Cap Portfolio, PowerShares Dynamic Small Cap Portfolio and
PowerShares Value Line Industry Rotation Portfolio), is incorporated by
reference to Exhibit (i)(l) of Post-Effective Amendment No. 99,
filed on November 28, 2006.
13.
Opinion and Consent of Bingham McCutchen,
LLP (with respect to the PowerShares Dynamic Large Cap Portfolio, PowerShares
Dynamic Mid Cap Portfolio, PowerShares Dynamic Small Cap Portfolio and
PowerShares Value Line Industry Rotation Portfolio), is incorporated by
reference to Exhibit (i)(m) of Post-Effective Amendment No. 99,
filed on November 28, 2006.
14.
Opinion and Consent of Clifford Chance US
LLP (with respect to the PowerShares Financial Preferred Portfolio, PowerShares
Listed Private Equity Portfolio, PowerShares WilderHill Progressive Energy
Portfolio and PowerShares Cleantech Portfolio), is incorporated by reference
to Exhibit (i)(n) of Post-Effective Amendment No. 93, filed on October 20,
2006.
15.
Opinion and Consent of Bingham McCutchen,
LLP (with respect to the PowerShares Financial Preferred Portfolio, PowerShares
Listed Private Equity Portfolio, PowerShares WilderHill Progressive Energy
Portfolio and PowerShares Cleantech Portfolio), is incorporated by reference
to Exhibit (i)(o) of Post-Effective Amendment No. 93, filed on October 20,
2006.
16.
Opinion and Consent of Clifford Chance US
LLP (with respect to the PowerShares Autonomic Allocation Research Affiliates
Portfolio, PowerShares NASDAQ
(R)
Dividend Achievers
TM
Portfolio and PowerShares India Tiger
TM
Portfolio), to be filed by
amendment.
17.
Opinion and Consent of Bingham McCutchen,
LLP (with respect to the PowerShares Autonomic Allocation Research Affiliates
Portfolio, PowerShares NASDAQ
(R)
Dividend Achievers
TM
Portfolio and PowerShares India Tiger Portfolio), to be filed by amendment.
18.
Opinion and Consent of Clifford Chance US
LLP (with respect to the PowerShares Dynamic Deep Value Portfolio, PowerShares
Dynamic Aggressive Growth Portfolio and PowerShares Buyback
C-4
Achievers
TM
Portfolio), is incorporated by reference to Exhibit (i)(r) of Post-Effective
Amendment No. 104, filed on December 18, 2006.
19.
Opinion and Consent of Bingham McCutchen,
LLP (with respect to the PowerShares Dynamic Deep Value Portfolio, PowerShares
Dynamic Aggressive Growth Portfolio and PowerShares Buyback Achievers
TM
Portfolio), is incorporated by reference to Exhibit (i)(s) of
Post-Effective Amendment No. 104, filed on December 18, 2006.
20.
Opinion and Consent of Clifford Chance US
LLP (with respect to the PowerShares DWA Technical Leaders
TM
Portfolio), is incorporated by reference to Exhibit (i)(t) of
Post-Effective Amendment No. 114, filed on February 16, 2007.
21.
Opinion and Consent of Bingham McCutchen,
LLP (with respect to the PowerShares DWA Technical Leaders
TM
Portfolio), is incorporated by reference to Exhibit (i)(u) of
Post-Effective Amendment No. 114, filed on February 16, 2007.
22.
Opinion and Consent of
Clifford Chance US LLP (with respect to the PowerShares NASDAQ-100 BuyWrite
Portfolio), is incorporated by reference to Exhibit (i)(22) of Post-Effective
Amendment No. 183, filed on May 23, 2008.
23.
Opinion and Consent of
Bingham McCutchen, LLP (with respect to the PowerShares NASDAQ-100 BuyWrite
Portfolio), is incorporated by reference to Exhibit (i)(23) of Post-Effective
Amendment No. 183, filed on May 23, 2008.
24.
Opinion
and Consent of Clifford Chance US LLP (with respect to the PowerShares S&P
500 BuyWrite Portfolio), is incorporated by reference to Exhibit (i)(22) of
Post-Effective Amendment No. 151, filed on December 16, 2007.
25.
Opinion
and Consent of Bingham McCutchen, LLP (with respect to the PowerShares S&P
500 BuyWrite Portfolio), is incorporated by reference to Exhibit (i)(23) of
Post-Effective Amendment No. 151, filed on December 16, 2007.
26.
Opinion and Consent of
Clifford Chance US LLP (with respect to the PowerShares FTSE NASDAQ Small Cap
Portfolio and PowerShares NASDAQ Next-Q
Portfolio), is incorporated by reference to Exhibit (i)(26) of Post-Effective
Amendment No. 169, filed on March 28, 2008.
27.
Opinion and Consent of
Bingham McCutchen, LLP (with respect to the PowerShares FTSE NASDAQ Small Cap
Portfolio and PowerShares NASDAQ Next-Q
Portfolio), is incorporated by reference to Exhibit (i)(27) of Post-Effective
Amendment No. 169, filed on March 28, 2008.
28.
Opinion and Consent of
Clifford Chance US LLP (with respect to the PowerShares DJIA BuyWrite Portfolio
and PowerShares Lux Nanotech Portfolio), to be filed by amendment.
29.
Opinion
and Consent of Bingham McCutchen, LLP (with respect to the PowerShares DJIA
BuyWrite Portfolio and PowerShares Lux Nanotech Portfolio), to be filed by
amendment.
30.
Opinion
and Consent of Cliffoad Chance US LLP (with respect to the PowerShares NASDAQ
Internet Portfolio), is incorporated by reference to Exhibit (i)(30) of
Post-Effective Amendment No. 184, filed on May 23, 2008.
31.
Opinion
and Consent of Bingham McCutchen, LLP
(with respect to the PowerShares NASDAQ Internet Portfolio), is incorporated by
reference to Exhibit (i)(31) of Post-Effective Amendment No. 184, filed on May
23, 2008.
32.
Consent
of Clifford Chance US LLP (with respect to the PowerShares Cleantech
TM
Portfolio), is filed herewith.
(j)
1.
Consent of PricewaterhouseCoopers LLP
(with respect to the PowerShares Dynamic Brand Name Products and PowerShares
NASDAQ Internet Portfolios), to be filed by amendment.
2.
Consent of PricewaterhouseCoopers LLP
(with respect to the PowerShares Dynamic MagniQuant Portfolio, PowerShares
Dynamic Basic Materials Sector Portfolio, PowerShares Dynamic Consumer
Discretionary Sector Portfolio, PowerShares Dynamic Consumer Staples Sector
Portfolio, PowerShares Dynamic Energy Sector Portfolio, PowerShares Dynamic
Financial Sector Portfolio, PowerShares Dynamic Industrials Sector Portfolio,
PowerShares Dynamic Healthcare Sector Portfolio, PowerShares Dynamic Technology
Sector Portfolio, PowerShares Dynamic Banking Portfolio, PowerShares Dynamic
Healthcare Services Portfolio), is incorporated by reference to Exhibit (j)(b) of
Post-Effective Amendment No. 91, filed on October 11, 2006.
3.
Consent of PricewaterhouseCoopers LLP
(with respect to the PowerShares REIT Preferred Portfolio and PowerShares Value
Line 400 Portfolio), to be filed by amendment.
4.
Consent of PricewaterhouseCoopers LLP
(with respect to the PowerShares Dynamic Market Portfolio, PowerShares Dynamic
OTC Portfolio, PowerShares Dynamic Large Cap Growth Portfolio, PowerShares
Dynamic Large Cap Value Portfolio, PowerShares Dynamic Mid Cap Growth
Portfolio, PowerShares Dynamic Mid Cap Value Portfolio, PowerShares Dynamic
Small Cap Growth Portfolio, PowerShares Dynamic Small Cap Value Portfolio,
PowerShares Golden Dragon Halter USX China Portfolio, PowerShares High Yield
Equity Dividend Achievers
C-5
Portfolio,
PowerShares WilderHill Clean Energy Portfolio, PowerShares Dynamic
Biotechnology & Genome Portfolio, PowerShares Dynamic Food &
Beverage Portfolio, PowerShares Dynamic Leisure and Entertainment Portfolio,
PowerShares Dynamic Media Portfolio, PowerShares Dynamic Networking Portfolio,
PowerShares Dynamic Pharmaceuticals Portfolio, PowerShares Dynamic
Semiconductors Portfolio, PowerShares Dynamic Software Portfolio, PowerShares
Dividend Achievers
TM
Portfolio, PowerShares High Growth Rate Dividend
Achievers
TM
Portfolio, PowerShares International Dividend Achievers
TM
Portfolio PowerShares Zacks Micro Cap Portfolio, PowerShares Dynamic Building &
Construction Portfolio, PowerShares Dynamic Energy Exploration &
Production Portfolio, PowerShares Dynamic Insurance Portfolio, PowerShares Lux
Nanotech Portfolio, PowerShares Dynamic Oil & Gas Services Portfolio,
PowerShares Dynamic Retail Portfolio, PowerShares Dynamic Utilities Portfolio,
PowerShares Aerospace & Defense Portfolio, PowerShares FTSE RAFI US
1000 Portfolio, PowerShares Water Resources Portfolio, PowerShares Value Line
Timeliness
TM
Select Portfolio, PowerShares Dynamic Hardware &
Consumer Electronics Portfolio, PowerShares Dynamic Telecommunications &
Wireless Portfolio and PowerShares Zacks Small Cap Portfolio), is incorporated
by reference to Exhibit (j)(c) of Post-Effective Amendment No. 83,
filed on August 29, 2006.
5.
Consent of PricewaterhouseCoopers LLP
(with respect to PowerShares FTSE RAFI US 1500 Small-Mid Portfolio, PowerShares
FTSE RAFI Energy Sector Portfolio, PowerShares FTSE RAFI Basic Materials Sector
Portfolio, PowerShares FTSE RAFI Industrials Sector Portfolio, PowerShares FTSE
RAFI Consumer Goods Sector Portfolio, PowerShares FTSE RAFI Health Care Sector
Portfolio, PowerShares FTSE RAFI Consumer Services Sector Portfolio,
PowerShares FTSE RAFI Telecommunications & Technology Sector
Portfolio, PowerShares FTSE RAFI Utilities Sector Portfolio and PowerShares
FTSE RAFI Sector Financials Portfolio), is incorporated by reference to Exhibit (j)(d) of
Post-Effective Amendment No. 85, filed on September 19, 2006.
6.
Consent of PricewaterhouseCoopers LLP
(with respect to the PowerShares Dynamic Large Cap Portfolio, PowerShares
Dynamic Mid Cap Portfolio, PowerShares Dynamic Small Cap Portfolio and
PowerShares Value Line Industry Rotation Portfolio), is incorporated by
reference to Exhibit (j)(f) of Post-Effective Amendment No. 99,
filed on November 28, 2006.
7.
Consent of PricewaterhouseCoopers LLP
(with respect to the PowerShares Financial Preferred Portfolio, PowerShares
Listed Private Equity Portfolio, PowerShares WilderHill Progressive Energy
Portfolio and PowerShares Cleantech Portfolio), is incorporated by reference
to Exhibit (j)(g) of Post-Effective Amendment No. 93, filed on October 20,
2006.
8.
Consent of PricewaterhouseCoopers LLP
(with respect to the PowerShares Autonomic Allocation Research Affiliates
Portfolio, PowerShares NASDAQ
(R)
Dividend Achievers Portfolio
and PowerShares India Tiger Portfolio), to be filed by amendment.
9.
Consent of PricewaterhouseCoopers LLP
(with respect to the PowerShares Dynamic Deep Value Portfolio, PowerShares
Dynamic Aggressive Growth Portfolio and PowerShares Buyback Achievers
Portfolio), is incorporated by reference to Exhibit (j)(i) of
Post-Effective Amendment No. 104, filed on December 18, 2006.
10.
Consent of PricewaterhouseCoopers LLP (with
respect to the PowerShares DWA Technical Leaders
TM
Portfolio), is
incorporated by reference to Exhibit (j)(j) of Post-Effective
Amendment No. 114, filed on February 16, 2007.
11.
Consent of
PricewaterhouseCoopers LLP (with respect to the PowerShares NASDAQ-100 BuyWrite
Portfolio), is incorporated by reference to Exhibit (j)(12) of Post-Effective
Amendment No. 183, filed on May 23, 2008.
12.
Consent
of PricewaterhouseCoopers LLP (with respect to the PowerShares S&P 500
BuyWrite Portfolio), is incorporated by reference to Exhibit (j)(11) of
Post-Effective Amendment No. 151, filed on December 16, 2007.
C-6
13.
Consent of PricewaterhouseCoopers LLP (with
respect to the PowerShares FTSE NASDAQ Small Cap Portfolio and PowerShares NASDAQ Next-Q Portfolio), is incorporated by
reference to Exhibit (j)(8) of Post-Effective Amendment No. 169, filed on March
28, 2008.
14.
Consent
of PricewaterhouseCoopers LLP (with respect to PowerShares Lux Nanotech
Portfolio and PowerShares Cleantech
TM
Portfolio), to be filed by amendment.
15.
Consent
of PricewaterhouseCoopers LLP (with respect to the PowerShares NASDAQ Internet
Portfolio), is incorporated by reference to Exhibit (j)(15) of Post-Effective
Amendment No. 184, filed on May 23, 2008.
16.
Consent
of PricewaterhouseCoopers LLP (with respect to the PowerShares Cleantech
TM
Portfolio), is filed herewith.
(k)
Not applicable.
(l)
Not applicable.
(m)
Distribution and Service Plan, is
incorporated by reference to Exhibit (e) of the Initial Registration
Statement, filed on April 16, 2003.
(n)
Not applicable.
(o)
Not applicable.
(p)
a.
Code of Ethics of the Registrant and
Invesco PowerShares Capital Management LLC is incorporated by reference to Exhibit (p)(a) of
Post-Effective Amendment No. 26, filed on May 13, 2005.
b.
Code of Ethics of Invesco Aim Distributors, Inc.,
is incorporated by reference to Exhibit (p)(b) of Post-Effective
Amendment No. 85, filed on September 19, 2006.
Other.
(1)
Powers of Attorney are incorporated by
reference to Exhibit (q) of the Initial Registration
Statement, filed on April 16, 2003.
(2)
Powers of Attorney of Marc M. Kole and
Donald S. Wilson, are incorporated by reference to
Exhibit (c)(2) of
Post-Effective Amendment No.114, filed on February 16, 2006.
Item
24. Persons Controlled by or Under
Common Control with the Funds.
PROVIDE A LIST OR DIAGRAM OF ALL PERSONS
DIRECTLY OR INDIRECTLY CONTROLLED BY OR UNDER COMMON CONTROL WITH THE
REGISTRANT. FOR ANY PERSON CONTROLLED BY
ANOTHER PERSON, DISCLOSE THE PERCENTAGE OF VOTING SECURITIES OWNED BY THE
IMMEDIATELY CONTROLLING PERSON OR OTHER BASIS OF THAT PERSONS CONTROL. FOR EACH COMPANY, ALSO PROVIDE THE STATE OR
OTHER SOVEREIGN POWER UNDER THE LAWS OF WHICH THE COMPANY IS ORGANIZED.
None.
Item
25. Indemnification.
STATE THE GENERAL EFFECT OF ANY CONTRACT,
ARRANGEMENTS OR STATUTE UNDER WHICH ANY DIRECTOR, OFFICER, UNDERWRITER OR
AFFILIATED PERSON OF THE REGISTRANT IS INSURED OR INDEMNIFIED AGAINST ANY
LIABILITY INCURRED IN THEIR OFFICIAL CAPACITY, OTHER THAN INSURANCE PROVIDED BY
ANY DIRECTOR, OFFICER, AFFILIATED PERSON, OR UNDERWRITER FOR THEIR OWN
PROTECTION.
Reference is made to Article Twelve of
the Registrants Declaration of Trust which is incorporated by reference
herein:
The Registrant (also, the Trust) is
organized as a Massachusetts business trust and is operated pursuant to an
Amended and Restated Declaration of Trust, dated April 7, 2003 (the Declaration
of Trust), that permits the
C-7
Registrant to indemnify every person who is,
or has been, a Trustee, officer, employee or agent of the Trust, including
persons who serve at the request of the Trust as directors, trustees, officers,
employees or agents of another organization in which the Trust has an interest
as a shareholder, creditor or otherwise (hereinafter referred to as a Covered
Person), shall be indemnified by the Trust to the fullest extent permitted by
law against liability and against all expenses reasonably incurred or paid by
him in connection with any claim, action, suit or proceeding in which he
becomes involved as a party or otherwise by virtue of his being or having been
such a Trustee, director, officer, employee or agent and against amounts paid
or incurred by him in settlement thereof.
This indemnification is subject to the following conditions:
No indemnification shall be provided
hereunder to a Covered Person:
i.
For any liability to the Trust or its
Shareholders by reason of a final adjudication by the court or other body
before which the proceeding was brought that the Covered Person engaged in
willful misfeasance, bad faith, gross negligence or reckless disregard of the
duties involved in the conduct of his office;
ii.
With respect to any matter as to which the
Covered Person shall have been finally adjudicated not to have acted in good
faith in the reasonable belief that his or her action was in the best interests
of the Trust; or
iii.
In the event of a settlement or other
disposition not involving a final adjudication (as provided in paragraph (a) or
(b) of this Section 12.4(c)) and resulting in a payment by a Covered
Person, unless there has been either a determination that such Covered Person
did not engage in willful misfeasance, bad faith, gross negligence or reckless
disregard of the duties involved in the conduct of his office by the court or
other body approving the settlement or other disposition, or a reasonable
determination, based on a review of readily available facts (as opposed to a full
trial-type inquiry), that he or she did not engage in such conduct, such
determination being made by: (i) a
vote of a majority of the Disinterested Trustees (as such term is defined in Section 12.4)
acting on the matter (provided that a majority of Disinterested Trustees then
in office act on the matter); or (ii) a written opinion of independent
legal counsel.
The rights of indemnification under the
Declaration of Trust may be insured against by policies maintained by the
Trust, and shall be several, shall not affect any other rights to which any
Covered Person may now or hereafter be entitled, shall continue as to a person
who has ceased to be a Covered Person, and shall inure to the benefit of the
heirs, executors and administrators of such a person. Nothing contained in the Declaration of Trust
shall affect any rights to indemnification to which Trust personnel other than
Covered Persons may be entitled by contract or otherwise under law.
Expenses of preparation and presentation of a
defense to any claim, action, suit or proceeding subject to a claim for
indemnification under Section 12.4 of the Declaration of Trust shall be
advanced by the Trust prior to final disposition thereof upon receipt of an
undertaking by or on behalf of the recipient to repay such amount if it is
ultimately determined that he or she is not entitled to indemnification under Section 12.4
of the Declaration of Trust, provided that either:
i.
Such undertaking is secured by a surety
bond or some other appropriate security or the Trust shall be insured against
losses arising out of any such advances; or
ii.
A majority of the Disinterested Trustees
acting on the matter (provided that a majority of the Disinterested Trustees
then in office act on the matter) or independent legal counsel in a written
opinion shall determine, based upon a review of the readily available facts (as
opposed to the facts available upon a full trial), that there is reason to
believe that the recipient ultimately will be found entitled to
indemnification.
As used in Section 12.4 of the
Declaration of Trust, the following words shall have the meanings set forth
below:
i.
A Disinterested Trustee is one (i) who
is not an Interested Person of the Trust (including anyone, as such
Disinterested Trustee, who has been exempted from being an Interested Person by
any rule, regulation or order of the Commission), and (ii) against whom
none of such actions, suits or other proceedings or another action, suit or
other proceeding on the same or similar grounds is then or has been pending;
C-8
ii.
Claim, action, suit or proceeding
shall apply to all claims, actions, suits, proceedings (civil, criminal,
administrative or other, including appeals), actual or threatened; and Liability
and expenses shall include without limitation, attorneys fees, costs,
judgments, amounts paid in settlement, fines, penalties and other liabilities.
Item
26. Business and Other Connections of
the Investment Adviser.
DESCRIBE ANY OTHER BUSINESS, PROFESSION,
VOCATION OR EMPLOYMENT OF A SUBSTANTIAL NATURE IN WHICH THE INVESTMENT ADVISER
AND EACH DIRECTOR, OFFICER OR PARTNER OF THE INVESTMENT ADVISER, IS OR HAS
BEEN, ENGAGED WITHIN THE LAST TWO FISCAL YEARS FOR HIS OR HER OWN ACCOUNT OR IN
THE CAPACITY OF DIRECTOR, OFFICER, EMPLOYEE, PARTNER OR TRUSTEE. (DISCLOSE THE NAME AND PRINCIPAL BUSINESS
ADDRESS OF ANY COMPANY FOR WHICH A PERSON LISTED ABOVE SERVES IN THE CAPACITY
OF DIRECTOR, OFFICER, EMPLOYEE, PARTNER OR TRUSTEE, AND THE NATURE OF THE
RELATIONSHIP.)
Reference is made to the caption Management
of the Funds in the Prospectus constituting Part A which is incorporated
by reference to this Registration Statement and Management in the Statement
of Additional Information constituting Part B which is incorporated by
reference to this Registration Statement.
LISTED BELOW ARE THE OFFICERS AND TRUSTEES OF
INVESCO POWERSHARES CAPITAL MANAGEMENT LLC:
The information as to the trustees and
executive officers of Invesco PowerShares Capital Management LLC is set forth
in Invesco PowerShares Capital Management LLCs Form ADV filed with the
Securities and Exchange Commission on February 21, 2003 (Accession
No.: 42986583161 1B82) and amended
through the date hereof, is incorporated herein by reference.
Item
27. Principal Underwriters.
STATE THE NAME OF EACH INVESTMENT COMPANY
(OTHER THAN THE REGISTRANT) FOR WHICH EACH PRINCIPAL UNDERWRITER CURRENTLY
DISTRIBUTING SECURITIES OF THE REGISTRANT ALSO ACTS AS A PRINCIPAL UNDERWRITER,
DEPOSITOR OR INVESTMENT ADVISER.
The sole principal underwriter for the Fund
is Invesco Aim Distributors, Inc. which acts as distributor for the
Registrant and the following other funds:
AIM CORE ALLOCATION PORTFOLIO SERIES
Series C
Series M
AIM COUNSELOR SERIES TRUST
AIM Floating Rate Fund
AIM Multi-Sector Fund
AIM Select Real Estate Income Fund
AIM Structured Core Fund
AIM Structured Growth Fund
AIM Structured Value Fund
AIM EQUITY FUNDS
AIM Capital Development Fund
AIM Charter Fund
AIM Constellation Fund
AIM Diversified Dividend Fund
AIM Large Cap Basic Value Fund
AIM Large Cap Growth Fund
C-9
AIM FUNDS GROUP
AIM Basic Balanced Fund
AIM European Small Company Fund
AIM Global Value Fund
AIM International Small Company Fund
AIM Mid Cap Basic Value Fund
AIM Select Equity Fund
AIM Small Cap Equity Fund
AIM GROWTH SERIES
AIM Basic Value Fund
AIM Conservative Allocation Fund
AIM Global Equity Fund
AIM Growth Allocation Fund
AIM Income Allocation Fund
AIM Independence New Fund
AIM Independence 2010 Fund
AIM Independence 2020 Fund
AIM Independence 2030 Fund
AIM Independence 2040 Fund
AIM Independence 2050 Fund
AIM International Allocation Fund
AIM Mid Cap Core Equity Fund
AIM Moderate Allocation Fund
AIM Moderate Growth Allocation Fund
AIM Moderately Conservative Allocation Fund
AIM Small Cap Growth Fund
AIM INTERNATIONAL MUTUAL FUNDS
AIM Asia Pacific Growth Fund
AIM European Growth Fund
AIM Global Aggressive Growth Fund
AIM Global Growth Fund
AIM International Core Equity Fund
AIM International Growth Fund
AIM INVESTMENT FUNDS
AIM China Fund
AIM Developing Markets Fund
AIM Global Health Care Fund
AIM International Total Return Fund
AIM Japan Fund
AIM Libor Alpha Fund
AIM Trimark Endeavor Fund
AIM Trimark Fund
AIM Trimark Small Companies Fund
AIM INVESTMENT SECURITIES FUNDS
AIM Global Real Estate Fund
AIM High Yield Fund
AIM Income Fund
AIM Intermediate Government Fund
AIM Limited Maturity Treasury Fund
AIM Money Market Fund
C-10
AIM Municipal Bond Fund
AIM Real Estate Fund
AIM Short Term Bond Fund
AIM Total Return Bond Fund
AIM SECTOR FUNDS
AIM Energy Fund
AIM Financial Services Fund
AIM Gold & Precious Metals Fund
AIM Leisure Fund
AIM Technology Fund
AIM Utilities Fund
AIM SUMMIT FUND
AIM TAX-EXEMPT FUNDS
AIM High Income Municipal Fund
AIM Tax-Exempt Cash Fund
AIM Tax-Free Intermediate Fund
AIM TREASURERS SERIES TRUST
Premier Portfolio
Premier Tax-Exempt Portfolio
Premier U.S. Government Money Portfolio
AIM VARIABLE INSURANCE FUNDS
AIM V.I. Basic Balanced Fund
AIM V.I. Basic Value Fund
AIM V.I. Capital Appreciation Fund
AIM V.I. Capital Development Fund
AIM V.I. Core Equity Fund
AIM V.I. Diversified Income Fund
AIM V.I. Dynamics Fund
AIM V.I. Financial Services Fund
AIM V.I. Global Health Care Fund
AIM V.I. Global Real Estate Fund
AIM V.I. Government Securities Fund
AIM V.I. High Yield Fund
AIM V.I. International Growth Fund
AIM V.I. Large Cap Growth Fund
AIM V.I. Leisure Fund
AIM V.I. Mid Cap Core Equity Fund
AIM V.I. Money Market Fund
AIM V.I. Small Cap Equity Fund
AIM V.I. Technology Fund
AIM V.I. Utilities Fund
SHORT-TERM INVESTMENT TRUST
Government & Agency Portfolio
Government Tax Advantage Portfolio
Liquid Assests Portfolio
STIC Prime Portfolio
Treasury Portfolio
TAX-FREE INVESTMENTS TRUST
Tax-Free Cash Reserve Portfolio
C-11
NAME AND PRINCIPAL
BUSINESS ADDRESS*
|
|
POSITIONS AND OFFICES WITH REGISTRANT
|
|
POSITIONS AND OFFICES WITH
UNDERWRITER
|
Gary
K. Wendler
|
|
None
|
|
Director
|
John
M. Zerr
|
|
None
|
|
Director, Senior Vice President, Secretary and Chief Legal Officer
|
John
Cooper
|
|
None
|
|
Executive Vice President
|
Brian
Lee
|
|
None
|
|
Executive Vice President
|
Philip
A. Taylor
|
|
None
|
|
Director
|
|
|
|
|
|
|
*
The
principal business address for all directors and executive officers is Invesco
Aim Distributors, Inc., 11 Greenway Plaza, Suite 100, Houston, Texas
77046-1173
PROVIDE THE
INFORMATION REQUIRED BY THE FOLLOWING TABLE FOR ALL COMMISSIONS AND OTHER
COMPENSATION RECEIVED DIRECTLY, OR INDIRECTLY, FROM THE FUND DURING THE LAST
FISCAL YEAR BY EACH PRINCIPAL UNDERWRITER WHO IS NOT AN AFFILIATED PERSON OF
THE FUND OR ANY AFFILIATED PERSON OF AN AFFILIATED PERSON:
Not
applicable.
Item 28. Location of Accounts
and Records.
STATE THE NAME
AND ADDRESS OF EACH PERSON MAINTAINING PRINCIPAL POSSESSION OF EACH ACCOUNT,
BOOK OR OTHER DOCUMENT REQUIRED TO BE MAINTAINED BY SECTION 3 1(A) OF
THE 1940 ACT [15 U.S.C. 80A-30 (A)] AND THE RULES UNDER THAT SECTION.
The books, accounts and other documents required by Section 31(a) under
the Investment Company Act of 1940, as amended, and the rules promulgated
thereunder are maintained in the physical possession of The Bank of New York, 101
Barclay Street, New York, New York 10286.
Item 29. Management Services.
PROVIDE A
SUMMARY OF THE SUBSTANTIVE PROVISIONS OF ANY MANAGEMENT-RELATED SERVICE
CONTRACT NOT DISCUSSED IN PART A OR PART B, DISCLOSING THE PARTIES TO
THE CONTRACT AND THE TOTAL AMOUNT PAID AND BY WHOM, FOR THE FUNDS LAST THREE
FISCAL YEARS.
Not
applicable.
Item 30. Undertakings.
Registrant
hereby undertakes that whenever a Shareholder or Shareholders who meet the
requirements of Section 16(c) of the 1940 Act inform the Board of
Trustees of his or their desire to communicate with other Shareholders of the
Fund the Trustee will inform such Shareholder(s) as to the approximate
number of Shareholders of record and the approximate costs of mailing or afford
said Shareholders access to a list of Shareholders.
Registrant
hereby undertakes to furnish each person to whom a Prospectus is delivered with
a copy of the Registrants annual report to shareholders, upon request and
without charge.
C-12
SIGNATURES
Pursuant to the requirements
of the Securities Act of 1933, as amended, and the Investment Company Act of
1940, as amended, the Fund certifies that it meets all of the requirements for
effectiveness of this registration statement under Rule 485(b) under the
Securities Act and has duly caused this Registration Statement to be signed on
its behalf by the undersigned, duly authorized, in the City of Wheaton and
State of Illinois,
on the 1st day of July, 2008.
|
PowerShares
Exchange-Traded Fund Trust
|
|
|
|
|
|
|
|
By:
|
/s/ Harold Bruce Bond
|
|
|
Title: Harold Bruce Bond, President
|
Pursuant to
the requirements of the Securities Act of 1933, this registration statement has
been signed below by the following persons in the capacities indicated on the
dates indicated.
SIGNATURE
|
|
TITLE
|
|
DATE
|
|
|
|
|
|
/s/ Harold
Bruce Bond
|
|
President
and Chairman
|
|
July 1, 2008
|
|
|
|
|
|
Harold Bruce
Bond
|
|
|
|
|
|
|
|
|
|
/s/ Bruce T.
Duncan
|
|
Chief
Financial Officer, Treasurer and Secretary
|
|
July 1, 2008
|
|
|
|
|
|
Bruce T.
Duncan
|
|
|
|
|
|
|
|
|
|
*/s/ Ronn R.
Bagge
|
|
Trustee
|
|
July 1, 2008
|
|
|
|
|
|
Ronn R.
Bagge
|
|
|
|
|
|
|
|
|
|
*/s/ Marc M.
Kole
|
|
Trustee
|
|
July 1, 2008
|
|
|
|
|
|
Marc M. Kole
|
|
|
|
|
|
|
|
|
|
*/s/ D. Mark
McMillan
|
|
Trustee
|
|
July 1, 2008
|
|
|
|
|
|
D. Mark
McMillan
|
|
|
|
|
|
|
|
|
|
*/s/ Philip
M. Nussbaum
|
|
Trustee
|
|
July 1, 2008
|
|
|
|
|
|
Philip M.
Nussbaum
|
|
|
|
|
|
|
|
|
|
*/s/ Donald
H. Wilson
|
|
Trustee
|
|
July 1, 2008
|
|
|
|
|
|
Donald H.
Wilson
|
|
|
|
|
*By: /s/ Stuart M. Strauss
|
|
|
|
July 1, 2008
|
|
|
|
|
|
Stuart M.
Strauss
|
|
|
|
|
Attorney-In-Fact
|
|
|
|
|
Exhibit Index
Ex (i)(32)
Consent
of Clifford Chance US LLP
Ex (j)(16)
Consent
of PricewaterhouseCoopers LLP
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