UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-CSR
CERTIFIED SHAREHOLDER REPORT OF REGISTERED
MANAGEMENT INVESTMENT COMPANIES
Investment Company Act file number | 811-21265 | |||||||
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PowerShares Exchange-Traded Fund Trust | ||||||||
(Exact name of registrant as specified in charter) | ||||||||
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301 W. Roosevelt Road |
| 60187 | ||||||
(Address of principal executive offices) |
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Andrew Schlossberg | ||||||||
(Name and address of agent for service) | ||||||||
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Registrant’s telephone number, including area code: | 800-983-0903 |
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Date of fiscal year end: | April 30 |
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Date of reporting period: | April 30, 2013 |
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Item 1. Reports to Stockholders.
The Registrant’s annual report transmitted to shareholders pursuant to Rule 30e-1 under the Investment Company Act of 1940 is as follows:
2013 Annual Report to Shareholders
April 30, 2013
PowerShares Buyback AchieversTM Portfolio (PKW)
PowerShares Dividend AchieversTM Portfolio (PFM)
PowerShares Financial Preferred Portfolio (PGF)
PowerShares High Yield Equity Dividend
AchieversTM Portfolio (PEY)
PowerShares International Dividend
AchieversTM Portfolio (PID)
Table of Contents
The Market Environment | 2 | ||||||
Manager's Analysis | 4 | ||||||
Fees and Expenses | 23 | ||||||
Dividend Income Portfolios | |||||||
Schedules of Investments | |||||||
PowerShares Buyback AchieversTM Portfolio (PKW) | 25 | ||||||
PowerShares Dividend AchieversTM Portfolio (PFM) | 28 | ||||||
PowerShares Financial Preferred Portfolio (PGF) | 31 | ||||||
PowerShares High Yield Equity Dividend AchieversTM Portfolio (PEY) | 33 | ||||||
PowerShares International Dividend AchieversTM Portfolio (PID) | 34 | ||||||
Statements of Assets and Liabilities | 36 | ||||||
Statements of Operations | 37 | ||||||
Statements of Changes in Net Assets | 38 | ||||||
Financial Highlights | 40 | ||||||
Notes to Financial Statements | 43 | ||||||
Report of Independent Registered Public Accounting Firm | 56 | ||||||
Tax Information | 57 | ||||||
Trustees and Officers | 58 | ||||||
Board Considerations Regarding Approval of Continuation of Investment Advisory Agreement | 66 |
The Market Environment
Domestic Equity:
The fiscal year ended April 30, 2013, began amid negative investor sentiment; the ongoing eurozone sovereign debt crisis intensified and equity markets declined. Throughout the summer, news from Europe and China was poor; this precipitated a slowdown in the U.S., where market performance and economic data were mixed. Employment data, for instance, showed some improvement – but not enough. Companies generally met earnings expectations but missed revenue guidance.
In early fall, as the European Central Bank implemented new measures to support member economies and the U.S. Federal Reserve initiated a third round of quantitative easing, consumer sentiment began to improve. Businesses, on the other hand, grew more hesitant to spend in the second half of the fiscal year. This was due in large part to uncertainty surrounding U.S. election results, "fiscal cliff" negotiations and sequestration spending cuts in early 2013. However, for the first time in years, U.S. markets appeared willing to look past national headline events. U.S. equity markets were generally strong in the final five months of the reporting period, with major market indexes setting multi-year or even all-time highs.
International Equity:
The fiscal year began with improving economic data in the U.S. However, the ongoing eurozone sovereign debt crisis intensified in May 2012, dominating headlines and creating significant volatility in global equity markets. This negative news from overseas precipitated a slowdown in the U.S., where economic data began to decelerate over the summer. While corporate earnings remained solid until late in the year, financial markets were negatively influenced by economic data.
Fears about the fate of the eurozone began to subside after the European Central Bank announced new measures to support member economies through potentially unlimited purchases of sovereign debt, among other measures. At the same time, continued risk aversion among investors and corporations, along with tepid employment growth, prompted the U.S. Federal Reserve to initiate a third round of quantitative easing and to promise to remain accommodative until the labor market outlook improved materially. Asian governments continued to try to balance key aims of supporting growth while preventing asset bubbles. China announced a surprise interest rate cut in July and the Bank of Japan announced an expansion and extension of its asset purchase plan in September, following the U.S. and European central banks' monetary easing announcements.
Toward the end of 2012 there was uncertainty surrounding the U.S. presidential election and the "fiscal cliff." Policymakers managed a fiscal cliff compromise on the first day of 2013. Although decisions about government spending and whether to raise the debt ceiling or balance the budget were delayed until a later date, equity markets responded favorably to the compromise.
Despite volatility for much of the fiscal year ended April 30, 2013, major equity market indexes delivered double-digit gains, and 9 of the 10 sectors of the MSCI World Index had positive returns.(1)
(1) Source: Bloomberg
2
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Manager's Analysis
PowerShares Buyback AchieversTM Portfolio (ticker: PKW)
As an index fund, the PowerShares Buyback AchieversTM Portfolio (the "Fund") is passively managed and attempts to track the returns of an underlying index. The Fund seeks investment results that generally correspond (before fees and expenses) to the price and yield of the NASDAQ Buyback Achievers Index (the "Index"). The Fund generally will invest at least 90% of its total assets in common stocks that comprise the Index.
In order to be eligible for inclusion in the Index, a company must trade on the NYSE, NYSE MKT or NASDAQ, be incorporated in the United States or one of its territories, have a minimum average daily cash volume of $500,000 during the December and November prior to each reconstitution date and have repurchased at least 5% of its outstanding shares in the twelve months ended December 31. Companies that are eligible and selected for inclusion in the Index are weighted according to a modified market capitalization weighting methodology annually and the Index is rebalanced quarterly, with no company exceeding 5% of the Index as of a rebalance or reconstitution date.
Effective December 28, 2012, the NASDAQ OMX Group, Inc. replaced Mergent®, Inc as the Index Provider of the Index. Effective February 25, 2013, the name of the Index changed from Share Buyback AchieversTM Index to NASDAQ Buyback Achievers Index. There were no changes to the methodology by which the Index Provider calculates the Index in connection with either change.
For the fiscal year ended April 30, 2013, on a market price basis, the Fund returned 19.11%. On a net asset value ("NAV") basis, the Fund returned 19.08%. During the same time period, the Index returned 20.02%. During the fiscal year, the Fund fully replicated the components of the Index; therefore, the Fund's performance differed from the return of the Index primarily due to fees and operating expenses that the Fund incurred during the period.
During this same time period, the S&P 500® Index returned 16.89%, and the Russell 3000® Value Index returned 21.64%. The S&P 500® Index and Russell 3000® Value Index (the "Benchmark Indices") are unmanaged indices weighted by market capitalization based on the average performance of approximately 500 and 2,105 securities, respectively. The adviser provided these additional comparative benchmarks to help investors better understand how the investment results of the Fund compare to the performance of broad-based market benchmarks.
The adviser selected the S&P 500® Index and the Russell 3000® Value Index as comparative indices to the Fund because of their recognition in the marketplace and their representation of the broader U.S. stock market. These reasons make their performance relevant when comparing to the Fund's performance.
The performance of the Fund differed in part from these Benchmark Indices in part because the Fund tracks an Index that employs a modified market capitalization weighting methodology and stock selection methodology based on stock buybacks, whereas the Russell 3000® Value Index weights stocks based on market capitalization and focuses on lower price-to-book and lower forecasted growth values and the S&P 500® Index weights stocks based on market capitalization. More specifically, relative to the Russell 3000® Value Index, the Fund underperformed largely because it was overweight in the Information Technology sector, as well as the poor performance of specific stocks included within the Index from that sector.
Relative to the S&P 500® Index, the Fund was overweight in the Consumer Discretionary sector and the Health Care sector during the fiscal year ended April 30, 2013. The majority of the Fund's outperformance relative to the S&P 500® Index during that period can be attributed to these sector allocations, as well as to the positive performance of specific stocks within the Health Care sector.
4
Manager's Analysis (Continued)
PowerShares Buyback AchieversTM Portfolio (ticker: PKW)
For the fiscal year ended April 30, 2013, the Consumer Discretionary sector contributed most significantly to the Fund's return, followed by the Health Care and Financials sectors, respectively. The Information Technology sector detracted most from the Fund's return.
Positions that contributed most significantly to the Fund's return included Amgen, Inc., a health care company (portfolio average weight of 3.69%); and Time Warner, Inc., a consumer discretionary company (portfolio average weight of 2.51%). Positions that detracted most significantly from the Fund's return included Intel Corp., an information technology company (no longer held at April 30, 2013); and Hewlett-Packard Co., an information technology company (no longer held at April 30, 2013).
Sector Breakdown (% of the Fund's
Net Assets) as of April 30, 2013
Consumer Discretionary | 34.1 | ||||||
Financials | 19.6 | ||||||
Information Technology | 16.6 | ||||||
Health Care | 12.2 | ||||||
Industrials | 7.4 | ||||||
Energy | 5.4 | ||||||
Consumer Staples | 4.0 | ||||||
Materials | 0.7 | ||||||
Telecommunication Services | 0.0 | ||||||
Money Market Fund | 0.1 | ||||||
Liabilities in excess of other assets | (0.1 | ) |
Top Ten Fund Holdings (% of the Fund's
Net Assets) as of April 30, 2013
Security | |||||||
Amgen, Inc. | 5.0 | ||||||
Oracle Corp. | 5.0 | ||||||
ConocoPhillips | 4.9 | ||||||
American International Group, Inc. | 4.1 | ||||||
Time Warner, Inc. | 3.8 | ||||||
News Corp., Class A | 3.2 | ||||||
Lowe's Cos., Inc. | 2.9 | ||||||
Travelers Cos., Inc. (The) | 2.2 | ||||||
DIRECTV | 2.2 | ||||||
Viacom, Inc., Class B | 1.9 | ||||||
Total | 35.2 |
5
Manager's Analysis (Continued)
PowerShares Buyback AchieversTM Portfolio (ticker: PKW)
Growth of a $10,000 Investment Since Inception†
Fund Performance History (%) As of April 30, 2013
3 Years | 3 Years | 5 Years | 5 Years | Fund Inception† | |||||||||||||||||||||||||||
1 Year | Avg. Ann.††† | Cumulative | Avg. Ann.††† | Cumulative | Avg. Ann.††† | Cumulative | |||||||||||||||||||||||||
Index | |||||||||||||||||||||||||||||||
NASDAQ Buyback Achievers Index†† | 20.02 | % | 17.47 | % | 62.08 | % | 10.73 | % | 66.45 | % | 6.98 | % | 53.56 | % | |||||||||||||||||
Russell 3000® Value Index | 21.64 | % | 12.12 | % | 40.94 | % | 4.36 | % | 23.81 | % | 2.56 | % | 17.40 | % | |||||||||||||||||
S&P 500® Index | 16.89 | % | 12.80 | % | 43.54 | % | 5.21 | % | 28.92 | % | 4.12 | % | 29.15 | % | |||||||||||||||||
Fund | |||||||||||||||||||||||||||||||
NAV Return | 19.08 | % | 16.64 | % | 58.67 | % | 9.96 | % | 60.74 | % | 6.18 | % | 46.41 | % | |||||||||||||||||
Market Price Return | 19.11 | % | 16.63 | % | 58.64 | % | 9.97 | % | 60.86 | % | 6.16 | % | 46.22 | % |
Fund Inception: December 20, 2006
Performance quoted above represents past performance. Past performance is not a guarantee of future results and current performance may be higher or lower than performance quoted. Investment returns and principal value will fluctuate, and shares of the Fund ("Fund Shares"), when redeemed or sold, may be worth more or less than their original cost. Had the adviser not waived fees and/or reimbursed expenses, performance would have been lower. The adviser has contractually agreed to waive fees and/or pay certain Fund expenses through August 31, 2014. According to the Fund's current prospectus, the total gross annual operating expense ratio was indicated as 0.79%. The Financial Highlights section of the Shareholders Report presents the expense ratios based on expenses incurred during the period covered by this report. NAV and Market Price returns assume that dividends and capital gain distributions have been reinvested in the Fund at NAV and Market 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.
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.
† Fund and Index returns are based on the inception date of the Fund. Returns for the Benchmark Indices are based on the closest month-end to the Fund's inception date.
†† Effective February 25, 2013, the NASDAQ OMX Group, Inc. replaced Mergent®, Inc. as the Index Provider of the Index. Effective February 25, 2013, the name of the Index changed from Share Buyback AchieversTM Index to NASDAQ Buyback Achievers Index. There were no changes to the methodology by which the Index Provider calculates the Index.
††† Average annualized.
6
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Manager's Analysis
PowerShares Dividend AchieversTM Portfolio (ticker: PFM)
As an index fund, the PowerShares Dividend Achievers Portfolio (the "Fund") is passively managed and attempts to track the returns of an underlying index. The Fund seeks investment results that generally correspond (before fees and expenses) to the price and yield of the NASDAQ US Broad Dividend Achievers Index (the "Index"). The Fund generally will invest at least 90% of its total assets in common stocks of companies that comprise the Index and that have raised their annual regular cash dividend payments for at least each of the last ten consecutive fiscal years.
In order to be included in the Index, a company must be incorporated in the United States or one of its territories, trade on the NYSE, NYSE MKT or NASDAQ, and have raised its regular annual cash dividend payments for at least each of the last ten consecutive fiscal years. It also must have a minimum average daily cash volume of $500,000 in the November and December prior to each reconstitution date. The companies that meet these qualifications are weighted in the Index according to a modified market capitalization methodology, with no company exceeding 5% of the Index as of a rebalance or reconstitution date.
Effective December 28, 2012, the NASDAQ OMX Group, Inc. replaced Mergent®, Inc as the Index Provider of the Index. Effective February 25, 2013, the name of the Index changed from Broad Dividend AchieversTM Index to NASDAQ US Broad Dividend Achievers Index. There were no changes to the methodology by which the Index Provider calculates the Index in connection with either change.
For the fiscal year ended April 30, 2013, on a market price basis, the Fund returned 18.68%. On a net asset value ("NAV") basis, the Fund returned 18.67%. During the same time period, the Index returned 19.31%. During the fiscal year, the Fund fully replicated the components of the Index; therefore, the Fund's performance differed from the return of the Index primarily due to fees and operating expenses that the Fund incurred during the period.
During this same time period, the S&P 500® Index returned 16.89%, and the Russell 3000® Value Index returned 21.64%. The S&P 500® Index and Russell 3000® Value Index (the "Benchmark Indices") are unmanaged indices weighted by market capitalization based on the average performance of approximately 500 and 2,105 securities, respectively. The adviser provided these additional comparative benchmarks to help investors better understand how the investment results of the Fund compare to the performance of other indices similar to the Index, as well as to that of broad-based market benchmarks.
The adviser selected the Russell 3000® Value Index as a comparative benchmark for its broad-based components and exposure to more value-oriented companies, which have characteristics similar to the holdings of the Fund. The S&P 500® Index does not have the same specific value-oriented relevance as the Russell 3000® Value Index; however, it was also selected for its recognition in the marketplace, and its performance comparison is a useful measure for investors as a broad representation of the overall U.S. stock market.
The performance of the Fund differed from these Benchmark Indices in part because the Fund tracks an Index that employs a stock selection methodology based on dividends, whereas the Russell 3000® Value Index weights stocks based on market capitalization and focuses on companies with lower price-to-book and lower forecasted growth values and the S&P 500® Index is a broad-based index that weights stocks based on market capitalization. Additionally, relative to the Russell 3000® Value Index, the Fund underperformed largely because of the positive performance of specific stocks included in the Index from the Consumer Discretionary and Industrials sectors.
8
Manager's Analysis (Continued)
PowerShares Dividend AchieversTM Portfolio (ticker: PFM)
Relative to the S&P 500® Index, the Fund was underweight in the Information Technology sector and overweight in the Consumer Staples sector during the fiscal year ended April 30, 2013. The majority of the Fund's outperformance relative to the S&P 500® Index during that period can be attributed to these sector allocations.
For the fiscal year ended April 30, 2013, the Consumer Staples sector contributed most significantly to the Fund's return, followed by the Health Care and Energy sectors, respectively. There were no detracting sectors.
Positions that contributed most significantly to the Fund's return included Wal-Mart Stores, Inc., a consumer staples company (portfolio average weight of 5.18%); and Johnson & Johnson, a health care company (portfolio average weight of 4.90%). Positions that detracted most significantly from the Fund's return included Caterpillar, Inc., an industrials company (portfolio average weight of 1.55%); and Avon Products Inc., a consumer staples company (no longer held at April 30, 2013).
Sector Breakdown (% of the Fund's
Net Assets) as of April 30, 2013
Consumer Staples | 25.2 | ||||||
Energy | 17.6 | ||||||
Industrials | 12.2 | ||||||
Health Care | 9.3 | ||||||
Consumer Discretionary | 8.3 | ||||||
Information Technology | 6.2 | ||||||
Financials | 5.9 | ||||||
Materials | 5.6 | ||||||
Telecommunication Services | 4.9 | ||||||
Utilities | 4.8 | ||||||
Liabilities in excess of other assets | (0.0 | ) |
Top Ten Fund Holdings (% of the Fund's
Net Assets) as of April 30, 2013
Security | |||||||
Johnson & Johnson | 5.1 | ||||||
Wal-Mart Stores, Inc. | 5.1 | ||||||
Chevron Corp. | 5.0 | ||||||
Procter & Gamble Co. (The) | 4.9 | ||||||
Exxon Mobil Corp. | 4.9 | ||||||
AT&T, Inc. | 4.8 | ||||||
International Business Machines Corp. | 4.7 | ||||||
Coca-Cola Co. (The) | 4.4 | ||||||
PepsiCo, Inc. | 3.0 | ||||||
McDonald's Corp. | 2.4 | ||||||
Total | 44.3 |
9
Manager's Analysis (Continued)
PowerShares Dividend AchieversTM Portfolio (ticker: PFM)
Growth of a $10,000 Investment Since Inception†
Fund Performance History (%) As of April 30, 2013
3 Years | 3 Years | 5 Years | 5 Years | Fund Inception† | |||||||||||||||||||||||||||
1 Year | Avg. Ann.††† | Cumulative | Avg. Ann.††† | Cumulative | Avg. Ann.††† | Cumulative | |||||||||||||||||||||||||
Index | |||||||||||||||||||||||||||||||
NASDAQ US Broad Dividend Achievers Index†† | 19.31 | % | 14.79 | % | 51.27 | % | 5.61 | % | 31.35 | % | 5.74 | % | 53.02 | % | |||||||||||||||||
S&P 500® Index | 16.89 | % | 12.80 | % | 43.54 | % | 5.21 | % | 28.92 | % | 5.79 | % | 53.91 | % | |||||||||||||||||
Russell 3000® Value Index | 21.64 | % | 12.12 | % | 40.94 | % | 4.36 | % | 23.81 | % | 5.17 | % | 47.21 | % | |||||||||||||||||
Fund | |||||||||||||||||||||||||||||||
NAV Return | 18.67 | % | 14.12 | % | 48.61 | % | 4.99 | % | 27.60 | % | 5.08 | % | 45.88 | % | |||||||||||||||||
Market Price Return | 18.68 | % | 14.10 | % | 48.53 | % | 4.98 | % | 27.52 | % | 5.07 | % | 45.79 | % |
Fund Inception: September 15, 2005
Performance quoted above represents past performance. Past performance is not a guarantee of future results and current performance may be higher or lower than performance quoted. Investment returns and principal value will fluctuate, and shares of the Fund ("Fund Shares"), when redeemed or sold, may be worth more or less than their original cost. Had the adviser not waived fees and/or reimbursed expenses in the past, performance would have been lower. According to the Fund's current prospectus, the total gross annual operating expense ratio was indicated as 0.60%. The Financial Highlights section of the Shareholders Report presents the expense ratios based on expenses incurred during the period covered by this report. NAV and Market Price returns assume that dividends and capital gain distributions have been reinvested in the Fund at NAV and Market 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.
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.
† Fund and Index returns are based on the inception date of the Fund. Returns for the Benchmark Indices are based on the closest month-end to the Fund's inception date.
†† Effective February 25, 2013, the NASDAQ OMX Group, Inc. replaced Mergent®, Inc. as the Index Provider of the Index. Effective February 25, 2013, the name of the Index changed from Broad Dividend AchieversTM Index to NASDAQ US Broad Dividend Achievers Index. There were no changes to the methodology by which the Index Provider calculates the Index.
††† Average annualized.
10
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Manager's Analysis
PowerShares Financial Preferred Portfolio (ticker: PGF)
As an index fund, the PowerShares Financial Preferred Portfolio (the "Fund") is passively managed and attempts to track the returns of an underlying index. The Fund seeks investment results that generally correspond (before fees and expenses) to the price and yield of the Wells Fargo® Hybrid & Preferred Securities Financial Index (the "Index"). The Fund generally will invest at least 90% of its total assets in preferred securities of financial institutions that comprise the Index.
The Index provider selects constituents for the Index to attempt to portray a cross-section of the universe of preferred securities issued by financial institutions and listed on the NYSE or NYSE MKT. The constituents are selected using a proprietary selection methodology based on a number of criteria including ratings, maturity, shares outstanding, dividend classification and liquidity. The constituents are then weighted by a modified market capitalization methodology designed to limit the concentration of the largest securities. No security may account for more than 20% of the Index.
For the fiscal year ended April 30, 2013, on a market price basis, the Fund returned 11.71%. On a net asset value ("NAV") basis, the Fund returned 11.78%. During the same time period, the Index returned 12.58%. The Fund employs a sampling methodology to attempt to track the Index, rather than a full replication methodology, due to relative illiquidity of the constituent securities of the Index. The Fund's performance differed from the return of the Index primarily due to fees and operating expenses that the Fund incurred during the period.
During this same time period, the S&P U.S. Preferred Stock Index returned 12.08%, and the S&P 500® Index returned 16.89%. The S&P U.S. Preferred Stock Index and S&P 500® Index (the "Benchmark Indices") are unmanaged indices weighted by market capitalization based on the average performance of approximately 242 and 500 securities, respectively. The adviser provided these additional comparative benchmarks to help investors better understand how the investment results of the Fund compare to the performance of another index similar to the Index, as well as to that of a broad-based market benchmark.
The adviser selected the S&P U.S. Preferred Stock Index as a comparative index to the Fund because of its shared exposure to preferred securities. The S&P 500® Index does not have the same specific preferred stock relevance; however, its performance comparison is a useful measure for investors as a broad representation of the overall U.S. stock market.
The performance of the Fund differed from these Benchmark Indices in part because the Index employs a modified market capitalization weighting methodology that limits specific issuer concentrations, whereas the Benchmark Indices select and weight stocks based on market capitalization. Relative to the S&P U.S. Preferred Stock Index, the Fund performed substantially in-line with that index due to the shared exposure to preferred securities.
Relative to the S&P 500® Index the Fund was overweight in preferred stock of financial companies during the fiscal year ended April 30, 2013. Financial preferred stocks underperformed their peers within the Financials sector causing the Fund to underperform the S&P 500® Index.
For the fiscal year ended April 30, 2013, the Banks industry contributed most significantly to the Fund's return, followed by the Insurance and Diversified Financial Services industries, respectively. There were no detracting industries.
Positions that contributed most significantly to the Fund's return included HSBC Holdings PLC, a banks company (portfolio average weight of 9.36%); and Royal Bank of Scotland Group PLC, a banks company (portfolio average weight of 2.75%). There were no detracting positions.
12
Manager's Analysis (Continued)
PowerShares Financial Preferred Portfolio (ticker: PGF)
Industry Breakdown (% of the Fund's
Net Assets) as of April 30, 2013
Banks | 73.4 | ||||||
Insurance | 24.8 | ||||||
Diversified Financial Services | 3.0 | ||||||
Savings & Loans | 0.9 | ||||||
Money Market Fund | 0.7 | ||||||
Liabilities in excess of other assets | (2.8 | ) |
Top Ten Fund Holdings (% of the Fund's
Net Assets) as of April 30, 2013
Security | |||||||
HSBC Holdings PLC, 8.00%, Series 2 | 8.2 | ||||||
ING Groep NV, 8.50% | 5.4 | ||||||
PNC Financial Services Group, Inc. (The), 6.13%, Series P | 4.5 | ||||||
Bank of America Corp., 8.20%, Series H | 4.4 | ||||||
HSBC Holdings PLC, 8.13% | 4.3 | ||||||
ING Groep NV, 7.38% | 3.9 | ||||||
Bank of America Corp., 8.63%, Series 8 | 3.8 | ||||||
Wells Fargo & Co., 8.00%, Series J | 3.7 | ||||||
Barclays Bank PLC, 8.13%, Series 5 | 3.7 | ||||||
BB&T Corp., 5.63%, Series E | 3.6 | ||||||
Total | 45.5 |
13
Manager's Analysis (Continued)
PowerShares Financial Preferred Portfolio (ticker: PGF)
Growth of a $10,000 Investment Since Inception†
Fund Performance History (%) As of April 30, 2013
3 Years | 3 Years | 5 Years | 5 Years | Fund Inception† | |||||||||||||||||||||||||||
1 Year | Avg. Ann.†† | Cumulative | Avg. Ann.†† | Cumulative | Avg. Ann.†† | Cumulative | |||||||||||||||||||||||||
Index | |||||||||||||||||||||||||||||||
Wells Fargo® Hybrid & Preferred Securities Financial Index | 12.58 | % | 11.63 | % | 39.10 | % | 6.82 | % | 39.11 | % | 4.46 | % | 32.31 | % | |||||||||||||||||
S&P U.S. Preferred Stock Index | 12.08 | % | 9.58 | % | 31.60 | % | 6.40 | % | 36.38 | % | 4.67 | % | 34.07 | % | |||||||||||||||||
S&P 500® Index | 16.89 | % | 12.80 | % | 43.54 | % | 5.21 | % | 28.92 | % | 4.29 | % | 30.96 | % | |||||||||||||||||
Fund | |||||||||||||||||||||||||||||||
NAV Return | 11.78 | % | 10.55 | % | 35.09 | % | 5.78 | % | 32.41 | % | 3.18 | % | 22.22 | % | |||||||||||||||||
Market Price Return | 11.71 | % | 10.69 | % | 35.61 | % | 5.71 | % | 32.01 | % | 3.08 | % | 21.47 | % |
Fund Inception: December 1, 2006
Performance quoted above represents past performance. Past performance is not a guarantee of future results and current performance may be higher or lower than performance quoted. Investment returns and principal value will fluctuate, and shares of the Fund ("Fund Shares"), when redeemed or sold, may be worth more or less than their original cost. Had the adviser not waived fees and/or reimbursed expenses in the past, performance would have been lower. According to the Fund's current prospectus, the total gross annual operating expense ratio was indicated as 0.66%. The Financial Highlights section of the Shareholders Report presents the expense ratios based on expenses incurred during the period covered by this report. NAV and Market Price returns assume that dividends and capital gain distributions have been reinvested in the Fund at NAV and Market 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.
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.
† Fund and Index returns are based on the inception date of the Fund. Returns for the Benchmark Indices are based on the closest month-end to the Fund's inception date.
†† Average annualized.
14
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Manager's Analysis
PowerShares High Yield Equity Dividend AchieversTM Portfolio (ticker: PEY)
As an index fund, the PowerShares High Yield Equity Dividend AchieversTM Portfolio (the "Fund") is passively managed and attempts to track the returns of an underlying index. The Fund seeks investment results that generally correspond (before fees and expenses) to the price and yield of the NASDAQ Dividend Achievers 50 Index (the "Index"). The Fund generally will invest at least 90% of its total assets in common stocks of companies that have a consistent record of dividend increases and that comprise the Index.
In order to be included in the Index, a company must have consistent increases in dividend payments over the last ten calendar or fiscal years of the company and a minimum average daily cash volume of $500,000 in the November and December prior to the reconstitution date in January. The company must also be incorporated in the United States, and cannot be a real estate investment trust or limited partnership. Companies are ranked according to yield, using the annualized current dividend and closing price. The top 50 yielding companies within the above universe are included in the Index and weighted according to a modified equal weighting methodology.
Effective December 28, 2012, the NASDAQ OMX Group, Inc. replaced Mergent®, Inc as the Index Provider of the Index. Effective February 25, 2013, the name of the Index changed from Mergent Dividend AchieversTM 50 Index to NASDAQ Dividend Achievers 50 Index. There were no changes to the methodology by which the Index Provider calculates the Index in connection with either change.
For the fiscal year ended April 30, 2013, on a market price basis, the Fund returned 20.05%. On a net asset value ("NAV") basis, the Fund returned 20.16%. During the same time period, the Index returned 20.84%. During the fiscal year, the Fund fully replicated the components of the Index; therefore, the Fund's performance differed from the return of the Index primarily due to fees and operating expenses that the Fund incurred during the period.
During this same time period, the Dow Jones U.S. Select Dividend Index returned 20.15%, the S&P 500® Value Index returned 20.33%, and the S&P 500® Index returned 16.89%. The Dow Jones U.S. Select Dividend Index, S&P 500® Value Index and S&P 500® Index (the "Benchmark Indices") are unmanaged indices, with the Dow Jones U.S. Select Dividend Index being weighted by indicated dividend yield, and the S&P 500® Value Index and S&P 500® Index being weighted by market capitalization based on the average performance of approximately 357 and 500 securities, respectively. The adviser provided these additional comparative benchmarks to help investors better understand how the investment results of the Fund compare to the performance of other indices similar to the Index, as well as to that of a broad-based market benchmark.
The adviser selected the Dow Jones U.S. Select Dividend Index to provide comparative benchmark performance measurement to similar dividend paying securities. The S&P 500® Value Index was selected to provide comparative benchmark performance measurement to value-oriented stocks. The S&P 500® Index was selected for its recognition in the marketplace, as well as its broad representation of the overall U.S. stock market.
In the case of the S&P 500® Value Index and the S&P 500® Index, the performance of the Fund differed from these Benchmark Indices in part because the Fund tracks an Index that employs a stock selection methodology that selects companies based on their dividend yield, whereas these Benchmark Indices select and weight stocks based on market capitalization. The Fund's performance was in line with the performance of the S&P 500® Value Index and the Dow Jones U.S. Select Dividend Index.
Relative to the S&P 500® Index, the Fund was overweight in the Utilities sector and underweight in the Information Technology sector during the fiscal year ended April 30, 2013. The majority of the Fund's
16
Manager's Analysis (Continued)
PowerShares High Yield Equity Dividend AchieversTM Portfolio (ticker: PEY)
outperformance relative to the S&P 500® Index during that period can be attributed to these sector allocations.
For the fiscal year ended April 30, 2013, the Electric industry contributed most significantly to the Fund's return, followed by the Gas and Insurance industries, respectively. The Office/Business Equipment industry detracted most from the Fund's return, followed by the Cosmetics/Personal Care and Computers industries, respectively.
Positions that contributed most significantly to the Fund's return included Old Republic International Corp., an insurance company (portfolio average weight of 3.55%); and Leggett & Platt, Inc., a miscellaneous manufacturing company (portfolio average weight of 2.24%). Positions that detracted most significantly from the Fund's return included Pitney Bowes, Inc., an office/business equipment company (portfolio average weight of 4.79%); and Avon Products Inc., a cosmetics/personal care company (no longer held at April 30, 2013).
Industry Breakdown (% of the Fund's
Net Assets) as of April 30, 2013
Electric | 17.5 | ||||||
Gas | 16.4 | ||||||
Banks | 14.1 | ||||||
Insurance | 9.9 | ||||||
Agriculture | 9.1 | ||||||
Office/Business Equipment | 4.4 | ||||||
Water | 3.4 | ||||||
Household Products/Wares | 2.9 | ||||||
Telecommunications | 2.4 | ||||||
Aerospace/Defense | 2.3 | ||||||
Savings & Loans | 2.2 | ||||||
Media | 2.1 | ||||||
Oil & Gas | 2.1 | ||||||
Computers | 1.8 | ||||||
Diversified Financial Services | 1.7 | ||||||
Miscellaneous Manufacturing | 1.6 | ||||||
Packaging & Containers | 1.6 | ||||||
Food | 1.5 | ||||||
Pharmaceuticals | 1.5 | ||||||
Retail | 1.5 | ||||||
Money Market Fund | 0.3 | ||||||
Liabilities in excess of other assets | (0.3 | ) |
Top Ten Fund Holdings (% of the Fund's
Net Assets) as of April 30, 2013
Security | |||||||
Vector Group Ltd. | 4.8 | ||||||
Pitney Bowes, Inc. | 4.4 | ||||||
Mercury General Corp. | 3.7 | ||||||
Old Republic International Corp. | 2.9 | ||||||
Altria Group, Inc. | 2.6 | ||||||
AT&T, Inc. | 2.4 | ||||||
PPL Corp. | 2.3 | ||||||
Lockheed Martin Corp. | 2.3 | ||||||
AGL Resources, Inc. | 2.2 | ||||||
People's United Financial, Inc. | 2.2 | ||||||
Total | 29.8 |
17
Manager's Analysis (Continued)
PowerShares High Yield Equity Dividend AchieversTM Portfolio (ticker: PEY)
Growth of a $10,000 Investment Since Inception†
Fund Performance History (%) As of April 30, 2013
3 Years | 3 Years | 5 Years | 5 Years | Fund Inception† | |||||||||||||||||||||||||||
1 Year | Avg. Ann.††† | Cumulative | Avg. Ann.††† | Cumulative | Avg. Ann.††† | Cumulative | |||||||||||||||||||||||||
Index | |||||||||||||||||||||||||||||||
NASDAQ Dividend Achievers 50 Index†† | 20.84 | % | 13.70 | % | 46.97 | % | 4.17 | % | 22.67 | % | 0.93 | % | 8.11 | % | |||||||||||||||||
Dow Jones U.S. Select Dividend Index | 20.15 | % | 15.87 | % | 55.56 | % | 6.89 | % | 39.52 | % | 5.39 | % | 55.58 | % | |||||||||||||||||
S&P 500® Value Index | 20.33 | % | 12.08 | % | 40.81 | % | 3.68 | % | 19.79 | % | 5.13 | % | 52.32 | % | |||||||||||||||||
S&P 500® Index | 16.89 | % | 12.80 | % | 43.54 | % | 5.21 | % | 28.92 | % | 5.92 | % | 62.23 | % | |||||||||||||||||
Fund | |||||||||||||||||||||||||||||||
NAV Return | 20.16 | % | 13.02 | % | 44.38 | % | 3.58 | % | 19.24 | % | 0.51 | % | 4.40 | % | |||||||||||||||||
Market Price Return | 20.05 | % | 12.99 | % | 44.24 | % | 3.56 | % | 19.12 | % | 0.51 | % | 4.37 | % |
Fund Inception: December 9, 2004
Performance quoted above represents past performance. Past performance is not a guarantee of future results and current performance may be higher or lower than performance quoted. Investment returns and principal value will fluctuate, and shares of the Fund ("Fund Shares"), when redeemed or sold, may be worth more or less than their original cost. Had the adviser not waived fees and/or reimbursed expenses in the past, performance would have been lower. According to the Fund's current prospectus, the total gross annual operating expense ratio was indicated as 0.60%. The Financial Highlights section of the Shareholders Report presents the expense ratios based on expenses incurred during the period covered by this report. NAV and Market Price returns assume that dividends and capital gain distributions have been reinvested in the Fund at NAV and Market 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.
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.
† Fund and Index returns are based on the inception date of the Fund. Returns for the Benchmark Indices are based on the closest month-end to the Fund's inception date.
†† Effective February 25, 2013, the NASDAQ OMX Group, Inc. replaced Mergent®, Inc. as the Index Provider of the Index. Effective February 25, 2013, the name of the Index changed from Mergent Dividend AchieversTM 50 Index to NASDAQ Dividend Achievers 50 Index. There were no changes to the methodology by which the Index Provider calculates the Index.
††† Average annualized.
18
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Manager's Analysis
PowerShares International Dividend AchieversTM Portfolio (ticker: PID)
As an index fund, the PowerShares International Dividend AchieversTM Portfolio (the "Fund") is passively managed and attempts to track the returns of an underlying index. The Fund seeks investment results that generally correspond (before fees and expenses) to the price and yield of the NASDAQ International Dividend Achievers Index (the "Index"). The Fund generally will invest at least 90% of its total assets in the securities that comprise the Index.
The Index's universe is limited to American Depositary Receipts ("ADRs") and Global Depositary Receipts ("GDRs") that trade on the London Stock Exchange ("LSE"), as well as ADRs and non-US common stock that trade on the NYSE, NYSE MKT, or NASDAQ. In order to be included in the Index, a company must have increased consistently its aggregate annual regular dividend over the past five calendar or fiscal years. The company also must have a minimum average daily cash volume of $500,000 in the November and December prior to each reconstitution date. Companies that meet the above criteria generally are weighted according to their trailing twelve month dividend yield.
Effective December 28, 2012, the NASDAQ OMX Group, Inc. replaced Mergent®, Inc as the Index Provider of the Index. Effective February 25, 2013, the name of the Index changed from International Dividend AchieversTM Index to NASDAQ International Dividend Achievers Index. There were no changes to the methodology by which the Index Provider calculates the Index in connection with either change.
For the fiscal year ended April 30, 2013, on a market price basis, the Fund returned 15.75%. On a net asset value ("NAV") basis, the Fund returned 15.63%. During the same time period, the Index returned 16.39%. During the fiscal year, the Fund fully replicated the components of the Index; therefore, the Fund's performance differed from the return of the Index primarily due to fees and operating expenses that the Fund incurred during the period.
During this same time period, the Dow Jones EPAC Select Dividend Index returned 20.02%, the MSCI EAFE® Value Index returned 21.70%, and the S&P 500® Index returned 16.89%. The Dow Jones EPAC Select Dividend Index, MSCI EAFE® Value Index and S&P 500® Index (the "Benchmark Indices") are unmanaged indices, with the Dow Jones EPAC Select Dividend Index being weighted based on dividend yield, and the MSCI EAFE®Value Index and S&P 500® Index being weighted by market capitalization based on the average performance of approximately 497 and 500 securities, respectively. The adviser provided these additional comparative benchmarks to help investors better understand how the investment results of the Fund compare to the performance of other indices similar to the Index, as well as to that of broad-based market benchmarks.
The adviser selected the Dow Jones EPAC Select Dividend Index and the MSCI EAFE® Value Index to provide comparative benchmark performance measurements of similar dividend-paying securities and the international developed equity market. The MSCI EAFE® Value Index does not have the same specific dividend-related relevance as the Dow Jones EPAC Select Dividend Index; however, its performance comparison is a useful measure for investors as a broad representation of the overall international developed stock market. The S&P 500® Index does not have the same specific dividend-related relevance or international developed equity market relevance as the Dow Jones EPAC Select Dividend Index or the MSCI EAFE® Value Index; however, its performance comparison is a useful measure for investors as a broad representation of the overall U.S. stock market, an important benchmark for investment performance.
In the case of the MSCI EAFE® Value Index and the S&P 500® Index, the performance of the Fund differed in part from these comparative indexes in part because the Fund tracks an Index that employs a dividend yield weighting and stock selection methodology, whereas these comparative indices select and weight
20
Manager's Analysis (Continued)
PowerShares International Dividend AchieversTM Portfolio (ticker: PID)
stocks based on market capitalization. More specifically, relative to the MSCI EAFE® Value Index, the Fund was underweight in the Financials sector and overweight in the Energy sector. The majority of the Fund's underperformance relative to this index during the period can be attributed to these sector allocations. In the case of the Dow Jones EPAC Select Dividend Index, the performance of the Fund differed from this comparative index because the Index's stock selection methodology differs from that of the comparative index. More specifically, relative to the Dow Jones EPAC Select Dividend Index, stock selection within the Financials sector and Energy sector was a large cause of underperformance for the Fund.
Relative to the S&P 500® Index, the Fund was overweight the Energy sector and Materials sector during the fiscal year ended April 30, 2013. The majority of the Fund's underperformance relative to the S&P 500® Index during that period can be attributed to the performance of specific stocks within these sectors, as well as the allocation to these sectors.
For the fiscal year ended April 30, 2013, the securities in the country of United Kingdom contributed most significantly to the Fund's return, followed by those in Canada and United States, respectively. Securities in Norway detracted most from the Fund's return, followed by those from Israel and Chile, respectively.
Positions that contributed most significantly to the Fund's return included Delhaize Group S.A. ADR (portfolio average weight of 2.10%); and Sanofi ADR (portfolio average weight of 2.03%). Positions that detracted most significantly from the Fund's return included Vale S.A. ADR (no longer held at April 30, 2013); and Textainer Group Holdings Ltd. (portfolio average weight of 0.81%).
Sector Breakdown (% of the Fund's
Net Assets) as of April 30, 2013
Energy | 20.3 | ||||||
Telecommunication Services | 18.2 | ||||||
Health Care | 14.2 | ||||||
Consumer Staples | 12.0 | ||||||
Financials | 11.0 | ||||||
Consumer Discretionary | 9.3 | ||||||
Industrials | 6.1 | ||||||
Materials | 5.3 | ||||||
Information Technology | 2.0 | ||||||
Utilities | 1.6 | ||||||
Money Market Fund | 11.5 | ||||||
Liabilities in excess of other assets | (11.5 | ) |
Top Ten Fund Holdings (% of the Fund's
Net Assets) as of April 30, 2013
Security | |||||||
TELUS Corp. | 4.2 | ||||||
Teekay Offshore Partners LP | 3.9 | ||||||
Teekay LNG Partners LP | 3.7 | ||||||
AstraZeneca PLC ADR | 3.3 | ||||||
Vodafone Group PLC ADR | 3.3 | ||||||
LUKOIL OAO ADR | 3.2 | ||||||
GlaxoSmithKline PLC ADR | 3.1 | ||||||
NTT DoCoMo, Inc. ADR | 3.1 | ||||||
Nippon Telegraph & Telephone Corp. ADR | 2.8 | ||||||
Delhaize Group SA ADR | 2.6 | ||||||
Total | 33.2 |
21
Manager's Analysis (Continued)
PowerShares International Dividend AchieversTM Portfolio (ticker: PID)
Growth of a $10,000 Investment Since Inception†
Fund Performance History (%) As of April 30, 2013
3 Years | 3 Years | 5 Years | 5 Years | Fund Inception† | |||||||||||||||||||||||||||
1 Year | Avg. Ann.††† | Cumulative | Avg. Ann.††† | Cumulative | Avg. Ann.††† | Cumulative | |||||||||||||||||||||||||
Index | |||||||||||||||||||||||||||||||
NASDAQ International Dividend Achievers Index†† | 16.39 | % | 10.75 | % | 35.83 | % | 1.48 | % | 7.61 | % | 5.86 | % | 54.40 | % | |||||||||||||||||
Dow Jones EPAC Select Dividend Index | 20.02 | % | 10.19 | % | 33.80 | % | 1.80 | % | 9.32 | % | N/A | N/A | |||||||||||||||||||
MSCI EAFE® Value Index | 21.70 | % | 6.28 | % | 20.05 | % | -1.64 | % | -7.96 | % | 3.72 | % | 32.27 | % | |||||||||||||||||
S&P 500® Index | 16.89 | % | 12.80 | % | 43.54 | % | 5.21 | % | 28.92 | % | 5.79 | % | 53.91 | % | |||||||||||||||||
Fund | |||||||||||||||||||||||||||||||
NAV Return | 15.63 | % | 9.90 | % | 32.72 | % | 0.71 | % | 3.63 | % | 5.08 | % | 45.91 | % | |||||||||||||||||
Market Price Return | 15.75 | % | 9.98 | % | 33.02 | % | 0.79 | % | 4.02 | % | 5.11 | % | 46.24 | % |
Fund Inception: September 15, 2005
Performance quoted above represents past performance. Past performance is not a guarantee of future results and current performance may be higher or lower than performance quoted. Investment returns and principal value will fluctuate, and shares of the Fund ("Fund Shares"), when redeemed or sold, may be worth more or less than their original cost. Had the adviser not waived fees and/or reimbursed expenses in the past, performance would have been lower. According to the Fund's current prospectus, the total gross annual operating expense ratio was indicated as 0.56%. The Financial Highlights section of the Shareholders Report presents the expense ratios based on expenses incurred during the period covered by this report. NAV and Market Price returns assume that dividends and capital gain distributions have been reinvested in the Fund at NAV and Market 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.
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.
† Fund and Index returns are based on the inception date of the Fund. Returns for the Benchmark Indices are based on the closest month-end to the Fund's inception date.
†† Effective February 25, 2013, the NASDAQ OMX Group, Inc. replaced Mergent®, Inc. as the Index Provider of the Index. Effective February 25, 2013, the name of the Index changed from International Dividend AchieversTM Index to NASDAQ International Dividend Achievers Index. There were no changes to the methodology by which the Index Provider calculates the Index.
††† Average annualized.
22
Fees and Expenses
As a shareholder of a Fund of the PowerShares Exchange-Traded Fund Trust, you incur advisory fees and other 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 ended April 30, 2013.
Actual Expenses
The first line in the following table 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 table provides information about hypothetical account values and hypothetical expenses based on each Fund's actual expense ratio and an assumed annualized rate of return of 5% per year before expenses, which is not the Fund's 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 table are meant to highlight your ongoing costs only, and do not reflect any transactional costs, such as sales charges and brokerage commissions. 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, 2012 | Ending Account Value April 30, 2013 | Annualized Expense Ratio Based on the Six-Month Period | Expenses Paid During the Six-Month Period (1) | ||||||||||||||||
PowerShares Buyback AchieversTM Portfolio (PKW) Actual | $ | 1,000.00 | $ | 1,179.24 | 0.70 | % | $ | 3.78 | |||||||||||
Hypothetical (5% return before expenses) | $ | 1,000.00 | $ | 1,021.32 | 0.70 | % | $ | 3.51 | |||||||||||
PowerShares Dividend AchieversTM Portfolio (PFM) Actual | $ | 1,000.00 | $ | 1,140.05 | 0.57 | % | $ | 3.02 | |||||||||||
Hypothetical (5% return before expenses) | $ | 1,000.00 | $ | 1,021.97 | 0.57 | % | $ | 2.86 | |||||||||||
PowerShares Financial Preferred Portfolio (PGF) Actual | $ | 1,000.00 | $ | 1,043.00 | 0.63 | % | $ | 3.19 | |||||||||||
Hypothetical (5% return before expenses) | $ | 1,000.00 | $ | 1,021.67 | 0.63 | % | $ | 3.16 |
23
Fees and Expenses (Continued)
Beginning Account Value November 1, 2012 | Ending Account Value April 30, 2013 | Annualized Expense Ratio Based on the Six-Month Period | Expenses Paid During the Six-Month Period (1) | ||||||||||||||||
PowerShares High Yield Equity Dividend AchieversTM Portfolio (PEY) Actual | $ | 1,000.00 | $ | 1,145.10 | 0.55 | % | $ | 2.93 | |||||||||||
Hypothetical (5% return before expenses) | $ | 1,000.00 | $ | 1,022.07 | 0.55 | % | $ | 2.76 | |||||||||||
PowerShares International Dividend AchieversTM Portfolio (PID) Actual | $ | 1,000.00 | $ | 1,138.99 | 0.56 | % | $ | 2.97 | |||||||||||
Hypothetical (5% return before expenses) | $ | 1,000.00 | $ | 1,022.02 | 0.56 | % | $ | 2.81 |
(1) Expenses are calculated using the annualized expense ratio, which represents the ongoing expenses as a percentage of net assets for the six-month period ended April 30, 2013. Expenses are calculated by multiplying the Fund's annualized expense ratio by the average account value for the period, then multiplying the result by 181/365. Expense ratios for the most recent half-year may differ from expense ratios based on annualized data in the Financial Highlights.
24
Schedule of Investments
PowerShares Buyback AchieversTM Portfolio (PKW)
April 30, 2013
Number of Shares | Value | ||||||||||
Common Stocks and Other Equity Interests—100.0% | |||||||||||
Consumer Discretionary—34.1% | |||||||||||
23,227 | Abercrombie & Fitch Co., Class A | $ | 1,151,130 | ||||||||
8,087 | American Greetings Corp., Class A | 149,124 | |||||||||
2,652 | America's Car-Mart, Inc.(a) | 122,708 | |||||||||
13,606 | ANN, Inc.(a) | 401,921 | |||||||||
31,485 | Apollo Group, Inc., Class A(a) | 578,379 | |||||||||
3,726 | Arctic Cat, Inc.(a) | 167,633 | |||||||||
34,249 | AutoNation, Inc.(a) | 1,558,672 | |||||||||
10,386 | AutoZone, Inc.(a) | 4,248,809 | |||||||||
11,497 | Bally Technologies, Inc.(a) | 612,560 | |||||||||
63,610 | Bed Bath & Beyond, Inc.(a) | 4,376,368 | |||||||||
94,433 | Best Buy Co., Inc. | 2,454,314 | |||||||||
16,754 | Big Lots, Inc.(a) | 610,181 | |||||||||
3,505 | Blue Nile, Inc.(a) | 114,368 | |||||||||
20,574 | Brinker International, Inc. | 800,329 | |||||||||
58,796 | Cablevision Systems Corp., Class A | 873,709 | |||||||||
3,682 | Capella Education Co.(a) | 130,416 | |||||||||
19,701 | Career Education Corp.(a) | 43,145 | |||||||||
5,028 | CEC Entertainment, Inc. | 167,784 | |||||||||
28,459 | Charter Communications, Inc., Class A(a) | 2,866,960 | |||||||||
6,634 | Children's Place Retail Stores, Inc. (The)(a) | 324,535 | |||||||||
9,919 | Deckers Outdoor Corp.(a) | 546,735 | |||||||||
17,965 | DeVry, Inc. | 503,200 | |||||||||
12,161 | Dillard's, Inc., Class A | 1,002,188 | |||||||||
161,211 | DIRECTV(a) | 9,118,094 | |||||||||
40,820 | Discovery Communications, Inc., Class A(a) | 3,217,432 | |||||||||
34,718 | GameStop Corp., Class A | 1,211,658 | |||||||||
27,930 | GNC Holdings, Inc., Class A | 1,266,067 | |||||||||
23,952 | Guess?, Inc. | 662,991 | |||||||||
76,260 | H&R Block, Inc. | 2,115,452 | |||||||||
9,732 | hhgregg, Inc.(a) | 131,479 | |||||||||
15,261 | HSN, Inc. | 802,423 | |||||||||
19,190 | Iconix Brand Group, Inc.(a) | 549,793 | |||||||||
74,850 | International Game Technology | 1,268,708 | |||||||||
121,343 | Interpublic Group of Cos., Inc. (The) | 1,679,387 | |||||||||
6,561 | ITT Educational Services, Inc.(a) | 120,132 | |||||||||
6,242 | JAKKS Pacific, Inc. | 68,100 | |||||||||
32,962 | Jarden Corp.(a) | 1,483,620 | |||||||||
4,930 | Kirkland's, Inc.(a) | 59,456 | |||||||||
65,963 | Kohl's Corp. | 3,104,219 | |||||||||
27,255 | Lear Corp. | 1,574,794 | |||||||||
144,230 | Liberty Interactive Corp., Class A(a) | 3,070,657 | |||||||||
8,407 | LIN TV Corp., Class A(a) | 103,490 | |||||||||
320,829 | Lowe's Cos., Inc. | 12,326,250 | |||||||||
113,225 | Macy's, Inc. | 5,049,835 | |||||||||
88,759 | Marriott International, Inc., Class A | 3,821,963 | |||||||||
13,255 | Morningstar, Inc. | 874,963 | |||||||||
429,455 | News Corp., Class A | 13,300,221 | |||||||||
31,308 | O'Reilly Automotive, Inc.(a) | 3,359,975 | |||||||||
6,504 | Papa John's International, Inc.(a) | 409,752 | |||||||||
16,573 | Pinnacle Entertainment, Inc.(a) | 315,881 |
Number of Shares | Value | ||||||||||
Common Stocks and Other Equity Interests (Continued) | |||||||||||
42,568 | Saks, Inc.(a) | $ | 491,660 | ||||||||
23,609 | Scientific Games Corp., Class A(a) | 209,648 | |||||||||
32,498 | Scripps Networks Interactive, Inc., Class A | 2,163,717 | |||||||||
59,831 | Service Corp. International | 1,009,947 | |||||||||
16,303 | Sonic Corp.(a) | 204,277 | |||||||||
16,760 | Tempur-Pedic International, Inc.(a) | 812,860 | |||||||||
84,886 | Time Warner Cable, Inc. | 7,969,947 | |||||||||
266,341 | Time Warner, Inc. | 15,921,865 | |||||||||
11,031 | Valassis Communications, Inc. | 282,725 | |||||||||
124,838 | Viacom, Inc., Class B | 7,988,384 | |||||||||
75,762 | Virgin Media, Inc. | 3,695,670 | |||||||||
15,652 | Weight Watchers International, Inc. | 660,045 | |||||||||
39,536 | Wyndham Worldwide Corp. | 2,375,323 | |||||||||
28,372 | Wynn Resorts Ltd. | 3,895,476 | |||||||||
142,553,504 | |||||||||||
Consumer Staples—4.0% | |||||||||||
80,742 | Coca-Cola Enterprises, Inc. | 2,957,579 | |||||||||
44,705 | Constellation Brands, Inc., Class A(a) | 2,206,192 | |||||||||
17,415 | Energizer Holdings, Inc. | 1,682,115 | |||||||||
30,378 | Herbalife Ltd. (Cayman Islands) | 1,206,310 | |||||||||
148,404 | Kroger Co. (The) | 5,102,130 | |||||||||
16,509 | Nu Skin Enterprises, Inc., Class A | 837,502 | |||||||||
67,395 | Safeway, Inc. | 1,517,735 | |||||||||
2,443 | Seneca Foods Corp., Class A(a) | 79,617 | |||||||||
42,045 | Smithfield Foods, Inc.(a) | 1,076,352 | |||||||||
16,665,532 | |||||||||||
Energy—5.4% | |||||||||||
341,458 | ConocoPhillips | 20,641,136 | |||||||||
8,713 | Green Plains Renewable Energy, Inc.(a) | 109,000 | |||||||||
36,286 | Plains Exploration & Production Co.(a) | 1,640,127 | |||||||||
22,390,263 | |||||||||||
Financials—19.6% | |||||||||||
96,989 | American Capital Ltd.(a) | 1,467,444 | |||||||||
25,379 | American Financial Group, Inc. | 1,225,044 | |||||||||
415,271 | American International Group, Inc.(a) | 17,200,525 | |||||||||
57,893 | Ameriprise Financial, Inc. | 4,314,765 | |||||||||
7,065 | Argo Group International Holdings Ltd. (Bermuda) | 292,844 | |||||||||
22,138 | Assurant, Inc. | 1,052,441 | |||||||||
59,502 | CapitalSource, Inc. | 532,543 | |||||||||
42,789 | Capitol Federal Financial, Inc. | 506,622 | |||||||||
73,681 | Chubb Corp. (The) | 6,489,086 | |||||||||
63,856 | CNO Financial Group, Inc. | 722,850 | |||||||||
141,989 | Discover Financial Services | 6,210,599 | |||||||||
39,413 | East West Bancorp, Inc. | 958,918 | |||||||||
8,676 | Employers Holdings, Inc. | 196,511 | |||||||||
6,917 | FBL Financial Group, Inc., Class A | 271,907 | |||||||||
69,515 | First Horizon National Corp. | 722,956 | |||||||||
8,809 | Green Dot Corp., Class A(a) | 138,389 |
See Notes to Financial Statements.
25
Schedule of Investments (Continued)
PowerShares Buyback AchieversTM Portfolio (PKW)
April 30, 2013
Number of Shares | Value | ||||||||||
Common Stocks and Other Equity Interests (Continued) | |||||||||||
10,224 | Investment Technology Group, Inc.(a) | $ | 111,339 | ||||||||
37,049 | Legg Mason, Inc. | 1,180,381 | |||||||||
77,357 | Lincoln National Corp. | 2,630,912 | |||||||||
20,473 | MCG Capital Corp. | 105,231 | |||||||||
78,114 | McGraw-Hill Cos., Inc. (The) | 4,226,749 | |||||||||
15,487 | Montpelier Re Holdings Ltd. (Bermuda) | 398,945 | |||||||||
46,393 | NASDAQ OMX Group, Inc. (The) | 1,367,666 | |||||||||
19,620 | Netspend Holdings, Inc.(a) | 313,135 | |||||||||
68,352 | NYSE Euronext | 2,652,741 | |||||||||
4,972 | Piper Jaffray Cos., Inc.(a) | 167,855 | |||||||||
9,182 | Platinum Underwriters Holdings Ltd. (Bermuda) | 521,079 | |||||||||
16,191 | Primerica, Inc. | 549,846 | |||||||||
3,122 | Provident Financial Holdings, Inc. | 50,576 | |||||||||
13,546 | RenaissanceRe Holdings Ltd. (Bermuda) | 1,271,834 | |||||||||
14,831 | Ryman Hospitality Properties, Inc. (The) REIT | 659,386 | |||||||||
129,955 | SLM Corp. | 2,683,571 | |||||||||
130,744 | State Street Corp. | 7,644,602 | |||||||||
26,702 | Torchmark Corp. | 1,657,393 | |||||||||
107,296 | Travelers Cos., Inc. (The) | 9,164,151 | |||||||||
77,390 | Unum Group | 2,158,407 | |||||||||
6,203 | Westfield Financial, Inc. | 46,709 | |||||||||
3,636 | World Acceptance Corp.(a) | 323,095 | |||||||||
82,189,047 | |||||||||||
Health Care—12.2% | |||||||||||
94,092 | Aetna, Inc. | 5,404,644 | |||||||||
22,745 | Alere, Inc.(a) | 584,092 | |||||||||
48,305 | Allscripts Healthcare Solutions, Inc.(a) | 668,541 | |||||||||
66,235 | AmerisourceBergen Corp. | 3,584,638 | |||||||||
200,802 | Amgen, Inc. | 20,925,576 | |||||||||
55,402 | Becton, Dickinson and Co. | 5,224,409 | |||||||||
386,208 | Boston Scientific Corp.(a) | 2,892,698 | |||||||||
15,393 | Covance, Inc.(a) | 1,147,702 | |||||||||
37,833 | Coventry Health Care, Inc. | 1,874,625 | |||||||||
11,701 | Enzon Pharmaceuticals, Inc. | 38,613 | |||||||||
5,061 | LHC Group, Inc.(a) | 109,925 | |||||||||
16,469 | Questcor Pharmaceuticals, Inc. | 506,257 | |||||||||
15,540 | Sciclone Pharmaceuticals, Inc.(a) | 73,504 | |||||||||
40,045 | Select Medical Holdings Corp. | 330,371 | |||||||||
4,059 | SurModics, Inc.(a) | 107,361 | |||||||||
14,115 | United Therapeutics Corp.(a) | 942,600 | |||||||||
18,340 | ViroPharma, Inc.(a) | 499,765 | |||||||||
85,415 | WellPoint, Inc. | 6,228,462 | |||||||||
51,143,783 | |||||||||||
Industrials—7.4% | |||||||||||
30,399 | AECOM Technology Corp.(a) | 883,699 | |||||||||
2,353 | American Science & Engineering, Inc. | 151,722 | |||||||||
28,012 | Avery Dennison Corp. | 1,161,097 | |||||||||
1,955 | Barrett Business Services, Inc. | 103,498 |
Number of Shares | Value | ||||||||||
Common Stocks and Other Equity Interests (Continued) | |||||||||||
12,421 | Belden, Inc. | $ | 613,846 | ||||||||
13,369 | Briggs & Stratton Corp. | 300,669 | |||||||||
2,661 | Consolidated Graphics, Inc.(a) | 94,918 | |||||||||
12,515 | Dun & Bradstreet Corp. (The) | 1,106,952 | |||||||||
5,812 | Encore Wire Corp. | 190,343 | |||||||||
13,534 | Flowserve Corp. | 2,139,996 | |||||||||
37,701 | GrafTech International Ltd.(a) | 270,693 | |||||||||
53,484 | Iron Mountain, Inc. | 2,024,904 | |||||||||
3,219 | Kadant, Inc. | 89,070 | |||||||||
10,112 | Kforce, Inc. | 152,893 | |||||||||
26,457 | L-3 Communications Holdings, Inc. | 2,149,631 | |||||||||
21,370 | MasTec, Inc.(a) | 594,086 | |||||||||
7,810 | Mueller Industries, Inc. | 404,402 | |||||||||
88,898 | Norfolk Southern Corp. | 6,882,483 | |||||||||
69,040 | Northrop Grumman Corp. | 5,229,090 | |||||||||
11,917 | Resources Connection, Inc. | 135,377 | |||||||||
39,440 | Rockwell Collins, Inc. | 2,481,565 | |||||||||
207,586 | Southwest Airlines Co. | 2,843,928 | |||||||||
9,451 | TAL International Group, Inc.(a) | 391,271 | |||||||||
14,460 | Taser International, Inc.(a) | 127,393 | |||||||||
11,313 | United Stationers, Inc. | 367,333 | |||||||||
30,890,859 | |||||||||||
Information Technology—16.6% | |||||||||||
10,654 | Advanced Energy Industries, Inc.(a) | 180,905 | |||||||||
42,964 | Amkor Technology, Inc.(a) | 181,738 | |||||||||
3,904 | Anaren, Inc.(a) | 91,393 | |||||||||
21,689 | AOL, Inc.(a) | 838,063 | |||||||||
337,559 | Applied Materials, Inc. | 4,897,981 | |||||||||
29,805 | Arrow Electronics, Inc.(a) | 1,169,250 | |||||||||
38,601 | Avnet, Inc.(a) | 1,264,183 | |||||||||
3,919 | Badger Meter, Inc. | 171,182 | |||||||||
4,832 | Black Box Corp. | 104,951 | |||||||||
40,193 | BMC Software, Inc.(a) | 1,827,978 | |||||||||
128,246 | CA, Inc. | 3,458,795 | |||||||||
6,494 | CACI International, Inc., Class A(a) | 379,834 | |||||||||
4,873 | Comtech Telecommunications Corp. | 119,925 | |||||||||
30,909 | Convergys Corp. | 526,071 | |||||||||
414,171 | Corning, Inc. | 6,005,479 | |||||||||
41,062 | Cypress Semiconductor Corp.(a) | 414,316 | |||||||||
16,351 | Dice Holdings, Inc.(a) | 138,002 | |||||||||
12,893 | Dolby Laboratories, Inc., Class A | 423,535 | |||||||||
84,409 | Electronic Arts, Inc.(a) | 1,486,442 | |||||||||
37,552 | Fiserv, Inc.(a) | 3,421,363 | |||||||||
33,015 | GT Advanced Technologies, Inc.(a) | 129,749 | |||||||||
13,030 | Higher One Holdings, Inc.(a) | 128,476 | |||||||||
8,033 | Immersion Corp.(a) | 85,069 | |||||||||
11,571 | InterDigital, Inc. | 513,868 | |||||||||
17,767 | Lexmark International, Inc., Class A | 538,518 | |||||||||
26,307 | Limelight Networks, Inc.(a) | 50,773 | |||||||||
150,490 | Marvell Technology Group Ltd. (Bermuda) | 1,619,272 |
See Notes to Financial Statements.
26
Schedule of Investments (Continued)
PowerShares Buyback AchieversTM Portfolio (PKW)
April 30, 2013
Number of Shares | Value | ||||||||||
Common Stocks and Other Equity Interests (Continued) | |||||||||||
16,321 | Micrel, Inc. | $ | 164,189 | ||||||||
33,389 | Monster Worldwide, Inc.(a) | 146,244 | |||||||||
77,632 | Motorola Solutions, Inc. | 4,440,550 | |||||||||
18,646 | NeuStar, Inc., Class A(a) | 818,000 | |||||||||
15,050 | OmniVision Technologies, Inc.(a) | 201,820 | |||||||||
636,497 | Oracle Corp. | 20,864,372 | |||||||||
56,506 | PMC - Sierra, Inc.(a) | 325,475 | |||||||||
26,079 | QLogic Corp.(a) | 283,218 | |||||||||
12,036 | QuinStreet, Inc.(a) | 78,715 | |||||||||
14,474 | RealD, Inc.(a) | 216,676 | |||||||||
29,097 | Rovi Corp.(a) | 680,579 | |||||||||
193,861 | Symantec Corp.(a) | 4,710,822 | |||||||||
10,619 | Tech Data Corp.(a) | 496,226 | |||||||||
52,555 | Total System Services, Inc. | 1,241,349 | |||||||||
21,300 | ValueClick, Inc.(a) | 657,318 | |||||||||
36,888 | Vishay Intertechnology, Inc.(a) | 517,908 | |||||||||
14,088 | WebMD Health Corp.(a) | 340,225 | |||||||||
10,266 | Websense, Inc.(a) | 183,145 | |||||||||
357,955 | Xerox Corp. | 3,071,254 | |||||||||
7,531 | XO Group, Inc.(a) | 84,799 | |||||||||
69,689,995 | |||||||||||
Materials—0.7% | |||||||||||
43,274 | Ball Corp. | 1,909,249 | |||||||||
27,816 | Boise, Inc. | 222,250 | |||||||||
12,824 | Cytec Industries, Inc. | 934,356 | |||||||||
3,065,855 | |||||||||||
Telecommunication Services—0.0% | |||||||||||
10,837 | General Communication, Inc., Class A(a) | 105,227 | |||||||||
Total Common Stocks and Other Equity Interests | (Cost $379,791,902) | 418,694,065 | |||||||||
Money Market Fund—0.1% | |||||||||||
250,785 | Goldman Sachs Financial Square Prime Obligations - Institutional Share Class (Cost $250,785) | 250,785 | |||||||||
Total Investments (Cost $380,042,687)—100.1% | 418,944,850 | ||||||||||
Liabilities in excess of other assets—(0.1)% | (323,518 | ) | |||||||||
Net Assets—100.0% | $ | 418,621,332 |
Investment Abbreviations:
REIT—Real Estate Investment Trust
Notes to Schedule of Investments:
(a) Non-income producing security.
See Notes to Financial Statements.
27
Schedule of Investments
PowerShares Dividend AchieversTM Portfolio (PFM)
April 30, 2013
Number of Shares | Value | ||||||||||
Common Stocks and Other Equity Interests—100.0% | |||||||||||
Consumer Discretionary—8.3% | |||||||||||
1,648 | Cracker Barrel Old Country Store, Inc. | $ | 136,356 | ||||||||
8,027 | Family Dollar Stores, Inc. | 492,617 | |||||||||
10,790 | Genuine Parts Co. | 823,601 | |||||||||
3,514 | John Wiley & Sons, Inc., Class A | 134,129 | |||||||||
9,826 | Leggett & Platt, Inc. | 316,790 | |||||||||
79,329 | Lowe's Cos., Inc. | 3,047,820 | |||||||||
1,989 | Matthews International Corp., Class A | 73,215 | |||||||||
69,831 | McDonald's Corp. | 7,132,538 | |||||||||
2,513 | Meredith Corp. | 97,555 | |||||||||
462 | NACCO Industries, Inc., Class A | 26,805 | |||||||||
50,217 | NIKE, Inc., Class B | 3,193,801 | |||||||||
4,799 | Polaris Industries, Inc. | 413,626 | |||||||||
15,467 | Ross Stores, Inc. | 1,021,905 | |||||||||
45,264 | Target Corp. | 3,193,828 | |||||||||
8,808 | Tiffany & Co. | 648,973 | |||||||||
50,721 | TJX Cos., Inc. (The) | 2,473,663 | |||||||||
7,662 | VF Corp. | 1,365,522 | |||||||||
24,592,744 | |||||||||||
Consumer Staples—25.2% | |||||||||||
140,851 | Altria Group, Inc. | 5,142,470 | |||||||||
1,276 | Andersons, Inc. (The) | 69,567 | |||||||||
45,805 | Archer-Daniels-Midland Co. | 1,554,622 | |||||||||
8,962 | Brown-Forman Corp., Class B | 631,821 | |||||||||
2,664 | Casey's General Stores, Inc. | 154,272 | |||||||||
9,658 | Church & Dwight Co., Inc. | 617,050 | |||||||||
9,058 | Clorox Co. (The) | 781,252 | |||||||||
311,954 | Coca-Cola Co. (The) | 13,205,013 | |||||||||
32,862 | Colgate-Palmolive Co. | 3,924,051 | |||||||||
18,284 | Hormel Foods Corp. | 754,581 | |||||||||
7,613 | J.M. Smucker Co. (The) | 785,890 | |||||||||
27,215 | Kimberly-Clark Corp. | 2,808,316 | |||||||||
1,921 | Lancaster Colony Corp. | 151,624 | |||||||||
8,354 | McCormick & Co., Inc. | 600,987 | |||||||||
4,082 | Nu Skin Enterprises, Inc., Class A | 207,080 | |||||||||
107,587 | PepsiCo, Inc. | 8,872,700 | |||||||||
189,391 | Procter & Gamble Co. (The) | 14,539,547 | |||||||||
40,883 | Sysco Corp. | 1,425,181 | |||||||||
2,668 | Tootsie Roll Industries, Inc. | 83,322 | |||||||||
1,587 | Universal Corp. | 91,332 | |||||||||
6,086 | Vector Group Ltd. | 99,263 | |||||||||
65,780 | Walgreen Co. | 3,256,768 | |||||||||
195,035 | Wal-Mart Stores, Inc. | 15,158,120 | |||||||||
74,914,829 | |||||||||||
Energy—17.6% | |||||||||||
2,565 | Alliance Resource Partners LP | 190,913 | |||||||||
6,283 | Buckeye Partners LP | 388,164 | |||||||||
1,606 | CARBO Ceramics, Inc. | 113,464 | |||||||||
122,828 | Chevron Corp. | 14,986,244 | |||||||||
84,429 | ConocoPhillips | 5,103,733 |
Number of Shares | Value | ||||||||||
Common Stocks and Other Equity Interests (Continued) | |||||||||||
5,072 | Energen Corp. | $ | 240,514 | ||||||||
62,294 | Enterprise Products Partners LP | 3,778,131 | |||||||||
18,840 | EOG Resources, Inc. | 2,282,654 | |||||||||
161,963 | Exxon Mobil Corp. | 14,413,087 | |||||||||
7,354 | Helmerich & Payne, Inc. | 431,092 | |||||||||
17,580 | Kinder Morgan Energy Partners LP | 1,554,951 | |||||||||
15,733 | Magellan Midstream Partners LP | 834,321 | |||||||||
13,517 | Murphy Oil Corp. | 839,271 | |||||||||
5,417 | NuStar Energy LP | 271,283 | |||||||||
56,350 | Occidental Petroleum Corp. | 5,029,801 | |||||||||
23,233 | Plains All American Pipeline LP | 1,334,039 | |||||||||
6,913 | Sunoco Logistics Partners LP | 429,367 | |||||||||
3,639 | TC Pipelines LP | 171,033 | |||||||||
52,392,062 | |||||||||||
Financials—5.9% | |||||||||||
1,767 | 1st Source Corp. | 41,578 | |||||||||
32,614 | Aflac, Inc. | 1,775,506 | |||||||||
921 | Arrow Financial Corp. | 22,279 | |||||||||
1,060 | BancFirst Corp. | 44,350 | |||||||||
2,459 | Bank of the Ozarks, Inc. | 100,647 | |||||||||
9,960 | Brown & Brown, Inc. | 308,660 | |||||||||
18,219 | Chubb Corp. (The) | 1,604,547 | |||||||||
11,315 | Cincinnati Financial Corp. | 553,417 | |||||||||
6,391 | Commerce Bancshares, Inc. | 256,343 | |||||||||
2,774 | Community Bank System, Inc. | 79,447 | |||||||||
1,122 | Community Trust Bancorp, Inc. | 38,844 | |||||||||
4,215 | Cullen/Frost Bankers, Inc. | 254,628 | |||||||||
7,983 | Eaton Vance Corp. | 318,362 | |||||||||
3,274 | Erie Indemnity Co., Class A | 260,512 | |||||||||
2,562 | Essex Property Trust, Inc. REIT | 402,362 | |||||||||
4,495 | Federal Realty Investment Trust REIT | 525,960 | |||||||||
1,000 | First Financial Corp. | 30,890 | |||||||||
14,766 | Franklin Resources, Inc. | 2,283,710 | |||||||||
7,046 | HCC Insurance Holdings, Inc. | 300,160 | |||||||||
31,442 | HCP, Inc. REIT | 1,675,859 | |||||||||
19,315 | McGraw-Hill Cos., Inc. (The) | 1,045,135 | |||||||||
3,819 | Mercury General Corp. | 174,566 | |||||||||
1,936 | National Health Investors, Inc. REIT | 128,241 | |||||||||
7,653 | National Retail Properties, Inc. REIT | 303,671 | |||||||||
18,128 | Old Republic International Corp. | 244,728 | |||||||||
24,178 | People's United Financial, Inc. | 318,182 | |||||||||
3,912 | Prosperity Bancshares, Inc. | 179,717 | |||||||||
12,444 | Realty Income Corp. REIT | 634,271 | |||||||||
1,346 | Republic Bancorp, Inc., Class A | 29,881 | |||||||||
1,478 | RLI Corp. | 106,194 | |||||||||
12,026 | SEI Investments Co. | 344,665 | |||||||||
12,280 | Senior Housing Properties Trust REIT | 349,120 | |||||||||
1,348 | Southside Bancshares, Inc. | 28,820 | |||||||||
3,014 | StanCorp Financial Group, Inc. | 130,145 | |||||||||
17,934 | T. Rowe Price Group, Inc. | 1,300,215 |
See Notes to Financial Statements.
28
Schedule of Investments (Continued)
PowerShares Dividend AchieversTM Portfolio (PFM)
April 30, 2013
Number of Shares | Value | ||||||||||
Common Stocks and Other Equity Interests (Continued) | |||||||||||
6,531 | Tanger Factory Outlet Centers, Inc. REIT | $ | 242,431 | ||||||||
1,007 | Tompkins Financial Corp. | 42,093 | |||||||||
2,818 | UMB Financial Corp. | 141,858 | |||||||||
3,500 | United Bankshares, Inc. | 88,585 | |||||||||
869 | Universal Health Realty Income Trust REIT | 46,691 | |||||||||
1,537 | Urstadt Biddle Properties, Inc., Class A REIT | 34,229 | |||||||||
9,446 | W.R. Berkley Corp. | 410,145 | |||||||||
1,938 | Westamerica Bancorp. | 84,090 | |||||||||
605 | Westwood Holdings Group, Inc. | 26,439 | |||||||||
4,781 | WP Carey, Inc. REIT | 337,156 | |||||||||
17,649,329 | |||||||||||
Health Care—9.3% | |||||||||||
109,940 | Abbott Laboratories | 4,058,985 | |||||||||
13,699 | Becton, Dickinson and Co. | 1,291,816 | |||||||||
5,750 | C.R. Bard, Inc. | 571,320 | |||||||||
23,632 | Cardinal Health, Inc. | 1,045,007 | |||||||||
179,007 | Johnson & Johnson | 15,256,766 | |||||||||
70,953 | Medtronic, Inc. | 3,312,086 | |||||||||
4,326 | Owens & Minor, Inc. | 140,898 | |||||||||
26,430 | Stryker Corp. | 1,733,279 | |||||||||
2,322 | West Pharmaceutical Services, Inc. | 148,283 | |||||||||
27,558,440 | |||||||||||
Industrials—12.2% | |||||||||||
48,126 | 3M Co. | 5,039,273 | |||||||||
2,750 | A.O. Smith Corp. | 207,433 | |||||||||
3,665 | ABM Industries, Inc. | 82,646 | |||||||||
3,377 | Brady Corp., Class A | 114,413 | |||||||||
11,218 | C.H. Robinson Worldwide, Inc. | 666,237 | |||||||||
4,376 | Carlisle Cos., Inc. | 283,871 | |||||||||
45,483 | Caterpillar, Inc. | 3,851,046 | |||||||||
8,575 | Cintas Corp. | 384,760 | |||||||||
3,502 | CLARCOR, Inc. | 181,053 | |||||||||
10,303 | Donaldson Co., Inc. | 374,823 | |||||||||
12,451 | Dover Corp. | 858,870 | |||||||||
50,222 | Emerson Electric Co. | 2,787,823 | |||||||||
14,362 | Expeditors International of Washington, Inc. | 516,027 | |||||||||
20,632 | Fastenal Co. | 1,012,000 | |||||||||
3,276 | Franklin Electric Co., Inc. | 106,044 | |||||||||
24,557 | General Dynamics Corp. | 1,816,236 | |||||||||
1,516 | Gorman-Rupp Co. (The) | 42,827 | |||||||||
4,176 | Graco, Inc. | 252,773 | |||||||||
32,234 | Illinois Tool Works, Inc. | 2,081,027 | |||||||||
5,769 | Lincoln Electric Holdings, Inc. | 304,372 | |||||||||
893 | Lindsay Corp. | 68,600 | |||||||||
22,509 | Lockheed Martin Corp. | 2,230,417 | |||||||||
1,790 | McGrath RentCorp | 55,597 | |||||||||
2,565 | Mine Safety Appliances Co. | 123,120 | |||||||||
4,491 | Nordson Corp. | 312,080 | |||||||||
21,982 | Norfolk Southern Corp. | 1,701,846 | |||||||||
10,376 | Parker Hannifin Corp. | 919,002 |
Number of Shares | Value | ||||||||||
Common Stocks and Other Equity Interests (Continued) | |||||||||||
14,004 | Pitney Bowes, Inc. | $ | 191,435 | ||||||||
2,565 | Raven Industries, Inc. | 86,056 | |||||||||
10,157 | Rollins, Inc. | 247,018 | |||||||||
6,878 | Roper Industries, Inc. | 822,953 | |||||||||
11,739 | Stanley Black & Decker, Inc. | 878,195 | |||||||||
1,307 | Tennant Co. | 62,501 | |||||||||
63,748 | United Technologies Corp. | 5,819,555 | |||||||||
1,855 | Valmont Industries, Inc. | 270,329 | |||||||||
4,834 | W.W. Grainger, Inc. | 1,191,436 | |||||||||
2,071 | Watsco, Inc. | 174,751 | |||||||||
36,118,445 | |||||||||||
Information Technology—6.2% | |||||||||||
33,734 | Automatic Data Processing, Inc. | 2,271,648 | |||||||||
988 | Badger Meter, Inc. | 43,156 | |||||||||
798 | Cass Information Systems, Inc. | 33,356 | |||||||||
4,399 | Diebold, Inc. | 128,847 | |||||||||
3,061 | FactSet Research Systems, Inc. | 287,948 | |||||||||
7,728 | Harris Corp. | 357,034 | |||||||||
68,422 | International Business Machines Corp. | 13,858,192 | |||||||||
6,005 | Jack Henry & Associates, Inc. | 278,632 | |||||||||
16,175 | Linear Technology Corp. | 590,387 | |||||||||
20,343 | Maxim Integrated Products, Inc. | 629,209 | |||||||||
18,478,409 | |||||||||||
Materials—5.6% | |||||||||||
14,790 | Air Products & Chemicals, Inc. | 1,286,138 | |||||||||
6,208 | Albemarle Corp. | 380,240 | |||||||||
4,584 | AptarGroup, Inc. | 257,162 | |||||||||
7,139 | Bemis Co., Inc. | 280,920 | |||||||||
20,372 | Ecolab, Inc. | 1,723,879 | |||||||||
3,470 | H.B. Fuller Co. | 131,513 | |||||||||
5,677 | International Flavors & Fragrances, Inc. | 438,208 | |||||||||
37,183 | Monsanto Co. | 3,971,888 | |||||||||
22,093 | Nucor Corp. | 963,697 | |||||||||
10,666 | PPG Industries, Inc. | 1,569,395 | |||||||||
20,601 | Praxair, Inc. | 2,354,694 | |||||||||
4,477 | Royal Gold, Inc. | 248,832 | |||||||||
9,133 | RPM International, Inc. | 295,909 | |||||||||
7,151 | Sherwin-Williams Co. (The) | 1,309,420 | |||||||||
8,377 | Sigma-Aldrich Corp. | 659,186 | |||||||||
7,084 | Sonoco Products Co. | 248,223 | |||||||||
1,457 | Stepan Co. | 82,962 | |||||||||
6,314 | Valspar Corp. (The) | 402,959 | |||||||||
16,605,225 | |||||||||||
Telecommunication Services—4.9% | |||||||||||
381,955 | AT&T, Inc. | 14,308,034 | |||||||||
1,083 | Atlantic Tele-Network, Inc. | 54,984 | |||||||||
7,016 | Telephone & Data Systems, Inc. | 157,439 | |||||||||
14,520,457 |
See Notes to Financial Statements.
29
Schedule of Investments (Continued)
PowerShares Dividend AchieversTM Portfolio (PFM)
April 30, 2013
Number of Shares | Value | ||||||||||
Common Stocks and Other Equity Interests (Continued) | |||||||||||
Utilities—4.8% | |||||||||||
8,192 | AGL Resources, Inc. | $ | 359,219 | ||||||||
1,346 | American States Water Co. | 74,676 | |||||||||
9,795 | Aqua America, Inc. | 310,795 | |||||||||
6,283 | Atmos Energy Corp. | 278,777 | |||||||||
4,177 | Avista Corp. | 117,165 | |||||||||
3,073 | Black Hills Corp. | 144,093 | |||||||||
2,926 | California Water Service Group | 58,666 | |||||||||
657 | Connecticut Water Service, Inc. | 18,711 | |||||||||
20,370 | Consolidated Edison, Inc. | 1,296,551 | |||||||||
12,986 | MDU Resources Group, Inc. | 324,001 | |||||||||
1,655 | MGE Energy, Inc. | 92,432 | |||||||||
1,173 | Middlesex Water Co. | 23,003 | |||||||||
5,772 | National Fuel Gas Co. | 362,020 | |||||||||
2,894 | New Jersey Resources Corp. | 136,597 | |||||||||
29,481 | NextEra Energy, Inc. | 2,418,326 | |||||||||
21,863 | Northeast Utilities | 991,050 | |||||||||
1,893 | Northwest Natural Gas Co. | 84,182 | |||||||||
14,231 | ONEOK, Inc. | 730,904 | |||||||||
5,066 | Piedmont Natural Gas Co., Inc. | 174,422 | |||||||||
40,459 | PPL Corp. | 1,350,521 | |||||||||
12,178 | Questar Corp. | 309,199 | |||||||||
9,166 | SCANA Corp. | 496,797 | |||||||||
1,390 | SJW Corp. | 35,250 | |||||||||
2,155 | South Jersey Industries, Inc. | 132,964 | |||||||||
60,439 | Southern Co. (The) | 2,914,973 | |||||||||
7,864 | UGI Corp. | 322,267 | |||||||||
2,896 | UNS Energy Corp. | 147,580 | |||||||||
5,698 | Vectren Corp. | 214,017 | |||||||||
3,572 | WGL Holdings, Inc. | 165,098 | |||||||||
908 | York Water Co. (The) | 17,025 | |||||||||
14,101,281 | |||||||||||
Total Investments (Cost $238,635,412)—100.0% | 296,931,221 | ||||||||||
Liabilities in excess of other assets—(0.0)% | (2,849 | ) | |||||||||
Net Assets—100.0% | $ | 296,928,372 |
Investment Abbreviations:
REIT—Real Estate Investment Trust
See Notes to Financial Statements.
30
Schedule of Investments
PowerShares Financial Preferred Portfolio (PGF)
April 30, 2013
Number of Shares | Value | ||||||||||
Preferred Stocks—102.1% | |||||||||||
Banks—73.4% | |||||||||||
638,017 | Bank of America Corp., 6.20%, Series D | $ | 16,160,971 | ||||||||
1,300,809 | Bank of America Corp., 7.25%, Series J | 33,313,718 | |||||||||
3,353,488 | Bank of America Corp., 8.20%, Series H | 83,803,665 | |||||||||
2,830,008 | Bank of America Corp., 8.63%, Series 8 | 72,165,204 | |||||||||
718,552 | Bank of New York Mellon Corp. (The), 5.20% | 18,409,302 | |||||||||
297,030 | Barclays Bank PLC, 6.63%, Series 2 (United Kingdom) | 7,562,384 | |||||||||
98,489 | Barclays Bank PLC, 7.10%, Series 3 (United Kingdom) | 2,520,333 | |||||||||
486,519 | Barclays Bank PLC, 7.75%, Series 4 (United Kingdom) | 12,518,134 | |||||||||
2,689,190 | Barclays Bank PLC, 8.13%, Series 5 (United Kingdom) | 69,192,859 | |||||||||
2,676,351 | BB&T Corp., 5.63%, Series E | 68,916,038 | |||||||||
494,324 | BB&T Corp., 5.85%, Series D | 13,079,813 | |||||||||
1,392,988 | Capital One Financial Corp., 6.00%, Series B | 36,384,846 | |||||||||
868,545 | Citigroup, Inc., 5.80%, Series C(a) | 22,000,245 | |||||||||
650,696 | Goldman Sachs Group, Inc. (The), 5.50%, Series J(a) | 16,729,394 | |||||||||
1,201,607 | Goldman Sachs Group, Inc. (The), 5.95%, Series I | 30,857,268 | |||||||||
1,302,401 | Goldman Sachs Group, Inc. (The), 6.20%, Series B | 33,328,442 | |||||||||
5,380,676 | HSBC Holdings PLC, 8.00%, Series 2 (United Kingdom) | 155,124,889 | |||||||||
3,121,310 | HSBC Holdings PLC, 8.13% (United Kingdom) | 80,498,585 | |||||||||
568,785 | HSBC USA, Inc., 6.50%, Series H | 14,634,838 | |||||||||
697,855 | JPMorgan Chase & Co., 5.45%, Series P | 17,620,839 | |||||||||
877,443 | JPMorgan Chase & Co., 5.50%, Series O | 22,295,827 | |||||||||
2,105,596 | JPMorgan Chase & Co., 8.63%, Series J | 53,713,754 | |||||||||
2,960,201 | PNC Financial Services Group, Inc. (The), 6.13%, Series P | 84,957,769 | |||||||||
733,185 | Regions Financial Corp., 6.38%, Series A | 18,813,527 | |||||||||
540,720 | Royal Bank of Scotland Group PLC, 5.75%, Series L (United Kingdom) | 12,474,410 | |||||||||
411,446 | Royal Bank of Scotland Group PLC, 6.35%, Series N (United Kingdom) | 9,504,403 | |||||||||
459,504 | Royal Bank of Scotland Group PLC, 6.60%, Series S (United Kingdom) | 10,986,741 | |||||||||
389,187 | Royal Bank of Scotland Group PLC, 6.75%, Series Q (United Kingdom) | 9,472,812 | |||||||||
1,914,149 | Royal Bank of Scotland Group PLC, 7.25%, Series T (United Kingdom) | 48,179,130 | |||||||||
1,191,360 | Santander Finance Preferred SA Unipersonal, 10.50%, Series 10 (Spain) | 32,869,622 | |||||||||
802,328 | State Street Corp., 5.25%, Series C | 20,443,317 | |||||||||
656,710 | SunTrust Banks, Inc., 5.88%, Series E | 16,765,806 | |||||||||
882,800 | U.S. Bancorp, 5.15%, Series H(a) | 22,070,000 |
Number of Shares | Value | ||||||||||
Preferred Stocks (Continued) | |||||||||||
810,897 | U.S. Bancorp, 6.00%, Series G | $ | 22,753,770 | ||||||||
1,246,433 | U.S. Bancorp, 6.50%, Series F | 37,343,133 | |||||||||
935,134 | U.S. Bancorp, 7.88%, Series D | 23,714,998 | |||||||||
64,237 | Wells Fargo & Co., 5.13%, Series O | 1,628,408 | |||||||||
1,082,215 | Wells Fargo & Co., 5.20%, Series N | 27,737,170 | |||||||||
236,256 | Wells Fargo & Co., 5.25%, Series P(a) | 6,024,528 | |||||||||
2,254,427 | Wells Fargo & Co., 8.00%, Series J | 69,323,630 | |||||||||
1,228,155 | Zions Bancorp., 9.50%, Series C | 31,833,778 | |||||||||
1,387,728,300 | |||||||||||
Diversified Financial Services—3.0% | |||||||||||
682,319 | Charles Schwab Corp. (The), 6.00%, Series B | 18,402,143 | |||||||||
829,174 | Discover Financial Services, 6.50%, Series B | 22,006,278 | |||||||||
671,208 | HSBC Finance Corp., 6.36%, Series B | 17,068,820 | |||||||||
57,477,241 | |||||||||||
Insurance—24.8% | |||||||||||
897,020 | Aegon NV, 6.38% (Netherlands) | 23,923,523 | |||||||||
302,258 | Aegon NV, 6.50% (Netherlands) | 7,659,218 | |||||||||
432,795 | Aegon NV, 6.88% (Netherlands) | 11,040,601 | |||||||||
1,400,753 | Aegon NV, 7.25% (Netherlands) | 35,817,254 | |||||||||
480,763 | Arch Capital Group Ltd., 6.75%, Series C (Bermuda) | 13,269,059 | |||||||||
350,000 | Aspen Insurance Holdings Ltd., 5.95%(a) | 9,012,500 | |||||||||
617,768 | Axis Capital Holdings Ltd., 6.88%, Series C (Bermuda) | 17,136,884 | |||||||||
605,584 | ING Groep NV, 6.13% (Netherlands) | 15,278,884 | |||||||||
1,453,411 | ING Groep NV, 6.38% (Netherlands) | 36,771,298 | |||||||||
2,865,338 | ING Groep NV, 7.38% (Netherlands) | 73,352,653 | |||||||||
3,852,587 | ING Groep NV, 8.50% (Netherlands) | 101,323,038 | |||||||||
2,137,949 | MetLife, Inc., 6.50%, Series B | 55,094,946 | |||||||||
120,000 | PartnerRe Ltd., 5.88%, Series F (Bermuda)(a) | 3,086,400 | |||||||||
792,709 | PartnerRe Ltd., 7.25%, Series E (Bermuda) | 22,631,842 | |||||||||
466,772 | Principal Financial Group, Inc., 6.52%, Series B | 12,700,866 | |||||||||
377,586 | Prudential PLC, 6.50% (United Kingdom) | 9,817,236 | |||||||||
433,769 | Prudential PLC, 6.75% (United Kingdom) | 11,165,214 | |||||||||
337,674 | RenaissanceRe Holdings Ltd., 6.08%, Series C (Bermuda) | 8,637,701 | |||||||||
69,453 | RenaissanceRe Holdings Ltd., 6.60%, Series D (Bermuda) | 1,781,470 | |||||||||
469,500,587 | |||||||||||
Savings & Loans—0.9% | |||||||||||
573,054 | First Niagara Financial Group, Inc., 8.63%, Series B | 17,042,626 | |||||||||
Total Preferred Stocks (Cost $1,693,440,900) | 1,931,748,754 |
See Notes to Financial Statements.
31
Schedule of Investments (Continued)
PowerShares Financial Preferred Portfolio (PGF)
April 30, 2013
Number of Shares | Value | ||||||||||
Money Market Fund—0.7% | |||||||||||
13,471,541 | Goldman Sachs Financial Square Prime Obligations - Institutional Share Class (Cost $13,471,541) | $13,471,541 | |||||||||
Total Investments (Cost $1,706,912,441)—102.8% | 1,945,220,295 | ||||||||||
Liabilities in excess of other assets—(2.8)% | (53,768,326 | ) | |||||||||
Net Assets—100.0% | $ | 1,891,451,969 |
Notes to Schedule of Investments:
(a) Non-income producing security.
This Fund has holdings greater than 10% of net assets in the following countries:
United Kingdom | 23.2 | % | |||||
Netherlands | 16.1 | % |
See Notes to Financial Statements.
32
Schedule of Investments
PowerShares High Yield Equity Dividend AchieversTM Portfolio (PEY)
April 30, 2013
Number of Shares | Value | ||||||||||
Common Stocks—100.0% | |||||||||||
Aerospace/Defense—2.3% | |||||||||||
76,023 | Lockheed Martin Corp. | $ | 7,533,119 | ||||||||
Agriculture—9.1% | |||||||||||
229,125 | Altria Group, Inc. | 8,365,354 | |||||||||
98,052 | Universal Corp. | 5,642,892 | |||||||||
948,012 | Vector Group Ltd. | 15,462,076 | |||||||||
29,470,322 | |||||||||||
Banks—14.1% | |||||||||||
253,596 | Arrow Financial Corp. | 6,134,487 | |||||||||
189,402 | Community Bank System, Inc. | 5,424,473 | |||||||||
167,521 | Community Trust Bancorp, Inc. | 5,799,577 | |||||||||
75,605 | Cullen/Frost Bankers, Inc. | 4,567,298 | |||||||||
307,639 | Southside Bancshares, Inc. | 6,577,322 | |||||||||
130,917 | Tompkins Financial Corp. | 5,472,331 | |||||||||
269,622 | United Bankshares, Inc. | 6,824,133 | |||||||||
110,896 | Westamerica Bancorp. | 4,811,777 | |||||||||
45,611,398 | |||||||||||
Computers—1.8% | |||||||||||
192,603 | Diebold, Inc. | 5,641,342 | |||||||||
Diversified Financial Services—1.7% | |||||||||||
124,793 | Westwood Holdings Group, Inc. | 5,453,454 | |||||||||
Electric—17.5% | |||||||||||
250,197 | Avista Corp. | 7,018,026 | |||||||||
120,663 | Black Hills Corp. | 5,657,888 | |||||||||
101,689 | Consolidated Edison, Inc. | 6,472,505 | |||||||||
67,361 | NextEra Energy, Inc. | 5,525,623 | |||||||||
119,829 | Northeast Utilities | 5,431,848 | |||||||||
226,162 | PPL Corp. | 7,549,287 | |||||||||
116,474 | SCANA Corp. | 6,312,891 | |||||||||
137,077 | Southern Co. (The) | 6,611,224 | |||||||||
111,852 | UNS Energy Corp. | 5,699,978 | |||||||||
56,279,270 | |||||||||||
Food—1.5% | |||||||||||
139,411 | Sysco Corp. | 4,859,868 | |||||||||
Gas—16.4% | |||||||||||
164,482 | AGL Resources, Inc. | 7,212,536 | |||||||||
118,277 | Atmos Energy Corp. | 5,247,950 | |||||||||
122,467 | New Jersey Resources Corp. | 5,780,442 | |||||||||
145,932 | Northwest Natural Gas Co. | 6,489,596 | |||||||||
170,900 | Piedmont Natural Gas Co., Inc. | 5,884,087 | |||||||||
176,868 | Questar Corp. | 4,490,679 | |||||||||
88,187 | South Jersey Industries, Inc. | 5,441,138 | |||||||||
174,267 | Vectren Corp. | 6,545,469 | |||||||||
126,668 | WGL Holdings, Inc. | 5,854,595 | |||||||||
52,946,492 |
Number of Shares | Value | ||||||||||
Common Stocks (Continued) | |||||||||||
Household Products/Wares—2.9% | |||||||||||
50,290 | Clorox Co. (The) | $ | 4,337,512 | ||||||||
47,472 | Kimberly-Clark Corp. | 4,898,636 | |||||||||
9,236,148 | |||||||||||
Insurance—9.9% | |||||||||||
112,697 | Cincinnati Financial Corp. | 5,512,010 | |||||||||
63,964 | Erie Indemnity Co., Class A | 5,089,616 | |||||||||
262,195 | Mercury General Corp. | 11,984,933 | |||||||||
686,223 | Old Republic International Corp. | 9,264,011 | |||||||||
31,850,570 | |||||||||||
Media—2.1% | |||||||||||
171,444 | Meredith Corp. | 6,655,456 | |||||||||
Miscellaneous Manufacturing—1.6% | |||||||||||
156,517 | Leggett & Platt, Inc. | 5,046,108 | |||||||||
Office/Business Equipment—4.4% | |||||||||||
1,045,869 | Pitney Bowes, Inc. | 14,297,029 | |||||||||
Oil & Gas—2.1% | |||||||||||
112,533 | ConocoPhillips | 6,802,620 | |||||||||
Packaging & Containers—1.6% | |||||||||||
150,910 | Sonoco Products Co. | 5,287,886 | |||||||||
Pharmaceuticals—1.5% | |||||||||||
56,517 | Johnson & Johnson | 4,816,944 | |||||||||
Retail—1.5% | |||||||||||
47,717 | McDonald's Corp. | 4,873,814 | |||||||||
Savings & Loans—2.2% | |||||||||||
545,513 | People's United Financial, Inc. | 7,178,951 | |||||||||
Telecommunications—2.4% | |||||||||||
205,874 | AT&T, Inc. | 7,712,040 | |||||||||
Water—3.4% | |||||||||||
248,827 | California Water Service Group | 4,988,982 | |||||||||
298,630 | Middlesex Water Co. | 5,856,134 | |||||||||
10,845,116 | |||||||||||
Total Common Stocks (Cost $285,852,833) | 322,397,947 | ||||||||||
Money Market Fund—0.3% | |||||||||||
935,496 | Goldman Sachs Financial Square Prime Obligations - Institutional Share Class (Cost $935,496) | 935,496 | |||||||||
Total Investments (Cost $286,788,329)—100.3% | 323,333,443 | ||||||||||
Liabilities in excess of other assets—(0.3)% | (857,615 | ) | |||||||||
Net Assets—100.0% | $ | 322,475,828 |
See Notes to Financial Statements.
33
Schedule of Investments
PowerShares International Dividend AchieversTM Portfolio (PID)
April 30, 2013
Number of Shares | Value | ||||||||||
Common Stocks and Other Equity Interests—100.0% | |||||||||||
Australia—1.9% | |||||||||||
243,495 | BHP Billiton Ltd. ADR(a) | $ | 16,367,734 | ||||||||
Belgium—2.6% | |||||||||||
363,337 | Delhaize Group SA ADR(a) | 22,712,196 | |||||||||
Bermuda—4.6% | |||||||||||
312,477 | Alterra Capital Holdings Ltd. | 10,171,126 | |||||||||
280,061 | Axis Capital Holdings Ltd. | 12,499,123 | |||||||||
343,451 | Lazard Ltd., Class A | 11,642,989 | |||||||||
64,418 | RenaissanceRe Holdings Ltd. | 6,048,206 | |||||||||
40,361,444 | |||||||||||
Brazil—0.8% | |||||||||||
182,949 | Companhia de Bebidas das Americas ADR(a) | 7,424,070 | |||||||||
Canada—21.1% | |||||||||||
455,978 | Cameco Corp. | 8,896,131 | |||||||||
84,159 | Canadian National Railway Co. | 8,245,899 | |||||||||
200,264 | Canadian Natural Resources Ltd. | 5,875,746 | |||||||||
40,491 | Canadian Pacific Railway Ltd. | 5,045,988 | |||||||||
286,368 | Enbridge, Inc. | 13,631,117 | |||||||||
141,521 | Imperial Oil Ltd. | 5,642,442 | |||||||||
520,384 | Ritchie Bros. Auctioneers, Inc.(a) | 10,496,145 | |||||||||
298,337 | Rogers Communications, Inc., Class B | 14,716,964 | |||||||||
821,634 | Shaw Communications, Inc., Class B(a) | 18,692,174 | |||||||||
284,215 | Suncor Energy, Inc. | 8,853,297 | |||||||||
1,026,659 | TELUS Corp. | 37,021,324 | |||||||||
606,578 | Thomson Reuters Corp.(a) | 20,314,297 | |||||||||
173,496 | Tim Hortons, Inc.(a) | 9,400,013 | |||||||||
377,745 | TransCanada Corp. | 18,702,155 | |||||||||
185,533,692 | |||||||||||
Chile—1.6% | |||||||||||
264,693 | Empresa Nacional de Electricidad SA ADR | 14,110,784 | |||||||||
Denmark—1.0% | |||||||||||
48,115 | Novo Nordisk A/S ADR | 8,498,552 | |||||||||
France—2.0% | |||||||||||
323,771 | Sanofi ADR | 17,273,183 | |||||||||
Hong Kong—2.4% | |||||||||||
385,953 | China Mobile Ltd. ADR | 21,320,044 | |||||||||
India—1.7% | |||||||||||
246,635 | Axis Bank Ltd. GDR | 6,950,174 | |||||||||
83,489 | HDFC Bank Ltd. ADR | 3,543,273 | |||||||||
115,305 | Infosys Ltd. ADR(a) | 4,812,831 | |||||||||
15,306,278 |
Number of Shares | Value | ||||||||||
Common Stocks and Other Equity Interests (Continued) | |||||||||||
Ireland—1.2% | |||||||||||
128,674 | Accenture PLC, Class A | $ | 10,479,211 | ||||||||
Israel—1.5% | |||||||||||
342,552 | Teva Pharmaceutical Industries Ltd. ADR | 13,116,316 | |||||||||
Japan—5.8% | |||||||||||
978,352 | Nippon Telegraph & Telephone Corp. ADR | 24,331,614 | |||||||||
1,628,366 | NTT DoCoMo, Inc. ADR | 26,982,025 | |||||||||
51,313,639 | |||||||||||
Jersey Islands—1.5% | |||||||||||
157,667 | WPP PLC ADR | 13,013,834 | |||||||||
Marshall Islands—7.6% | |||||||||||
786,650 | Teekay LNG Partners LP(a) | 32,795,438 | |||||||||
1,124,800 | Teekay Offshore Partners LP(a) | 34,171,424 | |||||||||
66,966,862 | |||||||||||
Mexico—1.5% | |||||||||||
343,063 | America Movil SAB de CV, Series L ADR | 7,334,687 | |||||||||
36,053 | Coca-Cola Femsa SAB de CV ADR | 5,817,873 | |||||||||
13,152,560 | |||||||||||
Netherlands—1.8% | |||||||||||
372,851 | Unilever NV | 15,838,710 | |||||||||
Norway—2.5% | |||||||||||
881,170 | Statoil ASA ADR(a) | 21,588,665 | |||||||||
Russia—3.2% | |||||||||||
437,582 | LUKOIL OAO ADR | 27,742,699 | |||||||||
Switzerland—5.2% | |||||||||||
87,255 | Allied World Assurance Co. Holdings AG | 7,923,626 | |||||||||
244,583 | Novartis AG ADR | 18,040,442 | |||||||||
159,953 | Pentair Ltd. | 8,693,446 | |||||||||
124,418 | Syngenta AG ADR | 10,637,739 | |||||||||
45,295,253 | |||||||||||
United Kingdom—22.2% | |||||||||||
49,874 | ARM Holdings PLC ADR | 2,331,610 | |||||||||
560,548 | AstraZeneca PLC ADR(a) | 29,103,652 | |||||||||
338,243 | BHP Billiton PLC ADR(a) | 19,120,877 | |||||||||
184,235 | British American Tobacco PLC ADR | 20,453,770 | |||||||||
87,596 | Diageo PLC ADR | 10,704,231 | |||||||||
527,097 | GlaxoSmithKline PLC ADR | 27,219,289 | |||||||||
1,073,707 | Pearson PLC ADR | 19,616,627 | |||||||||
387,897 | Prudential PLC ADR(a) | 13,397,962 | |||||||||
155,305 | Smith & Nephew PLC ADR(a) | 8,874,128 | |||||||||
351,281 | Unilever PLC ADR | 15,217,493 | |||||||||
947,272 | Vodafone Group PLC ADR | 28,977,050 | |||||||||
195,016,689 |
See Notes to Financial Statements.
34
Schedule of Investments (Continued)
PowerShares International Dividend AchieversTM Portfolio (PID)
April 30, 2013
Number of Shares | Value | ||||||||||
Common Stocks and Other Equity Interests (Continued) | |||||||||||
United States—6.3% | |||||||||||
122,564 | ACE Ltd. | $ | 10,925,355 | ||||||||
97,250 | Bunge Ltd. | 7,022,423 | |||||||||
144,210 | PartnerRe Ltd. | 13,604,771 | |||||||||
27,537 | Shire PLC ADR | 2,578,565 | |||||||||
546,702 | Textainer Group Holdings Ltd.(a) | 21,140,967 | |||||||||
55,272,081 | |||||||||||
Total Investments (excluding investments purchased with cash collateral from securities on loan) (Cost $772,956,774)—100.0% | 877,704,496 | ||||||||||
Investments Purchased with Cash Collateral from Securities on Loan | |||||||||||
Money Market Fund—11.5% | |||||||||||
100,442,618 | Invesco Liquid Assets Portfolio - Institutional Class (Cost $100,442,618)(b)(c) | 100,442,618 | |||||||||
Total Investments (Cost $873,399,392)—111.5% | 978,147,114 | ||||||||||
Liabilities in excess of other assets—(11.5)% | (100,806,285 | ) | |||||||||
Net Assets—100.0% | $ | 877,340,829 |
Investment Abbreviations:
ADR—American Depositary Receipt
GDR—Global Depositary Receipt
Notes to Schedule of Investments:
(a) All or a portion of this security was out on loan at April 30, 2013.
(b) The security has been segregated to satisfy the commitment to return the cash collateral received in securities lending transactions upon the borrower's return of the securities loaned.
(c) The security and the Fund are advised by wholly owned subsidiaries of Invesco Ltd. and are therefore considered to be affiliated.
See Notes to Financial Statements.
35
Statements of Assets and Liabilities
April 30, 2013
PowerShares Buyback AchieversTM Portfolio (PKW) | PowerShares Dividend AchieversTM Portfolio (PFM) | PowerShares Financial Preferred Portfolio (PGF) | PowerShares High Yield Equity Dividend AchieversTM Portfolio (PEY) | PowerShares International Dividend AchieversTM Portfolio (PID) | |||||||||||||||||||
ASSETS: | |||||||||||||||||||||||
Unaffiliated investments, at value(a) | $ | 418,944,850 | $ | 296,931,221 | $ | 1,945,220,295 | $ | 323,333,443 | $ | 877,704,496 | |||||||||||||
Affiliated investments, at value | — | — | — | — | 100,442,618 | ||||||||||||||||||
Total investments, at value | 418,944,850 | 296,931,221 | 1,945,220,295 | 323,333,443 | 978,147,114 | ||||||||||||||||||
Cash segregated as collateral | — | — | — | — | 831,535 | ||||||||||||||||||
Receivables: | |||||||||||||||||||||||
Investments sold | 16,775,488 | 9,949,273 | 2,965,750 | 16,115,134 | 80,563,548 | ||||||||||||||||||
Dividends | 74,469 | 453,525 | 7,777,423 | 373,373 | 1,637,330 | ||||||||||||||||||
Foreign tax reclaims | — | — | — | — | 387,502 | ||||||||||||||||||
Security lending | — | — | — | — | 60,217 | ||||||||||||||||||
Shares sold | 10,364,634 | 5,485,510 | 4,664,190 | — | 32,941,733 | ||||||||||||||||||
Total Assets | 446,159,441 | 312,819,529 | 1,960,627,658 | 339,821,950 | 1,094,568,979 | ||||||||||||||||||
LIABILITIES: | |||||||||||||||||||||||
Due to custodian | — | 171,181 | 9,561,750 | 894,306 | 985,564 | ||||||||||||||||||
Payables: | |||||||||||||||||||||||
Investments purchased | 25,444,074 | 9,918,796 | 57,729,374 | 16,128,655 | 90,004,487 | ||||||||||||||||||
Expenses recaptured | 6,234 | — | — | — | 2,060 | ||||||||||||||||||
Shares repurchased | 1,729,840 | 5,498,674 | — | — | 24,178,684 | ||||||||||||||||||
Collateral upon receipt of securities in-kind | — | — | — | — | 831,535 | ||||||||||||||||||
Collateral upon return of securities loaned | — | — | — | — | 100,442,618 | ||||||||||||||||||
Accrued advisory fees | 154,721 | 95,925 | 766,747 | 103,869 | 274,570 | ||||||||||||||||||
Accrued trustees fees | 10,493 | 13,491 | 56,915 | 15,602 | 29,406 | ||||||||||||||||||
Accrued expenses | 192,747 | 193,090 | 1,060,903 | 203,690 | 479,226 | ||||||||||||||||||
Total Liabilities | 27,538,109 | 15,891,157 | 69,175,689 | 17,346,122 | 217,228,150 | ||||||||||||||||||
NET ASSETS | $ | 418,621,332 | $ | 296,928,372 | $ | 1,891,451,969 | $ | 322,475,828 | $ | 877,340,829 | |||||||||||||
NET ASSETS CONSIST OF: | |||||||||||||||||||||||
Shares of beneficial interest | $ | 405,449,421 | $ | 260,277,127 | $ | 1,701,480,943 | $ | 432,015,282 | $ | 1,041,287,517 | |||||||||||||
Undistributed net investment income | 382,251 | 810,124 | 4,016,083 | 79,886 | 3,008,040 | ||||||||||||||||||
Undistributed net realized gain (loss) | (26,112,503 | ) | (22,454,688 | ) | (52,352,911 | ) | (146,164,454 | ) | (271,702,450 | ) | |||||||||||||
Net unrealized appreciation | 38,902,163 | 58,295,809 | 238,307,854 | 36,545,114 | 104,747,722 | ||||||||||||||||||
Net Assets | $ | 418,621,332 | $ | 296,928,372 | $ | 1,891,451,969 | $ | 322,475,828 | $ | 877,340,829 | |||||||||||||
Shares outstanding (unlimited amount authorized, $0.01 par value) | 12,100,000 | 16,200,000 | 101,300,000 | 29,950,000 | 50,800,000 | ||||||||||||||||||
Net asset value | $ | 34.60 | $ | 18.33 | $ | 18.67 | $ | 10.77 | $ | 17.27 | |||||||||||||
Market price | $ | 34.61 | $ | 18.32 | $ | 18.70 | $ | 10.76 | $ | 17.31 | |||||||||||||
Unaffiliated investments, at cost | $ | 380,042,687 | $ | 238,635,412 | $ | 1,706,912,441 | $ | 286,788,329 | $ | 772,956,774 | |||||||||||||
Affiliated investments, at cost | $ | — | $ | — | $ | — | $ | — | $ | 100,442,618 | |||||||||||||
Total investments, at cost | $ | 380,042,687 | $ | 238,635,412 | $ | 1,706,912,441 | $ | 286,788,329 | $ | 873,399,392 | |||||||||||||
(a)Includes securities on loan with an aggregate value of | $ | — | $ | — | $ | — | $ | — | $ | 98,492,833 |
See Notes to Financial Statements.
36
Statements of Operations
Year Ended April 30, 2013
PowerShares Buyback AchieversTM Portfolio (PKW) | PowerShares Dividend AchieversTM Portfolio (PFM) | PowerShares Financial Preferred Portfolio (PGF) | PowerShares High Yield Equity Dividend AchieversTM Portfolio (PEY) | PowerShares International Dividend AchieversTM Portfolio (PID) | |||||||||||||||||||
INVESTMENT INCOME: | |||||||||||||||||||||||
Unaffiliated dividend income | $ | 4,063,484 | $ | 7,654,914 | $ | 122,853,629 | $ | 14,294,690 | $ | 24,031,229 | |||||||||||||
Securities lending income | — | — | — | — | 749,590 | ||||||||||||||||||
Foreign withholding tax | (72 | ) | — | — | — | (2,199,033 | ) | ||||||||||||||||
Total Income | 4,063,412 | 7,654,914 | 122,853,629 | 14,294,690 | 22,581,786 | ||||||||||||||||||
EXPENSES: | |||||||||||||||||||||||
Advisory fees | 1,061,267 | 1,069,925 | 8,640,328 | 1,170,739 | 2,887,281 | ||||||||||||||||||
Sub-licensing | 212,254 | 267,483 | 1,728,067 | 292,685 | 721,820 | ||||||||||||||||||
Accounting & administration fees | 66,103 | 66,118 | 391,221 | 68,268 | 167,530 | ||||||||||||||||||
Recapture (Note 3) | 59,319 | 66,181 | — | 38,984 | 8,006 | ||||||||||||||||||
Custodian & transfer agent fees | 18,528 | 14,671 | 109,319 | 24,693 | 106,623 | ||||||||||||||||||
Trustees fees | 9,783 | 11,500 | 46,206 | 11,772 | 22,555 | ||||||||||||||||||
Other expenses | 63,720 | 65,215 | 182,462 | 64,063 | 109,944 | ||||||||||||||||||
Total Expenses | 1,490,974 | 1,561,093 | 11,097,603 | 1,671,204 | 4,023,759 | ||||||||||||||||||
Net Investment Income | 2,572,438 | 6,093,821 | 111,756,026 | 12,623,486 | 18,558,027 | ||||||||||||||||||
REALIZED AND UNREALIZED GAIN (LOSS): | |||||||||||||||||||||||
Net realized gain (loss) from: | |||||||||||||||||||||||
Investment securities | 536,488 | (710,203 | ) | 7,683,272 | (2,469,847 | ) | (17,542,061 | ) | |||||||||||||||
In-kind redemptions | 13,037,940 | 12,843,756 | 27,941,034 | 15,163,458 | 28,108,429 | ||||||||||||||||||
Foreign currencies | (14,358 | ) | — | — | — | 454 | |||||||||||||||||
Net realized gain | 13,560,070 | 12,133,553 | 35,624,306 | 12,693,611 | 10,566,822 | ||||||||||||||||||
Net change in unrealized appreciation on investment securities | 30,026,839 | 26,678,396 | 43,703,045 | 29,287,799 | 81,786,224 | ||||||||||||||||||
Net realized and unrealized gain | 43,586,909 | 38,811,949 | 79,327,351 | 41,981,410 | 92,353,046 | ||||||||||||||||||
Net increase in net assets resulting from operations | $ | 46,159,347 | $ | 44,905,770 | $ | 191,083,377 | $ | 54,604,896 | $ | 110,911,073 |
See Notes to Financial Statements.
37
Statements of Changes in Net Assets
PowerShares Buyback AchieversTM Portfolio (PKW) | PowerShares Dividend AchieversTM Portfolio (PFM) | PowerShares Financial Preferred Portfolio (PGF) | |||||||||||||||||||||||||
Year Ended April 30, 2013 | Year Ended April 30, 2012 | Year Ended April 30, 2013 | Year Ended April 30, 2012 | Year Ended April 30, 2013 | Year Ended April 30, 2012 | ||||||||||||||||||||||
OPERATIONS: | |||||||||||||||||||||||||||
Net investment income | $ | 2,572,438 | $ | 704,684 | $ | 6,093,821 | $ | 5,496,065 | $ | 111,756,026 | $ | 107,663,938 | |||||||||||||||
Net realized gain (loss) | 13,560,070 | 4,989,364 | 12,133,553 | 17,926,837 | 35,624,306 | 82,703,042 | |||||||||||||||||||||
Net change in unrealized appreciation (depreciation) | 30,026,839 | 5,052,880 | 26,678,396 | (4,714,554 | ) | 43,703,045 | (139,051,457 | ) | |||||||||||||||||||
Net increase (decrease) in net assets resulting from operations | 46,159,347 | 10,746,928 | 44,905,770 | 18,708,348 | 191,083,377 | 51,315,523 | |||||||||||||||||||||
DISTRIBUTIONS TO SHAREHOLDERS FROM: | |||||||||||||||||||||||||||
Net investment income | (2,319,935 | ) | (632,863 | ) | (6,171,759 | ) | (5,330,068 | ) | (109,257,015 | ) | (107,083,605 | ) | |||||||||||||||
Return of capital | — | — | — | — | — | (4,901,487 | ) | ||||||||||||||||||||
Total distributions to shareholders | (2,319,935 | ) | (632,863 | ) | (6,171,759 | ) | (5,330,068 | ) | (109,257,015 | ) | (111,985,092 | ) | |||||||||||||||
SHAREHOLDER TRANSACTIONS: | |||||||||||||||||||||||||||
Proceeds from shares sold | 319,435,178 | 144,656,825 | 64,933,146 | 121,445,277 | 316,357,552 | 190,750,610 | |||||||||||||||||||||
Value of shares repurchased | (84,294,640 | ) | (58,766,144 | ) | (59,726,392 | ) | (99,695,204 | ) | (119,429,930 | ) | (349,898,568 | ) | |||||||||||||||
Net increase (decrease) in net assets resulting from shares transactions | 235,140,538 | 85,890,681 | 5,206,754 | 21,750,073 | 196,927,622 | (159,147,958 | ) | ||||||||||||||||||||
Increase (Decrease) in Net Assets | 278,979,950 | 96,004,746 | 43,940,765 | 35,128,353 | 278,753,984 | (219,817,527 | ) | ||||||||||||||||||||
NET ASSETS: | |||||||||||||||||||||||||||
Beginning of year | 139,641,382 | 43,636,636 | 252,987,607 | 217,859,254 | 1,612,697,985 | 1,832,515,512 | |||||||||||||||||||||
End of year | $ | 418,621,332 | $ | 139,641,382 | $ | 296,928,372 | $ | 252,987,607 | $ | 1,891,451,969 | $ | 1,612,697,985 | |||||||||||||||
Undistributed net investment income at end of year | $ | 382,251 | $ | 134,507 | $ | 810,124 | $ | 798,340 | $ | 4,016,083 | $ | 198,086 | |||||||||||||||
CHANGES IN SHARES OUTSTANDING: | |||||||||||||||||||||||||||
Shares sold | 10,050,000 | 5,300,000 | 3,850,000 | 8,250,000 | 17,250,000 | 10,950,000 | |||||||||||||||||||||
Shares repurchased | (2,700,000 | ) | (2,150,000 | ) | (3,650,000 | ) | (6,500,000 | ) | (6,600,000 | ) | (20,650,000 | ) | |||||||||||||||
Shares outstanding, beginning of year | 4,750,000 | 1,600,000 | 16,000,000 | 14,250,000 | 90,650,000 | 100,350,000 | |||||||||||||||||||||
Shares outstanding, end of year | 12,100,000 | 4,750,000 | 16,200,000 | 16,000,000 | 101,300,000 | 90,650,000 |
See Notes to Financial Statements.
38
PowerShares High Yield Equity Dividend AchieversTM Portfolio (PEY) | PowerShares International Dividend AchieversTM Portfolio (PID) | ||||||||||||||||||
Year Ended April 30, 2013 | Year Ended April 30, 2012 | Year Ended April 30, 2013 | Year Ended April 30, 2012 | ||||||||||||||||
OPERATIONS: | |||||||||||||||||||
Net investment income | $ | 12,623,486 | $ | 10,063,126 | $ | 18,558,027 | $ | 18,637,873 | |||||||||||
Net realized gain (loss) | 12,693,611 | 23,646,080 | 10,566,822 | (8,766,351 | ) | ||||||||||||||
Net change in unrealized appreciation (depreciation) | 29,287,799 | (10,517,450 | ) | 81,786,224 | (41,600,976 | ) | |||||||||||||
Net increase (decrease) in net assets resulting from operations | 54,604,896 | 23,191,756 | 110,911,073 | (31,729,454 | ) | ||||||||||||||
DISTRIBUTIONS TO SHAREHOLDERS FROM: | |||||||||||||||||||
Net investment income | (12,584,468 | ) | (9,978,411 | ) | (18,882,785 | ) | (17,956,612 | ) | |||||||||||
Return of capital | — | — | — | — | |||||||||||||||
Total distributions to shareholders | (12,584,468 | ) | (9,978,411 | ) | (18,882,785 | ) | (17,956,612 | ) | |||||||||||
SHAREHOLDER TRANSACTIONS: | |||||||||||||||||||
Proceeds from shares sold | 108,648,485 | 242,546,677 | 213,885,031 | 417,763,549 | |||||||||||||||
Value of shares repurchased | (104,362,404 | ) | (188,061,234 | ) | (118,768,746 | ) | (228,163,544 | ) | |||||||||||
Net increase (decrease) in net assets resulting from shares transactions | 4,286,081 | 54,485,443 | 95,116,285 | 189,600,005 | |||||||||||||||
Increase (Decrease) in Net Assets | 46,306,509 | 67,698,788 | 187,144,573 | 139,913,939 | |||||||||||||||
NET ASSETS: | |||||||||||||||||||
Beginning of year | 276,169,319 | 208,470,531 | 690,196,256 | 550,282,317 | |||||||||||||||
End of year | $ | 322,475,828 | $ | 276,169,319 | $ | 877,340,829 | $ | 690,196,256 | |||||||||||
Undistributed net investment income at end of year | $ | 79,886 | $ | 76,415 | $ | 3,008,040 | $ | 2,933,414 | |||||||||||
CHANGES IN SHARES OUTSTANDING: | |||||||||||||||||||
Shares sold | 11,250,000 | 26,900,000 | 13,250,000 | 27,800,000 | |||||||||||||||
Shares repurchased | (10,800,000 | ) | (20,400,000 | ) | (7,400,000 | ) | (15,500,000 | ) | |||||||||||
Shares outstanding, beginning of year | 29,500,000 | 23,000,000 | 44,950,000 | 32,650,000 | |||||||||||||||
Shares outstanding, end of year | 29,950,000 | 29,500,000 | 50,800,000 | 44,950,000 |
39
Financial Highlights
PowerShares Buyback AchieversTM Portfolio (PKW)
Year Ended April 30, | |||||||||||||||||||||||
2013 | 2012 | 2011 | 2010 | 2009 | |||||||||||||||||||
PER SHARE OPERATING PERFORMANCE: | |||||||||||||||||||||||
Net asset value at beginning of year | $ | 29.40 | $ | 27.27 | $ | 22.36 | $ | 16.15 | $ | 22.64 | |||||||||||||
Net investment income(a) | 0.37 | 0.27 | 0.11 | 0.19 | 0.26 | ||||||||||||||||||
Net realized and unrealized gain (loss) on investments | 5.18 | 2.12 | 4.87 | 6.29 | (6.55 | ) | |||||||||||||||||
Total from investment operations | 5.55 | 2.39 | 4.98 | 6.48 | (6.29 | ) | |||||||||||||||||
Distributions to shareholders from: | |||||||||||||||||||||||
Net investment income | (0.35 | ) | (0.26 | ) | (0.07 | ) | (0.27 | ) | (0.20 | ) | |||||||||||||
Net asset value at end of year | $ | 34.60 | $ | 29.40 | $ | 27.27 | $ | 22.36 | $ | 16.15 | |||||||||||||
Market price at end of year(b) | $ | 34.61 | $ | 29.40 | $ | 27.27 | $ | 22.37 | $ | 16.16 | |||||||||||||
NET ASSET VALUE, TOTAL RETURN(c) | 19.08 | % | 8.91 | % | 22.34 | % | 40.46 | % | (27.87 | )% | |||||||||||||
MARKET PRICE TOTAL RETURN(c) | 19.11 | % | 8.91 | % | 22.29 | % | 40.43 | % | (27.80 | )% | |||||||||||||
RATIOS/SUPPLEMENTAL DATA: | |||||||||||||||||||||||
Net assets at end of year (000's omitted) | $ | 418,621 | $ | 139,641 | $ | 43,637 | $ | 38,019 | $ | 27,456 | |||||||||||||
Ratio to average net assets of: | |||||||||||||||||||||||
Expenses, after Waivers | 0.70 | % | 0.71 | % | 0.70 | % | 0.70 | % | 0.70 | % | |||||||||||||
Expenses, prior to Waivers | 0.70 | % | 0.79 | % | 1.00 | % | 0.97 | % | 0.92 | % | |||||||||||||
Net investment income, after Waivers | 1.21 | % | 1.00 | % | 0.49 | % | 0.98 | % | 1.39 | % | |||||||||||||
Portfolio turnover rate(d) | 80 | % | 32 | % | 26 | % | 23 | % | 56 | % |
PowerShares Dividend AchieversTM Portfolio (PFM)
Year Ended April 30, | |||||||||||||||||||||||
2013 | 2012 | 2011 | 2010 | 2009 | |||||||||||||||||||
PER SHARE OPERATING PERFORMANCE: | |||||||||||||||||||||||
Net asset value at beginning of year | $ | 15.81 | $ | 15.29 | $ | 13.21 | $ | 10.30 | $ | 16.15 | |||||||||||||
Net investment income(a) | 0.38 | 0.34 | 0.31 | 0.27 | 0.36 | ||||||||||||||||||
Net realized and unrealized gain (loss) on investments | 2.52 | 0.51 | 2.08 | 2.96 | (5.92 | ) | |||||||||||||||||
Total from investment operations | 2.90 | 0.85 | 2.39 | 3.23 | (5.56 | ) | |||||||||||||||||
Distributions to shareholders from: | |||||||||||||||||||||||
Net investment income | (0.38 | ) | (0.33 | ) | (0.31 | ) | (0.32 | ) | (0.29 | ) | |||||||||||||
Net asset value at end of year | $ | 18.33 | $ | 15.81 | $ | 15.29 | $ | 13.21 | $ | 10.30 | |||||||||||||
Market price at end of year(b) | $ | 18.32 | $ | 15.80 | $ | 15.29 | $ | 13.21 | $ | 10.30 | |||||||||||||
NET ASSET VALUE, TOTAL RETURN(c) | 18.67 | % | 5.78 | % | 18.39 | % | 31.76 | % | (34.84 | )% | |||||||||||||
MARKET PRICE TOTAL RETURN(c) | 18.68 | % | 5.71 | % | 18.39 | % | 31.76 | % | (34.84 | )% | |||||||||||||
RATIOS/SUPPLEMENTAL DATA: | |||||||||||||||||||||||
Net assets at end of year (000's omitted) | $ | 296,928 | $ | 252,988 | $ | 217,859 | $ | 133,380 | $ | 85,451 | |||||||||||||
Ratio to average net assets of: | |||||||||||||||||||||||
Expenses, after Waivers | 0.58 | % | 0.60 | % | 0.60 | % | 0.60 | % | 0.60 | % | |||||||||||||
Expenses, prior to Waivers | 0.58 | % | 0.60 | % | 0.61 | % | 0.64 | % | 0.74 | % | |||||||||||||
Net investment income, after Waivers | 2.28 | % | 2.28 | % | 2.30 | % | 2.28 | % | 3.11 | % | |||||||||||||
Portfolio turnover rate(d) | 18 | % | 20 | % | 11 | % | 18 | % | 31 | % |
(a) Based on average shares outstanding.
(b) The mean between the last bid and ask prices.
(c) Net asset value total 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. Market price total return is calculated assuming an initial investment made at the market price at the beginning of the period, reinvestment of all dividends and distributions at market price during the period, and sale at the market price on the last day of the period. Total investment return calculated for a period of less than one year is not annualized.
(d) Portfolio turnover rate is not annualized and does not include securities received or delivered from processing creations or redemptions.
See Notes to Financial Statements.
40
Financial Highlights (Continued)
PowerShares Financial Preferred Portfolio (PGF)
Year Ended April 30, | |||||||||||||||||||||||
2013 | 2012 | 2011 | 2010 | 2009 | |||||||||||||||||||
PER SHARE OPERATING PERFORMANCE: | |||||||||||||||||||||||
Net asset value at beginning of year | $ | 17.79 | $ | 18.26 | $ | 16.97 | $ | 11.41 | $ | 21.17 | |||||||||||||
Net investment income(a) | 1.18 | 1.17 | 1.18 | 1.31 | 1.35 | ||||||||||||||||||
Net realized and unrealized gain (loss) on investments | 0.85 | (0.42 | ) | 1.36 | 5.61 | (9.63 | ) | ||||||||||||||||
Total from investment operations | 2.03 | 0.75 | 2.54 | 6.92 | (8.28 | ) | |||||||||||||||||
Distributions to shareholders from: | |||||||||||||||||||||||
Net investment income | (1.15 | ) | (1.17 | ) | (1.21 | ) | (1.30 | ) | (1.46 | ) | |||||||||||||
Return of capital | — | (0.05 | ) | (0.04 | ) | (0.06 | ) | (0.02 | ) | ||||||||||||||
Total distributions | (1.15 | ) | (1.22 | ) | (1.25 | ) | (1.36 | ) | (1.48 | ) | |||||||||||||
Net asset value at end of year | $ | 18.67 | $ | 17.79 | $ | 18.26 | $ | 16.97 | $ | 11.41 | |||||||||||||
Market price at end of year(b) | $ | 18.70 | $ | 17.83 | $ | 18.28 | $ | 16.93 | $ | 11.41 | |||||||||||||
NET ASSET VALUE, TOTAL RETURN(c) | 11.78 | % | 4.56 | % | 15.57 | % | 62.16 | % | (39.56 | )% | |||||||||||||
MARKET PRICE TOTAL RETURN(c) | 11.71 | % | 4.68 | % | 15.97 | % | 61.76 | % | (39.82 | )% | |||||||||||||
RATIOS/SUPPLEMENTAL DATA: | |||||||||||||||||||||||
Net assets at end of year (000's omitted) | $ | 1,891,452 | $ | 1,612,698 | $ | 1,832,516 | $ | 1,714,824 | $ | 773,644 | |||||||||||||
Ratio to average net assets of: | |||||||||||||||||||||||
Expenses, after Waivers | 0.64 | % | 0.66 | % | 0.66 | % | 0.65 | % | 0.69 | % | |||||||||||||
Expenses, prior to Waivers | 0.64 | % | 0.66 | % | 0.66 | % | 0.65 | % | 0.68 | % | |||||||||||||
Net investment income, after Waivers | 6.47 | % | 6.76 | % | 6.75 | % | 8.30 | % | 11.49 | % | |||||||||||||
Portfolio turnover rate(d) | 18 | % | 6 | % | 26 | % | 23 | % | 45 | % |
PowerShares High Yield Equity Dividend AchieversTM Portfolio (PEY)
Year Ended April 30, | |||||||||||||||||||||||
2013 | 2012 | 2011 | 2010 | 2009 | |||||||||||||||||||
PER SHARE OPERATING PERFORMANCE: | |||||||||||||||||||||||
Net asset value at beginning of year | $ | 9.36 | $ | 9.06 | $ | 8.44 | $ | 6.12 | $ | 11.36 | |||||||||||||
Net investment income(a) | 0.42 | 0.35 | 0.34 | 0.32 | 0.43 | ||||||||||||||||||
Net realized and unrealized gain (loss) on investments | 1.41 | 0.29 | 0.63 | 2.35 | (5.21 | ) | |||||||||||||||||
Total from investment operations | 1.83 | 0.64 | 0.97 | 2.67 | (4.78 | ) | |||||||||||||||||
Distributions to shareholders from: | |||||||||||||||||||||||
Net investment income | (0.42 | ) | (0.34 | ) | (0.34 | ) | (0.33 | ) | (0.43 | ) | |||||||||||||
Return of capital | — | — | (0.01 | ) | (0.02 | ) | (0.03 | ) | |||||||||||||||
Total distributions | (0.42 | ) | (0.34 | ) | (0.35 | ) | (0.35 | ) | (0.46 | ) | |||||||||||||
Net asset value at end of year | $ | 10.77 | $ | 9.36 | $ | 9.06 | $ | 8.44 | $ | 6.12 | |||||||||||||
Market price at end of year(b) | $ | 10.76 | $ | 9.36 | $ | 9.06 | $ | 8.44 | $ | 6.12 | |||||||||||||
NET ASSET VALUE, TOTAL RETURN(c) | 20.16 | % | 7.37 | % | 11.91 | % | 44.59 | % | (42.88 | )% | |||||||||||||
MARKET PRICE TOTAL RETURN(c) | 20.05 | % | 7.37 | % | 11.91 | % | 44.58 | % | (42.88 | )% | |||||||||||||
RATIOS/SUPPLEMENTAL DATA: | |||||||||||||||||||||||
Net assets at end of year (000's omitted) | $ | 322,476 | $ | 276,169 | $ | 208,471 | $ | 127,424 | $ | 86,846 | |||||||||||||
Ratio to average net assets of: | |||||||||||||||||||||||
Expenses, after Waivers | 0.57 | % | 0.60 | % | 0.60 | % | 0.60 | % | 0.60 | % | |||||||||||||
Expenses, prior to Waivers | 0.57 | % | 0.60 | % | 0.62 | % | 0.65 | % | 0.62 | % | |||||||||||||
Net investment income, after Waivers | 4.31 | % | 3.88 | % | 4.02 | % | 4.42 | % | 5.24 | % | |||||||||||||
Portfolio turnover rate(d) | 32 | % | 35 | % | 44 | % | 57 | % | 77 | % |
(a) Based on average shares outstanding.
(b) The mean between the last bid and ask prices.
(c) Net asset value total 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. Market price total return is calculated assuming an initial investment made at the market price at the beginning of the period, reinvestment of all dividends and distributions at market price during the period, and sale at the market price on the last day of the period. Total investment return calculated for a period of less than one year is not annualized.
(d) Portfolio turnover rate is not annualized and does not include securities received or delivered from processing creations or redemptions.
See Notes to Financial Statements.
41
Financial Highlights (Continued)
PowerShares International Dividend AchieversTM Portfolio (PID)
Year Ended April 30, | |||||||||||||||||||||||
2013 | 2012 | 2011 | 2010 | 2009 | |||||||||||||||||||
PER SHARE OPERATING PERFORMANCE: | |||||||||||||||||||||||
Net asset value at beginning of year | $ | 15.35 | $ | 16.85 | $ | 14.26 | $ | 10.14 | $ | 19.63 | |||||||||||||
Net investment income(a) | 0.40 | 0.48 | 0.47 | 0.35 | 0.52 | ||||||||||||||||||
Net realized and unrealized gain (loss) on investments | 1.93 | (1.49 | ) | 2.59 | 4.24 | (9.46 | ) | ||||||||||||||||
Total from investment operations | 2.33 | (1.01 | ) | 3.06 | 4.59 | (8.94 | ) | ||||||||||||||||
Distributions to shareholders from: | |||||||||||||||||||||||
Net investment income | (0.41 | ) | (0.49 | ) | (0.47 | ) | (0.47 | ) | (0.55 | ) | |||||||||||||
Net asset value at end of year | $ | 17.27 | $ | 15.35 | $ | 16.85 | $ | 14.26 | $ | 10.14 | |||||||||||||
Market price at end of year(b) | $ | 17.31 | $ | 15.37 | $ | 16.89 | $ | 14.26 | $ | 10.15 | |||||||||||||
NET ASSET VALUE, TOTAL RETURN(c) | 15.63 | % | (5.87 | )% | 21.95 | % | 45.77 | % | (46.44 | )% | |||||||||||||
MARKET PRICE TOTAL RETURN(c) | 15.75 | % | (5.97 | )% | 22.23 | % | 45.62 | % | (46.30 | )% | |||||||||||||
RATIOS/SUPPLEMENTAL DATA: | |||||||||||||||||||||||
Net assets at end of year (000's omitted) | $ | 877,341 | $ | 690,196 | $ | 550,282 | $ | 427,783 | $ | 256,584 | |||||||||||||
Ratio to average net assets of: | |||||||||||||||||||||||
Expenses, after Waivers | 0.56 | % | 0.55 | % | 0.58 | % | 0.57 | % | 0.57 | % | |||||||||||||
Expenses, prior to Waivers | 0.56 | % | 0.56 | % | 0.58 | % | 0.57 | % | 0.57 | % | |||||||||||||
Net investment income, after Waivers | 2.57 | % | 3.20 | % | 3.20 | % | 2.65 | % | 3.87 | % | |||||||||||||
Portfolio turnover rate(d) | 46 | % | 33 | % | 42 | % | 63 | % | 50 | % |
(a) Based on average shares outstanding.
(b) The mean between the last bid and ask prices.
(c) Net asset value total 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. Market price total return is calculated assuming an initial investment made at the market price at the beginning of the period, reinvestment of all dividends and distributions at market price during the period, and sale at the market price on the last day of the period. Total investment return calculated for a period of less than one year is not annualized.
(d) Portfolio turnover rate is not annualized and does not include securities received or delivered from processing creations or redemptions.
See Notes to Financial Statements.
42
Notes to Financial Statements
PowerShares Exchange-Traded Fund Trust
April 30, 2013
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 April 30, 2013, the Trust offered fifty-five portfolios. This report includes the following portfolios:
Full Name | Short Name | ||||||
PowerShares Buyback AchieversTM Portfolio (PKW) | "Buyback AchieversTM Portfolio" | ||||||
PowerShares Dividend AchieversTM Portfolio (PFM) | "Dividend AchieversTM Portfolio" | ||||||
PowerShares Financial Preferred Portfolio (PGF) | "Financial Preferred Portfolio" | ||||||
PowerShares High Yield Equity Dividend AchieversTM Portfolio (PEY) | "High Yield Equity Dividend AchieversTM Portfolio" | ||||||
PowerShares International Dividend AchieversTM Portfolio (PID) | "International Dividend AchieversTM Portfolio" |
Each portfolio (each, a "Fund" and collectively, the "Funds") represents a separate series of the Trust. The shares of the Funds are referred to herein as "Shares" or "Fund's Shares." Each Fund's Shares are listed and traded on NYSE Arca, Inc.
The market prices of each Fund's Shares may differ to some degree from the Fund's net asset value ("NAV"). Unlike conventional mutual funds, each Fund issues and redeems Shares on a continuous basis, at NAV, 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 each Fund's relevant index. Except when aggregated in Creation Units by Authorized Participants, the Shares are not individually redeemable securities of the Funds.
The investment objective of each Fund is to seek investment results that generally correspond (before fees and expenses) to the price and yield of its respective index listed below (each, an "Underlying Index"):
Fund | Index | ||||||
Buyback AchieversTM Portfolio | NASDAQ Buyback Achievers Index | ||||||
Dividend AchieversTM Portfolio | NASDAQ US Broad Dividend Achievers Index | ||||||
Financial Preferred Portfolio | Wells Fargo® Hybrid & Preferred Securities Financial Index | ||||||
High Yield Equity Dividend AchieversTM Portfolio | NASDAQ Dividend Achievers 50 Index | ||||||
International Dividend AchieversTM Portfolio | NASDAQ International Dividend Achievers 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 ("GAAP") 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. In addition, the Funds monitor for material events or transactions that may occur or become known after the period-end date and before the date the financial statements are released to print.
43
Notes to Financial Statements (Continued)
PowerShares Exchange-Traded Fund Trust
April 30, 2013
A. Security Valuation
Securities, including restricted securities, are valued according to the following policies.
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 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 and closed end registered investment companies that do not trade on an exchange are valued at the end of day net asset value per share. Investments in open-end and closed-end registered investment companies that trade on an exchange are valued at the 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.
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 (for unlisted equities), yield (for debt obligations), quality, type of issue, coupon rate (for debt obligations), maturity (for debt obligations), individual trading characteristics and other market data. Securities with a demand feature exercisable within one to seven days are valued at par. Debt obligations are subject to interest rate and credit risks. In addition, all debt obligations involve some risk of default with respect to interest and/or principal payments.
Foreign securities' (including foreign exchange contracts) prices 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 New York Stock Exchange ("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 the Adviser determines are significant and 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 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' prices 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, American Depositary Receipts 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
44
Notes to Financial Statements (Continued)
PowerShares Exchange-Traded Fund Trust
April 30, 2013
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 became unreliable are valued at fair value as determined in good faith 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. Because of the inherent uncertainties of valuation, the values reflected in the financial statements may materially differ from the value received upon actual sale of those investments.
B. Other Risks
Index Risk. Unlike many investment companies, the Funds do not utilize an investing strategy that seeks returns in excess of each Fund's respective Underlying Index. Therefore, a Fund would not necessarily buy or sell a security unless that security is added or removed, respectively, from its respective Underlying Index, even if that security generally is underperforming.
Equity Risk. Equity risk is the risk that the value of the securities a Fund holds will fall due to general market and economic conditions, perceptions regarding the industries in which the issuers of securities a Fund holds participate or factors relating to specific companies in which a Fund invests. For example, an adverse event, such as an unfavorable earnings report, may depress the value of securities a Fund holds; the price of securities may be particularly sensitive to general movements in the stock market; or a drop in the stock market may depress the price of most or all of the securities a Fund holds. In addition, securities of an issuer in a Fund's portfolio may decline in price if the issuer fails to make anticipated dividend payments because, among other reasons, the issuer of the security experiences a decline in its financial condition.
Industry Concentration Risk. In following its methodology, each Fund's Underlying Index from time to time may be concentrated to a significant degree in securities of issuers located in a single industry or a sector. To the extent that an Underlying Index concentrates in the securities of issuers in a particular industry or sector, each Fund will also concentrate its investments to approximately the same extent. By concentrating its investments in an industry or sector, a Fund may face more risks than if it were diversified broadly over numerous industries or sectors. In addition, at times, an industry or sector may be out of favor and underperform other industries or the market as a whole. Any factors detrimental to the performance of such industry or sector will disproportionately impact a Fund's NAV.
Non-Diversified Fund Risk. Buyback AchieversTM Portfolio and Financial Preferred Portfolio are non-diversified and can invest a greater portion of assets in securities of individual issuers than diversified funds. 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. This may increase the Funds' volatility and cause the performance of a relatively small number of issuers to have a greater impact on the Funds' performance.
45
Notes to Financial Statements (Continued)
PowerShares Exchange-Traded Fund Trust
April 30, 2013
Non-Correlation Risk. Each Fund's return may not match the return of its Underlying Index for a number of reasons. For example, each Fund incurs 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 its Underlying Index. In addition, the performance of each Fund and its Underlying Index may vary due to asset valuation differences and differences between each Fund's portfolio and its Underlying Index resulting from legal restrictions, cost or liquidity constraints.
Small and Medium Capitalization Company Risk. Investing in securities of small and medium capitalization companies involves greater risk than customarily is associated with investing in larger, more established companies. These companies' securities may be more volatile and less liquid than those of more established companies. These securities may have returns that vary, sometimes significantly, from the overall securities market. Often small and medium capitalization companies and the industries in which they focus are still evolving and, as a result, they may be more sensitive to changing market conditions.
Dividend Paying Security Risk. Dividend AchieversTM Portfolio, High Yield Equity Dividend AchieversTM Portfolio and International Dividend AchieversTM Portfolio invest in securities that pay high dividends. As a group these securities can fall out of favor with the market, causing such companies to underperform companies that do not pay high dividends. Also, changes in the dividend policies of the companies in an Underlying Index and the capital resources available for such companies' dividend payments may affect a Fund.
Foreign Securities Risk. For Financial Preferred Portfolio and International Dividend AchieversTM Portfolio, investments in foreign securities involve risks that are in addition to the risks associated with domestic securities. Foreign companies, in general, are not subject to the regulatory requirements of U.S. companies and, as such, there may be less publicly available information about these companies. Moreover, foreign companies often are subject to less stringent requirements regarding accounting, auditing, financial reporting and record-keeping than are U.S. companies. Therefore, not all material information regarding these companies will be available.
In addition, securities of foreign issuers may be less liquid than comparable securities of U.S. issuers and, as such, their price changes may be more volatile. Furthermore, foreign exchanges and broker-dealers generally are subject to less government and exchange scrutiny and regulation than their U.S. counterparts. In addition, differences in clearance and settlement procedures in foreign markets may cause delays in settlement of a Fund's trades effected in those markets and could result in losses to a Fund due to subsequent declines in the value of the securities subject to the trades. Depositary receipts also involve substantially identical risks to those associated with investments in foreign securities. Additionally, the issuers of certain depositary receipts, particularly unsponsored or unregistered depositary receipts, have no obligation to distribute shareholder communications to the holders of such receipts or to pass through to them any voting rights with respect to the deposited securities.
46
Notes to Financial Statements (Continued)
PowerShares Exchange-Traded Fund Trust
April 30, 2013
High Yield Securities Risk. With respect to Financial Preferred Portfolio and High Yield Equity Dividend AchieversTM Portfolio, investments in high yield securities typically involve greater risk and are less liquid than higher grade issues. Changes in general economic conditions, changes in the financial condition of the issuers and changes in interest rates may adversely impact the ability of issuers of high yield securities to make timely payments of interest and principal.
Preferred Securities Risk. PowerShares Financial Preferred Portfolio faces special risks associated with investing in preferred securities. Preferred securities may include provisions that permit the issuer, in its discretion, to defer or omit distributions for a certain period of time. If the Fund owns a security that is deferring or omitting its distributions, the Fund may be required to report the distribution on its tax returns, even though it may not have received this income. Further, preferred securities may lose substantial value due to the omission or deferment of dividend payments. Preferred securities may be less liquid than many other securities, such as common stocks, and generally offer no voting rights with respect to the issuer. Preferred securities also may be subordinated to bonds or other debt instruments in an issuer's capital structure, subjecting them to a greater risk of non-payment than more senior securities. In addition, in certain circumstances, an issuer of preferred securities may redeem the securities prior to a specified date, and this may negatively impact the return of the security.
C. Federal Income Taxes
Each Fund intends to comply with the provisions of the Internal Revenue Code of 1986, as amended (the "Internal Revenue Code"), applicable to regulated investment companies and to 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 recorded in the financial statements.
Income and capital gain distributions are determined in accordance with federal income tax regulations, which may differ from GAAP. These timing 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 U.S. federal tax returns and tax returns in 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 Transactions and Investment Income
Investment transactions are accounted for on a trade date basis. Realized gains and losses from the sale or disposition of securities are computed on the specific identified cost basis. Interest income is recorded on the accrual basis. Dividend income (net of withholding tax, if any) is recorded on the ex-dividend date. Dividends and interest received by a 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.
Corporate actions (including cash dividends) are recorded net of non-reclaimable foreign tax withholdings on the ex-dividend date.
47
Notes to Financial Statements (Continued)
PowerShares Exchange-Traded Fund Trust
April 30, 2013
E. Expenses
Expenses of the Trust that are directly identifiable to a specific Fund are applied to that Fund. Expenses of the Trust that 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 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 related to its respective Underlying Index, any distribution fees or expenses, litigation expenses, fees payable to the Trust's Board members who are not "interested persons" (as defined in the 1940 Act) of the Trust (the "Independent Trustees") or Invesco PowerShares Capital Management LLC (the "Adviser"), expenses incurred in connection with the Board members' services, including travel expenses and legal fees of counsel for the Independent Trustees, acquired fund fees and expenses, if any and extraordinary expenses.
F. Dividends and Distributions to Shareholders
Each Fund (except for High Yield Dividend AchieversTM Portfolio and Financial Preferred Portfolio, which declare and pay dividends, if any, monthly) declares and pays dividends from net investment income, if any, to its shareholders quarterly and records such dividends on ex-dividend date. Generally, each Fund distributes net realized taxable capital gains, if any, annually in cash and records them on ex-dividend date. Such distributions on a tax basis are determined in conformity with federal income tax regulations, which may differ from GAAP. 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. Change in Accounting Policy – Equalization
The Funds previously followed the accounting practice known as equalization. Equalization accounting is utilized for book purposes to keep the continuing shareholders' per share equity in undistributed net investment income from being affected by the continuous sales and redemptions of capital shares. During the fiscal year ended April 30, 2013, all Funds discontinued the practice of equalization accounting for book purposes. The prior period financial statements have been restated to reflect the accounting change.
The change in policy has been accounted for in accordance with ASC 250 "Accounting Changes and Error Corrections." The change was implemented for consistent application of book and tax treatment related to the Funds' distributions. The result of the policy change did not have an impact on the Funds' net assets, net increase/decrease in net assets resulting from operations or per share net asset value. Additionally, the change does not have an impact on the amount or tax character of a Fund's distributions to shareholders or net asset value total return.
For financial reporting purposes, the amounts were reported in the Statements of Changes in Net Assets as "Undistributed net investment income (loss) included in the price of units issued and redeemed" as a component of the "Net increase (decrease) in net assets resulting from operations" with an offsetting amount included in "Net income (loss) equalization" included in the subtotal "Net increase (decrease) in
48
Notes to Financial Statements (Continued)
PowerShares Exchange-Traded Fund Trust
April 30, 2013
net assets resulting from share transactions." The amount of equalization charges or credits previously reported and the amount in the current period had the change not been made were as follows:
Statements of Changes in Net Assets | |||||||||||
Net income (loss) equalization* | |||||||||||
For the year ended April 30, 2013 | For the year ended April 30, 2012 | ||||||||||
Buyback AchieversTM Portfolio | $ | (591,516 | ) | $ | (26,276 | ) | |||||
Dividend AchieversTM Portfolio | 26,455 | (58,969 | ) | ||||||||
Financial Preferred Portfolio | (507,286 | ) | (1,345,446 | ) | |||||||
High Yield Equity Dividend AchieversTM Portfolio | 3,417 | 78,789 | |||||||||
International Dividend AchieversTM Portfolio | (645,514 | ) | (692,028 | ) |
* An equal offsetting amount was made to the operations section of the Statement of Changes in Net Assets
The per share impact of the net equalization charges and credits disclosed in previous financial statements and the amount in the current period had the change not been made were as follows:
Financial Highlights | |||||||||||||||||||||||
For the Year Ended April 30, | |||||||||||||||||||||||
2013 | 2012 | 2011 | 2010 | 2009 | |||||||||||||||||||
Buyback AchieversTM Portfolio | $ | 0.09 | $ | 0.01 | $ | 0.00 | $ | 0.00 | $ | (0.02 | ) | ||||||||||||
Dividend AchieversTM Portfolio | (0.00 | ) | 0.00 | 0.03 | 0.01 | 0.03 | |||||||||||||||||
Financial Preferred Portfolio | 0.01 | 0.01 | 0.00 | (0.02 | ) | 0.02 | |||||||||||||||||
High Yield Equity Dividend AchieversTM Portfolio | (0.00 | ) | (0.00 | ) | 0.00 | 0.00 | 0.00 | ||||||||||||||||
International Dividend AchieversTM Portfolio | 0.01 | 0.02 | 0.01 | 0.02 | (0.01 | ) |
H. Securities Lending
International Dividend AchieversTM Portfolio may lend portfolio securities having a market value up to one-third of the Fund's total assets. Such loans are secured by cash collateral equal to no less than 102% of the market value of the loaned securities determined daily by the securities lending provider. Cash collateral received in connection with these loans is invested in an affiliated money market fund and is shown as such on the Schedule of Investments. It is the policy of the Fund to obtain additional collateral from or return excess collateral to the borrower by the end of the next business day, following the valuation date of the securities loaned. Therefore, the value of the collateral held may be temporarily less than the value of the securities on loan. Lending securities entails a risk of loss to a Fund, if and to the extent that, the market value of the securities loaned were to increase, and the borrower did not increase the collateral accordingly, and the borrower fails to return the securities. Upon the failure of the borrower to return the securities, collateral may be liquidated and the securities may be purchased on the open market to replace the loaned securities. A Fund could experience delays and costs in gaining access to the collateral. A Fund bears the risk of any deficiency in the amount of the collateral available for return to the borrower due to any loss on the collateral invested. Dividends received on cash collateral investments for securities lending transactions, which are net of compensation to counterparties, are included in Securities lending income on the Statements of Operations. The aggregate value of securities out on loan is shown on the Statements of Assets and Liabilities, if any.
49
Notes to Financial Statements (Continued)
PowerShares Exchange-Traded Fund Trust
April 30, 2013
Note 3. Investment Advisory Agreement and Other Agreements
The Trust has entered into an Investment Advisory Agreement with the Adviser pursuant to which the Adviser has overall responsibility 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 has agreed to pay the Adviser an annual fee of 0.40% of each Fund's average daily net assets, except for Buyback AchieversTM Portfolio and Financial Preferred Portfolio, each of which pay the Adviser an annual fee of 0.50% of each Fund's average daily net assets.
The Adviser has entered into an Amended and Restated Excess Expense Agreement (the "Expense Agreement") with the Trust, pursuant to which the Adviser has agreed to waive fees and/or pay Fund expenses to the extent necessary to prevent the operating expenses (excluding interest expenses, brokerage commissions and other trading expenses, sub-licensing fees, offering costs, taxes, acquired fund fees and expenses, if any and extraordinary expenses) of each Fund (except for Buyback AchieversTM Portfolio and Financial Preferred Portfolio) from exceeding 0.50% of the Fund's average daily net assets per year (0.60% of the Fund's average daily net assets per year for the Buyback AchieversTM Portfolio and Financial Preferred Portfolio) (the "Expense Cap"), through at least August 31, 2014. Offering costs excluded from the Expense Cap are: (a) initial legal fees pertaining to the Funds' Shares offered for sale; (b) initial Securities and Exchange Commission and state registration fees; and (c) initial fees paid to be listed on an exchange.
The Expense Agreement provides that the fees waived or expenses borne by the Adviser are subject to recapture by the Adviser for up to three years from the date the fee was waived 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 amounts available for potential future recapture by the Adviser under the Expense Agreement and the expiration schedule at April 30, 2013 are as follows:
Total Potential | Potential Recapture Amounts Expiring | ||||||||||||||||||
Recapture Amounts | 04/30/14 | 04/30/15 | 04/30/16 | ||||||||||||||||
Buyback AchieversTM Portfolio | $ | 169,825 | $ | 110,403 | $ | 59,422 | $ | — | |||||||||||
Dividend AchieversTM Portfolio | 8,351 | 5,213 | 3,138 | — |
The Trust has entered into a Distribution Agreement with Invesco Distributors, Inc. (the "Distributor"), which serves as the distributor of Creation Units for each Fund. The Distributor does not maintain a secondary market in the Shares. The Funds are not charged any fees pursuant to the Distribution Agreement. The Distributor is an affiliate of the Adviser. The Adviser has entered into a licensing agreement for each Fund with the following entities (each, a "Licensor"):
Fund | Licensor | ||||||
Buyback AchieversTM Portfolio | NASDAQ OMX Group, Inc.* | ||||||
Dividend AchieversTM Portfolio | NASDAQ OMX Group, Inc.* | ||||||
Financial Preferred Portfolio | Wells Fargo Securities, LLC | ||||||
High Yield Equity Dividend AchieversTM Portfolio | NASDAQ OMX Group, Inc.* | ||||||
International Dividend AchieversTM Portfolio | NASDAQ OMX Group, Inc.* |
* Effective December 28, 2012, the NASDAQ OMX Group, Inc. replaced Mergent®, Inc. as the Index Provider of the Index.
50
Notes to Financial Statements (Continued)
PowerShares Exchange-Traded Fund Trust
April 30, 2013
Each Underlying Index name trademark is owned by its respective Licensor. These trademarks have been licensed to the Adviser for use with the Funds. Each Fund is entitled to use its Underlying Index pursuant to the Trust's sub-licensing agreement with the Adviser. The Funds are required to pay the sub-licensing fees that are shown on the Statements of Operations. 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 Trust has entered into service agreements whereby The Bank of New York Mellon, a wholly-owned subsidiary of The Bank of New York Mellon Corporation, serves as the administrator, custodian and fund accountant and transfer agent for each Fund.
Note 4. Additional Valuation Information
GAAP defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date, under current market conditions. GAAP establishes a hierarchy that prioritizes the inputs to valuation methods, giving the highest priority to readily available unadjusted quoted prices in an active market for identical assets (Level 1) and the lowest priority to significant unobservable inputs (Level 3), generally when market prices are not readily available or are unreliable. Based on the valuation inputs, the securities or other investments are tiered into one of three levels. Changes in valuation methods may result in transfers in or out of an investment's assigned level:
Level 1 – Prices are determined using quoted prices in an active market for identical assets.
Level 2 – Prices are determined using other significant observable inputs. Observable inputs are inputs that other market participants may use in pricing a security. These may include quoted prices for similar securities, interest rates, prepayment speeds, credit risk, yield curves, loss severities, default rates, discount rates, volatilities and others.
Level 3 – Prices are determined using significant unobservable inputs. In situations where quoted prices or observable inputs are unavailable (for example, when there is little or no market activity for an investment at the end of the period), unobservable inputs may be used. Unobservable inputs reflect the Fund's own assumptions about the factors market participants would use in determining fair value of the securities or instruments and would be based on the best available information.
Except for the Fund listed below, as of April 30, 2013, the securities in each Fund were valued based on Level 1 inputs (see the Schedule of Investments for security categories). The level assigned to the securities valuations may not be an indication of the risk or liquidity associated with investing in those securities. Because of the inherent uncertainties of valuation, the values reflected in the financial statements may materially differ from the value received upon actual sale of those investments.
Investments in Securities | |||||||||||||||||||
Level 1 | Level 2 | Level 3 | Total | ||||||||||||||||
Financial Preferred Portfolio | |||||||||||||||||||
Preferred Stocks | $ | 1,909,678,754 | $ | 22,070,000 | $ | — | $ | 1,931,748,754 | |||||||||||
Money Market Fund | 13,471,541 | — | — | 13,471,541 | |||||||||||||||
Total | $ | 1,923,150,295 | $ | 22,070,000 | $ | — | $ | 1,945,220,295 |
51
Notes to Financial Statements (Continued)
PowerShares Exchange-Traded Fund Trust
April 30, 2013
Note 5. Distributions to Shareholders and Tax Components of Net Assets
Tax Character of Distributions to Shareholders Paid During the Fiscal Years Ended April 30, 2013 and 2012:
2013 | 2012 | ||||||||||||||||||
Ordinary Income | Return of Capital | Ordinary Income | Return of Capital | ||||||||||||||||
Buyback AchieversTM Portfolio | $ | 2,319,935 | $ | — | $ | 632,863 | $ | — | |||||||||||
Dividend AchieversTM Portfolio | 6,171,759 | — | 5,330,068 | — | |||||||||||||||
Financial Preferred Portfolio(1) | 108,100,715 | — | 115,157,421 | 4,901,487 | |||||||||||||||
High Yield Equity Dividend AchieversTM Portfolio | 12,584,468 | — | 9,978,411 | — | |||||||||||||||
International Dividend AchieversTM Portfolio | 18,882,785 | — | 17,956,612 | — |
(1) Tax year-end is October 31.
Tax Components of Net Assets at Fiscal Year-End:
Undistributed Ordinary Income | Temporary Book/Tax Differences | Net Unrealized Appreciation – Investment Securities | Capital Loss Carryforward | Post-October Capital Losses Deferrals* | Shares of Beneficial Interest | Total Net Assets | |||||||||||||||||||||||||
Buyback AchieversTM Portfolio | $ | 391,680 | $ | (9,429 | ) | $ | 37,134,704 | $ | (23,176,829 | ) | $ | (1,168,215 | ) | $ | 405,449,421 | $ | 418,621,332 | ||||||||||||||
Dividend AchieversTM Portfolio | 822,630 | (12,506 | ) | 55,567,652 | (19,658,230 | ) | (68,301 | ) | 260,277,127 | 296,928,372 | |||||||||||||||||||||
Financial Preferred Portfolio(1) | — | (44,100 | ) | 208,413,610 | (40,857,464 | ) | — | 1,581,970,876 | 1,749,482,922 | ||||||||||||||||||||||
High Yield Equity Dividend AchieversTM Portfolio | 94,340 | (14,454 | ) | 34,556,884 | (142,278,630 | ) | (1,897,594 | ) | 432,015,282 | 322,475,828 | |||||||||||||||||||||
International Dividend AchieversTM Portfolio | 3,035,736 | (27,696 | ) | 98,407,398 | (259,742,521 | ) | (5,619,605 | ) | 1,041,287,517 | 877,340,829 |
* The Funds will elect to defer net capital losses incurred after October 31 ("Post-October Capital Losses") within the taxable year that are deemed to arise on the first business day of each Fund's next taxable year.
(1) Tax year-end is October 31.
Capital loss carryforward is calculated and reported as of a specific date. Results of transactions and other activity after that date may affect the amount of capital loss carryforward actually available for the Funds to utilize. The Regulated Investment Company Modernization Act of 2010 eliminated the eight-year carryover period for capital losses that arise in taxable years beginning after its enactment date of December 22, 2010. Consequently, these capital losses can be carried forward for an unlimited period. However, capital losses with an expiration period may not be used to offset capital gains until all net capital losses without an expiration date have been utilized. Additionally, post-enactment capital loss carryforwards will retain their character as either short-term or long-term capital losses instead of as short-term capital losses as under prior law. The ability to utilize capital loss carryforward in the future may be limited under Internal Revenue Code rules and related regulations based on the results of future transactions.
52
Notes to Financial Statements (Continued)
PowerShares Exchange-Traded Fund Trust
April 30, 2013
The following Funds have a capital loss carryforward as of April 30, 2013, which expires as follows:
Post-effective no expiration | |||||||||||||||||||||||||||||||||||||||||||
2014 | 2015 | 2016 | 2017 | 2018 | 2019 | Short-term | Long-term | Total* | Utilized | ||||||||||||||||||||||||||||||||||
Buyback AchieversTM Portfolio | $ | — | $ | — | $ | 8,126,181 | $ | 800,254 | $ | 12,142,749 | $ | 2,107,645 | $ | — | $ | — | $ | 23,176,829 | $ | 1,757,404 | |||||||||||||||||||||||
Dividend AchieversTM Portfolio | 7,896 | — | 50,943 | 1,716,151 | 14,632,363 | 2,339,194 | 320,395 | 591,288 | 19,658,230 | — | |||||||||||||||||||||||||||||||||
Financial Preferred Portfolio(1) | — | — | 24,467,971 | 9,034,558 | 7,354,935 | — | — | — | 40,857,464 | 7,550,854 | |||||||||||||||||||||||||||||||||
High Yield Equity Dividend AchieversTM Portfolio | 1,616,610 | 7,009,598 | 5,162,362 | 81,487,358 | 44,815,128 | 2,187,574 | — | — | 142,278,630 | 735,489 | |||||||||||||||||||||||||||||||||
International Dividend AchieversTM Portfolio | — | 148,582 | 1,975,339 | 59,472,841 | 145,514,837 | 11,745,409 | 28,700,063 | 12,185,450 | 259,742,521 | — |
* Capital loss carryforward as of the date listed above is reduced for limitations, if any, to the extent required by the Internal Revenue Code.
(1) Tax year-end and carryforward expiration is October 31.
Note 6. Investment Transactions
For the fiscal year ended April 30, 2013, 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 | ||||||||||
Buyback AchieversTM Portfolio | $ | 177,192,507 | $ | 173,969,943 | |||||||
Dividend AchieversTM Portfolio | 52,248,387 | 47,735,068 | |||||||||
Financial Preferred Portfolio | 461,922,677 | 313,586,902 | |||||||||
High Yield Equity Dividend AchieversTM Portfolio | 93,861,732 | 94,419,414 | |||||||||
International Dividend AchieversTM Portfolio | 340,143,360 | 334,659,709 |
For the fiscal year ended April 30, 2013, in-kind transactions associated with creations and redemptions were as follows:
Securities Received | Securities Delivered | ||||||||||
Buyback AchieversTM Portfolio | $ | 317,509,794 | $ | 85,215,838 | |||||||
Dividend AchieversTM Portfolio | 54,039,660 | 52,916,144 | |||||||||
Financial Preferred Portfolio | 213,071,609 | 119,318,983 | |||||||||
High Yield Equity Dividend AchieversTM Portfolio | 109,167,675 | 104,450,816 | |||||||||
International Dividend AchieversTM Portfolio | 212,194,915 | 119,333,587 |
Gains (losses) on in-kind transactions are generally not considered taxable gains (losses) for federal income tax purposes.
53
Notes to Financial Statements (Continued)
PowerShares Exchange-Traded Fund Trust
April 30, 2013
At April 30, 2013, the aggregate cost and the net unrealized appreciation (depreciation) of investment for tax purposes were as follows:
Cost | Net Unrealized Appreciation | Gross Unrealized Appreciation | Gross Unrealized (Depreciation) | ||||||||||||||||
Buyback AchieversTM Portfolio | $ | 381,810,146 | $ | 37,134,704 | $ | 40,172,480 | $ | (3,037,776 | ) | ||||||||||
Dividend AchieversTM Portfolio | 241,363,569 | 55,567,652 | 56,524,304 | (956,652 | ) | ||||||||||||||
Financial Preferred Portfolio(1) | 1,553,493,159 | 208,413,610 | 209,856,523 | (1,442,913 | ) | ||||||||||||||
High Yield Equity Dividend AchieversTM Portfolio | 288,776,559 | 34,556,884 | 37,129,939 | (2,573,055 | ) | ||||||||||||||
International Dividend AchieversTM Portfolio | 879,739,716 | 98,407,398 | 111,220,902 | (12,813,504 | ) |
(1) Tax year-end is October 31.
Note 7. Reclassification of Permanent Differences
Primarily as a result of differing book/tax treatment of in-kind transactions on April 30, 2013, amounts were reclassified between undistributed net investment income (loss), undistributed net realized gain (loss) and shares of beneficial interest. These reclassifications had no effect on the net assets of each Fund. For the fiscal year ended April 30, 2013, the reclassifications were as follows:
Undistributed Net Investment Income (Loss) | Undistributed Net Realized Gain (Loss) | Shares of Beneficial Interest | |||||||||||||
Buyback AchieversTM Portfolio | $ | (4,759 | ) | $ | (12,860,857 | ) | $ | 12,865,616 | |||||||
Dividend AchieversTM Portfolio | 89,722 | (12,348,049 | ) | 12,258,327 | |||||||||||
Financial Preferred Portfolio(1) | 1,318,986 | (43,731,907 | ) | 42,412,921 | |||||||||||
High Yield Equity Dividend AchieversTM Portfolio | (35,547 | ) | (14,727,438 | ) | 14,762,985 | ||||||||||
International Dividend AchieversTM Portfolio | 399,384 | (26,699,193 | ) | 26,299,809 |
(1) Tax year-end is October 31.
Note 8. Trustees' Fees
The Funds compensate each Independent Trustee. The Trustee who is an "interested person" (the "Non-Independent Trustee") of the Trust does not receive any Trustees' fees.
The Trust has adopted a deferred compensation plan (the "Plan"). Under the Plan, an Independent Trustee who has executed a Deferred Fee Agreement (a "Participating Trustee") may defer receipt of all or a portion of his compensation ("Deferral Fees"). Such Deferral Fees are deemed to be invested in select PowerShares Funds. The Deferral Fees payable to the Participating Trustee are valued as of the date such Deferral 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 distributions or with declines in the value of the Shares selected.
54
Notes to Financial Statements (Continued)
PowerShares Exchange-Traded Fund Trust
April 30, 2013
Note 9. Capital
Shares are created and redeemed by the Trust only in Creation Units of 50,000 Shares. Only Authorized Participants are permitted to purchase or redeem Creation Units from the Funds. Such transactions are generally permitted on an in-kind basis, with a balancing cash component to equate the transaction to the NAV per Share of a 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 eligible for trading by the Authorized Participant or as a result of other market circumstances.
Each Fund may issue Shares in advance of receipt of a basket of securities ("Deposit Securities") subject to various conditions, including a requirement to maintain on deposit with the Trust cash at least equal to 105% of the market value of the missing Deposit Securities. In accordance with each Fund's Participant Agreement, Creation Units will be issued to an Authorized Participant, notwithstanding the fact that the corresponding Deposit Securities 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 105%, which the Adviser may change from time to time, of the value of the missing Deposit Securities.
Transactions in a Fund's Shares are disclosed in detail on the Statements of Changes in Net Assets.
Note 10. 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. Each Independent Trustee is also indemnified against certain liabilities arising out of the performance of his duties to the Trust pursuant to an Indemnification Agreement between the Independent Trustee and 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.
55
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 PowerShares Buyback AchieversTM Portfolio, PowerShares Dividend AchieversTM Portfolio, PowerShares Financial Preferred Portfolio, PowerShares High Yield Equity Dividend AchieversTM Portfolio and PowerShares International Dividend AchieversTM Portfolio (each an individual portfolio of PowerShares Exchange-Traded Fund Trust, hereafter referred to as the "Funds") at April 30, 2013, the results of each of their operations for the year then ended, the change in each of their net assets for each of the two years in the period then ended and the financial highlights for each of the five years in the period then ended, 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 Funds' 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, 2013 by correspondence with the custodian and brokers, provide a reasonable basis for our opinion.
As discussed in note 2G of the Notes to the Financial Statements, the Funds changed their accounting policy to discontinue the use of equalization accounting for book purposes.
/s/ PricewaterhouseCoopers LLP
Chicago, IL
June 25, 2013
56
Tax Information
Form 1099-DIV, Form 1042-S and other year-end tax information provide shareholders with actual calendar year amounts that should be included in their tax returns. Shareholders should consult their tax advisors.
The following distribution information is being provided as required by the Internal Revenue Code or to meet a specific state's requirement.
Each Fund designates the following amounts or, if subsequently determined to be different the maximum amount allowable for its fiscal year ended April 30, 2013:
Federal Income Tax Information
Qualified Dividend Income* | Dividends-Received Deduction* | ||||||||||
Buyback AchieversTM Portfolio | 100 | % | 100 | % | |||||||
Dividend AchieversTM Portfolio | 100 | % | 100 | % | |||||||
Financial Preferred Portfolio(1) | 100 | % | 43 | % | |||||||
High Yield Equity Dividend AchieversTM Portfolio | 100 | % | 100 | % | |||||||
International Dividend AchieversTM Portfolio | 74 | % | 0 | % |
The Fund intends to elect to pass through to shareholders the credit for taxes paid to foreign countries. The gross foreign source income and foreign taxes paid are as follows:
Foreign Source Income | Foreign Taxes | ||||||||||
International Dividend AchieversTM Portfolio | $ | 13,549,658 | $ | 1,215,477 |
* The above percentages are based on ordinary income dividends paid to shareholders during the Fund's fiscal year.
(1) Tax year-end is October 31.
57
Supplemental Information
Trustees and Officers
The Independent Trustees, the Non-Independent 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 a Trustee are shown below.
The Trustees and officers information is current as of April 30, 2013.
Name, Address and Age of Independent Trustees | 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 Complex** Overseen by Independent Trustees | Other Directorships Held by Independent Trustees During the Past 5 Years | ||||||||||||||||||
Ronn R. Bagge (55) c/o Invesco PowerShares Capital Management LLC 301 West Roosevelt Road Wheaton, IL 60187 | Trustee | Since 2003 | Founder and Principal, YQA Capital Management LLC (1998-Present); formerly Owner/CEO of Electronic Dynamic Balancing Co., Inc. (high-speed rotating equipment service provider). | 113 | None | ||||||||||||||||||
Todd J. Barre (55) c/o Invesco PowerShares Capital Management LLC 301 West Roosevelt Road Wheaton, IL 60187 | Trustee | Since 2010 | Assistant Professor of Business, Trinity Christian College (2010-Present); formerly, Vice President and Senior Investment Strategist (2001-2008), Director of Open Architecture and Trading (2007-2008), Head of Fundamental Research (2004-2007) and Vice President and Senior Fixed Income Strategist (1994-2001), BMO Financial Group/Harris Private Bank. | 113 | None |
* This is the date the Independent Trustee began serving the Trust. Each Trustee serves an indefinite term, until his successor is elected.
** Fund Complex includes all open-end funds (including all of their portfolios) advised by the Adviser. At May 9, 2013, the Fund Complex consisted of the Trust's 55 portfolios and three other exchange-traded fund trusts with 58 portfolios advised by the Adviser.
58
Supplemental Information (Continued)
Trustees and Officers (Continued)
Name, Address and Age of Independent Trustees | 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 Complex** Overseen by Independent Trustees | Other Directorships Held by Independent Trustees During the Past 5 Years | ||||||||||||||||||
Marc M. Kole (52) c/o Invesco PowerShares Capital Management LLC 301 West Roosevelt Road Wheaton, IL 60187 | Trustee | Since 2006 | Formerly, Chief Financial Officer, Hope Network (social services) (2008-2012); Assistant Vice President and Controller, Priority Health (health insurance) (2005-2008); Senior Vice President of Finance, United Healthcare (2004-2005); Senior Vice President of Finance, Oxford Health Plans (2000-2004). | 113 | None | ||||||||||||||||||
Yung Bong Lim (48) c/o Invesco PowerShares Capital Management LLC 301 West Roosevelt Road Wheaton, IL 60187 | Trustee | Since 2013 | Managing Partner, Residential Dynamics Group LLC (2008-Present); formerly, Managing Director, Citadel Investment Group, L.L.C. (1999-2007). | 58 | None | ||||||||||||||||||
Philip M. Nussbaum (51) c/o Invesco PowerShares Capital Management LLC 301 West Roosevelt Road Wheaton, IL 60187 | Trustee | Since 2003 | Chairman, Performance Trust Capital Partners (2004-Present). | 113 | None |
* This is the date the Independent Trustee began serving the Trust. Each Trustee serves an indefinite term, until his successor is elected.
** Fund Complex includes all open-end funds (including all of their portfolios) advised by the Adviser. At May 9, 2013, the Fund Complex consisted of the Trust's 55 portfolios and three other exchange-traded fund trusts with 58 portfolios advised by the Adviser.
59
Supplemental Information (Continued)
Trustees and Officers (Continued)
Name, Address and Age of Independent Trustees | 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 Complex** Overseen by Independent Trustees | Other Directorships Held by Independent Trustees During the Past 5 Years | ||||||||||||||||||
Gary R. Wicker (51) c/o Invesco PowerShares Capital Management LLC 301 West Roosevelt Road Wheaton, IL 60187 | Trustee | Since 2013 | Senior Vice President of Global Finance and Chief Financial Officer at RBC Ministries (publishing company) (since 2013); formerly, Executive Vice President and Chief Financial Officer, Zondervan Publishing (A division of Harper Collins/NewsCorp) (2007-2012); Senior Vice President and Group Controller (2005-2006), Senior Vice President and Chief Financial Officer (2003-2004), Chief Financial Officer (2001-2003), Vice President, Finance and Controller (1999-2001) and Assistant Controller (1997-1999), divisions of The Thomson Corporation (information services provider). | 58 | None |
* This is the date the Independent Trustee began serving the Trust. Each Trustee serves an indefinite term, until his successor is elected.
** Fund Complex includes all open-end funds (including all of their portfolios) advised by the Adviser. At May 9, 2013, the Fund Complex consisted of the Trust's 55 portfolios and three other exchange-traded fund trusts with 58 portfolios advised by the Adviser.
60
Supplemental Information (Continued)
Trustees and Officers (Continued)
Name, Address and Age of Independent Trustees | 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 Complex** Overseen by Independent Trustees | Other Directorships Held by Independent Trustees During the Past 5 Years | ||||||||||||||||||
Donald H. Wilson (53) c/o Invesco PowerShares Capital Management LLC 301 West Roosevelt Road Wheaton, IL 60187 | Chairman of the Board and Trustee | Chair-man since 2012; Trustee since 2006 | Chairman and Chief Executive Officer, Stone Pillar Advisers, Ltd. (2010-Present); formerly, Chief Operating Officer, AMCORE Financial, Inc. (bank holding company) (2007-2009); Executive Vice President and Chief Financial Officer, AMCORE Financial, Inc. (2006-2007); Senior Vice President and Treasurer, Marshall & Ilsley Corp. (bank holding company) (1995-2006). | 113 | None |
* This is the date the Independent Trustee began serving the Trust. Each Trustee serves an indefinite term, until his successor is elected.
** Fund Complex includes all open-end funds (including all of their portfolios) advised by the Adviser. At May 9, 2013, the Fund Complex consisted of the Trust's 55 portfolios and three other exchange-traded fund trusts with 58 portfolios advised by the Adviser.
61
Supplemental Information (Continued)
Trustees and Officers (Continued)
The Non-Independent Trustee and the 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 Non-Independent Trustee and the other directorships, if any, held by the Non-Independent Trustee are shown below.
Name, Address, and Age of Non-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 Complex** Overseen by Non-Independent Trustee | Other Directorships Held by Non-Independent Trustee During the Past 5 Years | ||||||||||||||||||
Kevin M. Carome (57) Invesco Ltd. Two Peachtree Pointe 1555 Peachtree St., N.E., Suite 1800 Atlanta, GA 30309 | Trustee | Since 2010 | Senior Managing Director, Secretary and General Counsel, Invesco Ltd. (2006-Present); Director, Invesco Advisers, Inc. (2009-Present); formerly, Senior Vice President, Secretary and General Counsel, Invesco Advisers, Inc. (2003-2005); Senior Vice President and General Counsel, Liberty Financial Companies, Inc. (2000-2001); General Counsel of certain investment management subsidiaries of Liberty Financial Companies, Inc. (1998-2000); Associate General Counsel, Liberty Financial Companies, Inc. (1993-1998); Associate, Ropes & Gray LLP. | 113 | None |
* This is the date the Non-Independent Trustee began serving the Trust. Each Trustee serves an indefinite term, until his successor is elected.
** Fund Complex includes all open-end funds (including all of their portfolios) advised by the Adviser. At May 9, 2013, the Fund Complex consisted of the Trust's 55 portfolios and three other exchange-traded fund trusts with 58 portfolios advised by the Adviser.
62
Supplemental Information (Continued)
Trustees and Officers (Continued)
Name, Address and Age of Executive Officer | Position(s) Held with Trust | Length of Time Served* | Principal Occupation(s) During Past 5 Years | ||||||||||||
Andrew Schlossberg (39) Invesco Management Group, Inc. 11 Greenway Plaza Suite 1000 Houston, TX 77046 | President | Since 2009 | Managing Director, U.S. head of business strategy and chief marketing officer for Invesco Ltd. in the United States (2008-Present); Director, Invesco Distributors, Inc. (2012-Present); and Senior Vice President, Invesco Advisers, Inc. (formerly known as Invesco Institutional (N.A.), Inc.) (registered investment adviser) (2009-Present); formerly, Mr. Schlossberg served in multiple roles within Invesco, including head of corporate development, as well as global leadership roles in strategy and product development in the company's North American Institutional and Retirement divisions (2002-2007). | ||||||||||||
Peter Hubbard (32) Invesco PowerShares Capital Management LLC 301 West Roosevelt Road Wheaton, IL 60187 | Vice President | Since 2009 | Vice President and Director of Portfolio Management – Invesco PowerShares Capital Management LLC (2008-Present); formerly, Portfolio Manager, Invesco PowerShares Capital Management LLC (2007-2008); Research Analyst, Invesco PowerShares Capital Management LLC (2005-2007); Research Analyst and Trader, Ritchie Capital, a hedge fund operator (2003-2005). | ||||||||||||
David Warren (55) Invesco Canada Ltd. 5140 Yonge Street Suite 900, Toronto, Ontario M2N 6X7 | Vice President | Since 2009 | Director, Executive Vice President and Chief Financial Officer, Invesco Canada Ltd. (formerly, Invesco Trimark Ltd.) and Chief Administrative Officer, North American Retail, Invesco Ltd. (2007-Present); Senior Vice President, Invesco Management Group, Inc. (2007-Present); Director, Executive Vice President and Chief Financial Officer, Invesco, Inc.; Director, Invesco Canada Holdings Inc.; formerly, Director, Executive Vice President and Chief Financial Officer, Invesco Canada Ltd. (formerly, Invesco Trimark Ltd.) (2000-2006). |
* This is the period for which the Officers began serving the Trust. Each Officer serves an indefinite term, until his or her successor is elected.
63
Supplemental Information (Continued)
Trustees and Officers (Continued)
Name, Address and Age of Executive Officer | Position(s) Held with Trust | Length of Time Served* | Principal Occupation(s) During Past 5 Years | ||||||||||||
Sheri Morris (49) Invesco Management Group, Inc. 11 Greenway Plaza Suite 1000 Houston, TX 77046-1173 | Vice President | Since 2012 | Vice President, Treasurer and Principal Financial Officer, The Invesco Funds; Vice President, Invesco Advisers, Inc. (formerly known as Invesco Institutional (N.A.), Inc.) (registered investment adviser) (2009-Present) and Vice President, PowerShares Exchange-Traded Fund Trust, PowerShares Exchange-Traded Fund Trust II, PowerShares India Exchange-Traded Fund Trust and PowerShares Actively Managed Exchange-Traded Fund Trust; formerly, Treasurer, PowerShares Exchange-Traded Fund Trust, PowerShares Exchange-Traded Fund Trust II, PowerShares India Exchange-Traded Fund Trust and PowerShares Actively Managed Exchange-Traded Fund Trust (2012-2013); formerly, Vice President, Invesco Advisers, Inc., Invesco Aim Capital Management, Inc. and Invesco Aim Private Asset Management, Inc.; Assistant Vice President and Assistant Treasurer, The Invesco Funds and Assistant Vice President, Invesco Advisers, Inc., Invesco Aim Capital Management, Inc. and Invesco Aim Private Asset Management, Inc. | ||||||||||||
Steven M. Hill (48) Invesco PowerShares Capital Management LLC 301 West Roosevelt Road Wheaton, IL 60187 | Vice President and Treasurer | Since 2012 Since 2013 | Vice President and Treasurer, PowerShares Exchange-Traded Fund Trust, PowerShares Exchange-Traded Fund Trust II, PowerShares India Exchange-Traded Fund Trust and PowerShares Actively Managed Exchange-Traded Fund Trust (since 2013); Head of Global ETF Administration, Invesco PowerShares Capital Management LLC; formerly, Treasurer, PowerShares Exchange-Traded Fund Trust, PowerShares Exchange-Traded Fund Trust II, PowerShares India Exchange-Traded Fund Trust and PowerShares Actively Managed Exchange-Traded Fund Trust (2011-2012); Senior Managing Director and Chief Financial Officer, Destra Capital Management LLC and its subsidiaries (2010-2011); Chief Financial Officer, Destra Investment Trust and Destra Investment Trust II (2010-2011); Senior Managing Director, Claymore Securities, Inc. (2003-2010); and Chief Financial Officer, Claymore sponsored mutual funds (2003-2010). |
* This is the period for which the Officers began serving the Trust. Each Officer serves an indefinite term, until his or her successor is elected.
64
Supplemental Information (Continued)
Trustees and Officers (Continued)
Name, Address and Age of Executive Officer | Position(s) Held with Trust | Length of Time Served* | Principal Occupation(s) During Past 5 Years | ||||||||||||
Christopher Joe (44) Invesco Management Group, Inc. 11 Greenway Plaza Suite 1000 Houston, TX 77046-1173 | Chief Compliance Officer | Since 2012 | U.S. Compliance Director, Invesco, Ltd.; Chief Compliance Officer, Invesco Investment Advisers, LLC (registered investment adviser); formerly, Assistant Fund Accounting Manager, Invesco, Ltd. | ||||||||||||
Anna Paglia (39) Invesco PowerShares Capital Management LLC 301 West Roosevelt Road Wheaton, IL 60187 | Secretary | Since 2011 | Secretary, PowerShares Exchange-Traded Fund Trust, PowerShares Exchange-Traded Fund Trust II, PowerShares India Exchange-Traded Fund Trust, and PowerShares Actively Managed Exchange-Traded Fund Trust; Head of Legal, Invesco PowerShares Capital Management LLC (2010-Present); formerly, Partner, K&L Gates LLP (formerly, Bell Boyd & Lloyd LLP) (2007-2010); Associate Counsel at Barclays Global Investors Ltd. (2004-2006). |
Availability of Additional Information About the Trustees
The Statement of Additional Information includes additional information about the Trustees and is available, without charge, upon request at (800) 983-0903.
* This is the period for which the Officers began serving the Trust. Each Officer serves an indefinite term, until his or her successor is elected.
65
Board Considerations Regarding Approval of Continuation of Investment Advisory Agreement
At a meeting held on April 18, 2013, the Board of Trustees of the PowerShares Exchange-Traded Fund Trust (the "Trust"), including the Independent Trustees, approved the continuation of the Investment Advisory Agreement between Invesco PowerShares Capital Management LLC (the "Adviser") and the Trust for the following 53 series (each, a "Fund" and together, the "Funds"):
PowerShares Aerospace & Defense Portfolio
PowerShares Buyback AchieversTM Portfolio
PowerShares CleantechTM Portfolio
PowerShares Dividend AchieversTM Portfolio
PowerShares DWA Technical LeadersTM Portfolio
PowerShares Dynamic Basic Materials Sector Portfolio
PowerShares Dynamic Biotechnology & Genome Portfolio
PowerShares Dynamic Building & Construction Portfolio
PowerShares Dynamic Consumer Discretionary Sector Portfolio
PowerShares Dynamic Consumer Staples Sector Portfolio
PowerShares Dynamic Energy Exploration & Production Portfolio
PowerShares Dynamic Energy Sector Portfolio
PowerShares Dynamic Financial Sector Portfolio
PowerShares Dynamic Food & Beverage Portfolio
PowerShares Dynamic Healthcare Sector Portfolio
PowerShares Dynamic Industrials Sector Portfolio
PowerShares Dynamic Large Cap Growth Portfolio
PowerShares Dynamic Large Cap Value Portfolio
PowerShares Dynamic Leisure and Entertainment Portfolio
PowerShares Dynamic MagniQuant Portfolio
PowerShares Dynamic Market Portfolio
PowerShares Dynamic Media Portfolio
PowerShares Dynamic Networking Portfolio
PowerShares Dynamic Oil & Gas Services Portfolio
PowerShares Dynamic OTC Portfolio
PowerShares Dynamic Pharmaceuticals Portfolio
PowerShares Dynamic Retail Portfolio
PowerShares Dynamic Semiconductors Portfolio
PowerShares Dynamic Software Portfolio
PowerShares Dynamic Technology Sector Portfolio
PowerShares Dynamic Utilities Portfolio
PowerShares Financial Preferred Portfolio
PowerShares FTSE RAFI US 1000 Portfolio
PowerShares FTSE RAFI US 1500 Small-Mid Portfolio
PowerShares Fundamental Pure Large Core Portfolio
PowerShares Fundamental Pure Large Growth Portfolio
PowerShares Fundamental Pure Large Value Portfolio
PowerShares Fundamental Pure Mid Core Portfolio
PowerShares Fundamental Pure Mid Growth Portfolio
PowerShares Fundamental Pure Mid Value Portfolio
PowerShares Fundamental Pure Small Core Portfolio
PowerShares Fundamental Pure Small Growth Portfolio
PowerShares Fundamental Pure Small Value Portfolio
PowerShares Global Listed Private Equity Portfolio
PowerShares Golden Dragon China Portfolio
PowerShares High Yield Equity Dividend AchieversTM Portfolio
PowerShares International Dividend AchieversTM Portfolio
PowerShares Lux Nanotech Portfolio
PowerShares S&P 500® High Quality Portfolio
PowerShares Water Resources Portfolio
PowerShares WilderHill Clean Energy Portfolio
PowerShares WilderHill Progressive Energy Portfolio
PowerShares Zacks Micro Cap Portfolio
66
Board Considerations Regarding Approval of Continuation of Investment Advisory Agreement (Continued)
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 a 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 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. 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 and projected staffing, 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 execution of portfolio transactions on behalf of the Funds. The Trustees also reviewed information on the performance of the Funds and the performance of their underlying indexes for the one-year, three-year, five-year and since-inception periods ended December 31, 2012, as applicable, including reports for each of the last three calendar years on the correlation and tracking error between each Fund's performance and the performance of its underlying index, as well as the Adviser's analysis of the tracking error between each Fund and its underlying index. In reviewing the tracking error report, the Trustees considered information provided by Ibbotson Associates, a consultant to the Independent Trustees, with respect to general expected tracking error ranges and various explanations for tracking error. The Trustees noted that for each applicable period, the correlation and tracking error for each Fund was within the targeted range set forth in the Trust's registration statement. The Trustees concluded that each Fund was correlated to its underlying index and that the tracking error for each Fund was within an acceptable range given 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 concluded that the nature, extent and quality of services provided by the Adviser to the Funds under the Investment Advisory Agreement were appropriate and reasonable.
Fees, Expenses and Profitability. The Trustees reviewed and discussed the information provided by the Adviser on each Fund's advisory fee and net expense ratio, as compared to information compiled by the Adviser from Lipper Inc. databases on the advisory fees and net expense ratios of comparable exchange-traded funds ("ETFs"), open-end (non-ETF) index funds and open-end actively-managed funds. The Trustees noted that the annual advisory fee charged to each Fund is:
• 0.50% of the Fund's average daily net assets for each Fund other than PowerShares Dividend AchieversTM Portfolio, PowerShares High Yield Equity Dividend AchieversTM Portfolio, PowerShares International Dividend AchieversTM Portfolio, PowerShares FTSE RAFI US 1000 Portfolio, PowerShares FTSE RAFI US 1500 Small-Mid Portfolio, PowerShares Fundamental Pure Large Core Portfolio, PowerShares Fundamental Pure Large Growth Portfolio, PowerShares Fundamental Pure
67
Board Considerations Regarding Approval of Continuation of Investment Advisory Agreement (Continued)
Large Value Portfolio, PowerShares Fundamental Pure Mid Core Portfolio, PowerShares Fundamental Pure Mid Growth Portfolio, PowerShares Fundamental Pure Mid Value Portfolio, PowerShares Fundamental Pure Small Core Portfolio, PowerShares Fundamental Pure Small Growth Portfolio, PowerShares Fundamental Pure Small Value Portfolio and PowerShares S&P 500® High Quality Portfolio;
• 0.40% of the Fund's average daily net assets for each of PowerShares Dividend AchieversTM Portfolio, PowerShares High Yield Equity Dividend AchieversTM Portfolio and PowerShares International Dividend AchieversTM Portfolio; and
• 0.29% of the Fund's average daily net assets for each of PowerShares FTSE RAFI US 1000 Portfolio, PowerShares FTSE RAFI US 1500 Small-Mid Portfolio, PowerShares Fundamental Pure Large Core Portfolio, PowerShares Fundamental Pure Large Growth Portfolio, PowerShares Fundamental Pure Large Value Portfolio, PowerShares Fundamental Pure Mid Core Portfolio, PowerShares Fundamental Pure Mid Growth Portfolio, PowerShares Fundamental Pure Mid Value Portfolio, PowerShares Fundamental Pure Small Core Portfolio, PowerShares Fundamental Pure Small Growth Portfolio, PowerShares Fundamental Pure Small Value Portfolio and PowerShares S&P 500® High Quality Portfolio (for PowerShares S&P 500® High Quality Portfolio, the Trustees noted that the advisory fee was reduced to 0.29% effective December 18, 2012). In approving the advisory fee reduction for the Funds at the December 18, 2012 meeting, the Trustees considered the Adviser's representation that there would be no diminution in the quantity or quality of services provided in connection with the amendment to the Investment Advisory Agreement.
The Trustees also noted that the Adviser has agreed to waive a portion of its advisory fee and/or pay expenses (an "Expense Cap") to the extent necessary to prevent the annual operating expenses of each Fund from exceeding the percentage of that Fund's average daily net assets, at least until August 31, 2014, as set forth below:
• 0.60%, excluding interest expenses, brokerage commissions and other trading expenses, taxes, acquired fund fees and expenses and extraordinary expenses, for each of PowerShares Dynamic OTC Portfolio and PowerShares Dynamic Market Portfolio;
• 0.50%, excluding interest expenses, licensing fees, offering costs, brokerage commissions and other trading expenses, taxes, acquired fund fees and expenses and extraordinary expenses, for each of PowerShares Dividend AchieversTM Portfolio, PowerShares High Yield Equity Dividend AchieversTM Portfolio and PowerShares International Dividend AchieversTM Portfolio;
• 0.39%, excluding interest expenses, offering costs, brokerage commissions and other trading expenses, taxes, acquired fund fees and expenses and extraordinary expenses, for each of PowerShares FTSE RAFI US 1000 Portfolio, PowerShares FTSE RAFI US 1500 Small-Mid Portfolio, PowerShares Fundamental Pure Large Core Portfolio, PowerShares Fundamental Pure Large Growth Portfolio, PowerShares Fundamental Pure Large Value Portfolio, PowerShares Fundamental Pure Mid Core Portfolio, PowerShares Fundamental Pure Mid Growth Portfolio, PowerShares Fundamental Pure Mid Value Portfolio, PowerShares Fundamental Pure Small Core Portfolio, PowerShares Fundamental Pure Small Growth Portfolio and PowerShares Fundamental Pure Small Value Portfolio;
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Board Considerations Regarding Approval of Continuation of Investment Advisory Agreement (Continued)
• 0.29%, excluding interest expenses, offering costs, brokerage commissions and other trading expenses, taxes, acquired fund fees and expenses and extraordinary expenses, for PowerShares S&P 500® High Quality Portfolio (the Trustees noted that the Expense Cap for the Fund was reduced to 0.29% effective November 21, 2012); and
• 0.60%, excluding interest expenses, licensing fees, offering costs, brokerage commissions and other trading expenses, taxes, acquired fund fees and expenses and extraordinary expenses, for each other Fund.
The Trustees noted that the Adviser represented that it does not serve as the investment adviser to any clients, other than ETFs overseen by the Trustees, with comparable investment strategies as the Funds, but that the Adviser provides sub-advisory services to clients with comparable investment strategies as certain of the Funds. The Trustees further noted the Adviser's explanation with respect to the sub-advisory fees it receives for such services in comparison to the advisory fees charged to the Funds. The Trustees noted that each Fund's advisory fee was:
• higher than the median advisory fee of its ETF peer funds (except for the advisory fee of each of PowerShares Golden Dragon China Portfolio, PowerShares International Dividend AchieversTM Portfolio and PowerShares Fundamental Pure Small Value Portfolio, which was equal to or lower than the median advisory fee of its ETF peer funds); and
• higher than the median advisory fee of its open-end index peer funds (except for the advisory fee of each of PowerShares Dynamic Energy Exploration & Production Portfolio, PowerShares Dynamic Energy Sector Portfolio, PowerShares Dynamic Oil & Gas Services Portfolio, PowerShares Fundamental Pure Large Core Portfolio, PowerShares Fundamental Pure Large Growth Portfolio, PowerShares Fundamental Pure Mid Growth Portfolio, PowerShares Fundamental Pure Mid Value Portfolio, PowerShares Fundamental Pure Small Value Portfolio, PowerShares Water Resources Portfolio, PowerShares WilderHill Clean Energy Portfolio and PowerShares WilderHill Progressive Energy Portfolio, which was lower than the median advisory fee of its open-end index peer funds; and there was no comparable data for PowerShares Aerospace & Defense Portfolio, PowerShares CleantechTM Portfolio, PowerShares Dividend AchieversTM Portfolio, PowerShares Dynamic Basic Materials Sector Portfolio, PowerShares Dynamic Biotechnology & Genome Portfolio, PowerShares Dynamic Building & Construction Portfolio, PowerShares Dynamic Consumer Discretionary Sector Portfolio, PowerShares Dynamic Consumer Staples Sector Portfolio, PowerShares Dynamic Financial Sector Portfolio, PowerShares Dynamic Food & Beverage Portfolio, PowerShares Dynamic Healthcare Sector Portfolio, PowerShares Dynamic Industrials Sector Portfolio, PowerShares Dynamic Leisure and Entertainment Portfolio, PowerShares Dynamic Media Portfolio, PowerShares Dynamic Pharmaceuticals Portfolio, PowerShares Dynamic Retail Portfolio, PowerShares Financial Preferred Portfolio, PowerShares Global Listed Private Equity Portfolio, PowerShares Golden Dragon China Portfolio, PowerShares High Yield Equity Dividend AchieversTM Portfolio or PowerShares International Dividend AchieversTM Portfolio); but
• lower than the median advisory fee of its open-end actively-managed peer funds.
The Trustees determined that the advisory fees were reasonable, noting the complexity of the indexes, the distinguishing factors of the Funds, and the higher administrative, operational and management oversight
69
Board Considerations Regarding Approval of Continuation of Investment Advisory Agreement (Continued)
costs for the Adviser. With respect to the Funds' net expense ratios, the Trustees noted that the net expense ratio for each Fund was:
• higher than the median net expense ratio of its ETF peer funds (except for the net expense ratio of each of PowerShares Dynamic OTC Portfolio, PowerShares FTSE RAFI US 1000 Portfolio, PowerShares FTSE RAFI US 1500 Small-Mid Portfolio, PowerShares Fundamental Pure Mid Core Portfolio, PowerShares Fundamental Pure Mid Growth Portfolio, PowerShares Fundamental Pure Small Core Portfolio and PowerShares S&P 500® High Quality Portfolio, which was equal to or less than the median net expense ratio of its ETF peer funds); and
• higher than the median net expense ratio of its open-end index peer funds (except for the net expense ratio of each of PowerShares Dividend AchieversTM Portfolio, PowerShares DWA Technical LeadersTM Portfolio, PowerShares Dynamic Energy Exploration & Production Portfolio, PowerShares Energy Sector Portfolio, PowerShares Dynamic Large Cap Growth Portfolio, PowerShares Dynamic Large Cap Value Portfolio, PowerShares Dynamic Networking Portfolio, PowerShares Oil & Gas Services Portfolio, PowerShares Dynamic OTC Portfolio, PowerShares Dynamic Semiconductors Portfolio, PowerShares Dynamic Software Portfolio, PowerShares Dynamic Technology Sector Portfolio, PowerShares Dynamic Utilities Sector Portfolio, PowerShares FTSE RAFI US 1500 Small-Mid Portfolio, PowerShares Fundamental Pure Large Core Portfolio, PowerShares Fundamental Pure Large Growth Portfolio, PowerShares Fundamental Pure Large Value Portfolio, PowerShares Fundamental Pure Mid Core Portfolio, PowerShares Fundamental Pure Mid Growth Portfolio, PowerShares Fundamental Pure Mid Value Portfolio, PowerShares Fundamental Pure Small Core Portfolio, PowerShares Fundamental Pure Small Growth Portfolio, PowerShares Fundamental Pure Small Value Portfolio, PowerShares High Yield Equity Dividend AchieversTM Portfolio, PowerShares Lux Nanotech Portfolio, PowerShares S&P 500® High Quality Portfolio, PowerShares Water Resources Portfolio, PowerShares WilderHill Clean Energy Portfolio and PowerShares WilderHill Progressive Energy Portfolio, which was lower than the median net expense ratio of its open-end index peer funds; and there was no comparable data for PowerShares Aerospace & Defense Portfolio, PowerShares CleantechTM Portfolio, PowerShares Dynamic Basic Materials Sector Portfolio, PowerShares Dynamic Biotechnology & Genome Portfolio, PowerShares Dynamic Building & Construction Portfolio, PowerShares Dynamic Consumer Discretionary Sector Portfolio, PowerShares Dynamic Consumer Staples Sector Portfolio, PowerShares Dynamic Financial Sector Portfolio, PowerShares Dynamic Food & Beverage Portfolio, PowerShares Dynamic Healthcare Sector Portfolio, PowerShares Dynamic Industrials Sector Portfolio, PowerShares Dynamic Leisure and Entertainment Portfolio, PowerShares Dynamic Media Portfolio, PowerShares Dynamic Pharmaceuticals Portfolio, PowerShares Dynamic Retail Portfolio, PowerShares Financial Preferred Portfolio, PowerShares Global Listed Private Equity Portfolio, PowerShares Golden Dragon China Portfolio or PowerShares International Dividend AchieversTM Portfolio); but
• lower than the median net expense ratio of its 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, and noted those Funds for which license fees are included in the Funds' Expense Caps.
The Board concluded that the advisory fee and expense ratio of each Fund (giving effect to the Fund's Expense Cap) were reasonable and appropriate in light of the services provided.
70
Board Considerations Regarding Approval of Continuation of Investment Advisory Agreement (Continued)
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 or losses realized by the Adviser from its relationship to each Fund. The Trustees concluded that the estimated profitability to the Adviser of the advisory services provided to any of the Funds was 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 and expense limitation agreed to by the Adviser. The Trustees noted that, for Funds whose expenses are higher than their respective Expense Caps, any reduction in that Fund's expenses would be enjoyed by the Adviser, but that Fund shareholders benefit from the lower expense ratio as a result of the Fund's Expense Cap. The Trustees also noted that the Excess Expense Agreement with the Trust provides that the Adviser is entitled to be reimbursed by each Fund, other than PowerShares Dynamic Market Portfolio and PowerShares Dynamic OTC Portfolio, 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 considered whether the advisory fee rate for each Fund was reasonable in relation to the asset size of that Fund, and concluded that the flat advisory fee was reasonable and appropriate, noting the Fund expenses the Adviser has borne as a result of the 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. No single factor was determinative in the Board's analysis.
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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) 983-0903. 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) 983-0903; or (ii) accessing the Trust's 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 Trust's Forms N-Q are available on the Commission's website at www.sec.gov. The Trust's Forms N-Q may also be reviewed and copied at the Commission's Public Reference Room in Washington, D.C.; information on the operation of the Public Reference Room may be obtained by calling (800) SEC-0330.
FREQUENCY DISTRIBUTION OF DISCOUNTS AND PREMIUMS
A table showing the number of days the market price of each Fund's shares was greater than the Fund's net asset value, and the number of days it was less than the Fund's net asset value (i.e., premium or discount) for the most recently completed calendar year, and the calendar quarters since that year end (or the life of the Fund, if shorter) may be found at the Fund's website at www.invescopowershares.com.
301 West Roosevelt Road
Wheaton, IL 60187
800.983.0903
www.invescopowershares.com
© 2013 Invesco PowerShares Capital Management LLC P-PS-AR-1
2013 Annual Report to Shareholders
April 30, 2013
PowerShares Aerospace & Defense Portfolio (PPA)
PowerShares CleantechTM Portfolio (PZD)
PowerShares DWA Technical LeadersTM Portfolio (PDP)
PowerShares Global Listed Private Equity Portfolio (PSP)
PowerShares Golden Dragon China Portfolio (PGJ)
PowerShares Lux Nanotech Portfolio (PXN)
PowerShares S&P 500 BuyWrite Portfolio (PBP)
PowerShares S&P 500® High Quality Portfolio (SPHQ)
PowerShares Water Resources Portfolio (PHO)
PowerShares WilderHill Clean Energy Portfolio (PBW)
PowerShares WilderHill Progressive Energy Portfolio (PUW)
Table of Contents
The Market Environment | 2 | ||||||
Manager's Analysis | 4 | ||||||
Fees and Expenses | 47 | ||||||
Specialty Portfolios | |||||||
Schedules of Investments | |||||||
PowerShares Aerospace & Defense Portfolio (PPA) | 49 | ||||||
PowerShares CleantechTM Portfolio (PZD) | 50 | ||||||
PowerShares DWA Technical LeadersTM Portfolio (PDP) | 52 | ||||||
PowerShares Global Listed Private Equity Portfolio (PSP) | 54 | ||||||
PowerShares Golden Dragon China Portfolio (PGJ) | 55 | ||||||
PowerShares Lux Nanotech Portfolio (PXN) | 57 | ||||||
PowerShares S&P 500 BuyWrite Portfolio (PBP) | 58 | ||||||
PowerShares S&P 500® High Quality Portfolio (SPHQ) | 64 | ||||||
PowerShares Water Resources Portfolio (PHO) | 66 | ||||||
PowerShares WilderHill Clean Energy Portfolio (PBW) | 67 | ||||||
PowerShares WilderHill Progressive Energy Portfolio (PUW) | 69 | ||||||
Statements of Assets and Liabilities | 72 | ||||||
Statements of Operations | 74 | ||||||
Statements of Changes in Net Assets | 76 | ||||||
Financial Highlights | 80 | ||||||
Notes to Financial Statements | 86 | ||||||
Report of Independent Registered Public Accounting Firm | 105 | ||||||
Tax Information | 106 | ||||||
Trustees and Officers | 107 | ||||||
Board Considerations Regarding Approval of Continuation of Investment Advisory Agreement | 116 |
The Market Environment
Domestic Equity:
The fiscal year ended April 30, 2013, began amid negative investor sentiment; the ongoing eurozone sovereign debt crisis intensified and equity markets declined. Throughout the summer, news from Europe and China was poor; this precipitated a slowdown in the U.S., where market performance and economic data were mixed. Employment data, for instance, showed some improvement – but not enough. Companies generally met earnings expectations but missed revenue guidance.
In early fall, as the European Central Bank implemented new measures to support member economies and the U.S. Federal Reserve initiated a third round of quantitative easing, consumer sentiment began to improve. Businesses, on the other hand, grew more hesitant to spend in the second half of the fiscal year. This was due in large part to uncertainty surrounding U.S. election results, "fiscal cliff" negotiations and sequestration spending cuts in early 2013. However, for the first time in years, U.S. markets appeared willing to look past national headline events. U.S. equity markets were generally strong in the final five months of the reporting period, with major market indexes setting multi-year or even all-time highs.
International Equity:
The fiscal year began with improving economic data in the U.S. However, the ongoing eurozone sovereign debt crisis intensified in May 2012, dominating headlines and creating significant volatility in global equity markets. This negative news from overseas precipitated a slowdown in the U.S., where economic data began to decelerate over the summer. While corporate earnings remained solid until late in the year, financial markets were negatively influenced by economic data.
Fears about the fate of the eurozone began to subside after the European Central Bank announced new measures to support member economies through potentially unlimited purchases of sovereign debt, among other measures. At the same time, continued risk aversion among investors and corporations, along with tepid employment growth, prompted the U.S. Federal Reserve to initiate a third round of quantitative easing and to promise to remain accommodative until the labor market outlook improved materially. Asian governments continued to try to balance key aims of supporting growth while preventing asset bubbles. China announced a surprise interest rate cut in July and the Bank of Japan announced an expansion and extension of its asset purchase plan in September, following the U.S. and European central banks' monetary easing announcements.
Toward the end of 2012 there was uncertainty surrounding the U.S. presidential election and the "fiscal cliff." Policymakers managed a fiscal cliff compromise on the first day of 2013. Although decisions about government spending and whether to raise the debt ceiling or balance the budget were delayed until a later date, equity markets responded favorably to the compromise.
Despite volatility for much of the fiscal year ended April 30, 2013, major equity market indexes delivered double-digit gains, and 9 of the 10 sectors of the MSCI World Index had positive returns.(1)
(1) Source: Bloomberg
2
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Manager's Analysis
PowerShares Aerospace & Defense Portfolio (ticker: PPA)
As an index fund, the PowerShares Aerospace & Defense Portfolio (the "Fund") is passively managed and attempts to track the returns of an underlying index. The Fund seeks investment results that generally correspond (before fees and expenses) to the price and yield of the SPADETM Defense Index (the "Index"). The Fund generally will invest at least 90% of its total assets in common stocks of aerospace and defense companies that comprise the Index.
To have its securities eligible for inclusion in the Index, a company must be involved in the research, development, manufacture, operation and support of U.S. defense, military, homeland security and space operations. In addition, during the 25 days prior to the date that its securities are included in the Index, a company must have maintained a minimum $100 million market cap, a $5 daily sale price and an average daily trading volume of 50,000 shares. A company must also have a quarterly sales/revenue/turnover of at least $10 million for the two announced quarters prior to the inclusion date, and also must be listed on the NYSE, NYSE MKT or NASDAQ. Companies that qualify and are selected for inclusion in the Index are weighted according to a modified market capitalization methodology.
For the fiscal year ended April 30, 2013, on a market price basis, the Fund returned 18.65%. On a net asset value ("NAV") basis, the Fund returned 18.69%. During the same time period, the Index returned 19.48%. During the fiscal year, the Fund fully replicated the components of the Index; therefore, the Fund's performance differed from the return of the Index primarily due to fees and operating expenses that the Fund incurred during the period.
During this same time period, the S&P Composite Aerospace & Defense Index returned 17.81%, the Dow Jones U.S. Aerospace and Defense Index returned 15.99%, and the S&P 500® Index returned 16.89%. The S&P Composite Aerospace & Defense Index, Dow Jones U.S. Aerospace and Defense Index and S&P 500® Index (the "Benchmark Indices") are unmanaged indices weighted by market capitalization based on the average performance of approximately 28, 50 and 500 securities, respectively. The adviser provided these additional comparative benchmarks to help investors better understand how the investment results of the Fund compare to the performance of other indices similar to the Index, as well as to that of broad-based market benchmarks.
The adviser selected the S&P Composite Aerospace & Defense Index and the Dow Jones U.S. Aerospace and Defense Index as comparative indices to the Fund because of their recognition in the marketplace and their shared exposure to the aerospace and defense sector. These reasons make their performance relevant when comparing to the Fund's performance. The S&P 500® Index does not have the same specific sector relevance as the S&P Composite Aerospace & Defense Index and the Dow Jones U.S. Aerospace and Defense Index; however, it was also selected for its recognition in the marketplace, and its performance comparison is a useful measure for investors as a broad representation of the overall U.S. stock market.
In the case of the S&P Composite Aerospace & Defense Index and the Dow Jones U.S. Aerospace and Defense Index, the performance of the Fund differed from these comparative indexes in part because the Index, and as such the Fund, limits its constituents to companies that are involved in U.S. defense, military, homeland security and space operations, whereas these comparative indexes include companies that are involved in the commercial aerospace industry as well. More specifically, relative to the S&P Composite Aerospace & Defense Index, the Fund outperformed in part due to an allocation to the Data Processing & Outsourced Services sub-industry, as well as due to Aerospace and Defense sub-industry. Relative to the Dow Jones U.S. Aerospace and Defense Index, the Fund outperformed due in part to the performance of specific stocks included in the Industrials and Information Technology sector.
4
Manager's Analysis (Continued)
PowerShares Aerospace & Defense Portfolio (ticker: PPA)
Relative to the S&P 500® Index, the Fund outperformed due in part to the performance of specific stocks included in the Information Technology sector as well as a combination of its allocation to and the performance of specific stocks included in the Industrials sector.
For the fiscal year ended April 30, 2013, the Aerospace and Defense industry contributed most significantly to the Fund's return, followed by the Computers and Electronics industries, respectively. The Software industry detracted most from the Fund's return.
Positions that contributed most significantly to the Fund's return included Computer Sciences Corp., a computers company (portfolio average weight of 3.23%); and Honeywell International, Inc., an electronics company (portfolio average weight of 6.30%). Positions that detracted most significantly from the Fund's return included Mercury Systems, Inc., a computers company (portfolio average weight of 0.18%); and ManTech International Corp., Class A, a software company (portfolio average weight of 0.53%).
Industry Breakdown (% of the Fund's
Net Assets) as of April 30, 2013
Aerospace/Defense | 57.6 | ||||||
Electronics | 9.1 | ||||||
Metal Fabricate/Hardware | 5.6 | ||||||
Telecommunications | 5.3 | ||||||
Miscellaneous Manufacturing | 4.9 | ||||||
Computers | 4.8 | ||||||
Commercial Services | 3.8 | ||||||
Packaging & Containers | 3.4 | ||||||
Engineering & Construction | 1.9 | ||||||
Auto Manufacturers | 1.8 | ||||||
Shipbuilding | 1.3 | ||||||
Software | 0.5 | ||||||
Money Market Fund | 0.2 | ||||||
Liabilities in excess of other assets | (0.2 | ) |
Top Ten Fund Holdings (% of the Fund's
Net Assets) as of April 30, 2013
Security | |||||||
Boeing Co. (The) | 6.9 | ||||||
Lockheed Martin Corp. | 6.4 | ||||||
Honeywell International, Inc. | 6.2 | ||||||
United Technologies Corp. | 6.2 | ||||||
Precision Castparts Corp. | 5.6 | ||||||
General Dynamics Corp. | 5.2 | ||||||
Northrop Grumman Corp. | 4.9 | ||||||
Raytheon Co. | 4.8 | ||||||
Rockwell Collins, Inc. | 4.0 | ||||||
TransDigm Group, Inc. | 3.8 | ||||||
Total | 54.0 |
5
Manager's Analysis (Continued)
PowerShares Aerospace & Defense Portfolio (ticker: PPA)
Growth of a $10,000 Investment Since Inception†
Fund Performance History (%) As of April 30, 2013
3 Years | 3 Years | 5 Years | 5 Years | Fund Inception† | |||||||||||||||||||||||||||
1 Year | Avg. Ann.†† | Cumulative | Avg. Ann.†† | Cumulative | Avg. Ann.†† | Cumulative | |||||||||||||||||||||||||
Index | |||||||||||||||||||||||||||||||
SPADETM Defense Index | 19.48 | % | 8.99 | % | 29.47 | % | 4.09 | % | 22.21 | % | 7.78 | % | 75.50 | % | |||||||||||||||||
S&P Composite Aerospace & Defense Index | 17.81 | % | 10.14 | % | 33.62 | % | 4.81 | % | 26.46 | % | 9.66 | % | 99.70 | % | |||||||||||||||||
Dow Jones U.S. Aerospace and Defense Index | 15.99 | % | 10.70 | % | 35.66 | % | 5.34 | % | 29.71 | % | — | — | |||||||||||||||||||
S&P 500® Index | 16.89 | % | 12.80 | % | 43.54 | % | 5.21 | % | 28.92 | % | 6.04 | % | 55.26 | % | |||||||||||||||||
Fund | |||||||||||||||||||||||||||||||
NAV Return | 18.69 | % | 8.27 | % | 26.91 | % | 3.41 | % | 18.24 | % | 7.08 | % | 67.13 | % | |||||||||||||||||
Market Price Return | 18.65 | % | 8.24 | % | 26.80 | % | 3.40 | % | 18.19 | % | 7.08 | % | 67.10 | % |
Fund Inception: October 26, 2005
Performance quoted above represents past performance. Past performance is not a guarantee of future results and current performance may be higher or lower than performance quoted. Investment returns and principal value will fluctuate, and shares of the Fund ("Fund Shares"), when redeemed or sold, may be worth more or less than their original cost. Had the adviser not waived fees and/or reimbursed expenses, performance would have been lower. The adviser has contractually agreed to waive fees and/or pay certain Fund expenses through August 31, 2014. According to the Fund's current prospectus, the total gross annual operating expense ratio was indicated as 0.76%. The Financial Highlights section of the Shareholders Report presents the expense ratios based on expenses incurred during the period covered by this report. NAV and Market Price returns assume that dividends and capital gain distributions have been reinvested in the Fund at NAV and Market 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.
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.
† Fund and Index returns are based on the inception date of the Fund. Returns for the Benchmark Indices are based on the closest month-end to the Fund's inception date.
†† Average annualized.
6
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Manager's Analysis
PowerShares CleantechTM Portfolio (ticker: PZD)
As an index fund, the PowerShares CleantechTM Portfolio (the "Fund") is passively managed and attempts to track the returns of an underlying index. The Fund seeks investment results that generally correspond (before fees and expenses) to the price and yield of the Cleantech IndexTM (the "Index"). The Fund generally will invest at least 90% of its total assets in stocks of cleantech companies that comprise the Index and American depositary receipts ("ADRs") based on the stocks in the Index.
The Index is comprised of securities of companies listed on a securities exchange that are global leaders in environmentally-friendly technology (referred to as "cleantech"). The Index considers a company to qualify as a "cleantech company" when the company derives at least 50% of its revenues or operating profits from knowledge-based products and services that add economic value by reducing cost, raising productivity and/or product performance, while reducing consumption and their negative impact on the environment and public health. These businesses can include alternative energy and energy efficiency to advanced materials, air and water purification, eco-friendly agriculture/nutrition, and power transmission. The Index constituents must have a three-month average market capitalization of at least $200 million in freely traded ("floated") shares and must maintain a listing on a securities exchange. They must also have passed the Index provider's proprietary quantitative and qualitative screens, as well as maintain an average daily trading volume of at least $200,000 per trading day during the three-month period prior to inclusion. In general, the Index is a modified equally weighted index whose stocks are grouped into several weighting bands with stocks of similar capitalization. Within each band, stocks are weighted equally at the rebalancing determination date.
For the fiscal year ended April 30, 2013, on a market price basis, the Fund returned 11.50%. On a net asset value ("NAV") basis, the Fund returned 11.59%. During the same time period, the Index returned 10.52%. During the fiscal year, the Fund fully replicated the components of the Index. The Fund outperformed the return of its Index by 1.07% primarily due to revenue derived from its securities lending program.
During this same time period, the NASDAQ Composite Index returned 9.27%, and the S&P 500® Index returned 16.89%. The NASDAQ Composite Index and S&P 500® Index (the "Benchmark Indices") are unmanaged indices weighted by market capitalization based on the average performance of approximately 2,439 and 500 securities, respectively. The adviser provided these additional comparative benchmarks to help investors better understand how the investment results of the Fund compare to the performance of broad-based market benchmarks.
The adviser selected the NASDAQ Composite Index and S&P 500® Index as comparative indices to the Fund, although they do not have the specific "cleantech" sector relevance, they were selected for their recognition in the marketplace, and their performance comparison is a useful measure for investors as a broad representation of the overall U.S. stock market.
The performance of the Fund differed from these Benchmark Indices in part because the Fund tracks an Index that employs a proprietary weighting and stock selection methodology, whereas the comparative indexes select and weight stocks based on market capitalization.
Relative to the NASDAQ Composite Index, the positive performance of specific stocks included in the Index from the Information Technology sector contributed to the Fund's outperformance. Relative to the S&P 500® Index, the poor performance of specific stocks included in the Index from the Industrials sector during the fiscal year ended April 30, 2013 attributed to the Fund's underperformance. The majority of the Fund's underperformance relative to the S&P 500® Index during that period can be attributed to those stock performances.
8
Manager's Analysis (Continued)
PowerShares CleantechTM Portfolio (ticker: PZD)
For the fiscal year ended April 30, 2013, the Miscellaneous Manufacturing industry contributed most significantly to the Fund's return, followed by the Electrical Components & Equipment and Healthcare-Services industries, respectively. The Energy-Alternate Sources industry detracted most from the Fund's return, followed by the Hand/Machine Tools and Telecommunications industries, respectively.
Positions that contributed most significantly to the Fund's return included Cree, Inc., a semiconductors company (portfolio average weight of 2.56%); and Eurofins Scientific SE, a healthcare-services company (portfolio average weight of 2.02%). Positions that detracted most significantly from the Fund's return included Meyer Burger Technology AG, a hand/machine tools company (portfolio average weight of 0.76%); and SGL Carbon SE, a chemicals company (portfolio average weight of 2.04%).
Industry Breakdown (% of the Fund's
Net Assets) as of April 30, 2013
Miscellaneous Manufacturing | 17.4 | ||||||
Electrical Components & Equipment | 9.9 | ||||||
Electronics | 8.3 | ||||||
Auto Parts & Equipment | 7.6 | ||||||
Machinery-Diversified | 6.8 | ||||||
Engineering & Construction | 6.1 | ||||||
Software | 5.8 | ||||||
Environmental Control | 5.5 | ||||||
Chemicals | 5.2 | ||||||
Semiconductors | 4.6 | ||||||
Telecommunications | 3.5 | ||||||
Electric | 3.3 | ||||||
Biotechnology | 3.1 | ||||||
Commercial Services | 3.1 | ||||||
Mining | 2.3 | ||||||
Healthcare-Services | 2.2 | ||||||
Building Materials | 1.9 | ||||||
Energy-Alternate Sources | 1.9 | ||||||
Computers | 0.7 | ||||||
Hand/Machine Tools | 0.6 | ||||||
Money Market Fund | 6.8 | ||||||
Liabilities in excess of other assets | (6.6 | ) |
Top Ten Fund Holdings (% of the Fund's
Net Assets) as of April 30, 2013
Security | |||||||
Corning, Inc. | 3.5 | ||||||
Koninklijke DSM NV | 3.3 | ||||||
Schneider Electric SA | 3.3 | ||||||
BorgWarner, Inc. | 3.2 | ||||||
Johnson Controls, Inc. | 3.2 | ||||||
ABB Ltd. | 3.1 | ||||||
Novozymes A/S, Class B | 3.1 | ||||||
SGS SA | 3.1 | ||||||
Alfa Laval AB | 3.0 | ||||||
Roper Industries, Inc. | 3.0 | ||||||
Total | 31.8 |
9
Manager's Analysis (Continued)
PowerShares CleantechTM Portfolio (ticker: PZD)
Growth of a $10,000 Investment Since Inception†
Fund Performance History (%) As of April 30, 2013
3 Years | 3 Years | 5 Years | 5 Years | Fund Inception† | |||||||||||||||||||||||||||
1 Year | Avg. Ann.†† | Cumulative | Avg. Ann.†† | Cumulative | Avg. Ann.†† | Cumulative | |||||||||||||||||||||||||
Index | |||||||||||||||||||||||||||||||
Cleantech IndexTM | 10.52 | % | 0.35 | % | 1.06 | % | -5.65 | % | -25.25 | % | 0.35 | % | 2.29 | % | |||||||||||||||||
NASDAQ Composite Index | 9.27 | % | 10.59 | % | 35.25 | % | 6.65 | % | 37.96 | % | 5.39 | % | 40.65 | % | |||||||||||||||||
S&P 500® Index | 16.89 | % | 12.80 | % | 43.54 | % | 5.21 | % | 28.92 | % | 4.54 | % | 33.45 | % | |||||||||||||||||
Fund | |||||||||||||||||||||||||||||||
NAV Return | 11.59 | % | 1.30 | % | 3.95 | % | -4.98 | % | -22.55 | % | 0.82 | % | 5.45 | % | |||||||||||||||||
Market Price Return | 11.50 | % | 1.43 | % | 4.34 | % | -5.06 | % | -22.86 | % | 0.75 | % | 5.00 | % |
Fund Inception: October 24, 2006
Performance quoted above represents past performance. Past performance is not a guarantee of future results and current performance may be higher or lower than performance quoted. Investment returns and principal value will fluctuate, and shares of the Fund ("Fund Shares"), when redeemed or sold, may be worth more or less than their original cost. Had the adviser not waived fees and/or reimbursed expenses, performance would have been lower. The adviser has contractually agreed to waive fees and/or pay certain Fund expenses through August 31, 2014. According to the Fund's current prospectus, the total gross annual operating expense ratio was indicated as 0.74%. The Financial Highlights section of the Shareholders Report presents the expense ratios based on expenses incurred during the period covered by this report. NAV and Market Price returns assume that dividends and capital gain distributions have been reinvested in the Fund at NAV and Market 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.
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.
† Fund and Index returns are based on the inception date of the Fund. Returns for the Benchmark Indices are based on the closest month-end to the Fund's inception date.
†† Average annualized.
10
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Manager's Analysis
PowerShares DWA Technical LeadersTM Portfolio (ticker: PDP)
As an index fund, the PowerShares DWA Technical LeadersTM Portfolio (the "Fund") is passively managed and attempts to track the returns of an underlying index. The Fund seeks investment results that generally correspond (before fees and expenses) to the price and yield of the Dorsey Wright Technical LeadersTM Index (the "Index"). The Fund generally will invest at least 90% of its total assets in common stocks that comprise the Index.
The Index uses a starting universe of approximately 1,000 mid- and large-capitalization U.S. stocks traded on the NYSE, NYSE MKT or the NASDAQ exchanges that demonstrate powerful relative strength characteristics. The Index then ranks them using a proprietary relative strength methodology that considers their performance compared to a benchmark index and the relative performance of industry sectors and sub-sectors. Approximately 100 stocks are selected for inclusion in the Index. The stocks included in the Index receive a modified equal weighting.
For the fiscal year ended April 30, 2013, on a market price basis, the Fund returned 14.98%. On a net asset value ("NAV") basis, the Fund returned 15.02%. During the same time period, the Index returned 14.82%. Even after reflecting the Fund's operating expenses, the Fund outperformed its Index primarily because the Index does not reflect dividends in its total return index calculation.
During this same time period, the S&P 500® Growth Index returned 13.95%, the Russell 3000® Growth Index returned 12.83%, and the S&P 500® Index returned 16.89%. The S&P 500® Growth Index, Russell 3000® Growth Index and S&P 500® Index (the "Benchmark Indices") are unmanaged indices weighted by market capitalization based on the average performance of approximately 292, 1,684 and 500 securities, respectively. The adviser provided these additional comparative benchmarks to help investors better understand how the investment results of the Fund compare to the performance of other indices similar to the Index, as well as to that of broad-based market benchmarks.
The adviser selected the S&P 500® Growth Index and the Russell 3000® Growth Index as comparative indices to the Fund because of their recognition in the marketplace and their shared exposure to growth stocks. The S&P 500® Index was selected also because of its recognition in the marketplace, as well as to provide comparative benchmark performance measurement of the broader U.S. equity market as the index is not specific to growth stocks.
The performance of the Fund differed from these comparative indices in part because the Fund tracks an Index that employs a proprietary relative strength weighting and stock selection methodology, whereas the comparative indexes select and weight stocks based on market capitalization. More specifically, relative to the S&P 500® Growth Index and the Russell 3000® Growth Index, the Fund was underweight in the Information Technology sector and overweight in the Financials sector during the fiscal year ended April 30, 2013. The majority of the Fund's outperformance relative to these indices during the period can be attributed to these sector allocations.
Relative to the S&P 500® Index, the Fund was overweight in the Consumer Discretionary sector and underweight in the Health Care sector and suffered from poor performance of specific stocks included in the Index during the fiscal year ended April 30, 2013. The majority of the Fund's underperformance relative to the S&P 500® Index during that period can be attributed to these sector allocations and specific stock performances.
12
Manager's Analysis (Continued)
PowerShares DWA Technical LeadersTM Portfolio (ticker: PDP)
For the fiscal year ended April 30, 2013, the Financials sector contributed most significantly to the Fund's return, followed by the Materials and Consumer Discretionary sectors, respectively. Please note that the Consumer Discretionary sector is named here as a positive contributor to the Fund's overall return, although above it is cited as a cause of relative underperformance to the S&P 500® Index due to the sector contributing more to the benchmark index's positive performance than it did for the Fund from both the Fund overweighting the relatively poor performance sector and from poor performance of specific stocks in the sector relative to the Benchmark Index. The Energy sector detracted most from the Fund's return, followed by the Information Technology sector.
Positions that contributed most significantly to the Fund's return included Starz Liberty Capital, a consumer discretionary company (portfolio average weight of 2.48%); and Gilead Sciences, Inc., a health care company (portfolio average weight of 1.39%). Positions that detracted most significantly from the Fund's return included priceline.com Inc., a consumer discretionary company (no longer held at April 30, 2013); and O'Reilly Automotive Inc., a consumer discretionary company (no longer held at April 30, 2013).
Sector Breakdown (% of the Fund's
Net Assets) as of April 30, 2013
Financials | 24.8 | ||||||
Consumer Discretionary | 17.2 | ||||||
Industrials | 15.9 | ||||||
Materials | 14.4 | ||||||
Health Care | 11.5 | ||||||
Information Technology | 5.8 | ||||||
Consumer Staples | 4.5 | ||||||
Energy | 3.1 | ||||||
Utilities | 2.8 | ||||||
Money Market Fund | 0.1 | ||||||
Liabilities in excess of other assets | (0.1 | ) |
Top Ten Fund Holdings (% of the Fund's
Net Assets) as of April 30, 2013
Security | |||||||
General Growth Properties, Inc. REIT | 2.8 | ||||||
American Tower Corp. REIT | 2.8 | ||||||
Starz - Liberty Capital | 2.6 | ||||||
Ventas, Inc. REIT | 2.6 | ||||||
Catamaran Corp. | 2.5 | ||||||
Gilead Sciences, Inc. | 2.4 | ||||||
TRW Automotive Holdings Corp. | 2.3 | ||||||
J.B. Hunt Transport Services, Inc. | 2.3 | ||||||
Airgas, Inc. | 2.3 | ||||||
American Capital Ltd. | 2.0 | ||||||
Total | 24.6 |
13
Manager's Analysis (Continued)
PowerShares DWA Technical LeadersTM Portfolio (ticker: PDP)
Growth of a $10,000 Investment Since Inception†
Fund Performance History (%) As of April 30, 2013
3 Years | 3 Years | 5 Years | 5 Years | Fund Inception† | |||||||||||||||||||||||||||
1 Year | Avg. Ann.†† | Cumulative | Avg. Ann.†† | Cumulative | Avg. Ann.†† | Cumulative | |||||||||||||||||||||||||
Index | |||||||||||||||||||||||||||||||
Dorsey Wright Technical LeadersTM Index | 14.82 | % | 14.49 | % | 50.09 | % | 4.38 | % | 23.90 | % | 4.94 | % | 34.60 | % | |||||||||||||||||
S&P 500® Growth Index | 13.95 | % | 13.60 | % | 46.61 | % | 6.68 | % | 38.15 | % | 6.25 | % | 45.35 | % | |||||||||||||||||
Russell 3000® Growth Index | 12.83 | % | 13.40 | % | 45.81 | % | 6.75 | % | 38.60 | % | 6.16 | % | 44.57 | % | |||||||||||||||||
S&P 500® Index | 16.89 | % | 12.80 | % | 43.54 | % | 5.21 | % | 28.92 | % | 4.32 | % | 29.77 | % | |||||||||||||||||
Fund | |||||||||||||||||||||||||||||||
NAV Return | 15.02 | % | 14.83 | % | 51.42 | % | 4.57 | % | 25.06 | % | 5.08 | % | 35.74 | % | |||||||||||||||||
Market Price Return | 14.98 | % | 14.84 | % | 51.44 | % | 4.55 | % | 24.92 | % | 5.04 | % | 35.41 | % |
Fund Inception: March 1, 2007
Performance quoted above represents past performance. Past performance is not a guarantee of future results and current performance may be higher or lower than performance quoted. Investment returns and principal value will fluctuate, and shares of the Fund ("Fund Shares"), when redeemed or sold, may be worth more or less than their original cost. Had the adviser not waived fees and/or reimbursed expenses in the past, performance would have been lower. The adviser has contractually agreed to waive fees and/or pay certain Fund expenses through August 31, 2014. According to the Fund's current prospectus, the total gross annual operating expense ratio was indicated as 0.67%, including estimated acquired fund fees and expenses of 0.02%. The Financial Highlights section of the Shareholders Report presents the expense ratios based on expenses incurred during the period covered by this report. NAV and Market Price returns assume that dividends and capital gain distributions have been reinvested in the Fund at NAV and Market 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.
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.
† Fund and Index returns are based on the inception date of the Fund. Returns for the Benchmark Indices are based on the closest month-end to the Fund's inception date.
†† Average annualized.
14
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Manager's Analysis
PowerShares Global Listed Private Equity Portfolio (ticker: PSP)
As an index fund, the PowerShares Global Listed Private Equity Portfolio (the "Fund") is passively managed and attempts to track the returns of an underlying index. The Fund seeks investment results that generally correspond (before fees and expenses) to the price and yield of the Red Rocks Global Listed Private Equity Index (the "Index"). The Fund generally will invest at least 90% of its total assets in securities (including American depositary receipts ("ADRs") and global depositary receipts ("GDRs")) that comprise the Index.
The Index is comprised of 40 to 75 securities, ADRs and GDRs of listed private equity companies. To be considered for inclusion in the Index, a security must invest a majority of its assets in, lend capital to, or provide services to, private companies, or must have a stated intention to do so. The Blended – Red Rocks Global Listed Private Equity Index provider identifies private equity companies for inclusion in the Index based upon the companies' reputation, management, financial data, historical performance and the need for diversification within the Index. Each Index component must have a market capitalization of at least $100 million before inclusion in the Index. The Index uses float-adjusted, modified market capitalization weightings, with no component having a weight greater than 10%. The combined weight of all Index components that individually equal a 5% or greater weighting of the Index will not exceed 50% of the Index.
For the fiscal year ended April 30, 2013, on a market price basis, the Fund returned 32.00%. On a net asset value ("NAV") basis, the Fund returned 31.87%. During the same time period, the Index returned 33.39%. During the fiscal year, the Fund fully replicated the components of the Blended – Red Rocks Global Listed Private Equity Index; therefore, the Fund's performance differed from the return of the Index primarily due to the fees and operating expenses that the Fund incurred during the period.
During this same time period, the S&P 500® Financials Index returned 23.82%. The S&P 500® Financials Sector Index (the "Benchmark Index") is an unmanaged index weighted by market capitalization based on the average performance of approximately 81 securities.
The adviser selected the S&P 500® Financials Sector Index as the comparative index to the Fund because of its recognition in the marketplace and its shared exposure to finance companies. These reasons make its performance relevant when comparing to the Fund's performance.
The performance of the Fund differed from the Benchmark Index in part because the Fund tracks an index that employs a proprietary weighting and stock selection methodology, whereas the Benchmark Index selects and weights stocks based on market capitalization. Relative to the Benchmark Index, the Fund was slightly underweight in the Financials sector, but benefited from positive performance of specific stocks included in the Index from within this sector during the fiscal year ended April 30, 2013. The majority of the Fund's outperformance relative to the Benchmark Index during that period can be attributed to the positive performance of these specific stocks.
For the fiscal year ended April 30, 2013, the Private Equity investments contributed most significantly to the Fund's return, followed by the Investment Companies and Diversified Financial Services industries, respectively. The Water industry detracted most from the Fund's return.
Positions that contributed most significantly to the Fund's return included 3i Group PLC, a private equity company (portfolio average weight of 4.31%); and Apollo Global Management LLC, Class A, a private equity company (portfolio average weight of 2.70%). Positions that detracted most significantly from the Fund's return included Ratos AB, Class B, a private equity company (portfolio average weight of 4.33%); and Melrose Industries PLC, a miscellaneous manufacturing company (portfolio average weight of 2.43%).
16
Manager's Analysis (Continued)
PowerShares Global Listed Private Equity Portfolio (ticker: PSP)
Industry Breakdown (% of the Fund's
Net Assets) as of April 30, 2013
Private Equity | 32.0 | ||||||
Investment Companies | 23.8 | ||||||
Holding Companies-Diversified | 17.3 | ||||||
Diversified Financial Services | 9.9 | ||||||
Miscellaneous Manufacturing | 5.9 | ||||||
Internet | 0.9 | ||||||
Water | 0.5 | ||||||
Money Market Fund | 9.0 | ||||||
Liabilities in excess of other assets | 0.7 |
Top Ten Fund Holdings (% of the Fund's
Net Assets) as of April 30, 2013
Security | |||||||
Leucadia National Corp. | 5.5 | ||||||
Onex Corp. | 5.1 | ||||||
Partners Group Holding AG | 4.8 | ||||||
3i Group PLC | 4.0 | ||||||
Melrose Industries PLC | 3.7 | ||||||
American Capital Ltd. | 3.5 | ||||||
Wendel | 3.5 | ||||||
Hal Trust | 3.2 | ||||||
Ratos AB, Class B | 3.1 | ||||||
Eurazeo | 3.1 | ||||||
Total | 39.5 |
17
Manager's Analysis (Continued)
PowerShares Global Listed Private Equity Portfolio (ticker: PSP)
Growth of a $10,000 Investment Since Inception†
Fund Performance History (%) As of April 30, 2013
3 Years | 3 Years | 5 Years | 5 Years | Fund Inception† | |||||||||||||||||||||||||||
1 Year | Avg. Ann.††† | Cumulative | Avg. Ann.††† | Cumulative | Avg. Ann.††† | Cumulative | |||||||||||||||||||||||||
Index | |||||||||||||||||||||||||||||||
Blended – Red Rocks Global Listed Private Equity Index†† | 33.39 | % | 12.87 | % | 43.78 | % | -1.68 | % | -8.11 | % | -3.59 | % | -21.22 | % | |||||||||||||||||
S&P 500® Financials Sector Index | 23.82 | % | 6.79 | % | 21.80 | % | -4.75 | % | -21.60 | % | -7.30 | % | -38.89 | % | |||||||||||||||||
Fund | |||||||||||||||||||||||||||||||
Market Price Return | 32.00 | % | 10.80 | % | 36.02 | % | -5.55 | % | -24.84 | % | -6.51 | % | -35.52 | % |
Fund Inception: October 24, 2006
Performance quoted above represents past performance. Past performance is not a guarantee of future results and current performance may be higher or lower than performance quoted. Investment returns and principal value will fluctuate, and shares of the Fund ("Fund Shares"), when redeemed or sold, may be worth more or less than their original cost. Had the adviser not waived fees and/or reimbursed expenses, performance would have been lower. The adviser has contractually agreed to waive fees and/or pay certain Fund expenses through August 31, 2014. According to the Fund's current prospectus, the total gross annual operating expense ratio was indicated as 2.37%, including estimated acquired fund fees and expenses of 1.61%. The Financial Highlights section of the Shareholders Report presents the expense ratios based on expenses incurred during the period covered by this report. NAV and Market Price returns assume that dividends and capital gain distributions have been reinvested in the Fund at NAV and Market 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.
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.
† Fund and Index returns are based on the inception date of the Fund. Returns for the Benchmark Index are based on the closest month-end to the Fund's inception date.
†† Effective September 30, 2009, the Fund's underlying index changed. The data included as the Blended – Red Rocks Global Listed Private Equity Index is comprised of the Listed Private Equity Index from October 24, 2006, the Fund's inception, until September 30, 2009, followed by the performance of the Red Rocks Global Listed Private Equity Index from September 30, 2009 through April 30, 2013.
††† Average annualized.
18
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Manager's Analysis
PowerShares Golden Dragon China Portfolio (ticker: PGJ)
As an index fund, the PowerShares Golden Dragon China Portfolio (the "Fund") is passively managed and attempts to track the returns of an underlying index. The Fund seeks investment results that generally correspond (before fees and expenses) to the price and yield of the NASDAQ Golden Dragon China Index (the "Index"). The Fund generally will invest at least 90% of its total assets in equity securities of companies deriving a majority of their revenues from the People's Republic of China and that comprise the Index.
Securities eligible for inclusion in the Index must be issued by a company headquartered or incorporated in the People's Republic of China, listed on the NASDAQ, the NYSE or NYSE MKT, have a minimum market capitalization of $100 million and have a minimum three-month average daily dollar trading volume of $250,000. The Index then weights each component using a modified market capitalization-weighting methodology, with no component security having greater than 8% weight in the Index.
Effective April 30, 2012, the NASDAQ OMX Group, Inc. replaced the Halter Financial Group, Inc. as the index provider for the Index. Effective June 15, 2012, the name of the Index changed from the Halter USX China IndexSM to the NASDAQ Golden Dragon China Index. Also, effective April 30, 2012, the name of the Fund changed from the PowerShares Golden Dragon Halter USX China Portfolio to the PowerShares Golden Dragon China Portfolio.
For the fiscal year ended April 30, 2013, on a market price basis, the Fund returned (6.70)%. On a net asset value ("NAV") basis, the Fund returned (6.77)%. During the same time period, the Index returned (6.83)%. During the fiscal year, the Fund fully replicated the components of the Index; therefore, the Fund's performance differed from the return of the Index primarily due to fees and operating expenses that the Fund incurred during the year.
During this same time period, the MSCI China Index returned 4.12%, the FTSE/Xinhua China 25 Index returned 1.96%, and the S&P 500® Index returned 16.89%. The MSCI China Index, FTSE/Xinhua China 25 Index and S&P 500® Index (the "Benchmark Indices") are unmanaged indices weighted by market capitalization based on the average performance of approximately 138, 25 and 500 securities, respectively. The adviser provided these additional comparative benchmarks to help investors better understand how the investment results of the Fund compare to the performance of other indices similar to the Index, as well as to that of broad-based market benchmarks.
The adviser selected the MSCI China Index and the FTSE/Xinhua China 25 Index as comparative indices to the Fund because of their recognition in the marketplace and their shared exposure to Chinese companies. The S&P 500® Index does not have the same country exposure relevance. However, it was selected because of its recognition in the marketplace, and its performance comparison is a useful measure for investors as a broad representation of the overall U.S. stock market, which is a leading driver of world stock markets in general.
The performance of the Fund differed from the MSCI China Index and the FTSE/Xinhua China 25 Index in part because the Fund invests in Chinese companies, as defined by the Index methodology, listed on U.S. exchanges, whereas these two comparative indices are composed of Chinese stocks listed on the Hong Kong stock exchange. These comparative benchmarks are still relevant since their exposure is similar, but the performance differed primarily due to the substantial difference in components. Additionally, the performance of the Fund differed from the S&P 500® Index primarily due to the Fund's exposure to Chinese companies.
For the fiscal year ended April 30, 2013, the Health Care sector contributed most significantly to the Fund's return, followed by the Utilities and Financials sectors, respectively. The Information Technology
20
Manager's Analysis (Continued)
PowerShares Golden Dragon China Portfolio (ticker: PGJ)
sector detracted most from the Fund's return, followed by the Energy and Consumer Discretionary sectors, respectively.
Positions that contributed most significantly to the Fund's return included Qihoo 360 Technology Co. Ltd. ADR, an information technology company (portfolio average weight of 3.15%); and Mindray Medical International Ltd. ADR, a health care company (portfolio average weight of 4.76%). Positions that detracted most significantly from the Fund's return included Baidu, Inc. ADR, an information technology company (portfolio average weight of 7.41%); and New Oriental Education & Technology Group, Inc. ADR, a consumer discretionary company (portfolio average weight of 3.89%).
Sector Breakdown (% of the Fund's
Net Assets) as of April 30, 2013
Information Technology | 49.9 | ||||||
Consumer Discretionary | 13.1 | ||||||
Health Care | 10.5 | ||||||
Telecommunication Services | 9.7 | ||||||
Energy | 8.9 | ||||||
Financials | 3.2 | ||||||
Industrials | 2.6 | ||||||
Materials | 1.4 | ||||||
Utilities | 0.7 | ||||||
Money Market Fund | 21.3 | ||||||
Liabilities in excess of other assets | (21.3 | ) |
Top Ten Fund Holdings (% of the Fund's
Net Assets) as of April 30, 2013
Security | |||||||
China Mobile Ltd. ADR | 7.8 | ||||||
NetEase, Inc. ADR | 7.4 | ||||||
Baidu, Inc. ADR | 7.3 | ||||||
SINA Corp. | 6.7 | ||||||
Mindray Medical International Ltd. ADR | 6.1 | ||||||
New Oriental Education & Technology | |||||||
Group, Inc. ADR | 4.9 | ||||||
Ctrip.com International Ltd. ADR | 4.4 | ||||||
Qihoo 360 Technology Co. Ltd. ADR | 4.3 | ||||||
CNOOC Ltd. ADR | 3.7 | ||||||
Sohu.com, Inc. | 3.6 | ||||||
Total | 56.2 |
21
Manager's Analysis (Continued)
PowerShares Golden Dragon China Portfolio (ticker: PGJ)
Growth of a $10,000 Investment Since Inception†
Fund Performance History (%) As of April 30, 2013
3 Years | 3 Years | 5 Years | 5 Years | Fund Inception† | |||||||||||||||||||||||||||
1 Year | Avg. Ann.†† | Cumulative | Avg. Ann.†† | Cumulative | Avg. Ann.†† | Cumulative | |||||||||||||||||||||||||
Index | |||||||||||||||||||||||||||||||
NASDAQ Golden Dragon China Index | -6.83 | % | -5.75 | % | -16.27 | % | -5.80 | % | -25.82 | % | 5.47 | % | 56.27 | % | |||||||||||||||||
MSCI China Index | 4.12 | % | 1.04 | % | 3.15 | % | -1.76 | % | -8.49 | % | 13.42 | % | 188.71 | % | |||||||||||||||||
FTSE/Xinhua China 25 Index | 1.96 | % | -0.58 | % | -1.73 | % | -3.91 | % | -18.07 | % | 11.20 | % | 144.33 | % | |||||||||||||||||
S&P 500® Index | 16.89 | % | 12.80 | % | 43.54 | % | 5.21 | % | 28.92 | % | 5.92 | % | 62.23 | % | |||||||||||||||||
Fund | |||||||||||||||||||||||||||||||
NAV Return | -6.77 | % | -6.14 | % | -17.32 | % | -6.15 | % | -27.18 | % | 4.90 | % | 49.43 | % | |||||||||||||||||
Market Price Return | -6.70 | % | -6.25 | % | -17.60 | % | -6.17 | % | -27.28 | % | 4.83 | % | 48.57 | % |
Fund Inception: December 9, 2004
Performance quoted above represents past performance. Past performance is not a guarantee of future results and current performance may be higher or lower than performance quoted. Investment returns and principal value will fluctuate, and shares of the Fund ("Fund Shares"), when redeemed or sold, may be worth more or less than their original cost. Had the adviser not waived fees and/or reimbursed expenses, performance would have been lower. The adviser has contractually agreed to waive fees and/or pay certain Fund expenses through August 31, 2014. According to the Fund's current prospectus, the total gross annual operating expense ratio was indicated as 0.71%. The Financial Highlights section of the Shareholders Report presents the expense ratios based on expenses incurred during the period covered by this report. NAV and Market Price returns assume that dividends and capital gain distributions have been reinvested in the Fund at NAV and Market 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.
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.
† Fund and Index returns are based on the inception date of the Fund. Returns for the Benchmark Indices are based on the closest month-end to the Fund's inception date.
†† Average annualized.
22
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Manager's Analysis
PowerShares Lux Nanotech Portfolio (ticker: PXN)
As an index fund, the PowerShares Lux Nanotech Portfolio (the "Fund") is passively managed and attempts to track the returns of an underlying index. The Fund seeks investment results that generally correspond (before fees and expenses) to the price and yield of the Lux Nanotech IndexTM (the "Index"). The Fund generally will invest at least 90% of its total assets in common stocks of nanotechnology companies. A nanotechnology company focuses on the development and use of devices that are only a few nanometers in size that comprise the Index.
The Index seeks to reflect the performance of the nanotechnology sector using a modified equal weighting methodology. The Index is divided into two equally-weighted groups: nanotechnology specialists and end-use incumbents. At the time of a rebalance of reconstitution, 75% of the Index's weight is applied towards nanotechnology specialists, and 25% of the Index's weight is applied towards end-use incumbents. The constituents within each group are equally weighted at that time. Nanotechnology specialists are defined as small- to mid-sized companies with annual revenues of less than $5 billion that focus specifically on developing or funding emerging nanotechnology applications. End-use incumbents are large companies with more than $5 billion in revenue that are applying nanotechnology to existing product lines. To be included as a constituent in the Index, a company must be listed on the NYSE, NYSE MKT, the NASDAQ or Small Cap Market systems. It also must have a minimum market capitalization of $75 million at the time of Index determination, and have a minimum average daily trading volume over the preceding three months of 50,000 shares.
For the fiscal year ended April 30, 2013, on a market price basis, the Fund returned 8.32%. On a net asset value ("NAV") basis, the Fund returned 7.84%. During the same time period, the Index returned 6.30%. During the fiscal year, the Fund fully replicated the components of the Index. The Fund outperformed the return of its Index by 1.54% primarily due to revenue received from its securities lending program. Additionally, during the removal of Valence Technology, Inc., a former component security of the Index, the Index removed the security at a price of zero, while the Fund sold it for a slightly higher price.
During this same time period, the S&P 500® Index returned 16.89%. The S&P 500® Index (the "Benchmark Index") is an unmanaged index weighted by market capitalization based on the average performance of approximately 500 securities. The adviser provided the additional comparative benchmark to help investors better understand how the investment results of the Fund compare to the performance of the broad-based market benchmark.
The adviser selected the S&P 500® Index as a comparative index to the Fund because of its recognition in the marketplace and its representation of the broader U.S. equity market. The S&P 500® Index does not have specific nanotechnology sector relevance; however, its performance comparison is a useful measure for investors as a broad representation of the overall U.S. stock market.
The performance of the Fund differed from the Benchmark Index in part because the Fund tracks an Index that employs a modified equal weighting methodology and a stock selection methodology that focuses on nanotechnology companies, whereas the Benchmark Index selects and weights stocks based on market capitalization.
Relative to the S&P 500® Index, the Fund was overweight in the Industrials sector and overweight in the Information Technology sector during the fiscal year ended April 30, 2013. The majority of the Fund's underperformance relative to the S&P 500® Index during that period can be attributed to the poor performance of specific stocks included in the Index from the Industrials sector, as well as to being overweight to the Information Technology sector.
24
Manager's Analysis (Continued)
PowerShares Lux Nanotech Portfolio (ticker: PXN)
For the fiscal year ended April 30, 2013, the Biotechnology industry contributed most significantly to the Fund's return, followed by the Building Materials and Healthcare-Products industries, respectively. The Electrical Components & Equipment industries detracted most from the Fund's return, followed by the Investment Companies and Computers industries, respectively.
Positions that contributed most significantly to the Fund's return included Headwaters, Inc., a building materials company (portfolio average weight of 4.99%); and Nanosphere, Inc., a biotechnology company (portfolio average weight of 4.83%). Positions that detracted most significantly from the Fund's return included Valence Technology Inc., an electrical components & equipment company (no longer held at April 30, 2013); and American Superconductor Corp., an electrical components & equipment company (portfolio average weight of 2.13%).
Industry Breakdown (% of the Fund's
Net Assets) as of April 30, 2013
Semiconductors | 13.7 | ||||||
Pharmaceuticals | 13.7 | ||||||
Miscellaneous Manufacturing | 9.3 | ||||||
Computers | 9.1 | ||||||
Biotechnology | 8.6 | ||||||
Electrical Components & Equipment | 8.0 | ||||||
Electronics | 7.6 | ||||||
Chemicals | 5.7 | ||||||
Software | 3.9 | ||||||
Healthcare-Products | 3.9 | ||||||
Building Materials | 3.8 | ||||||
Auto Parts & Equipment | 3.6 | ||||||
Investment Companies | 3.5 | ||||||
Auto Manufacturers | 3.1 | ||||||
Engineering & Construction | 2.5 | ||||||
Money Market Fund | 7.9 | ||||||
Liabilities in excess of other assets | (7.9 | ) |
Top Ten Fund Holdings (% of the Fund's
Net Assets) as of April 30, 2013
Security | |||||||
BioDelivery Sciences International, Inc. | 5.7 | ||||||
Nanosphere, Inc. | 4.9 | ||||||
Research Frontiers, Inc. | 4.5 | ||||||
Veeco Instruments, Inc. | 4.2 | ||||||
Flamel Technologies SA ADR | 4.2 | ||||||
Maxwell Technologies, Inc. | 4.1 | ||||||
Polypore International, Inc. | 4.1 | ||||||
Accelrys, Inc. | 3.9 | ||||||
SurModics, Inc. | 3.9 | ||||||
FEI Co. | 3.9 | ||||||
Total | 43.4 |
25
Manager's Analysis (Continued)
PowerShares Lux Nanotech Portfolio (ticker: PXN)
Growth of a $10,000 Investment Since Inception†
Fund Performance History (%) As of April 30, 2013
3 Years | 3 Years | 5 Years | 5 Years | Fund Inception† | |||||||||||||||||||||||||||
1 Year | Avg. Ann.†† | Cumulative | Avg. Ann.†† | Cumulative | Avg. Ann.†† | Cumulative | |||||||||||||||||||||||||
Index | |||||||||||||||||||||||||||||||
Lux Nanotech IndexTM | 6.30 | % | -14.45 | % | -37.39 | % | -14.42 | % | -54.09 | % | -11.04 | % | -58.46 | % | |||||||||||||||||
S&P 500® Index | 16.89 | % | 12.80 | % | 43.54 | % | 5.21 | % | 28.92 | % | 6.04 | % | 55.26 | % | |||||||||||||||||
Fund | |||||||||||||||||||||||||||||||
NAV Return | 7.84 | % | -12.61 | % | -33.26 | % | -13.26 | % | -50.90 | % | -10.00 | % | -54.69 | % | |||||||||||||||||
Market Price Return | 8.32 | % | -12.45 | % | -32.90 | % | -13.12 | % | -50.50 | % | -9.96 | % | -54.52 | % |
Fund Inception: October 26, 2005
Performance quoted above represents past performance. Past performance is not a guarantee of future results and current performance may be higher or lower than performance quoted. Investment returns and principal value will fluctuate, and shares of the Fund ("Fund Shares"), when redeemed or sold, may be worth more or less than their original cost. Had the adviser not waived fees and/or reimbursed expenses, performance would have been lower. The adviser has contractually agreed to waive fees and/or pay certain Fund expenses through August 31, 2014. According to the Fund's current prospectus, the total gross annual operating expense ratio was indicated as 1.49%, including estimated acquired fund fees and expenses of 0.41%. The Financial Highlights section of the Shareholders Report presents the expense ratios based on expenses incurred during the period covered by this report. NAV and Market Price returns assume that dividends and capital gain distributions have been reinvested in the Fund at NAV and Market 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.
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.
† Fund and Index returns are based on the inception date of the Fund. Returns for the Benchmark Index are based on the closest month-end to the Fund's inception date.
†† Average annualized.
26
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Manager's Analysis
PowerShares S&P 500 BuyWrite Portfolio (ticker: PBP)
As an index fund, the PowerShares S&P 500 BuyWrite Portfolio (the "Fund") is passively managed and attempts to track the returns of an underlying index. The Fund seeks investment results that generally correspond (before fees and expenses) to the price and yield of the CBOE S&P 500 BuyWrite Index (the "Index"). The Fund generally will invest at least 90% of its total assets in securities that comprise the Index and will write (sell) call options thereon.
The Index measures total returns of a theoretical portfolio that includes S&P 500® Index stocks on which S&P 500® Index call options are written (sold) systematically against the portfolio through a "buy-write" strategy. A "buy-write," also called a covered call, generally is considered an investment strategy in which an investor buys a stock or basket of stocks, and sells call options that correspond to the stock or basket of stocks. The Index holds the constituents and weights of the S&P 500® Index, which consists of the largest 500 U.S. stocks weighted by market capitalization. In addition, the Index sells covered call options on the S&P 500® Index, each with an exercise price at or above the prevailing price level of the S&P 500® Index. The Index assumes that the call options are written (sold) on the third Friday of each month and expire in the next calendar month after they are written. The Index assumes that the call options are held until their expiration.
For the fiscal year ended April 30, 2013, on a market price basis, the Fund returned 4.97%. On a net asset value ("NAV") basis, the Fund returned 5.22%. During the same time period, the Index returned 6.09%. During the fiscal year, the Fund fully replicated the components of the Index; therefore, the Fund's performance differed from the return of the Index primarily due to fees and operating expenses that the Fund incurred during the period.
During this same time period, the S&P 500® Index returned 16.89%. The S&P 500® Index (the "Benchmark Index") is an unmanaged index weighted by market capitalization based on the average performance of approximately 500 securities. The adviser provided the additional comparative benchmark to help investors better understand how the investment results of the Fund compare to the performance of the broad-based market benchmark.
Relative to the S&P 500® Index, the Fund's sector allocation mirrored the Benchmark Index during the fiscal year ended April 30, 2013. The Fund's underperformance relative to the Benchmark Index during that period can be attributed to the covered call feature of the Fund. The sale of calls, while providing income to the Fund, did not make up for the rising market and the exercise of the options during the period, which resulted in underperformance versus the S&P 500® Index.
For the fiscal year ended April 30, 2013, the Financials sector contributed most significantly to the Fund's return, followed by the Health Care and Consumer Staples sectors, respectively. There were no detracting sectors.
Positions that contributed most significantly to the Fund's return included Johnson & Johnson, a health care company (portfolio average weight of 1.53%); and Google Inc. Class A, an information technology company (portfolio average weight of 1.41%). Positions that detracted most significantly from the Fund's return included Apple Inc., an information technology company (portfolio average weight of 4.05%); and Intel Corp., an information technology company (portfolio average weight of 0.91%).
28
Manager's Analysis (Continued)
PowerShares S&P 500 BuyWrite Portfolio (ticker: PBP)
Sector Breakdown (% of the Fund's
Net Assets) as of April 30, 2013
Information Technology | 18.4 | ||||||
Financials | 16.6 | ||||||
Health Care | 13.2 | ||||||
Consumer Discretionary | 12.1 | ||||||
Consumer Staples | 11.4 | ||||||
Energy | 10.9 | ||||||
Industrials | 10.1 | ||||||
Utilities | 3.8 | ||||||
Materials | 3.5 | ||||||
Telecommunication Services | 3.2 | ||||||
Liabilities in excess of other assets | (3.2 | ) |
Top Ten Fund Holdings (% of the Fund's
Net Assets) as of April 30, 2013
Security | |||||||
Apple, Inc. | 3.0 | ||||||
Exxon Mobil Corp. | 2.9 | ||||||
Microsoft Corp. | 1.8 | ||||||
Johnson & Johnson | 1.7 | ||||||
Chevron Corp. | 1.7 | ||||||
General Electric Co. | 1.7 | ||||||
Google, Inc., Class A | 1.6 | ||||||
International Business Machines Corp. | 1.5 | ||||||
Procter & Gamble Co. (The) | 1.5 | ||||||
Pfizer, Inc. | 1.5 | ||||||
Total | 18.9 |
29
Manager's Analysis (Continued)
PowerShares S&P 500 BuyWrite Portfolio (ticker: PBP)
Growth of a $10,000 Investment Since Inception†
Fund Performance History (%) As of April 30, 2013
3 Years | 3 Years | 5 Years | 5 Years | Fund Inception† | |||||||||||||||||||||||||||
1 Year | Avg. Ann.†† | Cumulative | Avg. Ann.†† | Cumulative | Avg. Ann.†† | Cumulative | |||||||||||||||||||||||||
Index | |||||||||||||||||||||||||||||||
CBOE S&P 500 BuyWrite Index | 6.09 | % | 7.50 | % | 24.23 | % | 2.63 | % | 13.85 | % | 2.31 | % | 13.01 | % | |||||||||||||||||
S&P 500® Index | 16.89 | % | 12.80 | % | 43.54 | % | 5.21 | % | 28.92 | % | 3.87 | % | 22.43 | % | |||||||||||||||||
Fund | |||||||||||||||||||||||||||||||
NAV Return | 5.22 | % | 6.61 | % | 21.16 | % | 1.59 | % | 8.19 | % | 1.44 | % | 7.98 | % | |||||||||||||||||
Market Price Return | 4.97 | % | 6.61 | % | 21.16 | % | 1.56 | % | 8.03 | % | 1.45 | % | 8.00 | % |
Fund Inception: December 20, 2007
Performance quoted above represents past performance. Past performance is not a guarantee of future results and current performance may be higher or lower than performance quoted. Investment returns and principal value will fluctuate, and shares of the Fund ("Fund Shares"), when redeemed or sold, may be worth more or less than their original cost. According to the Fund's current prospectus, the Fund's expense ratio 0.75% is expressed as a unitary management fee to cover operating expenses and expenses incurred in connection with managing the portfolio. NAV and Market Price returns assume that dividends and capital gain distributions have been reinvested in the Fund at NAV and Market 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.
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.
† Fund and Index returns are based on the inception date of the Fund. Returns for the Benchmark Index are based on the closest month-end to the Fund's inception date.
†† Average annualized.
30
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Manager's Analysis
PowerShares S&P 500® High Quality Portfolio (ticker: SPHQ)
As an index fund, the PowerShares S&P 500® High Quality Portfolio (the "Fund") is passively managed and attempts to track the returns of an underlying index. The Fund seeks investment results that generally correspond (before fees and expenses) to the price and yield of the S&P 500® High Quality Rankings Index (the "Index"). The Fund generally will invest at least 90% of its total assets in securities that comprise the Index.
The Index is designed to provide exposure to high quality stocks within the S&P 500® Index. The Index is composed of constituents of the S&P 500® Index whose earnings and dividends have grown over the long term, as reflected by their "S&P Quality Rankings." S&P Quality Rankings are proprietary rankings calculated by Standard & Poor's based on the per-share earnings and dividends records of a company over the past 10 years. If a company within the S&P 500® Index does not have a Quality Ranking assigned to it, it is not considered for inclusion within the Index. S&P 500® Index constituents with Quality Rankings of A- or above are selected for inclusion in the Index.
For the fiscal year ended April 30, 2013, on a market price basis, the Fund returned 18.86%. On a net asset value ("NAV") basis, the Fund returned 18.86%. During the same time period, the Blended – S&P 500® High Quality Rankings Index returned 19.33%. During the fiscal year, the Fund fully replicated the components of the Index; therefore, the Fund's performance (on a NAV basis) differed from the return of the Index primarily due to fees and operating expenses that the Fund incurred during the period.
During this same time period, the S&P 500® Growth Index returned 13.95%, the Russell 3000® Growth Index returned 12.83%, and the S&P 500® Index returned 16.89%. The S&P 500® Growth Index, Russell 3000® Growth Index and S&P 500® Index (the "Benchmark Indices") are unmanaged indices weighted by market capitalization based on the average performance of approximately 292, 1,684 and 500 securities, respectively. The adviser provided these additional comparative benchmarks to help investors better understand how the investment results of the Fund compare to the performance of other indices similar to the Index, as well as to that of broad-based market benchmarks.
The adviser selected the S&P 500® Growth Index and the Russell 3000® Growth Index as comparative indices to the Fund because of their recognition in the marketplace and their shared exposure to growth stocks. These reasons make their performance relevant when comparing to the Fund's performance. The S&P 500® Index does not have the same specific relevance to growth stocks as the S&P 500® Growth Index and Russell 3000® Growth Index; however, it was also selected for its recognition in the marketplace, and its performance comparison is a useful measure for investors as a broad representation of the overall U.S. stock market.
The performance of the Fund differed from these comparative indexes in part because the Fund tracks an Index that selects stocks based on S&P Quality Rankings, which takes into account earnings and dividends, while the S&P 500® Growth Index selects stocks based on sales growth, earnings, and momentum, and the Russell 3000® Growth Index selects stocks based on price-to-book ratios and forecasted growth values. More specifically, the Fund outperformed the Russell 3000® Growth Index in large part due to its allocation to the Information Technology sector, and the Consumer Staples sector as well as to the performance of specific stocks included in the Index from those sectors. The Fund outperformed the S&P 500® Growth Index in large part due to its allocation to the Information Technology sector and the Consumer Staples sector as well as to the performance of specific stocks included in the Index from those sectors.
32
Manager's Analysis (Continued)
PowerShares S&P 500® High Quality Portfolio (ticker: SPHQ)
Relative to the S&P 500® Index, the Fund was underweight in the Information Technology sector and overweight in the Consumer Staples sector during the fiscal year ended April 30, 2013. The majority of the Fund's outperformance relative to the S&P 500® Index during that period can be attributed to these sector allocations, as well as to the performance of specific stocks included in the Index from the Information Technology sector.
For the fiscal year ended April 30, 2013, the Consumer Staples sector contributed most significantly to the Fund's return, followed by the Industrials and Consumer Discretionary sectors, respectively. There were no detracting sectors.
Positions that contributed most significantly to the Fund's return included Walt Disney Co. (The), a consumer discretionary company (portfolio average weight of 1.20%); and Hormel Foods Corp., a consumer staples company (portfolio average weight of 1.19%). Positions that detracted most significantly from the Fund's return included Caterpillar, Inc., an industrials company (portfolio average weight of 1.10%); and Apache Corp., an energy company (no longer held at April 30, 2013).
Sector Breakdown (% of the Fund's
Net Assets) as of April 30, 2013
Industrials | 25.3 | ||||||
Consumer Staples | 19.9 | ||||||
Consumer Discretionary | 19.7 | ||||||
Health Care | 10.1 | ||||||
Materials | 7.7 | ||||||
Financials | 5.3 | ||||||
Information Technology | 4.7 | ||||||
Utilities | 4.4 | ||||||
Energy | 2.8 | ||||||
Money Market Fund | 0.1 | ||||||
Liabilities in excess of other assets | (0.0 | ) |
Top Ten Fund Holdings (% of the Fund's
Net Assets) as of April 30, 2013
Security | |||||||
W.W. Grainger, Inc. | 1.3 | ||||||
NIKE, Inc., Class B | 1.2 | ||||||
Walt Disney Co. (The) | 1.2 | ||||||
Lorillard, Inc. | 1.2 | ||||||
Coca-Cola Co. (The) | 1.2 | ||||||
Johnson & Johnson | 1.2 | ||||||
Praxair, Inc. | 1.2 | ||||||
Sigma-Aldrich Corp. | 1.2 | ||||||
Ecolab, Inc. | 1.2 | ||||||
Ross Stores, Inc. | 1.2 | ||||||
Total | 12.1 |
33
Manager's Analysis (Continued)
PowerShares S&P 500® High Quality Portfolio (ticker: SPHQ)
Growth of a $10,000 Investment Since Inception†
Fund Performance History (%) As of April 30, 2013
3 Years | 3 Years | 5 Years | 5 Years | Fund Inception† | |||||||||||||||||||||||||||
1 Year | Avg. Ann.††† | Cumulative | Avg. Ann.††† | Cumulative | Avg. Ann.††† | Cumulative | |||||||||||||||||||||||||
Index | |||||||||||||||||||||||||||||||
Blended – S&P 500® High Quality Rankings Index†† | 19.33 | % | 16.43 | % | 57.84 | % | 2.80 | % | 14.81 | % | 2.92 | % | 23.73 | % | |||||||||||||||||
S&P 500® Growth Index | 13.95 | % | 13.60 | % | 46.61 | % | 6.68 | % | 38.15 | % | 6.49 | % | 59.40 | % | |||||||||||||||||
Russell 3000® Growth Index | 12.83 | % | 13.40 | % | 45.81 | % | 6.75 | % | 38.60 | % | 6.44 | % | 58.90 | % | |||||||||||||||||
S&P 500® Index | 16.89 | % | 12.80 | % | 43.54 | % | 5.21 | % | 28.92 | % | 5.58 | % | 49.60 | % | |||||||||||||||||
Fund | |||||||||||||||||||||||||||||||
NAV Return | 18.86 | % | 15.34 | % | 53.44 | % | 2.35 | % | 12.30 | % | 2.64 | % | 21.27 | % | |||||||||||||||||
Market Price Return | 18.86 | % | 15.34 | % | 53.44 | % | 2.36 | % | 12.36 | % | 2.58 | % | 20.72 | % |
Fund Inception: December 6, 2005
Performance quoted above represents past performance. Past performance is not a guarantee of future results and current performance may be higher or lower than performance quoted. Investment returns and principal value will fluctuate, and shares of the Fund ("Fund Shares"), when redeemed or sold, may be worth more or less than their original cost. Had the adviser not waived fees and/or reimbursed expenses, performance would have been lower. The adviser has contractually agreed to waive fees and/or pay certain Fund expenses through August 31, 2014. According to the Fund's current prospectus, the total gross annual operating expense ratio was indicated as 0.49%. The Financial Highlights section of the Shareholders Report presents the expense ratios based on expenses incurred during the period covered by this report. NAV and Market Price returns assume that dividends and capital gain distributions have been reinvested in the Fund at NAV and Market 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.
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.
† Fund and Index returns are based on the inception date of the Fund. Returns for the Benchmark Indices are based on the closest month-end to the Fund's inception date.
†† Effective June 29, 2010, the Fund's underlying index changed. The data known as the Blended – S&P 500® High Quality Rankings Index is comprised of the original performance of the Value Line Timeliness Select Index from Fund inception through the conversion date, June 29, 2010, followed by the performance of the S&P 500® High Quality Rankings Index starting at the conversion date and through April 30, 2013.
††† Average annualized.
34
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Manager's Analysis
PowerShares Water Resources Portfolio (ticker: PHO)
As an index fund, the PowerShares Water Resources Portfolio (the "Fund") is passively managed and attempts to track the returns of an underlying index. The Fund seeks investment results that generally correspond (before fees and expenses) to the price and yield of the NASDAQ OMX US Water IndexSM (the "Index"). The Fund generally will invest at least 90% of its total assets in common stocks and American depositary receipts ("ADRs") of companies in the water industry that comprise the Index.
The Index includes securities from companies that are listed on a major U.S. stock exchange (NYSE, NYSE MKT or NASDAQ) and are classified by SustainableBusiness.com LLC as participating in the "Green Economy," an environmental and clean energy sector portion of the NASDAQ OMX Green Economy Global Benchmark Index, which includes 350 securities from 13 different environmental sectors. Only one security per issuer is permitted and the securities must have a minimum worldwide market capitalization of $50 million plus a minimum three-month average daily dollar trading volume of $250,000. The securities are evaluated annually for eligibility. The Index weights these securities using a modified liquidity weighting methodology, with no component security to exceed 8% of the weight of the Index.
For the fiscal year ended April 30, 2013, on a market price basis, the Fund returned 18.49%. On a net asset value ("NAV") basis, the Fund returned 18.48%. During the same time period, the Blended – NASDAQ OMX U.S. Water Index returned 19.46%. During the fiscal year, the Fund fully replicated the components of the Index; therefore, the Fund's performance (on a NAV basis) differed from the return of the Index primarily due to fees and operating expenses that the Fund incurred during the period.
During this same time period, the ISE Water Index returned 18.00%, and the S&P 500® Index returned 16.89%. The ISE Water Index and S&P 500® Index (the "Benchmark Indices") are unmanaged indices weighted by market capitalization based on the average performance of approximately 46 and 500 securities, respectively. The adviser provided these additional comparative benchmarks to help investors better understand how the investment results of the Fund compare to the performance of other indices similar to the Index, as well as to that of broad-based market benchmarks.
The adviser selected the ISE Water Index to provide comparative benchmark performance measurements because of its recognition in the marketplace and its shared exposure to water companies. These reasons make its performance relevant when comparing to the Fund's performance. The S&P 500® Index does not have the same specific sector relevance as the ISE Water Index; however, it was also selected for its recognition in the marketplace, and its performance comparison is a useful measure for investors as a broad representation of the overall U.S. stock market.
The performance of the Fund differed from these Benchmark Indices in part because the Fund tracks an Index that employs a proprietary weighting and stock selection methodology, whereas the Benchmark Indices select and weight stocks based on market capitalization. Relative to the ISE Water Index, the Fund was underweight in the Industrials sector, which was the Fund's worst performing sector, during the fiscal year ended April 30, 2013. The Fund's similar performance relative to the ISE Water Index during that period can be attributed to this allocation.
For the fiscal year ended April 30, 2013, the Water industry contributed most significantly to the Fund's return, followed by the Machinery-Diversified and Electronics industries, respectively. The Agriculture industry detracted most from the Fund's return.
36
Manager's Analysis (Continued)
PowerShares Water Resources Portfolio (ticker: PHO)
Positions that contributed most significantly to the Fund's return included Flowserve Corp., a machinery-diversified company (portfolio average weight of 8.24%); and Pentair Ltd., a miscellaneous manufacturing company (portfolio average weight of 7.39%). Positions that detracted most significantly from the Fund's return included ITT Corp, a miscellaneous manufacturing company (no longer held at April 30, 2013); and Veolia Environment SA ADR, a water company (portfolio average weight of 3.30%).
Industry Breakdown (% of the Fund's
Net Assets) as of April 30, 2013
Water | 23.6 | ||||||
Electronics | 17.6 | ||||||
Miscellaneous Manufacturing | 16.2 | ||||||
Machinery-Diversified | 16.2 | ||||||
Metal Fabricate/Hardware | 8.5 | ||||||
Environmental Control | 7.7 | ||||||
Housewares | 4.1 | ||||||
Engineering & Construction | 3.7 | ||||||
Hand/Machine Tools | 2.3 | ||||||
Agriculture | 0.1 | ||||||
Money Market Fund | 0.3 | ||||||
Liabilities in excess of other assets | (0.3 | ) |
Top Ten Fund Holdings (% of the Fund's
Net Assets) as of April 30, 2013
Security | |||||||
American Water Works Co., Inc. | 8.6 | ||||||
Pentair Ltd. | 8.3 | ||||||
Waters Corp. | 8.1 | ||||||
Flowserve Corp. | 8.0 | ||||||
Pall Corp. | 7.9 | ||||||
Aqua America, Inc. | 4.4 | ||||||
Mueller Water Products, Inc., Class A | 4.3 | ||||||
Xylem, Inc. | 4.1 | ||||||
Watts Water Technologies, Inc., Class A | 4.1 | ||||||
Toro Co. (The) | 4.0 | ||||||
Total | 61.8 |
37
Manager's Analysis (Continued)
PowerShares Water Resources Portfolio (ticker: PHO)
Growth of a $10,000 Investment Since Inception†
Fund Performance History (%) As of April 30, 2013
3 Years | 3 Years | 5 Years | 5 Years | Fund Inception† | |||||||||||||||||||||||||||
1 Year | Avg. Ann.††† | Cumulative | Avg. Ann.††† | Cumulative | Avg. Ann.††† | Cumulative | |||||||||||||||||||||||||
Index | |||||||||||||||||||||||||||||||
Blended – NASDAQ OMX U.S. Water IndexSM†† | 19.46 | % | 8.66 | % | 28.30 | % | 3.03 | % | 16.09 | % | 7.17 | % | 66.94 | % | |||||||||||||||||
ISE Water Index | 18.00 | % | 10.71 | % | 35.68 | % | 4.44 | % | 24.26 | % | 8.33 | % | 81.02 | % | |||||||||||||||||
S&P 500® Index | 16.89 | % | 12.80 | % | 43.54 | % | 5.21 | % | 28.92 | % | 5.58 | % | 49.60 | % | |||||||||||||||||
Fund | |||||||||||||||||||||||||||||||
NAV Return | 18.48 | % | 7.68 | % | 24.86 | % | 1.98 | % | 10.31 | % | 5.74 | % | 51.15 | % | |||||||||||||||||
Market Price Return | 18.49 | % | 7.66 | % | 24.80 | % | 2.04 | % | 10.63 | % | 5.58 | % | 49.42 | % |
Fund Inception: December 6, 2005
Performance quoted above represents past performance. Past performance is not a guarantee of future results and current performance may be higher or lower than performance quoted. Investment returns and principal value will fluctuate, and shares of the Fund ("Fund Shares"), when redeemed or sold, may be worth more or less than their original cost. The adviser has contractually agreed to waive fees and/or reimburse expenses through August 31, 2014. According to the Fund's current prospectus, the total gross annual operating expense ratio was indicated as 0.62%. The Financial Highlights section of the Shareholders Report presents the expense ratios based on expenses incurred during the period covered by this report. NAV and Market Price returns assume that dividends and capital gain distributions have been reinvested in the Fund at NAV and Market 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.
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.
† Fund and Index returns are based on the inception date of the Fund. Returns for the Benchmark Indices are based on the closest month-end to the Fund's inception date.
†† Effective March 1, 2012, the Fund's underlying index changed. The data known as the Blended – NASDAQ OMX U.S. Water Index is comprised of the original performance of the Palisades Water Index from Fund inception through the conversion date, March 1, 2012, followed by the performance of the NASDAQ OMX US Water IndexSM starting at the conversion date and through April 30, 2013.
††† Average annualized.
38
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Manager's Analysis
PowerShares WilderHill Clean Energy Portfolio (ticker: PBW)
As an index fund, the PowerShares WilderHill Clean Energy Portfolio (the "Fund") is passively managed and attempts to track the returns of an underlying index. The Fund seeks investment results that generally correspond (before fees and expenses) to the price and yield of the WilderHill Clean Energy Index (the "Index"). The Fund generally will invest at least 90% of its total assets in common stocks of companies engaged in the business of the advancement of cleaner energy and conservation that comprise the Index.
The Index is composed of securities from a universe of companies that have significant exposure to clean energy, or the advancement of clean energy, or be important to the development of clean energy. The Index includes companies that are publicly traded in the United States and ranks them by their respective sector, determined by the index provider, and size. Components less than $200 million in total market capitalization are set to one-half of a percent. Sector weightings, initially determined by the index provider, are reviewed each quarter in conjunction with the scheduled quarterly review of the Index. Each component's weighting cannot exceed four percent of the Index. Additional eligibility requirements are: 1) 3-month average market capitalization of at least $50 million, and 2) the 3-month average closing price must be above $1 if the component is not currently in the index.
For the fiscal year ended April 30, 2013, on a market price basis, the Fund returned (2.65)%. On a net asset value ("NAV") basis, the Fund returned (2.64)%. During the same time period, the Index returned (4.10)%. During the fiscal year, the Fund fully replicated the components of the Index. Even after reflecting operating expenses the Fund outperformed the return of its Index primarily due to revenue from its securities lending program.
During this same time period, the NASDAQ Composite Index returned 9.27%, and the S&P 500® Index returned 16.89%. The NASDAQ Composite Index and S&P 500® Index (the "Benchmark Indices") are unmanaged indices weighted by market capitalization based on the average performance of approximately 2,439 and 500 securities, respectively. The adviser provided these additional comparative benchmarks to help investors better understand how the investment results of the Fund compare to the performance to that of broad-based market benchmarks.
The adviser selected the NASDAQ Composite Index and the S&P 500® Index as comparative indices to the Fund because of their recognition in the marketplace, which makes their performance relevant when comparing to the Fund's performance. The NASDAQ Composite Index and S&P 500® Index do not have specific clean energy sector relevance; however, their performance comparison is a useful measure for investors as a broad representation of the overall U.S. stock market.
The performance of the Fund differed from these Benchmark Indices in part because the Fund tracks an Index that employs a proprietary weighting and stock selection methodology, whereas the Benchmark Indices select and weight stocks based on market capitalization. They also differed because the fund focuses on clean energy and the Benchmark Indices do not.
Relative to the NASDAQ Composite Index, the Fund was overweight in the Materials, Energy, and Industrials sectors and experienced poor performance from specific stocks included in the Index from these sectors during the fiscal year ended April 30, 2013. The majority of the Fund's underperformance relative to the NASDAQ Composite Index during that period can be attributed to these sector allocations and specific stock performances. Relative to the S&P 500® Index, the Fund was overweight in the Materials, Industrials and Information Technology sectors and experienced poor performance from specific stocks included in the Index from these sectors as well as in the Energy sector during the fiscal
40
Manager's Analysis (Continued)
PowerShares WilderHill Clean Energy Portfolio (ticker: PBW)
year ended April 30, 2013. The majority of the Fund's underperformance relative to the S&P 500® Index during that period can be attributed to these sector allocations and specific stock performances.
For the fiscal year ended April 30, 2013, the Semiconductors industry contributed most significantly to the Fund's return, followed by the Electric and Auto Manufacturers sub-industries, respectively. The Energy-Alternate Sources industry detracted most from the Fund's return, followed by the Mining and Electrical Components & Equipment sub-industries, respectively.
Positions that contributed most significantly to the Fund's return included First Solar Inc., a semiconductors company (portfolio average weight of 2.81%); and SunPower Corp., an electrical components & equipment company (portfolio average weight of 2.86%). Positions that detracted most significantly from the Fund's return included Suntech Power Holdings Co. Ltd. ADR, an electrical components & equipment company (no longer held at April 30, 2013); and Molycorp, Inc., a mining company (portfolio average weight of 1.99%).
Industry Breakdown (% of the Fund's
Net Assets) as of April 30, 2013
Electrical Components & Equipment | 17.4 | ||||||
Semiconductors | 17.1 | ||||||
Energy-Alternate Sources | 16.6 | ||||||
Electric | 16.1 | ||||||
Chemicals | 10.0 | ||||||
Auto Parts & Equipment | 4.3 | ||||||
Miscellaneous Manufacturing | 3.5 | ||||||
Auto Manufacturers | 3.4 | ||||||
Mining | 2.7 | ||||||
Metal Fabricate/Hardware | 2.2 | ||||||
Food | 2.0 | ||||||
Commercial Services | 2.0 | ||||||
Electronics | 1.8 | ||||||
Computers | 0.9 | ||||||
Money Market Fund | 29.7 | ||||||
Liabilities in excess of other assets | (29.7 | ) |
Top Ten Fund Holdings (% of the Fund's
Net Assets) as of April 30, 2013
Security | |||||||
First Solar, Inc. | 3.8 | ||||||
Power-One, Inc. | 3.5 | ||||||
Tesla Motors, Inc. | 3.4 | ||||||
Solarcity Corp. | 3.4 | ||||||
Trina Solar Ltd. ADR | 3.1 | ||||||
Polypore International, Inc. | 3.0 | ||||||
GT Advanced Technologies, Inc. | 2.9 | ||||||
OM Group, Inc. | 2.9 | ||||||
Yingli Green Energy Holding Co. Ltd. ADR | 2.7 | ||||||
SunPower Corp. | 2.7 | ||||||
Total | 31.4 |
41
Manager's Analysis (Continued)
PowerShares WilderHill Clean Energy Portfolio (ticker: PBW)
Growth of a $10,000 Investment Since Inception†
Fund Performance History (%) As of April 30, 2013
3 Years | 3 Years | 5 Years | 5 Years | Fund Inception† | |||||||||||||||||||||||||||
1 Year | Avg. Ann.†† | Cumulative | Avg. Ann.†† | Cumulative | Avg. Ann.†† | Cumulative | |||||||||||||||||||||||||
Index | |||||||||||||||||||||||||||||||
WilderHill Clean Energy Index | -4.10 | % | -21.14 | % | -50.96 | % | -25.21 | % | -76.60 | % | -13.42 | % | -69.14 | % | |||||||||||||||||
NASDAQ Composite Index | 9.27 | % | 10.59 | % | 35.25 | % | 6.65 | % | 37.96 | % | 6.11 | % | 62.25 | % | |||||||||||||||||
S&P 500® Index | 16.89 | % | 12.80 | % | 43.54 | % | 5.21 | % | 28.92 | % | 5.72 | % | 57.50 | % | |||||||||||||||||
Fund | |||||||||||||||||||||||||||||||
NAV Return | -2.64 | % | -20.63 | % | -50.00 | % | -24.73 | % | -75.83 | % | -12.87 | % | -67.50 | % | |||||||||||||||||
Market Price Return | -2.65 | % | -20.60 | % | -49.95 | % | -24.73 | % | -75.83 | % | -12.86 | % | -67.48 | % |
Fund Inception: March 3, 2005
Performance quoted above represents past performance. Past performance is not a guarantee of future results and current performance may be higher or lower than performance quoted. Investment returns and principal value will fluctuate, and shares of the Fund ("Fund Shares"), when redeemed or sold, may be worth more or less than their original cost. Had the adviser not waived fees and/or reimbursed expenses, performance would have been lower. The adviser has contractually agreed to waive fees and/or pay certain Fund expenses through August 31, 2014. According to the Fund's current prospectus, the total gross annual operating expense ratio was indicated as 0.76%. The Financial Highlights section of the Shareholders Report presents the expense ratios based on expenses incurred during the period covered by this report. NAV and Market Price returns assume that dividends and capital gain distributions have been reinvested in the Fund at NAV and Market 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.
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.
† Fund and Index returns are based on the inception date of the Fund. Returns for the Benchmark Indices are based on the closest month-end to the Fund's inception date.
†† Average annualized.
42
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Manager's Analysis
PowerShares WilderHill Progressive Energy Portfolio (ticker: PUW)
As an index fund, the PowerShares WilderHill Progressive Energy Portfolio (the "Fund") is passively managed and attempts to track the returns of an underlying index. The Fund seeks investment results that generally correspond (before fees and expenses) to the price and yield of the WilderHill Progressive Energy Index (the "Index"). The Fund generally will invest at least 90% of its total assets in common stocks of companies engaged principally in the progressive energy business that comprise the Index.
The Index is composed of securities from a universe of companies that are listed on a major U.S. stock exchange (NYSE, NYSE MKT or NASDAQ), and engage in a business or businesses that the Index Provider believes may substantially benefit from a societal shift toward the transitional energy technologies significant in improving the use of fossil fuels and nuclear power. Also provide for improvements in alternative fuels, emissions reduction, efficiency, or innovation in energy materials, production, and use, have a three-month average market capitalization of at least $150 million and three-month average closing price above $1.00 if not currently in the Index. The Index is calculated using a modified equal dollar weighting methodology. Component securities and weights are determined by their respective sector and size. Each Sector is assigned an aggregate weight within the index. Components less than $400 million in total market capitalization are set to one-half of a percent weight. The remaining components in each Sector are equally weighted using Sector weightings minus the sum of the weights of stocks less than $400 million in market capitalization. Sector weightings were initially determined by the index provider and are reviewed each quarter in conjunction with the scheduled quarterly review of the Index. At each rebalancing, no component may exceed five percent of the weight of the Index.
For the fiscal year ended April 30, 2013, on a market price basis, the Fund returned 7.38%. On a net asset value ("NAV") basis, the Fund returned 7.38%. During the same time period, the Index returned 8.68%. During the fiscal year, the Fund fully replicated the components of the Index; therefore, the Fund's performance differed from the return of the Index primarily due to fees and operating expenses that the Fund incurred during the period.
During this same time period, the NASDAQ Composite Index returned 9.27%, and the S&P 500® Index returned 16.89%. The NASDAQ Composite Index and S&P 500® Index (the "Benchmark Indices") are unmanaged indices weighted by market capitalization based on the average performance of approximately 2,439 and 500 securities, respectively. The adviser provided these additional comparative benchmarks to help investors better understand how the investment results of the Fund compare to the performance of broad-based market benchmarks.
The NASDAQ Composite Index and S&P 500® Index do not have the specific progressive energy sector relevance; however, their performance comparison is a useful measure for investors as a broad representation of the overall U.S. stock market.
The performance of the Fund differed from these Benchmark Indices because the Fund tracks an index that focus on progressive energy and employs a proprietary weighting and stock selection methodology, whereas the Benchmark Indices do not focus on progressive energy and select and weight stocks based on market capitalization. Relative to the NASDAQ Composite Index, the Fund had poor stock selection in the Utilities sector and had no exposure to the Health Care sector, which was the best performing sector of the Benchmark during the fiscal year ended April 30, 2013. The majority of the Fund's underperformance relative to the NASDAQ Composite Index during that period can be attributed to these sector allocations.
44
Manager's Analysis (Continued)
PowerShares WilderHill Progressive Energy Portfolio (ticker: PUW)
Relative to the S&P 500® Index, the Fund had poor stock selection in the Utilities sector and had no exposure to the Health Care sector, which was the best performing sector of the Benchmark during the fiscal year ended April 30, 2013. The majority of the Fund's underperformance relative to the S&P 500® Index during that period can be attributed to these sector allocations.
For the fiscal year ended April 30, 2013, the Miscellaneous Manufacturing industry contributed most significantly to the Fund's return, followed by the Electronics and Building Materials industries, respectively. The Electric industry detracted most from the Fund's return, followed by the Mining and Energy-Alternate Sources industries, respectively.
Positions that contributed most significantly to the Fund's return included Apogee Enterprises, Inc., a building materials company (portfolio average weight of 1.92%); and A.O. Smith Corp., a miscellaneous manufacturing company (portfolio average weight of 2.27%). Positions that detracted most significantly from the Fund's return included Centrais Eletricas Brasileiras SA ADR, an electric company (portfolio average weight of 1.82%); and EnergySolutions, Inc., an environmental control company (portfolio average weight of 0.40%).
Industry Breakdown (% of the Fund's
Net Assets) as of April 30, 2013
Electrical Components & Equipment | 12.9 | ||||||
Miscellaneous Manufacturing | 11.1 | ||||||
Chemicals | 8.7 | ||||||
Auto Parts & Equipment | 6.9 | ||||||
Oil & Gas | 6.6 | ||||||
Engineering & Construction | 6.2 | ||||||
Electric | 6.0 | ||||||
Electronics | 5.8 | ||||||
Environmental Control | 5.2 | ||||||
Mining | 5.0 | ||||||
Machinery-Diversified | 4.9 | ||||||
Building Materials | 4.2 | ||||||
Energy-Alternate Sources | 2.8 | ||||||
Agriculture | 2.4 | ||||||
Semiconductors | 2.4 | ||||||
Telecommunications | 2.4 | ||||||
Auto Manufacturers | 2.4 | ||||||
Transportation | 2.1 | ||||||
Hand/Machine Tools | 2.0 | ||||||
Money Market Fund | 0.2 | ||||||
Liabilities in excess of other assets | (0.2 | ) |
Top Ten Fund Holdings (% of the Fund's
Net Assets) as of April 30, 2013
Security | |||||||
Andersons, Inc. (The) | 2.4 | ||||||
Methanex Corp. | 2.4 | ||||||
Veeco Instruments, Inc. | 2.4 | ||||||
Corning, Inc. | 2.4 | ||||||
Tata Motors Ltd. ADR | 2.4 | ||||||
Westport Innovations, Inc. | 2.4 | ||||||
Owens Corning | 2.3 | ||||||
Companhia Energetica de Minas Gerais ADR | 2.3 | ||||||
Chart Industries, Inc. | 2.3 | ||||||
Southwestern Energy Co. | 2.3 | ||||||
Total | 23.6 |
45
Manager's Analysis (Continued)
PowerShares WilderHill Progressive Energy Portfolio (ticker: PUW)
Growth of a $10,000 Investment Since Inception†
Fund Performance History (%) As of April 30, 2013
3 Years | 3 Years | 5 Years | 5 Years | Fund Inception† | |||||||||||||||||||||||||||
1 Year | Avg. Ann.†† | Cumulative | Avg. Ann.†† | Cumulative | Avg. Ann.†† | Cumulative | |||||||||||||||||||||||||
Index | |||||||||||||||||||||||||||||||
Wilderhill Progressive Energy Index | 8.68 | % | 4.89 | % | 15.41 | % | 1.15 | % | 5.87 | % | 3.06 | % | 21.72 | % | |||||||||||||||||
NASDAQ Composite Index | 9.27 | % | 10.59 | % | 35.25 | % | 6.65 | % | 37.96 | % | 5.39 | % | 40.65 | % | |||||||||||||||||
S&P 500® Index | 16.89 | % | 12.80 | % | 43.54 | % | 5.21 | % | 28.92 | % | 4.54 | % | 33.45 | % | |||||||||||||||||
Fund | |||||||||||||||||||||||||||||||
NAV Return | 7.38 | % | 3.85 | % | 11.99 | % | 0.20 | % | 0.98 | % | 2.17 | % | 15.02 | % | |||||||||||||||||
Market Price Return | 7.38 | % | 3.84 | % | 11.95 | % | 0.21 | % | 1.05 | % | 2.17 | % | 15.03 | % |
Fund Inception: October 24, 2006
Performance quoted above represents past performance. Past performance is not a guarantee of future results and current performance may be higher or lower than performance quoted. Investment returns and principal value will fluctuate, and shares of the Fund ("Fund Shares"), when redeemed or sold, may be worth more or less than their original cost. Had the adviser not waived fees and/or reimbursed expenses, performance would have been lower. The adviser has contractually agreed to waive fees and/or pay certain Fund expenses through August 31, 2014. According to the Fund's current prospectus, the total gross annual operating expense ratio was indicated as 0.86%. The Financial Highlights section of the Shareholders Report presents the expense ratios based on expenses incurred during the period covered by this report. NAV and Market Price returns assume that dividends and capital gain distributions have been reinvested in the Fund at NAV and Market 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.
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.
† Fund and Index returns are based on the inception date of the Fund. Returns for the Benchmark Indices are based on the closest month-end to the Fund's inception date.
†† Average annualized.
46
Fees and Expenses
As a shareholder of a Fund of the PowerShares Exchange-Traded Fund Trust, (excluding PowerShares S&P 500 BuyWrite Portfolio), you incur advisory fees and other Fund expenses. As a shareholder of a Fund of the PowerShares S&P 500 BuyWrite Portfolio, you incur a unitary management fee. In addition to the unitary management fee, a shareholder may pay distribution fees, if any, brokerage expenses, taxes, interest, litigation expenses, acquired fund fees and expenses, if any and extraordinary 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 ended April 30, 2013.
In pursuing their investment objectives, PowerShares DWA Technical LeadersTM Portfolio, PowerShares Global Listed Private Equity Portfolio and PowerShares Lux Nanotech Portfolio (the "Portfolios") may invest a portion of their assets in investment companies. Each Portfolio indirectly bears a pro rata share of the fees and expenses of the investment companies in which each Portfolio invests. The effect of such expenses are included in each Portfolio's total return.
Actual Expenses
The first line in the following table 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 table provides information about hypothetical account values and hypothetical expenses based on each Fund's actual expense ratio and an assumed annualized rate of return of 5% per year before expenses, which is not the Fund's 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 table are meant to highlight your ongoing costs only, and do not reflect any transactional costs, such as sales charges and brokerage commissions. 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, expenses shown in the table do not include the expenses of the underlying funds, which are borne indirectly by the Fund. If transaction costs and indirect expenses were included, your costs would have been higher.
Beginning Account Value November 1, 2012 | Ending Account Value April 30, 2013 | Annualized Expense Ratio Based on the Six-Month Period | Expenses Paid During the Six-Month Period (1) | ||||||||||||||||
PowerShares Aerospace & Defense Portfolio (PPA) Actual | $ | 1,000.00 | $ | 1,164.09 | 0.66 | % | $ | 3.54 | |||||||||||
Hypothetical (5% return before expenses) | $ | 1,000.00 | $ | 1,021.52 | 0.66 | % | $ | 3.31 |
47
Fees and Expenses (Continued)
Beginning Account Value November 1, 2012 | Ending Account Value April 30, 2013 | Annualized Expense Ratio Based on the Six-Month Period | Expenses Paid During the Six-Month Period (1) | ||||||||||||||||
PowerShares CleantechTM Portfolio (PZD) Actual | $ | 1,000.00 | $ | 1,183.62 | 0.67 | % | $ | 3.63 | |||||||||||
Hypothetical (5% return before expenses) | $ | 1,000.00 | $ | 1,021.47 | 0.67 | % | $ | 3.36 | |||||||||||
PowerShares DWA Technical LeadersTM Portfolio (PDP) Actual | $ | 1,000.00 | $ | 1,166.34 | 0.68 | % | $ | 3.65 | |||||||||||
Hypothetical (5% return before expenses) | $ | 1,000.00 | $ | 1,021.42 | 0.68 | % | $ | 3.41 | |||||||||||
PowerShares Global Listed Private Equity Portfolio (PSP) Actual | $ | 1,000.00 | $ | 1,246.25 | 0.70 | % | $ | 3.90 | |||||||||||
Hypothetical (5% return before expenses) | $ | 1,000.00 | $ | 1,021.32 | 0.70 | % | $ | 3.51 | |||||||||||
PowerShares Golden Dragon China Portfolio (PGJ) Actual | $ | 1,000.00 | $ | 1,053.99 | 0.70 | % | $ | 3.56 | |||||||||||
Hypothetical (5% return before expenses) | $ | 1,000.00 | $ | 1,021.32 | 0.70 | % | $ | 3.51 | |||||||||||
PowerShares Lux Nanotech Portfolio (PXN) Actual | $ | 1,000.00 | $ | 1,154.45 | 0.70 | % | $ | 3.74 | |||||||||||
Hypothetical (5% return before expenses) | $ | 1,000.00 | $ | 1,021.32 | 0.70 | % | $ | 3.51 | |||||||||||
PowerShares S&P 500 BuyWrite Portfolio (PBP) Actual | $ | 1,000.00 | $ | 1,040.29 | 0.75 | % | $ | 3.79 | |||||||||||
Hypothetical (5% return before expenses) | $ | 1,000.00 | $ | 1,021.08 | 0.75 | % | $ | 3.76 | |||||||||||
PowerShares S&P 500® High Quality Portfolio (SPHQ) Actual | $ | 1,000.00 | $ | 1,160.28 | 0.31 | % | $ | 1.66 | |||||||||||
Hypothetical (5% return before expenses) | $ | 1,000.00 | $ | 1,023.26 | 0.31 | % | $ | 1.56 | |||||||||||
PowerShares Water Resources Portfolio (PHO) Actual | $ | 1,000.00 | $ | 1,129.52 | 0.60 | % | $ | 3.17 | |||||||||||
Hypothetical (5% return before expenses) | $ | 1,000.00 | $ | 1,021.82 | 0.60 | % | $ | 3.01 | |||||||||||
PowerShares WilderHill Clean Energy Portfolio (PBW) Actual | $ | 1,000.00 | $ | 1,221.94 | 0.70 | % | $ | 3.86 | |||||||||||
Hypothetical (5% return before expenses) | $ | 1,000.00 | $ | 1,021.32 | 0.70 | % | $ | 3.51 | |||||||||||
PowerShares WilderHill Progressive Energy Portfolio (PUW) Actual | $ | 1,000.00 | $ | 1,123.70 | 0.71 | % | $ | 3.74 | |||||||||||
Hypothetical (5% return before expenses) | $ | 1,000.00 | $ | 1,021.27 | 0.71 | % | $ | 3.56 |
(1) Expenses are calculated using the annualized expense ratio, which represents the ongoing expenses as a percentage of net assets for the six-month period ended April 30, 2013. Expenses are calculated by multiplying the Fund's annualized expense ratio by the average account value for the period, then multiplying the result by 181/365. Expense ratios for the most recent six-month period may differ from expense ratios based on the annualized data in the Financial Highlights.
48
Schedule of Investments
PowerShares Aerospace & Defense Portfolio (PPA)
April 30, 2013
Number of Shares | Value | ||||||||||
Common Stocks—100.0% | |||||||||||
Aerospace/Defense—57.6% | |||||||||||
9,764 | AAR Corp. | $ | 174,385 | ||||||||
5,515 | Aerovironment, Inc.(a) | 106,770 | |||||||||
8,034 | Alliant Techsystems, Inc. | 597,408 | |||||||||
35,714 | Boeing Co. (The) | 3,264,617 | |||||||||
6,554 | Cubic Corp. | 281,625 | |||||||||
2,608 | Ducommun, Inc.(a) | 63,870 | |||||||||
7,597 | Esterline Technologies Corp.(a) | 570,079 | |||||||||
46,162 | Exelis, Inc. | 515,630 | |||||||||
14,882 | GenCorp, Inc.(a) | 194,508 | |||||||||
33,482 | General Dynamics Corp. | 2,476,329 | |||||||||
13,002 | HEICO Corp. | 572,218 | |||||||||
13,924 | Kratos Defense & Security Solutions, Inc.(a) | 70,873 | |||||||||
22,113 | L-3 Communications Holdings, Inc. | 1,796,681 | |||||||||
30,508 | Lockheed Martin Corp. | 3,023,038 | |||||||||
11,111 | Moog, Inc., Class A(a) | 513,439 | |||||||||
31,033 | Northrop Grumman Corp. | 2,350,439 | |||||||||
14,636 | Orbital Sciences Corp.(a) | 263,741 | |||||||||
37,023 | Raytheon Co. | 2,272,472 | |||||||||
29,920 | Rockwell Collins, Inc. | 1,882,566 | |||||||||
9,143 | Teledyne Technologies, Inc.(a) | 686,274 | |||||||||
12,267 | TransDigm Group, Inc. | 1,800,796 | |||||||||
12,287 | Triumph Group, Inc. | 981,731 | |||||||||
32,367 | United Technologies Corp. | 2,954,783 | |||||||||
27,414,272 | |||||||||||
Auto Manufacturers—1.8% | |||||||||||
21,417 | Oshkosh Corp.(a) | 840,832 | |||||||||
Commercial Services—3.8% | |||||||||||
35,745 | Booz Allen Hamilton Holding Corp. | 542,967 | |||||||||
83,809 | SAIC, Inc. | 1,252,106 | |||||||||
1,795,073 | |||||||||||
Computers—4.8% | |||||||||||
5,641 | CACI International, Inc., Class A(a) | 329,942 | |||||||||
37,626 | Computer Sciences Corp. | 1,762,778 | |||||||||
8,954 | KEYW Holding Corp. (The)(a) | 121,685 | |||||||||
7,931 | Mercury Systems, Inc.(a) | 61,307 | |||||||||
2,275,712 | |||||||||||
Electronics—9.1% | |||||||||||
1,999 | American Science & Engineering, Inc. | 128,896 | |||||||||
35,459 | FLIR Systems, Inc. | 862,008 | |||||||||
40,288 | Honeywell International, Inc. | 2,962,780 | |||||||||
4,917 | OSI Systems, Inc.(a) | 281,744 | |||||||||
12,957 | Taser International, Inc.(a) | 114,151 | |||||||||
4,349,579 | |||||||||||
Engineering & Construction—1.9% | |||||||||||
4,127 | Engility Holdings, Inc.(a) | 98,883 | |||||||||
18,881 | URS Corp. | 829,253 | |||||||||
928,136 |
Number of Shares | Value | ||||||||||
Common Stocks (Continued) | |||||||||||
Metal Fabricate/Hardware—5.6% | |||||||||||
13,851 | Precision Castparts Corp. | $ | 2,649,558 | ||||||||
Miscellaneous Manufacturing—4.9% | |||||||||||
24,587 | Hexcel Corp.(a) | 749,903 | |||||||||
61,046 | Textron, Inc. | 1,571,935 | |||||||||
2,321,838 | |||||||||||
Packaging & Containers—3.4% | |||||||||||
36,634 | Ball Corp. | 1,616,292 | |||||||||
Shipbuilding—1.3% | |||||||||||
12,161 | Huntington Ingalls Industries, Inc. | 643,317 | |||||||||
Software—0.5% | |||||||||||
9,081 | ManTech International Corp., Class A | 242,372 | |||||||||
Telecommunications—5.3% | |||||||||||
3,227 | Anaren, Inc.(a) | 75,544 | |||||||||
4,124 | Comtech Telecommunications Corp. | 101,491 | |||||||||
18,057 | DigitalGlobe, Inc.(a) | 527,084 | |||||||||
27,665 | Harris Corp. | 1,278,123 | |||||||||
10,921 | ViaSat, Inc.(a) | 529,341 | |||||||||
2,511,583 | |||||||||||
Total Common Stocks (Cost $48,478,840) | 47,588,564 | ||||||||||
Money Market Fund—0.2% | |||||||||||
89,576 | Goldman Sachs Financial Square Prime Obligations—Institutional Share Class (Cost $89,576) | 89,576 | |||||||||
Total Investments (Cost $48,568,416)—100.2% | 47,678,140 | ||||||||||
Liabilities in excess of other assets—(0.2)% | (71,555 | ) | |||||||||
Net Assets—100.0% | $ | 47,606,585 |
Notes to Schedule of Investments:
(a) Non-income producing security.
See Notes to Financial Statements.
49
Schedule of Investments
PowerShares CleantechTM Portfolio (PZD)
April 30, 2013
Number of Shares | Value | ||||||||||
Common Stocks—99.7% | |||||||||||
Auto Parts & Equipment—7.6% | |||||||||||
28,799 | BorgWarner, Inc.(a) | $ | 2,251,218 | ||||||||
25,115 | Fuel Systems Solutions, Inc.(a) | 394,556 | |||||||||
64,297 | Johnson Controls, Inc. | 2,251,038 | |||||||||
15,655 | Westport Innovations, Inc. (Canada)(a)(b) | 489,175 | |||||||||
5,385,987 | |||||||||||
Biotechnology—3.1% | |||||||||||
63,999 | Novozymes A/S, Class B (Denmark) | 2,212,540 | |||||||||
Building Materials—1.9% | |||||||||||
88,921 | Kingspan Group PLC (Ireland) | 1,075,148 | |||||||||
16,630 | WaterFurnace Renewable Energy, Inc. (Canada) | 265,194 | |||||||||
1,340,342 | |||||||||||
Chemicals—5.2% | |||||||||||
627 | Gurit Holding AG (Switzerland) | 255,808 | |||||||||
36,986 | Koninklijke DSM NV (Netherlands) | 2,385,942 | |||||||||
32,269 | SGL Carbon SE (Germany)(b) | 1,103,152 | |||||||||
3,744,902 | |||||||||||
Commercial Services—3.1% | |||||||||||
914 | SGS SA, Registered Shares (Switzerland) | 2,210,838 | |||||||||
Computers—0.7% | |||||||||||
21,799 | FleetMarics Group PLC (Ireland)(a) | 511,623 | |||||||||
Electric—3.3% | |||||||||||
43,259 | Ameresco, Inc., Class A(a) | 318,819 | |||||||||
9,352,008 | Energy Development Corp. (Philippines) | 1,479,144 | |||||||||
26,078 | Ormat Technologies, Inc.(b) | 566,936 | |||||||||
2,364,899 | |||||||||||
Electrical Components & Equipment—9.9% | |||||||||||
29,919 | Advanced Energy Industries, Inc.(a) | 508,025 | |||||||||
957,945 | China High Speed Transmission Equipment Group Co. Ltd. (China)(a) | 462,889 | |||||||||
25,151 | EnerSys(a) | 1,152,922 | |||||||||
160,051 | Gamesa Corp. Tecnologica SA (Spain) | 626,914 | |||||||||
19,918 | Saft Groupe SA (France) | 490,797 | |||||||||
30,853 | Schneider Electric SA (France) | 2,355,175 | |||||||||
17,875 | SMA Solar Technology AG (Germany) | 443,048 | |||||||||
115,039 | Vestas Wind Systems A/S (Denmark)(a)(b) | 998,031 | |||||||||
7,037,801 | |||||||||||
Electronics—8.3% | |||||||||||
10,582 | Badger Meter, Inc. | 462,222 | |||||||||
17,742 | ESCO Technologies, Inc. | 638,180 | |||||||||
24,896 | Horiba Ltd. (Japan) | 899,640 | |||||||||
20,912 | Itron, Inc.(a)(b) | 829,161 | |||||||||
66,817 | Trimble Navigation Ltd.(a) | 1,920,320 | |||||||||
32,899 | Woodward, Inc. | 1,184,035 | |||||||||
5,933,558 |
Number of Shares | Value | ||||||||||
Common Stocks (Continued) | |||||||||||
Energy - Alternate Sources—1.9% | |||||||||||
6,551,909 | GCL-Poly Energy Holdings Ltd. (Cayman Islands) | $ | 1,325,477 | ||||||||
Engineering & Construction—6.1% | |||||||||||
99,074 | ABB Ltd. (Switzerland) | 2,245,016 | |||||||||
28,843 | Aegion Corp.(a) | 607,434 | |||||||||
40,004 | Arcadis NV (Netherlands) | 1,107,831 | |||||||||
20,729 | Mistras Group, Inc.(a) | 392,814 | |||||||||
4,353,095 | |||||||||||
Environmental Control—5.5% | |||||||||||
23,068 | Asahi Holdings, Inc. (Japan) | 466,996 | |||||||||
492,930 | Hyflux Ltd. (Singapore) | 548,300 | |||||||||
59,118 | Kurita Water Industries Ltd. (Japan) | 1,213,190 | |||||||||
30,671 | Tetra Tech, Inc.(a) | 806,341 | |||||||||
95,130 | Tomra Systems ASA (Norway)(b) | 892,301 | |||||||||
3,927,128 | |||||||||||
Hand/Machine Tools—0.5% | |||||||||||
57,916 | Meyer Burger Technology AG (Switzerland)(b) | 354,123 | |||||||||
Healthcare - Services—2.2% | |||||||||||
7,174 | Eurofins Scientific (France) | 1,560,604 | |||||||||
Machinery - Diversified—6.8% | |||||||||||
16,861 | Kadant, Inc. | 466,544 | |||||||||
8,162 | Lindsay Corp. | 627,005 | |||||||||
17,802 | Roper Industries, Inc. | 2,130,009 | |||||||||
59,117 | Xylem, Inc. | 1,640,497 | |||||||||
4,864,055 | |||||||||||
Mining—2.3% | |||||||||||
35,216 | Umicore SA (Belgium) | 1,631,972 | |||||||||
Miscellaneous Manufacturing—17.4% | |||||||||||
98,213 | Alfa Laval AB (Sweden) | 2,149,924 | |||||||||
24,557 | CLARCOR, Inc. | 1,269,597 | |||||||||
46,534 | Donaldson Co., Inc. | 1,692,907 | |||||||||
50,343 | Hexcel Corp.(a) | 1,535,461 | |||||||||
28,813 | Pall Corp. | 1,922,115 | |||||||||
23,909 | Polypore International, Inc.(a)(b) | 1,002,504 | |||||||||
23,232 | Raven Industries, Inc. | 779,434 | |||||||||
19,883 | Siemens AG (Germany) | 2,078,751 | |||||||||
12,430,693 | |||||||||||
Semiconductors—4.6% | |||||||||||
34,591 | Cree, Inc.(a) | 1,956,813 | |||||||||
157,655 | GT Advanced Technologies, Inc.(a)(b) | 619,584 | |||||||||
17,588 | Power Integrations, Inc. | 728,319 | |||||||||
3,304,716 |
See Notes to Financial Statements.
50
Schedule of Investments (Continued)
PowerShares CleantechTM Portfolio (PZD)
April 30, 2013
Number of Shares | Value | ||||||||||
Common Stocks (Continued) | |||||||||||
Software—5.8% | |||||||||||
24,892 | ANSYS, Inc.(a) | $ | 2,012,767 | ||||||||
53,160 | Autodesk, Inc.(a) | 2,093,441 | |||||||||
4,106,208 | |||||||||||
Telecommunications—3.5% | |||||||||||
171,410 | Corning, Inc. | 2,485,445 | |||||||||
Total Common Stocks (Cost $64,080,582) | 71,086,006 | ||||||||||
Rights—0.1% | |||||||||||
Hand/Machine Tools—0.1% | |||||||||||
57,916 | Meyer Burger Technology AG (Switzerland), expiring 06/07/13 (Cost $153,598) | 48,630 | |||||||||
Money Market Fund—0.0% | |||||||||||
30,097 | Goldman Sachs Financial Square Prime Obligations—Institutional Share Class (Cost $30,097) | 30,097 | |||||||||
Total Investments (excluding investments purchased with cash collateral from securities on loan) (Cost $64,264,277)—99.8% | 71,164,733 | ||||||||||
Investments Purchased with Cash Collateral from Securities on Loan | |||||||||||
Money Market Fund—6.8% | |||||||||||
4,859,640 | Invesco Liquid Assets Portfolio— Institutional Class (Cost $4,859,640)(c)(d) | 4,859,640 | |||||||||
Total Investments (Cost $69,123,917)—106.6% | 76,024,373 | ||||||||||
Liabilities in excess of other assets—6.6% | (4,710,324 | ) | |||||||||
Net Assets—100.0% | $ | 71,314,049 |
Notes to Schedule of Investments:
(a) Non-income producing security.
(b) All or a portion of this security was out on loan at April 30, 2013.
(c) The security has been segregated to satisfy the commitment to return the cash collateral received in securities lending transactions upon the borrower's return of the securities loaned. See Note 2J.
(d) The security and the Fund are advised by wholly owned subsidiaries of Invesco Ltd. and are therefore considered to be affiliated.
See Notes to Financial Statements.
51
Schedule of Investments
PowerShares DWA Technical LeadersTM Portfolio (PDP)
April 30, 2013
Number of Shares | Value | ||||||||||
Common Stocks and Other Equity Interests—100.0% | |||||||||||
Consumer Discretionary—17.2% | |||||||||||
15,940 | Amazon.com, Inc.(a) | $ | 4,045,731 | ||||||||
141,330 | Brinker International, Inc. | 5,497,737 | |||||||||
157,693 | CBS Corp., Class B | 7,219,186 | |||||||||
20,969 | Chipotle Mexican Grill, Inc.(a) | 7,615,731 | |||||||||
79,786 | Discovery Communications, Inc., Class A(a) | 6,288,732 | |||||||||
109,620 | Jarden Corp.(a) | 4,933,996 | |||||||||
318,970 | Liberty Interactive Corp., Class A(a) | 6,790,871 | |||||||||
104,165 | Macy's, Inc. | 4,645,759 | |||||||||
32,870 | Panera Bread Co., Class A(a) | 5,825,550 | |||||||||
63,931 | Polaris Industries, Inc. | 5,510,213 | |||||||||
245,239 | PulteGroup, Inc.(a) | 5,147,567 | |||||||||
42,024 | PVH Corp. | 4,849,990 | |||||||||
292,974 | Service Corp. International | 4,945,401 | |||||||||
90,526 | Signet Jewelers Ltd. (United Kingdom) | 6,221,852 | |||||||||
986,070 | Starz - Liberty Capital(a) | 23,054,317 | |||||||||
340,794 | TRW Automotive Holdings Corp.(a) | 20,471,496 | |||||||||
47,706 | VF Corp. | 8,502,163 | |||||||||
172,784 | Virgin Media, Inc. | 8,428,403 | |||||||||
185,570 | Wyndham Worldwide Corp. | 11,149,046 | |||||||||
151,143,741 | |||||||||||
Consumer Staples—4.5% | |||||||||||
87,202 | Brown-Forman Corp., Class B | 6,147,741 | |||||||||
211,313 | Church & Dwight Co., Inc. | 13,500,788 | |||||||||
397,392 | Dean Foods Co.(a) | 7,606,083 | |||||||||
143,884 | Hormel Foods Corp. | 5,938,093 | |||||||||
56,685 | J.M. Smucker Co. (The) | 5,851,592 | |||||||||
39,044,297 | |||||||||||
Energy—3.1% | |||||||||||
185,059 | Cheniere Energy, Inc.(a) | 5,270,480 | |||||||||
49,303 | Continental Resources, Inc.(a) | 3,940,296 | |||||||||
168,032 | EQT Corp. | 12,622,564 | |||||||||
45,263 | Pioneer Natural Resources Co. | 5,532,496 | |||||||||
27,365,836 | |||||||||||
Financials—24.8% | |||||||||||
65,410 | ACE Ltd. | 5,830,648 | |||||||||
30,949 | Affiliated Managers Group, Inc.(a) | 4,818,140 | |||||||||
1,139,672 | American Capital Ltd.(a) | 17,243,237 | |||||||||
287,689 | American Tower Corp. REIT | 24,162,999 | |||||||||
278,900 | Arch Capital Group Ltd.(a) | 14,798,434 | |||||||||
568,215 | CapitalSource, Inc. | 5,085,524 | |||||||||
102,512 | Discover Financial Services | 4,483,875 | |||||||||
107,173 | Extra Space Storage, Inc. REIT | 4,670,599 | |||||||||
60,593 | Federal Realty Investment Trust REIT | 7,089,987 | |||||||||
1,084,010 | General Growth Properties, Inc. REIT | 24,628,707 | |||||||||
167,650 | HCC Insurance Holdings, Inc. | 7,141,890 | |||||||||
105,955 | Macerich Co. (The) REIT | 7,422,148 | |||||||||
203,442 | ProAssurance Corp. | 9,966,624 | |||||||||
119,934 | Rayonier, Inc. REIT | 7,126,478 |
Number of Shares | Value | ||||||||||
Common Stocks and Other Equity Interests (Continued) | |||||||||||
112,859 | Realty Income Corp. REIT | $ | 5,752,423 | ||||||||
95,835 | RenaissanceRe Holdings Ltd. (Bermuda) | 8,997,948 | |||||||||
226,701 | Tanger Factory Outlet Centers, Inc. REIT | 8,415,141 | |||||||||
286,408 | Ventas, Inc. REIT | 22,806,669 | |||||||||
330,963 | W.R. Berkley Corp. | 14,370,414 | |||||||||
9,880 | White Mountains Insurance Group Ltd. | 5,713,703 | |||||||||
231,515 | XL Group PLC (Ireland) | 7,209,377 | |||||||||
217,734,965 | |||||||||||
Health Care—11.5% | |||||||||||
378,386 | Catamaran Corp. (Canada)(a) | 21,844,224 | |||||||||
52,594 | Cerner Corp.(a) | 5,089,521 | |||||||||
50,037 | Cooper Cos., Inc. (The) | 5,524,085 | |||||||||
422,541 | Gilead Sciences, Inc.(a) | 21,397,476 | |||||||||
156,247 | Henry Schein, Inc.(a) | 14,124,729 | |||||||||
24,955 | Mettler-Toledo International, Inc.(a) | 5,214,597 | |||||||||
65,295 | Perrigo Co. | 7,796,876 | |||||||||
69,813 | Regeneron Pharmaceuticals, Inc.(a) | 15,019,569 | |||||||||
62,993 | Sirona Dental Systems, Inc.(a) | 4,632,505 | |||||||||
100,643,582 | |||||||||||
Industrials—15.9% | |||||||||||
96,152 | BE Aerospace, Inc.(a) | 6,032,576 | |||||||||
102,545 | Chicago Bridge & Iron Co. NV (Netherlands) | 5,515,896 | |||||||||
98,156 | Colfax Corp.(a) | 4,580,941 | |||||||||
170,439 | Copart, Inc.(a) | 6,007,975 | |||||||||
107,574 | Danaher Corp. | 6,555,560 | |||||||||
221,266 | Donaldson Co., Inc. | 8,049,657 | |||||||||
285,388 | J.B. Hunt Transport Services, Inc. | 20,282,525 | |||||||||
44,411 | Kansas City Southern | 4,843,908 | |||||||||
123,770 | Kirby Corp.(a) | 9,269,135 | |||||||||
62,993 | Lockheed Martin Corp. | 6,241,976 | |||||||||
111,836 | Nordson Corp. | 7,771,484 | |||||||||
91,464 | Pentair Ltd. (Switzerland) | 4,971,068 | |||||||||
101,349 | Roper Industries, Inc. | 12,126,408 | |||||||||
39,467 | TransDigm Group, Inc. | 5,793,756 | |||||||||
56,771 | Union Pacific Corp. | 8,399,837 | |||||||||
159,827 | United Rentals, Inc.(a) | 8,408,498 | |||||||||
40,063 | W.W. Grainger, Inc. | 9,874,328 | |||||||||
62,580 | WABCO Holdings, Inc.(a) | 4,520,153 | |||||||||
139,245,681 | |||||||||||
Information Technology—5.8% | |||||||||||
106,892 | Amphenol Corp., Class A | 8,072,484 | |||||||||
165,709 | ANSYS, Inc.(a) | 13,399,230 | |||||||||
56,685 | Fiserv, Inc.(a) | 5,164,570 | |||||||||
101,011 | Gartner, Inc.(a) | 5,843,486 | |||||||||
19,094 | MasterCard, Inc., Class A | 10,557,646 | |||||||||
86,179 | NetSuite, Inc.(a) | 7,580,305 | |||||||||
50,617,721 |
See Notes to Financial Statements.
52
Schedule of Investments (Continued)
PowerShares DWA Technical LeadersTM Portfolio (PDP)
April 30, 2013
Number of Shares | Value | ||||||||||
Common Stocks and Other Equity Interests (Continued) | |||||||||||
Materials—14.4% | |||||||||||
205,602 | Airgas, Inc. | $ | 19,871,433 | ||||||||
103,565 | Ashland, Inc. | 8,824,774 | |||||||||
290,076 | Ball Corp. | 12,798,153 | |||||||||
69,465 | Ecolab, Inc. | 5,878,128 | |||||||||
175,767 | FMC Corp. | 10,669,057 | |||||||||
66,062 | International Flavors & Fragrances, Inc. | 5,099,326 | |||||||||
121,043 | International Paper Co. | 5,686,600 | |||||||||
22,845 | NewMarket Corp. | 6,138,452 | |||||||||
122,070 | Rockwood Holdings, Inc. | 7,921,122 | |||||||||
134,213 | RPM International, Inc. | 4,348,501 | |||||||||
59,243 | Sherwin-Williams Co. (The) | 10,847,986 | |||||||||
97,306 | Sigma-Aldrich Corp. | 7,657,009 | |||||||||
107,148 | Valspar Corp. (The) | 6,838,186 | |||||||||
182,757 | W.R. Grace & Co.(a) | 14,092,392 | |||||||||
126,671,119 | |||||||||||
Utilities—2.8% | |||||||||||
165,368 | CMS Energy Corp. | 4,951,118 | |||||||||
174,148 | ONEOK, Inc. | 8,944,241 | |||||||||
65,891 | Sempra Energy | 5,459,069 | |||||||||
112,177 | Wisconsin Energy Corp. | 5,041,235 | |||||||||
24,395,663 | |||||||||||
Total Common Stocks and Other Equity Interests (Cost $748,492,157) | 876,862,605 | ||||||||||
Money Market Fund—0.1% | |||||||||||
784,862 | Goldman Sachs Financial Square Prime Obligations—Institutional Share Class (Cost $784,862) | 784,862 | |||||||||
Total Investments (Cost $749,277,019)—100.1% | 877,647,467 | ||||||||||
Liabilities in excess of other assets—(0.1)% | (718,504 | ) | |||||||||
Net Assets—100.0% | $ | 876,928,963 |
Investment Abbreviations:
REIT—Real Estate Investment Trust
Notes to Schedule of Investments:
(a) Non-income producing security.
See Notes to Financial Statements.
53
Schedule of Investments
PowerShares Global Listed Private Equity Portfolio (PSP)
April 30, 2013
Number of Shares | Value | ||||||||||
Common Stocks and Other Equity Interests(a)—90.3% | |||||||||||
Diversified Financial Services—9.9% | |||||||||||
2,081,706 | Brait SE (South Africa)(b) | $ | 8,496,097 | ||||||||
1,566,928 | Intermediate Capital Group PLC (United Kingdom) | 10,301,357 | |||||||||
122,848 | Medley Capital Corp. | 1,913,972 | |||||||||
76,454 | Partners Group Holding AG (Switzerland) | 19,628,913 | |||||||||
40,340,339 | |||||||||||
Holding Companies - Diversified—17.3% | |||||||||||
93,682 | Ackermans & van Haaren NV (Belgium) | 7,982,476 | |||||||||
175,713 | Compass Diversified Holdings | 2,971,307 | |||||||||
99,704 | Hal Trust (Netherlands) | 12,882,078 | |||||||||
265,602 | Investment AB Latour, Class B (Sweden) | 6,257,279 | |||||||||
725,200 | Leucadia National Corp. | 22,401,428 | |||||||||
114,427 | Schouw & Co. (Denmark) | 3,794,032 | |||||||||
132,620 | Wendel (France) | 14,382,852 | |||||||||
70,671,452 | |||||||||||
Internet—0.9% | |||||||||||
159,133 | ICG Group, Inc.(b) | 1,888,909 | |||||||||
124,005 | Safeguard Scientifics, Inc.(b) | 2,001,440 | |||||||||
3,890,349 | |||||||||||
Investment Companies—23.8% | |||||||||||
586,333 | Apollo Investment Corp. | 5,165,594 | |||||||||
605,670 | Ares Capital Corp. | 10,998,967 | |||||||||
1,299,540 | Better Capital PCC Ltd. (Guernsey)(b) | 2,912,551 | |||||||||
256,290 | BlackRock Kelso Capital Corp. | 2,550,086 | |||||||||
17,124 | Capital Southwest Corp. | 2,015,324 | |||||||||
1,318,000 | China Merchants China Direct Investments Ltd. (Hong Kong) | 2,031,193 | |||||||||
1,128,566 | DeA Capital SpA (Italy)(b) | 1,978,909 | |||||||||
192,909 | Electra Private Equity PLC (United Kingdom)(b) | 6,680,423 | |||||||||
360,159 | Fifth Street Finance Corp. | 3,976,155 | |||||||||
131,820 | Golub Capital BDC, Inc. | 2,323,987 | |||||||||
213,281 | HgCapital Trust PLC (United Kingdom) | 3,817,433 | |||||||||
407,030 | Hosken Consolidated Investments Ltd. (South Africa) | 5,115,970 | |||||||||
324,012 | JZ Capital Partners Ltd. (Guernsey) | 2,581,978 | |||||||||
122,177 | Main Street Capital Corp. | 3,672,641 | |||||||||
362,493 | MCG Capital Corp. | 1,863,214 | |||||||||
140,173 | MVC Capital, Inc. | 1,820,847 | |||||||||
162,480 | New Mountain Finance Corp. | 2,476,195 | |||||||||
235,589 | PennantPark Investment Corp. | 2,756,391 | |||||||||
431,159 | Princess Private Equity Holding Ltd. (Guernsey) | 3,836,971 | |||||||||
628,215 | Prospect Capital Corp. | 6,929,211 | |||||||||
1,318,595 | Ratos AB, Class B (Sweden) | 12,660,093 | |||||||||
165,865 | Solar Capital Ltd. | 3,969,149 | |||||||||
221,809 | TICC Capital Corp. | 2,255,798 | |||||||||
97,614 | Triangle Capital Corp. | 2,730,264 | |||||||||
97,119,344 |
Number of Shares | Value | ||||||||||
Common Stocks and Other Equity Interests(a) (Continued) | |||||||||||
Miscellaneous Manufacturing—5.9% | |||||||||||
12,768,500 | Fosun International Ltd. (China) | $ | 9,082,045 | ||||||||
3,938,141 | Melrose Industries PLC (United Kingdom) | 14,961,685 | |||||||||
24,043,730 | |||||||||||
Private Equity—32.0% | |||||||||||
3,155,680 | 3i Group PLC (United Kingdom) | 16,139,199 | |||||||||
251,865 | Altamir Amboise (France) | 2,965,286 | |||||||||
957,332 | American Capital Ltd.(b) | 14,484,433 | |||||||||
357,682 | Apollo Global Management LLC, Class A | 9,628,799 | |||||||||
46,242 | Aurelius AG (Germany) | 3,596,962 | |||||||||
609,548 | Bure Equity AB (Sweden) | 2,137,559 | |||||||||
325,632 | Carlyle Group (The) | 10,576,527 | |||||||||
94,616 | Deutsche Beteiligungs AG (Germany) | 2,299,614 | |||||||||
234,974 | Eurazeo (France) | 12,459,745 | |||||||||
117,964 | Gimv NV (Belgium) | 6,077,869 | |||||||||
1,015,198 | GP Investments Ltd. (Bermuda) | 2,467,548 | |||||||||
207,546 | Hercules Technology Growth Capital, Inc. | 2,760,362 | |||||||||
1,224,611 | IP Group PLC (United Kingdom)(b) | 2,954,278 | |||||||||
247,060 | JAFCO Co. Ltd. (Japan) | 11,945,926 | |||||||||
414,185 | Onex Corp. (Canada) | 20,691,750 | |||||||||
1,436,304 | SVG Capital PLC (United Kingdom)(b) | 8,899,385 | |||||||||
1,221,663 | Symphony International Holdings Ltd.(b) | 959,005 | |||||||||
131,044,247 | |||||||||||
Water—0.5% | |||||||||||
87,051 | PICO Holdings, Inc.(b) | 1,889,007 | |||||||||
Total Common Stocks and Other Equity Interests (Cost $306,891,317) | 368,998,468 | ||||||||||
Money Market Fund—9.0% | |||||||||||
36,735,109 | Goldman Sachs Financial Square Prime Obligations—Institutional Share Class (Cost $36,735,109) | 36,735,109 | |||||||||
Total Investments (Cost $343,626,426)—99.3% | 405,733,577 | ||||||||||
Other assets less liabilities—0.7% | 2,757,930 | ||||||||||
Net Assets—100.0% | $ | 408,491,507 |
Notes to Schedule of Investments:
(a) Except as otherwise noted, a portion of all securities in the portfolio are subject to swap agreements. See Note 2I and Note 6.
(b) Non-income producing security.
This Fund has holdings greater than 10% of net assets in the following countries:
United Kingdom 15.6%
See Notes to Financial Statements.
54
Schedule of Investments
PowerShares Golden Dragon China Portfolio (PGJ)
April 30, 2013
Number of Shares | Value | ||||||||||
Common Stocks and Other Equity Interests—100.0% | |||||||||||
Bermuda—1.0% | |||||||||||
125,223 | China Yuchai International Ltd. | $ | 1,788,185 | ||||||||
British Virgin Islands—1.5% | |||||||||||
187,768 | Hollysys Automation Technologies Ltd.(a)(b) | 2,260,727 | |||||||||
290,626 | Renesola Ltd. ADR(a)(b) | 505,689 | |||||||||
2,766,416 | |||||||||||
Canada—0.9% | |||||||||||
572,491 | Silvercorp Metals, Inc.(a) | 1,677,399 | |||||||||
Cayman Islands—26.9% | |||||||||||
122,540 | 21Vianet Group, Inc. ADR(b) | 1,107,761 | |||||||||
86,846 | AutoNavi Holdings Ltd. ADR(b) | 950,964 | |||||||||
50,937 | Bitauto Holdings Ltd. ADR(b) | 579,154 | |||||||||
36,093 | Changyou.com Ltd. ADR(a) | 1,046,697 | |||||||||
78,833 | China Lodging Group Ltd. ADR(b) | 1,201,415 | |||||||||
211,313 | China Ming Yang Wind Power Group Ltd. ADR(a)(b) | 264,141 | |||||||||
118,045 | CNinsure, Inc. ADR(a)(b) | 746,044 | |||||||||
185,126 | E-Commerce China Dangdang, Inc. ADR(a)(b) | 710,884 | |||||||||
219,627 | E-House China Holdings Ltd. ADR(a) | 1,019,069 | |||||||||
151,766 | ISoftStone Holdings Ltd. ADR(a)(b) | 657,147 | |||||||||
89,408 | JA Solar Holdings Co. Ltd. ADR(b) | 450,616 | |||||||||
461,064 | New Oriental Education & Technology Group, Inc. ADR(a) | 8,820,154 | |||||||||
80,663 | NQ Mobile, Inc. ADR(a)(b) | 696,122 | |||||||||
144,954 | Perfect World Co. Ltd. ADR | 1,736,549 | |||||||||
227,659 | Qihoo 360 Technology Co. Ltd. ADR(b) | 7,808,704 | |||||||||
49,219 | RDA Microelectronics, Inc. ADR | 469,549 | |||||||||
362,201 | Renren, Inc. ADR(b) | 1,014,163 | |||||||||
231,401 | Shanda Games Ltd. ADR(b) | 684,947 | |||||||||
85,022 | SouFun Holdings Ltd. ADR(a) | 2,175,713 | |||||||||
145,241 | Spreadtrum Communications, Inc. ADR(a) | 3,174,968 | |||||||||
114,714 | TAL Education Group ADR | 1,108,137 | |||||||||
247,234 | Trina Solar Ltd. ADR(a)(b) | 1,263,366 | |||||||||
132,065 | UTStarcom Holdings Corp(b) | 365,820 | |||||||||
228,398 | WuXi PharmaTech Cayman, Inc. ADR(b) | 4,355,550 | |||||||||
321,710 | Youku Tudou, Inc. ADR(a)(b) | 6,517,845 | |||||||||
48,925,479 | |||||||||||
China—47.7% | |||||||||||
36,724 | 51job, Inc. ADR(a)(b) | 2,115,302 | |||||||||
154,410 | Baidu, Inc. ADR(b) | 13,256,099 | |||||||||
145,201 | Canadian Solar, Inc.(a)(b) | 817,482 | |||||||||
42,671 | China Life Insurance Co. Ltd. ADR(a) | 1,778,527 | |||||||||
32,876 | China Petroleum & Chemical Corp. ADR | 3,634,771 | |||||||||
19,447 | China Telecom Corp. Ltd. ADR | 1,001,521 | |||||||||
363,281 | Ctrip.com International Ltd. ADR(a)(b) | 7,984,916 | |||||||||
466,791 | Giant Interactive Group, Inc. ADR(a)(b) | 3,496,265 | |||||||||
114,672 | Home Inns & Hotels Management, Inc. ADR(a)(b) | 2,857,626 |
Number of Shares | Value | ||||||||||
Common Stocks and Other Equity Interests (Continued) | |||||||||||
26,241 | Huaneng Power International, Inc. ADR | $ | 1,217,582 | ||||||||
86,623 | KongZhong Corp. ADR(b) | 519,738 | |||||||||
283,627 | LDK Solar Co. Ltd. ADR(b) | 374,388 | |||||||||
281,973 | Mindray Medical International Ltd. ADR(a) | 11,135,114 | |||||||||
239,844 | NetEase, Inc. ADR(a) | 13,524,803 | |||||||||
264,145 | Pactera Technology International Ltd. ADR(b) | 1,344,498 | |||||||||
41,972 | PetroChina Co. Ltd. ADR | 5,366,540 | |||||||||
215,209 | SINA Corp.(b) | 12,120,571 | |||||||||
184,792 | Sinovac Biotech Ltd.(a)(b) | 657,860 | |||||||||
440,176 | Suntech Power Holdings Co. Ltd. ADR(a)(b) | 303,721 | |||||||||
37,634 | Vipshop Holdings Ltd. ADR(a)(b) | 1,158,751 | |||||||||
148,395 | Xinyuan Real Estate Co. Ltd. ADR | 673,713 | |||||||||
43,371 | Yanzhou Coal Mining Co. Ltd. ADR(a) | 455,829 | |||||||||
346,614 | Yingli Green Energy Holding Co. Ltd. ADR(a)(b) | 873,467 | |||||||||
86,669,084 | |||||||||||
Hong Kong—13.5% | |||||||||||
255,733 | China Mobile Ltd. ADR(a) | 14,126,691 | |||||||||
166,564 | China Unicom (Hong Kong) Ltd. ADR | 2,403,519 | |||||||||
35,948 | CNOOC Ltd. ADR | 6,734,498 | |||||||||
150,189 | Nam Tai Electronics, Inc.(a) | 1,135,429 | |||||||||
24,400,137 | |||||||||||
United States—8.5% | |||||||||||
244,047 | AsiaInfo-Linkage, Inc.(b) | 2,801,660 | |||||||||
89,226 | China Biologic Products, Inc.(b) | 2,269,909 | |||||||||
151,295 | China HGS Real Estate, Inc.(a)(b) | 1,649,116 | |||||||||
53,334 | Chindex International, Inc.(b) | 730,676 | |||||||||
101,035 | Lihua International, Inc.(a) | 512,247 | |||||||||
26,179 | Sino Clean Energy, Inc. CVR(b) | 0 | |||||||||
128,050 | Sohu.com, Inc.(b) | 6,586,892 | |||||||||
175,254 | Yongye International, Inc.(a)(b) | 932,351 | |||||||||
15,482,851 | |||||||||||
Total Common Stocks and Other Equity Interests (Cost $184,051,589) | 181,709,551 | ||||||||||
Money Market Fund—0.2% | |||||||||||
387,113 | Goldman Sachs Financial Square Prime Obligations—Institutional Share Class (Cost $387,113) | 387,113 | |||||||||
Total Investments (excluding investments purchased with cash collateral from securities on loan) (Cost $184,438,702)—100.2% | 182,096,664 |
See Notes to Financial Statements.
55
Schedule of Investments (Continued)
PowerShares Golden Dragon China Portfolio (PGJ)
April 30, 2013
Number of Shares | Value | ||||||||||
Investments Purchased with Cash Collateral from Securities on Loan | |||||||||||
Money Market Fund—21.1% | |||||||||||
38,435,700 | Invesco Liquid Assets Portfolio— Institutional Class (Cost $38,435,700)(c)(d) | $ | 38,435,700 | ||||||||
Total Investments (Cost $222,874,402)—121.3% | 220,532,364 | ||||||||||
Liabilities in excess of other assets—(21.3)% | (38,788,123 | ) | |||||||||
Net Assets—100.0% | $ | 181,744,241 |
Investment Abbreviations:
ADR—American Depositary Receipt
Notes to Schedule of Investments:
(a) All or a portion of this security was out on loan at April 30, 2013.
(b) Non-income producing security.
(c) The security has been segregated to satisfy the commitment to return the cash collateral received in securities lending transactions upon the borrower's return of the securities loaned. See Note 2J.
(d) The security and the Fund are advised by wholly owned subsidiaries of Invesco Ltd. and are therefore considered to be affiliated.
See Notes to Financial Statements.
56
Schedule of Investments
PowerShares Lux Nanotech Portfolio (PXN)
April 30, 2013
Number of Shares | Value | ||||||||||
Common Stocks and Other Equity Interests—100.0% | |||||||||||
Auto Manufacturers—3.1% | |||||||||||
5,133 | Toyota Motor Corp. ADR (Japan) | $ | 596,968 | ||||||||
Auto Parts & Equipment—3.6% | |||||||||||
45,757 | Gentherm, Inc.(a) | 696,879 | |||||||||
Biotechnology—8.6% | |||||||||||
344,822 | Nanosphere, Inc.(a)(b) | 955,157 | |||||||||
198,050 | Vical, Inc.(a) | 730,804 | |||||||||
1,685,961 | |||||||||||
Building Materials—3.8% | |||||||||||
68,775 | Headwaters, Inc.(a) | 746,896 | |||||||||
Chemicals—5.7% | |||||||||||
6,100 | Air Products & Chemicals, Inc. | 530,456 | |||||||||
10,837 | E.I. du Pont de Nemours & Co. | 590,725 | |||||||||
1,121,181 | |||||||||||
Computers—9.1% | |||||||||||
23,172 | Hewlett-Packard Co. | 477,343 | |||||||||
2,517 | International Business Machines Corp. | 509,793 | |||||||||
131,039 | Maxwell Technologies, Inc.(a) | 799,338 | |||||||||
1,786,474 | |||||||||||
Electrical Components & Equipment—8.0% | |||||||||||
280,275 | American Superconductor Corp.(a) | 703,490 | |||||||||
210,805 | Research Frontiers, Inc.(a)(b) | 874,841 | |||||||||
1,578,331 | |||||||||||
Electronics—7.6% | |||||||||||
11,883 | FEI Co. | 759,086 | |||||||||
13,612 | NVE Corp.(a) | 722,389 | |||||||||
1,481,475 | |||||||||||
Engineering & Construction—2.5% | |||||||||||
24,268 | Layne Christensen Co.(a) | 495,795 | |||||||||
Healthcare - Products—3.9% | |||||||||||
28,805 | SurModics, Inc.(a) | 761,892 | |||||||||
Investment Companies—3.5% | |||||||||||
210,169 | Harris & Harris Group, Inc.(a) | 693,558 | |||||||||
Miscellaneous Manufacturing—9.3% | |||||||||||
5,016 | 3M Co. | 525,226 | |||||||||
22,846 | General Electric Co. | 509,237 | |||||||||
18,945 | Polypore International, Inc.(a)(b) | 794,364 | |||||||||
1,828,827 | |||||||||||
Pharmaceuticals—13.7% | |||||||||||
197,276 | BioDelivery Sciences International, Inc.(a) | 1,120,527 | |||||||||
64,571 | Elan Corp. PLC ADR (Ireland)(a) | 755,481 | |||||||||
165,400 | Flamel Technologies SA ADR (France)(a) | 818,730 | |||||||||
2,694,738 |
Number of Shares | Value | ||||||||||
Common Stocks and Other Equity Interests (Continued) | |||||||||||
Semiconductors—13.7% | |||||||||||
129,253 | EMCORE Corp.(a)(b) | $ | 564,836 | ||||||||
25,030 | Intel Corp. | 599,469 | |||||||||
50,413 | Nanometrics, Inc.(a) | 707,294 | |||||||||
21,702 | Veeco Instruments, Inc.(a) | 826,195 | |||||||||
2,697,794 | |||||||||||
Software—3.9% | |||||||||||
78,542 | Accelrys, Inc.(a) | 773,639 | |||||||||
Total Common Stocks and Other Equity Interests (Cost $19,113,379) | 19,640,408 | ||||||||||
Money Market Fund—0.4% | |||||||||||
81,266 | Goldman Sachs Financial Square Prime Obligations—Institutional Share Class (Cost $81,266) | 81,266 | |||||||||
Total Investments (excluding investments purchased with cash collateral from securities on loan) (Cost $19,194,645)—100.4% | 19,721,674 | ||||||||||
Investments Purchased with Cash Collateral from Securities on Loan | |||||||||||
Money Market Fund—7.5% | |||||||||||
1,466,100 | Invesco Liquid Assets Portfolio— Institutional Class (Cost $1,466,100)(c)(d) | 1,466,100 | |||||||||
Total Investments (Cost $20,660,745)—107.9% | 21,187,774 | ||||||||||
Liabilities in excess of other assets—(7.9)% | (1,552,693 | ) | |||||||||
Net Assets—100.0% | $ | 19,635,081 |
Investment Abbreviations:
ADR—American Depositary Receipt
Notes to Schedule of Investments:
(a) Non-income producing security.
(b) All or a portion of this security was out on loan at April 30, 2013
(c) The security has been segregated to satisfy the commitment to return the cash collateral received in securities lending transactions upon the borrower's return of the securities loaned. See Note 2J.
(d) The security and the Fund are advised by wholly owned subsidiaries of Invesco Ltd. and are therefore considered to be affiliated.
See Notes to Financial Statements.
57
Schedule of Investments
PowerShares S&P 500 BuyWrite Portfolio (PBP)
April 30, 2013
Number of Shares | Value | ||||||||||
Common Stocks and Other Equity Interests(a)—103.2% | |||||||||||
Consumer Discretionary—12.1% | |||||||||||
1,184 | Abercrombie & Fitch Co., Class A | $ | 58,679 | ||||||||
5,401 | Amazon.com, Inc.(b) | 1,370,828 | |||||||||
1,484 | Apollo Group, Inc., Class A(b) | 27,261 | |||||||||
575 | AutoNation, Inc.(b) | 26,168 | |||||||||
537 | AutoZone, Inc.(b) | 219,681 | |||||||||
3,365 | Bed Bath & Beyond, Inc.(b) | 231,512 | |||||||||
3,958 | Best Buy Co., Inc. | 102,868 | |||||||||
1,717 | BorgWarner, Inc.(b) | 134,218 | |||||||||
3,194 | Cablevision Systems Corp., Class A | 47,463 | |||||||||
3,398 | CarMax, Inc.(b) | 156,444 | |||||||||
6,603 | Carnival Corp. | 227,870 | |||||||||
8,707 | CBS Corp., Class B | 398,607 | |||||||||
462 | Chipotle Mexican Grill, Inc.(b) | 167,794 | |||||||||
4,180 | Coach, Inc. | 246,035 | |||||||||
39,194 | Comcast Corp., Class A | 1,618,712 | |||||||||
4,161 | D.R. Horton, Inc. | 108,519 | |||||||||
1,921 | Darden Restaurants, Inc. | 99,181 | |||||||||
4,364 | Delphi Automotive PLC (Jersey Islands) | 201,660 | |||||||||
8,511 | DIRECTV(b) | 481,382 | |||||||||
3,642 | Discovery Communications, Inc., Class A(b) | 287,062 | |||||||||
4,497 | Dollar General Corp.(b) | 234,249 | |||||||||
3,382 | Dollar Tree, Inc.(b) | 160,848 | |||||||||
1,391 | Expedia, Inc. | 77,673 | |||||||||
1,434 | Family Dollar Stores, Inc. | 88,005 | |||||||||
58,241 | Ford Motor Co. | 798,484 | |||||||||
795 | Fossil, Inc.(b) | 78,005 | |||||||||
1,805 | GameStop Corp., Class A | 62,995 | |||||||||
3,424 | Gannett Co., Inc. | 69,028 | |||||||||
4,428 | Gap, Inc. (The) | 168,220 | |||||||||
1,633 | Garmin Ltd. (Switzerland) | 57,286 | |||||||||
2,300 | Genuine Parts Co. | 175,559 | |||||||||
3,644 | Goodyear Tire & Rubber Co. (The)(b) | 45,532 | |||||||||
4,043 | H&R Block, Inc. | 112,153 | |||||||||
3,365 | Harley-Davidson, Inc. | 183,897 | |||||||||
1,012 | Harman International Industries, Inc. | 45,247 | |||||||||
1,700 | Hasbro, Inc. | 80,529 | |||||||||
22,201 | Home Depot, Inc. (The) | 1,628,443 | |||||||||
3,933 | International Game Technology | 66,664 | |||||||||
6,161 | Interpublic Group of Cos., Inc. (The) | 85,268 | |||||||||
2,117 | J.C. Penney Co., Inc. | 34,761 | |||||||||
10,176 | Johnson Controls, Inc. | 356,262 | |||||||||
3,148 | Kohl's Corp. | 148,145 | |||||||||
3,562 | L Brands, Inc. | 179,560 | |||||||||
2,121 | Leggett & Platt, Inc. | 68,381 | |||||||||
2,463 | Lennar Corp., Class A | 101,525 | |||||||||
16,481 | Lowe's Cos., Inc. | 633,200 | |||||||||
5,878 | Macy's, Inc. | 262,159 | |||||||||
3,630 | Marriott International, Inc., Class A | 156,308 | |||||||||
5,126 | Mattel, Inc. | 234,053 | |||||||||
14,889 | McDonald's Corp. | 1,520,763 |
Number of Shares | Value | ||||||||||
Common Stocks and Other Equity Interests(a) (Continued) | |||||||||||
836 | Netflix, Inc.(b) | $ | 180,635 | ||||||||
4,256 | Newell Rubbermaid, Inc. | 112,103 | |||||||||
29,693 | News Corp., Class A | 919,592 | |||||||||
10,772 | NIKE, Inc., Class B | 685,099 | |||||||||
2,232 | Nordstrom, Inc. | 126,309 | |||||||||
3,885 | Omnicom Group, Inc. | 232,206 | |||||||||
1,662 | O'Reilly Automotive, Inc.(b) | 178,366 | |||||||||
1,601 | PetSmart, Inc. | 109,252 | |||||||||
739 | Priceline.com, Inc.(b) | 514,337 | |||||||||
5,057 | PulteGroup, Inc.(b) | 106,146 | |||||||||
1,161 | PVH Corp. | 133,991 | |||||||||
898 | Ralph Lauren Corp. | 163,059 | |||||||||
3,305 | Ross Stores, Inc. | 218,361 | |||||||||
1,287 | Scripps Networks Interactive, Inc., Class A | 85,688 | |||||||||
10,024 | Staples, Inc. | 132,718 | |||||||||
11,124 | Starbucks Corp. | 676,784 | |||||||||
2,877 | Starwood Hotels & Resorts Worldwide, Inc. | 185,624 | |||||||||
9,664 | Target Corp. | 681,892 | |||||||||
1,773 | Tiffany & Co. | 130,635 | |||||||||
4,389 | Time Warner Cable, Inc. | 412,083 | |||||||||
13,879 | Time Warner, Inc. | 829,687 | |||||||||
10,829 | TJX Cos., Inc. (The) | 528,130 | |||||||||
1,641 | TripAdvisor, Inc.(b) | 86,284 | |||||||||
1,632 | Urban Outfitters, Inc.(b) | 67,630 | |||||||||
1,307 | VF Corp. | 232,934 | |||||||||
6,763 | Viacom, Inc., Class B | 432,764 | |||||||||
26,810 | Walt Disney Co. (The) | 1,684,740 | |||||||||
69 | Washington Post Co. (The), Class B | 30,590 | |||||||||
1,168 | Whirlpool Corp. | 133,479 | |||||||||
2,037 | Wyndham Worldwide Corp. | 122,383 | |||||||||
1,187 | Wynn Resorts Ltd. | 162,975 | |||||||||
6,706 | Yum! Brands, Inc. | 456,813 | |||||||||
24,878,435 | |||||||||||
Consumer Staples—11.4% | |||||||||||
29,843 | Altria Group, Inc. | 1,089,568 | |||||||||
9,794 | Archer-Daniels-Midland Co. | 332,408 | |||||||||
6,426 | Avon Products, Inc. | 148,826 | |||||||||
2,387 | Beam, Inc. | 154,463 | |||||||||
2,261 | Brown-Forman Corp., Class B | 159,400 | |||||||||
2,660 | Campbell Soup Co. | 123,451 | |||||||||
1,947 | Clorox Co. (The) | 167,929 | |||||||||
56,913 | Coca-Cola Co. (The) | 2,409,127 | |||||||||
3,901 | Coca-Cola Enterprises, Inc. | 142,894 | |||||||||
6,529 | Colgate-Palmolive Co. | 779,628 | |||||||||
6,161 | ConAgra Foods, Inc. | 217,915 | |||||||||
2,261 | Constellation Brands, Inc., Class A(b) | 111,580 | |||||||||
6,468 | Costco Wholesale Corp. | 701,325 | |||||||||
18,281 | CVS Caremark Corp. | 1,063,589 | |||||||||
2,767 | Dean Foods Co.(b) | 52,960 | |||||||||
3,035 | Dr Pepper Snapple Group, Inc. | 148,199 |
See Notes to Financial Statements.
58
Schedule of Investments (Continued)
PowerShares S&P 500 BuyWrite Portfolio (PBP)
April 30, 2013
Number of Shares | Value | ||||||||||
Common Stocks and Other Equity Interests(a) (Continued) | |||||||||||
3,568 | Estee Lauder Cos., Inc. (The), Class A | $ | 247,441 | ||||||||
9,617 | General Mills, Inc. | 484,889 | |||||||||
4,773 | H.J. Heinz Co. | 345,661 | |||||||||
2,238 | Hershey Co. (The) | 199,540 | |||||||||
2,002 | Hormel Foods Corp. | 82,622 | |||||||||
1,597 | J.M. Smucker Co. (The) | 164,858 | |||||||||
3,713 | Kellogg Co. | 241,493 | |||||||||
5,757 | Kimberly-Clark Corp. | 594,065 | |||||||||
8,812 | Kraft Foods Group, Inc. | 453,730 | |||||||||
7,715 | Kroger Co. (The) | 265,242 | |||||||||
5,639 | Lorillard, Inc. | 241,857 | |||||||||
1,974 | McCormick & Co., Inc. | 142,010 | |||||||||
3,017 | Mead Johnson Nutrition Co. | 244,648 | |||||||||
2,319 | Molson Coors Brewing Co., Class B | 119,660 | |||||||||
26,406 | Mondelez International, Inc., Class A | 830,469 | |||||||||
2,141 | Monster Beverage Corp.(b) | 120,752 | |||||||||
22,910 | PepsiCo, Inc. | 1,889,388 | |||||||||
24,469 | Philip Morris International, Inc. | 2,338,992 | |||||||||
40,562 | Procter & Gamble Co. (The) | 3,113,945 | |||||||||
4,791 | Reynolds American, Inc. | 227,189 | |||||||||
3,566 | Safeway, Inc. | 80,306 | |||||||||
8,721 | Sysco Corp. | 304,014 | |||||||||
4,225 | Tyson Foods, Inc., Class A | 104,062 | |||||||||
12,770 | Walgreen Co. | 632,243 | |||||||||
24,837 | Wal-Mart Stores, Inc. | 1,930,332 | |||||||||
2,564 | Whole Foods Market, Inc. | 226,452 | |||||||||
23,429,122 | |||||||||||
Energy—10.9% | |||||||||||
7,432 | Anadarko Petroleum Corp. | 629,936 | |||||||||
5,822 | Apache Corp. | 430,129 | |||||||||
6,578 | Baker Hughes, Inc. | 298,575 | |||||||||
3,129 | Cabot Oil & Gas Corp. | 212,928 | |||||||||
3,683 | Cameron International Corp.(b) | 226,689 | |||||||||
7,751 | Chesapeake Energy Corp. | 151,455 | |||||||||
28,845 | Chevron Corp. | 3,519,378 | |||||||||
18,131 | ConocoPhillips | 1,096,019 | |||||||||
3,397 | CONSOL Energy, Inc. | 114,275 | |||||||||
5,559 | Denbury Resources, Inc.(b) | 99,451 | |||||||||
5,610 | Devon Energy Corp. | 308,887 | |||||||||
1,038 | Diamond Offshore Drilling, Inc. | 71,726 | |||||||||
3,452 | Ensco PLC, Class A (United Kingdom) | 199,111 | |||||||||
4,036 | EOG Resources, Inc. | 489,002 | |||||||||
2,245 | EQT Corp. | 168,644 | |||||||||
66,530 | Exxon Mobil Corp. | 5,920,505 | |||||||||
3,536 | FMC Technologies, Inc.(b) | 192,005 | |||||||||
13,838 | Halliburton Co. | 591,851 | |||||||||
1,581 | Helmerich & Payne, Inc. | 92,678 | |||||||||
4,427 | Hess Corp. | 319,541 | |||||||||
9,395 | Kinder Morgan, Inc. | 367,344 | |||||||||
10,535 | Marathon Oil Corp. | 344,178 |
Number of Shares | Value | ||||||||||
Common Stocks and Other Equity Interests(a) (Continued) | |||||||||||
4,931 | Marathon Petroleum Corp. | $ | 386,393 | ||||||||
2,690 | Murphy Oil Corp. | 167,022 | |||||||||
4,329 | Nabors Industries Ltd. (Bermuda) | 64,026 | |||||||||
6,350 | National Oilwell Varco, Inc. | 414,147 | |||||||||
2,015 | Newfield Exploration Co.(b) | 43,907 | |||||||||
3,761 | Noble Corp. (Switzerland) | 141,038 | |||||||||
2,665 | Noble Energy, Inc. | 301,918 | |||||||||
11,960 | Occidental Petroleum Corp. | 1,067,550 | |||||||||
4,016 | Peabody Energy Corp. | 80,561 | |||||||||
9,228 | Phillips 66 | 562,447 | |||||||||
1,969 | Pioneer Natural Resources Co. | 240,671 | |||||||||
2,663 | QEP Resources, Inc. | 76,455 | |||||||||
2,427 | Range Resources Corp. | 178,433 | |||||||||
1,854 | Rowan Cos. PLC, Class A (United Kingdom)(b) | 60,311 | |||||||||
19,724 | Schlumberger Ltd. | 1,468,057 | |||||||||
5,230 | Southwestern Energy Co.(b) | 195,707 | |||||||||
9,946 | Spectra Energy Corp. | 313,597 | |||||||||
2,050 | Tesoro Corp. | 109,470 | |||||||||
8,223 | Valero Energy Corp. | 331,551 | |||||||||
10,146 | Williams Cos., Inc. (The) | 386,867 | |||||||||
2,979 | WPX Energy, Inc.(b) | 46,562 | |||||||||
22,480,997 | |||||||||||
Financials—16.6% | |||||||||||
5,043 | ACE Ltd. | 449,533 | |||||||||
6,963 | Aflac, Inc. | 379,066 | |||||||||
7,104 | Allstate Corp. (The) | 349,943 | |||||||||
14,268 | American Express Co. | 976,074 | |||||||||
21,923 | American International Group, Inc.(b) | 908,051 | |||||||||
5,876 | American Tower Corp. REIT | 493,525 | |||||||||
3,032 | Ameriprise Financial, Inc. | 225,975 | |||||||||
4,629 | Aon PLC (United Kingdom) | 279,360 | |||||||||
2,170 | Apartment Investment & Management Co., Class A REIT | 67,509 | |||||||||
1,172 | Assurant, Inc. | 55,717 | |||||||||
1,687 | AvalonBay Communities, Inc. REIT | 224,438 | |||||||||
160,666 | Bank of America Corp. | 1,977,798 | |||||||||
17,307 | Bank of New York Mellon Corp. (The) | 488,404 | |||||||||
10,409 | BB&T Corp. | 320,285 | |||||||||
27,082 | Berkshire Hathaway, Inc., Class B(b) | 2,879,358 | |||||||||
1,870 | BlackRock, Inc. | 498,355 | |||||||||
2,262 | Boston Properties, Inc. REIT | 247,531 | |||||||||
8,662 | Capital One Financial Corp. | 500,490 | |||||||||
4,525 | CBRE Group, Inc., Class A(b) | 109,595 | |||||||||
16,351 | Charles Schwab Corp. (The) | 277,313 | |||||||||
3,878 | Chubb Corp. (The) | 341,535 | |||||||||
2,187 | Cincinnati Financial Corp. | 106,966 | |||||||||
45,123 | Citigroup, Inc. | 2,105,439 | |||||||||
4,568 | CME Group, Inc. | 278,008 | |||||||||
2,794 | Comerica, Inc. | 101,283 |
See Notes to Financial Statements.
59
Schedule of Investments (Continued)
PowerShares S&P 500 BuyWrite Portfolio (PBP)
April 30, 2013
Number of Shares | Value | ||||||||||
Common Stocks and Other Equity Interests(a) (Continued) | |||||||||||
7,376 | Discover Financial Services | $ | 322,626 | ||||||||
4,239 | E*TRADE Financial Corp.(b) | 43,619 | |||||||||
4,768 | Equity Residential REIT | 276,830 | |||||||||
13,023 | Fifth Third Bancorp | 221,782 | |||||||||
3,626 | First Horizon National Corp. | 37,710 | |||||||||
2,053 | Franklin Resources, Inc. | 317,517 | |||||||||
7,333 | Genworth Financial, Inc., Class A(b) | 73,550 | |||||||||
6,498 | Goldman Sachs Group, Inc. (The) | 949,163 | |||||||||
6,495 | Hartford Financial Services Group, Inc. (The) | 182,445 | |||||||||
6,748 | HCP, Inc. REIT | 359,668 | |||||||||
3,876 | Health Care REIT, Inc. | 290,584 | |||||||||
10,809 | Host Hotels & Resorts, Inc. REIT | 197,480 | |||||||||
7,071 | Hudson City Bancorp, Inc. | 58,760 | |||||||||
12,521 | Huntington Bancshares, Inc. | 89,776 | |||||||||
1,081 | IntercontinentalExchange, Inc.(b) | 176,127 | |||||||||
6,564 | Invesco Ltd.(c) | 208,341 | |||||||||
56,833 | JPMorgan Chase & Co. | 2,785,385 | |||||||||
13,741 | KeyCorp | 136,998 | |||||||||
6,065 | Kimco Realty Corp. REIT | 144,226 | |||||||||
1,703 | Legg Mason, Inc. | 54,258 | |||||||||
4,366 | Leucadia National Corp. | 134,866 | |||||||||
4,046 | Lincoln National Corp. | 137,604 | |||||||||
4,611 | Loews Corp. | 205,973 | |||||||||
1,823 | M&T Bank Corp. | 182,665 | |||||||||
8,164 | Marsh & McLennan Cos., Inc. | 310,314 | |||||||||
4,180 | McGraw Hill Financial, Inc. | 226,180 | |||||||||
16,237 | MetLife, Inc. | 633,081 | |||||||||
2,878 | Moody's Corp. | 175,126 | |||||||||
20,420 | Morgan Stanley | 452,303 | |||||||||
1,748 | NASDAQ OMX Group, Inc. (The) | 51,531 | |||||||||
3,244 | Northern Trust Corp. | 174,916 | |||||||||
3,620 | NYSE Euronext | 140,492 | |||||||||
5,032 | People's United Financial, Inc. | 66,221 | |||||||||
2,419 | Plum Creek Timber Co., Inc. REIT | 124,675 | |||||||||
7,860 | PNC Financial Services Group, Inc. | 533,537 | |||||||||
4,101 | Principal Financial Group, Inc. | 148,046 | |||||||||
8,265 | Progressive Corp. (The) | 209,022 | |||||||||
7,333 | Prologis, Inc. REIT | 307,619 | |||||||||
6,919 | Prudential Financial, Inc. | 418,046 | |||||||||
2,145 | Public Storage REIT | 353,925 | |||||||||
21,023 | Regions Financial Corp. | 178,485 | |||||||||
4,656 | Simon Property Group, Inc. REIT | 829,094 | |||||||||
6,748 | SLM Corp. | 139,346 | |||||||||
6,786 | State Street Corp. | 396,777 | |||||||||
8,014 | SunTrust Banks, Inc. | 234,410 | |||||||||
3,847 | T. Rowe Price Group, Inc. | 278,908 | |||||||||
1,394 | Torchmark Corp. | 86,526 | |||||||||
5,616 | Travelers Cos., Inc. (The) | 479,663 | |||||||||
27,667 | U.S. Bancorp | 920,758 | |||||||||
4,019 | Unum Group | 112,090 |
Number of Shares | Value | ||||||||||
Common Stocks and Other Equity Interests(a) (Continued) | |||||||||||
4,344 | Ventas, Inc. REIT | $ | 345,913 | ||||||||
2,517 | Vornado Realty Trust REIT | 220,389 | |||||||||
72,787 | Wells Fargo & Co. | 2,764,450 | |||||||||
8,115 | Weyerhaeuser Co. REIT | 247,589 | |||||||||
4,392 | XL Group PLC (Ireland) | 136,767 | |||||||||
2,739 | Zions Bancorp. | 67,434 | |||||||||
33,993,137 | |||||||||||
Health Care—13.2% | |||||||||||
23,321 | Abbott Laboratories | 861,011 | |||||||||
23,472 | AbbVie, Inc) | 1,080,886 | |||||||||
1,897 | Actavis, Inc.(b) | 200,570 | |||||||||
4,876 | Aetna, Inc. | 280,077 | |||||||||
5,165 | Agilent Technologies, Inc. | 214,038 | |||||||||
2,901 | Alexion Pharmaceuticals, Inc.(b) | 284,298 | |||||||||
4,568 | Allergan, Inc. | 518,696 | |||||||||
3,430 | AmerisourceBergen Corp. | 185,632 | |||||||||
11,115 | Amgen, Inc. | 1,158,294 | |||||||||
8,107 | Baxter International, Inc. | 566,436 | |||||||||
2,881 | Becton, Dickinson and Co. | 271,678 | |||||||||
3,508 | Biogen Idec, Inc.(b) | 768,006 | |||||||||
20,202 | Boston Scientific Corp.(b) | 151,313 | |||||||||
24,311 | Bristol-Myers Squibb Co. | 965,633 | |||||||||
1,128 | C.R. Bard, Inc. | 112,078 | |||||||||
5,067 | Cardinal Health, Inc. | 224,063 | |||||||||
3,309 | CareFusion Corp.(b) | 110,653 | |||||||||
6,224 | Celgene Corp.(b) | 734,868 | |||||||||
2,178 | Cerner Corp.(b) | 210,765 | |||||||||
4,248 | Cigna Corp. | 281,090 | |||||||||
2,005 | Coventry Health Care, Inc. | 99,348 | |||||||||
7,018 | Covidien PLC (Ireland) | 448,029 | |||||||||
1,261 | DaVita HealthCare Partners, Inc.(b) | 149,618 | |||||||||
2,122 | DENTSPLY International, Inc. | 89,867 | |||||||||
1,692 | Edwards Lifesciences Corp.(b) | 107,933 | |||||||||
14,825 | Eli Lilly & Co. | 821,008 | |||||||||
12,153 | Express Scripts Holding Co.(b) | 721,524 | |||||||||
3,482 | Forest Laboratories, Inc.(b) | 130,262 | |||||||||
22,605 | Gilead Sciences, Inc.(b) | 1,144,717 | |||||||||
2,468 | Hospira, Inc.(b) | 81,740 | |||||||||
2,355 | Humana, Inc. | 174,529 | |||||||||
597 | Intuitive Surgical, Inc.(b) | 293,897 | |||||||||
41,507 | Johnson & Johnson | 3,537,642 | |||||||||
1,385 | Laboratory Corp. of America Holdings(b) | 129,304 | |||||||||
2,560 | Life Technologies Corp.(b) | 188,646 | |||||||||
3,459 | McKesson Corp. | 366,031 | |||||||||
15,019 | Medtronic, Inc. | 701,087 | |||||||||
44,879 | Merck & Co., Inc. | 2,109,313 | |||||||||
5,883 | Mylan, Inc.(b) | 171,254 | |||||||||
1,249 | Patterson Cos., Inc. | 47,399 | |||||||||
1,686 | PerkinElmer, Inc. | 51,676 | |||||||||
1,310 | Perrigo Co. | 156,427 |
See Notes to Financial Statements.
60
Schedule of Investments (Continued)
PowerShares S&P 500 BuyWrite Portfolio (PBP)
April 30, 2013
Number of Shares | Value | ||||||||||
Common Stocks and Other Equity Interests(a) (Continued) | |||||||||||
106,747 | Pfizer, Inc. | $ | 3,103,135 | ||||||||
2,353 | Quest Diagnostics, Inc. | 132,544 | |||||||||
1,157 | Regeneron Pharmaceuticals, Inc.(b) | 248,917 | |||||||||
4,213 | St. Jude Medical, Inc. | 173,660 | |||||||||
4,300 | Stryker Corp. | 281,994 | |||||||||
1,550 | Tenet Healthcare Corp.(b) | 70,308 | |||||||||
5,321 | Thermo Fisher Scientific, Inc. | 429,298 | |||||||||
15,220 | UnitedHealth Group, Inc. | 912,135 | |||||||||
1,627 | Varian Medical Systems, Inc.(b) | 105,983 | |||||||||
1,285 | Waters Corp.(b) | 118,734 | |||||||||
4,523 | WellPoint, Inc. | 329,817 | |||||||||
2,517 | Zimmer Holdings, Inc. | 192,425 | |||||||||
27,000,286 | |||||||||||
Industrials—10.1% | |||||||||||
9,425 | 3M Co. | 986,892 | |||||||||
3,275 | ADT Corp. (The)(b) | 142,921 | |||||||||
1,483 | Avery Dennison Corp. | 61,470 | |||||||||
10,107 | Boeing Co. (The) | 923,881 | |||||||||
2,398 | C.H. Robinson Worldwide, Inc. | 142,417 | |||||||||
9,728 | Caterpillar, Inc. | 823,670 | |||||||||
1,558 | Cintas Corp. | 69,907 | |||||||||
15,188 | CSX Corp. | 373,473 | |||||||||
2,631 | Cummins, Inc. | 279,912 | |||||||||
8,623 | Danaher Corp. | 525,486 | |||||||||
5,786 | Deere & Co. | 516,690 | |||||||||
2,601 | Dover Corp. | 179,417 | |||||||||
609 | Dun & Bradstreet Corp. (The) | 53,866 | |||||||||
7,003 | Eaton Corp. PLC (Ireland) | 430,054 | |||||||||
10,736 | Emerson Electric Co. | 595,955 | |||||||||
1,793 | Equifax, Inc. | 109,732 | |||||||||
3,066 | Expeditors International of Washington, Inc. | 110,161 | |||||||||
4,021 | Fastenal Co. | 197,230 | |||||||||
4,352 | FedEx Corp. | 409,132 | |||||||||
711 | Flowserve Corp. | 112,423 | |||||||||
2,421 | Fluor Corp. | 137,949 | |||||||||
4,944 | General Dynamics Corp. | 365,658 | |||||||||
154,400 | General Electric Co. | 3,441,576 | |||||||||
11,639 | Honeywell International, Inc. | 855,932 | |||||||||
6,168 | Illinois Tool Works, Inc. | 398,206 | |||||||||
4,098 | Ingersoll-Rand PLC (Ireland) | 220,472 | |||||||||
2,484 | Iron Mountain, Inc. | 94,044 | |||||||||
1,937 | Jacobs Engineering Group, Inc.(b) | 97,780 | |||||||||
1,580 | Joy Global, Inc. | 89,302 | |||||||||
1,334 | L-3 Communications Holdings, Inc. | 108,388 | |||||||||
3,986 | Lockheed Martin Corp. | 394,973 | |||||||||
5,304 | Masco Corp. | 103,110 | |||||||||
4,676 | Norfolk Southern Corp. | 362,016 | |||||||||
3,526 | Northrop Grumman Corp. | 267,059 | |||||||||
5,254 | PACCAR, Inc. | 261,544 | |||||||||
1,658 | Pall Corp. | 110,605 |
Number of Shares | Value | ||||||||||
Common Stocks and Other Equity Interests(a) (Continued) | |||||||||||
2,223 | Parker Hannifin Corp. | $ | 196,891 | ||||||||
3,061 | Pentair Ltd. (Switzerland) | 166,365 | |||||||||
2,998 | Pitney Bowes, Inc. | 40,983 | |||||||||
2,180 | Precision Castparts Corp. | 417,012 | |||||||||
3,174 | Quanta Services, Inc.(b) | 87,222 | |||||||||
4,834 | Raytheon Co. | 296,711 | |||||||||
4,430 | Republic Services, Inc. | 150,974 | |||||||||
2,070 | Robert Half International, Inc. | 67,937 | |||||||||
2,074 | Rockwell Automation, Inc. | 175,834 | |||||||||
2,036 | Rockwell Collins, Inc. | 128,105 | |||||||||
1,478 | Roper Industries, Inc. | 176,843 | |||||||||
764 | Ryder System, Inc. | 44,366 | |||||||||
873 | Snap-On, Inc. | 75,253 | |||||||||
10,832 | Southwest Airlines Co. | 148,398 | |||||||||
2,385 | Stanley Black & Decker, Inc. | 178,422 | |||||||||
1,288 | Stericycle, Inc.(b) | 139,516 | |||||||||
4,047 | Textron, Inc. | 104,210 | |||||||||
6,936 | Tyco International Ltd. (Switzerland) | 222,784 | |||||||||
6,970 | Union Pacific Corp. | 1,031,281 | |||||||||
10,618 | United Parcel Service, Inc., Class B | 911,449 | |||||||||
12,521 | United Technologies Corp. | 1,143,042 | |||||||||
883 | W.W. Grainger, Inc. | 217,633 | |||||||||
6,506 | Waste Management, Inc. | 266,616 | |||||||||
2,770 | Xylem, Inc. | 76,868 | |||||||||
20,818,018 | |||||||||||
Information Technology—18.4% | |||||||||||
9,566 | Accenture PLC, Class A (Ireland) | 779,055 | |||||||||
7,416 | Adobe Systems, Inc.(b) | 334,313 | |||||||||
9,028 | Advanced Micro Devices, Inc.(b) | 25,459 | |||||||||
2,652 | Akamai Technologies, Inc.(b) | 116,449 | |||||||||
4,759 | Altera Corp. | 152,336 | |||||||||
2,377 | Amphenol Corp., Class A | 179,511 | |||||||||
4,554 | Analog Devices, Inc. | 200,331 | |||||||||
13,943 | Apple, Inc. | 6,173,263 | |||||||||
17,848 | Applied Materials, Inc. | 258,975 | |||||||||
3,342 | Autodesk, Inc.(b) | 131,608 | |||||||||
7,210 | Automatic Data Processing, Inc. | 485,521 | |||||||||
1,955 | BMC Software, Inc.(b) | 88,913 | |||||||||
7,781 | Broadcom Corp., Class A | 280,116 | |||||||||
4,953 | CA, Inc. | 133,583 | |||||||||
79,171 | Cisco Systems, Inc. | 1,656,257 | |||||||||
2,774 | Citrix Systems, Inc.(b) | 172,460 | |||||||||
4,487 | Cognizant Technology Solutions Corp., Class A(b) | 290,758 | |||||||||
2,278 | Computer Sciences Corp. | 106,724 | |||||||||
21,908 | Corning, Inc. | 317,666 | |||||||||
21,731 | Dell, Inc. | 291,195 | |||||||||
17,327 | eBay, Inc.(b) | 907,762 | |||||||||
4,460 | Electronic Arts, Inc.(b) | 78,541 | |||||||||
31,247 | EMC Corp.(b) | 700,870 |
See Notes to Financial Statements.
61
Schedule of Investments (Continued)
PowerShares S&P 500 BuyWrite Portfolio (PBP)
April 30, 2013
Number of Shares | Value | ||||||||||
Common Stocks and Other Equity Interests(a) (Continued) | |||||||||||
1,168 | F5 Networks, Inc.(b) | $ | 89,270 | ||||||||
4,364 | Fidelity National Information Services, Inc. | 183,506 | |||||||||
888 | First Solar, Inc.(b) | 41,345 | |||||||||
1,987 | Fiserv, Inc.(b) | 181,036 | |||||||||
2,156 | FLIR Systems, Inc. | 52,412 | |||||||||
3,966 | Google, Inc., Class A(b) | 3,270,245 | |||||||||
1,672 | Harris Corp. | 77,246 | |||||||||
28,997 | Hewlett-Packard Co. | 597,338 | |||||||||
73,443 | Intel Corp. | 1,758,960 | |||||||||
15,556 | International Business Machines Corp. | 3,150,712 | |||||||||
4,145 | Intuit, Inc. | 247,208 | |||||||||
2,735 | Jabil Circuit, Inc. | 48,683 | |||||||||
3,495 | JDS Uniphase Corp.(b) | 47,183 | |||||||||
7,669 | Juniper Networks, Inc.(b) | 126,922 | |||||||||
2,465 | KLA-Tencor Corp. | 133,726 | |||||||||
2,419 | Lam Research Corp.(b) | 111,806 | |||||||||
3,454 | Linear Technology Corp. | 126,071 | |||||||||
8,186 | LSI Corp.(b) | 53,537 | |||||||||
1,568 | MasterCard, Inc., Class A | 866,994 | |||||||||
2,903 | Microchip Technology, Inc. | 105,727 | |||||||||
15,203 | Micron Technology, Inc.(b) | 143,212 | |||||||||
111,939 | Microsoft Corp. | 3,705,181 | |||||||||
2,066 | Molex, Inc. | 56,960 | |||||||||
4,104 | Motorola Solutions, Inc. | 234,749 | |||||||||
5,365 | NetApp, Inc.(b) | 187,185 | |||||||||
9,299 | NVIDIA Corp. | 128,047 | |||||||||
54,832 | Oracle Corp. | 1,797,393 | |||||||||
4,822 | Paychex, Inc. | 175,569 | |||||||||
25,511 | QUALCOMM, Inc. | 1,571,988 | |||||||||
2,868 | Red Hat, Inc.(b) | 137,463 | |||||||||
4,227 | SAIC, Inc. | 63,151 | |||||||||
8,013 | Salesforce.com, Inc.(b) | 329,415 | |||||||||
3,602 | SanDisk Corp.(b) | 188,889 | |||||||||
4,753 | Seagate Technology PLC (Ireland) | 174,435 | |||||||||
10,254 | Symantec Corp.(b) | 249,172 | |||||||||
6,249 | TE Connectivity Ltd. (Switzerland) | 272,144 | |||||||||
2,460 | Teradata Corp.(b) | 125,632 | |||||||||
2,837 | Teradyne, Inc.(b) | 46,640 | |||||||||
16,406 | Texas Instruments, Inc. | 594,061 | |||||||||
2,392 | Total System Services, Inc. | 56,499 | |||||||||
2,263 | Verisign, Inc.(b) | 104,257 | |||||||||
7,657 | Visa, Inc., Class A | 1,289,898 | |||||||||
3,227 | Western Digital Corp. | 178,389 | |||||||||
8,461 | Western Union Co. | 125,307 | |||||||||
18,213 | Xerox Corp. | 156,268 | |||||||||
3,888 | Xilinx, Inc. | 147,394 | |||||||||
14,421 | Yahoo!, Inc.(b) | 356,631 | |||||||||
37,727,522 |
Number of Shares | Value | ||||||||||
Common Stocks and Other Equity Interests(a) (Continued) | |||||||||||
Materials—3.5% | |||||||||||
3,084 | Air Products & Chemicals, Inc. | $ | 268,185 | ||||||||
1,019 | Airgas, Inc. | 98,486 | |||||||||
15,905 | Alcoa, Inc. | 135,192 | |||||||||
1,601 | Allegheny Technologies, Inc. | 43,195 | |||||||||
2,227 | Ball Corp. | 98,255 | |||||||||
1,529 | Bemis Co., Inc. | 60,166 | |||||||||
934 | CF Industries Holdings, Inc. | 174,200 | |||||||||
2,260 | Cliffs Natural Resources, Inc. | 48,228 | |||||||||
17,883 | Dow Chemical Co. (The) | 606,413 | |||||||||
13,871 | E.I. du Pont de Nemours & Co. | 756,108 | |||||||||
2,285 | Eastman Chemical Co. | 152,295 | |||||||||
3,950 | Ecolab, Inc. | 334,249 | |||||||||
2,054 | FMC Corp. | 124,678 | |||||||||
14,122 | Freeport-McMoRan Copper & Gold, Inc. | 429,732 | |||||||||
1,216 | International Flavors & Fragrances, Inc. | 93,863 | |||||||||
6,568 | International Paper Co. | 308,565 | |||||||||
5,644 | LyondellBasell Industries NV, Class A (Netherlands) | 342,591 | |||||||||
2,617 | MeadWestvaco Corp. | 90,234 | |||||||||
7,958 | Monsanto Co. | 850,074 | |||||||||
4,115 | Mosaic Co. (The) | 253,443 | |||||||||
7,397 | Newmont Mining Corp. | 239,663 | |||||||||
4,726 | Nucor Corp. | 206,148 | |||||||||
2,446 | Owens-Illinois, Inc.(b) | 64,281 | |||||||||
2,122 | PPG Industries, Inc. | 312,231 | |||||||||
4,399 | Praxair, Inc. | 502,806 | |||||||||
2,891 | Sealed Air Corp. | 63,949 | |||||||||
1,276 | Sherwin-Williams Co. (The) | 233,648 | |||||||||
1,793 | Sigma-Aldrich Corp. | 141,091 | |||||||||
2,145 | United States Steel Corp. | 38,181 | |||||||||
1,929 | Vulcan Materials Co. | 96,219 | |||||||||
7,166,369 | |||||||||||
Telecommunication Services—3.2% | |||||||||||
81,541 | AT&T, Inc. | 3,054,526 | |||||||||
9,314 | CenturyLink, Inc. | 349,927 | |||||||||
4,363 | Crown Castle International Corp.(b) | 335,951 | |||||||||
14,857 | Frontier Communications Corp. | 61,805 | |||||||||
44,797 | Sprint Nextel Corp.(b) | 315,819 | |||||||||
42,441 | Verizon Communications, Inc. | 2,287,994 | |||||||||
8,779 | Windstream Corp. | 74,797 | |||||||||
6,480,819 | |||||||||||
Utilities—3.8% | |||||||||||
9,205 | AES Corp. (The) | 127,581 | |||||||||
1,752 | AGL Resources, Inc. | 76,825 | |||||||||
3,614 | Ameren Corp. | 131,008 | |||||||||
7,221 | American Electric Power Co., Inc. | 371,376 | |||||||||
6,367 | CenterPoint Energy, Inc. | 157,138 | |||||||||
3,940 | CMS Energy Corp. | 117,964 | |||||||||
4,359 | Consolidated Edison, Inc. | 277,450 |
See Notes to Financial Statements.
62
Schedule of Investments (Continued)
PowerShares S&P 500 BuyWrite Portfolio (PBP)
April 30, 2013
Number of Shares | Value | ||||||||||
Common Stocks and Other Equity Interests(a) (Continued) | |||||||||||
8,567 | Dominion Resources, Inc. | $ | 528,413 | ||||||||
2,567 | DTE Energy Co. | 187,083 | |||||||||
10,464 | Duke Energy Corp. | 786,893 | |||||||||
4,842 | Edison International | 260,500 | |||||||||
2,656 | Entergy Corp. | 189,187 | |||||||||
12,714 | Exelon Corp. | 476,902 | |||||||||
6,216 | FirstEnergy Corp. | 289,666 | |||||||||
1,165 | Integrys Energy Group, Inc. | 71,718 | |||||||||
6,306 | NextEra Energy, Inc. | 517,281 | |||||||||
4,637 | NiSource, Inc. | 142,495 | |||||||||
4,673 | Northeast Utilities | 211,827 | |||||||||
4,813 | NRG Energy, Inc. | 134,138 | |||||||||
3,056 | ONEOK, Inc. | 156,956 | |||||||||
3,689 | Pepco Holdings, Inc. | 83,371 | |||||||||
6,527 | PG&E Corp. | 316,168 | |||||||||
1,637 | Pinnacle West Capital Corp. | 99,693 | |||||||||
8,671 | PPL Corp. | 289,438 | |||||||||
7,530 | Public Service Enterprise Group, Inc. | 275,673 | |||||||||
2,071 | SCANA Corp. | 112,248 | |||||||||
3,367 | Sempra Energy | 278,956 | |||||||||
12,901 | Southern Co. (The) | 622,215 | |||||||||
3,044 | TECO Energy, Inc. | 58,232 | |||||||||
3,411 | Wisconsin Energy Corp. | 153,290 | |||||||||
7,262 | Xcel Energy, Inc. | 230,859 | |||||||||
7,732,544 | |||||||||||
Total Investments (Cost $180,709,491)—103.2% | 211,707,249 | ||||||||||
Liabilities in excess of other assets—(3.2)% | (6,485,420 | ) | |||||||||
Net Assets—100.0% | $ | 205,221,829 |
Investment Abbreviations:
REIT—Real Estate Investment Trust
Notes to Schedule of Investments:
(a) A portion of the securities in the portfolio are subject to call options written. In addition, the unrealized appreciation (depreciation) of the call options written was based on Level 1 inputs. See Note 2H and Note 6.
(b) Non-income producing security.
(c) Affiliated company. The Fund's Adviser is a subsidiary of Invesco Ltd. and therefore, Invesco Ltd. is considered to be affiliated with the Fund. See Note 4.
See Notes to Financial Statements.
63
Schedule of Investments
PowerShares S&P 500® High Quality Portfolio (SPHQ)
April 30, 2013
Number of Shares | Value | ||||||||||
Common Stocks and Other Equity Interests—99.9% | |||||||||||
Consumer Discretionary—19.7% | |||||||||||
21,507 | Comcast Corp., Class A | $ | 888,239 | ||||||||
35,944 | Darden Restaurants, Inc. | 1,855,789 | |||||||||
44,387 | Family Dollar Stores, Inc. | 2,724,030 | |||||||||
23,657 | Gap, Inc. (The) | 898,729 | |||||||||
23,240 | Genuine Parts Co. | 1,773,909 | |||||||||
17,372 | Harley-Davidson, Inc. | 949,380 | |||||||||
40,227 | Hasbro, Inc. | 1,905,553 | |||||||||
24,540 | Home Depot, Inc. (The) | 1,800,009 | |||||||||
26,511 | Johnson Controls, Inc. | 928,150 | |||||||||
23,211 | Lowe's Cos., Inc. | 891,767 | |||||||||
20,520 | Mattel, Inc. | 936,943 | |||||||||
17,439 | McDonald's Corp. | 1,781,220 | |||||||||
44,730 | NIKE, Inc., Class B | 2,844,828 | |||||||||
31,794 | Nordstrom, Inc. | 1,799,222 | |||||||||
45,053 | Omnicom Group, Inc. | 2,692,818 | |||||||||
27,304 | PetSmart, Inc. | 1,863,225 | |||||||||
10,379 | Ralph Lauren Corp. | 1,884,619 | |||||||||
41,901 | Ross Stores, Inc. | 2,768,399 | |||||||||
38,996 | Target Corp. | 2,751,558 | |||||||||
12,428 | Tiffany & Co. | 915,695 | |||||||||
55,783 | TJX Cos., Inc. (The) | 2,720,537 | |||||||||
10,528 | VF Corp. | 1,876,300 | |||||||||
44,764 | Walt Disney Co. (The) | 2,812,970 | |||||||||
39,969 | Yum! Brands, Inc. | 2,722,688 | |||||||||
44,986,577 | |||||||||||
Consumer Staples—19.9% | |||||||||||
25,154 | Altria Group, Inc. | 918,373 | |||||||||
27,674 | Archer-Daniels-Midland Co. | 939,256 | |||||||||
25,518 | Brown-Forman Corp., Class B | 1,799,019 | |||||||||
19,851 | Campbell Soup Co. | 921,285 | |||||||||
20,352 | Clorox Co. (The) | 1,755,360 | |||||||||
65,964 | Coca-Cola Co. (The) | 2,792,256 | |||||||||
22,892 | Colgate-Palmolive Co. | 2,733,534 | |||||||||
17,021 | Costco Wholesale Corp. | 1,845,587 | |||||||||
47,112 | CVS Caremark Corp. | 2,740,976 | |||||||||
13,238 | Estee Lauder Cos., Inc. (The), Class A | 918,055 | |||||||||
36,617 | General Mills, Inc. | 1,846,229 | |||||||||
66,217 | Hormel Foods Corp. | 2,732,776 | |||||||||
17,870 | J.M. Smucker Co. (The) | 1,844,720 | |||||||||
41,882 | Kellogg Co. | 2,724,005 | |||||||||
17,848 | Kimberly-Clark Corp. | 1,841,735 | |||||||||
65,202 | Lorillard, Inc. | 2,796,514 | |||||||||
37,782 | McCormick & Co., Inc. | 2,718,037 | |||||||||
22,591 | PepsiCo, Inc. | 1,863,080 | |||||||||
33,839 | Procter & Gamble Co. (The) | 2,597,820 | |||||||||
78,273 | Sysco Corp. | 2,728,597 | |||||||||
37,044 | Walgreen Co. | 1,834,048 | |||||||||
34,496 | Wal-Mart Stores, Inc. | 2,681,029 | |||||||||
45,572,291 |
Number of Shares | Value | ||||||||||
Common Stocks and Other Equity Interests (Continued) | |||||||||||
Energy—2.8% | |||||||||||
22,593 | Chevron Corp. | $ | 2,756,572 | ||||||||
30,452 | Exxon Mobil Corp. | 2,709,924 | |||||||||
12,651 | Hess Corp. | 913,149 | |||||||||
6,379,645 | |||||||||||
Financials—5.3% | |||||||||||
18,025 | Aflac, Inc. | 981,281 | |||||||||
3,431 | BlackRock, Inc. | 914,361 | |||||||||
20,266 | Chubb Corp. (The) | 1,784,827 | |||||||||
12,704 | Health Care REIT, Inc. | 952,419 | |||||||||
108,960 | Hudson City Bancorp, Inc. | 905,458 | |||||||||
38,869 | Kimco Realty Corp. REIT | 924,305 | |||||||||
16,605 | Moody's Corp. | 1,010,414 | |||||||||
11,759 | T. Rowe Price Group, Inc. | 852,527 | |||||||||
30,301 | Torchmark Corp. | 1,880,783 | |||||||||
10,472 | Travelers Cos., Inc. (The) | 894,414 | |||||||||
24,277 | Wells Fargo & Co. | 922,040 | |||||||||
12,022,829 | |||||||||||
Health Care—10.1% | |||||||||||
48,656 | Abbott Laboratories | 1,796,380 | |||||||||
33,345 | AmerisourceBergen Corp. | 1,804,631 | |||||||||
37,751 | Baxter International, Inc. | 2,637,662 | |||||||||
18,748 | Becton, Dickinson and Co. | 1,767,936 | |||||||||
17,529 | C.R. Bard, Inc. | 1,741,681 | |||||||||
21,487 | DENTSPLY International, Inc. | 909,975 | |||||||||
32,752 | Johnson & Johnson | 2,791,453 | |||||||||
8,338 | McKesson Corp. | 882,327 | |||||||||
38,273 | Medtronic, Inc. | 1,786,584 | |||||||||
31,496 | Mylan, Inc.(a) | 916,849 | |||||||||
15,221 | Quest Diagnostics, Inc. | 857,399 | |||||||||
40,750 | Stryker Corp. | 2,672,385 | |||||||||
42,994 | UnitedHealth Group, Inc. | 2,576,630 | |||||||||
23,141,892 | |||||||||||
Industrials—25.3% | |||||||||||
25,165 | 3M Co. | 2,635,027 | |||||||||
45,929 | C.H. Robinson Worldwide, Inc. | 2,727,723 | |||||||||
31,861 | Caterpillar, Inc. | 2,697,671 | |||||||||
19,689 | Cintas Corp. | 883,445 | |||||||||
73,705 | CSX Corp. | 1,812,406 | |||||||||
7,713 | Cummins, Inc. | 820,586 | |||||||||
44,021 | Danaher Corp. | 2,682,640 | |||||||||
20,973 | Deere & Co. | 1,872,889 | |||||||||
24,609 | Dover Corp. | 1,697,529 | |||||||||
48,536 | Emerson Electric Co. | 2,694,233 | |||||||||
49,225 | Expeditors International of Washington, Inc. | 1,768,654 | |||||||||
36,488 | Fastenal Co. | 1,789,736 | |||||||||
15,002 | Fluor Corp. | 854,814 | |||||||||
25,589 | General Dynamics Corp. | 1,892,562 | |||||||||
38,502 | General Electric Co. | 858,210 |
See Notes to Financial Statements.
64
Schedule of Investments (Continued)
PowerShares S&P 500® High Quality Portfolio (SPHQ)
April 30, 2013
Number of Shares | Value | ||||||||||
Common Stocks and Other Equity Interests (Continued) | |||||||||||
12,164 | Honeywell International, Inc. | $ | 894,541 | ||||||||
28,476 | Illinois Tool Works, Inc. | 1,838,411 | |||||||||
32,866 | L-3 Communications Holdings, Inc. | 2,670,363 | |||||||||
18,592 | Lockheed Martin Corp. | 1,842,281 | |||||||||
23,521 | Norfolk Southern Corp. | 1,820,996 | |||||||||
25,054 | Northrop Grumman Corp. | 1,897,590 | |||||||||
13,474 | Pall Corp. | 898,851 | |||||||||
20,289 | Parker Hannifin Corp. | 1,796,997 | |||||||||
30,967 | Raytheon Co. | 1,900,754 | |||||||||
26,947 | Republic Services, Inc. | 918,354 | |||||||||
28,730 | Rockwell Collins, Inc. | 1,807,692 | |||||||||
14,644 | Roper Industries, Inc. | 1,752,155 | |||||||||
21,286 | Snap-On, Inc. | 1,834,853 | |||||||||
12,789 | Union Pacific Corp. | 1,892,260 | |||||||||
28,317 | United Technologies Corp. | 2,585,059 | |||||||||
11,884 | W.W. Grainger, Inc. | 2,929,049 | |||||||||
23,038 | Waste Management, Inc. | 944,097 | |||||||||
57,912,428 | |||||||||||
Information Technology—4.7% | |||||||||||
27,410 | Automatic Data Processing, Inc. | 1,845,789 | |||||||||
20,501 | Harris Corp. | 947,146 | |||||||||
12,820 | International Business Machines Corp. | 2,596,563 | |||||||||
24,619 | Linear Technology Corp. | 898,594 | |||||||||
31,330 | Microsoft Corp. | 1,037,023 | |||||||||
26,995 | Oracle Corp. | 884,896 | |||||||||
49,988 | Paychex, Inc. | 1,820,063 | |||||||||
13,547 | QUALCOMM, Inc. | 834,766 | |||||||||
10,864,840 | |||||||||||
Materials—7.7% | |||||||||||
20,782 | Air Products & Chemicals, Inc. | 1,807,203 | |||||||||
9,292 | Airgas, Inc. | 898,072 | |||||||||
37,723 | Ball Corp. | 1,664,339 | |||||||||
18,132 | E.I. du Pont de Nemours & Co. | 988,375 | |||||||||
32,960 | Ecolab, Inc. | 2,789,075 | |||||||||
11,968 | International Flavors & Fragrances, Inc. | 923,810 | |||||||||
8,564 | Monsanto Co. | 914,806 | |||||||||
24,412 | Praxair, Inc. | 2,790,291 | |||||||||
10,580 | Sherwin-Williams Co. (The) | 1,937,304 | |||||||||
35,459 | Sigma-Aldrich Corp. | 2,790,269 | |||||||||
17,503,544 | |||||||||||
Utilities—4.4% | |||||||||||
41,530 | AGL Resources, Inc. | 1,821,091 | |||||||||
25,919 | Entergy Corp. | 1,846,210 | |||||||||
22,728 | NextEra Energy, Inc. | 1,864,378 | |||||||||
18,284 | ONEOK, Inc. | 939,066 | |||||||||
17,173 | SCANA Corp. | 930,777 |
Number of Shares | Value | ||||||||||
Common Stocks and Other Equity Interests (Continued) | |||||||||||
18,867 | Southern Co. (The) | $ | 909,955 | ||||||||
41,446 | Wisconsin Energy Corp. | 1,862,583 | |||||||||
10,174,060 | |||||||||||
Total Common Stocks and Other Equity Interests (Cost $186,873,052) | 228,558,106 | ||||||||||
Money Market Fund—0.1% | |||||||||||
188,857 | Goldman Sachs Financial Square Prime Obligations—Institutional Share Class (Cost $188,857) | 188,857 | |||||||||
Total Investments (Cost $187,061,909)—100.0% | �� | 228,746,963 | |||||||||
Liabilities in excess of other assets—(0.0)% | (10,894 | ) | |||||||||
Net Assets—100.0% | $ | 228,736,069 |
Investment Abbreviations:
REIT—Real Estate Investment Trust
Notes to Schedule of Investments:
(a) Non-income producing security.
See Notes to Financial Statements.
65
Schedule of Investments
PowerShares Water Resources Portfolio (PHO)
April 30, 2013
Number of Shares | Value | ||||||||||
Common Stocks and Other Equity Interests—100.0% | |||||||||||
Agriculture—0.1% | |||||||||||
191,628 | Cadiz, Inc.(a)(b) | $ | 1,128,689 | ||||||||
Electronics—17.6% | |||||||||||
336,662 | Badger Meter, Inc. | 14,705,396 | |||||||||
844,730 | Itron, Inc.(b) | 33,493,545 | |||||||||
766,416 | Waters Corp.(b) | 70,816,838 | |||||||||
756,946 | Watts Water Technologies, Inc., Class A | 35,621,879 | |||||||||
154,637,658 | |||||||||||
Engineering & Construction—3.7% | |||||||||||
1,054,622 | Aegion Corp.(b) | 22,210,339 | |||||||||
519,611 | Layne Christensen Co.(b) | 10,615,653 | |||||||||
32,825,992 | |||||||||||
Environmental Control—7.7% | |||||||||||
1,928,899 | Calgon Carbon Corp.(b) | 32,868,439 | |||||||||
581,978 | Energy Recovery, Inc.(b) | 2,130,039 | |||||||||
1,231,603 | Tetra Tech, Inc.(b) | 32,378,843 | |||||||||
67,377,321 | |||||||||||
Hand/Machine Tools—2.3% | |||||||||||
629,378 | Franklin Electric Co., Inc. | 20,372,966 | |||||||||
Housewares—4.1% | |||||||||||
787,976 | Toro Co. (The) | 35,466,800 | |||||||||
Machinery - Diversified—16.2% | |||||||||||
442,755 | Flowserve Corp. | 70,008,421 | |||||||||
144,425 | Gorman-Rupp Co. (The) | 4,080,006 | |||||||||
415,961 | Lindsay Corp. | 31,954,124 | |||||||||
1,292,039 | Xylem, Inc. | 35,854,082 | |||||||||
141,896,633 | |||||||||||
Metal Fabricate/Hardware—8.5% | |||||||||||
6,323,441 | Mueller Water Products, Inc., Class A | 37,434,771 | |||||||||
159,151 | Northwest Pipe Co.(b) | 4,343,231 | |||||||||
225,609 | Valmont Industries, Inc. | 32,877,999 | |||||||||
74,656,001 | |||||||||||
Miscellaneous Manufacturing—16.2% | |||||||||||
1,042,272 | Pall Corp. | 69,529,965 | |||||||||
1,333,998 | Pentair Ltd. (Switzerland) | 72,502,791 | |||||||||
142,032,756 | |||||||||||
Water—23.6% | |||||||||||
453,701 | American States Water Co. | 25,171,332 | |||||||||
1,801,322 | American Water Works Co., Inc. | 75,439,365 | |||||||||
1,219,967 | Aqua America, Inc. | 38,709,553 | |||||||||
834,081 | California Water Service Group | 16,723,324 | |||||||||
2,204,973 | Cia de Saneamento Basico do Estado de Sao Paulo ADR (Brazil)(a) | 31,531,114 | |||||||||
232,389 | Consolidated Water Co. Ltd. (Cayman Islands) | 2,316,918 |
Number of Shares | Value | ||||||||||
Common Stocks and Other Equity Interests (Continued) | |||||||||||
1,220,774 | Veolia Environnement SA ADR (France)(a) | $ | 16,822,266 | ||||||||
206,713,872 | |||||||||||
Total Common Stocks and Other Equity Interests (Cost $722,481,165) | 877,108,688 | ||||||||||
Money Market Fund—0.0% | |||||||||||
142,539 | Goldman Sachs Financial Square Prime Obligations—Institutional Share Class (Cost $142,539) | 142,539 | |||||||||
Total Investments (excluding investments purchased with cash collateral from securities on loan) (Cost $722,623,704)—100.0% | 877,251,227 | ||||||||||
Investments Purchased with Cash Collateral from Securities on Loan | |||||||||||
Money Market Fund—0.3% | |||||||||||
2,470,351 | Invesco Liquid Assets Portfolio— Institutional Class (Cost $2,470,351)(c)(d) | 2,470,351 | |||||||||
Total Investments (Cost $725,094,055)—100.3% | 879,721,578 | ||||||||||
Liabilities in excess of other assets—(0.3)% | (2,657,283 | ) | |||||||||
Net Assets—100.0% | $ | 877,064,295 |
Investment Abbreviations:
ADR—American Depositary Receipt
Notes to Schedule of Investments:
(a) All or a portion of this security was out on loan at April 30, 2013.
(b) Non-income producing security.
(c) The security has been segregated to satisfy the commitment to return the cash collateral received in securities lending transactions upon the borrower's return of the securities loaned. See Note 2J.
(d) The security and the Fund are advised by wholly owned subsidiaries of Invesco Ltd. and are therefore considered to be affiliated.
See Notes to Financial Statements.
66
Schedule of Investments
PowerShares WilderHill Clean Energy Portfolio (PBW)
April 30, 2013
Number of Shares | Value | ||||||||||
Common Stocks and Other Equity Interests—100.0% | |||||||||||
Auto Manufacturers—3.4% | |||||||||||
90,685 | Tesla Motors, Inc.(a)(b) | $ | 4,896,083 | ||||||||
Auto Parts & Equipment—4.3% | |||||||||||
193,076 | Fuel Systems Solutions, Inc.(b) | 3,033,224 | |||||||||
200,055 | Gentherm, Inc.(b) | 3,046,838 | |||||||||
6,080,062 | |||||||||||
Chemicals—10.0% | |||||||||||
31,141 | Air Products & Chemicals, Inc. | 2,708,021 | |||||||||
171,032 | OM Group, Inc.(b) | 4,185,153 | |||||||||
74,201 | Sociedad Quimica y Minera de Chile SA ADR (Chile) | 3,672,208 | |||||||||
281,638 | Zoltek Cos., Inc.(a)(b) | 3,720,438 | |||||||||
14,285,820 | |||||||||||
Commercial Services—2.0% | |||||||||||
101,699 | Quanta Services, Inc.(b) | 2,794,689 | |||||||||
Computers—0.9% | |||||||||||
255,910 | Echelon Corp.(b) | 565,561 | |||||||||
111,838 | Maxwell Technologies, Inc.(b) | 682,212 | |||||||||
1,247,773 | |||||||||||
Electric—16.1% | |||||||||||
418,291 | Ameresco, Inc., Class A(b) | 3,082,805 | |||||||||
160,074 | Calpine Corp.(b) | 3,478,408 | |||||||||
161,991 | CPFL Energia SA ADR (Brazil)(a) | 3,466,607 | |||||||||
162,959 | EnerNOC, Inc.(b) | 2,855,042 | |||||||||
68,453 | IDACORP, Inc. | 3,368,572 | |||||||||
33,791 | ITC Holdings Corp. | 3,116,206 | |||||||||
163,561 | Ormat Technologies, Inc. | 3,555,816 | |||||||||
22,923,456 | |||||||||||
Electrical Components & Equipment—17.4% | |||||||||||
174,692 | Advanced Energy Industries, Inc.(b) | 2,966,270 | |||||||||
238,933 | American Superconductor Corp.(b) | 599,722 | |||||||||
189,859 | Canadian Solar, Inc. (China)(a)(b) | 1,068,906 | |||||||||
505,845 | China Ming Yang Wind Power Group Ltd. ADR (Cayman Islands)(b) | 632,306 | |||||||||
781,390 | Power-One, Inc.(b) | 4,938,385 | |||||||||
250,759 | PowerSecure International, Inc.(b) | 3,435,398 | |||||||||
280,803 | SunPower Corp.(a)(b) | 3,816,113 | |||||||||
108,356 | Universal Display Corp.(b) | 3,406,713 | |||||||||
1,536,693 | Yingli Green Energy Holding Co. Ltd. ADR (China)(a)(b) | 3,872,466 | |||||||||
24,736,279 | |||||||||||
Electronics—1.8% | |||||||||||
63,852 | Itron, Inc.(b) | 2,531,732 | |||||||||
Energy - Alternate Sources—16.6% | |||||||||||
981,629 | Amyris, Inc.(a)(b) | 2,670,031 | |||||||||
493,707 | Enphase Energy, Inc.(a)(b) | 3,475,697 |
Number of Shares | Value | ||||||||||
Common Stocks and Other Equity Interests (Continued) | |||||||||||
670,057 | FuelCell Energy, Inc.(a)(b) | $ | 703,560 | ||||||||
290,336 | Gevo, Inc.(a)(b) | 535,670 | |||||||||
156,001 | JA Solar Holdings Co. Ltd. ADR (Cayman Islands)(a)(b) | 786,245 | |||||||||
531,294 | KiOR, Inc., Class A(a)(b) | 2,587,402 | |||||||||
407,218 | Renesola Ltd. ADR (British Virgin Islands)(a)(b) | 708,559 | |||||||||
178,378 | Solarcity Corp.(a)(b) | 4,819,774 | |||||||||
329,174 | Solazyme, Inc.(a)(b) | 2,995,483 | |||||||||
860,157 | Trina Solar Ltd. ADR (Cayman Islands)(a)(b) | 4,395,402 | |||||||||
23,677,823 | |||||||||||
Food—2.0% | |||||||||||
138,634 | Cosan Ltd., Class A (Brazil) | 2,876,656 | |||||||||
Metal Fabricate/Hardware—2.2% | |||||||||||
129,366 | Kaydon Corp. | 3,084,085 | |||||||||
Mining—2.7% | |||||||||||
582,954 | Molycorp, Inc.(a)(b) | 3,404,451 | |||||||||
279,074 | Rare Element Resources Ltd. (Canada)(a)(b) | 519,078 | |||||||||
3,923,529 | |||||||||||
Miscellaneous Manufacturing—3.5% | |||||||||||
102,621 | Polypore International, Inc.(a)(b) | 4,302,899 | |||||||||
298,392 | STR Holdings, Inc.(b) | 671,382 | |||||||||
4,974,281 | |||||||||||
Semiconductors—17.1% | |||||||||||
214,202 | Aixtron SE ADR (Germany)(a)(b) | 3,075,941 | |||||||||
60,001 | Cree, Inc.(b) | 3,394,257 | |||||||||
115,826 | First Solar, Inc.(b) | 5,392,858 | |||||||||
1,065,775 | GT Advanced Technologies, Inc.(a)(b) | 4,188,496 | |||||||||
658,674 | Hanwha SolarOne Co. Ltd. ADR (Cayman Islands)(b) | 658,674 | |||||||||
158,282 | International Rectifier Corp.(b) | 3,357,161 | |||||||||
659,194 | MEMC Electronic Materials, Inc.(b) | 3,559,648 | |||||||||
108,828 | Rubicon Technology, Inc.(a)(b) | 806,415 | |||||||||
24,433,450 | |||||||||||
Total Common Stocks and Other Equity Interests (Cost $156,524,774) | 142,465,718 | ||||||||||
Money Market Fund—0.0% | |||||||||||
54,413 | Goldman Sachs Financial Square Prime Obligations—Institutional Share Class (Cost $54,413) | 54,413 | |||||||||
Total Investments (excluding investments purchased with cash collateral from securities on loan) (Cost $156,579,187)—100.0% | 142,520,131 |
See Notes to Financial Statements.
67
Schedule of Investments (Continued)
PowerShares WilderHill Clean Energy Portfolio (PBW)
April 30, 2013
Number of Shares | Value | ||||||||||
Investments Purchased with Cash Collateral from Securities on Loan | |||||||||||
Money Market Fund—29.7% | |||||||||||
42,344,925 | Invesco Liquid Assets Portfolio— Institutional Class (Cost $42,344,925)(c)(d) | $ | 42,344,925 | ||||||||
Total Investments (Cost $198,924,112)—129.7% | 184,865,056 | ||||||||||
Liabilities in excess of other assets—(29.7)% | (42,371,225 | ) | |||||||||
Net Assets—100.0% | $ | 142,493,831 |
Investment Abbreviations:
ADR—American Depositary Receipt
Notes to Schedule of Investments:
(a) All or a portion of this security was out on loan at April 30, 2013.
(b) Non-income producing security.
(c) The security has been segregated to satisfy the commitment to return the cash collateral received in securities lending transactions upon the borrower's return of the securities loaned. See Note 2J.
(d) The security and the Fund are advised by wholly owned subsidiaries of Invesco Ltd. and are therefore considered to be affiliated.
See Notes to Financial Statements.
68
Schedule of Investments
PowerShares WilderHill Progressive Energy Portfolio (PUW)
April 30, 2013
Number of Shares | Value | ||||||||||
Common Stocks and Other Equity Interests—100.0% | |||||||||||
Agriculture—2.4% | |||||||||||
17,192 | Andersons, Inc. (The) | $ | 937,308 | ||||||||
Auto Manufacturers—2.4% | |||||||||||
33,419 | Tata Motors Ltd. ADR (India) | 920,359 | |||||||||
Auto Parts & Equipment—6.9% | |||||||||||
68,700 | Exide Technologies(a) | 58,196 | |||||||||
24,431 | Johnson Controls, Inc. | 855,329 | |||||||||
21,508 | Tenneco, Inc.(a) | 831,715 | |||||||||
29,345 | Westport Innovations, Inc. (Canada)(a) | 911,749 | |||||||||
2,656,989 | |||||||||||
Building Materials—4.2% | |||||||||||
28,637 | Apogee Enterprises, Inc. | 729,671 | |||||||||
21,399 | Owens Corning(a) | 900,042 | |||||||||
1,629,713 | |||||||||||
Chemicals—8.7% | |||||||||||
21,876 | Methanex Corp. (Canada) | 927,105 | |||||||||
376,905 | Rentech, Inc. | 780,193 | |||||||||
13,129 | Rockwood Holdings, Inc. | 851,941 | |||||||||
18,552 | Sasol Ltd. ADR (South Africa) | 805,528 | |||||||||
3,364,767 | |||||||||||
Electric—6.0% | |||||||||||
249,420 | Centrais Eletricas Brasileiras SA ADR (Brazil) | 670,940 | |||||||||
69,417 | Companhia Energetica de Minas Gerais ADR (Brazil) | 890,620 | |||||||||
40,383 | Enersis SA ADR (Chile) | 762,431 | |||||||||
2,323,991 | |||||||||||
Electrical Components & Equipment—12.9% | |||||||||||
11,649 | Acuity Brands, Inc. | 849,911 | |||||||||
14,619 | Emerson Electric Co. | 811,501 | |||||||||
8,625 | Energizer Holdings, Inc. | 833,089 | |||||||||
18,810 | EnerSys(a) | 862,250 | |||||||||
22,883 | General Cable Corp.(a) | 789,006 | |||||||||
114,089 | GrafTech International Ltd.(a) | 819,159 | |||||||||
4,964,916 | |||||||||||
Electronics—5.8% | |||||||||||
20,058 | ESCO Technologies, Inc. | 721,486 | |||||||||
27,187 | Koninklijke Philips Electronics NV (Netherlands) | 750,361 | |||||||||
21,028 | Woodward, Inc. | 756,798 | |||||||||
2,228,645 | |||||||||||
Energy - Alternate Sources—2.8% | |||||||||||
62,266 | Clean Energy Fuels Corp.(a) | 821,288 | |||||||||
27,538 | Renewable Energy Group, Inc.(a) | 270,699 | |||||||||
1,091,987 |
Number of Shares | Value | ||||||||||
Common Stocks and Other Equity Interests (Continued) | |||||||||||
Engineering & Construction—6.2% | |||||||||||
14,540 | Chicago Bridge & Iron Co. NV (Netherlands) | $ | 782,107 | ||||||||
37,592 | Foster Wheeler AG (Switzerland)(a) | 793,191 | |||||||||
77,693 | McDermott International, Inc.(a) | 829,761 | |||||||||
2,405,059 | |||||||||||
Environmental Control—5.2% | |||||||||||
7,488 | ADA-ES, Inc.(a) | 206,744 | |||||||||
41,419 | Covanta Holding Corp. | 828,380 | |||||||||
52,578 | EnergySolutions, Inc.(a) | 217,147 | |||||||||
198,611 | Heckmann Corp.(a) | 732,874 | |||||||||
1,985,145 | |||||||||||
Hand/Machine Tools—2.0% | |||||||||||
9,926 | Regal-Beloit Corp. | 780,382 | |||||||||
Machinery - Diversified—4.9% | |||||||||||
30,173 | Altra Holdings, Inc. | 804,110 | |||||||||
10,453 | Chart Industries, Inc.(a) | 886,519 | |||||||||
11,578 | Global Power Equipment Group, Inc. | 191,037 | |||||||||
1,881,666 | |||||||||||
Mining—5.0% | |||||||||||
41,372 | Cameco Corp. (Canada) | 807,168 | |||||||||
609,243 | Denison Mines Corp. (Canada)(a) | 755,461 | |||||||||
12,887 | Luxfer Holdings PLC ADR (United Kingdom) | 227,971 | |||||||||
87,631 | Uranium Energy Corp.(a) | 135,828 | |||||||||
1,926,428 | |||||||||||
Miscellaneous Manufacturing—11.1% | |||||||||||
11,281 | A.O. Smith Corp. | 850,926 | |||||||||
13,434 | Eaton Corp. PLC (Ireland) | 824,982 | |||||||||
28,647 | Hexcel Corp.(a) | 873,734 | |||||||||
23,446 | LSB Industries, Inc.(a) | 765,746 | |||||||||
30,953 | PMFG, Inc.(a) | 178,289 | |||||||||
7,565 | Siemens AG ADR (Germany) | 790,618 | |||||||||
4,284,295 | |||||||||||
Oil & Gas—6.6% | |||||||||||
43,624 | Chesapeake Energy Corp. | 852,413 | |||||||||
11,014 | Range Resources Corp. | 809,749 | |||||||||
23,613 | Southwestern Energy Co.(a) | 883,599 | |||||||||
2,545,761 | |||||||||||
Semiconductors—2.4% | |||||||||||
24,312 | Veeco Instruments, Inc.(a) | 925,558 | |||||||||
Telecommunications—2.4% | |||||||||||
63,617 | Corning, Inc. | 922,447 |
See Notes to Financial Statements.
69
Schedule of Investments (Continued)
PowerShares WilderHill Progressive Energy Portfolio (PUW)
April 30, 2013
Number of Shares | Value | ||||||||||
Common Stocks and Other Equity Interests (Continued) | |||||||||||
Transportation—2.1% | |||||||||||
23,934 | Golar LNG Ltd. (Bermuda) | $ | 799,874 | ||||||||
Total Common Stocks and Other Equity Interests (Cost $34,993,836) | 38,575,290 | ||||||||||
Money Market Fund—0.2% | |||||||||||
65,163 | Goldman Sachs Financial Square Prime Obligations—Institutional Share Class (Cost $65,163) | 65,163 | |||||||||
Total Investments (Cost $35,058,999)—100.2% | 38,640,453 | ||||||||||
Liabilities in excess of other assets—(0.2)% | (56,330 | ) | |||||||||
Net Assets—100.0% | $ | 38,584,123 |
Investment Abbreviations:
ADR—American Depositary Receipt
Notes to Schedule of Investments:
(a) Non-income producing security.
See Notes to Financial Statements.
70
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Statements of Assets and Liabilities
April 30, 2013
PowerShares Aerospace & Defense Portfolio (PPA) | PowerShares CleantechTM Portfolio (PZD) | PowerShares DWA Technical LeadersTM Portfolio (PDP) | PowerShares Global Listed Private Equity Portfolio (PSP) | PowerShares Golden Dragon China Portfolio (PGJ) | PowerShares Lux Nanotech Portfolio (PXN) | ||||||||||||||||||||||
ASSETS: | |||||||||||||||||||||||||||
Unaffiliated investments, at value(a) | $ | 47,678,140 | $ | 71,164,733 | $ | 877,647,467 | $ | 405,733,577 | $ | 182,096,664 | $ | 19,721,674 | |||||||||||||||
Affiliated investments, at value | — | 4,859,640 | — | — | 38,435,700 | 1,466,100 | |||||||||||||||||||||
Total investments, at value | 47,678,140 | 76,024,373 | 877,647,467 | 405,733,577 | 220,532,364 | 21,187,774 | |||||||||||||||||||||
Cash | — | — | — | 2,729,736 | — | — | |||||||||||||||||||||
Cash segregated as collateral | — | — | — | 2,123,386 | — | — | |||||||||||||||||||||
Foreign currencies, at value | — | — | — | 49,196 | — | — | |||||||||||||||||||||
Receivables: | |||||||||||||||||||||||||||
Dividends | 40,985 | 175,908 | 193,353 | 527,810 | 30,477 | 3,911 | |||||||||||||||||||||
Investments sold | — | — | — | 9,869,361 | — | — | |||||||||||||||||||||
Foreign tax reclaims | — | 82,796 | 4,230 | 247,646 | — | — | |||||||||||||||||||||
Security lending | — | 29,036 | — | — | 31,311 | 5,878 | |||||||||||||||||||||
Shares sold | — | — | — | 2,024,967 | — | — | |||||||||||||||||||||
Expense waivers | — | 2,365 | — | — | — | 2,721 | |||||||||||||||||||||
Total Assets | 47,719,125 | 76,314,478 | 877,845,050 | 423,305,679 | 220,594,152 | 21,200,284 | |||||||||||||||||||||
LIABILITIES: | |||||||||||||||||||||||||||
Due to custodian | — | — | — | — | — | — | |||||||||||||||||||||
Payables: | |||||||||||||||||||||||||||
Expenses recaptured | 404 | — | — | 11,952 | 36,932 | — | |||||||||||||||||||||
Shares repurchased | — | — | — | — | — | — | |||||||||||||||||||||
Investments purchased | — | — | — | 12,143,145 | — | — | |||||||||||||||||||||
Collateral upon return of securities loaned | — | 4,859,640 | — | — | 38,435,700 | 1,466,100 | |||||||||||||||||||||
Collateral upon receipt of securities in-kind | — | — | — | 2,123,386 | — | — | |||||||||||||||||||||
Unrealized depreciation on swap agreements | — | — | — | 80,541 | — | — | |||||||||||||||||||||
Open written options, at value | — | — | — | — | — | — | |||||||||||||||||||||
Accrued advisory fees | 19,240 | 28,787 | 354,934 | 160,942 | 73,146 | 7,641 | |||||||||||||||||||||
Accrued trustees fees | 13,180 | 12,071 | 22,013 | 15,940 | 23,460 | 9,304 | |||||||||||||||||||||
Accrued expenses | 79,716 | 99,931 | 539,140 | 278,266 | 280,673 | 82,158 | |||||||||||||||||||||
Total Liabilities | 112,540 | 5,000,429 | 916,087 | 14,814,172 | 38,849,911 | 1,565,203 | |||||||||||||||||||||
NET ASSETS | $ | 47,606,585 | $ | 71,314,049 | $ | 876,928,963 | $ | 408,491,507 | $ | 181,744,241 | $ | 19,635,081 | |||||||||||||||
NET ASSETS CONSIST OF: | |||||||||||||||||||||||||||
Shares of beneficial interest | $ | 78,252,551 | $ | 148,003,936 | $ | 974,407,058 | $ | 441,197,009 | $ | 474,894,960 | $ | 101,492,339 | |||||||||||||||
Undistributed net investment income (loss) | 82,701 | 297,136 | 386,768 | 5,296,242 | (733,516 | ) | 109,584 | ||||||||||||||||||||
Undistributed net realized gain (loss) | (29,838,391 | ) | (83,887,962 | ) | (226,235,311 | ) | (100,036,047 | ) | (290,075,165 | ) | (82,493,871 | ) | |||||||||||||||
Net unrealized appreciation (depreciation) | (890,276 | ) | 6,900,939 | 128,370,448 | 62,034,303 | (2,342,038 | ) | 527,029 | |||||||||||||||||||
Net Assets | $ | 47,606,585 | $ | 71,314,049 | $ | 876,928,963 | $ | 408,491,507 | $ | 181,744,241 | $ | 19,635,081 | |||||||||||||||
Shares outstanding (unlimited amount authorized, $0.01 par value) | 2,050,000 | 2,800,000 | 27,600,000 | 34,900,000 | 9,250,000 | 2,900,000 | |||||||||||||||||||||
Net asset value | $ | 23.22 | $ | 25.47 | $ | 31.77 | $ | 11.70 | $ | 19.65 | $ | 6.77 | |||||||||||||||
Market price | $ | 23.20 | $ | 25.36 | $ | 31.76 | $ | 11.75 | $ | 19.59 | $ | 6.80 | |||||||||||||||
Unaffiliated investments, at cost | $ | 48,568,416 | $ | 64,264,277 | $ | 749,277,019 | $ | 343,626,426 | $ | 184,438,702 | $ | 19,194,645 | |||||||||||||||
Affiliated investments, at cost | $ | — | $ | 4,859,640 | $ | — | $ | — | $ | 38,435,700 | $ | 1,466,100 | |||||||||||||||
Total investments, at cost | $ | 48,568,416 | $ | 69,123,917 | $ | 749,277,019 | $ | 343,626,426 | $ | 222,874,402 | $ | 20,660,745 | |||||||||||||||
Foreign currencies, at cost | $ | — | $ | — | $ | — | $ | 49,196 | $ | — | $ | — | |||||||||||||||
Premium received on written options | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | |||||||||||||||
(a)Includes securities on loan with an aggregate value of | $ | — | $ | 4,712,439 | $ | — | $ | — | $ | 37,168,540 | $ | 1,327,031 |
See Notes to Financial Statements.
72
PowerShares S&P 500 BuyWrite Portfolio (PBP) | PowerShares S&P 500® High Quality Portfolio (SPHQ) | PowerShares Water Resources Portfolio (PHO) | PowerShares WilderHill Clean Energy Portfolio (PBW) | PowerShares WilderHill Progressive Energy Portfolio (PUW) | |||||||||||||||||||
ASSETS: | |||||||||||||||||||||||
Unaffiliated investments, at value(a) | $ | 211,498,908 | $ | 228,746,963 | $ | 877,251,227 | $ | 142,520,131 | $ | 38,640,453 | |||||||||||||
Affiliated investments, at value | 208,341 | — | 2,470,351 | 42,344,925 | — | ||||||||||||||||||
Total investments, at value | 211,707,249 | 228,746,963 | 879,721,578 | 184,865,056 | 38,640,453 | ||||||||||||||||||
Cash | — | — | — | — | — | ||||||||||||||||||
Cash segregated as collateral | — | — | — | — | — | ||||||||||||||||||
Foreign currencies, at value | — | — | — | — | — | ||||||||||||||||||
Receivables: | |||||||||||||||||||||||
Dividends | 200,739 | 230,302 | 917,441 | 101,452 | 32,617 | ||||||||||||||||||
Investments sold | 4,626,083 | — | — | — | — | ||||||||||||||||||
Foreign tax reclaims | 144 | — | 61,364 | 32,697 | 12,090 | ||||||||||||||||||
Security lending | — | — | 3,504 | 252,192 | — | ||||||||||||||||||
Shares sold | — | 1,770,322 | — | 702,367 | — | ||||||||||||||||||
Expense waivers | — | — | — | — | 1,130 | ||||||||||||||||||
Total Assets | 216,534,215 | 230,747,587 | 880,703,887 | 185,953,764 | 38,686,290 | ||||||||||||||||||
LIABILITIES: | |||||||||||||||||||||||
Due to custodian | 140,029 | — | 73,499 | — | — | ||||||||||||||||||
Payables: | |||||||||||||||||||||||
Expenses recaptured | — | 3,121 | — | 36,520 | — | ||||||||||||||||||
Shares repurchased | 4,166,940 | — | — | — | — | ||||||||||||||||||
Investments purchased | 268,039 | 1,765,696 | — | 739,121 | — | ||||||||||||||||||
Collateral upon return of securities loaned | — | — | 2,470,351 | 42,344,925 | — | ||||||||||||||||||
Collateral upon receipt of securities in-kind | — | — | — | — | — | ||||||||||||||||||
Unrealized depreciation on swap agreements | — | — | — | — | — | ||||||||||||||||||
Open written options, at value | 6,604,520 | — | — | — | — | ||||||||||||||||||
Accrued advisory fees | 132,858 | 52,428 | 362,900 | 55,178 | 15,606 | ||||||||||||||||||
Accrued trustees fees | — | 12,659 | 65,733 | 36,751 | 9,308 | ||||||||||||||||||
Accrued expenses | — | 177,614 | 667,109 | 247,438 | 77,253 | ||||||||||||||||||
Total Liabilities | 11,312,386 | 2,011,518 | 3,639,592 | 43,459,933 | 102,167 | ||||||||||||||||||
NET ASSETS | $ | 205,221,829 | $ | 228,736,069 | $ | 877,064,295 | $ | 142,493,831 | $ | 38,584,123 | |||||||||||||
NET ASSETS CONSIST OF: | |||||||||||||||||||||||
Shares of beneficial interest | $ | 197,856,882 | $ | 327,522,994 | $ | 1,294,397,190 | $ | 1,606,516,694 | $ | 67,573,784 | |||||||||||||
Undistributed net investment income (loss) | 513,869 | 527,274 | 1,028,186 | 1,366,484 | 226,485 | ||||||||||||||||||
Undistributed net realized gain (loss) | (20,482,519 | ) | (140,999,253 | ) | (572,988,604 | ) | (1,451,330,291 | ) | (32,797,600 | ) | |||||||||||||
Net unrealized appreciation (depreciation) | 27,333,597 | 41,685,054 | 154,627,523 | (14,059,056 | ) | 3,581,454 | |||||||||||||||||
Net Assets | $ | 205,221,829 | $ | 228,736,069 | $ | 877,064,295 | $ | 142,493,831 | $ | 38,584,123 | |||||||||||||
Shares outstanding (unlimited amount authorized, $0.01 par value) | 9,850,000 | 12,800,000 | 39,750,000 | 29,750,000 | 1,400,000 | ||||||||||||||||||
Net asset value | $ | 20.83 | $ | 17.87 | $ | 22.06 | $ | 4.79 | $ | 27.56 | |||||||||||||
Market price | $ | 20.83 | $ | 17.87 | $ | 22.05 | $ | 4.79 | $ | 27.55 | |||||||||||||
Unaffiliated investments, at cost | $ | 180,557,677 | $ | 187,061,909 | $ | 722,623,704 | $ | 156,579,187 | $ | 35,058,999 | |||||||||||||
Affiliated investments, at cost | $ | 151,814 | $ | — | $ | 2,470,351 | $ | 42,344,925 | $ | — | |||||||||||||
Total investments, at cost | $ | 180,709,491 | $ | 187,061,909 | $ | 725,094,055 | $ | 198,924,112 | $ | 35,058,999 | |||||||||||||
Foreign currencies, at cost | $ | — | $ | — | $ | — | $ | — | $ | — | |||||||||||||
Premium received on written options | $ | 2,940,359 | $ | — | $ | — | $ | — | $ | — | |||||||||||||
(a)Includes securities on loan with an aggregate value of | $ | — | $ | — | $ | 2,466,115 | $ | 40,465,961 | $ | — |
73
Statements of Operations
Year Ended April 30, 2013
PowerShares Aerospace & Defense Portfolio (PPA) | PowerShares CleantechTM Portfolio (PZD) | PowerShares DWA Technical LeadersTM Portfolio (PDP) | PowerShares Global Listed Private Equity Portfolio (PSP) | PowerShares Golden Dragon China Portfolio (PGJ) | PowerShares Lux Nanotech Portfolio (PXN) | ||||||||||||||||||||||
INVESTMENT INCOME: | |||||||||||||||||||||||||||
Unaffiliated dividend income | $ | 1,353,627 | $ | 1,041,083 | $ | 10,067,510 | $ | 10,199,962 | $ | 4,230,366 | $ | 138,238 | |||||||||||||||
Affiliated dividend income | — | — | — | — | — | — | |||||||||||||||||||||
Securities lending income | — | 352,617 | — | — | 917,964 | 297,540 | |||||||||||||||||||||
Foreign withholding tax | — | (102,671 | ) | (4,419 | ) | (420,700 | ) | (283,371 | ) | (878 | ) | ||||||||||||||||
Total Income | 1,353,627 | 1,291,029 | 10,063,091 | 9,779,262 | 4,864,959 | 434,900 | |||||||||||||||||||||
EXPENSES: | |||||||||||||||||||||||||||
Advisory fees | 238,578 | 351,057 | 3,386,578 | 1,543,965 | 979,097 | 101,821 | |||||||||||||||||||||
Accounting & administration fees | 57,844 | 57,844 | 156,511 | 69,127 | 57,029 | 57,844 | |||||||||||||||||||||
Sub-licensing | 28,630 | 52,659 | 677,316 | 308,793 | 195,819 | 20,364 | |||||||||||||||||||||
Professional fees | 17,718 | 23,826 | 55,640 | 47,536 | 13,777 | 43,298 | |||||||||||||||||||||
Trustees fees | 6,476 | 6,874 | 20,982 | 12,020 | 10,183 | 5,750 | |||||||||||||||||||||
Custodian & transfer agent fees | 3,091 | 26,457 | 35,111 | 95,481 | 183,417 | 3,099 | |||||||||||||||||||||
Printing | (7,975 | ) | 5,362 | 160,485 | 64,323 | 11,618 | (7,612 | ) | |||||||||||||||||||
Recapture | — | — | 6,390 | — | — | — | |||||||||||||||||||||
Other expenses | 7,297 | 11,707 | 20,637 | 27,465 | 11,451 | 6,836 | |||||||||||||||||||||
Total Expenses | 351,659 | 535,786 | 4,519,650 | 2,168,710 | 1,462,391 | 231,400 | |||||||||||||||||||||
Less: Waivers | (36,735 | ) | (61,862 | ) | — | (7,159 | ) | (91,655 | ) | (88,862 | ) | ||||||||||||||||
Net Expenses | 314,924 | 473,924 | 4,519,650 | 2,161,551 | 1,370,736 | 142,538 | |||||||||||||||||||||
Net Investment Income | 1,038,703 | 817,105 | 5,543,441 | 7,617,711 | 3,494,223 | 292,362 | |||||||||||||||||||||
REALIZED AND UNREALIZED GAIN (LOSS): | |||||||||||||||||||||||||||
Net realized gain (loss) from: | |||||||||||||||||||||||||||
Investment securities | (2,219,356 | ) | (9,735,752 | ) | (9,210,387 | ) | (5,734,635 | ) | (75,527,957 | ) | (5,935,379 | ) | |||||||||||||||
Swap agreements | — | — | — | 14,790,136 | — | — | |||||||||||||||||||||
Written options | — | — | — | — | — | — | |||||||||||||||||||||
In-kind redemptions | 1,326,054 | 4,983,159 | 83,386,768 | 8,807,864 | 11,580,807 | 5,505,352 | |||||||||||||||||||||
Foreign currencies | — | (34,293 | ) | — | (272,618 | ) | — | — | |||||||||||||||||||
Net increase from payment by affiliate (Note 3) | — | — | — | — | 36,920 | — | |||||||||||||||||||||
Net realized gain (loss) | (893,302 | ) | (4,786,886 | ) | 74,176,381 | 17,590,747 | (63,910,230 | ) | (430,027 | ) | |||||||||||||||||
Change in net unrealized appreciation (depreciation) on: | — | — | — | — | — | — | |||||||||||||||||||||
Investment securities | 7,542,587 | 9,902,964 | 33,244,128 | 64,328,855 | 41,814,758 | 2,268,946 | |||||||||||||||||||||
Swap agreements | — | — | — | (482,089 | ) | — | — | ||||||||||||||||||||
Written options | — | — | — | — | — | — | |||||||||||||||||||||
Foreign currencies | — | (807 | ) | — | 11,053 | — | — | ||||||||||||||||||||
Net change in unrealized appreciation | 7,542,587 | 9,902,157 | 33,244,128 | 63,857,819 | 41,814,758 | 2,268,946 | |||||||||||||||||||||
Net realized and unrealized gain (loss) | 6,649,285 | 5,115,271 | 107,420,509 | 81,448,566 | (22,095,472 | ) | 1,838,919 | ||||||||||||||||||||
Net increase (decrease) in net assets resulting from operations | $ | 7,687,988 | $ | 5,932,376 | $ | 112,963,950 | $ | 89,066,277 | $ | (18,601,249 | ) | $ | 2,131,281 |
See Notes to Financial Statements.
74
PowerShares S&P 500 BuyWrite Portfolio (PBP) | PowerShares S&P 500® High Quality Portfolio (SPHQ) | PowerShares Water Resources Portfolio (PHO) | PowerShares WilderHill Clean Energy Portfolio (PBW) | PowerShares WilderHill Progressive Energy Portfolio (PUW) | |||||||||||||||||||
INVESTMENT INCOME: | |||||||||||||||||||||||
Unaffiliated dividend income | $ | 5,608,949 | $ | 4,194,405 | $ | 11,997,869 | $ | 794,024 | $ | 858,420 | |||||||||||||
Affiliated dividend income | 5,541 | — | — | — | — | ||||||||||||||||||
Securities lending income | — | — | 161,448 | 3,542,545 | — | ||||||||||||||||||
Foreign withholding tax | (4,171 | ) | — | (536,566 | ) | (23,299 | ) | (31,136 | ) | ||||||||||||||
Total Income | 5,610,319 | 4,194,405 | 11,622,751 | 4,313,270 | 827,284 | ||||||||||||||||||
EXPENSES: | |||||||||||||||||||||||
Advisory fees | 1,780,173 | 698,787 | 4,077,809 | 678,983 | 196,934 | ||||||||||||||||||
Accounting & administration fees | — | 60,694 | 179,982 | 52,868 | 57,844 | ||||||||||||||||||
Sub-licensing | — | 100,547 | 611,672 | 135,797 | 39,387 | ||||||||||||||||||
Professional fees | — | 25,044 | (3,656 | ) | (8,215 | ) | 21,695 | ||||||||||||||||
Trustees fees | — | 9,258 | 25,081 | 8,477 | 6,125 | ||||||||||||||||||
Custodian & transfer agent fees | — | 9,950 | 24,545 | 190,448 | 8,269 | ||||||||||||||||||
Printing | — | 32,174 | 117,803 | (125,000 | ) | 2,412 | |||||||||||||||||
Recapture | — | — | — | 10,964 | — | ||||||||||||||||||
Other expenses | — | 8,311 | 16,405 | 6,253 | 8,150 | ||||||||||||||||||
Total Expenses | 1,780,173 | 944,765 | 5,049,641 | 950,575 | 340,816 | ||||||||||||||||||
Less: Waivers | — | (271,138 | ) | — | — | (64,090 | ) | ||||||||||||||||
Net Expenses | 1,780,173 | 673,627 | 5,049,641 | 950,575 | 276,726 | ||||||||||||||||||
Net Investment Income | 3,830,146 | 3,520,778 | 6,573,110 | 3,362,695 | 550,558 | ||||||||||||||||||
REALIZED AND UNREALIZED GAIN (LOSS): | |||||||||||||||||||||||
Net realized gain (loss) from: | |||||||||||||||||||||||
Investment securities | (2,777,807 | ) | (699,398 | ) | (39,387,223 | ) | (141,811,242 | ) | (1,430,702 | ) | |||||||||||||
Swap agreements | — | — | — | — | — | ||||||||||||||||||
Written options | (24,531,975 | ) | — | — | — | — | |||||||||||||||||
In-kind redemptions | 36,087,109 | 5,878,015 | 30,803,787 | 3,446,985 | 2,187,775 | ||||||||||||||||||
Foreign currencies | — | — | — | — | — | ||||||||||||||||||
Net increase from payment by affiliate (Note 3) | — | — | — | — | — | ||||||||||||||||||
Net realized gain (loss) | 8,777,327 | 5,178,617 | (8,583,436 | ) | (138,364,257 | ) | 757,073 | ||||||||||||||||
Change in net unrealized appreciation (depreciation) on: | — | — | — | — | — | ||||||||||||||||||
Investment securities | 3,849,014 | 24,339,195 | 137,318,912 | 125,881,934 | 791,507 | ||||||||||||||||||
Swap agreements | — | — | — | — | — | ||||||||||||||||||
Written options | (3,442,309 | ) | — | — | — | — | |||||||||||||||||
Foreign currencies | — | — | — | — | — | ||||||||||||||||||
Net change in unrealized appreciation | 406,705 | 24,339,195 | 137,318,912 | 125,881,934 | 791,507 | ||||||||||||||||||
Net realized and unrealized gain (loss) | 9,184,032 | 29,517,812 | 128,735,476 | (12,482,323 | ) | 1,548,580 | |||||||||||||||||
Net increase (decrease) in net assets resulting from operations | $ | 13,014,178 | $ | 33,038,590 | $ | 135,308,586 | $ | (9,119,628 | ) | $ | 2,099,138 |
75
Statements of Changes in Net Assets
PowerShares Aerospace & Defense Portfolio (PPA) | PowerShares CleantechTM Portfolio (PZD) | PowerShares DWA Technical LeadersTM Portfolio (PDP) | |||||||||||||||||||||||||
Year Ended April 30, 2013 | Year Ended April 30, 2012 | Year Ended April 30, 2013 | Year Ended April 30, 2012 | Year Ended April 30, 2013 | Year Ended April 30, 2012 | ||||||||||||||||||||||
OPERATIONS: | |||||||||||||||||||||||||||
Net investment income | $ | 1,038,703 | $ | 860,977 | $ | 817,105 | $ | 1,141,903 | $ | 5,543,441 | $ | 1,379,803 | |||||||||||||||
Net realized gain (loss) | (893,302 | ) | (13,846,792 | ) | (4,786,886 | ) | (3,398,753 | ) | 74,176,381 | (11,337,354 | ) | ||||||||||||||||
Net increase from payment by affiliate (see Note 3) | — | — | — | — | — | — | |||||||||||||||||||||
Net change in unrealized appreciation (depreciation) | 7,542,587 | 1,118,071 | 9,902,157 | (34,036,460 | ) | 33,244,128 | 24,442,056 | ||||||||||||||||||||
Net increase (decrease) in net assets resulting from operations | 7,687,988 | (11,867,744 | ) | 5,932,376 | (36,293,310 | ) | 112,963,950 | 14,484,505 | |||||||||||||||||||
DISTRIBUTIONS TO SHAREHOLDERS FROM: | |||||||||||||||||||||||||||
Net investment income | (1,029,052 | ) | (939,444 | ) | (712,757 | ) | (997,420 | ) | (5,799,247 | ) | (727,024 | ) | |||||||||||||||
Net realized gains | — | — | — | — | — | — | |||||||||||||||||||||
Return of capital | — | — | — | — | — | — | |||||||||||||||||||||
(1,029,052 | ) | (939,444 | ) | (712,757 | ) | (997,420 | ) | (5,799,247 | ) | (727,024 | ) | ||||||||||||||||
SHAREHOLDER TRANSACTIONS: | |||||||||||||||||||||||||||
Proceeds from shares sold | 998,228 | 524,855,293 | — | 5,578,288 | 698,921,973 | 345,983,439 | |||||||||||||||||||||
Value of shares repurchased | (15,017,115 | ) | (565,052,820 | ) | (34,211,049 | ) | (30,512,520 | ) | (500,235,301 | ) | (239,567,471 | ) | |||||||||||||||
Net increase (decrease) in net assets resulting from shares transactions | (14,018,887 | ) | (40,197,527 | ) | (34,211,049 | ) | (24,934,232 | ) | 198,686,672 | 106,415,968 | |||||||||||||||||
Increase (Decrease) in Net Assets | (7,359,951 | ) | (53,004,715 | ) | (28,991,430 | ) | (62,224,962 | ) | 305,851,375 | 120,173,449 | |||||||||||||||||
NET ASSETS: | |||||||||||||||||||||||||||
Beginning of year | 54,966,536 | 107,971,251 | 100,305,479 | 162,530,441 | 571,077,588 | 450,904,139 | |||||||||||||||||||||
End of year | $ | 47,606,585 | $ | 54,966,536 | $ | 71,314,049 | $ | 100,305,479 | $ | 876,928,963 | $ | 571,077,588 | |||||||||||||||
Undistributed net investment income (loss) at end of year | $ | 82,701 | $ | 73,050 | $ | 297,136 | $ | 227,081 | $ | 386,768 | $ | 642,574 | |||||||||||||||
CHANGES IN SHARES OUTSTANDING: | |||||||||||||||||||||||||||
Shares sold | 50,000 | 28,300,000 | — | 200,000 | 24,850,000 | 13,600,000 | |||||||||||||||||||||
Shares repurchased | (750,000 | ) | (30,800,000 | ) | (1,550,000 | ) | (1,250,000 | ) | (17,750,000 | ) | (10,100,000 | ) | |||||||||||||||
Shares outstanding, beginning of year | 2,750,000 | 5,250,000 | 4,350,000 | 5,400,000 | 20,500,000 | 17,000,000 | |||||||||||||||||||||
Shares outstanding, end of year | 2,050,000 | 2,750,000 | 2,800,000 | 4,350,000 | 27,600,000 | 20,500,000 |
See Notes to Financial Statements.
76
PowerShares Global Listed Private Equity Portfolio (PSP) | PowerShares Golden Dragon China Portfolio (PGJ) | PowerShares Lux Nanotech Portfolio (PXN) | |||||||||||||||||||||||||
Year Ended April 30, 2013 | Year Ended April 30, 2012 | Year Ended April 30, 2013 | Year Ended April 30, 2012 | Year Ended April 30, 2013 | Year Ended April 30, 2012 | ||||||||||||||||||||||
OPERATIONS: | |||||||||||||||||||||||||||
Net investment income | $ | 7,617,711 | $ | 9,317,128 | $ | 3,494,223 | $ | 6,201,991 | $ | 292,362 | $ | 236,476 | |||||||||||||||
Net realized gain (loss) | 17,590,747 | (23,337,975 | ) | (63,947,150 | ) | (15,531,653 | ) | (430,027 | ) | (10,431,056 | ) | ||||||||||||||||
Net increase from payment by affiliate (see Note 3) | — | — | 36,920 | — | — | — | |||||||||||||||||||||
Net change in unrealized appreciation (depreciation) | 63,857,819 | (97,829,848 | ) | 41,814,758 | (92,384,443 | ) | 2,268,946 | (2,197,714 | ) | ||||||||||||||||||
Net increase (decrease) in net assets resulting from operations | 89,066,277 | (111,850,695 | ) | (18,601,249 | ) | (101,714,105 | ) | 2,131,281 | (12,392,294 | ) | |||||||||||||||||
DISTRIBUTIONS TO SHAREHOLDERS FROM: | |||||||||||||||||||||||||||
Net investment income | (12,397,099 | ) | (23,559,182 | ) | (4,722,570 | ) | (6,163,053 | ) | (319,441 | ) | (94,200 | ) | |||||||||||||||
Net realized gains | — | — | — | — | — | — | |||||||||||||||||||||
Return of capital | — | (2,711,317 | ) | — | — | — | — | ||||||||||||||||||||
(12,397,099 | ) | (26,270,499 | ) | (4,722,570 | ) | (6,163,053 | ) | (319,441 | ) | (94,200 | ) | ||||||||||||||||
SHAREHOLDER TRANSACTIONS: | |||||||||||||||||||||||||||
Proceeds from shares sold | 70,242,710 | 67,015,149 | 13,060,293 | 13,469,422 | 36,885,485 | 3,678,713 | |||||||||||||||||||||
Value of shares repurchased | (35,164,174 | ) | (125,772,089 | ) | (53,830,199 | ) | (106,046,088 | ) | (41,345,037 | ) | (7,299,902 | ) | |||||||||||||||
Net increase (decrease) in net assets resulting from shares transactions | 35,078,536 | (58,756,940 | ) | (40,769,906 | ) | (92,576,666 | ) | (4,459,552 | ) | (3,621,189 | ) | ||||||||||||||||
Increase (Decrease) in Net Assets | 111,747,714 | (196,878,134 | ) | (64,093,725 | ) | (200,453,824 | ) | (2,647,712 | ) | (16,107,683 | ) | ||||||||||||||||
NET ASSETS: | |||||||||||||||||||||||||||
Beginning of year | 296,743,793 | 493,621,927 | 245,837,966 | 446,291,790 | 22,282,793 | 38,390,476 | |||||||||||||||||||||
End of year | $ | 408,491,507 | $ | 296,743,793 | $ | 181,744,241 | $ | 245,837,966 | $ | 19,635,081 | $ | 22,282,793 | |||||||||||||||
Undistributed net investment income (loss) at end of year | $ | 5,296,242 | $ | (6,250,767 | ) | $ | (733,516 | ) | $ | 467,272 | $ | 109,584 | $ | 136,663 | |||||||||||||
CHANGES IN SHARES OUTSTANDING: | |||||||||||||||||||||||||||
Shares sold | 6,400,000 | 6,650,000 | 700,000 | 650,000 | 5,750,000 | 450,000 | |||||||||||||||||||||
Shares repurchased | (3,700,000 | ) | (15,000,000 | ) | (2,850,000 | ) | (4,650,000 | ) | (6,350,000 | ) | (950,000 | ) | |||||||||||||||
Shares outstanding, beginning of year | 32,200,000 | 40,550,000 | 11,400,000 | 15,400,000 | 3,500,000 | 4,000,000 | |||||||||||||||||||||
Shares outstanding, end of year | 34,900,000 | 32,200,000 | 9,250,000 | 11,400,000 | 2,900,000 | 3,500,000 |
77
Statements of Changes in Net Assets (Continued)
PowerShares S&P 500 BuyWrite Portfolio (PBP) | PowerShares S&P 500® High Quality Portfolio (SPHQ) | PowerShares Water Resources Portfolio (PHO) | |||||||||||||||||||||||||
Year Ended April 30, 2013 | Year Ended April 30, 2012 | Year Ended April 30, 2013 | Year Ended April 30, 2012 | Year Ended April 30, 2013 | Year Ended April 30, 2012 | ||||||||||||||||||||||
OPERATIONS: | |||||||||||||||||||||||||||
Net investment income | $ | 3,830,146 | $ | 1,534,309 | $ | 3,520,778 | $ | 2,322,428 | $ | 6,573,110 | $ | 7,284,706 | |||||||||||||||
Net realized gain (loss) | 8,777,327 | 7,542,909 | 5,178,617 | 10,656,169 | (8,583,436 | ) | 6,527,069 | ||||||||||||||||||||
Net change in unrealized appreciation (depreciation) | 406,705 | (2,984,366 | ) | 24,339,195 | (2,196,049 | ) | 137,318,912 | (126,361,208 | ) | ||||||||||||||||||
Net increase (decrease) in net assets resulting from operations | 13,014,178 | 6,092,852 | 33,038,590 | 10,782,548 | 135,308,586 | (112,549,433 | ) | ||||||||||||||||||||
DISTRIBUTIONS TO SHAREHOLDERS FROM: | |||||||||||||||||||||||||||
Net investment income | (8,424,421 | ) | (9,784,068 | ) | (3,292,190 | ) | (2,688,575 | ) | (6,646,911 | ) | (7,241,759 | ) | |||||||||||||||
Net realized gains | (2,056,844 | ) | (499,499 | ) | — | — | — | — | |||||||||||||||||||
Return of capital | — | — | — | — | — | — | |||||||||||||||||||||
(10,481,265 | ) | (10,283,567 | ) | (3,292,190 | ) | (2,688,575 | ) | (6,646,911 | ) | (7,241,759 | ) | ||||||||||||||||
SHAREHOLDER TRANSACTIONS: | |||||||||||||||||||||||||||
Proceeds from shares sold | 155,680,453 | 67,588,389 | 76,363,194 | 78,565,916 | 53,224,195 | 301,435,959 | |||||||||||||||||||||
Value of shares repurchased | (107,519,457 | ) | (29,381,078 | ) | (23,794,170 | ) | (52,933,980 | ) | (130,331,858 | ) | (616,782,513 | ) | |||||||||||||||
Net increase (decrease) in net assets resulting from shares transactions | 48,160,996 | 38,207,311 | 52,569,024 | 25,631,936 | (77,107,663 | ) | (315,346,554 | ) | |||||||||||||||||||
Increase (Decrease) in Net Assets | 50,693,909 | 34,016,596 | 82,315,424 | 33,725,909 | 51,554,012 | (435,137,746 | ) | ||||||||||||||||||||
NET ASSETS: | |||||||||||||||||||||||||||
Beginning of year | 154,527,920 | 120,511,324 | 146,420,645 | 112,694,736 | 825,510,283 | 1,260,648,029 | |||||||||||||||||||||
End of year | $ | 205,221,829 | $ | 154,527,920 | $ | 228,736,069 | $ | 146,420,645 | $ | 877,064,295 | $ | 825,510,283 | |||||||||||||||
Undistributed net investment income (loss) at end of year | $ | 513,869 | $ | 273,524 | $ | 527,274 | $ | 298,686 | $ | 1,028,186 | $ | 1,101,987 | |||||||||||||||
CHANGES IN SHARES OUTSTANDING: | |||||||||||||||||||||||||||
Shares sold | 7,650,000 | 3,350,000 | 4,700,000 | 5,600,000 | 2,550,000 | 16,550,000 | |||||||||||||||||||||
Shares repurchased | (5,300,000 | ) | (1,450,000 | ) | (1,450,000 | ) | (3,750,000 | ) | (6,750,000 | ) | (34,850,000 | ) | |||||||||||||||
Shares outstanding, beginning of year | 7,500,000 | 5,600,000 | 9,550,000 | 7,700,000 | 43,950,000 | 62,250,000 | |||||||||||||||||||||
Shares outstanding, end of year | 9,850,000 | 7,500,000 | 12,800,000 | 9,550,000 | 39,750,000 | 43,950,000 |
See Notes to Financial Statements.
78
PowerShares WilderHill Clean Energy Portfolio (PBW) | PowerShares WilderHill Progressive Energy Portfolio (PUW) | ||||||||||||||||||
Year Ended April 30, 2013 | Year Ended April 30, 2012 | Year Ended April 30, 2013 | Year Ended April 30, 2012 | ||||||||||||||||
OPERATIONS: | |||||||||||||||||||
Net investment income | $ | 3,362,695 | $ | 8,694,895 | $ | 550,558 | $ | 294,125 | |||||||||||
Net realized gain (loss) | (138,364,257 | ) | (175,832,551 | ) | 757,073 | 140,095 | |||||||||||||
Net change in unrealized appreciation (depreciation) | 125,881,934 | (72,572,249 | ) | 791,507 | (12,543,208 | ) | |||||||||||||
Net increase (decrease) in net assets resulting from operations | (9,119,628 | ) | (239,709,905 | ) | 2,099,138 | (12,108,988 | ) | ||||||||||||
DISTRIBUTIONS TO SHAREHOLDERS FROM: | |||||||||||||||||||
Net investment income | (4,631,864 | ) | (6,029,472 | ) | (318,497 | ) | (512,778 | ) | |||||||||||
Net realized gains | — | — | — | — | |||||||||||||||
Return of capital | — | — | — | — | |||||||||||||||
(4,631,864 | ) | (6,029,472 | ) | (318,497 | ) | (512,778 | ) | ||||||||||||
SHAREHOLDER TRANSACTIONS: | |||||||||||||||||||
Proceeds from shares sold | 24,870,370 | 41,977,234 | — | 7,792,210 | |||||||||||||||
Value of shares repurchased | (46,640,787 | ) | (159,694,207 | ) | (11,055,489 | ) | (22,486,730 | ) | |||||||||||
Net increase (decrease) in net assets resulting from shares transactions | (21,770,417 | ) | (117,716,973 | ) | (11,055,489 | ) | (14,694,520 | ) | |||||||||||
Increase (Decrease) in Net Assets | (35,521,909 | ) | (363,456,350 | ) | (9,274,848 | ) | (27,316,286 | ) | |||||||||||
NET ASSETS: | |||||||||||||||||||
Beginning of year | 178,015,740 | 541,472,090 | 47,858,971 | 75,175,257 | |||||||||||||||
End of year | $ | 142,493,831 | $ | 178,015,740 | $ | 38,584,123 | $ | 47,858,971 | |||||||||||
Undistributed net investment income (loss) at end of year | $ | 1,366,484 | $ | 2,635,653 | $ | 226,485 | $ | (6,596 | ) | ||||||||||
CHANGES IN SHARES OUTSTANDING: | |||||||||||||||||||
Shares sold | 5,500,000 | 7,250,000 | — | 300,000 | |||||||||||||||
Shares repurchased | (10,800,000 | ) | (24,500,000 | ) | (450,000 | ) | (900,000 | ) | |||||||||||
Shares outstanding, beginning of year | 35,050,000 | 52,300,000 | 1,850,000 | 2,450,000 | |||||||||||||||
Shares outstanding, end of year | 29,750,000 | 35,050,000 | 1,400,000 | 1,850,000 |
79
Financial Highlights
PowerShares Aerospace & Defense Portfolio (PPA)
Year Ended April 30, | |||||||||||||||||||||||
2013 | 2012 | 2011 | 2010 | 2009 | |||||||||||||||||||
PER SHARE OPERATING PERFORMANCE: | |||||||||||||||||||||||
Net asset value at beginning of year | $ | 19.99 | $ | 20.57 | $ | 19.07 | $ | 13.38 | $ | 20.93 | |||||||||||||
Net investment income(a) | 0.44 | 0.21 | 0.18 | 0.17 | 0.16 | ||||||||||||||||||
Net realized and unrealized gain (loss) on investments | 3.22 | (0.60 | ) | 1.49 | 5.73 | (7.56 | ) | ||||||||||||||||
Total from investment operations | 3.66 | (0.39 | ) | 1.67 | 5.90 | (7.40 | ) | ||||||||||||||||
Distributions to shareholders from: | |||||||||||||||||||||||
Net investment income | (0.43 | ) | (0.19 | ) | (0.17 | ) | (0.21 | ) | (0.15 | ) | |||||||||||||
Net asset value at end of year | $ | 23.22 | $ | 19.99 | $ | 20.57 | $ | 19.07 | $ | 13.38 | |||||||||||||
Market price at end of year(b) | $ | 23.20 | $ | 19.98 | $ | 20.57 | $ | 19.07 | $ | 13.37 | |||||||||||||
NET ASSET VALUE, TOTAL RETURN(c) | 18.69 | % | (1.82 | )% | 8.91 | % | 44.36 | % | (35.46 | )% | |||||||||||||
MARKET PRICE TOTAL RETURN(c) | 18.65 | % | (1.87 | )% | 8.91 | % | 44.47 | % | (35.48 | )% | |||||||||||||
RATIOS/SUPPLEMENTAL DATA: | |||||||||||||||||||||||
Net assets at end of year (000's omitted) | $ | 47,607 | $ | 54,967 | $ | 107,971 | $ | 137,338 | $ | 116,429 | |||||||||||||
Ratio to average net assets of: | |||||||||||||||||||||||
Expenses, after Waivers | 0.66 | % | 0.66 | % | 0.66 | % | 0.66 | % | 0.66 | % | |||||||||||||
Expenses, prior to Waivers | 0.74 | % | 0.76 | % | 0.73 | % | 0.69 | % | 0.67 | % | |||||||||||||
Net investment income, after Waivers | 2.18 | % | 1.09 | % | 0.99 | % | 1.08 | % | 1.01 | % | |||||||||||||
Portfolio turnover rate(d) | 17 | % | 25 | % | 12 | % | 17 | % | 9 | % |
PowerShares CleantechTM Portfolio (PZD)
Year Ended April 30, | |||||||||||||||||||||||
2013 | 2012 | 2011 | 2010 | 2009 | |||||||||||||||||||
PER SHARE OPERATING PERFORMANCE: | |||||||||||||||||||||||
Net asset value at beginning of year | $ | 23.06 | $ | 30.10 | $ | 25.00 | $ | 19.25 | $ | 33.63 | |||||||||||||
Net investment income (loss)(a) | 0.26 | 0.24 | 0.06 | 0.03 | (0.00 | )(e) | |||||||||||||||||
Net realized and unrealized gain (loss) on investments | 2.37 | (7.07 | ) | 5.05 | 5.77 | (14.38 | ) | ||||||||||||||||
Total from investment operations | 2.63 | (6.83 | ) | 5.11 | 5.80 | (14.38 | ) | ||||||||||||||||
Distributions to shareholders from: | |||||||||||||||||||||||
Net investment income | (0.22 | ) | (0.21 | ) | (0.01 | ) | (0.04 | ) | — | ||||||||||||||
Return of capital | — | — | — | (0.01 | ) | — | |||||||||||||||||
Total distributions | (0.22 | ) | (0.21 | ) | (0.01 | ) | (0.05 | ) | — | ||||||||||||||
Net asset value at end of year | $ | 25.47 | $ | 23.06 | $ | 30.10 | $ | 25.00 | $ | 19.25 | |||||||||||||
Market price at end of year(b) | $ | 25.36 | $ | 22.98 | $ | 30.08 | $ | 24.80 | $ | 19.35 | |||||||||||||
NET ASSET VALUE, TOTAL RETURN(c) | 11.59 | % | (22.65 | )% | 20.43 | % | 30.16 | % | (42.76 | )% | |||||||||||||
MARKET PRICE TOTAL RETURN(c) | 11.50 | % | (22.87 | )% | 21.32 | % | 28.45 | % | (42.45 | )% | |||||||||||||
RATIOS/SUPPLEMENTAL DATA: | |||||||||||||||||||||||
Net assets at end of year (000's omitted) | $ | 71,314 | $ | 100,305 | $ | 162,530 | $ | 160,021 | $ | 111,674 | |||||||||||||
Ratio to average net assets of: | |||||||||||||||||||||||
Expenses, after Waivers | 0.67 | % | 0.67 | % | 0.67 | % | 0.67 | % | 0.67 | % | |||||||||||||
Expenses, prior to Waivers | 0.76 | % | 0.74 | % | 0.74 | % | 0.71 | % | 0.73 | % | |||||||||||||
Net investment income (loss), after Waivers | 1.16 | % | 0.97 | % | 0.22 | % | 0.11 | % | (0.01 | )% | |||||||||||||
Portfolio turnover rate(d) | 22 | % | 27 | % | 24 | % | 31 | % | 72 | % |
(a) Based on average shares outstanding.
(b) The mean between the last bid and ask prices.
(c) Net asset value total 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. Market price total return is calculated assuming an initial investment made at the market price at the beginning of the period, reinvestment of all dividends and distributions at market price during the period, and sale at the market price on the last day of the period. Total investment returns calculated for a period of less than one year are not annualized.
(d) Portfolio turnover rate is not annualized and does not include securities received or delivered from processing creations or redemptions.
(e) Amount represents less than $0.005.
See Notes to Financial Statements.
80
Financial Highlights (Continued)
PowerShares DWA Technical LeadersTM Portfolio (PDP)
Year Ended April 30, | |||||||||||||||||||||||
2013 | 2012 | 2011 | 2010 | 2009 | |||||||||||||||||||
PER SHARE OPERATING PERFORMANCE: | |||||||||||||||||||||||
Net asset value at beginning of year | $ | 27.86 | $ | 26.52 | $ | 21.25 | $ | 14.14 | $ | 25.97 | |||||||||||||
Net investment income (loss)(a) | 0.23 | 0.07 | 0.04 | 0.06 | 0.07 | ||||||||||||||||||
Net realized and unrealized gain (loss) on investments | 3.92 | 1.31 | 5.29 | 7.15 | (11.86 | ) | |||||||||||||||||
Total from investment operations | 4.15 | 1.38 | 5.33 | 7.21 | (11.79 | ) | |||||||||||||||||
Distributions to shareholders from: | |||||||||||||||||||||||
Net investment income | (0.24 | ) | (0.04 | ) | (0.06 | ) | (0.10 | ) | (0.04 | ) | |||||||||||||
Net asset value at end of year | $ | 31.77 | $ | 27.86 | $ | 26.52 | $ | 21.25 | $ | 14.14 | |||||||||||||
Market price at end of year(b) | $ | 31.76 | $ | 27.86 | $ | 26.54 | $ | 21.24 | $ | 14.13 | |||||||||||||
NET ASSET VALUE, TOTAL RETURN(c) | 15.02 | % | 5.22 | % | 25.11 | % | 51.28 | % | (45.40 | )% | |||||||||||||
MARKET PRICE TOTAL RETURN(c) | 14.98 | % | 5.15 | % | 25.26 | % | 51.31 | % | (45.49 | )% | |||||||||||||
RATIOS/SUPPLEMENTAL DATA: | |||||||||||||||||||||||
Net assets at end of year (000's omitted) | $ | 876,929 | $ | 571,078 | $ | 450,904 | $ | 159,371 | $ | 138,549 | |||||||||||||
Ratio to average net assets of: | |||||||||||||||||||||||
Expenses, after Waivers(d) | 0.67 | % | 0.65 | % | 0.70 | % | 0.70 | % | 0.69 | % | |||||||||||||
Expenses, prior to Waivers(d) | 0.67 | % | 0.65 | % | 0.71 | % | 0.73 | % | 0.68 | % | |||||||||||||
Net investment income, after Waivers | 0.82 | % | 0.29 | % | 0.19 | % | 0.35 | % | 0.38 | % | |||||||||||||
Portfolio turnover rate(e) | 66 | % | 96 | % | 42 | % | 52 | % | 87 | % |
PowerShares Global Listed Private Equity Portfolio (PSP)
Year Ended April 30, | |||||||||||||||||||||||
2013 | 2012 | 2011 | 2010 | 2009 | |||||||||||||||||||
PER SHARE OPERATING PERFORMANCE: | |||||||||||||||||||||||
Net asset value at beginning of year | $ | 9.22 | $ | 12.17 | $ | 10.04 | $ | 6.72 | $ | 20.27 | |||||||||||||
Net investment income(a) | 0.24 | 0.26 | 0.26 | 0.33 | 0.87 | ||||||||||||||||||
Net realized and unrealized gain (loss) on investments | 2.64 | (2.58 | ) | 2.41 | 3.27 | (13.55 | ) | ||||||||||||||||
Total from investment operations | 2.88 | (2.32 | ) | 2.67 | 3.60 | (12.68 | ) | ||||||||||||||||
Distributions to shareholders from: | |||||||||||||||||||||||
Net investment income | (0.40 | ) | (0.56 | ) | (0.54 | ) | (0.28 | ) | (0.87 | ) | |||||||||||||
Return of capital | — | (0.07 | ) | — | — | — | |||||||||||||||||
Total distributions | (0.40 | ) | (0.63 | ) | (0.54 | ) | (0.28 | ) | (0.87 | ) | |||||||||||||
Net asset value at end of year | $ | 11.70 | $ | 9.22 | $ | 12.17 | $ | 10.04 | $ | 6.72 | |||||||||||||
Market price at end of year(b) | $ | 11.75 | $ | 9.25 | $ | 12.25 | $ | 10.06 | $ | 6.71 | |||||||||||||
NET ASSET VALUE, TOTAL RETURN(c) | 31.87 | % | (19.51 | )% | 27.93 | % | 54.20 | % | (64.23 | )% | |||||||||||||
MARKET PRICE TOTAL RETURN(c) | 32.00 | % | (19.80 | )% | 28.48 | % | 54.70 | % | (64.29 | )% | |||||||||||||
RATIOS/SUPPLEMENTAL DATA: | |||||||||||||||||||||||
Net assets at end of year (000's omitted) | $ | 408,492 | $ | 296,744 | $ | 493,622 | $ | 211,879 | $ | 60,476 | |||||||||||||
Ratio to average net assets of: | |||||||||||||||||||||||
Expenses, after Waivers(d) | 0.70 | % | 0.71 | % | 0.70 | % | 0.70 | % | 0.70 | % | |||||||||||||
Expenses, prior to Waivers(d) | 0.70 | % | 0.76 | % | 0.73 | % | 0.72 | % | 0.78 | % | |||||||||||||
Net investment income, after Waivers | 2.47 | % | 2.79 | % | 2.50 | % | 3.66 | %(f) | 7.75 | % | |||||||||||||
Portfolio turnover rate(e) | 53 | % | 88 | % | 112 | % | 121 | % | 74 | % |
(a) Based on average shares outstanding.
(b) The mean between the last bid and ask prices.
(c) Net asset value total 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. Market price total return is calculated assuming an initial investment made at the market price at the beginning of the period, reinvestment of all dividends and distributions at market price during the period, and sale at the market price on the last day of the period. Total investment returns calculated for a period of less than one year are not annualized.
(d) In addition to the fees and expenses which the Fund bears directly, the Fund indirectly bears a pro rata share of the fees and expenses of the investment companies in which the Fund invests. Estimated investment company expenses are not expenses that are incurred directly by the Fund. They are expenses that are incurred directly by the investment companies and are deducted from the value of the funds that the Fund invests in. The effect of the estimated investment company expenses that you bear indirectly is included in the Fund's total return.
(e) Portfolio turnover rate is not annualized and does not include securities received or delivered from processing creations or redemptions.
(f) Net investment income per share and the ratio of net investment income to average net assets include a special stock dividend in which the Fund elected a cash payment of $0.96 per share owned of American Capital Ltd. on August 7, 2009. Net investment income per share and the ratio of net investment income to average net assets excluding the special dividend are $0.27 and 2.94%, respectively.
See Notes to Financial Statements.
81
Financial Highlights (Continued)
PowerShares Golden Dragon China Portfolio (PGJ)
Year Ended April 30, | |||||||||||||||||||||||
2013 | 2012 | 2011 | 2010 | 2009 | |||||||||||||||||||
PER SHARE OPERATING PERFORMANCE: | |||||||||||||||||||||||
Net asset value at beginning of year | $ | 21.56 | $ | 28.98 | $ | 25.03 | $ | 17.47 | $ | 28.88 | |||||||||||||
Net investment income(a) | 0.34 | 0.48 | 0.21 | 0.13 | 0.20 | ||||||||||||||||||
Net realized and unrealized gain (loss) on investments | (1.81 | ) | (7.43 | ) | 3.92 | 7.63 | (11.44 | ) | |||||||||||||||
Total from investment operations | (1.47 | ) | (6.95 | ) | 4.13 | 7.76 | (11.24 | ) | |||||||||||||||
Distributions to shareholders from: | |||||||||||||||||||||||
Net investment income | (0.44 | ) | (0.47 | ) | (0.18 | ) | (0.17 | ) | (0.17 | ) | |||||||||||||
Return of capital | — | — | — | (0.03 | ) | — | |||||||||||||||||
Total distributions | (0.44 | ) | (0.47 | ) | (0.18 | ) | (0.20 | ) | (0.17 | ) | |||||||||||||
Net asset value at end of year | $ | 19.65 | $ | 21.56 | $ | 28.98 | $ | 25.03 | $ | 17.47 | |||||||||||||
Market price at end of year(b) | $ | 19.59 | $ | 21.49 | $ | 28.87 | $ | 25.04 | $ | 17.48 | |||||||||||||
NET ASSET VALUE, TOTAL RETURN(c) | (6.73 | )%(d) | (23.98 | )% | 16.60 | % | 44.51 | % | (39.06 | )% | |||||||||||||
MARKET PRICE TOTAL RETURN(c) | (6.70 | )% | (23.93 | )% | 16.11 | % | 44.49 | % | (38.92 | )% | |||||||||||||
RATIOS/SUPPLEMENTAL DATA: | |||||||||||||||||||||||
Net assets at end of year (000's omitted) | $ | 181,744 | $ | 245,838 | $ | 446,292 | $ | 455,523 | $ | 279,490 | |||||||||||||
Ratio to average net assets of: | |||||||||||||||||||||||
Expenses, after Waivers | 0.70 | % | 0.69 | % | 0.70 | % | 0.70 | % | 0.69 | % | |||||||||||||
Expenses, prior to Waivers | 0.75 | % | 0.71 | % | 0.72 | % | 0.71 | % | 0.71 | % | |||||||||||||
Net investment income, after Waivers | 1.78 | % | 2.08 | % | 0.82 | % | 0.56 | % | 1.06 | % | |||||||||||||
Portfolio turnover rate(e) | 63 | % | 23 | % | 15 | % | 35 | % | 20 | % |
PowerShares Lux Nanotech Portfolio (PXN)
Year Ended April 30, | |||||||||||||||||||||||
2013 | 2012 | 2011 | 2010 | 2009 | |||||||||||||||||||
PER SHARE OPERATING PERFORMANCE: | |||||||||||||||||||||||
Net asset value at beginning of year | $ | 6.37 | $ | 9.60 | $ | 10.33 | $ | 7.59 | $ | 14.07 | |||||||||||||
Net investment income (loss)(a) | 0.09 | 0.06 | (0.00 | )(f) | (0.00 | )(f) | 0.02 | ||||||||||||||||
Net realized and unrealized gain (loss) on investments | 0.40 | (3.26 | ) | (0.73 | ) | 2.76 | (6.50 | ) | |||||||||||||||
Total from investment operations | 0.49 | (3.20 | ) | (0.73 | ) | 2.76 | (6.48 | ) | |||||||||||||||
Distributions to shareholders from: | |||||||||||||||||||||||
Net investment income | (0.09 | ) | (0.03 | ) | — | (0.02 | ) | — | |||||||||||||||
Return of capital | — | — | — | 0.00 | (f) | — | |||||||||||||||||
Total distributions | (0.09 | ) | (0.03 | ) | — | (0.02 | ) | — | |||||||||||||||
Net asset value at end of year | $ | 6.77 | $ | 6.37 | $ | 9.60 | $ | 10.33 | $ | 7.59 | |||||||||||||
Market price at end of year(b) | $ | 6.80 | $ | 6.37 | $ | 9.70 | $ | 10.32 | $ | 7.60 | |||||||||||||
NET ASSET VALUE, TOTAL RETURN(c) | 7.84 | % | (33.40 | )% | (7.07 | )% | 36.39 | % | (46.06 | )% | |||||||||||||
MARKET PRICE TOTAL RETURN(c) | 8.32 | % | (34.09 | )% | (6.01 | )% | 36.08 | % | (45.79 | )% | |||||||||||||
RATIOS/SUPPLEMENTAL DATA: | |||||||||||||||||||||||
Net assets at end of year (000's omitted) | $ | 19,635 | $ | 22,283 | $ | 38,390 | $ | 55,290 | $ | 39,484 | |||||||||||||
Ratio to average net assets of: | |||||||||||||||||||||||
Expenses, after Waivers(g) | 0.70 | % | 0.70 | % | 0.70 | % | 0.70 | % | 0.70 | % | |||||||||||||
Expenses, prior to Waivers(g) | 1.14 | % | 1.08 | % | 0.95 | % | 0.85 | % | 0.89 | % | |||||||||||||
Net investment income (loss), after Waivers | 1.44 | % | 0.90 | % | (0.04 | )% | (0.04 | )% | 0.17 | % | |||||||||||||
Portfolio turnover rate(e) | 30 | % | 55 | % | 58 | % | 57 | % | 50 | % |
(a) Based on average shares outstanding.
(b) The mean between the last bid and ask prices.
(c) Net asset value total 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. Market price total return is calculated assuming an initial investment made at the market price at the beginning of the period, reinvestment of all dividends and distributions at market price during the period, and sale at the market price on the last day of the period. Total investment returns calculated for a period of less than one year are not annualized.
(d) Amount includes the effect of the Adviser pay-in for an economic loss of $0.004 per share. Had the pay-in not been made, the net asset value total return would have been (6.77)%.
(e) Portfolio turnover rate is not annualized and does not include securities received or delivered from processing creations or redemptions.
(f) Amount represents less than $0.005.
(g) In addition to the fees and expenses which the Fund bears directly, the Fund indirectly bears a pro rata share of the fees and expenses of the investment companies in which the Fund invests. Estimated investment company expenses are not expenses that are incurred directly by the Fund. They are expenses that are incurred directly by the investment companies and are deducted from the value of the funds that the Fund invests in. The effect of the estimated investment company expenses that you bear indirectly is included in the Fund's total return.
See Notes to Financial Statements.
82
Financial Highlights (Continued)
PowerShares S&P 500 BuyWrite Portfolio (PBP)
Year Ended April 30, | |||||||||||||||||||||||
2013 | 2012 | 2011 | 2010 | 2009 | |||||||||||||||||||
PER SHARE OPERATING PERFORMANCE: | |||||||||||||||||||||||
Net asset value at beginning of year | $ | 20.60 | $ | 21.52 | $ | 21.52 | $ | 17.54 | $ | 25.00 | |||||||||||||
Net investment income(a) | 0.33 | 0.29 | 0.29 | 0.27 | 0.38 | ||||||||||||||||||
Net realized and unrealized gain (loss) on investments | 0.70 | 1.00 | 1.34 | 4.00 | (7.38 | ) | |||||||||||||||||
Total from investment operations | 1.03 | 1.29 | 1.63 | 4.27 | (7.00 | ) | |||||||||||||||||
Distributions to shareholders from: | |||||||||||||||||||||||
Net investment income | (0.65 | ) | (2.10 | ) | (0.27 | ) | (0.29 | ) | (0.46 | ) | |||||||||||||
Net realized gains | (0.15 | ) | (0.11 | ) | (1.36 | ) | — | — | |||||||||||||||
Total distributions | (0.80 | ) | (2.21 | ) | (1.63 | ) | (0.29 | ) | (0.46 | ) | |||||||||||||
Net asset value at end of year | $ | 20.83 | $ | 20.60 | $ | 21.52 | $ | 21.52 | $ | 17.54 | |||||||||||||
Market price at end of year(b) | $ | 20.83 | $ | 20.65 | $ | 21.52 | $ | 21.52 | $ | 17.59 | |||||||||||||
NET ASSET VALUE, TOTAL RETURN(c) | 5.22 | % | 6.74 | % | 8.11 | % | 24.48 | % | (28.26 | )% | |||||||||||||
MARKET PRICE TOTAL RETURN(c) | 4.97 | % | 7.02 | % | 8.09 | % | 24.11 | % | (28.16 | )% | |||||||||||||
RATIOS/SUPPLEMENTAL DATA: | |||||||||||||||||||||||
Net assets at end of year (000's omitted) | $ | 205,222 | $ | 154,528 | $ | 120,511 | $ | 167,840 | $ | 84,211 | |||||||||||||
Ratio to average net assets of: | |||||||||||||||||||||||
Expenses | 0.75 | % | 0.75 | % | 0.75 | % | 0.75 | % | 0.75 | % | |||||||||||||
Net investment income | 1.61 | % | 1.42 | % | 1.37 | % | 1.35 | % | 2.09 | % | |||||||||||||
Portfolio turnover rate(d) | 22 | % | 58 | % | 61 | % | 51 | % | 83 | % |
PowerShares S&P 500® High Quality Portfolio (SPHQ)
Year Ended April 30, | |||||||||||||||||||||||
2013 | 2012 | 2011 | 2010 | 2009 | |||||||||||||||||||
PER SHARE OPERATING PERFORMANCE: | |||||||||||||||||||||||
Net asset value at beginning of year | $ | 15.33 | $ | 14.64 | $ | 12.21 | $ | 9.60 | $ | 16.76 | |||||||||||||
Net investment income(a) | 0.33 | 0.26 | 0.20 | 0.00 | (e) | 0.04 | |||||||||||||||||
Net realized and unrealized gain (loss) on investments | 2.52 | 0.74 | 2.31 | 2.64 | (7.19 | ) | |||||||||||||||||
Total from investment operations | 2.85 | 1.00 | 2.51 | 2.64 | (7.15 | ) | |||||||||||||||||
Distributions to shareholders from: | |||||||||||||||||||||||
Net investment income | (0.31 | ) | (0.31 | ) | (0.08 | ) | (0.03 | ) | (0.01 | ) | |||||||||||||
Net asset value at end of year | $ | 17.87 | $ | 15.33 | $ | 14.64 | $ | 12.21 | $ | 9.60 | |||||||||||||
Market price at end of year(b) | $ | 17.87 | $ | 15.33 | $ | 14.64 | $ | 12.21 | $ | 9.60 | |||||||||||||
NET ASSET VALUE, TOTAL RETURN(c) | 18.86 | % | 7.04 | % | 20.61 | % | 27.63 | % | (42.66 | )% | |||||||||||||
MARKET PRICE TOTAL RETURN(c) | 18.86 | % | 7.04 | % | 20.61 | % | 27.63 | % | (42.62 | )% | |||||||||||||
RATIOS/SUPPLEMENTAL DATA: | |||||||||||||||||||||||
Net assets at end of year (000's omitted) | $ | 228,736 | $ | 146,421 | $ | 112,695 | $ | 67,746 | $ | 71,048 | |||||||||||||
Ratio to average net assets of: | |||||||||||||||||||||||
Expenses, after Waivers | 0.39 | % | 0.50 | % | 0.52 | % | 0.70 | % | 0.70 | % | |||||||||||||
Expenses, prior to Waivers | 0.55 | % | 0.70 | % | 0.84 | % | 0.80 | % | 0.72 | % | |||||||||||||
Net investment income (loss), after Waivers | 2.06 | % | 1.82 | % | 1.49 | % | (0.03 | )% | 0.27 | % | |||||||||||||
Portfolio turnover rate(d) | 17 | % | 14 | % | 64 | % | 138 | % | 143 | % |
(a) Based on average shares outstanding.
(b) The mean between the last bid and ask prices.
(c) Net asset value total 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. Market price total return is calculated assuming an initial investment made at the market price at the beginning of the period, reinvestment of all dividends and distributions at market price during the period, and sale at the market price on the last day of the period. Total investment returns calculated for a period of less than one year are not annualized.
(d) Portfolio turnover rate is not annualized and does not include securities received or delivered from processing creations or redemptions.
(e) Amount represents less than $0.005.
See Notes to Financial Statements.
83
Financial Highlights (Continued)
PowerShares Water Resources Portfolio (PHO)
Year Ended April 30, | |||||||||||||||||||||||
2013 | 2012 | 2011 | 2010 | 2009 | |||||||||||||||||||
PER SHARE OPERATING PERFORMANCE: | |||||||||||||||||||||||
Net asset value at beginning of year | $ | 18.78 | $ | 20.25 | $ | 18.05 | $ | 14.04 | $ | 20.66 | |||||||||||||
Net investment income(a) | 0.16 | 0.14 | 0.11 | 0.09 | 0.08 | ||||||||||||||||||
Net realized and unrealized gain (loss) on investments | 3.28 | (1.48 | ) | 2.19 | 4.03 | (6.64 | ) | ||||||||||||||||
Total from investment operations | 3.44 | (1.34 | ) | 2.30 | 4.12 | (6.56 | ) | ||||||||||||||||
Distributions to shareholders from: | |||||||||||||||||||||||
Net investment income | (0.16 | ) | (0.13 | ) | (0.10 | ) | (0.11 | ) | (0.06 | ) | |||||||||||||
Net asset value at end of year | $ | 22.06 | $ | 18.78 | $ | 20.25 | $ | 18.05 | $ | 14.04 | |||||||||||||
Market price at end of year(b) | $ | 22.05 | $ | 18.77 | $ | 20.24 | $ | 18.05 | $ | 14.02 | |||||||||||||
NET ASSET VALUE, TOTAL RETURN(c) | 18.48 | % | (6.59 | )% | 12.81 | % | 29.48 | % | (31.76 | )% | |||||||||||||
MARKET PRICE TOTAL RETURN(c) | 18.49 | % | (6.59 | )% | 12.75 | % | 29.67 | % | (31.63 | )% | |||||||||||||
RATIOS/SUPPLEMENTAL DATA: | |||||||||||||||||||||||
Net assets at end of year (000's omitted) | $ | 877,064 | $ | 825,510 | $ | 1,260,648 | $ | 1,335,033 | $ | 1,220,027 | |||||||||||||
Ratio to average net assets of: | |||||||||||||||||||||||
Expenses, after Waivers | 0.62 | % | 0.62 | % | 0.66 | % | 0.64 | % | 0.64 | % | |||||||||||||
Expenses, prior to Waivers | 0.62 | % | 0.62 | % | 0.66 | % | 0.64 | % | 0.64 | % | |||||||||||||
Net investment income, after Waivers | 0.81 | % | 0.77 | % | 0.63 | % | 0.57 | % | 0.49 | % | |||||||||||||
Portfolio turnover rate(d) | 31 | % | 44 | % | 13 | % | 20 | % | 33 | % |
PowerShares WilderHill Clean Energy Portfolio (PBW)
Year Ended April 30, | |||||||||||||||||||||||
2013 | 2012 | 2011 | 2010 | 2009 | |||||||||||||||||||
PER SHARE OPERATING PERFORMANCE: | |||||||||||||||||||||||
Net asset value at beginning of year | $ | 5.08 | $ | 10.35 | $ | 10.12 | $ | 9.03 | $ | 20.94 | |||||||||||||
Net investment income (loss)(a) | 0.11 | 0.20 | (0.03 | ) | (0.02 | ) | (0.02 | ) | |||||||||||||||
Net realized and unrealized gain (loss) on investments | (0.26 | ) | (5.33 | ) | 0.26 | 1.11 | (11.89 | ) | |||||||||||||||
Total from investment operations | (0.15 | ) | (5.13 | ) | 0.23 | 1.09 | (11.91 | ) | |||||||||||||||
Distributions to shareholders from: | |||||||||||||||||||||||
Net investment income | (0.14 | ) | (0.14 | ) | — | — | — | ||||||||||||||||
Net asset value at end of year | $ | 4.79 | $ | 5.08 | $ | 10.35 | $ | 10.12 | $ | 9.03 | |||||||||||||
Market price at end of year(b) | $ | 4.79 | $ | 5.08 | $ | 10.33 | $ | 10.11 | $ | 8.99 | |||||||||||||
NET ASSET VALUE, TOTAL RETURN(c) | (2.64 | )% | (49.78 | )% | 2.27 | % | 12.07 | % | (56.88 | )% | |||||||||||||
MARKET PRICE TOTAL RETURN(c) | (2.65 | )% | (49.68 | )% | 2.18 | % | 12.46 | % | (57.07 | )% | |||||||||||||
RATIOS/SUPPLEMENTAL DATA: | |||||||||||||||||||||||
Net assets at end of year (000's omitted) | $ | 142,494 | $ | 178,016 | $ | 541,472 | $ | 657,486 | $ | 658,400 | |||||||||||||
Ratio to average net assets of: | |||||||||||||||||||||||
Expenses, after Waivers | 0.70 | % | 0.70 | % | 0.70 | % | 0.70 | % | 0.69 | % | |||||||||||||
Expenses, prior to Waivers | 0.70 | % | 0.76 | % | 0.75 | % | 0.70 | % | 0.69 | % | |||||||||||||
Net investment income (loss), after Waivers | 2.48 | % | 2.98 | % | (0.27 | )% | (0.18 | )% | (0.12 | )% | |||||||||||||
Portfolio turnover rate(d) | 52 | % | 46 | % | 32 | % | 42 | % | 41 | % |
(a) Based on average shares outstanding.
(b) The mean between the last bid and ask prices.
(c) Net asset value total 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. Market price total return is calculated assuming an initial investment made at the market price at the beginning of the period, reinvestment of all dividends and distributions at market price during the period, and sale at the market price on the last day of the period. Total investment returns calculated for a period of less than one year are not annualized.
(d) Portfolio turnover rate is not annualized and does not include securities received or delivered from processing creations or redemptions.
See Notes to Financial Statements.
84
Financial Highlights (Continued)
PowerShares WilderHill Progressive Energy Portfolio (PUW)
Year Ended April 30, | |||||||||||||||||||||||
2013 | 2012 | 2011 | 2010 | 2009 | |||||||||||||||||||
PER SHARE OPERATING PERFORMANCE: | |||||||||||||||||||||||
Net asset value at beginning of year | $ | 25.87 | $ | 30.68 | $ | 25.19 | $ | 17.38 | $ | 28.23 | |||||||||||||
Net investment income(a) | 0.35 | 0.14 | 0.10 | 0.14 | 0.13 | ||||||||||||||||||
Net realized and unrealized gain (loss) on investments | 1.54 | (4.71 | ) | 5.53 | 7.81 | (10.91 | ) | ||||||||||||||||
Total from investment operations | 1.89 | (4.57 | ) | 5.63 | 7.95 | (10.78 | ) | ||||||||||||||||
Distributions to shareholders from: | |||||||||||||||||||||||
Net investment income | (0.20 | ) | (0.24 | ) | (0.14 | ) | (0.14 | ) | (0.07 | ) | |||||||||||||
Net asset value at end of year | $ | 27.56 | $ | 25.87 | $ | 30.68 | $ | 25.19 | $ | 17.38 | |||||||||||||
Market price at end of year(b) | $ | 27.55 | $ | 25.86 | $ | 30.70 | $ | 25.19 | $ | 17.38 | |||||||||||||
NET ASSET VALUE, TOTAL RETURN(c) | 7.38 | % | (14.84 | )% | 22.47 | % | 45.96 | % | (38.23 | )% | |||||||||||||
MARKET PRICE TOTAL RETURN(c) | 7.38 | % | (14.93 | )% | 22.55 | % | 45.96 | % | (38.16 | )% | |||||||||||||
RATIOS/SUPPLEMENTAL DATA: | |||||||||||||||||||||||
Net assets at end of year (000's omitted) | $ | 38,584 | $ | 47,859 | $ | 75,175 | $ | 60,451 | $ | 39,970 | |||||||||||||
Ratio to average net assets of: | |||||||||||||||||||||||
Expenses, after Waivers | 0.70 | % | 0.71 | % | 0.70 | % | 0.70 | % | 0.70 | % | |||||||||||||
Expenses, prior to Waivers | 0.87 | % | 0.86 | % | 0.86 | % | 0.84 | % | 0.86 | % | |||||||||||||
Net investment income, after Waivers | 1.40 | % | 0.56 | % | 0.37 | % | 0.63 | % | 0.62 | % | |||||||||||||
Portfolio turnover rate(d) | 32 | % | 36 | % | 22 | % | 52 | % | 32 | % |
(a) Based on average shares outstanding.
(b) The mean between the last bid and ask prices.
(c) Net asset value total 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. Market price total return is calculated assuming an initial investment made at the market price at the beginning of the period, reinvestment of all dividends and distributions at market price during the period, and sale at the market price on the last day of the period. Total investment returns calculated for a period of less than one year are not annualized.
(d) Portfolio turnover rate is not annualized and does not include securities received or delivered from processing creations or redemptions.
See Notes to Financial Statements.
85
Notes to Financial Statements
PowerShares Exchange-Traded Fund Trust
April 30, 2013
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 April 30, 2013, the Trust offered fifty-five portfolios. This report includes the following portfolios:
Full Name | Short Name | ||||||
PowerShares Aerospace & Defense Portfolio (PPA) | "Aerospace & Defense Portfolio" | ||||||
PowerShares CleantechTM Portfolio (PZD) | "CleantechTM Portfolio" | ||||||
PowerShares DWA Technical LeadersTM Portfolio (PDP) | "DWA Technical LeadersTM Portfolio" | ||||||
PowerShares Global Listed Private Equity Portfolio (PSP) | "Global Listed Private Equity Portfolio" | ||||||
PowerShares Golden Dragon China Portfolio (PGJ) | "Golden Dragon China Portfolio" | ||||||
PowerShares Lux Nanotech Portfolio (PXN) | "Lux Nanotech Portfolio" | ||||||
PowerShares S&P 500 BuyWrite Portfolio (PBP) | "S&P 500 BuyWrite Portfolio" | ||||||
PowerShares S&P 500® High Quality Portfolio (SPHQ) | "S&P 500® High Quality Portfolio" | ||||||
PowerShares Water Resources Portfolio (PHO) | "Water Resources Portfolio" | ||||||
PowerShares WilderHill Clean Energy Portfolio (PBW) | "WilderHill Clean Energy Portfolio" | ||||||
PowerShares WilderHill Progressive Energy Portfolio (PUW) | "WilderHill Progressive Energy Portfolio" |
Each portfolio (each, a "Fund" and collectively, the "Funds") represents a separate series of the Trust. The shares of the Funds are referred to herein as "Shares" or "Fund's Shares." Each Fund's Shares are listed and traded on NYSE Arca, Inc.
The market prices of each Fund's Shares may differ to some degree from the Fund's net asset value ("NAV"). Unlike conventional mutual funds, each Fund issues and redeems Shares on a continuous basis, at NAV, 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 each Fund's relevant index. Except when aggregated in Creation Units by Authorized Participants, the Shares are not individually redeemable securities of the Funds.
The investment objective of each Fund is to seek investment results that generally correspond (before fees and expenses) to the price and yield of its respective index listed below (each, an "Underlying Index"):
Fund | Index | ||||||
Aerospace & Defense Portfolio | SPADETM Defense Index | ||||||
CleantechTM Portfolio | Cleantech IndexTM | ||||||
DWA Technical LeadersTM Portfolio | Dorsey Wright Technical LeadersTM Index | ||||||
Global Listed Private Equity Portfolio | Red Rocks Global Listed Private Equity Index | ||||||
Golden Dragon China Portfolio | NASDAQ Golden Dragon China Index | ||||||
Lux Nanotech Portfolio | Lux Nanotech IndexTM | ||||||
S&P 500 BuyWrite Portfolio | CBOE S&P 500 BuyWrite Index |
86
Notes to Financial Statements (Continued)
PowerShares Exchange-Traded Fund Trust
April 30, 2013
Fund | Index | ||||||
S&P 500® High Quality Portfolio | S&P 500® High Quality Rankings Index | ||||||
Water Resources Portfolio | NASDAQ OMX US Water IndexSM | ||||||
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 ("GAAP") 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. In addition, the Funds monitor for material events or transactions that may occur or become known after the period-end date and before the date the financial statements are released to print.
A. Security Valuation
Securities, including restricted securities, are valued according to the following policies.
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 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 and closed-end registered investment companies that do not trade on an exchange are valued at the end of day net asset value per share. Investments in open-end and closed-end registered investment companies that trade on an exchange are valued at the 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.
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 (for unlisted equities), yield (for debt obligations), quality, type of issue, coupon rate (for debt obligations), maturity (for debt obligations), individual trading characteristics and other market data. Securities with a demand feature exercisable within one to seven days are valued at par. Debt obligations are subject to interest rate and credit risks. In addition, all debt obligations involve some risk of default with respect to interest and/or principal payments.
Foreign securities' (including foreign exchange contracts) prices 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 New York Stock Exchange ("NYSE"), closing market quotations may become unreliable. If between the time trading
87
Notes to Financial Statements (Continued)
PowerShares Exchange-Traded Fund Trust
April 30, 2013
ends on a particular security and the close of the customary trading session on the NYSE, events occur that the Adviser determines are significant and 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 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' prices 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, American Depositary Receipts 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 became unreliable are valued at fair value as determined in good faith 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. Because of the inherent uncertainties of valuation, the values reflected in the financial statements may materially differ from the value received upon actual sale of those investments.
B. Other Risks
Index Risk. Unlike many investment companies, the Funds do not utilize an investing strategy that seeks returns in excess of each Fund's respective Underlying Index. Therefore, a Fund would not necessarily buy or sell a security unless that security is added or removed, respectively, from its respective Underlying Index, even if that security generally is underperforming.
Equity Risk. Equity risk is the risk that the value of the securities a Fund holds will fall due to general market and economic conditions, perceptions regarding the industries in which the issuers of securities a Fund holds participate or factors relating to specific companies in which a Fund invests. For example, an adverse event, such as an unfavorable earnings report, may depress the value of securities a Fund holds; the price of securities may be particularly sensitive to general movements in the stock market; or a drop in the stock market may depress the price of most or all of the securities a Fund holds. In addition, securities of an issuer in a Fund's portfolio may decline in price if the issuer fails to make anticipated dividend payments because, among other reasons, the issuer of the security experiences a decline in its financial condition.
Industry Concentration Risk. In following its methodology, each Fund's Underlying Index from time to time may be concentrated to a significant degree in securities of issuers located in a single industry or a sector. To the extent that an Underlying Index concentrates in the securities of issuers in a particular
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Notes to Financial Statements (Continued)
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April 30, 2013
industry or sector, each Fund will also concentrate its investments to approximately the same extent. By concentrating its investments in an industry or sector, a Fund may face more risks than if it were diversified broadly over numerous industries or sectors. In addition, at times, an industry or sector may be out of favor and underperform other industries or the market as a whole. Any factors detrimental to the performance of such industry or sector will disproportionately impact a Fund's NAV.
Non-Correlation Risk. Each Fund's return may not match the return of its Underlying Index for a number of reasons. For example, each Fund incurs operating expenses not applicable to its Underlying Index, and incurs costs in buying and selling securities, especially when rebalancing the securities holdings to reflect changes in the composition of its Underlying Index. In addition, the performance of each Fund and its Underlying Index may vary due to asset valuation differences and differences between each Fund's portfolio and its Underlying Index resulting from legal restrictions, cost or liquidity constraints.
Non-Diversified Fund Risk. Because each Fund, except CleantechTM Portfolio, DWA Technical LeadersTM Portfolio, S&P 500 BuyWrite Portfolio, S&P 500® High Quality Portfolio, WilderHill Clean Energy Portfolio and WilderHill Progressive Energy Portfolio, is non-diversified and can invest a greater portion of its assets in securities of individual issuers than diversified funds, changes in the market value of a single investment could cause greater fluctuations in Share price than would occur in a diversified fund. This may increase a Fund's volatility and cause the performance of a relatively small number of issuers to have a greater impact on a Fund's performance.
Sampling Risk. Lux Nanotech Portfolio, the Fund's use of a representative sampling approach will result in its holding a smaller number of securities than are in its Underlying Index. As a result, an adverse development respecting an issuer of securities that the Fund holds could result in a greater decline in NAV than would be the case if the Fund held all of the securities in its Underlying Index. To the extent the assets in the Fund are smaller, these risks will be greater.
Small and Medium Capitalization Company Risk. Investing in securities of small and medium capitalization companies involves greater risk than customarily is associated with investing in larger, more established companies. These companies' securities may be more volatile and less liquid than those of more established companies. These securities may have returns that vary, sometimes significantly, from the overall securities market. Often small and medium capitalization companies and the industries in which they focus are still evolving and, as a result, they may be more sensitive to changing market conditions.
Foreign Investment Risk. Investments in the securities of non-U.S. issuers involve risks beyond those associated with investments in U.S. securities. Foreign securities may have relatively low market liquidity, greater market volatility, decreased publicly available information and less reliable financial information about issuers. Foreign securities also are subject to the risks of expropriation, nationalization, political instability, local taxation, potential currency transfer restrictions or other adverse political or economic developments and the difficulty of enforcing obligations in other countries. As the Fund may invest in securities denominated in foreign currencies, fluctuations in the value of the U.S. dollar relative to the values of other currencies may adversely affect investments in foreign securities and may negatively impact the Fund's returns.
Foreign Securities Risk. Since the Underlying Index may include ADRs and GDRs, the Fund's investments involve risks of investing in foreign securities in addition to the risks associated with domestic securities. In general, foreign companies are not subject to the regulatory requirements of U.S. companies and, as such,
89
Notes to Financial Statements (Continued)
PowerShares Exchange-Traded Fund Trust
April 30, 2013
there may be less publicly available information about these companies. Moreover, foreign companies often are subject to less stringent requirements regarding accounting, auditing, financial reporting and record-keeping than are U.S. companies, and therefore, not all material information regarding these companies will be available.
Risk of Investing in Listed Private Equity Companies. There are certain risks inherent in investing in listed private equity companies, which encompass BDCs and other financial institutions or vehicles whose principal business is to invest in and lend capital to, or provide services to privately held companies. The Investment Company Act of 1940, as amended (the "1940 Act"), imposes certain restraints upon the operations of a BDC. For example, BDCs are required to invest at least 70% of their total assets primarily in securities of private companies or thinly traded U.S. public companies, cash, cash equivalents, U.S. government securities and high quality debt investments that mature in one year or less. 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. With investments in debt instruments, there is a risk that the issuer may default on its payments or declare bankruptcy. Additionally, a BDC may incur indebtedness only in amounts such that the BDC's asset coverage equals at least 200% after such incurrence. These limitations on asset mix and leverage may prohibit the way that the BDC raises capital. BDCs generally invest in less mature private companies, which involve greater risk than well-established, publicly-traded companies.
C. Federal Income Taxes
Each Fund intends to comply with the provisions of the Internal Revenue Code of 1986, as amended (the "Internal Revenue Code"), applicable to regulated investment companies and to 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 recorded in the financial statements.
Income and capital gain distributions are determined in accordance with federal income tax regulations, which may differ from GAAP. These timing 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 U.S. federal tax returns and tax returns in 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 Transactions and Investment Income
Investment transactions are accounted for on a trade date basis. Realized gains and losses from the sale or disposition of securities are computed on the specific identified cost basis. Interest income is recorded on the accrual basis. Dividend income (net of withholding tax, if any) is recorded on the ex-dividend date. Dividends and interest received by a 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.
Corporate actions (including cash dividends) are recorded net of non-reclaimable foreign tax withholdings on the ex-dividend date.
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Notes to Financial Statements (Continued)
PowerShares Exchange-Traded Fund Trust
April 30, 2013
E. Expenses
Expenses of the Trust that are directly identifiable to a specific Fund are applied to that Fund. Expenses of the Trust that 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, sub-licensing fees related to its respective Underlying Index, any distribution fees or expenses, litigation expenses, fees payable to the Trust's Board members who are not "interested persons" (as defined in the 1940 Act) of the Trust (the "Independent Trustees") or Invesco PowerShares Capital Management LLC (the "Adviser"), expenses incurred in connection with the Board members' services, including travel expenses and legal fees of counsel for the Independent Trustees, acquired fund fees and expenses, if any and extraordinary expenses.
The S&P 500 BuyWrite Portfolio has agreed to pay an annual unitary management fee to the Adviser. The Adviser has agreed to pay for substantially all expenses of the Fund, including the cost of transfer agency, custody, fund administration, legal, audit and other services, except for advisory fees, distribution fees, if any, brokerage expenses, taxes, interest, litigation expenses, acquired fund fees and expenses, if any and extraordinary expenses.
To the extent a Fund invests in other investment companies, the expenses shown in the accompanying financial statements reflect the expenses of the Fund and do not include any expenses of the investment companies in which it invests. The effects of such investment companies' expenses are included in the realized and unrealized gain or loss on the investments in the investment companies.
F. Dividends and Distributions to Shareholders
Each Fund declares and pays dividends from net investment income, if any, to its shareholders quarterly and records such dividends on ex-dividend date. Generally, each Fund distributes net realized taxable capital gains, if any, annually in cash and records them on ex-dividend date. Such distributions on a tax basis are determined in conformity with federal income tax regulations, which may differ from GAAP. 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. Change in Accounting Policy – Equalization
The Funds previously followed the accounting practice known as equalization. Equalization accounting is utilized for book purposes to keep the continuing shareholders' per share equity in undistributed net investment income from being affected by the continuous sales and redemptions of capital shares. During the fiscal year ended April 30, 2013, all Funds discontinued the practice of equalization accounting for book purposes. The prior period financial statements have been restated to reflect the accounting change.
The change in policy has been accounted for in accordance with ASC 250 "Accounting Changes and Error Corrections." The change was implemented for consistent application of book and tax treatment related to the Funds' distributions. The result of the policy change did not have an impact on the Funds' net assets, net increase/decrease in net assets resulting from operations or per share net asset value. Additionally, the change does not have an impact on the amount or tax character of a Funds' distributions to shareholders or net asset value total return.
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Notes to Financial Statements (Continued)
PowerShares Exchange-Traded Fund Trust
April 30, 2013
For financial reporting purposes, the amounts were reported in the Statements of Changes in Net Assets as "Undistributed net investment income (loss) included in the price of units issued and redeemed" as a component of the "Net increase (decrease) in net assets resulting from operations" with an offsetting amount included in "Net income (loss) equalization" included in the subtotal "Net increase (decrease) in net assets resulting from share transactions." The amount of equalization charges or credits previously reported and the amount in the current period had the change not been made were as follows:
Statements of Changes in Net Assets | |||||||||||
Net income (loss) equalization* | |||||||||||
Year ended April 30, 2013 | Year ended April 30, 2012 | ||||||||||
Aerospace & Defense Portfolio | $ | 42,198 | $ | (133,587 | ) | ||||||
CleantechTM Portfolio | (71,732 | ) | 8,054 | ||||||||
DWA Technical LeadersTM Portfolio | (682,392 | ) | (186,322 | ) | |||||||
Global Listed Private Equity Portfolio | (908,814 | ) | (5,091,619 | ) | |||||||
Golden Dragon China Portfolio | 24,031 | 436,993 | |||||||||
Lux Nanotech Portfolio | 21,796 | 8,938 | |||||||||
S&P 500 BuyWrite Portfolio | 5,094,248 | 5,231,782 | |||||||||
S&P 500® High Quality Portfolio | (202,131 | ) | (67,229 | ) | |||||||
Water Resources Portfolio | 108,033 | 148,866 | |||||||||
WilderHill Clean Energy Portfolio | 94,708 | 47,608 | |||||||||
WilderHill Progressive Energy Portfolio | 17,423 | (22,453 | ) |
* An equal offsetting amount was made to the operations section of the Statements of Changes in Net Assets.
The per share impact of the net equalization charges and credits disclosed in previous financial statements and the amount in the current period had the change not been made were as follows:
Financial Highlights | |||||||||||||||||||||||
Year Ended April 30, | |||||||||||||||||||||||
2013 | 2012 | 2011 | 2010 | 2009 | |||||||||||||||||||
Aerospace & Defense Portfolio | $ | (0.02 | ) | $ | 0.03 | $ | (0.00 | ) | $ | (0.01 | ) | $ | (0.01 | ) | |||||||||
CleantechTM Portfolio | 0.02 | (0.00 | ) | 0.01 | (0.01 | ) | (0.05 | ) | |||||||||||||||
DWA Technical LeadersTM Portfolio | 0.03 | 0.01 | 0.05 | (0.02 | ) | (0.03 | ) | ||||||||||||||||
Global Listed Private Equity Portfolio | 0.03 | 0.14 | 0.03 | 0.24 | 0.21 | ||||||||||||||||||
Golden Dragon China Portfolio | (0.00 | ) | (0.03 | ) | (0.00 | ) | 0.02 | (0.03 | ) | ||||||||||||||
Lux Nanotech Portfolio | (0.01 | ) | (0.00 | ) | (0.00 | ) | 0.00 | 0.00 | |||||||||||||||
S&P 500 BuyWrite Portfolio | (0.44 | ) | (0.97 | ) | (0.01 | ) | (0.00 | ) | (0.05 | ) | |||||||||||||
S&P 500® High Quality Portfolio | 0.02 | 0.01 | 0.02 | (0.00 | ) | (0.00 | ) | ||||||||||||||||
Water Resources Portfolio | (0.00 | ) | (0.00 | ) | (0.01 | ) | (0.01 | ) | (0.01 | ) | |||||||||||||
WilderHill Clean Energy Portfolio | (0.00 | ) | (0.00 | ) | 0.01 | 0.00 | (0.00 | ) | |||||||||||||||
WilderHill Progressive Energy Portfolio | (0.01 | ) | 0.01 | (0.00 | ) | 0.00 | 0.00 |
H. Option Contracts Written
S&P 500 BuyWrite Portfolio may engage in certain strategies involving options to manage or minimize the risk of its investments or for investment purposes. A call option gives the purchaser of such option the right to buy, and the writer (the Fund) the obligation to sell, the underlying security at the stated exercise price
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Notes to Financial Statements (Continued)
PowerShares Exchange-Traded Fund Trust
April 30, 2013
during the option period. When the Fund writes (sells) call options, the amount of the premium received is recorded as a liability in the Statements of Assets and Liabilities and is subsequently "marked-to-market" to reflect the current value of the option written. The difference between the premium received and the current value of the option is recorded as unrealized appreciation or depreciation. The net change in unrealized appreciation (depreciation) is reported in the Statements of Operations. If a written call option expires, or if the Fund enters into a closing purchase transaction, the Fund realizes a gain (or a loss if the closing purchase transaction exceeds the premium received when the option was written) without regard to any unrealized gain or loss on the underlying security, and the liability related to such option is extinguished. If a written option is exercised, the Fund realizes a gain or loss from the sale of the underlying security and the proceeds of the sale are increased by the premium originally received. The primary risk in writing a call option is market risk; the Fund gives up the opportunity for profit if the market price of the underlying security increases and the option is exercised but will continue to bear the risk of loss should the price of the underlying security decline. There is also a risk the Fund may not be able to enter into a closing transaction because of an illiquid market.
Writing Covered Call Option Risk. By writing covered call options in return for the receipt of premiums, the S&P 500 BuyWrite Portfolio 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. If trading of options is suspended, the Fund may be unable to write options at times that may be desirable or advantageous to the Fund to do so.
I. Swap Agreements
Global Listed Private Equity Portfolio may enter into various swap transactions, including interest rate, total return, index, currency exchange rate and credit default swap contracts for investment purposes or to manage interest rate, currency or credit risk.
Interest rate, total return, index, and currency exchange rate swap agreements are two-party contracts entered into primarily to exchange the returns (or differentials in rates of returns) earned or realized on particular predetermined investments or instruments. The gross returns to be exchanged or "swapped" between the parties are calculated with respect to a notional amount, (i.e., the return on or increase in value of a particular dollar amount invested at a particular interest rate or return of an underlying asset, in a particular foreign currency, or in a "basket" of securities representing a particular index).
Changes in the value of swap agreements are recognized as unrealized gains (losses) in the Statements of Operations by "marking to market" on a daily basis to reflect the value of the swap agreement at the end of each trading day. Payments received or paid at the beginning of the agreement are reflected as such on the Statements of Assets and Liabilities and may be referred to as upfront payments. The Fund accrues for the fixed payment stream and amortizes upfront payments, if any, on swap agreements on a daily basis with the net amount, recorded as a component of realized gain (loss), on the Statements of Operations. A liquidation payment received or made at the termination of a swap agreement is recorded as realized gain (loss) on the Statements of Operations. The Fund segregates liquid securities having a value at least equal
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Notes to Financial Statements (Continued)
PowerShares Exchange-Traded Fund Trust
April 30, 2013
to the amount of the potential obligation of a Fund under any swap transaction. The Fund's maximum risk of loss from counterparty risk, either as the protection seller or as the protection buyer, is the value of the contract. The risk may be mitigated by having a master netting arrangement between the Fund and the counterparty and by the posting of collateral by the counterparty to cover the Fund's exposure to the counterparty. Entering into these agreements involves, to varying degrees, lack of liquidity and elements of credit, market, and counterparty risk in excess of amounts recognized on the Statements of Assets and Liabilities. Such risks involve the possibility that a swap is difficult to sell or liquidate; the counterparty does not honor its obligations under the agreement and unfavorable interest rates and market fluctuations.
J. Securities Lending
CleantechTM Portfolio, Golden Dragon China Portfolio, Lux Nanotech Portfolio, Water Resources Portfolio and WilderHill Clean Energy Portfolio may lend portfolio securities having a market value up to one-third of each Fund's total assets. Such loans are secured by cash collateral equal to no less than 102% of the market value of the loaned securities determined daily by the securities lending provider. Cash collateral received in connection with these loans is invested in an affiliated money market fund and is shown as such on the Schedule of Investments. It is the policy of these Funds to obtain additional collateral from or return excess collateral to the borrower by the end of the next business day, following the valuation date of the securities loaned. Therefore, the value of the collateral held may be temporarily less than the value of the securities on loan. Lending securities entails a risk of loss to a Fund, if and to the extent that, the market value of the securities loaned were to increase, and the borrower did not increase the collateral accordingly, and the borrower fails to return the securities. Upon the failure of the borrower to return the securities, collateral may be liquidated and the securities may be purchased on the open market to replace the loaned securities. A Fund could experience delays and costs in gaining access to the collateral. A Fund bears the risk of any deficiency in the amount of the collateral available for return to the borrower due to any loss on the collateral invested. Dividends received on cash collateral investments for securities lending transactions, which are net of compensation to counterparties, are included in Securities lending income on the Statements of Operations. The aggregate value of securities out on loan is shown on the Statements of Assets and Liabilities, if any.
Note 3. Investment Advisory Agreement and Other Agreements
The Trust has entered into an Investment Advisory Agreement with the Adviser, pursuant to which the Adviser has overall responsibility 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 (except for S&P 500 BuyWrite Portfolio and S&P 500® High Quality Portfolio) has agreed to pay the Adviser an annual fee of 0.50% of the Fund's average daily net assets. The S&P 500 BuyWrite Portfolio has agreed to pay the Adviser an annual unitary management fee of 0.75% of its average daily net assets, pursuant to which the Adviser has agreed to pay for substantially all expenses of S&P 500 BuyWrite Portfolio, including the cost of transfer agency, custody, fund administration, legal, audit, and other services, except for advisory fees, distribution fees, if any, brokerage expenses, taxes, interest, litigation expenses, acquired fund fees and expenses, if any, and extraordinary expenses. Effective December 18, 2012, S&P 500® High Quality Portfolio has agreed to pay the Adviser an annual fee equal to 0.29% of the Fund's average daily net assets. Prior to December 18, 2012, S&P 500® High Quality Portfolio's annual fee was 0.50% of the Fund's average daily net assets.
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Notes to Financial Statements (Continued)
PowerShares Exchange-Traded Fund Trust
April 30, 2013
The Adviser's parent, Invesco Ltd., has agreed to indemnify and hold harmless the Global Listed Private Equity Portfolio and the Independent Trustees of the Trust against any and all loss, damages, liability and expenses arising from certain alleged omission or misstatement in the Fund's registration statement.
The Adviser has entered into an Amended and Restated Excess Expense Agreement (the "Expense Agreement") with the Trust, pursuant to which the Adviser has agreed to waive fees and/or pay Fund expenses to the extent necessary to prevent the operating expenses (excluding interest expenses, brokerage commissions and other trading expenses, sub-licensing fees, offering costs, taxes, acquired fund fees and expenses, if any, and extraordinary expenses) of each Fund (except for S&P 500® High Quality Portfolio and S&P 500 BuyWrite Portfolio) from exceeding 0.60% of the Fund's average daily net assets per year (the "Expense Cap"), through at least August 31, 2014. The Expense Cap for S&P 500® High Quality Portfolio is 0.29% of the Fund's average daily net assets per year, effective November 21, 2012, through at least August 31, 2014. Prior to November 21, 2012, S&P 500® High Quality Portfolio's Expense Cap was 0.50%. Offering costs excluded from the Expense Cap are: (a) initial legal fees pertaining to the Funds' Shares offered for sale; (b) initial Securities and Exchange Commission and state registration fees; and (c) initial fees paid to be listed on an exchange.
The Expense Agreement provides that the fees waived or expenses borne by the Adviser are subject to recapture by the Adviser for up to three years from the date the fee was waived 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 Expense Agreement does not apply to S&P 500 BuyWrite Portfolio.
The amounts available for potential future recapture by the Adviser under the Expense Agreement and the expiration schedule at April 30, 2013 are as follows:
Total Potential | Potential Recapture Amounts Expiring | ||||||||||||||||||
Recapture Amounts | 04/30/14 | 04/30/15 | 04/30/16 | ||||||||||||||||
Aerospace & Defense Portfolio | $ | 198,270 | $ | 81,095 | $ | 80,440 | $ | 36,735 | |||||||||||
CleantechTM Portfolio | 229,886 | 92,835 | 75,189 | 61,862 | |||||||||||||||
Global Listed Private Equity Portfolio | 260,018 | 77,130 | 175,729 | 7,159 | |||||||||||||||
Golden Dragon China Portfolio | 267,300 | 105,598 | 70,047 | 91,655 | |||||||||||||||
Lux Nanotech Portfolio | 301,964 | 111,968 | 101,134 | 88,862 | |||||||||||||||
S&P 500® High Quality Portfolio | 781,036 | 249,922 | 259,976 | 271,138 | |||||||||||||||
WilderHill Clean Energy Portfolio | 221,180 | 43,397 | 177,783 | — | |||||||||||||||
WilderHill Progressive Energy Portfolio | 241,458 | 97,636 | 79,732 | 64,090 |
The Trust has entered into a Distribution Agreement with Invesco Distributors, Inc. (the "Distributor"), which serves as the distributor of Creation Units for each Fund. The Distributor does not maintain a secondary market in the Shares. The Funds are not charged any fees pursuant to the Distribution Agreement. The Distributor is an affiliate of the Adviser.
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Notes to Financial Statements (Continued)
PowerShares Exchange-Traded Fund Trust
April 30, 2013
The Adviser has entered into a licensing agreement for each Fund with the following entities (each, a "Licensor"):
Fund | Licensor | ||||||
Aerospace & Defense Portfolio | International Space Business Council | ||||||
CleantechTM Portfolio | Cleantech Capital Indices LLC | ||||||
DWA Technical LeadersTM Portfolio | Dorsey Wright & Associates, Inc. | ||||||
Global Listed Private Equity Portfolio | Red Rocks Capital Partners, LLC | ||||||
Golden Dragon China Portfolio | NASDAQ OMX Group, Inc. | ||||||
Lux Nanotech Portfolio | Lux Research, Inc. | ||||||
S&P 500 BuyWrite Portfolio | Standard & Poor's ("S&P"), a division of The | ||||||
McGraw-Hill Companies, Inc. | |||||||
S&P 500® High Quality Portfolio | Standard & Poor's Financial Services LLC | ||||||
Water Resources Portfolio | NASDAQ OMX Group, Inc. | ||||||
WilderHill Clean Energy Portfolio | WilderShares, LLC | ||||||
WilderHill Progressive Energy Portfolio | WilderShares, LLC |
Each Underlying Index name trademark is owned by its respective Licensor. These trademarks have been licensed to the Adviser for use with the Funds. Each Fund is entitled to use its Underlying Index pursuant to the Trust's sub-licensing agreement with the Adviser. The Funds (other than the S&P 500 BuyWrite Portfolio) are required to pay the sub-licensing fees that are shown on the Statements of Operations. 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 Trust has entered into service agreements whereby The Bank of New York Mellon, a wholly-owned subsidiary of The Bank of New York Mellon Corporation, serves as the administrator, custodian, fund accountant and transfer agent for each Fund.
Note 4. Investments in Affiliates
The Adviser is a subsidiary of Invesco Ltd. and therefore Invesco Ltd. is considered to be affiliated with S&P 500 BuyWrite Portfolio. The table below shows the Fund's transactions in, and earnings from, its investments in Invesco Ltd. for the fiscal year ended April 30, 2013.
S&P 500 BuyWrite Portfolio
Value April 30, 2012 | Purchases at Cost | Proceeds from Sales | Change in Unrealized Appreciation (Depreciation) | Realized Gain | Value April 30, 2013 | Dividend Income | |||||||||||||||||||||||||
Invesco Ltd. | $ | 137,614 | $ | 151,053 | $ | (98,029 | ) | $ | (14,418 | ) | $ | 32,121 | $ | 208,341 | $ | 5,541 |
Note 5. Additional Valuation Information
GAAP defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date, under current market conditions. GAAP establishes a hierarchy that prioritizes the inputs to valuation methods, giving the highest priority to readily available unadjusted quoted prices in an active market for identical assets (Level 1) and the lowest priority to significant unobservable inputs (Level 3), generally when market prices are not readily available or are unreliable. Based on the valuation inputs, the securities or other
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Notes to Financial Statements (Continued)
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April 30, 2013
investments are tiered into one of three levels. Changes in valuation methods may result in transfers in or out of an investment's assigned level:
Level 1 – Prices are determined using quoted prices in an active market for identical assets.
Level 2 – Prices are determined using other significant observable inputs. Observable inputs are inputs that other market participants may use in pricing a security. These may include quoted prices for similar securities, interest rates, prepayment speeds, credit risk, yield curves, loss severities, default rates, discount rates, volatilities and others.
Level 3 – Prices are determined using significant unobservable inputs. In situations where quoted prices or observable inputs are unavailable (for example, when there is little or no market activity for an investment at the end of the period), unobservable inputs may be used. Unobservable inputs reflect the Fund's own assumptions about the factors market participants would use in determining fair value of the securities or instruments and would be based on the best available information.
Except for the Funds listed below, as of April 30, 2013, the securities in each Fund were valued based on Level 1 inputs (see the Schedule of Investments for security categories). The depreciation on options held in S&P 500 BuyWrite Portfolio was based on Level 1 inputs. The level assigned to the securities valuations may not be an indication of the risk or liquidity associated with investing in those securities. Because of the inherent uncertainties of valuation, the values reflected in the financial statements may materially differ from the value received upon actual sale of those investments.
Investments in Securities | |||||||||||||||||||
Level 1 | Level 2 | Level 3 | Total | ||||||||||||||||
Global Listed Private Equity Portfolio | |||||||||||||||||||
Equity Securities | $ | 368,998,468 | $ | — | $ | — | $ | 368,998,468 | |||||||||||
Money Market Fund | 36,735,109 | — | — | 36,735,109 | |||||||||||||||
Swap Agreements* | — | (80,541 | ) | — | (80,541 | ) | |||||||||||||
Total Investments | $ | 405,733,577 | $ | (80,541 | ) | $ | — | $ | 405,653,036 | ||||||||||
Golden Dragon China Portfolio | |||||||||||||||||||
Equity Securities | $ | 180,777,200 | $ | 932,351 | $ | 0 | $ | 181,709,551 | |||||||||||
Money Market Fund | 38,822,813 | — | — | 38,822,813 | |||||||||||||||
Total Investments | $ | 219,600,013 | $ | 932,351 | $ | 0 | $ | 220,532,364 |
* Unrealized appreciation (depreciation).
Note 6. Derivative Investments
Global Listed Private Equity Portfolio and S&P 500 BuyWrite Portfolio have implemented required disclosures about derivative instruments and hedging activities in accordance with GAAP. This disclosure 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. The enhanced disclosure has no impact on the results of operations reported in the financial statements.
97
Notes to Financial Statements (Continued)
PowerShares Exchange-Traded Fund Trust
April 30, 2013
Value of Derivative Instruments at Fiscal Year-End
The table below summarizes the value of each Fund's derivative instruments, detailed by primary risk exposure, held as of April 30, 2013:
Value | |||||||||||
Risk Exposure/Derivative Type | Assets | Liabilities | |||||||||
Global Listed Private Equity Portfolio | |||||||||||
Equity risk | |||||||||||
Swap agreements(a) | $ | — | $ | (80,541 | ) | ||||||
S&P 500 BuyWrite Portfolio | |||||||||||
Equity risk | |||||||||||
Options written contracts | $ | — | $ | (6,604,520 | ) |
(a) Values are disclosed on the Statement of Assets and Liabilities under unrealized appreciation (depreciation) on swap agreements.
Effect of Derivative Instruments for the fiscal year ended April 30, 2013
The table below summarizes the gains (losses) on derivative instruments, detailed by primary risk exposure, recognized in earnings during the year:
Location of Gain (Loss) on Statements of Operations | |||||||||||
Options* | Swap Agreements* | ||||||||||
Global Listed Private Equity Portfolio | |||||||||||
Realized Gain | |||||||||||
Equity risk | $ | — | $ | 14,790,136 | |||||||
Change in Unrealized Appreciation (Depreciation) | |||||||||||
Equity risk | — | (482,089 | ) | ||||||||
S&P 500 BuyWrite Portfolio | |||||||||||
Realized Gain | |||||||||||
Equity risk | (24,531,975 | ) | — | ||||||||
Change in Unrealized Appreciation (Depreciation) | |||||||||||
Equity risk | (3,442,309 | ) | — | ||||||||
Total | $ | (27,974,284 | ) | $ | 14,308,047 |
* The average notional value of options and swap agreements outstanding during year was $242,816,583 and $30,223,821, respectively.
98
Notes to Financial Statements (Continued)
PowerShares Exchange-Traded Fund Trust
April 30, 2013
Global Listed Private Equity Portfolio
Open Total Return Swap Agreements | |||||||||||||||||||||||
Counterparty | Reference Entity | Buy/Sell Protection | Termination Date | Notional Amount (000) | Value Unrealized Appreciation (Depreciation) | ||||||||||||||||||
Citibank, N.A. | Fortress Investment Group LLC | Buy | 10/28/13 | $ | 2,944 | $ | (13,883 | ) | |||||||||||||||
Citibank, N.A. | KKR & Co. LP | Buy | 10/28/13 | 13,163 | (38,540 | ) | |||||||||||||||||
Citibank, N.A. | KKR Financial Holdings LLC | Buy | 10/28/13 | 5,575 | 15,249 | ||||||||||||||||||
Citibank, N.A. | The Blackstone Group LP | Buy | 10/28/13 | 17,304 | (43,367 | ) | |||||||||||||||||
Total | $ | 38,986 | $ | (80,541 | ) |
S&P 500 BuyWrite Portfolio
Transactions During the Year | |||||||||||
Call Option Contracts | |||||||||||
Number of Contracts | Premiums Received | ||||||||||
Beginning of year | 1,121 | $ | 2,137,853 | ||||||||
Written | 21,199 | 42,104,348 | |||||||||
Closed | (14,460 | ) | (30,324,892 | ) | |||||||
Expired | (6,508 | ) | (10,976,950 | ) | |||||||
End of year | 1,352 | $ | 2,940,359 |
Open Options Written at Year-End | |||||||||||||||||||||||||||
Contract Month | Strike Price | Number of Contracts | Premiums Received | Unrealized Appreciation (Depreciation) | Value | ||||||||||||||||||||||
Call Option S&P 500 Index | May-13 | $ | 1,550 | 1,352 | $ | 2,940,359 | $ | (3,664,161 | ) | $ | 6,604,520 |
Note 7. Distributions to Shareholders and Tax Components of Net Assets
Tax Character of Distributions to Shareholders Paid During the Fiscal Years Ended April 30, 2013 and 2012:
2013 | 2012 | ||||||||||||||||||||||||||
Ordinary Income | Long-term Capital Gains | Return of Capital | Ordinary Income | Long-term Capital Gains | Return of Capital | ||||||||||||||||||||||
Aerospace & Defense Portfolio | $ | 1,029,052 | $ | — | $ | — | $ | 939,444 | $ | — | $ | — | |||||||||||||||
CleantechTM Portfolio | 712,757 | — | — | 997,420 | — | — | |||||||||||||||||||||
DWA Technical LeadersTM Portfolio | 5,799,247 | — | — | 727,024 | — | — | |||||||||||||||||||||
Global Listed Private Equity Portfolio | 12,397,099 | — | — | 23,559,182 | — | 2,711,317 |
99
Notes to Financial Statements (Continued)
PowerShares Exchange-Traded Fund Trust
April 30, 2013
2013 | 2012 | ||||||||||||||||||||||||||
Ordinary Income | Long-term Capital Gains | Return of Capital | Ordinary Income | Long-term Capital Gains | Return of Capital | ||||||||||||||||||||||
Golden Dragon China Portfolio | $ | 4,722,570 | $ | — | $ | — | $ | 6,163,053 | $ | — | $ | — | |||||||||||||||
Lux Nanotech Portfolio | 319,441 | — | — | 94,200 | — | — | |||||||||||||||||||||
S&P 500 BuyWrite Portfolio | 8,424,421 | 2,056,844 | — | 9,784,068 | 499,499 | — | |||||||||||||||||||||
S&P 500® High Quality Portfolio | 3,292,190 | — | — | 2,688,575 | — | — | |||||||||||||||||||||
Water Resources Portfolio | 6,646,911 | — | — | 7,241,759 | — | — | |||||||||||||||||||||
WilderHill Clean Energy Portfolio | 4,631,864 | — | — | 6,029,472 | — | — | |||||||||||||||||||||
WilderHill Progressive Energy Portfolio | 318,497 | — | — | 512,778 | — | — |
Tax Components of Net Assets at Fiscal Year-End:
Undistributed Ordinary Income | Undistributed Long-term Capital Gains | Temporary Book/Tax Differences | Net Unrealized Appreciation (Depreciation) — Investment Securities | Net Unrealized Appreciation — Other Investments | Capital Loss Carryforward | Late-Year Ordinary/ Post-October Capital Losses Deferrals* | Shares of Beneficial Interest | Total Net Assets | |||||||||||||||||||||||||||||||
Aerospace & Defense Portfolio | $ | 95,080 | $ | — | $ | (12,379 | ) | $ | (1,333,248 | ) | $ | — | $ | (28,689,454 | ) | $ | (705,965 | ) | $ | 78,252,551 | $ | 47,606,585 | |||||||||||||||||
CleantechTM Portfolio | 308,351 | — | (11,215 | ) | 6,045,197 | 483 | (80,747,240 | ) | (2,285,463 | ) | 148,003,936 | 71,314,049 | |||||||||||||||||||||||||||
DWA Technical LeadersTM Portfolio | 407,041 | — | (20,273 | ) | 127,082,034 | — | (220,060,937 | ) | (4,885,960 | ) | 974,407,058 | 876,928,963 | |||||||||||||||||||||||||||
Global Listed Private Equity Portfolio | 29,486,627 | — | (14,692 | ) | 23,590,349 | 8,187 | (85,775,973 | ) | — | 441,197,009 | 408,491,507 | ||||||||||||||||||||||||||||
Golden Dragon China Portfolio** | — | — | (22,392 | ) | (12,478,627 | ) | — | (266,257,445 | ) | (14,392,255 | ) | 474,894,960 | 181,744,241 | ||||||||||||||||||||||||||
Lux Nanotech Portfolio | 118,116 | — | (8,532 | ) | 300,529 | — | (82,267,371 | ) | — | 101,492,339 | 19,635,081 | ||||||||||||||||||||||||||||
S&P 500 BuyWrite Portfolio | 7,298,914 | 66,033 | — | — | — | — | — | 197,856,882 | 205,221,829 | ||||||||||||||||||||||||||||||
S&P 500® High Quality Portfolio | 538,939 | — | (11,665 | ) | 40,881,621 | — | (139,607,381 | ) | (588,439 | ) | 327,522,994 | 228,736,069 | |||||||||||||||||||||||||||
Water Resources Portfolio | 1,091,967 | — | (63,781 | ) | 128,877,558 | — | (501,699,658 | ) | (45,538,981 | ) | 1,294,397,190 | 877,064,295 | |||||||||||||||||||||||||||
WilderHill Clean Energy Portfolio | 1,402,218 | — | (35,706 | ) | (22,835,391 | ) | — | (1,403,455,406 | ) | (39,098,578 | ) | 1,606,516,694 | 142,493,831 | ||||||||||||||||||||||||||
WilderHill Progressive Energy Portfolio | 234,973 | — | (8,488 | ) | 2,497,551 | — | (31,648,038 | ) | (65,659 | ) | 67,573,784 | 38,584,123 |
* Includes net capital, currency and Passive Foreign Investment Company ("PFIC") losses incurred after October 31 ("Post-October Capital Losses") and the combination of ordinary losses incurred after December 31 within the taxable year and
100
Notes to Financial Statements (Continued)
PowerShares Exchange-Traded Fund Trust
April 30, 2013
specified losses incurred after October 31 within the taxable year ("Late-Year Ordinary Losses"), that are deemed to arise on the first business day of each Fund's next taxable year.
** The Golden Dragon China Portfolio incurred and will elect to defer Late-Year Ordinary Losses of $140,149 and Post-October Capital Losses of $14,252,106.
Capital loss carryforward is calculated and reported as of a specific date. Results of transactions and other activity after that date may affect the amount of capital loss carryforward actually available for the Funds to utilize. The Regulated Investment Company Modernization Act of 2010 eliminated the eight-year carryover period for capital losses that arise in taxable years beginning after its enactment date of December 22, 2010. Consequently, these capital losses can be carried forward for an unlimited period. However, capital losses with an expiration period may not be used to offset capital gains until all net capital losses without an expiration date have been utilized. Additionally, post-enactment capital loss carryforwards will retain their character as either short-term or long-term capital losses instead of as short-term capital losses as under prior law. The ability to utilize capital loss carryforward in the future may be limited under Internal Revenue Code rules and related regulations based on the results of future transactions.
The following Funds have capital loss carryforward as of April 30, 2013 which expires as follows:
Post-effective no expiration | |||||||||||||||||||||||||||||||||||||||
2014 | 2015 | 2016 | 2017 | 2018 | 2019 | Short-term | Long-term | Total* | |||||||||||||||||||||||||||||||
Aerospace & Defense Portfolio | $ | — | $ | 104,662 | $ | 2,374,303 | $ | 7,470,897 | $ | 6,428,813 | $ | 9,464,875 | $ | — | $ | 2,845,904 | $ | 28,689,454 | |||||||||||||||||||||
CleantechTM Portfolio | — | — | 1,171,839 | 14,341,075 | 25,186,026 | 12,098,616 | 2,508,773 | 25,440,911 | 80,747,240 | ||||||||||||||||||||||||||||||
DWA Technical LeadersTM Portfolio | — | — | 5,046,566 | 92,771,702 | 60,219,842 | 10,496,532 | 51,526,295 | — | 220,060,937 | ||||||||||||||||||||||||||||||
Global Listed Private Equity Portfolio | — | — | 796,018 | 7,687,052 | 47,149,399 | — | 17,753,892 | 12,389,612 | 85,775,973 | ||||||||||||||||||||||||||||||
Golden Dragon China Portfolio | 1,018,146 | 3,128,677 | 1,235,904 | 22,836,421 | 74,072,167 | 35,483,714 | 13,128,297 | 115,354,119 | 266,257,445 | ||||||||||||||||||||||||||||||
Lux Nanotech Portfolio | — | 3,986,980 | 793,005 | 27,406,131 | 14,663,516 | 12,379,025 | 8,600,062 | 14,438,652 | 82,267,371 | ||||||||||||||||||||||||||||||
S&P 500 BuyWrite Portfolio | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||
S&P 500® High Quality Portfolio | — | 28,563,259 | 21,013,690 | 37,241,965 | 42,466,537 | 9,869,908 | — | 452,022 | 139,607,381 | ||||||||||||||||||||||||||||||
Water Resources Portfolio | — | 11,876,489 | 3,553,481 | 93,208,162 | 265,948,030 | 33,978,301 | 24,939,435 | 68,195,760 | 501,699,658 | ||||||||||||||||||||||||||||||
WilderHill Clean Energy Portfolio | 2,098,368 | 89,533,576 | 44,707,703 | 261,712,498 | 460,657,845 | 241,008,862 | 54,265,564 | 249,470,990 | 1,403,455,406 | ||||||||||||||||||||||||||||||
WilderHill Progressive Energy Portfolio | — | — | 179,432 | 8,319,827 | 12,433,887 | 2,282,887 | 3,867,926 | 4,564,079 | 31,648,038 |
* Capital loss carryforward as of the date listed above is reduced for limitations, if any, to the extent required by the Internal Revenue Code.
101
Notes to Financial Statements (Continued)
PowerShares Exchange-Traded Fund Trust
April 30, 2013
Note 8. Investment Transactions
For the fiscal year ended April 30, 2013, 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 | $ | 8,014,343 | $ | 7,941,363 | |||||||
CleantechTM Portfolio | 15,934,695 | 17,142,365 | |||||||||
DWA Technical LeadersTM Portfolio | 453,449,026 | 453,597,105 | |||||||||
Global Listed Private Equity Portfolio | 153,017,146 | 148,431,819 | |||||||||
Golden Dragon China Portfolio | 124,741,753 | 125,574,644 | |||||||||
Lux Nanotech Portfolio | 8,771,018 | 6,023,407 | |||||||||
S&P 500 BuyWrite Portfolio | 52,492,667 | 83,606,168 | |||||||||
S&P 500® High Quality Portfolio | 29,613,515 | 29,003,358 | |||||||||
Water Resources Portfolio | 255,643,103 | 256,783,291 | |||||||||
WilderHill Clean Energy Portfolio | 72,315,382 | 73,134,907 | |||||||||
WilderHill Progressive Energy Portfolio | 13,048,106 | 12,801,874 |
For the fiscal year ended April 30, 2013, in-kind transactions associated with creations and redemptions were as follows:
Securities Received | Securities Delivered | ||||||||||
Aerospace & Defense Portfolio | $ | 459,474 | $ | 14,376,139 | |||||||
CleantechTM Portfolio | — | 33,076,814 | |||||||||
DWA Technical LeadersTM Portfolio | 700,683,408 | 501,511,961 | |||||||||
Global Listed Private Equity Portfolio | 61,525,521 | 32,795,225 | |||||||||
Golden Dragon China Portfolio | 14,004,438 | 55,104,748 | |||||||||
Lux Nanotech Portfolio | 34,454,572 | 41,666,605 | |||||||||
S&P 500 BuyWrite Portfolio | 158,113,327 | 109,279,189 | |||||||||
S&P 500® High Quality Portfolio | 76,737,852 | 24,730,026 | |||||||||
Water Resources Portfolio | 53,188,924 | 129,258,945 | |||||||||
WilderHill Clean Energy Portfolio | 23,666,512 | 45,819,348 | |||||||||
WilderHill Progressive Energy Portfolio | — | 11,052,207 |
Gains (losses) on in-kind transactions are generally not considered taxable gains (losses) for federal income tax purposes.
102
Notes to Financial Statements (Continued)
PowerShares Exchange-Traded Fund Trust
April 30, 2013
At April 30, 2013, the aggregate cost and the net unrealized appreciation (depreciation) of investments for tax purposes were as follows:
Cost | Net Unrealized Appreciation (Depreciation) | Gross Unrealized Appreciation | Gross Unrealized (Depreciation) | ||||||||||||||||
Aerospace & Defense Portfolio | $ | 49,011,388 | $ | (1,333,248 | ) | $ | 3,190,860 | $ | (4,524,108 | ) | |||||||||
CleantechTM Portfolio | 69,979,176 | 6,045,197 | 14,850,324 | (8,805,127 | ) | ||||||||||||||
DWA Technical LeadersTM Portfolio | 750,565,433 | 127,082,034 | 127,806,040 | (724,006 | ) | ||||||||||||||
Global Listed Private Equity Portfolio | 382,143,228 | 23,590,349 | 39,071,952 | (15,481,603 | ) | ||||||||||||||
Golden Dragon China Portfolio | 233,010,991 | (12,478,627 | ) | 16,851,955 | (29,330,582 | ) | |||||||||||||
Lux Nanotech Portfolio | 20,887,245 | 300,529 | 837,734 | (537,205 | ) | ||||||||||||||
S&P 500 BuyWrite Portfolio | 211,707,249 | — | — | — | |||||||||||||||
S&P 500® High Quality Portfolio | 187,865,342 | 40,881,621 | 41,386,112 | (504,491 | ) | ||||||||||||||
Water Resources Portfolio | 750,844,020 | 128,877,558 | 162,716,604 | (33,839,046 | ) | ||||||||||||||
WilderHill Clean Energy Portfolio | 207,700,447 | (22,835,391 | ) | 17,651,570 | (40,486,961 | ) | |||||||||||||
WilderHill Progressive Energy Portfolio | 36,142,902 | 2,497,551 | 7,001,528 | (4,503,977 | ) |
Note 9. Reclassification of Permanent Differences
Primarily as a result of differing book/tax treatment of in-kind transactions on April 30, 2013, amounts were reclassified between undistributed net investment income (loss), undistributed net realized gain (loss) and shares of beneficial interest. These reclassifications had no effect on the net assets of each Fund. For the fiscal year ended April 30, 2013, the reclassifications were as follows:
Undistributed Net Investment Income (Loss) | Undistributed Net Realized Gain (Loss) | Shares of Beneficial Interest | |||||||||||||
Aerospace & Defense Portfolio | $ | — | $ | (914,038 | ) | $ | 914,038 | ||||||||
CleantechTM Portfolio | (34,293 | ) | (3,729,978 | ) | 3,764,271 | ||||||||||
DWA Technical LeadersTM Portfolio | — | (80,609,856 | ) | 80,609,856 | |||||||||||
Global Listed Private Equity Portfolio | 16,326,397 | (20,499,667 | ) | 4,173,270 | |||||||||||
Golden Dragon China Portfolio | 27,559 | (2,820,104 | ) | 2,792,545 | |||||||||||
Lux Nanotech Portfolio | — | (3,200,133 | ) | 3,200,133 | |||||||||||
S&P 500 BuyWrite Portfolio | 4,834,620 | (4,834,619 | ) | (1 | ) | ||||||||||
S&P 500® High Quality Portfolio | — | (5,835,667 | ) | 5,835,667 | |||||||||||
Water Resources Portfolio | — | (26,181,006 | ) | 26,181,006 | |||||||||||
WilderHill Clean Energy Portfolio | — | 6,743,205 | (6,743,205 | ) | |||||||||||
WilderHill Progressive Energy Portfolio | 1,020 | (1,942,987 | ) | 1,941,967 |
Note 10. Trustees' Fees
The Funds compensate each Independent Trustee. The Adviser, as a result of the unitary management fee, pays for such compensation for S&P 500 BuyWrite Portfolio. The Trustee who is an "interested person" (the "Non-Independent Trustee") of the Trust does not receive any Trustees' fees.
The Trust has adopted a deferred compensation plan (the "Plan"). Under the Plan, an Independent Trustee who has executed a Deferred Fee Agreement (a "Participating Trustee") may defer receipt of all or a portion of his compensation ("Deferral Fees"). Such Deferral Fees are deemed to be invested in select
103
Notes to Financial Statements (Continued)
PowerShares Exchange-Traded Fund Trust
April 30, 2013
PowerShares Funds. The Deferral Fees payable to the Participating Trustee are valued as of the date such Deferral 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 distributions or with declines in the value of the Shares selected.
Note 11. Capital
Shares are created and redeemed by the Trust only in Creation Units of 50,000 Shares. Only Authorized Participants are permitted to purchase or redeem Creation Units from the Funds. Such transactions are generally permitted on an in-kind basis, with a balancing cash component to equate the transaction to the NAV per Share of a 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 eligible for trading by the Authorized Participant or as a result of other market circumstances.
Each Fund may issue Shares in advance of receipt of a basket of securities ("Deposit Securities") subject to various conditions, including a requirement to maintain on deposit with the Trust cash at least equal to 105% of the market value of the missing Deposit Securities. In accordance with each Fund's Participant Agreement, Creation Units will be issued to an Authorized Participant, notwithstanding the fact that the corresponding Deposit Securities 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 105%, which the Adviser may change from time to time, of the value of the missing Deposit Securities.
Transactions in a Fund's Shares are disclosed in detail on the Statements of Changes in Net Assets.
Note 12. 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. Each Independent Trustee is also indemnified against certain liabilities arising out of the performance of his duties to the Trust pursuant to an Indemnification Agreement between the Independent Trustee and 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.
104
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 PowerShares Aerospace & Defense Portfolio, PowerShares CleantechTM Portfolio, PowerShares DWA Technical LeadersTM Portfolio, PowerShares Global Listed Private Equity Portfolio, PowerShares Golden Dragon China Portfolio, PowerShares Lux Nanotech Portfolio, PowerShares S&P 500 BuyWrite Portfolio, PowerShares S&P 500® High Quality Portfolio, PowerShares Water Resources Portfolio, PowerShares WilderHill Clean Energy Portfolio and PowerShares WilderHill Progressive Energy Portfolio (each an individual portfolio of PowerShares Exchange-Traded Fund Trust, hereafter referred to as the "Funds") at April 30, 2013, the results of each of their operations for the year then ended, the change in each of their net assets for each of the two years in the period then ended 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 Funds' 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, 2013 by correspondence with the custodian and brokers, provide a reasonable basis for our opinion.
As discussed in note 2G of the Notes to the Financial Statements, the Funds changed their accounting policy to discontinue the use of equalization accounting for book purposes.
/s/ PricewaterhouseCoopers LLP
Chicago, IL
June 25, 2013
105
Tax Information
Form 1099-DIV, Form 1042-S and other year-end tax information provide shareholders with actual calendar year amounts that should be included in their tax returns. Shareholders should consult their tax advisors.
The following distribution information is being provided as required by the Internal Revenue Code or to meet a specific state's requirement.
Each Fund designates the following amounts or, if subsequently determined to be different, the maximum amount allowable for its fiscal year ended April 30, 2013:
Federal Income Tax Information
Qualified Dividend Income* | Corporate Dividend-Received Deduction* | ||||||||||
Aerospace & Defense Portfolio | 100 | % | 100 | % | |||||||
CleantechTM Portfolio | 100 | % | 16 | % | |||||||
DWA Technical LeadersTM Portfolio | 100 | % | 100 | % | |||||||
Global Listed Private Equity Portfolio | 21 | % | 9 | % | |||||||
Golden Dragon China Portfolio | 70 | % | 0 | % | |||||||
Lux Nanotech Portfolio | 65 | % | 61 | % | |||||||
S&P 500 BuyWrite Portfolio | 0 | % | 0 | % | |||||||
S&P 500® High Quality Portfolio | 100 | % | 100 | % | |||||||
Water Resources Portfolio | 100 | % | 93 | % | |||||||
WilderHill Clean Energy Portfolio | 27 | % | 17 | % | |||||||
WilderHill Progressive Energy Portfolio | 100 | % | 59 | % |
The Fund intends to elect to pass through to shareholders the credit for taxes paid to foreign countries.
The gross foreign income and foreign taxes paid are as follows:
Gross Foreign Income | Foreign Taxes Paid | ||||||||||
Golden Dragon China Portfolio | $ | 4,218,440 | $ | 283,371 |
* The above percentages are based on ordinary income dividends paid to shareholders during the Fund's fiscal year.
106
Trustees and Officers
The Independent Trustees, the Non-Independent 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 a Trustee are shown below.
The Trustees and officers information is current as of April 30, 2013.
Name, Address and Age of Independent Trustees | 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 Complex** Overseen by Independent Trustees | Other Directorships Held by Independent Trustees During the Past 5 Years | ||||||||||||||||||
Ronn R. Bagge (55) c/o Invesco PowerShares Capital Management LLC 301 West Roosevelt Road Wheaton, IL 60187 | Trustee | Since 2003 | Founder and Principal, YQA Capital Management LLC (1998-Present); formerly Owner/CEO of Electronic Dynamic Balancing Co., Inc. (high-speed rotating equipment service provider). | 113 | None | ||||||||||||||||||
Todd J. Barre (55) c/o Invesco PowerShares Capital Management LLC 301 West Roosevelt Road Wheaton, IL 60187 | Trustee | Since 2010 | Assistant Professor of Business, Trinity Christian College (2010-Present); formerly, Vice President and Senior Investment Strategist (2001-2008), Director of Open Architecture and Trading (2007-2008), Head of Fundamental Research (2004-2007) and Vice President and Senior Fixed Income Strategist (1994-2001), BMO Financial Group/Harris Private Bank. | 113 | None |
* This is the date the Independent Trustee began serving the Trust. Each Trustee serves an indefinite term, until his successor is elected.
** Fund Complex includes all open-end funds (including all of their portfolios) advised by the Adviser. At May 9, 2013, the Fund Complex consisted of the Trust's 55 portfolios and three other exchange-traded fund trusts with 58 portfolios advised by the Adviser.
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Trustees and Officers (Continued)
Name, Address and Age of Independent Trustees | 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 Complex** Overseen by Independent Trustees | Other Directorships Held by Independent Trustees During the Past 5 Years | ||||||||||||||||||
Marc M. Kole (52) c/o Invesco PowerShares Capital Management LLC 301 West Roosevelt Road Wheaton, IL 60187 | Trustee | Since 2006 | Formerly, Chief Financial Officer, Hope Network (social services) (2008-2012); Assistant Vice President and Controller, Priority Health (health insurance) (2005-2008); Senior Vice President of Finance, United Healthcare (2004-2005); Senior Vice President of Finance, Oxford Health Plans (2000-2004). | 113 | None | ||||||||||||||||||
Yung Bong Lim (48) c/o Invesco PowerShares Capital Management LLC 301 West Roosevelt Road Wheaton, IL 60187 | Trustee | Since 2013 | Managing Partner, Residential Dynamics Group LLC (2008-Present); formerly, Managing Director, Citadel Investment Group, L.L.C. (1999-2007). | 58 | None | ||||||||||||||||||
Philip M. Nussbaum (51) c/o Invesco PowerShares Capital Management LLC 301 West Roosevelt Road Wheaton, IL 60187 | Trustee | Since 2003 | Chairman, Performance Trust Capital Partners (2004-Present). | 113 | None |
* This is the date the Independent Trustee began serving the Trust. Each Trustee serves an indefinite term, until his successor is elected.
** Fund Complex includes all open-end funds (including all of their portfolios) advised by the Adviser. At May 9, 2013, the Fund Complex consisted of the Trust's 55 portfolios and three other exchange-traded fund trusts with 58 portfolios advised by the Adviser.
108
Trustees and Officers (Continued)
Name, Address and Age of Independent Trustees | 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 Complex** Overseen by Independent Trustees | Other Directorships Held by Independent Trustees During the Past 5 Years | ||||||||||||||||||
Gary R. Wicker (51) c/o Invesco PowerShares Capital Management LLC 301 West Roosevelt Road Wheaton, IL 60187 | Trustee | Since 2013 | Senior Vice President of Global Finance and Chief Financial Officer at RBC Ministries (publishing company) (since 2013); formerly, Executive Vice President and Chief Financial Officer, Zondervan Publishing (A division of Harper Collins/NewsCorp) (2007-2012); Senior Vice President and Group Controller (2005-2006), Senior Vice President and Chief Financial Officer (2003-2004), Chief Financial Officer (2001-2003), Vice President, Finance and Controller (1999-2001) and Assistant Controller (1997-1999), divisions of The Thomson Corporation (information services provider). | 58 | None |
* This is the date the Independent Trustee began serving the Trust. Each Trustee serves an indefinite term, until his successor is elected.
** Fund Complex includes all open-end funds (including all of their portfolios) advised by the Adviser. At May 9, 2013, the Fund Complex consisted of the Trust's 55 portfolios and three other exchange-traded fund trusts with 58 portfolios advised by the Adviser.
109
Trustees and Officers (Continued)
Name, Address and Age of Independent Trustees | 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 Complex** Overseen by Independent Trustees | Other Directorships Held by Independent Trustees During the Past 5 Years | ||||||||||||||||||
Donald H. Wilson (53) c/o Invesco PowerShares Capital Management LLC 301 West Roosevelt Road Wheaton, IL 60187 | Chairman of the Board and Trustee | Chairman since 2012; Trustee since 2006 | Chairman and Chief Executive Officer, Stone Pillar Advisers, Ltd. (2010-Present); formerly, Chief Operating Officer, AMCORE Financial, Inc. (bank holding company) (2007-2009); Executive Vice President and Chief Financial Officer, AMCORE Financial, Inc. (2006-2007); Senior Vice President and Treasurer, Marshall & Ilsley Corp. (bank holding company) (1995-2006). | 113 | None |
* This is the date the Independent Trustee began serving the Trust. Each Trustee serves an indefinite term, until his successor is elected.
** Fund Complex includes all open-end funds (including all of their portfolios) advised by the Adviser. At May 9, 2013, the Fund Complex consisted of the Trust's 55 portfolios and three other exchange-traded fund trusts with 58 portfolios advised by the Adviser.
110
Trustees and Officers (Continued)
The Non-Independent Trustee and the 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 Non-Independent Trustee and the other directorships, if any, held by the Non-Independent Trustee are shown below.
Name, Address and Age of Non-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 Complex** Overseen by Non- Independent Trustee | Other Directorships Held by Non-Independent Trustee During the Past 5 Years | ||||||||||||||||||
Kevin M. Carome (57) Invesco Ltd. Two Peachtree Pointe 1555 Peachtree St., N.E., Suite 1800 Atlanta, GA 30309 | Trustee | Since 2010 | Senior Managing Director, Secretary and General Counsel, Invesco Ltd. (2006-Present); Director, Invesco Advisers, Inc. (2009-Present); formerly, Senior Vice President, Secretary and General Counsel, Invesco Advisers, Inc. (2003-2005); Senior Vice President and General Counsel, Liberty Financial Companies, Inc. (2000-2001); General Counsel of certain investment management subsidiaries of Liberty Financial Companies, Inc. (1998-2000); Associate General Counsel, Liberty Financial Companies, Inc. (1993-1998); Associate, Ropes & Gray LLP. | 113 | None |
* This is the date the Non-Independent Trustee began serving the Trust. Each Trustee serves an indefinite term, until his successor is elected.
** Fund Complex includes all open-end funds (including all of their portfolios) advised by the Adviser. At May 9, 2013, the Fund Complex consisted of the Trust's 55 portfolios and three other exchange-traded fund trusts with 58 portfolios advised by the Adviser.
111
Trustees and Officers (Continued)
Name, Address and Age of Executive Officer | Position(s) Held with Trust | Length of Time Served* | Principal Occupation(s) During Past 5 Years | ||||||||||||
Andrew Schlossberg (39) Invesco Management Group, Inc. 11 Greenway Plaza Suite 1000 Houston, TX 77046 | President | Since 2009 | Managing Director, U.S. head of business strategy and chief marketing officer for Invesco Ltd. in the United States (2008-Present); Director, Invesco Distributors, Inc. (2012-Present); and Senior Vice President, Invesco Advisers, Inc. (formerly known as Invesco Institutional (N.A.), Inc.) (registered investment adviser) (2009-Present); formerly, Mr. Schlossberg served in multiple roles within Invesco, including head of corporate development, as well as global leadership roles in strategy and product development in the company's North American Institutional and Retirement divisions (2002-2007). | ||||||||||||
Peter Hubbard (32) Invesco PowerShares Capital Management LLC 301 West Roosevelt Road Wheaton, IL 60187 | Vice President | Since 2009 | Vice President and Director of Portfolio Management – Invesco PowerShares Capital Management LLC (2008-Present); formerly, Portfolio Manager, Invesco PowerShares Capital Management LLC (2007-2008); Research Analyst, Invesco PowerShares Capital Management LLC (2005-2007); Research Analyst and Trader, Ritchie Capital, a hedge fund operator (2003-2005). | ||||||||||||
David Warren (55) Invesco Canada Ltd. 5140 Yonge Street Suite 900, Toronto, Ontario M2N 6X7 | Vice President | Since 2009 | Director, Executive Vice President and Chief Financial Officer, Invesco Canada Ltd. (formerly, Invesco Trimark Ltd.) and Chief Administrative Officer, North American Retail, Invesco Ltd. (2007-Present); Senior Vice President, Invesco Management Group, Inc. (2007-Present); Director, Executive Vice President and Chief Financial Officer, Invesco, Inc.; Director, Invesco Canada Holdings Inc.; formerly, Director, Executive Vice President and Chief Financial Officer, Invesco Canada Ltd. (formerly, Invesco Trimark Ltd.) (2000-2006). |
* This is the period for which the Officers began serving the Trust. Each Officer serves an indefinite term, until his or her successor is elected.
112
Trustees and Officers (Continued)
Name, Address and Age of Executive Officer | Position(s) Held with Trust | Length of Time Served* | Principal Occupation(s) During Past 5 Years | ||||||||||||
Sheri Morris (49) Invesco Management Group, Inc. 11 Greenway Plaza Suite 1000 Houston, TX 77046-1173 | Vice President | Since 2012 | Vice President, Treasurer and Principal Financial Officer, The Invesco Funds; Vice President, Invesco Advisers, Inc. (formerly known as Invesco Institutional (N.A.), Inc.) (registered investment adviser) (2009-Present) and Vice President, PowerShares Exchange-Traded Fund Trust, PowerShares Exchange-Traded Fund Trust II, PowerShares India Exchange-Traded Fund Trust and PowerShares Actively Managed Exchange-Traded Fund Trust; formerly, Treasurer, PowerShares Exchange-Traded Fund Trust, PowerShares Exchange-Traded Fund Trust II, PowerShares India Exchange-Traded Fund Trust and PowerShares Actively Managed Exchange-Traded Fund Trust (2012-2013); formerly, Vice President, Invesco Advisers, Inc., Invesco Aim Capital Management, Inc. and Invesco Aim Private Asset Management, Inc.; Assistant Vice President and Assistant Treasurer, The Invesco Funds and Assistant Vice President, Invesco Advisers, Inc., Invesco Aim Capital Management, Inc. and Invesco Aim Private Asset Management, Inc. |
* This is the period for which the Officers began serving the Trust. Each Officer serves an indefinite term, until his or her successor is elected.
113
Trustees and Officers (Continued)
Name, Address and Age of Executive Officer | Position(s) Held with Trust | Length of Time Served* | Principal Occupation(s) During Past 5 Years | ||||||||||||
Steven M. Hill (48) Invesco PowerShares Capital Management LLC 301 West Roosevelt Road Wheaton, IL 60187 | Vice President and Treasurer | Since 2012 Since 2013 | Vice President and Treasurer, PowerShares Exchange-Traded Fund Trust, PowerShares Exchange-Traded Fund Trust II, PowerShares India Exchange-Traded Fund Trust and PowerShares Actively Managed Exchange-Traded Fund Trust (since 2013); Head of Global ETF Administration, Invesco PowerShares Capital Management LLC; formerly, Treasurer, PowerShares Exchange-Traded Fund Trust, PowerShares Exchange-Traded Fund Trust II, PowerShares India Exchange-Traded Fund Trust and PowerShares Actively Managed Exchange-Traded Fund Trust (2011-2012); Senior Managing Director and Chief Financial Officer, Destra Capital Management LLC and its subsidiaries (2010-2011); Chief Financial Officer, Destra Investment Trust and Destra Investment Trust II (2010-2011); Senior Managing Director, Claymore Securities, Inc. (2003-2010); and Chief Financial Officer, Claymore sponsored mutual funds (2003-2010). | ||||||||||||
Christopher Joe (44) Invesco Management Group, Inc. 11 Greenway Plaza Suite 1000 Houston, TX 77046-1173 | Chief Compliance Officer | Since 2012 | U.S. Compliance Director, Invesco, Ltd.; Chief Compliance Officer, Invesco Investment Advisers, LLC (registered investment adviser); formerly, Assistant Fund Accounting Manager, Invesco, Ltd. |
* This is the period for which the Officers began serving the Trust. Each Officer serves an indefinite term, until his or her successor is elected.
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Trustees and Officers (Continued)
Name, Address and Age of Executive Officer | Position(s) Held with Trust | Length of Time Served* | Principal Occupation(s) During Past 5 Years | ||||||||||||
Anna Paglia (39) Invesco PowerShares Capital Management LLC 301 West Roosevelt Road Wheaton, IL 60187 | Secretary | Since 2011 | Secretary, PowerShares Exchange-Traded Fund Trust, PowerShares Exchange-Traded Fund Trust II, PowerShares India Exchange-Traded Fund Trust, and PowerShares Actively Managed Exchange-Traded Fund Trust; Head of Legal, Invesco PowerShares Capital Management LLC (2010-Present); formerly, Partner, K&L Gates LLP (formerly, Bell Boyd & Lloyd LLP) (2007-2010); Associate Counsel at Barclays Global Investors Ltd. (2004-2006). |
Availability of Additional Information About the Trustees
The Statement of Additional Information includes additional information about the Trustees and is
available, without charge, upon request at (800) 983-0903.
* This is the period for which the Officers began serving the Trust. Each Officer serves an indefinite term, until his or her successor is elected.
115
Board Considerations Regarding Approval of Continuation of Investment Advisory Agreement
At a meeting held on April 18, 2013, the Board of Trustees of the PowerShares Exchange-Traded Fund Trust (the "Trust"), including the Independent Trustees, approved the continuation of the Investment Advisory Agreement between Invesco PowerShares Capital Management LLC (the "Adviser") and the Trust for the following 53 series (each, a "Fund" and together, the "Funds"):
PowerShares Aerospace & Defense Portfolio
PowerShares Buyback AchieversTM Portfolio
PowerShares CleantechTM Portfolio
PowerShares Dividend AchieversTM Portfolio
PowerShares DWA Technical LeadersTM Portfolio
PowerShares Dynamic Basic Materials Sector Portfolio
PowerShares Dynamic Biotechnology & Genome Portfolio
PowerShares Dynamic Building & Construction Portfolio
PowerShares Dynamic Consumer Discretionary Sector Portfolio
PowerShares Dynamic Consumer Staples Sector Portfolio
PowerShares Dynamic Energy Exploration & Production Portfolio
PowerShares Dynamic Energy Sector Portfolio
PowerShares Dynamic Financial Sector Portfolio
PowerShares Dynamic Food & Beverage Portfolio
PowerShares Dynamic Healthcare Sector Portfolio
PowerShares Dynamic Industrials Sector Portfolio
PowerShares Dynamic Large Cap Growth Portfolio
PowerShares Dynamic Large Cap Value Portfolio
PowerShares Dynamic Leisure and Entertainment Portfolio
PowerShares Dynamic MagniQuant Portfolio
PowerShares Dynamic Market Portfolio
PowerShares Dynamic Media Portfolio
PowerShares Dynamic Networking Portfolio
PowerShares Dynamic Oil & Gas Services Portfolio
PowerShares Dynamic OTC Portfolio
PowerShares Dynamic Pharmaceuticals Portfolio
PowerShares Dynamic Retail Portfolio
PowerShares Dynamic Semiconductors Portfolio
PowerShares Dynamic Software Portfolio
PowerShares Dynamic Technology Sector Portfolio
PowerShares Dynamic Utilities Portfolio
PowerShares Financial Preferred Portfolio
PowerShares FTSE RAFI US 1000 Portfolio
PowerShares FTSE RAFI US 1500 Small-Mid Portfolio
PowerShares Fundamental Pure Large Core Portfolio
PowerShares Fundamental Pure Large Growth Portfolio
PowerShares Fundamental Pure Large Value Portfolio
PowerShares Fundamental Pure Mid Core Portfolio
PowerShares Fundamental Pure Mid Growth Portfolio
PowerShares Fundamental Pure Mid Value Portfolio
PowerShares Fundamental Pure Small Core Portfolio
PowerShares Fundamental Pure Small Growth Portfolio
PowerShares Fundamental Pure Small Value Portfolio
PowerShares Global Listed Private Equity Portfolio
PowerShares Golden Dragon China Portfolio
PowerShares High Yield Equity Dividend AchieversTM Portfolio
PowerShares International Dividend AchieversTM Portfolio
PowerShares Lux Nanotech Portfolio
PowerShares S&P 500® High Quality Portfolio
PowerShares Water Resources Portfolio
PowerShares WilderHill Clean Energy Portfolio
PowerShares WilderHill Progressive Energy Portfolio
PowerShares Zacks Micro Cap Portfolio
116
Board Considerations Regarding Approval of Continuation of Investment Advisory Agreement (Continued)
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 a 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 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. 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 and projected staffing, 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 execution of portfolio transactions on behalf of the Funds. The Trustees also reviewed information on the performance of the Funds and the performance of their underlying indexes for the one-year, three-year, five-year and since-inception periods ended December 31, 2012, as applicable, including reports for each of the last three calendar years on the correlation and tracking error between each Fund's performance and the performance of its underlying index, as well as the Adviser's analysis of the tracking error between each Fund and its underlying index. In reviewing the tracking error report, the Trustees considered information provided by Ibbotson Associates, a consultant to the Independent Trustees, with respect to general expected tracking error ranges and various explanations for tracking error. The Trustees noted that for each applicable period, the correlation and tracking error for each Fund was within the targeted range set forth in the Trust's registration statement. The Trustees concluded that each Fund was correlated to its underlying index and that the tracking error for each Fund was within an acceptable range given 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 concluded that the nature, extent and quality of services provided by the Adviser to the Funds under the Investment Advisory Agreement were appropriate and reasonable.
Fees, Expenses and Profitability. The Trustees reviewed and discussed the information provided by the Adviser on each Fund's advisory fee and net expense ratio, as compared to information compiled by the Adviser from Lipper Inc. databases on the advisory fees and net expense ratios of comparable exchange-traded funds ("ETFs"), open-end (non-ETF) index funds and open-end actively-managed funds. The Trustees noted that the annual advisory fee charged to each Fund is:
• 0.50% of the Fund's average daily net assets for each Fund other than PowerShares Dividend AchieversTM Portfolio, PowerShares High Yield Equity Dividend AchieversTM Portfolio, PowerShares International Dividend AchieversTM Portfolio, PowerShares FTSE RAFI US 1000 Portfolio, PowerShares FTSE RAFI US 1500 Small-Mid Portfolio, PowerShares Fundamental Pure Large Core Portfolio, PowerShares Fundamental Pure Large Growth Portfolio, PowerShares Fundamental Pure
117
Board Considerations Regarding Approval of Continuation of Investment Advisory Agreement (Continued)
Large Value Portfolio, PowerShares Fundamental Pure Mid Core Portfolio, PowerShares Fundamental Pure Mid Growth Portfolio, PowerShares Fundamental Pure Mid Value Portfolio, PowerShares Fundamental Pure Small Core Portfolio, PowerShares Fundamental Pure Small Growth Portfolio, PowerShares Fundamental Pure Small Value Portfolio and PowerShares S&P 500® High Quality Portfolio;
• 0.40% of the Fund's average daily net assets for each of PowerShares Dividend AchieversTM Portfolio, PowerShares High Yield Equity Dividend AchieversTM Portfolio and PowerShares International Dividend AchieversTM Portfolio; and
• 0.29% of the Fund's average daily net assets for each of PowerShares FTSE RAFI US 1000 Portfolio, PowerShares FTSE RAFI US 1500 Small-Mid Portfolio, PowerShares Fundamental Pure Large Core Portfolio, PowerShares Fundamental Pure Large Growth Portfolio, PowerShares Fundamental Pure Large Value Portfolio, PowerShares Fundamental Pure Mid Core Portfolio, PowerShares Fundamental Pure Mid Growth Portfolio, PowerShares Fundamental Pure Mid Value Portfolio, PowerShares Fundamental Pure Small Core Portfolio, PowerShares Fundamental Pure Small Growth Portfolio, PowerShares Fundamental Pure Small Value Portfolio and PowerShares S&P 500® High Quality Portfolio (for PowerShares S&P 500® High Quality Portfolio, the Trustees noted that the advisory fee was reduced to 0.29% effective December 18, 2012). In approving the advisory fee reduction for the Funds at the December 18, 2012 meeting, the Trustees considered the Adviser's representation that there would be no diminution in the quantity or quality of services provided in connection with the amendment to the Investment Advisory Agreement.
The Trustees also noted that the Adviser has agreed to waive a portion of its advisory fee and/or pay expenses (an "Expense Cap") to the extent necessary to prevent the annual operating expenses of each Fund from exceeding the percentage of that Fund's average daily net assets, at least until August 31, 2014, as set forth below:
• 0.60%, excluding interest expenses, brokerage commissions and other trading expenses, taxes, acquired fund fees and expenses and extraordinary expenses, for each of PowerShares Dynamic OTC Portfolio and PowerShares Dynamic Market Portfolio;
• 0.50%, excluding interest expenses, licensing fees, offering costs, brokerage commissions and other trading expenses, taxes, acquired fund fees and expenses and extraordinary expenses, for each of PowerShares Dividend AchieversTM Portfolio, PowerShares High Yield Equity Dividend AchieversTM Portfolio and PowerShares International Dividend AchieversTM Portfolio;
• 0.39%, excluding interest expenses, offering costs, brokerage commissions and other trading expenses, taxes, acquired fund fees and expenses and extraordinary expenses, for each of PowerShares FTSE RAFI US 1000 Portfolio, PowerShares FTSE RAFI US 1500 Small-Mid Portfolio, PowerShares Fundamental Pure Large Core Portfolio, PowerShares Fundamental Pure Large Growth Portfolio, PowerShares Fundamental Pure Large Value Portfolio, PowerShares Fundamental Pure Mid Core Portfolio, PowerShares Fundamental Pure Mid Growth Portfolio, PowerShares Fundamental Pure Mid Value Portfolio, PowerShares Fundamental Pure Small Core Portfolio, PowerShares Fundamental Pure Small Growth Portfolio and PowerShares Fundamental Pure Small Value Portfolio;
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Board Considerations Regarding Approval of Continuation of Investment Advisory Agreement (Continued)
• 0.29%, excluding interest expenses, offering costs, brokerage commissions and other trading expenses, taxes, acquired fund fees and expenses and extraordinary expenses, for PowerShares S&P 500® High Quality Portfolio (the Trustees noted that the Expense Cap for the Fund was reduced to 0.29% effective November 21, 2012); and
• 0.60%, excluding interest expenses, licensing fees, offering costs, brokerage commissions and other trading expenses, taxes, acquired fund fees and expenses and extraordinary expenses, for each other Fund.
The Trustees noted that the Adviser represented that it does not serve as the investment adviser to any clients, other than ETFs overseen by the Trustees, with comparable investment strategies as the Funds, but that the Adviser provides sub-advisory services to clients with comparable investment strategies as certain of the Funds. The Trustees further noted the Adviser's explanation with respect to the sub-advisory fees it receives for such services in comparison to the advisory fees charged to the Funds. The Trustees noted that each Fund's advisory fee was:
• higher than the median advisory fee of its ETF peer funds (except for the advisory fee of each of PowerShares Golden Dragon China Portfolio, PowerShares International Dividend AchieversTM Portfolio and PowerShares Fundamental Pure Small Value Portfolio, which was equal to or lower than the median advisory fee of its ETF peer funds); and
• higher than the median advisory fee of its open-end index peer funds (except for the advisory fee of each of PowerShares Dynamic Energy Exploration & Production Portfolio, PowerShares Dynamic Energy Sector Portfolio, PowerShares Dynamic Oil & Gas Services Portfolio, PowerShares Fundamental Pure Large Core Portfolio, PowerShares Fundamental Pure Large Growth Portfolio, PowerShares Fundamental Pure Mid Growth Portfolio, PowerShares Fundamental Pure Mid Value Portfolio, PowerShares Fundamental Pure Small Value Portfolio, PowerShares Water Resources Portfolio, PowerShares WilderHill Clean Energy Portfolio and PowerShares WilderHill Progressive Energy Portfolio, which was lower than the median advisory fee of its open-end index peer funds; and there was no comparable data for PowerShares Aerospace & Defense Portfolio, PowerShares CleantechTM Portfolio, PowerShares Dividend AchieversTM Portfolio, PowerShares Dynamic Basic Materials Sector Portfolio, PowerShares Dynamic Biotechnology & Genome Portfolio, PowerShares Dynamic Building & Construction Portfolio, PowerShares Dynamic Consumer Discretionary Sector Portfolio, PowerShares Dynamic Consumer Staples Sector Portfolio, PowerShares Dynamic Financial Sector Portfolio, PowerShares Dynamic Food & Beverage Portfolio, PowerShares Dynamic Healthcare Sector Portfolio, PowerShares Dynamic Industrials Sector Portfolio, PowerShares Dynamic Leisure and Entertainment Portfolio, PowerShares Dynamic Media Portfolio, PowerShares Dynamic Pharmaceuticals Portfolio, PowerShares Dynamic Retail Portfolio, PowerShares Financial Preferred Portfolio, PowerShares Global Listed Private Equity Portfolio, PowerShares Golden Dragon China Portfolio, PowerShares High Yield Equity Dividend AchieversTM Portfolio or PowerShares International Dividend AchieversTM Portfolio); but
• lower than the median advisory fee of its open-end actively-managed peer funds.
The Trustees determined that the advisory fees were reasonable, noting the complexity of the indexes, the distinguishing factors of the Funds, and the higher administrative, operational and management oversight
119
Board Considerations Regarding Approval of Continuation of Investment Advisory Agreement (Continued)
costs for the Adviser. With respect to the Funds' net expense ratios, the Trustees noted that the net expense ratio for each Fund was:
• higher than the median net expense ratio of its ETF peer funds (except for the net expense ratio of each of PowerShares Dynamic OTC Portfolio, PowerShares FTSE RAFI US 1000 Portfolio, PowerShares FTSE RAFI US 1500 Small-Mid Portfolio, PowerShares Fundamental Pure Mid Core Portfolio, PowerShares Fundamental Pure Mid Growth Portfolio, PowerShares Fundamental Pure Small Core Portfolio and PowerShares S&P 500® High Quality Portfolio, which was equal to or less than the median net expense ratio of its ETF peer funds); and
• higher than the median net expense ratio of its open-end index peer funds (except for the net expense ratio of each of PowerShares Dividend AchieversTM Portfolio, PowerShares DWA Technical LeadersTM Portfolio, PowerShares Dynamic Energy Exploration & Production Portfolio, PowerShares Energy Sector Portfolio, PowerShares Dynamic Large Cap Growth Portfolio, PowerShares Dynamic Large Cap Value Portfolio, PowerShares Dynamic Networking Portfolio, PowerShares Oil & Gas Services Portfolio, PowerShares Dynamic OTC Portfolio, PowerShares Dynamic Semiconductors Portfolio, PowerShares Dynamic Software Portfolio, PowerShares Dynamic Technology Sector Portfolio, PowerShares Dynamic Utilities Sector Portfolio, PowerShares FTSE RAFI US 1500 Small-Mid Portfolio, PowerShares Fundamental Pure Large Core Portfolio, PowerShares Fundamental Pure Large Growth Portfolio, PowerShares Fundamental Pure Large Value Portfolio, PowerShares Fundamental Pure Mid Core Portfolio, PowerShares Fundamental Pure Mid Growth Portfolio, PowerShares Fundamental Pure Mid Value Portfolio, PowerShares Fundamental Pure Small Core Portfolio, PowerShares Fundamental Pure Small Growth Portfolio, PowerShares Fundamental Pure Small Value Portfolio, PowerShares High Yield Equity Dividend AchieversTM Portfolio, PowerShares Lux Nanotech Portfolio, PowerShares S&P 500® High Quality Portfolio, PowerShares Water Resources Portfolio, PowerShares WilderHill Clean Energy Portfolio and PowerShares WilderHill Progressive Energy Portfolio, which was lower than the median net expense ratio of its open-end index peer funds; and there was no comparable data for PowerShares Aerospace & Defense Portfolio, PowerShares CleantechTM Portfolio, PowerShares Dynamic Basic Materials Sector Portfolio, PowerShares Dynamic Biotechnology & Genome Portfolio, PowerShares Dynamic Building & Construction Portfolio, PowerShares Dynamic Consumer Discretionary Sector Portfolio, PowerShares Dynamic Consumer Staples Sector Portfolio, PowerShares Dynamic Financial Sector Portfolio, PowerShares Dynamic Food & Beverage Portfolio, PowerShares Dynamic Healthcare Sector Portfolio, PowerShares Dynamic Industrials Sector Portfolio, PowerShares Dynamic Leisure and Entertainment Portfolio, PowerShares Dynamic Media Portfolio, PowerShares Dynamic Pharmaceuticals Portfolio, PowerShares Dynamic Retail Portfolio, PowerShares Financial Preferred Portfolio, PowerShares Global Listed Private Equity Portfolio, PowerShares Golden Dragon China Portfolio or PowerShares International Dividend AchieversTM Portfolio); but
• lower than the median net expense ratio of its 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, and noted those Funds for which license fees are included in the Funds' Expense Caps.
The Board concluded that the advisory fee and expense ratio of each Fund (giving effect to the Fund's Expense Cap) were reasonable and appropriate in light of the services provided.
120
Board Considerations Regarding Approval of Continuation of Investment Advisory Agreement (Continued)
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 or losses realized by the Adviser from its relationship to each Fund. The Trustees concluded that the estimated profitability to the Adviser of the advisory services provided to any of the Funds was 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 and expense limitation agreed to by the Adviser. The Trustees noted that, for Funds whose expenses are higher than their respective Expense Caps, any reduction in that Fund's expenses would be enjoyed by the Adviser, but that Fund shareholders benefit from the lower expense ratio as a result of the Fund's Expense Cap. The Trustees also noted that the Excess Expense Agreement with the Trust provides that the Adviser is entitled to be reimbursed by each Fund, other than PowerShares Dynamic Market Portfolio and PowerShares Dynamic OTC Portfolio, 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 considered whether the advisory fee rate for each Fund was reasonable in relation to the asset size of that Fund, and concluded that the flat advisory fee was reasonable and appropriate, noting the Fund expenses the Adviser has borne as a result of the 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. No single factor was determinative in the Board's analysis.
121
Board Considerations Regarding Approval of Continuation of Investment Advisory Agreement (Continued)
At a meeting held on April 18, 2013, the Board of Trustees of the PowerShares Exchange-Traded Fund Trust (the "Trust"), including the Independent Trustees, approved the continuation of the Investment Advisory Agreement between Invesco PowerShares Capital Management LLC (the "Adviser") and the Trust for PowerShares NASDAQ Internet Portfolio and PowerShares S&P 500 BuyWrite Portfolio (each, a "Fund" and together, the "Funds").
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 a 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 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. 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 and projected staffing, 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 oversight of the execution of portfolio transactions on behalf of the Funds. The Trustees also reviewed information on the performance of the Funds and the performance of their underlying indexes for the one-year, three-year, five-year and since-inception (June 12, 2008 for PowerShares NASDAQ Internet Portfolio and December 20, 2007 for PowerShares S&P 500 BuyWrite Portfolio) periods ended December 31, 2012, as applicable, including reports for each of the last three calendar years on the correlation and tracking error between each Fund's performance and the performance of its underlying index, as well as the Adviser's analysis of the tracking error between each Fund and its underlying index. In reviewing the tracking error report, the Trustees considered information provided by Ibbotson Associates, a consultant to the Independent Trustees, with respect to general expected tracking error ranges and various explanations for tracking error. The Trustees noted that for each period, the correlation and tracking error for each Fund was within the targeted range set forth in the Trust's registration statement. The Trustees concluded that each Fund was correlated to its underlying index and that the tracking error for each Fund was within an acceptable range given 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 concluded that the nature, extent and quality of services provided by the Adviser to the Funds under the Investment Advisory Agreement were appropriate and reasonable.
Fees, Expenses and Profitability. The Trustees reviewed and discussed the information provided by the Adviser on each Fund's net expense ratio and unitary advisory fee, as compared to information compiled by the Adviser from Lipper Inc. databases on the expense ratios of comparable exchange-traded funds
122
Board Considerations Regarding Approval of Continuation of Investment Advisory Agreement (Continued)
("ETFs"), open-end (non-ETF) index funds and open-end actively-managed funds. The Trustees noted that the annual unitary advisory fee is 0.60% for PowerShares NASDAQ Internet Portfolio and 0.75% for PowerShares S&P 500 BuyWrite Portfolio, and that the Adviser pays all other operating expenses of each Fund, except that each Fund pays its brokerage commissions and other trading expenses, taxes, interest and extraordinary expenses.
The Trustees noted that the Adviser represented that it does not provide investment advisory services to any clients with comparable investment strategies as the Funds. The Trustees noted that PowerShares NASDAQ Internet Portfolio's advisory fee was higher than the median net expense ratio of its ETF peer funds, but was lower than the median net expense ratios of its open-end index peer funds and open-end actively-managed peer funds. The Trustees noted that PowerShares S&P 500 BuyWrite Portfolio's advisory fee was lower than the median net expense ratios of its ETF peer funds, open-end index peer funds and open-end actively-managed peer funds. The Trustees noted that each Fund's advisory fee was reasonable because of the complexity of the indices, the distinguishing factors of the Funds and the higher administrative, operational and management oversight costs for the Adviser. The Trustees also noted that a portion of each Fund's advisory fee was attributable to a license fee payable out of the unitary fee charged to that Fund. The Board concluded that the unitary advisory fee charged to each Fund was reasonable and appropriate in light of the services provided.
In conjunction with their review of the unitary advisory fee, the Trustees also considered information provided by the Adviser on the revenues received by the Adviser under the Investment Advisory Agreement. The Trustees reviewed information provided by the Adviser on its profitability as well as any profits or losses realized by the Adviser from its relationship to each Fund. The Trustees concluded that the estimated profitability to the Adviser of the advisory services provided to each Fund was 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 and expense ratio. The Trustees noted that any reduction in fixed costs associated with the management of the Funds would be enjoyed by the Adviser, but a unitary fee provides certainty in expenses for the Funds. The Trustees considered whether the advisory fee rate for each Fund was reasonable in relation to the asset size of that 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 relationships 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. No single factor was determinative in the Board's analysis.
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PROXY VOTING POLICIES AND PROCEDURES
A description of the Trust's 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) 983-0903. 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) 983-0903; or (ii) accessing the Trust's Form N-PX on the Commission's website at www.sec.gov.
QUARTERLY PORTFOLIOS
The Trust files its complete schedule of portfolio holdings for the Funds with the Commission for the first and third quarters of each fiscal year on Form N-Q. The Trust's Form N-Q is available on the Commission's website at www.sec.gov. The Trust's Form N-Q may also be reviewed and copied at the Commission's Public Reference Room in Washington, D.C.; information on the operation of the Public Reference Room may be obtained by calling (800) SEC-0330.
FREQUENCY DISTRIBUTION OF DISCOUNTS AND PREMIUMS
A table showing the number of days the market price of each Fund's shares was greater than the Fund's net asset value, and the number of days it was less than the Fund's net asset value (i.e., premium or discount) for the most recently completed calendar year, and the calendar quarters since that year end (or the life of the Fund, if shorter) may be found at the Fund's website at www.invescopowershares.com.
301 West Roosevelt Road
Wheaton, IL 60187
800.983.0903
www.invescopowershares.com
© 2013 Invesco PowerShares Capital Management LLC P-PS-AR-4
2013 Annual Report to Shareholders
April 30, 2013
PowerShares Dynamic Basic Materials Sector Portfolio (PYZ)
PowerShares Dynamic Consumer Discretionary Sector Portfolio (PEZ)
PowerShares Dynamic Consumer Staples Sector Portfolio (PSL)
PowerShares Dynamic Energy Sector Portfolio (PXI)
PowerShares Dynamic Financial Sector Portfolio (PFI)
PowerShares Dynamic Healthcare Sector Portfolio (PTH)
PowerShares Dynamic Industrials Sector Portfolio (PRN)
PowerShares Dynamic Technology Sector Portfolio (PTF)
PowerShares Dynamic Utilities Portfolio (PUI)
PowerShares NASDAQ Internet Portfolio (PNQI)
Table of Contents
The Market Environment | 2 | ||||||
Manager's Analysis | 4 | ||||||
Fees and Expenses | 43 | ||||||
Sector Portfolios | |||||||
Schedules of Investments | |||||||
PowerShares Dynamic Basic Materials Sector Portfolio (PYZ) | 45 | ||||||
PowerShares Dynamic Consumer Discretionary Sector Portfolio (PEZ) | 47 | ||||||
PowerShares Dynamic Consumer Staples Sector Portfolio (PSL) | 49 | ||||||
PowerShares Dynamic Energy Sector Portfolio (PXI) | 50 | ||||||
PowerShares Dynamic Financial Sector Portfolio (PFI) | 51 | ||||||
PowerShares Dynamic Healthcare Sector Portfolio (PTH) | 53 | ||||||
PowerShares Dynamic Industrials Sector Portfolio (PRN) | 54 | ||||||
PowerShares Dynamic Technology Sector Portfolio (PTF) | 56 | ||||||
PowerShares Dynamic Utilities Portfolio (PUI) | 57 | ||||||
PowerShares NASDAQ Internet Portfolio (PNQI) | 58 | ||||||
Statements of Assets and Liabilities | 60 | ||||||
Statements of Operations | 62 | ||||||
Statements of Changes in Net Assets | 64 | ||||||
Financial Highlights | 68 | ||||||
Notes to Financial Statements | 73 | ||||||
Report of Independent Registered Public Accounting Firm | 87 | ||||||
Tax Information | 88 | ||||||
Trustees and Officers | 89 | ||||||
Board Considerations Regarding Approval of Continuation of Investment Advisory Agreement | 97 | ||||||
Board Considerations Regarding Approval of Continuation of Investment Advisory Agreement for PowerShares NASDAQ Internet Portfolio | 103 |
The Market Environment
Domestic Equity:
The fiscal year ended April 30, 2013, began amid negative investor sentiment; the ongoing eurozone sovereign debt crisis intensified and equity markets declined. Throughout the summer, news from Europe and China was poor; this precipitated a slowdown in the U.S., where market performance and economic data were mixed. Employment data, for instance, showed some improvement – but not enough. Companies generally met earnings expectations but missed revenue guidance.
In early fall, as the European Central Bank implemented new measures to support member economies and the U.S. Federal Reserve initiated a third round of quantitative easing, consumer sentiment began to improve. Businesses, on the other hand, grew more hesitant to spend in the second half of the fiscal year. This was due in large part to uncertainty surrounding U.S. election results, "fiscal cliff" negotiations and sequestration spending cuts in early 2013. However, for the first time in years, U.S. markets appeared willing to look past national headline events. U.S. equity markets were generally strong in the final five months of the reporting period, with major market indexes setting multi-year or even all-time highs.
2
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Manager's Analysis
PowerShares Dynamic Basic Materials Sector Portfolio (ticker: PYZ)
As an index fund, the PowerShares Dynamic Basic Materials Sector Portfolio (the "Fund") is passively managed and attempts to track the returns of an underlying index. The Fund seeks investment results that generally correspond (before fees and expenses) to the price and yield of the Dynamic Basic Materials Sector IntellidexSM Index (the "Index"). The Fund generally will invest at least 90% of its total assets in common stocks of basic materials companies that comprise the Index. These companies are principally engaged in the business of producing raw materials, including paper or wood products, chemicals, construction materials, and mining and metals.
The Index includes basic materials stocks from the 2,000 largest U.S. stocks (by market capitalization) traded on the NYSE, NYSE MKT and the NASDAQ. The index provider, NYSE Arca, Inc., ranks capital appreciation potential using a proprietary NYSE Arca Intellidex model. The Index includes 60 stocks that NYSE Arca, Inc. identifies as having significant operations in that sector, ranks them according to their model score, and separates them into two modified, equally weighted groups. The 16 top-ranked relatively larger stocks collectively receive 40% of the Index weighting (each stock receives on average a 2.5% weighting) and the 44 top-ranked relatively smaller stocks collectively receive 60% of the Index weighting (each stock receives on average a 1.36% weighting).
For the fiscal year ended April 30, 2013, on a market price basis, the Fund returned 15.26%. On a net asset value ("NAV") basis, the Fund returned 15.37%. During the same time period, the Index returned 16.19%. During the fiscal year, the Fund fully replicated the components of the Index; therefore, the Fund's performance (NAV basis) differed from the Index primarily due to fees and expenses that the Fund incurred during the period.
During this same time period, the S&P 500® Materials Index returned 10.07%, the Dow Jones U.S. Basic Materials Index returned 2.48%, and the S&P 500® Index returned 16.89%. The S&P 500® Materials Index, Dow Jones U.S. Basic Materials Index and S&P 500® Index (the "Benchmark Indices") are unmanaged indices weighted by market capitalization based on the average performance of approximately 30, 149 and 500 securities, respectively. The adviser provided these additional comparative benchmarks to help investors better understand how the investment results of the Fund compare to the performance of other indices similar to the Index, as well as to that of broad-based market benchmarks.
The adviser selected the S&P 500® Materials Index and Dow Jones U.S. Basic Materials Index as comparative indices to the Fund because of their recognition in the marketplace and their shared exposure to the Basic Materials sector. These reasons make their performance relevant when comparing to the Fund's performance. The S&P 500® Index does not have the same specific basic materials sector relevance as the basic materials indices; however, its performance comparison is a useful measure for investors as a broad representation of the overall U.S. stock market.
The performance of the Fund differed from these comparative indices in part because the Fund tracks an Index that employs a modified equal weighting methodology, whereas the Benchmark Indices select and weight stocks based on market capitalization. More specifically, relative to the S&P 500® Materials Index and the Dow Jones U.S. Basic Materials Index, the Fund was underweight in the Metals & Mining industry during the fiscal year ended April 30, 2013. The majority of the Fund's outperformance relative to these indices during the period can be attributed to this industry allocation.
Relative to the S&P 500® Index, the Fund was overweight in the Materials sector during the fiscal year ended April 30, 2013. The majority of the Fund's underperformance relative to the S&P 500® Index during that period can be attributed to this sector allocation.
4
Manager's Analysis (Continued)
PowerShares Dynamic Basic Materials Sector Portfolio (ticker: PYZ)
For the fiscal year ended April 30, 2013, the Chemicals-Diversified sub-industry contributed most significantly to the Fund's return, followed by the Chemicals-Specialty and Paper & Related Products sub-industries, respectively. The Metal-Iron sub-industry detracted most from the Fund's return, followed by the Metal-Aluminum and Gold Mining sub-industries, respectively.
Positions that contributed most significantly to the Fund's return included Sherwin-Williams Co. (The), a coatings/paint company (portfolio average weight of 2.60%); and U.S. Silica Holdings Inc., a diversified minerals company (no longer held at April 30, 2013). Positions that detracted most significantly from the Fund's return included Cliffs Natural Resources Inc., a metal-iron company (no longer held at April 30, 2013); and Noranda Aluminum Holding Corp., a metal-aluminum company (no longer held at April 30, 2013).
Sub-industry Breakdown (% of the
Fund's Net Assets) as of April 30, 2013
Chemicals-Specialty | 24.0 | ||||||
Chemicals-Diversified | 20.5 | ||||||
Paper & Related Products | 10.9 | ||||||
Agricultural Chemicals | 6.2 | ||||||
Coatings/Paint | 5.7 | ||||||
Containers-Metal/Glass | 5.3 | ||||||
Metal-Copper | 4.6 | ||||||
Diversified Manufacturing Operations | 4.1 | ||||||
Containers-Paper/Plastic | 2.8 | ||||||
Industrial Gases | 2.5 | ||||||
Steel-Producers | 2.5 | ||||||
Building Products-Cement/Aggregates | 1.6 | ||||||
Metal Processors & Fabricators | 1.6 | ||||||
Consumer Products-Miscellaneous | 1.4 | ||||||
Metal-Aluminum | 1.4 | ||||||
Quarrying | 1.4 | ||||||
Energy-Alternate Sources | 1.2 | ||||||
Petrochemicals | 1.2 | ||||||
Building & Construction Products-Miscellaneous | 1.1 | ||||||
Money Market Fund | 0.1 | ||||||
Liabilities in excess of other assets | (0.1 | ) |
Top Ten Fund Holdings (% of the Fund's
Net Assets) as of April 30, 2013
Security | |||||||
Sherwin-Williams Co. (The) | 2.9 | ||||||
E.I. du Pont de Nemours & Co. | 2.9 | ||||||
Ecolab, Inc. | 2.8 | ||||||
PPG Industries, Inc. | 2.7 | ||||||
Ashland, Inc. | 2.7 | ||||||
International Paper Co. | 2.7 | ||||||
Monsanto Co. | 2.6 | ||||||
Celanese Corp., Series A | 2.6 | ||||||
FMC Corp. | 2.6 | ||||||
Sigma-Aldrich Corp. | 2.5 | ||||||
Total | 27.0 |
5
Manager's Analysis (Continued)
PowerShares Dynamic Basic Materials Sector Portfolio (ticker: PYZ)
Growth of a $10,000 Investment Since Inception†
Fund Performance History (%) As of April 30, 2013
3 Years | 3 Years | 5 Years | 5 Years | Fund Inception† | |||||||||||||||||||||||||||
1 Year | Avg. Ann.†† | Cumulative | Avg. Ann.†† | Cumulative | Avg. Ann.†† | Cumulative | |||||||||||||||||||||||||
Index | |||||||||||||||||||||||||||||||
Dynamic Basic Materials Sector IntellidexSM Index | 16.19 | % | 14.41 | % | 49.75 | % | 6.35 | % | 36.04 | % | 11.04 | % | 98.47 | % | |||||||||||||||||
S&P 500® Materials Index | 10.07 | % | 8.97 | % | 29.41 | % | 1.10 | % | 5.61 | % | 6.08 | % | 47.47 | % | |||||||||||||||||
Dow Jones U.S. Basic Materials Index | 2.48 | % | 5.46 | % | 17.29 | % | -0.35 | % | -1.75 | % | 6.56 | % | 51.91 | % | |||||||||||||||||
S&P 500® Index | 16.89 | % | 12.80 | % | 43.54 | % | 5.21 | % | 28.92 | % | 4.99 | % | 37.80 | % | |||||||||||||||||
Fund | |||||||||||||||||||||||||||||||
NAV Return | 15.37 | % | 13.51 | % | 46.27 | % | 5.36 | % | 29.83 | % | 10.02 | % | 86.92 | % | |||||||||||||||||
Market Price Return | 15.26 | % | 13.39 | % | 45.78 | % | 5.32 | % | 29.59 | % | 9.99 | % | 86.60 | % |
Fund Inception: October 12, 2006
Performance quoted above represents past performance. Past performance is not a guarantee of future results and current performance may be higher or lower than performance quoted. Investment returns and principal value will fluctuate, and shares of the Fund ("Fund Shares"), when redeemed or sold, may be worth more or less than their original cost. Had the adviser not waived fees and/or reimbursed expenses, performance would have been lower. The adviser has contractually agreed to waive fees and/or pay certain Fund expenses through August 31, 2014. According to the Fund's current prospectus, the total gross annual operating expense ratio was indicated as 0.76%. The Financial Highlights section of the Shareholders Report presents the expense ratios based on expenses incurred during the period covered by this report. NAV and Market Price returns assume that dividends and capital gain distributions have been reinvested in the Fund at NAV and Market 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.
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.
† Fund and Index returns are based on the inception date of the Fund. Returns for the Benchmark Indices are based on the closest month-end to the Fund's inception date.
†† Average annualized.
6
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Manager's Analysis
PowerShares Dynamic Consumer Discretionary Sector Portfolio (ticker: PEZ)
As an index fund, the PowerShares Dynamic Consumer Discretionary Sector Portfolio (the "Fund") is passively managed and attempts to track the returns of an underlying index. The Fund seeks investment results that generally correspond (before fees and expenses) to the price and yield of the Dynamic Consumer Discretionary Sector IntellidexSM Index (the "Index"). The Fund generally will invest at least 90% of its total assets in common stocks of consumer discretionary companies that comprise the Index. These companies are principally engaged in the businesses of providing consumer goods and services that are cyclical in nature, including retail, automotive, leisure and recreation, media and real estate goods and services.
The Index includes stocks from the 2,000 largest U.S. stocks (by market capitalization) traded on the NYSE, NYSE MKT and the NASDAQ. The index provider, NYSE Arca, Inc., ranks capital appreciation potential using a proprietary NYSE Arca Intellidex model. The Index includes 60 stocks that NYSE Arca, Inc. identifies as having significant operations in that sector, ranks them according to their model score, and separates them into two modified, equally weighted groups. The 16 top-ranked relatively larger stocks collectively receive 40% of the Index weighting (each stock receives on average a 2.5% weighting) and the 44 top-ranked relatively smaller stocks collectively receive 60% of the Index weighting (each stock receives on average a 1.36% weighting).
For the fiscal year ended April 30, 2013, on a market price basis, the Fund returned 15.60%. On a net asset value ("NAV") basis, the Fund returned 15.67%. During the same time period, the Index returned 16.50%. During the fiscal year, the Fund fully replicated the components of the Index; therefore, the Fund's performance differed from the Index primarily due to the fees and expenses that the Fund incurred during the period.
During this same time period, the S&P 500® Consumer Discretionary Index returned 21.83%, and the S&P 500® Index returned 16.89%. The S&P 500® Consumer Discretionary Index and S&P 500® Index (the "Benchmark Indices") are unmanaged indices weighted by market capitalization based on the average performance of approximately 82 and 500 securities, respectively. The adviser provided these additional comparative benchmarks to help investors better understand how the investment results of the Fund compare to the performance of another index similar to the Index, as well as to that of a broad-based market benchmark.
The adviser selected the S&P 500® Consumer Discretionary Index as a comparative index to the Fund because of its recognition in the marketplace and its shared exposure to the Consumer Discretionary sector. These reasons make its performance relevant when comparing to the Fund's performance. The S&P 500® Index does not have the same specific consumer discretionary sector relevance as the S&P 500® Consumer Discretionary Index; however, its performance comparison is a useful measure for investors as a broad representation of the overall U.S. stock market.
The performance of the Fund differed from these comparative indices in part because the Fund tracks an Index that employs a modified equal weighting and stock selection methodology, whereas the Benchmark Indices select and weight stocks based on market capitalization. More specifically, relative to the S&P 500® Consumer Discretionary Index, the Fund was overweight in the Leisure Equipment & Products, Specialty Retail and Diversified Consumer Services industries and underweight in the Media industry during the fiscal year ended April 30, 2013. The majority of the Fund's underperformance relative to this index during the period can be attributed to these industry allocations.
Relative to the S&P 500® Index, the Fund was overweight in the Consumer Discretionary sector and had poor performance in stocks selected in that sector relative to the S&P 500® Index during the fiscal year
8
Manager's Analysis (Continued)
PowerShares Dynamic Consumer Discretionary Sector Portfolio (ticker: PEZ)
ended April 30, 2013. The majority of the Fund's underperformance relative to the S&P 500® Index during that period can be attributed to these sector allocations and specific stock performances.
For the fiscal year ended April 30, 2013, the Retail industry contributed most significantly to the Fund's return, followed by the Media and Entertainment industries, respectively. The Commercial Services industry detracted most from the Fund's return, followed by the Leisure Time and Lodging industries, respectively.
Positions that contributed most significantly to the Fund's return included Starz-Liberty Capital, a media company (portfolio average weight of 0.92%); and Comcast Corp., Class A, a media company (portfolio average weight of 2.43%). Positions that detracted most significantly from the Fund's return included ITT Educational Services Inc., a commercial services company (no longer held at April 30, 2013); and Career Education Corp., a commercial services company (no longer held at April 30, 2013).
Industry Breakdown (% of the Fund's
Net Assets) as of April 30, 2013
Media | 24.8 | ||||||
Retail | 23.7 | ||||||
Entertainment | 7.4 | ||||||
Internet | 6.4 | ||||||
Commercial Services | 5.2 | ||||||
Auto Manufacturers | 5.1 | ||||||
Auto Parts & Equipment | 4.8 | ||||||
Apparel | 3.1 | ||||||
Home Builders | 3.0 | ||||||
Toys/Games/Hobbies | 2.6 | ||||||
Telecommunications | 2.5 | ||||||
Home Furnishings | 2.4 | ||||||
Leisure Time | 2.4 | ||||||
Housewares | 1.4 | ||||||
Miscellaneous Manufacturing | 1.4 | ||||||
Advertising | 1.3 | ||||||
Lodging | 1.3 | ||||||
Textiles | 1.3 | ||||||
Money Market Fund | 0.3 | ||||||
Liabilities in excess of other assets | (0.4 | ) |
Top Ten Fund Holdings (% of the Fund's
Net Assets) as of April 30, 2013
Security | |||||||
Netflix, Inc. | 2.7 | ||||||
L Brands, Inc. | 2.7 | ||||||
General Motors Co. | 2.6 | ||||||
Time Warner, Inc. | 2.6 | ||||||
Mattel, Inc. | 2.6 | ||||||
Discovery Communications, Inc., Class A | 2.6 | ||||||
DISH Network Corp., Class A | 2.6 | ||||||
Liberty Global, Inc., Class A | 2.6 | ||||||
Ford Motor Co. | 2.5 | ||||||
Virgin Media, Inc. | 2.5 | ||||||
Total | 26.0 |
9
Manager's Analysis (Continued)
PowerShares Dynamic Consumer Discretionary Sector Portfolio (ticker: PEZ)
Growth of a $10,000 Investment Since Inception†
Fund Performance History (%) As of April 30, 2013
3 Years | 3 Years | 5 Years | 5 Years | Fund Inception† | |||||||||||||||||||||||||||
1 Year | Avg. Ann.†† | Cumulative | Avg. Ann.†† | Cumulative | Avg. Ann.†† | Cumulative | |||||||||||||||||||||||||
Index | |||||||||||||||||||||||||||||||
Dynamic Consumer Discretionary Sector IntellidexSM Index | 16.50 | % | 14.82 | % | 51.39 | % | 10.25 | % | 62.86 | % | 6.05 | % | 46.91 | % | |||||||||||||||||
S&P 500® Consumer Discretionary Index | 21.83 | % | 18.29 | % | 65.52 | % | 13.18 | % | 85.72 | % | 8.82 | % | 74.43 | % | |||||||||||||||||
S&P 500® Index | 16.89 | % | 12.80 | % | 43.54 | % | 5.21 | % | 28.92 | % | 4.99 | % | 37.80 | % | |||||||||||||||||
Fund | |||||||||||||||||||||||||||||||
NAV Return | 15.67 | % | 13.95 | % | 47.94 | % | 9.63 | % | 58.38 | % | 5.43 | % | 41.35 | % | |||||||||||||||||
Market Price Return | 15.60 | % | 13.88 | % | 47.69 | % | 9.60 | % | 58.17 | % | 5.42 | % | 41.28 | % |
Fund Inception: October 12, 2006
Performance quoted above represents past performance. Past performance is not a guarantee of future results and current performance may be higher or lower than performance quoted. Investment returns and principal value will fluctuate, and shares of the Fund ("Fund Shares"), when redeemed or sold, may be worth more or less than their original cost. Had the adviser not waived fees and/or reimbursed expenses, performance would have been lower. The adviser has contractually agreed to waive fees and/or pay certain Fund expenses through August 31, 2014. According to the Fund's current prospectus, the total gross annual operating expense ratio was indicated as 1.19%. The Financial Highlights section of the Shareholders Report presents the expense ratios based on expenses incurred during the period covered by this report. NAV and Market Price returns assume that dividends and capital gain distributions have been reinvested in the Fund at NAV and Market 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.
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.
† Fund and Index returns are based on the inception date of the Fund. Returns for the Benchmark Indices are based on the closest month-end to the Fund's inception date.
†† Average annualized.
10
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Manager's Analysis
PowerShares Dynamic Consumer Staples Sector Portfolio (ticker: PSL)
As an index fund, the PowerShares Dynamic Consumer Staples Sector Portfolio (the "Fund") is passively managed and attempts to track the returns of an underlying index. The Fund seeks investment results that generally correspond (before fees and expenses) to the price and yield of the Dynamic Consumer Staples Sector IntellidexSM Index (the "Index"). The Fund generally will invest at least 90% of its total assets in common stocks of consumer staples companies that comprise the Index. These companies are principally engaged in the businesses of providing consumer goods and services that have non-cyclical characteristics, including tobacco, textiles, food and beverage, and non-discretionary retail goods and services.
The Index includes stocks from the 2,000 largest U.S. stocks (by market capitalization) traded on the NYSE, NYSE MKT and the NASDAQ. The index provider, NYSE Arca, Inc., ranks capital appreciation potential using a proprietary NYSE Arca Intellidex model. The Index includes 60 stocks that NYSE Arca, Inc. identifies as having significant operations in that sector, ranks them according to their model score, and separates them into two modified, equally weighted groups. The 16 top-ranked relatively larger stocks collectively receive 40% of the Index weighting (each stock receives on average a 2.5% weighting) and the 44 top-ranked relatively smaller stocks collectively receive 60% of the Index weighting (each stock receives on average a 1.36% weighting).
For the fiscal year ended April 30, 2013, on a market price basis, the Fund returned 24.27%. On a net asset value ("NAV") basis, the Fund returned 24.29%. During the same time period, the Index returned 25.06%. During the fiscal year, the Fund fully replicated the components of the Index; therefore, the Fund's performance differed from the Index primarily due to the fees and expenses that the Fund incurred during the period.
During this same time period, the S&P 500® Consumer Staples Sector Index returned 23.60%, and the S&P 500® Index returned 16.89%. The S&P 500® Consumer Staples Sector Index and S&P 500® Index (the "Benchmark Indices") are unmanaged indices weighted by market capitalization based on the average performance of approximately 42 and 500 securities, respectively. The adviser provided these additional comparative benchmarks to help investors better understand how the investment results of the Fund compare to the performance of another index similar to the Index, as well as to that of a broad-based market benchmark.
The adviser selected the S&P 500® Consumer Staples Sector Index as a comparative index to the Fund because of its recognition in the marketplace and its shared exposure to the Consumer Staples sector. These reasons make its performance relevant when comparing to the Fund's performance. The S&P 500® Index does not have the same specific consumer staples sector relevance as the S&P 500® Consumer Staples Sector Index; however, its performance comparison is a useful measure for investors as a broad representation of the overall U.S. stock market.
The performance of the Fund differed from these comparative indices in part because the Fund tracks an Index that employs a modified equal weighting and stock selection methodology, whereas the indices select and weight stocks based on market capitalization. More specifically, relative to the S&P 500® Consumer Staples Sector Index, the Fund experienced strong stock selection in the Beverages industry and was underweight in the Tobacco industry during the fiscal year ended April 30, 2013. These factors account for the majority of the Fund's outperformance relative to this index during the period.
Relative to the S&P 500® Index, the Fund was overweight in the Consumer Staples sector during the fiscal year ended April 30, 2013. The majority of the Fund's outperformance relative to the S&P 500® Index during that period can be attributed to this sector allocation.
12
Manager's Analysis (Continued)
PowerShares Dynamic Consumer Staples Sector Portfolio (ticker: PSL)
For the fiscal year ended April 30, 2013, the Food industry contributed most significantly to the Fund's return, followed by the Retail and Beverages industries, respectively. The Commercial Services industry detracted most from the Fund's return industry, followed by the Environmental Control industry.
Positions that contributed most significantly to the Fund's return included Schiff Nutrition International Inc., a pharmaceuticals company (no longer held at April 30, 2013); and Constellation Brands, Inc., Class A, a beverages company (portfolio average weight of 1.17%). Positions that detracted most significantly from the Fund's return included Star Scientific Inc., a pharmaceuticals company (no longer held at April 30, 2013); and Herbalife Ltd., a pharmaceuticals company (no longer held at April 30, 2013).
Industry Breakdown (% of the Fund's
Net Assets) as of April 30, 2013
Food | 44.1 | ||||||
Retail | 13.9 | ||||||
Agriculture | 13.7 | ||||||
Beverages | 11.7 | ||||||
Household Products/Wares | 7.7 | ||||||
Cosmetics/Personal Care | 6.3 | ||||||
Electrical Components & Equipment | 1.3 | ||||||
Holding Companies-Diversified | 1.3 | ||||||
Money Market Fund | 0.2 | ||||||
Liabilities in excess of other assets | (0.2 | ) |
Top Ten Fund Holdings (% of the Fund's
Net Assets) as of April 30, 2013
Security | |||||||
Walgreen Co. | 2.7 | ||||||
Mondelez International, Inc., Class A | 2.7 | ||||||
CVS Caremark Corp. | 2.6 | ||||||
General Mills, Inc. | 2.5 | ||||||
Wal-Mart Stores, Inc. | 2.5 | ||||||
Coca-Cola Co. (The) | 2.5 | ||||||
Estee Lauder Cos., Inc. (The), Class A | 2.5 | ||||||
Kimberly-Clark Corp. | 2.5 | ||||||
PepsiCo, Inc. | 2.5 | ||||||
Kraft Foods Group, Inc. | 2.5 | ||||||
Total | 25.5 |
13
Manager's Analysis (Continued)
PowerShares Dynamic Consumer Staples Sector Portfolio (ticker: PSL)
Growth of a $10,000 Investment Since Inception†
Fund Performance History (%) As of April 30, 2013
3 Years | 3 Years | 5 Years | 5 Years | Fund Inception† | |||||||||||||||||||||||||||
1 Year | Avg. Ann.†† | Cumulative | Avg. Ann.†† | Cumulative | Avg. Ann.†† | Cumulative | |||||||||||||||||||||||||
Index | |||||||||||||||||||||||||||||||
Dynamic Consumer Staples Sector IntellidexSM Index | 25.06 | % | 16.93 | % | 59.86 | % | 10.91 | % | 67.80 | % | 9.71 | % | 83.46 | % | |||||||||||||||||
S&P 500® Consumer Staples Index | 23.60 | % | 17.71 | % | 63.08 | % | 11.12 | % | 69.44 | % | 10.71 | % | 95.44 | % | |||||||||||||||||
S&P 500® Index | 16.89 | % | 12.80 | % | 43.54 | % | 5.21 | % | 28.92 | % | 4.99 | % | 37.80 | % | |||||||||||||||||
Fund | |||||||||||||||||||||||||||||||
NAV Return | 24.29 | % | 16.15 | % | 56.70 | % | 10.12 | % | 61.94 | % | 8.95 | % | 75.32 | % | |||||||||||||||||
Market Price Return | 24.27 | % | 16.13 | % | 56.62 | % | 10.11 | % | 61.89 | % | 8.94 | % | 75.20 | % |
Fund Inception: October 12, 2006
Performance quoted above represents past performance. Past performance is not a guarantee of future results and current performance may be higher or lower than performance quoted. Investment returns and principal value will fluctuate, and shares of the Fund ("Fund Shares"), when redeemed or sold, may be worth more or less than their original cost. Had the adviser not waived fees and/or reimbursed expenses, performance would have been lower. The adviser has contractually agreed to waive fees and/or pay certain Fund expenses through August 31, 2014. According to the Fund's current prospectus, the total gross annual operating expense ratio was indicated as 0.89%. The Financial Highlights section of the Shareholders Report presents the expense ratios based on expenses incurred during the period covered by this report. NAV and Market Price returns assume that dividends and capital gain distributions have been reinvested in the Fund at NAV and Market 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.
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.
† Fund and Index returns are based on the inception date of the Fund. Returns for the Benchmark Indices are based on the closest month-end to the Fund's inception date.
†† Average annualized.
14
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Manager's Analysis
PowerShares Dynamic Energy Sector Portfolio (ticker: PXI)
As an index fund, the PowerShares Dynamic Energy Sector Portfolio (the "Fund") is passively managed and attempts to track the returns of an underlying index. The Fund seeks investment results that generally correspond (before fees and expenses) to the price and yield of the Dynamic Energy Sector IntellidexSM Index (the "Index"). The Fund generally will invest at least 90% of its total assets in common stocks of energy companies that comprise the Index. These companies are principally engaged in the business of producing, distributing or servicing energy-related products, including oil and gas exploration and production, refining, oil services, pipeline, and solar, wind and other non-oil based energy.
The Index includes stocks from the 2,000 largest U.S. stocks (by market capitalization) traded on the NYSE, NYSE MKT and the NASDAQ. The index provider, NYSE Arca, Inc., ranks capital appreciation potential using a proprietary NYSE Arca Intellidex model. The Index includes 60 stocks that NYSE Arca, Inc. identifies as having significant operations in that sector, ranks them according to their model score, and separates them into two modified, equally weighted groups. The 16 top-ranked relatively larger stocks collectively receive 40% of the Index weighting (each stock receives on average a 2.5% weighting) and the 44 top-ranked relatively smaller stocks collectively receive 60% of the Index weighting (each stock receives on average a 1.36% weighting).
For the fiscal year ended April 30, 2013, on a market price basis, the Fund returned 21.35%. On a net asset value ("NAV") basis, the Fund returned 21.51%. During the same time period, the Index returned 22.51%. During the fiscal year, the Fund fully replicated the components of the Index; therefore, the Fund's performance differed from the Index primarily due to the fees and expenses that the Fund incurred during the period.
During this same time period, the S&P 500® Energy Index returned 11.07%, the Dow Jones U.S. Oil & Gas Index returned 11.19%, and the S&P 500® Index returned 16.89%. The S&P 500® Energy Index, Dow Jones U.S. Oil & Gas Index and S&P 500® Index (the "Benchmark Indices") are unmanaged indices weighted by market capitalization based on the average performance of approximately 43, 211 and 500 securities, respectively. The adviser provided these additional comparative benchmarks to help investors better understand how the investment results of the Fund compare to the performance of other indices similar to the Index, as well as to that of a broad-based market benchmark.
The adviser selected the S&P 500® Energy Index and Dow Jones U.S. Oil & Gas Index as comparative indices to the Fund because of their recognition in the marketplace and their shared exposure to the Energy sector. These reasons make their performance relevant when comparing to the Fund's performance. The S&P 500® Index does not have the same specific energy sector relevance as the S&P 500® Energy Index and Dow Jones U.S. Oil & Gas Index; however, its performance comparison is a useful measure for investors as a broad representation of the overall U.S. stock market.
The performance of the Fund differed from these comparative indices in part because the Fund tracks an Index that employs a modified equal weighting and stock selection methodology, whereas the Benchmark indices select and weight stocks based on market capitalization. More specifically, relative to the S&P 500® Energy Index and the Dow Jones U.S. Oil & Gas Index, the Fund was underweight in the Oil Gas & Consumable Fuels industry during the fiscal year ended April 30, 2013. The majority of the Fund's outperformance relative to these indices during the period can be attributed to this industry allocation.
Relative to the S&P 500® Index, the Fund was overweight in the Energy sector and benefited from the positive performance of specific stocks included in the Index from that sector during the fiscal year ended April 30, 2013. The majority of the Fund's outperformance relative to the S&P 500® Index during that period can be attributed to this sector allocation.
16
Manager's Analysis (Continued)
PowerShares Dynamic Energy Sector Portfolio (ticker: PXI)
For the fiscal year ended April 30, 2013, the Oil Refining & Marketing sub-industry contributed most significantly to the Fund's return, followed by the Oil Companies-Integrated and Oil-Field Services sub-industries, respectively. The Oil Field Machinery & Equipment sub-industry detracted most from the Fund's return, followed by the Retail-Petroleum Products and Transportation-Services sub-industries, respectively.
Positions that contributed most significantly to the Fund's return included Marathon Petroleum Corp., an oil refining & marketing company (portfolio average weight of 2.80%); and Valero Energy Corp., an oil refining & marketing company (portfolio average weight of 2.68%). Positions that detracted most significantly from the Fund's return included W&T Offshore, Inc., an oil companies-exploration & production company (portfolio average weight of 0.96%); and Apache Corp., an oil companies-exploration & production company (no longer held at April 30, 2013).
Sub-industry Breakdown (% of the
Fund's Net Assets) as of April 30, 2013
Oil Companies-Integrated | 19.0 | ||||||
Oil Refining & Marketing | 18.3 | ||||||
Oil-Field Services | 17.2 | ||||||
Oil Companies-Exploration & Production | 14.9 | ||||||
Pipelines | 13.2 | ||||||
Oil & Gas Drilling | 4.8 | ||||||
Coal | 3.3 | ||||||
Oil Field Machinery & Equipment | 2.4 | ||||||
Distribution/Wholesale | 1.5 | ||||||
Transportation-Services | 1.5 | ||||||
Gas-Transportation | 1.4 | ||||||
Retail-Petroleum Products | 1.4 | ||||||
Seismic Data Collection | 1.1 | ||||||
Money Market Fund | 0.1 | ||||||
Liabilities in excess of other assets | (0.1 | ) |
Top Ten Fund Holdings (% of the Fund's
Net Assets) as of April 30, 2013
Security | |||||||
Southwestern Energy Co. | 2.8 | ||||||
Hess Corp. | 2.7 | ||||||
Enterprise Products Partners LP | 2.7 | ||||||
Occidental Petroleum Corp. | 2.7 | ||||||
Plains All American Pipeline LP | 2.7 | ||||||
Chevron Corp. | 2.6 | ||||||
Halliburton Co. | 2.6 | ||||||
ConocoPhillips | 2.6 | ||||||
Murphy Oil Corp. | 2.5 | ||||||
Exxon Mobil Corp. | 2.5 | ||||||
Total | 26.4 |
17
Manager's Analysis (Continued)
PowerShares Dynamic Energy Sector Portfolio (ticker: PXI)
Growth of a $10,000 Investment Since Inception†
Fund Performance History (%) As of April 30, 2013
3 Years | 3 Years | 5 Years | 5 Years | Fund Inception† | |||||||||||||||||||||||||||
1 Year | Avg. Ann.†† | Cumulative | Avg. Ann.†† | Cumulative | Avg. Ann.†† | Cumulative | |||||||||||||||||||||||||
Index | |||||||||||||||||||||||||||||||
Dynamic Energy Sector IntellidexSM Index | 22.51 | % | 19.58 | % | 70.98 | % | 6.02 | % | 33.96 | % | 11.52 | % | 104.21 | % | |||||||||||||||||
S&P 500® Energy Index | 11.07 | % | 11.11 | % | 37.16 | % | 0.76 | % | 3.85 | % | 7.37 | % | 59.67 | % | |||||||||||||||||
Dow Jones U.S. Oil & Gas Index | 11.19 | % | 10.95 | % | 36.59 | % | 0.76 | % | 3.88 | % | 7.60 | % | 61.98 | % | |||||||||||||||||
S&P 500® Index | 16.89 | % | 12.80 | % | 43.54 | % | 5.21 | % | 28.92 | % | 4.99 | % | 37.80 | % | |||||||||||||||||
Fund | |||||||||||||||||||||||||||||||
NAV Return | 21.51 | % | 18.73 | % | 67.36 | % | 5.38 | % | 29.93 | % | 10.83 | % | 96.10 | % | |||||||||||||||||
Market Price Return | 21.35 | % | 18.69 | % | 67.21 | % | 5.38 | % | 29.97 | % | 10.83 | % | 96.09 | % |
Fund Inception: October 12, 2006
Performance quoted above represents past performance. Past performance is not a guarantee of future results and current performance may be higher or lower than performance quoted. Investment returns and principal value will fluctuate, and shares of the Fund ("Fund Shares"), when redeemed or sold, may be worth more or less than their original cost. Had the adviser not waived fees and/or reimbursed expenses, performance would have been lower. The adviser has contractually agreed to waive fees and/or pay certain Fund expenses through August 31, 2014. According to the Fund's current prospectus, the total gross annual operating expense ratio was indicated as 0.66%. The Financial Highlights section of the Shareholders Report presents the expense ratios based on expenses incurred during the period covered by this report. NAV and Market Price returns assume that dividends and capital gain distributions have been reinvested in the Fund at NAV and Market 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.
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.
† Fund and Index returns are based on the inception date of the Fund. Returns for the Benchmark Indices are based on the closest month-end to the Fund's inception date.
†† Average annualized.
18
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Manager's Analysis
PowerShares Dynamic Financial Sector Portfolio (ticker: PFI)
As an index fund, the PowerShares Dynamic Financial Sector Portfolio (the "Fund") is passively managed and attempts to track the returns of an underlying index. The Fund seeks investment results that generally correspond (before fees and expenses) to the price and yield of the Dynamic Financial Sector IntellidexSM Index (the "Index"). The Fund generally will invest at least 90% of its total assets in common stocks of financial services companies that comprise the Index. These companies are principally engaged in the business of providing services and products, including banking, investment services, insurance and real estate finance services.
The Index includes stocks first from the 2,000 largest U.S. stocks (by market capitalization) traded on the NYSE, NYSE MKT and the NASDAQ. The index provider, NYSE Arca, Inc., ranks capital appreciation potential using a proprietary NYSE Arca Intellidex model. The Index includes 60 stocks that NYSE Arca, Inc. identifies as having significant operations in that sector, ranks them according to their model score, and separates them into two modified, equally weighted groups. The 16 top-ranked relatively larger stocks collectively receive 40% of the Index weighting (each stock receives on average a 2.5% weighting) and the 44 top-ranked relatively smaller stocks collectively receive 60% of the Index weighting (each stock receives on average a 1.36% weighting).
For the fiscal year ended April 30, 2013, on a market price basis, the Fund returned 21.03%. On a net asset value ("NAV") basis, the Fund returned 21.07%. During the same time period, the Index returned 21.98%. During the fiscal year, the Fund fully replicated the components of the Index; therefore, the Fund's performance differed from the Index primarily due to the fees and expenses that the Fund incurred during the period.
During this same time period, the S&P 500® Financials Index returned 23.82%, the Dow Jones U.S. Financials Index returned 23.09%, and the S&P 500® Index returned 16.89%. The S&P 500® Financials Index, Dow Jones U.S. Financials Index and S&P 500® Index (the "Benchmark Indices") are unmanaged indices weighted by market capitalization based on the average performance of approximately 81, 788 and 500 securities, respectively. The adviser provided these additional comparative benchmarks to help investors better understand how the investment results of the Fund compare to the performance of other indices similar to the Index, as well as to that of a broad-based market benchmark.
The adviser selected the S&P 500® Financial Index and the Dow Jones U.S. Financials Index as comparative indices to the Fund because of their recognition in the marketplace and their shared exposure to the Financials sector. These reasons make their performance relevant when comparing to the Fund's performance. The S&P 500® Index does not have the same specific financials sector relevance as the S&P 500® Financial Sector Index and the Dow Jones U.S. Financials Index; however, its performance comparison is a useful measure for investors as a broad representation of the overall U.S. stock market.
The performance of the Fund differed from these comparative indices in part because the Fund tracks an Index that employs a modified equal weighting and stock selection methodology, whereas the Benchmark Indices select and weight stocks based on market capitalization. More specifically, relative to the S&P 500® Financials Index and the Dow Jones U.S. Financials Index, the Fund was overweight in the Commercial Banks industry and underweight in the Diversified Financial Services industry during the fiscal year ended April 30, 2013. The majority of the Fund's underperformance relative to these indices during the period can be attributed to these industry allocations.
Relative to the S&P 500® Index, the Fund was overweight in the Financials sector during the fiscal year ended April 30, 2013. The majority of the Fund's outperformance relative to the S&P 500® Index during that period can be attributed to this sector allocation.
20
Manager's Analysis (Continued)
PowerShares Dynamic Financial Sector Portfolio (ticker: PFI)
For the fiscal year ended April 30, 2013, the Property/Casualty Insurance sub-industry contributed most significantly to the Fund's return, followed by the Multi-line Insurance and Life/Health Insurance sub-industries, respectively. The Savings & Loans/Thrifts-Central U.S. sub-industry detracted most from the Fund's return, followed by the Finance-Auto Loans and Insurance Brokers sub-industries, respectively.
Positions that contributed most significantly to the Fund's return included Lincoln National Corp., a life/health insurance company (portfolio average weight of 2.44%); and Virtus Investment Partners, Inc., an investment management/advisor services company (portfolio average weight of 1.08%). Positions that detracted most significantly from the Fund's return included Prudential Financial Inc., a life/health insurance company (no longer held at April 30, 2013); and CNA Financial Corp., a multi-line insurance company (no longer held at April 30, 2013).
Sub-industry Breakdown (% of the
Fund's Net Assets) as of April 30, 2013
Property/Casualty Insurance | 16.0 | ||||||
Multi-line Insurance | 13.5 | ||||||
Commercial Banks-Western U.S. | 9.4 | ||||||
Investment Management/Advisor Services | 9.3 | ||||||
Reinsurance | 8.4 | ||||||
Life/Health Insurance | 8.2 | ||||||
Commercial Banks-Southern U.S. | 6.6 | ||||||
Finance-Investment Banker/Broker | 4.8 | ||||||
Diversified Banking Institutions | 4.6 | ||||||
Super-Regional Banks-U.S. | 3.9 | ||||||
Commercial Services-Finance | 3.0 | ||||||
Commercial Banks-Eastern U.S. | 2.7 | ||||||
Finance-Credit Card | 2.7 | ||||||
Private Equity | 1.6 | ||||||
Investment Companies | 1.4 | ||||||
Commercial Banks-Central U.S | 1.3 | ||||||
Commercial Services | 1.3 | ||||||
Finance-Other Services | 1.3 | ||||||
Money Market Fund | 0.4 | ||||||
Liabilities in excess of other assets | (0.4 | ) |
Top Ten Fund Holdings (% of the Fund's
Net Assets) as of April 30, 2013
Security | |||||||
Moody's Corp. | 3.0 | ||||||
Lincoln National Corp. | 2.7 | ||||||
Principal Financial Group, Inc. | 2.7 | ||||||
Discover Financial Services | 2.7 | ||||||
BlackRock, Inc. | 2.6 | ||||||
Regions Financial Corp. | 2.6 | ||||||
Cincinnati Financial Corp. | 2.6 | ||||||
Fifth Third Bancorp | 2.6 | ||||||
XL Group PLC | 2.6 | ||||||
Affiliated Managers Group, Inc. | 2.5 | ||||||
Total | 26.6 |
21
Manager's Analysis (Continued)
PowerShares Dynamic Financial Sector Portfolio (ticker: PFI)
Growth of a $10,000 Investment Since Inception†
Fund Performance History (%) As of April 30, 2013
3 Years | 3 Years | 5 Years | 5 Years | Fund Inception† | |||||||||||||||||||||||||||
1 Year | Avg. Ann.†† | Cumulative | Avg. Ann.†† | Cumulative | Avg. Ann.†† | Cumulative | |||||||||||||||||||||||||
Index | |||||||||||||||||||||||||||||||
Dynamic Financial Sector IntellidexSM Index | 21.98 | % | 11.49 | % | 38.58 | % | 3.12 | % | 16.59 | % | 1.29 | % | 8.77 | % | |||||||||||||||||
S&P 500® Financials Index | 23.82 | % | 6.79 | % | 21.80 | % | -4.75 | % | -21.60 | % | -6.87 | % | -37.41 | % | |||||||||||||||||
Dow Jones U.S. Financials Index | 23.09 | % | 8.17 | % | 26.58 | % | -2.14 | % | -10.24 | % | -4.64 | % | -26.84 | % | |||||||||||||||||
S&P 500® Index | 16.89 | % | 12.80 | % | 43.54 | % | 5.21 | % | 28.92 | % | 4.99 | % | 37.80 | % | |||||||||||||||||
Fund | |||||||||||||||||||||||||||||||
NAV Return | 21.07 | % | 10.69 | % | 35.62 | % | 2.26 | % | 11.82 | % | 0.49 | % | 3.22 | % | |||||||||||||||||
Market Price Return | 21.03 | % | 10.68 | % | 35.58 | % | 2.24 | % | 11.74 | % | 0.48 | % | 3.17 | % |
Fund Inception: October 12, 2006
Performance quoted above represents past performance. Past performance is not a guarantee of future results and current performance may be higher or lower than performance quoted. Investment returns and principal value will fluctuate, and shares of the Fund ("Fund Shares"), when redeemed or sold, may be worth more or less than their original cost. Had the adviser not waived fees and/or reimbursed expenses, performance would have been lower. The adviser has contractually agreed to waive fees and/or pay certain Fund expenses through August 31, 2014. According to the Fund's current prospectus, the total gross annual operating expense ratio was indicated as 1.24%, including estimated acquired fund fees and expenses of 0.03%. The Financial Highlights section of the Shareholders Report presents the expense ratios based on expenses incurred during the period covered by this report. NAV and Market Price returns assume that dividends and capital gain distributions have been reinvested in the Fund at NAV and Market 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.
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.
† Fund and Index returns are based on the inception date of the Fund. Returns for the Benchmark Indices are based on the closest month-end to the Fund's inception date.
†† Average annualized.
22
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Manager's Analysis
PowerShares Dynamic Healthcare Sector Portfolio (ticker: PTH)
As an index fund, the PowerShares Dynamic Healthcare Sector Portfolio (the "Fund") is passively managed and attempts to track the returns of an underlying index. The Fund seeks investment results that generally correspond (before fees and expenses) to the price and yield of the Dynamic Healthcare Sector IntellidexSM Index (the "Index"). The Fund generally will invest at least 90% of its total assets in common stocks of healthcare companies that comprise the Index. These companies are principally engaged in the business of providing healthcare-related products and services, including biotechnology, pharmaceuticals, medical technology and supplies, and facilities.
The Index includes stocks from the 2,000 largest U.S. stocks (by market capitalization) traded on the NYSE, NYSE MKT and the NASDAQ. The index provider, NYSE Arca, Inc., ranks capital appreciation potential using a proprietary NYSE Arca Intellidex model. The Index includes 60 stocks that NYSE Arca, Inc. identifies as having significant operations in that sector, ranks them according to their model score, and separates them into two modified, equally weighted groups. The 16 top-ranked relatively larger stocks collectively receive 40% of the Index weighting (each stock receives on average a 2.5% weighting) and the 44 top-ranked relatively smaller stocks collectively receive 60% of the Index weighting (each stock receives on average a 1.36% weighting).
For the fiscal year ended April 30, 2013, on a market price basis, the Fund returned 21.06%. On a net asset value ("NAV") basis, the Fund returned 21.31%. During the same time period, the Index returned 22.15%. During the fiscal year, the Fund fully replicated the components of the Index; therefore, the Fund's performance differed from the Index primarily due to the fees and expenses that the Fund incurred during the period.
During this same time period, the S&P 500® Health Care Index returned 29.09%, the Dow Jones U.S. Health Care Index returned 30.24%, and the S&P 500® Index returned 16.89%. The S&P 500® Health Care Index, Dow Jones U.S. Health Care Index and S&P 500® Index (the "Benchmark Indices") are unmanaged indices weighted by market capitalization based on the average performance of approximately 53, 467 and 500 securities, respectively. The adviser provided these additional comparative benchmarks to help investors better understand how the investment results of the Fund compare to the performance of other indices similar to the Index, as well as to that of a broad-based market benchmark.
The adviser selected the S&P 500® Health Care Index and Dow Jones U.S. Health Care Index as comparative indices to the Fund because of their recognition in the marketplace and their shared exposure to the Health Care sector. These reasons make their performance relevant when comparing to the Fund's performance. The S&P 500® Index does not have the same specific health care sector relevance as the S&P 500® Health Care Index and Dow Jones U.S. Health Care Index; however, its performance comparison is a useful measure for investors as a broad representation of the overall U.S. stock market.
The performance of the Fund differed from these comparative indices in part because the Fund tracks an Index that employs a modified equal weighting and stock selection methodology, whereas the Benchmark Indices select and weight stocks based on market capitalization. More specifically, relative to the S&P 500® Health Care Index and the Dow Jones U.S. Health Care Index, the Fund was overweight in the Health Care Equipment & Supplies and Health Care Providers & Services industries during the fiscal year ended April 30, 2013. The majority of the Fund's underperformance relative to these indices during the period can be attributed to these industry allocations.
Relative to the S&P 500® Index, the Fund was overweight in the Health Care sector during the fiscal year ended April 30, 2013. The majority of the Fund's outperformance relative to the S&P 500® Index during that period can be attributed to this sector allocation.
24
Manager's Analysis (Continued)
PowerShares Dynamic Healthcare Sector Portfolio (ticker: PTH)
For the fiscal year ended April 30, 2013, the Biotechnology industry contributed most significantly to the Fund's return, followed by the Pharmaceuticals and Healthcare-Services industries, respectively. The Internet industry detracted most from the Fund's return. HealthStream Inc., classified by Bloomberg as operating within the Internet Industry, was the largest detractor within the Internet industry with a contribution to return of (0.14)%.
Positions that contributed most significantly to the Fund's return included Biogen Idec, Inc., a biotechnology company (portfolio average weight of 2.36%); and Amgen, Inc., a biotechnology company (portfolio average weight of 2.38%). Positions that detracted most significantly from the Fund's return included Assisted Living Concepts Inc. Cl A, a healthcare-services company (no longer held at April 30, 2013); and Amedisys Inc., a healthcare-services company (no longer held at April 30, 2013).
Industry Breakdown (% of the Fund's
Net Assets) as of April 30, 2013
Healthcare-Products | 27.9 | ||||||
Healthcare-Services | 23.2 | ||||||
Pharmaceuticals | 20.8 | ||||||
Biotechnology | 16.3 | ||||||
Commercial Services | 5.5 | ||||||
Electronics | 3.8 | ||||||
Software | 1.3 | ||||||
Distribution/Wholesale | 1.2 | ||||||
Money Market Fund | 0.1 | ||||||
Liabilities in excess of other assets | (0.1 | ) |
Top Ten Fund Holdings (% of the Fund's
Net Assets) as of April 30, 2013
Security | |||||||
Regeneron Pharmaceuticals, Inc. | 3.1 | ||||||
Biogen Idec, Inc. | 3.1 | ||||||
Amgen, Inc. | 2.8 | ||||||
AbbVie, Inc. | 2.8 | ||||||
Cigna Corp. | 2.6 | ||||||
Thermo Fisher Scientific, Inc. | 2.6 | ||||||
Bristol-Myers Squibb Co. | 2.5 | ||||||
Becton, Dickinson and Co. | 2.5 | ||||||
Pfizer, Inc. | 2.5 | ||||||
Perrigo Co. | 2.5 | ||||||
Total | 27.0 |
25
Manager's Analysis (Continued)
PowerShares Dynamic Healthcare Sector Portfolio (ticker: PTH)
Growth of a $10,000 Investment Since Inception†
Fund Performance History (%) As of April 30, 2013
3 Years | 3 Years | 5 Years | 5 Years | Fund Inception† | |||||||||||||||||||||||||||
1 Year | Avg. Ann.†† | Cumulative | Avg. Ann.†† | Cumulative | Avg. Ann.†† | Cumulative | |||||||||||||||||||||||||
Index | |||||||||||||||||||||||||||||||
Dynamic Healthcare Sector IntellidexSM Index | 22.15 | % | 15.92 | % | 55.76 | % | 9.54 | % | 57.69 | % | 7.95 | % | 65.04 | % | |||||||||||||||||
S&P 500® Health Care Index | 29.09 | % | 17.90 | % | 63.88 | % | 10.88 | % | 67.62 | % | 7.77 | % | 63.62 | % | |||||||||||||||||
Dow Jones U.S. Health Care Index | 30.24 | % | 18.21 | % | 65.17 | % | 11.67 | % | 73.62 | % | 8.67 | % | 72.86 | % | |||||||||||||||||
S&P 500® Index | 16.89 | % | 12.80 | % | 43.54 | % | 5.21 | % | 28.92 | % | 4.99 | % | 37.80 | % | |||||||||||||||||
Fund | |||||||||||||||||||||||||||||||
NAV Return | 21.31 | % | 15.11 | % | 52.54 | % | 8.73 | % | 51.99 | % | 7.15 | % | 57.22 | % | |||||||||||||||||
Market Price Return | 21.06 | % | 15.06 | % | 52.32 | % | 8.70 | % | 51.78 | % | 7.13 | % | 56.94 | % |
Fund Inception: October 12, 2006
Performance quoted above represents past performance. Past performance is not a guarantee of future results and current performance may be higher or lower than performance quoted. Investment returns and principal value will fluctuate, and shares of the Fund ("Fund Shares"), when redeemed or sold, may be worth more or less than their original cost. Had the adviser not waived fees and/or reimbursed expenses, performance would have been lower. The adviser has contractually agreed to waive fees and/or pay certain Fund expenses through August 31, 2014. According to the Fund's current prospectus, the total gross annual operating expense ratio was indicated as 0.82%. The Financial Highlights section of the Shareholders Report presents the expense ratios based on expenses incurred during the period covered by this report. NAV and Market Price returns assume that dividends and capital gain distributions have been reinvested in the Fund at NAV and Market 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.
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.
† Fund and Index returns are based on the inception date of the Fund. Returns for the Benchmark Indices are based on the closest month-end to the Fund's inception date.
†† Average annualized.
26
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Manager's Analysis
PowerShares Dynamic Industrials Sector Portfolio (ticker: PRN)
As an index fund, the PowerShares Dynamic Industrials Sector Portfolio (the "Fund") is passively managed and attempts to track the returns of an underlying index. The Fund seeks investment results that generally correspond (before fees and expenses) to the price and yield of the Dynamic Industrials Sector IntellidexSM Index (the "Index"). The Fund generally will invest at least 90% of its total assets in common stocks of industrial companies that comprise the Index. These companies are principally engaged in the business of providing industrial products and services, including engineering, heavy machinery, construction, electrical equipment, aerospace and defense and general manufacturing products and services.
The Index includes stocks from the 2,000 largest U.S. stocks (by market capitalization) traded on the NYSE, NYSE MKT and the NASDAQ. The index provider, NYSE Arca, Inc., ranks capital appreciation potential using a proprietary NYSE Arca Intellidex model. The Index includes 60 stocks that NYSE Arca, Inc. identifies as having significant operations in that sector, ranks them according to their model score, and separates them into two modified, equally weighted groups. The 16 top-ranked relatively larger stocks collectively receive 40% of the Index weighting (each stock receives on average a 2.5% weighting) and the 44 top-ranked relatively smaller stocks collectively receive 60% of the Index weighting (each stock receives on average a 1.36% weighting).
For the fiscal year ended April 30, 2013, on a market price basis, the Fund returned 25.19%. On a net asset value ("NAV") basis, the Fund returned 25.18%. During the same time period, the Index returned 26.60%. During the fiscal year, the Fund fully replicated the components of the Index; therefore, the Fund's performance differed from the Index primarily due to the fees and expenses that the Fund incurred during the period.
During this same time period, the S&P 500® Industrials Index returned 15.04%, the Dow Jones U.S. Industrials Index returned 17.02%, and the S&P 500® Index returned 16.89%. The S&P 500® Industrials Index, Dow Jones U.S. Industrials Index and S&P 500® Index (the "Benchmark Indices") are unmanaged indices weighted by market capitalization based on the average performance of approximately 60, 626 and 500 securities, respectively. The adviser provided these additional comparative benchmarks to help investors better understand how the investment results of the Fund compare to the performance of other indices similar to the Index, as well as to that of broad-based market benchmarks.
The adviser selected the S&P 500® Industrials Index and Dow Jones U.S. Industrials Index as comparative indices to the Fund because of their recognition in the marketplace and their shared exposure to the Industrials sector. These reasons make their performance relevant when comparing to the Fund's performance. The S&P 500® Index does not have the same specific industrials sector relevance as the S&P 500® Industrials Index and Dow Jones U.S. Industrials Index; however, its performance comparison is a useful measure for investors as a broad representation of the overall U.S. stock market.
The performance of the Fund differed from these comparative indices in part because the Fund tracks an Index that employs a modified equal weighting and stock selection methodology, whereas the Benchmark Indices select and weight stocks based on market capitalization. More specifically, relative to the S&P 500® Industrials Index and the Dow Jones U.S. Industrials Index, the Fund was overweight in the Airlines and Building Products industries and underweight in the Air Freight & Logistics industry during the fiscal year ended April 30, 2013. The majority of the Fund's outperformance relative to these indices during the period can be attributed to these industry allocations.
Relative to the S&P 500® Index, the Fund was overweight in the Industrials sector and benefited from the positive performance of specific stocks included in the Index from that sector during the fiscal year ended
28
Manager's Analysis (Continued)
PowerShares Dynamic Industrials Sector Portfolio (ticker: PRN)
April 30, 2013. The majority of the Fund's outperformance relative to the S&P 500® Index during that period can be attributed to these specific stock performances.
For the fiscal year ended April 30, 2013, the Airlines industry contributed most significantly to the Fund's return, followed by the Commercial Services and Aerospace/Defense industries, respectively. The Metal Fabricate/Hardware industry detracted most from the Fund's return, followed by the Holding Companies-Diversified and Environmental Control industries, respectively.
Positions that contributed most significantly to the Fund's return included Southwest Airlines Co., an airlines company (portfolio average weight of 2.56%); and Delta Air Lines, Inc., an airlines company (portfolio average weight of 2.66%). Positions that detracted most significantly from the Fund's return included Timken Co., a metal fabricate/hardware company (no longer held at April 30, 2013); and Arkansas Best Corp., a transportation company (no longer held at April 30, 2013).
Industry Breakdown (% of the Fund's
Net Assets) as of April 30, 2013
Aerospace/Defense | 17.1 | ||||||
Airlines | 14.5 | ||||||
Commercial Services | 14.5 | ||||||
Building Materials | 9.0 | ||||||
Miscellaneous Manufacturing | 7.2 | ||||||
Transportation | 5.6 | ||||||
Machinery-Diversified | 4.8 | ||||||
Electronics | 3.6 | ||||||
Electrical Components & Equipment | 2.7 | ||||||
Engineering & Construction | 2.5 | ||||||
Media | 2.5 | ||||||
Shipbuilding | 1.5 | ||||||
Hand/Machine Tools | 1.4 | ||||||
Telecommunications | 1.4 | ||||||
Textiles | 1.4 | ||||||
Trucking & Leasing | 1.4 | ||||||
Auto Manufacturers | 1.3 | ||||||
Electric | 1.3 | ||||||
Food | 1.3 | ||||||
Household Products/Wares | 1.3 | ||||||
Housewares | 1.3 | ||||||
Distribution/Wholesale | 1.2 | ||||||
Office Furnishings | 1.2 | ||||||
Money Market Fund | 0.2 | ||||||
Liabilities in excess of other assets | (0.2 | ) |
Top Ten Fund Holdings (% of the Fund's
Net Assets) as of April 30, 2013
Security | |||||||
Delta Air Lines, Inc. | 2.9 | ||||||
United Continental Holdings, Inc. | 2.9 | ||||||
Boeing Co. (The) | 2.8 | ||||||
Southwest Airlines Co. | 2.8 | ||||||
Northrop Grumman Corp. | 2.7 | ||||||
Equifax, Inc. | 2.6 | ||||||
Raytheon Co. | 2.6 | ||||||
Nielsen Holdings NV | 2.5 | ||||||
Rockwell Collins, Inc. | 2.5 | ||||||
L-3 Communications Holdings, Inc. | 2.5 | ||||||
Total | 26.8 |
29
Manager's Analysis (Continued)
PowerShares Dynamic Industrials Sector Portfolio (ticker: PRN)
Growth of a $10,000 Investment Since Inception†
Fund Performance History (%) As of April 30, 2013
3 Years | 3 Years | 5 Years | 5 Years | Fund Inception† | |||||||||||||||||||||||||||
1 Year | Avg. Ann.†† | Cumulative | Avg. Ann.†† | Cumulative | Avg. Ann.†† | Cumulative | |||||||||||||||||||||||||
Index | |||||||||||||||||||||||||||||||
Dynamic Industrials Sector IntellidexSM Index | 26.60 | % | 16.01 | % | 56.13 | % | 6.20 | % | 35.09 | % | 7.65 | % | 62.04 | % | |||||||||||||||||
S&P 500® Industrials Index | 15.04 | % | 10.66 | % | 35.50 | % | 3.55 | % | 19.03 | % | 4.96 | % | 37.56 | % | |||||||||||||||||
Dow Jones U.S. Industrials Index | 17.02 | % | 12.38 | % | 41.92 | % | 5.14 | % | 28.47 | % | 6.51 | % | 51.46 | % | |||||||||||||||||
S&P 500® Index | 16.89 | % | 12.80 | % | 43.54 | % | 5.21 | % | 28.92 | % | 4.99 | % | 37.80 | % | |||||||||||||||||
Fund | |||||||||||||||||||||||||||||||
NAV Return | 25.18 | % | 14.80 | % | 51.29 | % | 5.15 | % | 28.52 | % | 6.67 | % | 52.61 | % | |||||||||||||||||
Market Price Return | 25.19 | % | 14.79 | % | 51.27 | % | 5.13 | % | 28.45 | % | 6.67 | % | 52.59 | % |
Fund Inception: October 12, 2006
Performance quoted above represents past performance. Past performance is not a guarantee of future results and current performance may be higher or lower than performance quoted. Investment returns and principal value will fluctuate, and shares of the Fund ("Fund Shares"), when redeemed or sold, may be worth more or less than their original cost. Had the adviser not waived fees and/or reimbursed expenses, performance would have been lower. The adviser has contractually agreed to waive fees and/or pay certain Fund expenses through August 31, 2014. According to the Fund's current prospectus, the total gross annual operating expense ratio was indicated as 0.80%. The Financial Highlights section of the Shareholders Report presents the expense ratios based on expenses incurred during the period covered by this report. NAV and Market Price returns assume that dividends and capital gain distributions have been reinvested in the Fund at NAV and Market 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.
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.
† Fund and Index returns are based on the inception date of the Fund. Returns for the Benchmark Indices are based on the closest month-end to the Fund's inception date.
†† Average annualized.
30
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Manager's Analysis
PowerShares Dynamic Technology Sector Portfolio (ticker: PTF)
As an index fund, the PowerShares Dynamic Technology Sector Portfolio (the "Fund") is passively managed and attempts to track the returns of an underlying index. The Fund seeks investment results that generally correspond (before fees and expenses) to the price and yield of the Dynamic Technology Sector IntellidexSM Index (the "Index"). The Fund generally will invest at least 90% of its total assets in common stocks of technology companies that comprise the Index. These companies are principally engaged in the business of providing technology-related products and services, including computer hardware and software, Internet, electronics and semiconductors, and communication technologies.
The Index includes stocks from the 2,000 largest U.S. stocks (by market capitalization) traded on the NYSE, NYSE MKT and the NASDAQ. The index provider, NYSE Arca, Inc., ranks capital appreciation potential using a proprietary NYSE Arca Intellidex model. The Index includes 60 stocks that NYSE Arca, Inc. identifies as having significant operations in that sector, ranks them according to their model score, and separates them into two modified, equally weighted groups. The 16 top-ranked relatively larger stocks collectively receive 40% of the Index weighting (each stock receives on average a 2.5% weighting) and the 44 top-ranked relatively smaller stocks collectively receive 60% of the Index weighting (each stock receives on average a 1.36% weighting).
For the fiscal year ended April 30, 2013, on a market price basis, the Fund returned 7.34%. On a net asset value ("NAV") basis, the Fund returned 7.59%. During the same time period, the Index returned 8.43%. During the fiscal year, the Fund fully replicated the components of the Index; therefore, the Fund's performance differed from the Index primarily due to the fees and expenses that the Fund incurred over the period.
During this same time period, the S&P 500® Information Technology Index returned 1.68%, the Dow Jones U.S. Technology Index returned (1.61)%, and the S&P 500® Index returned 16.89%. The S&P 500® Information Technology Index, Dow Jones U.S. Technology Index and S&P 500® Index (the "Benchmark Indices") are unmanaged indices weighted by market capitalization based on the average performance of approximately 70, 470 and 500 securities, respectively. The adviser provided these additional comparative benchmarks to help investors better understand how the investment results of the Fund compare to the performance of other indices similar to the Index, as well as to that of a broad-based market benchmark.
The adviser selected the S&P 500® Information Technology Index and Dow Jones U.S. Technology Index as comparative indices to the Fund because of their recognition in the marketplace and their shared exposure to the Technology sector. These reasons make their performance relevant when comparing to the Fund's performance. The S&P 500® Index does not have the same specific technology sector relevance as the S&P 500® Information Technology Index and Dow Jones U.S. Technology Index; however, its performance comparison is a useful measure for investors as a broad representation of the overall U.S. stock market.
The performance of the Fund differed from these comparative indices in part because the Fund tracks an Index that employs a modified equal weighting and proprietary stock selection methodology, whereas the Benchmark Indices select and weight stocks based on market capitalization. More specifically, relative to the S&P 500® Information Technology Index and the Dow Jones U.S. Technology Index, the Fund was overweight in the Computers and IT Services industries during the fiscal year ended April 30, 2013. The majority of the Fund's outperformance relative to these indices during the period can be attributed to these industry allocations.
Relative to the S&P 500® Index, the Fund was overweight in the Information Technology sector during the fiscal year ended April 30, 2013. The majority of the Fund's underperformance relative to the S&P 500® Index during that period can be attributed to this sector allocation.
32
Manager's Analysis (Continued)
PowerShares Dynamic Technology Sector Portfolio (ticker: PTF)
For the fiscal year ended April 30, 2013, the Computers industry contributed most significantly to the Fund's return, followed by the Commercial Services and Internet industries, respectively. The Electronics industry detracted most from the Fund's return, followed by the Distribution/Wholesale and Home Furnishings industries, respectively.
Positions that contributed most significantly to the Fund's return included First Solar, Inc., a semiconductors company (portfolio average weight of 0.95%); and Western Digital Corp., a computers company (portfolio average weight of 2.61%). Positions that detracted most significantly from the Fund's return included Intel Corp., a semiconductors company (no longer held at April 30, 2013); and Dell Inc., a computers company (no longer held at April 30, 2013).
Industry Breakdown (% of the Fund's
Net Assets) as of April 30, 2013
Computers | 26.3 | ||||||
Software | 15.7 | ||||||
Commercial Services | 13.9 | ||||||
Telecommunications | 11.3 | ||||||
Internet | 11.1 | ||||||
Electronics | 9.3 | ||||||
Semiconductors | 5.5 | ||||||
Machinery-Diversified | 2.7 | ||||||
Diversified Financial Services | 1.8 | ||||||
Distribution/Wholesale | 1.2 | ||||||
Electrical Components & Equipment | 1.2 | ||||||
Money Market Fund | 0.3 | ||||||
Liabilities in excess of other assets | (0.3 | ) |
Top Ten Fund Holdings (% of the Fund's
Net Assets) as of April 30, 2013
Security | |||||||
Western Digital Corp. | 2.9 | ||||||
Seagate Technology PLC | 2.8 | ||||||
Fiserv, Inc. | 2.8 | ||||||
Alliance Data Systems Corp. | 2.7 | ||||||
Accenture PLC, Class A | 2.6 | ||||||
Amphenol Corp., Class A | 2.6 | ||||||
Symantec Corp. | 2.6 | ||||||
MasterCard, Inc., Class A | 2.6 | ||||||
NetApp, Inc. | 2.5 | ||||||
Verisign, Inc. | 2.4 | ||||||
Total | 26.5 |
33
Manager's Analysis (Continued)
PowerShares Dynamic Technology Sector Portfolio (ticker: PTF)
Growth of a $10,000 Investment Since Inception†
Fund Performance History (%) As of April 30, 2013
3 Years | 3 Years | 5 Years | 5 Years | Fund Inception† | |||||||||||||||||||||||||||
1 Year | Avg. Ann.†† | Cumulative | Avg. Ann.†† | Cumulative | Avg. Ann.†† | Cumulative | |||||||||||||||||||||||||
Index | |||||||||||||||||||||||||||||||
Dynamic Technology Sector IntellidexSM Index | 8.43 | % | 8.38 | % | 27.29 | % | 4.17 | % | 22.63 | % | 2.89 | % | 20.50 | % | |||||||||||||||||
S&P 500® Information Technology Index | 1.68 | % | 9.65 | % | 31.84 | % | 6.76 | % | 38.68 | % | 6.91 | % | 55.21 | % | |||||||||||||||||
Dow Jones U.S. Technology Index | -1.61 | % | 8.28 | % | 26.96 | % | 6.53 | % | 37.17 | % | 6.62 | % | 52.48 | % | |||||||||||||||||
S&P 500® Index | 16.89 | % | 12.80 | % | 43.54 | % | 5.21 | % | 28.92 | % | 4.99 | % | 37.80 | % | |||||||||||||||||
Fund | |||||||||||||||||||||||||||||||
NAV Return | 7.59 | % | 7.57 | % | 24.47 | % | 3.42 | % | 18.31 | % | 2.16 | % | 15.02 | % | |||||||||||||||||
Market Price Return | 7.34 | % | 7.49 | % | 24.19 | % | 3.38 | % | 18.08 | % | 2.12 | % | 14.71 | % |
Fund Inception: October 12, 2006
Performance quoted above represents past performance. Past performance is not a guarantee of future results and current performance may be higher or lower than performance quoted. Investment returns and principal value will fluctuate, and shares of the Fund ("Fund Shares"), when redeemed or sold, may be worth more or less than their original cost. Had the adviser not waived fees and/or reimbursed expenses, performance would have been lower. The adviser has contractually agreed to waive fees and/or pay certain Fund expenses through August 31, 2014. According to the Fund's current prospectus, the total gross annual operating expense ratio was indicated as 0.94%. The Financial Highlights section of the Shareholders Report presents the expense ratios based on expenses incurred during the period covered by this report. NAV and Market Price returns assume that dividends and capital gain distributions have been reinvested in the Fund at NAV and Market 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.
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.
† Fund and Index returns are based on the inception date of the Fund. Returns for the Benchmark Indices are based on the closest month-end to the Fund's inception date.
†† Average annualized.
34
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Manager's Analysis
PowerShares Dynamic Utilities Portfolio (ticker: PUI)
As an index fund, the PowerShares Dynamic Utilities Portfolio (the "Fund") is passively managed and attempts to track the returns of an underlying index. The Fund seeks investment results that generally correspond (before fees and expenses) to the price and yield of the Dynamic Utilities IntellidexSM Index (the "Index"). The Fund generally will invest at least 90% of its total assets in common stocks of utilities companies that comprise the Index. These companies may include companies that generate and supply electricity, including electricity wholesalers; distribute natural gas to customers; provide water to customers, as well as deal with associated wastewater; and provide land line or wireless telephone services.
The Index includes stocks from the 2,000 largest U.S. stocks (by market capitalization) traded on the NYSE, NYSE MKT and the NASDAQ. The index provider, NYSE Arca, Inc., ranks capital appreciation potential using a proprietary NYSE Arca Intellidex model. The Index includes 60 stocks that NYSE Arca, Inc. identifies as having significant operations in that sector, ranks them according to their model score, and separates them into two modified, equally weighted groups. The 16 top-ranked relatively larger stocks collectively receive 40% of the Index weighting (each stock receives on average a 2.5% weighting) and the 44 top-ranked relatively smaller stocks collectively receive 60% of the Index weighting (each stock receives on average a 1.36% weighting).
For the fiscal year ended April 30, 2013, on a market price basis, the Fund returned 21.94%. On a net asset value ("NAV") basis, the Fund returned 21.90%. During the same time period, the Index returned 22.71%. During the fiscal year, the Fund fully replicated the components of the Index; therefore, the Fund's performance differed from the Index primarily due to the Fund's expense ratio.
During this same time period, the S&P 500® Utilities Index returned 21.08%, the Dow Jones U.S. Utilities Index returned 19.00%, and the S&P 500® Index returned 16.89%. The S&P 500® Utilities Index, Dow Jones U.S. Utilities Index and S&P 500® Index (the "Benchmark Indices") are unmanaged indices weighted by market capitalization based on the average performance of approximately 31, 85 and 500 securities, respectively. The adviser provided these additional comparative benchmarks to help investors better understand how the investment results of the Fund compare to the performance of other indices similar to the Index, as well as to that of broad-based market benchmarks.
The adviser selected the S&P 500® Utilities Index and Dow Jones U.S. Utilities Index as comparative indices to the Fund because of their recognition in the marketplace and their shared exposure to the Utilities and Telecommunications sectors. These reasons make their performance relevant when comparing to the Fund's performance. The S&P 500® Index does not have the same specific utilities and telecommunications sectors relevance as the S&P 500® Utilities Index and Dow Jones U.S. Utilities Index; however, its performance comparison is a useful measure for investors as a broad representation of the overall U.S. stock market.
The performance of the Fund differed from these comparative indices in part because the Fund tracks an Index that employs a modified equal weighting and stock selection methodology, whereas the Benchmark Indices select and weight stocks based on market capitalization. More specifically, relative to the S&P 500® Utilities Index and the Dow Jones U.S. Utilities Index, the Fund was overweight in the Wireless Telecommunication Services industry and underweight in the Electric Utilities industry during the fiscal year ended April 30, 2013. The majority of the Fund's outperformance relative to these indices during the period can be attributed to these industry allocations.
36
Manager's Analysis (Continued)
PowerShares Dynamic Utilities Portfolio (ticker: PUI)
Relative to the S&P 500® Index, the Fund was overweight in the Utilities and Telecommunications sectors during the fiscal year ended April 30, 2013. The majority of the Fund's outperformance relative to the S&P 500® Index during that period can be attributed to these sector allocations.
For the fiscal year ended April 30, 2013, the Electric-Integrated sub-industry contributed most significantly to the Fund's return, followed by the Cellular Telecommunications and Telephone-Integrated sub-industries, respectively. The Satellite Telecommunications sub-industry detracted most from the Fund's return, followed by the Electronic Components-Miscellaneous and Data Processing/Management sub-industries, respectively.
Positions that contributed most significantly to the Fund's return included Sprint Nextel Corp., a cellular telecommunications company (portfolio average weight of 2.32%); and Comcast Corp., Class A, a cable/satellite TV company (portfolio average weight of 2.38%). Positions that detracted most significantly from the Fund's return included Boingo Wireless Inc., an internet connectivity services company (no longer held at April 30, 2013); and NII Holdings, Inc., a cellular telecommunications company (portfolio average weight of 1.31%).
Sub-industry Breakdown (% of the
Fund's Net Assets) as of April 30, 2013
Electric-Integrated | 42.2 | ||||||
Telephone-Integrated | 12.4 | ||||||
Cellular Telecommunications | 9.4 | ||||||
Gas-Distribution | 8.2 | ||||||
Telecommunication Services | 6.7 | ||||||
Wireless Equipment | 6.0 | ||||||
Cable/Satellite TV | 4.9 | ||||||
Water | 4.0 | ||||||
Electric-Generation | 1.5 | ||||||
Internet Connectivity Services | 1.4 | ||||||
Telecommunication Equipment | 1.4 | ||||||
Data Processing/Management | 1.3 | ||||||
Satellite Telecommunications | 1.3 | ||||||
Money Market Fund | 0.2 | ||||||
Liabilities in excess of other assets | (0.9 | ) |
Top Ten Fund Holdings (% of the Fund's
Net Assets) as of April 30, 2013
Security | |||||||
Sprint Nextel Corp. | 2.8 | ||||||
Verizon Communications, Inc. | 2.7 | ||||||
FirstEnergy Corp. | 2.6 | ||||||
NextEra Energy, Inc. | 2.6 | ||||||
DISH Network Corp., Class A | 2.5 | ||||||
American Electric Power Co., Inc. | 2.5 | ||||||
Crown Castle International Corp. | 2.5 | ||||||
Dominion Resources, Inc. | 2.5 | ||||||
CenturyLink, Inc. | 2.5 | ||||||
PPL Corp. | 2.5 | ||||||
Total | 25.7 |
37
Manager's Analysis (Continued)
PowerShares Dynamic Utilities Portfolio (ticker: PUI)
Growth of a $10,000 Investment Since Inception†
Fund Performance History (%) As of April 30, 2013
3 Years | 3 Years | 5 Years | 5 Years | Fund Inception† | |||||||||||||||||||||||||||
1 Year | Avg. Ann.†† | Cumulative | Avg. Ann.†† | Cumulative | Avg. Ann.†† | Cumulative | |||||||||||||||||||||||||
Index | |||||||||||||||||||||||||||||||
Dynamic Utilities IntellidexSM Index | 22.71 | % | 14.16 | % | 48.77 | % | 5.11 | % | 28.28 | % | 7.41 | % | 71.00 | % | |||||||||||||||||
S&P 500® Utilities Index | 21.08 | % | 15.71 | % | 54.93 | % | 5.15 | % | 28.56 | % | 7.96 | % | 77.66 | % | |||||||||||||||||
Dow Jones U.S. Utilities Index | 19.00 | % | 16.29 | % | 57.26 | % | 5.45 | % | 30.37 | % | 8.13 | % | 79.71 | % | |||||||||||||||||
S&P 500® Index | 16.89 | % | 12.80 | % | 43.54 | % | 5.21 | % | 28.92 | % | 6.04 | % | 55.26 | % | |||||||||||||||||
Fund | |||||||||||||||||||||||||||||||
NAV Return | 21.90 | % | 13.10 | % | 44.66 | % | 4.23 | % | 23.04 | % | 6.58 | % | 61.35 | % | |||||||||||||||||
Market Price Return | 21.94 | % | 13.04 | % | 44.43 | % | 4.20 | % | 22.83 | % | 6.57 | % | 61.29 | % |
Fund Inception: October 26, 2005
Performance quoted above represents past performance. Past performance is not a guarantee of future results and current performance may be higher or lower than performance quoted. Investment returns and principal value will fluctuate, and shares of the Fund ("Fund Shares"), when redeemed or sold, may be worth more or less than their original cost. Had the adviser not waived fees and/or reimbursed expenses, performance would have been lower. The adviser has contractually agreed to waive fees and/or pay certain Fund expenses through August 31, 2014. According to the Fund's current prospectus, the total gross annual operating expense ratio was indicated as 0.77%. The Financial Highlights section of the Shareholders Report presents the expense ratios based on expenses incurred during the period covered by this report. NAV and Market Price returns assume that dividends and capital gain distributions have been reinvested in the Fund at NAV and Market 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.
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.
† Fund and Index returns are based on the inception date of the Fund. Returns for the Benchmark Indices are based on the closest month-end to the Fund's inception date.
†† Average annualized.
38
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Manager's Analysis
PowerShares NASDAQ Internet Portfolio (ticker: PNQI)
As an index fund, the PowerShares NASDAQ Internet Portfolio (the "Fund") is passively managed and attempts to track the returns of an underlying index. The Fund seeks investment results that generally correspond (before fees and expenses) to the price and yield of the NASDAQ Internet IndexSM (the "Index"). The Fund generally will invest at least 90% of its total assets in common stocks of Internet companies that comprise the Index. Companies in the Index include Internet software and services companies involved in Internet-related services, including Internet access providers, Internet search engines, web hosting, website design and e-commerce.
The Index seeks to track the performance of the largest and most liquid U.S.-listed companies that are involved in Internet-related business. This includes, but is not limited to, companies whose primary business, as the Index provider reasonably determines, includes Internet-related services such as Internet software, Internet access providers, Internet search engines, web hosting, website design, or Internet retail commerce. In order to be included in the Index, in addition to being engaged in Internet-related business, a company must: be listed on NASDAQ, the NYSE or the NYSE MKT; have a minimum market capitalization of $200 million; have a minimum three-month average daily trading volume of 100,000 shares; and have a minimum closing price of $3.00. A company must also not be in bankruptcy proceedings or have annual financial statements with an audit opinion that is currently withdrawn. Companies that meet these criteria are weighted in the Index according to a modified market capitalization methodology.
For the fiscal year ended April 30, 2013, on a market price basis, the Fund returned 12.23%. On a net asset value ("NAV") basis, the Fund returned 12.26%. During the same time period, the Index returned 12.56%. During the fiscal year, the Fund fully replicated the components of the Index, therefore, the Fund's performance differed from the Index primarily due to the fees and expenses the Fund incurred over the period.
During this same time period, the NASDAQ-100® Index returned 7.48%, and the S&P 500® Index returned 16.89%. The NASDAQ-100® Index and S&P 500® Index (the "Benchmark Indices") are unmanaged indices weighted by market capitalization based on the average performance of approximately 100 and 500 securities, respectively. The adviser provided these additional comparative benchmarks to help investors better understand how the investment results of the Fund compare to the performance of broad-based market benchmarks.
The adviser selected the NASDAQ-100® Index and the S&P 500® Index as comparative indices to the Fund to provide comparative benchmark performance measurements of the broader U.S. equity market. The NASDAQ-100® Index and the S&P 500® Index do not have the same specific industry relevance as the Index; however, their performance comparison is a useful measure for investors as a broad representation of the overall U.S. stock market.
The performance of the Fund differed from these comparative indices in part because the Fund tracks an Index that employs a modified market weighting methodology and proprietary stock selection methodology, whereas the Benchmark Indices select and weight stocks based on market capitalization. More specifically, relative to the NASDAQ-100® Index, the Fund outperformed due in large part to the Fund's specific exposure to Internet companies and positive stock selection within the Information Technology sector during the period.
Relative to the S&P 500® Index, the Fund was overweight in the Consumer Discretionary sector and underweight in the Financials sector and Heath Care sector during the fiscal year ended April 30, 2013. The majority of the Fund's underperformance relative to the S&P 500® Index during that period can be attributed to this sector allocation, as well as the performance of specific securities within the Consumer Discretionary sector.
40
Manager's Analysis (Continued)
PowerShares NASDAQ Internet Portfolio (ticker: PNQI)
For the fiscal year ended April 30, 2013, the E-Commerce/Products sub-industry contributed most significantly to the Fund's return, followed by the E-Commerce/Services and Web Portals/ISP sub-industries, respectively. The Internet Content-Entertainment sub-industry detracted most from the Fund's return, followed by the Communications Software and E-Marketing/Information sub-industries, respectively.
Positions that contributed most significantly to the Fund's return included Netflix, Inc., an e-commerce/services company (portfolio average weight of 2.90%); and Google, Inc., Class A, a web portals/ISP company (portfolio average weight of 8.21%). Positions that detracted most significantly from the Fund's return included Baidu, Inc. ADR, a web portals/ISP company (portfolio average weight of 7.07%); and Groupon, Inc., Class A, an e-commerce/services company (portfolio average weight of 1.97%).
Sub-industry Breakdown (% of the
Fund's Net Assets) as of April 30, 2013
E-Commerce/Services | 22.6 | ||||||
Web Portals/ISP | 22.5 | ||||||
E-Commerce/Products | 17.9 | ||||||
Internet Content-Entertainment | 9.7 | ||||||
Web Hosting/Design | 7.3 | ||||||
Internet Security | 4.1 | ||||||
Computer Software | 3.9 | ||||||
E-Marketing/Information | 1.9 | ||||||
Enterprise Software/Services | 1.9 | ||||||
Internet Content-Information/News | 1.4 | ||||||
Commercial Services | 1.2 | ||||||
Computer Services | 1.0 | ||||||
Internet Incubators | 1.0 | ||||||
Internet Connectivity Services | 0.9 | ||||||
Internet Application Software | 0.8 | ||||||
Printing-Commercial | 0.6 | ||||||
Applications Software | 0.3 | ||||||
Human Resources | 0.2 | ||||||
Internet Infrastructure Software | 0.2 | ||||||
Networking Products | 0.2 | ||||||
Telecommunication Services | 0.2 | ||||||
Communications Software | 0.1 | ||||||
E-Services/Consulting | 0.1 | ||||||
Retail-Pet Food & Supplies | 0.1 | ||||||
Money Market Fund | 3.6 | ||||||
Liabilities in excess of other assets | (3.7 | ) |
Top Ten Fund Holdings (% of the Fund's
Net Assets) as of April 30, 2013
Security | |||||||
Google, Inc., Class A | 7.9 | ||||||
Facebook, Inc., Class A | 7.8 | ||||||
priceline.com, Inc. | 7.8 | ||||||
Amazon.com, Inc. | 7.4 | ||||||
eBay, Inc. | 7.4 | ||||||
Yahoo!, Inc. | 4.5 | ||||||
Netflix, Inc. | 4.4 | ||||||
Equinix, Inc. | 3.9 | ||||||
Baidu, Inc. ADR | 3.6 | ||||||
Akamai Technologies, Inc. | 3.1 | ||||||
Total | 57.8 |
41
Manager's Analysis (Continued)
PowerShares NASDAQ Internet Portfolio (ticker: PNQI)
Growth of a $10,000 Investment Since Inception†
Fund Performance History (%) As of April 30, 2013
3 Years | 3 Years | Fund Inception† | |||||||||||||||||||||
1 Year | Avg. Ann.†† | Cumulative | Avg. Ann.†† | Cumulative | |||||||||||||||||||
Index | |||||||||||||||||||||||
NASDAQ Internet IndexSM | 12.56 | % | 18.68 | % | 67.14 | % | 14.94 | % | 97.31 | % | |||||||||||||
NASDAQ-100® Index | 7.48 | % | 14.21 | % | 48.96 | % | 8.36 | % | 48.40 | % | |||||||||||||
S&P 500® Index | 16.89 | % | 12.80 | % | 43.54 | % | 5.03 | % | 27.27 | % | |||||||||||||
Fund | |||||||||||||||||||||||
NAV Return | 12.26 | % | 18.11 | % | 64.75 | % | 14.35 | % | 92.48 | % | |||||||||||||
Market Price Return | 12.23 | % | 18.07 | % | 64.60 | % | 13.98 | % | 89.43 | % |
Fund Inception: June 12, 2008
Performance quoted above represents past performance. Past performance is not a guarantee of future results and current performance may be higher or lower than performance quoted. Investment returns and principal value will fluctuate, and shares of the Fund ("Fund Shares"), when redeemed or sold, may be worth more or less than their original cost. According to the Fund's current prospectus, the expense ratio of 0.60% is expressed as a unitary management fee to cover operating expenses and expenses incurred in connection with managing the portfolio. NAV and Market Price returns assume that dividends and capital gain distributions have been reinvested in the Fund at NAV and Market 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.
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.
† Fund and Index returns are based on the inception date of the Fund. Returns for the Benchmark Indices are based on the closest month-end to the Fund's inception date.
†† Average annualized.
42
Fees and Expenses
As a shareholder of a Fund of the PowerShares Exchange-Traded Fund Trust (excluding PowerShares NASDAQ Internet Portfolio), you incur advisory fees and other Fund expenses. As a shareholder of a Fund of the PowerShares NASDAQ Internet Portfolio, you incur a unitary management fee. In addition to the unitary management fee, a shareholder may pay distribution fees, if any, brokerage expenses, taxes, interest, litigation expenses, acquired fund fees and expenses, if any and extraordinary 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 ended April 30, 2013.
In pursuing its investment objectives, PowerShares Dynamic Financial Sector Portfolio (the "Portfolio") may invest a portion of its assets in investment companies. The Portfolio indirectly bears a pro rata share of the fees and expenses of the investment companies in which the Portfolio invests. The effect of such expenses are included in the Portfolio's total return.
Actual Expenses
The first line in the following table 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 table provides information about hypothetical account values and hypothetical expenses based on each Fund's actual expense ratio and an assumed annualized rate of return of 5% per year before expenses, which is not the Fund's 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 table are meant to highlight your ongoing costs only, and do not reflect any transactional costs, such as sales charges and brokerage commissions. 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, expenses shown in the table do not include the expenses of the underlying funds, which are borne indirectly by the Fund. If transaction costs and indirect expenses were included, your costs would have been higher.
Beginning Account Value November 1, 2012 | Ending Account Value April 30, 2013 | Annualized Expense Ratio Based on the Six-Month Period | Expenses Paid During the Six-Month Period (1) | ||||||||||||||||
PowerShares Dynamic Basic Materials Sector Portfolio (PYZ) Actual | $ | 1,000.00 | $ | 1,155.56 | 0.65 | % | $ | 3.47 | |||||||||||
Hypothetical (5% return before expenses) | $ | 1,000.00 | $ | 1,021.57 | 0.65 | % | $ | 3.26 | |||||||||||
PowerShares Dynamic Consumer Discretionary Sector Portfolio (PEZ) Actual | $ | 1,000.00 | $ | 1,167.49 | 0.66 | % | $ | 3.55 | |||||||||||
Hypothetical (5% return before expenses) | $ | 1,000.00 | $ | 1,021.52 | 0.66 | % | $ | 3.31 |
43
Fees and Expenses (Continued)
Beginning Account Value November 1, 2012 | Ending Account Value April 30, 2013 | Annualized Expense Ratio Based on the Six-Month Period | Expenses Paid During the Six-Month Period (1) | ||||||||||||||||
PowerShares Dynamic Consumer Staples Sector Portfolio (PSL) Actual | $ | 1,000.00 | $ | 1,204.55 | 0.65 | % | $ | 3.55 | |||||||||||
Hypothetical (5% return before expenses) | $ | 1,000.00 | $ | 1,021.57 | 0.65 | % | $ | 3.26 | |||||||||||
PowerShares Dynamic Energy Sector Portfolio (PXI) Actual | $ | 1,000.00 | $ | 1,174.91 | 0.67 | % | $ | 3.61 | |||||||||||
Hypothetical (5% return before expenses) | $ | 1,000.00 | $ | 1,021.47 | 0.67 | % | $ | 3.36 | |||||||||||
PowerShares Dynamic Financial Sector Portfolio (PFI) Actual | $ | 1,000.00 | $ | 1,156.44 | 0.66 | % | $ | 3.53 | |||||||||||
Hypothetical (5% return before expenses) | $ | 1,000.00 | $ | 1,021.52 | 0.66 | % | $ | 3.31 | |||||||||||
PowerShares Dynamic Healthcare Sector Portfolio (PTH) Actual | $ | 1,000.00 | $ | 1,192.96 | 0.65 | % | $ | 3.53 | |||||||||||
Hypothetical (5% return before expenses) | $ | 1,000.00 | $ | 1,021.57 | 0.65 | % | $ | 3.26 | |||||||||||
PowerShares Dynamic Industrials Sector Portfolio (PRN) Actual | $ | 1,000.00 | $ | 1,223.15 | 0.65 | % | $ | 3.58 | |||||||||||
Hypothetical (5% return before expenses) | $ | 1,000.00 | $ | 1,021.57 | 0.65 | % | $ | 3.26 | |||||||||||
PowerShares Dynamic Technology Sector Portfolio (PTF) Actual | $ | 1,000.00 | $ | 1,157.79 | 0.65 | % | $ | 3.48 | |||||||||||
Hypothetical (5% return before expenses) | $ | 1,000.00 | $ | 1,021.57 | 0.65 | % | $ | 3.26 | |||||||||||
PowerShares Dynamic Utilities Portfolio (PUI) Actual | $ | 1,000.00 | $ | 1,131.98 | 0.63 | % | $ | 3.33 | |||||||||||
Hypothetical (5% return before expenses) | $ | 1,000.00 | $ | 1,021.67 | 0.63 | % | $ | 3.16 | |||||||||||
PowerShares NASDAQ Internet Portfolio (PNQI) Actual | $ | 1,000.00 | $ | 1,162.44 | 0.60 | % | $ | 3.22 | |||||||||||
Hypothetical (5% return before expenses) | $ | 1,000.00 | $ | 1,021.82 | 0.60 | % | $ | 3.01 |
(1) Expenses are calculated using the annualized expense ratio, which represents the ongoing expenses as a percentage of net assets for the six-month period ended April 30, 2013. Expenses are calculated by multiplying the Fund's annualized expense ratio by the average account value for the period; then multiplying the result by 181/365. Expense ratios for the most recent half-year may differ from expenses ratios based on annualized data in the Financial Highlights.
44
Schedule of Investments
PowerShares Dynamic Basic Materials Sector Portfolio (PYZ)
April 30, 2013
Number of Shares | Value | ||||||||||
Common Stocks and Other Equity Interests—100.0% | |||||||||||
Agricultural Chemicals—6.2% | |||||||||||
9,845 | CF Industries Holdings, Inc. | $ | 1,836,191 | ||||||||
19,844 | Monsanto Co. | 2,119,736 | |||||||||
4,756 | Terra Nitrogen Co. LP | 1,017,546 | |||||||||
4,973,473 | |||||||||||
Building & Construction Products - Miscellaneous—1.1% | |||||||||||
50,855 | Louisiana-Pacific Corp.(a) | 921,493 | |||||||||
Building Products - Cement/Aggregates—1.6% | |||||||||||
117,373 | Headwaters, Inc.(a) | 1,274,671 | |||||||||
Chemicals - Diversified—20.5% | |||||||||||
19,447 | Axiall Corp. | 1,019,995 | |||||||||
41,725 | Celanese Corp., Series A | 2,061,632 | |||||||||
47,526 | Chemtura Corp.(a) | 1,010,403 | |||||||||
41,998 | E.I. du Pont de Nemours & Co. | 2,289,311 | |||||||||
33,793 | FMC Corp. | 2,051,235 | |||||||||
64,840 | Huntsman Corp. | 1,222,883 | |||||||||
27,440 | Innospec, Inc. | 1,207,634 | |||||||||
47,673 | Olin Corp. | 1,152,257 | |||||||||
14,994 | PPG Industries, Inc. | 2,206,217 | |||||||||
18,176 | Rockwood Holdings, Inc. | 1,179,441 | |||||||||
12,295 | Westlake Chemical Corp. | 1,022,206 | |||||||||
16,423,214 | |||||||||||
Chemicals - Specialty—24.0% | |||||||||||
16,648 | Albemarle Corp. | 1,019,690 | |||||||||
25,745 | Ashland, Inc. | 2,193,731 | |||||||||
27,674 | Eastman Chemical Co. | 1,844,472 | |||||||||
26,559 | Ecolab, Inc. | 2,247,423 | |||||||||
26,760 | H.B. Fuller Co. | 1,014,204 | |||||||||
14,935 | International Flavors & Fragrances, Inc. | 1,152,833 | |||||||||
26,628 | Minerals Technologies, Inc. | 1,081,896 | |||||||||
4,302 | NewMarket Corp. | 1,155,947 | |||||||||
18,597 | Quaker Chemical Corp. | 1,147,807 | |||||||||
28,866 | Rentech Nitrogen Partners LP | 1,052,166 | |||||||||
25,989 | Sigma-Aldrich Corp. | 2,045,074 | |||||||||
17,314 | Stepan Co. | 985,859 | |||||||||
54,849 | Tronox Ltd., Class A (Australia) | 1,126,599 | |||||||||
15,422 | W.R. Grace & Co.(a) | 1,189,190 | |||||||||
19,256,891 | |||||||||||
Coatings/Paint—5.7% | |||||||||||
62,735 | Kronos Worldwide, Inc. | 1,109,155 | |||||||||
35,928 | RPM International, Inc. | 1,164,067 | |||||||||
12,568 | Sherwin-Williams Co. (The) | 2,301,326 | |||||||||
4,574,548 | |||||||||||
Consumer Products - Miscellaneous—1.4% | |||||||||||
24,798 | Scotts Miracle-Gro Co. (The), Class A | 1,124,589 |
Number of Shares | Value | ||||||||||
Common Stocks and Other Equity Interests (Continued) | |||||||||||
Containers - Metal/Glass—5.3% | |||||||||||
44,744 | Ball Corp. | $ | 1,974,105 | ||||||||
27,913 | Crown Holdings, Inc.(a) | 1,191,327 | |||||||||
41,800 | Owens-Illinois, Inc.(a) | 1,098,504 | |||||||||
4,263,936 | |||||||||||
Containers - Paper/Plastic—2.8% | |||||||||||
29,083 | Bemis Co., Inc. | 1,144,416 | |||||||||
147,236 | Graphic Packaging Holding Co.(a) | 1,107,215 | |||||||||
2,251,631 | |||||||||||
Diversified Manufacturing Operations—4.1% | |||||||||||
26,064 | Koppers Holdings, Inc. | 1,144,470 | |||||||||
27,481 | LSB Industries, Inc.(a) | 897,530 | |||||||||
42,189 | Tredegar Corp. | 1,248,794 | |||||||||
3,290,794 | |||||||||||
Energy - Alternate Sources—1.2% | |||||||||||
80,640 | FutureFuel Corp. | 987,840 | |||||||||
Industrial Gases—2.5% | |||||||||||
23,045 | Air Products & Chemicals, Inc. | 2,003,993 | |||||||||
Metal Processors & Fabricators—1.6% | |||||||||||
38,774 | Worthington Industries, Inc. | 1,247,747 | |||||||||
Metal - Aluminum—1.4% | |||||||||||
17,533 | Kaiser Aluminum Corp. | 1,104,579 | |||||||||
Metal - Copper—4.6% | |||||||||||
61,139 | Freeport-McMoRan Copper & Gold, Inc. | 1,860,460 | |||||||||
53,986 | Southern Copper Corp. | 1,799,353 | |||||||||
3,659,813 | |||||||||||
Paper & Related Products—10.9% | |||||||||||
125,543 | Boise, Inc. | 1,003,089 | |||||||||
14,284 | Domtar Corp. | 992,881 | |||||||||
46,139 | International Paper Co. | 2,167,610 | |||||||||
41,495 | KapStone Paper and Packaging Corp. | 1,227,422 | |||||||||
37,498 | Neenah Paper, Inc. | 1,078,443 | |||||||||
77,575 | Resolute Forest Products(a) | 1,134,922 | |||||||||
28,935 | Schweitzer-Mauduit International, Inc. | 1,165,791 | |||||||||
8,770,158 | |||||||||||
Petrochemicals—1.2% | |||||||||||
72,972 | PetroLogistics LP | 1,003,365 | |||||||||
Quarrying—1.4% | |||||||||||
61,522 | Hi-Crush Partners LP | 1,148,616 | |||||||||
Steel - Producers—2.5% | |||||||||||
65,507 | Commercial Metals Co. | 957,712 | |||||||||
15,867 | Reliance Steel & Aluminum Co. | 1,032,466 | |||||||||
1,990,178 | |||||||||||
Total Common Stocks and Other Equity Interests (Cost $70,647,948) | 80,271,529 |
See Notes to Financial Statements.
45
Schedule of Investments (Continued)
PowerShares Dynamic Basic Materials Sector Portfolio (PYZ)
April 30, 2013
Number of Shares | Value | ||||||||||
Money Market Fund—0.1% | |||||||||||
47,278 | Goldman Sachs Financial Square Prime Obligations—Institutional Share Class (Cost $47,278) | $ | 47,278 | ||||||||
Total Investments (Cost $70,695,226)—100.1% | 80,318,807 | ||||||||||
Liabilities in excess of other assets—(0.1)% | (65,672 | ) | |||||||||
Net Assets—100.0% | $ | 80,253,135 |
Notes to Schedule of Investments:
(a) Non-income producing security.
See Notes to Financial Statements.
46
Schedule of Investments
PowerShares Dynamic Consumer Discretionary Sector Portfolio (PEZ)
April 30, 2013
Number of Shares | Value | ||||||||||
Common Stocks and Other Equity Interests—100.1% | |||||||||||
Advertising—1.3% | |||||||||||
6,840 | Lamar Advertising Co., Class A(a) | $ | 320,249 | ||||||||
Apparel—3.1% | |||||||||||
7,714 | Hanesbrands, Inc.(a) | 386,934 | |||||||||
12,483 | Iconix Brand Group, Inc.(a) | 357,638 | |||||||||
744,572 | |||||||||||
Auto Manufacturers—5.1% | |||||||||||
43,892 | Ford Motor Co. | 601,759 | |||||||||
20,207 | General Motors Co.(a) | 623,184 | |||||||||
1,224,943 | |||||||||||
Auto Parts & Equipment—4.8% | |||||||||||
11,765 | Cooper Tire & Rubber Co. | 292,831 | |||||||||
22,213 | Goodyear Tire & Rubber Co. (The)(a) | 277,551 | |||||||||
4,375 | Icahn Enterprises LP | 326,025 | |||||||||
13,796 | Superior Industries International, Inc. | 253,295 | |||||||||
1,149,702 | |||||||||||
Commercial Services—5.2% | |||||||||||
6,367 | Arbitron, Inc. | 297,275 | |||||||||
12,119 | H&R Block, Inc. | 336,181 | |||||||||
19,066 | Service Corp. International | 321,834 | |||||||||
11,080 | Valassis Communications, Inc. | 283,981 | |||||||||
1,239,271 | |||||||||||
Entertainment—7.4% | |||||||||||
14,419 | Lions Gate Entertainment Corp. (Canada)(a) | 357,736 | |||||||||
5,338 | Madison Square Garden Co. (The), Class A(a) | 321,721 | |||||||||
7,485 | Marriott Vacations Worldwide Corp.(a) | 340,418 | |||||||||
16,652 | Multimedia Games Holding Co., Inc.(a) | 410,638 | |||||||||
19,130 | Regal Entertainment Group, Class A | 343,192 | |||||||||
1,773,705 | |||||||||||
Home Builders—3.0% | |||||||||||
15,810 | PulteGroup, Inc.(a) | 331,852 | |||||||||
8,403 | Ryland Group, Inc. | 378,639 | |||||||||
710,491 | |||||||||||
Home Furnishings—2.4% | |||||||||||
5,001 | Whirlpool Corp. | 571,514 | |||||||||
Housewares—1.4% | |||||||||||
12,724 | Newell Rubbermaid, Inc. | 335,150 | |||||||||
Internet—6.4% | |||||||||||
25,682 | Liberty Interactive Corp., Class A(a) | 546,770 | |||||||||
3,043 | Netflix, Inc.(a) | 657,501 | |||||||||
7,172 | Shutterfly, Inc.(a) | 319,369 | |||||||||
1,523,640 | |||||||||||
Leisure Time—2.4% | |||||||||||
8,230 | Brunswick Corp. | 260,562 | |||||||||
8,856 | Royal Caribbean Cruises Ltd. | 323,509 | |||||||||
584,071 |
Number of Shares | Value | ||||||||||
Common Stocks and Other Equity Interests (Continued) | |||||||||||
Lodging—1.3% | |||||||||||
5,115 | Wyndham Worldwide Corp. | $ | 307,309 | ||||||||
Media—24.8% | |||||||||||
34,343 | Belo Corp., Class A | 368,157 | |||||||||
12,631 | CBS Corp., Class B | 578,247 | |||||||||
13,728 | Comcast Corp., Class A | 566,967 | |||||||||
7,775 | Discovery Communications, Inc., Class A(a) | 612,826 | |||||||||
15,610 | DISH Network Corp., Class A | 611,756 | |||||||||
26,299 | E.W. Scripps Co. (The), Class A(a) | 365,293 | |||||||||
15,042 | Gannett Co., Inc. | 303,247 | |||||||||
8,447 | Liberty Global, Inc., Class A(a) | 611,309 | |||||||||
27,287 | LIN TV Corp., Class A(a) | 335,903 | |||||||||
15,501 | Starz - Liberty Capital(a) | 362,413 | |||||||||
10,340 | Time Warner, Inc. | 618,125 | |||||||||
9,280 | Viacom, Inc., Class B | 593,827 | |||||||||
5,928,070 | |||||||||||
Miscellaneous Manufacturing—1.4% | |||||||||||
10,031 | Leggett & Platt, Inc. | 323,399 | |||||||||
Retail—23.7% | |||||||||||
9,530 | AFC Enterprises, Inc.(a) | 303,816 | |||||||||
17,881 | Brown Shoe Co., Inc. | 302,368 | |||||||||
54,128 | Denny's Corp.(a) | 306,906 | |||||||||
3,521 | Dillard's, Inc., Class A | 290,166 | |||||||||
4,012 | DineEquity, Inc. | 285,815 | |||||||||
14,844 | Fiesta Restaurant Group, Inc.(a) | 404,647 | |||||||||
5,571 | HSN, Inc. | 292,923 | |||||||||
23,272 | Krispy Kreme Doughnuts, Inc.(a) | 317,895 | |||||||||
12,597 | L Brands, Inc. | 635,015 | |||||||||
5,091 | Lumber Liquidators Holdings, Inc.(a) | 417,258 | |||||||||
24,353 | OfficeMax, Inc. | 280,303 | |||||||||
4,985 | Signet Jewelers Ltd. (United Kingdom) | 342,619 | |||||||||
26,652 | Sonic Corp.(a) | 333,950 | |||||||||
41,274 | Staples, Inc. | 546,468 | |||||||||
7,554 | Urban Outfitters, Inc.(a) | 313,038 | |||||||||
54,423 | Wendy's Co. (The) | 309,667 | |||||||||
5,682,854 | |||||||||||
Telecommunications—2.5% | |||||||||||
12,261 | Virgin Media, Inc. | 598,092 | |||||||||
Textiles—1.3% | |||||||||||
2,799 | Mohawk Industries, Inc.(a) | 310,353 | |||||||||
Toys/Games/Hobbies—2.6% | |||||||||||
13,516 | Mattel, Inc. | 617,141 | |||||||||
Total Common Stocks and Other Equity Interests (Cost $20,895,403) | 23,944,526 |
See Notes to Financial Statements.
47
Schedule of Investments (Continued)
PowerShares Dynamic Consumer Discretionary Sector Portfolio (PEZ)
April 30, 2013
Number of Shares | Value | ||||||||||
Money Market Fund—0.3% | |||||||||||
75,889 | Goldman Sachs Financial Square Prime Obligations—Institutional Share Class (Cost $75,889) | $ | 75,889 | ||||||||
Total Investments (Cost $20,971,292)—100.4% | 24,020,415 | ||||||||||
Liabilities in excess of other assets—(0.4)% | (87,325 | ) | |||||||||
Net Assets—100.0% | $ | 23,933,090 |
Notes to Schedule of Investments:
(a) Non-income producing security.
See Notes to Financial Statements.
48
Schedule of Investments
PowerShares Dynamic Consumer Staples Sector Portfolio (PSL)
April 30, 2013
Number of Shares | Value | ||||||||||
Common Stocks—100.0% | |||||||||||
Agriculture—13.7% | |||||||||||
24,490 | Altria Group, Inc. | $ | 894,130 | ||||||||
9,734 | Andersons, Inc. (The) | 530,697 | |||||||||
14,698 | Archer-Daniels-Midland Co. | 498,850 | |||||||||
6,429 | Bunge Ltd. | 464,238 | |||||||||
11,466 | Lorillard, Inc. | 491,777 | |||||||||
9,259 | Philip Morris International, Inc. | 885,068 | |||||||||
19,252 | Reynolds American, Inc. | 912,930 | |||||||||
8,349 | Universal Corp. | 480,485 | |||||||||
5,158,175 | |||||||||||
Beverages—11.7% | |||||||||||
7,352 | Coca-Cola Bottling Co. Consolidated | 452,148 | |||||||||
22,455 | Coca-Cola Co. (The) | 950,520 | |||||||||
13,124 | Coca-Cola Enterprises, Inc. | 480,732 | |||||||||
10,733 | Constellation Brands, Inc., Class A(a) | 529,673 | |||||||||
10,998 | Dr Pepper Snapple Group, Inc. | 537,032 | |||||||||
10,151 | Molson Coors Brewing Co., Class B | 523,792 | |||||||||
11,446 | PepsiCo, Inc. | 943,952 | |||||||||
4,417,849 | |||||||||||
Cosmetics/Personal Care—6.3% | |||||||||||
13,663 | Estee Lauder Cos., Inc. (The), Class A | 947,529 | |||||||||
19,969 | Inter Parfums, Inc. | 578,502 | |||||||||
11,235 | Procter & Gamble Co. (The) | 862,511 | |||||||||
2,388,542 | |||||||||||
Electrical Components & Equipment—1.3% | |||||||||||
5,156 | Energizer Holdings, Inc. | 498,018 | |||||||||
Food—44.1% | |||||||||||
11,739 | Cal-Maine Foods, Inc. | 501,021 | |||||||||
11,757 | Campbell Soup Co. | 545,642 | |||||||||
13,909 | ConAgra Foods, Inc. | 491,961 | |||||||||
29,762 | Dean Foods Co.(a) | 569,645 | |||||||||
40,603 | Dole Food Co., Inc.(a) | 436,888 | |||||||||
17,045 | Flowers Foods, Inc. | 561,462 | |||||||||
17,697 | Fresh Del Monte Produce, Inc. | 449,681 | |||||||||
18,940 | General Mills, Inc. | 954,955 | |||||||||
5,808 | Hershey Co. (The) | 517,841 | |||||||||
12,707 | Hormel Foods Corp. | 524,418 | |||||||||
24,072 | Ingles Markets, Inc., Class A | 513,215 | |||||||||
7,246 | Ingredion, Inc. | 521,785 | |||||||||
6,841 | J & J Snack Foods Corp. | 513,212 | |||||||||
5,074 | J.M. Smucker Co. (The) | 523,789 | |||||||||
14,414 | Kellogg Co. | 937,487 | |||||||||
18,225 | Kraft Foods Group, Inc. | 938,405 | |||||||||
16,388 | Kroger Co. (The) | 563,419 | |||||||||
6,410 | Lancaster Colony Corp. | 505,941 | |||||||||
7,122 | McCormick & Co., Inc. | 512,357 | |||||||||
32,312 | Mondelez International, Inc., Class A | 1,016,212 | |||||||||
53,372 | Pilgrim's Pride Corp.(a) | 522,512 | |||||||||
20,794 | Safeway, Inc. | 468,281 | |||||||||
9,089 | Sanderson Farms, Inc. | 556,792 |
Number of Shares | Value | ||||||||||
Common Stocks (Continued) | |||||||||||
20,490 | Smithfield Foods, Inc.(a) | $ | 524,544 | ||||||||
14,406 | Sysco Corp. | 502,193 | |||||||||
17,288 | Tootsie Roll Industries, Inc. | 539,904 | |||||||||
19,824 | Tyson Foods, Inc., Class A | 488,265 | |||||||||
8,621 | United Natural Foods, Inc.(a) | 430,533 | |||||||||
5,497 | Whole Foods Market, Inc. | 485,495 | |||||||||
16,617,855 | |||||||||||
Holding Companies - Diversified—1.3% | |||||||||||
55,118 | Harbinger Group, Inc.(a) | 498,267 | |||||||||
Household Products/Wares—7.7% | |||||||||||
7,678 | Church & Dwight Co., Inc. | 490,547 | |||||||||
5,670 | Clorox Co. (The) | 489,038 | |||||||||
9,153 | Kimberly-Clark Corp. | 944,498 | |||||||||
8,724 | Spectrum Brands Holdings, Inc. | 488,544 | |||||||||
8,679 | WD-40 Co. | 468,058 | |||||||||
2,880,685 | |||||||||||
Retail—13.9% | |||||||||||
8,551 | Costco Wholesale Corp. | 927,185 | |||||||||
16,845 | CVS Caremark Corp. | 980,042 | |||||||||
289,453 | Rite Aid Corp.(a) | 767,050 | |||||||||
10,751 | Susser Holdings Corp.(a) | 571,631 | |||||||||
20,688 | Walgreen Co. | 1,024,263 | |||||||||
12,287 | Wal-Mart Stores, Inc. | 954,946 | |||||||||
5,225,117 | |||||||||||
Total Common Stocks (Cost $29,510,133) | 37,684,508 | ||||||||||
Money Market Fund—0.2% | |||||||||||
89,320 | Goldman Sachs Financial Square Prime Obligations—Institutional Share Class (Cost $89,320) | 89,320 | |||||||||
Total Investments (Cost $29,599,453)—100.2% | 37,773,828 | ||||||||||
Liabilities in excess of other assets—(0.2)% | (65,912 | ) | |||||||||
Net Assets—100.0% | $ | 37,707,916 |
Notes to Schedule of Investments:
(a) Non-income producing security.
See Notes to Financial Statements.
49
Schedule of Investments
PowerShares Dynamic Energy Sector Portfolio (PXI)
April 30, 2013
Number of Shares | Value | ||||||||||
Common Stocks and Other Equity Interests—100.0% | |||||||||||
Coal—3.3% | |||||||||||
36,514 | Alliance Holdings GP LP | $ | 2,269,710 | ||||||||
116,122 | Cloud Peak Energy, Inc.(a) | 2,269,024 | |||||||||
4,538,734 | |||||||||||
Distribution/Wholesale—1.5% | |||||||||||
59,208 | Global Partners LP | 2,113,726 | |||||||||
Gas - Transportation—1.4% | |||||||||||
55,862 | Western Gas Equity Partners LP | 1,985,894 | |||||||||
Oil & Gas Drilling—4.8% | |||||||||||
28,809 | Helmerich & Payne, Inc. | 1,688,784 | |||||||||
115,554 | Nabors Industries Ltd. (Bermuda) | 1,709,044 | |||||||||
356,254 | Parker Drilling Co.(a) | 1,467,766 | |||||||||
81,036 | Patterson-UTI Energy, Inc. | 1,709,049 | |||||||||
6,574,643 | |||||||||||
Oil Companies - Exploration & Production—14.9% | |||||||||||
102,007 | Denbury Resources, Inc.(a) | 1,824,905 | |||||||||
73,354 | EPL Oil & Gas, Inc.(a) | 2,396,475 | |||||||||
31,178 | EQT Corp. | 2,342,092 | |||||||||
41,402 | Occidental Petroleum Corp. | 3,695,543 | |||||||||
103,796 | Southwestern Energy Co.(a) | 3,884,046 | |||||||||
89,148 | Stone Energy Corp.(a) | 1,758,890 | |||||||||
41,307 | Unit Corp.(a) | 1,736,133 | |||||||||
228,589 | VAALCO Energy, Inc.(a) | 1,536,118 | |||||||||
115,271 | W&T Offshore, Inc. | 1,346,365 | |||||||||
20,520,567 | |||||||||||
Oil Companies - Integrated—19.0% | |||||||||||
66,461 | Alon USA Partners LP | 1,648,233 | |||||||||
29,852 | Chevron Corp. | 3,642,243 | |||||||||
59,478 | ConocoPhillips | 3,595,445 | |||||||||
38,807 | Exxon Mobil Corp. | 3,453,435 | |||||||||
52,425 | Hess Corp. | 3,784,036 | |||||||||
99,729 | Marathon Oil Corp. | 3,258,146 | |||||||||
56,122 | Murphy Oil Corp. | 3,484,615 | |||||||||
53,995 | Phillips 66 | 3,290,995 | |||||||||
26,157,148 | |||||||||||
Oil Field Machinery & Equipment—2.4% | |||||||||||
50,831 | National Oilwell Varco, Inc. | 3,315,198 | |||||||||
Oil Refining & Marketing—18.3% | |||||||||||
94,739 | Alon USA Energy, Inc. | 1,572,668 | |||||||||
50,962 | Calumet Specialty Products Partners LP | 1,924,325 | |||||||||
34,094 | CVR Energy, Inc. | 1,679,811 | |||||||||
51,100 | Delek US Holdings, Inc. | 1,844,199 | |||||||||
62,371 | HollyFrontier Corp. | 3,084,246 | |||||||||
42,458 | Marathon Petroleum Corp. | 3,327,009 | |||||||||
66,135 | Northern Tier Energy LP | 1,744,641 | |||||||||
47,004 | PBF Energy, Inc., Class A | 1,431,272 | |||||||||
67,554 | Susser Petroleum Partners LP | 2,088,094 |
Number of Shares | Value | ||||||||||
Common Stocks and Other Equity Interests (Continued) | |||||||||||
34,581 | Tesoro Corp. | $ | 1,846,626 | ||||||||
75,138 | Valero Energy Corp. | 3,029,564 | |||||||||
53,809 | Western Refining, Inc. | 1,663,236 | |||||||||
25,235,691 | |||||||||||
Oil - Field Services—17.2% | |||||||||||
128,358 | Basic Energy Services, Inc.(a) | 1,762,355 | |||||||||
77,288 | C&J Energy Services, Inc.(a) | 1,529,530 | |||||||||
13,856 | Core Laboratories NV (Netherlands) | 2,006,072 | |||||||||
84,203 | Halliburton Co. | 3,601,362 | |||||||||
78,444 | Helix Energy Solutions Group, Inc.(a) | 1,807,350 | |||||||||
221,614 | Key Energy Services, Inc.(a) | 1,316,387 | |||||||||
216,531 | Newpark Resources, Inc.(a) | 2,273,575 | |||||||||
30,186 | Oceaneering International, Inc. | 2,118,152 | |||||||||
24,117 | Oil States International, Inc.(a) | 2,155,095 | |||||||||
218,283 | Pioneer Energy Services Corp.(a) | 1,538,895 | |||||||||
117,422 | RPC, Inc. | 1,554,667 | |||||||||
30,938 | Targa Resources Corp. | 2,034,483 | |||||||||
23,697,923 | |||||||||||
Pipelines—13.2% | |||||||||||
45,020 | El Paso Pipeline Partners LP | 1,928,657 | |||||||||
61,980 | Enterprise Products Partners LP | 3,759,087 | |||||||||
49,688 | EQT Midstream Partners LP | 2,300,554 | |||||||||
159,742 | Niska Gas Storage Partners LLC, Class U | 2,431,273 | |||||||||
64,116 | Plains All American Pipeline LP | 3,681,541 | |||||||||
40,449 | SemGroup Corp., Class A(a) | 2,097,281 | |||||||||
45,541 | Targa Resources Partners LP | 2,067,561 | |||||||||
18,265,954 | |||||||||||
Retail - Petroleum Products—1.4% | |||||||||||
47,789 | World Fuel Services Corp. | 1,937,844 | |||||||||
Seismic Data Collection—1.1% | |||||||||||
18,562 | Geospace Technologies Corp.(a) | 1,566,076 | |||||||||
Transportation - Services—1.5% | |||||||||||
32,040 | Bristow Group, Inc. | 2,024,928 | |||||||||
Total Common Stocks and Other Equity Interests (Cost $122,996,188) | 137,934,326 | ||||||||||
Money Market Fund—0.1% | |||||||||||
149,836 | Goldman Sachs Financial Square Prime Obligations—Institutional Share Class (Cost $149,836) | 149,836 | |||||||||
Total Investments (Cost $123,146,024)—100.1% | 138,084,162 | ||||||||||
Liabilities in excess of other assets—(0.1)% | (168,315 | ) | |||||||||
Net Assets—100.0% | $ | 137,915,847 |
Notes to Schedule of Investments:
(a) Non-income producing security.
See Notes to Financial Statements.
50
Schedule of Investments
PowerShares Dynamic Financial Sector Portfolio (PFI)
April 30, 2013
Number of Shares | Value | ||||||||||
Common Stocks and Other Equity Interests—100.0% | |||||||||||
Commercial Banks - Central U.S.—1.3% | |||||||||||
4,315 | Cullen/Frost Bankers, Inc. | $ | 260,669 | ||||||||
Commercial Banks - Eastern U.S.—2.7% | |||||||||||
30,086 | CapitalSource, Inc. | 269,270 | |||||||||
11,974 | Eagle Bancorp, Inc.(a) | 276,958 | |||||||||
546,228 | |||||||||||
Commercial Banks - Southern U.S.—6.6% | |||||||||||
16,447 | Cardinal Financial Corp. | 250,817 | |||||||||
7,622 | Home BancShares, Inc. | 302,746 | |||||||||
62,326 | Regions Financial Corp. | 529,148 | |||||||||
5,597 | SCBT Financial Corp. | 267,368 | |||||||||
1,350,079 | |||||||||||
Commercial Banks - Western U.S.—9.4% | |||||||||||
8,762 | Banner Corp. | 286,255 | |||||||||
20,865 | BBCN Bancorp, Inc. | 268,741 | |||||||||
10,664 | East West Bancorp, Inc. | 259,455 | |||||||||
14,758 | First Interstate BancSystem, Inc. | 299,883 | |||||||||
15,565 | Hanmi Financial Corp.(a) | 240,168 | |||||||||
11,958 | Sterling Financial Corp. | 260,684 | |||||||||
20,026 | Western Alliance Bancorp(a) | 294,582 | |||||||||
1,909,768 | |||||||||||
Commercial Services—1.3% | |||||||||||
12,561 | PHH Corp.(a) | 264,786 | |||||||||
Commercial Services - Finance—3.0% | |||||||||||
10,033 | Moody's Corp. | 610,508 | |||||||||
Diversified Banking Institutions—4.6% | |||||||||||
3,142 | Goldman Sachs Group, Inc. (The) | 458,952 | |||||||||
9,902 | JPMorgan Chase & Co. | 485,297 | |||||||||
944,249 | |||||||||||
Finance - Credit Card—2.7% | |||||||||||
12,453 | Discover Financial Services | 544,694 | |||||||||
Finance - Investment Banker/Broker—4.8% | |||||||||||
6,642 | Evercore Partners, Inc., Class A | 250,736 | |||||||||
5,879 | Raymond James Financial, Inc. | 243,508 | |||||||||
24,745 | TD Ameritrade Holding Corp. | 492,673 | |||||||||
986,917 | |||||||||||
Finance - Other Services—1.3% | |||||||||||
16,562 | Netspend Holdings, Inc.(a) | 264,329 | |||||||||
Investment Companies—1.4% | |||||||||||
31,447 | Apollo Investment Corp. | 277,048 | |||||||||
Investment Management/Advisor Services—9.3% | |||||||||||
3,309 | Affiliated Managers Group, Inc.(a) | 515,145 | |||||||||
2,011 | BlackRock, Inc. | 535,932 | |||||||||
10,230 | Ellington Financial LLC | 264,752 |
Number of Shares | Value | ||||||||||
Common Stocks and Other Equity Interests (Continued) | |||||||||||
1,611 | Virtus Investment Partners, Inc.(a) | $ | 307,701 | ||||||||
6,206 | Waddell & Reed Financial, Inc., Class A | 266,051 | |||||||||
1,889,581 | |||||||||||
Life/Health Insurance—8.2% | |||||||||||
24,013 | CNO Financial Group, Inc. | 271,827 | |||||||||
7,273 | FBL Financial Group, Inc., Class A | 285,902 | |||||||||
16,290 | Lincoln National Corp. | 554,023 | |||||||||
15,321 | Principal Financial Group, Inc. | 553,088 | |||||||||
1,664,840 | |||||||||||
Multi-line Insurance—13.5% | |||||||||||
10,362 | Allstate Corp. (The) | 510,432 | |||||||||
5,937 | American Financial Group, Inc. | 286,579 | |||||||||
3,213 | American National Insurance Co. | 302,118 | |||||||||
6,344 | Assurant, Inc. | 301,594 | |||||||||
10,761 | Cincinnati Financial Corp. | 526,320 | |||||||||
10,511 | United Fire Group, Inc. | 293,888 | |||||||||
16,704 | XL Group PLC (Ireland) | 520,163 | |||||||||
2,741,094 | |||||||||||
Private Equity—1.6% | |||||||||||
12,078 | Apollo Global Management LLC, Class A | 325,140 | |||||||||
Property/Casualty Insurance—16.0% | |||||||||||
7,895 | AmTrust Financial Services, Inc. | 249,956 | |||||||||
5,458 | Arch Capital Group Ltd.(a) | 289,602 | |||||||||
5,727 | Chubb Corp. (The) | 504,377 | |||||||||
12,218 | Employers Holdings, Inc. | 276,738 | |||||||||
10,211 | Fidelity National Financial, Inc., Class A | 274,165 | |||||||||
10,848 | First American Financial Corp. | 290,401 | |||||||||
6,629 | HCC Insurance Holdings, Inc. | 282,395 | |||||||||
4,641 | Navigators Group, Inc. (The)(a) | 268,621 | |||||||||
11,260 | Stewart Information Services Corp. | 304,808 | |||||||||
5,978 | Travelers Cos., Inc. (The) | 510,581 | |||||||||
3,251,644 | |||||||||||
Reinsurance—8.4% | |||||||||||
6,899 | Argo Group International Holdings Ltd. (Bermuda) | 285,964 | |||||||||
7,305 | Aspen Insurance Holdings Ltd. (Bermuda) | 278,978 | |||||||||
6,494 | Axis Capital Holdings Ltd. (Bermuda) | 289,827 | |||||||||
2,131 | Everest Re Group Ltd. | 287,664 | |||||||||
2,983 | PartnerRe Ltd. | 281,416 | |||||||||
7,481 | Validus Holdings Ltd. | 288,841 | |||||||||
1,712,690 | |||||||||||
Super - Regional Banks - U.S.—3.9% | |||||||||||
30,651 | Fifth Third Bancorp | 521,987 | |||||||||
37,843 | Huntington Bancshares, Inc. | 271,334 | |||||||||
793,321 | |||||||||||
Total Common Stocks and Other Equity Interests (Cost $17,577,772) | 20,337,585 |
See Notes to Financial Statements.
51
Schedule of Investments (Continued)
PowerShares Dynamic Financial Sector Portfolio (PFI)
April 30, 2013
Number of Shares | Value | ||||||||||
Money Market Fund—0.4% | |||||||||||
71,181 | Goldman Sachs Financial Square Prime Obligations—Institutional Share Class (Cost $71,181) | $ | 71,181 | ||||||||
Total Investments (Cost $17,648,953)—100.4% | 20,408,766 | ||||||||||
Liabilities in excess of other assets—(0.4)% | (78,788 | ) | |||||||||
Net Assets—100.0% | $ | 20,329,978 |
Notes to Schedule of Investments:
(a) Non-income producing security.
See Notes to Financial Statements.
52
Schedule of Investments
PowerShares Dynamic Healthcare Sector Portfolio (PTH)
April 30, 2013
Number of Shares | Value | ||||||||||
Common Stocks—100.0% | |||||||||||
Biotechnology—16.3% | |||||||||||
25,630 | Acorda Therapeutics, Inc.(a) | $ | 1,014,179 | ||||||||
16,183 | Amgen, Inc. | 1,686,431 | |||||||||
8,546 | Biogen Idec, Inc.(a) | 1,870,976 | |||||||||
48,717 | Emergent Biosolutions, Inc.(a) | 747,319 | |||||||||
30,621 | Myriad Genetics, Inc.(a) | 852,795 | |||||||||
109,378 | PDL BioPharma, Inc. | 846,586 | |||||||||
8,760 | Regeneron Pharmaceuticals, Inc.(a) | 1,884,626 | |||||||||
13,262 | United Therapeutics Corp.(a) | 885,636 | |||||||||
9,788,548 | |||||||||||
Commercial Services—5.5% | |||||||||||
61,164 | AMN Healthcare Services, Inc.(a) | 839,782 | |||||||||
9,789 | Chemed Corp. | 798,978 | |||||||||
16,022 | CorVel Corp.(a) | 760,565 | |||||||||
22,456 | PAREXEL International Corp.(a) | 919,573 | |||||||||
3,318,898 | |||||||||||
Distribution/Wholesale—1.2% | |||||||||||
6,162 | MWI Veterinary Supply, Inc.(a) | 725,329 | |||||||||
Electronics—3.8% | |||||||||||
3,605 | Mettler-Toledo International, Inc.(a) | 753,301 | |||||||||
19,261 | Thermo Fisher Scientific, Inc. | 1,553,977 | |||||||||
2,307,278 | |||||||||||
Healthcare - Products—27.9% | |||||||||||
17,665 | Abaxis, Inc. | 754,119 | |||||||||
15,983 | Becton, Dickinson and Co. | 1,507,197 | |||||||||
24,220 | Cantel Medical Corp. | 765,594 | |||||||||
23,498 | CareFusion Corp.(a) | 785,773 | |||||||||
7,442 | Cooper Cos., Inc. (The) | 821,597 | |||||||||
22,376 | Covidien PLC (Ireland) | 1,428,484 | |||||||||
16,416 | Cyberonics, Inc.(a) | 712,783 | |||||||||
25,167 | Hanger, Inc.(a) | 764,825 | |||||||||
23,420 | Hill-Rom Holdings, Inc. | 797,919 | |||||||||
8,306 | IDEXX Laboratories, Inc.(a) | 730,596 | |||||||||
19,145 | Integra LifeSciences Holdings Corp.(a) | 670,649 | |||||||||
31,418 | Medtronic, Inc. | 1,466,592 | |||||||||
36,217 | Meridian Bioscience, Inc. | 734,843 | |||||||||
42,934 | NuVasive, Inc.(a) | 900,326 | |||||||||
17,825 | ResMed, Inc. | 855,956 | |||||||||
10,828 | Sirona Dental Systems, Inc.(a) | 796,291 | |||||||||
12,617 | West Pharmaceutical Services, Inc. | 805,722 | |||||||||
18,951 | Zimmer Holdings, Inc. | 1,448,804 | |||||||||
16,748,070 | |||||||||||
Healthcare - Services—23.2% | |||||||||||
17,566 | Air Methods Corp. | 642,740 | |||||||||
24,045 | AmSurg Corp.(a) | 806,950 | |||||||||
27,254 | Brookdale Senior Living, Inc.(a) | 702,881 | |||||||||
34,444 | Capital Senior Living Corp.(a) | 835,611 | |||||||||
16,862 | Centene Corp.(a) | 779,024 | |||||||||
23,931 | Cigna Corp. | 1,583,514 |
Number of Shares | Value | ||||||||||
Common Stocks (Continued) | |||||||||||
18,345 | Community Health Systems, Inc. | $ | 835,982 | ||||||||
11,507 | Covance, Inc.(a) | 857,962 | |||||||||
16,875 | Coventry Health Care, Inc. | 836,156 | |||||||||
23,377 | Ensign Group, Inc. (The) | 815,156 | |||||||||
69,992 | Health Management Associates, Inc., Class A(a) | 804,208 | |||||||||
19,898 | Humana, Inc. | 1,474,641 | |||||||||
66,536 | Kindred Healthcare, Inc.(a) | 697,963 | |||||||||
15,168 | Magellan Health Services, Inc.(a) | 775,995 | |||||||||
23,320 | Molina Healthcare, Inc.(a) | 774,224 | |||||||||
83,607 | Select Medical Holdings Corp. | 689,758 | |||||||||
13,912,765 | |||||||||||
Pharmaceuticals—20.8% | |||||||||||
36,532 | AbbVie, Inc. | 1,682,299 | |||||||||
38,077 | Bristol-Myers Squibb Co. | 1,512,419 | |||||||||
25,889 | Eli Lilly & Co. | 1,433,733 | |||||||||
48,482 | Mylan, Inc.(a) | 1,411,311 | |||||||||
20,242 | Omnicare, Inc. | 885,992 | |||||||||
12,400 | Perrigo Co. | 1,480,684 | |||||||||
51,315 | Pfizer, Inc. | 1,491,727 | |||||||||
24,784 | Questcor Pharmaceuticals, Inc. | 761,860 | |||||||||
57,971 | Santarus, Inc.(a) | 1,064,927 | |||||||||
54,859 | Warner Chilcott PLC, Class A (Ireland) | 788,872 | |||||||||
12,513,824 | |||||||||||
Software—1.3% | |||||||||||
40,499 | MedAssets, Inc.(a) | 758,546 | |||||||||
Total Common Stocks (Cost $52,136,362) | 60,073,258 | ||||||||||
Money Market Fund—0.1% | |||||||||||
84,618 | Goldman Sachs Financial Square Prime Obligations—Institutional Share Class (Cost $84,618) | 84,618 | |||||||||
Total Investments (Cost $52,220,980)—100.1% | 60,157,876 | ||||||||||
Liabilities in excess of other assets—(0.1)% | (87,151 | ) | |||||||||
Net Assets—100.0% | $ | 60,070,725 |
Notes to Schedule of Investments:
(a) Non-income producing security.
See Notes to Financial Statements.
53
Schedule of Investments
PowerShares Dynamic Industrials Sector Portfolio (PRN)
April 30, 2013
Number of Shares | Value | ||||||||||
Common Stocks—100.0% | |||||||||||
Aerospace/Defense—17.1% | |||||||||||
27,283 | AAR Corp. | $ | 487,274 | ||||||||
7,538 | Alliant Techsystems, Inc. | 560,526 | |||||||||
11,823 | Boeing Co. (The) | 1,080,741 | |||||||||
11,789 | L-3 Communications Holdings, Inc. | 957,856 | |||||||||
6,529 | National Presto Industries, Inc. | 489,675 | |||||||||
13,740 | Northrop Grumman Corp. | 1,040,668 | |||||||||
16,640 | Raytheon Co. | 1,021,363 | |||||||||
15,408 | Rockwell Collins, Inc. | 969,471 | |||||||||
6,607,574 | |||||||||||
Airlines—14.5% | |||||||||||
9,726 | Alaska Air Group, Inc.(a) | 599,511 | |||||||||
65,907 | Delta Air Lines, Inc.(a) | 1,129,646 | |||||||||
51,150 | Republic Airways Holdings, Inc.(a) | 572,368 | |||||||||
35,649 | SkyWest, Inc. | 510,137 | |||||||||
78,137 | Southwest Airlines Co. | 1,070,477 | |||||||||
34,380 | United Continental Holdings, Inc.(a) | 1,110,474 | |||||||||
36,411 | US Airways Group, Inc.(a) | 615,346 | |||||||||
5,607,959 | |||||||||||
Auto Manufacturers—1.3% | |||||||||||
12,615 | Oshkosh Corp.(a) | 495,265 | |||||||||
Building Materials—9.0% | |||||||||||
19,693 | Apogee Enterprises, Inc. | 501,777 | |||||||||
14,477 | Fortune Brands Home & Security, Inc.(a) | 526,818 | |||||||||
27,283 | Gibraltar Industries, Inc.(a) | 510,192 | |||||||||
8,493 | Lennox International, Inc. | 526,566 | |||||||||
47,906 | Masco Corp. | 931,293 | |||||||||
6,837 | Nortek, Inc.(a) | 491,307 | |||||||||
3,487,953 | |||||||||||
Commercial Services—14.5% | |||||||||||
20,901 | Avis Budget Group, Inc.(a) | 602,785 | |||||||||
12,458 | Deluxe Corp. | 475,148 | |||||||||
16,739 | Equifax, Inc. | 1,024,427 | |||||||||
28,034 | Kelly Services, Inc., Class A | 477,139 | |||||||||
26,245 | Korn/Ferry International(a) | 434,355 | |||||||||
8,963 | Manpowergroup, Inc. | 476,473 | |||||||||
23,789 | Quad/Graphics, Inc. | 497,190 | |||||||||
50,316 | R.R. Donnelley & Sons Co. | 619,390 | |||||||||
39,059 | RPX Corp.(a) | 523,781 | |||||||||
18,133 | Viad Corp. | 472,364 | |||||||||
5,603,052 | |||||||||||
Distribution/Wholesale—1.2% | |||||||||||
13,945 | United Stationers, Inc. | 452,794 | |||||||||
Electric—1.3% | |||||||||||
29,516 | EnerNOC, Inc.(a) | 517,120 |
Number of Shares | Value | ||||||||||
Common Stocks (Continued) | |||||||||||
Electrical Components & Equipment—2.7% | |||||||||||
14,959 | Encore Wire Corp. | $ | 489,907 | ||||||||
12,008 | EnerSys(a) | 550,447 | |||||||||
1,040,354 | |||||||||||
Electronics—3.6% | |||||||||||
14,435 | Brady Corp., Class A | 489,058 | |||||||||
28,441 | Tyco International Ltd. (Switzerland) | 913,525 | |||||||||
1,402,583 | |||||||||||
Engineering & Construction—2.5% | |||||||||||
16,034 | AECOM Technology Corp.(a) | 466,108 | |||||||||
12,861 | EMCOR Group, Inc. | 481,002 | |||||||||
947,110 | |||||||||||
Food—1.3% | |||||||||||
178 | Seaboard Corp. | 488,784 | |||||||||
Hand/Machine Tools—1.4% | |||||||||||
6,269 | Snap-On, Inc. | 540,388 | |||||||||
Household Products/Wares—1.3% | |||||||||||
12,477 | Avery Dennison Corp. | 517,172 | |||||||||
Housewares—1.3% | |||||||||||
10,958 | Toro Co. (The) | 493,220 | |||||||||
Machinery - Diversified—4.8% | |||||||||||
19,725 | Altra Holdings, Inc. | 525,671 | |||||||||
19,853 | Briggs & Stratton Corp. | 446,494 | |||||||||
5,619 | Flowserve Corp. | 888,476 | |||||||||
1,860,641 | |||||||||||
Media—2.5% | |||||||||||
28,096 | Nielsen Holdings NV | 972,683 | |||||||||
Miscellaneous Manufacturing—7.2% | |||||||||||
6,986 | A.O. Smith Corp. | 526,954 | |||||||||
11,843 | AZZ, Inc. | 500,841 | |||||||||
17,218 | Ingersoll-Rand PLC (Ireland) | 926,328 | |||||||||
31,105 | Textron, Inc. | 800,954 | |||||||||
2,755,077 | |||||||||||
Office Furnishings—1.2% | |||||||||||
35,779 | Steelcase, Inc., Class A | 454,393 | |||||||||
Shipbuilding—1.5% | |||||||||||
10,992 | Huntington Ingalls Industries, Inc. | 581,477 | |||||||||
Telecommunications—1.4% | |||||||||||
18,780 | DigitalGlobe, Inc.(a) | 548,188 | |||||||||
Textiles—1.4% | |||||||||||
5,849 | UniFirst Corp. | 532,551 |
See Notes to Financial Statements.
54
Schedule of Investments (Continued)
PowerShares Dynamic Industrials Sector Portfolio (PRN)
April 30, 2013
Number of Shares | Value | ||||||||||
Common Stocks (Continued) | |||||||||||
Transportation—5.6% | |||||||||||
16,772 | Saia, Inc.(a) | $ | 686,310 | ||||||||
36,984 | Swift Transportation Co.(a) | 518,516 | |||||||||
10,927 | United Parcel Service, Inc., Class B | 937,974 | |||||||||
2,142,800 | |||||||||||
Trucking & Leasing—1.4% | |||||||||||
3,270 | AMERCO | 525,489 | |||||||||
Total Common Stocks (Cost $33,222,682) | 38,574,627 | ||||||||||
Money Market Fund—0.2% | |||||||||||
93,312 | Goldman Sachs Financial Square Prime Obligations—Institutional Share Class (Cost $93,312) | 93,312 | |||||||||
Total Investments (Cost $33,315,994)—100.2% | 38,667,939 | ||||||||||
Liabilities in excess of other assets—(0.2)% | (94,504 | ) | |||||||||
Net Assets—100.0% | $ | 38,573,435 |
Notes to Schedule of Investments:
(a) Non-income producing security.
See Notes to Financial Statements.
55
Schedule of Investments
PowerShares Dynamic Technology Sector Portfolio (PTF)
April 30, 2013
Number of Shares | Value | ||||||||||
Common Stocks—100.0% | |||||||||||
Commercial Services—13.9% | |||||||||||
5,048 | Alliance Data Systems Corp.(a) | $ | 867,095 | ||||||||
25,689 | Convergys Corp. | 437,227 | |||||||||
17,109 | CoreLogic, Inc.(a) | 466,734 | |||||||||
6,240 | FleetCor Technologies, Inc.(a) | 479,856 | |||||||||
13,250 | Heartland Payment Systems, Inc. | 435,792 | |||||||||
1,484 | MasterCard, Inc., Class A | 820,548 | |||||||||
5,892 | MAXIMUS, Inc. | 469,533 | |||||||||
23,227 | TeleTech Holdings, Inc.(a) | 494,503 | |||||||||
4,471,288 | |||||||||||
Computers—26.3% | |||||||||||
10,395 | Accenture PLC, Class A (Ireland) | 846,569 | |||||||||
74,019 | Brocade Communications Systems, Inc.(a) | 430,791 | |||||||||
16,315 | Computer Sciences Corp. | 764,358 | |||||||||
22,512 | Cray, Inc.(a) | 476,354 | |||||||||
6,275 | DST Systems, Inc. | 433,916 | |||||||||
21,617 | Insight Enterprises, Inc.(a) | 391,700 | |||||||||
9,712 | Jack Henry & Associates, Inc. | 450,637 | |||||||||
6,180 | Manhattan Associates, Inc.(a) | 433,898 | |||||||||
22,617 | NetApp, Inc.(a) | 789,107 | |||||||||
16,126 | NetScout Systems, Inc.(a) | 367,834 | |||||||||
24,421 | Seagate Technology PLC (Ireland) | 896,251 | |||||||||
27,921 | Silicon Graphics International Corp.(a) | 362,973 | |||||||||
37,467 | Spansion, Inc., Class A(a) | 486,696 | |||||||||
18,203 | Unisys Corp.(a) | 348,223 | |||||||||
16,940 | Western Digital Corp. | 936,443 | |||||||||
8,415,750 | |||||||||||
Distribution/Wholesale—1.2% | |||||||||||
21,907 | Ingram Micro, Inc., Class A(a) | 390,164 | |||||||||
Diversified Financial Services—1.8% | |||||||||||
21,717 | Ellie Mae, Inc.(a) | 565,076 | |||||||||
Electrical Components & Equipment—1.2% | |||||||||||
23,641 | Advanced Energy Industries, Inc.(a) | 401,424 | |||||||||
Electronics—9.3% | |||||||||||
10,983 | Amphenol Corp., Class A | 829,436 | |||||||||
11,904 | Avnet, Inc.(a) | 389,856 | |||||||||
8,367 | Badger Meter, Inc. | 365,471 | |||||||||
34,908 | Checkpoint Systems, Inc.(a) | 403,886 | |||||||||
64,359 | Flextronics International Ltd. (Singapore)(a) | 460,167 | |||||||||
41,704 | Sanmina Corp.(a) | 526,304 | |||||||||
2,975,120 | |||||||||||
Internet—11.1% | |||||||||||
11,223 | AOL, Inc.(a) | 433,657 | |||||||||
14,132 | eBay, Inc.(a) | 740,376 | |||||||||
3,630 | Equinix, Inc.(a) | 777,183 | |||||||||
33,910 | Symantec Corp.(a) | 824,013 | |||||||||
16,977 | Verisign, Inc.(a) | 782,130 | |||||||||
3,557,359 |
Number of Shares | Value | ||||||||||
Common Stocks (Continued) | |||||||||||
Machinery - Diversified—2.7% | |||||||||||
42,798 | Intermec, Inc.(a) | $ | 421,132 | ||||||||
9,381 | Zebra Technologies Corp., Class A(a) | 437,624 | |||||||||
858,756 | |||||||||||
Semiconductors—5.5% | |||||||||||
12,519 | First Solar, Inc.(a) | 582,885 | |||||||||
38,557 | Kulicke & Soffa Industries, Inc.(a) | 445,719 | |||||||||
26,229 | Magnachip Semiconductor Corp.(a) | 420,713 | |||||||||
10,501 | Ultratech, Inc.(a) | 309,464 | |||||||||
1,758,781 | |||||||||||
Software—15.7% | |||||||||||
23,445 | Acxiom Corp.(a) | 466,321 | |||||||||
13,797 | Aspen Technology, Inc.(a) | 420,533 | |||||||||
21,090 | CSG Systems International, Inc.(a) | 455,755 | |||||||||
28,951 | Digital River, Inc.(a) | 419,210 | |||||||||
9,690 | Fiserv, Inc.(a) | 882,856 | |||||||||
16,639 | ManTech International Corp., Class A | 444,095 | |||||||||
22,376 | Oracle Corp. | 733,485 | |||||||||
26,311 | PDF Solutions, Inc.(a) | 450,181 | |||||||||
7,723 | SolarWinds, Inc.(a) | 392,715 | |||||||||
11,114 | SYNNEX Corp.(a) | 384,544 | |||||||||
5,049,695 | |||||||||||
Telecommunications—11.3% | |||||||||||
11,824 | Amdocs Ltd. | 422,117 | |||||||||
24,759 | Arris Group, Inc.(a) | 408,771 | |||||||||
37,204 | Cisco Systems, Inc. | 778,308 | |||||||||
9,544 | InterDigital, Inc. | 423,849 | |||||||||
7,200 | Loral Space & Communications, Inc. | 442,944 | |||||||||
12,562 | Motorola Solutions, Inc. | 718,546 | |||||||||
9,431 | NeuStar, Inc., Class A(a) | 413,738 | |||||||||
3,608,273 | |||||||||||
Total Common Stocks (Cost $27,574,740) | 32,051,686 | ||||||||||
Money Market Fund—0.3% | |||||||||||
84,301 | Goldman Sachs Financial Square Prime Obligations—Institutional Share Class (Cost $84,301) | 84,301 | |||||||||
Total Investments (Cost $27,659,041)—100.3% | 32,135,987 | ||||||||||
Liabilities in excess of other assets—(0.3)% | (83,063 | ) | |||||||||
Net Assets—100.0% | $ | 32,052,924 |
Notes to Schedule of Investments:
(a) Non-income producing security.
See Notes to Financial Statements.
56
Schedule of Investments
PowerShares Dynamic Utilities Portfolio (PUI)
April 30, 2013
Number of Shares | Value | ||||||||||
Common Stocks—100.7% | |||||||||||
Cable/Satellite TV—4.9% | |||||||||||
24,365 | Comcast Corp., Class A | $ | 1,006,275 | ||||||||
27,712 | DISH Network Corp., Class A | 1,086,033 | |||||||||
2,092,308 | |||||||||||
Cellular Telecommunications—9.4% | |||||||||||
90,488 | Leap Wireless International, Inc.(a) | 517,591 | |||||||||
95,029 | NII Holdings, Inc.(a) | 826,752 | |||||||||
167,083 | Sprint Nextel Corp.(a) | 1,177,935 | |||||||||
81,503 | T-Mobile US, Inc.(a) | 964,996 | |||||||||
13,527 | United States Cellular Corp.(a) | 519,978 | |||||||||
4,007,252 | |||||||||||
Data Processing/Management—1.3% | |||||||||||
26,368 | CSG Systems International, Inc.(a) | 569,812 | |||||||||
Electric - Generation—1.5% | |||||||||||
47,173 | AES Corp. (The) | 653,818 | |||||||||
Electric - Integrated—42.2% | |||||||||||
15,791 | Ameren Corp. | 572,424 | |||||||||
21,057 | American Electric Power Co., Inc. | 1,082,961 | |||||||||
12,759 | Black Hills Corp. | 598,269 | |||||||||
20,085 | CMS Energy Corp. | 601,345 | |||||||||
9,068 | Consolidated Edison, Inc. | 577,178 | |||||||||
17,248 | Dominion Resources, Inc. | 1,063,857 | |||||||||
8,074 | DTE Energy Co. | 588,433 | |||||||||
14,000 | Duke Energy Corp. | 1,052,800 | |||||||||
24,313 | Empire District Electric Co. (The) | 560,901 | |||||||||
23,987 | FirstEnergy Corp. | 1,117,794 | |||||||||
11,343 | IDACORP, Inc. | 558,189 | |||||||||
9,748 | MGE Energy, Inc. | 544,426 | |||||||||
13,367 | NextEra Energy, Inc. | 1,096,495 | |||||||||
13,727 | NorthWestern Corp. | 590,535 | |||||||||
26,903 | NV Energy, Inc. | 581,912 | |||||||||
18,509 | Otter Tail Corp. | 577,481 | |||||||||
9,572 | Pinnacle West Capital Corp. | 582,935 | |||||||||
23,970 | PNM Resources, Inc. | 575,520 | |||||||||
18,167 | Portland General Electric Co. | 585,886 | |||||||||
31,583 | PPL Corp. | 1,054,240 | |||||||||
16,489 | Public Service Enterprise Group, Inc. | 603,662 | |||||||||
21,735 | Southern Co. (The) | 1,048,279 | |||||||||
11,360 | UNS Energy Corp. | 578,906 | |||||||||
13,135 | Wisconsin Energy Corp. | 590,287 | |||||||||
18,783 | Xcel Energy, Inc. | 597,112 | |||||||||
17,981,827 | |||||||||||
Gas - Distribution—8.2% | |||||||||||
13,327 | AGL Resources, Inc. | 584,389 | |||||||||
13,948 | Atmos Energy Corp. | 618,873 | |||||||||
25,371 | CenterPoint Energy, Inc. | 626,156 | |||||||||
12,663 | Sempra Energy | 1,049,130 | |||||||||
16,059 | Vectren Corp. | 603,176 | |||||||||
3,481,724 |
Number of Shares | Value | ||||||||||
Common Stocks (Continued) | |||||||||||
Internet Connectivity Services—1.4% | |||||||||||
20,569 | Cogent Communications Group, Inc. | $ | 589,096 | ||||||||
Satellite Telecommunications—1.3% | |||||||||||
79,619 | Iridium Communications, Inc.(a) | 534,244 | |||||||||
Telecommunication Equipment—1.4% | |||||||||||
83,164 | 8x8, Inc.(a) | 601,276 | |||||||||
Telecommunication Services—6.7% | |||||||||||
169,412 | Clearwire Corp., Class A(a) | 569,224 | |||||||||
31,582 | Consolidated Communications Holdings, Inc. | 582,056 | |||||||||
25,716 | Level 3 Communications, Inc.(a) | 517,663 | |||||||||
20,665 | tw telecom, inc.(a) | 559,608 | |||||||||
202,389 | Vonage Holdings Corp.(a) | 617,287 | |||||||||
2,845,838 | |||||||||||
Telephone - Integrated—12.4% | |||||||||||
27,254 | AT&T, Inc. | 1,020,935 | |||||||||
10,905 | Atlantic Tele-Network, Inc. | 553,647 | |||||||||
28,072 | CenturyLink, Inc. | 1,054,665 | |||||||||
124,767 | Cincinnati Bell, Inc.(a) | 439,180 | |||||||||
129,649 | Frontier Communications Corp. | 539,340 | |||||||||
21,419 | Verizon Communications, Inc. | 1,154,698 | |||||||||
62,531 | Windstream Corp. | 532,764 | |||||||||
5,295,229 | |||||||||||
Water—4.0% | |||||||||||
10,112 | American States Water Co. | 561,014 | |||||||||
13,316 | American Water Works Co., Inc. | 557,674 | |||||||||
18,329 | Aqua America, Inc. | 581,579 | |||||||||
1,700,267 | |||||||||||
Wireless Equipment—6.0% | |||||||||||
13,898 | Crown Castle International Corp.(a) | 1,070,146 | |||||||||
15,709 | Motorola Solutions, Inc. | 898,555 | |||||||||
7,568 | SBA Communications Corp., Class A(a) | 597,796 | |||||||||
2,566,497 | |||||||||||
Total Common Stocks (Cost $36,156,665) | 42,919,188 | ||||||||||
Money Market Fund—0.2% | |||||||||||
71,220 | Goldman Sachs Financial Square Prime Obligations—Institutional Share Class (Cost $71,220) | 71,220 | |||||||||
Total Investments (Cost $36,227,885)—100.9% | 42,990,408 | ||||||||||
Liabilities in excess of other assets—(0.9)% | (386,466 | ) | |||||||||
Net Assets—100.0% | $ | 42,603,942 |
Notes to Schedule of Investments:
(a) Non-income producing security.
See Notes to Financial Statements.
57
Schedule of Investments
PowerShares NASDAQ Internet Portfolio (PNQI)
April 30, 2013
Number of Shares | Value | ||||||||||
Common Stocks and Other Equity Interests—100.1% | |||||||||||
Applications Software—0.3% | |||||||||||
7,751 | Demandware, Inc.(a) | $ | 211,602 | ||||||||
Commercial Services—1.2% | |||||||||||
7,332 | CoStar Group, Inc.(a) | 794,862 | |||||||||
Communications Software—0.1% | |||||||||||
16,952 | Velti PLC (Jersey Islands)(a)(b) | 33,904 | |||||||||
Computer Services—1.0% | |||||||||||
11,896 | j2 Global, Inc. | 484,167 | |||||||||
14,571 | LivePerson, Inc.(a) | 186,800 | |||||||||
670,967 | |||||||||||
Computer Software—3.9% | |||||||||||
46,156 | Akamai Technologies, Inc.(a) | 2,026,710 | |||||||||
13,089 | Cornerstone OnDemand, Inc.(a) | 474,869 | |||||||||
2,501,579 | |||||||||||
E-Commerce/Products—17.9% | |||||||||||
18,759 | Amazon.com, Inc.(a) | 4,761,222 | |||||||||
3,251 | Blue Nile, Inc.(a) | 106,080 | |||||||||
90,658 | eBay, Inc.(a) | 4,749,573 | |||||||||
11,460 | MercadoLibre, Inc. (Argentina)(b) | 1,152,761 | |||||||||
7,444 | Nutrisystem, Inc. | 60,296 | |||||||||
6,168 | Overstock.com, Inc.(a)(b) | 128,294 | |||||||||
9,414 | Shutterfly, Inc.(a) | 419,206 | |||||||||
4,070 | Stamps.com, Inc.(a) | 137,729 | |||||||||
11,515,161 | |||||||||||
E-Commerce/Services—22.6% | |||||||||||
15,114 | Angie's List, Inc.(a) | 366,363 | |||||||||
31,840 | Expedia, Inc. | 1,777,946 | |||||||||
170,711 | Groupon, Inc., Class A(a)(b) | 1,041,337 | |||||||||
21,444 | IAC/InterActiveCorp. | 1,009,369 | |||||||||
10,329 | Move, Inc.(a) | 117,854 | |||||||||
13,168 | Netflix, Inc.(a) | 2,845,210 | |||||||||
5,946 | OpenTable, Inc.(a)(b) | 329,349 | |||||||||
27,410 | Orbitz Worldwide, Inc.(a) | 163,912 | |||||||||
7,209 | priceline.com, Inc.(a) | 5,017,392 | |||||||||
33,840 | TripAdvisor, Inc.(a) | 1,779,307 | |||||||||
23,758 | United Online, Inc. | 161,554 | |||||||||
14,609,593 | |||||||||||
E-Marketing/Information—1.9% | |||||||||||
9,319 | comScore, Inc.(a) | 150,688 | |||||||||
8,004 | Constant Contact, Inc.(a) | 116,938 | |||||||||
8,230 | Liquidity Services, Inc.(a)(b) | 270,767 | |||||||||
11,162 | QuinStreet, Inc.(a) | 73,000 | |||||||||
19,642 | ValueClick, Inc.(a) | 606,152 | |||||||||
1,217,545 |
Number of Shares | Value | ||||||||||
Common Stocks and Other Equity Interests (Continued) | |||||||||||
Enterprise Software/Services—1.9% | |||||||||||
9,219 | Digital River, Inc.(a) | $ | 133,491 | ||||||||
6,529 | E2open, Inc.(a)(b) | 92,777 | |||||||||
15,244 | Open Text Corp. (Canada)(a) | 996,805 | |||||||||
1,223,073 | |||||||||||
E-Services/Consulting—0.1% | |||||||||||
8,637 | Perficient, Inc.(a) | 90,516 | |||||||||
Human Resources—0.2% | |||||||||||
30,474 | Monster Worldwide, Inc.(a) | 133,476 | |||||||||
Internet Application Software—0.8% | |||||||||||
18,635 | Bazaarvoice, Inc.(a) | 135,104 | |||||||||
11,157 | Dealertrack Technologies, Inc.(a) | 310,722 | |||||||||
5,400 | Vocus, Inc.(a) | 45,414 | |||||||||
491,240 | |||||||||||
Internet Connectivity Services—0.9% | |||||||||||
9,517 | 21Vianet Group, Inc. ADR (Cayman Islands)(a) | 86,034 | |||||||||
9,253 | Boingo Wireless, Inc.(a) | 57,646 | |||||||||
12,213 | Cogent Communications Group, Inc. | 349,780 | |||||||||
13,957 | Internap Network Services Corp.(a) | 111,377 | |||||||||
604,837 | |||||||||||
Internet Content - Entertainment—9.7% | |||||||||||
181,937 | Facebook, Inc., Class A(a) | 5,050,571 | |||||||||
9,159 | Global Eagle Entertainment, Inc.(a)(b) | 88,110 | |||||||||
19,267 | NetEase, Inc. ADR (China) | 1,086,466 | |||||||||
6,225,147 | |||||||||||
Internet Content - Information/News—1.4% | |||||||||||
26,107 | Bankrate, Inc.(a) | 351,923 | |||||||||
15,280 | Dice Holdings, Inc.(a) | 128,963 | |||||||||
4,007 | Travelzoo, Inc.(a) | 102,299 | |||||||||
13,062 | WebMD Health Corp.(a) | 315,447 | |||||||||
898,632 | |||||||||||
Internet Incubators—1.0% | |||||||||||
21,729 | HomeAway, Inc.(a) | 663,821 | |||||||||
Internet Infrastructure Software—0.2% | |||||||||||
12,724 | Responsys, Inc.(a) | 98,867 | |||||||||
Internet Security—4.1% | |||||||||||
21,367 | Qihoo 360 Technology Co. Ltd. ADR (Cayman Islands)(a)(b) | 732,888 | |||||||||
39,682 | Verisign, Inc.(a) | 1,828,150 | |||||||||
15,979 | Zix Corp.(a) | 60,081 | |||||||||
2,621,119 | |||||||||||
Networking Products—0.2% | |||||||||||
6,472 | LogMeIn, Inc.(a) | 146,138 |
See Notes to Financial Statements.
58
Schedule of Investments (Continued)
PowerShares NASDAQ Internet Portfolio (PNQI)
April 30, 2013
Number of Shares | Value | ||||||||||
Common Stocks and Other Equity Interests (Continued) | |||||||||||
Printing - Commercial—0.6% | |||||||||||
8,693 | VistaPrint NV (Netherlands)(a)(b) | $ | 354,674 | ||||||||
Retail - Pet Food & Supplies—0.1% | |||||||||||
5,216 | PetMed Express, Inc. | 65,200 | |||||||||
Telecommunication Services—0.2% | |||||||||||
26,848 | EarthLink, Inc. | 152,765 | |||||||||
Web Hosting/Design—7.3% | |||||||||||
11,710 | Equinix, Inc.(a) | 2,507,111 | |||||||||
16,801 | NIC, Inc. | 282,929 | |||||||||
35,558 | Rackspace Hosting, Inc.(a) | 1,713,896 | |||||||||
12,826 | Web.com Group, Inc.(a) | 223,172 | |||||||||
4,727,108 | |||||||||||
Web Portals/ISP—22.5% | |||||||||||
20,068 | AOL, Inc.(a) | 775,428 | |||||||||
27,287 | Baidu, Inc. ADR (China)(a) | 2,342,589 | |||||||||
10,649 | Blucora, Inc.(a) | 157,286 | |||||||||
6,187 | Google, Inc., Class A(a) | 5,101,615 | |||||||||
17,244 | SINA Corp. (China)(a) | 971,182 | |||||||||
9,896 | Sohu.com, Inc.(a) | 509,050 | |||||||||
7,132 | Trulia, Inc.(a)(b) | 207,256 | |||||||||
116,240 | Yahoo!, Inc.(a) | 2,874,615 | |||||||||
60,472 | Yandex NV, Class A (Netherlands)(a) | 1,556,549 | |||||||||
14,495,570 | |||||||||||
Total Common Stocks and Other Equity Interests (Cost $56,321,033) | 64,547,396 | ||||||||||
Money Market Fund—0.0% | |||||||||||
4,747 | Goldman Sachs Financial Square Prime Obligations—Institutional Share Class (Cost $4,747) | 4,747 | |||||||||
Total Investments (excluding investments purchased with cash collateral from securities on loan) (Cost $56,325,780)—100.1% | 64,552,143 |
Number of Shares | Value | ||||||||||
Investments Purchased with Cash Collateral from Securities on Loan | |||||||||||
Money Market Fund—3.6% | |||||||||||
2,348,033 | Invesco Liquid Assets Portfolio— Institutional Class (Cost $2,348,033)(c)(d) | $ | 2,348,033 | ||||||||
Total Investments (Cost $58,673,813)—103.7% | 66,900,176 | ||||||||||
Liabilities in excess of other assets—(3.7)% | (2,375,035 | ) | |||||||||
Net Assets—100.0% | $ | 64,525,141 |
Investment Abbreviations:
ADR—American Depositary Receipt
Notes to Schedule of Investments:
(a) Non-income producing security.
(b) All or a portion of this security was out on loan at April 30, 2013.
(c) The security has been segregated to satisfy the commitment to return the cash collateral received in securities lending transactions upon the borrower's return of the securities loaned.
(d) The security and the Fund are advised by wholly owned subsidiaries of Invesco Ltd. and are therefore considered to be affiliated.
See Notes to Financial Statements.
59
Statements of Assets and Liabilities
April 30, 2013
PowerShares Dynamic Basic Materials Sector Portfolio (PYZ) | PowerShares Dynamic Consumer Discretionary Sector Portfolio (PEZ) | PowerShares Dynamic Consumer Staples Sector Portfolio (PSL) | PowerShares Dynamic Energy Sector Portfolio (PXI) | PowerShares Dynamic Financial Sector Portfolio (PFI) | |||||||||||||||||||
ASSETS: | |||||||||||||||||||||||
Unaffiliated investments, at value(a) | $ | 80,318,807 | $ | 24,020,415 | $ | 37,773,828 | $ | 138,084,162 | $ | 20,408,766 | |||||||||||||
Affiliated investments, at value | — | — | — | — | — | ||||||||||||||||||
Total investments, at value | 80,318,807 | 24,020,415 | 37,773,828 | 138,084,162 | 20,408,766 | ||||||||||||||||||
Receivables: | |||||||||||||||||||||||
Dividends | 46,380 | 268 | 35,208 | 25,531 | 9,073 | ||||||||||||||||||
Expense waivers | 2,149 | 5,262 | 3,113 | 2,400 | 3,672 | ||||||||||||||||||
Investments sold | 2,199,222 | — | — | 111,116 | 2,353,203 | ||||||||||||||||||
Security lending | — | — | — | — | — | ||||||||||||||||||
Total Assets | 82,566,558 | 24,025,945 | 37,812,149 | 138,223,209 | 22,774,714 | ||||||||||||||||||
LIABILITIES: | |||||||||||||||||||||||
Payables: | |||||||||||||||||||||||
Investments purchased | — | — | — | 90,493 | — | ||||||||||||||||||
Expenses recapture | — | — | — | — | — | ||||||||||||||||||
Shares repurchased | 2,169,004 | — | — | — | 2,357,104 | ||||||||||||||||||
Collateral upon return of securities loaned | — | — | — | — | — | ||||||||||||||||||
Accrued advisory fees | 34,260 | 10,442 | 15,196 | 56,435 | 9,096 | ||||||||||||||||||
Accrued trustees fees | 9,166 | 7,797 | 8,551 | 10,110 | 7,891 | ||||||||||||||||||
Accrued expenses | 100,993 | 74,616 | 80,486 | 150,324 | 70,645 | ||||||||||||||||||
Total Liabilities | 2,313,423 | 92,855 | 104,233 | 307,362 | 2,444,736 | ||||||||||||||||||
NET ASSETS | $ | 80,253,135 | $ | 23,933,090 | $ | 37,707,916 | $ | 137,915,847 | $ | 20,329,978 | |||||||||||||
NET ASSETS CONSIST OF: | |||||||||||||||||||||||
Shares of beneficial interest | $ | 93,785,469 | $ | 31,163,346 | $ | 41,617,090 | $ | 151,787,740 | $ | 29,577,796 | |||||||||||||
Undistributed net investment income (loss) | 125,208 | 20,309 | 88,112 | 17,629 | 61,037 | ||||||||||||||||||
Undistributed net realized gain (loss) | (23,281,123 | ) | (10,299,688 | ) | (12,171,661 | ) | (28,827,660 | ) | (12,068,668 | ) | |||||||||||||
Net unrealized appreciation | 9,623,581 | 3,049,123 | 8,174,375 | 14,938,138 | 2,759,813 | ||||||||||||||||||
Net Assets | $ | 80,253,135 | $ | 23,933,090 | $ | 37,707,916 | $ | 137,915,847 | $ | 20,329,978 | |||||||||||||
Shares outstanding (unlimited amount authorized, $0.01 par value) | 1,850,000 | 700,000 | 950,000 | 2,850,000 | 850,000 | ||||||||||||||||||
Net asset value | $ | 43.38 | $ | 34.19 | $ | 39.69 | $ | 48.39 | $ | 23.92 | |||||||||||||
Market price | $ | 43.29 | $ | 34.16 | $ | 39.67 | $ | 48.36 | $ | 23.90 | |||||||||||||
Unaffiliated investments, at cost | $ | 70,695,226 | $ | 20,971,292 | $ | 29,599,453 | $ | 123,146,024 | $ | 17,648,953 | |||||||||||||
Affiliated investments, at cost | $ | — | $ | — | $ | — | $ | — | $ | — | |||||||||||||
Total investments, at cost | $ | 70,695,226 | $ | 20,971,292 | $ | 29,599,453 | $ | 123,146,024 | $ | 17,648,953 | |||||||||||||
(a)Includes securities on loan with an aggregate value of | $ | — | $ | — | $ | — | $ | — | $ | — |
See Notes to Financial Statements.
60
PowerShares Dynamic Healthcare Sector Portfolio (PTH) | PowerShares Dynamic Industrials Sector Portfolio (PRN) | PowerShares Dynamic Technology Sector Portfolio (PTF) | PowerShares Dynamic Utilities Portfolio (PUI) | PowerShares NASDAQ Internet Portfolio (PNQI) | |||||||||||||||||||
ASSETS: | |||||||||||||||||||||||
Unaffiliated investments, at value(a) | $ | 60,157,876 | $ | 38,667,939 | $ | 32,135,987 | $ | 42,990,408 | $ | 64,552,143 | |||||||||||||
Affiliated investments, at value | — | — | — | — | 2,348,033 | ||||||||||||||||||
Total investments, at value | 60,157,876 | 38,667,939 | 32,135,987 | 42,990,408 | 66,900,176 | ||||||||||||||||||
Receivables: | |||||||||||||||||||||||
Dividends | 34,995 | 36,116 | 9,315 | 46,562 | — | ||||||||||||||||||
Expense waivers | — | 7,433 | 5,496 | 4,278 | — | ||||||||||||||||||
Investments sold | — | 1,825,378 | — | — | — | ||||||||||||||||||
Security lending | — | — | — | — | 2,634 | ||||||||||||||||||
Total Assets | 60,192,871 | 40,536,866 | 32,150,798 | 43,041,248 | 66,902,810 | ||||||||||||||||||
LIABILITIES: | |||||||||||||||||||||||
Payables: | |||||||||||||||||||||||
Investments purchased | — | 33,418 | — | 334,289 | — | ||||||||||||||||||
Expenses recapture | 496 | — | — | — | — | ||||||||||||||||||
Shares repurchased | — | 1,824,419 | — | — | — | ||||||||||||||||||
Collateral upon return of securities loaned | — | — | — | — | 2,348,033 | ||||||||||||||||||
Accrued advisory fees | 23,880 | 15,944 | 12,924 | 16,982 | 29,636 | ||||||||||||||||||
Accrued trustees fees | 10,327 | 9,111 | 8,592 | 8,861 | — | ||||||||||||||||||
Accrued expenses | 87,443 | 80,539 | 76,358 | 77,174 | — | ||||||||||||||||||
Total Liabilities | 122,146 | 1,963,431 | 97,874 | 437,306 | 2,377,669 | ||||||||||||||||||
NET ASSETS | $ | 60,070,725 | $ | 38,573,435 | $ | 32,052,924 | $ | 42,603,942 | $ | 64,525,141 | |||||||||||||
NET ASSETS CONSIST OF: | |||||||||||||||||||||||
Shares of beneficial interest | $ | 104,918,145 | $ | 76,749,601 | $ | 58,850,878 | $ | 53,826,111 | $ | 61,938,137 | |||||||||||||
Undistributed net investment income (loss) | 84,308 | (8,290 | ) | (27,274 | ) | 114,772 | (45,192 | ) | |||||||||||||||
Undistributed net realized gain (loss) | (52,868,624 | ) | (43,519,821 | ) | (31,247,626 | ) | (18,099,464 | ) | (5,594,167 | ) | |||||||||||||
Net unrealized appreciation | 7,936,896 | 5,351,945 | 4,476,946 | 6,762,523 | 8,226,363 | ||||||||||||||||||
Net Assets | $ | 60,070,725 | $ | 38,573,435 | $ | 32,052,924 | $ | 42,603,942 | $ | 64,525,141 | |||||||||||||
Shares outstanding (unlimited amount authorized, $0.01 par value) | 1,550,000 | 1,050,000 | 1,100,000 | 2,150,000 | 1,400,000 | ||||||||||||||||||
Net asset value | $ | 38.76 | $ | 36.74 | $ | 29.14 | $ | 19.82 | $ | 46.09 | |||||||||||||
Market price | $ | 38.69 | $ | 36.72 | $ | 29.06 | $ | 19.79 | $ | 46.08 | |||||||||||||
Unaffiliated investments, at cost | $ | 52,220,980 | $ | 33,315,994 | $ | 27,659,041 | $ | 36,227,885 | $ | 56,325,780 | |||||||||||||
Affiliated investments, at cost | $ | — | $ | — | $ | — | $ | — | $ | 2,348,033 | |||||||||||||
Total investments, at cost | $ | 52,220,980 | $ | 33,315,994 | $ | 27,659,041 | $ | 36,227,885 | $ | 58,673,813 | |||||||||||||
(a)Includes securities on loan with an aggregate value of | $ | — | $ | — | $ | — | $ | — | $ | 2,263,509 |
61
Statements of Operations
Year Ended April 30, 2013
PowerShares Dynamic Basic Materials Sector Portfolio (PYZ) | PowerShares Dynamic Consumer Discretionary Sector Portfolio (PEZ) | PowerShares Dynamic Consumer Staples Sector Portfolio (PSL) | PowerShares Dynamic Energy Sector Portfolio (PXI) | PowerShares Dynamic Financial Sector Portfolio (PFI) | |||||||||||||||||||
INVESTMENT INCOME: | |||||||||||||||||||||||
Unaffiliated dividend income | $ | 1,471,753 | $ | 537,013 | $ | 959,673 | $ | 2,157,743 | $ | 430,230 | |||||||||||||
Affiliated dividend income | — | — | — | — | 3,167 | ||||||||||||||||||
Securities lending income | — | — | — | — | — | ||||||||||||||||||
Foreign withholding tax | — | — | — | (2,432 | ) | — | |||||||||||||||||
Total Income | 1,471,753 | 537,013 | 959,673 | 2,155,311 | 433,397 | ||||||||||||||||||
EXPENSES: | |||||||||||||||||||||||
Advisory fees | 328,225 | 137,829 | 184,979 | 611,566 | 93,403 | ||||||||||||||||||
Accounting & administration fees | 57,844 | 57,844 | 57,844 | 57,844 | 57,844 | ||||||||||||||||||
Sub-licensing | 32,823 | 13,783 | 18,498 | 61,157 | 9,341 | ||||||||||||||||||
Professional fees | 23,594 | 22,722 | 22,650 | 31,519 | 24,365 | ||||||||||||||||||
Custodian & transfer agent fees | 3,475 | 5,530 | 3,250 | 14,387 | 4,702 | ||||||||||||||||||
Trustees fees | 6,663 | 5,850 | 6,093 | 7,772 | 5,636 | ||||||||||||||||||
Other expenses | 20,448 | 13,182 | 10,639 | 56,467 | 10,410 | ||||||||||||||||||
Total Expenses | 473,072 | 256,740 | 303,953 | 840,712 | 205,701 | ||||||||||||||||||
Waivers | (46,379 | ) | (76,493 | ) | (63,480 | ) | (31,818 | ) | (83,041 | ) | |||||||||||||
Net Expenses | 426,693 | 180,247 | 240,473 | 808,894 | 122,660 | ||||||||||||||||||
Net Investment Income (Loss) | 1,045,060 | 356,766 | 719,200 | 1,346,417 | 310,737 | ||||||||||||||||||
REALIZED AND UNREALIZED GAIN (LOSS): | |||||||||||||||||||||||
Net realized gain (loss) from: | |||||||||||||||||||||||
Investment securities | (5,198,696 | ) | (1,838,490 | ) | (1,646,576 | ) | (9,192,662 | ) | (802,805 | ) | |||||||||||||
In-kind redemptions | 8,217,136 | 6,100,212 | 6,033,103 | 15,300,245 | 3,064,230 | ||||||||||||||||||
Net realized gain | 3,018,440 | 4,261,722 | 4,386,527 | 6,107,583 | 2,261,425 | ||||||||||||||||||
Net change in unrealized appreciation on investment securities | 4,647,985 | 174,934 | 2,798,508 | 14,877,574 | 1,179,820 | ||||||||||||||||||
Net realized and unrealized gain | 7,666,425 | 4,436,656 | 7,185,035 | 20,985,157 | 3,441,245 | ||||||||||||||||||
Net increase in net assets resulting from operations | $ | 8,711,485 | $ | 4,793,422 | $ | 7,904,235 | $ | 22,331,574 | $ | 3,751,982 |
See Notes to Financial Statements.
62
PowerShares Dynamic Healthcare Sector Portfolio (PTH) | PowerShares Dynamic Industrials Sector Portfolio (PRN) | PowerShares Dynamic Technology Sector Portfolio (PTF) | PowerShares Dynamic Utilities Portfolio (PUI) | PowerShares NASDAQ Internet Portfolio (PNQI) | |||||||||||||||||||
INVESTMENT INCOME: | |||||||||||||||||||||||
Unaffiliated dividend income | $ | 882,659 | $ | 690,235 | $ | 381,353 | $ | 1,290,113 | $ | 130,076 | |||||||||||||
Affiliated dividend income | — | — | — | — | — | ||||||||||||||||||
Securities lending income | — | — | — | — | 179,454 | ||||||||||||||||||
Foreign withholding tax | — | (577 | ) | — | — | — | |||||||||||||||||
Total Income | 882,659 | 689,658 | 381,353 | 1,290,113 | 309,530 | ||||||||||||||||||
EXPENSES: | |||||||||||||||||||||||
Advisory fees | 230,892 | 149,756 | 149,001 | 203,721 | 317,970 | ||||||||||||||||||
Accounting & administration fees | 57,844 | 57,844 | 57,844 | 57,844 | — | ||||||||||||||||||
Sub-licensing | 23,089 | 14,973 | 14,900 | 12,223 | — | ||||||||||||||||||
Professional fees | 17,140 | 25,592 | 22,178 | 25,775 | — | ||||||||||||||||||
Custodian & transfer agent fees | 5,356 | 8,372 | 5,680 | 11,628 | — | ||||||||||||||||||
Trustees fees | 6,529 | 5,808 | 5,852 | 6,208 | — | ||||||||||||||||||
Other expenses | 627 | 14,602 | 10,836 | 11,046 | — | ||||||||||||||||||
Total Expenses | 341,477 | 276,947 | 266,291 | 328,445 | 317,970 | ||||||||||||||||||
Waivers | (41,317 | ) | (82,100 | ) | (72,589 | ) | (71,758 | ) | — | ||||||||||||||
Net Expenses | 300,160 | 194,847 | 193,702 | 256,687 | 317,970 | ||||||||||||||||||
Net Investment Income (Loss) | 582,499 | 494,811 | 187,651 | 1,033,426 | (8,440 | ) | |||||||||||||||||
REALIZED AND UNREALIZED GAIN (LOSS): | |||||||||||||||||||||||
Net realized gain (loss) from: | |||||||||||||||||||||||
Investment securities | (1,945,360 | ) | (1,815,473 | ) | (3,004,696 | ) | (1,563,305 | ) | (3,414,310 | ) | |||||||||||||
In-kind redemptions | 7,124,001 | 4,043,215 | 4,927,056 | 2,429,777 | 8,628,710 | ||||||||||||||||||
Net realized gain | 5,178,641 | 2,227,742 | 1,922,360 | 866,472 | 5,214,400 | ||||||||||||||||||
Net change in unrealized appreciation on investment securities | 4,322,451 | 4,044,778 | 166,645 | 6,101,677 | 243,934 | ||||||||||||||||||
Net realized and unrealized gain | 9,501,092 | 6,272,520 | 2,089,005 | 6,968,149 | 5,458,334 | ||||||||||||||||||
Net increase in net assets resulting from operations | $ | 10,083,591 | $ | 6,767,331 | $ | 2,276,656 | $ | 8,001,575 | $ | 5,449,894 |
63
Statements of Changes in Net Assets
PowerShares Dynamic Basic Materials Sector Portfolio (PYZ) | PowerShares Dynamic Consumer Discretionary Sector Portfolio (PEZ) | PowerShares Dynamic Consumer Staples Sector Portfolio (PSL) | |||||||||||||||||||||||||
Year Ended April 30, 2013 | Year Ended April 30, 2012 | Year Ended April 30, 2013 | Year Ended April 30, 2012 | Year Ended April 30, 2013 | Year Ended April 30, 2012 | ||||||||||||||||||||||
OPERATIONS: | |||||||||||||||||||||||||||
Net investment income | $ | 1,045,060 | $ | 920,943 | $ | 356,766 | $ | 136,194 | $ | 719,200 | $ | 597,570 | |||||||||||||||
Net realized gain | 3,018,440 | 3,640,133 | 4,261,722 | 1,490,233 | 4,386,527 | 4,006,854 | |||||||||||||||||||||
Net change in unrealized appreciation (depreciation) | 4,647,985 | (15,660,916 | ) | 174,934 | 165,387 | 2,798,508 | (2,648,395 | ) | |||||||||||||||||||
Net increase (decrease) in net assets resulting from operations | 8,711,485 | (11,099,840 | ) | 4,793,422 | 1,791,814 | 7,904,235 | 1,956,029 | ||||||||||||||||||||
DISTRIBUTIONS TO SHAREHOLDERS FROM: | |||||||||||||||||||||||||||
Net investment income | (1,050,895 | ) | (838,951 | ) | (332,955 | ) | (149,036 | ) | (761,607 | ) | (566,981 | ) | |||||||||||||||
Return of capital | — | — | — | — | — | — | |||||||||||||||||||||
Total distributions to shareholders | (1,050,895 | ) | (838,951 | ) | (332,955 | ) | (149,036 | ) | (761,607 | ) | (566,981 | ) | |||||||||||||||
SHAREHOLDER TRANSACTIONS: | |||||||||||||||||||||||||||
Proceeds from shares sold | 59,425,865 | 59,009,722 | 47,664,294 | 21,226,795 | 16,887,134 | 26,308,085 | |||||||||||||||||||||
Value of shares repurchased | (53,756,851 | ) | (77,738,600 | ) | (47,628,525 | ) | (24,089,490 | ) | (25,453,074 | ) | (29,337,675 | ) | |||||||||||||||
Net increase (decrease) in net assets resulting from shares transactions | 5,669,014 | (18,728,878 | ) | 35,769 | (2,862,695 | ) | (8,565,940 | ) | (3,029,590 | ) | |||||||||||||||||
Increase (Decrease) in Net Assets | 13,329,604 | (30,667,669 | ) | 4,496,236 | (1,219,917 | ) | (1,423,312 | ) | (1,640,542 | ) | |||||||||||||||||
NET ASSETS: | |||||||||||||||||||||||||||
Beginning of year | 66,923,531 | 97,591,200 | 19,436,854 | 20,656,771 | 39,131,228 | 40,771,770 | |||||||||||||||||||||
End of year | $ | 80,253,135 | $ | 66,923,531 | $ | 23,933,090 | $ | 19,436,854 | $ | 37,707,916 | $ | 39,131,228 | |||||||||||||||
Undistributed net investment income at end of year | $ | 125,208 | $ | 129,415 | $ | 20,309 | $ | 15,924 | $ | 88,112 | $ | 130,519 | |||||||||||||||
CHANGES IN SHARES OUTSTANDING: | |||||||||||||||||||||||||||
Shares sold | 1,500,000 | 1,550,000 | 1,600,000 | 800,000 | 500,000 | 850,000 | |||||||||||||||||||||
Shares repurchased | (1,400,000 | ) | (2,200,000 | ) | (1,550,000 | ) | (900,000 | ) | (750,000 | ) | (950,000 | ) | |||||||||||||||
Shares outstanding, beginning of year | 1,750,000 | 2,400,000 | 650,000 | 750,000 | 1,200,000 | 1,300,000 | |||||||||||||||||||||
Shares outstanding, end of year | 1,850,000 | 1,750,000 | 700,000 | 650,000 | 950,000 | 1,200,000 |
See Notes to Financial Statements.
64
PowerShares Dynamic Energy Sector Portfolio (PXI) | PowerShares Dynamic Financial Sector Portfolio (PFI) | PowerShares Dynamic Healthcare Sector Portfolio (PTH) | |||||||||||||||||||||||||
Year Ended April 30, 2013 | Year Ended April 30, 2012 | Year Ended April 30, 2013 | Year Ended April 30, 2012 | Year Ended April 30, 2013 | Year Ended April 30, 2012 | ||||||||||||||||||||||
OPERATIONS: | |||||||||||||||||||||||||||
Net investment income | $ | 1,346,417 | $ | 808,854 | $ | 310,737 | $ | 249,006 | $ | 582,499 | $ | 27,799 | |||||||||||||||
Net realized gain | 6,107,583 | 8,221,853 | 2,261,425 | 741,171 | 5,178,641 | 2,722,485 | |||||||||||||||||||||
Net change in unrealized appreciation (depreciation) | 14,877,574 | (31,262,881 | ) | 1,179,820 | (1,452,237 | ) | 4,322,451 | (8,466,595 | ) | ||||||||||||||||||
Net increase (decrease) in net assets resulting from operations | 22,331,574 | (22,232,174 | ) | 3,751,982 | (462,060 | ) | 10,083,591 | (5,716,311 | ) | ||||||||||||||||||
DISTRIBUTIONS TO SHAREHOLDERS FROM: | |||||||||||||||||||||||||||
Net investment income | (1,757,378 | ) | (960,095 | ) | (308,168 | ) | (214,150 | ) | (519,661 | ) | — | ||||||||||||||||
Return of capital | — | — | — | — | — | — | |||||||||||||||||||||
Total distributions to shareholders | (1,757,378 | ) | (960,095 | ) | (308,168 | ) | (214,150 | ) | (519,661 | ) | — | ||||||||||||||||
SHAREHOLDER TRANSACTIONS: | |||||||||||||||||||||||||||
Proceeds from shares sold | 95,321,127 | 143,577,871 | 22,746,892 | 19,751,147 | 68,466,346 | 80,866,281 | |||||||||||||||||||||
Value of shares repurchased | (119,541,343 | ) | (170,726,580 | ) | (23,931,832 | ) | (23,496,307 | ) | (55,093,388 | ) | (100,838,066 | ) | |||||||||||||||
Net increase (decrease) in net assets resulting from shares transactions | (24,220,216 | ) | (27,148,709 | ) | (1,184,940 | ) | (3,745,160 | ) | 13,372,958 | (19,971,785 | ) | ||||||||||||||||
Increase (Decrease) in Net Assets | (3,646,020 | ) | (50,340,978 | ) | 2,258,874 | (4,421,370 | ) | 22,936,888 | (25,688,096 | ) | |||||||||||||||||
NET ASSETS: | |||||||||||||||||||||||||||
Beginning of year | 141,561,867 | 191,902,845 | 18,071,104 | 22,492,474 | 37,133,837 | 62,821,933 | |||||||||||||||||||||
End of year | $ | 137,915,847 | $ | 141,561,867 | $ | 20,329,978 | $ | 18,071,104 | $ | 60,070,725 | $ | 37,133,837 | |||||||||||||||
Undistributed net investment income at end of year | $ | 17,629 | $ | 114,065 | $ | 61,037 | $ | 33,073 | $ | 84,308 | $ | 21,470 | |||||||||||||||
CHANGES IN SHARES OUTSTANDING: | |||||||||||||||||||||||||||
Shares sold | 2,200,000 | 3,550,000 | 1,100,000 | 1,050,000 | 2,050,000 | 2,600,000 | |||||||||||||||||||||
Shares repurchased | (2,850,000 | ) | (4,350,000 | ) | (1,150,000 | ) | (1,250,000 | ) | (1,650,000 | ) | (3,450,000 | ) | |||||||||||||||
Shares outstanding, beginning of year | 3,500,000 | 4,300,000 | 900,000 | 1,100,000 | 1,150,000 | 2,000,000 | |||||||||||||||||||||
Shares outstanding, end of year | 2,850,000 | 3,500,000 | 850,000 | 900,000 | 1,550,000 | 1,150,000 |
65
Statements of Changes in Net Assets (Continued)
PowerShares Dynamic Industrials Sector Portfolio (PRN) | PowerShares Dynamic Technology Sector Portfolio (PTF) | ||||||||||||||||||
Year Ended April 30, 2013 | Year Ended April 30, 2012 | Year Ended April 30, 2013 | Year Ended April 30, 2012 | ||||||||||||||||
OPERATIONS: | |||||||||||||||||||
Net investment income (loss) | $ | 494,811 | $ | 429,055 | $ | 187,651 | $ | 10,124 | |||||||||||
Net realized gain (loss) | 2,227,742 | (4,850,198 | ) | 1,922,360 | (1,839,408 | ) | |||||||||||||
Net change in unrealized appreciation (depreciation) | 4,044,778 | (8,925,666 | ) | 166,645 | (604,634 | ) | |||||||||||||
Net increase (decrease) in net assets resulting from operations | 6,767,331 | (13,346,809 | ) | 2,276,656 | (2,433,918 | ) | |||||||||||||
DISTRIBUTIONS TO SHAREHOLDERS FROM: | |||||||||||||||||||
Net investment income | (607,832 | ) | (355,923 | ) | (220,275 | ) | — | ||||||||||||
Return of capital | (39,658 | ) | — | — | — | ||||||||||||||
Total distributions to shareholders | (647,490 | ) | (355,923 | ) | (220,275 | ) | — | ||||||||||||
SHAREHOLDER TRANSACTIONS: | |||||||||||||||||||
Proceeds from shares sold | 31,963,235 | 68,247,178 | 21,294,978 | 34,288,268 | |||||||||||||||
Value of shares repurchased | (29,526,956 | ) | (138,155,848 | ) | (22,685,236 | ) | (50,260,948 | ) | |||||||||||
Net increase (decrease) in net assets resulting from shares transactions | 2,436,279 | (69,908,670 | ) | (1,390,258 | ) | (15,972,680 | ) | ||||||||||||
Increase (Decrease) in Net Assets | 8,556,120 | (83,611,402 | ) | 666,123 | (18,406,598 | ) | |||||||||||||
NET ASSETS: | |||||||||||||||||||
Beginning of year | 30,017,315 | 113,628,717 | 31,386,801 | 49,793,399 | |||||||||||||||
End of year | $ | 38,573,435 | $ | 30,017,315 | $ | 32,052,924 | $ | 31,386,801 | |||||||||||
Undistributed net investment income (loss) at end of year | $ | (8,290 | ) | $ | 104,690 | $ | (27,274 | ) | $ | 5,350 | |||||||||
CHANGES IN SHARES OUTSTANDING: | |||||||||||||||||||
Shares sold | 1,000,000 | 2,300,000 | 800,000 | 1,350,000 | |||||||||||||||
Shares repurchased | (950,000 | ) | (4,800,000 | ) | (850,000 | ) | (2,000,000 | ) | |||||||||||
Shares outstanding, beginning of year | 1,000,000 | 3,500,000 | 1,150,000 | 1,800,000 | |||||||||||||||
Shares outstanding, end of year | 1,050,000 | 1,000,000 | 1,100,000 | 1,150,000 |
See Notes to Financial Statements.
66
PowerShares Dynamic Utilities Portfolio (PUI) | PowerShares NASDAQ Internet Portfolio (PNQI) | ||||||||||||||||||
Year Ended April 30, 2013 | Year Ended April 30, 2012 | Year Ended April 30, 2013 | Year Ended April 30, 2012 | ||||||||||||||||
OPERATIONS: | |||||||||||||||||||
Net investment income (loss) | $ | 1,033,426 | $ | 1,342,100 | $ | (8,440 | ) | $ | (113,519 | ) | |||||||||
Net realized gain (loss) | 866,472 | (5,616,112 | ) | 5,214,400 | 3,127,644 | ||||||||||||||
Net change in unrealized appreciation (depreciation) | 6,101,677 | (4,451,910 | ) | 243,934 | (2,982,302 | ) | |||||||||||||
Net increase (decrease) in net assets resulting from operations | 8,001,575 | (8,725,922 | ) | 5,449,894 | 31,823 | ||||||||||||||
DISTRIBUTIONS TO SHAREHOLDERS FROM: | |||||||||||||||||||
Net investment income | (1,054,339 | ) | (1,320,323 | ) | (27,038 | ) | — | ||||||||||||
Return of capital | — | — | — | — | |||||||||||||||
Total distributions to shareholders | (1,054,339 | ) | (1,320,323 | ) | (27,038 | ) | — | ||||||||||||
SHAREHOLDER TRANSACTIONS: | |||||||||||||||||||
Proceeds from shares sold | 15,274,609 | 132,535,190 | 26,166,289 | 32,552,217 | |||||||||||||||
Value of shares repurchased | (23,011,381 | ) | (126,184,308 | ) | (30,742,175 | ) | (14,413,130 | ) | |||||||||||
Net increase (decrease) in net assets resulting from shares transactions | (7,736,772 | ) | 6,350,882 | (4,575,886 | ) | 18,139,087 | |||||||||||||
Increase (Decrease) in Net Assets | (789,536 | ) | (3,695,363 | ) | 846,970 | 18,170,910 | |||||||||||||
NET ASSETS: | |||||||||||||||||||
Beginning of year | 43,393,478 | 47,088,841 | 63,678,171 | 45,507,261 | |||||||||||||||
End of year | $ | 42,603,942 | $ | 43,393,478 | $ | 64,525,141 | $ | 63,678,171 | |||||||||||
Undistributed net investment income (loss) at end of year | $ | 114,772 | $ | 135,685 | $ | (45,192 | ) | $ | (9,714 | ) | |||||||||
CHANGES IN SHARES OUTSTANDING: | |||||||||||||||||||
Shares sold | 900,000 | 7,650,000 | 600,000 | 850,000 | |||||||||||||||
Shares repurchased | (1,350,000 | ) | (7,800,000 | ) | (750,000 | ) | (400,000 | ) | |||||||||||
Shares outstanding, beginning of year | 2,600,000 | 2,750,000 | 1,550,000 | 1,100,000 | |||||||||||||||
Shares outstanding, end of year | 2,150,000 | 2,600,000 | 1,400,000 | 1,550,000 |
67
Financial Highlights
PowerShares Dynamic Basic Materials Sector Portfolio (PYZ)
Year Ended April 30, | |||||||||||||||||||||||
2013 | 2012 | 2011 | 2010 | 2009 | |||||||||||||||||||
PER SHARE OPERATING PERFORMANCE: | |||||||||||||||||||||||
Net asset value at beginning of year | $ | 38.24 | $ | 40.66 | $ | 31.30 | $ | 20.14 | $ | 36.29 | |||||||||||||
Net investment income(a) | 0.63 | 0.47 | 0.86 | (b) | 0.28 | 0.42 | |||||||||||||||||
Net realized and unrealized gain (loss) on investments | 5.16 | (2.46 | ) | 9.34 | 11.20 | (16.15 | ) | ||||||||||||||||
Total from investment operations | 5.79 | (1.99 | ) | 10.20 | 11.48 | (15.73 | ) | ||||||||||||||||
Distributions to shareholders from: | |||||||||||||||||||||||
Net investment income | (0.65 | ) | (0.43 | ) | (0.84 | ) | (0.32 | ) | (0.42 | ) | |||||||||||||
Net asset value at end of year | $ | 43.38 | $ | 38.24 | $ | 40.66 | $ | 31.30 | $ | 20.14 | |||||||||||||
Market price at end of year(c) | $ | 43.29 | $ | 38.20 | $ | 40.67 | $ | 31.34 | $ | 20.15 | |||||||||||||
NET ASSET VALUE, TOTAL RETURN(d) | 15.37 | % | (4.76 | )% | 33.12 | % | 57.46 | % | (43.63 | )% | |||||||||||||
MARKET PRICE TOTAL RETURN(d) | 15.26 | % | (4.88 | )% | 32.98 | % | 57.59 | % | (43.59 | )% | |||||||||||||
RATIOS/SUPPLEMENTAL DATA: | |||||||||||||||||||||||
Net assets at end of year (000's omitted) | $ | 80,253 | $ | 66,924 | $ | 97,591 | $ | 48,517 | $ | 18,129 | |||||||||||||
Ratio to average net assets of: | |||||||||||||||||||||||
Expenses, after Waivers | 0.65 | % | 0.65 | % | 0.65 | % | 0.65 | % | 0.65 | % | |||||||||||||
Expenses, prior to Waivers | 0.72 | % | 0.76 | % | 0.79 | % | 0.91 | % | 0.97 | % | |||||||||||||
Net investment income, after Waivers | 1.59 | % | 1.33 | % | 2.56 | %(b) | 1.05 | % | 1.57 | % | |||||||||||||
Portfolio turnover rate(e) | 63 | % | 78 | % | 28 | % | 46 | % | 47 | % |
PowerShares Dynamic Consumer Discretionary Sector Portfolio (PEZ)
Year Ended April 30, | |||||||||||||||||||||||
2013 | 2012 | 2011 | 2010 | 2009 | |||||||||||||||||||
PER SHARE OPERATING PERFORMANCE: | |||||||||||||||||||||||
Net asset value at beginning of year | $ | 29.90 | $ | 27.54 | $ | 23.72 | $ | 17.07 | $ | 22.45 | |||||||||||||
Net investment income(a) | 0.39 | 0.18 | 0.20 | 0.06 | 0.13 | ||||||||||||||||||
Net realized and unrealized gain (loss) on investments | 4.24 | 2.37 | 3.79 | 6.65 | (5.35 | ) | |||||||||||||||||
Total from investment operations | 4.63 | 2.55 | 3.99 | 6.71 | (5.22 | ) | |||||||||||||||||
Distributions to shareholders from: | |||||||||||||||||||||||
Net investment income | (0.34 | ) | (0.19 | ) | (0.17 | ) | (0.06 | ) | (0.15 | ) | |||||||||||||
Return of capital | — | — | — | — | (0.01 | ) | |||||||||||||||||
Total distributions | (0.34 | ) | (0.19 | ) | (0.17 | ) | (0.06 | ) | (0.16 | ) | |||||||||||||
Net asset value at end of year | $ | 34.19 | $ | 29.90 | $ | 27.54 | $ | 23.72 | $ | 17.07 | |||||||||||||
Market price at end of year(c) | $ | 34.16 | $ | 29.89 | $ | 27.53 | $ | 23.74 | $ | 17.07 | |||||||||||||
NET ASSET VALUE, TOTAL RETURN(d) | 15.67 | % | 9.41 | % | 16.91 | % | 39.37 | % | (23.19 | )% | |||||||||||||
MARKET PRICE TOTAL RETURN(d) | 15.60 | % | 9.41 | % | 16.77 | % | 39.49 | % | (23.22 | )% | |||||||||||||
RATIOS/SUPPLEMENTAL DATA: | |||||||||||||||||||||||
Net assets at end of year (000's omitted) | $ | 23,933 | $ | 19,437 | $ | 20,657 | $ | 21,345 | $ | 13,658 | |||||||||||||
Ratio to average net assets of: | |||||||||||||||||||||||
Expenses, after Waivers | 0.65 | % | 0.65 | % | 0.65 | % | 0.65 | % | 0.64 | % | |||||||||||||
Expenses, prior to Waivers | 0.93 | % | 1.19 | % | 1.24 | % | 1.32 | % | 1.68 | % | |||||||||||||
Net investment income, after Waivers | 1.29 | % | 0.69 | % | 0.86 | % | 0.31 | % | 0.81 | % | |||||||||||||
Portfolio turnover rate(e) | 130 | % | 88 | % | 68 | % | 86 | % | 157 | % |
(a) Based on average shares outstanding.
(b) Net investment income per share and the ratio of net investment income to average net assets include a special cash dividend received of $1.65 per share owned of Weyerhaeuser Co. on July 20, 2010. Net investment income per share and the ratio of net investment income to average net assets excluding the special dividend are $0.26 and 0.78%, respectively.
(c) The mean between the last bid and ask prices.
(d) Net asset value total 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. Market price total return is calculated assuming an initial investment made at the market price at the beginning of the period, reinvestment of all dividends and distributions at market price during the period, and sale at the market price on the last day of the period. Total investment returns calculated for a period of less than one year are not annualized.
(e) Portfolio turnover rate is not annualized and does not include securities received or delivered from processing creations or redemptions.
See Notes to Financial Statements.
68
Financial Highlights (Continued)
PowerShares Dynamic Consumer Staples Sector Portfolio (PSL)
Year Ended April 30, | |||||||||||||||||||||||
2013 | 2012 | 2011 | 2010 | 2009 | |||||||||||||||||||
PER SHARE OPERATING PERFORMANCE: | |||||||||||||||||||||||
Net asset value at beginning of year | $ | 32.61 | $ | 31.36 | $ | 26.74 | $ | 20.81 | $ | 26.75 | |||||||||||||
Net investment income(a) | 0.66 | 0.48 | 0.52 | 0.36 | 0.45 | ||||||||||||||||||
Net realized and unrealized gain (loss) on investments | 7.13 | 1.22 | 4.61 | 5.99 | (6.04 | ) | |||||||||||||||||
Total from investment operations | 7.79 | 1.70 | 5.13 | 6.35 | (5.59 | ) | |||||||||||||||||
Distributions to shareholders from: | |||||||||||||||||||||||
Net investment income | (0.71 | ) | (0.45 | ) | (0.51 | ) | (0.42 | ) | (0.35 | ) | |||||||||||||
Net asset value at end of year | $ | 39.69 | $ | 32.61 | $ | 31.36 | $ | 26.74 | $ | 20.81 | |||||||||||||
Market price at end of year(b) | $ | 39.67 | $ | 32.60 | $ | 31.37 | $ | 26.74 | $ | 20.79 | |||||||||||||
NET ASSET VALUE, TOTAL RETURN(c) | 24.29 | % | 5.53 | % | 19.46 | % | 30.87 | % | (21.02 | )% | |||||||||||||
MARKET PRICE TOTAL RETURN(c) | 24.27 | % | 5.47 | % | 19.50 | % | 30.99 | % | (21.09 | )% | |||||||||||||
RATIOS/SUPPLEMENTAL DATA: | |||||||||||||||||||||||
Net assets at end of year (000's omitted) | $ | 37,708 | $ | 39,131 | $ | 40,772 | $ | 38,772 | $ | 37,453 | |||||||||||||
Ratio to average net assets of: | |||||||||||||||||||||||
Expenses, after Waivers | 0.65 | % | 0.65 | % | 0.65 | % | 0.65 | % | 0.65 | % | |||||||||||||
Expenses, prior to Waivers | 0.82 | % | 0.89 | % | 0.94 | % | 0.87 | % | 0.94 | % | |||||||||||||
Net investment income, after Waivers | 1.94 | % | 1.54 | % | 1.91 | % | 1.50 | % | 2.07 | % | |||||||||||||
Portfolio turnover rate(d) | 57 | % | 35 | % | 54 | % | 67 | % | 48 | % |
PowerShares Dynamic Energy Sector Portfolio (PXI)
Year Ended April 30, | |||||||||||||||||||||||
2013 | 2012 | 2011 | 2010 | 2009 | |||||||||||||||||||
PER SHARE OPERATING PERFORMANCE: | |||||||||||||||||||||||
Net asset value at beginning of year | $ | 40.45 | $ | 44.63 | $ | 29.75 | $ | 19.91 | $ | 38.80 | |||||||||||||
Net investment income(a) | 0.47 | 0.21 | 0.32 | 0.20 | 0.18 | ||||||||||||||||||
Net realized and unrealized gain (loss) on investments | 8.13 | (4.15 | ) | 14.77 | 9.87 | (18.93 | ) | ||||||||||||||||
Total from investment operations | 8.60 | (3.94 | ) | 15.09 | 10.07 | (18.75 | ) | ||||||||||||||||
Distributions to shareholders from: | |||||||||||||||||||||||
Net investment income | (0.66 | ) | (0.24 | ) | (0.21 | ) | (0.23 | ) | (0.14 | ) | |||||||||||||
Net asset value at end of year | $ | 48.39 | $ | 40.45 | $ | 44.63 | $ | 29.75 | $ | 19.91 | |||||||||||||
Market price at end of year(b) | $ | 48.36 | $ | 40.47 | $ | 44.65 | $ | 29.75 | $ | 19.92 | |||||||||||||
NET ASSET VALUE, TOTAL RETURN(c) | 21.48 | % | (8.79 | )% | 51.01 | % | 50.81 | % | (48.52 | )% | |||||||||||||
MARKET PRICE TOTAL RETURN(c) | 21.35 | % | (8.78 | )% | 51.07 | % | 50.73 | % | (48.44 | )% | |||||||||||||
RATIOS/SUPPLEMENTAL DATA: | |||||||||||||||||||||||
Net assets at end of year (000's omitted) | $ | 137,916 | $ | 141,562 | $ | 191,903 | $ | 38,671 | $ | 25,878 | |||||||||||||
Ratio to average net assets of: | |||||||||||||||||||||||
Expenses, after Waivers | 0.66 | % | 0.65 | % | 0.65 | % | 0.65 | % | 0.65 | % | |||||||||||||
Expenses, prior to Waivers | 0.69 | % | 0.66 | % | 0.74 | % | 0.93 | % | 0.98 | % | |||||||||||||
Net investment income, after Waivers | 1.10 | % | 0.54 | % | 0.90 | % | 0.79 | % | 0.65 | % | |||||||||||||
Portfolio turnover rate(d) | 80 | % | 107 | % | 35 | % | 63 | % | 67 | % |
(a) Based on average shares outstanding.
(b) The mean between the last bid and ask prices.
(c) Net asset value total 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. Market price total return is calculated assuming an initial investment made at the market price at the beginning of the period, reinvestment of all dividends and distributions at market price during the period, and sale at the market price on the last day of the period. Total investment returns calculated for a period of less than one year are not annualized.
(d) Portfolio turnover rate is not annualized and does not include securities received or delivered from processing creations or redemptions.
See Notes to Financial Statements.
69
Financial Highlights (Continued)
PowerShares Dynamic Financial Sector Portfolio (PFI)
Year Ended April 30, | |||||||||||||||||||||||
2013 | 2012 | 2011 | 2010 | 2009 | |||||||||||||||||||
PER SHARE OPERATING PERFORMANCE: | |||||||||||||||||||||||
Net asset value at beginning of year | $ | 20.08 | $ | 20.45 | $ | 18.46 | $ | 14.63 | $ | 22.94 | |||||||||||||
Net investment income(a) | 0.35 | 0.25 | 0.27 | 0.21 | 0.24 | ||||||||||||||||||
Net realized and unrealized gain (loss) on investments | 3.83 | (0.42 | ) | 2.04 | 3.84 | (8.33 | ) | ||||||||||||||||
Total from investment operations | 4.18 | (0.17 | ) | 2.31 | 4.05 | (8.09 | ) | ||||||||||||||||
Distributions to shareholders from: | |||||||||||||||||||||||
Net investment income | (0.34 | ) | (0.20 | ) | (0.32 | ) | (0.22 | ) | (0.22 | ) | |||||||||||||
Net asset value at end of year | $ | 23.92 | $ | 20.08 | $ | 20.45 | $ | 18.46 | $ | 14.63 | |||||||||||||
Market price at end of year(b) | $ | 23.90 | $ | 20.07 | $ | 20.44 | $ | 18.45 | $ | 14.60 | |||||||||||||
NET ASSET VALUE, TOTAL RETURN(c) | 21.07 | % | (0.66 | )% | 12.76 | % | 27.90 | % | (35.53 | )% | |||||||||||||
MARKET PRICE TOTAL RETURN(c) | 21.03 | % | (0.66 | )% | 12.77 | % | 28.09 | % | (35.66 | )% | |||||||||||||
RATIOS/SUPPLEMENTAL DATA: | |||||||||||||||||||||||
Net assets at end of year (000's omitted) | $ | 20,330 | $ | 18,071 | $ | 22,492 | $ | 17,539 | $ | 14,630 | |||||||||||||
Ratio to average net assets of: | |||||||||||||||||||||||
Expenses, after Waivers(d) | 0.66 | % | 0.65 | % | 0.65 | % | 0.65 | % | 0.65 | % | |||||||||||||
Expenses, prior to Waivers | 1.10 | % | 1.21 | % | 1.30 | % | 1.25 | % | 1.13 | % | |||||||||||||
Net investment income, after Waivers | 1.66 | % | 1.33 | % | 1.50 | % | 1.26 | % | 1.27 | % | |||||||||||||
Portfolio turnover rate(e) | 118 | % | 102 | % | 59 | % | 97 | % | 66 | % |
PowerShares Dynamic Healthcare Sector Portfolio (PTH)
Year Ended April 30, | |||||||||||||||||||||||
2013 | 2012 | 2011 | 2010 | 2009 | |||||||||||||||||||
PER SHARE OPERATING PERFORMANCE: | |||||||||||||||||||||||
Net asset value at beginning of year | $ | 32.29 | $ | 31.41 | $ | 25.68 | $ | 17.89 | $ | 25.87 | |||||||||||||
Net investment income (loss)(a) | 0.43 | 0.02 | (0.05 | ) | 0.03 | 0.02 | |||||||||||||||||
Net realized and unrealized gain (loss) on investments | 6.39 | 0.86 | 5.78 | 7.84 | (8.00 | ) | |||||||||||||||||
Total from investment operations | 6.82 | 0.88 | 5.73 | 7.87 | (7.98 | ) | |||||||||||||||||
Distributions to shareholders from: | |||||||||||||||||||||||
Net investment income | (0.35 | ) | — | — | (0.05 | ) | — | ||||||||||||||||
Return of capital | — | — | — | (0.03 | ) | — | |||||||||||||||||
Total distributions | (0.35 | ) | — | — | (0.08 | ) | — | ||||||||||||||||
Net asset value at end of year | $ | 38.76 | $ | 32.29 | $ | 31.41 | $ | 25.68 | $ | 17.89 | |||||||||||||
Market price at end of year(b) | $ | 38.69 | $ | 32.30 | $ | 31.44 | $ | 25.67 | $ | 17.86 | |||||||||||||
NET ASSET VALUE, TOTAL RETURN(c) | 21.31 | % | 2.80 | % | 22.31 | % | 44.09 | % | (30.85 | )% | |||||||||||||
MARKET PRICE TOTAL RETURN(c) | 21.06 | % | 2.74 | % | 22.48 | % | 44.28 | % | (30.94 | )% | |||||||||||||
RATIOS/SUPPLEMENTAL DATA: | |||||||||||||||||||||||
Net assets at end of year (000's omitted) | $ | 60,071 | $ | 37,134 | $ | 62,822 | $ | 97,598 | $ | 71,576 | |||||||||||||
Ratio to average net assets of: | |||||||||||||||||||||||
Expenses, after Waivers | 0.65 | % | 0.65 | % | 0.65 | % | 0.65 | % | 0.65 | % | |||||||||||||
Expenses, prior to Waivers | 0.74 | % | 0.82 | % | 0.84 | % | 0.72 | % | 0.71 | % | |||||||||||||
Net investment income (loss), after Waivers | 1.26 | % | 0.05 | % | (0.21 | )% | 0.13 | % | 0.10 | % | |||||||||||||
Portfolio turnover rate(e) | 93 | % | 99 | % | 63 | % | 79 | % | 96 | % |
(a) Based on average shares outstanding.
(b) The mean between the last bid and ask prices.
(c) Net asset value total 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. Market price total return is calculated assuming an initial investment made at the market price at the beginning of the period, reinvestment of all dividends and distributions at market price during the period, and sale at the market price on the last day of the period. Total investment returns calculated for a period of less than one year are not annualized.
(d) In addition to the fees and expenses which the Fund bears directly, the Fund indirectly bears a pro rata share of the fees and expenses of the investment companies in which the Fund invests. Estimated investment company expenses are not expenses that are incurred directly by the Fund. They are expenses that are incurred directly by the investment companies and are deducted from the value of the funds that the Fund invests in. The effect of the estimated investment company expenses that the Fund bears indirectly is included in the Fund's total return.
(e) Portfolio turnover rate is not annualized and does not include securities received or delivered from processing creations or redemptions.
See Notes to Financial Statements.
70
Financial Highlights (Continued)
PowerShares Dynamic Industrials Sector Portfolio (PRN)
Year Ended April 30, | |||||||||||||||||||||||
2013 | 2012 | 2011 | 2010 | 2009 | |||||||||||||||||||
PER SHARE OPERATING PERFORMANCE: | |||||||||||||||||||||||
Net asset value at beginning of year | $ | 30.02 | $ | 32.47 | $ | 25.21 | $ | 18.85 | $ | 30.33 | |||||||||||||
Net investment income(a) | 0.52 | 0.22 | 0.17 | 0.20 | 0.22 | ||||||||||||||||||
Net realized and unrealized gain (loss) on investments | 6.89 | (2.48 | ) | 7.29 | 6.48 | (11.55 | ) | ||||||||||||||||
Total from investment operations | 7.41 | (2.26 | ) | 7.46 | 6.68 | (11.33 | ) | ||||||||||||||||
Distributions to shareholders from: | |||||||||||||||||||||||
Net investment income | (0.65 | ) | (0.19 | ) | (0.20 | ) | (0.32 | ) | (0.15 | ) | |||||||||||||
Return of capital | (0.04 | ) | — | — | — | — | |||||||||||||||||
Total distributions | (0.69 | ) | (0.19 | ) | (0.20 | ) | (0.32 | ) | (0.15 | ) | |||||||||||||
Net asset value at end of year | $ | 36.74 | $ | 30.02 | $ | 32.47 | $ | 25.21 | $ | 18.85 | |||||||||||||
Market price at end of year(b) | $ | 36.72 | $ | 30.00 | $ | 32.48 | $ | 25.20 | $ | 18.82 | |||||||||||||
NET ASSET VALUE, TOTAL RETURN(c) | 25.18 | % | (6.91 | )% | 29.83 | % | 35.73 | % | (37.41 | )% | |||||||||||||
MARKET PRICE TOTAL RETURN(c) | 25.19 | % | (7.00 | )% | 29.92 | % | 35.89 | % | (37.51 | )% | |||||||||||||
RATIOS/SUPPLEMENTAL DATA: | |||||||||||||||||||||||
Net assets at end of year (000's omitted) | $ | 38,573 | $ | 30,017 | $ | 113,629 | $ | 32,779 | $ | 60,324 | |||||||||||||
Ratio to average net assets of: | |||||||||||||||||||||||
Expenses, after Waivers | 0.65 | % | 0.65 | % | 0.65 | % | 0.65 | % | 0.65 | % | |||||||||||||
Expenses, prior to Waivers | 0.92 | % | 0.80 | % | 0.88 | % | 0.82 | % | 0.81 | % | |||||||||||||
Net investment income, after Waivers | 1.65 | % | 0.77 | % | 0.62 | % | 0.93 | % | 1.05 | % | |||||||||||||
Portfolio turnover rate(d) | 116 | % | 129 | % | 48 | % | 121 | % | 81 | % |
PowerShares Dynamic Technology Sector Portfolio (PTF)
Year Ended April 30, | |||||||||||||||||||||||
2013 | 2012 | 2011 | 2010 | 2009 | |||||||||||||||||||
PER SHARE OPERATING PERFORMANCE: | |||||||||||||||||||||||
Net asset value at beginning of year | $ | 27.29 | $ | 27.66 | $ | 23.60 | $ | 17.29 | $ | 24.83 | |||||||||||||
Net investment income (loss)(a) | 0.17 | 0.01 | (0.02 | ) | (0.05 | ) | (0.01 | ) | |||||||||||||||
Net realized and unrealized gain (loss) on investments | 1.88 | (0.38 | ) | 4.09 | 6.36 | (7.53 | ) | ||||||||||||||||
Total from investment operations | 2.05 | (0.37 | ) | 4.07 | 6.31 | (7.54 | ) | ||||||||||||||||
Distributions to shareholders from: | |||||||||||||||||||||||
Net investment income | (0.20 | ) | — | — | — | — | |||||||||||||||||
Return of capital | — | — | (0.01 | ) | — | — | |||||||||||||||||
Total distributions | (0.20 | ) | — | (0.01 | ) | — | — | ||||||||||||||||
Net asset value at end of year | $ | 29.14 | $ | 27.29 | $ | 27.66 | $ | 23.60 | $ | 17.29 | |||||||||||||
Market price at end of year(b) | $ | 29.06 | $ | 27.28 | $ | 27.65 | $ | 23.59 | $ | 17.29 | |||||||||||||
NET ASSET VALUE, TOTAL RETURN(c) | 7.59 | % | (1.34 | )% | 17.26 | % | 36.50 | % | (30.37 | )% | |||||||||||||
MARKET PRICE TOTAL RETURN(c) | 7.34 | % | (1.34 | )% | 17.27 | % | 36.44 | % | (30.31 | )% | |||||||||||||
RATIOS/SUPPLEMENTAL DATA: | |||||||||||||||||||||||
Net assets at end of year (000's omitted) | $ | 32,053 | $ | 31,387 | $ | 49,793 | $ | 38,942 | $ | 25,932 | |||||||||||||
Ratio to average net assets of: | |||||||||||||||||||||||
Expenses, after Waivers | 0.65 | % | 0.65 | % | 0.65 | % | 0.65 | % | 0.65 | % | |||||||||||||
Expenses, prior to Waivers | 0.89 | % | 0.94 | % | 0.91 | % | 0.90 | % | 0.89 | % | |||||||||||||
Net investment income (loss), after Waivers | 0.63 | % | 0.03 | % | (0.07 | )% | (0.24 | )% | (0.04 | )% | |||||||||||||
Portfolio turnover rate(d) | 95 | % | 108 | % | 67 | % | 71 | % | 90 | % |
(a) Based on average shares outstanding.
(b) The mean between the last bid and ask prices.
(c) Net asset value total 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. Market price total return is calculated assuming an initial investment made at the market price at the beginning of the period, reinvestment of all dividends and distributions at market price during the period, and sale at the market price on the last day of the period. Total investment return calculated for a period of less than one year are not annualized.
(d) Portfolio turnover rate is not annualized and does not include securities received or delivered from processing creations or redemptions.
See Notes to Financial Statements.
71
Financial Highlights (Continued)
PowerShares Dynamic Utilities Portfolio (PUI)
Year Ended April 30, | |||||||||||||||||||||||
2013 | 2012 | 2011 | 2010 | 2009 | |||||||||||||||||||
PER SHARE OPERATING PERFORMANCE: | |||||||||||||||||||||||
Net asset value at beginning of year | $ | 16.69 | $ | 17.12 | $ | 14.96 | $ | 13.15 | $ | 19.01 | |||||||||||||
Net investment income(a) | 0.45 | 0.41 | 0.48 | 0.52 | 0.54 | ||||||||||||||||||
Net realized and unrealized gain (loss) on investments | 3.14 | (0.38 | ) | 2.19 | 2.04 | (5.95 | ) | ||||||||||||||||
Total from investment operations | 3.59 | 0.03 | 2.67 | 2.56 | (5.41 | ) | |||||||||||||||||
Distributions to shareholders from: | |||||||||||||||||||||||
Net investment income | (0.46 | ) | (0.46 | ) | (0.51 | ) | (0.75 | ) | (0.45 | ) | |||||||||||||
Net asset value at end of year | $ | 19.82 | $ | 16.69 | $ | 17.12 | $ | 14.96 | $ | 13.15 | |||||||||||||
Market price at end of year(b) | $ | 19.79 | $ | 16.66 | $ | 17.13 | $ | 14.96 | $ | 13.13 | |||||||||||||
NET ASSET VALUE, TOTAL RETURN(c) | 21.90 | % | 0.26 | % | 18.36 | % | 19.79 | % | (29.00 | )% | |||||||||||||
MARKET PRICE TOTAL RETURN(c) | 21.94 | % | 0.02 | % | 18.42 | % | 19.97 | % | (29.11 | )% | |||||||||||||
RATIOS/SUPPLEMENTAL DATA: | |||||||||||||||||||||||
Net assets at end of year (000's omitted) | $ | 42,604 | $ | 43,393 | $ | 47,089 | $ | 38,139 | $ | 42,071 | |||||||||||||
Ratio to average net assets of: | |||||||||||||||||||||||
Expenses, after Waivers | 0.63 | % | 0.63 | % | 0.63 | % | 0.63 | % | 0.63 | % | |||||||||||||
Expenses, prior to Waivers | 0.81 | % | 0.77 | % | 0.89 | % | 0.95 | % | 0.82 | % | |||||||||||||
Net investment income, after Waivers | 2.54 | % | 2.45 | % | 3.12 | % | 3.71 | % | 3.44 | % | |||||||||||||
Portfolio turnover rate(d) | 48 | % | 71 | % | 68 | % | 81 | % | 68 | % |
PowerShares NASDAQ Internet Portfolio (PNQI)
Year Ended April 30, | For the Period June 10, 2008 (e) Through | ||||||||||||||||||||||
2013 | 2012 | 2011 | 2010 | April 30, 2009 | |||||||||||||||||||
PER SHARE OPERATING PERFORMANCE: | |||||||||||||||||||||||
Net asset value at beginning of period | $ | 41.08 | $ | 41.37 | $ | 27.99 | $ | 17.89 | $ | 24.72 | |||||||||||||
Net investment income (loss)(a) | (0.01 | ) | (0.08 | ) | (0.06 | ) | (0.12 | ) | (0.08 | ) | |||||||||||||
Net realized and unrealized gain (loss) on investments | 5.04 | (0.21 | ) | 13.44 | 10.22 | (6.74 | ) | ||||||||||||||||
Total from investment operations | 5.03 | (0.29 | ) | 13.38 | 10.10 | (6.82 | ) | ||||||||||||||||
Distributions to shareholders from: | |||||||||||||||||||||||
Net investment income | (0.02 | ) | — | — | — | — | |||||||||||||||||
Return of capital | — | — | — | — | (0.01 | ) | |||||||||||||||||
Total distributions | (0.02 | ) | — | — | — | (0.01 | ) | ||||||||||||||||
Net asset value at end of period | $ | 46.09 | $ | 41.08 | $ | 41.37 | $ | 27.99 | $ | 17.89 | |||||||||||||
Market price at end of period(b) | $ | 46.08 | $ | 41.08 | $ | 41.40 | $ | 28.01 | $ | 17.88 | |||||||||||||
NET ASSET VALUE, TOTAL RETURN(c) | 12.26 | % | (0.70 | )% | 47.80 | % | 56.46 | % | (27.56 | )%(f) | |||||||||||||
MARKET PRICE TOTAL RETURN(c) | 12.23 | % | (0.77 | )% | 47.81 | % | 56.65 | % | (27.60 | )%(f) | |||||||||||||
RATIOS/SUPPLEMENTAL DATA: | |||||||||||||||||||||||
Net assets at end of period (000's omitted) | $ | 64,525 | $ | 63,678 | $ | 45,507 | $ | 15,396 | $ | 1,789 | |||||||||||||
Ratio to average net assets of: | |||||||||||||||||||||||
Expenses | 0.60 | % | 0.60 | % | 0.60 | % | 0.60 | % | 0.60 | %(g) | |||||||||||||
Net investment income (loss) | (0.02 | )% | (0.22 | )% | (0.17 | )% | (0.46 | )% | (0.51 | )%(g) | |||||||||||||
Portfolio turnover rate(d) | 20 | % | 23 | % | 20 | % | 23 | % | 25 | % |
(a) Based on average shares outstanding.
(b) The mean between the last bid and ask prices.
(c) Net asset value total 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. Market price total return is calculated assuming an initial investment made at the market price at the beginning of the period, reinvestment of all dividends and distributions at market price during the period, and sale at the market price on the last day of the period. Total investment returns calculated for a period of less than one year are not annualized.
(d) Portfolio turnover rate is not annualized and does not include securities received or delivered from processing creations or redemptions.
(e) Commencement of Investment Operations.
(f) The net asset value, total return from Fund Inception (June 12, 2008, the first day of trading on the Exchange) to April 30, 2009 was (25.33)%. The market price total return from Fund Inception to April 30, 2009 was (26.53)%.
(g) Annualized.
See Notes to Financial Statements.
72
Notes to Financial Statements
PowerShares Exchange-Traded Fund Trust
April 30, 2013
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 April 30, 2013, the Trust offered fifty-five portfolios. This report includes the following portfolios:
Full Name | Short Name | ||||||
PowerShares Dynamic Basic Materials Sector Portfolio (PYZ) | "Dynamic Basic Materials Sector Portfolio" | ||||||
PowerShares Dynamic Consumer Discretionary Sector Portfolio (PEZ) | "Dynamic Consumer Discretionary Sector Portfolio" | ||||||
PowerShares Dynamic Consumer Staples Sector Portfolio (PSL) | "Dynamic Consumer Staples Sector Portfolio" | ||||||
PowerShares Dynamic Energy Sector Portfolio (PXI) | "Dynamic Energy Sector Portfolio" | ||||||
PowerShares Dynamic Financial Sector Portfolio (PFI) | "Dynamic Financial Sector Portfolio" | ||||||
PowerShares Dynamic Healthcare Sector Portfolio (PTH) | "Dynamic Healthcare Sector Portfolio" | ||||||
PowerShares Dynamic Industrials Sector Portfolio (PRN) | "Dynamic Industrials Sector Portfolio" | ||||||
PowerShares Dynamic Technology Sector Portfolio (PTF) | "Dynamic Technology Sector Portfolio" | ||||||
PowerShares Dynamic Utilities Portfolio (PUI) | "Dynamic Utilities Portfolio" | ||||||
PowerShares NASDAQ Internet Portfolio (PNQI) | "NASDAQ Internet Portfolio" |
Each portfolio (each, a "Fund" and collectively, the "Funds") represents a separate series of the Trust. The shares of the Funds are referred to herein as "Shares" or "Fund's Shares." Each Fund's Shares are listed and traded on NYSE Arca, Inc. ("NYSE Arca"), except for Shares of NASDAQ Internet Portfolio, which is listed and traded on The NASDAQ Stock Market LLC.
The market prices of each Fund's Shares may differ to some degree from the Fund's net asset value ("NAV"). Unlike conventional mutual funds, each Fund issues and redeems Shares on a continuous basis, at NAV, 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 each Fund's relevant index. Except when aggregated in Creation Units by Authorized Participants, the Shares are not individually redeemable securities of the Funds.
The investment objective of each Fund is to seek investment results that generally correspond (before fees and expenses) to the price and yield of its respective index listed below (each, an "Underlying Index"):
Fund | Index | ||||||
Dynamic Basic Materials Sector Portfolio | Dynamic Basic Materials Sector IntellidexSM Index | ||||||
Dynamic Consumer Discretionary Sector Portfolio | Dynamic Consumer Discretionary Sector IntellidexSM Index | ||||||
Dynamic Consumer Staples Sector Portfolio | Dynamic Consumer Staples Sector IntellidexSM Index | ||||||
Dynamic Energy Sector Portfolio | Dynamic Energy Sector IntellidexSM Index |
73
Notes to Financial Statements (Continued)
PowerShares Exchange-Traded Fund Trust
April 30, 2013
Fund | Index | ||||||
Dynamic Financial Sector Portfolio | Dynamic Financial Sector IntellidexSM Index | ||||||
Dynamic Healthcare Sector Portfolio | Dynamic Healthcare Sector IntellidexSM Index | ||||||
Dynamic Industrials Sector Portfolio | Dynamic Industrials Sector IntellidexSM Index | ||||||
Dynamic Technology Sector Portfolio | Dynamic Technology Sector IntellidexSM Index | ||||||
Dynamic Utilities Portfolio | Dynamic Utilities IntellidexSM Index | ||||||
NASDAQ Internet Portfolio | NASDAQ Internet IndexSM |
Note 2. Significant Accounting Policies
The preparation of the financial statements in accordance with accounting principles generally accepted in the United States of America ("GAAP") 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. In addition, the Funds monitor for material events or transactions that may occur or become known after the period-end date and before the date the financial statements are released to print.
A. Security Valuation
Securities, including restricted securities, are valued according to the following policies.
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 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 and closed-end registered investment companies that do not trade on an exchange are valued at the end of day net asset value per share. Investments in open-end and closed-end registered investment companies that trade on an exchange are valued at the 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.
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 (for unlisted equities), yield (for debt obligations), quality, type of issue, coupon rate (for debt obligations), maturity (for debt obligations), individual trading characteristics and other market data. Securities with a demand feature exercisable within one to seven days are valued at par. Debt obligations are subject to interest rate and credit risks. In addition, all debt obligations involve some risk of default with respect to interest and/or principal payments.
Foreign securities' (including foreign exchange contracts) prices 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
74
Notes to Financial Statements (Continued)
PowerShares Exchange-Traded Fund Trust
April 30, 2013
market quotations. Because trading hours for certain foreign securities end before the close of the New York Stock Exchange ("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 the Adviser determines are significant and 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 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' prices 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, American Depositary Receipts 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 became unreliable are valued at fair value as determined in good faith 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. Because of the inherent uncertainties of valuation, the values reflected in the financial statements may materially differ from the value received upon actual sale of those investments.
B. Other Risks
Index Risk. Unlike many investment companies, the Funds do not utilize an investing strategy that seeks returns in excess of each Fund's respective Underlying Index. Therefore, a Fund would not necessarily buy or sell a security unless that security is added or removed, respectively, from its respective Underlying Index, even if that security generally is underperforming.
Equity Risk. Equity risk is the risk that the value of the securities a Fund holds will fall due to general market and economic conditions, perceptions regarding the industries in which the issuers of securities a Fund holds participate or factors relating to specific companies in which a Fund invests. For example, an adverse event, such as an unfavorable earnings report, may depress the value of securities a Fund holds; the price of securities may be particularly sensitive to general movements in the stock market; or a drop in the stock market may depress the price of most or all of the securities a Fund holds. In addition, securities of an issuer in a Fund's portfolio may decline in price if the issuer fails to make anticipated dividend payments because, among other reasons, the issuer of the security experiences a decline in its financial condition.
75
Notes to Financial Statements (Continued)
PowerShares Exchange-Traded Fund Trust
April 30, 2013
Industry Concentration Risk. In following its methodology, each Fund's Underlying Index from time to time may be concentrated to a significant degree in securities of issuers located in a single industry or a sector. To the extent that an Underlying Index concentrates in the securities of issuers in a particular industry or sector, each Fund will also concentrate its investments to approximately the same extent. By concentrating its investments in an industry or sector, a Fund may face more risks than if it were diversified broadly over numerous industries or sectors. In addition, at times, an industry or sector may be out of favor and underperform other industries or the market as a whole. Any factors detrimental to the performance of such industry or sector will disproportionately impact a Fund's NAV.
Non-Diversified Fund Risk. NASDAQ Internet Portfolio is non-diversified and can invest a greater portion of assets in securities of individual issuers than diversified funds. 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. This may increase the Fund's volatility and cause the performance of a relatively small number of issuers to have a greater impact on the Fund's performance.
Non-Correlation Risk. Each Fund's return may not match the return of its Underlying Index for a number of reasons. For example, each Fund incurs operating expenses not applicable to its Underlying Index, and incurs costs in buying and selling securities, especially when rebalancing the securities holdings to reflect changes in the composition of its Underlying Index. In addition, the performance of each Fund and its Underlying Index may vary due to asset valuation differences and differences between each Fund's portfolio and its Underlying Index resulting from legal restrictions, cost or liquidity constraints.
Small and Medium Capitalization Company Risk. Investing in securities of small and medium capitalization companies involves greater risk than customarily is associated with investing in larger, more established companies. These companies' securities may be more volatile and less liquid than those of more established companies. These securities may have returns that vary, sometimes significantly, from the overall securities market. Often small and medium capitalization companies and the industries in which they focus are still evolving and, as a result, they may be more sensitive to changing market conditions.
C. Federal Income Taxes
Each Fund intends to comply with the provisions of the Internal Revenue Code of 1986, as amended (the "Internal Revenue Code"), applicable to regulated investment companies and to 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 recorded in the financial statements.
Income and capital gain distributions are determined in accordance with federal income tax regulations, which may differ from GAAP. These timing 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 U.S. federal tax returns and tax returns in 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 Transactions and Investment Income
Investment transactions are accounted for on a trade date basis. Realized gains and losses from the sale or disposition of securities are computed on the specific identified cost basis. Interest income is recorded on
76
Notes to Financial Statements (Continued)
PowerShares Exchange-Traded Fund Trust
April 30, 2013
the accrual basis. Dividend income (net of withholding tax, if any) is recorded on the ex-dividend date. Dividends and interest received by a 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.
Corporate actions (including cash dividends) are recorded net of non-reclaimable foreign tax withholdings on the ex-dividend date.
E. Expenses
Expenses of the Trust that are directly identifiable to a specific Fund are applied to that Fund. Expenses of the Trust that 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 NASDAQ Internet 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, sub-licensing fees related to its respective Underlying Index, any distribution fees or expenses, litigation expenses, fees payable to the Trust's Board members who are not "interested persons" (as defined in the 1940 Act) of the Trust (the "Independent Trustees") or Invesco PowerShares Capital Management LLC (the "Adviser"), expenses incurred in connection with the Board members' services, including travel expenses and legal fees of counsel for the Independent Trustees, acquired fund fees and expenses, if any and extraordinary expenses.
NASDAQ Internet Portfolio has agreed to pay an annual unitary management fee to the Adviser. The Adviser has agreed to pay for substantially all expenses of the Fund, including the cost of transfer agency, custody, fund administration, legal, audit and other services, except for advisory fees, distribution fees, if any, brokerage expenses, taxes, interest, litigation expenses, acquired fund fees and expenses, if any, and other extraordinary expenses.
To the extent a Fund invests in other investment companies, the expenses shown in the accompanying financial statements reflect the expenses of the Fund and do not include any expenses of the investment companies in which it invests. The effects of such investment companies' expenses are included in the realized and unrealized gain or loss on the investments in the investment companies.
F. Dividends and Distributions to Shareholders
Each Fund declares and pays dividends from net investment income, if any, to its shareholders quarterly and records such dividends on ex-dividend date. Generally, each Fund distributes net realized taxable capital gains, if any, annually in cash and records them on ex-dividend date. Such distributions on a tax basis are determined in conformity with federal income tax regulations, which may differ from GAAP. 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. Change in Accounting Policy – Equalization
The Funds previously followed the accounting practice known as equalization. Equalization accounting is utilized for book purposes to keep the continuing shareholders' per share equity in undistributed net investment income from being affected by the continuous sales and redemptions of capital shares. During the fiscal year ended April 30, 2013, all Funds discontinued the practice of equalization accounting for book purposes. The prior period financial statements have been restated to reflect the accounting change.
77
Notes to Financial Statements (Continued)
PowerShares Exchange-Traded Fund Trust
April 30, 2013
The change in policy has been accounted for in accordance with ASC 250 "Accounting Changes and Error Corrections." The change was implemented for consistent application of book and tax treatment related to the Funds' distributions. The result of the policy change did not have an impact on the Funds' net assets, net increase/decrease in net assets resulting from operations or per share net asset value. Additionally, the change does not have an impact on the amount or tax character of a Fund's distributions to shareholders or net asset value total return.
For financial reporting purposes, the amounts were reported in the Statements of Changes in Net Assets as "Undistributed net investment income (loss) included in the price of units issued and redeemed" as a component of the "Net increase (decrease) in net assets resulting from operations" with an offsetting amount included in "Net income (loss) equalization" included in the subtotal "Net increase (decrease) in net assets resulting from share transactions." The amount of equalization charges or credits previously reported and the amount in the current period had the change not been made were as follows:
Statements of Changes in Net Assets | |||||||||||
Net income (loss) equalization* | |||||||||||
For the year ended April 30, 2013 | For the year ended April 30, 2012 | ||||||||||
Dynamic Basic Materials Sector Portfolio | $ | (30,704 | ) | $ | 169,953 | ||||||
Dynamic Consumer Discretionary Sector Portfolio | 25,919 | (11,525 | ) | ||||||||
Dynamic Consumer Staples Sector Portfolio | 63,706 | 24,783 | |||||||||
Dynamic Energy Sector Portfolio | 199,549 | 89,274 | |||||||||
Dynamic Financial Sector Portfolio | 5,221 | 4,825 | |||||||||
Dynamic Healthcare Sector Portfolio | (41,271 | ) | (5,884 | ) | |||||||
Dynamic Industrials Sector Portfolio | 447 | (23,686 | ) | ||||||||
Dynamic Technology Sector Portfolio | 2,778 | (66,735 | ) | ||||||||
Dynamic Utilities Portfolio | (47,963 | ) | 132,362 | ||||||||
NASDAQ Internet Portfolio | (33,133 | ) | 55,608 |
* An equal offsetting amount was made to the operations section of the Statement of Changes in Net Assets
The per share impact of the net equalization charges and credits disclosed in previous financial statements and the amount in the current period had the change not been made were as follows:
Financial Highlights | |||||||||||||||||||||||
For the Year Ended April 30, | |||||||||||||||||||||||
2013 | 2012 | 2011 | 2010 | 2009 | |||||||||||||||||||
Dynamic Basic Materials Sector Portfolio | $ | 0.02 | $ | (0.09 | ) | $ | 0.25 | $ | 0.04 | $ | (0.01 | ) | |||||||||||
Dynamic Consumer Discretionary Sector Portfolio | (0.03 | ) | 0.02 | 0.02 | (0.02 | ) | (0.09 | ) | |||||||||||||||
Dynamic Consumer Staples Sector Portfolio | (0.06 | ) | (0.02 | ) | (0.03 | ) | (0.06 | ) | 0.15 | ||||||||||||||
Dynamic Energy Sector Portfolio | (0.07 | ) | (0.02 | ) | 0.11 | (0.00 | ) | 0.03 | |||||||||||||||
Dynamic Financial Sector Portfolio | (0.01 | ) | (0.01 | ) | 0.00 | (0.00 | ) | 0.00 | |||||||||||||||
Dynamic Healthcare Sector Portfolio | 0.03 | 0.00 | 0.06 | 0.00 | 0.01 | ||||||||||||||||||
Dynamic Industrials Sector Portfolio | (0.00 | ) | 0.01 | (0.01 | ) | (0.06 | ) | 0.03 | |||||||||||||||
Dynamic Technology Sector Portfolio | (0.00 | ) | 0.05 | (0.01 | ) | (0.01 | ) | (0.02 | ) | ||||||||||||||
Dynamic Utilities Portfolio | 0.02 | (0.04 | ) | (0.01 | ) | (0.17 | ) | 0.00 |
78
Notes to Financial Statements (Continued)
PowerShares Exchange-Traded Fund Trust
April 30, 2013
For the Year Ended April 30, | For the Period June 10, 2008 through | ||||||||||||||||||||||
2013 | 2012 | 2011 | 2010 | April 30, 2009 | |||||||||||||||||||
NASDAQ Internet Portfolio | $ | 0.03 | $ | (0.04 | ) | $ | (0.10 | ) | $ | (0.13 | ) | $ | 0.00 |
H. Securities Lending
NASDAQ Internet Portfolio may lend portfolio securities having a market value up to one-third of the Fund's total assets. Such loans are secured by cash collateral equal to no less than 102% of the market value of the loaned securities determined daily by the securities lending provider. Cash collateral received in connection with these loans is invested in an affiliated money market fund and is shown as such on the Schedule of Investments. It is the policy of the Fund to obtain additional collateral from or return excess collateral to the borrower by the end of the next business day, following the valuation date of the securities loaned. Therefore, the value of the collateral held may be temporarily less than the value of the securities on loan. Lending securities entails a risk of loss to a Fund, if and to the extent that, the market value of the securities loaned were to increase, and the borrower did not increase the collateral accordingly, and the borrower fails to return the securities. Upon the failure of the borrower to return the securities, collateral may be liquidated and the securities may be purchased on the open market to replace the loaned securities. A Fund could experience delays and costs in gaining access to the collateral. A Fund bears the risk of any deficiency in the amount of the collateral available for return to the borrower due to any loss on the collateral invested. Dividends received on cash collateral investments for securities lending transactions, which are net of compensation to counterparties, are included in Securities lending income on the Statements of Operations. The aggregate value of securities out on loan is shown on the Statements of Assets and Liabilities, if any.
Note 3. Investment Advisory Agreement and Other Agreements
The Trust has entered into an Investment Advisory Agreement with the Adviser pursuant to which the Adviser has overall responsibility 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 (except for NASDAQ Internet Portfolio) has agreed to pay the Adviser an annual fee of 0.50% of the Fund's average daily net assets. NASDAQ Internet Portfolio has agreed to pay the Adviser an annual unitary management fee of 0.60% of the Fund's average daily net assets. The Adviser has agreed to pay for substantially all expenses of NASDAQ Internet Portfolio, including the cost of transfer agency, custody, fund administration, legal, audit and other services, except for advisory fees, distribution fees, if any, brokerage expenses, taxes, interest, litigation expenses, acquired fund fees and expenses, if any and other extraordinary expenses.
The Adviser has entered into an Amended and Restated Excess Expense Agreement (the "Expense Agreement") with the Trust, pursuant to which the Adviser has agreed to waive fees and/or pay Fund expenses to the extent necessary to prevent the operating expenses (excluding interest expenses, brokerage commissions and other trading expenses, sub-licensing fees, offering costs, taxes, acquired fund fees and expenses, if any and extraordinary expenses) of each Fund other than NASDAQ Internet Portfolio from exceeding 0.60% of the Fund's average daily net assets per year (the "Expense Cap"), through at least August 31, 2014. Offering costs excluded from the Expense Cap are: (a) initial legal fees pertaining to the Funds' Shares offered for sale; (b) initial Securities and Exchange Commission and state registration fees; and (c) initial fees paid to be listed on an exchange.
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Notes to Financial Statements (Continued)
PowerShares Exchange-Traded Fund Trust
April 30, 2013
The Expense Agreement provides that the fees waived or expenses borne by the Adviser are subject to recapture by the Adviser for up to three years from the date the fee was waived 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 Expense Agreement does not apply to NASDAQ Internet Portfolio.
The amounts available for potential future recapture by the Adviser under the Expense Agreement and the expiration schedule at April 30, 2013 are as follows:
Total Potential | Potential Recapture Amounts Expiring | ||||||||||||||||||
Recapture Amounts | 04/30/14 | 04/30/15 | 04/30/16 | ||||||||||||||||
Dynamic Basic Materials Sector Portfolio | $ | 214,983 | $ | 94,698 | $ | 73,906 | $ | 46,379 | |||||||||||
Dynamic Consumer Discretionary Sector Portfolio | 300,123 | 117,064 | 106,566 | 76,493 | |||||||||||||||
Dynamic Consumer Staples Sector Portfolio | 265,093 | 109,908 | 91,705 | 63,480 | |||||||||||||||
Dynamic Energy Sector Portfolio | 122,351 | 76,991 | 13,542 | 31,818 | |||||||||||||||
Dynamic Financial Sector Portfolio | 306,867 | 119,239 | 104,587 | 83,041 | |||||||||||||||
Dynamic Healthcare Sector Portfolio | 249,774 | 112,529 | 95,928 | 41,317 | |||||||||||||||
Dynamic Industrials Sector Portfolio | 269,998 | 106,180 | 81,718 | 82,100 | |||||||||||||||
Dynamic Technology Sector Portfolio | 268,905 | 102,827 | 93,489 | 72,589 | |||||||||||||||
Dynamic Utilities Portfolio | 256,528 | 107,230 | 77,540 | 71,758 |
The Trust has entered into a Distribution Agreement with Invesco Distributors, Inc. (the "Distributor"), which serves as the distributor of Creation Units for each Fund. The Distributor does not maintain a secondary market in the Shares. The Funds are not charged any fees pursuant to the Distribution Agreement. The Distributor is an affiliate of the Adviser.
The Adviser has entered into a licensing agreement for each Fund with the following entities (each a "Licensor"):
Fund | Licensor | ||||||
Dynamic Basic Materials Sector Portfolio | NYSE Arca | ||||||
Dynamic Consumer Discretionary Sector Portfolio | NYSE Arca | ||||||
Dynamic Consumer Staples Sector Portfolio | NYSE Arca | ||||||
Dynamic Energy Sector Portfolio | NYSE Arca | ||||||
Dynamic Financial Sector Portfolio | NYSE Arca | ||||||
Dynamic Healthcare Sector Portfolio | NYSE Arca | ||||||
Dynamic Industrials Sector Portfolio | NYSE Arca | ||||||
Dynamic Technology Sector Portfolio | NYSE Arca | ||||||
Dynamic Utilities Portfolio | NYSE Arca | ||||||
NASDAQ Internet Portfolio | NASDAQ OMX Group, Inc. |
Each Underlying Index name trademark is owned by its respective Licensor. These trademarks have been licensed to the Adviser for use with the Funds. Each Fund is entitled to use its Underlying Index pursuant to the Trust's sub-licensing agreement with the Adviser. The Funds (except for NASDAQ Internet Portfolio) are required to pay the sub-licensing fees that are shown on the Statements of Operations. 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.
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Notes to Financial Statements (Continued)
PowerShares Exchange-Traded Fund Trust
April 30, 2013
The Trust has entered into service agreements whereby The Bank of New York Mellon, a wholly-owned subsidiary of The Bank of New York Mellon Corporation, serves as the administrator, custodian, fund accountant and transfer agent for each Fund.
Note 4. Investments in Affiliates
The Adviser is a subsidiary of Invesco Ltd. and therefore Invesco Ltd. is considered to be affiliated with Dynamic Financial Sector Portfolio. The table below shows the Fund's transactions in, and earnings from, its investments in Invesco Ltd. for the fiscal year ended April 30, 2013.
Dynamic Financial Sector Portfolio
Value April 30, 2012 | Purchases at Cost | Proceeds from Sales | Change in Unrealized Appreciation | Realized Loss | Value April 30, 2013 | Dividend Income | |||||||||||||||||||||||||
Invesco Ltd. | $ | 449,306 | $ | 6,143 | $ | (395,487 | ) | $ | 1,984 | $ | (61,946 | ) | $ | — | $ | 3,167 |
Note 5. Additional Valuation Information
GAAP defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date, under current market conditions. GAAP establishes a hierarchy that prioritizes the inputs to valuation methods, giving the highest priority to readily available unadjusted quoted prices in an active market for identical assets (Level 1) and the lowest priority to significant unobservable inputs (Level 3), generally when market prices are not readily available or are unreliable. Based on the valuation inputs, the securities or other investments are tiered into one of three levels. Changes in valuation methods may result in transfers in or out of an investment's assigned level:
Level 1 – Prices are determined using quoted prices in an active market for identical assets.
Level 2 – Prices are determined using other significant observable inputs. Observable inputs are inputs that other market participants may use in pricing a security. These may include quoted prices for similar securities, interest rates, prepayment speeds, credit risk, yield curves, loss severities, default rates, discount rates, volatilities and others.
Level 3 – Prices are determined using significant unobservable inputs. In situations where quoted prices or observable inputs are unavailable (for example, when there is little or no market activity for an investment at the end of the period), unobservable inputs may be used. Unobservable inputs reflect the Fund's own assumptions about the factors market participants would use in determining fair value of the securities or instruments and would be based on the best available information.
As of April 30, 2013, the securities in each Fund were valued based on Level 1 inputs (see the Schedule of Investments for security categories). The level assigned to the securities valuations may not be an indication of the risk or liquidity associated with investing in those securities. Because of the inherent uncertainties of valuation, the values reflected in the financial statements may materially differ from the value received upon actual sale of those investments.
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Notes to Financial Statements (Continued)
PowerShares Exchange-Traded Fund Trust
April 30, 2013
Note 6. Distributions to Shareholders and Tax Components of Net Assets
Tax Character of Distributions to Shareholders Paid During the Fiscal Years Ended April 30, 2013 and 2012:
2013 | 2012 | ||||||||||||||||||
Ordinary Income | Return of Capital | Ordinary Income | Return of Capital | ||||||||||||||||
Dynamic Basic Materials Sector Portfolio | $ | 1,050,895 | $ | — | $ | 838,951 | $ | — | |||||||||||
Dynamic Consumer Discretionary Sector Portfolio | 332,955 | — | 149,036 | — | |||||||||||||||
Dynamic Consumer Staples Sector Portfolio | 761,607 | — | 566,981 | — | |||||||||||||||
Dynamic Energy Sector Portfolio | 1,757,378 | — | 960,095 | — | |||||||||||||||
Dynamic Financial Sector Portfolio | 308,168 | — | 214,150 | — | |||||||||||||||
Dynamic Healthcare Sector Portfolio | 519,661 | — | — | — | |||||||||||||||
Dynamic Industrials Sector Portfolio | 607,832 | 39,658 | 355,923 | — | |||||||||||||||
Dynamic Technology Sector Portfolio | 220,275 | — | — | — | |||||||||||||||
Dynamic Utilities Portfolio | 1,054,339 | — | 1,320,323 | — | |||||||||||||||
NASDAQ Internet Portfolio | 27,038 | — | — | — |
Tax Components of Net Assets at Fiscal Year-End:
Undistributed Ordinary Income | Temporary Book/Tax Differences | Net Unrealized Appreciation — Investment Securities | Capital Loss Carryforward | Late-Year Ordinary/ Post-October Losses Capital Deferrals* | Shares of Beneficial Interest | Total Net Assets | |||||||||||||||||||||||||
Dynamic Basic Materials Sector Portfolio | $ | 133,500 | $ | (8,292 | ) | $ | 9,063,607 | $ | (21,628,590 | ) | $ | (1,092,559 | ) | $ | 93,785,469 | $ | 80,253,135 | ||||||||||||||
Dynamic Consumer Discretionary Sector Portfolio | 27,337 | (7,028 | ) | 3,027,509 | (9,383,335 | ) | (894,739 | ) | 31,163,346 | 23,933,090 | |||||||||||||||||||||
Dynamic Consumer Staples Sector Portfolio | 95,883 | (7,771 | ) | 8,154,962 | (11,621,278 | ) | (530,970 | ) | 41,617,090 | 37,707,916 | |||||||||||||||||||||
Dynamic Energy Sector Portfolio | 26,803 | (9,174 | ) | 14,047,684 | (25,072,035 | ) | (2,865,171 | ) | 151,787,740 | 137,915,847 | |||||||||||||||||||||
Dynamic Financial Sector Portfolio | 69,146 | (8,109 | ) | 2,721,051 | (11,952,592 | ) | (77,314 | ) | 29,577,796 | 20,329,978 | |||||||||||||||||||||
Dynamic Healthcare Sector Portfolio | 93,876 | (9,568 | ) | 7,777,985 | (51,791,179 | ) | (918,534 | ) | 104,918,145 | 60,070,725 | |||||||||||||||||||||
Dynamic Industrials Sector Portfolio | — | (8,290 | ) | 5,314,607 | (43,444,871 | ) | (37,612 | ) | 76,749,601 | 38,573,435 | |||||||||||||||||||||
Dynamic Technology Sector Portfolio** | — | (7,786 | ) | 4,423,975 | (30,181,343 | ) | (1,032,800 | ) | 58,850,878 | 32,052,924 | |||||||||||||||||||||
Dynamic Utilities Portfolio | 122,840 | (8,068 | ) | 6,498,039 | (17,374,744 | ) | (460,236 | ) | 53,826,111 | 42,603,942 | |||||||||||||||||||||
NASDAQ Internet Portfolio** | — | — | 6,634,677 | (1,744,063 | ) | (2,303,610 | ) | 61,938,137 | 64,525,141 |
* Includes net capital losses incurred after October 31 ("Post-October Capital Losses") and the combination of ordinary losses incurred after December 31 within the taxable year and specified losses incurred after October 31 within the taxable year ("Late-Year Ordinary Losses"), that are deemed to arise on the first business day of each Fund's next taxable year.
** Dynamic Technology Portfolio and NASDAQ Internet Portfolio incurred and will elect to defer Late-Year Ordinary Losses of $19,488 and $45,192 and Post-October Capital Losses of $1,013,312, and $2,258,418, respectively.
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Notes to Financial Statements (Continued)
PowerShares Exchange-Traded Fund Trust
April 30, 2013
Capital loss carryforward is calculated and reported as of a specific date. Results of transactions and other activity after that date may affect the amount of capital loss carryforward actually available for the Funds to utilize. The Regulated Investment Company Modernization Act of 2010 eliminated the eight-year carryover period for capital losses that arise in taxable years beginning after its enactment date of December 22, 2010. Consequently, these capital losses can be carried forward for an unlimited period. However, capital losses with an expiration period may not be used to offset capital gains until all net capital losses without an expiration date have been utilized. Additionally, post-enactment capital loss carryforwards will retain their character as either short-term or long-term capital losses instead of as short-term capital losses as under prior law. The ability to utilize capital loss carryforward in the future may be limited under Internal Revenue Code rules and related regulations based on the results of future transactions.
The following Funds have a capital loss carryforward as of April 30, 2013, which expires as follows:
Post-effective no expiration | |||||||||||||||||||||||||||||||||||
2015 | 2016 | 2017 | 2018 | 2019 | Short-term | Long-term | Total* | ||||||||||||||||||||||||||||
Dynamic Basic Materials Sector Portfolio | $ | — | $ | 205,528 | $ | 3,783,798 | $ | 4,534,904 | $ | 2,521,492 | $ | 8,909,869 | $ | 1,672,999 | $ | 21,628,590 | |||||||||||||||||||
Dynamic Consumer Discretionary Sector Portfolio | — | 1,246,058 | 1,993,654 | — | 2,042,056 | 4,101,567 | — | 9,383,335 | |||||||||||||||||||||||||||
Dynamic Consumer Staples Sector Portfolio | — | 634,544 | 2,156,980 | 3,935,363 | 1,180,566 | 3,579,323 | 134,502 | 11,621,278 | |||||||||||||||||||||||||||
Dynamic Energy Sector Portfolio | — | 880,885 | 2,869,667 | 3,914,682 | 1,167,692 | 15,165,606 | 1,073,503 | 25,072,035 | |||||||||||||||||||||||||||
Dynamic Financial Sector Portfolio | — | 614,940 | 1,821,971 | 4,413,894 | 1,979,006 | 3,051,498 | 71,283 | 11,952,592 | |||||||||||||||||||||||||||
Dynamic Healthcare Sector Portfolio | — | 2,234,184 | 17,890,879 | 18,737,951 | 2,739,963 | 9,956,355 | 231,847 | 51,791,179 | |||||||||||||||||||||||||||
Dynamic Industrials Sector Portfolio | — | 1,476,057 | 6,525,387 | 21,245,288 | 2,746,746 | 11,306,561 | 144,832 | 43,444,871 | |||||||||||||||||||||||||||
Dynamic Technology Sector Portfolio | — | 2,465,875 | 8,220,697 | 7,658,564 | 3,016,840 | 8,744,270 | 75,097 | 30,181,343 | |||||||||||||||||||||||||||
Dynamic Utilities Portfolio | 430,964 | 2,124,736 | 1,366,073 | 5,885,935 | 874,386 | 4,628,005 | 2,064,645 | 17,374,744 | |||||||||||||||||||||||||||
NASDAQ Internet Portfolio | — | — | — | 3,360 | 74,863 | 691,683 | 974,157 | 1,744,063 |
* Capital loss carryforward as of the date listed above is reduced for limitations, if any, to the extent required by the Internal Revenue Code.
Note 7. Investment Transactions
For the fiscal year ended April 30, 2013, 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 | ||||||||||
Dynamic Basic Materials Sector Portfolio | $ | 42,190,603 | $ | 43,819,603 | |||||||
Dynamic Consumer Discretionary Sector Portfolio | 35,287,489 | 35,433,473 | |||||||||
Dynamic Consumer Staples Sector Portfolio | 21,277,071 | 21,084,484 | |||||||||
Dynamic Energy Sector Portfolio | 101,421,643 | 99,514,064 | |||||||||
Dynamic Financial Sector Portfolio | 22,393,868 | 21,983,488 | |||||||||
Dynamic Healthcare Sector Portfolio | 43,386,899 | 43,286,047 | |||||||||
Dynamic Industrials Sector Portfolio | 35,120,101 | 35,309,845 | |||||||||
Dynamic Technology Sector Portfolio | 29,450,377 | 28,503,119 | |||||||||
Dynamic Utilities Portfolio | 19,978,451 | 19,771,092 | |||||||||
NASDAQ Internet Portfolio | 11,027,402 | 11,278,143 |
83
Notes to Financial Statements (Continued)
PowerShares Exchange-Traded Fund Trust
April 30, 2013
For the fiscal year ended April 30, 2013, in-kind transactions associated with creations and redemptions were as follows:
Securities Received | Securities Delivered | ||||||||||
Dynamic Basic Materials Sector Portfolio | $ | 65,363,739 | $ | 57,889,175 | |||||||
Dynamic Consumer Discretionary Sector Portfolio | 50,884,537 | 50,647,718 | |||||||||
Dynamic Consumer Staples Sector Portfolio | 20,222,317 | 29,031,353 | |||||||||
Dynamic Energy Sector Portfolio | 96,998,619 | 121,963,219 | |||||||||
Dynamic Financial Sector Portfolio | 24,462,007 | 26,028,602 | |||||||||
Dynamic Healthcare Sector Portfolio | 70,851,988 | 57,517,052 | |||||||||
Dynamic Industrials Sector Portfolio | 35,932,081 | 33,363,502 | |||||||||
Dynamic Technology Sector Portfolio | 24,282,637 | 26,387,510 | |||||||||
Dynamic Utilities Portfolio | 16,087,027 | 23,758,035 | |||||||||
NASDAQ Internet Portfolio | 25,052,859 | 29,146,562 |
Gains (losses) on in-kind transactions are generally not considered taxable gains (losses) for federal income tax purposes.
At April 30, 2013, the aggregate cost and the net unrealized appreciation (depreciation) of investments for tax purposes were as follows:
Cost | Net Unrealized Appreciation (Depreciation) | Gross Unrealized Appreciation | Gross Unrealized (Depreciation) | ||||||||||||||||
Dynamic Basic Materials Sector Portfolio | $ | 71,255,200 | $ | 9,063,607 | $ | 10,829,963 | $ | (1,766,356 | ) | ||||||||||
Dynamic Consumer Discretionary Sector Portfolio | 20,992,906 | 3,027,509 | 3,086,827 | (59,318 | ) | ||||||||||||||
Dynamic Consumer Staples Sector Portfolio | 29,618,866 | 8,154,962 | 8,243,084 | (88,122 | ) | ||||||||||||||
Dynamic Energy Sector Portfolio | 124,036,478 | 14,047,684 | 19,241,743 | (5,194,059 | ) | ||||||||||||||
Dynamic Financial Sector Portfolio | 17,687,715 | 2,721,051 | 2,791,030 | (69,979 | ) | ||||||||||||||
Dynamic Healthcare Sector Portfolio | 52,379,891 | 7,777,985 | 8,138,353 | (360,368 | ) | ||||||||||||||
Dynamic Industrials Sector Portfolio | 33,353,332 | 5,314,607 | 5,479,202 | (164,595 | ) | ||||||||||||||
Dynamic Technology Sector Portfolio | 27,712,012 | 4,423,975 | 4,873,867 | (449,892 | ) | ||||||||||||||
Dynamic Utilities Portfolio | 36,492,369 | 6,498,039 | 7,673,678 | (1,175,639 | ) | ||||||||||||||
NASDAQ Internet Portfolio | 60,265,499 | 6,634,677 | 9,998,763 | (3,364,086 | ) |
Note 8. Reclassification of Permanent Differences
Primarily as a result of differing book/tax treatment of in-kind transactions on April 30, 2013, amounts were reclassified between undistributed net investment income (loss), undistributed net realized gain (loss)
84
Notes to Financial Statements (Continued)
PowerShares Exchange-Traded Fund Trust
April 30, 2013
and shares of beneficial interest. These reclassifications had no effect on the net assets of each Fund. For the fiscal year ended April 30, 2013, the reclassifications were as follows:
Undistributed Net Investment Income (Loss) | Undistributed Net Realized Gain (Loss) | Shares of Beneficial Interest | |||||||||||||
Dynamic Basic Materials Sector Portfolio | $ | 1,628 | $ | (8,094,652 | ) | $ | 8,093,024 | ||||||||
Dynamic Consumer Discretionary Sector Portfolio | (19,426 | ) | (6,073,112 | ) | 6,092,538 | ||||||||||
Dynamic Consumer Staples Sector Portfolio | — | (6,011,395 | ) | 6,011,395 | |||||||||||
Dynamic Energy Sector Portfolio | 314,525 | (14,926,513 | ) | 14,611,988 | |||||||||||
Dynamic Financial Sector Portfolio | 25,395 | (3,059,261 | ) | 3,033,866 | |||||||||||
Dynamic Healthcare Sector Portfolio | — | (7,111,386 | ) | 7,111,386 | |||||||||||
Dynamic Industrials Sector Portfolio | 41 | (4,012,898 | ) | 4,012,857 | |||||||||||
Dynamic Technology Sector Portfolio | — | (4,924,859 | ) | 4,924,859 | |||||||||||
Dynamic Utilities Portfolio | — | (2,305,217 | ) | 2,305,217 | |||||||||||
NASDAQ Internet Portfolio | — | (8,032,231 | ) | 8,032,231 |
Note 9. Trustees' Fees
The Funds compensate each Independent Trustee. The Adviser, as a result of the unitary management fee, pays for such compensation for NASDAQ Internet Portfolio. The Trustee who is an "interested person" (the "Non-Independent Trustee") of the Trust does not receive any Trustees' fees.
The Trust has adopted a deferred compensation plan (the "Plan"). Under the Plan, an Independent Trustee who has executed a Deferred Fee Agreement (a "Participating Trustee") may defer receipt of all or a portion of his compensation ("Deferral Fees"). Such Deferral Fees are deemed to be invested in select PowerShares Funds. The Deferral Fees payable to the Participating Trustee are valued as of the date such Deferral 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 distributions or with declines in the value of the Shares selected.
Note 10. Capital
Shares are created and redeemed by the Trust only in Creation Units of 50,000 Shares. Only Authorized Participants are permitted to purchase or redeem Creation Units from the Funds. Such transactions are generally permitted on an in-kind basis, with a balancing cash component to equate the transaction to the NAV per Share of a 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 eligible for trading by the Authorized Participant or as a result of other market circumstances.
Each Fund may issue Shares in advance of receipt of a basket of securities ("Deposit Securities") subject to various conditions, including a requirement to maintain on deposit with the Trust cash at least equal to 105% of the market value of the missing Deposit Securities. In accordance with each Fund's Participant Agreement, Creation Units will be issued to an Authorized Participant, notwithstanding the fact that the corresponding Deposit Securities 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
85
Notes to Financial Statements (Continued)
PowerShares Exchange-Traded Fund Trust
April 30, 2013
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 105%, which the Adviser may change from time to time, of the value of the missing Deposit Securities.
Transactions in a Fund's Shares are disclosed in detail on the Statements of Changes in Net Assets.
Note 11. 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. Each Independent Trustee is also indemnified against certain liabilities arising out of the performance of his duties to the Trust pursuant to an Indemnification Agreement between the Independent Trustee and 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.
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 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 Healthcare Sector Portfolio, PowerShares Dynamic Industrials Sector Portfolio, PowerShares Dynamic Technology Sector Portfolio, PowerShares Dynamic Utilities Portfolio and PowerShares NASDAQ Internet Portfolio (each an individual portfolio of PowerShares Exchange-Traded Fund Trust, hereafter referred to as the "Funds") at April 30, 2013, the results of each of their operations for the year then ended, the change in each of their net assets for each of the two years in the period then ended 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 Funds' 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, 2013 by correspondence with the custodian and brokers, provide a reasonable basis for our opinion.
As discussed in note 2G of the Notes to the Financial Statements, the Funds changed their accounting policy to discontinue the use of equalization accounting for book purposes.
/s/ PricewaterhouseCoopers LLP
Chicago, IL
June 25, 2013
87
Tax Information
Form 1099-DIV, Form 1042-S and other year-end tax information provide shareholders with actual calendar year amounts that should be included in their tax returns. Shareholders should consult their tax advisors.
The following distribution information is being provided as required by the Internal Revenue Code or to meet a specific state's requirement.
Each Fund designates the following amounts or, if subsequently determined to be different, the maximum amount allowable for its fiscal year ended April 30, 2013:
Federal Income Tax Information
Qualified Dividend Income* | Dividends-Received Deduction* | ||||||||||
Dynamic Basic Materials Sector Portfolio | 100 | % | 100 | % | |||||||
Dynamic Consumer Discretionary Sector Portfolio | 100 | % | 100 | % | |||||||
Dynamic Consumer Staples Sector Portfolio | 100 | % | 100 | % | |||||||
Dynamic Energy Sector Portfolio | 100 | % | 100 | % | |||||||
Dynamic Financial Sector Portfolio | 100 | % | 100 | % | |||||||
Dynamic Healthcare Sector Portfolio | 100 | % | 100 | % | |||||||
Dynamic Industrials Sector Portfolio | 100 | % | 100 | % | |||||||
Dynamic Technology Sector Portfolio | 100 | % | 100 | % | |||||||
Dynamic Utilities Portfolio | 100 | % | 100 | % | |||||||
NASDAQ Internet Portfolio | 0 | % | 0 | % |
* The above percentages are based on ordinary income dividends paid to shareholders during the Fund's fiscal year.
88
Supplemental Information
Trustees and Officers
The Independent Trustees, the Non-Independent 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 a Trustee are shown below.
The Trustees and officers information is current as of April 30, 2013.
Name, Address and Age of Independent Trustees | 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 Complex** Overseen by Independent Trustees | Other Directorships Held by Independent Trustees During the Past 5 Years | ||||||||||||||||||
Ronn R. Bagge (55) c/o Invesco PowerShares Capital Management LLC 301 West Roosevelt Road Wheaton, IL 60187 | Trustee | Since 2003 | Founder and Principal, YQA Capital Management LLC (1998-Present); formerly Owner/CEO of Electronic Dynamic Balancing Co., Inc. (high-speed rotating equipment service provider). | 113 | None | ||||||||||||||||||
Todd J. Barre (55) c/o Invesco PowerShares Capital Management LLC 301 West Roosevelt Road Wheaton, IL 60187 | Trustee | Since 2010 | Assistant Professor of Business, Trinity Christian College (2010-Present); formerly, Vice President and Senior Investment Strategist (2001-2008), Director of Open Architecture and Trading (2007-2008), Head of Fundamental Research (2004-2007) and Vice President and Senior Fixed Income Strategist (1994-2001), BMO Financial Group/Harris Private Bank. | 113 | None |
* This is the date the Non-Independent Trustee began serving the Trust. Each Trustee serves an indefinite term, until his successor is elected.
** Fund Complex includes all open-end funds (including all of their portfolios) advised by the Adviser. At May 9, 2013, the Fund Complex consisted of the Trust's 55 portfolios and three other exchange-traded fund trusts with 58 portfolios advised by the Adviser.
89
Supplemental Information (Continued)
Trustees and Officers (Continued)
Name, Address and Age of Independent Trustees | 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 Complex** Overseen by Independent Trustees | Other Directorships Held by Independent Trustees During the Past 5 Years | ||||||||||||||||||
Marc M. Kole (52) c/o Invesco PowerShares Capital Management LLC 301 West Roosevelt Road Wheaton, IL 60187 | Trustee | Since 2006 | Formerly, Chief Financial Officer, Hope Network (social services) (2008-2012); Assistant Vice President and Controller, Priority Health (health insurance) (2005-2008); Senior Vice President of Finance, United Healthcare (2004-2005); Senior Vice President of Finance, Oxford Health Plans (2000-2004). | 113 | None | ||||||||||||||||||
Yung Bong Lim (48) c/o Invesco PowerShares Capital Management LLC 301 West Roosevelt Road Wheaton, IL 60187 | Trustee | Since 2013 | Managing Partner, Residential Dynamics Group LLC (2008-Present); formerly, Managing Director, Citadel Investment Group, L.L.C. (1999-2007). | 58 | None | ||||||||||||||||||
Philip M. Nussbaum (51) c/o Invesco PowerShares Capital Management LLC 301 West Roosevelt Road Wheaton, IL 60187 | Trustee | Since 2003 | Chairman, Performance Trust Capital Partners (2004-Present). | 113 | None |
* This is the date the Non-Independent Trustee began serving the Trust. Each Trustee serves an indefinite term, until his successor is elected.
** Fund Complex includes all open-end funds (including all of their portfolios) advised by the Adviser. At May 9, 2013, the Fund Complex consisted of the Trust's 55 portfolios and three other exchange-traded fund trusts with 58 portfolios advised by the Adviser.
90
Supplemental Information (Continued)
Trustees and Officers (Continued)
Name, Address and Age of Independent Trustees | 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 Complex** Overseen by Independent Trustees | Other Directorships Held by Independent Trustees During the Past 5 Years | ||||||||||||||||||
Gary R. Wicker (51) c/o Invesco PowerShares Capital Management LLC 301 West Roosevelt Road Wheaton, IL 60187 | Trustee | Since 2013 | Senior Vice President of Global Finance and Chief Financial Officer at RBC Ministries (publishing company) (since 2013); formerly, Executive Vice President and Chief Financial Officer, Zondervan Publishing (A division of Harper Collins/NewsCorp) (2007-2012); Senior Vice President and Group Controller (2005-2006), Senior Vice President and Chief Financial Officer (2003-2004), Chief Financial Officer (2001-2003), Vice President, Finance and Controller (1999-2001) and Assistant Controller (1997-1999), divisions of The Thomson Corporation (information services provider). | 58 | None |
* This is the date the Non-Independent Trustee began serving the Trust. Each Trustee serves an indefinite term, until his successor is elected.
** Fund Complex includes all open-end funds (including all of their portfolios) advised by the Adviser. At May 9, 2013, the Fund Complex consisted of the Trust's 55 portfolios and three other exchange-traded fund trusts with 58 portfolios advised by the Adviser.
91
Supplemental Information (Continued)
Trustees and Officers (Continued)
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 Complex** Overseen by Independent Trustee | Other Directorships Held by Independent Trustee During the Past 5 Years | ||||||||||||||||||
Donald H. Wilson (53) c/o Invesco PowerShares Capital Management LLC 301 West Roosevelt Road Wheaton, IL 60187 | Chairman of the Board and Trustee | Chairman since 2012; Trustee since 2006 | Chairman and Chief Executive Officer, Stone Pillar Advisers, Ltd. (2010-Present); formerly, Chief Operating Officer, AMCORE Financial, Inc. (bank holding company) (2007-2009); Executive Vice President and Chief Financial Officer, AMCORE Financial, Inc. (2006-2007); Senior Vice President and Treasurer, Marshall & Ilsley Corp. (bank holding company) (1995-2006). | 113 | None |
* This is the date the Non-Independent Trustee began serving the Trust. Each Trustee serves an indefinite term, until his successor is elected.
** Fund Complex includes all open-end funds (including all of their portfolios) advised by the Adviser. At May 9, 2013, the Fund Complex consisted of the Trust's 55 portfolios and three other exchange-traded fund trusts with 58 portfolios advised by the Adviser.
92
Supplemental Information (Continued)
Trustees and Officers (Continued)
The Non-Independent Trustee and the 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 Non-Independent Trustee and the other directorships, if any, held by the Non-Independent Trustee are shown below.
Name, Address and Age of Non-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 Complex** Overseen by Non- Independent Trustee | Other Directorships Held by Non-Independent Trustee During the Past 5 Years | ||||||||||||||||||
Kevin M. Carome (57) Invesco Ltd. Two Peachtree Pointe 1555 Peachtree St., N.E., Suite 1800 Atlanta, GA 30309 | Trustee | Since 2010 | Senior Managing Director, Secretary and General Counsel, Invesco Ltd. (2006-Present); Director, Invesco Advisers, Inc. (2009-Present); formerly, Senior Vice President, Secretary and General Counsel, Invesco Advisers, Inc. (2003-2005); Senior Vice President and General Counsel, Liberty Financial Companies, Inc. (2000-2001); General Counsel of certain investment management subsidiaries of Liberty Financial Companies, Inc. (1998-2000); Associate General Counsel, Liberty Financial Companies, Inc. (1993-1998); Associate, Ropes & Gray LLP. | 113 | None |
* This is the date the Non-Independent Trustee began serving the Trust. Each Trustee serves an indefinite term, until his successor is elected.
** Fund Complex includes all open-end funds (including all of their portfolios) advised by the Adviser. At May 9, 2013, the Fund Complex consisted of the Trust's 55 portfolios and three other exchange-traded fund trusts with 58 portfolios advised by the Adviser.
93
Supplemental Information (Continued)
Trustees and Officers (Continued)
Name, Address and Age of Executive Officer | Position(s) Held with Trust | Length of Time Served* | Principal Occupation(s) During Past 5 Years | ||||||||||||
Andrew Schlossberg (39) Invesco Management Group, Inc. 11 Greenway Plaza Suite 1000 Houston, TX 77046 | President | Since 2009 | Managing Director, U.S. head of business strategy and chief marketing officer for Invesco Ltd. in the United States (2008-Present); Director, Invesco Distributors, Inc. (2012-Present); and Senior Vice President, Invesco Advisers, Inc. (formerly known as Invesco Institutional (N.A.), Inc.) (registered investment adviser) (2009-Present); formerly, Mr. Schlossberg served in multiple roles within Invesco, including head of corporate development, as well as global leadership roles in strategy and product development in the company's North American Institutional and Retirement divisions (2002-2007). | ||||||||||||
Peter Hubbard (32) Invesco PowerShares Capital Management LLC 301 West Roosevelt Road Wheaton, IL 60187 | Vice President | Since 2009 | Vice President and Director of Portfolio Management – Invesco PowerShares Capital Management LLC (2008-Present); formerly, Portfolio Manager, Invesco PowerShares Capital Management LLC (2007-2008); Research Analyst, Invesco PowerShares Capital Management LLC (2005-2007); Research Analyst and Trader, Ritchie Capital, a hedge fund operator (2003-2005). | ||||||||||||
David Warren (55) Invesco Canada Ltd. 5140 Yonge Street Suite 900, Toronto, Ontario M2N 6X7 | Vice President | Since 2009 | Director, Executive Vice President and Chief Financial Officer, Invesco Canada Ltd. (formerly, Invesco Trimark Ltd.) and Chief Administrative Officer, North American Retail, Invesco Ltd. (2007-Present); Senior Vice President, Invesco Management Group, Inc. (2007-Present); Director, Executive Vice President and Chief Financial Officer, Invesco, Inc.; Director, Invesco Canada Holdings Inc.; formerly, Director, Executive Vice President and Chief Financial Officer, Invesco Canada Ltd. (formerly, Invesco Trimark Ltd.) (2000-2006). |
* This is the period for which the Officers began serving the Trust. Each Officer serves an indefinite term, until his or her successor is elected.
94
Supplemental Information (Continued)
Trustees and Officers (Continued)
Name, Address and Age of Executive Officer | Position(s) Held with Trust | Length of Time Served* | Principal Occupation(s) During Past 5 Years | ||||||||||||
Sheri Morris (49) Invesco Management Group, Inc. 11 Greenway Plaza Suite 1000 Houston, TX 77046-1173 | Vice President | Since 2012 | Vice President, Treasurer and Principal Financial Officer, The Invesco Funds; Vice President, Invesco Advisers, Inc. (formerly known as Invesco Institutional (N.A.), Inc.) (registered investment adviser) (2009-Present) and Vice President, PowerShares Exchange-Traded Fund Trust, PowerShares Exchange-Traded Fund Trust II, PowerShares India Exchange-Traded Fund Trust and PowerShares Actively Managed Exchange-Traded Fund Trust; formerly, Treasurer, PowerShares Exchange-Traded Fund Trust, PowerShares Exchange-Traded Fund Trust II, PowerShares India Exchange-Traded Fund Trust and PowerShares Actively Managed Exchange-Traded Fund Trust (2012-2013); formerly, Vice President, Invesco Advisers, Inc., Invesco Aim Capital Management, Inc. and Invesco Aim Private Asset Management, Inc.; Assistant Vice President and Assistant Treasurer, The Invesco Funds and Assistant Vice President, Invesco Advisers, Inc., Invesco Aim Capital Management, Inc. and Invesco Aim Private Asset Management, Inc. | ||||||||||||
Steven M. Hill (48) Invesco PowerShares Capital Management LLC 301 West Roosevelt Road Wheaton, IL 60187 | Vice President and Treasurer | Since 2012 Since 2013 | Vice President and Treasurer, PowerShares Exchange-Traded Fund Trust, PowerShares Exchange-Traded Fund Trust II, PowerShares India Exchange-Traded Fund Trust and PowerShares Actively Managed Exchange-Traded Fund Trust (since 2013); Head of Global ETF Administration, Invesco PowerShares Capital Management LLC; formerly, Treasurer, PowerShares Exchange-Traded Fund Trust, PowerShares Exchange-Traded Fund Trust II, PowerShares India Exchange-Traded Fund Trust and PowerShares Actively Managed Exchange-Traded Fund Trust (2011-2012); Senior Managing Director and Chief Financial Officer, Destra Capital Management LLC and its subsidiaries (2010-2011); Chief Financial Officer, Destra Investment Trust and Destra Investment Trust II (2010-2011); Senior Managing Director, Claymore Securities, Inc. (2003-2010); and Chief Financial Officer, Claymore sponsored mutual funds (2003-2010). |
* This is the period for which the Officers began serving the Trust. Each Officer serves an indefinite term, until his or her successor is elected.
95
Supplemental Information (Continued)
Trustees and Officers (Continued)
Name, Address and Age of Executive Officer | Position(s) Held with Trust | Length of Time Served* | Principal Occupation(s) During Past 5 Years | ||||||||||||
Christopher Joe (44) Invesco Management Group, Inc. 11 Greenway Plaza Suite 1000 Houston, TX 77046-1173 | Chief Compliance Officer | Since 2012 | U.S. Compliance Director, Invesco, Ltd.; Chief Compliance Officer, Invesco Investment Advisers, LLC (registered investment adviser); formerly, Assistant Fund Accounting Manager, Invesco, Ltd. | ||||||||||||
Anna Paglia (39) Invesco PowerShares Capital Management LLC 301 West Roosevelt Road Wheaton, IL 60187 | Secretary | Since 2011 | Secretary, PowerShares Exchange-Traded Fund Trust, PowerShares Exchange-Traded Fund Trust II, PowerShares India Exchange-Traded Fund Trust, and PowerShares Actively Managed Exchange-Traded Fund Trust; Head of Legal, Invesco PowerShares Capital Management LLC (2010-Present); formerly, Partner, K&L Gates LLP (formerly, Bell Boyd & Lloyd LLP) (2007-2010); Associate Counsel at Barclays Global Investors Ltd. (2004-2006). |
Availability of Additional Information About the Trustees
The Statement of Additional Information includes additional information about the Trustees and is available, without charge, upon request at (800) 983-0903.
* This is the period for which the Officers began serving the Trust. Each Officer serves an indefinite term, until his or her successor is elected.
96
Board Considerations Regarding Approval of Continuation of Investment Advisory Agreement
At a meeting held on April 18, 2013, the Board of Trustees of the PowerShares Exchange-Traded Fund Trust (the "Trust"), including the Independent Trustees, approved the continuation of the Investment Advisory Agreement between Invesco PowerShares Capital Management LLC (the "Adviser") and the Trust for the following 53 series (each, a "Fund" and together, the "Funds"):
PowerShares Aerospace & Defense Portfolio
PowerShares Buyback AchieversTM Portfolio
PowerShares CleantechTM Portfolio
PowerShares Dividend AchieversTM Portfolio
PowerShares DWA Technical LeadersTM Portfolio
PowerShares Dynamic Basic Materials Sector Portfolio
PowerShares Dynamic Biotechnology & Genome Portfolio
PowerShares Dynamic Building & Construction Portfolio
PowerShares Dynamic Consumer Discretionary Sector Portfolio
PowerShares Dynamic Consumer Staples Sector Portfolio
PowerShares Dynamic Energy Exploration & Production Portfolio
PowerShares Dynamic Energy Sector Portfolio
PowerShares Dynamic Financial Sector Portfolio
PowerShares Dynamic Food & Beverage Portfolio
PowerShares Dynamic Healthcare Sector Portfolio
PowerShares Dynamic Industrials Sector Portfolio
PowerShares Dynamic Large Cap Growth Portfolio
PowerShares Dynamic Large Cap Value Portfolio
PowerShares Dynamic Leisure and Entertainment Portfolio
PowerShares Dynamic MagniQuant Portfolio
PowerShares Dynamic Market Portfolio
PowerShares Dynamic Media Portfolio
PowerShares Dynamic Networking Portfolio
PowerShares Dynamic Oil & Gas Services Portfolio
PowerShares Dynamic OTC Portfolio
PowerShares Dynamic Pharmaceuticals Portfolio
PowerShares Dynamic Retail Portfolio
PowerShares Dynamic Semiconductors Portfolio
PowerShares Dynamic Software Portfolio
PowerShares Dynamic Technology Sector Portfolio
PowerShares Dynamic Utilities Portfolio
PowerShares Financial Preferred Portfolio
PowerShares FTSE RAFI US 1000 Portfolio
PowerShares FTSE RAFI US 1500 Small-Mid Portfolio
PowerShares Fundamental Pure Large Core Portfolio
PowerShares Fundamental Pure Large Growth Portfolio
PowerShares Fundamental Pure Large Value Portfolio
PowerShares Fundamental Pure Mid Core Portfolio
PowerShares Fundamental Pure Mid Growth Portfolio
PowerShares Fundamental Pure Mid Value Portfolio
PowerShares Fundamental Pure Small Core Portfolio
PowerShares Fundamental Pure Small Growth Portfolio
PowerShares Fundamental Pure Small Value Portfolio
PowerShares Global Listed Private Equity Portfolio
PowerShares Golden Dragon China Portfolio
PowerShares High Yield Equity Dividend Achievers TM Portfolio
PowerShares International Dividend AchieversTM Portfolio
PowerShares Lux Nanotech Portfolio
PowerShares S&P 500® High Quality Portfolio
PowerShares Water Resources Portfolio
PowerShares WilderHill Clean Energy Portfolio
PowerShares WilderHill Progressive Energy Portfolio
PowerShares Zacks Micro Cap Portfolio
97
Board Considerations Regarding Approval of Continuation of Investment Advisory Agreement (Continued)
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 a 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 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. 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 and projected staffing, 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 execution of portfolio transactions on behalf of the Funds. The Trustees also reviewed information on the performance of the Funds and the performance of their underlying indexes for the one-year, three-year, five-year and since-inception periods ended December 31, 2012, as applicable, including reports for each of the last three calendar years on the correlation and tracking error between each Fund's performance and the performance of its underlying index, as well as the Adviser's analysis of the tracking error between each Fund and its underlying index. In reviewing the tracking error report, the Trustees considered information provided by Ibbotson Associates, a consultant to the Independent Trustees, with respect to general expected tracking error ranges and various explanations for tracking error. The Trustees noted that for each applicable period, the correlation and tracking error for each Fund was within the targeted range set forth in the Trust's registration statement. The Trustees concluded that each Fund was correlated to its underlying index and that the tracking error for each Fund was within an acceptable range given 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 concluded that the nature, extent and quality of services provided by the Adviser to the Funds under the Investment Advisory Agreement were appropriate and reasonable.
Fees, Expenses and Profitability. The Trustees reviewed and discussed the information provided by the Adviser on each Fund's advisory fee and net expense ratio, as compared to information compiled by the Adviser from Lipper Inc. databases on the advisory fees and net expense ratios of comparable exchange-traded funds ("ETFs"), open-end (non-ETF) index funds and open-end actively-managed funds. The Trustees noted that the annual advisory fee charged to each Fund is:
• 0.50% of the Fund's average daily net assets for each Fund other than PowerShares Dividend AchieversTM Portfolio, PowerShares High Yield Equity Dividend AchieversTM Portfolio, PowerShares International Dividend AchieversTM Portfolio, PowerShares FTSE RAFI US 1000 Portfolio, PowerShares FTSE RAFI US 1500 Small-Mid Portfolio, PowerShares Fundamental Pure Large Core Portfolio, PowerShares Fundamental Pure Large Growth Portfolio, PowerShares Fundamental Pure Large Value Portfolio, PowerShares Fundamental Pure Mid Core Portfolio, PowerShares Fundamental Pure Mid Growth Portfolio, PowerShares Fundamental Pure Mid Value Portfolio, PowerShares
98
Board Considerations Regarding Approval of Continuation of Investment Advisory Agreement (Continued)
Fundamental Pure Small Core Portfolio, PowerShares Fundamental Pure Small Growth Portfolio, PowerShares Fundamental Pure Small Value Portfolio and PowerShares S&P 500® High Quality Portfolio;
• 0.40% of the Fund's average daily net assets for each of PowerShares Dividend AchieversTM Portfolio, PowerShares High Yield Equity Dividend AchieversTM Portfolio and PowerShares International Dividend AchieversTM Portfolio; and
• 0.29% of the Fund's average daily net assets for each of PowerShares FTSE RAFI US 1000 Portfolio, PowerShares FTSE RAFI US 1500 Small-Mid Portfolio, PowerShares Fundamental Pure Large Core Portfolio, PowerShares Fundamental Pure Large Growth Portfolio, PowerShares Fundamental Pure Large Value Portfolio, PowerShares Fundamental Pure Mid Core Portfolio, PowerShares Fundamental Pure Mid Growth Portfolio, PowerShares Fundamental Pure Mid Value Portfolio, PowerShares Fundamental Pure Small Core Portfolio, PowerShares Fundamental Pure Small Growth Portfolio, PowerShares Fundamental Pure Small Value Portfolio and PowerShares S&P 500® High Quality Portfolio (for PowerShares S&P 500® High Quality Portfolio, the Trustees noted that the advisory fee was reduced to 0.29% effective December 18, 2012). In approving the advisory fee reduction for the Funds at the December 18, 2012 meeting, the Trustees considered the Adviser's representation that there would be no diminution in the quantity or quality of services provided in connection with the amendment to the Investment Advisory Agreement.
The Trustees also noted that the Adviser has agreed to waive a portion of its advisory fee and/or pay expenses (an "Expense Cap") to the extent necessary to prevent the annual operating expenses of each Fund from exceeding the percentage of that Fund's average daily net assets, at least until August 31, 2014, as set forth below:
• 0.60%, excluding interest expenses, brokerage commissions and other trading expenses, taxes, acquired fund fees and expenses and extraordinary expenses, for each of PowerShares Dynamic OTC Portfolio and PowerShares Dynamic Market Portfolio;
• 0.50%, excluding interest expenses, licensing fees, offering costs, brokerage commissions and other trading expenses, taxes, acquired fund fees and expenses and extraordinary expenses, for each of PowerShares Dividend AchieversTM Portfolio, PowerShares High Yield Equity Dividend AchieversTM Portfolio and PowerShares International Dividend AchieversTM Portfolio;
• 0.39%, excluding interest expenses, offering costs, brokerage commissions and other trading expenses, taxes, acquired fund fees and expenses and extraordinary expenses, for each of PowerShares FTSE RAFI US 1000 Portfolio, PowerShares FTSE RAFI US 1500 Small-Mid Portfolio, PowerShares Fundamental Pure Large Core Portfolio, PowerShares Fundamental Pure Large Growth Portfolio, PowerShares Fundamental Pure Large Value Portfolio, PowerShares Fundamental Pure Mid Core Portfolio, PowerShares Fundamental Pure Mid Growth Portfolio, PowerShares Fundamental Pure Mid Value Portfolio, PowerShares Fundamental Pure Small Core Portfolio, PowerShares Fundamental Pure Small Growth Portfolio and PowerShares Fundamental Pure Small Value Portfolio;
• 0.29%, excluding interest expenses, offering costs, brokerage commissions and other trading expenses, taxes, acquired fund fees and expenses and extraordinary expenses, for PowerShares S&P 500® High Quality Portfolio (the Trustees noted that the Expense Cap for the Fund was reduced to 0.29% effective November 21, 2012); and
99
Board Considerations Regarding Approval of Continuation of Investment Advisory Agreement (Continued)
• 0.60%, excluding interest expenses, licensing fees, offering costs, brokerage commissions and other trading expenses, taxes, acquired fund fees and expenses and extraordinary expenses, for each other Fund.
The Trustees noted that the Adviser represented that it does not serve as the investment adviser to any clients, other than ETFs overseen by the Trustees, with comparable investment strategies as the Funds, but that the Adviser provides sub-advisory services to clients with comparable investment strategies as certain of the Funds. The Trustees further noted the Adviser's explanation with respect to the sub-advisory fees it receives for such services in comparison to the advisory fees charged to the Funds. The Trustees noted that each Fund's advisory fee was:
• higher than the median advisory fee of its ETF peer funds (except for the advisory fee of each of PowerShares Golden Dragon China Portfolio, PowerShares International Dividend AchieversTM Portfolio and PowerShares Fundamental Pure Small Value Portfolio, which was equal to or lower than the median advisory fee of its ETF peer funds); and
• higher than the median advisory fee of its open-end index peer funds (except for the advisory fee of each of PowerShares Dynamic Energy Exploration & Production Portfolio, PowerShares Dynamic Energy Sector Portfolio, PowerShares Dynamic Oil & Gas Services Portfolio, PowerShares Fundamental Pure Large Core Portfolio, PowerShares Fundamental Pure Large Growth Portfolio, PowerShares Fundamental Pure Mid Growth Portfolio, PowerShares Fundamental Pure Mid Value Portfolio, PowerShares Fundamental Pure Small Value Portfolio, PowerShares Water Resources Portfolio, PowerShares WilderHill Clean Energy Portfolio and PowerShares WilderHill Progressive Energy Portfolio, which was lower than the median advisory fee of its open-end index peer funds; and there was no comparable data for PowerShares Aerospace & Defense Portfolio, PowerShares CleantechTM Portfolio, PowerShares Dividend AchieversTM Portfolio, PowerShares Dynamic Basic Materials Sector Portfolio, PowerShares Dynamic Biotechnology & Genome Portfolio, PowerShares Dynamic Building & Construction Portfolio, PowerShares Dynamic Consumer Discretionary Sector Portfolio, PowerShares Dynamic Consumer Staples Sector Portfolio, PowerShares Dynamic Financial Sector Portfolio, PowerShares Dynamic Food & Beverage Portfolio, PowerShares Dynamic Healthcare Sector Portfolio, PowerShares Dynamic Industrials Sector Portfolio, PowerShares Dynamic Leisure and Entertainment Portfolio, PowerShares Dynamic Media Portfolio, PowerShares Dynamic Pharmaceuticals Portfolio, PowerShares Dynamic Retail Portfolio, PowerShares Financial Preferred Portfolio, PowerShares Global Listed Private Equity Portfolio, PowerShares Golden Dragon China Portfolio, PowerShares High Yield Equity Dividend AchieversTM Portfolio or PowerShares International Dividend AchieversTM Portfolio); but
• lower than the median advisory fee of its open-end actively-managed peer funds.
The Trustees determined that the advisory fees were reasonable, noting the complexity of the indexes, the distinguishing factors of the Funds, and the higher administrative, operational and management oversight costs for the Adviser. With respect to the Funds' net expense ratios, the Trustees noted that the net expense ratio for each Fund was:
• higher than the median net expense ratio of its ETF peer funds (except for the net expense ratio of each of PowerShares Dynamic OTC Portfolio, PowerShares FTSE RAFI US 1000 Portfolio, PowerShares FTSE RAFI US 1500 Small-Mid Portfolio, PowerShares Fundamental Pure Mid Core
100
Board Considerations Regarding Approval of Continuation of Investment Advisory Agreement (Continued)
Portfolio, PowerShares Fundamental Pure Mid Growth Portfolio, PowerShares Fundamental Pure Small Core Portfolio and PowerShares S&P 500® High Quality Portfolio, which was equal to or less than the median net expense ratio of its ETF peer funds); and
• higher than the median net expense ratio of its open-end index peer funds (except for the net expense ratio of each of PowerShares Dividend AchieversTM Portfolio, PowerShares DWA Technical LeadersTM Portfolio, PowerShares Dynamic Energy Exploration & Production Portfolio, PowerShares Energy Sector Portfolio, PowerShares Dynamic Large Cap Growth Portfolio, PowerShares Dynamic Large Cap Value Portfolio, PowerShares Dynamic Networking Portfolio, PowerShares Oil & Gas Services Portfolio, PowerShares Dynamic OTC Portfolio, PowerShares Dynamic Semiconductors Portfolio, PowerShares Dynamic Software Portfolio, PowerShares Dynamic Technology Sector Portfolio, PowerShares Dynamic Utilities Sector Portfolio, PowerShares FTSE RAFI US 1500 Small-Mid Portfolio, PowerShares Fundamental Pure Large Core Portfolio, PowerShares Fundamental Pure Large Growth Portfolio, PowerShares Fundamental Pure Large Value Portfolio, PowerShares Fundamental Pure Mid Core Portfolio, PowerShares Fundamental Pure Mid Growth Portfolio, PowerShares Fundamental Pure Mid Value Portfolio, PowerShares Fundamental Pure Small Core Portfolio, PowerShares Fundamental Pure Small Growth Portfolio, PowerShares Fundamental Pure Small Value Portfolio, PowerShares High Yield Equity Dividend AchieversTM Portfolio, PowerShares Lux Nanotech Portfolio, PowerShares S&P 500® High Quality Portfolio, PowerShares Water Resources Portfolio, PowerShares WilderHill Clean Energy Portfolio and PowerShares WilderHill Progressive Energy Portfolio, which was lower than the median net expense ratio of its open-end index peer funds; and there was no comparable data for PowerShares Aerospace & Defense Portfolio, PowerShares CleantechTM Portfolio, PowerShares Dynamic Basic Materials Sector Portfolio, PowerShares Dynamic Biotechnology & Genome Portfolio, PowerShares Dynamic Building & Construction Portfolio, PowerShares Dynamic Consumer Discretionary Sector Portfolio, PowerShares Dynamic Consumer Staples Sector Portfolio, PowerShares Dynamic Financial Sector Portfolio, PowerShares Dynamic Food & Beverage Portfolio, PowerShares Dynamic Healthcare Sector Portfolio, PowerShares Dynamic Industrials Sector Portfolio, PowerShares Dynamic Leisure and Entertainment Portfolio, PowerShares Dynamic Media Portfolio, PowerShares Dynamic Pharmaceuticals Portfolio, PowerShares Dynamic Retail Portfolio, PowerShares Financial Preferred Portfolio, PowerShares Global Listed Private Equity Portfolio, PowerShares Golden Dragon China Portfolio or PowerShares International Dividend AchieversTM Portfolio); but
• lower than the median net expense ratio of its 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, and noted those Funds for which license fees are included in the Funds' Expense Caps.
The Board concluded that the advisory fee and expense ratio of each Fund (giving effect to the Fund's Expense Cap) were reasonable and appropriate in light of the services provided.
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 or losses realized by the Adviser from its relationship to each Fund. The Trustees concluded that the estimated profitability to the Adviser of the advisory services provided to any of the Funds was not unreasonable.
101
Board Considerations Regarding Approval of Continuation of Investment Advisory Agreement (Continued)
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 and expense limitation agreed to by the Adviser. The Trustees noted that, for Funds whose expenses are higher than their respective Expense Caps, any reduction in that Fund's expenses would be enjoyed by the Adviser, but that Fund shareholders benefit from the lower expense ratio as a result of the Fund's Expense Cap. The Trustees also noted that the Excess Expense Agreement with the Trust provides that the Adviser is entitled to be reimbursed by each Fund, other than PowerShares Dynamic Market Portfolio and PowerShares Dynamic OTC Portfolio, 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 considered whether the advisory fee rate for each Fund was reasonable in relation to the asset size of that Fund, and concluded that the flat advisory fee was reasonable and appropriate, noting the Fund expenses the Adviser has borne as a result of the 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. No single factor was determinative in the Board's analysis.
102
Board Considerations Regarding Approval of Continuation of Investment Advisory Agreement for PowerShares NASDAQ Internet Portfolio
At a meeting held on April 18, 2013, the Board of Trustees of the PowerShares Exchange-Traded Fund Trust (the "Trust"), including the Independent Trustees, approved the continuation of the Investment Advisory Agreement between Invesco PowerShares Capital Management LLC (the "Adviser") and the Trust for PowerShares NASDAQ Internet Portfolio and PowerShares S&P 500 BuyWrite Portfolio (each, a "Fund" and together, the "Funds").
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 a 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 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. 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 and projected staffing, 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 oversight of the execution of portfolio transactions on behalf of the Funds. The Trustees also reviewed information on the performance of the Funds and the performance of their underlying indexes for the one-year, three-year, five-year and since-inception (June 12, 2008 for PowerShares NASDAQ Internet Portfolio and December 20, 2007 for PowerShares S&P 500 BuyWrite Portfolio) periods ended December 31, 2012, as applicable, including reports for each of the last three calendar years on the correlation and tracking error between each Fund's performance and the performance of its underlying index, as well as the Adviser's analysis of the tracking error between each Fund and its underlying index. In reviewing the tracking error report, the Trustees considered information provided by Ibbotson Associates, a consultant to the Independent Trustees, with respect to general expected tracking error ranges and various explanations for tracking error. The Trustees noted that for each period, the correlation and tracking error for each Fund was within the targeted range set forth in the Trust's registration statement. The Trustees concluded that each Fund was correlated to its underlying index and that the tracking error for each Fund was within an acceptable range given 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 concluded that the nature, extent and quality of services provided by the Adviser to the Funds under the Investment Advisory Agreement were appropriate and reasonable.
Fees, Expenses and Profitability. The Trustees reviewed and discussed the information provided by the Adviser on each Fund's net expense ratio and unitary advisory fee, as compared to information compiled by the Adviser from Lipper Inc. databases on the expense ratios of comparable exchange-traded funds
103
Board Considerations Regarding Approval of Continuation of Investment Advisory Agreement for PowerShares NASDAQ Internet Portfolio (Continued)
("ETFs"), open-end (non-ETF) index funds and open-end actively-managed funds. The Trustees noted that the annual unitary advisory fee is 0.60% for PowerShares NASDAQ Internet Portfolio and 0.75% for PowerShares S&P 500 BuyWrite Portfolio, and that the Adviser pays all other operating expenses of each Fund, except that each Fund pays its brokerage commissions and other trading expenses, taxes, interest and extraordinary expenses.
The Trustees noted that the Adviser represented that it does not provide investment advisory services to any clients, other than ETFs overseen by the Trustees, with comparable investment strategies as the Funds. The Trustees noted that PowerShares NASDAQ Internet Portfolio's advisory fee was higher than the median net expense ratio of its ETF peer funds, but was lower than the median net expense ratios of its open-end index peer funds and open-end actively-managed peer funds. The Trustees noted that PowerShares S&P 500 BuyWrite Portfolio's advisory fee was lower than the median net expense ratios of its ETF peer funds, open-end index peer funds and open-end actively-managed peer funds. The Trustees noted that each Fund's advisory fee was reasonable because of the complexity of the indexes, the distinguishing factors of the Funds and the higher administrative, operational and management oversight costs for the Adviser. The Trustees also noted that a portion of each Fund's advisory fee was attributable to a license fee payable out of the unitary fee charged to that Fund. The Board concluded that the unitary advisory fee charged to each Fund was reasonable and appropriate in light of the services provided.
In conjunction with their review of the unitary advisory fee, the Trustees also considered information provided by the Adviser on the revenues received by the Adviser under the Investment Advisory Agreement. The Trustees reviewed information provided by the Adviser on its profitability as well as any profits or losses realized by the Adviser from its relationship to each Fund. The Trustees concluded that the estimated profitability to the Adviser of the advisory services provided to each Fund was 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 and expense ratio. The Trustees noted that any reduction in fixed costs associated with the management of the Funds would be enjoyed by the Adviser, but a unitary fee provides certainty in expenses for the Funds. The Trustees considered whether the advisory fee rate for each Fund was reasonable in relation to the asset size of that 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 relationships 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. No single factor was determinative in the Board's analysis.
104
PROXY VOTING POLICIES AND PROCEDURES
A description of the Trust's 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) 983-0903. 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) 983-0903; or (ii) accessing the Trust's Form N-PX on the Commission's website at www.sec.gov.
QUARTERLY PORTFOLIOS
The Trust files its complete schedule of portfolio holdings for the Funds with the Commission for the first and third quarters of each fiscal year on Form N-Q. The Trust's Forms N-Q are available on the Commission's website at www.sec.gov. The Trust's 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.
FREQUENCY DISTRIBUTION OF DISCOUNTS AND PREMIUMS
A table showing the number of days the market price of each Fund's shares was greater than the Fund's net asset value, and the number of days it was less than the Fund's net asset value (i.e., premium or discount) for the most recently completed calendar year, and the calendar quarters since that year end (or the life of the Fund, if shorter) may be found at the Fund's website at www.invescopowershares.com.
301 West Roosevelt Road
Wheaton, IL 60187
800.983.0903
www.invescopowershares.com
© 2013 Invesco PowerShares Capital Management LLC P-PS-AR-3
2013 Annual Report to Shareholders
April 30, 2013
PowerShares Dynamic Large Cap Growth Portfolio (PWB)
PowerShares Dynamic Large Cap Value Portfolio (PWV)
PowerShares Fundamental Pure Large Core Portfolio (PXLC)
PowerShares Fundamental Pure Large Growth Portfolio (PXLG)
PowerShares Fundamental Pure Large Value Portfolio (PXLV)
PowerShares Fundamental Pure Mid Core Portfolio (PXMC)
PowerShares Fundamental Pure Mid Growth Portfolio (PXMG)
PowerShares Fundamental Pure Mid Value Portfolio (PXMV)
PowerShares Fundamental Pure Small Core Portfolio (PXSC)
PowerShares Fundamental Pure Small Growth Portfolio (PXSG)
PowerShares Fundamental Pure Small Value Portfolio (PXSV)
PowerShares Zacks Micro Cap Portfolio (PZI)
Table of Contents
The Market Environment | 2 | ||||||
Manager's Analysis | 4 | ||||||
Fees and Expenses | 51 | ||||||
Fundamental Pure and Style Portfolios | |||||||
Schedules of Investments | |||||||
PowerShares Dynamic Large Cap Growth Portfolio (PWB) | 53 | ||||||
PowerShares Dynamic Large Cap Value Portfolio (PWV) | 54 | ||||||
PowerShares Fundamental Pure Large Core Portfolio (PXLC) | 55 | ||||||
PowerShares Fundamental Pure Large Growth Portfolio (PXLG) | 56 | ||||||
PowerShares Fundamental Pure Large Value Portfolio (PXLV) | 57 | ||||||
PowerShares Fundamental Pure Mid Core Portfolio (PXMC) | 59 | ||||||
PowerShares Fundamental Pure Mid Growth Portfolio (PXMG) | 61 | ||||||
PowerShares Fundamental Pure Mid Value Portfolio (PXMV) | 63 | ||||||
PowerShares Fundamental Pure Small Core Portfolio (PXSC) | 66 | ||||||
PowerShares Fundamental Pure Small Growth Portfolio (PXSG) | 72 | ||||||
PowerShares Fundamental Pure Small Value Portfolio (PXSV) | 78 | ||||||
PowerShares Zacks Micro Cap Portfolio (PZI) | 87 | ||||||
Statements of Assets and Liabilities | 92 | ||||||
Statements of Operations | 94 | ||||||
Statements of Changes in Net Assets | 96 | ||||||
Financial Highlights | 100 | ||||||
Notes to Financial Statements | 106 | ||||||
Report of Independent Registered Public Accounting Firm | 122 | ||||||
Tax Information | 123 | ||||||
Trustees and Officers | 124 | ||||||
Board Considerations Regarding Approval of Continuation of Investment Advisory Agreement | 133 |
The Market Environment
Domestic Equity:
The fiscal year ended April 30, 2013, began amid negative investor sentiment; the ongoing eurozone sovereign debt crisis intensified and equity markets declined. Throughout the summer, news from Europe and China was poor; this precipitated a slowdown in the U.S., where market performance and economic data were mixed. Employment data, for instance, showed some improvement – but not enough. Companies generally met earnings expectations but missed revenue guidance.
In early fall, as the European Central Bank implemented new measures to support member economies and the U.S. Federal Reserve initiated a third round of quantitative easing, consumer sentiment began to improve. Businesses, on the other hand, grew more hesitant to spend in the second half of the fiscal year. This was due in large part to uncertainty surrounding U.S. election results, "fiscal cliff" negotiations and sequestration spending cuts in early 2013. However, for the first time in years, U.S. markets appeared willing to look past national headline events. U.S. equity markets were generally strong in the final five months of the reporting period, with major market indexes setting multi-year or even all-time highs.
2
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Manager's Analysis
PowerShares Dynamic Large Cap Growth Portfolio (ticker: PWB)
As an index fund, the PowerShares Dynamic Large Cap Growth Portfolio (the "Fund") is passively managed and attempts to track the returns of an underlying index. The Fund seeks investment results that generally correspond (before fees and expenses) to the price and yield of the Dynamic Large Cap Growth IntellidexSM Index (the "Index"). The Fund generally will invest at least 90% of its total assets in common stocks of large capitalization companies that comprise the Index.
The Index includes stocks from a universe of the 2,000 largest U.S. stocks (by market capitalization) traded on the NYSE, NYSE MKT and the NASDAQ. NYSE Arca, Inc., the index provider, selects and ranks companies for inclusion in the Index based on their capital appreciation potential using a proprietary NYSE Arca Intellidex model. The index provider then ranks the universe by market cap to determine the largest 250 companies, and then divides these stocks into two groups: the 100 most growth companies and the 100 most value companies based on a multi-factor methodology. The Index includes the largest 50 growth stocks, ranks them according to their model score and separates them into two groups: largest and smallest, based on market capitalization. The index then selects the 15 top-ranked relatively larger stocks that, which collectively receive 50% of the Index weighting and the 35 top-ranked relatively smaller stocks, which collectively receive 50% of the Index weighting.
For the fiscal year ended April 30, 2013, on a market price basis, the Fund returned 14.92%. On a net asset value ("NAV") basis, the Fund returned 14.97%. During the same time period, the Index returned 15.62%. During the fiscal year, the Fund fully replicated the components of the Index; therefore, the Fund's performance (on a NAV basis) differed from the return of the Index primarily due to fees and operating expenses that the Fund incurred during the period.
During this same time period, the S&P 500® Growth Index returned 13.95%, the Russell 1000® Growth Index returned 12.60%, and the S&P 500® Index returned 16.89%. The S&P 500® Growth Index, Russell 1000® Growth Index and S&P 500® Index (the "Benchmark Indices") are unmanaged indices weighted by market capitalization based on the average performance of approximately 292, 576 and 500 securities, respectively. The adviser provided these additional comparative benchmarks to help investors better understand how the investment results of the Fund compare to the performance of other indices similar to the Index, as well as to that of a broad-based market benchmark.
The adviser selected the S&P 500® Growth Index and Russell 1000® Growth Index as comparative indices to the Fund because of their recognition in the marketplace and their shared exposure to large cap growth stocks. These reasons make their performance relevant when comparing to the Fund's performance. The S&P 500® Index does not have the same specific large cap growth stock relevance as these indices, however, it was also selected for its recognition in the marketplace, and its performance comparison is a useful measure for investors as a broad representation of the overall U.S. stock market.
The performance of the Fund differed from these Benchmark Indices in part because the Fund tracks an Index that employs a modified equal weighting and stock selection methodology, whereas the Benchmark Indices select and weight stocks based on market capitalization. More specifically, relative to the S&P 500® Growth Index and the Russell 1000® Growth Index, the Fund was underweight in the Information Technology sector and overweight in the Consumer Discretionary sector while also benefiting from performance of specific stocks that were included in the Index from the Consumer Discretionary sector during the fiscal year ended April 30, 2013. The majority of the Fund's outperformance relative to these indices during the period can be attributed to these sector allocations and that positive stock performance.
4
Manager's Analysis (Continued)
PowerShares Dynamic Large Cap Growth Portfolio (ticker: PWB)
Relative to the S&P 500® Index, the Fund was overweight in the Consumer Staples sector and experienced the poor performance of specific stocks within the Index from that sector during the fiscal year ended April 30, 2013. The majority of the Fund's underperformance relative to the S&P 500® Index during that period can be attributed to this sector allocation and that specific poor stock performance.
For the fiscal year ended April 30, 2013, the Consumer Discretionary sector contributed most significantly to the Fund's return, followed by the Health Care and Financials sectors, respectively. There were no detracting sectors.
Positions that contributed most significantly to the Fund's return included Home Depot Inc., a consumer discretionary company (portfolio average weight of 3.43%); and Comcast Corp. Class A, a consumer discretionary company (portfolio average weight of 3.46%). Positions that detracted most significantly from the Fund's return included Apple Inc., an information technology company (portfolio average weight of 3.17%); and Teradata Corp., an information technology company (no longer held at April 30, 2013).
Sector Breakdown (% of the Fund's
Net Assets) as of April 30, 2013
Consumer Discretionary | 30.0 | ||||||
Information Technology | 21.4 | ||||||
Consumer Staples | 13.5 | ||||||
Financials | 11.9 | ||||||
Health Care | 11.4 | ||||||
Materials | 4.2 | ||||||
Industrials | 3.4 | ||||||
Energy | 2.7 | ||||||
Telecommunication Services | 1.5 | ||||||
Money Market Fund | 0.1 | ||||||
Liabilities in excess of other assets | (0.1 | ) |
Top Ten Fund Holdings (% of the Fund's
Net Assets) as of April 30, 2013
Security | |||||||
Gilead Sciences, Inc. | 3.7 | ||||||
Walt Disney Co. (The) | 3.6 | ||||||
Home Depot, Inc. (The) | 3.5 | ||||||
Union Pacific Corp. | 3.4 | ||||||
News Corp., Class A | 3.4 | ||||||
Visa, Inc., Class A | 3.3 | ||||||
MasterCard, Inc., Class A | 3.3 | ||||||
Berkshire Hathaway, Inc., Class B | 3.3 | ||||||
Comcast Corp., Class A | 3.2 | ||||||
Google, Inc., Class A | 3.2 | ||||||
Total | 33.9 |
5
Manager's Analysis (Continued)
PowerShares Dynamic Large Cap Growth Portfolio (ticker: PWB)
Growth of a $10,000 Investment Since Inception†
Fund Performance History (%) As of April 30, 2013
3 Years | 3 Years | 5 Years | 5 Years | Fund Inception† | |||||||||||||||||||||||||||
1 Year | Avg. Ann.†† | Cumulative | Avg. Ann.†† | Cumulative | Avg. Ann.†† | Cumulative | |||||||||||||||||||||||||
Index | |||||||||||||||||||||||||||||||
Dynamic Large Cap Growth IntellidexSM Index | 15.62 | % | 14.35 | % | 49.54 | % | 5.76 | % | 32.29 | % | 5.80 | % | 58.44 | % | |||||||||||||||||
S&P 500® Growth Index | 13.95 | % | 13.60 | % | 46.61 | % | 6.68 | % | 38.15 | % | 6.42 | % | 66.28 | % | |||||||||||||||||
Russell 1000® Growth Index | 12.60 | % | 13.44 | % | 45.97 | % | 6.66 | % | 38.01 | % | 6.82 | % | 71.45 | % | |||||||||||||||||
S&P 500® Index | 16.89 | % | 12.80 | % | 43.54 | % | 5.21 | % | 28.92 | % | 5.72 | % | 57.50 | % | |||||||||||||||||
Fund | |||||||||||||||||||||||||||||||
NAV Return | 14.97 | % | 13.61 | % | 46.65 | % | 5.05 | % | 27.93 | % | 5.09 | % | 49.98 | % | |||||||||||||||||
Market Price Return | 14.92 | % | 13.60 | % | 46.58 | % | 5.04 | % | 27.87 | % | 5.06 | % | 49.61 | % |
Fund Inception: March 3, 2005
Performance quoted above represents past performance. Past performance is not a guarantee of future results and current performance may be higher or lower than performance quoted. Investment returns and principal value will fluctuate, and shares of the Fund ("Fund Shares"), when redeemed or sold, may be worth more or less than their original cost. Had the adviser not waived fees and/or reimbursed expenses in the past, performance would have been lower. According to the Fund's current prospectus, the total gross annual operating expense ratio was indicated as 0.61%. The Financial Highlights section of the Shareholders Report presents the expense ratios based on expenses incurred during the period covered by this report. NAV and Market Price returns assume that dividends and capital gain distributions have been reinvested in the Fund at NAV and Market 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.
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.
† Fund and Index returns are based on the inception date of the Fund. Returns for the Benchmark Indices are based on the closest month-end to the Fund's inception date.
†† Average annualized.
6
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Manager's Analysis
PowerShares Dynamic Large Cap Value Portfolio (ticker: PWV)
As an index fund, the PowerShares Dynamic Large Cap Value Portfolio (the "Fund") is passively managed and attempts to track the returns of an underlying index. The Fund seeks investment results that generally correspond (before fees and expenses) to the price and yield of the Dynamic Large Cap Value IntellidexSM Index (the "Index"). The Fund generally will invest at least 90% of its total assets in common stocks of large capitalization companies that comprise the Index.
The Index includes stocks from a universe of the 2,000 largest U.S. stocks (by market capitalization) traded on the NYSE, NYSE MKT and the NASDAQ. NYSE Arca, Inc., the index provider, selects and ranks companies for inclusion in the Index based on their capital appreciation potential using a proprietary NYSE Arca Intellidex model. The index provider then ranks the universe by market cap to determine the largest 250 companies, and then divides these stocks into two groups: the 100 most growth companies and the 100 most value companies based on a multi-factor methodology. The Index includes the largest 50 value stocks, ranks them according to their model score and separates them into two groups: largest and smallest, based on market capitalization. The index then selects the 15 top-ranked relatively larger stocks that, which collectively receive 50% of the Index weighting and the 35 top-ranked relatively smaller stocks, which collectively receive 50% of the Index weighting.
For the fiscal year ended April 30, 2013, on a market price basis, the Fund returned 24.72%. On a net asset value ("NAV") basis, the Fund returned 24.55%. During the same time period, the Index returned 25.49%. During the fiscal year, the Fund fully replicated the components of the Index; therefore, the Fund's performance differed from the return of the Index primarily due to fees and operating expenses that the Fund incurred during the period.
During this same time period, the S&P 500® Value Index returned 20.33%, the Russell 1000® Value Index returned 21.80%, and the S&P 500® Index returned 16.89%. The S&P 500® Value Index, Russell 1000® Value Index and S&P 500® Index (the "Benchmark Indices") are unmanaged indices weighted by market capitalization based on the average performance of approximately 358, 698 and 500 securities, respectively. The adviser provided these additional comparative benchmarks to help investors better understand how the investment results of the Fund compare to the performance of other indices similar to the Index, as well as to that of a broad-based market benchmark.
The adviser selected the S&P 500® Value Index and Russell 1000® Value Index as comparative indices to the Fund because of their recognition in the marketplace and their shared exposure to large cap value stocks. These reasons make their performance relevant when comparing to the Fund's performance. The S&P 500® Index does not have the same specific large cap value stock relevance as these indices; however, it was also selected for its recognition in the marketplace, and its performance comparison is a useful measure for investors as a broad representation of the overall U.S. stock market.
The performance of the Fund differed from these Benchmark Indices, in part because the Fund tracks an Index that employs a modified equal weighting and stock selection methodology, whereas the Benchmark Indices select and weight stocks based on market capitalization. Relative to the S&P 500® Value Index and the Russell 1000® Value Index, the Fund was overweight in the Energy and Health Care sectors and underweight in the Consumer Staples sector during the fiscal year ended April 30, 2013. The majority of the Fund's outperformance relative to these indices during the period can be attributed to these sector allocations.
8
Manager's Analysis (Continued)
PowerShares Dynamic Large Cap Value Portfolio (ticker: PWV)
Relative to the S&P 500® Index, the Fund benefited from positive performance of certain stocks included in the Index from the Energy and Consumer Discretionary sectors during the fiscal year ended April 30, 2013. The majority of the Fund's outperformance relative to the S&P 500® Index during that period can be attributed to the positive performance of these stocks.
For the fiscal year ended April 30, 2013, the Health Care sector contributed most significantly to the Fund's return, followed by the Energy and Financials sectors, respectively. There were no detracting sectors.
Positions that contributed most significantly to the Fund's return included Wal-Mart Stores, Inc., a consumer staples company (portfolio average weight of 1.86%); and Phillips 66, an energy company (portfolio average weight of 1.38%). Positions that detracted most significantly from the Fund's return included Archer Daniels Midland Co., a consumer staples company (no longer held at April 30, 2013); and Prudential Financial, Inc., a financials company (portfolio average weight of 0.35%).
Sector Breakdown (% of the Fund's
Net Assets) as of April 30, 2013
Financials | 22.1 | ||||||
Health Care | 20.8 | ||||||
Energy | 13.3 | ||||||
Information Technology | 11.0 | ||||||
Telecommunication Services | 8.4 | ||||||
Consumer Staples | 8.0 | ||||||
Industrials | 7.5 | ||||||
Utilities | 4.4 | ||||||
Consumer Discretionary | 3.0 | ||||||
Materials | 1.5 | ||||||
Liabilities in excess of other assets | (0.0 | ) |
Top Ten Fund Holdings (% of the Fund's
Net Assets) as of April 30, 2013
Security | |||||||
Microsoft Corp. | 3.7 | ||||||
Verizon Communications, Inc. | 3.7 | ||||||
Johnson & Johnson | 3.5 | ||||||
Wal-Mart Stores, Inc. | 3.4 | ||||||
Merck & Co., Inc. | 3.4 | ||||||
Pfizer, Inc. | 3.3 | ||||||
Wells Fargo & Co. | 3.3 | ||||||
Chevron Corp. | 3.3 | ||||||
AT&T, Inc. | 3.3 | ||||||
ConocoPhillips | 3.2 | ||||||
Total | 34.1 |
9
Manager's Analysis (Continued)
PowerShares Dynamic Large Cap Value Portfolio (ticker: PWV)
Growth of a $10,000 Investment Since Inception†
Fund Performance History (%) As of April 30, 2013
3 Years | 3 Years | 5 Years | 5 Years | Fund Inception† | |||||||||||||||||||||||||||
1 Year | Avg. Ann.†† | Cumulative | Avg. Ann.†† | Cumulative | Avg. Ann.†† | Cumulative | |||||||||||||||||||||||||
Index | |||||||||||||||||||||||||||||||
Dynamic Large Cap Value IntellidexSM Index | 25.49 | % | 15.27 | % | 53.14 | % | 8.79 | % | 52.40 | % | 9.59 | % | 111.18 | % | |||||||||||||||||
S&P 500® Value Index | 20.33 | % | 12.08 | % | 40.81 | % | 3.68 | % | 19.79 | % | 4.96 | % | 48.50 | % | |||||||||||||||||
Russell 1000® Value Index | 21.80 | % | 12.35 | % | 41.81 | % | 4.17 | % | 22.66 | % | 5.19 | % | 51.16 | % | |||||||||||||||||
S&P 500® Index | 16.89 | % | 12.80 | % | 43.54 | % | 5.21 | % | 28.92 | % | 5.72 | % | 57.50 | % | |||||||||||||||||
Fund | |||||||||||||||||||||||||||||||
NAV Return | 24.55 | % | 14.50 | % | 50.11 | % | 8.03 | % | 47.11 | % | 8.84 | % | 99.59 | % | |||||||||||||||||
Market Price Return | 24.72 | % | 14.49 | % | 50.08 | % | 8.05 | % | 47.25 | % | 8.83 | % | 99.40 | % |
Fund Inception: March 3, 2005
Performance quoted above represents past performance. Past performance is not a guarantee of future results and current performance may be higher or lower than performance quoted. Investment returns and principal value will fluctuate, and shares of the Fund ("Fund Shares"), when redeemed or sold, may be worth more or less than their original cost. Had the adviser not waived fees and/or reimbursed expenses in the past, performance would have been lower. According to the Fund's current prospectus, the total gross annual operating expense ratio was indicated as 0.59%. The Financial Highlights section of the Shareholders Report presents the expense ratios based on expenses incurred during the period covered by this report. NAV and Market Price returns assume that dividends and capital gain distributions have been reinvested in the Fund at NAV and Market 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.
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.
† Fund and Index returns are based on the inception date of the Fund. Returns for the Benchmark Indices are based on the closest month-end to the Fund's inception date.
†† Average annualized.
10
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Manager's Analysis
PowerShares Fundamental Pure Large Core Portfolio (ticker: PXLC)
As an index fund, the PowerShares Fundamental Pure Large Core Portfolio (the "Fund") is passively managed and attempts to track the returns of an underlying index. The Fund seeks investment results that generally correspond (before fees and expenses) to the price and yield of the RAFI® Fundamental Large Core Index (the "Index"). The Fund generally will invest at least 90% of its total assets in the component securities that comprise the Index.
The Index is composed of stocks from a universe of the 2,500 largest U.S. companies based on four fundamental measures of company size averaged over the prior five year period: latest available book value, and income, sales and dividends. The index provider calculates a fundamental weight for each stock then classifies the top 70% of those stocks measured by fundamental weight as "large," the next 20% as "mid," and the last 10% as "small." Next, the index provider classifies each stock as "growth," "core" or "value" based on fundamental measures of these characteristics. Finally, the index provider identifies the common stocks that it classifies as "large" and "core" for inclusion into the Index and weights them according to their composite fundamental weight.
For the fiscal year ended April 30, 2013, on a market price basis, the Fund returned 19.15%. On a net asset value ("NAV") basis, the Fund returned 19.10%. During the same time period, the Blended – RAFI® Fundamental Large Core Index returned 19.57%. During the fiscal year, the Fund fully replicated the components of the Index; therefore, the Fund's performance differed from the return of the Index primarily due to fees and operating expenses that the Fund incurred during the period.
During this same time period, the Russell Top 200® Index returned 16.30%, and the S&P 500® Index returned 16.89%. The Russell Top 200® Index and S&P 500® Index (the "Benchmark Indices") are unmanaged indices weighted by market capitalization based on the average performance of approximately 194 and 500 securities, respectively. The adviser provided these additional comparative benchmarks to help investors better understand how the investment results of the Fund compare to the performance of other indices similar to the Index, as well as to that of broad-based market benchmarks.
The adviser selected the Russell Top 200® Index and the S&P 500® Index to provide comparative benchmark performance measurement because of their recognition in the marketplace and their similar exposure to large cap U.S. stocks.
The performance of the Fund differed from these Benchmark Indices, in part because the Fund tracks an Index that employs a fundamental weighting and stock selection methodology, whereas the Benchmark Indices select and weight stocks based on market capitalization. Relative to the Russell Top 200® Index, the Fund was similarly exposed to the Consumer Discretionary sector, overweight in the Health Care sector, and underweight in the Energy sector and benefited from the positive performance of specific stocks included in the Index from these sectors during the fiscal year ended April 30, 2013. The majority of the Fund's outperformance relative to the Russell Top 200® Index during that period can be attributed to these sector allocations and the performance of these specific stocks.
Relative to the S&P 500® Index, the Fund was overweight in the Health Care sector and underweight in the Consumer Discretionary sector and benefited from the positive performance of specific stocks included in the Index from these sectors during the fiscal year ended April 30, 2013. The majority of the Fund's outperformance relative to the S&P 500® Index during that period can be attributed to these sector allocations and the performance of these specific stocks.
For the fiscal year ended April 30, 2013, the Health Care sector contributed most significantly to the Fund's return, followed by the Consumer Staples and Consumer Discretionary sectors, respectively. The Information Technology sector detracted most from the Fund's return.
12
Manager's Analysis (Continued)
PowerShares Fundamental Pure Large Core Portfolio (ticker: PXLC)
Positions that contributed most significantly to the Fund's return included Johnson & Johnson, a health care company (portfolio average weight of 5.71%); and Wal-Mart Stores, Inc., a consumer staples company (portfolio average weight of 5.37%). Positions that detracted most significantly from the Fund's return included Microsoft Corp., an information technology company (no longer held at April 30, 2013); and Intel Corp., an information technology company (portfolio average weight of 3.17%).
Sector Breakdown (% of the Fund's
Net Assets) as of April 30, 2013
Financials | 22.2 | ||||||
Health Care | 20.6 | ||||||
Consumer Staples | 15.3 | ||||||
Consumer Discretionary | 12.8 | ||||||
Information Technology | 10.3 | ||||||
Industrials | 9.0 | ||||||
Energy | 5.1 | ||||||
Materials | 2.5 | ||||||
Utilities | 2.2 | ||||||
Money Market Fund | 0.2 | ||||||
Liabilities in excess of other assets | (0.2 | ) |
Top Ten Fund Holdings (% of the Fund's
Net Assets) as of April 30, 2013
Security | |||||||
Wells Fargo & Co. | 6.4 | ||||||
Johnson & Johnson | 5.7 | ||||||
Procter & Gamble Co. (The) | 5.2 | ||||||
Berkshire Hathaway, Inc., Class B | 5.0 | ||||||
Wal-Mart Stores, Inc. | 4.7 | ||||||
Intel Corp. | 3.9 | ||||||
International Business Machines Corp. | 3.9 | ||||||
Ford Motor Co. | 3.2 | ||||||
Abbott Laboratories | 2.5 | ||||||
UnitedHealth Group, Inc. | 2.2 | ||||||
Total | 42.7 |
13
Manager's Analysis (Continued)
PowerShares Fundamental Pure Large Core Portfolio (ticker: PXLC)
Growth of a $10,000 Investment Since Inception†
Fund Performance History (%) As of April 30, 2013
3 Years | 3 Years | 5 Years | 5 Years | Fund Inception† | |||||||||||||||||||||||||||
1 Year | Avg. Ann.††† | Cumulative | Avg. Ann.††† | Cumulative | Avg. Ann.††† | Cumulative | |||||||||||||||||||||||||
Index | |||||||||||||||||||||||||||||||
Blended – RAFI® Fundamental Large Core Index†† | 19.57 | % | 13.10 | % | 44.67 | % | 6.24 | % | 35.35 | % | 5.65 | % | 42.24 | % | |||||||||||||||||
S&P 500® Index | 16.89 | % | 12.80 | % | 43.54 | % | 5.21 | % | 28.92 | % | 4.29 | % | 30.96 | % | |||||||||||||||||
Russell Top 200® Index | 16.30 | % | 12.58 | % | 42.68 | % | 4.80 | % | 26.43 | % | 4.06 | % | 29.08 | % | |||||||||||||||||
Fund | |||||||||||||||||||||||||||||||
NAV Return | 19.10 | % | 12.52 | % | 42.45 | % | 5.61 | % | 31.37 | % | 4.99 | % | 36.67 | % | |||||||||||||||||
Market Price Return | 19.15 | % | 12.53 | % | 42.49 | % | 5.62 | % | 31.47 | % | 4.99 | % | 36.62 | % |
Fund Inception: December 1, 2006
Performance quoted above represents past performance. Past performance is not a guarantee of future results and current performance may be higher or lower than performance quoted. Investment returns and principal value will fluctuate, and shares of the Fund ("Fund Shares"), when redeemed or sold, may be worth more or less than their original cost. Had the adviser not waived fees and/or reimbursed expenses, performance would have been lower. The adviser has contractually agreed to waive fees and/or pay certain Fund expenses through August 31, 2014. According to the Fund's current prospectus, the total gross annual operating expense ratio was indicated as 0.86%. The Financial Highlights section of the Shareholders Report presents the expense ratios based on expenses incurred during the period covered by this report. NAV and Market Price returns assume that dividends and capital gain distributions have been reinvested in the Fund at NAV and Market 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.
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.
† Fund and Index returns are based on the inception date of the Fund. Returns for the Benchmark Indices are based on the closest month-end to the Fund's inception date.
†† Effective June 16, 2011, the Fund's underlying index and investment policies changed. Prior to June 16, 2011, the Fund sought to replicate, before fees and expenses, the performance of the Dynamic Large Cap IntellidexSM Index. "3 Years," "5 Years" and "Fund Inception" performance for the RAFI® Fundamental Large Core Index was not available in the prior year because that Index did not commence calculation and publication until April 15, 2011. The data shown as the Blended-Index is comprised of the performance of the Dynamic Large Cap IntellidexSM Index, the Fund's previous underlying index, from Fund inception through the conversion date, June 16, 2011, followed by the performance of the RAFI® Fundamental Large Core Index starting from the conversion date through April 30, 2013.
††† Average annualized.
14
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Manager's Analysis
PowerShares Fundamental Pure Large Growth Portfolio (ticker: PXLG)
As an index fund, the PowerShares Fundamental Pure Large Growth Portfolio (the "Fund") is passively managed and attempts to track the returns of an underlying index. The Fund seeks investment results that generally correspond (before fees and expenses) to the price and yield of the RAFI® Fundamental Large Growth Index (the "Index"). The Fund generally will invest at least 90% of its total assets in the component securities that comprise the Index.
The Index is composed of stocks from a universe of the 2,500 largest U.S. companies based on four fundamental measures of company size averaged over the prior five year period: latest available book value, income, sales and dividends. The index provider calculates a fundamental weight for each stock then classifies the top 70% of those stocks measured by fundamental weight as "large," the next 20% as "mid," and the last 10% as "small." Next, the index provider classifies each stock as "growth," "core" or "value" based on fundamental measures of these characteristics. Finally, the index provider identifies the common stocks that it classifies as "large" and "growth" for inclusion into the Index and weights them according to their composite fundamental weight.
For the fiscal year ended April 30, 2013, on a market price basis, the Fund returned 14.83%. On a net asset value ("NAV") basis, the Fund returned 14.87%. During the same time period, the Index returned 15.31%. During the fiscal year, the Fund fully replicated the components of the Index; therefore, the Fund's performance differed from the return of the Index primarily due to fees and operating expenses that the Fund incurred during the period.
During this same time period, the Russell 1000® Growth Index returned 12.60%, the S&P 500® Growth Index returned 13.95%, and the S&P 500® Index returned 16.89%. The Russell 1000® Growth Index, S&P 500® Growth Index and S&P 500® Index (the "Benchmark Indices") are unmanaged indices weighted by market capitalization based on the average performance of approximately 576, 292 and 500 securities, respectively. The adviser provided these additional comparative benchmarks to help investors better understand how the investment results of the Fund compare to the performance of other indices similar to the Index, as well as to that of broad-based market benchmarks.
The adviser selected the Russell 1000® Growth Index and S&P 500® Growth Index as comparative indices to the Fund because of their recognition in the marketplace and their shared exposure to large cap growth stocks. These reasons make their performance relevant when comparing to the Fund's performance. The S&P 500® Index does not have the same specific size and style relevance; however, it was also selected for its recognition in the marketplace, and its performance comparison is a useful measure for investors as a broad representation of the overall U.S. stock market.
The performance of the Fund differed from these Benchmark Indices in part because the Fund tracks an Index that employs a fundamental weighting and stock selection methodology, whereas the Benchmark Indices select and weight stocks based on market capitalization. Relative to the Russell 1000® Growth Index and the S&P 500® Growth Index, the Fund was underweight in the Information Technology sector and overweight in the Consumer Staples sector and benefitted from positive performance of specific stocks that were included in the Index from these sectors during the fiscal year ended April 30, 2013. The majority of the Fund's outperformance relative to these indices during that period can be attributed to these sector allocations and the positive performance of these specific stocks.
Relative to the S&P 500® Index, the Fund was similarly exposed to the Energy and Materials sectors but suffered from the poor performance of specific stocks that were included in the Index from these sectors during the fiscal year ended April 30, 2013. The majority of the Fund's underperformance relative to the S&P 500® Index during that period can be attributed to the poor performance of these specific stocks.
16
Manager's Analysis (Continued)
PowerShares Fundamental Pure Large Growth Portfolio (ticker: PXLG)
For the fiscal year ended April 30, 2013, the Consumer Staples sector contributed most significantly to the Fund's return, followed by the Health Care and Information Technology sectors, respectively. The Materials sector detracted most from the Fund's return, followed by the Energy sector.
Positions that contributed most significantly to the Fund's return included Merck & Co., Inc, a health care company (portfolio average weight of 6.37%); and Procter & Gamble Co., a consumer staples company (no longer held at April 30, 2013). Positions that detracted most significantly from the Fund's return included Apple, Inc., an information technology company (portfolio average weight of 4.48%); and Freeport-McMoRan Copper & Gold, Inc., a materials company (portfolio average weight of 1.66%).
Sector Breakdown (% of the Fund's
Net Assets) as of April 30, 2013
Information Technology | 29.8 | ||||||
Consumer Staples | 19.6 | ||||||
Energy | 13.8 | ||||||
Health Care | 12.0 | ||||||
Consumer Discretionary | 8.0 | ||||||
Materials | 5.7 | ||||||
Financials | 4.8 | ||||||
Industrials | 4.8 | ||||||
Telecommunication Services | 1.5 | ||||||
Money Market Fund | 0.0 | ||||||
Liabilities in excess of other assets | (0.0 | ) |
Top Ten Fund Holdings (% of the Fund's
Net Assets) as of April 30, 2013
Security | |||||||
Microsoft Corp. | 8.3 | ||||||
Apple, Inc. | 5.9 | ||||||
Merck & Co., Inc. | 5.8 | ||||||
Coca-Cola Co. (The) | 4.8 | ||||||
PepsiCo, Inc. | 4.2 | ||||||
Philip Morris International, Inc. | 4.0 | ||||||
Comcast Corp., Class A | 3.7 | ||||||
CVS Caremark Corp. | 3.3 | ||||||
Occidental Petroleum Corp. | 3.2 | ||||||
Google, Inc., Class A | 3.0 | ||||||
Total | 46.2 |
17
Manager's Analysis (Continued)
PowerShares Fundamental Pure Large Growth Portfolio (ticker: PXLG)
Growth of a $10,000 Investment Since Inception†
Fund Performance History (%) As of April 30, 2013
Fund Inception† | |||||||||||||||
1 Year | Avg. Ann.†† | Cumulative | |||||||||||||
Index | |||||||||||||||
RAFI® Fundamental Large Growth Index | 15.31 | % | 15.79 | % | 31.62 | % | |||||||||
S&P 500® Growth Index | 13.95 | % | 13.10 | % | 25.32 | % | |||||||||
Russell 1000® Growth Index | 12.60 | % | 12.39 | % | 23.88 | % | |||||||||
S&P 500® Index | 16.89 | % | 13.41 | % | 25.95 | % | |||||||||
Fund | |||||||||||||||
NAV Return | 14.87 | % | 15.37 | % | 30.73 | % | |||||||||
Market Price Return | 14.83 | % | 15.39 | % | 30.76 | % |
Fund Inception: June 16, 2011
Performance quoted above represents past performance. Past performance is not a guarantee of future results and current performance may be higher or lower than performance quoted. Investment returns and principal value will fluctuate, and shares of the Fund ("Fund Shares"), when redeemed or sold, may be worth more or less than their original cost. Had the adviser not waived fees and/or reimbursed expenses, performance would have been lower. The adviser has contractually agreed to waive fees and/or pay certain Fund expenses through August 31, 2014. According to the Fund's current prospectus, the total gross annual operating expense ratio was indicated as 7.69%. The Financial Highlights section of the Shareholders Report presents the expense ratios based on expenses incurred during the period covered by this report. NAV and Market Price returns assume that dividends and capital gain distributions have been reinvested in the Fund at NAV and Market 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.
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.
† Fund and Index returns are based on the inception date of the Fund. Returns for the Benchmark Indices are based on the closest month-end to the Fund's inception date.
†† Average annualized.
18
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Manager's Analysis
PowerShares Fundamental Pure Large Value Portfolio (ticker: PXLV)
As an index fund, the PowerShares Fundamental Pure Large Value Portfolio (the "Fund") is passively managed and attempts to track the returns of an underlying index. The Fund seeks investment results that generally correspond (before fees and expenses) to the price and yield of the RAFI® Fundamental Large Value Index (the "Index"). The Fund generally will invest at least 90% of its total assets in the component securities that compose the Index.
The Index is composed of stocks from a universe of the 2,500 largest U.S. companies based on four fundamental measures of company size averaged over the prior five year period: latest available book value, cash flow, sales and dividends. The index provider calculates a fundamental weight for each stock then classifies the top 70% of those stocks measured by fundamental weight as "large," the next 20% as "mid," and the last 10% as "small." Next, the Index classifies each stock as "growth," "core" or "value" based on fundamental measures of these characteristics. Finally, the index provider identifies the common stocks that it classifies as "large" and "value" for inclusion into the index provider and weights them according to their composite fundamental weight.
For the fiscal year ended April 30, 2013, on a market price basis, the Fund returned 26.53%. On a net asset value ("NAV") basis, the Fund returned 26.41%. During the same time period, the Index returned 26.92%. During the fiscal year, the Fund fully replicated the components of the Index; therefore, the Fund's performance differed from the return of the Index primarily due to fees and operating expenses that the Fund incurred during the period.
During this same time period, the Russell 1000® Value Index returned 21.80%, the S&P 500® Value Index returned 20.33%, and the S&P 500® Index returned 16.89%. The Russell 1000® Value Index, S&P 500® Value Index and S&P 500® Index (the "Benchmark Indices") are unmanaged indices weighted by market capitalization based on the average performance of approximately 698, 358 and 500 securities, respectively. The adviser provided these additional comparative benchmarks to help investors better understand how the investment results of the Fund compare to the performance of other indices similar to the Index, as well as to that of broad-based market benchmarks.
The adviser selected the Russell 1000® Value Index and S&P 500® Value Index as comparative indices to the Fund because of their recognition in the marketplace and their shared exposure to large cap value stocks. These reasons make their performance relevant when comparing to the Fund's performance. The S&P 500® Index does not have the same specific size and style relevance; however, it was also selected for its recognition in the marketplace, and its performance comparison is a useful measure for investors as a broad representation of the overall U.S. stock market.
The performance of the Fund differed from these Benchmark Indices in part because the Fund tracks an index that employs a fundamental weighting and stock selection methodology, whereas the Benchmark Indices select and weight stocks based on market capitalization. Relative to the Russell 1000® Value Index and the S&P 500® Value Index, the Fund benefitted from the positive performance of specific stocks included in the Index from the Financials, Telecommunication Services, and Energy sectors during the fiscal year ended April 30, 2013. The majority of the Fund's outperformance relative to these indices during that period can be attributed to the performance of these specific stocks.
Relative to the S&P 500® Index, the Fund was overweight in the Financials sector and underweight in the Information Technology sector during the fiscal year ended April 30, 2013. The majority of the Fund's outperformance relative to the S&P 500® Index during that period can be attributed to these sector allocations.
20
Manager's Analysis (Continued)
PowerShares Fundamental Pure Large Value Portfolio (ticker: PXLV)
For the fiscal year ended April 30, 2013, the Financials sector contributed most significantly to the Fund's return, followed by the Energy and Telecommunication Services sectors, respectively. The Information Technology sector detracted most from the Fund's return.
Positions that contributed most significantly to the Fund's return included Bank of America Corp., a financials company (portfolio average weight of 7.05%); and Citigroup Inc., a financials company (portfolio average weight of 4.52%). Positions that detracted most significantly from the Fund's return included Hewlett-Packard Co., an information technology company (portfolio average weight of 1.40%); and Devon Energy Corp., an energy company (portfolio average weight of 0.41%).
Sector Breakdown (% of the Fund's
Net Assets) as of April 30, 2013
Financials | 25.4 | ||||||
Energy | 19.6 | ||||||
Industrials | 11.2 | ||||||
Telecommunication Services | 11.0 | ||||||
Utilities | 9.3 | ||||||
Health Care | 6.4 | ||||||
Consumer Staples | 6.4 | ||||||
Consumer Discretionary | 5.4 | ||||||
Information Technology | 3.0 | ||||||
Materials | 2.3 | ||||||
Money Market Fund | 0.7 | ||||||
Liabilities in excess of other assets | (0.7 | ) |
Top Ten Fund Holdings (% of the Fund's
Net Assets) as of April 30, 2013
Security | |||||||
Exxon Mobil Corp. | 8.3 | ||||||
AT&T, Inc. | 6.0 | ||||||
Bank of America Corp. | 5.5 | ||||||
Chevron Corp. | 5.5 | ||||||
General Electric Co. | 5.1 | ||||||
JPMorgan Chase & Co. | 4.6 | ||||||
Verizon Communications, Inc. | 4.3 | ||||||
Citigroup, Inc. | 4.2 | ||||||
Pfizer, Inc. | 4.0 | ||||||
ConocoPhillips | 3.3 | ||||||
Total | 50.8 |
21
Manager's Analysis (Continued)
PowerShares Fundamental Pure Large Value Portfolio (ticker: PXLV)
Growth of a $10,000 Investment Since Inception†
Fund Performance History (%) As of April 30, 2013
Fund Inception† | |||||||||||||||
1 Year | Avg. Ann.†† | Cumulative | |||||||||||||
Index | |||||||||||||||
RAFI® Fundamental Large Value Index | 26.92 | % | 16.89 | % | 33.96 | % | |||||||||
S&P 500® Value Index | 20.33 | % | 13.85 | % | 26.84 | % | |||||||||
Russell 1000® Value Index | 21.80 | % | 13.91 | % | 26.98 | % | |||||||||
S&P 500® Index | 16.89 | % | 13.41 | % | 25.95 | % | |||||||||
Fund | |||||||||||||||
NAV Return | 26.41 | % | 16.41 | % | 32.94 | % | |||||||||
Market Price Return | 26.53 | % | 16.50 | % | 33.14 | % |
Fund Inception: June 16, 2011
Performance quoted above represents past performance. Past performance is not a guarantee of future results and current performance may be higher or lower than performance quoted. Investment returns and principal value will fluctuate, and shares of the Fund ("Fund Shares"), when redeemed or sold, may be worth more or less than their original cost. Had the adviser not waived fees and/or reimbursed expenses, performance would have been lower. The adviser has contractually agreed to waive fees and/or pay certain Fund expenses through August 31, 2014. According to the Fund's current prospectus, the total gross annual operating expense ratio was indicated as 2.87%. The Financial Highlights section of the Shareholders Report presents the expense ratios based on expenses incurred during the period covered by this report. NAV and Market Price returns assume that dividends and capital gain distributions have been reinvested in the Fund at NAV and Market 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.
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.
† Fund and Index returns are based on the inception date of the Fund. Returns for the Benchmark Indices are based on the closest month-end to the Fund's inception date.
†† Average annualized.
22
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Manager's Analysis
PowerShares Fundamental Pure Mid Core Portfolio (ticker: PXMC)
As an index fund, the PowerShares Fundamental Pure Mid Core Portfolio (the "Fund") is passively managed and attempts to track the returns of an underlying index. The Fund seeks investment results that generally correspond (before fees and expenses) to the price and yield of the RAFI® Fundamental Mid Core Index (the "Index"). The Fund generally will invest at least 90% of its total assets in the component securities that comprise the Index.
The Index is composed of stocks from a universe of the 2,500 largest U.S. companies based on four fundamental measures of company size averaged over the prior five year period: latest available book value, cash flow, sales and dividends. The index provider calculates a fundamental weight for each stock then classifies the top 70% of those stocks measured by fundamental weight as "large," the next 20% as "mid," and the last 10% as "small." Next, the index provider classifies each stock as "growth," "core" or "value" based on fundamental measures of these characteristics. Finally, the index provider identifies the common stocks that it classifies as "mid" and "core" for inclusion into the Index and weights them according to their composite fundamental weight.
For the fiscal year ended April 30, 2013, on a market price basis, the Fund returned 16.00%. On a net asset value ("NAV") basis, the Fund returned 16.16%. During the same time period, the Blended – RAFI® Fundamental Mid Core Index returned 16.63%. During the fiscal year, the Fund fully replicated the components of the Index; therefore, the Fund's performance differed from the return of the Index primarily due to fees and operating expenses that the Fund incurred during the period.
During this same time period, the S&P MidCap 400® Index returned 18.84%, the Russell Midcap® Index returned 19.20%, and the S&P 500® Index returned 16.89%. The S&P MidCap 400® Index, Russell Midcap® Index and S&P 500® Index (the "Benchmark Indices") are unmanaged indices weighted by market capitalization based on the average performance of approximately 400, 798 and 500 securities, respectively. The adviser provided these additional comparative benchmarks to help investors better understand how the investment results of the Fund compare to the performance of other indices similar to the Index, as well as to that of broad-based market benchmarks.
The adviser selected the S&P MidCap 400® Index and the Russell Midcap® Index to provide comparative benchmark performance measurements because of their recognition in the marketplace and their similar exposure to mid cap U.S. stocks. The S&P 500® Index does not have the same specific mid cap exposure; however, it was also selected for its recognition in the marketplace, and its performance comparison is a useful measure for investors as a broad representation of the overall U.S. stock market.
The performance of the Fund differed from these Benchmark Indices in part because the Fund tracks an Index that employs a fundamental weighting and stock selection methodology, whereas the Benchmark Indices select and weight stocks based on market capitalization. Relative to the S&P MidCap 400® Index and the Russell Midcap® Index, the Fund suffered from the poor performance of specific stocks included in the Index from the Health Care and Energy sectors during the fiscal year ended April 30, 2013. The majority of the Fund's underperformance relative to these indices during that period can be attributed to the poor performance of these stocks.
Relative to the S&P 500® Index, the Fund was underweight in the Health Care and Energy sectors and suffered from the poor performance of specific stocks included in the Index from these sectors during the fiscal year ended April 30, 2013. The majority of the Fund's underperformance relative to the S&P 500® Index during that period can be attributed to these sector allocations and the poor performance of these stocks.
24
Manager's Analysis (Continued)
PowerShares Fundamental Pure Mid Core Portfolio (ticker: PXMC)
For the fiscal year ended April 30, 2013, the Financials sector contributed most significantly to the Fund's return, followed by the Consumer Discretionary and Industrials sectors, respectively. The Energy sector detracted most from the Fund's return.
Positions that contributed most significantly to the Fund's return included Virgin Media, Inc., a consumer discretionary company (portfolio average weight of 1.31%); and Ameriprise Financial Inc., a financials company (portfolio average weight of 1.67%). Positions that detracted most significantly from the Fund's return included NII Holdings Inc., a telecommunication services company (no longer held at April 30, 2013); and Peabody Energy Corp., an energy company (portfolio average weight of 0.82%).
Sector Breakdown (% of the Fund's
Net Assets) as of April 30, 2013
Financials | 19.5 | ||||||
Consumer Discretionary | 18.3 | ||||||
Industrials | 16.1 | ||||||
Information Technology | 12.0 | ||||||
Health Care | 11.0 | ||||||
Energy | 7.8 | ||||||
Utilities | 4.8 | ||||||
Consumer Staples | 4.7 | ||||||
Materials | 4.3 | ||||||
Telecommunication Services | 1.5 | ||||||
Money Market Fund | 0.4 | ||||||
Liabilities in excess of other assets | (0.4 | ) |
Top Ten Fund Holdings (% of the Fund's
Net Assets) as of April 30, 2013
Security | |||||||
Becton, Dickinson and Co. | 1.6 | ||||||
Ameriprise Financial, Inc. | 1.5 | ||||||
Kohl's Corp. | 1.5 | ||||||
Ingersoll-Rand PLC | 1.4 | ||||||
Vornado Realty Trust REIT | 1.4 | ||||||
Equity Residential REIT | 1.4 | ||||||
NYSE Euronext | 1.3 | ||||||
Boston Properties, Inc. REIT | 1.3 | ||||||
Invesco Ltd. | 1.3 | ||||||
Franklin Resources, Inc. | 1.2 | ||||||
Total | 13.9 |
25
Manager's Analysis (Continued)
PowerShares Fundamental Pure Mid Core Portfolio (ticker: PXMC)
Growth of a $10,000 Investment Since Inception†
Fund Performance History (%) As of April 30, 2013
3 Years | 3 Years | 5 Years | 5 Years | Fund Inception† | |||||||||||||||||||||||||||
1 Year | Avg. Ann.††† | Cumulative | Avg. Ann.††† | Cumulative | Avg. Ann.††† | Cumulative | |||||||||||||||||||||||||
Index | |||||||||||||||||||||||||||||||
Blended – RAFI® Fundamental Mid Core Index†† | 16.63 | % | 11.58 | % | 38.93 | % | 5.30 | % | 29.48 | % | 4.53 | % | 32.81 | % | |||||||||||||||||
S&P MidCap 400® Index | 18.84 | % | 13.76 | % | 47.24 | % | 8.37 | % | 49.44 | % | 7.35 | % | 57.64 | % | |||||||||||||||||
Russell Midcap® Index | 19.20 | % | 13.70 | % | 47.00 | % | 7.24 | % | 41.83 | % | 5.84 | % | 43.92 | % | |||||||||||||||||
S&P 500® Index | 16.89 | % | 12.80 | % | 43.54 | % | 5.21 | % | 28.92 | % | 4.29 | % | 30.96 | % | |||||||||||||||||
Fund | |||||||||||||||||||||||||||||||
NAV Return | 16.16 | % | 11.00 | % | 36.76 | % | 4.67 | % | 25.64 | % | 3.88 | % | 27.61 | % | |||||||||||||||||
Market Price Return | 16.00 | % | 10.99 | % | 36.73 | % | 4.65 | % | 25.51 | % | 3.87 | % | 27.58 | % |
Fund Inception: December 1, 2006
Performance quoted above represents past performance. Past performance is not a guarantee of future results and current performance may be higher or lower than performance quoted. Investment returns and principal value will fluctuate, and shares of the Fund ("Fund Shares"), when redeemed or sold, may be worth more or less than their original cost. Had the adviser not waived fees and/or reimbursed expenses, performance would have been lower. The adviser has contractually agreed to waive fees and/or pay certain Fund expenses through August 31, 2014. According to the Fund's current prospectus, the total gross annual operating expense ratio was indicated as 0.98%. The Financial Highlights section of the Shareholders Report presents the expense ratios based on expenses incurred during the period covered by this report. NAV and Market Price returns assume that dividends and capital gain distributions have been reinvested in the Fund at NAV and Market 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.
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.
† Fund and Index returns are based on the inception date of the Fund. Returns for the Benchmark Indices are based on the closest month-end to the Fund's inception date.
†† Effective June 16, 2011, the Fund's underlying index and investment policies changed. Prior to June 16, 2011, the Fund sought to replicate, before fees and expenses, the performance of the Dynamic Mid Cap IntellidexSM Index. "3 Years," "5 Years" and "Fund Inception" performance for the RAFI® Fundamental Mid Core Index was not available in the prior year because that Index did not commence calculation and publication until April 15, 2011. The data shown as the Blended-Index is comprised of the performance of the Dynamic Mid Cap IntellidexSM Index, the Fund's previous underlying index, from Fund inception through the conversion date, June 16, 2011, followed by the performance of the RAFI® Fundamental Mid Core Index starting from the conversion date through April 30, 2013.
††† Average annualized.
26
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Manager's Analysis
PowerShares Fundamental Pure Mid Growth Portfolio (ticker: PXMG)
As an index fund, the PowerShares Fundamental Pure Mid Growth Portfolio (the "Fund") is passively managed and attempts to track the returns of an underlying index. The Fund seeks investment results that generally correspond (before fees and expenses) to the price and yield of the RAFI® Fundamental Mid Growth Index (the "Index"). The Fund generally will invest at least 90% of its total assets in the component securities that comprise the Index.
The Index is composed of stocks from a universe of the 2,500 largest U.S. companies based on four fundamental measures of company size averaged over the prior five year period: latest available book value, income, sales and dividends. The index provider calculates a fundamental weight for each stock then classifies the top 70% of those stocks measured by fundamental weight as "large," the next 20% as "mid," and the last 10% as "small." Next, the index provider classifies each stock as "growth," "core" or "value" based on fundamental measures of these characteristics. Finally, the index provider identifies the common stocks that it classifies as "mid" and "growth" for inclusion into the Index and weights them according to their composite fundamental weight.
For the fiscal year ended April 30, 2013, on a market price basis, the Fund returned 16.25%. On a net asset value ("NAV") basis, the Fund returned 16.23%. During the same time period, the Blended – RAFI® Fundamental Mid Growth Index returned 16.73%. During the fiscal year, the Fund fully replicated the components of the Index; therefore, the Fund's performance differed from the return of the Index primarily due to fees and operating expenses that the Fund incurred during the period.
During this same time period, the S&P MidCap 400® Growth Index returned 16.78%, the Russell Midcap® Growth Index returned 14.42%, and the S&P 500® Index returned 16.89%. The S&P MidCap 400® Growth Index, Russell Midcap® Growth Index and S&P 500® Index (the "Benchmark Indices") are unmanaged indices weighted by market capitalization based on the average performance of approximately 225, 461 and 500 securities, respectively. The adviser provided these additional comparative benchmarks to help investors better understand how the investment results of the Fund compare to the performance of other indices similar to the Index, as well as to that of broad-based market benchmarks.
The adviser selected the S&P MidCap 400® Growth Index and Russell Midcap® Growth Index as comparative indices to the Fund because of their recognition in the marketplace and their shared exposure to mid cap growth stocks. These reasons make their performance relevant when comparing to the Fund's performance. The S&P 500® Index does not have the same specific size and style relevance; however, it was also selected for its recognition in the marketplace, and its performance comparison is a useful measure for investors as a broad representation of the overall U.S. stock market.
The performance of the Fund differed from these Benchmark Indices in part because the Fund tracks an Index that employs a fundamental weighting and stock selection methodology, whereas the Benchmark Indices select and weight stocks based on market capitalization. Relative to the S&P MidCap 400® Growth Index, the Fund suffered from relatively poorer performance of specific stocks included in the Index from the Health Care sector, which caused the majority of the Fund's underperformance relative to the S&P MidCap 400® Growth Index during the fiscal year ended April 30, 2013. Relative to the Russell Midcap® Growth Index, the Fund benefited from relatively strong performance of specific stocks in the Index from the Information Technology sector, which caused the majority of the Fund's outperformance relative to the Russell Midcap® Growth Index during the fiscal year ended April 30, 2013.
28
Manager's Analysis (Continued)
PowerShares Fundamental Pure Mid Growth Portfolio (ticker: PXMG)
Relative to the S&P 500® Index, the Fund was overweight in the Consumer Discretionary sector and Materials sector and suffered from relatively poorer performance of specific stocks included in the Index from these sectors during the fiscal year ended April 30, 2013. The majority of the Fund's underperformance relative to the S&P 500® Index during that period can be attributed to these sector allocations and stock performance.
For the fiscal year ended April 30, 2013, the Financials sector contributed most significantly to the Fund's return, followed by the Health Care and Industrials sectors, respectively. There were no detracting sectors.
Positions that contributed most significantly to the Fund's return included US Airways Group Inc., an industrials company (no longer held at April 30, 2013); and BlackRock Inc., a financials company (no longer held at April 30, 2013). Positions that detracted most significantly from the Fund's return included Cliffs Natural Resources, Inc., a materials company (portfolio average weight of 0.69%); and Alpha Natural Resources Inc., an energy company (no longer held at April 30, 2013).
Sector Breakdown (% of the Fund's
Net Assets) as of April 30, 2013
Financials | 21.1 | ||||||
Industrials | 15.8 | ||||||
Information Technology | 14.4 | ||||||
Energy | 13.2 | ||||||
Consumer Discretionary | 11.5 | ||||||
Health Care | 9.4 | ||||||
Materials | 8.9 | ||||||
Consumer Staples | 4.9 | ||||||
Telecommunication Services | 0.8 | ||||||
Money Market Fund | 0.2 | ||||||
Liabilities in excess of other assets | (0.2 | ) |
Top Ten Fund Holdings (% of the Fund's
Net Assets) as of April 30, 2013
Security | |||||||
HCP, Inc. REIT | 2.1 | ||||||
Prologis, Inc. REIT | 2.1 | ||||||
Mosaic Co. (The) | 2.1 | ||||||
Cummins, Inc. | 1.9 | ||||||
Western Digital Corp. | 1.9 | ||||||
Ventas, Inc. REIT | 1.9 | ||||||
Precision Castparts Corp. | 1.8 | ||||||
Wynn Resorts Ltd. | 1.7 | ||||||
Stryker Corp. | 1.7 | ||||||
Public Storage REIT | 1.7 | ||||||
Total | 18.9 |
29
Manager's Analysis (Continued)
PowerShares Fundamental Pure Mid Growth Portfolio (ticker: PXMG)
Growth of a $10,000 Investment Since Inception†
Fund Performance History (%) As of April 30, 2013
3 Years | 3 Years | 5 Years | 5 Years | Fund Inception† | |||||||||||||||||||||||||||
1 Year | Avg. Ann.††† | Cumulative | Avg. Ann.††† | Cumulative | Avg. Ann.††† | Cumulative | |||||||||||||||||||||||||
Index | |||||||||||||||||||||||||||||||
Blended – RAFI® Fundamental Mid Growth Index†† | 16.73 | % | 12.10 | % | 40.88 | % | 4.18 | % | 22.71 | % | 8.00 | % | 87.41 | % | |||||||||||||||||
S&P MidCap 400® Growth Index | 16.78 | % | 14.87 | % | 51.58 | % | 9.04 | % | 54.12 | % | 9.14 | % | 104.28 | % | |||||||||||||||||
Russell Midcap® Growth Index | 14.42 | % | 13.68 | % | 46.91 | % | 6.79 | % | 38.89 | % | 7.73 | % | 83.75 | % | |||||||||||||||||
S&P 500® Index | 16.89 | % | 12.80 | % | 43.54 | % | 5.21 | % | 28.92 | % | 5.72 | % | 57.50 | % | |||||||||||||||||
Fund | |||||||||||||||||||||||||||||||
NAV Return | 16.23 | % | 11.52 | % | 38.70 | % | 3.54 | % | 19.01 | % | 7.31 | % | 77.81 | % | |||||||||||||||||
Market Price Return | 16.25 | % | 11.51 | % | 38.67 | % | 3.53 | % | 18.92 | % | 7.28 | % | 77.44 | % |
Fund Inception: March 3, 2005
Performance quoted above represents past performance. Past performance is not a guarantee of future results and current performance may be higher or lower than performance quoted. Investment returns and principal value will fluctuate, and shares of the Fund ("Fund Shares"), when redeemed or sold, may be worth more or less than their original cost. Had the adviser not waived fees and/or reimbursed expenses, performance would have been lower. The adviser has contractually agreed to waive fees and/or pay certain Fund expenses through August 31, 2014. According to the Fund's current prospectus, the total gross annual operating expense ratio was indicated as 0.52%. The Financial Highlights section of the Shareholders Report presents the expense ratios based on expenses incurred during the period covered by this report. NAV and Market Price returns assume that dividends and capital gain distributions have been reinvested in the Fund at NAV and Market 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.
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.
† Fund and Index returns are based on the inception date of the Fund. Returns for the Benchmark Indices are based on the closest month-end to the Fund's inception date.
†† Effective June 16, 2011, the Fund's underlying index and investment policies changed. Prior to June 16, 2011, the Fund sought to replicate, before fees and expenses, the performance of the Dynamic Small Cap Growth IntellidexSM Index. "3 Years," "5 Years" and "Fund Inception" performance for the RAFI® Fundamental Small Growth Index was not available in the prior year because that Index did not commence calculation and publication until April 15, 2011. The data shown as the Blended-Index is comprised of the performance of the Dynamic Small Cap Growth IntellidexSM Index, the Fund's previous underlying index, from Fund inception through the conversion date, June 16, 2011, followed by the performance of the RAFI® Fundamental Small Growth Index starting from the conversion date through April 30, 2013.
††† Average annualized.
30
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Manager's Analysis
PowerShares Fundamental Pure Mid Value Portfolio (ticker: PXMV)
As an index fund, the PowerShares Fundamental Pure Mid Value Portfolio (the "Fund") is passively managed and attempts to track the returns of an underlying index. The Fund seeks investment results that generally correspond (before fees and expenses) to the price and yield of the RAFI® Fundamental Mid Value Index (the "Index"). The Fund generally will invest at least 90% of its total assets in the component securities that comprise the Index.
The Index is composed of stocks from a universe of the 2,500 largest U.S. companies based on four fundamental measures of company size averaged over the prior five year period: latest available book value cash flow, sales and dividends. The index provider calculates a fundamental weight for each stock then classifies the top 70% of those stocks measured by fundamental weight as "large," the next 20% as "mid," and the last 10% as "small." Next, the index provider classifies each stock as "growth," "core" or "value" based on fundamental measures of these characteristics. Finally, the index provider identifies the common stocks that it classifies as "mid" and "value" for inclusion into the Index and weights them according to their composite fundamental weight.
For the fiscal year ended April 30, 2013, on a market price basis, the Fund returned 25.89%. On a net asset value ("NAV") basis, the Fund returned 25.74%. During the same time period, the Blended – RAFI® Fundamental Mid Value Index returned 26.24%. During the fiscal year, the Fund fully replicated the components of the Index; therefore, the Fund's performance differed from the return of the Index primarily due to fees and operating expenses that the Fund incurred during the period.
During this same time period, the S&P MidCap 400® Value Index returned 21.08%, the Russell MidCap Value® Index returned 23.66%, and the S&P 500® Index returned 16.89%. The S&P MidCap 400® Value Index, Russell MidCap Value® Index and S&P 500® Index (the "Benchmark Indices") are unmanaged indices weighted by market capitalization based on the average performance of approximately 296, 565 and 500 securities, respectively. The adviser provided these additional comparative benchmarks to help investors better understand how the investment results of the Fund compare to the performance of other indices similar to the Index, as well as to that of broad-based market benchmarks.
The adviser selected the S&P MidCap 400® Value Index and Russell MidCap Value® Index as comparative indices to the Fund because of their recognition in the marketplace and their shared exposure to mid cap value stocks. These reasons make their performance relevant when comparing to the Fund's performance. The S&P 500® Index does not have the same specific size and style relevance; however, it was also selected for its recognition in the marketplace, and its performance comparison is a useful measure for investors as a broad representation of the U.S. stock market.
The performance of the Fund differed from these Benchmark Indices in part because the Fund employs a fundamental weighting and stock selection methodology, whereas the Benchmark Indices select and weight stocks based on market capitalization. Relative to the S&P MidCap 400® Value Index and the Russell MidCap Value® Index, the Fund was overweight in the Consumer Discretionary sector and underweight in the Information Technology and Financials sectors, and benefited from the relative positive performance of specific stocks included in the Index from these sectors during the fiscal year ended April 30, 2013. The majority of the Fund's outperformance relative to these indices during that period can be attributed to these sector allocations and the positive performance of specific stocks within these sectors.
Relative to the S&P 500® Index, the Fund was underweight in the Information Technology sector and overweight in the Consumer Discretionary sector and benefitted from the relative positive performance of specific stocks included in the Index from these sectors during the fiscal year ended April 30, 2013. The
32
Manager's Analysis (Continued)
PowerShares Fundamental Pure Mid Value Portfolio (ticker: PXMV)
majority of the Fund's outperformance relative to the S&P 500® Index during that period can be attributed to these sector allocations and the positive performance of specific stocks within these sectors.
For the fiscal year ended April 30, 2013, the Consumer Discretionary sector contributed most significantly to the Fund's return, followed by the Financials and Utilities sectors, respectively. Please note that the Financials sector is named here as a positive contributor to the Fund's overall return, although above it is cited as a cause of relative underperformance to the comparative benchmark index due to the sector contributing more to the benchmark index's positive performance than it did for the Fund. There were no detracting sectors.
Positions that contributed most significantly to the Fund's return included Tesoro Corp., an energy company (portfolio average weight of 1.03%); and Whirlpool Corp., a consumer discretionary company (portfolio average weight of 1.10%). Positions that detracted most significantly from the Fund's return included J.C. Penney Co., Inc., a consumer discretionary company (portfolio average weight of 0.44%); and United States Steel Corp., a materials company (portfolio average weight of 0.70%).
Sector Breakdown (% of the Fund's
Net Assets) as of April 30, 2013
Financials | 21.8 | ||||||
Consumer Discretionary | 20.1 | ||||||
Industrials | 11.6 | ||||||
Utilities | 10.7 | ||||||
Information Technology | 10.4 | ||||||
Consumer Staples | 7.3 | ||||||
Materials | 7.2 | ||||||
Health Care | 4.6 | ||||||
Energy | 4.2 | ||||||
Telecommunication Services | 2.0 | ||||||
Other assets less liabilities | 0.1 |
Top Ten Fund Holdings (% of the Fund's
Net Assets) as of April 30, 2013
Security | |||||||
CenterPoint Energy, Inc. | 1.0 | ||||||
Yahoo!, Inc. | 1.0 | ||||||
Principal Financial Group, Inc. | 1.0 | ||||||
L Brands, Inc. | 1.0 | ||||||
Avon Products, Inc. | 1.0 | ||||||
Omnicom Group, Inc. | 1.0 | ||||||
NII Holdings, Inc. | 0.9 | ||||||
L-3 Communications Holdings, Inc. | 0.9 | ||||||
Whirlpool Corp. | 0.9 | ||||||
Tyson Foods, Inc., Class A | 0.9 | ||||||
Total | 9.6 |
33
Manager's Analysis (Continued)
PowerShares Fundamental Pure Mid Value Portfolio (ticker: PXMV)
Growth of a $10,000 Investment Since Inception†
Fund Performance History (%) As of April 30, 2013
3 Years | 3 Years | 5 Years | 5 Years | Fund Inception† | |||||||||||||||||||||||||||
1 Year | Avg. Ann.††† | Cumulative | Avg. Ann.††† | Cumulative | Avg. Ann.††† | Cumulative | |||||||||||||||||||||||||
Index | |||||||||||||||||||||||||||||||
Blended – RAFI® Fundamental Mid Value Index†† | 26.24 | % | 13.26 | % | 45.30 | % | 6.91 | % | 39.65 | % | 6.51 | % | 67.27 | % | |||||||||||||||||
S&P MidCap 400® Value Index | 21.08 | % | 12.71 | % | 43.17 | % | 7.70 | % | 44.88 | % | 7.88 | % | 85.81 | % | |||||||||||||||||
Russell Midcap® Value Index | 23.66 | % | 13.70 | % | 46.99 | % | 7.49 | % | 43.51 | % | 7.73 | % | 83.71 | % | |||||||||||||||||
S&P 500® Index | 16.89 | % | 12.80 | % | 43.54 | % | 5.21 | % | 28.92 | % | 5.72 | % | 57.50 | % | |||||||||||||||||
Fund | |||||||||||||||||||||||||||||||
NAV Return | 25.74 | % | 12.67 | % | 43.04 | % | 6.23 | % | 35.30 | % | 5.77 | % | 58.02 | % | |||||||||||||||||
Market Price Return | 25.89 | % | 12.70 | % | 43.13 | % | 6.24 | % | 35.32 | % | 5.75 | % | 57.83 | % |
Fund Inception: March 3, 2005
Performance quoted above represents past performance. Past performance is not a guarantee of future results and current performance may be higher or lower than performance quoted. Investment returns and principal value will fluctuate, and shares of the Fund ("Fund Shares"), when redeemed or sold, may be worth more or less than their original cost. Had the adviser not waived fees and/or reimbursed expenses, performance would have been lower. The adviser has contractually agreed to waive fees and/or pay certain Fund expenses through August 31, 2014. According to the Fund's current prospectus, the total gross annual operating expense ratio was indicated as 0.76%. The Financial Highlights section of the Shareholders Report presents the expense ratios based on expenses incurred during the period covered by this report. NAV and Market Price returns assume that dividends and capital gain distributions have been reinvested in the Fund at NAV and Market 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.
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.
† Fund and Index returns are based on the inception date of the Fund. Returns for the Benchmark Indices are based on the closest month-end to the Fund's inception date.
†† Effective June 16, 2011, the Fund's underlying index and investment policies changed. Prior to June 16, 2011, the Fund sought to replicate, before fees and expenses, the performance of the Dynamic Mid Cap Value IntellidexSM Index. "3 Years," "5 Years" and "Fund Inception" performance for the RAFI® Fundamental Mid Value Index was not available in the prior year because that Index did not commence calculation and publication until April 15, 2011. The data shown as the Blended-Index is comprised of the performance of the Dynamic Mid Cap Value IntellidexSM Index, the Fund's previous underlying index, from Fund inception through the conversion date, June 16, 2011, followed by the performance of the RAFI® Fundamental Mid Value Index starting from the conversion date through April 30, 2013.
††† Average annualized.
34
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Manager's Analysis
PowerShares Fundamental Pure Small Core Portfolio (ticker: PXSC)
As an index fund, the PowerShares Fundamental Pure Small Core Portfolio (the "Fund") is passively managed and attempts to track the returns of an underlying index. The Fund seeks investment results that generally correspond (before fees and expenses) to the price and yield of the RAFI® Fundamental Small Core Index (the "Index"). The Fund generally will invest at least 90% of its total assets in the component securities that comprise the Index.
The Index is composed of stocks from a universe of the 2,500 largest U.S. companies based on four fundamental measures of company size averaged over the prior five year period: latest available book value, cash flow, sales and dividends. The index provider calculates a fundamental weight for each stock then classifies the top 70% of those stocks measured by fundamental weight as "large," the next 20% as "mid," and the last 10% as "small." Next, the index provider classifies each stock as "growth," "core" or "value" based on fundamental measures of these characteristics. Finally, the index provider identifies the common stocks that it classifies as "small" and "core" for inclusion into the Index and weights them according to their composite fundamental weight.
For the fiscal year ended April 30, 2013, on a market price basis, the Fund returned 17.03%. On a net asset value ("NAV") basis, the Fund returned 17.05%. During the same time period, the Blended – RAFI® Fundamental Small Core Index returned 17.62%. During the fiscal year, the Fund fully replicated the components of the Index; therefore, the Fund's performance differed from the return of the Index primarily due to fees and operating expenses that the Fund incurred during the period.
During this same time period, the S&P SmallCap 600® Index returned 17.32%, the Russell 2000® Index returned 17.69%, and the S&P 500® Index returned 16.89%. The S&P SmallCap 600® Index, Russell 2000® Index and S&P 500® Index (the "Benchmark Indices") are unmanaged indices weighted by market capitalization based on the average performance of approximately 600, 1,953 and 500 securities, respectively. The adviser provided these additional comparative benchmarks to help investors better understand how the investment results of the Fund compare to the performance of other indices similar to the Index, as well as to that of broad-based market benchmarks.
The adviser selected the S&P SmallCap 600® Index and the Russell 2000® Index to provide comparative benchmark performance measurements because of their recognition in the marketplace and their similar exposure to small cap U.S. stocks. The S&P 500® Index does not have the same specific small cap exposure; however, it was also selected for its recognition in the marketplace, and its performance comparison is a useful measure for investors as a broad representation of the overall U.S. stock market.
The performance of the Fund differed from these Benchmark Indices in part because the Fund tracks an Index that employs a fundamental weighting and stock selection methodology, whereas the Benchmark Indices select and weight stocks based on market capitalization. Relative to the S&P SmallCap 600® Index and the Russell 2000® Index, the Fund was underweight in the Consumer Discretionary and Materials sectors and experienced poor relative performance of specific stocks included in the Index from these sectors during the fiscal year ended April 30, 2013. The majority of the Fund's underperformance relative to these indices during that period can be attributed to these sector allocations and specific stock performances.
Relative to the S&P 500® Index, the Fund was underweight in the Information Technology sector and benefited from the positive relative performance of specific stocks included in the Index from this sector during the fiscal year ended April 30, 2013. The majority of the Fund's outperformance relative to the S&P 500® Index during that period can be attributed to this sector allocation and specific stock performances.
36
Manager's Analysis (Continued)
PowerShares Fundamental Pure Small Core Portfolio (ticker: PXSC)
For the fiscal year ended April 30, 2013, the Financials sector contributed most significantly to the Fund's return, followed by the Industrials and Health Care sectors, respectively. There were no detracting sectors.
Positions that contributed most significantly to the Fund's return included CVR Energy Inc., an energy company (no longer held at April 30, 2013); and Geo Group Inc., a financials company (no longer held at April 30, 2013). Positions that detracted most significantly from the Fund's return included ITT Educational Services Inc., a consumer discretionary company (no longer held at April 30, 2013); and Aeropostale Inc., a consumer discretionary company (no longer held at April 30, 2013).
Sector Breakdown (% of the Fund's
Net Assets) as of April 30, 2013
Financials | 22.6 | ||||||
Industrials | 16.6 | ||||||
Consumer Discretionary | 16.2 | ||||||
Information Technology | 13.1 | ||||||
Health Care | 8.6 | ||||||
Materials | 6.7 | ||||||
Energy | 6.1 | ||||||
Consumer Staples | 5.5 | ||||||
Utilities | 3.0 | ||||||
Telecommunication Services | 1.5 | ||||||
Money Market Fund | 0.4 | ||||||
Liabilities in excess of other assets | (0.3 | ) |
Top Ten Fund Holdings (% of the Fund's
Net Assets) as of April 30, 2013
Security | |||||||
Ultra Petroleum Corp. | 0.8 | ||||||
Cinemark Holdings, Inc. | 0.7 | ||||||
Covance, Inc. | 0.7 | ||||||
Alere, Inc. | 0.7 | ||||||
Patterson Cos., Inc. | 0.7 | ||||||
Cleco Corp. | 0.7 | ||||||
Dun & Bradstreet Corp. (The) | 0.7 | ||||||
Casey's General Stores, Inc. | 0.7 | ||||||
Aqua America, Inc. | 0.7 | ||||||
BRE Properties, Inc. REIT | 0.6 | ||||||
Total | 7.0 |
37
Manager's Analysis (Continued)
PowerShares Fundamental Pure Small Core Portfolio (ticker: PXSC)
Growth of a $10,000 Investment Since Inception†
Fund Performance History (%) As of April 30, 2013
3 Years | 3 Years | 5 Years | 5 Years | Fund Inception† | |||||||||||||||||||||||||||
1 Year | Avg. Ann.††† | Cumulative | Avg. Ann.††† | Cumulative | Avg. Ann.††† | Cumulative | |||||||||||||||||||||||||
Index | |||||||||||||||||||||||||||||||
Blended – RAFI® Fundamental Small Core Index†† | 17.62 | % | 11.42 | % | 38.31 | % | 5.22 | % | 28.95 | % | 3.18 | % | 22.22 | % | |||||||||||||||||
S&P SmallCap 600® Index | 17.32 | % | 12.92 | % | 43.97 | % | 8.28 | % | 48.84 | % | 5.71 | % | 42.81 | % | |||||||||||||||||
Russell 2000® Index | 17.69 | % | 11.25 | % | 37.70 | % | 7.27 | % | 42.06 | % | 4.39 | % | 31.71 | % | |||||||||||||||||
S&P 500® Index | 16.89 | % | 12.80 | % | 43.54 | % | 5.21 | % | 28.92 | % | 4.29 | % | 30.96 | % | |||||||||||||||||
Fund | |||||||||||||||||||||||||||||||
NAV Return | 17.05 | % | 10.79 | % | 35.99 | % | 4.45 | % | 24.31 | % | 2.41 | % | 16.48 | % | |||||||||||||||||
Market Price Return | 17.03 | % | 10.77 | % | 35.93 | % | 4.44 | % | 24.24 | % | 2.39 | % | 16.31 | % |
Fund Inception: December 1, 2006
Performance quoted above represents past performance. Past performance is not a guarantee of future results and current performance may be higher or lower than performance quoted. Investment returns and principal value will fluctuate, and shares of the Fund ("Fund Shares"), when redeemed or sold, may be worth more or less than their original cost. Had the adviser not waived fees and/or reimbursed expenses, performance would have been lower. The adviser has contractually agreed to waive fees and/or pay certain Fund expenses through August 31, 2014. According to the Fund's current prospectus, the total gross annual operating expense ratio was indicated as 1.22%. The Financial Highlights section of the Shareholders Report presents the expense ratios based on expenses incurred during the period covered by this report. NAV and Market Price returns assume that dividends and capital gain distributions have been reinvested in the Fund at NAV and Market 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.
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.
† Fund and Index returns are based on the inception date of the Fund. Returns for the Benchmark Indices are based on the closest month-end to the Fund's inception date.
†† Effective June 16, 2011, the Fund's underlying index and investment policies changed. Prior to June 16, 2011, the Fund sought to replicate, before fees and expenses, the performance of the Dynamic Small Cap IntellidexSM Index. "3 Years," "5 Years" and "Fund Inception" performance for the RAFI® Fundamental Small Core Index was not available in the prior year because that Index did not commence calculation and publication until April 15, 2011. The data shown as the Blended-Index is comprised of the performance of the Dynamic Small Cap IntellidexSM Index, the Fund's previous underlying index, from Fund inception through the conversion date, June 16, 2011, followed by the performance of the RAFI® Fundamental Small Core Index starting from the conversion date through April 30, 2013.
††† Average annualized.
38
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Manager's Analysis
PowerShares Fundamental Pure Small Growth Portfolio (ticker: PXSG)
As an index fund, the PowerShares Fundamental Pure Small Growth Portfolio (the "Fund") is passively managed and attempts to track the returns of an underlying index. The Fund seeks investment results that generally correspond (before fees and expenses) to the price and yield of the RAFI® Fundamental Small Growth Index (the "Index"). The Fund generally will invest at least 90% of its total assets in the component securities that comprise the Index.
The Index is composed of stocks from a universe of the 2,500 largest U.S. companies based on four fundamental measures of company size averaged over the prior five year period: latest available book value, cash flow, sales and dividends. The index provider calculates a fundamental weight for each stock then then classifies the top 70% of those stocks measured by fundamental weight as "large," the next 20% as "mid," and the last 10% as "small." Next, the index provider classifies each stock as "growth," "core" or "value" based on fundamental measures of these characteristics. Finally, the index provider identifies the common stocks that it classifies as "small" and "growth" for inclusion into the Index and weights them according to their composite fundamental weight.
For the fiscal year ended April 30, 2013, on a market price basis, the Fund returned 12.65%. On a net asset value ("NAV") basis, the Fund returned 12.63%. During the same time period, the Blended – RAFI® Fundamental Small Growth Index returned 13.06%. During the fiscal year, the Fund fully replicated the components of the Index, therefore, the Fund's performance differed from the return of the Index, primarily due to the Fund's operating expenses.
During this same time period, the S&P SmallCap 600® Growth Index returned 15.48%, the Russell 2000® Growth Index returned 15.67%, and the S&P 500® Index returned 16.89%. The S&P SmallCap 600® Growth Index, Russell 2000® Growth Index and S&P 500® Index (the "Benchmark Indices") are unmanaged indices weighted by market capitalization based on the average performance of approximately 351, 1,108 and 500 securities, respectively. The Adviser provided these additional comparative benchmarks to help investors better understand how the investment results of the Fund compare to the performance of other indices similar to the Index as well as to that of broad-based market benchmarks.
The Adviser selected the S&P SmallCap 600® Growth Index and Russell 2000® Growth Index as comparative indices to the Fund because of their recognition in the marketplace and their shared exposure to small cap growth stocks. These reasons make their performance relevant when comparing to the Fund's performance. The S&P 500® Index does not have the same specific size and style relevance; however, it was also selected for its recognition in the marketplace, and its performance comparison is a useful measure for investors as a broad representation of the overall U.S. stock market.
The performance of the Fund differed from these Benchmark Indices in part because the Fund tracks an Index that employs a fundamental weighting and stock selection methodology, whereas the Benchmark Indices select and weight stocks based on market capitalization. Relative to the S&P SmallCap 600® Growth Index, the Fund suffered from poor relative performance of specific stocks included in the index from the Energy and Materials sectors during the fiscal year ended April 30, 2013. The majority of the Fund's underperformance relative to the S&P SmallCap 600® Growth Index during that period can be attributed to these specific stock performances. Relative to the Russell 2000® Growth Index, the Fund suffered from poor relative performance of specific stocks included in the Index from the Information Technology and Materials sectors during the fiscal year ended April 30, 2013. The majority of the Fund's underperformance relative to the Russell 2000® Growth Index during that period can be attributed to these specific stock performances.
Relative to the S&P 500® Index, the Fund was underweight in the Energy and Consumer Staples sectors and overweight the Materials sector and suffered from poor relative performance of specific stocks
40
Manager's Analysis (Continued)
PowerShares Fundamental Pure Small Growth Portfolio (ticker: PXSG)
included in the Index from these sectors during the fiscal year ended April 30, 2013. The majority of the Fund's underperformance relative to the S&P 500® Index during that period can be attributed to these sector allocations and specific stock performances.
For the fiscal year ended April 30, 2013, the Financials sector contributed most significantly to the Fund's return, followed by the Health Care and Consumer Discretionary sectors, respectively. The Energy sector detracted most from the Fund's return, followed by the Materials sector.
Positions that contributed most significantly to the Fund's return included Cree, Inc., an information technology company (portfolio average weight of 0.87%); and Urban Outfitters, Inc., a consumer discretionary company (portfolio average weight of 0.97%). Positions that detracted most significantly from the Fund's return included Patriot Coal Corp., an energy company (no longer held at April 30, 2013); and Walter Energy Inc., a materials company (no longer held at April 30, 2013).
Sector Breakdown (% of the Fund's
Net Assets) as of April 30, 2013
Financials | 22.6 | ||||||
Information Technology | 21.2 | ||||||
Health Care | 13.8 | ||||||
Consumer Discretionary | 13.5 | ||||||
Industrials | 13.2 | ||||||
Energy | 6.2 | ||||||
Materials | 5.1 | ||||||
Consumer Staples | 2.9 | ||||||
Utilities | 0.9 | ||||||
Telecommunication Services | 0.6 | ||||||
Money Market Fund | 0.3 | ||||||
Liabilities in excess of other assets | (0.3 | ) |
Top Ten Fund Holdings (% of the Fund's
Net Assets) as of April 30, 2013
Security | |||||||
Hatteras Financial Corp. REIT | 1.0 | ||||||
Centene Corp. | 1.0 | ||||||
MEDNAX, Inc. | 0.9 | ||||||
National Retail Properties, Inc. REIT | 0.9 | ||||||
ITC Holdings Corp. | 0.9 | ||||||
Towers Watson & Co., Class A | 0.9 | ||||||
Cree, Inc. | 0.9 | ||||||
Triumph Group, Inc. | 0.9 | ||||||
W.R. Grace & Co. | 0.8 | ||||||
Dick's Sporting Goods, Inc. | 0.8 | ||||||
Total | 9.0 |
41
Manager's Analysis (Continued)
PowerShares Fundamental Pure Small Growth Portfolio (ticker: PXSG)
Growth of a $10,000 Investment Since Inception†
Fund Performance History (%) As of April 30, 2013
3 Years | 3 Years | 5 Years | 5 Years | Fund Inception† | |||||||||||||||||||||||||||
1 Year | Avg. Ann.††† | Cumulative | Avg. Ann.††† | Cumulative | Avg. Ann.††† | Cumulative | |||||||||||||||||||||||||
Index | |||||||||||||||||||||||||||||||
Blended – RAFI® Fundamental Small Growth Index†† | 13.06 | % | 12.75 | % | 43.33 | % | 5.85 | % | 32.86 | % | 4.21 | % | 39.96 | % | |||||||||||||||||
S&P SmallCap 600® Growth Index | 15.48 | % | 14.47 | % | 50.01 | % | 8.58 | % | 50.93 | % | 7.65 | % | 82.59 | % | |||||||||||||||||
Russell 2000® Growth Index | 15.67 | % | 12.94 | % | 44.05 | % | 7.81 | % | 45.65 | % | 7.04 | % | 74.26 | % | |||||||||||||||||
S&P 500® Index | 16.89 | % | 12.80 | % | 43.54 | % | 5.21 | % | 28.92 | % | 5.72 | % | 57.50 | % | |||||||||||||||||
Fund | |||||||||||||||||||||||||||||||
NAV Return | 12.63 | % | 12.10 | % | 40.87 | % | 4.99 | % | 27.55 | % | 3.52 | % | 32.62 | % | |||||||||||||||||
Market Price Return | 12.65 | % | 12.12 | % | 40.93 | % | 4.98 | % | 27.50 | % | 3.48 | % | 32.22 | % |
Fund Inception: March 3, 2005
Performance quoted above represents past performance. Past performance is not a guarantee of future results and current performance may be higher or lower than performance quoted. Investment returns and principal value will fluctuate, and shares of the Fund ("Fund Shares"), when redeemed or sold, may be worth more or less than their original cost. Had the adviser not waived fees and/or reimbursed expenses, performance would have been lower. The adviser has contractually agreed to waive fees and/or pay certain Fund expenses through August 31, 2014. According to the Fund's current prospectus, the total gross annual operating expense ratio was indicated as 0.64%, including estimated acquired fund fees and expenses of 0.02%. The Financial Highlights section of the Shareholders Report presents the expense ratios based on expenses incurred during the period covered by this report. NAV and Market Price returns assume that dividends and capital gain distributions have been reinvested in the Fund at NAV and Market 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.
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.
† Fund and Index returns are based on the inception date of the Fund. Returns for the Benchmark Indices are based on the closest month-end to the Fund's inception date.
†† Effective June 16, 2011, the Fund's underlying index and investment policies changed. Prior to June 16, 2011, the Fund sought to replicate, before fees and expenses, the performance of the Dynamic Small Cap Growth IntellidexSM Index. "3 Years," "5 Years" and "Fund Inception" performance for the RAFI® Fundamental Small Growth Index was not available in the prior year because that Index did not commence calculation and publication until April 15, 2011. The data shown as the Blended-Index is comprised of the performance of the Dynamic Small Cap Growth IntellidexSM Index, the Fund's previous underlying index, from Fund inception through the conversion date, June 16, 2011, followed by the performance of the RAFI® Fundamental Small Growth Index starting from the conversion date through April 30, 2013.
††† Average annualized.
42
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Manager's Analysis
PowerShares Fundamental Pure Small Value Portfolio (ticker: PXSV)
As an index fund, the PowerShares Fundamental Pure Small Value Portfolio (the "Fund") is passively managed and attempts to track the returns of an underlying index. The Fund seeks investment results that generally correspond (before fees and expenses) to the price and yield of the RAFI® Fundamental Small Value Index (the "Index"). The Fund generally will invest at least 90% of its total assets in the component securities that comprise the Index.
The Index is composed of stocks from a universe of the 2,500 largest U.S. companies based on four fundamental measures of company size averaged over the prior five year period: latest available book value, cash flow, sales and dividends. The index provider calculates a fundamental weight for each stock then classifies the top 70% of those stocks measured by fundamental weight as "large," the next 20% as "mid," and the last 10% as "small." Next, the index provider classifies each stock as "growth," "core" or "value" based on fundamental measures of these characteristics. Finally, the index provider identifies the common stocks that it classifies as "small" and "value" for inclusion into the Index and weights them according to their composite fundamental weight.
For the fiscal year ended April 30, 2013, on a market price basis, the Fund returned 22.58%. On a net asset value ("NAV") basis, the Fund returned 22.56%. During the same time period, the Blended – RAFI® Fundamental Small Value Index returned 22.88%. During the fiscal year, the Fund fully replicated the components of the Index; therefore, the Fund's performance differed from the return of the Index primarily due to fees and operating expenses that the Fund incurred during the period.
During this same time period, the S&P SmallCap 600® Value Index returned 19.23%, the Russell 2000® Value Index returned 19.71%, and the S&P 500® Index returned 16.89%. The S&P SmallCap 600® Value Index, Russell 2000® Value Index and S&P 500® Index (the "Benchmark Indices") are unmanaged indices weighted by market capitalization based on the average performance of approximately 444, 1,407 and 500 securities, respectively. The adviser provided these additional comparative benchmarks to help investors better understand how the investment results of the Fund compare to the performance of other indices similar to the Index, as well as to that of broad-based market benchmarks.
The adviser selected the S&P SmallCap 600® Value Index and Russell 2000® Value Index as comparative indices to the Fund because of their recognition in the marketplace and their shared exposure to small cap value stocks. These reasons make their performance relevant when comparing to the Fund's performance. The S&P 500® Index does not have the same specific size and style relevance, however, its performance comparison is a useful measure for investors as a broad representation of the overall U.S. stock market.
The performance of the Fund differed from these Benchmark Indices in part because the Fund tracks an Index that employs a fundamental weighting and stock selection methodology, whereas the Benchmark Indices select and weight stocks based on market capitalization. Relative to the S&P SmallCap 600® Value Index, the Fund was overweight in the Consumer Discretionary sector and similarly exposed to the Industrials and Materials sectors and benefited from the positive relative performance of specific stocks included in the Index from these sectors during the fiscal year ended April 30, 2013. The majority of the Fund's outperformance relative to the S&P SmallCap 600® Value Index during that period can be attributed to these sector allocations and specific stock performances. Relative to the Russell 2000® Value Index, the Fund was overweight in the Consumer Discretionary, Materials, and Industrials sectors and benefited from the positive performance of specific stocks included in the Index from these sectors during the fiscal year ended April 30, 2013. The majority of the Fund's outperformance relative to the Russell 2000® Value Index during that period can be attributed to these sector allocations and specific stock performances.
44
Manager's Analysis (Continued)
PowerShares Fundamental Pure Small Value Portfolio (ticker: PXSV)
Relative to the S&P 500® Index, the Fund was overweight in the Consumer Discretionary sector and underweight in the Information Technology sector and benefitted from positive relative performance of specific stocks included in the Index from these sectors during the fiscal year ended April 30, 2013. The majority of the Fund's outperformance relative to the S&P 500® Index during that period can be attributed to these sector allocations and specific stock performances.
For the fiscal year ended April 30, 2013, the Consumer Discretionary sector contributed most significantly to the Fund's return, followed by the Financials and Industrials sectors, respectively. The Energy sector detracted most from the Fund's return.
Positions that contributed most significantly to the Fund's return included Redwood Trust, Inc., a financials company (portfolio average weight of 0.48%); and KB Home, a consumer discretionary company (portfolio average weight of 0.38%). Positions that detracted most significantly from the Fund's return included Overseas Shipholding Group Inc., an energy company (no longer held at April 30, 2013); and Knight Capital Group, Inc. Class A, a financials company (portfolio average weight of 0.16%).
Sector Breakdown (% of the Fund's
Net Assets) as of April 30, 2013
Financials | 23.4 | ||||||
Consumer Discretionary | 21.7 | ||||||
Industrials | 19.7 | ||||||
Information Technology | 11.2 | ||||||
Materials | 5.2 | ||||||
Utilities | 5.1 | ||||||
Energy | 4.7 | ||||||
Consumer Staples | 3.8 | ||||||
Health Care | 3.7 | ||||||
Telecommunication Services | 1.5 | ||||||
Money Market Fund | 4.1 | ||||||
Liabilities in excess of other assets | (4.1 | ) |
Top Ten Fund Holdings (% of the Fund's
Net Assets) as of April 30, 2013
Security | |||||||
FirstMerit Corp. | 0.6 | ||||||
Regal Entertainment Group, Class A | 0.5 | ||||||
Williams-Sonoma, Inc. | 0.5 | ||||||
Brinker International, Inc. | 0.4 | ||||||
CACI International, Inc., Class A | 0.4 | ||||||
Jones Group, Inc. (The) | 0.4 | ||||||
iStar Financial, Inc. REIT | 0.4 | ||||||
Southwest Gas Corp. | 0.4 | ||||||
Chiquita Brands International, Inc. | 0.4 | ||||||
Southwest Airlines Co. | 0.4 | ||||||
Total | 4.4 |
45
Manager's Analysis (Continued)
PowerShares Fundamental Pure Small Value Portfolio (ticker: PXSV)
Growth of a $10,000 Investment Since Inception†
Fund Performance History (%) As of April 30, 2013
3 Years | 3 Years | 5 Years | 5 Years | Fund Inception† | |||||||||||||||||||||||||||
1 Year | Avg. Ann.††† | Cumulative | Avg. Ann.††† | Cumulative | Avg. Ann.††† | Cumulative | |||||||||||||||||||||||||
Index | |||||||||||||||||||||||||||||||
Blended – RAFI® Fundamental Small Value Index†† | 22.88 | % | 12.48 | % | 42.31 | % | 6.42 | % | 36.49 | % | 5.41 | % | 53.65 | % | |||||||||||||||||
S&P SmallCap 600® Value Index | 19.23 | % | 11.49 | % | 38.58 | % | 7.92 | % | 46.41 | % | 6.68 | % | 69.63 | % | |||||||||||||||||
Russell 2000® Value Index | 19.71 | % | 9.58 | % | 31.59 | % | 6.60 | % | 37.66 | % | 5.76 | % | 57.95 | % | |||||||||||||||||
S&P 500® Index | 16.89 | % | 12.80 | % | 43.54 | % | 5.21 | % | 28.92 | % | 5.72 | % | 57.50 | % | |||||||||||||||||
Fund | |||||||||||||||||||||||||||||||
NAV Return | 22.56 | % | 11.95 | % | 40.30 | % | 5.73 | % | 32.14 | % | 4.70 | % | 45.46 | % | |||||||||||||||||
Market Price Return | 22.58 | % | 11.96 | % | 40.35 | % | 5.72 | % | 32.08 | % | 4.67 | % | 45.14 | % |
Fund Inception: March 3, 2005
Performance quoted above represents past performance. Past performance is not a guarantee of future results and current performance may be higher or lower than performance quoted. Investment returns and principal value will fluctuate, and shares of the Fund ("Fund Shares"), when redeemed or sold, may be worth more or less than their original cost. Had the adviser not waived fees and/or reimbursed expenses, performance would have been lower. The adviser has contractually agreed to waive fees and/or pay certain Fund expenses through August 31, 2014. According to the Fund's current prospectus, the total gross annual operating expense ratio was indicated as 0.61%. The Financial Highlights section of the Shareholders Report presents the expense ratios based on expenses incurred during the period covered by this report. NAV and Market Price returns assume that dividends and capital gain distributions have been reinvested in the Fund at NAV and Market 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.
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.
† Fund and Index returns are based on the inception date of the Fund. Returns for the Benchmark Indices are based on the closest month-end to the Fund's inception date.
†† Effective June 16, 2011, the Fund's underlying index and investment policies changed. Prior to June 16, 2011, the Fund sought to replicate, before fees and expenses, the performance of the Dynamic Small Cap Value IntellidexSM Index. "3 Years," "5 Years" and "Fund Inception" performance for the RAFI® Fundamental Small Value Index was not available in the prior year because that Index did not commence calculation and publication until April 15, 2011. The data shown as the Blended-Index is comprised of the performance of the Dynamic Small Cap Value IntellidexSM Index, the Fund's previous underlying index, from Fund inception through the conversion date, June 16, 2011, followed by the performance of the RAFI® Fundamental Small Value Index starting from the conversion date through April 30, 2013.
††† Average annualized.
46
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Manager's Analysis
PowerShares Zacks Micro Cap Portfolio (ticker: PZI)
As an index fund, the PowerShares Zacks Micro Cap Portfolio (the "Fund") is passively managed and attempts to track the returns of an underlying index. The Fund seeks investment results that generally correspond (before fees and expenses) to the price and yield of the Zacks Micro Cap IndexTM (the "Index"). The Fund generally will invest at least 90% of its total assets in common stocks of micro capitalization companies that comprise the Index.
The Index uses a proprietary stock selection methodology to select micro cap stocks with superior risk-return profiles, as determined by the Index provider, with the objective of outperforming passive micro cap indices and actively managed U.S. micro capitalization strategies. The Index's proprietary stock selection method includes screens for relative value and momentum. For the purposes of the Index, micro cap stocks are defined as having a market capitalization between 0.015% and 0.15% of the largest capitalization U.S. company at the time of selection.
For the fiscal year ended April 30, 2013, on a market price basis, the Fund returned 21.90%. On a net asset value ("NAV") basis, the Fund returned 21.95%. During the same time period, the Index returned 20.45%. During the fiscal year, the Fund fully replicated the components of the Index. However, the Index does not take dividends into consideration when determining its total return. Therefore, after reflecting its expense ratio, the Fund outperformed the Index by 1.50% primarily due to the Index not accounting for dividends.
During this same time period, the Russell Microcap® Index returned 18.58%, the Dow Jones Select Micro Cap Index returned 16.30%, and the S&P 500® Index returned 16.89%. The Russell Microcap® Index, Dow Jones Select Micro Cap Index and S&P 500® Index (the "Benchmark Indices") are unmanaged indices weighted by market capitalization based on the average performance of approximately 1,433, 272 and 500 securities, respectively. The adviser provided these additional comparative benchmarks to help investors better understand how the investment results of the Fund compare to the performance of other indices similar to the Index, as well as to that of broad-based market benchmarks.
The adviser selected the Russell Microcap® Index and the Dow Jones Select Micro Cap Index as comparative indices to the Fund because of their recognition in the marketplace and their shared exposure to the micro cap sector. The S&P 500® Index does not have the same specific micro cap relevance as the Russell Microcap® Index and the Dow Jones Select Micro Cap Index; however, it was also selected for its recognition in the marketplace, and its performance comparison is a useful measure for investors as a broad representation of the overall U.S. stock market.
The performance of the Fund differed from these Benchmark Indices in part because the Fund tracks an Index that employs a proprietary stock selection methodology that differs from the stock selection methodology of the Benchmark Indices. Relative to the Dow Jones Select Micro Cap Index, the Fund outperformed in large part due to the positive performance of specific stocks included within the Index from the Financials sector and Industrials sector. Relative to the Russell Microcap® Index, the Fund outperformed in large part due to the positive performance of specific stocks included within the Index from the Financials sector and Energy sector.
Relative to the S&P 500® Index, the Fund was overweight in the Financials sector and underweight in the Information Technology sector during the fiscal year ended April 30, 2013. The majority of the Fund's outperformance relative to the S&P 500® Index during that period can be attributed to these sector allocations.
For the fiscal year ended April 30, 2013, the Financials sector contributed most significantly to the Fund's return, followed by the Industrials and Consumer Discretionary sectors, respectively. The Energy sector detracted most from the Fund's return.
48
Manager's Analysis (Continued)
PowerShares Zacks Micro Cap Portfolio (ticker: PZI)
Positions that contributed most significantly to the Fund's return included Radian Group Inc., a financials company (no longer held at April 30, 2013); and Gray Television Inc., a consumer discretionary company (portfolio average weight of 0.12%). Positions that detracted most significantly from the Fund's return included Exide Technologies, a consumer discretionary company (portfolio average weight of 0.06%); and Genco Shipping & Trading Ltd., an industrials company (portfolio average weight of 0.04%).
Sector Breakdown (% of the Fund's
Net Assets) as of April 30, 2013
Financials | 34.9 | ||||||
Consumer Discretionary | 13.4 | ||||||
Industrials | 13.0 | ||||||
Health Care | 11.7 | ||||||
Information Technology | 11.7 | ||||||
Energy | 5.7 | ||||||
Materials | 3.5 | ||||||
Consumer Staples | 2.9 | ||||||
Telecommunication Services | 2.1 | ||||||
Utilities | 1.1 | ||||||
Money Market Fund | 3.6 | ||||||
Liabilities in excess of other assets | (3.6 | ) |
Top Ten Fund Holdings (% of the Fund's
Net Assets) as of April 30, 2013
Security | |||||||
Overstock.com, Inc. | 0.4 | ||||||
Canadian Solar, Inc. | 0.4 | ||||||
ACADIA Pharmaceuticals, Inc. | 0.4 | ||||||
Astex Pharmaceuticals | 0.4 | ||||||
Power-One, Inc. | 0.4 | ||||||
BBX Capital Corp., Class A | 0.4 | ||||||
Gray Television, Inc. | 0.3 | ||||||
Ruby Tuesday, Inc. | 0.3 | ||||||
Repligen Corp. | 0.3 | ||||||
Patrick Industries, Inc. | 0.3 | ||||||
Total | 3.6 |
49
Manager's Analysis (Continued)
PowerShares Zacks Micro Cap Portfolio (ticker: PZI)
Growth of a $10,000 Investment Since Inception†
Fund Performance History (%) As of April 30, 2013
3 Years | 3 Years | 5 Years | 5 Years | Fund Inception† | |||||||||||||||||||||||||||
1 Year | Avg. Ann.†† | Cumulative | Avg. Ann.†† | Cumulative | Avg Ann†† | Cumulative | |||||||||||||||||||||||||
Index | |||||||||||||||||||||||||||||||
Zacks Micro Cap IndexTM | 20.45 | % | 5.58 | % | 17.69 | % | 0.33 | % | 1.65 | % | -0.82 | % | -6.14 | % | |||||||||||||||||
Russell Microcap® Index | 18.58 | % | 9.76 | % | 32.21 | % | 6.22 | % | 35.24 | % | 3.68 | % | 31.92 | % | |||||||||||||||||
Dow Jones Select Micro Cap Index | 16.30 | % | 9.27 | % | 30.47 | % | 5.64 | % | 31.57 | % | 4.36 | % | 38.70 | % | |||||||||||||||||
S&P 500® Index | 16.89 | % | 12.80 | % | 43.54 | % | 5.21 | % | 28.92 | % | 5.79 | % | 53.91 | % | |||||||||||||||||
Fund | |||||||||||||||||||||||||||||||
NAV Return | 21.95 | % | 6.47 | % | 20.69 | % | 1.15 | % | 5.89 | % | -0.20 | % | -1.54 | % | |||||||||||||||||
Market Price Return | 21.90 | % | 6.42 | % | 20.53 | % | 1.12 | % | 5.73 | % | -0.25 | % | -1.89 | % |
Fund Inception: August 18, 2005
Performance quoted above represents past performance. Past performance is not a guarantee of future results and current performance may be higher or lower than performance quoted. Investment returns and principal value will fluctuate, and shares of the Fund ("Fund Shares"), when redeemed or sold, may be worth more or less than their original cost. Had the adviser not waived fees and/or reimbursed expenses, performance would have been lower. The adviser has contractually agreed to waive fees and/or pay certain Fund expenses through April 31, 2014. According to the Fund's current prospectus, the total gross annual operating expense ratio was indicated as 1.13%, including estimated acquired fund fees and expenses of 0.21%. The Financial Highlights section of the Shareholders Report presents the expense ratios based on expenses incurred during the period covered by this report. NAV and Market Price returns assume that dividends and capital gain distributions have been reinvested in the Fund at NAV and Market 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.
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.
† Fund and Index returns are based on the inception date of the Fund. Returns for the Benchmark Indices are based on the closest month-end to the Fund's inception date.
†† Average annualized.
50
Fees and Expenses
As a shareholder of a Fund of the PowerShares Exchange-Traded Fund Trust, you incur advisory fees and other 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 ended April 30, 2013.
In pursuing its investment objectives, PowerShares Zacks Micro Cap Portfolio and Fundamental Pure Small Growth Portfolio (the "Portfolios") may invest a portion of their assets in investment companies. The Portfolios indirectly bear a pro rata share of the fees and expenses of the investment companies in which the Portfolios invests. The investment companies' expenses are not expenses that are incurred directly by the Portfolios. They are expenses that are incurred directly by the investment companies and are deducted from the value of the investment companies the Portfolios invest in. The effect of such expenses are included in each Portfolio's total returns.
Actual Expenses
The first line in the following table 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 table provides information about hypothetical account values and hypothetical expenses based on each Fund's actual expense ratio and an assumed annualized rate of return of 5% per year before expenses, which is not the Fund's 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 table are meant to highlight your ongoing costs only, and do not reflect any transactional costs, such as sales charges and brokerage commissions. 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, expenses shown in the table do not include the expenses of the underlying funds, which are borne indirectly by the Fund. If transaction costs and indirect expenses were included, your costs would have been higher.
Beginning Account Value November 1, 2012 | Ending Account Value April 30, 2013 | Annualized Expense Ratio Based on the Six-Month Period | Expenses Paid During the Six-Month Period (1) | ||||||||||||||||
PowerShares Dynamic Large Cap Growth Portfolio (PWB) Actual | $ | 1,000.00 | $ | 1,155.03 | 0.57 | % | $ | 3.05 | |||||||||||
Hypothetical (5% return before expenses) | $ | 1,000.00 | $ | 1,021.97 | 0.57 | % | $ | 2.86 |
51
Fees and Expenses (Continued)
Beginning Account Value November 1, 2012 | Ending Account Value April 30, 2013 | Annualized Expense Ratio Based on the Six-Month Period | Expenses Paid During the Six-Month Period (1) | ||||||||||||||||
PowerShares Dynamic Large Cap Value Portfolio (PWV) Actual | $ | 1,000.00 | $ | 1,176.60 | 0.59 | % | $ | 3.18 | |||||||||||
Hypothetical (5% return before expenses) | $ | 1,000.00 | $ | 1,021.87 | 0.59 | % | $ | 2.96 | |||||||||||
PowerShares Fundamental Pure Large Core Portfolio (PXLC) Actual | $ | 1,000.00 | $ | 1,164.19 | 0.39 | % | $ | 2.09 | |||||||||||
Hypothetical (5% return before expenses) | $ | 1,000.00 | $ | 1,022.86 | 0.39 | % | $ | 1.96 | |||||||||||
PowerShares Fundamental Pure Large Growth Portfolio (PXLG) Actual | $ | 1,000.00 | $ | 1,118.78 | 0.39 | % | $ | 2.05 | |||||||||||
Hypothetical (5% return before expenses) | $ | 1,000.00 | $ | 1,022.86 | 0.39 | % | $ | 1.96 | |||||||||||
PowerShares Fundamental Pure Large Value Portfolio (PXLV) Actual | $ | 1,000.00 | $ | 1,186.50 | 0.39 | % | $ | 2.11 | |||||||||||
Hypothetical (5% return before expenses) | $ | 1,000.00 | $ | 1,022.86 | 0.39 | % | $ | 1.96 | |||||||||||
PowerShares Fundamental Pure Mid Core Portfolio (PXMC) Actual | $ | 1,000.00 | $ | 1,169.33 | 0.39 | % | $ | 2.10 | |||||||||||
Hypothetical (5% return before expenses) | $ | 1,000.00 | $ | 1,022.86 | 0.39 | % | $ | 1.96 | |||||||||||
PowerShares Fundamental Pure Mid Growth Portfolio (PXMG) Actual | $ | 1,000.00 | $ | 1,186.67 | 0.39 | % | $ | 2.11 | |||||||||||
Hypothetical (5% return before expenses) | $ | 1,000.00 | $ | 1,022.86 | 0.39 | % | $ | 1.96 | |||||||||||
PowerShares Fundamental Pure Mid Value Portfolio (PXMV) Actual | $ | 1,000.00 | $ | 1,217.34 | 0.39 | % | $ | 2.14 | |||||||||||
Hypothetical (5% return before expenses) | $ | 1,000.00 | $ | 1,022.86 | 0.39 | % | $ | 1.96 | |||||||||||
PowerShares Fundamental Pure Small Core Portfolio (PXSC) Actual | $ | 1,000.00 | $ | 1,175.25 | 0.39 | % | $ | 2.10 | |||||||||||
Hypothetical (5% return before expenses) | $ | 1,000.00 | $ | 1,022.86 | 0.39 | % | $ | 1.96 | |||||||||||
PowerShares Fundamental Pure Small Growth Portfolio (PXSG) Actual | $ | 1,000.00 | $ | 1,131.87 | 0.39 | % | $ | 2.06 | |||||||||||
Hypothetical (5% return before expenses) | $ | 1,000.00 | $ | 1,022.86 | 0.39 | % | $ | 1.96 | |||||||||||
PowerShares Fundamental Pure Small Value Portfolio (PXSV) Actual | $ | 1,000.00 | $ | 1,191.15 | 0.39 | % | $ | 2.12 | |||||||||||
Hypothetical (5% return before expenses) | $ | 1,000.00 | $ | 1,022.86 | 0.39 | % | $ | 1.96 | |||||||||||
PowerShares Zacks Micro Cap Portfolio (PZI) Actual | $ | 1,000.00 | $ | 1,191.22 | 0.70 | % | $ | 3.80 | |||||||||||
Hypothetical (5% return before expenses) | $ | 1,000.00 | $ | 1,021.32 | 0.70 | % | $ | 3.51 |
(1) Expenses are calculated using the annualized expense ratio, which represents the ongoing expenses as a percentage of net assets for the six-month period ended April 30, 2013. Expenses are calculated by multiplying the Fund's annualized expense ratio by the average account value for the period, then multiplying the result by 181/365. Expense ratios for the most recent six-month period may differ from expense ratios based on the annualized data in the Financial Highlights.
52
Schedule of Investments
PowerShares Dynamic Large Cap Growth Portfolio (PWB)
April 30, 2013
Number of Shares | Value | ||||||||||
Common Stocks and Other Equity Interests—100.0% | |||||||||||
Consumer Discretionary—30.0% | |||||||||||
7,425 | AutoZone, Inc.(a) | $ | 3,037,493 | ||||||||
167,210 | Comcast Corp., Class A | 6,905,773 | |||||||||
58,260 | DIRECTV(a) | 3,295,186 | |||||||||
40,585 | Discovery Communications, Inc., Class A(a) | 3,198,910 | |||||||||
62,133 | Dollar General Corp.(a) | 3,236,508 | |||||||||
89,487 | Gap, Inc. (The) | 3,399,611 | |||||||||
101,758 | Home Depot, Inc. (The) | 7,463,949 | |||||||||
44,094 | Liberty Global, Inc., Class A(a) | 3,191,083 | |||||||||
75,922 | Lowe's Cos., Inc. | 2,916,923 | |||||||||
233,577 | News Corp., Class A | 7,233,880 | |||||||||
4,177 | Priceline.com, Inc.(a) | 2,907,150 | |||||||||
16,712 | Ralph Lauren Corp. | 3,034,565 | |||||||||
33,105 | Time Warner Cable, Inc. | 3,108,229 | |||||||||
64,677 | TJX Cos., Inc. (The) | 3,154,297 | |||||||||
123,010 | Walt Disney Co. (The) | 7,729,948 | |||||||||
63,813,505 | |||||||||||
Consumer Staples—13.5% | |||||||||||
42,769 | Brown-Forman Corp., Class B | 3,015,215 | |||||||||
25,094 | Colgate-Palmolive Co. | 2,996,475 | |||||||||
28,272 | Costco Wholesale Corp. | 3,065,533 | |||||||||
35,209 | Hershey Co. (The) | 3,139,234 | |||||||||
69,502 | Lorillard, Inc. | 2,980,941 | |||||||||
71,433 | Philip Morris International, Inc. | 6,828,280 | |||||||||
86,678 | Procter & Gamble Co. (The) | 6,654,270 | |||||||||
28,679,948 | |||||||||||
Energy—2.7% | |||||||||||
34,985 | Anadarko Petroleum Corp. | 2,965,329 | |||||||||
25,629 | Noble Energy, Inc. | 2,903,509 | |||||||||
5,868,838 | |||||||||||
Financials—11.9% | |||||||||||
38,380 | American Tower Corp. REIT | 3,223,536 | |||||||||
65,935 | Berkshire Hathaway, Inc., Class B(a) | 7,010,209 | |||||||||
11,873 | BlackRock, Inc. | 3,164,154 | |||||||||
170,950 | Charles Schwab Corp. (The) | 2,899,312 | |||||||||
19,967 | Franklin Resources, Inc. | 3,088,096 | |||||||||
78,163 | Marsh & McLennan Cos., Inc. | 2,970,976 | |||||||||
96,231 | Weyerhaeuser Co. REIT | 2,936,008 | |||||||||
25,292,291 | |||||||||||
Health Care—11.4% | |||||||||||
17,396 | Biogen Idec, Inc.(a) | 3,808,506 | |||||||||
28,137 | Celgene Corp.(a) | 3,322,136 | |||||||||
32,663 | Cerner Corp.(a) | 3,160,798 | |||||||||
51,411 | Express Scripts Holding Co.(a) | 3,052,271 | |||||||||
157,203 | Gilead Sciences, Inc.(a) | 7,960,760 | |||||||||
27,591 | McKesson Corp. | 2,919,680 | |||||||||
24,224,151 |
Number of Shares | Value | ||||||||||
Common Stocks and Other Equity Interests (Continued) | |||||||||||
Industrials—3.4% | |||||||||||
49,061 | Union Pacific Corp. | $ | 7,259,066 | ||||||||
Information Technology—21.4% | |||||||||||
14,804 | Apple, Inc. | 6,554,471 | |||||||||
121,290 | eBay, Inc.(a) | 6,354,383 | |||||||||
8,344 | Google, Inc., Class A(a) | 6,880,212 | |||||||||
45,555 | Intuit, Inc. | 2,716,900 | |||||||||
12,739 | MasterCard, Inc., Class A | 7,043,775 | |||||||||
46,204 | Motorola Solutions, Inc. | 2,642,869 | |||||||||
102,761 | QUALCOMM, Inc. | 6,332,133 | |||||||||
41,857 | Visa, Inc., Class A | 7,051,230 | |||||||||
45,575,973 | |||||||||||
Materials—4.2% | |||||||||||
28,605 | Monsanto Co. | 3,055,586 | |||||||||
18,118 | Sherwin-Williams Co. (The) | 3,317,587 | |||||||||
77,823 | Southern Copper Corp. | 2,593,841 | |||||||||
8,967,014 | |||||||||||
Telecommunication Services—1.5% | |||||||||||
40,875 | Crown Castle International Corp.(a) | 3,147,375 | |||||||||
Total Common Stocks and Other Equity Interests (Cost $171,987,728) | 212,828,161 | ||||||||||
Money Market Fund—0.1% | |||||||||||
198,665 | Goldman Sachs Financial Square Prime Obligations—Institutional Share Class (Cost $198,665) | 198,665 | |||||||||
Total Investments (Cost $172,186,393)—100.1% | 213,026,826 | ||||||||||
Liabilities in excess of other assets—(0.1)% | (129,911 | ) | |||||||||
Net Assets—100.0% | $ | 212,896,915 |
Investment Abbreviations:
REIT—Real Estate Investment Trust
Notes to Schedule of Investments:
(a) Non-income producing security.
See Notes to Financial Statements.
53
Schedule of Investments
PowerShares Dynamic Large Cap Value Portfolio (PWV)
April 30, 2013
Number of Shares | Value | ||||||||||
Common Stocks—100.0% | |||||||||||
Consumer Discretionary—3.0% | |||||||||||
614,086 | Ford Motor Co. | $ | 8,419,119 | ||||||||
282,691 | General Motors Co.(a) | 8,718,191 | |||||||||
17,137,310 | |||||||||||
Consumer Staples—8.0% | |||||||||||
266,197 | Kroger Co. (The) | 9,151,853 | |||||||||
170,571 | Reynolds American, Inc. | 8,088,477 | |||||||||
183,302 | Walgreen Co. | 9,075,282 | |||||||||
254,012 | Wal-Mart Stores, Inc. | 19,741,812 | |||||||||
46,057,424 | |||||||||||
Energy—13.3% | |||||||||||
154,208 | Chevron Corp. | 18,814,918 | |||||||||
307,255 | ConocoPhillips | 18,573,565 | |||||||||
200,474 | Exxon Mobil Corp. | 17,840,181 | |||||||||
94,003 | Marathon Petroleum Corp. | 7,366,075 | |||||||||
119,539 | Phillips 66 | 7,285,902 | |||||||||
166,354 | Valero Energy Corp. | 6,707,394 | |||||||||
76,588,035 | |||||||||||
Financials—22.1% | |||||||||||
88,404 | ACE Ltd. | 7,880,333 | |||||||||
163,970 | Allstate Corp. (The) | 8,077,162 | |||||||||
199,319 | American International Group, Inc.(a) | 8,255,793 | |||||||||
90,618 | Chubb Corp. (The) | 7,980,727 | |||||||||
485,054 | Fifth Third Bancorp | 8,260,470 | |||||||||
365,616 | JPMorgan Chase & Co. | 17,918,840 | |||||||||
175,456 | Loews Corp. | 7,837,620 | |||||||||
136,660 | Prudential Financial, Inc. | 8,256,997 | |||||||||
274,690 | SunTrust Banks, Inc. | 8,034,682 | |||||||||
94,602 | Travelers Cos., Inc. (The) | 8,079,957 | |||||||||
527,813 | U.S. Bancorp | 17,565,617 | |||||||||
499,226 | Wells Fargo & Co. | 18,960,603 | |||||||||
127,108,801 | |||||||||||
Health Care—20.8% | |||||||||||
199,268 | AbbVie, Inc. | 9,176,292 | |||||||||
161,071 | Aetna, Inc. | 9,251,918 | |||||||||
168,213 | Cardinal Health, Inc. | 7,438,379 | |||||||||
329,506 | Eli Lilly & Co. | 18,248,042 | |||||||||
234,521 | Johnson & Johnson | 19,988,225 | |||||||||
171,374 | Medtronic, Inc. | 7,999,739 | |||||||||
416,155 | Merck & Co., Inc. | 19,559,285 | |||||||||
653,118 | Pfizer, Inc. | 18,986,140 | |||||||||
123,771 | WellPoint, Inc. | 9,025,381 | |||||||||
119,673,401 | |||||||||||
Industrials—7.5% | |||||||||||
99,974 | Boeing Co. (The) | 9,138,623 | |||||||||
87,956 | Deere & Co. | 7,854,471 | |||||||||
86,968 | Lockheed Martin Corp. | 8,617,659 | |||||||||
116,170 | Northrop Grumman Corp. | 8,798,716 | |||||||||
140,776 | Raytheon Co. | 8,640,831 | |||||||||
43,050,300 |
Number of Shares | Value | ||||||||||
Common Stocks (Continued) | |||||||||||
Information Technology—11.0% | |||||||||||
550,562 | Dell, Inc. | $ | 7,377,531 | ||||||||
399,156 | Hewlett-Packard Co. | 8,222,614 | |||||||||
88,930 | International Business Machines Corp. | 18,011,882 | |||||||||
644,174 | Microsoft Corp. | 21,322,159 | |||||||||
334,227 | Symantec Corp.(a) | 8,121,716 | |||||||||
63,055,902 | |||||||||||
Materials—1.5% | |||||||||||
178,229 | International Paper Co. | 8,373,198 | |||||||||
Telecommunication Services—8.4% | |||||||||||
501,184 | AT&T, Inc. | 18,774,353 | |||||||||
221,241 | CenturyLink, Inc. | 8,312,024 | |||||||||
393,887 | Verizon Communications, Inc. | 21,234,448 | |||||||||
48,320,825 | |||||||||||
Utilities—4.4% | |||||||||||
165,954 | American Electric Power Co., Inc. | 8,535,014 | |||||||||
238,302 | Public Service Enterprise Group, Inc. | 8,724,236 | |||||||||
99,801 | Sempra Energy | 8,268,513 | |||||||||
25,527,763 | |||||||||||
Total Investments (Cost $477,943,545)—100.0% | 574,892,959 | ||||||||||
Liabilities in excess of other assets—(0.0)% | (67,727 | ) | |||||||||
Net Assets—100.0% | $ | 574,825,232 |
Notes to Schedule of Investments:
(a) Non-income producing security.
See Notes to Financial Statements.
54
Schedule of Investments
PowerShares Fundamental Pure Large Core Portfolio (PXLC)
April 30, 2013
Number of Shares | Value | ||||||||||
Common Stocks—100.0% | |||||||||||
Consumer Discretionary—12.8% | |||||||||||
4,019 | DIRECTV(a) | $ | 227,315 | ||||||||
64,871 | Ford Motor Co. | 889,381 | |||||||||
14,506 | General Motors Co.(a) | 447,365 | |||||||||
6,895 | Johnson Controls, Inc. | 241,394 | |||||||||
1,740 | Liberty Global, Inc., Class A(a) | 125,924 | |||||||||
5,634 | McDonald's Corp. | 575,457 | |||||||||
10,217 | News Corp., Class A | 316,421 | |||||||||
2,536 | Time Warner Cable, Inc. | 238,105 | |||||||||
8,323 | Walt Disney Co. (The) | 523,017 | |||||||||
3,584,379 | |||||||||||
Consumer Staples—15.3% | |||||||||||
10,710 | Archer-Daniels-Midland Co. | 363,497 | |||||||||
2,339 | Bunge Ltd. | 168,899 | |||||||||
4,483 | General Mills, Inc. | 226,033 | |||||||||
1,962 | H.J. Heinz Co. | 142,088 | |||||||||
3,621 | Lorillard, Inc. | 155,305 | |||||||||
18,949 | Procter & Gamble Co. (The) | 1,454,715 | |||||||||
8,786 | Walgreen Co. | 434,995 | |||||||||
16,884 | Wal-Mart Stores, Inc. | 1,312,224 | |||||||||
4,257,756 | |||||||||||
Energy—5.1% | |||||||||||
2,867 | Anadarko Petroleum Corp. | 243,007 | |||||||||
8,462 | Chesapeake Energy Corp. | 165,348 | |||||||||
3,919 | Hess Corp. | 282,873 | |||||||||
3,037 | Marathon Petroleum Corp. | 237,979 | |||||||||
2,659 | Murphy Oil Corp. | 165,097 | |||||||||
5,806 | Spectra Energy Corp. | 183,063 | |||||||||
3,673 | Williams Cos., Inc. (The) | 140,052 | |||||||||
1,417,419 | |||||||||||
Financials—22.2% | |||||||||||
2,918 | ACE Ltd. | 260,110 | |||||||||
4,237 | Aflac, Inc. | 230,662 | |||||||||
6,820 | American Express Co. | 466,556 | |||||||||
12,064 | Bank of New York Mellon Corp. (The) | 340,446 | |||||||||
13,216 | Berkshire Hathaway, Inc., Class B(a) | 1,405,125 | |||||||||
6,182 | Capital One Financial Corp. | 357,196 | |||||||||
7,084 | Charles Schwab Corp. (The) | 120,145 | |||||||||
3,668 | Marsh & McLennan Cos., Inc. | 139,421 | |||||||||
12,728 | MetLife, Inc. | 496,265 | |||||||||
5,547 | PNC Financial Services Group, Inc. | 376,530 | |||||||||
3,427 | State Street Corp. | 200,377 | |||||||||
47,056 | Wells Fargo & Co. | 1,787,187 | |||||||||
6,180,020 | |||||||||||
Health Care—20.6% | |||||||||||
19,165 | Abbott Laboratories | 707,572 | |||||||||
7,123 | AbbVie, Inc. | 328,014 | |||||||||
4,030 | Aetna, Inc. | 231,483 | |||||||||
5,142 | AmerisourceBergen Corp. | 278,285 | |||||||||
2,865 | Baxter International, Inc. | 200,177 | |||||||||
13,765 | Bristol-Myers Squibb Co. | 546,746 | |||||||||
2,147 | Cigna Corp. | 142,067 |
Number of Shares | Value | ||||||||||
Common Stocks (Continued) | |||||||||||
8,112 | Eli Lilly & Co. | $ | 449,243 | ||||||||
18,538 | Johnson & Johnson | 1,579,994 | |||||||||
3,304 | McKesson Corp. | 349,629 | |||||||||
7,012 | Medtronic, Inc. | 327,320 | |||||||||
10,027 | UnitedHealth Group, Inc. | 600,918 | |||||||||
5,741,448 | |||||||||||
Industrials—9.0% | |||||||||||
4,203 | 3M Co. | 440,096 | |||||||||
7,686 | CSX Corp. | 188,999 | |||||||||
2,534 | Deere & Co. | 226,286 | |||||||||
5,436 | Emerson Electric Co. | 301,752 | |||||||||
2,364 | FedEx Corp. | 222,240 | |||||||||
4,534 | Honeywell International, Inc. | 333,430 | |||||||||
3,390 | Illinois Tool Works, Inc. | 218,859 | |||||||||
6,313 | United Technologies Corp. | 576,314 | |||||||||
2,507,976 | |||||||||||
Information Technology—10.3% | |||||||||||
2,615 | Automatic Data Processing, Inc. | 176,094 | |||||||||
45,151 | Intel Corp. | 1,081,366 | |||||||||
5,295 | International Business Machines Corp. | 1,072,449 | |||||||||
3,329 | TE Connectivity Ltd. (Switzerland) | 144,978 | |||||||||
6,466 | Texas Instruments, Inc. | 234,134 | |||||||||
18,941 | Xerox Corp. | 162,514 | |||||||||
2,871,535 | |||||||||||
Materials—2.5% | |||||||||||
1,595 | Air Products & Chemicals, Inc. | 138,701 | |||||||||
7,839 | E.I. du Pont de Nemours & Co. | 427,304 | |||||||||
903 | PPG Industries, Inc. | 132,868 | |||||||||
698,873 | |||||||||||
Utilities—2.2% | |||||||||||
5,379 | Duke Energy Corp. | 404,501 | |||||||||
6,208 | PPL Corp. | 207,223 | |||||||||
611,724 | |||||||||||
Total Common Stocks (Cost $24,722,840) | 27,871,130 | ||||||||||
Money Market Fund—0.2% | |||||||||||
58,457 | Goldman Sachs Financial Square Prime Obligations—Institutional Share Class (Cost $58,457) | 58,457 | |||||||||
Total Investments (Cost $24,781,297)—100.2% | 27,929,587 | ||||||||||
Liabilities in excess of other assets—(0.2)% | (56,046 | ) | |||||||||
Net Assets—100.0% | $ | 27,873,541 |
Notes to Schedule of Investments:
(a) Non-income producing security.
See Notes to Financial Statements.
55
Schedule of Investments
PowerShares Fundamental Pure Large Growth Portfolio (PXLG)
April 30, 2013
Number of Shares | Value | ||||||||||
Common Stocks and Other Equity Interests—100.0% | |||||||||||
Consumer Discretionary—8.0% | |||||||||||
2,528 | Amazon.com, Inc.(a) | $ | 641,632 | ||||||||
74,554 | Comcast Corp., Class A | 3,079,080 | |||||||||
14,597 | NIKE, Inc., Class B | 928,369 | |||||||||
14,320 | TJX Cos., Inc. (The) | 698,386 | |||||||||
10,096 | Viacom, Inc., Class B | 646,043 | |||||||||
8,623 | Yum! Brands, Inc. | 587,399 | |||||||||
6,580,909 | |||||||||||
Consumer Staples—19.6% | |||||||||||
93,471 | Coca-Cola Co. (The) | 3,956,628 | |||||||||
9,146 | Colgate-Palmolive Co. | 1,092,124 | |||||||||
15,647 | Costco Wholesale Corp. | 1,696,604 | |||||||||
46,457 | CVS Caremark Corp. | 2,702,868 | |||||||||
41,902 | PepsiCo, Inc. | 3,455,658 | |||||||||
34,770 | Philip Morris International, Inc. | 3,323,664 | |||||||||
16,227,546 | |||||||||||
Energy—13.8% | |||||||||||
17,462 | Apache Corp. | 1,290,092 | |||||||||
18,099 | Baker Hughes, Inc. | 821,514 | |||||||||
5,148 | EOG Resources, Inc. | 623,732 | |||||||||
24,934 | Halliburton Co. | 1,066,427 | |||||||||
12,679 | National Oilwell Varco, Inc. | 826,924 | |||||||||
29,799 | Occidental Petroleum Corp. | 2,659,859 | |||||||||
32,952 | Phillips 66 | 2,008,424 | |||||||||
28,999 | Schlumberger Ltd. | 2,158,396 | |||||||||
11,455,368 | |||||||||||
Financials—4.8% | |||||||||||
66,171 | Annaly Capital Management, Inc. REIT | 1,054,766 | |||||||||
3,243 | BlackRock, Inc. | 864,260 | |||||||||
12,161 | CME Group, Inc. | 740,118 | |||||||||
13,695 | Discover Financial Services | 599,019 | |||||||||
4,158 | Simon Property Group, Inc. REIT | 740,415 | |||||||||
3,998,578 | |||||||||||
Health Care—12.0% | |||||||||||
12,155 | Amgen, Inc. | 1,266,672 | |||||||||
11,050 | Covidien PLC (Ireland) | 705,432 | |||||||||
13,670 | Express Scripts Holding Co.(a) | 811,588 | |||||||||
14,179 | Gilead Sciences, Inc.(a) | 718,025 | |||||||||
10,802 | Humana, Inc. | 800,536 | |||||||||
102,487 | Merck & Co., Inc. | 4,816,889 | |||||||||
10,520 | Thermo Fisher Scientific, Inc. | 848,754 | |||||||||
9,967,896 | |||||||||||
Industrials—4.8% | |||||||||||
21,835 | Caterpillar, Inc. | 1,848,770 | |||||||||
10,176 | Danaher Corp. | 620,125 | |||||||||
10,213 | Union Pacific Corp. | 1,511,116 | |||||||||
3,980,011 |
Number of Shares | Value | ||||||||||
Common Stocks and Other Equity Interests (Continued) | |||||||||||
Information Technology—29.8% | |||||||||||
11,038 | Accenture PLC, Class A (Ireland) | $ | 898,935 | ||||||||
11,103 | Apple, Inc. | 4,915,853 | |||||||||
109,257 | Cisco Systems, Inc. | 2,285,656 | |||||||||
67,089 | Corning, Inc. | 972,791 | |||||||||
16,085 | eBay, Inc.(a) | 842,693 | |||||||||
48,009 | EMC Corp.(a) | 1,076,842 | |||||||||
3,019 | Google, Inc., Class A(a) | 2,489,377 | |||||||||
208,034 | Microsoft Corp. | 6,885,925 | |||||||||
57,551 | Oracle Corp. | 1,886,522 | |||||||||
24,811 | QUALCOMM, Inc. | 1,528,854 | |||||||||
5,311 | Visa, Inc., Class A | 894,691 | |||||||||
24,678,139 | |||||||||||
Materials—5.7% | |||||||||||
48,460 | Freeport-McMoRan Copper & Gold, Inc. | 1,474,638 | |||||||||
14,297 | LyondellBasell Industries NV, Class A (Netherlands) | 867,828 | |||||||||
8,764 | Monsanto Co. | 936,170 | |||||||||
20,079 | Newmont Mining Corp. | 650,560 | |||||||||
6,775 | Praxair, Inc. | 774,382 | |||||||||
4,703,578 | |||||||||||
Telecommunication Services—1.5% | |||||||||||
32,114 | CenturyLink, Inc. | 1,206,523 | |||||||||
Total Common Stocks and Other Equity Interests (Cost $79,483,293) | 82,798,548 | ||||||||||
Money Market Fund—0.0% | |||||||||||
39,979 | Goldman Sachs Financial Square Prime Obligations—Institutional Share Class (Cost $39,979) | 39,979 | |||||||||
Total Investments (Cost $79,523,272)—100.0% | 82,838,527 | ||||||||||
Liabilities in excess of other assets—(0.0)% | (22,116 | ) | |||||||||
Net Assets—100.0% | $ | 82,816,411 |
Investment Abbreviations:
REIT—Real Estate Investment Trust
Notes to Schedule of Investments:
(a) Non-income producing security.
See Notes to Financial Statements.
56
Schedule of Investments
PowerShares Fundamental Pure Large Value Portfolio (PXLV)
April 30, 2013
Number of Shares | Value | ||||||||||
Common Stocks and Other Equity Interests—100.0% | |||||||||||
Consumer Discretionary—5.4% | |||||||||||
593 | CBS Corp., Class B | $ | 27,147 | ||||||||
1,382 | Home Depot, Inc. (The) | 101,370 | |||||||||
1,535 | Lowe's Cos., Inc. | 58,975 | |||||||||
675 | Macy's, Inc. | 30,105 | |||||||||
2,059 | Staples, Inc. | 27,261 | |||||||||
1,094 | Target Corp. | 77,193 | |||||||||
1,386 | Time Warner, Inc. | 82,855 | |||||||||
404,906 | |||||||||||
Consumer Staples—6.4% | |||||||||||
3,242 | Altria Group, Inc. | 118,366 | |||||||||
587 | ConAgra Foods, Inc. | 20,762 | |||||||||
315 | Kellogg Co. | 20,488 | |||||||||
460 | Kimberly-Clark Corp. | 47,467 | |||||||||
782 | Kraft Foods Group, Inc. | 40,265 | |||||||||
1,653 | Kroger Co. (The) | 56,830 | |||||||||
3,540 | Mondelez International, Inc., Class A | 111,333 | |||||||||
505 | Reynolds American, Inc. | 23,947 | |||||||||
1,159 | Sysco Corp. | 40,403 | |||||||||
479,861 | |||||||||||
Energy—19.6% | |||||||||||
3,397 | Chevron Corp. | 414,468 | |||||||||
4,132 | ConocoPhillips | 249,779 | |||||||||
694 | Devon Energy Corp. | 38,212 | |||||||||
7,006 | Exxon Mobil Corp. | 623,464 | |||||||||
1,894 | Marathon Oil Corp. | 61,877 | |||||||||
1,575 | Valero Energy Corp. | 63,504 | |||||||||
1,984 | Weatherford International Ltd. (Switzerland)(a) | 25,375 | |||||||||
1,476,679 | |||||||||||
Financials—25.4% | |||||||||||
926 | Allstate Corp. (The) | 45,615 | |||||||||
822 | American International Group, Inc.(a) | 34,047 | |||||||||
33,716 | Bank of America Corp. | 415,044 | |||||||||
1,327 | BB&T Corp. | 40,832 | |||||||||
421 | Chubb Corp. (The) | 37,077 | |||||||||
6,730 | Citigroup, Inc. | 314,022 | |||||||||
1,683 | Fifth Third Bancorp | 28,661 | |||||||||
725 | Goldman Sachs Group, Inc. (The) | 105,901 | |||||||||
1,755 | Hartford Financial Services Group, Inc. (The) | 49,298 | |||||||||
7,155 | JPMorgan Chase & Co. | 350,667 | |||||||||
2,006 | KeyCorp | 20,000 | |||||||||
694 | Lincoln National Corp. | 23,603 | |||||||||
602 | Loews Corp. | 26,891 | |||||||||
2,858 | Morgan Stanley | 63,305 | |||||||||
983 | Progressive Corp. (The) | 24,860 | |||||||||
1,123 | Prudential Financial, Inc. | 67,852 | |||||||||
3,432 | Regions Financial Corp. | 29,138 | |||||||||
1,306 | SunTrust Banks, Inc. | 38,200 |
Number of Shares | Value | ||||||||||
Common Stocks and Other Equity Interests (Continued) | |||||||||||
839 | Travelers Cos., Inc. (The) | $ | 71,659 | ||||||||
2,528 | U.S. Bancorp | 84,132 | |||||||||
1,626 | Weyerhaeuser Co. REIT | 49,609 | |||||||||
1,920,413 | |||||||||||
Health Care—6.4% | |||||||||||
3,124 | Boston Scientific Corp.(a) | 23,399 | |||||||||
1,249 | Cardinal Health, Inc. | 55,231 | |||||||||
874 | HCA Holdings, Inc. | 34,864 | |||||||||
10,344 | Pfizer, Inc. | 300,700 | |||||||||
996 | WellPoint, Inc. | 72,628 | |||||||||
486,822 | |||||||||||
Industrials—11.2% | |||||||||||
818 | Boeing Co. (The) | 74,773 | |||||||||
656 | General Dynamics Corp. | 48,518 | |||||||||
17,384 | General Electric Co. | 387,489 | |||||||||
596 | Lockheed Martin Corp. | 59,058 | |||||||||
428 | Norfolk Southern Corp. | 33,136 | |||||||||
640 | Northrop Grumman Corp. | 48,474 | |||||||||
439 | PACCAR, Inc. | 21,853 | |||||||||
642 | Raytheon Co. | 39,406 | |||||||||
1,087 | Tyco International Ltd. (Switzerland) | 34,914 | |||||||||
740 | United Parcel Service, Inc., Class B | 63,522 | |||||||||
822 | Waste Management, Inc. | 33,685 | |||||||||
844,828 | |||||||||||
Information Technology—3.0% | |||||||||||
1,629 | Applied Materials, Inc. | 23,637 | |||||||||
3,555 | Dell, Inc. | 47,637 | |||||||||
6,625 | Hewlett-Packard Co. | 136,475 | |||||||||
2,193 | Micron Technology, Inc.(a) | 20,658 | |||||||||
228,407 | |||||||||||
Materials—2.3% | |||||||||||
4,150 | Alcoa, Inc. | 35,275 | |||||||||
2,302 | Dow Chemical Co. (The) | 78,061 | |||||||||
687 | International Paper Co. | 32,275 | |||||||||
641 | Nucor Corp. | 27,960 | |||||||||
173,571 | |||||||||||
Telecommunication Services—11.0% | |||||||||||
12,049 | AT&T, Inc. | 451,356 | |||||||||
7,605 | Sprint Nextel Corp.(a) | 53,615 | |||||||||
6,055 | Verizon Communications, Inc. | 326,425 | |||||||||
831,396 | |||||||||||
Utilities—9.3% | |||||||||||
2,112 | AES Corp. (The) | 29,272 | |||||||||
707 | Ameren Corp. | 25,629 | |||||||||
933 | American Electric Power Co., Inc. | 47,984 | |||||||||
602 | Consolidated Edison, Inc. | 38,317 | |||||||||
844 | Dominion Resources, Inc. | 52,058 | |||||||||
338 | DTE Energy Co. | 24,633 |
See Notes to Financial Statements.
57
Schedule of Investments (Continued)
PowerShares Fundamental Pure Large Value Portfolio (PXLV)
April 30, 2013
Number of Shares | Value | ||||||||||
Common Stocks and Other Equity Interests (Continued) | |||||||||||
627 | Edison International | $ | 33,733 | ||||||||
526 | Entergy Corp. | 37,467 | |||||||||
2,091 | Exelon Corp. | 78,433 | |||||||||
1,040 | FirstEnergy Corp. | 48,464 | |||||||||
626 | NextEra Energy, Inc. | 51,351 | |||||||||
850 | NRG Energy, Inc. | 23,689 | |||||||||
920 | PG&E Corp. | 44,565 | |||||||||
1,142 | Public Service Enterprise Group, Inc. | 41,809 | |||||||||
308 | Sempra Energy | 25,518 | |||||||||
1,399 | Southern Co. (The) | 67,474 | |||||||||
929 | Xcel Energy, Inc. | 29,533 | |||||||||
699,929 | |||||||||||
Total Common Stocks and Other Equity Interests (Cost $6,829,709) | 7,546,812 | ||||||||||
Money Market Fund—0.7% | |||||||||||
52,286 | Goldman Sachs Financial Square Prime Obligations—Institutional Share Class (Cost $52,286) | 52,286 | |||||||||
Total Investments (Cost $6,881,995)—100.7% | 7,599,098 | ||||||||||
Liabilities in excess of other assets—(0.7)% | (50,188 | ) | |||||||||
Net Assets—100.0% | $ | 7,548,910 |
Investment Abbreviations:
REIT—Real Estate Investment Trust
Notes to Schedule of Investments:
(a) Non-income producing security.
See Notes to Financial Statements.
58
Schedule of Investments
PowerShares Fundamental Pure Mid Core Portfolio (PXMC)
April 30, 2013
Number of Shares | Value | ||||||||||
Common Stocks and Other Equity Interests—100.0% | |||||||||||
Consumer Discretionary—18.3% | |||||||||||
1,133 | Advance Auto Parts, Inc. | $ | 95,036 | ||||||||
385 | AutoZone, Inc.(a) | 157,500 | |||||||||
3,532 | Bed Bath & Beyond, Inc.(a) | 243,002 | |||||||||
1,357 | BorgWarner, Inc.(a) | 106,077 | |||||||||
9,604 | Cablevision Systems Corp., Class A | 142,715 | |||||||||
3,722 | CarMax, Inc.(a) | 171,361 | |||||||||
6,355 | Dana Holding Corp. | 109,624 | |||||||||
3,483 | Darden Restaurants, Inc. | 179,827 | �� | ||||||||
4,534 | DISH Network Corp., Class A | 177,687 | |||||||||
2,447 | Dollar Tree, Inc.(a) | 116,379 | |||||||||
1,242 | Expedia, Inc. | 69,353 | |||||||||
1,737 | Family Dollar Stores, Inc. | 106,600 | |||||||||
2,845 | Garmin Ltd. (Switzerland) | 99,803 | |||||||||
13,895 | Goodyear Tire & Rubber Co. (The)(a) | 173,618 | |||||||||
8,747 | Interpublic Group of Cos., Inc. (The) | 121,058 | |||||||||
6,379 | Kohl's Corp. | 300,196 | |||||||||
5,042 | Mattel, Inc. | 230,218 | |||||||||
2,797 | Nordstrom, Inc. | 158,282 | |||||||||
1,495 | PetSmart, Inc. | 102,019 | |||||||||
1,563 | Rent-A-Center, Inc. | 54,596 | |||||||||
1,473 | Tiffany & Co. | 108,531 | |||||||||
1,224 | VF Corp. | 218,141 | |||||||||
3,872 | Virgin Media, Inc. | 188,876 | |||||||||
1,493 | Visteon Corp.(a) | 87,773 | |||||||||
1,824 | Wyndham Worldwide Corp. | 109,586 | |||||||||
3,627,858 | |||||||||||
Consumer Staples—4.7% | |||||||||||
1,309 | Brown-Forman Corp., Class B | 92,284 | |||||||||
2,025 | Clorox Co. (The) | 174,656 | |||||||||
3,502 | Dr Pepper Snapple Group, Inc. | 171,003 | |||||||||
1,252 | Energizer Holdings, Inc. | 120,931 | |||||||||
2,052 | Hershey Co. (The) | 182,956 | |||||||||
1,955 | Hormel Foods Corp. | 80,683 | |||||||||
1,499 | McCormick & Co., Inc. | 107,838 | |||||||||
930,351 | |||||||||||
Energy—7.8% | |||||||||||
21,300 | Alpha Natural Resources, Inc.(a) | 158,046 | |||||||||
1,313 | Cimarex Energy Co. | 96,085 | |||||||||
4,793 | CONSOL Energy, Inc. | 161,237 | |||||||||
2,988 | Diamond Offshore Drilling, Inc. | 206,471 | |||||||||
5,661 | Kinder Morgan, Inc. | 221,345 | |||||||||
2,141 | Linn Co LLC | 91,485 | |||||||||
6,406 | Noble Corp. (Switzerland) | 240,225 | |||||||||
1,087 | Oil States International, Inc.(a) | 97,134 | |||||||||
9,362 | Peabody Energy Corp. | 187,802 | |||||||||
2,690 | Superior Energy Services, Inc.(a) | 74,217 | |||||||||
1,534,047 |
Number of Shares | Value | ||||||||||
Common Stocks and Other Equity Interests (Continued) | |||||||||||
Financials—19.5% | |||||||||||
4,077 | Ameriprise Financial, Inc. | $ | 303,859 | ||||||||
2,179 | Arthur J. Gallagher & Co. | 92,499 | |||||||||
2,296 | Boston Properties, Inc. REIT | 251,251 | |||||||||
1,139 | Camden Property Trust REIT | 82,395 | |||||||||
3,875 | CBRE Group, Inc., Class A(a) | 93,852 | |||||||||
4,135 | CIT Group, Inc.(a) | 175,779 | |||||||||
4,633 | Equity Residential REIT | 268,992 | |||||||||
736 | Federal Realty Investment Trust REIT | 86,119 | |||||||||
12,310 | First Niagara Financial Group, Inc. | 117,068 | |||||||||
1,770 | First Republic Bank | 67,225 | |||||||||
1,585 | Franklin Resources, Inc. | 245,136 | |||||||||
6,496 | General Growth Properties, Inc. REIT | 147,589 | |||||||||
7,894 | Invesco Ltd.(b) | 250,556 | |||||||||
643 | Jones Lang LaSalle, Inc. | 63,670 | |||||||||
6,721 | Kimco Realty Corp. REIT | 159,825 | |||||||||
1,756 | Macerich Co. (The) REIT | 123,008 | |||||||||
1,773 | Moody's Corp. | 107,887 | |||||||||
2,511 | MSCI, Inc.(a) | 85,625 | |||||||||
3,289 | NASDAQ OMX Group, Inc. (The) | 96,960 | |||||||||
6,721 | NYSE Euronext | 260,842 | |||||||||
11,080 | People's United Financial, Inc. | 145,813 | |||||||||
1,755 | Raymond James Financial, Inc. | 72,692 | |||||||||
1,656 | Rayonier, Inc. REIT | 98,399 | |||||||||
1,424 | Regency Centers Corp. REIT | 80,114 | |||||||||
1,692 | Reinsurance Group of America, Inc. | 105,835 | |||||||||
3,230 | Vornado Realty Trust REIT | 282,819 | |||||||||
3,865,809 | |||||||||||
Health Care—11.0% | |||||||||||
3,921 | Agilent Technologies, Inc. | 162,486 | |||||||||
3,334 | Becton, Dickinson and Co. | 314,396 | |||||||||
900 | C.R. Bard, Inc. | 89,424 | |||||||||
1,363 | DaVita HealthCare Partners, Inc.(a) | 161,720 | |||||||||
1,577 | DENTSPLY International, Inc. | 66,786 | |||||||||
4,652 | Forest Laboratories, Inc.(a) | 174,031 | |||||||||
1,462 | Henry Schein, Inc.(a) | 132,165 | |||||||||
4,316 | Hospira, Inc.(a) | 142,946 | |||||||||
1,693 | Laboratory Corp. of America Holdings(a) | 158,058 | |||||||||
1,712 | Owens & Minor, Inc. | 55,760 | |||||||||
3,578 | Tenet Healthcare Corp.(a) | 162,298 | |||||||||
1,601 | Universal Health Services, Inc., Class B | 106,611 | |||||||||
12,810 | Warner Chilcott PLC, Class A (Ireland) | 184,208 | |||||||||
1,560 | WellCare Health Plans, Inc.(a) | 90,964 | |||||||||
2,214 | Zimmer Holdings, Inc. | 169,260 | |||||||||
2,171,113 | |||||||||||
Industrials—16.1% | |||||||||||
3,685 | ADT Corp. (The)(a) | 160,813 | |||||||||
2,350 | AECOM Technology Corp.(a) | 68,315 | |||||||||
2,822 | AGCO Corp. | 150,271 | |||||||||
900 | Alliant Techsystems, Inc. | 66,924 |
See Notes to Financial Statements.
59
Schedule of Investments (Continued)
PowerShares Fundamental Pure Mid Core Portfolio (PXMC)
April 30, 2013
Number of Shares | Value | ||||||||||
Common Stocks and Other Equity Interests (Continued) | |||||||||||
2,742 | C.H. Robinson Worldwide, Inc. | $ | 162,847 | ||||||||
927 | Carlisle Cos., Inc. | 60,134 | |||||||||
3,036 | Dover Corp. | 209,423 | |||||||||
1,029 | EMCOR Group, Inc. | 38,485 | |||||||||
3,797 | Fluor Corp. | 216,353 | |||||||||
2,347 | Fortune Brands Home & Security, Inc.(a) | 85,407 | |||||||||
809 | Hubbell, Inc., Class B | 77,632 | |||||||||
5,261 | Ingersoll-Rand PLC (Ireland) | 283,042 | |||||||||
2,279 | Iron Mountain, Inc. | 86,283 | |||||||||
2,852 | Jacobs Engineering Group, Inc.(a) | 143,969 | |||||||||
4,447 | KBR, Inc. | 133,766 | |||||||||
2,834 | Nielsen Holdings NV | 98,113 | |||||||||
2,797 | Oshkosh Corp.(a) | 109,810 | |||||||||
2,677 | Parker Hannifin Corp. | 237,102 | |||||||||
1,723 | Rockwell Automation, Inc. | 146,076 | |||||||||
2,300 | Rockwell Collins, Inc. | 144,716 | |||||||||
930 | Snap-On, Inc. | 80,166 | |||||||||
4,645 | Spirit AeroSystems Holdings, Inc., Class A(a) | 92,854 | |||||||||
1,688 | Timken Co. (The) | 88,738 | |||||||||
1,942 | URS Corp. | 85,293 | |||||||||
628 | W.W. Grainger, Inc. | 154,783 | |||||||||
3,181,315 | |||||||||||
Information Technology—12.0% | |||||||||||
4,498 | Adobe Systems, Inc.(a) | 202,770 | |||||||||
412 | Alliance Data Systems Corp.(a) | 70,769 | |||||||||
3,882 | Analog Devices, Inc. | 170,769 | |||||||||
1,874 | Autodesk, Inc.(a) | 73,798 | |||||||||
1,884 | BMC Software, Inc.(a) | 85,684 | |||||||||
5,708 | CA, Inc. | 153,945 | |||||||||
4,091 | Electronic Arts, Inc.(a) | 72,043 | |||||||||
3,943 | Fidelity National Information Services, Inc. | 165,803 | |||||||||
1,920 | Fiserv, Inc.(a) | 174,931 | |||||||||
3,057 | Harris Corp. | 141,234 | |||||||||
8,898 | Juniper Networks, Inc.(a) | 147,262 | |||||||||
2,712 | Linear Technology Corp. | 98,988 | |||||||||
4,503 | Maxim Integrated Products, Inc. | 139,278 | |||||||||
9,804 | NVIDIA Corp. | 135,001 | |||||||||
5,852 | Paychex, Inc. | 213,071 | |||||||||
3,882 | SanDisk Corp.(a) | 203,572 | |||||||||
3,376 | Xilinx, Inc. | 127,984 | |||||||||
2,376,902 | |||||||||||
Materials—4.3% | |||||||||||
1,147 | Albemarle Corp. | 70,254 | |||||||||
2,805 | Ball Corp. | 123,757 | |||||||||
2,246 | Celanese Corp., Series A | 110,975 | |||||||||
1,053 | International Flavors & Fragrances, Inc. | 81,281 | |||||||||
1,773 | Reliance Steel & Aluminum Co. | 115,369 | |||||||||
856 | Sherwin-Williams Co. (The) | 156,742 | |||||||||
3,491 | Southern Copper Corp. | 116,355 | |||||||||
1,142 | Valspar Corp. (The) | 72,882 | |||||||||
847,615 |
Number of Shares | Value | ||||||||||
Common Stocks and Other Equity Interests (Continued) | |||||||||||
Telecommunication Services—1.5% | |||||||||||
37,482 | Frontier Communications Corp. | $ | 155,925 | ||||||||
11,299 | T-Mobile US, Inc.(a) | 133,780 | |||||||||
289,705 | |||||||||||
Utilities—4.8% | |||||||||||
3,186 | American Water Works Co., Inc. | 133,430 | |||||||||
10,235 | Calpine Corp.(a) | 222,406 | |||||||||
6,465 | CMS Energy Corp. | 193,562 | |||||||||
4,532 | Northeast Utilities | 205,436 | |||||||||
4,163 | Wisconsin Energy Corp. | 187,085 | |||||||||
941,919 | |||||||||||
Total Common Stocks and Other Equity Interests (Cost $18,106,294) | 19,766,634 | ||||||||||
Money Market Fund—0.4% | |||||||||||
83,934 | Goldman Sachs Financial Square Prime Obligations—Institutional Share Class (Cost $83,934) | 83,934 | |||||||||
Total Investments (Cost $18,190,228)—100.4% | 19,850,568 | ||||||||||
Liabilities in excess of other assets—(0.4)% | (82,247 | ) | |||||||||
Net Assets—100.0% | $ | 19,768,321 |
Investment Abbreviations:
REIT—Real Estate Investment Trust
Notes to Schedule of Investments:
(a) Non-income producing security.
(b) Affiliated company. The Fund's Adviser is a subsidiary of Invesco Ltd., and therefore Invesco Ltd. is considered to be affiliated with the Fund. See Note 4.
See Notes to Financial Statements.
60
Schedule of Investments
PowerShares Fundamental Pure Mid Growth Portfolio (PXMG)
April 30, 2013
Number of Shares | Value | ||||||||||
Common Stocks and Other Equity Interests—100.0% | |||||||||||
Consumer Discretionary—11.5% | |||||||||||
15,375 | Coach, Inc. | $ | 904,973 | ||||||||
11,057 | Discovery Communications, Inc., Class A(a) | 871,513 | |||||||||
24,391 | Dollar General Corp.(a) | 1,270,527 | |||||||||
13,416 | Jarden Corp.(a) | 603,854 | |||||||||
14,776 | Las Vegas Sands Corp. | 831,150 | |||||||||
12,612 | Lear Corp. | 728,721 | |||||||||
7,525 | O'Reilly Automotive, Inc.(a) | 807,583 | |||||||||
3,880 | PVH Corp. | 447,791 | |||||||||
3,240 | Ralph Lauren Corp. | 588,319 | |||||||||
14,562 | Ross Stores, Inc. | 962,111 | |||||||||
10,367 | Wynn Resorts Ltd. | 1,423,389 | |||||||||
9,439,931 | |||||||||||
Consumer Staples—4.9% | |||||||||||
7,930 | Church & Dwight Co., Inc. | 506,648 | |||||||||
9,895 | Estee Lauder Cos., Inc. (The), Class A | 686,218 | |||||||||
6,282 | Ingredion, Inc. | 452,367 | |||||||||
7,941 | J.M. Smucker Co. (The) | 819,749 | |||||||||
8,341 | Mead Johnson Nutrition Co. | 676,372 | |||||||||
10,315 | Whole Foods Market, Inc. | 911,021 | |||||||||
4,052,375 | |||||||||||
Energy—13.2% | |||||||||||
18,332 | Cameron International Corp.(a) | 1,128,335 | |||||||||
5,296 | Concho Resources, Inc.(a) | 456,144 | |||||||||
45,284 | Denbury Resources, Inc.(a) | 810,131 | |||||||||
11,409 | EQT Corp. | 857,044 | |||||||||
12,236 | FMC Technologies, Inc.(a) | 664,415 | |||||||||
8,911 | Helmerich & Payne, Inc. | 522,363 | |||||||||
18,318 | HollyFrontier Corp. | 905,825 | |||||||||
12,012 | Noble Energy, Inc. | 1,360,839 | |||||||||
6,223 | Pioneer Natural Resources Co. | 760,637 | |||||||||
15,375 | Plains Exploration & Production Co.(a) | 694,950 | |||||||||
22,221 | QEP Resources, Inc. | 637,965 | |||||||||
5,194 | Range Resources Corp. | 381,863 | |||||||||
24,885 | Southwestern Energy Co.(a) | 931,197 | |||||||||
11,973 | Whiting Petroleum Corp.(a) | 532,799 | |||||||||
4,751 | World Fuel Services Corp. | 192,653 | |||||||||
10,837,160 | |||||||||||
Financials—21.1% | |||||||||||
2,664 | Affiliated Managers Group, Inc.(a) | 414,732 | |||||||||
6,756 | Alexandria Real Estate Equities, Inc. REIT | 491,634 | |||||||||
25,243 | American Capital Agency Corp. REIT | 840,844 | |||||||||
7,910 | AvalonBay Communities, Inc. REIT | 1,052,346 | |||||||||
14,328 | BioMed Realty Trust, Inc. REIT | 322,523 | |||||||||
180,781 | Chimera Investment Corp. REIT | 596,577 | |||||||||
7,876 | Digital Realty Trust, Inc. REIT | 555,416 | |||||||||
2,626 | Essex Property Trust, Inc. REIT | 412,413 | |||||||||
32,647 | HCP, Inc. REIT | 1,740,085 | |||||||||
15,788 | Health Care REIT, Inc. | 1,183,626 |
Number of Shares | Value | ||||||||||
Common Stocks and Other Equity Interests (Continued) | |||||||||||
3,394 | IntercontinentalExchange, Inc.(a) | $ | 552,985 | ||||||||
19,842 | Leucadia National Corp. | 612,919 | |||||||||
47,366 | MFA Financial, Inc. REIT | 439,083 | |||||||||
41,186 | Prologis, Inc. REIT | 1,727,753 | |||||||||
8,347 | Public Storage REIT | 1,377,255 | |||||||||
8,941 | Realty Income Corp. REIT | 455,723 | |||||||||
16,779 | Senior Housing Properties Trust REIT | 477,027 | |||||||||
8,530 | SL Green Realty Corp. REIT | 773,671 | |||||||||
15,209 | T. Rowe Price Group, Inc. | 1,102,653 | |||||||||
24,914 | UDR, Inc. REIT | 612,386 | |||||||||
19,651 | Ventas, Inc. REIT | 1,564,809 | |||||||||
17,306,460 | |||||||||||
Health Care—9.4% | |||||||||||
8,973 | Actavis, Inc.(a) | 948,715 | |||||||||
4,807 | Cerner Corp.(a) | 465,174 | |||||||||
16,449 | Endo Health Solutions, Inc.(a) | 602,691 | |||||||||
25,742 | Hologic, Inc.(a) | 524,365 | |||||||||
977 | Intuitive Surgical, Inc.(a) | 480,967 | |||||||||
14,956 | Life Technologies Corp.(a) | 1,102,108 | |||||||||
25,646 | Mylan, Inc.(a) | 746,555 | |||||||||
24,674 | St. Jude Medical, Inc. | 1,017,062 | |||||||||
21,464 | Stryker Corp. | 1,407,609 | |||||||||
6,185 | Varian Medical Systems, Inc.(a) | 402,891 | |||||||||
7,698,137 | |||||||||||
Industrials—15.8% | |||||||||||
10,936 | AMETEK, Inc. | 445,205 | |||||||||
8,070 | BE Aerospace, Inc.(a) | 506,312 | |||||||||
14,957 | Cummins, Inc. | 1,591,275 | |||||||||
7,475 | Equifax, Inc. | 457,470 | |||||||||
17,923 | Expeditors International of Washington, Inc. | 643,973 | |||||||||
10,999 | Fastenal Co. | 539,501 | |||||||||
4,000 | Flowserve Corp. | 632,480 | |||||||||
10,467 | Joy Global, Inc. | 591,595 | |||||||||
5,730 | Kansas City Southern | 624,971 | |||||||||
7,204 | Pall Corp. | 480,579 | |||||||||
7,535 | Precision Castparts Corp. | 1,441,370 | |||||||||
23,364 | Quanta Services, Inc.(a) | 642,043 | |||||||||
26,865 | Republic Services, Inc. | 915,559 | |||||||||
4,554 | Roper Industries, Inc. | 544,886 | |||||||||
17,606 | Stanley Black & Decker, Inc. | 1,317,105 | |||||||||
3,329 | TransDigm Group, Inc. | 488,697 | |||||||||
21,708 | United Continental Holdings, Inc.(a) | 701,168 | |||||||||
13,812 | Xylem, Inc. | 383,283 | |||||||||
12,947,472 | |||||||||||
Information Technology—14.4% | |||||||||||
36,887 | Activision Blizzard, Inc. | 551,461 | |||||||||
16,491 | Altera Corp. | 527,877 | |||||||||
7,349 | Amphenol Corp., Class A | 554,997 | |||||||||
29,085 | Broadcom Corp., Class A | 1,047,060 |
See Notes to Financial Statements.
61
Schedule of Investments (Continued)
PowerShares Fundamental Pure Mid Growth Portfolio (PXMG)
April 30, 2013
Number of Shares | Value | ||||||||||
Common Stocks and Other Equity Interests (Continued) | |||||||||||
74,238 | Brocade Communications Systems, Inc.(a) | $ | 432,065 | ||||||||
7,008 | Citrix Systems, Inc.(a) | 435,687 | |||||||||
11,364 | Cognizant Technology Solutions Corp., Class A(a) | 736,387 | |||||||||
18,397 | First Solar, Inc.(a) | 856,564 | |||||||||
11,710 | Intuit, Inc. | 698,384 | |||||||||
13,102 | KLA-Tencor Corp. | 710,784 | |||||||||
13,729 | Lam Research Corp.(a) | 634,554 | |||||||||
27,409 | NetApp, Inc.(a) | 956,300 | |||||||||
53,583 | ON Semiconductor Corp.(a) | 421,162 | |||||||||
11,338 | Synopsys, Inc.(a) | 403,293 | |||||||||
7,395 | Teradata Corp.(a) | 377,663 | |||||||||
28,710 | Western Digital Corp. | 1,587,089 | |||||||||
62,664 | Western Union Co. | 928,054 | |||||||||
11,859,381 | |||||||||||
Materials—8.9% | |||||||||||
5,835 | Airgas, Inc. | 563,953 | |||||||||
4,767 | CF Industries Holdings, Inc. | 889,093 | |||||||||
43,409 | Cliffs Natural Resources, Inc. | 926,348 | |||||||||
15,002 | Ecolab, Inc. | 1,269,469 | |||||||||
7,862 | FMC Corp. | 477,223 | |||||||||
27,654 | Mosaic Co. (The) | 1,703,210 | |||||||||
6,405 | Rock-Tenn Co., Class A | 641,397 | |||||||||
7,117 | Sigma-Aldrich Corp. | 560,037 | |||||||||
12,959 | Walter Energy, Inc. | 232,225 | |||||||||
7,262,955 | |||||||||||
Telecommunication Services—0.8% | |||||||||||
8,892 | Crown Castle International Corp.(a) | 684,684 | |||||||||
Total Common Stocks and Other Equity Interests (Cost $73,287,841) | 82,088,555 | ||||||||||
Money Market Fund—0.2% | |||||||||||
138,689 | Goldman Sachs Financial Square Prime Obligations—Institutional Share Class (Cost $138,689) | 138,689 | |||||||||
Total Investments (Cost $73,426,530)—100.2% | 82,227,244 | ||||||||||
Liabilities in excess of other assets—(0.2)% | (126,141 | ) | |||||||||
Net Assets—100.0% | $ | 82,101,103 |
Investment Abbreviations:
REIT—Real Estate Investment Trust
Notes to Schedule of Investments:
(a) Non-income producing security.
See Notes to Financial Statements.
62
Schedule of Investments
PowerShares Fundamental Pure Mid Value Portfolio (PXMV)
April 30, 2013
Number of Shares | Value | ||||||||||
Common Stocks and Other Equity Interests—99.9% | |||||||||||
Consumer Discretionary—20.1% | |||||||||||
1,691 | Abercrombie & Fitch Co., Class A | $ | 83,806 | ||||||||
3,479 | American Eagle Outfitters, Inc. | 67,667 | |||||||||
5,468 | Apollo Group, Inc., Class A(a) | 100,447 | |||||||||
1,993 | Autoliv, Inc. | 152,305 | |||||||||
2,628 | AutoNation, Inc.(a) | 119,600 | |||||||||
1,982 | Big Lots, Inc.(a) | 72,184 | |||||||||
6,141 | Carnival Corp.(Panama) | 211,926 | |||||||||
755 | Charter Communications, Inc., Class A(a) | 76,059 | |||||||||
3,777 | D.R. Horton, Inc. | 98,504 | |||||||||
1,318 | Domino's Pizza, Inc. | 72,754 | |||||||||
2,655 | Foot Locker, Inc. | 92,580 | |||||||||
6,221 | GameStop Corp., Class A | 217,113 | |||||||||
7,584 | Gannett Co., Inc. | 152,893 | |||||||||
4,623 | Gap, Inc. (The) | 175,628 | |||||||||
2,743 | Genuine Parts Co. | 209,373 | |||||||||
4,574 | H&R Block, Inc. | 126,883 | |||||||||
1,819 | Hanesbrands, Inc.(a) | 91,241 | |||||||||
2,759 | Harley-Davidson, Inc. | 150,779 | |||||||||
2,234 | Hasbro, Inc. | 105,825 | |||||||||
5,593 | International Game Technology | 94,801 | |||||||||
11,201 | J.C. Penney Co., Inc.(a) | 183,920 | |||||||||
5,493 | L Brands, Inc. | 276,902 | |||||||||
3,021 | Leggett & Platt, Inc. | 97,397 | |||||||||
1,587 | Lennar Corp., Class A | 65,416 | |||||||||
10,589 | Liberty Interactive Corp., Class A(a) | 225,440 | |||||||||
2,698 | Marriott International, Inc., Class A | 116,176 | |||||||||
11,591 | MGM Resorts International(a) | 163,665 | |||||||||
944 | Mohawk Industries, Inc.(a) | 104,671 | |||||||||
5,309 | Newell Rubbermaid, Inc. | 139,839 | |||||||||
60 | NVR, Inc.(a) | 61,800 | |||||||||
27,634 | Office Depot, Inc.(a) | 106,667 | |||||||||
5,681 | OfficeMax, Inc. | 65,388 | |||||||||
4,505 | Omnicom Group, Inc. | 269,264 | |||||||||
1,175 | Penn National Gaming, Inc.(a) | 68,796 | |||||||||
2,725 | PulteGroup, Inc.(a) | 57,198 | |||||||||
3,501 | Royal Caribbean Cruises Ltd. | 127,892 | |||||||||
4,092 | Sears Holdings Corp.(a) | 210,083 | |||||||||
3,686 | Service Corp. International | 62,220 | |||||||||
2,150 | Starwood Hotels & Resorts Worldwide, Inc. | 138,718 | |||||||||
1,999 | Tenneco, Inc.(a) | 77,301 | |||||||||
1,710 | Toll Brothers, Inc.(a) | 58,670 | |||||||||
3,843 | TRW Automotive Holdings Corp.(a) | 230,849 | |||||||||
137 | Washington Post Co. (The), Class B | 60,738 | |||||||||
2,178 | Whirlpool Corp. | 248,902 | |||||||||
5,690,280 | |||||||||||
Consumer Staples—7.3% | |||||||||||
11,734 | Avon Products, Inc. | 271,760 | |||||||||
2,265 | Beam, Inc. | 146,568 | |||||||||
3,234 | Campbell Soup Co. | 150,090 |
Number of Shares | Value | ||||||||||
Common Stocks and Other Equity Interests (Continued) | |||||||||||
5,388 | Coca-Cola Enterprises, Inc. | $ | 197,363 | ||||||||
1,921 | Constellation Brands, Inc., Class A(a) | 94,801 | |||||||||
12,200 | Dean Foods Co.(a) | 233,508 | |||||||||
6,184 | Hillshire Brands Co. | 222,067 | |||||||||
3,099 | Molson Coors Brewing Co., Class B | 159,908 | |||||||||
71,358 | Rite Aid Corp.(a) | 189,099 | |||||||||
6,414 | Smithfield Foods, Inc.(a) | 164,198 | |||||||||
9,958 | Tyson Foods, Inc., Class A | 245,266 | |||||||||
2,074,628 | |||||||||||
Energy—4.2% | |||||||||||
18,498 | Arch Coal, Inc. | 89,715 | |||||||||
1,563 | Energen Corp. | 74,117 | |||||||||
2,147 | Exterran Holdings, Inc.(a) | 56,724 | |||||||||
2,553 | Helix Energy Solutions Group, Inc.(a) | 58,821 | |||||||||
7,861 | McDermott International, Inc.(a) | 83,956 | |||||||||
5,406 | Newfield Exploration Co.(a) | 117,797 | |||||||||
3,247 | Patterson-UTI Energy, Inc. | 68,479 | |||||||||
2,438 | Rowan Cos. PLC, Class A (United Kingdom)(a) | 79,308 | |||||||||
834 | SEACOR Holdings, Inc. | 60,140 | |||||||||
3,973 | Tesoro Corp. | 212,158 | |||||||||
1,333 | Tidewater, Inc. | 69,916 | |||||||||
1,162 | Unit Corp.(a) | 48,839 | |||||||||
11,815 | WPX Energy, Inc.(a) | 184,668 | |||||||||
1,204,638 | |||||||||||
Financials—21.8% | |||||||||||
4,379 | American Capital Ltd.(a) | 66,254 | |||||||||
2,271 | American Financial Group, Inc. | 109,621 | |||||||||
86 | American National Insurance Co. | 8,087 | |||||||||
2,911 | Apartment Investment & Management Co., Class A REIT | 90,561 | |||||||||
5,100 | Associated Banc-Corp. | 72,777 | |||||||||
3,703 | Assurant, Inc. | 176,041 | |||||||||
4,256 | Brandywine Realty Trust REIT | 63,542 | |||||||||
7,773 | CapitalSource, Inc. | 69,568 | |||||||||
2,613 | CBL & Associates Properties, Inc. REIT | 63,078 | |||||||||
3,499 | Cincinnati Financial Corp. | 171,136 | |||||||||
7,536 | CNO Financial Group, Inc. | 85,308 | |||||||||
5,148 | Comerica, Inc. | 186,615 | |||||||||
1,556 | Commerce Bancshares, Inc. | 62,411 | |||||||||
2,492 | CommonWealth REIT | 55,646 | |||||||||
1,076 | Cullen/Frost Bankers, Inc. | 65,001 | |||||||||
3,659 | DDR Corp. REIT | 67,106 | |||||||||
5,895 | Duke Realty Corp. REIT | 103,988 | |||||||||
9,296 | E*TRADE Financial Corp.(a) | 95,656 | |||||||||
2,814 | Federated Investors, Inc., Class B | 64,609 | |||||||||
5,057 | Fidelity National Financial, Inc., Class A | 135,781 | |||||||||
2,449 | First American Financial Corp. | 65,560 | |||||||||
6,464 | First Horizon National Corp. | 67,226 | |||||||||
4,785 | Fulton Financial Corp. | 52,922 |
See Notes to Financial Statements.
63
Schedule of Investments (Continued)
PowerShares Fundamental Pure Mid Value Portfolio (PXMV)
April 30, 2013
Number of Shares | Value | ||||||||||
Common Stocks and Other Equity Interests (Continued) | |||||||||||
1,375 | Hanover Insurance Group, Inc. (The) | $ | 69,341 | ||||||||
2,094 | HCC Insurance Holdings, Inc. | 89,204 | |||||||||
3,837 | Hospitality Properties Trust REIT | 112,846 | |||||||||
10,725 | Host Hotels & Resorts, Inc. REIT | 195,946 | |||||||||
16,632 | Hudson City Bancorp, Inc. | 138,212 | |||||||||
21,158 | Huntington Bancshares, Inc. | 151,703 | |||||||||
611 | Kemper Corp. | 19,467 | |||||||||
3,992 | Legg Mason, Inc. | 127,185 | |||||||||
2,460 | Liberty Property Trust REIT | 105,755 | |||||||||
2,277 | M&T Bank Corp. | 228,155 | |||||||||
2,503 | Mack-Cali Realty Corp. REIT | 69,508 | |||||||||
153 | Markel Corp.(a) | 82,046 | |||||||||
4,260 | McGraw Hill Financial, Inc. | 230,509 | |||||||||
13,684 | New York Community Bancorp, Inc. | 185,418 | |||||||||
4,098 | Northern Trust Corp. | 220,964 | |||||||||
8,620 | Old Republic International Corp. | 116,370 | |||||||||
4,404 | PHH Corp.(a) | 92,836 | |||||||||
4,465 | Piedmont Office Realty Trust, Inc., Class A REIT | 91,622 | |||||||||
2,367 | Plum Creek Timber Co., Inc. REIT | 121,995 | |||||||||
7,848 | Principal Financial Group, Inc. | 283,313 | |||||||||
2,596 | Protective Life Corp. | 98,804 | |||||||||
8,494 | SLM Corp. | 175,401 | |||||||||
1,117 | StanCorp Financial Group, Inc. | 48,232 | |||||||||
26,499 | Synovus Financial Corp. | 71,282 | |||||||||
4,355 | TCF Financial Corp. | 63,365 | |||||||||
2,081 | Torchmark Corp. | 129,168 | |||||||||
8,781 | Unum Group | 244,902 | |||||||||
5,449 | Valley National Bancorp | 48,987 | |||||||||
2,321 | W.R. Berkley Corp. | 100,778 | |||||||||
1,998 | Weingarten Realty Investors REIT | 68,072 | |||||||||
35 | White Mountains Insurance Group Ltd. | 20,241 | |||||||||
7,615 | XL Group PLC (Ireland) | 237,131 | |||||||||
5,093 | Zions Bancorp. | 125,390 | |||||||||
6,162,642 | |||||||||||
Health Care—4.6% | |||||||||||
4,137 | CareFusion Corp.(a) | 138,341 | |||||||||
4,399 | Community Health Systems, Inc. | 200,462 | |||||||||
4,417 | Coventry Health Care, Inc. | 218,862 | |||||||||
17,030 | Health Management Associates, Inc., Class A(a) | 195,675 | |||||||||
4,043 | Health Net, Inc.(a) | 118,864 | |||||||||
1,612 | LifePoint Hospitals, Inc.(a) | 77,376 | |||||||||
2,801 | Omnicare, Inc. | 122,600 | |||||||||
2,860 | Quest Diagnostics, Inc. | 161,104 | |||||||||
751 | Teleflex, Inc. | 58,676 | |||||||||
1,291,960 | |||||||||||
Industrials—11.6% | |||||||||||
1,303 | Alaska Air Group, Inc.(a) | 80,317 | |||||||||
2,819 | Avery Dennison Corp. | 116,848 |
Number of Shares | Value | ||||||||||
Common Stocks and Other Equity Interests (Continued) | |||||||||||
5,669 | Avis Budget Group, Inc.(a) | $ | 163,494 | ||||||||
1,744 | Cintas Corp. | 78,253 | |||||||||
1,628 | Con-way, Inc. | 55,026 | |||||||||
5,796 | Delta Air Lines, Inc.(a) | 99,343 | |||||||||
4,348 | Exelis, Inc. | 48,567 | |||||||||
1,057 | GATX Corp. | 53,854 | |||||||||
2,078 | General Cable Corp.(a) | 71,649 | |||||||||
2,614 | Harsco Corp. | 57,064 | |||||||||
8,794 | Hertz Global Holdings, Inc.(a) | 211,760 | |||||||||
1,496 | Huntington Ingalls Industries, Inc.(a) | 79,138 | |||||||||
4,084 | ITT Corp. | 112,718 | |||||||||
10,165 | JetBlue Airways Corp.(a) | 70,037 | |||||||||
3,220 | L-3 Communications Holdings, Inc. | 261,625 | |||||||||
3,365 | Manpowergroup, Inc. | 178,883 | |||||||||
7,124 | Masco Corp. | 138,491 | |||||||||
3,407 | Navistar International Corp.(a) | 112,840 | |||||||||
2,928 | Owens Corning, Inc.(a) | 123,152 | |||||||||
11,930 | Pitney Bowes, Inc. | 163,083 | |||||||||
13,312 | R.R. Donnelley & Sons Co. | 163,871 | |||||||||
1,706 | Robert Half International, Inc. | 55,991 | |||||||||
1,907 | Ryder System, Inc. | 110,740 | |||||||||
1,099 | SPX Corp. | 81,886 | |||||||||
2,840 | Terex Corp.(a) | 81,224 | |||||||||
6,367 | Textron, Inc. | 163,950 | |||||||||
1,518 | Trinity Industries, Inc. | 64,075 | |||||||||
1,313 | United Rentals, Inc.(a) | 69,077 | |||||||||
8,013 | US Airways Group, Inc.(a) | 135,420 | |||||||||
978 | WESCO International, Inc.(a) | 70,113 | |||||||||
3,272,489 | |||||||||||
Information Technology—10.4% | |||||||||||
33,591 | Advanced Micro Devices, Inc.(a) | 94,727 | |||||||||
2,704 | Amdocs Ltd. (Guernsey) | 96,533 | |||||||||
806 | Anixter International, Inc. | 57,822 | |||||||||
3,080 | AOL, Inc.(a) | 119,011 | |||||||||
3,468 | Arrow Electronics, Inc.(a) | 136,050 | |||||||||
5,687 | Avnet, Inc.(a) | 186,249 | |||||||||
4,530 | Computer Sciences Corp. | 212,230 | |||||||||
4,069 | CoreLogic, Inc.(a) | 111,002 | |||||||||
1,951 | Diebold, Inc. | 57,145 | |||||||||
738 | Insight Enterprises, Inc.(a) | 13,373 | |||||||||
6,853 | Jabil Circuit, Inc. | 121,983 | |||||||||
2,741 | Lexmark International, Inc., Class A | 83,080 | |||||||||
3,091 | Microchip Technology, Inc. | 112,574 | |||||||||
2,501 | Molex, Inc. | 68,953 | |||||||||
3,602 | Motorola Solutions, Inc. | 206,034 | |||||||||
2,538 | NCR Corp.(a) | 69,211 | |||||||||
12,906 | SAIC, Inc. | 192,816 | |||||||||
2,812 | Sanmina Corp.(a) | 35,487 | |||||||||
5,513 | Seagate Technology PLC (Ireland) | 202,327 | |||||||||
8,464 | Symantec Corp.(a) | 205,675 |
See Notes to Financial Statements.
64
Schedule of Investments (Continued)
PowerShares Fundamental Pure Mid Value Portfolio (PXMV)
April 30, 2013
Number of Shares | Value | ||||||||||
Common Stocks and Other Equity Interests (Continued) | |||||||||||
769 | SYNNEX Corp.(a) | $ | 26,607 | ||||||||
1,550 | Tech Data Corp.(a) | 72,432 | |||||||||
3,392 | Total System Services, Inc. | 80,119 | |||||||||
2,223 | Unisys Corp.(a) | 42,526 | |||||||||
4,643 | Vishay Intertechnology, Inc.(a) | 65,188 | |||||||||
11,657 | Yahoo!, Inc.(a) | 288,278 | |||||||||
2,957,432 | |||||||||||
Materials—7.2% | |||||||||||
2,766 | Allegheny Technologies, Inc. | 74,627 | |||||||||
1,525 | Ashland, Inc. | 129,945 | |||||||||
2,327 | Bemis Co., Inc. | 91,567 | |||||||||
1,541 | Cabot Corp. | 57,880 | |||||||||
5,466 | Commercial Metals Co. | 79,913 | |||||||||
3,025 | Crown Holdings, Inc.(a) | 129,107 | |||||||||
749 | Cytec Industries, Inc. | 54,572 | |||||||||
1,852 | Eastman Chemical Co. | 123,436 | |||||||||
5,787 | Huntsman Corp. | 109,143 | |||||||||
598 | Martin Marietta Materials, Inc. | 60,392 | |||||||||
4,062 | MeadWestvaco Corp. | 140,058 | |||||||||
5,346 | Owens-Illinois, Inc.(a) | 140,493 | |||||||||
1,479 | Packaging Corp. of America | 70,341 | |||||||||
1,191 | Rockwood Holdings, Inc. | 77,284 | |||||||||
2,579 | RPM International, Inc. | 83,560 | |||||||||
1,227 | Scotts Miracle-Gro Co. (The), Class A | 55,644 | |||||||||
4,815 | Sealed Air Corp. | 106,508 | |||||||||
2,097 | Sonoco Products Co. | 73,479 | |||||||||
6,846 | Steel Dynamics, Inc. | 102,964 | |||||||||
9,928 | United States Steel Corp. | 176,718 | |||||||||
2,291 | Vulcan Materials Co. | 114,275 | |||||||||
2,051,906 | |||||||||||
Telecommunication Services—2.0% | |||||||||||
30,223 | NII Holdings, Inc.(a) | 262,940 | |||||||||
3,481 | Telephone & Data Systems, Inc. | 78,114 | |||||||||
27,353 | Windstream Corp. | 233,047 | |||||||||
574,101 | |||||||||||
Utilities—10.7% | |||||||||||
2,277 | AGL Resources, Inc. | 99,846 | |||||||||
2,268 | Alliant Energy Corp. | 121,361 | |||||||||
2,080 | Atmos Energy Corp. | 92,290 | |||||||||
11,794 | CenterPoint Energy, Inc. | 291,076 | |||||||||
4,050 | Great Plains Energy, Inc. | 97,726 | |||||||||
1,639 | Hawaiian Electric Industries, Inc. | 46,384 | |||||||||
1,753 | Integrys Energy Group, Inc. | 107,915 | |||||||||
3,281 | MDU Resources Group, Inc. | 81,861 | |||||||||
1,434 | National Fuel Gas Co. | 89,940 | |||||||||
7,886 | NiSource, Inc. | 242,337 | |||||||||
5,742 | NV Energy, Inc. | 124,199 | |||||||||
1,974 | OGE Energy Corp. | 142,977 | |||||||||
4,561 | ONEOK, Inc. | 234,253 |
Number of Shares | Value | ||||||||||
Common Stocks and Other Equity Interests (Continued) | |||||||||||
9,765 | Pepco Holdings, Inc. | $ | 220,689 | ||||||||
2,826 | Pinnacle West Capital Corp. | 172,103 | |||||||||
2,374 | PNM Resources, Inc. | 57,000 | |||||||||
2,154 | Portland General Electric Co. | 69,467 | |||||||||
3,512 | Questar Corp. | 89,170 | |||||||||
2,800 | SCANA Corp. | 151,760 | |||||||||
6,638 | TECO Energy, Inc. | 126,985 | |||||||||
3,094 | UGI Corp. | 126,792 | |||||||||
1,712 | Vectren Corp. | 64,303 | |||||||||
2,968 | Westar Energy, Inc. | 103,761 | |||||||||
1,469 | WGL Holdings, Inc. | 67,897 | |||||||||
3,022,092 | |||||||||||
Total Investments (Cost $24,670,485)—99.9% | 28,302,168 | ||||||||||
Other assets less liabilities—0.1% | 18,522 | ||||||||||
Net Assets—100.0% | $ | 28,320,690 |
Investment Abbreviations:
REIT—Real Estate Investment Trust
Notes to Schedule of Investments:
(a) Non-income producing security.
See Notes to Financial Statements.
65
Schedule of Investments
PowerShares Fundamental Pure Small Core Portfolio (PXSC)
April 30, 2013
Number of Shares | Value | ||||||||||
Common Stocks and Other Equity Interests—99.9% | |||||||||||
Consumer Discretionary—16.2% | |||||||||||
2,226 | American Axle & Manufacturing Holdings, Inc.(a) | $ | 29,762 | ||||||||
398 | Arbitron, Inc. | 18,583 | |||||||||
322 | Ascent Capital Group, Inc., Class A(a) | 21,410 | |||||||||
776 | Bally Technologies, Inc.(a) | 41,345 | |||||||||
221 | Blue Nile, Inc.(a) | 7,211 | |||||||||
588 | Bravo Brio Restaurant Group, Inc.(a) | 9,996 | |||||||||
1,181 | Buckle, Inc. (The) | 57,338 | |||||||||
2,393 | Burger King Worldwide, Inc. | 43,170 | |||||||||
1,118 | Cabela's, Inc.(a) | 71,776 | |||||||||
473 | Capella Education Co.(a) | 16,754 | |||||||||
318 | Carriage Services, Inc. | 5,562 | |||||||||
1,110 | Carter's, Inc.(a) | 72,583 | |||||||||
152 | Cavco Industries, Inc.(a) | 6,934 | |||||||||
3,580 | Chico's FAS, Inc. | 65,407 | |||||||||
446 | Choice Hotels International, Inc. | 17,421 | |||||||||
313 | Churchill Downs, Inc. | 23,932 | |||||||||
3,592 | Cinemark Holdings, Inc. | 110,957 | |||||||||
973 | Coinstar, Inc.(a) | 51,384 | |||||||||
698 | Core-Mark Holding Co., Inc. | 36,324 | |||||||||
464 | Destination Maternity Corp. | 11,020 | |||||||||
1,950 | DeVry, Inc. | 54,619 | |||||||||
2,493 | Digital Generation, Inc.(a) | 16,703 | |||||||||
466 | DineEquity, Inc. | 33,198 | |||||||||
2,898 | DreamWorks Animation SKG, Inc., Class A(a) | 55,873 | |||||||||
1,131 | Dunkin' Brands Group, Inc. | 43,894 | |||||||||
252 | Einstein Noah Restaurant Group, Inc. | 3,631 | |||||||||
908 | Genesco, Inc.(a) | 55,887 | |||||||||
3,751 | Gentex Corp. | 84,397 | |||||||||
634 | G-III Apparel Group Ltd.(a) | 25,778 | |||||||||
484 | Gordmans Stores, Inc.(a) | 5,459 | |||||||||
3,094 | Guess?, Inc. | 85,642 | |||||||||
404 | Hibbett Sports, Inc.(a) | 22,159 | |||||||||
1,989 | Hillenbrand, Inc. | 49,984 | |||||||||
700 | HSN, Inc. | 36,806 | |||||||||
372 | Ignite Restaurant Group, Inc.(a) | 6,488 | |||||||||
1,627 | John Wiley & Sons, Inc., Class A | 62,103 | |||||||||
942 | Jos. A. Bank Clothiers, Inc.(a) | 41,147 | |||||||||
889 | Krispy Kreme Doughnuts, Inc.(a) | 12,144 | |||||||||
1,251 | LeapFrog Enterprises, Inc.(a) | 11,184 | |||||||||
1,295 | Life Time Fitness, Inc.(a) | 59,803 | |||||||||
1,333 | Lions Gate Entertainment Corp. (Canada)(a) | 33,072 | |||||||||
290 | Loral Space & Communications, Inc. | 17,841 | |||||||||
907 | Madison Square Garden Co. (The), Class A(a) | 54,665 | |||||||||
1,339 | Marriott Vacations Worldwide Corp.(a) | 60,898 | |||||||||
623 | MDC Partners, Inc., Class A (Canada) | 10,647 | |||||||||
647 | Overstock.com, Inc.(a) | 13,458 | |||||||||
635 | PetMed Express, Inc. | 7,937 | |||||||||
1,229 | Pier 1 Imports, Inc. | 28,525 | |||||||||
88 | Remy International, Inc.(a) | 1,544 |
Number of Shares | Value | ||||||||||
Common Stocks and Other Equity Interests (Continued) | |||||||||||
2,652 | Sally Beauty Holdings, Inc.(a) | $ | 79,719 | ||||||||
1,039 | Select Comfort Corp.(a) | 22,048 | |||||||||
529 | Six Flags Entertainment Corp. | 38,548 | |||||||||
1,257 | Smith & Wesson Holding Corp.(a) | 11,036 | |||||||||
1,374 | Sotheby's | 48,750 | |||||||||
776 | Strayer Education, Inc. | 36,751 | |||||||||
816 | Tempur-Pedic International, Inc.(a) | 39,576 | |||||||||
228 | Tilly's, Inc., Class A(a) | 3,292 | |||||||||
1,148 | Tupperware Brands Corp. | 92,184 | |||||||||
547 | Universal Electronics, Inc.(a) | 12,570 | |||||||||
712 | Vail Resorts, Inc. | 42,934 | |||||||||
2,429 | Valassis Communications, Inc. | 62,255 | |||||||||
1,849 | Weight Watchers International, Inc. | 77,972 | |||||||||
13,290 | Wendy's Co. (The) | 75,620 | |||||||||
1,945 | WMS Industries, Inc.(a) | 49,364 | |||||||||
1,071 | Wolverine World Wide, Inc. | 51,162 | |||||||||
626 | Zumiez, Inc.(a) | 18,135 | |||||||||
2,476,271 | |||||||||||
Consumer Staples—5.5% | |||||||||||
73 | Alico, Inc. | 3,052 | |||||||||
1,142 | Andersons, Inc. (The) | 62,262 | |||||||||
333 | Calavo Growers, Inc. | 9,444 | |||||||||
619 | Cal-Maine Foods, Inc. | 26,419 | |||||||||
1,726 | Casey's General Stores, Inc. | 99,953 | |||||||||
1,175 | Diamond Foods, Inc.(a) | 17,719 | |||||||||
2,873 | Flowers Foods, Inc. | 94,637 | |||||||||
688 | Hain Celestial Group, Inc. (The)(a) | 44,892 | |||||||||
374 | Inter Parfums, Inc. | 10,835 | |||||||||
299 | J & J Snack Foods Corp. | 22,431 | |||||||||
1,157 | Nu Skin Enterprises, Inc., Class A | 58,694 | |||||||||
727 | Sanderson Farms, Inc. | 44,536 | |||||||||
8 | Seaboard Corp.(a) | 21,968 | |||||||||
767 | Spectrum Brands Holdings, Inc. | 42,952 | |||||||||
1,371 | Susser Holdings Corp.(a) | 72,896 | |||||||||
1,174 | TreeHouse Foods, Inc.(a) | 74,795 | |||||||||
1,766 | United Natural Foods, Inc.(a) | 88,194 | |||||||||
176 | USANA Health Sciences, Inc.(a) | 9,930 | |||||||||
347 | WD-40 Co. | 18,714 | |||||||||
573 | WhiteWave Foods Co., Class A(a) | 9,689 | |||||||||
834,012 | |||||||||||
Energy—6.1% | |||||||||||
2,244 | Abraxas Petroleum Corp.(a) | 5,027 | |||||||||
1,048 | Berry Petroleum Co., Class A | 50,210 | |||||||||
1,048 | Bristow Group, Inc. | 66,234 | |||||||||
875 | Carrizo Oil & Gas, Inc.(a) | 21,192 | |||||||||
296 | Clayton Williams Energy, Inc.(a) | 11,426 | |||||||||
1,516 | Dresser-Rand Group, Inc.(a) | 84,305 | |||||||||
504 | Dril-Quip, Inc.(a) | 42,190 | |||||||||
768 | Goodrich Petroleum Corp.(a) | 10,015 | |||||||||
1,627 | Green Plains Renewable Energy, Inc.(a) | 20,354 |
See Notes to Financial Statements.
66
Schedule of Investments (Continued)
PowerShares Fundamental Pure Small Core Portfolio (PXSC)
April 30, 2013
Number of Shares | Value | ||||||||||
Common Stocks and Other Equity Interests (Continued) | |||||||||||
487 | Lufkin Industries, Inc. | $ | 42,997 | ||||||||
1,115 | Matrix Service Co.(a) | 16,758 | |||||||||
481 | Mitcham Industries, Inc.(a) | 7,143 | |||||||||
108 | Panhandle Oil And Gas, Inc., Class A | 3,076 | |||||||||
746 | PDC Energy, Inc.(a) | 32,302 | |||||||||
787 | Rosetta Resources, Inc.(a) | 33,770 | |||||||||
1,304 | SemGroup Corp., Class A(a) | 67,612 | |||||||||
1,328 | SM Energy Co. | 81,008 | |||||||||
1,429 | Targa Resources Corp. | 93,971 | |||||||||
5,495 | Ultra Petroleum Corp.(a) | 117,593 | |||||||||
1,785 | VAALCO Energy, Inc.(a) | 11,995 | |||||||||
3,294 | Warren Resources, Inc.(a) | 8,663 | |||||||||
2,567 | Western Refining, Inc. | 79,346 | |||||||||
3,211 | Willbros Group, Inc.(a) | 30,504 | |||||||||
937,691 | |||||||||||
Financials—22.6% | |||||||||||
1,037 | Acadia Realty Trust REIT | 29,606 | |||||||||
201 | American Capital Mortgage Investment Corp. REIT | 5,339 | |||||||||
10,804 | Anworth Mortgage Asset Corp. REIT | 68,173 | |||||||||
199 | Apollo Residential Mortgage, Inc. REIT | 4,430 | |||||||||
755 | Bancorp, Inc. (The)(a) | 9,815 | |||||||||
150 | Bank of Kentucky Financial Corp. (The) | 3,933 | |||||||||
137 | Bank of Marin Bancorp | 5,425 | |||||||||
1,079 | BankUnited, Inc. | 27,353 | |||||||||
1,461 | BBCN Bancorp, Inc. | 18,818 | |||||||||
769 | Berkshire Hills Bancorp, Inc. | 19,886 | |||||||||
202 | BNC Bancorp | 2,050 | |||||||||
1,945 | BRE Properties, Inc. REIT | 98,184 | |||||||||
160 | Bridge Bancorp, Inc. | 3,230 | |||||||||
2,410 | Brown & Brown, Inc. | 74,686 | |||||||||
365 | Bryn Mawr Bank Corp. | 8,479 | |||||||||
6,282 | Capitol Federal Financial, Inc. | 74,379 | |||||||||
6,276 | Capstead Mortgage Corp. REIT | 83,345 | |||||||||
904 | Cash America International, Inc. | 39,442 | |||||||||
266 | Center Bancorp, Inc. | 3,099 | |||||||||
634 | Centerstate Banks, Inc. | 5,275 | |||||||||
920 | Citizens, Inc.(a) | 6,017 | |||||||||
156 | CNB Financial Corp. | 2,526 | |||||||||
425 | Cohen & Steers, Inc. | 16,792 | |||||||||
1,237 | Columbia Banking System, Inc. | 26,558 | |||||||||
1,330 | Community Bank System, Inc. | 38,091 | |||||||||
3,280 | Corporate Office Properties Trust REIT | 95,087 | |||||||||
2,542 | Corrections Corp. of America REIT | 92,020 | |||||||||
2,330 | CubeSmart REIT | 40,938 | |||||||||
1,813 | DFC Global Corp.(a) | 24,475 | |||||||||
99 | Diamond Hill Investment Group | 7,473 | |||||||||
3,384 | Douglas Emmett, Inc. REIT | 88,559 | |||||||||
3,494 | East West Bancorp, Inc. | 85,009 | |||||||||
703 | EastGroup Properties, Inc. REIT | 44,338 |
Number of Shares | Value | ||||||||||
Common Stocks and Other Equity Interests (Continued) | |||||||||||
2,086 | Eaton Vance Corp. | $ | 83,190 | ||||||||
2,169 | Education Realty Trust, Inc. REIT | 23,837 | |||||||||
607 | Encore Capital Group, Inc.(a) | 17,293 | |||||||||
363 | Enterprise Financial Services Corp. | 5,220 | |||||||||
1,535 | EPR Properties REIT | 86,789 | |||||||||
1,700 | Equity One, Inc. REIT | 43,333 | |||||||||
540 | Erie Indemnity Co., Class A | 42,968 | |||||||||
688 | First California Financial Group, Inc.(a) | 5,552 | |||||||||
2,471 | First Financial Bancorp | 37,979 | |||||||||
670 | First Financial Bankshares, Inc. | 33,105 | |||||||||
1,994 | First Industrial Realty Trust, Inc. REIT | 35,772 | |||||||||
148 | First of Long Island Corp. (The) | 4,471 | |||||||||
2,223 | First Potomac Realty Trust REIT | 35,568 | |||||||||
1,109 | Flushing Financial Corp. | 16,835 | |||||||||
130 | GAMCO Investors, Inc., Class A | 6,825 | |||||||||
268 | German American Bancorp, Inc. | 5,714 | |||||||||
890 | Getty Realty Corp. REIT | 19,055 | |||||||||
849 | Gladstone Investment Corp. | 6,317 | |||||||||
3,134 | Glimcher Realty Trust REIT | 39,300 | |||||||||
639 | Greenhill & Co., Inc. | 29,515 | |||||||||
293 | Heritage Financial Corp. | 4,087 | |||||||||
5,096 | Hersha Hospitality Trust REIT | 30,474 | |||||||||
298 | Home Federal Bancorp, Inc. | 3,630 | |||||||||
1,336 | Home Properties, Inc. REIT | 86,119 | |||||||||
710 | Independent Bank Corp. | 22,038 | |||||||||
1,332 | Kilroy Realty Corp. REIT | 75,378 | |||||||||
561 | Lakeland Financial Corp. | 15,035 | |||||||||
2,556 | LaSalle Hotel Properties REIT | 66,277 | |||||||||
5,500 | Lexington Realty Trust REIT | 70,455 | |||||||||
1,885 | LPL Financial Holdings, Inc. | 65,146 | |||||||||
577 | LTC Properties, Inc. REIT | 26,830 | |||||||||
514 | Manning & Napier, Inc. | 9,000 | |||||||||
232 | Marlin Business Services Corp. | 5,621 | |||||||||
3,364 | Meadowbrook Insurance Group, Inc. | 26,172 | |||||||||
459 | Medley Capital Corp. | 7,151 | |||||||||
974 | Mid-America Apartment Communities, Inc. REIT | 66,943 | |||||||||
147 | MidWestOne Financial Group, Inc. | 3,513 | |||||||||
936 | Monmouth Real Estate Investment Corp., Class A REIT | 9,959 | |||||||||
259 | National Health Investors, Inc. REIT | 17,156 | |||||||||
184 | National Interstate Corp. | 5,345 | |||||||||
762 | New York Mortgage Trust, Inc. REIT | 5,441 | |||||||||
525 | NewStar Financial, Inc.(a) | 6,274 | |||||||||
318 | Nicholas Financial, Inc. (Canada) | 4,649 | |||||||||
5,823 | NorthStar Realty Finance Corp. REIT | 58,055 | |||||||||
231 | OmniAmerican Bancorp, Inc.(a) | 5,752 | |||||||||
311 | Pacific Premier Bancorp, Inc.(a) | 3,779 | |||||||||
884 | Park Sterling Corp.(a) | 5,065 | |||||||||
1,026 | Pinnacle Financial Partners, Inc.(a) | 24,901 | |||||||||
1,141 | Post Properties, Inc. REIT | 56,400 |
See Notes to Financial Statements.
67
Schedule of Investments (Continued)
PowerShares Fundamental Pure Small Core Portfolio (PXSC)
April 30, 2013
Number of Shares | Value | ||||||||||
Common Stocks and Other Equity Interests (Continued) | |||||||||||
1,838 | PrivateBancorp, Inc. | $ | 35,253 | ||||||||
1,512 | ProAssurance Corp. | 74,073 | |||||||||
446 | PS Business Parks, Inc. REIT | 35,591 | |||||||||
4,807 | Resource Capital Corp. REIT | 31,678 | |||||||||
763 | Rockville Financial, Inc. | 9,919 | |||||||||
1,205 | Ryman Hospitality Properties, Inc. REIT | 53,574 | |||||||||
588 | Safeguard Scientifics, Inc.(a) | 9,490 | |||||||||
324 | Saul Centers, Inc. REIT | 14,515 | |||||||||
330 | SCBT Financial Corp. | 15,764 | |||||||||
2,512 | SEI Investments Co. | 71,994 | |||||||||
371 | Select Income REIT | 10,585 | |||||||||
749 | Southside Bancshares, Inc. | 16,014 | |||||||||
705 | Sovran Self Storage, Inc. REIT | 48,363 | |||||||||
756 | Spirit Realty Capital, Inc. REIT | 16,277 | |||||||||
605 | St. Joe Co. (The)(a) | 11,840 | |||||||||
1,343 | Summit Hotel Properties, Inc. REIT | 13,417 | |||||||||
639 | Sun Communities, Inc. REIT | 32,685 | |||||||||
883 | Taubman Centers, Inc. REIT | 75,505 | |||||||||
4,181 | TD Ameritrade Holding Corp. | 83,244 | |||||||||
1,325 | TFS Financial Corp.(a) | 14,403 | |||||||||
600 | Thomas Properties Group, Inc. | 3,054 | |||||||||
2,632 | Tower Group International Ltd. (Bermuda) | 49,797 | |||||||||
1,147 | UMB Financial Corp. | 57,740 | |||||||||
479 | United Financial Bancorp, Inc. | 7,094 | |||||||||
153 | Universal Health Realty Income Trust REIT | 8,221 | |||||||||
2,493 | Washington REIT | 71,200 | |||||||||
256 | Washington Banking Co. | 3,533 | |||||||||
1,604 | Western Alliance Bancorp(a) | 23,595 | |||||||||
369 | Whitestone REIT | 6,089 | |||||||||
370 | World Acceptance Corp.(a) | 32,878 | |||||||||
3,455,498 | |||||||||||
Health Care—8.6% | |||||||||||
4,058 | Alere, Inc.(a) | 104,209 | |||||||||
545 | Almost Family, Inc. | 10,758 | |||||||||
243 | Analogic Corp. | 19,314 | |||||||||
1,099 | AngioDynamics, Inc.(a) | 11,133 | |||||||||
498 | ArthroCare Corp.(a) | 17,256 | |||||||||
597 | Bio-Rad Laboratories, Inc., Class A(a) | 71,491 | |||||||||
2,213 | BioScrip, Inc.(a) | 30,672 | |||||||||
2,617 | Brookdale Senior Living, Inc.(a) | 67,492 | |||||||||
385 | Capital Senior Living Corp.(a) | 9,340 | |||||||||
478 | Chemed Corp. | 39,014 | |||||||||
317 | Chindex International, Inc.(a) | 4,343 | |||||||||
229 | Computer Programs & Systems, Inc. | 12,013 | |||||||||
650 | Cooper Cos., Inc. (The) | 71,760 | |||||||||
148 | CorVel Corp.(a) | 7,026 | |||||||||
1,399 | Covance, Inc.(a) | 104,309 | |||||||||
816 | CryoLife, Inc. | 4,896 | |||||||||
157 | Cynosure, Inc., Class A(a) | 4,060 | |||||||||
998 | Emergent Biosolutions, Inc.(a) | 15,309 |
Number of Shares | Value | ||||||||||
Common Stocks and Other Equity Interests (Continued) | |||||||||||
337 | Exactech, Inc.(a) | $ | 6,235 | ||||||||
1,011 | Greatbatch, Inc.(a) | 28,247 | |||||||||
984 | Haemonetics Corp.(a) | 37,884 | |||||||||
1,078 | Hanger, Inc.(a) | 32,760 | |||||||||
2,647 | HealthSouth Corp.(a) | 72,793 | |||||||||
258 | ICU Medical, Inc.(a) | 15,545 | |||||||||
582 | Integra LifeSciences Holdings(a) | 20,388 | |||||||||
269 | Landauer, Inc. | 15,029 | |||||||||
736 | LHC Group, Inc.(a) | 15,986 | |||||||||
931 | Meridian Bioscience, Inc. | 18,890 | |||||||||
1,339 | Merit Medical Systems, Inc.(a) | 12,948 | |||||||||
1,727 | Molina Healthcare, Inc.(a) | 57,336 | |||||||||
833 | Natus Medical, Inc.(a) | 10,421 | |||||||||
710 | Nektar Therapeutics(a) | 7,696 | |||||||||
655 | OraSure Technologies, Inc.(a) | 2,921 | |||||||||
2,671 | Patterson Cos., Inc. | 101,364 | |||||||||
9,033 | PDL BioPharma, Inc. | 69,915 | |||||||||
893 | Rigel Pharmaceuticals, Inc.(a) | 4,278 | |||||||||
3,609 | Select Medical Holdings Corp. | 29,774 | |||||||||
1,027 | Targacept, Inc.(a) | 4,735 | |||||||||
3,205 | VCA Antech, Inc.(a) | 77,241 | |||||||||
783 | West Pharmaceutical Services, Inc. | 50,002 | |||||||||
1,042 | Wright Medical Group, Inc.(a) | 24,425 | |||||||||
1,321,208 | |||||||||||
Industrials—16.6% | |||||||||||
768 | A.O. Smith Corp. | 57,930 | |||||||||
342 | AAON, Inc. | 9,716 | |||||||||
2,637 | AAR Corp. | 47,097 | |||||||||
1,500 | Actuant Corp., Class A | 46,950 | |||||||||
1,359 | Aegion Corp.(a) | 28,621 | |||||||||
682 | Aerovironment, Inc.(a) | 13,204 | |||||||||
802 | Altra Holdings, Inc. | 21,373 | |||||||||
250 | American Science & Engineering, Inc. | 16,120 | |||||||||
1,109 | API Technologies Corp.(a) | 3,061 | |||||||||
1,208 | Applied Industrial Technologies, Inc. | 51,038 | |||||||||
3,410 | Babcock & Wilcox Co. (The) | 92,752 | |||||||||
153 | Barrett Business Services, Inc. | 8,100 | |||||||||
1,325 | Beacon Roofing Supply, Inc.(a) | 50,522 | |||||||||
1,529 | Blount International, Inc.(a) | 21,238 | |||||||||
443 | Chart Industries, Inc.(a) | 37,571 | |||||||||
937 | CLARCOR, Inc. | 48,443 | |||||||||
1,438 | Copart, Inc.(a) | 50,689 | |||||||||
483 | Cubic Corp. | 20,755 | |||||||||
2,177 | Donaldson Co., Inc. | 79,199 | |||||||||
1,117 | Douglas Dynamics, Inc. | 15,627 | |||||||||
1,133 | Dun & Bradstreet Corp. (The) | 100,214 | |||||||||
446 | Dynamic Materials Corp. | 7,082 | |||||||||
1,799 | EnerSys(a) | 82,466 | |||||||||
652 | ESCO Technologies, Inc. | 23,452 | |||||||||
1,080 | Esterline Technologies Corp.(a) | 81,043 |
See Notes to Financial Statements.
68
Schedule of Investments (Continued)
PowerShares Fundamental Pure Small Core Portfolio (PXSC)
April 30, 2013
Number of Shares | Value | ||||||||||
Common Stocks and Other Equity Interests (Continued) | |||||||||||
232 | Exponent, Inc.(a) | $ | 12,226 | ||||||||
1,756 | Flow International Corp.(a) | 6,427 | |||||||||
530 | Forward Air Corp. | 19,552 | |||||||||
740 | Franklin Electric Co., Inc. | 23,954 | |||||||||
1,504 | Furmanite Corp.(a) | 9,550 | |||||||||
991 | Gardner Denver, Inc. | 74,414 | |||||||||
1,507 | GenCorp, Inc.(a) | 19,696 | |||||||||
850 | Generac Holdings, Inc. | 30,541 | |||||||||
360 | Gorman-Rupp Co. (The) | 10,170 | |||||||||
326 | GP Strategies Corp.(a) | 7,188 | |||||||||
930 | Graco, Inc. | 56,293 | |||||||||
1,885 | Great Lakes Dredge & Dock Corp. | 13,044 | |||||||||
1,264 | Healthcare Services Group, Inc. | 28,175 | |||||||||
2,016 | Hexcel Corp.(a) | 61,488 | |||||||||
1,204 | Hub Group, Inc., Class A(a) | 44,127 | |||||||||
730 | Huron Consulting Group, Inc.(a) | 30,499 | |||||||||
101 | Hyster-Yale Materials Handling, Inc. | 5,271 | |||||||||
995 | ICF International, Inc.(a) | 26,974 | |||||||||
1,741 | IDEX Corp. | 90,584 | |||||||||
1,495 | Interface, Inc. | 25,026 | |||||||||
1,001 | Kaman Corp. | 33,824 | |||||||||
1,748 | KAR Auction Services, Inc. | 39,103 | |||||||||
3,135 | Kratos Defense & Security Solutions, Inc.(a) | 15,957 | |||||||||
910 | Landstar System, Inc. | 49,741 | |||||||||
1,631 | Lincoln Electric Holdings, Inc. | 86,052 | |||||||||
370 | LMI Aerospace, Inc.(a) | 7,914 | |||||||||
990 | Macquarie Infrastructure Co. LLC | 57,697 | |||||||||
624 | Marten Transport Ltd. | 12,711 | |||||||||
727 | Nordson Corp. | 50,519 | |||||||||
1,407 | Old Dominion Freight Line, Inc.(a) | 54,170 | |||||||||
73 | Preformed Line Products Co. | 5,877 | |||||||||
425 | RBC Bearings, Inc.(a) | 20,443 | |||||||||
1,015 | Regal-Beloit Corp. | 79,799 | |||||||||
3,387 | Swift Transportation Co.(a) | 47,486 | |||||||||
1,026 | TAL International Group, Inc. | 42,476 | |||||||||
527 | Taser International, Inc.(a) | 4,643 | |||||||||
911 | Teledyne Technologies, Inc.(a) | 68,380 | |||||||||
445 | Tennant Co. | 21,280 | |||||||||
1,915 | Tetra Tech, Inc.(a) | 50,345 | |||||||||
228 | TRC Cos., Inc.(a) | 1,377 | |||||||||
351 | UniFirst Corp. | 31,959 | |||||||||
472 | US Ecology, Inc. | 12,838 | |||||||||
909 | WABCO Holdings, Inc.(a) | 65,657 | |||||||||
755 | Watsco, Inc. | 63,707 | |||||||||
2,533,417 | |||||||||||
Information Technology—13.1% | |||||||||||
433 | ACI Worldwide, Inc.(a) | 20,355 | |||||||||
1,039 | Actuate Corp.(a) | 6,379 | |||||||||
1,873 | ADTRAN, Inc. | 39,333 |
Number of Shares | Value | ||||||||||
Common Stocks and Other Equity Interests (Continued) | |||||||||||
606 | Alpha & Omega Semiconductor Ltd. (Bermuda)(a) | $ | 4,387 | ||||||||
11,007 | Atmel Corp.(a) | 71,215 | |||||||||
244 | Badger Meter, Inc. | 10,658 | |||||||||
691 | Blackbaud, Inc. | 20,253 | |||||||||
694 | Blucora, Inc.(a) | 10,250 | |||||||||
1,654 | Booz Allen Hamilton Holding Corp. | 25,124 | |||||||||
1,837 | Brooks Automation, Inc. | 17,856 | |||||||||
747 | Cabot Microelectronics Corp.(a) | 25,032 | |||||||||
182 | Cass Information Systems, Inc. | 7,608 | |||||||||
550 | Cognex Corp. | 21,835 | |||||||||
512 | Coherent, Inc. | 28,636 | |||||||||
311 | Computer Task Group, Inc. | 6,382 | |||||||||
1,077 | Comtech Telecommunications Corp. | 26,505 | |||||||||
455 | Cray, Inc.(a) | 9,628 | |||||||||
347 | Cymer, Inc.(a) | 36,352 | |||||||||
932 | Dice Holdings, Inc.(a) | 7,866 | |||||||||
1,275 | Diodes, Inc.(a) | 25,831 | |||||||||
807 | DST Systems, Inc. | 55,804 | |||||||||
334 | DTS, Inc.(a) | 5,604 | |||||||||
918 | EPIQ Systems, Inc. | 12,824 | |||||||||
1,606 | Euronet Worldwide, Inc.(a) | 49,031 | |||||||||
670 | Exar Corp.(a) | 7,223 | |||||||||
406 | Forrester Research, Inc. | 14,555 | |||||||||
1,529 | Global Payments, Inc. | 70,946 | |||||||||
528 | GSI Technology, Inc.(a) | 3,295 | |||||||||
12,168 | GT Advanced Technologies, Inc.(a) | 47,820 | |||||||||
1,196 | Heartland Payment Systems, Inc. | 39,336 | |||||||||
1,412 | IAC/InterActiveCorp. | 66,463 | |||||||||
1,224 | Integrated Silicon Solution, Inc.(a) | 11,224 | |||||||||
507 | InterDigital, Inc. | 22,516 | |||||||||
1,224 | Internap Network Services Corp.(a) | 9,768 | |||||||||
2,481 | IntraLinks Holdings, Inc.(a) | 14,191 | |||||||||
1,704 | Itron, Inc.(a) | 67,564 | |||||||||
3,999 | JDSU(a) | 53,986 | |||||||||
1,842 | Kopin Corp.(a) | 6,097 | |||||||||
2,287 | Kulicke & Soffa Industries, Inc.(a) | 26,438 | |||||||||
273 | KVH Industries, Inc.(a) | 3,606 | |||||||||
3,556 | Lattice Semiconductor Corp.(a) | 16,535 | |||||||||
2,376 | Limelight Networks, Inc.(a) | 4,586 | |||||||||
1,718 | LTX-Credence Corp.(a) | 10,136 | |||||||||
1,443 | Magnachip Semiconductor Corp.(a) | 23,146 | |||||||||
184 | Manhattan Associates, Inc.(a) | 12,919 | |||||||||
1,603 | ManTech International Corp., Class A | 42,784 | |||||||||
353 | MAXIMUS, Inc. | 28,131 | |||||||||
343 | Measurement Specialties, Inc.(a) | 14,670 | |||||||||
2,679 | Mentor Graphics Corp. | 48,919 | |||||||||
1,037 | Micrel, Inc. | 10,432 | |||||||||
126 | MicroStrategy, Inc., Class A(a) | 11,364 | |||||||||
1,379 | MKS Instruments, Inc. | 37,054 | |||||||||
616 | Move, Inc.(a) | 7,029 |
See Notes to Financial Statements.
69
Schedule of Investments (Continued)
PowerShares Fundamental Pure Small Core Portfolio (PXSC)
April 30, 2013
Number of Shares | Value | ||||||||||
Common Stocks and Other Equity Interests (Continued) | |||||||||||
340 | MTS Systems Corp. | $ | 20,723 | ||||||||
1,070 | NETGEAR, Inc.(a) | 31,875 | |||||||||
2,819 | OmniVision Technologies, Inc.(a) | 37,803 | |||||||||
640 | Oplink Communications, Inc.(a) | 10,509 | |||||||||
353 | OSI Systems, Inc.(a) | 20,227 | |||||||||
392 | PC Connection, Inc. | 6,052 | |||||||||
816 | Perficient, Inc.(a) | 8,552 | |||||||||
757 | Plantronics, Inc. | 33,172 | |||||||||
7,027 | PMC - Sierra, Inc.(a) | 40,476 | |||||||||
7,127 | Polycom, Inc.(a) | 74,833 | |||||||||
7,014 | Power-One, Inc.(a) | 44,328 | |||||||||
1,416 | Progress Software Corp.(a) | 31,959 | |||||||||
2,030 | PTC, Inc.(a) | 48,740 | |||||||||
1,693 | QuinStreet, Inc.(a) | 11,072 | |||||||||
2,329 | Rambus, Inc.(a) | 16,210 | |||||||||
388 | Rosetta Stone, Inc.(a) | 6,569 | |||||||||
698 | SeaChange International, Inc.(a) | 7,580 | |||||||||
617 | Silicon Graphics International Corp.(a) | 8,021 | |||||||||
634 | Silicon Laboratories, Inc.(a) | 25,176 | |||||||||
801 | SS&C Technologies Holdings, Inc.(a) | 24,583 | |||||||||
162 | Stamps.com, Inc.(a) | 5,482 | |||||||||
2,156 | Sykes Enterprises, Inc.(a) | 33,181 | |||||||||
321 | Tessco Technologies, Inc. | 6,561 | |||||||||
9,559 | TriQuint Semiconductor, Inc.(a) | 55,825 | |||||||||
3,890 | TTM Technologies, Inc.(a) | 28,125 | |||||||||
175 | Tyler Technologies, Inc.(a) | 11,067 | |||||||||
841 | ViaSat, Inc.(a) | 40,763 | |||||||||
1,125 | WebMD Health Corp.(a) | 27,169 | |||||||||
758 | Websense, Inc.(a) | 13,523 | |||||||||
2,007,637 | |||||||||||
Materials—6.7% | |||||||||||
1,725 | AptarGroup, Inc. | 96,772 | |||||||||
439 | Arabian American Development Co.(a) | 3,341 | |||||||||
1,023 | Axiall Corp. | 53,656 | |||||||||
1,238 | Berry Plastics Group, Inc.(a) | 23,522 | |||||||||
1,068 | Buckeye Technologies, Inc. | 40,146 | |||||||||
144 | Chase Corp. | 2,794 | |||||||||
922 | Clearwater Paper Corp.(a) | 42,430 | |||||||||
849 | Compass Minerals International, Inc. | 73,472 | |||||||||
119 | Deltic Timber Corp. | 7,435 | |||||||||
432 | Eagle Materials, Inc. | 29,268 | |||||||||
3,378 | Golden Minerals Co.(a) | 6,148 | |||||||||
13,533 | Golden Star Resources Ltd. (Canada)(a) | 14,616 | |||||||||
8,121 | Graphic Packaging Holding Co.(a) | 61,070 | |||||||||
258 | Handy & Harman Ltd.(a) | 3,968 | |||||||||
254 | Hawkins, Inc. | 9,446 | |||||||||
330 | Haynes International, Inc. | 16,041 | |||||||||
471 | Innospec, Inc. | 20,729 | |||||||||
736 | Kaiser Aluminum Corp. | 46,368 | |||||||||
821 | Koppers Holdings, Inc. | 36,050 |
Number of Shares | Value | ||||||||||
Common Stocks and Other Equity Interests (Continued) | |||||||||||
1,687 | Kraton Performance Polymers, Inc.(a) | $ | 38,312 | ||||||||
740 | Kronos Worldwide, Inc. | 13,083 | |||||||||
800 | Landec Corp.(a) | 10,728 | |||||||||
2,474 | Omnova Solutions, Inc.(a) | 16,502 | |||||||||
2,062 | PolyOne Corp. | 46,457 | |||||||||
326 | Quaker Chemical Corp. | 20,121 | |||||||||
841 | Schweitzer-Mauduit International, Inc. | 33,884 | |||||||||
1,507 | Silgan Holdings, Inc. | 72,140 | |||||||||
478 | Stepan Co. | 27,217 | |||||||||
3,160 | Stillwater Mining Co.(a) | 39,310 | |||||||||
19,618 | Thompson Creek Metals Co., Inc. (Canada)(a) | 58,658 | |||||||||
160 | US Silica Holdings, Inc. | 3,269 | |||||||||
342 | Westlake Chemical Corp. | 28,434 | |||||||||
878 | Zep, Inc. | 13,346 | |||||||||
841 | Zoltek Cos., Inc.(a) | 11,110 | |||||||||
1,019,843 | |||||||||||
Telecommunication Services—1.5% | |||||||||||
286 | Atlantic Tele-Network, Inc. | 14,520 | |||||||||
924 | IDT Corp., Class B | 13,666 | |||||||||
3,751 | Level 3 Communications, Inc.(a) | 75,508 | |||||||||
756 | Lumos Networks Corp. | 10,198 | |||||||||
778 | Shenandoah Telecommunications Co. | 12,751 | |||||||||
3,231 | tw telecom, inc.(a) | 87,496 | |||||||||
7,354 | Vonage Holdings Corp.(a) | 22,430 | |||||||||
236,569 | |||||||||||
Utilities—3.0% | |||||||||||
520 | American States Water Co. | 28,850 | |||||||||
3,145 | Aqua America, Inc. | 99,791 | |||||||||
252 | Artesian Resources Corp., Class A | 5,940 | |||||||||
11,114 | Atlantic Power Corp. (Canada) | 52,236 | |||||||||
350 | Chesapeake Utilities Corp. | 18,676 | |||||||||
2,028 | Cleco Corp. | 100,426 | |||||||||
291 | Connecticut Water Service, Inc. | 8,288 | |||||||||
1,336 | El Paso Electric Co. | 50,047 | |||||||||
575 | Ormat Technologies, Inc. | 12,500 | |||||||||
1,933 | UIL Holdings Corp. | 80,490 | |||||||||
351 | York Water Co. (The) | 6,581 | |||||||||
463,825 | |||||||||||
Total Common Stocks and Other Equity Interests (Cost $13,986,568) | 15,285,971 |
See Notes to Financial Statements.
70
Schedule of Investments (Continued)
PowerShares Fundamental Pure Small Core Portfolio (PXSC)
April 30, 2013
Number of Shares | Value | ||||||||||
Money Market Fund—0.4% | |||||||||||
55,442 | Goldman Sachs Financial Square Prime Obligations—Institutional Share Class (Cost $55,442) | $ | 55,442 | ||||||||
Total Investments (Cost $14,042,010)—100.3% | 15,341,413 | ||||||||||
Liabilities in excess of other assets—(0.3)% | (51,777 | ) | |||||||||
Net Assets—100.0% | $ | 15,289,636 |
Investment Abbreviations:
REIT—Real Estate Investment Trust
Notes to Schedule of Investments:
(a) Non-income producing security.
See Notes to Financial Statements.
71
Schedule of Investments
PowerShares Fundamental Pure Small Growth Portfolio (PXSG)
April 30, 2013
Number of Shares | Value | ||||||||||
Common Stocks and Other Equity Interests—100.0% | |||||||||||
Consumer Discretionary—13.5% | |||||||||||
557 | AFC Enterprises, Inc.(a) | $ | 17,757 | ||||||||
1,665 | AMC Networks, Inc., Class A(a) | 104,912 | |||||||||
768 | American Public Education, Inc.(a) | 25,751 | |||||||||
503 | America's Car-Mart, Inc.(a) | 23,274 | |||||||||
9,209 | Ascena Retail Group, Inc.(a) | 170,366 | |||||||||
1,519 | BJ's Restaurants, Inc.(a) | 52,102 | |||||||||
1,294 | Black Diamond, Inc.(a) | 12,681 | |||||||||
1,647 | Bloomin' Brands, Inc.(a) | 35,822 | |||||||||
2,578 | Bridgepoint Education, Inc.(a) | 27,791 | |||||||||
739 | Buffalo Wild Wings, Inc.(a) | 66,510 | |||||||||
5,490 | Crocs, Inc.(a) | 87,950 | |||||||||
2,771 | Deckers Outdoor Corp.(a) | 152,738 | |||||||||
4,508 | Dick's Sporting Goods, Inc. | 216,835 | |||||||||
1,143 | Dorman Products, Inc. | 43,137 | |||||||||
1,609 | DSW, Inc., Class A | 106,387 | |||||||||
641 | Five Below, Inc.(a) | 23,070 | |||||||||
1,866 | Fossil, Inc.(a) | 183,092 | |||||||||
1,075 | Francesca's Holdings Corp.(a) | 30,702 | |||||||||
784 | Gentherm, Inc.(a) | 11,940 | |||||||||
4,677 | GNC Holdings, Inc., Class A | 212,008 | |||||||||
1,590 | Grand Canyon Education, Inc.(a) | 40,656 | |||||||||
5,162 | Groupon, Inc.(a) | 31,488 | |||||||||
646 | HomeAway, Inc.(a) | 19,735 | |||||||||
5,123 | Iconix Brand Group, Inc.(a) | 146,774 | |||||||||
1,473 | iRobot Corp.(a) | 42,850 | |||||||||
3,993 | Jamba, Inc.(a) | 10,621 | |||||||||
1,670 | K12, Inc.(a) | 42,535 | |||||||||
703 | Lumber Liquidators Holdings, Inc.(a) | 57,618 | |||||||||
687 | Mattress Firm Holding Corp.(a) | 26,326 | |||||||||
1,461 | Monro Muffler Brake, Inc. | 60,427 | |||||||||
609 | Morningstar, Inc. | 40,200 | |||||||||
5,303 | National CineMedia, Inc. | 86,121 | |||||||||
900 | Panera Bread Co., Class A(a) | 159,507 | |||||||||
2,218 | Polaris Industries, Inc. | 191,169 | |||||||||
1,046 | Rue21, Inc.(a) | 33,367 | |||||||||
2,865 | Scripps Networks Interactive, Inc., Class A | 190,752 | |||||||||
2,345 | SHFL entertainment, Inc.(a) | 37,051 | |||||||||
1,330 | Shutterfly, Inc.(a) | 59,225 | |||||||||
1,617 | Skullcandy, Inc.(a) | 8,311 | |||||||||
1,608 | Steven Madden Ltd.(a) | 78,197 | |||||||||
473 | Sturm Ruger & Co., Inc. | 24,251 | |||||||||
273 | Tesla Motors, Inc.(a) | 14,739 | |||||||||
3,604 | Texas Roadhouse, Inc. | 84,694 | |||||||||
1,425 | TripAdvisor, Inc.(a) | 74,926 | |||||||||
1,725 | True Religion Apparel, Inc. | 46,679 | |||||||||
462 | Tumi Holdings, Inc.(a) | 10,640 | |||||||||
1,696 | Under Armour, Inc., Class A(a) | 96,808 | |||||||||
4,790 | Urban Outfitters, Inc.(a) | 198,498 | |||||||||
790 | Vera Bradley, Inc.(a) | 18,028 | |||||||||
1,248 | Vitamin Shoppe, Inc.(a) | 61,339 | |||||||||
1,269 | Zagg, Inc.(a) | 8,591 | |||||||||
3,606,948 |
Number of Shares | Value | ||||||||||
Common Stocks and Other Equity Interests (Continued) | |||||||||||
Consumer Staples—2.9% | |||||||||||
2,988 | B&G Foods, Inc. | $ | 92,210 | ||||||||
201 | Boston Beer Co., Inc. (The), Class A(a) | 34,033 | |||||||||
3,616 | Boulder Brands, Inc.(a) | 32,580 | |||||||||
601 | Chefs' Warehouse, Inc. (The)(a) | 11,052 | |||||||||
8,264 | Darling International, Inc.(a) | 152,967 | |||||||||
1,641 | Fresh Market, Inc. (The)(a) | 67,166 | |||||||||
3,411 | Green Mountain Coffee Roasters, Inc.(a) | 195,791 | |||||||||
2,828 | Harbinger Group, Inc.(a) | 25,565 | |||||||||
669 | Medifast, Inc.(a) | 17,528 | |||||||||
698 | PriceSmart, Inc. | 62,283 | |||||||||
3,331 | Snyders-Lance, Inc. | 83,875 | |||||||||
775,050 | |||||||||||
Energy—6.2% | |||||||||||
1,540 | Approach Resources, Inc.(a) | 36,529 | |||||||||
3,609 | Atwood Oceanics, Inc.(a) | 177,022 | |||||||||
441 | Bonanza Creek Energy, Inc.(a) | 15,148 | |||||||||
5,921 | BPZ Resources, Inc.(a) | 12,671 | |||||||||
2,023 | C&J Energy Services, Inc.(a) | 40,035 | |||||||||
885 | CARBO Ceramics, Inc. | 62,525 | |||||||||
416 | Cheniere Energy, Inc.(a) | 11,848 | |||||||||
2,340 | Clean Energy Fuels Corp.(a) | 30,865 | |||||||||
2,979 | Cobalt International Energy, Inc.(a) | 83,233 | |||||||||
1,135 | Contango Oil & Gas Co. | 42,699 | |||||||||
626 | Continental Resources, Inc.(a) | 50,030 | |||||||||
732 | CVR Energy, Inc. | 36,066 | |||||||||
2,463 | Delek US Holdings, Inc. | 88,890 | |||||||||
2,021 | Forum Energy Technologies, Inc.(a) | 56,204 | |||||||||
217 | Geospace Technologies Corp.(a) | 18,308 | |||||||||
1,511 | Gulfport Energy Corp.(a) | 78,859 | |||||||||
1,421 | Halcon Resources Corp.(a) | 9,293 | |||||||||
4,012 | Heckmann Corp.(a) | 14,804 | |||||||||
6,397 | Kodiak Oil & Gas Corp. (Canada)(a) | 50,089 | |||||||||
1,194 | Laredo Petroleum Holdings, Inc.(a) | 20,537 | |||||||||
6,681 | Magnum Hunter Resources Corp.(a) | 18,172 | |||||||||
1,752 | Matador Resources Co.(a) | 17,292 | |||||||||
6,344 | McMoRan Exploration Co.(a) | 104,993 | |||||||||
3,238 | Midstates Petroleum Co., Inc.(a) | 18,683 | |||||||||
3,505 | Miller Energy Resources, Inc.(a) | 13,319 | |||||||||
2,519 | Northern Oil and Gas, Inc.(a) | 32,470 | |||||||||
1,426 | Oasis Petroleum, Inc.(a) | 48,812 | |||||||||
1,887 | PBF Energy, Inc. | 57,459 | |||||||||
3,267 | Renewable Energy Group, Inc.(a) | 32,115 | |||||||||
3,983 | Resolute Energy Corp.(a) | 36,723 | |||||||||
1,781 | Rex Energy Corp.(a) | 28,621 | |||||||||
446 | RigNet, Inc.(a) | 10,793 | |||||||||
2,861 | RPC, Inc. | 37,880 | |||||||||
665 | Sanchez Energy Corp.(a) | 12,043 | |||||||||
36,522 | SandRidge Energy, Inc.(a) | 187,723 | |||||||||
954 | Solazyme, Inc.(a) | 8,681 |
See Notes to Financial Statements.
72
Schedule of Investments (Continued)
PowerShares Fundamental Pure Small Growth Portfolio (PXSG)
April 30, 2013
Number of Shares | Value | ||||||||||
Common Stocks and Other Equity Interests (Continued) | |||||||||||
2,005 | Triangle Petroleum Corp.(a) | $ | 11,007 | ||||||||
23,438 | Vantage Drilling Co. (Cayman Islands)(a) | 39,610 | |||||||||
1,652,051 | |||||||||||
Financials—22.6% | |||||||||||
1,138 | 1st United Bancorp, Inc. | 7,545 | |||||||||
92 | Alexander's, Inc. REIT | 28,335 | |||||||||
1,876 | American Assets Trust, Inc. REIT | 63,334 | |||||||||
3,975 | American Campus Communities, Inc. REIT | 177,444 | |||||||||
1,428 | AmTrust Financial Services, Inc. | 45,210 | |||||||||
2,077 | Apollo Commercial Real Estate Finance, Inc. REIT | 36,846 | |||||||||
4,969 | ARMOUR Residential REIT, Inc. | 32,249 | |||||||||
2,518 | Associated Estates Realty Corp. REIT | 44,997 | |||||||||
1,205 | Bank of the Ozarks, Inc. | 49,321 | |||||||||
1,304 | Beneficial Mutual Bancorp, Inc.(a) | 11,149 | |||||||||
446 | BofI Holding, Inc.(a) | 18,188 | |||||||||
1,889 | Campus Crest Communities, Inc. REIT | 25,804 | |||||||||
629 | Capital Bank Financial Corp., Class A(a) | 11,240 | |||||||||
1,357 | Cardinal Financial Corp. | 20,694 | |||||||||
2,909 | CBOE Holdings, Inc. | 109,175 | |||||||||
1,198 | Chatham Lodging Trust REIT | 21,935 | |||||||||
2,289 | Chesapeake Lodging Trust REIT | 54,158 | |||||||||
1,494 | Colony Financial, Inc. REIT | 33,316 | |||||||||
702 | Coresite Realty Corp. REIT | 25,398 | |||||||||
210 | Credit Acceptance Corp.(a) | 21,069 | |||||||||
14,280 | CYS Investments, Inc. REIT | 177,500 | |||||||||
3,038 | DuPont Fabros Technology, Inc. REIT | 76,375 | |||||||||
3,760 | Dynex Capital, Inc. REIT | 40,420 | |||||||||
751 | Eagle Bancorp, Inc.(a) | 17,371 | |||||||||
1,216 | eHealth, Inc.(a) | 25,463 | |||||||||
1,477 | Equity Lifestyle Properties, Inc. REIT | 120,006 | |||||||||
4,422 | EverBank Financial Corp. | 70,752 | |||||||||
735 | Evercore Partners, Inc., Class A | 27,746 | |||||||||
1,535 | Excel Trust, Inc. REIT | 23,378 | |||||||||
3,519 | Extra Space Storage, Inc. REIT | 153,358 | |||||||||
4,016 | EZCORP, Inc., Class A(a) | 67,870 | |||||||||
521 | Fidus Investment Corp. | 9,795 | |||||||||
640 | Financial Engines, Inc. | 23,277 | |||||||||
965 | First Cash Financial Services, Inc.(a) | 49,669 | |||||||||
890 | First Connecticut Bancorp, Inc. | 13,208 | |||||||||
386 | Fox Chase Bancorp, Inc. | 6,527 | |||||||||
566 | Franklin Financial Corp. | 10,290 | |||||||||
4,558 | Geo Group, Inc. (The) REIT | 170,697 | |||||||||
2,720 | Government Properties Income Trust REIT | 70,856 | |||||||||
1,967 | Green Dot Corp., Class A(a) | 30,902 | |||||||||
7,252 | Hancock Holding Co. | 197,762 | |||||||||
9,890 | Hatteras Financial Corp. REIT | 270,294 | |||||||||
5,386 | Healthcare Trust of America, Inc., Class A REIT | 67,217 | |||||||||
3,943 | Hercules Technology Growth Capital, Inc. | 52,442 |
Number of Shares | Value | ||||||||||
Common Stocks and Other Equity Interests (Continued) | |||||||||||
996 | HFF, Inc., Class A | $ | 20,866 | ||||||||
1,099 | Home BancShares, Inc. | 43,652 | |||||||||
1,592 | Howard Hughes Corp. (The)(a) | 150,253 | |||||||||
1,395 | Hudson Pacific Properties, Inc. REIT | 31,820 | |||||||||
2,684 | IBERIABANK Corp. | 122,444 | |||||||||
1,464 | ICG Group, Inc.(a) | 17,378 | |||||||||
984 | INTL FCStone, Inc.(a) | 16,846 | |||||||||
10,118 | Invesco Mortgage Capital, Inc. REIT(b) | 216,525 | |||||||||
2,313 | Investors Bancorp, Inc. | 45,797 | |||||||||
963 | Kennedy-Wilson Holdings, Inc. | 16,015 | |||||||||
823 | MarketAxess Holdings, Inc. | 34,829 | |||||||||
6,740 | Medical Properties Trust, Inc. REIT | 108,447 | |||||||||
235 | Meridian Interstate Bancorp, Inc.(a) | 4,298 | |||||||||
6,073 | National Retail Properties, Inc. REIT | 240,977 | |||||||||
1,346 | Netspend Holdings, Inc.(a) | 21,482 | |||||||||
869 | Northfield Bancorp, Inc. | 10,219 | |||||||||
2,938 | Ocwen Financial Corp.(a) | 107,472 | |||||||||
5,609 | OMEGA Healthcare Investors, Inc. REIT | 184,368 | |||||||||
2,626 | Oritani Financial Corp. | 40,624 | |||||||||
3,347 | Pebblebrook Hotel Trust REIT | 90,905 | |||||||||
2,558 | PennyMac Mortgage Investment Trust REIT | 64,590 | |||||||||
523 | Portfolio Recovery Associates, Inc.(a) | 64,198 | |||||||||
3,299 | Prosperity Bancshares, Inc. | 151,556 | |||||||||
1,422 | Realogy Holdings Corp.(a) | 68,256 | |||||||||
2,594 | Retail Opportunity Investments Corp. REIT | 38,417 | |||||||||
7,761 | RLJ Lodging Trust REIT | 178,813 | |||||||||
2,049 | Signature Bank(a) | 146,729 | |||||||||
745 | STAG Industrial, Inc. REIT | 16,420 | |||||||||
6,112 | Starwood Property Trust, Inc. REIT | 168,019 | |||||||||
4,225 | Stifel Financial Corp.(a) | 136,130 | |||||||||
2,957 | SVB Financial Group(a) | 210,272 | |||||||||
3,546 | Tanger Factory Outlet Centers, Inc. REIT | 131,628 | |||||||||
566 | Tejon Ranch Co.(a) | 16,516 | |||||||||
589 | Terreno Realty Corp. REIT | 11,085 | |||||||||
467 | Territorial Bancorp, Inc. | 10,918 | |||||||||
1,765 | Texas Capital Bancshares, Inc.(a) | 73,530 | |||||||||
7,862 | Two Harbors Investment Corp. REIT | 94,187 | |||||||||
1,495 | ViewPoint Financial Group, Inc. | 27,837 | |||||||||
91 | Virtus Investment Partners, Inc.(a) | 17,381 | |||||||||
4,492 | Waddell & Reed Financial, Inc., Class A | 192,572 | |||||||||
616 | Walker & Dunlop, Inc.(a) | 10,971 | |||||||||
1,142 | Walter Investment Management Corp.(a) | 38,326 | |||||||||
346 | Westwood Holdings Group, Inc. | 15,120 | |||||||||
6,019,270 | |||||||||||
Health Care—13.8% | |||||||||||
478 | Abaxis, Inc. | 20,406 | |||||||||
615 | Abiomed, Inc.(a) | 11,359 | |||||||||
2,034 | Accretive Health, Inc.(a) | 21,438 | |||||||||
4,967 | Accuray, Inc.(a) | 21,855 | |||||||||
611 | Acorda Therapeutics, Inc.(a) | 24,177 |
See Notes to Financial Statements.
73
Schedule of Investments (Continued)
PowerShares Fundamental Pure Small Growth Portfolio (PXSG)
April 30, 2013
Number of Shares | Value | ||||||||||
Common Stocks and Other Equity Interests (Continued) | |||||||||||
2,302 | Affymax, Inc.(a) | $ | 2,072 | ||||||||
1,219 | Air Methods Corp. | 44,603 | |||||||||
741 | Akorn, Inc.(a) | 11,152 | |||||||||
1,548 | Align Technology, Inc.(a) | 51,270 | |||||||||
11,588 | Allscripts Healthcare Solutions, Inc.(a) | 160,378 | |||||||||
395 | Alnylam Pharmaceuticals, Inc.(a) | 9,460 | |||||||||
2,919 | Alphatec Holdings, Inc.(a) | 5,517 | |||||||||
704 | AMAG Pharmaceuticals, Inc.(a) | 15,523 | |||||||||
759 | ARIAD Pharmaceuticals, Inc.(a) | 13,563 | |||||||||
3,909 | Astex Pharmaceuticals(a) | 26,894 | |||||||||
309 | athenahealth, Inc.(a) | 29,744 | |||||||||
49 | Atrion Corp. | 9,819 | |||||||||
714 | Auxilium Pharmaceuticals, Inc.(a) | 10,660 | |||||||||
2,419 | Aveo Pharmaceuticals, Inc.(a) | 12,361 | |||||||||
1,331 | Bio-Reference Labs, Inc.(a) | 33,940 | |||||||||
3,767 | Bruker Corp.(a) | 66,940 | |||||||||
648 | Cantel Medical Corp. | 20,483 | |||||||||
5,539 | Centene Corp.(a) | 255,902 | |||||||||
589 | Cepheid, Inc.(a) | 22,459 | |||||||||
721 | Conceptus, Inc.(a) | 22,358 | |||||||||
2,375 | Cubist Pharmaceuticals, Inc.(a) | 109,060 | |||||||||
548 | Cyberonics, Inc.(a) | 23,794 | |||||||||
4,243 | Dendreon Corp.(a) | 19,985 | |||||||||
1,697 | DepoMed, Inc.(a) | 9,350 | |||||||||
529 | DexCom, Inc.(a) | 8,681 | |||||||||
1,992 | Emeritus Corp.(a) | 51,194 | |||||||||
1,298 | Ensign Group, Inc. (The) | 45,261 | |||||||||
1,482 | ExamWorks Group, Inc.(a) | 26,824 | |||||||||
2,560 | Exelixis, Inc.(a) | 13,286 | |||||||||
2,816 | Globus Medical, Inc., Class A(a) | 42,860 | |||||||||
477 | HealthStream, Inc.(a) | 10,952 | |||||||||
103 | HeartWare International, Inc.(a) | 10,012 | |||||||||
722 | Hi-Tech Pharmacal Co., Inc. | 23,869 | |||||||||
1,690 | HMS Holdings Corp.(a) | 42,605 | |||||||||
1,489 | IDEXX Laboratories, Inc.(a) | 130,972 | |||||||||
659 | Immunogen, Inc.(a) | 10,557 | |||||||||
6,133 | Impax Laboratories, Inc.(a) | 107,328 | |||||||||
1,803 | InterMune, Inc.(a) | 16,822 | |||||||||
783 | IPC The Hospitalist Co., Inc.(a) | 35,720 | |||||||||
831 | Isis Pharmaceuticals, Inc.(a) | 18,606 | |||||||||
4,312 | Lexicon Pharmaceuticals, Inc.(a) | 8,538 | |||||||||
1,363 | Luminex Corp.(a) | 22,667 | |||||||||
3,731 | Masimo Corp. | 74,844 | |||||||||
3,201 | MedAssets, Inc.(a) | 59,955 | |||||||||
1,681 | Medicines Co. (The)(a) | 56,751 | |||||||||
272 | Medidata Solutions, Inc.(a) | 18,050 | |||||||||
2,783 | MEDNAX, Inc.(a) | 246,936 | |||||||||
3,498 | Merge Healthcare, Inc.(a) | 10,914 | |||||||||
1,995 | Momenta Pharmaceuticals, Inc.(a) | 24,578 | |||||||||
535 | MWI Veterinary Supply, Inc.(a) | 62,975 | |||||||||
2,932 | Myriad Genetics, Inc.(a) | 81,656 |
Number of Shares | Value | ||||||||||
Common Stocks and Other Equity Interests (Continued) | |||||||||||
583 | Neogen Corp.(a) | $ | 29,634 | ||||||||
1,058 | NPS Pharmaceuticals, Inc.(a) | 14,209 | |||||||||
2,894 | NuVasive, Inc.(a) | 60,687 | |||||||||
1,377 | NxStage Medical, Inc.(a) | 15,381 | |||||||||
1,740 | Omnicell, Inc.(a) | 31,355 | |||||||||
791 | Onyx Pharmaceuticals, Inc.(a) | 74,987 | |||||||||
830 | Optimer Pharmaceuticals, Inc.(a) | 12,815 | |||||||||
3,274 | PAREXEL International Corp.(a) | 134,070 | |||||||||
1,813 | Pozen, Inc.(a) | 8,938 | |||||||||
3,622 | Quality Systems, Inc. | 64,725 | |||||||||
1,003 | Questcor Pharmaceuticals, Inc. | 30,832 | |||||||||
887 | Quidel Corp.(a) | 19,798 | |||||||||
5,291 | RTI Biologics, Inc.(a) | 21,058 | |||||||||
1,119 | Salix Pharmaceuticals Ltd.(a) | 58,513 | |||||||||
2,787 | SciClone Pharmaceuticals, Inc.(a) | 13,183 | |||||||||
461 | Seattle Genetics, Inc.(a) | 17,034 | |||||||||
1,938 | Sirona Dental Systems, Inc.(a) | 142,521 | |||||||||
3,434 | Solta Medical, Inc.(a) | 6,696 | |||||||||
618 | Spectranetics Corp.(a) | 11,526 | |||||||||
1,160 | Spectrum Pharmaceuticals, Inc. | 8,596 | |||||||||
2,439 | Team Health Holdings, Inc.(a) | 90,926 | |||||||||
1,268 | Techne Corp. | 81,330 | |||||||||
1,990 | Thoratec Corp.(a) | 72,038 | |||||||||
1,530 | United Therapeutics Corp.(a) | 102,173 | |||||||||
789 | US Physical Therapy, Inc. | 18,826 | |||||||||
585 | Vascular Solutions, Inc.(a) | 9,307 | |||||||||
4,527 | ViroPharma, Inc.(a) | 123,361 | |||||||||
952 | VIVUS, Inc.(a) | 12,652 | |||||||||
1,870 | Volcano Corp.(a) | 37,942 | |||||||||
3,675,048 | |||||||||||
Industrials—13.2% | |||||||||||
981 | Acacia Research Corp.(a) | 23,367 | |||||||||
683 | Advisory Board Co. (The)(a) | 33,569 | |||||||||
4,738 | Air Lease Corp. | 130,342 | |||||||||
562 | Allegiant Travel Co. | 50,524 | |||||||||
1,816 | Ameresco, Inc., Class A(a) | 13,384 | |||||||||
601 | Argan, Inc. | 10,638 | |||||||||
649 | Astronics Corp.(a) | 18,042 | |||||||||
1,012 | AZZ, Inc. | 42,797 | |||||||||
771 | CAI International, Inc.(a) | 19,653 | |||||||||
2,873 | Clean Harbors, Inc.(a) | 163,675 | |||||||||
986 | Colfax Corp.(a) | 46,017 | |||||||||
491 | DXP Enterprises, Inc.(a) | 32,838 | |||||||||
789 | Echo Global Logistics, Inc.(a) | 13,689 | |||||||||
2,160 | Edgen Group, Inc.(a) | 14,796 | |||||||||
1,167 | EnerNOC, Inc.(a) | 20,446 | |||||||||
1,361 | Genesee & Wyoming, Inc., Class A(a) | 115,957 | |||||||||
455 | Graham Corp. | 11,057 | |||||||||
1,370 | HEICO Corp. | 60,294 | |||||||||
3,458 | II-VI, Inc.(a) | 53,495 |
See Notes to Financial Statements.
74
Schedule of Investments (Continued)
PowerShares Fundamental Pure Small Growth Portfolio (PXSG)
April 30, 2013
Number of Shares | Value | ||||||||||
Common Stocks and Other Equity Interests (Continued) | |||||||||||
1,889 | InnerWorkings, Inc.(a) | $ | 19,022 | ||||||||
910 | KEYW Holding Corp. (The)(a) | 12,367 | |||||||||
2,812 | Kirby Corp.(a) | 210,591 | |||||||||
786 | L.B. Foster Co., Class A | 34,702 | |||||||||
441 | Lindsay Corp. | 33,878 | |||||||||
4,385 | MasTec, Inc.(a) | 121,903 | |||||||||
619 | Middleby Corp. (The)(a) | 92,590 | |||||||||
871 | Mistras Group, Inc.(a) | 16,505 | |||||||||
2,163 | MSC Industrial Direct Co., Inc., Class A | 170,444 | |||||||||
619 | Multi-Color Corp. | 16,007 | |||||||||
1,726 | On Assignment, Inc.(a) | 41,890 | |||||||||
6,027 | Pendrell Corp.(a) | 10,186 | |||||||||
1,483 | PMFG, Inc.(a) | 8,542 | |||||||||
2,575 | Polypore International, Inc.(a) | 107,970 | |||||||||
1,848 | Primoris Services Corp. | 40,730 | |||||||||
1,740 | Raven Industries, Inc. | 58,377 | |||||||||
1,269 | Roadrunner Transportation Systems, Inc.(a) | 28,565 | |||||||||
2,156 | Rollins, Inc. | 52,434 | |||||||||
1,164 | RPX Corp.(a) | 15,609 | |||||||||
3,770 | Sensata Technologies Holding NV (Netherlands)(a) | 126,107 | |||||||||
3,197 | Spirit Airlines, Inc.(a) | 85,360 | |||||||||
806 | Sun Hydraulics Corp. | 26,397 | |||||||||
1,044 | Team, Inc.(a) | 40,465 | |||||||||
1,202 | Thermon Group Holdings, Inc.(a) | 23,559 | |||||||||
2,921 | Titan International, Inc. | 65,168 | |||||||||
2,059 | Titan Machinery, Inc.(a) | 46,451 | |||||||||
3,236 | Towers Watson & Co., Class A | 235,969 | |||||||||
2,893 | Triumph Group, Inc. | 231,151 | |||||||||
1,059 | Valmont Industries, Inc. | 154,328 | |||||||||
1,470 | Wabtec Corp. | 154,262 | |||||||||
5,181 | Waste Connections, Inc. | 196,619 | |||||||||
2,132 | Wesco Aircraft Holdings, Inc.(a) | 35,199 | |||||||||
3,589 | Woodward, Inc. | 129,168 | |||||||||
578 | XPO Logistics, Inc.(a) | 9,427 | |||||||||
3,526,522 | |||||||||||
Information Technology—21.2% | |||||||||||
742 | 3D Systems Corp.(a) | 28,374 | |||||||||
2,290 | Accelrys, Inc.(a) | 22,556 | |||||||||
4,941 | Active Network, Inc. (The)(a) | 24,853 | |||||||||
1,442 | Advent Software, Inc.(a) | 41,876 | |||||||||
1,226 | Aruba Networks, Inc.(a) | 27,573 | |||||||||
703 | Aspen Technology, Inc.(a) | 21,427 | |||||||||
2,606 | Bankrate, Inc.(a) | 35,129 | |||||||||
990 | Bottomline Technologies, Inc.(a) | 25,938 | |||||||||
547 | BroadSoft, Inc.(a) | 13,981 | |||||||||
2,371 | Calix, Inc.(a) | 20,225 | |||||||||
1,966 | Cardtronics, Inc.(a) | 55,068 | |||||||||
772 | Cavium, Inc.(a) | 24,279 | |||||||||
1,071 | CEVA, Inc.(a) | 16,343 |
Number of Shares | Value | ||||||||||
Common Stocks and Other Equity Interests (Continued) | |||||||||||
2,705 | Ciena Corp.(a) | $ | 40,467 | ||||||||
2,200 | Cirrus Logic, Inc.(a) | 42,482 | |||||||||
436 | CommVault Systems, Inc.(a) | 32,063 | |||||||||
1,203 | comScore, Inc.(a) | 19,453 | |||||||||
1,242 | Comverse, Inc.(a) | 32,950 | |||||||||
791 | Concur Technologies, Inc.(a) | 57,830 | |||||||||
1,308 | Constant Contact, Inc.(a) | 19,110 | |||||||||
586 | CoStar Group, Inc.(a) | 63,528 | |||||||||
4,140 | Cree, Inc.(a) | 234,200 | |||||||||
1,292 | Datalink Corp.(a) | 14,457 | |||||||||
1,885 | Dealertrack Technologies, Inc.(a) | 52,497 | |||||||||
2,725 | Demand Media, Inc.(a) | 23,598 | |||||||||
3,189 | Dolby Laboratories, Inc., Class A | 104,759 | |||||||||
1,947 | Ebix, Inc. | 36,234 | |||||||||
2,785 | EchoStar Corp., Class A(a) | 109,367 | |||||||||
6,265 | Entropic Communications, Inc.(a) | 26,564 | |||||||||
593 | Envestnet, Inc.(a) | 10,804 | |||||||||
1,085 | Exlservice Holdings, Inc.(a) | 35,393 | |||||||||
1,247 | FactSet Research Systems, Inc. | 117,305 | |||||||||
650 | FARO Technologies, Inc.(a) | 25,213 | |||||||||
1,469 | FEI Co. | 93,840 | |||||||||
6,088 | Finisar Corp.(a) | 78,170 | |||||||||
1,223 | FleetCor Technologies, Inc.(a) | 94,049 | |||||||||
7,107 | FLIR Systems, Inc. | 172,771 | |||||||||
1,432 | Fortinet, Inc.(a) | 25,719 | |||||||||
943 | Fusion-io, Inc.(a) | 17,710 | |||||||||
2,130 | Gartner, Inc.(a) | 123,220 | |||||||||
10,284 | Genpact Ltd. | 191,282 | |||||||||
1,951 | Globecomm Systems, Inc.(a) | 23,900 | |||||||||
10,738 | Harmonic, Inc.(a) | 60,992 | |||||||||
1,193 | Higher One Holdings, Inc.(a) | 11,763 | |||||||||
861 | Hittite Microwave Corp.(a) | 48,311 | |||||||||
5,495 | Infinera Corp.(a) | 46,268 | |||||||||
3,294 | Informatica Corp.(a) | 108,471 | |||||||||
858 | Inphi Corp.(a) | 8,074 | |||||||||
335 | Interactive Intelligence Group, Inc.(a) | 13,879 | |||||||||
892 | InvenSense, Inc.(a) | 8,313 | |||||||||
666 | IPG Photonics Corp. | 42,411 | |||||||||
1,468 | Ixia(a) | 24,178 | |||||||||
2,003 | j2 Global, Inc. | 81,522 | |||||||||
3,310 | Jack Henry & Associates, Inc. | 153,584 | |||||||||
1,005 | Keynote Systems, Inc. | 11,266 | |||||||||
673 | Liquidity Services, Inc.(a) | 22,142 | |||||||||
943 | Littelfuse, Inc. | 65,840 | |||||||||
1,074 | LivePerson, Inc.(a) | 13,769 | |||||||||
825 | LogMeIn, Inc.(a) | 18,628 | |||||||||
1,142 | Maxwell Technologies, Inc.(a) | 6,966 | |||||||||
3,537 | MICROS Systems, Inc.(a) | 150,004 | |||||||||
4,884 | Microsemi Corp.(a) | 101,587 | |||||||||
2,703 | Mindspeed Technologies, Inc.(a) | 6,190 | |||||||||
1,151 | Monolithic Power Systems, Inc. | 27,762 |
See Notes to Financial Statements.
75
Schedule of Investments (Continued)
PowerShares Fundamental Pure Small Growth Portfolio (PXSG)
April 30, 2013
Number of Shares | Value | ||||||||||
Common Stocks and Other Equity Interests (Continued) | |||||||||||
1,233 | Monotype Imaging Holdings, Inc. | $ | 28,593 | ||||||||
1,476 | Nanometrics, Inc.(a) | 20,708 | |||||||||
3,747 | National Instruments Corp. | 102,406 | |||||||||
1,132 | NeoPhotonics Corp.(a) | 6,237 | |||||||||
1,526 | NetScout Systems, Inc.(a) | 34,808 | |||||||||
2,364 | NeuStar, Inc., Class A(a) | 103,709 | |||||||||
1,863 | NIC, Inc. | 31,373 | |||||||||
178 | NVE Corp.(a) | 9,446 | |||||||||
13,651 | OCZ Technology Group, Inc.(a) | 17,883 | |||||||||
217 | OpenTable, Inc.(a) | 12,020 | |||||||||
476 | Pegasystems, Inc. | 12,048 | |||||||||
924 | Power Integrations, Inc. | 38,263 | |||||||||
310 | PROS Holdings, Inc.(a) | 8,035 | |||||||||
797 | QLIK Technologies, Inc.(a) | 20,730 | |||||||||
1,486 | RealD, Inc.(a) | 22,245 | |||||||||
689 | RealPage, Inc.(a) | 14,056 | |||||||||
1,395 | Responsys, Inc.(a) | 10,839 | |||||||||
4,732 | Riverbed Technology, Inc.(a) | 70,318 | |||||||||
8,608 | Rovi Corp.(a) | 201,341 | |||||||||
3,227 | Rubicon Technology, Inc.(a) | 23,912 | |||||||||
7,010 | Sapient Corp.(a) | 81,877 | |||||||||
2,227 | Semtech Corp.(a) | 71,420 | |||||||||
2,012 | ServiceSource International, Inc.(a) | 12,877 | |||||||||
3,065 | ShoreTel, Inc.(a) | 11,065 | |||||||||
9,353 | Skyworks Solutions, Inc.(a) | 206,421 | |||||||||
535 | Solarwinds, Inc.(a) | 27,205 | |||||||||
1,879 | Solera Holdings, Inc. | 108,193 | |||||||||
328 | Sourcefire, Inc.(a) | 15,665 | |||||||||
3,670 | Super Micro Computer, Inc.(a) | 35,305 | |||||||||
1,574 | Synaptics, Inc.(a) | 64,896 | |||||||||
881 | Synchronoss Technologies, Inc.(a) | 24,968 | |||||||||
555 | Syntel, Inc. | 35,059 | |||||||||
1,843 | Telenav, Inc.(a) | 9,657 | |||||||||
1,125 | Telular Corp. | 14,366 | |||||||||
4,936 | TIBCO Software, Inc.(a) | 95,808 | |||||||||
2,413 | TiVo, Inc.(a) | 28,280 | |||||||||
173 | Ultimate Software Group, Inc. (The)(a) | 16,710 | |||||||||
700 | Ultratech, Inc.(a) | 20,629 | |||||||||
638 | Universal Display Corp.(a) | 20,059 | |||||||||
2,069 | Vantiv, Inc., Class A(a) | 46,615 | |||||||||
1,732 | VASCO Data Security International, Inc.(a) | 14,739 | |||||||||
3,276 | Veeco Instruments, Inc.(a) | 124,717 | |||||||||
7,173 | VeriFone Systems, Inc.(a) | 154,076 | |||||||||
969 | Verint Systems, Inc.(a) | 32,016 | |||||||||
1,109 | Virtusa Corp.(a) | 24,631 | |||||||||
782 | Vocus, Inc.(a) | 6,577 | |||||||||
1,361 | Volterra Semiconductor Corp.(a) | 17,707 | |||||||||
1,174 | Web.com Group, Inc.(a) | 20,428 | |||||||||
1,431 | Wex, Inc.(a) | 108,441 | |||||||||
27,302 | Zynga, Inc., Class A(a) | 87,093 | |||||||||
5,634,947 |
Number of Shares | Value | ||||||||||
Common Stocks and Other Equity Interests (Continued) | |||||||||||
Materials—5.1% | |||||||||||
2,159 | Allied Nevada Gold Corp.(a) | $ | 23,101 | ||||||||
696 | American Vanguard Corp. | 20,073 | |||||||||
759 | Balchem Corp. | 32,895 | |||||||||
3,370 | Calgon Carbon Corp.(a) | 57,425 | |||||||||
10,836 | Coeur d'Alene Mines Corp.(a) | 165,141 | |||||||||
1,368 | Flotek Industries, Inc.(a) | 21,943 | |||||||||
1,690 | FutureFuel Corp. | 20,702 | |||||||||
3,205 | Globe Specialty Metals, Inc. | 41,857 | |||||||||
725 | Gold Resource Corp. | 7,424 | |||||||||
22,706 | Hecla Mining Co. | 77,200 | |||||||||
1,898 | Innophos Holdings, Inc. | 97,386 | |||||||||
4,017 | Intrepid Potash, Inc. | 73,953 | |||||||||
2,851 | KapStone Paper and Packaging Corp. | 84,333 | |||||||||
399 | KMG Chemicals, Inc. | 7,326 | |||||||||
1,412 | LSB Industries, Inc.(a) | 46,116 | |||||||||
8,717 | Molycorp, Inc.(a) | 50,907 | |||||||||
473 | NewMarket Corp. | 127,095 | |||||||||
755 | PetroLogistics LP | 10,381 | |||||||||
1,730 | Royal Gold, Inc. | 96,153 | |||||||||
3,885 | Tronox Ltd., Class A (Australia) | 79,798 | |||||||||
2,916 | W.R. Grace & Co.(a) | 224,853 | |||||||||
1,366,062 | |||||||||||
Telecommunication Services—0.6% | |||||||||||
1,487 | 8x8, Inc.(a) | 10,751 | |||||||||
9,154 | Clearwire Corp., Class A(a) | 30,758 | |||||||||
1,285 | Cogent Communications Group, Inc. | 36,802 | |||||||||
8,456 | Iridium Communications, Inc.(a) | 56,740 | |||||||||
2,217 | ORBCOMM, Inc.(a) | 10,486 | |||||||||
145,537 | |||||||||||
Utilities—0.9% | |||||||||||
2,583 | ITC Holdings Corp. | 238,204 | |||||||||
Total Common Stocks and Other Equity Interests (Cost $25,381,991) | 26,639,639 | ||||||||||
Money Market Fund—0.3% | |||||||||||
87,760 | Goldman Sachs Financial Square Prime Obligations—Institutional Share Class (Cost $87,760) | 87,760 | |||||||||
Total Investments (Cost $25,469,751)—100.3% | 26,727,399 | ||||||||||
Liabilities in excess of other assets—(0.3)% | (81,311 | ) | |||||||||
Net Assets—100.0% | $ | 26,646,088 |
See Notes to Financial Statements.
76
Schedule of Investments (Continued)
PowerShares Fundamental Pure Small Growth Portfolio (PXSG)
April 30, 2013
Investment Abbreviations:
REIT—Real Estate Investment Trust
Notes to Schedule of Investments:
(a) Non-income producing security.
(b) Affiliated company. The Fund's Adviser and Invesco Mortgage Capital, Inc. REIT are subsidiaries of Invesco, Ltd. and therefore, are considered to be affiliated with the Fund. See Note 4.
See Notes to Financial Statements.
77
Schedule of Investments
PowerShares Fundamental Pure Small Value Portfolio (PXSV)
April 30, 2013
Number of Shares | Value | ||||||||||
Common Stocks and Other Equity Interests—100.0% | |||||||||||
Consumer Discretionary—21.7% | |||||||||||
2,821 | 1-800-FLOWERS.COM, Inc., Class A(a) | $ | 16,729 | ||||||||
10,059 | Aeropostale, Inc.(a) | 147,465 | |||||||||
1,472 | Allison Transmission Holdings, Inc. | 33,576 | |||||||||
6,236 | American Apparel, Inc.(a) | 12,036 | |||||||||
5,638 | American Greetings Corp., Class A | 103,965 | |||||||||
3,277 | Ameristar Casinos, Inc. | 86,480 | |||||||||
3,974 | ANN, Inc.(a) | 117,392 | |||||||||
543 | Arctic Cat, Inc.(a) | 24,430 | |||||||||
2,972 | Asbury Automotive Group, Inc.(a) | 119,147 | |||||||||
5,749 | Barnes & Noble, Inc.(a)(b) | 104,229 | |||||||||
1,194 | Bassett Furniture Industries, Inc. | 16,752 | |||||||||
2,781 | Beazer Homes USA, Inc.(a)(b) | 44,941 | |||||||||
7,024 | bebe Stores, Inc. | 39,756 | |||||||||
7,548 | Belo Corp., Class A | 80,915 | |||||||||
2,300 | Big 5 Sporting Goods Corp. | 38,640 | |||||||||
97 | Biglari Holdings, Inc.(a) | 37,566 | |||||||||
2,078 | Blyth, Inc.(b) | 34,245 | |||||||||
2,607 | Bob Evans Farms, Inc. | 112,987 | |||||||||
4,701 | Bon-Ton Stores, Inc. (The)(b) | 72,113 | |||||||||
14,493 | Boyd Gaming Corp.(a)(b) | 173,916 | |||||||||
5,327 | Brinker International, Inc. | 207,220 | |||||||||
5,210 | Brown Shoe Co., Inc. | 88,101 | |||||||||
3,676 | Brunswick Corp. | 116,382 | |||||||||
8,659 | Callaway Golf Co. | 58,015 | |||||||||
38,455 | Career Education Corp.(a) | 84,216 | |||||||||
1,372 | Carmike Cinemas, Inc.(a) | 24,092 | |||||||||
2,430 | Cato Corp. (The), Class A | 58,344 | |||||||||
1,510 | CEC Entertainment, Inc. | 50,389 | |||||||||
2,817 | Cheesecake Factory, Inc. (The) | 112,173 | |||||||||
2,294 | Children's Place Retail Stores, Inc. (The)(a) | 112,222 | |||||||||
3,118 | Christopher & Banks Corp.(a) | 21,670 | |||||||||
3,072 | Citi Trends, Inc.(a) | 36,157 | |||||||||
5,020 | Clear Channel Outdoor Holdings, Inc., Class A(a) | 36,295 | |||||||||
842 | Columbia Sportswear Co. | 49,341 | |||||||||
987 | Conn's, Inc.(a) | 42,747 | |||||||||
5,594 | Cooper Tire & Rubber Co. | 139,235 | |||||||||
42,594 | Corinthian Colleges, Inc.(a)(b) | 85,188 | |||||||||
1,396 | Cracker Barrel Old Country Store, Inc. | 115,505 | |||||||||
1,018 | CSS Industries, Inc. | 29,176 | |||||||||
522 | Culp, Inc. | 8,477 | |||||||||
5,606 | Cumulus Media, Inc., Class A(a) | 17,883 | |||||||||
5,933 | Denny's Corp.(a) | 33,640 | |||||||||
4,523 | Destination XL Group, Inc.(a) | 22,525 | |||||||||
2,216 | Dillard's, Inc., Class A | 182,621 | |||||||||
1,027 | Drew Industries, Inc. | 37,075 | |||||||||
3,909 | E.W. Scripps Co. (The), Class A(a) | 54,296 | |||||||||
6,675 | Education Management Corp.(a)(b) | 37,847 | |||||||||
2,644 | Entercom Communications Corp., Class A(a) | 20,914 | |||||||||
5,361 | Entravision Communications Corp., Class A | 20,693 |
Number of Shares | Value | ||||||||||
Common Stocks and Other Equity Interests (Continued) | |||||||||||
1,748 | Ethan Allen Interiors, Inc. | $ | 51,181 | ||||||||
21,244 | Exide Technologies(a) | 17,996 | |||||||||
5,224 | Express, Inc.(a) | 95,129 | |||||||||
8,783 | Federal-Mogul Corp.(a) | 65,697 | |||||||||
888 | Fiesta Restaurant Group, Inc.(a) | 24,207 | |||||||||
4,228 | Fifth & Pacific Cos., Inc.(a) | 87,181 | |||||||||
3,585 | Finish Line, Inc. (The), Class A | 69,513 | |||||||||
461 | Fisher Communications, Inc. | 19,095 | |||||||||
558 | Flexsteel Industries, Inc. | 11,489 | |||||||||
4,859 | Fred's, Inc., Class A | 69,144 | |||||||||
1,712 | Fuel Systems Solutions, Inc.(a) | 26,896 | |||||||||
5,388 | Gray Television, Inc.(a) | 34,214 | |||||||||
2,923 | Group 1 Automotive, Inc. | 176,783 | |||||||||
3,921 | Harman International Industries, Inc. | 175,308 | |||||||||
8,193 | Harte-Hanks, Inc. | 64,971 | |||||||||
1,293 | Haverty Furniture Cos., Inc. | 30,748 | |||||||||
3,746 | hhgregg, Inc.(a)(b) | 50,608 | |||||||||
842 | Hooker Furniture Corp. | 14,558 | |||||||||
2,825 | Hot Topic, Inc. | 39,409 | |||||||||
10,043 | Hovnanian Enterprises, Inc., Class A(a)(b) | 54,734 | |||||||||
2,810 | Hyatt Hotels Corp., Class A(a) | 119,931 | |||||||||
1,969 | International Speedway Corp., Class A | 64,721 | |||||||||
1,537 | Interval Leisure Group, Inc. | 29,295 | |||||||||
4,226 | Isle of Capri Casinos, Inc.(a) | 32,371 | |||||||||
9,846 | ITT Educational Services, Inc.(a)(b) | 180,280 | |||||||||
3,900 | Jack in the Box, Inc.(a) | 139,815 | |||||||||
3,627 | JAKKS Pacific, Inc. | 39,571 | |||||||||
477 | Johnson Outdoors, Inc., Class A(a) | 11,190 | |||||||||
14,594 | Jones Group, Inc. (The) | 204,316 | |||||||||
4,195 | Journal Communications, Inc., Class A(a) | 28,568 | |||||||||
6,031 | KB Home | 135,939 | |||||||||
1,650 | Kirkland's, Inc.(a) | 19,899 | |||||||||
3,557 | Lamar Advertising Co., Class A(a) | 166,539 | |||||||||
2,875 | La-Z-Boy, Inc. | 51,923 | |||||||||
1,665 | Libbey, Inc.(a) | 32,251 | |||||||||
1,570 | LIN TV Corp., Class A(a) | 19,327 | |||||||||
1,587 | Lithia Motors, Inc., Class A | 78,588 | |||||||||
14,984 | Live Nation Entertainment, Inc.(a) | 189,248 | |||||||||
982 | Luby's, Inc.(a) | 6,687 | |||||||||
847 | M/I Homes, Inc.(a) | 20,836 | |||||||||
493 | Mac-Gray Corp. | 6,384 | |||||||||
2,171 | Maidenform Brands, Inc.(a) | 39,078 | |||||||||
2,227 | Marcus Corp. | 28,595 | |||||||||
2,318 | MarineMax, Inc.(a) | 26,866 | |||||||||
2,498 | Martha Stewart Living Omnimedia, Inc., Class A(a) | 6,170 | |||||||||
1,814 | Matthews International Corp., Class A | 66,773 | |||||||||
14,491 | McClatchy Co. (The), Class A(a)(b) | 33,474 | |||||||||
2,229 | MDC Holdings, Inc. | 83,810 | |||||||||
4,523 | Men's Wearhouse, Inc. (The) | 151,521 | |||||||||
2,810 | Meredith Corp.(b) | 109,084 |
See Notes to Financial Statements.
78
Schedule of Investments (Continued)
PowerShares Fundamental Pure Small Value Portfolio (PXSV)
April 30, 2013
Number of Shares | Value | ||||||||||
Common Stocks and Other Equity Interests (Continued) | |||||||||||
1,436 | Meritage Homes Corp.(a) | $ | 70,062 | ||||||||
6,941 | Modine Manufacturing Co.(a) | 63,441 | |||||||||
967 | Monarch Casino & Resort, Inc.(a) | 12,445 | |||||||||
2,620 | Morgans Hotel Group Co.(a) | 16,061 | |||||||||
579 | Movado Group, Inc. | 17,509 | |||||||||
845 | Multimedia Games Holding Co., Inc.(a) | 20,838 | |||||||||
1,296 | NACCO Industries, Inc., Class A | 75,194 | |||||||||
1,162 | Nautilus, Inc.(a) | 7,995 | |||||||||
3,265 | New York & Co., Inc.(a) | 14,562 | |||||||||
16,086 | New York Times Co. (The), Class A(a) | 142,522 | |||||||||
852 | Nexstar Broadcasting Group, Inc., Class A | 20,746 | |||||||||
4,861 | Nutrisystem, Inc. | 39,374 | |||||||||
4,817 | Orbitz Worldwide, Inc.(a) | 28,806 | |||||||||
663 | Oxford Industries, Inc. | 39,203 | |||||||||
794 | Papa John's International, Inc.(a) | 50,022 | |||||||||
5,145 | Penske Automotive Group, Inc. | 159,083 | |||||||||
7,202 | Pep Boys-Manny, Moe & Jack (The) | 83,543 | |||||||||
2,500 | Perry Ellis International, Inc. | 43,925 | |||||||||
5,811 | Pinnacle Entertainment, Inc.(a) | 110,758 | |||||||||
1,831 | Pool Corp. | 89,756 | |||||||||
13,964 | Quiksilver, Inc.(a) | 93,978 | |||||||||
1,102 | Red Robin Gourmet Burgers, Inc.(a) | 53,304 | |||||||||
12,571 | Regal Entertainment Group, Class A(b) | 225,524 | |||||||||
6,130 | Regis Corp. | 114,938 | |||||||||
8,720 | Ruby Tuesday, Inc.(a) | 84,061 | |||||||||
2,391 | Ruth's Hospitality Group, Inc. | 23,695 | |||||||||
1,750 | Ryland Group, Inc. (The) | 78,855 | |||||||||
254 | Saga Communications, Inc., Class A | 11,694 | |||||||||
10,636 | Saks, Inc.(a)(b) | 122,846 | |||||||||
2,997 | Scholastic Corp. | 82,268 | |||||||||
5,883 | Scientific Games Corp., Class A(a) | 52,241 | |||||||||
968 | Sears Hometown and Outlet Stores, Inc.(a) | 43,182 | |||||||||
242 | Shiloh Industries, Inc. | 2,384 | |||||||||
1,446 | Shoe Carnival, Inc. | 30,120 | |||||||||
3,125 | Sinclair Broadcast Group, Inc., Class A | 83,750 | |||||||||
3,674 | Skechers U.S.A., Inc., Class A(a) | 76,346 | |||||||||
6,694 | Sonic Automotive, Inc., Class A | 147,201 | |||||||||
4,330 | Sonic Corp.(a) | 54,255 | |||||||||
4,617 | Spartan Motors, Inc. | 24,562 | |||||||||
899 | Speedway Motorsports, Inc. | 16,209 | |||||||||
2,689 | Stage Stores, Inc. | 74,458 | |||||||||
1,240 | Standard Motor Products, Inc. | 37,994 | |||||||||
2,246 | Standard Pacific Corp.(a)(b) | 20,326 | |||||||||
7,067 | Starz - Liberty Capital(a) | 165,226 | |||||||||
3,427 | Stein Mart, Inc. | 27,108 | |||||||||
609 | Steinway Musical Instruments, Inc.(a) | 15,188 | |||||||||
4,835 | Stewart Enterprises, Inc., Class A | 43,080 | |||||||||
4,248 | Stoneridge, Inc.(a) | 32,157 | |||||||||
2,593 | Superior Industries International, Inc. | 47,607 | |||||||||
995 | Systemax, Inc. | 9,114 | |||||||||
3,522 | Thor Industries, Inc. | 130,631 |
Number of Shares | Value | ||||||||||
Common Stocks and Other Equity Interests (Continued) | |||||||||||
889 | Tower International, Inc.(a) | $ | 14,304 | ||||||||
2,886 | Town Sports International Holdings, Inc. | 29,062 | |||||||||
8,251 | TravelCenters of America LLC(a) | 95,052 | |||||||||
4,745 | Tuesday Morning Corp.(a) | 38,482 | |||||||||
1,001 | Unifi, Inc.(a) | 19,520 | |||||||||
2,059 | Universal Technical Institute, Inc. | 24,440 | |||||||||
3,315 | VOXX International Corp.(a) | 31,592 | |||||||||
1,309 | West Marine, Inc.(a) | 15,485 | |||||||||
11,150 | Wet Seal, Inc. (The), Class A(a) | 36,349 | |||||||||
505 | Weyco Group, Inc. | 12,120 | |||||||||
4,197 | Williams-Sonoma, Inc. | 225,295 | |||||||||
1,113 | Winnebago Industries, Inc.(a) | 20,390 | |||||||||
4,532 | World Wrestling Entertainment, Inc., Class A | 41,604 | |||||||||
17,449 | Zale Corp.(a) | 77,474 | |||||||||
10,432,946 | |||||||||||
Consumer Staples—3.8% | |||||||||||
8,103 | Alliance One International, Inc.(a) | 30,386 | |||||||||
37 | Arden Group, Inc., Class A | 3,659 | |||||||||
9,196 | Central Garden & Pet Co., Class A(a) | 80,925 | |||||||||
23,056 | Chiquita Brands International, Inc.(a) | 198,973 | |||||||||
544 | Coca-Cola Bottling Co. Consolidated | 33,456 | |||||||||
12,249 | Dole Food Co., Inc.(a) | 131,799 | |||||||||
1,497 | Elizabeth Arden, Inc.(a) | 61,302 | |||||||||
470 | Farmer Brothers Co.(a) | 7,121 | |||||||||
4,175 | Fresh Del Monte Produce, Inc. | 106,087 | |||||||||
3,849 | Harris Teeter Supermarkets, Inc. | 160,850 | |||||||||
1,843 | Ingles Markets, Inc., Class A | 39,293 | |||||||||
929 | John B. Sanfilippo & Son, Inc. | 19,490 | |||||||||
953 | Lancaster Colony Corp. | 75,220 | |||||||||
2,479 | Nash Finch Co. | 50,943 | |||||||||
1,180 | National Beverage Corp. | 17,381 | |||||||||
692 | Nature's Sunshine Products, Inc. | 10,124 | |||||||||
849 | Nutraceutical International Corp. | 15,681 | |||||||||
354 | Oil-Dri Corp. of America | 9,739 | |||||||||
4,378 | Pilgrim's Pride Corp.(a) | 42,861 | |||||||||
3,460 | Post Holdings, Inc.(a) | 151,513 | |||||||||
1,930 | Prestige Brands Holdings, Inc.(a) | 52,014 | |||||||||
799 | Revlon, Inc., Class A(a) | 15,461 | |||||||||
14,119 | Roundy's, Inc.(b) | 101,092 | |||||||||
969 | Seneca Foods Corp., Class A(a) | 31,580 | |||||||||
2,602 | Spartan Stores, Inc. | 43,662 | |||||||||
740 | Tootsie Roll Industries, Inc.(b) | 23,110 | |||||||||
2,975 | Universal Corp. | 171,211 | |||||||||
6,239 | Vector Group Ltd.(b) | 101,758 | |||||||||
592 | Village Super Market, Inc., Class A | 20,838 | |||||||||
1,117 | Weis Markets, Inc. | 46,724 | |||||||||
1,854,253 | |||||||||||
Energy—4.7% | |||||||||||
314 | Adams Resources & Energy, Inc. | 15,603 | |||||||||
2,379 | Alon USA Energy, Inc. | 39,491 |
See Notes to Financial Statements.
79
Schedule of Investments (Continued)
PowerShares Fundamental Pure Small Value Portfolio (PXSV)
April 30, 2013
Number of Shares | Value | ||||||||||
Common Stocks and Other Equity Interests (Continued) | |||||||||||
5,240 | Basic Energy Services, Inc.(a) | $ | 71,945 | ||||||||
6,752 | Bill Barrett Corp.(a)(b) | 134,095 | |||||||||
35,883 | Cal Dive International, Inc.(a)(b) | 59,925 | |||||||||
4,550 | Callon Petroleum Co.(a) | 16,289 | |||||||||
7,608 | Cloud Peak Energy, Inc.(a) | 148,660 | |||||||||
5,719 | Comstock Resources, Inc.(a) | 89,560 | |||||||||
5,286 | Crosstex Energy, Inc. | 97,315 | |||||||||
789 | Dawson Geophysical Co.(a) | 24,254 | |||||||||
4,727 | Endeavour International Corp.(a)(b) | 12,952 | |||||||||
1,582 | EPL Oil & Gas, Inc.(a) | 51,684 | |||||||||
31,847 | Forest Oil Corp.(a) | 133,439 | |||||||||
1,034 | Gulf Island Fabrication, Inc. | 21,259 | |||||||||
2,278 | Gulfmark Offshore, Inc., Class A | 94,810 | |||||||||
3,012 | Harvest Natural Resources, Inc.(a) | 9,879 | |||||||||
12,966 | Hercules Offshore, Inc.(a) | 95,559 | |||||||||
2,020 | Hornbeck Offshore Services, Inc.(a) | 90,738 | |||||||||
6,848 | ION Geophysical Corp.(a) | 42,732 | |||||||||
17,930 | Key Energy Services, Inc.(a) | 106,504 | |||||||||
835 | Natural Gas Services Group, Inc.(a) | 16,859 | |||||||||
6,812 | Newpark Resources, Inc.(a) | 71,526 | |||||||||
18,021 | Parker Drilling Co.(a) | 74,247 | |||||||||
18,682 | Penn Virginia Corp. | 75,288 | |||||||||
7,862 | PetroQuest Energy, Inc.(a) | 33,649 | |||||||||
1,258 | PHI, Inc.(a) | 34,935 | |||||||||
7,781 | Pioneer Energy Services Corp.(a) | 54,856 | |||||||||
59,195 | Quicksilver Resources, Inc.(a)(b) | 149,171 | |||||||||
765 | REX American Resources Corp.(a) | 14,298 | |||||||||
5,571 | Stone Energy Corp.(a) | 109,916 | |||||||||
7,741 | Swift Energy Co.(a) | 100,169 | |||||||||
2,816 | Tesco Corp. (Canada)(a) | 34,355 | |||||||||
9,635 | TETRA Technologies, Inc.(a) | 87,968 | |||||||||
2,586 | W&T Offshore, Inc. | 30,204 | |||||||||
2,244,134 | |||||||||||
Financials—23.4% | |||||||||||
1,008 | 1st Source Corp. | 23,718 | |||||||||
642 | Agree Realty Corp. REIT | 19,305 | |||||||||
7,559 | American Equity Investment Life Holding Co. | 115,199 | |||||||||
486 | American National Bankshares, Inc. | 10,561 | |||||||||
1,319 | Ameris Bancorp(a) | 18,295 | |||||||||
1,038 | AMERISAFE, Inc. | 33,901 | |||||||||
497 | Ames National Corp. | 9,766 | |||||||||
2,686 | Arbor Realty Trust, Inc. REIT | 20,736 | |||||||||
805 | Arlington Asset Investment Corp., Class A | 21,807 | |||||||||
924 | Arrow Financial Corp. | 22,352 | |||||||||
8,416 | Ashford Hospitality Trust, Inc. REIT | 108,398 | |||||||||
938 | Asset Acceptance Capital Corp.(a) | 6,069 | |||||||||
14,017 | Astoria Financial Corp. | 134,423 | |||||||||
704 | AV Homes, Inc.(a) | 9,089 | |||||||||
622 | Baldwin & Lyons, Inc., Class B | 15,115 | |||||||||
469 | BancFirst Corp. | 19,623 |
Number of Shares | Value | ||||||||||
Common Stocks and Other Equity Interests (Continued) | |||||||||||
8,893 | BancorpSouth, Inc. | $ | 142,288 | ||||||||
4,492 | Bank Mutual Corp. | 23,269 | |||||||||
3,598 | Bank of Hawaii Corp. | 171,589 | |||||||||
771 | BankFinancial Corp. | 6,083 | |||||||||
1,071 | Banner Corp. | 34,990 | |||||||||
15,199 | BGC Partners, Inc., Class A | 86,938 | |||||||||
1,347 | BOK Financial Corp. | 84,174 | |||||||||
4,728 | Boston Private Financial Holdings, Inc. | 45,578 | |||||||||
6,158 | Brookline Bancorp, Inc. | 51,727 | |||||||||
3,744 | Calamos Asset Management, Inc., Class A | 42,494 | |||||||||
656 | Camden National Corp. | 21,904 | |||||||||
922 | Capital City Bank Group, Inc.(a) | 11,525 | |||||||||
6,551 | CapLease, Inc. REIT | 45,988 | |||||||||
4,518 | Cathay General Bancorp | 89,050 | |||||||||
6,672 | Cedar Realty Trust, Inc. REIT | 42,768 | |||||||||
2,394 | Central Pacific Financial Corp.(a) | 40,315 | |||||||||
129 | Century Bancorp, Inc., Class A | 4,383 | |||||||||
588 | Charter Financial Corp. | 5,980 | |||||||||
1,859 | Chemical Financial Corp. | 46,103 | |||||||||
684 | Citizens & Northern Corp. | 13,242 | |||||||||
1,189 | City Holding Co. | 45,396 | |||||||||
3,114 | City National Corp. | 178,214 | |||||||||
2,470 | CNA Financial Corp. | 83,264 | |||||||||
2,133 | CoBiz Financial, Inc. | 18,258 | |||||||||
7,267 | Colonial Properties Trust REIT | 168,667 | |||||||||
1,071 | Community Trust Bancorp, Inc. | 37,078 | |||||||||
6,415 | Cousins Properties, Inc. REIT | 70,052 | |||||||||
7,867 | Cowen Group, Inc., Class A(a) | 20,140 | |||||||||
2,311 | Crawford & Co., Class B | 17,540 | |||||||||
6,573 | CVB Financial Corp. | 71,449 | |||||||||
18,372 | DCT Industrial Trust, Inc. REIT | 143,853 | |||||||||
15,079 | DiamondRock Hospitality Co. REIT | 150,488 | |||||||||
2,542 | Dime Community Bancshares, Inc. | 36,274 | |||||||||
710 | Donegal Group, Inc., Class A | 10,394 | |||||||||
528 | EMC Insurance Group, Inc. | 14,905 | |||||||||
2,266 | Employers Holdings, Inc. | 51,325 | |||||||||
387 | Enterprise Bancorp, Inc. | 6,238 | |||||||||
369 | ESB Financial Corp. | 5,166 | |||||||||
11,452 | F.N.B. Corp. | 130,438 | |||||||||
1,084 | FBL Financial Group, Inc., Class A | 42,612 | |||||||||
799 | FBR & Co.(a) | 16,643 | |||||||||
548 | Federal Agricultural Mortgage Corp., Class C | 17,415 | |||||||||
10,400 | FelCor Lodging Trust, Inc. REIT(a) | 62,192 | |||||||||
752 | Fidelity Southern Corp. | 8,941 | |||||||||
941 | Financial Institutions, Inc. | 18,001 | |||||||||
1,725 | First Bancorp | 22,442 | |||||||||
734 | First Bancorp, Inc. | 12,544 | |||||||||
6,270 | First Busey Corp. | 26,961 | |||||||||
440 | First Citizens BancShares, Inc., Class A | 82,025 | |||||||||
9,624 | First Commonwealth Financial Corp. | 68,812 | |||||||||
1,353 | First Community Bancshares, Inc. | 20,985 |
See Notes to Financial Statements.
80
Schedule of Investments (Continued)
PowerShares Fundamental Pure Small Value Portfolio (PXSV)
April 30, 2013
Number of Shares | Value | ||||||||||
Common Stocks and Other Equity Interests (Continued) | |||||||||||
796 | First Defiance Financial Corp. | $ | 18,021 | ||||||||
874 | First Financial Corp. | 26,998 | |||||||||
1,385 | First Financial Holdings, Inc. | 27,755 | |||||||||
881 | First Financial Northwest, Inc.(a) | 7,136 | |||||||||
1,451 | First Interstate BancSystem, Inc. | 29,484 | |||||||||
2,377 | First Merchants Corp. | 38,579 | |||||||||
6,659 | First Midwest Bancorp, Inc. | 83,570 | |||||||||
17,186 | FirstMerit Corp. | 294,396 | |||||||||
1,640 | Flagstar Bancorp, Inc.(a) | 20,352 | |||||||||
659 | FNB United Corp.(a) | 4,942 | |||||||||
5,631 | Forest City Enterprises, Inc., Class A(a) | 105,131 | |||||||||
1,592 | Forestar Group, Inc.(a) | 34,292 | |||||||||
5,191 | Franklin Street Properties Corp. REIT | 79,267 | |||||||||
3,215 | FXCM, Inc., Class A | 43,563 | |||||||||
1,501 | Gain Capital Holdings, Inc. | 7,400 | |||||||||
7,251 | GFI Group, Inc. | 29,077 | |||||||||
4,953 | Glacier Bancorp, Inc. | 91,383 | |||||||||
959 | Gladstone Commercial Corp. REIT | 18,355 | |||||||||
10,242 | Gramercy Property Trust, Inc. REIT(a) | 48,649 | |||||||||
888 | Great Southern Bancorp, Inc. | 23,417 | |||||||||
5,037 | Guaranty Bancorp(a) | 10,678 | |||||||||
933 | Hallmark Financial Services, Inc.(a) | 8,444 | |||||||||
1,620 | Hanmi Financial Corp.(a) | 24,997 | |||||||||
4,529 | Healthcare Realty Trust, Inc. REIT | 135,961 | |||||||||
1,066 | Heartland Financial USA, Inc. | 27,087 | |||||||||
1,020 | Heritage Commerce Corp.(a) | 6,701 | |||||||||
4,565 | Highwoods Properties, Inc. REIT | 187,302 | |||||||||
1,785 | Hilltop Holdings, Inc.(a) | 23,901 | |||||||||
320 | HomeStreet, Inc. | 6,880 | |||||||||
879 | HomeTrust Bancshares, Inc.(a) | 14,020 | |||||||||
4,324 | Horace Mann Educators Corp. | 97,506 | |||||||||
505 | Horizon Bancorp | 9,746 | |||||||||
1,206 | Hudson Valley Holding Corp. | 18,548 | |||||||||
255 | Independence Holding Co. | 2,677 | |||||||||
1,187 | Infinity Property & Casualty Corp. | 67,350 | |||||||||
6,822 | Inland Real Estate Corp. REIT | 77,225 | |||||||||
11,507 | Interactive Brokers Group, Inc., Class A | 173,295 | |||||||||
5,384 | International Bancshares Corp. | 104,450 | |||||||||
6,396 | Investment Technology Group, Inc.(a) | 69,652 | |||||||||
7,337 | Investors Real Estate Trust REIT | 71,389 | |||||||||
17,466 | iStar Financial, Inc. REIT(a) | 204,003 | |||||||||
9,967 | Janus Capital Group, Inc. | 88,906 | |||||||||
357 | Kansas City Life Insurance Co. | 12,888 | |||||||||
5,487 | Kite Realty Group Trust REIT | 36,214 | |||||||||
36,729 | Knight Capital Group, Inc., Class A(a) | 130,021 | |||||||||
1,622 | Lakeland Bancorp, Inc. | 15,506 | |||||||||
1,226 | MainSource Financial Group, Inc. | 15,533 | |||||||||
3,821 | MB Financial, Inc. | 94,608 | |||||||||
4,897 | MBIA, Inc.(a) | 46,326 | |||||||||
419 | Merchants Bancshares, Inc. | 12,712 | |||||||||
3,823 | Mercury General Corp. | 174,749 |
Number of Shares | Value | ||||||||||
Common Stocks and Other Equity Interests (Continued) | |||||||||||
978 | Metro Bancorp, Inc.(a) | $ | 17,359 | ||||||||
737 | MetroCorp Bancshares, Inc.(a) | 7,407 | |||||||||
18,667 | MGIC Investment Corp.(a) | 100,802 | |||||||||
338 | MidSouth Bancorp, Inc. | 5,310 | |||||||||
6,483 | MPG Office Trust, Inc. REIT(a) | 20,227 | |||||||||
196 | NASB Financial, Inc.(a) | 4,469 | |||||||||
342 | National Bankshares, Inc. | 11,201 | |||||||||
3,271 | National Financial Partners Corp.(a) | 82,887 | |||||||||
7,554 | National Penn Bancshares, Inc. | 73,954 | |||||||||
156 | National Western Life Insurance Co., Class A | 28,489 | |||||||||
1,115 | Navigators Group, Inc. (The)(a) | 64,536 | |||||||||
3,206 | NBT Bancorp, Inc. | 64,922 | |||||||||
2,229 | Nelnet, Inc., Class A | 75,786 | |||||||||
6,590 | Newcastle Investment Corp. REIT | 74,665 | |||||||||
7,435 | Northwest Bancshares, Inc. | 91,079 | |||||||||
1,323 | OceanFirst Financial Corp. | 18,800 | |||||||||
7,343 | Old National Bancorp | 89,438 | |||||||||
813 | One Liberty Properties, Inc. REIT | 18,650 | |||||||||
3,408 | OneBeacon Insurance Group Ltd., Class A | 46,315 | |||||||||
935 | Oppenheimer Holdings, Inc., Class A | 17,298 | |||||||||
1,240 | Pacific Continental Corp. | 13,863 | |||||||||
1,879 | PacWest Bancorp | 52,105 | |||||||||
1,060 | Park National Corp.(b) | 72,483 | |||||||||
1,397 | Parkway Properties, Inc. REIT | 25,467 | |||||||||
257 | Penns Woods Bancorp, Inc. | 10,516 | |||||||||
4,968 | Pennsylvania REIT | 102,987 | |||||||||
850 | Peoples Bancorp, Inc. | 17,323 | |||||||||
1,359 | Phoenix Cos., Inc. (The)(a) | 39,560 | |||||||||
1,175 | PICO Holdings, Inc.(a) | 25,498 | |||||||||
1,319 | Piper Jaffray Cos., Inc.(a) | 44,529 | |||||||||
2,424 | Potlatch Corp. REIT | 114,776 | |||||||||
666 | Preferred Bank(a) | 10,989 | |||||||||
5,290 | Primerica, Inc. | 179,648 | |||||||||
591 | Provident Financial Holdings, Inc. | 9,574 | |||||||||
4,556 | Provident Financial Services, Inc. | 69,843 | |||||||||
2,893 | Provident New York Bancorp | 26,153 | |||||||||
7,465 | Radian Group, Inc. | 89,207 | |||||||||
13,480 | RAIT Financial Trust REIT | 115,119 | |||||||||
3,080 | Ramco-Gershenson Properties Trust REIT | 53,808 | |||||||||
7,104 | Redwood Trust, Inc. REIT | 162,113 | |||||||||
1,685 | Renasant Corp. | 38,452 | |||||||||
954 | Republic Bancorp, Inc., Class A | 21,179 | |||||||||
715 | Resource America, Inc., Class A | 6,592 | |||||||||
6,272 | Retail Properties of America, Inc., Class A REIT | 96,024 | |||||||||
1,805 | RLI Corp. | 129,689 | |||||||||
589 | Rouse Properties, Inc. REIT | 11,162 | |||||||||
2,707 | S&T Bancorp, Inc. | 51,081 | |||||||||
952 | S.Y. Bancorp, Inc. | 21,858 | |||||||||
2,649 | Sabra Health Care REIT, Inc. | 78,993 |
See Notes to Financial Statements.
81
Schedule of Investments (Continued)
PowerShares Fundamental Pure Small Value Portfolio (PXSV)
April 30, 2013
Number of Shares | Value | ||||||||||
Common Stocks and Other Equity Interests (Continued) | |||||||||||
1,263 | Safety Insurance Group, Inc. | $ | 62,733 | ||||||||
1,501 | Sandy Spring Bancorp, Inc. | 30,740 | |||||||||
5,120 | Seacoast Banking Corp. of Florida(a) | 10,957 | |||||||||
5,308 | Selective Insurance Group, Inc. | 124,366 | |||||||||
763 | Sierra Bancorp | 9,858 | |||||||||
1,328 | Simmons First National Corp., Class A | 32,563 | |||||||||
1,542 | Southwest Bancorp, Inc.(a) | 20,385 | |||||||||
1,254 | State Auto Financial Corp. | 21,795 | |||||||||
2,328 | State Bank Financial Corp. | 34,245 | |||||||||
1,838 | StellarOne Corp. | 27,552 | |||||||||
2,522 | Sterling Bancorp | 28,448 | |||||||||
1,955 | Sterling Financial Corp. | 42,619 | |||||||||
2,148 | Stewart Information Services Corp. | 58,146 | |||||||||
5,747 | Strategic Hotels & Resorts, Inc. REIT(a) | 46,378 | |||||||||
1,004 | Suffolk Bancorp(a) | 15,703 | |||||||||
8,943 | Sunstone Hotel Investors, Inc. REIT(a) | 110,983 | |||||||||
13,325 | Susquehanna Bancshares, Inc. | 155,503 | |||||||||
5,028 | SWS Group, Inc.(a) | 28,609 | |||||||||
12,393 | Symetra Financial Corp. | 168,917 | |||||||||
672 | Taylor Capital Group, Inc.(a) | 9,845 | |||||||||
669 | Tompkins Financial Corp. | 27,964 | |||||||||
1,859 | TowneBank | 26,602 | |||||||||
1,184 | TriCo Bancshares | 20,684 | |||||||||
9,972 | TrustCo Bank Corp. NY | 53,450 | |||||||||
4,894 | Trustmark Corp. | 120,148 | |||||||||
1,110 | UMH Properties, Inc. REIT | 12,266 | |||||||||
9,537 | Umpqua Holdings Corp. | 114,444 | |||||||||
1,379 | Union First Market Bankshares Corp. | 26,077 | |||||||||
4,061 | United Bankshares, Inc. | 102,784 | |||||||||
2,735 | United Community Banks, Inc.(a) | 29,948 | |||||||||
1,649 | United Fire Group, Inc. | 46,106 | |||||||||
4,214 | Universal Insurance Holdings, Inc. | 25,200 | |||||||||
1,435 | Univest Corp. of Pennsylvania | 25,156 | |||||||||
1,328 | Urstadt Biddle Properties, Inc., Class A REIT | 29,575 | |||||||||
1,264 | Virginia Commerce Bancorp, Inc.(a) | 16,988 | |||||||||
9,315 | Washington Federal, Inc. | 159,939 | |||||||||
955 | Washington Trust Bancorp, Inc. | 25,546 | |||||||||
6,345 | Webster Financial Corp. | 148,283 | |||||||||
2,423 | WesBanco, Inc. | 60,648 | |||||||||
870 | West Bancorporation, Inc. | 9,379 | |||||||||
1,840 | Westamerica Bancorp. | 79,838 | |||||||||
2,856 | Westfield Financial, Inc. | 21,506 | |||||||||
3,458 | Wilshire Bancorp, Inc.(a) | 22,097 | |||||||||
2,214 | Winthrop Realty Trust REIT | 28,140 | |||||||||
2,615 | Wintrust Financial Corp. | 93,774 | |||||||||
528 | WSFS Financial Corp. | 25,840 | |||||||||
11,255,411 | |||||||||||
Health Care—3.7% | |||||||||||
6,902 | Affymetrix, Inc.(a) | 25,123 | |||||||||
1,525 | Albany Molecular Research, Inc.(a) | 18,193 |
Number of Shares | Value | ||||||||||
Common Stocks and Other Equity Interests (Continued) | |||||||||||
8,108 | Amedisys, Inc.(a) | $ | 81,404 | ||||||||
3,035 | AMN Healthcare Services, Inc.(a) | 41,671 | |||||||||
3,003 | AmSurg Corp.(a) | 100,781 | |||||||||
1,812 | Assisted Living Concepts, Inc., Class A | 21,599 | |||||||||
7,003 | Cambrex Corp.(a) | 87,467 | |||||||||
2,634 | Charles River Laboratories International, Inc.(a) | 114,553 | |||||||||
2,127 | CONMED Corp. | 66,639 | |||||||||
4,584 | Cross Country Healthcare, Inc.(a) | 22,920 | |||||||||
488 | Cutera, Inc.(a) | 5,422 | |||||||||
2,716 | Enzon Pharmaceuticals, Inc. | 8,963 | |||||||||
7,313 | Five Star Quality Care, Inc.(a) | 34,591 | |||||||||
5,921 | Gentiva Health Services, Inc.(a) | 62,111 | |||||||||
4,818 | Geron Corp.(a) | 5,637 | |||||||||
4,302 | Healthways, Inc.(a) | 59,755 | |||||||||
4,183 | Hill-Rom Holdings, Inc. | 142,515 | |||||||||
5,050 | Invacare Corp. | 67,923 | |||||||||
2,987 | Magellan Health Services, Inc.(a) | 152,815 | |||||||||
565 | National Healthcare Corp. | 26,233 | |||||||||
806 | Palomar Medical Technologies, Inc.(a) | 10,921 | |||||||||
4,851 | PerkinElmer, Inc. | 148,683 | |||||||||
6,049 | PharMerica Corp.(a) | 77,972 | |||||||||
1,987 | Providence Service Corp. (The)(a) | 34,792 | |||||||||
3,958 | Skilled Healthcare Group, Inc., Class A(a) | 27,864 | |||||||||
3,404 | STERIS Corp. | 141,572 | |||||||||
574 | SurModics, Inc.(a) | 15,182 | |||||||||
3,133 | Symmetry Medical, Inc.(a) | 37,345 | |||||||||
7,187 | Universal American Corp. | 61,449 | |||||||||
4,303 | Vanguard Health Systems, Inc.(a) | 62,953 | |||||||||
1,765,048 | |||||||||||
Industrials—19.7% | |||||||||||
5,831 | ABM Industries, Inc. | 131,489 | |||||||||
9,220 | ACCO Brands Corp.(a) | 62,235 | |||||||||
8,909 | Accuride Corp.(a) | 45,792 | |||||||||
1,726 | Aceto Corp. | 17,950 | |||||||||
1,715 | Acuity Brands, Inc. | 125,126 | |||||||||
5,058 | Air Transport Services Group, Inc.(a) | 29,185 | |||||||||
11,496 | Aircastle Ltd. (Bermuda) | 160,484 | |||||||||
459 | Alamo Group, Inc. | 18,392 | |||||||||
2,025 | Albany International Corp., Class A | 58,826 | |||||||||
328 | AMERCO | 52,710 | |||||||||
311 | American Railcar Industries, Inc. | 11,106 | |||||||||
466 | American Woodmark Corp.(a) | 15,681 | |||||||||
746 | Ampco-Pittsburgh Corp. | 13,980 | |||||||||
1,601 | Apogee Enterprises, Inc. | 40,793 | |||||||||
5,935 | Arkansas Best Corp. | 62,377 | |||||||||
3,104 | Armstrong World Industries, Inc.(a) | 158,428 | |||||||||
1,511 | Astec Industries, Inc. | 49,606 | |||||||||
674 | AT Cross Co., Class A(a) | 8,506 | |||||||||
2,854 | Atlas Air Worldwide Holdings, Inc.(a) | 106,740 | |||||||||
3,169 | Barnes Group, Inc. | 88,003 |
See Notes to Financial Statements.
82
Schedule of Investments (Continued)
PowerShares Fundamental Pure Small Value Portfolio (PXSV)
April 30, 2013
Number of Shares | Value | ||||||||||
Common Stocks and Other Equity Interests (Continued) | |||||||||||
1,961 | Belden, Inc. | $ | 96,913 | ||||||||
3,197 | BlueLinx Holdings, Inc.(a) | 9,303 | |||||||||
3,627 | Brady Corp., Class A | 122,883 | |||||||||
5,100 | Briggs & Stratton Corp. | 114,699 | |||||||||
5,437 | Brink's Co. (The) | 144,135 | |||||||||
2,547 | Builders FirstSource, Inc.(a) | 15,766 | |||||||||
7,951 | Casella Waste Systems, Inc., Class A(a) | 34,666 | |||||||||
5,808 | CBIZ, Inc.(a) | 37,694 | |||||||||
1,640 | CDI Corp. | 25,699 | |||||||||
1,558 | Celadon Group, Inc. | 26,159 | |||||||||
27,295 | Cenveo, Inc.(a)(b) | 55,682 | |||||||||
969 | CIRCOR International, Inc. | 45,863 | |||||||||
949 | Coleman Cable, Inc. | 14,235 | |||||||||
1,620 | Columbus McKinnon Corp.(a) | 30,424 | |||||||||
3,996 | Comfort Systems USA, Inc. | 51,269 | |||||||||
2,629 | Commercial Vehicle Group, Inc.(a) | 18,429 | |||||||||
1,432 | Consolidated Graphics, Inc.(a) | 51,079 | |||||||||
1,174 | Corporate Executive Board Co. (The) | 66,167 | |||||||||
8,504 | Covanta Holding Corp. | 170,080 | |||||||||
1,220 | CRA International, Inc.(a) | 22,497 | |||||||||
2,716 | Crane Co. | 146,202 | |||||||||
3,576 | Curtiss-Wright Corp. | 117,436 | |||||||||
3,531 | Deluxe Corp. | 134,672 | |||||||||
1,922 | DigitalGlobe, Inc.(a) | 56,103 | |||||||||
1,458 | Ducommun, Inc.(a) | 35,706 | |||||||||
3,190 | Dycom Industries, Inc.(a) | 61,631 | |||||||||
1,365 | Encore Wire Corp. | 44,704 | |||||||||
16,880 | EnergySolutions, Inc.(a) | 69,714 | |||||||||
3,052 | Ennis, Inc. | 46,909 | |||||||||
1,382 | EnPro Industries, Inc.(a) | 68,105 | |||||||||
5,274 | Federal Signal Corp.(a) | 40,926 | |||||||||
593 | Franklin Covey Co.(a) | 8,349 | |||||||||
1,060 | FreightCar America, Inc. | 22,133 | |||||||||
4,066 | FTI Consulting, Inc.(a) | 134,666 | |||||||||
1,374 | G&K Services, Inc., Class A | 64,564 | |||||||||
2,665 | Gibraltar Industries, Inc.(a) | 49,835 | |||||||||
1,935 | Global Power Equipment Group, Inc. | 31,927 | |||||||||
18,075 | GrafTech International Ltd.(a)(b) | 129,779 | |||||||||
3,677 | Granite Construction, Inc. | 101,743 | |||||||||
2,266 | Greenbrier Cos., Inc.(a) | 51,121 | |||||||||
5,525 | Griffon Corp. | 56,908 | |||||||||
2,768 | H&E Equipment Services, Inc. | 56,356 | |||||||||
11,515 | Hawaiian Holdings, Inc.(a) | 63,217 | |||||||||
4,288 | Heartland Express, Inc. | 58,188 | |||||||||
2,310 | Heidrick & Struggles International, Inc. | 30,538 | |||||||||
3,122 | Herman Miller, Inc. | 78,331 | |||||||||
3,626 | HNI Corp. | 124,843 | |||||||||
1,592 | Houston Wire & Cable Co. | 21,683 | |||||||||
1,840 | Hudson Global, Inc.(a) | 6,072 | |||||||||
502 | Hurco Cos., Inc.(a) | 13,469 | |||||||||
2,176 | Insperity, Inc. | 60,123 |
Number of Shares | Value | ||||||||||
Common Stocks and Other Equity Interests (Continued) | |||||||||||
1,127 | Insteel Industries, Inc. | $ | 18,686 | ||||||||
1,057 | Intersections, Inc. | 10,105 | |||||||||
2,040 | John Bean Technologies Corp. | 42,310 | |||||||||
967 | Kadant, Inc. | 26,757 | |||||||||
2,465 | Kaydon Corp. | 58,766 | |||||||||
6,436 | Kelly Services, Inc., Class A | 109,541 | |||||||||
4,630 | Kennametal, Inc. | 185,154 | |||||||||
2,646 | Kforce, Inc. | 40,008 | |||||||||
5,252 | Kimball International, Inc., Class B | 48,266 | |||||||||
3,973 | Knight Transportation, Inc. | 62,058 | |||||||||
3,146 | Knoll, Inc. | 48,952 | |||||||||
3,658 | Korn/Ferry International(a) | 60,540 | |||||||||
3,132 | Layne Christensen Co.(a) | 63,987 | |||||||||
2,390 | Lennox International, Inc. | 148,180 | |||||||||
1,819 | LSI Industries, Inc. | 12,806 | |||||||||
1,224 | Lydall, Inc.(a) | 17,552 | |||||||||
8,882 | Manitowoc Co., Inc. (The) | 166,626 | |||||||||
6,066 | Matson, Inc. | 142,794 | |||||||||
1,764 | McGrath RentCorp | 54,790 | |||||||||
31,765 | Meritor, Inc.(a) | 184,237 | |||||||||
964 | Met-Pro Corp. | 12,918 | |||||||||
1,121 | Michael Baker Corp. | 27,296 | |||||||||
1,001 | Miller Industries, Inc. | 15,125 | |||||||||
1,639 | Mine Safety Appliances Co. | 78,672 | |||||||||
2,251 | Mobile Mini, Inc.(a) | 63,321 | |||||||||
3,385 | Moog, Inc., Class A(a) | 156,421 | |||||||||
4,181 | MRC Global, Inc.(a) | 125,221 | |||||||||
2,142 | Mueller Industries, Inc. | 110,913 | |||||||||
13,323 | Mueller Water Products, Inc., Class A | 78,872 | |||||||||
1,583 | MYR Group, Inc.(a) | 36,092 | |||||||||
724 | National Presto Industries, Inc.(b) | 54,300 | |||||||||
5,058 | Navigant Consulting, Inc.(a) | 62,365 | |||||||||
3,053 | NCI Building Systems, Inc.(a) | 52,267 | |||||||||
469 | NL Industries, Inc. | 5,286 | |||||||||
1,838 | NN, Inc.(a) | 16,560 | |||||||||
834 | Nortek, Inc.(a) | 59,931 | |||||||||
1,149 | Northwest Pipe Co.(a) | 31,356 | |||||||||
5,516 | Orbital Sciences Corp.(a) | 99,398 | |||||||||
2,572 | Orion Marine Group, Inc.(a) | 23,560 | |||||||||
1,162 | Park-Ohio Holdings Corp.(a) | 42,738 | |||||||||
410 | Patriot Transportation Holding, Inc.(a) | 11,870 | |||||||||
1,601 | Pike Electric Corp. | 25,024 | |||||||||
533 | Powell Industries, Inc.(a) | 26,245 | |||||||||
952 | PowerSecure International, Inc.(a) | 13,042 | |||||||||
3,340 | Quad/Graphics, Inc.(b) | 69,806 | |||||||||
3,668 | Quality Distribution, Inc.(a) | 29,197 | |||||||||
2,791 | Quanex Building Products Corp. | 45,410 | |||||||||
12,862 | Republic Airways Holdings, Inc.(a) | 143,926 | |||||||||
3,741 | Resources Connection, Inc. | 42,498 | |||||||||
1,640 | Rexnord Corp.(a) | 29,881 | |||||||||
3,519 | Rush Enterprises, Inc., Class A(a) | 80,550 |
See Notes to Financial Statements.
83
Schedule of Investments (Continued)
PowerShares Fundamental Pure Small Value Portfolio (PXSV)
April 30, 2013
Number of Shares | Value | ||||||||||
Common Stocks and Other Equity Interests (Continued) | |||||||||||
1,530 | Saia, Inc.(a) | $ | 62,608 | ||||||||
1,065 | Schawk, Inc. | 10,842 | |||||||||
2,143 | Simpson Manufacturing Co., Inc. | 61,590 | |||||||||
12,084 | SkyWest, Inc. | 172,922 | |||||||||
14,470 | Southwest Airlines Co. | 198,239 | |||||||||
542 | Sparton Corp.(a) | 7,528 | |||||||||
1,015 | Standard Parking Corp.(a) | 21,812 | |||||||||
679 | Standex International Corp. | 35,919 | |||||||||
8,240 | Steelcase, Inc., Class A | 104,648 | |||||||||
1,617 | Sterling Construction Co., Inc.(a) | 16,364 | |||||||||
2,276 | TMS International Corp., Class A | 32,865 | |||||||||
2,132 | Toro Co. (The) | 95,961 | |||||||||
287 | Trex Co., Inc.(a) | 13,971 | |||||||||
1,810 | Trimas Corp.(a) | 55,205 | |||||||||
3,024 | TrueBlue, Inc.(a) | 62,657 | |||||||||
10,862 | Tutor Perini Corp.(a) | 178,571 | |||||||||
697 | Twin Disc, Inc. | 14,860 | |||||||||
4,401 | United Stationers, Inc. | 142,900 | |||||||||
1,799 | Universal Forest Products, Inc. | 69,441 | |||||||||
4,145 | USG Corp.(a) | 107,729 | |||||||||
10,194 | UTi Worldwide, Inc. (British Virgin Islands) | 149,750 | |||||||||
1,636 | Viad Corp. | 42,618 | |||||||||
2,122 | Vicor Corp.(a) | 11,395 | |||||||||
2,731 | Wabash National Corp.(a) | 25,753 | |||||||||
1,601 | Watts Water Technologies, Inc., Class A | 75,343 | |||||||||
5,460 | Werner Enterprises, Inc. | 125,362 | |||||||||
9,466,033 | |||||||||||
Information Technology—11.2% | |||||||||||
4,640 | Acxiom Corp.(a) | 92,290 | |||||||||
1,786 | Advanced Energy Industries, Inc.(a) | 30,326 | |||||||||
1,504 | Aeroflex Holding Corp.(a) | 11,190 | |||||||||
1,183 | Agilysys, Inc.(a) | 13,817 | |||||||||
1,657 | American Software, Inc., Class A | 13,770 | |||||||||
22,231 | Amkor Technology, Inc.(a)(b) | 94,037 | |||||||||
7,058 | ANADIGICS, Inc.(a) | 14,822 | |||||||||
834 | Anaren, Inc.(a) | 19,524 | |||||||||
1,827 | Applied Micro Circuits Corp.(a) | 13,629 | |||||||||
5,803 | ARRIS Group, Inc.(a) | 95,808 | |||||||||
1,727 | ATMI, Inc.(a) | 37,562 | |||||||||
7,536 | Aviat Networks, Inc.(a) | 24,115 | |||||||||
5,362 | Avid Technology, Inc.(a) | 35,336 | |||||||||
4,146 | AVX Corp. | 46,891 | |||||||||
1,024 | Bel Fuse, Inc., Class B | 15,073 | |||||||||
8,293 | Benchmark Electronics, Inc.(a) | 147,947 | |||||||||
2,152 | Black Box Corp. | 46,741 | |||||||||
7,446 | Broadridge Financial Solutions, Inc. | 187,490 | |||||||||
3,495 | CACI International, Inc., Class A(a) | 204,423 | |||||||||
5,279 | Cadence Design Systems, Inc.(a) | 72,850 | |||||||||
4,826 | Checkpoint Systems, Inc.(a) | 55,837 | |||||||||
7,353 | CIBER, Inc.(a) | 31,324 |
Number of Shares | Value | ||||||||||
Common Stocks and Other Equity Interests (Continued) | |||||||||||
2,119 | Cohu, Inc. | $ | 20,279 | ||||||||
9,697 | Compuware Corp.(a) | 116,364 | |||||||||
10,443 | Convergys Corp. | 177,740 | |||||||||
2,597 | CSG Systems International, Inc.(a) | 56,121 | |||||||||
3,229 | CTS Corp. | 34,389 | |||||||||
2,455 | Cypress Semiconductor Corp.(a) | 24,771 | |||||||||
2,757 | Daktronics, Inc. | 27,542 | |||||||||
2,225 | Digi International, Inc.(a) | 20,292 | |||||||||
3,228 | Digital River, Inc.(a) | 46,741 | |||||||||
18,141 | EarthLink, Inc. | 103,222 | |||||||||
1,511 | Electro Rent Corp. | 25,037 | |||||||||
2,120 | Electro Scientific Industries, Inc. | 22,854 | |||||||||
2,016 | Electronics for Imaging, Inc.(a) | 53,868 | |||||||||
1,592 | EMCORE Corp.(a) | 6,957 | |||||||||
7,993 | Emulex Corp.(a) | 47,958 | |||||||||
5,774 | Entegris, Inc.(a) | 54,738 | |||||||||
423 | ePlus, Inc. | 19,238 | |||||||||
4,425 | Extreme Networks, Inc.(a) | 14,735 | |||||||||
1,285 | Fair Isaac Corp. | 59,855 | |||||||||
10,899 | Fairchild Semiconductor International, Inc.(a) | 140,597 | |||||||||
4,739 | FormFactor, Inc.(a) | 23,458 | |||||||||
3,721 | Freescale Semiconductor Ltd. (Bermuda)(a) | 57,601 | |||||||||
4,971 | Global Cash Access Holdings, Inc.(a) | 35,443 | |||||||||
2,264 | GSI Group, Inc. (Canada)(a) | 19,335 | |||||||||
8,774 | Integrated Device Technology, Inc.(a) | 62,383 | |||||||||
5,059 | Intermec, Inc.(a) | 49,781 | |||||||||
5,269 | International Rectifier Corp.(a) | 111,756 | |||||||||
15,777 | Intersil Corp., Class A | 122,430 | |||||||||
1,688 | IXYS Corp. | 15,293 | |||||||||
7,351 | Kemet Corp.(a) | 45,797 | |||||||||
6,687 | Lender Processing Services, Inc. | 185,497 | |||||||||
4,347 | Lionbridge Technologies, Inc.(a) | 14,867 | |||||||||
23,917 | LSI Corp.(a) | 156,417 | |||||||||
29,716 | MEMC Electronic Materials, Inc.(a) | 160,466 | |||||||||
3,061 | Mercury Systems, Inc.(a) | 23,662 | |||||||||
2,469 | Methode Electronics, Inc. | 35,504 | |||||||||
522 | MoneyGram International, Inc.(a) | 8,618 | |||||||||
22,090 | Monster Worldwide, Inc.(a) | 96,754 | |||||||||
1,411 | Multi-Fineline Electronix, Inc.(a) | 21,504 | |||||||||
2,359 | Newport Corp.(a) | 35,739 | |||||||||
1,458 | Park Electrochemical Corp. | 34,802 | |||||||||
2,473 | Pericom Semiconductor Corp.(a) | 15,976 | |||||||||
8,909 | Photronics, Inc.(a) | 70,292 | |||||||||
4,314 | Plexus Corp.(a) | 116,349 | |||||||||
1,245 | PLX Technology, Inc.(a) | 5,814 | |||||||||
1,877 | PRGX Global, Inc.(a) | 10,492 | |||||||||
7,431 | QLogic Corp.(a) | 80,701 | |||||||||
28,544 | Quantum Corp.(a) | 40,818 | |||||||||
2,289 | RealNetworks, Inc.(a) | 17,625 | |||||||||
16,514 | RF Micro Devices, Inc.(a) | 92,644 | |||||||||
1,117 | Richardson Electronics Ltd. | 13,102 |
See Notes to Financial Statements.
84
Schedule of Investments (Continued)
PowerShares Fundamental Pure Small Value Portfolio (PXSV)
April 30, 2013
Number of Shares | Value | ||||||||||
Common Stocks and Other Equity Interests (Continued) | |||||||||||
1,788 | Rofin-Sinar Technologies, Inc.(a) | $ | 44,521 | ||||||||
723 | Rogers Corp.(a) | 30,829 | |||||||||
1,404 | Rudolph Technologies, Inc.(a) | 16,385 | |||||||||
3,605 | ScanSource, Inc.(a) | 104,437 | |||||||||
4,507 | Sigma Designs, Inc.(a) | 21,453 | |||||||||
3,996 | Silicon Image, Inc.(a) | 19,700 | |||||||||
11,588 | Sonus Networks, Inc.(a) | 24,335 | |||||||||
5,689 | Spansion, Inc., Class A(a) | 73,900 | |||||||||
4,920 | STEC, Inc.(a) | 17,860 | |||||||||
3,657 | SunPower Corp.(a)(b) | 49,699 | |||||||||
507 | Supertex, Inc. | 10,688 | |||||||||
3,943 | Symmetricom, Inc.(a) | 20,504 | |||||||||
4,501 | Take-Two Interactive Software, Inc.(a) | 68,685 | |||||||||
1,788 | TeleTech Holdings, Inc.(a) | 38,067 | |||||||||
51,664 | Tellabs, Inc. | 106,944 | |||||||||
8,651 | Teradyne, Inc.(a) | 142,222 | |||||||||
3,504 | Tessera Technologies, Inc. | 71,376 | |||||||||
2,276 | Ultra Clean Holdings, Inc.(a) | 14,248 | |||||||||
16,051 | United Online, Inc. | 109,147 | |||||||||
10,851 | Unwired Planet, Inc.(a) | 21,485 | |||||||||
2,193 | ValueClick, Inc.(a) | 67,676 | |||||||||
290 | Viasystems Group, Inc.(a) | 3,689 | |||||||||
955 | Vishay Precision Group, Inc.(a) | 13,685 | |||||||||
1,286 | XO Group, Inc.(a) | 14,480 | |||||||||
2,112 | Zebra Technologies Corp., Class A(a) | 98,525 | |||||||||
664 | Zygo Corp.(a) | 9,933 | |||||||||
5,373,493 | |||||||||||
Materials—5.2% | |||||||||||
2,771 | A. Schulman, Inc. | 71,963 | |||||||||
2,423 | A.M. Castle & Co.(a) | 41,966 | |||||||||
364 | AEP Industries, Inc.(a) | 28,064 | |||||||||
1,745 | AMCOL International Corp. | 53,694 | |||||||||
489 | American Pacific Corp.(a) | 11,985 | |||||||||
11,732 | Boise, Inc. | 93,739 | |||||||||
2,460 | Carpenter Technology Corp. | 110,602 | |||||||||
8,945 | Century Aluminum Co.(a) | 72,991 | |||||||||
7,757 | Chemtura Corp.(a) | 164,914 | |||||||||
14,642 | Ferro Corp.(a) | 103,080 | |||||||||
2,914 | Greif, Inc., Class A | 140,367 | |||||||||
2,226 | H.B. Fuller Co. | 84,365 | |||||||||
4,807 | Headwaters, Inc.(a) | 52,204 | |||||||||
3,854 | Horsehead Holding Corp.(a) | 41,238 | |||||||||
3,917 | Louisiana-Pacific Corp.(a) | 70,976 | |||||||||
2,304 | Materion Corp. | 61,033 | |||||||||
1,828 | Minerals Technologies, Inc. | 74,272 | |||||||||
2,772 | Myers Industries, Inc. | 41,081 | |||||||||
1,290 | Neenah Paper, Inc. | 37,100 | |||||||||
8,660 | Noranda Aluminum Holding Corp. | 32,995 | |||||||||
6,995 | Olin Corp. | 169,069 | |||||||||
1,555 | Olympic Steel, Inc. | 31,100 |
Number of Shares | Value | ||||||||||
Common Stocks and Other Equity Interests (Continued) | |||||||||||
5,087 | OM Group, Inc.(a) | $ | 124,479 | ||||||||
4,477 | P.H. Glatfelter Co. | 107,448 | |||||||||
1,992 | RTI International Metals, Inc.(a) | 57,808 | |||||||||
4,132 | Schnitzer Steel Industries, Inc., Class A | 101,358 | |||||||||
3,475 | Sensient Technologies Corp. | 136,741 | |||||||||
5,853 | SunCoke Energy, Inc.(a) | 88,556 | |||||||||
687 | Texas Industries, Inc.(a)(b) | 43,748 | |||||||||
1,499 | Tredegar Corp. | 44,370 | |||||||||
531 | Universal Stainless & Alloy Products, Inc.(a) | 18,564 | |||||||||
1,872 | US Concrete, Inc.(a) | 29,091 | |||||||||
4,732 | Wausau Paper Corp. | 48,172 | |||||||||
3,571 | Worthington Industries, Inc. | 114,915 | |||||||||
2,504,048 | |||||||||||
Telecommunication Services—1.5% | |||||||||||
3,769 | Cbeyond, Inc.(a) | 33,092 | |||||||||
40,712 | Cincinnati Bell, Inc.(a) | 143,306 | |||||||||
4,178 | Consolidated Communications Holdings, Inc. | 77,001 | |||||||||
5,687 | Fairpoint Communications, Inc.(a)(b) | 46,292 | |||||||||
4,198 | General Communication, Inc., Class A(a) | 40,763 | |||||||||
667 | Hawaiian Telcom Holdco, Inc.(a) | 16,121 | |||||||||
22,289 | Leap Wireless International, Inc.(a)(b) | 127,493 | |||||||||
4,304 | NTELOS Holdings Corp. | 63,355 | |||||||||
3,715 | Premiere Global Services, Inc.(a) | 41,719 | |||||||||
2,095 | United States Cellular Corp.(a) | 80,532 | |||||||||
5,133 | USA Mobility, Inc. | 69,655 | |||||||||
739,329 | |||||||||||
Utilities—5.1% | |||||||||||
2,882 | ALLETE, Inc. | 147,991 | |||||||||
6,168 | Avista Corp. | 173,012 | |||||||||
3,517 | Black Hills Corp. | 164,912 | |||||||||
3,035 | California Water Service Group | 60,852 | |||||||||
1,411 | CH Energy Group, Inc. | 91,673 | |||||||||
4,656 | Empire District Electric Co. (The) | 107,414 | |||||||||
3,733 | IDACORP, Inc. | 183,701 | |||||||||
2,662 | Laclede Group, Inc. (The) | 124,342 | |||||||||
1,518 | MGE Energy, Inc. | 84,780 | |||||||||
1,130 | Middlesex Water Co. | 22,159 | |||||||||
3,768 | New Jersey Resources Corp. | 177,850 | |||||||||
2,685 | Northwest Natural Gas Co. | 119,402 | |||||||||
3,516 | NorthWestern Corp. | 151,258 | |||||||||
3,061 | Otter Tail Corp. | 95,503 | |||||||||
5,747 | Piedmont Natural Gas Co., Inc. | 197,869 | |||||||||
1,125 | SJW Corp. | 28,530 | |||||||||
1,844 | South Jersey Industries, Inc. | 113,775 | |||||||||
3,952 | Southwest Gas Corp. | 200,248 | |||||||||
1,143 | Unitil Corp. | 34,644 | |||||||||
3,226 | UNS Energy Corp. | 164,397 | |||||||||
2,444,312 | |||||||||||
Total Common Stocks and Other Equity Interests (Cost $44,761,185) | 48,079,007 |
See Notes to Financial Statements.
85
Schedule of Investments (Continued)
PowerShares Fundamental Pure Small Value Portfolio (PXSV)
April 30, 2013
Number of Shares | Value | ||||||||||
Money Market Fund—0.2% | |||||||||||
102,943 | Goldman Sachs Financial Square Prime Obligations—Institutional Share Class (Cost $102,943) | $ | 102,943 | ||||||||
Total Investments (excluding investments purchased with cash collateral from securities on loan) (Cost $44,864,128)—100.2% | 48,181,950 | ||||||||||
Investments Purchased with Cash Collateral from Securities on Loan | |||||||||||
Money Market Fund—3.9% | |||||||||||
1,866,896 | Invesco Liquid Assets Portfolio—Institutional Class (Cost $1,866,896)(c)(d) | 1,866,896 | |||||||||
Total Investments (Cost $46,731,024)—104.1% | 50,048,846 | ||||||||||
Liabilities in excess of other assets—(4.1)% | (1,964,801 | ) | |||||||||
Net Assets—100.0% | $ | 48,084,045 |
Investment Abbreviations:
REIT—Real Estate Investment Trust
Notes to Schedule of Investments:
(a) Non-income producing security.
(b) All or a portion of this security was out on loan at April 30, 2013.
(c) The security has been segregated to satisfy the commitment to return the cash collateral received in securities lending transactions upon the borrower's return of the securities loaned. See Note 2H.
(d) The security and the Fund are advised by wholly owned subsidiaries of Invesco Ltd. and are therefore considered to be affiliated.
See Notes to Financial Statements.
86
Schedule of Investments
PowerShares Zacks Micro Cap Portfolio (PZI)
April 30, 2013
Number of Shares | Value | ||||||||||
Common Stocks and Other Equity Interests—100.0% | |||||||||||
Consumer Discretionary—13.4% | |||||||||||
17,917 | AH Belo Corp., Class A | $ | 103,919 | ||||||||
6,558 | Bassett Furniture Industries, Inc. | 92,009 | |||||||||
6,609 | Beazer Homes USA, Inc.(a)(b) | 106,801 | |||||||||
6,702 | Big 5 Sporting Goods Corp. | 112,594 | |||||||||
8,050 | Bon-Ton Stores, Inc. (The) | 123,487 | |||||||||
6,536 | Brown Shoe Co., Inc. | 110,524 | |||||||||
15,806 | Callaway Golf Co. | 105,900 | |||||||||
5,773 | Carmike Cinemas, Inc.(b) | 101,374 | |||||||||
2,040 | Core-Mark Holding Co., Inc. | 106,162 | |||||||||
49,828 | Corinthian Colleges, Inc.(a)(b) | 99,656 | |||||||||
4,029 | CSS Industries, Inc. | 115,471 | |||||||||
20,560 | Destination XL Group, Inc.(b) | 102,389 | |||||||||
16,269 | Digital Generation, Inc.(b) | 109,002 | |||||||||
8,696 | E.W. Scripps Co. (The), Class A(b) | 120,787 | |||||||||
14,065 | Entercom Communications Corp., Class A(b) | 111,254 | |||||||||
38,752 | Exide Technologies(b) | 32,827 | |||||||||
4,228 | Flexsteel Industries, Inc. | 87,054 | |||||||||
7,646 | Fred's, Inc., Class A | 108,803 | |||||||||
2,608 | G-III Apparel Group Ltd.(b) | 106,041 | |||||||||
22,198 | Gray Television, Inc.(b) | 140,957 | |||||||||
5,064 | Haverty Furniture Cos., Inc. | 120,422 | |||||||||
9,420 | hhgregg, Inc.(b) | 127,264 | |||||||||
6,565 | Hooker Furniture Corp. | 113,509 | |||||||||
4,390 | Johnson Outdoors, Inc., Class A(b) | 102,989 | |||||||||
12,222 | LeapFrog Enterprises, Inc.(a)(b) | 109,265 | |||||||||
13,991 | Luby's, Inc.(b) | 95,279 | |||||||||
4,279 | M/I Homes, Inc.(b) | 105,263 | |||||||||
8,376 | Marcus Corp. | 107,548 | |||||||||
11,495 | Modine Manufacturing Co.(b) | 105,064 | |||||||||
3,119 | Movado Group, Inc. | 94,319 | |||||||||
4,997 | Multimedia Games Holding Co., Inc.(b) | 123,226 | |||||||||
8,493 | Overstock.com, Inc.(b) | 176,654 | |||||||||
5,754 | Perry Ellis International, Inc. | 101,098 | |||||||||
6,995 | ReachLocal, Inc.(b) | 116,607 | |||||||||
18,682 | Reading International, Inc., Class A(b) | 108,729 | |||||||||
2,284 | Red Robin Gourmet Burgers, Inc.(b) | 110,477 | |||||||||
7,688 | Rocky Brands, Inc.(b) | 113,782 | |||||||||
14,126 | Ruby Tuesday, Inc.(b) | 136,175 | |||||||||
10,968 | Ruth's Hospitality Group, Inc.(b) | 108,693 | |||||||||
5,122 | Shoe Carnival, Inc. | 106,691 | |||||||||
11,629 | Smith & Wesson Holding Corp.(a)(b) | 102,103 | |||||||||
27,245 | SORL Auto Parts, Inc.(a)(b) | 78,466 | |||||||||
5,817 | Speedway Motorsports, Inc. | 104,880 | |||||||||
4,022 | Stage Stores, Inc. | 111,369 | |||||||||
3,775 | Standard Motor Products, Inc. | 115,666 | |||||||||
11,265 | Stewart Enterprises, Inc., Class A | 100,371 | |||||||||
5,599 | Superior Industries International, Inc. | 102,798 | |||||||||
10,911 | TravelCenters of America LLC(b) | 125,695 | |||||||||
13,480 | Tuesday Morning Corp.(b) | 109,323 | |||||||||
5,451 | Unifi, Inc.(b) | 106,294 |
Number of Shares | Value | ||||||||||
Common Stocks and Other Equity Interests (Continued) | |||||||||||
5,071 | Winnebago Industries, Inc.(b) | $ | 92,901 | ||||||||
26,621 | Zale Corp.(b) | 118,197 | |||||||||
5,648,128 | |||||||||||
Consumer Staples—2.9% | |||||||||||
11,652 | Boulder Brands, Inc.(b) | 104,984 | |||||||||
12,661 | Central Garden & Pet Co., Class A(b) | 111,417 | |||||||||
13,480 | Chiquita Brands International, Inc.(b) | 116,332 | |||||||||
10,341 | Cott Corp. (Canada) | 113,234 | |||||||||
5,208 | John B. Sanfilippo & Son, Inc. | 109,264 | |||||||||
6,029 | Nutraceutical International Corp. | 111,356 | |||||||||
9,733 | Omega Protein Corp.(b) | 90,614 | |||||||||
8,388 | Pantry, Inc. (The)(b) | 122,549 | |||||||||
15,927 | Roundy's, Inc. | 114,037 | |||||||||
3,168 | Seneca Foods Corp., Class A(b) | 103,245 | |||||||||
5,961 | Spartan Stores, Inc. | 100,026 | |||||||||
1,197,058 | |||||||||||
Energy—5.7% | |||||||||||
2,043 | Adams Resources & Energy, Inc. | 101,517 | |||||||||
28,278 | Callon Petroleum Co.(b) | 101,235 | |||||||||
12,638 | Capital Product Partners LP (Marshall Islands) | 112,478 | |||||||||
5,285 | Compressco Partners, LP | 125,255 | |||||||||
6,440 | Comstock Resources, Inc.(b) | 100,851 | |||||||||
5,435 | Crosstex Energy, Inc. | 100,058 | |||||||||
9,104 | Green Plains Renewable Energy, Inc.(b) | 113,891 | |||||||||
29,811 | Harvest Natural Resources, Inc.(b) | 97,780 | |||||||||
12,761 | Knightsbridge Tankers Ltd. (Bermuda) | 87,413 | |||||||||
7,020 | Matrix Service Co.(b) | 105,511 | |||||||||
5,259 | Memorial Production Partners LP | 101,288 | |||||||||
9,058 | Nordic American Tankers Ltd. (Bermuda) | 80,707 | |||||||||
24,445 | Parker Drilling Co.(b) | 100,713 | |||||||||
25,901 | Penn Virginia Corp. | 104,381 | |||||||||
3,056 | PHI, Inc.(b) | 84,865 | |||||||||
12,686 | Pioneer Energy Services Corp.(b) | 89,436 | |||||||||
2,642 | Rose Rock Midstream LP | 104,042 | |||||||||
8,728 | StealthGas, Inc. (Greece)(b) | 90,248 | |||||||||
7,065 | Swift Energy Co.(b) | 91,421 | |||||||||
15,252 | Synergy Resources Corp.(b) | 102,951 | |||||||||
36,712 | Teekay Tankers Ltd., Class A (Marshall Islands)(a) | 92,881 | |||||||||
7,814 | Tesco Corp. (Canada)(b) | 95,331 | |||||||||
2,060 | TransMontaigne Partners LP | 98,674 | |||||||||
10,608 | Willbros Group, Inc.(b) | 100,776 | |||||||||
2,383,703 | |||||||||||
Financials—34.9% | |||||||||||
4,106 | AG Mortgage Investment Trust, Inc. REIT | 106,222 | |||||||||
3,459 | Agree Realty Corp. REIT | 104,012 | |||||||||
14,695 | America First Tax Exempt Investors LP | 105,069 | |||||||||
7,025 | American Equity Investment Life Holding Co. | 107,061 |
See Notes to Financial Statements.
87
Schedule of Investments (Continued)
PowerShares Zacks Micro Cap Portfolio (PZI)
April 30, 2013
Number of Shares | Value | ||||||||||
Common Stocks and Other Equity Interests (Continued) | |||||||||||
4,168 | American Safety Insurance Holdings Ltd. (Bermuda)(b) | $ | 100,365 | ||||||||
2,927 | AMERISAFE, Inc. | 95,596 | |||||||||
5,949 | Apollo Commercial Real Estate Finance, Inc. REIT | 105,535 | |||||||||
4,696 | Apollo Residential Mortgage, Inc. REIT | 104,533 | |||||||||
13,344 | Arbor Realty Trust, Inc. REIT | 103,016 | |||||||||
4,051 | Arlington Asset Investment Corp., Class A | 109,742 | |||||||||
8,469 | Ashford Hospitality Trust, Inc. REIT | 109,081 | |||||||||
10,901 | ASTA Funding, Inc. | 102,360 | |||||||||
7,852 | AV Homes, Inc.(b) | 101,369 | |||||||||
4,207 | Banco Latinoamericano de Comercio Exterior SA (Supranational) | 95,457 | |||||||||
7,556 | Bancorp, Inc. (The)(b) | 98,228 | |||||||||
18,920 | Bank Mutual Corp. | 98,006 | |||||||||
12,936 | BankFinancial Corp. | 102,065 | |||||||||
3,287 | Banner Corp. | 107,386 | |||||||||
12,686 | BBX Capital Corp., Class A(b) | 152,232 | |||||||||
4,096 | Berkshire Hills Bancorp, Inc. | 105,923 | |||||||||
10,465 | BlackRock Kelso Capital Corp. | 104,127 | |||||||||
2,900 | BofI Holding, Inc.(b) | 118,262 | |||||||||
10,592 | Boston Private Financial Holdings, Inc. | 102,107 | |||||||||
11,450 | Brookline Bancorp, Inc. | 96,180 | |||||||||
7,575 | BSB Bancorp, Inc.(b) | 104,156 | |||||||||
8,887 | Calamos Asset Management, Inc., Class A | 100,867 | |||||||||
7,489 | Campus Crest Communities, Inc. REIT | 102,300 | |||||||||
912 | Capital Southwest Corp. | 107,333 | |||||||||
16,426 | CapLease, Inc. REIT | 115,311 | |||||||||
5,757 | Cardinal Financial Corp. | 87,794 | |||||||||
17,123 | Cedar Realty Trust, Inc. REIT | 109,758 | |||||||||
5,943 | Chatham Lodging Trust REIT | 108,816 | |||||||||
3,947 | Chemical Financial Corp. | 97,886 | |||||||||
12,951 | CoBiz Financial, Inc. | 110,861 | |||||||||
4,762 | Columbia Banking System, Inc. | 102,240 | |||||||||
3,056 | Community Trust Bancorp, Inc. | 105,799 | |||||||||
6,560 | Compass Diversified Holdings | 110,930 | |||||||||
2,974 | Coresite Realty Corp. REIT | 107,599 | |||||||||
37,101 | Cowen Group, Inc., Class A(b) | 94,979 | |||||||||
7,290 | Dime Community Bancshares, Inc. | 104,028 | |||||||||
9,797 | Dynex Capital, Inc. REIT | 105,318 | |||||||||
4,779 | Eagle Bancorp, Inc.(b) | 110,538 | |||||||||
4,226 | Ellington Financial LLC | 109,369 | |||||||||
3,973 | EMC Insurance Group, Inc. | 112,158 | |||||||||
4,462 | Employers Holdings, Inc. | 101,064 | |||||||||
3,459 | Encore Capital Group, Inc.(b) | 98,547 | |||||||||
7,668 | Excel Trust, Inc. REIT | 116,784 | |||||||||
5,526 | FBR & Co.(b) | 115,107 | |||||||||
3,383 | Federal Agricultural Mortgage Corp., Class C | 107,512 | |||||||||
5,463 | Fidus Investment Corp. | 102,704 | |||||||||
7,711 | First BanCorp | 100,320 |
Number of Shares | Value | ||||||||||
Common Stocks and Other Equity Interests (Continued) | |||||||||||
14,024 | First Commonwealth Financial Corp. | $ | 100,272 | ||||||||
6,598 | First Community Bancshares, Inc. | 102,335 | |||||||||
4,484 | First Defiance Financial Corp. | 101,518 | |||||||||
5,531 | First Interstate BancSystem, Inc. | 112,390 | |||||||||
6,763 | First Merchants Corp. | 109,763 | |||||||||
6,179 | Flushing Financial Corp. | 93,797 | |||||||||
4,785 | Forestar Group, Inc.(b) | 103,069 | |||||||||
5,730 | Franklin Financial Corp. | 104,171 | |||||||||
7,646 | FXCM, Inc., Class A | 103,603 | |||||||||
4,512 | Global Indemnity PLC (Ireland)(b) | 100,572 | |||||||||
6,336 | Golub Capital BDC, Inc. | 111,704 | |||||||||
4,279 | Greenlight Capital Re Ltd., Class A (Cayman Islands)(b) | 105,306 | |||||||||
6,536 | Hanmi Financial Corp.(b) | 100,850 | |||||||||
4,142 | Heartland Financial USA, Inc. | 105,248 | |||||||||
8,543 | Hercules Technology Growth Capital, Inc. | 113,622 | |||||||||
8,176 | Home Federal Bancorp, Inc. | 99,584 | |||||||||
3,840 | Homeowners Choice, Inc. | 101,914 | |||||||||
4,658 | HomeStreet, Inc. | 100,147 | |||||||||
4,995 | Horace Mann Educators Corp. | 112,637 | |||||||||
5,149 | Horizon Bancorp | 99,376 | |||||||||
7,165 | Horizon Technology Finance Corp. | 105,254 | |||||||||
8,382 | ICG Group, Inc.(b) | 99,494 | |||||||||
10,207 | Impac Mortgage Holdings, Inc. REIT(a)(b) | 105,949 | |||||||||
3,212 | Independent Bank Corp. | 99,700 | |||||||||
1,853 | Infinity Property & Casualty Corp. | 105,139 | |||||||||
7,016 | Interactive Brokers Group, Inc., Class A | 105,661 | |||||||||
9,426 | Investment Technology Group, Inc.(b) | 102,649 | |||||||||
1,505 | Investors Title Co. | 104,372 | |||||||||
9,623 | iStar Financial, Inc. REIT(b) | 112,397 | |||||||||
2,673 | Kansas City Life Insurance Co. | 96,495 | |||||||||
9,717 | Kcap Financial, Inc. | 105,138 | |||||||||
15,521 | Kite Realty Group Trust REIT | 102,439 | |||||||||
9,878 | Maiden Holdings Ltd. (Bermuda) | 102,040 | |||||||||
7,451 | MainSource Financial Group, Inc. | 94,404 | |||||||||
21,889 | MCG Capital Corp. | 112,509 | |||||||||
14,764 | Meadowbrook Insurance Group, Inc. | 114,864 | |||||||||
6,225 | Mercantile Bank Corp. | 104,020 | |||||||||
6,339 | Metro Bancorp, Inc.(b) | 112,517 | |||||||||
4,395 | MidWestOne Financial Group, Inc. | 105,040 | |||||||||
4,663 | National Financial Partners Corp.(b) | 118,160 | |||||||||
597 | National Western Life Insurance Co., Class A | 109,024 | |||||||||
1,774 | Navigators Group, Inc. (The)(b) | 102,679 | |||||||||
13,878 | New York Mortgage Trust, Inc. REIT(a) | 99,089 | |||||||||
7,912 | NewStar Financial, Inc.(b) | 94,548 | |||||||||
6,747 | OFG Bancorp | 108,424 | |||||||||
5,376 | Oppenheimer Holdings, Inc., Class A | 99,456 | |||||||||
6,755 | Oritani Financial Corp. | 104,500 | |||||||||
9,367 | Pacific Continental Corp. | 104,723 | |||||||||
7,954 | Pacific Premier Bancorp, Inc.(b) | 96,641 | |||||||||
18,550 | Park Sterling Corp.(b) | 106,291 |
See Notes to Financial Statements.
88
Schedule of Investments (Continued)
PowerShares Zacks Micro Cap Portfolio (PZI)
April 30, 2013
Number of Shares | Value | ||||||||||
Common Stocks and Other Equity Interests (Continued) | |||||||||||
9,264 | PennantPark Investment Corp. | $ | 108,389 | ||||||||
4,671 | Peoples Bancorp, Inc. | 95,195 | |||||||||
4,713 | PICO Holdings, Inc.(b) | 102,272 | |||||||||
4,477 | Pinnacle Financial Partners, Inc.(b) | 108,657 | |||||||||
3,049 | Piper Jaffray Cos., Inc.(b) | 102,934 | |||||||||
6,631 | Preferred Bank(b) | 109,412 | |||||||||
6,150 | Provident Financial Holdings, Inc. | 99,630 | |||||||||
11,536 | Provident New York Bancorp | 104,285 | |||||||||
13,068 | RAIT Financial Trust REIT | 111,601 | |||||||||
4,672 | Renasant Corp. | 106,615 | |||||||||
15,827 | Resource Capital Corp. REIT | 104,300 | |||||||||
7,465 | Retail Opportunity Investments Corp. REIT | 110,557 | |||||||||
5,643 | S&T Bancorp, Inc. | 106,483 | |||||||||
6,586 | Safeguard Scientifics, Inc.(b) | 106,298 | |||||||||
2,126 | Safety Insurance Group, Inc. | 105,598 | |||||||||
14,505 | Security National Financial Corp., Class A(b) | 115,025 | |||||||||
8,328 | Southwest Bancorp, Inc.(b) | 110,096 | |||||||||
6,007 | State Auto Financial Corp. | 104,402 | |||||||||
6,391 | State Bank Financial Corp. | 94,012 | |||||||||
6,475 | StellarOne Corp. | 97,060 | |||||||||
4,106 | Stewart Information Services Corp. | 111,149 | |||||||||
7,351 | Suffolk Bancorp(b) | 114,970 | |||||||||
9,992 | Summit Hotel Properties, Inc. REIT | 99,820 | |||||||||
17,295 | SWS Group, Inc.(b) | 98,409 | |||||||||
6,547 | Taylor Capital Group, Inc.(b) | 95,914 | |||||||||
6,987 | THL Credit, Inc. | 107,460 | |||||||||
20,396 | Thomas Properties Group, Inc. | 103,816 | |||||||||
6,991 | TowneBank | 100,041 | |||||||||
3,736 | Triangle Capital Corp. | 104,496 | |||||||||
18,748 | TrustCo Bank Corp. NY | 100,489 | |||||||||
5,347 | Union First Market Bankshares Corp. | 101,112 | |||||||||
9,228 | United Community Banks, Inc.(b) | 101,047 | |||||||||
4,106 | United Fire Group, Inc. | 114,804 | |||||||||
5,204 | ViewPoint Financial Group, Inc. | 96,898 | |||||||||
5,823 | Walker & Dunlop, Inc.(b) | 103,708 | |||||||||
4,344 | WesBanco, Inc. | 108,730 | |||||||||
6,875 | Whitestone REIT | 113,438 | |||||||||
15,433 | Wilshire Bancorp, Inc.(b) | 98,617 | |||||||||
2,153 | WSFS Financial Corp. | 105,368 | |||||||||
14,682,613 | |||||||||||
Health Care—11.7% | |||||||||||
13,181 | ACADIA Pharmaceuticals, Inc.(a)(b) | 169,903 | |||||||||
7,890 | Addus HomeCare Corp.(b) | 93,418 | |||||||||
22,171 | Affymetrix, Inc.(b) | 80,702 | |||||||||
9,915 | Albany Molecular Research, Inc.(b) | 118,286 | |||||||||
5,124 | Almost Family, Inc. | 101,148 | |||||||||
49,590 | Alphatec Holdings, Inc.(b) | 93,725 | |||||||||
4,389 | AMAG Pharmaceuticals, Inc.(b) | 96,778 | |||||||||
9,411 | Amedisys, Inc.(b) | 94,486 | |||||||||
23,373 | Astex Pharmaceuticals(b) | 160,806 |
Number of Shares | Value | ||||||||||
Common Stocks and Other Equity Interests (Continued) | |||||||||||
8,234 | BioScrip, Inc.(b) | $ | 114,123 | ||||||||
8,181 | Cambrex Corp.(b) | 102,181 | |||||||||
3,480 | Cantel Medical Corp. | 110,003 | |||||||||
5,106 | Cardiovascular Systems, Inc.(b) | 87,619 | |||||||||
3,995 | Cynosure, Inc., Class A(b) | 103,311 | |||||||||
7,486 | Emergent Biosolutions, Inc.(b) | 114,835 | |||||||||
8,407 | Endocyte, Inc.(b) | 116,773 | |||||||||
6,038 | ExamWorks Group, Inc.(b) | 109,288 | |||||||||
15,638 | Five Star Quality Care, Inc.(b) | 73,968 | |||||||||
8,057 | �� | GenMark Diagnostics, Inc.(b) | 125,286 | ||||||||
9,670 | Gentiva Health Services, Inc.(b) | 101,438 | |||||||||
3,499 | Greatbatch, Inc.(b) | 97,762 | |||||||||
8,543 | Healthways, Inc.(b) | 118,662 | |||||||||
13,967 | Insmed, Inc.(b) | 127,938 | |||||||||
8,016 | Invacare Corp. | 107,815 | |||||||||
14,865 | Keryx Biopharmaceuticals, Inc.(a)(b) | 121,150 | |||||||||
9,935 | Kindred Healthcare, Inc.(b) | 104,218 | |||||||||
4,872 | LHC Group, Inc.(b) | 105,820 | |||||||||
12,127 | MEI Pharma, Inc.(b) | 108,173 | |||||||||
8,537 | Merit Medical Systems, Inc.(b) | 82,553 | |||||||||
2,289 | National Healthcare Corp. | 106,278 | |||||||||
7,788 | Natus Medical, Inc.(b) | 97,428 | |||||||||
45,653 | Novavax, Inc.(b) | 107,285 | |||||||||
4,885 | NuVasive, Inc.(b) | 102,438 | |||||||||
5,539 | Omnicell, Inc.(b) | 99,813 | |||||||||
7,477 | PharMerica Corp.(b) | 96,379 | |||||||||
6,504 | PhotoMedex, Inc.(b) | 106,015 | |||||||||
33,905 | Pluristem Therapeutics, Inc.(a)(b) | 107,818 | |||||||||
15,063 | Repligen Corp.(b) | 134,965 | |||||||||
6,500 | Repros Therapeutics, Inc.(b) | 132,210 | |||||||||
28,129 | Sinovac Biotech Ltd. (China)(b) | 100,139 | |||||||||
19,132 | Sunesis Pharmaceuticals, Inc.(b) | 107,713 | |||||||||
3,840 | SurModics, Inc.(b) | 101,568 | |||||||||
9,135 | Symmetry Medical, Inc.(b) | 108,889 | |||||||||
3,898 | US Physical Therapy, Inc. | 93,006 | |||||||||
14,634 | XenoPort, Inc.(b) | 90,877 | |||||||||
29,984 | XOMA Corp.(b) | 104,944 | |||||||||
4,939,933 | |||||||||||
Industrials—13.0% | |||||||||||
5,691 | AAR Corp. | 101,641 | |||||||||
9,449 | Aceto Corp. | 98,270 | |||||||||
7,646 | Aircastle Ltd. (Bermuda) | 106,738 | |||||||||
3,078 | American Woodmark Corp.(b) | 103,575 | |||||||||
3,612 | Apogee Enterprises, Inc. | 92,034 | |||||||||
8,955 | Arkansas Best Corp. | 94,117 | |||||||||
1,977 | Barrett Business Services, Inc. | 104,662 | |||||||||
17,855 | Builders FirstSource, Inc.(b) | 110,522 | |||||||||
3,609 | CAI International, Inc.(b) | 91,993 | |||||||||
5,017 | Celadon Group, Inc. | 84,235 | |||||||||
2,464 | CIRCOR International, Inc. | 116,621 |
See Notes to Financial Statements.
89
Schedule of Investments (Continued)
PowerShares Zacks Micro Cap Portfolio (PZI)
April 30, 2013
Number of Shares | Value | ||||||||||
Common Stocks and Other Equity Interests (Continued) | |||||||||||
7,260 | Courier Corp. | $ | 104,544 | ||||||||
19,633 | Diana Containerships, Inc. (Marshall Islands)(a) | 111,712 | |||||||||
9,813 | Diana Shipping, Inc. (Greece)(b) | 93,125 | |||||||||
5,285 | Ducommun, Inc.(b) | 129,430 | |||||||||
2,986 | Encore Wire Corp. | 97,792 | |||||||||
5,994 | EnerNOC, Inc.(b) | 105,015 | |||||||||
12,852 | Federal Signal Corp.(b) | 99,732 | |||||||||
36,331 | Genco Shipping & Trading Ltd.(a)(b) | 62,126 | |||||||||
5,730 | Gibraltar Industries, Inc.(b) | 107,151 | |||||||||
4,387 | GP Strategies Corp.(b) | 96,733 | |||||||||
8,781 | Griffon Corp. | 90,444 | |||||||||
7,678 | Hardinge, Inc. | 103,653 | |||||||||
18,165 | Hawaiian Holdings, Inc.(b) | 99,726 | |||||||||
3,846 | ICF International, Inc.(b) | 104,265 | |||||||||
5,599 | Kelly Services, Inc., Class A | 95,295 | |||||||||
6,489 | KEYW Holding Corp. (The)(b) | 88,186 | |||||||||
11,547 | Kimball International, Inc., Class B | 106,117 | |||||||||
20,805 | Kratos Defense & Security Solutions, Inc.(b) | 105,897 | |||||||||
4,894 | Layne Christensen Co.(b) | 99,984 | |||||||||
2,350 | LB Foster Co., Class A | 103,753 | |||||||||
6,817 | Lydall, Inc.(b) | 97,756 | |||||||||
11,547 | MFC Industrial Ltd. (Canada) | 93,415 | |||||||||
4,262 | MYR Group, Inc.(b) | 97,174 | |||||||||
7,960 | Navigant Consulting, Inc.(b) | 98,147 | |||||||||
22,894 | Navios Maritime Holdings, Inc. (Greece) | 103,710 | |||||||||
11,058 | NN, Inc.(b) | 99,633 | |||||||||
10,528 | Orion Marine Group, Inc.(b) | 96,436 | |||||||||
6,639 | Patrick Industries, Inc.(b) | 134,506 | |||||||||
7,322 | Pike Electric Corp. | 114,443 | |||||||||
1,980 | Powell Industries, Inc.(b) | 97,495 | |||||||||
9,027 | Republic Airways Holdings, Inc.(b) | 101,012 | |||||||||
4,525 | Roadrunner Transportation Systems, Inc.(b) | 101,858 | |||||||||
21,094 | Safe Bulkers, Inc. (Marshall Islands)(a) | 105,892 | |||||||||
2,875 | Saia, Inc.(b) | 117,645 | |||||||||
6,518 | SkyWest, Inc. | 93,273 | |||||||||
1,898 | Standex International Corp. | 100,404 | |||||||||
13,159 | Taser International, Inc.(b) | 115,931 | |||||||||
3,772 | Titan Machinery, Inc.(b) | 85,096 | |||||||||
7,884 | TMS International Corp., Class A(b) | 113,845 | |||||||||
5,418 | Tutor Perini Corp.(b) | 89,072 | |||||||||
2,613 | Universal Forest Products, Inc. | 100,862 | |||||||||
3,783 | Viad Corp. | 98,547 | |||||||||
6,182 | XPO Logistics, Inc.(b) | 100,828 | |||||||||
5,466,068 | |||||||||||
Information Technology—11.7% | |||||||||||
5,716 | Advanced Energy Industries, Inc.(b) | 97,058 | |||||||||
26,159 | Amkor Technology, Inc.(a)(b) | 110,653 | |||||||||
5,396 | Anaren, Inc.(b) | 126,320 | |||||||||
16,604 | Avid Technology, Inc.(b) | 109,420 |
Number of Shares | Value | ||||||||||
Common Stocks and Other Equity Interests (Continued) | |||||||||||
4,772 | Black Box Corp. | $ | 103,648 | ||||||||
6,759 | Blucora, Inc.(b) | 99,830 | |||||||||
10,280 | Brooks Automation, Inc. | 99,922 | |||||||||
9,539 | CalAmp Corp.(b) | 106,169 | |||||||||
30,242 | Canadian Solar, Inc. (China)(a)(b) | 170,262 | |||||||||
8,010 | Checkpoint Systems, Inc.(b) | 92,676 | |||||||||
7,857 | ChipMOS TECHNOLOGIES Bermuda Ltd. (Bermuda) | 115,734 | |||||||||
4,485 | Cray, Inc.(b) | 94,903 | |||||||||
19,302 | EarthLink, Inc. | 109,828 | |||||||||
9,471 | Electro Scientific Industries, Inc. | 102,097 | |||||||||
4,349 | Ellie Mae, Inc.(b) | 113,161 | |||||||||
18,392 | Gilat Satellite Networks Ltd. (Israel)(b) | 102,076 | |||||||||
15,877 | GSI Technology, Inc.(b) | 99,073 | |||||||||
8,580 | Hollysys Automation Technologies Ltd. (British Virgin Islands)(b) | 103,303 | |||||||||
38,050 | Hutchinson Technology, Inc.(b) | 106,540 | |||||||||
16,449 | IntraLinks Holdings, Inc.(b) | 94,088 | |||||||||
9,051 | �� | Kulicke & Soffa Industries, Inc.(b) | 104,630 | ||||||||
50,791 | Limelight Networks, Inc.(b) | 98,027 | |||||||||
20,639 | Monster Worldwide, Inc.(b) | 90,399 | |||||||||
7,693 | Nam Tai Electronics, Inc. (Hong Kong) | 58,159 | |||||||||
20,474 | NeoPhotonics Corp.(b) | 112,812 | |||||||||
7,944 | Netsol Technologies, Inc.(b) | 100,253 | |||||||||
6,381 | Oplink Communications, Inc.(b) | 104,776 | |||||||||
10,377 | Orbotech Ltd. (Israel)(b) | 106,364 | |||||||||
6,398 | PC Connection, Inc. | 98,785 | |||||||||
6,529 | PDF Solutions, Inc.(b) | 111,711 | |||||||||
10,554 | Perion Network Ltd. (Israel)(b) | 126,120 | |||||||||
15,666 | Photronics, Inc.(b) | 123,605 | |||||||||
25,215 | Power-One, Inc.(b) | 159,359 | |||||||||
15,856 | Rubicon Technology, Inc.(b) | 117,493 | |||||||||
8,880 | Rudolph Technologies, Inc.(b) | 103,630 | |||||||||
9,214 | Sanmina Corp.(b) | 116,281 | |||||||||
8,800 | SeaChange International, Inc.(b) | 95,568 | |||||||||
9,831 | Sierra Wireless, Inc. (Canada)(b) | 109,124 | |||||||||
2,455 | SPS Commerce, Inc.(b) | 115,704 | |||||||||
46,922 | TeleCommunication Systems, Inc., Class A(b) | 90,559 | |||||||||
16,225 | Telenav, Inc.(b) | 85,019 | |||||||||
3,413 | Uni-Pixel, Inc.(a)(b) | 121,332 | |||||||||
17,353 | United Online, Inc. | 118,000 | |||||||||
4,383 | Virtusa Corp.(b) | 97,346 | |||||||||
33,005 | Vringo, Inc.(a)(b) | 93,074 | |||||||||
10,518 | Xyratex Ltd. (Bermuda) | 112,332 | |||||||||
4,927,223 | |||||||||||
Materials—3.5% | |||||||||||
5,976 | A.M. Castle & Co.(b) | 103,504 | |||||||||
1,447 | AEP Industries, Inc.(b) | 111,564 | |||||||||
3,424 | American Vanguard Corp. | 98,748 | |||||||||
12,083 | Boise, Inc. | 96,543 |
See Notes to Financial Statements.
90
Schedule of Investments (Continued)
PowerShares Zacks Micro Cap Portfolio (PZI)
April 30, 2013
Number of Shares | Value | ||||||||||
Common Stocks and Other Equity Interests (Continued) | |||||||||||
32,529 | China Green Agriculture, Inc.(a)(b) | $ | 98,888 | ||||||||
43,963 | Golden Minerals Co.(a)(b) | 80,013 | |||||||||
9,616 | Horsehead Holding Corp.(b) | 102,891 | |||||||||
7,245 | Landec Corp.(b) | 97,156 | |||||||||
3,670 | Materion Corp. | 97,218 | |||||||||
36,584 | McEwen Mining, Inc.(a)(b) | 85,241 | |||||||||
15,141 | Mercer International, Inc.(b) | 95,237 | |||||||||
4,457 | OM Group, Inc.(b) | 109,063 | |||||||||
34,881 | Thompson Creek Metals Co., Inc. (Canada)(a)(b) | 104,294 | |||||||||
14,103 | Yongye International, Inc.(b) | 75,028 | |||||||||
8,721 | Zoltek Cos., Inc.(b) | 115,204 | |||||||||
1,470,592 | |||||||||||
Telecommunication Services—2.1% | |||||||||||
15,272 | 8x8, Inc.(b) | 110,417 | |||||||||
14,081 | Cbeyond, Inc.(b) | 123,631 | |||||||||
4,534 | Hawaiian Telcom Holdco, Inc.(b) | 109,587 | |||||||||
17,378 | Iridium Communications, Inc.(b) | 116,606 | |||||||||
20,084 | ORBCOMM, Inc.(b) | 94,997 | |||||||||
9,524 | Premiere Global Services, Inc.(b) | 106,955 | |||||||||
7,884 | USA Mobility, Inc. | 106,986 | |||||||||
36,205 | Vonage Holdings Corp.(b) | 110,425 | |||||||||
879,604 | |||||||||||
Utilities—1.1% | |||||||||||
2,130 | Chesapeake Utilities Corp. | 113,657 | |||||||||
10,566 | Consolidated Water Co. Ltd. (Cayman Islands) | 105,343 | |||||||||
5,069 | Ormat Technologies, Inc. | 110,200 | |||||||||
3,702 | Unitil Corp. | 112,208 | |||||||||
441,408 | |||||||||||
Total Common Stocks and Other Equity Interests (Cost $38,724,365) | 42,036,330 | ||||||||||
Money Market Fund—0.2% | |||||||||||
78,714 | Goldman Sachs Financial Square Prime Obligations—Institutional Share Class (Cost $78,714) | 78,714 | |||||||||
Total Investments (excluding investments purchased with cash collateral from securities on loan) (Cost $38,803,079)—100.2% | 42,115,044 |
Number of Shares | Value | ||||||||||
Investments Purchased with Cash Collateral from Securities on Loan | |||||||||||
Money Market Fund—3.4% | |||||||||||
1,447,325 | Invesco Liquid Assets Portfolio—Institutional Class (Cost $1,447,325)(c)(d) | $ | 1,447,325 | ||||||||
Total Investments (Cost $40,250,404)—103.6% | 43,562,369 | ||||||||||
Liabilities in excess of other assets—(3.6)% | (1,507,565 | ) | |||||||||
Net Assets—100.0% | $ | 42,054,804 |
Investment Abbreviations:
REIT—Real Estate Investment Trust
Notes to Schedule of Investments:
(a) All or a portion of this security was out on loan at April 30, 2013.
(b) Non-income producing security.
(c) The security has been segregated to satisfy the commitment to return the cash collateral received in securities lending transactions upon the borrower's return of the securities loaned. See Note 2H.
(d) The security and the Fund are advised by wholly owned subsidiaries of Invesco Ltd. and are therefore considered to be affiliated.
See Notes to Financial Statements.
91
Statements of Assets and Liabilities
April 30, 2013
PowerShares Dynamic Large Cap Growth Portfolio (PWB) | PowerShares Dynamic Large Cap Value Portfolio (PWV) | PowerShares Fundamental Pure Large Core Portfolio (PXLC) | PowerShares Fundamental Pure Large Growth Portfolio (PXLG) | PowerShares Fundamental Pure Large Value Portfolio (PXLV) | PowerShares Fundamental Pure Mid Core Portfolio (PXMC) | ||||||||||||||||||||||
ASSETS: | |||||||||||||||||||||||||||
Unaffiliated investments, at value(a) | $ | 213,026,826 | $ | 574,892,959 | $ | 27,929,587 | $ | 82,838,527 | $ | 7,599,098 | $ | 19,600,012 | |||||||||||||||
Affiliated investments, at value | — | — | — | — | — | 250,556 | |||||||||||||||||||||
Total investments, at value | 213,026,826 | 574,892,959 | 27,929,587 | 82,838,527 | 7,599,098 | 19,850,568 | |||||||||||||||||||||
Foreign currencies, at value | — | — | — | — | — | — | |||||||||||||||||||||
Receivables: | |||||||||||||||||||||||||||
Dividends | 120,207 | 617,305 | 31,771 | 61,323 | 8,791 | 7,708 | |||||||||||||||||||||
Shares sold | — | 2,521,165 | — | — | — | — | |||||||||||||||||||||
Investments sold | — | — | — | — | — | 461 | |||||||||||||||||||||
Security lending | — | — | — | — | — | — | |||||||||||||||||||||
Expense waivers | — | — | 5,862 | 9,284 | 3,670 | 6,365 | |||||||||||||||||||||
Prepaid expense | — | — | 8,246 | 2,689 | 4,944 | 9,858 | |||||||||||||||||||||
Total Assets | 213,147,033 | 578,031,429 | 27,975,466 | 82,911,823 | 7,616,503 | 19,874,960 | |||||||||||||||||||||
LIABILITIES: | |||||||||||||||||||||||||||
Due to custodian | — | 149,798 | — | — | — | — | |||||||||||||||||||||
Payables: | |||||||||||||||||||||||||||
Investments purchased | — | 2,515,208 | — | — | — | 10,890 | |||||||||||||||||||||
Collateral upon return of securities loaned | — | — | — | — | — | — | |||||||||||||||||||||
Accrued advisory fees | 86,229 | 227,995 | 6,126 | 19,290 | 1,493 | 4,628 | |||||||||||||||||||||
Accrued trustees fees | 20,741 | 21,572 | 8,373 | 3,142 | 3,090 | 7,937 | |||||||||||||||||||||
Accrued expenses | 143,148 | 291,624 | 87,426 | 72,980 | 63,010 | 83,184 | |||||||||||||||||||||
Total Liabilities | 250,118 | 3,206,197 | 101,925 | 95,412 | 67,593 | 106,639 | |||||||||||||||||||||
NET ASSETS | $ | 212,896,915 | $ | 574,825,232 | $ | 27,873,541 | $ | 82,816,411 | $ | 7,548,910 | $ | 19,768,321 | |||||||||||||||
NET ASSETS CONSIST OF: | |||||||||||||||||||||||||||
Shares of beneficial interest | $ | 432,865,953 | $ | 613,215,309 | $ | 35,543,143 | $ | 78,967,958 | $ | 6,826,673 | $ | 28,632,137 | |||||||||||||||
Undistributed net investment income | 234,500 | 1,368,728 | 15,035 | 233,801 | 11,501 | 37,042 | |||||||||||||||||||||
Undistributed net realized gain (loss) | (261,043,971 | ) | (136,708,219 | ) | (10,832,927 | ) | 299,397 | (6,367 | ) | (10,561,198 | ) | ||||||||||||||||
Net unrealized appreciation | 40,840,433 | 96,949,414 | 3,148,290 | 3,315,255 | 717,103 | 1,660,340 | |||||||||||||||||||||
Net Assets | $ | 212,896,915 | $ | 574,825,232 | $ | 27,873,541 | $ | 82,816,411 | $ | 7,548,910 | $ | 19,768,321 | |||||||||||||||
Shares outstanding (unlimited amount authorized, $0.01 par value) | 10,000,000 | 22,800,000 | 900,000 | 3,300,001 | 300,001 | 650,000 | |||||||||||||||||||||
Net asset value | $ | 21.29 | $ | 25.21 | $ | 30.97 | $ | 25.10 | $ | 25.16 | $ | 30.41 | |||||||||||||||
Market price | $ | 21.28 | $ | 25.22 | $ | 30.98 | $ | 25.08 | $ | 25.16 | $ | 30.39 | |||||||||||||||
Unaffiliated investments, at cost | $ | 172,186,393 | $ | 477,943,545 | $ | 24,781,297 | $ | 79,523,272 | $ | 6,881,995 | $ | 17,960,197 | |||||||||||||||
Affiliated investments, at cost | $ | — | $ | — | $ | — | $ | — | $ | — | $ | 230,031 | |||||||||||||||
Total investments, at cost | $ | 172,186,393 | $ | 477,943,545 | $ | 24,781,297 | $ | 79,523,272 | $ | 6,881,995 | $ | 18,190,228 | |||||||||||||||
Foreign currencies, at cost | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | |||||||||||||||
(a)Includes securities on loan with an aggregate value of | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — |
See Notes to Financial Statements.
92
PowerShares Fundamental Pure Mid Growth Portfolio (PXMG) | PowerShares Fundamental Pure Mid Value Portfolio (PXMV) | PowerShares Fundamental Pure Small Core Portfolio (PXSC) | PowerShares Fundamental Pure Small Growth Portfolio (PXSG) | PowerShares Fundamental Pure Small Value Portfolio (PXSV) | PowerShares Zacks Micro Cap Portfolio (PZI) | ||||||||||||||||||||||
ASSETS: | |||||||||||||||||||||||||||
Unaffiliated investments, at value(a) | $ | 82,227,244 | $ | 28,302,168 | $ | 15,341,413 | $ | 26,510,874 | $ | 48,181,950 | $ | 42,115,044 | |||||||||||||||
Affiliated investments, at value | — | — | — | 216,525 | 1,866,896 | 1,447,325 | |||||||||||||||||||||
Total investments, at value | 82,227,244 | 28,302,168 | 15,341,413 | 26,727,399 | 50,048,846 | 43,562,369 | |||||||||||||||||||||
Foreign currencies, at value | — | 143,192 | — | — | — | 25,452 | |||||||||||||||||||||
Receivables: | |||||||||||||||||||||||||||
Dividends | 24,846 | 18,800 | 24,036 | 9,236 | 18,926 | 10,873 | |||||||||||||||||||||
Shares sold | — | — | — | — | — | — | |||||||||||||||||||||
Investments sold | — | — | — | — | 22,533 | 6,260 | |||||||||||||||||||||
Security lending | — | — | — | — | 3,242 | 6,338 | |||||||||||||||||||||
Expense waivers | 6,369 | 9,588 | 7,645 | 11,183 | 10,970 | 4,820 | |||||||||||||||||||||
Prepaid expense | 7,483 | 3,475 | 1,616 | 11,860 | 4,709 | — | |||||||||||||||||||||
Total Assets | 82,265,942 | 28,477,223 | 15,374,710 | 26,759,678 | 50,109,226 | 43,616,112 | |||||||||||||||||||||
LIABILITIES: | |||||||||||||||||||||||||||
Due to custodian | — | 51,792 | — | — | — | — | |||||||||||||||||||||
Payables: | |||||||||||||||||||||||||||
Investments purchased | — | — | — | — | 24,483 | — | |||||||||||||||||||||
Collateral upon return of securities loaned | — | — | — | — | 1,866,896 | 1,447,325 | |||||||||||||||||||||
Accrued advisory fees | 19,168 | 6,590 | 3,572 | 6,264 | 11,205 | 16,380 | |||||||||||||||||||||
Accrued trustees fees | 14,640 | 9,176 | 7,708 | 8,910 | 10,078 | 9,934 | |||||||||||||||||||||
Accrued expenses | 131,031 | 88,975 | 73,794 | 98,416 | 112,519 | 87,669 | |||||||||||||||||||||
Total Liabilities | 164,839 | 156,533 | 85,074 | 113,590 | 2,025,181 | 1,561,308 | |||||||||||||||||||||
NET ASSETS | $ | 82,101,103 | $ | 28,320,690 | $ | 15,289,636 | $ | 26,646,088 | $ | 48,084,045 | $ | 42,054,804 | |||||||||||||||
NET ASSETS CONSIST OF: | |||||||||||||||||||||||||||
Shares of beneficial interest | $ | 244,845,665 | $ | 69,991,257 | $ | 23,792,397 | $ | 75,968,977 | $ | 90,948,241 | $ | 131,780,630 | |||||||||||||||
Undistributed net investment income | 346,402 | 37,009 | 53,467 | 189,920 | 59,627 | 128,568 | |||||||||||||||||||||
Undistributed net realized gain (loss) | (171,891,678 | ) | (45,345,536 | ) | (9,855,631 | ) | (50,770,457 | ) | (46,241,645 | ) | (93,165,359 | ) | |||||||||||||||
Net unrealized appreciation | 8,800,714 | 3,637,960 | 1,299,403 | 1,257,648 | 3,317,822 | 3,310,965 | |||||||||||||||||||||
Net Assets | $ | 82,101,103 | $ | 28,320,690 | $ | 15,289,636 | $ | 26,646,088 | $ | 48,084,045 | $ | 42,054,804 | |||||||||||||||
Shares outstanding (unlimited amount authorized, $0.01 par value) | 3,150,000 | 1,350,000 | 550,000 | 1,350,000 | 2,450,000 | 3,100,000 | |||||||||||||||||||||
Net asset value | $ | 26.06 | $ | 20.98 | $ | 27.80 | $ | 19.74 | $ | 19.63 | $ | 13.57 | |||||||||||||||
Market price | $ | 26.04 | $ | 20.98 | $ | 27.76 | $ | 19.72 | $ | 19.61 | $ | 13.54 | |||||||||||||||
Unaffiliated investments, at cost | $ | 73,426,530 | $ | 24,670,485 | $ | 14,042,010 | $ | 25,269,599 | $ | 44,864,128 | $ | 38,803,079 | |||||||||||||||
Affiliated investments, at cost | $ | — | $ | — | $ | — | $ | 200,152 | $ | 1,866,896 | $ | 1,447,325 | |||||||||||||||
Total investments, at cost | $ | 73,426,530 | $ | 24,670,485 | $ | 14,042,010 | $ | 25,469,751 | $ | 46,731,024 | $ | 40,250,404 | |||||||||||||||
Foreign currencies, at cost | $ | — | $ | 136,915 | $ | — | $ | — | $ | — | $ | 26,452 | |||||||||||||||
(a)Includes securities on loan with an aggregate value of | $ | — | $ | — | $ | — | $ | — | $ | 1,813,578 | $ | 1,327,711 |
93
Statements of Operations
Year Ended April 30, 2013
PowerShares Dynamic Large Cap Growth Portfolio (PWB) | PowerShares Dynamic Large Cap Value Portfolio (PWV) | PowerShares Fundamental Pure Large Core Portfolio (PXLC) | PowerShares Fundamental Pure Large Growth Portfolio (PXLG) | PowerShares Fundamental Pure Large Value Portfolio (PXLV) | PowerShares Fundamental Pure Mid Core Portfolio (PXMC) | ||||||||||||||||||||||
INVESTMENT INCOME: | |||||||||||||||||||||||||||
Unaffiliated dividend income | $ | 3,132,939 | $ | 13,605,114 | $ | 708,117 | $ | 476,114 | $ | 163,843 | $ | 353,737 | |||||||||||||||
Affiliated dividend income | — | — | — | — | — | — | |||||||||||||||||||||
Securities lending income | — | — | — | — | — | — | |||||||||||||||||||||
Foreign withholding tax | — | — | — | — | — | — | |||||||||||||||||||||
Total Income | 3,132,939 | 13,605,114 | 708,117 | 476,114 | 163,843 | 353,737 | |||||||||||||||||||||
EXPENSES: | |||||||||||||||||||||||||||
Advisory fees | 939,769 | 2,304,431 | 74,260 | 68,433 | 16,862 | 52,082 | |||||||||||||||||||||
Accounting & administration fees | 60,717 | 105,194 | 57,844 | 52,333 | 52,333 | 57,844 | |||||||||||||||||||||
Sub-licensing | 56,386 | 138,266 | 19,976 | 12,371 | 4,356 | 13,765 | |||||||||||||||||||||
Professional fees | 19,122 | 26,608 | 28,401 | 28,471 | 27,721 | 28,263 | |||||||||||||||||||||
Trustees fees | 10,007 | 16,172 | 5,842 | 5,473 | 5,486 | 5,642 | |||||||||||||||||||||
Custodian & transfer agent fees | 8,846 | 30,401 | 2,699 | 5,534 | 6,627 | 8,996 | |||||||||||||||||||||
Listing fee and expenses | 5,026 | 5,026 | 5,261 | 10,025 | 10,026 | 5,191 | |||||||||||||||||||||
Other expenses | 8,609 | 84,783 | 10,848 | 3,401 | (1,593 | ) | 7,850 | ||||||||||||||||||||
Total Expenses | 1,108,482 | 2,710,881 | 205,131 | 186,041 | 121,818 | 179,633 | |||||||||||||||||||||
Waivers | — | — | (105,264 | ) | (94,097 | ) | (99,141 | ) | (109,592 | ) | |||||||||||||||||
Net Expenses | 1,108,482 | 2,710,881 | 99,867 | 91,944 | 22,677 | 70,041 | |||||||||||||||||||||
Net Investment Income | 2,024,457 | 10,894,233 | 608,250 | 384,170 | 141,166 | 283,696 | |||||||||||||||||||||
REALIZED AND UNREALIZED GAIN (LOSS): | |||||||||||||||||||||||||||
Net realized gain (loss) from: | |||||||||||||||||||||||||||
Investment securities | (3,059,137 | ) | (8,236,957 | ) | 240,657 | 310,083 | (4,530 | ) | (56,207 | ) | |||||||||||||||||
In-kind redemptions | 24,920,372 | 45,468,712 | 2,120,857 | 1,524,732 | 887,088 | 997,295 | |||||||||||||||||||||
Foreign currencies | — | — | — | — | — | — | |||||||||||||||||||||
Net realized gain | 21,861,235 | 37,231,755 | 2,361,514 | 1,834,815 | 882,558 | 941,088 | |||||||||||||||||||||
Change in net unrealized appreciation (depreciation) on: | |||||||||||||||||||||||||||
Investment securities | 2,739,360 | 57,544,945 | 1,527,836 | 3,127,962 | 211,524 | 1,551,100 | |||||||||||||||||||||
Foreign currencies | — | — | — | — | — | — | |||||||||||||||||||||
Net change in unrealized appreciation (depreciation) | 2,739,360 | 57,544,945 | 1,527,836 | 3,127,962 | 211,524 | 1,551,100 | |||||||||||||||||||||
Net realized and unrealized gain | 24,600,595 | 94,776,700 | 3,889,350 | 4,962,777 | 1,094,082 | 2,492,188 | |||||||||||||||||||||
Net increase in net assets resulting from operations | $ | 26,625,052 | $ | 105,670,933 | $ | 4,497,600 | $ | 5,346,947 | $ | 1,235,248 | $ | 2,775,884 |
See Notes to Financial Statements.
94
PowerShares Fundamental Pure Mid Growth Portfolio (PXMG) | PowerShares Fundamental Pure Mid Value Portfolio (PXMV) | PowerShares Fundamental Pure Small Core Portfolio (PXSC) | PowerShares Fundamental Pure Small Growth Portfolio (PXSG) | PowerShares Fundamental Pure Small Value Portfolio (PXSV) | PowerShares Zacks Micro Cap Portfolio (PZI) | ||||||||||||||||||||||
INVESTMENT INCOME: | |||||||||||||||||||||||||||
Unaffiliated dividend income | $ | 1,193,064 | $ | 722,498 | $ | 313,715 | $ | 285,167 | $ | 999,223 | $ | 723,277 | |||||||||||||||
Affiliated dividend income | 21,236 | — | — | 16,885 | — | — | |||||||||||||||||||||
Securities lending income | — | — | — | — | 56,174 | 25,043 | |||||||||||||||||||||
Foreign withholding tax | — | (987 | ) | (698 | ) | (56 | ) | — | (1,070 | ) | |||||||||||||||||
Total Income | 1,214,300 | 721,511 | 313,017 | 301,996 | 1,055,397 | 747,250 | |||||||||||||||||||||
EXPENSES: | |||||||||||||||||||||||||||
Advisory fees | 229,160 | 84,658 | 39,910 | 78,657 | 135,177 | 154,248 | |||||||||||||||||||||
Accounting & administration fees | 57,844 | 57,844 | 57,844 | 57,844 | 57,844 | 57,844 | |||||||||||||||||||||
Sub-licensing | 60,540 | 23,032 | 10,675 | 19,746 | 35,720 | 30,850 | |||||||||||||||||||||
Professional fees | 31,574 | 26,910 | 29,038 | 32,843 | 35,891 | 33,674 | |||||||||||||||||||||
Trustees fees | 7,190 | 5,897 | 5,529 | 5,531 | 6,333 | 5,802 | |||||||||||||||||||||
Custodian & transfer agent fees | 10,810 | 25,353 | 13,825 | 37,285 | 36,402 | 16,273 | |||||||||||||||||||||
Listing fee and expenses | 5,874 | 5,267 | 5,149 | 5,430 | 5,511 | 5,026 | |||||||||||||||||||||
Other expenses | 24,825 | 10,466 | 6,202 | 11,342 | 14,024 | (1,448 | ) | ||||||||||||||||||||
Total Expenses | 427,817 | 239,427 | 168,172 | 248,678 | 326,902 | 302,269 | |||||||||||||||||||||
Waivers | (117,856 | ) | (125,577 | ) | (114,500 | ) | (142,898 | ) | (145,112 | ) | (86,324 | ) | |||||||||||||||
Net Expenses | 309,961 | 113,850 | 53,672 | 105,780 | 181,790 | 215,945 | |||||||||||||||||||||
Net Investment Income | 904,339 | 607,661 | 259,345 | 196,216 | 873,607 | 531,305 | |||||||||||||||||||||
REALIZED AND UNREALIZED GAIN (LOSS): | |||||||||||||||||||||||||||
Net realized gain (loss) from: | |||||||||||||||||||||||||||
Investment securities | (1,171,007 | ) | 92,104 | (167,674 | ) | (569,086 | ) | 541,785 | (1,908,225 | ) | |||||||||||||||||
In-kind redemptions | 4,814,378 | 2,796,988 | 978,256 | 1,793,901 | 4,892,743 | 6,264,708 | |||||||||||||||||||||
Foreign currencies | — | 1,982 | — | — | — | — | |||||||||||||||||||||
Net realized gain | 3,643,371 | 2,891,074 | 810,582 | 1,224,815 | 5,434,528 | 4,356,483 | |||||||||||||||||||||
Change in net unrealized appreciation (depreciation) on: | |||||||||||||||||||||||||||
Investment securities | 7,042,985 | 2,880,901 | 1,020,540 | 1,497,396 | 2,795,165 | 1,125,975 | |||||||||||||||||||||
Foreign currencies | — | 6,277 | — | — | — | (99 | ) | ||||||||||||||||||||
Net change in unrealized appreciation (depreciation) | 7,042,985 | 2,887,178 | 1,020,540 | 1,497,396 | 2,795,165 | 1,125,876 | |||||||||||||||||||||
Net realized and unrealized gain | 10,686,356 | 5,778,252 | 1,831,122 | 2,722,211 | 8,229,693 | 5,482,359 | |||||||||||||||||||||
Net increase in net assets resulting from operations | $ | 11,590,695 | $ | 6,385,913 | $ | 2,090,467 | $ | 2,918,427 | $ | 9,103,300 | $ | 6,013,664 |
95
Statements of Changes in Net Assets
PowerShares Dynamic Large Cap Growth Portfolio (PWB) | PowerShares Dynamic Large Cap Value Portfolio (PWV) | PowerShares Fundamental Pure Large Core Portfolio (PXLC) | |||||||||||||||||||||||||
Year Ended April 30, 2013 | Year Ended April 30, 2012 | Year Ended April 30, 2013 | Year Ended April 30, 2012 | Year Ended April 30, 2013 | Year Ended April 30, 2012 | ||||||||||||||||||||||
OPERATIONS: | |||||||||||||||||||||||||||
Net investment income | $ | 2,024,457 | $ | 1,571,412 | $ | 10,894,233 | $ | 9,564,757 | $ | 608,250 | $ | 597,262 | |||||||||||||||
Net realized gain | 21,861,235 | 10,889,630 | 37,231,755 | 17,942,068 | 2,361,514 | 3,937,339 | |||||||||||||||||||||
Net change in unrealized appreciation (depreciation) | 2,739,360 | (1,693,924 | ) | 57,544,945 | (13,184,103 | ) | 1,527,836 | (4,636,615 | ) | ||||||||||||||||||
Net increase (decrease) in net assets resulting from operations | 26,625,052 | 10,767,118 | 105,670,933 | 14,322,722 | 4,497,600 | (102,014 | ) | ||||||||||||||||||||
DISTRIBUTIONS TO SHAREHOLDERS FROM: | |||||||||||||||||||||||||||
Net investment income | (1,990,554 | ) | (1,510,509 | ) | (10,900,743 | ) | (9,491,440 | ) | (662,935 | ) | (670,286 | ) | |||||||||||||||
SHAREHOLDER TRANSACTIONS: | |||||||||||||||||||||||||||
Proceeds from shares sold | 166,875,738 | 121,004,823 | 450,245,291 | 352,632,765 | 10,362,143 | 26,748,290 | |||||||||||||||||||||
Value of shares repurchased | (169,626,504 | ) | (135,822,460 | ) | (389,930,643 | ) | (360,043,032 | ) | (11,649,294 | ) | (36,322,756 | ) | |||||||||||||||
Net increase (decrease) in net assets resulting from shares transactions | (2,750,766 | ) | (14,817,637 | ) | 60,314,648 | (7,410,267 | ) | (1,287,151 | ) | (9,574,466 | ) | ||||||||||||||||
Increase (Decrease) in Net Assets | 21,883,732 | (5,561,028 | ) | 155,084,838 | (2,578,985 | ) | 2,547,514 | (10,346,766 | ) | ||||||||||||||||||
NET ASSETS: | |||||||||||||||||||||||||||
Beginning of year | 191,013,183 | 196,574,211 | 419,740,394 | 422,319,379 | 25,326,027 | 35,672,793 | |||||||||||||||||||||
End of year | $ | 212,896,915 | $ | 191,013,183 | $ | 574,825,232 | $ | 419,740,394 | $ | 27,873,541 | $ | 25,326,027 | |||||||||||||||
Undistributed net investment income at end of year | $ | 234,500 | $ | 288,421 | $ | 1,368,728 | $ | 1,375,238 | $ | 15,035 | $ | 69,720 | |||||||||||||||
CHANGES IN SHARES OUTSTANDING: | |||||||||||||||||||||||||||
Shares sold | 8,950,000 | 7,150,000 | 20,750,000 | 18,050,000 | 350,000 | 1,050,000 | |||||||||||||||||||||
Shares repurchased | (9,150,000 | ) | (8,100,000 | ) | (18,200,000 | ) | (18,550,000 | ) | (400,000 | ) | (1,450,000 | ) | |||||||||||||||
Shares outstanding, beginning of year | 10,200,000 | 11,150,000 | 20,250,000 | 20,750,000 | 950,000 | 1,350,000 | |||||||||||||||||||||
Shares outstanding, end of year | 10,000,000 | 10,200,000 | 22,800,000 | 20,250,000 | 900,000 | 950,000 |
(a) Commencement of Investment Operations.
See Notes to Financial Statements.
96
PowerShares Fundamental Pure Large Growth Portfolio (PXLG) | PowerShares Fundamental Pure Large Value Portfolio (PXLV) | PowerShares Fundamental Pure Mid Core Portfolio (PXMC) | |||||||||||||||||||||||||
Year Ended April 30, 2013 | For the Period June 13, 2011(a) to April 30, 2012 | Year Ended April 30, 2013 | For the Period June 13, 2011(a) to April 30, 2012 | Year Ended April 30, 2013 | Year Ended April 30, 2012 | ||||||||||||||||||||||
OPERATIONS: | |||||||||||||||||||||||||||
Net investment income | $ | 384,170 | $ | 33,215 | $ | 141,166 | $ | 150,154 | $ | 283,696 | $ | 240,667 | |||||||||||||||
Net realized gain | 1,834,815 | 122,350 | 882,558 | 108,242 | 941,088 | 3,028,451 | |||||||||||||||||||||
Net change in unrealized appreciation (depreciation) | 3,127,962 | 187,293 | 211,524 | 505,579 | 1,551,100 | (3,515,009 | ) | ||||||||||||||||||||
Net increase (decrease) in net assets resulting from operations | 5,346,947 | 342,858 | 1,235,248 | 763,975 | 2,775,884 | (245,891 | ) | ||||||||||||||||||||
DISTRIBUTIONS TO SHAREHOLDERS FROM: | |||||||||||||||||||||||||||
Net investment income | (166,518 | ) | (17,066 | ) | (147,580 | ) | (132,239 | ) | (280,344 | ) | (227,420 | ) | |||||||||||||||
SHAREHOLDER TRANSACTIONS: | |||||||||||||||||||||||||||
Proceeds from shares sold | 97,586,544 | 6,164,439 | 2,477,129 | 14,853,954 | 2,985,502 | 26,425,945 | |||||||||||||||||||||
Value of shares repurchased | (24,390,578 | ) | (2,050,215 | ) | (4,164,302 | ) | (7,337,275 | ) | (4,335,466 | ) | (30,410,631 | ) | |||||||||||||||
Net increase (decrease) in net assets resulting from shares transactions | 73,195,966 | 4,114,224 | (1,687,173 | ) | 7,516,679 | (1,349,964 | ) | (3,984,686 | ) | ||||||||||||||||||
Increase (Decrease) in Net Assets | 78,376,395 | 4,440,016 | (599,505 | ) | 8,148,415 | 1,145,576 | (4,457,997 | ) | |||||||||||||||||||
NET ASSETS: | |||||||||||||||||||||||||||
Beginning of year | 4,440,016 | — | 8,148,415 | — | 18,622,745 | 23,080,742 | |||||||||||||||||||||
End of year | $ | 82,816,411 | $ | 4,440,016 | $ | 7,548,910 | $ | 8,148,415 | $ | 19,768,321 | $ | 18,622,745 | |||||||||||||||
Undistributed net investment income at end of year | $ | 233,801 | $ | 16,149 | $ | 11,501 | $ | 17,915 | $ | 37,042 | $ | 33,461 | |||||||||||||||
CHANGES IN SHARES OUTSTANDING: | |||||||||||||||||||||||||||
Shares sold | 4,100,000 | 300,001 | 100,000 | 800,001 | 100,000 | 1,000,000 | |||||||||||||||||||||
Shares repurchased | (1,000,000 | ) | (100,000 | ) | (200,000 | ) | (400,000 | ) | (150,000 | ) | (1,150,000 | ) | |||||||||||||||
Shares outstanding, beginning of year | 200,001 | — | 400,001 | — | 700,000 | 850,000 | |||||||||||||||||||||
Shares outstanding, end of year | 3,300,001 | 200,001 | 300,001 | 400,001 | 650,000 | 700,000 |
97
Statements of Changes in Net Assets (Continued)
PowerShares Fundamental Pure Mid Growth Portfolio (PXMG) | PowerShares Fundamental Pure Mid Value Portfolio (PXMV) | PowerShares Fundamental Pure Small Core Portfolio (PXSC) | |||||||||||||||||||||||||
Year Ended April 30, 2013 | Year Ended April 30, 2012 | Year Ended April 30, 2013 | Year Ended April 30, 2012 | Year Ended April 30, 2013 | Year Ended April 30, 2012 | ||||||||||||||||||||||
OPERATIONS: | |||||||||||||||||||||||||||
Net investment income | $ | 904,339 | $ | 598,664 | $ | 607,661 | $ | 506,266 | $ | 259,345 | $ | 148,645 | |||||||||||||||
Net realized gain (loss) | 3,643,371 | 10,381,870 | 2,891,074 | 4,472,553 | 810,582 | 1,790,583 | |||||||||||||||||||||
Net increase from payment by affiliate (see Note 3) | — | — | — | — | — | — | |||||||||||||||||||||
Net change in unrealized appreciation (depreciation) | 7,042,985 | (20,861,947 | ) | 2,887,178 | (4,388,098 | ) | 1,020,540 | (2,831,971 | ) | ||||||||||||||||||
Net increase (decrease) in net assets resulting from operations | 11,590,695 | (9,881,413 | ) | 6,385,913 | 590,721 | 2,090,467 | (892,743 | ) | |||||||||||||||||||
DISTRIBUTIONS TO SHAREHOLDERS FROM: | |||||||||||||||||||||||||||
Net investment income | (795,069 | ) | (355,610 | ) | (648,717 | ) | (458,896 | ) | (259,833 | ) | (102,977 | ) | |||||||||||||||
SHAREHOLDER TRANSACTIONS: | |||||||||||||||||||||||||||
Proceeds from shares sold | 16,376,600 | 120,745,104 | 4,102,250 | 37,524,414 | 2,734,348 | 16,742,065 | |||||||||||||||||||||
Value of shares repurchased | (32,274,525 | ) | (153,595,166 | ) | (13,926,465 | ) | (46,219,014 | ) | (5,010,393 | ) | (19,002,641 | ) | |||||||||||||||
Net increase (decrease) in net assets resulting from shares transactions | (15,897,925 | ) | (32,850,062 | ) | (9,824,215 | ) | (8,694,600 | ) | (2,276,045 | ) | (2,260,576 | ) | |||||||||||||||
Increase (Decrease) in Net Assets | (5,102,299 | ) | (43,087,085 | ) | (4,087,019 | ) | (8,562,775 | ) | (445,411 | ) | (3,256,296 | ) | |||||||||||||||
NET ASSETS: | |||||||||||||||||||||||||||
Beginning of year | 87,203,402 | 130,290,487 | 32,407,709 | 40,970,484 | 15,735,047 | 18,991,343 | |||||||||||||||||||||
End of year | $ | 82,101,103 | $ | 87,203,402 | $ | 28,320,690 | $ | 32,407,709 | $ | 15,289,636 | $ | 15,735,047 | |||||||||||||||
Undistributed net investment income at end of year | $ | 346,402 | $ | 234,876 | $ | 37,009 | $ | 74,376 | $ | 53,467 | $ | 42,632 | |||||||||||||||
CHANGES IN SHARES OUTSTANDING: | |||||||||||||||||||||||||||
Shares sold | 650,000 | 5,350,000 | 200,000 | 2,250,000 | 100,000 | 700,000 | |||||||||||||||||||||
Shares repurchased | (1,350,000 | ) | (6,900,000 | ) | (750,000 | ) | (2,750,000 | ) | (200,000 | ) | (800,000 | ) | |||||||||||||||
Shares outstanding, beginning of year | 3,850,000 | 5,400,000 | 1,900,000 | 2,400,000 | 650,000 | 750,000 | |||||||||||||||||||||
Shares outstanding, end of year | 3,150,000 | 3,850,000 | 1,350,000 | 1,900,000 | 550,000 | 650,000 |
See Notes to Financial Statements.
98
PowerShares Fundamental Pure Small Growth Portfolio (PXSG) | PowerShares Fundamental Pure Small Value Portfolio (PXSV) | PowerShares Zacks Micro Cap Portfolio (PZI) | |||||||||||||||||||||||||
Year Ended April 30, 2013 | Year Ended April 30, 2012 | Year Ended April 30, 2013 | Year Ended April 30, 2012 | Year Ended April 30, 2013 | Year Ended April 30, 2012 | ||||||||||||||||||||||
OPERATIONS: | |||||||||||||||||||||||||||
Net investment income | $ | 196,216 | $ | 217,586 | $ | 873,607 | $ | 725,992 | $ | 531,305 | $ | 433,381 | |||||||||||||||
Net realized gain (loss) | 1,224,815 | (2,919,524 | ) | 5,434,528 | 6,460,920 | 4,356,483 | (1,747,389 | ) | |||||||||||||||||||
Net increase from payment by affiliate (see Note 3) | — | 12,745 | — | — | — | — | |||||||||||||||||||||
Net change in unrealized appreciation (depreciation) | 1,497,396 | (12,685,170 | ) | 2,795,165 | (10,394,660 | ) | 1,125,876 | (6,132,212 | ) | ||||||||||||||||||
Net increase (decrease) in net assets resulting from operations | 2,918,427 | (15,374,363 | ) | 9,103,300 | (3,207,748 | ) | 6,013,664 | (7,446,220 | ) | ||||||||||||||||||
DISTRIBUTIONS TO SHAREHOLDERS FROM: | |||||||||||||||||||||||||||
Net investment income | (218,960 | ) | — | (957,949 | ) | (687,907 | ) | (557,741 | ) | (599,475 | ) | ||||||||||||||||
SHAREHOLDER TRANSACTIONS: | |||||||||||||||||||||||||||
Proceeds from shares sold | 4,953,667 | 131,768,597 | 9,762,249 | 54,373,664 | 34,331,596 | 26,907,134 | |||||||||||||||||||||
Value of shares repurchased | (11,919,697 | ) | (194,932,390 | ) | (22,135,140 | ) | (70,706,299 | ) | (31,751,422 | ) | (83,806,961 | ) | |||||||||||||||
Net increase (decrease) in net assets resulting from shares transactions | (6,966,030 | ) | (63,163,793 | ) | (12,372,891 | ) | (16,332,635 | ) | 2,580,174 | (56,899,827 | ) | ||||||||||||||||
Increase (Decrease) in Net Assets | (4,266,563 | ) | (78,538,156 | ) | (4,227,540 | ) | (20,228,290 | ) | 8,036,097 | (64,945,522 | ) | ||||||||||||||||
NET ASSETS: | |||||||||||||||||||||||||||
Beginning of year | 30,912,651 | 109,450,807 | 52,311,585 | 72,539,875 | 34,018,707 | 98,964,229 | |||||||||||||||||||||
End of year | $ | 26,646,088 | $ | 30,912,651 | $ | 48,084,045 | $ | 52,311,585 | $ | 42,054,804 | $ | 34,018,707 | |||||||||||||||
Undistributed net investment income at end of year | $ | 189,920 | $ | 212,664 | $ | 59,627 | $ | 138,629 | $ | 128,568 | $ | 59,046 | |||||||||||||||
CHANGES IN SHARES OUTSTANDING: | |||||||||||||||||||||||||||
Shares sold | 250,000 | 7,200,000 | 500,000 | 3,350,000 | 2,700,000 | 2,450,000 | |||||||||||||||||||||
Shares repurchased | (650,000 | ) | (11,200,000 | ) | (1,250,000 | ) | (4,400,000 | ) | (2,600,000 | ) | (7,350,000 | ) | |||||||||||||||
Shares outstanding, beginning of year | 1,750,000 | 5,750,000 | 3,200,000 | 4,250,000 | 3,000,000 | 7,900,000 | |||||||||||||||||||||
Shares outstanding, end of year | 1,350,000 | 1,750,000 | 2,450,000 | 3,200,000 | 3,100,000 | 3,000,000 |
99
Financial Highlights
PowerShares Dynamic Large Cap Growth Portfolio (PWB)
Year Ended April 30, | |||||||||||||||||||||||
2013 | 2012 | 2011 | 2010 | 2009 | |||||||||||||||||||
PER SHARE OPERATING PERFORMANCE: | |||||||||||||||||||||||
Net asset value at beginning of year | $ | 18.73 | $ | 17.63 | $ | 14.91 | $ | 11.03 | $ | 17.33 | |||||||||||||
Net investment income(a) | 0.21 | 0.15 | 0.11 | 0.06 | 0.08 | ||||||||||||||||||
Net realized and unrealized gain (loss) on investments | 2.55 | 1.09 | 2.72 | 3.91 | (6.30 | ) | |||||||||||||||||
Total from investment operations | 2.76 | 1.24 | 2.83 | 3.97 | (6.22 | ) | |||||||||||||||||
Distributions to shareholders from: | |||||||||||||||||||||||
Net investment income | (0.20 | ) | (0.14 | ) | (0.11 | ) | (0.09 | ) | (0.08 | ) | |||||||||||||
Net asset value at end of year | $ | 21.29 | $ | 18.73 | $ | 17.63 | $ | 14.91 | $ | 11.03 | |||||||||||||
Market price at end of year(b) | $ | 21.28 | $ | 18.72 | $ | 17.63 | $ | 14.91 | $ | 11.03 | |||||||||||||
NET ASSET VALUE, TOTAL RETURN(c) | 14.91 | % | 7.18 | % | 19.08 | % | 36.15 | % | (35.93 | )% | |||||||||||||
MARKET PRICE TOTAL RETURN(c) | 14.92 | % | 7.12 | % | 19.08 | % | 36.15 | % | (35.93 | )% | |||||||||||||
RATIOS/SUPPLEMENTAL DATA: | |||||||||||||||||||||||
Net assets at end of year (000's omitted) | $ | 212,897 | $ | 191,013 | $ | 196,574 | $ | 230,334 | $ | 281,172 | |||||||||||||
Ratio to average net assets of: | |||||||||||||||||||||||
Expenses, after Waivers | 0.59 | % | 0.61 | % | 0.63 | % | 0.61 | % | 0.61 | % | |||||||||||||
Expenses, prior to Waivers | 0.59 | % | 0.62 | % | 0.64 | % | 0.61 | % | 0.60 | % | |||||||||||||
Net investment income, after Waivers | 1.08 | % | 0.89 | % | 0.73 | % | 0.45 | % | 0.60 | % | |||||||||||||
Portfolio turnover rate(d) | 47 | % | 64 | % | 45 | % | 67 | % | 88 | % |
PowerShares Dynamic Large Cap Value Portfolio (PWV)
Year Ended April 30, | |||||||||||||||||||||||
2013 | 2012 | 2011 | 2010 | 2009 | |||||||||||||||||||
PER SHARE OPERATING PERFORMANCE: | |||||||||||||||||||||||
Net asset value at beginning of year | $ | 20.73 | $ | 20.35 | $ | 18.05 | $ | 13.54 | $ | 19.27 | |||||||||||||
Net investment income(a) | 0.52 | 0.46 | 0.40 | 0.39 | 0.41 | ||||||||||||||||||
Net realized and unrealized gain (loss) on investments | 4.48 | 0.38 | 2.33 | 4.52 | (5.81 | ) | |||||||||||||||||
Total from investment operations | 5.00 | 0.84 | 2.73 | 4.91 | (5.40 | ) | |||||||||||||||||
Distributions to shareholders from: | |||||||||||||||||||||||
Net investment income | (0.52 | ) | (0.46 | ) | (0.43 | ) | (0.40 | ) | (0.33 | ) | |||||||||||||
Net asset value at end of year | $ | 25.21 | $ | 20.73 | $ | 20.35 | $ | 18.05 | $ | 13.54 | |||||||||||||
Market price at end of year(b) | $ | 25.22 | $ | 20.71 | $ | 20.36 | $ | 18.05 | $ | 13.55 | |||||||||||||
NET ASSET VALUE, TOTAL RETURN(c) | 24.55 | % | 4.34 | % | 15.50 | % | 36.69 | % | (28.30 | )% | |||||||||||||
MARKET PRICE TOTAL RETURN(c) | 24.72 | % | 4.20 | % | 15.49 | % | 36.67 | % | (28.21 | )% | |||||||||||||
RATIOS/SUPPLEMENTAL DATA: | |||||||||||||||||||||||
Net assets at end of year (000's omitted) | $ | 574,825 | $ | 419,740 | $ | 422,319 | $ | 349,265 | $ | 262,699 | |||||||||||||
Ratio to average net assets of: | |||||||||||||||||||||||
Expenses, after Waivers | 0.59 | % | 0.59 | % | 0.61 | % | 0.63 | % | 0.63 | % | |||||||||||||
Expenses, prior to Waivers | 0.59 | % | 0.59 | % | 0.61 | % | 0.60 | % | 0.61 | % | |||||||||||||
Net investment income, after Waivers | 2.36 | % | 2.39 | % | 2.22 | % | 2.46 | % | 2.71 | % | |||||||||||||
Portfolio turnover rate(d) | 58 | % | 41 | % | 40 | % | 47 | % | 77 | % |
(a) Based on average shares outstanding.
(b) The mean between the last bid and ask prices.
(c) Net asset value total 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. Market price total return is calculated assuming an initial investment made at the market price at the beginning of the period, reinvestment of all dividends and distributions at market price during the period, and sale at the market price on the last day of the period. Total investment returns calculated for a period of less than one year are not annualized.
(d) Portfolio turnover rate is not annualized and does not include securities received or delivered from processing creations or redemptions.
See Notes to Financial Statements.
100
Financial Highlights (Continued)
PowerShares Fundamental Pure Large Core Portfolio (PXLC)
Year Ended April 30, | |||||||||||||||||||||||
2013 | 2012 | 2011 | 2010 | 2009 | |||||||||||||||||||
PER SHARE OPERATING PERFORMANCE: | |||||||||||||||||||||||
Net asset value at beginning of year | $ | 26.66 | $ | 26.42 | $ | 23.26 | $ | 17.56 | $ | 25.92 | |||||||||||||
Net investment income(a) | 0.65 | 0.57 | 0.37 | 0.27 | 0.34 | ||||||||||||||||||
Net realized and unrealized gain (loss) on investments | 4.35 | 0.32 | 3.16 | 5.74 | (8.44 | ) | |||||||||||||||||
Total from investment operations | 5.00 | 0.89 | 3.53 | 6.01 | (8.10 | ) | |||||||||||||||||
Distributions to shareholders from: | |||||||||||||||||||||||
Net investment income | (0.69 | ) | (0.65 | ) | (0.37 | ) | (0.31 | ) | (0.26 | ) | |||||||||||||
Net asset value at end of year | $ | 30.97 | $ | 26.66 | $ | 26.42 | $ | 23.26 | $ | 17.56 | |||||||||||||
Market price at end of year(b) | $ | 30.98 | $ | 26.66 | $ | 26.42 | $ | 23.26 | $ | 17.55 | |||||||||||||
NET ASSET VALUE, TOTAL RETURN(c) | 19.10 | % | 3.64 | % | 15.40 | % | 34.56 | % | (31.47 | )% | |||||||||||||
MARKET PRICE TOTAL RETURN(c) | 19.15 | % | 3.64 | % | 15.40 | % | 34.64 | % | (31.48 | )% | |||||||||||||
RATIOS/SUPPLEMENTAL DATA: | |||||||||||||||||||||||
Net assets at end of year (000's omitted) | $ | 27,874 | $ | 25,326 | $ | 35,673 | $ | 38,376 | $ | 33,355 | |||||||||||||
Ratio to average net assets of: | |||||||||||||||||||||||
Expenses, after Waivers | 0.39 | % | 0.43 | % | 0.65 | % | 0.65 | % | 0.65 | % | |||||||||||||
Expenses, prior to Waivers | 0.80 | % | 0.90 | % | 0.99 | % | 0.88 | % | 0.93 | % | |||||||||||||
Net investment income, after Waivers | 2.38 | % | 2.32 | % | 1.61 | % | 1.32 | % | 1.71 | % | |||||||||||||
Portfolio turnover rate(d) | 43 | % | 58 | % | 41 | % | 62 | % | 57 | % |
PowerShares Fundamental Pure Large Growth Portfolio (PXLG)
Year Ended April 30, 2013 | For the Period June 13, 2011(e) Through April 30, 2012 | ||||||||||
PER SHARE OPERATING PERFORMANCE: | |||||||||||
Net asset value at beginning of year | $ | 22.20 | $ | 20.00 | |||||||
Net investment income(a) | 0.39 | 0.28 | |||||||||
Net realized and unrealized gain on investments | 2.87 | 2.09 | |||||||||
Total from investment operations | 3.26 | 2.37 | |||||||||
Distributions to shareholders from: | |||||||||||
Net investment income | (0.36 | ) | (0.17 | ) | |||||||
Net asset value at end of year | $ | 25.10 | $ | 22.20 | |||||||
Market price at end of year(b) | $ | 25.08 | $ | 22.19 | |||||||
NET ASSET VALUE, TOTAL RETURN(c) | 14.87 | % | 11.99 | %(f) | |||||||
MARKET PRICE TOTAL RETURN(c) | 14.83 | % | 11.94 | %(f) | |||||||
RATIOS/SUPPLEMENTAL DATA: | |||||||||||
Net assets at end of year (000's omitted) | $ | 82,816 | $ | 4,440 | |||||||
Ratio to average net assets of: | |||||||||||
Expenses, after Waivers | 0.39 | % | 0.39 | %(g) | |||||||
Expenses, prior to Waivers | 0.79 | % | 7.69 | %(g) | |||||||
Net investment income, after Waivers | 1.63 | % | 1.54 | %(g) | |||||||
Portfolio turnover rate(d) | 90 | % | 3 | % |
(a) Based on average shares outstanding.
(b) The mean between the last bid and ask prices.
(c) Net asset value total 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. Market price total return is calculated assuming an initial investment made at the market price at the beginning of the period, reinvestment of all dividends and distributions at market price during the period, and sale at the market price on the last day of the period. Total investment returns calculated for a period of less than one year are not annualized.
(d) Portfolio turnover rate is not annualized and does not include securities received or delivered from processing creations or redemptions.
(e) Commencement of Investment Operations.
(f) The net asset value total return from Fund Inception (June 16, 2011, the first day of trading on the Exchange) to April 30, 2012 was 13.81%. The market price total return from Fund Inception to April 30, 2012 was 13.87%.
(g) Annualized.
See Notes to Financial Statements.
101
Financial Highlights (Continued)
PowerShares Fundamental Pure Large Value Portfolio (PXLV)
Year Ended April 30, 2013 | For the Period June 13, 2011(a) Through April 30, 2012 | ||||||||||
PER SHARE OPERATING PERFORMANCE: | |||||||||||
Net asset value at beginning of year | $ | 20.37 | $ | 20.00 | |||||||
Net investment income(b) | 0.52 | 0.39 | |||||||||
Net realized and unrealized gain on investments | 4.77 | 0.33 | |||||||||
Total from investment operations | 5.29 | 0.72 | |||||||||
Distributions to shareholders from: | |||||||||||
Net investment income | (0.50 | ) | (0.35 | ) | |||||||
Net asset value at end of year | $ | 25.16 | $ | 20.37 | |||||||
Market price at end of year(c) | $ | 25.16 | $ | 20.35 | |||||||
NET ASSET VALUE, TOTAL RETURN(d) | 26.41 | % | 3.80 | %(e) | |||||||
MARKET PRICE TOTAL RETURN(d) | 26.53 | % | 3.70 | %(e) | |||||||
RATIOS/SUPPLEMENTAL DATA: | |||||||||||
Net assets at end of year (000's omitted) | $ | 7,549 | $ | 8,148 | |||||||
Ratio to average net assets of: | |||||||||||
Expenses, after Waivers | 0.39 | % | 0.39 | %(f) | |||||||
Expenses, prior to Waivers | 2.10 | % | 2.87 | %(f) | |||||||
Net investment income, after Waivers | 2.43 | % | 2.38 | %(f) | |||||||
Portfolio turnover rate(g) | 9 | % | 2 | % |
PowerShares Fundamental Pure Mid Core Portfolio (PXMC)
Year Ended April 30, | |||||||||||||||||||||||
2013 | 2012 | 2011 | 2010 | 2009 | |||||||||||||||||||
PER SHARE OPERATING PERFORMANCE: | |||||||||||||||||||||||
Net asset value at beginning of year | $ | 26.60 | $ | 27.15 | $ | 23.05 | $ | 16.30 | $ | 25.47 | |||||||||||||
Net investment income(b) | 0.43 | 0.29 | 0.21 | 0.18 | 0.13 | ||||||||||||||||||
Net realized and unrealized gain (loss) on investments | 3.80 | (0.57 | ) | 4.10 | 6.73 | (9.17 | ) | ||||||||||||||||
Total from investment operations | 4.23 | (0.28 | ) | 4.31 | 6.91 | (9.04 | ) | ||||||||||||||||
Distributions to shareholders from: | |||||||||||||||||||||||
Net investment income | (0.42 | ) | (0.27 | ) | (0.21 | ) | (0.16 | ) | (0.13 | ) | |||||||||||||
Net asset value at end of year | $ | 30.41 | $ | 26.60 | $ | 27.15 | $ | 23.05 | $ | 16.30 | |||||||||||||
Market price at end of year(c) | $ | 30.39 | $ | 26.62 | $ | 27.15 | $ | 23.04 | $ | 16.29 | |||||||||||||
NET ASSET VALUE, TOTAL RETURN(d) | 16.16 | % | (0.93 | )% | 18.84 | % | 42.59 | % | (35.57 | )% | |||||||||||||
MARKET PRICE TOTAL RETURN(d) | 16.00 | % | (0.85 | )% | 18.89 | % | 42.62 | % | (35.63 | )% | |||||||||||||
RATIOS/SUPPLEMENTAL DATA: | |||||||||||||||||||||||
Net assets at end of year (000's omitted) | $ | 19,768 | $ | 18,623 | $ | 23,081 | $ | 25,353 | $ | 17,929 | |||||||||||||
Ratio to average net assets of: | |||||||||||||||||||||||
Expenses, after Waivers | 0.39 | % | 0.43 | % | 0.65 | % | 0.65 | % | 0.65 | % | |||||||||||||
Expenses, prior to Waivers | 1.00 | % | 1.01 | % | 1.20 | % | 1.11 | % | 1.17 | % | |||||||||||||
Net investment income, after Waivers | 1.58 | % | 1.16 | % | 0.88 | % | 0.92 | % | 0.67 | % | |||||||||||||
Portfolio turnover rate(g) | 38 | % | 83 | % | 47 | % | 76 | % | 79 | % |
(a) Commencement of Investment Operations.
(b) Based on average shares outstanding.
(c) The mean between the last bid and ask prices.
(d) Net asset value total 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. Market price total return is calculated assuming an initial investment made at the market price at the beginning of the period, reinvestment of all dividends and distributions at market price during the period, and sale at the market price on the last day of the period. Total investment returns calculated for a period of less than one year are not annualized.
(e) The net asset value total return from Fund Inception (June 16, 2011, the first day of trading on the Exchange) to April 30, 2012 was 5.17%. The market price total return from Fund Inception to April 30, 2012 was 5.23%.
(f) Annualized.
(g) Portfolio turnover rate is not annualized and does not include securities received or delivered from processing creations or redemptions.
See Notes to Financial Statements.
102
Financial Highlights (Continued)
PowerShares Fundamental Pure Mid Growth Portfolio (PXMG)
Year Ended April 30, | |||||||||||||||||||||||
2013 | 2012 | 2011 | 2010 | 2009 | |||||||||||||||||||
PER SHARE OPERATING PERFORMANCE: | |||||||||||||||||||||||
Net asset value at beginning of year | $ | 22.65 | $ | 24.13 | $ | 19.11 | $ | 13.87 | $ | 22.29 | |||||||||||||
Net investment income (loss)(a) | 0.26 | 0.13 | (0.01 | ) | 0.00 | (b) | (0.01 | ) | |||||||||||||||
Net realized and unrealized gain (loss) on investments | 3.38 | (1.53 | ) | 5.09 | 5.25 | (8.41 | ) | ||||||||||||||||
Total from investment operations | 3.64 | (1.40 | ) | 5.08 | 5.25 | (8.42 | ) | ||||||||||||||||
Distributions to shareholders from: | |||||||||||||||||||||||
Net investment income | (0.23 | ) | (0.08 | ) | — | (0.00 | )(b) | — | |||||||||||||||
Return of capital | — | — | (0.06 | ) | (0.01 | ) | — | ||||||||||||||||
Total distributions | (0.23 | ) | (0.08 | ) | (0.06 | ) | (0.01 | ) | — | ||||||||||||||
Net asset value at end of year | $ | 26.06 | $ | 22.65 | $ | 24.13 | $ | 19.11 | $ | 13.87 | |||||||||||||
Market price at end of year(c) | $ | 26.04 | $ | 22.63 | $ | 24.13 | $ | 19.10 | $ | 13.85 | |||||||||||||
NET ASSET VALUE, TOTAL RETURN(d) | 16.23 | % | (5.74 | )% | 26.61 | % | 37.89 | % | (37.78 | )% | |||||||||||||
MARKET PRICE TOTAL RETURN(d) | 16.25 | % | (5.83 | )% | 26.67 | % | 38.02 | % | (37.86 | )% | |||||||||||||
RATIOS/SUPPLEMENTAL DATA: | |||||||||||||||||||||||
Net assets at end of year (000's omitted) | $ | 82,101 | $ | 87,203 | $ | 130,290 | $ | 128,044 | $ | 140,038 | |||||||||||||
Ratio to average net assets of: | |||||||||||||||||||||||
Expenses, after Waivers | 0.39 | % | 0.43 | % | 0.63 | % | 0.63 | % | 0.63 | % | |||||||||||||
Expenses, prior to Waivers | 0.54 | % | 0.55 | % | 0.69 | % | 0.66 | % | 0.61 | % | |||||||||||||
Net investment income (loss), after Waivers | 1.14 | % | 0.61 | % | (0.06 | )% | 0.03 | % | (0.07 | )% | |||||||||||||
Portfolio turnover rate(e) | 33 | % | 75 | % | 49 | % | 75 | % | 81 | % |
PowerShares Fundamental Pure Mid Value Portfolio (PXMV)
Year Ended April 30, | |||||||||||||||||||||||
2013 | 2012 | 2011 | 2010 | 2009 | |||||||||||||||||||
PER SHARE OPERATING PERFORMANCE: | |||||||||||||||||||||||
Net asset value at beginning of year | $ | 17.06 | $ | 17.07 | $ | 15.37 | $ | 11.16 | $ | 16.89 | |||||||||||||
Net investment income(a) | 0.37 | 0.25 | 0.15 | 0.23 | 0.26 | ||||||||||||||||||
Net realized and unrealized gain (loss) on investments | 3.94 | (0.03 | ) | 1.70 | 4.24 | (5.75 | ) | ||||||||||||||||
Total from investment operations | 4.31 | 0.22 | 1.85 | 4.47 | (5.49 | ) | |||||||||||||||||
Distributions to shareholders from: | |||||||||||||||||||||||
Net investment income | (0.39 | ) | (0.23 | ) | (0.15 | ) | (0.26 | ) | (0.24 | ) | |||||||||||||
Net asset value at end of year | $ | 20.98 | $ | 17.06 | $ | 17.07 | $ | 15.37 | $ | 11.16 | |||||||||||||
Market price at end of year(c) | $ | 20.98 | $ | 17.04 | $ | 17.07 | $ | 15.36 | $ | 11.13 | |||||||||||||
NET ASSET VALUE, TOTAL RETURN(d) | 25.74 | % | 1.42 | % | 12.16 | % | 40.58 | % | (32.71 | )% | |||||||||||||
MARKET PRICE TOTAL RETURN(d) | 25.89 | % | 1.30 | % | 12.24 | % | 40.88 | % | (32.89 | )% | |||||||||||||
RATIOS/SUPPLEMENTAL DATA: | |||||||||||||||||||||||
Net assets at end of year (000's omitted) | $ | 28,321 | $ | 32,408 | $ | 40,970 | $ | 43,818 | $ | 39,056 | |||||||||||||
Ratio to average net assets of: | |||||||||||||||||||||||
Expenses, after Waivers | 0.39 | % | 0.43 | % | 0.63 | % | 0.63 | % | 0.63 | % | |||||||||||||
Expenses, prior to Waivers | 0.82 | % | 0.79 | % | 0.91 | % | 0.84 | % | 0.78 | % | |||||||||||||
Net investment income, after Waivers | 2.08 | % | 1.57 | % | 0.99 | % | 1.76 | % | 1.95 | % | |||||||||||||
Portfolio turnover rate(e) | 25 | % | 83 | % | 65 | % | 86 | % | 94 | % |
(a) Based on average shares outstanding.
(b) Amount represents less than $0.005.
(c) The mean between the last bid and ask prices.
(d) Net asset value total 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. Market price total return is calculated assuming an initial investment made at the market price at the beginning of the period, reinvestment of all dividends and distributions at market price during the period, and sale at the market price on the last day of the period. Total investment returns calculated for a period of less than one year are not annualized.
(e) Portfolio turnover rate is not annualized and does not include securities received or delivered from processing creations or redemptions.
See Notes to Financial Statements.
103
Financial Highlights (Continued)
PowerShares Fundamental Pure Small Core Portfolio (PXSC)
Year Ended April 30, | |||||||||||||||||||||||
2013 | 2012 | 2011 | 2010 | 2009 | |||||||||||||||||||
PER SHARE OPERATING PERFORMANCE: | |||||||||||||||||||||||
Net asset value at beginning of year | $ | 24.21 | $ | 25.32 | $ | 21.07 | $ | 15.03 | $ | 23.31 | |||||||||||||
Net investment income(a) | 0.46 | 0.22 | 0.09 | 0.11 | 0.08 | ||||||||||||||||||
Net realized and unrealized gain (loss) on investments | 3.60 | (1.18 | ) | 4.25 | 6.08 | (8.31 | ) | ||||||||||||||||
Total from investment operations | 4.06 | (0.96 | ) | 4.34 | 6.19 | (8.23 | ) | ||||||||||||||||
Distributions to shareholders from: | |||||||||||||||||||||||
Net investment income | (0.47 | ) | (0.15 | ) | (0.09 | ) | (0.14 | ) | (0.05 | ) | |||||||||||||
Return of capital | — | — | — | (0.01 | ) | — | |||||||||||||||||
Total distributions | (0.47 | ) | (0.15 | ) | (0.09 | ) | (0.15 | ) | (0.05 | ) | |||||||||||||
Net asset value at end of year | $ | 27.80 | $ | 24.21 | $ | 25.32 | $ | 21.07 | $ | 15.03 | |||||||||||||
Market price at end of year(b) | $ | 27.76 | $ | 24.18 | $ | 25.33 | $ | 21.05 | $ | 15.00 | |||||||||||||
NET ASSET VALUE, TOTAL RETURN(c) | 17.05 | % | (3.70 | )% | 20.64 | % | 41.37 | % | (35.34 | )% | |||||||||||||
MARKET PRICE TOTAL RETURN(c) | 17.03 | % | (3.85 | )% | 20.80 | % | 41.52 | % | (35.41 | )% | |||||||||||||
RATIOS/SUPPLEMENTAL DATA: | |||||||||||||||||||||||
Net assets at end of year (000's omitted) | $ | 15,290 | $ | 15,735 | $ | 18,991 | $ | 18,960 | $ | 13,530 | |||||||||||||
Ratio to average net assets of: | |||||||||||||||||||||||
Expenses, after Waivers | 0.39 | % | 0.43 | % | 0.65 | % | 0.65 | % | 0.65 | % | |||||||||||||
Expenses, prior to Waivers | 1.22 | % | 1.25 | % | 1.41 | % | 1.26 | % | 1.35 | % | |||||||||||||
Net investment income, after Waivers | 1.88 | % | 0.97 | % | 0.42 | % | 0.59 | % | 0.47 | % | |||||||||||||
Portfolio turnover rate(d) | 45 | % | 97 | % | 68 | % | 93 | % | 81 | % |
PowerShares Fundamental Pure Small Growth Portfolio (PXSG)
Year Ended April 30, | |||||||||||||||||||||||
2013 | 2012 | 2011 | 2010 | 2009 | |||||||||||||||||||
PER SHARE OPERATING PERFORMANCE: | |||||||||||||||||||||||
Net asset value at beginning of year | $ | 17.66 | $ | 19.03 | $ | 14.12 | $ | 10.49 | $ | 15.71 | |||||||||||||
Net investment income (loss)(a) | 0.13 | 0.07 | (0.05 | ) | 0.05 | 0.01 | |||||||||||||||||
Net realized and unrealized gain (loss) on investments | 2.08 | (1.44 | ) | 4.96 | 3.67 | (5.23 | ) | ||||||||||||||||
Total from investment operations | 2.21 | (1.37 | ) | 4.91 | 3.72 | (5.22 | ) | ||||||||||||||||
Distributions to shareholders from: | |||||||||||||||||||||||
Net investment income | (0.13 | ) | — | — | (0.07 | ) | — | ||||||||||||||||
Return of capital | — | — | — | (0.02 | ) | — | |||||||||||||||||
Total distributions | (0.13 | ) | — | — | (0.09 | ) | — | ||||||||||||||||
Net asset value at end of year | $ | 19.74 | $ | 17.66 | $ | 19.03 | $ | 14.12 | $ | 10.49 | |||||||||||||
Market price at end of year(b) | $ | 19.72 | $ | 17.64 | $ | 19.05 | $ | 14.10 | $ | 10.48 | |||||||||||||
NET ASSET VALUE, TOTAL RETURN(c) | 12.63 | % | (7.20 | )% | 34.77 | % | 35.60 | % | (33.23 | )% | |||||||||||||
MARKET PRICE TOTAL RETURN(c) | 12.65 | % | (7.40 | )% | 35.11 | % | 35.54 | % | (33.25 | )% | |||||||||||||
RATIOS/SUPPLEMENTAL DATA: | |||||||||||||||||||||||
Net assets at end of year (000's omitted) | $ | 26,646 | $ | 30,913 | $ | 109,451 | $ | 32,473 | $ | 31,484 | |||||||||||||
Ratio to average net assets of: | |||||||||||||||||||||||
Expenses, after Waivers(e) | 0.39 | % | 0.48 | % | 0.63 | % | 0.63 | % | 0.63 | % | |||||||||||||
Expenses, prior to Waivers(e) | 0.92 | % | 0.69 | % | 0.93 | % | 0.94 | % | 0.86 | % | |||||||||||||
Net investment income (loss), after Waivers | 0.72 | % | 0.41 | % | (0.37 | )% | 0.41 | % | 0.11 | % | |||||||||||||
Portfolio turnover rate(d) | 39 | % | 189 | % | 57 | % | 113 | % | 109 | % |
(a) Based on average shares outstanding.
(b) The mean between the last bid and ask prices.
(c) Net assets value total 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. Market price total return is calculated assuming an initial investment made at the market price at the beginning at the period, reinvestment of all dividends and distributions at market price during the period, and sale at the market price on the last day of the period. Total investment returns calculated for a period of less than one year are not annualized.
(d) Portfolio turnover rate is not annualized and does not include securities received or delivered from processing creations or redemptions.
(e) In addition to the fees and expenses which the Fund bears directly, the Fund indirectly bears a pro rata share of the fees and expenses of the underlying funds in which the Fund invests. Such indirect expenses are not included in the expense ratio shown. Estimated investment company expenses are not expenses that are incurred directly by the Fund. They are expenses that are incurred directly by the investment companies and are deducted from the value of the funds that the Fund invests in. The effect of the estimated investment company expenses that the Fund bears indirectly is included in the Fund's total return.
See Notes to Financial Statements.
104
Financial Highlights (Continued)
PowerShares Fundamental Pure Small Value Portfolio (PXSV)
Year Ended April 30, | |||||||||||||||||||||||
2013 | 2012 | 2011 | 2010 | 2009 | |||||||||||||||||||
PER SHARE OPERATING PERFORMANCE: | |||||||||||||||||||||||
Net asset value at beginning of year | $ | 16.35 | $ | 17.07 | $ | 14.64 | $ | 10.38 | $ | 15.80 | |||||||||||||
Net investment income(a) | 0.32 | 0.19 | 0.16 | 0.09 | 0.12 | ||||||||||||||||||
Net realized and unrealized gain (loss) on investments | 3.31 | (0.72 | ) | 2.45 | 4.25 | (5.43 | ) | ||||||||||||||||
Total from investment operations | 3.63 | (0.53 | ) | 2.61 | 4.34 | (5.31 | ) | ||||||||||||||||
Distributions to shareholders from: | |||||||||||||||||||||||
Net investment income | (0.35 | ) | (0.19 | ) | (0.18 | ) | (0.08 | ) | (0.11 | ) | |||||||||||||
Net asset value at end of year | $ | 19.63 | $ | 16.35 | $ | 17.07 | $ | 14.64 | $ | 10.38 | |||||||||||||
Market price at end of year(b) | $ | 19.61 | $ | 16.33 | $ | 17.08 | $ | 14.62 | $ | 10.36 | |||||||||||||
NET ASSET VALUE, TOTAL RETURN(c) | 22.56 | % | (3.01 | )% | 18.03 | % | 42.03 | % | (33.69 | )% | |||||||||||||
MARKET PRICE TOTAL RETURN(c) | 22.58 | % | (3.18 | )% | 18.26 | % | 42.11 | % | (33.78 | )% | |||||||||||||
RATIOS/SUPPLEMENTAL DATA: | |||||||||||||||||||||||
Net assets at end of year (000's omitted) | $ | 48,084 | $ | 52,312 | $ | 72,540 | $ | 72,453 | $ | 62,253 | |||||||||||||
Ratio to average net assets of: | |||||||||||||||||||||||
Expenses, after Waivers | 0.39 | % | 0.43 | % | 0.63 | % | 0.63 | % | 0.63 | % | |||||||||||||
Expenses, prior to Waivers | 0.70 | % | 0.64 | % | 0.80 | % | 0.74 | % | 0.73 | % | |||||||||||||
Net investment income, after Waivers | 1.87 | % | 1.28 | % | 1.14 | % | 0.73 | % | 1.00 | % | |||||||||||||
Portfolio turnover rate(d) | 31 | % | 109 | % | 90 | % | 116 | % | 98 | % |
PowerShares Zacks Micro Cap Portfolio (PZI)
Year Ended April 30, | |||||||||||||||||||||||
2013 | 2012 | 2011 | 2010 | 2009 | |||||||||||||||||||
PER SHARE OPERATING PERFORMANCE: | |||||||||||||||||||||||
Net asset value at beginning of year | $ | 11.34 | $ | 12.53 | $ | 11.69 | $ | 8.10 | $ | 13.63 | |||||||||||||
Net investment income(a) | 0.20 | 0.10 | 0.04 | 0.04 | 0.12 | ||||||||||||||||||
Net realized and unrealized gain (loss) on investments | 2.25 | (1.16 | ) | 0.88 | 3.62 | (5.48 | ) | ||||||||||||||||
Total from investment operations | 2.45 | (1.06 | ) | 0.92 | 3.66 | (5.36 | ) | ||||||||||||||||
Distributions to shareholders from: | |||||||||||||||||||||||
Net investment income | (0.22 | ) | (0.13 | ) | (0.08 | ) | (0.07 | ) | (0.17 | ) | |||||||||||||
Net asset value at end of year | $ | 13.57 | $ | 11.34 | $ | 12.53 | $ | 11.69 | $ | 8.10 | |||||||||||||
Market price at end of year(b) | $ | 13.54 | $ | 11.32 | $ | 12.52 | $ | 11.68 | $ | 8.10 | |||||||||||||
NET ASSET VALUE, TOTAL RETURN(c) | 21.95 | % | (8.34 | )% | 7.97 | % | 45.49 | % | (39.70 | )% | |||||||||||||
MARKET PRICE TOTAL RETURN(c) | 21.90 | % | (8.42 | )% | 7.97 | % | 45.37 | % | (39.66 | )% | |||||||||||||
RATIOS/SUPPLEMENTAL DATA: | |||||||||||||||||||||||
Net assets at end of year (000's omitted) | $ | 42,055 | $ | 34,019 | $ | 98,964 | $ | 53,758 | $ | 46,960 | |||||||||||||
Ratio to average net assets of: | |||||||||||||||||||||||
Expenses, after Waivers(e) | 0.70 | % | 0.70 | % | 0.70 | % | 0.70 | % | 0.70 | % | |||||||||||||
Expenses, prior to Waivers(e) | 0.98 | % | 0.92 | % | 0.85 | % | 0.93 | % | 0.86 | % | |||||||||||||
Net investment income, after Waivers | 1.72 | % | 0.92 | % | 0.39 | % | 0.38 | % | 1.11 | % | |||||||||||||
Portfolio turnover rate(d) | 96 | % | 67 | % | 61 | % | 78 | % | 51 | % |
(a) Based on average shares outstanding.
(b) The mean between the last bid and ask prices.
(c) Net asset value total 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. Market price total return is calculated assuming an initial investment made at the market price at the beginning of the period, reinvestment of all dividends and distributions at market price during the period, and sale at the market price on the last day of the period. Total investment returns calculated for a period of less than one year are not annualized.
(d) Portfolio turnover rate is not annualized and does not include securities received or delivered from processing creations or redemptions.
(e) In addition to the fees and expenses which the Fund bears directly, the Fund indirectly bears a pro rata share of the fees and expenses of the underlying funds in which the Fund invests. Such indirect expenses are not included in the expense ratio shown. Estimated investment company expenses are not expenses that are incurred directly by the Fund. They are expenses that are incurred directly by the investment companies and are deducted from the value of the funds that the Fund invests in. The effect of the estimated investment company expenses that the Fund bears indirectly is included in the Fund's total return.
See Notes to Financial Statements.
105
Notes to Financial Statements
PowerShares Exchange-Traded Fund Trust
April 30, 2013
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 April 30, 2013, the Trust offered fifty-five portfolios. This report includes the following portfolios:
Full Name | Short Name | ||||||
PowerShares Dynamic Large Cap Growth Portfolio (PWB) | "Dynamic Large Cap Growth Portfolio" | ||||||
PowerShares Dynamic Large Cap Value Portfolio (PWV) | "Dynamic Large Cap Value Portfolio" | ||||||
PowerShares Fundamental Pure Large Core Portfolio (PXLC) | "Fundamental Pure Large Core Portfolio" | ||||||
PowerShares Fundamental Pure Large Growth Portfolio (PXLG) | "Fundamental Pure Large Growth Portfolio" | ||||||
PowerShares Fundamental Pure Large Value Portfolio (PXLV) | "Fundamental Pure Large Value Portfolio" | ||||||
PowerShares Fundamental Pure Mid Core Portfolio (PXMC) | "Fundamental Pure Mid Core Portfolio" | ||||||
PowerShares Fundamental Pure Mid Growth Portfolio (PXMG) | "Fundamental Pure Mid Growth Portfolio" | ||||||
PowerShares Fundamental Pure Mid Value Portfolio (PXMV) | "Fundamental Pure Mid Value Portfolio" | ||||||
PowerShares Fundamental Pure Small Core Portfolio (PXSC) | "Fundamental Pure Small Core Portfolio" | ||||||
PowerShares Fundamental Pure Small Growth Portfolio (PXSG) | "Fundamental Pure Small Growth Portfolio" | ||||||
PowerShares Fundamental Pure Small Value Portfolio (PXSV) | "Fundamental Pure Small Value Portfolio" | ||||||
PowerShares Zacks Micro Cap Portfolio (PZI) | "Zacks Micro Cap Portfolio" |
Each portfolio (each, a "Fund" and collectively, the "Funds") represents a separate series of the Trust. The shares of the Funds are referred to herein as "Shares" or "Fund's Shares." Each Fund's Shares are listed and traded on NYSE Arca, Inc.
The market prices of each Fund's Shares may differ to some degree from the Fund's net asset value ("NAV"). Unlike conventional mutual funds, each Fund issues and redeems Shares on a continuous basis, at NAV, 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 each Fund's relevant index. Except when aggregated in Creation Units by Authorized Participants, the Shares are not individually redeemable securities of the Funds.
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The investment objective of each Fund is to seek investment results that generally correspond (before fees and expenses) to the price and yield of its respective index listed below (each, an "Underlying Index"):
Fund | Index | ||||||
Dynamic Large Cap Growth Portfolio | Dynamic Large Cap Growth IntellidexSM Index | ||||||
Dynamic Large Cap Value Portfolio | Dynamic Large Cap Value IntellidexSM Index | ||||||
Fundamental Pure Large Core Portfolio | RAFI® Fundamental Large Core Index | ||||||
Fundamental Pure Large Growth Portfolio | RAFI® Fundamental Large Growth Index | ||||||
Fundamental Pure Large Value Portfolio | RAFI® Fundamental Large Value Index | ||||||
Fundamental Pure Mid Core Portfolio | RAFI® Fundamental Mid Core Index | ||||||
Fundamental Pure Mid Growth Portfolio | RAFI® Fundamental Mid Growth Index | ||||||
Fundamental Pure Mid Value Portfolio | RAFI® Fundamental Mid Value Index | ||||||
Fundamental Pure Small Core Portfolio | RAFI® Fundamental Small Core Index | ||||||
Fundamental Pure Small Growth Portfolio | RAFI® Fundamental Small Growth Index | ||||||
Fundamental Pure Small Value Portfolio | RAFI® Fundamental Small Value Index | ||||||
Zacks Micro Cap Portfolio | Zacks Micro Cap IndexTM |
Note 2. Significant Accounting Policies
The preparation of the financial statements in accordance with accounting principles generally accepted in the United States of America ("GAAP") 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. In addition, the Funds monitor for material events or transactions that may occur or become known after the period-end date and before the date the financial statements are released to print.
A. Security Valuation
Securities, including restricted securities, are valued according to the following policies.
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 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 and closed-end registered investment companies that do not trade on an exchange are valued at the end-of-day NAV per share. Investments in open-end and closed-end registered investment companies that trade on an exchange are valued at the last sales price as of the close of the customary trading session on the exchange where the security is principally traded.
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 (for unlisted equities), yield (for debt obligations), quality, type of issue, coupon rate (for debt
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obligations), maturity (for debt obligations), individual trading characteristics and other market data. Securities with a demand feature exercisable within one to seven days are valued at par. Debt obligations are subject to interest rate and credit risks. In addition, all debt obligations involve some risk of default with respect to interest and/or principal payments.
Foreign securities' (including foreign exchange contracts) prices 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 New York Stock Exchange ("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 the Adviser determines are significant and 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 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' prices 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, American Depositary Receipts 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 became unreliable are valued at fair value as determined in good faith 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. Because of the inherent uncertainties of valuation, the values reflected in the financial statements may materially differ from the value received upon actual sale of those investments.
B. Other Risks
Index Risk. Unlike many investment companies, the Funds do not utilize an investing strategy that seeks returns in excess of each Fund's respective Underlying Index. Therefore, a Fund would not necessarily buy or sell a security unless that security is added or removed, respectively, from its respective Underlying Index, even if that security generally is underperforming.
Equity Risk. Equity risk is the risk that the value of the securities a Fund holds will fall due to general market and economic conditions, perceptions regarding the industries in which the issuers of securities a Fund holds participate or factors relating to specific companies in which a Fund invests. For example, an
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April 30, 2013
adverse event, such as an unfavorable earnings report, may depress the value of securities a Fund holds; the price of securities may be particularly sensitive to general movements in the stock market; or a drop in the stock market may depress the price of most or all of the securities a Fund holds. In addition, securities of an issuer in a Fund's portfolio may decline in price if the issuer fails to make anticipated dividend payments because, among other reasons, the issuer of the security experiences a decline in its financial condition.
Industry Concentration Risk. In following its methodology, each Fund's Underlying Index from time to time may be concentrated to a significant degree in securities of issuers located in a single industry or a sector. To the extent that an Underlying Index concentrates in the securities of issuers in a particular industry or sector, each Fund will also concentrate its investments to approximately the same extent. By concentrating its investments in an industry or sector, a Fund may face more risks than if it were diversified broadly over numerous industries or sectors. In addition, at times, an industry or sector may be out of favor and underperform other industries or the market as a whole. Any factors detrimental to the performance of such industry or sector will disproportionately impact a Fund's NAV.
Non-Diversified Fund Risk. Fundamental Pure Large Growth Portfolio and Fundamental Pure Large Value Portfolio are non-diversified and can invest a greater portion of its assets in securities of individual issuers than diversified funds. 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. This may increase the Funds' volatility and cause the performance of a relatively small number of issuers to have a greater impact on a Fund's performance.
Non-Correlation Risk. Each Fund's return may not match the return of its Underlying Index for a number of reasons. For example, each Fund incurs operating expenses not applicable to its Underlying Index, and incurs costs in buying and selling securities, especially when rebalancing the securities holdings to reflect changes in the composition of its Underlying Index. In addition, the performance of each Fund and its Underlying Index may vary due to asset valuation differences and differences between each Fund's portfolio and its Underlying Index resulting from legal restrictions, cost or liquidity constraints.
Core Risk. For Fundamental Pure Large Core Portfolio, Fundamental Pure Mid Core Portfolio and Fundamental Pure Small Core Portfolio, the returns on "core" securities may or may not move in tandem with the returns on other styles of investing or the overall stock market. Thus, the value of the Fund's investments will vary and at times may be lower or higher than that of other types of investments.
"Fundamentally Large" Company Risk. For Fundamental Pure Large Core Portfolio, Fundamental Pure Large Growth Portfolio and Fundamental Pure Large Value Portfolio, returns on investments in common stocks of "fundamentally large" U.S. companies could trail the returns on investments in common stocks of smaller companies or other large companies based on market capitalization.
"Fundamentally Mid-Sized" Company Risk. For Fundamental Pure Mid Core Portfolio, Fundamental Pure Mid Growth Portfolio and Fundamental Pure Mid Value Portfolio, investing in common stocks of "fundamentally mid-sized" companies involves greater risk than customarily is associated with investing in larger, more established companies. These companies' common stocks may be more volatile and less liquid than those of more established companies. These common stocks may have returns that vary, sometimes significantly, from the overall stock market. Often "fundamentally mid-sized" companies and the industries in which they focus are still evolving and, as a result, they may be more sensitive to changing market conditions.
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"Fundamentally Small" Company Risk. For Fundamental Pure Small Core Portfolio, Fundamental Pure Small Growth Portfolio and Fundamental Pure Small Value Portfolio, investing in common stocks of "fundamentally small" companies involves greater risk than customarily in associated with investing in larger, more established companies. These companies' common stocks may be more volatile and less liquid than those of more established companies. These common stocks may have returns that vary, sometimes significantly, from the overall stock market. Often "fundamentally small" companies and the industries in which they focus are still evolving and, as a result, they may be more sensitive to changing market conditions.
Growth Risk. For Dynamic Large Cap Growth Portfolio, Fundamental Pure Large Growth Portfolio, Fundamental Pure Mid Growth Portfolio and Fundamental Pure Small Growth Portfolio, the market values of "growth" securities may be more volatile than other types of investments. The returns on "growth" securities may or may not move in tandem with the returns on other styles of investing or the overall stock market. Thus, the value of the Fund's investments will vary and at times may be lower or higher than that of other types of investments.
Micro Capitalization Company Risk. The Zacks Micro Cap Portfolio's investments in the securities of micro capitalization companies involve substantially greater risks of loss and price fluctuations. Micro capitalization companies carry additional risks because their earnings and revenues tend to be less predictable (and some companies may be experiencing significant losses), and their share prices tend to be more volatile and their markets less liquid than companies with larger market capitalizations. Also, it may take a long time before the Fund realizes a gain, if any, on an investment in a micro capitalization company.
Value Risk. For Dynamic Large Cap Value Portfolio, Fundamental Pure Large Value Portfolio, Fundamental Pure Mid Value Portfolio and Fundamental Pure Small Value Portfolio, "Value" securities are subject to the risk that the valuations never improve or that the returns on "value" securities are less than returns on other styles of investing or the overall stock market. Thus, the value of the Fund's investments will vary and at times may be lower or higher than that of other types of investments.
C. Federal Income Taxes
Each Fund intends to comply with the provisions of the Internal Revenue Code of 1986, as amended (the "Internal Revenue Code"), applicable to regulated investment companies and to 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 recorded in the financial statements.
Income and capital gain distributions are determined in accordance with federal income tax regulations, which may differ from GAAP. These timing 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 U.S. federal tax returns and tax returns in 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.
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D. Investment Transactions and Investment Income
Investment transactions are accounted for on a trade date basis. Realized gains and losses from the sale or disposition of securities are computed on the specific identified cost basis. Interest income is recorded on the accrual basis. Dividend income (net of withholding tax, if any) is recorded on the ex-dividend date. Dividends and interest received by a 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.
Corporate actions (including cash dividends) are recorded net of non-reclaimable foreign tax withholdings on the ex-dividend date.
E. Expenses
Expenses of the Trust that are directly identifiable to a specific Fund are applied to that Fund. Expenses of the Trust that 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 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 related to its respective Underlying Index, any distribution fees or expenses, litigation expenses, fees payable to the Trust's Board members who are not "interested persons" (as defined in the 1940 Act) of the Trust (the "Independent Trustees") or Invesco PowerShares Capital Management LLC (the "Adviser"), expenses incurred in connection with the Board members' services, including travel expenses and legal fees of counsel for the Independent Trustees, acquired fund fees and expenses, if any and extraordinary expenses.
To the extent a Fund invests in other investment companies, the expenses shown in the accompanying financial statements reflect the expenses of the Fund and do not include any expenses of the investment companies in which it invests. The effects of such investment companies' expenses are included in the realized and unrealized gain or loss on the investments in the investment companies.
F. Dividends and Distributions to Shareholders
Each Fund declares and pays dividends from net investment income, if any, to its shareholders quarterly and records such dividends on ex-dividend date. Generally, each Fund distributes net realized taxable capital gains, if any, annually in cash and records them on ex-dividend date. Such distributions on a tax basis are determined in conformity with federal income tax regulations, which may differ from GAAP. 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. Change in Accounting Policy – Equalization
The Funds previously followed the accounting practice known as equalization. Equalization accounting is utilized for book purposes to keep the continuing shareholders' per share equity in undistributed net investment income from being affected by the continuous sales and redemptions of capital shares. During the fiscal year ended April 30, 2013, all Funds discontinued the practice of equalization accounting for book purposes. The prior period financial statements have been restated to reflect the accounting change.
The change in policy has been accounted for in accordance with ASC 250 "Accounting Changes and Error Corrections." The change was implemented for consistent application of book and tax treatment related to
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April 30, 2013
the Funds' distributions. The result of the policy change did not have an impact on the Funds' net assets, net increase/decrease in net assets resulting from operations or per share net asset value. Additionally, the change does not have an impact on the amount or tax character of a Fund's distributions to shareholders or net asset value total return.
For financial reporting purposes, the amounts were reported in the Statements of Changes in Net Assets as "Undistributed net investment income (loss) included in the price of units issued and redeemed" as a component of the "Net increase (decrease) in net assets resulting from operations" with an offsetting amount included in "Net income (loss) equalization" included in the subtotal "Net increase (decrease) in net assets resulting from share transactions." The amount of equalization charges or credits previously reported and the amount in the current period had the change not been made were as follows:
Statements of Changes in Net Assets | |||||||||||
Net income (loss) equalization* | |||||||||||
Year ended April 30, 2013 | Year ended April 30, 2012 | ||||||||||
Dynamic Large Cap Growth Portfolio | $ | 27,464 | $ | 5,376 | |||||||
Dynamic Large Cap Value Portfolio | (247,087 | ) | 69,378 | ||||||||
Fundamental Pure Large Core Portfolio | (17,857 | ) | 50,168 | ||||||||
Fundamental Pure Large Growth Portfolio | — | — | |||||||||
Fundamental Pure Large Value Portfolio | — | — | |||||||||
Fundamental Pure Mid Core Portfolio | 3,791 | 5,615 | |||||||||
Fundamental Pure Mid Growth Portfolio | 51,729 | 17,731 | |||||||||
Fundamental Pure Mid Value Portfolio | 4,330 | 13,610 | |||||||||
Fundamental Pure Small Core Portfolio | 9,054 | 5,457 | |||||||||
Fundamental Pure Small Growth Portfolio | 5,291 | (285,373 | ) | ||||||||
Fundamental Pure Small Value Portfolio | (1,318 | ) | (4,399 | ) | |||||||
Zacks Micro Cap Portfolio | (14,808 | ) | (255,399 | ) |
* An equal offsetting amount was made to the operations section of the Statements of Changes in Net Assets.
The per share impact of the net equalization charges and credits disclosed in previous financial statements and the amount in the current period had the change not been made were as follows:
Financial Highlights | |||||||||||||||||||||||
Year Ended April 30, | |||||||||||||||||||||||
2013 | 2012 | 2011 | 2010 | 2009 | |||||||||||||||||||
Dynamic Large Cap Growth Portfolio | $ | (0.00 | ) | $ | (0.00 | ) | $ | (0.00 | ) | $ | (0.00 | ) | $ | (0.02 | ) | ||||||||
Dynamic Large Cap Value Portfolio | 0.01 | (0.00 | ) | 0.00 | 0.01 | 0.02 | |||||||||||||||||
Fundamental Pure Large Core Portfolio | 0.02 | (0.05 | ) | (0.03 | ) | (0.01 | ) | 0.04 | |||||||||||||||
Fundamental Pure Large Growth Portfolio | — | — | (a) | — | — | — | |||||||||||||||||
Fundamental Pure Large Value Portfolio | — | — | (a) | — | — | — | |||||||||||||||||
Fundamental Pure Mid Core Portfolio | (0.01 | ) | (0.01 | ) | (0.00 | ) | (0.00 | ) | 0.01 | ||||||||||||||
Fundamental Pure Mid Growth Portfolio | (0.01 | ) | (0.00 | ) | 0.00 | (0.00 | ) | 0.01 | |||||||||||||||
Fundamental Pure Mid Value Portfolio | (0.00 | ) | (0.01 | ) | (0.00 | ) | (0.00 | ) | (0.01 | ) | |||||||||||||
Fundamental Pure Small Core Portfolio | (0.02 | ) | (0.01 | ) | (0.00 | ) | 0.00 | 0.01 |
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Notes to Financial Statements (Continued)
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April 30, 2013
Financial Highlights | |||||||||||||||||||||||
Year Ended April 30, | |||||||||||||||||||||||
2013 | 2012 | 2011 | 2010 | 2009 | |||||||||||||||||||
Fundamental Pure Small Growth Portfolio | $ | (0.00 | ) | $ | 0.09 | $ | (0.10 | ) | $ | 0.01 | $ | 0.00 | |||||||||||
Fundamental Pure Small Value Portfolio | 0.00 | 0.00 | (0.00 | ) | 0.00 | 0.00 | |||||||||||||||||
Zacks Micro Cap Portfolio | 0.01 | 0.06 | (0.03 | ) | 0.01 | 0.00 |
(a) Period June 13, 2011 (commencement of Investment Operations) through April 30, 2012.
H. Securities Lending
Fundamental Pure Small Value Portfolio and Zacks Micro Cap Portfolio may lend portfolio securities having a market value up to one-third of each Fund's total assets. Such loans are secured by cash collateral equal to no less than 102% of the market value of the loaned securities determined daily by the securities lending provider. Cash collateral received in connection with these loans is invested in an affiliated money market fund and is shown as such on the Schedule of Investments. It is the policy of these Funds to obtain additional collateral from or return excess collateral to the borrower by the end of the next business day, following the valuation date of the securities loaned. Therefore, the value of the collateral held may be temporarily less than the value of the securities on loan. Lending securities entails a risk of loss to a Fund, if and to the extent that, the market value of the securities loaned were to increase, and the borrower did not increase the collateral accordingly, and the borrower fails to return the securities. Upon the failure of the borrower to return the securities, collateral may be liquidated and the securities may be purchased on the open market to replace the loaned securities. A Fund could experience delays and costs in gaining access to the collateral. A Fund bears the risk of any deficiency in the amount of the collateral available for return to the borrower due to any loss on the collateral invested. Dividends received on cash collateral investments for securities lending transactions, which are net of compensation to counterparties, are included in Securities lending income on the Statements of Operations. The aggregate value of securities out on loan is shown on the Statements of Assets and Liabilities, if any.
Note 3. Investment Advisory Agreement and Other Agreements
The Trust has entered into an Investment Advisory Agreement with the Adviser pursuant to which the Adviser has overall responsibility 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 (except for the Dynamic Large Cap Growth Portfolio, Dynamic Large Cap Value Portfolio and Zacks Micro Cap Portfolio) has agreed to pay the Adviser an annual fee of 0.29% of the Fund's average daily net assets. Each of the Dynamic Large Cap Growth Portfolio, Dynamic Large Cap Value Portfolio and Zacks Micro Cap Portfolio has agreed to pay the Adviser an annual fee of 0.50% of the Fund's average daily net assets.
The Adviser has entered into an Amended and Restated Excess Expense Agreement (the "Expense Agreement") with the Trust, pursuant to which the Adviser has agreed to waive fees and/or pay Fund expenses to the extent necessary to prevent the operating expenses (excluding interest expenses, brokerage commissions and other trading expenses, offering costs, taxes, acquired fund fees and expenses, if any and extraordinary expenses) of each Fund (except for Dynamic Large Cap Growth Portfolio, Dynamic Large Cap Value Portfolio and Zacks Micro Cap Portfolio) from exceeding 0.39% of the Fund's average daily net assets per year (the "Expense Cap"), through at least August 31, 2014. The Expense Cap for each of Dynamic Large Cap Growth Portfolio, Dynamic Large Cap Value Portfolio and Zacks Micro Cap
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Portfolio is 0.60% of the Fund's average daily net assets per year, through at least August 31, 2014, and sub-licensing fees are excluded from the expenses subject to the Expense Cap for these Funds in addition to the excluded expenses above. Offering costs excluded from each Expense Cap are: (a) initial legal fees pertaining to the Funds' Shares offered for sale; (b) initial Securities and Exchange Commission and state registration fees; and (c) initial fees paid to be listed on an exchange.
The Expense Agreement provides that the fees waived or expenses borne by the Adviser are subject to recapture by the Adviser for up to three years from the date the fee was waived 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 amounts available for potential future recapture by the Adviser under the Expense Agreement and the expiration schedule at April 30, 2013 are as follows:
Total Potential | Potential Recapture Amounts Expiring | ||||||||||||||||||
Recapture Amount | 04/30/14 | 04/30/15 | 04/30/16 | ||||||||||||||||
Fundamental Pure Large Core Portfolio | $ | 337,190 | $ | 112,727 | $ | 119,199 | $ | 105,264 | |||||||||||
Fundamental Pure Large Growth Portfolio | 224,053 | — | 129,956 | 94,097 | |||||||||||||||
Fundamental Pure Large Value Portfolio | 232,337 | — | 133,196 | 99,141 | |||||||||||||||
Fundamental Pure Mid Core Portfolio | 351,512 | 120,297 | 121,623 | 109,592 | |||||||||||||||
Fundamental Pure Mid Growth Portfolio | 306,355 | 67,548 | 120,951 | 117,856 | |||||||||||||||
Fundamental Pure Mid Value Portfolio | 353,338 | 110,527 | 117,234 | 125,577 | |||||||||||||||
Fundamental Pure Small Core Portfolio | 368,381 | 128,503 | 125,378 | 114,500 | |||||||||||||||
Fundamental Pure Small Growth Portfolio | 370,427 | 112,773 | 114,756 | 142,898 | |||||||||||||||
Fundamental Pure Small Value Portfolio | 372,145 | 106,105 | 120,928 | 145,112 | |||||||||||||||
Zacks Micro Cap Portfolio | 303,962 | 115,423 | 102,215 | 86,324 |
The Trust has entered into a Distribution Agreement with Invesco Distributors, Inc. (the "Distributor"), which serves as the distributor of Creation Units for each Fund. The Distributor does not maintain a secondary market in the Shares. The Funds are not charged any fees pursuant to the Distribution Agreement. The Distributor is an affiliate of the Adviser.
The Adviser has entered into a licensing agreement for each Fund with the following entities (each, a "Licensor"):
Fund | Licensor | ||||||
Dynamic Large Cap Growth Portfolio | NYSE Arca, Inc. | ||||||
Dynamic Large Cap Value Portfolio | NYSE Arca, Inc. | ||||||
Fundamental Pure Large Core Portfolio | Research Affiliates, LLC | ||||||
Fundamental Pure Large Growth Portfolio | Research Affiliates, LLC | ||||||
Fundamental Pure Large Value Portfolio | Research Affiliates, LLC | ||||||
Fundamental Pure Mid Core Portfolio | Research Affiliates, LLC | ||||||
Fundamental Pure Mid Growth Portfolio | Research Affiliates, LLC | ||||||
Fundamental Pure Mid Value Portfolio | Research Affiliates, LLC | ||||||
Fundamental Pure Small Core Portfolio | Research Affiliates, LLC | ||||||
Fundamental Pure Small Growth Portfolio | Research Affiliates, LLC | ||||||
Fundamental Pure Small Value Portfolio | Research Affiliates, LLC | ||||||
Zacks Micro Cap Portfolio | Zacks Investment Research |
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April 30, 2013
Each Underlying Index name trademark is owned by its respective Licensor. These trademarks have been licensed to the Adviser for use with the Funds. Each Fund is entitled to use its Underlying Index pursuant to the Trust's sub-licensing agreement with the Adviser. The Funds are required to pay the sub-licensing fees that are shown on the Statements of Operations. 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 Trust has entered into service agreements whereby The Bank of New York Mellon, a wholly-owned subsidiary of The Bank of New York Mellon Corporation, serves as the administrator, custodian, fund accountant and transfer agent for each Fund.
Note 4. Investments in Affiliates
Invesco Mortgage Capital, Inc. REIT and the Adviser for Fundamental Pure Mid Core Portfolio, Fundamental Pure Mid Growth Portfolio and Fundamental Pure Small Growth Portfolio are subsidiaries of Invesco Ltd., and therefore Invesco Ltd. and Invesco Mortgage Capital, Inc. REIT are considered to be affiliated with the Funds. The table below shows each Fund's transactions in, and earnings from, its respective investment in Invesco Ltd. and Invesco Mortgage Capital, Inc. REIT for the fiscal year ended April 30, 2013.
Fundamental Pure Mid Core Portfolio
Value April 30, 2012 | Purchases at Cost | Proceeds from Sales | Change in Unrealized Appreciation | Realized Gain (Loss) | Value April 30, 2013 | Dividend Income | |||||||||||||||||||||||||
Invesco Ltd. | $ | — | $ | 231,226 | $ | (1,191 | ) | $ | 20,525 | $ | (4 | ) | $ | 250,556 | $ | — |
Fundamental Pure Mid Growth Portfolio
Value April 30, 2012 | Purchases at Cost | Proceeds from Sales | Change in Unrealized Appreciation | Realized Gain | Value April 30, 2013 | Dividend Income | |||||||||||||||||||||||||
Invesco Ltd. | $ | 817,932 | $ | 203,774 | $ | (1,149,877 | ) | $ | 42,806 | $ | 85,365 | $ | — | $ | 21,236 |
Fundamental Pure Small Growth Portfolio
Value April 30, 2012 | Purchases at Cost | Proceeds from Sales | Change in Unrealized Appreciation | Realized Gain | Value April 30, 2013 | Dividend Income | |||||||||||||||||||||||||
Invesco Mortgage Capital, Inc. REIT | $ | 118,629 | $ | 108,943 | $ | (36,187 | ) | $ | 20,321 | $ | 4,819 | $ | 216,525 | $ | 16,885 |
Note 5. Additional Valuation Information
GAAP defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date, under current market conditions. GAAP establishes a hierarchy that prioritizes the inputs to valuation methods, giving the highest priority to readily available unadjusted quoted prices in an active market for identical assets (Level 1) and the lowest priority to significant unobservable inputs (Level 3), generally when market prices are not readily available or are unreliable. Based on the valuation inputs, the securities or other investments are tiered into one of three levels. Changes in valuation methods may result in transfers in or out of an investment's assigned level:
Level 1 – Prices are determined using quoted prices in an active market for identical assets.
115
Notes to Financial Statements (Continued)
PowerShares Exchange-Traded Fund Trust
April 30, 2013
Level 2 – Prices are determined using other significant observable inputs. Observable inputs are inputs that other market participants may use in pricing a security. These may include quoted prices for similar securities, interest rates, prepayment speeds, credit risk, yield curves, loss severities, default rates, discount rates, volatilities and others.
Level 3 – Prices are determined using significant unobservable inputs. In situations where quoted prices or observable inputs are unavailable (for example, when there is little or no market activity for an investment at the end of the period), unobservable inputs may be used. Unobservable inputs reflect the Fund's own assumptions about the factors market participants would use in determining fair value of the securities or instruments and would be based on the best available information.
Except for the Fund listed below, as of April 30, 2013, the securities in each Fund were valued based on Level 1 inputs (see the Schedule of Investments for security categories). The level assigned to the securities valuations may not be an indication of the risk or liquidity associated with investing in those securities. Because of the inherent uncertainties of valuation, the values reflected in the financial statements may materially differ from the value received upon actual sale of those investments.
Investments in Securities | |||||||||||||||||||
Level 1 | Level 2 | Level 3 | Total | ||||||||||||||||
Zacks Mirco Cap Portfolio | |||||||||||||||||||
Equity Securities | $ | 41,961,302 | $ | 75,028 | $ | — | $ | 42,036,330 | |||||||||||
Money Market Fund | 1,526,039 | — | — | 1,526,039 | |||||||||||||||
Total | $ | 43,487,341 | $ | 75,028 | $ | — | $ | 43,562,369 |
Note 6. Distributions to Shareholders and Tax Components of Net Assets
Tax Character of Distributions to Shareholders Paid During the Fiscal Years Ended April 30, 2013 and 2012:
2013 | 2012 | ||||||||||
Ordinary Income | Ordinary Income | ||||||||||
Dynamic Large Cap Growth Portfolio | $ | 1,990,554 | $ | 1,510,509 | |||||||
Dynamic Large Cap Value Portfolio | 10,900,743 | 9,491,440 | |||||||||
Fundamental Pure Large Core Portfolio | 662,935 | 670,286 | |||||||||
Fundamental Pure Large Growth Portfolio | 166,518 | 17,066 | |||||||||
Fundamental Pure Large Value Portfolio | 147,580 | 132,239 | |||||||||
Fundamental Pure Mid Core Portfolio | 280,344 | 227,420 | |||||||||
Fundamental Pure Mid Growth Portfolio | 795,069 | 355,610 | |||||||||
Fundamental Pure Mid Value Portfolio | 648,717 | 458,896 | |||||||||
Fundamental Pure Small Core Portfolio | 259,833 | 102,977 | |||||||||
Fundamental Pure Small Growth Portfolio | 218,960 | — | |||||||||
Fundamental Pure Small Value Portfolio | 957,949 | 687,907 | |||||||||
Zacks Micro Cap Portfolio | 557,741 | 599,475 |
116
Notes to Financial Statements (Continued)
PowerShares Exchange-Traded Fund Trust
April 30, 2013
Tax Components of Net Assets at Fiscal Year-End:
Undistributed Ordinary Income | Undistributed Long-term Capital Gains | Temporary Book/Tax Differences | Net Unrealized Appreciation (Depreciation) – Investment Securities | Net Unrealized Appreciation (Depreciation) – Other Investments | Capital Loss Carryforward | Post-October Capital Losses Deferrals* | Shares of Beneficial Interest | Total Net Assets | |||||||||||||||||||||||||||||||
Dynamic Large Cap Growth Portfolio | $ | 254,269 | $ | — | $ | (19,769 | ) | $ | 40,746,749 | $ | — | $ | (259,663,548 | ) | $ | (1,286,739 | ) | $ | 432,865,953 | $ | 212,896,915 | ||||||||||||||||||
Dynamic Large Cap Value Portfolio | 1,388,977 | — | (20,249 | ) | 95,193,740 | — | (134,611,386 | ) | (341,159 | ) | 613,215,309 | 574,825,232 | |||||||||||||||||||||||||||
Fundamental Pure Large Core Portfolio | 22,624 | — | (7,589 | ) | 3,074,656 | — | (10,759,293 | ) | — | 35,543,143 | 27,873,541 | ||||||||||||||||||||||||||||
Fundamental Pure Large Growth Portfolio | 577,761 | 60,346 | (2,451 | ) | 3,212,797 | — | — | — | 78,967,958 | 82,816,411 | |||||||||||||||||||||||||||||
Fundamental Pure Large Value Portfolio | 13,960 | 938 | (2,402 | ) | 709,741 | — | — | — | 6,826,673 | 7,548,910 | |||||||||||||||||||||||||||||
Fundamental Pure Mid Core Portfolio | 44,209 | — | (7,167 | ) | 1,634,804 | — | (10,439,675 | ) | (95,987 | ) | 28,632,137 | 19,768,321 | |||||||||||||||||||||||||||
Fundamental Pure Mid Growth Portfolio | 360,194 | — | (13,792 | ) | 8,718,816 | — | (170,214,188 | ) | (1,595,592 | ) | 244,845,665 | 82,101,103 | |||||||||||||||||||||||||||
Fundamental Pure Mid Value Portfolio | 45,398 | — | (8,389 | ) | 3,564,020 | 6,277 | (45,270,921 | ) | (6,952 | ) | 69,991,257 | 28,320,690 | |||||||||||||||||||||||||||
Fundamental Pure Small Core Portfolio | 60,644 | — | (6,943 | ) | 1,273,263 | — | (9,674,421 | ) | (155,304 | ) | 23,792,397 | 15,289,636 | |||||||||||||||||||||||||||
Fundamental Pure Small Growth Portfolio | 197,960 | — | (8,040 | ) | 1,172,393 | — | (50,187,995 | ) | (497,207 | ) | 75,968,977 | 26,646,088 | |||||||||||||||||||||||||||
Fundamental Pure Small Value Portfolio | 68,883 | — | (9,256 | ) | 3,008,817 | — | (45,932,640 | ) | — | 90,948,241 | 48,084,045 | ||||||||||||||||||||||||||||
Zacks Micro Cap Portfolio | 167,044 | — | (9,099 | ) | 3,058,135 | (1,000 | ) | (92,608,092 | ) | (332,814 | ) | 131,780,630 | 42,054,804 |
* The Funds will elect to defer net capital losses incurred after October 31 ("Post-October Capital Losses") within the taxable year that are deemed to arise on the first business day of each Fund's next taxable year.
Capital loss carryforward is calculated and reported as of a specific date. Results of transactions and other activity after that date may affect the amount of capital loss carryforward actually available for the Funds to utilize. The Regulated Investment Company Modernization Act of 2010 eliminated the eight-year carryover period for capital losses that arise in taxable years beginning after its enactment date of December 22, 2010. Consequently, these capital losses can be carried forward for an unlimited period. However, capital losses with an expiration period may not be used to offset capital gains until all net capital losses without an expiration date have been utilized. Additionally, post-enactment capital loss carryforwards will retain their character as either short-term or long-term capital losses instead of as short-term capital
117
Notes to Financial Statements (Continued)
PowerShares Exchange-Traded Fund Trust
April 30, 2013
losses as under prior law. The ability to utilize capital loss carryforward in the future may be limited under Internal Revenue Code rules and related regulations based on the results of future transactions.
The following Funds have a capital loss carryforward as of April 30, 2013, which expires as follows:
Post-effective no expiration | |||||||||||||||||||||||||||||||||||||||
2014 | 2015 | 2016 | 2017 | 2018 | 2019 | Short-term | Long-term | Total* | |||||||||||||||||||||||||||||||
Dynamic Large Cap Growth Portfolio | $ | 191,864 | $ | 10,916,066 | $ | 14,024,455 | $ | 68,715,641 | $ | 131,638,879 | $ | 15,986,258 | $ | 17,002,918 | $ | 1,187,467 | $ | 259,663,548 | |||||||||||||||||||||
Dynamic Large Cap Value Portfolio | 70,814 | 1,378,743 | 2,783,761 | 22,558,581 | 56,819,182 | 17,964,198 | 25,618,203 | 7,417,904 | 134,611,386 | ||||||||||||||||||||||||||||||
Fundamental Pure Large Core Portfolio** | — | — | 87,112 | 2,328,337 | 5,621,834 | 1,626,267 | 1,095,743 | — | 10,759,293 | ||||||||||||||||||||||||||||||
Fundamental Pure Large Growth Portfolio** | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||
Fundamental Pure Large Value Portfolio** | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||
Fundamental Pure Mid Core Portfolio | — | — | 628,828 | 3,815,763 | 3,611,366 | 741,893 | 1,573,847 | 67,978 | 10,439,675 | ||||||||||||||||||||||||||||||
Fundamental Pure Mid Growth Portfolio | 422,220 | 8,055,857 | 5,112,579 | 54,769,394 | 82,364,246 | 12,021,724 | 7,467,612 | 556 | 170,214,188 | ||||||||||||||||||||||||||||||
Fundamental Pure Mid Value Portfolio | 237,806 | 2,384,765 | 5,347,255 | 12,697,113 | 18,996,863 | 2,751,107 | 2,697,084 | 158,928 | 45,270,921 | ||||||||||||||||||||||||||||||
Fundamental Pure Small Core Portfolio | — | — | 1,028,299 | 2,738,120 | 2,009,294 | 2,491,519 | 1,228,681 | 178,508 | 9,674,421 | ||||||||||||||||||||||||||||||
Fundamental Pure Small Growth Portfolio | 823,782 | 13,094,039 | 6,666,558 | 9,888,431 | 10,392,627 | 4,547,805 | 4,774,753 | — | 50,187,995 | ||||||||||||||||||||||||||||||
Fundamental Pure Small Value Portfolio | 703,862 | 3,929,009 | 8,615,687 | 16,547,947 | 9,588,502 | 5,376,983 | 1,170,650 | — | 45,932,640 | ||||||||||||||||||||||||||||||
Zacks Micro Cap Portfolio | 1,951,245 | 15,172,527 | 14,330,930 | 28,782,755 | 12,380,833 | 7,234,973 | 11,560,691 | 1,194,138 | 92,608,092 |
* Capital loss carryforward as of the date listed above is reduced for limitations, if any, to the extent required by the Internal Revenue Code.
** During the fiscal year ended April 30, 2013, the Fundamental Pure Large Core , Fundamental Pure Large Growth and Fundamental Pure Large Value Portfolios utilized capital loss carryforwards of $270,367, $288 and $888, respectively, to offset realized gains.
118
Notes to Financial Statements (Continued)
PowerShares Exchange-Traded Fund Trust
April 30, 2013
Note 7. Investment Transactions
For the fiscal year ended April 30, 2013, 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 | ||||||||||
Dynamic Large Cap Growth Portfolio | $ | 88,288,111 | $ | 88,656,360 | |||||||
Dynamic Large Cap Value Portfolio | 270,932,048 | 272,204,142 | |||||||||
Fundamental Pure Large Core Portfolio | 13,333,666 | 11,002,431 | |||||||||
Fundamental Pure Large Growth Portfolio | 26,712,145 | 25,209,073 | |||||||||
Fundamental Pure Large Value Portfolio | 1,110,058 | 536,605 | |||||||||
Fundamental Pure Mid Core Portfolio | 7,493,550 | 6,881,381 | |||||||||
Fundamental Pure Mid Growth Portfolio | 26,733,816 | 26,589,085 | |||||||||
Fundamental Pure Mid Value Portfolio | 7,998,764 | 7,439,817 | |||||||||
Fundamental Pure Small Core Portfolio | 6,862,355 | 6,330,931 | |||||||||
Fundamental Pure Small Growth Portfolio | 10,978,567 | 10,666,798 | |||||||||
Fundamental Pure Small Value Portfolio | 14,863,379 | 14,696,699 | |||||||||
Zacks Micro Cap Portfolio | 30,248,666 | 30,214,170 |
For the fiscal year ended April 30, 2013, in-kind transactions associated with creations and redemptions were as follows:
Securities Received | Securities Delivered | ||||||||||
Dynamic Large Cap Growth Portfolio | $ | 167,685,360 | $ | 170,017,094 | |||||||
Dynamic Large Cap Value Portfolio | 453,426,887 | 391,671,838 | |||||||||
Fundamental Pure Large Core Portfolio | 7,014,001 | 10,682,614 | |||||||||
Fundamental Pure Large Growth Portfolio | 96,570,107 | 24,674,024 | |||||||||
Fundamental Pure Large Value Portfolio | 2,446,500 | 4,714,057 | |||||||||
Fundamental Pure Mid Core Portfolio | 2,984,802 | 4,894,265 | |||||||||
Fundamental Pure Mid Growth Portfolio | 16,375,299 | 32,244,021 | |||||||||
Fundamental Pure Mid Value Portfolio | 4,087,354 | 14,446,465 | |||||||||
Fundamental Pure Small Core Portfolio | 2,709,980 | 5,475,332 | |||||||||
Fundamental Pure Small Growth Portfolio | 4,854,935 | 12,098,712 | |||||||||
Fundamental Pure Small Value Portfolio | 9,619,352 | 22,114,664 | |||||||||
Zacks Micro Cap Portfolio | 34,917,477 | 32,251,186 |
Gains (losses) on in-kind transactions are generally not considered taxable gains (losses) for federal income tax purposes.
119
Notes to Financial Statements (Continued)
PowerShares Exchange-Traded Fund Trust
April 30, 2013
At April 30, 2013, the aggregate cost and the net unrealized appreciation of investments for tax purposes were as follows:
Cost | Net Unrealized Appreciation | Gross Unrealized Appreciation | Gross Unrealized (Depreciation) | ||||||||||||||||
Dynamic Large Cap Growth Portfolio | $ | 172,280,077 | $ | 40,746,749 | $ | 41,076,138 | $ | (329,389 | ) | ||||||||||
Dynamic Large Cap Value Portfolio | 479,699,219 | 95,193,740 | 95,848,189 | (654,449 | ) | ||||||||||||||
Fundamental Pure Large Core Portfolio | 24,854,931 | 3,074,656 | 3,226,414 | (151,758 | ) | ||||||||||||||
Fundamental Pure Large Growth Portfolio | 79,625,730 | 3,212,797 | 4,725,283 | (1,512,486 | ) | ||||||||||||||
Fundamental Pure Large Value Portfolio | 6,889,357 | 709,741 | 783,639 | (73,898 | ) | ||||||||||||||
Fundamental Pure Mid Core Portfolio | 18,215,764 | 1,634,804 | 2,099,017 | (464,213 | ) | ||||||||||||||
Fundamental Pure Mid Growth Portfolio | 73,508,428 | 8,718,816 | 11,816,548 | (3,097,732 | ) | ||||||||||||||
Fundamental Pure Mid Value Portfolio | 24,738,148 | 3,564,020 | 4,537,017 | (972,997 | ) | ||||||||||||||
Fundamental Pure Small Core Portfolio | 14,068,150 | 1,273,263 | 1,816,058 | (542,795 | ) | ||||||||||||||
Fundamental Pure Small Growth Portfolio | 25,555,006 | 1,172,393 | 3,084,853 | (1,912,460 | ) | ||||||||||||||
Fundamental Pure Small Value Portfolio | 47,040,029 | 3,008,817 | 6,190,468 | (3,181,651 | ) | ||||||||||||||
Zacks Micro Cap Portfolio | 40,504,234 | 3,058,135 | 4,351,185 | (1,293,050 | ) |
Note 8. Reclassification of Permanent Differences
Primarily as a result of differing book/tax treatment of in-kind transactions on April 30, 2013, amounts were reclassified between undistributed net investment income (loss), undistributed net realized gain (loss) and shares of beneficial interest. These reclassifications had no effect on the net assets of each Fund. For the fiscal year ended April 30, 2013, the reclassifications were as follows:
Undistributed Net Investment Income (Loss) | Undistributed Net Realized Gain (Loss) | Shares of Beneficial Interest | |||||||||||||
Dynamic Large Cap Growth Portfolio | $ | (87,824 | ) | $ | (24,879,672 | ) | $ | 24,967,496 | |||||||
Dynamic Large Cap Value Portfolio | — | (44,970,336 | ) | 44,970,336 | |||||||||||
Fundamental Pure Large Core Portfolio | — | (2,091,623 | ) | 2,091,623 | |||||||||||
Fundamental Pure Large Growth Portfolio | — | (1,524,072 | ) | 1,524,072 | |||||||||||
Fundamental Pure Large Value Portfolio | — | (878,840 | ) | 878,840 | |||||||||||
Fundamental Pure Mid Core Portfolio | 229 | (963,154 | ) | 962,925 | |||||||||||
Fundamental Pure Mid Growth Portfolio | 2,256 | (4,759,447 | ) | 4,757,191 | |||||||||||
Fundamental Pure Mid Value Portfolio | 3,689 | (2,745,331 | ) | 2,741,642 | |||||||||||
Fundamental Pure Small Core Portfolio | 11,323 | (982,396 | ) | 971,073 | |||||||||||
Fundamental Pure Small Growth Portfolio | — | (1,739,163 | ) | 1,739,163 | |||||||||||
Fundamental Pure Small Value Portfolio | 5,340 | (4,815,905 | ) | 4,810,565 | |||||||||||
Zacks Micro Cap Portfolio | 95,958 | (6,238,044 | ) | 6,142,086 |
120
Notes to Financial Statements (Continued)
PowerShares Exchange-Traded Fund Trust
April 30, 2013
Note 9. Trustees' Fees
The Funds compensate each Independent Trustee. The Trustee who is an "interested person" (the "Non-Independent Trustee") of the Trust does not receive any Trustees' fees.
The Trust has adopted a deferred compensation plan (the "Plan"). Under the Plan, an Independent Trustee who has executed a Deferred Fee Agreement (a "Participating Trustee") may defer receipt of all or a portion of his compensation ("Deferral Fees"). Such Deferral Fees are deemed to be invested in select PowerShares Funds. The Deferral Fees payable to the Participating Trustee are valued as of the date such Deferral 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 distributions or with declines in the value of the Shares selected.
Note 10. Capital
Shares are created and redeemed by the Trust only in Creation Units of 50,000 Shares. Only Authorized Participants are permitted to purchase or redeem Creation Units from the Funds. Such transactions are generally permitted on an in-kind basis, with a balancing cash component to equate the transaction to the NAV per Share of a 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 eligible for trading by the Authorized Participant or as a result of other market circumstances.
Each Fund may issue Shares in advance of receipt of a basket of securities ("Deposit Securities") subject to various conditions, including a requirement to maintain on deposit with the Trust cash at least equal to 105% of the market value of the missing Deposit Securities. In accordance with each Fund's Participant Agreement, Creation Units will be issued to an Authorized Participant, notwithstanding the fact that the corresponding Deposit Securities 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 105%, which the Adviser may change from time to time, of the value of the missing Deposit Securities.
Transactions in a Fund's Shares are disclosed in detail on the Statements of Changes in Net Assets.
Note 11. 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. Each Independent Trustee is also indemnified against certain liabilities arising out of the performance of his duties to the Trust pursuant to an Indemnification Agreement between the Independent Trustee and 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.
121
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 PowerShares Dynamic Large Cap Growth Portfolio, PowerShares Dynamic Large Cap Value Portfolio, PowerShares Fundamental Pure Large Core Portfolio, PowerShares Fundamental Pure Large Growth Portfolio, PowerShares Fundamental Pure Large Value Portfolio, PowerShares Fundamental Pure Mid Core Portfolio, PowerShares Fundamental Pure Mid Growth Portfolio, PowerShares Fundamental Pure Mid Value Portfolio, PowerShares Fundamental Pure Small Core Portfolio, PowerShares Fundamental Pure Small Growth Portfolio, PowerShares Fundamental Pure Small Value Portfolio and PowerShares Zacks Micro Cap Portfolio (each an individual portfolio of PowerShares Exchange-Traded Fund Trust, hereafter referred to as the "Funds") at April 30, 2013, the results of each of their operations for the period then ended, and the change 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 Funds' 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, 2013 by correspondence with the custodian and brokers, provide a reasonable basis for our opinion.
As discussed in note 2G of the Notes to the Financial Statements, the Funds changed their accounting policy to discontinue the use of equalization accounting for book purposes.
/s/ PricewaterhouseCoopers LLP
Chicago, IL
June 25, 2013
122
Tax Information
Form 1099-DIV, Form 1042-S and other year-end tax information provide shareholders with actual calendar year amounts that should be included in their tax returns. Shareholders should consult their tax advisers.
The following distribution information is being provided as required by the Internal Revenue Code or to meet a specific state's requirement.
Each Fund designates the following amounts or, if subsequently determined to be different, the maximum amount allowable for its fiscal year ended April 30, 2013:
Federal Income Tax Information
Qualified dividend income* | Dividends-received deduction* | ||||||||||
Dynamic Large Cap Growth Portfolio | 100 | % | 100 | % | |||||||
Dynamic Large Cap Value Portfolio | 100 | % | 100 | % | |||||||
Fundamental Pure Large Core Portfolio | 100 | % | 100 | % | |||||||
Fundamental Pure Large Growth Portfolio | 100 | % | 94 | % | |||||||
Fundamental Pure Large Value Portfolio | 100 | % | 100 | % | |||||||
Fundamental Pure Mid Core Portfolio | 100 | % | 100 | % | |||||||
Fundamental Pure Mid Growth Portfolio | 100 | % | 99 | % | |||||||
Fundamental Pure Mid Value Portfolio | 100 | % | 100 | % | |||||||
Fundamental Pure Small Core Portfolio | 100 | % | 93 | % | |||||||
Fundamental Pure Small Growth Portfolio | 100 | % | 100 | % | |||||||
Fundamental Pure Small Value Portfolio | 90 | % | 90 | % | |||||||
Zacks Micro Cap Portfolio | 100 | % | 97 | % |
* The above percentages are based on ordinary income dividends paid to shareholders during the Fund's fiscal year.
123
Trustees and Officers
The Independent Trustees, the Non-Independent 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 a Trustee are shown below.
The Trustees and officers information is current as of April 30, 2013.
Name, Address and Age of Independent Trustees | 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 Complex** Overseen by Independent Trustees | Other Directorships Held by Independent Trustees During the Past 5 Years | ||||||||||||||||||
Ronn R. Bagge (55) c/o Invesco PowerShares Capital Management LLC 301 West Roosevelt Road Wheaton, IL 60187 | Trustee | Since 2003 | Founder and Principal, YQA Capital Management LLC (1998-Present); formerly Owner/CEO of Electronic Dynamic Balancing Co., Inc. (high-speed rotating equipment service provider). | 113 | None | ||||||||||||||||||
Todd J. Barre (55) c/o Invesco PowerShares Capital Management LLC 301 West Roosevelt Road Wheaton, IL 60187 | Trustee | Since 2010 | Assistant Professor of Business, Trinity Christian College (2010-Present); formerly, Vice President and Senior Investment Strategist (2001-2008), Director of Open Architecture and Trading (2007-2008), Head of Fundamental Research (2004-2007) and Vice President and Senior Fixed Income Strategist (1994-2001), BMO Financial Group/Harris Private Bank. | 113 | None |
* This is the date the Independent Trustee began serving the Trust. Each Trustee serves an indefinite term, until his successor is elected.
** Fund Complex includes all open-end funds (including all of their portfolios) advised by the Adviser. At May 9, 2013, the Fund Complex consisted of the Trust's 55 portfolios and three other exchange-traded fund trusts with 58 portfolios advised by the Adviser.
124
Trustees and Officers (Continued)
Name, Address and Age of Independent Trustees | 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 Complex** Overseen by Independent Trustees | Other Directorships Held by Independent Trustees During the Past 5 Years | ||||||||||||||||||
Marc M. Kole (52) c/o Invesco PowerShares Capital Management LLC 301 West Roosevelt Road Wheaton, IL 60187 | Trustee | Since 2006 | Formerly Chief Financial Officer, Hope Network (social services) (2008-2012); Assistant Vice President and Controller, Priority Health (health insurance) (2005-2008); Senior Vice President of Finance, United Healthcare (2004-2005); Senior Vice President of Finance, Oxford Health Plans (2000-2004). | 113 | None | ||||||||||||||||||
Yung Bong Lim (48) c/o Invesco PowerShares Capital Management LLC 301 West Roosevelt Road Wheaton, IL 60187 | Trustee | Since 2013 | Managing Partner, Residential Dynamics Group LLC (2008-Present); formerly, Managing Director, Citadel Investment Group, L.L.C. (1999-2007). | 58 | None | ||||||||||||||||||
Philip M. Nussbaum (51) c/o Invesco PowerShares Capital Management LLC 301 West Roosevelt Road Wheaton, IL 60187 | Trustee | Since 2003 | Chairman, Performance Trust Capital Partners (2004-Present). | 113 | None |
* This is the date the Independent Trustee began serving the Trust. Each Trustee serves an indefinite term, until his successor is elected.
** Fund Complex includes all open-end funds (including all of their portfolios) advised by the Adviser. At May 9, 2013, the Fund Complex consisted of the Trust's 55 portfolios and three other exchange-traded fund trusts with 58 portfolios advised by the Adviser.
125
Trustees and Officers (Continued)
Name, Address and Age of Independent Trustees | 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 Complex** Overseen by Independent Trustees | Other Directorships Held by Independent Trustees During the Past 5 Years | ||||||||||||||||||
Gary R. Wicker (51) c/o Invesco PowerShares Capital Management LLC 301 West Roosevelt Road Wheaton, IL 60187 | Trustee | Since 2013 | Senior Vice President of Global Finance and Chief Financial Officer at RBC Ministries (publishing company) (since 2013); formerly, Executive Vice President and Chief Financial Officer, Zondervan Publishing (A division of Harper Collins/NewsCorp) (2007-2012); Senior Vice President and Group Controller (2005-2006), Senior Vice President and Chief Financial Officer (2003-2004), Chief Financial Officer (2001-2003), Vice President, Finance and Controller (1999-2001) and Assistant Controller (1997-1999), divisions of The Thomson Corporation (information services provider). | 58 | None |
* This is the date the Independent Trustee began serving the Trust. Each Trustee serves an indefinite term, until his successor is elected.
** Fund Complex includes all open-end funds (including all of their portfolios) advised by the Adviser. At May 9, 2013, the Fund Complex consisted of the Trust's 55 portfolios and three other exchange-traded fund trusts with 58 portfolios advised by the Adviser.
126
Trustees and Officers (Continued)
Name, Address and Age of Independent Trustees | 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 Complex** Overseen by Independent Trustees | Other Directorships Held by Independent Trustees During the Past 5 Years | ||||||||||||||||||
Donald H. Wilson (53) c/o Invesco PowerShares Capital Management LLC 301 West Roosevelt Road Wheaton, IL 60187 | Chairman of the Board and Trustee | Chairman since 2012; Trustee since 2006 | Chairman and Chief Executive Officer, Stone Pillar Advisers, Ltd. (2010-Present); formerly, Chief Operating Officer, AMCORE Financial, Inc. (bank holding company) (2007-2009); Executive Vice President and Chief Financial Officer, AMCORE Financial, Inc. (2006-2007); Senior Vice President and Treasurer, Marshall & Ilsley Corp. (bank holding company) (1995-2006). | 113 | None |
* This is the date the Independent Trustee began serving the Trust. Each Trustee serves an indefinite term, until his successor is elected.
** Fund Complex includes all open-end funds (including all of their portfolios) advised by the Adviser. At May 9, 2013, the Fund Complex consisted of the Trust's 55 portfolios and three other exchange-traded fund trusts with 58 portfolios advised by the Adviser.
127
Trustees and Officers (Continued)
The Non-Independent Trustee and the 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 Non-Independent Trustee and the other directorships, if any, held by the Non-Independent Trustee are shown below.
Name, Address and Age of Non-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 Complex** Overseen by Non- Independent Trustee | Other Directorships Held by Non-Independent Trustee During the Past 5 Years | ||||||||||||||||||
Kevin M. Carome (57) Invesco Ltd. Two Peachtree Pointe 1555 Peachtree St., N.E., Suite 1800 Atlanta, GA 30309 | Trustee | Since 2010 | Senior Managing Director, Secretary and General Counsel, Invesco Ltd. (2006-Present); Director, Invesco Advisers, Inc. (2009-Present); formerly, Senior Vice President, Secretary and General Counsel, Invesco Advisers, Inc. (2003-2005); Senior Vice President and General Counsel, Liberty Financial Companies, Inc. (2000-2001); General Counsel of certain investment management subsidiaries of Liberty Financial Companies, Inc. (1998-2000); Associate General Counsel, Liberty Financial Companies, Inc. (1993-1998); Associate, Ropes & Gray LLP. | 113 | None |
* This is the date the Non-Independent Trustee began serving the Trust. Each Trustee serves an indefinite term, until his successor is elected.
** Fund Complex includes all open-end funds (including all of their portfolios) advised by the Adviser. At May 9, 2013, the Fund Complex consisted of the Trust's 55 portfolios and three other exchange-traded fund trusts with 58 portfolios advised by the Adviser.
128
Trustees and Officers (Continued)
Name, Address and Age of Executive Officer | Position(s) Held with Trust | Length of Time Served* | Principal Occupation(s) During Past 5 Years | ||||||||||||
Andrew Schlossberg (39) Invesco Management Group, Inc. 11 Greenway Plaza Suite 1000 Houston, TX 77046 | President | Since 2009 | Managing Director, U.S. head of business strategy and chief marketing officer for Invesco Ltd. in the United States (2008-Present); Director, Invesco Distributors, Inc. (2012-Present); and Senior Vice President, Invesco Advisers, Inc. (formerly known as Invesco Institutional (N.A.), Inc.) (registered investment adviser) (2009-Present); formerly, Mr. Schlossberg served in multiple roles within Invesco, including head of corporate development, as well as global leadership roles in strategy and product development in the company's North American Institutional and Retirement divisions (2002-2007). | ||||||||||||
Peter Hubbard (32) Invesco PowerShares Capital Management LLC 301 West Roosevelt Road Wheaton, IL 60187 | Vice President | Since 2009 | Vice President and Director of Portfolio Management – Invesco PowerShares Capital Management LLC (2008-Present); formerly, Portfolio Manager, Invesco PowerShares Capital Management LLC (2007-2008); Research Analyst, Invesco PowerShares Capital Management LLC (2005-2007); Research Analyst and Trader, Ritchie Capital, a hedge fund operator (2003-2005). | ||||||||||||
David Warren (55) Invesco Canada Ltd. 5140 Yonge Street Suite 900, Toronto, Ontario M2N 6X7 | Vice President | Since 2009 | Director, Executive Vice President and Chief Financial Officer, Invesco Canada Ltd. (formerly, Invesco Trimark Ltd.) and Chief Administrative Officer, North American Retail, Invesco Ltd. (2007-Present); Senior Vice President, Invesco Management Group, Inc. (2007-Present); Director, Executive Vice President and Chief Financial Officer, Invesco, Inc.; Director, Invesco Canada Holdings Inc.; formerly, Director, Executive Vice President and Chief Financial Officer, Invesco Canada Ltd. (formerly, Invesco Trimark Ltd.) (2000-2006). |
* This is the period for which the Officers began serving the Trust. Each Officer serves an indefinite term, until his or her successor is elected.
129
Trustees and Officers (Continued)
Name, Address and Age of Executive Officer | Position(s) Held with Trust | Length of Time Served* | Principal Occupation(s) During Past 5 Years | ||||||||||||
Sheri Morris (49) Invesco Management Group, Inc. 11 Greenway Plaza Suite 1000 Houston, TX 77046-1173 | Vice President | Since 2012 | Vice President, Treasurer and Principal Financial Officer, The Invesco Funds; Vice President, Invesco Advisers, Inc. (formerly known as Invesco Institutional (N.A.), Inc.) (registered investment adviser) (2009-Present) and Vice President, PowerShares Exchange-Traded Fund Trust, PowerShares Exchange-Traded Fund Trust II, PowerShares India Exchange-Traded Fund Trust and PowerShares Actively Managed Exchange-Traded Fund Trust; formerly, Treasurer, PowerShares Exchange-Traded Fund Trust, PowerShares Exchange-Traded Fund Trust II, PowerShares India Exchange-Traded Fund Trust and PowerShares Actively Managed Exchange-Traded Fund Trust (2012-2013); formerly, Vice President, Invesco Advisers, Inc., Invesco Aim Capital Management, Inc. and Invesco Aim Private Asset Management, Inc.; Assistant Vice President and Assistant Treasurer, The Invesco Funds and Assistant Vice President, Invesco Advisers, Inc., Invesco Aim Capital Management, Inc. and Invesco Aim Private Asset Management, Inc. |
* This is the period for which the Officers began serving the Trust. Each Officer serves an indefinite term, until his or her successor is elected.
130
Trustees and Officers (Continued)
Name, Address and Age of Executive Officer | Position(s) Held with Trust | Length of Time Served* | Principal Occupation(s) During Past 5 Years | ||||||||||||
Steven M. Hill (48) Invesco PowerShares Capital Management LLC 301 West Roosevelt Road Wheaton, IL 60187 | Vice President and Treasurer | Since 2012 Since 2013 | Vice President and Treasurer, PowerShares Exchange-Traded Fund Trust, PowerShares Exchange-Traded Fund Trust II, PowerShares India Exchange-Traded Fund Trust and PowerShares Actively Managed Exchange-Traded Fund Trust (since 2013); Head of Global ETF Administration, Invesco PowerShares Capital Management LLC; formerly, Treasurer, PowerShares Exchange-Traded Fund Trust, PowerShares Exchange-Traded Fund Trust II, PowerShares India Exchange-Traded Fund Trust and PowerShares Actively Managed Exchange-Traded Fund Trust (2011-2012); Senior Managing Director and Chief Financial Officer, Destra Capital Management LLC and its subsidiaries (2010-2011); Chief Financial Officer, Destra Investment Trust and Destra Investment Trust II (2010-2011); Senior Managing Director, Claymore Securities, Inc. (2003-2010); and Chief Financial Officer, Claymore sponsored mutual funds (2003-2010). | ||||||||||||
Christopher Joe (44) Invesco Management Group, Inc. 11 Greenway Plaza Suite 1000 Houston, TX 77046-1173 | Chief Compliance Officer | Since 2012 | U.S. Compliance Director, Invesco, Ltd.; Chief Compliance Officer, Invesco Investment Advisers, LLC (registered investment adviser); formerly, Assistant Fund Accounting Manager, Invesco, Ltd. |
* This is the period for which the Officers began serving the Trust. Each Officer serves an indefinite term, until his or her successor is elected.
131
Trustees and Officers (Continued)
Name, Address and Age of Executive Officer | Position(s) Held with Trust | Length of Time Served* | Principal Occupation(s) During Past 5 Years | ||||||||||||
Anna Paglia (39) Invesco PowerShares Capital Management LLC 301 West Roosevelt Road Wheaton, IL 60187 | Secretary | Since 2011 | Secretary, PowerShares Exchange-Traded Fund Trust, PowerShares Exchange-Traded Fund Trust II, PowerShares India Exchange-Traded Fund Trust, and PowerShares Actively Managed Exchange-Traded Fund Trust; Head of Legal, Invesco PowerShares Capital Management LLC (2010-Present); formerly, Partner, K&L Gates LLP (formerly, Bell Boyd & Lloyd LLP) (2007-2010); Associate Counsel at Barclays Global Investors Ltd. (2004-2006). |
Availability of Additional Information About the Trustees
The Statement of Additional Information includes additional information about the Trustees and is
available, without charge, upon request at (800) 983-0903.
* This is the period for which the Officers began serving the Trust. Each Officer serves an indefinite term, until his or her successor is elected.
132
Board Considerations Regarding Approval of Continuation of Investment Advisory Agreement
At a meeting held on April 18, 2013, the Board of Trustees of the PowerShares Exchange-Traded Fund Trust (the "Trust"), including the Independent Trustees, approved the continuation of the Investment Advisory Agreement between Invesco PowerShares Capital Management LLC (the "Adviser") and the Trust for the following 53 series (each, a "Fund" and together, the "Funds"):
PowerShares Aerospace & Defense Portfolio
PowerShares Buyback AchieversTM Portfolio
PowerShares CleantechTM Portfolio
PowerShares Dividend AchieversTM Portfolio
PowerShares DWA Technical LeadersTM Portfolio
PowerShares Dynamic Basic Materials Sector Portfolio
PowerShares Dynamic Biotechnology & Genome Portfolio
PowerShares Dynamic Building & Construction Portfolio
PowerShares Dynamic Consumer Discretionary Sector Portfolio
PowerShares Dynamic Consumer Staples Sector Portfolio
PowerShares Dynamic Energy Exploration & Production Portfolio
PowerShares Dynamic Energy Sector Portfolio
PowerShares Dynamic Financial Sector Portfolio
PowerShares Dynamic Food & Beverage Portfolio
PowerShares Dynamic Healthcare Sector Portfolio
PowerShares Dynamic Industrials Sector Portfolio
PowerShares Dynamic Large Cap Growth Portfolio
PowerShares Dynamic Large Cap Value Portfolio
PowerShares Dynamic Leisure and Entertainment Portfolio
PowerShares Dynamic MagniQuant Portfolio
PowerShares Dynamic Market Portfolio
PowerShares Dynamic Media Portfolio
PowerShares Dynamic Networking Portfolio
PowerShares Dynamic Oil & Gas Services Portfolio
PowerShares Dynamic OTC Portfolio
PowerShares Dynamic Pharmaceuticals Portfolio
PowerShares Dynamic Retail Portfolio
PowerShares Dynamic Semiconductors Portfolio
PowerShares Dynamic Software Portfolio
PowerShares Dynamic Technology Sector Portfolio
PowerShares Dynamic Utilities Portfolio
PowerShares Financial Preferred Portfolio
PowerShares FTSE RAFI US 1000 Portfolio
PowerShares FTSE RAFI US 1500 Small-Mid Portfolio
PowerShares Fundamental Pure Large Core Portfolio
PowerShares Fundamental Pure Large Growth Portfolio
PowerShares Fundamental Pure Large Value Portfolio
PowerShares Fundamental Pure Mid Core Portfolio
PowerShares Fundamental Pure Mid Growth Portfolio
PowerShares Fundamental Pure Mid Value Portfolio
PowerShares Fundamental Pure Small Core Portfolio
PowerShares Fundamental Pure Small Growth Portfolio
PowerShares Fundamental Pure Small Value Portfolio
PowerShares Global Listed Private Equity Portfolio
PowerShares Golden Dragon China Portfolio
PowerShares High Yield Equity Dividend AchieversTM Portfolio
PowerShares International Dividend AchieversTM Portfolio
PowerShares Lux Nanotech Portfolio
PowerShares S&P 500® High Quality Portfolio
PowerShares Water Resources Portfolio
PowerShares WilderHill Clean Energy Portfolio
PowerShares WilderHill Progressive Energy Portfolio
PowerShares Zacks Micro Cap Portfolio
133
Board Considerations Regarding Approval of Continuation of Investment Advisory Agreement (Continued)
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 a 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 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. 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 and projected staffing, 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 execution of portfolio transactions on behalf of the Funds. The Trustees also reviewed information on the performance of the Funds and the performance of their underlying indexes for the one-year, three-year, five-year and since-inception periods ended December 31, 2012, as applicable, including reports for each of the last three calendar years on the correlation and tracking error between each Fund's performance and the performance of its underlying index, as well as the Adviser's analysis of the tracking error between each Fund and its underlying index. In reviewing the tracking error report, the Trustees considered information provided by Ibbotson Associates, a consultant to the Independent Trustees, with respect to general expected tracking error ranges and various explanations for tracking error. The Trustees noted that for each applicable period, the correlation and tracking error for each Fund was within the targeted range set forth in the Trust's registration statement. The Trustees concluded that each Fund was correlated to its underlying index and that the tracking error for each Fund was within an acceptable range given 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 concluded that the nature, extent and quality of services provided by the Adviser to the Funds under the Investment Advisory Agreement were appropriate and reasonable.
Fees, Expenses and Profitability. The Trustees reviewed and discussed the information provided by the Adviser on each Fund's advisory fee and net expense ratio, as compared to information compiled by the Adviser from Lipper Inc. databases on the advisory fees and net expense ratios of comparable exchange-traded funds ("ETFs"), open-end (non-ETF) index funds and open-end actively-managed funds. The Trustees noted that the annual advisory fee charged to each Fund is:
• 0.50% of the Fund's average daily net assets for each Fund other than PowerShares Dividend AchieversTM Portfolio, PowerShares High Yield Equity Dividend AchieversTM Portfolio, PowerShares International Dividend AchieversTM Portfolio, PowerShares FTSE RAFI US 1000 Portfolio, PowerShares FTSE RAFI US 1500 Small-Mid Portfolio, PowerShares Fundamental Pure Large Core Portfolio, PowerShares Fundamental Pure Large Growth Portfolio, PowerShares Fundamental Pure
134
Board Considerations Regarding Approval of Continuation of Investment Advisory Agreement (Continued)
Large Value Portfolio, PowerShares Fundamental Pure Mid Core Portfolio, PowerShares Fundamental Pure Mid Growth Portfolio, PowerShares Fundamental Pure Mid Value Portfolio, PowerShares Fundamental Pure Small Core Portfolio, PowerShares Fundamental Pure Small Growth Portfolio, PowerShares Fundamental Pure Small Value Portfolio and PowerShares S&P 500® High Quality Portfolio;
• 0.40% of the Fund's average daily net assets for each of PowerShares Dividend AchieversTM Portfolio, PowerShares High Yield Equity Dividend AchieversTM Portfolio and PowerShares International Dividend AchieversTM Portfolio; and
• 0.29% of the Fund's average daily net assets for each of PowerShares FTSE RAFI US 1000 Portfolio, PowerShares FTSE RAFI US 1500 Small-Mid Portfolio, PowerShares Fundamental Pure Large Core Portfolio, PowerShares Fundamental Pure Large Growth Portfolio, PowerShares Fundamental Pure Large Value Portfolio, PowerShares Fundamental Pure Mid Core Portfolio, PowerShares Fundamental Pure Mid Growth Portfolio, PowerShares Fundamental Pure Mid Value Portfolio, PowerShares Fundamental Pure Small Core Portfolio, PowerShares Fundamental Pure Small Growth Portfolio, PowerShares Fundamental Pure Small Value Portfolio and PowerShares S&P 500® High Quality Portfolio (for PowerShares S&P 500® High Quality Portfolio, the Trustees noted that the advisory fee was reduced to 0.29% effective December 18, 2012). In approving the advisory fee reduction for the Funds at the December 18, 2012 meeting, the Trustees considered the Adviser's representation that there would be no diminution in the quantity or quality of services provided in connection with the amendment to the Investment Advisory Agreement.
The Trustees also noted that the Adviser has agreed to waive a portion of its advisory fee and/or pay expenses (an "Expense Cap") to the extent necessary to prevent the annual operating expenses of each Fund from exceeding the percentage of that Fund's average daily net assets, at least until August 31, 2014, as set forth below:
• 0.60%, excluding interest expenses, brokerage commissions and other trading expenses, taxes, acquired fund fees and expenses and extraordinary expenses, for each of PowerShares Dynamic OTC Portfolio and PowerShares Dynamic Market Portfolio;
• 0.50%, excluding interest expenses, licensing fees, offering costs, brokerage commissions and other trading expenses, taxes, acquired fund fees and expenses and extraordinary expenses, for each of PowerShares Dividend AchieversTM Portfolio, PowerShares High Yield Equity Dividend AchieversTM Portfolio and PowerShares International Dividend AchieversTM Portfolio;
• 0.39%, excluding interest expenses, offering costs, brokerage commissions and other trading expenses, taxes, acquired fund fees and expenses and extraordinary expenses, for each of PowerShares FTSE RAFI US 1000 Portfolio, PowerShares FTSE RAFI US 1500 Small-Mid Portfolio, PowerShares Fundamental Pure Large Core Portfolio, PowerShares Fundamental Pure Large Growth Portfolio, PowerShares Fundamental Pure Large Value Portfolio, PowerShares Fundamental Pure Mid Core Portfolio, PowerShares Fundamental Pure Mid Growth Portfolio, PowerShares Fundamental Pure Mid Value Portfolio, PowerShares Fundamental Pure Small Core Portfolio, PowerShares Fundamental Pure Small Growth Portfolio and PowerShares Fundamental Pure Small Value Portfolio;
135
Board Considerations Regarding Approval of Continuation of Investment Advisory Agreement (Continued)
• 0.29%, excluding interest expenses, offering costs, brokerage commissions and other trading expenses, taxes, acquired fund fees and expenses and extraordinary expenses, for PowerShares S&P 500® High Quality Portfolio (the Trustees noted that the Expense Cap for the Fund was reduced to 0.29% effective November 21, 2012); and
• 0.60%, excluding interest expenses, licensing fees, offering costs, brokerage commissions and other trading expenses, taxes, acquired fund fees and expenses and extraordinary expenses, for each other Fund.
The Trustees noted that the Adviser represented that it does not serve as the investment adviser to any clients, other than ETFs overseen by the Trustees, with comparable investment strategies as the Funds, but that the Adviser provides sub-advisory services to clients with comparable investment strategies as certain of the Funds. The Trustees further noted the Adviser's explanation with respect to the sub-advisory fees it receives for such services in comparison to the advisory fees charged to the Funds. The Trustees noted that each Fund's advisory fee was:
• higher than the median advisory fee of its ETF peer funds (except for the advisory fee of each of PowerShares Golden Dragon China Portfolio, PowerShares International Dividend AchieversTM Portfolio and PowerShares Fundamental Pure Small Value Portfolio, which was equal to or lower than the median advisory fee of its ETF peer funds); and
• higher than the median advisory fee of its open-end index peer funds (except for the advisory fee of each of PowerShares Dynamic Energy Exploration & Production Portfolio, PowerShares Dynamic Energy Sector Portfolio, PowerShares Dynamic Oil & Gas Services Portfolio, PowerShares Fundamental Pure Large Core Portfolio, PowerShares Fundamental Pure Large Growth Portfolio, PowerShares Fundamental Pure Mid Growth Portfolio, PowerShares Fundamental Pure Mid Value Portfolio, PowerShares Fundamental Pure Small Value Portfolio, PowerShares Water Resources Portfolio, PowerShares WilderHill Clean Energy Portfolio and PowerShares WilderHill Progressive Energy Portfolio, which was lower than the median advisory fee of its open-end index peer funds; and there was no comparable data for PowerShares Aerospace & Defense Portfolio, PowerShares CleantechTM Portfolio, PowerShares Dividend AchieversTM Portfolio, PowerShares Dynamic Basic Materials Sector Portfolio, PowerShares Dynamic Biotechnology & Genome Portfolio, PowerShares Dynamic Building & Construction Portfolio, PowerShares Dynamic Consumer Discretionary Sector Portfolio, PowerShares Dynamic Consumer Staples Sector Portfolio, PowerShares Dynamic Financial Sector Portfolio, PowerShares Dynamic Food & Beverage Portfolio, PowerShares Dynamic Healthcare Sector Portfolio, PowerShares Dynamic Industrials Sector Portfolio, PowerShares Dynamic Leisure and Entertainment Portfolio, PowerShares Dynamic Media Portfolio, PowerShares Dynamic Pharmaceuticals Portfolio, PowerShares Dynamic Retail Portfolio, PowerShares Financial Preferred Portfolio, PowerShares Global Listed Private Equity Portfolio, PowerShares Golden Dragon China Portfolio, PowerShares High Yield Equity Dividend AchieversTM Portfolio or PowerShares International Dividend AchieversTM Portfolio); but
• lower than the median advisory fee of its open-end actively-managed peer funds.
The Trustees determined that the advisory fees were reasonable, noting the complexity of the indexes, the distinguishing factors of the Funds, and the higher administrative, operational and management oversight
136
Board Considerations Regarding Approval of Continuation of Investment Advisory Agreement (Continued)
costs for the Adviser. With respect to the Funds' net expense ratios, the Trustees noted that the net expense ratio for each Fund was:
• higher than the median net expense ratio of its ETF peer funds (except for the net expense ratio of each of PowerShares Dynamic OTC Portfolio, PowerShares FTSE RAFI US 1000 Portfolio, PowerShares FTSE RAFI US 1500 Small-Mid Portfolio, PowerShares Fundamental Pure Mid Core Portfolio, PowerShares Fundamental Pure Mid Growth Portfolio, PowerShares Fundamental Pure Small Core Portfolio and PowerShares S&P 500® High Quality Portfolio, which was equal to or less than the median net expense ratio of its ETF peer funds); and
• higher than the median net expense ratio of its open-end index peer funds (except for the net expense ratio of each of PowerShares Dividend AchieversTM Portfolio, PowerShares DWA Technical LeadersTM Portfolio, PowerShares Dynamic Energy Exploration & Production Portfolio, PowerShares Energy Sector Portfolio, PowerShares Dynamic Large Cap Growth Portfolio, PowerShares Dynamic Large Cap Value Portfolio, PowerShares Dynamic Networking Portfolio, PowerShares Oil & Gas Services Portfolio, PowerShares Dynamic OTC Portfolio, PowerShares Dynamic Semiconductors Portfolio, PowerShares Dynamic Software Portfolio, PowerShares Dynamic Technology Sector Portfolio, PowerShares Dynamic Utilities Sector Portfolio, PowerShares FTSE RAFI US 1500 Small-Mid Portfolio, PowerShares Fundamental Pure Large Core Portfolio, PowerShares Fundamental Pure Large Growth Portfolio, PowerShares Fundamental Pure Large Value Portfolio, PowerShares Fundamental Pure Mid Core Portfolio, PowerShares Fundamental Pure Mid Growth Portfolio, PowerShares Fundamental Pure Mid Value Portfolio, PowerShares Fundamental Pure Small Core Portfolio, PowerShares Fundamental Pure Small Growth Portfolio, PowerShares Fundamental Pure Small Value Portfolio, PowerShares High Yield Equity Dividend AchieversTM Portfolio, PowerShares Lux Nanotech Portfolio, PowerShares S&P 500® High Quality Portfolio, PowerShares Water Resources Portfolio, PowerShares WilderHill Clean Energy Portfolio and PowerShares WilderHill Progressive Energy Portfolio, which was lower than the median net expense ratio of its open-end index peer funds; and there was no comparable data for PowerShares Aerospace & Defense Portfolio, PowerShares CleantechTM Portfolio, PowerShares Dynamic Basic Materials Sector Portfolio, PowerShares Dynamic Biotechnology & Genome Portfolio, PowerShares Dynamic Building & Construction Portfolio, PowerShares Dynamic Consumer Discretionary Sector Portfolio, PowerShares Dynamic Consumer Staples Sector Portfolio, PowerShares Dynamic Financial Sector Portfolio, PowerShares Dynamic Food & Beverage Portfolio, PowerShares Dynamic Healthcare Sector Portfolio, PowerShares Dynamic Industrials Sector Portfolio, PowerShares Dynamic Leisure and Entertainment Portfolio, PowerShares Dynamic Media Portfolio, PowerShares Dynamic Pharmaceuticals Portfolio, PowerShares Dynamic Retail Portfolio, PowerShares Financial Preferred Portfolio, PowerShares Global Listed Private Equity Portfolio, PowerShares Golden Dragon China Portfolio or PowerShares International Dividend AchieversTM Portfolio); but
• lower than the median net expense ratio of its 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, and noted those Funds for which license fees are included in the Funds' Expense Caps.
The Board concluded that the advisory fee and expense ratio of each Fund (giving effect to the Fund's Expense Cap) were reasonable and appropriate in light of the services provided.
137
Board Considerations Regarding Approval of Continuation of Investment Advisory Agreement (Continued)
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 or losses realized by the Adviser from its relationship to each Fund. The Trustees concluded that the estimated profitability to the Adviser of the advisory services provided to any of the Funds was 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 and expense limitation agreed to by the Adviser. The Trustees noted that, for Funds whose expenses are higher than their respective Expense Caps, any reduction in that Fund's expenses would be enjoyed by the Adviser, but that Fund shareholders benefit from the lower expense ratio as a result of the Fund's Expense Cap. The Trustees also noted that the Excess Expense Agreement with the Trust provides that the Adviser is entitled to be reimbursed by each Fund, other than PowerShares Dynamic Market Portfolio and PowerShares Dynamic OTC Portfolio, 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 considered whether the advisory fee rate for each Fund was reasonable in relation to the asset size of that Fund, and concluded that the flat advisory fee was reasonable and appropriate, noting the Fund expenses the Adviser has borne as a result of the 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. No single factor was determinative in the Board's analysis.
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VOTING POLICIES AND PROCEDURES
A description of the Trust's 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) 983-0903. 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) 983-0903; or (ii) accessing the Trust's Form N-PX on the Commission's website at www.sec.gov.
QUARTERLY PORTFOLIOS
The Trust files its complete schedule of portfolio holdings for the Funds with the Commission for the first and third quarters of each fiscal year on Form N-Q. The Trust's Forms N-Q are available on the Commission's website at www.sec.gov. The Trust's Forms N-Q may also be reviewed and copied at the Commission's Public Reference Room in Washington, D.C.; information on the operation of the Public Reference Room may be obtained by calling (800) SEC-0330.
FREQUENCY DISTRIBUTION OF DISCOUNTS AND PREMIUMS
A table showing the number of days the market price of each Fund's shares was greater than the Fund's net asset value, and the number of days it was less than the Fund's net asset value (i.e., premium or discount) for the most recently completed calendar year, and the calendar quarters since that year end (or the life of the Fund, if shorter) may be found at the Fund's website at www.invescopowershares.com.
301 West Roosevelt Road
Wheaton, IL 60187
800.983.0903
www.invescopowershares.com
© 2013 Invesco PowerShares Capital Management LLC P-PS-AR-5
2013 Annual Report to Shareholders
April 30, 2013
PowerShares Dynamic MagniQuant Portfolio (PIQ)
PowerShares Dynamic Market Portfolio (PWC)
PowerShares Dynamic OTC Portfolio (PWO)
PowerShares FTSE RAFI US 1000 Portfolio (PRF)
PowerShares FTSE RAFI US 1500 Small-Mid Portfolio (PRFZ)
Table of Contents
The Market Environment | 2 | ||||||
Manager's Analysis | 4 | ||||||
Fees and Expenses | 23 | ||||||
Broad Market Portfolios | |||||||
Schedules of Investments | |||||||
PowerShares Dynamic MagniQuant Portfolio (PIQ) | 25 | ||||||
PowerShares Dynamic Market Portfolio (PWC) | 28 | ||||||
PowerShares Dynamic OTC Portfolio (PWO) | 30 | ||||||
PowerShares FTSE RAFI US 1000 Portfolio (PRF) | 32 | ||||||
PowerShares FTSE RAFI US 1500 Small-Mid Portfolio (PRFZ) | 43 | ||||||
Statements of Assets and Liabilities | 60 | ||||||
Statements of Operations | 61 | ||||||
Statements of Changes in Net Assets | 62 | ||||||
Financial Highlights | 64 | ||||||
Notes to Financial Statements | 67 | ||||||
Report of Independent Registered Public Accounting Firm | 80 | ||||||
Tax Information | 81 | ||||||
Trustees and Officers | 82 | ||||||
Board Considerations Regarding Approval of Continuation of Investment Advisory Agreement | 91 |
The Market Environment
Domestic Equity:
The fiscal year ended April 30, 2013, began amid negative investor sentiment; the ongoing eurozone sovereign debt crisis intensified and equity markets declined. Throughout the summer, news from Europe and China was poor; this precipitated a slowdown in the U.S., where market performance and economic data were mixed. Employment data, for instance, showed some improvement – but not enough. Companies generally met earnings expectations but missed revenue guidance.
In early fall, as the European Central Bank implemented new measures to support member economies and the U.S. Federal Reserve initiated a third round of quantitative easing, consumer sentiment began to improve. Businesses, on the other hand, grew more hesitant to spend in the second half of the fiscal year. This was due in large part to uncertainty surrounding U.S. election results, "fiscal cliff" negotiations and sequestration spending cuts in early 2013. However, for the first time in years, U.S. markets appeared willing to look past national headline events. U.S. equity markets were generally strong in the final five months of the reporting period, with major market indexes setting multi-year or even all-time highs.
2
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Manager's Analysis
PowerShares Dynamic MagniQuant Portfolio (ticker: PIQ)
As an index fund, the PowerShares Dynamic MagniQuant Portfolio (the "Fund") is passively managed and attempts to track the returns of an underlying index. The Fund seeks investment results that generally correspond (before fees and expenses) to the price and yield of the Dynamic Top 200 IntellidexSM Index (the "Index"). The Fund generally will invest at least 90% of its total assets in common stocks that comprise the Index.
The methodology the Index objectively identifies those stocks from the 2,000 largest U.S. stocks traded on the NYSE, NYSE MKT and the NASDAQ that have the greatest potential for capital appreciation as determined by the Index provider, NYSE Arca, Inc., pursuant to a proprietary NYSE Arca Intellidex model. The Index includes 200 equally-weighted stocks selected by NYSE Arca.
For the fiscal year ended April 30, 2013, on a market price basis, the Fund returned 21.56%. On a net asset value ("NAV") basis, the Fund returned 21.70%. During the same time period, the Index returned 22.89%. During the fiscal year, the Fund fully replicated the components of the Index, therefore, the Fund's performance (NAV basis) differed from the return of the Index primarily due to fees and operating expenses that the Fund incurred during the period.
During this same time period, the S&P 500® Equal Weight Index returned 20.33%, the Russell 3000® Index returned 17.21%, and the S&P 500® Index returned 16.89%. The S&P 500® Equal Weight Index, Russell 3000® Index and S&P 500® Index (the "Benchmark Indices") are unmanaged indices based on the average performance of approximately 500, 2,945 and 500 securities, respectively. The S&P 500® Equal Weight Index is equally weighted and the Russell 3000® Index and S&P 500® Index are market capitalization weighted.
The adviser selected the S&P 500® Equal Weight Index, Russell 3000® Index and S&P 500® Index as comparative indices to the Fund because of their recognition in the marketplace and their exposure to the broad equity market. The S&P 500® Equal Weight Index selects the largest 500 domestic securities by market capitalization then gives each of the 500 securities an equal weighting. Similarly, the Fund gives an equal weight to each of its 200 securities as selected from a starting universe consisting of the 2,000 largest and most liquid U.S. companies. Although the Russell 3000® and S&P 500® indexes are not equal weighted, their underlying securities represent the largest and most liquid U.S. securities. These reasons make their performance relevant when comparing to the Fund's performance.
The performance of the Fund differed from the Benchmark Indices because the Fund employs a quantitative model driven stock selection methodology followed by an equal weighting approach to portfolio construction, whereas the benchmark indices select and weight stocks based solely on market capitalization. The Benchmark Indices select the largest U.S. companies by market capitalization, the S&P 500® Equal Weight Index then equal weights each security and the Russell 3000 Index does not. The Fund on the other hand starts with the 2000 largest and most liquid U.S. companies then selects the top 200 companies as ranked by the Index's stock selection model. Consequently, the Fund may have a mix of Small, Mid, and Large Cap companies, whereas the Benchmark Indices consist of predominantly Large Cap companies. In addition, the Fund benefited from superior stock selection within the Energy and Financials Sectors. The majority of the Fund's outperformance relative to the S&P 500 Equal Weight Index and the Russell 3000 Indexes during the period can be attributed to positive stock selection within these two sectors.
Relative to the S&P 500® Index, the Fund was similarly exposed to the Energy, Financials and Information Technology sectors but benefited from positive stock selection in these sectors during the
4
Manager's Analysis (Continued)
PowerShares Dynamic MagniQuant Portfolio (ticker: PIQ)
fiscal year ended April 30, 2013. The majority of the Fund's outperformance relative to the S&P 500® Index during the period can be attributed positive stock selection.
For the fiscal year ended April 30, 2013, the Financials sector contributed most significantly to the Fund's return, followed by the Consumer Discretionary and Energy sectors, respectively. There were no detracting sectors.
Positions that contributed most significantly to the Fund's return included Tesoro Corp., an energy company (portfolio average weight of 0.49%); and Delek US Holdings, Inc., an energy company (portfolio average weight of 0.49%). Positions that detracted most significantly from the Fund's return included ITT Educational Services Inc., a consumer discretionary company (no longer held at April 30, 2013); and Apollo Group, Inc. Class A, a consumer discretionary company (portfolio average weight of 0.45%).
Sector Breakdown (% of the Fund's
Net Assets) as of April 30, 2013
Consumer Discretionary | 22.3 | ||||||
Financials | 18.6 | ||||||
Industrials | 14.3 | ||||||
Information Technology | 13.5 | ||||||
Health Care | 9.3 | ||||||
Energy | 8.2 | ||||||
Consumer Staples | 6.9 | ||||||
Materials | 4.3 | ||||||
Utilities | 1.5 | ||||||
Telecommunication Services | 1.1 | ||||||
Money Market Fund | 0.4 | ||||||
Liabilities in excess of other assets | (0.4 | ) |
Top Ten Fund Holdings (% of the Fund's
Net Assets) as of April 30, 2013
Security | |||||||
GameStop Corp., Class A | 0.7 | ||||||
Lumber Liquidators Holdings, Inc. | 0.7 | ||||||
Saia, Inc. | 0.7 | ||||||
Multimedia Games Holding Co., Inc. | 0.7 | ||||||
Hanesbrands, Inc. | 0.6 | ||||||
EPL Oil & Gas, Inc. | 0.6 | ||||||
Ryland Group, Inc. (The) | 0.6 | ||||||
Moody's Corp. | 0.6 | ||||||
USANA Health Sciences, Inc. | 0.6 | ||||||
Sanmina Corp. | 0.6 | ||||||
Total | 6.4 |
5
Manager's Analysis (Continued)
PowerShares Dynamic MagniQuant Portfolio (ticker: PIQ)
Growth of a $10,000 Investment Since Inception†
Fund Performance History (%) As of April 30, 2013
3 Years | 3 Years | 5 Years | 5 Years | Fund Inception† | |||||||||||||||||||||||||||
1 Year | Avg. Ann.†† | Cumulative | Avg. Ann.†† | Cumulative | Avg. Ann.†† | Cumulative | |||||||||||||||||||||||||
Index | |||||||||||||||||||||||||||||||
Dynamic Top 200 IntellidexSM Index | 22.89 | % | 14.01 | % | 48.21 | % | 6.49 | % | 36.93 | % | 5.05 | % | 38.11 | % | |||||||||||||||||
S&P 500® Equal Weight Index | 20.33 | % | 13.80 | % | 47.37 | % | 8.47 | % | 50.15 | % | 7.10 | % | 57.04 | % | |||||||||||||||||
Russell 3000® Index | 17.21 | % | 12.78 | % | 43.44 | % | 5.63 | % | 31.48 | % | 5.32 | % | 40.69 | % | |||||||||||||||||
S&P 500® Index | 16.89 | % | 12.80 | % | 43.54 | % | 5.21 | % | 28.92 | % | 4.99 | % | 37.78 | % | |||||||||||||||||
Fund | |||||||||||||||||||||||||||||||
NAV Return | 21.70 | % | 13.09 | % | 44.63 | % | 5.64 | % | 31.55 | % | 4.25 | % | 31.30 | % | |||||||||||||||||
Market Price Return | 21.56 | % | 13.03 | % | 44.40 | % | 5.61 | % | 31.40 | % | 4.24 | % | 31.24 | % |
Fund Inception: October 12, 2006
Performance quoted above represents past performance. Past performance is not a guarantee of future results and current performance may be higher or lower than performance quoted. Investment returns and principal value will fluctuate, and shares of the Fund ("Fund Shares"), when redeemed or sold, may be worth more or less than their original cost. Had the adviser not waived fees and/or reimbursed expenses, performance would have been lower. The adviser has contractually agreed to waive fees and/or pay certain Fund expenses through August 31, 2014. According to the Fund's current prospectus, the total gross annual operating expense ratio was indicated as 1.22%. The Financial Highlights section of the Shareholders Report presents the expense ratios based on expenses incurred during the period covered by this report. NAV and Market Price returns assume that dividends and capital gain distributions have been reinvested in the Fund at NAV and Market 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.
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.
† Fund and Index returns are based on the inception date of the Fund. Returns for the Benchmark Indices are based on the closest month-end to the Fund's inception date.
†† Average annualized.
6
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Manager's Analysis
PowerShares Dynamic Market Portfolio (ticker: PWC)
As an index fund, the PowerShares Dynamic Market Portfolio (the "Fund") is passively managed and attempts to track the returns of an underlying index. The Fund seeks investment results that generally correspond (before fees and expenses) to the price and yield of the Dynamic Market IntellidexSM Index (the "Index"). The Fund generally will invest at least 90% of its total assets in common stocks that comprise the Index.
The methodology of the Index objectively identifies those stocks from the 2,000 (by market capitalization) and most liquid U.S. stocks traded on the NYSE, NYSE MKT and the NASDAQ. Using a proprietary NYSE Arca Intellidex model, the Index provider, NYSE Arca, Inc. selects for inclusion in the Index 100 U.S. stocks that have superior risk-return profiles. The Index includes 100 stocks that NYSE Arca identifies from the broad market universe and sector constrains them. The number of companies selected from each sector is pre-determined, but the percentage weighting for the sector relative to the entire portfolio gets adjusted quarterly to reflect the broad market. The top-ranked relatively larger stocks within each sector receive 70% of the Index weighting and the top-ranked relatively smaller stocks receive 30% of the Index weighting. The Index provider equally weights stock within their size groups.
For the fiscal year ended April 30, 2013, on a market price basis, the Fund returned 22.40%. On a net asset value ("NAV") basis, the Fund returned 22.39%. During the same time period, the Index returned 23.29%. During the fiscal year, the Fund fully replicated the components of the Index, therefore, the Fund's performance (NAV basis) differed from the return of the Index primarily due to fees and operating expenses that the Fund incurred during the period.
During this same time period, the Russell 3000® Index returned 17.21%, and the S&P 500® Index returned 16.89%. The Russell 3000® Index and S&P 500® Index (the "Benchmark Indices") are unmanaged indices weighted by market capitalization based on the average performance of approximately 2,945 and 500 securities, respectively. The adviser provided these additional comparative benchmarks to help investors better understand how the investment results of the Fund compare to the performance of other broad-based market benchmarks.
The S&P 500® Index and Russell 3000® Index were selected as comparative indices to the Fund because of their recognition in the marketplace and their shared exposure to the broad equity market. These reasons make their performance relevant when comparing to the Fund's performance.
The performance of the Fund differed from these Benchmark Indices because the Fund employs a modified equal weighting and stock selection methodology whereas the Benchmark Indices select and weight stocks based on market capitalization. In addition, relative to the Russell 3000® Index, the Fund was overweight in the Energy and Information Technology sectors during the fiscal year that ended April 30, 2013. The majority of the Fund's outperformance relative to this index during the period can be attributed to this sector allocation.
Relative to the S&P 500® Index, the Fund's sector allocation was constrained to closely match the sector weightings within the S&P 500® Index during the fiscal year that ended April 30, 2013. The Fund's outperformance relative to the S&P 500® Index during the period can be attributed to positive stock selection within the Energy and Information Technology sectors.
8
Manager's Analysis (Continued)
PowerShares Dynamic Market Portfolio (ticker: PWC)
For the fiscal year ended April 30, 2013, the Energy sector contributed most significantly to the Fund's return, followed by the Information Technology and Financials sectors, respectively. There were no detracting sectors.
Positions that contributed most significantly to the Fund's return included Valero Energy Corp., an energy company (no longer held at April 30, 2013); and Marathon Petroleum Corp., an energy company (portfolio average weight of 3.46%). Positions that detracted most significantly from the Fund's return included VeriSign Inc., an information technology company (no longer held at April 30, 2013); and Dell Inc., an information technology company (no longer held at April 30, 2013).
Sector Breakdown (% of the Fund's
Net Assets) as of April 30, 2013
Information Technology | 18.0 | ||||||
Financials | 14.6 | ||||||
Consumer Discretionary | 13.3 | ||||||
Health Care | 11.8 | ||||||
Industrials | 11.8 | ||||||
Energy | 10.7 | ||||||
Consumer Staples | 10.4 | ||||||
Materials | 3.5 | ||||||
Utilities | 3.4 | ||||||
Telecommunication Services | 2.6 | ||||||
Money Market Fund | 0.1 | ||||||
Liabilities in excess of other assets | (0.2 | ) |
Top Ten Fund Holdings (% of the Fund's
Net Assets) as of April 30, 2013
Security | |||||||
Marathon Petroleum Corp. | 3.8 | ||||||
CVS Caremark Corp. | 3.8 | ||||||
Phillips 66 | 3.7 | ||||||
Costco Wholesale Corp. | 3.6 | ||||||
Southwest Airlines Co. | 2.9 | ||||||
Northrop Grumman Corp. | 2.8 | ||||||
Seagate Technology PLC | 2.8 | ||||||
Fiserv, Inc. | 2.8 | ||||||
L-3 Communications Holdings, Inc. | 2.6 | ||||||
Biogen Idec, Inc. | 2.5 | ||||||
Total | 31.3 |
9
Manager's Analysis (Continued)
PowerShares Dynamic Market Portfolio (ticker: PWC)
Growth of a $10,000 Investment Since Inception†
Fund Performance History (%) As of April 30, 2013
3 Years | 3 Years | 5 Years | 5 Years | Fund Inception† | |||||||||||||||||||||||||||
1 Year | Avg. Ann.†† | Cumulative | Avg. Ann.†† | Cumulative | Avg. Ann.†† | Cumulative | |||||||||||||||||||||||||
Index | |||||||||||||||||||||||||||||||
Dynamic Market IntellidexSM Index | 23.29 | % | 14.05 | % | 48.33 | % | 5.21 | % | 28.88 | % | 9.36 | % | 144.68 | % | |||||||||||||||||
S&P 500® Index | 16.89 | % | 12.80 | % | 43.54 | % | 5.21 | % | 28.92 | % | 7.88 | % | 113.56 | % | |||||||||||||||||
Russell 3000® Index | 17.21 | % | 12.78 | % | 43.44 | % | 5.63 | % | 31.48 | % | 8.48 | % | 125.61 | % | |||||||||||||||||
Fund | |||||||||||||||||||||||||||||||
NAV Return | 22.39 | % | 13.27 | % | 45.34 | % | 4.52 | % | 24.73 | % | 8.69 | % | 130.17 | % | |||||||||||||||||
Market Price Return | 22.40 | % | 13.25 | % | 45.26 | % | 4.52 | % | 24.75 | % | 8.69 | % | 130.01 | % |
Fund Inception: May 1, 2003
Performance quoted above represents past performance. Past performance is not a guarantee of future results and current performance may be higher or lower than performance quoted. Investment returns and principal value will fluctuate, and shares of the Fund ("Fund Shares"), when redeemed or sold, may be worth more or less than their original cost. Had the adviser not waived fees and/or reimbursed expenses in the past, performance would have been lower. The adviser has contractually agreed to waive fees and/or pay certain Fund expenses through August 31, 2014. According to the Fund's current prospectus, the total gross annual operating expense ratio was indicated as 0.62%. The Financial Highlights section of the Shareholders Report presents the expense ratios based on expenses incurred during the period covered by this report. NAV and Market Price returns assume that dividends and capital gain distributions have been reinvested in the Fund at NAV and Market 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.
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.
† Fund and Index returns are based on the inception date of the Fund. Returns for the Benchmark Indices are based on the closest month-end to the Fund's inception date.
†† Average annualized.
10
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Manager's Analysis
PowerShares Dynamic OTC Portfolio (ticker: PWO)
As an index fund, the PowerShares Dynamic OTC Portfolio (the "Fund") is passively managed and attempts to track the returns of an underlying index. The Fund seeks investment results that generally correspond (before fees and expenses) to the price and yield of the Dynamic OTC IntellidexSM Index (the "Index"). The Fund generally will invest at least 90% of its total assets in common stocks that comprise the Index. If the composition of the Index changes, the Fund will continue to invest at least 80% of its total assets in over-the-counter ("OTC") securities.
The methodology of the Index objectively identifies those stocks from the 2,000 largest U.S. OTC stocks (by market capitalization) traded on the NASDAQ. NYSE Arca, Inc., the index provider, using a proprietary NYSE Arca Intellidex model, selects for inclusion in the Index 100 OTC securities with superior risk-return profiles. The index provider divides eligible stocks by sector and then ranks stocks within each sector according to a proprietary model score. The number of companies selected from each sector is pre-determined, but the percentage weighting for the sector relative to the entire portfolio gets adjusted quarterly to reflect the broad market. The top-ranked relatively larger stocks within each sector receive 70% of the Index weighting and the top-ranked relatively smaller stocks receive 30% of the Index weighting. The index provider equally weights stocks within their size groups.
For the fiscal year ended April 30, 2013, on a market price basis, the Fund returned 9.63%. On a net asset value ("NAV") basis, the Fund returned 9.75%. During the same time period, the Index returned 10.84%. During the fiscal year, the Fund fully replicated the components of the Index, therefore, the Fund's performance (NAV basis) differed from the return of the Index primarily due to fees and operating expenses that the fund incurred during the period.
During this same time period, the NASDAQ Composite Index returned 9.27%, the NASDAQ-100® Index returned 7.48%, and the S&P 500® Index returned 16.89%. The NASDAQ Composite Index, NASDAQ-100® Index and S&P 500® Index (the "Benchmark Indices") are unmanaged indices weighted by market capitalization based on the average performance of approximately 2,439, 100 and 500 securities, respectively. The adviser provided these additional comparative benchmarks to help investors better understand how the investment results of the Fund compare to the investment results of a number of broad-based market benchmarks.
The NASDAQ Composite Index, NASDAQ-100® Index, and S&P 500® Index were selected as comparative indices to the Fund because of their recognition in the marketplace and their shared exposure to the broad equity market. These reasons make their performance relevant when comparing to the Fund's performance.
The performance of the Fund differed from these Benchmark Indices because the Fund employs a modified equal weighting and stock selection methodology whereas the indexes select and weight stocks based on market capitalization. More specifically, relative to the NASDAQ Composite Index, and NASDAQ-100® Index, the Fund experienced strong stock selection within the Information Technology sector during the fiscal year that ended April 30, 2013. The majority of the Fund's outperformance relative to these indexes during the period can be attributed to stock selection within the Information Technology sector.
Relative to the S&P 500® Index, the Fund was overweight in the Information Technology sector during the fiscal year that ended April 30, 2013. The majority of the Fund's underperformance relative to the S&P 500® Index during that period can be attributed to this sector allocation. While the Fund benefitted from its selection of stocks within the Information Technology Sector relative to that of the NASDAQ
12
Manager's Analysis (Continued)
PowerShares Dynamic OTC Portfolio (ticker: PWO)
Composite Index and NASDAQ-100 Index, the Fund was hurt by its overweighting of Information Technology securities relative to the S&P 500® Index. The Information Technology sector had an average weight of 53.75% within the Fund, while the S&P 500 Index had an average weight of 19.20% to the Information Technology sector during the period. Information Technology was the worst performing sector within the S&P 500® Index, thus underweighting this sector relative to the Fund benefitted the S&P 500® Index.
For the fiscal year ended April 30, 2013, the Information Technology sector contributed most significantly to the Fund's return, followed by Industrials and Energy sectors, respectively.
Positions that contributed most significantly to the Fund's return included Starz – Liberty Capital Series A, a consumer discretionary company (portfolio average weight of 0.94%); and Equinix, Inc., an information technology company (portfolio average weight of 2.98%). Positions that detracted most significantly from the Fund's return included Questcor Pharmaceuticals, Inc., a health care company (portfolio average weight of 0.53%); and Dell Inc., an information technology company (no longer held at April 30, 2013).
Sector Breakdown (% of the Fund's
Net Assets) as of April 30, 2013
Information Technology | 50.2 | ||||||
Consumer Discretionary | 19.6 | ||||||
Health Care | 13.4 | ||||||
Financials | 5.9 | ||||||
Industrials | 4.4 | ||||||
Consumer Staples | 4.1 | ||||||
Energy | 1.1 | ||||||
Telecommunication Services | 0.7 | ||||||
Materials | 0.6 | ||||||
Money Market Fund | 0.4 | ||||||
Liabilities in excess of other assets | (0.4 | ) |
Top Ten Fund Holdings (% of the Fund's
Net Assets) as of April 30, 2013
Security | |||||||
Cree, Inc. | 3.5 | ||||||
DISH Network Corp., Class A | 3.5 | ||||||
Icahn Enterprises LP | 3.4 | ||||||
Western Digital Corp. | 3.4 | ||||||
Comcast Corp., Class A | 3.3 | ||||||
Seagate Technology PLC | 3.2 | ||||||
Fiserv, Inc. | 3.2 | ||||||
Staples, Inc. | 3.1 | ||||||
Flextronics International Ltd. | 3.0 | ||||||
Symantec Corp. | 3.0 | ||||||
Total | 32.6 |
13
Manager's Analysis (Continued)
PowerShares Dynamic OTC Portfolio (ticker: PWO)
Growth of a $10,000 Investment Since Inception†
Fund Performance History (%) As of April 30, 2013
3 Years | 3 Years | 5 Years | 5 Years | Fund Inception† | |||||||||||||||||||||||||||
1 Year | Avg. Ann.†† | Cumulative | Avg. Ann.†† | Cumulative | Avg. Ann.†† | Cumulative | |||||||||||||||||||||||||
Index | |||||||||||||||||||||||||||||||
Dynamic OTC IntellidexSM Index | 10.84 | % | 8.58 | % | 28.00 | % | 4.55 | % | 24.94 | % | 7.79 | % | 111.76 | % | |||||||||||||||||
NASDAQ Composite Index | 9.27 | % | 10.59 | % | 35.25 | % | 6.65 | % | 37.96 | % | 8.56 | % | 127.33 | % | |||||||||||||||||
NASDAQ-100® Index | 7.48 | % | 14.21 | % | 48.96 | % | 9.50 | % | 57.43 | % | 10.77 | % | 178.23 | % | |||||||||||||||||
S&P 500® Index | 16.89 | % | 12.80 | % | 43.54 | % | 5.21 | % | 28.92 | % | 7.88 | % | 113.56 | % | |||||||||||||||||
Fund | |||||||||||||||||||||||||||||||
NAV Return | 9.75 | % | 7.76 | % | 25.13 | % | 3.82 | % | 20.59 | % | 7.10 | % | 98.53 | % | |||||||||||||||||
Market Price Return | 9.63 | % | 7.71 | % | 24.95 | % | 3.78 | % | 20.37 | % | 7.07 | % | 98.01 | % |
Fund Inception: May 1, 2003
Performance quoted above represents past performance. Past performance is not a guarantee of future results and current performance may be higher or lower than performance quoted. Investment returns and principal value will fluctuate, and shares of the Fund ("Fund Shares"), when redeemed or sold, may be worth more or less than their original cost. Had the adviser not waived fees and/or reimbursed expenses, performance would have been lower. The adviser has contractually agreed to waive fees and/or pay certain Fund expenses through August 31, 2014. According to the Fund's current prospectus, the total gross annual operating expense ratio was indicated as 0.93%. The Financial Highlights section of the Shareholders Report presents the expense ratios based on expenses incurred during the period covered by this report. NAV and Market Price returns assume that dividends and capital gain distributions have been reinvested in the Fund at NAV and Market 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.
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.
† Fund and Index returns are based on the inception date of the Fund. Returns for the Benchmark Indices are based on the closest month-end to the Fund's inception date.
†† Average annualized.
14
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Manager's Analysis
PowerShares FTSE RAFI US 1000 Portfolio (ticker: PRF)
As an index fund, the PowerShares FTSE RAFI US 1000 Portfolio (the "Fund") is passively managed and attempts to track the returns of an underlying index. The Fund seeks investment results that generally correspond (before fees and expenses) to the price and yield of the FTSE RAFI US 1000 Index (the "Index"). The Fund generally will invest at least 90% of its total assets in common stocks that comprise the Index.
The Index selects its components from the universe of stocks which are incorporated in the United States. The Index is designed to track the performance of the largest U.S. equity stocks based on four fundamental measures of firm size: book value, cash flow, sales and dividends. It then selects 1,000 stocks with the highest fundamental weight and assigns a weight equal to its fundamental weight.
For the fiscal year ended April 30, 2013, on a market price basis, the Fund returned 22.09%. On a net asset value ("NAV") basis, the Fund returned 22.06%. During the same time period, the Index returned 22.52%. During the fiscal year, the Fund fully replicated the components of the Index, therefore, the Fund's performance (NAV basis) differed from the return of the Index primarily due to fees and operating expenses that the fund incurred during the period.
During this same time period, the Russell 1000® Index returned 17.17%, and the S&P 500® Index returned 16.89%. The Russell 1000® Index and S&P 500® Index (the "Benchmark Indices") are unmanaged indices weighted by market capitalization based on the average performance of approximately 992 and 500 securities, respectively. The adviser provided these additional comparative benchmarks to help investors better understand how the investment results of the Fund compare to the investment results of a number of broad-based market benchmarks.
The Russell 1000® Index was selected as a comparative benchmark because of the similar number of securities as the Fund and because it is a well-known large cap benchmark index. The S&P 500® Index only contains half the number of securities as the Fund, but its status as a well-known benchmark index and its similar exposure to large cap stocks still makes its comparison relevant.
The performance of the Fund differed from these comparative indexes in large part because the Fund employs a fundamental weighting and stock selection methodology whereas the Benchmark Indices select and weight stocks based on market capitalization.
Relative to both the Russell 1000® Index and the S&P 500® Index, the Fund was underweight in the Information Technology sector and overweight in the Financials sector and benefited from positive stock selection in these sectors during the fiscal year that ended April 30, 2013. The majority of the Fund's outperformance relative to the Russell 1000® Index and the S&P 500® Index during that period can be attributed to these sector allocations and stock selections.
For the fiscal year ended April 30, 2013, the Financials sector contributed most significantly to the Fund's return, followed by the Consumer Discretionary and Health Care sectors, respectively. There were no detracting sectors.
16
Manager's Analysis (Continued)
PowerShares FTSE RAFI US 1000 Portfolio (ticker: PRF)
Positions that contributed most significantly to the Fund's return included Bank of America Corp., a financials company (portfolio average weight of 2.58%); and Citigroup, Inc., a financials company (portfolio average weight of 1.74%). Positions that detracted most significantly from the Fund's return included Hewlett-Packard Co., an information technology company (portfolio average weight of 0.51%); and Apple, Inc., an information technology company (portfolio average weight of 0.60%).
Sector Breakdown (% of the Fund's
Net Assets) as of April 30, 2013
Financials | 21.3 | ||||||
Energy | 12.2 | ||||||
Information Technology | 10.9 | ||||||
Consumer Discretionary | 10.8 | ||||||
Health Care | 10.5 | ||||||
Industrials | 10.4 | ||||||
Consumer Staples | 10.3 | ||||||
Utilities | 5.4 | ||||||
Telecommunication Services | 4.5 | ||||||
Materials | 3.7 | ||||||
Money Market Fund | 1.3 | ||||||
Liabilities in excess of other assets | (1.3 | ) |
Top Ten Fund Holdings (% of the Fund's
Net Assets) as of April 30, 2013
Security | |||||||
Exxon Mobil Corp. | 2.9 | ||||||
Bank of America Corp. | 2.1 | ||||||
AT&T, Inc. | 2.1 | ||||||
Chevron Corp. | 2.0 | ||||||
General Electric Co. | 1.8 | ||||||
JPMorgan Chase & Co. | 1.7 | ||||||
Citigroup, Inc. | 1.6 | ||||||
Verizon Communications, Inc. | 1.5 | ||||||
Pfizer, Inc. | 1.4 | ||||||
Wells Fargo & Co. | 1.4 | ||||||
Total | 18.5 |
17
Manager's Analysis (Continued)
PowerShares FTSE RAFI US 1000 Portfolio (ticker: PRF)
Growth of a $10,000 Investment Since Inception†
Fund Performance History (%) As of April 30, 2013
3 Years | 3 Years | 5 Years | 5 Years | Fund Inception† | |||||||||||||||||||||||||||
1 Year | Avg. Ann.†† | Cumulative | Avg. Ann.†† | Cumulative | Avg. Ann.†† | Cumulative | |||||||||||||||||||||||||
Index | |||||||||||||||||||||||||||||||
FTSE RAFI US 1000 Index | 22.52 | % | 13.10 | % | 44.68 | % | 7.80 | % | 45.59 | % | 7.37 | % | 68.78 | % | |||||||||||||||||
S&P 500® Index | 16.89 | % | 12.80 | % | 43.54 | % | 5.21 | % | 28.92 | % | 5.64 | % | 49.55 | % | |||||||||||||||||
Russell 1000® Index | 17.17 | % | 12.91 | % | 43.96 | % | 5.49 | % | 30.61 | % | 5.85 | % | 51.70 | % | |||||||||||||||||
Fund | |||||||||||||||||||||||||||||||
NAV Return | 22.06 | % | 12.67 | % | 43.05 | % | 7.44 | % | 43.14 | % | 6.88 | % | 63.24 | % | |||||||||||||||||
Market Price Return | 22.09 | % | 12.65 | % | 42.96 | % | 7.46 | % | 43.28 | % | 6.92 | % | 63.66 | % | �� |
Fund Inception: December 19, 2005
Performance quoted above represents past performance. Past performance is not a guarantee of future results and current performance may be higher or lower than performance quoted. Investment returns and principal value will fluctuate, and shares of the Fund ("Fund Shares"), when redeemed or sold, may be worth more or less than their original cost. Had the adviser not waived fees and/or reimbursed expenses, performance would have been lower. The adviser has contractually agreed to waive fees and/or pay certain Fund expenses through August 31, 2014. According to the Fund's current prospectus, the total gross annual operating expense ratio was indicated as 0.43%. The Financial Highlights section of the Shareholders Report presents the expense ratios based on expenses incurred during the period covered by this report. NAV and Market Price returns assume that dividends and capital gain distributions have been reinvested in the Fund at NAV and Market 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.
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.
† Fund and Index returns are based on the inception date of the Fund. Returns for the Benchmark Indices are based on the closest month-end to the Fund's inception date.
†† Average annualized.
18
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Manager's Analysis
PowerShares FTSE RAFI US 1500 Small-Mid Portfolio (ticker: PRFZ)
As an index fund, the PowerShares FTSE RAFI US 1500 Small-Mid Portfolio (the "Fund") is passively managed and attempts to track the returns of an underlying index. The Fund seeks investment results that generally correspond (before fees and expenses) to the price and yield of the FTSE RAFI US 1500 Small-Mid Index (the "Index"). The Fund generally will invest at least 90% of its total assets in common stocks that comprise the Index.
The Index provider selects the components from the universe of stocks which are incorporated in the United States. The Index is designed to track the performance of small and medium-sized U.S. equity stocks based on four fundamental measures of firm size: book value, cash flow, sales and dividends. The Index provider then excludes the securities with a fundamental weight ranking of 1 through 1,000 and instead includes the securities with a fundamental weight ranking of 1,001 through 2,500. Finally, The Index provider assigns a weight to each of these 1,500 stocks equal to its fundamental weight.
For the fiscal year ended April 30, 2013, on a market price basis, the Fund returned 18.41%. On a net asset value ("NAV") basis, the Fund returned 18.56%. During the same time period, the Index returned 18.80% During the fiscal year, the Fund fully replicated the components of the Index, therefore, the Fund's performance (NAV basis) differed from the return of the Index primarily due to fees and operating expenses that the fund incurred during the period.
During this same time period, the S&P SmallCap 600® Index returned 17.32%, the Russell 2000® Index returned 17.69%, and the S&P 500® Index returned 16.89%. The S&P SmallCap 600® Index, Russell 2000® Index and S&P 500® Index (the "Benchmark Indices") are unmanaged indices weighted by market capitalization based on the average performance of approximately 600, 1,953 and 500 securities, respectively. The adviser provided these additional comparative benchmarks to help investors better understand how the investment results of the Fund compare to the investment results of a number of broad-based market benchmarks.
The S&P SmallCap 600® Index was selected because of the similar exposure it shares with the Fund to small cap stocks. The Russell 2000® Index also was selected as a comparative benchmark because of the similar exposure it has with the Fund to small cap stocks and additionally because of the roughly similar number of securities as the Fund. The S&P 500® Index does not have the same specific small cap relevance as the other indices do; however, its performance comparison is a useful measure for investors as a broad representation of the overall U.S. stock market.
The performance of the Fund differed from these Benchmark Indices because the Fund employs a fundamental weighting and stock selection methodology whereas the comparative indexes select and weight stocks based on market capitalization. Relative to the S&P Smallcap 600® Index, the Fund was similarly exposed to the Financials, Consumer Discretionary, and Health Care sectors but benefited from positive stock selection in these sectors during the fiscal year that ended April 30, 2013. The majority of the Fund's outperformance relative to the S&P Smallcap 600® Index during that period can be attributed to positive stock selection. Relative to the Russell 2000® Index, the Fund was overweight in the Consumer Discretionary sector and similarly exposed to the Financials and Materials sectors, but the Fund benefited from positive stock selection in these sectors during the fiscal year that ended April 30, 2013. The majority of the Fund's outperformance relative to the Russell 2000® Index during that period can be attributed to these sector allocations and positive stock selection.
Relative to the S&P 500® Index, the Fund was overweight in the Consumer Discretionary and Financials sectors and benefited from positive stock selection in these sectors during the fiscal year that ended April 30, 2013. The majority of the Fund's outperformance relative to the S&P 500® Index during that period can be attributed to these sector allocations and positive stock selection.
20
Manager's Analysis (Continued)
PowerShares FTSE RAFI US 1500 Small-Mid Portfolio (ticker: PRFZ)
For the fiscal year ended April 30, 2013, the Financials sector contributed most significantly to the Fund's return, followed by the Consumer Discretionary and Industrials sectors, respectively. The Energy sector detracted most from the Fund's return.
Positions that contributed most significantly to the Fund's return included Louisiana-Pacific Corp., a materials company (portfolio average weight of 0.27%); and Hovnanian Enterprises, Inc. Class A, a consumer discretionary company (portfolio average weight of 0.19%). Positions that detracted most significantly from the Fund's return included ITT Educational Services Inc., a consumer discretionary company (no longer held at April 30, 2013); and Patriot Coal Corp., an energy company (no longer held at April 30, 2013).
Sector Breakdown (% of the Fund's
Net Assets) as of April 30, 2013
Financials | 21.6 | ||||||
Consumer Discretionary | 18.7 | ||||||
Information Technology | 16.8 | ||||||
Industrials | 16.6 | ||||||
Health Care | 7.3 | ||||||
Energy | 6.8 | ||||||
Materials | 5.6 | ||||||
Consumer Staples | 3.6 | ||||||
Utilities | 1.5 | ||||||
Telecommunication Services | 1.5 | ||||||
Money Market Fund | 7.0 | ||||||
Liabilities in excess of other assets | (7.0 | ) |
Top Ten Fund Holdings (% of the Fund's
Net Assets) as of April 30, 2013
Security | |||||||
Boyd Gaming Corp. | 0.3 | ||||||
MGIC Investment Corp. | 0.3 | ||||||
Quicksilver Resources, Inc. | 0.2 | ||||||
Deckers Outdoor Corp. | 0.2 | ||||||
Cabela's, Inc. | 0.2 | ||||||
Ferro Corp. | 0.2 | ||||||
Illumina, Inc. | 0.2 | ||||||
Howard Hughes Corp. (The) | 0.2 | ||||||
Men's Wearhouse, Inc. (The) | 0.2 | ||||||
American National Insurance Co. | 0.2 | ||||||
Total | 2.2 |
21
Manager's Analysis (Continued)
PowerShares FTSE RAFI US 1500 Small-Mid Portfolio (ticker: PRFZ)
Growth of a $10,000 Investment Since Inception†
Fund Performance History (%) As of April 30, 2013
3 Years | 3 Years | 5 Years | 5 Years | Fund Inception† | |||||||||||||||||||||||||||
1 Year | Avg. Ann.†† | Cumulative | Avg. Ann.†† | Cumulative | Avg. Ann.†† | Cumulative | |||||||||||||||||||||||||
Index | |||||||||||||||||||||||||||||||
FTSE RAFI US 1500 Small-Mid Index | 18.80 | % | 10.67 | % | 35.54 | % | 10.37 | % | 63.76 | % | 8.08 | % | 67.08 | % | |||||||||||||||||
S&P SmallCap 600® Index | 17.32 | % | 12.92 | % | 43.97 | % | 8.28 | % | 48.84 | % | 6.78 | % | 54.04 | % | |||||||||||||||||
Russell 2000® Index | 17.69 | % | 11.25 | % | 37.70 | % | 7.27 | % | 42.06 | % | 5.58 | % | 42.96 | % | |||||||||||||||||
S&P 500® Index | 16.89 | % | 12.80 | % | 43.54 | % | 5.21 | % | 28.92 | % | 4.99 | % | 37.78 | % | |||||||||||||||||
Fund | |||||||||||||||||||||||||||||||
NAV Return | 18.56 | % | 10.43 | % | 34.66 | % | 10.26 | % | 62.97 | % | 7.80 | % | 64.31 | % | |||||||||||||||||
Market Price Return | 18.41 | % | 10.40 | % | 34.57 | % | 10.26 | % | 62.95 | % | 7.79 | % | 64.13 | % |
Fund Inception: September 20, 2006
Performance quoted above represents past performance. Past performance is not a guarantee of future results and current performance may be higher or lower than performance quoted. Investment returns and principal value will fluctuate, and shares of the Fund ("Fund Shares"), when redeemed or sold, may be worth more or less than their original cost. Had the adviser not waived fees and/or reimbursed expenses, performance would have been lower. The adviser has contractually agreed to waive fees and/or pay certain Fund expenses through August 31, 2014. According to the Fund's current prospectus, the total gross annual operating expense ratio was indicated as 0.44%. The Financial Highlights section of the Shareholders Report presents the expense ratios based on expenses incurred during the period covered by this report. NAV and Market Price returns assume that dividends and capital gain distributions have been reinvested in the Fund at NAV and Market 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.
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.
† Fund and Index returns are based on the inception date of the Fund. Returns for the Benchmark Indices are based on the closest month-end to the Fund's inception date.
†† Average annualized.
22
Fees and Expenses
As a shareholder of a Fund of the PowerShares Exchange-Traded Fund Trust, you incur advisory fees and other 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 ended April 30, 2013.
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 and brokerage commissions. 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, 2012 | Ending Account Value April 30, 2013 | Annualized Expense Ratio Based on the Six-Month Period | Expenses Paid During the Six-Month Period (1) | ||||||||||||||||
PowerShares Dynamic MagniQuant Portfolio (PIQ) Actual | $ | 1,000.00 | $ | 1,205.70 | 0.65 | % | $ | 3.55 | |||||||||||
Hypothetical (5% return before expenses) | $ | 1,000.00 | $ | 1,021.57 | 0.65 | % | $ | 3.26 | |||||||||||
PowerShares Dynamic Market Portfolio (PWC) Actual | $ | 1,000.00 | $ | 1,208.24 | 0.60 | % | $ | 3.29 | |||||||||||
Hypothetical (5% return before expenses) | $ | 1,000.00 | $ | 1,021.82 | 0.60 | % | $ | 3.01 | |||||||||||
PowerShares Dynamic OTC Portfolio (PWO) Actual | $ | 1,000.00 | $ | 1,186.34 | 0.60 | % | $ | 3.25 | |||||||||||
Hypothetical (5% return before expenses) | $ | 1,000.00 | $ | 1,021.82 | 0.60 | % | $ | 3.01 |
23
Fees and Expenses (Continued)
Beginning Account Value November 1, 2012 | Ending Account Value April 30, 2013 | Annualized Expense Ratio Based on the Six-Month Period | Expenses Paid During the Six-Month Period (1) | ||||||||||||||||
PowerShares FTSE RAFI US 1000 Portfolio (PRF) Actual | $ | 1,000.00 | $ | 1,176.64 | 0.39 | % | $ | 2.10 | |||||||||||
Hypothetical (5% return before expenses) | $ | 1,000.00 | $ | 1,022.86 | 0.39 | % | $ | 1.96 | |||||||||||
PowerShares FTSE RAFI US 1500 Small-Mid Portfolio (PRFZ) Actual | $ | 1,000.00 | $ | 1,174.80 | 0.39 | % | $ | 2.10 | |||||||||||
Hypothetical (5% return before expenses) | $ | 1,000.00 | $ | 1,022.86 | 0.39 | % | $ | 1.96 |
(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, 2013. Expenses are calculated by multiplying the Fund's annualized expense ratio by the average account value for the period; then multiplying the result by 181/365. Expense ratios for the most recent six-month period may differ from expense ratios based on the annualized data in the Financial Highlights.
24
Schedule of Investments
PowerShares Dynamic MagniQuant Portfolio (PIQ)
April 30, 2013
Number of Shares | Value | ||||||||||
Common Stocks and Other Equity Interests—100.0% | |||||||||||
Consumer Discretionary—22.3% | |||||||||||
2,856 | AFC Enterprises, Inc.(a) | $ | 91,049 | ||||||||
3,277 | ANN, Inc.(a) | 96,803 | |||||||||
4,819 | Apollo Group, Inc., Class A(a) | 88,525 | |||||||||
5,358 | Brown Shoe Co., Inc. | 90,604 | |||||||||
2,244 | Comcast Corp., Class A | 92,677 | |||||||||
3,527 | Cooper Tire & Rubber Co. | 87,787 | |||||||||
16,221 | Denny's Corp.(a) | 91,973 | |||||||||
1,060 | Dillard's, Inc., Class A | 87,355 | |||||||||
7,882 | E.W. Scripps Co. (The), Class A(a) | 109,481 | |||||||||
7,175 | Ford Motor Co. | 98,369 | |||||||||
3,607 | GameStop Corp., Class A | 125,884 | |||||||||
2,811 | Gap, Inc. (The) | 106,790 | |||||||||
3,303 | General Motors Co.(a) | 101,865 | |||||||||
3,535 | Grand Canyon Education, Inc.(a) | 90,390 | |||||||||
2,312 | Hanesbrands, Inc.(a) | 115,970 | |||||||||
1,371 | Home Depot, Inc. (The) | 100,563 | |||||||||
1,670 | HSN, Inc. | 87,809 | |||||||||
2,251 | Jarden Corp.(a) | 101,317 | |||||||||
1,938 | Kohl's Corp. | 91,202 | |||||||||
6,973 | Krispy Kreme Doughnuts, Inc.(a) | 95,251 | |||||||||
2,059 | L Brands, Inc. | 103,794 | |||||||||
1,531 | Lumber Liquidators Holdings, Inc.(a) | 125,481 | |||||||||
2,291 | Macy's, Inc. | 102,179 | |||||||||
1,601 | Madison Square Garden Co. (The), Class A(a) | 96,492 | |||||||||
2,242 | Marriott Vacations Worldwide Corp.(a) | 101,966 | |||||||||
4,991 | Multimedia Games Holding Co., Inc.(a) | 123,078 | |||||||||
90 | NVR, Inc.(a) | 92,700 | |||||||||
1,589 | Papa John's International, Inc.(a) | 100,107 | |||||||||
2,937 | Penske Automotive Group, Inc. | 90,812 | |||||||||
4,737 | PulteGroup, Inc.(a) | 99,430 | |||||||||
2,518 | Ryland Group, Inc. (The) | 113,461 | |||||||||
5,714 | Service Corp. International | 96,452 | |||||||||
3,764 | Stage Stores, Inc. | 104,225 | |||||||||
6,747 | Staples, Inc. | 89,330 | |||||||||
4,644 | Starz - Liberty Capital, Series A(a) | 108,577 | |||||||||
1,676 | Sturm Ruger & Co., Inc. | 85,929 | |||||||||
4,107 | Superior Industries International, Inc. | 75,405 | |||||||||
2,370 | Thor Industries, Inc. | 87,903 | |||||||||
2,025 | TJX Cos., Inc. (The) | 98,759 | |||||||||
2,264 | Urban Outfitters, Inc.(a) | 93,820 | |||||||||
16,309 | Wendy's Co. (The) | 92,798 | |||||||||
817 | Whirlpool Corp. | 93,367 | |||||||||
1,534 | Wyndham Worldwide Corp. | 92,163 | |||||||||
4,219,892 | |||||||||||
Consumer Staples—6.9% | |||||||||||
889 | Costco Wholesale Corp. | 96,394 | |||||||||
1,744 | CVS Caremark Corp. | 101,466 | |||||||||
3,359 | Fresh Del Monte Produce, Inc. (Cayman Islands) | 85,352 |
Number of Shares | Value | ||||||||||
Common Stocks and Other Equity Interests (Continued) | |||||||||||
3,792 | Inter Parfums, Inc. | $ | 109,854 | ||||||||
1,298 | J & J Snack Foods Corp. | 97,376 | |||||||||
951 | Kimberly-Clark Corp. | 98,134 | |||||||||
3,110 | Kroger Co. (The) | 106,922 | |||||||||
2,176 | Lorillard, Inc. | 93,329 | |||||||||
3,946 | Safeway, Inc. | 88,864 | |||||||||
1,725 | Sanderson Farms, Inc. | 105,673 | |||||||||
2,042 | Susser Holdings Corp.(a) | 108,573 | |||||||||
3,762 | Tyson Foods, Inc., Class A | 92,658 | |||||||||
1,990 | USANA Health Sciences, Inc.(a) | 112,276 | |||||||||
1,296,871 | |||||||||||
Energy—8.2% | |||||||||||
4,463 | Alon USA Energy, Inc. | 74,086 | |||||||||
772 | Chevron Corp. | 94,192 | |||||||||
1,608 | CVR Energy, Inc.(a) | 79,226 | |||||||||
2,410 | Delek US Holdings, Inc. | 86,977 | |||||||||
3,479 | EPL Oil & Gas, Inc.(a) | 113,659 | |||||||||
3,891 | Exterran Partners LP | 110,115 | |||||||||
1,008 | Exxon Mobil Corp. | 89,702 | |||||||||
1,366 | Helmerich & Payne, Inc. | 80,075 | |||||||||
1,603 | HollyFrontier Corp. | 79,268 | |||||||||
1,094 | Marathon Petroleum Corp. | 85,726 | |||||||||
3,136 | Northern Tier Energy LP(a) | 82,728 | |||||||||
3,843 | Patterson-UTI Energy, Inc. | 81,049 | |||||||||
1,397 | Phillips 66 | 85,147 | |||||||||
5,568 | RPC, Inc. | 73,720 | |||||||||
1,918 | SemGroup Corp., Class A(a) | 99,448 | |||||||||
1,632 | Tesoro Corp. | 87,149 | |||||||||
1,934 | Valero Energy Corp. | 77,979 | |||||||||
2,535 | Western Refining, Inc. | 78,357 | |||||||||
1,558,603 | |||||||||||
Financials—18.6% | |||||||||||
1,916 | Allstate Corp. (The) | 94,382 | |||||||||
2,012 | American Financial Group, Inc. | 97,119 | |||||||||
2,329 | American International Group, Inc.(a) | 96,467 | |||||||||
1,094 | American National Insurance Co. | 102,869 | |||||||||
1,850 | Arch Capital Group Ltd. (Bermuda)(a) | 98,161 | |||||||||
2,338 | Argo Group International Holdings Ltd. (Bermuda) | 96,910 | |||||||||
2,476 | Aspen Insurance Holdings Ltd. (Bermuda) | 94,558 | |||||||||
2,150 | Assurant, Inc. | 102,211 | |||||||||
10,198 | CapitalSource, Inc. | 91,272 | |||||||||
5,575 | Cardinal Financial Corp. | 85,019 | |||||||||
2,519 | CBOE Holdings, Inc. | 94,538 | |||||||||
1,059 | Chubb Corp. (The) | 93,266 | |||||||||
1,990 | Cincinnati Financial Corp. | 97,331 | |||||||||
1,463 | Cullen/Frost Bankers, Inc. | 88,380 | |||||||||
4,141 | Employers Holdings, Inc. | 93,794 | |||||||||
722 | Everest Re Group Ltd. (Bermuda) | 97,463 | |||||||||
3,461 | Fidelity National Financial, Inc., Class A | 92,928 |
See Notes to Financial Statements.
25
Schedule of Investments (Continued)
PowerShares Dynamic MagniQuant Portfolio (PIQ)
April 30, 2013
Number of Shares | Value | ||||||||||
Common Stocks and Other Equity Interests (Continued) | |||||||||||
3,677 | First American Financial Corp. | $ | 98,433 | ||||||||
6,108 | Green Dot Corp., Class A(a) | 95,957 | |||||||||
5,276 | Hanmi Financial Corp.(a) | 81,409 | |||||||||
2,247 | HCC Insurance Holdings, Inc. | 95,722 | |||||||||
2,583 | Home BancShares, Inc. | 102,597 | |||||||||
1,855 | Moody's Corp. | 112,877 | |||||||||
1,573 | Navigators Group, Inc. (The)(a) | 91,045 | |||||||||
5,614 | Netspend Holdings, Inc.(a) | 89,599 | |||||||||
2,386 | Ocwen Financial Corp.(a) | 87,280 | |||||||||
7,468 | Old Republic International Corp. | 100,818 | |||||||||
1,015 | PartnerRe Ltd. (Bermuda) | 95,755 | |||||||||
4,258 | PHH Corp.(a) | 89,759 | |||||||||
2,833 | Principal Financial Group, Inc. | 102,271 | |||||||||
1,597 | Prudential Financial, Inc. | 96,491 | |||||||||
1,993 | Raymond James Financial, Inc. | 82,550 | |||||||||
3,817 | Stewart Information Services Corp. | 103,326 | |||||||||
4,575 | TD Ameritrade Holding Corp. | 91,088 | |||||||||
1,105 | Travelers Cos., Inc. (The) | 94,378 | |||||||||
3,563 | United Fire Group, Inc. | 99,622 | |||||||||
3,089 | XL Group PLC (Ireland) | 96,191 | |||||||||
3,523,836 | |||||||||||
Health Care—9.3% | |||||||||||
1,907 | AmerisourceBergen Corp. | 103,207 | |||||||||
1,031 | Amgen, Inc. | 107,440 | |||||||||
7,167 | AMN Healthcare Services, Inc.(a) | 98,403 | |||||||||
1,979 | Centene Corp.(a) | 91,430 | |||||||||
1,525 | Cigna Corp. | 100,909 | |||||||||
1,346 | Covance, Inc.(a) | 100,358 | |||||||||
1,965 | Coventry Health Care, Inc. | 97,366 | |||||||||
1,650 | Eli Lilly & Co. | 91,377 | |||||||||
3,495 | Health Net, Inc.(a) | 102,753 | |||||||||
1,268 | Humana, Inc. | 93,971 | |||||||||
1,773 | Magellan Health Services, Inc.(a) | 90,707 | |||||||||
2,726 | Molina Healthcare, Inc.(a) | 90,503 | |||||||||
2,626 | PAREXEL International Corp.(a) | 107,535 | |||||||||
12,737 | PDL BioPharma, Inc. | 98,584 | |||||||||
2,898 | Questcor Pharmaceuticals, Inc. | 89,085 | |||||||||
2,085 | ResMed, Inc. | 100,122 | |||||||||
1,446 | WellPoint, Inc. | 105,442 | |||||||||
3,957 | Wright Medical Group, Inc.(a) | 92,752 | |||||||||
1,761,944 | |||||||||||
Industrials—14.3% | |||||||||||
1,366 | Alliant Techsystems, Inc. | 101,576 | |||||||||
593 | AMERCO | 95,295 | |||||||||
3,581 | Apogee Enterprises, Inc. | 91,244 | |||||||||
2,261 | Avery Dennison Corp. | 93,718 | |||||||||
2,153 | AZZ, Inc. | 91,050 | |||||||||
1,173 | Boeing Co. (The) | 107,224 | |||||||||
3,603 | Briggs & Stratton Corp. | 81,032 | |||||||||
2,258 | Deluxe Corp. | 86,120 |
Number of Shares | Value | ||||||||||
Common Stocks and Other Equity Interests (Continued) | |||||||||||
2,623 | Fortune Brands Home & Security, Inc.(a) | $ | 95,451 | ||||||||
3,119 | Insperity, Inc. | 86,178 | |||||||||
3,529 | Kaydon Corp. | 84,131 | |||||||||
5,087 | Kelly Services, Inc., Class A | 86,581 | |||||||||
1,165 | L-3 Communications Holdings, Inc. | 94,656 | |||||||||
1,539 | Lennox International, Inc. | 95,418 | |||||||||
1,626 | Manpowergroup, Inc. | 86,438 | |||||||||
1,185 | National Presto Industries, Inc. | 88,875 | |||||||||
1,239 | Nortek, Inc.(a) | 89,035 | |||||||||
1,363 | Northrop Grumman Corp. | 103,234 | |||||||||
2,286 | Oshkosh Corp.(a) | 89,748 | |||||||||
4,311 | Quad/Graphics, Inc. | 90,100 | |||||||||
1,604 | Ryder System, Inc. | 93,144 | |||||||||
3,050 | Saia, Inc.(a) | 124,806 | |||||||||
6,460 | SkyWest, Inc. | 92,443 | |||||||||
1,136 | Snap-On, Inc. | 97,923 | |||||||||
7,719 | Southwest Airlines Co. | 105,750 | |||||||||
1,996 | Toro Co. (The) | 89,840 | |||||||||
1,060 | UniFirst Corp. | 96,513 | |||||||||
576 | Valmont Industries, Inc. | 83,941 | |||||||||
3,286 | Viad Corp. | 85,600 | |||||||||
2,707,064 | |||||||||||
Information Technology—13.5% | |||||||||||
2,369 | AOL, Inc.(a) | 91,538 | |||||||||
6,598 | Applied Materials, Inc. | 95,737 | |||||||||
2,913 | Aspen Technology, Inc.(a) | 88,788 | |||||||||
15,626 | Brocade Communications Systems, Inc.(a) | 90,943 | |||||||||
1,887 | Computer Sciences Corp. | 88,406 | |||||||||
5,423 | Convergys Corp. | 92,300 | |||||||||
3,612 | CoreLogic, Inc.(a) | 98,535 | |||||||||
4,753 | Cray, Inc.(a) | 100,574 | |||||||||
4,452 | CSG Systems International, Inc.(a) | 96,208 | |||||||||
1,627 | eBay, Inc.(a) | 85,239 | |||||||||
1,116 | Fiserv, Inc.(a) | 101,679 | |||||||||
2,797 | Heartland Payment Systems, Inc. | 91,993 | |||||||||
4,625 | Ingram Micro, Inc., Class A(a) | 82,371 | |||||||||
2,015 | InterDigital, Inc. | 89,486 | |||||||||
2,050 | Jack Henry & Associates, Inc. | 95,120 | |||||||||
8,140 | Kulicke & Soffa Industries, Inc.(a) | 94,099 | |||||||||
5,537 | Magnachip Semiconductor Corp.(a) | 88,814 | |||||||||
1,305 | Manhattan Associates, Inc.(a) | 91,624 | |||||||||
1,244 | MAXIMUS, Inc. | 99,134 | |||||||||
1,447 | Motorola Solutions, Inc. | 82,768 | |||||||||
8,804 | Sanmina Corp.(a) | 111,107 | |||||||||
2,812 | Seagate Technology PLC (Ireland) | 103,200 | |||||||||
7,910 | Spansion, Inc., Class A(a) | 102,751 | |||||||||
6,598 | Ubiquiti Networks, Inc. | 101,939 | |||||||||
3,818 | Unisys Corp.(a) | 73,038 | |||||||||
4,381 | WebMD Health Corp.(a) | 105,801 | |||||||||
1,951 | Western Digital Corp. | 107,851 | |||||||||
2,551,043 |
See Notes to Financial Statements.
26
Schedule of Investments (Continued)
PowerShares Dynamic MagniQuant Portfolio (PIQ)
April 30, 2013
Number of Shares | Value | ||||||||||
Common Stocks and Other Equity Interests (Continued) | |||||||||||
Materials—4.3% | |||||||||||
1,616 | Axiall Corp. | $ | 84,759 | ||||||||
446 | CF Industries Holdings, Inc. | 83,183 | |||||||||
12,182 | Graphic Packaging Holding Co.(a) | 91,609 | |||||||||
2,279 | Innospec, Inc. | 100,299 | |||||||||
1,451 | Kaiser Aluminum Corp. | 91,413 | |||||||||
4,208 | Louisiana-Pacific Corp.(a) | 76,249 | |||||||||
679 | PPG Industries, Inc. | 99,908 | |||||||||
2,373 | Rentech Nitrogen Partners LP | 86,496 | |||||||||
567 | Sherwin-Williams Co. (The) | 103,823 | |||||||||
817,739 | |||||||||||
Telecommunication Services—1.1% | |||||||||||
1,841 | Atlantic Tele-Network, Inc. | 93,467 | |||||||||
34,175 | Vonage Holdings Corp.(a) | 104,234 | |||||||||
197,701 | |||||||||||
Utilities—1.5% | |||||||||||
1,365 | DTE Energy Co. | 99,481 | |||||||||
1,646 | MGE Energy, Inc. | 91,929 | |||||||||
3,125 | Otter Tail Corp. | 97,500 | |||||||||
288,910 | |||||||||||
Total Common Stocks and Other Equity Interests (Cost $16,153,573) | 18,923,603 | ||||||||||
Money Market Fund—0.4% | |||||||||||
72,718 | Goldman Sachs Financial Square Prime Obligations - Institutional Share Class (Cost $72,718) | 72,718 | |||||||||
Total Investments (Cost $16,226,291)—100.4% | 18,996,321 | ||||||||||
Liabilities in excess of other assets—(0.4)% | (81,572 | ) | |||||||||
Net Assets—100.0% | $ | 18,914,749 |
Notes to Schedule of Investments:
(a) Non-income producing security.
See Notes to Financial Statements.
27
Schedule of Investments
PowerShares Dynamic Market Portfolio (PWC)
April 30, 2013
Number of Shares | Value | ||||||||||
Common Stocks and Other Equity Interests—100.1% | |||||||||||
Consumer Discretionary—13.3% | |||||||||||
16,748 | AFC Enterprises, Inc.(a) | $ | 533,926 | ||||||||
14,464 | Brunswick Corp. | 457,930 | |||||||||
76,817 | Comcast Corp., Class A | 3,172,542 | |||||||||
20,680 | Cooper Tire & Rubber Co. | 514,725 | |||||||||
95,119 | Denny's Corp.(a) | 539,325 | |||||||||
87,368 | DISH Network Corp., Class A | 3,423,952 | |||||||||
245,654 | Ford Motor Co. | 3,367,916 | |||||||||
44,867 | Icahn Enterprises LP | 3,343,489 | |||||||||
40,893 | Krispy Kreme Doughnuts, Inc.(a) | 558,599 | |||||||||
47,951 | LIN TV Corp., Class A(a) | 590,277 | |||||||||
27,781 | PulteGroup, Inc.(a) | 583,123 | |||||||||
27,234 | Starz - Liberty Capital, Series A(a) | 636,731 | |||||||||
24,241 | Superior Industries International, Inc. | 445,065 | |||||||||
95,638 | Wendy's Co. (The) | 544,180 | |||||||||
18,711,780 | |||||||||||
Consumer Staples—10.4% | |||||||||||
13,753 | Andersons, Inc. (The) | 749,814 | |||||||||
46,174 | Costco Wholesale Corp. | 5,006,647 | |||||||||
90,964 | CVS Caremark Corp. | 5,292,285 | |||||||||
25,005 | Fresh Del Monte Produce, Inc. (Cayman Islands) | 635,377 | |||||||||
28,236 | Inter Parfums, Inc. | 817,997 | |||||||||
12,842 | Sanderson Farms, Inc. | 786,701 | |||||||||
12,327 | Spectrum Brands Holdings, Inc. | 690,312 | |||||||||
11,797 | Universal Corp. | 678,917 | |||||||||
14,658,050 | |||||||||||
Energy—10.7% | |||||||||||
18,020 | Helmerich & Payne, Inc. | 1,056,332 | |||||||||
67,602 | Marathon Petroleum Corp. | 5,297,293 | |||||||||
41,368 | Northern Tier Energy LP | 1,091,288 | |||||||||
85,971 | Phillips 66 | 5,239,932 | |||||||||
42,256 | Susser Petroleum Partners LP | 1,306,133 | |||||||||
33,658 | Western Refining, Inc. | 1,040,369 | |||||||||
15,031,347 | |||||||||||
Financials—14.6% | |||||||||||
47,473 | Allstate Corp. (The) | 2,338,520 | |||||||||
10,675 | American Financial Group, Inc. | 515,282 | |||||||||
5,779 | American National Insurance Co. | 543,399 | |||||||||
13,137 | Aspen Insurance Holdings Ltd. (Bermuda) | 501,702 | |||||||||
15,755 | Banner Corp. | 514,716 | |||||||||
54,103 | CapitalSource, Inc. | 484,222 | |||||||||
26,238 | Chubb Corp. (The) | 2,310,781 | |||||||||
18,397 | Ellington Financial LLC | 476,114 | |||||||||
3,832 | Everest Re Group Ltd. (Bermuda) | 517,282 | |||||||||
19,508 | First American Financial Corp. | 522,229 | |||||||||
26,538 | First Interstate BancSystem, Inc. | 539,252 | |||||||||
27,993 | Hanmi Financial Corp.(a) | 431,932 | |||||||||
74,636 | Lincoln National Corp. | 2,538,370 |
Number of Shares | Value | ||||||||||
Common Stocks and Other Equity Interests (Continued) | |||||||||||
5,363 | PartnerRe Ltd. (Bermuda) | $ | 505,946 | ||||||||
70,196 | Principal Financial Group, Inc. | 2,534,076 | |||||||||
27,391 | Travelers Cos., Inc. (The) | 2,339,465 | |||||||||
18,903 | United Fire Group, Inc. | 528,528 | |||||||||
76,541 | XL Group PLC (Ireland) | 2,383,487 | |||||||||
20,525,303 | |||||||||||
Health Care—11.8% | |||||||||||
33,012 | AMN Healthcare Services, Inc.(a) | 453,255 | |||||||||
12,987 | AmSurg Corp.(a) | 435,844 | |||||||||
30,221 | Becton, Dickinson and Co. | 2,849,840 | |||||||||
16,160 | Biogen Idec, Inc.(a) | 3,537,909 | |||||||||
13,082 | Cantel Medical Corp. | 413,522 | |||||||||
18,590 | Capital Senior Living Corp.(a) | 450,993 | |||||||||
9,107 | Centene Corp.(a) | 420,743 | |||||||||
6,191 | Covance, Inc.(a) | 461,601 | |||||||||
48,954 | Eli Lilly & Co. | 2,711,073 | |||||||||
26,313 | Emergent Biosolutions, Inc.(a) | 403,641 | |||||||||
37,626 | Humana, Inc. | 2,788,463 | |||||||||
12,595 | Molina Healthcare, Inc.(a) | 418,154 | |||||||||
12,087 | PAREXEL International Corp.(a) | 494,963 | |||||||||
13,386 | Questcor Pharmaceuticals, Inc. | 411,486 | |||||||||
29,630 | Warner Chilcott PLC, Class A (Ireland) | 426,079 | |||||||||
16,677,566 | |||||||||||
Industrials—11.8% | |||||||||||
8,462 | Alliant Techsystems, Inc. | 629,234 | |||||||||
23,464 | Avis Budget Group, Inc.(a) | 676,702 | |||||||||
44,937 | L-3 Communications Holdings, Inc. | 3,651,131 | |||||||||
7,340 | National Presto Industries, Inc. | 550,500 | |||||||||
52,368 | Northrop Grumman Corp. | 3,966,352 | |||||||||
26,706 | Quad/Graphics, Inc. | 558,155 | |||||||||
57,421 | Republic Airways Holdings, Inc.(a) | 642,541 | |||||||||
40,021 | SkyWest, Inc. | 572,701 | |||||||||
297,821 | Southwest Airlines Co. | 4,080,148 | |||||||||
40,877 | US Airways Group, Inc.(a) | 690,821 | |||||||||
20,355 | Viad Corp. | 530,248 | |||||||||
16,548,533 | |||||||||||
Information Technology—18.0% | |||||||||||
21,741 | Aspen Technology, Inc.(a) | 662,666 | |||||||||
72,055 | Computer Sciences Corp. | 3,375,777 | |||||||||
40,482 | Convergys Corp. | 689,004 | |||||||||
26,960 | CoreLogic, Inc.(a) | 735,469 | |||||||||
35,475 | Cray, Inc.(a) | 750,651 | |||||||||
62,417 | eBay, Inc.(a) | 3,270,026 | |||||||||
42,798 | Fiserv, Inc.(a) | 3,899,326 | |||||||||
15,039 | InterDigital, Inc. | 667,882 | |||||||||
15,305 | Jack Henry & Associates, Inc. | 710,152 | |||||||||
41,333 | Magnachip Semiconductor Corp.(a) | 662,981 | |||||||||
9,738 | Manhattan Associates, Inc.(a) | 683,705 | |||||||||
9,283 | MAXIMUS, Inc. | 739,762 |
See Notes to Financial Statements.
28
Schedule of Investments (Continued)
PowerShares Dynamic Market Portfolio (PWC)
April 30, 2013
Number of Shares | Value | ||||||||||
Common Stocks and Other Equity Interests (Continued) | |||||||||||
55,479 | Motorola Solutions, Inc. | $ | 3,173,399 | ||||||||
107,856 | Seagate Technology PLC (Ireland) | 3,958,315 | |||||||||
59,042 | Spansion, Inc., Class A(a) | 766,955 | |||||||||
28,685 | Unisys Corp.(a) | 548,744 | |||||||||
25,294,814 | |||||||||||
Materials—3.5% | |||||||||||
18,106 | CF Industries Holdings, Inc. | 3,376,950 | |||||||||
30,189 | Kronos Worldwide, Inc. | 533,742 | |||||||||
13,890 | Rentech Nitrogen Partners LP | 506,290 | |||||||||
8,332 | Stepan Co. | 474,424 | |||||||||
4,891,406 | |||||||||||
Telecommunication Services—2.6% | |||||||||||
31,480 | AT&T, Inc. | 1,179,241 | |||||||||
6,593 | Atlantic Tele-Network, Inc. | 334,727 | |||||||||
32,426 | CenturyLink, Inc. | 1,218,245 | |||||||||
49,212 | T-Mobile US, Inc.(a) | 582,670 | |||||||||
122,372 | Vonage Holdings Corp.(a) | 373,234 | |||||||||
3,688,117 | |||||||||||
Utilities—3.4% | |||||||||||
65,796 | American Electric Power Co., Inc. | 3,383,888 | |||||||||
12,416 | American States Water Co. | 688,840 | |||||||||
18,297 | UGI Corp. | 749,811 | |||||||||
4,822,539 | |||||||||||
Total Common Stocks and Other Equity Interests (Cost $126,973,575) | 140,849,455 | ||||||||||
Money Market Fund—0.1% | |||||||||||
146,383 | Goldman Sachs Financial Square Prime Obligations - Institutional Share Class (Cost $146,383) | 146,383 | |||||||||
Total Investments (Cost $127,119,958)—100.2% | 140,995,838 | ||||||||||
Liabilities in excess of other assets—(0.2)% | (338,274 | ) | |||||||||
Net Assets—100.0% | $ | 140,657,564 |
Notes to Schedule of Investments:
(a) Non-income producing security.
See Notes to Financial Statements.
29
Schedule of Investments
PowerShares Dynamic OTC Portfolio (PWO)
April 30, 2013
Number of Shares | Value | ||||||||||
Common Stocks and Other Equity Interests—100.0% | |||||||||||
Consumer Discretionary—19.6% | |||||||||||
4,754 | AFC Enterprises, Inc.(a) | $ | 151,557 | ||||||||
17,426 | Comcast Corp., Class A | 719,694 | |||||||||
26,999 | Denny's Corp.(a) | 153,084 | |||||||||
19,820 | DISH Network Corp., Class A | 776,746 | |||||||||
7,404 | Fiesta Restaurant Group, Inc.(a) | 201,833 | |||||||||
2,779 | HSN, Inc. | 146,120 | |||||||||
10,178 | Icahn Enterprises LP | 758,465 | |||||||||
3,410 | Lamar Advertising Co., Class A(a) | 159,656 | |||||||||
1,594 | Loral Space & Communications, Inc. | 98,063 | |||||||||
3,579 | Shutterfly, Inc.(a) | 159,373 | |||||||||
52,410 | Staples, Inc. | 693,908 | |||||||||
7,730 | Starz - Liberty Capital, Series A(a) | 180,727 | |||||||||
27,146 | Wendy's Co. (The) | 154,461 | |||||||||
4,353,687 | |||||||||||
Consumer Staples—4.1% | |||||||||||
5,680 | Costco Wholesale Corp. | 615,883 | |||||||||
4,732 | Sanderson Farms, Inc. | 289,882 | |||||||||
905,765 | |||||||||||
Energy—1.1% | |||||||||||
2,050 | Calumet Specialty Products Partners LP | 77,408 | |||||||||
7,598 | Patterson-UTI Energy, Inc. | 160,242 | |||||||||
237,650 | |||||||||||
Financials—5.9% | |||||||||||
2,731 | American National Insurance Co. | 256,796 | |||||||||
6,707 | AmTrust Financial Services, Inc. | 212,344 | |||||||||
4,596 | Apollo Investment Corp. | 40,491 | |||||||||
4,637 | Arch Capital Group Ltd. (Bermuda)(a) | 246,039 | |||||||||
1,280 | Banner Corp. | 41,818 | |||||||||
1,750 | Eagle Bancorp, Inc.(a) | 40,477 | |||||||||
9,061 | East West Bancorp, Inc. | 220,454 | |||||||||
2,157 | First Interstate BancSystem, Inc. | 43,830 | |||||||||
2,276 | Hanmi Financial Corp.(a) | 35,119 | |||||||||
2,420 | Netspend Holdings, Inc.(a) | 38,623 | |||||||||
1,748 | Sterling Financial Corp. | 38,106 | |||||||||
1,537 | United Fire Group, Inc. | 42,975 | |||||||||
236 | Virtus Investment Partners, Inc.(a) | 45,076 | |||||||||
1,302,148 | |||||||||||
Health Care—13.4% | |||||||||||
2,930 | Acorda Therapeutics, Inc.(a) | 115,940 | |||||||||
5,310 | Amgen, Inc. | 553,355 | |||||||||
2,760 | AmSurg Corp.(a) | 92,626 | |||||||||
2,804 | Biogen Idec, Inc.(a) | 613,880 | |||||||||
2,684 | Ensign Group, Inc. (The) | 93,591 | |||||||||
5,000 | IDEXX Laboratories, Inc.(a) | 439,800 | |||||||||
707 | MWI Veterinary Supply, Inc.(a) | 83,221 | |||||||||
3,514 | Myriad Genetics, Inc.(a) | 97,865 | |||||||||
2,569 | PAREXEL International Corp.(a) | 105,201 | |||||||||
12,504 | PDL BioPharma, Inc. | 96,781 |
Number of Shares | Value | ||||||||||
Common Stocks and Other Equity Interests (Continued) | |||||||||||
2,845 | Questcor Pharmaceuticals, Inc. | $ | 87,455 | ||||||||
6,650 | Santarus, Inc.(a) | 122,160 | |||||||||
33,025 | Warner Chilcott PLC, Class A (Ireland) | 474,899 | |||||||||
2,976,774 | |||||||||||
Industrials—4.4% | |||||||||||
1,985 | AMERCO | 318,989 | |||||||||
12,688 | Avis Budget Group, Inc.(a) | 365,922 | |||||||||
2,932 | Kelly Services, Inc., Class A | 49,903 | |||||||||
714 | Nortek, Inc.(a) | 51,308 | |||||||||
5,342 | Republic Airways Holdings, Inc.(a) | 59,777 | |||||||||
1,752 | Saia, Inc.(a) | 71,692 | |||||||||
3,723 | SkyWest, Inc. | 53,276 | |||||||||
970,867 | |||||||||||
Information Technology—50.2% | |||||||||||
5,191 | Acxiom Corp.(a) | 103,249 | |||||||||
5,229 | Advanced Energy Industries, Inc.(a) | 88,788 | |||||||||
5,482 | ARRIS Group, Inc.(a) | 90,508 | |||||||||
3,055 | Aspen Technology, Inc.(a) | 93,116 | |||||||||
16,389 | Brocade Communications Systems, Inc.(a) | 95,384 | |||||||||
2,215 | Cass Information Systems, Inc. | 92,587 | |||||||||
29,676 | Cisco Systems, Inc. | 620,822 | |||||||||
1,244 | CommVault Systems, Inc.(a) | 91,484 | |||||||||
4,980 | Cray, Inc.(a) | 105,377 | |||||||||
13,860 | Cree, Inc.(a) | 784,060 | |||||||||
4,670 | CSG Systems International, Inc.(a) | 100,919 | |||||||||
9,308 | Daktronics, Inc. | 92,987 | |||||||||
6,410 | Digital River, Inc.(a) | 92,817 | |||||||||
11,273 | eBay, Inc.(a) | 590,592 | |||||||||
4,017 | Electronics for Imaging, Inc.(a) | 107,334 | |||||||||
2,895 | Equinix, Inc.(a) | 619,820 | |||||||||
8,166 | Exar Corp.(a) | 88,029 | |||||||||
2,779 | First Solar, Inc.(a) | 129,390 | |||||||||
7,730 | Fiserv, Inc.(a) | 704,280 | |||||||||
94,117 | Flextronics International Ltd. (Singapore)(a) | 672,937 | |||||||||
7,263 | Hollysys Automation Technologies Ltd. (British Virgin Islands)(a) | 87,447 | |||||||||
4,787 | Insight Enterprises, Inc.(a) | 86,740 | |||||||||
2,113 | InterDigital, Inc. | 93,838 | |||||||||
2,150 | Jack Henry & Associates, Inc. | 99,760 | |||||||||
8,537 | Kulicke & Soffa Industries, Inc.(a) | 98,688 | |||||||||
1,369 | Manhattan Associates, Inc.(a) | 96,117 | |||||||||
3,684 | ManTech International Corp., Class A | 98,326 | |||||||||
18,040 | NetApp, Inc.(a) | 629,416 | |||||||||
3,571 | NetScout Systems, Inc.(a) | 81,455 | |||||||||
17,848 | Oracle Corp. | 585,057 | |||||||||
5,825 | PDF Solutions, Inc.(a) | 99,666 | |||||||||
9,234 | Sanmina Corp.(a) | 116,533 | |||||||||
19,480 | Seagate Technology PLC (Ireland) | 714,916 | |||||||||
6,183 | Silicon Graphics International Corp.(a) | 80,379 | |||||||||
7,531 | SunPower Corp.(a) | 102,346 |
See Notes to Financial Statements.
30
Schedule of Investments (Continued)
PowerShares Dynamic OTC Portfolio (PWO)
April 30, 2013
Number of Shares | Value | ||||||||||
Common Stocks and Other Equity Interests (Continued) | |||||||||||
27,049 | Symantec Corp.(a) | $ | 657,291 | ||||||||
1,589 | Syntel, Inc. | 100,377 | |||||||||
5,138 | TeleTech Holdings, Inc.(a) | 109,388 | |||||||||
2,323 | Ultratech, Inc.(a) | 68,459 | |||||||||
15,917 | United Online, Inc. | 108,236 | |||||||||
13,542 | Verisign, Inc.(a) | 623,880 | |||||||||
4,368 | Virtusa Corp.(a) | 97,013 | |||||||||
5,415 | Web.com Group, Inc.(a) | 94,221 | |||||||||
13,513 | Western Digital Corp. | 746,999 | |||||||||
2,077 | Zebra Technologies Corp., Class A(a) | 96,892 | |||||||||
11,137,920 | |||||||||||
Materials—0.6% | |||||||||||
878 | Innospec, Inc.(a) | 38,641 | |||||||||
1,866 | Silgan Holdings, Inc. | 89,325 | |||||||||
127,966 | |||||||||||
Telecommunication Services—0.7% | |||||||||||
843 | Atlantic Tele-Network, Inc. | 42,799 | |||||||||
1,367 | SBA Communications Corp., Class A(a) | 107,980 | |||||||||
150,779 | |||||||||||
Total Common Stocks and Other Equity Interests (Cost $19,280,972) | 22,163,556 | ||||||||||
Money Market Fund—0.4% | |||||||||||
74,295 | Goldman Sachs Financial Square Prime Obligations - Institutional Share Class (Cost $74,295) | 74,295 | |||||||||
Total Investments (Cost $19,355,267)—100.4% | 22,237,851 | ||||||||||
Liabilities in excess of other assets—(0.4)% | (77,903 | ) | |||||||||
Net Assets—100.0% | $ | 22,159,948 |
Notes to Schedule of Investments:
(a) Non-income producing security.
See Notes to Financial Statements.
31
Schedule of Investments
PowerShares FTSE RAFI US 1000 Portfolio (PRF)
April 30, 2013
Number of Shares | Value | ||||||||||
Common Stocks and Other Equity Interests—100.0% | |||||||||||
Consumer Discretionary—10.8% | |||||||||||
10,516 | Abercrombie & Fitch Co., Class A | $ | 521,173 | ||||||||
6,091 | Advance Auto Parts, Inc. | 510,913 | |||||||||
15,976 | Aeropostale, Inc.(a) | 234,208 | |||||||||
7,958 | Amazon.com, Inc.(a) | 2,019,820 | |||||||||
22,003 | American Eagle Outfitters, Inc. | 427,958 | |||||||||
7,362 | ANN, Inc.(a) | 217,474 | |||||||||
35,186 | Apollo Group, Inc., Class A(a) | 646,367 | |||||||||
12,479 | Ascena Retail Group, Inc.(a) | 230,862 | |||||||||
12,613 | Autoliv, Inc.(b) | 963,885 | |||||||||
6,848 | AutoNation, Inc.(a) | 311,653 | |||||||||
2,183 | AutoZone, Inc.(a) | 893,043 | |||||||||
19,544 | Barnes & Noble, Inc.(a)(b) | 354,333 | |||||||||
20,234 | Bed Bath & Beyond, Inc.(a) | 1,392,099 | |||||||||
155,300 | Best Buy Co., Inc. | 4,036,247 | |||||||||
13,367 | Big Lots, Inc.(a) | 486,826 | |||||||||
7,553 | BorgWarner, Inc.(a) | 590,418 | |||||||||
9,839 | Brinker International, Inc. | 382,737 | |||||||||
6,297 | Brunswick Corp. | 199,363 | |||||||||
47,374 | Cablevision Systems Corp., Class A | 703,978 | |||||||||
21,516 | Caesars Entertainment Corp.(a)(b) | 342,320 | |||||||||
79,022 | Career Education Corp.(a) | 173,058 | |||||||||
21,310 | CarMax, Inc.(a) | 981,112 | |||||||||
36,940 | Carnival Corp. | 1,274,799 | |||||||||
789 | CBS Corp., Class A | 36,168 | |||||||||
51,136 | CBS Corp., Class B | 2,341,006 | |||||||||
7,562 | Charter Communications, Inc., Class A(a) | 761,796 | |||||||||
826 | Chipotle Mexican Grill, Inc.(a) | 299,995 | |||||||||
10,354 | Cinemark Holdings, Inc. | 319,835 | |||||||||
13,189 | Coach, Inc. | 776,305 | |||||||||
184,472 | Comcast Corp., Class A | 7,618,694 | |||||||||
46,199 | Comcast Corp. Special, Class A | 1,815,159 | |||||||||
10,360 | Cooper Tire & Rubber Co. | 257,860 | |||||||||
23,602 | D.R. Horton, Inc. | 615,540 | |||||||||
35,989 | Dana Holding Corp. | 620,810 | |||||||||
18,792 | Darden Restaurants, Inc. | 970,231 | |||||||||
23,525 | Delphi Automotive PLC (Jersey Islands) | 1,087,090 | |||||||||
6,769 | DeVry, Inc. | 189,600 | |||||||||
5,242 | Dick's Sporting Goods, Inc. | 252,140 | |||||||||
3,932 | Dillard's, Inc., Class A | 324,036 | |||||||||
61,464 | DIRECTV(a) | 3,476,404 | |||||||||
6,528 | Discovery Communications, Inc., Class A(a) | 514,537 | |||||||||
3,917 | Discovery Communications, Inc., Class C(a) | 277,676 | |||||||||
22,849 | DISH Network Corp., Class A | 895,452 | |||||||||
19,312 | Dollar General Corp.(a) | 1,005,962 | |||||||||
13,599 | Dollar Tree, Inc.(a) | 646,768 | |||||||||
7,212 | Domino's Pizza, Inc. | 398,102 | |||||||||
75,566 | Exide Technologies(a) | 64,012 | |||||||||
5,937 | Expedia, Inc. | 331,522 |
Number of Shares | Value | ||||||||||
Common Stocks and Other Equity Interests (Continued) | |||||||||||
9,195 | Family Dollar Stores, Inc. | $ | 564,297 | ||||||||
16,340 | Foot Locker, Inc. | 569,776 | |||||||||
931,927 | Ford Motor Co. | 12,776,719 | |||||||||
2,543 | Fossil, Inc.(a) | 249,519 | |||||||||
38,555 | GameStop Corp., Class A(b) | 1,345,570 | |||||||||
48,678 | Gannett Co., Inc. | 981,349 | |||||||||
28,686 | Gap, Inc. (The) | 1,089,781 | |||||||||
13,869 | Garmin Ltd. (Switzerland)(b) | 486,525 | |||||||||
229,249 | General Motors Co.(a) | 7,070,039 | |||||||||
12,419 | Gentex Corp. | 279,428 | |||||||||
17,253 | Genuine Parts Co. | 1,316,922 | |||||||||
6,333 | GNC Holdings, Inc., Class A | 287,075 | |||||||||
116,188 | Goodyear Tire & Rubber Co. (The)(a) | 1,451,769 | |||||||||
4,554 | Group 1 Automotive, Inc. | 275,426 | |||||||||
10,745 | Guess?, Inc. | 297,422 | |||||||||
27,394 | H&R Block, Inc. | 759,910 | |||||||||
11,330 | Hanesbrands, Inc.(a) | 568,313 | |||||||||
17,272 | Harley-Davidson, Inc. | 943,915 | |||||||||
7,064 | Harman International Industries, Inc. | 315,831 | |||||||||
13,711 | Hasbro, Inc.(b) | 649,490 | |||||||||
119,796 | Home Depot, Inc. (The) | 8,787,037 | |||||||||
4,936 | Hyatt Hotels Corp., Class A(a) | 210,668 | |||||||||
35,318 | International Game Technology | 598,640 | |||||||||
47,602 | Interpublic Group of Cos., Inc. (The) | 658,812 | |||||||||
16,063 | ITT Educational Services, Inc.(a)(b) | 294,114 | |||||||||
55,643 | J.C. Penney Co., Inc.(b) | 913,658 | |||||||||
6,945 | Jack in the Box, Inc.(a) | 248,978 | |||||||||
10,156 | Jarden Corp.(a) | 457,122 | |||||||||
5,382 | John Wiley & Sons, Inc., Class A | 205,431 | |||||||||
166 | John Wiley & Sons, Inc., Class B | 5,976 | |||||||||
99,105 | Johnson Controls, Inc. | 3,469,666 | |||||||||
25,835 | Jones Group, Inc. (The) | 361,690 | |||||||||
36,043 | Kohl's Corp. | 1,696,184 | |||||||||
28,524 | L Brands, Inc. | 1,437,895 | |||||||||
6,859 | Lamar Advertising Co., Class A(a) | 321,138 | |||||||||
13,511 | Las Vegas Sands Corp. | 759,994 | |||||||||
14,958 | Lear Corp. | 864,273 | |||||||||
18,513 | Leggett & Platt, Inc. | 596,859 | |||||||||
9,771 | Lennar Corp., Class A | 402,761 | |||||||||
609 | Lennar Corp., Class B | 19,860 | |||||||||
14,183 | Liberty Global, Inc., Class A(a)(b) | 1,026,424 | |||||||||
156 | Liberty Global, Inc., Class B(a) | 11,249 | |||||||||
12,054 | Liberty Global, Inc., Class C(a)(b) | 815,453 | |||||||||
68,477 | Liberty Interactive Corp., Class A(a) | 1,457,875 | |||||||||
243 | Liberty Interactive Corp., Class B(a) | 5,127 | |||||||||
2,802 | Liberty Media Corp., Class A(a) | 321,894 | |||||||||
16 | Liberty Media Corp., Class B(a) | 1,823 | |||||||||
34,315 | Live Nation Entertainment, Inc.(a) | 433,398 | |||||||||
14,529 | LKQ Corp.(a) | 349,858 | |||||||||
132,460 | Lowe's Cos., Inc. | 5,089,113 | |||||||||
57,584 | Macy's, Inc. | 2,568,246 |
See Notes to Financial Statements.
32
Schedule of Investments (Continued)
PowerShares FTSE RAFI US 1000 Portfolio (PRF)
April 30, 2013
Number of Shares | Value | ||||||||||
Common Stocks and Other Equity Interests (Continued) | |||||||||||
17,444 | Marriott International, Inc., Class A | $ | 751,139 | ||||||||
26,095 | Mattel, Inc. | 1,191,498 | |||||||||
75,129 | McDonald's Corp. | 7,673,676 | |||||||||
74,419 | MGM Resorts International(a) | 1,050,796 | |||||||||
6,485 | Mohawk Industries, Inc.(a) | 719,057 | |||||||||
1,172 | Netflix, Inc.(a) | 253,234 | |||||||||
24,286 | New York Times Co. (The), Class A(a) | 215,174 | |||||||||
33,130 | Newell Rubbermaid, Inc. | 872,644 | |||||||||
113,397 | News Corp., Class A | 3,511,905 | |||||||||
31,690 | News Corp., Class B | 986,193 | |||||||||
36,154 | NIKE, Inc., Class B | 2,299,394 | |||||||||
14,841 | Nordstrom, Inc. | 839,852 | |||||||||
391 | NVR, Inc.(a) | 402,730 | |||||||||
166,854 | Office Depot, Inc.(a) | 644,056 | |||||||||
34,207 | OfficeMax, Inc. | 393,723 | |||||||||
27,593 | Omnicom Group, Inc. | 1,649,234 | |||||||||
6,755 | O'Reilly Automotive, Inc.(a) | 724,947 | |||||||||
1,229 | Panera Bread Co., Class A(a) | 217,816 | |||||||||
7,476 | Penn National Gaming, Inc.(a) | 437,720 | |||||||||
10,333 | Penske Automotive Group, Inc. | 319,496 | |||||||||
7,601 | PetSmart, Inc. | 518,692 | |||||||||
2,735 | Polaris Industries, Inc. | 235,730 | |||||||||
819 | priceline.com, Inc.(a) | 570,016 | |||||||||
15,687 | PulteGroup, Inc.(a) | 329,270 | |||||||||
3,185 | PVH Corp. | 367,581 | |||||||||
122,990 | RadioShack Corp.(b) | 389,878 | |||||||||
2,818 | Ralph Lauren Corp. | 511,692 | |||||||||
32,638 | Regal Entertainment Group, Class A(b) | 585,526 | |||||||||
11,851 | Regis Corp. | 222,206 | |||||||||
11,879 | Rent-A-Center, Inc. | 414,933 | |||||||||
12,013 | Ross Stores, Inc. | 793,699 | |||||||||
23,791 | Royal Caribbean Cruises Ltd. | 869,085 | |||||||||
18,116 | Saks, Inc.(a)(b) | 209,240 | |||||||||
9,142 | Sally Beauty Holdings, Inc.(a) | 274,809 | |||||||||
3,783 | Scripps Networks Interactive, Inc., Class A | 251,872 | |||||||||
24,790 | Sears Holdings Corp.(a)(b) | 1,272,719 | |||||||||
22,000 | Service Corp. International | 371,360 | |||||||||
7,555 | Signet Jewelers Ltd. (United Kingdom) | 519,255 | |||||||||
13,504 | Sonic Automotive, Inc., Class A | 296,953 | |||||||||
168,489 | Staples, Inc. | 2,230,794 | |||||||||
22,386 | Starbucks Corp. | 1,361,964 | |||||||||
13,114 | Starwood Hotels & Resorts Worldwide, Inc. | 846,115 | |||||||||
12,709 | Starz - Liberty Capital, Series A(a) | 297,131 | |||||||||
98,082 | Target Corp. | 6,920,666 | |||||||||
13,040 | Tenneco, Inc.(a) | 504,257 | |||||||||
8,052 | Tiffany & Co. | 593,271 | |||||||||
36,277 | Time Warner Cable, Inc. | 3,406,048 | |||||||||
124,528 | Time Warner, Inc. | 7,444,284 | |||||||||
42,703 | TJX Cos., Inc. (The) | 2,082,625 |
Number of Shares | Value | ||||||||||
Common Stocks and Other Equity Interests (Continued) | |||||||||||
10,079 | Toll Brothers, Inc.(a) | $ | 345,811 | ||||||||
2,043 | Tractor Supply Co. | 218,948 | |||||||||
44,148 | TravelCenters of America LLC(a) | 508,585 | |||||||||
20,447 | TRW Automotive Holdings Corp.(a) | 1,228,251 | |||||||||
3,384 | Tupperware Brands Corp. | 271,735 | |||||||||
5,981 | Urban Outfitters, Inc.(a) | 247,853 | |||||||||
8,369 | Valassis Communications, Inc.(b) | 214,497 | |||||||||
6,231 | VF Corp. | 1,110,489 | |||||||||
704 | Viacom, Inc., Class A | 45,563 | |||||||||
30,974 | Viacom, Inc., Class B | 1,982,026 | |||||||||
21,532 | Virgin Media, Inc. | 1,050,331 | |||||||||
12,064 | Visteon Corp.(a) | 709,243 | |||||||||
126,279 | Walt Disney Co. (The) | 7,935,372 | |||||||||
980 | Washington Post Co. (The), Class B | 434,473 | |||||||||
45,502 | Wendy's Co. (The) | 258,906 | |||||||||
13,788 | Whirlpool Corp. | 1,575,693 | |||||||||
6,766 | Williams-Sonoma, Inc. | 363,199 | |||||||||
9,924 | Wyndham Worldwide Corp. | 596,234 | |||||||||
8,404 | Wynn Resorts Ltd. | 1,153,869 | |||||||||
25,995 | Yum! Brands, Inc. | 1,770,779 | |||||||||
192,329,450 | |||||||||||
Consumer Staples—10.3% | |||||||||||
263,271 | Altria Group, Inc. | 9,612,024 | |||||||||
4,142 | Andersons, Inc. (The) | 225,822 | |||||||||
158,717 | Archer-Daniels-Midland Co. | 5,386,855 | |||||||||
70,692 | Avon Products, Inc. | 1,637,227 | |||||||||
13,591 | Beam, Inc. | 879,474 | |||||||||
2,987 | Brown-Forman Corp., Class A | 210,195 | |||||||||
6,709 | Brown-Forman Corp., Class B | 472,984 | |||||||||
41,792 | Bunge Ltd. | 3,017,800 | |||||||||
18,206 | Campbell Soup Co. | 844,940 | |||||||||
5,093 | Casey's General Stores, Inc. | 294,936 | |||||||||
43,044 | Chiquita Brands International, Inc.(a) | 371,470 | |||||||||
6,506 | Church & Dwight Co., Inc. | 415,668 | |||||||||
10,474 | Clorox Co. (The) | 903,382 | |||||||||
282,859 | Coca-Cola Co. (The) | 11,973,421 | |||||||||
35,634 | Coca-Cola Enterprises, Inc. | 1,305,273 | |||||||||
27,216 | Colgate-Palmolive Co. | 3,249,863 | |||||||||
48,981 | ConAgra Foods, Inc. | 1,732,458 | |||||||||
11,519 | Constellation Brands, Inc., Class A(a) | 568,463 | |||||||||
106 | Constellation Brands, Inc., Class B(a) | 5,190 | |||||||||
47,879 | Costco Wholesale Corp. | 5,191,520 | |||||||||
165,935 | CVS Caremark Corp. | 9,654,098 | |||||||||
72,352 | Dean Foods Co.(a) | 1,384,817 | |||||||||
18,637 | Dr Pepper Snapple Group, Inc. | 910,045 | |||||||||
6,934 | Energizer Holdings, Inc. | 669,755 | |||||||||
8,284 | Estee Lauder Cos., Inc. (The), Class A | 574,495 | |||||||||
9,045 | Flowers Foods, Inc. | 297,942 | |||||||||
7,643 | Fresh Del Monte Produce, Inc. | 194,209 | |||||||||
59,881 | General Mills, Inc. | 3,019,200 |
See Notes to Financial Statements.
33
Schedule of Investments (Continued)
PowerShares FTSE RAFI US 1000 Portfolio (PRF)
April 30, 2013
Number of Shares | Value | ||||||||||
Common Stocks and Other Equity Interests (Continued) | |||||||||||
5,022 | Green Mountain Coffee Roasters, Inc.(a)(b) | $ | 288,263 | ||||||||
25,943 | H.J. Heinz Co. | 1,878,792 | |||||||||
5,126 | Harris Teeter Supermarkets, Inc. | 214,216 | |||||||||
8,301 | Herbalife Ltd. (Cayman Islands)(b) | 329,633 | |||||||||
8,351 | Hershey Co. (The) | 744,575 | |||||||||
40,732 | Hillshire Brands Co. | 1,462,686 | |||||||||
10,700 | Hormel Foods Corp. | 441,589 | |||||||||
6,895 | Ingredion, Inc. | 496,509 | |||||||||
10,246 | J.M. Smucker Co. (The) | 1,057,695 | |||||||||
22,656 | Kellogg Co. | 1,473,546 | |||||||||
37,350 | Kimberly-Clark Corp. | 3,854,146 | |||||||||
66,827 | Kraft Foods Group, Inc. | 3,440,922 | |||||||||
151,002 | Kroger Co. (The) | 5,191,449 | |||||||||
45,908 | Lorillard, Inc. | 1,968,994 | |||||||||
481 | McCormick & Co., Inc. | 34,454 | |||||||||
7,507 | McCormick & Co., Inc. | 540,054 | |||||||||
6,869 | Mead Johnson Nutrition Co. | 557,007 | |||||||||
17,844 | Molson Coors Brewing Co., Class B | 920,750 | |||||||||
300,093 | Mondelez International, Inc., Class A | 9,437,925 | |||||||||
3,997 | Monster Beverage Corp.(a) | 225,431 | |||||||||
12,255 | Nash Finch Co. | 251,840 | |||||||||
24,873 | Pantry, Inc. (The)(a) | 363,395 | |||||||||
131,432 | PepsiCo, Inc. | 10,839,197 | |||||||||
99,950 | Philip Morris International, Inc. | 9,554,221 | |||||||||
5,287 | Post Holdings, Inc.(a) | 231,518 | |||||||||
252,445 | Procter & Gamble Co. (The) | 19,380,203 | |||||||||
39,600 | Reynolds American, Inc. | 1,877,832 | |||||||||
696,626 | Rite Aid Corp.(a) | 1,846,059 | |||||||||
116,249 | Safeway, Inc. | 2,617,927 | |||||||||
45,980 | Smithfield Foods, Inc.(a) | 1,177,088 | |||||||||
583,735 | SUPERVALU, Inc.(b) | 3,409,012 | |||||||||
97,871 | Sysco Corp. | 3,411,783 | |||||||||
3,989 | TreeHouse Foods, Inc.(a) | 254,139 | |||||||||
65,771 | Tyson Foods, Inc., Class A | 1,619,940 | |||||||||
5,266 | United Natural Foods, Inc.(a) | 262,984 | |||||||||
5,258 | Universal Corp. | 302,598 | |||||||||
119,050 | Walgreen Co. | 5,894,166 | |||||||||
245,862 | Wal-Mart Stores, Inc. | 19,108,395 | |||||||||
8,062 | Whole Foods Market, Inc. | 712,036 | |||||||||
182,676,495 | |||||||||||
Energy—12.2% | |||||||||||
117,745 | Alpha Natural Resources, Inc.(a) | 873,668 | |||||||||
40,881 | Anadarko Petroleum Corp. | 3,465,074 | |||||||||
53,098 | Apache Corp. | 3,922,880 | |||||||||
111,555 | Arch Coal, Inc.(b) | 541,042 | |||||||||
4,967 | Atwood Oceanics, Inc.(a) | 243,631 | |||||||||
54,205 | Baker Hughes, Inc. | 2,460,365 | |||||||||
12,801 | Bill Barrett Corp.(a)(b) | 254,228 | |||||||||
4,641 | Cabot Oil & Gas Corp. | 315,820 | |||||||||
15,850 | Cameron International Corp.(a) | 975,567 |
Number of Shares | Value | ||||||||||
Common Stocks and Other Equity Interests (Continued) | |||||||||||
133,704 | Chesapeake Energy Corp. | $ | 2,612,576 | ||||||||
286,139 | Chevron Corp. | 34,911,819 | |||||||||
7,107 | Cimarex Energy Co. | 520,090 | |||||||||
13,435 | Cloud Peak Energy, Inc.(a) | 262,520 | |||||||||
4,589 | Concho Resources, Inc.(a) | 395,251 | |||||||||
389,622 | ConocoPhillips | 23,552,650 | |||||||||
24,718 | CONSOL Energy, Inc. | 831,514 | |||||||||
16,335 | Cosan Ltd., Class A (Brazil) | 338,951 | |||||||||
38,896 | Denbury Resources, Inc.(a) | 695,849 | |||||||||
63,904 | Devon Energy Corp. | 3,518,554 | |||||||||
14,484 | Diamond Offshore Drilling, Inc. | 1,000,844 | |||||||||
4,695 | Dresser-Rand Group, Inc.(a) | 261,089 | |||||||||
8,309 | Energen Corp. | 394,013 | |||||||||
19,150 | Ensco PLC, Class A (United Kingdom) | 1,104,572 | |||||||||
15,604 | EOG Resources, Inc. | 1,890,581 | |||||||||
9,799 | EQT Corp. | 736,101 | |||||||||
23,815 | EXCO Resources, Inc.(b) | 172,897 | |||||||||
15,015 | Exterran Holdings, Inc.(a) | 396,696 | |||||||||
580,666 | Exxon Mobil Corp. | 51,673,467 | |||||||||
10,405 | FMC Technologies, Inc.(a) | 564,991 | |||||||||
47,106 | Forest Oil Corp.(a) | 197,374 | |||||||||
74,286 | Halliburton Co. | 3,177,212 | |||||||||
15,361 | Helix Energy Solutions Group, Inc.(a) | 353,917 | |||||||||
7,356 | Helmerich & Payne, Inc. | 431,209 | |||||||||
54,789 | Hess Corp. | 3,954,670 | |||||||||
15,721 | HollyFrontier Corp. | 777,403 | |||||||||
31,129 | Key Energy Services, Inc.(a) | 184,906 | |||||||||
30,977 | Kinder Morgan, Inc. | 1,211,201 | |||||||||
160,487 | Marathon Oil Corp. | 5,243,110 | |||||||||
44,636 | Marathon Petroleum Corp. | 3,497,677 | |||||||||
41,108 | McDermott International, Inc.(a) | 439,033 | |||||||||
36,262 | Murphy Oil Corp. | 2,251,508 | |||||||||
68,083 | Nabors Industries Ltd. (Bermuda) | 1,006,948 | |||||||||
37,335 | National Oilwell Varco, Inc. | 2,434,989 | |||||||||
34,345 | Newfield Exploration Co.(a) | 748,378 | |||||||||
32,495 | Noble Corp. (Switzerland) | 1,218,563 | |||||||||
10,273 | Noble Energy, Inc. | 1,163,828 | |||||||||
88,175 | Occidental Petroleum Corp. | 7,870,501 | |||||||||
4,320 | Oceaneering International, Inc. | 303,134 | |||||||||
5,896 | Oil States International, Inc.(a) | 526,867 | |||||||||
18,803 | Patterson-UTI Energy, Inc. | 396,555 | |||||||||
50,173 | Peabody Energy Corp. | 1,006,470 | |||||||||
163,861 | Phillips 66 | 9,987,328 | |||||||||
5,359 | Pioneer Natural Resources Co. | 655,031 | |||||||||
13,978 | Plains Exploration & Production Co.(a) | 631,806 | |||||||||
19,443 | QEP Resources, Inc. | 558,209 | |||||||||
4,574 | Range Resources Corp. | 336,280 | |||||||||
14,607 | Rowan Cos. PLC, Class A(a) | 475,166 | |||||||||
48,959 | SandRidge Energy, Inc.(a)(b) | 251,649 | |||||||||
85,402 | Schlumberger Ltd. | 6,356,471 | |||||||||
4,984 | SEACOR Holdings, Inc. | 359,396 |
See Notes to Financial Statements.
34
Schedule of Investments (Continued)
PowerShares FTSE RAFI US 1000 Portfolio (PRF)
April 30, 2013
Number of Shares | Value | ||||||||||
Common Stocks and Other Equity Interests (Continued) | |||||||||||
4,413 | SM Energy Co. | $ | 269,193 | ||||||||
23,510 | Southwestern Energy Co.(a) | 879,744 | |||||||||
75,213 | Spectra Energy Corp. | 2,371,466 | |||||||||
13,955 | Superior Energy Services, Inc.(a) | 385,018 | |||||||||
4,255 | Targa Resources Corp. | 279,809 | |||||||||
8,042 | Teekay Corp. (Bahamas) | 286,295 | |||||||||
24,304 | Tesoro Corp. | 1,297,834 | |||||||||
6,998 | Tidewater, Inc. | 367,045 | |||||||||
19,328 | Ultra Petroleum Corp.(a) | 413,619 | |||||||||
7,894 | Unit Corp.(a) | 331,785 | |||||||||
139,216 | Valero Energy Corp. | 5,613,189 | |||||||||
150,764 | Weatherford International Ltd. (Switzerland)(a) | 1,928,272 | |||||||||
8,146 | Western Refining, Inc. | 251,793 | |||||||||
10,518 | Whiting Petroleum Corp.(a) | 468,051 | |||||||||
45,946 | Williams Cos., Inc. (The) | 1,751,921 | |||||||||
20,293 | World Fuel Services Corp. | 822,881 | |||||||||
81,738 | WPX Energy, Inc.(a) | 1,277,565 | |||||||||
215,889,569 | |||||||||||
Financials—21.3% | |||||||||||
39,620 | ACE Ltd. | 3,531,727 | |||||||||
2,183 | Affiliated Managers Group, Inc.(a) | 339,849 | |||||||||
57,121 | Aflac, Inc. | 3,109,667 | |||||||||
5,559 | Alexandria Real Estate Equities, Inc. REIT | 404,528 | |||||||||
812 | Alleghany Corp.(a) | 319,717 | |||||||||
4,984 | Allied World Assurance Co. Holdings AG (Switzerland) | 452,597 | |||||||||
82,301 | Allstate Corp. (The) | 4,054,147 | |||||||||
13,174 | Alterra Capital Holdings Ltd. (Bermuda) | 428,814 | |||||||||
4,669 | American Campus Communities, Inc. REIT | 208,424 | |||||||||
17,109 | American Capital Agency Corp. REIT | 569,901 | |||||||||
84,136 | American Express Co. | 5,755,744 | |||||||||
15,157 | American Financial Group, Inc. | 731,628 | |||||||||
309,605 | American International Group, Inc.(a) | 12,823,839 | |||||||||
6,944 | American Tower Corp. REIT | 583,227 | |||||||||
21,751 | Ameriprise Financial, Inc. | 1,621,102 | |||||||||
184,998 | Annaly Capital Management, Inc. REIT | 2,948,868 | |||||||||
32,956 | Anworth Mortgage Asset Corp. REIT | 207,952 | |||||||||
23,911 | Aon PLC (United Kingdom) | 1,443,029 | |||||||||
16,796 | Apartment Investment & Management Co., Class A REIT | 522,524 | |||||||||
13,956 | Arch Capital Group Ltd.(a) | 740,505 | |||||||||
11,067 | Arthur J. Gallagher & Co. | 469,794 | |||||||||
11,460 | Aspen Insurance Holdings Ltd. (Bermuda) | 437,657 | |||||||||
29,702 | Associated Banc-Corp. | 423,848 | |||||||||
23,284 | Assurant, Inc. | 1,106,921 | |||||||||
16,748 | Assured Guaranty Ltd. (Bermuda) | 345,511 | |||||||||
24,174 | Astoria Financial Corp. | 231,829 | |||||||||
6,269 | AvalonBay Communities, Inc. REIT | 834,028 |
Number of Shares | Value | ||||||||||
Common Stocks and Other Equity Interests (Continued) | |||||||||||
16,111 | Axis Capital Holdings Ltd. (Bermuda) | $ | 719,034 | ||||||||
14,775 | BancorpSouth, Inc. | 236,400 | |||||||||
3,067,336 | Bank of America Corp. | 37,758,906 | |||||||||
5,919 | Bank of Hawaii Corp. | 282,277 | |||||||||
165,124 | Bank of New York Mellon Corp. (The) | 4,659,799 | |||||||||
113,713 | BB&T Corp. | 3,498,949 | |||||||||
189,376 | Berkshire Hathaway, Inc., Class B(a) | 20,134,456 | |||||||||
15,614 | BioMed Realty Trust, Inc. REIT | 351,471 | |||||||||
10,131 | BlackRock, Inc. | 2,699,912 | |||||||||
11,466 | Boston Properties, Inc. REIT | 1,254,724 | |||||||||
25,397 | Brandywine Realty Trust REIT | 379,177 | |||||||||
6,102 | BRE Properties, Inc. REIT | 308,029 | |||||||||
8,060 | Brown & Brown, Inc. | 249,779 | |||||||||
5,767 | Camden Property Trust REIT | 417,185 | |||||||||
81,893 | Capital One Financial Corp. | 4,731,778 | |||||||||
45,052 | CapitalSource, Inc. | 403,215 | |||||||||
21,857 | Capitol Federal Financial, Inc. | 258,787 | |||||||||
19,439 | Capstead Mortgage Corp. REIT | 258,150 | |||||||||
15,704 | CBL & Associates Properties, Inc. REIT | 379,095 | |||||||||
19,230 | CBRE Group, Inc., Class A(a) | 465,751 | |||||||||
98,801 | Charles Schwab Corp. (The) | 1,675,665 | |||||||||
145,425 | Chimera Investment Corp. REIT | 479,903 | |||||||||
35,368 | Chubb Corp. (The) | 3,114,860 | |||||||||
19,710 | Cincinnati Financial Corp. | 964,016 | |||||||||
23,150 | CIT Group, Inc.(a) | 984,107 | |||||||||
619,509 | Citigroup, Inc. | 28,906,290 | |||||||||
5,166 | City National Corp. | 295,650 | |||||||||
35,949 | CME Group, Inc. | 2,187,856 | |||||||||
72,017 | CNO Financial Group, Inc. | 815,232 | |||||||||
11,872 | Colonial Properties Trust REIT | 275,549 | |||||||||
31,741 | Comerica, Inc. | 1,150,611 | |||||||||
10,106 | Commerce Bancshares, Inc. | 405,352 | |||||||||
18,484 | CommonWealth REIT | 412,748 | |||||||||
9,804 | Corporate Office Properties Trust REIT | 284,218 | |||||||||
8,264 | Corrections Corp. of America REIT | 299,157 | |||||||||
6,917 | Cullen/Frost Bankers, Inc.(b) | 417,856 | |||||||||
16,981 | CYS Investments, Inc. REIT | 211,074 | |||||||||
30,341 | DCT Industrial Trust, Inc. REIT | 237,570 | |||||||||
21,398 | DDR Corp. REIT | 392,439 | |||||||||
25,750 | DiamondRock Hospitality Co. REIT | 256,985 | |||||||||
6,373 | Digital Realty Trust, Inc. REIT | 449,424 | |||||||||
45,009 | Discover Financial Services | 1,968,694 | |||||||||
10,902 | Douglas Emmett, Inc. REIT | 285,305 | |||||||||
33,885 | Duke Realty Corp. REIT | 597,731 | |||||||||
58,989 | E*TRADE Financial Corp.(a) | 606,997 | |||||||||
11,234 | East West Bancorp, Inc. | 273,323 | |||||||||
5,498 | Eaton Vance Corp. | 219,260 | |||||||||
8,002 | Endurance Specialty Holdings Ltd. (Bermuda) | 391,858 | |||||||||
4,913 | EPR Properties REIT | 277,781 | |||||||||
23,602 | Equity Residential REIT | 1,370,332 |
See Notes to Financial Statements.
35
Schedule of Investments (Continued)
PowerShares FTSE RAFI US 1000 Portfolio (PRF)
April 30, 2013
Number of Shares | Value | ||||||||||
Common Stocks and Other Equity Interests (Continued) | |||||||||||
2,966 | Erie Indemnity Co., Class A | $ | 236,005 | ||||||||
2,107 | Essex Property Trust, Inc. REIT | 330,904 | |||||||||
6,768 | Everest Re Group Ltd. | 913,612 | |||||||||
18,648 | F.N.B. Corp. | 212,401 | |||||||||
3,668 | Federal Realty Investment Trust REIT | 429,193 | |||||||||
16,320 | Federated Investors, Inc., Class B(b) | 374,707 | |||||||||
31,861 | Fidelity National Financial, Inc., Class A | 855,468 | |||||||||
142,526 | Fifth Third Bancorp | 2,427,218 | |||||||||
15,346 | First American Financial Corp. | 410,812 | |||||||||
41,093 | First Horizon National Corp. | 427,367 | |||||||||
63,385 | First Niagara Financial Group, Inc. | 602,791 | |||||||||
6,961 | First Republic Bank | 264,379 | |||||||||
18,598 | FirstMerit Corp. | 318,584 | |||||||||
8,457 | Franklin Resources, Inc. | 1,307,960 | |||||||||
28,795 | Fulton Financial Corp. | 318,473 | |||||||||
34,892 | General Growth Properties, Inc. REIT | 792,746 | |||||||||
213,478 | Genworth Financial, Inc., Class A(a) | 2,141,184 | |||||||||
5,733 | Geo Group, Inc. (The) REIT | 214,701 | |||||||||
66,862 | Goldman Sachs Group, Inc. (The) | 9,766,532 | |||||||||
8,781 | Hancock Holding Co. | 239,458 | |||||||||
9,170 | Hanover Insurance Group, Inc. (The) | 462,443 | |||||||||
161,087 | Hartford Financial Services Group, Inc. (The) | 4,524,934 | |||||||||
11,749 | Hatteras Financial Corp. REIT | 321,100 | |||||||||
12,108 | HCC Insurance Holdings, Inc. | 515,801 | |||||||||
26,580 | HCP, Inc. REIT | 1,416,714 | |||||||||
12,755 | Health Care REIT, Inc. REIT | 956,242 | |||||||||
7,565 | Healthcare Realty Trust, Inc. REIT | 227,101 | |||||||||
7,810 | Highwoods Properties, Inc. REIT | 320,444 | |||||||||
4,296 | Home Properties, Inc. REIT | 276,920 | |||||||||
23,749 | Hospitality Properties Trust REIT | 698,458 | |||||||||
63,849 | Host Hotels & Resorts, Inc. REIT | 1,166,521 | |||||||||
92,860 | Hudson City Bancorp, Inc. | 771,667 | |||||||||
134,062 | Huntington Bancshares, Inc. | 961,225 | |||||||||
21,387 | Interactive Brokers Group, Inc., Class A | 322,088 | |||||||||
2,973 | IntercontinentalExchange, Inc.(a) | 484,391 | |||||||||
42,617 | Invesco Ltd.(c) | 1,352,664 | |||||||||
10,090 | Invesco Mortgage Capital, Inc. REIT(d) | 215,926 | |||||||||
33,925 | iStar Financial, Inc. REIT(a) | 396,244 | |||||||||
22,351 | Janus Capital Group, Inc. | 199,371 | |||||||||
3,290 | Jones Lang LaSalle, Inc. | 325,776 | |||||||||
623,220 | JPMorgan Chase & Co. | 30,544,012 | |||||||||
10,829 | Kemper Corp. | 345,012 | |||||||||
174,752 | KeyCorp | 1,742,277 | |||||||||
4,297 | Kilroy Realty Corp. REIT | 243,167 | |||||||||
34,746 | Kimco Realty Corp. REIT | 826,260 | |||||||||
8,113 | LaSalle Hotel Properties REIT | 210,370 | |||||||||
23,412 | Legg Mason, Inc. | 745,906 | |||||||||
16,461 | Leucadia National Corp. | 508,480 | |||||||||
23,942 | Lexington Realty Trust REIT | 306,697 | |||||||||
14,162 | Liberty Property Trust REIT | 608,824 |
Number of Shares | Value | ||||||||||
Common Stocks and Other Equity Interests (Continued) | |||||||||||
61,293 | Lincoln National Corp. | $ | 2,084,575 | ||||||||
50,890 | Loews Corp. | 2,273,256 | |||||||||
13,213 | M&T Bank Corp. | 1,323,943 | |||||||||
8,995 | Macerich Co. (The) REIT | 630,100 | |||||||||
15,924 | Mack-Cali Realty Corp. REIT | 442,210 | |||||||||
1,030 | Markel Corp.(a)(b) | 552,338 | |||||||||
48,087 | Marsh & McLennan Cos., Inc. | 1,827,787 | |||||||||
26,582 | McGraw-Hill Cos., Inc. (The) | 1,438,352 | |||||||||
6,062 | Mercury General Corp. | 277,094 | |||||||||
182,743 | MetLife, Inc. | 7,125,150 | |||||||||
44,938 | MFA Financial, Inc. REIT | 416,575 | |||||||||
2,990 | Mid-America Apartment Communities, Inc. REIT | 205,503 | |||||||||
9,679 | Moody's Corp. | 588,967 | |||||||||
248,981 | Morgan Stanley | 5,514,929 | |||||||||
12,658 | MSCI, Inc., Class A(a) | 431,638 | |||||||||
19,857 | NASDAQ OMX Group, Inc. (The) | 585,384 | |||||||||
7,444 | National Retail Properties, Inc. REIT(b) | 295,378 | |||||||||
82,193 | New York Community Bancorp, Inc. | 1,113,715 | |||||||||
25,555 | Northern Trust Corp. | 1,377,926 | |||||||||
34,893 | NYSE Euronext | 1,354,197 | |||||||||
48,982 | Old Republic International Corp. | 661,257 | |||||||||
10,076 | PartnerRe Ltd. | 950,570 | |||||||||
56,493 | People's United Financial, Inc.(b) | 743,448 | |||||||||
29,289 | PHH Corp.(a) | 617,412 | |||||||||
26,570 | Piedmont Office Realty Trust, Inc., Class A REIT | 545,216 | |||||||||
4,315 | Platinum Underwriters Holdings Ltd. (Bermuda) | 244,876 | |||||||||
13,811 | Plum Creek Timber Co., Inc. REIT | 711,819 | |||||||||
77,946 | PNC Financial Services Group, Inc. | 5,290,974 | |||||||||
23,202 | Popular, Inc.(a) | 661,025 | |||||||||
9,344 | Primerica, Inc. | 317,322 | |||||||||
48,766 | Principal Financial Group, Inc. | 1,760,453 | |||||||||
4,677 | ProAssurance Corp. | 229,126 | |||||||||
81,038 | Progressive Corp. (The) | 2,049,451 | |||||||||
33,442 | Prologis, Inc. REIT | 1,402,892 | |||||||||
20,064 | Protective Life Corp. | 763,636 | |||||||||
99,866 | Prudential Financial, Inc. | 6,033,904 | |||||||||
6,676 | Public Storage REIT | 1,101,540 | |||||||||
8,766 | Raymond James Financial, Inc. | 363,088 | |||||||||
8,629 | Rayonier, Inc. REIT | 512,735 | |||||||||
7,214 | Realty Income Corp. REIT | 367,698 | |||||||||
10,035 | Redwood Trust, Inc. REIT | 228,999 | |||||||||
7,339 | Regency Centers Corp. REIT | 412,892 | |||||||||
303,611 | Regions Financial Corp. | 2,577,657 | |||||||||
15,174 | Reinsurance Group of America, Inc. | 949,134 | |||||||||
5,135 | RenaissanceRe Holdings Ltd. (Bermuda) | 482,125 | |||||||||
9,569 | RLJ Lodging Trust REIT | 220,470 | |||||||||
6,996 | SEI Investments Co. | 200,505 | |||||||||
9,173 | Selective Insurance Group, Inc. | 214,923 |
See Notes to Financial Statements.
36
Schedule of Investments (Continued)
PowerShares FTSE RAFI US 1000 Portfolio (PRF)
April 30, 2013
Number of Shares | Value | ||||||||||
Common Stocks and Other Equity Interests (Continued) | |||||||||||
12,618 | Senior Housing Properties Trust REIT | $ | 358,730 | ||||||||
2,671 | Signature Bank(a) | 191,270 | |||||||||
12,072 | Simon Property Group, Inc. REIT | 2,149,661 | |||||||||
7,221 | SL Green Realty Corp. REIT | 654,945 | |||||||||
53,855 | SLM Corp. | 1,112,106 | |||||||||
9,929 | StanCorp Financial Group, Inc. | 428,734 | |||||||||
7,272 | Starwood Property Trust, Inc. REIT | 199,907 | |||||||||
48,152 | State Street Corp. | 2,815,447 | |||||||||
112,087 | SunTrust Banks, Inc. | 3,278,545 | |||||||||
22,270 | Susquehanna Bancshares, Inc. | 259,891 | |||||||||
3,634 | SVB Financial Group(a) | 258,414 | |||||||||
27,147 | Symetra Financial Corp. | 370,014 | |||||||||
171,535 | Synovus Financial Corp. | 461,429 | |||||||||
12,802 | T. Rowe Price Group, Inc. | 928,145 | |||||||||
2,860 | Taubman Centers, Inc. REIT | 244,559 | |||||||||
26,678 | TCF Financial Corp. | 388,165 | |||||||||
13,882 | TD Ameritrade Holding Corp. | 276,391 | |||||||||
12,777 | Torchmark Corp. | 793,068 | |||||||||
71,911 | Travelers Cos., Inc. (The) | 6,141,919 | |||||||||
210,480 | U.S. Bancorp | 7,004,774 | |||||||||
20,348 | UDR, Inc. REIT | 500,154 | |||||||||
56,878 | Unum Group | 1,586,327 | |||||||||
10,966 | Validus Holdings Ltd. | 423,397 | |||||||||
30,602 | Valley National Bancorp(b) | 275,112 | |||||||||
17,147 | Ventas, Inc. REIT | 1,365,416 | |||||||||
16,340 | Vornado Realty Trust REIT | 1,430,730 | |||||||||
14,178 | W.R. Berkley Corp. | 615,609 | |||||||||
5,310 | Waddell & Reed Financial, Inc., Class A | 227,640 | |||||||||
7,843 | Washington REIT | 223,996 | |||||||||
15,720 | Washington Federal, Inc. | 269,912 | |||||||||
10,541 | Webster Financial Corp. | 246,343 | |||||||||
11,019 | Weingarten Realty Investors REIT | 375,417 | |||||||||
660,673 | Wells Fargo & Co. | 25,092,361 | |||||||||
130,901 | Weyerhaeuser Co. REIT | 3,993,790 | |||||||||
725 | White Mountains Insurance Group Ltd. | 419,275 | |||||||||
18,602 | Willis Group Holdings PLC (Ireland) | 738,127 | |||||||||
46,675 | XL Group PLC (Ireland) | 1,453,460 | |||||||||
33,060 | Zions Bancorp. | 813,937 | |||||||||
377,724,905 | |||||||||||
Health Care—10.5% | |||||||||||
257,290 | Abbott Laboratories | 9,499,147 | |||||||||
101,233 | AbbVie, Inc. | 4,661,780 | |||||||||
7,861 | Actavis, Inc.(a) | 831,144 | |||||||||
58,642 | Aetna, Inc. | 3,368,396 | |||||||||
21,804 | Agilent Technologies, Inc. | 903,558 | |||||||||
12,255 | Alere, Inc.(a) | 314,708 | |||||||||
8,539 | Allergan, Inc. | 969,603 | |||||||||
72,907 | AmerisourceBergen Corp. | 3,945,727 | |||||||||
37,440 | Amgen, Inc. | 3,901,622 | |||||||||
39,038 | Baxter International, Inc. | 2,727,585 |
Number of Shares | Value | ||||||||||
Common Stocks and Other Equity Interests (Continued) | |||||||||||
17,565 | Becton, Dickinson and Co. | $ | 1,656,379 | ||||||||
8,070 | Biogen Idec, Inc.(a) | 1,766,765 | |||||||||
1,708 | Bio-Rad Laboratories, Inc., Class A(a) | 204,533 | |||||||||
52 | Bio-Rad Laboratories, Inc., Class B(a) | 5,919 | |||||||||
267,118 | Boston Scientific Corp.(a) | 2,000,714 | |||||||||
181,741 | Bristol-Myers Squibb Co. | 7,218,753 | |||||||||
7,867 | Brookdale Senior Living, Inc.(a) | 202,890 | |||||||||
4,346 | C.R. Bard, Inc. | 431,819 | |||||||||
107,101 | Cardinal Health, Inc. | 4,736,006 | |||||||||
25,858 | CareFusion Corp.(a) | 864,692 | |||||||||
8,944 | Celgene Corp.(a) | 1,056,018 | |||||||||
7,197 | Centene Corp.(a) | 332,501 | |||||||||
4,365 | Cerner Corp.(a) | 422,401 | |||||||||
29,821 | Cigna Corp. | 1,973,256 | |||||||||
28,447 | Community Health Systems, Inc. | 1,296,330 | |||||||||
4,774 | Covance, Inc.(a) | 355,949 | |||||||||
28,112 | Coventry Health Care, Inc. | 1,392,950 | |||||||||
33,140 | Covidien PLC (Ireland) | 2,115,658 | |||||||||
7,368 | DaVita HealthCare Partners, Inc.(a) | 874,213 | |||||||||
8,475 | DENTSPLY International, Inc. | 358,916 | |||||||||
3,200 | Edwards Lifesciences Corp.(a) | 204,128 | |||||||||
108,997 | Eli Lilly & Co. | 6,036,254 | |||||||||
12,583 | Endo Health Solutions, Inc.(a) | 461,041 | |||||||||
43,482 | Express Scripts Holding Co.(a) | 2,581,526 | |||||||||
28,619 | Forest Laboratories, Inc.(a) | 1,070,637 | |||||||||
45,986 | Gilead Sciences, Inc.(a) | 2,328,731 | |||||||||
75,261 | HCA Holdings, Inc. | 3,002,161 | |||||||||
96,948 | Health Management Associates, Inc., Class A(a) | 1,113,933 | |||||||||
37,588 | Health Net, Inc.(a) | 1,105,087 | |||||||||
9,385 | HealthSouth Corp.(a) | 258,088 | |||||||||
8,413 | Henry Schein, Inc.(a) | 760,535 | |||||||||
6,053 | Hill-Rom Holdings, Inc. | 206,226 | |||||||||
22,016 | Hologic, Inc.(a) | 448,466 | |||||||||
23,208 | Hospira, Inc.(a) | 768,649 | |||||||||
32,399 | Humana, Inc. | 2,401,090 | |||||||||
837 | Intuitive Surgical, Inc.(a) | 412,047 | |||||||||
248,674 | Johnson & Johnson | 21,194,485 | |||||||||
37,171 | Kindred Healthcare, Inc.(a) | 389,924 | |||||||||
9,276 | Laboratory Corp. of America Holdings(a) | 866,007 | |||||||||
13,251 | Life Technologies Corp.(a) | 976,466 | |||||||||
9,502 | LifePoint Hospitals, Inc.(a) | 456,096 | |||||||||
5,433 | Magellan Health Services, Inc.(a) | 277,952 | |||||||||
52,835 | McKesson Corp. | 5,591,000 | |||||||||
3,151 | MEDNAX, Inc.(a) | 279,588 | |||||||||
95,139 | Medtronic, Inc. | 4,441,089 | |||||||||
308,687 | Merck & Co., Inc. | 14,508,289 | |||||||||
1,150 | Mettler-Toledo International, Inc.(a) | 240,304 | |||||||||
22,855 | Mylan, Inc.(a) | 665,309 | |||||||||
17,373 | Omnicare, Inc. | 760,416 | |||||||||
14,630 | Owens & Minor, Inc. | 476,499 |
See Notes to Financial Statements.
37
Schedule of Investments (Continued)
PowerShares FTSE RAFI US 1000 Portfolio (PRF)
April 30, 2013
Number of Shares | Value | ||||||||||
Common Stocks and Other Equity Interests (Continued) | |||||||||||
7,678 | Patterson Cos., Inc. | $ | 291,380 | ||||||||
7,598 | PerkinElmer, Inc. | 232,879 | |||||||||
2,406 | Perrigo Co. | 287,300 | |||||||||
867,113 | Pfizer, Inc. | 25,206,975 | |||||||||
17,456 | Quest Diagnostics, Inc. | 983,296 | |||||||||
6,148 | ResMed, Inc.(b) | 295,227 | |||||||||
21,614 | St. Jude Medical, Inc. | 890,929 | |||||||||
5,951 | STERIS Corp. | 247,502 | |||||||||
17,943 | Stryker Corp. | 1,176,702 | |||||||||
3,907 | Teleflex, Inc. | 305,254 | |||||||||
20,984 | Tenet Healthcare Corp.(a) | 951,834 | |||||||||
32,677 | Thermo Fisher Scientific, Inc. | 2,636,380 | |||||||||
141,744 | UnitedHealth Group, Inc. | 8,494,718 | |||||||||
24,974 | Universal American Corp. | 213,528 | |||||||||
8,835 | Universal Health Services, Inc., Class B | 588,323 | |||||||||
5,434 | Varian Medical Systems, Inc.(a) | 353,971 | |||||||||
9,697 | VCA Antech, Inc.(a) | 233,698 | |||||||||
70,635 | Warner Chilcott PLC, Class A (Ireland) | 1,015,731 | |||||||||
3,500 | Waters Corp.(a) | 323,400 | |||||||||
8,295 | WellCare Health Plans, Inc.(a) | 483,681 | |||||||||
87,125 | WellPoint, Inc. | 6,353,155 | |||||||||
11,823 | Zimmer Holdings, Inc. | 903,868 | |||||||||
187,141,686 | |||||||||||
Industrials—10.4% | |||||||||||
56,171 | 3M Co. | 5,881,665 | |||||||||
11,021 | ABM Industries, Inc. | 248,524 | |||||||||
2,987 | Acuity Brands, Inc. | 217,932 | |||||||||
20,722 | ADT Corp. (The) | 904,308 | |||||||||
19,140 | AECOM Technology Corp.(a) | 556,400 | |||||||||
15,258 | AerCap Holdings NV (Netherlands)(a) | 242,144 | |||||||||
16,082 | AGCO Corp. | 856,367 | |||||||||
19,890 | Aircastle Ltd. (Bermuda) | 277,664 | |||||||||
8,784 | Alaska Air Group, Inc.(a) | 541,446 | |||||||||
6,274 | Alliant Techsystems, Inc. | 466,535 | |||||||||
9,423 | AMETEK, Inc. | 383,610 | |||||||||
5,372 | Armstrong World Industries, Inc.(a) | 274,187 | |||||||||
17,410 | Avery Dennison Corp. | 721,645 | |||||||||
41,161 | Avis Budget Group, Inc.(a) | 1,187,083 | |||||||||
11,910 | Babcock & Wilcox Co. (The) | 323,952 | |||||||||
7,243 | BE Aerospace, Inc.(a) | 454,426 | |||||||||
73,361 | Boeing Co. (The) | 6,705,929 | |||||||||
8,089 | Briggs & Stratton Corp. | 181,922 | |||||||||
9,806 | Brink's Co. (The) | 259,957 | |||||||||
14,436 | C.H. Robinson Worldwide, Inc. | 857,354 | |||||||||
4,581 | Carlisle Cos., Inc. | 297,169 | |||||||||
62,763 | Caterpillar, Inc. | 5,314,143 | |||||||||
6,337 | Chicago Bridge & Iron Co. NV (Netherlands) | 340,867 | |||||||||
10,615 | Cintas Corp. | 476,295 | |||||||||
4,874 | CNH Global NV (Netherlands)(b) | 200,468 |
Number of Shares | Value | ||||||||||
Common Stocks and Other Equity Interests (Continued) | |||||||||||
9,800 | Con-way, Inc. | $ | 331,240 | ||||||||
1,910 | Copa Holdings SA, Class A (Panama) | 239,858 | |||||||||
11,136 | Covanta Holding Corp. | 222,720 | |||||||||
4,493 | Crane Co. | 241,858 | |||||||||
103,056 | CSX Corp. | 2,534,147 | |||||||||
12,866 | Cummins, Inc. | 1,368,814 | |||||||||
6,683 | Curtiss-Wright Corp. | 219,470 | |||||||||
29,783 | Danaher Corp. | 1,814,976 | |||||||||
32,783 | Deere & Co. | 2,927,522 | |||||||||
40,412 | Delta Air Lines, Inc.(a) | 692,662 | |||||||||
6,098 | Deluxe Corp. | 232,578 | |||||||||
6,955 | Donaldson Co., Inc. | 253,023 | |||||||||
15,882 | Dover Corp. | 1,095,540 | |||||||||
167,509 | DryShips, Inc. (Greece)(a)(b) | 311,567 | |||||||||
3,708 | Dun & Bradstreet Corp. (The)(b) | 327,973 | |||||||||
31,452 | Eaton Corp. PLC (Ireland) | 1,931,467 | |||||||||
8,905 | EMCOR Group, Inc. | 333,047 | |||||||||
72,141 | Emerson Electric Co. | 4,004,547 | |||||||||
5,168 | EnerSys(a) | 236,901 | |||||||||
6,886 | Equifax, Inc. | 421,423 | |||||||||
4,034 | Esterline Technologies Corp.(a) | 302,711 | |||||||||
50,084 | Exelis, Inc. | 559,438 | |||||||||
15,128 | Expeditors International of Washington, Inc. | 543,549 | |||||||||
8,861 | Fastenal Co. | 434,632 | |||||||||
33,210 | FedEx Corp. | 3,122,072 | |||||||||
3,439 | Flowserve Corp. | 543,775 | |||||||||
22,985 | Fluor Corp. | 1,309,685 | |||||||||
12,869 | Fortune Brands Home & Security, Inc.(a) | 468,303 | |||||||||
19,881 | Foster Wheeler AG (Switzerland)(a) | 419,489 | |||||||||
7,150 | FTI Consulting, Inc.(a) | 236,808 | |||||||||
3,440 | Gardner Denver, Inc. | 258,310 | |||||||||
5,563 | GATX Corp. | 283,435 | |||||||||
15,505 | General Cable Corp.(a) | 534,612 | |||||||||
55,039 | General Dynamics Corp. | 4,070,684 | |||||||||
1,443,787 | General Electric Co. | 32,182,012 | |||||||||
32,637 | GrafTech International Ltd.(a)(b) | 234,334 | |||||||||
18,470 | Harsco Corp. | 403,200 | |||||||||
60,263 | Hertz Global Holdings, Inc.(a) | 1,451,133 | |||||||||
62,348 | Honeywell International, Inc. | 4,585,072 | |||||||||
280 | Hubbell, Inc., Class A | 23,842 | |||||||||
4,017 | Hubbell, Inc., Class B | 385,471 | |||||||||
11,501 | Huntington Ingalls Industries, Inc. | 608,403 | |||||||||
5,796 | IDEX Corp. | 301,566 | |||||||||
1,983 | IHS, Inc., Class A(a) | 193,204 | |||||||||
42,320 | Illinois Tool Works, Inc. | 2,732,179 | |||||||||
29,446 | Ingersoll-Rand PLC (Ireland) | 1,584,195 | |||||||||
12,229 | Iron Mountain, Inc. | 462,990 | |||||||||
29,734 | ITT Corp. | 820,658 | |||||||||
4,590 | J.B. Hunt Transport Services, Inc. | 326,211 | |||||||||
20,623 | Jacobs Engineering Group, Inc.(a) | 1,041,049 |
See Notes to Financial Statements.
38
Schedule of Investments (Continued)
PowerShares FTSE RAFI US 1000 Portfolio (PRF)
April 30, 2013
Number of Shares | Value | ||||||||||
Common Stocks and Other Equity Interests (Continued) | |||||||||||
79,294 | JetBlue Airways Corp.(a)(b) | $ | 546,336 | ||||||||
8,579 | Joy Global, Inc. | 484,885 | |||||||||
4,957 | Kansas City Southern | 540,660 | |||||||||
24,232 | KBR, Inc. | 728,899 | |||||||||
11,785 | Kelly Services, Inc., Class A | 200,581 | |||||||||
7,941 | Kennametal, Inc. | 317,561 | |||||||||
3,075 | Kirby Corp.(a) | 230,287 | |||||||||
22,221 | L-3 Communications Holdings, Inc. | 1,805,456 | |||||||||
3,853 | Lennox International, Inc. | 238,886 | |||||||||
4,287 | Lincoln Electric Holdings, Inc. | 226,182 | |||||||||
50,958 | Lockheed Martin Corp. | 5,049,428 | |||||||||
15,336 | Manitowoc Co., Inc. (The) | 287,703 | |||||||||
21,414 | Manpowergroup, Inc. | 1,138,368 | |||||||||
45,320 | Masco Corp. | 881,021 | |||||||||
9,607 | Matson, Inc. | 226,149 | |||||||||
60,978 | Meritor, Inc.(a) | 353,672 | |||||||||
87 | Moog, Inc., Class B(a) | 3,989 | |||||||||
4,815 | Moog, Inc., Class A(a) | 222,501 | |||||||||
6,616 | MRC Global, Inc.(a) | 198,149 | |||||||||
2,627 | MSC Industrial Direct Co., Inc., Class A | 207,008 | |||||||||
36,365 | Navistar International Corp.(a) | 1,204,409 | |||||||||
10,116 | Nielsen Holdings NV (Netherlands) | 350,216 | |||||||||
35,529 | Norfolk Southern Corp. | 2,750,655 | |||||||||
53,662 | Northrop Grumman Corp. | 4,064,360 | |||||||||
6,186 | Old Dominion Freight Line, Inc.(a) | 238,161 | |||||||||
14,157 | Oshkosh Corp.(a) | 555,804 | |||||||||
17,438 | Owens Corning(a) | 733,442 | |||||||||
38,432 | PACCAR, Inc. | 1,913,145 | |||||||||
5,927 | Pall Corp. | 395,390 | |||||||||
14,581 | Parker Hannifin Corp. | 1,291,439 | |||||||||
8,523 | Pentair Ltd. (Switzerland) | 463,225 | |||||||||
76,211 | Pitney Bowes, Inc.(b) | 1,041,804 | |||||||||
6,468 | Precision Castparts Corp. | 1,237,264 | |||||||||
9,145 | Quad/Graphics, Inc.(b) | 191,131 | |||||||||
17,183 | Quanta Services, Inc.(a) | 472,189 | |||||||||
113,268 | R.R. Donnelley & Sons Co.(b) | 1,394,329 | |||||||||
54,617 | Raytheon Co. | 3,352,391 | |||||||||
3,193 | Regal-Beloit Corp. | 251,034 | |||||||||
28,020 | Republic Airways Holdings, Inc.(a) | 313,544 | |||||||||
39,323 | Republic Services, Inc. | 1,340,128 | |||||||||
10,383 | Robert Half International, Inc. | 340,770 | |||||||||
8,970 | Rockwell Automation, Inc. | 760,477 | |||||||||
12,151 | Rockwell Collins, Inc. | 764,541 | |||||||||
3,889 | Roper Industries, Inc. | 465,319 | |||||||||
12,443 | Ryder System, Inc. | 722,565 | |||||||||
23,386 | SkyWest, Inc. | 334,654 | |||||||||
4,961 | Snap-On, Inc. | 427,638 | |||||||||
25,993 | Southwest Airlines Co. | 356,104 | |||||||||
25,479 | Spirit Aerosystems Holdings, Inc., Class A(a) | 509,325 | |||||||||
6,862 | SPX Corp. | 511,288 |
Number of Shares | Value | ||||||||||
Common Stocks and Other Equity Interests (Continued) | |||||||||||
14,585 | Stanley Black & Decker, Inc. | $ | 1,091,104 | ||||||||
16,770 | Steelcase, Inc., Class A | 212,979 | |||||||||
2,810 | Stericycle, Inc.(a) | 304,379 | |||||||||
3,184 | Teledyne Technologies, Inc.(a) | 238,991 | |||||||||
18,417 | Terex Corp.(a) | 526,726 | |||||||||
40,361 | Textron, Inc. | 1,039,296 | |||||||||
8,297 | Timken Co. (The) | 436,173 | |||||||||
3,833 | Towers Watson & Co., Class A | 279,502 | |||||||||
2,638 | TransDigm Group, Inc. | 387,258 | |||||||||
7,621 | Trinity Industries, Inc. | 321,682 | |||||||||
3,699 | Triumph Group, Inc. | 295,550 | |||||||||
17,159 | Tutor Perini Corp.(a) | 282,094 | |||||||||
89,030 | Tyco International Ltd. (Switzerland) | 2,859,644 | |||||||||
30,164 | Union Pacific Corp. | 4,463,065 | |||||||||
20,916 | United Continental Holdings, Inc.(a) | 675,587 | |||||||||
62,367 | United Parcel Service, Inc., Class B | 5,353,583 | |||||||||
7,571 | United Rentals, Inc.(a) | 398,310 | |||||||||
8,276 | United Stationers, Inc. | 268,722 | |||||||||
86,165 | United Technologies Corp. | 7,866,003 | |||||||||
17,688 | URS Corp. | 776,857 | |||||||||
58,737 | US Airways Group, Inc.(a)(b) | 992,655 | |||||||||
17,547 | UTi Worldwide, Inc. (British Virgin Islands) | 257,765 | |||||||||
3,351 | W.W. Grainger, Inc. | 825,921 | |||||||||
3,110 | WABCO Holdings, Inc.(a) | 224,635 | |||||||||
6,579 | Waste Connections, Inc. | 249,673 | |||||||||
68,726 | Waste Management, Inc. | 2,816,392 | |||||||||
8,884 | Werner Enterprises, Inc. | 203,977 | |||||||||
5,483 | WESCO International, Inc.(a) | 393,076 | |||||||||
13,515 | Xylem, Inc. | 375,041 | |||||||||
185,387,449 | |||||||||||
Information Technology—10.9% | |||||||||||
34,005 | Accenture PLC, Class A (Ireland) | 2,769,367 | |||||||||
31,400 | Activision Blizzard, Inc. | 469,430 | |||||||||
27,018 | Adobe Systems, Inc.(a) | 1,217,971 | |||||||||
187,852 | Advanced Micro Devices, Inc.(a)(b) | 529,743 | |||||||||
8,665 | Akamai Technologies, Inc.(a) | 380,480 | |||||||||
2,317 | Alliance Data Systems Corp.(a) | 397,991 | |||||||||
13,533 | Altera Corp. | 433,191 | |||||||||
16,231 | Amdocs Ltd. (Guernsey) | 579,447 | |||||||||
52,445 | Amkor Technology, Inc.(a)(b) | 221,842 | |||||||||
6,413 | Amphenol Corp., Class A | 484,310 | |||||||||
20,181 | Analog Devices, Inc. | 887,762 | |||||||||
5,060 | Anixter International, Inc. | 363,004 | |||||||||
3,100 | ANSYS, Inc.(a) | 250,666 | |||||||||
19,659 | AOL, Inc.(a) | 759,624 | |||||||||
32,618 | Apple, Inc. | 14,441,619 | |||||||||
132,960 | Applied Materials, Inc. | 1,929,250 | |||||||||
36,791 | Arrow Electronics, Inc.(a) | 1,443,311 | |||||||||
31,946 | Atmel Corp.(a) | 206,691 |
See Notes to Financial Statements.
39
Schedule of Investments (Continued)
PowerShares FTSE RAFI US 1000 Portfolio (PRF)
April 30, 2013
Number of Shares | Value | ||||||||||
Common Stocks and Other Equity Interests (Continued) | |||||||||||
10,860 | Autodesk, Inc.(a) | $ | 427,667 | ||||||||
35,415 | Automatic Data Processing, Inc. | 2,384,846 | |||||||||
9,298 | Avago Technologies Ltd., Class A (Singapore) | 297,164 | |||||||||
45,043 | Avnet, Inc.(a) | 1,475,158 | |||||||||
13,742 | Benchmark Electronics, Inc.(a) | 245,157 | |||||||||
10,824 | BMC Software, Inc.(a) | 492,276 | |||||||||
23,522 | Broadcom Corp., Class A | 846,792 | |||||||||
13,021 | Broadridge Financial Solutions, Inc. | 327,869 | |||||||||
54,447 | Brocade Communications Systems, Inc.(a) | 316,882 | |||||||||
31,833 | CA, Inc. | 858,536 | |||||||||
6,008 | CACI International, Inc., Class A(a) | 351,408 | |||||||||
6,487 | Check Point Software Technologies Ltd. (Israel)(a) | 302,424 | |||||||||
344,315 | Cisco Systems, Inc. | 7,203,070 | |||||||||
6,219 | Citrix Systems, Inc.(a) | 386,635 | |||||||||
10,108 | Cognizant Technology Solutions Corp., Class A(a) | 654,998 | |||||||||
29,493 | Computer Sciences Corp. | 1,381,747 | |||||||||
19,240 | Convergys Corp. | 327,465 | |||||||||
26,280 | CoreLogic, Inc.(a) | 716,918 | |||||||||
195,735 | Corning, Inc. | 2,838,157 | |||||||||
5,615 | Cree, Inc.(a) | 317,641 | |||||||||
322,755 | Dell, Inc. | 4,324,917 | |||||||||
11,617 | Diebold, Inc. | 340,262 | |||||||||
2,976 | DST Systems, Inc. | 205,790 | |||||||||
46,567 | eBay, Inc.(a) | 2,439,645 | |||||||||
5,257 | EchoStar Corp., Class A(a) | 206,442 | |||||||||
21,925 | Electronic Arts, Inc.(a) | 386,099 | |||||||||
151,047 | EMC Corp.(a) | 3,387,984 | |||||||||
1,547 | Equinix, Inc.(a) | 331,213 | |||||||||
10,231 | Facebook, Inc., Class A(a) | 284,013 | |||||||||
19,144 | Fairchild Semiconductor International, Inc.(a) | 246,958 | |||||||||
20,881 | Fidelity National Information Services, Inc. | 878,046 | |||||||||
15,825 | First Solar, Inc.(a)(b) | 736,812 | |||||||||
10,787 | Fiserv, Inc.(a) | 982,804 | |||||||||
308,100 | Flextronics International Ltd. (Singapore)(a) | 2,202,915 | |||||||||
7,633 | FLIR Systems, Inc. | 185,558 | |||||||||
4,179 | Global Payments, Inc. | 193,906 | |||||||||
9,342 | Google, Inc., Class A(a) | 7,703,133 | |||||||||
15,204 | Harris Corp. | 702,425 | |||||||||
594,652 | Hewlett-Packard Co. | 12,249,831 | |||||||||
115,253 | Ingram Micro, Inc., Class A(a) | 2,052,656 | |||||||||
16,400 | Insight Enterprises, Inc.(a) | 297,168 | |||||||||
650,229 | Intel Corp. | 15,572,985 | |||||||||
74,816 | International Business Machines Corp. | 15,153,233 | |||||||||
10,289 | Intuit, Inc. | 613,636 | |||||||||
6,216 | Itron, Inc.(a) | 246,464 |
Number of Shares | Value | ||||||||||
Common Stocks and Other Equity Interests (Continued) | |||||||||||
40,647 | Jabil Circuit, Inc. | $ | 723,517 | ||||||||
49,166 | Juniper Networks, Inc.(a) | 813,697 | |||||||||
10,765 | KLA-Tencor Corp. | 584,001 | |||||||||
11,859 | Lam Research Corp.(a) | 548,123 | |||||||||
12,049 | Lender Processing Services, Inc. | 334,239 | |||||||||
18,273 | Lexmark International, Inc., Class A(b) | 553,855 | |||||||||
13,735 | Linear Technology Corp. | 501,327 | |||||||||
40,999 | LSI Corp.(a) | 268,133 | |||||||||
61,759 | Marvell Technology Group Ltd. (Bermuda) | 664,527 | |||||||||
2,228 | MasterCard, Inc., Class A | 1,231,928 | |||||||||
23,375 | Maxim Integrated Products, Inc. | 722,989 | |||||||||
62,430 | MEMC Electronic Materials, Inc.(a) | 337,122 | |||||||||
18,198 | Microchip Technology, Inc. | 662,771 | |||||||||
204,282 | Micron Technology, Inc.(a) | 1,924,336 | |||||||||
611,725 | Microsoft Corp. | 20,248,098 | |||||||||
8,140 | Molex, Inc. | 224,420 | |||||||||
9,160 | Molex, Inc., Class A | 213,520 | |||||||||
23,157 | Motorola Solutions, Inc. | 1,324,580 | |||||||||
15,623 | NCR Corp.(a) | 426,039 | |||||||||
23,601 | NetApp, Inc.(a) | 823,439 | |||||||||
13,766 | Nuance Communications, Inc.(a) | 262,105 | |||||||||
52,049 | NVIDIA Corp. | 716,715 | |||||||||
7,484 | NXP Semiconductor NV (Netherlands)(a) | 206,184 | |||||||||
46,868 | ON Semiconductor Corp.(a) | 368,382 | |||||||||
181,216 | Oracle Corp. | 5,940,260 | |||||||||
29,886 | Paychex, Inc. | 1,088,149 | |||||||||
24,682 | Polycom, Inc.(a) | 259,161 | |||||||||
73,327 | QUALCOMM, Inc. | 4,518,410 | |||||||||
4,091 | Red Hat, Inc.(a) | 196,082 | |||||||||
11,867 | Rovi Corp.(a) | 277,569 | |||||||||
68,989 | SAIC, Inc. | 1,030,696 | |||||||||
5,828 | Salesforce.com, Inc.(a) | 239,589 | |||||||||
21,119 | SanDisk Corp.(a) | 1,107,480 | |||||||||
47,514 | Sanmina Corp.(a) | 599,627 | |||||||||
34,556 | Seagate Technology PLC (Ireland) | 1,268,205 | |||||||||
11,589 | Skyworks Solutions, Inc.(a) | 255,769 | |||||||||
55,772 | Symantec Corp.(a) | 1,355,260 | |||||||||
11,052 | SYNNEX Corp.(a) | 382,399 | |||||||||
9,635 | Synopsys, Inc.(a) | 342,717 | |||||||||
46,244 | TE Connectivity Ltd. (Switzerland) | 2,013,926 | |||||||||
27,275 | Tech Data Corp.(a) | 1,274,561 | |||||||||
6,283 | Teradata Corp.(a) | 320,873 | |||||||||
15,287 | Teradyne, Inc.(a) | 251,318 | |||||||||
89,027 | Texas Instruments, Inc. | 3,223,668 | |||||||||
19,375 | Total System Services, Inc. | 457,638 | |||||||||
8,700 | Trimble Navigation Ltd.(a) | 250,038 | |||||||||
18,473 | Unisys Corp.(a) | 353,388 | |||||||||
15,696 | Visa, Inc., Class A | 2,644,148 | |||||||||
28,620 | Vishay Intertechnology, Inc.(a) | 401,825 | |||||||||
27,470 | Western Digital Corp. | 1,518,542 | |||||||||
54,592 | Western Union Co. | 808,508 |
See Notes to Financial Statements.
40
Schedule of Investments (Continued)
PowerShares FTSE RAFI US 1000 Portfolio (PRF)
April 30, 2013
Number of Shares | Value | ||||||||||
Common Stocks and Other Equity Interests (Continued) | |||||||||||
282,212 | Xerox Corp. | $ | 2,421,379 | ||||||||
17,497 | Xilinx, Inc. | 663,311 | |||||||||
75,140 | Yahoo!, Inc.(a) | 1,858,212 | |||||||||
193,850,159 | |||||||||||
Materials—3.7% | |||||||||||
21,623 | Air Products & Chemicals, Inc. | 1,880,336 | |||||||||
4,108 | Airgas, Inc. | 397,038 | |||||||||
99,528 | AK Steel Holding Corp.(b) | 333,419 | |||||||||
5,909 | Albemarle Corp. | 361,926 | |||||||||
351,057 | Alcoa, Inc. | 2,983,985 | |||||||||
19,848 | Allegheny Technologies, Inc. | 535,499 | |||||||||
5,366 | AptarGroup, Inc. | 301,033 | |||||||||
9,278 | Ashland, Inc. | 790,578 | |||||||||
15,246 | Ball Corp. | 672,654 | |||||||||
14,393 | Bemis Co., Inc. | 566,365 | |||||||||
8,956 | Cabot Corp. | 336,387 | |||||||||
12,618 | Celanese Corp., Series A | 623,455 | |||||||||
4,091 | CF Industries Holdings, Inc. | 763,012 | |||||||||
14,680 | Chemtura Corp.(a) | 312,097 | |||||||||
35,766 | Cliffs Natural Resources, Inc.(b) | 763,246 | |||||||||
13,306 | Coeur d'Alene Mines Corp.(a) | 202,783 | |||||||||
29,862 | Commercial Metals Co. | 436,582 | |||||||||
2,850 | Compass Minerals International, Inc. | 246,639 | |||||||||
17,634 | Crown Holdings, Inc.(a) | 752,619 | |||||||||
4,302 | Cytec Industries, Inc. | 313,444 | |||||||||
8,260 | Domtar Corp. | 574,153 | |||||||||
198,285 | Dow Chemical Co. (The) | 6,723,844 | |||||||||
105,080 | E.I. du Pont de Nemours & Co. | 5,727,911 | |||||||||
11,653 | Eastman Chemical Co. | 776,672 | |||||||||
12,607 | Ecolab, Inc. | 1,066,804 | |||||||||
6,766 | FMC Corp. | 410,696 | |||||||||
150,247 | Freeport-McMoRan Copper & Gold, Inc. | 4,572,016 | |||||||||
26,951 | Graphic Packaging Holding Co.(a) | 202,672 | |||||||||
4,145 | Greif, Inc., Class A | 199,665 | |||||||||
1,147 | Greif, Inc., Class B | 59,403 | |||||||||
32,278 | Huntsman Corp. | 608,763 | |||||||||
5,558 | International Flavors & Fragrances, Inc. | 429,022 | |||||||||
61,180 | International Paper Co. | 2,874,236 | |||||||||
45,018 | LyondellBasell Industries NV, Class A (Netherlands) | 2,732,593 | |||||||||
3,792 | Martin Marietta Materials, Inc. | 382,954 | |||||||||
25,105 | MeadWestvaco Corp. | 865,620 | |||||||||
26,142 | Monsanto Co. | 2,792,488 | |||||||||
24,991 | Mosaic Co. (The) | 1,539,196 | |||||||||
59,504 | Newmont Mining Corp. | 1,927,930 | |||||||||
54,793 | Nucor Corp. | 2,390,071 | |||||||||
11,642 | Olin Corp. | 281,387 | |||||||||
8,557 | OM Group, Inc.(a) | 209,390 | |||||||||
34,912 | Owens-Illinois, Inc.(a) | 917,487 | |||||||||
9,167 | Packaging Corp. of America | 435,983 |
Number of Shares | Value | ||||||||||
Common Stocks and Other Equity Interests (Continued) | |||||||||||
12,787 | PPG Industries, Inc. | $ | 1,881,479 | ||||||||
19,676 | Praxair, Inc. | 2,248,967 | |||||||||
9,503 | Reliance Steel & Aluminum Co. | 618,360 | |||||||||
35,620 | Resolute Forest Products(a) | 521,121 | |||||||||
5,523 | Rock-Tenn Co., Class A | 553,073 | |||||||||
7,012 | Rockwood Holdings, Inc. | 455,009 | |||||||||
15,541 | RPM International, Inc. | 503,528 | |||||||||
8,156 | Schnitzer Steel Industries, Inc., Class A | 200,067 | |||||||||
6,073 | Scotts Miracle-Gro Co. (The), Class A | 275,411 | |||||||||
29,585 | Sealed Air Corp. | 654,420 | |||||||||
6,013 | Sensient Technologies Corp. | 236,612 | |||||||||
4,473 | Sherwin-Williams Co. (The) | 819,051 | |||||||||
6,340 | Sigma-Aldrich Corp. | 498,895 | |||||||||
15,868 | Sonoco Products Co. | 556,015 | |||||||||
18,249 | Southern Copper Corp. | 608,239 | |||||||||
41,647 | Steel Dynamics, Inc. | 626,371 | |||||||||
61,173 | United States Steel Corp.(b) | 1,088,879 | |||||||||
6,478 | Valspar Corp. (The) | 413,426 | |||||||||
14,391 | Vulcan Materials Co. | 717,823 | |||||||||
4,282 | W.R. Grace & Co.(a) | 330,185 | |||||||||
10,855 | Walter Energy, Inc. | 194,522 | |||||||||
66,275,506 | |||||||||||
Telecommunication Services—4.5% | |||||||||||
995,956 | AT&T, Inc. | 37,308,512 | |||||||||
92,483 | CenturyLink, Inc. | 3,474,586 | |||||||||
71,947 | Cincinnati Bell, Inc.(a) | 253,254 | |||||||||
8,011 | Crown Castle International Corp.(a) | 616,847 | |||||||||
354,357 | Frontier Communications Corp.(b) | 1,474,125 | |||||||||
44,777 | Leap Wireless International, Inc.(a)(b) | 256,124 | |||||||||
23,716 | Level 3 Communications, Inc.(a) | 477,403 | |||||||||
189,362 | NII Holdings, Inc.(a)(b) | 1,647,449 | |||||||||
668,859 | Sprint Nextel Corp.(a) | 4,715,456 | |||||||||
29,923 | Telephone & Data Systems, Inc. | 671,472 | |||||||||
62,986 | T-Mobile US, Inc.(a) | 745,754 | |||||||||
10,474 | tw telecom, inc.(a) | 283,636 | |||||||||
508,121 | Verizon Communications, Inc. | 27,392,803 | |||||||||
160,101 | Windstream Corp.(b) | 1,364,061 | |||||||||
80,681,482 | |||||||||||
Utilities—5.4% | |||||||||||
194,494 | AES Corp. (The) | 2,695,687 | |||||||||
15,487 | AGL Resources, Inc. | 679,105 | |||||||||
4,933 | ALLETE, Inc. | 253,310 | |||||||||
16,234 | Alliant Energy Corp. | 868,681 | |||||||||
58,271 | Ameren Corp. | 2,112,324 | |||||||||
78,215 | American Electric Power Co., Inc. | 4,022,597 | |||||||||
19,183 | American Water Works Co., Inc. | 803,384 | |||||||||
8,384 | Aqua America, Inc. | 266,024 | |||||||||
18,237 | Atmos Energy Corp. | 809,176 | |||||||||
10,611 | Avista Corp. | 297,639 | |||||||||
6,389 | Black Hills Corp. | 299,580 |
See Notes to Financial Statements.
41
Schedule of Investments (Continued)
PowerShares FTSE RAFI US 1000 Portfolio (PRF)
April 30, 2013
Number of Shares | Value | ||||||||||
Common Stocks and Other Equity Interests (Continued) | |||||||||||
55,403 | Calpine Corp.(a) | $ | 1,203,907 | ||||||||
71,928 | CenterPoint Energy, Inc. | 1,775,183 | |||||||||
6,615 | Cleco Corp. | 327,575 | |||||||||
34,580 | CMS Energy Corp. | 1,035,325 | |||||||||
49,051 | Consolidated Edison, Inc. | 3,122,096 | |||||||||
69,454 | Dominion Resources, Inc. | 4,283,923 | |||||||||
27,763 | DTE Energy Co. | 2,023,367 | |||||||||
71,257 | Duke Energy Corp. | 5,358,526 | |||||||||
54,385 | Edison International | 2,925,913 | |||||||||
44,293 | Entergy Corp. | 3,154,990 | |||||||||
176,782 | Exelon Corp. | 6,631,093 | |||||||||
88,314 | FirstEnergy Corp. | 4,115,432 | |||||||||
26,556 | Great Plains Energy, Inc. | 640,796 | |||||||||
17,375 | Hawaiian Electric Industries, Inc. | 491,712 | |||||||||
6,431 | IDACORP, Inc. | 316,470 | |||||||||
17,221 | Integrys Energy Group, Inc. | 1,060,125 | |||||||||
2,921 | ITC Holdings Corp. | 269,375 | |||||||||
29,621 | MDU Resources Group, Inc. | 739,044 | |||||||||
7,907 | National Fuel Gas Co. | 495,927 | |||||||||
6,468 | New Jersey Resources Corp. | 305,290 | |||||||||
53,624 | NextEra Energy, Inc. | 4,398,777 | |||||||||
48,113 | NiSource, Inc. | 1,478,512 | |||||||||
24,158 | Northeast Utilities | 1,095,082 | |||||||||
4,391 | Northwest Natural Gas Co. | 195,268 | |||||||||
6,044 | NorthWestern Corp. | 260,013 | |||||||||
75,188 | NRG Energy, Inc. | 2,095,490 | |||||||||
35,433 | NV Energy, Inc. | 766,416 | |||||||||
12,146 | OGE Energy Corp. | 879,735 | |||||||||
27,880 | ONEOK, Inc. | 1,431,917 | |||||||||
59,213 | Pepco Holdings, Inc. | 1,338,214 | |||||||||
76,321 | PG&E Corp. | 3,696,989 | |||||||||
9,382 | Piedmont Natural Gas Co., Inc. | 323,022 | |||||||||
17,188 | Pinnacle West Capital Corp. | 1,046,749 | |||||||||
14,585 | PNM Resources, Inc. | 350,186 | |||||||||
13,234 | Portland General Electric Co. | 426,797 | |||||||||
83,045 | PPL Corp. | 2,772,042 | |||||||||
94,017 | Public Service Enterprise Group, Inc. | 3,441,962 | |||||||||
21,335 | Questar Corp. | 541,696 | |||||||||
19,082 | SCANA Corp. | 1,034,244 | |||||||||
27,440 | Sempra Energy | 2,273,404 | |||||||||
115,848 | Southern Co. (The) | 5,587,349 | |||||||||
7,070 | Southwest Gas Corp. | 358,237 | |||||||||
42,458 | TECO Energy, Inc. | 812,222 | |||||||||
19,027 | UGI Corp. | 779,726 | |||||||||
5,904 | UIL Holdings Corp. | 245,843 | |||||||||
5,846 | UNS Energy Corp. | 297,912 | |||||||||
14,147 | Vectren Corp. | 531,362 | |||||||||
19,394 | Westar Energy, Inc. | 678,014 | |||||||||
8,814 | WGL Holdings, Inc. | 407,383 |
Number of Shares | Value | ||||||||||
Common Stocks and Other Equity Interests (Continued) | |||||||||||
21,325 | Wisconsin Energy Corp. | $ | 958,346 | ||||||||
76,931 | Xcel Energy, Inc. | 2,445,636 | |||||||||
96,332,121 | |||||||||||
Total Common Stocks and Other Equity Interests (Cost $1,475,989,322) | 1,778,288,822 | ||||||||||
Money Market Fund—0.0% | |||||||||||
204,698 | Goldman Sachs Financial Square Prime Obligations - Institutional Share Class (Cost $204,698) | 204,698 | |||||||||
Total Investments (excluding investments purchased with cash collateral from securities on loan) (Cost $1,476,194,020)—100.0% | 1,778,493,520 | ||||||||||
Investments Purchased with Cash Collateral from Securities on Loan | |||||||||||
Money Market Fund—1.3% | |||||||||||
22,469,535 | Invesco Liquid Assets Portfolio - Institutional Class (Cost $22,469,535)(e)(f) | 22,469,535 | |||||||||
Total Investments (Cost $1,498,663,555)—101.3% | 1,800,963,055 | ||||||||||
Liabilities in excess of other assets—(1.3)% | (22,513,004 | ) | |||||||||
Net Assets—100.0% | $ | 1,778,450,051 |
Investment Abbreviations:
REIT—Real Estate Investment Trust
Notes to Schedule of Investments:
(a) Non-income producing security.
(b) All or a portion of this security was out on loan at April 30, 2013.
(c) Affiliated company. The Fund's Adviser is a subsidiary of Invesco Ltd. and therefore, Invesco Ltd. is considered to be affiliated with the Fund. See Note 4.
(d) Affiliated company. The Fund's Adviser is a subsidiary of Invesco Ltd. and therefore, Invesco Mortgage Capital, Inc. is considered to be affiliated with the Fund. See Note 4.
(e) The security has been segregated to satisfy the commitment to return the cash collateral received in securities lending transactions upon the borrower's return of the securities loaned. See Note 2H.
(f) The security and the Fund are advised by wholly owned subsidiaries of Invesco Ltd. and are therefore considered to be affiliated.
See Notes to Financial Statements.
42
Schedule of Investments
PowerShares FTSE RAFI US 1500 Small-Mid Portfolio (PRFZ)
April 30, 2013
Number of Shares | Value | ||||||||||
Common Stocks and Other Equity Interests—100.0% | |||||||||||
Consumer Discretionary—18.7% | |||||||||||
27,641 | 1-800-FLOWERS.COM, Inc., Class A(a) | $ | 163,911 | ||||||||
32,484 | AH Belo Corp., Class A | 188,407 | |||||||||
14,491 | Allison Transmission Holdings, Inc. | 330,540 | |||||||||
21,121 | Ambassadors Group, Inc. | 70,755 | |||||||||
11,256 | AMC Networks, Inc., Class A(a) | 709,241 | |||||||||
73,279 | American Apparel, Inc.(a)(b) | 141,428 | |||||||||
37,422 | American Axle & Manufacturing Holdings, Inc.(a) | 500,332 | |||||||||
51,413 | American Greetings Corp., Class A | 948,056 | |||||||||
3,836 | American Public Education, Inc.(a)(b) | 128,621 | |||||||||
3,505 | America's Car-Mart, Inc.(a) | 162,176 | |||||||||
28,815 | Ameristar Casinos, Inc. | 760,428 | |||||||||
6,041 | Arbitron, Inc. | 282,054 | |||||||||
61,138 | Arcos Dorados Holdings, Inc., Class A (British Virgin Islands)(b) | 832,700 | |||||||||
4,959 | Arctic Cat, Inc.(a) | 223,105 | |||||||||
27,076 | Asbury Automotive Group, Inc.(a) | 1,085,477 | |||||||||
5,476 | Ascent Capital Group, Inc., Class A(a) | 364,099 | |||||||||
12,022 | Bally Technologies, Inc.(a) | 640,532 | |||||||||
9,881 | Bassett Furniture Industries, Inc. | 138,630 | |||||||||
23,425 | Beazer Homes USA, Inc.(a)(b) | 378,548 | |||||||||
41,873 | bebe Stores, Inc. | 237,001 | |||||||||
56,862 | Belo Corp., Class A | 609,561 | |||||||||
16,803 | Big 5 Sporting Goods Corp. | 282,290 | |||||||||
836 | Biglari Holdings, Inc.(a) | 323,766 | |||||||||
8,830 | BJ's Restaurants, Inc.(a) | 302,869 | |||||||||
10,148 | Bloomin' Brands, Inc.(a) | 220,719 | |||||||||
3,796 | Blue Nile, Inc.(a) | 123,863 | |||||||||
22,946 | Blyth, Inc.(b) | 378,150 | |||||||||
22,045 | Bob Evans Farms, Inc. | 955,430 | |||||||||
40,124 | Bon-Ton Stores, Inc. (The)(b) | 615,502 | |||||||||
135,748 | Boyd Gaming Corp.(b) | 1,628,976 | |||||||||
9,900 | Bravo Brio Restaurant Group, Inc.(a) | 168,300 | |||||||||
16,199 | Bridgepoint Education, Inc.(a) | 174,625 | |||||||||
49,354 | Brown Shoe Co., Inc. | 834,576 | |||||||||
15,285 | Buckle, Inc. (The)(b) | 742,087 | |||||||||
4,911 | Buffalo Wild Wings, Inc.(a) | 441,990 | |||||||||
31,970 | Build-A-Bear Workshop, Inc.(a) | 162,088 | |||||||||
40,749 | Burger King Worldwide, Inc.(b) | 735,112 | |||||||||
18,564 | Cabela's, Inc.(a) | 1,191,809 | |||||||||
59,555 | Callaway Golf Co. | 399,019 | |||||||||
7,802 | Capella Education Co.(a) | 276,347 | |||||||||
10,815 | Carmike Cinemas, Inc.(a) | 189,911 | |||||||||
6,555 | Carriage Services, Inc. | 114,647 | |||||||||
39,541 | Carrols Restaurant Group, Inc.(a) | 187,820 | |||||||||
16,283 | Carter's, Inc.(a) | 1,064,745 | |||||||||
16,776 | Cato Corp. (The), Class A | 402,792 | |||||||||
2,739 | Cavco Industries, Inc.(a) | 124,953 | |||||||||
14,281 | CEC Entertainment, Inc. | 476,557 |
Number of Shares | Value | ||||||||||
Common Stocks and Other Equity Interests (Continued) | |||||||||||
117,207 | Central European Media Enterprises Ltd., Class A (Bermuda)(a)(b) | $ | 433,666 | ||||||||
24,241 | Cheesecake Factory, Inc. (The) | 965,277 | |||||||||
7,387 | Cherokee, Inc. | 96,253 | |||||||||
52,715 | Chico's FAS, Inc. | 963,103 | |||||||||
16,066 | Children's Place Retail Stores, Inc. (The)(a) | 785,949 | |||||||||
8,466 | Choice Hotels International, Inc. | 330,682 | |||||||||
27,079 | Christopher & Banks Corp.(a) | 188,199 | |||||||||
4,764 | Churchill Downs, Inc. | 364,255 | |||||||||
18,257 | Citi Trends, Inc.(a) | 214,885 | |||||||||
40,125 | Clear Channel Outdoor Holdings, Inc., Class A | 290,104 | |||||||||
14,568 | Coinstar, Inc.(a)(b) | 769,336 | |||||||||
66,457 | Coldwater Creek, Inc.(a)(b) | 237,251 | |||||||||
6,319 | Columbia Sportswear Co.(b) | 370,293 | |||||||||
9,084 | Conn's, Inc.(a) | 393,428 | |||||||||
16,299 | Core-Mark Holding Co., Inc. | 848,200 | |||||||||
355,014 | Corinthian Colleges, Inc.(a)(b) | 710,028 | |||||||||
11,642 | Cracker Barrel Old Country Store, Inc. | 963,259 | |||||||||
35,049 | Crocs, Inc.(a) | 561,485 | |||||||||
6,191 | CSS Industries, Inc. | 177,434 | |||||||||
21,824 | CTC Media, Inc. | 272,582 | |||||||||
47,135 | Cumulus Media, Inc., Class A(a) | 150,361 | |||||||||
21,708 | Deckers Outdoor Corp.(a)(b) | 1,196,545 | |||||||||
7,333 | Delta Apparel, Inc.(a) | 98,116 | |||||||||
55,203 | Denny's Corp.(a) | 313,001 | |||||||||
7,516 | Destination Maternity Corp. | 178,505 | |||||||||
44,926 | Destination XL Group, Inc.(a) | 223,731 | |||||||||
41,312 | Digital Generation, Inc.(a)(b) | 276,790 | |||||||||
8,565 | DineEquity, Inc.(a) | 610,171 | |||||||||
6,428 | Dorman Products, Inc. | 242,593 | |||||||||
49,560 | DreamWorks Animation SKG, Inc., Class A(a)(b) | 955,517 | |||||||||
6,534 | Drew Industries, Inc.(a) | 235,877 | |||||||||
9,428 | DSW, Inc., Class A | 623,379 | |||||||||
17,268 | Dunkin' Brands Group, Inc. | 670,171 | |||||||||
32,108 | E.W. Scripps Co. (The), Class A(a) | 445,980 | |||||||||
117,979 | Education Management Corp.(a)(b) | 668,941 | |||||||||
67,246 | Emmis Communications Corp., Class A(a) | 102,886 | |||||||||
30,830 | Entercom Communications Corp., Class A(a) | 243,865 | |||||||||
47,186 | Entravision Communications Corp., Class A(a) | 182,138 | |||||||||
13,977 | Ethan Allen Interiors, Inc. | 409,247 | |||||||||
48,259 | Express, Inc.(a) | 878,796 | |||||||||
79,853 | Federal-Mogul Corp.(a) | 597,300 | |||||||||
8,443 | Fiesta Restaurant Group, Inc. | 230,156 | |||||||||
37,582 | Fifth & Pacific Cos., Inc.(a) | 774,941 | |||||||||
32,270 | Finish Line, Inc. (The), Class A | 625,715 | |||||||||
3,340 | Fisher Communications, Inc. | 138,343 | |||||||||
6,136 | Flexsteel Industries, Inc. | 126,340 |
See Notes to Financial Statements.
43
Schedule of Investments (Continued)
PowerShares FTSE RAFI US 1500 Small-Mid Portfolio (PRFZ)
April 30, 2013
Number of Shares | Value | ||||||||||
Common Stocks and Other Equity Interests (Continued) | |||||||||||
5,814 | Francesca's Holdings Corp.(a) | $ | 166,048 | ||||||||
37,170 | Fred's, Inc., Class A | 528,929 | |||||||||
18,781 | Fuel Systems Solutions, Inc.(a) | 295,050 | |||||||||
362,976 | Furniture Brands International, Inc.(a)(b) | 399,274 | |||||||||
15,977 | Genesco, Inc.(a) | 983,384 | |||||||||
10,247 | G-III Apparel Group Ltd.(a) | 416,643 | |||||||||
8,416 | Gordmans Stores, Inc.(a) | 94,932 | |||||||||
6,796 | Grand Canyon Education, Inc.(a) | 173,774 | |||||||||
50,392 | Gray Television, Inc.(a) | 319,989 | |||||||||
55,292 | Harte-Hanks, Inc. | 438,466 | |||||||||
11,044 | Haverty Furniture Cos., Inc. | 262,626 | |||||||||
557 | Haverty Furniture Cos., Inc., Class A | 13,201 | |||||||||
18,709 | Helen of Troy Ltd.(a) | 652,570 | |||||||||
31,756 | hhgregg, Inc.(a)(b) | 429,024 | |||||||||
6,715 | Hibbett Sports, Inc.(a) | 368,318 | |||||||||
31,749 | Hillenbrand, Inc. | 797,852 | |||||||||
9,005 | Hooker Furniture Corp. | 155,696 | |||||||||
32,689 | Hot Topic, Inc. | 456,012 | |||||||||
78,408 | Hovnanian Enterprises, Inc., Class A(a)(b) | 427,324 | |||||||||
12,339 | HSN, Inc. | 648,785 | |||||||||
25,344 | Iconix Brand Group, Inc.(a) | 726,106 | |||||||||
14,743 | International Speedway Corp., Class A | 484,602 | |||||||||
14,084 | Interval Leisure Group, Inc. | 268,441 | |||||||||
9,936 | iRobot Corp.(a) | 289,038 | |||||||||
43,702 | Isle of Capri Casinos, Inc.(a) | 334,757 | |||||||||
27,030 | JAKKS Pacific, Inc. | 294,897 | |||||||||
3,923 | Johnson Outdoors, Inc., Class A(a) | 92,034 | |||||||||
15,775 | Jos. A. Bank Clothiers, Inc.(a)(b) | 689,052 | |||||||||
40,150 | Journal Communications, Inc., Class A(a) | 273,422 | |||||||||
10,882 | K12, Inc.(a)(b) | 277,165 | |||||||||
41,120 | KB Home | 926,845 | |||||||||
89,120 | Kingold Jewelry, Inc.(a)(b) | 113,182 | |||||||||
11,783 | Kirkland's, Inc.(a) | 142,103 | |||||||||
13,565 | Krispy Kreme Doughnuts, Inc.(a) | 185,298 | |||||||||
24,915 | La-Z-Boy, Inc. | 449,965 | |||||||||
21,330 | LeapFrog Enterprises, Inc.(a) | 190,690 | |||||||||
94,815 | Lee Enterprises, Inc.(a) | 136,534 | |||||||||
13,952 | Libbey, Inc.(a) | 270,250 | |||||||||
21,266 | Life Time Fitness, Inc.(a) | 982,064 | |||||||||
10,427 | Lifetime Brands, Inc. | 140,765 | |||||||||
14,178 | LIN TV Corp., Class A(a) | 174,531 | |||||||||
51,754 | Lincoln Educational Services Corp. | 288,270 | |||||||||
27,148 | Lions Gate Entertainment Corp. (Canada)(a)(b) | 673,542 | |||||||||
13,639 | Lithia Motors, Inc., Class A | 675,403 | |||||||||
4,454 | Loral Space & Communications, Inc. | 274,010 | |||||||||
14,412 | Luby's, Inc.(a) | 98,146 | |||||||||
6,359 | Lululemon Athletica, Inc.(a)(b) | 484,111 | |||||||||
4,865 | Lumber Liquidators Holdings, Inc.(a) | 398,735 | |||||||||
7,685 | M/I Homes, Inc.(a) | 189,051 | |||||||||
7,244 | Mac-Gray Corp. | 93,810 |
Number of Shares | Value | ||||||||||
Common Stocks and Other Equity Interests (Continued) | |||||||||||
14,975 | Madison Square Garden Co. (The), Class A(a) | $ | 902,543 | ||||||||
15,685 | Maidenform Brands, Inc.(a) | 282,330 | |||||||||
20,120 | Marcus Corp. | 258,341 | |||||||||
20,143 | MarineMax, Inc.(a) | 233,457 | |||||||||
16,293 | Marriott Vacations Worldwide Corp.(a) | 741,006 | |||||||||
14,940 | Matthews International Corp., Class A | 549,941 | |||||||||
3,865 | Mattress Firm Holding Corp.(a)(b) | 148,107 | |||||||||
274,169 | McClatchy Co. (The), Class A(a)(b) | 633,330 | |||||||||
17,205 | MDC Holdings, Inc. | 646,908 | |||||||||
45,949 | Media General, Inc., Class A(a) | 376,782 | |||||||||
33,005 | Men's Wearhouse, Inc. (The) | 1,105,668 | |||||||||
21,708 | Meredith Corp.(b) | 842,705 | |||||||||
13,205 | Meritage Homes Corp.(a) | 644,272 | |||||||||
5,785 | Michael Kors Holdings Ltd. (Virgin Islands (BR))(a) | 329,398 | |||||||||
52,370 | Modine Manufacturing Co.(a) | 478,662 | |||||||||
8,743 | Monro Muffler Brake, Inc.(b) | 361,610 | |||||||||
21,693 | Morgans Hotel Group Co.(a) | 132,978 | |||||||||
3,741 | Morningstar, Inc. | 246,943 | |||||||||
17,697 | Motorcar Parts of America, Inc.(a)(b) | 105,828 | |||||||||
4,969 | Movado Group, Inc. | 150,263 | |||||||||
38,144 | MTR Gaming Group, Inc.(a) | 131,597 | |||||||||
6,981 | Multimedia Games Holding Co., Inc.(a) | 172,151 | |||||||||
12,484 | NACCO Industries, Inc., Class A | 724,322 | |||||||||
34,558 | National CineMedia, Inc. | 561,222 | |||||||||
32,026 | New York & Co., Inc.(a) | 142,836 | |||||||||
6,114 | Nexstar Broadcasting Group, Inc., Class A | 148,876 | |||||||||
33,731 | Nutrisystem, Inc. | 273,221 | |||||||||
48,138 | Orbitz Worldwide, Inc.(a) | 287,865 | |||||||||
37,676 | Orient-Express Hotels Ltd., Class A(a) | 380,528 | |||||||||
9,489 | Overstock.com, Inc.(a)(b) | 197,371 | |||||||||
6,887 | Oxford Industries, Inc. | 407,228 | |||||||||
145,405 | Pacific Sunwear of California, Inc.(a) | 399,864 | |||||||||
7,773 | Papa John's International, Inc.(a) | 489,699 | |||||||||
59,761 | Pep Boys - Manny, Moe & Jack (The)(a) | 693,228 | |||||||||
22,255 | Perry Ellis International, Inc. | 391,020 | |||||||||
27,803 | Pier 1 Imports, Inc. | 645,308 | |||||||||
50,858 | Pinnacle Entertainment, Inc.(a) | 969,353 | |||||||||
15,452 | Pool Corp. | 757,457 | |||||||||
117,520 | Quiksilver, Inc.(a) | 790,910 | |||||||||
69,672 | Radio One, Inc., Class D(a) | 106,598 | |||||||||
23,975 | Reading International, Inc., Class A(a) | 139,535 | |||||||||
20,247 | Red Lion Hotels Corp.(a) | 132,213 | |||||||||
8,224 | Red Robin Gourmet Burgers, Inc.(a) | 397,795 | |||||||||
10,148 | Rocky Brands, Inc.(a) | 150,190 | |||||||||
81,324 | Ruby Tuesday, Inc.(a) | 783,963 | |||||||||
6,428 | Rue21, Inc.(a) | 205,053 | |||||||||
19,251 | Ruth's Hospitality Group, Inc.(a) | 190,777 | |||||||||
14,651 | Ryland Group, Inc. (The) | 660,174 | |||||||||
2,267 | Saga Communications, Inc., Class A(a) | 104,373 |
See Notes to Financial Statements.
44
Schedule of Investments (Continued)
PowerShares FTSE RAFI US 1500 Small-Mid Portfolio (PRFZ)
April 30, 2013
Number of Shares | Value | ||||||||||
Common Stocks and Other Equity Interests (Continued) | |||||||||||
27,406 | Scholastic Corp. | $ | 752,295 | ||||||||
55,665 | Scientific Games Corp., Class A(a) | 494,305 | |||||||||
8,446 | Sears Hometown And Outlet Stores, Inc.(a) | 376,776 | |||||||||
14,683 | Select Comfort Corp.(a) | 311,573 | |||||||||
13,515 | SHFL entertainment, Inc.(a) | 213,537 | |||||||||
10,544 | Shoe Carnival, Inc. | 219,632 | |||||||||
8,526 | Shutterfly, Inc.(a) | 379,663 | |||||||||
32,163 | Sinclair Broadcast Group, Inc., Class A | 861,968 | |||||||||
229,252 | Sirius XM Radio, Inc. | 745,069 | |||||||||
12,382 | Six Flags Entertainment Corp. | 902,276 | |||||||||
32,954 | Skechers U.S.A., Inc., Class A(a) | 684,784 | |||||||||
17,804 | Smith & Wesson Holding Corp.(a)(b) | 156,319 | |||||||||
2,128 | SodaStream International Ltd. (Israel)(a)(b) | 114,572 | |||||||||
37,401 | Sonic Corp.(a) | 468,635 | |||||||||
18,646 | Sotheby's | 661,560 | |||||||||
40,724 | Spartan Motors, Inc. | 216,652 | |||||||||
14,483 | Speedway Motorsports, Inc. | 261,128 | |||||||||
20,688 | Stage Stores, Inc. | 572,851 | |||||||||
11,423 | Standard Motor Products, Inc. | 350,001 | |||||||||
18,973 | Standard Pacific Corp.(a)(b) | 171,706 | |||||||||
27,493 | Stein Mart, Inc. | 217,470 | |||||||||
6,533 | Steiner Leisure Ltd.(a) | 316,393 | |||||||||
5,400 | Steinway Musical Instruments, Inc.(a) | 134,676 | |||||||||
11,397 | Steven Madden Ltd.(a) | 554,236 | |||||||||
40,976 | Stewart Enterprises, Inc., Class A | 365,096 | |||||||||
42,630 | Stoneridge, Inc.(a) | 322,709 | |||||||||
11,455 | Strayer Education, Inc.(b) | 542,509 | |||||||||
3,018 | Sturm Ruger & Co., Inc.(b) | 154,733 | |||||||||
17,083 | Superior Industries International, Inc. | 313,644 | |||||||||
17,020 | Systemax, Inc. | 155,903 | |||||||||
14,506 | Tempur-Pedic International, Inc.(a) | 703,541 | |||||||||
19,109 | Texas Roadhouse, Inc. | 449,062 | |||||||||
21,481 | Thor Industries, Inc. | 796,730 | |||||||||
17,033 | Tower International, Inc.(a) | 274,061 | |||||||||
26,761 | Town Sports International Holdings, Inc.(a) | 269,483 | |||||||||
8,953 | TripAdvisor, Inc.(a) | 470,749 | |||||||||
10,990 | True Religion Apparel, Inc. | 297,389 | |||||||||
28,566 | Tuesday Morning Corp.(a) | 231,670 | |||||||||
8,720 | Ulta Salon, Cosmetics & Fragrance, Inc.(a) | 764,308 | |||||||||
11,282 | Under Armour, Inc., Class A(a) | 643,977 | |||||||||
18,799 | Unifi, Inc.(a) | 366,581 | |||||||||
10,541 | Universal Electronics, Inc.(a) | 242,232 | |||||||||
11,366 | Universal Technical Institute, Inc. | 134,914 | |||||||||
12,821 | Vail Resorts, Inc. | 773,106 | |||||||||
54,705 | ValueVision Media, Inc., Class A(a) | 235,232 | |||||||||
4,664 | Vera Bradley, Inc.(a)(b) | 106,432 | |||||||||
6,693 | Vitamin Shoppe, Inc.(a) | 328,961 | |||||||||
30,981 | VOXX International Corp.(a) | 295,249 | |||||||||
14,656 | Weight Watchers International, Inc. | 618,044 | |||||||||
13,732 | West Marine, Inc.(a) | 162,450 | |||||||||
96,226 | Wet Seal, Inc. (The), Class A(a) | 313,697 |
Number of Shares | Value | ||||||||||
Common Stocks and Other Equity Interests (Continued) | |||||||||||
4,667 | Weyco Group, Inc. | $ | 112,008 | ||||||||
9,724 | Winnebago Industries, Inc.(a) | 178,144 | |||||||||
30,598 | WMS Industries, Inc.(a) | 776,577 | |||||||||
17,999 | Wolverine World Wide, Inc. | 859,812 | |||||||||
38,118 | World Wrestling Entertainment, Inc., Class A | 349,923 | |||||||||
150,262 | Zale Corp.(a) | 667,163 | |||||||||
7,522 | Zumiez, Inc.(a) | 217,912 | |||||||||
105,432,212 | |||||||||||
Consumer Staples—3.6% | |||||||||||
34,720 | Adecoagro S.A. (Luxembourg)(a) | 259,011 | |||||||||
150,431 | Alliance One International, Inc.(a) | 564,116 | |||||||||
18,247 | B&G Foods, Inc. | 563,102 | |||||||||
1,001 | Boston Beer Co., Inc. (The), Class A(a)(b) | 169,489 | |||||||||
21,713 | Boulder Brands, Inc.(a)(b) | 195,634 | |||||||||
6,259 | Calavo Growers, Inc. | 177,505 | |||||||||
8,927 | Cal-Maine Foods, Inc. | 381,004 | |||||||||
21,227 | Central Garden & Pet Co.(a) | 185,736 | |||||||||
69,296 | Central Garden & Pet Co., Class A(a) | 609,805 | |||||||||
3,459 | Coca-Cola Bottling Co. Consolidated | 212,729 | |||||||||
51,560 | Darling International, Inc.(a) | 954,376 | |||||||||
21,723 | Diamond Foods, Inc.(a)(b) | 327,583 | |||||||||
75,138 | Dole Food Co., Inc.(a) | 808,485 | |||||||||
13,463 | Elizabeth Arden, Inc.(a) | 551,310 | |||||||||
7,964 | Fresh Market, Inc. (The)(a) | 325,967 | |||||||||
11,231 | Hain Celestial Group, Inc. (The)(a) | 732,823 | |||||||||
35,894 | Harbinger Group, Inc.(a) | 324,482 | |||||||||
12,303 | Ingles Markets, Inc., Class A | 262,300 | |||||||||
4,391 | Inter Parfums, Inc. | 127,207 | |||||||||
4,468 | J & J Snack Foods Corp. | 335,189 | |||||||||
10,332 | John B. Sanfilippo & Son, Inc. | 216,765 | |||||||||
8,004 | Lancaster Colony Corp. | 631,756 | |||||||||
4,833 | Medifast, Inc.(a) | 126,625 | |||||||||
9,824 | National Beverage Corp. | 144,708 | |||||||||
18,755 | Nu Skin Enterprises, Inc., Class A | 951,441 | |||||||||
8,383 | Nutraceutical International Corp. | 154,834 | |||||||||
21,066 | Omega Protein Corp.(a) | 196,124 | |||||||||
62,624 | Pilgrim's Pride Corp.(a) | 613,089 | |||||||||
16,516 | Prestige Brands Holdings, Inc.(a) | 445,106 | |||||||||
4,917 | PriceSmart, Inc. | 438,744 | |||||||||
6,952 | Revlon, Inc., Class A(a) | 134,521 | |||||||||
146,746 | Roundy's, Inc.(b) | 1,050,701 | |||||||||
12,169 | Sanderson Farms, Inc. | 745,473 | |||||||||
156 | Seaboard Corp. | 428,373 | |||||||||
14,478 | Seneca Foods Corp., Class A(a) | 471,838 | |||||||||
2,336 | Seneca Foods Corp., Class B(a) | 74,682 | |||||||||
24,318 | Snyders-Lance, Inc. | 612,327 | |||||||||
44,883 | Spartan Stores, Inc. | 753,137 | |||||||||
13,675 | Spectrum Brands Holdings, Inc. | 765,800 | |||||||||
17,863 | Susser Holdings Corp.(a) | 949,776 |
See Notes to Financial Statements.
45
Schedule of Investments (Continued)
PowerShares FTSE RAFI US 1500 Small-Mid Portfolio (PRFZ)
April 30, 2013
Number of Shares | Value | ||||||||||
Common Stocks and Other Equity Interests (Continued) | |||||||||||
7,604 | Tootsie Roll Industries, Inc.(b) | $ | 237,473 | ||||||||
2,898 | USANA Health Sciences, Inc.(a)(b) | 163,505 | |||||||||
46,651 | Vector Group Ltd.(b) | 760,878 | |||||||||
6,827 | Village Super Market, Inc., Class A | 240,310 | |||||||||
4,979 | WD-40 Co. | 268,518 | |||||||||
9,025 | Weis Markets, Inc. | 377,516 | |||||||||
9,277 | Whitewave Foods Co., Class A(a)(b) | 156,874 | |||||||||
22,464 | Zhongpin, Inc.(a) | 291,133 | |||||||||
20,469,880 | |||||||||||
Energy—6.8% | |||||||||||
44,639 | Abraxas Petroleum Corp.(a)(b) | 99,991 | |||||||||
5,650 | Adams Resources & Energy, Inc. | 280,748 | |||||||||
14,372 | Alon USA Energy, Inc. | 238,575 | |||||||||
8,225 | Approach Resources, Inc.(a)(b) | 195,097 | |||||||||
40,276 | Basic Energy Services, Inc.(a) | 552,989 | |||||||||
15,476 | Berry Petroleum Co., Class A | 741,455 | |||||||||
3,214 | Bonanza Creek Energy, Inc.(a) | 110,401 | |||||||||
14,324 | Bristow Group, Inc. | 905,277 | |||||||||
12,036 | C&J Energy Services, Inc.(a) | 238,192 | |||||||||
300,481 | Cal Dive International, Inc.(a)(b) | 501,803 | |||||||||
40,092 | Callon Petroleum Co.(a) | 143,529 | |||||||||
3,201 | CARBO Ceramics, Inc.(b) | 226,151 | |||||||||
16,063 | Carrizo Oil & Gas, Inc.(a) | 389,046 | |||||||||
6,582 | Clayton Williams Energy, Inc.(a) | 254,065 | |||||||||
15,074 | Clean Energy Fuels Corp.(a)(b) | 198,826 | |||||||||
20,189 | Cobalt International Energy, Inc.(a) | 564,081 | |||||||||
51,054 | Comstock Resources, Inc.(a) | 799,506 | |||||||||
6,629 | Contango Oil & Gas Co. | 249,383 | |||||||||
4,077 | Continental Resources, Inc.(a) | 325,834 | |||||||||
5,024 | Core Laboratories NV (Netherlands) | 727,375 | |||||||||
29,423 | Crimson Exploration, Inc.(a) | 90,329 | |||||||||
41,394 | Crosstex Energy, Inc. | 762,064 | |||||||||
5,409 | CVR Energy, Inc. | 266,501 | |||||||||
6,116 | Dawson Geophysical Co.(a) | 188,006 | |||||||||
8,085 | Delek US Holdings, Inc. | 291,788 | |||||||||
56,408 | DHT Holdings, Inc. (Marshall Islands) | 242,554 | |||||||||
8,403 | Dril-Quip, Inc.(a) | 703,415 | |||||||||
54,297 | Endeavour International Corp.(a)(b) | 148,774 | |||||||||
23,234 | Energy XXI Bermuda Ltd. (Bermuda) | 528,341 | |||||||||
18,806 | EPL Oil & Gas, Inc.(a) | 614,392 | |||||||||
10,118 | Forum Energy Technologies, Inc.(a) | 281,382 | |||||||||
86,667 | Gastar Exploration Ltd. (Canada)(a) | 242,668 | |||||||||
1,503 | Geospace Technologies Corp.(a) | 126,808 | |||||||||
63,041 | Global Geophysical Services, Inc.(a) | 229,469 | |||||||||
12,659 | Goodrich Petroleum Corp.(a) | 165,073 | |||||||||
124,424 | Gran Tierra Energy, Inc. (Canada)(a) | 688,065 | |||||||||
57,553 | Green Plains Renewable Energy, Inc.(a) | 719,988 | |||||||||
7,964 | Gulf Island Fabrication, Inc. | 163,740 | |||||||||
17,529 | Gulfmark Offshore, Inc., Class A(a) | 729,557 | |||||||||
8,024 | Gulfport Energy Corp.(a) | 418,773 |
Number of Shares | Value | ||||||||||
Common Stocks and Other Equity Interests (Continued) | |||||||||||
26,046 | Harvest Natural Resources, Inc.(a) | $ | 85,431 | ||||||||
121,173 | Hercules Offshore, Inc.(a) | 893,045 | |||||||||
19,156 | Hornbeck Offshore Services, Inc.(a) | 860,487 | |||||||||
5,841 | InterOil Corp. (Canada)(a)(b) | 462,140 | |||||||||
57,717 | ION Geophysical Corp.(a) | 360,154 | |||||||||
180,227 | James River Coal Co.(a)(b) | 297,375 | |||||||||
51,629 | Knightsbridge Tankers Ltd. (Bermuda)(b) | 353,659 | |||||||||
40,432 | Kodiak Oil & Gas Corp. (Canada)(a) | 316,583 | |||||||||
9,665 | Kosmos Energy Ltd. (Bermuda)(a) | 106,218 | |||||||||
7,385 | Laredo Petroleum Holdings, Inc.(a) | 127,022 | |||||||||
357,722 | Lone Pine Resources, Inc.(a) | 350,568 | |||||||||
8,100 | Lufkin Industries, Inc. | 715,149 | |||||||||
41,307 | Magnum Hunter Resources Corp.(a)(b) | 112,355 | |||||||||
17,035 | Matrix Service Co.(a) | 256,036 | |||||||||
42,198 | McMoRan Exploration Co.(a)(b) | 698,377 | |||||||||
12,739 | Midstates Petroleum Co., Inc.(a) | 73,504 | |||||||||
8,174 | Mitcham Industries, Inc.(a) | 121,384 | |||||||||
7,123 | Natural Gas Services Group, Inc.(a) | 143,813 | |||||||||
38,790 | Navios Maritime Acquisition Corp. (Marshall Islands)(a) | 130,334 | |||||||||
57,737 | Newpark Resources, Inc.(a) | 606,238 | |||||||||
80,176 | Nordic American Tankers Ltd. (Bermuda)(b) | 714,368 | |||||||||
15,778 | Northern Oil And Gas, Inc.(a) | 203,378 | |||||||||
6,772 | Oasis Petroleum, Inc.(a) | 231,806 | |||||||||
24,124 | Ocean Rig UDW, Inc. (Marshall Islands)(a) | 395,151 | |||||||||
29,573 | Pacific Drilling SA (Luxembourg)(a) | 295,139 | |||||||||
371,699 | Pacific Ethanol, Inc.(a) | 100,359 | |||||||||
147,417 | Parker Drilling Co.(a) | 607,358 | |||||||||
10,992 | PBF Energy, Inc.(b) | 334,706 | |||||||||
13,187 | PDC Energy, Inc.(a) | 570,997 | |||||||||
158,613 | Penn Virginia Corp. | 639,210 | |||||||||
83,722 | PetroQuest Energy, Inc.(a) | 358,330 | |||||||||
1,001 | PHI, Inc.(a) | 27,027 | |||||||||
10,785 | PHI, Inc. - Non-Voting(a) | 299,499 | |||||||||
64,837 | Pioneer Energy Services Corp.(a) | 457,101 | |||||||||
490,734 | Quicksilver Resources, Inc.(a)(b) | 1,236,650 | |||||||||
18,172 | Renewable Energy Group, Inc.(a) | 178,631 | |||||||||
19,603 | Resolute Energy Corp.(a) | 180,740 | |||||||||
5,471 | REX American Resources Corp.(a) | 102,253 | |||||||||
10,747 | Rex Energy Corp.(a) | 172,704 | |||||||||
13,407 | Rosetta Resources, Inc.(a) | 575,294 | |||||||||
24,339 | RPC, Inc.(b) | 322,248 | |||||||||
20,080 | SemGroup Corp., Class A(a) | 1,041,148 | |||||||||
50,267 | Ship Finance International Ltd. (Bermuda)(b) | 828,400 | |||||||||
15,039 | StealthGas, Inc. (Greece)(a) | 155,503 | |||||||||
41,344 | Stone Energy Corp.(a) | 815,717 | |||||||||
69,755 | Swift Energy Co.(a) | 902,630 | |||||||||
199,738 | Teekay Tankers Ltd., Class A (Marshall Islands)(b) | 505,337 | |||||||||
29,822 | Tesco Corp. (Canada)(a) | 363,828 | |||||||||
77,012 | TETRA Technologies, Inc.(a) | 703,120 |
See Notes to Financial Statements.
46
Schedule of Investments (Continued)
PowerShares FTSE RAFI US 1500 Small-Mid Portfolio (PRFZ)
April 30, 2013
Number of Shares | Value | ||||||||||
Common Stocks and Other Equity Interests (Continued) | |||||||||||
166,587 | Tsakos Energy Navigation Ltd. (Bermuda) | $ | 629,699 | ||||||||
802,064 | USEC, Inc.(a) | 256,660 | |||||||||
30,208 | VAALCO Energy, Inc.(a) | 202,998 | |||||||||
131,488 | Vantage Drilling Co. (Cayman Islands)(a) | 222,215 | |||||||||
16,560 | W&T Offshore, Inc. | 193,421 | |||||||||
58,998 | Warren Resources, Inc.(a) | 155,165 | |||||||||
17,326 | Westmoreland Coal Co.(a) | 209,125 | |||||||||
82,976 | Willbros Group, Inc.(a) | 788,272 | |||||||||
38,390,070 | |||||||||||
Financials—21.6% | |||||||||||
10,540 | 1st Source Corp. | 248,006 | |||||||||
15,306 | 1st United Bancorp, Inc. | 101,479 | |||||||||
16,056 | Acadia Realty Trust REIT | 458,399 | |||||||||
5,373 | Agree Realty Corp. REIT | 161,566 | |||||||||
573 | Alexander's, Inc. REIT | 176,478 | |||||||||
3,086 | Altisource Portfolio Solutions SA (Luxembourg)(a) | 254,718 | |||||||||
11,147 | American Assets Trust, Inc. REIT | 376,323 | |||||||||
63,937 | American Equity Investment Life Holding Co. | 974,400 | |||||||||
5,779 | American National Bankshares, Inc. | 125,578 | |||||||||
11,612 | American National Insurance Co. | 1,091,876 | |||||||||
9,421 | American Safety Insurance Holdings Ltd. (Bermuda)(a) | 226,858 | |||||||||
11,597 | Ameris Bancorp(a) | 160,850 | |||||||||
9,153 | AMERISAFE, Inc. | 298,937 | |||||||||
9,325 | AmTrust Financial Services, Inc.(b) | 295,230 | |||||||||
12,593 | Apollo Commercial Real Estate Finance, Inc. REIT | 223,400 | |||||||||
21,605 | Arbor Realty Trust, Inc. REIT | 166,791 | |||||||||
25,256 | Argo Group International Holdings Ltd. (Bermuda) | 1,046,861 | |||||||||
6,154 | Arlington Asset Investment Corp., Class A | 166,712 | |||||||||
29,008 | ARMOUR Residential REIT, Inc. REIT | 188,262 | |||||||||
6,305 | Arrow Financial Corp. | 152,518 | |||||||||
95,092 | Artio Global Investors, Inc. | 260,552 | |||||||||
59,820 | Ashford Hospitality Trust, Inc. REIT | 770,482 | |||||||||
20,586 | Asset Acceptance Capital Corp.(a) | 133,191 | |||||||||
15,655 | Associated Estates Realty Corp. REIT | 279,755 | |||||||||
9,993 | Asta Funding, Inc. | 93,834 | |||||||||
6,122 | AV Homes, Inc.(a) | 79,035 | |||||||||
776 | Baldwin & Lyons, Inc., Class A | 18,275 | |||||||||
6,552 | Baldwin & Lyons, Inc., Class B | 159,214 | |||||||||
3,200 | BancFirst Corp. | 133,888 | |||||||||
14,023 | Bancorp, Inc. (The)(a) | 182,299 | |||||||||
34,771 | Bank Mutual Corp. | 180,114 | |||||||||
2,852 | Bank of Marin Bancorp | 112,939 | |||||||||
5,757 | Bank of the Ozarks, Inc. | 235,634 | |||||||||
14,149 | BankFinancial Corp. | 111,636 | |||||||||
14,121 | BankUnited, Inc. | 357,967 |
Number of Shares | Value | ||||||||||
Common Stocks and Other Equity Interests (Continued) | |||||||||||
8,396 | Banner Corp. | $ | 274,297 | ||||||||
2,556 | Bar Harbor Bankshares | 92,016 | |||||||||
23,119 | BBCN Bancorp, Inc. | 297,773 | |||||||||
11,588 | Beneficial Mutual Bancorp, Inc.(a) | 99,077 | |||||||||
11,389 | Berkshire Hills Bancorp, Inc. | 294,520 | |||||||||
122,720 | BGC Partners, Inc., Class A | 701,958 | |||||||||
2,954 | BofI Holding, Inc.(a) | 120,464 | |||||||||
11,026 | BOK Financial Corp. | 689,015 | |||||||||
41,227 | Boston Private Financial Holdings, Inc. | 397,428 | |||||||||
4,838 | Bridge Bancorp, Inc. | 97,679 | |||||||||
50,789 | Brookline Bancorp, Inc. | 426,628 | |||||||||
5,403 | Bryn Mawr Bank Corp. | 125,512 | |||||||||
2,585 | C&F Financial Corp. | 103,917 | |||||||||
33,274 | Calamos Asset Management, Inc., Class A | 377,660 | |||||||||
5,304 | Camden National Corp. | 177,101 | |||||||||
11,431 | Campus Crest Communities, Inc. REIT | 156,147 | |||||||||
14,078 | Capital City Bank Group, Inc.(a) | 175,975 | |||||||||
91,517 | Capital Trust, Inc., Class A REIT(a) | 220,556 | |||||||||
55,680 | CapLease, Inc. REIT | 390,874 | |||||||||
9,122 | Cardinal Financial Corp. | 139,111 | |||||||||
13,892 | Cash America International, Inc.(b) | 606,108 | |||||||||
33,018 | Cathay General Bancorp | 650,785 | |||||||||
17,500 | CBOE Holdings, Inc. | 656,775 | |||||||||
66,074 | Cedar Realty Trust, Inc. REIT | 423,534 | |||||||||
11,065 | Centerstate Banks, Inc. | 92,061 | |||||||||
17,781 | Central Pacific Financial Corp.(a) | 299,432 | |||||||||
9,206 | Charter Financial Corp. | 93,625 | |||||||||
6,767 | Chatham Lodging Trust REIT | 123,904 | |||||||||
19,522 | Chemical Financial Corp. | 484,146 | |||||||||
13,673 | Chesapeake Lodging Trust REIT | 323,503 | |||||||||
7,418 | Citizens & Northern Corp. | 143,613 | |||||||||
14,614 | Citizens, Inc., Class A(a) | 95,576 | |||||||||
9,002 | City Holding Co.(b) | 343,696 | |||||||||
20,940 | CNA Financial Corp. | 705,887 | |||||||||
7,238 | CNB Financial Corp. | 117,183 | |||||||||
17,796 | CoBiz Financial, Inc. | 152,334 | |||||||||
7,290 | Cohen & Steers, Inc.(b) | 288,028 | |||||||||
8,324 | Colony Financial, Inc. REIT | 185,625 | |||||||||
20,143 | Columbia Banking System, Inc. | 432,470 | |||||||||
19,802 | Community Bank System, Inc. | 567,129 | |||||||||
8,394 | Community Trust Bancorp, Inc. | 290,600 | |||||||||
20,874 | Consumer Portfolio Services, Inc.(a) | 192,458 | |||||||||
4,424 | Coresite Realty Corp. REIT | 160,060 | |||||||||
53,646 | Cousins Properties, Inc. REIT | 585,814 | |||||||||
55,422 | Cowen Group, Inc., Class A(a) | 141,880 | |||||||||
15,008 | Crawford & Co., Class A | 79,242 | |||||||||
18,074 | Crawford & Co., Class B | 137,182 | |||||||||
1,147 | Credit Acceptance Corp.(a) | 115,079 | |||||||||
27,086 | CreXus Investment Corp. REIT(b) | 352,931 | |||||||||
41,292 | CubeSmart REIT | 725,500 | |||||||||
49,104 | CVB Financial Corp. | 533,761 |
See Notes to Financial Statements.
47
Schedule of Investments (Continued)
PowerShares FTSE RAFI US 1500 Small-Mid Portfolio (PRFZ)
April 30, 2013
Number of Shares | Value | ||||||||||
Common Stocks and Other Equity Interests (Continued) | |||||||||||
30,054 | DFC Global Corp.(a) | $ | 405,729 | ||||||||
1,721 | Diamond Hill Investment Group, Inc. | 129,910 | |||||||||
20,252 | Dime Community Bancshares, Inc. | 288,996 | |||||||||
8,503 | Donegal Group, Inc., Class A | 124,484 | |||||||||
904 | Donegal Group, Inc., Class B | 22,681 | |||||||||
390,663 | Doral Financial Corp.(a) | 294,247 | |||||||||
18,280 | DuPont Fabros Technology, Inc. REIT | 459,559 | |||||||||
22,784 | Dynex Capital, Inc. REIT | 244,928 | |||||||||
5,458 | Eagle Bancorp, Inc.(a) | 126,244 | |||||||||
10,934 | EastGroup Properties, Inc. REIT | 689,607 | |||||||||
32,116 | Education Realty Trust, Inc. REIT | 352,955 | |||||||||
8,379 | eHealth, Inc.(a) | 175,456 | |||||||||
19,974 | Employers Holdings, Inc. | 452,411 | |||||||||
10,872 | Encore Capital Group, Inc.(a) | 309,743 | |||||||||
2,490 | Enstar Group Ltd. (Bermuda)(a) | 316,454 | |||||||||
10,158 | Enterprise Financial Services Corp. | 146,072 | |||||||||
8,323 | Equity Lifestyle Properties, Inc. REIT | 676,244 | |||||||||
24,370 | Equity One, Inc. REIT | 621,191 | |||||||||
28,725 | Everbank Financial Corp. | 459,600 | |||||||||
5,137 | Evercore Partners, Inc., Class A | 193,922 | |||||||||
9,863 | Excel Trust, Inc. REIT | 150,214 | |||||||||
20,911 | Extra Space Storage, Inc. REIT | 911,301 | |||||||||
27,243 | EZCORP, Inc., Class A(a) | 460,407 | |||||||||
6,504 | Farmers Capital Bank Corp.(a) | 120,324 | |||||||||
10,523 | FBL Financial Group, Inc., Class A | 413,659 | |||||||||
6,893 | FBR & Co.(a) | 143,581 | |||||||||
3,582 | Federal Agricultural Mortgage Corp., Class C | 113,836 | |||||||||
99,765 | FelCor Lodging Trust, Inc. REIT(a) | 596,595 | |||||||||
3,475 | Financial Engines, Inc. | 126,386 | |||||||||
6,784 | Financial Institutions, Inc. | 129,778 | |||||||||
12,547 | First BanCorp | 163,236 | |||||||||
7,405 | First Bancorp, Inc. | 126,551 | |||||||||
111,452 | First BanCorp.(a) | 658,681 | |||||||||
71,002 | First Busey Corp. | 305,309 | |||||||||
14,508 | First California Financial Group, Inc.(a) | 117,080 | |||||||||
6,607 | First Cash Financial Services, Inc.(a) | 340,062 | |||||||||
2,997 | First Citizens BancShares, Inc., Class A | 558,701 | |||||||||
73,368 | First Commonwealth Financial Corp. | 524,581 | |||||||||
14,457 | First Community Bancshares, Inc. | 224,228 | |||||||||
6,750 | First Connecticut Bancorp, Inc. | 100,170 | |||||||||
7,265 | First Defiance Financial Corp. | 164,480 | |||||||||
36,745 | First Financial Bancorp | 564,771 | |||||||||
10,145 | First Financial Bankshares, Inc.(b) | 501,264 | |||||||||
6,900 | First Financial Corp. | 213,141 | |||||||||
11,501 | First Financial Holdings, Inc. | 230,480 | |||||||||
12,457 | First Financial Northwest, Inc.(a) | 100,902 | |||||||||
33,299 | First Industrial Realty Trust, Inc. REIT | 597,384 | |||||||||
12,335 | First Interstate BancSystem, Inc. | 250,647 | |||||||||
19,516 | First Merchants Corp. | 316,745 | |||||||||
54,568 | First Midwest Bancorp, Inc. | 684,828 |
Number of Shares | Value | ||||||||||
Common Stocks and Other Equity Interests (Continued) | |||||||||||
3,496 | First of Long Island Corp. (The) | $ | 105,614 | ||||||||
34,584 | First Potomac Realty Trust REIT | 553,344 | |||||||||
13,971 | Flagstar Bancorp, Inc.(a) | 173,380 | |||||||||
20,656 | Flushing Financial Corp. | 313,558 | |||||||||
37,680 | Forest City Enterprises, Inc., Class A(a) | 703,486 | |||||||||
1,009 | Forest City Enterprises, Inc., Class B(a) | 18,737 | |||||||||
15,735 | Forestar Group, Inc.(a) | 338,932 | |||||||||
6,767 | Franklin Financial Corp. | 123,024 | |||||||||
42,059 | Franklin Street Properties Corp. REIT | 642,241 | |||||||||
31,138 | FXCM, Inc., Class A | 421,920 | |||||||||
1,988 | GAMCO Investors, Inc., Class A | 104,370 | |||||||||
6,660 | German American Bancorp, Inc. | 141,991 | |||||||||
14,186 | Getty Realty Corp. REIT | 303,722 | |||||||||
87,385 | GFI Group, Inc. | 350,414 | |||||||||
42,287 | Glacier Bancorp, Inc. | 780,195 | |||||||||
7,619 | Gladstone Commercial Corp. REIT | 145,828 | |||||||||
49,547 | Glimcher Realty Trust REIT | 621,319 | |||||||||
9,002 | Global Indemnity PLC (Ireland)(a) | 200,655 | |||||||||
19,210 | Government Properties Income Trust REIT | 500,421 | |||||||||
131,198 | Gramercy Property Trust, Inc. REIT(a) | 623,191 | |||||||||
7,678 | Great Southern Bancorp, Inc. | 202,469 | |||||||||
14,485 | Green Dot Corp., Class A(a)(b) | 227,559 | |||||||||
7,394 | Greenhill & Co., Inc. | 341,529 | |||||||||
15,375 | Greenlight Capital Re Ltd., Class A (Cayman Islands)(a) | 378,379 | |||||||||
44,318 | Guaranty Bancorp(a) | 93,954 | |||||||||
16,624 | Hallmark Financial Services, Inc.(a) | 150,447 | |||||||||
13,408 | Hanmi Financial Corp.(a) | 206,885 | |||||||||
13,965 | Healthcare Trust of America, Inc., Class A REIT | 174,283 | |||||||||
10,604 | Heartland Financial USA, Inc. | 269,448 | |||||||||
8,725 | Heritage Financial Corp. | 121,714 | |||||||||
73,262 | Hersha Hospitality Trust REIT | 438,107 | |||||||||
7,340 | HFF, Inc., Class A(a) | 153,773 | |||||||||
17,139 | Hilltop Holdings, Inc.(a) | 229,491 | |||||||||
5,167 | Home BancShares, Inc. | 205,233 | |||||||||
7,992 | Hometrust Bancshares, Inc.(a) | 127,472 | |||||||||
36,223 | Horace Mann Educators Corp. | 816,829 | |||||||||
11,823 | Howard Hughes Corp. (The)(a) | 1,115,855 | |||||||||
7,875 | Hudson Pacific Properties, Inc. REIT | 179,629 | |||||||||
14,366 | Hudson Valley Holding Corp. | 220,949 | |||||||||
13,247 | IBERIABANK Corp. | 604,328 | |||||||||
9,089 | ICG Group, Inc.(a) | 107,886 | |||||||||
24,608 | IMPAC Mortgage Holdings, Inc. REIT(a)(b) | 255,431 | |||||||||
10,277 | Independent Bank Corp. | 318,998 | |||||||||
20,112 | Independent Bank Corp./Mi(a) | 142,192 | |||||||||
10,343 | Infinity Property & Casualty Corp. | 586,862 | |||||||||
54,061 | Inland Real Estate Corp. REIT | 611,971 | |||||||||
35,093 | International Bancshares Corp. | 680,804 | |||||||||
21,523 | Intervest Bancshares Corp., Class A(a) | 126,555 | |||||||||
9,332 | INTL FCStone, Inc.(a) | 159,764 |
See Notes to Financial Statements.
48
Schedule of Investments (Continued)
PowerShares FTSE RAFI US 1500 Small-Mid Portfolio (PRFZ)
April 30, 2013
Number of Shares | Value | ||||||||||
Common Stocks and Other Equity Interests (Continued) | |||||||||||
55,774 | Investment Technology Group, Inc.(a) | $ | 607,379 | ||||||||
16,410 | Investors Bancorp, Inc.(b) | 324,918 | |||||||||
61,163 | Investors Real Estate Trust REIT | 595,116 | |||||||||
3,923 | Kansas City Life Insurance Co.(b) | 141,620 | |||||||||
5,942 | Kennedy-Wilson Holdings, Inc. | 98,815 | |||||||||
42,025 | Kite Realty Group Trust REIT | 277,365 | |||||||||
144,393 | Knight Capital Group, Inc., Class A(a) | 511,151 | |||||||||
17,577 | Lakeland Bancorp, Inc. | 168,036 | |||||||||
9,322 | Lakeland Financial Corp. | 249,830 | |||||||||
26,590 | LPL Financial Holdings, Inc. | 918,950 | |||||||||
8,999 | LTC Properties, Inc. REIT | 418,454 | |||||||||
41,584 | Maiden Holdings Ltd. (Bermuda) | 429,563 | |||||||||
14,381 | MainSource Financial Group, Inc. | 182,207 | |||||||||
9,741 | Manning & Napier, Inc. | 170,565 | |||||||||
4,472 | MarketAxess Holdings, Inc. | 189,255 | |||||||||
26,416 | MB Financial, Inc. | 654,060 | |||||||||
44,078 | MBIA, Inc.(a) | 416,978 | |||||||||
58,560 | Meadowbrook Insurance Group, Inc. | 455,597 | |||||||||
40,803 | Medical Properties Trust, Inc. REIT | 656,520 | |||||||||
6,182 | Mercantile Bank Corp. | 103,301 | |||||||||
8,080 | Metro Bancorp, Inc.(a) | 143,420 | |||||||||
257,660 | MGIC Investment Corp.(a) | 1,391,364 | |||||||||
4,510 | MidWestOne Financial Group, Inc. | 107,789 | |||||||||
20,638 | Mission West Properties, Inc. REIT(a)(c) | — | |||||||||
13,634 | Monmouth Real Estate Investment Corp., Class A REIT | 145,066 | |||||||||
31,602 | Montpelier Re Holdings Ltd. (Bermuda) | 814,068 | |||||||||
55,679 | MPG Office Trust, Inc. REIT(a)(b) | 173,719 | |||||||||
3,647 | National Bankshares, Inc. | 119,439 | |||||||||
28,366 | National Financial Partners Corp.(a) | 718,794 | |||||||||
4,543 | National Health Investors, Inc. REIT | 300,928 | |||||||||
2,996 | National Interstate Corp. | 87,034 | |||||||||
65,868 | National Penn Bancshares, Inc. | 644,848 | |||||||||
2,207 | National Western Life Insurance Co., Class A | 403,042 | |||||||||
8,671 | Navigators Group, Inc. (The)(a) | 501,878 | |||||||||
24,444 | NBT Bancorp, Inc. | 494,991 | |||||||||
11,524 | Nelnet, Inc., Class A | 391,816 | |||||||||
48,156 | Newcastle Investment Corp. REIT | 545,607 | |||||||||
17,390 | NewStar Financial, Inc.(a) | 207,811 | |||||||||
6,625 | Nicholas Financial, Inc. (Canada) | 96,858 | |||||||||
4,555 | Northrim Bancorp, Inc. | 99,208 | |||||||||
86,443 | NorthStar Realty Finance Corp. REIT | 861,837 | |||||||||
61,353 | Northwest Bancshares, Inc. | 751,574 | |||||||||
7,561 | OceanFirst Financial Corp. | 107,442 | |||||||||
22,034 | Ocwen Financial Corp.(a) | 806,004 | |||||||||
21,863 | OFG Bancorp | 351,338 | |||||||||
62,238 | Old National Bancorp | 758,059 | |||||||||
33,073 | OMEGA Healthcare Investors, Inc. REIT(b) | 1,087,110 | |||||||||
4,274 | OmniAmerican Bancorp, Inc.(a) | 106,423 | |||||||||
6,690 | One Liberty Properties, Inc. REIT | 153,469 |
Number of Shares | Value | ||||||||||
Common Stocks and Other Equity Interests (Continued) | |||||||||||
41,522 | OneBeacon Insurance Group Ltd., Class A | $ | 564,284 | ||||||||
17,502 | Oppenheimer Holdings, Inc., Class A | 323,787 | |||||||||
18,438 | Oritani Financial Corp. | 285,236 | |||||||||
6,437 | Orrstown Financial Services, Inc.(a) | 95,525 | |||||||||
10,289 | Pacific Continental Corp. | 115,031 | |||||||||
14,597 | PacWest Bancorp | 404,775 | |||||||||
10,791 | Park National Corp.(b) | 737,889 | |||||||||
11,789 | Parkway Properties, Inc. REIT | 214,913 | |||||||||
19,283 | Pebblebrook Hotel Trust REIT | 523,726 | |||||||||
2,437 | Penns Woods Bancorp, Inc. | 99,722 | |||||||||
40,082 | Pennsylvania Real Estate Investment Trust REIT | 830,900 | |||||||||
16,395 | PennyMac Mortgage Investment Trust REIT | 413,974 | |||||||||
7,439 | Peoples Bancorp, Inc. | 151,607 | |||||||||
23,995 | Phoenix Cos., Inc. (The)(a) | 698,494 | |||||||||
10,047 | PICO Holdings, Inc.(a) | 218,020 | |||||||||
18,029 | Pinnacle Financial Partners, Inc.(a) | 437,564 | |||||||||
11,783 | Piper Jaffray Cos., Inc.(a) | 397,794 | |||||||||
3,157 | Portfolio Recovery Associates, Inc.(a) | 387,522 | |||||||||
17,330 | Post Properties, Inc. REIT | 856,622 | |||||||||
17,984 | Potlatch Corp. REIT | 851,542 | |||||||||
33,861 | PrivateBancorp, Inc. | 649,454 | |||||||||
19,910 | Prosperity Bancshares, Inc. | 914,665 | |||||||||
6,320 | Provident Financial Holdings, Inc. | 102,384 | |||||||||
41,230 | Provident Financial Services, Inc. | 632,056 | |||||||||
28,729 | Provident New York Bancorp | 259,710 | |||||||||
7,008 | PS Business Parks, Inc. REIT | 559,238 | |||||||||
65,457 | Radian Group, Inc. | 782,211 | |||||||||
92,178 | RAIT Financial Trust REIT | 787,200 | |||||||||
21,911 | Ramco-Gershenson Properties Trust REIT | 382,785 | |||||||||
8,772 | Realogy Holdings Corp.(a) | 421,056 | |||||||||
16,492 | Renasant Corp. | 376,347 | |||||||||
15,612 | Republic Bancorp, Inc., Class A | 346,586 | |||||||||
12,820 | Resource America, Inc., Class A | 118,200 | |||||||||
69,911 | Resource Capital Corp. REIT | 460,714 | |||||||||
15,355 | Retail Opportunity Investments Corp. REIT | 227,408 | |||||||||
50,800 | Retail Properties of America, Inc., Class A REIT | 777,748 | |||||||||
13,710 | RLI Corp. | 985,064 | |||||||||
13,118 | Rockville Financial, Inc. | 170,534 | |||||||||
5,682 | Rouse Properties, Inc. REIT | 107,674 | |||||||||
18,738 | Ryman Hospitality Properties, Inc. REIT(b) | 833,091 | |||||||||
23,235 | S&T Bancorp, Inc. | 438,444 | |||||||||
7,010 | S.Y. Bancorp, Inc. | 160,950 | |||||||||
23,059 | Sabra Health Care REIT, Inc. REIT | 687,619 | |||||||||
9,366 | Safeguard Scientifics, Inc.(a) | 151,167 | |||||||||
13,166 | Safety Insurance Group, Inc. | 653,955 | |||||||||
15,286 | Sandy Spring Bancorp, Inc. | 313,057 | |||||||||
5,674 | Saul Centers, Inc. REIT | 254,195 | |||||||||
5,280 | SCBT Financial Corp. | 252,226 |
See Notes to Financial Statements.
49
Schedule of Investments (Continued)
PowerShares FTSE RAFI US 1500 Small-Mid Portfolio (PRFZ)
April 30, 2013
Number of Shares | Value | ||||||||||
Common Stocks and Other Equity Interests (Continued) | |||||||||||
48,809 | Seacoast Banking Corp. of Florida(a) | $ | 104,451 | ||||||||
5,416 | Select Income REIT REIT(a) | 154,518 | |||||||||
9,319 | Sierra Bancorp | 120,401 | |||||||||
10,578 | Simmons First National Corp., Class A | 259,373 | |||||||||
12,632 | Southside Bancshares, Inc. | 270,072 | |||||||||
12,817 | Southwest Bancorp, Inc.(a) | 169,441 | |||||||||
11,198 | Sovran Self Storage, Inc. REIT | 768,183 | |||||||||
10,063 | Spirit Realty Capital, Inc. REIT | 216,656 | |||||||||
11,510 | St. Joe Co. (The)(a)(b) | 225,251 | |||||||||
4,253 | STAG Industrial, Inc. REIT | 93,736 | |||||||||
15,541 | State Auto Financial Corp. | 270,103 | |||||||||
18,985 | State Bank Financial Corp. | 279,269 | |||||||||
15,704 | StellarOne Corp. | 235,403 | |||||||||
17,952 | Sterling Bancorp | 202,499 | |||||||||
14,327 | Sterling Financial Corp. | 312,329 | |||||||||
13,420 | Stewart Information Services Corp. | 363,279 | |||||||||
24,596 | Stifel Financial Corp.(a) | 792,483 | |||||||||
50,673 | Strategic Hotels & Resorts, Inc. REIT(a) | 408,931 | |||||||||
10,196 | Suffolk Bancorp(a) | 159,465 | |||||||||
20,190 | Summit Hotel Properties, Inc. REIT | 201,698 | |||||||||
9,797 | Sun Communities, Inc. REIT | 501,117 | |||||||||
63,165 | Sunstone Hotel Investors, Inc. REIT(a) | 783,878 | |||||||||
48,985 | SWS Group, Inc.(a) | 278,725 | |||||||||
20,879 | Tanger Factory Outlet Centers, Inc. REIT | 775,028 | |||||||||
6,511 | Taylor Capital Group, Inc.(a) | 95,386 | |||||||||
3,086 | Tejon Ranch Co.(a) | 90,049 | |||||||||
4,491 | Territorial Bancorp, Inc. | 105,000 | |||||||||
11,147 | Texas Capital Bancshares, Inc.(a) | 464,384 | |||||||||
25,325 | TFS Financial Corp.(a) | 275,283 | |||||||||
4,849 | Tompkins Financial Corp. | 202,688 | |||||||||
47,407 | Tower Group International Ltd. (Bermuda) | 896,940 | |||||||||
19,579 | TowneBank | 280,176 | |||||||||
11,937 | TriCo Bancshares | 208,539 | |||||||||
77,154 | TrustCo Bank Corp. NY | 413,545 | |||||||||
41,467 | Trustmark Corp. | 1,018,015 | |||||||||
44,670 | Two Harbors Investment Corp. REIT | 535,147 | |||||||||
13,377 | UMB Financial Corp. | 673,398 | |||||||||
75,040 | Umpqua Holdings Corp. | 900,480 | |||||||||
15,200 | Union First Market Bankshares Corp. | 287,432 | |||||||||
30,539 | United Bankshares, Inc.(b) | 772,942 | |||||||||
19,164 | United Community Banks, Inc.(a) | 209,846 | |||||||||
8,644 | United Financial Bancorp, Inc. | 128,018 | |||||||||
15,816 | United Fire Group, Inc. | 442,215 | |||||||||
2,506 | Universal Health Realty Income Trust REIT | 134,647 | |||||||||
29,886 | Universal Insurance Holdings, Inc. | 178,718 | |||||||||
14,463 | Univest Corp. of Pennsylvania | 253,536 | |||||||||
1,381 | Urstadt Biddle Properties, Inc. REIT | 26,971 | |||||||||
9,822 | Urstadt Biddle Properties, Inc., Class A REIT | 218,736 | |||||||||
9,708 | ViewPoint Financial Group, Inc. | 180,763 | |||||||||
14,635 | Virginia Commerce Bancorp, Inc.(a) | 196,694 |
Number of Shares | Value | ||||||||||
Common Stocks and Other Equity Interests (Continued) | |||||||||||
782 | Virtus Investment Partners, Inc.(a) | $ | 149,362 | ||||||||
4,588 | Walker & Dunlop, Inc.(a) | 81,712 | |||||||||
6,838 | Walter Investment Management Corp.(a) | 229,483 | |||||||||
8,234 | Washington Banking Co. | 113,629 | |||||||||
8,391 | Washington Trust Bancorp, Inc. | 224,459 | |||||||||
20,884 | WesBanco, Inc. | 522,727 | |||||||||
10,837 | West Bancorporation, Inc. | 116,823 | |||||||||
14,676 | Westamerica Bancorp.(b) | 636,792 | |||||||||
26,313 | Western Alliance Bancorp(a) | 387,064 | |||||||||
23,070 | Westfield Financial, Inc. | 173,717 | |||||||||
3,153 | Westwood Holdings Group, Inc. | 137,786 | |||||||||
32,532 | Wilshire Bancorp, Inc.(a) | 207,879 | |||||||||
17,448 | Winthrop Realty Trust REIT | 221,764 | |||||||||
19,394 | Wintrust Financial Corp. | 695,469 | |||||||||
6,053 | World Acceptance Corp.(a)(b) | 537,870 | |||||||||
3,937 | WSFS Financial Corp. | 192,677 | |||||||||
121,396,910 | |||||||||||
Health Care—7.3% | |||||||||||
3,109 | Abaxis, Inc. | 132,723 | |||||||||
26,027 | Accuray, Inc.(a)(b) | 114,519 | |||||||||
3,574 | Acorda Therapeutics, Inc.(a) | 141,423 | |||||||||
52,499 | Affymetrix, Inc.(a)(b) | 191,096 | |||||||||
7,504 | Air Methods Corp. | 274,571 | |||||||||
12,972 | Albany Molecular Research, Inc.(a) | 154,756 | |||||||||
8,043 | Alexion Pharmaceuticals, Inc.(a) | 788,214 | |||||||||
9,399 | Align Technology, Inc.(a) | 311,295 | |||||||||
9,138 | Alkermes PLC (Ireland)(a) | 279,714 | |||||||||
69,734 | Allscripts Healthcare Solutions, Inc.(a) | 965,119 | |||||||||
8,278 | Almost Family, Inc. | 163,408 | |||||||||
73,817 | Amedisys, Inc.(a) | 741,123 | |||||||||
25,552 | AMN Healthcare Services, Inc.(a) | 350,829 | |||||||||
24,571 | AmSurg Corp.(a) | 824,603 | |||||||||
3,775 | Analogic Corp. | 300,037 | |||||||||
17,656 | AngioDynamics, Inc.(a) | 178,855 | |||||||||
8,242 | ArthroCare Corp.(a) | 285,585 | |||||||||
15,346 | Assisted Living Concepts, Inc., Class A | 182,924 | |||||||||
30,573 | Astex Pharmaceuticals(a) | 210,342 | |||||||||
1,878 | athenahealth, Inc.(a) | 180,776 | |||||||||
587 | Atrion Corp. | 117,629 | |||||||||
13,555 | Aveo Pharmaceuticals, Inc.(a) | 69,266 | |||||||||
6,245 | BioMarin Pharmaceutical, Inc.(a) | 409,672 | |||||||||
9,452 | Bio-Reference Labs, Inc.(a)(b) | 241,026 | |||||||||
31,595 | BioScrip, Inc.(a) | 437,907 | |||||||||
19,009 | Bruker Corp.(a) | 337,790 | |||||||||
51,469 | Cambrex Corp.(a) | 642,848 | |||||||||
3,756 | Cantel Medical Corp. | 118,727 | |||||||||
6,875 | Capital Senior Living Corp.(a) | 166,787 | |||||||||
3,603 | Cepheid, Inc.(a) | 137,382 | |||||||||
23,534 | Charles River Laboratories International, Inc.(a) | 1,023,494 |
See Notes to Financial Statements.
50
Schedule of Investments (Continued)
PowerShares FTSE RAFI US 1500 Small-Mid Portfolio (PRFZ)
April 30, 2013
Number of Shares | Value | ||||||||||
Common Stocks and Other Equity Interests (Continued) | |||||||||||
6,676 | Chemed Corp. | $ | 544,895 | ||||||||
3,663 | Computer Programs & Systems, Inc. | 192,161 | |||||||||
16,747 | CONMED Corp. | 524,684 | |||||||||
8,523 | Cooper Cos., Inc. (The) | 940,939 | |||||||||
2,733 | CorVel Corp.(a) | 129,736 | |||||||||
51,450 | Cross Country Healthcare, Inc.(a) | 257,250 | |||||||||
16,439 | CryoLife, Inc. | 98,634 | |||||||||
16,233 | Cubist Pharmaceuticals, Inc.(a) | 745,419 | |||||||||
3,509 | Cyberonics, Inc.(a) | 152,361 | |||||||||
26,851 | Dendreon Corp.(a)(b) | 126,468 | |||||||||
10,977 | Emergent Biosolutions, Inc.(a) | 168,387 | |||||||||
14,598 | Emeritus Corp.(a) | 375,169 | |||||||||
7,900 | Ensign Group, Inc. (The) | 275,473 | |||||||||
26,274 | Enzon Pharmaceuticals, Inc. | 86,704 | |||||||||
9,096 | ExamWorks Group, Inc.(a) | 164,638 | |||||||||
71,957 | Five Star Quality Care, Inc.(a) | 340,357 | |||||||||
53,287 | Gentiva Health Services, Inc.(a) | 558,981 | |||||||||
16,707 | Greatbatch, Inc.(a) | 466,794 | |||||||||
15,929 | Haemonetics Corp.(a) | 613,266 | |||||||||
11,910 | Hanger, Inc.(a) | 361,945 | |||||||||
32,758 | Healthways, Inc.(a) | 455,009 | |||||||||
3,475 | Hi-Tech Pharmacal Co., Inc. | 114,884 | |||||||||
11,014 | HMS Holdings Corp.(a) | 277,663 | |||||||||
3,268 | ICU Medical, Inc.(a) | 196,897 | |||||||||
9,245 | IDEXX Laboratories, Inc.(a) | 813,190 | |||||||||
17,975 | Illumina, Inc.(a) | 1,162,803 | |||||||||
32,268 | Impax Laboratories, Inc.(a) | 564,690 | |||||||||
8,016 | Integra LifeSciences Holdings Corp.(a) | 280,800 | |||||||||
11,162 | InterMune, Inc.(a) | 104,141 | |||||||||
43,137 | Invacare Corp. | 580,193 | |||||||||
5,114 | IPC The Hospitalist Co., Inc.(a) | 233,301 | |||||||||
3,847 | Landauer, Inc. | 214,932 | |||||||||
10,267 | LHC Group, Inc.(a) | 222,999 | |||||||||
8,439 | Luminex Corp.(a) | 140,341 | |||||||||
19,542 | Masimo Corp. | 392,013 | |||||||||
15,496 | MedAssets, Inc.(a) | 290,240 | |||||||||
30,506 | Medical Action Industries, Inc.(a) | 248,014 | |||||||||
10,073 | Medicines Co. (The)(a) | 340,064 | |||||||||
14,438 | Meridian Bioscience, Inc. | 292,947 | |||||||||
22,069 | Merit Medical Systems, Inc.(a) | 213,407 | |||||||||
29,776 | Molina Healthcare, Inc.(a) | 988,563 | |||||||||
14,798 | Momenta Pharmaceuticals, Inc.(a) | 182,311 | |||||||||
3,219 | MWI Veterinary Supply, Inc.(a) | 378,908 | |||||||||
15,111 | Myriad Genetics, Inc.(a) | 420,841 | |||||||||
6,454 | National Healthcare Corp. | 299,659 | |||||||||
14,447 | Natus Medical, Inc.(a) | 180,732 | |||||||||
11,846 | Nektar Therapeutics(a) | 128,411 | |||||||||
3,641 | Neogen Corp.(a) | 185,072 | |||||||||
18,393 | NuVasive, Inc.(a) | 385,701 | |||||||||
11,112 | Omnicell, Inc.(a) | 200,238 | |||||||||
4,769 | Onyx Pharmaceuticals, Inc.(a) | 452,101 |
Number of Shares | Value | ||||||||||
Common Stocks and Other Equity Interests (Continued) | |||||||||||
9,339 | Orthofix International NV (Curacao)(a) | $ | 302,584 | ||||||||
21,478 | PAREXEL International Corp.(a) | 879,524 | |||||||||
124,892 | PDL BioPharma, Inc.(b) | 966,664 | |||||||||
52,652 | PharMerica Corp.(a) | 678,684 | |||||||||
17,610 | Providence Service Corp. (The)(a) | 308,351 | |||||||||
17,863 | QLT, Inc. (Canada)(a)(b) | 143,440 | |||||||||
15,930 | Quality Systems, Inc. | 284,669 | |||||||||
5,771 | Questcor Pharmaceuticals, Inc.(b) | 177,401 | |||||||||
5,134 | Quidel Corp.(a) | 114,591 | |||||||||
34,750 | RadNet, Inc.(a) | 95,215 | |||||||||
1,165 | Regeneron Pharmaceuticals, Inc.(a) | 250,638 | |||||||||
14,603 | Rigel Pharmaceuticals, Inc.(a) | 69,948 | |||||||||
33,895 | RTI Biologics, Inc.(a) | 134,902 | |||||||||
6,964 | Salix Pharmaceuticals Ltd.(a) | 364,148 | |||||||||
44,793 | Select Medical Holdings Corp. | 369,542 | |||||||||
9,821 | Sirona Dental Systems, Inc.(a) | 722,236 | |||||||||
39,857 | Skilled Healthcare Group, Inc., Class A(a) | 280,593 | |||||||||
7,853 | Spectrum Pharmaceuticals, Inc.(b) | 58,191 | |||||||||
5,000 | SurModics, Inc.(a) | 132,250 | |||||||||
27,167 | Symmetry Medical, Inc.(a) | 323,831 | |||||||||
9,770 | Syneron Medical Ltd. (Israel)(a) | 87,246 | |||||||||
15,443 | Team Health Holdings, Inc.(a) | 575,715 | |||||||||
7,093 | Techne Corp. | 454,945 | |||||||||
10,366 | Thoratec Corp.(a) | 375,249 | |||||||||
26,054 | Triple-S Management Corp., Class B(a) | 469,754 | |||||||||
10,830 | United Therapeutics Corp.(a) | 723,227 | |||||||||
4,639 | US Physical Therapy, Inc. | 110,687 | |||||||||
37,804 | Vanguard Health Systems, Inc.(a) | 553,073 | |||||||||
8,796 | Vertex Pharmaceuticals, Inc.(a) | 675,709 | |||||||||
23,403 | ViroPharma, Inc.(a) | 637,732 | |||||||||
11,728 | Volcano Corp.(a) | 237,961 | |||||||||
12,805 | West Pharmaceutical Services, Inc. | 817,727 | |||||||||
17,148 | Wright Medical Group, Inc.(a) | 401,949 | |||||||||
41,318,142 | |||||||||||
Industrials—16.6% | |||||||||||
11,744 | A.O. Smith Corp. | 885,850 | |||||||||
5,701 | AAON, Inc. | 161,965 | |||||||||
44,892 | AAR Corp. | 801,771 | |||||||||
6,026 | Acacia Research Corp.(a) | 143,539 | |||||||||
64,475 | ACCO Brands Corp.(a) | 435,206 | |||||||||
95,932 | Accuride Corp.(a) | 493,090 | |||||||||
16,522 | Aceto Corp. | 171,829 | |||||||||
25,318 | Actuant Corp., Class A | 792,453 | |||||||||
4,219 | Advisory Board Co. (The)(a) | 207,364 | |||||||||
82,674 | Aegean Marine Petroleum Network, Inc. (Greece) | 487,777 | |||||||||
21,115 | Aegion Corp.(a) | 444,682 | |||||||||
7,379 | Aerovironment, Inc.(a) | 142,857 | |||||||||
30,101 | Air Lease Corp. | 828,079 | |||||||||
88,159 | Air Transport Services Group, Inc.(a) | 508,677 |
See Notes to Financial Statements.
51
Schedule of Investments (Continued)
PowerShares FTSE RAFI US 1500 Small-Mid Portfolio (PRFZ)
April 30, 2013
Number of Shares | Value | ||||||||||
Common Stocks and Other Equity Interests (Continued) | |||||||||||
5,134 | Alamo Group, Inc. | $ | 205,719 | ||||||||
13,690 | Albany International Corp., Class A | 397,694 | |||||||||
4,529 | Allegiant Travel Co. | 407,157 | |||||||||
13,116 | Altra Holdings, Inc. | 349,541 | |||||||||
5,199 | AMERCO | 835,479 | |||||||||
16,293 | Ameresco, Inc., Class A(a) | 120,079 | |||||||||
2,604 | American Railcar Industries, Inc. | 92,989 | |||||||||
3,851 | American Science & Engineering, Inc. | 248,312 | |||||||||
3,648 | American Woodmark Corp.(a) | 122,755 | |||||||||
9,723 | Ampco-Pittsburgh Corp. | 182,209 | |||||||||
40,397 | API Technologies Corp.(a) | 111,496 | |||||||||
12,198 | Apogee Enterprises, Inc. | 310,805 | |||||||||
17,639 | Applied Industrial Technologies, Inc. | 745,248 | |||||||||
112,701 | ARC Document Solutions, Inc.(a) | 361,770 | |||||||||
47,642 | Arkansas Best Corp. | 500,717 | |||||||||
11,996 | Astec Industries, Inc. | 393,829 | |||||||||
19,850 | Atlas Air Worldwide Holdings, Inc.(a) | 742,390 | |||||||||
6,567 | AZZ, Inc. | 277,718 | |||||||||
35,472 | Baltic Trading Ltd. (Marshall Islands) | 123,088 | |||||||||
16,946 | Barnes Group, Inc. | 470,590 | |||||||||
2,581 | Barrett Business Services, Inc. | 136,638 | |||||||||
21,674 | Beacon Roofing Supply, Inc.(a) | 826,430 | |||||||||
15,009 | Belden, Inc. | 741,745 | |||||||||
19,461 | Blount International, Inc.(a) | 270,313 | |||||||||
53,011 | BlueLinx Holdings, Inc.(a) | 154,262 | |||||||||
27,475 | Brady Corp., Class A | 930,853 | |||||||||
18,259 | Builders FirstSource, Inc.(a) | 113,023 | |||||||||
3,556 | CAI International, Inc.(a) | 90,642 | |||||||||
60,544 | Casella Waste Systems, Inc., Class A(a) | 263,972 | |||||||||
52,804 | CBIZ, Inc.(a) | 342,698 | |||||||||
14,134 | CDI Corp. | 221,480 | |||||||||
14,649 | Celadon Group, Inc. | 245,957 | |||||||||
345,224 | Cenveo, Inc.(a)(b) | 704,257 | |||||||||
8,170 | Chart Industries, Inc.(a) | 692,898 | |||||||||
72,708 | China Ceramics Co. Ltd. (British Virgin Islands)(a)(b) | 155,595 | |||||||||
40,670 | China Yuchai International Ltd. (Bermuda) | 580,768 | |||||||||
8,549 | CIRCOR International, Inc. | 404,624 | |||||||||
14,097 | CLARCOR, Inc. | 728,815 | |||||||||
17,789 | Clean Harbors, Inc.(a) | 1,013,439 | |||||||||
12,840 | Coleman Cable, Inc. | 192,600 | |||||||||
6,306 | Colfax Corp.(a) | 294,301 | |||||||||
14,836 | Columbus McKinnon Corp.(a) | 278,620 | |||||||||
33,870 | Comfort Systems USA, Inc. | 434,552 | |||||||||
27,745 | Commercial Vehicle Group, Inc.(a) | 194,492 | |||||||||
13,020 | Consolidated Graphics, Inc.(a) | 464,423 | |||||||||
20,365 | Copart, Inc.(a) | 717,866 | |||||||||
9,334 | Corporate Executive Board Co. (The) | 526,064 | |||||||||
9,767 | Costamare, Inc. (Marshall Islands)(b) | 156,663 | |||||||||
17,343 | Courier Corp. | 249,739 | |||||||||
16,641 | Covenant Transport Group, Inc., Class A(a) | 92,358 |
Number of Shares | Value | ||||||||||
Common Stocks and Other Equity Interests (Continued) | |||||||||||
10,822 | CRA International, Inc.(a) | $ | 199,558 | ||||||||
7,291 | Cubic Corp. | 313,294 | |||||||||
99,412 | Diana Shipping, Inc. (Greece)(a)(b) | 943,420 | |||||||||
14,796 | DigitalGlobe, Inc.(a) | 431,895 | |||||||||
84,639 | Dolan Co. (The)(a) | 146,425 | |||||||||
15,430 | Douglas Dynamics, Inc. | 215,866 | |||||||||
13,132 | Ducommun, Inc.(a) | 321,603 | |||||||||
3,029 | DXP Enterprises, Inc.(a) | 202,580 | |||||||||
28,564 | Dycom Industries, Inc.(a) | 551,856 | |||||||||
7,007 | Dynamic Materials Corp. | 111,271 | |||||||||
262,884 | Eagle Bulk Shipping, Inc. (Marshall Islands)(a)(b) | 925,352 | |||||||||
4,788 | Echo Global Logistics, Inc.(a) | 83,072 | |||||||||
23,673 | Edgen Group, Inc.(a) | 162,160 | |||||||||
12,378 | Encore Wire Corp. | 405,380 | |||||||||
130,940 | EnergySolutions, Inc.(a) | 540,782 | |||||||||
6,473 | EnerNOC, Inc.(a) | 113,407 | |||||||||
26,585 | Ennis, Inc. | 408,611 | |||||||||
12,257 | EnPro Industries, Inc.(a) | 604,025 | |||||||||
10,711 | ESCO Technologies, Inc. | 385,275 | |||||||||
667,572 | Excel Maritime Carriers Ltd. (Liberia)(a) | 273,705 | |||||||||
3,988 | Exponent, Inc. | 210,168 | |||||||||
42,376 | Federal Signal Corp.(a) | 328,838 | |||||||||
28,825 | Flow International Corp.(a) | 105,500 | |||||||||
6,747 | Forward Air Corp. | 248,897 | |||||||||
7,531 | Franklin Covey Co.(a) | 106,036 | |||||||||
7,632 | Franklin Electric Co., Inc. | 247,048 | |||||||||
8,137 | FreightCar America, Inc. | 169,901 | |||||||||
26,336 | Furmanite Corp.(a) | 167,234 | |||||||||
12,024 | G&K Services, Inc., Class A | 565,008 | |||||||||
315,817 | Genco Shipping & Trading Ltd.(a)(b) | 540,047 | |||||||||
23,973 | GenCorp, Inc.(a)(b) | 313,327 | |||||||||
10,581 | Generac Holdings, Inc. | 380,175 | |||||||||
7,329 | Genesee & Wyoming, Inc., Class A(a) | 624,431 | |||||||||
17,833 | Gibraltar Industries, Inc.(a) | 333,477 | |||||||||
17,071 | Global Power Equipment Group, Inc. | 281,672 | |||||||||
7,829 | Gorman-Rupp Co. (The) | 221,169 | |||||||||
6,272 | GP Strategies Corp.(a) | 138,298 | |||||||||
13,527 | Graco, Inc. | 818,789 | |||||||||
25,333 | Granite Construction, Inc. | 700,964 | |||||||||
29,830 | Great Lakes Dredge & Dock Corp. | 206,424 | |||||||||
22,095 | Greenbrier Cos., Inc.(a) | 498,463 | |||||||||
48,992 | Griffon Corp. | 504,618 | |||||||||
23,059 | H&E Equipment Services, Inc. | 469,481 | |||||||||
9,037 | Hardinge, Inc. | 122,000 | |||||||||
109,313 | Hawaiian Holdings, Inc.(a)(b) | 600,128 | |||||||||
20,313 | Healthcare Services Group, Inc. | 452,777 | |||||||||
36,479 | Heartland Express, Inc. | 495,020 | |||||||||
3,332 | HEICO Corp. | 146,641 | |||||||||
6,820 | HEICO Corp., Class A | 230,652 | |||||||||
19,586 | Heidrick & Struggles International, Inc. | 258,927 |
See Notes to Financial Statements.
52
Schedule of Investments (Continued)
PowerShares FTSE RAFI US 1500 Small-Mid Portfolio (PRFZ)
April 30, 2013
Number of Shares | Value | ||||||||||
Common Stocks and Other Equity Interests (Continued) | |||||||||||
27,849 | Herman Miller, Inc. | $ | 698,731 | ||||||||
33,949 | Hexcel Corp.(a) | 1,035,445 | |||||||||
35,047 | Hill International, Inc.(a) | 96,379 | |||||||||
30,160 | HNI Corp. | 1,038,409 | |||||||||
11,954 | Houston Wire & Cable Co. | 162,813 | |||||||||
21,467 | Hub Group, Inc., Class A(a) | 786,766 | |||||||||
35,352 | Hudson Global, Inc.(a) | 116,662 | |||||||||
3,303 | Hurco Cos., Inc.(a) | 88,619 | |||||||||
11,726 | Huron Consulting Group, Inc.(a) | 489,912 | |||||||||
3,136 | Hyster-Yale Materials Handling, Inc. | 163,668 | |||||||||
12,007 | ICF International, Inc.(a) | 325,510 | |||||||||
23,972 | II-VI, Inc.(a) | 370,847 | |||||||||
9,017 | InnerWorkings, Inc.(a) | 90,801 | |||||||||
15,633 | Insperity, Inc. | 431,940 | |||||||||
10,214 | Insteel Industries, Inc. | 169,348 | |||||||||
24,639 | Interface, Inc. | 412,457 | |||||||||
13,392 | International Shipholding Corp. | 241,860 | |||||||||
9,481 | Intersections, Inc. | 90,638 | |||||||||
19,192 | John Bean Technologies Corp. | 398,042 | |||||||||
8,804 | Kadant, Inc. | 243,607 | |||||||||
16,206 | Kaman Corp. | 547,601 | |||||||||
33,294 | KAR Auction Services, Inc. | 744,787 | |||||||||
23,295 | Kaydon Corp. | 555,353 | |||||||||
22,475 | Kforce, Inc. | 339,822 | |||||||||
41,085 | Kimball International, Inc., Class B | 377,571 | |||||||||
28,359 | Knight Transportation, Inc. | 442,968 | |||||||||
25,198 | Knoll, Inc. | 392,081 | |||||||||
25,064 | Korn/Ferry International(a) | 414,809 | |||||||||
57,080 | Kratos Defense & Security Solutions, Inc.(a) | 290,537 | |||||||||
14,901 | Landstar System, Inc. | 814,489 | |||||||||
26,261 | Layne Christensen Co.(a) | 536,512 | |||||||||
4,529 | LB Foster Co., Class A | 199,955 | |||||||||
2,587 | Lindsay Corp. | 198,733 | |||||||||
5,854 | LMI Aerospace, Inc.(a) | 125,217 | |||||||||
26,691 | LSI Industries, Inc. | 187,905 | |||||||||
11,435 | Lydall, Inc.(a) | 163,978 | |||||||||
16,038 | Macquarie Infrastructure Co. LLC | 934,695 | |||||||||
9,438 | Marten Transport Ltd. | 192,252 | |||||||||
20,792 | MasTec, Inc.(a) | 578,018 | |||||||||
12,771 | McGrath RentCorp | 396,667 | |||||||||
134,721 | Metalico, Inc.(a) | 200,734 | |||||||||
23,861 | MFC Industrial Ltd. (Canada) | 193,035 | |||||||||
11,427 | Michael Baker Corp. | 278,247 | |||||||||
3,289 | Middleby Corp. (The)(a) | 491,969 | |||||||||
9,101 | Miller Industries, Inc. | 137,516 | |||||||||
9,719 | Mine Safety Appliances Co. | 466,512 | |||||||||
7,064 | Mistras Group, Inc.(a) | 133,863 | |||||||||
23,035 | Mobile Mini, Inc.(a) | 647,975 | |||||||||
14,837 | Mueller Industries, Inc. | 768,260 | |||||||||
107,184 | Mueller Water Products, Inc., Class A | 634,529 | |||||||||
7,822 | Multi-Color Corp. | 202,277 |
Number of Shares | Value | ||||||||||
Common Stocks and Other Equity Interests (Continued) | |||||||||||
13,558 | MYR Group, Inc.(a) | $ | 309,122 | ||||||||
5,798 | National Presto Industries, Inc.(b) | 434,850 | |||||||||
43,138 | Navigant Consulting, Inc.(a) | 531,892 | |||||||||
167,523 | Navios Maritime Holdings, Inc. (Greece)(b) | 758,879 | |||||||||
24,815 | NCI Building Systems, Inc.(a) | 424,833 | |||||||||
13,445 | NN, Inc.(a) | 121,139 | |||||||||
8,321 | Nordson Corp. | 578,226 | |||||||||
8,075 | Nortek, Inc.(a) | 580,270 | |||||||||
10,380 | Northwest Pipe Co.(a) | 283,270 | |||||||||
11,510 | On Assignment, Inc.(a) | 279,348 | |||||||||
48,071 | Orbital Sciences Corp.(a) | 866,239 | |||||||||
22,978 | Orion Marine Group, Inc.(a) | 210,478 | |||||||||
86,606 | Pacer International, Inc.(a) | 492,788 | |||||||||
50,368 | Paragon Shipping, Inc., Class A (Marshall Islands)(a) | 226,656 | |||||||||
10,961 | Park-Ohio Holdings Corp.(a) | 403,146 | |||||||||
11,422 | Pike Electric Corp. | 178,526 | |||||||||
14,392 | Polypore International, Inc.(a)(b) | 603,457 | |||||||||
3,232 | Powell Industries, Inc.(a) | 159,144 | |||||||||
10,515 | Primoris Services Corp. | 231,751 | |||||||||
28,927 | Quality Distribution, Inc.(a) | 230,259 | |||||||||
21,751 | Quanex Building Products Corp. | 353,889 | |||||||||
11,435 | Raven Industries, Inc. | 383,644 | |||||||||
6,346 | RBC Bearings, Inc.(a) | 305,243 | |||||||||
29,240 | Resources Connection, Inc. | 332,166 | |||||||||
13,739 | Rexnord Corp.(a) | 250,325 | |||||||||
5,751 | Roadrunner Transportation Systems, Inc.(a) | 129,455 | |||||||||
14,538 | Rollins, Inc. | 353,564 | |||||||||
25,870 | Rush Enterprises, Inc., Class A(a) | 592,164 | |||||||||
5,128 | Rush Enterprises, Inc., Class B(a) | 101,534 | |||||||||
46,333 | Safe Bulkers, Inc. (Marshall Islands)(b) | 232,592 | |||||||||
13,167 | Saia, Inc.(a) | 538,794 | |||||||||
10,493 | Schawk, Inc. | 106,819 | |||||||||
42,210 | Seaspan Corp. (Hong Kong)(b) | 925,665 | |||||||||
21,080 | Sensata Technologies Holding NV (Netherlands)(a) | 705,126 | |||||||||
14,701 | Simpson Manufacturing Co., Inc. | 422,507 | |||||||||
16,660 | Spirit Airlines, Inc.(a) | 444,822 | |||||||||
12,378 | Standard Parking Corp.(a) | 266,003 | |||||||||
5,384 | Standex International Corp. | 284,814 | |||||||||
22,323 | Sterling Construction Co., Inc.(a) | 225,909 | |||||||||
4,120 | Sun Hydraulics Corp. | 134,930 | |||||||||
57,828 | Swift Transportation Co.(a) | 810,749 | |||||||||
13,725 | TAL International Group, Inc. | 568,215 | |||||||||
5,983 | Team, Inc.(a) | 231,901 | |||||||||
29,207 | Tecumseh Products Co., Class A(a) | 259,942 | |||||||||
8,700 | Tecumseh Products Co., Class B(a) | 69,948 | |||||||||
7,211 | Tennant Co. | 344,830 | |||||||||
30,303 | Tetra Tech, Inc.(a) | 796,666 | |||||||||
4,892 | Textainer Group Holdings Ltd.(b) | 189,174 | |||||||||
7,863 | Thermon Group Holdings, Inc.(a) | 154,115 |
See Notes to Financial Statements.
53
Schedule of Investments (Continued)
PowerShares FTSE RAFI US 1500 Small-Mid Portfolio (PRFZ)
April 30, 2013
Number of Shares | Value | ||||||||||
Common Stocks and Other Equity Interests (Continued) | |||||||||||
17,266 | Titan International, Inc. | $ | 385,204 | ||||||||
11,866 | Titan Machinery, Inc.(a)(b) | 267,697 | |||||||||
22,643 | TMS International Corp., Class A(a) | 326,965 | |||||||||
18,101 | Toro Co. (The) | 814,726 | |||||||||
2,891 | Trex Co., Inc.(a) | 140,734 | |||||||||
15,702 | Trimas Corp.(a) | 478,911 | |||||||||
27,989 | TrueBlue, Inc.(a) | 579,932 | |||||||||
5,334 | Twin Disc, Inc. | 113,721 | |||||||||
5,987 | UniFirst Corp. | 545,116 | |||||||||
17,036 | Universal Forest Products, Inc. | 657,590 | |||||||||
4,630 | US Ecology, Inc. | 125,936 | |||||||||
31,615 | USG Corp.(a) | 821,674 | |||||||||
4,559 | Valmont Industries, Inc. | 664,383 | |||||||||
12,519 | Verisk Analytics, Inc., Class A(a) | 767,290 | |||||||||
13,924 | Viad Corp. | 362,720 | |||||||||
6,863 | VSE Corp. | 209,253 | |||||||||
22,766 | Wabash National Corp.(a) | 214,683 | |||||||||
7,486 | Wabtec Corp. | 785,581 | |||||||||
12,242 | Watsco, Inc. | 1,032,980 | |||||||||
12,216 | Watts Water Technologies, Inc., Class A | 574,885 | |||||||||
9,599 | Wesco Aircraft Holdings, Inc.(a) | 158,479 | |||||||||
10,607 | Willis Lease Finance Corp.(a) | 150,513 | |||||||||
23,666 | Woodward, Inc. | 851,739 | |||||||||
63,884 | YRC Worldwide, Inc.(a)(b) | 479,130 | |||||||||
93,521,399 | |||||||||||
Information Technology—16.8% | |||||||||||
3,634 | 3D Systems Corp.(a)(b) | 138,964 | |||||||||
13,076 | Accelrys, Inc.(a) | 128,799 | |||||||||
7,068 | ACI Worldwide, Inc.(a) | 332,267 | |||||||||
21,205 | Active Network, Inc. (The)(a) | 106,661 | |||||||||
17,135 | Actuate Corp.(a) | 105,209 | |||||||||
37,271 | Acxiom Corp.(a) | 741,320 | |||||||||
24,016 | ADTRAN, Inc. | 504,336 | |||||||||
15,939 | Advanced Energy Industries, Inc.(a) | 270,644 | |||||||||
8,518 | Advent Software, Inc.(a) | 247,363 | |||||||||
11,181 | Aeroflex Holding Corp.(a) | 83,187 | |||||||||
15,324 | Agilysys, Inc.(a) | 178,984 | |||||||||
17,620 | Alpha & Omega Semiconductor Ltd.(a) | 127,569 | |||||||||
13,619 | American Software, Inc., Class A | 113,174 | |||||||||
23,875 | Amtech Systems, Inc.(a) | 88,576 | |||||||||
48,908 | ANADIGICS, Inc.(a) | 102,707 | |||||||||
7,921 | Anaren, Inc.(a) | 185,431 | |||||||||
12,289 | Applied Micro Circuits Corp.(a) | 91,676 | |||||||||
51,028 | ARRIS Group, Inc.(a) | 842,472 | |||||||||
6,478 | Aruba Networks, Inc.(a) | 145,690 | |||||||||
33,427 | AsiaInfo-Linkage, Inc.(a) | 383,742 | |||||||||
4,394 | Aspen Technology, Inc.(a) | 133,929 | |||||||||
14,932 | ATMI, Inc.(a) | 324,771 | |||||||||
66,646 | Aviat Networks, Inc.(a) | 213,267 | |||||||||
40,792 | Avid Technology, Inc.(a) | 268,819 |
Number of Shares | Value | ||||||||||
Common Stocks and Other Equity Interests (Continued) | |||||||||||
37,288 | AVX Corp. | $ | 421,727 | ||||||||
134,039 | Axcelis Technologies, Inc.(a) | 174,251 | |||||||||
32,264 | AXT, Inc.(a) | 92,598 | |||||||||
3,766 | Badger Meter, Inc. | 164,499 | |||||||||
16,543 | Bankrate, Inc.(a) | 223,000 | |||||||||
1,802 | Bel Fuse, Inc., Class A | 22,867 | |||||||||
8,088 | Bel Fuse, Inc., Class B | 119,055 | |||||||||
18,470 | Black Box Corp. | 401,168 | |||||||||
11,058 | Blackbaud, Inc. | 324,110 | |||||||||
12,021 | Blucora, Inc.(a) | 177,550 | |||||||||
17,864 | Booz Allen Hamilton Holding Corp. | 271,354 | |||||||||
5,715 | Bottomline Technologies, Inc.(a) | 149,733 | |||||||||
27,896 | Brooks Automation, Inc. | 271,149 | |||||||||
12,734 | Cabot Microelectronics Corp. | 426,716 | |||||||||
47,676 | Cadence Design Systems, Inc.(a) | 657,929 | |||||||||
16,982 | Calix, Inc.(a) | 144,856 | |||||||||
77,973 | Canadian Solar, Inc. (China)(a)(b) | 438,988 | |||||||||
10,340 | Cardtronics, Inc.(a) | 289,623 | |||||||||
2,492 | Cass Information Systems, Inc.(b) | 104,166 | |||||||||
4,738 | Cavium, Inc.(a) | 149,010 | |||||||||
6,603 | CEVA, Inc.(a) | 100,762 | |||||||||
47,273 | Checkpoint Systems, Inc.(a) | 546,949 | |||||||||
31,419 | ChipMOS TECHNOLOGIES Bermuda Ltd. (Bermuda) | 462,802 | |||||||||
93,156 | CIBER, Inc.(a) | 396,845 | |||||||||
18,623 | Ciena Corp.(a) | 278,600 | |||||||||
13,393 | Cirrus Logic, Inc.(a) | 258,619 | |||||||||
8,074 | Cognex Corp. | 320,538 | |||||||||
8,644 | Coherent, Inc. | 483,459 | |||||||||
17,208 | Cohu, Inc. | 164,681 | |||||||||
2,736 | CommVault Systems, Inc.(a) | 201,205 | |||||||||
5,010 | Computer Task Group, Inc. | 102,805 | |||||||||
78,375 | Compuware Corp.(a) | 940,500 | |||||||||
8,024 | comScore, Inc.(a) | 129,748 | |||||||||
17,860 | Comtech Telecommunications Corp. | 439,535 | |||||||||
7,468 | Comverse, Inc.(a) | 198,126 | |||||||||
4,289 | Concur Technologies, Inc.(a)(b) | 313,569 | |||||||||
7,975 | Constant Contact, Inc.(a) | 116,515 | |||||||||
3,178 | CoStar Group, Inc.(a) | 344,527 | |||||||||
7,557 | Cray, Inc.(a) | 159,906 | |||||||||
21,404 | CSG Systems International, Inc.(a) | 462,540 | |||||||||
28,464 | CTS Corp. | 303,142 | |||||||||
5,600 | Cymer, Inc.(a) | 586,656 | |||||||||
23,391 | Cypress Semiconductor Corp.(b) | 236,015 | |||||||||
28,055 | Daktronics, Inc. | 280,269 | |||||||||
10,219 | Datalink Corp.(a) | 114,351 | |||||||||
11,359 | Dealertrack Technologies, Inc.(a) | 316,348 | |||||||||
16,036 | Dice Holdings, Inc.(a) | 135,344 | |||||||||
18,652 | Digi International, Inc.(a) | 170,106 | |||||||||
27,687 | Digital River, Inc.(a) | 400,908 | |||||||||
18,531 | Diodes, Inc.(a) | 375,438 |
See Notes to Financial Statements.
54
Schedule of Investments (Continued)
PowerShares FTSE RAFI US 1500 Small-Mid Portfolio (PRFZ)
April 30, 2013
Number of Shares | Value | ||||||||||
Common Stocks and Other Equity Interests (Continued) | |||||||||||
19,968 | Dolby Laboratories, Inc., Class A(b) | $ | 655,949 | ||||||||
21,867 | DSP Group, Inc.(a) | 176,467 | |||||||||
5,662 | DTS, Inc.(a) | 95,008 | |||||||||
122,271 | EarthLink, Inc. | 695,722 | |||||||||
8,873 | Ebix, Inc.(b) | 165,127 | |||||||||
14,186 | Electro Rent Corp. | 235,062 | |||||||||
19,328 | Electro Scientific Industries, Inc. | 208,356 | |||||||||
16,878 | Electronics for Imaging, Inc.(a) | 450,980 | |||||||||
67,073 | Emulex Corp.(a) | 402,438 | |||||||||
45,446 | Entegris, Inc.(a) | 430,828 | |||||||||
38,201 | Entropic Communications, Inc.(a) | 161,972 | |||||||||
14,607 | EPIQ Systems, Inc. | 204,060 | |||||||||
3,863 | ePlus, Inc. | 175,689 | |||||||||
28,174 | Euronet Worldwide, Inc.(a) | 860,152 | |||||||||
8,276 | Exar Corp.(a) | 89,215 | |||||||||
5,719 | ExlService Holdings, Inc.(a) | 186,554 | |||||||||
37,359 | Extreme Networks, Inc.(a) | 124,405 | |||||||||
10,150 | F5 Networks, Inc.(a) | 775,764 | |||||||||
11,018 | Fabrinet (Cayman Islands)(a) | 151,277 | |||||||||
7,665 | FactSet Research Systems, Inc. | 721,047 | |||||||||
9,803 | Fair Isaac Corp. | 456,624 | |||||||||
4,218 | FARO Technologies, Inc.(a) | 163,616 | |||||||||
9,114 | FEI Co.(b) | 582,202 | |||||||||
34,709 | Finisar Corp.(a) | 445,664 | |||||||||
6,965 | FleetCor Technologies, Inc.(a) | 535,608 | |||||||||
34,130 | FormFactor, Inc.(a) | 168,943 | |||||||||
10,103 | Forrester Research, Inc.(b) | 362,193 | |||||||||
8,747 | Fortinet, Inc.(a) | 157,096 | |||||||||
31,596 | Freescale Semiconductor Ltd. (Bermuda)(a)(b) | 489,106 | |||||||||
12,234 | Gartner, Inc.(a) | 707,737 | |||||||||
52,647 | Genpact Ltd. | 979,234 | |||||||||
25,186 | Global Cash Access Holdings, Inc.(a) | 179,576 | |||||||||
11,844 | Globecomm Systems, Inc.(a) | 145,089 | |||||||||
18,261 | GSI Group, Inc. (Canada)(a) | 155,949 | |||||||||
202,005 | GT Advanced Technologies, Inc.(a)(b) | 793,880 | |||||||||
25,910 | Hackett Group, Inc. (The)(a) | 126,441 | |||||||||
65,762 | Harmonic, Inc.(a) | 373,528 | |||||||||
18,437 | Heartland Payment Systems, Inc. | 606,393 | |||||||||
5,947 | Hittite Microwave Corp.(a) | 333,686 | |||||||||
8,471 | Hollysys Automation Technologies Ltd. (British Virgin Islands)(a) | 101,991 | |||||||||
63,502 | Hutchinson Technology, Inc.(a) | 177,806 | |||||||||
21,788 | IAC/InterActiveCorp. | 1,025,561 | |||||||||
4,938 | iGATE Corp.(a) | 82,415 | |||||||||
106,823 | Imation Corp.(a) | 393,109 | |||||||||
35,063 | Infinera Corp.(a)(b) | 295,230 | |||||||||
18,382 | Informatica Corp.(a) | 605,319 | |||||||||
80,281 | Integrated Device Technology, Inc.(a) | 570,798 | |||||||||
20,521 | Integrated Silicon Solution, Inc.(a) | 188,178 | |||||||||
8,251 | InterDigital, Inc. | 366,427 | |||||||||
34,279 | Intermec, Inc.(a) | 337,305 |
Number of Shares | Value | ||||||||||
Common Stocks and Other Equity Interests (Continued) | |||||||||||
21,009 | Internap Network Services Corp.(a) | $ | 167,652 | ||||||||
30,085 | International Rectifier Corp.(a) | 638,103 | |||||||||
104,799 | Intersil Corp., Class A | 813,240 | |||||||||
6,484 | InterXion Holding NV (Netherlands)(a) | 162,295 | |||||||||
23,895 | Intevac, Inc.(a) | 108,244 | |||||||||
23,813 | IntraLinks Holdings, Inc.(a) | 136,210 | |||||||||
3,827 | IPG Photonics Corp.(b) | 243,703 | |||||||||
8,538 | Ixia(a) | 140,621 | |||||||||
11,236 | IXYS Corp. | 101,798 | |||||||||
11,366 | j2 Global, Inc. | 462,596 | |||||||||
16,196 | Jack Henry & Associates, Inc. | 751,494 | |||||||||
62,716 | JDS Uniphase Corp.(a) | 846,666 | |||||||||
77,499 | Kemet Corp.(a) | 482,819 | |||||||||
8,546 | Key Tronic Corp.(a) | 96,570 | |||||||||
30,884 | Kopin Corp.(a) | 102,226 | |||||||||
36,174 | Kulicke & Soffa Industries, Inc.(a) | 418,171 | |||||||||
52,393 | Lattice Semiconductor Corp.(a) | 243,627 | |||||||||
1,587 | Linkedin Corp., Class A(a) | 304,847 | |||||||||
42,022 | Lionbridge Technologies, Inc.(a) | 143,715 | |||||||||
3,782 | Liquidity Services, Inc.(a)(b) | 124,428 | |||||||||
5,487 | Littelfuse, Inc. | 383,102 | |||||||||
27,563 | LTX-Credence Corp.(a) | 162,622 | |||||||||
21,996 | Magnachip Semiconductor Corp.(a) | 352,816 | |||||||||
3,183 | Manhattan Associates, Inc.(a) | 223,478 | |||||||||
26,009 | ManTech International Corp., Class A(b) | 694,180 | |||||||||
5,252 | MAXIMUS, Inc. | 418,532 | |||||||||
5,289 | Measurement Specialties, Inc.(a) | 226,211 | |||||||||
39,995 | Mentor Graphics Corp. | 730,309 | |||||||||
1,271 | MercadoLibre, Inc. (Argentina)(b) | 127,850 | |||||||||
27,973 | Mercury Systems, Inc.(a) | 216,231 | |||||||||
21,748 | Methode Electronics, Inc. | 312,736 | |||||||||
18,528 | Micrel, Inc. | 186,392 | |||||||||
21,344 | MICROS Systems, Inc.(a) | 905,199 | |||||||||
31,038 | Microsemi Corp.(a) | 645,590 | |||||||||
2,239 | MicroStrategy, Inc., Class A(a) | 201,935 | |||||||||
20,802 | MKS Instruments, Inc. | 558,950 | |||||||||
108,183 | ModusLink Global Solutions, Inc.(a) | 302,912 | |||||||||
6,967 | Monolithic Power Systems, Inc. | 168,044 | |||||||||
4,652 | Monotype Imaging Holdings, Inc. | 107,880 | |||||||||
153,411 | Monster Worldwide, Inc.(a) | 671,940 | |||||||||
11,071 | Move, Inc.(a) | 126,320 | |||||||||
4,860 | MTS Systems Corp. | 296,217 | |||||||||
10,565 | Multi-Fineline Electronix, Inc.(a) | 161,011 | |||||||||
16,442 | Nam Tai Electronics, Inc. (Hong Kong) | 124,302 | |||||||||
7,192 | Nanometrics, Inc.(a) | 100,904 | |||||||||
15,131 | National Instruments Corp. | 413,530 | |||||||||
29,985 | NCI, Inc., Class A(a) | 126,537 | |||||||||
53,253 | Net 1 UEPS Technologies, Inc.(a) | 399,930 | |||||||||
17,919 | NETGEAR, Inc.(a) | 533,807 | |||||||||
10,944 | NetScout Systems, Inc.(a) | 249,633 | |||||||||
15,653 | NeuStar, Inc., Class A(a) | 686,697 |
See Notes to Financial Statements.
55
Schedule of Investments (Continued)
PowerShares FTSE RAFI US 1500 Small-Mid Portfolio (PRFZ)
April 30, 2013
Number of Shares | Value | ||||||||||
Common Stocks and Other Equity Interests (Continued) | |||||||||||
20,393 | Newport Corp.(a) | $ | 308,954 | ||||||||
6,571 | NIC, Inc. | 110,656 | |||||||||
80,986 | Novatel Wireless, Inc.(a) | 212,183 | |||||||||
111,577 | Oclaro, Inc.(a)(b) | 151,745 | |||||||||
78,387 | OCZ Technology Group, Inc.(a)(b) | 102,687 | |||||||||
34,443 | OmniVision Technologies, Inc.(a) | 461,881 | |||||||||
1,647 | OpenTable, Inc.(a)(b) | 91,227 | |||||||||
11,227 | Oplink Communications, Inc.(a) | 184,347 | |||||||||
30,273 | Orbotech Ltd. (Israel)(a) | 310,298 | |||||||||
5,816 | OSI Systems, Inc.(a) | 333,257 | |||||||||
11,262 | Park Electrochemical Corp. | 268,824 | |||||||||
10,258 | PC Connection, Inc. | 158,384 | |||||||||
13,449 | PCM, Inc.(a) | 97,505 | |||||||||
14,624 | Perficient, Inc.(a) | 153,260 | |||||||||
20,166 | Pericom Semiconductor Corp.(a) | 130,272 | |||||||||
64,259 | Photronics, Inc.(a) | 507,004 | |||||||||
11,568 | Plantronics, Inc. | 506,910 | |||||||||
34,818 | Plexus Corp.(a) | 939,041 | |||||||||
115,412 | PMC - Sierra, Inc.(a) | 664,773 | |||||||||
5,017 | Power Integrations, Inc. | 207,754 | |||||||||
119,078 | Power-One, Inc.(a) | 752,573 | |||||||||
15,707 | PRGX Global, Inc.(a) | 87,802 | |||||||||
21,189 | Progress Software Corp.(a) | 478,236 | |||||||||
35,884 | PTC, Inc.(a) | 861,575 | |||||||||
5,149 | QLIK Technologies, Inc.(a) | 133,925 | |||||||||
64,040 | QLogic Corp.(a) | 695,474 | |||||||||
245,000 | Quantum Corp.(a) | 350,350 | |||||||||
31,325 | QuinStreet, Inc.(a) | 204,865 | |||||||||
9,759 | Rackspace Hosting, Inc.(a) | 470,384 | |||||||||
39,417 | RadiSys Corp.(a) | 195,508 | |||||||||
6,500 | RADWARE Ltd. (Israel)(a) | 97,435 | |||||||||
32,724 | Rambus, Inc.(a) | 227,759 | |||||||||
8,450 | RealD, Inc.(a)(b) | 126,497 | |||||||||
20,868 | RealNetworks, Inc.(a) | 160,684 | |||||||||
139,202 | RF Micro Devices, Inc.(a) | 780,923 | |||||||||
9,643 | Richardson Electronics Ltd. | 113,112 | |||||||||
27,478 | Riverbed Technology, Inc.(a) | 408,323 | |||||||||
16,009 | Rofin-Sinar Technologies, Inc.(a) | 398,624 | |||||||||
6,223 | Rogers Corp.(a) | 265,349 | |||||||||
20,042 | Rubicon Technology, Inc.(a)(b) | 148,511 | |||||||||
12,007 | Rudolph Technologies, Inc.(a) | 140,122 | |||||||||
32,898 | Sapient Corp.(a) | 384,249 | |||||||||
24,537 | ScanSource, Inc.(a) | 710,837 | |||||||||
13,609 | SeaChange International, Inc.(a) | 147,794 | |||||||||
13,129 | Semtech Corp.(a) | 421,047 | |||||||||
40,497 | Sigma Designs, Inc.(a) | 192,766 | |||||||||
8,981 | Silicon Graphics International Corp.(a) | 116,753 | |||||||||
27,935 | Silicon Image, Inc.(a) | 137,720 | |||||||||
10,303 | Silicon Laboratories, Inc.(a) | 409,132 | |||||||||
12,261 | SINA Corp. (China)(a) | 690,540 | |||||||||
14,867 | Sohu.com, Inc.(a) | 764,758 |
Number of Shares | Value | ||||||||||
Common Stocks and Other Equity Interests (Continued) | |||||||||||
2,165 | SolarWinds, Inc.(a) | $ | 110,090 | ||||||||
11,122 | Solera Holdings, Inc. | 640,405 | |||||||||
93,601 | Sonus Networks, Inc.(a) | 196,562 | |||||||||
2,102 | Sourcefire, Inc.(a) | 100,392 | |||||||||
61,472 | Spansion, Inc., Class A(a) | 798,521 | |||||||||
9,862 | SS&C Technologies Holdings, Inc.(a) | 302,665 | |||||||||
44,924 | STEC, Inc.(a)(b) | 163,074 | |||||||||
90,957 | STR Holdings, Inc.(a) | 204,653 | |||||||||
31,009 | SunPower Corp.(a)(b) | 421,412 | |||||||||
21,542 | Super Micro Computer, Inc.(a) | 207,234 | |||||||||
4,939 | Supertex, Inc. | 104,114 | |||||||||
27,867 | Sykes Enterprises, Inc.(a) | 428,873 | |||||||||
32,407 | Symmetricom, Inc.(a) | 168,516 | |||||||||
9,858 | Synaptics, Inc.(a) | 406,445 | |||||||||
5,278 | Synchronoss Technologies, Inc.(a) | 149,579 | |||||||||
3,402 | Syntel, Inc. | 214,904 | |||||||||
46,812 | Take-Two Interactive Software, Inc.(a) | 714,351 | |||||||||
89,918 | TeleCommunication Systems, Inc., Class A(a) | 173,542 | |||||||||
21,861 | TeleTech Holdings, Inc.(a) | 465,421 | |||||||||
455,554 | Tellabs, Inc. | 942,997 | |||||||||
5,143 | Tessco Technologies, Inc. | 105,123 | |||||||||
29,952 | Tessera Technologies, Inc. | 610,122 | |||||||||
34,712 | TIBCO Software, Inc.(a) | 673,760 | |||||||||
12,352 | TiVo, Inc.(a) | 144,765 | |||||||||
134,788 | TriQuint Semiconductor, Inc.(a) | 787,162 | |||||||||
60,774 | TTM Technologies, Inc.(a) | 439,396 | |||||||||
2,996 | Tyler Technologies, Inc.(a) | 189,467 | |||||||||
1,121 | Ultimate Software Group, Inc. (The)(a) | 108,277 | |||||||||
18,501 | Ultra Clean Holdings, Inc.(a) | 115,816 | |||||||||
4,333 | Ultratech, Inc.(a) | 127,694 | |||||||||
136,191 | United Online, Inc. | 926,099 | |||||||||
3,880 | Universal Display Corp.(a)(b) | 121,987 | |||||||||
77,339 | Unwired Planet, Inc.(a) | 153,131 | |||||||||
71,312 | UTStarcom Holdings Corp (Cayman Islands)(a) | 197,534 | |||||||||
20,501 | ValueClick, Inc.(a) | 632,661 | |||||||||
8,929 | Vantiv, Inc., Class A(a) | 201,170 | |||||||||
20,922 | Veeco Instruments, Inc.(a) | 796,501 | |||||||||
35,832 | Velti PLC (Jersey Islands)(a)(b) | 71,664 | |||||||||
47,385 | VeriFone Systems, Inc.(a) | 1,017,830 | |||||||||
5,396 | Verint Systems, Inc.(a) | 178,284 | |||||||||
15,457 | Verisign, Inc.(a) | 712,104 | |||||||||
14,676 | ViaSat, Inc.(a) | 711,346 | |||||||||
4,400 | Virtusa Corp.(a) | 97,724 | |||||||||
11,238 | Vishay Precision Group, Inc.(a) | 161,041 | |||||||||
12,474 | VistaPrint NV (Netherlands)(a)(b) | 508,939 | |||||||||
8,083 | VMware, Inc., Class A(a) | 569,852 | |||||||||
8,002 | Volterra Semiconductor Corp.(a) | 104,106 | |||||||||
22,674 | WebMD Health Corp.(a) | 547,577 | |||||||||
12,549 | Websense, Inc.(a) | 223,874 | |||||||||
49,673 | Westell Technologies, Inc., Class A(a) | 97,359 |
See Notes to Financial Statements.
56
Schedule of Investments (Continued)
PowerShares FTSE RAFI US 1500 Small-Mid Portfolio (PRFZ)
April 30, 2013
Number of Shares | Value | ||||||||||
Common Stocks and Other Equity Interests (Continued) | |||||||||||
9,095 | Wex, Inc.(a) | $ | 689,219 | ||||||||
9,834 | XO Group, Inc.(a) | 110,731 | |||||||||
43,766 | Xyratex Ltd. (Bermuda) | 467,421 | |||||||||
13,919 | Yandex NV, Class A (Netherlands)(a) | 358,275 | |||||||||
18,127 | Zebra Technologies Corp., Class A(a) | 845,625 | |||||||||
6,683 | Zygo Corp.(a) | 99,978 | |||||||||
177,336 | Zynga, Inc., Class A(a)(b) | 565,702 | |||||||||
94,759,967 | |||||||||||
Materials—5.6% | |||||||||||
23,888 | A. Schulman, Inc. | 620,371 | |||||||||
14,079 | A.M. Castle & Co.(a)(b) | 243,848 | |||||||||
3,185 | AEP Industries, Inc.(a) | 245,564 | |||||||||
11,292 | Allied Nevada Gold Corp.(a) | 120,824 | |||||||||
14,261 | AMCOL International Corp. | 438,811 | |||||||||
6,187 | American Pacific Corp.(a) | 151,643 | |||||||||
3,284 | American Vanguard Corp. | 94,711 | |||||||||
7,025 | Axiall Corp. | 368,461 | |||||||||
4,795 | Balchem Corp. | 207,815 | |||||||||
23,370 | Berry Plastics Group, Inc.(a) | 444,030 | |||||||||
100,379 | Boise, Inc.(a) | 802,028 | |||||||||
18,388 | Buckeye Technologies, Inc. | 691,205 | |||||||||
19,982 | Calgon Carbon Corp.(a) | 340,493 | |||||||||
18,431 | Carpenter Technology Corp. | 828,658 | |||||||||
83,545 | Century Aluminum Co.(a) | 681,727 | |||||||||
46,012 | China Gerui Advanced Materials Group Ltd. (British Virgin Islands)(a)(b) | 77,300 | |||||||||
15,886 | Clearwater Paper Corp.(a) | 731,074 | |||||||||
1,728 | Deltic Timber Corp. | 107,965 | |||||||||
7,876 | Eagle Materials, Inc. | 533,599 | |||||||||
166,703 | Ferro Corp.(a) | 1,173,589 | |||||||||
7,352 | Flotek Industries, Inc.(a) | 117,926 | |||||||||
8,764 | FutureFuel Corp. | 107,359 | |||||||||
18,980 | Globe Specialty Metals, Inc. | 247,879 | |||||||||
38,171 | Golden Minerals Co.(a)(b) | 69,471 | |||||||||
76,516 | Gulf Resources, Inc.(a)(b) | 78,812 | |||||||||
18,941 | H.B. Fuller Co. | 717,864 | |||||||||
6,467 | Handy & Harman Ltd.(a) | 99,463 | |||||||||
4,754 | Hawkins, Inc. | 176,801 | |||||||||
4,913 | Haynes International, Inc. | 238,821 | |||||||||
42,026 | Headwaters, Inc.(a) | 456,402 | |||||||||
110,013 | Hecla Mining Co.(b) | 374,044 | |||||||||
30,874 | Horsehead Holding Corp.(a) | 330,352 | |||||||||
12,367 | Innophos Holdings, Inc. | 634,551 | |||||||||
6,750 | Innospec, Inc. | 297,068 | |||||||||
17,935 | Intrepid Potash, Inc. | 330,183 | |||||||||
12,077 | Kaiser Aluminum Corp. | 760,851 | |||||||||
13,981 | KapStone Paper and Packaging Corp. | 413,558 | |||||||||
12,153 | Koppers Holdings, Inc. | 533,638 | |||||||||
29,593 | Kraton Performance Polymers, Inc.(a) | 672,057 | |||||||||
13,081 | Kronos Worldwide, Inc.(b) | 231,272 |
Number of Shares | Value | ||||||||||
Common Stocks and Other Equity Interests (Continued) | |||||||||||
13,759 | Landec Corp.(a) | $ | 184,508 | ||||||||
29,801 | Louisiana-Pacific Corp.(a) | 539,994 | |||||||||
7,490 | LSB Industries, Inc.(a) | 244,623 | |||||||||
20,406 | Materion Corp. | 540,555 | |||||||||
57,689 | Mercer International, Inc.(a) | 362,864 | |||||||||
15,223 | Minerals Technologies, Inc. | 618,511 | |||||||||
30,562 | Molycorp, Inc.(a)(b) | 178,482 | |||||||||
18,890 | Myers Industries, Inc. | 279,950 | |||||||||
10,853 | Neenah Paper, Inc. | 312,132 | |||||||||
3,044 | NewMarket Corp. | 817,923 | |||||||||
46,323 | Noranda Aluminum Holding Corp. | 176,491 | |||||||||
16,067 | Olympic Steel, Inc. | 321,340 | |||||||||
45,338 | Omnova Solutions, Inc.(a) | 302,404 | |||||||||
32,847 | P.H. Glatfelter Co. | 788,328 | |||||||||
10,428 | Penford Corp.(a) | 114,708 | |||||||||
36,439 | PolyOne Corp. | 820,971 | |||||||||
5,463 | Quaker Chemical Corp. | 337,176 | |||||||||
9,704 | Royal Gold, Inc. | 539,348 | |||||||||
17,599 | RTI International Metals, Inc.(a) | 510,723 | |||||||||
13,426 | Schweitzer-Mauduit International, Inc. | 540,934 | |||||||||
20,438 | Silgan Holdings, Inc. | 978,367 | |||||||||
7,904 | Stepan Co. | 450,054 | |||||||||
52,172 | Stillwater Mining Co.(a) | 649,020 | |||||||||
48,984 | SunCoke Energy, Inc.(a) | 741,128 | |||||||||
7,692 | Texas Industries, Inc.(a)(b) | 489,827 | |||||||||
10,890 | Tredegar Corp. | 322,344 | |||||||||
24,596 | Tronox Ltd., Class A (Australia)(b) | 505,202 | |||||||||
4,524 | Universal Stainless & Alloy Products, Inc.(a) | 158,159 | |||||||||
21,150 | US Concrete, Inc.(a) | 328,671 | |||||||||
36,148 | Wausau Paper Corp. | 367,987 | |||||||||
5,641 | Westlake Chemical Corp. | 468,993 | |||||||||
32,119 | Worthington Industries, Inc. | 1,033,589 | |||||||||
34,950 | Yongye International, Inc.(a)(b) | 185,934 | |||||||||
14,636 | Zep, Inc. | 222,467 | |||||||||
15,779 | Zoltek Cos., Inc.(a) | 208,441 | |||||||||
31,434,236 | |||||||||||
Telecommunication Services—1.5% | |||||||||||
280,367 | Alaska Communications Systems Group, Inc.(b) | 454,194 | |||||||||
5,381 | Atlantic Tele-Network, Inc. | 273,193 | |||||||||
33,515 | Cbeyond, Inc.(a) | 294,262 | |||||||||
65,940 | Clearwire Corp., Class A(a) | 221,558 | |||||||||
8,199 | Cogent Communications Group, Inc. | 234,819 | |||||||||
36,147 | Consolidated Communications Holdings, Inc.(b) | 666,189 | |||||||||
55,587 | Fairpoint Communications, Inc.(a)(b) | 452,478 | |||||||||
41,205 | General Communication, Inc., Class A(a) | 400,101 | |||||||||
12,233 | Hawaiian Telcom Holdco, Inc.(a) | 295,672 | |||||||||
15,054 | HickoryTech Corp. | 154,755 | |||||||||
25,213 | IDT Corp., Class B | 372,900 |
See Notes to Financial Statements.
57
Schedule of Investments (Continued)
PowerShares FTSE RAFI US 1500 Small-Mid Portfolio (PRFZ)
April 30, 2013
Number of Shares | Value | ||||||||||
Common Stocks and Other Equity Interests (Continued) | |||||||||||
41,285 | Iridium Communications, Inc.(a)(b) | $ | 277,022 | ||||||||
11,585 | Lumos Networks Corp. | 156,282 | |||||||||
64,801 | Neutral Tandem, Inc. | 193,107 | |||||||||
34,507 | NTELOS Holdings Corp. | 507,943 | |||||||||
30,359 | Premiere Global Services, Inc.(a) | 340,932 | |||||||||
28,130 | Primus Telecommunications Group, Inc. | 353,594 | |||||||||
7,818 | SBA Communications Corp., Class A(a) | 617,544 | |||||||||
16,266 | Shenandoah Telecommunications Co. | 266,600 | |||||||||
19,601 | United States Cellular Corp.(a) | 753,462 | |||||||||
54,354 | USA Mobility, Inc. | 737,584 | |||||||||
91,374 | Vonage Holdings Corp.(a) | 278,691 | |||||||||
8,302,882 | |||||||||||
Utilities—1.5% | |||||||||||
8,461 | American States Water Co. | 469,416 | |||||||||
4,371 | Artesian Resources Corp., Class A | 103,024 | |||||||||
23,963 | California Water Service Group | 480,458 | |||||||||
11,545 | CH Energy Group, Inc. | 750,079 | |||||||||
5,721 | Chesapeake Utilities Corp. | 305,272 | |||||||||
4,469 | Connecticut Water Service, Inc. | 127,277 | |||||||||
10,713 | Consolidated Water Co. Ltd. (Cayman Islands) | 106,809 | |||||||||
4,594 | Delta Natural Gas Co., Inc. | 99,598 | |||||||||
22,271 | El Paso Electric Co. | 834,272 | |||||||||
37,951 | Empire District Electric Co. (The) | 875,530 | |||||||||
22,091 | Laclede Group, Inc. (The) | 1,031,871 | |||||||||
11,915 | MGE Energy, Inc. | 665,453 | |||||||||
9,349 | Middlesex Water Co. | 183,334 | |||||||||
10,649 | Ormat Technologies, Inc.(b) | 231,509 | |||||||||
25,168 | Otter Tail Corp. | 785,242 | |||||||||
7,496 | SJW Corp. | 190,099 | |||||||||
15,067 | South Jersey Industries, Inc. | 929,634 | |||||||||
9,914 | Unitil Corp. | 300,493 | |||||||||
5,436 | York Water Co. (The) | 101,925 | |||||||||
8,571,295 | |||||||||||
Total Common Stocks and Other Equity Interests (Cost $514,817,580) | 563,596,993 | ||||||||||
Money Market Fund—0.0% | |||||||||||
198,819 | Goldman Sachs Financial Square Prime Obligations - Institutional Share Class (Cost $198,819) | 198,819 | |||||||||
Total Investments (excluding investments purchased with cash collateral from securities on loan) (Cost $515,016,399)—100.0% | 563,795,812 |
Number of Shares | Value | ||||||||||
Investments Purchased with Cash Collateral from Securities on Loan | |||||||||||
Money Market Fund—7.0% | |||||||||||
39,195,769 | Invesco Liquid Assets Portfolio - Institutional Class (Cost $39,195,769)(d)(e) | $ | 39,195,769 | ||||||||
Total Investments (Cost $554,212,168)—107.0% | 602,991,581 | ||||||||||
Liabilities in excess of other assets—(7.0)% | (39,228,865 | ) | |||||||||
Net Assets—100.0% | $ | 563,762,716 |
Investment Abbreviations:
REIT—Real Estate Investment Trust
Notes to Schedule of Investments:
(a) Non-income producing security.
(b) All or a portion of this security was out on loan at April 30, 2013.
(c) Represents escrow units of beneficial interest in liquidating trust.
(d) The security has been segregated to satisfy the commitment to return the cash collateral received in securities lending transactions upon the borrower's return of the securities loaned. See Note 2H.
(e) The security and the Fund are advised by wholly owned subsidiaries of Invesco Ltd. and are therefore considered to be affiliated.
See Notes to Financial Statements.
58
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Statements of Assets and Liabilities
April 30, 2013
PowerShares Dynamic MagniQuant Portfolio (PIQ) | PowerShares Dynamic Market Portfolio (PWC) | PowerShares Dynamic OTC Portfolio (PWO) | PowerShares FTSE RAFI US 1000 Portfolio (PRF) | PowerShares FTSE RAFI US 1500 Small-Mid Portfolio (PRFZ) | |||||||||||||||||||
ASSETS: | |||||||||||||||||||||||
Unaffiliated investments, at value(a) | $ | 18,996,321 | $ | 140,995,838 | $ | 22,237,851 | $ | 1,776,924,930 | $ | 563,795,812 | |||||||||||||
Affiliated investments, at value (Note 4) | — | — | — | 24,038,125 | 39,195,769 | ||||||||||||||||||
Total investments, at value | 18,996,321 | 140,995,838 | 22,237,851 | 1,800,963,055 | 602,991,581 | ||||||||||||||||||
Foreign currencies, at value | — | — | — | — | 25,192 | ||||||||||||||||||
Receivables: | |||||||||||||||||||||||
Expense waivers | 4,810 | 404 | 5,882 | 65,681 | 27,537 | ||||||||||||||||||
Dividends | 2,658 | 53,535 | 1,363 | 1,787,981 | 198,900 | ||||||||||||||||||
Investments sold | — | — | — | 3,532,191 | 346,475 | ||||||||||||||||||
Foreign tax reclaims | — | — | — | 392 | — | ||||||||||||||||||
Security lending | — | — | — | 36,093 | 125,228 | ||||||||||||||||||
Shares sold | — | — | — | 7,142,370 | — | ||||||||||||||||||
Total Assets | 19,003,789 | 141,049,777 | 22,245,096 | 1,813,527,763 | 603,714,913 | ||||||||||||||||||
LIABILITIES: | |||||||||||||||||||||||
Payables: | |||||||||||||||||||||||
Shares repurchased | — | — | — | 3,538,467 | — | ||||||||||||||||||
Investments purchased | — | 201,331 | — | 7,108,089 | 99,639 | ||||||||||||||||||
Collateral upon return of securities loaned | — | — | — | 22,469,535 | 39,195,769 | ||||||||||||||||||
Accrued advisory fees | 7,626 | 56,957 | 8,928 | 413,650 | 131,544 | ||||||||||||||||||
Accrued trustees fees | 8,623 | 20,833 | 9,394 | 46,463 | 18,250 | ||||||||||||||||||
Accrued expenses | 72,791 | 113,092 | 66,826 | 1,501,508 | 506,995 | ||||||||||||||||||
Total Liabilities | 89,040 | 392,213 | 85,148 | 35,077,712 | 39,952,197 | ||||||||||||||||||
NET ASSETS | $ | 18,914,749 | $ | 140,657,564 | $ | 22,159,948 | $ | 1,778,450,051 | $ | 563,762,716 | |||||||||||||
NET ASSETS CONSIST OF: | |||||||||||||||||||||||
Shares of beneficial interest | $ | 48,142,323 | $ | 499,275,548 | $ | 101,577,628 | $ | 1,659,657,464 | $ | 542,640,371 | |||||||||||||
Undistributed net investment income | 1,066 | 151,975 | 1,634 | 4,084,962 | 1,093,435 | ||||||||||||||||||
Undistributed net realized gain (loss) | (31,998,670 | ) | (372,645,839 | ) | (82,301,898 | ) | (187,591,875 | ) | (28,750,139 | ) | |||||||||||||
Net unrealized appreciation | 2,770,030 | 13,875,880 | 2,882,584 | 302,299,500 | 48,779,049 | ||||||||||||||||||
Net Assets | $ | 18,914,749 | $ | 140,657,564 | $ | 22,159,948 | $ | 1,778,450,051 | $ | 563,762,716 | |||||||||||||
Shares outstanding (unlimited amount authorized, $0.01 par value) | 600,000 | 2,500,000 | 400,000 | 24,900,000 | 7,250,000 | ||||||||||||||||||
Net asset value | $ | 31.52 | $ | 56.26 | $ | 55.40 | $ | 71.42 | $ | 77.76 | |||||||||||||
Market price | $ | 31.47 | $ | 56.23 | $ | 55.32 | $ | 71.42 | $ | 77.67 | |||||||||||||
Unaffiliated investments, at cost | $ | 16,226,291 | $ | 127,119,958 | $ | 19,355,267 | $ | 1,474,842,323 | $ | 515,016,399 | |||||||||||||
Affiliated investments, at cost | $ | — | $ | — | $ | — | $ | 23,821,232 | $ | 39,195,769 | |||||||||||||
Total investments, at cost | $ | 16,226,291 | $ | 127,119,958 | $ | 19,355,267 | $ | 1,498,663,555 | $ | 554,212,168 | |||||||||||||
Foreign currencies, at cost | $ | — | $ | — | $ | — | $ | — | $ | 25,556 | |||||||||||||
(a)Includes securities on loan with an aggregate value of | $ | — | $ | — | $ | — | $ | 21,784,926 | $ | 38,195,943 |
See Notes to Financial Statements.
60
Statement of Operations
Year Ended April 30, 2013
PowerShares Dynamic MagniQuant Portfolio (PIQ) | PowerShares Dynamic Market Portfolio (PWC) | PowerShares Dynamic OTC Portfolio (PWO) | PowerShares FTSE RAFI US 1000 Portfolio (PRF) | PowerShares FTSE RAFI US 1500 Small-Mid Portfolio (PRFZ) | |||||||||||||||||||
INVESTMENT INCOME: | |||||||||||||||||||||||
Unaffiliated dividend income | $ | 419,411 | $ | 2,973,165 | $ | 488,890 | $ | 36,399,522 | $ | 8,739,578 | |||||||||||||
Affiliated dividend income | — | — | — | 20,757 | 45,079 | ||||||||||||||||||
Securities lending income | — | — | — | 495,322 | 908,911 | ||||||||||||||||||
Foreign withholding tax | — | — | — | (34,784 | ) | (32,428 | ) | ||||||||||||||||
Total Income | 419,411 | 2,973,165 | 488,890 | 36,880,817 | 9,661,140 | ||||||||||||||||||
EXPENSES: | |||||||||||||||||||||||
Advisory fees | 86,482 | 650,801 | 120,954 | 4,294,300 | 1,380,337 | ||||||||||||||||||
Accounting & administration fees | 57,844 | 57,844 | 57,844 | 342,143 | 110,175 | ||||||||||||||||||
Professional fees | 21,190 | 16,945 | 21,919 | 83,904 | 32,255 | ||||||||||||||||||
Custodian & transfer agent fees | 20,447 | 20,369 | 14,132 | 83,278 | 57,050 | ||||||||||||||||||
Sub-licensing | 8,648 | 42,047 | 7,253 | 1,332,592 | 428,341 | ||||||||||||||||||
Trustees fees | 5,680 | 8,119 | 5,792 | 39,815 | 16,548 | ||||||||||||||||||
Other expenses | 4,809 | (11,568 | ) | 2,844 | 133,907 | 43,347 | |||||||||||||||||
Total Expenses | 205,100 | 784,557 | 230,738 | 6,309,939 | 2,068,053 | ||||||||||||||||||
Waivers | (92,649 | ) | (2,910 | ) | (85,598 | ) | (519,689 | ) | (211,738 | ) | |||||||||||||
Net Expenses | 112,451 | 781,647 | 145,140 | 5,790,250 | 1,856,315 | ||||||||||||||||||
Net Investment Income | 306,960 | 2,191,518 | 343,750 | 31,090,567 | 7,804,825 | ||||||||||||||||||
REALIZED AND UNREALIZED GAIN (LOSS): | |||||||||||||||||||||||
Net realized gain (loss) from: | |||||||||||||||||||||||
Investment securities | (1,636,032 | ) | (9,005,989 | ) | (3,022,015 | ) | (6,704,110 | ) | (338,652 | ) | |||||||||||||
In-kind redemptions | 3,335,728 | 28,921,292 | 4,203,848 | 70,564,107 | 34,257,434 | ||||||||||||||||||
Foreign currencies | — | — | — | (13,292 | ) | (36 | ) | ||||||||||||||||
Net realized gain | 1,699,696 | 19,915,303 | 1,181,833 | 63,846,705 | 33,918,746 | ||||||||||||||||||
Change in net unrealized appreciation on: | |||||||||||||||||||||||
Investment securities | 1,413,674 | 5,567,136 | 302,308 | 215,084,872 | 44,373,721 | ||||||||||||||||||
Foreign currencies | — | — | — | — | 282 | ||||||||||||||||||
Net change in unrealized appreciation | 1,413,674 | 5,567,136 | 302,308 | 215,084,872 | 44,374,003 | ||||||||||||||||||
Net realized and unrealized gain | 3,113,370 | 25,482,439 | 1,484,141 | 278,931,577 | 78,292,749 | ||||||||||||||||||
Net increase in net assets resulting from operations | $ | 3,420,330 | $ | 27,673,957 | $ | 1,827,891 | $ | 310,022,144 | $ | 86,097,574 |
See Notes to Financial Statements.
61
Statements of Changes in Net Assets
PowerShares Dynamic MagniQuant Portfolio (PIQ) | PowerShares Dynamic Market Portfolio (PWC) | PowerShares Dynamic OTC Portfolio (PWO) | |||||||||||||||||||||||||
Year Ended April 30, 2013 | Year Ended April 30, 2012 | Year Ended April 30, 2013 | Year Ended April 30, 2012 | Year Ended April 30, 2013 | Year Ended April 30, 2012 | ||||||||||||||||||||||
OPERATIONS: | |||||||||||||||||||||||||||
Net investment income | $ | 306,960 | $ | 138,735 | $ | 2,191,518 | $ | 1,471,419 | $ | 343,750 | $ | 65,769 | |||||||||||||||
Net realized gain (loss) | 1,699,696 | 1,237,656 | 19,915,303 | (1,287,554 | ) | 1,181,833 | 1,225,226 | ||||||||||||||||||||
Net change in unrealized appreciation (depreciation) | 1,413,674 | (2,345,790 | ) | 5,567,136 | (7,880,233 | ) | 302,308 | (3,319,406 | ) | ||||||||||||||||||
Net increase (decrease) in net assets resulting from operations | 3,420,330 | (969,399 | ) | 27,673,957 | (7,696,368 | ) | 1,827,891 | (2,028,411 | ) | ||||||||||||||||||
DISTRIBUTIONS TO SHAREHOLDERS FROM: | |||||||||||||||||||||||||||
Net investment income | (330,631 | ) | (131,104 | ) | (2,277,011 | ) | (1,361,510 | ) | (376,429 | ) | (21,198 | ) | |||||||||||||||
SHAREHOLDER TRANSACTIONS: | |||||||||||||||||||||||||||
Proceeds from shares sold | 20,180,567 | 26,804,052 | 188,278,816 | 201,665,339 | 22,456,458 | 42,152,256 | |||||||||||||||||||||
Value of shares repurchased | (22,839,404 | ) | (34,244,116 | ) | (201,661,797 | ) | (252,171,146 | ) | (29,971,505 | ) | (52,199,792 | ) | |||||||||||||||
Net increase (decrease) in net assets resulting from shares transactions | (2,658,837 | ) | (7,440,064 | ) | (13,382,981 | ) | (50,505,807 | ) | (7,515,047 | ) | (10,047,536 | ) | |||||||||||||||
Increase (Decrease) in Net Assets | 430,862 | (8,540,567 | ) | 12,013,965 | (59,563,685 | ) | (6,063,585 | ) | (12,097,145 | ) | |||||||||||||||||
NET ASSETS: | |||||||||||||||||||||||||||
Beginning of year | 18,483,887 | 27,024,454 | 128,643,599 | 188,207,284 | 28,223,533 | 40,320,678 | |||||||||||||||||||||
End of year | $ | 18,914,749 | $ | 18,483,887 | $ | 140,657,564 | $ | 128,643,599 | $ | 22,159,948 | $ | 28,223,533 | |||||||||||||||
Undistributed net investment income at end of year | $ | 1,066 | $ | 34,875 | $ | 151,975 | $ | 164,192 | $ | 1,634 | $ | 38,896 | |||||||||||||||
CHANGES IN SHARES OUTSTANDING: | |||||||||||||||||||||||||||
Shares sold | 750,000 | 1,050,000 | 3,900,000 | 4,450,000 | 450,000 | 850,000 | |||||||||||||||||||||
Shares repurchased | (850,000 | ) | (1,350,000 | ) | (4,150,000 | ) | (5,600,000 | ) | (600,000 | ) | (1,050,000 | ) | |||||||||||||||
Shares outstanding, beginning of year | 700,000 | 1,000,000 | 2,750,000 | 3,900,000 | 550,000 | 750,000 | |||||||||||||||||||||
Shares outstanding, end of year | 600,000 | 700,000 | 2,500,000 | 2,750,000 | 400,000 | 550,000 |
See Notes to Financial Statements.
62
PowerShares FTSE RAFI US 1000 Portfolio (PRF) | PowerShares FTSE RAFI US 1500 Small-Mid Portfolio (PRFZ) | ||||||||||||||||||
Year Ended April 30, 2013 | Year Ended April 30, 2012 | Year Ended April 30, 2013 | Year Ended April 30, 2012 | ||||||||||||||||
OPERATIONS: | |||||||||||||||||||
Net investment income | $ | 31,090,567 | $ | 23,878,068 | $ | 7,804,825 | $ | 4,361,493 | |||||||||||
Net realized gain (loss) | 63,846,705 | 36,528,515 | 33,918,746 | 26,484,496 | |||||||||||||||
Net change in unrealized appreciation (depreciation) | 215,084,872 | (51,057,800 | ) | 44,374,003 | (49,174,165 | ) | |||||||||||||
Net increase (decrease) in net assets resulting from operations | 310,022,144 | 9,348,783 | 86,097,574 | (18,328,176 | ) | ||||||||||||||
DISTRIBUTIONS TO SHAREHOLDERS FROM: | |||||||||||||||||||
Net investment income | (30,575,583 | ) | (23,834,366 | ) | (7,992,111 | ) | (3,690,489 | ) | |||||||||||
SHAREHOLDER TRANSACTIONS: | |||||||||||||||||||
Proceeds from shares sold | 319,681,049 | 338,194,606 | 130,742,268 | 179,108,809 | |||||||||||||||
Value of shares repurchased | (209,338,770 | ) | (143,294,034 | ) | (108,729,552 | ) | (103,271,648 | ) | |||||||||||
Net increase (decrease) in net assets resulting from shares transactions | 110,342,279 | 194,900,572 | 22,012,716 | 75,837,161 | |||||||||||||||
Increase (Decrease) in Net Assets | 389,788,840 | 180,414,989 | 100,118,179 | 53,818,496 | |||||||||||||||
NET ASSETS: | |||||||||||||||||||
Beginning of year | 1,388,661,211 | 1,208,246,222 | 463,644,537 | 409,826,041 | |||||||||||||||
End of year | $ | 1,778,450,051 | $ | 1,388,661,211 | $ | 563,762,716 | $ | 463,644,537 | |||||||||||
Undistributed net investment income at end of year | $ | 4,084,962 | $ | 3,564,429 | $ | 1,093,435 | $ | 1,048,738 | |||||||||||
CHANGES IN SHARES OUTSTANDING: | |||||||||||||||||||
Shares sold | 4,900,000 | 5,800,000 | 1,800,000 | 2,750,000 | |||||||||||||||
Shares repurchased | (3,250,000 | ) | (2,450,000 | ) | (1,500,000 | ) | (1,600,000 | ) | |||||||||||
Shares outstanding, beginning of year | 23,250,000 | 19,900,000 | 6,950,000 | 5,800,000 | |||||||||||||||
Shares outstanding, end of year | 24,900,000 | 23,250,000 | 7,250,000 | 6,950,000 |
63
Financial Highlights
PowerShares Dynamic MagniQuant Portfolio (PIQ)
Year Ended April 30, | |||||||||||||||||||||||
2013 | 2012 | 2011 | 2010 | 2009 | |||||||||||||||||||
PER SHARE OPERATING PERFORMANCE: | |||||||||||||||||||||||
Net asset value at beginning of year | $ | 26.41 | $ | 27.02 | $ | 22.56 | $ | 16.85 | $ | 25.08 | |||||||||||||
Net investment income(a) | 0.48 | 0.18 | 0.19 | 0.09 | 0.14 | ||||||||||||||||||
Net realized and unrealized gain (loss) on investments | 5.16 | (0.62 | ) | 4.45 | 5.71 | (8.24 | ) | ||||||||||||||||
Total from investment operations | 5.64 | (0.44 | ) | 4.64 | 5.80 | (8.10 | ) | ||||||||||||||||
Distributions to shareholders from: | |||||||||||||||||||||||
Net investment income | (0.53 | ) | (0.17 | ) | (0.18 | ) | (0.09 | ) | (0.13 | ) | |||||||||||||
Net asset value at end of year | $ | 31.52 | $ | 26.41 | $ | 27.02 | $ | 22.56 | $ | 16.85 | |||||||||||||
Market price at end of year(b) | $ | 31.47 | $ | 26.40 | $ | 27.03 | $ | 22.56 | $ | 16.84 | |||||||||||||
NET ASSET VALUE TOTAL RETURN(c) | 21.70 | % | (1.55 | )% | 20.72 | % | 34.54 | % | (32.40 | )% | |||||||||||||
MARKET PRICE TOTAL RETURN(c) | 21.56 | % | (1.63 | )% | 20.76 | % | 34.62 | % | (32.41 | )% | |||||||||||||
RATIOS/SUPPLEMENTAL DATA: | |||||||||||||||||||||||
Net assets at end of year (000's omitted) | $ | 18,915 | $ | 18,484 | $ | 27,024 | $ | 27,073 | $ | 28,651 | |||||||||||||
Ratio to average net assets of: | |||||||||||||||||||||||
Expenses, after Waivers | 0.65 | % | 0.65 | % | 0.65 | % | 0.65 | % | 0.65 | % | |||||||||||||
Expenses, prior to Waivers | 1.19 | % | 1.22 | % | 1.08 | % | 0.98 | % | 0.87 | % | |||||||||||||
Net investment income, after Waivers | 1.77 | % | 0.73 | % | 0.83 | % | 0.45 | % | 0.70 | % | |||||||||||||
Portfolio turnover rate(d) | 118 | % | 110 | % | 93 | % | 98 | % | 102 | % |
PowerShares Dynamic Market Portfolio (PWC)
Year Ended April 30, | |||||||||||||||||||||||
2013 | 2012 | 2011 | 2010 | 2009 | |||||||||||||||||||
PER SHARE OPERATING PERFORMANCE: | |||||||||||||||||||||||
Net asset value at beginning of year | $ | 46.78 | $ | 48.26 | $ | 40.38 | $ | 31.42 | $ | 48.12 | |||||||||||||
Net investment income(a) | 0.82 | 0.44 | 0.57 | 0.33 | 0.50 | ||||||||||||||||||
Net realized and unrealized gain (loss) on investments | 9.51 | (1.52 | ) | 7.94 | 8.97 | (16.72 | ) | ||||||||||||||||
Total from investment operations | 10.33 | (1.08 | ) | 8.51 | 9.30 | (16.22 | ) | ||||||||||||||||
Distributions to shareholders from: | |||||||||||||||||||||||
Net investment income | (0.85 | ) | (0.40 | ) | (0.63 | ) | (0.34 | ) | (0.48 | ) | |||||||||||||
Net asset value at end of year | $ | 56.26 | $ | 46.78 | $ | 48.26 | $ | 40.38 | $ | 31.42 | |||||||||||||
Market price at end of year(b) | $ | 56.23 | $ | 46.75 | $ | 48.24 | $ | 40.38 | $ | 31.41 | |||||||||||||
NET ASSET VALUE TOTAL RETURN(c) | 22.39 | % | (2.12 | )% | 21.34 | % | 29.75 | % | (33.86 | )% | |||||||||||||
MARKET PRICE TOTAL RETURN(c) | 22.40 | % | (2.14 | )% | 21.29 | % | 29.80 | % | (33.84 | )% | |||||||||||||
RATIOS/SUPPLEMENTAL DATA: | |||||||||||||||||||||||
Net assets at end of year (000's omitted) | $ | 140,658 | $ | 128,644 | $ | 188,207 | $ | 230,151 | $ | 260,779 | |||||||||||||
Ratio to average net assets of: | |||||||||||||||||||||||
Expenses, after Waivers | 0.60 | % | 0.60 | % | 0.60 | % | 0.60 | % | 0.60 | % | |||||||||||||
Expenses, prior to Waivers | 0.60 | % | 0.62 | % | 0.64 | % | 0.60 | % | 0.60 | % | |||||||||||||
Net investment income, after Waivers | 1.68 | % | 1.00 | % | 1.38 | % | 0.92 | % | 1.28 | % | |||||||||||||
Portfolio turnover rate(d) | 166 | % | 133 | % | 107 | % | 98 | % | 113 | % |
(a) Based on average shares outstanding.
(b) The mean between the last bid and ask prices.
(c) Net asset value total 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. Market price total return is calculated assuming an initial investment made at the market price at the beginning of the period, reinvestment of all dividends and distributions at market price during the period, and sale at the market price on the last day of the period. Total investment returns calculated for a period of less than one year are not annualized.
(d) Portfolio turnover rate is not annualized and does not include securities received or delivered from processing creations or redemptions.
See Notes to Financial Statements.
64
Financial Highlights (Continued)
PowerShares Dynamic OTC Portfolio (PWO)
Year Ended April 30, | |||||||||||||||||||||||
2013 | 2012 | 2011 | 2010 | 2009 | |||||||||||||||||||
PER SHARE OPERATING PERFORMANCE: | |||||||||||||||||||||||
Net asset value at beginning of year | $ | 51.32 | $ | 53.76 | $ | 45.15 | $ | 32.83 | $ | 46.92 | |||||||||||||
Net investment income(a) | 0.71 | (b) | 0.10 | 0.07 | 0.01 | 0.03 | |||||||||||||||||
Net realized and unrealized gain (loss) on investments | 4.18 | (2.50 | ) | 8.65 | 12.36 | (14.12 | ) | ||||||||||||||||
Total from investment operations | 4.89 | (2.40 | ) | 8.72 | 12.37 | (14.09 | ) | ||||||||||||||||
Distributions to shareholders from: | |||||||||||||||||||||||
Net investment income | (0.81 | ) | (0.04 | ) | (0.11 | ) | (0.05 | ) | — | ||||||||||||||
Net asset value at end of year | $ | 55.40 | $ | 51.32 | $ | 53.76 | $ | 45.15 | $ | 32.83 | |||||||||||||
Market price at end of year(c) | $ | 55.32 | $ | 51.30 | $ | 53.75 | $ | 45.15 | $ | 32.83 | |||||||||||||
NET ASSET VALUE TOTAL RETURN(d) | 9.75 | % | (4.46 | )% | 19.34 | % | 37.73 | % | (30.03 | )% | |||||||||||||
MARKET PRICE TOTAL RETURN(d) | 9.63 | % | (4.48 | )% | 19.31 | % | 37.73 | % | (30.06 | )% | |||||||||||||
RATIOS/SUPPLEMENTAL DATA: | |||||||||||||||||||||||
Net assets at end of year (000's omitted) | $ | 22,160 | $ | 28,224 | $ | 40,321 | $ | 40,635 | $ | 39,393 | |||||||||||||
Ratio to average net assets of: | |||||||||||||||||||||||
Expenses, after Waivers | 0.60 | % | 0.60 | % | 0.60 | % | 0.60 | % | 0.59 | % | |||||||||||||
Expenses, prior to Waivers | 0.95 | % | 0.93 | % | 0.91 | % | 0.85 | % | 0.74 | % | |||||||||||||
Net investment income, after Waivers | 1.42 | %(b) | 0.22 | % | 0.15 | % | 0.01 | % | 0.08 | % | |||||||||||||
Portfolio turnover rate(e) | 118 | % | 99 | % | 75 | % | 90 | % | 77 | % |
PowerShares FTSE RAFI US 1000 Portfolio (PRF)
Year Ended April 30, | |||||||||||||||||||||||
2013 | 2012 | 2011 | 2010 | 2009 | |||||||||||||||||||
PER SHARE OPERATING PERFORMANCE: | |||||||||||||||||||||||
Net asset value at beginning of year | $ | 59.73 | $ | 60.72 | $ | 52.93 | $ | 34.78 | $ | 55.15 | |||||||||||||
Net investment income(a) | 1.31 | 1.12 | 1.07 | 0.62 | 0.97 | ||||||||||||||||||
Net realized and unrealized gain (loss) on investments | 11.66 | (0.99 | ) | 7.63 | 18.21 | (20.26 | ) | ||||||||||||||||
Total from investment operations | 12.97 | 0.13 | 8.70 | 18.83 | (19.29 | ) | |||||||||||||||||
Distributions to shareholders from: | |||||||||||||||||||||||
Net investment income | (1.28 | ) | (1.12 | ) | (0.91 | ) | (0.68 | ) | (1.08 | ) | |||||||||||||
Net asset value at end of year | $ | 71.42 | $ | 59.73 | $ | 60.72 | $ | 52.93 | $ | 34.78 | |||||||||||||
Market price at end of year(c) | $ | 71.42 | $ | 59.72 | $ | 60.71 | $ | 52.96 | $ | 34.78 | |||||||||||||
NET ASSET VALUE TOTAL RETURN(d) | 22.06 | % | 0.41 | % | 16.72 | % | 54.57 | % | (35.26 | )% | |||||||||||||
MARKET PRICE TOTAL RETURN(d) | 22.09 | % | 0.41 | % | 16.63 | % | 54.66 | % | (35.20 | )% | |||||||||||||
RATIOS/SUPPLEMENTAL DATA: | |||||||||||||||||||||||
Net assets at end of year (000's omitted) | $ | 1,778,450 | $ | 1,388,661 | $ | 1,208,246 | $ | 648,428 | $ | 396,443 | |||||||||||||
Ratio to average net assets of: | |||||||||||||||||||||||
Expenses, after Waivers | 0.39 | % | 0.39 | % | 0.39 | % | 0.39 | % | 0.58 | % | |||||||||||||
Expenses, prior to Waivers | 0.43 | % | 0.43 | % | 0.44 | % | 0.45 | % | 0.60 | % | |||||||||||||
Net investment income, after Waivers | 2.10 | % | 2.00 | % | 2.01 | % | 1.38 | % | 2.34 | % | |||||||||||||
Portfolio turnover rate(e) | 13 | % | 6 | % | 9 | % | 24 | % | 15 | % |
(a) Based on average shares outstanding.
(b) Net investment income per share and the ratio of net investment income to average net assets include a special cash dividend received of $4 per share owned of Warner Chilcott PLC on August 29, 2012. Net investment income per share and the ratio of net investment income to average net assets excluding the special dividend are $0.43 and 0.87%, respectively.
(c) The mean between the last bid and ask prices.
(d) Net asset value total 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. Market price total return is calculated assuming an initial investment made at the market price at the beginning of the period, reinvestment of all dividends and distributions at market price during the period, and sale at the market price on the last day of the period. Total investment returns calculated for a period of less than one year are not annualized.
(e) Portfolio turnover rate is not annualized and does not include securities received or delivered from processing creations or redemptions.
See Notes to Financial Statements.
65
Financial Highlights (Continued)
PowerShares FTSE RAFI US 1500 Small-Mid Portfolio (PRFZ)
Year Ended April 30, | |||||||||||||||||||||||
2013 | 2012 | 2011 | 2010 | 2009 | |||||||||||||||||||
PER SHARE OPERATING PERFORMANCE: | |||||||||||||||||||||||
Net asset value at beginning of year | $ | 66.71 | $ | 70.66 | $ | 59.82 | $ | 34.96 | $ | 50.36 | |||||||||||||
Net investment income(a) | 1.13 | 0.73 | 0.50 | 0.32 | 0.46 | ||||||||||||||||||
Net realized and unrealized gain (loss) on investments | 11.08 | (4.04 | ) | 10.80 | 24.88 | (15.42 | ) | ||||||||||||||||
Total from investment operations | 12.21 | (3.31 | ) | 11.30 | 25.20 | (14.96 | ) | ||||||||||||||||
Distributions to shareholders from: | |||||||||||||||||||||||
Net investment income | (1.16 | ) | (0.64 | ) | (0.46 | ) | (0.34 | ) | (0.44 | ) | |||||||||||||
Net asset value at end of year | $ | 77.76 | $ | 66.71 | $ | 70.66 | $ | 59.82 | $ | 34.96 | |||||||||||||
Market price at end of year(b) | $ | 77.67 | $ | 66.72 | $ | 70.64 | $ | 59.79 | $ | 34.90 | |||||||||||||
NET ASSET VALUE TOTAL RETURN(c) | 18.56 | % | (4.60 | )% | 19.04 | % | 72.38 | %(d) | (29.79 | )% | |||||||||||||
MARKET PRICE TOTAL RETURN(c) | 18.41 | % | (4.56 | )% | 19.06 | % | 72.59 | % | (29.84 | )% | |||||||||||||
RATIOS/SUPPLEMENTAL DATA: | |||||||||||||||||||||||
Net assets at end of year (000's omitted) | $ | 563,763 | $ | 463,645 | $ | 409,826 | $ | 284,135 | $ | 94,399 | |||||||||||||
Ratio to average net assets of: | |||||||||||||||||||||||
Expenses, after Waivers | 0.39 | % | 0.39 | % | 0.39 | % | 0.39 | % | 0.58 | % | |||||||||||||
Expenses, prior to Waivers | 0.43 | % | 0.44 | % | 0.46 | % | 0.51 | % | 0.79 | % | |||||||||||||
Net investment income, after Waivers | 1.64 | % | 1.17 | % | 0.82 | % | 0.67 | % | 1.22 | % | |||||||||||||
Portfolio turnover rate(e) | 30 | % | 15 | % | 19 | % | 16 | % | 15 | % |
(a) Based on average shares outstanding.
(b) The mean between the last bid and ask prices.
(c) Net asset value total 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. Market price total return is calculated assuming an initial investment made at the market price at the beginning of the period, reinvestment of all dividends and distributions at market price during the period, and sale at the market price on the last day of the period. Total investment returns calculated for a period of less than one year are not annualized.
(d) Amount includes the effect of the Adviser pay-in for an economic loss of $0.17 per share. Had the pay-in not been made, the Net Asset Value Total Return would have been 71.89%.
(e) Portfolio turnover rate is not annualized and does not include securities received or delivered from processing creations or redemptions.
See Notes to Financial Statements.
66
Notes to Financial Statements
PowerShares Exchange-Traded Fund Trust
April 30, 2013
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 April 30, 2013, the Trust offered fifty-five portfolios. This report includes the following portfolios:
Full Name | Short Name | ||||||
PowerShares Dynamic MagniQuant Portfolio (PIQ) | "Dynamic MagniQuant Portfolio" | ||||||
PowerShares Dynamic Market Portfolio (PWC) | "Dynamic Market Portfolio" | ||||||
PowerShares Dynamic OTC Portfolio (PWO) | "Dynamic OTC Portfolio" | ||||||
PowerShares FTSE RAFI US 1000 Portfolio (PRF) | "FTSE RAFI US 1000 Portfolio" | ||||||
PowerShares FTSE RAFI US 1500 Small-Mid Portfolio (PRFZ) | "FTSE RAFI US 1500 Small-Mid Portfolio" |
Each portfolio (each, a "Fund" and collectively, the "Funds") represents a separate series of the Trust. The shares of the Funds are referred to herein as "Shares" or "Fund's Shares." Each Fund's Shares are listed and traded on NYSE Arca, Inc. ("NYSE Arca"), except for Shares of FTSE RAFI US 1500 Small-Mid Portfolio, which is listed and traded on The NASDAQ Stock Market LLC.
The market prices of each Fund's Shares may differ to some degree from the Fund's net asset value ("NAV"). Unlike conventional mutual funds, each Fund issues and redeems Shares on a continuous basis, at NAV, 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 each Fund's relevant index. Except when aggregated in Creation Units by Authorized Participants, the Shares are not individually redeemable securities of the Funds.
The investment objective of each Fund is to seek investment results that generally correspond (before fees and expenses) to the price and yield of its respective index listed below (each, an "Underlying Index"):
Fund | Index | ||||||
Dynamic MagniQuant Portfolio | Dynamic Top 200 IntellidexSM Index | ||||||
Dynamic Market Portfolio | Dynamic Market IntellidexSM Index | ||||||
Dynamic OTC Portfolio | Dynamic OTC IntellidexSM Index | ||||||
FTSE RAFI US 1000 Portfolio | FTSE RAFI US 1000 Index | ||||||
FTSE RAFI US 1500 Small-Mid Portfolio | FTSE RAFI US 1500 Small-Mid 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 ("GAAP") 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. In addition, the Funds monitor for material events or transactions that may occur or become known after the period-end date and before the date the financial statements are released to print.
A. Security Valuation
Securities, including restricted securities, are valued according to the following policies.
67
Notes to Financial Statements (Continued)
PowerShares Exchange-Traded Fund Trust
April 30, 2013
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 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 and closed-end registered investment companies that do not trade on an exchange are valued at the end of day NAV per share. Investments in open-end and closed-end registered investment companies that trade on an exchange are valued at the 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.
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 (for unlisted equities), yield (for debt obligations), quality, type of issue, coupon rate (for debt obligations), maturity (for debt obligations), individual trading characteristics and other market data. Securities with a demand feature exercisable within one to seven days are valued at par. Debt obligations are subject to interest rate and credit risks. In addition, all debt obligations involve some risk of default with respect to interest and/or principal payments.
Foreign securities' (including foreign exchange contracts) prices 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 New York Stock Exchange ("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 the Adviser determines are significant and 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 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' prices 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, American Depositary Receipts 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.
68
Notes to Financial Statements (Continued)
PowerShares Exchange-Traded Fund Trust
April 30, 2013
Securities for which market quotations are not readily available or became unreliable are valued at fair value as determined in good faith 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. Because of the inherent uncertainties of valuation, the values reflected in the financial statements may materially differ from the value received upon actual sale of those investments.
B. Other Risks
Index Risk. Unlike many investment companies, the Funds do not utilize an investing strategy that seeks returns in excess of each Fund's respective Underlying Index. Therefore, a Fund would not necessarily buy or sell a security unless that security is added or removed, respectively, from its respective Underlying Index even if that security generally is underperforming.
Equity Risk. Equity risk is the risk that the value of the securities a Fund holds will fall due to general market and economic conditions, perceptions regarding the industries in which the issuers of securities a Fund holds participate or factors relating to specific companies in which a Fund invests. For example, an adverse event, such as an unfavorable earnings report, may depress the value of equity securities a Fund holds; the price of securities of an issuer may be particularly sensitive to general movements in the stock market; or a drop in the stock market may depress the price of most or all of the securities a Fund holds. In addition, securities of an issuer in a Fund's portfolio may decline in price if the issuer fails to make anticipated dividend payments because, among other reasons, the issuer of the security experiences a decline in its financial condition.
Industry Concentration Risk. In following its methodology, each Fund's Underlying Index from time to time may be concentrated to a significant degree in securities of issuers located in a single industry or a sector. To the extent that an Underlying Index concentrates in the securities of issuers in a particular industry or sector, each Fund will also concentrate its investments to approximately the same extent. By concentrating its investments in an industry or sector, a Fund may face more risks than if it were diversified broadly over numerous industries or sectors. In addition, at times, an industry or sector may be out of favor and underperform other industries or the market as a whole. Any factors detrimental to the performance of such industry or sector will disproportionately impact a Fund's NAV.
Non-Correlation Risk. Each Fund's return may not match the return of its Underlying Index for a number of reasons. For example, each Fund incurs operating expenses not applicable to its Underlying Index, and incurs costs in buying and selling securities, especially when rebalancing the securities holdings to reflect changes in the composition of its Underlying Index. In addition, the performance of each Fund and its Underlying Index may vary due to asset valuation differences and differences between each Fund's portfolio and its Underlying Index resulting from legal restrictions, cost or liquidity constraints.
Small and Medium Capitalization Company Risk. Investing in securities of small and medium capitalization companies involves greater risk than customarily is associated with investing in larger, more established companies. These companies' securities may be more volatile and less liquid than those of more established companies. These securities may have returns that vary, sometimes significantly, from the overall securities market. Often small and medium capitalization companies and the industries in which they focus are still evolving and, as a result, they may be more sensitive to changing market conditions.
69
Notes to Financial Statements (Continued)
PowerShares Exchange-Traded Fund Trust
April 30, 2013
Over-the Counter Risk. For Dynamic OTC Portfolio, over-the-counter ("OTC") transactions involve risks in addition to those associated with transactions in securities traded on exchanges. OTC-listed companies may have limited product lines, markets or financial resources. Many OTC stocks trade less frequently and in smaller volume than exchange-listed stocks. The values of these stocks may be more volatile than exchange-listed stocks.
C. Federal Income Taxes
Each Fund intends to comply with the provisions of the Internal Revenue Code of 1986, as amended (the "Internal Revenue Code"), applicable to regulated investment companies and to 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 recorded in the financial statements.
Income and capital gain distributions are determined in accordance with federal income tax regulations, which may differ from GAAP. These timing 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 U.S. federal tax returns and tax returns in 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 Transactions and Investment Income
Investment transactions are accounted for on a trade date basis. Realized gains and losses from the sale or disposition of securities are computed on the specific identified cost basis. Interest income is recorded on the accrual basis. Dividend income (net of withholding tax, if any) is recorded on the ex-dividend date. Dividends and interest received by a 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.
Corporate actions (including cash dividends) are recorded net of non-reclaimable foreign tax withholdings on the ex-dividend date.
E. Expenses
Expenses of the Trust that are directly identifiable to a specific Fund are applied to that Fund. Expenses of the Trust that 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 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 related to its respective Underlying Index, any distribution fees or expenses, litigation expenses, fees payable to the Trust's Board members who are not "interested persons" (as defined in the 1940 Act) of the Trust (the "Independent Trustees") or Invesco PowerShares Capital Management LLC (the "Adviser"), expenses incurred in connection with the Board members' services, including travel expenses and legal fees of counsel for the Independent Trustees, acquired fund fees and expenses, if any, and extraordinary expenses.
70
Notes to Financial Statements (Continued)
PowerShares Exchange-Traded Fund Trust
April 30, 2013
F. Dividends and Distributions to Shareholders
Each Fund declares and pays dividends from net investment income, if any, to its shareholders quarterly and records such dividends on ex-dividend date. Generally, each Fund distributes net realized taxable capital gains, if any, annually in cash and records them on ex-dividend date. Such distributions on a tax basis are determined in conformity with federal income tax regulations, which may differ from GAAP. 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. Change in Accounting Policy – Equalization
The Funds previously followed the accounting practice known as equalization. Equalization accounting is utilized for book purposes to keep the continuing shareholders' per share equity in undistributed net investment income from being affected by the continuous sales and redemptions of capital shares. During the fiscal year ended April 30, 2013, all Funds discontinued the practice of equalization accounting for book purposes. The prior period financial statements have been restated to reflect the accounting change.
The change in policy has been accounted for in accordance with ASC 250 "Accounting Changes and Error Corrections." The change was implemented for consistent application of book and tax treatment related to the Funds' distributions. The result of the policy change did not have an impact on the Funds' net assets, net increase/decrease in net assets resulting from operations or per share net asset value. Additionally, the change does not have an impact on the amount or tax character of a Fund's distributions to shareholders or net asset value total return.
For financial reporting purposes, the amounts were reported in the Statements of Changes in Net Assets as "Undistributed net investment income (loss) included in the price of units issued and redeemed" as a component of the "Net increase (decrease) in net assets resulting from operations" with an offsetting amount included in "Net income (loss) equalization" included in the subtotal "Net increase (decrease) in net assets resulting from share transactions." The amount of equalization charges or credits previously reported and the amount in the current period had the change not been made were as follows:
Statements of Changes in Net Assets | |||||||||||
Net income (loss) equalization* | |||||||||||
For the year ended April 30, 2013 | For the year ended April 30, 2012 | ||||||||||
Dynamic MagniQuant Portfolio | $ | 4,694 | $ | 13,776 | |||||||
Dynamic Market Portfolio | (10,907 | ) | (27,567 | ) | |||||||
Dynamic OTC Portfolio | 21,191 | (405 | ) | ||||||||
FTSE RAFI US 1000 Portfolio | (797,967 | ) | (1,086,347 | ) | |||||||
FTSE RAFI US Portfolio 1500 Small-Mid Portfolio | (122,254 | ) | (168,937 | ) |
* An equal offsetting amount was made to the operations section of the Statements of Changes in Net Assets.
71
Notes to Financial Statements (Continued)
PowerShares Exchange-Traded Fund Trust
April 30, 2013
The per share impact of the net equalization charges and credits disclosed in previous financial statements and the amount in the current period had the change not been made were as follows:
Financial Highlights | |||||||||||||||||||||||
For the Year Ended April 30, | |||||||||||||||||||||||
2013 | 2012 | 2011 | 2010 | 2009 | |||||||||||||||||||
Dynamic MagniQuant Portfolio | $ | (0.01 | ) | $ | (0.02 | ) | $ | (0.01 | ) | $ | (0.00 | )(a) | $ | (0.01 | ) | ||||||||
Dynamic Market Portfolio | 0.00 | (a) | 0.01 | 0.00 | (a) | 0.00 | (a) | (0.01 | ) | ||||||||||||||
Dynamic OTC Portfolio | (0.04 | ) | 0.00 | (a) | (0.02 | ) | (0.01 | ) | (0.02 | ) | |||||||||||||
FTSE RAFI US 1000 Portfolio | 0.03 | 0.05 | 0.14 | 0.01 | (0.07 | ) | |||||||||||||||||
FTSE RAFI US Portfolio 1500 Small-Mid Portfolio | 0.02 | 0.03 | 0.03 | 0.08 | 0.00 | (a) |
(a) Amount represents less than $0.005.
H. Securities Lending
FTSE RAFI US 1000 Portfolio and FTSE RAFI US 1500 Small-Mid Portfolio may lend portfolio securities having a market value up to one-third of each Fund's total assets. Such loans are secured by cash collateral equal to no less than 102% of the market value of the loaned securities determined daily by the securities lending provider. Cash collateral received in connection with these loans is invested in an affiliated money market fund and is shown as such on the Schedule of Investments. It is the policy of these Funds to obtain additional collateral from or return excess collateral to the borrower by the end of the next business day, following the valuation date of the securities loaned. Therefore, the value of the collateral held may be temporarily less than the value of the securities on loan. Lending securities entails a risk of loss to a Fund, if and to the extent that, the market value of the securities loaned were to increase, and the borrower did not increase the collateral accordingly, and the borrower fails to return the securities. Upon the failure of the borrower to return the securities, collateral may be liquidated and the securities may be purchased on the open market to replace the loaned securities. A Fund could experience delays and costs in gaining access to the collateral. A Fund bears the risk of any deficiency in the amount of the collateral available for return to the borrower due to any loss on the collateral invested. Dividends received on cash collateral investments for securities lending transactions, which are net of compensation to counterparties, are included in Securities lending income on the Statements of Operations. The aggregate value of securities out on loan is shown on the Statements of Assets and Liabilities, if any.
Note 3. Investment Advisory Agreement and Other Agreements
The Trust has entered into an Investment Advisory Agreement with the Adviser pursuant to which the Adviser has overall responsibility 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 (except for the FTSE RAFI US 1000 Portfolio and the FTSE RAFI US 1500 Small-Mid Portfolio) has agreed to pay the Adviser an annual fee of 0.50% of the Fund's average daily net assets. Each of the FTSE RAFI US 1000 Portfolio and the FTSE RAFI US 1500 Small-Mid Portfolio has agreed to pay the Adviser an annual fee of 0.29% of the Fund's average daily net assets.
The Adviser has entered into an Amended and Restated Excess Expense Agreement (the "Expense Agreement") with the Trust. For the Dynamic MagniQuant Portfolio, the Adviser has agreed to waive fees and/or pay Fund expenses to the extent necessary to prevent the operating expenses (excluding interest expenses, brokerage commissions and other trading expenses, sub-licensing fees, offering costs, taxes, acquired fund fees and expenses, if any, and extraordinary expenses) of the Fund from exceeding 0.60% of
72
Notes to Financial Statements (Continued)
PowerShares Exchange-Traded Fund Trust
April 30, 2013
the Fund's average daily net assets per year (the "Expense Cap"), through at least August 31, 2014. The Expense Cap for the FTSE RAFI US 1000 Portfolio and the FTSE RAFI US 1500 Small-Mid Portfolio is 0.39% of each Fund's average daily net assets per year, through at least August 31, 2014, and sub-licensing fees are included in the expenses subject to the Expense Cap. Offering costs excluded from the Expense Cap are: (a) initial legal fees pertaining to the Funds' Shares offered for sale; (b) initial Securities and Exchange Commission and state registration fees; and (c) initial fees paid to be listed on an exchange. For the Dynamic Market Portfolio and the Dynamic OTC Portfolio, the Adviser has agreed to waive fees and/or pay Fund expenses to the extent necessary to prevent the operating expenses of each Fund (excluding interest expenses, brokerage commissions and other trading expenses, taxes, acquired fund fees and expenses, if any, and extraordinary expenses) from exceeding 0.60% of the Fund's average daily net assets per year, through at least August 31, 2014.
For the Dynamic MagniQuant Portfolio, the FTSE RAFI US 1000 Portfolio and the FTSE RAFI US 1500 Small-Mid Portfolio, the Expense Agreement provides that the fees waived or expenses borne by the Adviser are subject to recapture by the Adviser for up to three years, but no recapture payment will be made by a Fund if it would result in the Fund exceeding its Expense Cap as specified above. For the Dynamic Market Portfolio and the Dynamic OTC Portfolio, the expenses borne by the Adviser are not subject to recapture.
The amounts available for potential future recapture by the Adviser under the Expense Agreement and the expiration schedule at April 30, 2013 are as follows:
Total Potential | Potential Recapture Amounts Expiring | ||||||||||||||||||
Recapture Amounts | 04/30/14 | 04/30/15 | 4/30/16 | ||||||||||||||||
Dynamic MagniQuant Portfolio | $ | 322,019 | $ | 121,412 | $ | 107,958 | $ | 92,649 | |||||||||||
FTSE RAFI US 1000 Portfolio | 1,380,445 | 439,944 | 420,812 | 519,689 | |||||||||||||||
FTSE RAFI US Portfolio 1500 Small-Mid Portfolio | 638,785 | 240,876 | 186,171 | 211,738 |
The Trust has entered into a Distribution Agreement with Invesco Distributors, Inc. (the "Distributor"), which serves as the distributor of Creation Units for each Fund. The Distributor does not maintain a secondary market in the Shares. The Funds are not charged any fees pursuant to the Distribution Agreement. The Distributor is an affiliate of the Adviser.
The Adviser has entered into a licensing agreement for each Fund with the following entities (each a "Licensor"):
Fund | Licensor | ||||||
Dynamic MagniQuant Portfolio | NYSE Arca, Inc. | ||||||
Dynamic Market Portfolio | NYSE Arca, Inc. | ||||||
Dynamic OTC Portfolio | NYSE Arca, Inc. | ||||||
FTSE RAFI US 1000 Portfolio | FTSE International Ltd. | ||||||
FTSE RAFI US 1500 Small-Mid Portfolio | FTSE International Ltd. |
Each Underlying Index name trademark is owned by its respective Licensor. These trademarks have been licensed to the Adviser for use with the Funds. Each Fund is entitled to use its Underlying Index pursuant
73
Notes to Financial Statements (Continued)
PowerShares Exchange-Traded Fund Trust
April 30, 2013
to the Trust's sub-licensing agreement with the Adviser. The Funds are required to pay the sub-licensing fees that are shown on the Statements of Operations. 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 Trust has entered into service agreements whereby The Bank of New York Mellon, a wholly-owned subsidiary of The Bank of New York Mellon Corporation, serves as the administrator, custodian, fund accountant and transfer agent for each Fund.
Note 4. Investments in Affiliates
The Adviser of the Funds is a subsidiary of Invesco Ltd. and therefore Invesco Ltd. is considered to be affiliated with the FTSE RAFI US 1000 Portfolio. Invesco Mortgage Capital, Inc. REIT, FTSE RAFI 1000 Portfolio and FTSE RAFI US 1500 Small-Mid Portfolio are affiliated by each having an investment adviser that is a wholly owned subsidiary of Invesco Ltd. The table below shows each Fund's transactions in and earnings from its respective investment in Invesco Ltd. or Invesco Mortgage Capital, Inc. REIT for the fiscal year end April 30, 2013.
FTSE RAFI US 1000 Portfolio
Value April 30, 2012 | Purchases at Cost | Proceeds from Sales | Change in Unrealized Appreciation (Depreciation) | Realized Gain | Value April 30, 2013 | Dividend Income | |||||||||||||||||||||||||
Invesco Ltd. | $ | 500,526 | $ | 713,755 | $ | (66,260 | ) | $ | 197,442 | $ | 7,201 | $ | 1,352,664 | $ | 14,329 | ||||||||||||||||
Invesco Mortgage Capital Inc. REIT | — | 218,454 | (1,277 | ) | (1,259 | ) | 8 | 215,926 | 6,428 |
FTSE RAFI US 1500 Small-Mid Portfolio
Value April 30, 2012 | Purchases at Cost | Proceeds from Sales | Change in Unrealized Appreciation | Realized Gain | Value April 30, 2013 | Dividend Income | |||||||||||||||||||||||||
Invesco Mortgage Capital, Inc. REIT | $ | 476,351 | $ | 160,413 | $ | (750,576 | ) | $ | 26,267 | $ | 87,545 | $ | — | $ | 45,079 |
Note 5. Additional Valuation Information
GAAP defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date, under current market conditions. GAAP establishes a hierarchy that prioritizes the inputs to valuation methods, giving the highest priority to readily available unadjusted quoted prices in an active market for identical assets (Level 1) and the lowest priority to significant unobservable inputs (Level 3), generally when market prices are not readily available or are unreliable. Based on the valuation inputs, the securities or other investments are tiered into one of three levels. Changes in valuation methods may result in transfers in or out of an investment's assigned level:
Level 1 – Prices are determined using quoted prices in an active market for identical assets.
Level 2 – Prices are determined using other significant observable inputs. Observable inputs are inputs that other market participants may use in pricing a security. These may include quoted prices for similar securities, interest rates, prepayment speeds, credit risk, yield curves, loss severities, default rates, discount rates, volatilities and others.
74
Notes to Financial Statements (Continued)
PowerShares Exchange-Traded Fund Trust
April 30, 2013
Level 3 – Prices are determined using significant unobservable inputs. In situations where quoted prices or observable inputs are unavailable (for example, when there is little or no market activity for an investment at the end of the period), unobservable inputs may be used. Unobservable inputs reflect the Fund's own assumptions about the factors market participants would use in determining fair value of the securities or instruments and would be based on the best available information.
Except for the Fund listed below, as of April 30, 2013, the securities in each Fund were valued based on Level 1 inputs (see the Schedule of Investments for security categories). The level assigned to the securities valuations may not be an indication of the risk or liquidity associated with investing in those securities. Because of the inherent uncertainties of valuation, the values reflected in the financial statements may materially differ from the value received upon actual sale of those investments.
Investments in Securities | |||||||||||||||||||
Level 1 | Level 2 | Level 3 | Total | ||||||||||||||||
FTSE RAFI US 1500 Small-Mid Portfolio | |||||||||||||||||||
Equity Securities | $ | 563,411,059 | $ | 185,934 | $ | 0 | $ | 563,596,993 | |||||||||||
Money Market Fund | 39,394,588 | — | — | 39,394,588 | |||||||||||||||
Total Investments | $ | 602,805,647 | $ | 185,934 | $ | 0 | $ | 602,991,581 |
Note 6. Distributions to Shareholders and Tax Components of Net Assets
Tax Character of Distributions to Shareholders Paid During the Fiscal Years Ended April 30, 2013 and 2012:
2013 | 2012 | ||||||||||
Ordinary Income | Ordinary Income | ||||||||||
Dynamic MagniQuant Portfolio | $ | 330,631 | $ | 131,104 | |||||||
Dynamic Market Portfolio | 2,277,011 | 1,361,510 | |||||||||
Dynamic OTC Portfolio | 376,429 | 21,198 | |||||||||
FTSE RAFI US 1000 Portfolio | 30,575,583 | 23,834,366 | |||||||||
FTSE RAFI US 1500 Small-Mid Portfolio | 7,992,111 | 3,690,489 |
Tax Components of Net Assets at Fiscal Year-End:
Undistributed Ordinary Income | Temporary Book/Tax Differences | Net Unrealized Appreciation – Investment Securities | Net Unrealized Appreciation (Depreciation) – Other Investments | Capital Loss Carryforward | Post-October Capital Losses Deferrals* | Shares of Beneficial Interest | Total Net Assets | ||||||||||||||||||||||||||||
Dynamic MagniQuant Portfolio | $ | 8,932 | $ | (7,866 | ) | $ | 2,716,259 | $ | — | $ | (31,597,562 | ) | $ | (347,337 | ) | $ | 48,142,323 | $ | 18,914,749 | ||||||||||||||||
Dynamic Market Portfolio | 171,760 | (19,785 | ) | 13,413,533 | — | (371,025,294 | ) | (1,158,198 | ) | 499,275,548 | 140,657,564 | ||||||||||||||||||||||||
Dynamic OTC Portfolio | 10,248 | (8,614 | ) | 2,772,472 | — | (81,138,870 | ) | (1,052,916 | ) | 101,577,628 | 22,159,948 |
75
Notes to Financial Statements (Continued)
PowerShares Exchange-Traded Fund Trust
April 30, 2013
Undistributed Ordinary Income | Temporary Book/Tax Differences | Net Unrealized Appreciation – Investment Securities | Net Unrealized Appreciation (Depreciation) – Other Investments | Capital Loss Carryforward | Post-October Capital Losses Deferrals* | Shares of Beneficial Interest | Total Net Assets | ||||||||||||||||||||||||||||
FTSE RAFI US 1000 Portfolio | $ | 4,128,662 | $ | (43,658 | ) | $ | 259,784,614 | $ | — | $ | (139,728,679 | ) | $ | (5,348,352 | ) | $ | 1,659,657,464 | $ | 1,778,450,051 | ||||||||||||||||
FTSE RAFI US 1500 Small-Mid Portfolio | 1,256,585 | (16,785 | ) | 38,114,541 | (364 | ) | (17,702,538 | ) | (529,094 | ) | 542,640,371 | 563,762,716 |
* The Funds will elect to defer net capital losses incurred after October 31 ("Post-October Capital Losses") within the taxable year, that are deemed to arise on the first business day of each Fund's next taxable year.
Capital loss carryforward is calculated and reported as of a specific date. Results of transactions and other activity after that date may affect the amount of capital loss carryforward actually available for the Funds to utilize. The Regulated Investment Company Modernization Act of 2010 eliminated the eight-year carryover period for capital losses that arise in taxable years beginning after its enactment date of December 22, 2010. Consequently, these capital losses can be carried forward for an unlimited period. However, capital losses with an expiration period may not be used to offset capital gains until all net capital losses without an expiration date have been utilized. Additionally, post-enactment capital loss carryforwards will retain their character as either short-term or long-term capital losses instead of as short-term capital losses as under prior law. The ability to utilize capital loss carryforward in the future may be limited under Internal Revenue Code rules and related regulations based on the results of future transactions.
The following Funds have a capital loss carryforward as of April 30, 2013, which expires as follows:
Post-effective no expiration | |||||||||||||||||||||||||||||||||||||||||||||||
2014 | 2015 | 2016 | 2017 | 2018 | 2019 | Short-term | Long-term | Total* | Utilized | Expired | |||||||||||||||||||||||||||||||||||||
Dynamic MagniQuant Portfolio | $ | — | $ | — | $ | 5,211,608 | $ | 10,595,808 | $ | 7,191,135 | $ | 3,524,581 | $ | 2,624,138 | $ | 2,450,292 | $ | 31,597,562 | $ | — | $ | — | |||||||||||||||||||||||||
Dynamic Market Portfolio | 13,686,812 | 65,552,628 | 39,899,556 | 96,635,542 | 104,214,879 | 15,461,574 | 35,337,138 | 237,165 | 371,025,294 | — | 5,021,729 | ||||||||||||||||||||||||||||||||||||
Dynamic OTC Portfolio | 5,449,844 | 21,767,708 | 11,353,752 | 15,764,010 | 14,947,690 | 3,683,431 | 8,046,056 | 126,379 | 81,138,870 | — | 5,297,385 | ||||||||||||||||||||||||||||||||||||
FTSE RAFI US 1000 Portfolio | — | 44,432 | 1,148,192 | 44,806,580 | 49,808,238 | 38,490,195 | — | 5,431,042 | 139,728,679 | — | — | ||||||||||||||||||||||||||||||||||||
FTSE RAFI US 1500 Small-Mid Portfolio | — | 5,818 | 128,460 | 8,229,508 | 5,168,127 | 2,475,894 | — | 1,694,731 | 17,702,538 | — | — |
* Capital loss carryforward as of the date listed above is reduced for limitations, if any, to the extent required by the Internal Revenue Code.
76
Notes to Financial Statements (Continued)
PowerShares Exchange-Traded Fund Trust
April 30, 2013
Note 7. Investment Transactions
For the fiscal year ended April 30, 2013, 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 | ||||||||||
Dynamic MagniQuant Portfolio | $ | 20,772,385 | $ | 20,691,219 | |||||||
Dynamic Market Portfolio | 218,016,104 | 216,531,438 | |||||||||
Dynamic OTC Portfolio | 28,719,389 | 29,978,346 | |||||||||
FTSE RAFI US 1000 Portfolio | 198,982,662 | 195,000,875 | |||||||||
FTSE RAFI US Portfolio 1500 Small-Mid Portfolio | 147,006,271 | 144,038,856 |
For the fiscal year ended April 30, 2013, in-kind transactions associated with creations and redemptions were as follows:
Securities Received | Securities Delivered | ||||||||||
Dynamic MagniQuant Portfolio | $ | 22,646,292 | $ | 25,326,273 | |||||||
Dynamic Market Portfolio | 189,198,779 | 203,560,197 | |||||||||
Dynamic OTC Portfolio | 27,121,224 | 33,347,059 | |||||||||
FTSE RAFI US 1000 Portfolio | 317,451,025 | 209,714,173 | |||||||||
FTSE RAFI US Portfolio 1500 Small-Mid Portfolio | 129,514,548 | 109,629,043 |
Gains (losses) on in-kind transactions are generally not considered taxable gains (losses) for federal income tax purposes.
At April 30, 2013, the aggregate cost and the net unrealized appreciation (depreciation) of investments for tax purposes were as follows:
Cost | Net Unrealized Appreciation (Depreciation) | Gross Unrealized Appreciation | Gross Unrealized (Depreciation) | ||||||||||||||||
Dynamic MagniQuant Portfolio | $ | 16,280,062 | $ | 2,716,259 | $ | 2,940,322 | $ | (224,063 | ) | ||||||||||
Dynamic Market Portfolio | 127,582,305 | 13,413,533 | 14,751,005 | (1,337,472 | ) | ||||||||||||||
Dynamic OTC Portfolio | 19,465,379 | 2,772,472 | 2,991,164 | (218,692 | ) | ||||||||||||||
FTSE RAFI US 1000 Portfolio | 1,541,178,441 | 259,784,614 | 333,626,685 | (73,842,071 | ) | ||||||||||||||
FTSE RAFI US 1500 Small-Mid Portfolio | 564,877,040 | 38,114,541 | 85,971,511 | (47,856,970 | ) |
Note 8. Reclassification of Permanent Differences
Primarily as a result of differing book/tax treatment of in-kind transactions on April 30, 2013, amounts were reclassified between undistributed net investment income (loss), undistributed net realized gain (loss)
77
Notes to Financial Statements (Continued)
PowerShares Exchange-Traded Fund Trust
April 30, 2013
and shares of beneficial interest. These reclassifications had no effect on the net assets of each Fund. For the fiscal year ended April 30, 2013, the reclassifications were as follows:
Undistributed Net Investment Income (Loss) | Undistributed Net Realized Gain (Loss) | Shares of Beneficial Interest | |||||||||||||
Dynamic MagniQuant Portfolio | $ | (10,138 | ) | $ | (3,324,287 | ) | $ | 3,334,425 | |||||||
Dynamic Market Portfolio | 73,276 | (23,921,559 | ) | 23,848,283 | |||||||||||
Dynamic OTC Portfolio | (4,583 | ) | 1,117,570 | (1,112,987 | ) | ||||||||||
FTSE RAFI US 1000 Portfolio | 5,549 | (62,209,133 | ) | 62,203,584 | |||||||||||
FTSE RAFI US 1500 Small-Mid Portfolio | 231,983 | (32,982,387 | ) | 32,750,404 |
Note 9. Trustees' Fees
The Funds compensate each Independent Trustee. The Trustee who is an "interested person" (the "Non-Independent Trustee") of the Trust does not receive any Trustees' fees.
The Trust has adopted a deferred compensation plan (the "Plan"). Under the Plan, an Independent Trustee who has executed a Deferred Fee Agreement (a "Participating Trustee") may defer receipt of all or a portion of his compensation ("Deferral Fees"). Such Deferral Fees are deemed to be invested in select PowerShares Funds. The Deferral Fees payable to the Participating Trustee are valued as of the date such Deferral 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 distributions or with declines in the value of the Shares selected.
Note 10. Capital
Shares are created and redeemed by the Trust only in Creation Units of 50,000 Shares. Only Authorized Participants are permitted to purchase or redeem Creation Units from the Funds. Such transactions are generally permitted on an in-kind basis, with a balancing cash component to equate the transaction to the NAV per Share of a 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 eligible for trading by the Authorized Participant or as a result of other market circumstances.
Each Fund may issue Shares in advance of receipt of a basket of securities ("Deposit Securities") subject to various conditions, including a requirement to maintain on deposit with the Trust cash at least equal to 105% of the market value of the missing Deposit Securities. In accordance with each Fund's Participant Agreement, Creation Units will be issued to an Authorized Participant, notwithstanding the fact that the corresponding Deposit Securities 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 105%, which the Adviser may change from time to time, of the value of the missing Deposit Securities.
Transactions in a Fund's Shares are disclosed in detail on the Statements of Changes in Net Assets.
78
Notes to Financial Statements (Continued)
PowerShares Exchange-Traded Fund Trust
April 30, 2013
Note 11. 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. Each Independent Trustee is also indemnified against certain liabilities arising out of the performance of his duties to the Trust pursuant to an Indemnification Agreement between the Independent Trustee and 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.
79
Report of Independent Registered Public Accounting Firm
To the Board of Trustees and Shareholders of PowerShares Exchanged-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 PowerShares Dynamic MagniQuant Portfolio, PowerShares Dynamic Market Portfolio, PowerShares Dynamic OTC Portfolio, PowerShares FTSE RAFI US 1000 Portfolio and PowerShares FTSE RAFI US 1500 Small-Mid Portfolio (each an individual portfolio of PowerShares Exchange-Traded Fund Trust, hereafter referred to as the "Funds") at April 30, 2013, the results of each of their operations for the year then ended, the change in each of their net assets for each of the two years in the period then ended and the financial highlights for each of the five years in the period then ended, 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 Funds' 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, 2013 by correspondence with the custodian and brokers, provide a reasonable basis for our opinion.
As discussed in note 2G of the Notes to the Financial Statements, the Funds changed their accounting policy to discontinue the use of equalization accounting for book purposes.
/s/ PricewaterhouseCoopers LLP
Chicago, IL
June 25, 2013
80
Tax Information
Form 1099-DIV, Form 1042-S and other year-end tax information provide shareholders with actual calendar year amounts that should be included in their tax returns. Shareholders should consult their tax advisors.
The following distribution information is being provided as required by the Internal Revenue Code or to meet a specific state's requirement.
Each Fund designates the following amounts or, if subsequently determined to be different the maximum amount allowable for its fiscal year ended April 30, 2013:
Federal Income Tax Information
Qualified Dividend Income* | Dividends Received Deduction* | ||||||||||
Dynamic MagniQuant Portfolio | 100 | % | 100 | % | |||||||
Dynamic Market Portfolio | 100 | % | 100 | % | |||||||
Dynamic OTC Portfolio | 100 | % | 92 | % | |||||||
FTSE RAFI US 1000 Portfolio | 100 | % | 100 | % | |||||||
FTSE RAFI US 1500 Small-Mid Portfolio | 80 | % | 73 | % |
* The above percentages are based on ordinary income dividends paid to shareholders during the Fund's fiscal year.
81
Trustees and Officers
The Independent Trustees, the Non-Independent 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 a Trustee are shown below.
The Trustees and officers information is current as of April 30, 2013.
Name, Address and Age of Independent Trustees | 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 Complex** Overseen by Independent Trustees | Other Directorships Held by Independent Trustees During the Past 5 Years | ||||||||||||||||||
Ronn R. Bagge (55) c/o Invesco PowerShares Capital Management LLC 301 West Roosevelt Road Wheaton, IL 60187 | Trustee | Since 2003 | Founder and Principal, YQA Capital Management LLC (1998-Present); formerly Owner/CEO of Electronic Dynamic Balancing Co., Inc. (high-speed rotating equipment service provider). | 113 | None | ||||||||||||||||||
Todd J. Barre (55) c/o Invesco PowerShares Capital Management LLC 301 West Roosevelt Road Wheaton, IL 60187 | Trustee | Since 2010 | Assistant Professor of Business, Trinity Christian College (2010-Present); formerly, Vice President and Senior Investment Strategist (2001-2008), Director of Open Architecture and Trading (2007-2008), Head of Fundamental Research (2004-2007) and Vice President and Senior Fixed Income Strategist (1994-2001), BMO Financial Group/Harris Private Bank. | 113 | None |
* This is the date the Independent Trustee began serving the Trust. Each Trustee serves an indefinite term, until his successor is elected.
** Fund Complex includes all open-end funds (including all of their portfolios) advised by the Adviser. At May 9, 2013, the Fund Complex consisted of the Trust's 55 portfolios and three other exchange-traded fund trusts with 58 portfolios advised by the Adviser.
82
Trustees and Officers (Continued)
Name, Address and Age of Independent Trustees | 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 Complex** Overseen by Independent Trustees | Other Directorships Held by Independent Trustees During the Past 5 Years | ||||||||||||||||||
Marc M. Kole (52) c/o Invesco PowerShares Capital Management LLC 301 West Roosevelt Road Wheaton, IL 60187 | Trustee | Since 2006 | Formerly, Chief Financial Officer, Hope Network (social services) (2008-2012); Assistant Vice President and Controller, Priority Health (health insurance) (2005-2008); Senior Vice President of Finance, United Healthcare (2004-2005); Senior Vice President of Finance, Oxford Health Plans (2000-2004). | 113 | None | ||||||||||||||||||
Yung Bong Lim (48) c/o Invesco PowerShares Capital Management LLC 301 West Roosevelt Road Wheaton, IL 60187 | Trustee | Since 2013 | Managing Partner, Residential Dynamics Group LLC (2008-Present); formerly, Managing Director, Citadel Investment Group, L.L.C. (1999-2007). | 58 | None | ||||||||||||||||||
Philip M. Nussbaum (51) c/o Invesco PowerShares Capital Management LLC 301 West Roosevelt Road Wheaton, IL 60187 | Trustee | Since 2003 | Chairman, Performance Trust Capital Partners (2004-Present). | 113 | None |
* This is the date the Independent Trustee began serving the Trust. Each Trustee serves an indefinite term, until his successor is elected.
** Fund Complex includes all open-end funds (including all of their portfolios) advised by the Adviser. At May 9, 2013, the Fund Complex consisted of the Trust's 55 portfolios and three other exchange-traded fund trusts with 58 portfolios advised by the Adviser.
83
Trustees and Officers (Continued)
Name, Address and Age of Independent Trustees | 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 Complex** Overseen by Independent Trustees | Other Directorships Held by Independent Trustees During the Past 5 Years | ||||||||||||||||||
Gary R. Wicker (51) c/o Invesco PowerShares Capital Management LLC 301 West Roosevelt Road Wheaton, IL 60187 | Trustee | Since 2013 | Senior Vice President of Global Finance and Chief Financial Officer at RBC Ministries (publishing company) (since 2013); formerly, Executive Vice President and Chief Financial Officer, Zondervan Publishing (A division of Harper Collins/NewsCorp) (2007-2012); Senior Vice President and Group Controller (2005-2006), Senior Vice President and Chief Financial Officer (2003-2004), Chief Financial Officer (2001-2003), Vice President, Finance and Controller (1999-2001) and Assistant Controller (1997-1999), divisions of The Thomson Corporation (information services provider). | 58 | None |
* This is the date the Independent Trustee began serving the Trust. Each Trustee serves an indefinite term, until his successor is elected.
** Fund Complex includes all open-end funds (including all of their portfolios) advised by the Adviser. At May 9, 2013, the Fund Complex consisted of the Trust's 55 portfolios and three other exchange-traded fund trusts with 58 portfolios advised by the Adviser.
84
Trustees and Officers (Continued)
Name, Address and Age of Independent Trustees | 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 Complex** Overseen by Independent Trustees | Other Directorships Held by Independent Trustees During the Past 5 Years | ||||||||||||||||||
Donald H. Wilson (53) c/o Invesco PowerShares Capital Management LLC 301 West Roosevelt Road Wheaton, IL 60187 | Chairman of the Board and Trustee | Chairman since 2012; Trustee since 2006 | Chairman and Chief Executive Officer, Stone Pillar Advisers, Ltd. (2010-Present); formerly, Chief Operating Officer, AMCORE Financial, Inc. (bank holding company) (2007-2009); Executive Vice President and Chief Financial Officer, AMCORE Financial, Inc. (2006-2007); Senior Vice President and Treasurer, Marshall & Ilsley Corp. (bank holding company) (1995-2006). | 113 | None |
* This is the date the Independent Trustee began serving the Trust. Each Trustee serves an indefinite term, until his successor is elected.
** Fund Complex includes all open-end funds (including all of their portfolios) advised by the Adviser. At May 9, 2013, the Fund Complex consisted of the Trust's 55 portfolios and three other exchange-traded fund trusts with 58 portfolios advised by the Adviser.
85
Trustees and Officers (Continued)
The Non-Independent Trustee and the 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 Non-Independent Trustee and the other directorships, if any, held by the Non-Independent Trustee are shown below.
Name, Address and Age of Non-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 Complex** Overseen by Non- Independent Trustee | Other Directorships Held by Non-Independent Trustee During the Past 5 Years | ||||||||||||||||||
Kevin M. Carome (57) Invesco Ltd. Two Peachtree Pointe 1555 Peachtree St., N.E., Suite 1800 Atlanta, GA 30309 | Trustee | Since 2010 | Senior Managing Director, Secretary and General Counsel, Invesco Ltd. (2006-Present); Director, Invesco Advisers, Inc. (2009-Present); formerly, Senior Vice President, Secretary and General Counsel, Invesco Advisers, Inc. (2003-2005); Senior Vice President and General Counsel, Liberty Financial Companies, Inc. (2000-2001); General Counsel of certain investment management subsidiaries of Liberty Financial Companies, Inc. (1998-2000); Associate General Counsel, Liberty Financial Companies, Inc. (1993-1998); Associate, Ropes & Gray LLP. | 113 | None |
* This is the date the Non-Independent Trustee began serving the Trust. Each Trustee serves an indefinite term, until his successor is elected.
** Fund Complex includes all open-end funds (including all of their portfolios) advised by the Adviser. At May 9, 2013, the Fund Complex consisted of the Trust's 55 portfolios and three other exchange-traded fund trusts with 58 portfolios advised by the Adviser.
86
Trustees and Officers (Continued)
Name, Address and Age of Executive Officer | Position(s) Held with Trust | Length of Time Served* | Principal Occupation(s) During Past 5 Years | ||||||||||||
Andrew Schlossberg (39) Invesco Management Group, Inc. 11 Greenway Plaza Suite 1000 Houston, TX 77046 | President | Since 2009 | Managing Director, U.S. head of business strategy and chief marketing officer for Invesco Ltd. in the United States (2008-Present); Director, Invesco Distributors, Inc. (2012-Present); and Senior Vice President, Invesco Advisers, Inc. (formerly known as Invesco Institutional (N.A.), Inc.) (registered investment adviser) (2009-Present); formerly, Mr. Schlossberg served in multiple roles within Invesco, including head of corporate development, as well as global leadership roles in strategy and product development in the company's North American Institutional and Retirement divisions (2002-2007). | ||||||||||||
Peter Hubbard (32) Invesco PowerShares Capital Management LLC 301 West Roosevelt Road Wheaton, IL 60187 | Vice President | Since 2009 | Vice President and Director of Portfolio Management – Invesco PowerShares Capital Management LLC (2008-Present); formerly, Portfolio Manager, Invesco PowerShares Capital Management LLC (2007-2008); Research Analyst, Invesco PowerShares Capital Management LLC (2005-2007); Research Analyst and Trader, Ritchie Capital, a hedge fund operator (2003-2005). | ||||||||||||
David Warren (55) Invesco Canada Ltd. 5140 Yonge Street Suite 900, Toronto, Ontario M2N 6X7 | Vice President | Since 2009 | Director, Executive Vice President and Chief Financial Officer, Invesco Canada Ltd. (formerly, Invesco Trimark Ltd.) and Chief Administrative Officer, North American Retail, Invesco Ltd. (2007-Present); Senior Vice President, Invesco Management Group, Inc. (2007-Present); Director, Executive Vice President and Chief Financial Officer, Invesco, Inc.; Director, Invesco Canada Holdings Inc.; formerly, Director, Executive Vice President and Chief Financial Officer, Invesco Canada Ltd. (formerly, Invesco Trimark Ltd.) (2000-2006). |
* This is the period for which the Officers began serving the Trust. Each Officer serves an indefinite term, until his or her successor is elected.
87
Trustees and Officers (Continued)
Name, Address and Age of Executive Officer | Position(s) Held with Trust | Length of Time Served* | Principal Occupation(s) During Past 5 Years | ||||||||||||
Sheri Morris (49) Invesco Management Group, Inc. 11 Greenway Plaza Suite 1000 Houston, TX 77046-1173 | Vice President | Since 2012 | Vice President, Treasurer and Principal Financial Officer, The Invesco Funds; Vice President, Invesco Advisers, Inc. (formerly known as Invesco Institutional (N.A.), Inc.) (registered investment adviser) (2009-Present) and Vice President, PowerShares Exchange-Traded Fund Trust, PowerShares Exchange-Traded Fund Trust II, PowerShares India Exchange-Traded Fund Trust and PowerShares Actively Managed Exchange-Traded Fund Trust; formerly, Treasurer, PowerShares Exchange-Traded Fund Trust, PowerShares Exchange-Traded Fund Trust II, PowerShares India Exchange-Traded Fund Trust and PowerShares Actively Managed Exchange-Traded Fund Trust (2012-2013); formerly, Vice President, Invesco Advisers, Inc., Invesco Aim Capital Management, Inc. and Invesco Aim Private Asset Management, Inc.; Assistant Vice President and Assistant Treasurer, The Invesco Funds and Assistant Vice President, Invesco Advisers, Inc., Invesco Aim Capital Management, Inc. and Invesco Aim Private Asset Management, Inc. |
* This is the period for which the Officers began serving the Trust. Each Officer serves an indefinite term, until his or her successor is elected.
88
Trustees and Officers (Continued)
Name, Address and Age of Executive Officer | Position(s) Held with Trust | Length of Time Served* | Principal Occupation(s) During Past 5 Years | ||||||||||||
Steven M. Hill (48) Invesco PowerShares Capital Management LLC 301 West Roosevelt Road Wheaton, IL 60187 | Vice President and Treasurer | Since 2012 Since 2013 | Vice President and Treasurer, PowerShares Exchange-Traded Fund Trust, PowerShares Exchange-Traded Fund Trust II, PowerShares India Exchange-Traded Fund Trust and PowerShares Actively Managed Exchange-Traded Fund Trust (since 2013); Head of Global ETF Administration, Invesco PowerShares Capital Management LLC; formerly, Treasurer, PowerShares Exchange-Traded Fund Trust, PowerShares Exchange-Traded Fund Trust II, PowerShares India Exchange-Traded Fund Trust and PowerShares Actively Managed Exchange-Traded Fund Trust (2011-2012); Senior Managing Director and Chief Financial Officer, Destra Capital Management LLC and its subsidiaries (2010-2011); Chief Financial Officer, Destra Investment Trust and Destra Investment Trust II (2010-2011); Senior Managing Director, Claymore Securities, Inc. (2003-2010); and Chief Financial Officer, Claymore sponsored mutual funds (2003-2010). | ||||||||||||
Christopher Joe (44) Invesco Management Group, Inc. 11 Greenway Plaza Suite 1000 Houston, TX 77046-1173 | Chief Compliance Officer | Since 2012 | U.S. Compliance Director, Invesco, Ltd.; Chief Compliance Officer, Invesco Investment Advisers, LLC (registered investment adviser); formerly, Assistant Fund Accounting Manager, Invesco, Ltd. |
* This is the period for which the Officers began serving the Trust. Each Officer serves an indefinite term, until his or her successor is elected.
89
Trustees and Officers (Continued)
Name, Address and Age of Executive Officer | Position(s) Held with Trust | Length of Time Served* | Principal Occupation(s) During Past 5 Years | ||||||||||||
Anna Paglia (39) Invesco PowerShares Capital Management LLC 301 West Roosevelt Road Wheaton, IL 60187 | Secretary | Since 2011 | Secretary, PowerShares Exchange-Traded Fund Trust, PowerShares Exchange-Traded Fund Trust II, PowerShares India Exchange-Traded Fund Trust, and PowerShares Actively Managed Exchange-Traded Fund Trust; Head of Legal, Invesco PowerShares Capital Management LLC (2010-Present); formerly, Partner, K&L Gates LLP (formerly, Bell Boyd & Lloyd LLP) (2007-2010); Associate Counsel at Barclays Global Investors Ltd. (2004-2006). |
Availability of Additional Information About the Trustees
The Statement of Additional Information includes additional information about the Trustees and is
available, without charge, upon request at (800) 983-0903.
* This is the period for which the Officers began serving the Trust. Each Officer serves an indefinite term, until his or her successor is elected.
90
Board Considerations Regarding Approval of Continuation of Investment Advisory Agreement
At a meeting held on April 18, 2013, the Board of Trustees of the PowerShares Exchange-Traded Fund Trust (the "Trust"), including the Independent Trustees, approved the continuation of the Investment Advisory Agreement between Invesco PowerShares Capital Management LLC (the "Adviser") and the Trust for the following 53 series (each, a "Fund" and together, the "Funds"):
PowerShares Aerospace & Defense Portfolio
PowerShares Buyback AchieversTM Portfolio
PowerShares CleantechTM Portfolio
PowerShares Dividend AchieversTM Portfolio
PowerShares DWA Technical LeadersTM Portfolio
PowerShares Dynamic Basic Materials Sector Portfolio
PowerShares Dynamic Biotechnology & Genome Portfolio
PowerShares Dynamic Building & Construction Portfolio
PowerShares Dynamic Consumer Discretionary Sector Portfolio
PowerShares Dynamic Consumer Staples Sector Portfolio
PowerShares Dynamic Energy Exploration & Production Portfolio
PowerShares Dynamic Energy Sector Portfolio
PowerShares Dynamic Financial Sector Portfolio
PowerShares Dynamic Food & Beverage Portfolio
PowerShares Dynamic Healthcare Sector Portfolio
PowerShares Dynamic Industrials Sector Portfolio
PowerShares Dynamic Large Cap Growth Portfolio
PowerShares Dynamic Large Cap Value Portfolio
PowerShares Dynamic Leisure and Entertainment Portfolio
PowerShares Dynamic MagniQuant Portfolio
PowerShares Dynamic Market Portfolio
PowerShares Dynamic Media Portfolio
PowerShares Dynamic Networking Portfolio
PowerShares Dynamic Oil & Gas Services Portfolio
PowerShares Dynamic OTC Portfolio
PowerShares Dynamic Pharmaceuticals Portfolio
PowerShares Dynamic Retail Portfolio
PowerShares Dynamic Semiconductors Portfolio
PowerShares Dynamic Software Portfolio
PowerShares Dynamic Technology Sector Portfolio
PowerShares Dynamic Utilities Portfolio
PowerShares Financial Preferred Portfolio
PowerShares FTSE RAFI US 1000 Portfolio
PowerShares FTSE RAFI US 1500 Small-Mid Portfolio
PowerShares Fundamental Pure Large Core Portfolio
PowerShares Fundamental Pure Large Growth Portfolio
PowerShares Fundamental Pure Large Value Portfolio
PowerShares Fundamental Pure Mid Core Portfolio
PowerShares Fundamental Pure Mid Growth Portfolio
PowerShares Fundamental Pure Mid Value Portfolio
PowerShares Fundamental Pure Small Core Portfolio
PowerShares Fundamental Pure Small Growth Portfolio
PowerShares Fundamental Pure Small Value Portfolio
PowerShares Global Listed Private Equity Portfolio
PowerShares Golden Dragon China Portfolio
PowerShares High Yield Equity Dividend AchieversTM Portfolio
PowerShares International Dividend AchieversTM Portfolio
PowerShares Lux Nanotech Portfolio
PowerShares S&P 500® High Quality Portfolio
PowerShares Water Resources Portfolio
PowerShares WilderHill Clean Energy Portfolio
PowerShares WilderHill Progressive Energy Portfolio
PowerShares Zacks Micro Cap Portfolio
91
Board Considerations Regarding Approval of Continuation of Investment Advisory Agreement (Continued)
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 a 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 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. 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 and projected staffing, 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 execution of portfolio transactions on behalf of the Funds. The Trustees also reviewed information on the performance of the Funds and the performance of their underlying indexes for the one-year, three-year, five-year and since-inception periods ended December 31, 2012, as applicable, including reports for each of the last three calendar years on the correlation and tracking error between each Fund's performance and the performance of its underlying index, as well as the Adviser's analysis of the tracking error between each Fund and its underlying index. In reviewing the tracking error report, the Trustees considered information provided by Ibbotson Associates, a consultant to the Independent Trustees, with respect to general expected tracking error ranges and various explanations for tracking error. The Trustees noted that for each applicable period, the correlation and tracking error for each Fund was within the targeted range set forth in the Trust's registration statement. The Trustees concluded that each Fund was correlated to its underlying index and that the tracking error for each Fund was within an acceptable range given 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 concluded that the nature, extent and quality of services provided by the Adviser to the Funds under the Investment Advisory Agreement were appropriate and reasonable.
Fees, Expenses and Profitability. The Trustees reviewed and discussed the information provided by the Adviser on each Fund's advisory fee and net expense ratio, as compared to information compiled by the Adviser from Lipper Inc. databases on the advisory fees and net expense ratios of comparable exchange-traded funds ("ETFs"), open-end (non-ETF) index funds and open-end actively-managed funds. The Trustees noted that the annual advisory fee charged to each Fund is:
• 0.50% of the Fund's average daily net assets for each Fund other than PowerShares Dividend AchieversTM Portfolio, PowerShares High Yield Equity Dividend AchieversTM Portfolio, PowerShares International Dividend AchieversTM Portfolio, PowerShares FTSE RAFI US 1000 Portfolio, PowerShares FTSE RAFI US 1500 Small-Mid Portfolio, PowerShares Fundamental Pure Large Core Portfolio, PowerShares Fundamental Pure Large Growth Portfolio, PowerShares Fundamental Pure Large Value Portfolio, PowerShares Fundamental Pure Mid Core Portfolio, PowerShares Fundamental
92
Board Considerations Regarding Approval of Continuation of Investment Advisory Agreement (Continued)
Pure Mid Growth Portfolio, PowerShares Fundamental Pure Mid Value Portfolio, PowerShares Fundamental Pure Small Core Portfolio, PowerShares Fundamental Pure Small Growth Portfolio, PowerShares Fundamental Pure Small Value Portfolio and PowerShares S&P 500® High Quality Portfolio;
• 0.40% of the Fund's average daily net assets for each of PowerShares Dividend AchieversTM Portfolio, PowerShares High Yield Equity Dividend AchieversTM Portfolio and PowerShares International Dividend AchieversTM Portfolio; and
• 0.29% of the Fund's average daily net assets for each of PowerShares FTSE RAFI US 1000 Portfolio, PowerShares FTSE RAFI US 1500 Small-Mid Portfolio, PowerShares Fundamental Pure Large Core Portfolio, PowerShares Fundamental Pure Large Growth Portfolio, PowerShares Fundamental Pure Large Value Portfolio, PowerShares Fundamental Pure Mid Core Portfolio, PowerShares Fundamental Pure Mid Growth Portfolio, PowerShares Fundamental Pure Mid Value Portfolio, PowerShares Fundamental Pure Small Core Portfolio, PowerShares Fundamental Pure Small Growth Portfolio, PowerShares Fundamental Pure Small Value Portfolio and PowerShares S&P 500® High Quality Portfolio (for PowerShares S&P 500® High Quality Portfolio, the Trustees noted that the advisory fee was reduced to 0.29% effective December 18, 2012). In approving the advisory fee reduction for the Funds at the December 18, 2012 meeting, the Trustees considered the Adviser's representation that there would be no diminution in the quantity or quality of services provided in connection with the amendment to the Investment Advisory Agreement.
The Trustees also noted that the Adviser has agreed to waive a portion of its advisory fee and/or pay expenses (an "Expense Cap") to the extent necessary to prevent the annual operating expenses of each Fund from exceeding the percentage of that Fund's average daily net assets, at least until August 31, 2014, as set forth below:
• 0.60%, excluding interest expenses, brokerage commissions and other trading expenses, taxes, acquired fund fees and expenses and extraordinary expenses, for each of PowerShares Dynamic OTC Portfolio and PowerShares Dynamic Market Portfolio;
• 0.50%, excluding interest expenses, licensing fees, offering costs, brokerage commissions and other trading expenses, taxes, acquired fund fees and expenses and extraordinary expenses, for each of PowerShares Dividend AchieversTM Portfolio, PowerShares High Yield Equity Dividend AchieversTM Portfolio and PowerShares International Dividend AchieversTM Portfolio;
• 0.39%, excluding interest expenses, offering costs, brokerage commissions and other trading expenses, taxes, acquired fund fees and expenses and extraordinary expenses, for each of PowerShares FTSE RAFI US 1000 Portfolio, PowerShares FTSE RAFI US 1500 Small-Mid Portfolio, PowerShares Fundamental Pure Large Core Portfolio, PowerShares Fundamental Pure Large Growth Portfolio, PowerShares Fundamental Pure Large Value Portfolio, PowerShares Fundamental Pure Mid Core Portfolio, PowerShares Fundamental Pure Mid Growth Portfolio, PowerShares Fundamental Pure Mid Value Portfolio, PowerShares Fundamental Pure Small Core Portfolio, PowerShares Fundamental Pure Small Growth Portfolio and PowerShares Fundamental Pure Small Value Portfolio;
• 0.29%, excluding interest expenses, offering costs, brokerage commissions and other trading expenses, taxes, acquired fund fees and expenses and extraordinary expenses, for PowerShares
93
Board Considerations Regarding Approval of Continuation of Investment Advisory Agreement (Continued)
S&P 500® High Quality Portfolio (the Trustees noted that the Expense Cap for the Fund was reduced to 0.29% effective November 21, 2012); and
• 0.60%, excluding interest expenses, licensing fees, offering costs, brokerage commissions and other trading expenses, taxes, acquired fund fees and expenses and extraordinary expenses, for each other Fund.
The Trustees noted that the Adviser represented that it does not serve as the investment adviser to any clients, other than ETFs overseen by the Trustees with comparable investment strategies as the Funds, but that the Adviser provides sub-advisory services to clients with comparable investment strategies as certain of the Funds. The Trustees further noted the Adviser's explanation with respect to the sub-advisory fees it receives for such services in comparison to the advisory fees charged to the Funds. The Trustees noted that each Fund's advisory fee was:
• higher than the median advisory fee of its ETF peer funds (except for the advisory fee of each of PowerShares Golden Dragon China Portfolio, PowerShares International Dividend AchieversTM Portfolio and PowerShares Fundamental Pure Small Value Portfolio which, was equal to or lower than the median advisory fee of its ETF peer funds); and
• higher than the median advisory fee of its open-end index peer funds (except for the advisory fee of each of PowerShares Dynamic Energy Exploration & Production Portfolio, PowerShares Dynamic Energy Sector Portfolio, PowerShares Dynamic Oil & Gas Services Portfolio, PowerShares Fundamental Pure Large Core Portfolio, PowerShares Fundamental Pure Large Growth Portfolio, PowerShares Fundamental Pure Mid Growth Portfolio, PowerShares Fundamental Pure Mid Value Portfolio, PowerShares Fundamental Pure Small Value Portfolio, PowerShares Water Resources Portfolio, PowerShares WilderHill Clean Energy Portfolio and PowerShares WilderHill Progressive Energy Portfolio, which was lower than the median advisory fee of its open-end index peer funds; and there was no comparable data for PowerShares Aerospace & Defense Portfolio, PowerShares CleantechTM Portfolio, PowerShares Dividend AchieversTM Portfolio, PowerShares Dynamic Basic Materials Sector Portfolio, PowerShares Dynamic Biotechnology & Genome Portfolio, PowerShares Dynamic Building & Construction Portfolio, PowerShares Dynamic Consumer Discretionary Sector Portfolio, PowerShares Dynamic Consumer Staples Sector Portfolio, PowerShares Dynamic Financial Sector Portfolio, PowerShares Dynamic Food & Beverage Portfolio, PowerShares Dynamic Healthcare Sector Portfolio, PowerShares Dynamic Industrials Sector Portfolio, PowerShares Dynamic Leisure and Entertainment Portfolio, PowerShares Dynamic Media Portfolio, PowerShares Dynamic Pharmaceuticals Portfolio, PowerShares Dynamic Retail Portfolio, PowerShares Financial Preferred Portfolio, PowerShares Global Listed Private Equity Portfolio, PowerShares Golden Dragon China Portfolio, PowerShares High Yield Equity Dividend AchieversTM Portfolio or PowerShares International Dividend AchieversTM Portfolio); but
• lower than the median advisory fee of its open-end actively-managed peer funds.
The Trustees determined that the advisory fees were reasonable, noting the complexity of the indexes, the distinguishing factors of the Funds, and the higher administrative, operational and management oversight costs for the Adviser. With respect to the Funds' net expense ratios, the Trustees noted that the net expense ratio for each Fund was:
• higher than the median net expense ratio of its ETF peer funds (except for the net expense ratio of each of PowerShares Dynamic OTC Portfolio, PowerShares FTSE RAFI US 1000 Portfolio,
94
Board Considerations Regarding Approval of Continuation of Investment Advisory Agreement (Continued)
PowerShares FTSE RAFI US 1500 Small-Mid Portfolio, PowerShares Fundamental Pure Mid Core Portfolio, PowerShares Fundamental Pure Mid Growth Portfolio, PowerShares Fundamental Pure Small Core Portfolio and PowerShares S&P 500® High Quality Portfolio, which was equal to or less than the median net expense ratio of its ETF peer funds); and
• higher than the median net expense ratio of its open-end index peer funds (except for the net expense ratio of each of PowerShares Dividend AchieversTM Portfolio, PowerShares DWA Technical LeadersTM Portfolio, PowerShares Dynamic Energy Exploration & Production Portfolio, PowerShares Energy Sector Portfolio, PowerShares Dynamic Large Cap Growth Portfolio, PowerShares Dynamic Large Cap Value Portfolio, PowerShares Dynamic Networking Portfolio, PowerShares Oil & Gas Services Portfolio, PowerShares Dynamic OTC Portfolio, PowerShares Dynamic Semiconductors Portfolio, PowerShares Dynamic Software Portfolio, PowerShares Dynamic Technology Sector Portfolio, PowerShares Dynamic Utilities Sector Portfolio, PowerShares FTSE RAFI US 1500 Small-Mid Portfolio, PowerShares Fundamental Pure Large Core Portfolio, PowerShares Fundamental Pure Large Growth Portfolio, PowerShares Fundamental Pure Large Value Portfolio, PowerShares Fundamental Pure Mid Core Portfolio, PowerShares Fundamental Pure Mid Growth Portfolio, PowerShares Fundamental Pure Mid Value Portfolio, PowerShares Fundamental Pure Small Core Portfolio, PowerShares Fundamental Pure Small Growth Portfolio, PowerShares Fundamental Pure Small Value Portfolio, PowerShares High Yield Equity Dividend AchieversTM Portfolio, PowerShares Lux Nanotech Portfolio, PowerShares S&P 500® High Quality Portfolio, PowerShares Water Resources Portfolio, PowerShares WilderHill Clean Energy Portfolio and PowerShares WilderHill Progressive Energy Portfolio, which was lower than the median net expense ratio of its open-end index peer funds; and there was no comparable data for PowerShares Aerospace & Defense Portfolio, PowerShares CleantechTM Portfolio, PowerShares Dynamic Basic Materials Sector Portfolio, PowerShares Dynamic Biotechnology & Genome Portfolio, PowerShares Dynamic Building & Construction Portfolio, PowerShares Dynamic Consumer Discretionary Sector Portfolio, PowerShares Dynamic Consumer Staples Sector Portfolio, PowerShares Dynamic Financial Sector Portfolio, PowerShares Dynamic Food & Beverage Portfolio, PowerShares Dynamic Healthcare Sector Portfolio, PowerShares Dynamic Industrials Sector Portfolio, PowerShares Dynamic Leisure and Entertainment Portfolio, PowerShares Dynamic Media Portfolio, PowerShares Dynamic Pharmaceuticals Portfolio, PowerShares Dynamic Retail Portfolio, PowerShares Financial Preferred Portfolio, PowerShares Global Listed Private Equity Portfolio, PowerShares Golden Dragon China Portfolio or PowerShares International Dividend AchieversTM Portfolio); but
• lower than the median net expense ratio of its 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, and noted those Funds for which license fees are included in the Funds' Expense Caps.
The Board concluded that the advisory fee and expense ratio of each Fund (giving effect to the Fund's Expense Cap) were reasonable and appropriate in light of the services provided.
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 or losses realized by the Adviser from its
95
Board Considerations Regarding Approval of Continuation of Investment Advisory Agreement (Continued)
relationship to each Fund. The Trustees concluded that the estimated profitability to the Adviser of the advisory services provided to any of the Funds was 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 and expense limitation agreed to by the Adviser. The Trustees noted that, for Funds whose expenses are higher than their respective Expense Caps, any reduction in that Fund's expenses would be enjoyed by the Adviser, but that Fund shareholders benefit from the lower expense ratio as a result of the Fund's Expense Cap. The Trustees also noted that the Excess Expense Agreement with the Trust provides that the Adviser is entitled to be reimbursed by each Fund, other than PowerShares Dynamic Market Portfolio and PowerShares Dynamic OTC Portfolio, 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 considered whether the advisory fee rate for each Fund was reasonable in relation to the asset size of that Fund, and concluded that the flat advisory fee was reasonable and appropriate, noting the Fund expenses the Adviser has borne as a result of the 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. No single factor was determinative in the Board's analysis.
96
PROXY VOTING POLICIES AND PROCEDURES
A description of the Trust's 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) 983-0903. 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) 983-0903; or (ii) accessing the Trust's Form N-PX on the Commission's website at www.sec.gov.
QUARTERLY PORTFOLIOS
The Trust files its complete schedule of portfolio holdings for the Funds with the Commission for the first and third quarters of each fiscal year on Form N-Q. The Trust's Forms N-Q are available on the Commission's website at www.sec.gov. The Trust's Forms N-Q may also be reviewed and copied at the Commission's Public Reference Room in Washington, D.C.; information on the operation of the Public Reference Room may be obtained by calling (800) SEC-0330.
FREQUENCY DISTRIBUTION OF DISCOUNTS AND PREMIUMS
A table showing the number of days the market price of each Fund's shares was greater than the Fund's net asset value, and the number of days it was less than the Fund's net asset value (i.e., premium or discount) for the most recently completed calendar year, and the calendar quarters since that year end (or the life of the Fund, if shorter) may be found at the Fund's website at www.invescopowershares.com.
301 West Roosevelt Road
Wheaton, IL 60187
800.983.0903
www.invescopowershares.com
© 2013 Invesco PowerShares Capital Management LLC P-PS-AR-2
2013 Annual Report to Shareholders
April 30, 2013
PowerShares Dynamic Biotechnology & Genome Portfolio (PBE)
PowerShares Dynamic Building & Construction Portfolio (PKB)
PowerShares Dynamic Energy Exploration & Production Portfolio (PXE)
PowerShares Dynamic Food & Beverage Portfolio (PBJ)
PowerShares Dynamic Leisure and Entertainment Portfolio (PEJ)
PowerShares Dynamic Media Portfolio (PBS)
PowerShares Dynamic Networking Portfolio (PXQ)
PowerShares Dynamic Oil & Gas Services Portfolio (PXJ)
PowerShares Dynamic Pharmaceuticals Portfolio (PJP)
PowerShares Dynamic Retail Portfolio (PMR)
PowerShares Dynamic Semiconductors Portfolio (PSI)
PowerShares Dynamic Software Portfolio (PSJ)
Table of Contents
The Market Environment | 2 | ||||||
Manager's Analysis | 4 | ||||||
Fees and Expenses | 51 | ||||||
Industry Portfolios | |||||||
Schedules of Investments | |||||||
PowerShares Dynamic Biotechnology & Genome Portfolio (PBE) | 53 | ||||||
PowerShares Dynamic Building & Construction Portfolio (PKB) | 54 | ||||||
PowerShares Dynamic Energy Exploration & Production Portfolio (PXE) | 55 | ||||||
PowerShares Dynamic Food & Beverage Portfolio (PBJ) | 56 | ||||||
PowerShares Dynamic Leisure and Entertainment Portfolio (PEJ) | 57 | ||||||
PowerShares Dynamic Media Portfolio (PBS) | 58 | ||||||
PowerShares Dynamic Networking Portfolio (PXQ) | 59 | ||||||
PowerShares Dynamic Oil & Gas Services Portfolio (PXJ) | 60 | ||||||
PowerShares Dynamic Pharmaceuticals Portfolio (PJP) | 61 | ||||||
PowerShares Dynamic Retail Portfolio (PMR) | 62 | ||||||
PowerShares Dynamic Semiconductors Portfolio (PSI) | 63 | ||||||
PowerShares Dynamic Software Portfolio (PSJ) | 64 | ||||||
Statements of Assets and Liabilities | 66 | ||||||
Statements of Operations | 68 | ||||||
Statements of Changes in Net Assets | 70 | ||||||
Financial Highlights | 74 | ||||||
Notes to Financial Statements | 80 | ||||||
Report of Independent Registered Public Accounting Firm | 94 | ||||||
Tax Information | 95 | ||||||
Trustees and Officers | 96 | ||||||
Board Considerations Regarding Approval of Continuation of Investment Advisory Agreement | 105 |
The Market Environment
Domestic Equity:
The fiscal year ended April 30, 2013, began amid negative investor sentiment; the ongoing eurozone sovereign debt crisis intensified and equity markets declined. Throughout the summer, news from Europe and China was poor; this precipitated a slowdown in the U.S., where market performance and economic data were mixed. Employment data, for instance, showed some improvement – but not enough. Companies generally met earnings expectations but missed revenue guidance.
In early fall, as the European Central Bank implemented new measures to support member economies and the U.S. Federal Reserve initiated a third round of quantitative easing, consumer sentiment began to improve. Businesses, on the other hand, grew more hesitant to spend in the second half of the fiscal year. This was due in large part to uncertainty surrounding U.S. election results, "fiscal cliff" negotiations and sequestration spending cuts in early 2013. However, for the first time in years, U.S. markets appeared willing to look past national headline events. U.S. equity markets were generally strong in the final five months of the reporting period, with major market indexes setting multi-year or even all-time highs.
2
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Manager's Analysis
PowerShares Dynamic Biotechnology & Genome Portfolio (ticker: PBE)
As an index fund, the PowerShares Dynamic Biotechnology & Genome Portfolio (the "Fund") is passively managed and attempts to track the returns of an underlying index. The Fund seeks investment results that generally correspond (before fees and expenses) to the price and yield of the Dynamic Biotechnology & Genome IntellidexSM Index (the "Index"). The Fund generally will invest at least 90% of its total assets in common stocks of biotechnology companies and genome companies that comprise the Index. These companies are engaged principally in the research, development, manufacture and marketing and distribution of various biotechnological products, services and processes, and are companies that benefit significantly from scientific and technological advances in biotechnology and genetic engineering and research.
The Index includes stocks from a universe of the 2,000 largest U.S. stocks (by market capitalization) traded on the NYSE, NYSE MKT and the NASDAQ. NYSE Arca, Inc., the Index provider, selects and ranks companies based on their capital appreciation potential using a proprietary NYSE Arca Intellidex model. The Index includes 30 stocks that NYSE Arca, Inc. identifies as having significant operations in these industries and ranks them according to their model score. The index provider separates them into two modified equally weighted groups. The 8 top-ranked relatively larger stocks receive 40% of the Index weighting (each receives on average a 5% weighting) and the 22 top-ranked relatively smaller stocks collectively receive 60% of the Index weighting (each receives on average a 2.73% weighting).
For the fiscal year ended April 30, 2013, on a market price basis, the Fund returned 27.29%. On a net asset value ("NAV") basis, the Fund returned 26.96%. During the same time period, the Index returned 27.90%. During the fiscal year, the Fund fully replicated the components of the Index, therefore, the Fund's performance (NAV basis) differed from the return of the Index primarily due to fees and operating expenses that the Fund incurred during the period.
During this same time period, the S&P Composite 1500 Biotech Index returned 59.75%, and the S&P 500® Index returned 16.89%. The S&P Composite 1500 Biotech Index and S&P 500® Index (the "Benchmark Indices") are unmanaged indices weighted by market capitalization based on the average performance of approximately 14 and 500 securities, respectively. The adviser provided these additional comparative benchmarks to help investors better understand how the investment results of the Fund compare to the performance of another index similar to the Index, as well as to that of a broad-based market benchmark.
The adviser selected the S&P Composite 1500 Biotech Index as a comparative index to the Fund because of its recognition in the marketplace and its shared exposure to the Biotech industry. It is important to note, however, that the Index includes stocks from its Biotechnology & Genome Group Universe of which approximately 90% are considered Pharmaceuticals, Biotechnology & Life Sciences, while the remaining 10% of the index contains stocks in other industry groups including Materials, Health Care Equipment & Services and Technology Hardware & Equipment. The S&P Composite 1500 Biotech Index contains 100% Biotechnology companies. This benchmark is relevant as a comparison, but the disparity in pure biotechnology exposure may produce some differences in performance when compared to the Fund. The S&P 500® Index does not have the same specific Biotechnology industry relevance as the S&P Composite 1500 Biotech Index, however, it was also selected for its recognition in the marketplace, and its performance comparison is a useful measure for investors as a broad representation of the overall U.S. stock market.
In addition, the performance of the Fund differed from the Benchmark Indices, in part because the Fund tracks an Index that employs a modified equal weighting and stock selection methodology, whereas the Benchmark Indices select and weight stocks based on market capitalization. More specifically, relative to
4
Manager's Analysis (Continued)
PowerShares Dynamic Biotechnology & Genome Portfolio (ticker: PBE)
the S&P Composite 1500 Biotech Index, the Fund primarily underperformed during the fiscal year ended April 30, 2013, due to poor performance of specific stocks in the Biotechnology industry. Underperformance also came from the Fund's allocations to the Life Sciences Tools & Services, Pharmaceuticals and Specialty Chemicals industries, each of which underperformed the Biotechnology industry.
Relative to the S&P 500® Index, the Fund was overweight in the Health Care sector during the fiscal year ended April 30, 2013. The majority of the Fund's outperformance relative to the S&P 500® Index during that period can be attributed to this sector allocation.
For the fiscal year ended April 30, 2013, the Biotechnology industry contributed most significantly to the Fund's return, followed by the Pharmaceuticals and Electronics industries, respectively. The Healthcare-Products industry detracted most from the Fund's return.
Positions that contributed most significantly to the Fund's return included Pharmacyclics, Inc., a pharmaceuticals company (portfolio average weight of 3.51%); and Gilead Sciences, Inc., a biotechnology company (portfolio average weight of 3.98%). Positions that detracted most significantly from the Fund's return included Progenics Pharmaceuticals Inc., a pharmaceuticals company (no longer held at April 30, 2013); and Luminex Corp., a healthcare-products company (portfolio average weight of 2.53%).
Industry Breakdown (% of the Fund's
Net Assets) as of April 30, 2013
Biotechnology | 57.0 | ||||||
Pharmaceuticals | 24.5 | ||||||
Healthcare-Products | 7.0 | ||||||
Electronics | 6.9 | ||||||
Chemicals | 4.6 | ||||||
Money Market Fund | 0.1 | ||||||
Liabilities in excess of other assets | (0.1 | ) |
Top Ten Fund Holdings (% of the Fund's
Net Assets) as of April 30, 2013
Security | |||||||
Regeneron Pharmaceuticals, Inc. | 6.0 | ||||||
Biogen Idec, Inc. | 5.9 | ||||||
Life Technologies Corp. | 5.6 | ||||||
Amgen, Inc. | 5.3 | ||||||
Gilead Sciences, Inc. | 5.3 | ||||||
Sigma-Aldrich Corp. | 4.6 | ||||||
Waters Corp. | 4.4 | ||||||
NPS Pharmaceuticals, Inc. | 4.2 | ||||||
Pharmacyclics, Inc. | 4.0 | ||||||
Isis Pharmaceuticals, Inc. | 3.7 | ||||||
Total | 49.0 |
5
Manager's Analysis (Continued)
PowerShares Dynamic Biotechnology & Genome Portfolio (ticker: PBE)
Growth of a $10,000 Investment Since Inception†
Fund Performance History (%) As of April 30, 2013
3 Years | 3 Years | 5 Years | 5 Years | Fund Inception† | |||||||||||||||||||||||||||
1 Year | Avg. Ann.†† | Cumulative | Avg. Ann.†† | Cumulative | Avg. Ann.†† | Cumulative | |||||||||||||||||||||||||
Index | |||||||||||||||||||||||||||||||
Dynamic Biotechnology & Genome IntellidexSM Index | 27.90 | % | 13.67 | % | 46.86 | % | 10.82 | % | 67.11 | % | 9.29 | % | 100.84 | % | |||||||||||||||||
S&P Composite 1500 Biotech Index | 59.75 | % | 32.25 | % | 131.29 | % | 18.53 | % | 133.93 | % | 14.82 | % | 195.19 | % | |||||||||||||||||
S&P 500® Index | 16.89 | % | 12.80 | % | 43.54 | % | 5.21 | % | 28.92 | % | 6.03 | % | 58.18 | % | |||||||||||||||||
Fund | |||||||||||||||||||||||||||||||
NAV Return | 26.96 | % | 12.84 | % | 43.67 | % | 9.83 | % | 59.78 | % | 8.74 | % | 93.01 | % | |||||||||||||||||
Market Price Return | 27.29 | % | 12.83 | % | 43.65 | % | 9.82 | % | 59.74 | % | 8.73 | % | 92.95 | % |
Fund Inception: June 23, 2005
Performance quoted above represents past performance. Past performance is not a guarantee of future results and current performance may be higher or lower than performance quoted. Investment returns and principal value will fluctuate, and shares of the Fund ("Fund Shares"), when redeemed or sold, may be worth more or less than their original cost. Had the adviser not waived fees and/or reimbursed expenses in the past, performance would have been lower. The adviser has contractually agreed to waive fees and/or pay certain Fund expenses through August 31, 2014. According to the Fund's current prospectus, the total gross annual operating expense ratio was indicated as 0.64%. The Financial Highlights section of the Shareholders Report presents the expense ratios based on expenses incurred during the period covered by this report. NAV and Market Price returns assume that dividends and capital gain distributions have been reinvested in the Fund at NAV and Market 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.
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.
† Fund and Index returns are based on the inception date of the Fund. Returns for the Benchmark Indices are based on the closest month-end to the Fund's inception date.
†† Average annualized.
6
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Manager's Analysis
PowerShares Dynamic Building & Construction Portfolio (ticker: PKB)
As an index fund, the PowerShares Dynamic Building & Construction Portfolio (the "Fund") is passively managed and attempts to track the returns of an underlying index. The Fund seeks investment results that generally correspond (before fees and expenses) to the price and yield of the Dynamic Building & Construction IntellidexSM Index (the "Index"). The Fund generally will invest at least 90% of its total assets in common stocks of building and construction companies that comprise the Index. These companies are engaged primarily in providing construction and related engineering services for building and remodeling residential properties, commercial or industrial buildings, or working on large-scale infrastructure projects, such as highways, tunnels, bridges, dams, power lines and airports.
The Index includes stocks from a universe of the 2,000 largest U.S. stocks (by market capitalization) traded on the NYSE, NYSE MKT and the NASDAQ. NYSE Arca, Inc., the index provider selects and ranks companies based on their capital appreciation potential using a proprietary NYSE Arca Intellidex model. The Index includes 30 stocks that NYSE Arca, Inc. identifies as having significant operations in these industries and, ranks them according to their model score. The index provider separates them into two modified equally weighted groups. The 8 top-ranked relatively larger stocks collectively receive 40% of the Index weighting (each receives on average a 5% weighting) and the 22 top-ranked relatively smaller stocks collectively receive 60% of the Index weighting (each receives on average a 2.73% weighting).
For the fiscal year ended April 30, 2013, on a market price basis, the Fund returned 39.01%. On a net asset value ("NAV") basis, the Fund returned 38.85%. During the same time period, the Index returned 40.47%. After fees and operating expenses that the Fund incurred during the period, the Fund underperformed its Index primarily due to timing of the sale of Class B shares of Nacco-Hyster-Yale received in a spinoff transaction in October 2012.
During this same time period, the S&P Composite 1500 Construction & Engineering Index returned 11.30%, the S&P Composite 1500 Homebuilders Index returned 61.63%, and the S&P 500® Index returned 16.89%. The S&P Composite 1500 Construction & Engineering Index, S&P Composite 1500 Homebuilders Index and S&P 500® Index (the "Benchmark Indices") are unmanaged indices weighted by market capitalization based on the average performance of approximately 12, 11 and 500 securities, respectively. The adviser provided these additional comparative benchmarks to help investors better understand how the investment results of the Fund compare to the performance of other indices similar to the Index, as well as to that of a broad-based market benchmark.
The adviser selected the S&P Composite 1500 Construction & Engineering Index and the S&P Composite 1500 Homebuilders Index as comparative indices to the Fund because of their recognition in the marketplace and their shared exposure to the Construction and Homebuilding industries. These reasons make their performance relevant when comparing to the Fund's performance. The S&P 500® Index does not have the same specific industry relevance as the S&P Composite 1500 Construction & Engineering Index and the S&P Composite 1500 Homebuilders Index, however, it was also selected for its recognition in the marketplace, and its performance comparison is a useful measure for investors as a broad representation of the overall U.S. stock market.
The performance of the Fund differed from these Benchmark Indices, in part because the Fund tracks an Index that employs a modified equal weighting and stock selection methodology, whereas the indexes select and weight stocks based on market capitalization. More specifically, relative to the S&P Composite 1500 Construction & Engineering Index, the Fund's outperformance can be primarily attributed to its smaller allocation to the Construction & Engineering industry during the fiscal year ended April 30, 2013. Compared to the S&P Composite 1500 Homebuilders Index, the Fund's underperformance can be
8
Manager's Analysis (Continued)
PowerShares Dynamic Building & Construction Portfolio (ticker: PKB)
primarily attributed to its smaller allocation to the Homebuilding industry during the fiscal year ended April 30, 2013.
Relative to the S&P 500® Index, the Fund from a broad perspective was overweight in the Consumer Discretionary, Materials, and Industrials sectors and also benefited from superior performance of specific stocks within the Index in these three sectors during the fiscal year ended April 30, 2013. The majority of the Fund's outperformance relative to the S&P 500® Index during that period can be attributed to these sector allocations and positive stock selections within the Index.
For the fiscal year ended April 30, 2013, the Home Builders industry contributed most significantly to the Fund's return, followed by the Building Materials and Retail industries, respectively. The Real Estate industry detracted most from the Fund's return, followed by the Holding Companies-Diversified and Environmental Control industries, respectively.
Positions that contributed most significantly to the Fund's return included Lumber Liquidators Holdings, Inc., a retail company (portfolio average weight of 2.69%); and PulteGroup, Inc., a home builders company (portfolio average weight of 4.52%). Positions that detracted most significantly from the Fund's return included Jacobs Engineering Group, Inc., an engineering & construction company (portfolio average weight of 1.27%); and Forest City Enterprises Inc. Class A, a real estate company (no longer held at April 30, 2013).
Industry Breakdown (% of the Fund's
Net Assets) as of April 30, 2013
Home Builders | 22.0 | ||||||
Building Materials | 21.9 | ||||||
Engineering & Construction | 14.8 | ||||||
Retail | 13.8 | ||||||
Miscellaneous Manufacturing | 7.6 | ||||||
Distribution/Wholesale | 5.5 | ||||||
Textiles | 5.0 | ||||||
Auto Manufacturers | 2.6 | ||||||
Environmental Control | 2.3 | ||||||
Machinery-Construction & Mining | 2.3 | ||||||
Forest Products & Paper | 2.2 | ||||||
Money Market Fund | 0.1 | ||||||
Liabilities in excess of other assets | (0.1 | ) |
Top Ten Fund Holdings (% of the Fund's
Net Assets) as of April 30, 2013
Security | |||||||
Home Depot, Inc. (The) | 5.3 | ||||||
PulteGroup, Inc. | 5.3 | ||||||
Lennar Corp., Class A | 5.2 | ||||||
Mohawk Industries, Inc. | 5.0 | ||||||
NVR, Inc. | 4.9 | ||||||
Jacobs Engineering Group, Inc. | 4.9 | ||||||
Ingersoll-Rand PLC | 4.9 | ||||||
Lowe's Cos., Inc. | 4.9 | ||||||
Lumber Liquidators Holdings, Inc. | 3.6 | ||||||
Ryland Group, Inc. (The) | 3.3 | ||||||
Total | 47.3 |
9
Manager's Analysis (Continued)
PowerShares Dynamic Building & Construction Portfolio (ticker: PKB)
Growth of a $10,000 Investment Since Inception†
Fund Performance History (%) As of April 30, 2013
3 Years | 3 Years | 5 Years | 5 Years | Fund Inception† | |||||||||||||||||||||||||||
1 Year | Avg. Ann.†† | Cumulative | Avg. Ann.†† | Cumulative | Avg. Ann.†† | Cumulative | |||||||||||||||||||||||||
Index | |||||||||||||||||||||||||||||||
Dynamic Building & Construction IntellidexSM Index | 40.47 | % | 15.67 | % | 54.76 | % | 4.91 | % | 27.07 | % | 5.33 | % | 47.72 | % | |||||||||||||||||
S&P Composite 1500 Construction & Engineering Index | 11.30 | % | 3.86 | % | 12.03 | % | -3.15 | % | -14.81 | % | 7.64 | % | 73.68 | % | |||||||||||||||||
S&P Composite 1500 Homebuilders Index | 61.63 | % | 18.48 | % | 66.30 | % | 9.12 | % | 54.74 | % | -5.16 | % | -32.80 | % | |||||||||||||||||
S&P 500® Index | 16.89 | % | 12.80 | % | 43.54 | % | 5.21 | % | 28.92 | % | 6.04 | % | 55.26 | % | |||||||||||||||||
Fund | |||||||||||||||||||||||||||||||
NAV Return | 38.85 | % | 14.66 | % | 50.73 | % | 4.05 | % | 21.96 | % | 4.39 | % | 38.10 | % | |||||||||||||||||
Market Price Return | 39.01 | % | 14.62 | % | 50.58 | % | 4.04 | % | 21.91 | % | 4.37 | % | 37.86 | % |
Fund Inception: October 26, 2005
Performance quoted above represents past performance. Past performance is not a guarantee of future results and current performance may be higher or lower than performance quoted. Investment returns and principal value will fluctuate, and shares of the Fund ("Fund Shares"), when redeemed or sold, may be worth more or less than their original cost. Had the adviser not waived fees and/or reimbursed expenses, performance would have been lower. The adviser has contractually agreed to waive fees and/or pay certain Fund expenses through August 31, 2014. According to the Fund's current prospectus, the total gross annual operating expense ratio was indicated as 1.01%. The Financial Highlights section of the Shareholders Report presents the expense ratios based on expenses incurred during the period covered by this report. NAV and Market Price returns assume that dividends and capital gain distributions have been reinvested in the Fund at NAV and Market 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.
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.
† Fund and Index returns are based on the inception date of the Fund. Returns for the Benchmark Indices are based on the closest month-end to the Fund's inception date.
†† Average annualized.
10
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Manager's Analysis
PowerShares Dynamic Energy Exploration & Production Portfolio (ticker: PXE)
As an index fund, the PowerShares Dynamic Energy Exploration & Production Portfolio (the "Fund") is passively managed and attempts to track the returns of an underlying index. The Fund seeks investment results that generally correspond (before fees and expenses) to the price and yield of the Dynamic Energy Exploration & Production IntellidexSM Index (the "Index"). The Fund generally will invest at least 90% of its total assets in common stocks of companies engaged in energy exploration and production that comprise the Index. These companies are engaged principally in exploration, extraction and production of crude oil and natural gas from land-based or offshore wells.
The Index includes stocks from a universe of the 2,000 largest U.S. stocks (by market capitalization) traded on the NYSE, NYSE MKT and the NASDAQ. NYSE Arca, Inc., the Index provider, selects and ranks companies based on their capital appreciation potential using a proprietary NYSE Arca Intellidex model. The Index includes 30 stocks that NYSE Arca, Inc. identifies as having significant operations in these industries and ranks them according to their model score. The Index provider separates them into two modified equally weighted groups. The 8 top-ranked relatively larger stocks collectively receive 40% of the Index weighting (each receives on average a 5% weighting) and the 22 top-ranked relatively smaller stocks collectively receive 60% of the Index weighting (each receives on average a 2.73% weighting).
For the fiscal year ended April 30, 2013, on a market price basis, the Fund returned 26.03%. On a net asset value ("NAV") basis, the Fund returned 26.14%. During the same time period, the Index returned 27.31%. During the fiscal year, the Fund fully replicated the components of the Index, therefore, the Fund's performance (NAV basis) differed from the return of the Index primarily due to fees and operating expenses that the Fund incurred during the period.
During this same time period, the S&P Composite 1500 Oil & Gas Exploration & Production Index returned 6.43%, and the S&P 500® Index returned 16.89%. The S&P Composite 1500 Oil & Gas Exploration & Production Index and S&P 500® Index (the "Benchmark Indices") are unmanaged indices weighted by market capitalization based on the average performance of approximately 36 and 500 securities, respectively. The adviser provided these additional comparative benchmarks to help investors better understand how the investment results of the Fund compare to the performance of another similar to the Index as well as to that of a broad-based market benchmark.
The adviser selected the S&P Composite 1500 Oil & Gas Exploration & Production Index as a comparative index to the Fund because of its recognition in the marketplace and its shared exposure to the oil & gas exploration & production industry. These reasons make its performance relevant when comparing to the Fund's performance. The S&P 500® Index does not have the same specific oil and gas exploration and production relevance as the S&P Composite 1500 Oil & Gas Exploration & Production Index, however, it was also selected for its recognition in the marketplace, and its performance comparison is a useful measure for investors as a broad representation of the overall U.S. stock market.
The performance of the Fund differed from these Benchmark Indices in part because the Fund tracks an Index that employs a modified equal weighting and stock selection methodology, whereas the indexes select and weight stocks based on market capitalization. More specifically, relative to the S&P Composite 1500 Oil & Gas Exploration & Production Index, the Fund benefited from a higher allocation to the Oil & Gas Refining & Marketing sub-industry during the fiscal year ended April 30, 2013. The majority of the Fund's outperformance relative to the index during the period can be attributed to this industry allocation.
12
Manager's Analysis (Continued)
PowerShares Dynamic Energy Exploration & Production Portfolio (ticker: PXE)
Relative to the S&P 500® Index, the Fund was overweight in the Energy sector and benefited from the positive performance of specific stocks included within the Index from that sector during the fiscal year ended April 30, 2013. The majority of the Fund's outperformance relative to the S&P 500® Index during that period can be attributed to this sector allocation and specific stock performance.
For the fiscal year ended April 30, 2013, the Oil Refining & Marketing sub-industry contributed most significantly to the Fund's return, followed by the Oil Companies-Integrated and Gas-Distribution sub-industries, respectively. The Oil Companies-Exploration & Production sub-industry detracted most from the Fund's return.
Positions that contributed most significantly to the Fund's return included Marathon Petroleum Corp., an oil refining & marketing company (portfolio average weight of 5.55%); and Valero Energy Corp., an oil refining & marketing company (portfolio average weight of 5.33%). Positions that detracted most significantly from the Fund's return included Clayton Williams Energy Inc., an oil companies-exploration & production company (no longer held at April 30, 2013); and W&T Offshore, Inc., an oil companies-exploration & production company (portfolio average weight of 1.92%).
Sub-Industry Breakdown (% of the
Fund's Net Assets) as of April 30, 2013
Oil Companies-Exploration & Production | 47.4 | ||||||
Oil Refining & Marketing | 32.3 | ||||||
Oil Companies-Integrated | 17.3 | ||||||
Gas-Distribution | 3.0 | ||||||
Money Market Fund | 0.1 | ||||||
Liabilities in excess of other assets | (0.1 | ) |
Top Ten Fund Holdings (% of the Fund's
Net Assets) as of April 30, 2013
Security | |||||||
Southwestern Energy Co. | 5.8 | ||||||
Occidental Petroleum Corp. | 5.5 | ||||||
ConocoPhillips | 5.3 | ||||||
Murphy Oil Corp. | 5.2 | ||||||
Marathon Petroleum Corp. | 4.9 | ||||||
Phillips 66 | 4.9 | ||||||
Marathon Oil Corp. | 4.8 | ||||||
Valero Energy Corp. | 4.5 | ||||||
EPL Oil & Gas, Inc. | 3.6 | ||||||
EQT Corp. | 3.5 | ||||||
Total | 48.0 |
13
Manager's Analysis (Continued)
PowerShares Dynamic Energy Exploration & Production Portfolio (ticker: PXE)
Growth of a $10,000 Investment Since Inception†
Fund Performance History (%) As of April 30, 2013
3 Years | 3 Years | 5 Years | 5 Years | Fund Inception† | |||||||||||||||||||||||||||
1 Year | Avg. Ann.†† | Cumulative | Avg. Ann.†† | Cumulative | Avg. Ann.†† | Cumulative | |||||||||||||||||||||||||
Index | |||||||||||||||||||||||||||||||
Dynamic Energy Exploration & Production IntellidexSM Index | 27.31 | % | 20.65 | % | 75.61 | % | 4.42 | % | 24.17 | % | 10.44 | % | 110.80 | % | |||||||||||||||||
S&P Composite 1500 Oil/Gas Exploration & Production Index | 6.43 | % | 4.13 | % | 12.91 | % | -3.30 | % | -15.45 | % | 6.97 | % | 65.71 | % | |||||||||||||||||
S&P 500® Index | 16.89 | % | 12.80 | % | 43.54 | % | 5.21 | % | 28.92 | % | 6.04 | % | 55.26 | % | |||||||||||||||||
Fund | |||||||||||||||||||||||||||||||
NAV Return | 26.14 | % | 19.69 | % | 71.47 | % | 3.67 | % | 19.76 | % | 9.73 | % | 100.80 | % | |||||||||||||||||
Market Price Return | 26.03 | % | 19.64 | % | 71.24 | % | 3.67 | % | 19.74 | % | 9.69 | % | 100.29 | % |
Fund Inception: October 26, 2005
Performance quoted above represents past performance. Past performance is not a guarantee of future results and current performance may be higher or lower than performance quoted. Investment returns and principal value will fluctuate, and shares of the Fund ("Fund Shares"), when redeemed or sold, may be worth more or less than their original cost. Had the adviser not waived fees and/or reimbursed expenses, performance would have been lower. The adviser has contractually agreed to waive fees and/or pay certain Fund expenses through August 31, 2014. According to the Fund's current prospectus, the total gross annual operating expense ratio was indicated as 0.73%. The Financial Highlights section of the Shareholders Report presents the expense ratios based on expenses incurred during the period covered by this report. NAV and Market Price returns assume that dividends and capital gain distributions have been reinvested in the Fund at NAV and Market 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.
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.
† Fund and Index returns are based on the inception date of the Fund. Returns for the Benchmark Indices are based on the closest month-end to the Fund's inception date.
†† Average annualized.
14
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Manager's Analysis
PowerShares Dynamic Food & Beverage Portfolio (ticker: PBJ)
As an index fund, the PowerShares Dynamic Food & Beverage Portfolio (the "Fund") is passively managed and attempts to track the returns of an underlying index. The Fund seeks investment results that generally correspond (before fees and expenses) to the price and yield of the Dynamic Food & Beverage IntellidexSM Index (the "Index"). The Fund generally will invest at least 90% of its total assets in common stocks of food and beverage companies that comprise the Index. These companies are engaged principally in the manufacture, sale or distribution of food and beverage products, agricultural products and products related to the development of new food technologies.
The Index includes stocks from a universe of the 2,000 largest U.S. stocks (by market capitalization) traded on the NYSE, NYSE MKT and the NASDAQ. NYSE Arca, Inc., the Index provider selects and ranks companies based on their capital appreciation potential using a proprietary NYSE Arca Intellidex model. The Index includes 30 stocks that NYSE Arca, Inc. identifies as having significant operations in these industries and ranks them according to their model score. The Index provider separates them into two modified equally weighted groups. The 8 top-ranked relatively larger stocks collectively receive 40% of the Index weighting (each receives on average a 5% weighting) and the 22 top-ranked relatively smaller stocks collectively receive 60% of the Index weighting (each receives on average a 2.73% weighting).
For the fiscal year ended April 30, 2013, on a market price basis, the Fund returned 21.40%. On a net asset value ("NAV") basis, the Fund returned 21.45%. During the same time period, the Index returned 22.23%. During the fiscal year, the Fund fully replicated the components of the Index, therefore, the Fund's performance (NAV basis) differed from the return of the Index primarily due to fees and operating expenses that the Fund incurred during the period.
During this same time period, the S&P Composite 1500 Food Beverage & Tobacco Index returned 20.24%, and the S&P 500® Index returned 16.89%. The S&P Composite 1500 Food Beverage & Tobacco Index and S&P 500® Index (the "Benchmark Indices") are unmanaged indices weighted by market capitalization based on the average performance of approximately 50 and 500 securities, respectively. The adviser provided these additional comparative benchmarks to help investors better understand how the investment results of the Fund compare to the performance of another index similar to the Index as well as to that of a broad-based market benchmark.
The adviser selected the S&P Composite 1500 Food Beverage & Tobacco Index as a comparative index to the Fund because of its recognition in the marketplace and its shared exposure to the Food & Beverage industry. These reasons make its performance relevant when comparing to the Fund's performance. The S&P 500® Index does not have the same specific Food & Beverage industry relevance as the S&P Composite 1500 Food Beverage & Tobacco Index; however, it was also selected for its recognition in the marketplace, and its performance comparison is a useful measure for investors as a broad representation of the overall U.S. stock market.
The performance of the Fund differed from these Benchmark Indices in part because the Fund tracks an index that employs a modified equal weighting and stock selection methodology, whereas the Benchmark Indices select and weight stocks based on market capitalization. More specifically, relative to the S&P Composite 1500 Food Beverage & Tobacco Index, the Fund benefited from exposure to the Restaurant sub-industry and being overweight in the Distillers & Vintners sub-industry during the fiscal year ended April 30, 2013. The majority of the Fund's outperformance relative to that index during the period can be attributed to these sub-industry allocations.
Relative to the S&P 500® Index, the Fund was overweight in the Consumer Staples sector and underweight the Information Technology sector during the fiscal year ended April 30, 2013. The majority
16
Manager's Analysis (Continued)
PowerShares Dynamic Food & Beverage Portfolio (ticker: PBJ)
of the Fund's outperformance relative to the S&P 500® Index during that period can be attributed to these sector allocations.
For the fiscal year ended April 30, 2013, the Food-Miscellaneous/Diversified sub-industry contributed most significantly to the Fund's return, followed by the Retail-Restaurants and Beverages-Wine/Spirits sub-industries, respectively. The Food-Wholesale/Distribution sub-industry detracted most from the Fund's return, followed by the Vitamins & Nutrition Products and Agricultural Operations sub-industries, respectively.
Positions that contributed most significantly to the Fund's return included Constellation Brands Inc. Class A, a beverages-wine/spirits company (no longer held at April 30, 2013); and AFC Enterprises Inc., a retail-restaurants company (portfolio average weight of 2.87%). Positions that detracted most significantly from the Fund's return included Mead Johnson Nutrition Co., a vitamins & nutrition products company (no longer held at April 30, 2013); and Pilgrim's Pride Corp., a null-poultry company (portfolio average weight of 1.02%).
Sub-Industry Breakdown (% of the
Fund's Net Assets) as of April 30, 2013
Food-Miscellaneous/Diversified | 30.9 | ||||||
Retail-Restaurants | 11.2 | ||||||
Food-Confectionery | 10.7 | ||||||
Food-Retail | 10.2 | ||||||
Agricultural Operations | 7.7 | ||||||
Beverages-Non-alcoholic | 7.5 | ||||||
Poultry | 5.7 | ||||||
Agricultural Chemicals | 4.9 | ||||||
Food-Dairy Products | 3.0 | ||||||
Food-Baking | 3.0 | ||||||
Food-Meat Products | 2.8 | ||||||
Food-Wholesale/Distribution | 2.4 | ||||||
Money Market Fund | 0.0 | ||||||
Liabilities in excess of other assets | 0.0 |
Top Ten Fund Holdings (% of the Fund's
Net Assets) as of April 30, 2013
Security | |||||||
Mondelez International, Inc., Class A | 5.4 | ||||||
General Mills, Inc. | 5.1 | ||||||
Hershey Co. (The) | 5.0 | ||||||
PepsiCo, Inc. | 5.0 | ||||||
Kellogg Co. | 5.0 | ||||||
Monsanto Co. | 4.9 | ||||||
Archer-Daniels-Midland Co. | 4.8 | ||||||
Whole Foods Market, Inc. | 4.7 | ||||||
Fiesta Restaurant Group, Inc. | 3.4 | ||||||
Dean Foods Co. | 3.0 | ||||||
Total | 46.3 |
17
Manager's Analysis (Continued)
PowerShares Dynamic Food & Beverage Portfolio (ticker: PBJ)
Growth of a $10,000 Investment Since Inception†
Fund Performance History (%) As of April 30, 2013
3 Years | 3 Years | 5 Years | 5 Years | Fund Inception† | |||||||||||||||||||||||||||
1 Year | Avg. Ann.†† | Cumulative | Avg. Ann.†† | Cumulative | Avg. Ann.†† | Cumulative | |||||||||||||||||||||||||
Index | |||||||||||||||||||||||||||||||
Dynamic Food & Beverage IntellidexSM Index | 22.23 | % | 16.11 | % | 56.54 | % | 9.39 | % | 56.62 | % | 8.42 | % | 88.68 | % | |||||||||||||||||
S&P Composite 1500 Food Beverage & Tobacco Index | 20.24 | % | 20.59 | % | 75.38 | % | 13.99 | % | 92.47 | % | 13.48 | % | 169.30 | % | |||||||||||||||||
S&P 500® Index | 16.89 | % | 12.80 | % | 43.54 | % | 5.21 | % | 28.92 | % | 6.03 | % | 58.18 | % | |||||||||||||||||
Fund | |||||||||||||||||||||||||||||||
NAV Return | 21.45 | % | 15.32 | % | 53.36 | % | 8.63 | % | 51.26 | % | 7.70 | % | 79.04 | % | |||||||||||||||||
Market Price Return | 21.40 | % | 15.28 | % | 53.19 | % | 8.63 | % | 51.29 | % | 7.69 | % | 78.97 | % |
Fund Inception: June 23, 2005
Performance quoted above represents past performance. Past performance is not a guarantee of future results and current performance may be higher or lower than performance quoted. Investment returns and principal value will fluctuate, and shares of the Fund ("Fund Shares"), when redeemed or sold, may be worth more or less than their original cost. Had the adviser not waived fees and/or reimbursed expenses in the past, performance would have been lower. The adviser has contractually agreed to waive fees and/or pay certain Fund expenses through August 31, 2014. According to the Fund's current prospectus, the total gross annual operating expense ratio was indicated as 0.64%. The Financial Highlights section of the Shareholders Report presents the expense ratios based on expenses incurred during the period covered by this report. NAV and Market Price returns assume that dividends and capital gain distributions have been reinvested in the Fund at NAV and Market 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.
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.
† Fund and Index returns are based on the inception date of the Fund. Returns for the Benchmark Indices are based on the closest month-end to the Fund's inception date.
†† Average annualized.
18
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Manager's Analysis
PowerShares Dynamic Leisure and Entertainment Portfolio (ticker: PEJ)
As an index fund, the PowerShares Dynamic Leisure and Entertainment Portfolio (the "Fund") is passively managed and attempts to track the returns of an underlying index. The Fund seeks investment results that generally correspond (before fees and expenses) to the price and yield of the Dynamic Leisure and Entertainment IntellidexSM Index (the "Index"). The Fund generally will invest at least 90% of its total assets in common stocks of leisure companies and entertainment companies that comprise the Index. These companies are engaged principally in the design, production or distribution of goods or services in the leisure and entertainment industries.
The Index includes stocks from a universe of the 2,000 largest U.S. stocks (by market capitalization) traded on the NYSE, NYSE MKT and the NASDAQ. NYSE Arca, Inc., the Index provider selects and ranks companies based on their capital appreciation potential using a proprietary NYSE Arca Intellidex model. The Index includes 30 stocks that NYSE Arca, Inc. identifies as having significant operations in these industries and ranks them according to their model score. The Index provider separates them into two modified equally weighted groups. The 8 top-ranked relatively larger stocks collectively receive 40% of the Index weighting (each receives on average a 5% weighting) and the 22 top-ranked relatively smaller stocks collectively receive 60% of the Index weighting (each receives on average a 2.73% weighting).
For the fiscal year ended April 30, 2013, on a market price basis, the Fund returned 23.47%. On a net asset value ("NAV") basis, the Fund returned 23.67%. During the same time period, the Index returned 24.69%. During the fiscal year, the Fund fully replicated the components of the Index, therefore, the Fund's performance (NAV basis) differed from the return of the Index primarily due to fees and operating expenses that the Fund incurred during the period.
During this same time period, the S&P Composite 1500 Hotels Restaurants & Leisure Index returned 8.30%, and the S&P 500® Index returned 16.89%. The S&P Composite 1500 Hotels Restaurants & Leisure Index and S&P 500® Index (the "Benchmark Indices") are unmanaged indices weighted by market capitalization based on the average performance of approximately 42 and 500 securities, respectively. The adviser provided these additional comparative benchmarks to help investors better understand how the investment results of the Fund compare to the performance of another index similar to the Index, as well as to that of a broad-based market benchmark.
The adviser selected the S&P Composite 1500 Hotels Restaurants & Leisure Index as a comparative index to the Fund because of its recognition in the marketplace and its shared exposure to the Leisure industry. These reasons make its performance relevant when comparing to the Fund's performance. The S&P 500® Index does not have the same specific industry relevance as the S&P Composite 1500 Hotels Restaurants & Leisure Index, however, it was also selected for its recognition in the marketplace, and its performance comparison is a useful measure for investors as a broad representation of the overall U.S. stock market.
The performance of the Fund differed from these Benchmark Indices because the Fund tracks an Index that employs a modified equal weighting and stock selection methodology, whereas the Benchmark Indices select and weight stocks based on market capitalization. More specifically, relative to the S&P Composite 1500 Hotels Restaurants & Leisure Index, the Fund benefited from the positive performance of specific stocks that were included in the Index from the Restaurants and Hotels industries during the fiscal year ended April 30, 2013. The majority of the Fund's outperformance relative to the S&P Composite 1500 Hotels Restaurants & Leisure Index during the period can be attributed to these specific stock performances.
20
Manager's Analysis (Continued)
PowerShares Dynamic Leisure and Entertainment Portfolio (ticker: PEJ)
Relative to the S&P 500® Index, the Fund was overweight in the Consumer Discretionary sector during the fiscal year ended April 30, 2013. The majority of the Fund's outperformance relative to the S&P 500® Index during that period can be attributed to this sector allocation.
For the fiscal year ended April 30, 2013, the Media industry contributed most significantly to the Fund's return, followed by the Retail and Entertainment industries, respectively. The Internet industry detracted most from the Fund's return industry, followed by the Food industry.
Positions that contributed most significantly to the Fund's return included Time Warner, Inc., a media company (portfolio average weight of 4.83%); and Starz-Liberty Capital Series A, a media company (portfolio average weight of 3.03%). Positions that detracted most significantly from the Fund's return included Chefs Warehouse Inc., a food company (no longer held at April 30, 2013); and priceline.com Inc., an internet company (no longer held at April 30, 2013).
Industry Breakdown (% of the Fund's
Net Assets) as of April 30, 2013
Retail | 32.2 | ||||||
Media | 26.0 | ||||||
Entertainment | 22.8 | ||||||
Lodging | 12.4 | ||||||
Internet | 3.9 | ||||||
Leisure Time | 2.7 | ||||||
Money Market Fund | 0.1 | ||||||
Liabilities in excess of other assets | (0.1 | ) |
Top Ten Fund Holdings (% of the Fund's
Net Assets) as of April 30, 2013
Security | |||||||
Walt Disney Co. (The) | 5.3 | ||||||
Time Warner, Inc. | 5.1 | ||||||
Starbucks Corp. | 5.1 | ||||||
Discovery Communications, Inc., Class A | 5.1 | ||||||
Marriott International, Inc., Class A | 5.0 | ||||||
Starwood Hotels & Resorts Worldwide, Inc. | 4.9 | ||||||
Scripps Networks Interactive, Inc., Class A | 4.8 | ||||||
Expedia, Inc. | 3.9 | ||||||
Multimedia Games Holding Co., Inc. | 3.4 | ||||||
Fiesta Restaurant Group, Inc. | 3.4 | ||||||
Total | 46.0 |
21
Manager's Analysis (Continued)
PowerShares Dynamic Leisure and Entertainment Portfolio (ticker: PEJ)
Growth of a $10,000 Investment Since Inception†
Fund Performance History (%) As of April 30, 2013
3 Years | 3 Years | 5 Years | 5 Years | Fund Inception† | |||||||||||||||||||||||||||
1 Year | Avg. Ann.†† | Cumulative | Avg. Ann.†† | Cumulative | Avg. Ann.†† | Cumulative | |||||||||||||||||||||||||
Index | |||||||||||||||||||||||||||||||
Dynamic Leisure & Entertainment IntellidexSM Index | 24.69 | % | 19.93 | % | 72.51 | % | 14.23 | % | 94.49 | % | 9.78 | % | 108.01 | % | |||||||||||||||||
S&P Composite 1500 Hotels Restaurants & Leisure Index | 8.30 | % | 16.46 | % | 57.96 | % | 13.04 | % | 84.59 | % | 11.17 | % | 129.14 | % | |||||||||||||||||
S&P 500® Index | 16.89 | % | 12.80 | % | 43.54 | % | 5.21 | % | 28.92 | % | 6.03 | % | 58.18 | % | |||||||||||||||||
Fund | |||||||||||||||||||||||||||||||
NAV Return | 23.67 | % | 19.01 | % | 68.57 | % | 13.30 | % | 86.72 | % | 9.16 | % | 99.03 | % | |||||||||||||||||
Market Price Return | 23.47 | % | 18.94 | % | 68.25 | % | 13.27 | % | 86.46 | % | 9.16 | % | 98.94 | % |
Fund Inception: June 23, 2005
Performance quoted above represents past performance. Past performance is not a guarantee of future results and current performance may be higher or lower than performance quoted. Investment returns and principal value will fluctuate, and shares of the Fund ("Fund Shares"), when redeemed or sold, may be worth more or less than their original cost. Had the adviser not waived fees and/or reimbursed expenses, performance would have been lower. The adviser has contractually agreed to waive fees and/or pay certain Fund expenses through August 31, 2014. According to the Fund's current prospectus, the total gross annual operating expense ratio was indicated as 0.80%. The Financial Highlights section of the Shareholders Report presents the expense ratios based on expenses incurred during the period covered by this report. NAV and Market Price returns assume that dividends and capital gain distributions have been reinvested in the Fund at NAV and Market 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.
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.
† Fund and Index returns are based on the inception date of the Fund. Returns for the Benchmark Indices are based on the closest month-end to the Fund's inception date.
†† Average annualized.
22
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Manager's Analysis
PowerShares Dynamic Media Portfolio (ticker: PBS)
As an index fund, the PowerShares Dynamic Media Portfolio (the "Fund") is passively managed and attempts to track the returns of an underlying index. The Fund seeks investment results that generally correspond (before fees and expenses) to the price and yield of the Dynamic Media IntellidexSM Index (the "Index"). The Fund generally will invest at least 90% of its total assets in common stocks of media companies that comprise the Index. These companies are engaged principally in the development, production, sale and distribution of goods or services used in the media industry.
The Index includes stocks from a universe of the 2,000 largest U.S. stocks (by market capitalization) traded on the NYSE, NYSE MKT and the NASDAQ. NYSE Arca, Inc., the Index provider selects and ranks companies based on their capital appreciation potential using a proprietary NYSE Arca Intellidex model. The Index includes 30 stocks that NYSE Arca, Inc. identifies as having significant operations in these industries and ranks them according to their model score. The Index provider separates them into two modified equally weighted groups. The 8 top-ranked relatively larger stocks collectively receive 40% of the Index weighting (each receives on average a 5% weighting) and the 22 top-ranked relatively smaller stocks collectively receive 60% of the Index weighting (each receives on average a 2.73% weighting).
For the fiscal year ended April 30, 2013, on a market price basis, the Fund returned 36.55%. On a net asset value ("NAV") basis, the Fund returned 36.62%. During the same time period, the Index returned 37.78%. During the fiscal year, the Fund fully replicated the components of the Index, therefore, the Fund's performance (NAV basis) differed from the return of the Index primarily due to fees and operating expenses that the Fund incurred during the period.
During this same time period, the S&P Composite 1500 Media Index returned 40.32%, and the S&P 500® Index returned 16.89%. The S&P Composite 1500 Media Index and S&P 500® Index (the "Benchmark Indices") are unmanaged indices weighted by market capitalization based on the average performance of approximately 29 and 500 securities, respectively. The adviser provided these additional comparative benchmarks to help investors better understand how the investment results of the Fund compare to the performance of another index similar to the Index, as well as to that of a broad-based market benchmark.
The adviser selected the S&P Composite 1500 Media Index as a comparative index to the Fund because of its recognition in the marketplace and its shared exposure to the Media industry. These reasons make its performance relevant when comparing to the Fund's performance. The S&P 500® Index does not have the same specific Media industry relevance as the S&P Composite 1500 Media Index, however, it was also selected for its recognition in the marketplace, and its performance comparison is a useful measure for investors as a broad representation of the overall U.S. stock market.
The performance of the Fund differed from these Benchmark Indices in part because the Fund tracks an index that employs a modified equal weighting and stock selection methodology, whereas the Benchmark Indices select and weight stocks based on market capitalization. More specifically, relative to the S&P Composite 1500 Media Index, the Fund was underweight in the Internet Software and Movies & Entertainment industries during the fiscal year ended April 30, 2013. The majority of the Fund's underperformance relative to that index during the period can be attributed to these industry allocations.
Relative to the S&P 500® Index, the Fund was overweight in the Consumer Discretionary sector during the fiscal year ended April 30, 2013. The majority of the Fund's outperformance relative to the S&P 500® Index during that period can be attributed to this sector allocation.
24
Manager's Analysis (Continued)
PowerShares Dynamic Media Portfolio (ticker: PBS)
For the fiscal year ended April 30, 2013, the Multimedia sub-industry contributed most significantly to the Fund's return, followed by the Web Portals/ISP and Television sub-industries, respectively. The Internet Application Software sub-industry detracted most from the Fund's return, followed by the Internet Content-Information/News and Advertising Sales sub-industries, respectively.
Positions that contributed most significantly to the Fund's return included Time Warner, Inc., a multimedia company (portfolio average weight of 5.20%); and News Corp. Class A, a multimedia company (no longer held at April 30, 2013). Positions that detracted most significantly from the Fund's return included Bazaarvoice Inc., an Internet application software company (no longer held at April 30, 2013); and Bankrate Inc., an Internet content-information/news company (no longer held at April 30, 2013).
Sub-Industry Breakdown (% of the
Fund's Net Assets) as of April 30, 2013
Television | 17.7 | ||||||
Multimedia | 15.5 | ||||||
Cable/Satellite TV | 15.1 | ||||||
Web Portals/ISP | 14.6 | ||||||
Broadcast Services/Program | 8.0 | ||||||
Internet Content-Entertainment | 3.1 | ||||||
E-Commerce/Services | 2.9 | ||||||
Motion Pictures & Services | 2.9 | ||||||
E-Marketing/Information | 2.8 | ||||||
Commercial Services-Finance | 2.7 | ||||||
Advertising Sales | 2.6 | ||||||
Advertising Agencies | 2.6 | ||||||
Publishing-Newspapers | 2.5 | ||||||
Retail-Discount | 2.4 | ||||||
Diversified Operations/Commercial Services | 2.3 | ||||||
Printing-Commercial | 2.3 | ||||||
Money Market Fund | 11.4 | ||||||
Liabilities in excess of other assets | (11.4 | ) |
Top Ten Fund Holdings (% of the Fund's
Net Assets) as of April 30, 2013
Security | |||||||
Yahoo!, Inc. | 5.2 | ||||||
Walt Disney Co. (The) | 5.2 | ||||||
Time Warner, Inc. | 5.1 | ||||||
Discovery Communications, Inc., Class A | 5.0 | ||||||
Time Warner Cable, Inc. | 4.9 | ||||||
CBS Corp., Class B | 4.7 | ||||||
Comcast Corp., Class A | 4.6 | ||||||
Google, Inc., Class A | 4.6 | ||||||
Sinclair Broadcast Group, Inc., Class A | 4.6 | ||||||
Shutterstock, Inc. | 3.1 | ||||||
Total | 47.0 |
25
Manager's Analysis (Continued)
PowerShares Dynamic Media Portfolio (ticker: PBS)
Growth of a $10,000 Investment Since Inception†
Fund Performance History (%) As of April 30, 2013
3 Years | 3 Years | 5 Years | 5 Years | Fund Inception† | |||||||||||||||||||||||||||
1 Year | Avg. Ann.†† | Cumulative | Avg. Ann.†† | Cumulative | Avg. Ann.†† | Cumulative | |||||||||||||||||||||||||
Index | |||||||||||||||||||||||||||||||
Dynamic Media IntellidexSM Index | 37.78 | % | 15.32 | % | 53.38 | % | 10.00 | % | 61.08 | % | 5.14 | % | 48.22 | % | |||||||||||||||||
S&P Composite 1500 Media Index | 40.32 | % | 23.10 | % | 86.54 | % | 14.18 | % | 94.09 | % | 8.92 | % | 95.23 | % | |||||||||||||||||
S&P 500® Index | 16.89 | % | 12.80 | % | 43.54 | % | 5.21 | % | 28.92 | % | 6.03 | % | 58.18 | % | |||||||||||||||||
Fund | |||||||||||||||||||||||||||||||
NAV Return | 36.62 | % | 14.44 | % | 49.89 | % | 9.03 | % | 54.04 | % | 4.55 | % | 41.85 | % | |||||||||||||||||
Market Price Return | 36.55 | % | 14.37 | % | 49.60 | % | 8.98 | % | 53.74 | % | 4.55 | % | 41.78 | % |
Fund Inception: June 23, 2005
Performance quoted above represents past performance. Past performance is not a guarantee of future results and current performance may be higher or lower than performance quoted. Investment returns and principal value will fluctuate, and shares of the Fund ("Fund Shares"), when redeemed or sold, may be worth more or less than their original cost. Had the adviser not waived fees and/or reimbursed expenses in the past, performance would have been lower. The adviser has contractually agreed to waive fees and/or pay certain Fund expenses through August 31, 2014. According to the Fund's current prospectus, the total gross annual operating expense ratio was indicated as 0.65%. The Financial Highlights section of the Shareholders Report presents the expense ratios based on expenses incurred during the period covered by this report. NAV and Market Price returns assume that dividends and capital gain distributions have been reinvested in the Fund at NAV and Market 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.
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.
† Fund and Index returns are based on the inception date of the Fund. Returns for the Benchmark Indices are based on the closest month-end to the Fund's inception date.
†† Average annualized.
26
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Manager's Analysis
PowerShares Dynamic Networking Portfolio (ticker: PXQ)
As an index fund, the PowerShares Dynamic Networking Portfolio (the "Fund") is passively managed and attempts to track the returns of an underlying index. The Fund seeks investment results that generally correspond (before fees and expenses) to the price and yield of the Dynamic Networking IntellidexSM Index (the "Index"). The Fund generally will invest at least 90% of its total assets in common stocks of networking companies that comprise the Index. These companies are engaged principally in the development, manufacture, sale or distribution of products, services or technologies that support the flow of electronic information, including voice, data, images and commercial transactions.
The Index includes stocks from a universe of the 2,000 largest U.S. stocks (by market capitalization) traded on the NYSE, NYSE MKT and the NASDAQ. NYSE Arca, Inc., the Index provider, selects and ranks companies based on their capital appreciation potential using a proprietary NYSE Arca Intellidex model. The Index includes 30 stocks that NYSE Arca, Inc. identifies as having significant operations in these industries and ranks them according to their model score. The Index provider separates them into two modified equally weighted groups. The 8 top-ranked relatively larger stocks collectively receive 40% of the Index weighting (each receives on average a 5% weighting) and the 22 top-ranked relatively smaller stocks collectively receive 60% of the Index weighting (each receives on average a 2.73% weighting).
For the fiscal year ended April 30, 2013, on a market price basis, the Fund returned (9.58)%. On a net asset value ("NAV") basis, the Fund returned (9.57)%. During the same time period, the Index returned (8.85)%. During the fiscal year, the Fund fully replicated the components of the Index, therefore, the Fund's performance (NAV basis) differed from the return of the Index primarily due to fees and operating expenses that the Fund incurred during the period.
During this same time period, the S&P Composite 1500 Communications Equipment Index returned 0.32%, and the S&P 500® Index returned 16.89%. The S&P Composite 1500 Communications Equipment Index and S&P 500® Index (the "Benchmark Indices") are unmanaged indices weighted by market capitalization based on the average performance of approximately 27 and 500 securities, respectively. The adviser provided these additional comparative benchmarks to help investors better understand how the investment results of the Fund compare to the performance of another index similar to the Index, as well as to that of a broad-based market benchmark.
The adviser selected the S&P Composite 1500 Communications Equipment Index as a comparative index to the Fund because of its recognition in the marketplace and its shared exposure to the communications equipment industry. These reasons make its performance relevant when comparing to the Fund's performance. The S&P 500® Index does not have the same specific industry relevance as the S&P Composite 1500 Communications Equipment Index; however, it was also selected for its recognition in the marketplace, and its performance comparison is a useful measure for investors as a broad representation of the overall U.S. stock market.
The performance of the Fund differed from these Benchmark Indices because the Fund tracks an Index that employs a modified equal weighting and stock selection methodology, whereas the Benchmark Indices select and weight stocks based on market capitalization. More specifically, relative to the S&P Composite 1500 Communications Equipment Index, the Fund suffered from specific stock performance in the Communications Equipment industry during the fiscal year ended April 30, 2013. The majority of the Fund's underperformance relative to that index during the period can be attributed to this specific stock performance.
Relative to the S&P 500® Index, the Fund was overweight in the Information Technology sector and also experienced the relatively poorer performance of specific stocks included within the Index from this sector
28
Manager's Analysis (Continued)
PowerShares Dynamic Networking Portfolio (ticker: PXQ)
during the fiscal year ended April 30, 2013. The majority of the Fund's underperformance relative to the S&P 500® Index during that period can be attributed to this sector allocation and specific stock performance.
For the fiscal year ended April 30, 2013, the Electrical Components & Equipment industry contributed most significantly to the Fund's return, followed by the Electronics industry. The Telecommunications industry detracted most from the Fund's return, followed by the Internet and Semiconductors industries, respectively.
Positions that contributed most significantly to the Fund's return included Amphenol Corp. Class A, an electronics company (portfolio average weight of 5.35%); and OPNET Technologies Inc., a software company (no longer held at April 30, 2013). Positions that detracted most significantly from the Fund's return included F5 Networks, Inc., an internet company (portfolio average weight of 4.88%); and VMware, Inc., a software company (portfolio average weight of 5.16%).
Industry Breakdown (% of the Fund's
Net Assets) as of April 30, 2013
Telecommunications | 45.9 | ||||||
Software | 19.3 | ||||||
Semiconductors | 10.6 | ||||||
Internet | 7.0 | ||||||
Electrical Components & Equipment | 5.8 | ||||||
Electronics | 5.8 | ||||||
Computers | 5.6 | ||||||
Money Market Fund | 0.3 | ||||||
Liabilities in excess of other assets | (0.3 | ) |
Top Ten Fund Holdings (% of the Fund's
Net Assets) as of April 30, 2013
Security | |||||||
Amphenol Corp., Class A | 5.8 | ||||||
Cisco Systems, Inc. | 5.4 | ||||||
VMware, Inc., Class A | 5.3 | ||||||
QUALCOMM, Inc. | 5.2 | ||||||
Motorola Solutions, Inc. | 5.0 | ||||||
Citrix Systems, Inc. | 4.6 | ||||||
Juniper Networks, Inc. | 4.2 | ||||||
F5 Networks, Inc. | 4.1 | ||||||
Infinera Corp. | 3.8 | ||||||
Proofpoint, Inc. | 3.7 | ||||||
Total | 47.1 |
29
Manager's Analysis (Continued)
PowerShares Dynamic Networking Portfolio (ticker: PXQ)
Growth of a $10,000 Investment Since Inception†
Fund Performance History (%) As of April 30, 2013
3 Years | 3 Years | 5 Years | 5 Years | Fund Inception† | |||||||||||||||||||||||||||
1 Year | Avg. Ann.†† | Cumulative | Avg. Ann.†† | Cumulative | Avg. Ann.†† | Cumulative | |||||||||||||||||||||||||
Index | |||||||||||||||||||||||||||||||
Dynamic Networking IntellidexSM Index | -8.85 | % | 6.86 | % | 22.02 | % | 10.25 | % | 62.85 | % | 7.55 | % | 77.05 | % | |||||||||||||||||
S&P Composite 1500 Communications Equipment Index | 0.32 | % | 1.98 | % | 6.07 | % | 0.69 | % | 3.48 | % | 2.91 | % | 25.18 | % | |||||||||||||||||
S&P 500® Index | 16.89 | % | 12.80 | % | 43.54 | % | 5.21 | % | 28.92 | % | 6.03 | % | 58.18 | % | |||||||||||||||||
Fund | |||||||||||||||||||||||||||||||
NAV Return | -9.57 | % | 6.08 | % | 19.36 | % | 9.42 | % | 56.87 | % | 6.85 | % | 68.19 | % | |||||||||||||||||
Market Price Return | -9.58 | % | 5.98 | % | 19.05 | % | 9.41 | % | 56.78 | % | 6.83 | % | 67.99 | % |
Fund Inception: June 23, 2005
Performance quoted above represents past performance. Past performance is not a guarantee of future results and current performance may be higher or lower than performance quoted. Investment returns and principal value will fluctuate, and shares of the Fund ("Fund Shares"), when redeemed or sold, may be worth more or less than their original cost. Had the adviser not waived fees and/or reimbursed expenses, performance would have been lower. The adviser has contractually agreed to waive fees and/or pay certain Fund expenses through August 31, 2014. According to the Fund's current prospectus, the total gross annual operating expense ratio was indicated as 0.67%. The Financial Highlights section of the Shareholders Report presents the expense ratios based on expenses incurred during the period covered by this report. NAV and Market Price returns assume that dividends and capital gain distributions have been reinvested in the Fund at NAV and Market 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.
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.
† Fund and Index returns are based on the inception date of the Fund. Returns for the Benchmark Indices are based on the closest month-end to the Fund's inception date.
†† Average annualized.
30
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Manager's Analysis
PowerShares Dynamic Oil & Gas Services Portfolio (ticker: PXJ)
As an index fund, the PowerShares Dynamic Oil & Gas Services Portfolio (the "Fund") is passively managed and attempts to track the returns of an underlying index. The Fund seeks investment results that generally correspond (before fees and expenses) to the price and yield of the Dynamic Oil Services IntellidexSM Index (the "Index"). The Fund generally will invest at least 90% of its total assets in common stocks of companies that assist in the production, processing and distribution of oil and gas that comprise the Index. These companies are engaged in the drilling of oil and gas wells; manufacturing oil and gas field machinery and equipment; or providing services to the oil and gas industry, such as well analysis, platform and pipeline engineering and construction, logistics and transportation services, oil and gas well emergency management and geophysical data acquisition and processing.
The Index includes stocks from a universe of the 2,000 largest U.S. stocks (by market capitalization) traded on the NYSE, NYSE MKT and the NASDAQ. NYSE Arca, Inc., the Index provider, selects and ranks companies based on their capital appreciation potential using a proprietary NYSE Arca Intellidex model. The Index includes 30 stocks that NYSE Arca, Inc. identifies as having significant operations in these industries and ranks them according to their model score. The Index provider separates them into two modified equally weighted groups. The 8 top-ranked relatively larger stocks collectively receive 40% of the Index weighting (each receives on average a 5% weighting) and the 22 top-ranked relatively smaller stocks collectively receive 60% of the Index weighting (each receives on average a 2.73% weighting).
For the fiscal year ended April 30, 2013, on a market price basis, the Fund returned 9.95%. On a net asset value ("NAV") basis, the Fund returned 9.95%. During the same time period, the Index returned 10.71%. During the fiscal year, the Fund fully replicated the components of the Index, therefore, the Fund's performance (NAV basis) differed from the return of the Index primarily due to fees and operating expenses that the Fund incurred during the period.
During this same time period, the S&P Composite 1500 Energy Equipment & Services Index returned 6.37%, and the S&P 500® Index returned 16.89%. The S&P Composite 1500 Energy Equipment & Services Index and S&P 500® Index (the "Benchmark Indices") are unmanaged indices weighted by market capitalization based on the average performance of approximately 37 and 500 securities, respectively. The adviser provided these additional comparative benchmarks to help investors better understand how the investment results of the Fund compare to the performance of another index similar to the Index, as well as to that of a broad-based market benchmark.
The adviser selected the S&P Composite 1500 Energy Equipment & Services Index as a comparative index to the Fund because of its recognition in the marketplace and its shared exposure to the energy equipment & services industry. These reasons make its performance relevant when comparing to the Fund's performance. The S&P 500® Index does not have the same specific industry relevance as the S&P Composite 1500 Energy Equipment & Services Index, however, it was also selected for its recognition in the marketplace, and its performance comparison is a useful measure for investors as a broad representation of the overall U.S. stock market.
The performance of the Fund differed from these Benchmark Indices in part because the Fund tracks an Index that employs a modified equal weighting and stock selection methodology, whereas the Benchmark Indices select and weight stocks based on market capitalization. More specifically, relative to the S&P Composite 1500 Energy Equipment & Services Index, the Fund benefited from the positive performance of specific stocks that were included in the Index from the Oil & Gas Equipment & Services industry during the fiscal year ended April 30, 2013. The majority of the Fund's outperformance relative to that index during the period can be attributed to these specific stock performances.
32
Manager's Analysis (Continued)
PowerShares Dynamic Oil & Gas Services Portfolio (ticker: PXJ)
Relative to the S&P 500® Index, the Fund was overweight in the Energy sector during the fiscal year ended April 30, 2013. The majority of the Fund's underperformance relative to the S&P 500® Index during that period can be attributed to this sector allocation.
For the fiscal year ended April 30, 2013, the Oil-Field Services sub-industry contributed most significantly to the Fund's return, followed by the Seismic Data Collection and Transport-Services sub-industries, respectively. The Oil Field Machinery & Equipment sub-industry detracted most from the Fund's return, followed by the Transportation-Marine sub-industry.
Positions that contributed most significantly to the Fund's return included Exterran Holdings, Inc., an oil-field services company (portfolio average weight of 2.78%); and Newpark Resources, Inc., an oil-field services company (portfolio average weight of 2.78%). Positions that detracted most significantly from the Fund's return included Weatherford International Ltd., an oil-field services company (no longer held at April 30, 2013); and Flotek Industries Inc., an oil field machinery & equipment company (no longer held at April 30, 2013).
Sub-Industry Breakdown (% of the
Fund's Net Assets) as of April 30, 2013
Oil-Field Services | 48.7 | ||||||
Oil Field Machinery & Equipment | 18.4 | ||||||
Oil & Gas Drilling | 16.8 | ||||||
Seismic Data Collection | 5.0 | ||||||
Transportation-Marine | 3.2 | ||||||
Transportation-Services | 3.0 | ||||||
Oil Companies-Exploration & Production | 2.6 | ||||||
Engineering/R&D Services | 2.3 | ||||||
Money Market Fund | 0.1 | ||||||
Liabilities in excess of other assets | (0.1 | ) |
Top Ten Fund Holdings (% of the Fund's
Net Assets) as of April 30, 2013
Security | |||||||
Oceaneering International, Inc. | 5.8 | ||||||
Core Laboratories NV | 5.5 | ||||||
Halliburton Co. | 5.4 | ||||||
Cameron International Corp. | 5.0 | ||||||
National Oilwell Varco, Inc. | 5.0 | ||||||
Schlumberger Ltd. | 5.0 | ||||||
Nabors Industries Ltd. | 4.7 | ||||||
Helmerich & Payne, Inc. | 4.6 | ||||||
Newpark Resources, Inc. | 3.4 | ||||||
Oil States International, Inc. | 3.2 | ||||||
Total | 47.6 |
33
Manager's Analysis (Continued)
PowerShares Dynamic Oil & Gas Services Portfolio (ticker: PXJ)
Growth of a $10,000 Investment Since Inception†
Fund Performance History (%) As of April 30, 2013
3 Years | 3 Years | 5 Years | 5 Years | Fund Inception† | |||||||||||||||||||||||||||
1 Year | Avg. Ann.†† | Cumulative | Avg. Ann.†† | Cumulative | Avg. Ann.†† | Cumulative | |||||||||||||||||||||||||
Index | |||||||||||||||||||||||||||||||
Dynamic Oil Services IntellidexSM Index | 10.71 | % | 8.60 | % | 28.07 | % | -4.17 | % | -19.16 | % | 5.07 | % | 45.02 | % | |||||||||||||||||
S&P Composite 1500 Energy Equipment & Services Index | 6.37 | % | 7.15 | % | 23.02 | % | -3.28 | % | -15.35 | % | 6.32 | % | 58.35 | % | |||||||||||||||||
S&P 500® Index | 16.89 | % | 12.80 | % | 43.54 | % | 5.21 | % | 28.92 | % | 6.04 | % | 55.26 | % | |||||||||||||||||
Fund | |||||||||||||||||||||||||||||||
NAV Return | 9.95 | % | 7.83 | % | 25.37 | % | -4.84 | % | -21.98 | % | 4.46 | % | 38.80 | % | |||||||||||||||||
Market Price Return | 9.95 | % | 7.85 | % | 25.44 | % | -4.82 | % | -21.90 | % | 4.46 | % | 38.79 | % |
Fund Inception: October 26, 2005
Performance quoted above represents past performance. Past performance is not a guarantee of future results and current performance may be higher or lower than performance quoted. Investment returns and principal value will fluctuate, and shares of the Fund ("Fund Shares"), when redeemed or sold, may be worth more or less than their original cost. Had the adviser not waived fees and/or reimbursed expenses in the past, performance would have been lower. According to the Fund's current prospectus, the total gross annual operating expense ratio was indicated as 0.63%. The Financial Highlights section of the Shareholders Report presents the expense ratios based on expenses incurred during the period covered by this report. NAV and Market Price returns assume that dividends and capital gain distributions have been reinvested in the Fund at NAV and Market 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.
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.
† Fund and Index returns are based on the inception date of the Fund. Returns for the Benchmark Indices are based on the closest month-end to the Fund's inception date.
†† Average annualized.
34
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Manager's Analysis
PowerShares Dynamic Pharmaceuticals Portfolio (ticker: PJP)
As an index fund, the PowerShares Dynamic Pharmaceuticals Portfolio (the "Fund") is passively managed and attempts to track the returns of an underlying index. The Fund seeks investment results that generally correspond (before fees and expenses) to the price and yield of the Dynamic Pharmaceuticals IntellidexSM Index (the "Index"). The Fund generally will invest at least 90% of its total assets in common stocks of pharmaceutical companies that comprise the Index. These companies are engaged principally in the research, development, manufacture, sale or distribution of pharmaceuticals and drugs of all types.
The Index includes stocks from a universe of the 2,000 largest U.S. stocks (by market capitalization) traded on the NYSE, NYSE MKT and the NASDAQ. NYSE Arca, Inc., the Index Provider, selects and ranks companies based on their capital appreciation potential using a proprietary NYSE Arca Intellidex model. The Index includes 30 stocks that NYSE Arca, Inc. identifies as having significant operations in these industries and ranks them according to their model score. The Index provider separates them into two modified equally weighted groups. The 8 top-ranked relatively larger stocks collectively receive 40% of the Index weighting (each receives on average a 5% weighting) and the 22 top-ranked relatively smaller stocks collectively receive 60% of the Index weighting (each receives on average a 2.73% weighting).
For the fiscal year ended April 30, 2013, on a market price basis, the Fund returned 29.29%. On a net asset value ("NAV") basis, the Fund returned 29.25%. During the same time period, the Index returned 30.16%. During the fiscal year, the Fund fully replicated the components of the Index, therefore, the Fund's performance (NAV basis) differed from the return of the Index primarily due to fees and operating expenses that the Fund incurred during the period.
During this same time period, the S&P Composite 1500 Pharmaceuticals Index returned 30.66%, and the S&P 500® Index returned 16.89%. The S&P Composite 1500 Pharmaceuticals Index and S&P 500® Index (the "Benchmark Indices") are unmanaged indices weighted by market capitalization based on the average performance of approximately 19 and 500 securities, respectively. The adviser provided these additional comparative benchmarks to help investors better understand how the investment results of the Fund compare to the performance of another index similar to the Index, as well as to that of a broad-based market benchmark.
The adviser selected the S&P Composite 1500 Pharmaceuticals Index as a comparative index to the Fund because of its recognition in the marketplace and its shared exposure to the pharmaceutical industry. These reasons make its performance relevant when comparing to the Fund's performance. The S&P 500® Index does not have the same specific Pharmaceuticals industry relevance as the S&P Composite 1500 Pharmaceuticals Index; however, its performance comparison is a useful measure for investors as a broad representation of the overall U.S. stock market.
The performance of the Fund differed from these Benchmark Indices in part because the Fund tracks an Index that employs a modified equal weighting and stock selection methodology whereas the Benchmark Indices select and weight stocks based on market capitalization. More specifically, relative to the S&P Composite 1500 Pharmaceuticals Index, the Fund suffered from the poor performance of specific stocks included in the Index from the Pharmaceuticals industry during the fiscal year ended April 30, 2013. The majority of the Fund's underperformance relative to that benchmark index during the period can be attributed to these specific stock performances.
Relative to the S&P 500® Index, the Fund was overweight in the Health Care sector during the fiscal year ended April 30, 2013. The majority of the Fund's outperformance relative to the S&P 500® Index during that period can be attributed to this sector allocation.
36
Manager's Analysis (Continued)
PowerShares Dynamic Pharmaceuticals Portfolio (ticker: PJP)
For the fiscal year ended April 30, 2013, the Medical-Drugs sub-industry contributed most significantly to the Fund's return, followed by the Medical-Biomedical/Genetics and Medical-Generic Drugs sub-industries, respectively. The Therapeutics sub-industry detracted most from the Fund's return.
Positions that contributed most significantly to the Fund's return included Gilead Sciences, Inc., a medical-biomedical/genetics company (portfolio average weight of 5.32%); and Santarus, Inc., a medical-drugs company (portfolio average weight of 3.06%). Positions that detracted most significantly from the Fund's return included Impax Laboratories, Inc., a medical-generic drugs company (portfolio average weight of 2.57%); and Questcor Pharmaceuticals, Inc., a therapeutics company (portfolio average weight of 2.50%).
Sub-Industry Breakdown (% of the
Fund's Net Assets) as of April 30, 2013
Medical-Drugs | 54.4 | ||||||
Medical-Biomedical/Genetics | 21.6 | ||||||
Medical-Generic Drugs | 10.6 | ||||||
Medical Products | 5.4 | ||||||
Therapeutics | 5.1 | ||||||
Consumer Products-Miscellaneous | 2.9 | ||||||
Money Market Fund | 0.0 | ||||||
Liabilities in excess of other assets | 0.0 |
Top Ten Fund Holdings (% of the Fund's
Net Assets) as of April 30, 2013
Security | |||||||
Amgen, Inc. | 5.5 | ||||||
Gilead Sciences, Inc. | 5.5 | ||||||
Johnson & Johnson | 5.1 | ||||||
Merck & Co., Inc. | 5.0 | ||||||
Bristol-Myers Squibb Co. | 5.0 | ||||||
Abbott Laboratories | 4.9 | ||||||
Pfizer, Inc. | 4.9 | ||||||
Eli Lilly & Co. | 4.7 | ||||||
Santarus, Inc. | 3.5 | ||||||
Biogen Idec, Inc. | 3.3 | ||||||
Total | 47.4 |
37
Manager's Analysis (Continued)
PowerShares Dynamic Pharmaceuticals Portfolio (ticker: PJP)
Growth of a $10,000 Investment Since Inception†
Fund Performance History (%) As of April 30, 2013
3 Years | 3 Years | 5 Years | 5 Years | Fund Inception† | |||||||||||||||||||||||||||
1 Year | Avg. Ann.†† | Cumulative | Avg. Ann.†† | Cumulative | Avg. Ann.†† | Cumulative | |||||||||||||||||||||||||
Index | |||||||||||||||||||||||||||||||
Dynamic Pharmaceuticals IntellidexSM Index | 30.16 | % | 29.82 | % | 118.79 | % | 20.89 | % | 158.21 | % | 15.36 | % | 207.12 | % | |||||||||||||||||
S&P Composite 1500 Pharmaceuticals Index | 30.66 | % | 18.92 | % | 68.19 | % | 12.55 | % | 80.57 | % | 8.12 | % | 84.38 | % | |||||||||||||||||
S&P 500® Index | 16.89 | % | 12.80 | % | 43.54 | % | 5.21 | % | 28.92 | % | 6.03 | % | 58.18 | % | |||||||||||||||||
Fund | |||||||||||||||||||||||||||||||
NAV Return | 29.25 | % | 28.95 | % | 114.42 | % | 20.05 | % | 149.30 | % | 14.63 | % | 192.24 | % | |||||||||||||||||
Market Price Return | 29.29 | % | 28.97 | % | 114.53 | % | 20.06 | % | 149.45 | % | 14.64 | % | 192.43 | % |
Fund Inception: June 23, 2005
Performance quoted above represents past performance. Past performance is not a guarantee of future results and current performance may be higher or lower than performance quoted. Investment returns and principal value will fluctuate, and shares of the Fund ("Fund Shares"), when redeemed or sold, may be worth more or less than their original cost. Had the adviser not waived fees and/or reimbursed expenses in the past, performance would have been lower. The adviser has contractually agreed to waive fees and/or pay certain Fund expenses through August 31, 2014. According to the Fund's current prospectus, the total gross annual operating expense ratio was indicated as 0.64%. The Financial Highlights section of the Shareholders Report presents the expense ratios based on expenses incurred during the period covered by this report. NAV and Market Price returns assume that dividends and capital gain distributions have been reinvested in the Fund at NAV and Market 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.
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.
† Fund and Index returns are based on the inception date of the Fund. Returns for the Benchmark Indices are based on the closest month-end to the Fund's inception date.
†† Average annualized.
38
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Manager's Analysis
PowerShares Dynamic Retail Portfolio (ticker: PMR)
As an index fund, the PowerShares Dynamic Retail Portfolio (the "Fund") is passively managed and attempts to track the returns of an underlying index. The Fund seeks investment results that generally correspond (before fees and expenses) to the price and yield of the Dynamic Retail IntellidexSM Index (the "Index"). The Fund generally will invest at least 90% of its total assets in common stocks of retail companies that comprise the Index. These companies are engaged principally in operating general merchandise stores such as department stores, discount stores, warehouse clubs and superstores; specialty stores, including apparel, electronics, accessories and footwear stores; and home improvement and home furnishings stores.
The Index includes stocks from a universe of the 2,000 largest U.S. stocks (by market capitalization) traded on the NYSE, NYSE MKT and the NASDAQ. NYSE Arca, Inc., the Index provider selects and ranks companies based on their capital appreciation potential using a proprietary NYSE Arca Intellidex model. The Index includes 30 stocks that NYSE Arca, Inc. identifies as having significant operations in these industries and ranks them according to their model score. The Index provider separates them into two modified equally weighted groups. The 8 top-ranked relatively larger stocks collectively receive 40% of the Index weighting (each receives on average a 5% weighting) and the 22 top-ranked relatively smaller stocks collectively receive 60% of the Index weighting (each receives on average a 2.73% weighting).
For the fiscal year ended April 30, 2013, on a market price basis, the Fund returned 14.83%. On a net asset value ("NAV") basis, the Fund returned 14.87%. During the same time period, the Index returned 15.84%. During the fiscal year, the Fund fully replicated the components of the Index, therefore, the Fund's performance (NAV basis) differed from the return of the Index primarily due to fees and operating expenses that the Fund incurred during the period.
During this same time period, the S&P Composite 1500 Retailing Index returned 16.67%, and the S&P 500® Index returned 16.89%. The S&P Composite 1500 Retailing Index and S&P 500® Index (the "Benchmark Indices") are unmanaged indices weighted by market capitalization based on the average performance of approximately 90 and 500 securities, respectively. The adviser provided these additional comparative benchmarks to help investors better understand how the investment results of the Fund compare to the performance of another index similar to the Index, as well as to that of a broad-based market benchmark.
The adviser selected the S&P Composite 1500 Retailing Index as a comparative index to the Fund because of its recognition in the marketplace and its shared exposure to the retail industry. These reasons make its performance relevant when comparing to the Fund's performance. The S&P 500® Index does not have the same specific retail industry relevance as the S&P Composite 1500 Retailing Index; however, it was also selected for its recognition in the marketplace, and its performance comparison is a useful measure for investors as a broad representation of the overall U.S. stock market.
The performance of the Fund differed from these Benchmark Indices in part because the Fund tracks an Index that employs a modified equal weighting and stock selection methodology, whereas the Benchmark Indices select and weight stocks based on market capitalization. More specifically, relative to the S&P Composite 1500 Retailing Index, the Fund suffered from the poor performance of specific stocks included in the Index from the General Merchandise Stores and Automotive Retail sub-industries during the fiscal year ended April 30, 2013. The majority of the Fund's underperformance relative to that benchmark index during the period can be attributed to these specific stock performances.
40
Manager's Analysis (Continued)
PowerShares Dynamic Retail Portfolio (ticker: PMR)
Relative to the S&P 500® Index, the Fund was overweight in the Consumer Discretionary sector and also experienced the poor performance of specific stocks included in the Index from within that sector during the fiscal year ended April 30, 2013. The majority of the Fund's underperformance relative to the S&P 500® Index during that period can be attributed to this sector allocation and those specific stock performances.
For the fiscal year ended April 30, 2013, the Retail-Drug Store sub-industry contributed most significantly to the Fund's return, followed by the Food-Retail and Retail-Discount sub-industries, respectively. The Retail-Auto Parts sub-industry detracted most from the Fund's return, followed by the E-Commerce/Products and Retail-Video Rental sub-industries, respectively.
Positions that contributed most significantly to the Fund's return included Walgreen Co., a retail-drug store company (portfolio average weight of 2.22%); and Kroger Co., a food-retail company (portfolio average weight of 4.05%). Positions that detracted most significantly from the Fund's return included O'Reilly Automotive Inc., a retail-auto parts company (no longer held at April 30, 2013); and Fresh Market Inc., a food-retail company (portfolio average weight of 2.52%).
Sub-Industry Breakdown (% of the
Fund's Net Assets) as of April 30, 2013
Food-Retail | 25.8 | ||||||
Retail-Drug Store | 14.4 | ||||||
Retail-Apparel/Shoe | 10.3 | ||||||
Retail-Discount | 9.8 | ||||||
Retail-Building Products | 8.0 | ||||||
Distribution/Wholesale | 5.2 | ||||||
Retail-Office Supplies | 4.8 | ||||||
Rental Auto/Equipment | 3.0 | ||||||
Retail-Miscellaneous/Diversified | 2.9 | ||||||
E-Commerce/Services | 2.8 | ||||||
Retail-Jewelry | 2.8 | ||||||
Transportation-Equipment & Leasing | 2.6 | ||||||
Retail-Home Furnishings | 2.6 | ||||||
Retail-Automobile | 2.5 | ||||||
Retail-Regional Department Store | 2.4 | ||||||
Money Market Fund | 0.4 | ||||||
Liabilities in excess of other assets | (0.3 | ) |
Top Ten Fund Holdings (% of the Fund's
Net Assets) as of April 30, 2013
Security | |||||||
Kroger Co. (The) | 5.4 | ||||||
Walgreen Co. | 5.3 | ||||||
L Brands, Inc. | 5.2 | ||||||
CVS Caremark Corp. | 5.1 | ||||||
Wal-Mart Stores, Inc. | 5.0 | ||||||
Costco Wholesale Corp. | 4.8 | ||||||
Whole Foods Market, Inc. | 4.6 | ||||||
Lowe's Cos., Inc. | 4.6 | ||||||
Rite Aid Corp. | 4.0 | ||||||
SUPERVALU, Inc. | 3.7 | ||||||
Total | 47.7 |
41
Manager's Analysis (Continued)
PowerShares Dynamic Retail Portfolio (ticker: PMR)
Growth of a $10,000 Investment Since Inception†
Fund Performance History (%) As of April 30, 2013
3 Years | 3 Years | 5 Years | 5 Years | Fund Inception† | |||||||||||||||||||||||||||
1 Year | Avg. Ann.†† | Cumulative | Avg. Ann.†† | Cumulative | Avg. Ann.†† | Cumulative | |||||||||||||||||||||||||
Index | |||||||||||||||||||||||||||||||
Dynamic Retail IntellidexSM Index | 15.84 | % | 18.49 | % | 66.37 | % | 14.81 | % | 99.51 | % | 10.80 | % | 116.08 | % | |||||||||||||||||
S&P Composite 1500 Retailing Index | 16.67 | % | 18.34 | % | 65.71 | % | 15.43 | % | 104.89 | % | 9.17 | % | 93.14 | % | |||||||||||||||||
S&P 500® Index | 16.89 | % | 12.80 | % | 43.54 | % | 5.21 | % | 28.92 | % | 6.04 | % | 55.26 | % | |||||||||||||||||
Fund | |||||||||||||||||||||||||||||||
NAV Return | 14.87 | % | 17.74 | % | 63.21 | % | 14.02 | % | 92.70 | % | 10.11 | % | 106.13 | % | |||||||||||||||||
Market Price Return | 14.83 | % | 17.70 | % | 63.07 | % | 14.01 | % | 92.64 | % | 10.10 | % | 105.92 | % |
Fund Inception: October 26, 2005
Performance quoted above represents past performance. Past performance is not a guarantee of future results and current performance may be higher or lower than performance quoted. Investment returns and principal value will fluctuate, and shares of the Fund ("Fund Shares"), when redeemed or sold, may be worth more or less than their original cost. Had the adviser not waived fees and/or reimbursed expenses, performance would have been lower. The adviser has contractually agreed to waive fees and/or pay certain Fund expenses through August 31, 2014. According to the Fund's current prospectus, the total gross annual operating expense ratio was indicated as 0.87%. The Financial Highlights section of the Shareholders Report presents the expense ratios based on expenses incurred during the period covered by this report. NAV and Market Price returns assume that dividends and capital gain distributions have been reinvested in the Fund at NAV and Market 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.
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.
† Fund and Index returns are based on the inception date of the Fund. Returns for the Benchmark Indices are based on the closest month-end to the Fund's inception date.
†† Average annualized.
42
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Manager's Analysis
PowerShares Dynamic Semiconductors Portfolio (ticker: PSI)
As an index fund, the PowerShares Dynamic Semiconductors Portfolio (the "Fund") is passively managed and attempts to track the returns of an underlying index. The Fund seeks investment results that generally correspond (before fees and expenses) to the price and yield of the Dynamic Semiconductors IntellidexSM Index (the "Index"). The Fund generally will invest at least 90% of its total assets in common stocks of semiconductor companies that comprise the Index. These companies are engaged principally in the manufacture of semiconductors.
The Index includes stocks from a universe of the 2,000 largest U.S. stocks (by market capitalization) traded on the NYSE, NYSE MKT and the NASDAQ. NYSE Arca, Inc., the Index provider, selects and ranks companies based on their capital appreciation potential using a proprietary NYSE Arca Intellidex model. The Index includes 30 stocks that NYSE Arca, Inc. identifies as having significant operations in these industries and ranks them according to their model score. The Index provider separates them into two modified equally weighted groups. The 8 top-ranked relatively larger stocks collectively receive 40% of the Index weighting (each receives on average a 5% weighting) and the 22 top-ranked relatively smaller stocks collectively receive 60% of the Index weighting (each receives on average a 2.73% weighting).
For the fiscal year ended April 30, 2013, on a market price basis, the Fund returned (2.50)%. On a net asset value ("NAV") basis, the Fund returned (2.56)%. During the same time period, the Index returned (1.81)%. During the fiscal year, the Fund fully replicated the components of the Index, therefore, the Fund's performance (NAV basis) differed from the return of the Index primarily due to fees and operating expenses that the Fund incurred during the period.
During this same time period, the S&P Composite 1500 Semiconductor Index returned (2.27)%, and the S&P 500® Index returned 16.89%. The S&P Composite 1500 Semiconductor Index and S&P 500® Index (the "Benchmark Indices") are unmanaged indices weighted by market capitalization based on the average performance of approximately 62 and 500 securities, respectively. The adviser provided these additional comparative benchmarks to help investors better understand how the investment results of the Fund compare to the performance of another index similar to the Index, as well as to that of a broad-based market benchmark.
The adviser selected the S&P Composite 1500 Semiconductor Index as a comparative index to the Fund because of its recognition in the marketplace and its shared exposure to the semiconductor industry. These reasons make its performance relevant when comparing to the Fund's performance. The S&P 500® Index does not have the same specific semiconductor industry relevance as the S&P Composite 1500 Semiconductor Index, however, it was also selected for its recognition in the marketplace, and its performance comparison is a useful measure for investors as a broad representation of the overall U.S. stock market.
The performance of the Fund differed from these Benchmark Indices in part because the Fund tracks an Index that employs a modified equal weighting and stock selection methodology, whereas the Benchmark Indices select and weight stocks based on market capitalization. Relative to the S&P Composite 1500 Semiconductor Index, the Fund performed mostly in line with the Index during the fiscal year ended April 30, 2013, with fees contributing to the Fund's slight underperformance.
Relative to the S&P 500® Index, the Fund was overweight in the Information Technology sector and also experienced the poor performance of specific stocks that were included in the Index from that sector during the fiscal year ended April 30th, 2013. The majority of the Fund's underperformance relative to the
44
Manager's Analysis (Continued)
PowerShares Dynamic Semiconductors Portfolio (ticker: PSI)
S&P 500® Index during that period can be attributed to this sector allocation and those specific stock performances.
For the fiscal year ended April 30, 2013, the Lasers-Systems/Components sub-industry contributed most significantly to the Fund's return, followed by the Wireless Equipment and Electronic Components-Miscellaneous sub-industries, respectively. The Electronic Components-Semiconductors sub-industry detracted most from the Fund's return, followed by the Semiconductor Components-Integrated Circuits and Semiconductor Equipment sub-industries, respectively.
Positions that contributed most significantly to the Fund's return included Cymer, Inc., a lasers-systems/components company (portfolio average weight of 1.33%); and Cree, Inc., an electronic components-semiconductors company (portfolio average weight of 1.25%). Positions that detracted most significantly from the Fund's return included Advanced Micro Devices Inc., an electronic components-semiconductors company (no longer held at April 30, 2013); and Cirrus Logic, Inc., a semiconductor components-integrated circuits company (portfolio average weight of 1.86%).
Sub-Industry Breakdown (% of the
Fund's Net Assets) as of April 30, 2013
Electronic Components-Semiconductors | 29.7 | ||||||
Semiconductor Components-Integrated Circuits | 28.8 | ||||||
Semiconductor Equipment | 26.9 | ||||||
Wireless Equipment | 6.0 | ||||||
Computers-Memory Devices | 3.1 | ||||||
Lasers-Systems/Components | 2.9 | ||||||
Power Conversion/Supply Equipment | 2.6 | ||||||
Money Market Fund | 0.4 | ||||||
Liabilities in excess of other assets | (0.4 | ) |
Top Ten Fund Holdings (% of the Fund's
Net Assets) as of April 30, 2013
Security | |||||||
Micron Technology, Inc. | 5.8 | ||||||
Applied Materials, Inc. | 5.3 | ||||||
Texas Instruments, Inc. | 5.3 | ||||||
Xilinx, Inc. | 5.0 | ||||||
Maxim Integrated Products, Inc. | 4.9 | ||||||
Analog Devices, Inc. | 4.8 | ||||||
Linear Technology Corp. | 4.8 | ||||||
QUALCOMM, Inc. | 4.7 | ||||||
Veeco Instruments, Inc. | 3.5 | ||||||
Cree, Inc. | 3.4 | ||||||
Total | 47.5 |
45
Manager's Analysis (Continued)
PowerShares Dynamic Semiconductors Portfolio (ticker: PSI)
Growth of a $10,000 Investment Since Inception†
Fund Performance History (%) As of April 30, 2013
3 Years | 3 Years | 5 Years | 5 Years | Fund Inception† | |||||||||||||||||||||||||||
1 Year | Avg. Ann.†† | Cumulative | Avg. Ann.†† | Cumulative | Avg. Ann.†† | Cumulative | |||||||||||||||||||||||||
Index | |||||||||||||||||||||||||||||||
Dynamic Semiconductors IntellidexSM Index | -1.81 | % | 3.29 | % | 10.20 | % | -0.22 | % | -1.11 | % | 1.24 | % | 10.18 | % | |||||||||||||||||
S&P Composite 1500 Semiconductor Index | -2.27 | % | 5.04 | % | 15.88 | % | 4.36 | % | 23.76 | % | 2.11 | % | 17.73 | % | |||||||||||||||||
S&P 500® Index | 16.89 | % | 12.80 | % | 43.54 | % | 5.21 | % | 28.92 | % | 6.03 | % | 58.18 | % | |||||||||||||||||
Fund | |||||||||||||||||||||||||||||||
NAV Return | -2.56 | % | 2.57 | % | 7.90 | % | -0.94 | % | -4.61 | % | 0.53 | % | 4.27 | % | |||||||||||||||||
Market Price Return | -2.50 | % | 2.50 | % | 7.69 | % | -0.98 | % | -4.80 | % | 0.50 | % | 3.99 | % |
Fund Inception: June 23, 2005
Performance quoted above represents past performance. Past performance is not a guarantee of future results and current performance may be higher or lower than performance quoted. Investment returns and principal value will fluctuate, and shares of the Fund ("Fund Shares"), when redeemed or sold, may be worth more or less than their original cost. Had the adviser not waived fees and/or reimbursed expenses, performance would have been lower. The adviser has contractually agreed to waive fees and/or pay certain Fund expenses through August 31, 2014. According to the Fund's current prospectus, the total gross annual operating expense ratio was indicated as 1.02%. The Financial Highlights section of the Shareholders Report presents the expense ratios based on expenses incurred during the period covered by this report. NAV and Market Price returns assume that dividends and capital gain distributions have been reinvested in the Fund at NAV and Market 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.
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.
† Fund and Index returns are based on the inception date of the Fund. Returns for the Benchmark Indices are based on the closest month-end to the Fund's inception date.
†† Average annualized.
46
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Manager's Analysis
PowerShares Dynamic Software Portfolio (ticker: PSJ)
As an index fund, the PowerShares Dynamic Software Portfolio (the "Fund") is passively managed and attempts to track the returns of an underlying index. The Fund seeks investment results that generally correspond (before fees and expenses) to the price and yield of the Dynamic Software IntellidexSM Index (the "Index"). The Fund generally will invest at least 90% of its total assets in common stocks of software companies that comprise the Index. These companies are engaged principally in the research, design, production or distribution of products or processes that relate to software applications and systems and information-based services.
The Index includes stocks from a universe of the 2,000 largest U.S. stocks (by market capitalization) traded on the NYSE, NYSE MKT and the NASDAQ. NYSE Arca, Inc., the Index provider, selects and ranks companies based on their capital appreciation potential using a proprietary NYSE Arca Intellidex model. The Index includes 30 stocks that NYSE Arca, Inc. identifies as having significant operations in these sectors and ranks them according to their model score. The Index provider separates them into two modified equally weighted groups. The 8 top-ranked relatively larger stocks collectively receive 40% of the Index weighting (each receives on average a 5% weighting) and the 22 top-ranked relatively smaller stocks collectively receive 60% of the Index weighting (each receives on average a 2.73% weighting).
For the fiscal year ended April 30, 2013, on a market price basis, the Fund returned 12.09%. On a net asset value ("NAV") basis, the Fund returned 12.24%. During the same time period, the Index returned 12.96%. During the fiscal year, the Fund fully replicated the components of the Index, therefore, the Fund's performance (NAV basis) differed from the return of the Index primarily due to fees and operating expenses that the Fund incurred during the period.
During this same time period, the S&P Composite 1500 Software & Services Index returned 14.15%, and the S&P 500® Index returned 16.89%. The S&P Composite 1500 Software & Services Index and S&P 500® Index (the "Benchmark Indices") are unmanaged indices weighted by market capitalization based on the average performance of approximately 113 and 500 securities, respectively. The adviser provided these additional comparative benchmarks to help investors better understand how the investment results of the Fund compare to the performance of another index similar to the Index as well as to that of a broad-based market benchmark.
The adviser selected the S&P Composite 1500 Software & Services Index as a comparative index to the Fund because of its recognition in the marketplace and its shared exposure to the software industry. These reasons make its performance relevant when comparing to the Fund's performance. The S&P 500® Index does not have the same specific software industry relevance as the S&P Composite 1500 Software & Services Index; however, it was also selected for its recognition in the marketplace, and its performance comparison is a useful measure for investors as a broad representation of the overall U.S. stock market.
The performance of the Fund differed from these Benchmark Indices in part because the Fund tracks an Index that employs a modified equal weighting and stock selection methodology, whereas the Benchmark Indices select and weight stocks based on market capitalization. More specifically, relative to the S&P Composite 1500 Software & Services Index, the Fund suffered from being underweight in the Internet Software and Data Processing sub-industries during the fiscal year ended April 30, 2013. The majority of the Fund's underperformance relative to that index during the period can be attributed to these sub-industry allocations.
48
Manager's Analysis (Continued)
PowerShares Dynamic Software Portfolio (ticker: PSJ)
Relative to the S&P 500® Index, the Fund was overweight in the Information Technology sector during the fiscal year ended April 30, 2013. The majority of the Fund's underperformance relative to the S&P 500® Index during that period can be attributed to this sector allocation.
For the fiscal year ended April 30, 2013, the Medical Information Systems sub-industry contributed most significantly to the Fund's return, followed by the Computer Services and Computer Aided Design sub-industries, respectively. The Internet Infrastructure Software sub-industry detracted most from the Fund's return, followed by the Entertainment Software and Motion Pictures & Services sub-industries, respectively.
Positions that contributed most significantly to the Fund's return included Symantec Corp., a Internet security company (portfolio average weight of 2.05%); and Aspen Technology, Inc., a computer aided design company (portfolio average weight of 2.82%). Positions that detracted most significantly from the Fund's return included Pros Holdings Inc., an enterprise software/services company (portfolio average weight of 0.68%); and Teradata Corp., a computers-integrated systems company (no longer held at April 30, 2013).
Sub-Industry Breakdown (% of the
Fund's Net Assets) as of April 30, 2013
Enterprise Software/Services | 17.8 | ||||||
Medical Information Systems | 11.7 | ||||||
Applications Software | 9.9 | ||||||
Computer Aided Design | 7.7 | ||||||
Telecommunication Services | 7.6 | ||||||
Electronic Forms | 5.6 | ||||||
Data Processing/Management | 5.3 | ||||||
Computer Services | 5.3 | ||||||
Electronic Design Automation | 5.1 | ||||||
Internet Security | 5.1 | ||||||
Computers-Integrated Systems | 5.0 | ||||||
Finance-Mortgage Loan/Banker | 3.5 | ||||||
Electric-Distribution | 2.7 | ||||||
Transactional Software | 2.7 | ||||||
Computer Software | 2.6 | ||||||
Communications Software | 2.4 | ||||||
Money Market Fund | 0.2 | ||||||
Liabilities in excess of other assets | (0.2 | ) |
Top Ten Fund Holdings (% of the Fund's
Net Assets) as of April 30, 2013
Security | |||||||
Adobe Systems, Inc. | 5.6 | ||||||
Cerner Corp. | 5.3 | ||||||
CA, Inc. | 5.2 | ||||||
Symantec Corp. | 5.1 | ||||||
ANSYS, Inc. | 5.1 | ||||||
Amdocs Ltd. | 4.8 | ||||||
Intuit, Inc. | 4.5 | ||||||
Oracle Corp. | 4.5 | ||||||
Ellie Mae, Inc. | 3.5 | ||||||
Medidata Solutions, Inc. | 3.4 | ||||||
Total | 47.0 |
49
Manager's Analysis (Continued)
PowerShares Dynamic Software Portfolio (ticker: PSJ)
Growth of a $10,000 Investment Since Inception†
Fund Performance History (%) As of April 30, 2013
3 Years | 3 Years | 5 Years | 5 Years | Fund Inception† | |||||||||||||||||||||||||||
1 Year | Avg. Ann.†† | Cumulative | Avg. Ann.†† | Cumulative | Avg. Ann.†† | Cumulative | |||||||||||||||||||||||||
Index | |||||||||||||||||||||||||||||||
Dynamic Software IntellidexSM Index | 12.96 | % | 10.90 | % | 36.41 | % | 12.20 | % | 77.84 | % | 9.98 | % | 110.99 | % | |||||||||||||||||
S&P Composite 1500 Software & Services Index | 14.15 | % | 14.06 | % | 48.38 | % | 8.74 | % | 52.01 | % | 8.02 | % | 82.94 | % | |||||||||||||||||
S&P 500® Index | 16.89 | % | 12.80 | % | 43.54 | % | 5.21 | % | 28.92 | % | 6.03 | % | 58.18 | % | |||||||||||||||||
Fund | |||||||||||||||||||||||||||||||
NAV Return | 12.24 | % | 10.19 | % | 33.81 | % | 11.46 | % | 72.05 | % | 9.32 | % | 101.34 | % | |||||||||||||||||
Market Price Return | 12.09 | % | 10.13 | % | 33.57 | % | 11.42 | % | 71.72 | % | 9.29 | % | 100.93 | % |
Fund Inception: June 23, 2005
Performance quoted above represents past performance. Past performance is not a guarantee of future results and current performance may be higher or lower than performance quoted. Investment returns and principal value will fluctuate, and shares of the Fund ("Fund Shares"), when redeemed or sold, may be worth more or less than their original cost. Had the adviser not waived fees and/or reimbursed expenses, performance would have been lower. The adviser has contractually agreed to waive fees and/or pay certain Fund expenses through August 31, 2014. According to the Fund's current prospectus, the total gross annual operating expense ratio was indicated as 0.78%. The Financial Highlights section of the Shareholders Report presents the expense ratios based on expenses incurred during the period covered by this report. NAV and Market Price returns assume that dividends and capital gain distributions have been reinvested in the Fund at NAV and Market 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.
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.
† Fund and Index returns are based on the inception date of the Fund. Returns for the Benchmark Indices are based on the closest month-end to the Fund's inception date.
†† Average annualized.
50
Fees and Expenses
As a shareholder of a Fund of the PowerShares Exchange-Traded Fund Trust, you incur advisory fees and other 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 ended April 30, 2013.
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 and brokerage commissions. 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, 2012 | Ending Account Value April 30, 2013 | Annualized Expense Ratio Based on the Six-Month Period | Expenses Paid During the Six-Month Period (1) | ||||||||||||||||
PowerShares Dynamic Biotechnology & Genome Portfolio (PBE) Actual | $ | 1,000.00 | $ | 1,266.13 | 0.63 | % | $ | 3.54 | |||||||||||
Hypothetical (5% return before expenses) | $ | 1,000.00 | $ | 1,021.67 | 0.63 | % | $ | 3.16 | |||||||||||
PowerShares Dynamic Building & Construction Portfolio (PKB) Actual | $ | 1,000.00 | $ | 1,200.18 | 0.63 | % | $ | 3.44 | |||||||||||
Hypothetical (5% return before expenses) | $ | 1,000.00 | $ | 1,021.67 | 0.63 | % | $ | 3.16 | |||||||||||
PowerShares Dynamic Energy Exploration & Production Portfolio (PXE) Actual | $ | 1,000.00 | $ | 1,184.22 | 0.65 | % | $ | 3.52 | |||||||||||
Hypothetical (5% return before expenses) | $ | 1,000.00 | $ | 1,021.57 | 0.65 | % | $ | 3.26 |
51
Fees and Expenses (Continued)
Beginning Account Value November 1, 2012 | Ending Account Value April 30, 2013 | Annualized Expense Ratio Based on the Six-Month Period | Expenses Paid During the Six-Month Period (1) | ||||||||||||||||
PowerShares Dynamic Food & Beverage Portfolio (PBJ) Actual | $ | 1,000.00 | $ | 1,207.34 | 0.63 | % | $ | 3.45 | |||||||||||
Hypothetical (5% return before expenses) | $ | 1,000.00 | $ | 1,021.67 | 0.63 | % | $ | 3.16 | |||||||||||
PowerShares Dynamic Leisure and Entertainment Portfolio (PEJ) Actual | $1,000.00 | $ | 1,224.37 | 0.63 | % | $ | 3.47 | ||||||||||||
Hypothetical (5% return before expenses) | $ | 1,000.00 | $ | 1,021.67 | 0.63 | % | $ | 3.16 | |||||||||||
PowerShares Dynamic Media Portfolio (PBS) Actual | $ | 1,000.00 | $ | 1,239.66 | 0.63 | % | $ | 3.50 | |||||||||||
Hypothetical (5% return before expenses) | $ | 1,000.00 | $ | 1,021.67 | 0.63 | % | $ | 3.16 | |||||||||||
PowerShares Dynamic Networking Portfolio (PXQ) Actual | $ | 1,000.00 | $ | 1,084.80 | 0.65 | % | $ | 3.36 | |||||||||||
Hypothetical (5% return before expenses) | $ | 1,000.00 | $ | 1,021.57 | 0.65 | % | $ | 3.26 | |||||||||||
PowerShares Dynamic Oil & Gas Services Portfolio (PXJ) Actual | $ | 1,000.00 | $ | 1,169.19 | 0.60 | % | $ | 3.23 | |||||||||||
Hypothetical (5% return before expenses) | $ | 1,000.00 | $ | 1,021.82 | 0.60 | % | $ | 3.01 | |||||||||||
PowerShares Dynamic Pharmaceuticals Portfolio (PJP) Actual | $ | 1,000.00 | $ | 1,219.03 | 0.63 | % | $ | 3.47 | |||||||||||
Hypothetical (5% return before expenses) | $ | 1,000.00 | $ | 1,021.67 | 0.63 | % | $ | 3.16 | |||||||||||
PowerShares Dynamic Retail Portfolio (PMR) Actual | $ | 1,000.00 | $ | 1,172.28 | 0.63 | % | $ | 3.39 | |||||||||||
Hypothetical (5% return before expenses) | $ | 1,000.00 | $ | 1,021.67 | 0.63 | % | $ | 3.16 | |||||||||||
PowerShares Dynamic Semiconductors Portfolio (PSI) Actual | $ | 1,000.00 | $ | 1,128.44 | 0.63 | % | $ | 3.32 | |||||||||||
Hypothetical (5% return before expenses) | $ | 1,000.00 | $ | 1,021.67 | 0.63 | % | $ | 3.16 | |||||||||||
PowerShares Dynamic Software Portfolio (PSJ) Actual | $ | 1,000.00 | $ | 1,112.90 | 0.63 | % | $ | 3.30 | |||||||||||
Hypothetical (5% return before expenses) | $ | 1,000.00 | $ | 1,021.67 | 0.63 | % | $ | 3.16 |
(1) Expenses are calculated using the annualized expense ratio, which represents the ongoing expenses as a percentage of net assets for the six-month period ended April 30, 2013. Expenses are calculated by multiplying the Fund's annualized expense ratio by the average account value of the period, then multiplying the result by 181/365. Expense ratios for the most recent six-month period may differ from expense ratios based on the annualized data in the Financial Highlights.
52
Schedule of Investments
PowerShares Dynamic Biotechnology & Genome Portfolio (PBE)
April 30, 2013
Number of Shares | Value | ||||||||||
Common Stocks—100.0% | |||||||||||
Biotechnology—57.0% | |||||||||||
125,634 | Acorda Therapeutics, Inc.(a) | $ | 4,971,337 | ||||||||
228,148 | Affymax, Inc.(a) | 205,356 | |||||||||
160,793 | Alnylam Pharmaceuticals, Inc.(a) | 3,850,992 | |||||||||
79,588 | Amgen, Inc. | 8,293,865 | |||||||||
42,031 | Biogen Idec, Inc.(a) | 9,201,847 | |||||||||
88,474 | Cubist Pharmaceuticals, Inc.(a) | 4,062,726 | |||||||||
239,759 | Emergent Biosolutions, Inc.(a) | 3,677,903 | |||||||||
162,776 | Gilead Sciences, Inc.(a) | 8,242,977 | |||||||||
76,872 | Illumina, Inc.(a) | 4,972,850 | |||||||||
179,135 | Incyte Corp.(a) | 3,967,840 | |||||||||
118,746 | Life Technologies Corp.(a) | 8,750,393 | |||||||||
150,701 | Myriad Genetics, Inc.(a) | 4,197,023 | |||||||||
481,970 | NPS Pharmaceuticals, Inc.(a) | 6,472,857 | |||||||||
536,132 | PDL BioPharma, Inc. | 4,149,662 | |||||||||
43,085 | Regeneron Pharmaceuticals, Inc.(a) | 9,269,307 | |||||||||
65,264 | United Therapeutics Corp.(a) | 4,358,330 | |||||||||
88,645,265 | |||||||||||
Chemicals—4.6% | |||||||||||
90,514 | Sigma-Aldrich Corp. | 7,122,547 | |||||||||
Electronics—6.9% | |||||||||||
59,121 | FEI Co. | 3,776,649 | |||||||||
74,580 | Waters Corp.(a) | 6,891,192 | |||||||||
10,667,841 | |||||||||||
Healthcare - Products—7.0% | |||||||||||
212,458 | Bruker Corp.(a) | 3,775,378 | |||||||||
217,736 | Luminex Corp.(a) | 3,620,950 | |||||||||
55,150 | Techne Corp. | 3,537,321 | |||||||||
10,933,649 | |||||||||||
Pharmaceuticals—24.5% | |||||||||||
257,974 | Isis Pharmaceuticals, Inc.(a) | 5,776,038 | |||||||||
562,538 | Keryx Biopharmaceuticals, Inc.(a) | 4,584,685 | |||||||||
79,869 | Neogen Corp.(a) | 4,059,741 | |||||||||
48,129 | Onyx Pharmaceuticals, Inc.(a) | 4,562,629 | |||||||||
536,132 | OPKO Health, Inc.(a) | 3,570,639 | |||||||||
342,326 | Optimer Pharmaceuticals, Inc.(a) | 5,285,514 | |||||||||
76,462 | Pharmacyclics, Inc.(a) | 6,231,653 | |||||||||
149,268 | ViroPharma, Inc.(a) | 4,067,553 | |||||||||
38,138,452 | |||||||||||
Total Common Stocks (Cost $116,070,707) | 155,507,754 |
Number of Shares | Value | ||||||||||
Money Market Fund—0.1% | |||||||||||
147,827 | Goldman Sachs Financial Square Prime Obligations - Institutional Share Class (Cost $147,827) | $ | 147,827 | ||||||||
Total Investments (Cost $116,218,534)—100.1% | 155,655,581 | ||||||||||
Liabilities in excess of other assets—(0.1)% | (202,198 | ) | |||||||||
Net Assets—100.0% | $ | 155,453,383 |
Notes to Schedule of Investments:
(a) Non-income producing security.
See Notes to Financial Statements.
53
Schedule of Investments
PowerShares Dynamic Building & Construction Portfolio (PKB)
April 30, 2013
Number of Shares | Value | ||||||||||
Common Stocks—100.0% | |||||||||||
Auto Manufacturers—2.6% | |||||||||||
69,089 | Oshkosh Corp.(a) | $ | 2,712,434 | ||||||||
Building Materials—21.9% | |||||||||||
111,274 | AAON, Inc. | 3,161,295 | |||||||||
107,861 | Apogee Enterprises, Inc. | 2,748,298 | |||||||||
100,978 | Boise Cascade Co.(a) | 3,234,325 | |||||||||
149,430 | Gibraltar Industries, Inc.(a) | 2,794,341 | |||||||||
293,506 | Headwaters, Inc.(a) | 3,187,475 | |||||||||
46,515 | Lennox International, Inc. | 2,883,930 | |||||||||
127,170 | Louisiana-Pacific Corp.(a) | 2,304,321 | |||||||||
97,308 | USG Corp.(a) | 2,529,035 | |||||||||
22,843,020 | |||||||||||
Distribution/Wholesale—5.5% | |||||||||||
73,694 | Beacon Roofing Supply, Inc.(a) | 2,809,952 | |||||||||
58,841 | Pool Corp. | 2,884,386 | |||||||||
5,694,338 | |||||||||||
Engineering & Construction—14.8% | |||||||||||
87,950 | AECOM Technology Corp.(a) | 2,556,706 | |||||||||
70,431 | EMCOR Group, Inc. | 2,634,119 | |||||||||
101,041 | Jacobs Engineering Group, Inc.(a) | 5,100,550 | |||||||||
88,406 | MasTec, Inc.(a) | 2,457,687 | |||||||||
115,151 | MYR Group, Inc.(a) | 2,625,443 | |||||||||
15,374,505 | |||||||||||
Environmental Control—2.3% | |||||||||||
91,578 | Tetra Tech, Inc.(a) | 2,407,586 | |||||||||
Forest Products & Paper—2.2% | |||||||||||
37,240 | Deltic Timber Corp. | 2,326,755 | |||||||||
Home Builders—22.0% | |||||||||||
151,092 | KB Home | 3,405,614 | |||||||||
130,976 | Lennar Corp., Class A | 5,398,831 | |||||||||
4,970 | NVR, Inc.(a) | 5,119,100 | |||||||||
262,495 | PulteGroup, Inc.(a) | 5,509,770 | |||||||||
76,101 | Ryland Group, Inc. (The) | 3,429,111 | |||||||||
22,862,426 | |||||||||||
Machinery - Construction & Mining—2.3% | |||||||||||
83,340 | Terex Corp.(a) | 2,383,524 | |||||||||
Miscellaneous Manufacturing—7.6% | |||||||||||
38,310 | A.O. Smith Corp. | 2,889,723 | |||||||||
94,305 | Ingersoll-Rand PLC (Ireland) | 5,073,609 | |||||||||
7,963,332 | |||||||||||
Retail—13.8% | |||||||||||
75,654 | Home Depot, Inc. (The) | 5,549,221 | |||||||||
131,698 | Lowe's Cos., Inc. | 5,059,837 | |||||||||
46,123 | Lumber Liquidators Holdings, Inc.(a) | 3,780,241 | |||||||||
14,389,299 |
Number of Shares | Value | ||||||||||
Common Stocks (Continued) | |||||||||||
Textiles—5.0% | |||||||||||
46,475 | Mohawk Industries, Inc.(a) | $ | 5,153,148 | ||||||||
Total Common Stocks (Cost $91,464,367) | 104,110,367 | ||||||||||
Money Market Fund—0.1% | |||||||||||
104,516 | Goldman Sachs Financial Square Prime Obligations - Institutional Share Class (Cost $104,516) | 104,516 | |||||||||
Total Investments (Cost $91,568,883)—100.1% | 104,214,883 | ||||||||||
Liabilities in excess of other assets—(0.1)% | (94,058 | ) | |||||||||
Net Assets—100.0% | $ | 104,120,825 |
Notes to Schedule of Investments:
(a) Non-income producing security.
See Notes to Financial Statements.
54
Schedule of Investments
PowerShares Dynamic Energy Exploration & Production Portfolio (PXE)
April 30, 2013
Number of Shares | Value | ||||||||||
Common Stocks and Other Equity Interests—100.0% | |||||||||||
Gas - Distribution—3.0% | |||||||||||
124,857 | Questar Corp. | $ | 3,170,119 | ||||||||
Oil Companies - Exploration & Production—47.4% | |||||||||||
48,932 | Cabot Oil & Gas Corp. | 3,329,823 | |||||||||
42,513 | Cimarex Energy Co. | 3,111,101 | |||||||||
92,191 | ConocoPhillips | 5,572,946 | |||||||||
158,111 | Denbury Resources, Inc.(a) | 2,828,606 | |||||||||
113,699 | EPL Oil & Gas, Inc.(a) | 3,714,546 | |||||||||
48,326 | EQT Corp. | 3,630,249 | |||||||||
117,441 | Newfield Exploration Co.(a) | 2,559,039 | |||||||||
64,173 | Occidental Petroleum Corp. | 5,728,082 | |||||||||
120,388 | Pioneer Southwest Energy Partners LP | 3,154,166 | |||||||||
160,884 | Southwestern Energy Co.(a) | 6,020,279 | |||||||||
138,178 | Stone Energy Corp.(a) | 2,726,252 | |||||||||
354,313 | VAALCO Energy, Inc.(a) | 2,380,983 | |||||||||
178,773 | W&T Offshore, Inc. | 2,088,069 | |||||||||
58,981 | Whiting Petroleum Corp.(a) | 2,624,655 | |||||||||
49,468,796 | |||||||||||
Oil Companies - Integrated—17.3% | |||||||||||
103,014 | Alon USA Partners LP(a) | 2,554,747 | |||||||||
154,581 | Marathon Oil Corp. | 5,050,161 | |||||||||
86,989 | Murphy Oil Corp. | 5,401,147 | |||||||||
83,692 | Phillips 66 | 5,101,028 | |||||||||
18,107,083 | |||||||||||
Oil Refining & Marketing—32.3% | |||||||||||
146,846 | Alon USA Energy, Inc. | 2,437,644 | |||||||||
78,991 | Calumet Specialty Products Partners LP | 2,982,700 | |||||||||
52,846 | CVR Energy, Inc. | 2,603,722 | |||||||||
79,205 | Delek US Holdings, Inc. | 2,858,509 | |||||||||
52,732 | HollyFrontier Corp. | 2,607,597 | |||||||||
65,810 | Marathon Petroleum Corp. | 5,156,872 | |||||||||
102,508 | Northern Tier Energy LP | 2,704,161 | |||||||||
72,856 | PBF Energy, Inc. | 2,218,465 | |||||||||
53,601 | Tesoro Corp. | 2,862,293 | |||||||||
116,464 | Valero Energy Corp. | 4,695,829 | |||||||||
83,403 | Western Refining, Inc. | 2,577,987 | |||||||||
33,705,779 | |||||||||||
Total Common Stocks and Other Equity Interests | (Cost $93,282,977) | 104,451,777 |
Number of Shares | Value | ||||||||||
Money Market Fund—0.1% | |||||||||||
124,038 | Goldman Sachs Financial Square Prime Obligations - Institutional Share Class (Cost $124,038) | $ | 124,038 | ||||||||
Total Investments (Cost $93,407,015)—100.1% | 104,575,815 | ||||||||||
Liabilities in excess of other assets—(0.1)% | (148,838 | ) | |||||||||
Net Assets—100.0% | $ | 104,426,977 |
Notes to Schedule of Investments:
(a) Non-income producing security.
See Notes to Financial Statements.
55
Schedule of Investments
PowerShares Dynamic Food & Beverage Portfolio (PBJ)
April 30, 2013
Number of Shares | Value | ||||||||||
Common Stocks—100.0% | |||||||||||
Agricultural Chemicals—4.9% | |||||||||||
108,405 | Monsanto Co. | $ | 11,579,822 | ||||||||
Agricultural Operations—7.7% | |||||||||||
121,965 | Andersons, Inc. (The) | 6,649,532 | |||||||||
337,639 | Archer-Daniels-Midland Co. | 11,459,467 | |||||||||
18,108,999 | |||||||||||
Beverages - Non-alcoholic—7.5% | |||||||||||
164,446 | Coca-Cola Enterprises, Inc. | 6,023,657 | |||||||||
143,421 | PepsiCo, Inc. | 11,827,930 | |||||||||
17,851,587 | |||||||||||
Food - Baking—3.0% | |||||||||||
213,573 | Flowers Foods, Inc. | 7,035,095 | |||||||||
Food - Confectionery—10.7% | |||||||||||
133,427 | Hershey Co. (The) | 11,896,351 | |||||||||
63,580 | J.M. Smucker Co. (The) | 6,563,363 | |||||||||
216,615 | Tootsie Roll Industries, Inc. | 6,764,887 | |||||||||
25,224,601 | |||||||||||
Food - Dairy Products—3.0% | |||||||||||
373,216 | Dean Foods Co.(a) | 7,143,354 | |||||||||
Food - Meat Products—2.8% | |||||||||||
159,219 | Hormel Foods Corp. | 6,570,968 | |||||||||
Food - Miscellaneous/Diversified—30.9% | |||||||||||
147,095 | Cal-Maine Foods, Inc. | 6,278,015 | |||||||||
174,287 | ConAgra Foods, Inc. | 6,164,531 | |||||||||
508,755 | Dole Food Co., Inc.(a) | 5,474,204 | |||||||||
237,317 | General Mills, Inc. | 11,965,523 | |||||||||
85,714 | J & J Snack Foods Corp. | 6,430,264 | |||||||||
180,604 | Kellogg Co. | 11,746,484 | |||||||||
80,321 | Lancaster Colony Corp. | 6,339,737 | |||||||||
404,863 | Mondelez International, Inc., Class A | 12,732,941 | |||||||||
2,126 | Seaboard Corp. | 5,837,954 | |||||||||
72,969,653 | |||||||||||
Food - Retail—10.2% | |||||||||||
205,345 | Kroger Co. (The) | 7,059,761 | |||||||||
260,545 | Safeway, Inc. | 5,867,473 | |||||||||
126,274 | Whole Foods Market, Inc. | 11,152,520 | |||||||||
24,079,754 | |||||||||||
Food - Wholesale/Distribution—2.4% | |||||||||||
221,750 | Fresh Del Monte Produce, Inc. | 5,634,668 | |||||||||
Poultry—5.7% | |||||||||||
668,750 | Pilgrim's Pride Corp.(a) | 6,547,062 | |||||||||
113,884 | Sanderson Farms, Inc. | 6,976,534 | |||||||||
13,523,596 |
Number of Shares | Value | ||||||||||
Common Stocks (Continued) | |||||||||||
Retail - Restaurants—11.2% | |||||||||||
188,571 | AFC Enterprises, Inc.(a) | $ | 6,011,643 | ||||||||
293,679 | Fiesta Restaurant Group, Inc.(a) | 8,005,690 | |||||||||
460,422 | Krispy Kreme Doughnuts, Inc.(a) | 6,289,364 | |||||||||
1,076,827 | Wendy's Co. (The) | 6,127,146 | |||||||||
26,433,843 | |||||||||||
Total Common Stocks (Cost $216,836,009) | 236,155,940 | ||||||||||
Money Market Fund—0.0% | |||||||||||
91,438 | Goldman Sachs Financial Square Prime Obligations - Institutional Share Class (Cost $91,438) | 91,438 | |||||||||
Total Investments (Cost $216,927,447)—100.0% | 236,247,378 | ||||||||||
Liabilities in excess of other assets—(0.0)% | (21,056 | ) | |||||||||
Net Assets—100.0% | $ | 236,226,322 |
Notes to Schedule of Investments:
(a) Non-income producing security.
See Notes to Financial Statements.
56
Schedule of Investments
PowerShares Dynamic Leisure and Entertainment Portfolio (PEJ)
April 30, 2013
Number of Shares | Value | ||||||||||
Common Stocks—100.0% | |||||||||||
Entertainment—22.8% | |||||||||||
43,433 | Bally Technologies, Inc.(a) | $ | 2,314,110 | ||||||||
75,303 | Cinemark Holdings, Inc. | 2,326,110 | |||||||||
133,878 | International Game Technology | 2,269,232 | |||||||||
102,670 | Lions Gate Entertainment Corp. (Canada)(a) | 2,547,243 | |||||||||
38,028 | Madison Square Garden Co. (The), Class A(a) | 2,291,948 | |||||||||
53,276 | Marriott Vacations Worldwide Corp.(a) | 2,422,992 | |||||||||
118,580 | Multimedia Games Holding Co., Inc.(a) | 2,924,183 | |||||||||
136,192 | Regal Entertainment Group, Class A | 2,443,284 | |||||||||
19,539,102 | |||||||||||
Internet—3.9% | |||||||||||
60,476 | Expedia, Inc. | 3,376,980 | |||||||||
Leisure Time—2.7% | |||||||||||
63,069 | Royal Caribbean Cruises Ltd. | 2,303,910 | |||||||||
Lodging—12.4% | |||||||||||
98,762 | Marriott International, Inc., Class A | 4,252,692 | |||||||||
64,947 | Starwood Hotels & Resorts Worldwide, Inc. | 4,190,380 | |||||||||
36,439 | Wyndham Worldwide Corp. | 2,189,255 | |||||||||
10,632,327 | |||||||||||
Media—26.0% | |||||||||||
36,032 | AMC Networks, Inc., Class A(a) | 2,270,376 | |||||||||
55,344 | Discovery Communications, Inc., Class A(a) | 4,362,214 | |||||||||
62,342 | Scripps Networks Interactive, Inc., Class A | 4,150,730 | |||||||||
110,338 | Starz - Liberty Capital, Series A(a) | 2,579,703 | |||||||||
73,600 | Time Warner, Inc. | 4,399,808 | |||||||||
71,891 | Walt Disney Co. (The) | 4,517,631 | |||||||||
22,280,462 | |||||||||||
Retail—32.2% | |||||||||||
67,857 | AFC Enterprises, Inc.(a) | 2,163,281 | |||||||||
124,042 | Bloomin' Brands, Inc.(a) | 2,697,914 | |||||||||
385,384 | Denny's Corp.(a) | 2,185,127 | |||||||||
28,543 | DineEquity, Inc. | 2,033,403 | |||||||||
105,679 | Fiesta Restaurant Group, Inc.(a) | 2,880,810 | |||||||||
39,666 | HSN, Inc. | 2,085,638 | |||||||||
165,679 | Krispy Kreme Doughnuts, Inc.(a) | 2,263,175 | |||||||||
37,605 | Papa John's International, Inc.(a) | 2,369,115 | |||||||||
189,770 | Sonic Corp.(a) | 2,377,818 | |||||||||
71,997 | Starbucks Corp. | 4,380,298 | |||||||||
387,490 | Wendy's Co. (The) | 2,204,818 | |||||||||
27,641,397 | |||||||||||
Total Common Stocks (Cost $72,029,824) | 85,774,178 |
Number of Shares | Value | ||||||||||
Money Market Fund—0.1% | |||||||||||
114,461 | Goldman Sachs Financial Square Prime Obligations - Institutional Share Class (Cost $114,461) | $ | 114,461 | ||||||||
Total Investments (Cost $72,144,285)—100.1% | 85,888,639 | ||||||||||
Liabilities in excess of other assets—(0.1)% | (123,297 | ) | |||||||||
Net Assets—100.0% | $ | 85,765,342 |
Notes to Schedule of Investments:
(a) Non-income producing security.
See Notes to Financial Statements.
57
Schedule of Investments
PowerShares Dynamic Media Portfolio (PBS)
April 30, 2013
Number of Shares | Value | ||||||||||
Common Stocks—100.0% | |||||||||||
Advertising Agencies—2.6% | |||||||||||
64,463 | Omnicom Group, Inc.(a) | $ | 3,852,953 | ||||||||
Advertising Sales—2.6% | |||||||||||
84,358 | Lamar Advertising Co., Class A(b) | 3,949,642 | |||||||||
Broadcast Services/Program—8.0% | |||||||||||
95,907 | Discovery Communications, Inc., Class A(a)(b) | 7,559,390 | |||||||||
191,234 | Starz - Liberty Capital, Series A(b) | 4,471,051 | |||||||||
12,030,441 | |||||||||||
Cable/Satellite TV—15.1% | |||||||||||
43,362 | Charter Communications, Inc., Class A(b) | 4,368,288 | |||||||||
169,362 | Comcast Corp., Class A | 6,994,651 | |||||||||
105,060 | DISH Network Corp., Class A | 4,117,301 | |||||||||
78,254 | Time Warner Cable, Inc. | 7,347,268 | |||||||||
22,827,508 | |||||||||||
Commercial Services - Finance—2.7% | |||||||||||
23,948 | Alliance Data Systems Corp.(b) | 4,113,548 | |||||||||
Diversified Operations/Commercial Services—2.3% | |||||||||||
135,299 | Viad Corp. | 3,524,539 | |||||||||
E-Commerce/Services—2.9% | |||||||||||
20,507 | Netflix, Inc.(b) | 4,430,947 | |||||||||
E-Marketing/Information—2.8% | |||||||||||
133,968 | ValueClick, Inc.(a)(b) | 4,134,252 | |||||||||
Internet Content - Entertainment—3.1% | |||||||||||
112,200 | Shutterstock, Inc.(b) | 4,678,740 | |||||||||
Motion Pictures & Services—2.9% | |||||||||||
177,932 | Lions Gate Entertainment Corp. (Canada)(a)(b) | 4,414,493 | |||||||||
Multimedia—15.5% | |||||||||||
324,549 | E.W. Scripps Co. (The), Class A(b) | 4,507,986 | |||||||||
86,245 | Meredith Corp.(a) | 3,348,031 | |||||||||
127,549 | Time Warner, Inc. | 7,624,879 | |||||||||
124,595 | Walt Disney Co. (The) | 7,829,550 | |||||||||
23,310,446 | |||||||||||
Printing - Commercial—2.3% | |||||||||||
136,764 | Valassis Communications, Inc.(a) | 3,505,261 | |||||||||
Publishing - Newspapers—2.5% | |||||||||||
185,643 | Gannett Co., Inc. | 3,742,563 | |||||||||
Retail - Discount—2.4% | |||||||||||
68,739 | HSN, Inc. | 3,614,297 | |||||||||
Television—17.7% | |||||||||||
62,440 | AMC Networks, Inc., Class A(b) | 3,934,344 | |||||||||
423,777 | Belo Corp., Class A(a) | 4,542,889 | |||||||||
155,852 | CBS Corp., Class B | 7,134,905 |
Number of Shares | Value | ||||||||||
Common Stocks (Continued) | |||||||||||
336,700 | LIN TV Corp., Class A(b) | $ | 4,144,777 | ||||||||
259,456 | Sinclair Broadcast Group, Inc., Class A(a) | 6,953,421 | |||||||||
26,710,336 | |||||||||||
Web Portals/ISP—14.6% | |||||||||||
97,553 | AOL, Inc. | 3,769,448 | |||||||||
230,137 | Blucora, Inc.(a)(b) | 3,399,124 | |||||||||
8,443 | Google, Inc., Class A(b) | 6,961,845 | |||||||||
318,532 | Yahoo!, Inc.(b) | 7,877,296 | |||||||||
22,007,713 | |||||||||||
Total Common Stocks (Cost $128,979,789) | 150,847,679 | ||||||||||
Money Market Fund—0.1% | |||||||||||
123,160 | Goldman Sachs Financial Square Prime Obligations - Institutional Share Class (Cost $123,160) | 123,160 | |||||||||
Total Investments (excluding investments purchased with cash collateral from securities on loan) (Cost $129,102,949)—100.1% | 150,970,839 | ||||||||||
Investments Purchased with Cash Collateral from Securities on Loan | |||||||||||
Money Market Fund—11.3% | |||||||||||
17,021,368 | Invesco Liquid Assets Portfolio - Institutional Class (Cost $17,021,368)(c)(d) | 17,021,368 | |||||||||
Total Investments (Cost $146,124,317)—111.4% | 167,992,207 | ||||||||||
Liabilities in excess of other assets—(11.4)% | (17,203,807 | ) | |||||||||
Net Assets—100.0% | $ | 150,788,400 |
Notes to Schedule of Investments:
(a) All or a portion of this security was out on loan at April 30, 2013.
(b) Non-income producing security.
(c) The security has been segregated to satisfy the commitment to return the cash collateral received in securities lending transactions upon the borrower's return of the securities loaned. See Note 2H.
(d) The security and the Fund are advised by wholly owned subsidiaries of Invesco Ltd. and are therefore considered to be affiliated.
See Notes to Financial Statements.
58
Schedule of Investments
PowerShares Dynamic Networking Portfolio (PXQ)
April 30, 2013
Number of Shares | Value | ||||||||||
Common Stocks—100.0% | |||||||||||
Computers—5.6% | |||||||||||
155,094 | Brocade Communications Systems, Inc.(a) | $ | 902,647 | ||||||||
33,792 | NetScout Systems, Inc.(a) | 770,796 | |||||||||
1,673,443 | |||||||||||
Electrical Components & Equipment—5.8% | |||||||||||
17,686 | Belden, Inc. | 874,042 | |||||||||
31,819 | Molex, Inc. | 877,250 | |||||||||
1,751,292 | |||||||||||
Electronics—5.8% | |||||||||||
23,013 | Amphenol Corp., Class A | 1,737,942 | |||||||||
Internet—7.0% | |||||||||||
16,122 | F5 Networks, Inc.(a) | 1,232,204 | |||||||||
18,354 | Sourcefire, Inc.(a) | 876,587 | |||||||||
2,108,791 | |||||||||||
Semiconductors—10.6% | |||||||||||
134,447 | Emulex Corp.(a) | 806,682 | |||||||||
76,217 | QLogic Corp.(a) | 827,717 | |||||||||
25,089 | QUALCOMM, Inc. | 1,545,984 | |||||||||
3,180,383 | |||||||||||
Software—19.3% | |||||||||||
22,348 | Citrix Systems, Inc.(a) | 1,389,375 | |||||||||
39,306 | Infoblox, Inc.(a) | 869,056 | |||||||||
60,209 | Proofpoint, Inc.(a) | 1,103,029 | |||||||||
16,183 | SolarWinds, Inc.(a) | 822,906 | |||||||||
22,511 | VMware, Inc., Class A(a) | 1,587,025 | |||||||||
5,771,391 | |||||||||||
Telecommunications—45.9% | |||||||||||
51,880 | ARRIS Group, Inc.(a) | 856,539 | |||||||||
34,989 | Aruba Networks, Inc.(a) | 786,903 | |||||||||
56,913 | Ciena Corp.(a) | 851,419 | |||||||||
77,957 | Cisco Systems, Inc. | 1,630,860 | |||||||||
58,622 | Finisar Corp.(a) | 752,707 | |||||||||
156,459 | Harmonic, Inc.(a) | 888,687 | |||||||||
136,722 | Infinera Corp.(a) | 1,151,199 | |||||||||
75,957 | Juniper Networks, Inc.(a) | 1,257,088 | |||||||||
26,321 | Motorola Solutions, Inc. | 1,505,561 | |||||||||
26,371 | NETGEAR, Inc.(a) | 785,592 | |||||||||
15,511 | Palo Alto Networks, Inc.(a) | 839,145 | |||||||||
45,249 | Ruckus Wireless, Inc.(a) | 873,306 | |||||||||
344,454 | Sonus Networks, Inc.(a) | 723,353 | |||||||||
423,189 | Tellabs, Inc. | 876,001 | |||||||||
13,778,360 | |||||||||||
Total Common Stocks (Cost $30,136,520) | 30,001,602 |
Number of Shares | Value | ||||||||||
Money Market Fund—0.3% | |||||||||||
97,299 | Goldman Sachs Financial Square Prime Obligations - Institutional Share Class (Cost $97,299) | $ | 97,299 | ||||||||
Total Investments (Cost $30,233,819)—100.3% | 30,098,901 | ||||||||||
Liabilities in excess of other assets—(0.3)% | (99,285 | ) | |||||||||
Net Assets—100.0% | $ | 29,999,616 |
Notes to Schedule of Investments:
(a) Non-income producing security.
See Notes to Financial Statements.
59
Schedule of Investments
PowerShares Dynamic Oil & Gas Services Portfolio (PXJ)
April 30, 2013
Number of Shares | Value | ||||||||||
Common Stocks and Other Equity Interests—100.0% | |||||||||||
Engineering/R&D Services—2.3% | |||||||||||
255,901 | McDermott International, Inc.(a) | $ | 2,733,023 | ||||||||
Oil & Gas Drilling—16.8% | |||||||||||
63,229 | Atwood Oceanics, Inc.(a) | 3,101,383 | |||||||||
92,622 | Helmerich & Payne, Inc. | 5,429,502 | |||||||||
371,528 | Nabors Industries Ltd. (Bermuda) | 5,494,899 | |||||||||
624,774 | Parker Drilling Co.(a) | 2,574,069 | |||||||||
142,116 | Patterson-UTI Energy, Inc. | 2,997,226 | |||||||||
19,597,079 | |||||||||||
Oil Companies - Exploration & Production—2.6% | |||||||||||
72,437 | Unit Corp.(a) | 3,044,527 | |||||||||
Oil Field Machinery & Equipment—18.4% | |||||||||||
94,927 | Cameron International Corp.(a) | 5,842,757 | |||||||||
54,628 | Dresser-Rand Group, Inc.(a) | 3,037,863 | |||||||||
40,439 | Dril-Quip, Inc.(a) | 3,385,149 | |||||||||
121,960 | Forum Energy Technologies, Inc.(a) | 3,391,707 | |||||||||
89,149 | National Oilwell Varco, Inc. | 5,814,298 | |||||||||
21,471,774 | |||||||||||
Oil - Field Services—48.7% | |||||||||||
225,107 | Basic Energy Services, Inc.(a) | 3,090,719 | |||||||||
135,546 | C&J Energy Services, Inc.(a) | 2,682,455 | |||||||||
44,554 | Core Laboratories NV (Netherlands) | 6,450,528 | |||||||||
139,420 | Exterran Holdings, Inc.(a) | 3,683,476 | |||||||||
147,670 | Halliburton Co. | 6,315,846 | |||||||||
137,567 | Helix Energy Solutions Group, Inc.(a) | 3,169,544 | |||||||||
388,646 | Key Energy Services, Inc.(a) | 2,308,557 | |||||||||
379,739 | Newpark Resources, Inc.(a) | 3,987,259 | |||||||||
97,057 | Oceaneering International, Inc. | 6,810,490 | |||||||||
42,291 | Oil States International, Inc.(a) | 3,779,124 | |||||||||
382,810 | Pioneer Energy Services Corp.(a) | 2,698,811 | |||||||||
205,928 | RPC, Inc. | 2,726,487 | |||||||||
78,044 | Schlumberger Ltd. (Curacao) | 5,808,815 | |||||||||
126,388 | Superior Energy Services, Inc.(a) | 3,487,045 | |||||||||
56,999,156 | |||||||||||
Seismic Data Collection—5.0% | |||||||||||
32,553 | Geospace Technologies Corp.(a) | 2,746,496 | |||||||||
499,441 | ION Geophysical Corp.(a) | 3,116,512 | |||||||||
5,863,008 | |||||||||||
Transportation - Marine—3.2% | |||||||||||
120,852 | Teekay Offshore Partners LP (Marshall Islands) | 3,671,484 | |||||||||
Transportation - Services—3.0% | |||||||||||
56,197 | Bristow Group, Inc. | 3,551,650 | |||||||||
Total Common Stocks and Other Equity Interests | (Cost $118,370,656) | 116,931,701 |
Number of Shares | Value | ||||||||||
Money Market Fund—0.1% | |||||||||||
140,951 | Goldman Sachs Financial Square Prime Obligations - Institutional Share Class (Cost $140,951) | $ | 140,951 | ||||||||
Total Investments (Cost $118,511,607)—100.1% | 117,072,652 | ||||||||||
Liabilities in excess of other assets—(0.1)% | (99,944 | ) | |||||||||
Net Assets—100.0% | $ | 116,972,708 |
Notes to Schedule of Investments:
(a) Non-income producing security.
See Notes to Financial Statements.
60
Schedule of Investments
PowerShares Dynamic Pharmaceuticals Portfolio (PJP)
April 30, 2013
Number of Shares | Value | ||||||||||
Common Stocks—100.0% | |||||||||||
Consumer Products - Miscellaneous—2.9% | |||||||||||
495,697 | Prestige Brands Holdings, Inc.(a) | $ | 13,359,034 | ||||||||
Medical Products—5.4% | |||||||||||
175,486 | Baxter International, Inc. | 12,261,207 | |||||||||
395,496 | Hospira, Inc.(a) | 13,098,827 | |||||||||
25,360,034 | |||||||||||
Medical - Biomedical/Genetics—21.6% | |||||||||||
248,279 | Amgen, Inc. | 25,873,155 | |||||||||
71,528 | Biogen Idec, Inc.(a) | 15,659,625 | |||||||||
115,662 | Celgene Corp.(a) | 13,656,212 | |||||||||
507,807 | Gilead Sciences, Inc.(a) | 25,715,347 | |||||||||
372,685 | Medicines Co. (The)(a) | 12,581,846 | |||||||||
1,046,079 | Spectrum Pharmaceuticals, Inc. | 7,751,445 | |||||||||
101,237,630 | |||||||||||
Medical - Drugs—54.4% | |||||||||||
623,916 | Abbott Laboratories | 23,034,979 | |||||||||
920,744 | Akorn, Inc.(a) | 13,857,197 | |||||||||
108,945 | Allergan, Inc. | 12,370,705 | |||||||||
705,757 | Auxilium Pharmaceuticals, Inc.(a) | 10,536,952 | |||||||||
584,173 | Bristol-Myers Squibb Co. | 23,203,351 | |||||||||
397,198 | Eli Lilly & Co. | 21,996,825 | |||||||||
419,319 | Endo Health Solutions, Inc.(a) | 15,363,848 | |||||||||
320,649 | Forest Laboratories, Inc.(a) | 11,995,479 | |||||||||
322,394 | Hi-Tech Pharmacal Co., Inc.(a) | 10,658,346 | |||||||||
282,708 | Johnson & Johnson | 24,095,203 | |||||||||
501,661 | Merck & Co., Inc. | 23,578,067 | |||||||||
787,298 | Pfizer, Inc. | 22,886,753 | |||||||||
238,151 | Salix Pharmaceuticals Ltd.(a) | 12,452,916 | |||||||||
889,405 | Santarus, Inc.(a) | 16,338,370 | |||||||||
934,652 | VIVUS, Inc.(a) | 12,421,525 | |||||||||
254,790,516 | |||||||||||
Medical - Generic Drugs—10.6% | |||||||||||
140,914 | Actavis, Inc.(a) | 14,898,837 | |||||||||
602,047 | Impax Laboratories, Inc.(a) | 10,535,823 | |||||||||
405,720 | Mylan, Inc.(a) | 11,810,509 | |||||||||
103,776 | Perrigo Co. | 12,391,892 | |||||||||
49,637,061 | |||||||||||
Therapeutics—5.1% | |||||||||||
380,522 | Questcor Pharmaceuticals, Inc. | 11,697,246 | |||||||||
842,254 | Warner Chilcott PLC, Class A (Ireland) | 12,111,613 | |||||||||
23,808,859 | |||||||||||
Total Common Stocks (Cost $381,829,751) | 468,193,134 |
Number of Shares | Value | ||||||||||
Money Market Fund—0.0% | |||||||||||
249,380 | Goldman Sachs Financial Square Prime Obligations - Institutional Share Class (Cost $249,380) | $ | 249,380 | ||||||||
Total Investments (Cost $382,079,131)—100.0% | 468,442,514 | ||||||||||
Liabilities in excess of other assets—(0.0)% | (137,181 | ) | |||||||||
Net Assets—100.0% | $ | 468,305,333 |
Notes to Schedule of Investments:
(a) Non-income producing security.
See Notes to Financial Statements.
61
Schedule of Investments
PowerShares Dynamic Retail Portfolio (PMR)
April 30, 2013
Number of Shares | Value | ||||||||||
Common Stocks—99.9% | |||||||||||
Distribution/Wholesale—5.2% | |||||||||||
16,565 | Beacon Roofing Supply, Inc.(a) | $ | 631,623 | ||||||||
13,226 | Pool Corp. | 648,339 | |||||||||
1,279,962 | |||||||||||
E-Commerce/Services—2.8% | |||||||||||
103,098 | United Online, Inc. | 701,066 | |||||||||
Food - Retail—25.8% | |||||||||||
12,565 | Fresh Market, Inc. (The)(a) | 514,285 | |||||||||
14,269 | Harris Teeter Supermarkets, Inc. | 596,302 | |||||||||
31,035 | Ingles Markets, Inc., Class A | 661,666 | |||||||||
38,735 | Kroger Co. (The) | 1,331,709 | |||||||||
26,808 | Safeway, Inc. | 603,716 | |||||||||
157,994 | SUPERVALU, Inc. | 922,685 | |||||||||
14,650 | Weis Markets, Inc. | 612,810 | |||||||||
12,993 | Whole Foods Market, Inc. | 1,147,542 | |||||||||
6,390,715 | |||||||||||
Rental Auto/Equipment—3.0% | |||||||||||
25,731 | Avis Budget Group, Inc.(a) | 742,082 | |||||||||
Retail - Apparel/Shoe—10.3% | |||||||||||
36,402 | Brown Shoe Co., Inc. | 615,558 | |||||||||
25,648 | L Brands, Inc. | 1,292,916 | |||||||||
15,384 | Urban Outfitters, Inc.(a) | 637,513 | |||||||||
2,545,987 | |||||||||||
Retail - Automobile—2.5% | |||||||||||
19,950 | Penske Automotive Group, Inc. | 616,854 | |||||||||
Retail - Building Products—8.0% | |||||||||||
29,604 | Lowe's Cos., Inc. | 1,137,386 | |||||||||
10,368 | Lumber Liquidators Holdings, Inc.(a) | 849,761 | |||||||||
1,987,147 | |||||||||||
Retail - Discount—9.8% | |||||||||||
11,024 | Costco Wholesale Corp. | 1,195,332 | |||||||||
15,841 | Wal-Mart Stores, Inc. | 1,231,163 | |||||||||
2,426,495 | |||||||||||
Retail - Drug Store—14.4% | |||||||||||
21,717 | CVS Caremark Corp. | 1,263,495 | |||||||||
373,176 | Rite Aid Corp.(a) | 988,917 | |||||||||
26,673 | Walgreen Co. | 1,320,580 | |||||||||
3,572,992 | |||||||||||
Retail - Home Furnishings—2.6% | |||||||||||
27,240 | Pier 1 Imports, Inc. | 632,240 | |||||||||
Retail - Jewelry—2.8% | |||||||||||
10,148 | Signet Jewelers Ltd. (United Kingdom) | 697,472 | |||||||||
Retail - Miscellaneous/Diversified—2.9% | |||||||||||
8,191 | PriceSmart, Inc. | 730,883 |
Number of Shares | Value | ||||||||||
Common Stocks (Continued) | |||||||||||
Retail - Office Supplies—4.8% | |||||||||||
49,574 | OfficeMax, Inc. | $ | 570,597 | ||||||||
45,839 | Staples, Inc. | 606,908 | |||||||||
1,177,505 | |||||||||||
Retail - Regional Department Store—2.4% | |||||||||||
7,163 | Dillard's, Inc., Class A | 590,303 | |||||||||
Transportation - Equipment & Leasing—2.6% | |||||||||||
4,026 | AMERCO | 646,978 | |||||||||
Total Common Stocks (Cost $21,241,215) | 24,738,681 | ||||||||||
Money Market Fund—0.4% | |||||||||||
89,758 | Goldman Sachs Financial Square Prime Obligations - Institutional Share Class (Cost $89,758) | 89,758 | |||||||||
Total Investments (Cost $21,330,973)—100.3% | 24,828,439 | ||||||||||
Liabilities in excess of other assets—(0.3)% | (78,119 | ) | |||||||||
Net Assets—100.0% | $ | 24,750,320 |
Notes to Schedule of Investments:
(a) Non-income producing security.
See Notes to Financial Statements.
62
Schedule of Investments
PowerShares Dynamic Semiconductors Portfolio (PSI)
April 30, 2013
Number of Shares | Value | ||||||||||
Common Stocks—100.0% | |||||||||||
Computers - Memory Devices—3.1% | |||||||||||
40,162 | Spansion, Inc., Class A(a) | $ | 521,704 | ||||||||
Electronic Components - Semiconductors—29.7% | |||||||||||
53,803 | Applied Micro Circuits Corp.(a) | 401,370 | |||||||||
10,160 | Cree, Inc.(a) | 574,751 | |||||||||
29,773 | Freescale Semiconductor Ltd. (Bermuda)(a) | 460,886 | |||||||||
12,331 | Microchip Technology, Inc. | 449,095 | |||||||||
103,928 | Micron Technology, Inc.(a) | 979,002 | |||||||||
69,410 | PMC - Sierra, Inc.(a) | 399,802 | |||||||||
24,386 | Texas Instruments, Inc. | 883,017 | |||||||||
21,957 | Xilinx, Inc. | 832,390 | |||||||||
4,980,313 | |||||||||||
Lasers - Systems/Components—2.9% | |||||||||||
4,573 | Cymer, Inc.(a) | 479,068 | |||||||||
Power Conversion/Supply Equipment—2.6% | |||||||||||
25,342 | Advanced Energy Industries, Inc.(a) | 430,307 | |||||||||
Semiconductor Components - Integrated Circuits—28.8% | |||||||||||
18,311 | Analog Devices, Inc. | 805,501 | |||||||||
17,906 | Cirrus Logic, Inc.(a) | 345,765 | |||||||||
39,534 | Exar Corp.(a) | 426,176 | |||||||||
6,896 | Hittite Microwave Corp.(a) | 386,935 | |||||||||
21,989 | Linear Technology Corp. | 802,598 | |||||||||
26,578 | Maxim Integrated Products, Inc. | 822,057 | |||||||||
10,677 | Power Integrations, Inc. | 442,135 | |||||||||
12,835 | QUALCOMM, Inc. | 790,893 | |||||||||
4,822,060 | |||||||||||
Semiconductor Equipment—26.9% | |||||||||||
61,422 | Applied Materials, Inc. | 891,233 | |||||||||
20,665 | ATMI, Inc.(a) | 449,464 | |||||||||
44,616 | Brooks Automation, Inc. | 433,668 | |||||||||
47,162 | Entegris, Inc.(a) | 447,096 | |||||||||
41,331 | Kulicke & Soffa Industries, Inc.(a) | 477,786 | |||||||||
28,116 | Magnachip Semiconductor Corp.(a) | 450,981 | |||||||||
16,366 | MKS Instruments, Inc. | 439,754 | |||||||||
11,256 | Ultratech, Inc.(a) | 331,714 | |||||||||
15,333 | Veeco Instruments, Inc.(a) | 583,727 | |||||||||
4,505,423 | |||||||||||
Wireless Equipment—6.0% | |||||||||||
10,230 | InterDigital, Inc. | 454,314 | |||||||||
98,834 | RF Micro Devices, Inc.(a) | 554,459 | |||||||||
1,008,773 | |||||||||||
Total Common Stocks (Cost $15,565,216) | 16,747,648 |
Number of Shares | Value | ||||||||||
Money Market Fund—0.4% | |||||||||||
65,162 | Goldman Sachs Financial Square Prime Obligations - Institutional Share Class (Cost $65,162) | $ | 65,162 | ||||||||
Total Investments (Cost $15,630,378)—100.4% | 16,812,810 | ||||||||||
Liabilities in excess of other assets—(0.4)% | (68,440 | ) | |||||||||
Net Assets—100.0% | $ | 16,744,370 |
Notes to Schedule of Investments:
(a) Non-income producing security.
See Notes to Financial Statements.
63
Schedule of Investments
PowerShares Dynamic Software Portfolio (PSJ)
April 30, 2013
Number of Shares | Value | ||||||||||
Common Stocks—100.0% | |||||||||||
Applications Software—9.9% | |||||||||||
55,651 | Infoblox, Inc.(a) | $ | 1,230,444 | ||||||||
36,744 | Intuit, Inc. | 2,191,412 | |||||||||
78,056 | PDF Solutions, Inc.(a) | 1,335,538 | |||||||||
4,757,394 | |||||||||||
Communications Software—2.4% | |||||||||||
22,911 | SolarWinds, Inc.(a) | 1,165,024 | |||||||||
Computer Aided Design—7.7% | |||||||||||
30,202 | ANSYS, Inc.(a) | 2,442,134 | |||||||||
40,932 | Aspen Technology, Inc.(a) | 1,247,607 | |||||||||
3,689,741 | |||||||||||
Computer Services—5.3% | |||||||||||
18,616 | DST Systems, Inc. | 1,287,297 | |||||||||
18,334 | Manhattan Associates, Inc.(a) | 1,287,230 | |||||||||
2,574,527 | |||||||||||
Computer Software—2.6% | |||||||||||
127,872 | Accelrys, Inc.(a) | 1,259,539 | |||||||||
Computers - Integrated Systems—5.0% | |||||||||||
28,813 | Jack Henry & Associates, Inc. | 1,336,923 | |||||||||
47,843 | NetScout Systems, Inc.(a) | 1,091,299 | |||||||||
2,428,222 | |||||||||||
Data Processing/Management—5.3% | |||||||||||
16,670 | CommVault Systems, Inc.(a) | 1,225,912 | |||||||||
62,569 | CSG Systems International, Inc.(a) | 1,352,116 | |||||||||
2,578,028 | |||||||||||
Electric - Distribution—2.7% | |||||||||||
75,165 | EnerNOC, Inc.(a) | 1,316,891 | |||||||||
Electronic Design Automation—5.1% | |||||||||||
87,623 | Cadence Design Systems, Inc.(a) | 1,209,197 | |||||||||
35,807 | Synopsys, Inc.(a) | 1,273,655 | |||||||||
2,482,852 | |||||||||||
Electronic Forms—5.6% | |||||||||||
59,840 | Adobe Systems, Inc.(a) | 2,697,587 | |||||||||
Enterprise Software/Services—17.8% | |||||||||||
93,926 | CA, Inc. | 2,533,184 | |||||||||
66,383 | Oracle Corp. | 2,176,035 | |||||||||
47,571 | PROS Holdings, Inc.(a) | 1,233,040 | |||||||||
22,341 | Tyler Technologies, Inc.(a) | 1,412,845 | |||||||||
12,996 | Ultimate Software Group, Inc. (The)(a) | 1,255,284 | |||||||||
8,610,388 | |||||||||||
Finance - Mortgage Loan/Banker—3.5% | |||||||||||
64,427 | Ellie Mae, Inc.(a) | 1,676,391 | |||||||||
Internet Security—5.1% | |||||||||||
100,602 | Symantec Corp.(a) | 2,444,629 |
Number of Shares | Value | ||||||||||
Common Stocks (Continued) | |||||||||||
Medical Information Systems—11.7% | |||||||||||
103,903 | Allscripts Healthcare Solutions, Inc.(a) | $ | 1,438,018 | ||||||||
26,346 | Cerner Corp.(a) | 2,549,502 | |||||||||
25,010 | Medidata Solutions, Inc.(a) | 1,659,664 | |||||||||
5,647,184 | |||||||||||
Telecommunication Services—7.6% | |||||||||||
64,310 | Amdocs Ltd. (Guernsey) | 2,295,867 | |||||||||
120,523 | Premiere Global Services, Inc.(a) | 1,353,473 | |||||||||
3,649,340 | |||||||||||
Transactional Software—2.7% | |||||||||||
22,306 | Solera Holdings, Inc. | 1,284,379 | |||||||||
Total Common Stocks (Cost $40,634,320) | 48,262,116 | ||||||||||
Money Market Fund—0.2% | |||||||||||
98,229 | Goldman Sachs Financial Square Prime Obligations - Institutional Share Class (Cost $98,229) | 98,229 | |||||||||
Total Investments (Cost $40,732,549)—100.2% | 48,360,345 | ||||||||||
Liabilities in excess of other assets—(0.2)% | (103,138 | ) | |||||||||
Net Assets—100.0% | $ | 48,257,207 |
Notes to Schedule of Investments:
(a) Non-income producing security.
See Notes to Financial Statements.
64
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Statements of Assets and Liabilities
April 30, 2013
PowerShares Dynamic Biotechnology & Genome Portfolio (PBE) | PowerShares Dynamic Building & Construction Portfolio (PKB) | PowerShares Dynamic Energy Exploration & Production Portfolio (PXE) | PowerShares Dynamic Food & Beverage Portfolio (PBJ) | PowerShares Dynamic Leisure and Entertainment Portfolio (PEJ) | PowerShares Dynamic Media Portfolio (PBS) | ||||||||||||||||||||||
ASSETS: | |||||||||||||||||||||||||||
Unaffiliated investments, at value(a) | $ | 155,655,581 | $ | 104,214,883 | $ | 104,575,815 | $ | 236,247,378 | $ | 85,888,639 | $ | 150,970,839 | |||||||||||||||
Affiliated investments, at value | — | — | — | — | — | 17,021,368 | |||||||||||||||||||||
Total investments, at value | 155,655,581 | 104,214,883 | 104,575,815 | 236,247,378 | 85,888,639 | 167,992,207 | |||||||||||||||||||||
Receivables: | |||||||||||||||||||||||||||
Shares sold | 1,413,212 | — | — | — | — | — | |||||||||||||||||||||
Investments sold | — | — | 1,501,360 | — | — | — | |||||||||||||||||||||
Dividends | 11 | 39,290 | 10,309 | 198,429 | 5 | 7 | |||||||||||||||||||||
Security lending | — | — | — | — | — | 3,589 | |||||||||||||||||||||
Expense waivers | — | — | — | — | — | — | |||||||||||||||||||||
Total Assets | 157,068,804 | 104,254,173 | 106,087,484 | 236,445,807 | 85,888,644 | 167,995,803 | |||||||||||||||||||||
LIABILITIES: | |||||||||||||||||||||||||||
Payables: | |||||||||||||||||||||||||||
Shares repurchased | — | — | 1,501,226 | — | — | — | |||||||||||||||||||||
Expenses recaptured | 9,610 | 512 | 1,580 | 9,645 | 598 | 6,311 | |||||||||||||||||||||
Investments purchased | 1,413,324 | — | — | — | — | — | |||||||||||||||||||||
Collateral upon return of securities loaned | — | — | — | — | — | 17,021,368 | |||||||||||||||||||||
Accrued advisory fees | 60,839 | 42,794 | 44,301 | 89,317 | 33,930 | 61,460 | |||||||||||||||||||||
Accrued trustees fees | 14,841 | 8,834 | 10,814 | 11,201 | 8,661 | 9,893 | |||||||||||||||||||||
Accrued expenses | 116,807 | 81,208 | 102,586 | 109,322 | 80,113 | 108,371 | |||||||||||||||||||||
Total Liabilities | 1,615,421 | 133,348 | 1,660,507 | 219,485 | 123,302 | 17,207,403 | |||||||||||||||||||||
NET ASSETS | $ | 155,453,383 | $ | 104,120,825 | $ | 104,426,977 | $ | 236,226,322 | $ | 85,765,342 | $ | 150,788,400 | |||||||||||||||
NET ASSETS CONSIST OF: | |||||||||||||||||||||||||||
Shares of beneficial interest | $ | 281,432,624 | $ | 110,195,676 | $ | 139,367,965 | $ | 263,046,789 | $ | 92,406,852 | $ | 173,501,840 | |||||||||||||||
Undistributed net investment income (loss) | (143,843 | ) | (72,549 | ) | 264,270 | 211,330 | (7,801 | ) | 59,351 | ||||||||||||||||||
Undistributed net realized gain (loss) | (165,272,445 | ) | (18,648,302 | ) | (46,374,058 | ) | (46,351,728 | ) | (20,378,063 | ) | (44,640,681 | ) | |||||||||||||||
Net unrealized appreciation (depreciation) | 39,437,047 | 12,646,000 | 11,168,800 | 19,319,931 | 13,744,354 | 21,867,890 | |||||||||||||||||||||
Net Assets | $ | 155,453,383 | $ | 104,120,825 | $ | 104,426,977 | $ | 236,226,322 | $ | 85,765,342 | $ | 150,788,400 | |||||||||||||||
Shares outstanding (unlimited amount authorized, $0.01 par value) | 5,500,000 | 5,300,000 | 3,450,000 | 10,000,000 | 3,150,000 | 7,500,000 | |||||||||||||||||||||
Net asset value | $ | 28.26 | $ | 19.65 | $ | 30.27 | $ | 23.62 | $ | 27.23 | $ | 20.11 | |||||||||||||||
Market price | $ | 28.27 | $ | 19.63 | $ | 30.23 | $ | 23.61 | $ | 27.21 | $ | 20.10 | |||||||||||||||
Unaffiliated investments, at cost | $ | 116,218,534 | $ | 91,568,883 | $ | 93,407,015 | $ | 216,927,447 | $ | 72,144,285 | $ | 129,102,949 | |||||||||||||||
Affiliated investments, at cost | $ | — | $ | — | $ | — | $ | — | $ | — | $ | 17,021,368 | |||||||||||||||
Total investments, at cost | $ | 116,218,534 | $ | 91,568,883 | $ | 93,407,015 | $ | 216,927,447 | $ | 72,144,285 | $ | 146,124,317 | |||||||||||||||
(a)Includes securities on loan with an aggregate value of | $ | — | $ | — | $ | — | $ | — | $ | — | $ | 16,642,915 |
See Notes to Financial Statements.
66
PowerShares Dynamic Networking Portfolio (PXQ) | PowerShares Dynamic Oil & Gas Services Portfolio (PXJ) | PowerShares Dynamic Pharmaceuticals Portfolio (PJP) | PowerShares Dynamic Retail Portfolio (PMR) | PowerShares Dynamic Semiconductors Portfolio (PSI) | PowerShares Dynamic Software Portfolio (PSJ) | ||||||||||||||||||||||
ASSETS: | |||||||||||||||||||||||||||
Unaffiliated investments, at value(a) | $ | 30,098,901 | $ | 117,072,652 | $ | 468,442,514 | $ | 24,828,439 | $ | 16,812,810 | $ | 48,360,345 | |||||||||||||||
Affiliated investments, at value | — | — | — | — | — | — | |||||||||||||||||||||
Total investments, at value | 30,098,901 | 117,072,652 | 468,442,514 | 24,828,439 | 16,812,810 | 48,360,345 | |||||||||||||||||||||
Receivables: | |||||||||||||||||||||||||||
Shares sold | — | 2,219,772 | — | — | — | — | |||||||||||||||||||||
Investments sold | — | 8,968,899 | — | — | — | — | |||||||||||||||||||||
Dividends | 16 | 12,828 | 287,511 | 11,348 | 6,832 | 4 | |||||||||||||||||||||
Security lending | — | — | — | — | — | — | |||||||||||||||||||||
Expense waivers | 1,474 | 2,101 | — | 4,970 | 3,050 | 1,275 | |||||||||||||||||||||
Total Assets | 30,100,391 | 128,276,252 | 468,730,025 | 24,844,757 | 16,822,692 | 48,361,624 | |||||||||||||||||||||
LIABILITIES: | |||||||||||||||||||||||||||
Payables: | |||||||||||||||||||||||||||
Shares repurchased | — | 8,903,461 | — | — | — | — | |||||||||||||||||||||
Expenses recaptured | — | — | 7,634 | — | — | — | |||||||||||||||||||||
Investments purchased | — | 2,220,034 | — | — | — | — | |||||||||||||||||||||
Collateral upon return of securities loaned | — | — | — | — | — | — | |||||||||||||||||||||
Accrued advisory fees | 13,416 | 50,883 | 188,446 | 9,843 | 6,791 | 19,273 | |||||||||||||||||||||
Accrued trustees fees | 9,154 | 16,623 | 13,320 | 8,359 | 8,975 | 9,210 | |||||||||||||||||||||
Accrued expenses | 78,205 | 112,543 | 215,292 | 76,235 | 62,556 | 75,934 | |||||||||||||||||||||
Total Liabilities | 100,775 | 11,303,544 | 424,692 | 94,437 | 78,322 | 104,417 | |||||||||||||||||||||
NET ASSETS | $ | 29,999,616 | $ | 116,972,708 | $ | 468,305,333 | $ | 24,750,320 | $ | 16,744,370 | $ | 48,257,207 | |||||||||||||||
NET ASSETS CONSIST OF: | |||||||||||||||||||||||||||
Shares of beneficial interest | $ | 63,488,922 | $ | 318,527,853 | $ | 410,543,719 | $ | 39,065,790 | $ | 69,720,923 | $ | 65,790,527 | |||||||||||||||
Undistributed net investment income (loss) | 222,354 | 71,156 | 535,069 | 37,901 | 44,467 | (8,388 | ) | ||||||||||||||||||||
Undistributed net realized gain (loss) | (33,576,742 | ) | (200,187,346 | ) | (29,136,838 | ) | (17,850,837 | ) | (54,203,452 | ) | (25,152,728 | ) | |||||||||||||||
Net unrealized appreciation (depreciation) | (134,918 | ) | (1,438,955 | ) | 86,363,383 | 3,497,466 | 1,182,432 | 7,627,796 | |||||||||||||||||||
Net Assets | $ | 29,999,616 | $ | 116,972,708 | $ | 468,305,333 | $ | 24,750,320 | $ | 16,744,370 | $ | 48,257,207 | |||||||||||||||
Shares outstanding (unlimited amount authorized, $0.01 par value) | 1,200,000 | 5,200,000 | 11,500,000 | 850,000 | 1,100,000 | 1,600,000 | |||||||||||||||||||||
Net asset value | $ | 25.00 | $ | 22.49 | $ | 40.72 | $ | 29.12 | $ | 15.22 | $ | 30.16 | |||||||||||||||
Market price | $ | 24.97 | $ | 22.49 | $ | 40.72 | $ | 29.11 | $ | 15.19 | $ | 30.12 | |||||||||||||||
Unaffiliated investments, at cost | $ | 30,233,819 | $ | 118,511,607 | $ | 382,079,131 | $ | 21,330,973 | $ | 15,630,378 | $ | 40,732,549 | |||||||||||||||
Affiliated investments, at cost | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | |||||||||||||||
Total investments, at cost | $ | 30,233,819 | $ | 118,511,607 | $ | 382,079,131 | $ | 21,330,973 | $ | 15,630,378 | $ | 40,732,549 | |||||||||||||||
(a)Includes securities on loan with an aggregate value of | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — |
67
Statements of Operations
Year Ended April 30, 2013
PowerShares Dynamic Biotechnology & Genome Portfolio (PBE) | PowerShares Dynamic Building & Construction Portfolio (PKB) | PowerShares Dynamic Energy Exploration & Production Portfolio (PXE) | PowerShares Dynamic Food & Beverage Portfolio (PBJ) | PowerShares Dynamic Leisure and Entertainment Portfolio (PEJ) | PowerShares Dynamic Media Portfolio (PBS) | ||||||||||||||||||||||
INVESTMENT INCOME: | |||||||||||||||||||||||||||
Unaffiliated dividend income | $ | 587,816 | $ | 592,079 | $ | 1,962,934 | $ | 2,529,483 | $ | 712,322 | $ | 1,620,431 | |||||||||||||||
Securities lending income | — | — | — | — | — | 40,921 | |||||||||||||||||||||
Foreign withholding tax | — | — | — | — | — | — | |||||||||||||||||||||
Total Income | 587,816 | 592,079 | 1,962,934 | 2,529,483 | 712,322 | 1,661,352 | |||||||||||||||||||||
EXPENSES: | |||||||||||||||||||||||||||
Advisory fees | 677,140 | 277,853 | 375,171 | 663,173 | 310,067 | 619,290 | |||||||||||||||||||||
Accounting & administration fees | 57,844 | 57,844 | 57,844 | 57,844 | 57,844 | 57,844 | |||||||||||||||||||||
Sub-licensing | 40,625 | 16,671 | 22,510 | 39,790 | 18,604 | 37,158 | |||||||||||||||||||||
Recapture (Note 3) | 37,721 | — | — | 2,504 | — | — | |||||||||||||||||||||
Professional fees | 18,567 | 21,489 | 23,832 | 28,608 | 22,495 | 24,922 | |||||||||||||||||||||
Trustees fees | 8,596 | 6,316 | 6,544 | 9,404 | 6,658 | 7,833 | |||||||||||||||||||||
Custodian & transfer agent fees | 1,024 | — | 3,459 | — | 1,778 | 5,334 | |||||||||||||||||||||
Other expenses | 11,668 | 4,926 | 27,724 | 34,274 | 13,014 | 30,366 | |||||||||||||||||||||
Total Expenses | 853,185 | 385,099 | 517,084 | 835,597 | 430,460 | 782,747 | |||||||||||||||||||||
Waivers | — | (35,007 | ) | (31,709 | ) | — | (39,775 | ) | (2,439 | ) | |||||||||||||||||
Net Expenses | 853,185 | 350,092 | 485,375 | 835,597 | 390,685 | 780,308 | |||||||||||||||||||||
Net Investment Income (Loss) | (265,369 | ) | 241,987 | 1,477,559 | 1,693,886 | 321,637 | 881,044 | ||||||||||||||||||||
REALIZED AND UNREALIZED GAIN (LOSS): | |||||||||||||||||||||||||||
Net realized gain (loss) from: | |||||||||||||||||||||||||||
Investment securities | (9,936,056 | ) | (329,238 | ) | (7,920,405 | ) | (7,890,409 | ) | (1,639,355 | ) | (7,951,424 | ) | |||||||||||||||
In-kind redemptions | 22,063,208 | 9,233,209 | 10,371,896 | 17,770,060 | 9,240,848 | 30,066,331 | |||||||||||||||||||||
Net realized gain (loss) | 12,127,152 | 8,903,971 | 2,451,491 | 9,879,651 | 7,601,493 | 22,114,907 | |||||||||||||||||||||
Net change in unrealized appreciation (depreciation) on investment securities | 21,227,732 | 8,901,943 | 11,077,590 | 12,783,411 | 5,981,019 | 11,226,828 | |||||||||||||||||||||
Net realized and unrealized gain (loss) | 33,354,884 | 17,805,914 | 13,529,081 | 22,663,062 | 13,582,512 | 33,341,735 | |||||||||||||||||||||
Net increase (decrease) in net assets resulting from operations | $ | 33,089,515 | $ | 18,047,901 | $ | 15,006,640 | $ | 24,356,948 | $ | 13,904,149 | $ | 34,222,779 |
See Notes to Financial Statements.
68
PowerShares Dynamic Networking Portfolio (PXQ) | PowerShares Dynamic Oil & Gas Services Portfolio (PXJ) | PowerShares Dynamic Pharmaceuticals Portfolio (PJP) | PowerShares Dynamic Retail Portfolio (PMR) | PowerShares Dynamic Semiconductors Portfolio (PSI) | PowerShares Dynamic Software Portfolio (PSJ) | ||||||||||||||||||||||
INVESTMENT INCOME: | |||||||||||||||||||||||||||
Unaffiliated dividend income | $ | 688,399 | $ | 1,020,675 | $ | 7,070,176 | $ | 1,582,269 | $ | 246,774 | $ | 288,407 | |||||||||||||||
Securities lending income | — | — | — | — | — | — | |||||||||||||||||||||
Foreign withholding tax | — | (7,890 | ) | — | — | — | — | ||||||||||||||||||||
Total Income | 688,399 | 1,012,785 | 7,070,176 | 1,582,269 | 246,774 | 288,407 | |||||||||||||||||||||
EXPENSES: | |||||||||||||||||||||||||||
Advisory fees | 238,234 | 635,119 | 1,642,043 | 245,451 | 88,062 | 238,692 | |||||||||||||||||||||
Accounting & administration fees | 57,844 | 57,399 | 75,348 | 57,844 | 57,844 | 57,844 | |||||||||||||||||||||
Sub-licensing | 14,294 | 38,107 | 98,522 | 14,728 | 5,282 | 14,322 | |||||||||||||||||||||
Recapture (Note 3) | — | — | 121,217 | — | — | — | |||||||||||||||||||||
Professional fees | 25,043 | 23,095 | 35,999 | 25,829 | 22,092 | 21,573 | |||||||||||||||||||||
Trustees fees | 6,138 | 7,465 | 12,948 | 6,756 | 5,557 | 6,275 | |||||||||||||||||||||
Custodian & transfer agent fees | — | 2,832 | 13,967 | 5,247 | 1,617 | 3,201 | |||||||||||||||||||||
Other expenses | 13,958 | 20,652 | 68,931 | 9,534 | 3,774 | 10,544 | |||||||||||||||||||||
Total Expenses | 355,511 | 784,669 | 2,068,975 | 365,389 | 184,228 | 352,451 | |||||||||||||||||||||
Waivers | (52,287 | ) | — | — | (55,726 | ) | (73,270 | ) | (51,699 | ) | |||||||||||||||||
Net Expenses | 303,224 | 784,669 | 2,068,975 | 309,663 | 110,958 | 300,752 | |||||||||||||||||||||
Net Investment Income (Loss) | 385,175 | 228,116 | 5,001,201 | 1,272,606 | 135,816 | (12,345 | ) | ||||||||||||||||||||
REALIZED AND UNREALIZED GAIN (LOSS): | |||||||||||||||||||||||||||
Net realized gain (loss) from: | |||||||||||||||||||||||||||
Investment securities | (11,276,564 | ) | (19,093,879 | ) | (124,410 | ) | (4,970,729 | ) | (2,773,118 | ) | (3,256,805 | ) | |||||||||||||||
In-kind redemptions | 4,249,413 | 13,008,093 | 24,885,572 | 8,463,589 | 2,030,639 | 5,749,559 | |||||||||||||||||||||
Net realized gain (loss) | (7,027,151 | ) | (6,085,786 | ) | 24,761,162 | 3,492,860 | (742,479 | ) | 2,492,754 | ||||||||||||||||||
Net change in unrealized appreciation (depreciation) on investment securities | (2,041,654 | ) | 14,972,383 | 57,938,799 | (2,243,383 | ) | (64,085 | ) | 2,706,450 | ||||||||||||||||||
Net realized and unrealized gain (loss) | (9,068,805 | ) | 8,886,597 | 82,699,961 | 1,249,477 | (806,564 | ) | 5,199,204 | |||||||||||||||||||
Net increase (decrease) in net assets resulting from operations | $ | (8,683,630 | ) | $ | 9,114,713 | $ | 87,701,162 | $ | 2,522,083 | $ | (670,748 | ) | $ | 5,186,859 |
69
Statements of Changes in Net Assets
PowerShares Dynamic Biotechnology & Genome Portfolio (PBE) | PowerShares Dynamic Building & Construction Portfolio (PKB) | PowerShares Dynamic Energy Exploration & Production Portfolio (PXE) | |||||||||||||||||||||||||
Year Ended April 30, 2013 | Year Ended April 30, 2012 | Year Ended April 30, 2013 | Year Ended April 30, 2012 | Year Ended April 30, 2013 | Year Ended April 30, 2012 | ||||||||||||||||||||||
OPERATIONS: | |||||||||||||||||||||||||||
Net investment income (loss) | $ | (265,369 | ) | $ | (342,468 | ) | $ | 241,987 | $ | 35,289 | $ | 1,477,559 | $ | 627,416 | |||||||||||||
Net realized gain (loss) | 12,127,152 | 7,311,922 | 8,903,971 | 1,884,261 | 2,451,491 | 10,819,779 | |||||||||||||||||||||
Net change in unrealized appreciation (depreciation) | 21,227,732 | (24,826,945 | ) | 8,901,943 | (2,989,304 | ) | 11,077,590 | (23,953,564 | ) | ||||||||||||||||||
Net increase (decrease) in net assets resulting from operations | 33,089,515 | (17,857,491 | ) | 18,047,901 | (1,069,754 | ) | 15,006,640 | (12,506,369 | ) | ||||||||||||||||||
DISTRIBUTIONS TO SHAREHOLDERS FROM: | |||||||||||||||||||||||||||
Net investment income | — | — | (322,061 | ) | (32,808 | ) | (1,748,096 | ) | (1,050,119 | ) | |||||||||||||||||
SHAREHOLDER TRANSACTIONS: | |||||||||||||||||||||||||||
Proceeds from shares sold | 79,409,291 | 69,294,542 | 117,839,052 | 29,766,601 | 85,567,201 | 59,036,092 | |||||||||||||||||||||
Value of shares repurchased | (93,948,251 | ) | (132,087,390 | ) | (62,044,425 | ) | (38,267,870 | ) | (61,990,794 | ) | (96,863,044 | ) | |||||||||||||||
Net increase (decrease) in net assets resulting from shares transactions | (14,538,960 | ) | (62,792,848 | ) | 55,794,627 | (8,501,269 | ) | 23,576,407 | (37,826,952 | ) | |||||||||||||||||
Increase (Decrease) in Net Assets | 18,550,555 | (80,650,339 | ) | 73,520,467 | (9,603,831 | ) | 36,834,951 | (51,383,440 | ) | ||||||||||||||||||
NET ASSETS: | |||||||||||||||||||||||||||
Beginning of year | 136,902,828 | 217,553,167 | 30,600,358 | 40,204,189 | 67,592,026 | 118,975,466 | |||||||||||||||||||||
End of year | $ | 155,453,383 | $ | 136,902,828 | $ | 104,120,825 | $ | 30,600,358 | $ | 104,426,977 | $ | 67,592,026 | |||||||||||||||
Undistributed net investment income (loss) at end of year | $ | (143,843 | ) | $ | (141,891 | ) | $ | (72,549 | ) | $ | (2,284 | ) | $ | 264,270 | $ | 37,865 | |||||||||||
CHANGES IN SHARES OUTSTANDING: | |||||||||||||||||||||||||||
Shares sold | 3,450,000 | 3,200,000 | 6,850,000 | 2,300,000 | 3,000,000 | 2,450,000 | |||||||||||||||||||||
Shares repurchased | (4,100,000 | ) | (6,450,000 | ) | (3,700,000 | ) | (3,000,000 | ) | (2,300,000 | ) | (4,000,000 | ) | |||||||||||||||
Shares outstanding, beginning of year | 6,150,000 | 9,400,000 | 2,150,000 | 2,850,000 | 2,750,000 | 4,300,000 | |||||||||||||||||||||
Shares outstanding, end of year | 5,500,000 | 6,150,000 | 5,300,000 | 2,150,000 | 3,450,000 | 2,750,000 |
See Notes to Financial Statements.
70
PowerShares Dynamic Food & Beverage Portfolio (PBJ) | PowerShares Dynamic Leisure and Entertainment Portfolio (PEJ) | PowerShares Dynamic Media Portfolio (PBS) | |||||||||||||||||||||||||
Year Ended April 30, 2013 | Year Ended April 30, 2012 | Year Ended April 30, 2013 | Year Ended April 30, 2012 | Year Ended April 30, 2013 | Year Ended April 30, 2012 | ||||||||||||||||||||||
OPERATIONS: | |||||||||||||||||||||||||||
Net investment income (loss) | $ | 1,693,886 | $ | 2,342,865 | $ | 321,637 | $ | 399,365 | $ | 881,044 | $ | 796,986 | |||||||||||||||
Net realized gain (loss) | 9,879,651 | (9,088,202 | ) | 7,601,493 | 331,116 | 22,114,907 | (2,214,168 | ) | |||||||||||||||||||
Net change in unrealized appreciation (depreciation) | 12,783,411 | (3,120,021 | ) | 5,981,019 | 1,597,276 | 11,226,828 | (8,907,435 | ) | |||||||||||||||||||
Net increase (decrease) in net assets resulting from operations | 24,356,948 | (9,865,358 | ) | 13,904,149 | 2,327,757 | 34,222,779 | (10,324,617 | ) | |||||||||||||||||||
DISTRIBUTIONS TO SHAREHOLDERS FROM: | |||||||||||||||||||||||||||
Net investment income | (1,927,726 | ) | (2,109,710 | ) | (444,843 | ) | (312,008 | ) | (917,905 | ) | (855,476 | ) | |||||||||||||||
SHAREHOLDER TRANSACTIONS: | |||||||||||||||||||||||||||
Proceeds from shares sold | 213,982,354 | 464,466,696 | 98,219,830 | 72,272,447 | 167,843,900 | 112,819,604 | |||||||||||||||||||||
Value of shares repurchased | (169,224,165 | ) | (375,333,878 | ) | (83,592,336 | ) | (77,542,805 | ) | (188,335,046 | ) | (120,546,328 | ) | |||||||||||||||
Net increase (decrease) in net assets resulting from shares transactions | 44,758,189 | 89,132,818 | 14,627,494 | (5,270,358 | ) | (20,491,146 | ) | (7,726,724 | ) | ||||||||||||||||||
Increase (Decrease) in Net Assets | 67,187,411 | 77,157,750 | 28,086,800 | (3,254,609 | ) | 12,813,728 | (18,906,817 | ) | |||||||||||||||||||
NET ASSETS: | |||||||||||||||||||||||||||
Beginning of year | 169,038,911 | 91,881,161 | 57,678,542 | 60,933,151 | 137,974,672 | 156,881,489 | |||||||||||||||||||||
End of year | $ | 236,226,322 | $ | 169,038,911 | $ | 85,765,342 | $ | 57,678,542 | $ | 150,788,400 | $ | 137,974,672 | |||||||||||||||
Undistributed net investment income (loss) at end of year | $ | 211,330 | $ | 445,170 | $ | (7,801 | ) | $ | 152,569 | $ | 59,351 | $ | 96,212 | ||||||||||||||
CHANGES IN SHARES OUTSTANDING: | |||||||||||||||||||||||||||
Shares sold | 9,800,000 | 23,600,000 | 4,300,000 | 3,650,000 | 9,950,000 | 7,900,000 | |||||||||||||||||||||
Shares repurchased | (8,350,000 | ) | (19,700,000 | ) | (3,750,000 | ) | (4,200,000 | ) | (11,750,000 | ) | (8,650,000 | ) | |||||||||||||||
Shares outstanding, beginning of year | 8,550,000 | 4,650,000 | 2,600,000 | 3,150,000 | 9,300,000 | 10,050,000 | |||||||||||||||||||||
Shares outstanding, end of year | 10,000,000 | 8,550,000 | 3,150,000 | 2,600,000 | 7,500,000 | 9,300,000 |
71
Statements of Changes in Net Assets (Continued)
PowerShares Dynamic Networking Portfolio (PXQ) | PowerShares Dynamic Oil & Gas Services Portfolio (PXJ) | PowerShares Dynamic Pharmaceuticals Portfolio (PJP) | |||||||||||||||||||||||||
Year Ended April 30, 2013 | Year Ended April 30, 2012 | Year Ended April 30, 2013 | Year Ended April 30, 2012 | Year Ended April 30, 2013 | Year Ended April 30, 2012 | ||||||||||||||||||||||
OPERATIONS: | |||||||||||||||||||||||||||
Net investment income (loss) | $ | 385,175 | $ | (248,164 | ) | $ | 228,116 | $ | (55,412 | ) | $ | 5,001,201 | $ | 1,421,705 | |||||||||||||
Net realized gain (loss) | (7,027,151 | ) | (2,942,344 | ) | (6,085,786 | ) | 23,744,693 | 24,761,162 | 15,225,649 | ||||||||||||||||||
Net change in unrealized appreciation (depreciation) | (2,041,654 | ) | (16,251,583 | ) | 14,972,383 | (87,288,071 | ) | 57,938,799 | 18,639,753 | ||||||||||||||||||
Net increase (decrease) in net assets resulting from operations | (8,683,630 | ) | (19,442,091 | ) | 9,114,713 | (63,598,790 | ) | 87,701,162 | 35,287,107 | ||||||||||||||||||
DISTRIBUTIONS TO SHAREHOLDERS FROM: | |||||||||||||||||||||||||||
Net investment income | (93,171 | ) | — | (143,856 | ) | (18,614 | ) | (4,861,110 | ) | (1,193,747 | ) | ||||||||||||||||
SHAREHOLDER TRANSACTIONS: | |||||||||||||||||||||||||||
Proceeds from shares sold | 11,278,766 | 31,046,696 | 149,307,907 | 172,404,147 | 215,166,666 | 296,418,279 | |||||||||||||||||||||
Value of shares repurchased | (54,241,007 | ) | (102,157,431 | ) | (188,790,791 | ) | (271,274,105 | ) | (100,086,731 | ) | (147,732,745 | ) | |||||||||||||||
Net increase (decrease) in net assets resulting from shares transactions | (42,962,241 | ) | (71,110,735 | ) | (39,482,884 | ) | (98,869,958 | ) | 115,079,935 | 148,685,534 | |||||||||||||||||
Increase (Decrease) in Net Assets | (51,739,042 | ) | (90,552,826 | ) | (30,512,027 | ) | (162,487,362 | ) | 197,919,987 | 182,778,894 | |||||||||||||||||
NET ASSETS: | |||||||||||||||||||||||||||
Beginning of year | 81,738,658 | 172,291,484 | 147,484,735 | 309,972,097 | 270,385,346 | 87,606,452 | |||||||||||||||||||||
End of year | $ | 29,999,616 | $ | 81,738,658 | $ | 116,972,708 | $ | 147,484,735 | $ | 468,305,333 | $ | 270,385,346 | |||||||||||||||
Undistributed net investment income (loss) at end of year | $ | 222,354 | $ | (72,698 | ) | $ | 71,156 | $ | (13,104 | ) | $ | 535,069 | $ | 394,978 | |||||||||||||
CHANGES IN SHARES OUTSTANDING: | |||||||||||||||||||||||||||
Shares sold | 450,000 | 1,150,000 | 7,200,000 | 8,100,000 | 6,050,000 | 10,800,000 | |||||||||||||||||||||
Shares repurchased | (2,200,000 | ) | (4,100,000 | ) | (9,200,000 | ) | (12,650,000 | ) | (3,000,000 | ) | (5,700,000 | ) | |||||||||||||||
Shares outstanding, beginning of year | 2,950,000 | 5,900,000 | 7,200,000 | 11,750,000 | 8,450,000 | 3,350,000 | |||||||||||||||||||||
Shares outstanding, end of year | 1,200,000 | 2,950,000 | 5,200,000 | 7,200,000 | 11,500,000 | 8,450,000 |
See Notes to Financial Statements.
72
PowerShares Dynamic Retail Portfolio (PMR) | PowerShares Dynamic Semiconductors Portfolio (PSI) | PowerShares Dynamic Software Portfolio (PSJ) | |||||||||||||||||||||||||
Year Ended April 30, 2013 | Year Ended April 30, 2012 | Year Ended April 30, 2013 | Year Ended April 30, 2012 | Year Ended April 30, 2013 | Year Ended April 30, 2012 | ||||||||||||||||||||||
OPERATIONS: | |||||||||||||||||||||||||||
Net investment income (loss) | $ | 1,272,606 | $ | 273,269 | $ | 135,816 | $ | 108,227 | $ | (12,345 | ) | $ | (163,090 | ) | |||||||||||||
Net realized gain (loss) | 3,492,860 | 2,401,127 | (742,479 | ) | (244,857 | ) | 2,492,754 | 1,322,942 | |||||||||||||||||||
Net change in unrealized appreciation (depreciation) | (2,243,383 | ) | 4,319,623 | (64,085 | ) | (5,838,142 | ) | 2,706,450 | (6,796,711 | ) | |||||||||||||||||
Net increase (decrease) in net assets resulting from operations | 2,522,083 | 6,994,019 | (670,748 | ) | (5,974,772 | ) | 5,186,859 | (5,636,859 | ) | ||||||||||||||||||
DISTRIBUTIONS TO SHAREHOLDERS FROM: | |||||||||||||||||||||||||||
Net investment income | (1,304,529 | ) | (208,592 | ) | (140,761 | ) | (53,536 | ) | — | — | |||||||||||||||||
SHAREHOLDER TRANSACTIONS: | |||||||||||||||||||||||||||
Proceeds from shares sold | 63,080,768 | 170,377,995 | 10,919,661 | 37,543,382 | 36,626,496 | 62,313,336 | |||||||||||||||||||||
Value of shares repurchased | (116,191,131 | ) | (113,650,528 | ) | (14,625,193 | ) | (53,002,564 | ) | (43,265,846 | ) | (90,740,602 | ) | |||||||||||||||
Net increase (decrease) in net assets resulting from shares transactions | (53,110,363 | ) | 56,727,467 | (3,705,532 | ) | (15,459,182 | ) | (6,639,350 | ) | (28,427,266 | ) | ||||||||||||||||
Increase (Decrease) in Net Assets | (51,892,809 | ) | 63,512,894 | (4,517,041 | ) | (21,487,490 | ) | (1,452,491 | ) | (34,064,125 | ) | ||||||||||||||||
NET ASSETS: | |||||||||||||||||||||||||||
Beginning of year | 76,643,129 | 13,130,235 | 21,261,411 | 42,748,901 | 49,709,698 | 83,773,823 | |||||||||||||||||||||
End of year | $ | 24,750,320 | $ | 76,643,129 | $ | 16,744,370 | $ | 21,261,411 | $ | 48,257,207 | $ | 49,709,698 | |||||||||||||||
Undistributed net investment income (loss) at end of year | $ | 37,901 | $ | 69,645 | $ | 44,467 | $ | 49,412 | $ | (8,388 | ) | $ | (57,902 | ) | |||||||||||||
CHANGES IN SHARES OUTSTANDING: | |||||||||||||||||||||||||||
Shares sold | 2,500,000 | 7,600,000 | 750,000 | 2,300,000 | 1,350,000 | 2,550,000 | |||||||||||||||||||||
Shares repurchased | (4,600,000 | ) | (5,250,000 | ) | (1,000,000 | ) | (3,300,000 | ) | (1,600,000 | ) | (3,750,000 | ) | |||||||||||||||
Shares outstanding, beginning of year | 2,950,000 | 600,000 | 1,350,000 | 2,350,000 | 1,850,000 | 3,050,000 | |||||||||||||||||||||
Shares outstanding, end of year | 850,000 | 2,950,000 | 1,100,000 | 1,350,000 | 1,600,000 | 1,850,000 |
73
Financial Highlights
PowerShares Dynamic Biotechnology & Genome Portfolio (PBE)
Year Ended April 30, | |||||||||||||||||||||||
2013 | 2012 | 2011 | 2010 | 2009 | |||||||||||||||||||
PER SHARE OPERATING PERFORMANCE: | |||||||||||||||||||||||
Net asset value at beginning of year | $ | 22.26 | $ | 23.14 | $ | 19.67 | $ | 12.90 | $ | 17.77 | |||||||||||||
Net investment income (loss)(a) | (0.05 | ) | (0.04 | ) | (0.05 | ) | 0.06 | (e) | (0.06 | ) | |||||||||||||
Net realized and unrealized gain (loss) on investments | 6.05 | (0.84 | ) | 3.52 | 6.79 | (4.81 | ) | ||||||||||||||||
Total from investment operations | 6.00 | (0.88 | ) | 3.47 | 6.85 | (4.87 | ) | ||||||||||||||||
Distributions to shareholders from: | |||||||||||||||||||||||
Net investment income | — | — | — | (0.06 | ) | — | |||||||||||||||||
Return of capital | — | — | — | (0.02 | ) | — | |||||||||||||||||
Total distributions | — | — | — | (0.08 | ) | — | |||||||||||||||||
Net asset value at end of year | $ | 28.26 | $ | 22.26 | $ | 23.14 | $ | 19.67 | $ | 12.90 | |||||||||||||
Market price at end of year(b) | $ | 28.27 | $ | 22.21 | $ | 23.18 | $ | 19.68 | $ | 12.87 | |||||||||||||
NET ASSET VALUE, TOTAL RETURN:(c) | 26.96 | % | (3.80 | )% | 17.64 | % | 53.19 | % | (27.41 | )% | |||||||||||||
MARKET PRICE TOTAL RETURN(c) | 27.29 | % | (4.18 | )% | 17.78 | % | 53.63 | % | (27.62 | )% | |||||||||||||
RATIOS/SUPPLEMENTAL DATA: | |||||||||||||||||||||||
Net assets at end of year (000's omitted) | $ | 155,453 | $ | 136,903 | $ | 217,553 | $ | 214,391 | $ | 139,297 | |||||||||||||
Ratio to average net assets of: | |||||||||||||||||||||||
Expenses, after Waivers | 0.63 | % | 0.63 | % | 0.63 | % | 0.63 | % | 0.63 | % | |||||||||||||
Expenses, prior to Waivers | 0.63 | % | 0.64 | % | 0.65 | % | 0.61 | % | 0.62 | % | |||||||||||||
Net investment income (loss), after Waivers | (0.20 | )% | (0.21 | )% | (0.23 | )% | 0.36 | %(e) | (0.38 | )% | |||||||||||||
Portfolio turnover rate(d) | 53 | % | 53 | % | 81 | % | 80 | % | 93 | % |
PowerShares Dynamic Building & Construction Portfolio (PKB)
Year Ended April 30, | |||||||||||||||||||||||
2013 | 2012 | 2011 | 2010 | 2009 | |||||||||||||||||||
PER SHARE OPERATING PERFORMANCE: | |||||||||||||||||||||||
Net asset value at beginning of year | $ | 14.23 | $ | 14.11 | $ | 13.92 | $ | 10.92 | $ | 17.25 | |||||||||||||
Net investment income(a) | 0.07 | 0.02 | 0.68 | (f) | 0.01 | 0.02 | |||||||||||||||||
Net realized and unrealized gain (loss) on investments | 5.44 | 0.12 | 0.29 | (g) | 3.01 | (6.33 | ) | ||||||||||||||||
Total from investment operations | 5.51 | 0.14 | 0.97 | 3.02 | (6.31 | ) | |||||||||||||||||
Distributions to shareholders from: | |||||||||||||||||||||||
Net investment income | (0.09 | ) | (0.02 | ) | (0.66 | ) | (0.02 | ) | (0.02 | ) | |||||||||||||
Return of capital | — | — | (0.12 | ) | — | ��� | |||||||||||||||||
Total distributions | (0.09 | ) | (0.02 | ) | (0.78 | ) | (0.02 | ) | (0.02 | ) | |||||||||||||
Net asset value at end of year | $ | 19.65 | $ | 14.23 | $ | 14.11 | $ | 13.92 | $ | 10.92 | |||||||||||||
Market price at end of year(b) | $ | 19.63 | $ | 14.20 | $ | 14.09 | $ | 13.92 | $ | 10.94 | |||||||||||||
NET ASSET VALUE, TOTAL RETURN:(c) | 38.85 | % | 0.99 | % | 7.49 | % | 27.65 | % | (36.61 | )% | |||||||||||||
MARKET PRICE TOTAL RETURN(c) | 39.01 | % | 0.92 | % | 7.34 | % | 27.42 | % | (36.46 | )% | |||||||||||||
RATIOS/SUPPLEMENTAL DATA: | |||||||||||||||||||||||
Net assets at end of year (000's omitted) | $ | 104,121 | $ | 30,600 | $ | 40,204 | $ | 50,114 | $ | 49,142 | |||||||||||||
Ratio to average net assets of: | |||||||||||||||||||||||
Expenses, after Waivers | 0.63 | % | 0.63 | % | 0.63 | % | 0.63 | % | 0.63 | % | |||||||||||||
Expenses, prior to Waivers | 0.69 | % | 1.01 | % | 0.91 | % | 0.76 | % | 1.06 | % | |||||||||||||
Net investment income (loss), after Waivers | 0.44 | % | 0.12 | % | 5.25 | %(f) | 0.07 | % | 0.19 | % | |||||||||||||
Portfolio turnover rate(d) | 95 | % | 72 | % | 75 | % | 59 | % | 50 | % |
(a) Based on average shares outstanding.
(b) The mean between the last bid and ask prices.
(c) Net asset value total 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. Market price total return is calculated assuming an initial investment made at the market price at the beginning of the period, reinvestment of all dividends and distributions at market price during the period, and sale at the market price on the last day of the period. Total investment returns calculated for a period of less than one year are not annualized.
(d) Portfolio turnover rate is not annualized and does not include securities received or delivered from processing creations or redemptions.
(e) Net investment income per share and the ratio of net investment income to average net assets include a special cash dividend received of $1.41 per share owned of PDL BioPharma, Inc. on December 15, 2009. Net investment loss per share and the ratio of net investment loss to average net assets excluding the special dividend are $(0.03) and (0.18)%, respectively.
(f) Net investment income per share and the ratio of net investment income to average net assets include a special cash dividend received of $1.65 per share owned of Weyerhaeuser Co. on July 20, 2010. Net investment income per share and the ratio of net investment income to average net assets excluding the special dividend are $0.03 and 0.26%, respectively.
(g) Due to the timing of creations and redemptions of capital shares, the net realized and unrealized gain (loss) per share is not in accord with the Fund's change in net realized and unrealized gain (loss) on investment securities and in-kind transactions for the period.
See Notes to Financial Statements.
74
Financial Highlights (Continued)
PowerShares Dynamic Energy Exploration & Production Portfolio (PXE)
Year Ended April 30, | |||||||||||||||||||||||
2013 | 2012 | 2011 | 2010 | 2009 | |||||||||||||||||||
PER SHARE OPERATING PERFORMANCE: | |||||||||||||||||||||||
Net asset value at beginning of year | $ | 24.58 | $ | 27.67 | $ | 18.46 | $ | 13.17 | $ | 26.69 | |||||||||||||
Net investment income(a) | 0.53 | 0.19 | 0.12 | 0.10 | 0.06 | ||||||||||||||||||
Net realized and unrealized gain (loss) on investments | 5.81 | (2.94 | ) | 9.21 | 5.27 | (13.50 | ) | ||||||||||||||||
Total from investment operations | 6.34 | (2.75 | ) | 9.33 | 5.37 | (13.44 | ) | ||||||||||||||||
Distributions to shareholders from: | |||||||||||||||||||||||
Net investment income | (0.65 | ) | (0.34 | ) | (0.12 | ) | (0.07 | ) | (0.08 | ) | |||||||||||||
Return of capital | — | — | — | (0.01 | ) | — | |||||||||||||||||
Total distributions | (0.65 | ) | (0.34 | ) | (0.12 | ) | (0.08 | ) | (0.08 | ) | |||||||||||||
Net asset value at end of year | $ | 30.27 | $ | 24.58 | $ | 27.67 | $ | 18.46 | $ | 13.17 | |||||||||||||
Market price at end of year(b) | $ | 30.23 | $ | 24.57 | $ | 27.65 | $ | 18.46 | $ | 13.15 | |||||||||||||
NET ASSET VALUE, TOTAL RETURN:(c) | 26.14 | % | (9.86 | )% | 50.80 | % | 40.87 | % | (50.42 | )% | |||||||||||||
MARKET PRICE TOTAL RETURN(c) | 26.03 | % | (9.83 | )% | 50.69 | % | 41.08 | % | (50.44 | )% | |||||||||||||
RATIOS/SUPPLEMENTAL DATA: | |||||||||||||||||||||||
Net assets at end of year (000's omitted) | $ | 104,427 | $ | 67,592 | $ | 118,975 | $ | 59,983 | $ | 51,344 |
Ratio to average net assets of: |
Expenses, after Waivers | 0.65 | % | 0.65 | % | 0.63 | % | 0.63 | % | 0.63 | % | |||||||||||||
Expenses, prior to Waivers | 0.69 | % | 0.73 | % | 0.76 | % | 0.76 | % | 0.69 | % | |||||||||||||
Net investment income, after Waivers | 1.97 | % | 0.81 | % | 0.57 | % | 0.62 | % | 0.30 | % | |||||||||||||
Portfolio turnover rate(d) | 80 | % | 94 | % | 57 | % | 68 | % | 68 | % |
PowerShares Dynamic Food & Beverage Portfolio (PBJ)
Year Ended April 30, | |||||||||||||||||||||||
2013 | 2012 | 2011 | 2010 | 2009 | |||||||||||||||||||
PER SHARE OPERATING PERFORMANCE: | |||||||||||||||||||||||
Net asset value at beginning of year | $ | 19.77 | $ | 19.76 | $ | 16.00 | $ | 12.73 | $ | 16.73 | |||||||||||||
Net investment income(a) | 0.26 | 0.22 | 0.24 | 0.20 | 0.25 | ||||||||||||||||||
Net realized and unrealized gain (loss) on investments | 3.92 | (0.03 | ) | 3.73 | 3.33 | (4.08 | ) | ||||||||||||||||
Total from investment operations | 4.18 | 0.19 | 3.97 | 3.53 | (3.83 | ) | |||||||||||||||||
Distributions to shareholders from: | |||||||||||||||||||||||
Net investment income | (0.33 | ) | (0.18 | ) | (0.21 | ) | (0.26 | ) | (0.17 | ) | |||||||||||||
Net asset value at end of year | $ | 23.62 | $ | 19.77 | $ | 19.76 | $ | 16.00 | $ | 12.73 | |||||||||||||
Market price at end of year(b) | $ | 23.61 | $ | 19.77 | $ | 19.81 | $ | 16.01 | $ | 12.74 | |||||||||||||
NET ASSET VALUE, TOTAL RETURN:(c) | 21.45 | % | 1.02 | % | 24.99 | % | 28.08 | % | (22.99 | )% | |||||||||||||
MARKET PRICE TOTAL RETURN(c) | 21.40 | % | 0.77 | % | 25.23 | % | 28.06 | % | (22.89 | )% | |||||||||||||
RATIOS/SUPPLEMENTAL DATA: | |||||||||||||||||||||||
Net assets at end of year (000's omitted) | $ | 236,226 | $ | 169,039 | $ | 91,881 | $ | 72,795 | $ | 86,592 |
Ratio to average net assets of: |
Expenses, after Waivers | 0.63 | % | 0.63 | % | 0.63 | % | 0.63 | % | 0.63 | % | |||||||||||||
Expenses, prior to Waivers | 0.63 | % | 0.64 | % | 0.71 | % | 0.74 | % | 0.71 | % | |||||||||||||
Net investment income, after Waivers | 1.28 | % | 1.13 | % | 1.39 | % | 1.41 | % | 1.80 | % | |||||||||||||
Portfolio turnover rate(d) | 92 | % | 134 | % | 73 | % | 65 | % | 65 | % |
(a) Based on average shares outstanding.
(b) The mean between the last bid and ask prices.
(c) Net asset value total 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. Market price total return is calculated assuming an initial investment made at the market price at the beginning of the period, reinvestment of all dividends and distributions at market price during the period, and sale at the market price on the last day of the period. Total investment returns calculated for a period of less than one year are not annualized.
(d) Portfolio turnover rate is not annualized and does not include securities received or delivered from processing creations or redemptions.
See Notes to Financial Statements.
75
Financial Highlights (Continued)
PowerShares Dynamic Leisure and Entertainment Portfolio (PEJ)
Year Ended April 30, | |||||||||||||||||||||||
2013 | 2012 | 2011 | 2010 | 2009 | |||||||||||||||||||
PER SHARE OPERATING PERFORMANCE: | |||||||||||||||||||||||
Net asset value at beginning of year | $ | 22.18 | $ | 19.34 | $ | 16.52 | $ | 10.65 | $ | 15.11 | |||||||||||||
Net investment income(a) | 0.12 | 0.15 | 0.16 | 0.05 | 0.10 | ||||||||||||||||||
Net realized and unrealized gain (loss) on investments | 5.09 | 2.82 | 2.81 | 5.88 | (4.46 | ) | |||||||||||||||||
Total from investment operations | 5.21 | 2.97 | 2.97 | 5.93 | (4.36 | ) | |||||||||||||||||
Distributions to shareholders from: | |||||||||||||||||||||||
Net investment income | (0.16 | ) | (0.13 | ) | (0.15 | ) | (0.06 | ) | (0.10 | ) | |||||||||||||
Net asset value at end of year | $ | 27.23 | $ | 22.18 | $ | 19.34 | $ | 16.52 | $ | 10.65 | |||||||||||||
Market price at end of year(b) | $ | 27.21 | $ | 22.20 | $ | 19.34 | $ | 16.54 | $ | 10.63 | |||||||||||||
NET ASSET VALUE, TOTAL RETURN:(c) | 23.67 | % | 15.49 | % | 18.03 | % | 55.81 | % | (28.91 | )% | |||||||||||||
MARKET PRICE TOTAL RETURN(c) | 23.47 | % | 15.59 | % | 17.89 | % | 56.29 | % | (29.09 | )% | |||||||||||||
RATIOS/SUPPLEMENTAL DATA: | |||||||||||||||||||||||
Net assets at end of year (000's omitted) | $ | 85,765 | $ | 57,679 | $ | 60,933 | $ | 62,794 | $ | 12,776 |
Ratio to average net assets of: |
Expenses, after Waivers | 0.63 | % | 0.63 | % | 0.63 | % | 0.63 | % | 0.63 | % | |||||||||||||
Expenses, prior to Waivers | 0.69 | % | 0.80 | % | 0.78 | % | 1.06 | % | 1.65 | % | |||||||||||||
Net investment income, after Waivers | 0.52 | % | 0.80 | % | 0.92 | % | 0.41 | % | 0.96 | % | |||||||||||||
Portfolio turnover rate(d) | 93 | % | 90 | % | 58 | % | 68 | % | 50 | % |
PowerShares Dynamic Media Portfolio (PBS)
Year Ended April 30, | |||||||||||||||||||||||
2013 | 2012 | 2011 | 2010 | 2009 | |||||||||||||||||||
PER SHARE OPERATING PERFORMANCE: | |||||||||||||||||||||||
Net asset value at beginning of year | $ | 14.84 | $ | 15.61 | $ | 13.68 | $ | 8.25 | $ | 13.44 | |||||||||||||
Net investment income(a) | 0.12 | 0.08 | 0.07 | 0.06 | 0.05 | ||||||||||||||||||
Net realized and unrealized gain (loss) on investments | 5.28 | (0.76 | ) | 1.93 | 5.42 | (5.18 | ) | ||||||||||||||||
Total from investment operations | 5.40 | (0.68 | ) | 2.00 | 5.48 | (5.13 | ) | ||||||||||||||||
Distributions to shareholders from: | |||||||||||||||||||||||
Net investment income | (0.13 | ) | (0.09 | ) | (0.07 | ) | (0.05 | ) | (0.04 | ) | |||||||||||||
Return of capital | — | — | — | (0.00 | )(e) | (0.02 | ) | ||||||||||||||||
Total distributions | (0.13 | ) | (0.09 | ) | (0.07 | ) | (0.05 | ) | (0.06 | ) | |||||||||||||
Net asset value at end of year | $ | 20.11 | $ | 14.84 | $ | 15.61 | $ | 13.68 | $ | 8.25 | |||||||||||||
Market price at end of year(b) | $ | 20.10 | $ | 14.84 | $ | 15.61 | $ | 13.70 | $ | 8.26 | |||||||||||||
NET ASSET VALUE, TOTAL RETURN:(c) | 36.62 | % | (4.33 | )% | 14.68 | % | 66.55 | % | (38.30 | )% | |||||||||||||
MARKET PRICE TOTAL RETURN(c) | 36.55 | % | (4.33 | )% | 14.51 | % | 66.59 | % | (38.31 | )% | |||||||||||||
RATIOS/SUPPLEMENTAL DATA: | |||||||||||||||||||||||
Net assets at end of year (000's omitted) | $ | 150,788 | $ | 137,975 | $ | 156,881 | $ | 125,875 | $ | 8,254 | |||||||||||||
Ratio to average net assets of: | |||||||||||||||||||||||
Expenses, after Waivers | 0.63 | % | 0.63 | % | 0.63 | % | 0.63 | % | 0.63 | % | |||||||||||||
Expenses, prior to Waivers | 0.63 | % | 0.65 | % | 0.69 | % | 0.77 | % | 1.22 | % | |||||||||||||
Net investment income, after Waivers | 0.71 | % | 0.60 | % | 0.57 | % | 0.51 | % | 0.52 | % | |||||||||||||
Portfolio turnover rate(d) | 70 | % | 89 | % | 53 | % | 50 | % | 69 | % |
(a) Based on average shares outstanding.
(b) The mean between the last bid and ask prices.
(c) Net asset value total 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. Market price total return is calculated assuming an initial investment made at the market price at the beginning of the period, reinvestment of all dividends and distributions at market price during the period, and sale at the market price on the last day of the period. Total investment returns calculated for a period of less than one year are not annualized.
(d) Portfolio turnover rate is not annualized and does not include securities received or delivered from processing creations or redemptions.
(e) Amount represents less than $0.005.
See Notes to Financial Statements.
76
Financial Highlights (Continued)
PowerShares Dynamic Networking Portfolio (PXQ)
Year Ended April 30, | |||||||||||||||||||||||
2013 | 2012 | 2011 | 2010 | 2009 | |||||||||||||||||||
PER SHARE OPERATING PERFORMANCE: | |||||||||||||||||||||||
Net asset value at beginning of year | $ | 27.71 | $ | 29.20 | $ | 21.08 | $ | 13.56 | $ | 16.04 | |||||||||||||
Net investment income (loss)(a) | 0.20 | (b) | (0.06 | ) | (0.10 | ) | (0.09 | ) | (0.06 | ) | |||||||||||||
Net realized and unrealized gain (loss) on investments | (2.85 | ) | (1.43 | ) | 8.33 | 7.61 | (2.42 | ) | |||||||||||||||
Total from investment operations | (2.65 | ) | (1.49 | ) | 8.23 | 7.52 | (2.48 | ) | |||||||||||||||
Distributions to shareholders from: | |||||||||||||||||||||||
Net investment income | (0.06 | ) | — | — | — | — | |||||||||||||||||
Return of capital | — | — | (0.11 | ) | — | — | |||||||||||||||||
Total distributions | (0.06 | ) | — | (0.11 | ) | — | — | ||||||||||||||||
Net asset value at end of year | $ | 25.00 | $ | 27.71 | $ | 29.20 | $ | 21.08 | $ | 13.56 | |||||||||||||
Market price at end of year(c) | $ | 24.97 | $ | 27.68 | $ | 29.20 | $ | 21.11 | $ | 13.58 | |||||||||||||
NET ASSET VALUE, TOTAL RETURN:(d) | (9.57 | )% | (5.10 | )% | 39.08 | % | 55.46 | % | (15.46 | )% | |||||||||||||
MARKET PRICE TOTAL RETURN(d) | (9.58 | )% | (5.20 | )% | 38.89 | % | 55.45 | % | (15.28 | )% | |||||||||||||
RATIOS/SUPPLEMENTAL DATA: | |||||||||||||||||||||||
Net assets at end of year (000's omitted) | $ | 30,000 | $ | 81,739 | $ | 172,291 | $ | 47,437 | $ | 16,276 |
Ratio to average net assets of: |
Expenses, after Waivers | 0.64 | % | 0.63 | % | 0.63 | % | 0.63 | % | 0.63 | % | |||||||||||||
Expenses, prior to Waivers | 0.75 | % | 0.67 | % | 0.70 | % | 0.95 | % | 1.92 | % | |||||||||||||
Net investment income (loss), after Waivers | 0.81 | %(b) | (0.22 | )% | (0.38 | )% | (0.50 | )% | (0.49 | )% | |||||||||||||
Portfolio turnover rate(e) | 68 | % | 84 | % | 61 | % | 29 | % | 23 | % |
PowerShares Dynamic Oil & Gas Services Portfolio (PXJ)
Year Ended April 30, | |||||||||||||||||||||||
2013 | 2012 | 2011 | 2010 | 2009 | |||||||||||||||||||
PER SHARE OPERATING PERFORMANCE: | |||||||||||||||||||||||
Net asset value at beginning of year | $ | 20.48 | $ | 26.38 | $ | 18.03 | $ | 13.09 | $ | 29.23 | |||||||||||||
Net investment income (loss)(a) | 0.04 | (0.01 | ) | 0.07 | 0.04 | 0.06 | |||||||||||||||||
Net realized and unrealized gain (loss) on investments | 2.00 | (5.89 | ) | 8.36 | 4.98 | (16.16 | ) | ||||||||||||||||
Total from investment operations | 2.04 | (5.90 | ) | 8.43 | 5.02 | (16.10 | ) | ||||||||||||||||
Distributions to shareholders from: | |||||||||||||||||||||||
Net investment income | (0.03 | ) | (0.00 | )(f) | (0.08 | ) | (0.06 | ) | (0.04 | ) | |||||||||||||
Return of capital | — | — | — | (0.02 | ) | — | |||||||||||||||||
Total distributions | (0.03 | ) | — | (0.08 | ) | (0.08 | ) | (0.04 | ) | ||||||||||||||
Net asset value at end of year | $ | 22.49 | $ | 20.48 | $ | 26.38 | $ | 18.03 | $ | 13.09 | |||||||||||||
Market price at end of year(c) | $ | 22.49 | $ | 20.48 | $ | 26.38 | $ | 18.02 | $ | 13.11 | |||||||||||||
NET ASSET VALUE, TOTAL RETURN:(d) | 9.95 | % | (22.36 | )% | 46.84 | % | 38.41 | % | (55.04 | )% | |||||||||||||
MARKET PRICE TOTAL RETURN(d) | 9.95 | % | (22.36 | )% | 46.93 | % | 38.13 | % | (54.93 | )% | |||||||||||||
RATIOS/SUPPLEMENTAL DATA: | |||||||||||||||||||||||
Net assets at end of year (000's omitted) | $ | 116,973 | $ | 147,485 | $ | 309,972 | $ | 170,358 | $ | 155,716 |
Ratio to average net assets of: |
Expenses, after Waivers | 0.62 | % | 0.63 | % | 0.63 | % | 0.63 | % | 0.62 | % | |||||||||||||
Expenses, prior to Waivers | 0.62 | % | 0.63 | % | 0.64 | % | 0.63 | % | 0.61 | % | |||||||||||||
Net investment income (loss), after Waivers | 0.18 | % | (0.03 | )% | 0.36 | % | 0.24 | % | 0.29 | % | |||||||||||||
Portfolio turnover rate(e) | 68 | % | 70 | % | 39 | % | 56 | % | 48 | % |
(a) Based on average shares outstanding.
(b) Net investment income per share and the ratio of net investment income to average net assets include a special cash dividend received of $1 per share owned of Tellabs, Inc. on December 24, 2012. Net investment loss per share and the ratio of net investment loss to average net assets excluding the special dividend are $(0.01) and (0.05)%, respectively.
(c) The mean between the last bid and ask prices.
(d) Net asset value total 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. Market price total return is calculated assuming an initial investment made at the market price at the beginning of the period, reinvestment of all dividends and distributions at market price during the period, and sale at the market price on the last day of the period. Total investment returns calculated for a period of less than one year are not annualized.
(e) Portfolio turnover rate is not annualized and does not include securities received or delivered from processing creations or redemptions.
(f) Amount represents less than $0.005.
See Notes to Financial Statements.
77
Financial Highlights (Continued)
PowerShares Dynamic Pharmaceuticals Portfolio (PJP)
Year Ended April 30, | |||||||||||||||||||||||
2013 | 2012 | 2011 | 2010 | 2009 | |||||||||||||||||||
PER SHARE OPERATING PERFORMANCE: | |||||||||||||||||||||||
Net asset value at beginning of year | $ | 32.00 | $ | 26.15 | $ | 19.55 | $ | 13.91 | $ | 17.20 | |||||||||||||
Net investment income(a) | 0.54 | (b) | 0.22 | 0.17 | 0.14 | 0.15 | |||||||||||||||||
Net realized and unrealized gain (loss) on investments | 8.72 | 5.83 | 6.56 | 5.76 | (3.32 | ) | |||||||||||||||||
Total from investment operations | 9.26 | 6.05 | 6.73 | 5.90 | (3.17 | ) | |||||||||||||||||
Distributions to shareholders from: | |||||||||||||||||||||||
Net investment income | (0.54 | ) | (0.20 | ) | (0.13 | ) | (0.26 | ) | (0.12 | ) | |||||||||||||
Net asset value at end of year | $ | 40.72 | $ | 32.00 | $ | 26.15 | $ | 19.55 | $ | 13.91 | |||||||||||||
Market price at end of year(c) | $ | 40.72 | $ | 31.99 | $ | 26.17 | $ | 19.54 | $ | 13.92 | |||||||||||||
NET ASSET VALUE, TOTAL RETURN:(d) | 29.25 | % | 23.29 | % | 34.55 | % | 42.69 | % | (18.52 | )% | |||||||||||||
MARKET PRICE TOTAL RETURN(d) | 29.29 | % | 23.16 | % | 34.73 | % | 42.51 | % | (18.41 | )% | |||||||||||||
RATIOS/SUPPLEMENTAL DATA: | |||||||||||||||||||||||
Net assets at end of year (000's omitted) | $ | 468,305 | $ | 270,385 | $ | 87,606 | $ | 57,662 | $ | 104,349 |
Ratio to average net assets of: |
Expenses, after Waivers | 0.63 | % | 0.63 | % | 0.63 | % | 0.63 | % | 0.63 | % | |||||||||||||
Expenses, prior to Waivers | 0.63 | % | 0.64 | % | 0.76 | % | 0.74 | % | 0.66 | % | |||||||||||||
Net investment income, after Waivers | 1.52 | %(b) | 0.77 | % | 0.78 | % | 0.83 | % | 0.95 | % | |||||||||||||
Portfolio turnover rate(e) | 24 | % | 23 | % | 9 | % | 35 | % | 31 | % |
PowerShares Dynamic Retail Portfolio (PMR)
Year Ended April 30, | |||||||||||||||||||||||
2013 | 2012 | 2011 | 2010 | 2009 | |||||||||||||||||||
PER SHARE OPERATING PERFORMANCE: | |||||||||||||||||||||||
Net asset value at beginning of year | $ | 25.98 | $ | 21.88 | $ | 18.67 | $ | 14.64 | $ | 15.99 | |||||||||||||
Net investment income(a) | 0.66 | 0.16 | 0.18 | 0.06 | 0.05 | ||||||||||||||||||
Net realized and unrealized gain (loss) on investments | 3.11 | 4.17 | 3.21 | 4.08 | (1.36 | ) | |||||||||||||||||
Total from investment operations | 3.77 | 4.33 | 3.39 | 4.14 | (1.31 | ) | |||||||||||||||||
Distributions to shareholders from: | |||||||||||||||||||||||
Net investment income | (0.63 | ) | (0.23 | ) | (0.18 | ) | (0.11 | ) | (0.04 | ) | |||||||||||||
Net asset value at end of year | $ | 29.12 | $ | 25.98 | $ | 21.88 | $ | 18.67 | $ | 14.64 | |||||||||||||
Market price at end of year(c) | $ | 29.11 | $ | 25.98 | $ | 21.90 | $ | 18.68 | $ | 14.64 | |||||||||||||
NET ASSET VALUE, TOTAL RETURN:(d) | 14.87 | % | 20.06 | % | 18.35 | % | 28.49 | % | (8.11 | )% | |||||||||||||
MARKET PRICE TOTAL RETURN(d) | 14.83 | % | 19.95 | % | 18.39 | % | 28.56 | % | (8.11 | )% | |||||||||||||
RATIOS/SUPPLEMENTAL DATA: | |||||||||||||||||||||||
Net assets at end of year (000's omitted) | $ | 24,750 | $ | 76,643 | $ | 13,130 | $ | 24,273 | $ | 77,607 |
Ratio to average net assets of: |
Expenses, after Waivers | 0.63 | % | 0.63 | % | 0.63 | % | 0.63 | % | 0.63 | % | |||||||||||||
Expenses, prior to Waivers | 0.74 | % | 0.87 | % | 1.63 | % | 0.89 | % | 1.08 | % | |||||||||||||
Net investment income, after Waivers | 2.59 | % | 0.75 | % | 1.01 | % | 0.44 | % | 0.45 | % | |||||||||||||
Portfolio turnover rate(e) | 83 | % | 111 | % | 102 | % | 52 | % | 53 | % |
(a) Based on average shares outstanding.
(b) Net investment income per share and the ratio of net investment income to average net assets include a special cash dividend received of $4 per share owned of Warner Chilcott PLC. on August 29, 2012. Net investment income per share and the ratio of net investment income to average net assets excluding the special dividend are $0.32 and 0.91%, respectively.
(c) The mean between the last bid and ask prices.
(d) Net asset value total 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. Market price total return is calculated assuming an initial investment made at the market price at the beginning of the period, reinvestment of all dividends and distributions at market price during the period, and sale at the market price on the last day of the period. Total investment returns calculated for a period of less than one year are not annualized.
(e) Portfolio turnover rate is not annualized and does not include securities received or delivered from processing creations or redemptions.
See Notes to Financial Statements.
78
Financial Highlights (Continued)
PowerShares Dynamic Semiconductors Portfolio (PSI)
Year Ended April 30, | |||||||||||||||||||||||
2013 | 2012 | 2011 | 2010 | 2009 | |||||||||||||||||||
PER SHARE OPERATING PERFORMANCE: | |||||||||||||||||||||||
Net asset value at beginning of year | $ | 15.75 | $ | 18.19 | $ | 14.29 | $ | 10.39 | $ | 16.32 | |||||||||||||
Net investment income(a) | 0.11 | 0.06 | 0.01 | 0.05 | 0.04 | ||||||||||||||||||
Net realized and unrealized gain (loss) on investments | (0.52 | ) | (2.47 | ) | 3.92 | 3.91 | (5.92 | ) | |||||||||||||||
Total from investment operations | (0.41 | ) | (2.41 | ) | 3.93 | 3.96 | (5.88 | ) | |||||||||||||||
Distribution to shareholder from: | |||||||||||||||||||||||
Net investment income | (0.12 | ) | (0.03 | ) | (0.01 | ) | (0.06 | ) | (0.05 | ) | |||||||||||||
Return of capital | — | — | (0.02 | ) | (0.00 | )(b) | — | ||||||||||||||||
Total distributions | (0.12 | ) | (0.03 | ) | (0.03 | ) | (0.06 | ) | (0.05 | ) | |||||||||||||
Net asset value at end of year | $ | 15.22 | $ | 15.75 | $ | 18.19 | $ | 14.29 | $ | 10.39 | |||||||||||||
Market price at end of year(c) | $ | 15.19 | $ | 15.71 | $ | 18.20 | $ | 14.29 | $ | 10.39 | |||||||||||||
NET ASSET VALUE, TOTAL RETURN:(d) | (2.56 | )% | (13.20 | )% | 27.57 | % | 38.16 | % | (36.01 | )% | |||||||||||||
MARKET PRICE TOTAL RETURN(d) | (2.50 | )% | (13.47 | )% | 27.64 | % | 38.16 | % | (36.01 | )% | |||||||||||||
RATIOS/SUPPLEMENTAL DATA: | |||||||||||||||||||||||
Net assets at end of year (000's omitted) | $ | 16,744 | $ | 21,261 | $ | 42,749 | $ | 28,573 | $ | 36,373 |
Ratio to average net assets of: |
Expenses, after Waivers | 0.63 | % | 0.63 | % | 0.63 | % | 0.63 | % | 0.63 | % | |||||||||||||
Expenses, prior to Waivers | 1.05 | % | 1.02 | % | 0.97 | % | 0.90 | % | 0.82 | % | |||||||||||||
Net investment income, after Waivers | 0.77 | % | 0.42 | % | 0.04 | % | 0.39 | % | 0.32 | % | |||||||||||||
Portfolio turnover rate(e) | 91 | % | 57 | % | 64 | % | 68 | % | 65 | % |
PowerShares Dynamic Software Portfolio (PSJ)
Year Ended April 30, | |||||||||||||||||||||||
2013 | 2012 | 2011 | 2010 | 2009 | |||||||||||||||||||
PER SHARE OPERATING PERFORMANCE: | |||||||||||||||||||||||
Net asset value at beginning of year | $ | 26.87 | $ | 27.47 | $ | 22.54 | $ | 15.37 | $ | 17.53 | |||||||||||||
Net investment income (loss)(a) | (0.01 | ) | (0.07 | ) | (0.07 | ) | (0.07 | ) | (0.06 | ) | |||||||||||||
Net realized and unrealized gain (loss) on investments | 3.30 | (0.53 | ) | 5.00 | 7.24 | (2.10 | ) | ||||||||||||||||
Total from investment operations | 3.29 | (0.60 | ) | 4.93 | 7.17 | (2.16 | ) | ||||||||||||||||
Net asset value at end of year | $ | 30.16 | $ | 26.87 | $ | 27.47 | $ | 22.54 | $ | 15.37 | |||||||||||||
Market price at end of year(c) | $ | 30.12 | $ | 26.87 | $ | 27.48 | $ | 22.55 | $ | 15.37 | |||||||||||||
NET ASSET VALUE, TOTAL RETURN:(d) | 12.24 | % | (2.19 | )% | 21.87 | % | 46.65 | % | (12.32 | )% | |||||||||||||
MARKET PRICE TOTAL RETURN(d) | 12.09 | % | (2.22 | )% | 21.86 | % | 46.71 | % | (12.37 | )% | |||||||||||||
RATIOS/SUPPLEMENTAL DATA: | |||||||||||||||||||||||
Net assets at end of year (000's omitted) | $ | 48,257 | $ | 49,710 | $ | 83,774 | $ | 67,626 | $ | 36,896 |
Ratio to average net assets of: |
Expenses, after Waivers | 0.63 | % | 0.63 | % | 0.63 | % | 0.63 | % | 0.63 | % | |||||||||||||
Expenses, prior to Waivers | 0.74 | % | 0.78 | % | 0.77 | % | 0.75 | % | 0.97 | % | |||||||||||||
Net investment income (loss), after Waivers | (0.03 | )% | (0.29 | )% | (0.29 | )% | (0.38 | )% | (0.42 | )% | |||||||||||||
Portfolio turnover rate(e) | 95 | % | 100 | % | 46 | % | 33 | % | 53 | % |
(a) Based on average shares outstanding.
(b) Amount represents less than $0.005.
(c) The mean between the last bid and ask prices.
(d) Net asset value total 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. Market price total return is calculated assuming an initial investment made at the market price at the beginning of the period, reinvestment of all dividends and distributions at market price during the period, and sale at the market price on the last day of the period. Total investment returns calculated for a period of less than one year are not annualized.
(e) Portfolio turnover rate is not annualized and does not include securities received or delivered from processing creations or redemptions.
See Notes to Financial Statements.
79
Notes to Financial Statements
PowerShares Exchange-Traded Fund Trust
April 30, 2013
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 April 30, 2013, the Trust offered fifty-five portfolios. This report includes the following portfolios:
Full Name | Short Name | ||||||
PowerShares Dynamic Biotechnology & Genome Portfolio (PBE) | "Dynamic Biotechnology & Genome Portfolio" | ||||||
PowerShares Dynamic Building & Construction Portfolio (PKB) | "Dynamic Building & Construction Portfolio" | ||||||
PowerShares Dynamic Energy Exploration & Production Portfolio (PXE) | "Dynamic Energy Exploration & Production Portfolio" | ||||||
PowerShares Dynamic Food & Beverage Portfolio (PBJ) | "Dynamic Food & Beverage Portfolio" | ||||||
PowerShares Dynamic Leisure and Entertainment Portfolio (PEJ) | "Dynamic Leisure and Entertainment Portfolio" | ||||||
PowerShares Dynamic Media Portfolio (PBS) | "Dynamic Media Portfolio" | ||||||
PowerShares Dynamic Networking Portfolio (PXQ) | "Dynamic Networking Portfolio" | ||||||
PowerShares Dynamic Oil & Gas Services Portfolio (PXJ) | "Dynamic Oil & Gas Services Portfolio" | ||||||
PowerShares Dynamic Pharmaceuticals Portfolio (PJP) | "Dynamic Pharmaceuticals Portfolio" | ||||||
PowerShares Dynamic Retail Portfolio (PMR) | "Dynamic Retail Portfolio" | ||||||
PowerShares Dynamic Semiconductors Portfolio (PSI) | "Dynamic Semiconductors Portfolio" | ||||||
PowerShares Dynamic Software Portfolio (PSJ) | "Dynamic Software Portfolio" |
Each portfolio (each, a "Fund" and collectively, the "Funds") represents a separate series of the Trust. The shares of the Funds are referred to herein as "Shares" or "Fund's Shares." Each Fund's Shares are listed and traded on NYSE Arca, Inc.
The market prices of each Fund's Shares may differ to some degree from the Fund's net asset value ("NAV"). Unlike conventional mutual funds, each Fund issues and redeems Shares on a continuous basis, at NAV, 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 each Fund's relevant index. Except when aggregated in Creation Units by Authorized Participants, the Shares are not individually redeemable securities of the Funds.
The investment objective of each Fund is to seek investment results that generally correspond (before fees and expenses) to the price and yield of its respective index listed below (each, an "Underlying Index"):
Fund | Index | ||||||
Dynamic Biotechnology & Genome Portfolio | Dynamic Biotechnology & Genome IntellidexSM Index | ||||||
Dynamic Building & Construction Portfolio | Dynamic Building & Construction IntellidexSM Index |
80
Notes to Financial Statements (Continued)
PowerShares Exchange-Traded Fund Trust
April 30, 2013
Fund | Index | ||||||
Dynamic Energy Exploration & Production Portfolio | Dynamic Energy Exploration & Production IntellidexSM Index | ||||||
Dynamic Food & Beverage Portfolio | Dynamic Food & Beverage IntellidexSM Index | ||||||
Dynamic Leisure and Entertainment Portfolio | Dynamic Leisure and Entertainment IntellidexSM Index | ||||||
Dynamic Media Portfolio | Dynamic Media IntellidexSM Index | ||||||
Dynamic Networking Portfolio | Dynamic Networking IntellidexSM Index | ||||||
Dynamic Oil & Gas Services Portfolio | Dynamic Oil Services IntellidexSM Index | ||||||
Dynamic Pharmaceuticals Portfolio | Dynamic Pharmaceuticals IntellidexSM Index | ||||||
Dynamic Retail Portfolio | Dynamic Retail IntellidexSM Index | ||||||
Dynamic Semiconductors Portfolio | Dynamic Semiconductors IntellidexSM Index | ||||||
Dynamic Software Portfolio | Dynamic Software IntellidexSM 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 ("GAAP") 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. In addition, the Funds monitor for material events or transactions that may occur or become known after the period-end date and before the date the financial statements are released to print.
A. Security Valuation
Securities, including restricted securities, are valued according to the following policies.
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 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 and closed-end registered investment companies that do not trade on an exchange are valued at the end of day NAV per share. Investments in open-end and closed-end registered investment companies that trade on an exchange are valued at the 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.
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 (for unlisted equities), yield (for debt obligations), quality, type of issue, coupon rate (for debt obligations), maturity (for debt obligations), individual trading characteristics and other market data. Securities with a demand feature exercisable within one to seven days are valued at par. Debt obligations
81
Notes to Financial Statements (Continued)
PowerShares Exchange-Traded Fund Trust
April 30, 2013
are subject to interest rate and credit risks. In addition, all debt obligations involve some risk of default with respect to interest and/or principal payments.
Foreign securities' (including foreign exchange contracts) prices 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 New York Stock Exchange ("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 the Adviser determines are significant and 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 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' prices 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, American Depositary Receipts 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 became unreliable are valued at fair value as determined in good faith 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. Because of the inherent uncertainties of valuation, the values reflected in the financial statements may materially differ from the value received upon actual sale of those investments.
B. Other Risks
Index Risk. Unlike many investment companies, the Funds do not utilize an investing strategy that seeks returns in excess of each Fund's respective Underlying Index. Therefore, a Fund would not necessarily buy or sell a security unless that security is added or removed, respectively, from its respective Underlying Index, even if that security generally is underperforming.
Equity Risk. Equity risk is the risk that the value of the securities a Fund holds will fall due to general market and economic conditions, perceptions regarding the industries in which the issuers of securities a Fund holds participate or factors relating to specific companies in which a Fund invests. For example, an adverse event, such as an unfavorable earnings report, may depress the value of securities a Fund holds; the price of securities may be particularly sensitive to general movements in the stock market; or a drop in the
82
Notes to Financial Statements (Continued)
PowerShares Exchange-Traded Fund Trust
April 30, 2013
stock market may depress the price of most or all of the securities a Fund holds. In addition, securities of an issuer in a Fund's portfolio may decline in price if the issuer fails to make anticipated dividend payments because, among other reasons, the issuer of the security experiences a decline in its financial condition.
Industry Concentration Risk. In following its methodology, each Fund's Underlying Index from time to time may be concentrated to a significant degree in securities of issuers located in a single industry or a sector. To the extent that an Underlying Index concentrates in the securities of issuers in a particular industry or sector, each Fund will also concentrate its investments to approximately the same extent. By concentrating its investments in an industry or sector, a Fund may face more risks than if it were diversified broadly over numerous industries or sectors. In addition, at times, an industry or sector may be out of favor and underperform other industries or the market as a whole. Any factors detrimental to the performance of such industry or sector will disproportionately impact a Fund's NAV.
Non-Diversified Fund Risk. Because each Fund is non-diversified and can invest a greater portion of its assets in securities of individual issuers than diversified funds, changes in the market value of a single investment could cause greater fluctuations in Share price than would occur in a diversified fund. This may increase a Fund's volatility and cause the performance of a relatively small number of issuers to have a greater impact on a Fund's performance.
Non-Correlation Risk. Each Fund's return may not match the return of its Underlying Index for a number of reasons. For example, each Fund incurs operating expenses not applicable to its 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 its Underlying Index. In addition, the performance of each Fund and its Underlying Index may vary due to asset valuation differences and differences between each Fund's portfolio and its Underlying Index resulting from legal restrictions, cost or liquidity constraints.
Small and Medium Capitalization Company Risk. Investing in securities of small and medium capitalization companies involves greater risk than customarily is associated with investing in larger, more established companies. These companies' securities may be more volatile and less liquid than those of more established companies. These securities may have returns that vary, sometimes significantly, from the overall securities market. Often small and medium capitalization companies and the industries in which they focus are still evolving and, as a result, they may be more sensitive to changing market conditions.
C. Federal Income Taxes
Each Fund intends to comply with the provisions of the Internal Revenue Code of 1986, as amended (the "Internal Revenue Code"), applicable to regulated investment companies and to 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 recorded in the financial statements.
Income and capital gain distributions are determined in accordance with federal income tax regulations, which may differ from GAAP. These timing 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 U.S. federal tax returns and tax returns in 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.
83
Notes to Financial Statements (Continued)
PowerShares Exchange-Traded Fund Trust
April 30, 2013
D. Investment Transactions and Investment Income
Investment transactions are accounted for on a trade date basis. Realized gains and losses from the sale or disposition of securities are computed on the specific identified cost basis. Interest income is recorded on the accrual basis. Dividend income (net of withholding tax, if any) is recorded on the ex-dividend date. Dividends and interest received by a 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.
Corporate actions (including cash dividends) are recorded net of non-reclaimable foreign tax withholdings on the ex-dividend date.
E. Expenses
Expenses of the Trust that are directly identifiable to a specific Fund are applied to that Fund. Expenses of the Trust that 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 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 related to its respective Underlying Index, any distribution fees or expenses, litigation expenses, fees payable to the Trust's Board members who are not "interested persons" (as defined in the 1940 Act) of the Trust (the "Independent Trustees") or Invesco PowerShares Capital Management LLC (the "Adviser"), expenses incurred in connection with the Board members' services, including travel expenses and legal fees of counsel for the Independent Trustees, acquired fund fees and expenses, if any, and extraordinary expenses.
F. Dividends and Distributions to Shareholders
Each Fund declares and pays dividends from net investment income, if any, to its shareholders quarterly and records such dividends on ex-dividend date. Generally, each Fund distributes net realized taxable capital gains, if any, annually in cash and records them on ex-dividend date. Such distributions on a tax basis are determined in conformity with federal income tax regulations, which may differ from GAAP. 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. Change in Accounting Policy – Equalization
The Funds previously followed the accounting practice known as equalization. Equalization accounting is utilized for book purposes to keep the continuing shareholders' per share equity in undistributed net investment income from being affected by the continuous sales and redemptions of capital shares. During the fiscal year ended April 30, 2013, all Funds discontinued the practice of equalization accounting for book purposes. The prior period financial statements have been restated to reflect the accounting change.
The change in policy has been accounted for in accordance with ASC 250 "Accounting Changes and Error Corrections." The change was implemented for consistent application of book and tax treatment related to the Funds' distributions. The result of the policy change did not have an impact on the Funds' net assets, net increase/decrease in net assets resulting from operations or per share net asset value. Additionally, the change does not have an impact on the amount or tax character of a Fund's distributions to shareholders or net asset value total return.
84
Notes to Financial Statements (Continued)
PowerShares Exchange-Traded Fund Trust
April 30, 2013
For financial reporting purposes, the amounts were reported in the Statements of Changes in Net Assets as "Undistributed net investment income (loss) included in the price of units issued and redeemed" as a component of the "Net increase (decrease) in net assets resulting from operations" with an offsetting amount included in "Net income (loss) equalization" included in the subtotal "Net increase (decrease) in net assets resulting from share transactions." The amount of equalization charges or credits previously reported and the amount in the current period had the change not been made were as follows:
Statements of Changes in Net Assets | |||||||||||
Net income (loss) equalization* | |||||||||||
For the year ended April 30, 2013 | For the year ended April 30, 2012 | ||||||||||
Dynamic Biotechnology & Genome Portfolio | $ | (12,963 | ) | $ | (116,365 | ) | |||||
Dynamic Building & Construction Portfolio | (927,450 | ) | (57,393 | ) | |||||||
Dynamic Energy Exploration & Production Portfolio | 67,239 | (1,590 | ) | ||||||||
Dynamic Food & Beverage Portfolio | (6,728 | ) | (372,016 | ) | |||||||
Dynamic Leisure and Entertainment Portfolio | 141,861 | (155,093 | ) | ||||||||
Dynamic Media Portfolio | (143,014 | ) | (56,706 | ) | |||||||
Dynamic Networking Portfolio | 213,389 | (332,128 | ) | ||||||||
Dynamic Oil & Gas Services Portfolio | 68,763 | 39,495 | |||||||||
Dynamic Pharmaceuticals Portfolio | 62,352 | 266,249 | |||||||||
Dynamic Retail Portfolio | (360,412 | ) | 486,643 | ||||||||
Dynamic Semiconductors Portfolio | 20,234 | 833 | |||||||||
Dynamic Software Portfolio | 26,593 | (17,484 | ) |
* An equal offsetting amount was made to the operations section of the Statements of Changes in Net Assets.
The per share impact of the net equalization charges and credits disclosed in previous financial statements and the amount in the current period had the change not been made were as follows:
Financial Highlights | |||||||||||||||||||||||
For the Year Ended April 30, | |||||||||||||||||||||||
2013 | 2012 | 2011 | 2010 | 2009 | |||||||||||||||||||
Dynamic Biotechnology & Genome Portfolio | $ | 0.00 | (a) | $ | 0.01 | $ | 0.00 | (a) | $ | (0.01 | ) | $ | (0.01 | ) | |||||||||
Dynamic Building & Construction Portfolio | 0.28 | 0.02 | 0.03 | (0.00 | )(a) | 0.05 | |||||||||||||||||
Dynamic Energy Exploration & Production Portfolio | (0.02 | ) | 0.00 | (a) | (0.00 | )(a) | (0.00 | )(a) | 0.00 | (a) | |||||||||||||
Dynamic Food & Beverage Portfolio | 0.00 | (a) | 0.04 | 0.02 | (0.06 | ) | 0.04 | ||||||||||||||||
Dynamic Leisure and Entertainment Portfolio | (0.05 | ) | 0.06 | 0.05 | (0.44 | ) | (0.04 | ) | |||||||||||||||
Dynamic Media Portfolio | 0.02 | 0.01 | (0.01 | ) | (0.12 | ) | 0.05 | ||||||||||||||||
Dynamic Networking Portfolio | (0.11 | ) | 0.08 | 0.02 | 0.02 | 0.11 | |||||||||||||||||
Dynamic Oil & Gas Services Portfolio | (0.01 | ) | (0.00 | )(a) | 0.01 | (0.00 | )(a) | 0.00 | (a) | ||||||||||||||
Dynamic Pharmaceuticals Portfolio | (0.01 | ) | (0.04 | ) | (0.01 | ) | (0.04 | ) | 0.00 | (a) | |||||||||||||
Dynamic Retail Portfolio | 0.19 | (0.29 | ) | 0.13 | 0.10 | (0.17 | ) | ||||||||||||||||
Dynamic Semiconductors Portfolio | (0.02 | ) | (0.00 | )(a) | 0.00 | (a) | (0.01 | ) | (0.01 | ) | |||||||||||||
Dynamic Software Portfolio | (0.02 | ) | 0.01 | 0.01 | 0.00 | (a) | 0.02 |
(a) Amount represents less than $0.005.
85
Notes to Financial Statements (Continued)
PowerShares Exchange-Traded Fund Trust
April 30, 2013
H. Securities Lending
Dynamic Media Portfolio may lend portfolio securities having a market value up to one-third of the Fund's total assets. Such loans are secured by cash collateral equal to no less than 102% of the market value of the loaned securities determined daily by the securities lending provider. Cash collateral received in connection with these loans is invested in an affiliated money market fund and is shown as such on the Schedule of Investments. It is the policy of the Fund to obtain additional collateral from or return excess collateral to the borrower by the end of the next business day, following the valuation date of the securities loaned. Therefore, the value of the collateral held may be temporarily less than the value of the securities on loan. Lending securities entails a risk of loss to a Fund, if and to the extent that, the market value of the securities loaned were to increase, and the borrower did not increase the collateral accordingly, and the borrower fails to return the securities. Upon the failure of the borrower to return the securities, collateral may be liquidated and the securities may be purchased on the open market to replace the loaned securities. A Fund could experience delays and costs in gaining access to the collateral. A Fund bears the risk of any deficiency in the amount of the collateral available for return to the borrower due to any loss on the collateral invested. Dividends received on cash collateral investments for securities lending transactions, which are net of compensation to counterparties, are included in Securities lending income on the Statements of Operations. The aggregate value of securities out on loan is shown on the Statements of Assets and Liabilities, if any.
Note 3. Investment Advisory Agreement and Other Agreements
The Trust has entered into an Investment Advisory Agreement with the Adviser pursuant to which the Adviser has overall responsibility 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 has agreed to pay the Adviser an annual fee of 0.50% of the Fund's average daily net assets.
The Adviser has entered into an Amended and Restated Excess Expense Agreement (the "Expense Agreement") with the Trust, pursuant to which the Adviser has agreed to waive fees and/or pay Fund expenses to the extent necessary to prevent the operating expenses (excluding interest expenses, brokerage commissions and other trading expenses, sub-licensing fees, offering costs, taxes, acquired fund fees and expenses, if any, and extraordinary expenses) of each Fund from exceeding 0.60% of the Fund's average daily net assets per year (the "Expense Cap"), through at least August 31, 2014. Offering costs excluded from the Expense Cap are: (a) initial legal fees pertaining to the Funds' Shares offered for sale; (b) initial Securities and Exchange Commission and state registration fees; and (c) initial fees paid to be listed on an exchange.
The Expense Agreement provides that the fees waived or expenses borne by the Adviser are subject to recapture by the Adviser for up to three years, but no recapture payment will be made by a Fund if it would result in the Fund exceeding its Expense Cap as specified above.
86
Notes to Financial Statements (Continued)
PowerShares Exchange-Traded Fund Trust
April 30, 2013
The amounts available for potential future recapture by the Adviser under the Expense Agreement and the expiration schedule at April 30, 2013 are as follows:
Total Potential Recapture Amounts | 04/30/14 | 04/30/15 | 04/30/16 | ||||||||||||||||
Dynamic Biotechnology & Genome Portfolio | $ | 17,548 | $ | — | $ | 17,548 | $ | — | |||||||||||
Dynamic Building & Construction Portfolio | 255,727 | 113,361 | 107,359 | 35,007 | |||||||||||||||
Dynamic Energy Exploration & Production Portfolio | 185,251 | 92,366 | 61,176 | 31,709 | |||||||||||||||
Dynamic Food & Beverage Portfolio | 86,186 | 75,694 | 10,492 | — | |||||||||||||||
Dynamic Leisure and Entertainment Portfolio | 217,066 | 89,979 | 87,312 | 39,775 | |||||||||||||||
Dynamic Media Portfolio | 89,828 | 63,137 | 24,252 | 2,439 | |||||||||||||||
Dynamic Networking Portfolio | 172,179 | 71,940 | 47,952 | 52,287 | |||||||||||||||
Dynamic Oil & Gas Services Portfolio | 118 | — | 118 | — | |||||||||||||||
Dynamic Pharmaceuticals Portfolio | 18,411 | 7,946 | 10,465 | — | |||||||||||||||
Dynamic Retail Portfolio | 267,390 | 123,788 | 87,876 | 55,726 | |||||||||||||||
Dynamic Semiconductors Portfolio | 286,400 | 113,566 | 99,564 | 73,270 | |||||||||||||||
Dynamic Software Portfolio | 222,017 | 88,386 | 81,932 | 51,699 |
The Trust has entered into a Distribution Agreement with Invesco Distributors, Inc. (the "Distributor"), which serves as the distributor of Creation Units for each Fund. The Distributor does not maintain a secondary market in the Shares. The Funds are not charged any fees pursuant to the Distribution Agreement. The Distributor is an affiliate of the Adviser.
The Adviser has entered into a licensing agreement for each Fund with NYSE Arca, Inc. (the "Licensor"). Each Underlying Index name trademark is owned by the Licensor. These trademarks have been licensed to the Adviser for use with the Funds. Each Fund is entitled to use its Underlying Index pursuant to the Trust's sub-licensing agreement with the Adviser. The Funds are required to pay the sub-licensing fees that are shown on the Statements of Operations. The Funds are not sponsored, endorsed, sold or promoted by the Licensor and the Licensor makes no representation regarding the advisability of investing in any of these Funds.
The Trust has entered into service agreements whereby The Bank of New York Mellon, a wholly-owned subsidiary of The Bank of New York Mellon Corporation, serves as the administrator, custodian, fund accountant and transfer agent for each Fund.
Note 4. Additional Valuation Information
GAAP defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date, under current market conditions. GAAP establishes a hierarchy that prioritizes the inputs to valuation methods, giving the highest priority to readily available unadjusted quoted prices in an active market for identical assets (Level 1) and the lowest priority to significant unobservable inputs (Level 3), generally when market prices are not readily available or are unreliable. Based on the valuation inputs, the securities or other
87
Notes to Financial Statements (Continued)
PowerShares Exchange-Traded Fund Trust
April 30, 2013
investments are tiered into one of three levels. Changes in valuation methods may result in transfers in or out of an investment's assigned level:
Level 1 – Prices are determined using quoted prices in an active market for identical assets.
Level 2 – Prices are determined using other significant observable inputs. Observable inputs are inputs that other market participants may use in pricing a security. These may include quoted prices for similar securities, interest rates, prepayment speeds, credit risk, yield curves, loss severities, default rates, discount rates, volatilities and others.
Level 3 – Prices are determined using significant unobservable inputs. In situations where quoted prices or observable inputs are unavailable (for example, when there is little or no market activity for an investment at the end of the period), unobservable inputs may be used. Unobservable inputs reflect the Fund's own assumptions about the factors market participants would use in determining fair value of the securities or instruments and would be based on the best available information.
As of April 30, 2013, the securities in each Fund were valued based on Level 1 inputs (see the Schedule of Investments for security categories). The level assigned to the securities valuations may not be an indication of the risk or liquidity associated with investing in those securities. Because of the inherent uncertainties of valuation, the values reflected in the financial statements may materially differ from the value received upon actual sale of those investments.
Note 5. Distributions to Shareholders and Tax Components of Net Assets
Tax Character of Distributions to Shareholders Paid During the Fiscal Years Ended April 30, 2013 and 2012:
2013 | 2012 | ||||||||||
Ordinary Income | Ordinary Income | ||||||||||
Dynamic Biotechnology & Genome Portfolio | $ | — | $ | — | |||||||
Dynamic Building & Construction Portfolio | 322,061 | 32,808 | |||||||||
Dynamic Energy Exploration & Production Portfolio | 1,748,096 | 1,050,119 | |||||||||
Dynamic Food & Beverage Portfolio | 1,927,726 | 2,109,710 | |||||||||
Dynamic Leisure and Entertainment Portfolio | 444,843 | 312,008 | |||||||||
Dynamic Media Portfolio | 917,905 | 855,476 | |||||||||
Dynamic Networking Portfolio | 93,171 | — | |||||||||
Dynamic Oil & Gas Services Portfolio | 143,856 | 18,614 | |||||||||
Dynamic Pharmaceuticals Portfolio | 4,861,110 | 1,193,747 | |||||||||
Dynamic Retail Portfolio | 1,304,529 | 208,592 | |||||||||
Dynamic Semiconductors Portfolio | 140,761 | 53,536 | |||||||||
Dynamic Software Portfolio | — | — |
88
Notes to Financial Statements (Continued)
PowerShares Exchange-Traded Fund Trust
April 30, 2013
Tax Components of Net Assets at Fiscal Year-End:
Undistributed Ordinary Income | Temporary Book/Tax Differences | Net Unrealized Appreciation (Depreciation) – Investment Securities | Capital Loss Carryforward | Late-Year Ordinary/ Post-October Capital Losses Deferrals* | Shares of Beneficial Interest | Total Net Assets | |||||||||||||||||||||||||
Dynamic Biotechnology & Genome Portfolio** | $ | — | $ | (13,958 | ) | $ | 38,928,274 | $ | (162,640,426 | ) | $ | (2,253,131 | ) | $ | 281,432,624 | $ | 155,453,383 | ||||||||||||||
Dynamic Building & Construction Portfolio** | — | (7,950 | ) | 12,480,029 | (18,482,331 | ) | (64,599 | ) | 110,195,676 | 104,120,825 | |||||||||||||||||||||
Dynamic Energy Exploration & Production Portfolio | 274,195 | (9,925 | ) | 10,445,982 | (42,997,791 | ) | (2,653,449 | ) | 139,367,965 | 104,426,977 | |||||||||||||||||||||
Dynamic Food & Beverage Portfolio | 221,879 | (10,549 | ) | 19,161,863 | (43,968,001 | ) | (2,225,659 | ) | 263,046,789 | 236,226,322 | |||||||||||||||||||||
Dynamic Leisure and Entertainment Portfolio | — | (7,801 | ) | 13,566,787 | (20,200,496 | ) | — | 92,406,852 | 85,765,342 | ||||||||||||||||||||||
Dynamic Media Portfolio | 68,500 | (9,149 | ) | 21,621,590 | (42,254,256 | ) | (2,140,125 | ) | 173,501,840 | 150,788,400 | |||||||||||||||||||||
Dynamic Networking Portfolio | 230,614 | (8,260 | ) | (325,992 | ) | (31,061,926 | ) | (2,323,742 | ) | 63,488,922 | 29,999,616 | ||||||||||||||||||||
Dynamic Oil & Gas Services Portfolio | 86,715 | (15,559 | ) | (2,647,504 | ) | (194,452,182 | ) | (4,526,615 | ) | 318,527,853 | 116,972,708 | ||||||||||||||||||||
Dynamic Pharmaceuticals Portfolio | 547,385 | (12,316 | ) | 82,622,315 | (25,395,770 | ) | — | 410,543,719 | 468,305,333 | ||||||||||||||||||||||
Dynamic Retail Portfolio | 45,479 | (7,578 | ) | 3,447,799 | (16,361,545 | ) | (1,439,625 | ) | 39,065,790 | 24,750,320 | |||||||||||||||||||||
Dynamic Semiconductors Portfolio | 52,648 | (8,181 | ) | 1,143,306 | (52,914,793 | ) | (1,249,533 | ) | 69,720,923 | 16,744,370 | |||||||||||||||||||||
Dynamic Software Portfolio | — | (8,388 | ) | 7,608,391 | (23,654,779 | ) | (1,478,544 | ) | 65,790,527 | 48,257,207 |
* Includes net capital losses incurred after October 31("Post-October Capital Losses") and the combination of ordinary losses incurred after December 31 within the taxable year and specified losses incurred after October 31 within the taxable year ("Late-Year Ordinary Losses"), that are deemed to arise on the first business day of each Fund's next taxable year.
** The Dynamic Biotechnology & Genome Portfolio and Dynamic Building & Construction Portfolio incurred and will elect to defer Late-Year Ordinary Losses of $129,885 and $64,599 and Post-October Capital Losses of $2,123,246 and $0, respectively.
Capital loss carryforward is calculated and reported as of a specific date. Results of transactions and other activity after that date may affect the amount of capital loss carryforward actually available for the Funds to utilize. The Regulated Investment Company Modernization Act of 2010 eliminated the eight-year carryover period for capital losses that arise in taxable years beginning after its enactment date of December 22, 2010. Consequently, these capital losses can be carried forward for an unlimited period. However, capital losses with an expiration period may not be used to offset capital gains until all net capital losses without an expiration date have been utilized. Additionally, post-enactment capital loss carryforwards will retain their character as either short-term or long-term capital losses instead of as short-term capital losses as under prior law. The ability to utilize capital loss carryforward in the future may be limited under Internal Revenue Code rules and related regulations based on the results of future transactions.
89
Notes to Financial Statements (Continued)
PowerShares Exchange-Traded Fund Trust
April 30, 2013
The following Funds have a capital loss carryforward as of April 30, 2013, which expires as follows:
Post-effective no expiration | |||||||||||||||||||||||||||||||||||||||||||
2013 | 2014 | 2015 | 2016 | 2017 | 2018 | 2019 | Short-term | Long-term | Total* | ||||||||||||||||||||||||||||||||||
Dynamic Biotechnology & Genome Portfolio | $ | — | $ | 321,497 | $ | 19,612,223 | $ | 15,818,255 | $ | 34,286,844 | $ | 50,397,332 | $ | 12,898,182 | $ | 29,306,093 | $ | — | $ | 162,640,426 | |||||||||||||||||||||||
Dynamic Building & Construction Portfolio | — | — | 2,263,182 | 742,893 | 2,843,349 | 3,001,058 | 6,653,613 | 2,700,915 | 277,321 | 18,482,331 | |||||||||||||||||||||||||||||||||
Dynamic Energy Exploration & Production Portfolio | — | — | 285,311 | 3,232,521 | 7,646,917 | 21,471,013 | 1,361,799 | 7,985,637 | 1,014,593 | 42,997,791 | |||||||||||||||||||||||||||||||||
Dynamic Food & Beverage Portfolio | — | — | 239,185 | 1,260,041 | 7,585,250 | 10,245,302 | — | 23,852,022 | 786,201 | 43,968,001 | |||||||||||||||||||||||||||||||||
Dynamic Leisure and Entertainment Portfolio | — | 751,908 | 1,611,839 | 2,111,801 | 2,895,936 | 2,889,449 | 2,356,106 | 7,583,457 | — | 20,200,496 | |||||||||||||||||||||||||||||||||
Dynamic Media Portfolio | — | 545,973 | 3,187,134 | 2,505,039 | 4,930,761 | 5,161,647 | 6,294,489 | 18,655,535 | 973,678 | 42,254,256 | |||||||||||||||||||||||||||||||||
Dynamic Networking Portfolio | — | 383,187 | 1,939,441 | 1,064,275 | 1,975,581 | 512,618 | 730,670 | 18,934,345 | 5,521,809 | 31,061,926 | |||||||||||||||||||||||||||||||||
Dynamic Oil & Gas Services Portfolio | — | — | 15,026,862 | 7,909,602 | 24,680,663 | 85,028,926 | 35,877,910 | 18,344,489 | 7,583,730 | 194,452,182 | |||||||||||||||||||||||||||||||||
Dynamic Pharmaceuticals Portfolio | 164,751 | 66,659 | 644,797 | 1,727,610 | 2,128,715 | 15,494,879 | 1,618,918 | 2,355,738 | 1,193,703 | 25,395,770 | |||||||||||||||||||||||||||||||||
Dynamic Retail Portfolio | — | — | 937,070 | 1,908,967 | 2,427,604 | 1,816,180 | 2,176,015 | 6,951,511 | 144,198 | 16,361,545 | |||||||||||||||||||||||||||||||||
Dynamic Semiconductors Portfolio | — | 271,588 | 9,158,832 | 10,196,415 | 14,001,359 | 10,902,954 | 2,120,823 | 5,209,256 | 1,053,566 | 52,914,793 | |||||||||||||||||||||||||||||||||
Dynamic Software Portfolio | — | 108,427 | 3,017,278 | 1,542,190 | 7,095,351 | 2,938,722 | 3,242,208 | 5,710,603 | — | 23,654,779 |
* Capital loss carryforward as of the date listed above is reduced for limitations, if any, to the extent required by the Internal Revenue Code.
Note 6. Investment Transactions
For the fiscal year ended April 30, 2013, 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 | ||||||||||
Dynamic Biotechnology & Genome Portfolio | $ | 72,427,327 | $ | 71,491,675 | |||||||
Dynamic Building & Construction Portfolio | 54,780,535 | 54,885,740 | |||||||||
Dynamic Energy Exploration & Production Portfolio | 62,212,428 | 60,757,220 | |||||||||
Dynamic Food & Beverage Portfolio | 127,502,963 | 127,385,735 | |||||||||
Dynamic Leisure and Entertainment Portfolio | 58,945,660 | 58,255,789 | |||||||||
Dynamic Media Portfolio | 87,683,583 | 86,770,710 | |||||||||
Dynamic Networking Portfolio | 33,723,404 | 32,980,013 | |||||||||
Dynamic Oil & Gas Services Portfolio | 87,683,314 | 87,160,696 | |||||||||
Dynamic Pharmaceuticals Portfolio | 83,150,065 | 79,572,799 | |||||||||
Dynamic Retail Portfolio | 40,929,512 | 41,265,863 | |||||||||
Dynamic Semiconductors Portfolio | 16,358,568 | 16,070,722 | |||||||||
Dynamic Software Portfolio | 45,973,115 | 45,668,241 |
90
Notes to Financial Statements (Continued)
PowerShares Exchange-Traded Fund Trust
April 30, 2013
For the fiscal year ended April 30, 2013, in-kind transactions associated with creations and redemptions were as follows:
Securities Received | Securities Delivered | ||||||||||
Dynamic Biotechnology & Genome Portfolio | $ | 79,873,432 | $ | 95,616,559 | |||||||
Dynamic Building & Construction Portfolio | 118,837,587 | 62,986,034 | |||||||||
Dynamic Energy Exploration & Production Portfolio | 88,494,163 | 66,004,341 | |||||||||
Dynamic Food & Beverage Portfolio | 214,856,253 | 170,399,923 | |||||||||
Dynamic Leisure and Entertainment Portfolio | 99,604,920 | 85,655,729 | |||||||||
Dynamic Media Portfolio | 169,026,720 | 190,008,085 | |||||||||
Dynamic Networking Portfolio | 13,058,391 | 56,464,722 | |||||||||
Dynamic Oil & Gas Services Portfolio | 149,760,376 | 189,402,442 | |||||||||
Dynamic Pharmaceuticals Portfolio | 213,470,129 | 101,902,219 | |||||||||
Dynamic Retail Portfolio | 66,135,018 | 118,949,413 | |||||||||
Dynamic Semiconductors Portfolio | 11,531,661 | 15,519,322 | |||||||||
Dynamic Software Portfolio | 37,235,560 | 44,198,110 |
Gains (losses) on in-kind transactions are generally not considered taxable gains (losses) for federal income tax purposes.
At April 30, 2013, the aggregate cost and the net unrealized appreciation (depreciation) of investments for tax purposes were as follows:
Cost | Net Unrealized Appreciation (Depreciation) | Gross Unrealized Appreciation | Gross Unrealized (Depreciation) | ||||||||||||||||
Dynamic Biotechnology & Genome Portfolio | $ | 116,727,307 | $ | 38,928,274 | $ | 42,030,651 | $ | (3,102,377 | ) | ||||||||||
Dynamic Building & Construction Portfolio | 91,734,854 | 12,480,029 | 13,400,898 | (920,869 | ) | ||||||||||||||
Dynamic Energy Exploration & Production Portfolio | 94,129,833 | 10,445,982 | 14,455,437 | (4,009,455 | ) | ||||||||||||||
Dynamic Food & Beverage Portfolio | 217,085,515 | 19,161,863 | 19,880,346 | (718,483 | ) | ||||||||||||||
Dynamic Leisure and Entertainment Portfolio | 72,321,852 | 13,566,787 | 13,741,610 | (174,823 | ) | ||||||||||||||
Dynamic Media Portfolio | 146,370,617 | 21,621,590 | 22,176,183 | (554,593 | ) | ||||||||||||||
Dynamic Networking Portfolio | 30,424,893 | (325,992 | ) | 3,095,085 | (3,421,077 | ) | |||||||||||||
Dynamic Oil & Gas Services Portfolio | 119,720,156 | (2,647,504 | ) | 7,093,949 | (9,741,453 | ) | |||||||||||||
Dynamic Pharmaceuticals Portfolio | 385,820,199 | 82,622,315 | 93,769,557 | (11,147,242 | ) | ||||||||||||||
Dynamic Retail Portfolio | 21,380,640 | 3,447,799 | 3,698,652 | (250,853 | ) | ||||||||||||||
Dynamic Semiconductors Portfolio | 15,669,504 | 1,143,306 | 1,629,109 | (485,803 | ) | ||||||||||||||
Dynamic Software Portfolio | 40,751,954 | 7,608,391 | 7,759,829 | (151,438 | ) |
91
Notes to Financial Statements (Continued)
PowerShares Exchange-Traded Fund Trust
April 30, 2013
Note 7. Reclassification of Permanent Differences
Primarily as a result of differing book/tax treatment of in-kind transactions on April 30, 2013, amounts were reclassified between undistributed net investment income (loss), undistributed net realized gain (loss) and shares of beneficial interest. These reclassifications had no effect on the net assets of each Fund. For the fiscal year ended April 30, 2013, the reclassifications were as follows:
Undistributed Net Investment Income (Loss) | Undistributed Net Realized Gain (Loss) | Shares of Beneficial Interest | |||||||||||||
Dynamic Biotechnology & Genome Portfolio | $ | 263,417 | $ | (21,836,351 | ) | $ | 21,572,934 | ||||||||
Dynamic Building & Construction Portfolio | 9,809 | (9,174,473 | ) | 9,164,664 | |||||||||||
Dynamic Energy Exploration & Production Portfolio | 496,942 | (10,368,285 | ) | 9,871,343 | |||||||||||
Dynamic Food & Beverage Portfolio | — | (17,630,044 | ) | 17,630,044 | |||||||||||
Dynamic Leisure and Entertainment Portfolio | (37,164 | ) | (9,128,646 | ) | 9,165,810 | ||||||||||
Dynamic Media Portfolio | — | (29,803,018 | ) | 29,803,018 | |||||||||||
Dynamic Networking Portfolio | 3,048 | (3,997,033 | ) | 3,993,985 | |||||||||||
Dynamic Oil & Gas Services Portfolio | — | (10,853,184 | ) | 10,853,184 | |||||||||||
Dynamic Pharmaceuticals Portfolio | — | (23,914,760 | ) | 23,914,760 | |||||||||||
Dynamic Retail Portfolio | 179 | (8,250,521 | ) | 8,250,342 | |||||||||||
Dynamic Semiconductors Portfolio | — | (1,984,926 | ) | 1,984,926 | |||||||||||
Dynamic Software Portfolio | 61,859 | (5,747,540 | ) | 5,685,681 |
Note 8. Trustees' Fees
The Funds compensate each Independent Trustee. The Trustee who is an "interested person" (the "Non-Independent Trustee") of the Trust does not receive any Trustees' fees.
The Trust has adopted a deferred compensation plan (the "Plan"). Under the Plan, an Independent Trustee who has executed a Deferred Fee Agreement (a "Participating Trustee") may defer receipt of all or a portion of his compensation ("Deferral Fees"). Such Deferral Fees are deemed to be invested in select PowerShares Funds. The Deferral Fees payable to the Participating Trustee are valued as of the date such Deferral 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 distributions or with declines in the value of the Shares selected.
Note 9. Capital
Shares are created and redeemed by the Trust only in Creation Units of 50,000 Shares. Only Authorized Participants are permitted to purchase or redeem Creation Units from the Funds. Such transactions are generally permitted on an in-kind basis, with a balancing cash component to equate the transaction to the NAV per Share of a 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 eligible for trading by the Authorized Participant or as a result of other market circumstances.
Each Fund may issue Shares in advance of receipt of a basket of securities ("Deposit Securities") subject to various conditions, including a requirement to maintain on deposit with the Trust cash at least equal to 105% of the market value of the missing Deposit Securities. In accordance with each Fund's Participant
92
Notes to Financial Statements (Continued)
PowerShares Exchange-Traded Fund Trust
April 30, 2013
Agreement, Creation Units will be issued to an Authorized Participant, notwithstanding the fact that the corresponding Deposit Securities 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 105%, which the Adviser may change from time to time, of the value of the missing Deposit Securities.
Transactions in a Fund's Shares are disclosed in detail on the Statements of Changes in Net Assets.
Note 10. 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. Each Independent Trustee is also indemnified against certain liabilities arising out of the performance of his duties to the Trust pursuant to an Indemnification Agreement between the Independent Trustee and 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.
93
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, PowerShares Dynamic Biotechnology & Genome Portfolio, PowerShares Dynamic Building & Construction Portfolio, PowerShares Dynamic Energy Exploration & Production Portfolio, PowerShares Dynamic Food & Beverage Portfolio, PowerShares Dynamic Leisure and Entertainment Portfolio, PowerShares Dynamic Media Portfolio, PowerShares Dynamic Networking Portfolio, PowerShares Dynamic Oil & Gas Services Portfolio, PowerShares Dynamic Pharmaceuticals Portfolio, PowerShares Dynamic Retail Portfolio, PowerShares Dynamic Semiconductors Portfolio and PowerShares Dynamic Software Portfolio (each an individual portfolio of PowerShares Exchange-Traded Fund Trust, hereafter referred to as the "Funds") at April 30, 2013, the results of each of their operations for the year then ended, the change in each of their net assets for each of the two years in the period then ended and the financial highlights for each of the five years in the period then ended, 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 Funds' 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, 2013 by correspondence with the custodian and brokers, provide a reasonable basis for our opinion.
As discussed in note 2G of the Notes to the Financial Statements, the Funds changed their accounting policy to discontinue the use of equalization accounting for book purposes.
/s/ PricewaterhouseCoopers LLP
Chicago, IL
June 25, 2013
94
Tax Information
Form 1099-DIV, Form 1042-S and other year-end tax information provide shareholders with actual calendar year amounts that should be included in their tax returns. Shareholders should consult their tax advisers.
The following distribution information is being provided as required by the Internal Revenue Code or to meet a specific state's requirement.
Each Fund designates the following amounts or, if subsequently determined to be different, the maximum amount allowable for its fiscal year ended April 30, 2013:
Federal Income Tax Information
Qualified Dividend Income* | Dividends-received Deduction* | ||||||||||
Dynamic Biotechnology & Genome Portfolio | 0 | % | 0 | % | |||||||
Dynamic Building & Construction Portfolio | 100 | % | 100 | % | |||||||
Dynamic Energy Exploration & Production Portfolio | 100 | % | 100 | % | |||||||
Dynamic Food & Beverage Portfolio | 100 | % | 100 | % | |||||||
Dynamic Leisure and Entertainment Portfolio | 100 | % | 100 | % | |||||||
Dynamic Media Portfolio | 100 | % | 100 | % | |||||||
Dynamic Networking Portfolio | 100 | % | 100 | % | |||||||
Dynamic Oil & Gas Services Portfolio | 100 | % | 100 | % | |||||||
Dynamic Pharmaceuticals Portfolio | 100 | % | 98 | % | |||||||
Dynamic Retail Portfolio | 100 | % | 100 | % | |||||||
Dynamic Semiconductors Portfolio | 100 | % | 100 | % | |||||||
Dynamic Software Portfolio | 0 | % | 0 | % |
* The above percentages are based on ordinary income dividends paid to shareholders during the Fund's fiscal year.
95
Trustees and Officers
The Independent Trustees, the Non-Independent 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 a Trustee are shown below.
The Trustees and officers information is current as of April 30, 2013.
Name, Address and Age of Independent Trustees | 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 Complex** Overseen by Independent Trustees | Other Directorships Held by Independent Trustees During the Past 5 Years | ||||||||||||||||||
Ronn R. Bagge (55) c/o Invesco PowerShares Capital Management LLC 301 West Roosevelt Road Wheaton, IL 60187 | Trustee | Since 2003 | Founder and Principal, YQA Capital Management LLC (1998-Present); formerly Owner/CEO of Electronic Dynamic Balancing Co., Inc. (high-speed rotating equipment service provider). | 113 | None | ||||||||||||||||||
Todd J. Barre (55) c/o Invesco PowerShares Capital Management LLC 301 West Roosevelt Road Wheaton, IL 60187 | Trustee | Since 2010 | Assistant Professor of Business, Trinity Christian College (2010-Present); formerly, Vice President and Senior Investment Strategist (2001-2008), Director of Open Architecture and Trading (2007-2008), Head of Fundamental Research (2004-2007) and Vice President and Senior Fixed Income Strategist (1994-2001), BMO Financial Group/Harris Private Bank. | 113 | None |
* This is the date the Independent Trustee began serving the Trust. Each Trustee serves an indefinite term, until his successor is elected.
** Fund Complex includes all open-end funds (including all of their portfolios) advised by the Adviser. At May 9, 2013, the Fund Complex consisted of the Trust's 55 portfolios and three other exchange-traded fund trusts with 58 portfolios advised by the Adviser.
96
Trustees and Officers (Continued)
Name, Address and Age of Independent Trustees | 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 Complex** Overseen by Independent Trustees | Other Directorships Held by Independent Trustees During the Past 5 Years | ||||||||||||||||||
Marc M. Kole (52) c/o Invesco PowerShares Capital Management LLC 301 West Roosevelt Road Wheaton, IL 60187 | Trustee | Since 2006 | Formerly, Chief Financial Officer, Hope Network (social services) (2008-2012); Assistant Vice President and Controller, Priority Health (health insurance) (2005-2008); Senior Vice President of Finance, United Healthcare (2004-2005); Senior Vice President of Finance, Oxford Health Plans (2000-2004). | 113 | None | ||||||||||||||||||
Yung Bong Lim (48) c/o Invesco PowerShares Capital Management LLC 301 West Roosevelt Road Wheaton, IL 60187 | Trustee | Since 2013 | Managing Partner, Residential Dynamics Group LLC (2008-Present); formerly, Managing Director, Citadel Investment Group, L.L.C. (1999-2007). | 58 | None | ||||||||||||||||||
Philip M. Nussbaum (51) c/o Invesco PowerShares Capital Management LLC 301 West Roosevelt Road Wheaton, IL 60187 | Trustee | Since 2003 | Chairman, Performance Trust Capital Partners (2004-Present). | 113 | None |
* This is the date the Independent Trustee began serving the Trust. Each Trustee serves an indefinite term, until his successor is elected.
** Fund Complex includes all open-end funds (including all of their portfolios) advised by the Adviser. At May 9, 2013, the Fund Complex consisted of the Trust's 55 portfolios and three other exchange-traded fund trusts with 58 portfolios advised by the Adviser.
97
Trustees and Officers (Continued)
Name, Address and Age of Independent Trustees | 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 Complex** Overseen by Independent Trustees | Other Directorships Held by Independent Trustees During the Past 5 Years | ||||||||||||||||||
Gary R. Wicker (51) c/o Invesco PowerShares Capital Management LLC 301 West Roosevelt Road Wheaton, IL 60187 | Trustee | Since 2013 | Senior Vice President of Global Finance and Chief Financial Officer at RBC Ministries (publishing company) (since 2013); formerly, Executive Vice President and Chief Financial Officer, Zondervan Publishing (A division of Harper Collins/NewsCorp) (2007-2012); Senior Vice President and Group Controller (2005-2006), Senior Vice President and Chief Financial Officer (2003-2004), Chief Financial Officer (2001-2003), Vice President, Finance and Controller (1999-2001) and Assistant Controller (1997-1999), divisions of The Thomson Corporation (information services provider). | 58 | None |
* This is the date the Independent Trustee began serving the Trust. Each Trustee serves an indefinite term, until his successor is elected.
** Fund Complex includes all open-end funds (including all of their portfolios) advised by the Adviser. At May 9, 2013, the Fund Complex consisted of the Trust's 55 portfolios and three other exchange-traded fund trusts with 58 portfolios advised by the Adviser.
98
Trustees and Officers (Continued)
Name, Address and Age of Independent Trustees | 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 Complex** Overseen by Independent Trustees | Other Directorships Held by Independent Trustees During the Past 5 Years | ||||||||||||||||||
Donald H. Wilson (53) c/o Invesco PowerShares Capital Management LLC 301 West Roosevelt Road Wheaton, IL 60187 | Chairman of the Board and Trustee | Chairman since 2012; Trustee since 2006 | Chairman and Chief Executive Officer, Stone Pillar Advisers, Ltd. (2010-Present); formerly, Chief Operating Officer, AMCORE Financial, Inc. (bank holding company) (2007-2009); Executive Vice President and Chief Financial Officer, AMCORE Financial, Inc. (2006-2007); Senior Vice President and Treasurer, Marshall & Ilsley Corp. (bank holding company) (1995-2006). | 113 | None |
* This is the date the Independent Trustee began serving the Trust. Each Trustee serves an indefinite term, until his successor is elected.
** Fund Complex includes all open-end funds (including all of their portfolios) advised by the Adviser. At May 9, 2013, the Fund Complex consisted of the Trust's 55 portfolios and three other exchange-traded fund trusts with 58 portfolios advised by the Adviser.
99
Trustees and Officers (Continued)
The Non-Independent Trustee and the 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 Non-Independent Trustee and the other directorships, if any, held by the Non-Independent Trustee are shown below.
Name, Address and Age of Non-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 Complex** Overseen by Non- Independent Trustee | Other Directorships Held by Non-Independent Trustee During the Past 5 Years | ||||||||||||||||||
Kevin M. Carome (57) Invesco Ltd. Two Peachtree Pointe 1555 Peachtree St., N.E., Suite 1800 Atlanta, GA 30309 | Trustee | Since 2010 | Senior Managing Director, Secretary and General Counsel, Invesco Ltd. (2006-Present); Director, Invesco Advisers, Inc. (2009-Present); formerly, Senior Vice President, Secretary and General Counsel, Invesco Advisers, Inc. (2003-2005); Senior Vice President and General Counsel, Liberty Financial Companies, Inc. (2000-2001); General Counsel of certain investment management subsidiaries of Liberty Financial Companies, Inc. (1998-2000); Associate General Counsel, Liberty Financial Companies, Inc. (1993-1998); Associate, Ropes & Gray LLP. | 113 | None |
* This is the date the Non-Independent Trustee began serving the Trust. Each Trustee serves an indefinite term, until his successor is elected.
** Fund Complex includes all open-end funds (including all of their portfolios) advised by the Adviser. At May 9, 2013, the Fund Complex consisted of the Trust's 55 portfolios and three other exchange-traded fund trusts with 58 portfolios advised by the Adviser.
100
Trustees and Officers (Continued)
Name, Address and Age of Executive Officer | Position(s) Held with Trust | Length of Time Served* | Principal Occupation(s) During Past 5 Years | ||||||||||||
Andrew Schlossberg (39) Invesco Management Group, Inc. 11 Greenway Plaza Suite 1000 Houston, TX 77046 | President | Since 2009 | Managing Director, U.S. head of business strategy and chief marketing officer for Invesco Ltd. in the United States (2008-Present); Director, Invesco Distributors, Inc. (2012-Present); and Senior Vice President, Invesco Advisers, Inc. (formerly known as Invesco Institutional (N.A.), Inc.) (registered investment adviser) (2009-Present); formerly, Mr. Schlossberg served in multiple roles within Invesco, including head of corporate development, as well as global leadership roles in strategy and product development in the company's North American Institutional and Retirement divisions (2002-2007). | ||||||||||||
Peter Hubbard (32) Invesco PowerShares Capital Management LLC 301 West Roosevelt Road Wheaton, IL 60187 | Vice President | Since 2009 | Vice President and Director of Portfolio Management – Invesco PowerShares Capital Management LLC (2008-Present); formerly, Portfolio Manager, Invesco PowerShares Capital Management LLC (2007-2008); Research Analyst, Invesco PowerShares Capital Management LLC (2005-2007); Research Analyst and Trader, Ritchie Capital, a hedge fund operator (2003-2005). | ||||||||||||
David Warren (55) Invesco Canada Ltd. 5140 Yonge Street Suite 900, Toronto, Ontario M2N 6X7 | Vice President | Since 2009 | Director, Executive Vice President and Chief Financial Officer, Invesco Canada Ltd. (formerly, Invesco Trimark Ltd.) and Chief Administrative Officer, North American Retail, Invesco Ltd. (2007-Present); Senior Vice President, Invesco Management Group, Inc. (2007-Present); Director, Executive Vice President and Chief Financial Officer, Invesco, Inc.; Director, Invesco Canada Holdings Inc.; formerly, Director, Executive Vice President and Chief Financial Officer, Invesco Canada Ltd. (formerly, Invesco Trimark Ltd.) (2000-2006). |
* This is the period for which the Officers began serving the Trust. Each Officer serves an indefinite term, until his or her successor is elected.
101
Trustees and Officers (Continued)
Name, Address and Age of Executive Officer | Position(s) Held with Trust | Length of Time Served* | Principal Occupation(s) During Past 5 Years | ||||||||||||
Sheri Morris (49) Invesco Management Group, Inc. 11 Greenway Plaza Suite 1000 Houston, TX 77046-1173 | Vice President | Since 2012 | Vice President, Treasurer and Principal Financial Officer, The Invesco Funds; Vice President, Invesco Advisers, Inc. (formerly known as Invesco Institutional (N.A.), Inc.) (registered investment adviser) (2009-Present) and Vice President, PowerShares Exchange-Traded Fund Trust, PowerShares Exchange-Traded Fund Trust II, PowerShares India Exchange-Traded Fund Trust and PowerShares Actively Managed Exchange-Traded Fund Trust; formerly, Treasurer, PowerShares Exchange-Traded Fund Trust, PowerShares Exchange-Traded Fund Trust II, PowerShares India Exchange-Traded Fund Trust and PowerShares Actively Managed Exchange-Traded Fund Trust (2012-2013); formerly, Vice President, Invesco Advisers, Inc., Invesco Aim Capital Management, Inc. and Invesco Aim Private Asset Management, Inc.; Assistant Vice President and Assistant Treasurer, The Invesco Funds and Assistant Vice President, Invesco Advisers, Inc., Invesco Aim Capital Management, Inc. and Invesco Aim Private Asset Management, Inc. |
* This is the period for which the Officers began serving the Trust. Each Officer serves an indefinite term, until his or her successor is elected.
102
Trustees and Officers (Continued)
Name, Address and Age of Executive Officer | Position(s) Held with Trust | Length of Time Served* | Principal Occupation(s) During Past 5 Years | ||||||||||||
Steven M. Hill (48) Invesco PowerShares Capital Management LLC 301 West Roosevelt Road Wheaton, IL 60187 | Vice President and Treasurer | Since 2012 Since 2013 | Vice President and Treasurer, PowerShares Exchange-Traded Fund Trust, PowerShares Exchange-Traded Fund Trust II, PowerShares India Exchange-Traded Fund Trust and PowerShares Actively Managed Exchange-Traded Fund Trust (since 2013); Head of Global ETF Administration, Invesco PowerShares Capital Management LLC; formerly, Treasurer, PowerShares Exchange-Traded Fund Trust, PowerShares Exchange-Traded Fund Trust II, PowerShares India Exchange-Traded Fund Trust and PowerShares Actively Managed Exchange-Traded Fund Trust (2011-2012); Senior Managing Director and Chief Financial Officer, Destra Capital Management LLC and its subsidiaries (2010-2011); Chief Financial Officer, Destra Investment Trust and Destra Investment Trust II (2010-2011); Senior Managing Director, Claymore Securities, Inc. (2003-2010); and Chief Financial Officer, Claymore sponsored mutual funds (2003-2010). | ||||||||||||
Christopher Joe (44) Invesco Management Group, Inc. 11 Greenway Plaza Suite 1000 Houston, TX 77046-1173 | Chief Compliance Officer | Since 2012 | U.S. Compliance Director, Invesco, Ltd.; Chief Compliance Officer, Invesco Investment Advisers, LLC (registered investment adviser); formerly, Assistant Fund Accounting Manager, Invesco, Ltd. |
* This is the period for which the Officers began serving the Trust. Each Officer serves an indefinite term, until his or her successor is elected.
103
Trustees and Officers (Continued)
Name, Address and Age of Executive Officer | Position(s) Held with Trust | Length of Time Served* | Principal Occupation(s) During Past 5 Years | ||||||||||||
Anna Paglia (39) Invesco PowerShares Capital Management LLC 301 West Roosevelt Road Wheaton, IL 60187 | Secretary | Since 2011 | Secretary, PowerShares Exchange-Traded Fund Trust, PowerShares Exchange-Traded Fund Trust II, PowerShares India Exchange-Traded Fund Trust, and PowerShares Actively Managed Exchange-Traded Fund Trust; Head of Legal, Invesco PowerShares Capital Management LLC (2010-Present); formerly, Partner, K&L Gates LLP (formerly, Bell Boyd & Lloyd LLP) (2007-2010); Associate Counsel at Barclays Global Investors Ltd. (2004-2006). |
Availability of Additional Information About the Trustees
The Statement of Additional Information includes additional information about the Trustees and is
available, without charge, upon request at (800) 983-0903.
* This is the period for which the Officers began serving the Trust. Each Officer serves an indefinite term, until his or her successor is elected.
104
Board Considerations Regarding Approval of Continuation of Investment Advisory Agreement
At a meeting held on April 18, 2013, the Board of Trustees of the PowerShares Exchange-Traded Fund Trust (the "Trust"), including the Independent Trustees, approved the continuation of the Investment Advisory Agreement between Invesco PowerShares Capital Management LLC (the "Adviser") and the Trust for the following 53 series (each, a "Fund" and together, the "Funds"):
PowerShares Aerospace & Defense Portfolio
PowerShares Buyback AchieversTM Portfolio
PowerShares CleantechTM Portfolio
PowerShares Dividend AchieversTM Portfolio
PowerShares DWA Technical LeadersTM Portfolio
PowerShares Dynamic Basic Materials Sector Portfolio
PowerShares Dynamic Biotechnology & Genome Portfolio
PowerShares Dynamic Building & Construction Portfolio
PowerShares Dynamic Consumer Discretionary Sector Portfolio
PowerShares Dynamic Consumer Staples Sector Portfolio
PowerShares Dynamic Energy Exploration & Production Portfolio
PowerShares Dynamic Energy Sector Portfolio
PowerShares Dynamic Financial Sector Portfolio
PowerShares Dynamic Food & Beverage Portfolio
PowerShares Dynamic Healthcare Sector Portfolio
PowerShares Dynamic Industrials Sector Portfolio
PowerShares Dynamic Large Cap Growth Portfolio
PowerShares Dynamic Large Cap Value Portfolio
PowerShares Dynamic Leisure and Entertainment Portfolio
PowerShares Dynamic MagniQuant Portfolio
PowerShares Dynamic Market Portfolio
PowerShares Dynamic Media Portfolio
PowerShares Dynamic Networking Portfolio
PowerShares Dynamic Oil & Gas Services Portfolio
PowerShares Dynamic OTC Portfolio
PowerShares Dynamic Pharmaceuticals Portfolio
PowerShares Dynamic Retail Portfolio
PowerShares Dynamic Semiconductors Portfolio
PowerShares Dynamic Software Portfolio
PowerShares Dynamic Technology Sector Portfolio
PowerShares Dynamic Utilities Portfolio
PowerShares Financial Preferred Portfolio
PowerShares FTSE RAFI US 1000 Portfolio
PowerShares FTSE RAFI US 1500 Small-Mid Portfolio
PowerShares Fundamental Pure Large Core Portfolio
PowerShares Fundamental Pure Large Growth Portfolio
PowerShares Fundamental Pure Large Value Portfolio
PowerShares Fundamental Pure Mid Core Portfolio
PowerShares Fundamental Pure Mid Growth Portfolio
PowerShares Fundamental Pure Mid Value Portfolio
PowerShares Fundamental Pure Small Core Portfolio
PowerShares Fundamental Pure Small Growth Portfolio
PowerShares Fundamental Pure Small Value Portfolio
PowerShares Global Listed Private Equity Portfolio
PowerShares Golden Dragon China Portfolio
PowerShares High Yield Equity Dividend AchieversTM Portfolio
PowerShares International Dividend AchieversTM Portfolio
PowerShares Lux Nanotech Portfolio
PowerShares S&P 500® High Quality Portfolio
PowerShares Water Resources Portfolio
PowerShares WilderHill Clean Energy Portfolio
PowerShares WilderHill Progressive Energy Portfolio
PowerShares Zacks Micro Cap Portfolio
105
Board Considerations Regarding Approval of Continuation of Investment Advisory Agreement (Continued)
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 a 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 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. 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 and projected staffing, 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 execution of portfolio transactions on behalf of the Funds. The Trustees also reviewed information on the performance of the Funds and the performance of their underlying indexes for the one-year, three-year, five-year and since-inception periods ended December 31, 2012, as applicable, including reports for each of the last three calendar years on the correlation and tracking error between each Fund's performance and the performance of its underlying index, as well as the Adviser's analysis of the tracking error between each Fund and its underlying index. In reviewing the tracking error report, the Trustees considered information provided by Ibbotson Associates, a consultant to the Independent Trustees, with respect to general expected tracking error ranges and various explanations for tracking error. The Trustees noted that for each applicable period, the correlation and tracking error for each Fund was within the targeted range set forth in the Trust's registration statement. The Trustees concluded that each Fund was correlated to its underlying index and that the tracking error for each Fund was within an acceptable range given 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 concluded that the nature, extent and quality of services provided by the Adviser to the Funds under the Investment Advisory Agreement were appropriate and reasonable.
Fees, Expenses and Profitability. The Trustees reviewed and discussed the information provided by the Adviser on each Fund's advisory fee and net expense ratio, as compared to information compiled by the Adviser from Lipper Inc. databases on the advisory fees and net expense ratios of comparable exchange-traded funds ("ETFs"), open-end (non-ETF) index funds and open-end actively-managed funds. The Trustees noted that the annual advisory fee charged to each Fund is:
• 0.50% of the Fund's average daily net assets for each Fund other than PowerShares Dividend AchieversTM Portfolio, PowerShares High Yield Equity Dividend AchieversTM Portfolio, PowerShares International Dividend AchieversTM Portfolio, PowerShares FTSE RAFI US 1000 Portfolio, PowerShares FTSE RAFI US 1500 Small-Mid Portfolio, PowerShares Fundamental Pure Large Core Portfolio, PowerShares Fundamental Pure Large Growth Portfolio, PowerShares Fundamental Pure Large Value Portfolio, PowerShares Fundamental Pure Mid Core Portfolio, PowerShares Fundamental Pure Mid
106
Board Considerations Regarding Approval of Continuation of Investment Advisory Agreement (Continued)
Growth Portfolio, PowerShares Fundamental Pure Mid Value Portfolio, PowerShares Fundamental Pure Small Core Portfolio, PowerShares Fundamental Pure Small Growth Portfolio, PowerShares Fundamental Pure Small Value Portfolio and PowerShares S&P 500® High Quality Portfolio;
• 0.40% of the Fund's average daily net assets for each of PowerShares Dividend AchieversTM Portfolio, PowerShares High Yield Equity Dividend AchieversTM Portfolio and PowerShares International Dividend AchieversTM Portfolio; and
• 0.29% of the Fund's average daily net assets for each of PowerShares FTSE RAFI US 1000 Portfolio, PowerShares FTSE RAFI US 1500 Small-Mid Portfolio, PowerShares Fundamental Pure Large Core Portfolio, PowerShares Fundamental Pure Large Growth Portfolio, PowerShares Fundamental Pure Large Value Portfolio, PowerShares Fundamental Pure Mid Core Portfolio, PowerShares Fundamental Pure Mid Growth Portfolio, PowerShares Fundamental Pure Mid Value Portfolio, PowerShares Fundamental Pure Small Core Portfolio, PowerShares Fundamental Pure Small Growth Portfolio, PowerShares Fundamental Pure Small Value Portfolio and PowerShares S&P 500® High Quality Portfolio (for PowerShares S&P 500® High Quality Portfolio, the Trustees noted that the advisory fee was reduced to 0.29% effective December 18, 2012). In approving the advisory fee reduction for the Funds at the December 18, 2012 meeting, the Trustees considered the Adviser's representation that there would be no diminution in the quantity or quality of services provided in connection with the amendment to the Investment Advisory Agreement.
The Trustees also noted that the Adviser has agreed to waive a portion of its advisory fee and/or pay expenses (an "Expense Cap") to the extent necessary to prevent the annual operating expenses of each Fund from exceeding the percentage of that Fund's average daily net assets, at least until August 31, 2014, as set forth below:
• 0.60%, excluding interest expenses, brokerage commissions and other trading expenses, taxes, acquired fund fees and expenses and extraordinary expenses, for each of PowerShares Dynamic OTC Portfolio and PowerShares Dynamic Market Portfolio;
• 0.50%, excluding interest expenses, licensing fees, offering costs, brokerage commissions and other trading expenses, taxes, acquired fund fees and expenses and extraordinary expenses, for each of PowerShares Dividend AchieversTM Portfolio, PowerShares High Yield Equity Dividend AchieversTM Portfolio and PowerShares International Dividend AchieversTM Portfolio;
• 0.39%, excluding interest expenses, offering costs, brokerage commissions and other trading expenses, taxes, acquired fund fees and expenses and extraordinary expenses, for each of PowerShares FTSE RAFI US 1000 Portfolio, PowerShares FTSE RAFI US 1500 Small-Mid Portfolio, PowerShares Fundamental Pure Large Core Portfolio, PowerShares Fundamental Pure Large Growth Portfolio, PowerShares Fundamental Pure Large Value Portfolio, PowerShares Fundamental Pure Mid Core Portfolio, PowerShares Fundamental Pure Mid Growth Portfolio, PowerShares Fundamental Pure Mid Value Portfolio, PowerShares Fundamental Pure Small Core Portfolio, PowerShares Fundamental Pure Small Growth Portfolio and PowerShares Fundamental Pure Small Value Portfolio;
• 0.29%, excluding interest expenses, offering costs, brokerage commissions and other trading expenses, taxes, acquired fund fees and expenses and extraordinary expenses, for PowerShares S&P 500® High Quality Portfolio (the Trustees noted that the Expense Cap for the Fund was reduced to 0.29% effective November 21, 2012); and
107
Board Considerations Regarding Approval of Continuation of Investment Advisory Agreement (Continued)
• 0.60%, excluding interest expenses, licensing fees, offering costs, brokerage commissions and other trading expenses, taxes, acquired fund fees and expenses and extraordinary expenses, for each other Fund.
The Trustees noted that the Adviser represented that it does not serve as the investment adviser to any clients, other than ETFs overseen by the Trustees with comparable investment strategies as the Funds, but that the Adviser provides sub-advisory services to clients with comparable investment strategies as certain of the Funds. The Trustees further noted the Adviser's explanation with respect to the sub-advisory fees it receives for such services in comparison to the advisory fees charged to the Funds. The Trustees noted that each Fund's advisory fee was:
• higher than the median advisory fee of its ETF peer funds (except for the advisory fee of each of PowerShares Golden Dragon China Portfolio, PowerShares International Dividend AchieversTM Portfolio and PowerShares Fundamental Pure Small Value Portfolio which, was equal to or lower than the median advisory fee of its ETF peer funds); and
• higher than the median advisory fee of its open-end index peer funds (except for the advisory fee of each of PowerShares Dynamic Energy Exploration & Production Portfolio, PowerShares Dynamic Energy Sector Portfolio, PowerShares Dynamic Oil & Gas Services Portfolio, PowerShares Fundamental Pure Large Core Portfolio, PowerShares Fundamental Pure Large Growth Portfolio, PowerShares Fundamental Pure Mid Growth Portfolio, PowerShares Fundamental Pure Mid Value Portfolio, PowerShares Fundamental Pure Small Value Portfolio, PowerShares Water Resources Portfolio, PowerShares WilderHill Clean Energy Portfolio and PowerShares WilderHill Progressive Energy Portfolio, which was lower than the median advisory fee of its open-end index peer funds; and there was no comparable data for PowerShares Aerospace & Defense Portfolio, PowerShares CleantechTM Portfolio, PowerShares Dividend AchieversTM Portfolio, PowerShares Dynamic Basic Materials Sector Portfolio, PowerShares Dynamic Biotechnology & Genome Portfolio, PowerShares Dynamic Building & Construction Portfolio, PowerShares Dynamic Consumer Discretionary Sector Portfolio, PowerShares Dynamic Consumer Staples Sector Portfolio, PowerShares Dynamic Financial Sector Portfolio, PowerShares Dynamic Food & Beverage Portfolio, PowerShares Dynamic Healthcare Sector Portfolio, PowerShares Dynamic Industrials Sector Portfolio, PowerShares Dynamic Leisure and Entertainment Portfolio, PowerShares Dynamic Media Portfolio, PowerShares Dynamic Pharmaceuticals Portfolio, PowerShares Dynamic Retail Portfolio, PowerShares Financial Preferred Portfolio, PowerShares Global Listed Private Equity Portfolio, PowerShares Golden Dragon China Portfolio, PowerShares High Yield Equity Dividend AchieversTM Portfolio or PowerShares International Dividend AchieversTM Portfolio); but
• lower than the median advisory fee of its open-end actively-managed peer funds.
The Trustees determined that the advisory fees were reasonable, noting the complexity of the indexes, the distinguishing factors of the Funds, and the higher administrative, operational and management oversight costs for the Adviser. With respect to the Funds' net expense ratios, the Trustees noted that the net expense ratio for each Fund was:
• higher than the median net expense ratio of its ETF peer funds (except for the net expense ratio of each of PowerShares Dynamic OTC Portfolio, PowerShares FTSE RAFI US 1000 Portfolio, PowerShares FTSE RAFI US 1500 Small-Mid Portfolio, PowerShares Fundamental Pure Mid Core
108
Board Considerations Regarding Approval of Continuation of Investment Advisory Agreement (Continued)
Portfolio, PowerShares Fundamental Pure Mid Growth Portfolio, PowerShares Fundamental Pure Small Core Portfolio and PowerShares S&P 500® High Quality Portfolio, which was equal to or less than the median net expense ratio of its ETF peer funds); and
• higher than the median net expense ratio of its open-end index peer funds (except for the net expense ratio of each of PowerShares Dividend AchieversTM Portfolio, PowerShares DWA Technical LeadersTM Portfolio, PowerShares Dynamic Energy Exploration & Production Portfolio, PowerShares Energy Sector Portfolio, PowerShares Dynamic Large Cap Growth Portfolio, PowerShares Dynamic Large Cap Value Portfolio, PowerShares Dynamic Networking Portfolio, PowerShares Oil & Gas Services Portfolio, PowerShares Dynamic OTC Portfolio, PowerShares Dynamic Semiconductors Portfolio, PowerShares Dynamic Software Portfolio, PowerShares Dynamic Technology Sector Portfolio, PowerShares Dynamic Utilities Sector Portfolio, PowerShares FTSE RAFI US 1500 Small-Mid Portfolio, PowerShares Fundamental Pure Large Core Portfolio, PowerShares Fundamental Pure Large Growth Portfolio, PowerShares Fundamental Pure Large Value Portfolio, PowerShares Fundamental Pure Mid Core Portfolio, PowerShares Fundamental Pure Mid Growth Portfolio, PowerShares Fundamental Pure Mid Value Portfolio, PowerShares Fundamental Pure Small Core Portfolio, PowerShares Fundamental Pure Small Growth Portfolio, PowerShares Fundamental Pure Small Value Portfolio, PowerShares High Yield Equity Dividend AchieversTM Portfolio, PowerShares Lux Nanotech Portfolio, PowerShares S&P 500® High Quality Portfolio, PowerShares Water Resources Portfolio, PowerShares WilderHill Clean Energy Portfolio and PowerShares WilderHill Progressive Energy Portfolio, which was lower than the median net expense ratio of its open-end index peer funds; and there was no comparable data for PowerShares Aerospace & Defense Portfolio, PowerShares CleantechTM Portfolio, PowerShares Dynamic Basic Materials Sector Portfolio, PowerShares Dynamic Biotechnology & Genome Portfolio, PowerShares Dynamic Building & Construction Portfolio, PowerShares Dynamic Consumer Discretionary Sector Portfolio, PowerShares Dynamic Consumer Staples Sector Portfolio, PowerShares Dynamic Financial Sector Portfolio, PowerShares Dynamic Food & Beverage Portfolio, PowerShares Dynamic Healthcare Sector Portfolio, PowerShares Dynamic Industrials Sector Portfolio, PowerShares Dynamic Leisure and Entertainment Portfolio, PowerShares Dynamic Media Portfolio, PowerShares Dynamic Pharmaceuticals Portfolio, PowerShares Dynamic Retail Portfolio, PowerShares Financial Preferred Portfolio, PowerShares Global Listed Private Equity Portfolio, PowerShares Golden Dragon China Portfolio or PowerShares International Dividend AchieversTM Portfolio); but
• lower than the median net expense ratio of its 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, and noted those Funds for which license fees are included in the Funds' Expense Caps.
The Board concluded that the advisory fee and expense ratio of each Fund (giving effect to the Fund's Expense Cap) were reasonable and appropriate in light of the services provided.
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 or losses realized by the Adviser from its relationship to each Fund. The Trustees concluded that the estimated profitability to the Adviser of the advisory services provided to any of the Funds was not unreasonable.
109
Board Considerations Regarding Approval of Continuation of Investment Advisory Agreement (Continued)
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 and expense limitation agreed to by the Adviser. The Trustees noted that, for Funds whose expenses are higher than their respective Expense Caps, any reduction in that Fund's expenses would be enjoyed by the Adviser, but that Fund shareholders benefit from the lower expense ratio as a result of the Fund's Expense Cap. The Trustees also noted that the Excess Expense Agreement with the Trust provides that the Adviser is entitled to be reimbursed by each Fund, other than PowerShares Dynamic Market Portfolio and PowerShares Dynamic OTC Portfolio, 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 considered whether the advisory fee rate for each Fund was reasonable in relation to the asset size of that Fund, and concluded that the flat advisory fee was reasonable and appropriate, noting the Fund expenses the Adviser has borne as a result of the 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. No single factor was determinative in the Board's analysis.
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PROXY VOTING POLICIES AND PROCEDURES
A description of the Trust's 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)983-0903. 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)983-0903; or (ii) accessing the Trust's Form N-PX on the Commission's website at www.sec.gov.
QUARTERLY PORTFOLIOS
The Trust files its complete schedule of portfolio holdings for the Funds with the Commission for the first and third quarters of each fiscal year on Form N-Q. The Trust's Forms N-Q are available on the Commission's website at www.sec.gov. The Trust's Forms N-Q may also be reviewed and copied at the Commission's Public Reference Room in Washington, D.C.; information on the operation of the Public Reference Room may be obtained by calling (800) SEC-0330.
FREQUENCY DISTRIBUTION OF DISCOUNTS AND PREMIUMS
A table showing the number of days the market price of each Fund's shares was greater than the Fund's net asset value, and the number of days it was less than the Fund's net asset value (i.e., premium or discount) for the most recently completed calendar year, and the calendar quarters since that year end (or the life of the Fund, if shorter) may be found at the Fund's website at www.invescopowershares.com.
301 West Roosevelt Road
Wheaton, IL 60187
800.983.0903
www.invescopowershares.com
© 2013 Invesco PowerShares Capital Management LLC P-PS-AR-7
Item 2. Code of Ethics.
The Registrant has adopted a Code of Ethics that applies to the Registrant’s principal executive officer and principal financial officer. This Code is filed as an exhibit to this report on Form N-CSR under Item 12(a)(1). No substantive amendments to this Code were made during the reporting period. There were no waivers for the fiscal year ended April 30, 2013.
Item 3. Audit Committee Financial Expert.
The Registrant’s Board of Trustees has determined that the Registrant has four “audit committee financial experts” serving on its audit committee: Mr. Marc M. Kole, Mr. Philip M. Nussbaum, Mr. Gary R. Wicker and Mr. Donald H. Wilson. Each of these audit committee members is “independent,” meaning that he is not an “interested person” of the Registrant (as that term is defined in Section 2(a)(19) of the Investment Company Act of 1940) and he does not accept any consulting, advisory, or other compensatory fee from the Registrant (except in his capacity as a Board or committee member).
An “audit committee financial expert” is not an “expert” for any purpose, including for purposes of Section 11 of the Securities Act of 1933, as a result of being designated as an “audit committee financial expert.” Further, the designation of a person as an “audit committee financial expert” does not mean that person has any greater duties, obligations, or liability than those imposed on a person without the “audit committee financial expert” designation. Similarly, the designation of a person as an “audit committee financial expert” does not affect the duties, obligations, or liability of any other member of the audit committee or board of trustees.
Item 4. Principal Accountant Fees and Services.
(a) to (d)
PricewaterhouseCoopers LLP (“PwC”) billed the Registrant aggregate fees for services rendered to the Registrant for the last two fiscal years as follows:
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| Fees Billed by |
| (e)(2) |
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Audit Fees |
| $ | 789,800 |
| N/A |
| $ | 814,000 |
| N/A |
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Audit-Related Fees |
| $ | 0 |
| 0 | % | $ | 0 |
| 0 | % |
Tax Fees(2) |
| $ | 419,580 |
| 0 | % | $ | 394,488 |
| 0 | % |
All Other Fees |
| $ | 0 |
| 0 | % | $ | 0 |
| 0 | % |
Total Fees |
| $ | 1,209,380 |
| 0 | % | $ | 1,208,488 |
| 0 | % |
PwC billed the Registrant aggregate fees of $419,580 for the fiscal year ended April 30, 2013 and $394,488 for the fiscal year ended April 30, 2012, for non-audit services rendered to the Registrant.
(1) For the provision of non-audit services, the pre-approval requirement is waived pursuant to a de minimis exception if (i) such services were not recognized as non-audit services by the Registrant at the time of engagement,
(ii) the aggregate amount of all such services provided is no more than 5% of the aggregate audit and non-audit fees paid by the Registrant during the fiscal year in which the services are provided; and (iii) such services are promptly brought to the attention of the Registrant’s Audit Committee and approved by the Registrant’s Audit Committee prior to the completion of the audit.
(2) Tax fees for the fiscal year ended April 30, 2013 include fees billed for reviewing tax returns, 2012 excise tax returns and excise tax distribution calculations. Tax fees for the fiscal year ended April 30, 2012 included fees billed for reviewing tax returns, 2011 excise tax returns and excise tax distribution calculations in addition to preparing the final tax returns for the six liquidated portfolios of the Trust.
(e) (1) Audit Committee Pre Approval Policies and Procedures
PRE-APPROVAL OF AUDIT AND NON-AUDIT SERVICES
POLICIES AND PROCEDURES
As Adopted by the Audit Committee of
the PowerShares Funds (the “Funds”)
June 26, 2009
Statement of Principles
Under the Sarbanes-Oxley Act of 2002 and rules adopted by the Securities and Exchange Commission (“SEC”) (“Rules”), the Audit Committee of the Funds’ (the “Audit Committee”) Board of Trustees (the “Board”) is responsible for the appointment, compensation and oversight of the work of independent accountants (an “Auditor”). As part of this responsibility and to assure that the Auditor’s independence is not impaired, the Audit Committee pre-approves the audit and non-audit services provided to the Funds by each Auditor, as well as all non-audit services provided by the Auditor to the Funds’ investment adviser and to affiliates of the adviser that provide ongoing services to the Funds (“Service Affiliates”) if the services directly impact the Funds’ operations or financial reporting. The SEC Rules also specify the types of services that an Auditor may not provide to its audit client. The following policies and procedures comply with the requirements for pre-approval and provide a mechanism by which management of the Funds may request and secure pre-approval of audit and non-audit services in an orderly manner with minimal disruption to normal business operations.
Proposed services either may be pre-approved without consideration of specific case-by-case services by the Audit Committee (“general pre-approval”) or require the specific pre-approval of the Audit Committee (“specific pre-approval”). As set forth in these policies and procedures, unless a type of service has received general pre-approval, it will require specific pre-approval by the Audit Committee. Additionally, any fees exceeding 110% of estimated pre-approved fee levels provided at the time the service was pre-approved will also require specific approval by the Audit Committee before payment is made. The Audit Committee will also consider the impact of additional fees on the Auditor’s independence when determining whether to approve any additional fees for previously pre-approved services.
The Audit Committee will annually review and generally pre-approve the services that may be provided by each Auditor without obtaining specific pre-approval from the Audit Committee. The term of any general pre-approval runs from the date of such pre-approval through June 30th of the following year, unless the Audit Committee considers a different period and states otherwise. The Audit Committee will add to or subtract from the list of general pre-approved services from time to time, based on subsequent determinations.
The purpose of these policies and procedures is to set forth the guidelines to assist the Audit Committee in fulfilling its responsibilities.
Delegation
The Chairman of the Audit Committee (or, in his or her absence, any member of the Audit Committee) may grant specific pre-approval for non-prohibited services for engagements of less than $20,000. All such delegated pre-approvals shall be presented to the Audit Committee no later than the next Audit Committee meeting.
Audit Services
The annual Audit services engagement terms will be subject to specific pre-approval of the Audit Committee. Audit services include the annual financial statement audit and other procedures such as tax provision work that is required to be performed by the independent auditor to be able to form an opinion on the Funds’ financial statements. The Audit Committee will obtain, review and consider sufficient information concerning the proposed Auditor to make a reasonable evaluation of the Auditor’s qualifications and independence.
In addition to the annual Audit services engagement, the Audit Committee may grant either general or specific pre-approval of other Audit services, which are those services that only the independent auditor reasonably can provide. Other Audit services may include services such as issuing consents for the inclusion of audited financial statements with SEC registration statements, periodic reports and other documents filed with the SEC or other documents issued in connection with securities offerings.
Non-Audit Services
The Audit Committee may provide either general or specific pre-approval of any non-audit services to the Funds and its Service Affiliates if the Audit Committee believes that the provision of the service will not impair the independence of the Auditor, is consistent with the SEC’s Rules on auditor independence, and otherwise conforms to the Audit Committee’s general principles and policies as set forth herein.
Audit-Related Services
“Audit-related services” are assurance and related services that are reasonably related to the performance of the audit or review of the Funds’ financial statements or that are traditionally performed by the independent auditor. Audit-related services include, among others, accounting consultations related to accounting, financial reporting or disclosure matters not classified as “Audit services”; and assistance with understanding and implementing new accounting and financial reporting guidance from rulemaking authorities.
Tax Services
“Tax services” include, but are not limited to, the review and signing of the Funds’ federal tax returns, the review of required distributions by the Funds and consultations regarding tax matters such as the tax treatment of new investments or the impact of new regulations. The Audit Committee will scrutinize carefully the retention of the Auditor in connection with a transaction initially recommended by the Auditor, the major business purpose of which may be tax avoidance or the tax treatment of which may not be supported in the Internal Revenue Code and related regulations. The Audit Committee will consult with the Funds’ Treasurer (or his or her designee) and may consult with outside counsel or advisors as necessary to ensure the consistency of Tax services rendered by the Auditor with the foregoing policy.
No Auditor shall represent any Fund or any Service Affiliate before a tax court, district court or federal court of claims.
Under rules adopted by the Public Company Accounting Oversight Board and approved by the SEC, in connection with seeking Audit Committee pre-approval of permissible Tax services, the Auditor shall:
1. Describe in writing to the Audit Committee, which writing may be in the form of the proposed engagement letter:
a. The scope of the service, the fee structure for the engagement, and any side letter or amendment to the engagement letter, or any other agreement between the Auditor and the Fund, relating to the service; and
b. Any compensation arrangement or other agreement, such as a referral agreement, a referral fee or fee-sharing arrangement, between the Auditor and any person (other than the Fund) with respect to the promoting, marketing, or recommending of a transaction covered by the service;
2. Discuss with the Audit Committee the potential effects of the services on the independence of the Auditor; and
3. Document the substance of its discussion with the Audit Committee.
All Other Auditor Services
The Audit Committee may pre-approve non-audit services classified as “All other services” that are not categorically prohibited by the SEC, as listed in Exhibit 1 to this policy.
Pre-Approval Fee Levels or Established Amounts
Pre-approval of estimated fees or established amounts for services to be provided by the Auditor under general or specific pre-approval policies will be set periodically by the Audit Committee. Any proposed fees exceeding 110% of the maximum estimated pre-approved fees or established amounts for pre-approved audit and non-audit services will be reported to the Audit Committee at the quarterly Audit Committee meeting and will require specific approval by the Audit Committee before payment is made. The Audit Committee will always factor in the overall relationship of fees for audit and non-audit services in determining whether to pre-approve any such services and in determining whether to approve any additional fees exceeding 110% of the maximum pre-approved fees or established amounts for previously pre-approved services.
Procedures
On an annual basis, the Auditor will submit to the Audit Committee for general pre-approval, a list of non-audit services that the Funds or Service Affiliates of the Funds may request from the Auditor. The list will describe the non-audit services in reasonable detail and will include an estimated range of fees and such other information as the Audit Committee may request.
Each request for services to be provided by the Auditor under the general pre-approval of the Audit Committee will be submitted to the Funds’ Treasurer (or his or her designee) and must include a detailed description of the services to be rendered. The Treasurer or his or her designee will ensure that such services are included within the list of services that have received the general pre-approval of the Audit Committee. The Audit Committee will be informed at the next quarterly scheduled Audit Committee meeting of any such services for which the Auditor rendered an invoice and whether such services and fees had been pre-approved and if so, by what means.
Each request to provide services that require specific approval by the Audit Committee shall be submitted to the Audit Committee jointly by the Funds’ Treasurer or his or her designee and the Auditor, and must include a joint statement that, in their view, such request is consistent with the pre-approval policies and procedures and the SEC Rules.
Each request to provide Tax services under either the general or specific pre-approval of the Audit Committee will describe in writing: (i) the scope of the service, the fee structure for the engagement, and any side letter or amendment to the engagement letter, or any other agreement between the Auditor and the audit client, relating to the service; and (ii) any compensation arrangement or other agreement between the Auditor and any person (other than the audit client) with respect to the promoting, marketing, or recommending of a transaction covered by the service. The Auditor will discuss with the Audit Committee the potential effects of the services on the Auditor’s independence and will document the substance of the discussion.
Non-audit services pursuant to the de minimis exception provided by the SEC Rules will be promptly brought to the attention of the Audit Committee for approval, including documentation that each of the conditions for this exception, as set forth in the SEC Rules, has been satisfied.
On at least an annual basis, the Auditor will prepare a summary of all the services provided to any entity in the investment company complex as defined in section 2-01(f)(14) of Regulation S-X in sufficient detail as to the nature of the engagement and the fees associated with those services.
The Audit Committee has designated the Funds’ Treasurer to monitor the performance of all services provided by the Auditor and to ensure such services are in compliance with these policies and procedures. The Funds’ Treasurer will report to the Audit Committee on a periodic basis as to the results of such monitoring. Both the Funds’ Treasurer and management will immediately report to the Chairman of the Audit Committee any breach of these policies and procedures that comes to the attention of the Funds’ Treasurer or senior management.
Exhibit 1 to Pre-Approval of Audit and Non-Audit Services Policies and Procedures
Conditionally Prohibited Non-Audit Services (not prohibited if the Fund can reasonably conclude that the results of the service would not be subject to audit procedures in connection with the audit of the Fund’s financial statements)
· Bookkeeping or other services related to the accounting records or financial statements of the audit client
· Financial information systems design and implementation
· Appraisal or valuation services, fairness opinions, or contribution-in-kind reports
· Actuarial services
· Internal audit outsourcing services
Categorically Prohibited Non-Audit Services
· Management functions
· Human resources
· Broker-dealer, investment adviser, or investment banking services
· Legal services
· Expert services unrelated to the audit
· Any service or product provided for a contingent fee or a commission
· Services related to marketing, planning, or opining in favor of the tax treatment of confidential transactions or aggressive tax position transactions, a significant purpose of which is tax avoidance
· Tax services for persons in financial reporting oversight roles at the Fund
· Any other service that the Public Company Oversight Board determines by regulation is impermissible.
(f) Not applicable.
(g) PwC did not bill any fees for non-audit services rendered to the Registrant’s investment adviser (not including any Sub-adviser whose role is primarily portfolio management and is subcontracted with or overseen by another investment adviser) or any entity controlling, controlled by or under common control with the Registrant’s investment adviser that provides ongoing services to the Registrant for the fiscal years ended April 30, 2013 and April 30, 2012
(h) Not applicable.
Item 5. Audit Committee of Listed Registrants.
The Registrant has a separately designated Audit Committee established in accordance with Section 3(a)(58)(A) of the Securities Exchange Act of 1934, as amended, which consists of the independent trustees. The Audit Committee members are Ronn R. Bagge, Todd J. Barre, Marc M. Kole, Yung Bong Lim, Philip M. Nussbaum, Gary R. Wicker and Donald H. Wilson.
Item 6. Schedule of Investments.
The Schedules of Investments are included as a part of the report to shareholders filed under Item 1 of this Form N-CSR.
Item 7. Disclosure of Proxy Voting Policies and Procedures for Closed-End Management Investment Companies.
Not applicable.
Item 8. Portfolio Managers of Closed-End Management Investment Companies.
Not applicable.
Item 9. Purchases of Equity Securities by Closed-End Management Investment Company and Affiliated Purchasers.
Not applicable.
Item 10. Submission of Matters to a Vote of Security Holders.
There have been no changes to the procedures by which shareholders may recommend nominees to the Registrant’s Board of Trustees that would require disclosure herein.
Item 11. Controls and Procedures.
a) Based on their evaluation of the Registrant’s disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940) as of a date within 90 days of the filing date of this report, the Registrant’s President (principal executive officer) and Treasurer (principal financial officer) have concluded that such disclosure controls and procedures are effective.
b) There were no significant changes in the Registrant’s internal control over financial reporting (as defined in Rule 30a-3(d) under the Investment Company Act of 1940) that occurred during the second fiscal quarter of the period covered by this report that have materially affected, or are reasonably likely to materially affect, the Registrant’s internal control over financial reporting.
Item 12. Exhibits.
(a)(1) Code of Ethics.
(a)(2) Certifications of the Registrant’s President and Treasurer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 are attached as Exhibit 99.CERT.
(a)(3) Not applicable.
(b) Certifications of the Registrant’s President and Treasurer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 are attached as Exhibit 99.906CERT.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
(Registrant) | PowerShares Exchange-Traded Fund Trust |
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By: | /s/ Andrew Schlossberg |
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Name: | Andrew Schlossberg |
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Title: | President |
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Date: | July 2, 2013 |
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Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated.
By: | /s/ Andrew Schlossberg |
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Name: | Andrew Schlossberg |
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Title: | President |
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Date: | July 2, 2013 |
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By: | /s/ Steven Hill |
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Name: | Steven Hill |
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Title: | Treasurer |
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Date: | July 2, 2013 |
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