The PowerShares Senior Loan Portfolio (Fund) is based on the S&P/LSTA U.S. Leveraged Loan 100 Index (Index). The Fund will normally invest at least 80% of its total assets in the component securities that comprise the Index. The Index is designed to track the market-weighted performance of the largest institutional leveraged loans based on market weightings, spreads and interest payments. The Fund and the Index are rebalanced and reconstituted bi-annually, in June and December.
as of 12/31/2014 12/31/2014
|YTD||1 Year||3 Year||5 Year||10 Year||Fund Inception|
|Index History (%)|
|S&P/LSTA U.S. Leveraged Loan 100 Index||0.99||0.99||5.44||5.28||N/A||3.74|
|Barclays U.S. Aggregate Index||5.97||5.97||2.66||4.45||4.71||4.19|
|Fund History (%)|
|After Tax Held||-1.04||-1.04||3.16||N/A||N/A||1.69|
|After Tax Sold||0.40||0.40||3.07||N/A||N/A||1.91|
|Fund Market Price||0.50||0.50||4.77||N/A||N/A||3.28|
Market returns are based on the midpoint of the bid/ask spread at 4 p.m. ET and do not represent the returns an investor would receive if shares were traded at other times. Performance data quoted represents past performance, which is not a guarantee of future results. Investment returns and principal value will fluctuate, and shares, when redeemed, may be worth more or less than their original cost. Current performance may be higher or lower than performance data quoted. After-tax returns reflect the highest federal income tax rate but exclude state and local taxes. Fund performance reflects fee waivers, absent which, performance data quoted would have been lower. After Tax Held and After Tax Sold are based on NAV. Returns less than one year are cumulative.
Growth of $10,000
Data beginning Fund inception and ending 12/31/2014. Fund performance shown at NAV.
An investor cannot invest directly in an index. The results assume that no cash was added to or assets withdrawn from the Index. Index returns do not represent Fund returns. The Index does not charge management fees or brokerage expenses, nor does the Index lend securities, and no revenues from securities lending were added to the performance shown.
Quality Allocations† as of 02/26/2015
|BBB : 14%||Baa : 6%|
|BB : 41%||Ba : 44%|
|B : 37%||B : 40%|
|CCC : 4%||Caa : 2%|
|Not Rated : 5%||Not Rated : 9%|
as of 02/26/2015 Maturity
|Years||% of Fund|
|0 - 1 years||0.00|
|1 - 5 years||42.66|
|5 - 10 years||57.34|
|10 - 15 years||0.00|
|15 - 20 years||0.00|
|20 - 25 years||0.00|
|25 years and over||0.00|
Asset Type Allocation
as of 02/26/2015Top Fixed-Income Holdings | View All
|Holding Name||Coupon Rate||Maturity Date||S&P / Moody's Rating†||Weight|
|ENERGY FUTURE INTERMEDIATE||4.25%||06/19/2016||BB/Ba3||1.83%|
|Hilton Worldwide Finance, LLC||3.50%||10/26/2020||BBB-/Ba3||1.81%|
|Avago Tech. Finance Pte Ltd.||3.75%||05/06/2021||BBB-/Ba1||1.80%|
|H.J. HEINZ COMP||3.50%||06/05/2020||BB+/Ba1||1.72%|
|New Red Finance, Inc.||4.50%||12/12/2021||B+/B1||1.71%|
|ALPHA TOPCO LIM||4.75%||07/30/2021||B/B2||1.66%|
|CHRYSLER AUTO TL||3.50%||05/24/2017||BB+/Ba1||1.58%|
Holdings are subject to change and are not buy/sell recommendations.
Distributions | View All | Distribution Information
|Ex-Date||Record Date||Pay Date||$/
|Ordinary Income||Short Term Gains||Long Term Gains||Return of Capital|
Dividends from net investment income, if any, are declared and paid either quarterly or monthly, depending on the Fund. For Funds on a quarterly dividend payment cycle, the dividend ex-date is generally the third Friday of each March, June, September and December, payable the last business day of the month. For Funds on a monthly dividend payment cycle, the dividend ex-date is generally the 15th of each month, payable the last business day of the month.
The fund distributes its net realized capital gains, if any, to shareholders annually. Prior to paying a distribution of net investment income, the fund has the ability to invest cash generated from investment income into additional securities or money market instruments.
Distributions in cash may be reinvested automatically in additional whole shares of the fund only if the broker through whom you purchased shares makes such option available. Shareholders of the fund may contact their broker to determine the availability and costs of the service and the details of participation. Brokers may require shareholders to adhere to specific procedures and timetables. If this service is available and used, dividend distributions of both income and realized gains will be automatically reinvested in additional whole shares of the fund purchased in the secondary market.Taxes on Distributions
In general, your distributions are subject to federal income tax when they are paid, whether you take them in cash or reinvest them in the Fund. Dividends paid out of the Fund’s income and net short-term gains, if any, are taxable as ordinary income. Distributions of net long-term capital gains, if any, in excess of net short-term capital losses are taxable as long-term capital gains, regardless of how long you have held the Shares. Dividends from net investment income, if any, are declared and paid quarterly. The Fund may also pay a special distribution at the end of the calendar year to comply with federal tax requirements.
Under the provisions of the Jobs and Growth Tax Relief Reconciliation Act of 2003 (the “2003 Tax Act”), long-term capital gains tax rates have generally been reduced for individuals to a maximum of 15% for taxable years beginning before January 1, 2009. In addition, some ordinary dividends declared and paid by the Fund to individual shareholders may qualify for taxation at the lower reduced tax rates applicable to long-term capital gains, provided that holding period and other requirements are met by the Fund and the shareholder.
Distributions in excess of the Fund’s current and accumulated earnings and profits are treated as a tax-free return of capital to the extent of your basis in the Shares, and as capital gain thereafter. A distribution will reduce the Fund’s net asset value per Share and may be taxable to you as ordinary income or capital gain even though, from an investment standpoint, the distribution may constitute a return of capital.
By law, the Fund must withhold a percentage of your distributions and proceeds if you have not provided a taxpayer identification number or social security number. The backup withholding rate is currently 28%.
Frequency Distribution of Discounts & Premiums
|Bid/Ask MidPoint Above NAV||Bid/Ask Midpoint Below NAV|
|Year Ended 2014||252||0||0||0||1||0||0|
Fund Inception: 03/03/2011
Shareholders may pay more than net asset value when they buy Fund shares and receive less than net asset value when they sell those shares, because shares are bought and sold at current market prices. Performance data quoted represents past performance, which is not a guarantee of future results.
Risk & Other Information
† Credit ratings are assigned by Nationally Recognized Statistical Rating Organizations based on assessment of the credit worthiness of the underlying bond issuers. The ratings range from AAA (highest) to D (lowest) and are subject to change. Not rated indicates the debtor was not rated, and should not be interpreted as indicating low quality. Futures and other derivatives are not eligible for assigned credit ratings by any NRSRO and are excluded from quality allocations. For more information on rating methodologies, please visit the following NRSRO websites: standardandpoors.com and select "Understanding Ratings" under Rating Resources and moodys.com and select "Rating Methodologies" under Research and Ratings.
The Securities Valuation Office of the National Association of Insurance Commissioners (NAIC) assigns credit quality designations to securities held by state-regulated insurance companies. NAIC Designations are opinions of credit quality that range from NAIC 1, being the highest quality, to NAIC 6, being the lowest quality. "P" is a valuation indicator used to classify perpetual preferred stock. NAIC Designations allow fixed-income ETFs to be reported as bonds and are used to set Risk-Based Capital (RBC) requirements. NAIC designations only measure credit risk and do not measure other risks or factors that may affect repayment, such as volatility/interest rate, prepayment, extension or liquidity risk.
There are risks involved with investing in ETFs, including possible loss of money. Shares are not actively managed and are subject to risks similar to those of stocks, including those regarding short selling and margin maintenance requirements. Ordinary brokerage commissions apply. The Fund's return may not match the return of the Underlying Index.
The Fund is considered non-diversified and may be subject to greater risks than a diversified fund.
Investments in fixed-income securities, such as notes and bonds, carry interest rate and credit risk. Interest rate risk refers to the risk that bond prices generally fall as interest rates rise and vice versa. Credit risk is the risk of loss on an investment due to the deterioration of an issuer's financial health. Due to anticipated Federal Reserve Board policy changes, there is a risk that interest rates will rise in the near future.
Investments in loans are subject to interest rate risk and credit risk. There is no organized exchange on which loans are traded and reliable market quotations may not be readily available.
Non-investment grade securities may be subject to greater price volatility due to specific corporate developments, interest-rate sensitivity, negative perceptions of the non-investment grade securities market, adverse economic and competitive industry conditions and decreased market liquidity.
When-issued and delayed delivery transactions are subject to market risk, as the value or yield of a security at delivery may be more or less than the purchase price or the yield generally available on securities when delivery occurs and also subjects the fund to counterparty risk.
The fund may engage in frequent trading of its portfolio securities in connection with the rebalancing or adjustment of the Underlying Index.
Investments in senior loans typically are below investment grade and are considered speculative because of the credit risk of their issuers.
The ability of the borrower of a loan to repay principal prior to maturity can limit the potential for gains by the Fund.
The Fund's use of a representative sampling approach will result in its holding a smaller number of bonds than are in the underlying Index, and may be subject to greater volatility.
The Fund currently intends to effect creations and redemptions principally for cash, rather than principally in-kind because of the nature of the Fund's investments. As such, investments in the Fund may be less tax efficient than investments in ETFs that create and redeem in-kind.
Proceeds from a current investment of the Fund, both interest payments and principal payments, may be reinvested in instruments that offer lower yields than the current investment due in part to market conditions and the interest rate environment at the time of reinvestment.
The market value of the shares of closed-end investment companies may differ from their NAV. In addition, the shares of closed-end investment companies frequently trade at a discount to their NAV. As an investor in closed-end investment companies, the Fund would bear its ratable share of those closedend investment companies' fees and expenses, including its investment advisory and administration fees, while continuing to pay its own advisory and administration fees and other expenses. As a result, shareholders will be absorbing duplicate levels of fees with respect to investments in closed-end investment companies.
As the purchaser of a loan assignment, the Fund typically succeeds to all assigning institution rights and obligations and becomes a lender under the credit agreement with respect to the debt obligation.
Investments focused in a particular industry are subject to greater risk, and are more greatly impacted by market volatility, than more diversified investments.
Liquidity risk may occur since the Fund's assets may be invested in loans that are less liquid than securities traded on national exchanges. Since the Fund may engage in frequent trading of securities in connection with rebalancing or adjusting its' underlying index, high brokerage costs and higher taxable capital gains distributions to shareholders may occur due to portfolio turnover risk.
The Fund may invest all or a portion of its assets in loans of non-US borrowers. Loans of non-US borrowers have additional risks, including decreased market liquidity, political instability and taxation by foreign governments.
However, the Fund may not be able to enforce all rights and remedies under the loan including any associated collateral. If the loan is foreclosed, the Fund may become part owner of any collateral and may bear the costs and liabilities of owning and disposing of the collateral. The Fund may be required to pass on to a purchaser that buys a loan from the Fund a portion of fees it is entitled to under the loan. In connection with purchasing loan participations, the Fund will have no right to enforce borrower compliance with the terms of the loan agreement, nor any rights of set-off against the borrower, and the Fund may not benefit from any collateral supporting the loan. Consequently, the Fund will be subject to the credit risk of both the borrower and the lender that is selling the participation. In the event of the insolvency of the lender selling a participation, the Fund may be treated as the lender's general creditor and may not benefit from any set-off between the lender and the borrower.
The Barclays U.S. Aggregate Index is an unmanaged index considered representative of the US investment-grade, fixed-rate bond market.
S&P® is a registered trademark of Standard & Poor's Financial Services LLC (S&P) and Dow Jones® is a registered trademark of Dow Jones Trademark Holdings LLC (Dow Jones). These trademarks have been licensed for use by S&P Dow Jones Indices LLC. S&P® and Standard & Poor's® are trademarks of S&P and Dow Jones® is a trademark of Dow Jones. These trademarks have been sublicensed for certain purposes by Invesco PowerShares Capital Management LLC (Invesco PowerShares). The Index is a product of S&P Dow Jones Indices LLC and/or its affiliates and has been licensed for use by Invesco PowerShares. The Fund is not sponsored, endorsed, sold or promoted by S&P Dow Jones Indices LLC, Dow Jones, S&P or their respective affiliates and neither S&P Dow Jones Indices LLC, Dow Jones, S&P or their respective affiliates make any representation regarding the advisability of investing in such product(s).