The PowerShares Build America Bond Portfolio (Fund) is based on The BofA Merrill Lynch Build America Bond Index (Index). The Fund will normally invest at least 80% of its total assets in the securities that comprise the Index. The Index is designed to track the performance of US dollar-denominated Build America Bonds publicly issued by US states and territories, and their political subdivisions, in the US market. The Fund and the Index are rebalanced and reconstituted monthly.
as of 12/31/2014 12/31/2014
|YTD||1 Year||3 Year||5 Year||10 Year||Fund Inception|
|Index History (%)|
|BofA Merrill Lynch Build America Bond Index||17.33||17.33||7.35||10.47||N/A||9.42|
|BofA Merrill Lynch U.S. Corporate Master Index||7.51||7.51||5.35||6.60||5.52||6.35|
|Barclays U.S. Aggregate Index||5.97||5.97||2.66||4.45||4.71||4.14|
|Fund History (%)|
|After Tax Held||13.32||13.32||4.84||7.94||N/A||7.22|
|After Tax Sold||8.81||8.81||4.40||6.99||N/A||6.39|
|Fund Market Price||16.85||16.85||7.13||10.18||N/A||9.37|
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 $10,000
Data beginning Fund inception and ending 12/31/2014. Fund performance shown at NAV.
An investor cannot invest directly in an index. The results assume that no cash was added to or assets withdrawn from the Index. Index returns do not represent Fund returns. The Index does not charge management fees or brokerage expenses, nor does the Index lend securities, and no revenues from securities lending were added to the performance shown.
Quality Allocations† as of 03/05/2015
|AAA : 11%||Aaa : 8%|
|AA : 40%||Aa : 44%|
|A : 38%||A : 33%|
|BBB : 1%||Baa : 8%|
|BB : 0%||Ba : 0%|
|Not Rated : 10%||Not Rated : 7%|
as of 03/05/2015 Maturity
|Years||% of Fund|
|0 - 1 years||0.00|
|1 - 5 years||2.07|
|5 - 10 years||6.74|
|10 - 15 years||12.05|
|15 - 20 years||27.88|
|20 - 25 years||22.64|
|25 years and over||28.61|
as of 03/05/2015Top Fixed-Income Holdings | View All
|Holding Name||Coupon Rate||Maturity Date||Next Call Date||S&P / Moody's Rating†||Weight|
|State of California||7.50%||04/01/2034||N/A||A+/Aa3||3.36%|
|North Texas Tollway Authority||8.91%||02/01/2030||02/01/2020||NR/Baa3||2.54%|
|State of Illinois||5.56%||02/01/2021||N/A||A-/A3||2.11%|
|Metropolitan Transportation Authority||6.81%||11/15/2040||N/A||AA-/A2||1.82%|
|State of California||6.51%||04/01/2039||10/01/2021||A+/Aa3||1.69%|
|Chicago Board of Education||6.14%||12/01/2039||N/A||A+/Baa1||1.65%|
|Missouri Joint Municipal Electric Utility Commission||6.89%||01/01/2042||N/A||NR/A3||1.62%|
|State of California||7.60%||11/01/2040||N/A||A+/Aa3||1.61%|
|American Municipal Power Inc||5.94%||02/15/2047||N/A||A/A1||1.60%|
|Municipal Electric Authority of Georgia||7.06%||04/01/2057||N/A||A-/Baa2||1.48%|
Holdings are subject to change and are not buy/sell recommendations.
Distributions | View All | Distribution Information
|Ex-Date||Record Date||Pay Date||$/
|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||20||0||0||10||0||0|
Fund Inception: 11/17/2009
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's underlying securities may be subject to call risk, which may result in the Fund having to reinvest the proceeds at lower interest rates, resulting in a decline in the Fund's income.
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.
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 Shares are subject to market fluctuations caused by such factors as economic, political, regulatory or market developments, changes in interest rates and perceived trends in securities prices.
Municipal securities are subject to the risk that litigation, legislation or other political events, local business or economic conditions or the bankruptcy of the issuer could have a significant effect on an issuer's ability to make payments of principal and/or interest. Municipal securities can be significantly affected by political changes as well as uncertainties in the municipal market related to taxation, legislative changes or the rights of municipal security holders. Because many securities are issued to finance similar projects, especially those relating to education, Healthcare, transportation and utilities, conditions in those sectors can affect the overall municipal market. In addition, changes in the financial condition of an individual municipal insurer can affect the overall municipal market.
There is no guarantee that municipalities will continue to take advantage of the BAB program in the future and there can be no assurance that BABs will be actively traded. Furthermore, under the American Recovery and Reinvestment Act of 2009, the ability of municipalities to issue BABs expired on Dec. 31, 2010. As a result, the number of available BABs in the market is limited. In addition, illiquidity of the BABs may negatively affect the value of the BABs.
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.
The BofA Merrill Lynch U.S. Corporate Master Index tracks the performance of US dollar denominated investment grade corporate debt publicly issued in the US domestic market. The Barclays U.S. Aggregate Index is an unmanaged index considered representative of the US investment-grade, fixed-rate bond market.
"BofA Merrill Lynch" and "The BofA Merrill Lynch Build America Bond IndexSM" are reprinted with permission. ©Copyright 2014 Merrill Lynch, Pierce, Fenner & Smith Incorporated ("BofA Merrill Lynch"). All rights reserved. "BofA Merrill Lynch" and "The BofA Merrill Lynch Build America Bond IndexSM" are service marks of BofA Merrill Lynch and/or its affiliates and have been licensed for use for certain purposes by PowerShares on behalf of the PowerShares Build America Bond Portfolio that is based on The BofA Merrill Lynch Build America Bond IndexSM, and is not issued, sponsored, endorsed or promoted by BofA Merrill Lynch and/or BofA Merrill Lynch's affiliates nor is BofA Merrill Lynch and/or BofA Merrill Lynch's affiliates an adviser to the PowerShares Build America Bond Portfolio. BofA Merrill Lynch and BofA Merrill Lynch's affiliates make no representation, express or implied, regarding the advisability of investing in the PowerShares Build America Bond Portfolio or The BofA Merrill Lynch Build America Bond IndexSM and do not guarantee the quality, accuracy or completeness of The BofA Merrill Lynch Build America Bond Index IndexSM, index values or any index related data included herein, provided herewith or derived therefrom and assume no liability in connection with their use. As the index provider, BofA Merrill Lynch is licensing certain trademarks, The BofA Merrill Lynch Build America Bond IndexSM and trade names which are composed by BofA Merrill Lynch without regard to PowerShares, the PowerShares Build America Bond Portfolio or any investor. BofA Merrill Lynch and BofA Merrill Lynch's affiliates do not provide investment advice to PowerShares or the PowerShares Build America Bond Portfolio and are not responsible for the performance of the PowerShares Build America Bond Portfolio.
BofA Merrill Lynch and BofA Merrill Lynch's affiliates do not provide investment advice to PowerShares or the PowerShares Build America Bond Portfolio and are not responsible for the performance of the PowerShares Build America Bond Portfolio.