During the weekend of August 22/23, our third-party Administrator (The Bank of New York Mellon – BNYM) experienced a technical malfunction resulting in it being unable to calculate timely NAVs for its mutual funds and ETF clients, including the PowerShares ETFs. As we disclosed to you last week, we experienced a delay in the dissemination of the NAV. PowerShares worked aggressively with BNYM to resolve the issue. We are pleased to report that the malfunction has been corrected by the Administrator and that the system is back to normal. The NAV that is being disseminated today is the most recent NAV for the Funds (as of Thursday, September 3).
For primary market participants, please note that, in accordance with the Prospectus and the SAI for each PowerShares ETF, orders received before the cut-off time on any given day were processed at the NAV that was calculated by the Administrator for that day. Given the delay in the calculation and dissemination of the NAV by the Administrator, we expect that most of the orders that the Administrator received last week will settle in the normal settlement cycle. Certain orders may experience (or have experienced) a delay in settlement. Secondary market transactions were not affected by the delay and are anticipated to settle in ordinary course.
For additional information please contact PowerShares at 1-800-983-0903.
- PowerShares China A-Share Portfolio
Equity - International and Global Equity Actively managed
The PowerShares China A-Share Portfolio (Fund) is an actively managed exchange-traded fund (ETF) that seeks to achieve its investment objective by providing exposure to the China A-Share market. The Fund seeks to provide long-term capital appreciation using a quantitative, rules-based investment strategy designed to provide exposure to the China A-Share market using SGX FTSE China A50 Index futures contracts.
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 09/30/2015. 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.
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There are risks involved with investing in ETFs, including possible loss of money. Actively managed ETFs do not necessarily seek to replicate the performance of a specified index. Actively managed ETFs are subject to risks similar to stocks, including those related to short selling and margin maintenance. Ordinary brokerage commissions apply. The Fund's return may not match the return of the Index. The Fund is subject to certain other risks. Please see the current prospectus for more information regarding the risk associated with an investment in the Fund.
Investing in Futures contracts based on the performance of Chinese companies involves risks: China's economy differs, sometimes unfavorably, from the US, in such respects as structure, development, government involvement, wealth distribution, rate of inflation, growth rate, allocation of resources and capital reinvestment, among others. China's government has historically exercised substantial control over virtually every sector of the Chinese economy through administrative regulation and/or state ownership; such actions continue to have a substantial effect on China's economic conditions. Regulatory oversight of Chinese companies differs from that in the US, and may not otherwise deter or uncover fraudulent actions by issuers.
China's A-Shares market is an emerging market with a limited operating history. Various restrictions on the free flow of capital into the China's A-Shares market may adversely impact its liquidity, and increase volatility of A-Shares trading prices. Investment regulations in China are relatively new and the application and interpretation these regulations are relatively untested. There is no certainty as to how they will be applied when the Fund is permitted to invest directly in A-Shares. The Chinese government has taken actions in the past that has benefited A-Shares holders. If A-Shares continue to become more available to foreign investors, the Chinese government may be less likely to take action that would benefit A-Shares holders. Laws, regulations, government policies, political and economic climate in China may change with little or no advance notice. There can be no assurance that the Chinese government will continue to take similar actions in the future. Any such change could adversely affect market conditions for A-Shares.
If the Fund were to invest directly in A-Shares, such investments are subject to pre-approved government limitations on the quantity. If the Adviser obtains a QFII license, it would be required to remit the entire investment principal for its A-Share quota into a local sub-custodian account after obtaining a foreign exchange registration certificate from the Chinese government agency responsible for foreign exchange administration. Once remitted, investment capital only may be repatriated at certain designated times. Therefore, the Fund may be limited in its ability to transfer its investment principal for its A-Share quota, denominated in Renminbi, outside of China. Future changes to the repatriation rules could further limit the Fund's ability to repatriate capital and have a negative effect on its operations.
The risks of investing in securities of foreign issuers, including emerging market issuers, can include fluctuations in foreign currencies, political and economic instability, and foreign taxation issues.
If the Fund were to invest directly in A-Shares, the investments and income received will be denominated in Renminbi. The dollar value of foreign investments will be affected by changes in the exchange rates between the dollar and the currencies in which those investments are traded. Dividends declared by the Fund would be in US dollars and underlying payments received from A-Shares would be made in Renminbi, fluctuations in exchange rates may adversely affect the dividends that the Fund would pay.
The investment techniques and risk analysis used by the portfolio managers may not produce the desired results.
Risks of futures contracts include: an imperfect correlation between the value of the futures contract and the underlying commodity; possible lack of a liquid secondary market; inability to close a futures contract when desired; losses due to unanticipated market movements; obligation for the Fund to make daily cash payments to maintain its required margin; failure to close a position may result in the Fund receiving an illiquid commodity; and unfavorable execution prices.
An investment in exchange-traded funds (ETFs) may trade at a discount to net asset value, fail to develop an active trading market, halt trading on the listing exchange, fail to track the referenced index, or hold troubled securities. ETFs may involve duplication of management fees and certain other expenses. Certain of the ETFs the fund invests in are leveraged, which can magnify any losses on those investments. The Fund does not intend to use leverage.
Obligations issued by US Government agencies and instrumentalities may receive varying levels of support from the government, which could affect the fund's ability to recover should they default. Fixed-income investments are subject to credit risk of the issuer and the effects of changing interest rates. Due to anticipated Federal Reserve Board policy changes, there is a risk that interest rates will rise in the near future.
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 Fund may hold illiquid securities that it may be unable to sell at the preferred time or price and could lose its entire investment in such securities.
The Fund's investments in futures contracts will cause it to be deemed to be a commodity pool, subjecting it to regulation under the Commodity Exchange Act and Commodity Futures Trading Commission (CFTC) rules. The Adviser, a registered Commodity Pool Operator (CPO), and the Fund will be operated in accordance with CFTC rules. Registration as a CPO subjects the registrant to additional laws, regulations and enforcement policies; all of which could increase compliance costs, affect the operations and financial performance of funds whose adviser registered as a CPO. Registration as a commodity pool may have negative effects on the ability of the Fund to engage in its planned investment program.
To qualify as a regulated investment company (“RIC”), the Fund must meet a qualifying income test each taxable year. Failure to comply with the test would have significant negative tax consequences for shareholders. The Fund believes that income from futures should be treated as qualifying income for purposes of this test, thus qualifying the Fund as a RIC. If the IRS were to determine that the Fund's income is derived from the futures did not constitute qualifying income, the Fund likely would be required to reduce its exposure to such investments in order to maintain its RIC status.
During periods of reduced market volatility or in the absence of readily available market quotations for the holdings of the Fund, the Funds' ability to value its holdings becomes more difficult and the judgment of the Sub-Adviser may play a greater role in the valuation of the Fund's holdings due to reduced availability of reliable objective pricing data.
The Fund is non-diversified and may experience greater volatility than a more diversified investment.
The FTSE China A50 Index is a real-time index that provides exposure to the largest 50 A-Share companies on a market-cap weighted basis.
All rights in the FTSE China A50 Index (the Index) invest in FTSE International Limited (FTSE). FTSE® is a trade mark of the London Stock Exchange Group companies and is used by FTSE under license. The PowerShares China A-Share Portfolio (the Fund) has been developed solely by Invesco PowerShares. The Index is calculated by FTSE or its agent. FTSE and its licensors are not connected to and do not sponsor, advise, recommend, endorse or promote the Fund and do not accept any liability whatsoever to any person arising out of (a) the use of, reliance on or any error in the Index or (b) investment in or operation of the Fund. FTSE makes no claim, prediction, warranty or representation either as to the results to be obtained from the Fund or the suitability of the Index for the purpose to which it is being put by Invesco PowerShares.
12:00 AM EST
NAV at market close
SEC 30 Day Yield
30-Day SEC Unsubsidized Yield
Benchmark Index Ticker
Acquired Fund Fees & Expenses
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Net Expense Ratio
# of Holdings 7
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