DSUM - PowerShares Chinese Yuan Dim Sum Bond PortfolioFixed Income - International and Global Fixed Income
The PowerShares Chinese Yuan Dim Sum Bond Portfolio (Fund) seeks investment results that generally correspond (before fees and expenses) to the price and yield performance of the Citi Custom Dim Sum (Offshore CNY) Bond Index (the “Underlying Index”). The Fund normally will invest at least 80% of its total assets in Chinese Renminbi (RMB)-denominated bonds that comprise the Underlying Index. To qualify for the underlying index, a security must have an outstanding principal amount of RMB 1 billion, a minimum of one year to maturity to enter the index and one month to maturity to remain in the index. The Underlying Index is composed of RMB-denominated bonds issued by governments, agencies, supranationals and corporations, excluding synthetics, convertible bonds, retail bonds and CDs. The Fund and the Index are rebalanced and reconstituted monthly.
|Index History (%)|
|Citi Custom Dim Sum (Offshore CNY) Bond Index||-0.58||-0.83||3.18||N/A||N/A||3.76|
|Citi Custom Dim Sum (Offshore CNY) Bond Index||1.40||0.13||3.32||N/A||N/A||4.19|
|Fund History (%)|
|After Tax Held||-2.13||-2.86||1.33||N/A||N/A||1.73|
|After Tax Sold||-0.63||-0.86||1.46||N/A||N/A||1.77|
|Fund Market Price||-0.93||-2.25||2.37||N/A||N/A||1.91|
|After Tax Held||-0.33||-2.06||1.44||N/A||N/A||2.15|
|After Tax Sold||0.45||-0.41||1.53||N/A||N/A||2.08|
|Fund Market Price||1.00||-0.56||2.42||N/A||N/A||2.35|
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.
As of June 30, 2015, the Fund’s previous benchmark index, BofA Merrill Lynch Global Broad Market Non-Sovereign ex-USD Index, was discontinued and its performance will no longer be shown.
Growth of $10,000
Data beginning Fund inception and ending 09/30/2015. Fund performance shown at NAV.
An investor cannot invest directly in an index. The results assume that no cash was added to or assets withdrawn from the Index. Index returns do not represent Fund returns. The Index does not charge management fees or brokerage expenses, nor does the Index lend securities, and no revenues from securities lending were added to the performance shown.
Quality Allocations† as of 11/25/2015
|AAA : 6%||Aaa : 4%|
|AA : 32%||Aa : 29%|
|A : 13%||A : 10%|
|BBB : 5%||Baa : 9%|
|BB : 2%||Ba : 5%|
|B : 3%||B : 3%|
|Not Rated : 39%||Not Rated : 41%|
as of 11/25/2015 Maturity
|Years||% of Fund|
|0 - 1 years||41.13|
|1 - 5 years||51.46|
|5 - 10 years||6.23|
|10 - 15 years||1.18|
|15 - 20 years||0.00|
|20 - 25 years||0.00|
|25 years and over||0.00|
as of 11/25/2015Top Fixed-Income Holdings | View All
|Holding Name||Coupon Rate||Maturity Date||Next Call Date||S&P / Moody's Rating†||Weight|
|China Government Bond||2.60%||11/22/2016||N/A||AA-/Aa3||4.91%|
|Banco BTG Pactual SA/Cayman Islands||4.10%||03/26/2016||N/A||NR/Baa3||4.69%|
|Standard Chartered PLC||2.62%||05/31/2016||N/A||A-/Aa3||2.95%|
|Russian Agricultural Bank OJSC Via RSHB Capital SA||3.60%||02/04/2016||N/A||NR/Ba2||2.93%|
|Bank of Tokyo-Mitsubishi UFJ China Ltd||3.05%||05/26/2017||N/A||A+/NA||2.92%|
|China Government Bond||1.40%||08/18/2016||N/A||AA-/Aa3||2.63%|
|Caisse d'Amortissement de la Dette Sociale||3.80%||02/06/2017||N/A||AAu/Aa2||1.98%|
|China City Construction International Co Ltd||5.35%||07/03/2017||N/A||NR/NR||1.98%|
|Agricultural Bank of China Ltd||3.20%||11/28/2015||N/A||NA/NA||1.98%|
|Bank of Communications Co Ltd||3.30%||03/20/2016||N/A||NR/NR||1.97%|
Holdings are subject to change and are not buy/sell recommendations.
Distributions | View All | Distribution Information
|Ex-Date||Record Date||Pay Date||$/
|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||41||1||0||98||2||0|
Fund Inception: 09/23/2011
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.
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 subject to certain other risks. Please see the current prospectus for more information regarding the risk associated with an investment in the Fund.
Fixed-income investments are subject to credit risk of the issuer and the effects of changing interest rates. Interest rate risk refers to the risk that bond prices generally fall as interest rates rise and vice versa. An issuer may be unable to meet interest and/or principal payments, thereby causing its instruments to decrease in value and lowering the issuer's credit rating. Due to anticipated Federal Reserve Board policy changes, there is a risk that interest rates will rise in the near future.
The values of securities designed to provide exposure to Chinese RMB, such as RMB-denominated bonds, may change quickly and arbitrarily, potentially impacting the availability, liquidity, and pricing of securities designed to provide offshore investors with exposure to Chinese markets. The Chinese government maintains strict currency controls and regularly intervenes in the currency market.
Adverse economic conditions, such as unfavorable or volatile currency exchange rates and interest rates, political events or other conditions may cause the Chinese government to intervene and impose "capital controls," including the prohibition of, or restrictions on, the ability to transfer currency, securities or other assets.
Global bonds are subject to the same risks as other debt issues. Securities of non-U.S. issuers may be subject to greater market volatility based on factors such as availability of reliable financial information, higher transactional costs, taxation, decreased market liquidity and political instability.
The Fund invests at least 80% of its assets in Chinese RMB-denominated bonds issued and settled outside of mainland China. If the currency of the non-US market in which the Fund invests depreciates against the US dollar, the fund's NAV could decline, even if the value of the Fund's holdings increases. If the Chinese currencies (the RMB, traded in mainland China, and the Yuan, traded offshore as "CNH" in Hong Kong), diverge in value, that divergence could negatively impact the Fund.
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.
Issuers of sovereign debt or the governmental authorities that control repayment may be unable or unwilling to repay principal or interest when due, and the Fund may have limited recourse in the event of default. Without debt holder approval, some governmental debtors may be able to reschedule or restructure their debt payments or declare moratoria on payments.
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.
Investments focused in a particular industry are subject to greater risk, and are more greatly impacted by market volatility, than more diversified investments.
The BofA Merrill Lynch Global Broad Market Non-Sovereign ex-USD Index tracks the performance of investment grade debt publicly issued in the major domestic and eurobond markets.
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