The PowerShares Emerging Markets Sovereign Debt Portfolio (Fund) is based on the DB Emerging Market USD Liquid Balanced Index (Index). The Fund will normally invest at least 90% of its total assets in securities that comprise the Index. The Index tracks the potential returns of a theoretical portfolio of liquid emerging markets US dollar-denominated government bonds issued by approximately 22 emerging-market countries. The countries in the Index are selected annually pursuant to a proprietary index methodology. The Fund and the Index are rebalanced and reconstituted quarterly.
as of 12/31/2014 12/31/2014
|YTD||1 Year||3 Year||5 Year||10 Year||Fund Inception|
|Index History (%)|
|DB Emerging Market USD Liquid Balanced Index||9.78||9.78||7.27||8.73||N/A||8.41|
|JP Morgan EMBI Global Index||5.53||5.53||5.33||7.27||7.68||7.17|
|Fund History (%)|
|After Tax Held||7.05||7.05||4.05||5.56||N/A||5.04|
|After Tax Sold||5.17||5.17||3.80||5.08||N/A||4.71|
|Fund Market Price||8.94||8.94||5.68||7.27||N/A||7.00|
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 $10,000
Data beginning Fund inception and ending 12/31/2014. Fund performance shown at NAV.
An investor cannot invest directly in an index. The results assume that no cash was added to or assets withdrawn from the Index. Index returns do not represent Fund returns. The Index does not charge management fees or brokerage expenses, nor does the Index lend securities, and no revenues from securities lending were added to the performance shown.
Top Country Allocation
Quality Allocations† as of 03/25/2015
|AA : 4%||Aa : 5%|
|A : 18%||A : 14%|
|BBB : 36%||Baa : 39%|
|BB : 18%||Ba : 15%|
|B : 14%||B : 11%|
|CCC : 7%||Caa : 7%|
|CC : 0%||Ca : 3%|
|Not Rated : 4%||Not Rated : 9%|
as of 03/25/2015 Maturity
|Years||% of Fund|
|0 - 1 years||0.00|
|1 - 5 years||13.71|
|5 - 10 years||36.84|
|10 - 15 years||4.78|
|15 - 20 years||11.74|
|20 - 25 years||14.21|
|25 years and over||18.72|
as of 03/25/2015Top Fixed-Income Holdings | View All
|Holding Name||Coupon Rate||Maturity Date||Next Call Date||S&P / Moody's Rating†||Weight|
|Romanian Government International Bond||6.75%||02/07/2022||N/A||BBB-/Baa3||1.84%|
|Republic of Latvia||2.75%||01/12/2020||N/A||A-/A3||1.83%|
|Republic of Latvia||5.25%||06/16/2021||N/A||A-/A3||1.82%|
|Romanian Government International Bond||4.38%||08/22/2023||N/A||BBB-/Baa3||1.80%|
|Morocco Government International Bond||5.50%||12/11/2042||N/A||BBB-/NA||1.78%|
|Morocco Government International Bond||4.25%||12/11/2022||N/A||BBB-/NR||1.78%|
|Venezuela Government International Bond||7.75%||10/13/2019||N/A||CCC/Caa3||1.34%|
|Russian Foreign Bond - Eurobond||5.62%||04/04/2042||N/A||BB+/Ba1||1.34%|
|Russian Foreign Bond - Eurobond||5.88%||09/16/2043||N/A||BB+/Ba1||1.33%|
|Russian Foreign Bond - Eurobond||4.88%||09/16/2023||N/A||BB+/Ba1||1.29%|
Holdings are subject to change and are not buy/sell recommendations.
Distributions | View All | Distribution Information
|Ex-Date||Record Date||Pay Date||$/
|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||3||0||0||8||2||0|
Fund Inception: 10/11/2007
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 is considered non-diversified and may be subject to greater risks than a diversified fund.
The Fund may invest in illiquid securities, resulting in a decline of the Fund's returns.
Global bonds are subject to the same risks as other debt issues, notably credit risk, market risk, interest rate risk and liquidity risk. Investments in the securities of non-US issuers involve risks beyond those associated with investments in US securities, including greater market volatility, the availability of less reliable financial information, higher transactional costs, taxation by foreign governments, decreased market liquidity and political instability. Investment in securities in emerging market countries involves risks not associated with investments in securities in developed countries.
The Fund will invest in foreign bonds and, because foreign exchanges may be open on days when the Fund does not price its shares, the value of the non-US securities in the Fund's portfolio may change on days when you will not be able to purchase or sell your shares.
Sovereign debt securities are subject to the additional risk that - under some political, diplomatic, social or economic circumstances - some developing countries that issue lower quality debt securities may be unable or unwilling to make principal or interest payments as they come due. The fund may have limited legal recourse against the issuer and/or guarantor of sovereign debt when default occurs. As a holder of government debt, the Fund may be requested to participate in the rescheduling of such debt and to extend further loans to government debtors.
Government obligors in emerging market countries are among the world's largest debtors to commercial banks, other governments, international financial organizations and other financial institutions.
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.
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.
The JP Morgan Emerging Markets Bond Index Global (EMBI Global) is an unmanaged index that tracks debt securities of emerging markets.
Deutsche Bank Securities Inc. is the Index Provider for the PowerShares Emerging Markets Sovereign Debt Portfolio. DB is not affiliated with the Trust, the Adviser or the Distributor. The Adviser has entered into a license agreement with the Index Provider to use the Deutsche Bank Emerging Market U.S. Dollar Balanced Liquid Index. The PowerShares Emerging Markets Sovereign Debt Portfolio is entitled to use the Deutsche Bank Emerging Market U.S. Dollar Balanced Liquid Index pursuant to a sub-licensing arrangement with the Adviser.
Beta is a measure of risk representing how a security is expected to respond to general market movements. Smart Beta represents an alternative and selection index based methodology that seeks to outperform a benchmark or reduce portfolio risk, or both. Smart beta funds may underperform cap-weighted benchmarks and increase portfolio risk.