Fund Description: Invesco Emerging Markets Sovereign Debt ETF, formerly PowerShares Emerging Markets Sovereign Debt Portfolio is an exchange-traded index fund or Index ETF which is a separate portfolio of the Invesco Exchange-Traded Fund Trust II, formerly PowerShares Exchange-Traded Fund Trust II, an open-end investment management company. INVESTMENT OBJECTIVE: The Invesco Emerging Markets Sovereign Debt ETF seeks investment results that correspond generally to the price and yield (before fees and expenses) of the DB Emerging Market USD Liquid Balanced Index. INDEX DESCRIPTION: The DB Emerging Market USD Liquid Balanced Index, is a benchmark index that measures potential returns of a theoretical portfolio of liquid emerging markets U.S. dollar-denominated government bonds. Deutsche Bank Securities Inc. ("DB" or the "Index Provider") selects zero to three securities from each of the 17 emerging market countries set forth below that a) is denominated in U.S. dollars, b) is a sovereign bond, c) has more than three years to maturity and d) has an outstanding float of at least $500 million. As of August 31, 2007, the DB Emerging Market USD Liquid Balanced Index included approximately 25 bonds issued by Mexico, Panama, Peru, Uruguay, Venezuela, Bulgaria, Russia, South Africa, Turkey, Ukraine, Brazil, Colombia, Indonesia, Korea, Philippines, Qatar, Argentina, El Salvador and Vietnam. The countries in the DB Emerging Market USD Liquid Balanced Index are re-selected on an annual basis and the membership list is rebalanced on a quarterly basis. FUND STRATEGY: The Fund will normally invest at least 80% of its total assets in emerging markets U.S. dollar-denominated government bonds. The Fund will normally invest at least 90% of its total assets in the securities that comprise the DB Emerging Market USD Liquid Balanced Index. The Fund, using an "indexing" investment approach, attempts to replicate, before fees and expenses, the performance of the Index. The Adviser seeks correlation over time of 0.95 or better between the Fund's performance and the performance of the Index; a figure of 1.00 would represent perfect correlation. The Fund generally will invest in all of the securities comprising the Index in proportion to their weightings in the Index. However, under various circumstances, it may not be possible or practicable to purchase all of those securities in those weightings. In those circumstances, the Fund may purchase a sample of securities in the Index as a whole. There may also be instances in which the Adviser may choose to overweight another security in the Index, purchase securities not in the Index which the Adviser believes are appropriate to substitute for certain securities in the Index or utilize various combinations of other available investment techniques, in seeking to track the Index. The Fund may sell securities that are represented in the Index in anticipation of their removal from the Index or purchase securities not represented in the Index in anticipation of their addition to the Index. FUND MANAGEMENT: Invesco Capital Management LLC serves as the investment adviser to the Fund.