Fund Description: Invesco FTSE RAFI Developed Markets ex-U.S. ETF, formerly PowerShares FTSE RAFI Developed Markets ex-U.S. 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, a registered investment company. INVESTMENT OBJECTIVE: The Invesco FTSE RAFI Developed Markets ex-U.S. ETF seeks investment results that correspond (before fees and expenses) generally to the price and yield performance of the equity index called the FTSE RAFI Developed ex US Index. INDEX DESCRIPTION: The FTSE RAFI Developed ex US Index is designed to track the performance of the companies domiciled in developed markets with the largest fundamental value, selected from the constituents of the FTSE RAFI Developed ex US Large/Mid-Cap Indexes as determined by FTSE (the "Index Provider"). The equities are selected and weighted based on the following four fundamental measures of firm size: book value, cash flow, sales and dividends. As of March 31, 2007, the FTSE RAFI Developed ex US Index consisted of 1,019 securities of companies with market capitalizations of between approximately $914 million and $218.6 billion that were domiciled in Australia, Austria, Belgium, Canada, China, Denmark, Finland, France, Germany, Greece, Hong Kong, Ireland, Italy, Japan, Luxembourg, the Netherlands, New Zealand, Norway, Portugal, Singapore, Spain, Sweden, Switzerland, Thailand and the United Kingdom or primarily listed on an exchange in such countries. The Index is adjusted annually. FUND STRATEGY: The Fund will normally invest at least 90% of its total assets in stocks that comprise the FTSE RAFI Developed Markets ex US Index and ADRs based on the stocks in the FTSE RAFI Developed ex US Index. The Fund will normally invest at least 80% of its total assets in securities of companies originating in countries that are classified as "developed" within FTSE's country classification definition, excluding the United States. 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.