Fund Description: Invesco FTSE RAFI Emerging Markets ETF, formerly PowerShares FTSE RAFI Emerging Markets 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 FTSE RAFI Emerging Markets ETF seeks investment results that correspond (before fees and expenses) generally to the price and yield of the index called the the FTSE RAFI Emerging Index. INDEX DESCRIPTION: The FTSE RAFI Emerging Index is designed to track the performance of the emerging market stocks with the highest ranking cumulative score, selected from the constituents of the FTSE Emerging Large/Mid Cap Index, as determined by FTSE (the "Index Provider"). The securities are selected and weighted based on the following four fundamental measures of firm size: book value, cash flow, sales and dividends. As of September 5, 2007, the FTSE RAFI Emerging Index consisted of approximately 350 securities of companies issued by companies with market capitalizations of between approximately $401.6 million and $278.2 billion that were domiciled in Argentina, Brazil, Chile, China, Colombia, Czech Republic, Egypt, Hong Kong, Hungary, India, Indonesia, Israel, Luxembourg, Malaysia, Mexico, Morocco, Pakistan, Philippines, Poland, Russia, South Africa, South Korea, Taiwan, Thailand and Turkey. 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 Emerging Index and ADRs based on the stocks in the FTSE RAFI Emerging Index. The Fund anticipates that the majority of its investments will be in the stocks that comprise the Underlying Index rather than in ADRs. The Fund will normally invest at least 80% of its total assets in securities of companies that are classified as emerging market within FTSE's country classification definition. 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.