The PowerShares FTSE RAFI Basic Materials Sector Portfolio is based on the FTSE RAFI Basic Materials Sector Index (ICB Supersector 1000). The Index is designed to track the performance of the largest U.S. basic materials equities, selected based on the following four fundamental measures of firm size: book value, income, sales and dividends. The U.S. basic materials equities with the highest fundamental strength are weighted by their fundamental scores. The fundamentally weighted portfolio is rebalanced and reconstituted annually.

The PowerShares FTSE RAFI Utilities Sector Portfolio is based on the FTSE RAFI Utilities Sector Index (ICB Supersector 7000). The Index is designed to track the performance of the largest U.S. utilities equities, selected based on the following four fundamental measures of firm size: book value, income, sales and dividends. The U.S. utilities equities with the highest fundamental strength are weighted by their fundamental scores. The fundamentally weighted portfolio is rebalanced and reconstituted annually.

The PowerShares FTSE RAFI Health Care Sector Portfolio is based on the FTSE RAFI Health Care Sector Index (ICB Supersector 4000). The Index is designed to track the performance of the largest U.S. healthcare equities, selected based on the following four fundamental measures of firm size: book value, income, sales and dividends. The U.S. healthcare equities with the highest fundamental strength are weighted by their fundamental scores. The fundamentally weighted portfolio is rebalanced and reconstituted annually.

The PowerShares FTSE RAFI Consumer Services Sector Portfolio is based on the FTSE RAFI Consumer Services Sector Index (ICB Supersector 5000). The Index is designed to track the performance of the largest U.S. consumer services equities, selected based on the following four fundamental measures of firm size: book value, income, sales and dividends. The U.S. consumer services equities with the highest fundamental strength are weighted by their fundamental scores. The fundamentally weighted portfolio is rebalanced and reconstituted annually.

The PowerShares FTSE RAFI Consumer Goods Sector Portfolio is based on the FTSE RAFI Consumer Goods Sector Index (ICB Supersector 3000). The Index is designed to track the performance of the largest U.S. consumer goods equities, selected based on the following four fundamental measures of firm size: book value, income, sales and dividends. The U.S. consumer goods equities with the highest fundamental strength are weighted by their fundamental scores. The fundamentally weighted portfolio is rebalanced and reconstituted annually.

The PowerShares FTSE RAFI Telecommunications & Technology Sector Portfolio is based on the FTSE RAFI Telecommunications & Technology Sector Index (ICB Supersectors 6000 & 9000). The Index is designed to track the performance of the largest U.S. telecommunications and technology equities, selected based on the following four fundamental measures of firm size: book value, income, sales and dividends. The U.S. telecommunication and technology equities with the highest fundamental strength are weighted by their fundamental scores. The fundamentally weighted portfolio is rebalanced and reconstituted annually.

The PowerShares FTSE RAFI Financials Sector Portfolio is based on the FTSE RAFI Financials Sector Index (ICB Supersector 8000). The Index is designed to track the performance of the largest U.S. financial equities, selected based on the following four fundamental measures of firm size: book value, income, sales and dividends. The U.S. financial equities with the highest fundamental strength are weighted by their fundamental scores. The fundamentally weighted portfolio is rebalanced and reconstituted annually.

The PowerShares FTSE RAFI Industrials Sector Portfolio is based on the FTSE RAFI Industrials Sector Index (ICB Supersector 2000). The Index is designed to track the performance of the largest U.S. industrial equities, selected based on the following four fundamental measures of firm size: book value, income, sales and dividends. The U.S. industrial equities with the highest fundamental strength are weighted by their fundamental scores. The fundamentally weighted portfolio is rebalanced and reconstituted annually.

The PowerShares FTSE RAFI Energy Sector Portfolio is based on the FTSE RAFI Oil & Gas Sector Index (ICB Supersector 0001). The Index is designed to track the performance of the largest U.S. oil and gas equities, selected based on the following four fundamental measures of firm size: book value, income, sales and dividends. The U.S. oil and gas equities with the highest fundamental strength are weighted by their fundamental scores. The fundamentally weighted portfolio is rebalanced and reconstituted annually.