SOURCE: PowerShares Capital Management

October 22, 2007 08:57 ET

PowerShares Empowers Investors With Intelligent Municipal Bond Indexes

CHICAGO, IL--(Marketwire - October 22, 2007) - PowerShares Capital Management LLC, a leading provider of exchange-traded funds (ETFs), this week launched three insured municipal bond portfolios based on Merrill Lynch indexes that have consistently outperformed other municipal indexes over longer time periods. The PowerShares National Insured Municipal Bond Portfolio, as well as the California and New York insured portfolios, began trading Oct. 11, 2007, at the American Stock Exchange.

"PowerShares' municipal bond ETFs are based on robust indexes whose components are selected on criteria such as high credit ratings and high tax-free yield characteristics -- qualities that are attractive to investors," said Bruce Bond, president and CEO of PowerShares.

The Merrill Lynch indexes have exhibited strong total annualized returns when compared to municipal bond indexes offered by S&P and Lehman. They also have rules that exclude holdings subject to alternative minimum tax (AMT), an important consideration for many investors. "PowerShares' insured municipal bond ETFs provide investors additional value by replicating these intelligent, enhanced indexes," Bond said.

The following chart compares the performance of municipal bond indexes on credit quality, yield and total annualized return (index data as of Aug. 31, 2007).


                                     S&P /
                                    Moody’s
                                    Average              Tax
Index               ETF       #     credit Effective equivalent   Yield to
 name/Provider    sponsor  holdings rating duration     yield %    Worst%
                 --------- -------- ------ --------  ---------- ----------
Merrill Lynch
 National
 Insured
 Long-Term Core
 Municipal
 Securities
 Index           PowerShares   868     AAA    12.03       7.32*        4.76

S&P National
 Municipal Bond
 Index              BGI      3,069 AA+/Aa1     7.65        6.63        4.31

Lehman Municipal
 Managed Money
 Index              SSgA      22,748 AA+/Aa1   8.42         6.6        4.29



Index Performance %
(total return annualized)          1-yr   3-yr   5-yr   10-yr
-------------------------          ----   ----   ----   -----

Merrill Lynch National
 Insured Long-Term Core
 Municipal Securities Index        1.09   4.54   5.34    5.99

S&P National Municipal Bond
 Index                             2.44   3.79   N/A      N/A
Lehman Municipal Managed Money
 Index                             2.03   3.35   4.19    5.47

Sources: Merrill Lynch; S&P National Municipal Bond Index fact sheet, Aug. 31, 2007; SPDR Lehman Municipal Bond ETF fact sheet, Aug. 31, 2007. Index inception dates are as follows: Merrill Lynch National Insured Long-Term Core Municipal Securities Index - 12/31/1996, S&P National Municipal Bond Index - 9/11/07 and Lehman Municipal Managed Money Index - 07/01/1993.

Performance data quoted represents past performance. Past performance is not a guarantee of future results, current performance may be higher or lower than performance quoted.

The Index performance results for the Merrill Lynch National Insured Long-Term Core Municipal Securities Index are hypothetical. Returns do not represent Fund returns. The PowerShares Insured National Municipal Bond Portfolio, on which the Index is based, is a new fund and therefore has no performance information to report. An investor cannot invest directly in an index. The index does not charge management fees or brokerage expenses, and no such fees or expenses were deducted from the hypothetical performance shown nor does the index lend securities, and no revenues from securities lending were added to the performance shown. In addition, the results actual investors might have achieved would have differed from those shown because of differences in the timing, amounts of their investments, and fees and expenses associated with an investment in the Fund.

* PowerShares does not offer tax advice. Only interest paid by the bonds and income dividends collected by the ETF and passed through to investors is tax exempt and may be subject to state and local taxes. Please contact your tax advisor for information regarding your own tax situation. Federally tax-exempt yields shown are for illustrative purposes only and do not represent or predict the tax-exempt yield of this portfolio. Tax rates represent the three highest federal tax rates as of 2007. Taxable Equivalent Yields do not take into account the potential effects of capital gains taxes, state and/or local taxes, or the federal alternative minimum tax.

Effective duration is a calculation for bonds with embedded options and accounts for expected cash flow fluctuation as interest rates change. Yield to worst is the yield to maturity if the worst possible bond repayment takes place.

The PowerShares Insured National Municipal Bond Portfolio (Symbol: PZA) is based on the Merrill Lynch National Insured Long-Term Core Municipal Securities Index(SM). The PowerShares Insured California Municipal Bond Portfolio (Symbol PWZ) is based on the Merrill Lynch California Insured Long-Term Core Municipal Securities Index(SM). And the PowerShares Insured New York Municipal Bond Portfolio (Symbol PZT) is based on the Merrill Lynch New York Insured Long-Term Core Municipal Securities Index(SM).

PowerShares Capital Management LLC is leading the intelligent ETF revolution through its family of more than 90 domestic and international exchange-traded funds, which seek to outperform traditional benchmark indexes while providing advisors and investors access to an innovative array of focused investment opportunities. With franchise assets of nearly $35 billion, PowerShares ETFs trade on all three U.S. stock exchanges and the PowerShares QQQ™, which tracks 100 of the NASDAQ's fastest-growing companies, is the most actively traded equity security in the world. For more information, please visit us at www.powershares.com.

PowerShares is a part of INVESCO PLC, a leading independent global investment manager dedicated to helping people worldwide build their financial security. Operating under the AIM, AIM Trimark, Atlantic Trust, Invesco Perpetual, PowerShares and WL Ross & Co. brands, INVESCO PLC strives to deliver outstanding products and services through a comprehensive array of enduring investment solutions for its retail, institutional and private wealth management clients around the world. The company, which had approximately $507 billion in assets under management as of Sept. 30, 2007, is listed on the London, New York and Toronto stock exchanges with the symbol "IVZ." Additional information is available at www.invesco.com.

Risks of Owning Exchange-Traded Funds

Exchange-traded funds are made up of publicly traded securities that can and will move higher and lower with market movements. You should anticipate that the value of the shares of each fund will advance or decline more or less in correlation with the advance or decline in value of the applicable index. The Funds are not actively managed, and shares of the Funds may trade at or below the Funds' NAV. Exchange-traded funds are subject to risks similar to those of stocks, including risks associated with short-selling and margin account maintenance. Ordinary brokerage commissions apply.

An investor should consider the Fund's investment objectives, risks, charges and expenses carefully before investing. For this and more complete information about the Fund, call 800.983.0903. Please read the prospectus carefully before investing.

The Merrill Lynch National Insured Long-Term Core Municipal Securities, S&P National Municipal Bond and Lehman Municipal Managed Money Indexes are unmanaged indexes used as a measurement of change in municipal bond market conditions based on the average performance of approximately 868, 3,069 and 22,748 municipal securities, respectively.

Only interest paid by the bonds and income dividends collected by the ETF and passed through to investors is tax exempt and may be subject to state and local taxes. Please contact your tax advisor for information regarding your own tax situation.

Federally tax-exempt yields and tax rates shown are for illustrative purposes only and do not represent or predict the tax-exempt yield of this portfolio or any actual investment. Tax rates represent the three highest federal tax rates as of 2007. Taxable Equivalents Yields do not take into account the potential effects of capital gains taxes, state and/or local taxes, or the federal alternative minimum tax.

Municipal securities are subject to risks including, but not limited to risks associated with litigation, legislation, changes in taxation, or other political events, local business or economic conditions, bankruptcy of the issuer or other circumstances that could have a significant effect on an issuer's ability to make payments of principal and/or interest. In addition, changes in the financial condition of an individual municipal insurer or conditions of the market in which the project was financed can affect the overall municipal market. There is no guarantee that the Fund's income will be exempt from federal or state income taxes.

A substantial portion of the municipal securities held by the PowerShares Insured National Municipal Bond Fund will be covered by insurance that guarantees the bond's scheduled payment of interest and repayment of principal. Municipal security insurance does not insure against market fluctuations or fluctuations in the Fund's share price. In addition, a municipal security insurance policy will not cover: (i) repayment of a municipal security before maturity (redemption), (ii) prepayment or payment of an acceleration premium (except for a mandatory sinking fund redemption) or any other provision of a bond indenture that advances the maturity of the bond or (iii) nonpayment of principal or interest caused by negligence or bankruptcy of the paying agent.

"Merrill Lynch" and "Merrill Lynch National Insured Long-Term Core Municipal Securities Index(SM)," "Merrill Lynch California Insured Long-Term Core Municipal Securities Index(SM)," and "Merrill Lynch New York Insured Long-Term Core Municipal Securities Index(SM)" are reprinted with permission. © Copyright 2007 Merrill Lynch, Pierce, Fenner & Smith Incorporated. All rights reserved. "Merrill Lynch" and "Merrill Lynch National Insured Long-Term Core Municipal Securities Index(SM)," "Merrill Lynch California Insured Long-Term Core Municipal Securities Index(SM)," and "Merrill Lynch New York Insured Long-Term Core Municipal Securities Index(SM)" are service marks of Merrill Lynch and have been licensed for use for certain purposes by PowerShares Capital Management LLC. The PowerShares Insured National Municipal Bond Portfolio, PowerShares Insured California Municipal Bond Portfolio , and PowerShares Insured New York Municipal Bond Portfolio are based on the Merrill Lynch National Insured Long-Term Core Municipal Securities Index(SM), Merrill Lynch California Insured Long-Term Core Municipal Securities Index(SM), and Merrill Lynch New York Insured Long-Term Core Municipal Securities Index(SM), respectively, and are not sponsored, endorsed, sold or promoted by Merrill Lynch. Merrill Lynch, as Index Provider, makes no representation, express or implied, regarding the advisability of investing in this product or the Index and does not guarantee the quality, accuracy or completeness of the Index or any Index related data included herein or derived there from and assumes no liability in connection with their use. As the Index Provider, Merrill Lynch is licensing certain trademarks, the underlying Index and trade names which are composed by Merrill Lynch without regard to PowerShares, the Issuer, this product or any investor.

PowerShares® and Leading the Intelligent ETF Revolution® are registered marks of PowerShares Capital Management LLC. A I M Distributors, Inc. is the distributor of the PowerShares Exchange-Traded Fund Trust and the PowerShares Global Exchange-Traded Fund Trust. ALPS Distributors, Inc. is the distributor of PowerShares QQQ. PowerShares QQQ is a unit investment trust. PowerShares Capital Management LLC and A I M Distributors, Inc. are not affiliated with ALPS Distributors, Inc.

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