The PowerShares Preferred Portfolio is based on The BofA Merrill Lynch Core Plus Fixed Rate Preferred Securities Index. The Fund will normally invest at least 80% of its total assets in fixed rate U.S. dollar-denominated preferred securities that comprise the Index. The Index tracks the performance of fixed rate U.S. dollar denominated preferred securities issued in the U.S. domestic market. (Securities must be rated at least B3, based on an average of three leading ratings agencies: Moody’s, S&P and Fitch) and must have an investment-grade country risk profile (based on an average of Moody’s, S&P and Fitch foreign currency long-term sovereign debt ratings). The Index is rebalanced and reconstituted on a monthly basis.<BR><BR><STRONG>Effective April 2, 2012, the Fund’s index changed from The BofA Merrill Lynch Core Fixed Rate Preferred Securities Index to The BofA Merrill Lynch Core Plus Fixed Rate Preferred Securities Index.</STRONG>