PowerShares Active Mega Cap Fund (the Fund) is an exchange-traded fund that seeks to achieve long-term capital appreciation. The Fund’s universe includes the holdings of the Russell Top 200 Index, as well as other mega-cap stocks that meet certain liquidity requirements. All stocks in the universe are evaluated by Invesco Institutional (N.A.), Inc.’s (sub-advisor) stock selection model. The model is based on several factors relating to four main concepts: earnings momentum, price trend, management action and relative value. Each stock is ranked by this model, and the result is a weight-of-the-evidence forecast of the expected annual forecasted excess return for each stock compared to other stocks within their respective industry for the next month. In addition, each stock is evaluated for risk using at least 17 variables. The Fund’s investment advisor is Invesco PowerShares Capital Management LLC.