PowerShares FTSE RAFI US 1500 Small-Mid Portfolio (the Fund) seeks investment results that correspond generally to the equity index named the FTSE RAFI US 1500 Small-Mid Index (the Index). The Fund will invest at least 90% of its total assets in common stocks that comprise the Index. The Index comprises approximately 1,485 United States stocks. The Index is designed to track the performance of small and medium-sized United States equity stocks selected based on four fundamental measures of firm size, including book value, income, cash flow and dividends. The Fund invests in all of the stocks comprising the Index in proportion to their weightings in the Index. However, under various circumstances, the Fund may purchase a sample of stocks in the Index, or the adviser may choose to overweight another stock in the Index or purchase stocks not in the Index. Its investment adviser is Invesco PowerShares Capital Management LLC.