UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM N-CSR

CERTIFIED SHAREHOLDER REPORT OF REGISTERED
MANAGEMENT INVESTMENT COMPANIES

Investment Company Act file number			811-21977
PowerShares Exchange-Traded Fund Trust II
(Exact name of registrant as specified in charter)
301 W. Roosevelt Road Wheaton, IL					60187
(Address of principal executive offices)					(Zip code)
H. Bruce Bond Chairman and Chief Executive Officer 301 W. Roosevelt Road Wheaton, IL 60187
(Name and address of agent for service)
Registrant’s telephone number, including area code:				800-983-0903
Date of fiscal year end:	October 31
Date of reporting period:		October 31, 2007

Item 1. Reports to Stockholders.

The Registrant’s annual report transmitted to shareholders pursuant to Rule 30e-1 under the Investment Company Act of 1940 is as follows:

2007 Annual Report to Shareholders

31 October 2007

PowerShares Dynamic Asia Pacific Portfolio

PowerShares Dynamic Developed International Opportunities Portfolio

PowerShares Dynamic Europe Portfolio

PowerShares Global Clean Energy Portfolio

PowerShares Global Water Portfolio

PowerShares International Listed Private Equity Portfolio

PowerShares FTSE RAFI Asia Pacific ex-Japan
Portfolio

PowerShares FTSE RAFI Asia Pacific ex-Japan Small-Mid Portfolio

PowerShares FTSE RAFI Developed Markets
ex-U.S. Portfolio

PowerShares FTSE RAFI Developed Markets ex-U.S. Small-Mid Portfolio

PowerShares FTSE RAFI Emerging Markets Portfolio

PowerShares FTSE RAFI Europe Portfolio

PowerShares FTSE RAFI Europe Small-Mid Portfolio

PowerShares FTSE RAFI Japan Portfolio

PowerShares 1-30 Laddered Treasury Portfolio

PowerShares Emerging Markets Sovereign
Debt Portfolio

PowerShares Insured National Municipal
Bond Portfolio

PowerShares Insured California Municipal
Bond Portfolio

PowerShares Insured New York Municipal
Bond Portfolio

Table of Contents

Shareholder Letter	2
The Market Environment	3
Manager's Analysis	4
Funds' Distribution History	43
Frequency Distribution of Discounts & Premiums	44
Fees and Expenses	46
Schedules of Investments
PowerShares Dynamic Asia Pacific Portfolio	51
PowerShares Dynamic Developed International Opportunities Portfolio	53
PowerShares Dynamic Europe Portfolio	57
PowerShares Global Clean Energy Portfolio	61
PowerShares Global Water Portfolio	63
PowerShares International Listed Private Equity Portfolio	64
PowerShares FTSE RAFI Asia Pacific ex-Japan Portfolio	65
PowerShares FTSE RAFI Asia Pacific ex-Japan Small-Mid Portfolio	67
PowerShares FTSE RAFI Developed Markets ex-U.S. Portfolio	70
PowerShares FTSE RAFI Developed Markets ex-U.S. Small-Mid Portfolio	81
PowerShares FTSE RAFI Emerging Markets Portfolio	95
PowerShares FTSE RAFI Europe Portfolio	98
PowerShares FTSE RAFI Europe Small-Mid Portfolio	104
PowerShares FTSE RAFI Japan Portfolio	111
PowerShares 1-30 Laddered Treasury Portfolio	115
PowerShares Emerging Markets Sovereign Debt Portfolio	116
PowerShares Insured National Municipal Bond Portfolio	117
PowerShares Insured California Municipal Bond Portfolio	119
PowerShares Insured New York Municipal Bond Portfolio	121
Statements of Assets and Liabilities	124
Statements of Operations	128
Statements of Changes in Net Assets	132
Financial Highlights	136
Notes to Financial Statements	146
Report of Independent Registered Public Accounting Firm	158
Supplemental Information (Unaudited)	159
Information about Advisory Agreement (Unaudited)	165

To My Fellow Investors,

It gives me great pleasure to report on the state of your investment(s) in PowerShares Exchange-Traded Funds and to thank you for your continued confidence in PowerShares Capital Management LLC. Let me share with you some of my excitement as the launch of these new global funds demonstrates PowerShares continued quest to expand your opportunities to invest in PowerShares Exchange-Traded funds.

Since the launch of the initial five PowerShares global funds on June 13, 2007, we have now launched an additional 14 new funds, including our first group of fixed income funds. These include the first three ETF's based upon insured municipal bonds; our Insured National Muni bond fund and our two insured state muni bond funds, one for New York and a second for California. Our PowerShares 1-30 Laddered Treasury fund is a tool that will help investors invest across the entire yield curve.

Our new funds also include a set of global funds which will enable investors to invest in securities listed on exchanges around the world utilizing the same Intelligent Index, Intelligent Access and Intelligent Exposure they have come to expect from PowerShares.

Our challenge is to continue to provide some of the investment vehicles to help you achieve your financial goals. Over the past two months we launched five new funds, two fixed income funds and three international equity funds. It is our desire to provide you with the intelligent access, exposure and indices to the global marketplace as well as the U.S. market.

During November and December of 2007 our sister company, PowerShares Capital Management, Ireland, has launched 13 new funds which trade on a number of the European stock exchanges. The expansion onto the European exchanges represents another milestone for our management team.

On behalf of PowerShares Capital Management LLC and the Board of Trustees for the PowerShares Exchanged-Traded Fund Trust II, I want to thank you for you participation in the PowerShares family of exchange-traded funds. We look forward to serving you in the future.

Highest Regards,

H. Bruce Bond

President and Chairman of the Board of Trustees
PowerShares Exchange-Traded Fund Trust

2

The Market Environment

Many global currencies, most notably the Euro, reached new record highs vs. the U.S. dollar during the period ended October 31, 2007. Perception that U.S. short-term interest rates would continue to be lowered by the Fed in response to the ongoing U.S. credit crunch as well as a recycling of petrodollars into European banks were both considered major causes for significant dollar outflows. China's rampant economic growth in 2007 (relative to the rest of the world) resulted in an equity market which provided triple-digit total returns. Partially in reaction to the strong appreciation of global commodity prices, emerging market equities from nations such as Brazil, India, and South Korea also experienced relatively strong gains in 2007. Global debt markets were the tale of two stories: developed government bonds rallied while high yield issues suffered in the wake of the U.S. credit crisis, which spread overseas. Similar to the equity asset class, emerging market debt significantly outperformed its developed market peers.

Many of these funds represent the initial application of PowerShares "Intellidexes" to securities listed on foreign stock exchanges. This has resulted in different mechanisms of acquiring the securities in the fund and sometimes a small difference in the composition of the fund's holdings compared to the underlying index. When these factors are combined with the diversification requirements, desired tax efficiency for the fund, and short initial fiscal period, the difference of the fund's performance compared with its underlying index has, in a few cases, been greater than Powershares' funds' historical performance.

3

Manager's Analysis

PowerShares Dynamic Asia Pacific Portfolio (ticker: PUA)

The PowerShares Dynamic Asia Pacific Portfolio is based on the QSG Asia-Pacific Opportunities Index, which seeks to identify stocks of Asia-Pacific companies that possess the greatest potential for capital appreciation. The Index is constructed pursuant to QSG proprietary methodology, which evaluates, ranks and sorts more than 10,000 global securities using a proprietary multi-factor model that is based on numerous measures of expected outperformance. The Index is rebalanced and reconstituted quarterly.

Sector Breakdown (% of the Fund's

Net Assets) as of 31 October 2007

Financials	34.3
Industrials	20.1
Materials	13.0
Energy	8.0
Telecommunication Services	7.8
Consumer Discretionary	6.6
Information Technology	4.1
Utilities	3.7
Consumer Staples	1.6
Health Care	0.3
Money Market Fund	0.8
Other	(0.3	)

Style Allocation (%)

as of 31 October 2007

Mid-Cap Value	28.9
Small-Cap Value	21.8
Small-Cap Growth	17.3
Large-Cap Value	13.4
Large-Cap Growth	9.9
Mid-Cap Growth	8.7

Top Ten Fund Holdings (% of the Fund's

Net Assets) as of 31 October 2007

Security
Jubilee Mines NL	1.6
China Shipping Container Lines Co. Ltd., H-Shares	1.3
STX Pan Ocean Co. Ltd.	1.2
Jiangxi Copper Co. Ltd., H-Shares	1.1
Labroy Marine Ltd.	1.1
PICC Property & Casualty Co. Ltd., H-Shares	1.1
CNOOC Ltd.	1.1
Pacific Basin Shipping Ltd.	1.1
OneSteel Ltd.	1.1
Telecom Corp. of New Zealand Ltd.	1.0
Total	11.7

4

Manager's Analysis (Continued)

PowerShares Dynamic Asia Pacific Portfolio (ticker: PUA)

  Fund Performance History (%)  As of 31 October 2007

Index

	Fund Inception Cumulative
QSG Asia-Pacific Opportunities Index		31.26
MSCI Pacific Index		7.04
MSCI EAFE Index		8.86

Fund

NAV Return	29.63
Share Price Return	31.41

Fund Inception: 13 June 2007

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. Investment returns and principal value will fluctuate and shares, when redeemed, may be worth more or less than their original cost. The shares performance reflects fee waivers, absent which, performance would have been lower. According to the Fund's most recent prospectus, the expense ratio of 0.80% is expressed as a unitary fee to cover expenses incurred in connection with managing the portfolio. NAV and Share Price returns assume that dividends and capital gain distributions have been reinvested in the Fund at NAV and Share Price, respectively. The returns shown in the table above do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption or sale of Fund Shares. See powershares.com to find the most recent month-end performance numbers.The index performance results are based upon a hypothetical investment in its constituent securities. Index returns do not represent Fund returns. 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.

The MSCI Pacific Index and MSCI EAFE Index are unmanaged indices used as a measurement of change in stock market conditions based on the average performance of approximately 558 and 1,137 common stocks, respectively.

5

Manager's Analysis

PowerShares Dynamic Developed International Opportunities Portfolio (ticker: PFA)

The PowerShares Dynamic Developed International Opportunities Portfolio is based on the QSG Developed International Opportunities Index, which seeks to identify global equities with strong potential for capital appreciation. The Index is constructed pursuant to QSG proprietary methodology, which evaluates, ranks and sorts more than 10,000 global securities using a proprietary multifactor model that is based on numerous measures of expected outperformance. The Index is rebalanced monthly and reconstituted annually.

Sector Breakdown (% of the Fund's

Net Assets) as of 31 October 2007

Financial	34.7
Industrials	20.0
Materials	19.3
Consumer Discretionary	15.5
Energy	8.4
Information Technology	2.9
Telecommunication Services	2.5
Utilities	1.0
Consumer Staples	0.4
Money Market Fund	0.1
Other	(4.8	)

Style Allocation (%)

as of 31 October 2007

Large-Cap Value	23.5
Mid-Cap Value	20.9
Small-Cap Value	17.7
Small-Cap Growth	15.2
Mid-Cap Growth	14.4
Large-Cap Growth	8.3

Top Ten Fund Holdings (% of the Fund's

Net Assets) as of 31 October 2007

Security
Kobe Steel Ltd.	1.2
PetroChina Co. Ltd., H-Shares	0.7
China TeleCom Corp Ltd., H-Shares	0.6
Hypo Real Estate Holding AG	0.6
Dragon Oil PLC	0.6
Eramet	0.6
Sumitomo Metal Mining Co. Ltd.	0.6
Singapore Petroleum Co. Ltd.	0.6
Porsche AG	0.6
Jardine Cycle & Carriage Ltd.	0.6
Total	6.7

6

Manager's Analysis (Continued)

PowerShares Dynamic Developed International Opportunities Portfolio (ticker: PFA)

  Fund Performance History (%)  As of 31 October 2007

Index

	Fund Inception Cumulative
QSG Developed International Opportunities Index		9.10
MSCI EAFE Index		8.86
S&P 500 Index		2.87

Fund

NAV Return	8.42
Share Price Return	8.51

Fund Inception: 13 June 2007

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. Investment returns and principal value will fluctuate and shares, when redeemed, may be worth more or less than their original cost. The shares performance reflects fee waivers, absent which, performance would have been lower. According to the Fund's most recent prospectus, the expense ratio of 0.75% is expressed as a unitary fee to cover expenses incurred in connection with managing the portfolio. NAV and Share Price returns assume that dividends and capital gain distributions have been reinvested in the Fund at NAV and Share Price, respectively. The returns shown in the table above do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption or sale of Fund Shares. See powershares.com to find the most recent month-end performance numbers.The index performance results are based upon a hypothetical investment in its constituent securities. Index returns do not represent Fund returns. 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.

The MSCI EAFE Index and S&P 500 Index are unmanaged indices used as a measurement of change in stock market conditions based on the average performance of approximately 1,137 and 500 common stocks, respectively.

7

Manager's Analysis

PowerShares Dynamic Europe Portfolio (ticker: PEH)

The PowerShares Dynamic Europe Portfolio is based on the QSG Active Europe Index, which seeks to identify stocks of European companies that possess the greatest potential for capital appreciation. The Index is constructed pursuant to QSG proprietary methodology, which evaluates, ranks and sorts more than 10,000 global securities using a proprietary multifactor model that is based on numerous measures of expected outperformance.

Sector Breakdown (% of the Fund's

Net Assets) as of 31 October 2007

Financials	37.2
Industrials	22.3
Materials	14.8
Consumer Discretionary	12.3
Energy	7.5
Telecommunication Services	3.3
Utilities	2.6
Information Technology	1.5
Consumer Staples	0.8
Money Market Fund	0.1
Other	(2.4	)

Style Allocation (%)

as of 31 October 2007

Large-Cap Value	20.6
Mid-Cap Value	17.7
Small-Cap Value	17.2
Mid-Cap Growth	15.7
Small-Cap Growth	15.6
Large-Cap Growth	13.2

Top Ten Fund Holdings (% of the Fund's

Net Assets) as of 31 October 2007

Security
HSBC Holdings PLC	2.5
Buzzi Unicem SpA	1.4
Hypo Real Estate Holdings AG	1.0
Telecom Italia SpA	0.8
Swiss Life Holding	0.8
Bank of Ireland	0.8
Compagnie Generale des Etablissements Michelin, Class B	0.8
Wendel	0.8
Banque Cantonale Vaudoise	0.7
Bank Austria Creditanstalt AG	0.7
Total	10.3

8

Manager's Analysis (Continued)

PowerShares Dynamic Europe Portfolio (ticker: PEH)

  Fund Performance History (%)  As of 31 October 2007

Index

	Fund Inception Cumulative
QSG Active Europe Index		6.01
MSCI Europe Index		9.67
MSCI EAFE Index		8.86

Fund

NAV Return	4.78
Share Price Return	4.57

Fund Inception: 13 June 2007

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. Investment returns and principal value will fluctuate and shares, when redeemed, may be worth more or less than their original cost. The shares performance reflects fee waivers, absent which, performance would have been lower. According to the Fund's most recent prospectus, the expense ratio of 0.75% is expressed as a unitary fee to cover expenses incurred in connection with managing the portfolio. NAV and Share Price returns assume that dividends and capital gain distributions have been reinvested in the Fund at NAV and Share Price, respectively. The returns shown in the table above do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption or sale of Fund Shares. See powershares.com to find the most recent month-end performance numbers.The index performance results are based upon a hypothetical investment in its constituent securities. Index returns do not represent Fund returns. 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.

The MSCI Europe Index and MSCI EAFE Index are unmanaged indices used as a measurement of change in stock market conditions based on the average performance of approximately 579 and 1,137 common stocks, respectively.

9

Manager's Analysis

PowerShares Global Clean Energy Portfolio (ticker: PBD)

The PowerShares Global Clean Energy Portfolio is based on the WilderHill New Energy Global Innovation Index. The Index seeks to deliver capital appreciation and is composed of companies that focus on greener and generally renewable sources of energy and technologies facilitating cleaner energy. The modified equal weighted portfolio is rebalanced and reconstituted quarterly.

Industry Breakdown (% of the Fund's

Net Assets) as of 31 October 2007

Energy-Alternate Sources	39.0
Electrical Component & Equipment	19.7
Electric	13.6
Chemicals	4.8
Engineering & Construction	4.1
Electronics	2.8
Hand/Machine Tools	2.8
Venture Capital	2.3
Semiconductors	2.2
Machinery-Diversified	2.2
Distribution/Wholesale	2.0
Auto Parts & Equipment	1.7
Biotechnology	1.2
Building Materials	0.9
Computers	0.6
Money Market Fund	0.1

Style Allocation (%)

as of 31 October 2007

Small-Cap Growth	29.7
Small-Cap Value	25.4
Mid-Cap Growth	24.0
Large-Cap Value	7.3
Mid-Cap Value	6.9
Large-Cap Growth	6.7

Top Ten Fund Holdings (% of the Fund's

Net Assets) as of 31 October 2007

Security
JA Solar Holdings Co. Ltd. ADR	3.3
Yingli Green Energy Holding Co. Ltd. ADR	3.1
Gamesa Corporacion Tecnologica S.A.	2.9
Vestas Wind Systems A/S	2.8
Nordex AG	2.7
REpower Systems AG	2.6
EDF Energies Nouvelles S.A.	2.6
Scottish & Southern Energy PLC	2.4
Acciona S.A.	2.4
Babcock & Brown Wind Partners	2.3
Total	27.1

10

Manager's Analysis (Continued)

PowerShares Global Clean Energy Portfolio (ticker: PBD)

  Fund Performance History (%)  As of 31 October 2007

Index

	Fund Inception Cumulative
WilderHill New Energy Global Innovation Index		17.81
MSCI EAFE Index		8.86
S&P 500 Index		2.87

Fund

NAV Return	23.31
Share Price Return	23.30

Fund Inception: 13 June 2007

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. Investment returns and principal value will fluctuate and shares, when redeemed, may be worth more or less than their original cost. The shares performance reflects fee waivers, absent which, performance would have been lower. According to the Fund's most recent prospectus, the expense ratio of 0.75% is expressed as a unitary fee to cover expenses incurred in connection with managing the portfolio. NAV and Share Price returns assume that dividends and capital gain distributions have been reinvested in the Fund at NAV and Share Price, respectively. The returns shown in the table above do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption or sale of Fund Shares. See powershares.com to find the most recent month-end performance numbers.The index performance results are based upon a hypothetical investment in its constituent securities. Index returns do not represent Fund returns. 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.

The MSCI EAFE Index and S&P 500 Index are unmanaged indices used as a measurement of change in stock market conditions based on the average performance of approximately 1,137 and 500 common stocks, respectively.

11

Manager's Analysis

PowerShares Global Water Portfolio (ticker: PIO)

The PowerShares Global Water Portfolio is based on the Palisades Global Water Index. The Index seeks to identify a group of global companies that focus on the provision of potable water, the treatment of water and the technology and services that are directly related to global water consumption. The modified equal-weighted portfolio is rebalanced and reconstituted quarterly.

Industry Breakdown (% of the Fund's

Net Assets) as of 31 October 2007

Environmental Control	20.2
Machinery-Diversified	16.2
Miscellaneous Manufacturing	12.6
Water	10.2
Electronics	9.9
Engineering & Construction	9.2
Electric	6.4
Metal Fabricate/Hardware	3.7
Chemicals	3.5
Building Materials	2.5
Commercial Services	1.9
Healthcare-Products	1.4
Holding Companies-Diversified	1.3
Money Market Fund	0.9
Other	0.1

Style Allocation (%)

as of 31 October 2007

Small-Cap Growth	35.1
Small-Cap Value	31.8
Mid-Cap Growth	15.5
Large-Cap Growth	8.0
Mid-Cap Value	6.5
Large-Cap Value	3.1

Top Ten Fund Holdings (% of the Fund's

Net Assets) as of 31 October 2007

Security
Techem AG	4.9
Hyflux Ltd.	4.8
Arcadis N.V.	4.2
Veolia Environnement	4.1
Andritz AG	4.1
Impregilo SpA	3.9
Kurita Water Industries Ltd.	3.9
Hera SpA	3.8
Tetra Tech, Inc.	3.8
KSB AG	3.7
Total	41.2

12

Manager's Analysis (Continued)

PowerShares Global Water Portfolio (ticker: PIO)

  Fund Performance History (%)  As of 31 October 2007

Index

	Fund Inception Cumulative
Palisades Global Water Index		12.54
MSCI EAFE Index		8.86
S&P 500 Index		2.87

Fund

NAV Return	8.77
Share Price Return	7.60

Fund Inception: 13 June 2007

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. Investment returns and principal value will fluctuate and shares, when redeemed, may be worth more or less than their original cost. The shares performance reflects fee waivers, absent which, performance would have been lower. According to the Fund's most recent prospectus, the expense ratio of 0.75% is expressed as a unitary fee to cover expenses incurred in connection with managing the portfolio. NAV and Share Price returns assume that dividends and capital gain distributions have been reinvested in the Fund at NAV and Share Price, respectively. The returns shown in the table above do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption or sale of Fund Shares. See powershares.com to find the most recent month-end performance numbers.The index performance results are based upon a hypothetical investment in its constituent securities. Index returns do not represent Fund returns. 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.

The MSCI EAFE Index and S&P 500 Index are unmanaged indices used as a measurement of change in stock market conditions based on the average performance of approximately 1,137 and 500 common stocks, respectively.

13

Manager's Analysis

PowerShares International Listed Private Equity Portfolio (ticker: PFP)

The PowerShares International Listed Private Equity Portfolio seeks to replicate the International Listed Private Equity Index^SM, which includes a diversified mix of more than 30 internationally listed companies with direct investments in more than 1,000 private global businesses. Constituents for the Index are selected based upon reputation, valuation, management, financial data, historical performance and the need for diversification within the Index. The Index is rebalanced and reconstituted quarterly.

Industry Breakdown (% of the Fund's

Net Assets) as of 31 October 2007

Venture Capital	28.6
Investment Compaines	27.2
Closed-end Funds	12.0
Holding Companies-Diversified	11.3
Diversified Financial Services	11.2
Engineering & Construction	5.1
Electric	3.5
Electrical Components & Equipment	0.6
Other	0.5

Style Allocation (%)

as of 31 October 2007

Mid-Cap Value	36.8
Small-Cap Growth	32.0
Small-Cap Value	21.0
Mid-Cap Growth	10.2

Top Ten Fund Holdings (% of the Fund's

Net Assets) as of 31 October 2007

Security
Wendel	9.9
Eurazeo	9.5
3i Group PLC	9.1
Jafco Co. Ltd.	7.8
Onex Corp.	6.3
Macquarie Airports	5.1
KKR Private Equity Investors LP	4.7
Macquarie Infrastructure Group	4.7
SVG Capital PLC	3.8
Intermediate Capital Group PLC	3.8
Total	64.7

14

Manager's Analysis (Continued)

PowerShares International Listed Private Equity Portfolio (ticker: PFP)

  Fund Performance History (%)  As of 31 October 2007

Index

	Fund Inception Cumulative
International Listed Private Equity IndexSM		6.58
MSCI AC World Financials Index		3.27
MSCI EAFE Index		4.48

Fund

NAV Return	6.30
Share Price Return	6.19

Fund Inception: 27 September 2007

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. Investment returns and principal value will fluctuate and shares, when redeemed, may be worth more or less than their original cost. The shares performance reflects fee waivers, absent which, performance would have been lower. According to the Fund's most recent prospectus, the expense ratio of 0.75% is expressed as a unitary fee to cover expenses incurred in connection with managing the portfolio. NAV and Share Price returns assume that dividends and capital gain distributions have been reinvested in the Fund at NAV and Share Price, respectively. The returns shown in the table above do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption or sale of Fund Shares. See powershares.com to find the most recent month-end performance numbers.The index performance results are based upon a hypothetical investment in its constituent securities. Index returns do not represent Fund returns. 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.

The MSCI AC World Financials Index and MSCI EAFE Index are unmanaged indices used as a measurement of change in stock market conditions based on the average performance of approximately 547 and 1,137 common stocks, respectively.

15

Manager's Analysis

PowerShares FTSE RAFI Asia Pacific ex-Japan Portfolio (ticker: PAF)

The PowerShares FTSE RAFI Asia Pacific ex-Japan Portfolio is based on the FTSE RAFI Asia Pacific ex Japan Index. The Index is designed to track the performance of the largest equities of companies domiciled in the Asia Pacific region (excluding Japan), selected based on the following four fundamental measures of firm size: book value, income, sales and dividends. The 1000 equities with the highest fundamental strength are weighted according to their fundamental scores. The fundamentally weighted portfolio is rebalanced and reconstituted annually.

Sector Breakdown (% of the Fund's

Net Assets) as of 31 October 2007

Financials	41.1
Telecommunication Services	20.1
Industrials	15.6
Materials	7.5
Energy	5.9
Consumer Staples	3.8
Utilities	3.3
Consumer Discretionary	3.2
Information Technology	0.9
Health Care	0.5
Other	(1.9	)

Style Allocation (%)

as of 31 October 2007

Large-Cap Value	40.7
Large-Cap Growth	25.2
Mid-Cap Value	19.5
Mid-Cap Growth	10.6
Small-Cap Value	2.4
Small-Cap Growth	1.6

Top Ten Fund Holdings (% of the Fund's

Net Assets) as of 31 October 2007

Security
China Mobile Ltd.	9.0
Telstra Corp. Ltd.	5.1
CNOOC Ltd.	3.8
National Australia Bank Ltd.	3.8
BHP Billiton Ltd.	3.6
Hutchison Whampoa Ltd.	3.6
Commonwealth Bank of Australia	3.6
Hang Seng Bank Ltd.	2.6
Australia & New Zealand Banking Group Ltd.	2.4
Westpac Banking Corp.	2.4
Total	39.9

16

Manager's Analysis (Continued)

PowerShares FTSE RAFI Asia Pacific ex-Japan Portfolio (ticker: PAF)

  Fund Performance History (%)  As of 31 October 2007

Index

	Fund Inception Cumulative
FTSE RAFI Asia Pacific ex Japan Index		26.73
MSCI Pacific Free ex Japan IndexSM		21.19
MSCI EAFE Index		6.93

Fund

NAV Return	26.53
Share Price Return	29.19

Fund Inception: 25 June 2007

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. Investment returns and principal value will fluctuate and shares, when redeemed, may be worth more or less than their original cost. The shares performance reflects fee waivers, absent which, performance would have been lower. According to the Fund's most recent prospectus, the expense ratio of 0.80% is expressed as a unitary fee to cover expenses incurred in connection with managing the portfolio. NAV and Share Price returns assume that dividends and capital gain distributions have been reinvested in the Fund at NAV and Share Price, respectively. The returns shown in the table above do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption or sale of Fund Shares. See powershares.com to find the most recent month-end performance numbers.The index performance results are based upon a hypothetical investment in its constituent securities. Index returns do not represent Fund returns. 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.

The MSCI Pacific Free ex Japan Index and MSCI EAFE Index are unmanaged indices used as a measurement of change in stock market conditions based on the average performance of approximately 176 and 1,137 common stocks, respectively.

17

Manager's Analysis

PowerShares FTSE RAFI Asia Pacific ex-Japan Small-Mid Portfolio (ticker: PDQ)

The PowerShares FTSE RAFI Asia Pacific ex-Japan Small-Mid Portfolio is based on the FTSE RAFI Developed Asia Pacific ex Japan Mid Small Index. The Index is designed to track the performance of small and middle capitalization equities of companies domiciled in the Asia Pacific region (excluding Japan), selected based on the following four fundamental measures of firm size: book value, cash flow, sales and dividends. The equities with the highest fundamental strength are weighted according to their fundamental scores. The fundamentally weighted portfolio is rebalanced and reconstituted annually.

Sector Breakdown (% of the Fund's

Net Assets) as of 31 October 2007

Financials	30.2
Industrials	19.8
Consumer Discretionary	15.9
Materials	7.8
Information Technology	7.6
Consumer Staples	6.5
Utilities	3.5
Health Care	3.4
Telecommunication Services	2.1
Energy	2.0
Money Market Fund	0.2
Other	1.0

Style Allocation (%)

as of 31 October 2007

Small-Cap Value	35.5
Small-Cap Growth	28.4
Mid-Cap Growth	18.5
Mid-Cap Value	15.8
Large-Cap Growth	1.8

Top Ten Fund Holdings (% of the Fund's

Net Assets) as of 31 October 2007

Security
Shanghai Industrial Holdings Ltd.	2.5
Lenovo Group Ltd.	2.1
OneSteel Ltd.	1.8
STX Pan Ocean Co. Ltd.	1.6
China Overseas Land & Investment Ltd.	1.3
China Merchants Holdings International Co. Ltd.	1.3
Beijing Enterprises Holdings Ltd.	1.1
Singapore Exchange Ltd.	1.0
China Resources Power Holdings Co.	1.0
CSL Ltd.	1.0
Total	14.7

18

Manager's Analysis (Continued)

PowerShares FTSE RAFI Asia Pacific ex-Japan Small-Mid Portfolio (ticker: PDQ)

  Fund Performance History (%)  As of 31 October 2007

Index

	Fund Inception Cumulative
FTSE RAFI Developed Asia Pacific ex Japan Mid Small Index		7.29
MSCI Pacific ex Japan Small Index		5.05
MSCI EAFE Index		4.48

Fund

NAV Return	7.29
Share Price Return	9.03

Fund Inception: 27 September 2007

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. Investment returns and principal value will fluctuate and shares, when redeemed, may be worth more or less than their original cost. The shares performance reflects fee waivers, absent which, performance would have been lower. According to the Fund's most recent prospectus, the expense ratio of 0.80% is expressed as a unitary fee to cover expenses incurred in connection with managing the portfolio. NAV and Share Price returns assume that dividends and capital gain distributions have been reinvested in the Fund at NAV and Share Price, respectively. The returns shown in the table above do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption or sale of Fund Shares. See powershares.com to find the most recent month-end performance numbers.The index performance results are based upon a hypothetical investment in its constituent securities. Index returns do not represent Fund returns. 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.

The MSCI Pacific ex Japan Small Index and MSCI EAFE Index are unmanaged indices used as a measurement of change in stock market conditions based on the average performance of approximately 173 and 1,137 common stocks, respectively.

19

Manager's Analysis

PowerShares FTSE RAFI Developed Markets ex-U.S. Portfolio (ticker: PXF)

The PowerShares FTSE RAFI Developed Markets ex-U.S. Portfolio is based on the FTSE RAFI Developed Markets ex U.S. Index. The Index is designed to track the performance of small and middle capitalization equities of companies domiciled in the Asia Pacific region (excluding Japan), selected based on the following four fundamental measures of firm size: book value, cash flow, sales and dividends. The equities with the highest fundamental strength are weighted according to their fundamental scores. The fundamentally weighted portfolio is rebalanced and reconstituted annually.

Sector Breakdown (% of the Fund's

Net Assets) as of 31 October 2007

Financials	24.6
Consumer Discretionary	14.2
Industrials	11.9
Energy	10.8
Telecommunication Services	9.5
Materials	7.4
Consumer Staples	7.4
Utilities	6.9
Information Technology	4.3
Health Care	3.2
Other	(0.2	)

Style Allocation (%)

as of 31 October 2007

Large-Cap Value	43.0
Large-Cap Growth	28.8
Mid-Cap Value	11.5
Mid-Cap Growth	11.0
Small-Cap Value	3.5
Small-Cap Growth	2.2

Top Ten Fund Holdings (% of the Fund's

Net Assets) as of 31 October 2007

Security
BP PLC	2.0
Vodafone Group PLC	1.5
Royal Dutch Shell PLC, Class A	1.5
Daimler AG	1.4
Total S.A.	1.2
HSBC Holdings PLC	1.1
Royal Dutch Shell PLC, Class B	1.1
Eni SpA	1.0
Nippon Telegraph & Telephone Corp.	1.0
Toyota Motor Corp.	1.0
Total	12.8

20

Manager's Analysis (Continued)

PowerShares FTSE RAFI Developed Markets ex-U.S. Portfolio (ticker: PXF)

  Fund Performance History (%)  As of 31 October 2007

Index

	Fund Inception Cumulative
FTSE RAFI Developed Markets ex U.S. Index		8.21
MSCI EAFE Index		6.93
S&P 500 Index		4.07

Fund

NAV Return	7.48
Share Price Return	8.23

Fund Inception: 25 June 2007

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. Investment returns and principal value will fluctuate and shares, when redeemed, may be worth more or less than their original cost. The shares performance reflects fee waivers, absent which, performance would have been lower. According to the Fund's most recent prospectus, the expense ratio of 0.75% is expressed as a unitary fee to cover expenses incurred in connection with managing the portfolio. NAV and Share Price returns assume that dividends and capital gain distributions have been reinvested in the Fund at NAV and Share Price, respectively. The returns shown in the table above do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption or sale of Fund Shares. See powershares.com to find the most recent month-end performance numbers.The index performance results are based upon a hypothetical investment in its constituent securities. Index returns do not represent Fund returns. 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.

The MSCI EAFE Index and S&P 500 Index are unmanaged indices used as a measurement of change in stock market conditions based on the average performance of approximately 1,137 and 500 common stocks, respectively.

21

Manager's Analysis

PowerShares FTSE RAFI Developed Markets ex-U.S. Small-Mid Portfolio (ticker: PDN)

The PowerShares FTSE RAFI Developed Markets ex-U.S. Small-Mid Portfolio is based on the FTSE RAFI Developed Markets ex US Mid Small 1500 Index. The Index is designed to track the performance of small and mid- capitalization equities of companies domiciled in developed international markets (excluding the U.S.), selected based on the following four fundamental measures of firm size: book value, cash flow, sales and dividends. The equities with the highest fundamental strength are weighted according to their fundamental scores. The fundamentally weighted portfolio is rebalanced and reconstituted annually.

Sector Breakdown (% of the Fund's

Net Assets) as of 31 October 2007

Industrials	23.0
Financials	21.2
Consumer Discretionary	19.1
Materials	9.0
Consumer Staples	8.8
Information Technology	8.3
Energy	4.0
Health Care	3.0
Utilities	1.9
Telecommunication Services	1.0
Money Market Fund	0.2
Other	0.5

Style Allocation (%)

as of 31 October 2007

Small-Cap Value	40.6
Small-Cap Growth	37.8
Mid-Cap Growth	12.7
Mid-Cap Value	7.8
Large-Cap Growth	0.9
Large-Cap Value	0.2

Top Ten Fund Holdings (% of the Fund's

Net Assets) as of 31 October 2007

Security
Shanghai Industrial Holdings Ltd.	0.4
Lenovo Group Ltd.	0.4
Sanyo Shinpan Finance Co. Ltd.	0.3
OneSteel Ltd.	0.3
Hitachi Zosen Corp.	0.3
Itochu Enex Co. Ltd.	0.3
Heiwa Corp.	0.3
STX Pan Ocean Co. Ltd.	0.3
Research in Motion Ltd.	0.3
Jardine Cycle & Carriage Ltd.	0.3
Total	3.2

22

Manager's Analysis (Continued)

PowerShares FTSE RAFI Developed Markets ex-U.S. Small-Mid Portfolio (ticker: PDN)

  Fund Performance History (%)  As of 31 October 2007

Index

	Fund Inception Cumulative
FTSE RAFI Developed ex US Mid Small 1500 Index		4.96
MSCI EAFE Small Index		6.18
MSCI EAFE Index		4.48

Fund

NAV Return	5.12
Share Price Return	4.47

Fund Inception: 27 September 2007

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. Investment returns and principal value will fluctuate and shares, when redeemed, may be worth more or less than their original cost. The shares performance reflects fee waivers, absent which, performance would have been lower. According to the Fund's most recent prospectus, the expense ratio of 0.75% is expressed as a unitary fee to cover expenses incurred in connection with managing the portfolio. NAV and Share Price returns assume that dividends and capital gain distributions have been reinvested in the Fund at NAV and Share Price, respectively. The returns shown in the table above do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption or sale of Fund Shares. See powershares.com to find the most recent month-end performance numbers.The index performance results are based upon a hypothetical investment in its constituent securities. Index returns do not represent Fund returns. 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.

The MSCI EAFE Small Index and MSCI EAFE Index are unmanaged indices used as a measurement of change in stock market conditions based on the average performance of approximately 1,175 and 1,137 common stocks, respectively.

23

Manager's Analysis

PowerShares FTSE RAFI Emerging Markets Portfolio (ticker: PXH)

The PowerShares FTSE RAFI Emerging Markets Portfolio is based on the FTSE RAFI Emerging Index. The Index is designed to track the performance of the largest emerging market equities, selected based on the following four fundamental measures of firm size: book value, cash flow, sales and dividends. The equities with the highest fundamental strength are weighted according to their fundamental scores. The fundamentally weighted portfolio is rebalanced and reconstituted annually.

Sector Breakdown (% of the Fund's

Net Assets) as of 31 October 2007

Telecommunication Services	27.1
Energy	18.4
Financials	16.2
Materials	15.5
Information Technology	7.9
Utilities	7.0
Industrials	4.0
Consumer Staples	2.4
Consumer Discretionary	0.5
Healthcare	0.3
Money Market Fund	6.3
Other	(5.6	)

Style Allocation (%)

as of 31 October 2007

Large-Cap Value	30.7
Large-Cap Growth	27.3
Mid-Cap Value	19.6
Mid-Cap Growth	15.7
Small-Cap Value	3.6
Small-Cap Growth	3.1

Top Ten Fund Holdings (% of the Fund's

Net Assets) as of 31 October 2007

Security
PetroChina Co. Ltd., H-Shares	7.4
POSCO ADR	6.2
Chunghwa Telecom Co. Ltd. ADR	4.1
Rostelecom ADR	3.6
Korea Electric Power Corp. ADR	3.3
KT Corp ADR	3.3
Taiwan Semiconductor Manufacturing Co. Ltd. ADR	3.0
SK Telecom Co. Ltd. ADR	2.8
Videsh Sanchar Nigam Ltd. ADR	2.5
Petroleo Brasileiro S.A. SPON ADR	2.1
Total	38.3

24

Manager's Analysis (Continued)

PowerShares FTSE RAFI Emerging Markets Portfolio (ticker: PXH)

  Fund Performance History (%)  As of 31 October 2007

Index

	Fund Inception Cumulative
FTSE RAFI Emerging Index		13.47
MSCI Emerging Markets Index		11.34
MSCI EAFE Index		4.48

Fund

NAV Return	9.35
Share Price Return	8.56

Fund Inception: 27 September 2007

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. Investment returns and principal value will fluctuate and shares, when redeemed, may be worth more or less than their original cost. The shares performance reflects fee waivers, absent which, performance would have been lower. According to the Fund's most recent prospectus, the expense ratio of 0.85% is expressed as a unitary fee to cover expenses incurred in connection with managing the portfolio. NAV and Share Price returns assume that dividends and capital gain distributions have been reinvested in the Fund at NAV and Share Price, respectively. The returns shown in the table above do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption or sale of Fund Shares. See powershares.com to find the most recent month-end performance numbers.The index performance results are based upon a hypothetical investment in its constituent securities. Index returns do not represent Fund returns. 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.

The MSCI Emerging Markets Index and MSCI EAFE Index are unmanaged indices used as a measurement of change in stock market conditions based on the average performance of approximately 835 and 1,137 common stocks, respectively.

25

Manager's Analysis

PowerShares FTSE RAFI Europe Portfolio (ticker: PEF)

The PowerShares FTSE RAFI Europe Portfolio is based on the FTSE RAFI Europe Index. The Index is designed to track the performance of the largest European equities, selected based on the following four fundamental measures of firm size: book value, income, sales and dividends. The 1000 equities with the highest fundamental strength are weighted according to their fundamental scores. The fundamentally weighted portfolio is rebalanced and reconstituted annually.

Sector Breakdown (% of the Fund's

Net Assets) as of 31 October 2007

Financials	26.8
Energy	13.7
Consumer Discretionary	13.5
Telecommunication Services	9.2
Consumer Staples	9.0
Utilities	8.4
Industrials	7.9
Materials	7.6
Health Care	3.8
Information Technology	1.9
Other	(1.8	)

Style Allocation (%)

as of 31 October 2007

Large-Cap Value	49.8
Large-Cap Growth	34.4
Mid-Cap Growth	8.5
Mid-Cap Value	6.2
Small-Cap Value	0.7
Small-Cap Growth	0.4

Top Ten Fund Holdings (% of the Fund's

Net Assets) as of 31 October 2007

Security
BP PLC	3.3
Vodafone Group PLC	2.5
Royal Dutch Shell PLC, Class A	2.4
Daimler AG	2.3
Total S.A.	2.0
HSBC Holdings PLC	1.9
Royal Dutch Shell PLC, Class B	1.8
Eni SpA	1.7
ING Groep N.V. CVA	1.3
Volkswagen AG	1.3
Total	20.5

26

Manager's Analysis (Continued)

PowerShares FTSE RAFI Europe Portfolio (ticker: PEF)

  Fund Performance History (%)  As of 31 October 2007

Index

	Fund Inception Cumulative
FTSE RAFI Europe Index		7.88
MSCI Europe Index		7.37
MSCI EAFE Index		6.93

Fund

NAV Return	9.67
Share Price Return	11.80

Fund Inception: 25 June 2007

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. Investment returns and principal value will fluctuate and shares, when redeemed, may be worth more or less than their original cost. The shares performance reflects fee waivers, absent which, performance would have been lower. According to the Fund's most recent prospectus, the expense ratio of 0.75% is expressed as a unitary fee to cover expenses incurred in connection with managing the portfolio. NAV and Share Price returns assume that dividends and capital gain distributions have been reinvested in the Fund at NAV and Share Price, respectively. The returns shown in the table above do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption or sale of Fund Shares. See powershares.com to find the most recent month-end performance numbers.The index performance results are based upon a hypothetical investment in its constituent securities. Index returns do not represent Fund returns. 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.

The MSCI Europe Index and MSCI EAFE Index are unmanaged indices used as a measurement of change in stock market conditions based on the average performance of approximately 579 and 1,137 common stocks, respectively.

27

Manager's Analysis

PowerShares FTSE RAFI Europe Small-Mid Portfolio (ticker: PWD)

The PowerShares FTSE RAFI Europe Small-Mid Portfolio is based on the FTSE RAFI Developed Europe Mid Small Index. The Index is designed to track the performance of small-capitalization European equities, selected based on the following four fundamental measures of firm size: book value, cash flow, sales and dividends. The equities with the highest fundamental strength are weighted according to their fundamental scores. The fundamentally weighted portfolio is rebalanced and reconstituted annually.

Sector Breakdown (% of the Fund's

Net Assets) as of 31 October 2007

Industrials	27.8
Financials	21.6
Consumer Discretionary	17.8
Materials	7.5
Consumer Staples	7.1
Information Technology	6.7
Energy	4.1
Healthcare	3.9
Utilities	1.9
Telecommunication Services	1.3
Money Market Fund	0.1
Other	0.2

Style Allocation (%)

as of 31 October 2007

Small-Cap Value	38.5
Small-Cap Growth	37.1
Mid-Cap Growth	17.0
Mid-Cap Value	7.4

Top Ten Fund Holdings (% of the Fund's

Net Assets) as of 31 October 2007

Security
Medion AG	0.6
SCOR SE	0.5
Gamesa Corporacion Tecnologica S.A.	0.5
Laurus N.V.	0.5
Univar N.V.	0.5
Vestas Wind Systems A/S	0.4
Jeronimo Martins SGPS S.A.	0.4
D/S Norden A/S	0.4
DS Smith PLC	0.4
Tessenderlo Chemie N.V.	0.4
Total	4.6

28

Manager's Analysis (Continued)

PowerShares FTSE RAFI Europe Small-Mid Portfolio (ticker: PWD)

  Fund Performance History (%)  As of 31 October 2007

Index

	Fund Inception Cumulative
FTSE RAFI Developed Europe Mid Small Index		6.61
MSCI Europe Small Index		7.16
MSCI EAFE Index		4.48

Fund

NAV Return	6.31
Share Price Return	4.93

Fund Inception: 27 September 2007

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. Investment returns and principal value will fluctuate and shares, when redeemed, may be worth more or less than their original cost. The shares performance reflects fee waivers, absent which, performance would have been lower. According to the Fund's most recent prospectus, the expense ratio of 0.75% is expressed as a unitary fee to cover expenses incurred in connection with managing the portfolio. NAV and Share Price returns assume that dividends and capital gain distributions have been reinvested in the Fund at NAV and Share Price, respectively. The returns shown in the table above do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption or sale of Fund Shares. See powershares.com to find the most recent month-end performance numbers.The index performance results are based upon a hypothetical investment in its constituent securities. Index returns do not represent Fund returns. 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.

The MSCI Europe Small Index and MSCI EAFE Index are unmanaged indices used as a measurement of change in stock market conditions based on the average performance of approximately 530 and 1,137 common stocks, respectively.

29

Manager's Analysis

PowerShares FTSE RAFI Japan Portfolio (ticker: PJO)

The PowerShares FTSE RAFI Japan Portfolio is based on the FTSE RAFI Japan Index. The Index is designed to track the performance of the largest Japanese equities, selected based on the following four fundamental measures of firm size: book value, income, sales and dividends. The 1000 equities with the highest fundamental strength are weighted according to their fundamental scores. The fundamentally weighted portfolio is rebalanced and reconstituted annually.

Sector Breakdown (% of the Fund's

Net Assets) as of 31 October 2007

Consumer Discretionary	23.9
Industrials	21.9
Information Technology	11.2
Financials	10.0
Materials	7.9
Telecommunication Services	6.7
Utilities	6.7
Consumer Staples	4.7
Health Care	2.9
Energy	2.8
Money Market Fund	0.1
Other	1.2

Style Allocation (%)

as of 31 October 2007

Large-Cap Value	30.5
Mid-Cap Value	19.0
Large-Cap Growth	17.4
Mid-Cap Growth	16.8
Small-Cap Value	10.0
Small-Cap Growth	6.3

Top Ten Fund Holdings (% of the Fund's

Net Assets) as of 31 October 2007

Security
Toyota Motor Corp.	4.2
Nippon Telegraph & Telephone Corp.	4.1
Nissan Motor Co. Ltd.	2.2
Mitsui & Co. Ltd	2.1
Mitsubishi Corp.	2.0
Honda Motor Co. Ltd.	1.8
NTT DoCoMo, Inc.	1.7
Sony Corp.	1.7
Hitachi Ltd.	1.6
Tokyo Electric Power (The) Co., Inc.	1.5
Total	22.9

30

Manager's Analysis (Continued)

PowerShares FTSE RAFI Japan Portfolio (ticker: PJO)

  Fund Performance History (%)  As of 31 October 2007

Index

	Fund Inception Cumulative
FTSE RAFI Japan Index		-0.18
MSCI Japan Index		-0.63
MSCI EAFE Index		6.93

Fund

NAV Return	0.00
Share Price Return	1.84

Fund Inception: 25 June 2007

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. Investment returns and principal value will fluctuate and shares, when redeemed, may be worth more or less than their original cost. The shares performance reflects fee waivers, absent which, performance would have been lower. According to the Fund's most recent prospectus, the expense ratio of 0.75% is expressed as a unitary fee to cover expenses incurred in connection with managing the portfolio. NAV and Share Price returns assume that dividends and capital gain distributions have been reinvested in the Fund at NAV and Share Price, respectively. The returns shown in the table above do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption or sale of Fund Shares. See powershares.com to find the most recent month-end performance numbers. The index performance results are based upon a hypothetical investment in its constituent securities. Index returns do not represent Fund returns. 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.

The MSCI Japan Index and MSCI EAFE Index are unmanaged indices used as a measurement of change in stock market conditions based on the average performance of approximately 382 and 1,137 common stocks, respectively.

31

Manager's Analysis

PowerShares 1-30 Laddered Treasury Portfolio (ticker: PLW)

The PowerShares 1-30 Laddered Treasury Portfolio is based on the Ryan/Mergent 1-30 Year Treasury Laddered Index, which measures the potential returns of U.S. Treasury securities with a yield curve based upon 30 U.S. Treasury Bonds with fixed coupons, scheduled to mature in a proportional, annual sequential ("laddered") structure.

Duration Breakdown (% of the Fund's

Net Assets) as of 31 October 2007

Maturing in 1 to 5 Years	16.7
Maturing in 6 to 10 Years	16.7
Maturing in 11 to 15 Years	16.3
Maturing in 16 to 20 Years	19.7
Maturing in 21 to 25 Years	16.4
Maturing in 26 to 30 Years	13.0
Other	1.2

Top Ten Fund Holdings (% of the Fund's

Net Assets) as of 31 October 2007

Security
United States Treasury Bond 5.375%, 2/15/2031	9.8
United States Treasury Bond 4.500%, 2/15/2036	9.8
United States Treasury Note 3.500%, 2/15/2010	3.4
United States Treasury Note 4.000%, 2/15/2014	3.4
United States Treasury Note 3.875%, 2/15/2013	3.4
United States Treasury Note 4.500%, 2/28/2011	3.4
United States Treasury Note 4.625%, 2/29/2012	3.4
United States Treasury Note 4.000%, 2/15/2015	3.3
United States Treasury Note 3.375%, 2/15/2008	3.3
United States Treasury Note 4.500%, 2/15/2016	3.3
Total	46.5

32

Manager's Analysis (Continued)

PowerShares 1-30 Laddered Treasury Portfolio (ticker: PLW)

  Fund Performance History (%)  As of 31 October 2007

Fund

	Fund Inception Cumulative
Ryan/Mergent 1-30 Year Treasury Laddered Index		1.76
Index
NAV Return		1.71
Share Price Return		1.72

Fund Inception: 11 October 2007

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. Investment returns and principal value will fluctuate and shares, when redeemed, may be worth more or less than their original cost. The shares performance reflects fee waivers, absent which, performance would have been lower. According to the Fund's most recent prospectus, the expense ratio of 0.25% is expressed as a unitary fee to cover expenses incurred in connection with managing the portfolio. NAV and Share Price returns assume that dividends and capital gain distributions have been reinvested in the Fund at NAV and Share Price, respectively. The returns shown in the table above do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption or sale of Fund Shares. See powershares.com to find the most recent month-end performance numbers.The index performance results are based upon a hypothetical investment in its constituent securities. Index returns do not represent Fund returns. 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.

33

Manager's Analysis

PowerShares Emerging Markets Sovereign Debt Portfolio (ticker: PCY)

The PowerShares Emerging Markets Sovereign Debt Portfolio is based on the DB Emerging Market USD Liquid Balanced Index. The Index tracks the performance of a selected basket of liquid emerging markets U.S. dollar-denominated government bonds issued by approximately 17 emerging market countries. The countries in the Index are selected annually pursuant to a proprietary index methodology and the membership list is rebalanced quarterly.

Country Breakdown (% of the Fund's

Net Assets) as of 31 October 2007

Mexico	9.7
Colombia	9.6
Brazil	9.5
Philippines	9.4
Turkey	9.4
El Salvador	4.7
Vietnam	4.7
Peru	4.7
Russia	4.7
South Africa	4.6
Panama	4.6
Venezuela	4.6
Indonesia	4.6
Bulgaria	4.6
Ukraine	4.6
Uruguay	4.5
Other	1.5

Top Ten Fund Holdings (% of the Fund's

Net Assets) as of 31 October 2007

Security
Republic of Colombia, 7.375%, 9/18/37	4.9
Federal Republic of Brazil, 7.125%, 1/20/37	4.9
Republic of Philippines, 9.500%, 2/02/30	4.9
United Mexican States Series A, MTN, 7.500%, 4/08/33	4.8
United Mexican States MTN, 8.300%, 8/15/31	4.8
Republic of Colombia, 11.750%, 2/25/20	4.7
Republic of Turkey, 8.000%, 2/14/34	4.7
Republic of El Salvador, 8.250%, 4/10/32	4.7
Socialist Republic of Vietnam, 6.875%, 1/15/16	4.7
Russian Federation, 11.000%, 7/24/18	4.7
Total	47.8

34

Manager's Analysis (Continued)

PowerShares Emerging Markets Sovereign Debt Portfolio (ticker: PCY)

  Fund Performance History (%)  As of 31 October 2007

Index

	Fund Inception Cumulative
DB Emerging Market USD Liquid Balanced Index		1.86

Fund

NAV Return	1.65
Share Price Return	2.09

Fund Inception: 11 October 2007

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. Investment returns and principal value will fluctuate and shares, when redeemed, may be worth more or less than their original cost. The shares performance reflects fee waivers, absent which, performance would have been lower. According to the Fund's most recent prospectus, the expense ratio of 0.50% is expressed as a unitary fee to cover expenses incurred in connection with managing the portfolio. NAV and Share Price returns assume that dividends and capital gain distributions have been reinvested in the Fund at NAV and Share Price, respectively. The returns shown in the table above do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption or sale of Fund Shares. See powershares.com to find the most recent month-end performance numbers.The index performance results are based upon a hypothetical investment in its constituent securities. Index returns do not represent Fund returns. 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.

35

Manager's Analysis

PowerShares Insured National Municipal Bond Portfolio (ticker: PZA)

The PowerShares Insured National Municipal Bond Portfolio is based on the Merrill Lynch Insured National Long-Term Core Municipal Securities Index. The Index is designed to track the performance of U.S. dollar-denominated, investment-grade, insured, tax-exempt debt publicly issued by U.S. municipalities in the U.S. domestic market. The Index is adjusted monthly and its constituents are capitalization-weighted based on their current amount outstanding.

State Breakdown (% of the Fund's

Net Assets) as of 31 October 2007

California	16.4
Georgia	12.9
Texas	12.7
New Jersey	7.5
Missouri	6.5
Nevada	6.2
Massachusetts	4.2
Washington	3.3
Kentucky	3.3
Connecticut	3.3
District of Columbia	3.3
Arizona	3.3
Louisiana	3.2
Maryland	3.1
Colorado	3.1
Illinois	3.1
Alabama	3.1
Other	1.5

Top Ten Fund Holdings (% of the Fund's

Net Assets) as of 31 October 2007

Security
San Francisco Bay Area Rapid Transit District Sales Tax Rev Ref Ser 05A MBIA, 5.00%, 07/01/30	5.0
New Jersey State Educational Facilities Auth Rev (Kean University) Ser 07D FGIC, 5.00%, 07/01/39	4.2
Massachusetts State School Building Auth Dedicated Sales Tax Rev Ser 05A FSA, 5.00%, 08/15/30	4.2
San Luis Obispo County Financing Auth Rev (Nacimiento Water Project) Ser 07A MBIA, 5.00%, 09/01/38	4.2
San Francisco City & County Public Utilities Commission Water Rev Ser 06A FSA, 4.50%, 11/01/31	3.9
New Jersey State Transportation Trust Fund Auth (Transit System) Ser 07A AMBAC, 5.00%, 12/15/32	3.3
Clarke County Hospital Auth Rev (Athens Regional Medical Center Project) Ser 07 MBIA, 5.00%, 01/01/27	3.3
University of Washington Ser 07 AMBAC, 5.00%, 06/01/37	3.3
Kentucky State Municipal Power Agency System Rev (Prairie State Project) Ser 07A MBIA, 5.00%, 09/01/37	3.3
Sacramento County California Sanitation District Financing Auth Rev (County Sanitation District 1) Ser 05 MBIA, 5.00%, 08/01/35	3.3
Total	38.0

36

Manager's Analysis (Continued)

PowerShares Insured National Municipal Bond Portfolio (ticker: PZA)

  Fund Performance History (%)  As of 31 October 2007

Index

	Fund Inception Cumulative
Merrill Lynch Insured Natural Long-Term Core Municipal Securities Index		0.30

Fund

NAV Return	0.52
Share Price Return	-0.66

Fund Inception: 11 October 2007

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. Investment returns and principal value will fluctuate and shares, when redeemed, may be worth more or less than their original cost. The shares performance reflects fee waivers, absent which, performance would have been lower. According to the Fund's most recent prospectus, the expense ratio of 0.28% is expressed as a unitary fee to cover expenses incurred in connection with managing the portfolio. NAV and Share Price returns assume that dividends and capital gain distributions have been reinvested in the Fund at NAV and Share Price, respectively. The returns shown in the table above do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption or sale of Fund Shares. See powershares.com to find the most recent month-end performance numbers.The index performance results are based upon a hypothetical investment in its constituent securities. Index returns do not represent Fund returns. 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.

37

Manager's Analysis

PowerShares Insured California Municipal Bond Portfolio (ticker: PWZ)

The PowerShares Insured California Municipal Bond Portfolio is based on the Merrill Lynch California Insured Long-Term Core Municipal Securities Index. The Index is designed to track the performance of U.S. dollar-denominated, investment-grade, insured, tax-exempt debt publicly issued by California or Puerto Rico or their political subdivisions. The Index is adjusted monthly and its constituents are capitalization-weighted based on their current amount outstanding.

Industry Breakdown (% of the Fund's

Net Assets) as of 31 October 2007

Ad Valorem Property Tax	17.9
Water Revenue	16.4
Sewer Revenue	14.7
Sales Tax Revenue	11.6
Lease Revenue	10.2
Miscellaneous Revenue	7.1
Electric Power Revenue	6.7
College Revenue	4.2
Highway Tolls Revenue	3.6
Tax Increment Revenue	3.0
General Fund	3.0
Other	1.6

Top Ten Fund Holdings (% of the Fund's

Net Assets) as of 31 October 2007

Security
East Bay California Municipal Utility District Water System Rev Ref Ser 07A FGIC, 5.00%, 06/01/32	8.4
Sacramento County California Sanitation District Financing Auth Rev (County Sanitation District 1) Ser 05 MBIA, 5.00%, 08/01/35	8.3
Santa Clara Valley California Transportaion Auth Sales Tax Rev Ref (Measure A) Ser 07A AMBAC, 5.00%, 04/01/36	8.3
Antelope Valley California Community College District (Election 2004) Ser 07B MBIA, 5.25%, 08/01/39	7.3
Los Angeles California Community College District Ref - Election 2001 Ser 05A FSA, 5.00%, 08/01/25	4.2
San Luis Obispo County California Financing Auth Rev (Nacimiento Water Project) Ser 07A MBIA, 5.00%, 09/01/38	4.2
California State University Rev Systemwide Ser 07A FSA, 5.00%, 11/01/37	4.2
Los Angeles California Municipal Improvement Corp. Lease Rev Ser 07B-1 FGIC, 4.25%, 01/01/37	4.0
San Francisco California City & County Public Utilities Commission Water Rev Ser 06A FSA, 4.50%, 11/01/31	3.9
Hollister California Joint Powers Financing Auth (Wastewater Revenue Refing & Imported Project)Ser 01 FSA, 5.00%, 06/01/32	3.8
Total	56.6

38

Manager's Analysis (Continued)

PowerShares Insured California Municipal Bond Portfolio (ticker: PWZ)

  Fund Performance History (%)  As of 31 October 2007

Index

	Fund Inception Cumulative
Merrill Lynch California Insured Long-Term Core Municipal Securities Index		0.31

Fund

NAV Return	0.28
Share Price Return	-0.56

Fund Inception: 11 October 2007

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. Investment returns and principal value will fluctuate and shares, when redeemed, may be worth more or less than their original cost. The shares performance reflects fee waivers, absent which, performance would have been lower. According to the Fund's most recent prospectus, the expense ratio of 0.28% is expressed as a unitary fee to cover expenses incurred in connection with managing the portfolio. NAV and Share Price returns assume that dividends and capital gain distributions have been reinvested in the Fund at NAV and Share Price, respectively. The returns shown in the table above do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption or sale of Fund Shares. See powershares.com to find the most recent month-end performance numbers.The index performance results are based upon a hypothetical investment in its constituent securities. Index returns do not represent Fund returns. 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.

39

Manager's Analysis

PowerShares Insured New York Municipal Bond Portfolio (ticker: PZT)

The PowerShares Insured New York Municipal Bond Portfolio is based on the Merrill Lynch New York Insured Long-Term Core Municipal Securities Index. The Index is designed to track the performance of U.S. dollar-denominated, investment-grade, insured, tax-exempt debt publicly issued by New York or Puerto Rico or their political subdivisions. The Index is adjusted monthly and its constituents are capitalization-weighted based on their current amount outstanding.

Industry Breakdown (% of the Fund's

Net Assets) as of 31 October 2007

Electric Power Revenue	20.8
Recreational Revenue	12.4
Highway Tolls Revenue	11.3
College Revenue	10.5
Sales Tax Revenue	10.4
Lease Revenue	7.2
Hospital Revenue	4.2
Hotel Occupancy Tax	4.1
Transit Revenue	4.0
Miscellaneous Revenue	3.8
Income Tax Revenue	3.8
Water Revenue	3.7
Ad Valorem Property Tax	2.1
Money Market Fund	0.2
Other	1.5

Top Ten Fund Holdings (% of the Fund's

Net Assets) as of 31 October 2007

Security
Puerto Rico Electric Power Auth Power Rev Ser 05RR XLCA, 5.00%, 07/01/26	10.5
New York State Dormitory Auth Rev Nonstated Supported Debt (Mount Sinal School - Medical New York University) Ser 07 MBIA, 5.00%, 07/01/35	10.4
Sales Tax Asset Receivables Corp. Ser 04A AMBAC, 5.00%, 10/15/32	10.4
Long Island Power Auth Electric System Rev Ser 04A AMBAC, 5.00%, 09/01/34	10.3
Rensselaer City School District Ctfs Partn Ser 06 XLCA, 5.00%, 06/01/36	4.8
New York State Thruway Auth General Rev Ser 07H FGIC, 5.00%, 01/01/37	4.2
New York State Dormitory Auth Rev Mental Health Services Facilities Impt Ser 05B AMBAC, 5.00%, 02/15/30	4.2
Triborough Bridge & Tunnel Auth Rev Ser 02 MBIA, 5.00%, 11/15/32	4.1
New York City Trust for Cultural Resources Rev (American Museum of National History) Ser 04A MBIA, 5.00%, 07/01/44	4.1
New York City Industrial Development Agency Rev Queens Baseball Stadium (Pilot) Ser 06 AMBAC, 5.00%, 01/01/46	4.1
Total	67.1

40

Manager's Analysis (Continued)

PowerShares Insured New York Municipal Bond Portfolio (ticker: PZT)

  Fund Performance History (%)  As of 31 October 2007

Index

	Fund Inception Cumulative
Merrill Lynch New York Insured Long-Term Core Municipal Securities Index		0.35

Fund

NAV Return	0.44
Share Price Return	-0.50

Fund Inception: 11 October 2007

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. Investment returns and principal value will fluctuate and shares, when redeemed, may be worth more or less than their original cost. The shares performance reflects fee waivers, absent which, performance would have been lower. According to the Fund's most recent prospectus, the expense ratio of 0.28% is expressed as a unitary fee to cover expenses incurred in connection with managing the portfolio. NAV and Share Price returns assume that dividends and capital gain distributions have been reinvested in the Fund at NAV and Share Price, respectively. The returns shown in the table above do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption or sale of Fund Shares. See powershares.com to find the most recent month-end performance numbers.The index performance results are based upon a hypothetical investment in its constituent securities. Index returns do not represent Fund returns. 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.

41

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Funds' Distribution History

	Ex-Dividend	10/15/07		9/21/07		9/14/07		8/15/07		7/13/07		6/15/07
	Record	10/17/07		9/25/07		9/18/07		8/17/07		7/17/07		6/19/07
	Payable	10/31/07		9/28/07		9/28/07		8/31/07		7/31/07		6/29/07
Fund	Ticker
PowerShares Dynamic Asia Pacific Portfolio	PUA		—		0.13374		—		—		—		—
PowerShares Dynamic Developed International Opportunities Portfolio	PFA		—		0.03740		—		—		—		—
PowerShares Dynamic Europe Portfolio	PEH		—		0.02749		—		—		—		—
PowerShares Global Clean Energy Portfolio	PBD		—		—		—		—		—		—
PowerShares Global Water Portfolio	PIO		—		—		—		—		—		—
PowerShares International Listed Private Equity Portfolio	PFP		—		—		—		—		—		—
PowerShares FTSE RAFI Asia Pacific ex-Japan Portfolio	PAF		—		0.26234		—		—		—		—
PowerShares FTSE RAFI Asia Pacific ex-Japan Small-Mid Portfolio	PDQ		—		—		—		—		—		—
PowerShares FTSE RAFI Developed Markets ex-U.S. Portfolio	PXF		—		0.01328		—		—		—		—
PowerShares FTSE RAFI Developed Markets ex-U.S. Small-Mid Portfolio	PDN		—		—		—		—		—		—
PowerShares FTSE RAFI Emerging Markets Portfolio	PXH		—		—		—		—		—		—
PowerShares FTSE RAFI Europe Portfolio	PEF		—		0.04415		—		—		—		—
PowerShares FTSE RAFI Europe Small-Mid Portfolio	PWD		—		—		—		—		—		—
PowerShares FTSE RAFI Japan Portfolio	PJO		—		—		—		—		—		—
PowerShares 1-30 Laddered Treasury Portfolio	PLW		—		—		—		—		—		—
PowerShares Emerging Markets Sovereign Debt Portfolio	PCY		—		—		—		—		—		—
PowerShares Insured National Municipal Bond Portfolio	PZA		—		—		—		—		—		—
PowerShares Insured California Municipal Bond Portfolio	PWZ		—		—		—		—		—		—
PowerShares Insured New York Municipal Bond Portfolio	PZT		—		—		—		—		—		—

43

Frequency Distribution of Discounts & Premiums

Since Inception through October 31, 2007

					Closing Price Above NAV (bps)
Ticker	Fund Name	Inception	Days		0-24		25-49		50-99		100-149		150-199		200+
PUA	PowerShares Dynamic Asia Pacific Portfolio	6/13/07		99		10		10		22		14		13		6
PFA	PowerShares Dynamic Developed International Opportunities Portfolio	6/13/07		99		7		6		30		37		10		1
PEH	PowerShares Dynamic Europe Portfolio	6/13/07		99		15		24		30		13		1		1
PBD	PowerShares Global Clean Energy Portfolio	6/13/07		99		7		8		24		20		21		9
PIO	PowerShares Global Water Portfolio	6/13/07		99		10		17		40		17		5		3
PFP	PowerShares International Listed Private Equity Portfolio	9/27/07		25		0		1		4		12		5		2
PAF	PowerShares FTSE RAFI Asia Pacific ex-Japan Portfolio	6/25/07		91		12		8		15		15		9		5
PDQ	PowerShares FTSE RAFI Asia Pacific ex-Japan Small-Mid Portfolio	9/27/07		25		0		0		1		7		1		16
PXF	PowerShares FTSE RAFI Developed Markets ex-U.S. Portfolio	6/25/07		91		15		11		24		14		2		3
PDN	PowerShares FTSE RAFI Developed Markets ex-U.S. Small-Mid Portfolio	9/27/07		25		0		2		8		10		4		1
PXH	PowerShares FTSE RAFI Emerging Markets Portfolio	9/27/07		25		0		1		0		8		5		8
PEF	PowerShares FTSE RAFI Europe Portfolio	6/25/07		91		15		14		13		7		2		2
PWD	PowerShares FTSE RAFI Europe Small-Mid Portfolio	9/27/07		25		1		1		13		7		3		0
PJO	PowerShares FTSE RAFI Japan Portfolio	6/25/07		91		11		14		17		14		6		2
PLW	PowerShares 1-30 Laddered Treasury Portfolio	10/11/07		15		12		1		0		0		0		0
PCY	PowerShares Emerging Markets Sovereign Debt Portfolio	10/11/07		15		0		2		10		3		0		0
PZA	PowerShares Insured National Municipal Bond Portfolio	10/11/07		15		9		1		2		0		0		0
PWZ	PowerShares Insured California Municipal Bond Portfolio	10/11/07		15		5		6		2		0		0		0
PZT	PowerShares Insured New York Municipal Bond Portfolio	10/11/07		15		6		3		1		0		0		0

44

	Closing Below Above NAV (bps)
Ticker	-0-24		-25-49		-50-99		-100-149		-150-199		-200+
PUA		14		2		6		1		1		0
PFA		5		3		0		0		0		0
PEH		6		4		5		0		0		0
PBD		5		0		3		2		0		0
PIO		5		1		1		0		0		0
PFP		1		0		0		0		0		0
PAF		4		7		6		8		2		0
PDQ		0		0		0		0		0		0
PXF		7		6		4		3		1		1
PDN		0		0		0		0		0		0
PXH		2		1		0		0		0		0
PEF		8		9		9		7		4		1
PWD		0		0		0		0		0		0
PJO		9		3		7		6		1		1
PLW		2		0		0		0		0		0
PCY		0		0		0		0		0		0
PZA		2		1		0		0		0		0
PWZ		2		0		0		0		0		0
PZT		4		0		1		0		0		0

45

Fees and Expenses

As a shareholder of a Fund of the PowerShares Exchange-Traded Fund Trust II, you incur advisory fees and other Fund expenses. The expense examples below are intended to help you understand your ongoing costs (in dollars) of investing in the Funds and to compare these costs with the ongoing costs of investing in other funds.

The example is based on an investment of $1,000 invested at the beginning of the period and held through the period ended October 31, 2007.

Actual Expenses

The first line in the following tables provides information about actual account values and actual expenses. You may use the information in this line, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the first line under the heading "Expenses Paid During Period" to estimate the expenses you paid on your account during this period.

Hypothetical Example for Comparison Purposes

The second line in the following tables provides information about hypothetical account values and hypothetical expenses based on the Funds' actual expense ratio and an assumed annualized rate of return of 5% per year before expenses, which is not the Funds' actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Funds and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds.

Please note that the expenses shown in the tables are meant to highlight your ongoing costs only, and do not reflect any transactional costs such as sales charges and brokerage commissions. Therefore the second line in the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.

	Beginning Account Value June 13, 2007 (Commencement of Investment Operations)		Ending Account Value October 31, 2007		Annualized Expense Ratio Based on Number of Days in the Period			Expenses Paid During Period (1) June 13, 2007 (Commencement of Investment Operations) to October 31, 2007
PowerShares Dynamic Asia Pacific Portfolio Actual	$	1,000.00	$	1,296.31		0.80	%	$	3.52
Hypothetical (5% return before expenses)	$	1,000.00	$	1,021.17		0.80	%	$	4.08
PowerShares Dynamic Developed International Opportunities Portfolio Actual	$	1,000.00	$	1,084.15		0.75	%	$	3.00
Hypothetical (5% return before expenses)	$	1,000.00	$	1,021.42		0.75	%	$	3.82
PowerShares Dynamic Europe Portfolio Actual	$	1,000.00	$	1,047.77		0.75	%	$	2.95
Hypothetical (5% return before expenses)	$	1,000.00	$	1,021.42		0.75	%	$	3.82

46

Fees and Expenses (Continued)

	Beginning Account Value June 13, 2007 (Commencement of Investment Operations)		Ending Account Value October 31, 2007		Annualized Expense Ratio Based on Number of Days in the Period			Expenses Paid During Period (1) June 13, 2007 (Commencement of Investment Operations) to October 31, 2007
PowerShares Global Clean Energy Portfolio Actual	$	1,000.00	$	1,233.08		0.75	%	$	3.21
Hypothetical (5% return before expenses)	$	1,000.00	$	1,021.42		0.75	%	$	3.82
PowerShares Global Water Portfolio Actual	$	1,000.00	$	1,087.70		0.75	%	$	3.00
Hypothetical (5% return before expenses)	$	1,000.00	$	1,021.42		0.75	%	$	3.82
	Beginning Account Value September 27, 2007 (Commencement of Investment Operations)		Ending Account Value October 31, 2007		Annualized Expense Ratio Based on Number of Days in the Period			Expenses Paid During Period (2) September 27, 2007 (Commencement of Investment Operations) to October 31, 2007
PowerShares International Listed Private Equity Portfolio Actual	$	1,000.00	$	1,063.04		0.75	%	$	0.72
Hypothetical (5% return before expenses)	$	1,000.00	$	1,021.42		0.75	%	$	3.82
	Beginning Account Value June 25, 2007 (Commencement of Investment Operations)		Ending Account Value October 31, 2007		Annualized Expense Ratio Based on Number of Days in the Period			Expenses Paid During Period (3) June 25, 2007 (Commencement of Investment Operations) to October 31, 2007
PowerShares FTSE RAFI Asia Pacific ex-Japan Portfolio Actual	$	1,000.00	$	1,265.34		0.80	%	$	3.18
Hypothetical (5% return before expenses)	$	1,000.00	$	1,021.17		0.80	%	$	4.08

47

Fees and Expenses (Continued)

	Beginning Account Value September 27, 2007 (Commencement of Investment Operations)		Ending Account Value October 31, 2007		Annualized Expense Ratio Based on Number of Days in the Period			Expenses Paid During Period (2) September 27, 2007 (Commencement of Investment Operations) to October 31, 2007
PowerShares FTSE RAFI Asia Pacific ex-Japan Small-Mid Portfolio Actual	$	1,000.00	$	1,072.94		0.80	%	$	0.77
Hypothetical (5% return before expenses)	$	1,000.00	$	1,021.17		0.80	%	$	4.08
	Beginning Account Value June 25, 2007 (Commencement of Investment Operations)		Ending Account Value October 31, 2007		Annualized Expense Ratio Based on Number of Days in the Period			Expenses Paid During Period (3) June 25, 2007 (Commencement of Investment Operations) to October 31, 2007
PowerShares FTSE RAFI Developed Markets ex-U.S. Portfolio
Actual	$	1,000.00	$	1,074.79		0.75	%	$	2.73
Hypothetical (5% return before expenses)	$	1,000.00	$	1,021.42		0.75	%	$	3.82
	Beginning Account Value September 27, 2007 (Commencement of Investment Operations)		Ending Account Value October 31, 2007		Annualized Expense Ratio Based on Number of Days in the Period			Expenses Paid During Period (2) September 27, 2007 (Commencement of Investment Operations) to October 31, 2007
PowerShares FTSE RAFI Developed Markets ex-U.S. Small-Mid Portfolio Actual	$	1,000.00	$	1,051.23		0.75	%	$	0.72
Hypothetical (5% return before expenses)	$	1,000.00	$	1,021.42		0.75	%	$	3.82
PowerShares FTSE RAFI Emerging Markets Portfolio Actual	$	1,000.00	$	1,093.54		0.85	%	$	0.83
Hypothetical (5% return before expenses)	$	1,000.00	$	1,020.92		0.85	%	$	4.33

48

Fees and Expenses (Continued)

	Beginning Account Value June 25, 2007 (Commencement of Investment Operations)		Ending Account Value October 31, 2007		Annualized Expense Ratio Based on Number of Days in the Period			Expenses Paid During Period (3) June 25, 2007 (Commencement of Investment Operations) to October 31, 2007
PowerShares FTSE RAFI Europe Portfolio Actual	$	1,000.00	$	1,096.68		0.75	%	$	2.76
Hypothetical (5% return before expenses)	$	1,000.00	$	1,021.42		0.75	%	$	3.82
	Beginning Account Value September 27, 2007 (Commencement of Investment Operations)		Ending Account Value October 31, 2007		Annualized Expense Ratio Based on Number of Days in the Period			Expenses Paid During Period (2) September 27, 2007 (Commencement of Investment Operations) to October 31, 2007
PowerShares FTSE RAFI Europe Small-Mid Portfolio Actual	$	1,000.00	$	1,063.12		0.75	%	$	0.72
Hypothetical (5% return before expenses)	$	1,000.00	$	1,021.42		0.75	%	$	3.82
	Beginning Account Value June 25, 2007 (Commencement of Investment Operations)		Ending Account Value October 31, 2007		Annualized Expense Ratio Based on Number of Days in the Period			Expenses Paid During Period (3) June 25, 2007 (Commencement of Investment Operations) to October 31, 2007
PowerShares FTSE RAFI Japan Portfolio Actual	$	1,000.00	$	1,000.00		0.75	%	$	2.63
Hypothetical (5% return before expenses)	$	1,000.00	$	1,021.42		0.75	%	$	3.82

49

Fees and Expenses (Continued)

	Beginning Account Value October 11, 2007 (Commencement of Investment Operations)		Ending Account Value October 31, 2007		Annualized Expense Ratio Based on Number of Days in the Period			Expenses Paid During Period (4) October 11, 2007 (Commencement of Investment Operations) to October 31, 2007
PowerShares 1-30 Laddered Treasury Portfolio Actual	$	1,000.00	$	1,017.06		0.25	%	$	0.14
Hypothetical (5% return before expenses)	$	1,000.00	$	1,023.95		0.25	%	$	1.28
PowerShares Emerging Markets Sovereign Debt Portfolio
Actual	$	1,000.00	$	1,016.48		0.50	%	$	0.28
Hypothetical (5% return before expenses)	$	1,000.00	$	1,022.68		0.50	%	$	2.55
PowerShares Insured National Municipal Bond Portfolio
Actual	$	1,000.00	$	1,005.21		0.28	%	$	0.15
Hypothetical (5% return before expenses)	$	1,000.00	$	1,023.79		0.28	%	$	1.43
PowerShares Insured California Municipal Bond Portfolio
Actual	$	1,000.00	$	1,002.82		0.28	%	$	0.15
Hypothetical (5% return before expenses)	$	1,000.00	$	1,023.79		0.28	%	$	1.43
PowerShares Insured New York Municipal Bond Portfolio
Actual	$	1,000.00	$	1,004.44		0.28	%	$	0.15
Hypothetical (5% return before expenses)	$	1,000.00	$	1,023.79		0.28	%	$	1.43

(1)  Expenses are calculated using the annualized expense ratio, which represents the ongoing expenses as a percentage of net assets for the period June 13, 2007 (commencement of investment operations) to October 31, 2007. Actual expenses are calculated by multiplying the Fund's annualized expense ratio by the average account value for the period; then multiplying the result by 141 and then dividing the result by 365. Hypothetical expenses are calculated by multiplying the Fund's annualized expense ratio by the average account value for the period; then multiplying the result by 184 and then dividing the result by 365.

(2)  Expenses are calculated using the annualized expense ratio, which represents the ongoing expenses as a percentage of net assets for the period September 27, 2007 (commencement of investment operations) to October 31, 2007. Actual expenses are calculated by multiplying the Fund's annualized expense ratio by the average account value for the period; then multiplying the result by 35 and then dividing the result by 365. Hypothetical expenses are calculated by multiplying the Fund's annualized expense ratio by the average account value for the period; then multiplying the result by 184 and then dividing the result by 365.

(3)  Expenses are calculated using the annualized expense ratio, which represents the ongoing expenses as a percentage of net assets for the period June 25, 2007 (commencement of investment operations) to October 31, 2007. Actual expenses are calculated by multiplying the Fund's annualized expense ratio by the average account value for the period; then multiplying the result by 129 and then dividing the result by 365. Hypothetical expenses are calculated by multiplying the Fund's annualized expense ratio by the average account value for the period; then multiplying the result by 184 and then dividing the result by 365.

(4)  Expenses are calculated using the annualized expense ratio, which represents the ongoing expenses as a percentage of net assets for the period October 11, 2007 (commencement of investment operations) to October 31, 2007. Actual expenses are calculated by multiplying the Fund's annualized expense ratio by the average account value for the period; then multiplying the result by 21 and then dividing the result by 365. Hypothetical expenses are calculated by multiplying the Fund's annualized expense ratio by the average account value for the period; then multiplying the result by 184 and then dividing the result by 365.

50

Schedule of Investments

PowerShares Dynamic Asia Pacific Portfolio

October 31, 2007

Number of Shares			Value
		Common Stocks and Other Equity Interests—99.5%
		Australia—27.1%
	5,584	Adelaide Bank Ltd.	$	75,917
	20,330	Adelaide Brighton Ltd.		69,334
	30,354	Amcor Ltd.		197,477
	22,204	AMP Ltd.		209,685
	6,621	Ansell Ltd.		75,902
	24,464	APN News & Media Ltd.		121,522
	5,701	Aquarius Platinum Ltd.		221,903
	1,527	ASX Ltd.		81,159
	5,591	AWB Ltd.		15,441
	5,811	Bendigo Bank Ltd.		75,233
	6,024	BHP Billiton Ltd.		257,364
	22,032	BlueScope Steel Ltd.		216,432
	64,933	CFS Retail Property Trust		146,831
	38,545	Challenger Financial Services Group Ltd.		225,760
	13,024	Coates Hire Ltd.		78,093
	1,428	Commonwealth Bank of Australia		81,389
	133,346	Commonwealth Property Office Fund		195,254
	67,602	CSR Ltd.		213,637
	75,021	DB RREEF Trust		145,309
	11,012	Flight Centre Ltd.		248,093
	30,885	GPT Group		132,237
	13,981	Harvey Norman Holdings Ltd.		87,848
	92,463	ING Industrial Fund		239,932
	124,548	ING Office Fund		207,765
	21,354	Jubilee Mines NL		465,260
	54,082	Macquarie Airports		219,528
	111,286	Macquarie CountryWide Trust		207,300
	25,866	Macquarie Infrastructure Group		75,749
	139,396	Macquarie Office Trust		211,864
	42,751	MFS Ltd.		206,021
	3,291	Minara Resources Ltd.		19,825
	34,482	Oil Search Ltd.		135,814
	48,277	OneSteel Ltd.		307,816
	14,884	Origin Energy Ltd.		126,213
	61,670	Oxiana Ltd.		240,041
	67,197	Pacific Brands Ltd.		215,471
	1,090	Perpetual Ltd.		75,014
	40,096	Qantas Airways Ltd.		219,609
	6,888	QBE Insurance Group Ltd.		207,462
	15,760	Santos Ltd.		204,916
	6,232	Seven Network Ltd.		78,893
	8,082	Sims Group Ltd.		210,843
	6,393	St. George Bank Ltd.		215,363
	11,480	Suncorp-Metway Ltd.		215,761
	92,235	Virgin Blue Holdings Ltd.		188,053
	12,364	Zinifex Ltd.		190,781
				7,857,114
		China—31.1%
	162,885	Air China Ltd., H-Shares		245,458
	95,557	Aluminum Corp. of China Ltd., H-Shares		272,463
	246,890	Bank of China Ltd., H-Shares		161,179
	114,639	Bank of Communications Co. Ltd., H-Shares		207,364

Number of Shares			Value
		Common Stocks and Other Equity Interests (Continued)
	80,790	BOC Hong Kong Holdings Ltd.	$	226,710
	45,000	China Aviation Oil Singapore Corp. Ltd.		84,176
	256,918	China Construction Bank Corp., H-Shares		288,713
	34,586	China Life Insurance Co. Ltd., H-Shares		229,583
	11,537	China Mobile Ltd.		233,693
	71,345	China Netcom Group Corp. (Hong Kong) Ltd.		217,235
	168,468	China Petroleum & Chemical Corp. (Sinopec), H-Shares		253,437
	289,422	China Shipping Container Lines Co. Ltd., H-Shares		378,638
	315,998	China Telecom Corp Ltd., H-Shares		272,749
	114,058	China Unicom Ltd.		274,005
	232,541	CITIC International Financial Holdings Ltd.		198,315
	36,389	Citic Pacific Ltd.		227,701
	154,322	CNOOC Ltd.		321,752
	343,634	CNPC Hong Kong Ltd.		277,096
	975	Dah Chong Hong Holdings Ltd.*		596
	163,968	Datang International Power Generation Co. Ltd., H-Shares		184,260
	119,785	Denway Motors Ltd.		83,454
	322,393	Dongfeng Motor Group Co. Ltd., H-Shares		293,660
	200,090	Guangzhou Investment Co. Ltd.		84,158
	280,934	Haitian International Holdings Ltd.		224,724
	167,416	Huaneng Power International, Inc., H-Shares		196,990
	97,512	Industrial & Commercial Bank of China, H-Shares		92,092
	85,838	Industrial and Commercial Bank of China (Asia) Ltd.		237,553
	95,346	Jiangxi Copper Co. Ltd., H-Shares		332,140
	93,996	Kowloon Development Co. Ltd.		291,053
	97,335	Lenovo Group Ltd.		109,632
	220,267	Maanshan Iron & Steel Co., H-Shares		194,099
	90,789	Minmetals Resources Ltd.		78,012
	17,000	People's Food Holdings Ltd.		15,372
	119,970	PetroChina Co. Ltd., H-Shares		300,280
	154,761	PICC Property & Casualty Co. Ltd., H-Shares		323,466
	17,664	Ping An Insurance (Group) Co. of China Ltd., H-Shares		244,308
	35,673	Shanghai Industrial Holdings Ltd.		208,953
	228,782	Shenzhen Investment Ltd.		218,427
	136,024	Shui On Land Ltd.		187,781
	156,633	Tianjin Development Holdings Ltd.		261,904
	122,073	Yanzhou Coal Mining Co. Ltd., H-Shares		260,816
	169,382	Zhejiang Expressway Co. Ltd., H-Shares		241,700
				9,035,697
		Hong Kong—20.9%
	204,637	Allied Properties HK Ltd.		81,318
	72,744	Cathay Pacific Airways Ltd.		215,394
	245,092	Chaoda Modern Agriculture (Holdings) Ltd.		221,666
	19,336	Cheung Kong Infrastructure Holdings Ltd.		75,340
	69,655	China Insurance International Holdings Co. Ltd.*		224,221
	117,441	China Oriental Group Co. Ltd.		84,094

See Notes to Financial Statements.

51

Schedule of Investments (Continued)

PowerShares Dynamic Asia Pacific Portfolio

October 31, 2007

Number of Shares			Value
		Common Stocks and Other Equity Interests (Continued)
	128,050	Chinese Estates Holdings Ltd.	$	257,395
	28,628	CLP Holdings Ltd.		192,434
	86,904	Dah Sing Banking Group Ltd.		200,251
	22,936	Dah Sing Financial Group		217,648
	265,328	First Pacific Co. Ltd.		200,602
	324,950	Guangdong Investment Ltd.		220,944
	40,133	Hang Lung Group Ltd.		235,077
	71,346	Hongkong and Shanghai Hotels (The) Ltd.		131,447
	38,145	Hongkong Electric Holdings Ltd.		195,381
	199,723	Hopewell Highway Infrastructure Ltd.		187,591
	30,519	Hopewell Holdings Ltd.		157,107
	12,274	Hutchison Whampoa Ltd.		152,974
	18,074	Jardine Cycle & Carriage Ltd.		261,988
	14,027	Jardine Strategic Holdings Ltd.		232,848
	26,657	Kingboard Chemical Holdings Ltd.		173,683
	211,844	Kingboard Laminates Holdings Ltd.		186,950
	144,898	Pacific Basin Shipping Ltd.		320,051
	17,385	Swire Pacific Ltd., Class A		246,505
	36,300	Transport International Holdings Ltd.		184,057
	25,227	VTech Holdings Ltd.		213,512
	45,585	Wharf (Holdings) (The) Ltd.		272,306
	73,445	Wheelock and Co. Ltd.		236,895
	42,000	Wheelock Properties (S) Ltd.		71,027
	17,636	Wing Hang Bank Ltd.		206,377
	18,906	Wing Lung Bank Ltd.		195,382
				6,052,465
		Korea, Republic of—1.2%
	132,000	STX Pan Ocean Co. Ltd.		335,296
		Malaysia—1.0%
	13,880	Guoco Group Ltd.		213,103
	200,835	Samling Global Ltd.		68,406
				281,509
		Netherlands—0.7%
	26,106	ASM Pacific Technology Ltd.		203,437
		New Zealand—1.8%
	24,594	Air New Zealand Ltd.		40,103
	20,310	Fletcher Building Ltd.		185,270
	90,554	Telecom Corp. of New Zealand Ltd.		302,280
				527,653
		Norway—0.6%
	152,800	Total Access Communication Public Co. Ltd.*		183,360
		Singapore—13.6%
	33,940	Australand Property Group		74,860
	142,000	ComfortDelgro Corp. Ltd.		189,170
	13,000	DBS Group Holdings Ltd.		201,001
	30,000	Delong Holdings Ltd.		64,607
	75,000	Golden Agri-Resources Ltd.		90,595

Number of Shares			Value
		Common Stocks and Other Equity Interests (Continued)
	46,000	Hong Leong Finance Ltd.	$	125,101
	24,000	Keppel Corp. Ltd.		243,520
	170,000	Labroy Marine Ltd.		330,906
	140,000	MobileOne Ltd.		202,934
	58,000	Neptune Orient Lines Ltd.		204,176
	34,000	Oversea-Chinese Banking Corp. Ltd.		215,910
	200,884	PCCW Ltd.		129,071
	16,400	Singapore Airlines Ltd.		221,874
	51,000	Singapore Petroleum Co. Ltd.		288,663
	85,000	Singapore Post Ltd.		71,579
	24,000	Singapore Press Holdings Ltd.		75,872
	82,000	Singapore Telecommunications Ltd.		230,930
	158,000	SMRT Corp. Ltd.		191,945
	97,000	StarHub Ltd.		208,897
	178,000	STATS ChipPAC Ltd.*		201,498
	6,000	United Overseas Bank Ltd.		89,042
	12,000	Venture Corp. Ltd.		115,134
	75,000	Wing Tai Holdings Ltd.		179,120
				3,946,405
		Taiwan, Province of China—0.4%
	41,141	Yue Yuen Industrial (Holdings) Ltd.		126,064
		Thailand—0.4%
	715,000	Thai Beverage Public Co. Ltd.		128,318
		United Kingdom—0.1%
	16,538	Guiness Peat Group PLC		24,296
		United States—0.6%
	3,291	Caltex Australia Ltd.		65,208
	7,502	Portman Ltd.*		94,206
				159,414
		Total Common Stocks and Other Equity Interests (Cost $24,412,513)		28,861,028
		Warrants—0.0%
		China—0.0%
	8,468	Industrial and Commercial Bank of China (Asia) Ltd., expiring 11/06/2008* (Cost $0)		1,584
		Money Market Fund—0.8%
	226,506	Liquid Assets Portfolio Private Class** (Cost $226,506)		226,506
		Total Investments (Cost $24,639,019)—100.3%		29,089,118
		Liabilities in excess of other assets—(0.3%)		(76,576	)
		Net Assets—100.0%	$	29,012,542

*  Non-income producing security.

**  Affiliated investment.

See Notes to Financial Statements.

52

Schedule of Investments

PowerShares Dynamic Developed International Opportunities Portfolio

October 31, 2007

Number of Shares			Value
		Common Stocks and Other Equity Interests—104.1%
		Australia—4.6%
	4,718	ASX Ltd.	$	250,757
	23,813	BlueScope Steel Ltd.		233,928
	42,526	Challenger Financial Services Group Ltd.		249,077
	57,589	Macquarie Airports		233,763
	77,689	Macquarie Infrastructure Group		227,514
	65,440	Oxiana Ltd.		254,715
	44,040	Qantas Airways Ltd.		241,211
	17,037	Santos Ltd.		221,520
	7,121	St. George Bank Ltd.		239,888
	13,011	Suncorp-Metway Ltd.		244,535
	14,133	Zinifex Ltd.		218,078
				2,614,986
		Austria—3.7%
	1,144	A-TEC Industries AG		278,054
	1,908	Mayr-Melnhof Karton AG		226,353
	2,955	OMV AG		220,640
	1,472	Raiffeisen International Bank - Holding AG		242,989
	4,574	RHI AG*		233,794
	6,588	UNIQA Versicherungen AG		232,561
	2,555	Voestalpine AG		229,439
	3,423	Wienerberger AG		212,946
	5,709	Zumtobel AG		243,655
				2,120,431
		Belgium—2.0%
	7,201	Dexia S.A.		230,656
	1,216	Fortis		38,809
	486	Fortis - Strip VVPR*		7
	1,604	KBC GROEP N.V.		224,401
	507	S.A. D'Ieteren N.V.		219,163
	1,499	Solvay S.A.		227,516
	3,463	Tessenderlo Chemie N.V.		219,442
				1,159,994
		Canada—4.8%
	900	BCE, Inc.		39,087
	1,200	Canadian Western Bank		38,876
	3,300	CGI Group, Inc., Class A*		37,385
	600	EnCana Corp.		41,756
	300	Fairfax Financial Holdings Ltd.		82,533
	9,679	HudBay Minerals, Inc.*		277,591
	900	Husky Energy, Inc.		41,721
	2,136	Inmet Mining Corp.		227,138
	1,800	Linamar Corp.		43,797
	1,889	Magna International, Inc., Class A		178,361
	6,498	Onex Corp.		271,879
	6,889	Power Corp. of Canada		293,895
	6,394	Power Financial Corp.		283,482
	15,419	Sherritt International Corp.		285,717
	5,648	Teck Cominco Ltd., Class B		281,330
	14,521	WestJet Airlines Ltd.*		305,312
				2,729,860

Number of Shares			Value
		Common Stocks and Other Equity Interests (Continued)
		China—3.2%
	18,000	Aluminum Corp. of China Ltd., H-Shares	$	51,324
	92,377	BOC Hong Kong Ltd.		259,225
	51,000	China Construction Bank Corp., H-Shares		57,312
	92,037	China Netcom Group Corp. (Hong Kong) Ltd.		280,239
	204,939	China Petroleum & Chemical Corp. (Sinopec), H-Shares		308,302
	415,321	China Telecom Corp. Ltd., H-Shares		358,479
	149,531	PetroChina Co. Ltd., H-Shares		374,272
	9,000	Shanghai Industrial Holdings Ltd.		52,717
	2,400	Sino-Forest Corp.*		63,474
				1,805,344
		Denmark—3.8%
	20	A P Moller - Maersk A/S, Class B		275,629
	3,546	Almindelig Brand A/S*		234,709
	16,364	BW Gas ASA		220,054
	525	D/S Norden A/S		64,608
	900	Dampskibsselskabet Torm A/S		37,385
	6,915	Danske Bank A/S		304,351
	2,945	Jyske Bank A/S*		242,375
	5,089	Sydbank A/S		233,862
	1,453	Topdanmark A/S*		247,626
	3,423	Trygvesta A/S		271,084
				2,131,683
		Finland—0.8%
	10,564	OKO Bank PLC, Class A		226,195
	3,616	Rautaruukki Oyj		206,642
				432,837
		France—9.9%
	6,241	Air France-KLM		236,925
	4,962	AXA		221,537
	2,028	BNP Paribas		223,249
	1,739	CNP Assurances		221,374
	2,101	Compagnie de Saint-Gobain		224,902
	1,619	Compagnie Generale des Etablissements Michelin, Class B		216,498
	5,551	Credit Agricole S.A.		219,164
	746	Eramet		332,418
	3,623	Kaufman & Broad S.A.		205,994
	1,402	Lafarge S.A.		227,682
	1,291	Nexans S.A.		219,069
	2,686	PSA Peugeot Citroen		248,625
	3,107	Rallye S.A.		238,013
	1,507	Renault S.A.		252,691
	12,306	Rexel S.A.*		259,044
	2,147	Sa des Ciments Vicat		232,932
	8,118	SCOR SE		220,801
	6,381	Sequana Capital S.A.		212,330
	1,284	Societe Generale		215,225
	3,848	Suez S.A.		249,963

See Notes to Financial Statements.

53

Schedule of Investments (Continued)

PowerShares Dynamic Developed International Opportunities Portfolio

October 31, 2007

Number of Shares			Value
		Common Stocks and Other Equity Interests (Continued)
	3,788	Thales S.A.	$	235,762
	2,619	Total S.A.		210,860
	4,000	Valeo S.A.		218,807
	5,099	Vivendi S.A.		229,277
				5,573,142
		Germany—8.8%
	4,691	Aareal Bank AG		242,761
	928	Allianz SE		208,799
	4,549	Arques Industries AG		195,661
	3,375	Bayerische Motoren Werke (BMW) AG		225,145
	46,000	Bosch Corp.		239,008
	2,556	Daimler AG		283,110
	1,690	Deutsche Bank AG		226,139
	7,795	Deutsche Lufthansa AG		230,172
	192	E.ON AG		37,516
	11,336	Epcos AG		227,965
	1,584	Euler Hermes S.A.		212,299
	4,427	Hannover Rueckversicherung AG		232,877
	4,812	Heidelberger Druckmaschinen AG		196,879
	5,685	Hypo Real Estate Holding AG		338,613
	4,508	Lanxess AG		223,051
	3,562	Leoni AG		226,180
	1,179	Muenchener Rueckversicherungs AG		225,155
	4,694	Norddeutsche Affinerie AG		196,940
	2,070	RWE AG		281,808
	1,219	Salzgitter AG		239,407
	37,378	Thomas Cook Group PLC*		232,941
	3,424	ThyssenKrupp AG		227,225
				4,949,651
		Greece—0.1%
	3,660	Alpha Bank A.E. ADR		33,810
	2,724	National Bank of Greece S.A. ADR		38,163
				71,973
		Hong Kong—1.6%
	72,703	Cathay Pacific Airways Ltd.		215,272
	139,429	Chinese Estates Holdings Ltd.		280,268
	22,093	Jardine Cycle & Carriage Ltd.		320,243
	7,500	Kingboard Chemical Holdings Ltd.		48,866
	3,000	Wing Hang Bank Ltd.		35,106
				899,755
		India—0.5%
	5,714	Vedanta Resources PLC		261,139
		Ireland—1.2%
	9,158	Allied Irish Banks PLC		228,419
	12,013	Anglo Irish Bank Corp. PLC		201,606
	12,812	Bank of Ireland		236,146
				666,171

Number of Shares			Value
		Common Stocks and Other Equity Interests (Continued)
		Italy—6.4%
	1,408	AMB Generali Holding AG	$	219,265
	5,701	Assicurazioni Generali SpA		270,614
	9,650	Banca Popolare dell'Emilia Romagna Scrl		228,265
	1,067	Bank Austria Creditanstalt AG		222,290
	8,136	Buzzi Unicem SpA		230,472
	20,872	Cementir SpA		206,847
	16,517	Credito Emiliano SpA		223,547
	5,791	Eni SpA		211,129
	7,644	Finmeccanica SpA		226,598
	4,717	Fondiaria - Sai SpA		228,547
	30,270	Impregilo SpA*		242,614
	11,777	Indesit Co. SpA		208,550
	26,605	Milano Assicurazioni SpA		221,515
	35,717	Saras SpA		215,350
	70,595	Telecom Italia SpA		221,374
	25,498	UniCredito Italiano SpA		218,015
				3,594,992
		Japan—16.9%
	6,100	Aisin Seiki Co. Ltd.		248,688
	26,000	Asahi Kasei Corp.		197,563
	44,000	Cosmo Oil Co. Ltd.		188,923
	22,000	Daihatsu Motor Co. Ltd.		232,051
	5,700	Goldcrest Co. Ltd.		268,474
	27,000	Hino Motors Ltd.		193,685
	18,000	Hitachi Kokusai Electric, Inc.		233,422
	40,000	Isuzu Motors Ltd.		197,077
	22,000	ITOCHU Corp.		274,988
	600	JFE Holdings, Inc.		34,818
	35,000	JFE Shoji Holdings, Inc.		266,557
	3,000	Kawasaki Kisen Kaisha Ltd.		41,142
	42,000	Keiyo Bank (The) Ltd.		215,674
	6,800	Kintetsu World Express, Inc.		241,835
	188,000	Kobe Steel Ltd.		670,236
	1,200	Kyoei Steel Ltd.		29,249
	3,000	Kyowa Exeo Corp.		26,725
	22,000	Makino Milling Machine Co. Ltd.		227,853
	24,000	Marubeni Corp.		203,600
	43,000	Mitsubishi Materials Corp.		248,783
	3,000	Mitsui O.S.K. Lines Ltd.		49,026
	9,300	NIFCO, Inc.		216,598
	24,000	Nippon Chemi-Con Corp.		188,194
	21,000	Nippon Mining Holdings, Inc.		196,366
	12,000	Nippon Seiki Co. Ltd.		277,920
	39,000	Nippon Sheet Glass Co. Ltd.		236,128
	28,000	Nippon Steel Corp.		184,343
	48,000	Nisshin Steel Co. Ltd.		182,365
	8,100	Nissin Kogyo Co. Ltd.		209,025
	18,000	Pacific Metals Co. Ltd.		223,897
	145	Resona Holdings, Inc.		256,582

See Notes to Financial Statements.

54

Schedule of Investments (Continued)

PowerShares Dynamic Developed International Opportunities Portfolio

October 31, 2007

Number of Shares			Value
		Common Stocks and Other Equity Interests (Continued)
	9,700	Seiko Epson Corp.	$	226,755
	52,500	Sojitz Corp.		237,260
	4,500	Sony Corp.		220,150
	15,000	Sumitomo Metal Mining Co. Ltd.		330,485
	8,200	Tokai Rika Co. Ltd.		239,702
	12,400	Tokai Rubber Industries Ltd.		242,547
	24,000	Toshiba Corp.		200,893
	38,000	Toshiba TEC Corp.		241,610
	36,000	Tosoh Corp.		228,269
	14,000	Toyota Auto Body Co. Ltd.		225,025
	6,700	Toyota Boshoku Corp.		217,938
	5,500	Yamato Kogyo Co. Ltd.		253,806
	27,000	Yokohama Rubber (The) Co. Ltd.		199,540
				9,525,767
		Luxembourg—0.9%
	3,263	ArcelorMittal		261,529
	9,715	Banco Espirito Santo S.A.		235,003
				496,532
		Malaysia—0.5%
	20,497	Guoco Group Ltd.		314,695
		Netherlands—2.4%
	11,348	Aegon N.V.		234,117
	7,775	ASM International N.V.		219,346
	2,322	Hunter Douglas N.V.		216,477
	4,209	Koninklijke DSM N.V.		238,338
	3,648	Royal Dutch Shell PLC, Class A		159,520
	2,438	Smit Internationale N.V.		235,580
	71	SNS Reaal		1,701
	4,477	Wavin N.V.		77,142
				1,382,221
		Norway—0.8%
	46,474	Acta Holding ASA		183,608
	5,973	Norsk Hydro ASA		87,301
	3,856	StatoilHydro ASA		129,884
	8	Telenor ASA		187
	1,800	TGS Nopec Geophysical Co. ASA*		30,048
				431,028
		Portugal—2.5%
	51,448	Banco Comercial Portugues S.A., Class R		248,604
	16,151	Galp Energia SGPS S.A., Class B		260,069
	57,274	Portucel-Empresa Produtora de Pasta e Papel S.A.		217,925
	12,876	Semapa - Sociedade de Investimento e Gestao SGPS S.A.		208,638
	82,498	Sonae SGPS S.A.		241,095
	72,619	Teixeira Duarte - Engenharia Construcoes S.A.		258,452
				1,434,783

Number of Shares			Value
		Common Stocks and Other Equity Interests (Continued)
		Singapore—2.9%
	17,000	DBS Group Holdings Ltd.	$	262,847
	78,000	Neptune Orient Lines Ltd.		274,582
	44,000	Oversea-Chinese Banking Corp. Ltd.		279,413
	21,000	Singapore Airlines Ltd.		284,107
	57,000	Singapore Petroleum Co. Ltd.		322,623
	85,000	Wing Tai Holdings Ltd.		203,003
				1,626,575
		South Africa—0.0%
	51	Mondi Ltd.		514
		Spain—4.4%
	4,148	ACS Actividades de Construccion y Servicios S.A.		256,308
	9,147	Banco Bilbao Vizcaya Argentaria S.A.		229,865
	22,501	Banco de Sabadell S.A.		227,873
	12,644	Banco Popular Espanol S.A.		220,427
	11,297	Banco Santander S.A.		245,159
	49,432	Mapfre S.A.		231,711
	6,077	Obrascon Huarte Lain S.A.		274,395
	11,008	Promotora de Informaciones S.A.		215,317
	5,997	Repsol YPF S.A.		236,426
	9,182	Telefonica S.A.		302,744
	4,668	Tubos Reunidos S.A.		37,414
				2,477,639
		Sweden—2.7%
	12,101	Boliden AB		213,063
	10,235	Electrolux AB, Series B		197,505
	8,603	NCC AB, Class B		213,685
	15,720	Nordea Bank AB		280,736
	19,353	Peab AB		174,938
	3,681	Peab Industri AB, Class B*		31,248
	7,998	Skandinaviska Enskilda Banken AB, Class A		244,551
	10,162	SKF AB, Class B		196,895
				1,552,621
		Switzerland—4.6%
	2,153	Baloise Holding AG		228,665
	474	Banque Cantonale Vaudoise		215,111
	1,205	Bucher Industries AG		285,902
	307	Georg Fischer AG		230,174
	650	Helvetia Holding AG		235,538
	2,013	Holcim Ltd.		229,253
	462	Rieter Holding AG		267,661
	830	Swiss Life Holding		229,153
	2,489	Swiss Re		233,428
	4,364	Vontobel Holding AG		224,027
	720	Zurich Financial Services AG		216,643
				2,595,555

See Notes to Financial Statements.

55

Schedule of Investments (Continued)

PowerShares Dynamic Developed International Opportunities Portfolio

October 31, 2007

Number of Shares			Value
		Common Stocks and Other Equity Interests (Continued)
		United Arab Emirates—0.6%
	52,513	Dragon Oil PLC*	$	335,802
		United Kingdom—13.5%
	33,207	Amlin PLC		221,434
	2	Anglo American PLC		138
	15,079	Antofagasta PLC		262,341
	14,032	Arriva PLC		244,272
	135	Barclays PLC		1,694
	58,964	Beazley Group PLC		211,906
	10,528	Bellway PLC		235,106
	7,867	Berkeley Group Holdings PLC		278,312
	15,896	Bovis Homes Group PLC		219,098
	17,970	BP PLC		233,312
	31,262	Brit Insurance Holdings PLC		210,737
	27,851	British Airways PLC*		257,605
	34,482	BT Group PLC		233,517
	12,508	Burren Energy PLC		314,400
	23,716	Catlin Group Ltd.		247,071
	9,839	Dana Petroleum PLC*		263,663
	14,397	De La Rue PLC		245,242
	50,160	DS Smith PLC		240,701
	60,267	Friends Provident PLC		230,360
	29,895	GKN PLC		227,760
	69	HBOS PLC		1,251
	41,510	Hiscox Ltd.		247,482
	11,744	HSBC Holdings PLC		232,010
	8,248	Kazakhmys PLC		252,555
	10,407	Keller Group PLC		245,159
	37,304	Kesa Electricals PLC		246,042
	6,038	Kier Group PLC		269,173
	81,443	Legal & General Group PLC		237,029
	1,428	National Express Group PLC		39,098
	10,780	Northgate PLC		216,100
	68,415	Old Mutual PLC		261,504
	14,823	Prudential PLC		240,798
	20,702	Royal Bank of Scotland Group PLC		222,122
	55,561	Stagecoach Group PLC		312,211
	24,340	Tullett Prebon PLC		223,487
				7,624,690
		Total Common Stocks and Other Equity Interests (Cost $56,094,649)		58,810,380
		Preferred Stocks—0.6%
		Germany—0.6%
	121	Porsche AG (Cost $245,170)		322,280

Number of Shares			Value
		Money Market Fund—0.1%
	44,680	Liquid Assets Portfolio Private Class** (Cost $44,680)	$	44,680
		Total Investments (Cost $56,384,499)—104.8%		59,177,340
		Liabilities in excess of other assets—(4.8%)		(2,701,470	)
		Net Assets—100.0%	$	56,475,870

ADR American Depositary Receipt.

*  Non-income producing security.

**  Affiliated investment.

See Notes to Financial Statements.

56

Schedule of Investments

PowerShares Dynamic Europe Portfolio

October 31, 2007

Number of Shares			Value
		Common Stocks and Other Equity Interests—100.9%
		Austria—5.0%
	441	Andritz AG	$	32,392
	156	A-TEC Industries AG		37,916
	314	Boehler-Uddeholm AG		33,344
	271	Mayr-Melnhof Karton AG		32,150
	404	OMV AG		30,165
	195	Raiffeisen International Bank - Holding AG		32,189
	627	RHI AG*		32,048
	903	UNIQA Versicherungen AG		31,877
	350	Voestalpine AG		31,430
	425	Wiener Staedtische Versicherung AG		31,297
	468	Wienerberger AG		29,114
	782	Zumtobel AG		33,375
				387,297
		Belgium—4.4%
	294	Ackermans & Van Haaren		30,540
	216	Bekaert N.V.		29,681
	653	Belgacom S.A.		31,167
	317	Delhaize Group		30,026
	959	Dexia S.A.		30,718
	901	Euronav S.A.		26,722
	326	Fortis		10,409
	326	Fortis - Strip VVPR*		5
	429	GIMV N.V.		29,717
	220	KBC GROEP N.V.		30,778
	70	S.A. D'Ieteren N.V.		30,259
	199	Solvay S.A.		30,204
	499	Tessenderlo Chemie N.V.		31,620
				341,846
		Denmark—3.9%
	3	A P Moller - Maersk A/S, Class B		41,344
	500	Almindelig Brand A/S*		33,095
	2,248	BW Gas ASA		30,230
	735	Dampskibsselskabet Torm A/S		30,531
	762	Danske Bank A/S		33,538
	425	Jyske Bank A/S*		34,978
	699	Sydbank A/S		32,122
	200	Topdanmark A/S*		34,085
	400	TrygVesta A/S		31,678
				301,601
		Finland—0.7%
	1,448	OKO Bank PLC, Class A		31,004
	481	Rautaruukki Oyj		27,488
				58,492
		France—12.1%
	855	Air France-KLM		32,458
	677	AXA S.A.		30,226
	262	BNP Paribas		28,842
	248	CNP Assurances		31,570
	282	Compagnie de Saint-Gobain		30,187

Number of Shares			Value
		Common Stocks and Other Equity Interests (Continued)
	443	Compagnie Generale des Etablissements Michelin, Class B	$	59,240
	766	Credit Agricole S.A.		30,243
	113	Eramet		50,353
	596	Gaz de France S.A.		33,801
	750	Haulotte Group		28,440
	172	Lafarge S.A.		27,932
	177	Nexans S.A.		30,035
	390	PSA Peugeot Citroen		36,100
	715	Publicis Groupe		28,995
	454	Rallye S.A.		34,779
	201	Renault S.A.		33,703
	1,688	Rexel S.A.*		35,533
	293	Sa des Ciments Vicat		31,788
	1,276	Safran S.A.		32,324
	1,112	SCOR SE		30,245
	874	Sequana Capital S.A.		29,083
	165	Societe Generale		27,657
	523	Suez S.A.		33,974
	512	Thales S.A.		31,866
	359	Total S.A.		28,904
	548	Valeo S.A.		29,977
	701	Vivendi S.A.		31,520
	343	Wendel		58,830
				948,605
		Germany—11.5%
	641	Aareal Bank AG		33,172
	131	Allianz SE		29,475
	622	Arques Industries AG		26,753
	477	Bayerische Motoren Werke (BMW) AG		31,821
	227	Continental AG		34,253
	303	Daimler AG		33,561
	212	Deutsche Bank AG		28,368
	1,068	Deutsche Lufthansa AG		31,536
	1,553	Epcos AG		31,230
	219	Euler Hermes S.A.		29,352
	1,157	Freenet AG		28,707
	605	Hannover Rueckversicherung AG		31,825
	206	HeidelbergCement AG		32,813
	658	Heidelberger Druckmaschinen AG		26,921
	1,299	Hypo Real Estate Holding AG		77,371
	1,787	Infineon Technologies AG*		26,190
	617	Lanxess AG		30,528
	487	Leoni AG		30,923
	169	Muenchener Rueckversicherungs AG		32,274
	642	Norddeutsche Affinerie AG		26,936
	1,439	Praktiker Bau- und Heimwerkermaerkte AG		51,860
	372	Rheinmetall AG		32,883
	243	RWE AG		33,082
	165	Salzgitter AG		32,405
	5,133	Thomas Cook Group PLC*		31,989

See Notes to Financial Statements.

57

Schedule of Investments (Continued)

PowerShares Dynamic Europe Portfolio

October 31, 2007

Number of Shares			Value
		Common Stocks and Other Equity Interests (Continued)
	468	ThyssenKrupp AG	$	31,058
	265	Vossloh AG		31,227
				898,513
		Greece—0.6%
	2,520	Alpha Bank A.E. ADR		23,279
	1,886	National Bank of Greece S.A. ADR		26,423
				49,702
		India—0.4%
	650	Vedanta Resources PLC		29,706
		Ireland—1.6%
	1,256	Allied Irish Banks PLC		31,327
	3,313	Bank of Ireland		61,063
	920	FBD Holdings PLC		32,943
				125,333
		Italy—9.8%
	203	AMB Generali Holding AG		31,613
	675	Assicurazioni Generali SpA		32,041
	1,323	Banca Popolare dell'Emilia Romagna Scrl		31,295
	2,020	Banca Popolare di Milano Scarl		31,650
	1,247	Banco Popolare Scarl*		29,894
	252	Bank Austria Creditanstalt AG		52,500
	3,848	Buzzi Unicem SpA		109,005
	167	Ciments Francais S.A.		31,334
	2,267	Credito Emiliano SpA		30,682
	794	Eni SpA		28,948
	1,048	Finmeccanica SpA		31,067
	639	Fondiaria - Sai SpA		30,961
	1,113	Gestevision Telecinco S.A.		31,963
	4,156	Impregilo SpA*		33,310
	284	Indesit Co. SpA		5,029
	322	Italcementi SpA		7,388
	3,654	Milano Assicurazioni SpA		30,423
	7,484	Piaggio & C. SpA		33,538
	4,904	Saras SpA		29,568
	2,026	Societa Iniziative Autostradali e Servizi SpA		32,184
	20,922	Telecom Italia SpA		65,608
	3,500	UniCredito Italiano SpA		29,926
				769,927
		Luxembourg—0.8%
	379	ArcelorMittal		30,377
	1,332	Banco Espirito Santo S.A.		32,221
				62,598
		Netherlands—3.6%
	1,579	Aegon N.V.		32,576
	1,066	ASM International N.V.		30,074
	804	ASML Holding N.V.		27,963
	334	Hunter Douglas N.V.		31,138
	1,741	Koninklijke (Royal) KPN N.V.		32,795
	1,124	Koninklijke BAM Groep N.V.		29,612

Number of Shares			Value
		Common Stocks and Other Equity Interests (Continued)
	577	Koninklijke DSM N.V.	$	32,673
	698	Royal Dutch Shell PLC, Class A		30,522
	335	Smit Internationale N.V.		32,371
	240	Wavin N.V.		4,135
				283,859
		Norway—2.0%
	2,508	Aker Yards A/S		41,286
	684	Norsk Hydro ASA		9,997
	1,443	StatoilHydro ASA		48,606
	1,524	Telenor ASA		35,617
	1,376	TGS Nopec Geophysical Co. ASA*		22,970
				158,476
		Portugal—2.9%
	7,066	Banco Comercial Portugues S.A., Class R		34,144
	5,185	Energias de Portugal S.A.		33,306
	1,898	Galp Energia SGPS S.A., Class B		30,562
	7,866	Portucel-Empresa Produtora de Pasta e Papel S.A.		29,930
	1,766	Semapa - Sociedade de Investimento e Gestao, SGPS S.A.		28,616
	11,328	Sonae SGPS S.A.		33,105
	9,973	Teixeira Duarte - Engenharia Construcoes S.A.		35,494
				225,157
		South Africa—0.0%
	34	Mondi Ltd.		343
		Spain—7.5%
	109	Acciona S.A.		33,589
	568	ACS Actividades de Construccion y Servicios S.A.		35,097
	1,265	Banco Bilbao Vizcaya Argentaria S.A.		31,790
	3,088	Banco de Sabadell S.A.		31,273
	1,766	Banco Pastor S.A.		29,893
	1,734	Banco Popular Espanol S.A.		30,229
	1,550	Banco Santander S.A.		33,637
	272	Cementos Portland Valderrivas S.A.		33,921
	362	Fomento de Construcciones y Contratas S.A.		31,476
	882	Grupo Catalana Occidente S.A.		33,381
	6,203	Iberia Lineas Aereas de Espana S.A.		31,410
	6,789	Mapfre S.A.		31,823
	833	Obrascon Huarte Lain S.A.		37,613
	1,509	Promotora de Informaciones S.A.		29,516
	822	Repsol YPF S.A.		32,407
	1,069	Telefonica S.A.		35,246
	4,000	Tubos Reunidos S.A.		32,060
	513	Union Fenosa S.A.		34,074
				588,435
		Sweden—3.7%
	1,450	Boliden AB		25,530
	1,385	Electrolux AB, Series B		26,726
	1,188	JM AB		26,286
	1,473	Kinnevik Investment AB, Class B		36,471

See Notes to Financial Statements.

58

Schedule of Investments (Continued)

PowerShares Dynamic Europe Portfolio

October 31, 2007

Number of Shares			Value
		Common Stocks and Other Equity Interests (Continued)
	1,180	NCC AB, Class B	$	29,309
	1,860	Nordea Bank AB		33,217
	2,613	Peab AB		23,620
	900	Peab Industri AB, Class B*		7,640
	957	Skandinaviska Enskilda Banken AB, Class A		29,262
	1,395	SKF AB, Class B		27,029
	761	SSAB Svenskt Stal AB, Series A		24,644
				289,734
		Switzerland—6.9%
	494	Adecco S.A.		29,686
	314	Baloise Holding AG		33,349
	125	Banque Cantonale Vaudoise		56,727
	164	Bucher Industries AG		38,911
	52	Forbo Holding AG		31,181
	41	Georg Fischer AG		30,740
	79	Helvetia Holding AG		28,627
	289	Holcim Ltd.		32,913
	419	Julius Baer Holding AG		36,223
	60	Rieter Holding AG		34,761
	235	Swiss Life Holding		64,880
	337	Swiss Re		31,605
	547	UBS AG		29,237
	599	Vontobel Holding AG		30,750
	101	Zurich Financial Services AG		30,390
				539,980
		United Arab Emirates—0.5%
	6,158	Dragon Oil PLC*		39,378
		United Kingdom—22.6%
	4,561	Amlin PLC		30,414
	1,725	Antofagasta PLC		30,011
	1,926	Arriva PLC		33,528
	3,035	BAE Systems PLC		31,398
	27	Barclays PLC		339
	8,099	Beazley Group PLC		29,106
	1,444	Bellway PLC		32,247
	1,079	Berkeley Group Holdings PLC		38,173
	1,701	BG Group PLC		31,431
	480	Bovis Homes Group PLC		6,616
	2,466	BP PLC		32,017
	4,295	Brit Insurance Holdings PLC		28,953
	3,826	British Airways PLC*		35,388
	4,736	BT Group PLC		32,073
	1,715	Burren Energy PLC		43,108
	3,256	Catlin Group Ltd.		33,921
	1,800	Close Brothers Group PLC		28,717
	1,349	Dana Petroleum PLC*		36,150
	2,555	Davis Service Group (The) PLC		28,873
	1,975	De La Rue PLC		33,643
	2,473	Drax Group PLC		34,701
	6,890	DS Smith PLC		33,063

Number of Shares			Value
		Common Stocks and Other Equity Interests (Continued)
	10,769	DSG International PLC	$	28,970
	15,933	FKI PLC		30,699
	8,279	Friends Provident PLC		31,645
	4,107	GKN PLC		31,290
	17	HBOS PLC		308
	5,701	Hiscox Ltd.		33,989
	10,091	HSBC Holdings PLC		199,353
	3,021	Investec PLC		36,462
	966	Kazakhmys PLC		29,579
	1,425	Keller Group PLC		33,569
	5,124	Kesa Electricals PLC		33,796
	828	Kier Group PLC		36,912
	11,215	Legal & General Group PLC		32,640
	35	Lloyds TSB Group PLC		397
	1,185	National Express Group PLC		32,445
	1,478	Northgate PLC		29,629
	9,398	Old Mutual PLC		35,922
	1,642	Provident Financial PLC		30,068
	2,033	Prudential PLC		33,026
	346	Rio Tinto PLC		32,272
	2,801	Rolls-Royce Group PLC		31,304
	113,160	Rolls-Royce Group PLC, Class B*		235
	2,851	Royal Bank of Scotland Group PLC		30,590
	1,334	Speedy Hire PLC		30,178
	6,436	Stagecoach Group PLC		36,165
	916	Standard Chartered PLC		35,507
	990	Stolt-Nielsen S.A.		28,830
	6,490	Tomkins PLC		29,896
	3,342	Tullett Prebon PLC		30,686
	2,129	Venture Production PLC		35,050
	3,810	WH Smith PLC		31,105
	442	Xstrata PLC		31,650
				1,768,037
		United States—0.4%
	456	MTU Aero Engines Holding AG		27,840
		Total Common Stocks and Other Equity Interests (Cost $7,436,986)		7,894,859
		Preferred Stocks—1.4%
		Germany—1.0%
	308	Fuchs Petrolub AG		31,620
	18	Porsche AG		47,943
				79,563
		Italy—0.4%
	9,295	Unipol Gruppo Finanziario SpA		33,215
		Total Preferred Stocks (Cost $90,683)		112,778

See Notes to Financial Statements.

59

Schedule of Investments (Continued)

PowerShares Dynamic Europe Portfolio

October 31, 2007

Number of Shares			Value
		Money Market Fund—0.1%
	8,347	Liquid Assets Portfolio Private Class** (Cost $8,347)	$	8,347
		Total Investments (Cost $7,536,016)—102.4%		8,015,984
		Liabilities in excess of other assets—(2.4%)		(188,477	)
		Net Assets—100.0%	$	7,827,507

ADR American Depositary Receipt.

*  Non-income producing security.

**  Affiliated investment.

See Notes to Financial Statements.

60

Schedule of Investments

PowerShares Global Clean Energy Portfolio

October 31, 2007

Number of Shares			Value
		Common Stocks and Other Equity Interests—99.9%
		Australia—2.7%
	1,298,951	Babcock & Brown Wind Partners	$	2,214,997
	111,378	Energy Developments Ltd.		351,979
				2,566,976
		Austria—1.9%
	27,020	Oesterreichische Elektrizitaetswirtschafts AG, Class A		1,782,950
		Belgium—1.7%
	6,669	Umicore		1,659,522
		Canada—2.2%
	87,230	Ballard Power Systems, Inc.*		446,344
	238,660	Canadian Hydro Developers, Inc.*		1,643,332
				2,089,676
		China—9.8%
	54,763	JA Solar Holdings Co. Ltd. ADR*		3,154,350
	34,590	LDK Solar Co. Ltd. ADR*		1,370,110
	32,547	Suntech Power Holdings Co. Ltd. ADR*		1,916,693
	79,619	Yingli Green Energy Holding Co. Ltd. ADR*		2,972,177
				9,413,330
		Denmark—4.7%
	34,100	Greentech Energy Systems A/S*		658,589
	10,630	Novozymes A/S, Class B		1,155,468
	29,909	Vestas Wind Systems A/S*		2,664,719
				4,478,776
		Finland—1.9%
	42,521	Fortum Oyj		1,841,213
		France—5.2%
	30,826	EDF Energies Nouvelles S.A.		2,469,366
	10,700	Saft Groupe S.A.		526,792
	70,441	Theolia S.A.*		2,037,192
				5,033,350
		Germany—17.6%
	12,365	CENTROTEC Sustainable AG*		226,833
	15,239	Conergy AG		726,009
	93,079	CropEnergies AG*		713,709
	3,817	Envitec Biogas AG*		140,376
	13,516	Ersol Solar Energy AG*		1,726,643
	50,639	Nordex AG*		2,592,010
	13,775	Q-Cells AG*		1,754,549
	12,697	REpower Systems AG*		2,492,727
	627	Roth & Rau AG*		214,895
	8,269	Schmack Biogas AG*		336,405
	20,744	SGL Carbon AG*		1,216,362
	6,695	Solar Millenium AG*		475,001
	25,950	Solarworld AG		1,783,301
	8,134	Solon AG Fuer Solartechnik*		1,023,805
	13,845	Techem AG		1,202,016
	50,196	Verbio AG*		243,281
				16,867,922

Number of Shares			Value
		Common Stocks and Other Equity Interests (Continued)
		Ireland—0.9%
	37,032	Kingspan Group PLC	$	870,611
		Italy—0.3%
	31,287	Actelios SpA		330,431
		Japan—9.3%
	40,500	Aisin Seiki Co. Ltd.		1,651,125
	144,000	Chugai Ro Co. Ltd.		562,085
	321,000	Ebara Corp.		1,503,578
	197,000	GS Yuasa Corp.		432,329
	323	Japan Wind Development Co. Ltd.		711,645
	143,000	Marubeni Corp.		1,213,115
	375,000	Meidensha Corp.		1,086,438
	290,000	Sanyo Electric Co. Ltd.		477,946
	62,000	Sharp Corp.		970,725
	62,000	Takuma Co. Ltd.		318,914
				8,927,900
		New Zealand—1.5%
	203,718	Contact Energy Ltd.		1,419,608
		Norway—1.6%
	30,909	Renewable Energy Corp. A/S*		1,567,995
		Philippines—2.1%
	11,341,000	PNOC Energy Development Corp.		1,973,251
		Spain—9.4%
	31,327	Abengoa S.A.		1,280,357
	7,531	Acciona S.A.		2,320,737
	54,853	Gamesa Corporacion Tecnologica S.A.		2,777,552
	130,166	Iberdrola S.A.		2,092,210
	19,005	Solaria Energia y Medio Ambiente S.A.*		549,910
				9,020,766
		Switzerland—0.8%
	3,869	BKW FMB Energie AG		464,994
	365	Gurit Holding AG		348,294
				813,288
		United Kingdom—2.4%
	16	Johnson Matthey PLC		593
	71,846	Scottish & Southern Energy PLC		2,322,317
				2,322,910
		United States—23.9%
	51,504	American Superconductor Corp.*		1,398,334
	27,313	Aventine Renewable Energy Holdings, Inc.*		286,513
	39,282	Baldor Electric Co.		1,583,850
	446,837	Capstone Turbine Corp.*		509,394
	9,258	Comverge, Inc.*		325,882
	35,249	Cree, Inc.*		986,972
	21,528	Echelon Corp.*		474,692
	43,945	Energy Conversion Devices, Inc.*		1,199,259

See Notes to Financial Statements.

61

Schedule of Investments (Continued)

PowerShares Global Clean Energy Portfolio

October 31, 2007

Number of Shares			Value
		Common Stocks and Other Equity Interests (Continued)
	4,516	EnerNOC, Inc.*	$	210,446
	141,106	Evergreen Solar, Inc.*		1,631,185
	11,896	First Solar, Inc.*		1,889,204
	49,995	FuelCell Energy, Inc.*		502,950
	11,751	Itron, Inc.*		1,263,115
	10,236	Maxwell Technologies, Inc.*		102,565
	35,887	Medis Technologies Ltd.*		501,700
	15,932	MEMC Electronic Materials, Inc.*		1,166,541
	37,038	Ormat Technologies, Inc.		1,997,459
	145,741	Plug Power, Inc.*		508,636
	77,515	Power-One, Inc.*		439,510
	34,036	Puget Energy, Inc.		961,517
	17,389	SunPower Corp., Class A*		2,199,013
	12,285	Ultralife Batteries, Inc.*		164,865
	99,436	VeraSun Energy Corp.*		1,348,352
	25,551	Verenium Corp.*		135,931
	25,902	Zoltek Cos., Inc.*		1,146,164
				22,934,049
		Total Common Stocks and Other Equity Interests (Cost $84,828,951)		95,914,524
		Money Market Fund—0.1%
	82,423	Liquid Assets Portfolio Private Class** (Cost $82,423)		82,423
		Total Investments—100.0% (Cost $84,911,374)		95,996,947
		Liabilities in excess of other assets—(0.0%)		(33,910	)
		Net Assets—100.0%	$	95,963,037

ADR American Depositary Receipt.

*  Non-income producing security.

**  Affiliated investment.

See Notes to Financial Statements.

62

Schedule of Investments

PowerShares Global Water Portfolio

October 31, 2007

Number of Shares			Value
		Common Stocks and Other Equity Interests—99.0%
		Austria—5.5%
	133,252	Andritz AG	$	9,787,565
	4,665	BWT AG		336,915
	148,032	Christ Water Technology AG*		3,103,257
				13,227,737
		Canada—4.3%
	420,942	GLV, Inc., Class A*		5,761,472
	114,862	Stantec, Inc.*		4,473,305
				10,234,777
		China—3.3%
	14,414,000	Bio-Treat Technology Ltd.		7,909,667
		Finland—5.3%
	361,742	Kemira Oyj		8,556,782
	160,766	Uponor Oyj		4,195,894
				12,752,676
		France—5.3%
	45,790	Suez S.A.		2,974,478
	109,858	Veolia Environnement		9,798,475
				12,772,953
		Germany—9.7%
	9,025	KSB AG		9,009,149
	18,934	Siemens AG		2,585,331
	135,639	Techem AG		11,776,113
				23,370,593
		Hong Kong—1.3%
	4,545,909	Guangdong Investment Ltd.		3,090,899
		Italy—9.1%
	166,844	ACEA SpA		3,302,102
	2,059,371	Hera SpA		9,243,578
	1,183,501	Impregilo SpA*		9,485,760
				22,031,440
		Japan—11.3%
	1,319,000	Ebara Corp.		6,178,254
	282,800	Kurita Water Industries Ltd.		9,370,655
	502,000	ORGANO Corp.		8,312,599
	348,000	Shimadzu Corp.		3,462,341
				27,323,849
		Netherlands—4.2%
	123,695	Arcadis N.V.		10,044,792
		Singapore—4.8%
	4,571,000	Hyflux Ltd.		11,484,687

Number of Shares			Value
		Common Stocks and Other Equity Interests (Continued)
		Spain—2.4%
	31,573	Fomento de Construcciones y Contratas S.A.	$	2,745,264
	75,627	Sociedad General de Aguas de Barcelona S.A., Class A		3,016,528
				5,761,792
		Switzerland—2.4%
	43,818	Geberit AG		5,901,376
		United Kingdom—5.4%
	817,596	Halma PLC		3,838,455
	162,924	Kelda Group PLC		3,210,197
	101,251	Severn Trent PLC		3,049,837
	194,651	United Utilities PLC		2,949,791
				13,048,280
		United States—24.7%
	98,931	Agilent Technologies, Inc.*		3,645,607
	109,489	Aqua America, Inc.		2,546,714
	44,176	Danaher Corp.		3,784,558
	181,579	General Electric Co.		7,473,791
	41,643	Itron, Inc.*		4,476,206
	88,469	ITT Corp.		5,920,345
	299,166	Nalco Holding Co.		7,437,267
	181,771	Pentair, Inc.		6,432,876
	387,505	Tetra Tech, Inc.*		9,048,242
	92,797	Valmont Industries, Inc.		8,882,529
				59,648,135
		Total Common Stocks and Other Equity Interests (Cost $226,899,781)		238,603,653
		Money Market Fund—0.9%
	2,232,983	Liquid Assets Portfolio Private Class** (Cost $2,232,983)		2,232,983
		Total Investments—99.9% (Cost $229,132,764)		240,836,636
		Other assets less liabilities—0.1%		257,059
		Net Assets—100.0%	$	241,093,695

*  Non-income producing security.

**  Affiliated investment.

See Notes to Financial Statements.

63

Schedule of Investments

PowerShares International Listed Private Equity Portfolio

October 31, 2007

Number of Shares			Value
		Common Stocks and Other Equity Interests—99.5%
		Australia—18.4%
	126,532	Babcock & Brown Infrastructure Group	$	191,726
	68,802	Macquarie Airports		279,279
	21,090	Macquarie Capital Alliance Group		72,317
	27,070	Macquarie Communications Infrastructure Group		144,000
	86,920	Macquarie Infrastructure Group		254,548
	15,102	Macquarie Media Group Ltd.		63,961
				1,005,831
		Belgium—4.7%
	1,948	Gimv N.V.		134,939
	7,042	RHJ International*		123,479
				258,418
		Canada—6.3%
	8,200	Onex Corp.		343,091
		Finland—0.8%
	8,656	CapMan Oyj, Class B		43,831
		France—19.4%
	3,474	Eurazeo		517,125
	3,162	Wendel		542,322
				1,059,447
		Germany—3.3%
	1,978	Adcapital AG		33,939
	1,892	Arques Industries AG		81,379
	1,918	Deutsche Beteiligungs AG		66,791
				182,109
		Japan—13.7%
	10,400	Jafco Co. Ltd.		424,895
	22,000	Japan Asia Investment Co. Ltd.		142,169
	104	NIF SMBC Ventures Co. Ltd.		181,325
				748,389
		South Africa—1.2%
	14,644	Brait S.A.		64,045
		Spain—0.8%
	1,202	Dinamia		41,736
		Switzerland—0.8%
	228	Growth Value Opportunities S.A.		45,539
		United Kingdom—24.1%
	22,096	3iGroup PLC		498,026
	1,912	Candover Investments PLC		83,807
	3,238	Electra Private Equity PLC		116,435
	8,720	Graphite Enterprise Trust PLC		82,874
	2,776	HgCapital Trust PLC		47,864
	5,986	Intermediate Capital Group PLC		205,924

Number of Shares			Value
		Common Stocks and Other Equity Interests (Continued)
	26,366	IP Group PLC*	$	73,941
	11,478	SVG Capital PLC		206,844
				1,315,715
		United States—6.0%
	3,214	Dunedin Enterprise Investment Trust PLC		32,031
	13,720	JZ Equity Partners PLC		41,042
	13,048	KKR Private Equity Investors LP		255,741
				328,814
		Total Investments (Cost $4,994,494)—99.5%		5,436,965
		Other assets less liabilities—0.5%		27,766
		Net Assets—100.0%	$	5,464,731

*  Non-income producing security.

See Notes to Financial Statements.

64

Schedule of Investments

PowerShares FTSE RAFI Asia-Pacific ex-Japan Portfolio

October 31, 2007

Number of Shares			Value
		Common Stocks and Other Equity Interests—101.9%
		Australia—41.2%
	5,781	Alumina Ltd.	$	35,735
	10,269	Amcor Ltd.		66,808
	9,743	AMP Ltd.		92,009
	10,933	Australia and New Zealand Banking Group Ltd.		304,978
	7,266	AWB Ltd.		20,067
	10,634	BHP Billiton Ltd.		454,317
	6,726	BlueScope Steel Ltd.		66,073
	4,825	Boral Ltd.		30,273
	6,354	Brambles Ltd.*		83,559
	12,381	CFS Retail Property Trust		27,997
	4,544	Coca-Cola Amatil Ltd.		42,954
	8,425	Coles Group Ltd.		125,863
	7,941	Commonwealth Bank of Australia		452,597
	14,553	Commonwealth Property Office Fund		21,309
	879	CSL Ltd.		29,734
	11,994	DB RREEF Trust		23,231
	8,660	Fairfax Media Ltd.		38,042
	11,986	Foster's Group Ltd.		70,758
	14,616	GPT Group		62,580
	10,842	Insurance Australia Group Ltd.		47,225
	2,328	James Hardie Industries N.V. CDI		13,959
	2,969	Lend Lease Corp. Ltd.		55,168
	4,207	Lion Nathan Ltd.		36,181
	11,506	Macquarie Airports		46,705
	738	Macquarie Bank Ltd.		57,485
	21,087	Macquarie Infrastructure Group		61,754
	4,290	Metcash Ltd.		18,567
	6,379	Mirvac Group		34,170
	5,462	Multiplex Group		25,461
	11,911	National Australia Bank Ltd.		475,759
	8,202	OneSteel Ltd.		52,296
	1,556	Orica Ltd.		44,573
	3,685	Origin Energy Ltd.		31,248
	8,435	PaperlinX Ltd.		21,575
	3,060	Publishing & Broadcasting Ltd.		59,042
	19,879	Qantas Airways Ltd.		108,879
	2,227	QBE Insurance Group Ltd.		67,076
	5,870	Santos Ltd.		76,323
	2,767	St. George Bank Ltd.		93,213
	7,955	Stockland		65,982
	4,867	Suncorp-Metway Ltd.		91,473
	7,438	Symbion Health Ltd.		27,848
	3,391	TABCORP Holdings Ltd.		48,899
	147,159	Telstra Corp. Ltd.		638,256
	3,713	Transurban Group		25,016
	2,259	Wesfarmers Ltd.		91,990
	9,929	Westfield Group		200,597
	10,585	Westpac Banking Corp.		299,587
	2,427	Woodside Petroleum Ltd.		116,960
	4,101	Woolworths Ltd.		127,130
				5,209,281

Number of Shares			Value
		Common Stocks and Other Equity Interests (Continued)
		China—21.2%
	58,094	BOC Hong Kong Ltd.	$	163,021
	5,083	China Merchants Holdings International Co. Ltd.		35,479
	55,833	China Mobile Ltd.		1,130,952
	55,928	China Netcom Group Corp. (Hong Kong) Ltd.		170,292
	16,182	China Overseas Land & Investment Ltd.		38,206
	13,328	China Resources Enterprise Ltd.		57,777
	100,416	China Unicom Ltd.		241,233
	23,074	Citic Pacific Ltd.		144,383
	231,878	CNOOC Ltd.		483,453
	9,390	Cosco Pacific Ltd.		29,015
	922	Dah Chong Hong Holdings Ltd.*		564
	53,040	Lenovo Group Ltd.		59,741
	237,059	Semiconductor Manufacturing International Corp.*		26,915
	11,997	Shanghai Industrial Holdings Ltd.		70,272
	15,404	Tingyi Cayman Islands Holding Corp.		23,451
				2,674,754
		France—0.4%
	7,265	AXA Asia Pacific Holdings Ltd.		54,940
		Germany—0.5%
	1,129	Leighton Holdings Ltd.		65,080
		Hong Kong—23.2%
	6,596	Bank of East Asia Ltd.		44,423
	29,612	Cathay Pacific Airways Ltd.		87,681
	13,034	Cheung Kong Infrastructure Holdings Ltd.		50,785
	12,878	Cheung Kong (Holdings) Ltd.		250,389
	13,789	Chinese Estates Holdings Ltd.		27,717
	19,454	CLP Holdings Ltd.		130,767
	7,638	Dah Sing Banking Group Ltd.		17,600
	1,730	Dah Sing Financial Group		16,417
	2,509	Esprit Holdings Ltd.		41,435
	5,149	Great Eagle Holdings Ltd.		21,258
	33,598	Guangdong Investment Ltd.		22,844
	8,857	Hang Lung Group Ltd.		51,880
	18,492	Hang Lung Properties Ltd.		87,917
	13,812	Henderson Investment Ltd.		27,479
	12,921	Henderson Land Development Co. Ltd.		115,027
	26,607	Hong Kong and China Gas Co. Ltd.		71,231
	2,215	Hong Kong Exchanges & Clearing Ltd.		73,216
	20,996	Hongkong Electric Holdings Ltd.		107,543
	13,000	Hongkong Land Holdings Ltd.		64,740
	4,103	Hopewell Holdings Ltd.		21,122
	15,520	Hutchison Telecommunications International Ltd.		22,026
	36,344	Hutchison Whampoa Ltd.		452,963
	7,928	Hysan Development Co. Ltd.		23,833
	22,789	Johnson Electric Holdings Ltd.		12,731

See Notes to Financial Statements.

65

Schedule of Investments (Continued)

PowerShares FTSE RAFI Asia-Pacific ex-Japan Portfolio

October 31, 2007

Number of Shares			Value
		Common Stocks and Other Equity Interests (Continued)
	5,083	Kerry Properties Ltd.	$	43,644
	12,189	Li & Fung Ltd.		57,243
	24,955	MTR Corp. Ltd.		85,965
	22,565	New World Development Co. Ltd.		80,498
	29,000	Noble Group Ltd.		47,241
	4,636	Orient Overseas International Ltd.		47,492
	8,044	Shangri-La Asia Ltd.		25,531
	10,403	Sino Land Co. Ltd.		32,280
	15,136	Sun Hung Kai Properties Ltd.		286,676
	9,252	Swire Pacific Ltd., Class A		131,186
	23,088	Wharf Holdings (The) Ltd.		137,918
	24,246	Wheelock and Co. Ltd.		78,205
	1,439	Wing Hang Bank Ltd.		16,839
	1,507	Wing Lung Bank Ltd.		15,574
				2,929,316
		Malaysia—0.3%
	2,403	Guoco Group Ltd.		36,894
		New Zealand—1.1%
	11,943	Air New Zealand Ltd.		19,474
	4,105	Contact Energy Ltd.		28,606
	2,791	Fletcher Building Ltd.		25,460
	11,181	Goodman Fielder Ltd.		21,760
	15,401	Telecom Corp. of New Zealand Ltd.		51,410
				146,710
		Norway—0.2%
	17,600	Total Access Communication Public Co. Ltd.*		21,120
		Singapore—9.4%
	7,000	Capitaland Ltd.		38,896
	16,000	Chartered Semiconductor Manufacturing Ltd.*		12,590
	4,000	City Developments Ltd.		43,624
	15,000	ComfortDelgro Corp. Ltd.		19,983
	8,000	DBS Group Holdings Ltd.		123,693
	9,000	Fraser and Neave Ltd.		37,274
	6,000	Keppel Corp. Ltd.		60,880
	27,000	Neptune Orient Lines Ltd.		95,047
	14,000	Oversea-Chinese Banking Corp. Ltd.		88,904
	50,983	PCCW Ltd.		32,757
	8,000	SembCorp. Industries Ltd.		32,580
	9,000	Singapore Airlines Ltd.		121,760
	12,000	Singapore Press Holdings Ltd.		37,936
	17,000	Singapore Technologies Engineering Ltd.		44,590
	84,000	Singapore Telecommunications Ltd.		236,563
	17,000	SMRT Corp. Ltd.		20,652
	8,000	United Overseas Bank Ltd.		118,723
	5,000	UOL Group Ltd.		18,119
				1,184,571

Number of Shares			Value
		Common Stocks and Other Equity Interests (Continued)
		Taiwan, Province of China—0.4%
	7,785	Foxconn International Holdings Ltd.*	$	21,494
	10,685	Yue Yuen Industrial (Holdings) Ltd.		32,741
				54,235
		United Kingdom—3.7%
	16,127	Hang Seng Bank Ltd.		327,083
	1,341	Rio Tinto Ltd.		136,705
				463,788
		United States—0.3%
	1,818	Caltex Australia Ltd.		36,022
		Total Common Stocks and Other Equity Interests (Cost $10,281,559)		12,876,711
		Warrants—0.0%
		China—0.0%
	1,267	China Overseas Land & Investment Ltd., expiring 08/27/2008* (Cost $0)		1,054
		Total Investments (Cost $10,281,559)—101.9%		12,877,765
		Liabilities in excess of other assets—(1.9%)		(245,171	)
		Net Assets—100.0%	$	12,632,594

*  Non-income producing security.

See Notes to Financial Statements.

66

Schedule of Investments

PowerShares FTSE RAFI Asia Pacific ex-Japan Small-Mid Portfolio

October 31, 2007

Number of Shares			Value
		Common Stocks and Other Equity Interests—98.8%
		Australia—30.8%
	5,169	ABB Grain Ltd.	$	36,071
	3,775	Adelaide Bank Ltd.		51,323
	16,257	Adelaide Brighton Ltd.		55,444
	6,380	Ansell Ltd.		73,140
	18,226	APN News & Media Ltd.		90,535
	3,996	Aristocrat Leisure Ltd.		38,514
	1,372	ASX Ltd.		72,921
	20,938	Austereo Group Ltd.		50,063
	32,785	Australian Pharmaceutical Industries Ltd.*		60,767
	42,459	AWB Ltd.		117,260
	47,512	Babcock & Brown Infrastructure Group		71,992
	3,031	Bank of Queensland Ltd.		53,876
	3,904	Bendigo Bank Ltd.		50,544
	3,661	Billabong International Ltd.		50,994
	14,600	Centennial Coal Co. Ltd.		57,911
	11,265	Centro Properties Group		73,079
	15,714	Challenger Financial Services Group Ltd.		92,038
	83,828	Commonwealth Property Office Fund		122,746
	5,744	Computershare Ltd.		45,514
	4,359	Crane Group Ltd.		67,867
	4,995	CSL Ltd.		168,962
	13,934	David Jones Ltd.		63,792
	67,280	DB RREEF Trust		130,315
	12,125	Downer EDI Ltd.		74,500
	56,987	Envestra Ltd.		58,622
	4,327	Flight Centre Ltd.		97,484
	52,649	Futuris Corp. Ltd.		103,440
	15,071	Goodman Group		96,373
	22,273	Gunns Ltd.		77,612
	14,527	GWA International Ltd.		48,601
	16,599	Harvey Norman Holdings Ltd.		104,298
	14,265	Iluka Resources Ltd.		57,772
	36,549	ING Industrial Fund		94,841
	59,615	ING Office Fund		99,447
	13,280	James Hardie Industries N.V. CDI		79,628
	33,095	Kiwi Income Property Trust		37,164
	10,596	Macquarie Communications Infrastructure Group		56,366
	39,390	Macquarie CountryWide Trust		73,374
	30,365	Macquarie DDR Trust		33,065
	65,770	Macquarie Office Trust		99,962
	24,621	Metcash Ltd.		106,558
	31,467	Multiplex Group		146,685
	3,320	Newcrest Mining Ltd.		99,689
	6,430	Nufarm Ltd.		92,960
	45,804	OneSteel Ltd.		292,047
	21,557	Pacific Brands Ltd.		69,124
	5,939	Pacifica Group Ltd.		10,733
	986	Perpetual Ltd.		67,857
	3,631	Ramsay Health Care Ltd.		35,737
	36,287	Ridley Corp. Ltd.		38,337

Number of Shares			Value
		Common Stocks and Other Equity Interests (Continued)
	8,856	Seven Network Ltd.	$	112,112
	19,955	Sigma Pharmaceuticals Ltd.		28,110
	4,029	Sims Group Ltd.		105,109
	6,921	Sonic Healthcare Ltd.		110,450
	17,468	Spotless Group Ltd.		72,362
	9,356	Tattersall's Ltd.		36,330
	30,186	Ten Network Holdings Ltd.		76,931
	48,275	Thakral Holdings Group		50,555
	5,473	Toll Holdings Ltd.		67,510
	3,210	Transfield Services Ltd.		46,646
	21,582	Transurban Group		145,408
	3,041	United Group Ltd.		60,029
	27,860	Village Roadshow Ltd.		77,974
	4,307	West Australian Newspapers Holdings Ltd.		55,522
	4,301	Zinifex Ltd.		66,366
				5,059,358
		China—20.7%
	41,906	Agile Property Holdings Ltd.		100,348
	214,071	Brilliance China Automotive Holdings Ltd.*		57,172
	121,848	China Foods Ltd.		92,438
	12,271	China Mengniu Dairy Co. Ltd.		51,533
	30,375	China Merchants Holdings International Co. Ltd.		212,015
	92,921	China Overseas Land & Investment Ltd.		219,391
	101,394	China Power International Development Ltd.		53,766
	39,102	China Resources Land Ltd.		97,972
	46,431	China Resources Power Holdings Co.		171,627
	171,011	China Travel International Inv HK		135,691
	122,854	CITIC International Financial Holdings Ltd.		104,772
	170,914	Denway Motors Ltd.		119,076
	97,805	Digital China Holdings Ltd.		64,103
	281,985	Guangzhou Investment Co. Ltd.		118,603
	13,905	Hengan International Group Co. Ltd.		53,910
	17,595	Hopson Development Holdings Ltd.		67,649
	29,952	Industrial and Commercial Bank of China (Asia) Ltd.		82,891
	18,723	Kowloon Development Co. Ltd.		57,975
	305,527	Lenovo Group Ltd.		344,126
	61,000	People's Food Holdings Ltd.		55,158
	65,509	Samson Holding Ltd.		19,862
	68,844	Shanghai Industrial Holdings Ltd.		403,250
	73,834	Shenzhen Investment Ltd.		70,492
	121,934	Sinofert Holdings Ltd.		113,898
	97,373	Sinopec Kantons Holdings Ltd.		28,015
	1,192,421	TCL Communication Technology Holdings Ltd.*		45,384
	1,452,884	TCL Multimedia Technology Holdings Ltd.*		101,223
	45,965	Tianjin Development Holdings Ltd.		76,857
	91,559	Tingyi (Cayman Islands) Holding Corp.		139,391
	152,672	TPV Technology Ltd.		102,230
	225,000	United Food Holdings Ltd.		31,061
				3,391,879

See Notes to Financial Statements.

67

Schedule of Investments (Continued)

PowerShares FTSE RAFI Asia Pacific ex-Japan Small-Mid Portfolio

October 31, 2007

Number of Shares			Value
		Common Stocks and Other Equity Interests (Continued)
		Hong Kong—22.8%
	12,359	Allied Group Ltd.	$	65,217
	30,513	Beijing Enterprises Holdings Ltd.		187,783
	16,823	Cafe de Coral Holdings Ltd.		33,903
	126,663	Champion REIT		76,807
	59,308	Chaoda Modern Agriculture (Holdings) Ltd.		53,640
	141,557	China Oriental Group Co. Ltd.		101,363
	78,343	Chinese Estates Holdings Ltd.		157,478
	19,571	Chong Hing Bank Ltd.		45,703
	44,532	Dah Sing Banking Group Ltd.		102,614
	10,536	Dah Sing Financial Group		99,980
	15,000	Elec & Eltek International Co. Ltd.		29,100
	120,478	First Pacific Co. Ltd.		91,088
	112,679	Fountain SET Hldgs		33,437
	49,634	Galaxy Entertainment Group Ltd.*		53,919
	100,650	Giordano International Ltd.		46,749
	147,225	Global Bio-Chem Technology Group Co. Ltd.		54,135
	29,843	Great Eagle Holdings Ltd.		123,210
	203,624	Guangdong Investment Ltd.		138,450
	68,207	HKR International Ltd.		69,608
	3,078	Hong Kong Aircraft Engineering Co. Ltd.		77,875
	45,802	Hongkong and Shanghai Hotels (The) Ltd.		84,385
	311,187	Hongkong Chinese Ltd.		72,268
	73,448	Hopewell Highway Infrastructure Ltd.		68,987
	25,582	Hopewell Holdings Ltd.		131,692
	149,479	I-CABLE Communications Ltd.		32,593
	9,000	Jardine Cycle & Carriage Ltd.		130,457
	133,815	Johnson Electric Holdings Ltd.		74,756
	17,082	Kingboard Chemical Holdings Ltd.		111,297
	19,000	Mandarin Oriental International Ltd.		47,310
	140,871	New World China Land Ltd.		164,120
	235,985	Oriental Press Group		33,796
	62,305	Pacific Basin Shipping Ltd.		137,620
	20,762	Road King Infrastructure		41,734
	102,834	SCMP Group Ltd.		33,169
	43,776	Shangri-La Asia Ltd.		138,938
	18,026	Shui On Construction and Materials Ltd.		69,538
	35,414	Shun Tak Holdings Ltd.		55,377
	158,038	Sinolink Worldwide Holdings		53,014
	83,393	SmarTone Telecommunications Holding Ltd.		101,783
	152,278	Solomon Systech International Ltd.		13,753
	58,143	Techtronic Industries Co.		62,338
	11,568	Television Broadcasts Ltd.		74,475
	74,716	Texwinca Holdings Ltd.		65,551
	4,984	VTech Holdings Ltd.		42,183
	21,000	Wheelock Properties (S) Ltd.		35,513
	8,405	Wing Hang Bank Ltd.		98,355
	8,767	Wing Lung Bank Ltd.		90,602
	21,200	Wing On Co. International Ltd.		37,035
				3,744,698

Number of Shares			Value
		Common Stocks and Other Equity Interests (Continued)
		Japan—0.3%
	18,000	Cerebos Pacific Ltd.	$	52,680
		Korea, Republic of—1.6%
	104,000	STX Pan Ocean Co. Ltd.		264,172
		Malaysia—0.7%
	9,000	Guocoland Ltd.		36,031
	33,000	GuocoLeisure Ltd.		31,434
	82,584	Public Financial Holdings Ltd.		53,807
				121,272
		Netherlands—0.6%
	12,685	ASM Pacific Technology Ltd.		98,851
		New Zealand—4.0%
	64,897	Air New Zealand Ltd.		105,821
	32,527	Auckland International Airport Ltd.		71,802
	17,747	Fisher & Paykel Appliances Holdings Ltd.		47,912
	12,829	Fisher & Paykel Healthcare Corp.		32,069
	15,730	Fletcher Building Ltd.		143,491
	19,082	Sky City Entertainment Group Ltd.		78,815
	7,981	Sky Network Television Ltd.		35,358
	19,749	Tower Ltd.*		34,177
	29,315	Vector Ltd.		53,889
	11,172	Warehouse Group Ltd.		48,550
				651,884
		Norway—0.8%
	102,400	Total Access Communication Public Co. Ltd.*		122,881
		Singapore—15.0%
	43,000	Allgreen Properties Ltd.		46,896
	26,000	Ascendas REIT		46,481
	33,000	Ascott Group (The) Ltd.		37,356
	44,748	Australand Property Group		98,699
	21,000	CapitaCommercial Trust		38,992
	30,000	CapitaMall Trust		75,789
	93,000	Chartered Semiconductor Manufacturing Ltd.*		73,180
	87,000	ComfortDelgro Corp. Ltd.		115,900
	8,600	Creative Technology Ltd.		35,914
	39,000	Fortune REIT		29,436
	8,000	Haw Par Corp. Ltd.		43,624
	27,000	Hong Leong Asia Ltd.		70,820
	15,000	Hotel Properties Ltd.		44,935
	9,000	Keppel Land Ltd.		51,562
	39,000	MobileOne Ltd.		56,531
	34,000	Olam International Ltd.		82,140
	106,123	Pacific Century Premium Developments Ltd.		36,147
	322,000	Pacific Century Regional Developments Ltd.*		81,125
	16,000	Parkway Holdings Ltd.		45,943
	42,000	SembCorp Marine Ltd.		128,718
	21,000	SIA Engineering Co. Ltd.		68,708
	52,000	Singapore Airport Terminal Services Ltd.		107,679

See Notes to Financial Statements.

68

Schedule of Investments (Continued)

PowerShares FTSE RAFI Asia Pacific ex-Japan Small-Mid Portfolio

October 31, 2007

Number of Shares			Value
		Common Stocks and Other Equity Interests (Continued)
	16,000	Singapore Exchange Ltd.	$	172,286
	11,000	Singapore Land Ltd.		73,650
	27,000	Singapore Petroleum Co. Ltd.		152,821
	103,000	Singapore Post Ltd.		86,737
	96,000	SMRT Corp. Ltd.		116,625
	27,249	SP AusNet		32,829
	30,000	StarHub Ltd.		64,607
	21,000	STATS ChipPAC Ltd.*		23,772
	33,000	Suntec REIT		41,229
	27,000	United Industrial Corp. Ltd.		57,774
	28,000	UOB-Kay Hian Holdings Ltd.		46,771
	27,000	UOL Group Ltd.		97,843
	9,000	Venture Corp. Ltd.		86,350
				2,469,869
		Taiwan, Province of China—1.3%
	46,537	Foxconn International Holdings Ltd.*		128,489
	65,332	Fubon Bank Hong Kong Ltd.		47,624
	26,000	Kim Eng Holdings Ltd.		41,277
				217,390
		United Kingdom—0.2%
	1,599	Energy Resources of Australia Ltd.		32,068
		Total Common Stocks and Other Equity Interests (Cost $15,381,461)		16,227,002
		Warrants—0.0%
		China—0.0%
	4,461	Industrial and Commercial Bank of China (Asia) Ltd., Expiring 11/06/2008* (Cost $0)		835
		Money Market Fund—0.2%
	24,230	Liquid Assets Portfolio Private Class** (Cost $24,230)		24,230
		Total Investments (Cost $15,405,691)—99.0%		16,252,067
		Other assets less liabilities—1.0%		165,313
		Net Assets—100.0%	$	16,417,380

REIT Real Estate Investment Trust.

*  Non-income producing security.

**  Affiliated investment.

See Notes to Financial Statements.

69

Schedule of Investments

PowerShares FTSE RAFI Developed Markets ex-U.S. Portfolio

October 31, 2007

Number of Shares			Value
		Common Stocks and Other Equity Interests—99.7%
		Australia—3.9%
	1,306	Alumina Ltd.	$	8,073
	2,285	Amcor Ltd.		14,866
	2,174	AMP Ltd.		20,530
	2,471	Australia and New Zealand Banking Group Ltd.		68,929
	1,642	AWB Ltd.		4,535
	2,406	BHP Billiton Ltd.		102,792
	1,622	BHP Billiton PLC		61,695
	1,496	BlueScope Steel Ltd.		14,696
	1,063	Boral Ltd.		6,669
	1,442	Brambles Ltd.		18,963
	2,782	CFS Retail Property Trust		6,291
	1,027	Coca-Cola Amatil Ltd.		9,708
	1,906	Coles Group Ltd.		28,474
	1,758	Commonwealth Bank of Australia		100,197
	3,292	Commonwealth Property Office Fund		4,820
	198	CSL Ltd.		6,698
	2,710	DB RREEF Trust		5,249
	1,928	Fairfax Media Ltd.		8,469
	2,671	Foster's Group Ltd.		15,768
	3,258	GPT Group		13,949
	2,420	Insurance Australia Group Ltd.		10,541
	526	James Hardie Industries N.V. CDI		3,154
	670	Lend Lease Corp. Ltd.		12,449
	952	Lion Nathan Ltd.		8,187
	2,600	Macquarie Airports		10,554
	166	Macquarie Bank Ltd.		12,930
	4,774	Macquarie Infrastructure Group		13,981
	967	Metcash Ltd.		4,185
	1,432	Mirvac Group		7,671
	1,234	Multiplex Group		5,752
	2,698	National Australia Bank Ltd.		107,766
	1,835	OneSteel Ltd.		11,700
	352	Orica Ltd.		10,083
	829	Origin Energy Ltd.		7,030
	1,892	PaperlinX Ltd.		4,839
	690	Publishing & Broadcasting Ltd.		13,314
	4,490	Qantas Airways Ltd.		24,592
	502	QBE Insurance Group Ltd.		15,120
	1,317	Santos Ltd.		17,124
	628	St. George Bank Ltd.		21,156
	1,792	Stockland		14,864
	1,080	Suncorp-Metway Ltd.		20,298
	1,682	Symbion Health Ltd.		6,298
	749	TABCORP Holdings Ltd.		10,801
	32,439	Telstra Corp. Ltd.		140,694
	840	Transurban Group		5,659
	510	Wesfarmers Ltd.		20,768
	2,244	Westfield Group		45,336
	2,390	Westpac Banking Corp.		67,644
	552	Woodside Petroleum Ltd.		26,601
	918	Woolworths Ltd.		28,458
				1,230,920

Number of Shares			Value
		Common Stocks and Other Equity Interests (Continued)
		Austria—0.4%
	226	Erste Bank der oesterreichischen Sparkassen AG	$	18,310
	49	EVN AG		6,543
	189	Oesterreichische Elektrizitaetswirtschafts - AG, Class A		12,471
	427	OMV AG		31,883
	55	Raiffeisen International Bank-Holding AG		9,079
	527	Telekom Austria AG		15,096
	149	voestalpine AG		13,380
	83	Wiener Staedtische Versicherung AG		6,112
	111	Wienerberger AG		6,905
				119,779
		Belgium—1.7%
	349	Agfa Gevaert N.V.		4,842
	739	Belgacom S.A.		35,271
	28	Colruyt S.A.		5,981
	207	Compagnie Nationale a Portefeuille		14,794
	327	Delhaize Group		30,973
	2,117	Dexia S.A.		67,810
	2,903	Fortis, Class A		92,692
	2,903	Fortis, Class B		92,650
	1,484	Fortis-Strip VVPR*		21
	205	Groupe Bruxelles Lambert S.A.		26,147
	567	InBev N.V.		53,451
	66	KBC Ancora		7,437
	453	KBC GROEP N.V.		63,375
	157	Solvay S.A.		23,829
	167	UCB S.A.		9,790
	41	Umicore		10,202
				539,265
		Canada—5.1%
	215	Agrium, Inc.		13,582
	571	Alcan, Inc.		57,112
	711	Bank of Montreal		47,160
	1,188	Bank of Nova Scotia		66,892
	444	Barrick Gold Corp.		19,634
	1,930	BCE, Inc.		83,820
	262	Biovail Corp.		5,233
	303	Bombardier, Inc., Class A*		1,802
	5,055	Bombardier, Inc., Class B*		29,804
	442	Brookfield Asset Management, Inc., Class A		17,958
	195	Cameco Corp.		9,557
	487	Canadian Imperial Bank of Commerce		52,299
	549	Canadian National Railway Co.		30,629
	474	Canadian Natural Resources Ltd.		39,206
	274	Canadian Pacific Railway Ltd.		19,178
	215	Canadian Tire Corp. Ltd., Class A		19,671
	309	Canadian Utilities Ltd.		17,685
	1,912	Celestica, Inc.*		12,682
	743	CGI Group, Inc., Class A*		8,417
	591	Enbridge, Inc.		25,456

See Notes to Financial Statements.

70

Schedule of Investments (Continued)

PowerShares FTSE RAFI Developed Markets ex-U.S. Portfolio

October 31, 2007

Number of Shares			Value
		Common Stocks and Other Equity Interests (Continued)
	955	EnCana Corp.	$	66,462
	316	Finning International, Inc.		10,813
	492	George Weston Ltd.		35,815
	286	Goldcorp, Inc.		10,006
	1,038	Great-West Lifeco, Inc.		40,764
	858	Husky Energy, Inc.		39,774
	348	IGM Financial, Inc.		20,133
	678	Loblaw Cos. Ltd.		31,259
	435	Magna International, Inc., Class A		41,045
	1,521	Manulife Financial Corp.		70,765
	304	National Bank of Canada		17,492
	458	Nexen, Inc.		15,426
	273	Nortel Networks Corp.*		4,380
	266	NOVA Chemicals Corp.		9,612
	797	Petro-Canada		45,732
	237	Potash Corporation of Saskatchewan, Inc.		29,344
	879	Power Corp. of Canada		37,500
	992	Power Financial Corp.		43,981
	174	Research In Motion Ltd.*		21,571
	382	Rogers Communications, Inc., Class B		19,361
	1,466	Royal Bank of Canada		86,497
	211	Saputo, Inc.		12,874
	364	Shaw Communications, Inc., Class B		10,110
	228	Shoppers Drug Mart Corp.		13,294
	837	Sun Life Financial, Inc.		48,371
	304	Suncor Energy, Inc.		33,111
	1,022	Talisman Energy, Inc.		22,144
	342	Teck Cominco Ltd., Class B		17,035
	225	Telus Corp.		13,609
	197	Telus Corp.		11,406
	912	Thomson Corp. (The)		42,844
	775	Toronto-Dominion Bank (The)		58,219
	477	TransAlta Corp.		17,075
	990	TransCanada Corp.		41,881
				1,617,482
		China—2.1%
	13,435	BOC Hong Kong Ltd.		37,701
	3,033	China Merchants Holdings International Co. Ltd.		21,170
	12,959	China Mobile Ltd.		262,498
	13,016	China Netcom Group Corp. (Hong Kong) Ltd.		39,632
	5,308	China Overseas Land & Investment Ltd.		12,532
	4,733	China Resources Enterprise Ltd.		20,518
	22,493	China Unicom Ltd.		54,036
	5,724	Citic Pacific Ltd.		35,817
	52,331	CNOOC Ltd.		109,107
	3,935	Cosco Pacific Ltd.		12,159
	12,847	Lenovo Group Ltd.		14,470
	53,703	Semiconductor Manufacturing International Corp.*		6,097
	3,481	Shanghai Industrial Holdings Ltd.		20,390
	5,129	Tingyi (Cayman Islands) Holding Corp.		7,809
				653,936

Number of Shares			Value
		Common Stocks and Other Equity Interests (Continued)
		Denmark—0.7%
	5	A P Moller - Maersk A/S, Class A	$	68,228
	5	A P Moller - Maersk A/S, Class B		68,908
	91	Carlsberg A/S, Class B		12,241
	104	Danisco A/S		7,994
	698	Danske Bank A/S		30,721
	316	H. Lundbeck A/S		9,032
	61	Jyske Bank A/S*		5,020
	145	Novo Nordisk A/S, Class B		17,957
				220,101
		Finland—1.2%
	1,223	Fortum Oyj		52,957
	94	Kone Oyj, Class B		7,761
	159	Metso Corp.		9,652
	445	Neste Oil Oyj		15,973
	4,701	Nokia Oyj		186,013
	291	Outokumpu Oyj		10,841
	812	Sampo Oyj, Class A		25,410
	274	SanomaWSOY Oyj		7,900
	2,355	Stora Enso Oyj, Class R		43,134
	167	TietoEnator Oyj		4,090
	1,387	UPM - Kymmene Oyj		31,003
				394,734
		France—10.5%
	312	Accor S.A.		29,733
	77	Aeroports de Paris		8,789
	560	Air France-KLM		21,259
	307	Air Liquide S.A.		42,190
	2,182	Alcatel-Lucent		21,151
	705	Alliance Trust (The) PLC		5,441
	163	Alstom		38,415
	167	Arkema*		11,346
	179	Atos Origin S.A.*		10,869
	3,286	AXA		146,710
	1,644	AXA Asia Pacific Holdings Ltd.		12,432
	1,480	BNP Paribas		162,924
	511	Bouygues S.A.		48,985
	178	Cap Gemini S.A.		11,331
	1,409	Carrefour S.A.		101,291
	379	Casino Guichard-Perrachon S.A.		42,270
	346	Christian Dior S.A.		47,029
	335	CNP Assurances		42,645
	767	Compagnie de Saint-Gobain		82,105
	272	Compagnie Generale des Etablissements Michelin, Class B		36,373
	2,645	Credit Agricole S.A.		104,429
	79	Dassault Systemes S.A.		4,939
	96	Eiffage S.A.		10,833
	1,333	Electricite de France		159,662
	138	Essilor International S.A.		8,783

See Notes to Financial Statements.

71

Schedule of Investments (Continued)

PowerShares FTSE RAFI Developed Markets ex-U.S. Portfolio

October 31, 2007

Number of Shares			Value
		Common Stocks and Other Equity Interests (Continued)
	62	Eurazeo	$	9,229
	5,806	France Telecom S.A.		213,860
	1,275	Gaz de France		72,309
	485	Groupe DANONE		41,518
	50	Hermes International		6,567
	100	Imerys S.A.		9,709
	185	JC Decaux S.A.		6,806
	79	Klepierre		4,277
	538	L'Oreal S.A.		70,550
	324	Lafarge S.A.		52,617
	279	Lagardere S.C.A		23,549
	247	Legrand S.A.		9,109
	416	LVMH Moet Hennessy Louis Vuitton S.A.		53,492
	53	Mobistar S.A.		4,789
	730	Natixis		16,159
	430	PagesJaunes S.A.		9,481
	66	Pernod Ricard S.A.		15,230
	310	PPR		61,363
	1,275	PSA Peugeot Citroen		118,018
	205	Publicis Groupe		8,313
	652	Renault S.A.		109,326
	462	Safran S.A.		11,704
	1,265	Sanofi-Aventis		110,797
	312	Schneider Electric S.A.		42,904
	81	Societe BIC S.A.		6,287
	105	Societe des Autoroutes Paris-Rhin-Rhone		11,156
	643	Societe Generale		107,780
	295	Societe Television Francaise 1 (T. F. 1)		8,147
	238	Sodexho Alliance S.A.		17,137
	2,531	Suez S.A.		164,412
	137	Technip S.A.		12,263
	302	Thales S.A.		18,796
	747	Thomson		13,012
	4,781	Total S.A.		384,926
	138	Unibail-Rodamco		34,264
	322	Valeo S.A.		17,614
	37	Vallourec S.A.		10,709
	804	Veolia Environnement		71,711
	443	Vinci S.A.		36,288
	2,881	Vivendi		129,543
	40	Wendel		6,860
				3,344,515
		Germany—9.3%
	247	Adidas AG		16,395
	777	Allianz SE		174,825
	171	Altana AG		4,141
	397	Arcandor AG*		12,716
	993	BASF AG		137,585
	1,275	Bayer AG		106,176
	1,617	Bayerische Motoren Werke (BMW) AG		107,870

Number of Shares			Value
		Common Stocks and Other Equity Interests (Continued)
	172	Beiersdorf AG	$	13,597
	1,000	Bosch Corp.		5,196
	354	Celesio AG		20,107
	870	Commerzbank AG		36,904
	181	Continental AG		27,312
	3,961	Daimler AG		438,732
	922	Deutsche Bank AG		123,373
	79	Deutsche Boerse AG		12,684
	915	Deutsche Lufthansa AG		27,018
	2,217	Deutsche Post AG		67,036
	251	Deutsche Postbank AG		18,335
	11,665	Deutsche Telekom AG		238,969
	1,177	E.ON AG		229,984
	39	Euler Hermes S.A.		5,227
	93	Fraport AG		7,210
	318	Fresenius Medical Care AG & Co. KGaA		16,673
	69	Fresenius SE		5,366
	319	Hannover Rueckversicherung AG		16,781
	124	HeidelbergCement AG		19,752
	174	Heidelberger Druckmaschinen AG		7,119
	232	Henkel KGaA		10,714
	266	Hypo Real Estate Holding AG		15,844
	1,157	Infineon Technologies AG*		16,957
	216	Lanxess		10,687
	256	Leighton Holdings Ltd.		14,757
	227	Linde AG		28,697
	199	MAN AG		35,513
	173	Merck KGaA		21,622
	847	Metro AG		76,649
	411	Muenchener Rueckversicherungs- Gesellschaft AG		78,489
	153	RTL Group		15,473
	956	RWE AG		130,149
	65	Salzgitter AG		12,766
	636	SAP AG		34,523
	1,379	Siemens AG		188,296
	619	Suedzucker AG		14,033
	1,184	ThyssenKrupp AG		78,573
	1,032	TUI AG		30,279
	855	Volkswagen AG		244,808
	44	Wacker Chemie AG		10,712
				2,966,624
		Hong Kong—2.5%
	1,549	Bank of East Asia (The) Ltd.		10,432
	5,963	Cathay Pacific Airways Ltd.		17,656
	3,668	Cheung Kong Infrastructure Holdings Ltd.		14,292
	3,654	Cheung Kong Ltd.		71,045
	4,847	Chinese Estates Holdings Ltd.		9,743
	4,497	CLP Holdings Ltd.		30,228
	191	Dah Chong Hong Holdings Ltd.*		117

See Notes to Financial Statements.

72

Schedule of Investments (Continued)

PowerShares FTSE RAFI Developed Markets ex-U.S. Portfolio

October 31, 2007

Number of Shares			Value
		Common Stocks and Other Equity Interests (Continued)
	1,972	Dah Sing Banking Group Ltd.	$	4,544
	751	Dah Sing Financial Group		7,127
	611	Esprit Holdings Ltd.		10,090
	2,065	Great Eagle Holdings Ltd.		8,526
	8,922	Guangdong Investment Ltd.		6,066
	2,821	Hang Lung Group Ltd.		16,524
	4,818	Hang Lung Properties Ltd.		22,906
	3,815	Henderson Investment Ltd.		7,590
	3,638	Henderson Land Development Co. Ltd.		32,387
	6,439	Hong Kong and China Gas Co. Ltd.		17,238
	953	Hong Kong Exchanges & Clearing Ltd.		31,501
	4,798	Hongkong Electric Holdings Ltd.		24,576
	5,000	Hongkong Land Holdings Ltd.		24,900
	1,842	Hopewell Holdings Ltd.		9,482
	4,176	Hutchison Telecommunications International Ltd.		5,927
	8,503	Hutchison Whampoa Ltd.		105,976
	2,623	Hysan Development Co. Ltd.		7,885
	5,196	Johnson Electric Holdings Ltd.		2,903
	1,552	Kerry Properties Ltd.		13,326
	4,476	Li & Fung Ltd.		21,021
	5,604	MTR Corp. Ltd.		19,305
	5,655	New World Development Co. Ltd.		20,174
	9,000	Noble Group Ltd.		14,661
	1,451	Orient Overseas International Ltd.		14,864
	3,687	Shangri-La Asia Ltd.		11,702
	4,144	Sino Land Co. Ltd.		12,858
	4,141	Sun Hung Kai Properties Ltd.		78,430
	2,396	Swire Pacific Ltd., Class A		33,973
	5,733	Wharf Holdings (The) Ltd.		34,247
	3,494	Wheelock and Co. Ltd.		11,270
	795	Wing Hang Bank Ltd.		9,303
	408	Wing Lung Bank Ltd.		4,216
				799,011
		Ireland—0.3%
	1,067	Allied Irish Banks PLC		26,613
	338	Anglo Irish Bank Corp. PLC		5,672
	1,136	Bank of Ireland		20,938
	656	CRH PLC		24,998
	458	Irish Life & Permanent PLC		10,367
	238	Kerry Group PLC, Class A		7,119
	720	Ryanair Holdings PLC*		5,990
				101,697
		Italy—4.5%
	2,170	AEM SpA		9,120
	1,280	Alleanza Assicurazioni SpA		17,305
	2,045	Assicurazioni Generali SpA		97,072
	688	Atlantia SpA		26,994
	264	Autogrill SpA		5,267
	1,488	Banca Carige SpA		7,115
	3,666	Banca Monte dei Paschi di Siena SpA		23,390

Number of Shares			Value
		Common Stocks and Other Equity Interests (Continued)
	31	Banca Popolare dell' Emilia Romagna Scrl	$	733
	487	Banca Popolare di Milano Scarl		7,630
	605	Banco Popolare Scarl*		14,503
	385	Benetton Group SpA		7,096
	52	Ciments Francais S.A.		9,757
	16,113	Enel SpA		192,670
	8,852	Eni SpA		322,727
	2,167	Fiat SpA		69,850
	561	Finmeccanica SpA		16,630
	292	Fondiaria-Sai SpA		14,148
	226	Gestevision Telecinco S.A.		6,490
	825	Gruppo Editoriale L?Espresso SpA		4,163
	3,149	IFIL Investments SpA		35,854
	7,295	Intesa Sanpaolo		57,625
	266	Italcementi SpA		6,103
	316	Italcementi SpA Rnc		5,257
	194	Lottomatica SpA		6,924
	340	Luxottica Group SpA		11,899
	2,010	Mediaset SpA		20,792
	690	Mediobanca SpA		16,341
	729	Mediolanum SpA		5,405
	1,484	Parmalat SpA		5,480
	13,878	Pirelli & C. SpA		17,719
	804	RCS MediaGroup SpA		4,388
	321	Saipem SpA		14,183
	1,305	Saras SpA		7,868
	51,677	Seat Pagine Gialle SpA		29,980
	5,958	Snam Rete Gas SpA		38,487
	34,143	Telecom Italia SpA		107,067
	15,371	Telecom Italia SpA Rnc		39,673
	5,148	Terna-Rete Elettrica Nationale SpA		20,128
	13,568	UniCredito Italiano SpA		116,010
	812	Unione di Banche Italiane Scpa		22,544
	1,484	Unipol Gruppo Finanziario SpA		5,561
				1,447,948
		Japan—23.2%
	1,000	77Bank (The) Ltd.		6,740
	680	Acom Co. Ltd.		16,221
	200	Advantest Corp.		5,742
	1,900	Aeon Co. Ltd.		29,732
	600	Aiful Corp.		14,078
	2,000	Aioi Insurance Co. Ltd.		11,554
	600	Aisin Seiki Co. Ltd.		24,461
	2,000	Ajinomoto Co., Inc.		22,449
	200	Alfresa Holdings Corp.		11,606
	5,000	All Nippon Airways Co. Ltd.		19,213
	600	Alps Electric Co. Ltd.		7,463
	1,000	Amada Co. Ltd.		10,010
	200	Aoyama Trading Co. Ltd.		5,196
	1,300	Asahi Breweries Ltd.		21,448

See Notes to Financial Statements.

73

Schedule of Investments (Continued)

PowerShares FTSE RAFI Developed Markets ex-U.S. Portfolio

October 31, 2007

Number of Shares			Value
		Common Stocks and Other Equity Interests (Continued)
	2,000	Asahi Glass Co. Ltd.	$	27,272
	2,000	Asahi Kasei Corp.		15,197
	500	Astellas Pharma, Inc.		22,076
	1,000	Bank of Kyoto (The) Ltd.		12,708
	2,000	Bank of Yokohama (The) Ltd.		14,087
	200	Benesse Corp.		7,442
	2,000	Bridgestone Corp.		43,978
	1,000	Brother Industries Ltd.		13,332
	2,000	Calsonic Kansei Corp.		10,687
	500	Canon Marketing Japan, Inc.		9,780
	1,500	Canon, Inc.		74,816
	500	Casio Computer Co. Ltd.		4,701
	5	Central Japan Railway Co.		51,611
	1,000	Chiba Bank (The) Ltd.		7,954
	2,100	Chubu Electric Power Co., Inc.		53,645
	1,000	Chugoku Bank (The) Ltd.		14,477
	1,300	Chugoku Electric Power (The) Co., Inc.		25,541
	1,000	Chuo Mitsui Trust Holdings, Inc.		7,937
	700	Citizen Holdings Co. Ltd.		7,523
	200	Coca-Cola West Holdings Co. Ltd.		4,623
	5,000	Cosmo Oil Co. Ltd.		21,469
	200	Credit Saison Co. Ltd.		6,332
	200	CSK Holdings Corp.		7,789
	2,000	Dai Nippon Printing Co. Ltd.		28,920
	1,000	Daicel Chemical Industries Ltd.		7,312
	1,000	Daido Steel Co. Ltd.		6,757
	3,450	Daiei (The), Inc*		24,330
	2,000	Daihatsu Motor Co. Ltd.		21,096
	600	Daiichi Sankyo Co. Ltd.		17,019
	400	Daikin Industries Ltd.		20,055
	2,000	Dainippon Ink and Chemicals, Inc.		9,524
	200	Daito Trust Construction Co. Ltd.		9,195
	1,000	Daiwa House Industry Co. Ltd.		14,174
	2,000	Daiwa Securities Group, Inc.		19,048
	2,000	Denki Kagaku Kogyo Kabushiki Kaisha		11,693
	1,300	Denso Corp.		52,435
	5	Dentsu, Inc.		13,055
	1,000	Dowa Holdings Co. Ltd.		11,563
	7	East Japan Railway Co.		57,501
	2,000	Ebara Corp.		9,368
	200	EDION Corp.		2,280
	200	Eisai Co. Ltd.		8,362
	500	Electric Power Development Co. Ltd.		19,820
	100	Elpida Memory, Inc.*		3,400
	1,000	Ezaki Glico Co. Ltd.		10,435
	200	FamilyMart Co. Ltd.		5,829
	200	Fanuc Ltd.		21,755
	200	Fast Retailing Co. Ltd.		11,485
	2,000	Fuji Electric Holdings Co. Ltd.		7,547
	2,000	Fuji Fire & Marine Insurance (The) Co. Ltd.		7,200
	5,000	Fuji Heavy Industries Ltd.		25,849

Number of Shares			Value
		Common Stocks and Other Equity Interests (Continued)
	5	Fuji Television Network, Inc.	$	10,062
	1,200	FUJIFILM Holdings Corp.		57,249
	1,000	Fujikura Ltd.		6,402
	7,000	Fujitsu Ltd.		54,647
	1,000	Fukuoka Financial Group, Inc.		6,419
	2,000	Fukuyama Transporting Co. Ltd.		8,882
	100	Funai Electric Co. Ltd.		4,224
	2,000	Furukawa Electric (The) Co. Ltd.		9,542
	1,000	Gunma Bank (The) Ltd.		7,069
	1,000	H2O Retailing Corp.		8,319
	1,000	Hachijuni Bank (The) Ltd.		7,616
	2,000	Hankyu Hanshin Holdings, Inc.		9,351
	1,000	Haseko Corp.*		2,385
	500	Heiwa Corp.		5,595
	2,000	Hino Motors Ltd.		14,347
	1,000	Hiroshima Bank (The) Ltd.		5,404
	1,000	Hitachi Cable Ltd.		6,636
	200	Hitachi Capital Corp.		2,646
	500	Hitachi Chemical Co. Ltd.		12,187
	200	Hitachi Construction Machinery Co. Ltd.		8,119
	200	Hitachi High-Technologies Corp.		4,476
	17,000	Hitachi Ltd.		115,168
	500	Hitachi Maxell Ltd.		5,755
	1,000	Hitachi Metals Ltd.		12,890
	600	Hokkaido Electric Power Co., Inc.		12,907
	600	Hokuriku Electric Power Co.		12,543
	3,800	Honda Motor Co. Ltd.		141,735
	200	House Foods Corp.		3,156
	200	Hoya Corp.		7,234
	100	Ibiden Co. Ltd.		8,440
	2,000	IHI Corp.		4,753
	5	INPEX Holdings, Inc.		53,780
	500	Isetan Co. Ltd.		6,731
	5,000	Isuzu Motors Ltd.		24,635
	6,000	ITOCHU Corp.		74,998
	100	Itochu Techno-Solutions Corp.		3,548
	1,000	Iyo Bank (The) Ltd.		9,741
	200	Izumi Co. Ltd.		2,977
	1,000	J Front Retailing Co. Ltd.*		8,978
	7,000	Japan Airlines Corp.*		15,726
	100	Japan Petroleum Exploration Co. Ltd.		7,581
	13	Japan Tobacco, Inc.		75,439
	700	JFE Holdings, Inc.		40,621
	1,000	JGC Corp.		19,820
	2,000	Joyo Bank (The) Ltd.		12,335
	600	JS Group Corp.		9,675
	200	JSR Corp.		5,152
	500	JTEKT Corp.		9,520
	4,000	Kajima Corp.		14,087
	1,000	Kamigumi Co. Ltd.		8,102
	1,000	Kandenko Co. Ltd.		6,167

See Notes to Financial Statements.

74

Schedule of Investments (Continued)

PowerShares FTSE RAFI Developed Markets ex-U.S. Portfolio

October 31, 2007

Number of Shares			Value
		Common Stocks and Other Equity Interests (Continued)
	1,000	Kaneka Corp.	$	8,830
	2,800	Kansai Electric Power (The) Co., Inc.		62,905
	1,000	Kao Corp.		28,625
	2,000	Kawasaki Heavy Industries Ltd.		7,165
	2,000	Kawasaki Kisen Kaisha Ltd.		27,428
	6	KDDI Corp.		45,123
	1,000	Keihan Electric Railway Co. Ltd.		3,990
	1,000	Keihin Electric Express Railway Co. Ltd.		6,115
	2,000	Keio Corp.		12,144
	1,000	Keisei Electric Railway Co. Ltd.		5,482
	100	Keyence Corp.		22,960
	1,000	Kikkoman Corp.		12,612
	1,000	Kinden Corp.		8,839
	5,000	Kintetsu Corp.		15,180
	2,000	Kirin Holdings Co. Ltd.		27,844
	5,000	Kobe Steel Ltd.		17,825
	1,000	Koito Manufacturing Co. Ltd.		13,861
	500	Kokuyo Co. Ltd.		4,389
	700	Komatsu Ltd.		23,134
	200	Konami Corp.		5,881
	1,000	Konica Minolta Holdings, Inc.		17,348
	2,000	Kubota Corp.		16,758
	1,000	Kuraray Co. Ltd.		12,968
	500	Kyocera Corp.		41,896
	1,000	Kyowa Hakko Kogyo Co. Ltd.		10,886
	1,700	Kyushu Electric Power Co., Inc.		41,363
	200	Lawson, Inc.		6,905
	200	Leopalace21 Corp.		6,349
	1,000	Lion Corp.		4,693
	100	Mabuchi Motor Co. Ltd.		6,731
	200	Makita Corp.		9,559
	7,000	Marubeni Corp.		59,383
	900	Marui Group Co. Ltd.		9,306
	6,000	Matsushita Electric Industrial Co. Ltd.		113,978
	2,000	Matsushita Electric Works Ltd.		22,050
	5,000	Mazda Motor Corp.		29,796
	600	Mediceo Paltac Holdings Co. Ltd.		8,686
	1,000	Meiji Dairies Corp.		5,265
	2,000	Meiji Seika Kaisha Ltd.		8,796
	1,200	Millea Holdings, Inc.		47,049
	1,000	Minebea Co. Ltd.		6,896
	4,900	Mitsubishi Corp.		150,888
	5,000	Mitsubishi Electric Corp.		60,546
	1,000	Mitsubishi Estate Co. Ltd.		29,666
	1,000	Mitsubishi Gas Chemical Co., Inc.		9,906
	6,000	Mitsubishi Heavy Industries Ltd.		34,558
	2,000	Mitsubishi Materials Corp.		11,571
	19,000	Mitsubishi Motors Corp.*		37,082
	1,000	Mitsubishi Rayon Co. Ltd.		5,630
	1,000	Mitsubishi Tanabe Pharma Corp.		11,424
	8,620	Mitsubishi UFJ Financial Group, Inc.		85,164

Number of Shares			Value
		Common Stocks and Other Equity Interests (Continued)
	1,630	Mitsubishi UFJ Lease & Finance Co. Ltd.	$	56,131
	5,000	Mitsui & Co. Ltd.		127,945
	2,000	Mitsui Chemicals, Inc.		18,615
	2,000	Mitsui Engineering & Shipbuilding Co. Ltd.		11,623
	1,000	Mitsui Fudosan Co. Ltd.		27,410
	2,000	Mitsui Mining & Smelting Co. Ltd.		8,362
	2,000	Mitsui O.S.K. Lines Ltd.		32,684
	2,000	Mitsui Sumitomo Insurance Co. Ltd.		22,761
	2,000	Mitsukoshi Ltd.		9,229
	6	Mizuho Financial Group, Inc.		33,465
	200	Murata Manufacturing Co. Ltd.		12,057
	2,000	Nagoya Railroad Co. Ltd.		5,881
	12,000	NEC Corp.		59,332
	500	NEC Electronics Corp.*		13,618
	1,000	NGK Insulators Ltd.		35,130
	1,000	NGK Spark Plug Co. Ltd.		16,654
	1,000	NHK Spring Co. Ltd.		8,527
	1,000	Nichirei Corp.		4,250
	100	Nidec Corp.		7,503
	1,000	Nikon Corp.		31,661
	100	Nintendo Co. Ltd.		62,368
	1,000	Nippon Electric Glass Co. Ltd.		16,906
	5,000	Nippon Express Co. Ltd.		24,982
	2,000	Nippon Light Metal Co. Ltd.		4,094
	1,000	Nippon Meat Packers, Inc.		10,071
	3,000	Nippon Mining Holdings, Inc.		28,052
	6,000	Nippon Oil Corp.		52,617
	5	Nippon Paper Group, Inc.		14,963
	2,000	Nippon Sheet Glass Co. Ltd.		12,109
	6,000	Nippon Steel Corp.		39,502
	68	Nippon Telegraph & Telephone Corp.		311,438
	60	Nippon Television Network Corp.		7,723
	2,000	Nippon Yusen Kabushiki Kaisha		20,471
	2,000	NIPPONKOA Insurance Co. Ltd.		18,216
	2,000	Nishimatsu Construction Co. Ltd.		6,141
	1,000	Nishi-Nippon Railroad Co. Ltd.		3,634
	14,900	Nissan Motor Co. Ltd.		171,378
	1,000	Nissay Dowa General Insurance Co. Ltd.		5,656
	1,000	Nisshin Seifun Group, Inc.		8,995
	2,000	Nisshin Steel Co. Ltd.		7,599
	1,000	Nisshinbo Industries, Inc.		13,558
	200	Nissin Food Products Co. Ltd.		6,280
	200	Nitto Denko Corp.		9,698
	500	NOK Corp.		11,038
	2,100	Nomura Holdings, Inc.		37,342
	200	Nomura Research Institute Ltd.		7,026
	1,000	NSK Ltd.		8,770
	1,000	NTN Corp.		9,481
	5	NTT Data Corp.		22,683
	98	NTT DoCoMo, Inc.		141,111
	2,000	Obayashi Corp.		10,027

See Notes to Financial Statements.

75

Schedule of Investments (Continued)

PowerShares FTSE RAFI Developed Markets ex-U.S. Portfolio

October 31, 2007

Number of Shares			Value
		Common Stocks and Other Equity Interests (Continued)
	2,000	Odakyu Electric Railway Co. Ltd.	$	13,965
	5,000	Oji Paper Co. Ltd.		22,813
	5,000	Oki Electric Industry Co. Ltd.		8,457
	1,000	Olympus Corp.		41,202
	500	OMRON Corp.		12,166
	200	Ono Pharmaceutical Co. Ltd.		10,305
	1,000	Onward Holdings Co. Ltd.		10,262
	2,000	Orient Corp.		2,793
	200	Oriental Land Co. Ltd.		11,866
	120	ORIX Corp.		24,159
	6,000	Osaka Gas Co. Ltd.		23,264
	700	Pioneer Corp.		7,754
	600	Promise Co. Ltd.		17,956
	600	Q.P. Corp.		5,912
	2,000	Ricoh Co. Ltd.		39,120
	200	Rohm Co. Ltd.		17,435
	500	Ryoshoku Ltd.		11,146
	1,000	San-in Godo Bank (The) Ltd.		8,986
	200	Sankyo Co. Ltd.		8,501
	20,000	Sanyo Electric Co. Ltd.		32,962
	130	Sanyo Shinpan Finance Co. Ltd.		4,060
	1	Sapporo Hokuyo Holdings, Inc.		10,236
	1,000	Sapporo Holdings Ltd.		7,503
	200	Secom Co. Ltd.		10,253
	300	Sega Sammy Holdings, Inc.		4,125
	700	Seiko Epson Corp.		16,364
	1,000	Seino Holdings Co. Ltd.		8,527
	2,000	Sekisui Chemical Co. Ltd.		13,601
	2,000	Sekisui House Ltd.		25,450
	20	SFCG Co. Ltd.		3,294
	2,000	Sharp Corp.		31,314
	600	Shikoku Electric Power Co., Inc.		15,041
	100	Shimamura Co. Ltd.		9,680
	200	Shimano, Inc.		7,252
	2,000	Shimizu Corp.		10,392
	500	Shin-Etsu Chemical Co. Ltd.		31,834
	1,000	Shinko Securities Co. Ltd.		5,118
	2,000	Shinsei Bank Ltd.		6,419
	1,000	Shionogi & Co. Ltd.		16,975
	1,000	Shiseido Co. Ltd.		23,984
	1,000	Shizuoka Bank (The) Ltd.		10,444
	2,000	Showa Denko K.K.		7,789
	1,900	Showa Shell Sekiyu K.K.		22,233
	100	SMC Corp.		13,341
	200	Softbank Corp.		4,632
	200	Sohgo Security Services Co. Ltd.		3,312
	2,000	Sompo Japan Insurance, Inc.		23,316
	2,600	Sony Corp.		127,197
	200	Stanley Electric Co. Ltd.		4,415
	200	Sumco Corp.		7,217
	1,000	Sumitomo Bakelite Co. Ltd.		6,081

Number of Shares			Value
		Common Stocks and Other Equity Interests (Continued)
	2,000	Sumitomo Chemical Co. Ltd.	$	17,678
	3,800	Sumitomo Corp.		65,363
	1,900	Sumitomo Electric Industries Ltd.		30,539
	1,000	Sumitomo Forestry Co. Ltd.		7,434
	1,000	Sumitomo Heavy Industries Ltd.		13,063
	5,000	Sumitomo Metal Industries Ltd.		24,418
	1,000	Sumitomo Metal Mining Co. Ltd.		22,032
	5	Sumitomo Mitsui Financial Group, Inc.		40,508
	2,000	Sumitomo Osaka Cement Co. Ltd.		4,962
	1,000	Sumitomo Realty & Development Co. Ltd.		34,957
	600	Sumitomo Rubber Industries Ltd.		7,260
	2,000	Sumitomo Trust & Banking (The) Co. Ltd.		14,763
	200	Suzuken Co. Ltd.		6,436
	1,200	Suzuki Motor Corp.		39,138
	300	T&D Holdings, Inc.		17,877
	2,000	Taiheiyo Cement Corp.		6,245
	5,000	Taisei Corp.		14,963
	1,000	Taisho Pharmaceutical Co. Ltd.		19,213
	1,000	Taiyo Nippon Sanso Corp.		8,874
	1,000	Taiyo Yuden Co. Ltd.		16,412
	1,000	Takashimaya Co. Ltd.		12,092
	900	Takeda Pharmaceutical Co. Ltd.		55,896
	690	Takefuji Corp.		17,596
	200	TDK Corp.		16,290
	2,000	Teijin Ltd.		9,594
	200	Terumo Corp.		9,732
	2,000	Tobu Railway Co. Ltd.		9,403
	2,000	Toda Corp.		10,426
	200	Toho Co. Ltd.		3,973
	2,000	Toho Gas Co. Ltd.		10,322
	1,900	Tohoku Electric Power Co., Inc.		40,049
	1,000	Tokuyama Corp.		13,844
	200	Tokyo Broadcasting System, Inc.		5,309
	4,700	Tokyo Electric Power (The) Co., Inc.		119,044
	200	Tokyo Electron Ltd.		11,641
	5,000	Tokyo Gas Co. Ltd.		22,162
	200	Tokyo Steel Manufacturing Co. Ltd.		2,753
	1,000	Tokyo Tatemono Co. Ltd.		12,742
	2,000	Tokyu Corp.		12,924
	1,000	Tokyu Land Corp.		10,270
	200	Toppan Forms Co. Ltd.		1,957
	2,000	Toppan Printing Co. Ltd.		19,465
	2,000	Toray Industries, Inc.		15,336
	12,000	Toshiba Corp.		100,448
	1,000	Toshiba TEC Corp.		6,358
	2,000	Tosoh Corp.		12,682
	1,000	Toto Ltd.		7,208
	600	Toyo Seikan Kaisha Ltd.		10,799
	1,000	Toyo Suisan Kaisha Ltd.		17,331
	2,000	Toyobo Co. Ltd.		4,684
	200	Toyoda Gosei Co. Ltd.		7,130

See Notes to Financial Statements.

76

Schedule of Investments (Continued)

PowerShares FTSE RAFI Developed Markets ex-U.S. Portfolio

October 31, 2007

Number of Shares			Value
		Common Stocks and Other Equity Interests (Continued)
	500	Toyota Auto Body Co. Ltd.	$	8,037
	500	Toyota Industries Corp.		21,252
	5,300	Toyota Motor Corp.		302,042
	700	Toyota Tsusho Corp.		19,491
	2	TV Asahi Corp.		3,470
	2,000	Ube Industries Ltd.		7,130
	100	Unicharm Corp.		5,942
	1,000	UNY Co. Ltd.		8,631
	5,000	Victor Co. of Japan Ltd.		10,626
	6	West Japan Railway Co.		29,926
	200	Yakult Honsha Co. Ltd.		4,615
	70	Yamada Denki Co. Ltd.		7,165
	1,000	Yamaguchi Financial Group, Inc.		11,667
	500	Yamaha Corp.		11,580
	600	Yamaha Motor Co. Ltd.		16,967
	1,000	Yamato Holdings Co. Ltd.		14,668
	1,000	Yamazaki Baking Co. Ltd.		8,735
	500	Yokogawa Electric Corp.		6,258
	1,000	Yokohama Rubber (The) Co. Ltd.		7,390
				7,393,473
		Luxembourg—0.4%
	212	ArcelorMittal		16,992
	964	ArcelorMittal		76,707
	501	Banco Espirito Santo S.A.		12,119
	796	SES FDR		19,624
				125,442
		Malaysia—0.1%
	1,490	Guoco Group Ltd.		22,876
		Netherlands—5.8%
	2,376	ABN AMRO Holding N.V.		128,252
	3,240	Aegon N.V.		66,843
	543	Akzo Nobel N.V.		43,624
	221	ASML Holding N.V.		7,686
	100	Corio N.V.		8,753
	1,859	European Aeronautic Defence and Space Co.		63,042
	174	Heineken Holding N.V.		10,278
	350	Heineken N.V.		24,457
	5,494	ING Groep N.V. CVA		246,721
	2,861	Koninklijke (Royal) KPN N.V.		53,892
	1,792	Koninklijke (Royal) Philips Electronics N.V.		74,018
	4,596	Koninklijke Ahold N.V.		68,886
	459	Koninklijke DSM N.V.		25,991
	100	Randstad Holding N.V.		5,535
	238	Reed Elsevier N.V.		4,597
	10,571	Royal Dutch Shell PLC, Class A		462,251
	8,039	Royal Dutch Shell PLC, Class B		349,861
	110	Royal Numico N.V.		8,684
	931	SNS Reaal		22,305
	466	TNT N.V.		19,039

Number of Shares			Value
		Common Stocks and Other Equity Interests (Continued)
	4,679	Unilever N.V. CVA	$	151,565
	317	Wolters Kluwer N.V.		9,920
				1,856,200
		New Zealand—0.1%
	2,634	Air New Zealand Ltd.		4,295
	926	Contact Energy Ltd.		6,453
	616	Fletcher Building Ltd.		5,619
	2,528	Goodman Fielder Ltd.		4,920
	3,657	Telecom Corp. of New Zealand Ltd.		12,207
				33,494
		Norway—1.3%
	278	Aker Kvaerner ASA		9,642
	2,426	DnB NOR ASA		39,823
	2,258	Norsk Hydro ASA		33,003
	708	Norske Skogindustrier ASA		7,748
	1,666	Orkla ASA		30,809
	6,935	StatoilHydro ASA		233,596
	554	Storebrand ASA		7,871
	1,519	Telenor ASA		35,500
	5,600	Total Access Communication Public Co. Ltd.*		6,720
	305	Yara International ASA		11,753
				416,465
		Portugal—0.3%
	405	Banco BPI S.A.		3,539
	4,784	Banco Comercial Portugues S.A., Class R		23,117
	659	Brisa-Auto-Estradas de Portugal S.A.		9,343
	1,026	CIMPOR-Cimentos de Portugal, SGPS S.A.		9,292
	5,273	Energias de Portugal S.A.		33,872
	1,813	Portugal Telecom, SGPS S.A.		24,262
	262	PT Multimedia-Servicos de Telecomunicacoes e Multimedia, SGPS S.A.*		3,559
				106,984
		Singapore—1.1%
	2,000	Capitaland Ltd.		11,113
	7,000	Chartered Semiconductor Manufacturing Ltd.*		5,508
	1,000	City Developments Ltd.		10,906
	7,000	ComfortDelgro Corp. Ltd.		9,325
	2,000	DBS Group Holdings Ltd.		30,923
	2,000	Fraser and Neave Ltd.		8,283
	2,000	Keppel Corp. Ltd.		20,293
	8,000	Neptune Orient Lines Ltd.		28,162
	7,000	Oversea-Chinese Banking Corp. Ltd.		44,452
	11,460	PCCW Ltd.		7,363
	2,000	SembCorp. Industries Ltd.		8,145
	2,000	Singapore Airlines Ltd.		27,058
	2,000	Singapore Press Holdings Ltd.		6,323
	7,000	Singapore Technologies Engineering Ltd.		18,361
	24,000	Singapore Telecommunications Ltd.		67,589
	7,000	SMRT Corp. Ltd.		8,504

See Notes to Financial Statements.

77

Schedule of Investments (Continued)

PowerShares FTSE RAFI Developed Markets ex-U.S. Portfolio

October 31, 2007

Number of Shares			Value
		Common Stocks and Other Equity Interests (Continued)
	2,000	United Overseas Bank Ltd.	$	29,681
	2,000	UOL Group Ltd.		7,248
				349,237
		South Africa—0.0%
	37	Mondi Ltd.		373
		Spain—3.3%
	504	Abertis Infraestructuras S.A.		16,756
	45	Acciona S.A.		13,867
	305	Acerinox S.A.		8,984
	228	ACS, Actividades de Construccion y Servicios S.A.		14,088
	385	Altadis S.A.		27,449
	4,275	Banco Bilbao Vizcaya Argentaria S.A.		107,431
	942	Banco de Sabadell S.A.		9,540
	517	Banco Espanol de Credito S.A.		10,606
	1,321	Banco Popular Espanol S.A.		23,029
	6,575	Banco Santander S.A.		142,686
	402	Bankinter S.A.		5,961
	363	Compania Espanola de Petroleos S.A.		37,103
	262	Enagas		7,429
	580	Endesa S.A.		30,175
	141	Fomento de Construcciones y Contratas S.A.		12,260
	146	Gamesa Corporacion Tecnologica S.A.		7,393
	558	Gas Natural SDG S.A.		34,269
	66	Gecina S.A.		11,267
	134	Grupo Ferrovial S.A.		11,642
	7,032	Iberdrola S.A.		113,028
	216	Industria de Diseno Textil S.A.		16,047
	2,275	Mapfre S.A.		10,664
	50	Metrovacesa S.A.		5,859
	2,907	Repsol YPF S.A.		114,605
	160	Sacyr Vallehermoso S.A.		7,509
	6,973	Telefonica S.A.		229,910
	397	Union Fenosa S.A.		26,369
				1,055,926
		Sweden—2.1%
	527	Assa Abloy AB, Class B		11,019
	804	Atlas Copco AB, Class A		13,429
	601	Atlas Copco AB, Class B		9,354
	253	Boliden AB		4,455
	1,080	Electrolux AB, Series B		20,841
	518	Hennes & Mauritz AB, Class B		34,446
	373	Holmen AB, Class B		14,659
	542	Husqvarna AB, Class B		6,518
	525	Industrivarden AB, Class A		11,369
	287	Industrivarden AB, Class C		5,809
	200	Investor AB, Class A		4,842
	1,029	Investor AB, Class B		25,397
	4,072	Nordea Bank AB		72,720
	1,423	Sandvik AB		26,844

Number of Shares			Value
		Common Stocks and Other Equity Interests (Continued)
	295	Scania AB, Class A	$	8,440
	748	Scania AB, Class B		20,402
	924	Securitas AB, Class B		11,657
	878	Skandinaviska Enskilda Banken AB, Class A		26,846
	1,028	Skanska AB, Class B		20,282
	778	SKF AB, Class B		15,074
	436	SSAB Svenskt Stal AB, Series A		14,120
	281	SSAB Svenskt Stal AB, Series B		8,261
	1,686	Svenska Cellulosa AB, Class B		29,685
	1,057	Svenska Handelsbanken AB, Class A		34,978
	802	Swedbank AB, Class A		25,027
	432	Swedish Match AB		9,644
	848	Tele2 AB, Class B		19,930
	10,424	Telefonaktiebolaget LM Ericsson, Class B		31,136
	5,352	TeliaSonera AB		52,585
	1,033	Volvo AB, Class A		20,015
	2,202	Volvo AB, Class B		42,838
				652,622
		Switzerland—3.7%
	1,611	ABB Ltd.		48,425
	315	Adecco S.A.		18,929
	93	Baloise Holding AG		9,877
	500	Chugai Pharmaceutical Co. Ltd.		8,631
	210	Ciba Specialty Chemicals AG		10,427
	615	Clariant AG		7,853
	329	Compagnie Financiere Richemont S.A., Class A		23,460
	1,730	Credit Suisse Group		116,274
	22	Geberit AG		2,963
	7	Givaudan S.A.		6,873
	333	Holcim Ltd.		37,924
	128	Julius Baer Holding AG		11,066
	104	Kuehne & Nagel International AG		11,144
	57	Lonza Group AG		6,634
	482	Nestle S.A.		222,275
	2,320	Novartis AG		123,300
	107	Pargesa Holding S.A.		12,177
	506	Roche Holding AG		86,265
	22	Roche Holding AG Br		4,180
	77	Schindler Holding AG		5,308
	50	Schindler Holding AG Participant Certificates		3,494
	5	SGS S.A.		6,548
	1,263	STMicroelectronics N.V.		21,580
	27	Swatch Group AG-Bearer		8,619
	76	Swatch Group AG-Registered		4,770
	72	Swiss Life Holding		19,878
	595	Swiss Re		55,801
	111	Swisscom AG		41,013
	105	Syngenta AG		25,207
	61	Synthes, Inc.		7,610
	2,474	UBS AG		132,233
	276	Zurich Financial Services AG		83,046
				1,183,784

See Notes to Financial Statements.

78

Schedule of Investments (Continued)

PowerShares FTSE RAFI Developed Markets ex-U.S. Portfolio

October 31, 2007

Number of Shares			Value
		Common Stocks and Other Equity Interests (Continued)
		Taiwan, Province of China—0.1%
	2,588	Foxconn International Holdings Ltd.*	$	7,145
	2,686	Yue Yuen Industrial Ltd.		8,230
				15,375
		United Kingdom—15.5%
	405	3i Group PLC		9,128
	870	Alliance & Leicester PLC		14,287
	1,362	Anglo American PLC		93,765
	997	Antofagasta PLC		17,346
	1,297	Associated British Foods PLC		24,572
	1,544	AstraZeneca PLC		76,112
	5,946	Aviva PLC		93,319
	4,281	BAE Systems PLC		44,288
	10,367	Barclays PLC		130,077
	1,151	BBA Aviation PLC		5,768
	2,361	BG Group PLC		43,627
	48,887	BP PLC		634,721
	1,243	Bradford & Bingley PLC		7,979
	2,186	British Airways PLC*		20,219
	2,589	British American Tobacco PLC		98,422
	292	British Energy Group PLC		3,233
	490	British Land Co. PLC		11,034
	816	British Sky Broadcasting Group PLC		11,535
	16,281	BT Group PLC		110,257
	588	Bunzl PLC		8,837
	529	Burberry Group PLC		6,758
	7,743	Cable & Wireless PLC		31,349
	2,976	Cadbury Schweppes PLC		39,319
	318	Capita Group PLC		4,948
	627	Carphone Warehouse Group (The) PLC		4,565
	7,085	Centrica PLC		54,273
	1,165	Cobham PLC		5,094
	4,857	Compass Group PLC		34,910
	459	Daily Mail & General Trust		5,845
	3,319	Diageo PLC		75,842
	5,154	DSG International PLC		13,865
	1,088	Electrocomponents PLC		5,650
	403	EMAP PLC		7,338
	499	Enterprise Inns PLC		6,531
	2,569	Experian Group Ltd.		26,924
	1,092	Foreign & Colonial Investment Trust PLC		7,338
	4,067	Friends Provident PLC		15,545
	2,217	G4S PLC		9,752
	1,811	GKN PLC		13,797
	6,972	GlaxoSmithKline PLC		179,302
	318	Hammerson PLC		7,346
	3,703	Hang Seng Bank Ltd.		75,103
	2,506	Hays PLC		7,145
	6,064	HBOS PLC		109,972
	2,335	Home Retail Group PLC		21,149
	18,474	HSBC Holdings PLC		364,966

Number of Shares			Value
		Common Stocks and Other Equity Interests (Continued)
	412	ICAP PLC	$	5,007
	1,615	Imperial Chemical Industries PLC		22,109
	564	Imperial Tobacco Group PLC		28,506
	1,131	InterContinental Hotels Group PLC		26,314
	473	International Personal Finance PLC		2,427
	931	International Power PLC		9,457
	979	Invesco PLC		14,999
	7,982	ITV PLC		16,432
	4,567	J Sainsbury PLC		51,895
	351	Johnson Matthey PLC		13,015
	356	Kazakhmys PLC		10,901
	504	Kelda Group PLC		9,931
	1,443	Kesa Electricals PLC		9,517
	6,243	Kingfisher PLC		25,588
	3,024	Ladbrokes PLC		25,866
	592	Land Securities Group PLC		20,218
	16,828	Legal & General Group PLC		48,976
	452	Liberty International PLC		11,230
	13,365	Lloyds TSB Group PLC		151,452
	1,707	LogicaCMG PLC		5,771
	111	Lonmin PLC		7,923
	815	Man Group PLC		9,955
	2,048	Marks & Spencer Group PLC		27,739
	1,251	Mitchells & Butlers PLC		17,295
	340	Mondi PLC		3,148
	3,090	National Grid PLC		51,448
	228	Next PLC		10,458
	576	Northern Rock PLC		2,208
	11,988	Old Mutual PLC		45,822
	1,514	Pearson PLC		25,082
	362	Persimmon PLC		7,888
	216	Provident Financial PLC		3,955
	4,798	Prudential PLC		77,943
	1,243	Rank Group PLC		2,647
	442	Reckitt Benckiser Group PLC		25,608
	408	Reed Elsevier PLC		5,323
	3,475	Rentokil Initial PLC		12,416
	1,757	Reuters Group PLC		24,089
	1,377	Rexam PLC		15,518
	304	Rio Tinto Ltd.		30,991
	877	Rio Tinto PLC		81,800
	1,665	Rolls-Royce Group PLC		18,608
	55,024	Rolls-Royce Group PLC, Class B*		114
	7,591	Royal & Sun Alliance Insurance Group PLC		24,868
	14,754	Royal Bank of Scotland Group PLC		158,304
	1,151	SABMiller PLC		34,550
	861	Sage Group (The) PLC		4,328
	215	Schroders PLC		6,874
	87	Schroders PLC Ntvg		2,429
	2,105	Scottish & Newcastle PLC		34,239
	999	Scottish & Southern Energy PLC		32,291
	580	Segro PLC		5,627

See Notes to Financial Statements.

79

Schedule of Investments (Continued)

PowerShares FTSE RAFI Developed Markets ex-U.S. Portfolio

October 31, 2007

Number of Shares			Value
		Common Stocks and Other Equity Interests (Continued)
	677	Severn Trent PLC	$	20,392
	333	Shire PLC		8,308
	2,701	Signet Group PLC		5,064
	578	Smith & Nephew PLC		7,799
	537	Smiths Group PLC		12,583
	1,483	Standard Chartered PLC		57,486
	999	Tate & Lyle PLC		9,038
	8,817	Tesco PLC		89,382
	2,491	Tomkins PLC		11,475
	159	Travis Perkins PLC		4,806
	734	Trinity Mirror PLC		6,126
	4,768	Unilever PLC		160,952
	471	United Business Media PLC		7,118
	1,897	United Utilities PLC		28,748
	122,116	Vodafone Group PLC		479,451
	409	Whitbread PLC		15,047
	809	William Hill PLC		10,403
	3,274	William Morrison Supermarkets PLC		20,115
	433	Witan Investment Trust PLC		4,426
	932	Wolseley PLC		16,137
	1,339	WPP Group PLC		18,261
	392	Xstrata PLC		28,070
	672	Yell Group PLC		6,352
				4,941,790
		United States—0.5%
	322	Brookfield Properties Corp.		8,069
	412	Caltex Australia Ltd.		8,163
	808	Carnival PLC		37,699
	881	Imperial Oil Ltd.		47,723
	1,000	Nikko Cordial Corp.		14,330
	200	Oracle Corp. Japan		9,160
	7,000	Seiyu (The) Ltd.*		8,501
	2,000	TonenGeneral Sekiyu K.K.		20,072
	165	Zardoya Otis S.A.		5,562
				159,279
		Total Common Stocks and Other Equity Interests (Cost $29,980,863)		31,749,332
		Preferred Stocks—0.5%
		Germany—0.5%
	171	Fresenius SE		13,557
	323	Henkel KGaA		16,458
	12	Porsche AG		31,962
	415	Volkswagen AG		78,773
				140,750

Number of Shares			Value
		Preferred Stocks (Continued)
		Italy—0.0%
	3,039	Unipol Gruppo Finanziario SpA	$	10,860
		Total Preferred Stocks (Cost $120,825)		151,610
		Warrants—0.0%
		China—0.0%
	65	China Overseas Land & Investment Ltd., expiring 08/27/08* (Cost $0)		54
		Rights—0.0%
		Spain—0.0%
	41	Metrovacesa SA, expiring 11/09/2007* (Cost $0)		5
		Total Investments (Cost $30,101,688)—100.2%		31,901,001
		Liabilities in excess of other assets—(0.2%)		(61,131	)
		Net Assets—100.0%	$	31,839,870

*  Non-income producing security.

See Notes to Financial Statements.

80

Schedule of Investments

PowerShares FTSE RAFI Developed Markets ex-U.S. Small-Mid Portfolio

October 31, 2007

Number of Shares			Value
		Common Stocks and Other Equity Interests—99.0%
		Australia—5.6%
	294	ABB Grain Ltd.	$	2,052
	213	Adelaide Bank Ltd.		2,896
	920	Adelaide Brighton Ltd.		3,138
	369	Ansell Ltd.		4,230
	1,035	APN News & Media Ltd.		5,141
	226	Aristocrat Leisure Ltd.		2,178
	77	ASX Ltd.		4,092
	1,172	Austereo Group Ltd.		2,802
	1,916	Australian Pharmaceutical Industries Ltd.		3,551
	2,433	AWB Ltd.		6,719
	2,774	Babcock & Brown Infrastructure Group		4,203
	171	Bank of Queensland Ltd.		3,040
	218	Bendigo Bank Ltd.		2,822
	211	Billabong International Ltd.		2,939
	854	Centennial Coal Co. Ltd.		3,387
	650	Centro Properties Group		4,217
	919	Challenger Financial Services Group Ltd.		5,383
	4,839	Commonwealth Property Office Fund		7,086
	332	Computershare Ltd.		2,631
	246	Crane Group Ltd.		3,830
	294	CSL Ltd.		9,945
	779	David Jones Ltd.		3,566
	3,914	DB RREEF Trust		7,581
	698	Downer EDI Ltd.		4,289
	3,232	Envestra Ltd.		3,325
	262	Flight Centre Ltd.		5,903
	3,189	Futuris Corp. Ltd.		6,265
	858	Goodman Group		5,487
	1,285	Gunns Ltd.		4,478
	837	GWA International Ltd.		2,800
	978	Harvey Norman Holdings Ltd.		6,145
	3,781	IBA Health Ltd.		4,012
	796	Iluka Resources Ltd.		3,224
	2,083	ING Industrial Fund		5,405
	3,433	ING Office Fund		5,727
	775	James Hardie Industries N.V. CDI		4,647
	1,913	Kiwi Income Property Trust		2,148
	588	Macquarie Communications Infrastructure Group		3,128
	2,258	Macquarie CountryWide Trust		4,206
	1,729	Macquarie DDR Trust		1,883
	3,772	Macquarie Office Trust		5,733
	1,396	Metcash Ltd.		6,042
	1,804	Multiplex Group		8,409
	172	Newcrest Mining Ltd.		5,165
	354	Nufarm Ltd.		5,118
	2,599	OneSteel Ltd.		16,570
	1,247	Pacific Brands Ltd.		3,999
	349	Pacifica Group Ltd.		631
	57	Perpetual Ltd.		3,923
	208	Ramsay Health Care Ltd.		2,047

Number of Shares			Value
		Common Stocks and Other Equity Interests (Continued)
	2,011	Ridley Corp. Ltd.	$	2,125
	508	Seven Network Ltd.		6,431
	1,155	Sigma Pharmaceuticals Ltd.		1,627
	236	Sims Group Ltd.		6,157
	396	Sonic Healthcare Ltd.		6,320
	979	Spotless Group Ltd.		4,056
	541	Tattersall's Ltd.		2,101
	1,692	Ten Network Holdings Ltd.		4,312
	2,764	Thakral Holdings Group		2,895
	314	Toll Holdings Ltd.		3,873
	184	Transfield Services Ltd.		2,674
	1,224	Transurban Group		8,247
	177	United Group Ltd.		3,494
	1,610	Village Roadshow Ltd.		4,506
	244	West Australian Newspapers Holdings Ltd.		3,145
	250	Zinifex Ltd.		3,858
				293,959
		Austria—1.1%
	38	Agrana Beteiligungs AG		3,967
	58	Andritz AG		4,260
	343	Austrian Airlines AG*		3,598
	37	Boehler-Uddeholm AG		3,929
	119	CA Immobilien Anlagen AG*		3,202
	292	Cott Corp.*		2,057
	49	Flughafen Wien AG		5,799
	261	IMMOFINANZ AG		3,096
	61	Mayr-Melnhof Karton AG		7,237
	160	Meinl European Land Ltd.*		2,241
	117	Oesterreichische Post AG		4,848
	40	RHI AG*		2,045
	41	Semperit AG Holding		1,908
	226	UNIQA Versicherungen AG		7,978
	94	Zumtobel AG		4,012
				60,177
		Belgium—1.3%
	42	Ackermans & Van Haaren		4,363
	4,014	Avis Europe PLC*		3,335
	37	Barco N.V.		3,037
	39	Befimmo S.C.A. Sicafi		4,242
	85	Brederode S.A. Financiere		3,837
	31	Cofinimmo		5,818
	82	Compagnie Maritime Belge S.A.		7,511
	122	Cumerio N.V. S.A.		5,145
	158	Euronav S.A.		4,686
	68	GIMV N.V.		4,710
	31	Omega Pharma S.A.		2,072
	162	Recticel S.A.		2,461
	325	RHJ International*		5,699
	152	Telenet Group Holding N.V.*		5,586
	140	Tessenderlo Chemie N.V.		8,871
				71,373

See Notes to Financial Statements.

81

Schedule of Investments (Continued)

PowerShares FTSE RAFI Developed Markets ex-U.S. Small-Mid Portfolio

October 31, 2007

Number of Shares			Value
		Common Stocks and Other Equity Interests (Continued)
		Brazil—0.1%
	564	Gerdau Ameristeel Corp.	$	7,648
		Canada—5.4%
	148	AGF Management Ltd., Class B		5,719
	65	Astral Media, Inc., Class A		3,082
	264	ATS Automation Tooling Systems, Inc.*		2,015
	266	Biovail Corp.		5,323
	40	Boardwalk REIT		1,838
	325	CAE, Inc.		4,359
	91	Calloway REIT		2,405
	154	Cameco Corp.		7,554
	44	Canada Bread Co. Ltd.		3,071
	115	Canadian Apartment Properties REIT		2,210
	113	Canadian REIT		3,516
	582	CanWest Global Communications Corp.*		5,074
	459	Cascades, Inc.		4,291
	91	CCL Industries, Class B		4,291
	197	Centerra Gold, Inc.*		2,499
	98	CHC Helicopter Corp., Class A		2,497
	276	CML Healthcare Income Fund		4,580
	84	Cogeco Cable, Inc.		4,356
	84	Cognos, Inc.*		4,218
	273	Compton Petroleum Corp.*		2,394
	66	Corus Entertainment, Inc., Class B		3,457
	138	Dorel Industries, Inc., Class B		4,716
	150	Dundee Corp., Class A*		3,443
	198	Ensign Energy Services, Inc.		3,542
	108	First Capital Realty, Inc.		2,918
	76	Flint Energy Services Ltd.*		1,947
	329	Fortis, Inc.		9,782
	80	Gildan Activewear, Inc.*		3,643
	263	H&R REIT		6,258
	458	Husky Injection Molding Systems Ltd.		3,940
	185	Industrial Alliance Insurance and Financial Services, Inc.		7,740
	169	InnVest REIT		2,116
	164	Kingsway Financial Services, Inc.		3,419
	269	Kinross Gold Corp.*		5,291
	104	Laurentian Bank of Canada		4,785
	273	Linamar Corp.		6,642
	43	MacDonald, Dettwiler and Associates Ltd.*		2,037
	200	MDS, Inc.		4,485
	232	Methanex Corp.		7,047
	103	MI Developments, Inc., Class A*		3,287
	148	Morguard REIT		2,097
	133	Northbridge Financial Corp.		5,181
	121	OPTI Canada, Inc.*		2,427
	144	Paramount Resources Ltd., Class A*		2,799
	498	Patheon, Inc.*		1,835
	200	Qlt, Inc.*		954
	120	Research In Motion Ltd.*		14,942
	268	RONA, Inc.*		6,024

Number of Shares			Value
		Common Stocks and Other Equity Interests (Continued)
	258	Rothmans, Inc.	$	6,704
	142	Russel Metals, Inc.		4,723
	181	Saputo, Inc.		11,043
	887	Saskatchewan Wheat Pool, Inc.*		11,927
	83	ShawCor Ltd., Class A		3,443
	426	Sherritt International Corp.		7,894
	160	SNC-Lavalin Group, Inc.		8,241
	116	Toromont Industries Ltd.		3,478
	302	Torstar Corp., Class B		6,232
	7	Transat AT, Inc., Class A		293
	101	Transat AT, Inc., Class B		4,241
	240	Transcontinental, Inc., Class A		5,256
	74	TSX Group, Inc.		3,969
	77	Western Zagros Resources Ltd.		292
	236	WestJet Airlines Ltd.*		4,962
				284,744
		China—3.9%
	2,425	Agile Property Holdings Ltd.		5,807
	12,653	Brilliance China Automotive Holdings Ltd.		3,379
	6,897	China Foods Ltd.		5,232
	703	China Mengniu Dairy Co. Ltd.		2,952
	1,728	China Merchants Holdings International Co. Ltd.		12,060
	5,358	China Overseas Land & Investment Ltd.		12,649
	5,863	China Power International Development Ltd.		3,109
	2,271	China Resources Land Ltd.		5,690
	2,733	China Resources Power Holdings Co.		10,102
	9,884	China Travel International Inv HK		7,843
	7,030	CITIC International Financial Holdings Ltd.		5,995
	8,738	CNPC Hong Kong Ltd.		7,046
	9,563	Denway Motors Ltd.		6,663
	5,360	Digital China Holdings Ltd.		3,513
	14,579	Guangzhou Investment Co. Ltd.		6,132
	785	Hengan International Group Co. Ltd.		3,043
	1,050	Hopson Development Holdings Ltd.		4,037
	1,728	Industrial and Commercial Bank of China (Asia) Ltd.		4,782
	1,113	Kowloon Development Co. Ltd.		3,446
	17,170	Lenovo Group Ltd.		19,340
	3,000	People's Food Holdings Ltd.		2,713
	3,769	Samson Holding Ltd.		1,143
	3,987	Shanghai Industrial Holdings Ltd.		23,353
	4,126	Shenzhen Investment Ltd.		3,939
	6,903	Sinofert Holdings Ltd.		6,448
	301	Sino-Forest Corp., Class A*		7,961
	5,323	Sinopec Kantons Holdings Ltd.		1,531
	72,302	TCL Communication Technology Holdings Ltd.*		2,752
	84,693	TCL Multimedia Technology Holdings Ltd.*		5,901
	2,610	Tianjin Development Holdings Ltd.		4,364
	5,127	Tingyi (Cayman Islands) Holding Corp.		7,805
	8,358	TPV Technology Ltd.		5,597
	10,000	United Food Holdings Ltd.		1,381
				207,708

See Notes to Financial Statements.

82

Schedule of Investments (Continued)

PowerShares FTSE RAFI Developed Markets ex-U.S. Small-Mid Portfolio

October 31, 2007

Number of Shares			Value
		Common Stocks and Other Equity Interests (Continued)
		Denmark—2.1%
	14	ALK-Abello A/S	$	3,011
	28	Almindelig Brand A/S*		1,853
	88	Auriga Industries, Class B		1,870
	15	Bang & Olufsen A/S, Class B		1,756
	57	Biomar Holding A/S		2,368
	269	BW Gas ASA		3,617
	38	Coloplast A/S, Class B		3,673
	74	D/S Norden A/S		9,106
	115	Dampskibsselskabet Torm A/S		4,777
	31	Dfds A/S		5,662
	267	DSV A/S		7,048
	81	East Asiatic Co. Ltd. A/S		6,517
	60	FLSmidth & Co. A/S		6,499
	210	GN Store Nord		2,232
	82	Jyske Bank A/S*		6,749
	67	NKT Holding A/S		7,296
	50	Novozymes A/S, Class B		5,435
	22	Rockwool International A/S, Class B		7,008
	81	Spar Nord Bank A/S		2,091
	72	Sydbank A/S		3,309
	22	Topdanmark A/S*		3,749
	78	Trygvesta A/S		6,177
	108	Vestas Wind Systems A/S*		9,621
	26	William Demant Holding*		2,380
				113,804
		Finland—1.6%
	197	Ahlstrom Oyj		4,959
	199	Amer Sports Oyj, Class A		5,286
	94	Cargotec Corp., Class B		5,802
	233	Finnair Oyj		3,934
	399	Huhtamaki Oyj		5,709
	205	Kemira GrowHow Oyj		3,618
	69	Konecranes Oyj		3,085
	56	Lassila & Tikanoja Oyj		1,912
	65	Lemminkainen Oyj		4,737
	119	Nokian Renkaat Oyj		4,476
	324	OKO Bank PLC, Class A		6,937
	424	Oriola-KD Oyj, Class B		1,975
	173	Orion Oyj, Class B		4,435
	398	Perlos Oyj		2,965
	206	Sponda Oyj		2,819
	135	Stockmann Oyj Abp, Class B		6,728
	247	TietoEnator Oyj		6,050
	159	Uponor Oyj		4,150
	183	YIT Oyj		5,626
				85,203
		France—4.1%
	347	Altran Technologies S.A.*		2,550
	123	Beneteau S.A.		3,499
	2,167	Beni Stabili SpA		2,740
	45	BioMerieux		5,019

Number of Shares			Value
		Common Stocks and Other Equity Interests (Continued)
	24	Bonduelle S.C.A.	$	3,116
	73	Bourbon S.A.		5,148
	362	Bull S.A.*		2,645
	138	Business Objects S.A.*		8,282
	310	Canal Plus		3,624
	37	Carbone Lorraine		3,307
	22	Cie Generale de Geophysique-Veritas*		7,198
	55	Clarins		4,753
	55	Club Mediterranee*		3,688
	39	Compagnie des Alpes		2,030
	83	Compagnie Plastic-Omnium S.A.		5,371
	119	Dassault Systemes S.A.		7,439
	492	Derichebourg*		5,111
	78	Etablissements Maurel et Prom		1,727
	30	Etam Developpement S.A.		1,770
	168	Eutelsat Communications*		4,533
	52	Fimalac		4,115
	12	Financiere Tradition		2,319
	30	Fonciere Des Regions		4,372
	129	Gemalto N.V.*		3,783
	24	Geodis		5,174
	93	Groupe Partouche*		1,964
	30	Groupe Steria S.C.A.		1,408
	20	Guyenne et Gascogne S.A.		3,729
	1,221	Havas S.A.		7,190
	72	Icade		5,306
	16	Iliad S.A.		1,672
	91	Ipsen		5,178
	59	IPSOS		2,154
	34	Kaufman & Broad S.A.		1,933
	24	LISI		2,826
	60	Manitou BF S.A.		3,393
	77	Mercialys S.A.		3,007
	77	Mobistar S.A.		6,959
	28	Neopost S.A.		3,248
	38	Nexity		2,523
	31	Norbert Dentressangle		3,722
	167	NRJ Group		2,179
	21	Pierre & Vacances		2,754
	7	Puma AG Rudolf Dassler Sport		2,993
	93	Remy Cointreau S.A.		7,138
	24	Rubis		2,292
	65	Saft Groupe S.A.		3,200
	405	SCOR SE		11,015
	25	Societe Immobiliere de Location pour l'Industrie et le Commerce		3,857
	20	Sperian Protection		2,801
	17	Spir Communication		2,017
	101	Teleperformance		4,014
	30	Trigano S.A.		1,570
	55	UbiSoft Entertainment S.A.*		4,511
	20	Vilmorin & Cie		2,903
	89	Zodiac S.A.		6,155
				218,924

See Notes to Financial Statements.

83

Schedule of Investments (Continued)

PowerShares FTSE RAFI Developed Markets ex-U.S. Small-Mid Portfolio

October 31, 2007

Number of Shares			Value
		Common Stocks and Other Equity Interests (Continued)
		Germany—3.5%
	110	Aareal Bank AG	$	5,693
	54	AWD Holding AG		1,797
	66	Bechtle AG		3,349
	1,000	Bosch Corp.		5,196
	140	Comdirect Bank AG		1,999
	31	Demag Cranes AG		1,766
	78	Deutsche Euroshop AG		3,120
	196	Deutz AG*		2,674
	106	Douglas Holding AG		6,737
	115	Duerr AG*		5,683
	29	ElringKlinger AG		3,189
	263	Epcos AG		5,289
	223	ERGO Previdenza SpA		1,308
	50	Fielmann AG		3,425
	23	Fuchs Petrolub AG		2,313
	55	GFK AG		2,214
	69	Indus Holding AG		2,575
	116	IVG Immobilien AG		5,236
	377	Jenoptik AG*		3,829
	234	Kloeckner-Werke AG		5,197
	82	Koenig & Bauer AG		2,847
	71	Krones AG		6,502
	130	KUKA AG		5,291
	79	Leoni AG		5,016
	479	Medion AG*		13,182
	262	Merchants Trust (The) PLC		2,754
	145	MLP AG		1,934
	21	MPC Muenchmeyer Petersen Capital AG		1,715
	173	MVV Energie AG		7,479
	201	Norddeutsche Affinerie AG		8,433
	69	Pfleiderer AG		1,822
	196	Praktiker Bau- und Heimwerkermaerkte AG		7,064
	102	Premiere AG*		2,081
	11	Rational AG		2,531
	145	Rhoen Klinikum AG		4,569
	96	SGL Carbon AG*		5,629
	46	Sixt AG		2,499
	27	Software AG		2,527
	65	Stada Arzneimittel AG		4,125
	112	Takkt AG		2,173
	875	Thiel Logistik AG*		3,342
	1,207	Thomas Cook Group PLC*		7,522
	107	United Internet AG		2,338
	36	Vossloh AG		4,242
	60	Wincor Nixdorf AG		5,950
				186,156
		Gibraltar—0.0%
	2,601	PartyGaming PLC*		1,688
		Hong Kong—4.2%
	683	Allied Group Ltd.		3,604
	1,856	Beijing Enterprises Holdings Ltd.		11,421

Number of Shares			Value
		Common Stocks and Other Equity Interests (Continued)
	976	Cafe de Coral Holdings Ltd.	$	1,967
	7,307	Champion REIT		4,431
	3,396	Chaoda Modern Agriculture Holdings Ltd.		3,071
	8,149	China Oriental Group Co. Ltd.		5,835
	4,586	Chinese Estates Holdings Ltd.		9,218
	1,115	Chong Hing Bank Ltd.		2,604
	2,594	Dah Sing Banking Group Ltd.		5,977
	597	Dah Sing Financial Group		5,665
	1,000	Elec & Eltek International Co. Ltd.		1,940
	6,964	First Pacific Co. Ltd.		5,265
	6,350	Fountain SET Hldgs		1,884
	2,888	Galaxy Entertainment Group Ltd.*		3,137
	5,753	Giordano International Ltd.		2,672
	8,462	Global Bio-Chem Technology Group Co. Ltd.		3,112
	1,701	Great Eagle Holdings Ltd.		7,023
	11,741	Guangdong Investment Ltd.		7,983
	3,874	HKR International Ltd.		3,954
	175	Hong Kong Aircraft Engineering Co. Ltd.		4,428
	2,587	Hongkong and Shanghai Hotels (The) Ltd.		4,766
	17,058	Hongkong Chinese Ltd.		3,961
	4,135	Hopewell Highway Infrastructure Ltd.		3,884
	1,414	Hopewell Holdings Ltd.		7,279
	8,147	I-CABLE Communications Ltd.		1,776
	1,000	Jardine Cycle & Carriage Ltd.		14,496
	7,754	Johnson Electric Holdings Ltd.		4,332
	985	Kingboard Chemical Holdings Ltd.		6,418
	1,000	Mandarin Oriental International Ltd.		2,490
	8,087	New World China Land Ltd.		9,422
	13,386	Oriental Press Group		1,917
	3,441	Pacific Basin Shipping Ltd.		7,601
	1,186	Road King Infrastructure		2,384
	5,968	SCMP Group Ltd.		1,925
	2,602	Shangri-La Asia Ltd.		8,258
	1,033	Shui On Construction and Materials Ltd.		3,985
	1,985	Shun Tak Holdings Ltd.		3,104
	9,240	Sinolink Worldwide Holdings		3,100
	4,639	SmarTone Telecommunications Holding Ltd.		5,662
	8,711	Solomon Systech International Ltd.		787
	3,332	Techtronic Industries Co.		3,572
	675	Television Broadcasts Ltd.		4,346
	4,278	Texwinca Holdings Ltd.		3,753
	289	VTech Holdings Ltd.		2,446
	1,000	Wheelock Properties (S) Ltd.		1,691
	478	Wing Hang Bank Ltd.		5,594
	504	Wing Lung Bank Ltd.		5,209
	1,250	Wing On Co. International Ltd.		2,184
				221,533
		India—0.2%
	191	Vedanta Resources PLC		8,729
		Ireland—0.7%
	157	C&C Group PLC		1,254
	143	DCC PLC		3,927

See Notes to Financial Statements.

84

Schedule of Investments (Continued)

PowerShares FTSE RAFI Developed Markets ex-U.S. Small-Mid Portfolio

October 31, 2007

Number of Shares			Value
		Common Stocks and Other Equity Interests (Continued)
	47	FBD Holdings PLC	$	1,683
	2,617	Fyffes PLC		3,597
	813	Glanbia PLC		5,469
	279	Grafton Group PLC		3,104
	648	Greencore Group PLC		4,406
	132	Iaws Group PLC		3,103
	1,506	Independent News & Media PLC		5,512
	123	Kingspan Group PLC		2,892
	419	United Drug PLC		2,091
	31,997	Waterford Wedgwood PLC*		1,296
				38,334
		Italy—3.2%
	158	AcegasAps SpA		1,895
	179	Ansaldo STS SpA*		2,603
	230	Astaldi SpA		2,125
	386	Autogrill SpA		7,701
	172	Autostrada Torino-Milano SpA		4,230
	46	Banca Italease SpA		968
	102	Banca Popolare dell'Etruria e del Lazio		1,876
	206	Banco di Desio e della Brianza SpA		2,325
	157	Brembo SpA		2,199
	322	Bulgari SpA		5,031
	398	Caltagirone Editore SpA		2,809
	324	Caltagirone SpA		3,445
	1,040	Cam Finanziaria SpA		2,580
	283	Cementir SpA		2,805
	4,004	Cofide SpA		7,322
	395	Credito Artigiano SpA		2,286
	935	Cremonini SpA		2,864
	109	Danieli & Co. RCN SpA		3,200
	44	Danieli & Co. SpA		1,725
	407	Davide Campari-Milano SpA		4,366
	87	Esprinet SpA		1,485
	156	Finnlines Oyj		3,519
	428	Gemina SpA		1,664
	1,230	Gruppo Editoriale L'Espresso SpA		6,206
	1,665	Hera SpA		7,473
	26	Hugo Boss AG		1,700
	643	Impregilo SpA*		5,154
	375	Indesit Co. SpA		6,641
	239	Interpump Group SpA		2,720
	1,003	Iride SpA		3,816
	1,428	KME Group SpA*		4,008
	9	Lenzing AG		5,207
	214	Marazzi Group SpA		2,734
	168	MARR SpA		1,920
	93	Permasteelisa SpA		2,435
	376	Piccolo Credito Valtellinese Scarl		5,219
	72	Pirelli & C Real Estate SpA		3,555
	1,177	RCS MediaGroup SpA		6,424
	318	Recordati SpA		3,181
	166	Risanamento SpA		1,225

Number of Shares			Value
		Common Stocks and Other Equity Interests (Continued)
	809	Safilo Group SpA	$	3,432
	899	Sirti SpA		3,505
	464	Societa Iniziative Autostradali e Servizi SpA		7,371
	338	Sogefi SpA		3,249
	1,293	Sorin SpA*		3,272
	9,092	Telecom Italia Media SpA		3,604
	584	Tiscali SpA*		2,108
	27	Tod's SpA		2,263
				169,445
		Japan—32.7%
	1,000	Achilles Corp.		1,527
	300	ADEKA Corp.		2,990
	100	Aderans Holdings Co. Ltd.		1,606
	300	Aeon Credit Service Co. Ltd.		4,588
	200	Aeon Mall Co. Ltd.		5,170
	200	Aica Kogyo Co. Ltd.		2,038
	1,000	Aichi Machine Industry Co. Ltd.		2,472
	1,000	Aichi Steel Corp.		5,612
	200	Aisan Industry Co. Ltd.		2,602
	1,000	Akita Bank (The) Ltd.		4,580
	100	Alpen Co. Ltd.		1,422
	200	Alpine Electronics, Inc.		3,208
	200	Amano Corp.		2,493
	1,000	Ando Corp.		1,596
	900	AOC Holdings, Inc.		13,671
	100	AOKI Holdings, Inc.		1,943
	200	Aoyama Trading Co. Ltd.		5,196
	200	Arcs Co. Ltd.		2,984
	100	Arrk Corp.		702
	100	Asatsu-DK, Inc.		3,340
	100	Autobacs Seven Co. Ltd.		2,312
	100	Avex Group Holdings, Inc.		1,446
	1,000	Awa Bank (The) Ltd.		5,352
	100	Bank of Iwate (The) Ltd.		6,107
	1,000	Bank of Kyoto (The) Ltd.		12,707
	1,000	Bank of Nagoya (The) Ltd.		7,356
	100	Bank of the Ryukyus Ltd.		1,220
	150	Belluna Co. Ltd.		1,543
	1,000	Best Denki Co. Ltd.		7,243
	100	Canon Electronics, Inc.		2,494
	200	Canon Finetech, Inc.		3,340
	100	Capcom Co. Ltd.		2,845
	100	Cawachi Ltd.		2,698
	1,000	Central Finance Co. Ltd.		2,906
	1,000	Central Glass Co. Ltd.		4,710
	1,000	Cerebos Pacific Ltd.		2,927
	100	Chiyoda Co. Ltd.		1,482
	100	Chofu Seisakusho Co. Ltd.		1,635
	2,000	Chori Co. Ltd.*		2,411
	200	Chudenko Corp.		4,068
	1,000	Chuetsu Pulp & Paper Co. Ltd.		2,030
	1,000	Chugoku Bank (The) Ltd.		14,476

See Notes to Financial Statements.

85

Schedule of Investments (Continued)

PowerShares FTSE RAFI Developed Markets ex-U.S. Small-Mid Portfolio

October 31, 2007

Number of Shares			Value
		Common Stocks and Other Equity Interests (Continued)
	300	Circle K Sunkus Co. Ltd.	$	4,577
	2,000	Clarion Co. Ltd.		3,574
	300	Cleanup Corp.		2,181
	200	CMK Corp.		1,983
	1	Coca-Cola Central Japan Co. Ltd.		7,434
	300	Coca-Cola West Holdings Co. Ltd.		6,935
	100	Corona Corp.		1,269
	200	CSK Holdings Corp.		7,789
	300	Culture Convenience Club Co. Ltd.		2,001
	200	Daibiru Corp.		2,654
	1,000	Daido Steel Co. Ltd.		6,757
	1,000	Daiichi Chuo Kisen Kaisha		8,240
	1,000	Daiken Corp.		2,299
	1,000	Daikyo, Inc.		3,392
	1,000	Daishi Bank (The) Ltd.		4,346
	300	DCM Japan Holdings Co. Ltd.		2,308
	1,000	Denki Kagaku Kogyo Kabushiki Kaisha		5,846
	100	Don Quijote Co. Ltd.		2,025
	1,000	Dowa Holdings Co. Ltd.		11,563
	100	Dydo Drinco, Inc.		3,903
	900	EDION Corp.		10,258
	100	Eizo Nanao Corp.		3,331
	100	Elpida Memory, Inc.*		3,400
	100	Exedy Corp.		3,270
	200	Fancl Corp.		2,417
	100	FCC Co. Ltd.		1,865
	100	FP Corp.		2,854
	200	Fuji Co. Ltd.		3,145
	1,000	Fuji Fire & Marine Insurance (The) Co. Ltd.		3,600
	900	Fuji Oil Co. Ltd.		6,362
	100	FUJI SOFT, INC.		1,969
	200	Fujitsu Business Systems Ltd.		3,055
	1,000	Fujitsu General Ltd.*		6,748
	1,000	Fukuda Corp.		3,504
	1,000	Fukui Bank (The) Ltd.		2,958
	1,000	Fukuyama Transporting Co. Ltd.		4,441
	100	Funai Electric Co. Ltd.		4,224
	1,000	Furukawa Co. Ltd.		2,229
	1,000	Furukawa-Sky Aluminum Corp.		3,209
	200	Futaba Corp.		4,432
	200	Futaba Industrial Co. Ltd.		5,586
	1	Geo Corp.		2,377
	200	Glory Ltd.		6,575
	90	Goldcrest Co. Ltd.		4,239
	1,000	GS Yuasa Corp.		2,195
	20	Gulliver International Co. Ltd.		1,131
	1,000	Gunma Bank (The) Ltd.		7,069
	1,000	Gunze Ltd.		4,805
	1,000	H2O Retailing Corp.		8,319
	180	Hakuhodo DY Holdings, Inc.		13,038
	100	Hakuto Co. Ltd.		1,366
	100	Hamamatsu Photonics KK		3,131

Number of Shares			Value
		Common Stocks and Other Equity Interests (Continued)
	1,500	Haseko Corp.*	$	3,578
	1,400	Heiwa Corp.		15,667
	300	Heiwado Co. Ltd.		5,074
	1,000	Higo Bank (The) Ltd.		6,913
	100	Hikari Tsushin, Inc.		3,027
	1,000	Hiroshima Bank (The) Ltd.		5,404
	100	HIS Co. Ltd.		1,895
	100	Hisamitsu Pharmaceutical Co., Inc.		2,741
	300	Hitachi Capital Corp.		3,968
	300	Hitachi Construction Machinery Co. Ltd.		12,178
	100	Hitachi Information Systems Ltd.		2,294
	200	Hitachi Koki Co. Ltd.		3,548
	900	Hitachi Maxell Ltd.		10,360
	1,000	Hitachi Plant Technologies Ltd.		4,554
	200	Hitachi Software Engineering Co. Ltd.		3,851
	900	Hitachi Transport System Ltd.		10,530
	10,000	Hitachi Zosen Corp.*		16,567
	1,000	Hodogaya Chemical Co. Ltd.		2,984
	1,000	Hokkaido Gas Co. Ltd.		2,576
	1,000	Hokkan Holdings Ltd.		3,227
	1,000	Hokkoku Bank (The) Ltd.		4,745
	1,000	Hokuetsu Bank (The) Ltd.		2,359
	1,000	Hokuetsu Paper Mills Ltd.		4,736
	1,000	Hokuhoku Financial Group, Inc.		3,062
	100	Horiba Ltd.		4,424
	300	Hosiden Corp.		5,244
	300	House Foods Corp.		4,733
	1,000	Hyakugo Bank (The) Ltd.		5,959
	100	Ibiden Co. Ltd.		8,440
	1,000	Ichikoh Industries Ltd.		2,524
	100	Iida Home Max		1,140
	200	Iino Kaiun Kaisha Ltd.		2,793
	100	Inaba Denki Sangyo Co. Ltd.		3,713
	1,000	Inabata & Co. Ltd.		6,584
	100	INTEC Holdings Ltd.		1,456
	1,000	Iseki & Co. Ltd.		1,891
	2,000	Ishihara Sangyo Kaisha Ltd.*		3,175
	100	Ito En Ltd.		2,108
	2,200	Itochu Enex Co. Ltd.		15,993
	100	Itochu Techno-Solutions Corp.		3,548
	200	Itochu-Shokuhin Co. Ltd.		5,551
	1,000	Itoham Foods, Inc.		3,903
	2,000	Iwatani International Corp.		6,454
	1,000	Iyo Bank (The) Ltd.		9,740
	300	Izumi Co. Ltd.		4,465
	1,000	Izumiya Co. Ltd.		4,970
	1,000	Jaccs Co. Ltd.		2,602
	200	Japan Airport Terminal Co. Ltd.		3,886
	100	Japan Petroleum Exploration Co. Ltd.		7,581
	1,000	Japan Pulp & Paper Co. Ltd.		3,687
	1,000	Japan Radio Co. Ltd.		3,669
	200	Japan Securities Finance Co. Ltd.		2,089

See Notes to Financial Statements.

86

Schedule of Investments (Continued)

PowerShares FTSE RAFI Developed Markets ex-U.S. Small-Mid Portfolio

October 31, 2007

Number of Shares			Value
		Common Stocks and Other Equity Interests (Continued)
	1,000	J-Oil Mills, Inc.	$	2,741
	1,000	Juroku Bank (The) Ltd.		6,029
	100	Kadokawa Group Holdings, Inc.		2,802
	200	Kaga Electronics Co. Ltd.		2,925
	200	Kagome Co. Ltd.		3,170
	1,000	Kagoshima Bank (The) Ltd.		6,905
	1,000	Kamei Corp.		5,413
	1,000	Kamigumi Co. Ltd.		8,102
	1,000	Kansai Paint Co. Ltd.		7,486
	1,000	Kasumi Co. Ltd.		5,430
	900	Kato Sangyo Co. Ltd.		10,642
	1,800	Katokichi Co. Ltd.		9,602
	1,000	Kayaba Industry Co. Ltd.		5,742
	1,000	Keihan Electric Railway Co. Ltd.		3,990
	200	Keihin Corp.		3,825
	1,000	Keisei Electric Railway Co. Ltd.		5,482
	1,000	Keiyo Bank (The) Ltd.		5,135
	900	Keiyo Co. Ltd.		5,301
	2,000	Kenwood Corp.		2,862
	100	Kintetsu World Express, Inc.		3,556
	100	Kobayashi Pharmaceutical Co. Ltd.		3,192
	100	Koei Co. Ltd.		1,891
	300	Kohnan Shoji Co. Ltd.		4,851
	1,400	Kojima Co. Ltd.		8,440
	1,000	Kokuyo Co. Ltd.		8,777
	100	Komeri Co. Ltd.		2,537
	200	Komori Corp.		5,239
	100	Kose Corp.		2,559
	100	K's Holdings Corp.		2,160
	3,000	Kumagai Gumi Co. Ltd.		4,528
	1,000	Kurabo Industries Ltd.		2,394
	1,000	KUREHA Corp.		4,545
	1,000	Kurimoto Ltd.		3,227
	200	Kurita Water Industries Ltd.		6,627
	100	Kuroda Electric Co. Ltd.		1,599
	1,000	Kyoden Co. Ltd.		2,680
	1,000	Kyodo Printing Co. Ltd.		3,175
	1,000	Kyokuyo Co. Ltd.		1,804
	1,000	Kyudenko Corp.		5,699
	300	Life Corp.		3,664
	200	Lintec Corp.		3,903
	1,000	Lion Corp.		4,693
	100	Mabuchi Motor Co. Ltd.		6,731
	100	Macnica, Inc.		2,255
	200	Makita Corp.		9,559
	100	Mandom Corp.		2,481
	100	Marubun Corp.		850
	1,000	Marudai Food Co. Ltd.		2,481
	1,000	Maruetsu (The), Inc.		6,714
	200	Maruichi Steel Tube Ltd.		5,656
	1,000	Meidensha Corp.		2,897
	100	Meitec Corp.		2,941

Number of Shares			Value
		Common Stocks and Other Equity Interests (Continued)
	100	Meiwa Estate Co. Ltd.	$	1,141
	1,000	Michinoku Bank (The) Ltd.		3,001
	300	Mikuni Coca-Cola Bottling Co. Ltd.		3,328
	1,000	Minato Bank (The) Ltd.		2,264
	1,000	Minebea Co. Ltd.		6,896
	100	Ministop Co. Ltd.		1,804
	100	Miraca Holdings, Inc.		2,346
	100	Misawa Homes Co. Ltd.*		978
	100	MISUMI Group, Inc.		1,682
	2,000	Mitsubishi Paper Mills Ltd.		3,955
	2,000	Mitsubishi UFJ Nicos Co. Ltd.		3,834
	1,500	Mitsui Mining Co. Ltd.*		6,089
	200	Mitsumi Electric Co. Ltd.		9,108
	300	Mitsuuroko Co. Ltd.		2,134
	100	Miura Co. Ltd.		3,114
	1,000	Mizuho Investors Securities Co. Ltd.		1,761
	1,000	Mizuho Trust & Banking Co. Ltd.		1,770
	100	Mori Seiki Co. Ltd.		2,502
	1,000	Morinaga & Co. Ltd.		2,116
	100	Musashi Seimitsu Industry Co. Ltd.		3,209
	100	Musashino Bank (The) Ltd.		4,701
	1,000	Nachi-Fujikoshi Corp.		4,910
	1,000	Nakayama Steel Works Ltd.		2,385
	1,000	Nanto Bank (The) Ltd.		5,213
	300	NEC Fielding Ltd.		3,552
	100	NEC Mobiling Ltd.		1,569
	200	NEC Networks & System Integration Corp.		2,163
	2	NET One Systems Co. Ltd.		2,429
	1,000	NHK Spring Co. Ltd.		8,527
	1,000	Nice Holdings, Inc.		3,175
	300	Nichicon Corp.		3,562
	100	Nichiha Corp.		920
	100	Nichii Gakkan Co.		1,660
	100	Nidec Copal Corp.		1,240
	100	Nifco, Inc.		2,329
	900	Nihon Unisys Ltd.		12,225
	1,000	Nihon Yamamura Glass Co. Ltd.		2,385
	1,000	Nippo Corp.		8,162
	1,000	Nippon Flour Mills Co. Ltd.		3,660
	1,000	Nippon Paint Co. Ltd.		5,543
	1,000	Nippon Road (The) Co. Ltd.		1,770
	1,000	Nippon Sharyo Ltd.		1,856
	200	Nippon Signal Co. Ltd.		1,197
	1,000	Nippon Soda Co. Ltd.		5,005
	2,300	Nippon Suisan Kaisha Ltd.		11,412
	500	Nippon Yakin Kogyo Co. Ltd.		4,719
	200	NIS Group Co. Ltd.		697
	1,000	Nishi-Nippon City Bank (The) Ltd.		2,941
	1,000	Nishi-Nippon Railroad Co. Ltd.		3,634
	100	Nishio Rent All Co. Ltd.		1,479
	1,000	Nissan Shatai Co. Ltd.		7,980
	1,000	Nissay Dowa General Insurance Co. Ltd.		5,656

See Notes to Financial Statements.

87

Schedule of Investments (Continued)

PowerShares FTSE RAFI Developed Markets ex-U.S. Small-Mid Portfolio

October 31, 2007

Number of Shares			Value
		Common Stocks and Other Equity Interests (Continued)
	900	Nissen Holdings Co. Ltd.	$	5,894
	100	Nissha Printing Co. Ltd.		2,862
	1,000	Nisshin Oillio Group (The) Ltd.		4,276
	1,000	Nissin Corp.		3,548
	100	Nissin Kogyo Co. Ltd.		2,581
	50	Nitori Co. Ltd.		2,277
	1,000	Nitto Boseki Co. Ltd.		2,967
	100	Nitto Kogyo Corp.		1,456
	1,000	NOF Corp.		4,146
	1,000	Noritake Co. Ltd.		4,597
	200	Noritsu Koki Co. Ltd.		4,086
	200	Noritz Corp.		3,000
	100	NS Solutions Corp.		3,062
	2	NTT Urban Development Corp.		4,459
	10	Obic Co. Ltd.		2,001
	1,000	Ogaki Kyoritsu Bank (The) Ltd.		5,569
	100	Okinawa Electric Power (The) Co., Inc.		5,222
	1,000	Okumura Corp.		5,274
	300	Olympic Corp.		1,999
	1,000	OMC Card, Inc.		3,652
	4,500	Orient Corp.		6,284
	100	Osaka Steel Co. Ltd.		1,544
	100	OSG Corp.		1,258
	100	Otsuka Corp.		9,550
	2	Pacific Golf Group International Holdings KK*		1,908
	1,000	PanaHome Corp.		6,445
	100	Paramount Bed Co. Ltd.		1,363
	300	Parco Co, Ltd.		4,169
	200	Paris Miki, Inc.		2,623
	1	Pasona, Inc.		1,284
	4,500	Penta-Ocean Construction Co. Ltd.*		7,924
	100	Plenus Co. Ltd.		1,512
	300	Pocket Card Co. Ltd.		1,231
	3,000	Prima Meat Packers Ltd.*		3,227
	1,000	Rengo Co. Ltd.		7,182
	200	Renown, Inc.*		1,520
	100	Resorttrust, Inc.		2,182
	200	Rinnai Corp.		6,193
	100	Roland Corp.		3,027
	200	Royal Holdings Co. Ltd.		2,323
	200	Ryosan Co. Ltd.		4,970
	200	Ryoyo Electro Corp.		2,795
	1,000	Sagami Railway Co. Ltd.		3,513
	2,000	Saibu Gas Co. Ltd.		4,684
	100	Saizeriya Co. Ltd.		1,748
	200	Sakata Seed Corp.		2,666
	500	Sala Corp.		2,615
	100	San-A Co. Ltd.		3,175
	1,000	San-Ai Oil Co. Ltd.		4,268
	1,000	Sanden Corp.		5,959
	100	Sangetsu Co. Ltd.		2,060
	1,000	San-in Godo Bank (The) Ltd.		8,986

Number of Shares			Value
		Common Stocks and Other Equity Interests (Continued)
	1,000	Sanki Engineering Co. Ltd.	$	5,196
	2,000	Sankyo-Tateyama Holdings, Inc.		2,741
	1,000	Sankyu, Inc.		5,647
	200	Sanrio Co. Ltd.		1,891
	200	Sanshin Electronics Co. Ltd.		2,807
	100	Santen Pharmaceutical Co. Ltd.		2,342
	1,000	Sanwa Holdings Corp.		5,257
	540	Sanyo Shinpan Finance Co. Ltd.		16,862
	1	Sapporo Hokuyo Holdings, Inc.		10,235
	100	Satori Electric Co. Ltd.		1,219
	14	SBI Holdings, Inc.		4,384
	1,000	Senko Co. Ltd.		3,062
	200	Senshukai Co. Ltd.		2,070
	30	SFCG Co. Ltd.		4,942
	1,000	Shiga Bank (The) Ltd.		7,069
	1,000	Shikoku Bank (The) Ltd.		4,007
	100	Shima Seiki Manufacturing Ltd.		5,118
	100	Shimachu Co. Ltd.		2,862
	200	Shimano, Inc.		7,252
	200	Shin-Etsu Polymer Co. Ltd.		1,617
	1,400	Shinki Co. Ltd.		1,324
	200	Shinko Electric Industries		4,554
	1,000	Shinko Securities Co. Ltd.		5,118
	1,000	Shiroki Corp.		2,368
	500	Shizuoka Gas Co. Ltd.		2,468
	200	Showa Corp.		1,936
	1,000	Showa Sangyo Co. Ltd.		2,290
	4,500	Snow Brand Milk Products Co. Ltd.		13,194
	300	Softbank Corp.		6,948
	300	Sohgo Security Services Co. Ltd.		4,968
	100	Square Enix Co. Ltd.		3,279
	300	Stanley Electric Co. Ltd.		6,623
	1,000	Starzen Co. Ltd.		2,316
	100	Sumisho Computer Systems Corp.		1,800
	1,000	Sumitomo Bakelite Co. Ltd.		6,081
	1,000	Sumitomo Light Metal Industries Ltd.		1,709
	2,000	Sumitomo Osaka Cement Co. Ltd.		4,962
	20	Sumitomo Real Estate Sales Co. Ltd.		1,440
	100	Sundrug Co. Ltd.		2,359
	2,000	SWCC Showa Holdings Co. Ltd.		2,915
	100	T Hasegawa Co. Ltd.		1,761
	200	Tachi-S Co. Ltd.		1,515
	200	Taikisha Ltd.		2,427
	1,000	Taisei Rotec Corp.		1,622
	1,000	Taiyo Nippon Sanso Corp.		8,874
	100	Takamatsu Corp.		1,451
	1,000	Takara Holdings, Inc.		5,846
	1,000	Takara Standard Co. Ltd.		5,630
	2,000	Tekken Corp.		2,620
	1	Telepark Corp.		1,093
	2	Tempstaff Co. Ltd.		2,463
	200	THK Co. Ltd.		4,380

See Notes to Financial Statements.

88

Schedule of Investments (Continued)

PowerShares FTSE RAFI Developed Markets ex-U.S. Small-Mid Portfolio

October 31, 2007

Number of Shares			Value
		Common Stocks and Other Equity Interests (Continued)
	200	TIS, Inc.	$	3,464
	100	TKC Corp.		1,882
	3,000	Toa Corp.*		3,331
	1,000	Toagosei Co. Ltd.		3,487
	9,000	Tobishima Corp.*		4,216
	1,000	Toho Bank (The) Ltd.		3,843
	300	Toho Co. Ltd.		5,959
	1,000	Toho Co. Ltd.		3,426
	300	Toho Pharmaceutical Co. Ltd.		5,257
	200	Tokai Rika Co. Ltd.		5,846
	200	Tokai Rubber Industries Ltd.		3,912
	1,000	Tokyo Dome Corp.*		6,428
	100	Tokyo Ohka Kogyo Co. Ltd.		2,047
	1	Tokyo Star Bank (The) Ltd.		2,949
	300	Tokyo Steel Manufacturing Co. Ltd.		4,130
	100	Tokyo Tomin Bank (The) Ltd.		3,305
	1,080	Tokyu Construction Co. Ltd.		5,377
	1,000	Tokyu Land Corp.		10,269
	1,000	Tokyu Store Chain Co. Ltd.		4,094
	100	Tomen Electronics Corp.		1,430
	1,000	Tomoku Co. Ltd.		2,090
	1,000	Tonami Transportation Co. Ltd.		2,654
	900	Toppan Forms Co. Ltd.		8,805
	200	Topre Corp.		2,250
	1,000	Topy Industries Ltd.		2,975
	100	Torii Pharmaceutical Co. Ltd.		1,761
	1,000	Toshiba TEC Corp.		6,358
	100	Touei Housing Corp.		1,009
	500	Towa Real Estate Development Co. Ltd.*		1,288
	3,000	Toyo Construction Co. Ltd.*		2,498
	1,000	Toyo Ink Manufacturing Co. Ltd.		3,409
	1,000	Toyo Kohan Co. Ltd.		5,534
	1,000	Toyo Tire & Rubber Co. Ltd.		5,812
	200	Toyota Boshoku Corp.		6,506
	100	Trusco Nakayama Corp.		1,466
	100	Tsumura & Co.		1,783
	3	TV Asahi Corp.		5,204
	100	Ulvac, Inc.		3,886
	100	Unicharm Corp.		5,942
	300	Unipres Corp.		2,417
	3,000	Unitika Ltd.		3,773
	200	Ushio, Inc.		4,094
	90	USS Co. Ltd.		5,871
	200	Valor Co. Ltd.		2,224
	300	Vital-net, Inc.		1,861
	2,000	Wakachiku Construction Co. Ltd.*		1,787
	100	Xebio Co. Ltd.		2,941
	27	Yahoo! Japan Corp.		11,968
	200	Yakult Honsha Co. Ltd.		4,615
	100	Yamatake Corp.		3,114
	100	Yamato Kogyo Co. Ltd.		4,615
	900	Yamazen Corp.		4,739
	100	Yaoko Co. Ltd.		2,594

Number of Shares			Value
		Common Stocks and Other Equity Interests (Continued)
	300	Yellow Hat Ltd.	$	2,157
	1,000	Yodogawa Steel Works Ltd.		5,369
	2	Yoshinoya Holdings Co. Ltd.		3,279
	2,000	Yuasa Trading Co. Ltd.		3,036
	1,000	Yurtec Corp.		5,734
	100	Yusen Air & Sea Service Co. Ltd.		2,021
				1,731,084
		Korea, Republic of—0.3%
	6,000	STX Pan Ocean Co. Ltd.		15,240
		Liechtenstein—0.1%
	53	Liechtenstein Landesbank		5,099
	11	Verwalt & Privat-Bank AG		2,876
				7,975
		Luxembourg—0.2%
	1,788	COLT Telecom Group S.A.*		6,704
	75	Generale de Sante		3,274
				9,978
		Malaysia—0.1%
	2,000	BIL International Ltd.		1,905
	4,783	Public Financial Holdings Ltd.		3,116
				5,021
		Netherlands—2.7%
	108	Aalberts Industries N.V.		2,595
	33	Arcadis N.V.		2,680
	94	ASM International N.V.		2,652
	727	ASM Pacific Technology Ltd.		5,665
	123	Boskalis Westminster CVA		7,454
	110	Draka Holding		4,771
	61	Eurocommercial Properties N.V. CVA		3,590
	74	Fugro N.V. CVA		6,477
	603	Getronics N.V.		5,461
	91	Heijmans N.V. CVA		3,524
	75	Hunter Douglas N.V.		6,992
	204	Imtech N.V.		6,304
	44	Intervest Offices		1,702
	56	KAS Bank N.V. CVA		2,106
	110	Koninklijke Vopak N.V.		6,285
	451	Koninklijke Wessanen N.V.		7,601
	1,708	Laurus N.V.*		10,897
	97	Nutreco Holding N.V.		6,617
	148	OPG Groep N.V. CVA		5,115
	134	Qiagen N.V.*		3,135
	154	SBM Offshore N.V.		5,918
	78	Sligro Food Group N.V.		2,987
	26	Smit Internationale N.V.		2,512
	92	Stork N.V.		6,252
	135	Univar N.V.		10,593
	74	USG People N.V.		2,242
	378	Van der Moolen Holding N.V.		1,969
	93	Vastned Offices/Industrial		3,288

See Notes to Financial Statements.

89

Schedule of Investments (Continued)

PowerShares FTSE RAFI Developed Markets ex-U.S. Small-Mid Portfolio

October 31, 2007

Number of Shares			Value
		Common Stocks and Other Equity Interests (Continued)
	53	Vastned Retail N.V.	$	4,545
	116	Wegener N.V. CVA		2,831
				144,760
		New Zealand—0.8%
	3,797	Air New Zealand Ltd.		6,191
	1,907	Auckland International Airport Ltd.		4,210
	1,048	Fisher & Paykel Appliances Holdings Ltd.		2,829
	738	Fisher & Paykel Healthcare Corp.		1,845
	894	Fletcher Building Ltd.		8,155
	3,760	Goodman Fielder Ltd.		7,318
	1,092	Sky City Entertainment Group Ltd.		4,510
	458	Sky Network Television Ltd.		2,029
	1,136	Tower Ltd.*		1,966
	1,696	Vector Ltd.		3,118
	654	Warehouse Group Ltd.		2,842
				45,013
		Norway—1.1%
	335	Aker Yards A/S		5,515
	116	Cermaq ASA		1,770
	97	Ekornes ASA		2,033
	48	Fred Olsen Energy ASA		2,431
	143	Golar LNG Ltd.		3,647
	191	Hafslund ASA, Class B		5,633
	131	Odfjell SE, Class B		2,077
	239	Petroleum Geo-Services ASA		7,004
	198	ProSafe SE		3,496
	93	Schibsted ASA		5,261
	285	Sparebank 1 SR Bank		3,648
	185	Sparebanken Midt-Norge		2,642
	80	TGS Nopec Geophysical Co. ASA*		1,335
	225	Tomra Systems ASA		1,628
	3,600	Total Access Communication Public Co. Ltd.*		4,320
	334	Veidekke ASA		3,500
				55,940
		Portugal—0.6%
	292	Banif, SGPS S.A.		2,167
	1,250	Jeronimo Martins, SGPS S.A.		9,259
	358	Mota Engil, SGPS S.A.		2,952
	231	PT Multimedia Servicos de Telecomunicacoes e Multimedia, SGPS S.A.		3,138
	858	SAG GEST-Solucoes Automovel Globais, SGPS S.A.		3,165
	320	Semapa - Sociedade de Investimento e Gestao, SGPS S.A.		5,185
	287	Sonae Industria-SGPS S.A.*		3,475
				29,341
		Singapore—2.8%
	2,000	Allgreen Properties Ltd.		2,181
	1,000	Ascendas REIT		1,788
	2,000	Ascott Group (The) Ltd.		2,264
	2,551	Australand Property Group		5,627

Number of Shares			Value
		Common Stocks and Other Equity Interests (Continued)
	663	BW Offshore Ltd.*	$	2,951
	1,000	CapitaCommercial Trust		1,857
	2,000	CapitaMall Trust		5,053
	5,000	Chartered Semiconductor Manufacturing Ltd.*		3,934
	5,000	ComfortDelgro Corp. Ltd.		6,661
	450	Creative Technology Ltd.		1,879
	2,000	Fortune REIT		1,510
	2,000	Hong Leong Asia Ltd.		5,246
	1,000	Hotel Properties Ltd.		2,996
	2,000	MobileOne Ltd.		2,899
	2,000	Olam International Ltd.		4,832
	6,111	Pacific Century Premium Developments Ltd.		2,081
	13,000	Pacific Century Regional Developments Ltd.*		3,275
	1,000	Parkway Holdings Ltd.		2,871
	2,000	SembCorp. Marine Ltd.		6,129
	1,000	SIA Engineering Co. Ltd.		3,272
	3,000	Singapore Airport Terminal Services Ltd.		6,212
	1,000	Singapore Exchange Ltd.		10,767
	1,000	Singapore Land Ltd.		6,695
	2,000	Singapore Petroleum Co. Ltd.		11,320
	6,000	Singapore Post Ltd.		5,053
	5,000	SMRT Corp. Ltd.		6,074
	1,557	SP AusNet		1,876
	2,000	StarHub Ltd.		4,307
	1,000	STATS ChipPAC Ltd.*		1,132
	2,000	Suntec REIT		2,499
	1,000	United Industrial Corp. Ltd.		2,140
	2,000	UOB-Kay Hian Holdings Ltd.		3,341
	2,000	UOL Group Ltd.		7,248
	1,000	Venture Corp. Ltd.		9,594
				147,564
		Spain—2.0%
	111	Abengoa S.A.		4,537
	171	Antena 3 de Television S.A.		3,028
	57	Banco de Valencia S.A.		3,251
	102	Banco Guipuzcoano S.A.		2,090
	163	Banco Pastor S.A.		2,759
	177	Campofrio Alimentacion S.A.*		3,091
	45	Cementos Portland Valderrivas S.A.		5,612
	105	Cia de Distribucion Integral Logista S.A.		8,180
	154	Cie Automotive S.A.		1,849
	279	Cintra Concesiones de Infraestructuras de Transporte S.A.		4,868
	66	Corp. Financiera Alba		4,937
	216	Gamesa Corporacion Tecnologica S.A.		10,936
	92	Grupo Catalana Occidente S.A.		3,482
	286	Grupo Empresarial Ence S.A.		3,629
	144	Indra Sistemas S.A.		4,173
	188	NH Hoteles S.A.*		4,205
	115	Obrascon Huarte Lain S.A.		5,193
	259	Promotora de Informaciones S.A.		5,066
	94	Prosegur Cia de Seguridad S.A.		3,658

See Notes to Financial Statements.

90

Schedule of Investments (Continued)

PowerShares FTSE RAFI Developed Markets ex-U.S. Small-Mid Portfolio

October 31, 2007

Number of Shares			Value
		Common Stocks and Other Equity Interests (Continued)
	108	Sogecable S.A.*	$	4,355
	218	Sol Melia S.A.		4,179
	123	SOS Cuetara S.A.		2,509
	37	Tecnicas Reunidas S.A.		3,105
	481	Uralita S.A.		4,885
				103,577
		Sweden—2.3%
	132	AarhusKarlshamn AB		3,092
	111	Alfa Laval AB		8,777
	166	Axfood AB		5,846
	181	Bilia AB, Class A		2,924
	244	Billerud AB		2,934
	327	Boliden AB		5,757
	206	Brostrom AB, Class B		2,065
	117	Cardo AB		4,138
	334	Castellum AB		4,227
	200	D Carnegie AB		4,402
	308	Eniro AB		3,934
	361	Fabege AB		4,285
	225	Getinge AB, Class B		5,942
	176	Gunnebo AB		2,075
	101	Hakon Invest AB		1,834
	71	Haldex AB		1,459
	238	Hexagon AB, Class B		5,724
	95	Hoganas AB, Class B		2,278
	371	Hufvudstaden AB, Class A		4,068
	117	JM AB		2,589
	329	Kinnevik Investment AB, Class B		8,146
	205	Kungsleden AB		2,917
	268	Latour Investment AB, Class B		4,318
	207	Lundin Petroleum AB*		2,481
	57	Modern Times Group AB, Class B		4,001
	224	Nobia AB		1,963
	122	OMX AB		5,121
	145	Oresund Investment AB		3,408
	194	Peab AB		1,754
	208	Ratos AB, Class B		6,098
	100	Wallenstam Byggnads AB, Class B		1,855
				120,412
		Switzerland—3.4%
	20	Allreal Holding AG		2,329
	1	Bank Sarasin & Cie AG, Class B		4,719
	10	Banque Cantonale Vaudoise		4,538
	8	Barry Callebaut AG		6,416
	69	Basler Kantonalbank		6,781
	31	BB Biotech AG		2,720
	31	BB Medtech AG		2,098
	2	Bell Holding AG		3,434
	22	Bucher Industries AG		5,220
	26	Charles Voegele Holding AG		2,259
	1	Conzzeta Holding AG		2,368

Number of Shares			Value
		Common Stocks and Other Equity Interests (Continued)
	43	Daetwyler Holding AG	$	3,461
	121	EFG International		5,653
	21	Emmi AG		3,075
	52	EMS-Chemie Holding AG		7,627
	5	Energiedienst Holding AG		2,925
	28	Fastweb		1,308
	8	Flughafen Zuerich AG		3,234
	7	Forbo Holding AG		4,197
	10	Galenica AG		4,832
	34	Geberit AG		4,579
	9	Georg Fischer AG		6,748
	1	Jelmoli Holding AG		2,606
	7	Kuoni Reisen Holding AG		3,497
	1	Lindt & Spruengli AG		3,451
	148	Logitech International S.A.*		5,141
	19	Luzerner Kantonalbank		4,295
	178	Micronas Semiconductor Hold*		2,373
	8	Nobel Biocare Holding AG		2,326
	7	OC Oerlikon Corp. AG		3,322
	46	Panalpina Welttransport Holding AG		8,660
	97	PSP Swiss Property AG		5,247
	8	PubliGroupe AG		2,816
	11	Rieter Holding AG		6,373
	24	Schmolz + Bickenbach AG		2,369
	4	Schweizerische National- Versicherungs-Gesellschaft		3,137
	3	Sika AG		5,927
	21	Sonova Holding AG		2,355
	9	St Galler Kantonalbank		3,960
	8	Straumann Holding AG		2,231
	4	Sulzer AG		6,412
	53	Swiss Prime Site AG		3,011
	14	Valora Holding AG		3,563
	106	Vontobel Holding AG		5,442
				179,035
		Taiwan, Province of China—0.3%
	2,687	Foxconn International Holdings Ltd.*		7,419
	3,855	Fubon Bank Hong Kong Ltd.		2,810
	2,000	Kim Eng Holdings Ltd.		3,175
				13,404
		United Kingdom—11.9%
	354	Abbot Group PLC		2,498
	643	Aberdeen Asset Management PLC		2,728
	179	Aberforth Smaller Companies Trust PLC		2,620
	166	Acergy S.A.		4,772
	155	Admiral Group PLC		3,320
	1,349	Aegis Group PLC		3,531
	296	Aga Foodservice Group PLC		2,552
	376	Aggreko PLC		4,890
	368	Alfred McAlpine PLC		4,277
	810	Amlin PLC		5,401

See Notes to Financial Statements.

91

Schedule of Investments (Continued)

PowerShares FTSE RAFI Developed Markets ex-U.S. Small-Mid Portfolio

October 31, 2007

Number of Shares			Value
		Common Stocks and Other Equity Interests (Continued)
	1,214	ARM Holdings PLC	$	3,745
	1,024	Ashtead Group PLC		2,319
	155	Atkins WS PLC		3,903
	269	Babcock International Group		3,277
	231	Bankers Investment Trust (The) PLC		2,107
	245	Bellway PLC		5,471
	453	Benfield Group Ltd.		2,858
	230	Berkeley Group Holdings PLC		8,137
	566	Biffa PLC		3,057
	763	Bodycote International		4,648
	244	Bovis Homes Group PLC		3,363
	741	Brit Insurance Holdings PLC		4,995
	974	British Assets Trust PLC		2,883
	222	British Empire Securities and General Trust PLC		2,230
	671	Brixton PLC		5,164
	211	BSS Group PLC		2,072
	112	Burren Energy PLC		2,815
	55	Cairn Energy PLC		2,688
	122	Caledonia Investments PLC		5,163
	473	Capita Group PLC		7,360
	87	Capital & Regional PLC		1,228
	621	Carillion PLC		5,263
	140	Carpetright PLC		3,525
	938	Carphone Warehouse Group (The) PLC		6,830
	401	Catlin Group Ltd.		4,178
	692	Cattles PLC		4,902
	149	Charter PLC*		3,355
	2,338	Christian Salvesen PLC		4,432
	491	City of London Investment Trust (The) PLC		3,159
	287	Close Brothers Group PLC		4,579
	140	CLS Holdings PLC*		1,367
	1,724	Cobham PLC		7,539
	471	Collins Stewart PLC		2,089
	1,065	Computacenter PLC		4,557
	453	Cookson Group PLC		7,839
	196	Croda International		2,716
	414	Dairy Crest Group PLC		5,182
	102	Dana Petroleum PLC*		2,733
	645	Davis Service Group (The) PLC		7,289
	296	De La Rue PLC		5,042
	856	Delta PLC		2,347
	61	Derwent London PLC		2,106
	4,541	Dimension Data Holdings PLC		5,872
	256	Drax Group PLC		3,592
	1,847	DS Smith PLC		8,863
	372	Dunedin Income Growth Investment Trust PLC		2,048
	465	easyJet PLC*		6,404
	1,202	Elementis PLC		2,472
	89	Energy Resources of Australia Ltd.		1,785
	632	Enodis PLC		2,747
	1,789	F&C Asset Management PLC		8,102
	1,067	Fiberweb PLC		1,114

Number of Shares			Value
		Common Stocks and Other Equity Interests (Continued)
	506	Filtrona PLC	$	2,699
	149	Findel PLC		2,198
	62	Forth Ports PLC		2,376
	1,955	Galiform PLC		4,670
	675	Galliford Try PLC		2,205
	653	Game Group PLC		2,706
	601	GCAP Media PLC		2,263
	76	Go-Ahead Group PLC		4,261
	265	Great Portland Estates PLC		3,146
	241	Greene King PLC		4,533
	27	Greggs PLC		2,808
	369	Halfords Group PLC		2,725
	690	Halma PLC		3,239
	182	Headlam Group PLC		2,113
	289	Helical Bar PLC		2,651
	796	Henderson Group PLC		3,092
	679	Hiscox Ltd.		4,048
	1,812	HMV Group PLC		4,733
	114	Holidaybreak PLC		1,834
	53	Homeserve PLC		1,984
	267	Hunting PLC		4,082
	622	ICAP PLC		7,559
	468	Informa PLC		5,201
	492	Inmarsat PLC		5,243
	85	Intermediate Capital Group PLC		2,924
	464	Interserve PLC		5,080
	151	Intertek Group PLC		3,228
	547	Jardine Lloyd Thompson Group PLC		4,352
	919	JJB Sports PLC		3,303
	306	John Menzies PLC		3,623
	780	John Wood Group PLC		6,765
	352	Johnson Service Group PLC		1,071
	632	Johnston Press PLC		3,942
	126	Keller Group PLC		2,968
	78	Kier Group PLC		3,477
	337	Laird Group PLC		4,445
	243	Law Debenture Corp. PLC		1,952
	154	London Stock Exchange Group PLC		5,375
	564	Lookers PLC		2,100
	188	Luminar Group Holdings PLC		2,484
	207	Luminar Group Holdings PLC, Class B		259
	30	Mapeley Ltd.		1,190
	423	Marshalls PLC		2,836
	755	Marston's PLC		5,395
	486	Mcbride PLC		1,754
	986	Meggitt PLC		6,990
	230	Michael Page International PLC		2,093
	251	Minerva PLC		950
	928	Misys PLC		4,660
	484	Mitie Group		2,800
	377	Monks Investment Trust (The) PLC		2,743
	576	Morgan Crucible Co.		3,799

See Notes to Financial Statements.

92

Schedule of Investments (Continued)

PowerShares FTSE RAFI Developed Markets ex-U.S. Small-Mid Portfolio

October 31, 2007

Number of Shares			Value
		Common Stocks and Other Equity Interests (Continued)
	120	Morgan Sindall PLC	$	4,093
	158	Murray Income Trust PLC		2,396
	218	Murray International Trust PLC, Class O		3,168
	532	N Brown Group PLC		3,197
	1,050	Northumbrian Water Group PLC		7,165
	215	Paragon Group Cos. PLC		1,059
	2,835	Pendragon PLC		3,961
	396	Perpetual Income and Growth Investment Trust PLC, Class O		2,139
	223	Petrofac Ltd.		2,386
	1,235	Premier Farnell PLC		4,150
	797	Premier Foods PLC		3,733
	116	Premier Oil PLC*		2,988
	914	PZ Cussons PLC		3,698
	1,009	QinetiQ PLC		3,946
	150	Quintain Estates & Development PLC		1,915
	361	Redrow PLC		2,988
	808	Regus Group PLC		1,842
	181	RIT Capital Partners PLC		4,268
	108	Rotork PLC		2,461
	348	RPC Group PLC		2,022
	1,273	Sage Group (The) PLC		6,400
	406	Scottish Investment Trust PLC		4,462
	475	Scottish Mortgage Investment Trust PLC		6,567
	524	Serco Group PLC		4,907
	154	Shaftesbury PLC		1,800
	701	Shanks Group PLC		3,495
	241	SIG PLC		5,307
	1,418	SMG PLC		1,002
	926	Smiths News PLC		2,385
	197	Spectris PLC		3,550
	142	Spirax-Sarco Engineering PLC		3,183
	2,373	Spirent Communications PLC*		3,438
	476	SSL International PLC		5,092
	522	St Ives Group PLC		3,090
	414	St James's Place PLC		3,337
	149	ST Modwen Properties PLC		1,518
	282	Stolt-Nielsen S.A.		8,212
	768	Taylor Nelson Sofres PLC		3,438
	460	TDG PLC		2,246
	417	Telent PLC		4,518
	155	Temple Bar Investment Trust PLC		2,603
	534	Templeton Emerging Markets Investment Trust PLC, Class O		5,322
	588	Thus Group PLC*		1,802
	164	TR Property Investment Trust PLC		315
	326	TR Property Investment Trust PLC		1,314
	664	TT electronics PLC		2,041
	291	Tullett Prebon PLC		2,672
	428	Tullow Oil PLC		5,672
	199	UK Coal PLC		2,108
	71	Ultra Electronics Holdings		1,847
	33	Union Financiere de France BQE S.A.		2,108

Number of Shares			Value
		Common Stocks and Other Equity Interests (Continued)
	881	Uniq PLC	$	3,898
	294	VT Group PLC		3,677
	393	Weir Group (The) PLC		7,241
	224	Wetherspoon (J.D.) PLC		2,524
	557	WH Smith PLC		4,547
	457	Wincanton PLC		4,021
	641	Witan Investment Trust PLC		6,551
	596	Yule Catto & Co. PLC		2,786
				629,598
		United States—0.7%
	543	Edinburgh Investment Trust (The) PLC		5,510
	20,600	Euro Disney S.C.A.*		2,682
	78	Fidelity European Values PLC		2,249
	181	JPMorgan Fleming Mercantile Investment Trust PLC		4,520
	355	JPMorgan Japanese Investment Trust PLC*		1,556
	122	Kloeckner & Co. AG		6,441
	6	Marathon Oil Corp.		382
	223	Merrill Lynch World Mining Trust PLC		3,183
	130	MTU Aero Engines Holding AG		7,937
	158	Savills PLC		1,202
				35,662
		Total Common Stocks and Other Equity Interests (Cost $4,895,869)		5,243,029
		Preferred Stocks—0.3%
		Germany—0.2%
	17	Fuchs Petrolub AG		1,745
	131	Jungheinrich AG		6,446
	49	Sixt AG		1,879
				10,070
		Italy—0.1%
	80	Hugo Boss AG		5,405
		Total Preferred Stocks (Cost $14,320)		15,475
		Rights—0.0%
		Japan—0.0%
	4,200	Shinki Co., expiring 11/27/2007*		327
		Sweden—0.0%
	308	Eniro AB, expiring 11/14/2007*		89
		Total Rights (Cost $0)		416

See Notes to Financial Statements.

93

Schedule of Investments (Continued)

PowerShares FTSE RAFI Developed Markets ex-U.S. Small-Mid Portfolio

October 31, 2007

Number of Shares			Value
		Warrants—0.0%
		Canada—0.0%
	8	Western Zagros Resources Ltd., expiring 01/18/2008*	$	9
		China—0.0%
	192	Industrial and Commercial Bank of China (Asia) Ltd., expiring 11/06/2008*		36
		Total Warrants (Cost $9)		45
		Money Market Fund—0.2%
	9,794	Liquid Assets Portfolio Private Class** (Cost $9,794)		9,794
		Total Investments (Cost $4,919,992)—99.5%		5,268,759
		Other assets less liabilities—0.5%		25,105
		Net Assets—100.0%	$	5,293,864

REIT Real Estate Investment Trust.

*  Non-income producing security.

**  Affiliated investment.

See Notes to Financial Statements.

94

Schedule of Investments

PowerShares FTSE RAFI Emerging Markets Portfolio

October 31, 2007

Number of Shares			Value
		Common Stocks and Other Equity Interests—99.3%
		Argentina—0.2%
	2,100	Telecom Argentina S.A. ADR*	$	50,421
		Belgium—0.6%
	2,100	Cia de Bebidas das Americas ADR		171,592
		Brazil—13.3%
	1,000	Aracruz Celulose S.A. ADR		76,890
	20,800	Banco Itau Holding Financeira S.A. ADR		593,840
	4,000	Braskem S.A. ADR		75,440
	800	Cia Brasileira de Distribuicao Grupo Pao de Acucar ADR		25,744
	12,700	Cia Paranaense de Energia ADR		209,550
	8,700	Companhia Vale do Rio Doce ADR		327,816
	11,000	Companhia Vale do Rio Doce (CVRD) ADR		347,270
	5,100	CPFL Energia S.A. ADR		339,252
	6,000	Gerdau S.A. ADR		186,600
	5,100	Petrobras Energia Participaciones S.A. ADR		60,945
	4,800	Petroleo Brasileiro S.A. ADR		459,024
	7,200	Petroleo Brasileiro S.A. Sponsored ADR		598,968
	500	Sadia S.A. ADR		34,120
	9,900	Tele Norte Leste Participacoes S.A. ADR		215,820
	17,100	Vivo Participacoes S.A. ADR		100,719
	2,000	Votorantim Celulose e Papel S.A. ADR		62,700
				3,714,698
		Chile—0.6%
	1,000	Banco de Chile ADR		52,500
	13,000	Cia de TeleComunicaciones de Chile S.A. ADR		127,010
				179,510
		China—20.8%
	30,000	Air China Ltd., H-Shares		45,208
	50,000	Aluminum Corp. of China Ltd., H-Shares		142,566
	10,000	Angang Steel Co. Ltd., H-Shares		36,319
	55,000	Bank of China Ltd., H-Shares		35,906
	91,000	Bank of Communications Co. Ltd., H-Shares		164,605
	20,000	China Coal Energy Co., H-Shares		66,703
	30,000	China Communications Construction Co. Ltd., H-Shares		93,861
	449,000	China Construction Bank Corp., H-Shares		504,566
	37,500	China COSCO Holdings Co. Ltd., H-Shares		164,741
	35,000	China Life Insurance Co. Ltd., H-Shares		232,331
	5,000	China Merchants Bank Co. Ltd., H-Shares		25,449
	318,000	China Petroleum & Chemical Corp. (Sinopec), H-Shares		478,387
	31,500	China Shenhua Energy Co. Ltd., H-Shares		199,750
	101,000	China Shipping Container Lines Co. Ltd., H-Shares		132,133
	20,000	China Southern Airlines Co. Ltd., H-Shares*		27,610
	546,000	China Telecom Corp Ltd., H-Shares		471,273

Number of Shares			Value
		Common Stocks and Other Equity Interests (Continued)
	60,000	Datang International Power Generation Co. Ltd., H-Shares	$	67,425
	46,000	Dongfeng Motor Group Co. Ltd., H-Shares		41,900
	30,000	Huadian Power International Corp. Ltd., H-Shares		20,553
	40,000	Huaneng Power International, Inc., H-Shares		47,066
	487,000	Industrial & Commercial Bank of China, H-Shares		459,932
	20,000	Maanshan Iron & Steel Co., H-Shares		17,624
	824,000	PetroChina Co. Ltd., H-Shares		2,062,445
	40,000	PICC Property & Casualty Co. Ltd., H-Shares		83,604
	7,500	Ping An Insurance (Group) Co. of China Ltd., H-Shares		103,731
	42,000	Shanghai Electric Group Co. Ltd., H-Shares		41,129
	36,000	Sinopec Shanghai Petrochemical Co. Ltd., H-Shares		28,472
	20,000	Zhejiang Expressway Co. Ltd., H-Shares		28,539
				5,823,828
		Germany—0.6%
	6,500	Magyar Telekom Telecommunications PLC ADR		174,460
		Hong Kong—0.2%
	20,500	PT Astra International Tbk		57,690
		India—6.6%
	5,100	Infosys Technologies Ltd. ADR		259,794
	53,600	Mahanagar Telephone Nigam ADR		493,120
	19,600	Tata Motors Ltd. ADR		386,121
	25,900	Videsh Sanchar Nigam Ltd. ADR		712,250
				1,851,285
		Indonesia—1.1%
	53,000	Bank Central Asia Tbk PT		42,531
	148,000	Bank Mandiri Persero Tbk PT		61,416
	46,000	Bank Rakyat Indonesia		39,189
	17,500	Gudang Garam Tbk PT		19,237
	186,000	Indah Kiat Pulp and Paper Corp. Tbk PT*		18,811
	32,500	Indosat Tbk PT		31,082
	78,000	Telekomunikasi Indonesia Tbk PT		92,173
				304,439
		Israel—1.3%
	10,415	Bank Hapoalim BM		57,189
	10,494	Bank Leumi Le-Israel BM		50,125
	14,513	Bezeq Israeli Telecommunication Corp. Ltd.		25,648
	477	Discount Investment Corp.		14,812
	624	IDB Development Corp. Ltd.		24,717
	698	IDB Holding Corp. Ltd.		24,107
	40	Israel (The) Corp. Ltd.		40,495
	3,879	Israel Chemicals Ltd.		42,599

See Notes to Financial Statements.

95

Schedule of Investments (Continued)

PowerShares FTSE RAFI Emerging Markets Portfolio

October 31, 2007

Number of Shares			Value
		Common Stocks and Other Equity Interests (Continued)
	7,379	Israel Discount Bank Ltd., Class A*	$	18,704
	1,479	Teva Pharmaceutical Industries Ltd.		64,746
				363,142
		Korea, Republic of—21.9%
	6,700	Kookmin Bank ADR		547,323
	41,600	Korea Electric Power Corp. ADR		925,600
	39,200	KT Corp ADR		921,984
	19,000	LG. Philips LCD Co. Ltd. ADR*		513,950
	9,400	POSCO ADR		1,727,250
	2,500	Shinhan Financial Group Co. Ltd. ADR		327,425
	25,100	SK Telecom Co. Ltd. ADR		773,331
	5,900	Woori Finance Holdings Co. Ltd. ADR		389,105
				6,125,968
		Luxembourg—0.2%
	2,472	Mittal Steel South Africa Ltd.		55,190
		Mexico—4.8%
	5,500	Alfa SAB de CV, Class A		36,993
	56,900	America Movil SAB de CV, Series L		179,952
	47,500	Carso Global Telecom SAB de CV*		227,177
	39,100	Cemex SAB de CV*		119,457
	9,500	Coca-Cola Femsa SAB de CV, Series L		43,935
	7,100	Controladora Comercial Mexicana SAB de CV		22,083
	17,000	Fomento Economico Mexicano SAB de CV		60,197
	4,500	Gruma SAB de CV, Class B		16,103
	6,000	Grupo Bimbo SAB de CV, Series A		34,027
	8,300	Grupo Continental SAB de CV		19,387
	5,600	Grupo Financiero Banorte SAB de CV, Class O		26,213
	11,000	Grupo Financiero Inbursa S.A., Class O		28,776
	11,500	Grupo Mexico SAB de CV, Series B		104,221
	11,600	Grupo Modelo SAB de CV, Series C		53,918
	7,600	Grupo Televisa S.A.		37,463
	9,100	Kimberly-Clark de Mexico SAB de CV, Class A		39,450
	6,600	Organizacion Soriana SAB de CV, Class B		20,842
	145,800	Telefonos de Mexico SAB de CV		265,631
				1,335,825
		Netherlands—0.1%
	30,000	Unilever Indonesia Tbk PT		21,930
		Philippines—0.3%
	1,000	Philippine Long Distance Telephone Co. ADR		68,600
		Russia—8.4%
	9,000	Gazprom OAO		448,200
	300	JSC MMC Norilsk Nickel - ADR		88,050
	2,400	LUKOIL ADR		217,200
	300	Polyus Gold ADR		13,500

Number of Shares			Value
		Common Stocks and Other Equity Interests (Continued)
	8,700	Rosneft Oil Co. GDR*	$	76,299
	16,700	Rostelecom ADR		996,990
	16,800	SEVESTAL GDR		398,160
	900	Unified Energy System GDR		109,620
				2,348,019
		South Africa—3.4%
	1,521	Barloworld Ltd.		29,306
	1,398	Bidvest Group Ltd.		29,160
	20,194	FirstRand Ltd.		79,362
	1,679	Gold Fields Ltd.		30,009
	1,572	Harmony Gold Mining Co. Ltd.*		17,680
	2,060	Impala Platinum Holdings Ltd.		76,863
	1,023	Imperial Holdings Ltd.		20,524
	3,505	Liberty Group Ltd.		50,913
	3,045	MTN Group Ltd.		58,786
	5,198	Nampak Ltd.		17,209
	1,681	Remgro Ltd.		48,802
	3,866	RMB Holdings Ltd.		22,465
	22,922	Sanlam Ltd.		83,073
	2,252	Sappi Ltd.		34,093
	3,050	Sasol Ltd.		154,845
	6,162	Standard Bank Group Ltd.		110,530
	2,654	Telkom S.A. Ltd.		71,834
	801	Tiger Brands Ltd.		22,954
				958,408
		Spain—2.3%
	1,500	Banco Santander Chile S.A. ADR		79,485
	1,800	Empresa Nacional de Electricidad S.A. ADR		84,276
	8,100	Enersis S.A. ADR		160,542
	9,300	Telecomunicacoes de Sao Paulo S.A. ADR		318,246
				642,549
		Taiwan, Province of China—9.2%
	17,500	Advanced SemiConductor Engineering, Inc. ADR		105,350
	14,400	AU Optronics Corp ADR		312,912
	59,600	Chunghwa Telecom Co. Ltd. ADR		1,144,320
	77,800	Taiwan Semiconductor Manufacturing Co. Ltd. ADR		828,570
	46,254	United Microelectronics Corp. ADR		174,378
				2,565,530
		Thailand—2.0%
	21,300	Advanced Info Service PCL		55,780
	9,500	Bangkok Bank PCL		35,501
	141,700	IRPC PCL		27,936
	7,500	Kasikornbank PCL		19,751
	57,600	Krung Thai Bank PCL*		19,321
	11,200	PTT Exploration & Production PCL		53,388
	16,200	PTT PCL		198,299
	6,500	Siam Cement PCL		50,110

See Notes to Financial Statements.

96

Schedule of Investments (Continued)

PowerShares FTSE RAFI Emerging Markets Portfolio

October 31, 2007

Number of Shares			Value
		Common Stocks and Other Equity Interests (Continued)
	8,800	Siam Commercial Bank PCL	$	24,599
	21,600	Thai Airways International PCL		25,105
	13,700	Thai Oil PCL		38,699
				548,489
		United Kingdom—1.1%
	2,799	ABSA Group Ltd.		55,642
	578	Anglo Platinum Ltd.		98,551
	1,338	AngloGold Ashanti Ltd.		62,198
	2,051	Exxaro Resources Ltd.		32,966
	2,147	Nedbank Group Ltd.		46,785
				296,142
		United States—0.3%
	17,100	Wal-Mart de Mexico SAB de CV		69,179
		Total Common Stocks and Other Equity Interests (Cost $26,731,923)		27,726,894
		Rights—0.0%
		China
	440	Angang Co. Ltd., expiring 11/05/2007* (Cost $0)		693
		Money Market Fund—6.3%
	1,767,877	Liquid Assets Portfolio Private Class** (Cost $1,767,877)		1,767,877
		Total Investments (Cost $28,499,800)—105.6%		29,495,464
		Liabilities in excess of other assets—(5.6%)		(1,553,231	)
		Net Assets—100.0%	$	27,942,233

ADR American Depositary Receipt.

GDR Global Depositary Receipt.

*  Non-income producing security.

**  Affiliated investment.

See Notes to Financial Statements.

97

Schedule of Investments

PowerShares FTSE RAFI Europe Portfolio

October 31, 2007

Number of Shares			Value
		Common Stocks and Other Equity Interests—101.0%
		Australia—0.3%
	453	BHP Billiton PLC	$	17,230
		Austria—0.6%
	64	Erste Bank der oesterreichischen Sparkassen AG		5,185
	14	EVN AG		1,869
	53	Oesterreichische Elektrizitaetswirtschafts AG, Class A		3,497
	120	OMV AG		8,960
	15	Raiffeisen International Bank - Holding AG		2,476
	149	Telekom Austria AG		4,268
	42	voestalpine AG		3,772
	24	Wiener Staedtische Versicherung AG		1,767
	30	Wienerberger AG		1,866
				33,660
		Belgium—2.8%
	98	Agfa Gevaert N.V.		1,360
	208	Belgacom S.A.		9,927
	8	Colruyt S.A.		1,709
	58	Compagnie Nationale a Portefeuille		4,145
	92	Delhaize Group		8,714
	598	Dexia S.A.		19,155
	815	Fortis, Class A		26,023
	815	Fortis, Class B		26,011
	652	Fortis - Strip VVPR*		9
	58	Groupe Bruxelles Lambert S.A.		7,398
	159	InBev N.V.		14,989
	18	KBC Ancora		2,028
	127	KBC GROEP N.V.		17,767
	45	Solvay S.A.		6,830
	47	UCB S.A.		2,755
	11	Umicore		2,737
				151,557
		Denmark—1.0%
	1	A P Moller - Maersk A/S, Class A		13,646
	1	A P Moller - Maersk A/S, Class B		13,781
	28	Carlsberg A/S, Class B		3,766
	22	Danisco A/S		1,691
	255	Danske Bank A/S		11,223
	48	H. Lundbeck A/S		1,372
	15	Jyske Bank A/S*		1,235
	50	Novo Nordisk A/S, Class B		6,192
				52,906
		Finland—2.0%
	344	Fortum Oyj		14,896
	26	Kone Oyj, Class B		2,147
	45	Metso Corp.		2,732
	125	Neste Oil Oyj		4,487

Number of Shares			Value
		Common Stocks and Other Equity Interests (Continued)
	1,321	Nokia Oyj	$	52,269
	81	Outokumpu Oyj		3,018
	229	Sampo Oyj, Class A		7,166
	77	SanomaWSOY Oyj		2,220
	661	Stora Enso Oyj, Class R		12,107
	47	TietoEnator Oyj		1,151
	391	UPM-Kymmene Oyj		8,740
				110,933
		France—17.3%
	88	Accor S.A.		8,386
	21	Aeroports de Paris		2,397
	157	Air France-KLM		5,960
	86	Air Liquide S.A.		11,819
	614	Alcatel-Lucent		5,952
	198	Alliance Trust (The) PLC		1,528
	46	Alstom		10,841
	47	Arkema*		3,193
	50	Atos Origin S.A.*		3,036
	926	AXA		41,343
	420	BNP Paribas		46,235
	144	Bouygues S.A.		13,804
	50	Cap Gemini S.A.		3,183
	397	Carrefour S.A.		28,540
	106	Casino Guichard-Perrachon S.A.		11,822
	97	Christian Dior S.A.		13,184
	95	CNP Assurances		12,093
	216	Compagnie de Saint-Gobain		23,122
	76	Compagnie Generale des Etablissements Michelin, Class B		10,163
	745	Credit Agricole S.A.		29,414
	22	Dassault Systemes S.A.		1,375
	27	Eiffage S.A.		3,047
	417	Electricite de France		49,947
	38	Essilor International S.A.		2,418
	18	Eurazeo		2,679
	1,628	France Telecom S.A.		59,966
	358	Gaz de France		20,303
	136	Groupe Danone		11,642
	14	Hermes International		1,839
	28	Imerys S.A.		2,719
	52	JC Decaux S.A.		1,913
	22	Klepierre		1,191
	151	L'Oreal S.A.		19,801
	91	Lafarge S.A.		14,778
	78	Lagardere S.C.A		6,583
	69	Legrand S.A.		2,545
	117	LVMH Moet Hennessy Louis Vuitton S.A.		15,045
	15	Mobistar S.A.		1,355
	205	Natixis		4,538
	121	PagesJaunes S.A.		2,668

See Notes to Financial Statements.

98

Schedule of Investments (Continued)

PowerShares FTSE RAFI Europe Portfolio

October 31, 2007

Number of Shares			Value
		Common Stocks and Other Equity Interests (Continued)
	19	Pernod Ricard S.A.	$	4,384
	87	PPR		17,221
	358	PSA Peugeot Citroen		33,138
	58	Publicis Groupe		2,352
	184	Renault S.A.		30,853
	130	Safran S.A.		3,293
	356	Sanofi-Aventis		31,181
	88	Schneider Electric S.A.		12,101
	22	Societe BIC S.A.		1,708
	29	Societe des Autoroutes Paris-Rhin-Rhone		3,081
	181	Societe Generale		30,339
	82	Societe Television Francaise 1		2,265
	67	Sodexho Alliance S.A.		4,824
	713	Suez S.A.		46,316
	38	Technip S.A.		3,401
	84	Thales S.A.		5,228
	210	Thomson		3,658
	1,344	Total S.A.		108,208
	38	Unibail-Rodamco		9,435
	90	Valeo S.A.		4,923
	10	Vallourec S.A.		2,894
	226	Veolia Environnement		20,157
	126	Vinci S.A.		10,321
	811	Vivendi		36,467
	11	Wendel		1,887
				942,002
		Germany—15.2%
	69	Adidas AG		4,580
	220	Allianz SE		49,500
	48	Altana AG		1,162
	111	Arcandor AG*		3,555
	278	BASF AG		38,518
	357	Bayer AG		29,729
	453	Bayerische Motoren Werke (BMW) AG		30,219
	48	Beiersdorf AG		3,794
	99	Celesio AG		5,623
	246	Commerzbank AG		10,435
	51	Continental AG		7,696
	1,109	Daimler AG		122,837
	260	Deutsche Bank AG		34,791
	22	Deutsche Boerse AG		3,532
	257	Deutsche Lufthansa AG		7,589
	621	Deutsche Post AG		18,777
	71	Deutsche Postbank AG		5,186
	3,272	Deutsche Telekom AG		67,030
	330	E.ON AG		64,482
	11	Euler Hermes S.A.		1,474
	26	Fraport AG		2,016
	89	Fresenius Medical Care AG & Co. KGaA		4,666
	19	Fresenius SE		1,477

Number of Shares			Value
		Common Stocks and Other Equity Interests (Continued)
	90	Hannover Rueckversicherung AG	$	4,734
	35	HeidelbergCement AG		5,575
	49	Heidelberger Druckmaschinen AG		2,005
	65	Henkel KGaA		3,002
	75	Hypo Real Estate Holding AG		4,467
	325	Infineon Technologies AG*		4,763
	61	Lanxess		3,018
	64	Linde AG		8,091
	56	MAN AG		9,994
	49	Merck KGaA		6,124
	239	Metro AG		21,628
	116	Muenchener Rueckversicherungs - Gesellschaft AG		22,153
	43	RTL Group		4,349
	269	RWE AG		36,621
	18	Salzgitter AG		3,535
	179	SAP AG		9,716
	388	Siemens AG		52,978
	174	Suedzucker AG		3,945
	333	ThyssenKrupp AG		22,099
	291	TUI AG		8,538
	242	Volkswagen AG		69,292
	12	Wacker Chemie AG		2,922
				828,217
		Ireland—0.5%
	301	Allied Irish Banks PLC		7,508
	95	Anglo Irish Bank Corp. PLC		1,594
	320	Bank of Ireland		5,898
	184	CRH PLC		7,012
	129	Irish Life & Permanent PLC		2,920
	66	Kerry Group PLC, Class A		1,974
	204	Ryanair Holdings PLC*		1,697
				28,603
		Italy—7.5%
	611	AEM SpA		2,568
	360	Alleanza Assicurazioni SpA		4,867
	574	Assicurazioni Generali SpA		27,247
	193	Atlantia SpA		7,573
	74	Autogrill SpA		1,476
	420	Banca Carige SpA		2,008
	1,033	Banca Monte dei Paschi di Siena SpA		6,591
	138	Banca Popolare di Milano Scarl		2,162
	189	Banco Popolare Scarl*		4,531
	108	Benetton Group SpA		1,991
	15	Ciments Francais S.A.		2,814
	4,541	Enel SpA		54,300
	2,490	Eni SpA		90,781
	611	Fiat SpA		19,695
	158	Finmeccanica SpA		4,684
	82	Fondiaria - Sai SpA		3,973

See Notes to Financial Statements.

99

Schedule of Investments (Continued)

PowerShares FTSE RAFI Europe Portfolio

October 31, 2007

Number of Shares			Value
		Common Stocks and Other Equity Interests (Continued)
	64	Gestevision Telecinco S.A.	$	1,838
	232	Gruppo Editoriale L?Espresso SpA		1,171
	885	IFIL Investments SpA		10,077
	2,057	Intesa Sanpaolo		16,249
	75	Italcementi SpA		1,721
	89	Italcementi SpA Rnc		1,481
	54	Lottomatica SpA		1,927
	96	Luxottica Group SpA		3,360
	565	Mediaset SpA		5,845
	194	Mediobanca SpA		4,595
	204	Mediolanum SpA		1,513
	418	Parmalat SpA		1,544
	3,913	Pirelli & C. SpA		4,996
	226	RCS MediaGroup SpA		1,233
	90	Saipem SpA		3,977
	367	Saras SpA		2,213
	14,545	Seat Pagine Gialle SpA		8,438
	1,675	Snam Rete Gas SpA		10,820
	9,593	Telecom Italia SpA		30,082
	4,324	Telecom Italia SpA Rnc		11,160
	1,450	Terna-Rete Elettrica Nationale SpA		5,669
	3,833	UniCredito Italiano SpA		32,773
	229	Unione di Banche Italiane Scpa		6,358
	418	Unipol Gruppo Finanziario SpA		1,566
				407,867
		Luxembourg—0.7%
	331	ArcelorMittal		26,338
	141	Banco Espirito Santo S.A.		3,411
	224	SES FDR		5,522
				35,271
		Netherlands—9.7%
	816	ABN AMRO Holding N.V.		44,046
	914	Aegon N.V.		18,856
	153	Akzo Nobel N.V.		12,292
	62	ASML Holding N.V.		2,156
	28	Corio N.V.		2,451
	522	European Aeronautic Defence and Space Co.		17,702
	49	Heineken Holding N.V.		2,894
	98	Heineken N.V.		6,848
	1,547	ING Groep N.V. CVA		69,472
	797	Koninklijke (Royal) KPN N.V.		15,013
	503	Koninklijke (Royal) Philips Electronics N.V.		20,776
	1,294	Koninklijke Ahold N.V.		19,395
	129	Koninklijke DSM N.V.		7,305
	28	Randstad Holding N.V.		1,550
	67	Reed Elsevier N.V.		1,294
	2,955	Royal Dutch Shell PLC, Class A		129,217
	2,249	Royal Dutch Shell PLC, Class B		97,877
	31	Royal Numico N.V.		2,447
	262	SNS Reaal		6,277

Number of Shares			Value
		Common Stocks and Other Equity Interests (Continued)
	130	TNT N.V.	$	5,311
	1,314	Unilever N.V. CVA		42,564
	89	Wolters Kluwer N.V.		2,785
				528,528
		Norway—2.0%
	71	Aker Kvaerner ASA		2,463
	696	DnB NOR ASA		11,425
	637	Norsk Hydro ASA		9,310
	188	Norske Skogindustrier ASA		2,057
	457	Orkla ASA		8,451
	1,828	StatoilHydro ASA		61,574
	141	Storebrand ASA		2,003
	413	Telenor ASA		9,652
	79	Yara International ASA		3,044
				109,979
		Portugal—0.6%
	113	Banco BPI S.A.		987
	1,347	Banco Comercial Portugues S.A., Class R		6,509
	185	Brisa-Auto-Estradas de Portugal S.A.		2,623
	288	CIMPOR-Cimentos de Portugal, SGPS S.A.		2,608
	1,485	Energias de Portugal S.A.		9,539
	512	Portugal Telecom, SGPS S.A.		6,852
	90	PT Multimedia-Servicos de Telecomunicacoes e Multimedia, SGPS S.A.		1,223
				30,341
		South Africa—0.0%
	46	Mondi Ltd.		464
		Spain—5.5%
	142	Abertis Infraestructuras S.A.		4,721
	12	Acciona S.A.		3,698
	85	Acerinox S.A.		2,504
	64	ACS, Actividades de Construccion y Servicios S.A.		3,955
	108	Altadis S.A.		7,700
	1,205	Banco Bilbao Vizcaya Argentaria S.A.		30,282
	265	Banco de Sabadell S.A.		2,684
	146	Banco Espanol de Credito S.A.		2,995
	372	Banco Popular Espanol S.A.		6,485
	1,858	Banco Santander S.A.		40,321
	113	Bankinter S.A.		1,676
	101	Compania Espanola de Petroleos S.A.		10,324
	73	Enagas		2,070
	199	Endesa		10,353
	40	Fomento de Construcciones y Contratas S.A.		3,478
	41	Gamesa Corporacion Tecnologica S.A.		2,076
	156	Gas Natural SDG S.A.		9,581
	18	Gecina S.A.		3,073
	38	Grupo Ferrovial S.A.		3,301
	1,980	Iberdrola S.A.		31,825

See Notes to Financial Statements.

100

Schedule of Investments (Continued)

PowerShares FTSE RAFI Europe Portfolio

October 31, 2007

Number of Shares			Value
		Common Stocks and Other Equity Interests (Continued)
	61	Industria de Diseno Textil S.A.	$	4,532
	641	Mapfre S.A.		3,005
	14	Metrovacesa S.A.		1,641
	817	Repsol YPF S.A.		32,209
	45	Sacyr Vallehermoso S.A.		2,112
	1,962	Telefonica S.A.		64,690
	112	Union Fenosa S.A.		7,439
				298,730
		Sweden—3.1%
	102	Assa Abloy AB, Class B		2,133
	188	Atlas Copco AB, Class A		3,140
	125	Atlas Copco AB, Class B		1,945
	62	Boliden AB		1,092
	307	Electrolux AB, Series B		5,924
	146	Hennes & Mauritz AB, Class B		9,709
	85	Holmen AB, Class B		3,341
	138	Husqvarna AB, Class B		1,660
	132	Industrivarden AB, Class A		2,858
	58	Industrivarden AB, Class C		1,174
	258	Investor AB, Class B		6,368
	1,090	Nordea Bank AB		19,466
	382	Sandvik AB		7,206
	61	Scania AB, Class A		1,745
	203	Scania AB, Class B		5,537
	225	Securitas AB, Class B		2,839
	243	Skandinaviska Enskilda Banken AB, Class A		7,430
	257	Skanska AB, Class B		5,070
	180	SKF AB, Class B		3,488
	74	SSAB Svenskt Stal AB, Series A		2,396
	25	SSAB Svenskt Stal AB, Series B		735
	463	Svenska Cellulosa AB, Class B		8,152
	299	Svenska Handelsbanken AB, Class A		9,894
	220	Swedbank AB, Class A		6,865
	72	Swedish Match AB		1,607
	234	Tele2 AB, Class B		5,500
	2,935	Telefonaktiebolaget LM Ericsson, Class B		8,767
	1,515	TeliaSonera AB		14,885
	291	Volvo AB, Class A		5,638
	623	Volvo AB, Class B		12,120
				168,684
		Switzerland—6.0%
	454	ABB Ltd.		13,647
	89	Adecco S.A.		5,348
	26	Baloise Holding AG		2,761
	59	Ciba Specialty Chemicals AG		2,930
	173	Clariant AG		2,209
	92	Compagnie Financiere Richemont S.A., Class A		6,560
	488	Credit Suisse Group		32,799
	6	Geberit AG		808

Number of Shares			Value
		Common Stocks and Other Equity Interests (Continued)
	2	Givaudan S.A.	$	1,964
	93	Holcim Ltd.		10,591
	36	Julius Baer Holding AG		3,112
	29	Kuehne & Nagel International AG		3,108
	16	Lonza Group AG		1,862
	135	Nestle S.A.		62,257
	655	Novartis AG		34,811
	30	Pargesa Holding S.A.		3,414
	142	Roche Holding AG		24,209
	6	Roche Holding AG Br		1,140
	21	Schindler Holding AG		1,448
	15	Schindler Holding AG PART CERT		1,048
	1	SGS S.A.		1,310
	355	STMicroelectronics N.V.		6,066
	7	Swatch Group AG-Bearer		2,235
	21	Swatch Group AG-Registered		1,318
	20	Swiss Life Holding		5,522
	167	Swiss Re		15,662
	30	Swisscom AG		11,085
	29	Syngenta AG		6,962
	17	Synthes, Inc.		2,121
	695	UBS AG		37,147
	77	Zurich Financial Services AG		23,169
				328,623
		United Kingdom—26.0%
	126	3i Group PLC		2,840
	244	Alliance & Leicester PLC		4,007
	423	Anglo American PLC		29,121
	278	Antofagasta PLC		4,837
	365	Associated British Foods PLC		6,915
	433	AstraZeneca PLC		21,345
	1,675	Aviva PLC		26,288
	1,207	BAE Systems PLC		12,487
	2,958	Barclays PLC		37,115
	323	BBA Aviation PLC		1,619
	659	BG Group PLC		12,177
	13,726	BP PLC		178,209
	354	Bradford & Bingley PLC		2,272
	614	British Airways PLC*		5,679
	726	British American Tobacco PLC		27,599
	138	British Land Co. PLC		3,108
	230	British Sky Broadcasting Group PLC		3,251
	4,529	BT Group PLC		30,671
	164	Bunzl PLC		2,465
	217	Burberry Group PLC		2,772
	2,180	Cable & Wireless PLC		8,826
	843	Cadbury Schweppes PLC		11,138
	90	Capita Group PLC		1,400
	176	Carphone Warehouse Group (The) PLC		1,281
	1,998	Centrica PLC		15,305

See Notes to Financial Statements.

101

Schedule of Investments (Continued)

PowerShares FTSE RAFI Europe Portfolio

October 31, 2007

Number of Shares			Value
		Common Stocks and Other Equity Interests (Continued)
	327	Cobham PLC	$	1,430
	1,361	Compass Group PLC		9,782
	129	Daily Mail & General Trust		1,643
	925	Diageo PLC		21,137
	1,504	DSG International PLC		4,046
	305	Electrocomponents PLC		1,584
	113	EMAP PLC		2,058
	139	Enterprise Inns PLC		1,819
	720	Experian Group Ltd.		7,546
	306	Foreign & Colonial Investment Trust PLC		2,056
	1,146	Friends Provident PLC		4,380
	620	G4S PLC		2,727
	511	GKN PLC		3,893
	1,974	GlaxoSmithKline PLC		50,767
	89	Hammerson PLC		2,056
	704	Hays PLC		2,007
	3,384	HBOS PLC		61,371
	655	Home Retail Group PLC		5,932
	5,225	HSBC Holdings PLC		103,224
	116	ICAP PLC		1,410
	453	Imperial Chemical Industries PLC		6,201
	159	Imperial Tobacco Group PLC		8,036
	474	InterContinental Hotels Group PLC		11,028
	133	International Personal Finance PLC		682
	261	International Power PLC		2,651
	275	Invesco PLC		4,213
	3,363	ITV PLC		6,923
	1,283	J Sainsbury PLC		14,579
	98	Johnson Matthey PLC		3,634
	100	Kazakhmys PLC		3,062
	142	Kelda Group PLC		2,798
	604	Kesa Electricals PLC		3,984
	1,761	Kingfisher PLC		7,218
	847	Ladbrokes PLC		7,245
	168	Land Securities Group PLC		5,737
	4,780	Legal & General Group PLC		13,912
	127	Liberty International PLC		3,155
	3,812	Lloyds TSB Group PLC		43,197
	477	LogicaCMG PLC		1,613
	30	Lonmin PLC		2,141
	230	Man Group PLC		2,809
	577	Marks & Spencer Group PLC		7,815
	528	Mitchells & Butlers PLC		7,299
	71	Mondi PLC		657
	866	National Grid PLC		14,419
	64	Next PLC		2,936
	160	Northern Rock PLC		613
	3,369	Old Mutual PLC		12,877
	429	Pearson PLC		7,107
	102	Persimmon PLC		2,223
	67	Provident Financial PLC		1,227

Number of Shares			Value
		Common Stocks and Other Equity Interests (Continued)
	1,354	Prudential PLC	$	21,996
	352	Rank Group PLC		750
	126	Reckitt Benckiser Group PLC		7,300
	114	Reed Elsevier PLC		1,487
	977	Rentokil Initial PLC		3,491
	493	Reuters Group PLC		6,759
	387	Rexam PLC		4,361
	246	Rio Tinto PLC		22,945
	467	Rolls-Royce Group PLC		5,219
	18,866	Rolls-Royce Group PLC, Class B*		39
	2,149	Royal & Sun Alliance Insurance Group PLC		7,040
	4,167	Royal Bank of Scotland Group PLC		44,710
	323	SABMiller PLC		9,696
	242	Sage Group (The) PLC		1,217
	61	Schroders PLC		1,950
	24	Schroders PLC Ntvg		670
	598	Scottish & Newcastle PLC		9,727
	286	Scottish & Southern Energy PLC		9,245
	163	Segro PLC		1,581
	190	Severn Trent PLC		5,723
	93	Shire PLC		2,320
	759	Signet Group PLC		1,423
	162	Smith & Nephew PLC		2,186
	151	Smiths Group PLC		3,538
	419	Standard Chartered PLC		16,242
	279	Tate & Lyle PLC		2,524
	2,476	Tesco PLC		25,100
	698	Tomkins PLC		3,215
	45	Travis Perkins PLC		1,360
	205	Trinity Mirror PLC		1,711
	1,338	Unilever PLC		45,168
	133	United Business Media PLC		2,010
	534	United Utilities PLC		8,092
	34,196	Vodafone Group PLC		134,261
	114	Whitbread PLC		4,194
	446	William Hill PLC		5,735
	918	William Morrison Supermarkets PLC		5,640
	122	Witan Investment Trust PLC		1,247
	261	Wolseley PLC		4,519
	377	WPP Group PLC		5,141
	216	Xstrata PLC		15,467
	282	Yell Group PLC		2,665
				1,415,250
		United States—0.2%
	227	Carnival PLC		10,591
	46	Zardoya Otis S.A.		1,551
				12,142
		Total Common Stocks and Other Equity Interests (Cost $5,200,943)		5,500,987

See Notes to Financial Statements.

102

Schedule of Investments (Continued)

PowerShares FTSE RAFI Europe Portfolio

October 31, 2007

Number of Shares			Value
		Preferred Stocks—0.8%
		Germany—0.8%
	48	Fresenius SE	$	3,806
	90	Henkel KGaA		4,586
	4	Porsche AG		10,654
	118	Volkswagen AG		22,397
				41,443
		Italy—0.0%
	858	Unipol Gruppo Finanziario SpA		3,066
		Total Preferred Stocks (Cost $30,968)		44,509
		Rights—0.0%
		Spain—0.0%
	14	Metrovacesa SA, expiring 11/09/2007* (Cost $0)		2
		Total Investments (Cost $5,231,911)—101.8%		5,545,498
		Liabilities in excess of other assets—(1.8%)		(99,896	)
		Net Assets—100.0%	$	5,445,602

*  Non-income producing security.

See Notes to Financial Statements.

103

Schedule of Investments

PowerShares FTSE RAFI Europe Small-Mid Portfolio

October 31, 2007

Number of Shares			Value
		Common Stocks and Other Equity Interests—99.0%
		Australia—0.2%
	8,886	IBA Health Ltd.	$	9,429
		Austria—2.6%
	88	Agrana Beteiligungs AG		9,186
	136	Andritz AG		9,989
	806	Austrian Airlines AG*		8,454
	88	Boehler-Uddeholm AG		9,345
	280	CA Immobilien Anlagen AG*		7,535
	114	Flughafen Wien AG		13,491
	614	IMMOFINANZ AG		7,284
	144	Mayr-Melnhof Karton AG		17,083
	376	Meinl European Land Ltd.*		5,266
	274	Oesterreichische Post AG		11,353
	94	RHI AG*		4,805
	96	Semperit AG Holding		4,468
	532	UNIQA Versicherungen AG		18,780
	222	Zumtobel AG		9,475
				136,514
		Belgium—3.1%
	98	Ackermans & Van Haaren		10,180
	9,432	Avis Europe PLC*		7,837
	86	Barco N.V.		7,060
	92	Befimmo S.C.A. Sicafi		10,008
	200	Brederode S.A. Financiere		9,028
	74	Cofinimmo		13,889
	194	Compagnie Maritime Belge S.A.		17,769
	288	Cumerio N.V. S.A.		12,146
	372	Euronav S.A.		11,033
	160	GIMV N.V.		11,083
	382	Recticel S.A.		5,803
	764	RHJ International*		13,396
	358	Telenet Group Holding N.V.*		13,156
	328	Tessenderlo Chemie N.V.		20,786
				163,174
		Denmark—5.0%
	34	ALK-Abello A/S		7,312
	66	Almindelig Brand A/S*		4,369
	206	Auriga Industries, Class B		4,378
	36	Bang & Olufsen A/S, Class B		4,214
	132	Biomar Holding A/S		5,483
	632	BW Gas ASA		8,499
	88	Coloplast A/S, Class B		8,506
	174	D/S Norden A/S		21,414
	270	Dampskibsselskabet Torm A/S		11,215
	74	Dfds A/S		13,516
	624	DSV A/S		16,473
	190	East Asiatic Co. Ltd. A/S		15,287
	140	FLSmidth & Co. A/S		15,163
	492	GN Store Nord		5,229
	192	Jyske Bank A/S*		15,802

Number of Shares			Value
		Common Stocks and Other Equity Interests (Continued)
	158	NKT Holding A/S	$	17,205
	118	Novozymes A/S, Class B		12,826
	52	Rockwool International AS, Class B		16,563
	190	Spar Nord Bank A/S		4,905
	170	Sydbank A/S		7,812
	52	Topdanmark A/S*		8,862
	184	Trygvesta A/S		14,572
	254	Vestas Wind Systems A/S*		22,631
	62	William Demant Holding*		5,674
				267,910
		Finland—3.8%
	464	Ahlstrom Oyj		11,680
	468	Amer Sports Oyj, Class A		12,431
	222	Cargotec Corp., Class B		13,701
	548	Finnair Oyj		9,252
	938	Huhtamaki Oyj		13,421
	480	Kemira GrowHow Oyj		8,472
	162	Konecranes Oyj		7,242
	130	Lassila & Tikanoja Oyj		4,439
	152	Lemminkainen Oyj		11,077
	280	Nokian Renkaat Oyj		10,532
	762	OKO Bank PLC, Class A		16,316
	996	Oriola-KD Oyj, Class B		4,640
	408	Orion Oyj, Class B		10,460
	934	Perlos Oyj		6,959
	484	Sponda Oyj		6,624
	318	Stockmann Oyj Abp, Class B		15,849
	580	TietoEnator Oyj		14,206
	374	Uponor Oyj		9,761
	430	YIT Oyj		13,220
				200,282
		France—9.0%
	810	Altran Technologies S.A.*		5,953
	288	Beneteau S.A.		8,192
	5,090	Beni Stabili SpA		6,436
	106	BioMerieux		11,822
	56	Bonduelle S.C.A.		7,271
	846	Bull S.A.*		6,181
	324	Business Objects S.A.*		19,444
	726	Canal Plus		8,487
	88	Carbone Lorraine		7,864
	128	Clarins		11,061
	130	Club Mediterranee*		8,717
	92	Compagnie des Alpes		4,789
	194	Compagnie Plastic-Omnium S.A.		12,554
	280	Dassault Systemes S.A.		17,504
	1,152	Derichebourg*		11,967
	70	Etam Developpement S.A.		4,131
	394	Eutelsat Communications*		10,631
	122	Fimalac		9,655
	28	Financiere Tradition		5,411

See Notes to Financial Statements.

104

Schedule of Investments (Continued)

PowerShares FTSE RAFI Europe Small-Mid Portfolio

October 31, 2007

Number of Shares			Value
		Common Stocks and Other Equity Interests (Continued)
	70	Fonciere Des Regions	$	10,200
	304	Gemalto N.V.*		8,915
	58	Geodis		12,503
	218	Groupe Partouche*		4,605
	72	Groupe Steria S.C.A.		3,379
	48	Guyenne et Gascogne S.A.		8,951
	2,862	Havas S.A.		16,852
	170	Icade		12,529
	38	Iliad S.A.		3,972
	214	Ipsen		12,178
	138	IPSOS		5,039
	80	Kaufman & Broad S.A.		4,549
	56	LISI		6,595
	140	Manitou BF S.A.		7,917
	182	Mercialys S.A.		7,107
	180	Mobistar S.A.		16,265
	66	Neopost S.A.		7,655
	90	Nexity		5,975
	72	Norbert Dentressangle		8,646
	394	NRJ Group		5,142
	50	Pierre & Vacances		6,557
	16	Puma AG Rudolf Dassler Sport		6,841
	218	Remy Cointreau S.A.		16,732
	58	Rubis		5,538
	152	Saft Groupe S.A.		7,483
	948	SCOR SE		25,785
	58	Societe Immobiliere de Location pour l'Industrie et le Commerce		8,948
	48	Sperian Protection		6,723
	40	Spir Communication		4,745
	236	Teleperformance		9,379
	70	Trigano S.A.		3,663
	128	UbiSoft Entertainment S.A.*		10,498
	46	Vilmorin & Cie		6,676
	210	Zodiac S.A.		14,522
				481,134
		Germany—8.0%
	260	Aareal Bank AG		13,455
	126	AWD Holding AG		4,193
	154	Bechtle AG		7,814
	330	Comdirect Bank AG		4,712
	72	Demag Cranes AG		4,102
	184	Deutsche Euroshop AG		7,360
	462	Deutz AG*		6,303
	248	Douglas Holding AG		15,762
	270	Duerr AG*		13,344
	68	ElringKlinger AG		7,477
	618	Epcos AG		12,428
	524	ERGO Previdenza SpA		3,074
	116	Fielmann AG		7,946

Number of Shares			Value
		Common Stocks and Other Equity Interests (Continued)
	54	Fuchs Petrolub AG	$	5,430
	128	GFK AG		5,152
	164	Indus Holding AG		6,119
	272	IVG Immobilien AG		12,278
	886	Jenoptik AG*		8,998
	550	Kloeckner-Werke AG		12,214
	194	Koenig & Bauer AG		6,736
	168	Krones AG		15,385
	306	KUKA AG		12,453
	184	Leoni AG		11,684
	1,124	Medion AG*		30,929
	616	Merchants Trust (The) PLC		6,475
	342	MLP AG		4,562
	50	MPC Muenchmeyer Petersen Capital AG		4,083
	406	MVV Energie AG		17,551
	472	Norddeutsche Affinerie AG		19,803
	162	Pfleiderer AG		4,277
	460	Praktiker Bau- und Heimwerkermaerkte Holding AG		16,578
	240	Premiere AG*		4,896
	26	Rational AG		5,981
	340	Rhoen Klinikum AG		10,713
	226	SGL Carbon AG*		13,252
	108	Sixt AG		5,867
	64	Software AG		5,991
	152	Stada Arzneimittel AG		9,647
	264	Takkt AG		5,122
	2,056	Thiel Logistik AG*		7,853
	2,836	Thomas Cook Group PLC*		17,674
	252	United Internet AG		5,505
	84	Vossloh AG		9,898
	142	Wincor Nixdorf AG		14,083
				425,159
		Gibraltar—0.1%
	6,110	PartyGaming PLC*		3,966
		India—0.4%
	450	Vedanta Resources PLC		20,566
		Ireland—1.7%
	370	C&C Group PLC		2,955
	338	DCC PLC		9,281
	112	FBD Holdings PLC		4,010
	6,148	Fyffes PLC		8,450
	1,910	Glanbia PLC		12,849
	656	Grafton Group PLC		7,298
	1,522	Greencore Group PLC		10,349
	310	Iaws Group PLC		7,288
	3,540	Independent News & Media PLC		12,957

See Notes to Financial Statements.

105

Schedule of Investments (Continued)

PowerShares FTSE RAFI Europe Small-Mid Portfolio

October 31, 2007

Number of Shares			Value
		Common Stocks and Other Equity Interests (Continued)
	290	Kingspan Group PLC	$	6,818
	984	United Drug PLC		4,911
	75,184	Waterford Wedgwood PLC*		3,046
				90,212
		Italy—7.5%
	370	AcegasAps SpA		4,438
	420	Ansaldo STS SpA*		6,107
	540	Astaldi SpA		4,988
	906	Autogrill SpA		18,075
	404	Autostrada Torino-Milano SpA		9,936
	108	Banca Italease SpA		2,272
	238	Banca Popolare dell'Etruria e del Lazio		4,376
	484	Banco di Desio e della Brianza SpA		5,462
	370	Brembo SpA		5,182
	756	Bulgari SpA		11,812
	934	Caltagirone Editore SpA		6,591
	762	Caltagirone SpA		8,103
	2,444	Cam Finanziaria SpA		6,064
	666	Cementir SpA		6,600
	9,408	Cofide SpA		17,204
	928	Credito Artigiano SpA		5,370
	2,196	Cremonini SpA		6,727
	104	Danieli & Co. SpA		4,078
	256	Danieli & Co. SpA Rnc		7,515
	958	Davide Campari-Milano SpA		10,277
	204	Esprinet SpA		3,483
	368	Finnlines Oyj		8,300
	1,006	Gemina SpA		3,911
	2,890	Gruppo Editoriale L'Espresso SpA		14,582
	3,912	Hera SpA		17,559
	60	Hugo Boss AG		3,924
	1,510	Impregilo SpA*		12,103
	880	Indesit Co. SpA		15,583
	562	Interpump Group SpA		6,395
	2,358	Iride SpA		8,972
	3,356	KME Group SpA*		9,419
	22	Lenzing AG		12,729
	504	Marazzi Group SpA		6,439
	394	MARR SpA		4,503
	220	Permasteelisa SpA		5,761
	884	Piccolo Credito Valtellinese Scarl		12,271
	170	Pirelli & C Real Estate SpA		8,394
	2,766	RCS MediaGroup SpA		15,096
	748	Recordati SpA		7,483
	390	Risanamento SpA		2,878
	1,902	Safilo Group SpA		8,069
	2,112	Sirti SpA		8,235
	1,090	Societa Iniziative Autostradali e Servizi SpA		17,315
	794	Sogefi SpA		7,633
	3,038	Sorin SpA*		7,687

Number of Shares			Value
		Common Stocks and Other Equity Interests (Continued)
	21,362	Telecom Italia Media SpA	$	8,468
	1,372	Tiscali SpA*		4,952
	64	Tod's SpA		5,365
				398,686
		Liechtenstein—0.3%
	124	Liechtenstein Landesbank		11,929
	26	Verwalt & Privat-Bank AG		6,797
				18,726
		Luxembourg—0.4%
	4,202	COLT Telecom Group S.A.*		15,756
	176	Generale de Sante		7,682
				23,438
		Netherlands—6.1%
	254	Aalberts Industries N.V.		6,104
	78	Arcadis N.V.		6,334
	220	ASM International N.V.		6,207
	288	Boskalis Westminster CVA		17,454
	260	Draka Holding		11,277
	144	Eurocommercial Properties N.V. CVA		8,475
	174	Fugro N.V. CVA		15,230
	1,418	Getronics N.V.		12,842
	214	Heijmans N.V. CVA		8,288
	176	Hunter Douglas N.V.		16,408
	480	Imtech N.V.		14,833
	104	Intervest Offices		4,022
	132	KAS Bank N.V. CVA		4,965
	258	Koninklijke Vopak N.V.		14,740
	1,060	Koninklijke Wessanen N.V.		17,866
	4,014	Laurus N.V.*		25,610
	228	Nutreco Holding N.V.		15,553
	348	OPG Groep N.V. CVA		12,028
	316	Qiagen N.V.*		7,392
	362	SBM Offshore N.V.		13,910
	182	Sligro Food Group N.V.		6,970
	62	Smit Internationale N.V.		5,991
	216	Stork N.V.		14,678
	316	Univar N.V.		24,798
	174	USG People N.V.		5,271
	888	Van der Moolen Holding N.V.		4,625
	218	Vastned Offices/Industrial		7,708
	124	Vastned Retail N.V.		10,635
	272	Wegener N.V. CVA		6,639
				326,853
		Norway—2.3%
	788	Aker Yards A/S		12,972
	272	Cermaq ASA		4,150
	228	Ekornes ASA		4,779
	112	Fred Olsen Energy ASA		5,671
	336	Golar LNG Ltd.		8,569

See Notes to Financial Statements.

106

Schedule of Investments (Continued)

PowerShares FTSE RAFI Europe Small-Mid Portfolio

October 31, 2007

Number of Shares			Value
		Common Stocks and Other Equity Interests (Continued)
	448	Hafslund ASA, Class B	$	13,212
	308	Odfjell SE, Class B		4,884
	562	Petroleum Geo-Services ASA		16,471
	466	ProSafe SE		8,229
	220	Schibsted ASA		12,446
	666	Sparebank 1 SR Bank		8,524
	434	Sparebanken Midt-Norge		6,198
	188	TGS Nopec Geophysical Co. ASA*		3,138
	528	Tomra Systems ASA		3,819
	786	Veidekke ASA		8,237
				121,299
		Portugal—1.3%
	688	Banif, SGPS S.A.		5,106
	2,938	Jeronimo Martins, SGPS S.A.		21,763
	840	Mota Engil, SGPS S.A.		6,927
	542	PT Multimedia Servicos de Telecomunicacoes e Multimedia, SGPS S.A.		7,363
	2,016	SAG GEST-Solucoes Automovel Globais, SGPS S.A.		7,437
	752	Semapa - Sociedade de Investimento e Gestao, SGPS S.A.		12,185
	676	Sonae Industria-SGPS S.A.*		8,186
				68,967
		Singapore—0.1%
	1,558	BW Offshore Ltd.*		6,936
		Spain—4.6%
	260	Abengoa S.A.		10,626
	402	Antena 3 de Television S.A.		7,119
	136	Banco de Valencia S.A.		7,756
	240	Banco Guipuzcoano S.A.		4,917
	382	Banco Pastor S.A.		6,466
	416	Campofrio Alimentacion S.A.*		7,264
	106	Cementos Portland Valderrivas S.A.		13,219
	248	Cia de Distribucion Integral Logista S.A.		19,321
	362	Cie Automotive S.A.		4,347
	656	Cintra Concesiones de Infraestructuras de Transporte S.A.		11,446
	156	Corp. Financiera Alba		11,668
	508	Gamesa Corporacion Tecnologica S.A.		25,724
	216	Grupo Catalana Occidente S.A.		8,175
	672	Grupo Empresarial Ence S.A.		8,526
	338	Indra Sistemas S.A.		9,795
	442	NH Hoteles S.A.*		9,886
	270	Obrascon Huarte Lain S.A.		12,191
	608	Promotora de Informaciones S.A.		11,893
	220	Prosegur, Compania de Seguridad S.A.		8,562
	254	Sogecable S.A.*		10,242

Number of Shares			Value
		Common Stocks and Other Equity Interests (Continued)
	512	Sol Melia S.A.	$	9,815
	288	SOS Cuetara S.A.		5,875
	88	Tecnicas Reunidas S.A.		7,384
	1,130	Uralita S.A.		11,477
				243,694
		Sweden—5.3%
	308	AarhusKarlshamn AB		7,214
	262	Alfa Laval AB		20,718
	390	Axfood AB		13,733
	424	Bilia AB, Class A		6,849
	574	Billerud AB		6,903
	768	Boliden AB		13,522
	484	Brostrom AB, Class B		4,851
	276	Cardo AB		9,762
	786	Castellum AB		9,947
	470	D Carnegie AB		10,344
	724	Eniro AB		9,248
	848	Fabege AB		10,065
	528	Getinge AB, Class B		13,946
	412	Gunnebo AB		4,858
	238	Hakon Invest AB		4,321
	166	Haldex AB		3,412
	558	Hexagon AB, Class B		13,421
	224	Hoganas AB, Class B		5,370
	872	Hufvudstaden AB, Class A		9,562
	274	JM AB		6,063
	772	Kinnevik Investment AB, Class B		19,115
	482	Kungsleden AB		6,857
	630	Latour Investment AB, Class B		10,152
	486	Lundin Petroleum AB*		5,826
	136	Modern Times Group AB, Class B		9,546
	526	Nobia AB		4,610
	286	OMX AB		12,005
	340	Oresund Investment AB		7,991
	456	Peab AB		4,122
	490	Ratos AB, Class B		14,366
	236	Wallenstam Byggnads AB, Class B		4,378
				283,077
		Switzerland—7.9%
	48	Allreal Holding AG		5,591
	2	Bank Sarasin & Cie AG, Class B		9,439
	24	Banque Cantonale Vaudoise		10,892
	20	Barry Callebaut AG		16,039
	162	Basler Kantonalbank		15,920
	72	BB Biotech AG		6,318
	74	BB Medtech AG		5,009
	4	Bell Holding AG		6,868
	54	Bucher Industries AG		12,812
	62	Charles Voegele Holding AG		5,387
	4	Conzzeta Holding AG		9,473

See Notes to Financial Statements.

107

Schedule of Investments (Continued)

PowerShares FTSE RAFI Europe Small-Mid Portfolio

October 31, 2007

Number of Shares			Value
		Common Stocks and Other Equity Interests (Continued)
	100	Daetwyler Holding AG	$	8,050
	278	EFG International		12,988
	50	Emmi AG		7,321
	122	EMS-Chemie Holding AG		17,894
	12	Energiedienst Holding AG		7,020
	66	Fastweb		3,084
	18	Flughafen Zuerich AG		7,276
	16	Forbo Holding AG		9,594
	24	Galenica AG		11,596
	80	Geberit AG		10,774
	20	Georg Fischer AG		14,995
	2	Jelmoli Holding AG		5,211
	16	Kuoni Reisen Holding AG		7,993
	2	Lindt & Spruengli AG		6,902
	346	Logitech International S.A.*		12,018
	44	Luzerner Kantonalbank		9,946
	412	Micronas Semiconductor Hold*		5,492
	20	Nobel Biocare Holding AG		5,815
	16	OC Oerlikon Corp. AG		7,592
	106	Panalpina Welttransport Holding AG		19,956
	228	PSP Swiss Property AG		12,334
	18	PubliGroupe AG		6,336
	26	Rieter Holding AG		15,063
	58	Schmolz + Bickenbach AG		5,725
	8	Schweizerische National- Versicherungs-Gesellschaft		6,274
	8	Sika AG		15,806
	52	Sonova Holding AG		5,832
	22	St. Galler Kantonalbank		9,680
	18	Straumann Holding AG		5,020
	10	Sulzer AG		16,030
	124	Swiss Prime Site AG		7,045
	34	Valora Holding AG		8,654
	248	Vontobel Holding AG		12,731
				421,795
		United Kingdom—27.7%
	832	Abbot Group PLC		5,872
	1,512	Aberdeen Asset Management PLC		6,415
	422	Aberforth Smaller Companies Trust PLC		6,176
	390	Acergy S.A.		11,212
	366	Admiral Group PLC		7,839
	3,170	Aegis Group PLC		8,297
	696	Aga Foodservice Group PLC		6,000
	884	Aggreko PLC		11,496
	864	Alfred McAlpine PLC		10,042
	1,904	Amlin PLC		12,696
	2,852	ARM Holdings PLC		8,798
	2,406	Ashtead Group PLC		5,448
	366	Atkins WS PLC		9,215
	632	Babcock International Group		7,700

Number of Shares			Value
		Common Stocks and Other Equity Interests (Continued)
	544	Bankers Investment Trust (The) PLC	$	4,961
	576	Bellway PLC		12,863
	1,066	Benfield Group Ltd.		6,726
	540	Berkeley Group Holdings PLC		19,104
	1,330	Biffa PLC		7,183
	1,792	Bodycote International		10,917
	574	Bovis Homes Group PLC		7,912
	1,740	Brit Insurance Holdings PLC		11,729
	2,290	British Assets Trust PLC		6,779
	522	British Empire Securities and General Trust PLC		5,243
	1,578	Brixton PLC		12,145
	496	BSS Group PLC		4,871
	262	Burren Energy PLC		6,586
	130	Cairn Energy PLC		6,354
	288	Caledonia Investments PLC		12,187
	1,112	Capita Group PLC		17,302
	206	Capital & Regional PLC		2,908
	1,460	Carillion PLC		12,374
	330	Carpetright PLC		8,309
	2,204	Carphone Warehouse Group (The) PLC		16,048
	944	Catlin Group Ltd.		9,835
	1,626	Cattles PLC		11,518
	350	Charter PLC*		7,881
	5,494	Christian Salvesen PLC		10,414
	1,154	City of London Investment Trust (The) PLC		7,426
	674	Close Brothers Group PLC		10,753
	330	CLS Holdings PLC*		3,222
	4,052	Cobham PLC		17,719
	1,106	Collins Stewart PLC		4,905
	2,504	Computacenter PLC		10,715
	1,064	Cookson Group PLC		18,412
	462	Croda International		6,401
	974	Dairy Crest Group PLC		12,191
	240	Dana Petroleum PLC*		6,431
	1,516	Davis Service Group (The) PLC		17,132
	696	De La Rue PLC		11,856
	2,010	Delta PLC		5,512
	144	Derwent London PLC		4,972
	10,670	Dimension Data Holdings PLC		13,798
	602	Drax Group PLC		8,448
	4,340	DS Smith PLC		20,827
	876	Dunedin Income Growth Investment Trust PLC		4,822
	1,092	easyJet PLC*		15,040
	2,826	Elementis PLC		5,812
	1,486	Enodis PLC		6,459
	4,204	F&C Asset Management PLC		19,038
	2,506	Fiberweb PLC		2,616
	1,188	Filtrona PLC		6,336
	350	Findel PLC		5,162

See Notes to Financial Statements.

108

Schedule of Investments (Continued)

PowerShares FTSE RAFI Europe Small-Mid Portfolio

October 31, 2007

Number of Shares			Value
		Common Stocks and Other Equity Interests (Continued)
	146	Forth Ports PLC	$	5,596
	4,594	Galiform PLC		10,975
	1,586	Galliford Try PLC		5,181
	1,534	Game Group PLC		6,357
	1,412	GCAP Media PLC		5,316
	178	Go-Ahead Group PLC		9,980
	622	Great Portland Estates PLC		7,384
	566	Greene King PLC		10,647
	62	Greggs PLC		6,449
	868	Halfords Group PLC		6,410
	1,620	Halma PLC		7,606
	428	Headlam Group PLC		4,970
	680	Helical Bar PLC		6,237
	1,872	Henderson Group PLC		7,272
	1,596	Hiscox Ltd.		9,515
	4,256	HMV Group PLC		11,118
	268	Holidaybreak PLC		4,312
	124	Homeserve PLC		4,642
	626	Hunting PLC		9,571
	1,462	ICAP PLC		17,767
	1,100	Informa PLC		12,225
	1,156	Inmarsat PLC		12,319
	200	Intermediate Capital Group PLC		6,880
	1,090	Interserve PLC		11,933
	354	Intertek Group PLC		7,567
	1,286	Jardine Lloyd Thompson Group PLC		10,232
	2,160	JJB Sports PLC		7,763
	718	John Menzies PLC		8,502
	1,834	John Wood Group PLC		15,906
	828	Johnson Service Group PLC		2,520
	1,486	Johnston Press PLC		9,269
	298	Keller Group PLC		7,020
	182	Kier Group PLC		8,114
	792	Laird Group PLC		10,447
	570	Law Debenture Corp. PLC		4,579
	362	London Stock Exchange Group PLC		12,634
	1,326	Lookers PLC		4,938
	443	Luminar Group Holdings PLC		5,853
	488	Luminar Group Holdings PLC Class B		610
	70	Mapeley Ltd.		2,777
	994	Marshalls PLC		6,664
	1,774	Marston's PLC		12,677
	1,142	Mcbride PLC		4,122
	2,316	Meggitt PLC		16,418
	540	Michael Page International PLC		4,913
	590	Minerva PLC		2,234
	2,180	Misys PLC		10,948
	1,138	Mitie Group		6,584
	888	Monks Investment Trust (The) PLC		6,461
	1,354	Morgan Crucible Co.		8,930
	282	Morgan Sindall PLC		9,619

Number of Shares			Value
		Common Stocks and Other Equity Interests (Continued)
	370	Murray Income Trust PLC	$	5,611
	512	Murray International Trust PLC, Class O		7,440
	1,250	N Brown Group PLC		7,511
	2,466	Northumbrian Water Group PLC		16,828
	506	Paragon Group of Cos. PLC		2,491
	6,662	Pendragon PLC		9,307
	930	Perpetual Income and Growth Investment Trust PLC, Class O		5,023
	522	Petrofac Ltd.		5,585
	2,902	Premier Farnell PLC		9,751
	1,872	Premier Foods PLC		8,769
	272	Premier Oil PLC*		7,006
	2,148	PZ Cussons PLC		8,690
	2,370	QinetiQ PLC		9,268
	352	Quintain Estates & Development PLC		4,493
	848	Redrow PLC		7,020
	1,898	Regus Group PLC		4,327
	426	RIT Capital Partners PLC		10,044
	252	Rotork PLC		5,743
	818	RPC Group PLC		4,754
	2,990	Sage Group (The) PLC		15,031
	954	Scottish Investment Trust PLC		10,484
	1,116	Scottish Mortgage Investment Trust PLC		15,428
	1,232	Serco Group PLC		11,536
	362	Shaftesbury PLC		4,230
	1,648	Shanks Group PLC		8,216
	568	SIG PLC		12,507
	3,332	SMG PLC		2,353
	2,176	Smiths News PLC		5,605
	464	Spectris PLC		8,362
	334	Spirax-Sarco Engineering PLC		7,486
	5,576	Spirent Communications PLC*		8,079
	1,120	SSL International PLC		11,982
	1,226	St. Ives PLC		7,258
	972	St. James's Place PLC		7,834
	350	St. Modwen Properties PLC		3,566
	664	Stolt-Nielsen S.A.		19,337
	1,806	Taylor Nelson Sofres PLC		8,085
	1,082	TDG PLC		5,282
	980	Telent PLC		10,617
	364	Temple Bar Investment Trust PLC		6,114
	1,254	Templeton Emerging Markets Investment Trust PLC, Class O		12,497
	1,382	Thus Group PLC*		4,235
	766	TR Property Investment Trust PLC		3,087
	384	TR Property Investment Trust PLC		738
	1,560	TT electronics PLC		4,796
	684	Tullett Prebon PLC		6,280
	1,006	Tullow Oil PLC		13,333
	468	UK Coal PLC		4,958
	168	Ultra Electronics Holdings		4,369

See Notes to Financial Statements.

109

Schedule of Investments (Continued)

PowerShares FTSE RAFI Europe Small-Mid Portfolio

October 31, 2007

Number of Shares			Value
		Common Stocks and Other Equity Interests (Continued)
	78	Union Financiere de France BQE S.A.	$	4,982
	2,070	Uniq PLC		9,159
	690	VT Group PLC		8,629
	924	Weir Group (The) PLC		17,026
	528	Wetherspoon (J.D.) PLC		5,950
	1,308	WH Smith PLC		10,678
	1,074	Wincanton PLC		9,449
	1,506	Witan Investment Trust PLC		15,392
	1,402	Yule Catto & Co. PLC		6,553
				1,475,487
		United States—1.6%
	1,276	Edinburgh Investment Trust (The) PLC		12,949
	48,254	Euro Disney S.C.A.*		6,283
	184	Fidelity European Values PLC		5,305
	426	JPMorgan Fleming Mercantile Investment Trust PLC		10,637
	834	JPMorgan Japanese Investment Trust PLC*		3,656
	286	Kloeckner & Co. AG		15,098
	524	Merrill Lynch World Mining Trust PLC		7,478
	306	MTU Aero Engines Holding AG		18,683
	370	Savills PLC		2,815
				82,904
		Total Common Stocks and Other Equity Interests (Cost $4,893,118)		5,270,208
		Preferred Stocks—0.7%
		Germany—0.5%
	40	Fuchs Petrolub AG		4,106
	308	Jungheinrich AG		15,155
	114	Sixt AG		4,371
				23,632
		Italy—0.2%
	188	Hugo Boss AG		12,702
		Total Preferred Stocks (Cost $33,621)		36,334
		Rights—0.0%
		Sweden—0.0%
	724	Eniro AB, expiring 11/27/2007* (Cost $0)		208

Number of Shares			Value
		Money Market Fund—0.1%
	3,096	Liquid Assets Portfolio Private Class** (Cost $3,096)	$	3,096
		Total Investments (Cost $4,929,835)—99.8%		5,309,846
		Other assets less liabilities—0.2%		11,989
		Net Assets—100.0%	$	5,321,835

*  Non-income producing security.

**  Affiliated investment.

See Notes to Financial Statements.

110

Schedule of Investments

PowerShares FTSE RAFI Japan Portfolio

October 31, 2007

Number of Shares			Value
		Common Stocks and Other Equity Interests—98.7%
		Consumer Discretionary—23.9%
	500	Aisin Seiki Co. Ltd.	$	20,384
	100	Aoyama Trading Co. Ltd.		2,598
	100	Benesse Corp.		3,721
	1,000	Bosch Corp. (Germany)		5,196
	1,600	Bridgestone Corp.		35,182
	1,000	Calsonic Kansei Corp.		5,343
	400	Canon Marketing Japan, Inc.		7,824
	200	Casio Computer Co. Ltd.		1,881
	2,300	Daiei (The), Inc*		16,220
	1,000	Daihatsu Motor Co. Ltd.		10,548
	200	Daito Trust Construction Co. Ltd.		9,195
	1,000	Daiwa House Industry Co. Ltd.		14,174
	1,000	Denso Corp.		40,335
	3	Dentsu, Inc.		7,833
	200	EDION Corp.		2,280
	100	Fast Retailing Co. Ltd.		5,742
	3,000	Fuji Heavy Industries Ltd.		15,509
	4	Fuji Television Network, Inc.		8,050
	100	Funai Electric Co. Ltd.		4,224
	1,000	H2O Retailing Corp.		8,318
	1,000	Haseko Corp.*		2,385
	400	Heiwa Corp.		4,476
	2,400	Honda Motor Co. Ltd.		89,517
	300	Isetan Co. Ltd.		4,039
	3,000	Isuzu Motors Ltd.		14,781
	200	Izumi Co. Ltd.		2,977
	1,000	J Front Retailing Co. Ltd.*		8,978
	1,000	Koito Manufacturing Co. Ltd.		13,861
	100	Makita Corp.		4,779
	700	Marui Group Co. Ltd.		7,238
	4,000	Matsushita Electric Industrial Co. Ltd.		75,986
	3,000	Mazda Motor Corp.		17,877
	14,000	Mitsubishi Motors Corp.*		27,324
	2,000	Mitsukoshi Ltd.		9,229
	1,000	NHK Spring Co. Ltd.		8,527
	1,000	Nikon Corp.		31,661
	40	Nippon Television Network Corp.		5,149
	9,300	Nissan Motor Co. Ltd.		106,968
	1,000	Nisshinbo Industries, Inc.		13,558
	300	NOK Corp.		6,623
	1,000	Onward Holdings Co. Ltd.		10,262
	100	Oriental Land Co. Ltd.		5,933
	700	Pioneer Corp.		7,754
	100	Sankyo Co. Ltd.		4,250
	14,000	Sanyo Electric Co. Ltd.		23,073
	300	Sega Sammy Holdings, Inc.		4,125
	1,000	Sekisui Chemical Co. Ltd.		6,800
	1,000	Sekisui House Ltd.		12,725
	1,000	Sharp Corp.		15,657
	100	Shimamura Co. Ltd.		9,680
	100	Shimano, Inc.		3,626

Number of Shares			Value
		Common Stocks and Other Equity Interests (Continued)
	1,700	Sony Corp.	$	83,168
	200	Stanley Electric Co. Ltd.		4,415
	1,000	Sumitomo Forestry Co. Ltd.		7,434
	500	Sumitomo Rubber Industries Ltd.		6,050
	700	Suzuki Motor Corp.		22,830
	200	Toho Co. Ltd.		3,973
	100	Tokyo Broadcasting System, Inc.		2,654
	2,000	Toyobo Co. Ltd.		4,684
	200	Toyoda Gosei Co. Ltd.		7,130
	300	Toyota Auto Body Co. Ltd.		4,822
	300	Toyota Industries Corp.		12,751
	3,700	Toyota Motor Corp.		210,860
	1	TV Asahi Corp.		1,735
	3,000	Victor Co. of Japan Ltd.		6,375
	60	Yamada Denki Co. Ltd.		6,141
	300	Yamaha Corp.		6,948
	400	Yamaha Motor Co. Ltd.		11,311
				1,187,656
		Consumer Staples—4.7%
	1,400	Aeon Co. Ltd.		21,907
	1,000	Ajinomoto Co., Inc.		11,224
	1,000	Asahi Breweries Ltd.		16,498
	200	Coca-Cola West Holdings Co. Ltd.		4,623
	1,000	Ezaki Glico Co. Ltd.		10,435
	100	FamilyMart Co. Ltd.		2,915
	200	House Foods Corp.		3,156
	10	Japan Tobacco, Inc.		58,029
	1,000	Kikkoman Corp.		12,612
	2,000	Kirin Holdings Co. Ltd.		27,844
	200	Lawson, Inc.		6,905
	1,000	Meiji Seika Kaisha Ltd.		4,398
	500	Nisshin Seifun Group, Inc.		4,498
	100	Nissin Food Products Co. Ltd.		3,140
	500	Q.P. Corp.		4,927
	200	Ryoshoku Ltd.		4,459
	6,000	Seiyu (The) Ltd.* (United States)		7,286
	1,000	Shiseido Co. Ltd.		23,984
	200	Yakult Honsha Co. Ltd.		4,615
				233,455
		Energy—2.8%
	3,000	Cosmo Oil Co. Ltd.		12,881
	3	INPEX Holdings, Inc.		32,268
	2,500	Nippon Mining Holdings, Inc.		23,377
	5,000	Nippon Oil Corp.		43,848
	1,400	Showa Shell Sekiyu K.K.		16,382
	1,000	TonenGeneral Sekiyu K.K. (United States)		10,036
				138,792
		Financials—10.0%
	540	Acom Co. Ltd.		12,881
	450	Aiful Corp.		10,559

See Notes to Financial Statements.

111

Schedule of Investments (Continued)

PowerShares FTSE RAFI Japan Portfolio

October 31, 2007

Number of Shares			Value
		Common Stocks and Other Equity Interests (Continued)
	1,000	Aioi Insurance Co. Ltd.	$	5,777
	1,000	Bank of Kyoto (The) Ltd.		12,708
	1,000	Bank of Yokohama (The) Ltd.		7,043
	1,000	Chugoku Bank (The) Ltd.		14,477
	300	Credit Saison Co. Ltd.		9,498
	1,000	Daiwa Securities Group, Inc.		9,524
	1,000	Fuji Fire & Marine Insurance (The) Co. Ltd.		3,600
	200	Hitachi Capital Corp.		2,646
	1,000	Iyo Bank (The) Ltd.		9,741
	1,000	Joyo Bank (The) Ltd.		6,167
	200	Leopalace21 Corp.		6,349
	700	Millea Holdings, Inc.		27,445
	6,215	Mitsubishi UFJ Financial Group, Inc.		61,404
	1,110	Mitsubishi UFJ Lease & Finance Co. Ltd.		38,225
	2,000	Mitsui Sumitomo Insurance Co. Ltd.		22,761
	5	Mizuho Financial Group, Inc.		27,887
	500	Nikko Cordial Corp. (United States)		7,165
	1,000	NIPPONKOA Insurance Co. Ltd.		9,108
	1,700	Nomura Holdings, Inc.		30,229
	1,500	Orient Corp.		2,095
	70	ORIX Corp.		14,093
	400	Promise Co. Ltd.		11,970
	1,000	San-In Godo Bank (The) Ltd.		8,986
	330	Sanyo Shinpan Finance Co. Ltd.		10,305
	1	Sapporo Hokuyo Holdings, Inc.		10,236
	20	SFCG Co. Ltd.		3,294
	2,000	Shinsei Bank Ltd.		6,419
	1,000	Sompo Japan Insurance, Inc.		11,658
	3	Sumitomo Mitsui Financial Group, Inc.		24,305
	1,000	Sumitomo Trust & Banking (The) Co. Ltd.		7,382
	200	T&D Holdings, Inc.		11,918
	610	Takefuji Corp.		15,556
	1,000	Tokyu Land Corp.		10,270
	1,000	Yamaguchi Financial Group, Inc.		11,667
				495,348
		Health Care—2.9%
	100	Alfresa Holdings Corp.		5,803
	300	Astellas Pharma, Inc.		13,245
	300	Chugai Pharmaceutical Co. Ltd. (Switzerland)		5,178
	400	Daiichi Sankyo Co. Ltd.		11,346
	200	Eisai Co. Ltd.		8,362
	500	Mediceo Paltac Holdings Co. Ltd.		7,239
	1,000	Mitsubishi Tanabe Pharma Corp.		11,424
	100	Ono Pharmaceutical Co. Ltd.		5,152
	1,000	Shionogi & Co. Ltd.		16,975
	200	Suzuken Co. Ltd.		6,436
	700	Takeda Pharmaceutical Co. Ltd.		43,476
	200	Terumo Corp.		9,732
				144,368

Number of Shares			Value
		Common Stocks and Other Equity Interests (Continued)
		Industrials—21.9%
	3,000	All Nippon Airways Co. Ltd.	$	11,528
	1,000	Amada Co. Ltd.		10,010
	2,000	Asahi Glass Co. Ltd.		27,272
	3	Central Japan Railway Co.		30,967
	1,000	Dai Nippon Printing Co. Ltd.		14,460
	300	Daikin Industries Ltd.		15,041
	6	East Japan Railway Co.		49,287
	1,000	Ebara Corp.		4,684
	100	FANUC Ltd.		10,877
	1,000	Fuji Electric Holdings Co. Ltd.		3,773
	1,000	Fukuyama Transporting Co. Ltd.		4,441
	1,000	Furukawa Electric (The) Co. Ltd.		4,771
	1,000	Hankyu Hanshin Holdings, Inc.		4,675
	1,000	Hino Motors Ltd.		7,174
	1,000	Hitachi Cable Ltd.		6,636
	100	Hitachi Construction Machinery Co. Ltd.		4,060
	300	Hitachi High-Technologies Corp.		6,714
	1,000	IHI Corp.		2,377
	4,000	ITOCHU Corp.		49,998
	7,000	Japan Airlines Corp.*		15,726
	500	JS Group Corp.		8,063
	200	JTEKT Corp.		3,808
	2,000	Kajima Corp.		7,043
	1,000	Kamigumi Co. Ltd.		8,102
	3,000	Kawasaki Heavy Industries Ltd.		10,747
	1,000	Kawasaki Kisen Kaisha, Ltd.		13,714
	1,000	Keihan Electric Railway Co. Ltd.		3,990
	1,000	Keio Corp.		6,072
	1,000	Keisei Electric Railway Co. Ltd.		5,482
	3,000	Kintetsu Corp.		9,108
	200	Kokuyo Co. Ltd.		1,756
	700	Komatsu Ltd.		23,134
	2,000	Kubota Corp.		16,758
	7,000	Marubeni Corp.		59,383
	2,000	Matsushita Electric Works Ltd.		22,050
	3,200	Mitsubishi Corp.		98,538
	4,000	Mitsubishi Electric Corp.		48,436
	5,000	Mitsubishi Heavy Industries Ltd.		28,798
	4,000	Mitsui & Co. Ltd.		102,354
	1,000	Mitsui Engineering & Shipbuilding Co. Ltd.		5,812
	1,000	Mitsui O.S.K. Lines Ltd.		16,342
	3,000	Nagoya Railroad Co. Ltd.		8,822
	1,000	NGK Insulators Ltd.		35,130
	2,000	Nippon Express Co. Ltd.		9,993
	1,000	Nippon Sheet Glass Co. Ltd.		6,055
	2,000	Nippon Yusen Kabushiki Kaisha		20,471
	2,000	Nishimatsu Construction Co. Ltd.		6,141
	1,000	Nishi-Nippon Railroad Co. Ltd.		3,634
	2,000	Obayashi Corp.		10,027
	1,000	Odakyu Electric Railway Co. Ltd.		6,983

See Notes to Financial Statements.

112

Schedule of Investments (Continued)

PowerShares FTSE RAFI Japan Portfolio

October 31, 2007

Number of Shares			Value
		Common Stocks and Other Equity Interests (Continued)
	300	Secom Co. Ltd.	$	15,379
	2,000	Shimizu Corp.		10,392
	100	Sohgo Security Services Co. Ltd.		1,656
	2,400	Sumitomo Corp.		41,282
	1,200	Sumitomo Electric Industries Ltd.		19,288
	1,000	Sumitomo Heavy Industries Ltd.		13,063
	3,000	Taisei Corp.		8,978
	1,000	Tobu Railway Co. Ltd.		4,701
	1,000	Toda Corp.		5,213
	1,000	Tokyu Corp.		6,462
	300	Toppan Forms Co. Ltd.		2,935
	2,000	Toppan Printing Co. Ltd.		19,465
	600	Toyota Tsusho Corp.		16,706
	4	West Japan Railway Co.		19,951
	1,000	Yamato Holdings Co. Ltd.		14,668
				1,091,356
		Information Technology—11.2%
	100	Advantest Corp.		2,871
	500	Alps Electric Co. Ltd.		6,219
	1,000	Brother Industries Ltd.		13,332
	1,200	Canon, Inc.		59,853
	600	Citizen Holdings Co. Ltd.		6,448
	100	CSK Holdings Corp.		3,895
	900	FUJIFILM Holdings Corp.		42,937
	6,000	Fujitsu Ltd.		46,840
	12,000	Hitachi Ltd.		81,295
	200	Hitachi Maxell Ltd.		2,302
	200	Hoya Corp.		7,234
	200	Konami Corp.		5,881
	500	Konica Minolta Holdings, Inc.		8,674
	200	Kyocera Corp.		16,758
	200	Murata Manufacturing Co. Ltd.		12,057
	8,000	NEC Corp.		39,554
	400	NEC Electronics Corp.*		10,895
	100	Nidec Corp.		7,503
	1,000	Nippon Electric Glass Co. Ltd.		16,906
	100	Nomura Research Institute Ltd.		3,513
	3	NTT Data Corp.		13,610
	4,000	Oki Electric Industry Co. Ltd.		6,766
	300	OMRON Corp.		7,299
	100	Oracle Corp. Japan (United States)		4,580
	1,000	Ricoh Co. Ltd.		19,560
	200	Rohm Co. Ltd.		17,435
	500	Seiko Epson Corp.		11,688
	200	Sumco Corp.		7,217
	100	TDK Corp.		8,145
	100	Tokyo Electron Ltd.		5,820
	7,000	Toshiba Corp.		58,595
	300	Yokogawa Electric Corp.		3,755
				559,437

Number of Shares			Value
		Common Stocks and Other Equity Interests (Continued)
		Materials—7.9%
	2,000	Asahi Kasei Corp.	$	15,197
	2,000	Dainippon Ink and Chemicals, Inc.		9,524
	1,000	Denki Kagaku Kogyo Kabushiki Kaisha		5,846
	1,000	Dowa Holdings Co. Ltd.		11,563
	200	Hitachi Chemical Co. Ltd.		4,875
	1,000	Hitachi Metals Ltd.		12,890
	600	JFE Holdings, Inc.		34,819
	200	JSR Corp.		5,152
	3,000	Kobe Steel Ltd.		10,695
	500	Kuraray Co. Ltd.		6,484
	1,000	Mitsubishi Gas Chemical Co., Inc.		9,906
	3,000	Mitsubishi Materials Corp.		17,357
	1,000	Mitsui Chemicals, Inc.		9,307
	1,000	Mitsui Mining & Smelting Co. Ltd.		4,181
	1,000	Nippon Light Metal Co. Ltd.		2,047
	4	Nippon Paper Group, Inc.		11,970
	5,000	Nippon Steel Corp.		32,919
	1,000	Nisshin Steel Co. Ltd.		3,799
	200	Nitto Denko Corp.		9,698
	3,000	OJI Paper Co. Ltd.		13,688
	300	Shin-Etsu Chemical Co. Ltd.		19,100
	2,000	Showa Denko K.K.		7,789
	1,000	Sumitomo Bakelite Co. Ltd.		6,081
	2,000	Sumitomo Chemical Co. Ltd.		17,678
	4,000	Sumitomo Metal Industries Ltd.		19,534
	1,000	Sumitomo Metal Mining Co. Ltd.		22,032
	1,000	Sumitomo Osaka Cement Co. Ltd.		2,481
	3,000	Taiheiyo Cement Corp.		9,368
	1,000	Taiyo Nippon Sanso Corp.		8,874
	2,000	Teijin Ltd.		9,594
	200	Tokyo Steel Manufacturing Co. Ltd.		2,753
	2,000	Toray Industries, Inc.		15,336
	1,000	Tosoh Corp.		6,341
	500	Toyo Seikan Kaisha Ltd.		8,999
	1,000	Ube Industries Ltd.		3,565
				391,442
		Telecommunication Services—6.7%
	6	Kddi Corp.		45,123
	44	Nippon Telegraph & Telephone Corp.		201,518
	59	NTT DoCoMo, Inc.		84,955
	100	Softbank Corp.		2,316
				333,912
		Utilities—6.7%
	1,700	Chubu Electric Power Co., Inc.		43,427
	1,000	Chugoku Electric Power (The) Co., Inc.		19,647
	300	Electric Power Development Co. Ltd.		11,892
	500	Hokkaido Electric Power Co., Inc.		10,756
	500	Hokuriku Electric Power Co.		10,452
	2,100	Kansai Electric Power (The) Co., Inc.		47,179

See Notes to Financial Statements.

113

Schedule of Investments (Continued)

PowerShares FTSE RAFI Japan Portfolio

October 31, 2007

Number of Shares			Value
		Common Stocks and Other Equity Interests (Continued)
	1,200	Kyushu Electric Power Co., Inc.	$	29,197
	5,000	Osaka Gas Co. Ltd.		19,387
	500	Shikoku Electric Power Co., Inc.		12,534
	1,000	Toho Gas Co. Ltd.		5,161
	1,400	Tohoku Electric Power Co., Inc.		29,509
	3,000	Tokyo Electric Power (The) Co., Inc.		75,987
	4,000	Tokyo Gas Co. Ltd.		17,730
				332,858
		Total Common Stocks and Other Equity Interests (Cost $4,981,432)		4,908,624
		Money Market Fund—0.1%
	7,094	Liquid Assets Portfolio Private Class** (Cost $7,094)		7,094
		Total Investments (Cost $4,988,526)—98.8%		4,915,718
		Other assets less liabilities—1.2%		59,519
		Net Assets—100.0%	$	4,975,237

*  Non-income producing security.

**  Affiliated investment.

COUNTRY BREAKDOWN

October 31, 2007 (Unaudited)

	Value		Net Assets
Japan	$	4,869,183		97.9	%
United States		36,161		0.7
Germany		5,196		0.1
Switzerland		5,178		0.1
Total investments		4,915,718		98.8
Other assets less liabilities		59,519		1.2
Net Assets	$	4,975,237		100.0	%

See Notes to Financial Statements.

114

Schedule of Investments

PowerShares 1-30 Laddered Treasury Portfolio

October 31, 2007

Principal Amount			Value
		United States Government Obligations 98.8%
		United States Treasury Bonds—65.4%
$	364,000	9.125%, 05/15/18	$	501,666
	368,000	8.875%, 02/15/19		504,246
	372,000	8.500%, 02/15/20		503,711
	384,000	7.875%, 02/15/21		502,380
	376,000	8.000%, 11/15/21		500,462
	402,000	7.125%, 02/15/23		503,913
	435,000	6.250%, 08/15/23		505,008
	378,000	7.625%, 02/15/25		502,888
	441,000	6.000%, 02/15/26		505,083
	411,000	6.625%, 02/15/27		504,727
	430,000	6.125%, 11/15/27		503,268
	475,000	5.250%, 02/15/29		503,871
	418,000	6.250%, 05/15/30		502,743
	1,396,000	5.375%, 02/15/31		1,512,917
	1,568,000	4.500%, 02/15/36		1,505,771
	501,000	4.750%, 02/15/37		500,883
				10,063,537
		United States Treasury Notes—33.4%
	514,000	3.375%, 02/15/08		513,077
	505,000	4.750%, 02/28/09		510,051
	522,000	3.500%, 02/15/10		517,270
	508,000	4.500%, 02/28/11		516,136
	505,000	4.625%, 02/29/12		515,416
	523,000	3.875%, 02/15/13		516,218
	523,000	4.000%, 02/15/14		516,422
	526,000	4.000%, 02/15/15		515,234
	508,000	4.500%, 02/15/16		512,009
	504,000	4.625%, 02/15/17		510,694
				5,142,527
		Total Investments—98.8% (Cost $14,984,991)		15,206,064
		Other assets less liabilities—1.2%		178,272
		Net Assets—100.0%	$	15,384,336

See Notes to Financial Statements.

115

Schedule of Investments

PowerShares Emerging Markets Sovereign Debt Portfolio

October 31, 2007

Principal Amount			Value
		Sovereign Debt Obligations—98.5%
		Brazil—9.5%
		Federal Republic of Brazil
$	406,000	12.250%, 3/06/30	$	717,605
	654,000	7.125%, 1/20/37		757,005
				1,474,610
		Bulgaria—4.6%
		Republic of Bulgaria
	602,000	8.250%, 1/15/15		711,143
		Colombia—9.6%
		Republic of Colombia
	491,000	11.750%, 2/25/20		735,273
	665,000	7.375%, 9/18/37		759,430
				1,494,703
		El Salvador—4.7%
		Republic of El Salvador
	599,000	8.250%, 4/10/32		733,775
		Indonesia—4.6%
		Republic of Indonesia
	326,000	8.500%, 10/12/35		397,683
	323,000	6.625%, 2/17/37		317,544
				715,227
		Mexico—9.7%
		United Mexican States MTN
	570,000	8.300%, 8/15/31		749,550
		United Mexican States Series A, MTN
	619,000	7.500%, 4/08/33		754,251
				1,503,801
		Panama—4.6%
		Republic of Panama
	295,000	7.125%, 1/29/26		326,713
	301,000	8.875%, 9/30/27		392,052
				718,765
		Peru—4.7%
		Republic of Peru
	284,000	7.350%, 7/21/25		327,310
	298,000	8.875%, 11/21/33		399,320
				726,630
		Philippines—9.4%
		Republic of Philippines
	562,000	9.500%, 2/02/30		756,593
	617,000	7.750%, 1/14/31		706,465
				1,463,058
		Russia—4.7%
		Russian Federation
	512,000	11.000%, 7/24/18		726,579

Principal Amount			Value
		Sovereign Debt Obligations (Continued)
		South Africa—4.6%
		Republic of South Africa
$	716,000	5.875%, 5/30/22	$	721,241
		Turkey—9.4%
		Republic of Turkey
	652,000	8.000%, 2/14/34		734,282
	729,000	6.875%, 3/17/36		726,303
				1,460,585
		Ukraine—4.6%
		Ukraine Government
	700,000	6.580%, 11/21/16		710,485
		Uruguay—4.5%
		Republic of Uruguay
	583,000	9.250%, 5/17/17		708,345
		Venezuela—4.6%
		Republic of Venezuela
	219,000	10.750%, 9/19/13		245,499
	347,000	13.625%, 8/15/18		471,053
				716,552
		Vietnam—4.7%
		Socialist Republic of Vietnam
	687,000	6.875%, 1/15/16		733,292
		Total Investments—98.5% (Cost $15,160,973)		15,318,791
		Other assets less liabilities—1.5%		233,290
		Net Assets—100.0%	$	15,552,081

Glossary of Terms:

MTN Medium Term Note

See Notes to Financial Statements.

116

Schedule of Investments

PowerShares Insured National Municipal Bond Portfolio

October 31, 2007

Principal Amount			Interest Rate			Maturity Date	Value
		Municipal Bonds—98.5%
		Ad Valorem Property Tax—3.1%
$	400,000	North Las Vegas (Wastewater Reclamation System) Ser 06 MBIA		4.50	%	10/01/36	$	389,876
		College Revenue—6.6%
	400,000	Atlanta Development Auth Student Housing Rev Facs (Georgia State University) Ser 05 XCLA		5.00		09/01/35		411,976
	400,000	University of Washington Ser 07 AMBAC		5.00		06/01/37		415,088
								827,064
		Electric Power Revenue—9.8%
	400,000	Springfield Public Utilities Rev Ser 06 FGIC		4.75		08/01/34		404,536
	400,000	Kentucky State Municipal Power Agency System Rev (Prairie State Project) Ser 07A MBIA		5.00		09/01/37		415,068
	400,000	Missouri Joint Municipal Electric Utility Commission Ser 07A AMBAC		5.00		01/01/42		409,720
								1,229,324
		Hospital Revenue—9.9%
	400,000	Clarke County Hospital Auth Rev (Athens Regional Medical Center Project) Ser 07 MBIA		5.00		01/01/27		416,068
	400,000	Connecticut State Health & Educational Facility Auth (Yale - New Haven Hospital) Ser 06J-1 AMBAC		5.00		07/01/31		414,764
	400,000	Waco Health Facilities Development Corporation (Hillcrest Health System Project) Ser 06A MBIA FHA		5.00		08/01/31		409,644
								1,240,476
		Hotel Occupancy Tax—3.3%
	400,000	Downtown Phoenix Hotel Corporation SR Ser 05A FGIC		5.00		07/01/40		408,572
		Lease Revenue—4.2%
	500,000	New Jersey State Educational Facilities Auth Rev (Kean University) Ser 07D FGIC		5.00		07/01/39		520,570
		Recreational Revenue—3.3%
	400,000	District of Columbia Ballpark Rev Ser 06B-1 FGIC		5.00		02/01/31		411,396
		Resource Recovery Revenue—3.2%
	400,000	Burke County Development Auth (Georgia Power Company Pollution Ctl Rev Plant) Ser 05 FGIC		4.75		05/01/34		400,184
		Sales Tax Revenue—21.8%
	400,000	Colorado Regional Transportation District (Fastracks Project) Ser 07A FSA		4.50		11/01/34		387,836
	400,000	Dallas Area Rapid Transit (Sr Lien) Ser 07 AMBAC		5.00		12/01/32		414,148
	400,000	Illinois Regional Transportation Auth Ser 06A MBIA		4.50		07/01/35		385,864
	500,000	Massachusetts State School Building Auth Dedicated Sale Tax Rev Ser 05A FSA		5.00		08/15/30		520,550
	400,000	Metropolitan Atlanta Rapid Transit Auth (Ref-Third Indenture) Ser 07B FSA		4.50		07/01/32		390,656
	600,000	San Francisco Bay Area Rapid Transit District Sales Tax Rev Ref Ser 05A MBIA		5.00		07/01/30		624,732
								2,723,786
		Sewer Revenue—9.6%
	400,000	City of Baltimore (Wastewater Projects) Ser 07C AMBAC		4.50		07/01/32		394,116
	400,000	Parish of East Baton Rouge Ser 06A FSA		4.50		02/01/31		395,428
	400,000	Sacramento County California Sanitation District Financing Auth Rev (County Sanitation District 1) Ser 05 MBIA		5.00		08/01/35		415,040
								1,204,584

See Notes to Financial Statements.

117

Schedule of Investments (Continued)

PowerShares Insured National Municipal Bond Portfolio

October 31, 2007

Principal Amount			Interest Rate			Maturity Date	Value
		Municipal Bonds (Continued)
		Transit Revenue—6.4%
$	400,000	New Jersey State Transportation Trust Fund Auth (Transit System) Ser 07A AMBAC		5.00	%	12/15/32	$	419,068
	400,000	State of Texas (Transit Commission-Mobility Fund) Ser 06A FGIC		4.50		04/01/35		386,532
								805,600
		Water Revenue—17.3%
	400,000	Birmingham Waterworks & Sewer Board Ser 07A AMBAC		4.50		01/01/39		384,428
	400,000	San Antonio Ser 07 FGIC		4.50		05/15/37		386,052
	500,000	San Francisco City & County Public Utilities Commission Water Rev Ser 06A FSA		4.50		11/01/31		488,515
	500,000	San Luis Obispo County Financing Auth Rev (Nacimiento Water Project) Ser 07A MBIA		5.00		09/01/38		520,045
	400,000	Truckee Meadows Water Auth Ser 07 FSA		4.50		07/01/30		392,180
								2,171,220
		Total Investments (Cost $12,328,526)—98.5%						12,332,652
		Other assets less liabilities—1.5%						192,134
		Net Assets—100.0%					$	12,524,786

Glossary of Terms:

AMBAC  – American Municipal Bond Assurance Corporation

FGIC  – Financial Guaranty Insurance Company

FHA  – Federal Housing Administration

FSA  – Financial Security Assurance, Inc.

MBIA  – Municipal Bond Investors Assurance

XLCA  – XL Capital Assurance, Inc.

See Notes to Financial Statements.

118

Schedule of Investments

PowerShares Insured California Municipal Bond Portfolio

October 31, 2007

Principal Amount			Interest Rate			Maturity Date	Value
		Municipal Bonds—98.4%
		Ad Valorem Property Tax—17.9%
$	850,000	Antelope Valley California Community College District (Election 2004) Ser 07B MBIA		5.25	%	08/01/39	$	910,146
	400,000	Foothill-De Anza California Community College District Ser 07A AMBAC		4.50		08/01/31		388,044
	500,000	Los Angeles California Community College District Ref - Election 2001 Ser 05A FSA		5.00		08/01/25		525,150
	400,000	San Diego California Community College District (Election 2006) Ser 07 FSA		5.00		08/01/32		417,528
								2,240,868
		College Revenue—4.2%
	500,000	California State University Rev Systemwide Ser 07A FSA		5.00		11/01/37		519,525
		Electric Power Revenue—6.7%
	400,000	Los Angeles California Water & Power Rev (Power System) Subser 07A-1 AMBAC		5.00		07/01/39		415,500
	400,000	Puerto Rico Electric Power Auth Power Rev Ser 05RR XLCA		5.00		07/01/27		418,080
								833,580
		General Fund—3.0%
	400,000	California State Ref Ser 07 MBIA		4.25		08/01/33		368,216
		Highway Tolls Revenue—3.6%
	400,000	Puerto Rico Commonwealth Highway & Transportation Auth Transportation Rev Ref Ser 07N FGIC		5.25		07/01/39		451,816
		Lease Revenue—10.2%
	500,000	Los Angeles California Municipal Improvement Corp. Lease Rev Ser 07B-1 FGIC		4.75		08/01/37		500,250
	400,000	Los Angeles California Municipal Improvement Corp. Lease Rev Police Headquarters FAC, Ser 06A FGIC		4.25		01/01/37		364,472
	400,000	Santa Clara Valley California Water District (CTFS Partner Water Utility System Improvement) Ser 07A MBIA		5.00		06/01/37		412,576
								1,277,298
		Miscellaneous Revenue—7.1%
	400,000	Hesperia California Public Financing Auth (Redevelopment & Housing Projects) Ser 07A XLCA		5.00		09/01/31		408,380
	460,000	Hollister California Joint Powers Financing Auth (Wastewater Revenue Refing & Imported Project) Ser 01 FSA		5.00		06/01/32		476,192
								884,572
		Sales Tax Revenue—11.6%
	400,000	San Francisco California Bay Area Rapid Transit District Sales Tax Rev Ref Ser 05A MBIA		5.00		07/01/30		416,488
	1,000,000	Santa Clara Valley California Transportation Auth Sales Tax Revenue Ref (Measure A) Ser 07A AMBAC		5.00		04/01/36		1,034,850
								1,451,338
		Sewer Revenue—14.7%
	400,000	Bakersfield California Wastewater Rev Ser 07A FSA		5.00		09/15/32		417,708
	400,000	Clovis California Public Financing Auth Wastewater Rev Ser 07 AMBAC		4.50		08/01/38		380,792
	1,000,000	Sacramento County California Sanitation District Financing Authority Rev (County Sanitation District 1) Ser 05 MBIA		5.00		08/01/35		1,037,600
								1,836,100

See Notes to Financial Statements.

119

Schedule of Investments (Continued)

PowerShares Insured California Municipal Bond Portfolio

October 31, 2007

Principal Amount			Interest Rate			Maturity Date	Value
		Municipal Bonds (Continued)
		Tax Increment Revenue—3.0%
$	400,000	San Jose California Redevelopment Agency Tax Allocation Ref (Merged Area Redevelopment Project) Ser 06C MBIA		4.25	%	08/01/30	$	373,932
		Water Revenue—16.4%
	1,000,000	East Bay California Municipal Utility District Water System Rev Ref Ser 07A FGIC		5.00		06/01/32		1,043,250
	500,000	San Francisco California City & County Public Utilities Commission Water Rev Ser 06A FSA		4.50		11/01/31		488,515
	500,000	San Luis Obispo County California Financing Auth Rev (Nacimiento Water Project) Ser 07A MBIA		5.00		09/01/38		520,045
								2,051,810
		Total Investments (Cost $12,319,924)—98.4%						12,289,055
		Other assets less liabilities—1.6%						197,687
		Net Assets—100.0%					$	12,486,742

Glossary of Terms:

AMBAC  – American Municipal Bond Assurance Corporation

FGIC  – Financial Guaranty Insurance Company

FSA  – Financial Security Assurance, Inc.

MBIA  – Municipal Bond Investors Assurance

XLCA  – XL Capital Assurance, Inc.

See Notes to Financial Statements.

120

Schedule of Investments

PowerShares Insured New York Municipal Bond Portfolio

October 31, 2007

Principal Amount			Interest Rate			Maturity Date	Value
		Municipal Bonds—98.3%
		Ad Valorem Property Tax—2.1%
$	300,000	Haverstraw Stony Point Central School District Rev Ser 07 FSA		5.00	%	10/15/24	$	319,338
		College Revenue—10.5%
	1,500,000	New York State Dormitory Auth Rev Nonstated Supported Debt Mount Sinai School - Medical New York Ser 07 MBIA		5.00		07/01/35		1,561,710
		Electric Power Revenue—20.8%
	1,500,000	Long Island Power Auth Electric System Rev Ser 04A AMBAC		5.00		09/01/34		1,547,100
	1,500,000	Puerto Rico Electric Power Auth Rev Ser 05RR XLCA		5.00		07/01/26		1,570,785
								3,117,885
		Highway Tolls Revenue—11.3%
	600,000	New York State Thruway Auth General Rev Ser 07H FGIC		5.00		01/01/37		624,702
	400,000	Puerto Rico Commonwealth Highway & Transportation Auth Rev Ref Ser 07N FGIC		5.25		07/01/39		451,816
	600,000	Triborough Bridge & Tunnel Auth Rev Ser 02 MBIA		5.00		11/15/32		619,350
								1,695,868
		Hospital Revenue—4.2%
	600,000	New York State Dormitory Auth Rev Mental Health Services Facilities Impt Ser 05B AMBAC		5.00		02/15/30		622,170
		Hotel Occupancy Tax—4.1%
	600,000	New York Convention Center Development Corp. Rev (Hotel Unit Fee Secd) Ser 05 AMBAC		5.00		11/15/44		614,328
		Income Tax Revenue—3.8%
	600,000	New York City Transitional Finance Auth Building Aid Rev Ser 07S-2 FGIC		4.25		01/15/34		562,968
		Lease Revenue—7.2%
	350,000	Niagara Falls City School District Ctfs Partn (High School Fac) Ser 05 FSA		5.00		06/15/28		362,982
	700,000	Rensselaer City School District Ctfs Partn Ser 06 XLCA		5.00		06/01/36		719,124
								1,082,106
		Miscellaneous Revenue—3.8%
	600,000	Hudson Yards Infrastructure Corp. Rev Ser 06A MBIA		4.50		02/15/47		569,292
		Recreational Revenue—12.4%
	600,000	New York City Industrial Development Agency Rev Queens Baseball Stadium (Pilot) Ser 06 AMBAC		5.00		01/01/46		616,830
	600,000	New York City Industrial Development Agency Rev Yankee Stadium (Pilot) Ser 06 FGIC		5.00		03/01/46		616,764
	600,000	New York City Trust for Cultural Resources Rev (American Museum of National History) Ser 04A MBIA		5.00		07/01/44		617,748
								1,851,342
		Sales Tax Revenue—10.4%
	1,500,000	Sales Tax Asset Receivables Corp. Ser 04A AMBAC		5.00		10/15/32		1,561,515
		Transit Revenue—4.0%
	600,000	Metropolitan Transit Auth Rev Ser 07A FGIC		4.75		11/15/37		602,844

See Notes to Financial Statements.

121

Schedule of Investments (Continued)

PowerShares Insured New York Municipal Bond Portfolio

October 31, 2007

Principal Amount			Interest Rate			Maturity Date	Value
		Municipal Bonds (Continued)
		Water Revenue—3.7%
$	600,000	New York City Municipal Finance Auth Water & Sewer System Rev Ser 07A FSA		4.25	%	06/15/39	$	556,686
		Total Municipal Bonds (Cost $14,756,647)						14,718,052
		Money Market Fund—0.2%
	33,750	Dreyfus New York Municipal Cash Management - Institutional Shares (Cost $33,750)						33,750
		Total Investments (Cost $14,790,397)—98.5%						14,751,802
		Other assets less liabilities—1.5%						219,542
		Net Assets—100.0%					$	14,971,344

Glossary of Terms:

AMBAC  – American Municipal Bond Assurance Corporation

FGIC  – Financial Guaranty Insurance Company

FSA  – Financial Security Assurance, Inc.

MBIA  – Municipal Bond Investors Assurance

XLCA  – XL Capital Assurance, Inc.

See Notes to Financial Statements.

122

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Statements of Assets and Liabilities

October 31, 2007

	PowerShares Dynamic Asia Pacific Portfolio			PowerShares Dynamic Developed International Opportunities Portfolio			PowerShares Dynamic Europe Portfolio
ASSETS:
Unaffiliated investments at value	$	28,862,612		$	59,132,660		$	8,007,637
Affiliated investments at value (Note 4)		226,506			44,680			8,347
Foreign currency, at value		9,412			—			—
Receivables:
Investments sold		599,465			748,343			348,921
Dividends		21,366			44,506			8,710
Capital stock sold		—			8,025,790			—
Foreign tax reclaims		—			3,430			1,164
Total Assets		29,719,361			67,999,409			8,374,779
LIABILITIES:
Due to custodian		131,204			2,613,867			188,835
Due to foreign custodian		—			325,256			22,672
Payables:
Investments purchased		492,158			8,512,600			322,647
Dividends payable		66,923			44,900			8,259
Accrued unitary management fees		16,534			26,916			4,859
Total Liabilities		706,819			11,523,539			547,272
NET ASSETS	$	29,012,542		$	56,475,870		$	7,827,507
NET ASSETS CONSIST OF:
Shares of beneficial interest	$	24,502,109		$	53,715,018		$	7,385,070
Undistributed net investment income (loss)		94,375			64,018			10,905
Net realized gain (loss) on investments and foreign currency related transactions		(34,780	)		(98,226	)		(49,365	)
Net unrealized appreciation on investments and translation of assets and liabilities denominated in foreign currencies		4,450,838			2,795,060			480,897
Net Assets	$	29,012,542		$	56,475,870		$	7,827,507
Shares outstanding (unlimited amount authorized, $0.01 par value)		900,400			2,100,400			300,400
Net asset value	$	32.22		$	26.89		$	26.06
Unaffiliated investments at cost	$	24,412,513		$	56,339,819		$	7,527,669
Affiliated investments at cost	$	226,506		$	44,680		$	8,347
Foreign currency, at cost	$	9,405		$	(318,899	)	$	(22,331	)

	PowerShares Global Clean Energy Portfolio			PowerShares Global Water Portfolio
ASSETS:
Unaffiliated investments at value	$	95,914,524		$	238,603,653
Affiliated investments at value (Note 4)		82,423			2,232,983
Foreign currency, at value		5			174,287
Receivables:
Investments sold		1,090,718			5,301,179
Dividends		25,068			78,458
Capital stock sold		3,095,182			13,303,010
Foreign tax reclaims		123			551
Total Assets		100,208,043			259,694,121
LIABILITIES:
Due to custodian		—			365,622
Due to foreign custodian		—			—
Payables:
Investments purchased		4,195,522			18,102,533
Dividends payable		—			—
Accrued unitary management fees		49,484			132,271
Total Liabilities		4,245,006			18,600,426
NET ASSETS	$	95,963,037		$	241,093,695
NET ASSETS CONSIST OF:
Shares of beneficial interest	$	85,035,994		$	230,446,760
Undistributed net investment income (loss)		—			—
Net realized gain (loss) on investments and foreign currency related transactions		(158,421	)		(1,134,438	)
Net unrealized appreciation on investments and translation of assets and liabilities denominated in foreign currencies		11,085,464			11,781,373
Net Assets	$	95,963,037		$	241,093,695
Shares outstanding (unlimited amount authorized, $0.01 par value)		3,100,400			9,000,400
Net asset value	$	30.95		$	26.79
Unaffiliated investments at cost	$	84,828,951		$	226,899,781
Affiliated investments at cost	$	82,423		$	2,232,983
Foreign currency, at cost	$	(9	)	$	155,592

See Notes to Financial Statements.

124

	PowerShares International Listed Private Equity Portfolio			PowerShares FTSE RAFI Asia Pacific ex-Japan Portfolio		PowerShares FTSE RAFI Asia Pacific ex-Japan Small-Mid Portfolio
ASSETS:
Unaffiliated investments at value	$	5,436,965		$	12,877,765	$	16,227,837
Affiliated investments at value (Note 4)		—			—		24,230
Foreign currency, at value		202			45,797		50,173
Receivables:
Investments sold		31,383			7,226		125,335
Dividends		—			3,651		10,915
Capital stock sold		—			—		—
Foreign tax reclaims		—			94		—
Total Assets		5,468,550			12,934,533		16,438,490
LIABILITIES:
Due to custodian		421			293,883		11,403
Due to foreign custodian		—			—		—
Payables:
Investments purchased		—			—		—
Dividends payable		—			—		—
Accrued unitary management fees		3,398			8,056		9,707
Total Liabilities		3,819			301,939		21,110
NET ASSETS	$	5,464,731		$	12,632,594	$	16,417,380
NET ASSETS CONSIST OF:
Shares of beneficial interest	$	5,024,858		$	9,981,220	$	15,568,089
Undistributed net investment income (loss)		(3,616	)		50,865		17,438
Net realized gain (loss) on investments and foreign currency related transactions		1,018			75		(14,699	)
Net unrealized appreciation on investments and translation of assets and liabilities denominated in foreign currencies		442,471			2,600,434		846,552
Net Assets	$	5,464,731		$	12,632,594	$	16,417,380
Shares outstanding (unlimited amount authorized, $0.01 par value)		200,000			200,200		600,000
Net asset value	$	27.32		$	63.10	$	27.36
Unaffiliated investments at cost	$	4,994,494		$	10,281,559	$	15,381,461
Affiliated investments at cost	$	—		$	—	$	24,230
Foreign currency, at cost	$	202		$	41,798	$	50,127

	PowerShares FTSE RAFI Developed Markets ex-U.S. Portfolio			PowerShares FTSE RAFI Developed Markets ex-U.S. Small-Mid Portfolio
ASSETS:
Unaffiliated investments at value	$	31,901,001		$	5,258,965
Affiliated investments at value (Note 4)		—			9,794
Foreign currency, at value		2,409			3,303
Receivables:
Investments sold		517			24,122
Dividends		42,567			2,458
Capital stock sold		5,313,376			—
Foreign tax reclaims		1,105			25
Total Assets		37,260,975			5,298,667
LIABILITIES:
Due to custodian		124,418			1,520
Due to foreign custodian		—			—
Payables:
Investments purchased		5,280,304			—
Dividends payable		—			—
Accrued unitary management fees		16,383			3,283
Total Liabilities		5,421,105			4,803
NET ASSETS	$	31,839,870		$	5,293,864
NET ASSETS CONSIST OF:
Shares of beneficial interest	$	30,283,113		$	4,945,410
Undistributed net investment income (loss)		53,130			1,777
Net realized gain (loss) on investments and foreign currency related transactions		(295,895	)		(2,199	)
Net unrealized appreciation on investments and translation of assets and liabilities denominated in foreign currencies		1,799,522			348,876
Net Assets	$	31,839,870		$	5,293,864
Shares outstanding (unlimited amount authorized, $0.01 par value)		600,200			200,000
Net asset value	$	53.05		$	26.47
Unaffiliated investments at cost	$	30,101,688		$	4,910,198
Affiliated investments at cost	$	—		$	9,794
Foreign currency, at cost	$	2,107		$	3,245

125

Statements of Assets and Liabilities (Continued)

October 31, 2007

	PowerShares FTSE RAFI Emerging Markets Portfolio			PowerShares FTSE RAFI Europe Portfolio			PowerShares FTSE RAFI Europe Small-Mid Portfolio
ASSETS:
Unaffiliated investments at value	$	27,727,587		$	5,545,498		$	5,306,750
Affiliated investments at value (Note 4)		1,767,877			—			3,096
Cash		—			—			—
Foreign currency, at value		923			4,286			7,961
Receivables:
Investments sold		—			—			4,965
Dividends		9,630			4,455			3,958
Capital stock sold		11,160,016			14,728			—
Foreign tax reclaims		—			332			60
Interest		—			—			—
Total Assets		40,666,033			5,569,299			5,326,790
LIABILITIES:
Due to custodian		1,471,969			120,343			1,659
Payables:
Investments purchased		11,245,448			—			—
Accrued unitary management fees		6,383			3,354			3,296
Total Liabilities		12,723,800			123,697			4,955
NET ASSETS	$	27,942,233		$	5,445,602		$	5,321,835
NET ASSETS CONSIST OF:
Shares of beneficial interest	$	26,981,270		$	5,129,792		$	4,939,532
Undistributed net investment income		4,542			15,951			3,433
Net realized loss on investments and foreign currency related transactions		(39,287	)		(13,972	)		(1,345	)
Net unrealized appreciation/depreciation on investments and translation of assets and liabilities denominated in foreign currencies		995,708			313,831			380,215
Net Assets	$	27,942,233		$	5,445,602		$	5,321,835
Shares outstanding (unlimited amount authorized, $0.01 par value)		1,000,000			100,400			200,000
Net asset value	$	27.94		$	54.24		$	26.61
Unaffiliated investments at cost	$	26,731,923		$	5,231,911		$	4,926,739
Affiliated investments at cost	$	1,767,877		$	—		$	3,096
Foreign currency, at cost	$	879		$	4,109		$	7,826

	PowerShares FTSE RAFI Japan Portfolio			PowerShares 1-30 Laddered Treasury Portfolio
ASSETS:
Unaffiliated investments at value	$	4,908,624		$	15,206,064
Affiliated investments at value (Note 4)		7,094			—
Cash		75			—
Foreign currency, at value		7,755			—
Receivables:
Investments sold		—			—
Dividends		55,140			—
Capital stock sold		—			—
Foreign tax reclaims		—			—
Interest		—			186,504
Total Assets		4,978,688			15,392,568
LIABILITIES:
Due to custodian		—			6,199
Payables:
Investments purchased		—			—
Accrued unitary management fees		3,451			2,033
Total Liabilities		3,451			8,232
NET ASSETS	$	4,975,237		$	15,384,336
NET ASSETS CONSIST OF:
Shares of beneficial interest	$	5,064,901		$	15,126,252
Undistributed net investment income		37,514			37,011
Net realized loss on investments and foreign currency related transactions		(53,958	)		—
Net unrealized appreciation/depreciation on investments and translation of assets and liabilities denominated in foreign currencies		(73,220	)		221,073
Net Assets	$	4,975,237		$	15,384,336
Shares outstanding (unlimited amount authorized, $0.01 par value)		100,200			600,000
Net asset value	$	49.65		$	25.64
Unaffiliated investments at cost	$	4,981,432		$	14,984,991
Affiliated investments at cost	$	7,094		$	—
Foreign currency, at cost	$	7,730		$	—

See Notes to Financial Statements.

126

	PowerShares Emerging Markets Sovereign Debt Portfolio		PowerShares Insured National Municipal Bond Portfolio
ASSETS:
Unaffiliated investments at value	$	15,318,791	$	12,332,652
Affiliated investments at value (Note 4)		—		—
Cash		—		34,017
Foreign currency, at value		—		—
Receivables:
Investments sold		—		—
Dividends		—		—
Capital stock sold		5,177,580		—
Foreign tax reclaims		—		—
Interest		248,652		160,047
Total Assets		20,745,023		12,526,716
LIABILITIES:
Due to custodian		4,328		—
Payables:
Investments purchased		5,185,733		—
Accrued unitary management fees		2,881		1,930
Total Liabilities		5,192,942		1,930
NET ASSETS	$	15,552,081	$	12,524,786
NET ASSETS CONSIST OF:
Shares of beneficial interest	$	15,365,958	$	12,493,365
Undistributed net investment income		28,305		27,295
Net realized loss on investments and foreign currency related transactions		—		—
Net unrealized appreciation/depreciation on investments and translation of assets and liabilities denominated in foreign currencies		157,818		4,126
Net Assets	$	15,552,081	$	12,524,786
Shares outstanding (unlimited amount authorized, $0.01 par value)		600,000		500,000
Net asset value	$	25.92	$	25.05
Unaffiliated investments at cost	$	15,160,973	$	12,328,526
Affiliated investments at cost	$	—	$	—
Foreign currency, at cost	$	—	$	—

	PowerShares Insured California Municipal Bond Portfolio			PowerShares Insured New York Municipal Bond Portfolio
ASSETS:
Unaffiliated investments at value	$	12,289,055		$	14,751,802
Affiliated investments at value (Note 4)		—			—
Cash		43,582			52,731
Foreign currency, at value		—			—
Receivables:
Investments sold		—			—
Dividends		—			—
Capital stock sold		—			—
Foreign tax reclaims		—			—
Interest		156,031			169,041
Total Assets		12,488,668			14,973,574
LIABILITIES:
Due to custodian		—			—
Payables:
Investments purchased		—			—
Accrued unitary management fees		1,926			2,230
Total Liabilities		1,926			2,230
NET ASSETS	$	12,486,742		$	14,971,344
NET ASSETS CONSIST OF:
Shares of beneficial interest	$	12,490,788		$	14,979,394
Undistributed net investment income		26,823			30,545
Net realized loss on investments and foreign currency related transactions		—			—
Net unrealized appreciation/depreciation on investments and translation of assets and liabilities denominated in foreign currencies		(30,869	)		(38,595	)
Net Assets	$	12,486,742		$	14,971,344
Shares outstanding (unlimited amount authorized, $0.01 par value)		500,000			600,000
Net asset value	$	24.97		$	24.95
Unaffiliated investments at cost	$	12,319,924		$	14,790,397
Affiliated investments at cost	$	—		$	—
Foreign currency, at cost	$	—		$	—

127

Statements of Operations

	PowerShares Dynamic Asia Pacific Portfolio			PowerShares Dynamic Developed International Opportunities Portfolio			PowerShares Dynamic Europe Portfolio
	For the Period June 13, 2007* through October 31, 2007			For the Period June 13, 2007* through October 31, 2007			For the Period June 13, 2007* through October 31, 2007
INVESTMENT INCOME:
Unaffiliated dividend income	$	201,032		$	170,748		$	39,002
Affiliated dividend income		4,031			344			133
Foreign withholding taxes		(4,854	)		(10,114	)		(2,829	)
Total Income		200,209			160,978			36,306
EXPENSES:
Unitary management fees		44,148			70,458			17,196
Net Investment Income (Loss)		156,061			90,520			19,110
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS:
Net realized gain (loss) from:
Investments		(33,305	)		(79,717	)		(45,067	)
In-kind redemptions		—			—			—
Foreign currency related transactions		3,762			(111	)		(4,245	)
Net realized gain (loss)		(29,543	)		(79,828	)		(49,312	)
Net unrealized appreciation/depreciation on:
Investments		4,450,099			2,792,841			479,968
Translation of assets and liabilities denominated in foreign currencies		739			2,219			929
Net realized and unrealized gain on investments		4,421,295			2,715,232			431,585
Net increase in net assets resulting from operations	$	4,577,356		$	2,805,752		$	450,695

	PowerShares Global Clean Energy Portfolio			PowerShares Global Water Portfolio
	For the Period June 13, 2007* through October 31, 2007			For the Period June 13, 2007* through October 31, 2007
INVESTMENT INCOME:
Unaffiliated dividend income	$	96,281		$	231,141
Affiliated dividend income		1,305			1,689
Foreign withholding taxes		(4,995	)		(4,995	)
Total Income		92,591			227,835
EXPENSES:
Unitary management fees		124,685			369,492
Net Investment Income (Loss)		(32,094	)		(141,657	)
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS:
Net realized gain (loss) from:
Investments		(158,421	)		(1,141,166	)
In-kind redemptions		—			(31,228	)
Foreign currency related transactions		1,048			(184,510	)
Net realized gain (loss)		(157,373	)		(1,356,904	)
Net unrealized appreciation/depreciation on:
Investments		11,085,573			11,703,872
Translation of assets and liabilities denominated in foreign currencies		(109	)		77,501
Net realized and unrealized gain on investments		10,928,091			10,424,469
Net increase in net assets resulting from operations	$	10,895,997		$	10,282,812

*  Commencement of Investment Operations.

See Notes to Financial Statements.

128

	PowerShares International Listed Private Equity Portfolio			PowerShares FTSE RAFI Asia Pacific ex-Japan Portfolio			PowerShares FTSE RAFI Asia Pacific ex-Japan Small-Mid Portfolio
	For the Period September 27, 2007* through October 31, 2007			For the Period June 25, 2007* through October 31, 2007			For the Period September 27, 2007* through October 31, 2007
INVESTMENT INCOME:
Unaffiliated dividend income	$	230		$	134,086		$	28,457
Affiliated dividend income		—			266			11
Foreign withholding taxes		(34	)		(2,226	)		(549	)
Total Income		196			132,126			27,919
EXPENSES:
Unitary management fees		3,819			29,898			10,598
Net Investment Income (Loss)		(3,623	)		102,228			17,321
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS:
Net realized gain (loss) from:
Investments		1,018			75			(14,699	)
In-kind redemptions		—			—			301,686
Foreign currency related transactions		7			1,158			117
Net realized gain (loss)		1,025			1,233			287,104
Net unrealized appreciation/depreciation on:
Investments		442,471			2,596,206			846,376
Translation of assets and liabilities denominated in foreign currencies		—			4,228			176
Net realized and unrealized gain on investments		443,496			2,601,667			1,133,656
Net increase in net assets resulting from operations	$	439,873		$	2,703,895		$	1,150,977

	PowerShares FTSE RAFI Developed Markets ex-U.S. Portfolio			PowerShares FTSE RAFI Developed Markets ex-U.S. Small-Mid Portfolio
	For the Period June 25, 2007* through October 31, 2007			For the Period September 27, 2007* through October 31, 2007
INVESTMENT INCOME:
Unaffiliated dividend income	$	92,111		$	5,562
Affiliated dividend income		345			26
Foreign withholding taxes		(5,670	)		(135	)
Total Income		86,786			5,453
EXPENSES:
Unitary management fees		40,734			3,695
Net Investment Income (Loss)		46,052			1,758
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS:
Net realized gain (loss) from:
Investments		(295,039	)		(2,199	)
In-kind redemptions		—			—
Foreign currency related transactions		11,536			19
Net realized gain (loss)		(283,503	)		(2,180	)
Net unrealized appreciation/depreciation on:
Investments		1,799,313			348,767
Translation of assets and liabilities denominated in foreign currencies		209			109
Net realized and unrealized gain on investments		1,516,019			346,696
Net increase in net assets resulting from operations	$	1,562,071		$	348,454

129

Statements of Operations (Continued)

	PowerShares FTSE RAFI Emerging Markets Portfolio			PowerShares FTSE RAFI Europe Portfolio			PowerShares FTSE RAFI Europe Small-Mid Portfolio
	For the Period September 27, 2007* through October 31, 2007			For the Period June 25, 2007* through October 31, 2007			For the Period September 27, 2007* through October 31, 2007
INVESTMENT INCOME:
Unaffiliated dividend income	$	10,722		$	28,533		$	7,279
Unaffiliated interest income		—			—			—
Affiliated dividend income		891			662			1
Foreign withholding taxes		(217	)		(1,910	)		(172	)
Total Income		11,396			27,285			7,108
EXPENSES:
Unitary management fees		6,857			13,400			3,706
Net Investment Income		4,539			13,885			3,402
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS:
Net realized gain (loss) from:
Investments		(39,287	)		(13,602	)		(1,345	)
In-kind redemptions		—			—			—
Foreign currency related transactions		3			6,129			31
Net realized gain (loss)		(39,284	)		(7,473	)		(1,314	)
Net unrealized appreciation/depreciation on:
Investments		995,664			313,587			380,011
Translation of assets and liabilities denominated in foreign currencies		44			244			204
Net realized and unrealized gain (loss) on investments		956,424			306,358			378,901
Net increase (decrease) in net assets resulting from operations	$	960,963		$	320,243		$	382,303

	PowerShares FTSE RAFI Japan Portfolio			PowerShares 1-30 Laddered Treasury Portfolio
	For the Period June 25, 2007* through October 31, 2007			For the Period October 11,2007* through October 31, 2007
INVESTMENT INCOME:
Unaffiliated dividend income	$	64,600		$	—
Unaffiliated interest income		—			39,044
Affiliated dividend income		209			—
Foreign withholding taxes		(4,522	)		—
Total Income		60,287			39,044
EXPENSES:
Unitary management fees		23,163			2,033
Net Investment Income		37,124			37,011
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS:
Net realized gain (loss) from:
Investments		(53,958	)		—
In-kind redemptions		107,675			—
Foreign currency related transactions		390			—
Net realized gain (loss)		54,107			—
Net unrealized appreciation/depreciation on:
Investments		(72,808	)		221,073
Translation of assets and liabilities denominated in foreign currencies		(412	)		—
Net realized and unrealized gain (loss) on investments		(19,113	)		221,073
Net increase (decrease) in net assets resulting from operations	$	18,011		$	258,084

*  Commencement of Investment Operations.

See Notes to Financial Statements.

130

	PowerShares Emerging Markets Sovereign Debt Portfolio		PowerShares Insured National Municipal Bond Portfolio
	For the Period October 11, 2007* through October 31, 2007		For the Period October 11, 2007* through October 31, 2007
INVESTMENT INCOME:
Unaffiliated dividend income	$	—	$	—
Unaffiliated interest income		31,186		29,225
Affiliated dividend income		—		—
Foreign withholding taxes		—		—
Total Income		31,186		29,225
EXPENSES:
Unitary management fees		2,881		1,930
Net Investment Income		28,305		27,295
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS:
Net realized gain (loss) from:
Investments		—		—
In-kind redemptions		—		—
Foreign currency related transactions		—		—
Net realized gain (loss)		—		—
Net unrealized appreciation/depreciation on:
Investments		157,818		4,126
Translation of assets and liabilities denominated in foreign currencies		—		—
Net realized and unrealized gain (loss) on investments		157,818		4,126
Net increase (decrease) in net assets resulting from operations	$	186,123	$	31,421

	PowerShares Insured California Municipal Bond Portfolio			PowerShares Insured New York Municipal Bond Portfolio
	For the Period October 11, 2007* through October 31, 2007			For the Period October 11, 2007* through October 31, 2007
INVESTMENT INCOME:
Unaffiliated dividend income	$	—		$	—
Unaffiliated interest income		28,749			32,775
Affiliated dividend income		—			—
Foreign withholding taxes		—			—
Total Income		28,749			32,775
EXPENSES:
Unitary management fees		1,926			2,230
Net Investment Income		26,823			30,545
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS:
Net realized gain (loss) from:
Investments		—			—
In-kind redemptions		—			—
Foreign currency related transactions		—			—
Net realized gain (loss)		—			—
Net unrealized appreciation/depreciation on:
Investments		(30,869	)		(38,595	)
Translation of assets and liabilities denominated in foreign currencies		—			—
Net realized and unrealized gain (loss) on investments		(30,869	)		(38,595	)
Net increase (decrease) in net assets resulting from operations	$	(4,046	)	$	(8,050	)

131

Statements of Changes in Net Assets

	PowerShares Dynamic Asia Pacific Portfolio			PowerShares Dynamic Developed International Opportunities Portfolio			PowerShares Dynamic Europe Portfolio
	For the Period June 13, 2007* Through October 31, 2007			For the Period June 13, 2007* Through October 31, 2007			For the Period June 13, 2007* Through October 31, 2007
OPERATIONS:
Net investment income (loss)	$	156,061		$	90,520		$	19,110
Net realized gain (loss) on investments and foreign currency related transactions		(29,543	)		(79,828	)		(49,312	)
Net unrealized appreciation on investments and translation of assets and liabilities denominated in foreign currencies		4,450,838			2,795,060			480,897
Net increase in net assets resulting from operations		4,577,356			2,805,752			450,695
Undistributed net investment income included in the price of units issued and redeemed		81,664			69,397			6,757
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income		(66,923	)		(44,900	)		(8,258	)
Total distributions to shareholders		(66,923	)		(44,900	)		(8,258	)
SHAREHOLDER TRANSACTIONS:
Proceeds from shares sold		24,502,109			53,715,018			7,385,070
Value of shares repurchased		—			—			—
Net income equalization		(81,664	)		(69,397	)		(6,757	)
Net increase in net assets resulting from shares transactions		24,420,445			53,645,621			7,378,313
Increase in Net Assets		29,012,542			56,475,870			7,827,507
NET ASSETS:
Beginning of period		—			—			—
End of period	$	29,012,542		$	56,475,870		$	7,827,507
Undistributed net investment income (loss) at end of period	$	94,375		$	64,018		$	10,905
CHANGES IN SHARES OUTSTANDING:
Shares sold		900,400			2,100,400			300,400
Shares repurchased		—			—			—
Shares outstanding, beginning of period		—			—			—
Shares outstanding, end of period		900,400			2,100,400			300,400

	PowerShares Global Clean Energy Portfolio			PowerShares Global Water Portfolio
	For the Period June 13, 2007* Through October 31, 2007			For the Period June 13, 2007* Through October 31, 2007
OPERATIONS:
Net investment income (loss)	$	(32,094	)	$	(141,657	)
Net realized gain (loss) on investments and foreign currency related transactions		(157,373	)		(1,356,904	)
Net unrealized appreciation on investments and translation of assets and liabilities denominated in foreign currencies		11,085,464			11,781,373
Net increase in net assets resulting from operations		10,895,997			10,282,812
Undistributed net investment income included in the price of units issued and redeemed		80,929			47,780
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income		—			—
Total distributions to shareholders		—			—
SHAREHOLDER TRANSACTIONS:
Proceeds from shares sold		85,067,040			233,113,309
Value of shares repurchased		—			(2,302,426	)
Net income equalization		(80,929	)		(47,780	)
Net increase in net assets resulting from shares transactions		84,986,111			230,763,103
Increase in Net Assets		95,963,037			241,093,695
NET ASSETS:
Beginning of period		—			—
End of period	$	95,963,037		$	241,093,695
Undistributed net investment income (loss) at end of period	$	—		$	—
CHANGES IN SHARES OUTSTANDING:
Shares sold		3,100,400			9,100,400
Shares repurchased		—			(100,000	)
Shares outstanding, beginning of period		—			—
Shares outstanding, end of period		3,100,400			9,000,400

*  Commencement of Investment Operations.

See Notes to Financial Statements.

132

	PowerShares International Listed Private Equity Portfolio			PowerShares FTSE RAFI Asia Pacific ex-Japan Portfolio			PowerShares FTSE RAFI Asia Pacific ex-Japan Small-Mid Portfolio
	For the Period September 27, 2007* Through October 31, 2007			For the Period June 25, 2007* Through October 31, 2007			For the Period September 27, 2007* Through October 31, 2007
OPERATIONS:
Net investment income (loss)	$	(3,623	)	$	102,228		$	17,321
Net realized gain (loss) on investments and foreign currency related transactions		1,025			1,233			287,104
Net unrealized appreciation on investments and translation of assets and liabilities denominated in foreign currencies		442,471			2,600,434			846,552
Net increase in net assets resulting from operations		439,873			2,703,895			1,150,977
Undistributed net investment income included in the price of units issued and redeemed		—			—			5,649
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income		—			(52,521	)		—
Total distributions to shareholders		—			(52,521	)		—
SHAREHOLDER TRANSACTIONS:
Proceeds from shares sold		5,024,858			9,981,220			20,568,751
Value of shares repurchased		—			—			(5,302,348	)
Net income equalization		—			—			(5,649	)
Net increase in net assets resulting from shares transactions		5,024,858			9,981,220			15,260,754
Increase in Net Assets		5,464,731			12,632,594			16,417,380
NET ASSETS:
Beginning of period		—			—			—
End of period	$	5,464,731		$	12,632,594		$	16,417,380
Undistributed net investment income (loss) at end of period	$	(3,616	)	$	50,865		$	17,438
CHANGES IN SHARES OUTSTANDING:
Shares sold		200,000			200,200			800,000
Shares repurchased		—			—			(200,000	)
Shares outstanding, beginning of period		—			—			—
Shares outstanding, end of period		200,000			200,200			600,000

	PowerShares FTSE RAFI Developed Markets ex-U.S. Portfolio			PowerShares FTSE RAFI Developed Markets ex-U.S. Small-Mid Portfolio
	For the Period June 25, 2007* Through October 31, 2007			For the Period September 27, 2007* Through October 31, 2007
OPERATIONS:
Net investment income (loss)	$	46,052		$	1,758
Net realized gain (loss) on investments and foreign currency related transactions		(283,503	)		(2,180	)
Net unrealized appreciation on investments and translation of assets and liabilities denominated in foreign currencies		1,799,522			348,876
Net increase in net assets resulting from operations		1,562,071			348,454
Undistributed net investment income included in the price of units issued and redeemed		42,811			—
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income		(5,314	)		—
Total distributions to shareholders		(5,314	)		—
SHAREHOLDER TRANSACTIONS:
Proceeds from shares sold		30,283,161			4,945,410
Value of shares repurchased		(48	)		—
Net income equalization		(42,811	)		—
Net increase in net assets resulting from shares transactions		30,240,302			4,945,410
Increase in Net Assets		31,839,870			5,293,864
NET ASSETS:
Beginning of period		—			—
End of period	$	31,839,870		$	5,293,864
Undistributed net investment income (loss) at end of period	$	53,130		$	1,777
CHANGES IN SHARES OUTSTANDING:
Shares sold		600,200			200,000
Shares repurchased		—			—
Shares outstanding, beginning of period		—			—
Shares outstanding, end of period		600,200			200,000

133

Statements of Changes in Net Assets (Continued)

	PowerShares FTSE RAFI Emerging Markets Portfolio			PowerShares FTSE RAFI Europe Portfolio			PowerShares FTSE RAFI Europe Small-Mid Portfolio
	For the Period September 27, 2007* Through October 31, 2007			For the Period June 25, 2007* Through October 31, 2007			For the Period September 27, 2007* Through October 31, 2007
OPERATIONS:
Net investment income (loss)	$	4,539		$	13,885		$	3,402
Net realized gain (loss) on investments and foreign currency related transactions		(39,284	)		(7,473	)		(1,314	)
Net unrealized appreciation/depreciation on investments and translation of assets and liabilities denominated in foreign currencies		995,708			313,831			380,215
Net increase (decrease) in net assets resulting from operations		960,963			320,243			382,303
Undistributed net investment income (loss) included in the price of units issued and redeemed		660			—			—
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income		—			(4,433	)		—
Total distributions to shareholders		—			(4,433	)		—
SHAREHOLDER TRANSACTIONS:
Proceeds from shares sold		26,981,270			5,129,792			4,939,532
Value of shares repurchased		—			—			—
Net income equalization		(660	)		—			—
Net increase in net assets resulting from shares transactions		26,980,610			5,129,792			4,939,532
Increase in Net Assets		27,942,233			5,445,602			5,321,835
NET ASSETS:
Beginning of period		—			—			—
End of period	$	27,942,233		$	5,445,602		$	5,321,835
Undistributed net investment income at end of period	$	4,542		$	15,951		$	3,433
CHANGES IN SHARES OUTSTANDING:
Shares sold		1,000,000			100,400			200,000
Shares repurchased		—			—			—
Shares outstanding, beginning of period		—			—			—
Shares outstanding, end of period		1,000,000			100,400			200,000

	PowerShares FTSE RAFI Japan Portfolio			PowerShares 1-30 Laddered Treasury Portfolio
	For the Period June 25, 2007* Through October 31, 2007			For the Period October 11, 2007* Through October 31, 2007
OPERATIONS:
Net investment income (loss)	$	37,124		$	37,011
Net realized gain (loss) on investments and foreign currency related transactions		54,107			—
Net unrealized appreciation/depreciation on investments and translation of assets and liabilities denominated in foreign currencies		(73,220	)		221,073
Net increase (decrease) in net assets resulting from operations		18,011			258,084
Undistributed net investment income (loss) included in the price of units issued and redeemed		(20,168	)		3,061
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income		—			—
Total distributions to shareholders		—			—
SHAREHOLDER TRANSACTIONS:
Proceeds from shares sold		9,954,151			15,126,252
Value of shares repurchased		(4,996,925	)		—
Net income equalization		20,168			(3,061	)
Net increase in net assets resulting from shares transactions		4,977,394			15,123,191
Increase in Net Assets		4,975,237			15,384,336
NET ASSETS:
Beginning of period		—			—
End of period	$	4,975,237		$	15,384,336
Undistributed net investment income at end of period	$	37,514		$	37,011
CHANGES IN SHARES OUTSTANDING:
Shares sold		200,200			600,000
Shares repurchased		(100,000	)		—
Shares outstanding, beginning of period		—			—
Shares outstanding, end of period		100,200			600,000

*  Commencement of Investment Operations.

See Notes to Financial Statements.

134

	PowerShares Emerging Markets Sovereign Debt Portfolio			PowerShares Insured National Municipal Bond Portfolio
	For the Period October 11, 2007* Through October 31, 2007			For the Period October 11, 2007* Through October 31, 2007
OPERATIONS:
Net investment income (loss)	$	28,305		$	27,295
Net realized gain (loss) on investments and foreign currency related transactions		—			—
Net unrealized appreciation/depreciation on investments and translation of assets and liabilities denominated in foreign currencies		157,818			4,126
Net increase (decrease) in net assets resulting from operations		186,123			31,421
Undistributed net investment income (loss) included in the price of units issued and redeemed		14,309			1,135
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income		—			—
Total distributions to shareholders		—			—
SHAREHOLDER TRANSACTIONS:
Proceeds from shares sold		15,365,958			12,493,365
Value of shares repurchased		—			—
Net income equalization		(14,309	)		(1,135	)
Net increase in net assets resulting from shares transactions		15,351,649			12,492,230
Increase in Net Assets		15,552,081			12,524,786
NET ASSETS:
Beginning of period		—			—
End of period	$	15,552,081		$	12,524,786
Undistributed net investment income at end of period	$	28,305		$	27,295
CHANGES IN SHARES OUTSTANDING:
Shares sold		600,000			500,000
Shares repurchased		—			—
Shares outstanding, beginning of period		—			—
Shares outstanding, end of period		600,000			500,000

	PowerShares Insured California Municipal Bond Portfolio			PowerShares Insured New York Municipal Bond Portfolio
	For the Period October 11, 2007* Through October 31, 2007			For the Period October 11, 2007* Through October 31, 2007
OPERATIONS:
Net investment income (loss)	$	26,823		$	30,545
Net realized gain (loss) on investments and foreign currency related transactions		—			—
Net unrealized appreciation/depreciation on investments and translation of assets and liabilities denominated in foreign currencies		(30,869	)		(38,595	)
Net increase (decrease) in net assets resulting from operations		(4,046	)		(8,050	)
Undistributed net investment income (loss) included in the price of units issued and redeemed		1,137			2,256
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income		—			—
Total distributions to shareholders		—			—
SHAREHOLDER TRANSACTIONS:
Proceeds from shares sold		12,490,788			14,979,394
Value of shares repurchased		—			—
Net income equalization		(1,137	)		(2,256	)
Net increase in net assets resulting from shares transactions		12,489,651			14,977,138
Increase in Net Assets		12,486,742			14,971,344
NET ASSETS:
Beginning of period		—			—
End of period	$	12,486,742		$	14,971,344
Undistributed net investment income at end of period	$	26,823		$	30,545
CHANGES IN SHARES OUTSTANDING:
Shares sold		500,000			600,000
Shares repurchased		—			—
Shares outstanding, beginning of period		—			—
Shares outstanding, end of period		500,000			600,000

135

Financial Highlights

PowerShares Dynamic Asia Pacific Portfolio

	For the Period June 13, 2007* through October 31, 2007
PER SHARE OPERATING PERFORMANCE:
Net asset value at beginning of period	$	24.97
Net investment income**		0.28
Net realized and unrealized gain on investments		6.95
Total from operations		7.23
Undistributed net investment income included in price of units issued and redeemed**		0.15
Distributions to shareholders from:
Net investment income		(0.13	)
Net asset value at end of period	$	32.22
TOTAL RETURN***		29.63	%
RATIOS/SUPPLEMENTAL DATA:
Net assets at end of period (000's omitted)	$	29,013
Ratio to average net assets of:
Expenses		0.80	%†
Net investment income		2.83	%†
Portfolio turnover rate ††		20	%

PowerShares Dynamic Developed International Opportunities Portfolio

	For the Period June 13, 2007* through October 31, 2007
PER SHARE OPERATING PERFORMANCE:
Net asset value at beginning of period	$	24.84
Net investment income**		0.08
Net realized and unrealized gain on investments		1.95
Total from operations		2.03
Undistributed net investment income included in price of units issued and redeemed**		0.06
Distributions to shareholders from:
Net investment income		(0.04	)
Net asset value at end of period	$	26.89
TOTAL RETURN***		8.42	%
RATIOS/SUPPLEMENTAL DATA:
Net assets at end of period (000's omitted)	$	56,476
Ratio to average net assets of:
Expenses		0.75	%†
Net investment income		0.96	%†
Portfolio turnover rate ††		54	%

*  Commencement of Investment Operations.

**  Based on average shares outstanding.

***  Total investment return is calculated assuming an initial investment made at the net asset value at the beginning of the period, reinvestment of all dividends and distributions at net asset value during the period, and redemption on the last day of the period. Total investment return calculated for a period of less than one year is not annualized.

†  Annualized.

††  Portfolio turnover is not annualized and does not include securities received or delivered from processing creations or redemptions.

See Notes to Financial Statements.

136

Financial Highlights (Continued)

PowerShares Dynamic Europe Portfolio

	For the Period June 13, 2007* through October 31, 2007
PER SHARE OPERATING PERFORMANCE:
Net asset value at beginning of period	$	24.90
Net investment income**		0.08
Net realized and unrealized gain on investments		1.08
Total from operations		1.16
Undistributed net investment income included in price of units issued and redeemed**		0.03
Distributions to shareholders from:
Net investment income		(0.03	)
Net asset value at end of period	$	26.06
TOTAL RETURN***		4.78	%
RATIOS/SUPPLEMENTAL DATA:
Net assets at end of period (000's omitted)	$	7,828
Ratio to average net assets of:
Expenses		0.75	%†
Net investment income		0.83	%†
Portfolio turnover rate ††		65	%

PowerShares Global Clean Energy Portfolio

	For the Period June 13, 2007* through October 31, 2007
PER SHARE OPERATING PERFORMANCE:
Net asset value at beginning of period	$	25.10
Net investment loss**		(0.02	)
Net realized and unrealized gain on investments		5.82
Total from operations		5.80
Undistributed net investment income included in price of units issued and redeemed**		0.05
Net asset value at end of period	$	30.95
TOTAL RETURN***		23.31	%
RATIOS/SUPPLEMENTAL DATA:
Net assets at end of period (000's omitted)	$	95,963
Ratio to average net assets of:
Expenses		0.75	%†
Net investment loss		(0.19	)%†
Portfolio turnover rate ††		4	%

*  Commencement of Investment Operations.

**  Based on average shares outstanding.

***  Total investment return is calculated assuming an initial investment made at the net asset value at the beginning of the period, reinvestment of all dividends and distributions at net asset value during the period, and redemption on the last day of the period. Total investment return calculated for a period of less than one year is not annualized.

†  Annualized.

††  Portfolio turnover is not annualized and does not include securities received or delivered from processing creations or redemptions.

See Notes to Financial Statements.

137

Financial Highlights (Continued)

PowerShares Global Water Portfolio

	For the Period June 13, 2007* through October 31, 2007
PER SHARE OPERATING PERFORMANCE:
Net asset value at beginning of period	$	24.63
Net investment loss**		(0.03	)
Net realized and unrealized gain on investments		2.18
Total from operations		2.15
Undistributed net investment income included in price of units issued and redeemed**		0.01
Net asset value at end of period	$	26.79
TOTAL RETURN***		8.77	%
RATIOS/SUPPLEMENTAL DATA:
Net assets at end of period (000's omitted)	$	241,094
Ratio to average net assets of:
Expenses		0.75	%†
Net investment loss		(0.29	)%†
Portfolio turnover rate ††		24	%

PowerShares International Listed Private Equity Portfolio

	For the Period September 27, 2007* through October 31, 2007
PER SHARE OPERATING PERFORMANCE:
Net asset value at beginning of period	$	25.70
Net investment loss**		(0.02	)
Net realized and unrealized gain on investments		1.64
Total from operations		1.62
Net asset value at end of period	$	27.32
TOTAL RETURN***		6.30	%
RATIOS/SUPPLEMENTAL DATA:
Net assets at end of period (000's omitted)	$	5,465
Ratio to average net assets of:
Expenses		0.75	%†
Net investment loss		(0.71	)%†
Portfolio turnover rate ††		0	%

*  Commencement of Investment Operations.

**  Based on average shares outstanding.

***  Total investment return is calculated assuming an initial investment made at the net asset value at the beginning of the period, reinvestment of all dividends and distributions at net asset value during the period, and redemption on the last day of the period. Total investment return calculated for a period of less than one year is not annualized.

†  Annualized.

††  Portfolio turnover is not annualized and does not include securities received or delivered from processing creations or redemptions.

See Notes to Financial Statements.

138

Financial Highlights (Continued)

PowerShares FTSE RAFI Asia Pacific ex-Japan Portfolio

	For the Period June 25, 2007* through October 31, 2007
PER SHARE OPERATING PERFORMANCE:
Net asset value at beginning of period	$	50.11
Net investment income**		0.51
Net realized and unrealized gain on investments		12.74
Total from operations		13.25
Distributions to shareholders from:
Net investment income		(0.26	)
Net asset value at end of period	$	63.10
TOTAL RETURN***		26.53	%
RATIOS/SUPPLEMENTAL DATA:
Net assets at end of period (000's omitted)	$	12,633
Ratio to average net assets of:
Expenses		0.80	%†
Net investment income		2.74	%†
Portfolio turnover rate ††		1	%

PowerShares FTSE RAFI Asia Pacific ex-Japan Small-Mid Portfolio

	For the Period September 27, 2007* through October 31, 2007
PER SHARE OPERATING PERFORMANCE:
Net asset value at beginning of period	$	25.50
Net investment income**		0.04
Net realized and unrealized gain on investments		1.81
Total from operations		1.85
Undistributed net investment income included in price of units issued and redeemed**		0.01
Net asset value at end of period	$	27.36
TOTAL RETURN***		7.29	%
RATIOS/SUPPLEMENTAL DATA:
Net assets at end of period (000's omitted)	$	16,417
Ratio to average net assets of:
Expenses		0.80	%†
Net investment income		1.31	%†
Portfolio turnover rate ††		0	%

*  Commencement of Investment Operations.

**  Based on average shares outstanding.

***  Total investment return is calculated assuming an initial investment made at the net asset value at the beginning of the period, reinvestment of all dividends and distributions at net asset value during the period, and redemption on the last day of the period. Total investment return calculated for a period of less than one year is not annualized.

†  Annualized.

††  Portfolio turnover is not annualized and does not include securities received or delivered from processing creations or redemptions.

See Notes to Financial Statements.

139

Financial Highlights (Continued)

PowerShares FTSE RAFI Developed Markets ex-U.S. Portfolio

	For the Period June 25, 2007* through October 31, 2007
PER SHARE OPERATING PERFORMANCE:
Net asset value at beginning of period	$	49.37
Net investment income**		0.13
Net realized and unrealized gain on investments		3.44
Total from operations		3.57
Undistributed net investment income included in price of units issued and redeemed**		0.12
Distributions to shareholders from:
Net investment income		(0.01	)
Net asset value at end of period	$	53.05
TOTAL RETURN***		7.48	%
RATIOS/SUPPLEMENTAL DATA:
Net assets at end of period (000's omitted)	$	31,840
Ratio to average net assets of:
Expenses		0.75	%†
Net investment income		0.85	%†
Portfolio turnover rate ††		30	%

PowerShares FTSE RAFI Developed Markets ex-U.S. Small-Mid Portfolio

	For the Period September 27, 2007* through October 31, 2007
PER SHARE OPERATING PERFORMANCE:
Net asset value at beginning of period	$	25.18
Net investment income**		0.01
Net realized and unrealized gain on investments		1.28
Total from operations		1.29
Net asset value at end of period	$	26.47
TOTAL RETURN***		5.12	%
RATIOS/SUPPLEMENTAL DATA:
Net assets at end of period (000's omitted)	$	5,294
Ratio to average net assets of:
Expenses		0.75	%†
Net investment income		0.36	%†
Portfolio turnover rate ††		—	(a)

*  Commencement of Investment Operations.

**  Based on average shares outstanding.

***  Total investment return is calculated assuming an initial investment made at the net asset value at the beginning of the period, reinvestment of all dividends and distributions at net asset value during the period, and redemption on the last day of the period. Total investment return calculated for a period of less than one year is not annualized.

†  Annualized.

††  Portfolio turnover is not annualized and does not include securities received or delivered from processing creations or redemptions.

(a)  Amount represents less than 0.5%.

See Notes to Financial Statements.

140

Financial Highlights (Continued)

PowerShares FTSE RAFI Emerging Markets Portfolio

	For the Period September 27, 2007* through October 31, 2007
PER SHARE OPERATING PERFORMANCE:
Net asset value at beginning of period	$	25.55
Net investment income**		0.01
Net realized and unrealized gain on investments		2.38
Total from operations		2.39
Undistributed net investment income included in price of units issued and redeemed**		—	(a)
Net asset value at end of period	$	27.94
TOTAL RETURN***		9.35	%
RATIOS/SUPPLEMENTAL DATA:
Net assets at end of period (000's omitted)	$	27,942
Ratio to average net assets of:
Expenses		0.85	%†
Net investment income		0.56	%†
Portfolio turnover rate ††		8	%

PowerShares FTSE RAFI Europe Portfolio

	For the Period June 25, 2007* through October 31, 2007
PER SHARE OPERATING PERFORMANCE:
Net asset value at beginning of period	$	49.50
Net investment income**		0.14
Net realized and unrealized gain on investments		4.64
Total from operations		4.78
Distributions to shareholders from:
Net investment income		(0.04	)
Net asset value at end of period	$	54.24
TOTAL RETURN***		9.67	%
RATIOS/SUPPLEMENTAL DATA:
Net assets at end of period (000's omitted)	$	5,446
Ratio to average net assets of:
Expenses		0.75	%†
Net investment income		0.78	%†
Portfolio turnover rate ††		5	%

*  Commencement of Investment Operations.

**  Based on average shares outstanding.

***  Total investment return is calculated assuming an initial investment made at the net asset value at the beginning of the period, reinvestment of all dividends and distributions at net asset value during the period, and redemption on the last day of the period. Total investment return calculated for a period of less than one year is not annualized.

†  Annualized.

††  Portfolio turnover is not annualized and does not include securities received or delivered from processing creations or redemptions.

(a)  Amount represents less than $0.005.

See Notes to Financial Statements.

141

Financial Highlights (Continued)

PowerShares FTSE RAFI Europe Small-Mid Portfolio

	For the Period September 27, 2007* through October 31, 2007
PER SHARE OPERATING PERFORMANCE:
Net asset value at beginning of period	$	25.03
Net investment income**		0.02
Net realized and unrealized gain on investments		1.56
Total from operations		1.58
Net asset value at end of period	$	26.61
TOTAL RETURN***		6.31	%
RATIOS/SUPPLEMENTAL DATA:
Net assets at end of period (000's omitted)	$	5,322
Ratio to average net assets of:
Expenses		0.75	%†
Net investment income		0.69	%†
Portfolio turnover rate ††		0	%

PowerShares FTSE RAFI Japan Portfolio

	For the Period June 25, 2007* through October 31, 2007
PER SHARE OPERATING PERFORMANCE:
Net asset value at beginning of period	$	49.65
Net investment income**		0.21
Net realized and unrealized loss on investments		(0.10	)
Total from operations		0.11
Undistributed net investment loss included in price of units issued and redeemed**		(0.11	)
Net asset value at end of period	$	49.65
TOTAL RETURN***		0.00	%
RATIOS/SUPPLEMENTAL DATA:
Net assets at end of period (000's omitted)	$	4,975
Ratio to average net assets of:
Expenses		0.75	%†
Net investment income		1.20	%†
Portfolio turnover rate ††		15	%

*  Commencement of Investment Operations.

**  Based on average shares outstanding.

***  Total investment return is calculated assuming an initial investment made at the net asset value at the beginning of the period, reinvestment of all dividends and distributions at net asset value during the period, and redemption on the last day of the period. Total investment return calculated for a period of less than one year is not annualized.

†  Annualized.

††  Portfolio turnover is not annualized and does not include securities received or delivered from processing creations or redemptions.

See Notes to Financial Statements.

142

Financial Highlights (Continued)

PowerShares 1-30 Laddered Treasury Portfolio

	For the Period October 11, 2007* through October 31, 2007
PER SHARE OPERATING PERFORMANCE:
Net asset value at beginning of period	$	25.21
Net investment income**		0.07
Net realized and unrealized gain on investments		0.35
Total from operations		0.42
Undistributed net investment income included in price of units issued and redeemed**		0.01
Net asset value at end of period	$	25.64
TOTAL RETURN***		1.71	%
RATIOS/SUPPLEMENTAL DATA:
Net assets at end of period (000's omitted)	$	15,384
Ratio to average net assets of:
Expenses		0.25	%†
Net investment income		4.55	%†
Portfolio turnover rate ††		0	%

PowerShares Emerging Markets Sovereign Debt Portfolio

	For the Period October 11, 2007* through October 31, 2007
PER SHARE OPERATING PERFORMANCE:
Net asset value at beginning of period	$	25.50
Net investment income**		0.07
Net realized and unrealized gain on investments		0.32
Total from operations		0.39
Undistributed net investment income included in price of units issued and redeemed**		0.03
Net asset value at end of period	$	25.92
TOTAL RETURN***		1.65	%
RATIOS/SUPPLEMENTAL DATA:
Net assets at end of period (000's omitted)	$	15,552
Ratio to average net assets of:
Expenses		0.50	%†
Net investment income		4.91	%†
Portfolio turnover rate ††		0	%

*  Commencement of Investment Operations.

**  Based on average shares outstanding.

***  Total investment return is calculated assuming an initial investment made at the net asset value at the beginning of the period, reinvestment of all dividends and distributions at net asset value during the period, and redemption on the last day of the period. Total investment return calculated for a period of less than one year is not annualized.

†  Annualized.

††  Portfolio turnover is not annualized and does not include securities received or delivered from processing creations or redemptions.

See Notes to Financial Statements.

143

Financial Highlights (Continued)

PowerShares Insured National Municipal Bond Portfolio

	For the Period October 11, 2007* through October 31, 2007
PER SHARE OPERATING PERFORMANCE:
Net asset value at beginning of period	$	24.92
Net investment income**		0.06
Net realized and unrealized gain on investments		0.07
Total from operations		0.13
Undistributed net investment income included in price of units issued and redeemed**		—	(a)
Net asset value at end of period	$	25.05
TOTAL RETURN***		0.52	%
RATIOS/SUPPLEMENTAL DATA:
Net assets at end of period (000's omitted)	$	12,525
Ratio to average net assets of:
Expenses		0.28	%†
Net investment income		3.96	%†
Portfolio turnover rate ††		0	%

PowerShares Insured California Municipal Bond Portfolio

	For the Period October 11, 2007* through October 31, 2007
PER SHARE OPERATING PERFORMANCE:
Net asset value at beginning of period	$	24.90
Net investment income**		0.06
Net realized and unrealized gain on investments		0.01
Total from operations		0.07	(b)
Undistributed net investment income included in price of units issued and redeemed**		—	(a)
Net asset value at end of period	$	24.97
TOTAL RETURN***		0.28	%
RATIOS/SUPPLEMENTAL DATA:
Net assets at end of period (000's omitted)	$	12,487
Ratio to average net assets of:
Expenses		0.28	%†
Net investment income		3.90	%†
Portfolio turnover rate ††		0	%

*  Commencement of Investment Operations.

**  Based on average shares outstanding.

***  Total investment return is calculated assuming an initial investment made at the net asset value at the beginning of the period, reinvestment of all dividends and distributions at net asset value during the period, and redemption on the last day of the period. Total investment return calculated for a period of less than one year is not annualized.

†  Annualized.

††  Portfolio turnover is not annualized and does not include securities received or delivered from processing creations or redemptions.

(a)  Amount represents less than $0.005.

(b)  Due to the timing difference of the investment activities and purchase of shares of beneficial interests activities, the net operating results in the Financial Highlights differ from the "Net decrease in net assets resulting from operations" in the Statements of Operations.

See Notes to Financial Statements.

144

Financial Highlights (Continued)

PowerShares Insured New York Municipal Bond Portfolio

	For the Period October 11, 2007* through October 31, 2007
PER SHARE OPERATING PERFORMANCE:
Net asset value at beginning of period	$	24.84
Net investment income**		0.05
Net realized and unrealized gain on investments		0.06
Total from operations		0.11	(a)
Undistributed net investment income included in price of units issued and redeemed**		—	(b)
Net asset value at end of period	$	24.95
TOTAL RETURN***		0.44	%
RATIOS/SUPPLEMENTAL DATA:
Net assets at end of period (000's omitted)	$	14,971
Ratio to average net assets of:
Expenses		0.28	%†
Net investment income		3.83	%†
Portfolio turnover rate ††		0	%

*  Commencement of Investment Operations.

**  Based on average shares outstanding.

***  Total investment return is calculated assuming an initial investment made at the net asset value at the beginning of the period, reinvestment of all dividends and distributions at net asset value during the period, and redemption on the last day of the period. Total investment return calculated for a period of less than one year is not annualized.

†  Annualized.

††  Portfolio turnover is not annualized and does not include securities received or delivered from processing creations or redemptions.

(a)  Due to the timing difference of the investment activities and purchase of shares of beneficial interests activities, the net operating results in the Financial Highlights differ from the "Net decrease in net assets resulting from operations" in the Statements of Operations.

(b)  Amount represents less than $0.005.

See Notes to Financial Statements.

145

Notes to Financial Statements

PowerShares Exchange-Traded Fund Trust II

October 31, 2007

Note 1. Organization

PowerShares Exchange-Traded Fund Trust II (the "Trust") was organized as a Massachusetts business trust on October 10, 2006 and is authorized to have multiple series or portfolios. The Trust is an open-end management investment company, registered under the Investment Company Act of 1940, as amended (the "1940 Act"). The Trust currently offers 19 portfolios:

Full Name	Short Name	Commencement Date
PowerShares Dynamic Asia Pacific Portfolio	"Dynamic Asia Pacific Portfolio"	June 13, 2007
PowerShares Dynamic Developed International Opportunities Portfolio	"Dynamic Developed International Opportunities Portfolio"	June 13, 2007
PowerShares Dynamic Europe Portfolio	"Dynamic Europe Portfolio"	June 13, 2007
PowerShares Global Clean Energy Portfolio	"Global Clean Energy Portfolio"	June 13, 2007
PowerShares Global Water Portfolio	"Global Water Portfolio"	June 13, 2007
PowerShares International Listed Private Equity Portfolio	"International Listed Private Equity Portfolio"	September 27, 2007
PowerShares FTSE RAFI Asia Pacific ex-Japan Portfolio	"FTSE RAFI Asia Pacific ex-Japan Portfolio"	June 25, 2007
PowerShares FTSE RAFI Asia Pacific ex-Japan Small-Mid Portfolio	"FTSE RAFI Asia Pacific ex-Japan Small-Mid Portfolio"	September 27, 2007
PowerShares FTSE RAFI Developed Markets ex-U.S. Portfolio	"FTSE RAFI Developed Markets ex-U.S. Portfolio"	June 25, 2007
PowerShares FTSE RAFI Developed Markets ex-U.S. Small-Mid Portfolio	"FTSE RAFI Developed Markets ex-U.S. Small-Mid Portfolio"	September 27, 2007
PowerShares FTSE RAFI Emerging Markets Portfolio	"FTSE RAFI Emerging Markets Portfolio"	September 27, 2007
PowerShares FTSE RAFI Europe Portfolio	"FTSE RAFI Europe Portfolio"	June 25, 2007
PowerShares FTSE RAFI Europe Small-Mid Portfolio	"FTSE RAFI Europe Small-Mid Portfolio"	September 27, 2007
PowerShares FTSE RAFI Japan Portfolio	"FTSE RAFI Japan Portfolio"	June 25, 2007
PowerShares 1-30 Laddered Treasury Portfolio	"1-30 Laddered Treasury Portfolio"	October 11, 2007
PowerShares Emerging Markets Sovereign Debt Portfolio	"Emerging Markets Sovereign Debt Portfolio"	October 11, 2007
PowerShares Insured National Municipal Bond Portfolio	"Insured National Municipal Bond Portfolio"	October 11, 2007
PowerShares Insured California Municipal Bond Portfolio (formerly known as "PowerShares California Municipal Bond Portfolio")	"Insured California Municipal Bond Portfolio"	October 11, 2007
PowerShares Insured New York Municipal Bond Portfolio (formerly known as "PowerShares New York Municipal Bond Portfolio")	"Insured New York Municipal Bond Portfolio"	October 11, 2007

146

Notes to Financial Statements (Continued)

PowerShares Exchange-Traded Fund Trust II

October 31, 2007

Each portfolio represents a separate series of the Trust (the "Fund" or collectively the "Funds"). All of the Funds, except for the FTSE RAFI Developed Markets ex-U.S. Portfolio, are "non-diversified" and, as such, such Funds' investments are not required to meet certain diversification requirements under the 1940 Act. The shares of the Funds are referred to herein as "Shares" or "Fund Shares." Each Fund's shares are listed and traded on the American Stock Exchange except for shares of the FTSE RAFI Asia Pacific ex-Japan Portfolio, FTSE RAFI Developed Markets ex-U.S. Portfolio, FTSE RAFI Europe Portfolio and FTSE RAFI Japan Portfolio that are listed and traded on NYSE Arca.

The Funds' market prices may differ to some degree from the net asset value of the shares of each Fund. Unlike conventional mutual funds, each Fund issues and redeems shares on a continuous basis, at net asset value, only in a large specified number of shares, each called a "Creation Unit." Creation Units are issued and redeemed principally in-kind for securities included in the relevant index. Except when aggregated in Creation Units, shares are not individually redeemable securities of the Funds. The investment objective of each Fund is to seek investment results that correspond generally to the price and yield (before the Fund's fees and expenses) of the following equity indices:

Fund	Index
Dynamic Asia Pacific Portfolio	QSG Asia-Pacific Opportunities Index
Dynamic Developed International Opportunities	QSG Developed International Opportunities
Portfolio	Index
Dynamic Europe Portfolio	QSG Active Europe Index
Global Clean Energy Portfolio	WilderHill New Energy Global Innovation Index
Global Water Portfolio	Palisades Global Water Index
International Listed Private Equity Portfolio	International Listed Private Equity IndexSM
FTSE RAFI Asia Pacific ex-Japan Portfolio	FTSE RAFI Asia Pacific ex Japan Index
FTSE RAFI Asia Pacific ex-Japan Small-Mid	FTSE RAFI Developed Asia Pacific
Portfolio	ex Japan Mid Small Index
FTSE RAFI Developed Markets ex-U.S. Portfolio	FTSE RAFI Developed Markets ex US Index
FTSE RAFI Developed Markets	FTSE RAFI Developed Markets ex US
ex-U.S. Small-Mid Portfolio	Mid Small 1500 Index
FTSE RAFI Emerging Markets Portfolio	FTSE RAFI Emerging Index
FTSE RAFI Europe Portfolio	FTSE RAFI Europe Index
FTSE RAFI Europe Small-Mid Portfolio	FTSE RAFI Developed Europe Mid Small Index
FTSE RAFI Japan Portfolio	FTSE RAFI Japan Index
1-30 Laddered Treasury Portfolio	Ryan/Mergent 1-30 Year Treasury Laddered Index
Emerging Markets Sovereign Debt Portfolio	DB Emerging Market USD Liquid Balanced Index
Insured National Municipal Bond Portfolio	Merrill Lynch Insured National Long-Term
	Core Municipal Securities Index
Insured California Municipal Bond Portfolio	Merrill Lynch California Insured Long-Term
	Core Municipal Securities Index
Insured New York Municipal Bond Portfolio	Merrill Lynch New York Insured Long-Term
	Core Municipal Securities Index

147

Notes to Financial Statements (Continued)

PowerShares Exchange-Traded Fund Trust II

October 31, 2007

Note 2. Accounting Policies

The preparation of the financial statements in accordance with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts and disclosures in the financial statements. Actual results could differ from these estimates.

A. Security Valuation

Common Stocks and other equity securities are valued based on their last sale price. Foreign securities (including foreign exchange contracts) are converted into U.S. dollar amounts using the applicable exchange rates as of the close of the London Exchange. If market quotations are available and reliable for foreign exchange traded equity securities, the securities will be valued at the market quotations. Because trading hours for certain foreign securities end before the close of the NYSE, closing market quotations may become unreliable. If between the time trading ends on a particular security and the close of the customary trading session on the NYSE, events occur that are significant and may make the closing price unreliable, the Fund may fair value the security. If the event is likely to have affected the closing price of the security, the security will be valued at fair value in good faith using procedures approved by the Board of Trustees. Adjustments to closing prices to reflect fair value may also be based on a screening process of an independent pricing service to indicate the degree of certainty, based on historical data, that the closing price in the principal market where a foreign security trades is not the current value as of the close of the NYSE. Foreign securities meeting the approved degree of certainty that the price is not reflective of current value will be priced at the indication of fair value from the independent pricing service. Multiple factors may be considered by the independent pricing service in determining adjustments to reflect fair value and may include information relating to sector indices, ADRs and domestic and foreign index futures.

U.S. fixed-income securities may be valued as of the announced closing time for the trading in fixed-income instruments on any day that the securities industry and Financial Markets Association announces an early closing time. Price information on listed securities is taken from the exchange where the security is primarily traded. Securities regularly traded in an over-the-counter market are valued at the latest quoted sale price in such market or in the case of NASDAQ, at the NASDAQ official closing price. Municipal securities are valued by an outside independent pricing service. The pricing service has informed the Trust that in valuing the Funds' municipal securities it uses both a computerized grid of tax-exempted securities and evaluations by its staff. The Funds' municipal securities may be valued by reference to a combination of transactions and quotations for the same or other securities believed to be comparable in quality, coupon, maturity, type of issue, call provisions, trading characteristics and other features deemed to be relevant. Other portfolio securities and assets for which market quotations are not readily available are valued at fair value as determined in good faith by the Trust's Pricing Committee in accordance with procedures adopted by the Board of Trustees. Investments in money market mutual funds are valued at end of day at net asset value per share.

B. Federal Income Taxes

Each Fund intends to comply with the provisions of the Internal Revenue Code applicable to regulated investment companies and will distribute substantially all net investment income and net taxable capital gains to its shareholders. Therefore, no provision for Federal income taxes is required.

Income and capital gain distributions are determined in accordance with Federal income tax regulations, which may differ from accounting principles generally accepted in the United States. These differences are primarily due to differing book and tax treatments for in-kind transactions, losses deferred due to wash sales, and PFIC mark to market adjustment.

148

Notes to Financial Statements (Continued)

PowerShares Exchange-Traded Fund Trust II

October 31, 2007

C. FIN 48

The financial statements have been prepared in compliance with all applicable accounting rules and practices, including FIN 48. This being the initial tax year of the funds, they have not yet filed their initial tax returns nor are there any prior tax years that may be subject to examination.

D. Investment Income and Investment Transactions

Dividend income is recorded on the ex-dividend date net of foreign taxes withheld. Interest income is recorded on the accrual basis. Investment transactions are recorded on the trade date. Realized gains and losses from the sale or disposition of securities are calculated on the specific identified cost basis. Dividends and interest received by a Fund may give rise to withholding and other taxes imposed by foreign countries. Corporate actions (including cash dividends) are recorded net of non-reclaimable foreign tax withholdings on the ex-dividend date. Tax conventions between certain countries and the United States may reduce or eliminate such taxes.

E. Expenses

Each Fund has agreed to pay an annual unitary management fee to the PowerShares Capital Management LLC. The unitary management fee paid by each Fund is an asset based fee that is accrued daily and is payable monthly.

F. Dividends and Distributions to Shareholders

Each Fund (except for the 1-30 Laddered Treasury Portfolio, Emerging Markets Sovereign Debt Portfolio, Insured National Municipal Bond Portfolio, Insured California Municipal Bond Portfolio and Insured New York Municipal Bond Portfolio, which declare and pay dividends monthly) declares and pays dividends from net investment income, if any, to its shareholders quarterly and distributes net realized taxable capital gains, if any, annually. Such distributions on a tax basis are determined in conformity with income tax regulations which may differ from accounting principles generally accepted in the United States of America. Distributions in excess of tax basis earnings and profits, if any, are reported in such Fund's financial statements as a tax return of capital.

G. Equalization

All Funds use the accounting practice of equalization. This accounting method is used to keep the continuing shareholder's per share equity in undistributed net investment income from being affected by the continuous sales and redemptions of capital shares. Equalization is calculated on a per share basis whereby a portion of the proceeds from the sales and cost of repurchases of capital shares is applied to undistributed net investment income. The amount of equalization is disclosed in the Statements of Changes in Net Assets as undistributed net investment income included in the price of capital shares issued or redeemed. The distributions to shareholders of amounts so applied may be deemed to be a return of capital for tax purposes to the extent that such distributions exceed taxable income.

H. Foreign Currency Transactions

The accounting records of the Funds are maintained in U.S. dollars. Foreign currencies, as well as investment securities and other assets and liabilities denominated in currencies other than the U.S. dollar shall be translated into U.S. dollars using the applicable exchange rates as of the close of London Exchange. The effects of changes in foreign currency exchange rates on investments in securities are not segregated in the Statements of Operations from the effects of changes in market prices of those securities, but are included with the net realized and unrealized gain or loss on investments in securities. Certain foreign exchange gains and losses included in realized and unrealized gains or losses are included in or are a reduction of ordinary income in accordance with U.S. Federal income tax regulations.

149

Notes to Financial Statements (Continued)

PowerShares Exchange-Traded Fund Trust II

October 31, 2007

Note 3. Investment Advisory Agreement and Other Agreements

The Trust has entered into Investment Advisory Agreement with PowerShares Capital Management LLC ("the Adviser") such that the Adviser has overall responsibility as the Funds' investment adviser for the selection and ongoing monitoring of the Funds' investments, managing the Funds' business affairs and providing certain clerical, bookkeeping and other administrative services.

As compensation for its services, each Fund has agreed to pay an annual unitary management fee. The unitary management fee paid by each Fund to the Adviser is accrued daily and is payable at the following annual rates:

	% of Average Daily Net Assets
Dynamic Asia Pacific Portfolio		0.80	%
Dynamic Developed International Opportunities Portfolio		0.75	%
Dynamic Europe Portfolio		0.75	%
Global Clean Energy Portfolio		0.75	%
Global Water Portfolio		0.75	%
International Listed Private Equity Portfolio		0.75	%
FTSE RAFI Asia Pacific ex-Japan Portfolio		0.80	%
FTSE RAFI Asia Pacific ex-Japan Small-Mid Portfolio		0.80	%
FTSE RAFI Developed Markets ex-U.S. Portfolio		0.75	%
FTSE RAFI Developed Markets ex-U.S. Small-Mid Portfolio		0.75	%
FTSE RAFI Emerging Markets Portfolio		0.85	%
FTSE RAFI Europe Portfolio		0.75	%
FTSE RAFI Europe Small-Mid Portfolio		0.75	%
FTSE RAFI Japan Portfolio		0.75	%
1-30 Laddered Treasury Portfolio		0.25	%
Emerging Markets Sovereign Debt Portfolio		0.50	%
Insured National Municipal Bond Portfolio		0.28	%
Insured California Municipal Bond Portfolio		0.28	%
Insured New York Municipal Bond Portfolio		0.28	%

The management fee is a unitary fee by which the Adviser has agreed to pay substantially all expenses of the Funds, including the cost of transfer agency, custody, fund administration, legal, audit and other services, except for distribution fees, brokerage expenses, taxes, interest and other extraordinary expenses.

Distribution Agreement

The Trust has entered into a Distribution agreement with A I M Distributors, Inc. (the "Distributor") who serves as the Distributor of Creation Units for each Fund. The Distributor does not maintain a secondary market in Shares. The Trust is currently not authorized to pay distribution fees.

150

Notes to Financial Statements (Continued)

PowerShares Exchange-Traded Fund Trust II

October 31, 2007

Licensing Fee Agreements

The Adviser has entered into licensing agreements for each Fund with the following Licensors:

Fund	Licensor
Dynamic Asia Pacific Portfolio	Quantitative Services Group, LLC
Dynamic Developed International Opportunities Portfolio	Quantitative Services Group, LLC
Dynamic Europe Portfolio	Quantitative Services Group, LLC
Global Clean Energy Portfolio	WilderHill New Energy Finance, LLC
Global Water Portfolio	Palisades Water Index Associates, LLC
International Listed Private Equity Portfolio	Redrocks Capital Partners, LLC
FTSE RAFI Asia Pacific ex-Japan Portfolio	FTSE International Ltd.
FTSE RAFI Asia Pacific ex-Japan Small-Mid Portfolio	FTSE International Ltd.
FTSE RAFI Developed Markets ex-U.S. Portfolio	FTSE International Ltd.
FTSE RAFI Developed Markets ex-U.S. Small-Mid Portfolio	FTSE International Ltd.
FTSE RAFI Emerging Markets Portfolio	FTSE International Ltd.
FTSE RAFI Europe Portfolio	FTSE International Ltd.
FTSE RAFI Europe Small-Mid Portfolio	FTSE International Ltd.
FTSE RAFI Japan Portfolio	FTSE International Ltd.
1-30 Laddered Treasury Portfolio	Mergent, Inc.
Emerging Markets Sovereign Debt Portfolio	Deutsche Bank Securities, Inc.
Insured National Municipal Bond Portfolio	Merrill Lynch
Insured California Municipal Bond Portfolio	Merrill Lynch
Insured New York Municipal Bond Portfolio	Merrill Lynch

The above trademarks are owned by the respective Licensors. These trademarks have been licensed to the Adviser for use with the Funds. The Funds are not sponsored, endorsed, sold or promoted by the Licensors and the Licensors make no representation regarding the advisability of investing in any of these Funds. The Adviser is required to pay the licensing fees on behalf of the Funds.

The Bank of New York serves as the administrator, custodian and fund accounting and transfer agent for each Fund. Effective July 2, 2007 The Bank of New York became a wholly-owned subsidiary of The Bank of New York Mellon Corporation.

The custodian has agreed to provide an overdraft protection to the Funds according to the terms of the service agreement.

Note 4. Investments in Affiliates

The Funds are permitted to invest daily available cash balances in affiliated money market funds. The funds may invest in the Liquid Assets Portfolio ("LAP"), which is advised by A I M Advisors, Inc., an affiliate of the Adviser. The table below shows the transactions in and earnings from investments in LAP for the period ended October 31, 2007. During the period, LAP maintained a $1.00 net asset value, as such there is no realized gain/ (loss) and no change in unrealized appreciation/ (depreciation).

151

Notes to Financial Statements (Continued)

PowerShares Exchange-Traded Fund Trust II

October 31, 2007

Investments of Daily Available Cash Balances in Liquid Assets Portfolio:

Fund	Purchases at Cost		Proceeds from Sales			Value 10/31/07		Dividend Income
Dynamic Asia Pacific Portfolio	$	2,454,247	$	(2,227,741	)	$	226,506	$	4,031
Dynamic Developed International Opportunities Portfolio		1,109,923		(1,065,243	)		44,680		344
Dynamic Europe Portfolio		103,963		(95,616	)		8,347		133
Global Clean Energy Portfolio		473,589		(391,166	)		82,423		1,305
Global Water Portfolio		4,439,675		(2,206,692	)		2,232,983		1,689
International Listed Private Equity Portfolio		—		—			—		—
FTSE RAFI Asia Pacific ex-Japan Portfolio		81,082		(81,082	)		—		266
FTSE RAFI Asia Pacific ex-Japan Small-Mid Portfolio		26,904		(2,674	)		24,230		11
FTSE RAFI Developed Markets ex-U.S. Portfolio		343,221		(343,221	)		—		345
FTSE RAFI Developed Markets ex-U.S. Small-Mid Portfolio		9,971		(177	)		9,794		26
FTSE RAFI Emerging Markets Portfolio		2,563,138		(795,261	)		1,767,877		891
FTSE RAFI Europe Portfolio		389,871		(389,871	)		—		662
FTSE RAFI Europe Small-Mid Portfolio		3,456		(360	)		3,096		1
FTSE RAFI Japan Portfolio		49,991		(42,897	)		7,094		209
1-30 Laddered Treasury Portfolio		—		—			—		—
Emerging Markets Sovereign Debt Portfolio		—		—			—		—
Insured National Municipal Bond Portfolio		—		—			—		—
Insured California Municipal Bond Portfolio		—		—			—		—
Insured New York Municipal Bond Portfolio		—		—			—		—

Note 5. Federal Income Taxes

At October 31, 2007, the components of accumulated earnings/loss on a tax-basis were as follows:

	Earnings		Net Capital and other Losses			Unrealized Appreciation/ Depreciation		Gross Unrealized Appreciation		Gross Unrealized Depreciation			Currency Unrealized Appreciation/ Depreciation			Total Earnings/ Loss
Dynamic Asia Pacific Portfolio	$	262,918	$	(19,931	)	$	4,266,707	$	4,343,357	$	(76,650	)	$	739		$	4,510,433
Dynamic Developed International Opportunities Portfolio		130,817		(47,847	)		2,675,663		3,508,290		(832,627	)		2,219			2,760,852
Dynamic Europe Portfolio		12,421		(44,616	)		473,703		587,924		(114,221	)		929			442,437
Global Clean Energy Portfolio		—		(155,633	)		11,082,785		13,121,482		(2,038,697	)		(109	)		10,927,043
Global Water Portfolio		—		(589,102	)		11,158,536		16,277,128		(5,118,592	)		77,501			10,646,935
International Listed Private Equity Portfolio(1)		95,566		—			344,307		370,439		(26,132	)		—			439,873
FTSE RAFI Asia-Pacific ex-Japan Portfolio		65,199		—			2,581,947		2,643,008		(61,061	)		4,228			2,651,374
FTSE RAFI Asia-Pacific ex-Japan Small-Mid Portfolio		67,053		(14,699	)		796,761		1,000,518		(203,757	)		176			849,291
FTSE RAFI Developed Markets ex-U.S. Portfolio		62,786		(54,729	)		1,548,489		1,974,658		(426,169	)		211			1,556,757
FTSE RAFI Developed Markets ex-U.S. Small-Mid Portfolio		10,890		(2,199	)		339,654		405,273		(65,619	)		109			348,454

152

Notes to Financial Statements (Continued)

PowerShares Exchange-Traded Fund Trust II

October 31, 2007

	Earnings		Net Capital and other Losses			Unrealized Appreciation/ Depreciation			Gross Unrealized Appreciation		Gross Unrealized Depreciation			Currency Unrealized Appreciation/ Depreciation			Total Earnings/ Loss
FTSE RAFI Emerging Markets Portfolio	$	7,345	$	(5,426	)	$	959,000		$	1,061,802	$	(102,802	)	$	44		$	960,963
FTSE RAFI Europe Portfolio		16,314		(13,972	)		313,223			452,359		(139,136	)		245			315,810
FTSE RAFI Europe Small-Mid Portfolio		10,517		(1,345	)		372,927			422,175		(49,248	)		204			382,303
FTSE RAFI Japan Portfolio		37,514		(53,958	)		(72,808	)		211,698		(284,506	)		(412	)		(89,664	)
1-30 Laddered Treasury Portfolio		37,011		—			221,073			221,073		—			—			258,084
Emerging Markets Sovereign Debt Portfolio		28,305		—			157,818			157,818		—			—			186,123
Insured National Municipal Bond Portfolio		27,295		—			4,126			24,247		(20,121	)		—			31,421
Insured California Municipal Bond Portfolio		26,823		—			(30,869	)		6,646		(37,515	)		—			(4,046	)
Insured New York Municipal Bond Portfolio		30,545		—			(38,595	)		2,927		(41,522	)		—			(8,050	)

At October 31, 2007, the cost of investments for Federal income tax purpose was as follows:

Dynamic Asia Pacific Portfolio	$	24,822,411
Dynamic Developed International Opportunities Portfolio		56,501,677
Dynamic Europe Portfolio		7,542,281
Global Clean Energy Portfolio		84,914,162
Global Water Portfolio		229,678,100
International Listed Private Equity Portfolio(1)		5,092,658
FTSE RAFI Asia-Pacific ex-Japan Portfolio		10,295,818
FTSE RAFI Asia-Pacific ex-Japan Small-Mid Portfolio		15,455,306
FTSE RAFI Developed Markets ex-U.S. Portfolio		30,352,512
FTSE RAFI Developed Markets ex-U.S. Small-Mid Portfolio		4,929,105
FTSE RAFI Emerging Markets Portfolio		28,536,464
FTSE RAFI Europe Portfolio		5,232,274
FTSE RAFI Europe Small-Mid Portfolio		4,936,919
FTSE RAFI Japan Portfolio		4,988,526
1-30 Laddered Treasury Portfolio		14,984,991
Emerging Markets Sovereign Debt Portfolio		15,160,973
Insured National Municipal Bond Portfolio		12,328,526
Insured California Municipal Bond Portfolio		12,319,924
Insured New York Municipal Bond Portfolio		14,790,397

153

Notes to Financial Statements (Continued)

PowerShares Exchange-Traded Fund Trust II

October 31, 2007

Distributions to Shareholders:

The tax character of distributions paid during the period ended October 31, 2007 was as follows:

	Distributions paid from Ordinary Income
Dynamic Asia Pacific Portfolio	$	66,923
Dynamic Developed International Opportunities Portfolio		44,900
Dynamic Europe Portfolio		8,258
FTSE RAFI Asia-Pacific ex-Japan Portfolio		52,521
FTSE RAFI Developed Markets ex-U.S. Portfolio		5,314
FTSE RAFI Europe Portfolio		4,433

At October 31, 2007, for Federal income tax purposes, the Funds have capital loss carryforwards available as shown in the table below, to the extent provided by the regulations, to offset future capital gains through the years indicated. To the extent that these loss carryforwards are used to offset future capital gains, it is probable that the capital gains so offset will not be distributed to shareholders. The use of some portion of the capital loss carryforward by any one fund may be limited by federal tax rules. These rules limit the use of the carryforward when there has been a greater than fifty percent change in ownership of a fund.

	Capital Loss Available Through
		2015
Dynamic Asia Pacific Portfolio	$	19,931
Dynamic Developed International Opportunities Portfolio		47,847
Dynamic Europe Portfolio		44,616
Global Clean Energy Portfolio		155,633
Global Water Portfolio		589,102
FTSE RAFI Asia-Pacific ex-Japan Small-Mid Portfolio		14,699
FTSE RAFI Developed Markets ex-U.S. Portfolio		54,729
FTSE RAFI Developed Markets ex-U.S. Small-Mid Portfolio		2,199
FTSE RAFI Emerging Markets Portfolio		5,426
FTSE RAFI Europe Portfolio		13,972
FTSE RAFI Europe Small-Mid Portfolio		1,345
FTSE RAFI Japan Portfolio		53,958

In order to present shares of beneficial interest and accumulated net realized gains or losses on the Statements of Assets and Liabilities that more closely represent their tax character, certain adjustments have been made to shares of beneficial interest, undistributed net investment income or loss and net realized gains or losses on investments. These adjustments have no effect on net assets. For the period ended October 31, 2007, the adjustments were as follows:

	Undistributed Net Investment Income (Loss)			Undistributed Capital Gains/ (Losses)			Shares of Beneficial Interest
Dynamic Asia Pacific Portfolio	$	(76,427	)	$	(5,237	)	$	81,664
Dynamic Developed International Opportunities Portfolio		(50,999	)		(18,398	)		69,397
Dynamic Europe Portfolio		(6,704	)		(53	)		6,757
Global Clean Energy Portfolio		(48,835	)		(1,048	)		49,883
Global Water Portfolio		93,877			222,466			(316,343	)
International Listed Private Equity Portfolio(1)		7			(7	)		—

⁽¹⁾ First tax year-end will be November 30, 2007.

154

Notes to Financial Statements (Continued)

PowerShares Exchange-Traded Fund Trust II

October 31, 2007

	Undistributed Net Investment Income (Loss)			Undistributed Capital Gains/ (Losses)			Shares of Beneficial Interest
FTSE RAFI Asia-Pacific ex-Japan Portfolio	$	1,158		$	(1,158	)		—
FTSE RAFI Asia-Pacific ex-Japan Small-Mid Portfolio		(5,532	)		(301,803	)	$	307,335
FTSE RAFI Developed Markets ex-U.S. Portfolio		(30,419	)		(12,392	)		42,811
FTSE RAFI Developed Markets ex-U.S. Small-Mid Portfolio		19			(19	)		—
FTSE RAFI Emerging Markets Portfolio		(657	)		(3	)		660
FTSE RAFI Europe Portfolio		6,499			(6,499	)		—
FTSE RAFI Europe Small-Mid Portfolio		31			(31	)		—
FTSE RAFI Japan Portfolio		20,558			(108,065	)		87,507
1-30 Laddered Treasury Portfolio		(3,061	)		—			3,061
Emerging Markets Sovereign Debt Portfolio		(14,309	)		—			14,309
Insured National Municipal Bond Portfolio		(1,135	)		—			1,135
Insured California Municipal Bond Portfolio		(1,137	)		—			1,137
Insured New York Municipal Bond Portfolio		(2,256	)		—			2,256

Note 6. Investment Transactions

For the period ended October 31, 2007, the cost of securities purchased and proceeds from sales of securities, excluding short-term securities and in-kind transactions, were as follows:

	Purchases		Sales
Dynamic Asia Pacific Portfolio	$	3,247,614	$	3,316,623
Dynamic Developed International Opportunities Portfolio		19,233,211		16,566,415
Dynamic Europe Portfolio		4,154,187		3,947,891
Global Clean Energy Portfolio		1,653,056		1,761,122
Global Water Portfolio		33,677,994		36,509,764
International Listed Private Equity Portfolio		—		31,382
FTSE RAFI Asia Pacific ex-Japan Portfolio		411,181		100,852
FTSE RAFI Asia Pacific ex-Japan Small-Mid Portfolio		—		172,460
FTSE RAFI Developed Markets ex-U.S. Portfolio		5,509,850		6,840,796
FTSE RAFI Developed Markets ex-U.S. Small-Mid Portfolio		281		26,797
FTSE RAFI Emerging Markets Portfolio		1,281,686		1,269,419
FTSE RAFI Europe Portfolio		265,365		2,434,786
FTSE RAFI Europe Small-Mid Portfolio		—		11,448
FTSE RAFI Japan Portfolio		1,338,018		1,380,540
Emerging Markets Sovereign Debt Portfolio		949,538		—
Insured National Municipal Bond Portfolio		12,329,615		—
Insured California Municipal Bond Portfolio		12,321,720		—
Insured New York Municipal Bond Portfolio		14,758,821		—

For the period ended October 31, 2007, the cost of securities purchased and the proceeds from sales of U.S. government securities for the 1-30 Laddered Treasury Portfolio amounted to $4,987,677 and $0, respectively.

155

Notes to Financial Statements (Continued)

PowerShares Exchange-Traded Fund Trust II

October 31, 2007

For the period ended October 31, 2007 in-kind transactions associated with creations and redemptions were as follows:

	Securities Received		Securities Delivered
Dynamic Asia Pacific Portfolio	$	24,514,827		—
Dynamic Developed International Opportunities Portfolio		53,752,665		—
Dynamic Europe Portfolio		7,366,451		—
Global Clean Energy Portfolio		85,095,438		—
Global Water Portfolio		233,200,234	$	2,303,017
International Listed Private Equity Portfolio		5,024,858		—
FTSE RAFI Asia Pacific ex-Japan Portfolio		9,971,155		—
FTSE RAFI Asia Pacific ex-Japan Small-Mid Portfolio		20,566,077		5,299,143
FTSE RAFI Developed Markets ex-U.S. Portfolio		31,727,673		—
FTSE RAFI Developed Markets ex-U.S. Small-Mid Portfolio		4,938,913		—
FTSE RAFI Emerging Markets Portfolio		26,758,943		—
FTSE RAFI Europe Portfolio		7,414,934		—
FTSE RAFI Europe Small-Mid Portfolio		4,939,532		—
FTSE RAFI Japan Portfolio		9,944,041		4,973,804
1-30 Laddered Treasury Portfolio		10,000,150		—
Emerging Markets Sovereign Debt Portfolio		14,214,611		—
Insured National Municipal Bond Portfolio		—		—
Insured California Municipal Bond Portfolio		—		—
Insured New York Municipal Bond Portfolio		—		—

Gains on in-kind transactions are not considered taxable gains for Federal income tax purposes.

Note 7. Trustees' Fees

The Adviser, as a result of the unitary advisory fee, compensates each Trustee on behalf of the Trust who is not an employee of the Adviser or its affiliates. Interested Trustees and Officers of the Trust do not receive any Trustees' fees.

The Trust has adopted a deferred compensation plan (the "Plan"). Under the Plan, a trustee who is not an "interested person" (as defined in the 1940 Act) and has elected to participate in the Plan (a "participating trustee") may defer receipt of all or a portion of his compensation ("Deferral Fees") from the Trust. The Deferral Fees payable to the participating trustee is credited to the trustee's Deferral Fee Account as of the first business dates of each calendar quarter such Fees would have been paid to the participating trustee. The value of the account increases with contributions to the account or with increases in the value of the shares owned, and the value of the account decreases with withdrawals from the account or with declines in the value of the shares owned.

Note 8. Capital

Shares are created and redeemed by the Trust only in Creation Unit size aggregations of 100,000 (200,000 for FTSE RAFI Developed Markets ex-U.S. Small-Mid Portfolio, FTSE RAFI Asia-Pacific ex-Japan Small-Mid Portfolio and FTSE RAFI Emerging Markets Portfolio). Only authorized participants are permitted to create or redeem from the Funds. Such transactions are generally permitted on an in-kind basis, with a balancing cash component to equate the transaction to the net asset value per unit of each Fund of the Trust on the transaction date.

156

Notes to Financial Statements (Continued)

PowerShares Exchange-Traded Fund Trust II

October 31, 2007

Note 9. Risk

The Funds concentrate their investments in the securities of non-U.S. issuers, subjecting them to greater risk than funds that invest in U.S. securities. As the Funds invest in securities denominated in foreign currencies, changes in currency exchange rates may negatively impact Funds' returns. The risk can also be associated with the level of development of the economies of the countries in a specific region. Since the Funds are non-diversified, they can invest a greater portion of assets in securities of individual issuers. As a result, changes in the market value of a single investment could cause greater fluctuations in share price than would occur in a diversified fund.

Municipal securities can be significantly affected by political changes as well as uncertainties in the municipal market related to taxation, legislative changes or the rights of municipal security holders. The Funds that invest in one state have greater exposure to adverse economic and political changes in that state.

Investments in fixed income securities are subject to interest rate and credit risks. Investing in debt securities involve some risk of default with respect to interest and/or principal payments.

Note 10. Idemnifications

Under the Trust's organizational documents, its Officers and Trustees are indemnified against certain liability arising out of the performance of their duties to the Trust. Additionally, in the normal course of business, the Trust enters into contracts with service providers that contain general indemnification clauses. The Trust's maximum exposure under these arrangements is unknown, as this would involve future claims that may be made against the Trust that have not yet occurred. However, based on experience, the Trust believes the risk of loss to be remote.

Note 11. New Accounting Pronouncement

On September 20, 2006, the FASB released Statement of Financial Accounting Standards No. 157 "Fair Value Measurement" ("FAS 157"). FAS 157 establishes an authoritative definition of fair value, sets out a framework for measuring fair value, and requires additional disclosures about fair-value measurement. The application of FAS 157 is required for fiscal years beginning after November 15, 2007 and interim periods within those fiscal years. At this time, management is currently assessing the impact of FAS 157, if any, on the Funds' financial statements and intends for the Funds to adopt FAS 157 provisions during the fiscal year ending October 31, 2009.

157

Report of Independent Registered Public Accounting Firm

To the Board of Trustees and Shareholders of PowerShares Exchange-Traded Fund Trust II:

In our opinion, the accompanying statements of assets and liabilities, including the portfolios of investments, and the related statements of operations and of changes in net assets and the financial highlights present fairly, in all material respects, the financial position of the portfolios indicated in Note 1 of the financial statements comprising PowerShares Exchange-Traded Fund Trust II (the "Trust") at October 31, 2007, and the results of each of their operations, the changes in each of their net assets and the financial highlights for each of the periods presented, in conformity with accounting principles generally accepted in the United States of America. These financial statements and financial highlights (hereafter referred to as "financial statements") are the responsibility of the Trust's management; our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these financial statements in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits, which included confirmation of securities at October 31, 2007 by correspondence with the custodian and brokers, provide a reasonable basis for our opinion.

PricewaterhouseCoopers LLP
New York, New York
December 24, 2007

158

Supplemental Information (Unaudited)

Federal Income Tax Information

The percentages of investment income (dividend income plus short-term gains, if any) qualify as follows:

	Qualified dividend income			Dividends-received deduction
Dynamic Asia Pacific Portfolio		75	%		0	%
Dynamic Developed International Opportunities Portfolio		100	%		0	%
Dynamic Europe Portfolio		100	%		0	%
FTSE RAFI Asia-Pacific ex-Japan Portfolio		86	%		0	%
FTSE RAFI Developed Markets ex-U.S. Portfolio		90	%		0	%
FTSE RAFI Europe Portfolio		100	%		0	%

The Funds intend to elect to pass through to shareholders the credit for taxes paid to foreign countries. The gross foreign source income and foreign taxes paid are as follows:

Fund	Gross Foreign Income		Foreign Taxes Paid
Dynamic Asia Pacific Portfolio	$	201,064	$	4,854
Dynamic Developed International Opportunities Portfolio		170,793		10,114
Dynamic Europe Portfolio		39,042		2,829
FTSE RAFI Asia Pacific ex-Japan Portfolio		133,793		1,896
FTSE RAFI Asia Pacific ex-Japan Small-Mid Portfolio		28,457		549
FTSE RAFI Developed Markets ex-U.S. Portfolio		91,895		5,582
FTSE RAFI Developed Markets ex-U.S. Small-Mid Portfolio		5,562		138
FTSE RAFI Emerging Markets Portfolio		10,722		217
FTSE RAFI Europe Portfolio		28,575		1,905
FTSE RAFI Europe Small-Mid Portfolio		7,279		172
FTSE RAFI Japan Portfolio		64,600		4,522

159

Supplemental Information (Unaudited) (Continued)

Trustees and Officers

The Trustees who are not affiliated with the Adviser or affiliates of the Adviser and executive officers of the Trust, their term of office and length of time served, their principal business occupations during the past five years, the number of portfolios in the Fund Complex overseen by each Trustee and the other directorships, if any, held by the Trustee, are shown below.

Name, Address and Age of Independent Trustees	Position(s) with Trust	Length of Time Served*	Principal Occupation(s)During Past 5 Years	Number of Portfolios in Fund Complex** Overseen by Trustees		Other Directorships Held by Trustees
Ronn R. Bagge (49) YQA Capital Management LLC 1755 S. Naperville Rd., Suite 100 Wheaton, IL 60187	Trustee	Since 2007	YQA Capital Management LLC (July 1998-Present); formerly Owner/CEO of Electronic Dynamic Balancing Co., Inc. (high-speed rotating equipment service provider)		89	None
Marc M. Kole (47) c/o PowerShares Capital Management LLC 301 W. Roosevelt Road Wheaton, IL 60187	Trustee	Since 2007	Assistant Vice President and Controller, Priority Health (September 2005-present); formerly, Interim CFO, Priority Health (July 2006-February 2007); Senior Vice President of Finance, United Healthcare (health insurance) (July 2004-July 2005); Senior Vice President of Finance, Oxford Health Plans (June 2000-July 2004)		89	None

  *  This is the date the Trustee began serving the Trust.

**  Fund Complex includes all open-end funds (including all of their Portfolios) advised by the Adviser. The Fund Complex consists of the Trust's 19 Portfolios and one other exchange-traded fund trust with 70 Portfolios advised by the Adviser.

160

Supplemental Information (Unaudited) (Continued)

Trustees and Officers (Continued)

Name, Address and Age of Independent Trustees	Position(s) with Trust	Length of Time Served*	Principal Occupation(s)During Past 5 Years	Number of Portfolios in Fund Complex** Overseen by Trustees		Other Directorships Held by Trustees
D. Mark McMillan (44) c/o PowerShares Capital Management LLC 301 W. Roosevelt Road Wheaton, IL 60187	Trustee	Since 2007	Member, Bell, Boyd & Lloyd LLC (1989 Present)		89	None
Philip M. Nussbaum (46) c/o PowerShares Capital Management LLC 301 W. Roosevelt Road Wheaton, IL 60187	Trustee	Since 2007	Chairman, Performance Trust Capital Partners (formerly Betzold, Berg, Nussbaum & Heitman, Inc.); formerly Managing Director, Communication Institute (May 2002-August 2003); Executive Vice President of Finance, Betzold, Berg, Nussbaum & Heitman, Inc. (March 1994-1999)		89	None

  *  This is the date the Trustee began serving the Trust.

**  Fund Complex includes all open-end funds (including all of their Portfolios) advised by the Adviser. The Fund Complex consists of the Trust's 19 Portfolios and one other exchange-traded fund trust with 70 Portfolios advised by the Adviser.

161

Supplemental Information (Unaudited) (Continued)

Trustees and Officers (Continued)

Name, Address and Age of Independent Trustee	Position(s) with Trust	Length of Time Served*	Principal Occupation(s)During Past 5 Years	Number of Portfolios in Fund Complex** Overseen by Trustee		Other Directorships Held by Trustee
Donald H. Wilson (47) c/o PowerShares Capital Management LLC 301 W. Roosevelt Road Wheaton, IL 60187	Trustee	Since 2007	President and Chief Operating Officer, AMCORE Financial, Inc. (bank holding company) (August 2007-Present), Executive Vice President and Chief Financial Officer, AMCORE Financial, Inc. (February 2006- August 2007); formerly, Senior Vice President and Treasurer, Marshall & Ilsley Corp. (bank holding company) (May 1995-February 2006)		89	None

  *  This is the date the Trustee began serving the Trust.

**  Fund Complex includes all open-end funds (including all of their Portfolios) advised by the Adviser. The Fund Complex consists of the Trust's 19 Portfolios and one other exchange-traded fund trust with 70 Portfolios advised by the Adviser.

162

Supplemental Information (Unaudited) (Continued)

Trustees and Officers (Continued)

Name, Address and Age of Management Trustee	Position(s) with Trust	Length of Time Served*	Principal Occupation(s) During Past 5 Years	Number of Portfolios in Fund Complex*** Overseen by Trustee		Other Directorships Held by Trustee
H. Bruce Bond (44)** PowerShares Capital Management LLC 301 W. Roosevelt Road Wheaton, IL 60187	Chairman of the Board, Trustee and Chief Executive Officer	Since 2007	Managing Director, PowerShares Capital Management LLC (August 2002-Present); Manager, Nuveen Investments (April 1998- August 2002)		89	None

  *  This is the date the Management Trustee began serving the Trust.

  **  Interested person as defined in Section 2(a)(19) of the 1940 Act.

***  Fund Complex includes all open-end funds (including all of their Portfolios) advised by the Adviser. The Fund Complex consists of the Trust's 19 Portfolios and one other exchange-traded fund trust with 70 Portfolios advised by the Adviser.

163

Supplemental Information (Unaudited) (Continued)

Trustees and Officers (Continued)

Name, Address and Age of Officers	Position(s) with Trust	Length of Time Served*	Principal Occupation(s) During Past 5 Years
Bruce T. Duncan (53) PowerShares Capital Management LLC 301 W. Roosevelt Road Wheaton, IL 60187	Chief Financial Officer and Treasurer	Since 2007	Senior Vice President of Finance, PowerShares Capital Management LLC (September 2005-Present); Private Practice Attorney (2000-2005); Vice President of Investor Relations, The ServiceMaster Company (1994-2000); Vice President of Taxes, The ServiceMaster Company (1990-2000)
Kevin R. Gustafson (42) PowerShares Capital Management LLC 301 W. Roosevelt Road Wheaton, IL 60187	Chief Compliance Officer	Since 2007	General Counsel and Chief Compliance Officer, PowerShares Capital Management LLC (September 2004-Present); Attorney, Nyberg & Gustafson (2001-2004); Attorney, Burke, Warren, McKay & Serritella, P.C. (1997-2000)
Keith Ovitt (45) PowerShares Capital Management LLC 301 W. Roosevelt Road Wheaton, IL 60187	Secretary	Since 2007	Managing Director, PowerShares Capital Management LLC (April 2003-Present); President, Ovitech (2002-2003); Vice President of Information Systems for DFG Foods, LLC (Division of FoodBrands America/Tyson Foods) (1999-2002); Systems Manager, Nabisco Biscuit Company (1997-1999)

*   This is the period for which the Officers began serving the Trust. Each Officer serves an indefinite term, until his successor is elected.

164

Board Considerations Regarding Continuation of Investment AdvisoryAgreement (Unaudited)

At a meeting held on October 2, 2007, the Board of Trustees of the PowerShares Exchange-Traded Fund Trust II (the "Trust"), including the Independent Trustees, approved the Investment Advisory Agreement between PowerShares Capital Management LLC (the "Adviser") and the Trust for the following 26additional series (the "Funds"):

Fixed Income and Municipal Funds

PowerShares1-10 Laddered Treasury Portfolio

PowerShares 1-20 Laddered Treasury Portfolio

PowerShares 1-30 Laddered Treasury Portfolio

PowerShares 1-5 Laddered Treasury Portfolio

PowerShares Aggregate Bond Portfolio

PowerShares Preferred Portfolio

PowerShares Emerging Markets Sovereign Debt Portfolio

PowerShares High Yield Corporate Bond Portfolio

PowerShares Investment Grade Corporate Bond Portfolio

PowerShares Insured National Municipal Bond Portfolio

PowerShares National Municipal Bond Portfolio

PowerShares Insured New York Municipal Bond Portfolio

PowerShares Insured California Municipal Bond Portfolio

PowerShares VRDO Tax-Free Weekly Portfolio

International Equity Funds

PowerShares DWA Developed Markets Technical Leaders Portfolio

PowerShares DWA Emerging Markets Technical Leaders Portfolio

PowerShares Global Nuclear Energy Portfolio

PowerShares Developed Markets Infrastructure Portfolio

PowerShares Emerging Markets Infrastructure Portfolio

PowerShares Space and Satellite Portfolio

PowerShares DJ Global Exchanges Portfolio

PowerShares Asia-Pacific Water Portfolio

PowerShares FTSE RAFI International Real Estate Portfolio

Specialty Funds

PowerShares Autonomic Growth NFA Global Asset Portfolio

PowerShares Autonomic Balanced Growth NFA Global Asset Portfolio

PowerShares Autonomic Balanced NFA Global Asset Portfolio

The Trustees reviewed information from the Adviser describing: (i) the nature, extent and quality of services to be provided, (ii) since Fund performance was not available, the correlation and tracking error between the indices tracked by other exchange-traded funds ("ETFs") for which the Adviser serves as such and those funds' performance, (iii) the costs of services to be provided and estimated profits to be realized by the Adviser, (iv) the extent to which economies of scale may be realized as the Funds grow, (v) whether fee levels reflect any possible economies of scale for the benefit of Fund shareholders, (vi) comparisons of services rendered and amounts paid to other registered investment companies and (vii) any benefits to be realized by the Adviser from its relationship with the Funds. Based on all of the information considered and the conclusions reached, the Board, including the Independent Trustees, determined to approve the Investment Advisory Agreement for each Fund listed above. No single factor was determinative in the Board's analysis.

Nature, Extent and Quality of Services. In evaluating the nature, extent and quality of the Adviser's services, the Trustees reviewed information concerning the functions to be performed by the Adviser, information describing the Adviser's current organization and projected staffing, and the background and experience of the persons responsible for the day-to-day management of the Funds, and considered the quality of services provided by the Adviser to other ETFs. The Trustees reviewed matters related to the

165

Board Considerations Regarding Continuation of Investment AdvisoryAgreement (Unaudited) (Continued)

Adviser's portfolio transaction policies and procedures. The Trustees reviewed reports on the correlation and tracking error between the underlying index and the performance of other ETFs for which the Adviser services as investment adviser.

The Trustees also considered the services to be provided by the Adviser in its oversight of the Funds' administrator, custodian and transfer agent. They noted the significant amount of time and effort that had been devoted to this oversight function for the other ETFs and that was expected to be provided for the Funds.

Based on their review, the Trustees concluded that the nature and extent of services to be provided by the Adviser to each Fund were appropriate and that the quality was expected to be good.

Fees, Expenses and Profitability. The Trustees reviewed and discussed the information provided by the Adviser on each Fund's expected total expense ratio and proposed advisory fee, as compared to information prepared by Lipper Inc., an independent source, on expense ratios and advisory fees of a broad universe of ETFs and other index funds. The Adviser supplemented the information prepared by Lipper Inc. with data it compiled on expense ratios and advisory fees of newer ETFs that recently commenced operations. The Trustees also considered data from an August 2007 report by Morgan Stanley, Inc. showing average expense ratios for various types of ETFs and open-end funds, including index funds. The Trustees noted that the annual advisory fee to be charged to the Funds was a unitary fee, and that the Adviser agreed to pay all expenses of the Funds except brokerage commissions and other trading expenses, taxes and extraordinary expenses. The Trustees noted that the advisory fees were generally at the higher end of the ETF universe, but were generally lower than fees for open-end (non-ETF) funds and closed-end funds, and were reasonable because of the complexity of the indices, which generally require more frequent rebalancing of the portfolios, the distinguishing factors of the Funds, and the higher administrative, operational and management oversight costs for the Adviser. The Trustees also noted that some of the higher advisory fees were attributable to higher trading and custody costs for certain jurisdictions, and to higher license fees payable out of the unitary fee charged to the Funds. The Board noted that the Adviser represented that the advisory fees were competitive with those of their ETF peers. The Board considered the waiver that would be in place through October 31, 2008 for the PowerShares Insured National Municipal Bond Portfolio, the PowerShares National Municipal Bond Portfolio, the PowerShares Insured New York Municipal Bond Portfolio and the PowerShares Insured California Municipal Bond Portfolio. The Board concluded that the advisory fee and expected total expense ratio for each Fund are reasonable and appropriate in amount in light of the quality of services expected to be provided.

In conjunction with their review of fees, the Trustees also considered information provided by the Adviser on the revenues received by the Adviser as investment adviser to the other ETFs, as well as the fees waived and expenses reimbursed by the Adviser for those ETFs. The Trustees reviewed information provided by the Adviser on its profitability as well as any profits realized by the Adviser from its relationship to those ETFs. The Trustees noted the Adviser's statement that its costs of managing those ETFs generally exceeded the amount payable as management fees under the investment advisory agreement for those funds. The Trustees concluded that the estimated profits to be realized by the Adviser with respect to each Fund appeared to be reasonable in comparison with the costs of providing investment advisory services to the Fund.

166

Board Considerations Regarding Continuation of Investment AdvisoryAgreement (Unaudited) (Continued)

Economies of Scale and Whether Fee Levels Reflect These Economies of Scale. The Trustees reviewed the information provided by the Adviser as to the extent to which economies of scale are realized as each Fund grows and whether fee levels reflect economies of scale for the benefit of shareholders. The Trustees noted that certain fixed costs associated with the management of the Funds can be reduced on a per-Fund basis, and that although such economies would be enjoyed by the Adviser, a unitary fee provides certainty in expenses for the Funds. The Trustees considered whether the advisory fee rate for each Fund is reasonable in relation to the projected asset size of each Fund, and concluded that the flat advisory fee was reasonable and appropriate.

The Trustees noted that the Adviser had not identified any further benefits that it derived from its relationship with the Funds, and had noted that it does not have any soft-dollar arrangements.

Based on all of the information considered and the conclusions reached, the Board, including the Independent Trustees, determined to approve the Investment Advisory Agreement for each Fund listed above. No single factor was determinative in the Board's analysis.

167

PowerShares Leading the Intelligent ETF Revolution

PowerShares continues to offer new solutions to the complex needs demanded by advisors and investors today. PowerShares is "Leading the Intelligent ETF Revolution" providing investment advisors and investors with institutional-caliber asset management by seeking to replicate enhanced indexes in one of the more benefit-rich investment vehicles available in the marketplace today, the exchange-traded fund (ETF). Each PowerShares fund can be classified into one of three different categories based on the objective and characteristics of its underlying index: Intelligent Index, Intelligent Exposure and Intelligent Access.

For most recent portfolio performance, please visit our website at www.powershares.com

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Intelligent Index

PowerShares believes that having insight into a stock's investment merit can have a positive impact on performance. Therefore, most PowerShares ETFs are based on Intelligent Indexes, which seek to provide alpha¹ by identifying stocks with the greatest investment merit. These indexes use proprietary methodologies to identify financially strong, effectively managed and attractively priced companies with strong capital appreciation potential. Because their objective is to maximize performance, Intelligent Indexes may look different from the market.

Exchange-Traded Funds

Intelligent Index

PWC  -  Dynamic Market

PWO  -  Dynamic OTC

PIQ  -  Dynamic MagniQuant

PJF  -  Dynamic Large Cap

PJG  -  Dynamic Mid Cap

PJM  -  Dynamic Small Cap

PWB  -  Dynamic Large Cap Growth

PWV  -  Dynamic Large Cap Value

PWJ  -  Dynamic Mid Cap Growth

PWP  -  Dynamic Mid Cap Value

PWT  -  Dynamic Small Cap Growth

PWY  -  Dynamic Small Cap Value

PGZ  -  Dynamic Aggressive Growth

PVM  -  Dynamic Deep Value

PYZ  -  Dynamic Basic Materials Sector

PEZ  -  Dynamic Consumer Discretionary Sector

PSL  -  Dynamic Consumer Staples Sector

PXI  -  Dynamic Energy Sector

PFI  -  Dynamic Financials Sector

PTH  -  Dynamic Healthcare Sector

PRN  -  Dynamic Industrials Sector

PTF  -  Dynamic Technology Sector

PTE  -  Dynamic Telecommunications & Wireless

PUI  -  Dynamic Utilities

PJB  -  Dynamic Banking

PBE  -  Dynamic Biotechnology & Genome

PKB  -  Dynamic Building & Construction

PXE  -  Dynamic Energy Exploration & Production

PBJ  -  Dynamic Food & Beverage

PHW  -  Dynamic Hardware & Consumer Electronics

PTJ  -  Dynamic Healthcare Services

PIC  -  Dynamic Insurance

PEJ  -  Dynamic Leisure and Entertainment

PBS  -  Dynamic Media

PXQ  -  Dynamic Networking

PXJ  -  Dynamic Oil & Gas Services

PJP  -  Dynamic Pharmaceuticals

PMR  -  Dynamic Retail

PSI  -  Dynamic Semiconductors

PSJ  -  Dynamic Software

1 Alpha is a measure of risk adjusted performance relative to a benchmark or the market.

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169

Intelligent Exposure

For investors looking for more market-like exposure, PowerShares offers a lineup of ETFs that seek to track indexes with an Intelligent Exposure objective. These indexes seek to provide accurate exposure to the economy, yet are constructed using more sophisticated techniques than traditional benchmark indexes, which typically use a weighting structure based on market capitalization. Under this traditional structure, market speculation can lead to significant mispricing of stocks and, therefore, suboptimal weights in the index. But indexes seeking Intelligent Exposure use a weighting structure based on company fundamentals: sales, cash flow, book value and dividends. PowerShares believes these factors paint a truer picture of a company's size and lead to more optimal index weightings.

Exchange-Traded Funds

Intelligent Exposure

PRF  -  FTSE RAFI US 1000

PRFZ  -  FTSE RAFI US 1500 Small-Mid

PRFM  -  FTSE RAFI Basic Materials Sector

PRFG  -  FTSE RAFI Consumer Goods Sector

PRFS  -  FTSE RAFI Consumer Services Sector

PRFE  -  FTSE RAFI Energy Sector

PRFF  -  FTSE RAFI Financials Sector

PRFH  -  FTSE RAFI Health Care Sector

PRFN  -  FTSE RAFI Industrials Sector

PRFQ  -  FTSE RAFI Telecom & Technology Sector

PRFU  -  FTSE RAFI Utilities Sector

Intelligent Access

Without targeted investment products, unique market segments such as currency or nanotech may be difficult for investors to access. These segments are the focus of indexes that promote Intelligent Access. PowerShares has a diverse lineup of ETFs based on indexes that offer exposure to specific, unique or previously uncovered market areas.

Exchange-Traded Funds

Intelligent Access

PPA  -  Aerospace & Defense

ADRA  -  BLDRS Asia 50 ADR Index Fund

ADRD  -  BLDRS Developed Markets 100 ADR Index Fund

ADRE  -  BLDRS Emerging Markets 50 ADR Index Fund

ADRU  -  BLDRS Europe 100 ADR Index Fun

PKW  -  Buyback Achievers

PZD  -  Cleantech

PFM  -  Dividend Achievers

PDP  -  DWA Technical Lenders

PGF  -  Financial Preferred

PGJ  -  Golden Dragon Halter USX China

PHJ  -  High Growth Rate Dividend Achievers

PEY  -  High Yield Equity Dividend Achievers

PID  -  International Dividend Achievers

PSP  -  Listed Private Equity

PXN  -  Lux Nanotech

QQQQ  -  PowerShares QQQ

PYH  -  Value Line Industry Rotation

PIV  -  Value Line Timeliness Select

PHO  -  Water Resources

PBW  -  Wilderhill Clean Energy

PUW  -  Wilderhill Progressive Energy

PZI  -  Zacks Micro Cap

PZJ  -  Zacks Small Cap

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PowerShares Asset Class Guide

Domestic Equity

Broad

PWC  Dynamic Market

PWO  Dynamic OTC

PIV  Value Line Timeliness Select

PRF  FTSE RAFI US 1000

PRFZ  FTSE RAFI US 1500

PIQ  Dynamic MagniQuant

QQQQ  PowerShares QQQ

PKW  Buyback Achievers

PDP  DWA Technical Leaders

PVM  Dynamic Deep Value

PGZ  Dynamic Aggressive Growth

Style

PJF  Dynamic Large Cap

PWB  Dynamic Large Cap Growth

PWV  Dynamic Large Cap Value

PJG  Dynamic Mid Cap

PWJ  Dynamic Mid Cap Growth

PWP  Dynamic Mid Cap Value

PJM  Dynamic Small Cap

PWT  Dynamic Small Cap Growth

PWY  Dynamic Small Cap Value

PZJ  Zacks Small Cap

PZI  Zacks Micro Cap

International/Region

Region

PPGJ  Golden Dragon Halter USX China

ADRA  BLDRS Asia 50 ADR Index Fund

ADRD  BLDRS Developed Markets 100 ADR Index Fund

ADRE  BLDRS Emerging Markets 50 ADR Index Fund

ADRU  BLDRS Europe 100 ADR Index Fund

Income

PID  International Dividend Achievers

Income/Dividend

PEY  High Yield Equity Dividend Achievers

PHJ  High Growth Rate Dividend Achievers

PFM  Dividend Achievers

PGF  Financial Preferred

Sector and Industry

Sector

PUI  Dynamic Utilities

PYZ  Dynamic Basic Materials Sector

PEZ  Dynamic Consumer Discretionary Sector

PSL  Dynamic Consumer Staples Sector

PXI  Dynamic Energy Sector

PFI  Dynamic Financial Sector

PTH  Dynamic Healthcare Sector

PRN  Dynamic Industrials Sector

PTF  Dynamic Technology Sector

PTE  Dynamic Telecommunications & Wireless

PRFG  FTSE RAFI Consumer Goods Sector

PRFS  FTSE RAFI Consumer Services Sector

PRFE  FTSE RAFI Energy Sector

PRFF  FTSE RAFI Financials Sector

PRFH  FTSE RAFI Health Care Sector

PRFN  FTSE RAFI Industrials Sector

PRFM  FTSE RAFI Basic Materials Sector

PRFQ  FTSE RAFI Telecommunications & Technology Sector

PRFU  FTSE RAFI Utilities Sector

Industry

PJB  Dynamic Banking Sector

PBE  Dynamic Biotechnology & Genome

PKB  Dynamic Building & Construction

PXE  Dynamic Energy Exploration & Production

PBJ  Dynamic Food & Beverage

PHW  Dynamic Hardware & Consumer Electronics

PTJ  Dynamic Healthcare Services Sector

PIC  Dynamic Insurance

PEJ  Dynamic Leisure and Entertainment

PBS  Dynamic Media

PXQ  Dynamic Networking

PXJ  Dynamic Oil & Gas Services

PJP  Dynamic Pharmaceuticals

PMR  Dynamic Retail

PSI  Dynamic Semiconductors

PSJ  Dynamic Software

PPA  Aerospace & Defense

PBW  Clean Energy

PZD  Cleantech

PSP  Listed Private Equity

PXN  Nanotech

PUW  Progressive Energy

PYH  Value Line Industry Rotation

PHO  Water Resources

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PowerShares Risk Spectrum

Domestic Equity

More Conservative

Dynamic Deep Value

Dynamic Large Cap

Dynamic Mid Cap

Dynamic MagniQuant

Buyback Achievers

DWA Technical Leaders

Dynamic Small Cap

Dynamic Large Cap Value

FTSE RAFI US 1000

Dynamic Mid Cap Value

Dynamic Market

Dynamic Aggressive Growth

Dynamic Small Cap Value

FTSE RAFI US 1500 Small-Mid

Zacks Micro Cap

PowerShares QQQ

Dynamic Large Cap Growth

Dynamic Mid Cap Growth

Zacks Small Cap

Value Line Timeliness Select

Dynamic Small Cap Growth

Dynamic OTC

More Aggressive

International/Region

More Conservative

BLDRS Europe 100 ADR Index Fund

BLDRS Developed Markets 100 ADR Index Fund

BLDRS Asia 50 Index Fund

International Dividend Achievers

BLDRS Emerging Markets 50 ADR Index Fund

Golden Dragon Halter USX China

More Aggressive

Income/Dividend

More Conservative

Financial Preferred

High Yield Equity Dividend Achievers

Dividend Achievers

High Growth Rate Dividend Achievers

More Aggressive

Sector and Industry

More Conservative

Dynamic Consumer Staples Sector

Dynamic Food & Beverage

Dynamic Banking Sector

Dynamic Financial Sector

Dynamic Utilities

Dynamic Insurance

FTSE RAFI Health Care Sector

Dynamic Healthcare Sector

FTSE RAFI Financials Sector

Dynamic Industrials Sector

Dynamic Media

Aerospace & Defense

FTSE RAFI Industrials Sector

Dynamic Pharmaceuticals

Dynamic Consumer Discretionary Sector

Dynamic Healthcare Services Sector

Dynamic Leisure and Entertainment

FTSE RAFI Consumer Goods Sector

FTSE RAFI Utilities Sector

Water Resources

FTSE RAFI Consumer Services Sector

FTSE RAFI Basic Materials Sector

Dynamic Basic Materials Sector

Dynamic Retail

FTSE RAFI Energy Sector

Dynamic Energy Sector

Dynamic Building & Construction

Value Line Industry Rotation

Dynamic Technology Sector

Progressive Energy

Dynamic Biotechnology & Genome

Dynamic Software

Nanotech

Dynamic Energy Exploration & Production

FTSE RAFI Telecommunications & Technology Sector

Dynamic Hardware & Consumer Electronics

Dynamic Telecommunications & Wireless

Dynamic Oil & Gas Services

Cleantech

Listed Private Equity

Clean Energy

Dynamic Networking

Dynamic Semiconductors

More Aggressive

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172

Exchange-Traded Funds

ETFs are investment funds that trade like individual stocks on all of the major exchanges, similar to shares of publicly held companies. They can be bought and sold on an exchange at any moment during market hours. Since they are listed and traded on an exchange, you can be confident that you are investing in a well-regulated market.

ETFs are one of the fastest growing investment products in the worldwide financial marketplace. As of 3.31.2007, 432 ETFs were listed in the U.S. with $433 billion in assets, up from two products with only $1 billion in assets in 1995.

ETFs seek investment results that correspond generally to the price and yield (before fees and expenses) of a listed index. While most ETFs share a similar objective, the principal investment strategies of the underlying indexes can have substantial differences. It is important to gain a clear understanding of an ETF's underlying index as the index's objective is inherently passed on to the fund shareholders by seeking to replicate the index.

Indexes

An index is a selection process or appointed committee that groups selected securities together to track their movement in aggregate. While only a few indexes are mentioned on the daily news, there are hundreds of indexes in existence today that differ from each other in diverse ways.

Broad Market

Broad market indexes are what most people think of when an index is mentioned. These indexes are designed to track the performance of the broad market.

Benchmark

Benchmark indexes are created to set a standard by which the performance or movement of individual securities and asset managers can be measured.

Exchange Composite

These indexes are designed to provide a comprehensive measure of the performance of all commons stocks listed on a particular exchange.

Sector or Industry

The aggregate financial marketplace is generally broken down into roughly ten sectors which are further dissected into many specific industries.

Style

Style indexes are created to identify groups of stocks that are either growth (companies currently experiencing appreciation or significant earnings or revenue growth) or value (companies determined to be under priced by fundamental measures) oriented.

Company Size

Market-capitalization indexes group together companies that are similar in size based on the number of outstanding shares times the share price, while fundamentally weighted indexes group together stocks of companies based on their financial fundamental valuation.

International / Country

International indexes group together stocks of companies that are affiliated by location outside of the U.S. or companies located with a specific country or region.

Income / Bond

Income indexes group stocks based on their type of income of securities, while bond indexes are designed to show the average performance of a group of debt securities.

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173

Specialty / Enhanced

Many other specialty indexes are created with specific investment management objectives or for customized purposes. These indexes can be created specifically with the intention to be used as the basis for an ETF. Investor targets can be met through an ETF where the index has the objective(s) of capital appreciation, risk control, income or diversification.

Benefits of PowerShares

PowerShares ETFs offer investors a low-cost, tax-efficient investment in a professionally crafted portfolio consisting of some of the best managed companies and most timely investments. See important risk factors in back.

Tax Advantaged Product Design

Taxes may be one of the most critical and overlooked factors in wealth creation over time. The ETF product structure defers some or possibly all capital gains until investors sell their shares.

Low Ownership Cost

ETFs provide lower ownership cost because of their efficient structure. PowerShares have established expense caps to make the cost of ownership clear and straightforward for investors. Ordinary brokerage commissions apply.

Flexibility, Transparency

PowerShares' ETFs offer flexibility as shares can be bought and sold throughout the day through exchange trading. Fund holdings are disclosed every day. Options based on the funds are available, possibly increasing financial management opportunities for advisors and their clients.

Near Instant Liquidity, Trades at or Close to NAV

PowerShares may be bought and sold on the exchange at any time during market hours. Although shares are not individually redeemable directly from the fund itself, authorized participants may acquire shares and tender shares for redemption, through creation unit aggregations. ETFs area not closed-end funds and trade at or near net asset values.

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PROXY VOTING POLICIES AND PROCEDURES

A description of the Funds' proxy voting policies and procedures that the Funds use to determine how to vote proxies relating to portfolio securities is available, without charge and upon request, by calling (800) 337-4246. This information is also available on the Securities and Exchange Commission's ("Commission") website at www.sec.gov.

Information regarding how the Funds voted proxies for portfolio securities, if applicable, during the most recent 12-month period ended June 30, is also available, without charge and upon request, by (i) calling (800) 337-4246; or (ii) accessing the Funds' Form N-PX on the Commission's website at www.sec.gov.

QUARTERLY PORTFOLIOS

The Funds file their complete schedules of portfolio holdings with the Commission for the first and third quarters of each fiscal year on Form N-Q. The Funds' Forms N-Q are available on the Commission's website at www.sec.gov. The Funds' Forms N-Q may also be reviewed and copied at the Commission's Public Reference Room in Washington, DC; information on the operation of the Public Reference Room may be obtained by calling (800) SEC-0330.

There are risks involved in investing in ETFs, including possible loss of money. Investing in securities of small and medium sized companies involves greater risk than is customarily associated with investing in more established companies, and investments in concentrated industry sectors involve greater risks than investments that are more diversified. PowerShares ETFs are not actively managed and are subject to risks similar to stocks, including those related to short selling and margin maintenance. PowerShares ETFs are not FDIC insured, may lose value and have no bank guarantee. PowerShares is a registered trademark of PowerShares Capital Management LLC. Past performance is not a guarantee of future results.

A I M Distributors, Inc. is the distributor of the PowerShares Exchange-Traded Fund Trust II.

An investor should consider each Fund's investment objective, risks, charges and expenses carefully before investing. For more complete information about PowerShares ETFs call A I M Distributors, Inc. at (800) 337-4246 or visit our website powershares.com for a prospectus. Please read the prospectus carefully before investing.

301 W. Roosevelt Road
Wheaton, IL 60187

800.983.0903
www.powershares.com

P-PS-AR-8

Item 2. Code of Ethics.

The Registrant has adopted a Code of Ethics that applies to the registrant’s principal executive officer and principal financial officer.  This Code is filed as an exhibit to this report on Form N-CSR under Item 12(a)(1).

Item 3. Audit Committee Financial Expert.

The Fund’s Board of Trustees has determined that the Fund has at least one “audit committee financial expert” serving on its audit committee: Mr. Phillip Nussbaum, Mr. Marc Kole, and Mr. Donald Wilson. Each of these audit committee  members is “independent,” meaning that he is not an “interested person”  of the Fund (as that term is defined in Section 2(a)(19) of the Investment Company Act of 1940) and he does not accept any consulting, advisory, or other compensatory fee from the Fund (except in the capacity as a Board or committee member).

An “audit committee financial expert” is not an “expert” for any purpose, including for purposes of Section 11 of the Securities Act of 1933, as a result of being designated as an “audit committee financial expert.”  Further, the designation of a person as an “audit committee financial expert” does not mean that the person  has any greater duties, obligations, or liability than those imposed on the person without the “audit committee financial expert” designation.  Similarly, the designation of a person as an “audit committee financial expert” does not affect the duties, obligations, or liability of any other member of the audit committee or board of trustees.

Item 4. Principal Accountant Fees and Services.

(a)   Audit Fees.  The aggregate fees billed for the Registrant’s fiscal period ended October 31, 2007 for professional services rendered by the principal accountant for the audit of the Registrant’s annual financial statements or services that are normally provided by the accountant in connection with statutory and regulatory filings or engagements for such fiscal period were $266,000.

(b)   Audit-Related Fees.  The aggregate fees billed for the Registrant’s fiscal period ended October 31, 2007 for professional services rendered by the principal accountant for assurance and related services by the principal accountant that are reasonably related to the performance of the audit of the Registrant’s financial statements and are not reported above in Item 4(a) were $7,500. These fees principally related to the reviews of the Trust’s Registration Statements.

(c)   Tax Fees.  The aggregate fees billed for the Registrant’s fiscal period ended October 31, 2007 for professional services rendered by the principal accountant for tax compliance, tax advice and tax planning were $130,150.

(d)   All Other Fees.  All other aggregate fees billed for the Registrant’s fiscal period ended October 31, 2007 were $0.

(e)Audit Committee Pre-Approval Policies and Procedures.  In accordance with Rule 201(c)(7)(A), the Audit Committee pre-approves all of the Audit and Tax  Fees of the Registrant.  All of the services described in paragraphs (b) and (c) above were approved by the Audit Committee in accordance with paragraph (c) (7) (i) (c) of Rule 2-01 of Regulation S-X.

Item 5. Audit Committee of Listed Registrants.

The Registrant has a separately designated Audit Committee established in accordance with Section 3(a)(58)(A) of the Exchange Act, which consists of the independent trustees.  The Audit Committee members are Phillip Nussbaum, Mark McMillan, Ronn Bagge, Marc M. Kole and Donald H. Wilson.

Items 6. Schedule of Investments.

The Schedules of Investments are included as a part of the report to shareholders filed under Item 1 of this Form.

Item 7. Disclosure of Proxy Voting Policies and Procedures for Closed-End Management Investment Companies.

Not applicable.

Item 8.  Portfolio Managers of Closed-End Management Investment Companies.

Not applicable.

Item 9.  Purchases of Equity Securities by Closed-End Management Investment Company and Affiliated Purchasers.

Not applicable.

Item 10.  Submission of Matters to a Vote of Security Holders.

There have been no changes to the procedures by which shareholders may recommend nominees to the Registrant’s Board of Trustees that would require disclosure herein.

Item 11. Controls and Procedures.

a)Based on their evaluation of the Registrant’s disclosure controls and procedures (as defined in Rule 30a-3-(c) under the Investment Company Act of 1940) as of a date within 90 days of the filing date of this report, the Registrant’s President (principal executive officer) and Chief Financial Officer (principal financial officer) have concluded that such disclosure controls and procedures are reasonably designed and are operating effectively to ensure that material information relating to the Registrant, including its consolidated subsidiaries, is made known to them by others within those entities, particularly during the period in which this report is being prepared, and that the information required in filings on Form N-CSR is recorded, processed, summarized and reported on a timely basis.

b)There were no significant changes in the Registrant’s internal controls over financial reporting (as defined in Rule 30a-3(d) under the Investment Company Act of 1940) that occurred during the Registrant’s second fiscal half-year that have materially affected, or are reasonably likely to materially affect, the Registrant’s internal control over financial reporting.

Item  12. Exhibits.

(a)(1)       Code of Ethics.

(a)           Certifications of the Registrant’s Chief Executive Officer and Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 are attached as Exhibit 99.CERT.

(b)           Certifications of the Registrant’s Chief Executive Officer and Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 is attached as Exhibit 99.906CERT.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

(Registrant)			PowerShares Exchange-Traded Fund Trust II
By:	/s/  H. Bruce Bond
Name:		H. Bruce Bond
Title:		Chairman and Chief Executive Officer
Date:		December 31, 2007

Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed by the following persons on behalf of the Registrant and in the capacities and on the dates indicated.

By:	/s/  H. Bruce Bond
Name:			H. Bruce Bond
Title:			Chairman and Chief Executive Officer
Date:			December 31, 2007
By:		/s/   Bruce T. Duncan
Name:			Bruce T. Duncan
Title:			Chief Financial Officer
Date:			December 31, 2007