CHICAGO, IL -- (Marketwire) -- 01/28/09 -- Invesco PowerShares Capital Management LLC, a leading provider of exchange-traded funds (ETFs), today announced that it has filed registration statements for two new actively managed ETFs focused on the non-agency, Prime and Alt-A residential mortgage-backed securities (RMBS) markets. The anticipated fund names are as follows:

--  PowerShares Prime Non-Agency RMBS Opportunity Fund
--  PowerShares Alt-A Non-Agency RMBS Opportunity Fund
    

"We believe that various economic factors have converged to push the prices of many Prime and Alt-A residential mortgage-backed securities well below their fundamental values," said Bruce Bond, president and CEO of Invesco PowerShares. "We are hopeful that these ETFs will provide access and transparency into these markets along with some of the much needed additional liquidity originally intended by the TARP."

The Residential Mortgage-Backed Securities (RMBS) Market

Aggressive mortgage lending practices, declining home prices and a faltering economy have caused mortgage loan performance to deteriorate significantly over the last two years. Many holders of mortgage related securities have come under pressure to raise capital and reduce exposure to RMBS markets, resulting in systematic de-leveraging. Invesco PowerShares believes that these events have pushed the prices of many residential mortgage-backed securities well below fundamental values implied by conservative cash flow projections.

Even the prices of senior and super senior residential mortgage-backed securities, which generally have first right to principal payments and are typically the last to sustain losses, have been severely impacted despite their significant credit enhancement and advantageous position within the capital structure. As such, Invesco PowerShares believes this may be an opportunity for investors to recognize above average risk-adjusted returns by investing in discounted senior and super senior Prime and Alt-A residential mortgage-backed securities. In addition, Invesco PowerShares believes these securities should generate current principal and interest income as well as potential capital gains.

Market Environment Background: The Troubled Asset Relief Program (TARP)

On Sept. 19, 2008, the United States Treasury introduced the Troubled Asset Relief Program (TARP). "The underlying weakness in our financial system today is the illiquid mortgage assets that have lost value as the housing correction has proceeded.... These [assets] are clogging up our financial system, and undermining the strength of our otherwise sound financial institutions," said former Treasury Secretary Henry Paulson in a press release dated Sept. 19, 2008. At the time Mr. Paulson also stated that the federal government must implement a plan to restore our financial institutions by creating a program to transition these assets off their books.

Many of the assets that Invesco PowerShares believes were originally targeted for purchase by TARP Invesco PowerShares believes are not particularly "troubled" from a credit perspective, but are depressed in price due to systemic deleveraging. "What began as a Subprime lending problem has spread to other, less-risky mortgages," said Paulson.

In addition to cash considerations, the two anticipated ETFs anticipate allowing Authorized Participants (APs) to contribute specific blocks of residential mortgage-backed securities (RMBS) to the Funds in exchange for shares of the ETFs. This in-kind transaction may be advantageous for organizations seeking increased liquidity and diversification within their current exposure to RMBS markets. In addition, the Funds may offer increased flexibility with respect to balance sheet and capital requirements. As a result, it is anticipated that financial institutions which otherwise were not participating in the ETF market may find it advantageous to become an AP to transact directly with the Funds.

Fund Information

The Funds intend to invest primarily in non-agency, residential mortgage-backed securities. Residential mortgage loans are primarily classified into one of the following three categories based on the risk profile of the borrower and the property: Prime, Alt-A and Subprime.