ETF Research Center

Invesco Aerospace & Defense Portfolio seeks investment results that correspond to the price and yield of the SPADE(TM) Defense Index, which tracks stocks of companies involved in the defense industry.

FUND BASICS
Category	US Equities
Fund Sponsor	Invesco PowerShares
Website	www.powershares.com
Inception date	Oct 26, 2005
Assets (mns)	$1,108
Currency	USD
Expense ratio	59 bp
Distributions	Quarterly

FUND STRUCTURE
Regulation	Open-Ended Fund
Custodian	Bank of New York Mellon
Weighting	Market Cap
Index replication	Full
Uses derivatives	No
Options available	Yes

SECTOR BREAKDOWN

CONSTITUENT BREAKDOWN
No. of constituents	49
Wgt avg mkt cap (mns)	$54,492
Large cap (>$10bn)	75.8%
Mid cap ($2-10bn)	21.6%
Small cap (<$2bn)	2.6%
Developed mkts	100.0%
Emerging mkts	0.0%

TOP TEN HOLDINGS
Total	56.6 %
UNITED TECHNOLOGIES CORP	7.7 %
HONEYWELL INTERNATIONAL INC	7.7 %
LOCKHEED MARTIN CORP	6.9 %
BOEING CO	6.5 %
RAYTHEON COMPANY	5.8 %
NORTHROP GRUMMAN CORP	5.7 %
GENERAL DYNAMICS CORP	5.1 %
TRANSDIGM GROUP INC	4.1 %
HARRIS CORP	3.7 %
HEICO CORP	3.6 %

TOP COUNTRY EXPOSURE
	UNITED STATES	97.8 %
	ISRAEL	1.5 %
	LUXEMBOURG	0.7 %

HISTORICAL PERFORMANCE info

	Custom date range	Compare to
	thru

Standardized Annual Returns (thru October 31)
Year-to-date	1 year	5 years	10 years	Since Incep.
37.2%	24.9%	16.2%	17.3%	12.6%

Market Correlations
versus...	Beta	R-squared
S&P500	1.13	66%
MSCI EAFE	0.93	38%
MSCI Emg. Mkts.	0.61	27%

Technical Indicators
Recent close	$69.24
30d moving avg.	$67.15
Annualized volatility	16.8%
Short interest (ETF)	0.3%
Short interest (Underlying)	3.4%
Relative strength (RSI)	69

Liquidity measures
Avg. volume (thou.)	78
Turnover	0.5%
Bid/Ask (% of price)	0.05%
ADV underlying (mns)	$4,821

Distributions

FINDING ALTERNATIVE FUNDS

Below is a list of 20 potential alternatives to the Invesco Aero & Defense ETF based on the alternatives' overlap in portfolio holdings with PPA. Consider funds with lower expense ratios and/or higher ALTAR Score™ ratings as possible alternatives.

Benchmark ticker:

PPA

Expense:

59 bp

ALTAR Score™:

5.1%

ALTERNATIVE ETFs BASED ON OVERLAP WITH PPA
Ticker	Fund Name	Overlap¹ vs PPA (%)	Expense ratio (bp)	Savings vs PPA (bp)	ALTAR Score™ (%)	ALTAR vs PPA (%)
ITA	iShares U.S. Aerospace & Defense	60.4	42	17	5.4	+0.3
XKFF	SPDR Kensho Final Frontiers	55.1	45	14	4.9	-0.2
XAR	SPDR S&P Aerospace & Defense	52.6	35	24	5.0	-0.2
FITE	SPDR Kensho Future Security	36.5	45	14	4.1	-1.1
XLI	Industrials Select Sector SPDR	31.5	13	46	6.2	+1.1
FIDU	Fidelity Industrials	28.6	8	51	6.0	+0.9
VIS	Vanguard Industrials	27.5	10	49	6.3	+1.2
IFLY	ETFMG Drone Economy Strategy	25.5	75	-16	0.5	-4.6
IYJ	iShares DJ US Industrials	23.5	42	17	5.4	+0.3
JHMI	John Hancock Multifactor Industrials	19.5	40	19	6.7	+1.5
KOMP	SPDR Kensho New Economies Composite	18.5	20	39	3.8	-1.3
FXR	First Trust Industrials/Producer Durables	17.8	62	-3	7.0	+1.9
EXI	iShares Global Industrials	17.0	46	13	6.1	+1.0
RGI	Invesco S&P Equal Weight Industrials	16.9	40	19	6.7	+1.5
UFO	Procure Space	14.7	75	-16	2.1	-3.0
PRN	Invesco DWA Industrials Momentum	14.5	60	-1	4.2	-0.9
PDP	Invesco DWA Technical Leaders	11.3	62	-3	3.9	-1.2
DIA	SPDR Dow Jones Industrial Average	10.1	17	42	6.1	+1.0
HONR	InsightShares Patriotic Employers	9.8	65	-6	7.0	+1.9
VETS	Pacer Military Times Best Employers	9.6	60	-1	6.4	+1.3

¹Overlap is the percentage of holdings by weight that are identical. For example, if Fund A has a 2% position in Apple, Inc. (AAPL) and Fund B has a 5% position, their overlapping position in AAPL is 2%.

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RESULTS & ESTIMATES

	2014	2015	2016	2017	2018	2019E	2020E
Sales per share	**	**	**	**	**	**	**
Earnings per share	**	**	**	**	**	**	**
Dividends per share	**	**	**	**	**	**	**
Book value per share	**	**	**	**	**	**	**

Sales per share growth		**%	**%	**%	**%	**%	**%
EPS growth		**%	**%	**%	**%	**%	**%

Sales per share growth		**%	**%	**%	**%	**%	**%
EPS growth		**%	**%	**%	**%	**%	**%

OTHER FUNDAMENTAL METRICS

Long term EPS growth est.	**%		Debt-to-equity	**x
Asset turnover	**%		Assets-to-equity	**x

Return on equity

Revision activity*

*Six months ago = 100

Net margins

Compound annual growth rates

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VALUATION METRICS

	2018	2019E	2020E
Price-to-sales	**	**	**
Price-to-earnings	**	**	**
Price-to-cash flow	**	**	**
Price-to-growth	**	**	**
Price-to-book value	**	**	**
Yield	**	**	**

Historical valuation trends

Forward multiple:	Invesco Aero & Defense
Relative to:	S&P500	MSCI EAFE	MSCI Emg. Mkts.	Other ETF:

UNDERWEIGHT

Below average appreciation potential. A rating of UNDERWEIGHT is assigned to ETFs with ALTAR Scores in the 2nd quintile (ranking higher than only 20%-40%) of their category. Typically, funds in this category consist of stocks trading at relatively expensive valuations and/or having below-average fundamentals.

ALTAR Score™

Calculation of ALTAR Score™
Avg. Return on Equity	23.8	%
Divided by: Fwd. P/BV	4.2	x
Less: Expense ratio	59	bp
Equals: ALTAR Score	5.1	%

More information on ALTAR Score™

MODERN PORTFOLIO THEORY info

CONSENSUS RECOMMENDATIONS: FUND CONSTITUENTS

COMPOSITE RATING	1.43	CATEGORY AVERAGE	1.55

The composite rating is a weighted average of analysts' consensus recommendations for individual ETF constituents, based on the following scale: BUY = 1; OVERWEIGHT = 1.5, HOLD = 2; UNDERWEIGHT = 2.5; and SELL = 3. Readers are cautioned that because analyst ratings tend to be inflated, the composite score may be more useful as a relative measure of sentiment between funds rather than as a stand-alone recommendation.