PowerShares Plans Munibond ETFs

August 8, 2007

SAN DIEGO (ETFguide.com) - If no one else beats them to the punch PowerShares intends to offer the first family of municipal bond exchange-traded funds (ETFs).

This week the Lisle, IL-based ETF manager said its first two offerings, the PowerShares Insured Municipal Bond and the PowerShares National Municipal Bond Portfolios, are expected to begin trading in October.

The ETF municipal bond portfolios will incorporate rules-based indexes to be provided by Merrill Lynch.

"We are very proud to be working on another first for the ETF marketplace and to be working with Merrill Lynch on such an important initiative," said Bruce Bond, President of PowerShares. "These new portfolios represent important additions to the industry and to our existing family of 95 ETFs."

The insured munibond portfolio is based on a soon to be launched Merrill Lynch US Insured Core Municipal Securities Index. The index will track the performance of U.S. dollar-denominated AAA insured tax-exempt long-term debt publicly issued by U.S. municipalities in the U.S. domestic market.

The other ETF will track the Merrill Lynch US Core Municipal Securities Index, which will hawk the performance of U.S. dollar-denominated investment grade tax-exempt long-term debt publicly issued by a U.S. municipality in the U.S. domestic market.

Both indexes will adjust monthly and exclude single and multi-family housing bonds, tobacco bonds and all securities subject to AMT (Alternative Minimum Tax).

According to PowerShares, these fixed-income ETFs will target investors that want diversified exposure to a portfolio of municipal bonds in an affordable and convenient package.