2

3

4 Source: Research Affiliates, LLC

5

6

7

8

Source: Research Affiliates, LLC, Top 10 U.S. stocks based on data from 12/31/2005. The fundamental weighting is equally based on book value, sales, dividends and cash flow, with dividends excluded from the weighting for non-dividend paying stocks.

9

10 Source: Research Affiliates, LLC

11 Source: Research Affiliates, LLC

12

13 * Weighting is based on fundamental factors such as sales, cash flow, dividends or book value.

14

15

16

17 Source: Research Affiliates, LLC

CAP 1000 is the largest 1000 stocks by market cap. The Fundamental Composite is equally weighted based on book value, sales, dividends and cash flow, with dividends excluded from the weighting for non-dividend paying stocks. It does not include trading costs. Returns are from 12/31/1961 to 12/31/2005.

18 Source: Research Affiliates

19 Source: Research Affiliates

20 Source: Research Affiliates

21 Source: Research Affiliates

22 Source: Yahoo! Finance

RUI: Russell 1000 Index PRF: PowerShares FTSE RAFI US 1000

23 Source: Yahoo! Finance

RUT: Russell 2000 Index PRFZ: PowerShares FTSE RAFI US 1500

24 Source: Research Affiliates

25

26

27 Source: Research Affiliates, LLC study of 1962-2005 returns.

28