Each morning, PowerShares will disclose the contents of the portfolios on their Web site. Most days, the fund manager will not be able to make changes to that portfolio. But on the last business day of each week, the fund manager will be allowed to make up to three trades.

Those trades won't show up in public until the following Monday. The SEC obviously is accepting the index developers' views that since such discrepencies will only take place once a week in a limited number of trades, the fund values shouldn't deviate widely from the published holdings.

Creations and redemptions can't reflect the fund holdings exactly. To get around this, creations and redemptions will be made with a basket of securities that will be similar to—but not identical to—the actual portfolio. In addition, there will be a small cash component to true-up the value of the creation/redemption basket with the value of the portfolio holdings.

Mega-Cap ETF Even More Active

In contrast to the other two equity funds subadvised by AER, the PowerShares Active Mega-Cap Portfolio will be subadvised by Invesco, which owns both PowerShares and the AIM family of funds.

Instead of following a fixed quantitative screen, the prospectus gives the Active Mega-Cap manager wider discretion to implement a portfolio.

The fund will be able to trade at any time and on any day, in contrast to the once-per-week trading of the other two funds.

It can also theoretically trade as much as it wants. Changes in the portfolio will be reflected in the fund's published holdings on the following day, meaning the disclosed holdings may always be one day stale. In comparison, existing ETFs reveal their holdings daily.

This fund will follow the same creation/redemption mechanisms as the funds covered earlier, with representative baskets and a true-up cash component.

A fourth active ETF, the PowerShares Active Low-Duration Portfolio, will offer a similar broad mandate with bonds.

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