Methodology Change | Solactive China Electric Vehicle and Battery v2 USD Index | Effective Date 24/06/2022

Today, on the 23/05/2022, Solactive announces the following changes to the methodology of the following index/Indices (the ‘Affected Indices’):

Rationale for Methodology Change

The Affected Indices aim to represent the companies that are actively engaged in the Chinese electric vehicle and battery related industry. Solactive has determined that the Chinese electric vehicle and battery industry has grown over time and additional companies have entered this rising business segment. However, after an internal review process about the segments and the feedback from the market participants, Solactive has decided that the current number of 20 index constituents reflects the theme reasonably well and that the costs of an increase of the number of index constituents to 35 overweight the benefits at this stage. Solactive has also determined that the selection process should be kept based on FactSet instead of RBICS. Therefore, the suggested weighting scheme for the rebalancing on the second Friday in July 2022 to reduce the turnover and to decrease the price impact due to an increase of the number of index constituents to 35 will be irrelevant.

The suggested adjustment of the calculation formula of the indices from Standard to Divisor will take place.

Changes to the Index Guideline

The following Methodology changes will be done in the following points of the Index Guideline (ordered in accordance with the numbering of the affected sections):

Section 4.1 Index Formula

From (old version):
“[…]
The calculation is performed according to the Equity Index Methodology, which is available on the SOLACTIVE website: https://www.solactive.com/documents/equity-index-methodology/. The standard index formula stipulates that the level of the INDEX changes based on the change of the prices of its INDEX COMPONENTS taking into account their weight in the INDEX and any currency conversion in case the price of an INDEX COMPONENT is quoted in a currency other than the INDEX CURRENCY.
Any dividends or other distributions are reinvested back into the INDEX COMPONENT paying the dividend or other distribution at the opening of the effective date (the so called ex-date) of the payment of such dividend or other distribution.
[…]”
To (new version):
“[…]
The calculation is performed according to the Equity Index Methodology, which is available on the SOLACTIVE website: https://www.solactive.com/documents/equity-index-methodology/. The divisor index formula stipulates that the level of the INDEX changes based on the change of the prices of its INDEX COMPONENTS taking into account their weight in the INDEX and any currency conversion in case the price of an INDEX COMPONENT is quoted in a currency other than the INDEX CURRENCY.
Any dividends or other distributions are reinvested across the entire basket of INDEX COMPONENTS by means of a divisor at the opening of the effective date (the so-called ex-date) of the payment of such dividend or other distribution.
[…]”

Section 4.2 Accuracy

From (old version):
The level of the INDEX will be rounded to two decimal places. TRADING PRICES and foreign exchange rates will be rounded to six decimal places.

To (new version):
The level of the INDEX will be rounded to two decimal places. Divisors will be rounded to six decimal places. TRADING PRICES and foreign exchange rates will be rounded to six decimal places.

Defined terms used in this announcement, but not defined herein, have the meaning assigned to them in the respective index guideline of the Affected Indices. The amended version of the index guideline will be available on the effective date.