Methodology Change | Solactive Equileap Global Gender Equality 100 Leaders Index | Effective Date 2023-07-01
Today, on the 2023-06-15, Solactive announces the following changes to the methodology of the following Indices (the ‘Affected Indices’):
|
NAME |
RIC |
ISIN |
|
Solactive Equileap Global Gender Equality 100 Leaders Price Return Index |
.SOLGGEPR |
DE000SLA3SX1 |
|
Solactive Equileap Global Gender Equality 100 Leaders Net Total Return Index |
.SOLGGENR |
DE000SLA3S00 |
|
Solactive Equileap Global Gender Equality 100 Leaders Gross Total Return Index |
.SOLGGEGR |
DE000SLA3S18 |
Rationale for Methodology Change
The Index provides exposure to companies which have demonstrated a commitment to gender diversity as part of their corporate responsibility strategy and have not been involved in certain controversial activities, defined in in section 2.2 of the guideline. Given the gender equality theme is part of the Governance pillar of the ESG score, which is already strong in the Index, the index methodology will be enhanced with an additional, monthly screen for breaches in the Norm-Based Research filter. This will strengthen the sustainability profile of the index. The filter will be applied within an extraordinary rebalancing process in section 3.2., replacing companies involved in controversial activities based on ISS ESG Norm-Based Research data on the last calculation day of each month. The replacement will follow the same procedure as on review days, already defined in the guideline.
Additionally, two clarifications will be applied to section 2.2. in the guideline
Changes to the Index Guideline
The following Methodology changes will be implemented in the following points of the Index Guideline (ordered in accordance with the numbering of the affected sections):
2.2 SELECTION OF THE INDEX COMPONENTS
“[….]
From (old version):
5. First, the top 30 US listed shares are included in the index, regardless of Gender Score. Then the next highest scoring US stocks will be added, but only if they have a score of at least 14, up to maximum 50 US stocks in total. Lastly the highest scoring companies from the rest of the world will be added to total 100 stocks in the composition, ensuring that no country is represented by more than 10 securities.
To (new version):
5. First, the top 50 US listed shares are included in the index. Next, the highest scoring companies from the rest of the world will be added to total 100 stocks in the composition, ensuring that no country is represented by more than 10 securities.
[….]
From (old version):
On each REVIEW DAY, the ongoing composition of the Index is reviewed for any changes in their controversial involvement or gender related controversies. If any security has been involved in a gender related controversy, as provided by Equileap, or has made it on the controversial activity exclusion list, this security will be removed in the process of the following upcoming quarterly REBALANCE DATE, and its weight (as of the upcoming REBALANCE DATE) will be redistributed to the highest ranked share not yet included in the index as determined at the last yearly REBALANCE DATE in September
To (new version):
On each REVIEW DAY, the ongoing composition of the Index is reviewed for any changes in their controversial involvement or gender related controversies. If any security has been involved in a gender related controversy, as provided by Equileap, or has made it on the controversial activity exclusion list, this security will be removed in the process of the following upcoming quarterly REBALANCE DATE, and its weight (as of the upcoming REBALANCE DATE) will be redistributed to the highest ranked share not yet included in the index as determined at the last yearly REBALANCE DATE in September. Thereby, US stocks will be replaced by US stocks while stocks from the rest of the world will be replaced by stocks from the rest of the world, ensuring that no country other than the US is represented by more than 10 stocks.
[….]”
3.2. EXTRAORDINARY REBALANCE
From (old version):
The INDEX is not rebalanced extraordinarily.
To (new version):
In addition to the ordinary rebalance, the INDEX is also rebalanced extraordinarily. These adjustments take place outside the rebalancing schedule and follow different rules than the ordinary rebalances. The extraordinary rebalance is triggered by the mechanism described below:
An extraordinary replacement of an INDEX COMPONENT takes place if such INDEX COMPONENT breaches one of the criteria in the Category “Norm-based Research” as outlined in Section 2.2. SOLACTIVE will carry out such replacement after the close on the last CALCULATION DAY of the month if it is informed by the ESG DATA PROVIDER about the breach at least ten CALCULATION DAYS before the last CALCULATION Day of the month. If such information is delivered later than that, the replacement of the INDEX COMPONENT will take place on the last CALCULATION DAY of the subsequent month. In any of these cases, the weight of the INDEX COMPONENT in question will be distributed, following the same procedure as on REVIEW DAYS.
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.