Methodology Change | Solactive US CNS Therapeutics Indices | Effective Date 29 May 2025
Today, on the 22nd of May 2025, Solactive announces the following changes to the methodology of the following indices (the ‘Affected Indices’):
|
NAME |
RIC |
ISIN |
|
Solactive US CNS Therapeutics Index PR |
.SOLCNSP .SOLCNSN .SOLCNST |
DE000SL0L4X4 DE000SL0L4Y2 DE000SL0L4Z9 |
Rationale for methodology change
Taking into account the feedback received from the Market Consultation, Solactive has determined to update the current capping constraint by applying a unique cap of 12% to the top 3 ranked securities and a cap of 4.5% for all the remaining index components. Additionally, the index will have a monthly re-weighting mechanism and change its ordinary rebalance schedule from semi-annual to quarterly.
This approach ensures that there is more flexibility to comply with the local Korean ETF Regulation where securities with individual weights below 5% can collectively account for more than 50% of the portfolio. Specifically, Article 80, Section 3-2, Point (b) of the relevant regulation states that “at least 50% of the total assets of the collective investment scheme shall be invested in securities issued by other corporations, with no more than 5% of the total assets invested in each security.”
Changes to the Index Guideline
Section 2.3: WEIGHTING OF THE INDEX COMPONENTS
Old
“[…]
|
Rank |
Weight Cap |
|
1 |
Fixed at 20% |
|
2 |
Fixed at 15% |
|
3 |
Fixed at 10% |
|
4-20 |
Capped at 4% |
[…]”
New:
“[…]
|
Rank |
Weight Cap |
|
1-3 |
Capped at 12% |
|
4-20 |
Capped at 4.5% |
[…]”
3.1. ORDINARY REBALANCE
Old
“[…]
In addition, if the INDEX ADMINISTRATOR determines that the INDEX weight of any INDEX COMPONENT is greater than 25% on any REVIEW DAY, then a weight cap is applied for each INDEX COMPONENT by re-distributing any weight which is larger than 20% to the other INDEX COMPONENTS proportionally in an iterative manner.
[…]”
New:
“[…]
In addition, the Index will be re-weighted as per Section 2.3 on each REWEIGHTING DAY based on the weights calculated on the Review Day. If the total number of index components on the Review Day are less than 18, a new index composition will be determined as per Section 2.1 and 2.2.
[…]”
Old
“[…]
“REBALANCE DAY” is the second Thursday in June and December. If that day is not a TRADING DAY or CALCULATION DAY the REBALANCE DAY will be the immediately following TRADING DAY and CALCULATION DAY.
“REVIEW DAY” is the last Calculation Day of each calendar month other than May and November.
[…]”
New:
“[…]
“REBALANCE DAY” is the second Thursday in March, June, September and December. If that day is not a TRADING DAY or CALCULATION DAY the REBALANCE DAY will be the immediately following TRADING DAY and CALCULATION DAY.
“REVIEW DAY” is the last Calculation Day of each calendar month other than February, May, August and November.
[…]”
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.