Index Mehodology MSCI Index Calculaion Mehodology Index Calculaion Mehodology for he MSCI Equiy Indexes Augus 2014
Index Mehodology MSCI Index Calculaion Mehodology Augus 2014 Conens Conens... 2 Inroducion... 5 MSCI Equiy Indexes... 6 Secion 1: MSCI Price Index Mehodology... 7 1.1. Price Index Level... 7 1.1.1. Index Marke Capializaion... 7 1.1.2. Example of calculaion... 10 1.2. Price Index Level (Alernaive Calculaion Formula Conribuion Mehod)... 11 1.2.1. Securiy Conribuion o he Index... 11 1.2.2. Today s Iniial Securiy Weigh... 12 1.2.3. Securiy Daily Price Reurn... 13 1.2.4. Example of calculaion using conribuion... 15 1.3. Nex Day Iniial Securiy Weigh... 16 1.4. Closing Index Marke Capializaion Today USD (Unadjused Marke Cap Today USD)... 17 1.5. Securiy Index Of Price In Local... 18 1.6. Noe on Index Calculaion In Local Currency... 20 1.7. Conversion of Indexes Ino Anoher Currency... 20 Secion 2: MSCI Daily Toal Reurn (DTR) Index Mehodology22 2.1. Calculaion Mehodology... 22 2.1.1. Dividend Impac... 23 2.1.2. DTR Index Level from Securiy Informaion (Securiy DTR)... 23 2.1.3. Securiy Conribuion o he Index... 23 2.1.4. Securiy Daily Toal Reurn... 24 2.1.4.1. Securiy Daily Gross Reurn... 24 2.1.4.2. Securiy Daily Ne Reurn... 26 2.1.5. Iniial Securiy Weigh... 28 2.1.6. Currency... 29 MSCI Daa Operaions & Technology 2014 MSCI Inc. All righs reserved. Please refer o he disclaimer a he end of his documen 2
Index Mehodology MSCI Index Calculaion Mehodology Augus 2014 2.1.7. Number Of Shares And Index Weighing Facor... 29 2.2. Reinvesmen Mehodology... 29 2.2.1. Timing of reinvesmen... 30 2.2.2. Reinvesmen Rules... 30 2.2.3. Dividends Resuling in a Reinvesmen Only... 31 2.2.4. Dividends Resuling in a Reinvesmen or in a Price Adjusmen... 31 2.2.5. Dividends Resuling in a Price Adjusmen Only... 32 2.3. Processing Rules... 33 2.3.1. Dividend Daa... 33 2.3.2. Corporae Acions... 33 2.3.3. Lae Dividends... 34 2.3.4. Correcions... 34 2.3.5. Paymen Defaul... 34 2.3.6. Counry Excepions... 35 2.3.7. Taxes On Dividends... 37 2.3.7.1. Tax Credi... 37 2.3.7.2. Wihholding Tax... 37 2.3.7.2.1. Counry Excepions... 38 2.3.8. Definiions... 40 Appendix I: Sunday Index Calculaion... 42 Appendix II: Annualized Traded Value Raio (ATVR) and Annual Traded Value... 45 Appendix III: Raes... 48 Appendix IV: Singapore & Malaysia A Hisory of Inclusion in he Emerging and Developed Markes Indexes... 49 Appendix V: Singapore and Singapore Free... 52 Appendix VI: Wihholding Tax Raes... 53 Appendix VII: Closing Prices Policy... 56 Appendix VIII: Counry Composiion of MSCI Seleced Regional Indexes... 68 Appendix IX: MSCI Real Time Indexes... 75 Appendix X: Index Calculaion Mehodology Using Index Divisors... 77 MSCI Daa Operaions & Technology 2014 MSCI Inc. All righs reserved. Please refer o he disclaimer a he end of his documen 3
Index Mehodology MSCI Index Calculaion Mehodology Augus 2014 Appendix XI: Index Correcion Policy... 91 Appendix XII: MSCI Indexes wih IDCo Fair Value Pricing... 92 MSCI Index Calculaion Mehodology Book Tracked Changes93 Clien Service Informaion is Available 24 Hours a Day... 104 Noice and Disclaimer... 104 Abou MSCI... 104 MSCI Daa Operaions & Technology 2014 MSCI Inc. All righs reserved. Please refer o he disclaimer a he end of his documen 4
Index Mehodology MSCI Index Calculaion Mehodology Augus 2014 Inroducion This mehodology book provides an exhausive descripion of he rules and guidelines followed by MSCI for consrucion and mainenance of he MSCI Global Invesable Marke Indexes. Any excepions o hese rules are reviewed and approved by he MSCI Equiy Index Commiee and are publically announced in advance of he implemenaion. This mehodology book describes MSCI s general Index calculaion mehodology for he MSCI Equiy Indexes. MSCI provides wo ways of calculaing MSCI Equiy Indexes, eiher by using he Price Adjusmen Facor (PAF) or he Index Divisors (Index Divisors mehodology available as an appendix). These policies and guidelines affec all securiies across he MSCI Equiy Indexes and producs. Unless oherwise saed he policies and guidelines apply herefore o all securiies in he MSCI Equiy universe. Please noe ha he index consrucion mehodology and oher guiding principles for he MSCI Sandard Indexes can be found in MSCI Global Invesable Marke Indexes Mehodology Indexes documen, available a www.. MSCI Daa Operaions & Technology 2014 MSCI Inc. All righs reserved. Please refer o he disclaimer a he end of his documen 5
Index Mehodology MSCI Index Calculaion Mehodology Augus 2014 MSCI Equiy Indexes The MSCI Equiy Indexes measure he performance of a se of equiy securiies over ime. The MSCI Equiy Indexes are calculaed using he Laspeyres concep of a weighed arihmeic average ogeher wih he concep of chain-linking. MSCI counry and regional equiy Indexes are calculaed in local currency as well as in USD, wih price, gross and ne reurns. Index levels are also available in several oher currencies such as AUD, BRL, CAD, CHF, CNY, EUR, GBP, HKD, INR, JPY, KRW, RUB and SGD. While he local currency series of regional indexes canno be replicaed in he real world, i represens he heoreical performance of an index wihou any impac from foreign exchange flucuaions a coninuously hedged porfolio. Indexes are calculaed 5 days a week, from Monday o Friday wih he excepion of a selecion of indexes ha have Sunday calculaions available. In cerain cases, where here are no qualifying securiies, i is possible for MSCI Indexes o be empy following a securiy deleion or GICS change. If an index becomes empy i would be dynamically disconinued or rupured. I is hen possible for he index o be re-sared once a new securiy qualifies for he index, and his index level would be rebased o an appropriae level a ha ime. MSCI Daa Operaions & Technology 2014 MSCI Inc. All righs reserved. Please refer o he disclaimer a he end of his documen 6
Index Mehodology MSCI Index Calculaion Mehodology Augus 2014 Secion 1: MSCI Price Index Mehodology Price indexes measure he marke prices performance for a selecion of securiies. They are calculaed daily and, for some of hem, on a real ime basis. Each index capures he marke capializaion weighed reurn of all consiuens included in he index. 1.1. Price Index Level As a general principle, oday s index level is obained by applying he change in he marke performance o he previous period index level. IndexAdjusedMarkeCapUSD PriceIndex LevelUSD PriceIndexLevelUSD 1 * IndexIniialMarkeCapUSD IndexAdjusedMarkeCapForLocal PriceIndex LevelLocal PriceIndexLevelLocal 1 * IndexIniialMarkeCapUSD Where: PriceIndex LevelUSD 1 is he Price Index level in USD a ime -1 IndexAdjus edmarkecapusd is he Adjused Marke Capializaion of he index in USD a ime IndexInii almarkecapusd is he Iniial Marke Capializaion of he index in USD a ime PriceIndex LevelLocal 1 is he Price Index level in local currency a ime -1 IndexAdjus edmarkecapforlocal is he Adjused Marke Capializaion of he index in USD convered using FX rae as of -1 and used for local currency index a ime Noe: IndexInii almarkeca pusd was previously called IndexUnadjusedMarkeCapPrevio ususd 1.1.1. Index Marke Capializaion IndexAdjusedMarkeCapUSD si, EndOfDayNumberOfShares 1 * PricePerShare FXrae * InclusionFacor * PAF MSCI Daa Operaions & Technology 2014 MSCI Inc. All righs reserved. Please refer o he disclaimer a he end of his documen 7
Index Mehodology MSCI Index Calculaion Mehodology Augus 2014 IndexAdjusedMarkeCapForLocal EndOfDayNumberOfShares ( 1 * PricePerShare FXrae * InclusionFacor * PAF ICI * ICI si, 1 1 ) IndexIniialMarkeCapUSD EndOfDayNumberOfShares 1 si, 1 * PricePerShare FXrae 1 * InclusionFacor Where: EndOfDayNu mberofshares 1 is he number of shares of securiy s a he end of day -1. PricePerSh are is he price per share of he securiy s a ime. PricePerSh are 1 is he price per share of securiy s a ime -1. InclusionF acor is he inclusion facor of he securiy s a ime. The inclusion facor can be one or he combinaion of he following facors: Foreign Inclusion Facor, Domesic Inclusion Facor, Growh Inclusion Facor, Value Inclusion Facor, Index Inclusion Facor (*). PAF is he Price Adjusmen Facor of he securiy s a ime. FXrae is he FX rae of he price currency of securiy s vs USD a ime. I is he value of 1 USD in foreign currency. FXrae 1 is he FX rae of he price currency of securiy s vs USD a ime -1. I is he value of 1 USD in foreign currency. ICI is he Inernal Currency Index of price currency a ime. The ICI is differen han 1 when a counry changes he inernal value of is currency (e.g. from Turkish Lira o New Turkish Lira ICI = 1,000,000). ICI 1 is he Inernal Currency Index of price currency a ime -1. (*) From June 1 2007 o May 31 2008, o calculae he sandard or small cap index marke capializaion (excep for FM counries and China A), he securiy marke cap should be muliplied by he Sandard or Small Cap Index Inclusion Facor. From Sepember 1 2009 o November 30 2009, o calculae he China A and relaed indexes markes capializaion, he China A securiies marke cap should be muliplied by he Sandard Index Inclusion Facor. The Sandard Index Inclusion Facor is solely used for he compuaion of he MSCI Sandard Indexes, and no for he Large Cap, Mid Cap and Provisional Indexes, as hese are all consruced using he Global Invesable Marke Indexes mehodology and were no subjec o he ransiion mehodology. MSCI Daa Operaions & Technology 2014 MSCI Inc. All righs reserved. Please refer o he disclaimer a he end of his documen 8
Index Mehodology MSCI Index Calculaion Mehodology Augus 2014 The Small Cap Index Inclusion Facor is no used for he compuaion of he MSCI Emerging Markes and AC Small Cap Indexes, MSCI Small Cap Value and Growh, MSCI Provisional Small Cap and MSCI Small Cap Secors Indexes, as hese are all consruced using he Global Invesable Marke Indexes mehodology and were no subjec o he ransiion mehodology. Noe: The only difference in he formulas beween USD and local currency indexes calculaion is ha he same exchange rae is used in he numeraor and denominaor for local currency, which means ha here is no impac of currency change in he performance. Time varian exchange raes are used for he USD calculaion. MSCI Daa Operaions & Technology 2014 MSCI Inc. All righs reserved. Please refer o he disclaimer a he end of his documen 9
Index Mehodology MSCI Index Calculaion Mehodology Augus 2014 1.1.2. Example of calculaion Example of index calculaion. Day 1 NumberOf Shares - 1 PricePer Share PricePer Share -1 Inclusion Facor PAF FXrae FXrae -1 IndexAdjused MarkeCapUSD (see 1.1.1) IndexIniialMar kecapusd (see 1.1.1) IndexAdjused MarkeCapFor Local (see 1.1.1) Securiy A 150000 152.60 154.00 0.75 1 1.50 1.49 11,445,000 11,627,517 11,521,812 Securiy B 26000 98.40 105.00 1.00 1 1.15 1.14 2,224,696 2,394,737 2,244,211 Securiy C 290000 1592.60 1603.50 0.60 1 125.00 125.50 2,216,899 2,223,179 2,208,067 Securiy D 360000 268.00 265.30 0.85 1 1.50 1.50 54,672,000 54,121,200 54,672,000 Toal Index 70,558,595 70,366,633 70,646,090-1 daily perf PriceIndexLevelUSD (see 1.1) 100.273 100.000 0.27% PriceIndexLevelLocal (see 1.1) 100.397 100.000 0.40% Day 2 Securiy C is ex Righ issue 1 : 1 @ 1300 NumberOf Shares - 1 PricePer Share PricePer Share -1 Inclusion Facor PAF FXrae FXrae -1 IndexAdjused MarkeCapUSD (see 1.1.1) IndexIniialMar kecapusd (see 1.1.1) IndexAdjused MarkeCapFor Local (see 1.1.1) Securiy A 150000 160.00 152.60 0.75 1 1.51 1.50 11,920,530 11,445,000 12,000,000 Securiy B 26000 95.00 98.40 1.00 1 1.16 1.15 2,129,310 2,224,696 2,147,826 Securiy C 290000 1450.00 1592.60 0.60 1.1034 124.50 125.00 2,236,145 2,216,899 2,227,200 Securiy D 360000 265.00 268.00 0.85 1 1.51 1.50 53,701,987 54,672,000 54,060,000 Toal Index 69,987,971 70,558,595 70,435,026-1 daily perf PriceIndexLevelUSD (see 1.1) 99.462 100.273-0.81% PriceIndexLevelLocal (see 1.1) 100.221 100.397-0.18% Day 3 Securiy C has an increase of number of shares follow ing he righ issue ex on Day 2 NumberOf Shares - 1 PricePer Share PricePer Share -1 Inclusion Facor PAF FXrae FXrae -1 IndexAdjused MarkeCapUSD (see 1.1.1) IndexIniialMar kecapusd (see 1.1.1) IndexAdjused MarkeCapFor Local (see 1.1.1) Securiy A 150000 165.00 160.00 0.75 1 1.50 1.51 12,375,000 11,920,530 12,293,046 Securiy B 26000 102.00 95.00 1.00 1 1.17 1.16 2,266,667 2,129,310 2,286,207 Securiy C 580000 1545.00 1450.00 0.60 1 124.45 124.50 4,320,289 4,053,012 4,318,554 Securiy D 360000 266.00 265.00 0.85 1 1.50 1.51 54,264,000 53,701,987 53,904,636 Toal Index 73,225,956 71,804,839 72,802,443-1 daily perf PriceIndexLevelUSD (see 1.1) 101.430 99.462 1.98% PriceIndexLevelLocal (see 1.1) 101.614 100.221 1.39% MSCI Daa Operaions & Technology 2014 MSCI Inc. All righs reserved. Please refer o he disclaimer a he end of his documen 10
Index Mehodology MSCI Index Calculaion Mehodology Augus 2014 1.2. Price Index Level (Alernaive Calculaion Formula Conribuion Mehod) Anoher way o calculae he index level would be o use he iniial weigh and price reurn of he individual securiies included in he index: PriceIndexLevelUSD PriceIndexLevelLocal PriceIndexLevelUSD -1 PriceIndexLevelLocal *(1 1 si, *(1 SecuriyPr iceconribuiontoind exusd ) si, SecuriyPr iceconribuiontoind exlocal ) 1.2.1. Securiy Conribuion o he Index SecuriyPr iceconribuiontoindexusd IniialSec uriyweigh * SecuriyDailyPriceRe urnusd SecuriyPr iceconribuiontoindexlocal IniialSec uriyweigh * SecuriyDailyPriceRe urnlocal Where: SecuriyDa ilypricere urnusd is he price reurn in USD of securiy s a ime. SecuriyDa ilypricere urnlocal is he price reurn of securiy s a ime convered using FX rae as of -1 and used for local currency calculaion a ime. MSCI Daa Operaions & Technology 2014 MSCI Inc. All righs reserved. Please refer o he disclaimer a he end of his documen 11
Index Mehodology MSCI Index Calculaion Mehodology Augus 2014 1.2.2. Today s Iniial Securiy Weigh IniialSec uriyweigh si, EndOfDayNumberOfShares FXrae 1 1 EndOfDayNumberOfShares ( FXrae 1 * PricePerShare 1 1 * PricePerShare * InclusionFacor 1 * InclusionFacor ) * 100 si, SecuriyIniialFullM arkecapusd * InclusionFacor (SecuriyIniialFull MarkeCapUSD * InclusionFacor ) * 100 SecuriyIniialMarkeCapUSD IndexIniialMarkeCapUSD * 100 Where: EndOfDayNu mberofshares 1 1 PricePerSh are is he number of shares of securiy s a he end of day -1. is he price per share of securiy s a ime -1. InclusionF acor is he inclusion facor of securiy s a ime. The inclusion facor can be one or he combinaion of he following facors: Foreign Inclusion Facor, Domesic Inclusion Facor, Growh Inclusion Facor, Value Inclusion Facor, Index Inclusion Facor (*). FXrae 1 is he FX rae of he price currency of securiy s vs USD a ime -1. I is he value of 1 USD in foreign currency. (*) From June 1 2007 o May 31 2008, o calculae he sandard or small cap index marke capializaion (excep for FM Counries and China A), he securiy marke cap should be muliplied by he Sandard or Small Cap Index Inclusion Facor. From Sepember 1 2009 o November 30 2009, o calculae he China A and relaed indexes markes capializaion, he China A securiies marke cap should be muliplied by he Sandard Index Inclusion Facor. The Sandard Index Inclusion Facor is solely used for he compuaion of he MSCI Sandard Indexes, and no for he Large Cap, Mid Cap and Provisional Indexes, as hese are all consruced using he Global Invesable Marke Indexes mehodology and were no subjec o he ransiion mehodology. The Small Cap Index Inclusion Facor is no used for he compuaion of he MSCI Emerging Markes and AC Small Cap Indexes, MSCI Small Cap Value and Growh, MSCI Provisional Small Cap and MSCI MSCI Daa Operaions & Technology 2014 MSCI Inc. All righs reserved. Please refer o he disclaimer a he end of his documen 12
Index Mehodology MSCI Index Calculaion Mehodology Augus 2014 Small Cap Secors Indexes, as hese are all consruced using he Global Invesable Marke Indexes mehodology and were no subjec o he ransiion mehodology. Noe: The SecuriyIn iialfullm arkecapinsecuriypr icecurrency is also available in he securiy files and corresponds o he SecuriyIn iialfullm arkecapusd muliplied by he FXrae 1 The EndOfDayNu mberofshares 1 used o calculae oday s iniial weigh, available in he MSCI producs daed day, is shown as Number of Shares (Today Index). 1.2.3. Securiy Daily Price Reurn SecuriyDa ilypricere urnusd SecuriyAd jusedmarkecapusd SecuriyIniialMarkeCapUSD 1 *100 SecuriyDa ilypricere urnlocal SecuriyAd jusedmarkecapforlocal SecuriyIniialMarkeCapUSD 1 *100 SecuriyAd jusedmarkecapforlocal EndOfDayNumberOfShares 1 * PricePerShare * InclusionFacor * PAF FXrae 1 ICI * ICI 1 SecuriyAd jusedmarkecapusd EndOfDayNumberOfShares 1 * PricePerShare FXrae * InclusionFacor * PAF SecuriyIniialMarkeCapUSD EndOfDayNumberOfShares 1 * PricePerShare FXrae 1 1 * InclusionFacor Where: SecuriyAd jusedmarkecapforlocal is he Adjused Marke Capializaion of securiy s in USD convered using FX rae as of -1 MSCI Daa Operaions & Technology 2014 MSCI Inc. All righs reserved. Please refer o he disclaimer a he end of his documen 13
Index Mehodology MSCI Index Calculaion Mehodology Augus 2014 SecuriyAd jusedmarkecapusd is he Adjused Marke Capializaion of securiy s in USD convered using FX rae as of SecuriyIn iialmarkecapusd is he Iniial Marke Capializaion of securiy s in USD a ime EndOfDayNu mberofshares 1 PricePerSh are is he price per share of securiy s a ime. PricePerSh are 1 is he number of shares of securiy s a he end of day -1. is he price per share of securiy s a ime -1. InclusionF acor is he inclusion facor of securiy s a ime. The inclusion facor can be one or he combinaion of he following facors: Foreign Inclusion Facor, Domesic Inclusion Facor, Growh Inclusion Facor, Value Inclusion Facor, Index Inclusion Facor (*). PAF is he Price Adjusmen Facor of securiy s a ime. FXrae is he FX rae of he price currency of securiy s vs USD a ime. I is he value of 1 USD in foreign currency. FXrae 1 is he FX rae of he price currency of securiy s vs USD a ime -1. I is he value of 1 USD in foreign currency. ICI is he Inernal Currency Index of price currency a ime. The ICI is differen han 1 when a counry changes he inernal value of is currency (e.g. from Turkish Lira o New Turkish Lira ICI = 1,000,000). ICI 1 is he Inernal Currency Index of price currency a ime -1. (*) From June 1 2007 o May 31 2008, o calculae he sandard or small cap index marke capializaion (excep for FM Counries and China A), he securiy marke cap should be muliplied by he Sandard or Small Cap Index Inclusion Facor. From Sepember 1 2009 o November 30 2009, o calculae he China A and relaed indexes markes capializaion, he China A securiies marke cap should be muliplied by he Sandard Index Inclusion Facor. The Sandard Index Inclusion Facor is solely used for he compuaion of he MSCI Sandard Indexes, and no for he Large Cap, Mid Cap and Provisional Indexes, as hese are all consruced using he Global Invesable Marke Indexes mehodology and were no subjec o he ransiion mehodology. The Small Cap Index Inclusion Facor is no used for he compuaion of he MSCI Emerging Markes and AC Small Cap Indexes, MSCI Small Cap Value and Growh, MSCI Provisional Small Cap and MSCI Small Cap Secors Indexes, as hese are all consruced using he Global Invesable Marke Indexes mehodology and were no subjec o he ransiion mehodology. MSCI Daa Operaions & Technology 2014 MSCI Inc. All righs reserved. Please refer o he disclaimer a he end of his documen 14
Index Mehodology MSCI Index Calculaion Mehodology Augus 2014 1.2.4. Example of calculaion using conribuion Day 1 NumberOf Shares - 1 PricePer Share PricePer Share -1 Inclusion Facor PAF FXrae FXrae -1 IniialSecuri yweigh (see 1.2.2) SecuriyDaily Price_Reurn USD (see 1.2.3) SecuriyPrice conribuionto IndexUSD (see 1.2.1) SecuriyDaily Price_Reurn Local (see 1.2.3) SecuriyPrice conribuionto IndexLocal (see 1.2.1) Securiy A 150000 152.60 154.00 0.75 1 1.50 1.49 16.52% -1.57% -0.26% -0.91% -0.15% Securiy B 26000 98.40 105.00 1.00 1 1.15 1.14 3.40% -7.10% -0.24% -6.29% -0.21% Securiy C 290000 1592.60 1603.50 0.60 1 125.00 125.50 3.16% -0.28% -0.01% -0.68% -0.02% Securiy D 360000 268.00 265.30 0.85 1 1.50 1.50 76.91% 1.02% 0.78% 1.02% 0.78% Toal Index 100.00% 0.27% 0.40% -1 daily perf PriceIndexLevelUSD (see 1.2) 100.273 100.000 0.27% PriceIndexLevelLocal (see 1.2) 100.397 100.000 0.40% Day 2 Securiy C is ex Righ issue 1 : 1 @ 1300 NumberOf Shares - 1 PricePer Share PricePer Share -1 Inclusion Facor PAF FXrae FXrae -1 IniialSecuri yweigh (see 1.2.2) SecuriyDaily Price_Reurn USD (see 1.2.3) SecuriyPrice conribuionto IndexUSD (see 1.2.1) SecuriyDaily Price_Reurn Local (see 1.2.3) SecuriyPrice conribuionto IndexLocal (see 1.2.1) Securiy A 150000 160.00 152.60 0.75 1 1.51 1.50 16.22% 4.15% 0.67% 4.85% 0.79% Securiy B 26000 95.00 98.40 1.00 1 1.16 1.15 3.15% -4.29% -0.14% -3.46% -0.11% Securiy C 290000 1450.00 1592.60 0.60 1.1034 124.50 125.00 3.14% 0.87% 0.03% 0.46% 0.01% Securiy D 360000 265.00 268.00 0.85 1 1.51 1.50 77.48% -1.77% -1.37% -1.12% -0.87% Toal Index 100.00% -0.81% -0.18% -1 daily perf PriceIndexLevelUSD (see 1.2) 99.462 100.273-0.81% PriceIndexLevelLocal (see 1.2) 100.221 100.397-0.18% Day 3 Securiy C has an increase of number of shares follow ing he righ issue ex on Day 2 NumberOf Shares - 1 PricePer Share PricePer Share -1 Inclusion Facor PAF FXrae FXrae -1 IniialSecuri yweigh (see 1.2.2) SecuriyDaily Price_Reurn USD (see 1.2.3) SecuriyPrice conribuionto IndexUSD (see 1.2.1) SecuriyDaily Price_Reurn Local (see 1.2.3) SecuriyPrice conribuionto IndexLocal (see 1.2.1) Securiy A 150000 165.00 160.00 0.75 1 1.50 1.51 16.60% 3.81% 0.63% 3.13% 0.52% Securiy B 26000 102.00 95.00 1.00 1 1.17 1.16 2.97% 6.45% 0.19% 7.37% 0.22% Securiy C 580000 1545.00 1450.00 0.60 1 124.45 124.50 5.64% 6.59% 0.37% 6.55% 0.37% Securiy D 360000 266.00 265.00 0.85 1 1.50 1.51 74.79% 1.05% 0.78% 0.38% 0.28% Toal Index 100.00% 1.98% 1.39% -1 daily perf PriceIndexLevelUSD (see 1.2) 101.430 99.462 1.98% PriceIndexLevelLocal (see 1.2) 101.614 100.221 1.39% MSCI Daa Operaions & Technology 2014 MSCI Inc. All righs reserved. Please refer o he disclaimer a he end of his documen 15
Index Mehodology MSCI Index Calculaion Mehodology Augus 2014 1.3. Nex Day Iniial Securiy Weigh IniialSec uriyweigh 1 si, 1 EndOfDayNumberOfShares * PricePerShare * InclusionFacor FXrae EndOfDayNumberOfShares * PricePerShare ( * InclusionFacor FXrae 1 1 * 100 ) si, 1 SecuriyIniialFullM arkecapusd 1 (SecuriyIniialFull MarkeCapUSD * InclusionFacor 1 1 * InclusionFacor 1 * 100 ) SecuriyIniialMarkeCapUSD IndexIniialMarkeCapUSD 1 1 * 100 Where: EndOfDayNu mberofshares is he number of shares of securiy s a he end of day. PricePerSh are is he price per share of he securiy s a ime. InclusionF acor is he inclusion facor of he securiy s a ime +1. The inclusion facor can be one or he combinaion of he following facors: Foreign Inclusion Facor, Domesic Inclusion Facor, Growh Inclusion Facor, Value Inclusion Facor, Index Inclusion Facor (*). 1 FXrae is he FX rae of he price currency of securiy s vs USD a ime. I is he value of 1 USD in foreign currency. (*) From June 1 2007 o May 31 2008, o calculae he sandard or small cap index marke capializaion (excep for FM Counries and China A), he securiy marke cap should be muliplied by he Sandard or Small Cap Index Inclusion Facor. From Sepember 1 2009 o November 30 2009, o calculae he China A and relaed indexes markes capializaion, he China A securiies marke cap should be muliplied by he Sandard Index Inclusion Facor. The Sandard Index Inclusion Facor is solely used for he compuaion of he MSCI Sandard Indexes, and no for he Large Cap, Mid Cap and Provisional Indexes, as hese are all consruced using he Global Invesable Marke Indexes mehodology and were no subjec o he ransiion mehodology. The Small Cap Index Inclusion Facor is no used for he compuaion of he MSCI Emerging Markes and AC Small Cap Indexes, MSCI Small Cap Value and Growh, MSCI Provisional Small Cap and MSCI MSCI Daa Operaions & Technology 2014 MSCI Inc. All righs reserved. Please refer o he disclaimer a he end of his documen 16
Index Mehodology MSCI Index Calculaion Mehodology Augus 2014 Small Cap Secors Indexes, as hese are all consruced using he Global Invesable Marke Indexes mehodology and were no subjec o he ransiion mehodology. The lis of index consiuens as of ime +1 is considered in he calculaion. Noes: The SecuriyIn iialfullm arkecapinsecuriypr icecurrency 1 is also available in he securiy files and corresponds o he SecuriyIn iialfullm arkecapusd muliplied by he 1 FXrae The EndOfDayNu mberofshares used o calculae nex day s iniial weigh, available in he MSCI producs daed day, is shown as Number of Shares (Nex Day Index). 1.4. Closing Index Marke Capializaion Today USD (Unadjused Marke Cap Today USD) The value of he index marke capializaion as of he close of a day is calculaed as follows: IndexClosingMarkeCapUSD si, ClosingNumberOfShares * PricePerShare * InclusionFacor FXrae Where ClosingNum berofshares is he number of shares of securiy s a he close of. PricePerSh are is he securiy price per share of securiy s a ime. InclusionF acor is he inclusion facor of he securiy s a ime. The inclusion facor can be one or he combinaion of he following facors: Foreign Inclusion Facor, Domesic Inclusion Facor, Growh Inclusion Facor, Value Inclusion Facor, Index Inclusion Facor (*). FXrae is he FX rae of he price currency of securiy s vs USD a ime. I is he value of 1 USD in foreign currency. (*) From June 1 2007 o May 31 2008, o calculae he sandard or small cap index marke capializaion (excep for FM Counries and China A), he securiy marke cap should be muliplied by he Sandard or Small Cap Index Inclusion Facor. From Sepember 1 2009 o November 30 2009, o calculae he China A and relaed indexes markes capializaion, he China A securiies marke cap should be muliplied by he Sandard Index Inclusion Facor. MSCI Daa Operaions & Technology 2014 MSCI Inc. All righs reserved. Please refer o he disclaimer a he end of his documen 17
Index Mehodology MSCI Index Calculaion Mehodology Augus 2014 The Sandard Index Inclusion Facor is solely used for he compuaion of he MSCI Sandard Indexes, and no for he Large Cap, Mid Cap and Provisional Indexes, as hese are all consruced using he Global Invesable Marke Indexes mehodology and were no subjec o he ransiion mehodology. The Small Cap Index Inclusion Facor is no used for he compuaion of he MSCI Emerging Markes and AC Small Cap Indexes, MSCI Small Cap Value and Growh, MSCI Provisional Small Cap and MSCI Small Cap Secors Indexes, as hese are all consruced using he Global Invesable Marke Indexes mehodology and were no subjec o he ransiion mehodology. The lis of index consiuens as of ime should be considered in he calculaion. Effecively his figure represens he shares a he close on, and does no include any of he effecs of corporae acions due a he open of he marke he nex day. The closing marke capializaion uses oday s price,, as i represens he marke capializaion a he close of he calculaion day. 1.5. Securiy Index Of Price In Local The securiy Index of Price is disribued in MSCI daily and monhly securiy producs [I represens he price reurn from period o period by uilizing he concep of an index of performance wih an arbirary base value. The index of price is fully adjused for capial changes and is expressed in local currency. SecuriyAd jusedmarkecapforlocal SecuriyPr iceindexlevel SecuriyPr iceindexlevel 1 * SecuriyIniialMarkeCapUSD SecuriyAd jusedmarkecapforlocal EndOfDayNumberOfShares 1 * PricePerShare * InclusionFacor * PAF FXrae 1 ICI * ICI 1 SecuriyIniialMarkeCapUSD EndOfDayNumberOfShares Where: 1 * PricePerShare FXrae 1 1 * InclusionFacor SecuriyPr iceindexlevel 1 is Securiy Price Index level a ime -1 SecuriyAd jusedmarkecapforlocal is he Adjused Marke Capializaion of securiy s in USD convered using FX rae as of -1 MSCI Daa Operaions & Technology 2014 MSCI Inc. All righs reserved. Please refer o he disclaimer a he end of his documen 18
Index Mehodology MSCI Index Calculaion Mehodology Augus 2014 SecuriyIniialMarkeCapUSD is he Iniial Marke Capializaion of securiy s in USD a ime EndOfDayNu mberofshares is he number of shares of securiy s a he end of day -1. 1 PricePerShare 1 is he price per share of securiy s a ime. PricePerSh are is he price per share of securiy s a ime -1. InclusionFacor is he inclusion facor of securiy s a ime. The inclusion facor can be one or he combinaion of he following facors: Foreign Inclusion Facor, Domesic Inclusion Facor Growh Inclusion Facor, Value Inclusion Facor, Index Inclusion Facor (*). PAF is he Price Adjusmen Facor of securiy s a ime. FXrae 1 is he FX rae of he price currency of securiy s vs USD a ime -1. I is he value of 1 USD in foreign currency. ICI is he Inernal Currency Index of price currency a ime. The ICI is differen han 1 when a counry changes he inernal value of is currency (e.g. from Turkish Lira o New Turkish Lira ICI = 1,000,000). ICI 1 is he Inernal Currency Index of price currency a ime -1. (*) From June 1 2007 o May 31 2008, o calculae he sandard or small cap index marke capializaion (excep for FM Counries and China A), he securiy marke cap should be muliplied by he Sandard or Small Cap Index Inclusion Facor. From Sepember 1 2009 o November 30 2009, o calculae he China A and relaed indexes markes capializaion, he China A securiies marke cap should be muliplied by he Sandard Index Inclusion Facor. The Sandard Index Inclusion Facor is solely used for he compuaion of he MSCI Sandard Indexes, and no for he Large Cap, Mid Cap and Provisional Indexes, as hese are all consruced using he Global Invesable Marke Indexes mehodology and were no subjec o he ransiion mehodology. The Small Cap Index Inclusion Facor is no used for he compuaion of he MSCI Emerging Markes and AC Small Cap Indexes, MSCI Small Cap Value and Growh, MSCI Provisional Small Cap and MSCI Small Cap Secors Indexes, as hese are all consruced using he Global Invesable Marke Indexes mehodology and were no subjec o he ransiion mehodology. MSCI Daa Operaions & Technology 2014 MSCI Inc. All righs reserved. Please refer o he disclaimer a he end of his documen 19
Index Mehodology MSCI Index Calculaion Mehodology Augus 2014 1.6. Noe on Index Calculaion In Local Currency The MSCI Counry and Regional Indexes are calculaed in local currency as well as in USD. The concep of a local currency calculaion excludes he impac of currency flucuaions. Noe ha for a counry index, he local currency index will no be he same as an index calculaed wih he official currency of ha counry, if here is more han one currency of lising. All currencies of lising are considered in he index calculaion in local currency where curren prices and previous day prices -1 are convered ino USD using he same exchange rae (exchange rae -1 ) in he numeraor and denominaor. As a consequence, he FX facor drops ou of he equaion. The USD calculaion includes exchange raes a and -1. Therefore, he local currency calculaion only represens he price appreciaion or depreciaion of he securiies, whereas he USD calculaion also accouns for he performance of he currency (or currencies) relaive o he USD. 1.7. Conversion of Indexes Ino Anoher Currency An index can be calculaed ino any currency by convering he index in USD ino he seleced currency using he formula below. If he base dae of he index is prior o he sar dae of he currency, he indexes should be rebased and convered using he following formula: IndexLevelinCurrency 100* IndexLevelinUSD IndexLevelinUSD currency_ base_ dae FXrae * FXrae currency_ base_ dae Noe ha 100 in he formula is he base value. This base value can be differen han 100 (e.g. 1000 depending on he indexes). If he base dae of he index is equal or poserior o he sar dae of he currency, he indexes should be convered only, using he following formula: FXrae IndexLevelinCurrency IndexLevelinUSD * FXrae index_ base_ dae MSCI Daa Operaions & Technology 2014 MSCI Inc. All righs reserved. Please refer o he disclaimer a he end of his documen 20
Index Mehodology MSCI Index Calculaion Mehodology Augus 2014 Example: Calculaion of he The World Index in EUR as of Ocober 20, 1999: Noe ha he sar dae of EUR is 31-Dec-1998 The World Index in USD as of 31-Dec-98 = 1,149.951577 The World Index as of 20- Oc- 99 = 1,224.048387 FxRae EUR vs USD as of 31-Dec- 98 = 0.8516074 FxRae EUR vs USD as of 20-Oc-99 = 0.9279451 WorldIndexinEUR 10/20/99 WorldIndexinUSD 100* WorldIndexinUSD 10/20/99 31/12/98 * EURvsUSDRae EURvsUSDRae 10/20/99 12/31/98 1224.048387 0.9279451 100* * 115.985 1149.951577 0.8516074 MSCI Daa Operaions & Technology 2014 MSCI Inc. All righs reserved. Please refer o he disclaimer a he end of his documen 21
Index Mehodology MSCI Index Calculaion Mehodology Augus 2014 Secion 2: MSCI Daily Toal Reurn (DTR) Index Mehodology Toal reurn indexes measure he marke performance, including price performance and income from regular cash disribuions (cash dividend paymens or capial repaymens). Regular cash disribuions paid ou of share capial or capial conribuion reserves are reaed in he same manner as regular cash dividends paid ou of reained earnings. This income is reinvesed in he index and hus makes up par of he oal index performance. MSCI s Daily Toal Reurn (DTR) mehodology reinvess regular cash disribuions in indexes on he exdae of such disribuions.. I applies o all index families. Regular cash disribuions are no considered in price indexes, excep for special dividends and capial repaymens deemed exraordinary in cerain circumsances described below. The sandard Daily Toal Reurn (DTR) Indexes are calculaed and disribued on a daily basis. The indexes are available in USD and local currency (no currency impac), wih gross and ne oal reurn. 2.1. Calculaion Mehodology DTRIndexLevelUSD DTRIndexLevelUSD 1 (IndexAdjusedMarkeCapUSD IndexDividendImpacUSD * IndexIniialMarkeCapUSD ) DTRIndexLevelLocal DTRIndexLevelLocal 1 (IndexAdjusedMarkeCapForLocal IndexDividendImpacForLocal * IndexIniialMarkeCapUSD ) Where: DTRIndexLevelUSD 1 is he Daily Toal Reurn index level in USD a ime -1 IndexDivid endimpacusd is he gross or ne amoun of dividends in USD o be reinvesed in he index in USD a ime IndexDivid endimpacforlocal is he gross or ne amoun of dividend in USD convered using FX rae as of -1 o be reinvesed in he local currency index a ime DTRIndexLevelLocal 1 he Daily Toal Reurn index level in local currency a ime -1 MSCI Daa Operaions & Technology 2014 MSCI Inc. All righs reserved. Please refer o he disclaimer a he end of his documen 22
Index Mehodology MSCI Index Calculaion Mehodology Augus 2014 2.1.1. Dividend Impac IndexDividendImpacUSD si, EndOfDayNumberOfShares exdae1 * DividendPerShare * InclusionFacor FXrae IndexDividendImpacForLocal EndOfDayNumberOfShares ( exdae1 si, 1 * DividendPerShare * InclusionFacor ICI * Fxrae ICI 1 ) Where: EndOfDayNu mberofshares ex is he number of shares of he securiy s a he end of he dividend ex-dae-1. dae1 DividendPe rshare is he gross or ne dividend per share expressed in he same currency uni as he price per share of he securiy s o be reinvesed a ime. 2.1.2. DTR Index Level from Securiy Informaion (Securiy DTR) Anoher way o calculae a DTR index would be o use he securiy iniial weigh and securiy oal reurn: DTRIndexLevelUSD DTRIndexLevelLocal DTRIndexLevelUSD 1 * (1 SecuriyToalReurnConribuionToIndexUSD ) si, DTRIndexLevelLocal 1 * (1 SecuriyToalReurnConribuionToIndexLocal ) si, 2.1.3. Securiy Conribuion o he Index Calculaion Formulas: SecuriyTo alreurnconribuiontoindexusd IniialSec uriyweigh * SecuriyDailyToalRe urnusd MSCI Daa Operaions & Technology 2014 MSCI Inc. All righs reserved. Please refer o he disclaimer a he end of his documen 23
Index Mehodology MSCI Index Calculaion Mehodology Augus 2014 SecuriyTo alreurnconribuiontoindexlocal IniialSec uriyweigh * SecuriyDailyToalRe urnlocal Where: SecuriyDa ilytoalre urnusd is he gross or ne reurn in USD of securiy s a ime. SecuriyDa ilytoalre urnlocal is he gross or ne reurn of securiy s a ime convered using he FX rae as of -1 and used for local currency calculaion a ime. 2.1.4. Securiy Daily Toal Reurn 2.1.4.1. Securiy Daily Gross Reurn SecuriyDailyGrossReurnUSD (SecuriyAdjusedMarkeCapUSD SecuriyGrossDividendImpacUSD ) 1 * 100 SecuriyIniialMarkeCapUSD SecuriyDailyGrossReurnLocal (SecuriyAdjusedMarkeCapForLocal SecuriyGrossDividendImpacForLocal SecuriyIniialMarkeCapUSD ) 1 * 100 Where SecuriyGrossDividendImpacUSD EndOfDayNumberOfShares exdae1 * GrossDividendPerShare FXrae * InclusionFacor SecuriyGrossDividendImpacForLocal EndOfDayNumberOfShares exdae1 * GrossDividendPerShare * InclusionFacor FXrae 1 * ICI ICI 1 Where SecuriyAd jusedmarkecapforlocal is he Adjused Marke Capializaion of securiy s in USD convered using FX rae as of -1 MSCI Daa Operaions & Technology 2014 MSCI Inc. All righs reserved. Please refer o he disclaimer a he end of his documen 24
Index Mehodology MSCI Index Calculaion Mehodology Augus 2014 SecuriyAd jusedmarkecapusd is he Adjused Marke Capializaion of securiy s in USD convered using FX rae as of SecuriyIn iialmarkecapusd is he Iniial Marke Capializaion of securiy s in USD a ime InclusionF acor is he inclusion facor of he securiy s a ime. The inclusion facor can be one or he combinaion of he following facors: Foreign Inclusion Facor, Domesic Inclusion Facor, Growh Inclusion Facor, Value Inclusion Facor, Index Inclusion Facor (*). FXrae is he FX rae of he price currency of securiy s vs USD a ime. I is he value of 1 USD in foreign currency. FXrae 1 is he FX rae of he price currency of securiy s vs USD a ime -1. I is he value of 1 USD in foreign currency. EndOfDayNu mberofshares ex is he number of shares of securiy s a he end of he dividend ex-dae-1. dae1 GrossDivid endpershare is he gross dividend per share expressed in he same currency uni as he price per share of he securiy s o be reinvesed a ime. ICI is he Inernal Currency Index of price currency a ime. The ICI is differen han 1 when a counry changes he inernal value of is currency (e.g. from Turkish Lira o New Turkish Lira ICI = 1,000,000). ICI 1 is he Inernal Currency Index of price currency a ime -1. (*) From June 1 2007 o May 31 2008, o calculae he sandard or small cap index marke capializaion (excep for FM Counries and China A), he securiy marke cap should be muliplied by he Sandard or Small Cap Index Inclusion Facor. From Sepember 1 2009 o November 30 2009, o calculae he China A and relaed indexes markes capializaion, he China A securiies marke cap should be muliplied by he Sandard Index Inclusion Facor. The Sandard Index Inclusion Facor is solely used for he compuaion of he MSCI Sandard Indexes, and no for he Large Cap, Mid Cap and Provisional Indexes, as hese are all consruced using he Global Invesable Marke Indexes mehodology and were no subjec o he ransiion mehodology. The Small Cap Index Inclusion Facor is no used for he compuaion of he MSCI Emerging Markes and AC Small Cap Indexes, MSCI Small Cap Value and Growh, MSCI Provisional Small Cap and MSCI Small Cap Secors Indexes, as hese are all consruced using he Global Invesable Marke Indexes mehodology and were no subjec o he ransiion mehodology. MSCI Daa Operaions & Technology 2014 MSCI Inc. All righs reserved. Please refer o he disclaimer a he end of his documen 25
Index Mehodology MSCI Index Calculaion Mehodology Augus 2014 2.1.4.2. Securiy Daily Ne Reurn SecuriyDailyNeReu rnusd (SecuriyAdjusedMarkeCapUSD SecuriyNeDividendImpacUSD SecuriyIniialMarkeCapUSD ) 1 * 100 SecuriyDailyNeReu rnlocal (SecuriyAdjusedMarkeCapForLocal SecuriyNeDividendImpacForLocal SecuriyIniialMarkeCapUSD ) 1 * 100 Where SecuriyNeDividendImpacUSD EndOfDayNumberOfShares exdae1 * NeDividendPerShare FXrae * InclusionFacor SecuriyNeDividendImpacForLocal EndOfDayNumberOfShares exdae1 * NeDividendPerShare * InclusionFacor ICI * FXrae ICI 1 1 Where SecuriyAd jusedmarkecapforlocal is he Adjused Marke Capializaion of securiy s in USD convered using FX rae as of -1 SecuriyAd jusedmarkecapusd is he Adjused Marke Capializaion of securiy s in USD convered using FX rae as of SecuriyIn iialmarkecapusd is he Iniial Marke Capializaion of securiy s in USD a ime InclusionF acor is he inclusion facor of he securiy s a ime. The inclusion facor can be one or he combinaion of he following facors: Foreign Inclusion Facor, Domesic Inclusion Facor, Growh Inclusion Facor, Value Inclusion Facor, Index Inclusion Facor (*). FXrae is he FX rae of he price currency of securiy s vs USD a ime. I is he value of 1 USD in foreign currency. MSCI Daa Operaions & Technology 2014 MSCI Inc. All righs reserved. Please refer o he disclaimer a he end of his documen 26
Index Mehodology MSCI Index Calculaion Mehodology Augus 2014 FXrae 1 is he FX rae of he price currency of securiy s vs USD a ime -1. I is he value of 1 USD in foreign currency. EndOfDayNu mberofshares ex is he number of shares of he securiy s a he end of dividend ex-dae-1. dae1 NeDividen dpershare is he ne dividend per share expressed in he same currency uni as he price per share of he securiy s o be reinvesed a ime. ICI is he Inernal Currency Index of price currency a ime. The ICI is differen han 1 when a counry changes he inernal value of is currency (e.g. from Turkish Lira o New Turkish Lira ICI = 1,000,000). ICI 1 is he Inernal Currency Index of price currency a ime -1. (*) From June 1 2007 o May 31 2008, o calculae he sandard or small cap index marke capializaion (excep for FM Counries and China A), he securiy marke cap should be muliplied by he Sandard or Small Cap Index Inclusion Facor. From Sepember 1 2009 o November 30 2009, o calculae he China A and relaed indexes markes capializaion, he China A securiies marke cap should be muliplied by he Sandard Index Inclusion Facor. The Sandard Index Inclusion Facor is solely used for he compuaion of he MSCI Sandard Indexes, and no for he Large Cap, Mid Cap and Provisional Indexes, as hese are all consruced using he Global Invesable Marke Indexes mehodology and were no subjec o he ransiion mehodology. The Small Cap Index Inclusion Facor is no used for he compuaion of he MSCI Emerging Markes and AC Small Cap Indexes, MSCI Small Cap Value and Growh, MSCI Provisional Small Cap and MSCI Small Cap Secors Indexes, as hese are all consruced using he Global Invesable Marke Indexes mehodology and were no subjec o he ransiion mehodology. MSCI Daa Operaions & Technology 2014 MSCI Inc. All righs reserved. Please refer o he disclaimer a he end of his documen 27
Index Mehodology MSCI Index Calculaion Mehodology Augus 2014 2.1.5. Iniial Securiy Weigh IniialSecuriyWeigh si, EndOfDayNumberOfShares FXrae 1 EndOfDayNumberOfShares ( FXrae 1 1 * PricePerShare 1 * InclusionFacor *100 1 * PricePerShare 1 * InclusionFacor ) si, SecuriyIniialFullMarkeCapUSD * InclusionFacor *100 (SecuriyIniialFullM arkecapusd * InclusionFacor ) SecuriyIniialM arkecapusd IndexIniialM arkecapusd *100 Where: EndOfDayNu mberofshares 1 is he number of shares of securiy s a he end of day -1. PricePerSh are 1 is he price per share of securiy s a ime -1. InclusionF acor is he inclusion facor of securiy s a ime. The inclusion facor can be one or he combinaion of he following facors: Foreign Inclusion Facor, Domesic Inclusion Facor, Growh Inclusion Facor, Value Inclusion Facor, Index Inclusion Facor (*). FXrae 1 is he FX rae of he price currency of securiy s vs USD a ime -1. I is he value of 1 USD in foreign currency. (*) From June 1 2007 o May 31 2008, o calculae he sandard or small cap index marke capializaion (excep for FM counries and China A), he securiy marke cap should be muliplied by he Sandard or Small Cap Index Inclusion Facor. From Sepember 1 2009 o November 30 2009, o calculae he China A and relaed indexes markes capializaion, he China A securiies marke cap should be muliplied by he Sandard Index Inclusion Facor. The Sandard Index Inclusion Facor is solely used for he compuaion of he MSCI Sandard Indexes, and no for he Large Cap, Mid Cap and Provisional Indexes, as hese are all consruced using he Global Invesable Marke Indexes mehodology and were no subjec o he ransiion mehodology. The Small Cap Index Inclusion Facor is no used for he compuaion of he MSCI Emerging Markes and AC Small Cap Indexes, MSCI Small Cap Value and Growh, MSCI Provisional Small Cap and MSCI MSCI Daa Operaions & Technology 2014 MSCI Inc. All righs reserved. Please refer o he disclaimer a he end of his documen 28
Index Mehodology MSCI Index Calculaion Mehodology Augus 2014 Small Cap Secors Indexes, as hese are all consruced using he Global Invesable Marke Indexes mehodology and were no subjec o he ransiion mehodology. 2.1.6. Currency For index calculaions, all dividends are convered ino USD a he spo rae of he ex dae. 2.1.7. Number Of Shares And Index Weighing Facor A dividend amoun is expressed per share eniled o he dividend. Since he day before he ex-dae is he las day on which he share is eniled o he dividend, he oal dividend per securiy reinvesed ino an index is equal o he number of shares a he close of he ex-dae-1 muliplied by he dividend per share. In addiion, a weighing facor of a securiy in he index is applied o he oal dividend amoun o be reinvesed. This can be he Domesic Inclusion Facor (DIF), he Foreign Inclusion Facor (FIF), he Value Inclusion Facor (VIF), he Growh Inclusion Facor (GIF) or any inclusion facor considered in he price index calculaion. 2.2. Reinvesmen Mehodology Gross Daily Toal Reurn This series approximaes he maximum possible reinvesmen of regular cash disribuions (cash dividends or capial repaymens). The amoun reinvesed is he cash disribued o individuals residen in he counry of he company, bu does no include ax credis. Ne Daily Toal Reurn This series approximaes he minimum possible reinvesmen of regular cash disribuions. Provided ha he regular capial repaymen is no subjec o wihholding ax, he reinvesmen in he Ne Daily Toal Reurn is free of wihholding ax. Effecive December 1, 2009, he regular cash dividend is reinvesed afer deducion of wihholding ax by applying he maximum rae of he company s counry of incorporaion applicable o insiuional invesors. MSCI uses differen wihholding axes depending if he indexes are inernaional or domesic: Inernaional indexes: he maximum rae applicable o non-residen insiuional invesors who do no benefi from double axaion reaies. Domesic indexes: he maximum rae applicable o residen insiuional invesors For more informaion on how axes are applicable o dividends, please refer o he Appendix for deails abou he wihholding ax raes for he various counries. MSCI Daa Operaions & Technology 2014 MSCI Inc. All righs reserved. Please refer o he disclaimer a he end of his documen 29
Index Mehodology MSCI Index Calculaion Mehodology Augus 2014 2.2.1. Timing of reinvesmen The amoun of an announced regular cash disribuion is reinvesed on he ex-dae of such disribuion on is principal exchange. For securiies rading on more han one exchange, MSCI uses he ex-dae a he exchange from which MSCI sources he securiy s price. If a securiy does no rade on he ex-dae or on he scheduled reinvesmen dae of he regular cash disribuion, he reinvesmen is posponed o he day when he securiy resumes rading. The scheduled reinvesmen dae of a dividend can be a dae laer han he dividend ex-dae in cases including, bu no limied o a lae dividend or a dividend correcion. 2.2.2. Reinvesmen Rules Disribuion Type Regular Cash Dividend Special Cash Dividend Size of securiy s cum price <5% <5% Recurrence Price Adjusmen Facor Included in he securiy s yield More deails in secion - - No Yes 2.2.3 5% 5% Less han 3 consecuive years 3 consecuive years or more Less han 3 consecuive years 3 consecuive years or more No No Yes Yes No Yes No Yes 2.2.4 Disribuion Type Capial Repaymen Regular i.e. in lieu of regular dividend Price Adjusmen Facor Included in he securiy s yield More deails in secion Yes No Yes 2.2.3 No Yes No 2.2.5 There are wo principal guidelines in regards o cash disribuions reinvesmens: A cash disribuion in he form of regular cash dividend or regular capial repaymen - is reinvesed among all he consiuens in an index. I is no considered in he MSCI Price indexes. Noe ha hese disribuions are aken ino accoun in he underlying securiy s yield calculaion. A special cash dividend ha is unusually large, i.e. greaer han or equal o 5% of he securiy cum price, or a capial repaymen deemed o be exraordinary i.e. unlikely o recur on a regular basis, is reinvesed by applying a PAF and is hence aken ino accoun in MSCI Price indexes as well as in he MSCI DTR Indexes. These guidelines are discussed in greaer deail below. MSCI Daa Operaions & Technology 2014 MSCI Inc. All righs reserved. Please refer o he disclaimer a he end of his documen 30
Index Mehodology MSCI Index Calculaion Mehodology Augus 2014 2.2.3. Dividends Resuling in a Reinvesmen Only The following cash disribuions are reinvesed in he MSCI DTR Index: Regular Cash Dividend A regular cash dividend is a disribuion of cash made by a company o is shareholders and is paid ou of operaing profis or reained earnings. Regular cash dividends, regardless of heir size, are reinvesed on he ex-dae in he MSCI DTR Indexes. Regular Capial Repaymen A capial repaymen or reurn of capial is characerized by a cash disribuion from he company s share capial or capial surplus o is shareholders. A capial repaymen, regardless of is size, is considered as regular, if he cash disribuion is in lieu of a regular cash dividend, or is in line wih he dividend policy of he company or wih he hisorical cash disribuions. Provided ha he capial repaymen is no subjec o wihholding ax, he reinvesmen in he MSCI DTR Indexes is free of wihholding ax. In Taiwan, a cash disribuion paid ou of capial surplus is considered as regular unless specified by he company ha he disribuion is deemed o be exraordinary. The cash disribuion is reinvesed in he MSCI DTR Indexes. Regarding he wihholding ax reamen, please refer o sub-secion 2.3.7.2.1 below. Opional Dividend In he case of an opional dividend, he company offers shareholders he choice of receiving he dividend eiher in cash or in shares. However, shareholders elecing he cash opion may receive he dividend consideraion in cash or shares, or some combinaion of cash and shares. MSCI assumes ha shareholders receive he defaul disribuion. If no defaul disribuion is available, MSCI assumes ha shareholders elec he cash opion. MSCI herefore reinvess he dividend amoun on he ex-dae in he MSCI DTR Indexes. Please refer o he secion 4.3 of he MSCI Corporae Evens Mehodology book for more informaion regarding opional dividends reamen. Ineres on Capial The ineres on capial dividend is a cash paymen o shareholders accouned for as a pre-ax ineres expense by he company. The balance shee and he book value do no change. Ineress on capial are common in Brazil. 2.2.4. Dividends Resuling in a Reinvesmen or in a Price Adjusmen The dividends below are reinvesed in he MSCI DTR Index if he dividend impac on he cum price is less han 5%. However, if he impac is greaer han or equal o 5%, he dividend will be refleced in he MSCI Index hrough a price adjusmen. Special/Exraordinary Cash Dividend MSCI Daa Operaions & Technology 2014 MSCI Inc. All righs reserved. Please refer o he disclaimer a he end of his documen 31