The Index aims to reflect the AUD hedged performance characteristics
of a subset of large and mid-cap securities within the MSCI World ex
Australia Index (“Parent Index”) which are selected for their relatively
high-quality characteristics when compared to peers. To construct the
Index, the quality score of each security in the Parent Index is calculated
based on three fundamental variables:
► Return on equity: to identify profitable companies.
► Earnings variability: to determine stocks with earnings
stability.
► Debt to Equity: to find stocks with low leverage.
Securities are then ranked based on their quality score with Index
weights calculated based on the Quality Weight: Quality Score * Market
Capitalization Weight in the Parent Index.
To ensure diversification and mitigate concentration risk in the Index,
as at each rebalance date, the maximum issuer weight is capped at 5%
and sector weights are capped at +/- 5% of the sector weight of the
Parent Index.
Construction of the Index is done using a fixed number of securities with
the aim of ensuring a high exposure to the quality factor is attained
while maintaining sufficient index market capitalization and number of
securities coverage.
The Index rebalances semi‐annually in May and November. Refer to the
section of this PDS titled “Additional information about the Index” for
further information. |