Rule Change for MVAIPO and MVDAIPO

1.1.1 Pure-Play/Thematic Screening

Old

• Data Centers and AI Hardware, including companies that generate at least 50% (25% for current components) of revenue from:

– Ownership or operation of data centers, including those predominantly used for digital asset mining.

– AI Hardware

* Companies must derive at least 50% of their revenue from the semiconductor industry and operate as fabless semiconductor companies that are engaged in the design and sale of semiconductors and hardware (excluding electronic design automation solutions) while outsourcing most semiconductor fabrication and product manufacturing,

* Only companies that offer products or services that are used in AI processes are eligible.

* Companies that derive more than 50% of their revenue from general analog or mixed signal integrated circuits (including on-device wireless communications chips and systems), discrete or power semiconductors, memory devices, image processors, or materials used for visual displays are excluded unless at least 50% of their revenue is derived from a product specifically designed to run AI processes.

New

• Data Centers and AI Infrastructure, including companies that generate at least 50% (25% for current components) of revenue from:

– Ownership or operation of data centers, including those predominantly used for digital asset mining.

– Neocloud providers, defined as specialized cloud computing providers focused on delivering scalable GPU-as-a-Service (GPUaaS) for artificial intelligence and high-performance computing workloads, that generate at least 50% of their revenue from such activities.

– AI Hardware

* Companies must derive at least 50% of their revenue from the semiconductor industry and operate as fabless semiconductor companies that are engaged in the design and sale of semiconductors and hardware (excluding electronic design automation solutions) while outsourcing most semiconductor fabrication and product manufacturing,

* Only companies that offer products or services that are used in AI processes are eligible.

* Companies that derive more than 50% of their revenue from general analog or mixed signal integrated circuits (including on-device wireless communications chips and systems), discrete or power semiconductors, memory devices, image processors, or materials used for visual displays are excluded unless at least 50% of their revenue is derived from a product specifically designed to run AI processes.

– AI as a Service, defined as companies with at least 50% of revenue from AI-based search and Large Language Models (LLMs) products and services

1.2.2 Initial Public Offerings, Special Purpose Acquisition Companies, and Spin-Offs 

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Modified investability rules are applied for recent Initial Public Offerings (IPOs), spin-offs and post-merger/acquisition Special Purpose Acquisition Companies (SPACs). Such companies qualify for fast-track addition to the investable universe once; either at the next regularly scheduled review if it has been trading since at least the last trading day of the month two months prior to the review month or else at the following regularly scheduled review. In order to be added to the index the IPO security has to meet all of the following size and liquidity requirements:

• the IPO must have a full market capitalization exceeding 300.00 million USD,

• the IPO must have a free-float factor of at least 10%,

• the IPO must have an average daily trading volume of at least 1.00 million USD, and

• the IPO must have traded at least 0.25 million shares per month (or per 22 days).

This rule is applicable for newly spun-off companies and post-merger/acquisition SPACs (using the merger/acquisition date like an IPO date) as well.

New

Modified investability rules are applied for recent Initial Public Offerings (IPOs), spin-offs and post-merger/acquisition Special Purpose Acquisition Companies (SPACs). Such companies qualify for fast-track addition to the investable universe once; either at the next regularly scheduled review if it has been trading since at least the last trading day of the month two months prior to the review month or else at the following regularly scheduled review. In order to be added to the index the IPO security has to meet all of the following size and liquidity requirements:

• the IPO must have a full market capitalization exceeding 300.00 million USD,

• the IPO must have a free-float factor of at least 10%,

• the IPO must have an average daily trading volume of at least 1.00 million USD, and

• the IPO must have traded at least 0.25 million shares per month (or per 22 days).

This rule is applicable for newly spun-off companies and post-merger/acquisition SPACs (using the merger/acquisition date like an IPO date) as well.

In addition, the below special periodical cases are also considered for IPO/spin-offs (not considering SPACs):

• In case an IPO/Spin-off takes place between the close of the last business day of February, May, August, and November and the close of the second Wednesday of March, June, September, and December, respectively: If this IPO/Spin-off exceeds a full market capitalization of USD 5 bn on closing date of the IPO effective date, and it ranks within the top 7 of the AI as a Service tier of free-float market capitalization of the eligible universe, it will be added to the index on the review implementation date with a weighting according to the index weighting scheme following the definitions under 2.3.

• In case an IPO/Spin-off takes place after the close of the second Wednesday until the third Friday of March, June, September, and December: If this IPO/Spin-off exceeds a full market capitalization of USD 5 bn and is related to the AI as a Service tier on the third Friday of March, June, September, and December following the IPO effective date/if the third Friday is the IPO effective date, it will be added after close of the Friday of the following week with a maximum weight of 5% based on the market data as of the Friday following the third Friday of March, June, September, and December/if the third Friday is the IPO effective date.

• For all other time periods: If the IPO/Spin-off exceeds a full market capitalization of USD 5 bn and is related to the AI as a Service tier on the Friday following the IPO effective date/if the Friday is the IPO effective date, it will be added after close of the Friday of the following week with a maximum weight of 5% based on the market data as of the Friday following the IPO effective date/if the Friday is the IPO effective date.

For these special periodical IPO/Spin-off cases, the following applies:

• The IPO must have a free-float factor of at least 5%, and

• Due to lack of historical data, no liquidity rule is applied.

2.2 Selection Procedure

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Upon an index reconstitution, securities included in the eligible universe are selected to the index based on the following procedure which is applied to each tier separately. Securities selected to each tier will be combined to comprise the index components.

• Power Generation and Electric Grid Equipment

1. All securities included in the eligible universe are selected.

• Construction and Engineering

1. All securities included in the eligible universe are selected.

• Electric Utilities and Power Producers

1. All securities included in the eligible universe are ranked by free-float market capitalization in descending order.

2. Securities ranking in the top 10 are selected as components. The remaining components are selected from the highest ranking current index components ranked between 11 and 15.

• Data Centers and AI Hardware

– Data Centers

1. All securities included in the eligible universe are selected.

– AI Hardware

1. All securities included in the eligible universe are ranked by free-float market capitalization in descending order.

2. Securities ranking in the top 7 are selected as components. The remaining components are selected from the highest ranking current index components ranked between 8 and 10.

In addition there is a minimum of five components from each tier. If there are fewer than five eligible stocks from any tier, additional securities are added by the Index Owner’s decision until at least five stocks from each tier are included.

New

Upon an index reconstitution, securities included in the eligible universe are selected to the index based on the following procedure which is applied to each tier separately. Securities selected to each tier will be combined to comprise the index components.

• Power Generation and Electric Grid Equipment

1. All securities included in the eligible universe are selected.

• Construction and Engineering

1. All securities included in the eligible universe are selected.

• Electric Utilities and Power Producers

1. All securities included in the eligible universe are ranked by free-float market capitalization in descending order.

2. Securities ranking in the top 10 are selected as components. The remaining components are selected from the highest ranking current index components ranked between 11 and 15.

• Data Centers and AI Infrastructure

– Data Centers and Neocloud providers

1. All securities included in the eligible universe are selected.

– AI Hardware

1. All securities included in the eligible universe are ranked by free-float market capitalization in descending order.

2. Securities ranking in the top 7 are selected as components. The remaining components are selected from the highest ranking current index components ranked between 8 and 10.

– AI as a Service

1. All securities included in the eligible universe are ranked by free-float market capitalization in descending order.

2. Securities ranking in the top 7 are selected as components. The remaining components are selected from the highest ranking current index components ranked between 8 and 10.

In addition there is a minimum of five components from each tier. If there are fewer than five eligible stocks from any tier, additional securities are added by the Index Owner’s decision until at least five stocks from each tier are included

2.3 Weighting Scheme 

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Upon an index rebalance, components selected to the index will be weighted according to a tiered modified float-adjusted market cap weighting strategy as follows:

• The maximum security weight is 8% (4% for Data Centers and AI Hardware companies and index components with less than 50% exposure to the activities outlined in section 1.1.1):

• Tier weights are as follows:

– 50% : Power Generation and Electric Grid Equipment

– 15% : Construction and Engineering

– 15% : Electric Utilities and Power Producers

 – 20% : Data Centers and AI Hardware

• Components are weighted based on their free-float adjusted market capitalization in proportion to all other components in the same tier multiplied by the tier weight.

• If a security’s weight exceeds the maximum weight, the weight will be reduced to the maximum weight and the excess weight will be redistributed among uncapped components equally within the same tier. This process is repeated until the sum of all components’ weights is equal to 100% and no component’s weight exceeds the maximum security weight.

• In case the aggregated weight of all index components with less than 50% exposure to the activities outlined in section 1.1.1 exceeds 20%, a weighting cap factor will be applied to ensure the aggregated weight of such index components does not exceed 20%. The excess weight shall be proportionally redistributed within the respective tier among the uncapped index components with more than 50% exposure to the activities outlined in section 1.1.1 .

• The maximum weight of components and the aggregate weight of components with less than 50% exposure to the activities outlined in section 1.1.1 takes precedence over tier weights. In case the fixed tier weights create a conflict with the maximum component weights, tier weights may be adjusted accordingly (on a proportional basis) to allow the aggregate weight of all index components to equal 100% while satisfying all other capping scheme constraints. If the aggregate weight of components with a weight greater than or equal to 5% exceeds 50% the following procedure is implemented:

• The weight of the smallest component, by float-adjusted market capitalization, with a weight of 5% or more and all other components with a weight between 4.5% and 5%, will be reduced to 4.5%.

• The remaining weight will be redistributed among all remaining components with a weight less than 4.5%, such that the aggregate tier weights do not change, on a pro-rata basis.

• This procedure is repeated until the aggregate weight of components with a weight of 5% or more is less than or equal to 50%.

New

Upon an index rebalance, components selected to the index will be weighted according to a tiered modified float-adjusted market cap weighting strategy as follows:

• The maximum security weight is 8% (4% for Data Centers and AI Infrastructure companies and index components with less than 50% exposure to the activities outlined in section 1.1.1):

• Tier weights are as follows:

– 50% : Power Generation and Electric Grid Equipment

– 12.5% : Construction and Engineering

– 12.5% : Electric Utilities and Power Producers

– 25% : Data Centers and AI Infrastructure

• Components are weighted based on their free-float adjusted market capitalization in proportion to all other components in the same tier multiplied by the tier weight.

• If a security’s weight exceeds the maximum weight, the weight will be reduced to the maximum weight and the excess weight will be redistributed among uncapped components equally within the same tier. This process is repeated until the sum of all components’ weights is equal to 100% and no component’s weight exceeds the maximum security weight.

• In case the aggregated weight of all index components with less than 50% exposure to the activities outlined in section 1.1.1 exceeds 20%, a weighting cap factor will be applied to ensure the aggregated weight of such index components does not exceed 20%. The excess weight shall be proportionally redistributed within the respective tier among the uncapped index components with more than 50% exposure to the activities outlined in section 1.1.1 .

• The maximum weight of components and the aggregate weight of components with less than 50% exposure to the activities outlined in section 1.1.1 takes precedence over tier weights. In case the fixed tier weights create a conflict with the maximum component weights, tier weights may be adjusted accordingly (on a proportional basis) to allow the aggregate weight of all index components to equal 100% while satisfying all other capping scheme constraints.

If the aggregate weight of components with a weight greater than or equal to 5% exceeds 50% the following procedure is implemented:

• The weight of the smallest component, by float-adjusted market capitalization, with a weight of 5% or more and all other components with a weight between 4.5% and 5%, will be reduced to 4.5%.

• The remaining weight will be redistributed among all remaining components with a weight less than 4.5%, such that the aggregate tier weights do not change, on a pro-rata basis.

• This procedure is repeated until the aggregate weight of components with a weight of 5% or more is less than or equal to 50%.