Methodology Change | Solactive World ex-Switzerland Fiscal Strength Government IG Bond China Cap CHF Index| Effective Date November 01, 2024

Today (October 8, 2024) Solactive announces the following changes to the methodology of the following Indices:

Rationale for Methodology Change

Solactive has determined that in order to maintain the core objective and stability standards of the Index, the below changes will be implemented into the index methodology. Given the combined challenges of debt sustainability, governance issues, and the potential for unpredictable interventions, maintaining high exposure to Chinese bonds carries significant risks. By capping China’s weight at zero, the index can:

• Mitigate Risk: Reduce the potential impact of China’s unique risk profile on overall index performance.
• Enhance Stability: Align with risk management strategies that prioritize transparency, stability, and governance quality.
• Protect Against Shocks: Safeguard the index from adverse effects stemming from regulatory changes or financial instability within China.

Change to the Index Guideline

The following Methodology change will be implemented in the following point of the Index Guideline:

2.2 Selection of The Index Components

From (old version):

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China’s final weight in the INDEX  will be the minimum of China A. or China B. The difference between the weights of A and B for the other countries will be proportionally reinvested in the INDEX .

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To (new version):

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China’s final weight in the INDEX will be capped in a range between 0 and the minimum of the weight of China in the PARENT INDEX . The weight for other countries will be proportionally distributed in the INDEX .  A yearly assessment of the regulatory and governance situation around China is implemented (” China annual process”), carried out each September, taking effect for the October holdings.

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