capitalization range of the Underlying Index was approximately $3.2 billion
to $18.6 billion. The Fund will be concentrated in an industry or group of
industries to the extent the Underlying Index is concentrated in an industry or
group of industries. As of September 16, 2022, the primary sectors within the
Underlying Index are Industrials, Information Technology, and Consumer
first step in the ESG security selection process scores companies on stakeholder
criteria and an issuer’s exposure to global sustainability trends. Companies are
scored relative to other companies within the same industry. The stakeholder
of customers, including advertising practices, after sales service and support,
and anti-competitive behaviors.
of employees, including working conditions, employee retention, gender equality,
training and career opportunities.
initiatives and compliance with new environmental legislation.
standards and oversight, including supplier adherence to fair labor standards.
governance, including quality of governance and ethics, adherence to accounting
standards and anti-bribery efforts.
impact and how the company is viewed by populations in the area where the
global sustainability trends Include:
Change: Activities related to the production of renewable energy and
decarbonizing business activities.
and Waste: Activities related to the efficient utilization of resources,
recycling, and mitigating the impact on ecosystems.
and Innovation: Activities that drive higher industrial and resource
efficiencies and protecting data privacy and the resilience of digital networks.
and Wellness: Activities related to providing healthy products and services,
improving air quality, and investing in human capital through job creation,
gender equality and decent working conditions.
Shifts: Activities related to providing products and services to aging
populations in developed countries and supporting population growth in emerging
countries through investment in infrastructure and the food supply chain.
sector-specific analysis evaluates companies within the same sector each other,
using criteria specific to the particular sector. Except for the excluded
activities described below, the ESG security selection process seeks to maintain
exposure to all industry sectors of the economy (e.g., financials, industrials,
consumer discretionary, consumer staples, materials, health care, energy,
utilities and information technology). The ESG selection process analyzes
securities comprising approximately 95% of the market capitalization of equity
securities domiciled in the United States. The companies with an overall ranking
in the top 70% of the eligible universe within each industry sector based on
this ESG selection process and that are part of the Solactive GBS United States
400 Index, which seeks to track the performance of the largest 400
mid-capitalization companies listed on an exchange in the U.S., are included in
the Underlying Index, unless a company is excluded as a result of the second
step in the ESG security selection process. The Underlying Index identifies U.S.
issuers primarily based on the location the issuer’s shares are principally
traded and its location of incorporation.
second step in the ESG security selection process is an exclusionary screen
based on any continued and significant non-compliance with the Principles of the
United Nation’s Global Compact, which address human rights, labor,
environmental, and anti-corruption matters, as well as the exclusion of
companies engaged in certain businesses beyond minimum thresholds (e.g.,
companies that operate in countries with oppressive regimes, that operate in
adult content, alcohol, armament, gambling, nuclear, and tobacco sectors, or
that utilize animal testing or genetic modification in research and
development). As a result of this second step, the