Index construction
summary
- Coverage of companies by third-party independent index calculation agent.
- At least 50% of company’s revenue from providing primarily cybersecurity-oriented products.
- Listing on eligible stock exchanges from developed and developing countries.
- In case of the Chinese shares, listing on the stock exchanges in the developed world or participation in the Connect program.
- Market capitalization of at least $300 million and an average daily dollar volume greater than $1,000,000 for each of the three months preceding the Screening Date.
- The companies are assigned a “Focus Score” that captures the perceived degree of a company’s overall involvement across development themes in cybersecurity.
- The number of highs, i.e. high exposure to a given development theme, allows to classify a company as “Broad Focus” (highs > 3) or “Narrow Focus” (highs < 3).
- The companies are assigned a “Growth Score” and classified into “Growing Fast”, “Growing” or “N/A” based on their Revenue CAGR, computed as the compound average annual revenue growth over the trailing three years, two years or one year, depending on the data availability.
- Companies are assigned a Weight Factor based on their Focus and Growth Score, with 1.33 for “Broad Focus” and “Growing Fast”, 0.75 for “Narrow Focus” and “Growing and 1 for all other companies.
- The index is rebalanced semi-annually in March and September.
Screening for Growth and Focus Scores
- Companies classified as “Growing Fast” or “Growing” and having either “Broad” or “Narrow” Focus Score will be selected for inclusion. Companies that are currently in the index will not be deleted if their Revenue CAGR is above 5%.
- If less that 25 companies pass both Growth and Focus screens, the remaining companies from “Broad Focus” and “Narrow Focus” will be ranked by Revenue CAGR and the highest selected for inclusion.
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